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Republic of the Philippines

SUPREME COURT
Baguio City

EN BANC

G.R. NO. 183337               April 23, 2010

CIVIL SERVICE COMMISSION, Petitioner,

vs.
GREGORIO MAGNAYE, JR., Respondent.

DECISION

MENDOZA, J.:

The Civil Service Commission (CSC) assails in this petition for review on certiorari, 1 the February 20, 2008 Decision2 
June 11, 2008 resolution of the Court of Appeals (CA) in CA-G.R. SP No. 85508. The CA reversed the July 20, 2004
the Civil Service Commission Regional Office No. IV (CSCRO-IV) and ordered the reinstatement of respondent Greg
Magnaye, Jr. (Magnaye) with payment of backwages and other monetary benefits.

THE FACTS

In March 2001, Mayor Roman H. Rosales of Lemery, Batangas, appointed Magnaye as Utility Worker I at the Office o
Enterprise [Operation of Market] (OEE). After a few days, Mayor Rosales detailed him to the Municipal Planning and
Development Office.

In the May elections of that year, Mayor Rosales was defeated by Raul L. Bendaña, who assumed office on June 30,
Thereafter, Magnaye was returned to his original assignment at the OEE. On July 11, 2001, Bendaña also placed him
at the Municipal Planning and Development Office to assist in the implementation of a Survey on the Integrated Rura
Accessibility Planning Project.

On August 13, 2001, the new mayor served him a notice of termination from employment effective the following day f
unsatisfactory conduct and want of capacity.

Magnaye questioned his termination before the CSC head office on the ground that Mayor Bendaña was not in a pos
effectively evaluate his performance because it was made less than one and one-half months after his (Mayor Benda
assumption to office. He added that his termination was without basis and was politically motivated.

The CSC head office dismissed, without prejudice, Magnaye’s complaint because he failed to attach a certificate of n
shopping. Thereafter, Magnaye filed a complaint with the regional office of the Civil Service (CSCRO-IV).

The CSCRO-IV dismissed Magnaye’s complaint for lack of merit. It upheld his dismissal from the service on the grou
Mayor Bendaña’s own assessment, together with the evaluation made by his supervisors, constituted sufficient and r
grounds for his termination.

Magnaye sought recourse through a petition for review with the Court of Appeals, citing CSCRO-IV’s alleged errors o
law, non-observance of due process, and grave abuse of discretion amounting to lack or excess of jurisdiction. Adopt
stance of the Office of the Solicitor General, the CA ruled in Magnaye’s favor, mainly on the ground that he was denie
process since he was not informed of what constituted the alleged unsatisfactory conduct and want of capacity that le
termination. It summarized the positions of the OSG as follows:

On January 18, 2005, the Office of the Solicitor General (OSG) filed its manifestation and motion, in lieu of comment,
the assailed decision be set aside. The OSG argued that Petitioner’s termination was illegal. The notice of termination
the specific instances indicating Petitioner’s alleged unsatisfactory conduct or want of capacity. It was only on July 29
almost two years after Petitioner’s dismissal on August 13, 2001 that his former Department Heads, Engr. Magsino a
Masongsong, submitted an assessment and evaluation report to Mayor Bendaña, which the latter belatedly solicited
Petitioner appealed to the CSC Regional Office. Hence, the circumstances behind Petitioner’s dismissal became que

The OSG also found no evidence at the CSC Regional Office level that Petitioner was informed of his alleged poor pe
There was no evidence that Petitioner was furnished copies of 1) Mayor Bendaña’s letter, dated July 29, 2003, addre
CSC Regional Office praying that Petitioner’s termination be sustained; and 2) the performance evaluation report, da
2003, prepared by Engr. Magsino and Engr. Masongsong. The OSG claimed that Petitioner was denied due process
dismissal took effect a day after he received the notice of termination. No hearing was conducted to give Petitioner th
opportunity to refute the alleged causes of his dismissal. The OSG agreed with Petitioner’s claim that there was insuf
for Mayor Bendaña to determine his fitness or unfitness for the position. 3 [Emphasis supplied]

Thus, the fallo of the CA Decision4 reads:

"WHEREFORE, the petition is Granted. The Civil Service Commission Regional Office No. 4’s Decision, dated July 2
hereby Set Aside. Accordingly, Petitioner is ORDERED REINSTATED with full payment of backwages and other mon
benefits. This case is hereby REMANDED to the Civil Service Commission for reception of such evidence necessary
purposes of determining the amount of backwages and other monetary benefits to which Petitioner is entitled.

SO ORDERED."

THE ISSUES
In this petition, the Civil Service Commission submits the following for our consideration:

"I. The dropping of respondent from the rolls of the local government unit of Lemery, Batangas was in accord with Civ
Law, rules and jurisprudence.

II. The respondent resorted to a wrong mode of appeal and violated the rule on exhaustion of administrative remedies
corollary doctrine of primary jurisdiction."

The principal issue, therefore, is whether or not the termination of Magnaye was in accordance with the pertinent law
rules.

The eligibility of respondent Magnaye has not been put in issue.

THE COURT’S RULING

The Court upholds the decision of the Court of Appeals.

The CSC, in arguing that Magnaye’s termination was in accord with the Civil Service law, cited Section 4(a), Rule II o
CSC Omnibus Rules on Appointments and Other Personnel Actions which provides that:

Sec. 4. Nature of appointment. The nature of appointment shall be as follows:

a. Original – refers to the initial entry into the career service of persons who meet all the requirements of the position.

It is understood that the first six months of the service following an original appointment will be probationary in nature
appointee shall undergo a thorough character investigation. A probationer may be dropped from the service for unsat
conduct or want of capacity anytime before the expiration of the probationary period. Provided that such action is app
the Commission.

However, if no notice of termination for unsatisfactory conduct is given by the appointing authority to the employee be
expiration of the six-month probationary period, the appointment automatically becomes permanent.

Under Civil Service rules, the first six months of service following a permanent appointment shall be probationary in n
the probationer may be dropped from the service for unsatisfactory conduct or want of capacity anytime before the ex
the probationary period. 5

The CSC is of the position that a civil service employee does not enjoy security of tenure during his 6-month probatio
It submits that an employee’s security of tenure starts only after the probationary period. Specifically, it argued that "a
under an original appointment cannot lawfully invoke right to security of tenure until after the expiration of such period
provided that the appointee has not been notified of the termination of service or found unsatisfactory conduct before
expiration of the same."6

The CSC position is contrary to the Constitution and the Civil Service Law itself. Section 3 (2) Article 13 of the Consti
guarantees the rights of all workers not just in terms of self-organization, collective bargaining, peaceful concerted ac
right to strike with qualifications, humane conditions of work and a living wage but also to security of tenure, and Sect
Article IX-B is emphatic in saying that, "no officer or employee of the civil service shall be removed or suspended exc
cause as provided by law."

Consistently, Section 46 (a) of the Civil Service Law provides that "no officer or employee in the Civil Service shall be
or dismissed except for cause as provided by law after due process."

Our Constitution, in using the expressions "all workers" and "no officer or employee," puts no distinction between a pr
and a permanent or regular employee which means that both probationary and permanent employees enjoy security
Probationary employees enjoy security of tenure in the sense that during their probationary employment, they cannot
dismissed except for cause or for failure to qualify as regular employees. This was clearly stressed in the case of Lan
the Philippines v. Rowena Paden, 7 where it was written:

To put the case in its proper perspective, we begin with a discussion on the respondent's right to security of tenure. A
Section 2(3) of the 1987 Constitution expressly provides that

"[n]o officer or employee of the civil service shall be removed or suspended except for cause provided by law." At the
emphasize that the aforementioned constitutional provision does not distinguish between a regular employee and a p
employee. In the recent case of Daza v. Lugo 8 we ruled that:

The Constitution provides that "[N]o officer or employee of the civil service shall be removed or suspended except for
provided by law." Sec. 26, par. 1, Chapter 5, Book V, Title I-A of the Revised Administrative Code of 1987 states:

All such persons (appointees who meet all the requirements of the position) must serve a probationary period of six m
following their original appointment and shall undergo a thorough character investigation in order to acquire permane
service status. A probationer may be dropped from the service for unsatisfactory conduct or want of capacity any time
expiration of the probationary period; Provided, That such action is appealable to the Commission.

Thus, the services of respondent as a probationary employee may only be terminated for a just cause, that is, unsatis
conduct or want of capacity. [Emphasis supplied]

x x x.

X x x the only difference between regular and probationary employees from the perspective of due process is that the
termination can be based on the wider ground of failure to comply with standards made known to them when they be
probationary employees."

The constitutional and statutory guarantee of security of tenure is extended to both those in the career and non-caree
positions, and the cause under which an employee may be removed or suspended must naturally have some relation
character or fitness of the officer or employee, for the discharge of the functions of his office, or expiration of the proje
the employment was extended. 9 Further, well-entrenched is the rule on security of tenure that such an appointment i
the moment the appointee assumes a position in the civil service under a completed appointment, he acquires a lega
equitable right (to the position), which is protected not only by statute, but also by the Constitution [Article IX-B, Sectio
paragraph (3)] and cannot be taken away from him either by revocation of the appointment, or by removal, except for
with previous notice and hearing. 10

While the CSC contends that a probationary employee does not enjoy security of tenure, its Omnibus Rules recogniz
an employee cannot be terminated except for cause. Note that in the Omnibus Rules it cited, 11 a decision or order dro
probationer from the service for unsatisfactory conduct or want of capacity anytime before the expiration of the proba
period "is appealable to the Commission." This can only mean that a probationary employee cannot be fired at will.

Notably, jurisprudence has it that the right to security of tenure is unavailing in certain instances. In Orcullo Jr. v. Civil
Commission,12 it was ruled that the right is not available to those employees whose appointments are contractual and
terminous in nature. Such employment is characterized by "a tenure which is limited to a period specified by law, or th
coterminous with the appointing authority or subject to his pleasure, or which is limited to the duration of a particular p
which purpose employment was made."13 In Amores M.D. v. Civil Service Commission,14 it was held that a civil execu
appointee who meets all the requirements for the position, except only the appropriate civil service eligibility, holds th
temporary capacity and is, thus, not entitled to a security of tenure enjoyed by permanent appointees. 1avvphi1

Clearly, Magnaye’s appointment is entirely different from those situations. From the records, his appointment was nev
classified as co-terminous or contractual. Neither was his eligibility as a Utility Worker I challenged by anyone.

In support of its position that an appointee cannot lawfully invoke the right to a security of tenure during the probation
petitioner CSC banked on the case of Lucero v. Court of Appeals and Philippine National Bank. 15 This case is, howev
applicable because it refers to a private entity where the rules of employment are not exactly similar to those in the go
service.

Mayor Bendaña dismissed Magnaye for lack of capacity and unsatisfactory conduct. Section 26, paragraph 1, Chapte
V, Title I-A of the Revised Administrative Code of 1987 states:

(1) Appointment through certification.—An appointment through certification to a position in the civil service, except a
otherwise provided, shall be issued to a person who has been selected from a list of qualified persons certified by the
Commission from an appropriate register of eligibles, and who meets all the other requirements of the position.

All such persons must serve a probationary period of six months following their original appointment and shall underg
thorough character investigation in order to acquire permanent civil service status. A probationer may be dropped fro
service for unsatisfactory conduct or want of capacity any time before the expiration of the probationary period: Provid
such action is appealable to the Commission.

While unsatisfactory conduct and want of capacity are valid causes that may be invoked for dismissal from the servic
observed that the Memorandum issued by Mayor Bendaña terminating Magnaye’s employment did not specify the ac
constituting his want of capacity and unsatisfactory conduct. It merely stated that the character investigation conducte
probationary period showed that his employment "need not be necessary to be permanent in status." 17 Specifically, th
termination partly reads:

You are hereby notified that your service as Utility Worker I, this municipality under six (6) month probationary period,
considered terminated for unsatisfactory conduct or want of capacity, effective August 14, 2001.

You are further notified that after a thorough character investigation made during your such probationary period unde
administration, your appointment for employment need not be necessary to be automatically permanent in status. 18

This notice indisputably lacks the details of Magnaye’s unsatisfactory conduct or want of capacity. Section VI, 2.2(b) o
Omnibus Guidelines on Appointments and other Personnel Actions (CSC Memorandum Circular No. 38, Series of 19
amended by CSC Memorandum Circular No. 12, Series of 1994), provides:

2.2. Unsatisfactory or Poor Performance

xxx

b. An official who, for one evaluation period, is rated poor in performance, may be dropped from the rolls after due no
notice shall mean that the officer or employee is informed in writing of the status of his performance not later than the
month of that rating period with sufficient warning that failure to improve his performance within the remaining period
semester shall warrant his separation from the service. Such notice shall also contain sufficient information which sha
the employee to prepare an explanation. [Emphasis and underscoring supplied]
Magnaye asserts that no performance evaluation was made between March 2001 when he was hired by Mayor Rosa
August 14, 2001 when his services were terminated by Mayor Bendaña. 19 It was only on July 29, 2003, at Mayor Ben
behest, that his two supervisors prepared and submitted the evaluation report after the CSCRO-IV directed him to file
to Magnaye’s appeal.20

This has not been rebutted. It being not disputed, it was an error on the part of the CSCRO-IV to rely on such belated
performance appraisal. Common sense dictates that the evaluation report, submitted only in 2003, could not have be
for Magnaye’s termination.

Besides, Mayor Bendaña’s own assessment of Magnaye’s performance could not have served as a sufficient basis to
him because said mayor was not his immediate superior and did not have daily contacts with him. Additionally, Mayo
terminated his employment less than one and one-half months after his assumption to office. This is clearly a short pe
which to assess his performance. In the case of Miranda v. Carreon, 21 it was stated:

The 1987 Constitution provides that "no officer or employee of the civil service shall be removed or suspended excep
provided by law." Under the Revised Administrative Code of 1987, a government officer or employee may be remove
service

on two (2) grounds: (1) unsatisfactory conduct and (2) want of capacity. While the Code does not define and delineat
concepts of these two grounds, however, the Civil Service Law (Presidential Decree No. 807, as amended) provides
grounds for dismissing a government officer or employee from the service. Among these grounds are inefficiency and
incompetence in the performance of official duties. In the case at bar, respondents were dismissed on the ground of p
performance. Poor performance falls within the concept of inefficiency and incompetence in the performance of officia
which, as earlier mentioned, are grounds for dismissing a government official or employee from the service.

But inefficiency or incompetence can only be determined after the passage of sufficient time, hence, the proba
period of six (6) months for the respondents. Indeed, to be able to gauge whether a subordinate is inefficient or
incompetent requires enough time on the part of his immediate superior within which to observe his perform
condition, however, was not observed in this case. x x x. [Emphasis and underscoring supplied]

The CSC is the central personnel agency of the government exercising quasi-judicial functions. 22 "In cases filed befor
administrative or quasi-judicial bodies, a fact may be deemed established if it is supported by substantial evidence, o
amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion." 23 The standa
substantial evidence is satisfied when, on the basis of the evidence on record, there is reasonable ground to believe
person terminated was evidently wanting in capacity and had unsatisfactory conduct. In this case, the evidence again
was woefully inadequate.

Moreover, Magnaye was denied due process. We ruled in Tria v. Chairman Patricia Sto. Tomas 24 that the prohibition
(B) (2) (3) of the Constitution against dismissal of a civil service officer or employee "except for cause provided by law
guaranty of both procedural and substantive due process. Procedural due process requires that the dismissal comes
notice and hearing,25 while substantive due process requires that the dismissal be "for cause." 26

Magnaye was denied procedural due process when he received his notice of termination only a day before he was di
from the service. Evidently, he was effectively deprived of the opportunity to defend himself from the charge that he la
capacity to do his work and that his conduct was unsatisfactory. As well, during his appeal to the CSCRO-IV, he was
furnished with the submissions of Mayor Bendaña that he could have opposed. He was also denied substantive due
because he was dismissed from the service without a valid cause for lack of any factual or legal basis for his want of
and unsatisfactory conduct.

Thus, we reject petitioner’s argument that the CA erred when it acted upon the erroneous remedy availed of by respo
he filed a petition for review considering that the assailed decision is not in the nature of "awards, judgments, final ord
resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions" as prescribed u
43 of the Rules of Court. While Sections 71 and 72 of Rule V (B) of the Uniform Rules on Administrative Cases in the

Service 27 provide for the remedy of an appeal from decisions of its regional offices to the Commission proper, Magna
to the CA comes under the exceptions to the doctrine of exhaustion of administrative remedies. The CA correctly cite
v. Lacap,28 where a violation of due process is listed to be among the noted exceptions to the rule. As discussed abov
Magnaye’s dismissal was tainted with irregularity because the notice given to him comes short of the notice contemp
and jurisprudence. The CA correctly exercised jurisdiction over this case where standards of due process had been p
breached.

Having been illegally dismissed, Magnaye should be reinstated to his former position without loss of seniority and pai
backwages and other monetary benefits from the time of his dismissal up to the time of his reinstatement. In our deci
Service Commission v. Gentallan,29 we ruled that for reasons of justice and fairness, an illegally dismissed governme
who is later ordered reinstated is entitled to backwages and other monetary benefits from the time of his illegal dismis
reinstatement because he is considered as not having left his office.

WHEREFORE, the petition is DENIED. The February 20, 2008 Decision of the Court of Appeals and its June 11, 200
Resolution denying the motion for reconsideration in CA-G.R. No. SP No. 85508 are AFFIRMED.

SO ORDERED.

JOSE CATRAL MENDOZA

Associate Justice

WE CONCUR:

REYNATO S. PUNO
Chief Justice

ANTONIO T. CARPIO RENATO C. CORONA

Associate Justice Associate Justice

CONCHITA CARPIO MORALES PRESBITERO J. VELASCO, JR.

Associate Justice Associate Justice

ANTONIO EDUARDO B. NACHURA TERESITA J. LEONARDO-DE CASTRO

Associate Justice Associate Justice

ARTURO D. BRION DIOSDADO M. PERALTA

Associate Justice Associate Justice

LUCAS P. BERSAMIN MARIANO C. DEL CASTILLO

Associate Justice Associate Justice

ROBERTO A. ABAD MARTIN S. VILLARAMA, JR.

Associate Justice Associate Justice
 JOSE PORTUGAL PEREZ
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision
reached in consultation before the case was assigned to the writer of the opinion of the Court.

REYNATO S. PUNO
Chief Justice

Footnotes

1
Under Rule 45 of the Rules of Court.

2
Penned by Associate Justice Noel G. Tijam, concurred in by Justices Martin S. Villarama and Sesinando E. V

3
Rollo, pp. 29-30.

4
Id. at 26-36.

5
Section 4(a), Rule III of CSC Memorandum Circular No. 15, series of 1999.

6
Petition, p. 8; rollo, p. 16.

7
G.R. No. 157607, July 7, 2009.

8
G.R. No. 168999, April 30, 2008, 553 SCRA 532,537-538.

9
Jocom v. Regalado, G.R. No. 77373, August 22, 1991, 201 SCRA 73, 81-82.

10
Aquino v. Civil Service Commission, G. R. No. 92403, April 22, 1992, 208 SCRA 240, 247.

11
Section 4(a), Rule II of the 1998 CSC Omnibus Rules on Appointments and Other Personnel Actions.

12
G.R. No. 138780, May 22, 2001, 358 SCRA 115.

13
Section 9, Revised Administrative Code.

14
G.R. No. 170093 April 29, 2009.

15
G.R. No. 152032, July 3, 2003, 405 SCRA 351.

16
Sec. 26, par. 1, Chapter 5, Book V, Title I-A of the Revised Administrative Code of 1987 states:

All such persons must serve a probationary period of six months following their original appointment and shal
thorough character investigation in order to acquire permanent civil service status. A probationer may be drop
the service for unsatisfactory conduct or want of capacity any time before the expiration of the probationary pe
 Provided, That such action is appealable to the Commission.

17
Rollo, p. 32.

18
Rollo, p. 27.

19
Id. at 28-29.

20
Id. at 33.

21
 G.R. No. 143540, April 11, 2003; 401 SCRA 303 (2003).

22
 Sec. 1, Rule 43 of the Rules of Court.

23
Section 5, Rule 133 of the Rules of Court.

24
G.R. No. 85670, July 31, 1991, 199 SCRA 833.

25
Reyes v. Subido, 66 SCRA 203 (1975).

26
Dario v. Mison, G.R. No. 81954, August 8, 1989, 176 SCRA 84.

27
Section 71. Complaint or Appeal to the Commission.–Other personnel actions, such as but not limited, to se
from the service due to unsatisfactory conduct or want of capacity during the probationary period, dropping fro
due to Absence Without Official Leave (AWOL), physically and mentally unfit and unsatisfactory or poor perfo
action on appointments (disapproval, invalidation, recall and revocation), reassignment, transfer, detail, secon
demotion, or termination from the services, may be brought to the Commission, by way of an appeal.

Section 72. When and Where to File–A decision or ruling of a department or agency may be appealed
fifteen (15) days from receipt thereof by the party adversely affected to the Civil Service Regional Offi
finally, to the Commission proper within the same period.

A motion for reconsideration may be filed with the same office which rendered the decision or ruling w
(15) days from receipt thereof.

28
G.R. No. 158253, March 2, 2007, 517 SCRA 255.

29
G.R. Nos. 152833 & 154961, May 9, 2005, 458 SCRA 278.

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   Constitution

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REPUBLIC ACT No. 5185

AN ACT GRANTING FURTHER AUTONOMOUS POWERS TO LOCAL GOVERNMENTS

Section 1. Short Title. This Act shall be known as the Decentralization Act of 1967.

Section 2. Declaration of Policy. It is hereby declared to be the policy of the State to transform local governments gra
effective instruments through which the people can in a most genuine fashion, govern themselves and work out their
destinies.

It is therefore, the purpose of this Act to grant to local governments greater freedom and ampler means to respond to
of their people and promote their prosperity and happiness and to effect a more equitable and systematic distribution
governmental powers and resources. To this end, local governments henceforth shall be entrusted with the performa
functions that are more properly administered in the local level and shall be granted with as much autonomous power
financial resources as are required in the more effective discharge of these responsibilities.

Section 3. Additional Powers and Functions. The provincial and city governments are hereby empowered to underta
agricultural extension work and rural health work whenever deemed to be necessary by the Provincial and Municipal
City Councils to assist or supplement existing national programs or services in their respective areas of jurisdiction. T
services shall be administered in accordance with the policies and programs formulated by the national offices conce
National Government shall render technical, financial and other assistance to local governments in connection with sa

To enable the provincial and city governments to undertake the aforementioned functions, they shall retain the amoun
heretofore contributed by provincial, city and municipal governments to the National Government for field agricultural
and rural health work, which shall accrue to the general fund of the province.

Provided, That upon the effectivity of this Act, all personnel performing the above services whose salaries are paid ou
amounts contributed by the provincial and municipal governments, shall be absorbed by the provinces or municipaliti
they are regularly or presently assigned: Provided, however, That the personnel heretofore mentioned shall not be la
consequence of the provision of this section, and shall forthwith be subject to civil service law, rules and regulations:
And Provided, further, That in cases of subsequent vacancies the same shall be filled in accordance with the pertinen
applicable provisions of this Act.

As a result of the provisions of this section, the Budget Commissioner shall make the necessary and corresponding a
in the national budget.

Section 4. Appointment of Heads, Assistant Heads of Local Offices and Their Subordinates. The Provincial Assesso
Agriculturist and other heads of offices entirely paid out of provincial funds and their respective assistants shall, subje
service law, rules and regulations, be appointed by the Provincial Governor: Provided, however, That this section sha
to Judges, Auditors, Fiscals, Division Superintendents of Schools, Supervisors, Principals, Provincial Treasurers, Pro
Health Officers and District Engineers.

The City Assessor, City Agriculturist, City Chief of Police and City Chief of Fire Department and other heads of offices
paid out of city funds and their respective assistants or deputies shall, subject to civil service law, rules and regulation
appointed by the City Mayor: Provided, however, That this section shall not apply to Judges, Auditors, Fiscals, City
Superintendents of Schools, Supervisors, Principals, City Treasurers, City Health Officers and City Engineers.

The Municipal Chief of Police and Municipal Attorney and other heads of offices entirely paid out of municipal funds a
respective assistants or deputies shall, subject to civil service law, rules and regulations, be appointed by the Municip
Mayor: Provided, however, That this section shall not apply to Judges and Municipal Treasurers.

In cases of vacancies in the offices of heads and assistant heads of local offices, the governor or mayor shall fill them
appointment from a list of the five next ranking eligible and qualified persons as certified by the Civil Service
Commissioner: Provided, That these five persons shall have stated beforehand that they will assume the position, if a

The ranking shall be based on such factors as class of province, city or municipality where the vacancy occurs, senio
efficiency rating, extraordinary qualifications and other supplementary criteria as may be prescribed by the Civil Servi
Commission.

All other employees, except teachers, paid out of provincial, city or municipal general funds, road and bridge funds, s
and other local funds shall, subject to civil service law, rules and regulations, be appointed by the Provincial Governo
Municipal Mayor upon recommendation of the office head concerned. Such recommendation shall be made within fift
after the existence of a vacancy, otherwise the recommendation of the office head concerned shall be deemed waive

Upon effectivity of this Act, all officials and other employees appointed by the local chief executive shall be paid entire
local funds.

Within thirty days after the existence of a vacancy, provided that funds are available as certified by the provincial, city
municipal treasurer concerned, the local chief executive concerned shall appoint a suitable person to fill such vacanc
case of a chief or assistant chief of a local office, appointments for such vacancies shall be submitted within the same
prescribed above.

The suspension, removal, transfer and other personnel action on the heads of offices and their other employees in pr
cities and municipalities shall be subject to the provisions of civil service law, rules and regulations.

The maximum salary scales for officials and employees authorized under existing law for first class provinces, cities a
municipalities may, subject to the proviso herein, also be applicable to officials and employees of all other lower class
cities and municipalities, subject to availability of funds and observance of civil service law, rules and regulations: Pro
however, That an official or employee can be eligible for the salary scales of the next higher class province, city or mu
after every two years of continuous service.

Section 5. Suspension and Removal of Elective Local Officials. Any provisions of law to the contrary notwithstanding
suspension and removal of elective local officials shall be governed exclusively by the provisions of this section.

The grounds for suspension and removal of elective local officials are the following: (a) disloyalty to the Republic of th
Philippines; (b) dishonesty; (c) oppression; and (d) misconduct in the office.

Written subscribed and sworn charges against any elective provincial and city official shall be preferred before the Pr
the Philippines, against any elective municipal official before the provincial governor or the secretary of the provincial
concerned; and against any elective barrio official before the municipal or city mayor or the municipal or city secretary

Within seven days after the charges are preferred, the President, Governor, or Mayor, as the case may be, or his dul
representative, as provided in the preceding paragraph, shall notify the respondent of such charges. The President, P
Board and City or Municipal Council, as the case may be, shall hear and investigate the truth or falsity of the charges
days after receipt of such notice: Provided, That no investigation shall commence or continue within ninety days imm
prior to an election. The preventive suspension of the respondent officer shall not extend beyond sixty days after the
suspension. At the expiration of sixty days, the suspended officer shall be reinstated in office without prejudice to the
of the proceedings against him until their completion, unless the delay in the decision of the case is due to the fault, n
request of the suspended officer, in which case, the time of delay shall not be counted in computing the time of
suspension: Provided, however, That if the suspended officer shall have been found guilty as charged before the exp
the thirty days, his suspension, in the case of municipal and barrio officials, may continue until the case is finally decid
Provincial Board.

The respondent shall have full opportunity to appear and defend himself in person or by counsel, to confront and cros
the witnesses against him and to require the attendance of witnesses and the production of documentary evidence in
through the compulsory process of subpoena or subpoena duces tecum.

Within thirty days after the end of investigation, the President, Provincial Board, City or Municipal Council, as the case
shall render its decision in writing, stating clearly and distinctly the facts and the reasons for such decision and shall i
furnish copies of the decision to the respondent and all interested parties: Provided, That the penalty of suspension s
exceed the unexpired term of the respondent: Provided, further, That the penalty of suspension or removal shall not b
the candidacy of the respondent so suspended or removed for any elective public office as long as he meets the qua
required for the office: And Provided, finally, That the decision shall not preclude the filing of criminal actions arising f
same charges as provided for under existing laws.

In case of appeals from decisions of suspension or removal, the provisions of existing laws shall continue to be applic

Section 6. Prohibition Against Practice. A member of the Provincial Board or City or Municipal Council shall not appe
counsel before any court in any civil case wherein the province, city or municipality, as the case may be, is the advers
party: Provided, however, That no member of the Provincial Board shall so appear except in behalf of his province in
case wherein any city in the province is the adverse party whose voters are en-franchised to vote for provincial officia
such member of the Provincial Board or City or Municipal Council appear as counsel for the accused in any criminal c
wherein an officer or employee of said province, city or municipality is accused of an offense committed in relation to
office, nor shall he collect any fee for his appearance in any administrative proceedings before provincial, city or mun
agencies of the province, city or municipality, as the case may be, of which he is an elected official.

The provisions of this Section shall likewise apply to provincial governors and city and municipal mayors.

Section 7. Succession to Office of Vice-Governor and Vice-Mayor. In case a vacancy occurs in the office of Vice- Go
Vice-Mayor, the board or council member, as the case may be, who obtained the highest number of votes, or in case
provinces, cities, or municipalities where the provincial, city or municipal board members are elected by districts, the
percentage of total votes cast in the last election, shall succeed to the officer: Provided, however, That such member
the requirements for the position: Provided, further, That in case of a tie, the pertinent provisions of the Revised Elect
shall apply.

Section 8. Filling of Special Vacancies in Local Legislative Bodies. Vacancy occurring in Board or Council as a conse
the preceding Section shall be filled automatically by the Board or council member who obtained the second highest
votes, or if the provincial, city or municipal board members are elected by districts, the second highest percentage of
cast in the last election. Succeeding vacancy or vacancies as a result of such succession shall be filled automatically
members as ranked on the basis of the number of votes or percentage of votes received.

Vacancies occurring in the board or council created through death, resignation, permanent incapacity, removal from o
consequence of the preceding paragraph prior to sixty days of a presidential election shall be filled by special election
with such presidential election. Any person so elected shall be last in the ranking of board or council members. If the
occurs after such period, the President alone, in the case of elective provincial and city officials and the provincial gov
the case of elective municipal officials, shall appoint qualified person belonging to the political party or faction of the o
he is to replace, upon recommendation of the said political party or faction and who shall serve the unexpired term of
office: Provided, That in cities where councilors are elected by district, the qualified person shall come from the same
where the vacancy exists. Such appointment shall be made within fifteen days after the recommendation of the respe
political party or faction has been received. In case of temporary vacancies, the provisions of existing laws shall conti
applicable.

Section 9. Filling of Elective Offices in Newly Created Provinces, Cities, Municipalities or Municipal Districts. Elective
any new province, city, or municipality or municipal district shall be filled by regular or special elections to coincide wi
regular presidential or local election: Provided, That if it is created within thirty days before a regular presidential or lo
election , the said vacancies shall be filled as hereinafter provided in the next succeeding section.

Section 10. Filling of Elective Offices in Newly Classified Provinces, Cities, Municipalities or Municipal Districts. In the
reclassification of provinces, cities or municipalities where additional members of the Provincial Board, and City or Mu
Board or Council are to be appointed, such additional members shall be appointed upon recommendation of the head
Provincial, City or Municipal Chapter of the political party which obtained the largest total number of votes in the prov
municipality, as the case may be, in the last preceding elections for local officials.

Section 11. Actions of Provincial, Municipal and City Officials or Provincial Boards Declared Immediately Effective. 1awphil@alf

I. The following actions of provincial officials or boards and councils, as provided for in the pertinent sections of the R
Administrative Code shall take effect without the need of approval or direction from any official of the national governm

(a) Permission for officials to absent themselves from the province under Section 2073;

(b) Compensation for persons appointed to temporary services under Section 2077;
 (c) Payment of salary accruing pending suspension under Section 2079;

(d) Functions of provincial treasurers, specifically as agent of the Philippine National Bank under Section 2089

(e) Duties of elective members, specifically their performance of ministerial duties under Section 2096;

(f) Minutes of meetings of provincial boards under Section 2100;

(g) Purchase or maintenance of draft animals for breeding purpose under Section 2105 (b);

(h) Powers enumerated in Section 2106, except letters (a) and (f);

(i) Conventions of mayors under Section 2108;

(j) Deposit of surplus funds under Section 2110;

(k) Dis-establishment of the Exhibition Fund under Section 2112;

(l) Providing and maintaining wharves, piers and docks under Section 2113 (b);

(m) Subsidizing or acquiring, operating and maintaining means of water transportation under Sections 2113 (

(n) Expenditures from the Non-Christian Inhabitants' Fund under Section 2114;

(o) Loans from municipal funds for permanent public works and school purposes under Section 2117;

(p) Restriction upon limit of disbursement under Section 2122;

(q) Designation of provincial toll roads, bridges and ferries and fixing their rates under Section 2131;

(r) Collection and application of tolls under Section 2132;

(s) Establishment of a subprovincial treasury under Section 2141;

(t) Settling of municipal boundary disputes within the same province only under Section 2167;

(u) Fixing of salaries of officials in capital of a province under Section 2184;

(v) Additional compensation for treasurer under Section 2186;

(w) Passing by provincial board on legality of municipal proceedings under Section 2233.

II. The following actions by municipal officials or municipal councils, as provided for in the pertinent sections of the Re
Administrative Code shall take effect without the need of approval or direction from any official of the national
government: Provided, That such actions shall be subject to approval or direction by the Provincial Board:

(a) Authority to close thoroughfare under Section 2246;

 (b) Aid to national and provincial charitable institutions under Section 2248;

(c) Appropriations for exhibition purposes under Section 2293;

(d) Letting of municipal ferry, market or slaughterhouse to highest bidder under Section 2319.

III. The provincial, city and municipal budgets shall become effective upon the approval of the same by the respective
boards, city councils or municipal boards of municipalities, if the same were approved in compliance with the provisio
Republic Act Numbered Twenty-two hundred and sixty-four, and for this purpose the provisions of Republic Act Numb
four hundred and seventy-seven inconsistent with the provisions of this section or of Republic Act Numbered Twenty-
hundred and sixty four are hereby repealed or modified accordingly.

All special funds except the road and bridge fund and the public permanent improvement funds to the local go
are hereby abolished and all moneys accruing to the local treasuries by operation of existing laws which are h
classified as local income shall be consolidated into one general fund and shall be available for local purpose
appropriation by the local legislative bodies: Provided, That the appropriations for the operation and maintena
schools, for health and sanitation, and for maintenance, repair and construction of roads and bridges shall no
than the amounts received from tuition fees, municipal aids for health and sanitation purposes and the manuf
allotment and motor vehicle allotment, respectively: Provided, further, That national aids and proceeds from lo
bond issues and other contributions for specific purposes shall be appropriated and spent only for the purpos
the same have been obtained.

IV. The pertinent sections of the charters of cities are hereby amended so as to declare the actions of city officials, or
or councils similar to those actions enumerated above effective without the need of approval or direction from any off
national government.

Section 12. Duties and Powers of Local Chief Executives Not to be Subject to Direction or Review by any National O
following duties and powers of the provincial governors, city mayors, and other local chief executives, where they are
by law shall not be subject to direction or review by any national official:

(a) Initiation of any appropriate criminal action or proceeding to draw the attention of the proper superior office
dereliction of the official or employee involved;

(b) Approval of commutation of vacation, sick and maternity leaves and of trips outside the city or province of
appointed by him, under Section 286 of the Revised Administrative Code;

(c) Authorizing payment of medical attendance, necessary transportation, subsistence, hospital fees of injured
appointed by him and absence in such cases shall not be charged against any leave credit, under Section 69
Revised Administrative Code;

(d) Approval of the commutation of the transportation allowances of chiefs of offices upon authority of the boa
councils as authorized by law; and

(e) Attendance in national conventions or similar meetings of local chief executives as provided by law.

Section 13. Increase in Regular Allotment. The allotment share of provinces and cities as provided for in the penultim
paragraph of Section eight, Commonwealth Act Numbered Five hundred eighty-six, as amended by Republic Act Num
Seven hundred eighty-one, is hereby increased from ten to thirteen per centum and the allotment share of municipali
exclusive of cities as provided for in the same Code is hereby increased from two to four per centum, provisions of ex
to the contrary notwithstanding. The basis of the allotment shall be the collections during the preceding fiscal year, to
distributed among provinces, cities and municipalities as follows: (a) seventy per centum on the basis of population a
the latest official census, and (b) thirty per centum in proportion to the land area.

Section 14. Retention, Release and Adjustment of Regular Internal Revenue Allotment. Within five days after the end
month, the treasury field cashiers to whom all collection agents shall remit all their collections in each province shall r
the internal revenue collections accruing to the General Fund and remit to the Provincial Treasurer an amount equiva
twelfth of the predetermined annual internal revenue regular allotment of the province and municipalities under it, and
treasurer an amount equivalent to one-twelfth of the pre-determined annual internal revenue regular allotment of the
city: Provided, That in provinces where there are no treasury field cashiers, such personnel shall be appointed. In cas
collections are remitted directly to the National Treasurer, as in Manila and suburbs, he shall remit the corresponding
city or provincial treasurer concerned within the same period. The allotment of municipalities within each province sha
distributed by the Provincial Treasurer concerned within five days after receipt thereof.

Within ten days after the end of each month, the city or provincial treasurer shall render a report to the Commissioner
Revenue showing the corresponding amount received by the City or the respective amounts retained by the province
released to the municipalities for the preceding month.

In cases where the monthly collections are not sufficient to cover the regular allotment of a province, city or municipa
corresponding balances shall be released by the Bureau of Internal Revenue within thirty days after the expiration of
quarter to the Provincial Treasurer concerned in case of a province or municipality, and to the city treasurer, in case o
corresponding balance for municipalities shall be released by the Provincial Treasurer concerned within five days afte
thereof.

The Secretary of Finance shall promulgate the rules and regulations for the proper implementation of this section.

Section 15. Apportionment of Income Tax Withheld from Wages. The net proceeds in every fiscal year representing
collection of income tax withheld from wages under Supplement (A) of Title two of the National Internal Revenue Cod
amended by Republic Act Numbered Five hundred ninety, minus the refund thereof authorized in the same fiscal yea
purposes of the excess income tax allotments, be credited equally among municipalities.

Section 16. Release of Share of Provinces, Cities and Municipalities from the Highway Special Fund. Within thirty da
end of every quarter, all shares of provinces, cities and municipalities from the Highway Special Fund, to which they a
under Republic Act Numbered Nine hundred seventeen, shall be released by the Bureau of Public Highways to the re
local treasurers: Provided, That the provinces and cities shall continue to appropriate the counterpart funds and no re
be made unless counterpart funds are provided by the local government where required: Provided, further, That the s
not be used for purposes other than those for which such funds were released: Provided, still further, That no road sh
declared as a national aid road by the provincial board and city or municipal board council unless it shall form part of
integrated national road system: Provided, finally, That the Secretary of Public Works and Communications shall pres
standards in the construction and improvement of road and highway projects.

Section 17. Release of Other Funds. Within ten days after the end of each month, the share of provinces and cities f
gross receipts of sweepstakes, horse races and lotteries, as provided in Republic Act Numbered Eleven hundred sixt
be released to the provincial and city treasurers.

It shall be unlawful for any public officer or employee concerned to withhold, or cause the withholding of any fund app
under this section.

Section 18. Creation of Position of Provincial Engineer and City Public Works Supervisor. To enable the provincial go
to administer directly public works and public highways projects which are financed out of local funds, the positions o
Engineer and City Public Works Supervisor may be created and such officials shall be appointed in such manner as i
for under Section four of this Act: Provided, That the present Public Works District Engineer and Highway District Eng
continue to undertake public works and public highways projects financed out of national funds: And Provided, furthe
functions hitherto performed by the District Engineer or District Highway Engineer, in undertaking public works and pu
highways projects financed out of local funds shall be transferred to local engineer.

Section 19. Creation of positions of Provincial Attorney and City Legal Officer. To enable the provincial and city gove
avail themselves of the full time and trusted services of legal officers, the positions of provincial attorney and city lega
be created and such officials shall be appointed in such manner as is provided for under Section four of this Act. For
the functions hitherto performed by the provincial and city fiscals in serving as legal adviser and legal officer for civil c
province and city shall be transferred to the provincial attorney and city legal officer, respectively.

Section 20. Creation of Municipality or Municipal District. A Municipality or municipal district shall be created and its b
modified only by an Act of Congress. For this purpose, Section sixty-eight of the Revised Administrative Code, as am
hereby repealed.

Section 21. Joint Local Government Reform Commission. There is hereby created a Joint Local Government Reform
Commission to be composed of three Senators, two should be from the majority party and one from the minority party
designated by the President of the Senate; three Congressmen, two should be from the majority party and one from t
party, to be designated by the Speaker of the House of Representatives; and three other members to be appointed b
President of the Philippines. The members shall elect a chairman from among themselves.

The Commission shall have the following duties and responsibilities:

(a) To conduct continuing studies on the appropriate role of local governments as autonomous agencies in th
administration of governmental services; and

(b) To prepare a local government code to consist of a Provincial Government Law, a Municipal Government
Barrio Law and a uniform charter for Chartered Cities to be submitted to Congress.

The Commission shall be assisted by a Technical Staff which shall be headed by an Executive Director and an Assis
Executive Director. All personnel shall be appointed by the Chairman subject to Civil Service Law, rules and regulatio

The amount of two hundred and fifty thousand pesos or such amount thereof as may be necessary is hereby appropr
any fund of the national treasury not otherwise appropriated for the operation of the Commission during the fiscal yea
June thirty, nineteen hundred sixty-eight. Such sums as may be necessary for the operating expenses of the commis
succeeding fiscal years shall be included in the annual general appropriations Act.

Section 22. Penalties. (a) Any public officer committing any act or omission in violation of Sections six, eight, fourtee
seventeen and twenty-three of this Act shall be punished with imprisonment of not less than six months nor more tha
or a fine of not less than one nor more than two thousand pesos or both at the discretion of the Court. (b) Any public
violating any provision of Section four and Section twenty-three of this Act shall be punished with the same penalty pr
above: Provided, That said violation proven in a proper administrative proceeding constitute misconduct in office and
sufficient cause for suspension or dismissal of a public officer even if no criminal prosecution is instituted against him
finally, That he shall also suffer perpetual disqualification to hold any public office.

Section 23. Rights, Benefits and Privileges Maintained. Nothing in this Act, shall be construed as depriving any gove
official or employee of his right to continue to hold office or withdrawing or reducing his benefits and privileges as pro
under existing law.

Implied power of a province, a city or municipality shall be liberally construed in its favor. Any fair and reasonable dou
existence of the power should be interpreted in favor of local government and it shall be presumed to exist. The gene
clause shall be liberally interpreted in case of doubt so as to give more power to local governments in promoting the e
condition, social welfare and material progress of the people in the community.

Section 24. Separability Clause. If, for any reason, any section or provision of this Act shall be held to be unconstitut
invalid, no other section or provision of this Act shall be affected thereby.

Section 25. Repealing Clause. All laws and parts of law, including Republic Act Numbered Forty hundred and ninety
pertinent portions of city charters, which are inconsistent with the provisions of this Act are hereby repealed and/or m
accordingly: Provided, That rights already acquired and existing at the time of its passage shall not in any way be abr
modified or affected: And Provided, further, That nothing herein contained shall be construed as depriving any provin
municipality or municipal district of any power at present enjoyed or already exercised or done by it or as diminishing
autonomy.

Vested rights existing at the time of the promulgation of this law arising out of a contract between a province, city or m
on one hand and a third party on the other, shall be governed by the original terms and provisions of the same, and in
should this Act be interpreted to infringe existing rights.

Section 26. Effectivity. This Act shall take effect upon its approval except Section four which shall take effect on Janu
nineteen hundred sixty-eight, and Sections thirteen, fourteen, fifteen and sixteen which shall take effect on July first, n
hundred sixty-eight.

Approved: September 12, 1967

The Lawphil Project - Arellano Law Foundation