PUB Corp Reviewr

8/6/2019 PUB Corp Reviewr

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LAW ON PUBLIC CORPORATIONS

A. General Principles

1. CORPORATION—an artificial being created by operation of law, having the right of

succession and the powers, attributes and properties expressly authorized by law or incidentto its existence.a. PUBLIC CORPORATION—one formed and organized for the government of a portion of the State.

2. Classes of Corporation:

a. Public or Municipal—a body politic and corporate constituted by incorporationof inhabitants of city or town for purposes of local government thereof or asagency of State to assist in civil government of the country; one formed andorganized for the government of a portion of the State.

b. Private—one formed for some private purpose, benefit, aim or end.

c. Quasi-Public—a private corporation that renders public service or suppliespublic wants.

d. Quasi-corporation—public corporations created as agencies of State for narrowand limited purpose.

3. Elements of Municipal Corporationa. Legal creation or incorporationb. Corporate namec. Inhabitantsd. Territory

4. Dual Nature of Municipal Corporation●Every local government unit created or organized is a body politic and corporate

endowed with powers to be exercised by it in conformity with law. As such, it shall exercisepowers as political subdivision of the National Government and as a corporate entityrepresenting the inhabitants of its territory.

a. Public/Governmental—it acts as an agent of the State for the government of the territory and the inhabitants within the municipal limits; it exercises bydelegation a part of the sovereignty of the State.

b. Private/Proprietary—it acts in a similar category as a business corporation,performing functions not strictly governmental or political; it stands for thecommunity in the administration of local affairs. It acts as a separate entity for itsown purposes and not as a subdivision of the State.

5. Criterion to determine whether corporation is public: The relationship of the corporation to the State, i.e., if created by the State as its own

agency to help the State in carrying out its governmental functions, then it is public,otherwise, it is private.

6. De Facto Municipal Corporation--a corporation that may exist in fact although not point of law because of certain defects

in some essential features of its incorporation.

7. Elements of De Facto Municipal Corporation:a. A valid law authorizing incorporationb. An attempt in good faith to organize under itc. A colorable compliance with the lawd. An assumption of corporate powers

8. Three forms of decentralization:

a. Devolution- is the transfer of power and authority from the nationalgovernment to LGUs as the territorial and political subdivisions of the State. Thenature of power transfer is political and the approach is territorial or areal.

b. Deconcentration- is the transfer of power, authority or responsibility, orthe discretion to plan, decide and manage from central point or local levels, butwithin the central or national government itself. The nature of the transfer isadministrative and the approach is sectoral.

c. Debureaucratization- is the transfer of some public functions andresponsibilities, which the government may perform, to private entities or non-

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governmental organizations; it is people’s empowerment or participation in localgovernance.

●Decentralization of Administration- the central government delegates administrativepowers to political subdivisions in order to broaden the base of government power.

●Decentralization of Power (Political Decentralization)- involves abdication of political power in favor of LGU’s declared autonomous. (Limbonas vs. Mangelin, 170SCRA 786)

NOTE:●Local Autonomy- is self-governing. It is the granting of more powers, authority,

responsibilities and resources to the lower or local levels of a government system. Theprinciple of local autonomy under the 1987 Constitution simply means decentralization. Itdoes not make the local government sovereign within the state or an “imperium in imperio.

Among the regulatory powers of the National Government Agencies transferred or devolved

to the LGUs include the following:

1. The reclassification of agricultural lands- DAR to cities and municipalities2. Enforcement of environmental laws- DENR to all LGUs3. Inspection of food products and quarantine- DOH to cities and municipalities4. The enforcement of the National Building Code- DPWH to cities and municipalities5. The processing and approval of subdivision plans- HLURB to cities and municipalities6. The operation of tricycles- LTFRB to cities and municipalities7. The establishment of cockpits and holding of cockfights- Philippine GamefowlCommission to cities and municipalities

Among the basic services and facilities devolved to LGUs include:

1. Agricultural extension and on-site research of the Department of Agriculture;2. Community-based forestry project of the DENR;3. Field health and hospital services and other tertiary health services of the DOH;4. Public works and infrastructure projects funded out of local funds of the DPWH;5. The school building program of the DECS;6. Social welfare services of the DSWD;7. Tourism facilities and tourism promotion and development of the DOT;8. Telecommunications services for provinces and cities of the DOTC;9. Housing projects for provinces and cities; and10. Other services such as investment support.

9. How local autonomy enhances governmental and corporate powers of LGUs:

a. Every local government unit shall have:i. Full autonomy in their exercise of proprietary rights and management of economicenterprises.ii. Full authority to secure domestic or foreign grants without the approval of the NGAsconcerned, unless these are projects with national security implications, andiii. Financial undertakings for LGUs for mutual advantage thru loans and assistance tocalamity-stricken LGUs.

B. R.A. 7160—Policy and Application; Constitutional Provisions

1. Effectivity—January 1, 19922. Scope of Application (Sec. 4, RA 7160)

Applicable to:a. all provincesb. citiesc. municipalitiesd. barangayse. and other political bodies as may be created by law, andf. to the extent provided in the LGC (i.e. devolution of powers):

-officials-offices, or-agencies of the National Government

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3. Rules of Interpretation (Sec. 5, RA 7160)a. Any provision on a local government unit shall be liberally interpreted itsfavor, and in case of doubt, any question thereon shall be resolved in favor of devolution of powers and of the lower local government unit. Any fair andreasonable doubt as to the existence of the power shall be interpreted in favor of thelocal government unit concerned;

b. In case of doubt, any tax ordinance or revenue measure shall be construed strictlyagainst the local gov’t unit enacting it, and liberally in favor of the taxpayer. Any taxexemption, incentive or relief granted by any local gov’t unit pursuant to theprovisions of this Code shall be construed strictly against the person claiming it;

c. The general welfare provisions in this Code shall be liberally interpreted to givemore powers to local gov’t units in accelerating economic development andupgrading the quality of life for the people in the community.

d. Rights and obligations existing on the date of effectivity of this Code and arisingout of contracts or any other source of prestation involving a local gov’t unit shallbe governed by the original terms and conditions of said contracts or the law inforce at the time such rights were vested.

e. In the resolution of controversies arising under this Code where no legal provisionor jurisprudence applies, resort may be had to the customs and traditions in theplace where the controversies take place.

4. Declaration of State Policy over LGU’s (Sec. 2, RA 7160)

a. The territorial and political subdivisions of the State shall enjoy genuine andmeaningful local autonomy to enable them to attain their fullestdevelopment as self-reliant communications and make them more effectivepartners in the attainment of national goals.

b. To ensure the accountability of local gov’t units through the institution of effective mechanisms of recall, initiative and referendum.

c. To require all national agencies and offices to conduct periodic consultationswith appropriate local gov’t units, non-governmental and people’sorganizations and other concerned sectors of the community before anyproject or program is implemented in their respective jurisdictions.

II. INTER-GOVERNMENTAL RELATIONS1. National Government and Local Government Units

a. The President shall exercise general supervision over LGUs.i. The President shall exercise supervisory authority directly over provinces, highly

urbanized cities and independent component cities.ii. The President shall exercise supervision over component cities and municipalities,

through province, and over barangays through city and municipality. (Sec. 25)

The President’s power of general supervision over LGUs includes the authority toinvestigate and impose disciplinary measures (suspension or removal) uponelective local officials.

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b. The city or municipality, through the mayor, shall ensure that barangays act withinthe scope of their powers.

c. The governor shall review all executive orders promulgated by the mayor. The mayorshall review orders promulgated by the punong barangay.

The Sangguniang Panlalawigan of a province reviews all ordinances enacted by theSangguniang Panlungsod of component cities and Sangguniang Bayan of municipalities undertheir jurisdiction. In turn, the Sangguniang Panlungsod and Sangguniang Bayan review allordinances passed by the Sannguniang Barangay under the jurisdiction.

Likewise, the Sangguniang Panlalawigan of a province exercises the quasi-judicial function(administrative disciplinary authority) of hearing and deciding administrative cases involvingelective municipal and component city officials under their jurisdiction. In turn, the SangguniangPanlungsod and Sangguniang Bayan exercise disciplinary authority over elective barangayofficials within their jurisdiction.

3. Relations with People’s Organizations and Non-Government Organizations

a. Private Sector Participation in Local GovernancePurpose: to ensure the viability of local autonomy as an alternative strategy for sustainabledevelopment. LGUs shall encourage private-sector participation in the delivery of basicservices.

b. Role of POs, NGOs in the LGUs:●LGUs shall promote the establishment and operation of people’s and non-governmentalorganizations as active partners.

●LGUs may enter into joint venture and cooperative undertakings with people’s and non-

governmental organizations particularly in the following:1. delivery of certain basic services

2. capability building and livelihood projects; and3. developing local enterprises designed to improve productivity and income,diversifies agriculture, spur rural industrialization, and enhance the economic and social well-being of the people.

c. Special Local Bodies where the private sector may participate in localgovernance:

1. Local Development Council-a duly constituted body which shall assist the corresponding Sanggunian in setting the

direction of economic and social development, and coordinating development efforts in itsterritorial jurisdiction.

2. Prequalification, Bids and Awards Committee (PBAC)●responsible for the conduct of prequalification of contractors, bidding, evaluation of

bids, and the recommendation of awards concerning local infrastructure projects.●governor or the city or municipality mayor: Chairman

3. Local Peace and Order Council, pursuant to E.O. No.309, as amended, Series of 1988.

4. Local School BoardThe DECS shall consult the Board on the appointment of division superintendents,

district supervisors, school principals, and other school officials.

5. Local Health Board

6. People’s Law Enforcement Board (PLEB)

III. CREATION, CONVERSION, DIVISION, MERGER AND CONSOLIDATION, ANDABOLITION OF LGUs

A. Creation of LGUs:A local government unit may be created, divided, merged, abolished, or its boundaries

substantially altered by law enacted by Congress in the case of a province, city, municipality, or

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other political subdivisions, or by Sanggunian Panlalawigan or Sanggunian Panlungsodordinance in the case of a barangay. (Sec.6) NOTE:●nature of the power to create: LEGISLATIVE

1. While the power to create barangays has been delegated to Sanggunian Panlalawigan andSangguniang Panlungsod, Congress, in order to enhance the delivery of basic services inindigenous cultural communities, may create barangays in such communities notwithstandingthe requirements set forth by law. (Sec.385a, LGC)

2. The creation or conversion of a local government unit to another level shall be based on thefollowing verifiable indicators of viability and projected capacity to provide services:

a. Sufficient income andb. Population and/orc. Land area

NOTE: Compliance with the above-cited indicators shall be attested by the Department of Finance, the National Statistics Office and the Land Management Bureau of the DENR,respectively.

3. Necessity of Fixing Corporate Limits: As a matter of general rule, municipal corporations cannot, without legal authorization,exercise its powers beyond its own corporate limits. It is necessary that it must have itsboundaries fixed, definite and certain, in order that may be identified and that all may know theexact scope or section of territory or geographical division embraced within the corporate limitsand over which the municipal corporation has jurisdiction. A description of the boundaries of amunicipal corporation is said to be an essential part of its charter and necessary to corporateexistence. An incorporation is void where the boundaries of the municipal corporation are notdescribed with certainty.

4. Manner of Creation1. Creation of Barangays:

a. Role: serves as the primary planning and implementing unit of government policies,

plans programs, projects and activities in the community, and as a forum wherein the collectiveviews of the people may be expressed, crystallized and considered, and where disputes may beamicably settled.

b. Who creates: a barangay may be created, divided, merged, abolished or itsboundary substantially altered by law or by an ordinance of the Sangguniang Panlalawigan orSangguniang Panlungsod. Where a barangay is created by an ordinance of the SangguniangPanlalawigan, the recommendation of the Sangguniang Bayan concerned shall be necessary.

c. Substantive Requisites:1. Population- at least 2000 inhabitants

●Except in cities and municipalities within Metro Manila or in highly urbanized cities—must be at least 5000 inhabitants

2. Income- no minimum income requirement

3. Land Area- no minimum requirement, but it must be contiguous but it need not becontiguous if the barangay is comprised with two or more islands.

NOTE:●The creation of the new barangay shall not however reduce the population of the originalbarangay to less than the minimum requirement prescribed in the Code. (Sec.386, LGC)

2. Creation of Municipalities a. Role: serves primarily as a general purpose government for the coordination anddelivery of basic, regular and direct services and effective governance of the inhabitants within

its territorial jurisdiction.

b. Who creates: may be created, divided, merged, abolished or its boundarysubstantially altered only by an act of Congress subject to the criteria established by the Code.

c. Substantive Requisites:1. Population- at least 25,000 inhabitants2. Income- average annual income of at least P2.5 million for the last two consecutive

years based on the 1991 constant prices.3. Land Area- a contiguous territory of 50 square kilometers.

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3. Creation of Component Citiesa. Role- serves primarily as a general purpose government for the coordination and

delivery of basic, regular and direct services and effective governance of the inhabitants withinits territorial jurisdiction.

b. Who creates- may be created, divided, merged or abolished, or its boundary

substantially altered only by an act of Congress subject to the criteria provided in the Code.

c. Substantive Requisites:1. Population- at least 150,000 inhabitants2. Income- at least P100 million for the last two consecutive years3. Land Area- contiguous territory of at least 100 square kilometers

NOTE: ●The Internal Revenue Allotments shall be included in the computation of the averageannual income of the municipality for purposes of determining whether the municipality may bevalidly converted into a city. Income is defined in the LGC to be all revenues and receiptscollected or received forming the gross accretions of funds of the local government unit. TheIRAs are regular and recurring income and not merely special funds or transfers and/orbudgetary aids from the national government or non-recurring income. The IRAs regularly andautomatically accrue to the local treasury without need of any further action on the part of thelocal government unit (Alvarez vs. Guingona, 252 SCRA 695).

4. Conversion of a Component City into a Highly Urbanized Citya. If a component city shall have met the minimum requirements for a highly urbanized

city, it shall be the duty of the President to declare the city as highly urbanized city upon: (1)proper application and (2) upon ratification in a plebiscite by the majority of registered voterstherein.

b. Substantive Requisites:1. Population- at least 200,000 inhabitants2. Income- at least P50 million

5. Creation of Provincesa. Role- as a political and corporate unit of government, it serves as a dynamic

mechanism for development processes and effective governance of local government unitswithin its territorial jurisdiction.

b. Who creates- may be created, divided, merged, or abolished, or its boundarysubstantially altered, only by an act of Congress, subject to the satisfaction of the criteria setforth by the LGC.

c. Substantive Requirements:1. Population- not less than 250,000 inhabitants2. Income- average annual income of at least P20 million

3. Land Area- a contiguous territory of at least 2000 square kilometers

NOTE:●BP 885, which created the Province of Negros del Norte was declared unconstitutional

because it did not comply with the land area criterion prescribed under the LGC. The use of theword territory in Sec. 17 of the LGC refers only to the physical mass of land area, not to thewaters comprising a political entity. It excludes the waters over which the political unitexercises control (Tan vs. Comelec, 142 SCRA 727).

6. Status of Sub-provinces Existing sub-provinces are converted into regular provinces upon the approval by a majorityvotes cast in a plebiscite to be held in the said sub-province and the original province directlyaffected. (Sec.462, LGC)

7. Autonomous RegionsThe Philippine Constitution mandates the creation of autonomous regions in Muslim

Mindanao and in the Cordilleras consisting of provinces, cities, municipalities, and geographicalareas sharing common and distinctive historical and cultural heritage, and economic and socialcultures. (Sec.15, Art.10, PC) NOTE:

●RA 6734, the organic act establishing the Autonomous Regional Government of MuslimMindanao was held valid by the Supreme Court. (Datu Firdausi Abbas vs. COMELEC, 179SCRA 287). However, the sole Province of Ifugao which, in the plebiscite, alone voted in favor

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of RA 6766, cannot validly constitute the Autonomous Region of the Cordilleras. (Ordillo vs.COMELEC, 192 SCRA 100)

8. Special Metropolitan Political SubdivisionsThe Congress may, by law, create special metropolitan political subdivisions, but the

component cities and municipalities shall retain their basic autonomy and shall be entitled totheir own local executives and legislative assemblies. The jurisdiction of the metropolitanauthority that will be thereby created shall be limited to basic services requiring coordination.(Sec. 11, Art. X, PC)

NOTE:●With the passage of RA 7924, Metropolitan Manila was declared as a “special

development and administrative region” and the administration of “metrowide basic servicesaffecting the region was placed under a “development authority” referred to as the MetropolitanManila Development Authority (MMDA), whose functions were without prejudice to theautonomy of the affected local government units. The law does not grant police nor legislativepowers to MMDA. Even the Metro Manila Council, the governing board of the MMDA, has notbeen delegated any legislative power. Clearly, MMDA is not a political unit. There is no grant of authority to enact ordinances and regulations for the general welfare of the inhabitants of themetropolis. MMDA cannot open for public use a private road in a private subdivision (MMDAvs. Bel-Air Village Association, Inc., G.R. No. 135962, March 27, 2000).

9. Attack against invalidity of incorporationNo collateral attack shall lie; an inquiry into the legal existence of a municipal

corporation is reserved to the State in a proceeding for quo warranto or other direct proceeding.But this rule applies only when the municipal corporation is, at least, a de facto municipalcorporation.

10. PLEBISCITE REQUIREMENT: Who shall participateSec. 10 of the LGC provides that the creation, division and merger, abolition or

substantial alteration of the boundaries of local government units must be approved by amajority of votes cast in a plebiscite in the political unit or units directly affected. Suchplebiscite shall be conducted by the COMELEC within 120 days from the date of the effectivity of the law. The completion of the publication of the law should be the reckoning point in

determining the 120-day period within which to conduct the plebiscite, not from the date of itsapproval when the law had not yet been published. Since publication is indispensable for theeffectivity of a law, a plebiscite can be scheduled only after the law creating a city took effect.(Cawaling vs. COMELEC, Oct. 26, 2002)

The plebiscite for the creation of a new province or municipality shall include theparticipation of the residents of the mother province or mother municipality in order to conformto the constitutional requirement. (Padilla vs. COMELEC, 214 SCRA 735)

●In the conversion of a municipality into a component city, however, only the registeredvoters of the municipality sought to be converted into a component city, shall participate in theplebiscite.

Summary of Substantive Requirements in the Creation of LGUs

LGU Created Income Population Land area

BarangayNo minimumrequirement

2,000 but 5,000 forMetro Manila andhighly urbanized

cities

No minimumrequirement

Municipality P2.5 million 25,000, and 50 sq.kmComponent City P100 million 150,000 or 100 sq.km.Highly Urbanized

CityP50 million 200,000

No minimumrequirement

Province P20 million 250,000 or 2,000 sq.km.

11. Beginning of Corporate Existence

When a new local government unit is created, its corporate existence shall commenceupon the election and qualification of its chief executive and a majority members of theSanggunian, unless some other date is fixed therefore by law or ordinance creating it. (Sec.14,LGC)

12. Division and Merger of LGUsThe division and merger of local government units shall comply with the same

requirements for their creation. The income, population or land area shall not be reduced toless than the minimum requirements. Likewise, the income classification of the original local

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government unit shall not fall below its current income classification prior to such division.(Sec.8, LGC)

13. Abolition of LGUsA local government unit may be abolished when its income, population or land area has

been irreversibly reduced to less than the minimum standards prescribed for its creation underthe LGC, as certified by the national agencies to Congress or to the Sanggunian concerned.Likewise, the law or, ordinance abolishing an LGU shall specify the province, city, municipality,or barangay with which the local government unit sought to be abolished will be incorporated ormerged. (Sec.9, LGC)

14. Effects of Annexation/Consolidation of Municipal Corporations1. On the legal existence of the territory annexed- Unless otherwise provided for by

law, the annexation of one municipal corporation to another will dissolve theannexed territory. It shall become part of the annexing corporation and will fallunder the jurisdiction of the latter.

2. On the laws and ordinances of the annexed corporation- In the absence of anyprovision of law to the contrary, when a territory is annexed to a municipalcorporation, it shall become subject to all the laws and ordinances by which theannexing corporation is governed.

3. On the right of officers or employees of the annexed or consolidated territory to

continue to hold their offices- Subject to what the legislature may provide uponannexation, the officers and employees of the annexed or consolidated territory shallterminate their official relation with their offices.

4. On the title to the property of the annexed territory- When a municipal corporation isannexed to another, the annexing territory shall acquire title to the property of theannexed territory at the time of annexation without compensation unless theannexing statute provides otherwise. Where the annexed territory, however, formspart of a municipality from which it is taken, the legislature may provide for thepayment of compensation for the indebtedness incurred on account of the propertytaken.

With regard to public buildings and improvements located in theannexed territory, the annexing territory is not required to pay for said buildings orimprovements as they have already been paid for by the annexed territory. It would

be otherwise if there exists an indebtedness on said buildings in which case, theannexing state may be required to share in the payment of said indebtedness.

5. On the debts and obligations of the annexed territory- It has been stated that debtsand obligations of a municipal corporation contracted before its annexation toanother territory shall be assumed by the annexing territory in the absence of anyprovision to the contrary. The same rule applies of consolidation where theconsolidating municipal corporation is held responsible for the indebtedness andobligations incurred by the territories which are consolidated.

15. Effects of Division of LGUsOn the legal existence of the original corporation: The division of municipal corporation

extinguishes the corporate existence of the original municipality.On the property, powers and rights of the original corporation: Unless the law provides

otherwise, when a municipal corporation is divided into two or more municipalities, eachmunicipality acquires title to all the property, powers, rights and obligations falling within itsterritorial jurisdiction.

IV. GENERAL POWERS AND ATTRIBUTES OF LGUsA. Powers in general

1. Sources:a. Sec. 25, Art II: Secs. 5,6 and 7, Art. X, Philippine Constitutionb. Statutes, e.g., R.A. 7160c. Charter (particularly of cities)d. Doctrine of the right of self-government, but applies only in States which adhere to the

doctrine.

2. Classifications:a. Express, implied and inherentb. Public or governmental, private or proprietaryc. Intramural or extramurald. Mandatory and directory, ministerial and discretionary

3. Execution of powers:

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a. Where the statute prescribes the manner of exercise, the procedure must be followed.b. Where the statute is silent, local government units have discretion to select reasonable

means and methods of exercise.

B. GOVERNMENTAL POWERS:1. General Welfare Clause- the statutory grant of police power to local government units.●Limitations:a. Express grant by lawb. Exercisable only within the territorial limits of the LGU, except for protection of water supplyc. Equal protection claused. Due process clausee. Must not be contrary to the Constitution and the laws.

NOTE:A local government unit may exercise delegated governmental powers:

●Police power (under the General Welfare Clause)● Power of Taxation● Power of Eminent Domain

a. Requisites for the validity of a municipal ordinance:

1. Must not contravene the Constitution and any statute;2. Must not be unfair or oppressive;3. Must not be partial or discriminatory;4. Must not prohibit, but may regulate trade which is not illegal per se;5. Must not be unreasonable; and6. Must be general in application and consistent with public policy.

●An ordinance extending burial assistance of P500 to a bereaved family whose grossincome does not exceed P2,000 a month, has been upheld by the Supreme Court as a validexercise of police power. This power is organic and flexible. The care for the poor is generallyrecognized as a public duty. The support for the poor has long been an accepted exercise of police power in the promotion of common good. The police power of a municipal corporation isbroad and commensurate with the duty to provide for the real needs of the people in theirhealth, safety, comfort, and convenience as consistently as may be with private rights. It

extends to all the great public needs and in a broad sense includes all legislation and almostevery function of the municipal government. (Binay vs. Domingo, 201 SCRA 508)

2. Basic Services and Facilities:§17, LGC—(a) Local government units shall endeavor to be self-reliant and shall continue

exercising the powers and discharging the duties and functions currently vested upon them. They shall also discharge the functions and responsibilities of national agencies and officesdevolved to them pursuant to this Code. Local government units shall likewise exercise suchother powers and discharge such other functions and responsibilities as are necessary,appropriate, or incidental to efficient and effective provision of the basic services and facilitiesenumerated under the Code.

●Devolution refers to the act by which the national government confers powers and authorityupon the various local government units to perform specific functions and responsibilities. Thisincludes the transfer to the local government units of the records, equipment and other assetsand personnel of national agencies and offices.

3. Power to generate and apply resources (§18, LGC)The exercise by local governments of the power to tax is ordained by the present

Constitution (§5, Art. X, Phil. Constitution). Only guidelines and limitations that may beestablished by Congress can define and limit such power of local governments. But localgovernments have no power to tax instrumentalities of the National Government. PAGCORbeing an instrumentality of the National Government is therefore exempt from local taxes.(Basco vs. PAGCOR, 197 SCRA 52)

●Main Sources of Revenues of LGUsA. Under the Constitution

1. taxes, fees and charges (§5, Art. X)2. share in the national taxes- Internal Revenue Allotment

3. share in the proceeds of the utilization and development of the national wealthwithin their areas (§7, Art. X)

B. Under the Local Government Code1. floating of bonds2. grants/aids

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●All LGUs are empowered to create their own sources of revenue and to levy taxes, fees andcharges subject to the provisions on local taxation consistent with the basic policy of localautonomy. The Sanggunian concerned through an ordinance has the power to impose a tax,fee or charge. The procedural requirements of public hearing and publication must be observedfor purposes of compliance with the requirements of due process.

C. Fundamental Principles on Local taxation1. Taxation shall be uniform in each local government unit;2. Taxes, fees, charges and other impositions shall:a. be equitable and based as far as practicable on the taxpayer’s ability to pay;b. be levied and collected only for public purposes;c. not be unjust, excessive, oppressive or confiscatory;d. not be contrary to law, public policy, national economic policy, or in restraint of trade.3. The collection of taxes, fees, charges and other impositions shall in no case be let to any

private persons;

4. The revenue collected pursuant to the provisions of the LGC shall inure solely to thebenefit of, and be subject to disposition by, the local government unit levying the tax,fee, charge or other imposition unless otherwise specifically provided herein; and

5. Each local government unit shall, as far as practicable, evolve a progressive system of taxation.

NOTES:●Shares of LGUs in the proceeds of national taxes

The share of the LGU in Internal Revenue Taxes is 40%. The 40% IRA is allocated toLGUs as follows: for provinces and cities- 23%; for municipalities- 34%; for barangays- 20%.

No less than 20% of the IRA is allotted for development project by the local unit from theIRA.

●Shares in National Wealth40% of the gross collection from mining taxes, royalties, forestry and fishery charges,

and from each share in any joint effort in utilizing and developing the national wealth within theLGU’s jurisdiction and shall be remitted without need for further action to the local treasurer ona quarterly basis within five days after the end of every quarter.

LGUs shall receive 1% of the gross sale or receipts of the preceding calendar year and

40% of taxes, fees or charges that GOCCs would have paid if not tax exempt, whichever ishigher.

●How National Wealth is DistributedIf the national wealth is located in one province, the province shall receive 20%, the

component city/municipality shall receive 45% and the barangays 35%.If the national wealth is located in two or more LGUs, distribution shall be based on the

following: population- 70% and land area- 30%.If the national wealth is located in highly urbanized city or independent component city,

the HUC or ICC shall receive 65% and the barangays shall receive 35%.

D. Fundamental Principles of Local Fiscal Administration1. No money shall be paid out of the local treasury except in pursuance of an

appropriation ordinance or law;2. Local government funds and monies shall be spent solely for public purposes;

3. Local revenue is generated only from the sources expressly authorized by law orordinance, and collection thereof shall at all times be acknowledged properly;

4. All monies officially received by a local government officer in any capacity or on anyoccasion shall be accounted for as local funds, unless otherwise provided by law;

5. Trust funds in the local treasury shall not be paid out except in fulfillment of thepurpose for which the trust is created or the funds received.

6. Every officer of the local government unit whose duties permit or require thepossession or custody of local funds shall be properly bonded, and such officer shall beaccountable and responsible for said funds and for the safekeeping thereof in conformity withthe provisions of law.

7. Local governments shall formulate sound financial plans, and the local budgets shall

be based on functions, activities and projects, in terms of expected results.8. Local budget plans and goals shall, as far as practicable, be harmonized with national

development plans, goals and strategies in order to optimize the utilization of resources and toavoid duplication in the use of fiscal and physical resources.

9. Local budgets shall operationalize approved development plans.10. Local government units shall ensure that their respective budgets incorporate the

requirements of their component units and provide for equitable allocation of resources amongthese component units.

11. National planning shall be based on local planning to ensure that the needs andaspirations of the people as articulated by the local government units in their respective local

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development plans are considered in the formulation of budgets of national line agencies oroffices.

12. Fiscal responsibility shall be shared by all those exercising authority over thefinancial affairs, transactions, and operations of the local government units.

13. The local government unit shall endeavor to have a balanced budget in each fiscalyear of operation.

4. Eminent Domain (§19, LGC)

The power to expropriate private property has been delegated by Congress to LGUs under§19, LGC. The exercise by LGUs of the power of eminent domain are subject to the usualconstitutional limitations such as necessity, private property, taking, public use, justcompensation and due process of law.

The determination of whether there is genuine necessity for the exercise of the power of eminent domain is a justiciable question when exercised by the LGUs and generally a politicalquestion when exercised by Congress.

NOTE:Private property already devoted to public use can still be a subject of expropriation byCongress but not by LGUs.

The additional limitations on the exercise of the power of eminent domain by LGUs are, asfollows:1. Exercised only by the local chief executive, acting pursuant to a valid ordinance;2. For public use or purpose or welfare, for the benefit of the poor and the landless;3. Only after a valid and definite offer had been made to, and not accepted by, the owner;4. An LGU shall file a complaint for expropriation on the strength of an ordinance and not amere resolution passed by the Sanggunian. (Municipality of Paranaque vs. VM Realty Corp., 292SCRA 676)

●The promulgation of the ordinance authorizing the local chief executive to exercise the powermust be promulgated prior to the filing of the complaint for eminent domain with the propercourt, and not after the court shall have determined the amount of just compensation to which

the defendant is entitled. (Heirs of Suguitan vs. City of Mandaluyong, 328 SCRA 137)

NOTE:●An LGU may immediately take possession of the property upon filing of expropriationproceedings and deposit in court of 15% of the FMV of the property. 5. Other powers

a. Reclassification of lands (§20, RA 7160)A city or municipality may, through an ordinance passed after conducting public

hearings for the purpose, may authorize the reclassification of agricultural lands andprovide for the manner of their utilization or their disposition:

i. When the land ceases to be economically feasible and sound for agriculturalpurposes as determined by the Department of Agriculture;

ii. Where the land shall have substantially greater economic value for residential,commercial or industrial purposes as determined by the sanggunian; provided thatsuch reclassification shall be limited to the following percentage of the totalagricultural land area at the time of the passage of the ordinance:

●for highly urbanized cities and independent component cities: 15%●for component cities and 1st to 3rd class municipalities: 10%●for 4th and 6th class municipalities: 5%

●Provided that agricultural land distributed to land reform beneficiaries shall not be affected bysuch reclassification.

b. Closure and opening of roads (§21, RA 7160)

A local government unit may, pursuant to an ordinance, permanent ortemporarily close or open any local road, alley, park, or square falling within its jurisdiction,provided that in case of permanent closure, such ordinance must be approved by at least 2/3 of all the members of the sanggunian, and when necessary, and adequate substitute for the publicfacility shall be provided.

NOTE:●Additional limitations in case of permanent closure:

i. Adequate provision for the maintenance of public safety must be made;

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d. Boundary disputes involving a component city or municipality on the onehand and a highly urbanized city on the other, or two or more highlyurbanized cities, shall be jointly referred for settlement to the respectivesanggunians of the parties.

Procedure:In the event the sanggunian fails to effect an amicable settlement within 60 days from

the date the dispute was referred thereto, it shall issue a certification to that effect. Thereafter,the dispute shall be formally tried by the sanggunian concerned which shall decide the issuewithin 60 days from the date of the certification referred to above.

Within the time and manner prescribed by the Rules of Court, any party may elevate thedecision of the sanggunian concerned, any party may elevate the decision of the sanggunianconcerned to the proper Regional Trial Court having jurisdiction over the area in dispute. TheRegional Trial Court shall decide the appeal within one (1) year from the filing thereof. Pendingfinal resolution of the case, the disputed area prior to the dispute shall be maintained andcontinued for all legal purposes. (§119, LGC)

e. Authority over police units (§6, Art. XVI, Philippine Constitution) The State shall establish and maintain one police force, which shall be national in scope

and civilian in character, to be administered and controlled by a National Police Commission. The authority of local executives over the police units in their jurisdiction shall be provided bylaw.

6. LOCAL LEGISLATIVE POWERA. Products of legislative action

1. Ordinance- prescribes a rule of conduct.2. Resolution- of temporary character, or expresses sentiment.

B. Requisites for validity:1. Must not contravene the Constitution and any statute2. Must not be unfair or oppressive3. Must not be partial or discriminatory4. Must not prohibit, but may regulate trade5. Must not be unreasonable6. Must be general in application and consistent with public policy.

•Approval of ordinances:Ordinances passed by the sangguniang panlalawigan, sangguniang panlungsod or

sangguniang bayan shall be approved:If the local chief executive approves the same, affixing his signature on each and every pagethereof.If the local chief executive vetoes the same, and the veto is overridden by 2/3 vote of all themembers of the sanggunian.

●Where petitioner was charged with falsification of a public document for approving aresolution which purportedly appropriated money to pay for the terminal leave of 2 employeeswhen actually no such resolution was passed, the petitioner argued that his signature on theresolution was merely ministerial. The Supreme Court disagreed, saying that the grant of the

veto power accords the Mayor the discretion whether or not to approve the resolution. (De LosReyes vs. Sandiganbayan, G.R. 121215, Nov. 13, 1997)

NOTES:

1. The vice governor, the vice mayor and the punong barangay shall be the presiding officer of the sanggunians but shall vote only in case of tie.

2. In case of inability of the presiding officer, the members shall elect a temporary presidingofficer from among themselves. (§49)

3. For disorderly behavior and absence without justifiable cause for 4 consecutive sessions, a

member may be censured, reprimanded, excluded from the session, suspended for not morethan 60 days, or expelled. Suspension or expulsion shall require concurrence of at least 2/3 of all sanggunian members. A member sentenced by final judgment to imprisonment for at leastone year for a crime involving moral turpitude shall be automatically expelled. (§50)

4. Every sanggunian member, upon assumption of office shall make a full disclosure of hisbusiness and financial interests. He shall also disclose any business, financial or professionalrelationship or any relationship within the 4th degree which he may have with anyone affectedby any ordinance or resolution of the sanggunian which involves a conflict of interests.

●Such relationship includes:

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i. Investment in the entity to which the ordinance may applyii. Contracts with any person to which the ordinance may apply

●Conflict of interests refers to a situation where a sanggunian member may not act inthe public interest due to personal consideration that may affect his judgment to the prejudiceof the public. (§51)

5. A special session may be called by the local chief executive or a majority of the sanggunianmembers. Unless concurred in by 2/3 vote of the members present, no matter may bereconsidered at the special session except those stated in the notice. (§52)6. A majority of all the members of the sanggunian shall constitute a quorum. (§53)

7. An ordinance shall be approved by the local chief executive by affixing his signature in eachand every page thereof.

8. The governor or mayor may veto any item in the following cases:a. Particular item or items in an appropriations ordinanceb. Ordinance adopting a local development plan and public investment programc. Ordinance directing the payment of money or creating liability. (§55)

9. The grounds for veto are:a. The ordinance is ultra vires

b. Or that it is prejudicial to public welfare

10. The veto shall be communicated to the sanggunian within 15 days in the case of a provinceand 10 days in the case of a city or municipality; otherwise, the ordinance shall be deemedapproved, as if he signed it. The sanggunian may override the veto by 2/3 of all its members.(§54)

11. Ordinances enacted by the sangguniang barangay shall, upon approval by a majority of allits members, be signed by the Punong Barangay. The latter has no veto power.

12. Reviewa. The sangguniang panlalawigan shall review ordinances and resolution of cities and

municipalities to determine if they are within their power. (§56)

Procedure:Within 3 days after approval, the secretary of the sangguniang panlungsod (in

component cities) or sangguniang bayan shall forward to the sangguniang panlalawiganfor review copies of approved ordinances and resolutions approving the localdevelopment plans and public investment programs formulated by the localdevelopment councils. The sangguniang panlalawigan shall review the same within 30days; if it finds that the ordinance or resolution is beyond the power conferred upon thesangguniang panlungsod or sangguniang bayan concerned, it shall declare suchordinance or resolution invalid in whole or in part. If no action is taken within 30 days,the ordinance or resolution is presumed consistent with law, and therefore, valid.

b. The sangguniang panlungsod or bayan shall review sangguniang barangay ordinances todetermine if they are lawful. (§57)

●Procedure:Within 10 days from enactment, the sangguniang barangay shall furnish copies of all

barangay ordinances to the sangguniang panlungsod or sangguniang bayan for review. If the reviewing sanggunian finds the barangay ordinances inconsistent with law or city ormunicipal ordinances, the sangguniang concerned shall, within 30 days from receipt thereof,return the same with its comments and recommendations to the sangguniang barangay foradjustment, amendment or modification, in which case the effetivity of the ordinance issuspended until the revision called for is effected. If no action is taken by the sangguniangpanlungsod or sangguniang bayan within 30 days, the ordinance is deemed approved.

13. Enforcement of disapproved ordinances/resolutions:Any attempt to enforce an ordinance or resolution approving the local development plan

and public investment program, after the disapproval thereof, shall be sufficient ground for thesuspension or dismissal of the official or employee concerned.

14. Effectivitya. Unless otherwise stated in the ordinance, it shall take effect after 10 days from posting

at the provincial capitol or city, municipal or barangay hall and two other conspicuousplaces.

b. The gist of all ordinances with penal sanction shall be published in a newspaper of general circulation in the province. In the absence of such newspaper, the ordinance

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shall be posted in all municipalities and cities of the province where the sanggunian of origin is situated.

c. In highly urbanized and independent component cities, in addition to posting, the mainfeatures of the ordinance shall be published in a local newspaper of general circulation.In the absence of such newspaper, it shall be published in any newspaper of generalcirculation. (§59

C. Corporate Powers (§22, RA 7160)

1. To have continuous succession in its corporate name2. To sue and be sued3. To have and use a corporate seal4. To acquire and convey real or personal property

a. The local government unit may acquire real or personal, tangible or intangibleproperty, in any manner allowed by law, e.g., sale, donation, etc.

b. The local government unit may alienate only patrimonial property, upon properauthority.

c. In the absence of proof that the property was acquired through corporate or privatefunds, the presumption is that it came from the State upon the creation of themunicipality and, thus, is governmental or public property. (Salas vs. Jarencio, 48SCRA 734; Rebuco vs. Villegas, 55 SCRA 656)

d. Town plazas are properties of public dominion; they may be occupied temporarily,but only for the duration of an emergency (Espiritu vs. Municipal Council of Pozorrubio, Pangasinan, 102 Phil. 866).

e. A public plaza is beyond the commerce of man, and cannot be the subject of lease orother contractual undertaking. And, even assuming the existence of a valid lease of the public plaza or part thereof, the municipal resolution effectively terminated theagreement, for it is settled that the police power cannot be surrendered or bargainedaway through the medium of a contract (Villanueva vs. Castaneda, 154 SCRA142).

5. Power to enter into contractsa. Requisites of a valid municipal contracts

i. The local government unit has the express, implied or inherent power to enter

into the particular contract.ii. The contract is entered into by the proper department, board, committee,officer or agent. Unless otherwise provided by the Code, no contract may beentered into by the local chief executive on behalf of the local government unitwithout prior authorization by the sangguniang concerned.

iii. The contract must comply with certain substantive requirements, i.e., whenexpenditure of public fund is to be made, there must be an actualappropriation and a certificate of availability of funds.

iv. The contract must comply with the formal requirements of written contracts,e.g., the Statute of Frauds.

b. Ultra vires contractsWhen a contract is entered into without compliance with the first and the third

requisites (above), the same is ultra vires and is null and void. Such contract cannot be

ratified or validated. Ratification of defective municipal contracts is possible only whenthere is non-compliance with the second and/or fourth requirements above. Ratificationmay be express or implied.

c. Authority to negotiate and secure contracts (§23, RA 7160)The local chief executive may, upon authority of the sanggunian, negotiate and secure

financial grants or donations in kind, in support of the basic services and facilitiesenumerated under §17, from local and foreign assistance agencies without necessity of securing clearance or approval from any department, agency, or office of the nationalgovernment or from any higher local government unit; Provided, that projects financedby such grants or assistance with national security implications shall be approved by thenational agency concerned.

6. To exercise such other powers as are granted to corporations, subject tolimitations provided in the Code and other laws.

V. MUNICIPAL LIABILITY

A. Specific provisions making LGUs liable:

a. §24, RA 7160- Liability for damages- Local government units and their officials are notexempt from liability for death or injury to persons or damage to property.

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b. Art. 2189, NCC- The local government unit is liable in damages for death or injuriessuffered by reason of the defective condition of roads, streets, bridges, public buildingsand other public works.

c. Art. 2180, (par.6), NCC- The State is responsible when it acts through a special agent.d. Art. 34, NCC- The local government unit is subsidiarily liable for damages suffered by a

person by reason of the failure or refusal of a member of the police force to render aidand prosecution in case of danger to life and property.

2. Liability for Tort

a. If the local government unit is engaged in governmental functions, it is NOT liable.b. If engaged in proprietary functions, local government unit is liable.

●Holding of town fiesta is a proprietary function. The Municipality of Malasique,Pangasinan, was held liable for the death of a member of the zarzuela group when thestage collapsed, under the principle of respondeat superior.

NOTE:●The municipal council managed the town fiesta. While the municipality was held liable,

the councilors themselves are not liable for the negligence of their employees or agents. (Toriovs. Fontanilla, 85 SCRA 599)

c. Personal Liability of local officials

3. Liability for violation of law

Case: The Municipality of Bunawan, Agusan del Sur, through the Mayor, was held in contempt

and fined P1,000.00 with a warning, because of the refusal of the Mayor to abide by a Temporary Restraining Order issued by the Court (Moday vs. CA, 243 SCRA 152).

4. Liability for contracts

a. General Rule- A municipal corporation, like an ordinary person, is liable on a contract itenters into, provided that the contract is intra vires. If the contract is ultra vires, themunipal corporation is not liable.

NOTES:●A private individual who deals with a municipal corporation is imputed constructiveknowledge of the extent of the power or authority of the municipal corporation to enter intocontracts.●Ordinarily, therefore, the doctrine of estoppel does not lie against municipal corporation.

b. Doctrine of Implied Municipal Liability- A municipality may become obligated uponan implied contract to pay the reasonable value of the benefits accepted or appropriatedby it as to which it has the general power to contract (Province of Cebu vs. IAC, 147SCRA 447).

The doctrine applies to all cases where money or property of a party is received undersuch circumstances that the general law, independent of an express contract, implies an

obligation to do justice with respect to the same.Thus, in this case, the Province of Cebu cannot set up the plea that the contract wasultra vires and still retain benefits thereunder. Having regarded the contract as valid forpurposes of reaping benefits, the Province of Cebu is estopped to question its validity forthe purpose of denying answerability.

VI. LOCAL OFFICIALS

A. Provisions applicable to elective and appointive officials 1. §89, RA 7160: Prohibited business and pecuniary interest- It shall be unlawfulfor any local government official or employee, directly or indirectly, to:

a. Engage in any business transaction with the local government unit in which he is an

official or employee or over which he has the power of supervision, or with any of itsauthorized boards, officials, agents, or attorneys, whereby money is to be paid, orproperty or any other thing of value is to be transferred, directly or indirectly, out of theresources of the local government unit to such person or firm;

b. Hold such interests in any cockpit or other games licensed by a local government unit;c. Purchase any real estate or other property forfeited in favor of such local government

unit for unpaid taxes or assessment, or by virtue of a legal process at the instance of the said local government unit;

d. Be a surety for any person contracting or doing business with the local government unitfor which a surety is required; and

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e. Possess or use any public property of the local government unit for private purposes.f. The prohibitions and inhibitions prescribed in RA 6713 also apply.

2. Practice of Profession (§90, RA 7160)a. Governors or mayors are prohibited from practicinìstrative proceedings involving the

local government unit of which he is an official.iv. Use property and personnel of the government except when the sanggunianmember is defending the interest of the government.

Case:It was held that by appearing as counsel for dismissed employees, City Councilor

Javellana violated the prohibition against engaging in private practice if such practicerepresents interests adverse to the government. (Javellana vs. DILG, 212 SCRA 475)

b. Physicians may practice their profession even during office hours only on emergenciesand without monetary compensation.

3. Prohibition against appointment (§94, RA 7160)a. No elective or appointive local official shall be eligible for appointment or designation to

any public office during his tenure.b. Unless otherwise allowed by law or by the primary function of his office, no elective or

appointive local official shall hold any other office.

c. Except for losing candidates in barangay elections, no candidate who lost in anyelection should be appointed to any office within one year after election.

B. ELECTIVE LOCAL OFFICIALS

1. Qualifications:a. Common qualifications:

i. Filipino Citizenii. Registered voter of the local government unit, or of the district where he intends to beelected in the case of the members of the sanggunian.iii. Resident therein for at least one year immediately before the electioniv. Ability to read and write Filipino or any other local dialect.

b. Age

i. Candidates in provinces and highly urbanized cities- at least 23 years oldii. Candidates for mayor and vice mayor of component cities and municipalities- at least21 years oldiii. Candidates for sanggunian members in component cities and municipalities- at least18 years oldiv. Barangay officials- at least 18 years oldv. Sangguniang Kabataan- at least 15-21 years

NOTES:●Age- must be possessed on the day of the election.●The LGC does not specify any particular date when the candidate must possess Filipinocitizenzship. Philippine citizenship is required to ensure that no alien shall govern our people.An official begins to govern only upon his proclamation and on the day that his term begins.

Since Frivaldo took his oath of allegiance on June 30, 1995, when his application for repatriationwas granted by the Special committee on Naturalization created under PD 825, he wastherefore qualified to be proclaimed. Besides, §39 of the LGC speaks of qualifications of electiveofficials, not of candidates (Frivaldo vs. COMELEC, 271 SCRA 767).

●Petitioner was over 21 years of age on the day of the election was ordered disqualified by theSupreme Court when the latter rejected the contention of the petitioner that she was qualifiedbecause she was less than 22 years old. The phrase “not more than 21 years old” is notequivalent to “less than 22 years old” (Garvida vs. Sales).

2. Disqualifications (§40, RA 7160)- The following are disqualified from running for anyelective local position:

a. Those sentenced by final judgment for an offense involving moral turpitude or for an

offense punishable by one year or more of imprisonment, within two years afterserving sentence;

b. Those removed from office as a result of an administrative case;c. Those convicted by final judgment for violating the oath of allegiance to the Republic;d. Those with dual citizenship;e. Fugitives from justice in criminal or non-political cases here or abroad;f. Permanent residents in a foreign country or those who have acquired the right to

reside abroad and continue to avail of the same right after the effectivity of the Code;and

g. The insane or feeble-minded.

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3. Manner of Electiona. The governor, vice-governor, city or municipal mayor, city or municipal vice-mayor

and punong barangay shall be elected at large in their respective units. Thesangguniang kabataan chairman shall be elected by the registered voters of thekatipunan ng kabataan.

b. The regular members of the sangguniang panlalawigan, panlungsod and bayan shallbe elected by district, as may be provided by law. The presidents of the leagues of sanggunian members of component cities and municipalities shall serve as ex officiomembers of the sangguniang panlalawigan concerned. The presidents of the liga ngmga barangay and the pederasyon ng mga sangguniang kabataan elected by theirrespective chapters, shall serve as ex officio members of the sangguniangpanlalawigan, panlungsod or bayan.

c. In addition, there shall be one sectoral representative from the women, one fromthe workers, and one from any of the following sectors: urban poor, indigenouscultural communities, disabled persons, or any other sector as may be determinedby the sanggunian concerned within 90 days prior to the holding of the next localelections as may be provided by law. The Comelec shall promulgate the rules andregulations to effectively provide for the election of such sectoral representatives.

4. Date of Election

Every three years on the second Monday of May, unless otherwise provided by law.

5. Term of Office Three years, starting from noon of June 30, 1992, or such date as may be provided by

law, except that of elective barangay officials. No local elective official shall serve for more thanthree consecutive terms in the same position. The term of office of barangay officials andmembers of the sangguniang kabataan shall be for five years, which shall begin after theregular election of barangay officials on the second Monday of May, 1997. (R.A. 8524)

●The three-term limit on a local official is to be understood to refer to terms for which theofficial concerned was elected. Thus, a person who was elected Vice Mayor in 1988 and who,because of the death of the Mayor, became Mayor in 1989, may still be eligible to run for theposition of Mayor in 1998, even if elected as such in 1992 and 1995 (Borja v. Comelec, G.R.

No. 133495, Sept. 3, 1998).

6. Rules on Succession (§44-46, RA 7160)A. Permanent vacancies: A permanent vacancy arises when an elective local official fillsa higher vacant office, refuses to assume office, fails to qualify, dies, is removed from office,voluntarily resigns, or is permanently incapacitated to discharge the functions of his office.a. Governor and Mayor

i. Vice Governor and Vice Mayorii. Sanggunian members according to ranking

b. Punong barangayi. Highest ranking sanggunian memberii. Second highest ranking sangguniang barangay member

c. Ranking in the sanggunian shall be determined on the basis of the proportion of the votes

obtained to the number of registered votes in each district.d. Ties will be resolved by drawing of lots. (§44)e. Sanggunian:

i. Provinces, highly urbanized cities and independent component cities- appointment bythe Presidentii. Component city and municipality- appointment by governoriii. Sangguniang barangay- appointment by mayoriv. Except for the sangguniang barangay, the appointee shall come from the politicalparty of the member who caused the vacancy.

NOTE:● A nomination and a certificate of membership of the appointee from the highest official of thepolitical party concerned are conditions sine qua non, and any appointment without such

nomination and certificate shall be null and void and shall be a ground for administrative actionagainst the official concerned.

v. If the member does not belong to any party, the appointee shall be recommended bythe sanggunian.vi. The appointee for the sangguniang barangay shall be recommended by thesangguniang barangay.vii. Vacancy in the representation of the youth and the barangay in the sanggunian shallbe filled by the official next in rank of the organization. (§45)

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ii. The Comelec or its duly authorized representative shall cause the publication of thepetition in a public and conspicuous place for a period of not less than 10 days nor morethan 20 days, for the purpose of verifying the authenticity and genuineness of thepetition and the required percentage of voters.iii. Upon the lapse of the aforesaid period, the Comelec or its duly authorizedrepresentative shall announce the acceptance of candidates to the position andthereafter prepare the list of candidates which shall include the name of the officialsought to be recalled.

●The elective local official sought to be recalled shall not be allowed to resign while the recallprocess is in progress.●Limitations on Recall:

1. Any elective local official may be the subject of a recall election only once during his termof office for loss of confidence.

2. No recall shall take place within one year from the date of the official’s assumption tooffice or one year immediately preceding a regular local election.●The official sought to be recalled is automatically a candidate.●Recall shall be effective upon the election and proclamation of successor receiving the highestnumber of votes.

9. Resignation of elective local officials shall be deemed effective only upon

acceptance by the following authorities:a. The President, in case of governors, vice governors, and mayors and vice mayors of

highly urbanized cities and independent component cities;b. The governor, in case of municipal mayors and vice mayors, city mayors and vice

mayors of component cities;c. Sanggunian concerned, in case of sangguniang members; andd. The city or municipal mayor, in case of barangay officials.

●Effectivity:c. Resignation takes effect upon acceptance.d. It is deemed accepted if not acted upon within 15 working days.e. Irrevocable resignation by sanggunian members takes effect upon presentation before

an open session. (§82, R.A. 7160)

10. Grievance Procedure (§83, R.A. 7160)- The local chief executive shall establish aprocedure to inquire into, act upon, resolve or settle complaints and grievances presented bylocal government employees.

11. Discipline (§60-68, R.A. 7160)a. Grounds for disciplinary action: An elective local official may be disciplined,

suspended, or removed from office on any of the following grounds:i. Disloyalty to the Republic of the Philippines.ii. Culpable violation of the Constitution

iii. Dishonesty, oppression, misconduct in office, gross negligence, or dereliction of duty.

iv. Commission of any offense involving moral turpitude or an offense punishable by at

least prision mayor.v. Abuse of authority.

vi. Unauthorized absence for 15 consecutive working days, except in the case of members of the sangguniang panlalawigan, panlungsod, bayan and barangay.

vii. Application for, or acquisition of, foreign citizenship or residence or the statusìElective barangay officials, shall be filed before the sangguiniang panlungsod or sangguniangbayan concerned, whose decision shall be final and executory.

c. Notice of Hearing (§62, R.A. 7160)- (a) Within 7 days after the administrativecomplaint is filed, the Office of the President or the sanggunian concerned as the case maybe, shall require the respondent to submit his verified answer within 15 days from receiptthereof, and commence the investigation of the case within 10 days after the receipt of suchanswer of the respondent.

(b) When the respondent is an elective official of a province or highly urbanized city,such hearing and investigation shall be conducted in the place where he renders or holdsoffice. For all other local elective officials, the venue shall be the place where thesanggunian concerned is located.

(c) However, no investigation shall be held within 90 days immediately prior to any localelection, and no preventive suspension shall be imposed prior to the 90-day periodimmediately preceding local election, it shall be deemed automatically lifted upon the startof aforesaid period.

d. Preventive Suspension

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1. Who may impose:a. By the President, if the respondent is an elective official of a province, a highly

urbanized or an independent component city;b. By the governor, if the respondent is an elective local official of a component city

or municipality;c. By the mayor, if the respondent is an elective official of the barangay.

2. When may be imposed: Preventive suspension may be imposed at any time:a. After the issues are joined;b. When the evidence of guilt is strong; andc. Given the gravity of the offense, there is great probability that the continuance in

office of the respondent could influence the witnesses or pose a threat to thesafety and integrity of the records and other evidence.

●Provided that any single preventive suspension shall not extend beyond 60 days, andin the event several administrative cases are filed against the respondent, he cannot besuspended for more than 90 days within a single year on the same ground or groundsexisting and known at the time of the first suspension.

Case:When the petitioner failed to file his answer despite the many opportunities given to him,

he was deemed to have waived his right to answer and to present evidence. At that point, the

issues were deemed joined, and it was proper for the Executive Secretary to suspend him,inasmuch as the Secretary found that the evidence of guilt was strong and that continuance inoffice could influence the witnesses and pose a threat to the safety and integrity of theevidence against him (Joson vs. Torres, 290 SCRA 279).

The authority to preventively suspend is exercised concurrently by the Ombudsman,pursuant to R.A. 6770; the same law authorizes a preventive suspension of six months (Hagad vs. Gozo-Dadole, G.R. no. 108072, Dec. 12, 1995).

e. Suspended elective official when deemed reinstatedUpon expiration of the preventive suspension, the respondent shall be deemed

reinstated in office without prejudice to the continuation of the proceedings against him, whichshall be terminated within 120 days from the time he was formally notified of the case against

him.●Any abuse of the exercise of the power of preventive suspension shall be penalized as

abuse of authority.

f. Salary of respondent pending suspension (§64, R.A. 7160) The respondent official preventively suspended from office shall receive no salary orcompensation during such suspension; but, upon subsequent exoneration and reinstatement,he shall be paid full salary or compensation including such emoluments accruing during suchsuspension.

g. Rights of respondent (§65, R.A. 7160) The respondent shall be accorded full opportunity to appear and defend himself inperson or by counsel, to confront and cross-examine the witnesses against him, and to require

the attendance of witnesses and the production of documentary evidence in his favor throughcompulsory process of subpoena or subpoena duces tecum.

h. Form and notice of decision (§66a, R.A. 7160)The investigation of the case shall be terminated within 90 days from the start thereof.

Within 30 days after the end of the investigation, the Office of the President or the sanggunianconcerned shall render a decision in writing stating clearly an distinctly the facts and thereasons for such decision. Copy of said decision shall immediately be furnished the respondentand all interested parties.

i. PenaltyThe penalty of suspension imposed upon the respondent shall not exceed his unexpired

term, or a period of 6 months for every administrative offense, nor shall said penalty be a bar to

the candidacy of the respondent as long as he meets the qualifications required for the office.But the penalty of removal from office as a result of an administrative investigation shall be abar to the candidacy of the respondent for any elective position.

Case: The Supreme Court upheld the imposition of the administrative penalty of suspension of

not more than 6 months for each offense, provided that the successive service of the sentenceshould not exceed the unexpired portion of the term of the petitioners. The suspension did notamount to removal from office (Salalima vs. Guingona, 257 SCRA 55).

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j. Administrative appeal- Decisions may, within 30 days from receipt thereof, beappealed to:

i. The sangguniang panlalawigan, in the case of decisions of component cities’sangguniang panlungsod and the sangguiniang bayan;

ii. The Office of the President, in the case of decisions of the sangguniang panlalawiganand the sangguniang panlungsod of highly urbanized cities and independent component cities.Decisions of the Office of the President shall be final and executory.

Case: The Supreme Court ruled that certiorari will not lie because there is still an adequate

remedy available in the ordinary course of law, i.e., appeal of the decision of the SangguniangPanlalawigan to the Office of the President (Malinao vs. Reyes, 255 SCRA 616).

k. Execution pending appealAn appeal shall not prevent a decision from being executed; the respondent shall be

considered as having been placed under preventive suspension during the pendency of theappeal. But in Berces vs. Executive Secretary, 241 SCRA 539, the Supreme Court pointed outthat Administrative Order No. 18 authorizes the Office of the President to stay the execution of adecision pending appeal. A.O. No. 18 was not repealed by the Local Government Code.

l. Presidential power to grant executive clemency

m. Effect of re-electionThe re-election of a local official bars the continuation of the administrative case against

him.

C. Appointive Local Officials1. Responsibility for human resources and development- The local chief executive shall be

responsible for human resources and development in his unit and shall take all personnelactions in accordance with the Constitution, pertinent laws, including such policies, guidelinesand standards as the Civil Service Commission may establish; Provided that the local chief executive may employ emergency or casual employees or laborers paid on a daily wage orpiecework basis and hired through job orders for local projects authorized by the sanggunianconcerned, without need of approval or attestation by the CSC as long as the said employmentshall not exceed 6 months.

Case:But the Provincial Governor is without authority to designate the petitioner as Assistant

Provincial Treasurer for Administration, because under §471 of the Local Government Code, it isthe Secretary of Finance who has the power to appoint Assistant Provincial Treasurers from alist of recommendees of the Provincial Governor (Dimaandal vs. Commission on Audit, 291SCRA 322).

2. Officials common to all Municipalities, Cities and Provinces (§469-490, R.A.7160)

a. Secretary to the Sanggunianb. Treasurerc. Assessor

d. Accountante. Budget Officerf. Planning and Development Coordinatorg. Engineerh. Health Officeri. Civil Registrar

j. Administratork. Legal Officerl. Agriculturistm. Social Welfare and Development Officern. Environment and Natural Resources Officero. Architectp. Information Officer

q. Cooperatives Officerr. Population Officers. Veterinariant. General Services Officer

NOTE:●In the barangay, the mandated appointive officials are the Barangay Secretary and the

Barangay Treasurer, although other officials of the barangay may be appointed by the punongbarangay.

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3. Administrative disciplineInvestigation and adjudication of administrative complaints against appointive

local officials and employees as well as their suspension and removal shall be in accordancewith the civil service law and rules and other pertinent laws.

a. Preventive suspension- The local chief executive may preventively suspend for aperiod not exceeding 60 days any subordinate official or employee under hisauthority pending investigation if the charge against such official or employeeinvolves dishonesty, oppression or grave misconduct or neglect in theperformance of duty, or if there is reason to believe that the respondent is guiltyof the charges which would warrant his removal from the service.

b. Disciplinary Action- Except as otherwise provided by law, the local chief executivemay impose the penalty of removal from service, demotion in rank, suspensionfor not more than 1 year without pay, fine in an amount not exceeding 6 months’salary or reprimand. If the penalty imposed is suspension without pay for notmore than 30 days, his decision shall be final; if the penalty imposed is heavier,the decision shall be appealable to the Civil Service Commission which shalldecide the appeal within 30 days from receipt thereof.

VII. LOCAL INITIATIVE AND REFERENDUMA. Local Initiative

1. Defined- It is the legal process whereby the registered voters of a localgovernment unit may directly propose, enact or amend any ordinance. Itmay be exercised by all registered voters of the provinces, cities,municipalities and barangays

2. Procedure:

a. Not less than 2,000 registered voters in the region; 1,000 registeredvoters in case of provinces and cities; 100 voters in case of municipalities,and 50 in case of barangays, may file a petition with the sanggunianconcerned proposing the adoption, enactment, repeal or amendment of an

ordinance.b. If no favorable action is taken by the sanggunian concerned within 30

days from presentation, the proponents, through their duly authorized andregistered representatives, may invoke their power of initiative, givingnotice thereof to the sanggunian concerned.

c. The proposition shall be numbered serially, starting from Roman numeralI. Two or more propositions may be submitted in an initiative. TheComelec or its designated representative shall extend assistance in theformulation of the proposition.

d. Proponents shall have 90 days (in case of provinces and cities), 60 days(in case of municipalities) and 30 days (in case of barangays) from noticementioned in (b) to collect the required number of signatures.

e. The petition shall be signed before the election registrar or his designated

representatives, and in the presence of a representative of the proponentand a representative of the sanggunian concerned in a public place in thelocal government unit.

f. Upon the lapse of the period, the Comelec shall certify as to whether ornot the required number of signatures has been obtained. Failure toobtain the required number of signatures defeats the proposition.

g. If the required number is obtained, the Comelec shall set a date for theinitiative during which the proposition is submitted to the registered votersin the local government unit for their approval within 60 days (in case of provinces), 45 days (in case of municipalities), and 30 days (in case of barangays) from the date of certification by the Comelec. The initiativeshall be held on the date set after which the results thereof shall becertified and proclaimed by the Comelec.

h. If the proposition is approved by a majority of the votes cast, it shall takeeffect 15 days after the certification by the Comelec as if affirmativeaction had been taken thereon by the sanggunian and the local chief executive concerned.

3. Limitations:a. On local initiative:

i. The power of local initiative shall not be exercised more than once a year.ii. Initiative shall extend only to subjects or matters which are within thelegal powers of the sanggunian to enact.

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iii. If at any time before the initiative is held, the sanggunian concernedadopts in toto the proposition presented and the local chief executiveapproves the same, the initiative shall be cancelled. However, those againstsuch action may, if they so desire, apply for initiative in the manner hereinprovided.

b. On the sanggunian: Any proposition or ordinance approved through aninitiative and referendum shall not be repealed, modified or amended by thesanggunian within 6 months from the date of approval thereof, and may beamended, modified or repealed within 3 years thereafter by a vote of ¾ of allits members. In case of barangays, the period shall be 18 months after theapproval thereof.

B. Local referendum:3. Defined- It is the legal process whereby the registered voters of the local

government units may approve, amend or reject any ordinance enacted by thesanggunian.

4. The local referendum shall be held under the control and direction of the Comelecwithin 60 days (in case of provinces), 45 days (in case of municipalities) and 30days (in case of barangays). The Comelec shall certify and proclaim the results of the said referendum.

C. Authority of Courts- Nothing in the foregoing shall preclude the proper courts fromdeclaring null and void any proposition approved pursuant hereto for violation of theConstitution or want of capacity of the sanggunian concerned to enact said measure.

VIII. LOCAL GOVERNMENT UNITS A. The Barangay

1. Chief Officials and Officesa. There shall be in each barangay a punong baranagy, seven (7)sangguniang barangay members, the sangguniang kabataan chairman, abarangay secretary and a barangay treasurer. There shall also be in everybarangay a lupong tagapamayapa. The sangguniang barangay may formcommunity brigades and create such other positions or offices as may be deemed

necessary to carry out the purposes of the barangay government.b. For purposes of the Revised Penal Code, the punong barangay,sangguniang barangay members, and the members of the lupong tagapamayapain each barangay shall be deemed as persons in authority in their jurisdiction,while other barangay officials and members who may be designated by law orordinance and charged with the maintenance of public order, protection andsecurity of life and property, or the maintenance of a desirable and balancedenvironment, and any barangay member who comes to the aid of persons inauthority, shall be deemed as agents of persons in authority.c. §389 (b)5), R.A. 7160, provides that the punong barangay shall,upon approval by a majority of all the members of the Sangguniang Barangay,appoint or replace the barangay treasurer, the barangay secretary, and otherappointive local officials.

2. The Barangay Assembly There shall be a barangay assembly composed of all persons who are actual

residents of the barangay for at least 6 months, 15 years of age or over, citizens of thePhilippines, and duly registered in the list of barangay assembly members. It shall meetat least twice a year to hear and discuss the semestral report of the sangguniangbarangay concerning its activities and finances, as well as problems affecting thebarangay.

a. Powers of the Barangay Assembly:i. Initiate legislative processes by recommending to the sangguniang barangaythe adoption of measures for the welfare of the barangay and the city ormunicipality concerned;

ii. Decide on the adoption of initiative as a legal process whereby the registeredvoters of the barangay may directly propose, enact or amend any ordinance; andiii. Hear and pass upon the semestral report of the sangguniang barangayconcerning its activities and finances.

3. Katarungang Pambarangaya. Lupong Tagapamayapa

There is hereby created in each barangay a lupong tagapamayapa, composed of the punong barangay as chairman and 10 to 20 members. The Lupon shall beconstituted every 3 years.

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b. Powers of the Lupon:i. Exercise administrative supervision over the conciliation panels;ii. Meet regularly once a month to provide a forum for exchange of ideas amongits members and the public of matters relevant to the amicable settlement of disputes, and to enable various conciliation panel members to share with oneanother their observations and experiences in effecting speedy resolution of disputes; andiii. Exercise such other powers and perform such other duties and functions asmay be prescribed by law or ordinance.

c. Pangkat ng Tagapagkasundo There shall be constituted for each dispute brought before the lupon a conciliationpanel to be known as the pangkat ng tagapagkasundo, consisting of 3 memberswho shall be chosen by the parties to the dispute from the list of members of thelupon. Should the parties fail to agree on the pangkat membership, the sameshall be determined by lots drawn by the lupon chairman.

d. Subject matter of amicable settlement: The Lupon of each barangay shall have authority to bring together the partiesactually residing in the same city or municipality for amicable settlement of alldisputes except;i. Where one party is the government or any subdivision or instrumentalitythereof;

ii. Where one party is a public officer or employee, and the dispute relates to theperformance of his official functions;iii. Offenses punishable by imprisonment exceeding one (1) year or a fine of P5,000.00.iv. Offenses where there is no private offended party;v. Where the dispute involves real properties located in different cities ormunicipalities unless the parties thereto agree to submit their differences toamicable settlement by an appropriate lupon;vi. Disputes involving parties who actually reside in barangays of different citiesor municipalities, except where such barangay units adjoin each other and theparties thereto agree to submit their differences to amicable settlement by anappropriate lupon;vii. Such other classes of disputes which the President may determine in the

interest of justice or upon the recommendation of the Secretary of Justice.

4. Sangguniang Kabataan: a. Creation; composition: There shall be in every barangay a sangguniang kabataanto be composed of a chairman, seven members, a secretary and a treasurer. An officialwho, during his term of office, shall have passed the age of 21 shall be allowed to servethe remaining portion of the term for which he was elected.

b. Katipunan ng Kabataan: Shall be compsed of all citizens of the Philippines actuallyresiding in the barangay for at least 6 months, who are 15 but not more than 21 years of age, who are duly registered in the list of the sangguniang kabataan or in the official listin the custody of the barangay secretary. It shall meet once every 3 months, or at thecall of the sanggunian kabataan chairman, or upon written petition of at least 1/20 of its

members.

c. Pederasyon ng mga sangguniang kabataan: There shall be an organization of all thepederasyon ng mga sangguniang kabataan:

i. In municipalities, the pambayang pederasyon;ii. In cities, panlungsod na pederasyon;iii. In provinces, panlalawigang pederasyon;iv. In special metropolitan political subdivisions, pangmetropolitang pederasyon;v. On the national level, pambansang pederasyon.

B. The MunicipalityC. The CityD. The Province

E. Leagues of Local Government Units/Officials:1. Liga ng mga Barangay- Organization of all barangays for the primary purpose of

determining the representation of the Liga in the sanggunians, and for ventilating, articulatingand crystallizing issues affecting barangay government administration and securing, throughproper and legal means, solutions thereto.

Case:Where the Supreme Court held that Sec. 493, R.A. 7160, which empowers the Liga to

“create such other positions as may be deemed necessary”, is valid, and does not constitute anirregular delegation of power (Viola vs. Alunan, G.R. No. 115844, August 15, 1997)

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2. League of Municipalities- Organized for the primary purpose of ventilating,articulating and crystallizing issues affecting municipal governments administration, andsecuring, through proper and legal means, solutions thereto.

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