CASES IN ADMINISTRATIVE LAW A.Y.

2019-2020

GENERAL PRINCIPLES ISSUE: Whether or not PNRC is a Private

Corporation.
A. CORPORATION
HELD: NO. The provisions of R.A. No. 95, as
DANTE LIBAN v. RICHARD GORDON amended by R.A. Nos. 855 and 6373, and further
PHILIPPINE NATIONAL RED CROSS, amended by P.D. Nos. 1264 and 1643, show the
INTERVENOR historical background and legal basis of the
G.R. NO. 175352 | January 18, 2011 creation of the PNRC by legislative fiat, as a
Leonardo- de Castro, J. voluntary organization impressed with public
interest.
DOCTRINE: The structure of the PNRC is sui
generis¸ being neither strictly private nor public The PNRC is one of the National Red Cross and
in nature. R.A. No. 95 remains valid and Red Crescent Societies, which, together with the
constitutional in its entirety. PNRC enjoys special International Committee of the Red Cross (ICRC)
status as an important ally and auxiliary of the and the IFRC and RCS, make up the International
government in the humanitarian field in Red Cross and Red Crescent Movement (the
accordance with its commitment under the Movement). They constitute a worldwide
international law. humanitarian movement.

The PNRC must be distinguished from private National Societies such as the PNRC act as
and profit-making entities. It is the main auxiliaries to the public authorities of their own
characteristic of National Societies that they "are countries in the humanitarian field and provide a
not inspired by the desire for financial gain but range of services including disaster relief and
by individual commitment and devotion to a health and social programmes.
humanitarian purpose freely chosen or accepted
as part of the service that National Societies A National Society partakes of a sui generis
through its volunteers and/or members render character. It is a protected component of the Red
to the Community. Cross movement under Articles 24 and 26 of the
First Geneva Convention, especially in times of
FACTS: On July 15, 2009, the Supreme Court armed conflict. These provisions require that the
held that Gordon did not forfeit his seat in the staff of a National Society shall be respected and
Senate when he accepted the chairmanship of protected in all circumstances. Such protection is
the PNRC Board of Governors, as the office of the not ordinarily afforded by an international treaty
PNTC Chairman is not a GOCC for purposes of the to ordinary private entities or even non-
prohibition in Sec. 13, Art. VI of the 1987 governmental organizations (NGOs). This sui
Constitution. The Decision, however, further generis character is also emphasized by the
declared void the PNRC Charter “insofar as it Fourth Geneva Convention which holds that an
creates the PNRC as a private corporation. Occupying Power cannot require any change in
the personnel or structure of a National
In its Motion for Partial Reconsideration, PNRC Society. National societies are therefore
prays that the Court sustain the constitutionality organizations that are directly regulated by
of its Charter on the grounds that declaring R.A. international humanitarian law, in contrast to
95 as unconstitutional deprived PNRC of due other ordinary private entities, including NGOs.
process, that they were never a party to the
controversy and the constitutionality was never The auxiliary status of [a] Red Cross
an issue in the case. And PNRC’s structure is sui Society means that it is at one and the same time
generis. a private institution and a public service

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organization because the very nature of its work governmental functions, to which category the
implies cooperation with the authorities, a link BSP belongs.
with the State. In carrying out their major
functions, Red Cross Societies give their FACTS: On August 19, 1999 COA issued a
humanitarian support to official bodies, in resolution to conduct an annual financial audit of
general having larger resources than the the Boy Scouts of the Philippines following the
Societies, working towards comparable ends in a pronouncement of the Court under BSP v. NLRC
given sector. holding that BSP is a public corporation and
under its charter is a Government-Controlled
It is in recognition of this sui generis character of Corporation within the meaning of Art.
the PNRC that R.A. No. 95 has remained valid and IX(B)(2)(1) of the 1987 Constitution.
effective from the time of its enactment in
March 22, 1947 under the 1935 Constitution and In its reply, BSP wrote that, BSP is not subject to
during the effectivity of the 1973 Constitution COA’s jurisdiction on the ground that R.A. 7278
and the 1987 Constitution. amended BSP’s charter after the cited case was
decided, which virtually eliminated the
The PNRC Charter and its amendatory laws have “substantial government participation” in the
not been questioned or challenged on National Executive Board. And that BSP is neither
constitutional grounds, not even in this case stock or non-stock corporation.
before the Court now.
In its comment, COA argues that BSP is a public
corporation created under C.A. 111, whose
BOY SCOUTS OF THE PHILIPPINES v. function relate to fostering of public virtues of
COMMISSION ON AUDIT citizenship and patriotism and the general
G.R. NO. 177131 | June 7, 2011 improvement of the moral spirit and fiber of the
Leonardo- de Castro, J. youth. The manner of creation and the purpose
for which is the BSP was created indubitably,
DOCTRINE: Administrative Code of 1987, Book prove that it is government agency. And that as
IV, Ch. 7. Sec. 38(3)(a) Attachment refers to the an attached agency of the Department of
lateral relationship between the department or Education, Culture and Sports (DECS), the BSP is
its equivalent and the attached agency or an agency of the government.
corporation for purposes of policy and program
coordination. ISSUE: Whether or not BSP is a public
corporation and is subject to COA’s jurisdiction.
There are two types of government corporations
– those that are involved in performing HELD: YES. After looking at the legislative history
governmental functions, like garbage disposal, of its amended charter and carefully studying the
Manila waterworks, and so on; and those applicable laws and the arguments of both
government corporations that are involved in parties, we find that the BSP is a public
business functions. There are two criteria that corporation and its funds are subject to the
should be followed for corporations that want to COA’s audit jurisdiction.
go into business. First is for government
corporations to first prove that they can be BSP falls under the 2nd Par. of Art. 2 of the Civil
efficient in the areas of their proper functions. Code: “(2) Other corporations, institutions and
entities for public interest or purpose created by
Test of economic viability clearly does not apply law; their personality begins as soon as they have
to public corporations dealing with been constituted according to law;”. The

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purpose of BSP is to implement Art. II, Sec. 13. of The BSP is a Public Corporation Not Subject to
the 1987 Constitution. the Test of Government Ownership or Control
and Economic Viability;
Section 13. The State recognizes the vital
role of the youth in nation-building and Not all corporations, which are not
shall promote and protect their physical, government owned or controlled, are
moral, spiritual, intellectual, and social ipso facto to be considered private
well-being. It shall inculcate in the youth corporations as there exists another
patriotism and nationalism, and distinct class of corporations or
encourage their involvement in public chartered institutions which are
and civic affairs. otherwise known as "public
corporations."
Evidently, the BSP, which was created by a
special law to serve a public purpose in pursuit of While the BSP may be seen to be a mixed type of
a constitutional mandate, comes within the class entity, combining aspects of both public and
of "public corporations" defined by paragraph 2, private entities, we believe that considering the
Article 44 of the Civil Code and governed by the character of its purposes and its functions, the
law which creates it, pursuant to Article 45 of the statutory designation of the BSP as "a public
same Code. corporation" and the substantial participation of
the Government in the selection of members of
Under the Administrative Code of 1987, the the National Executive Board of the BSP, the BSP,
public, rather than private character of the BSP as presently constituted under its charter, is a
is recognized by the fact that, along with the Girl government-controlled corporation within the
Scouts of the Philippines, it is classified as an meaning of Article IX (B) (2) (1) of the
attached agency of the DECS under Executive Constitution.
Order No. 292, or the Administrative Code of
1987. Economic Viability and Ownership and Control
Tests Inapplicable to Public Corporations
Art. XII, Sec. 16 of Constitution prohibits the
creation of private corporations except by a As presently constituted, the BSP still remains an
general law applicable to all citizens. The instrumentality of the national government. It is
purpose of this constitutional provision is to ban a public corporation created by law for a public
private corporations created by special charters, purpose, attached to the DECS pursuant to its
which historically gave certain individuals, Charter and the Administrative Code of 1987. It
families or groups special privileges denied to is not a private corporation which is required to
other citizens. Art. XII bans the creation of be owned or controlled by the government and
"private corporations" by special law. The said be economically viable to justify its existence
constitutional provision should not be construed under a special law.
so as to prohibit the creation of public
corporations or a corporate agency or A review of the Record of the 1986
instrumentality of the government intended to Constitutional Convention reveals the intent of
serve a public interest or purpose, which should the framers of the highest law of our land to
not be measured on the basis of economic distinguish between government corporations
viability, but according to the public interest or performing governmental functions and
purpose it serves. corporations involved in business or proprietary
functions:

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There are two types of government corporations manner consistent with the provisions of the BSP
– those that are involved in performing Charter.
governmental functions, like garbage disposal,
Manila waterworks, and so on; and those
government corporations that are involved in PHILIPPINE SOCIETY FOR THE PREVENTION OF
business functions. There are two criteria that CRUELTY TO ANIMALS v. COMMISSION ON
should be followed for corporations that want to AUDIT
go into business. First is for government G.R. NO. 169752 | September 25, 2007
corporations to first prove that they can be Austria-Martinez, J.
efficient in the areas of their proper functions.
DOCTRINE: Charter test - [T]he test to determine
Test of economic viability clearly does not apply whether a corporation is government owned or
to public corporations dealing with controlled, or private in nature is simple. Is it
governmental functions, to which category the created by its own charter for the exercise of a
BSP belongs. The discussion above conveys the public function, or by incorporation under the
constitutional intent not to apply this general corporation law? Those with special
constitutional ban on the creation of public charters are government corporations subject to
corporations where the economic viability test its provisions, and its employees are under the
would be irrelevant. The said test would only jurisdiction of the Civil Service Commission, and
apply if the corporation is engaged in some are compulsory members of the Government
economic activity or business function for the Service Insurance System.
government.
The true criterion, therefore, to determine
Section 8 of its amended charter allows the BSP whether a corporation is public or private is
to receive contributions or donations from the found in the totality of the relation of the
government. Section 8 reads: corporation to the State.

Section 8. Any donation or contribution It must be stressed that a quasi-public

which from time to time may be made to corporation is a species of private corporations,
the Boy Scouts of the Philippines by the but the qualifying factor is the type of service the
Government or any of its subdivisions, former renders to the public: if it performs a
branches, offices, agencies or public service, then it becomes a quasi-public
instrumentalities shall be expended by
corporation.
the Executive Board in pursuance of this
Act.lawph!1
FACTS: PSPCA was incorporated as juridical
entity by virtue of Act No. 1285 enacted on
Historically, therefore, the BSP had been January 19, 1905. The object of which is to
subjected to government audit in so far as public enforce laws relating to cruelty inflicted upon
funds had been infused thereto. However, this animals or the protection of animals in the
practice should not preclude the exercise of the Philippine islands. At the time of enactment of
audit jurisdiction of COA. Act no. 1285, the original Corporation law, Act
no. 1459, was not yet in existence. Act no. 1285
Since the BSP, under its amended charter, antedated Act no. 1459 and the constitution of
continues to be a public corporation or a SEC.
government instrumentality, we come to the
inevitable conclusion that it is subject to the For the purpose of enhancing its powers in
exercise by the COA of its audit jurisdiction in the promoting animal welfare and enforcing laws for
the protection of animals, the petitioner was

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initially imbued under its charter with the power telephone, water supply corporations and
to apprehend violators of animal welfare laws. In transportation companies.
addition, the petitioner was to share one-half
(1/2) of the fines imposed and collected through It must be stressed that a quasi-public
its efforts for violations of the laws related corporation is a species of private corporations,
thereto. Subsequently, however, the power to but the qualifying factor is the type of service the
make arrests as well as the privilege to retain a former renders to the public: if it performs a
portion of the fines collected for violation of public service, then it becomes a quasi-public
animal-related laws were recalled by virtue of corporation.
Commonwealth Act No. 148.
Authorities are of the view that the purpose
On December 1, 2003, an audit team from alone of the corporation cannot be taken as a
respondent Commission on Audit (COA) visited safe guide, for the fact is that almost all
the office of the petitioner to conduct an audit corporations are nowadays created to promote
survey. Director Delfin Aguilar reported to COA the interest, good, or convenience of the public.
Assistant Commissioner Juanito Espino, A bank, for example, is a private corporation; yet,
Corporate Government Sector, that the audit it is created for a public benefit. Private schools
survey was not conducted due to the refusal of and universities are likewise private
the petitioner because the latter maintained that corporations; and yet, they are rendering public
it was a private corporation. service.

ISSUE: Whether or not PSPCA qualifies as a The true criterion, therefore, to determine
government agency that may be subject to audit whether a corporation is public or private is
by respondent COA. found in the totality of the relation of the
corporation to the State. If the corporation is
HELD: NO. In a legal regime where the charter created by the State as the latter’s own agency
test doctrine cannot be applied, the mere fact or instrumentality to help it in carrying out its
that a corporation has been created by virtue of governmental functions, then that corporation is
a special law does not necessarily qualify it as a considered public; otherwise, it is private.
public corporation. Applying the above test, provinces, chartered
cities, and barangays can best exemplify public
The fact that a certain juridical entity is corporations. They are created by the State as its
impressed with public interest does not, by that own device and agency for the accomplishment
circumstance alone, make the entity a public of parts of its own public works.
corporation, inasmuch as a corporation may be
private although its charter contains provisions The corporation is a creature of the state. It is
of a public character, incorporated solely for the presumed to be incorporated for the benefit of
public good. the public. It received certain special privileges
and franchises, and holds them subject to the
This class of corporations may be considered laws of the state and the limitations of its
quasi-public corporations, which are private charter. Its powers are limited by law. It can
corporations that render public service, supply make no contract not authorized by its charter.
public wants, or pursue other eleemosynary Its rights to act as a corporation are only
objectives. While purposely organized for the preserved to it so long as it obeys the laws of its
gain or benefit of its members, they are required creation.
by law to discharge functions for the public
benefit. Examples of these corporations are Wherefore, PSPCA is declared a private domestic
utility, railroad, warehouse, telegraph, corporation.

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THE PROVINCE OF NORTH COTABATO v. THE Concepts and Principles

GOVERNMENT OF THE REPUBLIC OF THE
PHILIPPINES PEACE PANEL ON ANCESTRAL The MOA-AD grounds the right to self-
DOMAIN (GRP) governance of the Bangsamoro people on the
G.R. NO. 183591 | OCTOBER 14, 2008 past suzerain authority of the sultanates. As
Carpio-Morales, J. gathered, the territory defined as the
Bangsamoro homeland was ruled by several
DOCTRINE: Association is formed when two sultanates and, specifically in the case of the
states of unequal power voluntarily establish Maranao, by the Pat a Pangampong ku Ranaw, a
durable links. In the basic model, one state, the confederation of independent principalities
associate, delegate certain responsibilities to the (pangampong) each ruled by datus and sultans,
other, the principal, while maintaining its none of whom was supreme over the others.
international status as a state. Free associations
represent a middle ground between integration The MOA-AD then mentions for the first time the
and independence. "Bangsamoro Juridical Entity" (BJE) to which it
grants the authority and jurisdiction over the
Article 4, UN-DRIP, Indigenous peoples, in Ancestral Domain and Ancestral Lands of the
exercising their right to self-determination, have Bangsamoro.
the right to autonomy or self-government in
matters relating to their internal and local affairs, Territory
as well as ways and means for finnancing their
autonomous functions. The territory of the Bangsamoro homeland is
described as the land mass as well as the
FACTS: On August 5, 2008, the Government of maritime, terrestrial, fluvial and alluvial domains,
the Republic of the Philippines (GRP) and the including the aerial domain and the atmospheric
MILF, through the Chairpersons of their space above it, embracing the Mindanao-Sulu-
respective peace negotiating panels, were Palawan geographic region.
scheduled to sign a Memorandum of Agreement
on the Ancestral Domain (MOA-AD) Aspect of The core of the BJE is defined as the present
the GRP-MILF Tripoli Agreement on Peace of geographic area of the ARMM — thus
2001 in Kuala Lumpur, Malaysia. constituting the following areas: Lanao del Sur,
Maguindanao, Sulu, Tawi- Tawi, Basilan, and
The MOA-AD was preceded by a long process of Marawi City. Significantly, this core also includes
negotiation and the concluding of several prior certain municipalities of Lanao del Norte that
agreements between the two parties beginning voted for inclusion in the ARMM in the 2001
in 1996, when the GRP-MILF peace negotiations plebiscite.
began. On July 18, 1997, the GRP and MILF Peace
Panels signed the Agreement on General Resources
Cessation of Hostilities. The following year, they
signed the General Framework of Agreement of The MOA-AD states that the BJE is free to enter
Intent on August 27, 1998. into any economic cooperation and trade
relations with foreign countries and shall have
The main body of the MOA-AD is divided into the option to establish trade missions in those
four strands, namely, Concepts and Principles, countries. Such relationships and
Territory, Resources, and Governance. understandings, however, are not to include
aggression against the GRP. The BJE may also
enter into environmental cooperation
agreements.

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Governance The provisions of the MOA indicate, among other

things, that the Parties aimed to vest in the BJE
The MOA-AD describes the relationship of the the status of an associated state or, at any rate,
Central Government and the BJE as a status closely approximating it. And this
"associative", characterized by shared authority concept of association is not recognized under
and responsibility. And it states that the the present Constitution.
structure of governance is to be based on
executive, legislative, judicial, and administrative The BJE is a far more powerful entity that the
institutions with defined powers and functions in autonomous region recognized in the
the Comprehensive Compact. Constitution. It is not merely an expanded
version of the ARMM, the status of its
ISSUE: Whether or not MOA-AD is inconsistent relationship with the national government being
with the Constitution. fundamentally different from that of the ARMM.
Indeed, BJE is a state in all but name as it meets
HELD: YES. MOA-AD as presently worded is the criteria of a state laid down in the Montevido
inconsistent with the constitution. In general, Convention, namel, a permanent population, a
the objections against the MOA-AD center on defined territory, a government, and capacity to
the extent of the powers conceded therein to the enter into relations with other states.
BJE.
The MOA-AD, moreover, would not comply with
Before assessing some of the specific powers Art. X, Sec. 20 of the Constitution since that
that would have been vested in the BJE, provision defines the powers of the autonomous
however, it would be useful to turn first to a regions. If BJE may be regarded as an
general idea that serves as a unifying link to the autonomous region, the MOA-AD would require
different provisions of the MOA-AD, namely, the an amendment that would expand the said
international law concept of association. provision.

The nature of the “associative” relationship may Wherefore the MOA-AD is declared
have been intended to be defined more precisely unconstitutional.
in the still to be forged Comprehensive Compact.
Nonetheless, given that there is concept of
“association” in international law, and the MOA-
AD by its inclusion of international law
instruments in its TOR – placed itself in an
international legal context, that concept of
association may be brought to bear in
understanding the use of the term “associative”
in the MOA-AD.

Association is formed when two states of

unequal power voluntarily establish durable
links. In the basic model, one state, the associate,
delegate certain responsibilities to the other, the
principal, while maintaining its international
status as a state. Free associations represent a
middle ground between integration and
independence.

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B. PRINCIPLES OF LOCAL PAGCOR was created to establish, operate, and

AUTONOMY maintain gambling casinos on land or water
within the territorial jurisdiction of the
Philippines. It is reported that PAGCOR is the
1. Principle of Local Authority third largest source of government revenue next
--------o-------- to BIR and BOC.

BASCO v. PHILIPPINE AMUSEMENTS AND Basco et al. questioning the validity of PD 1869
GAMING CORPORATION (PAGCOR) alleging that the same is null and void" for being
G.R. NO. 91649 | May 14, 1991 "contrary to morals, public policy and public
Paras, J. order," monopolistic and tends toward "crony
economy", and is violative of the equal
DOCTRINE: The principle of local autonomy protection clause and local autonomy as well as
under the 1987 Constitution simply means for running counter to the state policies
"decentralization". It does not make local enunciated in Sections 11 (Personal Dignity and
governments sovereign within the state or an Human Rights), 12 (Family) and 13 (Role of
"imperium in imperio." Youth) of Article II, Section 1 (Social Justice) of
Article XIII and Section 2 (Educational Values) of
As to what state powers should be Article XIV of the 1987 Constitution.
"decentralized" and what may be delegated to
local government units remains a matter of
policy, which concerns wisdom. It is therefore a ISSUE: Whether or not PD 1869 constitutes a
political question. waiver of the right of the City of Manila to
impose taxes and legal fees is violative of the
Local governments have no power to tax principle of local autonomy in the Constitution.
instrumentalities of the National Government.
PAGCOR is a government owned or controlled HELD: NO. P.D. 1869 was enacted pursuant to
corporation with an original charter, PD 1869. All the policy of the government to "regulate and
of its shares of stocks are owned by the National centralize thru an appropriate institution all
Government. games of chance authorized by existing franchise
or permitted by law".
The states have no power by taxation or
otherwise, to retard, impede, burden or in any The City of Manila, being a mere Municipal
manner control the operation of constitutional corporation has no inherent right to impose
laws enacted by Congress to carry into execution taxes. Thus, "the Charter or statute must plainly
the powers vested in the federal government. show an intent to confer that power or the
municipality cannot assume it". Its "power to
FACTS: Petitioners seeks to annul the PAGCOR tax" therefore must always yield to a legislative
charter – P.D. 1869 on the grounds that it is act which is superior having been passed upon by
contrary to morals, public policy and order. And the state itself which has the "inherent power to
on the following grounds, among others; tax"
a. It constitutes a waiver of imposition
of tax and license fee by the City of The Charter of the City of Manila is subject to
Manila; control by Congress. It should be stressed that
b. Contravenes the principle of Local "municipal corporations are mere creatures of
Autonomy enshrined in the Congress".
constitution;

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The City of Manila's power to impose license fees HON. JOSE LINA ET AL. v. HON FRANCISCO
on gambling, has long been revoked. As early as PAÑO ET AL.
1975, the power of local governments to G.R. NO. 129093 | August 30, 2001
regulate gambling thru the grant of "franchise, Quisumbing, J.
licenses or permits" was withdrawn by P.D. No.
771 and was vested exclusively on the National DOCTRINE: Nothing in the present constitutional
Government. provision enhancing local autonomy dictates a
different conclusion. The basic relationship
PAGCOR has a dual role, to operate and to between the national legislature and the local
regulate gambling casinos. The latter role is government units has not been enfeebled by the
governmental, which places it in the category of new provisions in the Constitution strengthening
an agency or instrumentality of the Government. the policy of local autonomy.
Being an instrumentality of the Government,
PAGCOR should be and actually is exempt from Without meaning to detract from that policy, we
local taxes. Otherwise, its operation might be here confirm that Congress retains control of the
burdened, impeded or subjected to control by a local government units although in significantly
mere Local government. reduced degree now than under our previous
Constitutions. The power to create still includes
On principle of local autonomy the power to destroy. The power to grant still
includes the power to withhold or recall. True,
The principle of local autonomy under the 1987 there are certain notable innovations in the
Constitution simply means "decentralization". It Constitution, like the direct conferment on the
does not make local governments sovereign local government units of the power to tax (citing
within the state or an "imperium in imperio." Art. X, Sec. 5, Constitution), which cannot now be
withdrawn by mere statute. By and large,
Local Government has been described as a however, the national legislature is still the
political subdivision of a nation or state which is principal of the local government units, which
constituted by law and has substantial control of cannot defy its will or modify or violate it.
local affairs. In a unitary system of government,
such as the government under the Philippine FACTS: On December 29, 1995, respondent Tony
Constitution, local governments can only be Calvento was appointed agent by the Philippine
an intra sovereign subdivision of one sovereign Charity Sweepstakes Office (PCSO) to install
nation, it cannot be an imperium in imperio. Terminal OM 20 for the operation of lotto. He
Local government in such a system can only asked Mayor Calixto Cataquiz, Mayor of San
mean a measure of decentralization of the Pedro, Laguna, for a mayor's permit to open the
function of government. lotto outlet. This was denied by Mayor Cataquiz
in a letter dated February 19, 1996.
As to what state powers should be
"decentralized" and what may be delegated to The ground for said denial was an ordinance
local government units remains a matter of passed by the Sangguniang Panlalawigan of
policy, which concerns wisdom. It is therefore a Laguna entitled Kapasiyahan Blg. 508, T.
political question. 1995 which was issued on September 18, 1995.

Wherefore, petition is dismissed for lack of As a result of this resolution of denial,

merit. respondent Calvento filed a complaint for
declaratory relief with prayer for preliminary
injunction and temporary restraining order.

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Trial Court enjoined the implementation of Blg. SULTAN ALIMBUSAR LIMBONA v. CONTE
508 T. 1995. MENGELIN ET AL.
G.R. NO. 80391 |February 28, 1989
ISSUE: Whether or not the Local government of Sarmiento, J.
Laguna may prevent the installment of PCSO
terminals. DOCTRINE: Autonomy is either decentralization
of administration or decentralization of power.
HELD: NO. In our system of government, the In the former, the central government delegates
power of local government units to legislate and administrative powers to political subdivision in
enact ordinances and resolutions is merely a order to broaden the base of government power
delegated power coming from Congress. As held and in the process make LGU more responsive,
in Tatel vs. Virac, ordinances should not self- reliant and accountable. The President
contravene an existing statute enacted by exercises “general supervision” over them, but
Congress. The reasons for this is obvious, as only to “ensure that Local affairs are
elucidated in Magtajas v. Pryce Properties Corp. administered according to law” he has no control
over their acts in the sense that he can substitute
Municipal governments are only agents of the their judgements with his own. In the latter, it
national government. Local councils exercise involves abdication of political power in the favor
only delegated legislative powers conferred of LGU declared to be autonomous. This
upon them by Congress as the national amounts to self-immolation, the autonomous
lawmaking body. The delegate cannot be government is free to chart its own destiny and
superior to the principal or exercise powers shape its future with minimum intervention from
higher than those of the latter. It is a heresy to central authorities.
suggest that the local government units can
undo the acts of Congress, from which they have FACTS: On March 12, 1987, Petitioner was
derived their power in the first place, and negate elected Speaker of the RLA. The said assembly
by mere ordinance the mandate of the statute. was composed of 18 members.

Municipal corporations owe their origin to, and On October 21, 1987, Congressman Matalam,
derive their powers and rights wholly from the Chairman of the Committee on Muslim Affairs
legislature. It breathes into them the breath of invited Mr. Razul for a conference. Consistent
life, without which they cannot exist. As it with the invitation, petitioner sent to Acting
creates, so it may destroy. As it may destroy, it Secretary Alimbuyao to wire all Assemblymen
may abridge and control. Unless there is some that there shall be no session in November.
constitutional limitation on the right, the
legislature might, by a single act, and if we can On November 2, 1987, the Assembly held session
suppose it capable of so great a folly and so great in defiance of the Speaker’s advice with ten
a wrong, sweep from existence all of the assemblymen present. After declaring the
municipal corporations in the state, and the presence of quorum, the Speaker Pro-Tempore
corporation could not prevent it. We know of no was authorized to preside in the session. On
limitation on the right so far as the corporation Motion to declare the seat of the Speaker
themselves are concerned. They are, so to vacant, all Assemblyman in attendance voted in
phrase it, the mere tenants at will of the the affirmative, hence, the chair declared said
legislature (citing Clinton vs. Ceder Rapids, etc. seat of the Speaker vacant.
Railroad Co., 24 Iowa 455).
On November 5, 1987, the session of Assembly
Wherefore, the petition is DENIED for lack of resumed, raising the motion to declare the
merit.

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position of the Speaker vacant. Twelve (12) under the supervision of the national
members voted in favor of the motion. government acting through the President and
Petitioner prays that the proceedings held by DILG. Second, under Art. X, Sec. 15, an
respondents on November 2, 1987 as null and autonomous government is subject alone to the
void. Pending further proceedings, this Court, decree of the organic act creating it and
received a resolution filed by the Sanguniang accepted principles on the effects and limits of
Pampook “Expelling Alimbusar Limbona from “autonomy”.
membership” on the grounds of graft and
corruption and usurpation of the power of the An examination of PD 1618 persuades us that the
Assembly. Region XII were never meant to exercise
autonomy in the second sense, that is, self-
ISSUE: Whether or not Region XII is subject to immolation. PD 1618 in the first place, mandates
Supreme Court’s review. that the President shall have the power of
general supervision and control over
HELD: YES. The autonomous governments of Autonomous regions.
Mindanao were organized in Regions IX and XII
by PD 1618. Among other things, the Decree Hence, we assume jurisdiction.
established “internal autonomy” in the two
regions within the framework of the national
sovereignty and territorial integrity of the ARSADI DISOMANGCOP v. SECRETARY OF THE
Republic of the Philippines and its Constitution. DEPARTMENT OF PUBLIC WORKS AND
It requires the autonomous regional HIGHWAYS SIMEON DATUMANONG
governments to “undertake all internal G.R. NO. 149848 | November 25, 2004
administrative matters for the respective Tinga, J.
regions, except to act on matter which are within
the jurisdiction and competence of the National DOCTRINE: The idea behind the Constitutional
Government. In relation to the central Provisions for autonomous regions is to allow
government, it provides that the President shall the separate development of peoples with
have the power of general supervision and distinctive cultures and traditions. These
control over the Autonomous Regions. Cultures, as a matter of right, must be allowed to
flourish.
Now, autonomy is either decentralization of
administration or decentralization of power. In A necessary prerequisite of autonomy is
the former, the central government delegates decentralization. Which comes in two forms –
administrative powers to political subdivision in deconcentration and devolution.
order to broaden the base of government power Deconcentration is administrative in nature; it
and in the process make LGU more responsive, involves the transfer of functions or the
self- reliant and accountable. In the latter, it delegation of authority and responsibility from
involves abdication of political power in the favor the national office to the regional and local
of LGU declared to be autonomous. This offices. This mode of decentralization is also
amounts to self-immolation, the autonomous referred to as administrative decentralization.
government is free to chart its own destiny and
shape its future with minimum intervention from Devolution, on the other hand, connotes political
central authorities. decentralization, or the transfer of powers,
responsibilities, and resources for the
Under the 1987 Constitution, LGUs enjoy performance of certain functions from the
autonomy in these two senses: First, under Art. central government to local government units.
X, Sec. 1 and 2, an autonomous government is This is a more liberal form of decentralization

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since there is an actual transfer of powers and classified as statutes, the Organic Acts are more
responsibilities. It aims to grant greater than ordinary statutes because they enjoy
autonomy to local government units in affirmation by a plebiscite. Hence, the provisions
cognizance of their right to self-government, to thereof cannot be amended by an ordinary
make them self-reliant, and to improve their statute, such as R.A. 8999 in this case.
administrative and technical capabilities.
Regional Autonomy Under R.A. 6734 and R.A.
Substantial and meaningful autonomy is “the 9054
kind of local self-government which allows the
people of the region or the area the power to The creation of autonomous regions does not
determine what is best for their growth and signify the establishment of a sovereignty
development without undue interference or distinct from that of the Republic, as it can be
dictation from the central government. installed only “within the framework of this
Constitution and the national sovereignty as well
FACTS: ARMM was formally organized on as territorial integrity of the Republic of the
November 6, 1990. Seven Executive orders were Philippines.
issued by Pres. Corazon Aquino devolving to
ARMM the powers off seven cabinet Regional Autonomy is the degree of self-
departments, namely: DILG, DOLE, DOST, DPWH, determination exercised by the local
DSED, DOT, and DENR. government unit vis-à-vis the central
government. It refers to the granting of basic
On May 20, 1999, DPWH Secretary Vigilar issued internal government powers to the people of a
D.O. 119 creating Marawi Sub-District particular area or region with least control and
Engineering Office. And almost two years later, supervision from the central government.
Then President Estrada signed into law R.A.
8999, “An act establishing Engineering District in The objective of the autonomy system is to
the First district of Lanao del Sur and permit determined groups, with a common
appropriating funds therefor.” tradition and shared social-cultural
characteristics, to develop feely their ways of life
Congress later passed R.A. 9054 strengthening, and heritage, exercise their rights, and be in
expanding and amending R.A. 6734. R.A. 9054 charge of their own business. This is achieved
lapsed into law. On July 23, 2001, Petitioners through the establishment of special governance
(OIC District Engineer) filed a petition to annul regime for certain member communities who
and set aside D.O. 119, to prohibit the choose their own authorities from within the
implementation of D.O. 119 and R.A. 8999. community and exercise the jurisdictional
authority legally accorded to them to decide
ISSUE: Whether or not D.O. 119 and R.A. 8999 internal community affairs.
are constitutional.
A necessary prerequisite of autonomy is
HELD: NO. At the outset, let it be made clear that decentralization. Which comes in two forms –
it is not necessary to declare R.A. 8999 deconcentration and devolution.
unconstitutional for the adjudication of this case. Deconcentration is administrative in nature; it
The plain truth is the challenged law never involves the transfer of functions or the
became operative and was superseded or delegation of authority and responsibility from
repealed by a subsequent enactment. the national office to the regional and local
offices. This mode of decentralization is also
The ARMM Organic Acts are deemed a part of referred to as administrative decentralization.
the regional autonomy scheme. While they are

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Devolution, on the other hand, connotes political universally held to be invalid. The principle is
decentralization, or the transfer of powers, frequently expressed in the declaration that
responsibilities, and resources for the municipal authorities, under a general grant of
performance of certain functions from the power, cannot adopt ordinances which infringe
central government to local government units. the spirit of a state law or repugnant to the
This is a more liberal form of decentralization general policy of the state. In every power to
since there is an actual transfer of powers and pass ordinances given to a municipality, there is
responsibilities. It aims to grant greater an implied restriction that the ordinances shall
autonomy to local government units in be consistent with the general law.
cognizance of their right to self-government, to
make them self-reliant, and to improve their "The rationale of the requirement that the
administrative and technical capabilities. ordinances should not contravene a statute is
obvious. Municipal governments are only agents
Congress through R.A. 9054 transferred and of the national government. Local councils
devolved the administrative and fiscal exercise only delegated legislative powers
management of public works and funds for conferred on them by Congress as the national
public works to the ARG. lawmaking body. The delegate cannot be
superior to the principal or exercise powers
DPWH D.O. 119 higher than those of the latter. It is a heresy to
suggest that the local government units can
The office created under D.O. 119 is a duplication undo the acts of Congress, from which they have
of the DPWH-ARMM First Engineering District in derived their power in the first place, and negate
Lanao del Sur formed under the aegis of E.O. 426. by mere ordinance the mandate of the statute.
The DPWH’s order, like spring water, cannot rise
higher that its source of power – the Executive. FACTS: On July 28, 1986, respondent enacted
Resolution No. 210 granting petitioner a permit
The repeal of R.A. 8999 and the functus officio to construct, install, and operate a CATV system
state of D.O. 119 provide the necessary basis for in Batangas City. Sec. 8 of the Resolution
the grant of the writs of certiorari and provides that petitioner is authorized to charge
prohibitions sought by the petitioners. its subscribers the maximum rates specified
therein, provided that any increase shall be
Wherefore, considering that R.A. 9054 repealed subject to the approval of the Sangguniang
R.A. 8999 and rendered DPWH D.O. 119 functus Panlungsod.
officio, the petition insofar as the writs of
certiorari and prohibition is granted. Sometime in November 1993, petitioner
increased its subscriber rates from P88.00 to P
180.00 per month. As a result, the respondent
BATANGAS CATV, INC. v. C.A. BATANGAS CITY Mayor wrote petitioner a letter threatening to
SAGGUNIANG PANLUNGSOD & THE CITY cancel its permit unless it secures the approval of
MAYOR respondent Sangguniang Panglungsod, pursuant
G.R. NO. 138810 | September 29, 2004 to Resolution 210.
Sandoval-Gutierrez, J.
RTC decided in favor of petitioner, upon appeal
DOCTRINE: It is a fundamental principle that the Court of Appeals reversed and set aside the
municipal ordinances are inferior in status and trial’s court decision, ratiocinating that under the
subordinate to the laws of the state. An General Welfare Clause of LGC, LGUS can
ordinance in conflict with a state law of general perform any power that will benefit their
character and statewide application is constituencies.

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be emphasized that when E.O. 436 decrees that

ISSUE: Whether or not the LGUs can regulate the “regulatory power” shall be vested “solely” in
subscriber rates charged by CATV operators the NTC, it pertains to the “regulatory power”
within its territorial jurisdiction. over those matters which are peculiarly within
the NTC’s competence, among others, the
HELD: NO. President Ferdinand E. Marcos was determination of rates.
the first one to place the CATV industry under
the regulatory power of the national Since E.O. No. 205, a general law, mandates that
government. 15 On June 11, 1978, he issued the regulation of CATV operations shall be
Presidential Decree (P.D.) No. 1512 establishing exercised by the NTC, an LGU cannot enact an
a monopoly of the industry by granting Sining ordinance or approve a resolution in violation of
Makulay, Inc. an exclusive franchise to operate the said law.
CATV system in any place within Philippines.
It bears emphasizing that municipal corporations
On July 21, 1979, President Marcos issued Letter are bodies politic and corporate, created not
of Instruction no. 894 vesting upon the Chairman only as local units of local self-government, but
of the Board of Communication direct as governmental agencies of the state. The
supervision over the operations of Sining legislature, by establishing a municipal
Makulay, Inc. Three days after, he issued E.O. No. corporation, does not divest the State of any of
546 integrating the Board of Communications its sovereignty; absolve itself from its right and
and the Telecommunications Control Bureau to duty to administer the public affairs of the entire
form a single entity to be known as the National state; or divest itself of any power over the
Telecommunications Communications. Among inhabitants of the district which it possesses
its assigned functions are: before the charter was granted.
a. Issue Certificate of Public
Convenience for the operation of One last word. The devolution of powers to the
communications utilities…; LGUs, pursuant to the Constitutional mandate of
b. Establish, prescribe and regulate ensuring their autonomy, has bred jurisdictional
areas of operation of particular tension between said LGUs and the State. LGUs
operators of public service must be reminded that they merely form part of
communications, and determine the whole. Thus, when the Drafters of the 1987
and prescribe charges or rates Constitution enunciated the policy of ensuring
pertinent to the operation of such the autonomy of local governments, it was never
public utility facilities and services… their intention to create an imperium in imperio
and install an intra-sovereign political
Although Sining Makulay Inc.’s exclusive subdivision independent of a single sovereign
franchise had a life term of 25 years, it was cut state.
short by the advent of the 1986 revolution. Upon
President Aquino’s assumption of power, she
issued E.O. no. 205 opening the CATV industry to
all citizens of the Philippines. It mandated the
NTC to grant Certificates of Authority to CATV
operator and to issue the necessary
implementing rules and regulations.

On September 9, 1997, President Ramos issued

E.O. No. 436 prescribing policy guidelines to
govern CATV operation in the Philippines. It must

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2. Power of the President over to not exceed P1,000.00 in provinces and cities
and P700.00 in municipalities. Acting on LBC 55
LGUs
City Auditor issued notice of disallowance and
--------o-------- asked the judges to reimburse the amount they
received in excess of P1,000.00.
JUDGE DADOLE v. COA
G.R. NO. 125350 | December 3, 2002 Petitioner judges filed a protest against the
Corona J. notice of disallowance, but the same was treated
as a motion for reconsideration and indorsed the
DOCTRINE: Although our constitution same to COA. COA rendered a decision denying
guarantees autonomy to LGUs, the exercise of the motion for reconsideration.
local autonomy remains subject to the power of
control by congress and by the power of ISSUE: Whether or not LBC 55 is void for
supervision by the President. infringing local autonomy of Mandaue City.

In administrative law, supervision means HELD: YES. LBC 55 provides that the additional
overseeing or the power or authority of an monthly allowances to be given by a local
officer to see that subordinate officers perform government unit should not exceed P1,000 in
their duties. If the latter fail or neglect to fulfill provinces and cities and P700 in municipalities.
them, the former may take such action or step as Section 458, par. (a)(1)(xi), of RA 7160, the law
prescribed by law to make them perform their that supposedly serves as the legal basis of LBC
duties. Control, on the other hand, means the 55, allows the grant of additional allowances
power of an officer to alter or modify or nullify "when the finances of the city government
or set aside what a subordinate officer ha[s] allow." The said provision does not authorize
done in the performance of his duties and to setting a definite maximum limit to the
substitute the judgment of the former for that of additional allowances granted to judges. Thus,
the latter. we need not belabor the point that the finances
of a city government may allow the grant of
Officers in control lay down the rules in the additional allowances higher than P1,000 if the
performance or accomplishment of act. If these revenues of the said city government exceed its
rules are not followed, they may, in their annual expenditures.
discretion, order the act undone or redone by
their subordinates or even decide to do it Setting a uniform amount for the grant of
themselves. supervision does not cover such additional allowances is an inappropriate way of
authority. Supervising officials merely see to it enforcing the criterion found in Section 458, par.
that the rules are followed, but they themselves (a)(1)(xi), of RA 7160. The DBM over-stepped its
do not lay down such rules, nor do they have the power of supervision over local government
discretion to modify or replace them. If the rules units by imposing a prohibition that did not
are not observed, they may order the work done correspond with the law it sought to implement.
or redone, but only to conform to such rules. In other words, the prohibitory nature of the
circular had no legal basis.
FACTS: In 1986, RTC and MTC judges of Mandaue
City started receiving monthly allowances of Furthermore, LBC is void on account of its lack of
P1,260 each through yearly appropriation publication. Administrative rules and regulations
ordinance enacted by the SP. In 1991, Mandaue must also be published if their purpose is to
City increased the amount to P1,500 for each. On enforce or implement existing law pursuant to a
March 15, 1994 DBM issued Local Budget valid delegation.
Circular No. 55 which limits the honorarium rates

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