PUBLIC CORPORATION Sec. 1 – Act shall be known as the Local Government Code of 1991.

INTRODUCTION Under the 1987 Constitution, declared policy: The State shall
ensure the autonomy of local governments (Art. II, Sec. 25)
Political Law – branch of public law which deals with the organization
and operations of the governmental organs of the State and defines To highlight this policy, note, an entire Article (X) with
the relations of the State with the inhabitants of its territory. fourteen sections is devoted to “Local Governments”. Section (3)
thereof mandates: Congress SHALL enact a local government code
(a) to provide a more responsive and accountable local government
DIVISIONS OF POLITICAL LAW: structure initiated through a system of DECENTRALIZATION with
effective mechanisms of recall, initiative and referendum, (a)
(a) Constitutional Law – branch of public law which deals allocate among different local government units their powers,
with the maintenance of the proper balance between responsibilities and resources, (c) provide for qualifications, elections
authority as represented by three inherent powers of appointment and removal, term, salaries, powers and function and
the State and liberty as guaranteed by the Bill of Rights. duties of local officials and (d) other matters relating to the
(b) Administrative law – branch of public law which fixes organization and operation of local units.
the organization of government, determines
competence of administrative authorities who execute Autonomy – is either decentralization of administration
the law and indicates to the individual remedies for (deconcentration) or decentralization of power (devolution).
violation of his rights.
(c) Law on Municipal Corporations Decentralization of administration – delegation by the central
(d) Law of Public Officers government of administrative powers to local subdivisions in order to
(e) Election Laws broaden the base of governmental power making such local
(f) Public International Law governments “more responsive and accountable” and insuring their
fullest development as self-reliant communities and effective partners
in the pursuit of national development and progress” (declared policy
GENERAL PRINCIPLES of LGC); relieves central government of the burden of managing
local affairs, enabling it to concentrate on national concerns; the
CORPORATION Defined: An artificial being created by operation of President exercises “general supervision” over them but only to ensure
law having the right of succession and powers, attributes and that local affairs are administered according to law (President’s
properties expressly authorized by law or incident to its existence. mandate to ensure faithful execution of the laws) but he has no
control over their acts (he cannot substitute their judgment with his
CLASSIFICATION OF CORPORATIONS: own).

(i) Public – organized for the government of a Decentralization of power –abdication of political power in favor of
portion of the State; local government units declared to be autonomous; the autonomous
(ii) Private – formed for some private purpose, government is free to chart its own destiny and shape its future with
benefit, aim or end; minimum intervention from central authorities; amount to self-
(iii) Quasi-public – private corporation that immolation since the autonomous government becomes
renders public service or supplies accountable not to the central authority but to its constituency.
public wants.
NOTE: Constitutional guarantee of Local Autonomy refers to
NOTE: Criterion to determine whether a corporation is public – The ADMINISTRATIVE AUTONOMY of local government units (or
relationship of the corporation to the Sate, that is, if created by the decentralization of government authority).
State as its own agency to help the State in carrying out its
governmental functions then it is public, otherwise, it is private.
Case: PROVINCE OF BATANGAS vs. ALBERTO G. ROMULO, G.R. No.
CLASSES OF PUBLIC CORPORATIONS: 152774, 5/27/2004.

(i) Quasi-corporation – created by the State for
a narrow/limited purpose (PCSO, etc.);
(ii) Municipal Corporations – body politic and
corporate constituted by the incorporation of
the inhabitants for the purpose of local
government.
ELEMENTS OF MUNICIPAL CORPORATIONS:
1. Legal creation or incorporation – there must be a law
creating/authorizing the creation or incorporation of a
municipal corporation];
2. Corporate name – name by which the corporation is
known;
3. Inhabitants – people residing in the territory of the
corporation;
4. Territory – land mass where the inhabitants reside
together with internal and external waters and air
space above the land and waters.
FACTS: Province of Batangas filed a petition for certiorari to declare
unconstitutional and void certain provisos contained in the General
Appropriations Acts (GAA) of 1999, 2000 and 2001 earmarking for said
years five billion pesos (P5,000,000,000.00) of the Internal Revenue
Allotment (IRA) for the Local Government Service Equalization Fund
(LGSEF) and imposed conditions for the release thereof such as
modifying the allocation scheme for such allotment as prescribed
under the Local Government Code and securing approval for local
projects from the Oversight Committee on Devolution.
RULING: In Section 25, Article II of the Constitution, the State has
expressly adopted as a policy tha, “The State shall ensure the
autonomy of local governments”. The State policy on local autonomy
is amplified in Section 2 thereof, “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 x x x
.

DUAL NATURE & FUNCTIONS OF MUNICIPAL CORPORATIONS:
Every local government unit created/organized under the Local
Government Code is a BODY POLITIC and CORPORATE endowed with
powers to be exercised by it in conformity with law. As such it shall
exercise powers as a political subdivision of the National Government
and as a corporate entity representing the inhabitants of the territory
(Section 15, RA7160). Accordingly, it has dual functions –
(i) public or governmental – acts as an agent of the
State for the government of the territory and the
inhabitants; and
(ii) private or proprietary – acts as an agent of the
community in the administration of local affairs, as The entire process involving the LGSEF’s distribution and release is
such, acts as a separate entity for its own
purposes and not as a subdivision of the State.
BASIC PRINCIPLES
The assailed provisos in the GAAs of 1999, 2000 and 2001 and the OCD
resolutions violate the constitutional precept on local autonomy.
Section 6, Article X of the Constitution reads: Sec. 6. Local
government units shall have a just share, as determined by law, in the
national taxes which shall be automatically released to them.
"Automatic" means "involuntary either wholly or to a major extent so
that any activity of the will is largely negligible; of a reflex nature;
without volition; mechanical; like or suggestive of an automaton.
Being "automatic," thus, connotes something mechanical,
spontaneous and perfunctory. As such, the LGUs are not required to
perform any act to receive the "just share" accruing to them from the
national coffers. The "just share" of the LGUs is incorporated as the IRA
in the appropriations law or GAA enacted by Congress annually.
constitutionally impermissible. The LGSEF is part of the IRA or “just
share” of the LGUs in the national taxes. Submitting its distribution and
release to the vagaries of the implementing rules including the
guidelines and mechanisms unilaterally prescribed by the Oversight
Committee from time to time as sanctioned by the challenged laws
and OCD resolutions, makes the release not automatic – a flagrant

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violation of the constitutional and statutory mandate that LGUs’ just Decentralization comes in two forms — deconcentration and
share shall be automatically released to them. devolution. Deconcentration (administrative decentralization) is
administrative in nature; it involves the transfer of functions or the
delegation of authority and responsibility from the national office to
Meaning of Administrative Regions – are mere grouping of contiguous the regional and local offices. Devolution, on the other hand,
provinces for administrative purposes, not for political representation. connotes political decentralization, or the transfer of powers,
The division of the country into regions is intended to facilitate not only responsibilities, and resources for the performance of certain
the administration of local governments which the law requires to functions from the central government to local government units.
have regional offices. Creation of administrative regions for purpose
of expediting the delivery of services is nothing new. The Integrated By regional autonomy, the framers intended it to mean "meaningful
Reorganization plan of 1972, which was made part of the law of the and authentic regional autonomy (that is, a kind of local self-
land by virtue of Presidential Decree No. 1, established 11 regions, government which allows the people of the region or area the power
later became 12. With definite regional centers and required to determine what is best for their growth and development without
departments and agencies of the Executive Branch of the National undue interference or dictation from the central government). To this
Government to set up field offices therein (DTI VII, DOLE VII, DPWH end, Section 16, Article X limits the power of the President over
Regional Office). The functions of the regional offices is to be autonomous regions. In essence, the provision also curtails the power
established pursuant the reorganization plan are: (a) implement laws, of Congress over autonomous regions. Consequently, Congress will
policies, plans, programs, rules and regulation of the department or have to re-examine national laws and make sure that they reflect the
agency in the regional area; (2) provide economical, efficient and Constitution's adherence to local autonomy. And in case of conflicts,
effective services to the people in the area; (3) to coordinate with the underlying spirit which should guide its resolution is the
regional offices of other departments, bureaus and agencies in the Constitution's desire for genuine local autonomy.
area; and (3) perform such other functions as may be provided by
law. E.O. 426 officially devolved the powers and functions of the DPWH in
ARMM to the Autonomous Regional Government (ARG). More
Meaning of Autonomous Regions – creation of autonomous regions importantly, Congress itself through R.A. 9054 transferred and
in Muslim Mindanao and the Cordilleras, which is unique to the 1987 devolved the administrative and fiscal management of public works
Constitution, contemplates grant of political autonomy and not just and funds for public works to the ARG. The aim of the Constitution is
administrative autonomy to those regions. Thus, Art. X, Section 18 of to extend to the autonomous peoples, the people of Muslim
Constitution mandates for Congress to enact an organic act for the Mindanao in this case, the right to self-determination — a right to
autonomous regions (with assistance and participation of choose their own path of development; the right to determine the
consultative commission composed of representatives appointed by political, cultural and economic content of their development path
the President from list of nominees of multisectoral bodies) to provide within the framework of the sovereignty and territorial integrity of the
for an autonomous regional government with a basic structure Philippine Republic. Self-determination refers to the need for a
consisting of an executive department and a legislative assembly political structure that will respect the autonomous peoples'
and special courts with personal, family and property law jurisdiction uniqueness and grant them sufficient room for self-expression and self-
in each of the autonomous regions. construction.

Case: DISOMANGCOP vs. DPWH SECRETARY, G.R. No. 149848, With R.A. 8999, however, this freedom is taken away, and the National
11/25/2004. Government takes control again. The hands, once more, of the
autonomous peoples are reined in and tied up. The challenged law
FACTS: Pursuant to Sec. 15, Art. X of the Constitution (for the creation creates an office with functions and powers which, by virtue of E.O.
of autonomous regions in Muslim Mindanao and the Cordilleras), RA 426, have been previously devolved to the DPWH-ARMM, First
6734 (An Act Providing for An Organic Act for the Autonomous Region Engineering District in Lanao del Sur.
in Muslim Mindanao) was enacted. Subsequently, the four provinces
of Lanao del Sur, Maguindanao, Sulu and Tawi-Tawi, voting in favor of Section 2, LGC- Declaration of Policy - LGU to enjoy genuine and
autonomy, became the Autonomous Region in Muslim Mindanao meaningful autonomy to enable them to attain their fullest
(provinces of Basilan, Cotabato, Davao del Sur, Lanao del Norte, development as self-reliant communities and make them effective
Palawan, South Cotabato, Sultan Kudarat, Zamboanga del Norte, partners in attainment of national goals – thru decentralization.
and Zamboanga del Sur, and the cities of Cotabato, Dapitan, National agencies and offices to conduct periodic consultations with
Dipolog, General Santos, Iligan, Marawi, Pagadian, Puerto Princesa appropriate lgu, ngo and po, before any proect or program is
and Zamboanga said no in the plebiscite) (later virtue of RA9054, the implemented in their jurisdiction.
provinces of Basilan and Marawi City joined). In accordance with
RA6734, EO426 was issued placing the control and supervision of the The declaration of policy as stated in Section 2 of LGC reinforces
offices of the DPWH within the autonomous region in Muslim declared State policy (Art. II, Sec. 25 of Constitution) ensuring
Mindanao under the Autonomous Regional Government. Petitioners autonomy to local government units.
Arsadi M. Disomangcop and Ramir M. Dimalotang (Dimalotang), in
their capacity as Officer-in-Charge and District Engineer/Engineer II, Case: LINA VS. PANO 364 SCRA 76
respectively, of the 1st Engineering District of DPWH-ARMM in Lanao
del Sur petitioned to nullify Dept. Order 119 and RA8999 (creating the FACTS: Respondent Tony Calvento was appointed PSCO agent to
Marawi Sub-District Engineering Office and vesting it with jurisdiction install and operate a lotto terminal. Mayor of San Pedro Laguna
over all national infrastructure projects and facilities under the DPWH denied his application for a business permit citing an ordinance
within Marawi City and Lanao del Sur. Petitioners contend that the (Kapasyahan Blg. 508, taong 1995) passed by the Provincial Board of
challenged measures violate ARMM’s constitutional autonomy Laguna, objecting/opposing any form of gambling including lotto in
considering that the functions of the Marawi Sub-District Engineering Laguna. Calvento arguing that KB508 is curtailment of State power
Office have already been devolved to the DPWH-ARMM 1st since in this case the national legislature itself already declared lotto
Engineering District in Lanao del Sur. as legal and permitted its operation around the country, filed for
declaratory relief before the RTC, to annul KB 508 and compel the the
RULING: Petition GRANTED. DO119 is violative of the provisions of local mayor to issue a business permit for the operation of a lotto
EO426 (issued pursuant to RA6734). The 1987 Constitution mandates outlet. Suit decided in Calvento’s favor. MR by Respondent denied.
regional autonomy to give a bold and unequivocal answer to the cry Petition with SC.
for a meaningful, effective and forceful autonomy. Autonomy, as a
national policy, recognizes the wholeness of the Philippine society in RULING: Game of lotto is a game of chance duly authorized by the
its ethnolinguistic, cultural and even religious diversities. It strives to free national government through an Act of Congress (RA1169), as
Philippine society of the strain and wastage caused by the amended by BP42, the law granting a franchise to the PCSO and
assimilationist approach. Policies emanating from the legislature are allows it to operate lotteries. This statute remains valid today. While
invariably assimilationist in character despite channels being open for lotto is a game of chance, the national government deems it wise
minority representation. and proper to permit it. Hence, the Provincial Board of Laguna, as a
LGU, cannot issue a resolution or an ordinance that would seek to
A necessary prerequisite of autonomy is decentralization. prohibit permits. What the national legislature allows by law, such as
Decentralization is a decision by the central government authorizing lotto, a provincial board may not disallow by ordinance or resolution.
its subordinates, whether geographically or functionally defined, to
exercise authority in certain areas. It involves decision-making by Ours is till a unitary government, not a federal state. Being so, any form
subnational units. It is typically a delegated power, wherein a larger of autonomy granted to LGs will necessarily be limited and confined
government chooses to delegate certain authority to more local within the extent allowed by the central government. Besides, the
governments. Federalism implies some measure of decentralization, principle of local autonomy under the 1987 Constitution simply means
but unitary systems may also decentralize. Decentralization differs decentralization. It does not make local governments sovereign
intrinsically from federalism in that the sub-units that have been within the state or an “imperium in imperio”.
authorized to act (by delegation) do not possess any claim of right
against the central government. Municipal governments are only agents of the national government.
Local councils exercise only delegated legislative powers conferred

2
upon them by Congress as the national lawmaking body. The When is statute AMBIGIOUS? If capable of being understood by
delegate cannot be superior to the principal or exercise powers reasonably well-informed persons in either of two or more senses.
higher than those of the latter. It is heresy to suggest that the LGUs can
undo the acts and negate by mere ordinance the mandate of the Power of judicial review can be exercised by courts to invalidate
statute. constitutionally infirm acts. Ergo, courts are not bound by legislative
interpretation of their own acts.
Section 2(c) requiring consultations should be read together with
Section 26, 27, LGC (prior consultation by national agencies with lgus De Facto Municipal Corporations requisites:
involving projects that may cause pollution, climatic change, Valid law authorizing incorporation; attempt in good faith to organize
depletion of non-renewable resources, loss of crop land, range-land under it; colorable compliance with law, assumption of corporate
or forest cover and extinction of animal or plant species). Thus, powers.
Section 2(c) does not apply to lotto, the latter being neither a
program nor project of the national government, but of a charitable
institution, the PCSO. Also, the argument is an afterthought, Mayor MUNICIPAL CORPORATIONS
denied application for business permit solely on ground of KB508.
Elements: (a) legal creation/incorporation – there must be a law
Section 3, LGC – Operative Principles of Decentralization – policies creating/authorizing creation or incorporation of a municipal
and measures on local autonomy to be guided by these: corporation; (b) corporate name- name by which the corporation
shall be known; (c) inhabitants – people residing in the territory of the
(a) effective allocation among the different LGUs of their respective corporation; and (d) territory – land mass where inhabitants reside
powers, functions and responsibilities [is provided for by LGC], together with internal and external waters and airspace above land
and waters.
(b) establishment in every LGU of an accountable, efficient and
dynamic organizational structure and operating mechanism that will Section 6 – Authority to Create LGU – (created, divided, merged,
meet priority needs and service requirements of its communities, abolished or borders substantially altered) either by LAW enacted by
Congress in the case of province, city, municipality or any other
(c) local officials and employees, subject to civil service law, rules and political subdivision, or ORDINANCE by sangguniang
regulation, to be appointed or removed, according to merit and panlalawigan/panglungosd in the case of a barangay located within
fitness, by the appropriate appointing authority, its territorial jurisdiction, subject to limitations prescribed in this Code.

(d) vesting of duty, responsibility and accountability in LGUS shall be Section 7 – Creation/Conversion of LGU – generally, creation of LGU
accompanied with provision for reasonably adequate resources to or its conversion from one level to another, subject to verifiable
discharge their powers and effectively carry out their function – they indicators of viability and projected capacity to provide services:
shall have the power to create and broaden their own sources of INCOME, POPULATION and LAND AREA, compliance with which to be
revenue and the right to a just share in the national taxes and an attested to by the Dept. of Finance, NSO and Land Management
equitable share in proceeds of the utilization and development of the Bureau of DENR.
national wealth within their respective areas
Income – must be sufficient, based on acceptable standards to
(e) provinces – to component cities and municipalities; cites and provide all essential government facilities and services and special
municipalities – to component barangays to ensure that acts of functions commensurate with the size of its populations, as expected
component units are within scope of prescribe powers and functions of the LGU concerned.
(supervisorial powers)
Population – total number of inhabitants within the territorial
(f) LGUs may group themselves, consolidate their efforts, services and jurisdiction of the LGU concerned.
resources for purposes commonly beneficial to them – thus, MMDA;
Land Area – must be contiguous, unless it comprises two (2) or more
NOTE: Autonomy denotes “state of independence” (referred islands or is separated by a LGU independent of the others properly
previously to states) – community autonomy, that is, local autonomy. identified by metes and bounds with technical descriptions and
In the LGC, local autonomy does not mean total independence of sufficient to provide for such basic services and facilities to meet the
LGUS from the central or national government. It only means requirements of its populace.
decentralization of powers from national to local government. When
exercising governmental powers and performing duties, a LGU is an (READ GRINO VS. COMELEC 213 SCRA 672)
agency of the national government.
Section 8 – Division/Merger of existing LGUs – to comply with same
Section 4, LGC – Scope of Application – scope means areas of requisites for creation under Section 7. No reduction in income,
coverage, that is, to provinces, cities, municipalities and barangays population or land area; no reduction in current income classification.
and other political subdivisions as may be created by law and to the
extent herein provided to officials, offices or agencies of the National Section 9 – Abolition – LGU may be abolished when its income,
Government. population or land aea has been irreversibly reduced to less than the
minimum standards prescribed for its creation (as certified by DOF,
Section 5, LGC – Rules of Interpretation – (a) provision on power of LG NSO and LMB); law/ordinance abolishing an LGU to specify province,
shall be liberally interpreted in its favor; in case of doubt, any question city, municipality or barangay to which the LGU to be abolished will
shall be resolved in favor of devolution of powers and of the lower be incorporated or merged.
LGU. Any fair and reasonable doubt as to existence of power,
interpreted in favor of LGU concerned Section 10 – Plebiscite requirement – pre-condition to creation,
abolition, merger, division or substantial alteration of boundaries of
(b) doubt as to any tax ordinance or revenue measure, strictly LGUs; requires majority of the votes cast in plebiscite called for the
construed against LGU, liberally in favor of taxpayer (deprivation of purpose in the political unit/s directly affected; plebiscite to be
property). Tax exemption, incentive r relief granted any LGU, conducted by COMELEC within 120 days from date of effectivity of
construed strictly against person claiming it (loss of income on part of law/ordinance effecting such action, unless said law/ordinance fixes
LGU). another date.

(c) liberal interpretation of general welfare provisions in order to give Section 11- Seat of Government - considerations of GEOGRAPHICAL
more power to LGU in accelerating economic development and CENTRALITY, ACCESSIBILITY, AVAILABILITY OF TRANSPORATION AND
upgrading quality of life for the people. COMMUNICATION FACILITIES, DRAINAGE AND SANITATION
DEVELOPMENT, ECONOMIC PROGRESS and OTHER RELEVANT
Note: Basic precept in statutory construction that legislative intent is CONSIDERATIONS; transfer of seat when conditions and development
the controlling factor in the interpretation of statute. Power to declare in LGU concerned has subsequently changed significantly, requires
what the law shall be is a legislative power, power to declare what 2/3 vote of members of sanggunian, after public hearing; transfer site
the law is or has been is judicial. When law is unambiguous and shall not be outside the territorial boundaries of the LGU; old site
unequivocal, application and not interpretation thereof is together with improvements thereon may be disposed of by sale or
IMPERATIVE. lease or converted to such other use as the sanggunian concerned
may deem beneficial to the LGU and its inhabitants.
When is statute AMBIGIOUS? If capable of being understood by
reasonably well-informed persons in either of two or more senses.
Section 12 – Government Centers – Provinces, cities and
Power of judicial review can be exercised by courts to invalidate municipalities shall endeavor to establish a government center where
constitutionally infirm acts. Ergo, courts are not bound by legislative offices, agencies or branches of the National Government, lgu or
interpretation of their own acts. government-owned or controlled corporations may, as far as
practicable, be located. In designating such a center, the lgu

3
concerned shall take into account the existing facilities of the national the municipalities involved therein, the municipality of Balabagan is
and local agencies and offices which may serve as the government at least a de facto corporation, having been organized under color
center as contemplated under this Section. The National of a statute before this was declared unconstitutional (by Pelaez
Government, the lgu or gocc shall bear the expenses for the ruling), its officers having been either elected or appointed, and the
construction of its buildings and facilities in the government center. municipality itself having discharged its corporate functions for the
past five years preceding the institution of this action. That as a de
Section 13 – Name of LGU and Public Places, Streets and Structures – facto corporation, its existence cannot be collaterally attacked,
always in consultation with Philippine Historical Commission; although it may be inquired into directly in an action for quo warranto
prohibition against naming after living persons, change of name not at the instance of the State and not of an individual like the petitioner
oftener than once every 10 years unless for justifiable reason; change Balindong.
requires prior plebiscite; change of name involving a lgu, public
place, street or structure with historical, cultural or ethnic significance DECISION: Petition granted, Executive Order 386 declared void.
can be done only by a UNANIMOUS VOTE of the sanggunian Generally, the inquiry into the legal existence of a municipality is
concerned and in consultation with the PHC. reserved to the State in a proceeding for quo warranto or other direct
proceeding, and that only in a few exceptions may a private person
exercise this function of government. But the rule disallowing
Section 14 – Beginning of Corporate Existence – When a new LGU is collateral attacks applies only where the municipal corporation is at
created, its corporate existence shall commence upon election and least a de facto corporation. For where it is neither a corporation de
qualification of its chief executive and majority of members of jure nor de facto, but a nullity, the rule is that its existence may be
sanggunian. questioned collaterally or directly in any action or proceeding by any
one whose rights or interests are affected thereby, including the
MEJIA vs. BALOLING 81 PHIL 486 – Since a city is a public corporation citizens of the territory incorporated unless they are estopped by their
or juridical entity, and as such cannot operate or transact business by conduct from doing so.
itself but through agents and officials, it is necessary that officials
thereof be appointed or elected in order that it may transact business A de facto municipal corporation is recognized as such despite the
as such public corporation or city. fact that the statute creating it was later invalidated, rests upon the
consideration that there was some other valid law giving corporate
validity to the organization. Hence, in the case at bar, the mere fact
NOTE: De Facto Municipal Corporations requisites: Valid law that Balabagan was organized at a time when the statute had not
authorizing incorporation; attempt in good faith to organize under it; been invalidated cannot conceivably make it a de facto
colorable compliance with law, assumption of corporate powers. corporation, as, independently of Section 68 of the Administrative
Code, there is no other valid statute to give color of authority to its
Case: EMMANUEL PELAEZ vs. THE AUDITOR GENERAL, G.R. No. L-23825, creation. Thus, Executive Order 386 creating the municipality in
1/24/1965 question is a nullity pursuant to the ruling in Pelaez ruling. This is not to
say, however, that the acts done by the municipality of Balabagan in
FACTS: President of the Philippines, purporting to act pursuant to Sec. the exercise of its corporate powers are a nullity because the
68 of Revised Administrative Code (presidential authority to define the executive order "is, in legal contemplation, as inoperative as though
boundary, or boundaries, of any province, sub-province, municipality, it had never been passed." Note, the existence of Executive Order 386
[township] municipal district or other political subdivision, and is "an operative fact which cannot justly be ignored." The actual
increase or diminish the territory comprised therein, may divide any existence of a statute, prior to such a determination, in an operative
province into one or more subprovinces, separate any political fact and may have consequences which cannot justly be ignored.
division other than a province, into such portions as may be required, The past cannot always be erased by a new judicial declaration. The
merge any of such subdivisions or portions with another, name any effect of the subsequent ruling as to invalidity may have to be
new subdivision so created, and may change the seat of government considered in various aspects — with respect to particular relations,
within any subdivision to such place therein as the public welfare may individual and corporate, and particular conduct, private and
require), issued several executive orders creating 33 municipalities. official.
Petitioner (as Vice-President and as taxpayer), instituted a special civil
action seeking to enjoin Auditor General from passing in audit any Case: MUN. OF JIMENEZ, vs. HON. VICENTE T. BAZ. JR., G.R. No. 105746.
expenditure of public funds in implementation of said certain 12/2/1996
executive orders and/or disbursement by said municipalities.
FACTS: In 1949, Pres. Elpidio Quirino (pursuant to Sec. 68 of Revised
DECISION: PETITION GRANTED. Since January 1, 1960, when Republic Admin Code) issued EO258 creating the Municipality of Sinacaban
Act No. 2370 became effective, barrios may "not be created or their consisting Petitioner’s southern portion. In 1988, the Municipality of
boundaries altered nor their names changed" except by Act of Sinacaban filed with the Provincial Board of Misamis Occiental a
Congress or of the corresponding provincial board "upon petition of claim against Petitioner over portions affecting certain barrios based
a majority of the voters in the areas affected" and the on the technical description in E.O. No. 258. Petitioner conceded that,
"recommendation of the council of the municipality or municipalities under EO258 the disputed area is part of Sinacaban, but nonetheless
in which the proposed barrio is situated." This statutory denial of the asserted jurisdiction on the basis of an agreement it had with the
presidential authority to create a new barrio implies a negation of the Municipality of Sinacaban and approved by provincial board
bigger power to create municipalities, each of which consists of resolution in 1950. The board declared the disputed area to be part
several barrios. of Sinacaban ruling that the previous resolution approving the
agreement between the municipalities was void because the Board
Whereas the power to fix a common boundary, in order to avoid or had no power to alter the boundaries of Sinacaban as fixed in E.O.
settle conflicts of jurisdiction between adjoining municipalities, may No. 258, that power being vested in Congress pursuant to the
partake of an administrative nature — involving, as it does, the Constitution and the LGC of 1983 (B.P. Blg. 337). Before the SC,
adoption of means and ways to carry into effect the law creating said Petitioner challenges the trial court’s decision affirming the legal
municipalities - the authority to create municipal corporations is existence of Sinacaban and ordering the relocation of its boundary
essentially legislative in nature. for the purpose of determining whether certain areas claimed by it
belonged to it.
Case: MALABANG vs. BENITO, 27 SCRA 533
DECISION: The principal basis for the view that Sinacaban was not
FACTS: Petitioner Balindong (municipal mayor of Malabang, Lanao validly created as a municipal corporation is the Pelaez ruling that the
del Sur), Respondents (Mayor Benito and councilors of Municipality creation of municipal corporations is essentially a legislative matter
of Balabagan of the same province). Balabagan, (formerly part of and therefore the President was without power to create by
Malabang) was created on March 15, 1960, by Executive Order 386 executive order Sinacaban. The ruling in this case has been reiterated
of the then President Carlos P. Garcia, out of barrios and sitios of the in a number of cases later decided. However, we have since held
Malabang. that where a municipality created as such by executive order is later
impliedly recognized and its acts are accorded legal validity, its
Citing Pelaez ruling (that Republic Act 2370 [Barrio Charter Act, creation can no longer be questioned. Sinacaban is at least a de
approved January 1, 1960], vested power to create barrios in the facto municipal corporation in the sense that its legal existence has
provincial board, and Section 68 of the Administrative Code, insofar been recognized and acquiesced publicly and officially. Sinacaban
as it gives the President the power to create municipalities, is had been in existence for sixteen years when the Pelaez ruling yet the
unconstitutional (a) because it constitutes an undue delegation of validity of E.O. No. 258 creating it had never been questioned.
legislative power and (b) because it offends against Section 10 (1) of
Article VII of the Constitution, which limits the President's power over The State and even the Municipality of Jimenez itself have recognized
local governments to mere supervision”), Petitioner sought to nullify Sinacaban's corporate existence entering in 1950 into an agreement
E.O. 386 and restrain respondents from performing their official with it regarding their common boundary. Also, it has attained de jure
functions. status, 442(d) of the LGC, must be deemed to have cured any defect
in the creation of Sinacaban. (“Municipalities existing as of the date
Respondents argued that Pelaez ruling did not apply because, unlike of the effectivity of this Code shall continue to exist and operate as

4
such. Existing municipal districts organized pursuant to presidential
issuances or executive orders and which have their respective set of
elective municipal officials holding office at the time of the effectivity
of the Code shall henceforth be considered as regular
municipalities”).
GENERAL POWERS & ATTRIBUTES OF LGUs
to enact ordinances for the welfare of the community. It is the local
government units, acting through their respective legislative councils,
that possess legislative power and police power. In the case at bar,
the Sangguniang Panlungsod of Makati City did not pass any
ordinance or resolution ordering the opening of Neptune Street,
hence, its proposed opening by petitioner MMDA is illegal and the
respondent Court of Appeals did not err in so ruling. We desist from
ruling on the other issues as they are unnecessary.

Sources of Powers – Article II, Section 25 and Article X of the

Constitution; statutes (eg. RA7160), charter. Points of Discussion – Police power is inherent in the State, exercised
by the Legislature, but may be validly delegated. Upon valid
Section 15 – Political and Corporate Nature of LGUs – every LGU is a delegation, the exercise thereof by the delegate being limited only
body politic and corporate endowed with powers to be exercised by to such powers as conferred by the legislature. Legislature has
it in conformity with law. delegated police power to LGUs (Sec. 15, LGC) through their
respective legislative bodies, under the General Welfare Clause (Sec.
Dual Functions of LGU – (1) public/governmental – acts as an agent 16, LGC).
of State for the government of the territory and its inhabitants; (2)
proprietary/private – acts as an agent of the community in the
administration of local affairs, and as such, it acts as a separate entity NOTE: RA 7924 declared Metropolitan or Metro Manila (body
for its own purposes and not as a subdivision of the State. composed of several LGUs, i.e., twelve (12) cities of Caloocan,
Manila, Mandaluyong, Makati, Pasay, Pasig, Quezon, Muntinlupa, Las
Municipal Corporation in the Philippines: Piñas, Marikina, Parañaque and Valenzuela, and the five (5)
municipalities of Malabon, Navotas, Pateros, San Juan and Taguig) as
(1) Province (Sec. 459, LGC) – cluster of municipalities or a "special development and administrative region" with the
municipalities and component cities, as a political and administration of "metro-wide" basic services affecting the region
corporate unit of government which serves as a dynamic placed under "a development authority" referred to as the MMDA
mechanism for developmental processes and effective (governed by the Metro Manila Council composed of the mayors of
governance of LGUs within its territorial jurisdiction. the component 12 cities and 5 municipalities, the president of the
Metro Manila Vice-Mayors' League and the president of the Metro
(2) City (Sec. 448) – composed of more more urbanized and Manila Councilors' League) headed by the Chairman.
developed barangays, serves as a general purpose
government for coordination and delivery of basic, regular
and direct services and effective governance of the NOTE: When R.A. No. 7924 took effect, Metropolitan Manila became
inhabitants within its jurisdiction; a "special development and administrative region" and the MMDA a
"special development authority" whose functions were "without
prejudice to the autonomy of the affected local government units."
(3) Municipality (Sec. 440, LGC) – groups of barangays, serves The character of the MMDA was clearly defined in the legislative
primarily as a general purpose government for coordination debates enacting its charter. MMDA not a special metropolitan
and delivery of basic, regular and direct services and political subdivision, because the latter’s creation requires the
effective governance of inhabitants within its jurisdiction; approval by a majority of the votes cast in a plebiscite in the political
units directly affected. 56 R.A. No. 7924 was not submitted to the
inhabitants of Metro Manila in a plebiscite. The Chairman of the
MMDA is not an official elected by the people, but appointed by the
(4) Barangay (Sec. 384, LGC) – basic political unit, serves as the President with the rank and privileges of a cabinet member. In fact,
primary planning and implementing unit of government part of his function is to perform such other duties as may be assigned
policies, plans, programs, projects and activities in the to him by the President, 57 whereas in local government units, the
community and as a forum wherein collective views of President merely exercises supervisory authority. This emphasizes the
people may be expressed, crystallized and considered administrative character of the MMDA.
where disputes are also amicably settled;

Section 16 – General Welfare Clause – LGUs shall exercise powers

(5) Autonomous Regions – refer to Article 10 of the Constitution. expressly granted, those necessarily implied therefrom, as well as
those necessary, appropriate or incidental for efficient and effective
governance (i.e. promote health, safety, enhance prosperity,
improve morals of inhabitants) – is the statutory grant of police power
Note: Metropolitan Manila Development Authority is not a local
to LGUs through their respective legislative bodies empowering them
government unit. The power delegated to MMDA is that given to the
to enact ordinances and approve resolutions and appropriate
Metro Manila Council to promulgate administrative rules and
functions for the general welfare of the LGU.
regulations in the
Note: Police power is an inherent attribute of sovereignty vested in
Case: MMDA vs. BAVA, G.R. No. 135962, 3/27/2000
Congress to make, ordain and establish all manners of wholesome
and reasonable laws for the common good; it is plenary and its scope
FACTS: Petitioner is a government agency tasked with delivery of
is vast and pervasive. However, by virtue of valid delegation, it may
basic services in Metro Manila. Respondent Bel-Air Village Association,
be exercised by LGUs. The latter being only agents can only exercise
Inc. is a non-stock, non-profit corporation composed of homeowners
such powers as are conferred upon them by Congress.
in Bel-Air Village, a private subdivision in Makati City. Respondent had
sought to enjoin Petitioner’s plan to demolition the perimeter fence
Limits on LGUs police Power -
and open to public access Neptune Street, a road (beside)
(1) Exercisable only within territorial limits of LGU
privately/legally owned by the subdivision. The Court of Appeals, in
(2) Equal Protection Clause ( interest of public vs. those of a particular
reversing the dismissal of Respondent’s complaint, ruled that
class requires exercise of such power)
Petitioner did not have the authority to order the opening of the street
(3) Due Process Clause (reasonable means employed and not unduly
in issue. Before the SC, Petitioner asserted that, there was no need for
oppressive – case of Villavicencio vs. Lukban, GR No. 14639, March
an ordinance from the City of Manila to open Neptune Street to
25, 1919)
public because, as an agent of the State, it was endowed with police
(4) Not contrary to the Constitution and the laws (It cannot legalize
power in the delivery of basic services in Metro Manila including traffic
prohibited act under the guise of regulation. Likewise, it cannot
management (involving regulation of the use of thoroughfares to
prohibit legal activities but only regulate)
insure the safety, convenience and welfare of the general public).
Note: Under Section 16, LGU to ensure and support preservation and
DECISION: Petition DENIED. It is beyond doubt that MMDA is not a
enrichment of culture, promote health and safety, enhance people’s
local government unit or a public corporation endowed with
right to balance and healthful ecology, improve public morals,
legislative power. It is not even a “special metropolitan political
enhance economic prosperity and social justice, maintenance of
subdivision” as contemplated in Sec. 11, Art. X of the Constitution.
peace and order.
MMDA’s powers are limited to formulation, coordination, regulation,
implementation, preparation, management, monitoring, policy-
Case: REPUBLIC (DENR) vs. CITY OF DAVAO, G.R. No. 148622,
setting, installation of a system and administration. There is no syllabus
9/12/2002
in RA7924 that grants MMDA police power, let alone legislative power.
PD 1596 (The Environmental Impact Statement System) ensures
Clearly then, the MMC under P.D. No. 824 is not the same entity as the
environmental protection and regulates certain government
MMDA under R.A. No. 7924. Unlike the MMC, the MMDA has no power
5
activities affecting the environment. Related to PD 1151 (Philippine
Environment Policy), requires an environmental impact statement
from all agencies and instrumentalities of the national government,
including government-owned or controlled corporations, as well as
private corporations, firms and entities, for every proposed project
and undertaking which significantly affect the quality of the
environment.
Davao City in 2000, applied for a certificate of non-coverage (CNC)
for its proposed Davao City Artica Sports Dome project from the
required Environmental Compliance Certificate (having been
certified that its project is not located in an environmentally critical
area (ECA). Application denied for the reason that Davao City must
undergo the environmental impact assessment (EIA) process to
secure an Environmental Compliance Certificate (ECC), before it can
proceed with the construction of its project.
police power under a general welfare clause is not a recent
development. Thus, the closure of the bank was a valid exercise of
police power pursuant to the general welfare clause contained in
and restated by B.P. Blg. 337, which was then the law governing local
government units.
The general welfare clause has two branches. The first, known as the
general legislative power, authorizes the municipal council to enact
ordinances and make regulations not repugnant to law, as may be
necessary to carry into effect and discharge the powers and duties
conferred upon the municipal council by law. The second, known as
the police power proper, authorizes the municipality to enact
ordinances as may be necessary and proper for the health and
safety, prosperity, morals, peace, good order, comfort, and
convenience of the municipality and its inhabitants, and for the
protection of their property.

Denial of application lead to complaint for injunction against DENR In the present case, the ordinances imposing licenses and requiring
filed by Davao City. RTC ruled in latter’s favor reasoning that the laws permits for any business establishment, for purposes of regulation
do not require local government units (LGUs) to comply with the EIS enacted by the municipal council of Makati, fall within the purview of
law. Only agencies and instrumentalities of the national government, the first branch of the general welfare clause. Moreover, the
including government owned or controlled corporations, as well as ordinance of the municipality imposing the annual business tax is part
private corporations, firms and entities are mandated to go through of the power of taxation vested upon local governments.
the EIA process for their proposed projects which have significant
effect on the quality of the environment. A local government unit, not RE (closure order) - The bank was not engaged in any illegal or
being an agency or instrumentality of the National Government, is immoral activities to warrant its outright closure. The appropriate
deemed excluded under the principle of expressio unius est exclusio remedies to enforce payment of delinquent taxes or fees are
alterius. provided for in Section 62 of the Local Tax Code, (by distraint of
personal property, and by legal action). The law did not provide for
Petition for certiorari filed by Republic from RTC decision. Case moot closure which furthermore violated petitioner's right to due process.
and academic when subsequent change in administration of Davao
City which filed manifestation expressing that it needs to secure an Case: TANO vs. HON. GOV. SALVADOR P. SOCRATES, G.R. No. 110249,
ECC for its proposed project. But Court, for the guidance of the 8/21/ 1997
implementors of the EIS law and pursuant to our symbolic function to
educate the bench and bar, addressed the issue. FACTS: City Council of Puerto Princesa, Palawan, to effectively free
city seawaters from cyanide and other obnoxious substances, passed
Decision: Sec. 15, LGC (a local government unit is body politic and Ordinance No. 15-92 (effective January 1, 1993) banning the
corporate endowed with powers to be exercised by it in conformity shipment of all live fish and lobster outside Puerto Princesa from
with law). As such, it performs dual functions, governmental and January 1, 1993 to January 1, 1998. To implement said city ordinance,
proprietary. In exercise of governmental powers and performing the acting city mayor issued Office Order No. 23, authorizing local law
governmental duties, an LGU is an agency of the national enforcers to to check or conduct necessary inspections on cargoes
government. containing live fish and lobster being shipped out from the Puerto
Princesa to ascertain whether the shipper possessed the required
Sec. 16, LGC - duty of the LGUs to promote the people's right to a Mayor's Permit issued by this Office and the shipment is covered by
balanced ecology. Pursuant to this, an LGU, like the City of Davao, invoice or clearance issued by the local office of the Bureau of
can not claim exemption from the coverage of PD 1586. As a body Fisheries and Aquatic Resources and as to compliance with all other
politic endowed with governmental functions, an LGU has the duty to existing rules and regulations on the matter. Subsequently, the
ensure the quality of the environment, which is the very same Provincial Board of Palawan issued a similar ordinance.
objective of PD 1586.
Petitioners, who were charged with violation of certain provisions of
Section 4 of PD 1586 clearly states that "no person, partnership or the foregoing issuances upon the latter’s implementation, sought
corporation shall undertake or operate any such declared relief with the SC contending that (a) the challenged ordinances
environmentally critical project or area without first securing an deprived them of due process of law, their livelihood, and unduly
Environmental Compliance Certificate issued by the President or his restricted them from the practice of their trade, in violation of
duly authorized representative." 13 The Civil Code defines a person as constitutional guarantees, and (b) the challenged office order
either natural or juridical. The state and its political subdivisions, i.e., contained no regulation nor condition under which the Mayor's
the local government units 14 are juridical persons. 15 Undoubtedly permit could be granted or denied, vesting the mayor absolute
therefore, local government units are not excluded from the authority to determine whether or not to issue the permit.
coverage of PD 1586.
DECISION: PETITION dismissed. It is of course settled that laws
Note: Based on DENR-Community Environment and Natural (including ordinances enacted by local government units) enjoy the
Resources Office (CENRO-West) certification, project area not presumption of constitutionality. To overthrow this presumption, there
environmentally critical area. SC is not trier of facts. Proclamation No. must be a clear and unequivocal breach of the Constitution, not
2146 issued on December 14, 1981, lists areas and types of projects as merely a doubtful or argumentative contradiction. In short, the
ECA and within EIS system under PD1586, eg., heavy industries, iron conflict with the Constitution must be shown beyond reasonable
and steel mills, smelting plants, major mining and quarrying projects, doubt. Where doubt exists, even if well-founded, there can be no
etc.) finding of unconstitutionality. To doubt is to sustain.

The right to a balanced and healthful ecology carries with it a

Case: RURAL BANK OF MAKATI, INC. vs. MUNICIPALITY OF MAKATI, G.R. correlative duty to refrain from impairing the environment . . . The LGC
No. 150763, 7/2/2004 provisions invoked by private respondents merely seek to give flesh
and blood to the right of the people to a balanced and healthful
FACTS: For non-payment of mayor’s permit fee and annual business ecology. In fact, the General Welfare Clause, expressly mentions this
taxes, criminal charges against certain officers of Petitioner. Pending right.
these charges, Respondent ordered the closure of the bank,
prompting the latter to pay, under protest P82,408.66 as mayor’s In light then of the principles of decentralization and devolution
permit fee and annual business taxes. Petitioner filed a civil complaint enshrined in the LGC and the powers granted therein to local
for sum of money and damages against Respondent with RTC government units under Section 16 (the General Welfare Clause), and
alleging that the collection of subject fees and closure order were under Sections 149, 447(a) (1) (vi), 458(a)(1)(vi) and 468(a)(1)(vi),
oppressive and arbitrary which resulted loss of expected earnings. which unquestionably involve the exercise of police power, the
RTC dismissed the complaint, which decision was sustained by the CA validity of the questioned Ordinances cannot be doubted.
holding that the closure order was a legitimate exercise of police
power by Respondent. Hence, petition with SC. Case: TAN vs. PEREÑA, G.R. No. 149743, 2/18/2005

DECISION: Assailed decision AFFIRMED with modification deleting
closure order. RE (imposition of fees) - Municipal corporations are
agencies of the State for the promotion and maintenance of local
self-government and as such are endowed with police powers in
order to effectively accomplish and carry out the declared objects of
their creation. 20 The authority of a local government unit to exercise
FACTS: How many cockpits may be allowed to operate in a city or
municipality? Comes into play, the traditional power of the national
government to enact police power measures, on one hand, and the
vague principle of local autonomy now enshrined in the Constitution
on the other. PD449 (Cockfighting Law of 1974) provided that only
one cockpit shall be allowed in each city/municipality except that in

6
cities or municipalities with a population of over 100T, two cockpits injunction reasoning that the sole agency of the government which
may be established, maintained or operated. In 1993, the Municipal can regulate CATV operation is the NTC, and that the LGUs cannot
Council of Daanbantaya, Cebu enacted municipal ordiances which exercise regulatory power over it without appropriate legislation. Trial
eventually allowed the operation of not more than three cockpits in court’s ruling was reversed by the CA holding that, NTC (under EO205)
the municipality. In 1995, Petitioner (Leonardo Tan) applied for a has the authority to issue a certificate of authority to operate a CATV
license to operate a cockpit. Respondent (Socorro Perena), who was system, this does not preclude the city council from regulating the
an existing licensee, filed a complaint with the RTC to enjoin Petitioner operation of such a system in their locality under the powers
from operating his cockpit citing that the challenged ordinance conferred by the LGC (of 1983).
allowing the operation of not more than three cockpits violated
PD449. The trial court dismissed the complaint and upheld Petitioner’s RULING: Petition GRANTED. Significantly, President Marcos and
franchise reasoning that, while the ordiance may be in conflict with President Aquino, in the exercise of their legislative power, issued P.D.
PD449, any doubt in interpretation should be resolved in favor of the No. 1512, E.O. No. 546 and E.O. No. 205. Hence, they have the force
grant of more power to LGUs under the LGC’s principle of devolution. and effect of statutes or laws passed by Congress. That the regulatory
Court of Appeals reversed the trial court’s decision. Hence, power stays with the NTC is also clear from President Ramos' E.O. No.
Petitioner’s appeal to the SC. 436 mandating that the regulation and supervision of the CATV
industry shall remain vested "solely" in the NTC. In light of the above
RULING: Petition DENIED. For Petitioner, Section 447(a)(3)(v) of the laws and E.O. No. 436, the NTC exercises regulatory power over CATV
LGC sufficiently repeals Section 5(b) of the Cockfighting Law, vesting operators to the exclusion of other bodies.
as it does on LGUs the power and authority to issue franchises and
regulate the operation and establishment of cockpits in their But, lest we be misunderstood, nothing herein should be interpreted
respective municipalities, any law to the contrary notwithstanding. as to strip LGUs of their general power to prescribe regulations under
However, while the Local Government Code expressly repealed the general welfare clause of the Local Government Code. It must be
several laws, PD449 was not among them. Section 534(f) of the LGC emphasized that when E.O. No. 436 decrees that the "regulatory
declares that all general and special laws or decrees inconsistent with power" shall be vested "solely" in the NTC, it pertains to the "regulatory
the Code are hereby repealed or modified accordingly, but such power" over those matters which are peculiarly within the NTC's
clause is not an express repealing clause because it fails to identify or competence, such as, the: (1) determination of rates, (2) issuance of
designate the acts that are intended to be repealed. "certificates of authority, (3) establishment of areas of operation, (4)
examination and assessment of the legal, technical and financial
While the sanggunian retains the power to authorize and license the qualifications of applicant operators, (5) granting of permits for the
establishment, operation, and maintenance of cockpits, its discretion use of frequencies, (6) regulation of ownership and operation, (7)
is limited in that it cannot authorize more than one cockpit per city or adjudication of issues arising from its functions, and (8) other similar
municipality, unless such cities or municipalities have a population of matters. Within these areas, the NTC reigns supreme as it possesses the
over one hundred thousand, in which case two cockpits may be exclusive power to regulate — a power comprising varied acts, such
established. as "to fix, establish, or control; to adjust by rule, method or established
mode; to direct by rule or restriction; or to subject to governing
Cockfighting Law arises from a valid exercise of police power by the principles or laws."
national government. Of course, local governments are similarly
empowered under Section 16 of the Local Government Code. We do There is no dispute that respondent Sangguniang Panlungsod, like
not doubt, however, the ability of the national government to other local legislative bodies, has been empowered to enact
implement police power measures that affect the subjects of ordinances and approve resolutions under the general welfare clause
municipal government, especially if the subject of regulation is a of B.P. Blg. 337, the Local Government Code of 1983. That it continues
condition of universal character irrespective of territorial jurisdictions. to posses such power is clear under the new law, R.A. No. 7160.
Cockfighting is one such condition. It is a traditionally regulated
activity, due to the attendant gambling involved or maybe even the The general welfare clause is the delegation in statutory form of the
fact that it essentially consists of two birds killing each other for public police power of the State to LGUs. Through this, LGUs may prescribe
amusement. Laws have been enacted restricting the days when regulations to protect the lives, health, and property of their
cockfights could be held, and legislation has even been emphatic constituents and maintain peace and order within their respective
that cockfights could not be held on holidays celebrating national territorial jurisdictions. Accordingly, we have upheld enactments
honor such as Independence Day and Rizal Day. providing, for instance, the regulation of gambling, the occupation of
rig drivers, the installation and operation of pinball machines, the
The obvious thrust of our laws designating when cockfights could be maintenance and operation of cockpits, the exhumation and transfer
held is to limit cockfighting and imposing the one-cockpit-per- of corpses from public burial grounds, and the operation of hotels,
municipality rule is in line with that aim. Cockfighting is a valid matter motels, and lodging houses as valid exercises by local legislatures of
of police power regulation, as it is a form of gambling essentially the police power under the general welfare clause.
antagonistic to the aims of enhancing national productivity and self-
reliance. Limitation on the number of cockpits in a given municipality Like any other enterprise, CATV operation maybe regulated by LGUs
is a reasonably necessary means for the accomplishment of the under the general welfare clause. This is primarily because the CATV
purpose of controlling cockfighting, for clearly more cockpits equals system commits the indiscretion of crossing public properties. (It uses
more cockfights. public properties in order to reach subscribers.) The physical realities
of constructing CATV system — the use of public streets, rights of ways,
A municipal ordinance must not contravene the Constitution or any the founding of structures, and the parceling of large regions — allow
statute, otherwise it is void. Ordinance No. 7 unmistakably an LGU a certain degree of regulation over CATV operators. This is the
contravenes the Cockfighting Law in allowing three cockpits in same regulation that it exercises over all private enterprises within its
Daanbantayan. territory.

Case: BATANGAS CATV, INC. vs. CA, G.R. No. 138810, 9/29/2004
In the late 1940s, John Walson, an appliance dealer in Pennsylvania,
suffered a decline in the sale of television (tv) sets because of poor
reception of signals in his community. Troubled, he built an antenna
on top of a nearby mountain. Using coaxial cable lines, he distributed
the tv signals from the antenna to the homes of his customers.
Walson's innovative idea improved his sales and at the same time
gave birth to a new telecommunication system — the Community
Antenna Television (CATV) or Cable Television. The query in this case
is – may a LGU regulate the subscriber rates charged by CATV
operators within its territorial jurisdiction?
But, while we recognize the LGUs' power under the general welfare
clause, we cannot sustain Resolution No. 210. We are convinced that
respondents strayed from the well recognized limits of its power. The
flaws in Resolution No. 210 are: (1) it violates the mandate of existing
laws and (2) it violates the State's deregulation policy over the CATV
industry.
Resolution No. 210 is an enactment of an LGU acting only as agent of
the national legislature. Necessarily, its act must reflect and conform
to the will of its principal. To test its validity, we must apply the
particular requisites of a valid ordinance as laid down by the
accepted principles governing municipal corporations.

On July 28, 1986, Respondent city council enacted a resolution
granting Petitioner a permit to construct, install, and operate a CATV
system in Batangas City with authority to charge subscribers the
maximum rates specified therein with condition that rate increases
would be subject to council approval. When Petitioner increased its
subscriber rates from P88.00 to P180.00 per month in 1993, Respondent
Mayor wrote/threatened Petitioner with the cancellation of its permit
unless it secures the approval of respondent City Council. Petitioner
claiming that, under EO205, the National Telecommunications
Commission has sole authority to regulate the CATV operation in the
Philippines, Petitioner filed a petition before the RTC to enjoin from
enforcing the questioned ordinance. The trial court granted the
The apparent defect in Resolution No. 210 is that it contravenes E.O.
No. 205 and E.O. No. 436 insofar as it permits respondent Sangguniang
Panlungsod to usurp a power exclusively vested in the NTC, i.e., the
power to fix the subscriber rates charged by CATV operators. As
earlier discussed, the fixing of subscriber rates is definitely one of the
matters within the NTC's exclusive domain.
"The rationale of the requirement that the ordinances should not
contravene a statute is obvious. Municipal governments are only
agents of the national government. Local councils exercise only
delegated legislative powers conferred on them by Congress as the
national lawmaking body. The delegate cannot be superior to the

7
principal or exercise powers higher than those of the latter. It is a Affairs, Transactions and Operations of LGU):
heresy to suggest that the local government units can undo the acts - No money to be paid out of local treasury except in
of Congress, from which they have derived their power in the first pursuance of an appropriation ordinance or law;
place, and negate by mere ordinance the mandate of the statute. - Local government funds and monies shall be spent
solely for public purposes;
OTHER CASES: VELASCO vs. VILLEGAS 120 SCRA 568 – Manilia - Local revenue is generated only from sources expressly
ordinance prohibiting barbershops from conducting massage authorized by law or ordinance, collection thereof shall
business in another room was held valid, as it was passed for at all times be acknowledged properly;
protection of public morals. - All monies officially received by a local government
officer in any capacity or on any occasion shall be
BALACUIT vs. CFI OF AGUSAN DEL NORTE 163 SCRA 182 - Ordinance accounted for as local funds, unless otherwise,
penalizing persons charging full payment for admission of children provided by law;
ages (ages 7 to 12) in moviehouse was an invalid exercise of the - Trust funds in local treasury shall not be paid out except
police power for being unreasonable and oppressive on business of in fulfillment of purpose for which trust was created or
petitioners. funds received;
- Local budget shall operationalize approved
DE LA CRUZ vs. PARAS 123 SCRA 759 – Ordinance of Bocaue, Bulacan development plans.
prohibiting operation of nightclubs was declared invalid because it
was prohibitory and not merely regulatory in character.
Case: HUMBERTO BASCO vs. PAGCOR, G.R. No. 91649, 5/14/1991
Section 17, LGC – Basic Services and Facilities – LGU endeavor to be
self-reliant and continue exercise powers and discharge their duties Under PD 1869, the Philippine Amusement and Gaming Corporation
and functions currently vested upon them; also discharge functions (PAGCOR) was empowered to regulate and centralized all games of
and responsibilities of national agencies devlolved to them pursuant chance authorized by existing franchise or permitted by law.
to the LGC; exercise such other powers and discharge other functions Petitioners (as lawyers and taxpayers) challenging the
as are necessary, appropriate or incidental to efficient and effective constitutionality of PD1869, alleged that said law waived Manila City’s
provision of basic services and facilities enumerate in Sec. 17. (see list right to impose taxes and license fees, which by law is recognized and
of basic services and facilities) thus, was an intrusion into LGU’s right to impose local taxes and
license fees in contravention of the constitutionally enshrined
Note: Public works and infrastructure projects and other facilities, principle of local autonomy. Specifically, the challenged is directed
programs and services funded by national government under GAA against Section 13 par. (2) of P.D. 1869 which exempts PAGCOR, as
and other laws, not covered by Section 17 except where LGU is duly the franchise holder from paying any "tax of any kind or form, income
designated as the implementing agency for such or otherwise, as well as fees, charges or levies of whatever nature,
project/facilities/programs and services. whether National or Local", except for the 5% franchise tax due to the
National Government.

Section 18 – Power to Generate & Apply Resources – restates and
implements Section 5, 6 and 7 of Article 10 of the Constitution, but the
power is subject to limitations imposed by Congress.
-includes:
1. Establishing an organization responsible for
efficient and effective implementation of their
development plans, programs and objective and
priorities;
2. 2. Creating their own sources of revenue and to
levy taxes, fees and charges which shall accrue
exclusively to their own use and disposition and
which shall be retained by them;
3. Having a just share in national taxes which shall be
automatically and directly released to them
without need of further action;
4. Having an equitable share in proceeds and from
utilization and development of national wealth
and resources within their respective jurisdictions
including sharing the same with inhabitants by way
of direct benefits;
5. To acquire, develop, lease, encumber and
alienate or otherwise dispose of real or personal
property held by them in their private capacity
and apply their resources and assets for
productive, developmental or welfare purposes, in
exercise or furtherance of their governmental or
proprietary powers and functions and ensure
thereby their development as self-feliant
communities and active participants in attainment Case: LUZ YAMANE vs. BA LEPANTO CONDOMINIUM CORP., G.R. No.
of national goals.
RULING: Petition DISMISSED. Section 5, Article X of the 1987
Constitution (on Local Autonomy) provides that “each local
government unit shall have the power to create its own source of
revenue and to levy taxes, fees, and other charges subject to such
guidelines and limitation as the congress may provide, consistent with
the basic policy on local autonomy. Such taxes, fees and charges
shall accrue exclusively to the local government." The power of local
government to "impose taxes and fees" is always subject to
"limitations" which Congress may provide by law. Since PD 1869
remains an "operative" law until "amended, repealed or revoked"
(Sec. 3, Art. XVIII, 1987 Constitution), its "exemption clause" remains as
an exception to the exercise of the power of local governments to
impose taxes and fees. It cannot therefore be violative but rather is
consistent with the principle of local autonomy. Local governments
have no power to tax instrumentalities of the National Government.
PAGCOR is a government owned or controlled corporation with an
original charter, PD 1869. All of its shares of stocks are owned by the
National Government. In addition to its corporate powers (Sec. 3, Title
II, PD 1869) it also exercises regulatory powers, thus PAGCOR has a
dual role, to operate and to regulate gambling casinos. The latter role
is governmental, which places it in the category of an agency or
instrumentality of the Government. Being an instrumentality of the
Government, PAGCOR should be and actually is exempt from local
taxes. Otherwise, its operation might be burdened, impeded or
subjected to control by a mere Local government. Otherwise, mere
creatures of the State can defeat National policies thru extermination
of what local authorities may perceive to be undesirable activates or
enterprise using the power to tax as "a tool for regulation"
154993, 10/25/2005

FACST: Respondent, a duly organized condomium corporation

NOTE: Sections 128-383, Book II of LGC provides for detailed provisions holding title to the common and limited common areas of the BA-
on Local Taxation and Fiscal Matters. Lepanto Condominium, collected regular assessments from its
members for operating expenses, capital expenditures on the
NOTE: Section 130, LGC (Fundamental Principles Governing Exercise common areas, and other special assessments, pursuant to its
of Power to Tax and Generate Revenues by LGUs): Amended By-Laws.
- Taxation shall be uniform in each LGU;
- Taxes, fees, charges and imposition shall be equitable Without citing as basis any specific provision of the Revenue Code of
and based as far as practicable on taxpayer’s ability to Makati or the Local Government Code, Petitioner (City Treasurer of
pay; levied only for a public purpose; not unjust, Makati City) issued a notice of assessment holding Petitioner liable to
excessive, oppressive or confiscatory; not contrary to pay business taxes, fees and charges totaling P1,601,013.77 for the
law, public policy, national economic policy or in years 1995 to 1997. Petitioner reasoned that Respondent is engaged
restraint of trade; in a profit venture as the collection of dues from unit owners was
- Collection of taxes, fees, charges and other impositions primarily "to sustain and maintain the expenses of the common areas,
shall in no case be let to any private person; giving full appreciative living values for the individual condominium
- Revenue collection shall inure solely to the benefit of, occupants, generating better marketable prices for future sale of
and be subject to the disposition by LGU unless their units.
specifically provided herein; and
- Each LGU shall, as far as practicable, evolve a Upon denial of its protest, Respondent filed an appeal with the
progressive system of taxation Regional Trial Court which appeal was dismissed. On review by the
Court of Appeals, the latter reversed the trial court’s decision and
NOTE: Section 305, LGC (Fundamental Principles Governing Financial declared that the corporation was not liable to pay business taxes to

8
the City of Makati. Her motion for reconsideration denied, Petitioner the Airport Lands and Buildings and threatened to sell at public
filed a petition for review with the Supreme Court. auction these properties if MIAA failed to pay the real estate tax
delinquency, MIAA sought clarification of OGCC Opinion No. 061. The
RULING: Petition DENIED. The power of local government units to OGCC then issued Opinion No. 147 clarifying OGCC Opinion No. 061
impose taxes within its territorial jurisdiction derives from the stating that Section 206 of the Local Government Code requires
Constitution itself, which recognizes the power of these units "to persons exempt from real estate tax to show proof of exemption and
create its own sources of revenue and to levy taxes, fees, and that in the case of MIAA, Section 21 of the MIAA Charter is the proof
charges subject to such guidelines and limitations as the Congress that MIAA is exempt from real estate tax.
may provide, consistent with the basic policy of local autonomy."
These guidelines and limitations as provided by Congress are in main MIAA petitioned the CA for prohibition and injunction, with prayer for
contained in the Local Government Code of 1991, which provides for preliminary injunction or temporary restraining order seeking to
comprehensive instances when and how local government units may restrain the City of Parañaque from imposing real estate tax on,
impose taxes. The significant limitations are enumerated primarily in levying against, and auctioning for public sale the Airport Lands and
Section 133 of the Code (prohibition on income taxes except when Buildings, which petition however was dismissed for having been filed
levied on banks and other financial institutions). Found in Title I of Book beyond the 60-day reglementary period. Hence, this petition for
II of the Code are other taxes imposable by local government units, review.
including business taxes. Under Section 151 of the Code, cities such as
Makati are authorized to levy the same taxes fees and charges as RULING: Petition GRANTED. The Airport Lands and Buildings of MIAA
provinces and municipalities. are EXEMPT from the real estate tax imposed by the City of
Parañaque. All the real estate tax assessments, including the final
Section 143 of the Code specifically enumerates several types of notices of real estate tax delinquencies, issued by the City of
business on which municipalities and cities may impose taxes. Parañaque on the Airport Lands and Buildings of the Manila
Moreover, the local sanggunian is also authorized to impose taxes on International Airport Authority, except for the portions that the Manila
any other businesses not otherwise specified under Section 143 which International Airport Authority has leased to private parties, are
the sanggunian concerned may deem proper to tax. declared VOID.

The coverage of business taxation particular to the City of Makati is
provided by the Makati Revenue Code enacted through Municipal
Ordinance No. 92-072. Article A, Chapter III of said code governs
business taxes in Makati, and it is quite specific as to the particular
businesses which are covered by business taxes. The initial inquiry is
what provision of the Makati Revenue Code does the City Treasurer
rely on to make the Corporation liable for business taxes.
As stated earlier, local tax on businesses (that is, "trade or commercial
activity regularly engaged in as a means of livelihood or with a view
to profit") is authorized under Section 143 of the Local Government
Code. It is thus imperative that in order that Respondent may be
subjected to business taxes, its activities must fall within the definition
of business as provided in the Local Government Code. And to hold
that they do is to ignore the very statutory nature of a condominium
corporation.
The creation of the condominium corporation is sanctioned by RA No.
4726, (Condominium Act - a condominium is an interest in real
property consisting of a separate interest in a unit in a residential,
industrial or commercial building and an undivided interest in
common, directly or indirectly, in the land on which it is located and
in other common areas of the building). In line with the authority of
the condominium corporation to manage the condominium project,
it may be authorized, in the deed of restrictions, "to make reasonable
assessments to meet authorized expenditures, each condominium
unit to be assessed separately for its share of such expenses in
proportion (unless otherwise provided) to its owner's fractional interest
in any common areas." The collection of these assessments from unit
owners is the basis for the City Treasurer's claim that the Corporation
is doing business as these collections are "with the end view of getting
full appreciative living values" for the condominium units, and as a
result, profit is obtained once these units are sold at higher prices. The
Court cites with approval the two counterpoints raised by the Court
of Appeals in rejecting this contention. First, if any profit is obtained by
the sale of the units, it accrues not to the corporation but to the unit
owner. Second, if the unit owner does obtain profit from the sale of his
unit, he is already required to pay capital gains tax on the
appreciated value of the condominium unit.
Case: MIAA vs. CA, G.R. No. 155650. 7/20/2006
As a rule, a government-owned or controlled corporation is not
exempt from real estate tax. However, MIAA is not a government-
owned or controlled corporation. A government-owned or controlled
corporation must be "organized as a stock or non-stock corporation."
MIAA is not organized as a stock or non-stock corporation. MIAA is not
a stock corporation because it has no capital stock divided into
shares, has no stockholders or voting shares and its capital is not
divided into shares of stock. Neither is it a non-stock corporation
because it has no members. A non-stock corporation must have
members. Even if the Government is considered as the sole member
of MIAA, this will not make MIAA a non-stock corporation because
non-stock corporations cannot distribute any part of their income to
their members and in MIAA’s case, Section 11 of its Charter requires it
to remit 20% of its annual gross operating income to the National
Treasury, thus, preventing MIAA from qualifying as a non-stock
corporation. Further, non-stock corporations are organized for
charitable, religious, educational, professional, cultural, recreational,
fraternal, literary, scientific, social, civil service, or similar purposes, like
trade, industry, agriculture and like chambers. MIAA is not organized
for any of these purposes. MIAA, a public utility, is organized to
operate an international and domestic airport for public use.
MIAA is a government instrumentality vested with corporate powers
to perform efficiently its governmental functions. MIAA is like any other
government instrumentality, the only difference is that MIAA is vested
with corporate powers. When the law vests in a government
instrumentality corporate powers, the instrumentality does not
become a corporation, unless the government instrumentality is
organized as a stock or non-stock corporation. Thus, MIAA exercises
the governmental powers of eminent domain, police authority and
the levying of fees and charges. At the same time, MIAA exercises "all
the powers of a corporation under the Corporation Law, insofar as
these powers are not inconsistent with the provisions of this Executive
Order."
A government instrumentality like MIAA falls under Section 133(o) of
the Local Government Code, which states that, unless otherwise
provided by the Code, the exercise of the taxing powers of provinces,
cities, municipalities, and barangays shall not extend to the levy of
taxes, fees or charges of any kind on the National Government, its
agencies and instrumentalities and local government units.

FACTS: Petitioner Manila International Airport Authority operates the Section 133(o) recognizes the basic principle that local governments
Ninoy Aquino International Airport (NAIA) Complex in Parañaque City cannot tax the national government, which historically merely
under Executive Order No. 903, otherwise known as the Revised delegated to local governments the power to tax. While the 1987
Charter of the Manila International Airport Authority. Subsequently, Constitution now includes taxation as one of the powers of local
Executive Order Nos. 909 and 298 amended the MIAA Charter, where governments, local governments may only exercise such power
as operator of the international airport, MIAA administers the land, "subject to such guidelines and limitations as the Congress may
improvements and equipment within the NAIA Complex. The MIAA provide."
Charter transferred to MIAA approximately 600 hectares of land, 3
including the runways and buildings then under the Bureau of Air When local governments invoke the power to tax on national
Transportation. government instrumentalities, such power is construed strictly against
local governments. The rule is that a tax is never presumed and there
After, the Office of the Government Corporate Counsel (OGCC) must be clear language in the law imposing the tax. Any doubt
issued Opinion No. 061 stating that the Local Government Code of whether a person, article or activity is taxable is resolved against
1991 withdrew the exemption from real estate tax granted to MIAA taxation. This rule applies with greater force when local governments
under Section 21 of the MIAA Charter, MIAA negotiated with seek to tax national government instrumentalities.
Respondent City of Parañaque to pay the real estate tax imposed by
the City and paid some of said taxes already due. Later, MIAA The Airport Lands and Buildings of MIAA are property of public
received Final Notices of Real Estate Tax Delinquency (totaling dominion and therefore owned by the State or the Republic of the
P624,506,725.42) from the City of Parañaque for the taxable years Philippines. Properties of public dominion mentioned in Article 420 of
1992 to 2001. the Civil Code, like "roads, canals, rivers, torrents, ports and bridges
constructed by the State," are owned by the State. The term "ports"
When Parañaque City issued notices of levy and warrants of levy on includes seaports and airports. The MIAA Airport Lands and Buildings

9
constitute a "port" constructed by the State. The Airport Lands and RULING: On October 10, 1991, Congress enacted RA 7160, (Local
Buildings are devoted to public use because they are used by the Government Code of 1991). The power of the LGUs to grant
public for international and domestic travel and transportation. The allowances and other benefits to judges and other national officials
fact that the MIAA collects terminal fees and other charges from the stationed in their respective territories was expressly provided in
public does not remove the character of the Airport Lands and Sections 447(a)(1)(xi), 458(a)(1)(xi) and 468(a)(1)(xi) of the Code.
Buildings as properties for public use. The charging of fees to the Section 447(a)(1)(xi) of RA 7160, the Local Government Code of 1991,
public does not determine the character of the property whether it is provides: “When the finances of the municipal government allow,
of public dominion or not. Article 420 of the Civil Code defines provide for additional allowances and other benefits to judges,
property of public dominion as one "intended for public use." prosecutors, public elementary and high school teachers, and other
national government officials stationed in or assigned to the
As properties of public dominion, the airport properties are outside the municipality;
commerce of man. Properties of public dominion, being for public
use, are not subject to levy, encumbrance or disposition through The controversy actually centers on the seemingly sweeping provision
public or private sale. Any encumbrance, levy on execution or in NCC No. 67 which states that "no one shall be allowed to collect
auction sale of any property of public dominion is void for being RATA from more than one source." Does this mean that judges cannot
contrary to public policy. Essential public services will stop if properties receive allowances from LGUs in addition to the RATA from the
of public dominion are subject to encumbrances, foreclosures and Supreme Court? By no stretch of the imagination can NCC No. 67 be
auction sale. This will happen if the City of Parañaque can foreclose construed as nullifying the power of LGUs to grant allowances to
and compel the auction sale of the 600-hectare runway of the MIAA judges under the Local Government Code of 1991. It was issued
for non-payment of real estate tax. primarily to make the grant of RATA to national officials under the
national budget uniform. In other words, it applies only to the national
Case: SMART COMMUNICATIONS, INC. vs. CITY OF DAVAO, G.R. No. funds administered by the DBM, not the local funds of LGUs.
155491, 9/16/2008
To rule against the power of LGUs to grant allowances to judges as
FACTS: The Tax Code of Davao City ISec. 1, Art. 10 thereof) provided what respondent COA would like us to do will subvert the principle of
that: “Notwithstanding any exemption granted by any law or other local autonomy zealously guaranteed by the Constitution. The Local
special law, there is hereby imposed a tax on businesses enjoying a Government Code of 1991 was specially promulgated by Congress
franchise, at a rate of seventy-five percent (75%) of one percent (1%) to ensure the autonomy of local governments as mandated by the
of the gross annual receipts for the preceding calendar year based Constitution. By upholding, in the present case, the power of LGUs to
on the income or receipts realized within the territorial jurisdiction of grant allowances to judges and leaving to their discretion the amount
Davao City. of allowances they may want to grant, depending on the availability
of local funds, we ensure the genuine and meaningful local
RULING: Smart is of the view that the only taxes it may be made to autonomy of LGUs.
bear under its franchise are the national franchise tax (now VAT),
income tax, and real property tax. It claims exemption from the local
franchise tax because the “in lieu of taxes” clause in its franchise does Section 19,LGC – LGU’s Power of Eminent Domain – LGU through its
not distinguish between national and local taxes. We pay heed that Chief Executive acting pursuant to an ordinance; for public use or
R.A. No. 7294 is not definite in granting exemption to Smart from local purpose or welfare for the benefit of poor and landless; upon
taxation. Section 9 of R.A. No. 7294 imposes on Smart a franchise tax payment of just compensation, pursuant to provisions of the
equivalent to three percent (3%) of all gross receipts of the business Constitution and pertinent laws.
transacted under the franchise and the said percentage shall be in
lieu of all taxes on the franchise or earnings thereof. R.A. No 7294 does Conditions for Exercise of Power of Eminent Domain: (i) Prior valid and
not expressly provide what kind of taxes Smart is exempted from. It is definite offer to owner which latter did not accept; (II) LGU may take
not clear whether the “in lieu of all taxes” provision in the franchise of immediate possession of property upon filing of expropriation
Smart would include exemption from local or national taxation. What proceedings (Rule 67 of Rules of Court) and payment of deposit of at
is clear is that Smart shall pay franchise tax equivalent to three least 15% of fair market value of property based on current tax
percent (3%) of all gross receipts of the business transacted under its declaration; amount to be paid for expropriation shall be determined
franchise. But whether the franchise tax exemption would include by proper court (reference to Commissioner) based on fair market
exemption from exactions by both the local and the national value at the time of taking.
government is not unequivocal.
- Eminent Domain – inherent attribute of sovereignty to take private
The uncertainty in the “in lieu of all taxes” clause in R.A. No. 7294 on property upon payment of just compensation.
whether Smart is exempted from both local and national franchise tax
must be construed strictly against Smart which claims the exemption. Case: MUN. OF PARANAQUE vs. V.M. REALTY CORP. 292 SCRA 678
Smart has the burden of proving that, aside from the imposed 3%
franchise tax, Congress intended it to be exempt from all kinds of FACTS: A resolution passed by Municipal Council authorized Chief
franchise taxes – whether local or national. However, Smart failed in Executive to exercise police power.
this regard.
RULING: LGC in effect when complaint for expropriation was filed,
Tax exemptions are never presumed and are strictly construed explicitly requires an ordinance for this purpose. If Congress intended
against the taxpayer and liberally in favor of the taxing authority.[22] to allow LGU to exercise eminent domain through MERE resolution, it
They can only be given force when the grant is clear and categorical. would have simply adopted the language of the previous local
The surrender of the power to tax, when claimed, must be clearly government code (BP 337 of 1983). Where the law is clear and
shown by a language that will admit of no reasonable construction ambiguous, the law is applied according to the express terms.
consistent with the reservation of the power. If the intention of the Eminent Domain necessarily involves a derogation of a fundamental
legislature is open to doubt, then the intention of the legislature must or private right of the people, hence, manifest change in legislative
be resolved in favor of the State. language from “resolution” under BP337 to “ordinance” under
RA7160 demands strict interpretation. Petitioner relies on Art. 36 of
In this case, the doubt must be resolved in favor of the City of Davao. Rule VI of the Implementing Rules which requires only a “resolution” to
The “in lieu of all taxes” clause applies only to national internal authorize the LGU to exercise eminent domain. This is clearly
revenue taxes and not to local taxes. misplaced. Section 19 of the LGC, the law itself, surely prevails over
said rule which merely seeks to implement it. The clear letter of the
[T]he "in lieu of all taxes" clause in Smart's franchise refers only to taxes, law is controlling and cannot be amended by mere administrative
other than income tax, imposed under the National Internal Revenue rule issued for its implementation.
Code. The "in lieu of all taxes" clause does not apply to local taxes.
The clear intent is for the "in lieu of all taxes" clause to apply only to Note: Resolution is a mere declaration of sentiment/opinion of
taxes under the National Internal Revenue Code and not to local lawmaking body on a specific matter; it is temporary in nature; third
taxes. Even with respect to national internal revenue taxes, the "in lieu reading not necessary unless decided otherwise by majority of all
of all taxes" clause does not apply to income tax. sangguniang members. Ordinance on the otherhand, is law and is of
general and permanent character and requires 3 readings.
Case: JUDGE TOMAS C. LEYNES vs. COA, G.R. No. 143596, 12/11/2003
Case: AMOS FRANCIA, vs. MUN. OF MEYCAUAYAN, G.R. No. 170432,
FACT: Petitioner was formerly receiving a P1600-monthly allowance 3/24/2008
from the Municipality of Naujan while he was stationed there as judge
of the municipal trial court. Respondent Commission on Audit FACTS: Respondent filed a complaint to expropriate Petitioners’
(upholding the Regional Director and Provincial Auditor) disallowed 16,256 sq. m. idle property which it planned to use as a common
said allowance citing that the latter along with Petitioner’s RATA from public terminal for all types of public utility vehicles with a weighing
the Supreme Court violated certain budget circulars (NCC#67) that scale for heavy trucks. In their answer, Petitioners averred that the
no one shall be allowed to collect RATA from more than one source. subject land was developed contrary to Respondent’s claim of being
raw land, for which reason, Respondent’s offer price of 333,500 (or

10
P111.99 per square meter) was too low. Petitioners essentially aver Case: ANTONIO FAVIS vs. THE CITY OF BAGUIO, G.R. No. L-29910,
that the CA erred in upholding the RTC's order that, in expropriation 4/25/1969
cases, prior determination of the existence of a public purpose was
not necessary for the issuance of a writ of possession. FACTS: A resolution passed by the city council closed the dead-end
portion of Lapu-lapu Street to public use. By subsequent resolution,
RULING: Petitioner DENIED. Sec. 19, LGC provides that, a LGU may, the Mayor as authorized therein, leased the closed portion to Shell
through its chief executive and acting pursuant to an ordinance, Corporation. Petitioner Favis protested the lease to Shell claiming that
exercise the power of eminent domain for public use, or purpose, or said lease diminished the width of Lapu-Lapu Street and that the City
welfare for the benefit of the poor and the landless, upon payment was bereft of authority to lease any portion of its public streets in favor
of just compensation, pursuant to the provisions of the Constitution of anyone. Subsequently, Petitioner filed a complaint for annulment
and pertinent laws. Before a LGU may enter into possession of the of the lease with damages in the Court of First Instance of Baguio. The
property sought to be expropriated, it must (1) file a complaint for latter court dismissed his complaint. Hence, appeal to the Supreme
expropriation sufficient in form and substance in the proper court and Court.
(2) deposit with the said court at least 15% of the property's fair market
value based on its current tax declaration. The law does not make the RULING: APPEAL Denied. Appellant may not challenge the city
determination of a public purpose a condition precedent to the council's act of withdrawing a strip of Lapu-Lapu Street at its dead
issuance of a writ of possession. end from public use and converting the remainder thereof into an
alley. These are acts well within the ambit of the power to close a city
street. The city council is the authority competent to determine if a
Section 20, LGC – LGU Power to Reclassify Land – City or Municipality certain property is still necessary for public use. This power is
through ordinance passed after conducting public hearings for that discretionary and will not ordinarily be controlled or interfered with by
purpose, may authorize the reclassification of agricultural lands and the courts, absent a plain case of abuse or fraud or collusion.
provide for the manner of their utilization or disposition. Faithfulness to the public trust will be presumed. The fact that some
private interests may be served incidentally will not invalidate the
Agricultural Land, defined: Those public lands acquired from Spain vacation ordinance.
which are not timber or mineral land; land devoted to agriculture or
to any growth. Given the precept that the discretion of a municipal corporation is
broad in scope and should thus be accorded great deference in the
Grounds for Reclassification: (i) When land ceases to be economically spirit of the Local Autonomy Law (R.A. 2264), and absent a clear
feasible and sound for agricultural purposes as determined by the abuse of discretion, we hold that the withdrawal for lease of the
Dept. of Agriculture; and (ii) when land shall have substantially disputed portion of Lapu-Lapu Street and the conversion of the
greater economic value for residential, commercial or industrial remainder of the dead-end part thereof into an alley, does not call
purposes as determined by the Sanggunian; for, and is beyond the reach of, judicial interference.

Conditions for Reclassification: Percentage limits, that is, of the total From the fact that the leased strip of 100 square meters was
agricultural area at the time of passage of reclassification – (a) for withdrawn from public use, it necessarily follows that such leased
highly urbanized cities and independent component cities – 15%; (b) portion becomes patrimonial property. Article 422 of the Civil Code
for component cities and 1st to 3rd class municipalities – 10%; and (c) indeed provides that property of public domain, "when no longer
for 4th to 6th class municipalities – 5% intended for public use or public service, shall form part of the
patrimonial property of the State." Authority is not wanting for the
Note: President (upon Nat’l Economic Dev’t Authority’s proposition that "[property for public use of provinces and towns are
recommendation), when public interest so requires, authorize a city governed by the same principles as property of public dominion of
or municipality to reclassify lands in excess of limits set in Section 20(a). the same character." There is no doubt that the strip withdrawn from
public use and held in private ownership may be given in lease.
- Under Sec. 20(e) – Agricultural lands distributed to agrarian reform
beneficiaries pursuant to RA6657(CARL), shall not be affected by the The general rule is, one whose property does not abut on the closed
reclassification and the conversion of such lands into other purposes section of a street has no right to compensation for the closing or
shall be governed by Sec. 65 of CARL. vacation of the street, if he still has reasonable access to the general
system of streets. The circumstances in some cases may be such as to
Note: Sec. 65 of RA6657 – Conditions for conversion of agricultural give a right to damages to a property owner, even though his
lands held by agrarian reform program beneficiaries to non- property does not abut on the closed section. But to warrant recovery
agricultural use with DAR: (a) 5 year lapse from award of land; (ii) land in any such case the property owner must show that the situation is
ceased to be economically feasible and sound for agricultural such that he has sustained special damages differing in kind, and not
purpose; (iii) notice to affected parties; (iv) beneficiary has fully paid merely in degree, from those sustained by the public generally."
his obligation.
In the case at bar, no private right of appellant has been invaded. No
Section 21, LGC – Closure & Opening of Roads – The closure of special damage or damages he will incur by reason of the closing of
streets/roads is within the power of the local government unit (through a portion of Lapu-Lapu Street at its dead end. His property does not
council by way of ordinance). abut that street. In fact, the court has found that the remaining
portion of Lapu-Lapu Street, which actually is 4 meters in width, is
- LGU (by ordinance) – may permanently/temporarily close or open sufficient for the needs of appellant and that the leased portion —
any local road, alley, park or square falling within its jurisdiction. subject of this suit — "was not necessary for public use."

Note: In case of permanent closure, ordinance must be approved by,
at least 2/3 of all members of the sanggunian and when necessary,
an adequate substitute for the public facility subject of closure, is
provided.
- Property publicly withdrawn from public use may be used/conveyed
for any purpose for which other real property belonging to the LGU
concerned may be lawfully used or conveyed.
Note: No freedom park shall be closed permanently without provision
for its transfer/relocation to a new site. (see related B.P.880 Public
Assembly Act).
"The Constitution does not undertake to guarantee to a property
owner the public maintenance of the most convenient route to his
door. The law will not permit him to be cut off from the public
thoroughfares, but he must content himself with such route for outlet
as the regularly constituted public authority may deem most
compatible with the public welfare. When he acquires city property,
he does so in tacit recognition of these principles. If, subsequent to his
appreciation, the city authorities abandon a portion of the street to
which his property is not immediately adjacent, he may suffer loss
because of the inconvenience imposed, but the public treasury
cannot be required to recompense him. Such case is damnum
absque injuria."

- LGU has the power to close local and even national roads (Note:
LGU has no authority to order permanent closure/opening of a Case: COACO, INC. vs. HON. PASCUAL A. BERCILLES, G.R. No. L-40474,
national road, alley, park or square, such authority applies to local 8/29/1975
roads only, see sec. 2[a]).
FACTS: Petitioner Cebu Oxygen & Acytelene Co., Inc. applied for
Conditions for temporary closure of national/local roads under Sec. registration of title over a portion of M. Gorces Street in Mabolo, Cebu
2[c]: (i) occasion of actual emergency, fiesta celebrations, public City. Said portion was declared an abandoned road by the City
rallies, agricultural or industrial fairs, or undertaking of public works and Council of Cebu the same not being included in the Cebu
highways (eg. Banilad flyover); (ii) written order for temporary closure Development Plan, and later, by authority of the City Council, was
by local chief executive; (iii) no national or local road, alley, park or sold by the Acting Mayor to petitioner who was the highest bidder at
square shall be temporarily closed for athletic, cultural or civic activity a public bidding. On motion by the Assistant Provincial Fiscal (alleging
not officially sponsored, recognized or approved by local LGU that the subject property being a public road intended for a public
concerned. use, it is part of the public domain, outside the commerce of men,
and cannot be subject to registration by any private individual), the

11
trial court dismissed Petitioner’s application.
RULING: PETITION is granted. Order of dismissal set aside and trial court
ordered to proceed with the hearing of the petitioner's application
for registration of title.
Under the Cebu City Charter, the City Council is empowered to close
a city road or a street and further, use or convey property thus
withdrawn from public servitude for any purpose for which other real
property belonging to the City may be lawfully used or conveyed.
In the case of Favis vs. City of Baguio, the Court upholding the power
of the city council to close city streets and to vacate or withdraw the
same from public use was similarly assailed, declared that the city
council is the authority competent to determine whether or not a
certain property is still necessary for public use. This power to vacate
a street or alley is discretionary, and will not ordinarily be controlled or
interfered with by the courts, absent a plain case of abuse or fraud or
collusion. Faithfulness to the public trust will be presumed.
sue in behalf of the city and that the authorized representative under
the LGC is the city mayor for that purpose.
RULING: Generally, suit is commenced by the local executive upon
authority of the sanggunian, except where the city councilors
themselves and as representatives of/in behalf of the city, bring the
action to prevent unlawful disbursement of city funds.
Case: MUNICIPALITY OF PILILIA vs. CA 233 SCRA 484 – Municipality
cannot be represented by a private lawyer. Only provincial fiscal or
municipal attorney can represent a province or municipality in
lawsuits. This is mandatory. The municipality’s authority to employ a
private lawyer is limited to situations where the provincial fiscal is
disqualified to present it which disqualification must appear on
record. Fiscal’s refusal to represent the municipality is not legal
justification for employing the services of private counsel, Municipality
should request the Secretary of Justice to appoint an acting
provincial fiscal in place of the one who declined to handle it.

Since that portion of the city street subject of petitioner's application Case: RAMOS vs. CA 269 SCRA 34 –Petitioners Ramos and Baliuag
for registration of title was withdrawn from public use, it follows that Market Vendors’ Association filed a petition to declare certain
such withdrawn portion becomes patrimonial property which can be ordinances illegal. In said suit, Petitioners challenged the appearance
the object of an ordinary contract consisting with Article 422 of the of a private lawyer for the municipality. SC held, Only provincial fiscal,
Civil Code (that property of public dominion, when no longer under (Sec. 1683 of Revised Admin Code) provincial attorney or
intended for public use or for public service, shall form part of the municipal attorney may validly represent the municipality. The legality
patrimonial property of the State). of the representation of an unauthorized counsel may be raised at
any stage of the proceedings.
Case: MMDA vs. BAVA, G.R. No. 135962, 3/27/2000
RE: POWER TO ACQUIRE/CONVEY REAL OR PERSONAL PROPERTY –
FACTS: Petitioner issued an order to open to public traffic Neptune LGU may acquire real/personal, tangible or intangible in any manner
Street (and to demolition its perimeter fence) – a private road owned allowed by law, eg., sale or donation, etc.
by Respondent.
Case: VILLANUEVA vs. CASTANEDA 454 SCRA 142 – Public plaza is
RULING: Petition DENIED. While we hold that the general welfare beyond the commerce of man and cannot be the subject of a lease
should be promoted, we stress that it should not be achieved at the or other contractual undertaking, and even assuming the existence
expense of the rule of law. It is thus beyond doubt that the MMDA is of a valid lease of the public plaza or part thereof, the municipal
not a local government unit or a public corporation endowed with resolution effectively terminated the agreement, for it is settled that
legislative power. It is not even a "special metropolitan political the police power cannot be surrendered or bargained away through
subdivision" as contemplated in Section 11, Article X of the the medium of a contract.
Constitution. The powers of the MMDA are limited to formulation,
coordination, regulation, implementation, preparation, RE: POWER TO ENTER INTO CONTRACTS – requires: (i) LGU has
management, monitoring, setting of policies, installation of a system express/implied or inherent power to enter into the particular contract
and administration. It is the local government units, acting through (refer to LGC, special laws or charter); (ii) contract is entered into by
their respective legislative councils that possess legislative power and the proper department, board, committee, officer or agent (under
police power. In the case at bar, the Sangguniang Panlungsod of LGC, generally such authority is with the Local Chief Executive upon
Makati City did not pass any ordinance or resolution ordering the prior authorization by sanggunian); (iii) contract must comply with
opening of Neptune Street, hence, its proposed opening by Petitioner certain substantive requirements, eg., when expenditure of public
is illegal. funds is to be made, there must be actual appropriation and
certificate of availability of funds; (iv) contract must comply with
NOTE: Closure of Roads is not expropriation where the property owner formal requirements of written contracts, eg. Statutes of fraud.
is entitled to just compensation. Construction of new road was
undertaken under the General Welfare Clause (police power), that is, NOTE: A contract entered into without complying with (i) and (iii)
for enjoyment of convenience, every individual must be prepared to above is ULTRA VIRES, ergo, NULL AND VOID. Such contract cannot
give his share. be ratified or validated. Ratification of defective contracts is possible
only when there is non-compliance with (ii) and (iv) requirements.
Section 22, LGC – Corporate Powers – As a body corporate, has the
following powers; Case: CITY OF QUEZON vs. LEXBER, INC., G.R. 141616, 3/15/01 –
(a) To continuous succession in its corporate name;
(b) To sue and be sued; FACTS; Before the effectivity of the LGC in 1991, a tri-partite
(c) To have and use a corporate seal; agreement was signed by Lexber, Quezon City and the Municipality
(d) To acquire and convey real or personal property; of Antipolo whereby, with the conformity of Antipolo, Quezon City
(e) To enter into contracts; such other powers as are would lease and use the private land owned by Lexber as a dumpsite
granted corporation subject to limits provided in LGC situated in Antipolo in exchange for exclusive services and equipment
and other laws. for landfill to be provided Lexber. From 1991-1992, Quezon City used
the site for dumping but suddenly stopped without any explanation.
Corporate Powers, defined: Corporation’s capacity/right to do Lexber sent a demand letter claiming that it was still entitled to
certain acts or engage in certain activities such as sue/be sued enter compensation pursuant to the agreement but Mayor Mel Mathay of
into contracts, borrow money and do suc other things necessary to Quezon City refused citing that the contract was void having been
obtain its purposes. signed by then Mayor Simon without the approval or ratification by
City Council and that there was no budget appropriation. Collection
NOTE: Local Chief Executive enters into contracts in behalf of LGU, suit was filed by Lexber. RTC ruled in the latter’s favor and which
requires prior authorization by sangguniang concerned UNLESS decision was affirmed by the CA.
otherwise provided in the LGC.
RULING: Petition DENIED. In the case at bar, the contract requires
NOTE: Legible copy of contract to be posted in conspicuous place in P94M for a 5-year period. Quezon City invoked PD1445 (Auditing
provincial capitol/city/municipality/barangay hall (for Transparency). Code of the Philippines) that contracts involving expenditure of
public funds can only be entered into when there is an appropriation
NOTE: Full autonomy in exercise of corporate powers (not acting as thereof to be certified by proper accounting official/agent that funds
agent of the State), and limited only by LGC and other applicable have been appropriated for that purpose. Also, Quezon City cited the
laws. LGC empowering the sanggunian with authority to appropriate funds
for expenses of the city government. PD1445 does not provide that
RE: RIGHT TO SUE/BE SUED – Case: CITY COUNCIL OF CEBU vs. CUIZON the absence of appropriation law ipso facto makes a contract
47 SCRA 325 entered into by the LGU null and void. Under the LGC (1973), the
power of a mayor to enter contract is not subject to prior authorization
FACTS: For lack of prior authority from the Council, the latter filed with by the council.
CFI-Cebu, a complaint to nullify the contract between Mayor Cuizon
and Tropical Commercial Co., Inc. involving the purchase of road Case: MANANTAN vs. MUNICIPLAITY OF LUNA (LA UNION) 82 Phil 844 –
construction equipments for $520,912.00 cash from Tropical. Contract of lease granting fishing privileges is a valid and binding
Complaint was dismissed for lack of legal capacity as trial court contract and cannot be impaired by a subsequent resolution setting
reasoned that there is no provision of law authorizing city council to it aside and granting the privilege to another (unless the subsequent

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resolution is a police power measure because the exercise of the
latter prevails over the non-impairment clause. Supervision defined – means overseeing or power/authority of an
office to see that subordinate performs their duties. If the latter fails or
Section 23, LGC – Grants and Donations – sets forth the rules on grants neglects to perform their duties, the former may take such
and donations to LGUs from local and foreign assistance agencies) steps/action as prescribed by law to make them perform their duties.
which local chief executive may “upon authority of the sanggunian” Supervision does not mean control. Control includes the power to
negotiate and secure in order to “support the basic services or alter/modify/set aside acts of a subordinate officer.
facilities enumerated in Sec. 17.
Note: National agencies/offices with project implementation function
- No need of securing clearance/approval for grant/donation from shall coordinate with each other and with LGU concerned in the
any department, agency or office of the national government or from discharge of these functions to ensure participation of LGU both in the
any higher LGU. planning and implementation of said national projects.

- Projects financed by such grants/assistance with national security Note: National agencies may be directed by the President, upon
implications shall be approved by the national agency concerned. LGU’s request, to provide financial, technical or other forms of
Failure of such agency to act on request within 30 days from receipt assistance to LGU without extra cost to LGU.
thereof, it is deemed approved.
Note: National agencies (including GOCCs) with field
- Local Chief shall, within 30 days, upon signing of such grant, offices/branches in province/city/municipality to furnish local chief
agreement or deed of donation, report the nature, amount, terms of executive concerned, for his information and guidance, monthly
such assistance to both Houses of Congress and the President. reports including duly certified budgetary allocations and
expenditures.
Section 24, LGC – Municipal Liability – Rule: LGU and their officials are
not exempt from liability for death or injury to persons/damage to Case: RODOLFO GANZON vs. CA, G.R. No. 93252, 8/5/1991
property.
FACTS: Petitioner, Mayor of Iloilo City and a member of the
Damages – in legal contemplation refers to the sum of money which Sangguniang Panglungsod thereof, respectively, were charged
law awards or imposes as pecuniary compensation, recompense or administratively on various charges, among them, abuse of authority,
satisfaction for an injury done or a wrong sustained as a consequence oppression, grave misconduct, disgraceful and immoral conduct,
either of a breach of contractual obligation or a tortuous act. It intimidation, culpable violation of the Constitution, and arbitrary
includes all kinds of damages contemplated in the Civil Code; it is detention. Hearing on the charges ensued and the Respondent DILG,
awarded to one as a vindication of the wrongful invasion of his rights. upon finding of probable cause and reasons, issued successive
preventive suspension orders against Petitioner Mayor. Before the SC,
Case: CORREA vs. CFI of BULACAN 92 SCRA 312 – Municipal Petitioners’ primary argument is that the DILG Secretary (as President’s
corporation is responsible only for acts of its officers only when they alter ego) is devoid, in any event, of any authority to suspend and
have acted by authority of law and in conformity with requirements. remove local officials.
A public officer who commits a tort or wrongful act, done in excess or
beyond the scope of his duty, is not protected by his office and is RULING: Since local governments remain accountable to the national
personally liable therefor like any private individual. authority, the latter may, by law, and in the manner set forth therein,
impose disciplinary action against local officials. In the case at bar,
Case” PILAR vs. SANGGUNIANG BAYAN OF DANSOL, PANGASINAN the DILG Secretary, the President’s alter ego, in consonance with the
128 SCRA 173 – Municipal mayor is personally liable for damages specific provisions of BP337 (the existing Local Gov’t Code) can
(moral and exemplary) and attorney’s fees for having vetoed in bad suspend Petitioners.
faith, resolution appropriating funds for salary of the vice-mayor.
Supervision is not incompatible with disciplinary authority. As this Court
Case: MENDOZA vs DE LEON 33 PHIL 508 – Operation of ferry service is held in Ganzon vs. Cayanan, 104 Phil 484, “in administrative law,
a proprietary function. Municipality is negligent and therefore liable supervision means overseeing or the power or authority of an officer
for having awarded franchise to operate ferry service to another to see that subordinate officers perform their duties. If the latter fail or
notwithstanding previous grant of franchise to the plaintiff. neglect to fulfill them the former may take such action or step as
prescribed by law to make them perform their duties”.
Case: MUNICIPALITY OF JAASAN, MISAMIS ORIENTAL vs. GENTALLAN,
G.R. 154961, 5/9/2005 – There being no malice or bad faith in the While the respondent Secretary, as President’s alter ego, under the
illegal dismissal and refusal to reinstate respondent Gentallan by her existing Local Gov’t Code, has the power to suspend the petitioner,
superior officers, the latter cannot be held personally liable for her such power cannot be exercised oppressively. Ten administrative
back salaries. Municipal government, ergo, should disburse funds to cases have been successively filed against the city mayor. The latter
answer for her claims. has been made to serve a total of 120 days of suspension for the first
two cases and the respondent Secretary has issued another order
NOTE: Liability for contracts – Rule: LGU, like ordinary person is liable preventively suspending the former for antoehr 60 days, the third time
on a contract it enters, provided that contract is ultra vires. Otherwise, in twenty months. We are allowing the mayor to suffer the duration of
become personal liability of the officer who acted beyond his power. his third suspension. Insofar as the remaining charges are concerned,
we are urging the DILG, upon finality of this decision to undertake
See Articles 2189, 2180 and 34 of the Civil Code on provisions on steps to expedite the same, subject to the mayor’s usual remedies of
liability. appeal, judicial or administrative or certiorari, if warranted and
meanwhile, we are precluding the Secretary from meting out further
NOTE: As to tort liability: LGU is not liable if engaged in governmental suspensions based on those remaining complaints, notwithstanding
function but liable if engaged in proprietary function. findings of prima facie evidence.

INTERGOVERNMENTAL RELATIONS Section 26, LGC – National agency/GOCC (in

planning/implementation) of a project/program have DUTY TO
– as a body political and corporate (to serve its constituents) CONSULT LGU on objectives/goals, impact to the people in terms of
environmental/ecological balance and measures to
NATIONAL GOVERNMENT – LGU RELATIONS: prevent/minimize adverse effects.

Section 25, LGC – National supervision over LGU – despite the unitary NOTE: Project/Program intended may cause pollution, climactic
and centralized Phil. Governmental structure, 1987 Constitution limits change, depletion of non-renewable resources, loss of cropland,
the authority of the President over LGU only to GENERAL SUPERVISION. rangeland, forest cover or extinction of animal or plant species.

President’s General Supervision –
(i) directs over provinces, highly urbanized cities
and independent component cities, (through
provinces over) component cities and
municipalities; and (through cities and
municipalities over) barangays;
(ii) to ensure that acts of LGU are within the
scope of their prescribed powers and
functions;
(iii) Article X, Section 16 of 1987 Constitution –
President shall exercise general supervision
over authonmous regions to ensure that laws
are faithfully executed.
Section 27, LGC – (read alongside Sec. 2 © and Sec. 26) - Prior
consultation with LGU (plus prior approval by sanggunian) is
indispensable for implementation of program/project.
NOTE: If project results in eviction, appropriate relocation sites to be
provided.
See: REPUBLIC vs. CITY OF DAVAO, G.R. No. 148622, 9/12/2002; LINA
VS. PANO 364 SCRA 76
LGU – PNP RELATIONS:

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Section 28, LGC – LGU Power of Operational Supervision and Control and in general, all fire prevention and suppression measures to secure
over PNP – the safety of life and property of citizenry.
as as provided under RA 6975 (DILG Act of 1990) amended by RA
8551 (PNP Reorganization Act of 1991). These laws govern the extent Section 56 – At least 1 fire station with adequate firefighting facilities
of operational supervision and control of local chief executive over and equipment for provincial capitol, city and municipality; LGU to
police force, fire protection unit and jail management assigned in provide the necessary site for the fire station.
their respective jurisdiction.
Section 60 – Bureau of Jail Management and Penology – supervision
NOTE: Governors and mayors, upon having been elected and and control over all city and municipal jails. Provincial jails shall be
qualified as such, are automatically deputized as representatives of supervised and controlled by Provincial government within its
NAPOLCOM in their respective jurisdiction and as such, they can jurisdiction whose expenses shall be subsidized by National
inspect police forces and units, conduct audit and exercise such Government for not more than three years after effectivity of RA6975.
other functions as may be duly authorized.
3. INTER-LOCAL GOVERNMENT RELATIONS - -
NOTE: Operational Control and Supervision (OCS), defined – power to
direct, oversee, superintend, the day to day functions of police Section 29, LGC – Province has SUPERVISORY POWER – (or oversight
investigation of crimes and crime prevention activities and traffic power but does not include any restraining authority over supervised
control in accordance with rules and regulations issued by the party) of province over components but not over highly urbanized
NAPOLCOM. It includes the power to employ and deploy police and independent component cities; Province (through Governor) –
personnel and units. shall ensure that every component city/municipality within its territorial
jurisdiction acts within scope of its prescribed powers and functions.
NOTE: OCS for GOVERNOR: (a) choose the provincial police director
from a list of three eligibles recommended by the PNP Director; and Section 30, LGC – POWER TO REVIEW – Governor has power of review
(b) as chair of peace and order council, oversee implementation of of all executive orders promulgated by component
provincial public safety plan. (Sec. 64, RA8551) cities/municipalities within his jurisdiction. Exception: otherwise
provided under the Constitution and special statues. City/municipal
NOTE: OCS for CITY/MUNICIPAL MAYOR: includes – power to: (i) mayor shall review all executive orders promulgated by the punong
choose chief of police from list of 5 eligibles recommeneded by barangay within his jurisdiction.
provincial police director, preferably from same province, city or
municipality, no OIC to be for more than 30 days; local peace and NOTE: It is mandatory upon these named higher local chiefs to review
order council through Mayor may recommend recall/reassignment of executive orders of the lower local chiefs.
chief of police when in its perception, the latter has been ineffective
in combating crime or maintaining peace and order in the LGU, relief NOTE: Review – to ensure that executive orders are within the powers
shall be based on guidelines established by NAPOLCOM; (ii) granted by law and in conformity with the provincial/city/municipal
recommend to provincial police director, transfer, reassignment or ordinances, as the case may be, that is, to ensure that such orders do
detail of PNP members outside their respective city/town residences; not violate existing law/ordinance.
(iii) authority to recommend from list of eligibles previously screened
by local peace and order council appointment of new PNP members NOTE: Executive order submitted to reviewing authority within 3 days
to be assigned to the respective cities/municipalities without which from issuance; inaction within 30 days from submission, the same is
no such appointments shall be attested. Whenever practicable and deemed consistent with law and therefore valid.
consistent with requirements of service, PNP members shall be
assigned to the city/municipaliy of their residence; (iv) control and Section 31, LGC – MUNICIPAL QUESTIONS – questions affecting the
supervision of anti-gambling operation within its jurisdiction. municipality are to be submitted to the municipal legal officer, if
none, to the provincial legal officer, if none, to the provincial
NOTE: Exercise operational supervision and control over PNP units in prosecutor.
their respective jurisdiction, except, 30-day period immediately
preceding and 30 days after any national or local and barangay Section 32, LGC – POWER OF GENERAL SUPERVISION –
elections in which instances, police under authority of COMELEC. City/Municipality has power of general supervision over component
barangays to ensure said barangays act within the scope of their
Note: City/Municipal mayors, in coordination with local peace and prescribed powers and functions.
order council which he CHAIRS, shall develop an integrated
area/community public safety plan embrancing a priority of action Section 33, LGC – LGUs through appropriate ordinance, may group
and program thrusts for implementation by local PNP stations. themselves, consolidate or coordinate their efforts/services and
resources for the purpose commonly beneficial to them. For such
Case: ANDAYA vs. RTC 319 SCRA 696 – PNP RD Andaya submitted a undertaking, LGUs, upon approval of sangguniang concerned, after
list of 5 eligibles not including the name of P/Chief Insp. Andres public hearing conducted therefor, shall contribute funds, real estate,
Sarmiento, to Mayor of Cebu City. Mayor Garcia wants the name of equipment and other property, appoint/assign personnel under terms
Sarmiento on the list. Andaya claims Sarmiento not qualified. SC held agreed upon by participating LGU through a memorandum of
that, Mayor has no power to appoint, has only limited power of agreement.
selecting, one from among list of eligibles to be named chief of
police. Mayor cannot require Regional Director to include the name LGU – PEOPLES’S AND NON-GOV’TAL ORGANIZATIONS RELATIONS
of any officer, no matter how qualified, in the list. – People’s organizations are bonafide associations of
citizens with demonstrated capacity to promote public interest and
with identifiable leadership, membership and structure (Art. XIII,
NOTE: Unless reversed by President, deputization may be Section 15 of 1987 Constitution).
withdrawn/revoked by Commission after consultation with Provincial
Governor and congressman concerned. Deputization, upon good Section 16, Art. XIII of the Constitution – “The right of the people and
cause shown, may be restored by President directly or through the their organizations to effective and reasonable levels of social,
Commission. Withdrawal/Revocation may be on grounds of frequent political and economic decision-making shall not be abridged. The
unauthorized absence; abuse of authority; providing material support State, by law, shall facilitate the establishment of adequate
to criminal elements; engaging in acts inimical to national security or consultation mechanisms”.
which negate effectiveness of peace and order campaign.
NOTE: Sections 34, 35 and 36 of LGC implement Section 16, Art. XIII of
NOTE: LGU DISCIPLINARY POWERS OVER PNP MEMBERS – the 1987 Constitution.
City/Municipal mayors, after due notice and summary hearing, shall
impose DISCIPLINARY PENALTIES for minor offenses committed by PNP Section 34, LGC – LGU to promote establishments and operation of
membes assigned to their respective jurisdiction as provided in PO and NGO to become active partners in pursuit of local autonomy.
Section 41 of RA6975 (not involving moral turpitude, includes, but not
limited to, simple misconduct, insubordination, frequent absences, Section 35, LGC – LGU may enter joint ventures and such other
tardiness, habitual drunkenness, gambling as prohibited by law). cooperative arrangements with PO and NGO to engage in delivery
of certain basic services, capability and livelihood projects.
RELATED ITEMS INVOLVING LGU CONTAINED IN RA 6975 (DILG Act of
1990): Section 36, LGC – LGU may through local chief executive with the
concurrence of sanggunian, provide assistance, financial or
Section 55 – Bureau of Fire Protection – tasked with prevention and otherwise to such PO and NGO is for economic, socially-oriented,
suppression of destructive fires, investigate all causes of fire, file environmental or cultural projects to be implemented within its
complaint with fiscal; composed of provincial/district offices and territorial jurisdiction.
city/municipal stations; LGU at city and municipal levels shall be
responsible for fire protection and various emergency services such
as rescue and evaluation of injured people at fire-related incidents

14