Pubcorp Midterms Digest

1.General Principles A. Corporation

strictly as a private corporation since it is regulated by international humanitarian law and is treated as an auxiliary of the State.[24]

1. Definition - an artificial being created by operation of law having the right of succession and powers, attributes and properties (SPAP) expressly authorized by law or incident to its existence. 2. Classification a. Public – created by the state either by general or special act for purposes of administration of local government or rendering service in the public interest. (AR) b. Private – established for private aim or benefit c. Quasi-Public

Although it is neither a subdivision, agency, or instrumentality of the government, nor a government-owned or -controlled corporation or a subsidiary thereof, as succinctly explained in the Decision of July 15, 2009, so much so that respondent, under the Decision, was correctly allowed to hold his position as Chairman thereof concurrently while he served as a Senator, such a conclusion does not ipso facto imply that the PNRC is a private corporation within the contemplation of the provision of the Constitution, that must be organized under the Corporation Code.

3. Criterion to determine public corporations RELATIONSHIP OF The GOVERNMENT TO THE STATE if created as its own agency to help the state in carrying out its governmental functions

In sum, the PNRC enjoys a special status as an important ally and auxiliary of the government in the humanitarian field in accordance with its commitments under international law.

4. Classes of Public Corporations a. Quasi- Public – Private corporation that renders public service or supplies public wants - created as agencies of the state for narrow and limited purposes without the powers and liabilities of selfgoverning corporations

2.

Held: Not a public corporation but a Quasi-public corporation. Applicable law; Philippine Bill of 1902. There being neither a general law on the formation ad organization of private corporations nor restriction o the legislature to create private corporations by direct legislation, the Philippine Commission was within its powers in 1905 to constitute petitioner as a private entity.

b. Municipal Corporation - body politic and corporate (kaya siya dual nature, oks???) constituted by the incorporation of inhabitants for purpose of local government. - established by law partly as an agency to assist in the civil government of the country but chiefly to regulate and administer the local and internal affairs if the city, town or district which is incorporated. - exercise powers as a political subdivision of the National Government and as a corporate entity representing its inhabitants Cases: 1. Liban v. Gordon | Quasi-public corporation Facts: Gordon filed a motion for clarification and consideration that respondent did not forfeit his seat in the Senate when he accepted the chairmanship of the PNRC Board of Governors, as the office of the PNRC Chairman is not a government office or an office in a government-owned or controlled corporation for purposes of the prohibition in Section 13, Article VI of the 1987 Constitution. [5] The Decision, however, further declared void the PNRC Charter insofar as it creates the PNRC as a private corporation and consequently ruled that the PNRC should incorporate under the Corporation Code and register with the Securities and Exchange Commission if it wants to be a private corporation Issue: WON PNRC is a private corporation Held: No. The PNRC, as a National Society of the International Red Cross and Red Crescent Movement, can neither be classified as an instrumentality of the State, so as not to lose its character of neutrality as well as its independence, nor

Philippine Society for the Prevention of Cruelty to Animals v COA | True criterion whether corporation is public or private

The fact that a certain judicial entity is impressed with public interest does not make an entity a public corporation, inasmuch as a corporation may be prvate although its charter contains provisions of a public character, incorporated solely for public good. private corporation that renders public service or supplies public wants. TRUE CRITERION WHETHER PUBLIC OR PRIVATE: totality of the relation of the corporation ti the state. If the corporation is created by the state as the latters own instrumentality or agency to help it carry out its governmental functions, PUBLIC. Otherwise, PRIVATE.

3.

The Province of North Cotabato vs GRP Held: The BJE runs counter the national sovereignty and territorial integrity of the republic and is contrary to the constitution. ART. X Sec 18: The creation of autonomous region shall be effective when approved by a majority of the votes cast by constituents in the plebiscite; Provinces in

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favor Article XI Sec 22: Indigenous cultural communities within the framework of the national unity and development: IT DOES NOT UPHOLD NATIONAL UNITY II. Principles of Local Autonomy 1. Principle of Local Authority (Sec 25 Art II and Sec 2, Art X 1987 Constitution) Cases: 1. BASCO V PAGCOR Facts: The Philippine Amusements and Gaming Corporation (PAGCOR) was created by virtue of P.D. 1067-A dated January 1, 1977 and was granted a franchise under P.D. 1067-B also dated January 1, 1977 "to establish, operate and maintain gambling casinos on land or water within the territorial jurisdiction of the Philippines." Its operation was originally conducted in the well known floating casino "Philippine Tourist." The operation was considered a success for it proved to be a potential source of revenue to fund infrastructure and socio-economic projects, thus, P.D. 1399 was passed on June 2, 1978 for PAGCOR to fully attain this objective. Subsequently, on July 11, 1983, PAGCOR was created under P.D. 1869 to enable the Government to regulate and centralize all games of chance authorized by existing franchise or permitted by law, Petitioners contend that P.D. 1869 constitutes a waiver of the right of the City of Manila to impose taxes and legal fees; that the exemption clause in P.D. 1869 is violative of the principle of local autonomy. Issue: WON Local Autonomy Clause of the Constitution will be violated by P.D. 1869 Held: No. 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. Besides, the principle of local autonomy under the 1987 Constitution simply means "decentralization" (III Records of the 1987 Constitutional Commission, pp. 435-436, as cited in Bernas, The Constitution of the Republic of the Philippines, Vol. II, First Ed., 1988, p. 374). It does not make local governments sovereign within the state or an "imperium in imperio." Local Government has been described as a political subdivision of a nation or state which is constituted by law and has substantial control of local affairs. In a unitary system of government, such as the government under the Philippine Constitution, local governments can only be an intra sovereign subdivision of one sovereign nation, it cannot be an imperium in imperio. Local government in such a system can only mean a measure of decentralization of the function of government. (emphasis supplied) As to what state powers should be "decentralized" and what may be delegated to local government units remains a matter of policy, which concerns wisdom. It is therefore a

political question. (Citizens Alliance for Consumer Protection v. Energy Regulatory Board, 162 SCRA 539). What is settled is that the matter of regulating, taxing or otherwise dealing with gambling is a State concern and hence, it is the sole prerogative of the State to retain it or delegate it to local governments.

2. LINA V PANO Facts: Respondent Tony Calvento was appointed agent by the Philippine Charity Sweepstakes Office (PCSO) to install Terminal OM 20 for the operation of lotto. He asked Mayor Calixto Cataquiz, Mayor of San Pedro, Laguna, for a mayor’s permit to open the lotto outlet. This was denied by Mayor Cataquiz in a letter dated February 19, 1996. The ground for said denial was an ordinance passed by the Sangguniang Panlalawigan of Laguna entitled Kapasiyahan Blg. 508, T. 1995 which prohibits gambling esp Lotto in the Province of Laguna. Hence, respondent filed a TRO, ordering the defendants to refrain from implementing or enforcing Kapasiyahan Blg. 508, T. 1995; (2) an order requiring Hon. Municipal Mayor Calixto R. Cataquiz to issue a business permit for the operation of a lotto outlet; and (3) an order annulling or declaring as invalid Kapasiyahan Blg. 508, T. 1995. Issue: whether Kapasiyahan Blg. 508, T. 1995 of the Sangguniang Panlalawigan of Laguna and the denial of a mayors permit based thereon are valid Held: Yes. The game of lotto is a game of chance duly authorized by the national government through an Act of Congress. Republic Act 1169, as amended byBatas Pambansa Blg. 42, is the law which grants a franchise to the PCSO and allows it to operate the lotteries. This statute remains valid today. While lotto is clearly a game of chance, the national government deems it wise and proper to permit it. Hence, theSangguniang Panlalawigan of Laguna, a local government unit, cannot issue a resolution or an ordinance that would seek to prohibit permits. Stated otherwise, what the national legislature expressly allows by law, such as lotto, a provincial board may not disallow by ordinance or resolution. The basic relationship between the national legislature and the local government units has not been enfeebled by the new provisions in the Constitution strengthening the policy of local autonomy. Without meaning to detract from that policy, we here confirm that Congress retains control of the local government units although in significantly reduced degree now than under our previous Constitutions. The power to create still includes the power to destroy. The power to grant still includes the power to withhold or recall. True, there are certain notable innovations in the Constitution, like the direct conferment on the local government units of the power to tax (citing Art. X, Sec. 5, Constitution), which cannot now be withdrawn by mere statute. By and large, however, the national legislature is still the principal of the local government units, which cannot defy its will or modify or violate it. 3. LIMBONA V MANGELIN Facts: Limbona was appointed as a member of the Sangguniang Pampook, Regional Autonomous Government, Region XII, representing Lanao del Sur. He was elected Speaker of the Regional Legislative Assembly or Batasang

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Pampook of Central Mindanao (Assembly for brevity). On October 21, 1987 Congressman Datu Guimid Matalam, Chairman of the Committee on Muslim Affairs of the House of Representatives, invited Mr. Xavier Razul, Pampook Speaker of Region XI, Zamboanga City and the petitioner in his capacity as Speaker of the Assembly, Region XII, but the invitation was rejected for the reason that "our presence in the house committee hearing of Congress take (sic) precedence over any pending business in batasang pampook ... this Court, on January 19, 1988, received a resolution filed by the Sangguniang Pampook, "EXPECTING ALIMBUSAR P. LIMBONA FROM MEMBERSHIP OF THE SANGGUNIANG PAMPOOK AUTONOMOUS REGION XII," 3 on the grounds, among other things, that the petitioner "had caused to be prepared and signed by him paying [sic] the salaries and emoluments of Odin Abdula, who was considered resigned after filing his Certificate of Candidacy for Congressmen for the First District of Maguindanao in the last May 11, elections. . . and nothing in the record of the Assembly will show that any request for reinstatement by Abdula was ever made . . ." 4 and that "such action of Mr. Lim bona in paying Abdula his salaries and emoluments without authority from the Assembly . . . constituted a usurpation of the power of the Assembly," 5 that the petitioner "had recently caused withdrawal of so much amount of cash from the Assembly resulting to the non-payment of the salaries and emoluments of some Assembly [sic]," 6 and that he had "filed a case before the Supreme Court against some members of the Assembly on question which should have been resolved within the confines of the Assembly," 7 for which the respondents now submit that the petition had become "moot and academic". 8 Issue: WON the autonomous governments of Mindanao, is subject to the jurisdiction of the national courts Held: Yes. The autonomous governments of Mindanao were organized in Regions IX and XII by Presidential Decree No. 1618 15 promulgated on July 25, 1979. Among other things, the Decree established "internal autonomy" 16 in the two regions "[w]ithin the framework of the national sovereignty and territorial integrity of the Republic of the Philippines and its Constitution," 17 with legislative and executive machinery to exercise the powers and responsibilities 18 specified therein. It requires the autonomous regional governments to "undertake all internal administrative matters for the respective regions," 19 except to "act on matters which are within the jurisdiction and competence of the National Government. In relation to the central government, it provides that "[t]he President shall have the power of general supervision and control over the Autonomous Regions ..." 22 Under the 1987 Constitution, local government units enjoy autonomy in these two senses, thus: Section 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities, municipalities, and barangays. Here shall be autonomous regions in Muslim Mindanao ,and the Cordilleras as hereinafter provided. 29 Sec. 2. The territorial and political subdivisions shall enjoy local autonomy. 30

the national sovereignty as well as territorial integrity of the Republic of the Philippines. 31 An autonomous government that enjoys autonomy of the latter category [CONST. (1987), art. X, sec. 15.] is subject alone to the decree of the organic act creating it and accepted principles on the effects and limits of "autonomy." On the other hand, an autonomous government of the former class is, as we noted, under the supervision of the national government acting through the President (and the Department of Local Government).32 If the Sangguniang Pampook (of Region XII), then, is autonomous in the latter sense, its acts are, debatably beyond the domain of this Court in perhaps the same way that the internal acts, say, of the Congress of the Philippines are beyond our jurisdiction. But if it is autonomous in the former category only, it comes unarguably under our jurisdiction. An examination of the very Presidential Decree creating the autonomous governments of Mindanao persuades us that they were never meant to exercise autonomy in the second sense, that is, in which the central government commits an act of self-immolation. Presidential Decree No. 1618, in the first place, mandates that "[t]he President shall have the power of general supervision and control over Autonomous Regions." 33 In the second place, the Sangguniang Pampook, their legislative arm, is made to discharge chiefly administrative services. Hence, we assume jurisdiction. And if we can make an inquiry in the validity of the expulsion in question, with more reason can we review the petitioner's removal as Speaker. *** autonomy is either decentralization of administration or decentralization of power. There is decentralization of administration when the central government delegates administrative powers to political subdivisions in order to broaden the base of government power and in the process to make local governments "more responsive and accountable," 23 "and ensure their fullest development as self-reliant communities and make them more effective partners in the pursuit of national development and social progress." 24 At the same time, it relieves the central government of the burden of managing local affairs and enables it to concentrate on national concerns. The President exercises "general supervision" 25 over them, but only to "ensure that local affairs are administered according to law." 26 He has no control over their acts in the sense that he can substitute their judgments with his own. 27 Decentralization of power, on the other hand, involves an abdication of political power in the favor of local governments units declare to be autonomous . In that case, the autonomous government is free to chart its own destiny and shape its future with minimum intervention from central authorities. According to a constitutional author, decentralization of power amounts to "self-immolation," since in that event, the autonomous government becomes accountable not to the central authorities but to its constituency.

xxx xxx xxx See. 15. Mere shall be created autonomous regions in Muslim Mindanao and in the Cordilleras consisting of provinces, cities, municipalities, and geographical areas sharing common and distinctive historical and cultural heritage, economic and social structures, and other relevant characteristics within the framework of this Constitution and

4. DISOMANGCOP V DATUMANONG Facts: On 20 May 1999, (DPWH) Secretary Gregorio R. Vigilar issued D.O. 119 Subject: Creation of Marawi Sub-District Engineering Office Pursuant to Sections 6 and 25 of Executive Order No. 124 dated 30 January 1987, there is hereby created a

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DPWH Marawi Sub-District Engineering Office which shall have jurisdiction over all national infrastructure projects and facilities under the DPWH within Marawi City and the province of Lanao del Sur. SEC. 3. The amount necessary to carry out the provisions of this Act shall be included in the General Appropriations Act of the year following its enactment into law. Thereafter, such sums as may be necessary for the maintenance and continued operation of the engineering district office shall be included in the annual General Appropriations Act. Almost two (2) years later, on 17 January 2001, then President Joseph E. Estrada approved and signed into law R.A. 8999. SEC. 3. The amount necessary to carry out the provisions of this Act shall be included in the General Appropriations Act of the year following its enactment into law. Thereafter, such sums as may be necessary for the maintenance and continued operation of the engineering district office shall be included in the annual General Appropriations Act. petitioners Arsadi M. Disomangcop (Disomangcop) and Ramir M. Dimalotang (Dimalotang) addressed a petition to then DPWH Secretary Simeon A. Datumanong, seeking the revocation of D.O. 119 and the non-implementation of R.A. 8999. No action, however, was taken on the petition Consequently, they filed an instant petition, in their capacity as Officer-in-Charge and District Engineer/Engineer II, respectively, of the First Engineering District of the Department of Public Works and Highways, Autonomous Region in Muslim Mindanao (DPWH-ARMM) in Lanao del Sur. They allege that D.O. 119 was issued with grave abuse of discretion and that it violates the constitutional autonomy of the ARMM. They point out that the challenged Department Order has tasked the Marawi Sub-District Engineering Office with functions that have already been devolved to the DPWH-ARMM First Engineering District in Lanao del Sur. Issue: WON R.A. 8999 and D.O. 119 were issued with grave abuse of discretion. Held: Yes. Although R.A. 9054 was enacted later, it reaffirmed the imperativeness of the plebiscite requirement. [37] In fact, R.A. 9054 itself, being the second or later ARMM Organic Act, was subjected to and ratified in a plebiscite. The first ARMM Organic Act, R.A. 6074, as implemented by E.O. 426, devolved the functions of the DPWH in the ARMM which includes Lanao del Sur (minus Marawi City at the time) [38] to the Regional Government. By creating an office with previously devolved functions, R.A. 8999, in essence, sought to amend R.A. 6074. The amendatory law should therefore first obtain the approval of the people of the ARMM before it could validly take effect. Absent compliance with this requirement, R.A. 8999 has not even become operative. Clearly, R.A. 8999 is antagonistic to and cannot be reconciled with both ARMM Organic Acts, R.A. 6734 and R.A. 9054. The kernel of the antagonism and disharmony lies in the regional autonomy which the ARMM Organic Acts ordain pursuant to the Constitution. On the other hand, R.A. 8999 contravenes true decentralization which is the essence of regional autonomy. ** Regional autonomy refers to the granting of basic internal government powers to the people of a particular area or region with least control and supervision from the central government.[57]

The objective of the autonomy system is to permit determined groups, with a common tradition and shared social-cultural characteristics, to develop freely their ways of life and heritage, exercise their rights, and be in charge of their own business. This is achieved through the establishment of a special governance regime for certain member communities who choose their own authorities from within the community and exercise the jurisdictional authority legally accorded to them to decide internal community affairs.[58] In the Philippine setting, regional autonomy implies the cultivation of more positive means for national integration. It would remove the wariness among the Muslims, increase their trust in the government and pave the way for the unhampered implementation of the development programs in the region A necessary decentralization.[63]

prerequisite

of

autonomy

is

Decentralization is a decision by the central government authorizing its subordinates, whether geographically or functionally defined, to exercise authority in certain areas. It involves decision-making by subnational units. It is typically a delegated power, wherein a larger government chooses to delegate certain authority to more local governments. Federalism implies some measure of decentralization, but unitary systems may also decentralize. Decentralization differs intrinsically from federalism in that the sub-units that have been authorized to act (by delegation) do not possess any claim of right against the central government.[64] Decentralization comes in two formsdeconcentration and devolution. Deconcentration is administrative in nature; it involves the transfer of functions or the delegation of authority and responsibility from the national office to the regional and local offices. This mode of decentralization is also referred to as administrative decentralization.[65] Devolution, on the other hand, connotes political decentralization, or the transfer of powers, responsibilities, and resources for the performance of certain functions from the central government to local government units. [66] This is a more liberal form of decentralization since there is an actual transfer of powers and responsibilities. [67] It aims to grant greater autonomy to local government units in cognizance of their right to self-government, to make them self-reliant, and to improve their administrative and technical capabilities The challenged law creates an office with functions and powers which, by virtue of E.O. 426, have been previously devolved to the DPWH-ARMM, First Engineering District in Lanao del Sur.

5. BATANGAS CATV, INC. VS CA Facts: Sangguniang Panlungsod of Batangas enacted a Resolution No. 210[7] granting petitioner a permit to construct, install, and operate a CATV system in Batangas City. Section 8 of the Resolution provides that petitioner is authorized to charge its subscribers the maximum rates specified therein, provided, however, that any increase of rates shall be subject to the approval of the Sangguniang Panlungsod.[8]

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Then on November 1993, petitioner increased its subscriber rates from P88.00 to P180.00 per month. As a result, respondent Mayor wrote petitioner a letter[9] threatening to cancel its permit unless it secures the approval of respondent Sangguniang Panlungsod, pursuant to Resolution No. 210. Hence, he then filed a petition alleging that respondent has no authority to regulate the subscriber rates charged by CATV operators because under Executive Order No. 205, the National Telecommunications Commission (NTC) has the sole authority to regulate the CATV operation in the Philippines. Issue: WON THE GENERAL WELFARE CLAUSE OF THE LOCAL GOVERNMENT CODE AUTHORIZES RESPONDENT SANGGUNIANG PANLUNGSOD TO EXERCISE THE REGULATORY FUNCTION SOLELY LODGED WITH THE NATIONAL TELECOMMUNICATIONS COMMISSION UNDER EXECUTIVE ORDER NO. 205, INCLUDING THE AUTHORITY TO FIX AND/OR APPROVE THE SERVICE RATES OF CATV OPERATORS Held: No. Pres Aquino issued E.O. No. 205[22] opening the CATV industry to all citizens of the Philippines. It mandated the NTC to grant Certificates of Authority to CATV operators and to issue the necessary implementing rules and regulations. On September 9, 1997, President Fidel V. Ramos issued E.O. No. 436[23] prescribing policy guidelines to govern CATV operation in the Philippines. Cast in more definitive terms, it restated the NTCs regulatory powers over CATV operations, The logical conclusion, therefore, is that in light of the above laws and E.O. No. 436, the NTC exercises regulatory power over CATV operators to the exclusion of other bodies. The general welfare clause is the delegation in statutory form of the police power of the State to LGUs.[28] Through this, LGUs may prescribe regulations to protect the lives, health, and property of their constituents and maintain peace and order within their respective territorial jurisdictions. Accordingly, we have upheld enactments providing, for instance, the regulation of gambling,[29] the occupation of rig drivers, [30] the installation and operation of pinball machines, [31] the maintenance and operation of cockpits,[32] the exhumation and transfer of corpses from public burial grounds, [33] and the operation of hotels, motels, and lodging houses[34] as valid exercises by local legislatures of the police power under the general welfare clause. Like any other enterprise, CATV operation maybe regulated by LGUs under the general welfare clause. This is primarily because the CATV system commits the indiscretion of crossing public properties. (It uses public properties in order to reach subscribers.) The physical realities of constructing CATV system the use of public streets, rights of ways, the founding of structures, and the parceling of large regions allow an LGU a certain degree of regulation over CATV operators.[35] This is the same regulation that it exercises over all private enterprises within its territory.

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 States 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. [36] Where there is no express power in the charter of a municipality authorizing it to adopt ordinances regulating certain matters which are specifically covered by a general statute, a municipal ordinance, insofar as it attempts to regulate the subject which is completely covered by a general statute of the legislature, may be rendered invalid. x x x Where the subject is of statewide concern, and the legislature has appropriated the field and declared the rule, its declaration is binding throughout the State. 2.

Powers of the President over the LGUs Sec 4. Art. X, 1987 Constitution

Cases: 1. JUDGE DADOLE VS COA Facts: In 1986, the RTC and MTC judges of Mandaue City started receiving monthly allowances of P1,260 each through the yearly appropriation ordinance enacted by the Sangguniang Panlungsod of the said city. In 1991, Mandaue City increased the amount to P1,500 for each judge. March 15, 1994, the Department of Budget and Management (DBM) issued the disputed Local Budget Circular No. 55 (LBC 55) which delimits the additional allowances and benefitsm(1000 for Provinces and 700 for cities) that may be given to national govt officials and employees. Acting on the DBM directive, the Mandaue City Auditor issued notices of disallowance to herein petitioners, namely, Honorable RTC Judges Mercedes G. Dadole, Ulric R. Caete, Agustin R. Vestil, Honorable MTC Judges Temistocles M. Boholst, Vicente C. Fanilag and Wilfredo A. Dagatan, in excess of the amount authorized by LBC 55. Then, the additional monthly allowances of the petitioner judges were reduced to P1,000 each. They were also asked to reimburse the amount they received in excess of P1,000. Petitioner judges argue that LBC 55 is void for infringing on the local autonomy of Mandaue City by dictating a uniform amount that a local government unit can disburse as additional allowances to judges stationed therein. They maintain that said circular is not supported by any law and therefore goes beyond the supervisory powers of the President. They further allege that said circular is void for lack of publication.

Issue: (1) whether LBC 55 of the DBM is void for going beyond the supervisory powers of the President and for not having been published

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Held: Yes. This provision (Section 4 of Article X of the 1987 Philippine Constitution) has been interpreted to exclude the power of control. The Chief Executive wielded no more authority than that of checking whether local governments or their officials were performing their duties as provided by the fundamental law and by statutes. He cannot interfere with local governments, so long as they act within the scope of their authority. "Supervisory power, when contrasted with control, is the power of mere oversight over an inferior body; it does not include any restraining authority over such body. Under our present system of government, executive power is vested in the President. The members of the Cabinet and other executive officials are merely alter egos. As such, they are subject to the power of control of the President, at whose will and behest they can be removed from office; or their actions and decisions changed, suspended or reversed. In contrast, the heads of political subdivisions are elected by the people. Their sovereign powers emanate from the electorate, to whom they are directly accountable. By constitutional fiat, they are subject to the Presidents supervision only, not control, so long as their acts are exercised within the sphere of their legitimate powers. By the same token, the President may not withhold or alter any authority or power given them by the Constitution and the law. Clearly then, the President can only interfere in the affairs and activities of a local government unit if he or she finds that the latter has acted contrary to law. This is the scope of the Presidents supervisory powers over local government units. Hence, the President or any of his or her alter egos cannot interfere in local affairs as long as the concerned local government unit acts within the parameters of the law and the Constitution. Any directive therefore by the President or any of his or her alter egos seeking to alter the wisdom of a law-conforming judgment on local affairs of a local government unit is a patent nullity because it violates the principle of local autonomy and separation of powers of the executive and legislative departments in governing municipal corporations.

2.

PIMENTEL V AGUIRRE (IN REL TO SEC 284-294 LGC) Facts: December 27, 1997, the President of the Philippines issued AO 372. Petitioners assailed Sec. 1 and 4 of the Administrative Order issued by Ramos. SECTION 1. All government departments and agencies, including state universities and colleges, government-owned and controlled corporations and local governments units will identify and implement measures in FY 1998 that will reduce total expenditures for the year by at least 25% of authorized regular appropriations for non-personal services items, SECTION 4. Pending the assessment and evaluation by the Development Budget Coordinating Committee of the emerging fiscal situation, the amount equivalent to 10% of the internal revenue allotment to local government units shall be withheld.

Petitioner contends that the President, in issuing AO 372, was in effect exercising the power of control over LGUs. The Constitution vests in the President, however, only the power of general supervision over LGUs, consistent with the principle of local autonomy. Petitioner further argues that the directive to withhold ten percent (10%) of their IRA is in contravention of Section 286 of the Local Government Code and of Section 6, Article X of the Constitution, providing for the automatic release to each of these units its share in the national internal revenue. The solicitor general, on behalf of the respondents, claims on the other hand that AO 372 was issued to alleviate the "economic difficulties brought about by the peso devaluation" and constituted merely an exercise of the President's power of supervision over LGUs. It allegedly does not violate local fiscal autonomy, because it merely directs local governments to identify measures that will reduce their total expenditures for non-personal services by at least 25 percent. Likewise, the withholding of 10 percent of the LGUs IRA does not violate the statutory prohibition on the imposition of any lien or holdback on their revenue shares, because such withholding is "temporary in nature pending the assessment and evaluation by the Development Coordination Committee of the emerging fiscal situation."

Issue: whether (a) Section 1 of AO 372, insofar as it "directs" LGUs to reduce their expenditures by 25 percent; and (b) Section 4 of the same issuance, which withholds 10 percent of their internal revenue allotments, are valid exercises of the President's power of general supervision over local governments. Held: No. There are therefore several requisites before the President may interfere in local fiscal matters: (1) an unmanaged public sector deficit of the national government; (2) consultations with the presiding officers of the Senate and the House of Representatives and the presidents of the various local leagues;and (3) the corresponding recommendation of the secretaries of the Department of Finance, Interior and Local Government, and Budget and Management. Furthermore, any adjustment in the allotment shall in no case be less than thirty percent (30%) of the collection of national internal revenue taxes of the third fiscal year preceding the current one. The provision (Sec. 1) is merely an advisory to prevail upon local executives to recognize the need for fiscal restraint in a period of economic difficulty. Indeed, all concerned would do well to heed the President's call to unity, solidarity and teamwork to help alleviate the crisis. It is understood, however, that no legal sanction may be imposed upon LGUs and their officials who do not follow such advice. It is in this light that we sustain the solicitor general's contention in regard to Section 1. Section 4 of AO 372 cannot, however, be upheld. A basic feature of local fiscal autonomy is the automatic release of the shares of LGUs in the national internal revenue. This is mandated by no less than the Constitution.[28] The Local Government Code[29] specifies further that the release shall be made directly to the LGU concerned within five (5) days after every quarter of the

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year and "shall not be subject to any lien or holdback that may be imposed by the national government for whatever purpose."[30]As a rule, the term "shall" is a word of command that must be given a compulsory meaning. [31] The provision is, therefore, imperative. Section 4 of AO 372, however, orders the withholding, effective January 1, 1998, of 10 percent of the LGUs' IRA "pending the assessment and evaluation by the Development Budget Coordinating Committee of the emerging fiscal situation" in the country. Such withholding clearly contravenes the Constitution and the law. Although temporary, it is equivalent to a holdback, which means "something held back or withheld, often temporarily."[32] Hence, the "temporary" nature of the retention by the national government does not matter. Any retention is prohibited. In sum, while Section 1 of AO 372 may be upheld as an advisory effected in times of national crisis, Section 4 thereof has no color of validity at all. The latter provision effectively encroaches on the fiscal autonomy of local governments. Concededly, the President was wellintentioned in issuing his Order to withhold the LGUs IRA, but the rule of law requires that even the best intentions must be carried out within the parameters of the Constitution and the law. Verily, laudable purposes must be carried out by legal methods.

3. PROVINCE OF BATANGAS V ROMULO ** Facts: In 1998, then President Estrada issued EO No. 48 establishing the “Program for Devolution Adjustment and Equalization” to enhance the capabilities of LGUs in the discharge of the functions and services devolved to them through the LGC. The Oversight Committee under Executive Secretary Ronaldo Zamora passed Resolutions No. OCD-99-005, OCD99-006 and OCD-99-003 which were approved by Pres. Estrada on October 6, 1999. The guidelines formulated by the Oversight Committee required the LGUs to identify the projects eligible for funding under the portion of LGSEF and submit the project proposals and other requirements to the DILG for appraisal before the Committee serves notice to the DBM for the subsequent release of the corresponding funds. Hon. Herminaldo Mandanas, Governor of Batangas, petitioned to declare unconstitutional and void certain provisos contained in the General Appropriations Acts (GAAs) of 1999, 2000, and 2001, insofar as they uniformly earmarked for each corresponding year the amount of P5billion for the Internal Revenue Allotment (IRA) for the Local Government Service Equalization Fund (LGSEF) & imposed conditions for the release thereof. ISSUE: Whether the assailed provisos in the GAAs of 1999, 2000, and 2001, and the OCD resolutions infringe the Constitution and the LGC of 1991. HELD: Yes. The assailed provisos in the GAAs of 1999, 2000, and 2001, and the OCD resolutions constitute a “withholding” of a portion of the IRA – they effectively encroach on the fiscal autonomy enjoyed by LGUs and must be struck down. According to Art. II, Sec.25 of the Constitution, “the State shall ensure the local autonomy of local governments“. Consistent with the principle of local autonomy, theConstitution confines the President’s power over the LGUs to one of general supervision, which has been interpreted to exclude the power of control. Drilon v. Limdistinguishes supervision from control: control lays down the rules in the doing of an act – the officer has

the discretion to order his subordinate to do or redo the act, or decide to do it himself; supervision merely sees to it that the rules are followed but has no authority to set down the rules or the discretion to modify/replace them. The entire process involving the distribution & release of the LGSEF is constitutionally impermissible. The LGSEF is part of the IRA or “just share” of the LGUs in the national taxes. Sec.6, Art.X of the Constitution mandates that the “just share” shall beautomatically released to the LGUs. Since the release is automatic, the LGUs aren’t required to perform any act to receive the “just share” – it shall be released to them “without need of further action“. To subject its distribution & release to the vagaries of the implementing rules & regulations as sanctioned by the assailed provisos in the GAAs of 1999-2001 and the OCD Resolutions would violate this constitutional mandate. The only possible exception to the mandatory automatic release of the LGUs IRA is if the national internal revenue collections for the current fiscal year is less than 40% of the collections of the 3rd preceding fiscal year. The exception does not apply in this case. The Oversight Committee’s authority is limited to the implementation of the LGC of 1991 not to supplant or subvert the same, and neither can it exercise control over the IRA of the LGUs. Congress may amend any of the provisions of the LGC but only through a separate lawand not through appropriations laws or GAAs. Congress cannot include in a general appropriations bill matters that should be more properly enacted in a separate legislation. A general appropriations bill is a special type of legislation, whose content is limited to specified sums of money dedicated to a specific purpose or a separate fiscal unit – any provision therein which is intended to amend another law is considered an “inappropriate provision“. Increasing/decreasing the IRA of LGUs fixed in the LGC of 1991 are matters of general & substantive law. To permit the Congress to undertake these amendments through the GAAs would unduly infringe the fiscal autonomy of the LGUs. The value of LGUs as institutions of democracy is measured by the degree of autonomy they enjoy. Our national officials should not only comply with the constitutional provisions in local autonomy but should also appreciate the spirit and liberty upon which these provisions are based.

4. ACORD VS ZAMORA ** Facts: Pres. Estrada, pursuant to Sec 22, Art VII mandating the Pres to submit to Congress a budget of expenditures within 30 days before the opening of every regular session, submitted the National Expenditures program for FY 2000. The President proposed an IRA of P121,778,000,000. This became RA 8760, “AN ACT APPROPRIATING FUNDS FOR THE OPERATION OF THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES FROM JANUARY ONE TO DECEMBER THIRTYONE, TWO THOUSAND, AND FOR OTHER PURPOSES” also known as General Appropriations Act (GAA) for the Year 2000. It provides under the heading “ALLOCATIONS TO LOCAL GOVERNMENT UNITS” that the IRA for local government units shall amount to P111,778,000,000”. In another part of the GAA, under the heading “UNPROGRAMMED FUND,” it is provided that an amount of P10,000,000,000 (P10 Billion), apart from the P111,778,000,000 mentioned above, shall be used to fund the IRA, which amount shall be released only when the original revenue targets submitted by the President to Congress can be realized based on a quarterly assessment to be conducted by certain committees which the GAA specifies, namely, the Development Budget Coordinating Committee, the Committee on Finance of the Senate, and the Committee on Appropriations of the House of Representatives.

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Thus, while the GAA appropriates P111,778,000,000 of IRA as Programmed Fund, it appropriates a separate amount of P10 Billion of IRA under the classification of Unprogrammed Fund, the latter amount to be released only upon the occurrence of the condition stated in the GAA. On August 22, 2000, a number of NGOs and POs, along with 3 barangay officials filed with this Court the petition at bar, for Certiorari, Prohibition and Mandamus With Application for Temporary Restraining Order, against respondents then Executive Secretary Ronaldo Zamora, then Secretary of the Department of Budget and Management Benjamin Diokno, then National Treasurer Leonor Magtolis-Briones, and the Commission on Audit, challenging the constitutionality of provision XXXVII (ALLOCATIONS TO LOCAL GOVERNMENT UNITS) referred to by petitioners as Section 1, XXXVII (A), and LIV (UNPROGRAMMED FUND) Special Provisions 1 and 4 of the GAA (the GAA provisions) Petitioners contend that the said provisions violates the LGUs autonomy by unlawfully reducing the IRA allotted by 10B and by withholding its release by placing the same under “Unprogrammed funds”. Although the effectivity of the Year 2000 GAA has ceased, this Court shall nonetheless proceed to resolve the issues raised in the present case, it being impressed with public interest. Petitioners argue that the GAA violated the constitutional mandate of automatically releasing the IRAs when it made its release contingent on whether revenue collections could meet the revenue targets originally submitted by the President, rather than making the release automatic. ISSUE: WON the subject GAA violates LGUs fiscal autonomy by not automatically releasing the whole amount of the allotted IRA. HELD: Article X, Section 6 of the Constitution provides: SECTION 6. Local government units shall have a just share, as determined by law, in the national taxes which shall be automatically released to them. Petitioners argue that the GAA violated this constitutional mandate when it made the release of IRA contingent on whether revenue collections could meet the revenue targets originally submitted by the President, rather than making the release automatic. Respondents counterargue that the above constitutional provision is addressed not to the legislature but to the executive, hence, the same does not prevent the legislature from imposing conditions upon the release of the IRA. Respondents thus infer that the subject constitutional provision merely prevents the executive branch of the government from “unilaterally” withholding the IRA, but not the legislature from authorizing the executive branch to withhold the same. In the words of respondents, “This essentially means that the President or any member of the Executive Department cannot unilaterally, i.e., without the backing of statute, withhold the release of the IRA.” As the Constitution lays upon the executive the duty to automatically release the just share of local governments in the national taxes, so it enjoins the legislature not to pass laws that might prevent the executive from performing this duty. To hold that the executive branch may disregard constitutional provisions which define its duties, provided it has the backing of statute, is virtually to make the Constitution amendable by statute – a proposition which is patently absurd. If indeed the framers intended to allow the enactment of statutes making the release of IRA conditional instead of automatic, then Article X, Section 6 of the Constitution would have been worded differently. Since, under Article X, Section 6 of the Constitution, only the just share of local governments is qualified by the words “as determined by law,” and not the release thereof, the plain implication is that Congress is not authorized by the Constitution to hinder or impede the automatic release of the IRA. In another case, the Court held that the only possible exception to mandatory automatic release of the IRA is, as held in Batangas: …if the national internal revenue collections for the current fiscal year is less than 40 percent of the collections of the preceding third fiscal year, in which case what should be

automatically released shall be a proportionate amount of the collections for the current fiscal year. The adjustment may even be made on a quarterly basis depending on the actual collections of national internal revenue taxes for the quarter of the current fiscal year. This Court recognizes that the passage of the GAA provisions by Congress was motivated by the laudable intent to “lower the budget deficit in line with prudent fiscal management.” The pronouncement in Pimentel, however, must be echoed: “[T]he rule of law requires that even the best intentions must be carried out within the parameters of the Constitution and the law. Verily, laudable purposes must be carried out by legal methods.” WHEREFORE, the petition is GRANTED. XXXVII and LIV Special Provisions 1 and 4 of the Year 2000 GAA are hereby declared unconstitutional insofar as they set apart a portion of the IRA, in the amount of P10 Billion, as part of the UNPROGRAMMED FUND. 5. KIDA VS SENATE OF THE PHILIPPINES ** Several laws pertaining to the Autonomous Region in Muslim Mindanao (ARMM) were enacted by Congress. Republic Act (RA) No. 6734 is the organic act that established the ARMM and scheduled the first regular elections for the ARMM regional officials. RA No. 9054 amended the ARMM Charter and reset the regular elections for the ARMM regional officials to the second Monday of September 2001. RA No. 9140 further reset the first regular elections to November 26, 2001. RA No. 9333 reset for the third time the ARMM regional elections to the 2nd Monday of August 2005 and on the same date every 3 years thereafter. Pursuant to RA No. 9333, the next ARMM regional elections should have been held on August 8, 2011. COMELEC had begun preparations for these elections and had accepted certificates of candidacies for the various regional offices to be elected. But on June 30, 2011, RA No. 10153 was enacted, resetting the next ARMM regular elections to May 2013 to coincide with the regular national and local elections of the country. In these consolidated petitions filed directly with the Supreme Court, the petitioners assailed the constitutionality of RA No. 10153. ISSUE: WON the grant [to the President] of the power to appoint OICs constitutional Held: Yes, The Supreme court upheld the constitutionality of RA 10153 stating that there is no incompatibility between the President’s power of supervision over local governments and autonomous regions, and the power granted to the President, within the specific confines of RA No. 10153, to appoint OICs. The power of supervision is defined as “the power of a superior officer to see to it that lower officers perform their functions in accordance with law.” This is distinguished from the power of control or “the power of an officer to alter or modify or set aside what a subordinate officer had done in the performance of his duties and to substitute the judgment of the former for the latter.” The petitioners’ apprehension regarding the President’s alleged power of control over the OICs is rooted in their belief that the President’s appointment power includes the power to remove these officials at will. In this way, the petitioners foresee that the appointed OICs will be beholden to the President, and act as representatives of the President and not of the people. Section 3 of RA No. 10153 expressly contradicts the petitioners’ supposition. The provision states:

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Section 3. Appointment of Officers-in-Charge. — The President shall appoint officers-in-charge for the Office of the Regional Governor, Regional Vice Governor and Members of the Regional Legislative Assembly who shall perform the functions pertaining to the said offices until the officials duly elected in the May 2013 elections shall have qualified and assumed office. The wording of the law is clear. Once the President has appointed the OICs for the offices of the Governor, Vice Governor and members of the Regional Legislative Assembly, these same officials will remain in office until they are replaced by the duly elected officials in the May 2013 elections. Nothing in this provision even hints that the President has the power to recall the appointments he already made. Clearly, the petitioners’ fears in this regard are more apparent than real.

GOV. VILLAFUERTE , JR. AND PROV. OF CAMSUR VS ROBREDO Facts: 1995, the Commission on Audit (COA) conducted an examination and audit on the manner the local government units (LGUs) utilized their Internal Revenue Allotment (IRA) for the calendar years 1993-1994. The examination yielded an official report, showing that a substantial portion of the 20% development fund of some LGUs was not actually utilized for development projects but was diverted to expenses properly chargeable against the Maintenance and Other Operating Expenses (MOOE), in stark violation of Section 287 of R.A. No. 7160, otherwise known as the Local Government Code of 1991 (LGC). On August 31, 2010, the respondent, in his capacity as DILG Secretary, issued the assailed MC No. 2010-83,9 entitled “Full Disclosure of Local Budget and Finances, and Bids and Public Offerings,” which aims to promote good governance through enhanced transparency and accountability of LGUs. On February 21, 2011, Villafuerte, then Governor of Camarines Sur, joined by the Provincial Government of Camarines Sur, filed the instant petition for certiorari, seeking to nullify the assailed issuances of the respondent for being unconstitutional and having been issued with grave abuse of discretion. Issue: WON assailed memorandum circulars violate the principles of local and fiscal autonomy enshrined in the Constitution and the LGC Held: No. All local authorities are further reminded that utilizing the 20% component of the Internal Revenue Allotment, whether willfully or through negligence, for any purpose beyond those expressly prescribed by law or public policy shall be subject to the sanctions provided under the Local Government Code and under such other applicable laws. 45

Significantly, the issuance itself did not provide for sanctions. It did not particularly establish a new set of acts or omissions which are deemed violations and provide the corresponding penalties therefor. It simply stated a reminder to LGUs that there are existing rules to consider in the disbursement of the 20% development fund and that non-compliance therewith may render them liable to sanctions which are provided in the LGC and other applicable laws. Nonetheless, this warning for possible imposition of sanctions did not alter the advisory nature of the issuance. At any rate, LGUs must be reminded that the local autonomy granted to them does not completely severe them from the national government or turn them into impenetrable states. Autonomy does not make local governments sovereign within the state.46 In Ganzon v. Court of Appeals,47 the Court reiterated:

Autonomy, however, is not meant to end the relation of partnership and interdependence between the central administration and local government units, or otherwise, to usher in a regime of federalism. The Charter has not taken such a radical step. Local governments, under the Constitution, are subject to regulation, however limited, and for no other purpose than precisely, albeit paradoxically, to enhance self-government.48 Thus, notwithstanding the local fiscal autonomy being enjoyed by LGUs, they are still under the supervision of the President and maybe held accountable for malfeasance or violations of existing laws. “Supervision is not incompatible with discipline. And the power to discipline and ensure that the laws be faithfully executed must be construed to authorize the President to order an investigation of the act or conduct of local officials when in his opinion the good of the public service so requires.”49 Clearly then, the President’s power of supervision is not antithetical to investigation and imposition of sanctions. As in MC No. 2010-138, the Court finds nothing in two other questioned issuances of the respondent, i.e., MC Nos. 201083 and 2011-08, that can be construed as infringing on the fiscal autonomy of LGUs.

D. Creation and Alteration of Municipal Corporations 1. Sema v COMELEC assists the creation of any of the four local government units provInce, city, municipality or barangay must comply with three conditions. First, the creation of a local government unit must follow the criteria fixed in the Local Government Code. Second, such creation must not conflict with any provision of the Constitution. Third, there must be a plebiscite in the political units affected. There is neither an express prohibition nor an express grant of authority in the Constitution for Congress to delegate to regional or local legislative bodies the power to create local government units. However, under its plenary legislative powers, Congress can delegate to local legislative bodies the power to create local government units, subject to reasonable standards and provided no conflict arises with any provision of the Constitution. In fact, Congress has delegated to provincial boards, and city and municipal councils, the power to create barangays within their jurisdiction,[25] subject to compliance with the criteria established in the Local Government Code, and the plebiscite requirement in Section 10, Article X of the Constitution. However, under the Local Government Code, only x x x an Act of Congress can create provinces, cities or municipalities.[26] 2. League of cities of PH vs COMELEC

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Held: assistsCongress Must Prescribe in the Local Government Code All Criteria Section 10, Article X of the 1987 Constitution provides: No province, city, municipality, or barangay shall be created, divided, merged, abolished or its boundary substantially altered, except in accordance with the criteria established in the local government code and subject to approval by a majority of the votes cast in a plebiscite in the political units directly affected. (Emphasis supplied) The Constitution is clear. The creation of local government units must follow the criteria established in the Local Government Code and not in any other law. There is only one Local Government Code.18The Constitution requires Congress to stipulate in the Local Government Code all the criteria necessary for the creation of a city, including the conversion of a municipality into a city. Congress cannot write such criteria in any other law, like the Cityhood Laws. The criteria prescribed in the Local Government Code govern exclusively the creation of a city. No other law, not even the charter of the city, can govern such creation. The clear intent of the Constitution is to insure that the creation of cities and other political units must follow the same uniform, nondiscriminatory criteria found solely in the Local Government Code . Any derogation or deviation from the criteria prescribed in the Local Government Code violates Section 10, Article X of the Constitution. RA 9009 amended Section 450 of the Local Government Code to increase the income requirement from P20 million to P100 million for the creation of a city. This took effect on 30 June 2001. Hence, from that moment the Local Government Code required that any municipality desiring to become a city must satisfy the

P100 million income requirement. Section 450 of the Local Government Code, as amended by RA 9009, does not contain any exemption from this income requirement. In enacting RA 9009, Congress did not grant any exemption to respondent municipalities, even though their cityhood bills were pending in Congress when Congress passed RA 9009. The Cityhood Laws, all enacted after the effectivity of RA 9009, explicitly exempt respondent municipalities from the increased income requirement in Section 450 of the Local Government Code, as amended by RA 9009. Such exemption clearly violates Section 10, Article X of the Constitution and is thus patently unconstitutional. To be valid, such exemption must be written in the Local Government Code and not in any other law, including the Cityhood Laws

.

Cityhood Laws Violate Section 6, Article X of the Constitution

Surigao del Norte, filed another petition for certiorari[8] seeking to nullify R.A. No. 9355 for being unconstitutional. They alleged that the creation of Dinagat as a new province, if uncorrected, would perpetuate an illegal act of Congress, and would unjustly deprive the people of Surigao del Norte of a large chunk of the provincial territory, Internal Revenue Allocation (IRA), and rich resources from the area. They pointed out that when the law was passed, Dinagat had a land area of 802.12 square kilometers only and a population of only 106,951, failing to comply with Section 10, Article X of the Constitution and of Section 461 of the LGC, Held: When the local government unit to be created consists of one (1) or more islands, it is exempt from the land area requirement as expressly provided in Section 442 and Section 450 of the LGC if the local government unit to be created is a municipality or a component city, respectively.This exemption is absent in the enumeration of the requisites for the creation of a province under Section 461 of the LGC, although it is expressly stated under Article 9(2) of the LGC-IRR. In fact, considering the physical configuration of the Philippine archipelago, there is a greater likelihood that islands or group of islands would form part of the land area of a newly-created province than in most cities or municipalities. It is, therefore, logical to infer that the genuine legislative policy decision was expressed in Section 442 (for municipalities) and Section 450 (for component cities) of the LGC, but was inadvertently omitted in Section 461 (for provinces). Thus, when the exemption was expressly provided in Article 9(2) of the LGC-IRR, the inclusion was intended to correct the congressional oversight in Section 461 of the LGC and to reflect the true legislative intent. It would, then, be in order for the Court to uphold the validity of Article 9(2) of the LGC-IRR. This interpretation finds merit when we consider the basic policy considerations underpinning the principle of local autonomy. 4. Miranda v Aguirre Issue: whether R.A. No. 8528 is unconstitutional for its failure to provide that the conversion of the city of Santiago from an independent component city to a component city should be submitted to its people in a proper plebiscite. Held: In accord with the Constitution, sections 7, 8, and 9 of the Local Government Code fixed the said criteria and they involve requirements on income, population and land area. These requirements, however, are imposed to help assure the economic viability of the local government unit concerned. They were not imposed to determine the necessity for a plebiscite of the people.

3. Navarro v Ermita Re: creation of Dinagat Islands Facts: petitioners, as taxpayers and residents of the Province of

Indeed, the Local Government Code does not state that there will be no more plebiscite after its requirements on income, population and land area have been satisfied. On the contrary, section 10, Chapter 2 of the Code provides: "No creation, division, merger, abolition, or substantial alteration of boundaries of local government units shall take effect unless approved by a majority of the votes casts in a plebiscite called for the purpose in the political unit or units directly

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affected. Said plebiscite shall be conducted by the COMELEC within one hundred twenty (120) days from the date of the effectivity of the law or ordinance effecting such action, unless said law or ordinance fixes another date."11 Senator Aquilino Pimentel, the principal author of the Local Government Code of 1991, opines that the plebiscite is absolute and mandatory.

12 It cannot be overstressed that the said two requirements of the Constitution have different purposes. The criteria fixed by the Local Government Code on income, population and land area are designed to achieve an economic purpose. They are to be based on verified indicators, hence, section 7, Chapter 2 of the Local Government Code requires that these "indicators shall be attested by the Department of Finance, the National Statistics Office, and the Lands Management Bureau of the Department of Environment and Natural Resources." In contrast, the people's plebiscite is required to achieve a political purpose --- to use the people's voice as a check against the pernicious political practice of gerrymandering. There is no better check against this excess committed by the political representatives of the people themselves than the exercise of direct people power. As well-observed by one commentator, as the creation, division, merger, abolition, or substantial alteration of boundaries are "xxx basic to local government, it is also imperative that these acts be done not only by Congress but also be approved by the inhabitants of the locality concerned. xxx By giving the inhabitants a hand in their approval, the provision will also eliminate the old practice of gerrymandering and minimize legislative action designed for the benefit of a few politicians. Hence, it promotes the autonomy of local government units - R.A. No. 8528 is unconstitutional. The conversion of the city of Santiago from an independent component city to a component city should be submitted to its people in a proper plebiscite. Section 10, Article X of the 1987 Constitution provides No province, city, municipality, or barangay may be created, or divided, merged, abolished, or its boundary substantially altered except in accordance with the criteria established in the local government code and subject to approval by a majority of the votes cast in a plebiscite in the political units directly affected. A close analysis of the said constitutional provision will reveal that the creation, division, merger, abolition or substantial alteration of boundaries of local government units involve a common denominator - material change in the political and economic rights of the local government units directly affected as well as the people therein. It is precisely for this reason that the Constitution requires the approval of the people in the political units directly affected. Section 10, Article X addressed the undesirable practice in the past whereby local government units were created, abolished, merged or divided on the basis of the vagaries of politics and not of the welfare of the people. Thus, the consent of the people of the local government unit directly affected was required to serve as a checking mechanism to any exercise of legislative power creating, dividing, abolishing, merging or altering the boundaries of local government units. It is one instance where the people in their sovereign capacity decide on a matter that affects them - direct democracy of the people as opposed to democracy thru peoples representatives. This plebiscite requirement is also in accord with the philosophy

of the Constitution granting more autonomy to local government units. The changes that will result from the downgrading of the city of Santiago from an independent component city to a component city are many and cannot be characterized as insubstantial. Section 10, Chapter 2 of the Local Government Code and Rule II, Article 6, paragraph (f) (1) of the Implementing Rules and Regulations of the Local Government Code is in accord with the Constitution. The rules therein cover all conversions, whether upward or downward in character, so long as they result in a material change in the local government unit directly affected, especially a change in the political and economic rights of its people. 4. ID.; ID.; ALTERATION OF BOUNDARY OF A LOCAL GOVERNMENT UNIT; CONDITIONS.- Section 10, Article X of the 1987 Constitution imposes two conditions -first, the creation, division, merger, abolition or substantial alteration of boundary of a local government unit must meet the criteria fixed by the Local Government Code on income, population and land area and second, the law must be approved by the people by a majority of the votes cast in a plebiscite in the political units directly affected. 5. ID.; ID.; ID.; ID.; PROVISIONS THEREOF UNDER THE LOCAL GOVERNMENT CODE; DISCUSSED.- In accord with Section 10, Article IX of the Constitution, Sections 7, 8, and 9 of the Local Government Code fixed the required criteria and they involve requirements on income, population and land area. These requirements, however, are imposed to help assure the economic viability of the local government unit concerned. They were not imposed to determine the necessity for a plebiscite of the people. Indeed, the Local Government Code does not state that there will be no more plebiscite after its requirements on income, population and land area have been satisfied. On the contrary, Section 10, Chapter 2 of the Code provides for the necessity of a plebiscite. Said plebiscite shall be conducted by the COMELEC within one hundred twenty (120) days from the date of the effectivity of the law or ordinance effecting such action, unless said law or ordinance fixes another date. 6. ID.; ID.; ID.; ID.; PURPOSES; DISCUSSED.- The two requirements under Section 10 of Article IX of the Constitution have different purposes. The criteria fixed by the Local Government Code on income, population and land area are designed to achieve an economic purpose. They are to be based on verified indicators, hence, Section 7, Chapter 2 of the Local Government Code requires that these indicators shall be attested by the Department of Finance, the National Statistics Office, and the Lands Management Bureau of the Department of Environment and Natural Resources. In contrast, the peoples plebiscite is required to achieve apolitical purpose - to use the peoples voice as a check aganst the pernicious political practice of gerrymandering. There is no better check against this excess committed by the political representatives of the people themselves than the exercise of direct people power. 5. Samson v Aguirre Re: assailing cinstitutionality of the law creatjngna separate city of novaliches Facts:

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February 23, 1998, President Fidel V. Ramos signed into law Republic Act No. 8535, creating the City of Novaliches out of 15 barangays of Quezon City. Petitioner Moises S. Samson, incumbent councilor of the first district of Quezon City, is now before the Court challenging the constitutionality of Republic Act No. 8535.

time. 10 The intolerable situations will deprive the people of a new city or province a particle of their sovereignty. 11 Sovereignty cannot admit of any kind of subtraction. It is indivisible. It must be forever whole or it is not sovereignty.

7. Alvarez v Guingona Petitioner also seeks to enjoin the Executive Secretary from ordering the implementation of R.A. 8535, the COMELEC from holding a plebiscite for the creation of the City of Novaliches, and the Department of Budget and Management from disbursing funds for said plebiscite. Lastly, he prays for the issuance of a preliminary injunction or temporary restraining order, through a motion we duly noted.

Held:

a) R.A. No. 8535 failed to conform to the criteria established by the Local Government Code particularly, Sections 7, 11(a) and 450(a), as to the requirements of income, population and land area; seat of government; and no adverse effect to being a city of Quezon City, respectively, and its Implementing Rules as provided in Article 11(b)(1) and (2), as to furnishing a copy of the Quezon City Council of barangay resolution; and

The funds generated from local taxes, IRAs and national wealth utilization proceeds accrue to the general fund of the local government and are used to finance its operations subject to specified modes of spending the same as provided for in the Local Government Code and its implementing rules and regulations. For instance, not less than twenty percent (20%) of the IRAs must be set aside for local development projects.9 As such, for purposes of budget preparation, which budget should reflect the estimates of the income of the local government unit, among others, the IRAs and the share in the national wealth utilization proceeds are considered items of income. This is as it should be, since income is defined in the Local Government Code to be all revenues and receipts collected or received forming the gross accretions of funds of the local government unit.10

Held: the creation of a new city shall not reduce the land area, population, and income of the original LGU or LGUs at the time of said creation to less than the prescribed minimum requirements. All expenses incidental to the creation shall be borne by the petitioners.

The IRAs are items of income because they form part of the gross accretion of the funds of the local government unit. The IRAs regularly and automatically accrue to the local treasury without need of any further action on the part of the local government unit.11They thus constitute income which the local government can invariably rely upon as the source of much needed funds.

Petitioner bases his petition on the following grounds:

. There is no need to consider the land area, given these figures, since under the Local Government Code, the proposed city must comply with requirements as regards income and population or land area. Other than the income requirement, the proposed city must have the requisite number of inhabitants or land area. Compliance with either requirement, in addition to income, is sufficient. Judicial notice may also be taken that Novaliches is now highly urbanized. 6. Mariano v Comelec reapportionment of legislative districts may be made through a special law, such as in the charter of a new city. The Constitution 9 clearly provides that Congress shall be composed of not more than two hundred fifty (250) members, unless otherwise fixed by law. As thus worded, the Constitution did not preclude Congress from increasing its membership by passing a law, other than a general reapportionment of the law. This is its exactly what was done by Congress in enacting R.A. No. 7854 and providing for an increase in Makati's legislative district. Moreover, to hold that reapportionment can only be made through a general apportionment law, with a review of all the legislative districts allotted to each local government unit nationwide, would create an inequitable situation where a new city or province created by Congress will be denied legislative representation for an indeterminate period of

For purposes of converting the Municipality of Santiago into a city, the Department of Finance certified, among others, that the municipality had an average annual income of at least Twenty Million Pesos for the last two (2) consecutive years based on 1991 constant prices. This, the Department of Finance did after including the IRAs in its computation of said average annual income. Furthermore, Section 450 (c) of the Local Government Code provides that the average annual income shall include the income accruing to the general fund, exclusive of special funds, transfers, and non-recurring income. To reiterate, IRAs are a regular, recurring item of income; nil is there a basis, too, to classify the same as a special fund or transfer, since IRAs have a technical definition and meaning all its own as used in the Local Government Code that unequivocally makes it distinct from special funds or transfers referred to when the Code speaks of funding support from the national government, its instrumentalities and government-owned-or-controlled corporations.12 Thus, Department of Finance Order No. 359313 correctly encapsulizes the full import of the above disquisition when it defined ANNUAL INCOME to be revenues and receipts realized by provinces, cities and municipalities from regular sources of the Local General Fund including the internal revenue allotment and other shares provided for in Sections 284, 290 and 291 of the Code, but exclusive of nonrecurring receipts, such as other national aids, grants,

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financial assistance, loan proceeds, sales of fixed assets, and similar others (Italics ours).14 Such order, constituting executive or contemporaneous construction of a statute by an administrative agency charged with the task of interpreting and applying the same, is entitled to full respect and should be accorded great weight by the courts, unless such construction is clearly shown to be in sharp conflict with the Constitution, the governing statute, or other laws.15 8. Cawaling v Comelec Held: Petitioners constricted reading of Section 450(a) of the Code is erroneous. The phrase A municipality or a cluster ofbarangays may be converted into a component city is not a criterion but simply one of the modes by which a city may be created. Section 10, Article X of the Constitution, quoted earlier and which petitioner cited in support of his posture, allows themerger of local government units to create a Code

9. TAN V COMELEC significant and pivotal issue in the present case revolves around in the interpretation and application in the case at bar of Article XI, Section 3 of the Constitution, which being brief and for convenience, We again quote: SEC. 3. No province, city, municipality or barrio may be created, divided, merged abolished, or its boundary substantially altered, except in accordance with the criteria established in the local government code, and subject to the approval by a majority of the votes in a plebiscite in the unit or units affected. Held: We fail to find any legal basis for the unexplained change made when Parliamentary Bill No. 3644 was enacted into Batas Pambansa Blg. 885 so that it is now provided in said enabling law that the plebiscite "shall be conducted in the proposed new province which are the areas affected." We are not disposed to agree that by mere legislative fiat the unit or units affected referred in the fundamental law can be diminished or restricted by the Batasang Pambansa to cities and municipalities comprising the new province, thereby ignoring the evident reality that there are other people necessarily affected. In the mind of the Court, the change made by those responsible for the enactment of Batas Pambansa Blg. 885 betrays their own misgivings. They must have entertained apprehensions that by holding the plebiscite only in the areas of the new proposed province, this tactic will be tainted with illegality. In anticipation of a possible strong challenge to the legality of such a plebiscite there was, therefore, deliberately added in the enacted statute a selfserving phrase that the new province constitutes the area

province, city, municipality or barangay in accordance with the criteria established by the Code. Thus, Section 8 of the Code distinctly provides: Section 8. Division and Merger. Division and merger of existing local government units shall comply with the same requirements herein prescribed for their creation: Provided, however, That such division shall not reduce the income, population, or land area of the local government unit or units concerned to less than the minimum requirements prescribed in this Code: Provided, further, That the income classification of the original local government unit or units shall not fall below its current income classification prior to such division. x x x. (Emphasis ours) Verily, the creation of an entirely new local government unit through a division or a merger of existing local government units is recognized under the Constitution, provided that such merger or division shall comply with the requirements prescribed by the affected. Such additional statement serves no useful purpose for the same is misleading, erroneous and far from truth. The remaining portion of the parent province is as much an area affected. The substantial alteration of the boundaries of the parent province, not to mention the other adverse economic effects it might suffer, eloquently argue the points raised by the petitioners.

10. Aquino v Comelec

Facts: The said case was filed by the petitioners by way of a Petition for Certiorari and Prohibition under Rule 65 of the Rules of Court. It was addressed to nullify and declared as unconstitutional, R.A. 9716 entitled “An Act Reapportioning the Composition of the First (1st) and Second Legislative Districts (2nd) in the province of Camarines Sur and Thereby Creating a New Legislative District from such Reapportionment.” Said Act originated from House Bill No. 4264, and it was enacted by President Macapagal-Arroyo. Effectuating the act, it has divided the existing four districts, and apportioned districts shall form additional district where the new first district shall be composed of 176,383 population count. Petitioners contend that the reapportionment runs afoul of the explicit constitutional standard with a minimum population of 250,000 for the creation of a legislative district under Section 5 (3), Article VI of the 1987 Constitution. It was emphasized as well by the petitioners that if population is less than that provided by the Constitution, it must be stricken-down for non-compliance with the minimum population requirement, unless otherwise fixed by law.

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Respondents have argued that the petitioners are guilty of two fatal technical effects: first, error in choosing to assail R.A. 9716 via the Remedy of Certiorari and Prohibition under Rule 65 of the Rules of Court. And second, petitioners have no locus standi to question the constitutionality of R.A. 9716. Issue: Whether or not Republic Act No. 9716 is unconstitutional and therefore null and void, or whether or not a population of 250,000 is an indispensable constitutional requirement for the creation of a new legislative district in a province. Held: It was ruled that the said Act is constitutional. The plain and clear distinction between a city and a province was explained under the second sentence of Section 5 (3) of the Constitution. It states that a province is entitled into a representative, with nothing was mentioned about a population. While in cities, a minimum population of 250,000 must first be satisfied. In 2007, CamSur had a population of 1,693,821 making the province entitled to two additional districts from the present of four. Based on the formulation of Ordinance, other than population, the results of the apportionment were valid. And lastly, other factors were mentioned during the deliberations of House Bill No. 4264 II. General powers and Attributes of LGUs A Sources of Powers B Governmental Powers 1. Police Power aka General welfare clause 1

Dela Cruz v Paras Facts: On November 5, 1975, two cases for prohibition with preliminary injunction were filed with the Court of First Instance of Bulacan. The grounds alleged follow:1. Ordinance No. 84 is null and void as a municipality has no authority to prohibit a lawful business, occupation or calling. 2. Ordinance No. 84 is violative of the petitioners' right to due process and the equal protection of the law, as the license previously given to petitioners was in effect withdrawn without judicial hearing. 3. That under Presidential Decree No. 189, as amended, by Presidential Decree No. 259, the power to license and regulate tourist-oriented businesses including night clubs, has been transferred to the Department of Tourism." The cases were assigned to respondent Judge, now Associate Justice Paras of the Intermediate Appellate Court, who issued a restraining order on November 7, 1975. The answers were thereafter filed. It was therein alleged: " 1. That the Municipal Council is authorized by law not only to regulate but to prohibit the establishment, maintenance and operation of night clubs invoking Section 2243 of the RAC, CA 601, Republic Acts Nos. 938, 978 and 1224. 2. The Ordinance No. 84 is not violative of petitioners' right to due process and the equal protection of the law, since property rights are subordinate to public interests. 3. That Presidential Decree No. 189, as amended, did not deprive Municipal Councils of their jurisdiction to regulate or prohibit night clubs."

the lower court dismissed the petitions. Its rationale is set forth in the opening paragraph thus: "Those who lust cannot last. This in essence is why the Municipality of Bocaue, Province of Bulacan, stigmatized as it has been by innuendos of sexual titillation and fearful of what the awesome future holds for it, had no alternative except to order thru its legislative machinery, and even at the risk of partial economic dislocation, the closure of its night clubs and/or cabarets. This in essence is also why this Court, obedient to the mandates of good government, and cognizant of the categorical imperatives of the current legal and social revolution, hereby [upholds] in the name of police power the validity and constitutionality of Ordinance No. 84, Series of 1975, of the Municipal Council of Bocaue, Bulacan. Hence this petition Held: t is a general rule that ordinances passed by virtue of the implied power found in the general welfare clause must be reasonable, consonant with the general powersand purposes of the corporation, and not inconsistent with the laws or policy of the State."

If night clubs were merely then regulated and not prohibited, certainly the assailed ordinance would pass the test of validity. In the two leading cases above set forth, this Court had stressed reasonableness, consonant with the general powers and purposes of municipal corporations, as well as consistency with the laws or policy of the State. It cannot be said that such a sweeping exercise of a lawmaking power by Bocaue could qualify under the term reasonable under review refers to Republic Act No. 938 as amended. It was originally enacted on June 20, 1953. It is entitled: "AN ACT GRANTING MUNICIPAL OR CITY BOARDS AND COUNCILS THE POWER TO REGULATE THE ESTABLISHMENT, MAINTENANCE AND OPERATION OF CERTAIN PLACES OF AMUSEMENT WITHIN THEIR RESPECTIVE TERRITORIAL JURISDICTIONS.' Its first section insofar as pertinent reads: "The municipal or city board or council of each chartered city shall have the power to regulate by ordinance the establishment, maintenance and operation of night clubs, cabarets, dancing schools, pavilions, cockpits, bars, saloons, bowling alleys, billiard pools, and other similar places of amusement within its territorial jurisdiction: ... 2 Binay v Domingo September 27, 1988, petitioner Municipality, through its Council, approved Resolution No. 60 Qualified beneficiaries, under the Burial Assistance Program, are bereaved families of Makati whose gross family income does not exceed two thousand pesos (P2,000.00) a month. The beneficiaries, upon fulfillment of other requirements, would receive the amount of five hundred pesos (P500.00) cash relief from the Municipality of Makati. (Reno, Annex "13", p. 41) Metro Manila Commission approved Resolution No. 60. Thereafter, the municipal secretary certified a disbursement

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fired of four hundred thousand pesos (P400,000.00) for the implementation of the Burial Assistance Program. (Rollo, Annex "C", p. 43). Resolution No. 60 was referred to respondent Commission on Audit (COA) for its expected allowance in audit. Based on its preliminary findings, respondent COA disapproved Resolution No. 60 and disallowed in audit the disbursement of finds for the implementation thereof. (Rollo, Annex "D", P. 44) Two letters for reconsideration (Annexes "E" and "F", Rollo, pp. 45 and 48, respectively) filed by petitioners Mayor Jejomar Binay, were denied by respondent bc it is not within the scope of police power. Petitioner, through its Mayor, was constrained to file this special civil action of certiorari praying that COA Decision No. 1159 be set aside as null and void. Issue: whether or not Resolution No. 60, re-enacted under Resolution No. 243, of the Municipality of Makati is a valid exercise of police power under the general welfare clause. Held: Yes. The police power of a municipal corporation is broad, and has been said to be commensurate with, but not to exceed, the duty to provide for the real needs of the people in their health, safety, comfort, and convenience as consistently as may be with private rights. It extends to all the great public needs, and, in a broad sense includes all legislation and almost every function of the municipal government. It covers a wide scope of subjects, and, while it is especially occupied with whatever affects the peace, security, health, morals, and general welfare of the community, it is not limited thereto, but is broadened to deal with conditions which exists so as to bring out of them the greatest welfare of the people by promoting public convenience or general prosperity, and to everything worthwhile for the preservation of comfort of the inhabitants of the corporation (62 C.J.S. Sec. 128). Thus, it is deemed inadvisable to attempt to frame any definition which shall absolutely indicate the limits of police power. There is no violation of the equal protection clause in classifying paupers as subject of legislation. Paupers may be reasonably classified. Different groups may receive varying treatment. Precious to the hearts of our legislators, down to our local councilors, is the welfare of the paupers. Thus, statutes have been passed giving rights and benefits to the disabled, emancipating the tenant-farmer from the bondage of the soil, housing the urban poor, etc. Resolution No. 60, re-enacted under Resolution No. 243, of the Municipality of Makati is a paragon of the continuing

program of our government towards social justice. The Burial Assistance Program is a relief of pauperism, though not complete. The loss of a member of a family is a painful experience, and it is more painful for the poor to be financially burdened by such death. Resolution No. 60 vivifies the very words of the late President Ramon Magsaysay 'those who have less in life, should have more in law." This decision, however must not be taken as a precedent, or as an official go-signal for municipal governments to embark on a philanthropic orgy of inordinate dole-outs for motives political or otherwise.

3 Tano v Socrates A FACTS: On Dec 15, 1992, the Sangguniang Panglungsod ng Puerto Princesa enacted an ordinance banning the shipment of all live fish and lobster outside Puerto Princesa City from January 1, 1993 to January 1, 1998. Subsequently the Sangguniang Panlalawigan, Provincial Government of Palawan enacted a resolution prohibiting the catching , gathering, possessing, buying, selling, and shipment of a several species of live marine coral dwelling aquatic organisms for 5 years, in and coming from Palawan waters. Petitioners filed a special civil action for certiorari and prohibition, praying that the court declare the said ordinances and resolutions as unconstitutional on the ground that the said ordinances deprived them of the due process of law, their livelihood, and unduly restricted them from the practice of their trade, in violation of Section 2, Article XII and Sections 2 and 7 of Article XIII of the 1987 Constitution. ISSUE: Are the challenged ordinances unconstitutional? HELD: No. The Supreme Court found the petitioners contentions baseless and held that the challenged ordinances did not suffer from any infirmity, both under the Constitution and applicable laws. There is absolutely no showing that any of the petitioners qualifies as a subsistence or marginal fisherman. Besides, Section 2 of Article XII aims primarily not to bestow any right to subsistence fishermen, but to lay stress on the duty of the State to protect the nation’s marine wealth. The so-called “preferential right” of subsistence or marginal fishermen to the use of marine resources is not at all absolute. In accordance with the Regalian Doctrine, marine resources belong to the state and pursuant to the first paragraph of Section 2, Article XII of the Constitution, their “exploration, development and utilization...shall be under the full control and supervision of the State. In addition, one of the devolved powers of the LCG on devolution is the enforcement of fishery laws in municipal waters including the conservation of mangroves. This necessarily includes the enactment of ordinances to effectively carry out such fishery laws within the municipal waters. In light of the principles of decentralization and devolution enshrined in the LGC and the powers granted therein to LGUs which unquestionably involve the exercise

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of police power, the validity of the questioned ordinances cannot be doubted. 4 White Light Corp vs City of Manila Facts: Mayor Alfredo Lim signed into law an ordinance Issue: Won the ordinance is a legitimate exercise of the Police power of LGU Held: No. the Ordinance prevents the lawful uses of a wash rate depriving patrons of a product and the petitioners of lucrative business ties in with another constitutional requisite for the legitimacy of the Ordinance as a police power measure. It must appear that the interests of the public generally, as distinguished from those of a particular class, require an interference with private rights and the means must be reasonably necessary for the accomplishment of the purpose and not unduly oppressive of private rights.71 It must also be evident that no other alternative for the accomplishment of the purpose less intrusive of private rights can work. More importantly, a reasonable relation must exist between the purposes of the measure and the means employed for its accomplishment, for even under the guise of protecting the public interest, personal rights and those pertaining to private property will not be permitted to be arbitrarily invaded.72 Lacking a concurrence of these requisites, the police measure shall be struck down as an arbitrary intrusion into private rights. As held in Morfe v. Mutuc, the exercise of police power is subject to judicial review when life, liberty or property is affected.73 However, this is not in any way meant to take it away from the vastness of State police power whose exercise enjoys the presumption of validity 5 SJS v Atienza (2008) Facts: Sangguniang Panlungsod of Manila enacted Ordinance No. 8027.2 Respondent mayor approved the ordinance on November 28, 2001. Ordinance No. 8027 was enacted pursuant to the police power delegated to local government units, a principle described as the power inherent in a government to enact laws, within constitutional limits, to promote the order, safety, health, morals and general welfare of the society.5 This is evident from Sections 1 and 3 thereof which state: SECTION 1. For the purpose of promoting sound urban planning and ensuring health, public safety, and general welfare of the residents of Pandacan and Sta. Ana as well as its adjoining areas, the land use of [those] portions of land bounded by the Pasig River in the north, PNR Railroad Track in the east, Beata St. in the south, Palumpong St. in the southwest, and Estero de Pancacan in the west[,] PNR Railroad in the northwest area, Estero de Pandacan in the [n]ortheast, Pasig River in the southeast and Dr. M.L. Carreon in the southwest. The area of Punta, Sta. Ana bounded by the Pasig River, Marcelino Obrero St., Mayo 28 St., and F. Manalo Street, are hereby reclassified from

Industrial II to Commercial I. xxx xxx xxx SEC. 3. Owners or operators of industries and other businesses, the operation of which are no longer permitted under Section 1 hereof, are hereby given a period of six (6) months from the date of effectivity of this Ordinance within which to cease and desist from the operation of businesses which are hereby in consequence, disallowed. Ordinance No. 8027 reclassified the area described therein from industrial to commercial and directed the owners and operators of businesses disallowed under Section 1 to cease and desist from operating their businesses within six months from the date of effectivity of the ordinance. Among the businesses situated in the area are the so-called "Pandacan Terminals" of the oil companies Caltex (Philippines), Inc., Petron Corporation and Pilipinas Shell Petroleum Corporation. However, on June 26, 2002, the City of Manila and the Department of Energy (DOE) entered into a memorandum of understanding (MOU)6 with the oil companies in which they agreed that "the scaling down of the Pandacan Terminals [was] the most viable and practicable option. MOU was effective only for a period of six months starting July 25, 2002.8 Thereafter, on January 30, 2003, the Sanggunian adopted Resolution No. 139 extending the validity of Resolution No. 97 to April 30, 2003 and authorizing Mayor Atienza to issue special business permits to the oil companies. Resolution No. 13, s. 2003 also called for a reassessment of the ordinance Held: Respondent Hon. Jose L. Atienza, Jr., as mayor of the City of Manila, is directed to immediately enforce Ordinance No. 8027. SJS Officers vs Lim and Atienza 2. Taxing Power (Sec. 5-7, Art. X, Constitution; Sec. 128196 LGC) 1. Manila Intl Airport Authority vs CA Held: 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 power 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, it remains a government instrumentality exercising not only governmental but also corporate powers. Thus, MIAA

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exercises the governmental powers of eminent domain,12 police authority13 and the levying of fees and charges. 14 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."15 A government instrumentality like MIAA falls under Section 133(o) of the Local Government Code, which states: SEC. 133. Common Limitations on the Taxing Powers of Local Government Units. – Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following: xxxx (o) Taxes, fees or charges of any kind on the National Government, its agencies and instrumentalities and local government units.(Emphasis and underscoring supplied) Section 133(o) recognizes the basic principle that local governments cannot tax the national government, which historically merely delegated to local governments the power to tax. While the 1987 Constitution now includes taxation as one of the powers of local governments, local governments may only exercise such power "subject to such guidelines and limitations as the Congress may provide."18 When local governments invoke the power to tax on national government instrumentalities, such power is construed strictly against local governments. The rule is that a tax is never presumed and there must be clear language in the law imposing the tax. Any doubt whether a person, article or activity is taxable is resolved against taxation. This rule applies with greater force when local governments seek to tax national government instrumentalities. Another rule is that a tax exemption is strictly construed against the taxpayer claiming the exemption. However, when Congress grants an exemption to a national government instrumentality from local taxation, such exemption is construed liberally in favor of the national government instrumentality. Thus, Section 133 of the Local Government Code states that "unless otherwise provided" in the Code, local governments cannot tax national government instrumentalities. As this Court held in Basco v. Philippine Amusements and Gaming Corporation: The states have no power by taxation or otherwise, to retard, impede, burden or in any manner control the operation of constitutional laws enacted by Congress to carry into execution the powers vested in the federal government. (MC Culloch v. Maryland, 4 Wheat 316, 4 L Ed. 579) This doctrine emanates from the "supremacy" of the National Government over local governments. Section 234(a) of the Local Government Code exempts from real estate tax any "[r]eal property owned by the Republic of the Philippines." Section 234(a) provides: SEC. 234. Exemptions from Real Property Tax. — The following are exempted from payment of the real property

tax: (a) Real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person;

2. Mactan Cebu intl airport vs Marcos Elsewise stated, taxation is the rule, exemption therefrom is the exception.[20] However, if the grantee of the exemption is a political subdivision or instrumentality, the rigid rule of construction does not apply because the practical effect of the exemption is merely to reduce the amount of money that has to be handled by the government in the course of its operations. As to tax exemptions or incentives granted to or presently enjoyed by natural or juridical persons, including government-owned and controlled corporations, Section 193 of the LGC prescribes the general rule, viz., they are withdrawn upon the effectivity of the LGC, except those granted to local water districts, cooperatives duly registered under R.A. No. 6938, non-stock and non-profit hospitals and educational institutions, and unless otherwise provided in the LGC. The latter proviso could refer to Section 234 which enumerates the properties exempt from real property tax. But the last paragraph of Section 234 further qualifies the retention of the exemption insofar as real property taxes are concerned by limiting the retention only to those enumerated therein; all others not included in the enumeration lost the privilege upon the effectivity of the LGC. Moreover, even as to real property owned by the Republic of the Philippines or any of its political subdivisions covered by item (a) of the first paragraph of Section 234, the exemption is withdrawn if the beneficial use of such property has been granted to a taxable person for consideration or otherwise. 3. City govt of qc vs bayantel Held: the power of the Quezon City Government to tax is limited by Section 232 of the LGC which expressly provides that a province or city or municipality within the Metropolitan Manila Area may levy an annual ad valorem tax on real property such as land, building, machinery, and other improvement not hereinafter specifically exempted. Under this law, the Legislature highlighted its power to thereafter exempt certain realties from the taxing power of local government units. An interpretation denying Congress such power to exempt would reduce the phrase not

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hereinafter specifically exempted as a pure jargon, without meaning whatsoever. Needless to state, such absurd situation is unacceptable.

4. Drilon vs Lim | constitutionality of sec 189 lgc; procedural requirements Held: Section 187 authorizes the Secretary of Justice to review only the constitutionality or legality of the tax ordinance and, if warranted, to revoke it on either or both of these grounds. When he alters or modifies or sets aside a tax ordinance, he is not also permitted to substitute his own judgment for the judgment of the local government that enacted the measure. Secretary Drilon did set aside the Manila Revenue Code, but he did not replace it with his own version of what the Code should be. He did not pronounce the ordinance unwise or unreasonable as a basis for its annulment. He did not say that in his judgment it was a bad law. What he found only was that it was illegal. All he did in reviewing the said measure was determine if the petitioners were performing their functions in accordance with law, that is, with the prescribed procedure for the enactment of tax ordinances and the grant of powers to the city government under the Local Government Code. As we see it, that was an act not of control but of mere supervision.

5. Batangas City vs Pilipinas Shell Issue: whether a LGU is empowered under the LGC to impose business taxes on persons or entities engaged in the business of manufacturing and distribution of petroleum products. Held: it must be emphasized that although the power to tax is inherent in the State, the same is not true for LGUs because although the mandate to impose taxes granted to LGUs is categorical and long established in the 1987 Philippine Constitution, the same is not all encompassing as it is subject to limitations as explicitly stated in Section 5, Article X of the 1987 Constitution Strictly speaking, as long as the subject matter of the taxing powers of the LGUs is the petroleum products per se or even the activity or privilege related to the petroleum products, such as manufacturing and distribution of said products, it is covered by the said limitation and thus, no levy can be imposed.16 3. Sec 19 eminent domain 1. City govt of qc ericta There is no reasonable relation between the setting aside of at least six (6) percent of the total area of an private cemeteries for charity burial grounds of deceased paupers and the promotion of health, morals, good order, safety, or the general welfare of the people. The ordinance is actually

a taking without compensation of a certain area from a private cemetery to benefit paupers who are charges of the municipal corporation. Instead of building or maintaining a public cemetery for this purpose, the city passes the burden to private cemeteries. The expropriation without compensation of a portion of private cemeteries is not covered by Section 12(t) of Republic Act 537, the Revised Charter of Quezon City which empowers the city council to prohibit the burial of the dead within the center of population of the city and to provide for their burial in a proper place subject to the provisions of general law regulating burial grounds and cemeteries. When the Local Government Code, Batas Pambansa Blg. 337 provides in Section 177 (q) that a Sangguniang panlungsod may "provide for the burial of the dead in such place and in such manner as prescribed by law or ordinance" it simply authorizes the city to provide its own city owned land or to buy or expropriate private properties to construct public cemeteries. This has been the law and practise in the past. It continues to the present. Expropriation, however, requires payment of just compensation. The questioned ordinance is different from laws and regulations requiring owners of subdivisions to set aside certain areas for streets, parks, playgrounds, and other public facilities from the land they sell to buyers of subdivision lots. The necessities of public safety, health, and convenience are very clear from said requirements which are intended to insure the development of communities with salubrious and wholesome environments. The beneficiaries of the regulation, in turn, are made to pay by the subdivision developer when individual lots are sold to home-owners. 2. CITY OF CEBU VS SPS ANTONIO Issue of whether just compensation should be determined as of the date of the filing of the complaint. Held: In the case at bar, the applicable law as to the point of reckoning for the determination of just compensation is Section 19 of R.A. No. 7160, which expressly provides that just compensation shall be determined as of the time of actual taking. The Section reads as follows: SECTION 19. Eminent Domain. -- A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws: Provided, however, That the power of eminent domain may not be exercised unless a valid and definite offer has been previously made to the owner, and such offer was not accepted: Provided, further, That the local government unit may immediately take possession of the property upon the filing of the expropriation proceedings and upon making a deposit with the proper court of at least fifteen percent (15%) of the fair market value of the property based on the current tax declaration of the property to be expropriated: Provided finally, That, the amount to be paid for the expropriated property shall be determined by the proper court, based on the fair market value at the time of the taking of the property. 3. Republic vs ca (2002)

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In insisting on the return of the expropriated property, respondents would exhort on the pronouncement in Provincial Government of Sorsogon vs. Vda. de Villaroya[14] where the unpaid landowners were allowed the alternative remedy of recovery of the property there in question. It might be borne in mind that the case involved the municipal government of Sorsogon, to which the power of eminent domain is not inherent, but merely delegated and of limited application. The grant of the power of eminent domain to local governments under Republic Act No. 7160[15] cannot be understood as being the pervasive and all-encompassing power vested in the legislative branch of government. For local governments to be able to wield the power, it must, by enabling law, be delegated to it by the national legislature, but even then, this delegated power of eminent domain is not, strictly speaking, a power of eminent, but only of inferior, domain or only as broad or confined as the real authority would want it to be.[16] Thus, in Valdehueza vs. Republic[17] where the private landowners had remained unpaid ten years after the termination of the expropriation proceedings, this Court ruled -

petitioners have already complied with the standard requirements laid down under the applicable rules and regulations of the DAR....20 The conversion of agricultural lands into non-agricultural uses shall be strictly regulated and may be allowed only when the conditions prescribed under R.A. No. 6657 are present.2

Closure and opening of roads 1. Sangalang v iac heir mother case, G. R. No. 71169 is, on the other hand, a petition to hold the vendor itself, Ayala Corporation (formerly Makati Development Corporation), liable for tearing down the perimeter wall along Jupiter Street that had therefore closed its commercial section from the residences of Bel-Air Village and ushering in, as a consequence, the full "commercialization" of Jupiter Street, in violation of the very restrictions it had authored.

The points in dispute are whether such payment can still be made and, if so, in what amount. Said lots have been the subject of expropriation proceedings. By final and executory judgment in said proceedings, they were condemned for public use, as part of an airport, and ordered sold to the government. x x x It follows that both by virtue of the judgment, long final, in the expropriation suit, as well as the annotations upon their title certificates, plaintiffs are not entitled to recover possession of their expropriated lots which are still devoted to the public use for which they were expropriated - but only to demand the fair market value of the same.

As We indicated, the Court of Appeals dismissed all five appeals on the basis primarily of its ruling in AC-G.R. No. 66649, "Bel-Air Village, Inc. v. Hy-Land Realty Development Corporation, et al.," in which the appellate court explicitly rejected claims under the same 'deed restrictions" as a result of Ordinance No. 81 enacted by the Government of the Municipality of Makati, as well as Comprehensive Zoning Ordinance No. 8101 promulgated by the Metropolitan Manila Commission, which two ordinances allegedly allowed the use of Jupiter Street both for residential and commercial purposes. It was likewise held that these twin measures were valid as a legitimate exercise of police power.

Reclassification of Lands

Held:

Dar vs Saranggani nstruing Sec. 20 of the Local Government Code and the subsequent administrative issuances implementing the same, we are of the opinion that while the DAR retains the responsibility for approving or disapproving applications for land use conversion filed by individual landowners on their landholdings, the exercise of such authority should be confined to compliance with the requirements and limitations under existing laws and regulations, such as the allowable percentage of agricultural [area] to be reclassified, ensuring sufficient food production, areas non-negotiable for conversion and those falling under environmentally critical areas or highly restricted for conversion under the NIPAS law. Definitely, the DAR’s power in such cases may not be exercised in such a manner as to defeat the very purpose of the LGU concerned in reclassifying certain areas to achieve social and economic benefits in pursuit of its mandate towards the general welfare. Precisely, therefore, the DAR is required to use the comprehensive land use plans and accompanying ordinances of the local Sanggunian as primary references in evaluating applications for land use conversion filed by individual landowners. In this case,

mong other things, there is a recognition under both Ordinances Nos. 81 and 8 1-01 that Jupiter Street lies as the boundary between Bel-Air Village and Ayala Corporation's commercial section. And since 1957, it had been considered as a boundary not as a part of either the residential or commercial zones of Ayala Corporation's real estate development projects. Thus, the Bel-Air Village Association's articles of incorporation state that Bel-Air Village is 'bounded on the NE., from Amapola St., to de los Santos Ave., by Estrella St., on the SE from Extrella St., to Pedestrian Lane by E. De los Santos Ave., on the SW., from Pedestrian Lane to Reposo St., by Jupiter Street . . . . 40 Hence, it cannot be said to have been "for the exclusive benefit" of Bel-Air Village residents. We come to the perimeter wall then standing on the commercial side of Jupiter Street the destruction of which opened the street to the public. The petitioners contend that the opening of the thoroughfare had opened, in turn, the floodgates to the commercialization of Bel-Air Village. The wall, so they allege, was designed precisely to protect the peace and privacy of Bel-Air Village residents from the din and uproar of mercantile pursuits, and that the Ayala Corporation had committed itself to maintain it. It was the opinion of the Court of Appeals, as we said, that Ayala's liability therefor, if one existed, had been overtaken by the

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passage of Ordinances Nos. 81 and 82-01, opening Jupiter Street to commerce. It is our ruling, we reiterate, that Jupiter Street lies as a mere boundary, a fact acknowledged by the authorities of Makati and the National Government and, as a scrutiny of the records themselves reveals, by the petitioners themselves, as the articles of incorporation of Bel-Air Village Association itself would confirm. As a consequence, Jupiter Street was intended for the use by both -the commercial and residential blocks. It was not originally constructed, therefore, for the exclusive use of either block, least of all the residents of Bel-Air Village, but, we repeat, in favor of both, as distinguished from the general public. 2. MMDA vs Bel Air

act, it has divided the existing four districts, and apportioned districts shall form additional district where the new first district shall be composed of 176,383 population count. Petitioners contend that the reapportionment runs afoul of the explicit constitutional standard with a minimum population of 250,000 for the creation of a legislative district under Section 5 (3), Article VI of the 1987 Constitution. It was emphasized as well by the petitioners that if population is less than that provided by the Constitution, it must be stricken-down for non-compliance with the minimum population requirement, unless otherwise fixed by law.

Issue: won mmda may order the opening of neptune road? Held: No. MMDA is not a local government unit or a public corporation endowed with legislative power. It is not even a "special metropolitan political subdivision" as contemplated in Section 11, Article X of the Constitution. The creation of a "special metropolitan political subdivision" requires the 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 President with the rank and privileges of a cabinet member. In fact, part of his function is to perform such other duties as may be assigned to him by the President,[57] whereas in local government units, the President merely exercises supervisory authority. This emphasizes the administrative character of the MMDA. Newmiso MMDA has no power 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. 3. Lucena Grand Terminal, inc. v JAC liner Facts: Facts: The said case was filed by the petitioners by way of a Petition for Certiorari and Prohibition under Rule 65 of the Rules of Court. It was addressed to nullify and declared as unconstitutional, R.A. 9716 entitled “An Act Reapportioning the Composition of the First (1st) and Second Legislative Districts (2nd) in the province of Camarines Sur and Thereby Creating a New Legislative District from such Reapportionment.” Said Act originated from House Bill No. 4264, and it was enacted by President Macapagal-Arroyo. Effectuating the

Respondents have argued that the petitioners are guilty of two fatal technical effects: first, error in choosing to assail R.A. 9716 via the Remedy of Certiorari and Prohibition under Rule 65 of the Rules of Court. And second, petitioners have no locus standi to question the constitutionality of R.A. 9716. Issue: Whether or not Republic Act No. 9716 is unconstitutional and therefore null and void, or whether or not a population of 250,000 is an indispensable constitutional requirement for the creation of a new legislative district in a province. Held: It was ruled that the said Act is constitutional. The plain and clear distinction between a city and a province was explained under the second sentence of Section 5 (3) of the Constitution. It states that a province is entitled into a representative, with nothing was mentioned about a population. While in cities, a minimum population of 250,000 must first be satisfied. In 2007, CamSur had a population of 1,693,821 making the province entitled to two additional districts from the present of four. Based on the formulation of Ordinance, other than population, the results of the apportionment were valid. And lastly, other factors were mentioned during the deliberations of House Bill No. 4264. 6. Legislative Power A. REQUISITES OF A VALID ORDINANCE 1. City of Manila vs Laguio Facts: Malate Tourist Development Corporation (MTDC) is a corporation engaged in the business of operating hotels, motels, hostels and lodging houses.[5] It built and opened Victoria Court in Malate which was licensed as a motel although duly accredited with the Department of Tourism as a hotel.[6] On 28 June 1993, MTDC filed a Petition for Declaratory Relief with Prayer for a Writ of Preliminary Injunction and/or Temporary Restraining

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Order[7] (RTC Petition) with the lower court impleading as defendants, herein petitioners City of Manila, Hon. Alfredo S. Lim (Lim), Hon. Joselito L. Atienza, and the members of the City Council of Manila (City Council). MTDC prayed that the Ordinance, insofar as it includes motels and inns as among its prohibited establishments, be declared invalid and unconstitutional.[8]

12. Inns

Enacted by the City Council[9] on 9 March 1993 and approved by petitioner City Mayor on 30 March 1993, the said Ordinance is entitled

the Ordinance invades fundamental personal and property rights and impairs personal privileges. It is constitutionally infirm. The Ordinance contravenes statutes; it is discriminatory and unreasonable in its operation; it is not sufficiently detailed and explicit that abuses may attend the enforcement of its sanctions. And not to be forgotten, the City Council under the Code had no power to enact the Ordinance and is therefore ultra vires, null and void.

AN ORDINANCE PROHIBITING THE ESTABLISHMENT OR OPERATION OF BUSINESSES PROVIDING CERTAIN FORMS OF AMUSEMENT, ENTERTAINMENT, SERVICES AND FACILITIES IN THE ERMITA-MALATE AREA, PRESCRIBING PENALTIES FOR VIOLATION THEREOF, AND FOR OTHER PURPOSES.[ no person, partnership, corporation or entity shall, in the Ermita-Malate area bounded by Teodoro M. Kalaw Sr. Street in the North, Taft Avenue in the East, Vito Cruz Street in the South and Roxas Boulevard in the West, pursuant to P.D. 499 be allowed or authorized to contract and engage in, any business providing certain forms of amusement, entertainment, services and facilities where women are used as tools in entertainment and which tend to disturb the community, annoy the inhabitants, and adversely affect the social and moral welfare of the community, such as but not limited to: 1. Sauna Parlors 2. Massage Parlors 3. Karaoke Bars 4. Beerhouses 5. Night Clubs 6. Day Clubs 7. Super Clubs 8. Discotheques 9. Cabarets 10. Dance Halls 11. Motels

Issue: WON the ordinance is valid Held: No. The Ordinance is in contravention of the Code as the latter merely empowers local government units to regulate, and not prohibit, the establishments enumerated in Section 1 thereof.

NOTA BENE: The tests of a valid ordinance: (1) must not contravene the Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent with public policy; and (6) must not be unreasonable.[37] 2. SJS vs Atienza Ordinance No. 8027 Is Constitutional And Valid Having ruled that there is no impediment to the enforcement of Ordinance No. 8027, we now proceed to make a definitive ruling on its constitutionality and validity. The tests of a valid ordinance are well established. For an ordinance to be valid, it must not only be within the corporate powers of the LGU to enact and be passed according to the procedure prescribed by law, it must also conform to the following substantive requirements: (1) must not contravene the Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent with public policy and (6) must not be unreasonable.115 Ordinance No. 8027 was passed by the Sangguniang Panlungsod of Manila in the exercise of its police power. Police power is the plenary power vested in the legislature to make statutes and ordinances to promote the health, morals, peace, education, good order or safety and general welfare of the people.116 This power flows from the recognition that salus populi est suprema lex (the welfare of the people is the supreme law).117 While police power rests primarily with the national legislature, such power may be delegated. B. Local Initiative and Referendum (Sec. 120-127, LGC)` - COMELEC to enforce and administer laws and regulations relative to the conduct of initiative and referendum

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* Local Initiative – is a legal process whereby the registered voters of a Local government Unit may directly propose, enact, or amend any ordinance. REMEMBER that initiative siya if what is proposed is a Law, Ordinance, or Resolution which only the Legislative Bodies of the Governments of the Autonomous Regions, Provinces, Cities, Municipalities and Barangays can pass. *Local Referendum – is a legal process whereby the registered voters of the Local Government Units may approve, amend or reject any ordinance enacted by the Sanggunian through an election held for the purpose. It shall be held under control and direction of the COMELEC within 60 days in case of Provinces and Cities, 45 days in case of Municipalities and 30 days in case of Barangays. The Comelec shall certify and proclaim the results of said referendum.

provided that in cas of barangays, the period shall bee eighteen months after approval thereof. 7. Authority over Police Units Section 6. The State shall establish and maintain one police force, which shall be national in scope and civilian in character, to be administered and controlled by a national police commission. The authority of local executives over the police units in their jurisdiction shall be provided by law. C. Corporate Powers (Sec. 22, Ra 7160) - must be construed in strctissimi juris and any doubt or ambiguity must be construed against the municipality. 1. 2. 3. 4. 5.

NOTE: ALL REGISTERED VOTERS MAY EXERCISE POWER OF LOCAL INITIATIVE AND REFERENDUM Limitations on Local Initiative 1. Power of local initiative shall not be exercised more than once a year 2. Shall extend only to subjects or matters which are within the legal powers of the Sanggunian to enact 3. If at anytime before the initiative is held, the Sanggunian concerned adopts in toto the proposition presented and the Local Chief Executive approves the same, the initiative shall be cancelled. However, those against such action may, if they so desire, apply for initiative in the manner herein provided.

-

Limitations upon Sanggunians in Local Initiative and Referendum - Shall not be repealed, modified or amended by the sanggunian concerned within 6 months from the date of the approval thereof, and may be amended, modified, or repealed by the Sanggunian within 3 years thereafter by a vote of ¾ of all its members:

6.

To have continuous succession in its corporate name To sue and be sued (relate sa municipal liability) To have and use a corporate seal To acquire and convey real or personal property To enter into contracts a. Requisites 1. LGU has the express, implied or inherent power to enter into a particular contract 2. Entered into by the proper department, board, committee or agent 3. Must comply with substantive requiremets 4. Must comply with the formal requirements of written contracts & 5. In case entered into by the Local chief executive on behalf of LGU, prior authorization by the Sanggunian concerned is needed b. Ultra Vires Contracts When a contract is entered into without compliance with the first and third requisites above, the same is ultra vires and is NULL AND VOID; cannot be ratified and validated Ratification of defective municipal contract is possible only when there is non- compliance with the second and/or fourth requirements above. To exercise such other powers as are granted to corporations, subject to the limitations provided in this code and other laws.

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