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University of Santo Tomas, Faculty of Civil Law
The Law on PUBLIC CORPORATION Based from the lecture of Atty. Enrique V. dela Cruz, Jr.
James Christian S. Ballecer © 2014
1 jcsb
I. Basic Principles/ General Powers and Attributes
(First Meeting)
LOCAL AUTONOMY, DEVOLUTION, &
DECENTRALIZATION
Q: Can the President subject to certain
conditions the release of the IRA of LGU’s?
A: No. (Province of Batangas v. Romulo, G.R.
No. 152774, May 27, 2004)
Art X, Sec. 6. Local Government units shall have
a just share, as determined by law, in the
national taxes which shall be automatically
released to them.
Q: Can the Congress take back what it has
already devolved to the Autonomous Region of
Muslim Mindanao (ARMM)?
A: (Disomangcop v. Daatumanong, 444 SCRA
203)
In this case, R.A. No. 8999 was enacted by
Congress establishing an engineering district of
the DPWH in Lanao del Sur
The Court upheld the petitioners. In so doing, it
came up with certain observations about
regional autonomy and the idea of
decentralization, as well as the significance of
Organic Acts.
Congress cannot take back by law (R.A. 8999)
what has already been devolved by another
law, if there is any amendment, it must pass
through a plebiscite.
Section 16, Article X of the 1987 Constitution
limits the power of the President over
autonomous regions. In essence, the provision
al…. the Power of Congress over autonomous
regions.
Q: Can the Congress postpone the ARMM
elections?
A: (Datu Abas Kida v. Senate, Oct. 18, 2011)
YES. R.A. No. 10153 did not amend the Organic
Act (R.A. No. 9054) - which only provides for the
schedule of the first ARMM elections and does
not fix the date of the regular elections.
A need therefore existed for Congress to fix the
date of subsequent ARMM regular elections
R.A. 10153 merely filled in a gap in R.A. No.
9054 or supplemented the law by providing the
date of … regular elections.
Q: Who has the authority to create municipal
corporations? How is a public corporation
created?
A: A Local Government Unit may be created,
divided, merged, abolished or its boundaries
substantially altered either by:
1. Law enacted by Congress in case of
province, city, municipality, or any other
political subdivision; or
2. An ordinance passed by the
Sangguniang Panlalawigan or
Sangguniang Panlungsod concerned in
the case of a barangay located within
its territorial jurisdiction, subject to such
limitations and powers described in the
LGC. (Sec . 6, R.A.7160)
Q: What are the requisites or limitations
imposed on the creation or conversion of
municipal corporations?
1 jcsb
A: Plebiscite requirement – must be approved
by majority of the votes cast in a plebiscite
called for such purpose ion the political unit or
units affected.
Q: May Congress validly delegate to the
ARMM Regional Assembly the power to create
provinces, cities, and municipalities with the
ARMM, pursuant to Congress plenary
legislative powers?
A: NO. There is no provision in the Constitution
that conflicts with the delegation to regional
legislative bodies of the power to create
municipalities and barangays.
However, the creation of provinces and cities is
another matter. Only Congress can create
provinces and cities because the creation of the
same necessarily includes the creation of
legislative districts, a power only Congress can
exercise under Section 5, Art. VI of the 1987
Constitution and Section 3 of the Ordinance
appended to it. (Bai Sandra S.A. Sama v.
COMELEC, et al. G.R. No. 178628, July 18, 2008)
Q: Considering the legislative power validly
delegated to the ARMM Regional Assembly,
what is the limitation of such that prevents the
same to create legislative districts?
A: The ARMM Regional Assembly cannot enact
a law creating a national office like the office of
a district representative of Congress because
the legislative powers of the ARMM Regional
Assembly operate only within its territorial
jurisdiction, as provided in Section 20, Art. X of
the 1987 Constitution. (Bai Sandra S.A. Sama v.
COMELEC, et al. G.R. No. 178628, July 18, 2008)
CREATION or CONVERSION of LGU’S
I. Income Requirement – must be
sufficient on acceptable standards
to provide for all essential
government facilities and services
and special functions
commensurate with the size of its
population, as expected of the local
government unit concerned.
Average annual income for the last two (2)
consecutive years should be at least:
City – P100M (as amended by R.A. 9009)
Highly Urbanized City – P50M
Province – P20M
Municipality – P2.5M
Q: At the end of the 11th Congress’ existence,
several bills aiming to convert certain
municipalities into cities were pending; the
same were not entered into law.
The 12th Congress enacted R.A. No. 9009,
amending the Local Government Code (LGC) by
increasing the income requirement for the
conversion of municipalities mentioned earlier
from the new income requirement. However,
no concrete action came out of such
deliberations.
The municipalities filed through their
respective sponsors, individual cityhood bills
containing a common proviso exempting them
from the new income requirement. The
Congress approved the same. Concerned
parties protested such laws allowing a
“wholesale conversion” of municipalities as
being unconstitutional. Decide.
Are the cityhood laws valid?
2 jcsb
A: The challenged “cities” claim that it was the
intent of Congress anyway to grant them
exemption from the income requirement, as
per the deliberations of the 11th Congress. What
became of the cityhood bills and their
deliberations that were pending at the
adjournment of the 11th Congress?
League of Cities v. COMELEC
On November 18, 2008, then SC ruled the
cityhood laws unconstitutional.
The COMELEC filed the first motion for
reconsideration, which was denied on March
31, 2009.
On April 28, 2009 the SC en banc, by a split
vote, denied a second motion for
reconsideration
The decision then becomes final and
executory.
However, on Dec. 21, 2009, the SC ruled on 3rd
MR and reversed its own judgement.
The 16 cities were allowed to hold election in
2010.
Then again, on a 4th MR the SC in a decision
dated August 24, 2010, reversed its decision
and ruled that the 16 cityhood laws were
unconstitutional. The decision then became
final and executory (again).
Surprisingly, on a 5th MR, last April 12, 2011 the
SC again reversed itself and upheld the
constitutionality of the creation of the 16 new
cities.
ANSWER:
1. Yes, The 16 cities covered by the
Cityhood laws not only had conversion
bills pending during the 11th Congress,
but have also complied with the
requirements of the LGC prescribed
prior to its amendment by R.A. No.
9009. Congress undeniably gave these
cities all the considerations that justice
and fair play demanded.
Hence, this Court should do no less by stamping
its imprimatur to the clear and unmistakeable
legislative intent and by duly recognizing the
certain collective wisdom of Congress. (League
of Cities of the Philippines (LCP) v. COMELEC,
G.R. No. 176951, April 12, 2011)
2. Notwithstanding that both the 11th and
12th Congress ask upon the pending
cityhood bills, both the letter and intent
of Section 45 of the LGC, as amended
by R.A. No. 9009, were carried on until
the 13th Congress, when the Cityhood
Laws were enacted.
The exemption clauses found in the individual
Cityhood Laws are the express articulation of
that intent to exempt respondent municipality
from the coverage of R.A. No. 9009 (League of
Cities of the Philippines (LCP) v. COMELEC, G.R.
No. 176951, February 15, 2012)
II. Population requirement - to be
determined as the total number of
inhabitants within the territorial
jurisdiction of the local government
unit concerned. The required
populations shall be:
Barangay – 2K
But 5K in:
-Metro Manila
- Highly urbanized cities
Municipality – 25K
City- 150K
Province – 250K
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Q: Congress enacted a law creating the
legislative district of Malolos based on a
certification of the demographic projection
from NSO stating that by 2010, Malolos is
expected to reach the population of 250, 000,
hence entitling it to one legislative district. Is
the law valid?
A: No. Congress cannot establish a new
legislative district based on a projected
population requirement of the Constitution in
the reappointment of legislative districts.
A city that has attained a population of 250,000
is entitled to a legislative district only in the
“immediately following election.” In short, a city
must first attain 250,000 population, and
thereafter, in the immediately following
election, such city shall have a district
representative. There is no showing in the
present case that City of Malolos has attained
or will attain the 250,000 population, whether
actual or projected, before May 10, 2010
elections. Thus, the City if Malolos is not
qualified to have a legislative district of its own
Section 5 (3), Article VI of the 1987 Constitution
and Section 3 of the Ordinance appended to the
1987 Constitution (Aldaba v. Comelec, G.R.
188078, Jan. 25, 2010)
Q: Congress enacted a law reapportioning the
composition of the Province of Camarines Sur
and created legislative districts thereon,
Aquino challenged the law because it runs
afoul to the constitutional requirement that
there must be 250,000 population to create
legislative districts.
Comelec argued that the mentioned
requirement does not apply to provinces. Is the
250,000 population standard an indispensible
requirement for the creation of a legislative
district in provinces?
A: No. Section 5(3), Article VI of the 1987
Constitution, which requires 250,000 minimum
population requirement apply only for a city to
be entitled to a representative but not for a
province.
The provision draws a plain and clear distinction
between the entitlements of a city to a district
on the other. For while a province is entitled to
at least a representative, with nothing
mentioned about population, a city must first
meet a population minimum of 250,000 in
order to be similarly situated. (Aquino and
Robredo v. Comelec, G.R. No. 189793, April 7,
2010)
Q: Congress passed a law providing for the
apportionment of a new legislative district in
CDO City. The COMELEC subsequently issued a
resolution implementing the law. B now assails
the resolution, contending that rules for the
conduct of a plebiscite must first be laid down,
as part of the requirements under the
Constitution. According to B, the
apportionment is a conversion and division of
CDO City, falling under Section 10, Art. X of the
Constitution, which provides for the rule on
creation, division, merger, and abolition of
LGU. Decide.
A: There is no need for a plebiscite. CDO City
politically remains a single unit and its
administration is not divided along territorial
lines. Its territory remains whole and intact.
Thus, Section 10, Art. X of the 1987
Constitution does not come into play. (Rogelio
Z. Bagabuyo v. COMELEC, G.R. No. 17690, Dec.
8, 2008)
III. Land requirement – must be
contiguous, unless it comprises two
or more islands or is separated by a
local government unit; properly
4 jcsb
identified by metes and bounds and
sufficient to provide for such basic
services and facilities.
Area requirements are:
Province – 2, 000 sq.km.
City – 100 sq.km.
Municipality – 50 sq.km.
- The territory need not be contiguous if
it comprises of two (2) or more islands;
- The land area requirement shall not
apply where the proposed province is
composed of one (1) or more islands.
(Navarro v. Executive Secretary)
- When the Dinagat Island was
proclaimed a new province on
December 3, 2006, it had an
approximate land area of 802.12 sq.km.
- The law requires at least 2,000 sq.km.
in land area
- Petitioners argued that the province
which was composed of more than one
island is exempted from the land area
requirement based on the provision in
paragraph 2, Article IX of the IRR of LGC.
- On 12 May 2010, the SC held that
paragraph 2 of Article IX of the IRR of
LGC is null and void, because the
exemption is not found in Section 461
of the LGC.
- The exemption should pertain to the
requirement of territorial contiguity and
not on land area.
- However, in a decision dated 20 May
2011, the SC reversed itself and ruled
that the creation of the Dinagat Island
Province is constitutional.
(Second Meeting)
POLICE POWER, CORPORATE POWERS and
GENERAL WELFARE CLAUSE
Q: In creating an LGU, is it necessary that
the territorial boundaries be expressed in
meets and bounds?
A: No.
- The Constitution does not provide for a
description by metes and bounds as a
condition sine qua non for the creation
of a local government unit or its
conversion from one level to another.
- Section 450 of R.A. No. 7160 only
applies to the conversion of a
municipality or a cluster of barangays
into a competent city, not a highly
urbanized city.
- At the time of the consideration of R.A.
No. 7854, the territorial dispute
between the municipalities of Makati
and Taguig over Fort Bonifacio was
under court litigation. Out of a
becoming sense of respect to a co-equal
department of government, the
legislations felt that the dispute should
be left to the courts to decide.
- They did not want to foreclose the
dispute by making legislative finding of
fact which could decide the issue. This
would have ensued if they defined the
land area of the proposed city by its
exact metes and bounds, with technical
descriptions.
(Mariano v. COMELEC, 242 SCRA 211 -
1995)
Q: Can the creation of an additional
congressional seat be included in the same
law converting the municipality into a city?
5 jcsb
A: YES.
- Petitioners contend that the addition of
another legislative district in Makati is
unconstitutional for:
1. Reapportionment cannot
made by a special law;
2. The addition of a legislative
district is not expressed in
the title of the bill 7; and
3. Makati’s population, as per
the 1990 census, stands at
only four hundred fifty
thousand (450,000)
- Reapportionment of legislative districts
may be made through a special law,
such as in the charter of a new city. The
Constitution clearly provides that
Congress shall be composed of not
more than two hundred fifty (250)
members, unless otherwise fixed by
law.
- As thus worded, the Constitution did
not preclude Congress from increasing
its membership by passing a law, other
than a general reapportionment law.
- Otherwise, if Makati is made to wait for
a general apportionment law, it would
create an inadequate situation where a
new city created by Congress will be
denied legislative representation for an
indeterminate period of time.
(Mariano v. COMELEC, 242 SCRA 211 -
1995)
Q: Can the Governor declare a State of
Emergency and call out the Armed Forces
and the Police?
A: NO.
- Respondent provincial governor is not
endowed with the power to call upon
the armed forces, the police, and his
own Civilian Emergency Force.
- The calling-out powers contemplated
under the Constitution is EXCLUSIVE to
the President. An exercise by another
official, even if he is the local chief
executive, is ultra vires, and may not be
justified by the invocation of Section
465 of the Local Government Code.
(Jamar M. Kulayan, et al. v. Gov. Abdusakur
M. Tan, et al., GR No. 187298, July 3, 2012)
Q: Can the Mayor be compelled by writ of
Mandamus to issue a business permit?
A: NO.
- A Mayor cannot be compelled by
Mandamus to issue business permit
since the exercise of the same is a
delegated police power, hence
discretionary in nature.
- Section 443 (b) (3) (iv) of the Local
Government Code of 1991, whereby
the power of the respondent mayor is
circumscribed, is a manifestation of the
delegated police power of municipal
corporation.
- Necessarily, the exercise thereof cannot
be deemed ministerial. As to the
question whether power is validly
exercised, the matter is within the
province of a writ of certiorari, but
certainly, not of mandamus.
(Rimando v. Naguilan Emission Testing
Center, Inc., G.R. No. 198860, July 23, 2012)
Q: Can an LGU, pursuant to its police
power, require private cinemas in the city
6 jcsb
to give 50% discount to minors for their
admission tickets?
A: NO.
- To invoke the exercise of police power,
not only must it appear that the
interest of the public generally
requires an interference with private
rights, but the means adopted must be
reasonably necessary for the
accomplishment of the purpose and
not unduly oppressive upon
individuals.
- The legislature may not, under the guise
of protecting the public interest,
arbitrarily interfere with private
business, or impose unusual and
unnecessary restrictions upon unlawful
occupations.
- In other words, the determination as to
what is a proper exercise of its police
power is not final or conclusive, but is
subject to supervision of courts.
(Balacuit v. CFI of Agusan del Norte, 163
SCRA 182 - 1998)
Q: Can an LGU, pursuant to its police
power, allot funds for a Burial Assistance
Program where bereaved families are
given P500 each?
A: YES.
- COA is not attuned to the changing of
the times. Public purpose is not
unconstitutional merely because
incidentally benefits a limited number
of persons.
- The care for the poor is generally
recognized as a public duty. The
support for the poor has long been an
accepted exercise of police power in
the promotion of the common good.
- There is no violation of the equal
protection clause in classifying paupers
as subject of legislation. Paupers may
be reasonably classified. Different
groups may receive varying treatment.
(Binay v. Domingo, 201 SCRA 508 -
1991)
Q: Can an LGU be held liable for torts
committed by its personnel?
A: It depends.
- Municipal Corporations are suable
because their charters grant them the
competence to sue and be sued.
- Nevertheless, they are generally not
liable for torts committed by them in
the discharge of governmental
functions and can be held answerable
only if it can be shown that they were
acting in proprietary capacity.
- The municipality cannot be held liable
for the torts committed by its regular
employee, who was then engaged in
the discharge of governmental
functions.
- Hence, the death of the passenger –
tragic and deplorable though it may be
imposed on the municipality, no duty to
pay monetary compensation.
(Municipality of San Fernando v. Firme,
GR No. 52179, April 8, 1991)
Q: May an LGU alter the zoning
classification of a portion of its territory
and order the transfer of businesses
located therein?
A: YES.
7 jcsb
- The power to establish zones for
industrial, commercial, and residential
uses is derived from the protection and
benefit of the residents of a locality.
(Social Justice Society v. Atienza, Jr., 517
SCRA 92 - 2008)
Q: May an LGU prescribe a central terminal
for public utility vehicles within its
territory?
A: NO.
- Since the compulsory use of the
terminal would subject the users
thereof to fees, rentals and charges,
such measure us unduly oppressive.
(Lucena Grand Central Terminal, Inc. v. JAC
Liner, Inc., 452 SCRA 174 - 2005)
Q: May an LGU regulate the subscriber
rates charged by CATV operators within its
territorial jurisdiction?
A: NO.
- Regulation of CATV Subscriber Rates is
lodged in the NTC, not LGU’s.
- LGUs, likewise, have no authority to
grant franchises for such undertakings.
(Batangas CATV Inc. v. CA, 493 SCRA 326 -
2004)
Q: May an LGU enact an ordinance to
phase out motels, night clubs, and other
establishments to protect public morals?
A: NO.
- Business may only be regulated but
cannot be altogether be prohibited.
- Simply because there are no “pure”
places where there are impure men.
- That these motels and clubs are used as
venues for prostitution is of no
moment. Sexual immorality may take
place in the most innocent of places.
(City of Manila v. Laguio, Jr., 455 SCRA 308 -
2005)
Q: May an LGU regulate the short-time
periods and wash free of motels, to protect
public morals?
A: NO.
- “Individual rights” may be adversely
affected only to the extent that may
fairly be required by the legitimate
demands of public interest or public
welfare.
- However well-intentioned the
Ordinance may be, it is in effect an
arbitrary and whimsical intrusion into
the rights of the establishment as well
as their patrons.
- The Ordinance needlessly restraints the
operation of the petitioners as well as
restricting the rights of their patrons
without sufficient justification.
- The Ordinance rashly equates wash
rates and renting out a room more than
twice a day with immorality without
accommodating innocuous intentions.
(White Light Corporation v. City of Manila,
576 SCRA 416 - 2009)
EMINENT DOMAIN
1. An expropriation suit is incapable of
pecuniary estimation. Barangay San
Roque v. Heirs of Pastor, 334 SCRA 127
– 2000
2. Section 19 of the LGC requires an
ordinance, not a resolution, for the
8 jcsb
exercise of eminent domain. Suguitan
v. City of Mandaluyong, 328 SCRA 137 -
2000
3. A valid and definite offer to acquire
the property is necessary prior to the
exercise of the power of eminent
domain. The offer must not be
accepted. Jesus is Lord Christian School
Foundation, Inc. v. Municipality of
Pasig, GR No. 152230, August 9, 2005
Procedure of Eminent Domain:
- The land must be a private property
- It must be for a public purpose
- There must be genuine necessity;
- There must be previous valid and
definite offer to buy the private
property in WRITING. It shall specify
the property sought to be acquired, the
reasons for the acquisition, and the
price offered.
- The offer is DENIED or REJECTED
- If the owner rejects the offer, the LGU
can then file a complaint for
expropriation in the RTC
- The LGU must then deposit the amount
equivalent to 15% of the fair market
value of the property to be
expropriated based on its current tax
declaration
- The LGU may then enter the property
- The COURT will determine the amount
of just compensation for the property
expropriated
Q: May an LGU expropriate a property for the
benefit of a specific homeowners association?
A: NO.
- A local government unit cannot use the
power of eminent domain to
expropriate a property merely for the
purpose of providing a sports and
recreational facility to a small group of
persons, such as those belonging to
homeowners’ association.
- Where the taking by the State of private
property is done for the benefit of a
small community which seeks to have
its own sports and recreational facility,
notwithstanding that there is such
recreational facility only a short
distance away, such taking cannot be
considered to be for public use. It’s
expropriation is NOT VALID.
(Masikip v. City of Pasig, 479 SCRA 391 - 2006)
Q: May an LGU expropriate property to provide
a right-of-way to a specific community?
(Barangay Sindalan, San Fernando, Pampanga v.
Court of Appeals, 518 SCRA 649 - 2007)
In this case, a barangay sought to expropriate
private lands to secure a right-of-way for
residents of a subdivision.
The SC declared that the failure of the
subdivision owner to provide an access road
does not shift the burden to the barangay itself.
To deprive the private persons of their property
instead of compelling the subdivision owner to
comply with its obligation under the law is an
abuse of the power of eminent domain and is
patently illegal, which misuse of public funds for
a private purpose could amount to a possible
case of malversation.
9 jcsb
TAXATION
Q: What are the requisites for a valid tax
ordinance?
A:
1. The procedure applicable to local
government ordinances, in general,
should be observed. (Sec. 187, LGC)
2. Public hearings are required before any
local tax ordinance is enacted. (Sec.
187, LGC)
3. Within 10 days after their approval,
PUBLICATION in FULL for 3 consecutive
days in a newspaper of general
circulation. In the absence of such
newspaper in the province, city, or
municipality, then the ordinance may
be posted in at least two conspicuous
and publicly accessible places. (Secs.
188 and 189, LGC)
Q: What is the effect if the tax ordinance was
not published in full (only excerpts/summary)?
A: The requirement of publication in full for 3
consecutive days is MANDATORY for a tax
ordinance to be VALID.
- The tax ordinance will be null and void
if it fails to comply with such publication
requirement. (Coca-Cola v. City of
Manila, GR No. 161893 – June 27, 2006)
Q: Who determines the legality or propriety of
a local tax ordinance or revenue measure?
A: It is the SECRETARY OF JUSTICE who shall
determine questions on the legality and
constitutionality or revenue measures. (Weird –
accdg. to Atty. Dela Cruz but that’s it)
Such questions shall be raised on appeal
within thirty (30) days from the effectivity
thereof to the Secretary of Justice who shall
render a decision within sixty (60) days
from the date of receipt of the appeal.
Provided, however, that such appeal shall
not have the effect of suspending the
effectivity of the ordinance and the accrual
and payment of the tax, fee, or charge
levied therein.
Provided, finally, that within the sixty-day
period without the Secretary of Justice
acting upon the appeal, the aggrieved party
may file appropriate proceedings with a
court of competent jurisdiction (RTC).
(Sec. 187, LGC)
Q: Can a dissatisfied tax payer go directly
to court to question a tax ordinance?
A: NO.
- The law requires that the dissatisfied
taxpayer who questions the validity or
legality of a tax ordinance must file his
appeal to the Secretary of Justice,
within 30 days from effectivity thereof.
- In case the Secretary of Justice decides
the appeal, a period also of 30 days is
allowed for an aggrieved party to go to
court. But if the Secretary of Justice
does not act thereon, after the lapse of
60days, a party could already proceed
to seek relief in court.
- These three separate periods are clearly
given for compliance as a prerequisite
before seeking redress in a competent
court. Such statutory periods are set to
prevent delays as well as enhance the
orderly and speedy discharge of judicial
functions.
10 jcsb
- For this reason, the courts construe that
the three above-mentioned provisions
of statutes as MANDATORY.
Q: Does the LGU has the power to impose
Franchise Tax?
(Smart Communications, Inc. v. City of Davao,
565 SCRA 237 - 2008)
- In this case, Smart contends that its
telecenter in Davao City is exempt from
payment of franchise tax to the City,
because its franchise by virtue of a
charter (R.A. No. 7294 - 1992) includes
the clause “in lieu of all taxes”
- Smart alleges that the “in lieu of all
taxes” clause in its franchise exempts it
from all taxes both local and national.
- The Local Government Code, which
allowed the imposition of franchise tax
by LGUs, took effect 2 months ahead of
Smart’s franchise
- The SC ruled that the “In lieu of all
taxes” clause applies only to National
Interest Revenue taxes and NOT TO
LOCAL TAXES.
*The LGC took effect on January 1, 1992. PLDT’s
legislative franchise was granted sometime
before 1992. Its franchise provides that PLDT
will pay only 3% franchise tax to BIR in lieu of all
taxes.
*The legislative franchise of Smart and Globe
Telecoms were granted in 1998. Their legislative
franchises state that they will pay only 5%
franchise tax to the BIR in lieu of all taxes.
Sample Problem:
- The province of Zamboanga del Norte
passed an ordinance in 1997 that
imposes a local franchise tax on all
telecommunication companies
operating within the province.
- The tax is 50% of 1% of the gross annual
receipts of the preceding calendar year
based on the incoming receipts, or
receipts realized, within its territorial
jurisdiction.
Q: Is the ordinance valid? Are PLDT, Smart,
and Globe liable to pay franchise taxes to
the Province of Zamboanga?
A: YES.
- The ordinance is VALID. The LGC
explicitly authorizes provincial
governments, notwithstanding any law
or other special law, to impose a tax on
business enjoynh a franchise at the
ratge of 50% of 1% based on the gross
annual receipts during the preceding
year within the province. (Section 137,
LGC)
- PLDT is liable to the franchise tac levied
by the province of Zamboanga del
Norte. The tax exemption privileges on
franchises granted before the passage
of the Local Government Code are
effectively repealed by the latter law.
(PLDT v. City of Davao, GR No. 143867 –
August 22, 2002)
A: While Smart and Globe’s franchises were
enacted after the enactment of LGC, still,
Smart and Globe are also liable to pay
franchise tax to the province.
The SC ruled that the “in lieu of all taxes”
clause applies only to national internal
revenue taxes and not to local taxes.
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The “in lieu of all taxes” clause in a
legislative franchise should categorically
state that the exemption applies to both
local and national taxes; otherwise, the
exemption claimed should be strictly
construed against the taxpayer liberally in
favour of the taxing authority. (Smart
Communications, Inc. v. The City of Davao,
GR No. 155491 - July 21, 2009)
Q: Does the LGU have the power to adjust local
tax rates?
A: YES. Provided that the adjustment of the tax
rates be prescribed in an ordinance but should
not be oftener than once every five (5) years,
and in no case shall adjustment exceed ten
percent (10%) of the rates fixed under the LGC.
(Sec. 191, LGC)
Q: What are the taxes, fees, and charges which
a province or a city mayor may levy?
A:
1. Tax on transfer of real property
ownership (Sec. 135, LGC)
2. Tax on business of printing and
publication (Sec. 136, LGC)
3. Franchise Tax (Sec. 137, LGC)
4. Tax on sand, gravel, and other quarry
resources (Sec. 138, LGC)
5. Professional Tax (Sec. 139, LGC)
6. Amusement Tax (Sec. 140, LGC)
7. Annual fixed tax for every delivery
truck or van of manufacturer or
producers, wholesalers of, dealers, or
retailer in certain products (Sec. 141,
LGC)
Q: What are the taxes that a municipality may
impose under the LGC?
1. Tax on business (Sec. 143, LGC)
2. Fees and charges on business and
occupation (Sec. 147, LGC)
3. Fees for sealing and licensing weights
and measures (Sec. 148, LGC)
4. Fishery rentals, fees and charges (Sec.
149, LGC)
Q: (Sample Problem)
Mr. Fermin, a resident of Bulacan, is a Certified
Public Accountant-Lawyer engaged in the
practice of his two professions.
He has his main office in Makati City and
maintains a branch office in Pasig City.
Mr. Fermin pays his professional tax as a CPA
in Makati City and his professional tax as a
Lawyer in Pasig.
Q: May Makati City, where he has his main
office, require him to pay his professional tax
as lawyer?
A: NO. Makati City where Mrf. Fermikn has his
main office may not require him to pay his
professional tax as a lawyer.
Mr. Fermin has the option of paying his
professional tax as lawyer in Pasig City where he
practices law or in Makati City where he
maintains his principal office (Sec. 139[b], LGC)
Q: May the Province of Bulacan, where he has
his residence, and where he also practices his
two professions, go after him for the payment
of his professional tax as a CPA and lawyer?
A: NO.
The situs of the professional tax is the city
where the professional practices his profession
or where he maintains his principal office in
case he practices his profession in several
places.
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The Province of Bulacan has no right to collect
professional tax from Mr. Fermin as the place of
residence of the taxpayer is NOT THE PROPER
SITUS in the collection of the professional tax.
(Sec. 139 [b], LGC)
Q: Does the province has the authority to
impose taxes on sand, gravel and other quarry
resources extracted on private lands?
A: NO.
- A province is not expressly authorized
to do so. Such tax is a tax upon the
performance, carrying on, or exercise of
an activity. Hence, an excise tax upon
an activity already being taxed under
the NIRC.
(Province of Bulacan, et.al., v. CA, GR No.
126232 – November 27, 1998)
Q: What are the amusement places upon
which provinces or cities cannot impose
amusement taxes?
A:
1. Cockpits
2. Cabarets
3. Night or day clubs
4. Boxing exhibitions
5. Professional Basketball games
6. Jai-Alai
7. Racetracks
Note: There can be no imposition of
amusement taxes on the above-mentioned
amusement places since the NIRC already
imposes amusement taxes on them under
Section 125 thereof.
Q: May LGUs collect amusement taxes on
admission tickets to the Philippine Basketball
Association (PBA) games held in the LGU?
A: NO.
- Professional basketball games are
within the ambit of national taxation,
as it is presently being taxed under the
provisions of the NIRC.
- Furthermore, the income from cession
of streamers and advertising spaces is
subject to amusement taxes under the
NIRC because the definition under the
Tax Code is broad enough to include the
cession of streamers and advertising
spaces as the same includes all the
receipts of the proprietor, lessee or
operator of the amusement place.
(Philippine Basketball Association v. CA, GR
No. 119122 – August 8, 2000)
Q: What are the common revenue raising
powers of LGUs?
A:
1. Fees, service or user charges – LGUs
may impose and collect such
reasonable fees and charges for
services rendered. (Sec. 153, LGC)
2. Public Utility Charges – may fix the
rates for the operation of public utilities
owned, operated and maintained by
them within their jurisdiction. (Sec. 154,
LGC)
3. Toll fees or charges – The sanggunian
concerned may prescribe the terms and
conditions and fix the rates and fix the
rates for the imposition of toll fees or
charges for the use of any public road,
pier, or wharf, waterway, bridge, ferry,
or telecommunication system funded
and constructed by the LGU concerned.
(Sec. 155, LGC)
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Q: What are the common limitations on
the taxing powers of the LGUs?
A: The exercise of the taxing power of
provinces, cities, municipalities, and
barangays shall not extend to the levy of
the following:
1. Taxes which are levied under the NIRC,
unless otherwise provided by LGC.
2. Taxes, fees, and charges which are
imposed under the Tariffs and Customs
Code.
3. Taxes, fees, and charges where the
imposition of which contravenes
existing governmental policies or which
are violative of the fundamental
principles of taxation.
4. Taxes, fees and charges imposed under
special laws.
Q: What should be the basis of business tax –
gross receipt or gross revenue?
A: GROSS RECEIPTS, as the law is clear.
- Gross receipts include money or its
equivalent actually or constructively
received in consideration of services
rendered or articles, sold, exchanged or
leased, whether actual or constructive.
- To tax on gross revenue rather than
gross receipts will amount to double
taxation inasmuch as the revenue or
income for a taxable year includes gross
receipts already reported during the
previous year for which local business
taxes had already been paid.
(Ericsson Telecommunications, Inc. ,v. City of
Pasig, etc., et. Al., GR No. 176667 – November
22, 2007)
Q: Are condominium corporations liable to pay
business taxes under the Local Government
Code?
A: NO.
- As a rule, a city or municipality is
authorized to impose a tax on business,
which is defined under the LGC as
“trade or commercial activity regularly
engaged as a means of livelihood or
with view of profit.”
- By its very nature, a condominium
corporation is not engaged in business,
and any profit it derives is merely
incidental, hence, it may not be the
subject of business taxes.
(Yamane, etc., v. BA Lepanto Condominium
Corporation, GR No. 154993, October 25,
2005)
Q: What are the penalties for unpaid taxes,
fees or charges?
A:
1. Surcharge of 25% on taxes, fees or
charges not paid on time; and
2. Interest not exceeding 2% per month of
the unpaid taxes, fees or charges
including surcharges, until the amount
is fully paid. In no case shall the total
interest exceed 36 months. (Sec. 168,
LGC)
Q: What is the period of assessment of local
taxes?
A: GR – Local taxes, fees or charges shall be
assessed within five (5) years from the date
they became due. No action for the collection
of such taxes, fees or charges, whether
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administrative or judicial, shall be instituted
after the expiration of such period.
XPN: In case of fraud or intent to evade the
payment of taxes, fees or charges, the same
may be assessed within ten (10) years from
discovery of the fraud or intent to evade
payment. (Sec. 184 [a] and [b], LGC)
Q: What is the period of collection of local
taxes?
A: Local taxes, fees or charges may be collected
within five (5) years from the date of
assessment by administrative or judicial
action. (Sec. 194(c), LGC)
Q: When is the running of the prescriptive
period be suspended?
A: The running of the periods of prescription
for the collection of local taxes shall be
suspended for the time during which:
1. The treasurer is legally prevented from
making the assessment of collection;
2. The taxpayer requests for a
reinvestigation and executes a waiver in
writing before expiration of the period
within which to assess or collect; and
3. The taxpayer is out of the country or
otherwise cannot be located. (Sec. 195
[d],LGC)
Sessions and Quorum
First Day of Session
- On the first day of session following the
election of its members and within 90
days thereafter, the sangguian
concerned shall adopt or update its
existing rules of procedure; (Article 103,
IRR-LGC)
Internal Rules of Procedure
- The task of drafting the internal rules
may be delegated to a committee;
- The proposed IRP can then be adopted
by the sanggunian in a regular session;
(Article 103, IRR-LGC)
Sanggunian Committees
- The manner of selecting the Chairman
and Members of various committess is
through election. (Sec. 50, LGC)
- The majority can prepare a list and the
sanggunian can vote to approve it,
provided this is indicated in the IRP.
- DILG Opinion No. 1122-98 (09-07-1998)
Ex-Officio members and the selection of
committee chairs
- SK Chairmen and Punnong Barangay s
are non-partisan.
- Thus, they cannot participate in the
election of officers (minority and
majority leaders and deputies –
because this is mainly dependent on
the majority and minority party
affiliation in the sangguinian.
- However, these ex-officio members are
assured of the chairmanship of the
corresponding sectors that they are
representing in the sanggunian, that is,
the youth and barangay affairs,
respectively. They may also chair other
regular committees.
- An ex-officio member, president of the
liga ng mga barangay affairs and may
chair another committee.
- The creation of the committee on
barangay affairs is mandatory.
- The youth and sports development
committee is a mandatory committee
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similar to those other committee
enumerated in the LGC.
Q: Can the vice mayor chair a committee?
A: NO.
- The vice mayor may chair a special
committee created for a special
purpose (DILG Opinions, Nos 243-1992;
156-1994) but cannot head a regular
committee.( DILG Opinions, Nos 243-
1992; 156-1994)
Q: What is Quorum?
A: A majority of all the members of the
sanggunian who have been elected and
qualified shall constitute a quorum to transact
official business. (Section 5t3, LGC)
Q: What is meant by majority?
A: 50% plus one of the entire membership of
the sanggunian.
- The closest number to more than one-
half of the total membership of the
sanggunian;
(La Carlota City vs. Atty. Rex Rojo, G.R. No.
181367, April 24, 2012)
Q: Is the vice mayor include in the
determination of quorum?
A: YES.
- The Vice Mayor is a member of the
Sanggunian
- He will thus be include in the total
number of sanggunian members for
purposes of determining the quorum.
(DILG Opinion No. 28-2000, dated 17 April 2000;
La Carlota City vs. Atty. Rex Rojo, G.R. No.
181367, April 24, 2012)
Determining Quorum
- 19 members = 19/2 = 9.5 + 1 = 10.5
- The quorum for a sanggunian with 19
members is therefore “10”
- 11 members = 11/2 = 5.5 +1 = 6.5
- The quorum for a sanggunian with 11
members is therefore “6”
Vote required in Sessions
- Ordinary measures shall be decide by
simple majority of the members
presents at any meeting there being a
quorum.
(DILG Opinions Nos. 26-1996; 183-1994)
Two-thirds (2/3) Vote Required
- Extending Loans or entering into
contracts;
- Issuance of bonds or securities;
- Authorizing the lessee of public
property;
- Grant of franchise
- Creation of LGU liability or
indebtedness;
- Over-ride veto of the Mayor;
- Grant of Tax exemptions
- Levy of Taxes
- Discipline/suspend a member of the
sanggunian;
- Opening or closing of roads;
- Selection and transfer of government
site or offices
- Concurrence in the appointment of
personnel;
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(DILG Opinion No. 107-2003, dated 15
August 2003)
Vice Mayor as Presiding Officer
- Being the presiding officer of the
council, a vice mayor is considered a
regular member of the local legislative
council concerned. (DILG Opinion Nos.
138, 342 – 1992; 81-1995)
- But a vice mayor acting as mayor
cannot preside over the council until
the mayor reassumes his/her position
since this will violate the local
separation of powers. (Gamboa v.
Aguirre)
- In such situation, the senior councillor
may preside. (DILG Opinions Nos. 142,
174-1994)
Presiding Officer as member
- As presiding officer, he can only vote to
break a tie;
- As a member, he may participate in the
deliberations, vote, sponsor or co-
author a bill or chair a special
committee.
- He/She may temporarily relinquish
his/her chair –as presding officer—to
the majority floor leader or to any
sanggunian member. (DILG Opinion No.
65-1995)
- If he will participate in the session as a
member, he may choose the
temporary presiding officer. (DILG
Opinions Nos. 29, 132-1993)
Temporary Presiding Officer
- In case of temporary absence of the
presiding officer, the members present
and constituting a quorum shall elect
from among themselves a temporary
presiding officer.
- He shall certify within 10 days from the
passage of ordinances/resolutions
adopted by the sanggunian in the
session over which he temporary
presided. (Article 102 – IRR, LGC)
Permanent Vacancy: Presiding Officer
- In case of permanent vacancy in the
position of vice mayor, the highest
ranking sanggunian member will
succeed as vice mayor/presiding
officer.
- The vacancy shall be filled by the other
members of the sanggunian in
accordance to their ranking. (Section
44, LGC)
- In case the permanent vacancy was
caused by a member who belongs to a
political party, the party will appoint
the replacement;
- If he does not belong to any political
party, the other members of the
sangguian will nominate, and the
president will appoint the
replacement. (Section 45, LGC)
Sanggunian Secretary
- The secretary to the sanggunian is a
career public official with rank and
salary equal to a head of a department.
(DILG Opinions Nos. 91, 253, 286 –
1992; 78-1995)
- A sanggunian secretary shall
automatically continue in office despite
the lapse of 3-year terms of elective
officials unless otherwise removed for
cause. (DILG Opinion No. 176-1992)
Appointment of Sanggunian Secretary
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- It is the vice mayor, not the mayor,
who is authorized to appoint the
secretary to the sanggunian (CSC En
Banc Resolution Nos. 94-7153,
December 29, 1994, 92-111, August 20,
1992; DILG Opinions Nos. 348-1992; 7,
155, 236, 245-1993; 85-1995) with the
concurrence of the sanggunian
concerned. (DILG Opinion No. 8-1995)
Temporary Vacancy: Mayor
- A mayor may designate in writing an
officer-in-charge (e.g. councilor, any
appointive official or employee) to
assume the office but only for three (3)
days.
- On the 4th day, the vice mayor assumes
the post regardless of the nature of the
absence of the mayor. (DILG Opinions
Nos. 22, 30, 87-A – 1993; 52, 53-1994)
- Henceforth, the designation of the
officer-in-charge ceases. (DILG Opinion
No. 87-A- 1993)
Powers: Acting Mayor
- A vice mayor acting as mayor possesses
the powers incidental to the office,
including the authority to solemnize
marriages, during the period of
temporary incapacity. (DILG Opinion
No. 25-1994)
- An acting mayor can exercise the
power to appoint and to discipline only
after lapse of 30 working days from the
time the mayor is temporarily
incapacitated. (CSC En Banc Resolution
Nos. 94-0959, February 15, 1994; 94-
6892, December 20, 1994)
Acting Mayor CANNOT:
- Administer oaths (DILG Opinion No.
136-1994)
- The power to approve or disapprove
ordinances and resolutions enacted by
the council (DILG Opinion No. 149-
1993)
- Preside over council sessions (DILG
Opinions Nos. 270-1992; 142, 174-
1994)
- Appoint, suspend or dismiss employees
within 30 days except when the cause
of the temporary incapacity of the
mayor is suspension for more than 30
days.
Q: Is the signature of the vice mayor on an enacted ordinance necessary?
A: NO.
- Section 469 (c)(3) of the LGC provides
that enacted ordinances must be
certified by the presiding officer before
they are submitted to the mayor for his
approval.
- An acting mayor can exercise the
power to appoint and to discipline only
after lapse of 30 working days from the
time the mayor is temporarily
incapacitated. (CSC En Banc Resolution
Nos. 94-0959, February 15, 1994; 94-
6892, December 20, 1994)
Q: May an ordinance become valid even
without the signature of the mayor?
A: YES.
- If he fails to act on an ordinance
submitted to him for his review within
10 days from his receipt thereof;
- When the sanggunian overrides the
veto of the mayor by 2/3 vote.
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(DILG Opinion No. 22-2003, date February
27, 2003)
Legislative Oversight Sec. 56. Review of Ordinances by the Sangguniang Panlalawaigan – (a) Within three (3) days after approval the secretary to the sanggunian panlungsod or sangguniang bayan shall forward to the sangguniang panlalawigan for review, copies of approved ordinances and the resolutions approving the local development plans and public investment programs formulated by the local development council. (b) Within thirty (30) days after receipt of copies of such ordinances and resolutions, the sangguniang panlalawigan shall examine the documents or transmit them to the provincial attorney, or if there be none, to the provincial prosecutor for prompt examination. (c) If the sangguniang panlalawigan finds that such an ordinance or resolution is beyond the power conferred upon the sangguniang panlungsod or sangguniang bayan concerned, it shall declare such ordinance or resolution invalid in whole or in part. The sanggunian panlalawigan shall enter its action in the minutes and shall advise the corresponding city or municipal authorities of the action it has taken. (d) If no action has been taken by the sangguniang panlalawigan within thirty (30) days after submission of such an ordinance or resolution, the same shall be presumed consistent with law and therefore valid. Sec. 57. Review of Ordinances by the Sangguiang Panlungsod or Bayan. – (a) Within ten (10) days after its enactment, the sangguniang barangay shall furnish copies of all barangay ordinances to the sangguniang panlungsod or sangguniang bayan concerned for review as to whether the ordinance is
consistent with law and city or municipal ordinances. (b) If the sanghuniang panlungsod or sangguniang bayan, as the case may be, fails to take action on barangay ordinances within thirty (30) days from receipt thereof, the same shall be deemed approved. (c) I f the sangguniang panlungsod or sangguniang bayan, as the case may be, finds the barangay ordinances inconsistent with law or city or municipal ordinances, the sanggunian concerned shall, within thirty (30) days from receipt thereof, return the same with its comments and recommendations to the sangguniang barangay concerned for adjustment, amendment, or modification; in which case, the effectivity of the barangay ordinance is suspended until such time as the revision called for is effected. Q: May the Sanggunian declare a local ordinance under review as void and illegal? A: NO.
- The only ground upon which a provincial board may declare any municipal resolution, ordinance, or order invalid is when such resolution, ordinance, or order is “beyond” the powers conferred upon the sanggunian making the same.
- Absolutely no other ground is recognized by the law.
(Moday v. CA, Feb. 20, 1997; DILG Opinion NO. 3-2005 {January 21, 2005})
Q: May the Sanggunian exceed the 30-day period of review because of time spent in referral to its committee or legal office?
A: NO.
- The sanggunian is required to take action on the ordinance on review within thirty (30) days after its submission
19 jcsb
- The phrase “take action” should be construed as either approval or disapproval of the ordinance and not just any other action of the reviewing sanggunian, such as referral to a committee.
- After the lapse of such period, and no official and/or formal document, such as a resolution, was issued by the Sanggunian, it can be validly stated that the Sanggunian failed to act within thirty (30) days and the ordinance or resolution under review can be presumed consistent with law and therefore valid. (DILG Opinion No. 19-2009, April 28, 2009; DILG Opinion No. 62-2012, Nov. 7, 2012)
Review of Appropriation Ordinances
Sec. 327. Review of Appropriation Ordinances
of Competent Cities and Municipalities.
The sangguniang panlalawigan shall within the same 90-day period advise the … sangguniang bayan concerned through the local chief excecutive of any action on the ordinance under review. Upon receipt of such advise, the … municipal treasurer concerned shall not make further disbursements of funds from any of the items of appropriate declared inoperative, disallowed or reduced. Sec. 333. Review of the Barangay Budget - (a) Within ten (10) days from its approval, copies of the barangay budget shall be furnished the sangguniang panlungsod or the sangguniang bayan, as the case may be. If within sixty (60) days after the receipt of the ordinance, the sanggunian concerned takes no action thereon, the same shall continue to be in full force and effect.
(b) Within the 60-day period, the sangguniang panlungsod or the sangguniang bayan concerned shall return the barangay budget to the punong barangay with the advice of action thereon for proper adjustments, in which event, the barangay shall operate on the ordinance authorizing annual appropriations of the preceding fiscal year until such time that the new ordinance authorizing annual appropriations shall have met the objections raised. Upon receipt of such advice, the barangay treasurer or the city or municipal treasurer who has custody of the funds shall not make further disbursement from any item of appropriation declared inoperative, disallowed, or reduced. Q: Who prepares the budget? A:
- The Local Development Council (LDC) prepares the Local Development Plan (LDP) [Sec. 109, LGC]
- The sanggunian will then approve or
disapprove the LDP thru a Resolution [Sec. 114, LGC]
- The LDP will then be submitted to the mayor, who may approve or veto the same [Sec. 55, LGC]
- The approved LDP will then be submitted to the Local Finance Committee (LFC) for budget preparation [Art. 410, IRR, LGC]
- The proposed budget will be submitted by the local chief executive to the sanggunian for enactment into an ordinance. [Sec. 316, LGC; DILG Opinion No. 137-2003]
Q: Can the Sanggunian reduce the proposed budget? A:
- Article 415 of the IRR states that: “the local sanggunian may not increase the
20 jcsb
proposed amount in the executive budget nor include new items except to provide for statutory and contractual obligations but in no case shall it exceed the total appropriations in the executive budget.”
- Considering that the only prohibition is against any increase, the sanggunian may reduce the executive budget proposed by the LCE, provided, however, that the requirements as well as the general limitations in the use of government funds provided for under Sections 324 and 325 of the Code are complied with.
Q: Is there any penalty for an LCE who fails to prepare and submit the annual budget on time? A: YES. Pursuant to Sec. 318 of R.A. No. 7160, an LCE who fails to submit the budget on or before October 16 of the current year shall be subject to such criminal and administrative penalties as may be provided by the Local Government Code and other applicable laws. Q: What is the period for enactment of the annual budget (Re-enacted Budget)
- Under Section 323 of the LGC, if the sanggunian fails to enact the annual budget after ninety (90) days from the beginning of the fiscal year, the ordinance authorizing the appropriations of the preceding year shall be deemed re-enacted and shall remain in force and effect until the ordinance authorizing the proposed appropriations is passed by the sanggunian concerned.
- However, only the annual appropriations for salaries and wages of existing positions, statutory and contractual obligations, and essential operating expenses authorized in the annual and supplemental budgets for the preceding year shall be deemed re-
enacted and disbursement of funds shall be in accordance therewith.
Effectivity of Budget Section 320 of the LGC provides that:
- The ordinance enacting the annual budget shall take effect on the ensuing calendar year.
- An ordinance enacting a supplemental budget, however, shall take effect upon its approval or on the date fixed therein.
- The review of the budget by the sangguniang panlalawigan is not a requisite for validity or effectivity.
(DILG Opinion No. 90-2000, dated August 21, 2000)
Supplemental Budget
- No ordinance providing for a supplemental budget shall be enacted, except:
- (a) when supported by funds actually available as certified by the local treasurer, which shall refer to the amount of money actually collected during a given fiscal year that is over and above the realized estimated income of that year; or
- (b) in times of public calamity by way of budgetary realignment to set aside appropriations for the purchase of supplies and materials or the payment of services, which are exceptionally urgent or absolutely indispensible to prevent imminent danger to, or loss of life or property, in the jurisdiction of the LGU or in other areas declared in a state of calamity by the President. (Art. 417, IRR)
Intelligence Fund
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- Section 325 (h) of R.A. 7160 provides that: “…annual appropriations for discretionary purposes of the local chief executive shall not exceed two percent (2%) of the actual receipts derived from the basic real property tax in the next preceding calendar year. ”
- Pursuant to DILG Memorandum Circular No. 99-65 to determine the amount to be utilized for intelligence and confidential purposes, it shall be based on the: (a) 30% of the peace and order allocation, or (b) 3% of the annual appropriations, whichever is lower.
Q: May the Sanggunian modify or reduce a local budget ordinance under review? A: YES.
- Expressly included in the sanggunian’s power to review the local budget ordinance of a lower LGU is the clipping power to disallow or reduce accordingly and even declare the ordinance inoperative in part or in its entirety if the appropriations are found to be excess of the amounts prescribed or if it does not comply with budgetary requirements and limitations under the law.
(DILG Opinion No. 101-1995, dated August 31, 1995)
Q: What are the grounds or questions that the reviewing Sanggunian can use to assail a local budget under review? A: Sec. 325, LGC
- The total appropriations, whether annual or supplemental, for personal services of a local government unit for one (1) fiscal year shall not exceed forty-five percent (45%) in the case of first to third class provinces, cities, and municipalities, and fifty-five percent (55%) in the case of fourth class or lower, of the total annual income from
regular sources realized in the next preceding fiscal year.
- The appropriations for salaries, wages,
representation, and transportation allowances of officials and employees of the public utilities and economic enterprises owned, operated, and maintained by the local government unit concerned shall not be included in the annual budget or in the computation of the maximum amount of personal services.
Q: What are the grounds or questions that the reviewing Sanggunian can use to assail a local budget under review? A: Sec. 325, LGC
- No official or employee shall be entitled to a salary with higher than the maximum fixed for the position or other positions of equivalent rank by applicable laws or rules and regulations issued thereunder.
- The creation of new positions and salary increases or adjustments shall in no case be made retroactive and
- The annual appropriations for discretionary purposes of the local chief executive shall not exceed two percent (2%) of the actual receipts derived from the basic real property tax in the next preceding calendar year.
Q: What are the grounds or questions that the reviewing Sanggunian can use to assail a local budget under review? A: Sec. 324, LGC
- The aggregate amount appropriated shall not exceed the estimates of income.
- Full provision shall be made for all
statutory and contractual obligations of
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the local government unit concerned. Provided, however, that the amount of appropriations for debt servicing shall not exceed twenty percent (20%) of the regular income of the local government unit concerned.
- Five percent (5%) of the estimated
revenue from regular sources shall be set aside as an annual lump appropriation for unforeseen expenditures arising from the occurrence of calamities.
Q: What are the restrictions on disbursement of Funds? A: Sec. 344. Certification on, and Approval of Vouchers – No money shall be disbursed unless the local budget officer certifies to the existence of appropriation that has been legally made for the purpose, the local accountant has obliged said appropriation, and the local treasurer certifies to the availability of funds for the purpose.
- Vouchers and payrolls shall be certified to and approved by the head of the department or office who has administrative control of the fund concerned, as to validity, propriety, and legality of the claim involved.
Q: Can the local chief executive declare savings and transfer it to augment other expenses (DAP)? A: NO.
- Sec. 336. Use of Approriated Funds and Savings. Funds shall be available exclusively for the specific purpose for which they have been appropriated.
- No ordinance shall be passed
authorizing any transfer of
appropriations from one item to another.
- However, the local chief executive or
the presiding officer of the sanggunian concerned may, by ordinance, be authorized to augment any item in the approved annual budget for their respective offices from savings in other items within the same expense class of their respective appropriations.
Q: How can the Sanggunian monitor that the funds are properly disbursed? A: Sec. 346. Disbursement of the Local Funds and Statement of Accounts. – Disbursements shall be made in accordance with the ordinance authorizing the annual or supplemental appropriations without the prior approval of the sanggunian concerned.
- Within thirty (30) days after the close of each month, the local accountant shall furnish the sanggunian with such financial statements as may be prescribed by the Commission on Audit. In the case of the year-end statement of accounts, the period shall be sixty (60) days after the thirty-first (31st) of December.
Q: Who will be held liable for improper disbursement of funds? A: Sec. 340. Persons accountable for Local Government Funds. – Any officers of the local government unit whose duty permits or requires the possession or custody of the local government funds shall be accountable and responsible for the safekeeping thereof in conformity with the provisions of this Title.
- Other local officers who, though not accountable by the nature of their duties, may likewise be similarly held accountable and responsible for local
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government funds through their participation in the use or application thereof. “ (emphasis supplied)
Sec. 342. Liability for Acts Done Upon Direction of Superior Officer, or Upon Participation of Other Department Heads or Officers of Equivalent Rank. -
- Unless he registers his objection in writing, the local treasurer, accountant, budget officer, or other accountable officer shall not be relieved of liability for illegal or improper use or application or deposit of government funds or property by reason of his having acted upon the direction of a superior officer, elective or appointive, or upon participation of other department heads or officers of equivalent rank.
- The superior office directing, or the
department head participating in such illegal or improper use or application or deposit of government funds or property, shall be jointly and severally liable with the local treasurer, accountant, budget officer, or other accountable officer for the sum or property so illegally or improperly used, applied or deposited.
QUALIFICATIONS Q: What are the qualifications of elective government official? - Must be as resident therein for at least 1 year immediately preceding the day of the election; - Able to read and write Filipino/any other local language or dialect - Age requirement (Sec. 39, LGC): 23 y/o – governor, vice-governor, mayor, vice-mayor, councillor (Highly urbanized cities) 21 y/o – mayor, vice-mayor (component cities/municipalities) 18 y/o – sanggunian members and punong barangay Q: When should the citizenship requirement be possessed? A: The citizenship requirement in the LGC is to be possessed by the elective official, at the latest, as of the time he is proclaimed and at the start of the term of office to which he has been elected.
- The LGC does not specify any particular date or time when the candidate must possess citizenship, unlike the requirements for residence and age. Repatriation under P.D. 825 is valid and effective and retroacts to the date of the application.
(Frivaldo v. Comelec, G.R. No. 120295, June 28, 1996)
Q: X was a natural-born Filipino who went to the USA to work and subsequently became a naturalized American citizen. However, prior to the filing of his Certificate of Candidacy for the Office of Mayor of the Municipality of General McArthur, Eastern
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Samar, on 28 March 2007, he applied for reacquisition of his Philippine Citizenship. Such application was subsequently granted. Y filed a petition to disqualify X on the ground of failure to comply with the 1-year residency requirement. Y argues that reacquisition of Philippine citizenship, by itself, does not automatically result in making X a resident of the locality. Is Y correct? A: YES. X’s reacquisition of his Philippine citizenship under R.A. 9225 had no automatic impact or effect on his residence/domicile.
- He could still retain his domicile in the USA, and he did not necessarily regain his domicile in the Municipality of General McArthur, Eastern Samar, Philippines.
- X merely had the option to again establish his domicile in the Municipality of General McArthur, Eastern Samar, Philippines, said place to have become his new domicile of choice. The length of his residence therein shall be determined from the time he made it his domicile of choice, and it shall not retroact to the time of his birth. It is the fact of residence that is the decisive factor in determining whether or not an individual has satisfied the residency qualification requirement.
- However, even if Y’s argument is
correct, this does not mean that X should be automatically disqualified as well, since there is proof that aside from reacquisition of his Philippine Citizenship, there are other subsequent acts executed by X which shows his intent to make General McArthur, Eastern Samar his domicile. Thus, making him qualified to run for Mayor.
(Japzon v. COMELEC, G.R. No. 180088, Jan. 19, 2009)
Q: Imelda Marcos indicated in her COC that her residence in Leyte is 7months. The Constitution 1 year residence. Is he qualified to run? A: YES. The principle of animus revertendi was used to show that she has an “intention to return” to the place where she seeks to be elected.
- The SC held that the term “residence” is VAGUE. It ruled that “domicile” and “residence” are synonymous.
(Marcos v. COMELEC, G.R. No. 119976, September 18, 1995) Q: Butz Aquino was a Senator residing in Tarlac when he filed a COC for Congressman of Makati City. He bought a condo unit in Makati City 1 year before the election. Is he qualified? A: NO. The term “residence,” as used in the law, is CLEAR.
- It imports not only an intention to reside in a fixed place, but also a personal presence in that place, coupled with conduct indicative of such intention.
(Aquino v. COMELEC, 1995) *Comment of Atty. Buko: “Weird Supreme Court.” Q:What is RESIDENCE for election purposes? A: It implies the factual relationship of an individual to a certain place. It is the physical presence of a person in a given area, community, or country. For election purposes,
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the concepts of residence and domicile are dictated by the peculiar criteria of political laws.
- As these concepts have evolved in our election law, what has clearly and unequivocally emerged is the fact that residence for election purposes is used synonymously with domicile.
(Marcos v. COMELEC, G.R. No. 119976, September 18, 1995)
Q: What is the effect of transfer of residence? A: Any person who transfers residence solely by reason of his occupation, profession, or employment in private or public service, education, etc., shall not be deemed to have lost his original residence. (Astio v. Aguirre, G.R. No. 191124, April 27, 2010) Q: Dan Fernandez ran for congressman of the First District of Laguna. In his COC, he indicated that his complete/exact address is in Sta. Rosa City Laguna. Vicente sought the cancellation of the COC of Dan Fernandez and his disqualification as a candidate on the ground of an alleged material misrepresentation in his COC regarding his place of residence, because during past elections, he had declared Pagsanjan, Laguna as his address, and Pagsanjan was located in the Fourth District of Laguna, and that Dan Fernandez is merely leasing a property in his alleged residence in Sta. Rosa. Does the Constitution require that a candidate be a property owner in the district where he intends to run? A: NO. Although it is true that the latest acquired abode is not necessarily the domicile of choice of a candidate, there is nothing in the Constitution or our election laws which require a congressional candidate to sell a previously acquired home in one district and buy a new
one in the place where he seeks to run in order to qualify for a congressional seat in that other district.
- Neither do we see the fact that Fernandez was only leasing in Sta. Rosa at the time of his candidacy as a barrier for him to run in that district. Certainly, the Constitution does not require a congressional candidate to be a property owner in a district where he seeks to run but only that he resides in that district for at least one year prior to the Election Day.
- To use ownership of property in the
district as the determinative indicium of permanence of domicile or residence implies that only the landed can establish compliance with the residency requirement.
- This Court would be in effect imposing a
property requirement to the right to hold public office, which property requirement would be unconstitutional.
(Fernandez v. HRET, G.R. No. 187478, Dec. 29, 2009)