a.

Page

I. Public Corporation: Introduction

Notes

Corporation- an artificial being created by operation of law, having the right of succession and the powers,
attributes and properties expressly authorized by law or incident to its existence.

b. Classes of Corporations
Private Corporation
-those formed for some private purpose,
benefit, aim or end.
DEFINITION
-created for private aim, gain, or benefits
of its members
-created by the will of the incorporators
with the recognizance of the State.
-constitute a voluntary agreement by and
among its members

PURPOSE OF
CREATION
CREATORS

Public Corporation
-one created by the State either by general or
special act for purposes of administration of
local government or rendering service in the
public interest.
-established for purposes connected with the
administration of civil or local governments
-creations of the State either by general or
special act
-involuntary consequence of legislation

NATURE

Metropolitan Manila Development Authority vs. Bel-Air Village Association, Inc

G.R. No. 135962, March 27, 2000
A local government is a "political subdivision of a nation or state which is constituted by law and has
substantial control of local affairs." The Local Government Code of 1991 defines a local government unit as a "body
politic and corporate"-- one endowed with powers as a political subdivision of the National Government and as a
corporate entity representing the inhabitants of its territory. Local government units are the provinces, cities,
municipalities and barangays. They are also the territorial and political subdivisions of the state
c.

Classes of Public Corporations

Quasi-public Corporations
-created as agencies of the State for narrow and
limited purposes without the powers and liabilities of
self-governing corporations.

Municipal Corporations/Local Government

-body politic and corporate constituted by the
incorporation of the inhabitants for purposes of local
government thereof.
-established by law partly as an agency of the State to
assist in the civil government of the country, but chiefly
to regulate and administer the local or internal affairs of
the city, town or district which is incorporated.
-political subdivision of a nation or state which is
constituted by law and has substantial control of local
affairs

d. Elements: Municipal Corporations

1. A legal creation or incorporation
2. A corporate name by which the artificial personality or legal entity is known and in which all corporate
acts are done
3. Inhabitants constituting the population who are invested with the political and corporate power which
are executed through duly constituted officers and agents
4. A place or territory within which the local civil government and corporate functions are exercised
e.

Local Government: Dual Personality

Public or Governmental
-it is an agent of the state for the government
of the territory and the inhabitants within the
local government limits
-exercises by delegation a part of the

Private or Corporate
-acts in a similar category as a business corporation,
performing functions not strictly governmental or
political
-patrimonial powers

-they act as an agency of the community in the

administration of local affairs.

Page

sovereignty of the state

-they serve as an instrumentality of the State
in carrying out the functions of government.

Notes

f. Local Governments: Power and Functions

i.
Sources of Power of Local governments
1. Constitution
2. R. A. No. 7160
3. All existing laws, acts, decrees. Executive orders, proclamations and administrative orders not
inconsistent with the Constitution and R. A. No. 7160.
ii.

g.

Classification of local government power

1.
Express power- those granted in express words
2.
Implied powers- those necessarily or fairly implied in or incident to the powers expressly
granted
3.
Inherent powers- those essential to the declared objects and purposes of the corporation not
simply convenient but indispensable.
4.
Legislative powers- power to make laws
5.
Executive powers- power to execute laws.
6.
Intramural powers- those exercised within the corporate limits of a municipal corporation
7.
Extramural powers- those exercised outside of the corporate limits, like those given for the
protection of water supply, prevention of nuisance and also for police forces
8.
Governmental powers- administer the powers of the State and promoting the public welfare
within it. Example: Police power, Power of Eminent Domain. Power of Taxation
9.
Municipal powers- those for the special benefit and advantage of the community. Example:
erection of waterworks, gas works, electric plants, from which profits may be derived by the municipality.
R.A. 7924 (Metropolitan Manila Development Authority)

This Act states the policy of the State to treat Metro Manila as a special development and administrative region and
certain basic services affecting or involving Metro Manila as metro wide services more efficiently and effectively
planned, supervised and coordinated by a development authority as created herein, without prejudice to the autonomy of
the affected LGU. Among its pertinent provisions are:
1) Scope of MMDA (metro-wide) services: Development planning; transport and traffic management; solid
waste disposal and management; Flood control; Urban renewal; zoning and land use planning; health
sanitation; Urban protection and pollution control; pu8blic safety;
2) Creation of Metro Manila Council (MMC) consisting of all mayors in Metro Manila
3) Powers and Functions of MMDA, mainly to formulate, coordinate, and regulate implementation of above
metro-wide services
4) Functions of MMC, mainly to approve projects of MMDA
5) Function of MMDA chairman: Execute policies of MMC and manage operations of MMDA; appointment
power; prepare budget of MMDA; disciplinary power on subordinates; ex officio board member (or his
representative) of departments related to activities of MMDA such as DOTC, DOH, etc.
6) Institutional linkages of MMDA: NEDA, NGOs , accredited peoples organizations
Only political units of the government can exercise police power
Metropolitan Manila Development Authority vs. Bel-Air Village Association, Inc
G.R. No. 135962, March 27, 2000
It will be noted that the powers of the MMDA are limited to the following acts: formulation, coordination,
regulation, implementation, preparation, management, monitoring, setting of policies, installation of a system and
administration. There is no syllable in R. A. No. 7924 that grants the MMDA police power, let alone legislative
power.
The MMAs jurisdiction was limited to addressing common problems involving basic services that
transcended local boundaries. It did not have legislative power. Its power was merely to provide the local
government units technical assistance in the preparation of local development plans. Any semblance of legislative
power it had was confined to a "review [of] legislation proposed by the local legislative assemblies to ensure
consistency among local governments and with the comprehensive development plan of Metro Manila," and to
"advise the local governments accordingly."

Notes
Page

The MMDA is not a political unit of government thus cannot validly exercise police power.

Solicitor General v. Metropolitan Manila Authority

The measures in question are enactments of local governments acting only as agents of the national
legislature. Necessarily, the acts of these agents must reflect and conform to the will of their principal. To test the
validity of such acts in the specific case now before us, we apply the particular requisites of a valid ordinance as laid
down by the accepted principles governing municipal corporations.
According to Elliot, a municipal ordinance, to be valid: 1) must not contravene the Constitution or any
statute; 2) must not be unfair or oppressive; 3) must not be partial or discriminatory; 4) must not prohibit but
may regulate trade; 5) must not be unreasonable; and 6) must be general and consistent with public policy.
A careful study of the Gonong decision will show that the measures under consideration do not pass the
first criterion because they do not conform to existing law. The pertinent law is PD 1605. PD 1605 does not allow
either the removal of license plates or the confiscation of driver's licenses for traffic violations committed in
Metropolitan Manila. There is nothing in the following provisions of the decree authorizing the Metropolitan Manila
Commission (and now the Metropolitan Manila Authority) to impose such sanctions.
In fact, the provisions prohibit the imposition of such sanctions in Metropolitan Manila. The Commission
was allowed to "impose fines and otherwise discipline" traffic violators only "in such amounts and under such
penalties as are herein prescribed," that is, by the decree itself. Nowhere is the removal of license plates directly
imposed by the decree or at least allowed by it to be imposed by the Commission. Notably, Section 5 thereof
expressly provides that "in case of traffic violations, the driver's license shall not be confiscated." These restrictions
are applicable to the Metropolitan Manila Authority and all other local political subdivisions comprising
Metropolitan Manila, including the Municipality of Mandaluyong.
The requirement that the municipal enactment must not violate existing law explains itself. Local political
subdivisions are able to legislate only by virtue of a valid delegation of legislative power from the national
legislature (except only that the power to create their own sources of revenue and to levy taxes is conferred by the
Constitution itself.) They are mere agents vested with what is called the power of subordinate legislation. As
delegates of the Congress, the local government unit cannot contravene but must obey at all times the will of their
principal. In the case before us, the enactments in question, which are merely local in origin, cannot prevail against
the decree, which has the force and effect of a statute.
h. Administrative Regions
DEFINITION
Chiongbian vs. Orobos 254 SCRA 253 (1995)
Administrative regions are mere groupings of contiguous Provinces for administrative
purposes. They are not territiorial and political subdivisions like Provinces, Cities, Municipalities and Barangays.
R. A. 6766 (Organic Act for Cordillera Autonomous Region of 1989)
This Act provides for creation of the Cordillera Autonomous Region (CAR) shall consist of the cities and provinces that
shall vote favorable in a plebiscite pursuant ant 10, Sec. 18 of the Constitution. Those cities and provinces are Benguet,
Ifugao, Muslim Province, Abra, Kalinga-Apayao and Baguio
The Act consists of the following pertinent articles:
1) Guiding principles and policies similar to that of Art. 2 of the 1987 Constitution
2) Vesting of legislative power in the Cordillera Assembly; executive power Cordillera governor with a deputy
governor as well; creation of indigenous special courts whose decisions are final and executory but subject to
the original and appellate jurisdiction of the Supreme Court
3) Creation of a Regional Commission on Appointments
4) Measures to protect and develop the ancestral lands and ancestral domains of indigenous cultural communities
as well as the national economy and patrimony
The rest of its provisions are roughly similar to the Organic Act for ARMM (see11-c) CAR never came to existence. Only
Ifugao province voted in favor of CAR, so the Supreme Court in Ordillo v. COMELEC ruled that Ifugao could no constitute
itself into the CAR
The sole province of Ifugao cannot validly constitute the Cordillera Autonomous Region.

Notes
Page

Cordillera Regional Assembly v. COMELEC, G. R. No. 93054, December 4, 1990

The keywords provinces, cities, municipalities and geographical areas connote that "region" is to be made
up of more than one constituent unit. The term "region" used in its ordinary sense means two or more provinces.
This is supported by the fact that the thirteen (13) regions into which the Philippines is divided for administrative
purposes are groupings of contiguous provinces.
Aside from the 1987 Constitution, a reading of the provisions of Republic Act No. 6766 strengthens the
petitioner's position that the Region cannot be constituted from only one province.
xxx
From these sections, it can be gleaned that Congress never intended that a single province may constitute
the autonomous region. Otherwise, we would be faced with the absurd situation of having two sets of officials, a set
of provincial officials and another set of regional officials exercising their executive and legislative powers over
exactly the same small area.
R.A. 6732 (Organic Act for ARMM [Autonomous Region in Muslim Mindanao])
Mindanao, encompassing 13 provinces and 9 cities, through a plebiscite for that purpose. This government shall operate
within the framework of the Regional Government. The executive power is conferred on the Regional Governor. The
legislative power is conferred in the Regional Assembly. The Supreme Court, the Court of Appeals and the lower courts
shall continue to exercise their power as mandated in the Constitution; however, there shall be a Shariah Appellate Court
which shall also be learned in Islamic law and jurisprudence. The Shariah Courts decisions shall be final and executory
subject to the original and appellate jurisdiction of the Supreme Court. Tribal Appellate Courts for cases dealing with tribal
codes shall also be established.
The Regional Government shall have fiscal autonomy or the power to create its own sources of revenue, subject to
the limitations of the Constitution and this Organic Act. The Organic Act also provides for: Protection of ancestral lands,
ancestral domain and indigenous cultural communities; urban and rural planning and development; power to enact laws
pertaining to the national economy and patrimony responsive to the needs of the Regional Government; public order and
security; education, science and technology and sports development; social justice and services; and power to amend or
revise the Organic Act, either by Congress or by the Regional Assembly, the latter being subject to approval by Congress.
Meaning of majority vote required to approve the creation of administrative region
Abbas vs. COMELEC G.R. No. 89651 (1989)
As provided in the Constitution, the creation of the autonomous region in Muslim Mindanao is made
effective upon the approval "by majority of the votes cast by the constituent units in a plebiscite called for the
purpose" [Art. X, sec. 18]. The question has been raised as to what this majority means. Does it refer to a majority of
the total votes cast in the plebiscite in all the constituent units, or a majority in each of the constituent units, or both?
We need not go beyond the Constitution to resolve this question.
It will readily be seen that the creation of the autonomous region is made to depend, not on the total
majority vote in the plebiscite, but on the will of the majority in each of the constituent units and the proviso
underscores this. For if the intention of the framers of the Constitution was to get the majority of the totality of the
votes cast, they could have simply adopted the same phraseology as that used for the ratification of the Constitution,
i.e. "the creation of the autonomous region shall be effective when approved by a majority of the votes cast in a
plebiscite called for the purpose."
It is thus clear that what is required by the Constitution is a simple majority of votes approving the
Organic Act in individual constituent units and not a double majority of the votes in all constituent units put
together, as well as in the individual constituent units.
Executive has power to merge administrative regions; no plebiscite is required
Abbas vs. COMELEC G.R. No. 89651 (1989)
It must be pointed out that what is referred to in R.A. No. 6734 is the merger of administrative regions, i.e.
Regions I to XII and the National Capital Region, which are mere groupings of contiguous provinces for
administrative purposes [Integrated Reorganization Plan (1972), which was made as part of the law of the land by
Pres. Dec. No. 1, Pres. Sec. No. 742]. Administrative regions are not territorial and political subdivisions like
provinces, cities, municipalities and barangays [see Art. X, sec. 1 of the Constitution]. While the power to merge
administrative regions is not expressly provided for in the Constitution, it is a power which has traditionally been

Notes
Page

lodged with the President to facilitate the exercise of the power of general supervision over local governments [see
Art. X, sec. 4 of the Constitution]. There is no conflict between the power of the President to merge administrative
regions with the constitutional provision requiring a plebiscite in the merger of local government units because the
requirement of a plebiscite in a merger expressly applies only to provinces, cities, municipalities or barangays, not to
administrative regions.

i.

General Principles (R.A. No. 7160)

POLICY AND APPLICATION

SEC. 2. Declaration of Policy.
(a) It is hereby declared the policy of the State that the territorial and political subdivisions of the State shall enjoy
genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant communities
and make them more effective partners in the attainment of national goals. Toward this end, the State shall provide for a
more responsive and accountable local government structure instituted through a system of decentralization whereby
local government units shall be given more powers, authority, responsibilities, and resources. The process of
decentralization shall proceed from the national government to the local government units.
(b) It is also the policy of the State to ensure the accountability of local government units through the institution of
effective mechanisms of recall, initiative and referendum.
(c)It is likewise the policy of the State to require all national agencies and offices to conduct periodic consultations with
appropriate local government units, non-governmental and people's organizations, and other concerned sectors of the
community before any project or program is implemented in their respective jurisdictions.
Section 536. Effectivity Clause. This code shall take effect on January first, ineteen hundred ninety-two, unless
otherwise provided herein, after its complete publication in at least one newspaper of general circulation.
SEC. 3. Operative Principles of Decentralization.
The formulation and implementation of policies and measures on local autonomy shall be guided by the following
operative principles:
(a) There shall be an effective allocation among the different local government units of their respective powers,
functions, responsibilities, and resources;
(b) There shall be established in every local government unit an accountable, efficient, and dynamic organizational
structure and operating mechanism that will meet the priority needs and service requirements of its communities;
(c) Subject to civil service law, rules and regulations, local officials and employees paid wholly or mainly from local
funds shall be appointed or removed, according to merit and fitness, by the appropriate appointing authority;
(d) The vesting of duty, responsibility, and accountability in local government units shall be accompanied with provision
for reasonably adequate resources to discharge their powers and effectively carry out their functions; hence, they shall
have the power to create and broaden their own sources of revenue and the right to a just share in national taxes and an
equitable share in the proceeds of the utilization and development of the national wealth within their respective areas;
(e) Provinces with respect to component cities and municipalities, and cities and municipalities with respect to
component barangays, shall ensure that the acts of their component units are within the scope of their prescribed powers
and functions;
(f) Local government units may group themselves, consolidate or coordinate their efforts, services, and resources for
purposes commonly beneficial to them;
(g) The capabilities of local government units,especially the municipalities and barangays, shall beenhanced by providing
them with opportunities to participate actively in the implementation of national programs and projects;
(h) There shall be a continuing mechanism to enhance local autonomy not only by legislative enabling acts but also by
administrative and organizational reforms;
(i) Local government units shall share with the national government the responsibility in the management and
maintenance of ecological balance within their territorial jurisdiction, subject to the provisions of this Code and national
policies;
(j) Effective mechanisms for ensuring the accountability of local government units to their respective constituents shall
be strengthened in order to upgrade continually the quality of local leadership;
(k) The realization of local autonomy shall be facilitated through improved coordination of national government policies
and programs and extension of adequate technical and material assistance to less developed and deserving local

Notes
Page

government units;
(l) The participation of the private sector in local governance, particularly in the delivery of basic services, shall be
encouraged to ensure the viability of local autonomy as an alternative strategy for sustainable development; and
(m) The national government shall ensure that decentralization contributes to the continuing improvement of the
performance of local government units and the quality of community life.

San Juan vs. Civil Service Commission 196 SCRA 69

The tug of war between the Secretary of Budget and Management and the Governor of the premier
province of Rizal over a seemingly innocuous position involves the application of a most important constitutional
policy and principle, that of local autonomy. We have to obey the clear mandate on local autonomy. Where a law is
capable of two interpretations, one in favor of centralized power in Malacaang and the other beneficial to local
autonomy, the scales must be weighed in favor of autonomy.
xxx
National officials should not only comply with the constitutional provisions on local autonomy but should
also appreciate the spirit of liberty upon which these provisions are based.
The 1987 Constitution by deleting the phrase "as may be provided by law," did not stripped the
President of the power of control over local governments.
Ganzon vs. CA G. R. No. 93252 August 5, 1991
It is a mistaken impression because legally, supervision is not incompatible with disciplinary authority.
As hereinabove indicated, the deletion of "as may be provided by law" was meant to stress, sub silencio, the
objective of the framers to strengthen local autonomy by severing congressional control of its affairs, as observed by
the Court of Appeals, like the power of local legislation. The Constitution did nothing more, however, and insofar as
existing legislation authorizes the President (through the Secretary of Local Government) to proceed against local
officials administratively, the Constitution contains no prohibition.
"Control" has been defined as "the power of an officer to alter or modify or nullify or set aside what a
subordinate officer had done in the performance of his duties and to substitute the judgment of the former for test of
the latter." "Supervision" on the other hand means "overseeing or the power or authority of an officer to see that
subordinate officers perform their duties." As we held, however, "investigating" is not inconsistent with
"overseeing", although it is a lesser power than "altering".

Provisional Constitution must be deemed to have been overtaken by Section 27, Article XVIII of the 1987
Constitution.

De Leon v. Esguerra, G.R. No. 78059 August 31, 1987

The 1987 Constitution was ratified in a plebiscite on February 2, 1987. By that date, therefore, the
Provisional Constitution must be deemed to have been superseded. Having become inoperative, respondent OIC
Governor could no longer rely on Section 2, Article III, thereof to designate respondents to the elective positions
occupied by petitioners.
Petitioners must now be held to have acquired security of tenure especially considering that the Barangay
Election Act of 1982 declares it "a policy of the State to guarantee and promote the autonomy of the barangays to
ensure their fullest development as self-reliant communities. Similarly, the 1987 Constitution ensures the autonomy
of local governments and of political subdivisions of which the barangays form a part, and limits the President's
power to "general supervision" over local governments.

LOCAL AUTONOMY

Notes

TYPES OF DECENTRALIZATION

Page

-means a more responsive and accountable local government structure instituted through a system of
decentralization.
-not meant to end the relation of partnership and interdependence between the central administration and LGU.

Limbona vs. Mangelin 170 SCRA 786 (1989)

Now, autonomy is either decentralization of administration or decentralization of power. There is
decentralization of administration when the central government delegates administrative powers to political
subdivisions in order to broaden the base of government power and in the process to make local governments "more
responsive and accountable," "and ensure their fullest development as self-reliant communities and make them
more effective partners in the pursuit of national development and social progress." At the same time, it relieves the
central government of the burden of managing local affairs and enables it to concentrate on national concerns. The
President exercises "general supervision" over them, but only to "ensure that local affairs are administered according
to law." He has no control over their acts in the sense that he can substitute their judgments with his own.
Decentralization of power, on the other hand, involves an abdication of political power in the favor of
local governments units declare to be autonomous. In that case, the autonomous government is free to chart its own
destiny and shape its future with minimum intervention from central authorities. According to a constitutional
author, decentralization of power amounts to "self-immolation," since in that event, the autonomous government
becomes accountable not to the central authorities but to its constituency.
Decentralization of power is a political question; decentralization of administration is a judicial
question
Limbona vs. Mangelin 170 SCRA 786 (1989)
An autonomous government that enjoys autonomy of the latter category [decentralization of power] is
subject alone to the decree of the organic act creating it and accepted principles on the effects and limits of
"autonomy." On the other hand, an autonomous government of the former class [decentralization of administration]
is, as we noted, under the supervision of the national government acting through the President (and the Department
of Local Government). If the Sangguniang Pampook (of Region XII), then, is autonomous in the latter sense
[decentralization of power], its acts are, debatably beyond the domain of this Court in perhaps the same way that the
internal acts, say, of the Congress of the Philippines are beyond our jurisdiction. But if it is autonomous in the
former category [decentralization of administration] only, it comes unarguably under our jurisdiction.
DEVOLUTION
Tano vs. Socrates 278 SCRA 154
Finally, the centerpiece of LGC is the system of decentralization as expressly mandated by the Constitution.
Indispensable thereto is devolution and the LGC expressly provides that [a]ny provision on a power of a local
government unit shall be liberally interpreted in its favor, and in case of doubt, any question thereon shall be
resolved in favor of devolution of powers and of the lower local government unit. Any fair and reasonable doubt as
to the existence of the power shall be interpreted in favor of the local government unit concerned, Devolution
refers to the act by which the National Government confers power and authority upon the various local
government units to perform specific functions and responsibilities.
One of the devolved powers enumerated in the section of the LGC on devolution is the enforcement of
fishery laws in municipal waters including the conservation of mangroves. This necessarily includes enactment of
ordinances to effectively carry out such fishery laws within the municipal waters.
FISCAL AUTONOMY
Internal Revenue Allotment forms part of a local governments annual income
Alvarez v Giungona 252 SCRA 695
The practical side to development through a decentralized local government system certainly concerns the
matter of financial resources. With its broadened powers and increased responsibilities, a local government unit must
now operate on a much wider scale. More extensive operations, in turn, entail more expenses. Understandably, the
vesting of duty, responsibility and accountability in every local government unit is accompanied with a provision for
reasonably adequate resources to discharge its powers and effectively carry out its functions. Availment of such
resources is effectuated through the vesting in every local government unit of (1) the right to create and
broaden its own source of revenue; (2) the right to be allocated a just share in national taxes, such share being in

Notes
Page

the form of internal revenue allotments (IRAs); and (3) the right to be given its equitable share in the proceeds of the
utilization and development of the national wealth, if any, within its territorial boundaries.
xxx
The IRAs are items of income because they form part of the gross accretion of the funds of the local
government unit. The IRAs regularly and automatically accrue to the local treasury without need of any further
action on the part of the local government unit. They thus constitute income which the local government can
invariably rely upon as the source of much needed funds.
SEC. 4. Scope of Application. - This Code shall apply to all provinces, cities, municipalities, barangays, and other
political subdivisions as may be created by law, and, to the extent herein provided, to officials, offices, or agencies of the
national government.
Cordillera Broad Coalition vs. Commission on Audit G. R. No. 79956, January 29, 1990
We find that it [EO 220] did not create a new territorial and political subdivision or merge existing ones
into a larger subdivision. Firstly, the CAR is not a public corporation or a territorial and political subdivision. It does
not have a separate juridical personality, unlike provinces, cities and municipalities. Neither is it vested with the
powers that are normally granted to public corporations, e.g. the power to sue and be sued, the power to own and
dispose of property, the power to create its own sources of revenue, etc. As stated earlier, the CAR was created
primarily to coordinate the planning and implementation of programs and services in the covered areas.
Then, considering the control and supervision exercised by the President over the CAR and the offices
created under E.O. No. 220, and considering further the indispensable participation of the line departments of the
National Government, the CAR may be considered more than anything else as a regional coordinating agency of the
National Government, similar to the regional development councils which the President may create under the
Constitution. These councils are "composed of local government officials, regional heads of departments and other
government offices, and representatives from non-governmental organizations within the region for purposes of
administrative decentralization to strengthen the autonomy of the units therein and to accelerate the economic and
social growth and development of the units in the region." In this wise, the CAR may be considered as a more
sophisticated version of the regional development council.
EO 220 which created CAR did not contravene the constitutional guarantee of local autonomy of the member
LGUs.
Cordillera Broad Coalition vs. Commission on Audit G. R. No. 79956, January 29, 1990
As we have said earlier, the CAR is a mere transitory coordinating agency that would prepare the stage for
political autonomy for the Cordilleras. It fills in the resulting gap in the process of transforming a group of adjacent
territorial and political subdivisions already enjoying local or administrative autonomy into an autonomous region
vested with political autonomy.
Abbas vs. COMELEC G.R. No. 89651 (1989)
Under the Constitution, the creation of the autonomous region hinges only on the result of the plebiscite. If
the Organic Act is approved by majority of the votes cast by constituent units in the scheduled plebiscite, the
creation of the autonomous region immediately takes effect. The questioned provisions in R.A. No. 6734 requiring
an Oversight Committee to supervise the transfer do not provide for a different date of effectivity. Much less would
the organization of the Oversight Committee cause an impediment to the operation of the Organic Act, for such is
evidently aimed at effecting a smooth transition period for the regional government. The constitutional objection on
this point thus cannot be sustained as there is no basis therefor.
The power to merge administrative regions is executive in character.
Chiongbian, et al vs. Orbos, et al G.R. No. 96754, June 22, 1995
As this Court observed in Abbas, while the power to merge administrative regions is not expressly
provided for in the Constitution, it is a power which has traditionally been lodged with the President to
facilitate the exercise of the power of general supervision over local governments. R.A. No. 5435 was passed

Notes
Page

authorizing the President of the Philippines, with the help of a Commission on Reorganization, to reorganize the
different executive departments, bureaus, offices, agencies and instrumentalities of the government, including
banking or financial institutions and corporations owned or controlled by it. The purpose was to promote
simplicity, economy and efficiency in the government. The law provided that any reorganization plan submitted
would become effective only upon the approval of Congress. Thus the creation and subsequent reorganization of
administrative regions have been exercised by the President pursuant to authority granted to him by law.
The power granted authorizes the reorganization even of regions, provinces and cities that did not
take part in the plebiscite on the creation of the Autonomous Region or did not vote in favor of it
While Article XIX, Section 13 provides that The provinces and cities which in the plebiscite do not vote
for inclusion in the Autonomous Region shall remain in the existing administrative regions, this provision is subject
to the qualification that the President may, by administrative determination, merge the existing regions. This
means that while non-assenting provinces and cities are to remain in the regions as designated upon the
creation of the Autonomous Region, they may nevertheless be regrouped with contiguous provinces forming
other regions as the exigency of administration may require.
On the applicability to only those which voted for inclusion in the Autonomous Region, the Presidents
power cannot be so limited without neglecting the necessities of administration.
A tribal court of the Cordillera Bodong Administration cannot render a valid and executory decision in a
land dispute
BADUA vs. CORDILLERA BODONG ADMINISTRATION 1991 Feb 14G.R. No. 92649
.
In "Cordillera Regional Assembly Member Alexander P. Ordillo, et al. vs. The Commission on Elections, et
al found that in the plebiscite that was held on January 23, 1990 pursuant to Republic Act 6766, the creation of the
Cordillera Autonomous Region was rejected by all the provinces and city of the Cordillera region, except Ifugao
province, hence, the Cordillera Autonomous Region did not come to be. As a logical consequence of that judicial
declaration, the Cordillera Bodong Administration created under Section 13 of Executive Order No. 220, the
indigenous and special courts for the indigenous cultural communities of the Cordillera region (Sec. 1, Art. VII, Rep.
Act 6766), and the Cordillera People's Liberation Army, as a regional police force or a regional command of the
Armed Forces of the Philippines (Secs. 2 and 4, Article XVIII of R.A. 6766), do not legally exist. Since the
Cordillera Autonomous Region did not come into legal existence, the Maeng Tribal Court was not constituted
into an indigenous or special court under R.A. No. 6766. Hence, the Maeng Tribal Court is an ordinary tribal
court existing under the customs and traditions of an indigenous cultural community.
Such tribal courts are not a part of the Philippine judicial system which consists of the Supreme
Court and the lower courts which have been established by law (Sec. 1, Art. VIII, 1987 Constitution). They do
not possess judicial power. Like the pangkats or conciliation panels created by P.D. No. 1508 in the barangays,
they are advisory and conciliatory bodies whose principal objective is to bring together the parties to a
dispute and persuade them to make peace, settle, and compromise.
SEC. 5. Rules of Interpretation. - In the interpretation of the provisions of this Code, the following rules shall apply:
(a)Any provision on a power of a local government unit shall be liberally interpreted in its favor, and in case of doubt,
any question thereon shall be resolved in favor of devolution of powers and of the lower local government unit. Any fair
and reasonable doubt as to the existence of the power shall be interpreted in favor of the local government unit
concerned;
(b) In case of doubt, any tax ordinance or revenue measure shall be construed strictly against the local government unit
enacting it, and liberally in favor of the taxpayer. Any tax exemption, incentive or relief granted by any local government
unit pursuant to the provisions of this Code shall be construed strictly against the person claiming it.
(c) The general welfare provisions in this Code shall be liberally interpreted to give more powers to local government
units in accelerating economic development and upgrading the quality of life for the people in the community;
(d) Rights and obligations existing on the date of effectivity of this Code and arising out of contracts or any other source
of prestation involving a local government unit shall be governed by the original terms and conditions of said contracts or
the law in force at the time such rights were vested; and
(e)In the resolution of controversies arising under this Code where no legal provision or jurisprudence applies, resort may
be had to the customs and traditions in the place where the controversies take place.
Tano vs. Socrates 278 SCRA 154

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Moreover, Section 5(c) of the LGC explicitly mandates that the general welfare provisions of the LGC
shall be liberally interpreted to give more powers to the local government units in accelerating economic
development and upgrading the quality of life for the people of the community.
Rights existing on the date of effectivity of this Code involving a local government unit shall be governed
by the law in force at the time such rights were vested
THE SECRETARY OF HEALTH vs.COURT OF APPEALS G. R. No. 112243, Feb. 23, 1995
At the time of the commencement of the administrative action, the operative laws are the Administrative
Code of 1987 and Executive Order No. 119. Under the said laws, the Secretary of Health exercises control, direction
and supervision over his subordinates, which include private respondent. Consequently, since jurisdiction has been
acquired by the Secretary of Health over the person of private respondent before the effectivity of the Local
Government Code on January 1, 1992, it continues until the final disposition of the administrative case.
Greater Balanga Dev. Corp vs Balanga G. R. No. 83987, Dec. 27, 1994
The second paragraph of Section 3A-06(b) does not expressly require two permits for their conduct of two
or more businesses in one place, but only that separate fees be paid for each business. The powers of municipal
corporations are to be construed in strictissimi juris and any doubt or ambiguity must be construed against the
municipality (City of Ozamiz v. Lumapas, 65 SCRA 33 [1975]). Granting, however, that separate permits are
actually required, the application form does not contain any entry as regards the number of businesses the applicant
wishes to engage in.
Evardone vs COMELEC GR. No. 95063, December 2, 1991
Art. 18 Sec. 3 of the Consti expressly provides that all existing laws not inconsistent with the 1987 Consti
shall remain operative until amended repealed or revoked. RA 7160 providing for the Local Government Code of
1991, expressly repeals BP 337. But, the new LGC will take effect only on January 1, 1992 therefore the old LGC
(BP 337) is still the applicable law to the present case.
The Court ruled that Resolution 2272 is valid and constitutional.

CREATION, CONVERSION AND ABOLITION OF LOCAL GOVERNMENT UNITS

SEC. 6. Authority to Create Local Government Units. - A local government unit may be created, divided,
merged, abolished, or its boundaries substantially altered either by law enacted by Congress in the case of a
province, city, municipality, or any other political subdivision, or by ordinance passed by the sangguniang
panlalawigan or sangguniang panlungsod concerned in the case of a barangay located within its territorial
jurisdiction, subject to such limitations and requirements prescribed in this Code.
SEC. 7. Creation and Conversion. - As a general rule, the creation of alocal government unit or its conversion from
one level to another level shall be based on verifiable indicators of viability and projected capacity to provide services,
to wit:
(a) Income. - It must be sufficient, based on acceptable standards, to provide for all essential government facilities and
services and special functions commensu- rate with the size of its population, as expected of the local government unit
concerned;
(b) Population. - It shall be determined as the total number of inhabitants within the territorial jurisdiction of the local
government unit concerned; and
(c) Land Area. - It must be contiguous, unless it comprises two or more islands or is separated by a local government
unit independent of the others; properly identified by metes and bounds with technical descriptions; and sufficient to
provide for such basic services and facilities to meet the requirements of its populace. Compliance with the foregoing
indicators shall be attested to by the Department of Finance (DOF), the NationalStatistics Office (NSO), and the Lands
Management Bureau(LMB) of the Department of Environment and Natural Resources(DENR).
SEC. 8. Division and Merger. - Division and merger of existinglocal government units shall comply with the same
requirements herein prescribed for their creation: Provided, however, That such division shall not reduce the income,
population, or land area of the local government unit or units concerned to less than the minimum requirements

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11

prescribed in this Code: Provided, further, That the income classification of the original local government unit or units
shall not fall below its current income classification prior to such division. The income classification of local
government units shall be updated within six (6) months from the effectivity of this Code to reflect the changes in their
financial position resulting from the increased revenues as provided herein.
SEC. 9. Abolition of Local Government Units. - A local government unit may be abolished when its income,
population, or land area has been irreversibly reduced to less than the minimum standards prescribed for its creation
under Book III of this Code, as certified by the national agencies mentioned in Section 17 hereof to Congress or to the
sanggunian concerned, as the case may be.
The law or ordinance abolishing a local government unit shall specify the province, city, municipality, or barangay with
which thelocal government unitsought to be abolished will be incorporated or merged.
SEC. 10. Plebiscite Requirement. - No creation, division, merger, abolition, or substantial alteration of boundaries of
local government units shall take effect unless approved by a majority of the votes cast in a plebiscite called for the
purpose in the political unit or units directly affected. Said plebiscite shall be conducted by the Commission on
Elections (Comelec) within one hundred twenty (120) days from the date of effectivity of the law or ordinance effecting
such action, unless said law or ordinance fixes another date.

MMDA vs Dante O. Garin G. R. No. 130230, April 15, 2005

The MMDA is not a political unit of government. The power delegated to the MMDA is that given to
the Metro Manila Council to promulgate administrative rules and regulations in the implementation of the
MMDA's functions. There is no grant of authority to enact ordinances and regulations for the general welfare of
the inhabitants of the metropolis.
Therefore, insofar as Sec. 5(f) of Rep. Act No. 7924 is understood by the lower court and by the petitioner
to grant the MMDA the power to confiscate and suspend or revoke drivers' licenses without need of any other
legislative enactment, such is an unauthorized exercise of police power.
Sec. 5(f) grants the MMDA with the duty to enforce existing traffic rules and regulations. MMDA may
enforce, but not enact, ordinaces.
Sultan Osop B. Camid vs Office of the President et. al. G. R. No. 161414, Jan. 17, 2005
Section 442(d) of the Local Government Code requires that in order that the municipality created by
executive order may receive recognition, they must have their respective set of elective municipal officials holding
office at the time of the effectivity of the Local Government Code. Petitioner admits that Andong has never elected
its municipal officers at all.
Padilla vs. Comelec, G.R. No. 103328, October 19, 1992.
It stands to reason that when the law states that the plebiscite shall be conducted "in the political units
directly affected," it means that residents of the political entity who would be economically dislocated by the
separation of a portion thereof have a right to vote in said plebiscite. Evidently, what is contemplated by the phrase
"political units directly affected," is the plurality of political units which would participate in the plebiscite.
Logically, those to be included in such political areas are the inhabitants of the barangays of the proposed
Municipality of Tulay-Na-Lupa as well as those living in the parent Municipality of Labo, Camarines Norte.
Grio v. COMELEC
"SEC. 462. Existing Subprovinces. Existing sub-provinces are hereby converted into regular provinces
upon approval by a majority of the votes cast in a plebiscite to be held in the said sub-provinces and the original
provinces directly affected. The plebiscite shall be conducted by the Comelec simultaneously with the national
elections following the effectivity of this Code.
"The new legislative districts created as a result of such conversion shall continue to be represented in
Congress by the duly elected representatives of the original districts out of which said new provinces or districts

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were created until their own representatives shall have been elected in the next regular congressional elections and
qualified.
As it is worded, Section 462 completely addresses an eventuality where the people of both the original district and
the people of the new district to be created agree to the proposed creation of the latter.
Mun. of San Narciso, Quezon v. Mendez
Executive Order No. 353 creating the municipal district of San Andres was issued on 20 August 1959 but
it was only after almost thirty (30) years, or on 05 June 1989, that the municipality of San Narciso finally decided to
challenge the legality of the executive order. In the meantime, the Municipal District, and later the Municipality, of
San Andres, began and continued to exercise the powers and authority of a duly created local government unit.
Equally significant is Section 442(d) of the Local Government Code to the effect that municipal districts "organized
pursuant to presidential issuances or executive orders and which have their respective sets of elective municipal
officials holding office at the time of the effectivity of (the) Code shall henceforth be considered as regular
municipalities."
Tan v. COMELEC 142 SCRA 727
The phrase subject to the approval by a majority of the votes in a plebiscite in the unit or units affected
must be construed to mean that the remaining areas in the province of Negros Occidental should have been allowed
to participate in the said plebiscite. The reason is that cities belonging to Negros Occidental will be added to Negros
del Norte, thus Negros Occidentals land area will be dismembered. Certainly, the people of Negros Occidental
should have been allowed to vote in the plebiscite as they are directly affected by the diminution in land size of their
province.
A reading of the last sentence of the first paragraph of Section 197 LGC of 1983 says. The territory need not be
contiguous if it comprises 2 or more islands. The use of the word territory clearly reflects that the law refers only
to the land mass and excludes the waters over which the political unit has control. In other words, Negros del Norte
failed to meet the required land area of 3,500 sq. km for it to become a province.
Lopez v. COMELEC G. R. No. L-56022 & L-56124, May 31, 1985
The Court xxx came to the conclusion that the constitutional provision on the need for a majority of the
votes cast in the plebiscite in the unit or units affected would be satisfied even if "those voters who are not from the
barangay to be separated [were] excluded in the plebiscite." It cannot be argued therefore that the plebiscite held in
the areas affected to constitute Metropolitan Manila, having manifested their will, the constitutional provision relied
upon by petitioners has been satisfied.
Mun. of Malabang v. Benito G.R. No. L-28113, March 28, 1969
In the cases where a de facto municipal corporation was recognized as such despite the fact that the
statute creating it was later invalidated, the decisions could fairly be made to rest on the consideration that there was
some other valid law giving corporate vitality to the organization. Hence, in the case at bar, the mere fact that
Balabagan was organized at a time when the statute had not been invalidated cannot conceivably make it a de facto
corporation, as, independently of the Administrative Code provision in question, there is no other valid statute to
give color of authority to its creation.
Authority to create municipal corporations is essentially legislative in nature.
Pelaez vs. Auditor General, G. R. No. L-23825, December 24, 1965
Xxx the creation of municipalities, is not an administrative function, but one which is essentially
and eminently legislative in character. The question of whether or not "public interest" demands the exercise of
such power is not one of fact. it is "purely a legislative question or a political question.
Upon the other hand if the President could create a municipality, he could, in effect, remove any of its
officials, by creating a new municipality and including therein the barrio in which the official concerned resides, for
his office would thereby become vacant.6 Thus, by merely brandishing the power to create a new municipality (if he
had it), without actually creating it, he could compel local officials to submit to his dictation, thereby, in effect,
exercising over them the power of control denied to him by the Constitution.

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Notes
TYPES OF LOCAL GOVERNMENTS
1. De jure Municipal Corporations- those created or recognized by operation of law
2.

De facto municipal corporations- where the people have organized themselves, under color of law, into
ordinary municipal bodies, and have gone on, year after year, raising taxes, making improvements, and
exercising their usual franchises, with their rights dependent quite as much on acquiescence as on the
regularity of their origin
Elements:
a. A valid law authorizing incorporation
b. An attempt in good faith to organize under it
c. A colorable compliance with law
d. An assumption of corporate powers

3.

Municipal Corporation by prescription- exercised their powers from time immemorial with a charter
which is presumed to have been lost or destroyed.

Special thanks to:

Julse Bacolod
Lemuel Leal
Russel Pernites
Welfredo Pongot
..and to all who submitted their case digests
and made this possible.
Godbless EH 402!