Part 1.

LOCAL GOVERNMENTS
Nature of Local Government Units
1. Under the 1987 Constitution, local governments or local government units (LGUs) or municipal
corporations proper are referred to as “territorial and political subdivisions” (Section 1, Article X, 1987
Constitution).
1.1. An LGU is a public office, a public corporation, and is classified as a municipal
corporation proper.

a. The four elements of an LGU are:

(1) legal creation;
(2) corporate name;
(3) inhabitants; and,
(4) place or territory.

b. They are established for the government of a portion of the State.

c. An LGU can only exercise its powers within its territorial boundary or jurisdiction. Its powers
are intramural. As exceptions, an LGU can exercise its powers outside the subdivision
(extramural) in three occasions; namely, (1) protection of water supply; (2) prevention of
nuisance; and (3) police purposes. Forestlands, although under the management of the DENR,
are not exempt from the territorial application of municipal laws, for local government units
legitimately exercise their powers of government over their defined territorial jurisdiction.
1.2. Local governments are administrative agencies and agencies of Government
distinguished from the National Government, which refers to the entire machinery of the central
government (Sections 2 [4] and [2], 1987 Administrative Code). Under the 1987 Administrative
Code, an “Agency of the Government" refers to any of the various units of the Government,
including a department, bureau, office, instrumentality, or government-owned or controlled
corporations, or a local government or a distinct unit therein.

1.3. Public corporations created by local governments are referred to as quasi-municipal

corporations.

1.4. Local governments are distinguished from quasi-corporations. Quasi-corporations are

created by the State, either by law or by authority of law, for a specific governmental purpose.

a. A government-owned and -controlled corporation (GOCC) must be organized either as a

stock or non-stock corporation.

i. A GOCC is vested by law with a legal personality separate and distinct from those acting
for and in its behalf and, in general, from the people comprising it.
ii. A GOCC created through special charter must meet two conditions, namely: (a) it must
be established for the common good; and (b) it must meet the test of economic viability
(Section 16, Article XII, 1987 Constitution).
Congress shall not, except by general law, provide for the formation, organization, or regulation of
private corporations. Government-owned or controlled corporations may be created or established by
special charters in the interest of the common good and subject to the test of economic viability.
iii.
By definition, three attributes make an entity a GOCC: first, its organization as stock or
non-stock corporation; second, the public character of its function; and third,
government ownership over the same. Possession of all three attributes
is necessary to deem an entity a GOCC.

iv. In order to qualify as a GOCC, a corporation must also, if not more importantly, be
owned by the government.

v. Examples of GOCCs are: GOCCs incorporated under the Corporation Code, subsidiaries
of GOCCs, Government Financial Institutions (GFIs), Water Districts, government
acquired asset corporation.

b. A government instrumentality (GI) is neither a stock nor a nonstock corporation.

i. A GI, which is operationally autonomous, remains part of the National Government

machinery although not integrated with the department framework.

ii. Examples of GIs are: Bangko Sentral ng Pilipinas, Philippine Rice Research Institute,
Laguna Lake Development Authority, Fisheries Development Authority, Bases Conversion
Development Authority, Philippine Ports Authority, Cagayan de Oro Port Authority, San
Fernando Port Authority, Cebu Port Authority, and Philippine National Railways.
c. Exception: The Manila Economic and Cultural Office (MECO) was organized as a non-stock,
non-profit corporation under the Corporation Code, not owned or controlled by the Republic of
the Philippines. The “desire letters” that the President transmits is merely recommendatory and
not binding on the corporation. In order to qualify as a GOCC, a corporation must also, if not
more importantly, be owned by the government. Mere performance of functions with a public
aspect are not by themselves sufficient to consider the MECO a GOCC. From its over-reaching
corporate objectives, its special duty and authority to exercise certain consular functions, up to
the oversight by the executive department over its operations—all the while maintaining its
legal status as a non-governmental entity—the Manila Economic and Cultural Office is, for all
intents and purposes, sui generis.

2. The character of LGs is two-fold, i.e., governmental or public, and proprietary or private.

2.1. Governmental powers are those exercised in administering the powers of the state and
promoting the public welfare and they include the legislative, judicial, public and political. Examples
are: delivery of sand for a municipal road, local legislation, control over police and abatement of
nuisance.

2.2. Proprietary powers, on the other hand, are exercised for the special benefit and advantage of the
community and include those which are ministerial, private and corporate. Examples are: public
cemeteries, markets, ferries and waterworks.
 2.3. Therefore, the purpose of LGs is also two-fold, i.e., LGs are agents of the State in the exercise of
government or public powers, and are agents of the community and people in the exercise of
proprietary or private powers.

3. The rule on corporate succession applies to local governments.

3.1. They have the power of continuous succession under their corporate name.

3.2. When there is a perfected contract executed by the former Governor, the succeeding Governor
cannot revoke or renounce the same without the consent of the other party.

4. Congress in enacting the 1991 LGC and charters of particular LGs allocates among the different LGs
their powers, responsibilities, and resources and provides for the qualifications, election, appointment
and removal, term, salaries, powers and functions and duties of local officials, and all other matters
relating to the organization and operation of the local units (Section 3, Article X, 1987 Constitution).

Congress shall enact a local government code which shall provide for a more responsive and
accountable local government structure instituted through a system of decentralization with effective
mechanisms of recall, initiative, and referendum, allocate among the different local government units
their powers, responsibilities, and resources, and provide for the qualifications, election, appointment
and removal, term, salaries, powers and functions and duties of local officials, and all other matters
relating to the organization and operation of the local units.

4.1. One such power is the power to appoint officials. While the Governor has the authority to
appoint officials and employees whose salaries are paid out of the provincial funds, this does not
extend to the officials and employees of the sangguniang panlalawigan because such authority is
lodged with the Vice-Governor.

4.2. The authority to appoint casual and job order employees of the sangguniang panlalawigan
belongs to the Vice-Governor. The authority of the Vice-Governor to appoint the officials and
employees of the sangguniang panlalawigan is anchored on the fact that the salaries of these
employees are derived from the appropriation specifically for said local legislative body. Accordingly,
the appointing power of the Vice-Governor is limited to those employees of the sangguniang
panlalawigan, as well as those of the Office of the ViceGovernor, whose salaries are paid out of the
funds appropriated for the sangguniang panlalawigan.

4.3. In allocating local powers, Congress may provide for a system of checks and balances.
a. The system of checks and balances under the current system is statutorily, not
constitutionally (unlike the three branches of National Government), prescribed.

b. Under the 1983 Local Government Code, the local chief executive performed dual functions –
executive and legislative, he/she being the presiding officer of the sanggunian. Under the
1991 LGC, the union of legislative and executive powers in the office of the local chief
executive has been disbanded, so that either department now comprises different and non-
intermingling official personalities with the end in view of ensuring better delivery of public
service and provide a system of check and balance between the two.
 4.4. With the twin criteria of standard and plebiscite satisfied, the delegation to LGUs of the power to
create, divide, merge, abolish or substantially alter boundaries has become a recognized exception to
the doctrine of non-delegation of legislative powers. The source of the delegation of power to the
LGUs under Sec. 6 of the LGC and to the President under Sec. 453 of the same code is none other
than Sec. 10, Art. X of the Constitution. Conversion to a highly-urbanized city is substantial alteration
of boundaries governed by Sec. 10, Art. X and resultantly, said provision applies, governs and prevails
over Sec. 453 of the LGC.

Types of Local Government Units

1. There are five levels/ kinds of political and territorial subdivisions, namely: (1) Autonomous
Regions; (2) Provinces; (3) Cities; (4) Municipalities; and (5) Barangays (Section 1, Article X, 1987
Constitution).

The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities,
municipalities, and barangays. There shall be autonomous regions in Muslim Mindanao and the
Cordilleras as hereinafter provided.

1.1. The Constitution identifies two Autonomous Regions, i.e., Muslim Mindanao and Cordilleras
(Section 15, Article X, 1987 Constitution) that Congress may incorporate.

There 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 the national sovereignty as well as territorial integrity of the
Republic of the Philippines.
a. Autonomous Regions consist of provinces, cities, municipalities, and geographical areas which
share common and distinctive historical and cultural heritage, economic and social structures,
and other relevant characteristics (Section 15, Article X, 1987 Constitution).

b. Autonomous Regions are under the general supervision of the President (Section 16, Article X,
1987 Constitution).

The President shall exercise general supervision over autonomous regions to ensure that the laws are
faithfully executed.

c. Section 20, Article X of the 1987 Constitution enumerates the irreducible legislative powers of
autonomous regions.
Within its territorial jurisdiction and subject to the provisions of this Constitution and national laws, the
organic act of autonomous regions shall provide for legislative powers over: (1) Administrative
organization; (2) Creation of sources of revenues; (3) Ancestral domain and natural resources; (4)
Personal, family, and property relations; (5) Regional urban and rural planning development; (6)
Economic, social, and tourism development; (7) Educational policies; (8) Preservation and development
of the cultural heritage; and (9) Such other matters as may be authorized by law for the promotion of
the general welfare of the people of the region.
 d. Regional peace and order, and defense and security shall be the responsibility of the local police
agencies and the National Government respectively (Section 21, Article X, 1987 Constitution).
The preservation of peace and order within the regions shall be the responsibility of the local police
agencies which shall be organized, maintained, supervised, and utilized in accordance with applicable
laws. The defense and security of the regions shall be the responsibility of the National Government.

e. Whatever power or authority is not vested on the autonomous regions remains with the
National Government (Section 17, Article X, 1987 Constitution). Residual regional powers lie
with the National Government.
All powers, functions, and responsibilities not granted by the Constitution or by law to the autonomous
regions shall be vested in the National Government.
f. Republic Act No. 6734 or the Organic Act of the Autonomous Region of Muslim Mindanao
(ARMM) is constitutional and is not violative of the Tripoli Agreement since the former is a later
enactment. Further, the Tripoli Agreement must conform with national laws such as the Organic
Act.

g. The single plebiscite contemplated by the Constitution and R.A. No. 6734 will be determinative
of: (1) whether there shall be an autonomous region in Muslim Mindanao; and (2) which
provinces and cities, among those enumerated in R.A. No. 6734, shall comprise it.

h. While they are classified as statutes, the Organic Acts are more than ordinary statutes because
they enjoy affirmation by a plebiscite. Hence, the provisions thereof cannot be amended by an
ordinary statute without being approved in a plebiscite.

i. Exempt from devolution, even to the ARMM, are nationallyfunded projects, facilities, programs
and services.

j. An act of the Regional Assembly of ARMM cannot amend the Organic Act nor can it amend the
1991 LGC. The 1991 LGC and the 1987 Administrative Code cannot amend the Organic Act.

k. The Autonomous Region of the Cordilleras has not been incorporated since in the plebiscite
held, the creation has been rejected by all the covered provinces and city, save one province.
There can be no autonomous region consisting of only one province.

l. However, the President can create the Cordillera Administrative Region (CAR). The Executive
Order does not create the autonomous region for the Cordilleras. The CAR: (1) is not a territorial
and political subdivision; (2) is not a public corporation; (3) does not have a separate juridical
personality; (4) is subject to control and supervision of the President; and (5) is merely a regional
consultative and coordinative council.
1.2. There are three sub-types of cities, namely: (1) highly-urbanized (HUC); (2) independent cities;
and (3) component cities (CC).
a. The highly-urbanized cities and independent component cities are not under the supervision of
provinces and their voters are not qualified to vote for provincial officials (Section 12, Article X,
 1987 Constitution; Section 29, 1991 LGC). These cities are under the direct supervision of the
President (Section 25, 1991 LGC) and are independent of provinces.
a.1. An HUC is not subject to provincial oversight because the complex and varied problems in
an HUC due to a bigger population and greater economic activity require greater autonomy. The
provincial government stands to lose the power to ensure that the local government officials act
within the scope of its prescribed powers and functions, to review executive orders issued by
the city mayor, and to approve resolutions and ordinances enacted by the city council. The
province will also be divested of jurisdiction over disciplinary cases concerning the elected city
officials of the new HUC, and the appeal process for administrative case decisions against
barangay officials of the city will also be modified accordingly. Likewise, the registered voters of
the city will no longer be entitled to vote for and be voted upon as provincial officials.
b. Component cities are under the supervision of provinces and their voters elect provincial
officials (Section 12, Article X, 1987 Constitution).
Cities that are highly urbanized, as determined by law, and component cities whose charters prohibit
their voters from voting for provincial elective officials, shall be independent of the province. The voters
of component cities within a province, whose charters contain no such prohibition, shall not be deprived
of their right to vote for elective provincial officials.

Creation of Local Government Units

1. Only Congress and, by authority of law, local legislative councils, can create specific LGs. Creation is
a legislative act. The enabling law is referred to as the charter of the LGU.
1.1. The President or the Executive Branch of Government has no power to create local
governments.

a. Municipalities created by executive fiat but whose existence were not judicially nullified and
which continue to operate and exist after 1992 are considered regular municipalities. The 1991
LGC is thus a curative legislation. If judicially annulled in a quo warranto case, the 1991 LGC will
have no curative effect (Section 442[d], 1991 LGC).

b. An LGU created by executive fiat which operated or functioned without interruption for a
considerable length of time is considered a municipality by prescription.
1.2. Congress can provide for the incorporation of Autonomous Regions identified under the 1987
Constitution. It has no power to create other Autonomous Regions other than in Muslim Mindanao
and Cordilleras.
a. The Organic Act shall define the basic structure of government for the region consisting of the
executive department and legislative assembly, both of which shall be elective and
representative of the constituent political units. The organic acts shall likewise provide for
special courts with personal, family, and property law jurisdiction consistent with the provisions
of this Constitution and national laws (Section 18, Article X, 1987 Constitution).
b. The creation of the autonomous region shall be effective when approved by majority of the
votes cast by the constituent units in a plebiscite called for the purpose, provided that only
provinces, cities, and geographic areas voting favorably in such plebiscite shall be included in the
autonomous region (Section 18, Article X, 1987 Constitution).
The Congress shall enact an organic act for each autonomous region with the assistance and
participation of the regional consultative commission composed of representatives appointed by the
President from a list of nominees from multi-sectoral bodies. The organic act shall define the basic
structure of government for the region consisting of the executive department and legislative assembly,
both of which shall be elective and representative of the constituent political units. The organic acts
shall likewise provide for special courts with personal, family, and property law jurisdiction consistent
with the provisions of this Constitution and national laws.

The creation of the autonomous region shall be effective when approved by majority of the votes cast
by the constituent units in a plebiscite called for the purpose, provided that only provinces, cities, and
geographic areas voting favorably in such plebiscite shall be included in the autonomous region.
c. The 1987 Constitution (Section 19, Article X) sets a timeframe for the passage of the organic acts
for the two identified autonomous regions.
The first Congress elected under this Constitution shall, within eighteen months from the time of
organization of both Houses, pass the organic acts for the autonomous regions in Muslim Mindanao and
the Cordilleras.
d. The President cannot create a “state”; i.e., Bangsamoro Juridical Entity established under a
Memorandum of Agreement, whose relationship with the government is characterized by
shared authority and responsibility. It is a state in all but name as it meets the criteria of
statehood: (1) a permanent population; (2) a defined territory; (3) a government; and (4) a
capacity to enter into relations with other states.

e. While the power to merge administrative regions is not provided for expressly in the
Constitution, it is a power which has traditionally been lodged with the President to facilitate the
exercise of the power of general supervision over local governments. The power to transfer a
regional center is also an executive function. This power of supervision is found in the
Constitution as well as in the Local Government Code of 1991.
1.3. Congress can create provinces, cities, municipalities and barangays subject to the criteria
specified under the 1991 LGC (Section 10, Article X, 1987 Constitution) and special laws such as
Republic Act No. 9009 which pertains to the conversion of municipalities to component cities.
No province, city, municipality, or barangay 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 approval by a majority of the votes cast in a plebiscite in the political units directly
affected.
a. Congress, by special law, can provide for different requirements other than those specified in
the 1991 LGC.

b. The implementing rules and regulations cannot provide different requirements other than what
is provided by law. Exemption by administrative regulation from land requirement when the
province to be created is composed of one or more islands is invalid.

c. The sangguniang panlalawigan and sangguniang panlungsod can create barangays (Section 6,
1991 LGC). The sangguniang bayan has no such authority under the 1991 LGC.
1.4. An LGU is deemed created on the day its charter takes effect.
 a. It is deemed incorporated on the day the charter is approved by a majority of the votes cast in a
plebiscite in the political units directly affected (Section 10, Article X, 1987 Constitution; Section
10, 1991 LGC).

i. When a municipality is split into two, all the barangays of the original municipality must
vote. The plebiscite electorate includes those who will be economically dislocated and based
on plurality of units.

ii. A plebiscite is required when a municipality is converted into an independent component

city and when the latter is later converted to a component city as there was an “upgrade”
and “downgrade” particularly insofar as taxes and supervision are concerned (Miranda vs.
Aguirre, G.R. No. 133064, September 16, 1999).

iii. A boundary dispute presents a prejudicial question to a plebiscite and thus must be resolved
prior to the conduct of any plebiscite.

iv. The Commission on Elections, not the regular courts, has jurisdiction over plebiscite protest
cases.

b. The corporate existence of an LGU shall commence upon the election and qualification of its
chief executive and a majority of the members of its sanggunian, unless some other time is fixed
therefor by the law or ordinance creating it (Section 14, 1991 LGC).

2. The requirements for creation of local governments are: (1) population; (2) income; and (3) land
area.

2.1. Under the 1991 LGC, these are specific requirements for every type or level of LGU
(Sections 461, 450, 442, 386, 1991 LGC):

2.2. For purposes of creation, only the land area is material. The law is clear.

a.The aggregate territory which includes waters is not the criteria for creation under the 1991 LGC
(Section 131 [r]).
 b. A charter states the boundaries of the local government. Areas or barangays not mentioned are
excluded.

2.3. A charter need not mention the population census.

2.4. Failure to state the seat of government in the charter is not fatal.

2.5. Income under the 1991 LGC pertains to all funds of the LGU including the Internal
Revenue Allotment. However, under R.A. 9009 which deals with the conversion of a municipality
to a component city, the funds must be internally-generated.

2.6. The requirements for the creation of a component city and an independent component
city are the same.

2.7. Depending on the type of LGU created, the presence of all the requirements of
Population (P), Land Area (LA) and Income (Y) may vary (Sections 461, 450, 442, 386, 1991 LGC):

Barangay P and LA Municipality P and LA and Y

City P and Y, or Y and LA HUC P and Y
Province P and Y, or Y and LA
3. When a municipality is converted to a city, the latter acquires a distinct legal personality from the
former. There is material change in the political and economic rights of the two LGs. An
examination of charters of LGUs would however reveal that municipal ordinances, debts, assets
and properties are transferred to and absorbed by the city.

Part 2. LOCAL AUTONOMY

Unitary, not Federal, Form

1. The form of LGU bureaucracy is unitary, not federal. Political history, the fact that there is no
mention of federal form of government in the Constitution, jurisprudence, reference to subdivisions
and not states in the Constitution where LGUs have no claim against the State, and the supervisory
authority of the President over LGUs establishes the current unitary form of government.
1.1. LGs as political and territorial subdivisions are units of the State. Being so, any form of
autonomy granted to LGs will necessarily be limited and confined within the extent allowed by
the central authority.

1.2. LGs are not sovereign units within the State. They are not empires within an empire.

1.3. Autonomy does not contemplate making mini-states out of LGs. In the words of
Jefferson, “Municipal corporations are the small republics from which the great one derives its
strength”.
 1.4. The 1987 Constitution does not contemplate any state in this jurisdiction other than the
Philippine State, much less does it provide for a transitory status that aims to prepare any part
of Philippine territory for independence.

1.5. 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.

1.6. Local autonomy granted to LGUs does not completely sever them from the national
government or turn them into impenetrable states. Autonomy does not make local
governments sovereign within the state. Thus, notwithstanding the local fiscal autonomy being
enjoyed by LGUs, they are still under the supervision of the President and may be held
accountable for malfeasance or violations of existing laws.

Local Autonomy
1. All LGUs enjoy local autonomy. This is a constitutional right (Section 2, Article X, 1987 Constitution)
which cannot be taken away save in a constitutional revision.

The territorial and political subdivisions shall enjoy local autonomy.

1.1. This right is anchored on a constitutional state policy (Section 25, Article II, 1987
Constitution).
The State shall ensure the autonomy of local governments.
1.2. This policy is mirrored in the 1991 LGC [Section 2(a)]. This statute provides that, “It is
hereby declared the policy of the State that the territorial and political subdivisions of the State
shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest
development as self-reliant communities and make them more effective partners in the
attainment of national goals. Toward this end, the State shall provide for a more responsive and
accountable local government structure instituted through a system of decentralization
whereby local government units shall be given more powers, authority, responsibilities, and
resources. The process of decentralization shall proceed from the national government to the
local government units.
2. Local autonomy means a more responsive and accountable local government structure instituted
through a system of decentralization (Section 3, Article X, 1987 Constitution; Section 2[a], 1991 LGC).

2.1. Under a unitary set-up, local autonomy does not mean absolute self-governance, self-rule or
self-determination. Local autonomy may mean qualified or limited yet broad governance. LGs
cannot exercise a power contrary to the 1987 Constitution, the 1991 LGC, statutes, and their
respective charters.

2.2. Autonomy is not meant to end the relation of partnership and interdependence between the
central administration and LGUs, or otherwise, to usher in a regime of federalism.
 2.3. Local autonomy is intended to provide the needed impetus and encouragement to the
development of local political subdivisions as self-reliant communities.

2.4. Local autonomy also grants local governments the power to streamline and reorganize. This
power is inferred from Section 76 of the Local Government Code on organizational structure and
staffing pattern, and Section 16 otherwise known as the general welfare clause. Local autonomy
allows an interpretation of Secs. 76 and 16 of the LGC as granting a city the authority to create its
organization development program.

2.5. Local autonomy, which is protected by the Constitution, is intended to provide the needed
impetus and encouragement to the development of local political subdivisions as "self-reliant
communities.” This objective could be blunted by undue interference by the national government
in purely local affairs which are best resolved by the officials and inhabitants of such political units.

2.5.1. Legislators, who are national officers, who intervene in affairs of purely local nature
through the “Pork Barrel” system, despite the existence of capable local institutions such as
local legislative councils and local development councils, subvert genuine local autonomy.

2.6. There shall be a continuing mechanism to enhance local autonomy not only by legislative
enabling acts but also by administrative and organizational reforms (Section 3[h], 1991 LGC).

3. There are two levels of decentralization. Local autonomy is either decentralization of

administration or decentralization of power.

3.1. There is decentralization of administration when the central government delegates

administrative powers to political subdivisions in order to broaden the base of government power
and in the process to make local governments more responsive and accountable, and ensure their
fullest development as self-reliant communities and make them more effective partners in the
pursuit of national development and social progress.

3.2. Decentralization of power, on the other hand, involves an abdication of political power in favor
of local government units declared to be autonomous. The autonomous government is free to chart
its own destiny and shape its future with minimum intervention from central authorities.
 3.3. The constitutional guarantee of local autonomy in the Constitution Art. X, Sec. 2 refers to the
administrative autonomy of local government units or, cast in more technical language, the
decentralization of government authority. It does not make local governments sovereign within the
State. Administrative autonomy may involve devolution of powers, but subject to limitations like
following national policies or standards, and those provided by the Local Government Code, as the
structuring of local governments and the allocation of powers, responsibilities, and resources among
the different local government units and local officials have been placed by the Constitution in the
hands of Congress under Section 3, Article X of the Constitution.

4. The ARMM enjoys political autonomy. The creation of autonomous regions contemplates the grant
of political autonomy i.e., an autonomy which is greater than the administrative autonomy granted to
(other) LGs.

4.1. Regional autonomy is the degree of self-determination exercised by the LGU vis-à-vis the central
government. 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.

4.2 The aim of the 1987 Constitution is to extend to the autonomous peoples, the people of Muslim
Mindanao in this case, the right to self-determination, i.e., a right to choose their own path of
development; the right to determine the political, cultural and economic content of their
development path within the framework of the sovereignty and territorial integrity of the Philippine
Republic.

5. The Executive Department violates local autonomy when it ignores the statutory authority of
province to nominate budget officials.
6. The essence of the express reservation of power by the national government in Sec. 17 of the LGC is
that, unless an LGU is particularly designated as the implementing agency, it has no power over a
program for which funding has been provided by the national government under the annual general
appropriations act, even if the program involves the delivery of basic services within the jurisdiction of
the LGU. A complete relinquishment of central government powers on the matter of providing basic
facilities and services cannot be implied as the Local Government Code itself weighs against it. Local
autonomy is not absolute. The national government still has the say when it comes to national priority
programs which the local government is called upon to implement. There is no undue encroachment
by the national government upon the autonomy enjoyed by the local governments if the wording of
the law is not mandatory for the LGUs.
7. Where a law is capable of two interpretations, one in favor of centralized power and the other
beneficial to local autonomy, the scales must be weighed in favor of autonomy.

8. Consistent with the declared policy to provide local government units genuine and meaningful local
autonomy, contiguity and minimum land area requirements for prospective local government units
should be liberally construed in order to achieve the desired results.

9. LGUs have broad powers in the following areas:

(1) Police Power;
(2) Power of Taxation;
(3) Power to Impose Fees and Charges;
(4) Sources of Local Revenues;
(5) Corporate Powers; and,
(6) Local Legislation. The 1991 LGC in these areas does not provide an exclusive listing of
powers.

It may be said that LGUs have residual powers. This is consistent with the liberal view of autonomy
which provides that LGUs can exercise:

(1) those powers expressly given to them;

(2) those powers implied from the express powers;
(3) those powers not given to the National Government or any governmental agency or
instrumentality by law;
(4) those powers not prohibited or forbidden by the Constitution and statutes;
(5) provided the powers are necessary for the carrying out of the mandates and duties
entrusted to LGUs with the end in view of promoting the general welfare in response to
local concerns and as agents of the communities.

10. Because of local autonomy, the mandate to protect the general welfare, and concept of
subordinate legislation, LGUs:

a. Can prohibit an activity that is not prohibited by statute;

b. Cannot allow or regulate an activity that is prohibited by statute;
c. Can regulate an activity not regulated by statute; and
d. Can regulate an activity that is regulated by statute provided, the ordinance is not
inconsistent with the statute.

Devolution and Deconcentration

1. Devolution refers to the act by which the national government confers power and authority upon
the various LGs to perform specific functions and responsibilities (Section 17[e], 1991 LGC). The
national government shall, six (6) months after the effectivity of the 1991 LGC, effect the
deconcentration of requisite authority and power to the appropriate regional offices or field offices of
national agencies or offices whose major functions are not devolved to LGUs (Section 528, 1991 LGC).
1.1. The power to regulate and responsibility to deliver basic services are the functions
devolved to LGs. Examples are (Section 17[e], 1991 LGC):
 1.2. Devolution shall also include the transfer to LGUs of the records, equipment, and other assets
and personnel of national agencies and offices corresponding to the devolved powers, functions,
and responsibilities (Section 17 [l], 1991 LGC). Devolved personnel (former employees of the
national government) may be reappointed by the city mayor. Thus, the four components of
devolution are: transfer of authority to deliver basic services, regulatory powers, assets and
personnel.

2. Devolution is a legislative act. As to what state powers should be decentralized and what may be
delegated to LGs remains a matter of policy, which concerns wisdom. It is therefore a political
question. Any provision on a power of an LGU shall be liberally interpreted in its favor, and in case of
doubt, any question thereon shall be resolved in favor of devolution of powers (Section 5 [a], 1991
LGC).

3. There are two levels of decentralization, i.e., administrative decentralization or deconcentration,

and political decentralization or devolution.
4. Devolution entails the transfer of powers from national government agencies (transferor; source of
power) to LGs (transferee; recipient of powers). Powers not devolved are retained by or remain with
the relevant national government agency.

4.1. The regulatory functions of the National Pollution Control Commission were devolved to
LGs. Pursuant to such devolution, LGs may conduct inspections at reasonable times, without doing
damage, after due notice to the owners of buildings, to ascertain compliance with noise
standards under the laws and order compliance therewith, or suspend or cancel any building
permits or clearance certificates after due hearing.

4.2. The power to issue permits and locational clearances for locally significant projects is now
lodged with cities and municipalities with comprehensive land use plans. The power of the
Housing Land Use Regulatory Board (HLURB) to issue locational clearance is now limited to
projects considered to be of vital and national or regional economic or environmental
significance. The power to act as appellate body over decisions and actions of local and regional
planning and zoning bodies and deputized officials of the board was retained by the HLURB.
4.3. Cities now have the power to regulate the operation of tricycles-for-hire and to grant
franchises for the operation thereof. The devolved power pertains to the franchising and
regulatory powers exercised by the Land Transportation Franchising and Regulatory Board
(LTFRB) and not its function to grant franchises to other vehicles, and not the functions of the
Land Transportation Office relative to the registration of motor vehicles and issuances of
licenses for the driving thereof.

4.4. The Department of Environment and Natural Resources retains the power to confiscate and
forfeit any conveyances utilized in violation of the Forestry Code or other forest laws, rules and
regulations.

4.5. The authority to grant franchises for the operation of jai-alai frontons lies with Congress,
while the regulatory function is vested with the Games and Amusement Board.

4.6. Exempt from devolution, even to the ARMM, are nationally-funded projects, facilities,
programs and services. The plenary power of Congress cannot be restricted on matters of
common interest.

Executive Supervision
1. The State shall ensure the autonomy of local governments (Section 25, Article II, 1987 Constitution).

2. The 1987 Constitution defines and prescribes the relationship between the President and the
Executive Branch, and local governments. The relationship is one of supervision, not control.

The President of the Philippines shall exercise general supervision over local governments. Provinces
with respect to component cities and municipalities, and cities and municipalities with respect to
component barangays shall ensure that the acts of their component units are within the scope of their
prescribed powers and functions.
 2.1. The President exercises direct supervision over autonomous regions, provinces outside
autonomous regions, highly-urbanized cities, and independent component cities.

2.2. The President exercises general or indirect supervision over provinces within autonomous
regions, component cities and municipalities, and barangays.

2.3. Provinces exercise direct supervision over component cities and municipalities, and indirect
supervision over barangays.

2.4. Cities and municipalities exercise direct supervision over barangays.

To illustrate, the President can suspend an erring provincial governor (outside AR) but has no authority
to suspend an erring barangay official. The provincial governor can suspend an erring mayor of a
component city/ municipality but cannot suspend an erring barangay official.

3. The President or the “higher” local government has no power of control over LGs and “lower” LGs,
respectively.
3.1. Control is the power of an officer to alter or modify or set aside what a subordinate officer
had done in the performance of his/her duties and to substitute the judgment of the former for
the latter. An officer in control lays down the rules in the doing of an act. It they are not
followed, he/she may, in his/her discretion, order the act undone or re-done by his/her
subordinate or he/she may even decide to do it himself/herself.

3.2. Supervision is the power of a superior officer to see to it that lower officers perform their
functions in accordance with law. The supervisor or superintendent merely sees to it that the
rules are followed, but he/she himself/herself does not lay down such rules, nor does he/she have the
discretion to modify or replace them. If the rules are not observed, he/she may order the work
done or re-done but only to conform to the prescribed rules. He/she may not prescribe his/her
own manner for the doing of the act. He/she has no judgment on this matter except to see to it
that the rules are followed.

4. Supervision involves the power to review of executive orders and ordinances, i.e., declare them
ultra vires or illegal (Sections 30, 56 and 57, 1991 LGC); the power to discipline (Section 61, 1991 LGC);
the power to integrate development plans and zoning ordinances (Sections 447, 458 and 467, 1991
LGC); the power to resolve boundary disputes (Section 118, 1991 LGC); the power to approve leaves
(Section 47, 1991 LGC), accept resignations (Section 82, 1991 LGC) and fill-up vacancies in the
sanggunian (Section 44, 1991 LGC); and the power to augment basic services (Section 17, 1991 LGC).

5. An LGU can:

5.1. Grant and release the disbursement for the hospitalization and health care insurance
benefits of provincial officials and employees without any prior approval from the President
since there is no law requiring prior approval. Further, Administrative Order No. 103 does not cover
local governments.

5.2. Provide allowances to judges, subject to availability of local funds. The Department of
Budget of Management cannot impose a cap on the allowance since there is no law which limits the
amount, otherwise, this will amount to control.
5.3. Provide for additional allowances and other benefits to national government officials
stationed or assigned to a municipality or city, provided that the grant of benefits does not run
in conflict with other statutes.

5.4. Enact tax ordinances, subject to review by the Secretary of Justice, to ascertain the
constitutionality or legality thereof. The Secretary however, has no the right to declare the tax
measure unjust, excessive, oppressive or confiscatory, or direct the substitution of provisions
since this will amount to control.

5.5. Expropriate agricultural land without securing approval from the Department of Agrarian
Reform (DAR) since there is no law which requires this. DAR’s authority is confined to the
conversion of agricultural lands.

5.6. Reclassify lands from residential to non-agricultural lands without DAR approval as there is
no law mandating such approval.

5.7. Elect representatives to the National Liga ng mga Barangay. The Department of Interior and
Local Government (DILG) cannot appoint an interim caretaker to manage and administer the
affairs of the Liga as this would violate local autonomy.

5.8. Privatize the administration of parking for environmental and peace and safety reasons,
both of which are within its powers under Sec. 458(A)(5)(v) and (vi) of the LGC. By delegating
governmental functions in terms of regulating the designation and use of parking spaces, as well
as the collection of fees for such use, the privatization contract takes the essential character of a
franchise because what is being privatized is a government-monopolized function.

5.9. Grant and release hospitalization and health care insurance benefits to its officials and
employees who were sickly and unproductive due to health reasons. This criterion negates the
position that the benefits provide for supplementary retirement benefits that augment existing
retirement laws. Local autonomy allows an interpretation of Sections 76 and 16 as granting
petitioner city the authority to create its organization development program.

6. However, an LGU cannot:

 6.1. Go beyond the requirements set forth in the Cockfighting Law despite the fact that
cockfighting is a devolved power. Further, the Cockfighting Law has not been repealed.

6.2. Authorize the city administrator to act on violations of the National Building Code since
under the law, only the city engineer, as the building official, has the exclusive authority to act on
matters relating to the issuance of demolition permits or the revocation or suspension thereof.
It is the Building Official, and not the City Mayor, who has the authority to order the demolition of
the structures under the National Building Code of the Philippines. Moreover, before a structure
may be abated or demolished, there must first be a finding or declaration by the Building Official
that the building/structure is a nuisance, ruinous or dangerous.

6.3. Regulate the subscriber rates charged by Cable Television operators within its territorial
jurisdiction since this power is vested with the National Telecommunications Commission (NTC)
to the exclusion of other bodies.

6.4. In the absence of constitutional or legislative authorization, grant franchises to cable

television operators as this power has been delegated to the NTC.

7. Insofar as the President, Executive Branch, National Government Agencies and Quasi-Corporations
are concerned:

7.1. The President has the power to discipline erring local elective officials. The power to
discipline is not incompatible with supervision. Supervision and investigation are not inconsistent
terms. Investigation does not signify control, a power which the President does not have.

7.2. The Philippine Amusement and Gaming Corporation (PAGCOR) then can set up casinos even
without the approval of the LGs as the charter of PAGCOR empowers it to centralize gambling.

7.3. The Laguna Lake Development Authority (LLDA), pursuant to its charter, can order the
dismantling of fish pens. Laguna de Bay therefore cannot be subjected to fragmented concepts
of management policies where lakeshore LGs exercise exclusive dominion over specific portions of
the lake water.

7.4. The LLDA, pursuant to its mandate, can issue cease and desist orders against LGs to stop the
dumping of its garbage in an open dumpsite.

8. In resolving conflicts between the National Government Agencies (NGAs), government-owned and -
controlled corporations (GOCCs), and government instrumentalities (GIs) on one hand and LGUs on
the other, the Supreme Court has ruled in favor of the former and latter applying the following
reasons:
Legislative Control
1. The State shall ensure the autonomy of local governments (Section 25, Article II, 1987 Constitution).
2. Congress retains control of the LGUs although in significantly reduced degree now than under
previous Constitutions. The power to create still includes the power to destroy. The power to
grant still includes the power to withhold or recall. The National Legislature is still the principal of
the LGs, which cannot defy its will, or modify or violate its laws.

3. Under the 1987 Constitution, Congress has the power to:

3.1. Allocate among the different local government units their powers, responsibilities, and
resources, and provide for the qualifications, election, appointment and removal, term, salaries,
powers and functions and duties of local officials, and all other matters relating to the
organization and operation of the local units (Section 3, Article X, 1987 Constitution).

3.2. Prescribe guidelines and limitations on sources of local government revenues and local
power to levy taxes, fees, and charges provided these are consistent with the basic policy of local
autonomy (Section 5, Article X, 1987 Constitution).

Each local government unit shall have the power to create its own sources of revenues and to levy taxes,
fees, and charges subject to such guidelines and limitations as the Congress may provide, consistent
with the basic policy of local autonomy. Such taxes, fees, and charges shall accrue exclusively to the local
governments.

3.3. Determine the just share in the national taxes of local governments (Section 6, Article X,
1987 Constitution).
Local government units shall have a just share, as determined by law, in the national taxes which shall
be automatically released to them.

3.4. Provide the manner by which local governments receive their equitable share in the
proceeds of the utilization and development of the national wealth within their respective areas
(Section 7, Article X, 1987 Constitution).

Local governments shall be entitled to an equitable share in the proceeds of the utilization and
development of the national wealth within their respective areas, in the manner provided by law,
including sharing the same with the inhabitants by way of direct benefits.

3.5. Set the term limits of barangay officials (Section 8, Article X, 1987 Constitution). Under R.A.
No. 9164, the current term of office of elective barangay officials is three years.

The term of office of elective local officials, except barangay officials, which shall be determined by law,
shall be three years and no such official shall serve for more than three consecutive terms. Voluntary
renunciation of the office for any length of time shall not be considered as an interruption in the
continuity of his service for the full term for which he was elected.

3.6. Prescribe the manner by which sectoral representatives shall be installed in local legislative
bodies (Section 9, Article X, 1987 Constitution).

Legislative bodies of local governments shall have sectoral representation as may be prescribed by law.

3.7. Define the criteria for the creation, division, merger, abolition and substantial alteration of
boundaries of local governments (Section 10, Article X, 1987 Constitution).

3.8. Establish special metropolitan political subdivisions (Section 11, Article X, 1987
Constitution).

The Congress may, by law, create special metropolitan political subdivisions, subject to a plebiscite as
set forth in Section 10 hereof. The component cities and municipalities shall retain their basic autonomy
and shall be entitled to their own local executives and legislative assemblies. The jurisdiction of the
metropolitan authority that will hereby be created shall be limited to basic services requiring
coordination.

3.9. Pass the organic act of the autonomous regions (Section 18, Article X, 1987 Constitution).

3.10. Provide from exemption to devolution such as nationally-funded projects, facilities,

programs and services since the power of Congress to legislate on all matters of common
interest is plenary.

4. Congress exercises control over the properties of LGs.

4.1. Article 424 of the Civil Code lays down the basic principles that properties of the public
dominion devoted to public use and made available to the public in general are outside the
commerce of men (persons) and cannot be disposed of or leased by the LGU to private persons.
4.2. Pursuant to the Regalian doctrine, any land that has never been acquired through purchase,
grant or any other mode of acquisition remains part of the public domain and is owned by the
State. LGs cannot appropriate to themselves public lands without prior grant from the
government.

4.3. A lot comprising the public plaza is property of public dominion; hence, not susceptible to
private ownership by the church or by the municipality.

4.4. A city can validly reconvey a portion of its street that has been closed or withdrawn from
public use where Congress has specifically delegated to such political subdivision, through its
charter, the authority to regulate its streets. Such property withdrawn from public servitude to
be used or conveyed for any purpose for which other property belonging to the city may be
lawfully used or conveyed.

4.5. The conversion of the public plaza into a commercial center is beyond the municipality’s
jurisdiction considering the property’s nature as one for public use and thereby, forming part of
the public dominion. Accordingly, it cannot be the object of appropriation either by the State or
by private persons. Nor can it be the subject of lease or any other contractual undertaking.