Anda di halaman 1dari 164

A.

Corporation
This is a petition to declare Senator Richard J. Gordon
1. Liban v. Gordon (respondent) as having forfeited his seat in the Senate.

EN BANC The Facts

DANTE V. LIBAN,
REYNALDO M. BERNARDO, and SALVADOR M. VIARI,
Petitioners, Petitioners Dante V. Liban, Reynaldo M. Bernardo, and Salvador
M. Viari (petitioners) filed with this Court a Petition to Declare
- versus - Richard J. Gordon as Having Forfeited His Seat in the Senate.
Petitioners are officers of the Board of Directors of the Quezon
RICHARD J. GORDON, City Red Cross Chapter while respondent is Chairman of the
Respondent. Philippine National Red Cross (PNRC) Board of Governors.

G.R. No. 175352


During respondents incumbency as a member of the Senate of
Present: the Philippines,[1] he was elected Chairman of the PNRC during
the 23 February 2006 meeting of the PNRC Board of Governors.
PUNO, C.J., Petitioners allege that by accepting the chairmanship of the PNRC
QUISUMBING, Board of Governors, respondent has ceased to be a member of
YNARES-SANTIAGO, the Senate as provided in Section 13, Article VI of the Constitution,
CARPIO, which reads:
CORONA,
CARPIO MORALES,
CHICO-NAZARIO, SEC. 13. No Senator or Member of the House of Representatives
VELASCO, JR., may hold any other office or employment in the Government, or
NACHURA, any subdivision, agency, or instrumentality thereof, including
LEONARDO-DE CASTRO, government-owned or controlled corporations or their
BRION, subsidiaries, during his term without forfeiting his seat. Neither
PERALTA, and shall he be appointed to any office which may have been created
BERSAMIN, JJ. or the emoluments thereof increased during the term for which he
was elected.

Promulgated: Petitioners cite Camporedondo v. NLRC,[2] which held that the


July 15, 2009 PNRC is a government-owned or controlled corporation.
Petitioners claim that in accepting and holding the position of
x---------------------------------------------- Chairman of the PNRC Board of Governors, respondent has
----x automatically forfeited his seat in the Senate, pursuant to Flores
v. Drilon,[3] which held that incumbent national legislators lose
DECISION their elective posts upon their appointment to another government
office.
CARPIO, J.:

The Case
In his Comment, respondent asserts that petitioners have no Petitioners maintain that the present petition is a taxpayers suit
standing to file this petition which appears to be an action for quo questioning the unlawful disbursement of funds, considering that
warranto, since the petition alleges that respondent committed an respondent has been drawing his salaries and other
act which, by provision of law, constitutes a ground for forfeiture compensation as a Senator even if he is no longer entitled to his
of his public office. Petitioners do not claim to be entitled to the office. Petitioners point out that this Court has jurisdiction over this
Senate office of respondent. Under Section 5, Rule 66 of the Rules petition since it involves a legal or constitutional issue which is of
of Civil Procedure, only a person claiming to be entitled to a public transcendental importance.
office usurped or unlawfully held by another may bring an action
for quo warranto in his own name. If the petition is one for quo
warranto, it is already barred by prescription since under Section The Issues
11, Rule 66 of the Rules of Civil Procedure, the action should be
commenced within one year after the cause of the public officers Petitioners raise the following issues:
forfeiture of office. In this case, respondent has been working as
a Red Cross volunteer for the past 40 years. Respondent was 1. Whether the Philippine National Red Cross (PNRC) is a
already Chairman of the PNRC Board of Governors when he was government- owned or controlled corporation;
elected Senator in May 2004, having been elected Chairman in
2003 and re-elected in 2005. 2. Whether Section 13, Article VI of the Philippine Constitution
applies to the case of respondent who is Chairman of the PNRC
and at the same time a Member of the Senate;
Respondent contends that even if the present petition is treated
as a taxpayers suit, petitioners cannot be allowed to raise a 3. Whether respondent should be automatically removed as a
constitutional question in the absence of any claim that they Senator pursuant to Section 13, Article VI of the Philippine
suffered some actual damage or threatened injury as a result of Constitution; and
the allegedly illegal act of respondent. Furthermore, taxpayers are
allowed to sue only when there is a claim of illegal disbursement 4. Whether petitioners may legally institute this petition against
of public funds, or that public money is being diverted to any respondent.[4]
improper purpose, or where petitioners seek to restrain
respondent from enforcing an invalid law that results in wastage
of public funds.
The substantial issue boils down to whether the office of the PNRC
Chairman is a government office or an office in a government-
Respondent also maintains that if the petition is treated as one for owned or controlled corporation for purposes of the prohibition in
declaratory relief, this Court would have no jurisdiction since Section 13, Article VI of the Constitution.
original jurisdiction for declaratory relief lies with the Regional Trial
Court. The Courts Ruling

We find the petition without merit.


Respondent further insists that the PNRC is not a government-
owned or controlled corporation and that the prohibition under Petitioners Have No Standing to File this Petition
Section 13, Article VI of the Constitution does not apply in the
present case since volunteer service to the PNRC is neither an A careful reading of the petition reveals that it is an action for quo
office nor an employment. warranto. Section 1, Rule 66 of the Rules of Court provides:

Section 1. Action by Government against individuals. An action for


In their Reply, petitioners claim that their petition is neither an the usurpation of a public office, position or franchise may be
action for quo warranto nor an action for declaratory relief.
commenced by a verified petition brought in the name of the to the legitimate senators, to the damage, great and irreparable
Republic of the Philippines against: injury of the Government and the Filipino people.[5] (Emphasis
(a) A person who usurps, intrudes into, or unlawfully holds or supplied)
exercises a public office, position or franchise;
(b) A public officer who does or suffers an act which by provision
of law, constitutes a ground for the forfeiture of his office; or Thus, petitioners are alleging that by accepting the position of
(c) An association which acts as a corporation within the Chairman of the PNRC Board of Governors, respondent has
Philippines without being legally incorporated or without lawful automatically forfeited his seat in the Senate. In short, petitioners
authority so to act. (Emphasis supplied) filed an action for usurpation of public office against respondent,
a public officer who allegedly committed an act which constitutes
Petitioners allege in their petition that: a ground for the forfeiture of his public office. Clearly, such an
4. Respondent became the Chairman of the PNRC when he was action is for quo warranto, specifically under Section 1(b), Rule 66
elected as such during the First Regular Luncheon-Meeting of the of the Rules of Court.
Board of Governors of the PNRC held on February 23, 2006, the
minutes of which is hereto attached and made integral part hereof Quo warranto is generally commenced by the Government as the
as Annex A. proper party plaintiff. However, under Section 5, Rule 66 of the
5. Respondent was elected as Chairman of the PNRC Board of Rules of Court, an individual may commence such an action if he
Governors, during his incumbency as a Member of the House of claims to be entitled to the public office allegedly usurped by
Senate of the Congress of the Philippines, having been elected as another, in which case he can bring the action in his own name.
such during the national elections last May 2004. The person instituting quo warranto proceedings in his own behalf
must claim and be able to show that he is entitled to the office in
6. Since his election as Chairman of the PNRC Board of dispute, otherwise the action may be dismissed at any stage.[6] In
Governors, which position he duly accepted, respondent has been the present case, petitioners do not claim to be entitled to the
exercising the powers and discharging the functions and duties of Senate office of respondent. Clearly, petitioners have no standing
said office, despite the fact that he is still a senator. to file the present petition.
7. It is the respectful submission of the petitioner[s] that by
accepting the chairmanship of the Board of Governors of the Even if the Court disregards the infirmities of the petition and treats
PNRC, respondent has ceased to be a Member of the House of it as a taxpayers suit, the petition would still fail on the merits.
Senate as provided in Section 13, Article VI of the Philippine
Constitution, x x x PNRC is a Private Organization Performing Public Functions
xxxx
10. It is respectfully submitted that in accepting the position of On 22 March 1947, President Manuel A. Roxas signed Republic
Chairman of the Board of Governors of the PNRC on February 23, Act No. 95,[7] otherwise known as the PNRC Charter. The PNRC
2006, respondent has automatically forfeited his seat in the House is a non-profit, donor-funded, voluntary, humanitarian
of Senate and, therefore, has long ceased to be a Senator, organization, whose mission is to bring timely, effective, and
pursuant to the ruling of this Honorable Court in the case of compassionate humanitarian assistance for the most vulnerable
FLORES, ET AL. VS. DRILON AND GORDON, G.R. No. 104732, without consideration of nationality, race, religion, gender, social
xxx status, or political affiliation.[8] The PNRC provides six major
11. Despite the fact that he is no longer a senator, respondent services: Blood Services, Disaster Management, Safety Services,
continues to act as such and still performs the powers, functions Community Health and Nursing, Social Services and Voluntary
and duties of a senator, contrary to the constitution, law and Service.[9]
jurisprudence.
12. Unless restrained, therefore, respondent will continue to The Republic of the Philippines, adhering to the Geneva
falsely act and represent himself as a senator or member of the Conventions, established the PNRC as a voluntary organization
House of Senate, collecting the salaries, emoluments and other for the purpose contemplated in the Geneva Convention of 27 July
compensations, benefits and privileges appertaining and due only 1929.[10] The Whereas clauses of the PNRC Charter read:
and health and to ensure respect for the human being. It promotes
WHEREAS, there was developed at Geneva, Switzerland, on mutual understanding, friendship, cooperation and lasting peace
August 22, 1864, a convention by which the nations of the world amongst all peoples.
were invited to join together in diminishing, so far lies within their 2. IMPARTIALITY It makes no discrimination as to nationality,
power, the evils inherent in war; race, religious beliefs, class or political opinions. It endeavors to
WHEREAS, more than sixty nations of the world have ratified or relieve the suffering of individuals, being guided solely by their
adhered to the subsequent revision of said convention, namely the needs, and to give priority to the most urgent cases of distress.
Convention of Geneva of July 29 [sic], 1929 for the Amelioration 3. NEUTRALITY In order to continue to enjoy the confidence of
of the Condition of the Wounded and Sick of Armies in the Field all, the Movement may not take sides in hostilities or engage at
(referred to in this Charter as the Geneva Red Cross Convention); any time in controversies of a political, racial, religious or
WHEREAS, the Geneva Red Cross Convention envisages the ideological nature.
establishment in each country of a voluntary organization to assist 4. INDEPENDENCE The Movement is independent. The National
in caring for the wounded and sick of the armed forces and to Societies, while auxiliaries in the humanitarian services of their
furnish supplies for that purpose; governments and subject to the laws of their respective countries,
WHEREAS, the Republic of the Philippines became an must always maintain their autonomy so that they may be able at
independent nation on July 4, 1946 and proclaimed its adherence all times to act in accordance with the principles of the Movement.
to the Geneva Red Cross Convention on February 14, 1947, and 5. VOLUNTARY SERVICE It is a voluntary relief movement not
by that action indicated its desire to participate with the nations of prompted in any manner by desire for gain.
the world in mitigating the suffering caused by war and to establish 6. UNITY There can be only one Red Cross or one Red Crescent
in the Philippines a voluntary organization for that purpose as Society in any one country. It must be open to all. It must carry on
contemplated by the Geneva Red Cross Convention; its humanitarian work throughout its territory.
WHEREAS, there existed in the Philippines since 1917 a Charter 7. UNIVERSALITY The International Red Cross and Red
of the American National Red Cross which must be terminated in Crescent Movement, in which all Societies have equal status and
view of the independence of the Philippines; and share equal responsibilities and duties in helping each other, is
WHEREAS, the volunteer organizations established in the other worldwide. (Emphasis supplied)
countries which have ratified or adhered to the Geneva Red Cross
Convention assist in promoting the health and welfare of their
people in peace and in war, and through their mutual assistance The Fundamental Principles provide a universal standard of
and cooperation directly and through their international reference for all members of the Movement. The PNRC, as a
organizations promote better understanding and sympathy among member National Society of the Movement, has the duty to uphold
the peoples of the world. (Emphasis supplied) the Fundamental Principles and ideals of the Movement. In order
to be recognized as a National Society, the PNRC has to be
The PNRC is a member National Society of the International Red autonomous and must operate in conformity with the Fundamental
Cross and Red Crescent Movement (Movement), which is Principles of the Movement.[11]
composed of the International Committee of the Red Cross The reason for this autonomy is fundamental. To be accepted by
(ICRC), the International Federation of Red Cross and Red warring belligerents as neutral workers during international or
Crescent Societies (International Federation), and the National internal armed conflicts, the PNRC volunteers must not be seen
Red Cross and Red Crescent Societies (National Societies). The as belonging to any side of the armed conflict. In the Philippines
Movement is united and guided by its seven Fundamental where there is a communist insurgency and a Muslim separatist
Principles: rebellion, the PNRC cannot be seen as government-owned or
controlled, and neither can the PNRC volunteers be identified as
1. HUMANITY The International Red Cross and Red Crescent government personnel or as instruments of government policy.
Movement, born of a desire to bring assistance without Otherwise, the insurgents or separatists will treat PNRC
discrimination to the wounded on the battlefield, endeavors, in its volunteers as enemies when the volunteers tend to the wounded
international and national capacity, to prevent and alleviate human in the battlefield or the displaced civilians in conflict areas.
suffering wherever it may be found. Its purpose is to protect life
Thus, the PNRC must not only be, but must also be seen to be, majority. Clearly, an overwhelming majority of four-fifths of the
autonomous, neutral and independent in order to conduct its PNRC Board are elected or chosen by the private sector members
activities in accordance with the Fundamental Principles. The of the PNRC.
PNRC must not appear to be an instrument or agency that
implements government policy; otherwise, it cannot merit the trust The PNRC Board of Governors, which exercises all corporate
of all and cannot effectively carry out its mission as a National Red powers of the PNRC, elects the PNRC Chairman and all other
Cross Society.[12] It is imperative that the PNRC must be officers of the PNRC. The incumbent Chairman of PNRC,
autonomous, neutral, and independent in relation to the State. respondent Senator Gordon, was elected, as all PNRC Chairmen
are elected, by a private sector-controlled PNRC Board four-fifths
To ensure and maintain its autonomy, neutrality, and of whom are private sector members of the PNRC. The PNRC
independence, the PNRC cannot be owned or controlled by the Chairman is not appointed by the President or by any subordinate
government. Indeed, the Philippine government does not own the government official.
PNRC. The PNRC does not have government assets and does
not receive any appropriation from the Philippine Congress.[13] Under Section 16, Article VII of the Constitution,[14] the President
The PNRC is financed primarily by contributions from private appoints all officials and employees in the Executive branch
individuals and private entities obtained through solicitation whose appointments are vested in the President by the
campaigns organized by its Board of Governors, as provided Constitution or by law. The President also appoints those whose
under Section 11 of the PNRC Charter: appointments are not otherwise provided by law. Under this
Section 16, the law may also authorize the heads of departments,
SECTION 11. As a national voluntary organization, the Philippine agencies, commissions, or boards to appoint officers lower in rank
National Red Cross shall be financed primarily by contributions than such heads of departments, agencies, commissions or
obtained through solicitation campaigns throughout the year boards.[15] In Rufino v. Endriga,[16] the Court explained
which shall be organized by the Board of Governors and appointments under Section 16 in this wise:
conducted by the Chapters in their respective jurisdictions. These
fund raising campaigns shall be conducted independently of other
fund drives by other organizations. (Emphasis supplied) Under Section 16, Article VII of the 1987 Constitution, the
President appoints three groups of officers. The first group refers
to the heads of the Executive departments, ambassadors, other
The government does not control the PNRC. Under the PNRC public ministers and consuls, officers of the armed forces from the
Charter, as amended, only six of the thirty members of the PNRC rank of colonel or naval captain, and other officers whose
Board of Governors are appointed by the President of the appointments are vested in the President by the Constitution. The
Philippines. Thus, twenty-four members, or four-fifths (4/5), of the second group refers to those whom the President may be
PNRC Board of Governors are not appointed by the President. authorized by law to appoint. The third group refers to all other
Section 6 of the PNRC Charter, as amended, provides: officers of the Government whose appointments are not otherwise
provided by law.
SECTION 6. The governing powers and authority shall be vested
in a Board of Governors composed of thirty members, six of whom Under the same Section 16, there is a fourth group of lower-
shall be appointed by the President of the Philippines, eighteen ranked officers whose appointments Congress may by law vest in
shall be elected by chapter delegates in biennial conventions and the heads of departments, agencies, commissions, or boards. x x
the remaining six shall be selected by the twenty-four members of x
the Board already chosen. x x x.
xxx
Thus, of the twenty-four members of the PNRC Board, eighteen
are elected by the chapter delegates of the PNRC, and six are In a department in the Executive branch, the head is the
elected by the twenty-four members already chosen a select Secretary. The law may not authorize the Undersecretary, acting
group where the private sector members have three-fourths as such Undersecretary, to appoint lower-ranked officers in the
Executive department. In an agency, the power is vested in the a local government unit. Thus, the CCP must fall under the
head of the agency for it would be preposterous to vest it in the Executive branch. Under the Revised Administrative Code of
agency itself. In a commission, the head is the chairperson of the 1987, any agency not placed by law or order creating them under
commission. In a board, the head is also the chairperson of the any specific department falls under the Office of the President.
board. In the last three situations, the law may not also authorize
officers other than the heads of the agency, commission, or board Since the President exercises control over all the executive
to appoint lower-ranked officers. departments, bureaus, and offices, the President necessarily
exercises control over the CCP which is an office in the Executive
xxx branch. In mandating that the President shall have control of all
executive . . . offices, Section 17, Article VII of the 1987
The Constitution authorizes Congress to vest the power to appoint Constitution does not exempt any executive office one performing
lower-ranked officers specifically in the heads of the specified executive functions outside of the independent constitutional
offices, and in no other person. The word heads refers to the bodies from the Presidents power of control. There is no dispute
chairpersons of the commissions or boards and not to their that the CCP performs executive, and not legislative, judicial, or
members, for several reasons. quasi-judicial functions.

The Presidents power of control applies to the acts or decisions of


The President does not appoint the Chairman of the PNRC. all officers in the Executive branch. This is true whether such
Neither does the head of any department, agency, commission or officers are appointed by the President or by heads of
board appoint the PNRC Chairman. Thus, the PNRC Chairman is departments, agencies, commissions, or boards. The power of
not an official or employee of the Executive branch since his control means the power to revise or reverse the acts or decisions
appointment does not fall under Section 16, Article VII of the of a subordinate officer involving the exercise of discretion.
Constitution. Certainly, the PNRC Chairman is not an official or
employee of the Judiciary or Legislature. This leads us to the In short, the President sits at the apex of the Executive branch,
obvious conclusion that the PNRC Chairman is not an official or and exercises control of all the executive departments, bureaus,
employee of the Philippine Government. Not being a government and offices. There can be no instance under the Constitution
official or employee, the PNRC Chairman, as such, does not hold where an officer of the Executive branch is outside the control of
a government office or employment. the President. The Executive branch is unitary since there is only
one President vested with executive power exercising control over
Under Section 17, Article VII of the Constitution,[17] the President the entire Executive branch. Any office in the Executive branch
exercises control over all government offices in the Executive that is not under the control of the President is a lost command
branch. If an office is legally not under the control of the President, whose existence is without any legal or constitutional basis.
then such office is not part of the Executive branch. In Rufino v. (Emphasis supplied)
Endriga,[18] the Court explained the Presidents power of control
over all government offices as follows:
An overwhelming four-fifths majority of the PNRC Board are
Every government office, entity, or agency must fall under the private sector individuals elected to the PNRC Board by the
Executive, Legislative, or Judicial branches, or must belong to one private sector members of the PNRC. The PNRC Board exercises
of the independent constitutional bodies, or must be a quasi- all corporate powers of the PNRC. The PNRC is controlled by
judicial body or local government unit. Otherwise, such private sector individuals. Decisions or actions of the PNRC Board
government office, entity, or agency has no legal and are not reviewable by the President. The President cannot reverse
constitutional basis for its existence. or modify the decisions or actions of the PNRC Board. Neither can
the President reverse or modify the decisions or actions of the
The CCP does not fall under the Legislative or Judicial branches PNRC Chairman. It is the PNRC Board that can review, reverse
of government. The CCP is also not one of the independent or modify the decisions or actions of the PNRC Chairman. This
constitutional bodies. Neither is the CCP a quasi-judicial body nor
proves again that the office of the PNRC Chairman is a private
office, not a government office. SEC. 2. General Terms Defined. x x x
Although the State is often represented in the governing bodies of (13) Government-owned or controlled corporation refers to any
a National Society, this can be justified by the need for proper agency organized as a stock or non-stock corporation, vested with
coordination with the public authorities, and the government functions relating to public needs whether governmental or
representatives may take part in decision-making within a National proprietary in nature, and owned by the Government directly or
Society. However, the freely-elected representatives of a National through its instrumentalities either wholly, or where applicable as
Societys active members must remain in a large majority in a in the case of stock corporations, to the extent of at least fifty-one
National Societys governing bodies.[19] (51) percent of its capital stock: Provided, That government-
owned or controlled corporations may be further categorized by
The PNRC is not government-owned but privately owned. The the Department of the Budget, the Civil Service Commission, and
vast majority of the thousands of PNRC members are private the Commission on Audit for purposes of the exercise and
individuals, including students. Under the PNRC Charter, those discharge of their respective powers, functions and
who contribute to the annual fund campaign of the PNRC are responsibilities with respect to such corporations.(Boldfacing and
entitled to membership in the PNRC for one year. Thus, any one underscoring supplied)
between 6 and 65 years of age can be a PNRC member for one
year upon contributing P35, P100, P300, P500 or P1,000 for the
year.[20] Even foreigners, whether residents or not, can be A government-owned or controlled corporation must be owned by
members of the PNRC. Section 5 of the PNRC Charter, as the government, and in the case of a stock corporation, at least a
amended by Presidential Decree No. 1264,[21] reads: majority of its capital stock must be owned by the government. In
the case of a non-stock corporation, by analogy at least a majority
SEC. 5. Membership in the Philippine National Red Cross shall be of the members must be government officials holding such
open to the entire population in the Philippines regardless of membership by appointment or designation by the government.
citizenship. Any contribution to the Philippine National Red Cross Under this criterion, and as discussed earlier, the government
Annual Fund Campaign shall entitle the contributor to membership does not own or control PNRC.
for one year and said contribution shall be deductible in full for
taxation purposes. The PNRC Charter is Violative of the Constitutional Proscription
against the Creation of Private Corporations by Special Law
Thus, the PNRC is a privately owned, privately funded, and
privately run charitable organization. The PNRC is not a The 1935 Constitution, as amended, was in force when the PNRC
government-owned or controlled corporation. was created by special charter on 22 March 1947. Section 7,
Article XIV of the 1935 Constitution, as amended, reads:
Petitioners anchor their petition on the 1999 case of
Camporedondo v. NLRC,[22] which ruled that the PNRC is a SEC. 7. The Congress shall not, except by general law, provide
government-owned or controlled corporation. In ruling that the for the formation, organization, or regulation of private
PNRC is a government-owned or controlled corporation, the corporations, unless such corporations are owned or controlled by
simple test used was whether the corporation was created by its the Government or any subdivision or instrumentality thereof.
own special charter for the exercise of a public function or by
incorporation under the general corporation law. Since the PNRC
was created under a special charter, the Court then ruled that it is The subsequent 1973 and 1987 Constitutions contain similar
a government corporation. However, the Camporedondo ruling provisions prohibiting Congress from creating private corporations
failed to consider the definition of a government-owned or except by general law. Section 1 of the PNRC Charter, as
controlled corporation as provided under Section 2(13) of the amended, creates the PNRC as a body corporate and politic, thus:
Introductory Provisions of the Administrative Code of 1987:
SECTION 1. There is hereby created in the Republic of the
Philippines a body corporate and politic to be the voluntary
organization officially designated to assist the Republic of the such corporations are government-owned or controlled.[24]
Philippines in discharging the obligations set forth in the Geneva (Emphasis supplied)
Conventions and to perform such other duties as are inherent
upon a National Red Cross Society. The national headquarters of
this Corporation shall be located in Metropolitan Manila. In Feliciano, the Court held that the Local Water Districts are
(Emphasis supplied) government-owned or controlled corporations since they exist by
virtue of Presidential Decree No. 198, which constitutes their
special charter. The seed capital assets of the Local Water
In Feliciano v. Commission on Audit,[23] the Court explained the Districts, such as waterworks and sewerage facilities, were public
constitutional provision prohibiting Congress from creating private property which were managed, operated by or under the control
corporations in this wise: of the city, municipality or province before the assets were
transferred to the Local Water Districts. The Local Water Districts
We begin by explaining the general framework under the also receive subsidies and loans from the Local Water Utilities
fundamental law. The Constitution recognizes two classes of Administration (LWUA). In fact, under the 2009 General
corporations. The first refers to private corporations created under Appropriations Act,[25] the LWUA has a budget amounting to
a general law. The second refers to government-owned or P400,000,000 for its subsidy requirements.[26] There is no private
controlled corporations created by special charters. Section 16, capital invested in the Local Water Districts. The capital assets
Article XII of the Constitution provides: and operating funds of the Local Water Districts all come from the
government, either through transfer of assets, loans, subsidies or
Sec. 16. The Congress shall not, except by general law, provide the income from such assets or funds.
for the formation, organization, or regulation of private
corporations. Government-owned or controlled corporations may The government also controls the Local Water Districts because
be created or established by special charters in the interest of the the municipal or city mayor, or the provincial governor, appoints
common good and subject to the test of economic viability. all the board directors of the Local Water Districts. Furthermore,
the board directors and other personnel of the Local Water
The Constitution emphatically prohibits the creation of private Districts are government employees subject to civil service laws
corporations except by general law applicable to all citizens. The and anti-graft laws. Clearly, the Local Water Districts are
purpose of this constitutional provision is to ban private considered government-owned or controlled corporations not only
corporations created by special charters, which historically gave because of their creation by special charter but also because the
certain individuals, families or groups special privileges denied to government in fact owns and controls the Local Water Districts.
other citizens. Just like the Local Water Districts, the PNRC was created through
a special charter. However, unlike the Local Water Districts, the
In short, Congress cannot enact a law creating a private elements of government ownership and control are clearly lacking
corporation with a special charter. Such legislation would be in the PNRC. Thus, although the PNRC is created by a special
unconstitutional. Private corporations may exist only under a charter, it cannot be considered a government-owned or
general law. If the corporation is private, it must necessarily exist controlled corporation in the absence of the essential elements of
under a general law. Stated differently, only corporations created ownership and control by the government. In creating the PNRC
under a general law can qualify as private corporations. Under as a corporate entity, Congress was in fact creating a private
existing laws, the general law is the Corporation Code, except that corporation. However, the constitutional prohibition against the
the Cooperative Code governs the incorporation of cooperatives. creation of private corporations by special charters provides no
exception even for non-profit or charitable corporations.
Consequently, the PNRC Charter, insofar as it creates the PNRC
The Constitution authorizes Congress to create government- as a private corporation and grants it corporate powers,[27] is void
owned or controlled corporations through special charters. Since for being unconstitutional. Thus, Sections 1,[28] 2,[29] 3,[30]
private corporations cannot have special charters, it follows that 4(a),[31] 5,[32] 6,[33] 7,[34] 8,[35] 9,[36] 10,[37] 11,[38] 12,[39]
Congress can create corporations with special charters only if and 13[40] of the PNRC Charter, as amended, are void.
The other provisions[41] of the PNRC Charter remain valid as they
can be considered as a recognition by the State that the
unincorporated PNRC is the local National Society of the
International Red Cross and Red Crescent Movement, and thus - versus -
entitled to the benefits, exemptions and privileges set forth in the
PNRC Charter. The other provisions of the PNRC Charter
implement the Philippine Governments treaty obligations under
Article 4(5) of the Statutes of the International Red Cross and Red
Crescent Movement, which provides that to be recognized as a
National Society, the Society must be duly recognized by the legal
government of its country on the basis of the Geneva Conventions
and of the national legislation as a voluntary aid society, auxiliary
to the public authorities in the humanitarian field.
COMMISSION ON AUDIT,
In sum, we hold that the office of the PNRC Chairman is not a Respondent.
government office or an office in a government-owned or
controlled corporation for purposes of the prohibition in Section G.R. No. 177131
13, Article VI of the 1987 Constitution. However, since the PNRC
Charter is void insofar as it creates the PNRC as a private Present:
corporation, the PNRC should incorporate under the Corporation
Code and register with the Securities and Exchange Commission CORONA, C.J.,
if it wants to be a private corporation. CARPIO,
CARPIO MORALES,
WHEREFORE, we declare that the office of the Chairman of the VELASCO, JR.,
Philippine National Red Cross is not a government office or an NACHURA,
office in a government-owned or controlled corporation for LEONARDO-DE CASTRO,
purposes of the prohibition in Section 13, Article VI of the 1987 BRION,
Constitution. We also declare that Sections 1, 2, 3, 4(a), 5, 6, 7, 8, PERALTA,
9, 10, 11, 12, and 13 of the Charter of the Philippine National Red BERSAMIN,
Cross, or Republic Act No. 95, as amended by Presidential DEL CASTILLO,
Decree Nos. 1264 and 1643, are VOID because they create the ABAD,
PNRC as a private corporation or grant it corporate powers. VILLARAMA, JR.,
PEREZ,
MENDOZA, and
SO ORDERED. SERENO, JJ.

2. Boy Scout v. COA


Promulgated:
BOY SCOUTS OF THE PHILIPPINES,
Petitioner, June 7, 2011
x--------------------------------------------------x Research Sector under the Corporate Audit Office I, to be audited, similar to
the subsidiary corporations, by employing the team audit approach.[8]
(Emphases supplied.)
DECISION

The BSP sought reconsideration of the COA Resolution in a letter[9] dated


LEONARDO-DE CASTRO, J.: November 26, 1999 signed by the BSP National President Jejomar C. Binay,
who is now the Vice President of the Republic, wherein he wrote:

The jurisdiction of the Commission on Audit (COA) over the Boy Scouts of the It is the position of the BSP, with all due respect, that it is not subject to the
Philippines (BSP) is the subject matter of this controversy that reached us via Commissions jurisdiction on the following grounds:
petition for prohibition[1] filed by the BSP under Rule 65 of the 1997 Rules of
Court. In this petition, the BSP seeks that the COA be prohibited from 1. We reckon that the ruling in the case of Boy Scouts of the Philippines vs.
implementing its June 18, 2002 Decision,[2] its February 21, 2007 National Labor Relations Commission, et al. (G.R. No. 80767) classifying the
Resolution,[3] as well as all other issuances arising therefrom, and that all of BSP as a government-controlled corporation is anchored on the substantial
the foregoing be rendered null and void. [4] Government participation in the National Executive Board of the BSP. It is to
be noted that the case was decided when the BSP Charter is defined by
Antecedent Facts and Background of the Case Commonwealth Act No. 111 as amended by Presidential Decree 460.

This case arose when the COA issued Resolution No. 99-011[5] on August 19, However, may we humbly refer you to Republic Act No. 7278 which amended
1999 (the COA Resolution), with the subject Defining the Commissions policy the BSPs charter after the cited case was decided. The most salient of all
with respect to the audit of the Boy Scouts of the Philippines. In its whereas amendments in RA No. 7278 is the alteration of the composition of the National
clauses, the COA Resolution stated that the BSP was created as a public Executive Board of the BSP.
corporation under Commonwealth Act No. 111, as amended by Presidential
Decree No. 460 and Republic Act No. 7278; that in Boy Scouts of the The said RA virtually eliminated the substantial government participation in the
Philippines v. National Labor Relations Commission,[6] the Supreme Court National Executive Board by removing: (i) the President of the Philippines and
ruled that the BSP, as constituted under its charter, was a government- executive secretaries, with the exception of the Secretary of Education, as
controlled corporation within the meaning of Article IX(B)(2)(1) of the members thereof; and (ii) the appointment and confirmation power of the
Constitution; and that the BSP is appropriately regarded as a government President of the Philippines, as Chief Scout, over the members of the said
instrumentality under the 1987 Administrative Code.[7] The COA Resolution Board.
also cited its constitutional mandate under Section 2(1), Article IX (D). Finally,
the COA Resolution reads: The BSP believes that the cited case has been superseded by RA 7278.
Thereby weakening the cases conclusion that the BSP is a government-
NOW THEREFORE, in consideration of the foregoing premises, the controlled corporation (sic). The 1987 Administrative Code itself, of which the
COMMISSION PROPER HAS RESOLVED, AS IT DOES HEREBY BSP vs. NLRC relied on for some terms, defines government-owned and
RESOLVE, to conduct an annual financial audit of the Boy Scouts of the controlled corporations as agencies organized as stock or non-stock
Philippines in accordance with generally accepted auditing standards, and corporations which the BSP, under its present charter, is not.
express an opinion on whether the financial statements which include the
Balance Sheet, the Income Statement and the Statement of Cash Flows Also, the Government, like in other GOCCs, does not have funds invested in
present fairly its financial position and results of operations. the BSP. What RA 7278 only provides is that the Government or any of its
subdivisions, branches, offices, agencies and instrumentalities can from time
xxxx to time donate and contribute funds to the BSP.

BE IT RESOLVED FURTHERMORE, that for purposes of audit supervision, xxxx


the Boy Scouts of the Philippines shall be classified among the government
corporations belonging to the Educational, Social, Scientific, Civic and
Also the BSP respectfully believes that the BSP is not appropriately regarded designation of the BSP as a public corporation. These grounds have not been
as a government instrumentality under the 1987 Administrative Code as stated deleted by R.A. No. 7278. On the contrary, these were strengthened as
in the COA resolution. As defined by Section 2(10) of the said code, evidenced by the amendment made relative to BSPs purposes stated in
instrumentality refers to any agency of the National Government, not Section 3 of R.A. No. 7278.
integrated within the department framework, vested with special functions or
jurisdiction by law, endowed with some if not all corporate powers, On the argument that BSP is not appropriately regarded as a government
administering special funds, and enjoying operational autonomy, usually instrumentality and agency of the government, such has already been
through a charter. answered and clarified. The Supreme Court has elucidated this matter in the
BSP case when it declared that BSP is regarded as, both a government-
The BSP is not an entity administering special funds. It is not even included in controlled corporation with an original charter and as an instrumentality of the
the DECS National Budget. x x x Government. Likewise, it is not disputed that the Administrative Code of 1987
designated the BSP as one of the attached agencies of DECS. Being an
It may be argued also that the BSP is not an agency of the Government. The attached agency, however, it does not change its nature as a government-
1987 Administrative Code, merely referred the BSP as an attached agency of controlled corporation with original charter and, necessarily, subject to COA
the DECS as distinguished from an actual line agency of departments that are audit jurisdiction. Besides, Section 2(1), Article IX-D of the Constitution
included in the National Budget. The BSP believes that an attached agency is provides that COA shall have the power, authority, and duty to examine, audit
different from an agency. Agency, as defined in Section 2(4) of the and settle all accounts pertaining to the revenue and receipts of, and
Administrative Code, is defined as any of the various units of the Government expenditures or uses of funds and property, owned or held in trust by, or
including a department, bureau, office, instrumentality, government-owned or pertaining to, the Government, or any of its subdivisions, agencies or
controlled corporation or local government or distinct unit therein. instrumentalities, including government-owned or controlled corporations with
original charters.[14]
Under the above definition, the BSP is neither a unit of the Government; a
department which refers to an executive department as created by law
(Section 2[7] of the Administrative Code); nor a bureau which refers to any Based on the Memorandum of the COA General Counsel, Director Sunico
principal subdivision or unit of any department (Section 2[8], Administrative wrote:
Code).[10]
In view of the points clarified by said Memorandum upholding COA Resolution
Subsequently, requests for reconsideration of the COA Resolution were also No. 99-011, we have to comply with the provisions of the latter, among which
made separately by Robert P. Valdellon, Regional Scout Director, Western is to conduct an annual financial audit of the Boy Scouts of the Philippines.[15]
Visayas Region, Iloilo City and Eugenio F. Capreso, Council Scout Executive
of Calbayog City.[11]
In a letter dated November 20, 2000 signed by Director Amorsonia B. Escarda,
In a letter[12] dated July 3, 2000, Director Crescencio S. Sunico, Corporate CAO I, the COA informed the BSP that a preliminary survey of its
Audit Officer (CAO) I of the COA, furnished the BSP with a copy of the organizational structure, operations and accounting system/records shall be
Memorandum[13] dated June 20, 2000 of Atty. Santos M. Alquizalas, the COA conducted on November 21 to 22, 2000.[16]
General Counsel. In said Memorandum, the COA General Counsel opined that
Republic Act No. 7278 did not supersede the Courts ruling in Boy Scouts of Upon the BSPs request, the audit was deferred for thirty (30) days. The BSP
the Philippines v. National Labor Relations Commission, even though said law then filed a Petition for Review with Prayer for Preliminary Injunction and/or
eliminated the substantial government participation in the selection of Temporary Restraining Order before the COA. This was denied by the COA in
members of the National Executive Board of the BSP. The Memorandum its questioned Decision, which held that the BSP is under its audit jurisdiction.
further provides: The BSP moved for reconsideration but this was likewise denied under its
questioned Resolution.[17]
Analysis of the said case disclosed that the substantial government
participation is only one (1) of the three (3) grounds relied upon by the Court This led to the filing by the BSP of this petition for prohibition with preliminary
in the resolution of the case. Other considerations include the character of the injunction and temporary restraining order against the COA.
BSPs purposes and functions which has a public aspect and the statutory
The Issue changed PALs, the BSP makes the case that the government no longer has
control over it; thus, the COA cannot use the Boy Scouts of the Philippines v.
As stated earlier, the sole issue to be resolved in this case is whether the BSP National Labor Relations Commission as its basis for the exercise of its
falls under the COAs audit jurisdiction. jurisdiction and the issuance of COA Resolution No. 99-011.[24] The BSP
further claims as follows:

It is not far-fetched, in fact, to concede that BSPs funds and assets are private
in character. Unlike ordinary public corporations, such as provinces, cities, and
The Parties Respective Arguments municipalities, or government-owned and controlled corporations, such as
Land Bank of the Philippines and the Development Bank of the Philippines,
The BSP contends that Boy Scouts of the Philippines v. National Labor the assets and funds of BSP are not derived from any government grant. For
Relations Commission is inapplicable for purposes of determining the audit its operations, BSP is not dependent in any way on any government
jurisdiction of the COA as the issue therein was the jurisdiction of the National appropriation; as a matter of fact, it has not even been included in any
Labor Relations Commission over a case for illegal dismissal and unfair labor appropriations for the government. To be sure, COA has not alleged, in its
practice filed by certain BSP employees.[18] Resolution No. 99-011 or in the Memorandum of its General Counsel, that BSP
received, receives or continues to receive assets and funds from any agency
While the BSP concedes that its functions do relate to those that the of the government. The foregoing simply point to the private nature of the funds
government might otherwise completely assume on its own, it avers that this and assets of petitioner BSP.
alone was not determinative of the COAs audit jurisdiction over it. The BSP
further avers that the Court in Boy Scouts of the Philippines v. National Labor xxxx
Relations Commission simply stated x x x that in respect of functions, the BSP
is akin to a public corporation but this was not synonymous to holding that the As stated in petitioners third argument, BSPs assets and funds were never
BSP is a government corporation or entity subject to audit by the COA. [19] acquired from the government. Its operations are not in any way financed by
the government, as BSP has never been included in any appropriations act for
The BSP contends that Republic Act No. 7278 introduced crucial amendments the government. Neither has the government invested funds with BSP. BSP,
to its charter; hence, the findings of the Court in Boy Scouts of the Philippines has not been, at any time, a user of government property or funds; nor have
v. National Labor Relations Commission are no longer valid as the government properties of the government been held in trust by BSP. This is precisely the
has ceased to play a controlling influence in it. The BSP claims that the reason why, until this time, the COA has not attempted to subject BSP to its
pronouncements of the Court therein must be taken only within the context of audit jurisdiction. x x x.[25]
that case; that the Court had categorically found that its assets were acquired
from the Boy Scouts of America and not from the Philippine government, and
that its operations are financed chiefly from membership dues of the Boy To summarize its other arguments, the BSP contends that it is not a
Scouts themselves as well as from property rentals; and that the BSP may government-owned or controlled corporation; neither is it an instrumentality,
correctly be characterized as non-governmental, and hence, beyond the audit agency, or subdivision of the government.
jurisdiction of the COA. It further claims that the designation by the Court of
the BSP as a government agency or instrumentality is mere obiter dictum.[20] In its Comment,[26] the COA argues as follows:

The BSP maintains that the provisions of Republic Act No. 7278 suggest that 1. The BSP is a public corporation created under Commonwealth Act
governance of BSP has come to be overwhelmingly a private affair or nature, No. 111 dated October 31, 1936, and whose functions relate to the fostering
with government participation restricted to the seat of the Secretary of of public virtues of citizenship and patriotism and the general improvement of
Education, Culture and Sports.[21] It cites Philippine Airlines Inc. v. the moral spirit and fiber of the youth. The manner of creation and the purpose
Commission on Audit[22] wherein the Court declared that, PAL, having ceased for which the BSP was created indubitably prove that it is a government
to be a government-owned or controlled corporation is no longer under the agency.
audit jurisdiction of the COA.[23] Claiming that the amendments introduced by
Republic Act No. 7278 constituted a supervening event that changed the BSPs
corporate identity in the same way that the governments privatization program
2. Being a government agency, the funds and property owned or held indirectly from the DBM, and because VFP funds come from membership dues
in trust by the BSP are subject to the audit authority of respondent Commission and lease rentals earned from administering government lands reserved for
on Audit pursuant to Section 2 (1), Article IX-D of the 1987 Constitution. the VFP.

3. Republic Act No. 7278 did not change the character of the BSP as The fact that no budgetary appropriations have been released to the VFP does
a government-owned or controlled corporation and government not prove that it is a private corporation. The DBM indeed did not see it fit to
instrumentality.[27] propose budgetary appropriations to the VFP, having itself believed that the
VFP is a private corporation. If the DBM, however, is mistaken as to its
conclusion regarding the nature of VFP's incorporation, its previous assertions
The COA maintains that the functions of the BSP that include, among others, will not prevent future budgetary appropriations to the VFP. The erroneous
the teaching to the youth of patriotism, courage, self-reliance, and kindred application of the law by public officers does not bar a subsequent correct
virtues, are undeniably sovereign functions enshrined under the Constitution application of the law.[31] (Citations omitted.)
and discussed by the Court in Boy Scouts of the Philippines v. National Labor
Relations Commission. The COA contends that any attempt to classify the
BSP as a private corporation would be incomprehensible since no less than The COA points out that the government is not precluded by law from
the law which created it had designated it as a public corporation and its extending financial support to the BSP and adding to its funds, and that as a
statutory mandate embraces performance of sovereign functions.[28] government instrumentality which continues to perform a vital function imbued
with public interest and reflective of the governments policy to stimulate
The COA claims that the only reason why the BSP employees fell within the patriotic sentiments and love of country, the BSPs funds from whatever source
scope of the Civil Service Commission even before the 1987 Constitution was are public funds, and can be used solely for public purpose in pursuance of
the fact that it was a government-owned or controlled corporation; that as an the provisions of Republic Act No. [7278].[32]
attached agency of the Department of Education, Culture and Sports (DECS),
the BSP is an agency of the government; and that the BSP is a chartered The COA claims that the fact that it has not yet audited the BSPs funds may
institution under Section 1(12) of the Revised Administrative Code of 1987, not bar the subsequent exercise of its audit jurisdiction.
embraced under the term government instrumentality.[29]
The BSP filed its Reply[33] on August 29, 2007 maintaining that its statutory
The COA concludes that being a government agency, the funds and property designation as a public corporation and the public character of its purpose and
owned or held by the BSP are subject to the audit authority of the COA functions are not determinative of the COAs audit jurisdiction; reiterating its
pursuant to Section 2(1), Article IX (D) of the 1987 Constitution. stand that Boy Scouts of the Philippines v. National Labor Relations
Commission is not applicable anymore because the aspect of government
In support of its arguments, the COA cites The Veterans Federation of the ownership and control has been removed by Republic Act No. 7278; and
Philippines (VFP) v. Reyes,[30] wherein the Court held that among the reasons concluding that the funds and property that it either owned or held in trust are
why the VFP is a public corporation is that its charter, Republic Act No. 2640, not public funds and are not subject to the COAs audit jurisdiction.
designates it as one. Furthermore, the COA quotes the Court as saying in that
case: Thereafter, considering the BSPs claim that it is a private corporation, this
Court, in a Resolution[34] dated July 20, 2010, required the parties to file,
In several cases, we have dealt with the issue of whether certain specific within a period of twenty (20) days from receipt of said Resolution, their
activities can be classified as sovereign functions. These cases, which deal respective comments on the issue of whether Commonwealth Act No. 111, as
with activities not immediately apparent to be sovereign functions, upheld the amended by Republic Act No. 7278, is constitutional.
public sovereign nature of operations needed either to promote social justice
or to stimulate patriotic sentiments and love of country. In compliance with the Courts resolution, the parties filed their respective
Comments.
xxxx
In its Comment[35] dated October 22, 2010, the COA argues that the
Petitioner claims that its funds are not public funds because no budgetary constitutionality of Commonwealth Act No. 111, as amended, is not
appropriations or government funds have been released to the VFP directly or determinative of the resolution of the present controversy on the COAs audit
jurisdiction over petitioner, and in fact, the controversy may be resolved on before an entity may be subject of said jurisdiction.[45] It avers that it merely
other grounds; thus, the requisites before a judicial inquiry may be made, as stated in its Reply that the withdrawal of government control is akin to
set forth in Commissioner of Internal Revenue v. Court of Tax Appeals,[36] privatization, but it does not necessarily mean that petitioner is a private
have not been fully met.[37] Moreover, the COA maintains that behind every corporation.[46] The BSP claims that it has a unique characteristic which
law lies the presumption of constitutionality.[38] The COA likewise argues that neither classifies it as a purely public nor a purely private corporation;[47] that
contrary to the BSPs position, repeal of a law by implication is not favored.[39] it is not a quasi-public corporation; and that it may belong to a different class
Lastly, the COA claims that there was no violation of Section 16, Article XII of altogether.[48]
the 1987 Constitution with the creation or declaration of the BSP as a
government corporation. Citing Philippine Society for the Prevention of Cruelty The BSP claims that assuming arguendo that it is a private corporation, its
to Animals v. Commission on Audit,[40] the COA further alleges: creation is not contrary to the purpose of Section 16, Article XII of the
Constitution; and that the evil sought to be avoided by said provision is
The true criterion, therefore, to determine whether a corporation is public or inexistent in the enactment of the BSPs charter,[49] as, (i) it was not created
private is found in the totality of the relation of the corporation to the State. If for any pecuniary purpose; (ii) those who will primarily benefit from its creation
the corporation is created by the State as the latters own agency or are not its officers but its entire membership consisting of boys being trained
instrumentality to help it in carrying out its governmental functions, then that in scoutcraft all over the country; (iii) it caters to all boys who wish to join the
corporation is considered public; otherwise, it is private. x x x.[41] organization without any distinction; and (iv) it does not limit its membership to
a particular class or group of boys. Thus, the enactment of its charter confers
no special privilege to particular individuals, families, or groups; nor does it
For its part, in its Comment[42] filed on December 3, 2010, the BSP submits bring about the danger of granting undue favors to certain groups to the
that its charter, Commonwealth Act No. 111, as amended by Republic Act No. prejudice of others or of the interest of the country, which are the evils sought
7278, is constitutional as it does not violate Section 16, Article XII of the to be prevented by the constitutional provision involved.[50]
Constitution. The BSP alleges that while [it] is not a public corporation within
the purview of COAs audit jurisdiction, neither is it a private corporation created Finally, the BSP states that the presumption of constitutionality of a legislative
by special law falling within the ambit of the constitutional prohibition x x x.[43] enactment prevails absent any clear showing of its repugnancy to the
The BSP further alleges: Constitution.[51]

Petitioners purpose is embodied in Section 3 of C.A. No. 111, as amended by The Ruling of the Court
Section 1 of R.A. No. 7278, thus:
After looking at the legislative history of its amended charter and carefully
xxxx studying the applicable laws and the arguments of both parties, we find that
the BSP is a public corporation and its funds are subject to the COAs audit
A reading of the foregoing provision shows that petitioner was created to jurisdiction.
advance the interest of the youth, specifically of young boys, and to mold them
into becoming good citizens. Ultimately, the creation of petitioner redounds to The BSP Charter (Commonwealth Act No. 111, approved on October 31,
the benefit, not only of those boys, but of the public good or welfare. Hence, it 1936), entitled An Act to Create a Public Corporation to be Known as the Boy
can be said that petitioners purpose and functions are more of a public rather Scouts of the Philippines, and to Define its Powers and Purposes created the
than a private character. Petitioner caters to all boys who wish to join the BSP as a public corporation to serve the following public interest or purpose:
organization without any distinction. It does not limit its membership to a
particular class of boys. Petitioners members are trained in scoutcraft and Sec. 3. The purpose of this corporation shall be to promote through
taught patriotism, civic consciousness and responsibility, courage, self- organization and cooperation with other agencies, the ability of boys to do
reliance, discipline and kindred virtues, and moral values, preparing them to useful things for themselves and others, to train them in scoutcraft, and to
become model citizens and outstanding leaders of the country.[44] inculcate in them patriotism, civic consciousness and responsibility, courage,
self-reliance, discipline and kindred virtues, and moral values, using the
The BSP reiterates its stand that the public character of its purpose and method which are in common use by boy scouts.
functions do not place it within the ambit of the audit jurisdiction of the COA as
it lacks the government ownership or control that the Constitution requires
Presidential Decree No. 460, approved on May 17, 1974, amended conduct fund-raising activities; to adopt and use a seal, and the same to alter
Commonwealth Act No. 111 and provided substantial changes in the BSP and destroy; to have offices and conduct its business and affairs in
organizational structure. Pertinent provisions are quoted below: Metropolitan Manila and in the regions, provinces, cities, municipalities, and
barangays of the Philippines, to make and adopt by-laws, rules and regulations
Section II. Section 5 of the said Act is also amended to read as follows: not inconsistent with this Act and the laws of the Philippines, and generally to
do all such acts and things, including the establishment of regulations for the
The governing body of the said corporation shall consist of a National election of associates and successors, as may be necessary to carry into effect
Executive Board composed of (a) the President of the Philippines or his the provisions of this Act and promote the purposes of said corporation:
representative; (b) the charter and life members of the Boy Scouts of the Provided, That said corporation shall have no power to issue certificates of
Philippines; (c) the Chairman of the Board of Trustees of the Philippine stock or to declare or pay dividends, its objectives and purposes being solely
Scouting Foundation; (d) the Regional Chairman of the Scout Regions of the of benevolent character and not for pecuniary profit of its members.
Philippines; (e) the Secretary of Education and Culture, the Secretary of Social
Welfare, the Secretary of National Defense, the Secretary of Labor, the "Sec. 3. The purpose of this corporation shall be to promote through
Secretary of Finance, the Secretary of Youth and Sports, and the Secretary of organization and cooperation with other agencies, the ability of boys to do
Local Government and Community Development; (f) an equal number of useful things for themselves and others, to train them in scoutcraft, and to
individuals from the private sector; (g) the National President of the Girl Scouts inculcate in them patriotism, civic consciousness and responsibility, courage,
of the Philippines; (h) one Scout of Senior age from each Scout Region to self-reliance, discipline and kindred virtues, and moral values, using the
represent the boy membership; and (i) three representatives of the cultural method which are in common use by boy scouts."
minorities. Except for the Regional Chairman who shall be elected by the
Regional Scout Councils during their annual meetings, and the Scouts of their Sec. 2. Section 4 of Commonwealth Act No. 111, as amended, is hereby
respective regions, all members of the National Executive Board shall be either repealed and in lieu thereof, Section 4 shall read as follows:
by appointment or cooption, subject to ratification and confirmation by the
Chief Scout, who shall be the Head of State. Vacancies in the Executive Board "Sec. 4. The President of the Philippines shall be the Chief Scout of the Boy
shall be filled by a majority vote of the remaining members, subject to Scouts of the Philippines."
ratification and confirmation by the Chief Scout. The by-laws may prescribe
the number of members of the National Executive Board necessary to Sec. 3. Sections 5, 6, 7 and 8 of Commonwealth Act No. 111, as amended,
constitute a quorum of the board, which number may be less than a majority are hereby amended to read as follows:
of the whole number of the board. The National Executive Board shall have
power to make and to amend the by-laws, and, by a two-thirds vote of the "Sec. 5. The governing body of the said corporation shall consist of a National
whole board at a meeting called for this purpose, may authorize and cause to Executive Board, the members of which shall be Filipino citizens of good moral
be executed mortgages and liens upon the property of the corporation. character. The Board shall be composed of the following:

"(a) One (1) charter member of the Boy Scouts of the Philippines who shall be
Subsequently, on March 24, 1992, Republic Act No. 7278 further amended elected by the members of the National Council at its meeting called for this
Commonwealth Act No. 111 by strengthening the volunteer and democratic purpose;
character of the BSP and reducing government representation in its governing
body, as follows: "(b) The regional chairmen of the scout regions who shall be elected by the
representatives of all the local scout councils of the region during its meeting
Section 1. Sections 2 and 3 of Commonwealth Act. No. 111, as amended, is called for this purpose: Provided, That a candidate for regional chairman need
hereby amended to read as follows: not be the chairman of a local scout council;

"Sec. 2. The said corporation shall have the powers of perpetual succession, "(c) The Secretary of Education, Culture and Sports;
to sue and be sued; to enter into contracts; to acquire, own, lease, convey and
dispose of such real and personal estate, land grants, rights and choses in "(d) The National President of the Girl Scouts of the Philippines;
action as shall be necessary for corporate purposes, and to accept and receive
funds, real and personal property by gift, devise, bequest or other means, to
"(e) One (1) senior scout, each from Luzon, Visayas and Mindanao areas, to Art. 45. Juridical persons mentioned in Nos. 1 and 2 of the preceding article
be elected by the senior scout delegates of the local scout councils to the scout are governed by the laws creating or recognizing them.
youth forums in their respective areas, in its meeting called for this purpose, to Private corporations are regulated by laws of general application on the
represent the boy scout membership; subject.
Partnerships and associations for private interest or purpose are governed by
"(f) Twelve (12) regular members to be elected by the members of the National the provisions of this Code concerning partnerships. (Emphasis and
Council in its meeting called for this purpose; underscoring supplied.)

"(g) At least ten (10) but not more than fifteen (15) additional members from
the private sector who shall be elected by the members of the National The purpose of the BSP as stated in its amended charter shows that it was
Executive Board referred to in the immediately preceding paragraphs (a), (b), created in order to implement a State policy declared in Article II, Section 13
(c), (d), (e) and (f) at the organizational meeting of the newly reconstituted of the Constitution, which reads:
National Executive Board which shall be held immediately after the meeting of
the National Council wherein the twelve (12) regular members and the one (1) ARTICLE II - DECLARATION OF PRINCIPLES AND STATE POLICIES
charter member were elected. Section 13. The State recognizes the vital role of the youth in nation-building
and shall promote and protect their physical, moral, spiritual, intellectual, and
xxxx social well-being. It shall inculcate in the youth patriotism and nationalism, and
encourage their involvement in public and civic affairs.
"Sec. 8. Any donation or contribution which from time to time may be made to
the Boy Scouts of the Philippines by the Government or any of its subdivisions,
branches, offices, agencies or instrumentalities or by a foreign government or Evidently, the BSP, which was created by a special law to serve a public
by private, entities and individuals shall be expended by the National Executive purpose in pursuit of a constitutional mandate, comes within the class of public
Board in pursuance of this Act. corporations defined by paragraph 2, Article 44 of the Civil Code and governed
by the law which creates it, pursuant to Article 45 of the same Code.

The BSP as a Public Corporation under Par. 2, Art. 2 of the Civil Code The BSPs Classification Under the Administrative Code of 1987

There are three classes of juridical persons under Article 44 of the Civil Code The public, rather than private, character of the BSP is recognized by the fact
and the BSP, as presently constituted under Republic Act No. 7278, falls under that, along with the Girl Scouts of the Philippines, it is classified as an attached
the second classification. Article 44 reads: agency of the DECS under Executive Order No. 292, or the Administrative
Code of 1987, which states:
Art. 44. The following are juridical persons:
TITLE VI EDUCATION, CULTURE AND SPORTS
(1) The State and its political subdivisions;
(2) Other corporations, institutions and entities for public interest or purpose Chapter 8 Attached Agencies
created by law; their personality begins as soon as they have been constituted
according to law; SEC. 20. Attached Agencies. The following agencies are hereby attached to
(3) Corporations, partnerships and associations for private interest or purpose the Department:
to which the law grants a juridical personality, separate and distinct from that
of each shareholder, partner or member. (Emphases supplied.) xxxx

(12) Boy Scouts of the Philippines;


The BSP, which is a corporation created for a public interest or purpose, is
subject to the law creating it under Article 45 of the Civil Code, which provides: (13) Girl Scouts of the Philippines.
The administrative relationship of an attached agency to the department is SECTION 1. The goals of the national economy are a more equitable
defined in the Administrative Code of 1987 as follows: distribution of opportunities, income, and wealth; a sustained increase in the
amount of goods and services produced by the nation for the benefit of the
BOOK IV people; and an expanding productivity as the key to raising the quality of life
for all, especially the underprivileged.
THE EXECUTIVE BRANCH
The State shall promote industrialization and full employment based on sound
Chapter 7 ADMINISTRATIVE RELATIONSHIP agricultural development and agrarian reform, through industries that make full
and efficient use of human and natural resources, and which are competitive
SEC. 38. Definition of Administrative Relationship. Unless otherwise expressly in both domestic and foreign markets. However, the State shall protect Filipino
stated in the Code or in other laws defining the special relationships of enterprises against unfair foreign competition and trade practices.
particular agencies, administrative relationships shall be categorized and
defined as follows: In the pursuit of these goals, all sectors of the economy and all regions of the
country shall be given optimum opportunity to develop. Private enterprises,
xxxx including corporations, cooperatives, and similar collective organizations, shall
be encouraged to broaden the base of their ownership.
(3) Attachment. (a) This refers to the lateral relationship between the
department or its equivalent and the attached agency or corporation for
purposes of policy and program coordination. The coordination may be The scope and coverage of Section 16, Article XII of the Constitution can be
accomplished by having the department represented in the governing board seen from the aforementioned declaration of state policies and goals which
of the attached agency or corporation, either as chairman or as a member, pertains to national economy and patrimony and the interests of the people in
with or without voting rights, if this is permitted by the charter; having the economic development.
attached corporation or agency comply with a system of periodic reporting
which shall reflect the progress of programs and projects; and having the Section 16, Article XII deals with the formation, organization, or regulation of
department or its equivalent provide general policies through its representative private corporations,[52] which should be done through a general law enacted
in the board, which shall serve as the framework for the internal policies of the by Congress, provides for an exception, that is: if the corporation is
attached corporation or agency. (Emphasis ours.) government owned or controlled; its creation is in the interest of the common
good; and it meets the test of economic viability. The rationale behind Article
XII, Section 16 of the 1987 Constitution was explained in Feliciano v.
As an attached agency, the BSP enjoys operational autonomy, as long as Commission on Audit,[53] in the following manner:
policy and program coordination is achieved by having at least one The Constitution emphatically prohibits the creation of private corporations
representative of government in its governing board, which in the case of the except by a general law applicable to all citizens. The purpose of this
BSP is the DECS Secretary. In this sense, the BSP is not under government constitutional provision is to ban private corporations created by special
control or supervision and control. Still this characteristic does not make the charters, which historically gave certain individuals, families or groups special
attached chartered agency a private corporation covered by the constitutional privileges denied to other citizens.[54] (Emphasis added.)
proscription in question.

Art. XII, Sec. 16 of the Constitution refers to private corporations created by It may be gleaned from the above discussion that Article XII, Section 16 bans
government for proprietary or economic/business purposes the creation of private corporations by special law. The said constitutional
provision should not be construed so as to prohibit the creation of public
corporations or a corporate agency or instrumentality of the government
At the outset, it should be noted that the provision of Section 16 in issue is intended to serve a public interest or purpose, which should not be measured
found in Article XII of the Constitution, entitled National Economy and on the basis of economic viability, but according to the public interest or
Patrimony. Section 1 of Article XII is quoted as follows: purpose it serves as envisioned by paragraph (2), of Article 44 of the Civil Code
and the pertinent provisions of the Administrative Code of 1987.
The BSP is a Public Corporation Not Subject to the Test of Government its purposes and its functions, the statutory designation of the BSP as "a public
Ownership or Control and Economic Viability corporation" and the substantial participation of the Government in the
selection of members of the National Executive Board of the BSP, the BSP, as
The BSP is a public corporation or a government agency or instrumentality presently constituted under its charter, is a government-controlled corporation
with juridical personality, which does not fall within the constitutional prohibition within the meaning of Article IX (B) (2) (1) of the Constitution.
in Article XII, Section 16, notwithstanding the amendments to its charter. Not
all corporations, which are not government owned or controlled, are ipso facto We are fortified in this conclusion when we note that the Administrative Code
to be considered private corporations as there exists another distinct class of of 1987 designates the BSP as one of the attached agencies of the
corporations or chartered institutions which are otherwise known as public Department of Education, Culture and Sports ("DECS"). An "agency of the
corporations. These corporations are treated by law as agencies or Government" is defined as referring to any of the various units of the
instrumentalities of the government which are not subject to the tests of Government including a department, bureau, office, instrumentality,
ownership or control and economic viability but to different criteria relating to government-owned or -controlled corporation, or local government or distinct
their public purposes/interests or constitutional policies and objectives and unit therein. "Government instrumentality" is in turn defined in the 1987
their administrative relationship to the government or any of its Departments Administrative Code in the following manner:
or Offices.
Instrumentality - refers to any agency of the National Government, not
Classification of Corporations Under Section 16, Article XII of the Constitution integrated within the department framework, vested with special functions or
on National Economy and Patrimony jurisdiction by law, endowed with some if not all corporate powers,
administering special funds, and enjoying operational autonomy usually
through a charter. This term includes regulatory agencies, chartered
The dissenting opinion of Associate Justice Antonio T. Carpio, citing a line of institutions and government-owned or controlled corporations.
cases, insists that the Constitution recognizes only two classes of
corporations: private corporations under a general law, and government- The same Code describes a "chartered institution" in the following terms:
owned or controlled corporations created by special charters.
Chartered institution - refers to any agency organized or operating under a
We strongly disagree. Section 16, Article XII should not be construed so as to special charter, and vested by law with functions relating to specific
prohibit Congress from creating public corporations. In fact, Congress has constitutional policies or objectives. This term includes the state universities
enacted numerous laws creating public corporations or government agencies and colleges, and the monetary authority of the State.
or instrumentalities vested with corporate powers. Moreover, Section 16,
Article XII, which relates to National Economy and Patrimony, could not have We believe that the BSP is appropriately regarded as "a government
tied the hands of Congress in creating public corporations to serve any of the instrumentality" under the 1987 Administrative Code.
constitutional policies or objectives.
In his dissent, Justice Carpio contends that this ponente introduces a totally It thus appears that the BSP may be regarded as both a "government
different species of corporation, which is neither a private corporation nor a controlled corporation with an original charter" and as an "instrumentality" of
government owned or controlled corporation and, in so doing, is missing the the Government within the meaning of Article IX (B) (2) (1) of the Constitution.
fact that the BSP, which was created as a non-stock, non-profit corporation, x x x.[55] (Emphases supplied.)
can only be either a private corporation or a government owned or controlled
corporation.
The existence of public or government corporate or juridical entities or
Note that in Boy Scouts of the Philippines v. National Labor Relations chartered institutions by legislative fiat distinct from private corporations and
Commission, the BSP, under its former charter, was regarded as both a government owned or controlled corporation is best exemplified by the 1987
government owned or controlled corporation with original charter and a public Administrative Code cited above, which we quote in part:
corporation. The said case pertinently stated:
Sec. 2. General Terms Defined. Unless the specific words of the text, or the
While the BSP may be seen to be a mixed type of entity, combining aspects context as a whole, or a particular statute, shall require a different meaning:
of both public and private entities, we believe that considering the character of
xxxx controlled by the government and be economically viable to justify its existence
under a special law.
(10) "Instrumentality" refers to any agency of the National Government, not
integrated within the department framework, vested with special functions or
jurisdiction by law, endowed with some if not all corporate powers, The dissent of Justice Carpio also submits that by recognizing a new class of
administering special funds, and enjoying operational autonomy, usually public corporation(s) created by special charter that will not be subject to the
through a charter. This term includes regulatory agencies, chartered test of economic viability, the constitutional provision will be circumvented.
institutions and government-owned or controlled corporations.
However, a review of the Record of the 1986 Constitutional Convention reveals
xxxx the intent of the framers of the highest law of our land to distinguish between
government corporations performing governmental functions and corporations
(12) "Chartered institution" refers to any agency organized or operating under involved in business or proprietary functions:
a special charter, and vested by law with functions relating to specific THE PRESIDENT. Commissioner Foz is recognized.
constitutional policies or objectives. This term includes the state universities
and colleges and the monetary authority of the State. MR. FOZ. Madam President, I support the proposal to insert ECONOMIC
VIABILITY as one of the grounds for organizing government corporations. x x
(13) "Government-owned or controlled corporation" refers to any agency x.
organized as a stock or non-stock corporation, vested with functions relating
to public needs whether governmental or proprietary in nature, and owned by MR. OPLE. Madam President, the reason for this concern is really that when
the Government directly or through its instrumentalities either wholly, or, where the government creates a corporation, there is a sense in which this
applicable as in the case of stock corporations, to the extent of at least fifty- corporation becomes exempt from the test of economic performance. We
one (51) per cent of its capital stock: Provided, That government-owned or know what happened in the past. If a government corporation loses, then it
controlled corporations may be further categorized by the Department of the makes its claim upon the taxpayers money through new equity infusions from
Budget, the Civil Service Commission, and the Commission on Audit for the government and what is always invoked is the common good. x x x
purposes of the exercise and discharge of their respective powers, functions
and responsibilities with respect to such corporations. Therefore, when we insert the phrase ECONOMIC VIABILITY together with
the common good, this becomes a restraint on future enthusiasts for state
capitalism to excuse themselves from the responsibility of meeting the market
Assuming for the sake of argument that the BSP ceases to be owned or test so that they become viable. x x x.
controlled by the government because of reduction of the number of
representatives of the government in the BSP Board, it does not follow that it xxxx
also ceases to be a government instrumentality as it still retains all the
characteristics of the latter as an attached agency of the DECS under the THE PRESIDENT. Commissioner Quesada is recognized.
Administrative Code. Vesting corporate powers to an attached agency or
instrumentality of the government is not constitutionally prohibited and is MS. QUESADA. Madam President, may we be clarified by the committee on
allowed by the above-mentioned provisions of the Civil Code and the 1987 what is meant by economic viability?
Administrative Code.
THE PRESIDENT. Please proceed.
Economic Viability and Ownership and Control Tests Inapplicable to Public
Corporations MR. MONSOD. Economic viability normally is determined by cost-benefit ratio
that takes into consideration all benefits, including economic external as well
as internal benefits. These are what they call externalities in economics, so
As presently constituted, the BSP still remains an instrumentality of the that these are not strictly financial criteria. Economic viability involves what we
national government. It is a public corporation created by law for a public call economic returns or benefits of the country that are not quantifiable in
purpose, attached to the DECS pursuant to its Charter and the Administrative financial terms. x x x.
Code of 1987. It is not a private corporation which is required to be owned or
xxxx common good but within that framework we should also build a certain
standard of economic viability.
MS. QUESADA. So, would this particular formulation now really limit the entry
of government corporations into activities engaged in by corporations? xxxx

MR. MONSOD. Yes, because it is also consistent with the economic THE PRESIDENT. Commissioner Padilla is recognized.
philosophy that this Commission approved that there should be minimum
government participation and intervention in the economy. MR. PADILLA. This is an inquiry to the committee. With regard to corporations
created by a special charter for government-owned or controlled corporations,
MS. QUESDA. Sometimes this Commission would just refer to Congress to will these be in the pioneer fields or in places where the private enterprise does
provide the particular requirements when the government would get into not or cannot enter? Or is this so general that these government corporations
corporations. But this time around, we specifically mentioned economic can compete with private corporations organized under a general law?
viability. x x x.
MR. MONSOD. Madam President, x x x. There are two types of government
MR. VILLEGAS. Commissioner Ople will restate the reason for his introducing corporations those that are involved in performing governmental functions, like
that amendment. garbage disposal, Manila waterworks, and so on; and those government
corporations that are involved in business functions. As we said earlier, there
MR. OPLE. I am obliged to repeat what I said earlier in moving for this are two criteria that should be followed for corporations that want to go into
particular amendment jointly with Commissioner Foz. During the past three business. First is for government corporations to first prove that they can be
decades, there had been a proliferation of government corporations, very few efficient in the areas of their proper functions. This is one of the problems now
of which have succeeded, and many of which are now earmarked by the because they go into all kinds of activities but are not even efficient in their
Presidential Reorganization Commission for liquidation because they failed proper functions. Secondly, they should not go into activities that the private
the economic test. x x x. sector can do better.

xxxx MR. PADILLA. There is no question about corporations performing


governmental functions or functions that are impressed with public interest.
MS. QUESADA. But would not the Commissioner say that the reason why But the question is with regard to matters that are covered, perhaps not
many of the government-owned or controlled corporations failed to come up exhaustively, by private enterprise. It seems that under this provision the only
with the economic test is due to the management of these corporations, and qualification is economic viability and common good, but shall government,
not the idea itself of government corporations? It is a problem of efficiency and through government-controlled corporations, compete with private enterprise?
effectiveness of management of these corporations which could be remedied,
not by eliminating government corporations or the idea of getting into state- MR. MONSOD. No, Madam President. As we said, the government should not
owned corporations, but improving management which our technocrats should engage in activities that private enterprise is engaged in and can do better. x
be able to do, given the training and the experience. x x.[56] (Emphases supplied.)

MR. OPLE. That is part of the economic viability, Madam President.


Thus, the test of economic viability clearly does not apply to public corporations
MS. QUESADA. So, is the Commissioner saying then that the Filipinos will dealing with governmental functions, to which category the BSP belongs. The
benefit more if these government-controlled corporations were given to private discussion above conveys the constitutional intent not to apply this
hands, and that there will be more goods and services that will be affordable constitutional ban on the creation of public corporations where the economic
and within the reach of the ordinary citizens? viability test would be irrelevant. The said test would only apply if the
corporation is engaged in some economic activity or business function for the
MR. OPLE. Yes. There is nothing here, Madam President, that will prevent the government.
formation of a government corporation in accordance with a special charter
given by Congress. However, we are raising the standard a little bit so that, in It is undisputed that the BSP performs functions that are impressed with public
the future, corporations established by the government will meet the test of the interest. In fact, during the consideration of the Senate Bill that eventually
became Republic Act No. 7278, which amended the BSP Charter, one of the public servants in government offices, and civic leaders in the communities all
bills sponsors, Senator Joey Lina, described the BSP as follows: over the land, and not only in our country but all over the world many if not
most of them have at one time or another been beneficiaries of the Scouting
Senator Lina. Yes, I can only think of two organizations involving the masses Movement. And so, it is along this line, Mr. Chairman, that we would like to
of our youth, Mr. President, that should be given this kind of a privilege the Boy have the early approval of this measure if only to pay back what we owe much
Scouts of the Philippines and the Girl Scouts of the Philippines. Outside of to the Scouting Movement. Now, going to the meat of the matter, Mr.
these two groups, I do not think there are other groups similarly situated. Chairman, if I may just the Scouting Movement was enacted into law in
October 31, 1936 under Commonwealth Act No. 111. x x x [W]e were
The Boy Scouts of the Philippines has a long history of providing value acknowledged as the third biggest scouting organization in the world x x x. And
formation to our young, and considering how huge the population of the young to our mind, Mr. Chairman, this erratic growth and this decrease in
people is, at this point in time, and also considering the importance of having membership [number] is because of the bad policy measures that were
an organization such as this that will inculcate moral uprightness among the enunciated with the enactment or promulgation by the President before of
young people, and further considering that the development of these young Presidential Decree No. 460 which we feel is the culprit of the ills that is
people at that tender age of seven to sixteen is vital in the development of the flagging the Boy Scout Movement today. And so, this is specifically what we
country producing good citizens, I believe that we can make an exception of are attacking, Mr. Chairman, the disenfranchisement of the National Council
the Boy Scouting movement of the Philippines from this general prohibition in the election of the national board. x x x. And so, this is what we would like
against providing tax exemption and privileges.[57] to be appraised of by the officers of the Boy [Scouts] of the Philippines whom
we are also confident, have the best interest of the Boy Scout Movement at
heart and it is in this spirit, Mr. Chairman, that we see no impediment towards
Furthermore, this Court cannot agree with the dissenting opinion which working together, the Boy Scout of the Philippines officers working together
equates the changes introduced by Republic Act No. 7278 to the BSP Charter with the House of Representatives in coming out with a measure that will put
as clear manifestation of the intent of Congress to return the BSP to the private back the vigor and enthusiasm of the Boy Scout Movement. x x x.[59]
sector. It was not the intent of Congress in enacting Republic Act No. 7278 to (Emphasis ours.)
give up all interests in this basic youth organization, which has been its partner
in forming responsible citizens for decades.
The following is another excerpt from the discussion on the House version of
In fact, as may be seen in the deliberation of the House Bills that eventually the bill, in the Committee on Government Enterprises:
resulted to Republic Act No. 7278, Congress worked closely with the BSP to
rejuvenate the organization, to bring it back to its former glory reached under HON. AQUINO: x x x Well, obviously, the two bills as well as the previous laws
its original charter, Commonwealth Act No. 111, and to correct the perceived that have created the Boy Scouts of the Philippines did not provide for any
ills introduced by the amendments to its Charter under Presidential Decree No. direct government support by way of appropriation from the national budget to
460. The BSP suffered from low morale and decrease in number because the support the activities of this organization. The point here is, and at the same
Secretaries of the different departments in government who were too busy to time they have been subjected to a governmental intervention, which to their
attend the meetings of the BSPs National Executive Board (the Board) sent mind has been inimical to the objectives and to the institution per se, that is
representatives who, as it turned out, changed from meeting to meeting. Thus, why they are seeking legislative fiat to restore back the original mandate that
the Scouting Councils established in the provinces and cities were not in touch they had under Commonwealth Act 111. Such having been the experience in
with what was happening on the national level, but they were left to implement the hands of government, meaning, there has been negative interference on
what was decided by the Board.[58] their part and inasmuch as their mandate is coming from a legislative fiat, then
shouldnt it be, this rhetorical question, shouldnt it be better for this organization
A portion of the legislators discussion is quoted below to clearly show their to seek a mandate from, lets say, the government the Corporation Code of the
intent: Philippines and register with the SEC as non-profit non-stock corporation so
that government intervention could be very very minimal. Maybe thats a
HON. DEL MAR. x x x I need not mention to you the value and the tremendous rhetorical question, they may or they may not answer, ano. I dont know what
good that the Boy Scout Movement has done not only for the youth in particular would be the benefit of a charter or a mandate being provided for by way of
but for the country in general. And that is why, if we look around, our past and legislation versus a registration with the SEC under the Corporation Code of
present national leaders, prominent men in the various fields of endeavor, the Philippines inasmuch as they dont get anything from the government
anyway insofar as direct funding. In fact, the only thing that they got from remains an agency attached to a department of the government, the DECS,
government was intervention in their affairs. Maybe we can solicit some and it was not at all stripped of its public character.
commentary comments from the resource persons. Incidentally, dont take that
as an objection, Im not objecting. Im all for the objectives of these two bills. It The ownership and control test is likewise irrelevant for a public corporation
just occurred to me that since you have had very bad experience in the hands like the BSP. To reiterate, the relationship of the BSP, an attached agency, to
of government and you will always be open to such possible intervention even the government, through the DECS, is defined in the Revised Administrative
in the future as long as you have a legislative mandate or your mandate or Code of 1987. The BSP meets the minimum statutory requirement of an
your charter coming from legislative action. attached government agency as the DECS Secretary sits at the BSP Board ex
officio, thus facilitating the policy and program coordination between the BSP
xxxx and the DECS.
Requisites for Declaration of Unconstitutionality Not Met in this Case
MR. ESCUDERO: Mr. Chairman, there may be a disadvantage if the Boy
Scouts of the Philippines will be required to register with the SEC. If we are The dissenting opinion of Justice Carpio improperly raised the issue of
registered with the SEC, there could be a danger of proliferation of scout unconstitutionality of certain provisions of the BSP Charter. Even if the parties
organization. Anybody can organize and then register with the SEC. If there were asked to Comment on the validity of the BSP charter by the Court, this
will be a proliferation of this, then the organization will lose control of the entire alone does not comply with the requisites for judicial review, which were clearly
organization. Another disadvantage, Mr. Chairman, anybody can file a set forth in a recent case:
complaint in the SEC against the Boy Scouts of the Philippines and the SEC
may suspend the operation or freeze the assets of the organization and When questions of constitutional significance are raised, the Court can
hamper the operation of the organization. I dont know, Mr. Chairman, how you exercise its power of judicial review only if the following requisites are present:
look at it but there could be a danger for anybody filing a complaint against the (1) the existence of an actual and appropriate case; (2) the existence of
organization in the SEC and the SEC might suspend the registration permit of personal and substantial interest on the part of the party raising the
the organization and we will not be able to operate. constitutional question; (3) recourse to judicial review is made at the earliest
opportunity; and (4) the constitutional question is the lis mota of the case.[61]
HON. AQUINO: Well, that I think would be a problem that will not be exclusive (Emphasis added.)
to corporations registered with the SEC because even if you are government
corporation, court action may be taken against you in other judicial bodies
because the SEC is simply another quasi-judicial body. But, I think, the first Thus, when it comes to the exercise of the power of judicial review, the
point would be very interesting, the first point that you raised. In effect, what constitutional issue should be the very lis mota, or threshold issue, of the case,
you are saying is that with the legislative mandate creating your charter, in and that it should be raised by either of the parties. These requirements would
effect, you have been given some sort of a franchise with this movement. be ignored under the dissents rather overreaching view of how this case
should have been decided. True, it was the Court that asked the parties to
MR. ESCUDERO: Yes. comment, but the Court cannot be the one to raise a constitutional issue. Thus,
HON. AQUINO: Exclusive franchise of that movement? the Court chooses to once more exhibit restraint in the exercise of its power to
MR. ESCUDERO: Yes. pass upon the validity of a law.
HON. AQUINO: Well, thats very well taken so I will proceed with other issues,
Mr. Chairman. x x x.[60] (Emphases added.) Re: the COAs Jurisdiction

Regarding the COAs jurisdiction over the BSP, Section 8 of its amended
Therefore, even though the amended BSP charter did away with most of the charter allows the BSP to receive contributions or donations from the
governmental presence in the BSP Board, this was done to more strongly government. Section 8 reads:
promote the BSPs objectives, which were not supported under Presidential Section 8. Any donation or contribution which from time to time may be made
Decree No. 460. The BSP objectives, as pointed out earlier, are consistent to the Boy Scouts of the Philippines by the Government or any of its
with the public purpose of the promotion of the well-being of the youth, the subdivisions, branches, offices, agencies or instrumentalities shall be
future leaders of the country. The amendments were not done with the view of expended by the Executive Board in pursuance of this Act.
changing the character of the BSP into a privatized corporation. The BSP
case because there is the Boy Scouts charter, this Commonwealth Act 111 as
The sources of funds to maintain the BSP were identified before the House amended by PD 463.
Committee on Government Enterprises while the bill was being deliberated,
and the pertinent portion of the discussion is quoted below: xxxx
HON. AMATONG: Mr. Chairman, in connection with that.
MR. ESCUDERO. Yes, Mr. Chairman. The question is the sources of funds of
the organization. First, Mr. Chairman, the Boy Scouts of the Philippines do not THE CHAIRMAN: Yeah, Gentleman from Zamboanga.
receive annual allotment from the government. The organization has to raise
its own funds through fund drives and fund campaigns or fund raising activities. HON. AMATONG: There is no auditing being made because theres no money
Aside from this, we have some revenue producing projects in the organization put in the organization, but how about donated funds to this organization?
that gives us funds to support the operation. x x x From time to time, Mr. What are the remedies of the donors of how will they know how their money
Chairman, when we have special activities we request for assistance or are being spent?
financial assistance from government agencies, from private business and
corporations, but this is only during special activities that the Boy Scouts of the MR. ESCUDERO: May I answer, Mr. Chairman?
Philippines would conduct during the year. Otherwise, we have to raise our
own funds to support the organization.[62] THE CHAIRMAN: Yes, gentleman.

MR. ESCUDERO: The Boy Scouts of the Philippines has an external auditor
The nature of the funds of the BSP and the COAs audit jurisdiction were and by the charter we are required to submit a financial report at the end of
likewise brought up in said congressional deliberations, to wit: each year to the National Executive Board. So all the funds donated or
otherwise is accounted for at the end of the year by our external auditor. In this
HON. AQUINO: x x x Insofar as this organization being a government created case the SGV.[63]
organization, in fact, a government corporation classified as such, are your
funds or your finances subjected to the COA audit?
Historically, therefore, the BSP had been subjected to government audit in so
MR. ESCUDERO: Mr. Chairman, we are not. Our funds is not subjected. We far as public funds had been infused thereto. However, this practice should not
dont fall under the jurisdiction of the COA. preclude the exercise of the audit jurisdiction of COA, clearly set forth under
HON. AQUINO: All right, but before were you? the Constitution, which pertinently provides:
MR. ESCUDERO: No, Mr. Chairman.
MR. JESUS: May I? As historical backgrounder, Commonwealth Act 111 was
written by then Secretary Jorge Vargas and before and up to the middle of the Section 2. (1) The Commission on Audit shall have the power, authority, and
Martial Law years, the BSP was receiving a subsidy in the form of an annual a duty to examine, audit, and settle all accounts pertaining to the revenue and
one draw from the Sweepstakes. And, this was the case also with the Girl receipts of, and expenditures or uses of funds and property, owned or held in
Scouts at the Anti-TB, but then this was and the Boy Scouts then because of trust by, or pertaining to, the Government, or any of its subdivisions, agencies,
this funding partly from government was being subjected to audit in the or instrumentalities, including government-owned and controlled corporations
contributions being made in the part of the Sweepstakes. But this was removed with original charters, and on a post-audit basis: (a) constitutional bodies,
later during the Martial Law years with the creation of the Human Settlements commissions and offices that have been granted fiscal autonomy under this
Commission. So the situation right now is that the Boy Scouts does not receive Constitution; (b) autonomous state colleges and universities; (c) other
any funding from government, but then in the case of the local councils and government-owned or controlled corporations with original charters and their
this legislative charter, so to speak, enables the local councils even the subsidiaries; and (d) such non-governmental entities receiving subsidy or
national headquarters in view of the provisions in the existing law to receive equity, directly or indirectly, from or through the Government, which are
donations from the government or any of its instrumentalities, which would be required by law of the granting institution to submit to such audit as a condition
difficult if the Boy Scouts is registered as a private corporation with the of subsidy or equity. x x x. [64]
Securities and Exchange Commission. Government bodies would be
estopped from making donations to the Boy Scouts, which at present is not the
Since the BSP, under its amended charter, continues to be a public corporation CARPIO-MORALES,
or a government instrumentality, we come to the inevitable conclusion that it is
subject to the exercise by the COA of its audit jurisdiction in the manner
consistent with the provisions of the BSP Charter. AZCUNA,

WHEREFORE, premises considered, the instant petition for prohibition is


DISMISSED. TINGA,

SO ORDERED.
CHICO-NAZARIO,
3. PSPCA v. Commission on Audit

PHILIPPINE SOCIETY FOR GARCIA,


THE PREVENTION OF VELASCO, JR.,
CRUELTY TO ANIMALS, NACHURA, and
REYES, JJ.
G.R. No. 169752 COMMISSION ON AUDIT,
Petitioners, DIR. RODULFO J. ARIESGA
(in his official capacity as Director
Members: of the Commission on Audit), MS.
MERLE M. VALENTIN and MS.
SUSAN GUARDIAN (in their official
capacities as Team Leader and Team
Member, respectively, of the audit
Team of the Commission on Audit),
PUNO, C.J.

QUISUMBING,

YNARES-SANTIAGO,

SANDOVAL-GUTIERREZ, Promulgated:
Respondents.

CARPIO, September 25, 2007


x-------------------------------------------------------
----x
AUSTRIA-MARTINEZ, DECISION

AUSTRIA-MARTINEZ, J.:
CORONA,
- versus - Before the Court is a special civil action for Certiorari and Prohibition under
Rule 65 of the Rules of Court, in relation to Section 2 of Rule 64, filed by the
petitioner assailing Office Order No. 2005-021[1] dated September 14, 2005
issued by the respondents which constituted the audit team, as well as its Subsequently, however, the power to make arrests as well as the privilege to
September 23, 2005 Letter[2] informing the petitioner that respondents audit retain a portion of the fines collected for violation of animal-related laws were
team shall conduct an audit survey on the petitioner for a detailed audit of its recalled by virtue of Commonwealth Act (C.A.) No. 148,[4] which reads, in its
accounts, operations, and financial transactions. No temporary restraining entirety, thus:
order was issued.
Be it enacted by the National Assembly of the Philippines:
The petitioner was incorporated as a juridical entity over one hundred years
ago by virtue of Act No. 1285, enacted on January 19, 1905, by the Philippine Section 1. Section four of Act Numbered Twelve hundred and eighty-five as
Commission. The petitioner, at the time it was created, was composed of amended by Act Numbered Thirty five hundred and forty-eight, is hereby
animal aficionados and animal propagandists. The objects of the petitioner, as further amended so as to read as follows:
stated in Section 2 of its charter, shall be to enforce laws relating to cruelty
inflicted upon animals or the protection of animals in the Philippine Islands, Sec. 4. The said society is authorized to appoint not to exceed ten agents in
and generally, to do and perform all things which may tend in any way to the City of Manila, and not to exceed one in each municipality of the Philippines
alleviate the suffering of animals and promote their welfare.[3] who shall have the authority to denounce to regular peace officers any violation
of the laws enacted for the prevention of cruelty to animals and the protection
At the time of the enactment of Act No. 1285, the original Corporation Law, Act of animals and to cooperate with said peace officers in the prosecution of
No. 1459, was not yet in existence. Act No. 1285 antedated both the transgressors of such laws.
Corporation Law and the constitution of the Securities and Exchange
Commission. Important to note is that the nature of the petitioner as a Sec. 2. The full amount of the fines collected for violation of the laws against
corporate entity is distinguished from the sociedad anonimas under the cruelty to animals and for the protection of animals, shall accrue to the general
Spanish Code of Commerce. fund of the Municipality where the offense was committed.

For the purpose of enhancing its powers in promoting animal welfare and Sec. 3. This Act shall take effect upon its approval.
enforcing laws for the protection of animals, the petitioner was initially imbued
under its charter with the power to apprehend violators of animal welfare laws. Approved, November 8, 1936. (Emphasis supplied)
In addition, the petitioner was to share one-half (1/2) of the fines imposed and
collected through its efforts for violations of the laws related thereto. As
originally worded, Sections 4 and 5 of Act No. 1285 provide: Immediately thereafter, then President Manuel L. Quezon issued Executive
Order (E.O.) No. 63 dated November 12, 1936, portions of which provide:
SEC. 4. The said society is authorized to appoint not to exceed five agents in
the City of Manila, and not to exceed two in each of the provinces of the Whereas, during the first regular session of the National Assembly,
Philippine Islands who shall have all the power and authority of a police officer Commonwealth Act Numbered One Hundred Forty Eight was enacted
to make arrests for violation of the laws enacted for the prevention of cruelty depriving the agents of the Society for the Prevention of Cruelty to Animals of
to animals and the protection of animals, and to serve any process in their power to arrest persons who have violated the laws prohibiting cruelty to
connection with the execution of such laws; and in addition thereto, all the animals thereby correcting a serious defect in one of the laws existing in our
police force of the Philippine Islands, wherever organized, shall, as occasion statute books.
requires, assist said society, its members or agents, in the enforcement of all
such laws. xxxx

SEC. 5. One-half of all the fines imposed and collected through the efforts of Whereas, the cruel treatment of animals is an offense against the State,
said society, its members or its agents, for violations of the laws enacted for penalized under our statutes, which the Government is duty bound to enforce;
the prevention of cruelty to animals and for their protection, shall belong to said
society and shall be used to promote its objects. Now, therefore, I, Manuel L. Quezon, President of the Philippines, pursuant to
the authority conferred upon me by the Constitution, hereby decree, order, and
(emphasis supplied) direct the Commissioner of Public Safety, the Provost Marshal General as
head of the Constabulary Division of the Philippine Army, every Mayor of a The COA General Counsel issued a Memorandum[6] dated May 6, 2004,
chartered city, and every municipal president to detail and organize special asserting that the petitioner was subject to its audit authority. In a letter dated
members of the police force, local, national, and the Constabulary to watch, May 17, 2004,[7] respondent COA informed the petitioner of the result of the
capture, and prosecute offenders against the laws enacted to prevent cruelty evaluation, furnishing it with a copy of said Memorandum dated May 6, 2004
to animals. (Emphasis supplied) of the General Counsel.

On December 1, 2003, an audit team from respondent Commission on Audit Petitioner thereafter filed with the respondent COA a Request for Re-
(COA) visited the office of the petitioner to conduct an audit survey pursuant evaluation dated May 19, 2004,[8] insisting that it was a private domestic
to COA Office Order No. 2003-051 dated November 18, 2003[5] addressed to corporation.
the petitioner. The petitioner demurred on the ground that it was a private entity
not under the jurisdiction of COA, citing Section 2(1) of Article IX of the Acting on the said request, the General Counsel of respondent COA, in a
Constitution which specifies the general jurisdiction of the COA, viz: Memorandum dated July 13, 2004,[9] affirmed her earlier opinion that the
petitioner was a government entity that was subject to the audit jurisdiction of
Section 1. General Jurisdiction. The Commission on Audit shall have the respondent COA. In a letter dated September 14, 2004, the respondent COA
power, authority, and duty to examine, audit, and settle all accounts pertaining informed the petitioner of the result of the re-evaluation, maintaining its position
to the revenue and receipts of, and expenditures or uses of funds and property, that the petitioner was subject to its audit jurisdiction, and requested an initial
owned or held in trust by, or pertaining to the Government, or any of its conference with the respondents.
subdivisions, agencies, or instrumentalities, including government-owned and
controlled corporations with original charters, and on a post-audit basis: (a) In a Memorandum dated September 16, 2004, Director Delfin Aguilar reported
constitutional bodies, commissions and officers that have been granted fiscal to COA Assistant Commissioner Juanito Espino, Corporate Government
autonomy under the Constitution; (b) autonomous state colleges and Sector, that the audit survey was not conducted due to the refusal of the
universities; (c) other government-owned or controlled corporations and their petitioner because the latter maintained that it was a private corporation.
subsidiaries; and (d) such non-governmental entities receiving subsidy or
equity, directly or indirectly, from or through the government, which are Petitioner received on September 27, 2005 the subject COA Office Order
required by law or the granting institution to submit to such audit as a condition 2005-021 dated September 14, 2005 and the COA Letter dated September
of subsidy or equity. However, where the internal control system of the audited 23, 2005.
agencies is inadequate, the Commission may adopt such measures, including
temporary or special pre-audit, as are necessary and appropriate to correct
the deficiencies. It shall keep the general accounts of the Government, and for Hence, herein Petition on the following grounds:
such period as may be provided by law, preserve the vouchers and other A.
supporting papers pertaining thereto. (Emphasis supplied)
RESPONDENT COMMISSION ON AUDIT COMMITTED GRAVE ABUSE OF
Petitioner explained thus: DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION
WHEN IT RULED THAT PETITIONER IS SUBJECT TO ITS AUDIT
a. Although the petitioner was created by special legislation, this necessarily AUTHORITY.
came about because in January 1905 there was as yet neither a Corporation
Law or any other general law under which it may be organized and B.
incorporated, nor a Securities and Exchange Commission which would have
passed upon its organization and incorporation. PETITIONER IS ENTITLED TO THE RELIEF SOUGHT, THERE BEING NO
APPEAL, NOR ANY PLAIN, SPEEDY AND ADEQUATE REMEDY IN THE
b. That Executive Order No. 63, issued during the Commonwealth period, ORDINARY COURSE OF LAW AVAILABLE TO IT.[10]
effectively deprived the petitioner of its power to make arrests, and that the The essential question before this Court is whether the petitioner qualifies as
petitioner lost its operational funding, underscore the fact that it exercises no a government agency that may be subject to audit by respondent COA.
governmental function. In fine, the government itself, by its overt acts,
confirmed petitioners status as a private juridical entity. Petitioner argues: first, even though it was created by special legislation in
1905 as there was no general law then existing under which it may be
organized or incorporated, it exercises no governmental functions because Civil Governor, whose functions have been inherited by the Office of the
these have been revoked by C.A. No. 148 and E.O. No. 63; second, nowhere President, clearly reflects the nature of the petitioner as a government
in its charter is it indicated that it is a public corporation, unlike, for instance, instrumentality; fifth, despite the passage of the Corporation Code, the law
C.A. No. 111 which created the Boy Scouts of the Philippines, defined its creating the petitioner had not been abolished, nor had it been re-incorporated
powers and purposes, and specifically stated that it was An Act to Create a under any general corporation law; and finally, sixth, Republic Act No. 8485,
Public Corporation in which, even as amended by Presidential Decree No. otherwise known as the Animal Welfare Act of 1998, designates the petitioner
460, the law still adverted to the Boy Scouts of the Philippines as a public as a member of its Committee on Animal Welfare which is attached to the
corporation, all of which are not obtaining in the charter of the petitioner; third, Department of Agriculture.
if it were a government body, there would have been no need for the State to
grant it tax exemptions under Republic Act No. 1178, and the fact that it was In view of the phrase One-half of all the fines imposed and collected through
so exempted strengthens its position that it is a private institution; fourth, the the efforts of said society, the Court, in a Resolution dated January 30, 2007,
employees of the petitioner are registered and covered by the Social Security required the Office of the Solicitor General (OSG) and the parties to comment
System at the latters initiative and not through the Government Service on: a) petitioner's authority to impose fines and the validity of the provisions of
Insurance System, which should have been the case had the employees been Act No. 1285 and Commonwealth Act No. 148 considering that there are no
considered government employees; fifth, the petitioner does not receive any standard measures provided for in the aforecited laws as to the manner of
form of financial assistance from the government, since C.A. No. 148, implementation, the specific violations of the law, the person/s authorized to
amending Section 5 of Act No. 1285, states that the full amount of the fines, impose fine and in what amount; and, b) the effect of the 1935 and 1987
collected for violation of the laws against cruelty to animals and for the Constitutions on whether petitioner continues to exist or should organize as a
protection of animals, shall accrue to the general fund of the Municipality where private corporation under the Corporation Code, B.P. Blg. 68 as amended.
the offense was committed; sixth, C.A. No. 148 effectively deprived the
petitioner of its powers to make arrests and serve processes as these functions Petitioner and the OSG filed their respective Comments. Respondents filed a
were placed in the hands of the police force; seventh, no government Manifestation stating that since they were being represented by the OSG
appointee or representative sits on the board of trustees of the petitioner; which filed its Comment, they opted to dispense with the filing of a separate
eighth, a reading of the provisions of its charter (Act No. 1285) fails to show one and adopt for the purpose that of the OSG.
that any act or decision of the petitioner is subject to the approval of or control
by any government agency, except to the extent that it is governed by the law The petitioner avers that it does not have the authority to impose fines for
on private corporations in general; and finally, ninth, the Committee on Animal violation of animal welfare laws; it only enjoyed the privilege of sharing in the
Welfare, under the Animal Welfare Act of 1998, includes members from both fines imposed and collected from its efforts in the enforcement of animal
the private and the public sectors. welfare laws; such privilege, however, was subsequently abolished by C.A.
No. 148; that it continues to exist as a private corporation since it was created
The respondents contend that since the petitioner is a body politic created by by the Philippine Commission before the effectivity of the Corporation law, Act
virtue of a special legislation and endowed with a governmental purpose, then, No. 1459; and the 1935 and 1987 Constitutions.
indubitably, the COA may audit the financial activities of the latter.
Respondents in effect divide their contentions into six strains: first, the test to The OSG submits that Act No. 1285 and its amendatory laws did not give
determine whether an entity is a government corporation lies in the manner of petitioner the authority to impose fines for violation of laws[12] relating to the
its creation, and, since the petitioner was created by virtue of a special charter, prevention of cruelty to animals and the protection of animals; that even prior
it is thus a government corporation subject to respondents auditing power; to the amendment of Act No. 1285, petitioner was only entitled to share in the
second, the petitioner exercises sovereign powers, that is, it is tasked to fines imposed; C.A. No. 148 abolished that privilege to share in the fines
enforce the laws for the protection and welfare of animals which ultimately collected; that petitioner is a public corporation and has continued to exist
redound to the public good and welfare, and, therefore, it is deemed to be a since Act No. 1285; petitioner was not repealed by the 1935 and 1987
government instrumentality as defined under the Administrative Code of 1987, Constitutions which contain transitory provisions maintaining all laws issued
the purpose of which is connected with the administration of government, as not inconsistent therewith until amended, modified or repealed.
purportedly affirmed by American jurisprudence; third, by virtue of Section
23,[11] Title II, Book III of the same Code, the Office of the President exercises The petition is impressed with merit.
supervision or control over the petitioner; fourth, under the same Code, the
requirement under its special charter for the petitioner to render a report to the
The arguments of the parties, interlaced as they are, can be disposed of in five And since the underpinnings of the charter test had been introduced by the
points. 1935 Constitution and not earlier, it follows that the test cannot apply to the
petitioner, which was incorporated by virtue of Act No. 1285, enacted on
First, the Court agrees with the petitioner that the charter test cannot be January 19, 1905. Settled is the rule that laws in general have no retroactive
applied. effect, unless the contrary is provided.[16] All statutes are to be construed as
having only a prospective operation, unless the purpose and intention of the
Essentially, the charter test as it stands today provides: legislature to give them a retrospective effect is expressly declared or is
necessarily implied from the language used. In case of doubt, the doubt must
[T]he test to determine whether a corporation is government owned or be resolved against the retrospective effect.[17]
controlled, or private in nature is simple. Is it created by its own charter for the
exercise of a public function, or by incorporation under the general corporation There are a few exceptions. Statutes can be given retroactive effect in the
law? Those with special charters are government corporations subject to its following cases: (1) when the law itself so expressly provides; (2) in case of
provisions, and its employees are under the jurisdiction of the Civil Service remedial statutes; (3) in case of curative statutes; (4) in case of laws
Commission, and are compulsory members of the Government Service interpreting others; and (5) in case of laws creating new rights.[18] None of the
Insurance System. xxx (Emphasis supplied)[13] exceptions is present in the instant case.

The petitioner is correct in stating that the charter test is predicated, at best, The general principle of prospectivity of the law likewise applies to Act No.
on the legal regime established by the 1935 Constitution, Section 7, Article 1459, otherwise known as the Corporation Law, which had been enacted by
XIII, which states: virtue of the plenary powers of the Philippine Commission on March 1, 1906,
a little over a year after January 19, 1905, the time the petitioner emerged as
Sec. 7. The National Assembly shall not, except by general law, provide for a juridical entity. Even the Corporation Law respects the rights and powers of
the formation, organization, or regulation of private corporations, unless such juridical entities organized beforehand, viz:
corporations are owned or controlled by the Government or any subdivision or
instrumentality thereof.[14] SEC. 75. Any corporation or sociedad anonima formed, organized, and
existing under the laws of the Philippine Islands and lawfully transacting
The foregoing proscription has been carried over to the 1973 and the 1987 business in the Philippine Islands on the date of the passage of this Act, shall
Constitutions. Section 16 of Article XII of the present Constitution provides: be subject to the provisions hereof so far as such provisions may be applicable
and shall be entitled at its option either to continue business as such
Sec. 16. The Congress shall not, except by general law, provide for the corporation or to reform and organize under and by virtue of the provisions of
formation, organization, or regulation of private corporations. Government- this Act, transferring all corporate interests to the new corporation which, if a
owned or controlled corporations may be created or established by special stock corporation, is authorized to issue its shares of stock at par to the
charters in the interest of the common good and subject to the test of economic stockholders or members of the old corporation according to their interests.
viability. (Emphasis supplied).

Section 16 is essentially a re-enactment of Section 7 of Article XVI of the 1935 As pointed out by the OSG, both the 1935 and 1987 Constitutions contain
Constitution and Section 4 of Article XIV of the 1973 Constitution. transitory provisions maintaining all laws issued not inconsistent therewith until
amended, modified or repealed.[19]
During the formulation of the 1935 Constitution, the Committee on Franchises In a legal regime where the charter test doctrine cannot be applied, the mere
recommended the foregoing proscription to prevent the pressure of special fact that a corporation has been created by virtue of a special law does not
interests upon the lawmaking body in the creation of corporations or in the necessarily qualify it as a public corporation.
regulation of the same. To permit the lawmaking body by special law to provide
for the organization, formation, or regulation of private corporations would be What then is the nature of the petitioner as a corporate entity? What legal
in effect to offer to it the temptation in many cases to favor certain groups, to regime governs its rights, powers, and duties?
the prejudice of others or to the prejudice of the interests of the country.[15]
As stated, at the time the petitioner was formed, the applicable law was the act, and their successors, are hereby constituted and created a body politic
Philippine Bill of 1902, and, emphatically, as also stated above, no proscription and corporate at law, under the name and style of The Philippines Society for
similar to the charter test can be found therein. the Prevention of Cruelty to Animals.

The textual foundation of the charter test, which placed a limitation on the As incorporated by this Act, said society shall have the power to add to its
power of the legislature, first appeared in the 1935 Constitution. However, the organization such and as many members as it desires, to provide for and
petitioner was incorporated in 1905 by virtue of Act No. 1258, a law antedating choose such officers as it may deem advisable, and in such manner as it may
the Corporation Law (Act No. 1459) by a year, and the 1935 Constitution, by wish, and to remove members as it shall provide.
thirty years. There being neither a general law on the formation and
organization of private corporations nor a restriction on the legislature to create It shall have the right to sue and be sued, to use a common seal, to receive
private corporations by direct legislation, the Philippine Commission at that legacies and donations, to conduct social enterprises for the purpose of
moment in history was well within its powers in 1905 to constitute the petitioner obtaining funds, to levy dues upon its members and provide for their collection
as a private juridical entity. to hold real and personal estate such as may be necessary for the
accomplishment of the purposes of the society, and to adopt such by-laws for
Time and again the Court must caution even the most brilliant scholars of the its government as may not be inconsistent with law or this charter.
law and all constitutional historians on the danger of imposing legal concepts
of a later date on facts of an earlier date.[20] xxxx

The amendments introduced by C.A. No. 148 made it clear that the petitioner Sec. 3. The said society shall be operated under the direction of its officers, in
was a private corporation and not an agency of the government. This was accordance with its by-laws in force, and this charter.
evident in Executive Order No. 63, issued by then President of the Philippines
Manuel L. Quezon, declaring that the revocation of the powers of the petitioner xxxx
to appoint agents with powers of arrest corrected a serious defect in one of the
laws existing in the statute books. Sec. 6. The principal office of the society shall be kept in the city of Manila,
and the society shall have full power to locate and establish branch offices of
As a curative statute, and based on the doctrines so far discussed, C.A. No. the society wherever it may deem advisable in the Philippine Islands, such
148 has to be given retroactive effect, thereby freeing all doubt as to which branch offices to be under the supervision and control of the principal office.
class of corporations the petitioner belongs, that is, it is a quasi-public
corporation, a kind of private domestic corporation, which the Court will further Third. The employees of the petitioner are registered and covered by the
elaborate on under the fourth point. Social Security System at the latters initiative, and not through the Government
Service Insurance System, which should be the case if the employees are
Second, a reading of petitioners charter shows that it is not subject to control considered government employees. This is another indication of petitioners
or supervision by any agency of the State, unlike government-owned and - nature as a private entity. Section 1 of Republic Act No. 1161, as amended by
controlled corporations. No government representative sits on the board of Republic Act No. 8282, otherwise known as the Social Security Act of 1997,
trustees of the petitioner. Like all private corporations, the successors of its defines the employer:
members are determined voluntarily and solely by the petitioner in accordance
with its by-laws, and may exercise those powers generally accorded to private Employer Any person, natural or juridical, domestic or foreign, who carries on
corporations, such as the powers to hold property, to sue and be sued, to use in the Philippines any trade, business, industry, undertaking or activity of any
a common seal, and so forth. It may adopt by-laws for its internal operations: kind and uses the services of another person who is under his orders as
the petitioner shall be managed or operated by its officers in accordance with regards the employment, except the Government and any of its political
its by-laws in force. The pertinent provisions of the charter provide: subdivisions, branches or instrumentalities, including corporations owned or
controlled by the Government: Provided, That a self-employed person shall be
Section 1. Anna L. Ide, Kate S. Wright, John L. Chamberlain, William F. both employee and employer at the same time. (Emphasis supplied)
Tucker, Mary S. Fergusson, Amasa S. Crossfield, Spencer Cosby, Sealy B.
Rossiter, Richard P. Strong, Jose Robles Lahesa, Josefina R. de Luzuriaga,
and such other persons as may be associated with them in conformity with this
Fourth. The respondents contend that the petitioner is a body politic because Fifth. The respondents argue that since the charter of the petitioner requires
its primary purpose is to secure the protection and welfare of animals which, the latter to render periodic reports to the Civil Governor, whose functions have
in turn, redounds to the public good. been inherited by the President, the petitioner is, therefore, a government
instrumentality.
This argument, is, at best, specious. The fact that a certain juridical entity is
impressed with public interest does not, by that circumstance alone, make the This contention is inconclusive. By virtue of the fiction that all corporations owe
entity a public corporation, inasmuch as a corporation may be private although their very existence and powers to the State, the reportorial requirement is
its charter contains provisions of a public character, incorporated solely for the applicable to all corporations of whatever nature, whether they are public,
public good. This class of corporations may be considered quasi-public quasi-public, or private corporationsas creatures of the State, there is a
corporations, which are private corporations that render public service, supply reserved right in the legislature to investigate the activities of a corporation to
public wants,[21] or pursue other eleemosynary objectives. While purposely determine whether it acted within its powers. In other words, the reportorial
organized for the gain or benefit of its members, they are required by law to requirement is the principal means by which the State may see to it that its
discharge functions for the public benefit. Examples of these corporations are creature acted according to the powers and functions conferred upon it. These
utility,[22] railroad, warehouse, telegraph, telephone, water supply principles were extensively discussed in Bataan Shipyard & Engineering Co.,
corporations and transportation companies.[23] It must be stressed that a Inc. v. Presidential Commission on Good Government.[26] Here, the Court, in
quasi-public corporation is a species of private corporations, but the qualifying holding that the subject corporation could not invoke the right against self-
factor is the type of service the former renders to the public: if it performs a incrimination whenever the State demanded the production of its corporate
public service, then it becomes a quasi-public corporation.[24] books and papers, extensively discussed the purpose of reportorial
requirements, viz:

Authorities are of the view that the purpose alone of the corporation cannot be x x x The corporation is a creature of the state. It is presumed to be
taken as a safe guide, for the fact is that almost all corporations are nowadays incorporated for the benefit of the public. It received certain special privileges
created to promote the interest, good, or convenience of the public. A bank, and franchises, and holds them subject to the laws of the state and the
for example, is a private corporation; yet, it is created for a public benefit. limitations of its charter. Its powers are limited by law. It can make no contract
Private schools and universities are likewise private corporations; and yet, they not authorized by its charter. Its rights to act as a corporation are only
are rendering public service. Private hospitals and wards are charged with preserved to it so long as it obeys the laws of its creation. There is a reserve[d]
heavy social responsibilities. More so with all common carriers. On the other right in the legislature to investigate its contracts and find out whether it has
hand, there may exist a public corporation even if it is endowed with gifts or exceeded its powers. It would be a strange anomaly to hold that a state, having
donations from private individuals. chartered a corporation to make use of certain franchises, could not, in the
exercise of sovereignty, inquire how these franchises had been employed, and
whether they had been abused, and demand the production of the corporate
books and papers for that purpose. The defense amounts to this, that an officer
The true criterion, therefore, to determine whether a corporation is public or of the corporation which is charged with a criminal violation of the statute may
private is found in the totality of the relation of the corporation to the State. If plead the criminality of such corporation as a refusal to produce its books. To
the corporation is created by the State as the latters own agency or state this proposition is to answer it. While an individual may lawfully refuse to
instrumentality to help it in carrying out its governmental functions, then that answer incriminating questions unless protected by an immunity statute, it
corporation is considered public; otherwise, it is private. Applying the above does not follow that a corporation vested with special privileges and franchises
test, provinces, chartered cities, and barangays can best exemplify public may refuse to show its hand when charged with an abuse of such privileges.
corporations. They are created by the State as its own device and agency for (Wilson v. United States, 55 Law Ed., 771, 780.)[27]
the accomplishment of parts of its own public works.[25]
WHEREFORE, the petition is GRANTED. Petitioner is DECLARED a private
domestic corporation subject to the jurisdiction of the Securities and Exchange
It is clear that the amendments introduced by C.A. No. 148 revoked the powers Commission. The respondents are ENJOINED from investigating, examining
of the petitioner to arrest offenders of animal welfare laws and the power to and auditing the petitioner's fiscal and financial affairs.
serve processes in connection therewith.
SO ORDERED.
4. North Cotabato v. Govt of the PH Peace Panel
x--------------------------------------------x
G.R. No. 183591 October 14, 2008
G.R. No. 183951 October 14, 2008
THE PROVINCE OF NORTH COTABATO, duly represented by GOVERNOR
JESUS SACDALAN and/or VICE-GOVERNOR EMMANUEL PIOL, for and THE PROVINCIAL GOVERNMENT OF ZAMBOANGA DEL NORTE, as
in his own behalf, petitioners, represented by HON. ROLANDO E. YEBES, in his capacity as Provincial
vs. Governor, HON. FRANCIS H. OLVIS, in his capacity as Vice-Governor and
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE Presiding Officer of the Sangguniang Panlalawigan, HON. CECILIA
PANEL ON ANCESTRAL DOMAIN (GRP), represented by SEC. RODOLFO JALOSJOS CARREON, Congresswoman, 1st Congressional District, HON.
GARCIA, ATTY. LEAH ARMAMENTO, ATTY. SEDFREY CANDELARIA, CESAR G. JALOSJOS, Congressman, 3rd Congressional District, and
MARK RYAN SULLIVAN and/or GEN. HERMOGENES ESPERON, JR., the Members of the Sangguniang Panlalawigan of the Province of Zamboanga del
latter in his capacity as the present and duly-appointed Presidential Adviser on Norte, namely, HON. SETH FREDERICK P. JALOSJOS, HON. FERNANDO
the Peace Process (OPAPP) or the so-called Office of the Presidential Adviser R. CABIGON, JR., HON. ULDARICO M. MEJORADA II, HON. EDIONAR M.
on the Peace Process, respondents. ZAMORAS, HON. EDGAR J. BAGUIO, HON. CEDRIC L. ADRIATICO, HON.
FELIXBERTO C. BOLANDO, HON. JOSEPH BRENDO C. AJERO, HON.
x--------------------------------------------x NORBIDEIRI B. EDDING, HON. ANECITO S. DARUNDAY, HON. ANGELICA
J. CARREON and HON. LUZVIMINDA E. TORRINO, petitioners,
G.R. No. 183752 October 14, 2008 vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE
CITY GOVERNMENT OF ZAMBOANGA, as represented by HON. CELSO L. NEGOTIATING PANEL [GRP], as represented by HON. RODOLFO C.
LOBREGAT, City Mayor of Zamboanga, and in his personal capacity as GARCIA and HON. HERMOGENES ESPERON, in his capacity as the
resident of the City of Zamboanga, Rep. MA. ISABELLE G. CLIMACO, District Presidential Adviser of Peace Process, respondents.
1, and Rep. ERICO BASILIO A. FABIAN, District 2, City of Zamboanga,
petitioners, x--------------------------------------------x
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE G.R. No. 183962 October 14, 2008
NEGOTIATING PANEL (GRP), as represented by RODOLFO C. GARCIA,
LEAH ARMAMENTO, SEDFREY CANDELARIA, MARK RYAN SULLIVAN ERNESTO M. MACEDA, JEJOMAR C. BINAY, and AQUILINO L. PIMENTEL
and HERMOGENES ESPERON, in his capacity as the Presidential Adviser on III, petitioners,
Peace Process, respondents. vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE
x--------------------------------------------x NEGOTIATING PANEL, represented by its Chairman RODOLFO C. GARCIA,
and the MORO ISLAMIC LIBERATION FRONT PEACE NEGOTIATING
G.R. No. 183893 October 14, 2008 PANEL, represented by its Chairman MOHAGHER IQBAL, respondents.

THE CITY OF ILIGAN, duly represented by CITY MAYOR LAWRENCE x--------------------------------------------x


LLUCH CRUZ, petitioner,
vs. FRANKLIN M. DRILON and ADEL ABBAS TAMANO, petitioners-in-
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE intervention.
PANEL ON ANCESTRAL DOMAIN (GRP), represented by SEC. RODOLFO
GARCIA, ATTY. LEAH ARMAMENTO, ATTY. SEDFREY CANDELARIA, x--------------------------------------------x
MARK RYAN SULLIVAN; GEN. HERMOGENES ESPERON, JR., in his
capacity as the present and duly appointed Presidential Adviser on the Peace SEN. MANUEL A. ROXAS, petitioners-in-intervention.
Process; and/or SEC. EDUARDO ERMITA, in his capacity as Executive
Secretary. respondents. x--------------------------------------------x
Subject of these consolidated cases is the extent of the powers of the
MUNICIPALITY OF LINAMON duly represented by its Municipal Mayor NOEL President in pursuing the peace process. While the facts surrounding this
N. DEANO, petitioners-in-intervention, controversy center on the armed conflict in Mindanao between the government
and the Moro Islamic Liberation Front (MILF), the legal issue involved has a
x--------------------------------------------x bearing on all areas in the country where there has been a long-standing
armed conflict. Yet again, the Court is tasked to perform a delicate balancing
THE CITY OF ISABELA, BASILAN PROVINCE, represented by MAYOR act. It must uncompromisingly delineate the bounds within which the President
CHERRYLYN P. SANTOS-AKBAR, petitioners-in-intervention. may lawfully exercise her discretion, but it must do so in strict adherence to
the Constitution, lest its ruling unduly restricts the freedom of action vested by
x--------------------------------------------x that same Constitution in the Chief Executive precisely to enable her to pursue
the peace process effectively.
THE PROVINCE OF SULTAN KUDARAT, rep. by HON. SUHARTO T.
MANGUDADATU, in his capacity as Provincial Governor and a resident of the I. FACTUAL ANTECEDENTS OF THE PETITIONS
Province of Sultan Kudarat, petitioner-in-intervention.
On August 5, 2008, the Government of the Republic of the Philippines (GRP)
x-------------------------------------------x and the MILF, through the Chairpersons of their respective peace negotiating
panels, were scheduled to sign a Memorandum of Agreement on the Ancestral
RUY ELIAS LOPEZ, for and in his own behalf and on behalf of Indigenous Domain (MOA-AD) Aspect of the GRP-MILF Tripoli Agreement on Peace of
Peoples in Mindanao Not Belonging to the MILF, petitioner-in-intervention. 2001 in Kuala Lumpur, Malaysia.

x--------------------------------------------x The MILF is a rebel group which was established in March 1984 when, under
the leadership of the late Salamat Hashim, it splintered from the Moro National
CARLO B. GOMEZ, GERARDO S. DILIG, NESARIO G. AWAT, JOSELITO C. Liberation Front (MNLF) then headed by Nur Misuari, on the ground, among
ALISUAG and RICHALEX G. JAGMIS, as citizens and residents of Palawan, others, of what Salamat perceived to be the manipulation of the MNLF away
petitioners-in-intervention. from an Islamic basis towards Marxist-Maoist orientations.1

x--------------------------------------------x The signing of the MOA-AD between the GRP and the MILF was not to
materialize, however, for upon motion of petitioners, specifically those who
MARINO RIDAO and KISIN BUXANI, petitioners-in-intervention. filed their cases before the scheduled signing of the MOA-AD, this Court
issued a Temporary Restraining Order enjoining the GRP from signing the
x--------------------------------------------x same.

MUSLIM LEGAL ASSISTANCE FOUNDATION, INC (MUSLAF), respondent- The MOA-AD was preceded by a long process of negotiation and the
in-intervention. concluding of several prior agreements between the two parties beginning in
1996, when the GRP-MILF peace negotiations began. On July 18, 1997, the
x--------------------------------------------x GRP and MILF Peace Panels signed the Agreement on General Cessation of
Hostilities. The following year, they signed the General Framework of
MUSLIM MULTI-SECTORAL MOVEMENT FOR PEACE & DEVELOPMENT Agreement of Intent on August 27, 1998.
(MMMPD), respondent-in-intervention.
The Solicitor General, who represents respondents, summarizes the MOA-AD
x--------------------------------------------x by stating that the same contained, among others, the commitment of the
parties to pursue peace negotiations, protect and respect human rights,
DECISION negotiate with sincerity in the resolution and pacific settlement of the conflict,
and refrain from the use of threat or force to attain undue advantage while the
CARPIO MORALES, J.: peace negotiations on the substantive agenda are on-going.2
Early on, however, it was evident that there was not going to be any smooth In 2005, several exploratory talks were held between the parties in Kuala
sailing in the GRP-MILF peace process. Towards the end of 1999 up to early Lumpur, eventually leading to the crafting of the draft MOA-AD in its final form,
2000, the MILF attacked a number of municipalities in Central Mindanao and, which, as mentioned, was set to be signed last August 5, 2008.
in March 2000, it took control of the town hall of Kauswagan, Lanao del Norte.3
In response, then President Joseph Estrada declared and carried out an "all- II. STATEMENT OF THE PROCEEDINGS
out-war" against the MILF.
Before the Court is what is perhaps the most contentious "consensus" ever
When President Gloria Macapagal-Arroyo assumed office, the military embodied in an instrument - the MOA-AD which is assailed principally by the
offensive against the MILF was suspended and the government sought a present petitions bearing docket numbers 183591, 183752, 183893, 183951
resumption of the peace talks. The MILF, according to a leading MILF member, and 183962.
initially responded with deep reservation, but when President Arroyo asked the
Government of Malaysia through Prime Minister Mahathir Mohammad to help Commonly impleaded as respondents are the GRP Peace Panel on Ancestral
convince the MILF to return to the negotiating table, the MILF convened its Domain7 and the Presidential Adviser on the Peace Process (PAPP)
Central Committee to seriously discuss the matter and, eventually, decided to Hermogenes Esperon, Jr.
meet with the GRP.4
On July 23, 2008, the Province of North Cotabato8 and Vice-Governor
The parties met in Kuala Lumpur on March 24, 2001, with the talks being Emmanuel Piol filed a petition, docketed as G.R. No. 183591, for Mandamus
facilitated by the Malaysian government, the parties signing on the same date and Prohibition with Prayer for the Issuance of Writ of Preliminary Injunction
the Agreement on the General Framework for the Resumption of Peace Talks and Temporary Restraining Order.9 Invoking the right to information on
Between the GRP and the MILF. The MILF thereafter suspended all its military matters of public concern, petitioners seek to compel respondents to disclose
actions.5 and furnish them the complete and official copies of the MOA-AD including its
attachments, and to prohibit the slated signing of the MOA-AD, pending the
Formal peace talks between the parties were held in Tripoli, Libya from June disclosure of the contents of the MOA-AD and the holding of a public
20-22, 2001, the outcome of which was the GRP-MILF Tripoli Agreement on consultation thereon. Supplementarily, petitioners pray that the MOA-AD be
Peace (Tripoli Agreement 2001) containing the basic principles and agenda declared unconstitutional.10
on the following aspects of the negotiation: Security Aspect, Rehabilitation
Aspect, and Ancestral Domain Aspect. With regard to the Ancestral Domain This initial petition was followed by another one, docketed as G.R. No. 183752,
Aspect, the parties in Tripoli Agreement 2001 simply agreed "that the same be also for Mandamus and Prohibition11 filed by the City of Zamboanga,12 Mayor
discussed further by the Parties in their next meeting." Celso Lobregat, Rep. Ma. Isabelle Climaco and Rep. Erico Basilio Fabian who
likewise pray for similar injunctive reliefs. Petitioners herein moreover pray that
A second round of peace talks was held in Cyberjaya, Malaysia on August 5- the City of Zamboanga be excluded from the Bangsamoro Homeland and/or
7, 2001 which ended with the signing of the Implementing Guidelines on the Bangsamoro Juridical Entity and, in the alternative, that the MOA-AD be
Security Aspect of the Tripoli Agreement 2001 leading to a ceasefire status declared null and void.
between the parties. This was followed by the Implementing Guidelines on the
Humanitarian Rehabilitation and Development Aspects of the Tripoli By Resolution of August 4, 2008, the Court issued a Temporary Restraining
Agreement 2001, which was signed on May 7, 2002 at Putrajaya, Malaysia. Order commanding and directing public respondents and their agents to cease
Nonetheless, there were many incidence of violence between government and desist from formally signing the MOA-AD.13 The Court also required the
forces and the MILF from 2002 to 2003. Solicitor General to submit to the Court and petitioners the official copy of the
final draft of the MOA-AD,14 to which she complied.15
Meanwhile, then MILF Chairman Salamat Hashim passed away on July 13,
2003 and he was replaced by Al Haj Murad, who was then the chief peace Meanwhile, the City of Iligan16 filed a petition for Injunction and/or Declaratory
negotiator of the MILF. Murad's position as chief peace negotiator was taken Relief, docketed as G.R. No. 183893, praying that respondents be enjoined
over by Mohagher Iqbal.6 from signing the MOA-AD or, if the same had already been signed, from
implementing the same, and that the MOA-AD be declared unconstitutional.
Petitioners herein additionally implead Executive Secretary Eduardo Ermita as
respondent.
(i) insofar as the mandamus aspect is concerned, in view of the disclosure of
The Province of Zamboanga del Norte,17 Governor Rolando Yebes, Vice- official copies of the final draft of the Memorandum of Agreement (MOA); and
Governor Francis Olvis, Rep. Cecilia Jalosjos-Carreon, Rep. Cesar Jalosjos,
and the members18 of the Sangguniang Panlalawigan of Zamboanga del (ii) insofar as the prohibition aspect involving the Local Government Units is
Norte filed on August 15, 2008 a petition for Certiorari, Mandamus and concerned, if it is considered that consultation has become fait accompli with
Prohibition,19 docketed as G.R. No. 183951. They pray, inter alia, that the the finalization of the draft;
MOA-AD be declared null and void and without operative effect, and that
respondents be enjoined from executing the MOA-AD. 2. Whether the constitutionality and the legality of the MOA is ripe for
adjudication;
On August 19, 2008, Ernesto Maceda, Jejomar Binay, and Aquilino Pimentel
III filed a petition for Prohibition,20 docketed as G.R. No. 183962, praying for 3. Whether respondent Government of the Republic of the Philippines Peace
a judgment prohibiting and permanently enjoining respondents from formally Panel committed grave abuse of discretion amounting to lack or excess of
signing and executing the MOA-AD and or any other agreement derived jurisdiction when it negotiated and initiated the MOA vis--vis ISSUES Nos. 4
therefrom or similar thereto, and nullifying the MOA-AD for being and 5;
unconstitutional and illegal. Petitioners herein additionally implead as
respondent the MILF Peace Negotiating Panel represented by its Chairman 4. Whether there is a violation of the people's right to information on matters
Mohagher Iqbal. of public concern (1987 Constitution, Article III, Sec. 7) under a state policy of
full disclosure of all its transactions involving public interest (1987 Constitution,
Various parties moved to intervene and were granted leave of court to file their Article II, Sec. 28) including public consultation under Republic Act No. 7160
petitions-/comments-in-intervention. Petitioners-in-Intervention include (LOCAL GOVERNMENT CODE OF 1991)[;]
Senator Manuel A. Roxas, former Senate President Franklin Drilon and Atty.
Adel Tamano, the City of Isabela21 and Mayor Cherrylyn Santos-Akbar, the If it is in the affirmative, whether prohibition under Rule 65 of the 1997 Rules
Province of Sultan Kudarat22 and Gov. Suharto Mangudadatu, the of Civil Procedure is an appropriate remedy;
Municipality of Linamon in Lanao del Norte,23 Ruy Elias Lopez of Davao City
and of the Bagobo tribe, Sangguniang Panlungsod member Marino Ridao and 5. Whether by signing the MOA, the Government of the Republic of the
businessman Kisin Buxani, both of Cotabato City; and lawyers Carlo Gomez, Philippines would be BINDING itself
Gerardo Dilig, Nesario Awat, Joselito Alisuag, Richalex Jagmis, all of Palawan
City. The Muslim Legal Assistance Foundation, Inc. (Muslaf) and the Muslim a) to create and recognize the Bangsamoro Juridical Entity (BJE) as a
Multi-Sectoral Movement for Peace and Development (MMMPD) filed their separate state, or a juridical, territorial or political subdivision not recognized
respective Comments-in-Intervention. by law;

By subsequent Resolutions, the Court ordered the consolidation of the b) to revise or amend the Constitution and existing laws to conform to the MOA;
petitions. Respondents filed Comments on the petitions, while some of
petitioners submitted their respective Replies. c) to concede to or recognize the claim of the Moro Islamic Liberation Front for
ancestral domain in violation of Republic Act No. 8371 (THE INDIGENOUS
Respondents, by Manifestation and Motion of August 19, 2008, stated that the PEOPLES RIGHTS ACT OF 1997), particularly Section 3(g) & Chapter VII
Executive Department shall thoroughly review the MOA-AD and pursue further (DELINEATION, RECOGNITION OF ANCESTRAL DOMAINS)[;]
negotiations to address the issues hurled against it, and thus moved to dismiss
the cases. In the succeeding exchange of pleadings, respondents' motion was If in the affirmative, whether the Executive Branch has the authority to so bind
met with vigorous opposition from petitioners. the Government of the Republic of the Philippines;

The cases were heard on oral argument on August 15, 22 and 29, 2008 that 6. Whether the inclusion/exclusion of the Province of North Cotabato, Cities of
tackled the following principal issues: Zamboanga, Iligan and Isabela, and the Municipality of Linamon, Lanao del
Norte in/from the areas covered by the projected Bangsamoro Homeland is a
1. Whether the petitions have become moot and academic justiciable question; and
7. Whether desistance from signing the MOA derogates any prior valid drawn up to describe novel ways of perceiving non-Muslim territories. For
commitments of the Government of the Republic of the Philippines.24 instance, areas like dar-ul-mua'hada (land of compact) and dar-ul-sulh (land
of treaty) referred to countries which, though under a secular regime,
The Court, thereafter, ordered the parties to submit their respective maintained peaceful and cooperative relations with Muslim States, having
Memoranda. Most of the parties submitted their memoranda on time. been bound to each other by treaty or agreement. Dar-ul-aman (land of order),
on the other hand, referred to countries which, though not bound by treaty with
III. OVERVIEW OF THE MOA-AD Muslim States, maintained freedom of religion for Muslims.28

As a necessary backdrop to the consideration of the objections raised in the It thus appears that the "compact rights entrenchment" emanating from the
subject five petitions and six petitions-in-intervention against the MOA-AD, as regime of dar-ul-mua'hada and dar-ul-sulh simply refers to all other
well as the two comments-in-intervention in favor of the MOA-AD, the Court agreements between the MILF and the Philippine government - the Philippines
takes an overview of the MOA. being the land of compact and peace agreement - that partake of the nature
of a treaty device, "treaty" being broadly defined as "any solemn agreement in
The MOA-AD identifies the Parties to it as the GRP and the MILF. writing that sets out understandings, obligations, and benefits for both parties
which provides for a framework that elaborates the principles declared in the
Under the heading "Terms of Reference" (TOR), the MOA-AD includes not [MOA-AD]."29
only four earlier agreements between the GRP and MILF, but also two
agreements between the GRP and the MNLF: the 1976 Tripoli Agreement, and The MOA-AD states that the Parties "HAVE AGREED AND
the Final Peace Agreement on the Implementation of the 1976 Tripoli ACKNOWLEDGED AS FOLLOWS," and starts with its main body.
Agreement, signed on September 2, 1996 during the administration of
President Fidel Ramos. The main body of the MOA-AD is divided into four strands, namely, Concepts
and Principles, Territory, Resources, and Governance.
The MOA-AD also identifies as TOR two local statutes - the organic act for the
Autonomous Region in Muslim Mindanao (ARMM)25 and the Indigenous A. CONCEPTS AND PRINCIPLES
Peoples Rights Act (IPRA),26 and several international law instruments - the
ILO Convention No. 169 Concerning Indigenous and Tribal Peoples in This strand begins with the statement that it is "the birthright of all Moros and
Independent Countries in relation to the UN Declaration on the Rights of the all Indigenous peoples of Mindanao to identify themselves and be accepted as
Indigenous Peoples, and the UN Charter, among others. Bangsamoros.'" It defines "Bangsamoro people" as the natives or original
inhabitants of Mindanao and its adjacent islands including Palawan and the
The MOA-AD includes as a final TOR the generic category of "compact rights Sulu archipelago at the time of conquest or colonization, and their descendants
entrenchment emanating from the regime of dar-ul-mua'hada (or territory whether mixed or of full blood, including their spouses.30
under compact) and dar-ul-sulh (or territory under peace agreement) that
partakes the nature of a treaty device." Thus, the concept of "Bangsamoro," as defined in this strand of the MOA-AD,
includes not only "Moros" as traditionally understood even by Muslims,31 but
During the height of the Muslim Empire, early Muslim jurists tended to see the all indigenous peoples of Mindanao and its adjacent islands. The MOA-AD
world through a simple dichotomy: there was the dar-ul-Islam (the Abode of adds that the freedom of choice of indigenous peoples shall be respected.
Islam) and dar-ul-harb (the Abode of War). The first referred to those lands What this freedom of choice consists in has not been specifically defined.
where Islamic laws held sway, while the second denoted those lands where
Muslims were persecuted or where Muslim laws were outlawed or The MOA-AD proceeds to refer to the "Bangsamoro homeland," the ownership
ineffective.27 This way of viewing the world, however, became more complex of which is vested exclusively in the Bangsamoro people by virtue of their prior
through the centuries as the Islamic world became part of the international rights of occupation.32 Both parties to the MOA-AD acknowledge that
community of nations. ancestral domain does not form part of the public domain.33

As Muslim States entered into treaties with their neighbors, even with distant The Bangsamoro people are acknowledged as having the right to self-
States and inter-governmental organizations, the classical division of the world governance, which right is said to be rooted on ancestral territoriality exercised
into dar-ul-Islam and dar-ul-harb eventually lost its meaning. New terms were originally under the suzerain authority of their sultanates and the Pat a
Pangampong ku Ranaw. The sultanates were described as states or Areas," on the other hand, are to be subjected to a plebiscite twenty-five (25)
"karajaan/kadatuan" resembling a body politic endowed with all the elements years from the signing of a separate agreement - the Comprehensive
of a nation-state in the modern sense.34 Compact.41

The MOA-AD thus grounds the right to self-governance of the Bangsamoro The Parties to the MOA-AD stipulate that the BJE shall have jurisdiction over
people on the past suzerain authority of the sultanates. As gathered, the all natural resources within its "internal waters," defined as extending fifteen
territory defined as the Bangsamoro homeland was ruled by several sultanates (15) kilometers from the coastline of the BJE area;42 that the BJE shall also
and, specifically in the case of the Maranao, by the Pat a Pangampong ku have "territorial waters," which shall stretch beyond the BJE internal waters up
Ranaw, a confederation of independent principalities (pangampong) each to the baselines of the Republic of the Philippines (RP) south east and south
ruled by datus and sultans, none of whom was supreme over the others.35 west of mainland Mindanao; and that within these territorial waters, the BJE
and the "Central Government" (used interchangeably with RP) shall exercise
The MOA-AD goes on to describe the Bangsamoro people as "the First Nation' joint jurisdiction, authority and management over all natural resources.43
with defined territory and with a system of government having entered into Notably, the jurisdiction over the internal waters is not similarly described as
treaties of amity and commerce with foreign nations." "joint."

The term "First Nation" is of Canadian origin referring to the indigenous The MOA-AD further provides for the sharing of minerals on the territorial
peoples of that territory, particularly those known as Indians. In Canada, each waters between the Central Government and the BJE, in favor of the latter,
of these indigenous peoples is equally entitled to be called "First Nation," through production sharing and economic cooperation agreement.44 The
hence, all of them are usually described collectively by the plural "First activities which the Parties are allowed to conduct on the territorial waters are
Nations."36 To that extent, the MOA-AD, by identifying the Bangsamoro enumerated, among which are the exploration and utilization of natural
people as "the First Nation" - suggesting its exclusive entitlement to that resources, regulation of shipping and fishing activities, and the enforcement of
designation - departs from the Canadian usage of the term. police and safety measures.45 There is no similar provision on the sharing of
minerals and allowed activities with respect to the internal waters of the BJE.
The MOA-AD then mentions for the first time the "Bangsamoro Juridical Entity"
(BJE) to which it grants the authority and jurisdiction over the Ancestral C. RESOURCES
Domain and Ancestral Lands of the Bangsamoro.37
The MOA-AD states that the BJE is free to enter into any economic
B. TERRITORY cooperation and trade relations with foreign countries and shall have the option
to establish trade missions in those countries. Such relationships and
The territory of the Bangsamoro homeland is described as the land mass as understandings, however, are not to include aggression against the GRP. The
well as the maritime, terrestrial, fluvial and alluvial domains, including the aerial BJE may also enter into environmental cooperation agreements.46
domain and the atmospheric space above it, embracing the Mindanao-Sulu-
Palawan geographic region.38 The external defense of the BJE is to remain the duty and obligation of the
Central Government. The Central Government is also bound to "take
More specifically, the core of the BJE is defined as the present geographic necessary steps to ensure the BJE's participation in international meetings and
area of the ARMM - thus constituting the following areas: Lanao del Sur, events" like those of the ASEAN and the specialized agencies of the UN. The
Maguindanao, Sulu, Tawi-Tawi, Basilan, and Marawi City. Significantly, this BJE is to be entitled to participate in Philippine official missions and
core also includes certain municipalities of Lanao del Norte that voted for delegations for the negotiation of border agreements or protocols for
inclusion in the ARMM in the 2001 plebiscite.39 environmental protection and equitable sharing of incomes and revenues
involving the bodies of water adjacent to or between the islands forming part
Outside of this core, the BJE is to cover other provinces, cities, municipalities of the ancestral domain.47
and barangays, which are grouped into two categories, Category A and
Category B. Each of these areas is to be subjected to a plebiscite to be held With regard to the right of exploring for, producing, and obtaining all potential
on different dates, years apart from each other. Thus, Category A areas are to sources of energy, petroleum, fossil fuel, mineral oil and natural gas, the
be subjected to a plebiscite not later than twelve (12) months following the jurisdiction and control thereon is to be vested in the BJE "as the party having
signing of the MOA-AD.40 Category B areas, also called "Special Intervention control within its territorial jurisdiction." This right carries the proviso that, "in
times of national emergency, when public interest so requires," the Central
Government may, for a fixed period and under reasonable terms as may be The BJE is granted the power to build, develop and maintain its own institutions
agreed upon by both Parties, assume or direct the operation of such inclusive of civil service, electoral, financial and banking, education, legislation,
resources.48 legal, economic, police and internal security force, judicial system and
correctional institutions, the details of which shall be discussed in the
The sharing between the Central Government and the BJE of total production negotiation of the comprehensive compact.
pertaining to natural resources is to be 75:25 in favor of the BJE.49
As stated early on, the MOA-AD was set to be signed on August 5, 2008 by
The MOA-AD provides that legitimate grievances of the Bangsamoro people Rodolfo Garcia and Mohagher Iqbal, Chairpersons of the Peace Negotiating
arising from any unjust dispossession of their territorial and proprietary rights, Panels of the GRP and the MILF, respectively. Notably, the penultimate
customary land tenures, or their marginalization shall be acknowledged. paragraph of the MOA-AD identifies the signatories as "the representatives of
Whenever restoration is no longer possible, reparation is to be in such form as the Parties," meaning the GRP and MILF themselves, and not merely of the
mutually determined by the Parties.50 negotiating panels.53 In addition, the signature page of the MOA-AD states
that it is "WITNESSED BY" Datuk Othman Bin Abd Razak, Special Adviser to
The BJE may modify or cancel the forest concessions, timber licenses, the Prime Minister of Malaysia, "ENDORSED BY" Ambassador Sayed
contracts or agreements, mining concessions, Mineral Production and Sharing Elmasry, Adviser to Organization of the Islamic Conference (OIC) Secretary
Agreements (MPSA), Industrial Forest Management Agreements (IFMA), and General and Special Envoy for Peace Process in Southern Philippines, and
other land tenure instruments granted by the Philippine Government, including SIGNED "IN THE PRESENCE OF" Dr. Albert G. Romulo, Secretary of Foreign
those issued by the present ARMM.51 Affairs of RP and Dato' Seri Utama Dr. Rais Bin Yatim, Minister of Foreign
Affairs, Malaysia, all of whom were scheduled to sign the Agreement last
D. GOVERNANCE August 5, 2008.

The MOA-AD binds the Parties to invite a multinational third-party to observe Annexed to the MOA-AD are two documents containing the respective lists
and monitor the implementation of the Comprehensive Compact. This compact cum maps of the provinces, municipalities, and barangays under Categories
is to embody the "details for the effective enforcement" and "the mechanisms A and B earlier mentioned in the discussion on the strand on TERRITORY.
and modalities for the actual implementation" of the MOA-AD. The MOA-AD
explicitly provides that the participation of the third party shall not in any way IV. PROCEDURAL ISSUES
affect the status of the relationship between the Central Government and the
BJE.52 A. RIPENESS

The "associative" relationship The power of judicial review is limited to actual cases or controversies.54
between the Central Government Courts decline to issue advisory opinions or to resolve hypothetical or feigned
and the BJE problems, or mere academic questions.55 The limitation of the power of
judicial review to actual cases and controversies defines the role assigned to
The MOA-AD describes the relationship of the Central Government and the the judiciary in a tripartite allocation of power, to assure that the courts will not
BJE as "associative," characterized by shared authority and responsibility. And intrude into areas committed to the other branches of government.56
it states that the structure of governance is to be based on executive,
legislative, judicial, and administrative institutions with defined powers and An actual case or controversy involves a conflict of legal rights, an assertion
functions in the Comprehensive Compact. of opposite legal claims, susceptible of judicial resolution as distinguished from
a hypothetical or abstract difference or dispute. There must be a contrariety of
The MOA-AD provides that its provisions requiring "amendments to the legal rights that can be interpreted and enforced on the basis of existing law
existing legal framework" shall take effect upon signing of the Comprehensive and jurisprudence.57 The Court can decide the constitutionality of an act or
Compact and upon effecting the aforesaid amendments, with due regard to treaty only when a proper case between opposing parties is submitted for
the non-derogation of prior agreements and within the stipulated timeframe to judicial determination.58
be contained in the Comprehensive Compact. As will be discussed later, much
of the present controversy hangs on the legality of this provision.
Related to the requirement of an actual case or controversy is the requirement as Category A attached herein (the "Annex"). The Annex constitutes an
of ripeness. A question is ripe for adjudication when the act being challenged integral part of this framework agreement. Toward this end, the Parties shall
has had a direct adverse effect on the individual challenging it.59 For a case endeavor to complete the negotiations and resolve all outstanding issues on
to be considered ripe for adjudication, it is a prerequisite that something had the Comprehensive Compact within fifteen (15) months from the signing of the
then been accomplished or performed by either branch before a court may MOA-AD.
come into the picture,60 and the petitioner must allege the existence of an
immediate or threatened injury to itself as a result of the challenged action.61 xxxx
He must show that he has sustained or is immediately in danger of sustaining
some direct injury as a result of the act complained of.62 GOVERNANCE

The Solicitor General argues that there is no justiciable controversy that is ripe xxxx
for judicial review in the present petitions, reasoning that
7. The Parties agree that mechanisms and modalities for the actual
The unsigned MOA-AD is simply a list of consensus points subject to further implementation of this MOA-AD shall be spelt out in the Comprehensive
negotiations and legislative enactments as well as constitutional processes Compact to mutually take such steps to enable it to occur effectively.
aimed at attaining a final peaceful agreement. Simply put, the MOA-AD
remains to be a proposal that does not automatically create legally Any provisions of the MOA-AD requiring amendments to the existing legal
demandable rights and obligations until the list of operative acts required have framework shall come into force upon the signing of a Comprehensive
been duly complied with. x x x Compact and upon effecting the necessary changes to the legal framework
with due regard to non-derogation of prior agreements and within the stipulated
xxxx timeframe to be contained in the Comprehensive Compact.64 (Underscoring
supplied)
In the cases at bar, it is respectfully submitted that this Honorable Court has
no authority to pass upon issues based on hypothetical or feigned The Solicitor General's arguments fail to persuade.
constitutional problems or interests with no concrete bases. Considering the
preliminary character of the MOA-AD, there are no concrete acts that could Concrete acts under the MOA-AD are not necessary to render the present
possibly violate petitioners' and intervenors' rights since the acts complained controversy ripe. In Pimentel, Jr. v. Aguirre,65 this Court held:
of are mere contemplated steps toward the formulation of a final peace
agreement. Plainly, petitioners and intervenors' perceived injury, if at all, is x x x [B]y the mere enactment of the questioned law or the approval of the
merely imaginary and illusory apart from being unfounded and based on mere challenged action, the dispute is said to have ripened into a judicial controversy
conjectures. (Underscoring supplied) even without any other overt act. Indeed, even a singular violation of the
Constitution and/or the law is enough to awaken judicial duty.
The Solicitor General cites63 the following provisions of the MOA-AD:
xxxx
TERRITORY
By the same token, when an act of the President, who in our constitutional
xxxx scheme is a coequal of Congress, is seriously alleged to have infringed the
Constitution and the laws x x x settling the dispute becomes the duty and the
2. Toward this end, the Parties enter into the following stipulations: responsibility of the courts.66

xxxx In Santa Fe Independent School District v. Doe,67 the United States Supreme
Court held that the challenge to the constitutionality of the school's policy
d. Without derogating from the requirements of prior agreements, the allowing student-led prayers and speeches before games was ripe for
Government stipulates to conduct and deliver, using all possible legal adjudication, even if no public prayer had yet been led under the policy,
measures, within twelve (12) months following the signing of the MOA-AD, a because the policy was being challenged as unconstitutional on its face.68
plebiscite covering the areas as enumerated in the list and depicted in the map
That the law or act in question is not yet effective does not negate ripeness. Certiorari, Prohibition, and Mandamus, and an actual case or controversy ripe
For example, in New York v. United States,69 decided in 1992, the United for adjudication exists. When an act of a branch of government is seriously
States Supreme Court held that the action by the State of New York alleged to have infringed the Constitution, it becomes not only the right but in
challenging the provisions of the Low-Level Radioactive Waste Policy Act was fact the duty of the judiciary to settle the dispute.77
ripe for adjudication even if the questioned provision was not to take effect until
January 1, 1996, because the parties agreed that New York had to take B. LOCUS STANDI
immediate action to avoid the provision's consequences.70
For a party to have locus standi, one must allege "such a personal stake in the
The present petitions pray for Certiorari,71 Prohibition, and Mandamus. outcome of the controversy as to assure that concrete adverseness which
Certiorari and Prohibition are remedies granted by law when any tribunal, sharpens the presentation of issues upon which the court so largely depends
board or officer has acted, in the case of certiorari, or is proceeding, in the for illumination of difficult constitutional questions."78
case of prohibition, without or in excess of its jurisdiction or with grave abuse
of discretion amounting to lack or excess of jurisdiction.72 Mandamus is a Because constitutional cases are often public actions in which the relief sought
remedy granted by law when any tribunal, corporation, board, officer or person is likely to affect other persons, a preliminary question frequently arises as to
unlawfully neglects the performance of an act which the law specifically enjoins this interest in the constitutional question raised.79
as a duty resulting from an office, trust, or station, or unlawfully excludes
another from the use or enjoyment of a right or office to which such other is When suing as a citizen, the person complaining must allege that he has been
entitled.73 Certiorari, Mandamus and Prohibition are appropriate remedies to or is about to be denied some right or privilege to which he is lawfully entitled
raise constitutional issues and to review and/or prohibit/nullify, when proper, or that he is about to be subjected to some burdens or penalties by reason of
acts of legislative and executive officials.74 the statute or act complained of.80 When the issue concerns a public right, it
is sufficient that the petitioner is a citizen and has an interest in the execution
The authority of the GRP Negotiating Panel is defined by Executive Order No. of the laws.81
3 (E.O. No. 3), issued on February 28, 2001.75 The said executive order
requires that "[t]he government's policy framework for peace, including the For a taxpayer, one is allowed to sue where there is an assertion that public
systematic approach and the administrative structure for carrying out the funds are illegally disbursed or deflected to an illegal purpose, or that there is
comprehensive peace process x x x be governed by this Executive Order."76 a wastage of public funds through the enforcement of an invalid or
unconstitutional law.82 The Court retains discretion whether or not to allow a
The present petitions allege that respondents GRP Panel and PAPP Esperon taxpayer's suit.83
drafted the terms of the MOA-AD without consulting the local government units
or communities affected, nor informing them of the proceedings. As will be In the case of a legislator or member of Congress, an act of the Executive that
discussed in greater detail later, such omission, by itself, constitutes a injures the institution of Congress causes a derivative but nonetheless
departure by respondents from their mandate under E.O. No. 3. substantial injury that can be questioned by legislators. A member of the
House of Representatives has standing to maintain inviolate the prerogatives,
Furthermore, the petitions allege that the provisions of the MOA-AD violate the powers and privileges vested by the Constitution in his office.84
Constitution. The MOA-AD provides that "any provisions of the MOA-AD
requiring amendments to the existing legal framework shall come into force An organization may be granted standing to assert the rights of its members,85
upon the signing of a Comprehensive Compact and upon effecting the but the mere invocation by the Integrated Bar of the Philippines or any member
necessary changes to the legal framework," implying an amendment of the of the legal profession of the duty to preserve the rule of law does not suffice
Constitution to accommodate the MOA-AD. This stipulation, in effect, to clothe it with standing.86
guaranteed to the MILF the amendment of the Constitution. Such act
constitutes another violation of its authority. Again, these points will be As regards a local government unit (LGU), it can seek relief in order to protect
discussed in more detail later. or vindicate an interest of its own, and of the other LGUs.87

As the petitions allege acts or omissions on the part of respondent that exceed Intervenors, meanwhile, may be given legal standing upon showing of facts
their authority, by violating their duties under E.O. No. 3 and the provisions of that satisfy the requirements of the law authorizing intervention,88 such as a
the Constitution and statutes, the petitions make a prima facie case for legal interest in the matter in litigation, or in the success of either of the parties.
either of the parties. He thus possesses the requisite standing as an
In any case, the Court has discretion to relax the procedural technicality on intervenor.
locus standi, given the liberal attitude it has exercised, highlighted in the case
of David v. Macapagal-Arroyo,89 where technicalities of procedure were With respect to Intervenors Ruy Elias Lopez, as a former congressman of the
brushed aside, the constitutional issues raised being of paramount public 3rd district of Davao City, a taxpayer and a member of the Bagobo tribe; Carlo
interest or of transcendental importance deserving the attention of the Court in B. Gomez, et al., as members of the IBP Palawan chapter, citizens and
view of their seriousness, novelty and weight as precedents.90 The Court's taxpayers; Marino Ridao, as taxpayer, resident and member of the
forbearing stance on locus standi on issues involving constitutional issues has Sangguniang Panlungsod of Cotabato City; and Kisin Buxani, as taxpayer,
for its purpose the protection of fundamental rights. they failed to allege any proper legal interest in the present petitions. Just the
same, the Court exercises its discretion to relax the procedural technicality on
In not a few cases, the Court, in keeping with its duty under the Constitution to locus standi given the paramount public interest in the issues at hand.
determine whether the other branches of government have kept themselves
within the limits of the Constitution and the laws and have not abused the Intervening respondents Muslim Multi-Sectoral Movement for Peace and
discretion given them, has brushed aside technical rules of procedure.91 Development, an advocacy group for justice and the attainment of peace and
prosperity in Muslim Mindanao; and Muslim Legal Assistance Foundation Inc.,
In the petitions at bar, petitioners Province of North Cotabato (G.R. No. a non-government organization of Muslim lawyers, allege that they stand to be
183591) Province of Zamboanga del Norte (G.R. No. 183951), City of Iligan benefited or prejudiced, as the case may be, in the resolution of the petitions
(G.R. No. 183893) and City of Zamboanga (G.R. No. 183752) and petitioners- concerning the MOA-AD, and prays for the denial of the petitions on the
in-intervention Province of Sultan Kudarat, City of Isabela and Municipality of grounds therein stated. Such legal interest suffices to clothe them with
Linamon have locus standi in view of the direct and substantial injury that they, standing.
as LGUs, would suffer as their territories, whether in whole or in part, are to be
included in the intended domain of the BJE. These petitioners allege that they B. MOOTNESS
did not vote for their inclusion in the ARMM which would be expanded to form
the BJE territory. Petitioners' legal standing is thus beyond doubt. Respondents insist that the present petitions have been rendered moot with
the satisfaction of all the reliefs prayed for by petitioners and the subsequent
In G.R. No. 183962, petitioners Ernesto Maceda, Jejomar Binay and Aquilino pronouncement of the Executive Secretary that "[n]o matter what the Supreme
Pimentel III would have no standing as citizens and taxpayers for their failure Court ultimately decides[,] the government will not sign the MOA."92
to specify that they would be denied some right or privilege or there would be
wastage of public funds. The fact that they are a former Senator, an incumbent In lending credence to this policy decision, the Solicitor General points out that
mayor of Makati City, and a resident of Cagayan de Oro, respectively, is of no the President had already disbanded the GRP Peace Panel.93
consequence. Considering their invocation of the transcendental importance
of the issues at hand, however, the Court grants them standing. In David v. Macapagal-Arroyo,94 this Court held that the "moot and academic"
principle not being a magical formula that automatically dissuades courts in
Intervenors Franklin Drilon and Adel Tamano, in alleging their standing as resolving a case, it will decide cases, otherwise moot and academic, if it finds
taxpayers, assert that government funds would be expended for the conduct that (a) there is a grave violation of the Constitution;95 (b) the situation is of
of an illegal and unconstitutional plebiscite to delineate the BJE territory. On exceptional character and paramount public interest is involved;96 (c) the
that score alone, they can be given legal standing. Their allegation that the constitutional issue raised requires formulation of controlling principles to guide
issues involved in these petitions are of "undeniable transcendental the bench, the bar, and the public;97 and (d) the case is capable of repetition
importance" clothes them with added basis for their personality to intervene in yet evading review.98
these petitions.
Another exclusionary circumstance that may be considered is where there is
With regard to Senator Manuel Roxas, his standing is premised on his being a a voluntary cessation of the activity complained of by the defendant or doer.
member of the Senate and a citizen to enforce compliance by respondents of Thus, once a suit is filed and the doer voluntarily ceases the challenged
the public's constitutional right to be informed of the MOA-AD, as well as on a conduct, it does not automatically deprive the tribunal of power to hear and
genuine legal interest in the matter in litigation, or in the success or failure of determine the case and does not render the case moot especially when the
plaintiff seeks damages or prays for injunctive relief against the possible Respondents cite Suplico v. NEDA, et al.103 where the Court did not
recurrence of the violation.99 "pontificat[e] on issues which no longer legitimately constitute an actual case
or controversy [as this] will do more harm than good to the nation as a whole."
The present petitions fall squarely into these exceptions to thus thrust them
into the domain of judicial review. The grounds cited above in David are just The present petitions must be differentiated from Suplico. Primarily, in Suplico,
as applicable in the present cases as they were, not only in David, but also in what was assailed and eventually cancelled was a stand-alone government
Province of Batangas v. Romulo100 and Manalo v. Calderon101 where the procurement contract for a national broadband network involving a one-time
Court similarly decided them on the merits, supervening events that would contractual relation between two parties-the government and a private foreign
ordinarily have rendered the same moot notwithstanding. corporation. As the issues therein involved specific government procurement
policies and standard principles on contracts, the majority opinion in Suplico
Petitions not mooted found nothing exceptional therein, the factual circumstances being peculiar
only to the transactions and parties involved in the controversy.
Contrary then to the asseverations of respondents, the non-signing of the
MOA-AD and the eventual dissolution of the GRP Peace Panel did not moot The MOA-AD is part of a series of agreements
the present petitions. It bears emphasis that the signing of the MOA-AD did
not push through due to the Court's issuance of a Temporary Restraining In the present controversy, the MOA-AD is a significant part of a series of
Order. agreements necessary to carry out the Tripoli Agreement 2001. The MOA-AD
which dwells on the Ancestral Domain Aspect of said Tripoli Agreement is the
Contrary too to respondents' position, the MOA-AD cannot be considered a third such component to be undertaken following the implementation of the
mere "list of consensus points," especially given its nomenclature, the need to Security Aspect in August 2001 and the Humanitarian, Rehabilitation and
have it signed or initialed by all the parties concerned on August 5, 2008, and Development Aspect in May 2002.
the far-reaching Constitutional implications of these "consensus points,"
foremost of which is the creation of the BJE. Accordingly, even if the Executive Secretary, in his Memorandum of August
28, 2008 to the Solicitor General, has stated that "no matter what the Supreme
In fact, as what will, in the main, be discussed, there is a commitment on the Court ultimately decides[,] the government will not sign the MOA[-AD],"
part of respondents to amend and effect necessary changes to the existing mootness will not set in in light of the terms of the Tripoli Agreement 2001.
legal framework for certain provisions of the MOA-AD to take effect.
Consequently, the present petitions are not confined to the terms and Need to formulate principles-guidelines
provisions of the MOA-AD, but to other on-going and future negotiations and
agreements necessary for its realization. The petitions have not, therefore, Surely, the present MOA-AD can be renegotiated or another one will be drawn
been rendered moot and academic simply by the public disclosure of the MOA- up to carry out the Ancestral Domain Aspect of the Tripoli Agreement 2001, in
AD,102 the manifestation that it will not be signed as well as the disbanding of another or in any form, which could contain similar or significantly drastic
the GRP Panel not withstanding. provisions. While the Court notes the word of the Executive Secretary that the
government "is committed to securing an agreement that is both constitutional
Petitions are imbued with paramount public interest and equitable because that is the only way that long-lasting peace can be
assured," it is minded to render a decision on the merits in the present petitions
There is no gainsaying that the petitions are imbued with paramount public to formulate controlling principles to guide the bench, the bar, the public and,
interest, involving a significant part of the country's territory and the wide- most especially, the government in negotiating with the MILF regarding
ranging political modifications of affected LGUs. The assertion that the MOA- Ancestral Domain.
AD is subject to further legal enactments including possible Constitutional
amendments more than ever provides impetus for the Court to formulate Respondents invite the Court's attention to the separate opinion of then Chief
controlling principles to guide the bench, the bar, the public and, in this case, Justice Artemio Panganiban in Sanlakas v. Reyes104 in which he stated that
the government and its negotiating entity. the doctrine of "capable of repetition yet evading review" can override
mootness, "provided the party raising it in a proper case has been and/or
continue to be prejudiced or damaged as a direct result of their issuance." They
contend that the Court must have jurisdiction over the subject matter for the research data used as basis for policy development, shall be afforded the
doctrine to be invoked. citizen, subject to such limitations as may be provided by law.107

The present petitions all contain prayers for Prohibition over which this Court As early as 1948, in Subido v. Ozaeta,108 the Court has recognized the
exercises original jurisdiction. While G.R. No. 183893 (City of Iligan v. GRP) is statutory right to examine and inspect public records, a right which was
a petition for Injunction and Declaratory Relief, the Court will treat it as one for eventually accorded constitutional status.
Prohibition as it has far reaching implications and raises questions that need
to be resolved.105 At all events, the Court has jurisdiction over most if not the The right of access to public documents, as enshrined in both the 1973
rest of the petitions. Constitution and the 1987 Constitution, has been recognized as a self-
executory constitutional right.109
Indeed, the present petitions afford a proper venue for the Court to again apply
the doctrine immediately referred to as what it had done in a number of In the 1976 case of Baldoza v. Hon. Judge Dimaano,110 the Court ruled that
landmark cases.106 There is a reasonable expectation that petitioners, access to public records is predicated on the right of the people to acquire
particularly the Provinces of North Cotabato, Zamboanga del Norte and Sultan information on matters of public concern since, undoubtedly, in a democracy,
Kudarat, the Cities of Zamboanga, Iligan and Isabela, and the Municipality of the pubic has a legitimate interest in matters of social and political significance.
Linamon, will again be subjected to the same problem in the future as
respondents' actions are capable of repetition, in another or any form. x x x The incorporation of this right in the Constitution is a recognition of the
fundamental role of free exchange of information in a democracy. There can
It is with respect to the prayers for Mandamus that the petitions have become be no realistic perception by the public of the nation's problems, nor a
moot, respondents having, by Compliance of August 7, 2008, provided this meaningful democratic decision-making if they are denied access to
Court and petitioners with official copies of the final draft of the MOA-AD and information of general interest. Information is needed to enable the members
its annexes. Too, intervenors have been furnished, or have procured for of society to cope with the exigencies of the times. As has been aptly observed:
themselves, copies of the MOA-AD. "Maintaining the flow of such information depends on protection for both its
acquisition and its dissemination since, if either process is interrupted, the flow
V. SUBSTANTIVE ISSUES inevitably ceases." x x x111

As culled from the Petitions and Petitions-in-Intervention, there are basically In the same way that free discussion enables members of society to cope with
two SUBSTANTIVE issues to be resolved, one relating to the manner in which the exigencies of their time, access to information of general interest aids the
the MOA-AD was negotiated and finalized, the other relating to its provisions, people in democratic decision-making by giving them a better perspective of
viz: the vital issues confronting the nation112 so that they may be able to criticize
and participate in the affairs of the government in a responsible, reasonable
1. Did respondents violate constitutional and statutory provisions on public and effective manner. It is by ensuring an unfettered and uninhibited exchange
consultation and the right to information when they negotiated and later of ideas among a well-informed public that a government remains responsive
initialed the MOA-AD? to the changes desired by the people.113

2. Do the contents of the MOA-AD violate the Constitution and the laws? The MOA-AD is a matter of public concern

ON THE FIRST SUBSTANTIVE ISSUE That the subject of the information sought in the present cases is a matter of
public concern114 faces no serious challenge. In fact, respondents admit that
Petitioners invoke their constitutional right to information on matters of public the MOA-AD is indeed of public concern.115 In previous cases, the Court
concern, as provided in Section 7, Article III on the Bill of Rights: found that the regularity of real estate transactions entered in the Register of
Deeds,116 the need for adequate notice to the public of the various laws,117
Sec. 7. The right of the people to information on matters of public concern shall the civil service eligibility of a public employee,118 the proper management of
be recognized. Access to official records, and to documents, and papers GSIS funds allegedly used to grant loans to public officials,119 the recovery of
pertaining to official acts, transactions, or decisions, as well as to government the Marcoses' alleged ill-gotten wealth,120 and the identity of party-list
nominees,121 among others, are matters of public concern. Undoubtedly, the
MOA-AD subject of the present cases is of public concern, involving as it does
the sovereignty and territorial integrity of the State, which directly affects the Whether Section 28 is self-executory, the records of the deliberations of the
lives of the public at large. Constitutional Commission so disclose:

Matters of public concern covered by the right to information include steps and MR. SUAREZ. And since this is not self-executory, this policy will not be
negotiations leading to the consummation of the contract. In not distinguishing enunciated or will not be in force and effect until after Congress shall have
as to the executory nature or commercial character of agreements, the Court provided it.
has categorically ruled:
MR. OPLE. I expect it to influence the climate of public ethics immediately but,
x x x [T]he right to information "contemplates inclusion of negotiations leading of course, the implementing law will have to be enacted by Congress, Mr.
to the consummation of the transaction." Certainly, a consummated contract Presiding Officer.128
is not a requirement for the exercise of the right to information. Otherwise, the
people can never exercise the right if no contract is consummated, and if one The following discourse, after Commissioner Hilario Davide, Jr., sought
is consummated, it may be too late for the public to expose its defects. clarification on the issue, is enlightening.

Requiring a consummated contract will keep the public in the dark until the MR. DAVIDE. I would like to get some clarifications on this. Mr. Presiding
contract, which may be grossly disadvantageous to the government or even Officer, did I get the Gentleman correctly as having said that this is not a self-
illegal, becomes fait accompli. This negates the State policy of full executing provision? It would require a legislation by Congress to implement?
transparency on matters of public concern, a situation which the framers of the
Constitution could not have intended. Such a requirement will prevent the MR. OPLE. Yes. Originally, it was going to be self-executing, but I accepted
citizenry from participating in the public discussion of any proposed contract, an amendment from Commissioner Regalado, so that the safeguards on
effectively truncating a basic right enshrined in the Bill of Rights. We can allow national interest are modified by the clause "as may be provided by law"
neither an emasculation of a constitutional right, nor a retreat by the State of
its avowed "policy of full disclosure of all its transactions involving public MR. DAVIDE. But as worded, does it not mean that this will immediately take
interest."122 (Emphasis and italics in the original) effect and Congress may provide for reasonable safeguards on the sole
ground national interest?
Intended as a "splendid symmetry"123 to the right to information under the Bill
of Rights is the policy of public disclosure under Section 28, Article II of the MR. OPLE. Yes. I think so, Mr. Presiding Officer, I said earlier that it should
Constitution reading: immediately influence the climate of the conduct of public affairs but, of course,
Congress here may no longer pass a law revoking it, or if this is approved,
Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts revoking this principle, which is inconsistent with this policy.129 (Emphasis
and implements a policy of full public disclosure of all its transactions involving supplied)
public interest.124
Indubitably, the effectivity of the policy of public disclosure need not await the
The policy of full public disclosure enunciated in above-quoted Section 28 passing of a statute. As Congress cannot revoke this principle, it is merely
complements the right of access to information on matters of public concern directed to provide for "reasonable safeguards." The complete and effective
found in the Bill of Rights. The right to information guarantees the right of the exercise of the right to information necessitates that its complementary
people to demand information, while Section 28 recognizes the duty of provision on public disclosure derive the same self-executory nature. Since
officialdom to give information even if nobody demands.125 both provisions go hand-in-hand, it is absurd to say that the broader130 right
to information on matters of public concern is already enforceable while the
The policy of public disclosure establishes a concrete ethical principle for the correlative duty of the State to disclose its transactions involving public interest
conduct of public affairs in a genuinely open democracy, with the people's right is not enforceable until there is an enabling law. Respondents cannot thus
to know as the centerpiece. It is a mandate of the State to be accountable by point to the absence of an implementing legislation as an excuse in not
following such policy.126 These provisions are vital to the exercise of the effecting such policy.
freedom of expression and essential to hold public officials at all times
accountable to the people.127
An essential element of these freedoms is to keep open a continuing dialogue
or process of communication between the government and the people. It is in Clearly, E.O. No. 3 contemplates not just the conduct of a plebiscite to
the interest of the State that the channels for free political discussion be effectuate "continuing" consultations, contrary to respondents' position that
maintained to the end that the government may perceive and be responsive to plebiscite is "more than sufficient consultation."136
the people's will.131 Envisioned to be corollary to the twin rights to information
and disclosure is the design for feedback mechanisms. Further, E.O. No. 3 enumerates the functions and responsibilities of the PAPP,
one of which is to "[c]onduct regular dialogues with the National Peace Forum
MS. ROSARIO BRAID. Yes. And lastly, Mr. Presiding Officer, will the people (NPF) and other peace partners to seek relevant information, comments,
be able to participate? Will the government provide feedback mechanisms so recommendations as well as to render appropriate and timely reports on the
that the people can participate and can react where the existing media facilities progress of the comprehensive peace process."137 E.O. No. 3 mandates the
are not able to provide full feedback mechanisms to the government? I establishment of the NPF to be "the principal forum for the PAPP to consult
suppose this will be part of the government implementing operational with and seek advi[c]e from the peace advocates, peace partners and
mechanisms. concerned sectors of society on both national and local levels, on the
implementation of the comprehensive peace process, as well as for
MR. OPLE. Yes. I think through their elected representatives and that is how government[-]civil society dialogue and consensus-building on peace agenda
these courses take place. There is a message and a feedback, both ways. and initiatives."138

xxxx In fine, E.O. No. 3 establishes petitioners' right to be consulted on the peace
agenda, as a corollary to the constitutional right to information and disclosure.
MS. ROSARIO BRAID. Mr. Presiding Officer, may I just make one last
sentence? PAPP Esperon committed grave abuse of discretion

I think when we talk about the feedback network, we are not talking about The PAPP committed grave abuse of discretion when he failed to carry out the
public officials but also network of private business o[r] community-based pertinent consultation. The furtive process by which the MOA-AD was
organizations that will be reacting. As a matter of fact, we will put more designed and crafted runs contrary to and in excess of the legal authority, and
credence or credibility on the private network of volunteers and voluntary amounts to a whimsical, capricious, oppressive, arbitrary and despotic
community-based organizations. So I do not think we are afraid that there will exercise thereof.
be another OMA in the making.132 (Emphasis supplied)
The Court may not, of course, require the PAPP to conduct the consultation in
The imperative of a public consultation, as a species of the right to information, a particular way or manner. It may, however, require him to comply with the
is evident in the "marching orders" to respondents. The mechanics for the duty law and discharge the functions within the authority granted by the
to disclose information and to conduct public consultation regarding the peace President.139
agenda and process is manifestly provided by E.O. No. 3.133 The
preambulatory clause of E.O. No. 3 declares that there is a need to further Petitioners are not claiming a seat at the negotiating table, contrary to
enhance the contribution of civil society to the comprehensive peace process respondents' retort in justifying the denial of petitioners' right to be consulted.
by institutionalizing the people's participation. Respondents' stance manifests the manner by which they treat the salient
provisions of E.O. No. 3 on people's participation. Such disregard of the
One of the three underlying principles of the comprehensive peace process is express mandate of the President is not much different from superficial
that it "should be community-based, reflecting the sentiments, values and conduct toward token provisos that border on classic lip service.140 It
principles important to all Filipinos" and "shall be defined not by the illustrates a gross evasion of positive duty and a virtual refusal to perform the
government alone, nor by the different contending groups only, but by all duty enjoined.
Filipinos as one community."134 Included as a component of the
comprehensive peace process is consensus-building and empowerment for As for respondents' invocation of the doctrine of executive privilege, it is not
peace, which includes "continuing consultations on both national and local tenable under the premises. The argument defies sound reason when
levels to build consensus for a peace agenda and process, and the contrasted with E.O. No. 3's explicit provisions on continuing consultation and
mobilization and facilitation of people's participation in the peace process."135 dialogue on both national and local levels. The executive order even
recognizes the exercise of the public's right even before the GRP makes its clear-cut mechanisms ordained in said Act,148 which entails, among other
official recommendations or before the government proffers its definite things, the observance of the free and prior informed consent of the ICCs/IPs.
propositions.141 It bear emphasis that E.O. No. 3 seeks to elicit relevant
advice, information, comments and recommendations from the people through Notably, the IPRA does not grant the Executive Department or any
dialogue. government agency the power to delineate and recognize an ancestral domain
claim by mere agreement or compromise. The recognition of the ancestral
AT ALL EVENTS, respondents effectively waived the defense of executive domain is the raison d'etre of the MOA-AD, without which all other stipulations
privilege in view of their unqualified disclosure of the official copies of the final or "consensus points" necessarily must fail. In proceeding to make a sweeping
draft of the MOA-AD. By unconditionally complying with the Court's August 4, declaration on ancestral domain, without complying with the IPRA, which is
2008 Resolution, without a prayer for the document's disclosure in camera, or cited as one of the TOR of the MOA-AD, respondents clearly transcended the
without a manifestation that it was complying therewith ex abundante ad boundaries of their authority. As it seems, even the heart of the MOA-AD is
cautelam. still subject to necessary changes to the legal framework. While paragraph 7
on Governance suspends the effectivity of all provisions requiring changes to
Petitioners' assertion that the Local Government Code (LGC) of 1991 declares the legal framework, such clause is itself invalid, as will be discussed in the
it a State policy to "require all national agencies and offices to conduct periodic following section.
consultations with appropriate local government units, non-governmental and
people's organizations, and other concerned sectors of the community before Indeed, ours is an open society, with all the acts of the government subject to
any project or program is implemented in their respective jurisdictions"142 is public scrutiny and available always to public cognizance. This has to be so if
well-taken. The LGC chapter on intergovernmental relations puts flesh into this the country is to remain democratic, with sovereignty residing in the people
avowed policy: and all government authority emanating from them.149

Prior Consultations Required. - No project or program shall be implemented ON THE SECOND SUBSTANTIVE ISSUE
by government authorities unless the consultations mentioned in Sections 2
(c) and 26 hereof are complied with, and prior approval of the sanggunian With regard to the provisions of the MOA-AD, there can be no question that
concerned is obtained: Provided, That occupants in areas where such projects they cannot all be accommodated under the present Constitution and laws.
are to be implemented shall not be evicted unless appropriate relocation sites Respondents have admitted as much in the oral arguments before this Court,
have been provided, in accordance with the provisions of the Constitution.143 and the MOA-AD itself recognizes the need to amend the existing legal
(Italics and underscoring supplied) framework to render effective at least some of its provisions. Respondents,
nonetheless, counter that the MOA-AD is free of any legal infirmity because
In Lina, Jr. v. Hon. Pao,144 the Court held that the above-stated policy and any provisions therein which are inconsistent with the present legal framework
above-quoted provision of the LGU apply only to national programs or projects will not be effective until the necessary changes to that framework are made.
which are to be implemented in a particular local community. Among the The validity of this argument will be considered later. For now, the Court shall
programs and projects covered are those that are critical to the environment pass upon how
and human ecology including those that may call for the eviction of a particular
group of people residing in the locality where these will be implemented.145 The MOA-AD is inconsistent with the Constitution and laws as presently
The MOA-AD is one peculiar program that unequivocally and unilaterally vests worded.
ownership of a vast territory to the Bangsamoro people,146 which could
pervasively and drastically result to the diaspora or displacement of a great In general, the objections against the MOA-AD center on the extent of the
number of inhabitants from their total environment. powers conceded therein to the BJE. Petitioners assert that the powers
granted to the BJE exceed those granted to any local government under
With respect to the indigenous cultural communities/indigenous peoples present laws, and even go beyond those of the present ARMM. Before
(ICCs/IPs), whose interests are represented herein by petitioner Lopez and assessing some of the specific powers that would have been vested in the
are adversely affected by the MOA-AD, the ICCs/IPs have, under the IPRA, BJE, however, it would be useful to turn first to a general idea that serves as a
the right to participate fully at all levels of decision-making in matters which unifying link to the different provisions of the MOA-AD, namely, the
may affect their rights, lives and destinies.147 The MOA-AD, an instrument international law concept of association. Significantly, the MOA-AD explicitly
recognizing ancestral domain, failed to justify its non-compliance with the
alludes to this concept, indicating that the Parties actually framed its provisions The U.S. government, when conducting its foreign affairs, is obligated to
with it in mind. consult with the governments of the Marshall Islands or the FSM on matters
which it (U.S. government) regards as relating to or affecting either
Association is referred to in paragraph 3 on TERRITORY, paragraph 11 on government.
RESOURCES, and paragraph 4 on GOVERNANCE. It is in the last mentioned
provision, however, that the MOA-AD most clearly uses it to describe the In the event of attacks or threats against the Marshall Islands or the FSM, the
envisioned relationship between the BJE and the Central Government. U.S. government has the authority and obligation to defend them as if they
were part of U.S. territory. The U.S. government, moreover, has the option of
4. The relationship between the Central Government and the Bangsamoro establishing and using military areas and facilities within these associated
juridical entity shall be associative characterized by shared authority and states and has the right to bar the military personnel of any third country from
responsibility with a structure of governance based on executive, legislative, having access to these territories for military purposes.
judicial and administrative institutions with defined powers and functions in the
comprehensive compact. A period of transition shall be established in a It bears noting that in U.S. constitutional and international practice, free
comprehensive peace compact specifying the relationship between the association is understood as an international association between sovereigns.
Central Government and the BJE. (Emphasis and underscoring supplied) The Compact of Free Association is a treaty which is subordinate to the
associated nation's national constitution, and each party may terminate the
The nature of the "associative" relationship may have been intended to be association consistent with the right of independence. It has been said that,
defined more precisely in the still to be forged Comprehensive Compact. with the admission of the U.S.-associated states to the UN in 1990, the UN
Nonetheless, given that there is a concept of "association" in international law, recognized that the American model of free association is actually based on
and the MOA-AD - by its inclusion of international law instruments in its TOR- an underlying status of independence.152
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 In international practice, the "associated state" arrangement has usually been
MOA-AD. used as a transitional device of former colonies on their way to full
independence. Examples of states that have passed through the status of
Keitner and Reisman state that associated states as a transitional phase are Antigua, St. Kitts-Nevis-Anguilla,
Dominica, St. Lucia, St. Vincent and Grenada. All have since become
[a]n association is formed when two states of unequal power voluntarily independent states.153
establish durable links. In the basic model, one state, the associate, delegates
certain responsibilities to the other, the principal, while maintaining its Back to the MOA-AD, it contains many provisions which are consistent with
international status as a state. Free associations represent a middle ground the international legal concept of association, specifically the following: the
between integration and independence. x x x150 (Emphasis and underscoring BJE's capacity to enter into economic and trade relations with foreign
supplied) countries, the commitment of the Central Government to ensure the BJE's
participation in meetings and events in the ASEAN and the specialized UN
For purposes of illustration, the Republic of the Marshall Islands and the agencies, and the continuing responsibility of the Central Government over
Federated States of Micronesia (FSM), formerly part of the U.S.-administered external defense. Moreover, the BJE's right to participate in Philippine official
Trust Territory of the Pacific Islands,151 are associated states of the U.S. missions bearing on negotiation of border agreements, environmental
pursuant to a Compact of Free Association. The currency in these countries is protection, and sharing of revenues pertaining to the bodies of water adjacent
the U.S. dollar, indicating their very close ties with the U.S., yet they issue their to or between the islands forming part of the ancestral domain, resembles the
own travel documents, which is a mark of their statehood. Their international right of the governments of FSM and the Marshall Islands to be consulted by
legal status as states was confirmed by the UN Security Council and by their the U.S. government on any foreign affairs matter affecting them.
admission to UN membership.
These provisions of the MOA indicate, among other things, that the Parties
According to their compacts of free association, the Marshall Islands and the aimed to vest in the BJE the status of an associated state or, at any rate, a
FSM generally have the capacity to conduct foreign affairs in their own name status closely approximating it.
and right, such capacity extending to matters such as the law of the sea,
marine resources, trade, banking, postal, civil aviation, and cultural relations. The concept of association is not recognized under the present Constitution
formation and powers of the BJE are in conflict with the Constitution and the
No province, city, or municipality, not even the ARMM, is recognized under our laws.
laws as having an "associative" relationship with the national government.
Indeed, the concept implies powers that go beyond anything ever granted by Article X, Section 18 of the Constitution provides that "[t]he creation of the
the Constitution to any local or regional government. It also implies the autonomous region shall be effective when approved by a majority of the votes
recognition of the associated entity as a state. The Constitution, however, does cast by the constituent units in a plebiscite called for the purpose, provided that
not contemplate any state in this jurisdiction other than the Philippine State, only provinces, cities, and geographic areas voting favorably in such plebiscite
much less does it provide for a transitory status that aims to prepare any part shall be included in the autonomous region." (Emphasis supplied)
of Philippine territory for independence.
As reflected above, the BJE is more of a state than an autonomous region. But
Even the mere concept animating many of the MOA-AD's provisions, even assuming that it is covered by the term "autonomous region" in the
therefore, already requires for its validity the amendment of constitutional constitutional provision just quoted, the MOA-AD would still be in conflict with
provisions, specifically the following provisions of Article X: it. Under paragraph 2(c) on TERRITORY in relation to 2(d) and 2(e), the
present geographic area of the ARMM and, in addition, the municipalities of
SECTION 1. The territorial and political subdivisions of the Republic of the Lanao del Norte which voted for inclusion in the ARMM during the 2001
Philippines are the provinces, cities, municipalities, and barangays. There shall plebiscite - Baloi, Munai, Nunungan, Pantar, Tagoloan and Tangkal - are
be autonomous regions in Muslim Mindanao and the Cordilleras as hereinafter automatically part of the BJE without need of another plebiscite, in contrast to
provided. the areas under Categories A and B mentioned earlier in the overview. That
the present components of the ARMM and the above-mentioned municipalities
SECTION 15. There shall be created autonomous regions in Muslim Mindanao voted for inclusion therein in 2001, however, does not render another plebiscite
and in the Cordilleras consisting of provinces, cities, municipalities, and unnecessary under the Constitution, precisely because what these areas
geographical areas sharing common and distinctive historical and cultural voted for then was their inclusion in the ARMM, not the BJE.
heritage, economic and social structures, and other relevant characteristics
within the framework of this Constitution and the national sovereignty as well The MOA-AD, moreover, would not
as territorial integrity of the Republic of the Philippines. comply with Article X, Section 20 of
the Constitution
The BJE is a far more powerful
entity than the autonomous region since that provision defines the powers of autonomous regions as follows:
recognized in the Constitution
SECTION 20. Within its territorial jurisdiction and subject to the provisions of
It is not merely an expanded version of the ARMM, the status of its relationship this Constitution and national laws, the organic act of autonomous regions
with the national government being fundamentally different from that of the shall provide for legislative powers over:
ARMM. Indeed, BJE is a state in all but name as it meets the criteria of a state
laid down in the Montevideo Convention,154 namely, a permanent population, (1) Administrative organization;
a defined territory, a government, and a capacity to enter into relations with
other states. (2) Creation of sources of revenues;

Even assuming arguendo that the MOA-AD would not necessarily sever any (3) Ancestral domain and natural resources;
portion of Philippine territory, the spirit animating it - which has betrayed itself
by its use of the concept of association - runs counter to the national (4) Personal, family, and property relations;
sovereignty and territorial integrity of the Republic.
(5) Regional urban and rural planning development;
The defining concept underlying the relationship between the national
government and the BJE being itself contrary to the present Constitution, it is (6) Economic, social, and tourism development;
not surprising that many of the specific provisions of the MOA-AD on the
(7) Educational policies;
Article X, Section 3 of the Organic Act of the ARMM is a bar to the adoption of
(8) Preservation and development of the cultural heritage; and the definition of "Bangsamoro people" used in the MOA-AD. Paragraph 1 on
Concepts and Principles states:
(9) Such other matters as may be authorized by law for the promotion of the
general welfare of the people of the region. (Underscoring supplied) 1. It is the birthright of all Moros and all Indigenous peoples of Mindanao to
identify themselves and be accepted as "Bangsamoros". The Bangsamoro
Again on the premise that the BJE may be regarded as an autonomous region, people refers to those who are natives or original inhabitants of Mindanao and
the MOA-AD would require an amendment that would expand the above- its adjacent islands including Palawan and the Sulu archipelago at the time of
quoted provision. The mere passage of new legislation pursuant to sub- conquest or colonization of its descendants whether mixed or of full blood.
paragraph No. 9 of said constitutional provision would not suffice, since any Spouses and their descendants are classified as Bangsamoro. The freedom
new law that might vest in the BJE the powers found in the MOA-AD must, of choice of the Indigenous people shall be respected. (Emphasis and
itself, comply with other provisions of the Constitution. It would not do, for underscoring supplied)
instance, to merely pass legislation vesting the BJE with treaty-making power
in order to accommodate paragraph 4 of the strand on RESOURCES which This use of the term Bangsamoro sharply contrasts with that found in the
states: "The BJE is free to enter into any economic cooperation and trade Article X, Section 3 of the Organic Act, which, rather than lumping together the
relations with foreign countries: provided, however, that such relationships and identities of the Bangsamoro and other indigenous peoples living in Mindanao,
understandings do not include aggression against the Government of the clearly distinguishes between Bangsamoro people and Tribal peoples, as
Republic of the Philippines x x x." Under our constitutional system, it is only follows:
the President who has that power. Pimentel v. Executive Secretary155
instructs: "As used in this Organic Act, the phrase "indigenous cultural community" refers
to Filipino citizens residing in the autonomous region who are:
In our system of government, the President, being the head of state, is
regarded as the sole organ and authority in external relations and is the (a) Tribal peoples. These are citizens whose social, cultural and economic
country's sole representative with foreign nations. As the chief architect of conditions distinguish them from other sectors of the national community; and
foreign policy, the President acts as the country's mouthpiece with respect to
international affairs. Hence, the President is vested with the authority to deal (b) Bangsa Moro people. These are citizens who are believers in Islam and
with foreign states and governments, extend or withhold recognition, maintain who have retained some or all of their own social, economic, cultural, and
diplomatic relations, enter into treaties, and otherwise transact the business of political institutions."
foreign relations. In the realm of treaty-making, the President has the sole
authority to negotiate with other states. (Emphasis and underscoring supplied) Respecting the IPRA, it lays down the prevailing procedure for the delineation
and recognition of ancestral domains. The MOA-AD's manner of delineating
Article II, Section 22 of the Constitution must also be amended if the scheme the ancestral domain of the Bangsamoro people is a clear departure from that
envisioned in the MOA-AD is to be effected. That constitutional provision procedure. By paragraph 1 of Territory, the Parties simply agree that, subject
states: "The State recognizes and promotes the rights of indigenous cultural to the delimitations in the agreed Schedules, "[t]he Bangsamoro homeland and
communities within the framework of national unity and development." historic territory refer to the land mass as well as the maritime, terrestrial, fluvial
(Underscoring supplied) An associative arrangement does not uphold national and alluvial domains, and the aerial domain, the atmospheric space above it,
unity. While there may be a semblance of unity because of the associative ties embracing the Mindanao-Sulu-Palawan geographic region."
between the BJE and the national government, the act of placing a portion of
Philippine territory in a status which, in international practice, has generally Chapter VIII of the IPRA, on the other hand, lays down a detailed procedure,
been a preparation for independence, is certainly not conducive to national as illustrated in the following provisions thereof:
unity.
SECTION 52. Delineation Process. - The identification and delineation of
Besides being irreconcilable with the Constitution, the MOA-AD is also ancestral domains shall be done in accordance with the following procedures:
inconsistent with prevailing statutory law, among which are R.A. No. 9054156
or the Organic Act of the ARMM, and the IPRA.157 xxxx
b) Petition for Delineation. - The process of delineating a specific perimeter a perimeter map, complete with technical descriptions, and a description of the
may be initiated by the NCIP with the consent of the ICC/IP concerned, or natural features and landmarks embraced therein;
through a Petition for Delineation filed with the NCIP, by a majority of the
members of the ICCs/IPs; f) Report of Investigation and Other Documents. - A complete copy of the
preliminary census and a report of investigation, shall be prepared by the
c) Delineation Proper. - The official delineation of ancestral domain boundaries Ancestral Domains Office of the NCIP;
including census of all community members therein, shall be immediately
undertaken by the Ancestral Domains Office upon filing of the application by g) Notice and Publication. - A copy of each document, including a translation
the ICCs/IPs concerned. Delineation will be done in coordination with the in the native language of the ICCs/IPs concerned shall be posted in a
community concerned and shall at all times include genuine involvement and prominent place therein for at least fifteen (15) days. A copy of the document
participation by the members of the communities concerned; shall also be posted at the local, provincial and regional offices of the NCIP,
and shall be published in a newspaper of general circulation once a week for
d) Proof Required. - Proof of Ancestral Domain Claims shall include the two (2) consecutive weeks to allow other claimants to file opposition thereto
testimony of elders or community under oath, and other documents directly or within fifteen (15) days from date of such publication: Provided, That in areas
indirectly attesting to the possession or occupation of the area since time where no such newspaper exists, broadcasting in a radio station will be a valid
immemorial by such ICCs/IPs in the concept of owners which shall be any one substitute: Provided, further, That mere posting shall be deemed sufficient if
(1) of the following authentic documents: both newspaper and radio station are not available;

1) Written accounts of the ICCs/IPs customs and traditions; h) Endorsement to NCIP. - Within fifteen (15) days from publication, and of the
inspection process, the Ancestral Domains Office shall prepare a report to the
2) Written accounts of the ICCs/IPs political structure and institution; NCIP endorsing a favorable action upon a claim that is deemed to have
sufficient proof. However, if the proof is deemed insufficient, the Ancestral
3) Pictures showing long term occupation such as those of old improvements, Domains Office shall require the submission of additional evidence: Provided,
burial grounds, sacred places and old villages; That the Ancestral Domains Office shall reject any claim that is deemed
patently false or fraudulent after inspection and verification: Provided, further,
4) Historical accounts, including pacts and agreements concerning boundaries That in case of rejection, the Ancestral Domains Office shall give the applicant
entered into by the ICCs/IPs concerned with other ICCs/IPs; due notice, copy furnished all concerned, containing the grounds for denial.
The denial shall be appealable to the NCIP: Provided, furthermore, That in
5) Survey plans and sketch maps; cases where there are conflicting claims among ICCs/IPs on the boundaries
of ancestral domain claims, the Ancestral Domains Office shall cause the
6) Anthropological data; contending parties to meet and assist them in coming up with a preliminary
resolution of the conflict, without prejudice to its full adjudication according to
7) Genealogical surveys; the section below.

8) Pictures and descriptive histories of traditional communal forests and xxxx


hunting grounds;
To remove all doubts about the irreconcilability of the MOA-AD with the present
9) Pictures and descriptive histories of traditional landmarks such as legal system, a discussion of not only the Constitution and domestic statutes,
mountains, rivers, creeks, ridges, hills, terraces and the like; and but also of international law is in order, for

10) Write-ups of names and places derived from the native dialect of the Article II, Section 2 of the Constitution states that the Philippines "adopts the
community. generally accepted principles of international law as part of the law of the land."

e) Preparation of Maps. - On the basis of such investigation and the findings Applying this provision of the Constitution, the Court, in Mejoff v. Director of
of fact based thereon, the Ancestral Domains Office of the NCIP shall prepare Prisons,158 held that the Universal Declaration of Human Rights is part of the
law of the land on account of which it ordered the release on bail of a detained
alien of Russian descent whose deportation order had not been executed even determination also contain parallel statements supportive of the conclusion
after two years. Similarly, the Court in Agustin v. Edu159 applied the aforesaid that the exercise of such a right must be sufficiently limited to prevent threats
constitutional provision to the 1968 Vienna Convention on Road Signs and to an existing state's territorial integrity or the stability of relations between
Signals. sovereign states.

International law has long recognized the right to self-determination of x x x x (Emphasis, italics and underscoring supplied)
"peoples," understood not merely as the entire population of a State but also
a portion thereof. In considering the question of whether the people of Quebec The Canadian Court went on to discuss the exceptional cases in which the
had a right to unilaterally secede from Canada, the Canadian Supreme Court right to external self-determination can arise, namely, where a people is under
in REFERENCE RE SECESSION OF QUEBEC160 had occasion to colonial rule, is subject to foreign domination or exploitation outside a colonial
acknowledge that "the right of a people to self-determination is now so widely context, and - less definitely but asserted by a number of commentators - is
recognized in international conventions that the principle has acquired a status blocked from the meaningful exercise of its right to internal self-determination.
beyond convention' and is considered a general principle of international law." The Court ultimately held that the population of Quebec had no right to
secession, as the same is not under colonial rule or foreign domination, nor is
Among the conventions referred to are the International Covenant on Civil and it being deprived of the freedom to make political choices and pursue
Political Rights161 and the International Covenant on Economic, Social and economic, social and cultural development, citing that Quebec is equitably
Cultural Rights162 which state, in Article 1 of both covenants, that all peoples, represented in legislative, executive and judicial institutions within Canada,
by virtue of the right of self-determination, "freely determine their political status even occupying prominent positions therein.
and freely pursue their economic, social, and cultural development."
The exceptional nature of the right of secession is further exemplified in the
The people's right to self-determination should not, however, be understood REPORT OF THE INTERNATIONAL COMMITTEE OF JURISTS ON THE
as extending to a unilateral right of secession. A distinction should be made LEGAL ASPECTS OF THE AALAND ISLANDS QUESTION.163 There,
between the right of internal and external self-determination. REFERENCE RE Sweden presented to the Council of the League of Nations the question of
SECESSION OF QUEBEC is again instructive: whether the inhabitants of the Aaland Islands should be authorized to
determine by plebiscite if the archipelago should remain under Finnish
"(ii) Scope of the Right to Self-determination sovereignty or be incorporated in the kingdom of Sweden. The Council, before
resolving the question, appointed an International Committee composed of
126. The recognized sources of international law establish that the right to self- three jurists to submit an opinion on the preliminary issue of whether the
determination of a people is normally fulfilled through internal self- dispute should, based on international law, be entirely left to the domestic
determination - a people's pursuit of its political, economic, social and cultural jurisdiction of Finland. The Committee stated the rule as follows:
development within the framework of an existing state. A right to external self-
determination (which in this case potentially takes the form of the assertion of x x x [I]n the absence of express provisions in international treaties, the right
a right to unilateral secession) arises in only the most extreme of cases and, of disposing of national territory is essentially an attribute of the sovereignty of
even then, under carefully defined circumstances. x x x every State. Positive International Law does not recognize the right of national
groups, as such, to separate themselves from the State of which they form part
External self-determination can be defined as in the following statement from by the simple expression of a wish, any more than it recognizes the right of
the Declaration on Friendly Relations, supra, as other States to claim such a separation. Generally speaking, the grant or
refusal of the right to a portion of its population of determining its own political
The establishment of a sovereign and independent State, the free association fate by plebiscite or by some other method, is, exclusively, an attribute of the
or integration with an independent State or the emergence into any other sovereignty of every State which is definitively constituted. A dispute between
political status freely determined by a people constitute modes of implementing two States concerning such a question, under normal conditions therefore,
the right of self-determination by that people. (Emphasis added) bears upon a question which International Law leaves entirely to the domestic
jurisdiction of one of the States concerned. Any other solution would amount
127. The international law principle of self-determination has evolved within a to an infringement of sovereign rights of a State and would involve the risk of
framework of respect for the territorial integrity of existing states. The various creating difficulties and a lack of stability which would not only be contrary to
international documents that support the existence of a people's right to self- the very idea embodied in term "State," but would also endanger the interests
of the international community. If this right is not possessed by a large or small clearly recognized the right of indigenous peoples to self-determination,
section of a nation, neither can it be held by the State to which the national encompassing the right to autonomy or self-government, to wit:
group wishes to be attached, nor by any other State. (Emphasis and
underscoring supplied) Article 3

The Committee held that the dispute concerning the Aaland Islands did not Indigenous peoples have the right to self-determination. By virtue of that right
refer to a question which is left by international law to the domestic jurisdiction they freely determine their political status and freely pursue their economic,
of Finland, thereby applying the exception rather than the rule elucidated social and cultural development.
above. Its ground for departing from the general rule, however, was a very
narrow one, namely, the Aaland Islands agitation originated at a time when Article 4
Finland was undergoing drastic political transformation. The internal situation
of Finland was, according to the Committee, so abnormal that, for a Indigenous peoples, in exercising their right to self-determination, have the
considerable time, the conditions required for the formation of a sovereign right to autonomy or self-government in matters relating to their internal and
State did not exist. In the midst of revolution, anarchy, and civil war, the local affairs, as well as ways and means for financing their autonomous
legitimacy of the Finnish national government was disputed by a large section functions.
of the people, and it had, in fact, been chased from the capital and forcibly
prevented from carrying out its duties. The armed camps and the police were Article 5
divided into two opposing forces. In light of these circumstances, Finland was
not, during the relevant time period, a "definitively constituted" sovereign state. Indigenous peoples have the right to maintain and strengthen their distinct
The Committee, therefore, found that Finland did not possess the right to political, legal, economic, social and cultural institutions, while retaining their
withhold from a portion of its population the option to separate itself - a right right to participate fully, if they so choose, in the political, economic, social and
which sovereign nations generally have with respect to their own populations. cultural life of the State.

Turning now to the more specific category of indigenous peoples, this term has Self-government, as used in international legal discourse pertaining to
been used, in scholarship as well as international, regional, and state indigenous peoples, has been understood as equivalent to "internal self-
practices, to refer to groups with distinct cultures, histories, and connections determination."166 The extent of self-determination provided for in the UN
to land (spiritual and otherwise) that have been forcibly incorporated into a DRIP is more particularly defined in its subsequent articles, some of which are
larger governing society. These groups are regarded as "indigenous" since quoted hereunder:
they are the living descendants of pre-invasion inhabitants of lands now
dominated by others. Otherwise stated, indigenous peoples, nations, or Article 8
communities are culturally distinctive groups that find themselves engulfed by
settler societies born of the forces of empire and conquest.164 Examples of 1. Indigenous peoples and individuals have the right not to be subjected to
groups who have been regarded as indigenous peoples are the Maori of New forced assimilation or destruction of their culture.
Zealand and the aboriginal peoples of Canada.
2. States shall provide effective mechanisms for prevention of, and redress for:
As with the broader category of "peoples," indigenous peoples situated within
states do not have a general right to independence or secession from those (a) Any action which has the aim or effect of depriving them of their integrity
states under international law,165 but they do have rights amounting to what as distinct peoples, or of their cultural values or ethnic identities;
was discussed above as the right to internal self-determination.
(b) Any action which has the aim or effect of dispossessing them of their lands,
In a historic development last September 13, 2007, the UN General Assembly territories or resources;
adopted the United Nations Declaration on the Rights of Indigenous Peoples
(UN DRIP) through General Assembly Resolution 61/295. The vote was 143 (c) Any form of forced population transfer which has the aim or effect of
to 4, the Philippines being included among those in favor, and the four voting violating or undermining any of their rights;
against being Australia, Canada, New Zealand, and the U.S. The Declaration
(d) Any form of forced assimilation or integration;
1. Indigenous peoples have the right to determine and develop priorities and
(e) Any form of propaganda designed to promote or incite racial or ethnic strategies for the development or use of their lands or territories and other
discrimination directed against them. resources.

Article 21 2. States shall consult and cooperate in good faith with the indigenous peoples
concerned through their own representative institutions in order to obtain their
1. Indigenous peoples have the right, without discrimination, to the free and informed consent prior to the approval of any project affecting their
improvement of their economic and social conditions, including, inter alia, in lands or territories and other resources, particularly in connection with the
the areas of education, employment, vocational training and retraining, development, utilization or exploitation of mineral, water or other resources.
housing, sanitation, health and social security.
3. States shall provide effective mechanisms for just and fair redress for any
2. States shall take effective measures and, where appropriate, special such activities, and appropriate measures shall be taken to mitigate adverse
measures to ensure continuing improvement of their economic and social environmental, economic, social, cultural or spiritual impact.
conditions. Particular attention shall be paid to the rights and special needs of
indigenous elders, women, youth, children and persons with disabilities. Article 37

Article 26 1. Indigenous peoples have the right to the recognition, observance and
enforcement of treaties, agreements and other constructive arrangements
1. Indigenous peoples have the right to the lands, territories and resources concluded with States or their successors and to have States honour and
which they have traditionally owned, occupied or otherwise used or acquired. respect such treaties, agreements and other constructive arrangements.

2. Indigenous peoples have the right to own, use, develop and control the 2. Nothing in this Declaration may be interpreted as diminishing or eliminating
lands, territories and resources that they possess by reason of traditional the rights of indigenous peoples contained in treaties, agreements and other
ownership or other traditional occupation or use, as well as those which they constructive arrangements.
have otherwise acquired.
Article 38
3. States shall give legal recognition and protection to these lands, territories
and resources. Such recognition shall be conducted with due respect to the States in consultation and cooperation with indigenous peoples, shall take the
customs, traditions and land tenure systems of the indigenous peoples appropriate measures, including legislative measures, to achieve the ends of
concerned. this Declaration.

Article 30 Assuming that the UN DRIP, like the Universal Declaration on Human Rights,
must now be regarded as embodying customary international law - a question
1. Military activities shall not take place in the lands or territories of indigenous which the Court need not definitively resolve here - the obligations enumerated
peoples, unless justified by a relevant public interest or otherwise freely agreed therein do not strictly require the Republic to grant the Bangsamoro people,
with or requested by the indigenous peoples concerned. through the instrumentality of the BJE, the particular rights and powers
provided for in the MOA-AD. Even the more specific provisions of the UN DRIP
2. States shall undertake effective consultations with the indigenous peoples are general in scope, allowing for flexibility in its application by the different
concerned, through appropriate procedures and in particular through their States.
representative institutions, prior to using their lands or territories for military
activities. There is, for instance, no requirement in the UN DRIP that States now
guarantee indigenous peoples their own police and internal security force.
Article 32 Indeed, Article 8 presupposes that it is the State which will provide protection
for indigenous peoples against acts like the forced dispossession of their lands
- a function that is normally performed by police officers. If the protection of a
right so essential to indigenous people's identity is acknowledged to be the
responsibility of the State, then surely the protection of rights less significant provision now under consideration or anywhere else in the MOA-AD, the term
to them as such peoples would also be the duty of States. Nor is there in the "legal framework" is certainly broad enough to include the Constitution.
UN DRIP an acknowledgement of the right of indigenous peoples to the aerial
domain and atmospheric space. What it upholds, in Article 26 thereof, is the Notwithstanding the suspensive clause, however, respondents, by their mere
right of indigenous peoples to the lands, territories and resources which they act of incorporating in the MOA-AD the provisions thereof regarding the
have traditionally owned, occupied or otherwise used or acquired. associative relationship between the BJE and the Central Government, have
already violated the Memorandum of Instructions From The President dated
Moreover, the UN DRIP, while upholding the right of indigenous peoples to March 1, 2001, which states that the "negotiations shall be conducted in
autonomy, does not obligate States to grant indigenous peoples the near- accordance with x x x the principles of the sovereignty and territorial integrity
independent status of an associated state. All the rights recognized in that of the Republic of the Philippines." (Emphasis supplied) Establishing an
document are qualified in Article 46 as follows: associative relationship between the BJE and the Central Government is, for
the reasons already discussed, a preparation for independence, or worse, an
1. Nothing in this Declaration may be interpreted as implying for any State, implicit acknowledgment of an independent status already prevailing.
people, group or person any right to engage in any activity or to perform any
act contrary to the Charter of the United Nations or construed as authorizing Even apart from the above-mentioned Memorandum, however, the MOA-AD
or encouraging any action which would dismember or impair, totally or in part, is defective because the suspensive clause is invalid, as discussed below.
the territorial integrity or political unity of sovereign and independent States.
The authority of the GRP Peace Negotiating Panel to negotiate with the MILF
Even if the UN DRIP were considered as part of the law of the land pursuant is founded on E.O. No. 3, Section 5(c), which states that there shall be
to Article II, Section 2 of the Constitution, it would not suffice to uphold the established Government Peace Negotiating Panels for negotiations with
validity of the MOA-AD so as to render its compliance with other laws different rebel groups to be "appointed by the President as her official
unnecessary. emissaries to conduct negotiations, dialogues, and face-to-face discussions
with rebel groups." These negotiating panels are to report to the President,
It is, therefore, clear that the MOA-AD contains numerous provisions that through the PAPP on the conduct and progress of the negotiations.
cannot be reconciled with the Constitution and the laws as presently worded.
Respondents proffer, however, that the signing of the MOA-AD alone would It bears noting that the GRP Peace Panel, in exploring lasting solutions to the
not have entailed any violation of law or grave abuse of discretion on their part, Moro Problem through its negotiations with the MILF, was not restricted by
precisely because it stipulates that the provisions thereof inconsistent with the E.O. No. 3 only to those options available under the laws as they presently
laws shall not take effect until these laws are amended. They cite paragraph 7 stand. One of the components of a comprehensive peace process, which E.O.
of the MOA-AD strand on GOVERNANCE quoted earlier, but which is No. 3 collectively refers to as the "Paths to Peace," is the pursuit of social,
reproduced below for convenience: economic, and political reforms which may require new legislation or even
constitutional amendments. Sec. 4(a) of E.O. No. 3, which reiterates Section
7. The Parties agree that the mechanisms and modalities for the actual 3(a), of E.O. No. 125,167 states:
implementation of this MOA-AD shall be spelt out in the Comprehensive
Compact to mutually take such steps to enable it to occur effectively. SECTION 4. The Six Paths to Peace. - The components of the comprehensive
peace process comprise the processes known as the "Paths to Peace". These
Any provisions of the MOA-AD requiring amendments to the existing legal component processes are interrelated and not mutually exclusive, and must
framework shall come into force upon signing of a Comprehensive Compact therefore be pursued simultaneously in a coordinated and integrated fashion.
and upon effecting the necessary changes to the legal framework with due They shall include, but may not be limited to, the following:
regard to non derogation of prior agreements and within the stipulated
timeframe to be contained in the Comprehensive Compact. a. PURSUIT OF SOCIAL, ECONOMIC AND POLITICAL REFORMS. This
component involves the vigorous implementation of various policies, reforms,
Indeed, the foregoing stipulation keeps many controversial provisions of the programs and projects aimed at addressing the root causes of internal armed
MOA-AD from coming into force until the necessary changes to the legal conflicts and social unrest. This may require administrative action, new
framework are effected. While the word "Constitution" is not mentioned in the legislation or even constitutional amendments.
x x x x (Emphasis supplied) from her Commander-in-Chief powers. x x x (Emphasis and underscoring
supplied)
The MOA-AD, therefore, may reasonably be perceived as an attempt of
respondents to address, pursuant to this provision of E.O. No. 3, the root Similarly, the President's power to conduct peace negotiations is implicitly
causes of the armed conflict in Mindanao. The E.O. authorized them to "think included in her powers as Chief Executive and Commander-in-Chief. As Chief
outside the box," so to speak. Hence, they negotiated and were set on signing Executive, the President has the general responsibility to promote public
the MOA-AD that included various social, economic, and political reforms peace, and as Commander-in-Chief, she has the more specific duty to prevent
which cannot, however, all be accommodated within the present legal and suppress rebellion and lawless violence.169
framework, and which thus would require new legislation and constitutional
amendments. As the experience of nations which have similarly gone through internal armed
conflict will show, however, peace is rarely attained by simply pursuing a
The inquiry on the legality of the "suspensive clause," however, cannot stop military solution. Oftentimes, changes as far-reaching as a fundamental
here, because it must be asked whether the President herself may exercise reconfiguration of the nation's constitutional structure is required. The
the power delegated to the GRP Peace Panel under E.O. No. 3, Sec. 4(a). observations of Dr. Kirsti Samuels are enlightening, to wit:

The President cannot delegate a power that she herself does not possess. x x x [T]he fact remains that a successful political and governance transition
May the President, in the course of peace negotiations, agree to pursue must form the core of any post-conflict peace-building mission. As we have
reforms that would require new legislation and constitutional amendments, or observed in Liberia and Haiti over the last ten years, conflict cessation without
should the reforms be restricted only to those solutions which the present laws modification of the political environment, even where state-building is
allow? The answer to this question requires a discussion of the extent of the undertaken through technical electoral assistance and institution- or capacity-
President's power to conduct peace negotiations. building, is unlikely to succeed. On average, more than 50 percent of states
emerging from conflict return to conflict. Moreover, a substantial proportion of
That the authority of the President to conduct peace negotiations with rebel transitions have resulted in weak or limited democracies.
groups is not explicitly mentioned in the Constitution does not mean that she
has no such authority. In Sanlakas v. Executive Secretary,168 in issue was The design of a constitution and its constitution-making process can play an
the authority of the President to declare a state of rebellion - an authority which important role in the political and governance transition. Constitution-making
is not expressly provided for in the Constitution. The Court held thus: after conflict is an opportunity to create a common vision of the future of a state
and a road map on how to get there. The constitution can be partly a peace
"In her ponencia in Marcos v. Manglapus, Justice Cortes put her thesis into agreement and partly a framework setting up the rules by which the new
jurisprudence. There, the Court, by a slim 8-7 margin, upheld the President's democracy will operate.170
power to forbid the return of her exiled predecessor. The rationale for the
majority's ruling rested on the President's In the same vein, Professor Christine Bell, in her article on the nature and legal
status of peace agreements, observed that the typical way that peace
. . . unstated residual powers which are implied from the grant of executive agreements establish or confirm mechanisms for demilitarization and
power and which are necessary for her to comply with her duties under the demobilization is by linking them to new constitutional structures addressing
Constitution. The powers of the President are not limited to what are expressly governance, elections, and legal and human rights institutions.171
enumerated in the article on the Executive Department and in scattered
provisions of the Constitution. This is so, notwithstanding the avowed intent of In the Philippine experience, the link between peace agreements and
the members of the Constitutional Commission of 1986 to limit the powers of constitution-making has been recognized by no less than the framers of the
the President as a reaction to the abuses under the regime of Mr. Marcos, for Constitution. Behind the provisions of the Constitution on autonomous
the result was a limitation of specific powers of the President, particularly those regions172 is the framers' intention to implement a particular peace
relating to the commander-in-chief clause, but not a diminution of the general agreement, namely, the Tripoli Agreement of 1976 between the GRP and the
grant of executive power. MNLF, signed by then Undersecretary of National Defense Carmelo Z.
Barbero and then MNLF Chairman Nur Misuari.
Thus, the President's authority to declare a state of rebellion springs in the
main from her powers as chief executive and, at the same time, draws strength
MR. ROMULO. There are other speakers; so, although I have some more a referendum, bypassing the interim National Assembly which was the body
questions, I will reserve my right to ask them if they are not covered by the vested by the 1973 Constitution with the power to propose such amendments.
other speakers. I have only two questions. President Marcos, it will be recalled, never convened the interim National
Assembly. The majority upheld the President's act, holding that "the urges of
I heard one of the Commissioners say that local autonomy already exists in absolute necessity" compelled the President as the agent of the people to act
the Muslim region; it is working very well; it has, in fact, diminished a great deal as he did, there being no interim National Assembly to propose constitutional
of the problems. So, my question is: since that already exists, why do we have amendments. Against this ruling, Justices Teehankee and Muoz Palma
to go into something new? vigorously dissented. The Court's concern at present, however, is not with
regard to the point on which it was then divided in that controversial case, but
MR. OPLE. May I answer that on behalf of Chairman Nolledo. Commissioner on that which was not disputed by either side.
Yusup Abubakar is right that certain definite steps have been taken to
implement the provisions of the Tripoli Agreement with respect to an Justice Teehankee's dissent,175 in particular, bears noting. While he
autonomous region in Mindanao. This is a good first step, but there is no disagreed that the President may directly submit proposed constitutional
question that this is merely a partial response to the Tripoli Agreement itself amendments to a referendum, implicit in his opinion is a recognition that he
and to the fuller standard of regional autonomy contemplated in that would have upheld the President's action along with the majority had the
agreement, and now by state policy.173(Emphasis supplied) President convened the interim National Assembly and coursed his proposals
through it. Thus Justice Teehankee opined:
The constitutional provisions on autonomy and the statutes enacted pursuant
to them have, to the credit of their drafters, been partly successful. "Since the Constitution provides for the organization of the essential
Nonetheless, the Filipino people are still faced with the reality of an on-going departments of government, defines and delimits the powers of each and
conflict between the Government and the MILF. If the President is to be prescribes the manner of the exercise of such powers, and the constituent
expected to find means for bringing this conflict to an end and to achieve power has not been granted to but has been withheld from the President or
lasting peace in Mindanao, then she must be given the leeway to explore, in Prime Minister, it follows that the President's questioned decrees proposing
the course of peace negotiations, solutions that may require changes to the and submitting constitutional amendments directly to the people (without the
Constitution for their implementation. Being uniquely vested with the power to intervention of the interim National Assembly in whom the power is expressly
conduct peace negotiations with rebel groups, the President is in a singular vested) are devoid of constitutional and legal basis."176 (Emphasis supplied)
position to know the precise nature of their grievances which, if resolved, may
bring an end to hostilities. From the foregoing discussion, the principle may be inferred that the President
- in the course of conducting peace negotiations - may validly consider
The President may not, of course, unilaterally implement the solutions that she implementing even those policies that require changes to the Constitution, but
considers viable, but she may not be prevented from submitting them as she may not unilaterally implement them without the intervention of Congress,
recommendations to Congress, which could then, if it is minded, act upon them or act in any way as if the assent of that body were assumed as a certainty.
pursuant to the legal procedures for constitutional amendment and revision. In
particular, Congress would have the option, pursuant to Article XVII, Sections Since, under the present Constitution, the people also have the power to
1 and 3 of the Constitution, to propose the recommended amendments or directly propose amendments through initiative and referendum, the President
revision to the people, call a constitutional convention, or submit to the may also submit her recommendations to the people, not as a formal proposal
electorate the question of calling such a convention. to be voted on in a plebiscite similar to what President Marcos did in Sanidad,
but for their independent consideration of whether these recommendations
While the President does not possess constituent powers - as those powers merit being formally proposed through initiative.
may be exercised only by Congress, a Constitutional Convention, or the
people through initiative and referendum - she may submit proposals for These recommendations, however, may amount to nothing more than the
constitutional change to Congress in a manner that does not involve the President's suggestions to the people, for any further involvement in the
arrogation of constituent powers. process of initiative by the Chief Executive may vitiate its character as a
genuine "people's initiative." The only initiative recognized by the Constitution
In Sanidad v. COMELEC,174 in issue was the legality of then President is that which truly proceeds from the people. As the Court stated in Lambino
Marcos' act of directly submitting proposals for constitutional amendments to v. COMELEC:177
when. That there is no uncertainty being contemplated is plain from what
"The Lambino Group claims that their initiative is the people's voice.' However, follows, for the paragraph goes on to state that the contemplated changes shall
the Lambino Group unabashedly states in ULAP Resolution No. 2006-02, in be "with due regard to non derogation of prior agreements and within the
the verification of their petition with the COMELEC, that ULAP maintains its stipulated timeframe to be contained in the Comprehensive Compact."
unqualified support to the agenda of Her Excellency President Gloria
Macapagal-Arroyo for constitutional reforms.' The Lambino Group thus admits Pursuant to this stipulation, therefore, it is mandatory for the GRP to effect the
that their people's' initiative is an unqualified support to the agenda' of the changes to the legal framework contemplated in the MOA-AD - which changes
incumbent President to change the Constitution. This forewarns the Court to would include constitutional amendments, as discussed earlier. It bears noting
be wary of incantations of people's voice' or sovereign will' in the present that,
initiative."
By the time these changes are put in place, the MOA-AD itself would be
It will be observed that the President has authority, as stated in her oath of counted among the "prior agreements" from which there could be no
office,178 only to preserve and defend the Constitution. Such presidential derogation.
power does not, however, extend to allowing her to change the Constitution,
but simply to recommend proposed amendments or revision. As long as she What remains for discussion in the Comprehensive Compact would merely be
limits herself to recommending these changes and submits to the proper the implementing details for these "consensus points" and, notably, the
procedure for constitutional amendments and revision, her mere deadline for effecting the contemplated changes to the legal framework.
recommendation need not be construed as an unconstitutional act.
Plainly, stipulation-paragraph 7 on GOVERNANCE is inconsistent with the
The foregoing discussion focused on the President's authority to propose limits of the President's authority to propose constitutional amendments, it
constitutional amendments, since her authority to propose new legislation is being a virtual guarantee that the Constitution and the laws of the Republic of
not in controversy. It has been an accepted practice for Presidents in this the Philippines will certainly be adjusted to conform to all the "consensus
jurisdiction to propose new legislation. One of the more prominent instances points" found in the MOA-AD. Hence, it must be struck down as
the practice is usually done is in the yearly State of the Nation Address of the unconstitutional.
President to Congress. Moreover, the annual general appropriations bill has
always been based on the budget prepared by the President, which - for all A comparison between the "suspensive clause" of the MOA-AD with a similar
intents and purposes - is a proposal for new legislation coming from the provision appearing in the 1996 final peace agreement between the MNLF and
President.179 the GRP is most instructive.

The "suspensive clause" in the MOA-AD viewed in light of the above- As a backdrop, the parties to the 1996 Agreement stipulated that it would be
discussed standards implemented in two phases. Phase I covered a three-year transitional period
involving the putting up of new administrative structures through Executive
Given the limited nature of the President's authority to propose constitutional Order, such as the Special Zone of Peace and Development (SZOPAD) and
amendments, she cannot guarantee to any third party that the required the Southern Philippines Council for Peace and Development (SPCPD), while
amendments will eventually be put in place, nor even be submitted to a Phase II covered the establishment of the new regional autonomous
plebiscite. The most she could do is submit these proposals as government through amendment or repeal of R.A. No. 6734, which was then
recommendations either to Congress or the people, in whom constituent the Organic Act of the ARMM.
powers are vested.
The stipulations on Phase II consisted of specific agreements on the structure
Paragraph 7 on Governance of the MOA-AD states, however, that all of the expanded autonomous region envisioned by the parties. To that extent,
provisions thereof which cannot be reconciled with the present Constitution they are similar to the provisions of the MOA-AD. There is, however, a crucial
and laws "shall come into force upon signing of a Comprehensive Compact difference between the two agreements. While the MOA-AD virtually
and upon effecting the necessary changes to the legal framework." This guarantees that the "necessary changes to the legal framework" will be put in
stipulation does not bear the marks of a suspensive condition - defined in civil place, the GRP-MNLF final peace agreement states thus: "Accordingly, these
law as a future and uncertain event - but of a term. It is not a question of provisions [on Phase II] shall be recommended by the GRP to Congress for
whether the necessary changes to the legal framework will be effected, but incorporation in the amendatory or repealing law."
Special Court held, it is ineffective in depriving an international court like it of
Concerns have been raised that the MOA-AD would have given rise to a jurisdiction.
binding international law obligation on the part of the Philippines to change its
Constitution in conformity thereto, on the ground that it may be considered "37. In regard to the nature of a negotiated settlement of an internal armed
either as a binding agreement under international law, or a unilateral conflict it is easy to assume and to argue with some degree of plausibility, as
declaration of the Philippine government to the international community that it Defence counsel for the defendants seem to have done, that the mere fact that
would grant to the Bangsamoro people all the concessions therein stated. in addition to the parties to the conflict, the document formalizing the
Neither ground finds sufficient support in international law, however. settlement is signed by foreign heads of state or their representatives and
representatives of international organizations, means the agreement of the
The MOA-AD, as earlier mentioned in the overview thereof, would have parties is internationalized so as to create obligations in international law.
included foreign dignitaries as signatories. In addition, representatives of other
nations were invited to witness its signing in Kuala Lumpur. These xxxx
circumstances readily lead one to surmise that the MOA-AD would have had
the status of a binding international agreement had it been signed. An 40. Almost every conflict resolution will involve the parties to the conflict and
examination of the prevailing principles in international law, however, leads to the mediator or facilitator of the settlement, or persons or bodies under whose
the contrary conclusion. auspices the settlement took place but who are not at all parties to the conflict,
are not contracting parties and who do not claim any obligation from the
The Decision on Challenge to Jurisdiction: Lom Accord Amnesty180 (the contracting parties or incur any obligation from the settlement.
Lom Accord case) of the Special Court of Sierra Leone is enlightening. The
Lom Accord was a peace agreement signed on July 7, 1999 between the 41. In this case, the parties to the conflict are the lawful authority of the State
Government of Sierra Leone and the Revolutionary United Front (RUF), a and the RUF which has no status of statehood and is to all intents and
rebel group with which the Sierra Leone Government had been in armed purposes a faction within the state. The non-contracting signatories of the
conflict for around eight years at the time of signing. There were non- Lom Agreement were moral guarantors of the principle that, in the terms of
contracting signatories to the agreement, among which were the Government Article XXXIV of the Agreement, "this peace agreement is implemented with
of the Togolese Republic, the Economic Community of West African States, integrity and in good faith by both parties". The moral guarantors assumed no
and the UN. legal obligation. It is recalled that the UN by its representative appended,
presumably for avoidance of doubt, an understanding of the extent of the
On January 16, 2002, after a successful negotiation between the UN agreement to be implemented as not including certain international crimes.
Secretary-General and the Sierra Leone Government, another agreement was
entered into by the UN and that Government whereby the Special Court of 42. An international agreement in the nature of a treaty must create rights and
Sierra Leone was established. The sole purpose of the Special Court, an obligations regulated by international law so that a breach of its terms will be
international court, was to try persons who bore the greatest responsibility for a breach determined under international law which will also provide principle
serious violations of international humanitarian law and Sierra Leonean law means of enforcement. The Lom Agreement created neither rights nor
committed in the territory of Sierra Leone since November 30, 1996. obligations capable of being regulated by international law. An agreement such
as the Lom Agreement which brings to an end an internal armed conflict no
Among the stipulations of the Lom Accord was a provision for the full pardon doubt creates a factual situation of restoration of peace that the international
of the members of the RUF with respect to anything done by them in pursuit community acting through the Security Council may take note of. That,
of their objectives as members of that organization since the conflict began. however, will not convert it to an international agreement which creates an
obligation enforceable in international, as distinguished from municipal, law. A
In the Lom Accord case, the Defence argued that the Accord created an breach of the terms of such a peace agreement resulting in resumption of
internationally binding obligation not to prosecute the beneficiaries of the internal armed conflict or creating a threat to peace in the determination of the
amnesty provided therein, citing, among other things, the participation of Security Council may indicate a reversal of the factual situation of peace to be
foreign dignitaries and international organizations in the finalization of that visited with possible legal consequences arising from the new situation of
agreement. The Special Court, however, rejected this argument, ruling that the conflict created. Such consequences such as action by the Security Council
Lome Accord is not a treaty and that it can only create binding obligations and pursuant to Chapter VII arise from the situation and not from the agreement,
rights between the parties in municipal law, not in international law. Hence, the nor from the obligation imposed by it. Such action cannot be regarded as a
remedy for the breach. A peace agreement which settles an internal armed 44. Of course, not all unilateral acts imply obligation; but a State may choose
conflict cannot be ascribed the same status as one which settles an to take up a certain position in relation to a particular matter with the intention
international armed conflict which, essentially, must be between two or more of being bound-the intention is to be ascertained by interpretation of the act.
warring States. The Lom Agreement cannot be characterised as an When States make statements by which their freedom of action is to be limited,
international instrument. x x x" (Emphasis, italics and underscoring supplied) a restrictive interpretation is called for.

Similarly, that the MOA-AD would have been signed by representatives of xxxx
States and international organizations not parties to the Agreement would not
have sufficed to vest in it a binding character under international law. 51. In announcing that the 1974 series of atmospheric tests would be the last,
the French Government conveyed to the world at large, including the
In another vein, concern has been raised that the MOA-AD would amount to a Applicant, its intention effectively to terminate these tests. It was bound to
unilateral declaration of the Philippine State, binding under international law, assume that other States might take note of these statements and rely on their
that it would comply with all the stipulations stated therein, with the result that being effective. The validity of these statements and their legal consequences
it would have to amend its Constitution accordingly regardless of the true will must be considered within the general framework of the security of
of the people. Cited as authority for this view is Australia v. France,181 also international intercourse, and the confidence and trust which are so essential
known as the Nuclear Tests Case, decided by the International Court of Justice in the relations among States. It is from the actual substance of these
(ICJ). statements, and from the circumstances attending their making, that the legal
implications of the unilateral act must be deduced. The objects of these
In the Nuclear Tests Case, Australia challenged before the ICJ the legality of statements are clear and they were addressed to the international community
France's nuclear tests in the South Pacific. France refused to appear in the as a whole, and the Court holds that they constitute an undertaking possessing
case, but public statements from its President, and similar statements from legal effect. The Court considers *270 that the President of the Republic, in
other French officials including its Minister of Defence, that its 1974 series of deciding upon the effective cessation of atmospheric tests, gave an
atmospheric tests would be its last, persuaded the ICJ to dismiss the case.182 undertaking to the international community to which his words were
Those statements, the ICJ held, amounted to a legal undertaking addressed addressed. x x x (Emphasis and underscoring supplied)
to the international community, which required no acceptance from other
States for it to become effective. As gathered from the above-quoted ruling of the ICJ, public statements of a
state representative may be construed as a unilateral declaration only when
Essential to the ICJ ruling is its finding that the French government intended the following conditions are present: the statements were clearly addressed to
to be bound to the international community in issuing its public statements, viz: the international community, the state intended to be bound to that community
by its statements, and that not to give legal effect to those statements would
43. It is well recognized that declarations made by way of unilateral acts, be detrimental to the security of international intercourse. Plainly, unilateral
concerning legal or factual situations, may have the effect of creating legal declarations arise only in peculiar circumstances.
obligations. Declarations of this kind may be, and often are, very specific.
When it is the intention of the State making the declaration that it should The limited applicability of the Nuclear Tests Case ruling was recognized in a
become bound according to its terms, that intention confers on the declaration later case decided by the ICJ entitled Burkina Faso v. Mali,183 also known as
the character of a legal undertaking, the State being thenceforth legally the Case Concerning the Frontier Dispute. The public declaration subject of
required to follow a course of conduct consistent with the declaration. An that case was a statement made by the President of Mali, in an interview by a
undertaking of this kind, if given publicly, and with an intent to be bound, even foreign press agency, that Mali would abide by the decision to be issued by a
though not made within the context of international negotiations, is binding. In commission of the Organization of African Unity on a frontier dispute then
these circumstances, nothing in the nature of a quid pro quo nor any pending between Mali and Burkina Faso.
subsequent acceptance of the declaration, nor even any reply or reaction from
other States, is required for the declaration to take effect, since such a Unlike in the Nuclear Tests Case, the ICJ held that the statement of Mali's
requirement would be inconsistent with the strictly unilateral nature of the President was not a unilateral act with legal implications. It clarified that its
juridical act by which the pronouncement by the State was made. ruling in the Nuclear Tests case rested on the peculiar circumstances
surrounding the French declaration subject thereof, to wit:
40. In order to assess the intentions of the author of a unilateral act, account about by the inclusion in the MOA-AD of a clear commitment to be legally
must be taken of all the factual circumstances in which the act occurred. For bound to the international community, not just the MILF, and by an equally
example, in the Nuclear Tests cases, the Court took the view that since the clear indication that the signatures of the participating states-representatives
applicant States were not the only ones concerned at the possible continuance would constitute an acceptance of that commitment. Entering into such a
of atmospheric testing by the French Government, that Government's formal agreement would not have resulted in a loss of face for the Philippine
unilateral declarations had conveyed to the world at large, including the government before the international community, which was one of the
Applicant, its intention effectively to terminate these tests (I.C.J. Reports 1974, difficulties that prevented the French Government from entering into a formal
p. 269, para. 51; p. 474, para. 53). In the particular circumstances of those agreement with other countries. That the Philippine panel did not enter into
cases, the French Government could not express an intention to be bound such a formal agreement suggests that it had no intention to be bound to the
otherwise than by unilateral declarations. It is difficult to see how it could have international community. On that ground, the MOA-AD may not be considered
accepted the terms of a negotiated solution with each of the applicants without a unilateral declaration under international law.
thereby jeopardizing its contention that its conduct was lawful. The
circumstances of the present case are radically different. Here, there was The MOA-AD not being a document that can bind the Philippines under
nothing to hinder the Parties from manifesting an intention to accept the international law notwithstanding, respondents' almost consummated act of
binding character of the conclusions of the Organization of African Unity guaranteeing amendments to the legal framework is, by itself, sufficient to
Mediation Commission by the normal method: a formal agreement on the basis constitute grave abuse of discretion. The grave abuse lies not in the fact that
of reciprocity. Since no agreement of this kind was concluded between the they considered, as a solution to the Moro Problem, the creation of a state
Parties, the Chamber finds that there are no grounds to interpret the within a state, but in their brazen willingness to guarantee that Congress and
declaration made by Mali's head of State on 11 April 1975 as a unilateral act the sovereign Filipino people would give their imprimatur to their solution.
with legal implications in regard to the present case. (Emphasis and Upholding such an act would amount to authorizing a usurpation of the
underscoring supplied) constituent powers vested only in Congress, a Constitutional Convention, or
the people themselves through the process of initiative, for the only way that
Assessing the MOA-AD in light of the above criteria, it would not have the Executive can ensure the outcome of the amendment process is through
amounted to a unilateral declaration on the part of the Philippine State to the an undue influence or interference with that process.
international community. The Philippine panel did not draft the same with the
clear intention of being bound thereby to the international community as a The sovereign people may, if it so desired, go to the extent of giving up a
whole or to any State, but only to the MILF. While there were States and portion of its own territory to the Moros for the sake of peace, for it can change
international organizations involved, one way or another, in the negotiation and the Constitution in any it wants, so long as the change is not inconsistent with
projected signing of the MOA-AD, they participated merely as witnesses or, in what, in international law, is known as Jus Cogens.184 Respondents,
the case of Malaysia, as facilitator. As held in the Lom Accord case, the mere however, may not preempt it in that decision.
fact that in addition to the parties to the conflict, the peace settlement is signed
by representatives of states and international organizations does not mean SUMMARY
that the agreement is internationalized so as to create obligations in
international law. The petitions are ripe for adjudication. The failure of respondents to consult
the local government units or communities affected constitutes a departure by
Since the commitments in the MOA-AD were not addressed to States, not to respondents from their mandate under E.O. No. 3. Moreover, respondents
give legal effect to such commitments would not be detrimental to the security exceeded their authority by the mere act of guaranteeing amendments to the
of international intercourse - to the trust and confidence essential in the Constitution. Any alleged violation of the Constitution by any branch of
relations among States. government is a proper matter for judicial review.

In one important respect, the circumstances surrounding the MOA-AD are As the petitions involve constitutional issues which are of paramount public
closer to that of Burkina Faso wherein, as already discussed, the Mali interest or of transcendental importance, the Court grants the petitioners,
President's statement was not held to be a binding unilateral declaration by petitioners-in-intervention and intervening respondents the requisite locus
the ICJ. As in that case, there was also nothing to hinder the Philippine panel, standi in keeping with the liberal stance adopted in David v. Macapagal-Arroyo.
had it really been its intention to be bound to other States, to manifest that
intention by formal agreement. Here, that formal agreement would have come
Contrary to the assertion of respondents that the non-signing of the MOA-AD One, E.O. No. 3 itself is replete with mechanics for continuing consultations on
and the eventual dissolution of the GRP Peace Panel mooted the present both national and local levels and for a principal forum for consensus-building.
petitions, the Court finds that the present petitions provide an exception to the In fact, it is the duty of the Presidential Adviser on the Peace Process to
"moot and academic" principle in view of (a) the grave violation of the conduct regular dialogues to seek relevant information, comments, advice, and
Constitution involved; (b) the exceptional character of the situation and recommendations from peace partners and concerned sectors of society.
paramount public interest; (c) the need to formulate controlling principles to
guide the bench, the bar, and the public; and (d) the fact that the case is Two, Republic Act No. 7160 or the Local Government Code of 1991 requires
capable of repetition yet evading review. all national offices to conduct consultations before any project or program
critical to the environment and human ecology including those that may call for
The MOA-AD is a significant part of a series of agreements necessary to carry the eviction of a particular group of people residing in such locality, is
out the GRP-MILF Tripoli Agreement on Peace signed by the government and implemented therein. The MOA-AD is one peculiar program that unequivocally
the MILF back in June 2001. Hence, the present MOA-AD can be renegotiated and unilaterally vests ownership of a vast territory to the Bangsamoro people,
or another one drawn up that could contain similar or significantly dissimilar which could pervasively and drastically result to the diaspora or displacement
provisions compared to the original. of a great number of inhabitants from their total environment.

The Court, however, finds that the prayers for mandamus have been rendered Three, Republic Act No. 8371 or the Indigenous Peoples Rights Act of 1997
moot in view of the respondents' action in providing the Court and the provides for clear-cut procedure for the recognition and delineation of ancestral
petitioners with the official copy of the final draft of the MOA-AD and its domain, which entails, among other things, the observance of the free and
annexes. prior informed consent of the Indigenous Cultural Communities/Indigenous
Peoples. Notably, the statute does not grant the Executive Department or any
The people's right to information on matters of public concern under Sec. 7, government agency the power to delineate and recognize an ancestral domain
Article III of the Constitution is in splendid symmetry with the state policy of full claim by mere agreement or compromise.
public disclosure of all its transactions involving public interest under Sec. 28,
Article II of the Constitution. The right to information guarantees the right of the The invocation of the doctrine of executive privilege as a defense to the
people to demand information, while Section 28 recognizes the duty of general right to information or the specific right to consultation is untenable.
officialdom to give information even if nobody demands. The complete and The various explicit legal provisions fly in the face of executive secrecy. In any
effective exercise of the right to information necessitates that its event, respondents effectively waived such defense after it unconditionally
complementary provision on public disclosure derive the same self-executory disclosed the official copies of the final draft of the MOA-AD, for judicial
nature, subject only to reasonable safeguards or limitations as may be compliance and public scrutiny.
provided by law.
In sum, the Presidential Adviser on the Peace Process committed grave abuse
The contents of the MOA-AD is a matter of paramount public concern involving of discretion when he failed to carry out the pertinent consultation process, as
public interest in the highest order. In declaring that the right to information mandated by E.O. No. 3, Republic Act No. 7160, and Republic Act No. 8371.
contemplates steps and negotiations leading to the consummation of the The furtive process by which the MOA-AD was designed and crafted runs
contract, jurisprudence finds no distinction as to the executory nature or contrary to and in excess of the legal authority, and amounts to a whimsical,
commercial character of the agreement. capricious, oppressive, arbitrary and despotic exercise thereof. It illustrates a
gross evasion of positive duty and a virtual refusal to perform the duty enjoined.
An essential element of these twin freedoms is to keep a continuing dialogue
or process of communication between the government and the people. The MOA-AD cannot be reconciled with the present Constitution and laws. Not
Corollary to these twin rights is the design for feedback mechanisms. The right only its specific provisions but the very concept underlying them, namely, the
to public consultation was envisioned to be a species of these public rights. associative relationship envisioned between the GRP and the BJE, are
unconstitutional, for the concept presupposes that the associated entity is a
At least three pertinent laws animate these constitutional imperatives and state and implies that the same is on its way to independence.
justify the exercise of the people's right to be consulted on relevant matters
relating to the peace agenda. While there is a clause in the MOA-AD stating that the provisions thereof
inconsistent with the present legal framework will not be effective until that
framework is amended, the same does not cure its defect. The inclusion of
provisions in the MOA-AD establishing an associative relationship between the
BJE and the Central Government is, itself, a violation of the Memorandum of PARAS, J.:
Instructions From The President dated March 1, 2001, addressed to the
government peace panel. Moreover, as the clause is worded, it virtually A TV ad proudly announces:
guarantees that the necessary amendments to the Constitution and the laws
will eventually be put in place. Neither the GRP Peace Panel nor the President "The new PAGCOR responding through responsible gaming."
herself is authorized to make such a guarantee. Upholding such an act would
amount to authorizing a usurpation of the constituent powers vested only in But the petitioners think otherwise, that is why, they filed the instant petition
Congress, a Constitutional Convention, or the people themselves through the seeking to annul the Philippine Amusement and Gaming Corporation
process of initiative, for the only way that the Executive can ensure the (PAGCOR) Charter PD 1869, because it is allegedly contrary to morals,
outcome of the amendment process is through an undue influence or public policy and order, and because
interference with that process.
A. It constitutes a waiver of a right prejudicial to a third person with a right
While the MOA-AD would not amount to an international agreement or recognized by law. It waived the Manila City government's right to impose
unilateral declaration binding on the Philippines under international law, taxes and license fees, which is recognized by law;
respondents' act of guaranteeing amendments is, by itself, already a
constitutional violation that renders the MOA-AD fatally defective. B. For the same reason stated in the immediately preceding paragraph,
the law has intruded into the local government's right to impose local taxes and
WHEREFORE, respondents' motion to dismiss is DENIED. The main and license fees. This, in contravention of the constitutionally enshrined principle
intervening petitions are GIVEN DUE COURSE and hereby GRANTED. of local autonomy;

The Memorandum of Agreement on the Ancestral Domain Aspect of the GRP- C. It violates the equal protection clause of the constitution in that it
MILF Tripoli Agreement on Peace of 2001 is declared contrary to law and the legalizes PAGCOR conducted gambling, while most other forms of
Constitution. gambling are outlawed, together with prostitution, drug trafficking and other
vices;
SO ORDERED.
D. It violates the avowed trend of the Cory government away from
monopolistic and crony economy, and toward free enterprise and privatization.
(p. 2, Amended Petition; p. 7, Rollo)
B. Principles of Local Autonomy
I. Principle of Local Authority In their Second Amended Petition, petitioners also claim that PD 1869 is
contrary to the declared national policy of the "new restored democracy" and
1. Basco v. PAGCOR the people's will as expressed in the 1987 Constitution. The decree is said to
have a "gambling objective" and therefore is contrary to Sections 11, 12 and
G.R. No. 91649 May 14, 1991 13 of Article II, Sec. 1 of Article VIII and Section 3 (2) of Article XIV, of the
present Constitution (p. 3, Second Amended Petition; p. 21, Rollo).
ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES
MARANAN AND LORENZO SANCHEZ, petitioners, The procedural issue is whether petitioners, as taxpayers and practicing
vs. lawyers (petitioner Basco being also the Chairman of the Committee on Laws
PHILIPPINE AMUSEMENTS AND GAMING CORPORATION (PAGCOR), of the City Council of Manila), can question and seek the annulment of PD
respondent. 1869 on the alleged grounds mentioned above.

H.B. Basco & Associates for petitioners. The Philippine Amusements and Gaming Corporation (PAGCOR) was created
Valmonte Law Offices collaborating counsel for petitioners. by virtue of P.D. 1067-A dated January 1, 1977 and was granted a franchise
Aguirre, Laborte and Capule for respondent PAGCOR. under P.D. 1067-B also dated January 1, 1977 "to establish, operate and
maintain gambling casinos on land or water within the territorial jurisdiction of in cooperation with various governmental agencies, and other private
the Philippines." Its operation was originally conducted in the well known associations and organizations. In its 3 1/2 years of operation under the
floating casino "Philippine Tourist." The operation was considered a success present administration, PAGCOR remitted to the government a total of P6.2
for it proved to be a potential source of revenue to fund infrastructure and Billion. As of December 31, 1989, PAGCOR was employing 4,494 employees
socio-economic projects, thus, P.D. 1399 was passed on June 2, 1978 for in its nine (9) casinos nationwide, directly supporting the livelihood of Four
PAGCOR to fully attain this objective. Thousand Four Hundred Ninety-Four (4,494) families.

Subsequently, on July 11, 1983, PAGCOR was created under P.D. 1869 to But the petitioners, are questioning the validity of P.D. No. 1869. They allege
enable the Government to regulate and centralize all games of chance that the same is "null and void" for being "contrary to morals, public policy and
authorized by existing franchise or permitted by law, under the following public order," monopolistic and tends toward "crony economy", and is violative
declared policy of the equal protection clause and local autonomy as well as for running
counter to the state policies enunciated in Sections 11 (Personal Dignity and
Sec. 1. Declaration of Policy. It is hereby declared to be the policy of the Human Rights), 12 (Family) and 13 (Role of Youth) of Article II, Section 1
State to centralize and integrate all games of chance not heretofore authorized (Social Justice) of Article XIII and Section 2 (Educational Values) of Article XIV
by existing franchises or permitted by law in order to attain the following of the 1987 Constitution.
objectives:
This challenge to P.D. No. 1869 deserves a searching and thorough scrutiny
(a) To centralize and integrate the right and authority to operate and and the most deliberate consideration by the Court, involving as it does the
conduct games of chance into one corporate entity to be controlled, exercise of what has been described as "the highest and most delicate function
administered and supervised by the Government. which belongs to the judicial department of the government." (State v. Manuel,
20 N.C. 144; Lozano v. Martinez, 146 SCRA 323).
(b) To establish and operate clubs and casinos, for amusement and
recreation, including sports gaming pools, (basketball, football, lotteries, etc.) As We enter upon the task of passing on the validity of an act of a co-equal
and such other forms of amusement and recreation including games of and coordinate branch of the government We need not be reminded of the
chance, which may be allowed by law within the territorial jurisdiction of the time-honored principle, deeply ingrained in our jurisprudence, that a statute is
Philippines and which will: (1) generate sources of additional revenue to fund presumed to be valid. Every presumption must be indulged in favor of its
infrastructure and socio-civic projects, such as flood control programs, constitutionality. This is not to say that We approach Our task with diffidence
beautification, sewerage and sewage projects, Tulungan ng Bayan Centers, or timidity. Where it is clear that the legislature or the executive for that matter,
Nutritional Programs, Population Control and such other essential public has over-stepped the limits of its authority under the constitution, We should
services; (2) create recreation and integrated facilities which will expand and not hesitate to wield the axe and let it fall heavily, as fall it must, on the
improve the country's existing tourist attractions; and (3) minimize, if not totally offending statute (Lozano v. Martinez, supra).
eradicate, all the evils, malpractices and corruptions that are normally
prevalent on the conduct and operation of gambling clubs and casinos without In Victoriano v. Elizalde Rope Workers' Union, et al, 59 SCRA 54, the Court
direct government involvement. (Section 1, P.D. 1869) thru Mr. Justice Zaldivar underscored the

To attain these objectives PAGCOR is given territorial jurisdiction all over the . . . thoroughly established principle which must be followed in all cases where
Philippines. Under its Charter's repealing clause, all laws, decrees, executive questions of constitutionality as obtain in the instant cases are involved. All
orders, rules and regulations, inconsistent therewith, are accordingly repealed, presumptions are indulged in favor of constitutionality; one who attacks a
amended or modified. statute alleging unconstitutionality must prove its invalidity beyond a
reasonable doubt; that a law may work hardship does not render it
It is reported that PAGCOR is the third largest source of government revenue, unconstitutional; that if any reasonable basis may be conceived which
next to the Bureau of Internal Revenue and the Bureau of Customs. In 1989 supports the statute, it will be upheld and the challenger must negate all
alone, PAGCOR earned P3.43 Billion, and directly remitted to the National possible basis; that the courts are not concerned with the wisdom, justice,
Government a total of P2.5 Billion in form of franchise tax, government's policy or expediency of a statute and that a liberal interpretation of the
income share, the President's Social Fund and Host Cities' share. In addition, constitution in favor of the constitutionality of legislation should be adopted.
PAGCOR sponsored other socio-cultural and charitable projects on its own or (Danner v. Hass, 194 N.W. 2nd 534, 539; Spurbeck v. Statton, 106 N.W. 2nd
660, 663; 59 SCRA 66; see also e.g. Salas v. Jarencio, 46 SCRA 734, 739 Ericta, 35 SCRA 481, 487) As defined, it consists of (1) an imposition or
[1970]; Peralta v. Commission on Elections, 82 SCRA 30, 55 [1978]; and Heirs restraint upon liberty or property, (2) in order to foster the common good. It is
of Ordona v. Reyes, 125 SCRA 220, 241-242 [1983] cited in Citizens Alliance not capable of an exact definition but has been, purposely, veiled in general
for Consumer Protection v. Energy Regulatory Board, 162 SCRA 521, 540) terms to underscore its all-comprehensive embrace. (Philippine Association of
Service Exporters, Inc. v. Drilon, 163 SCRA 386).
Of course, there is first, the procedural issue. The respondents are questioning
the legal personality of petitioners to file the instant petition. Its scope, ever-expanding to meet the exigencies of the times, even to
anticipate the future where it could be done, provides enough room for an
Considering however the importance to the public of the case at bar, and in efficient and flexible response to conditions and circumstances thus assuming
keeping with the Court's duty, under the 1987 Constitution, to determine the greatest benefits. (Edu v. Ericta, supra)
whether or not the other branches of government have kept themselves within
the limits of the Constitution and the laws and that they have not abused the It finds no specific Constitutional grant for the plain reason that it does not owe
discretion given to them, the Court has brushed aside technicalities of its origin to the charter. Along with the taxing power and eminent domain, it is
procedure and has taken cognizance of this petition. (Kapatiran ng mga inborn in the very fact of statehood and sovereignty. It is a fundamental
Naglilingkod sa Pamahalaan ng Pilipinas Inc. v. Tan, 163 SCRA 371) attribute of government that has enabled it to perform the most vital functions
of governance. Marshall, to whom the expression has been credited, refers to
With particular regard to the requirement of proper party as applied in the it succinctly as the plenary power of the state "to govern its citizens". (Tribe,
cases before us, We hold that the same is satisfied by the petitioners and American Constitutional Law, 323, 1978). The police power of the State is a
intervenors because each of them has sustained or is in danger of sustaining power co-extensive with self-protection and is most aptly termed the "law of
an immediate injury as a result of the acts or measures complained of. And overwhelming necessity." (Rubi v. Provincial Board of Mindoro, 39 Phil. 660,
even if, strictly speaking they are not covered by the definition, it is still within 708) It is "the most essential, insistent, and illimitable of powers." (Smith Bell
the wide discretion of the Court to waive the requirement and so remove the & Co. v. National, 40 Phil. 136) It is a dynamic force that enables the state to
impediment to its addressing and resolving the serious constitutional questions meet the agencies of the winds of change.
raised.
What was the reason behind the enactment of P.D. 1869?
In the first Emergency Powers Cases, ordinary citizens and taxpayers were
allowed to question the constitutionality of several executive orders issued by P.D. 1869 was enacted pursuant to the policy of the government to "regulate
President Quirino although they were involving only an indirect and general and centralize thru an appropriate institution all games of chance authorized
interest shared in common with the public. The Court dismissed the objection by existing franchise or permitted by law" (1st whereas clause, PD 1869). As
that they were not proper parties and ruled that "the transcendental importance was subsequently proved, regulating and centralizing gambling operations in
to the public of these cases demands that they be settled promptly and one corporate entity the PAGCOR, was beneficial not just to the
definitely, brushing aside, if we must technicalities of procedure." We have Government but to society in general. It is a reliable source of much needed
since then applied the exception in many other cases. (Association of Small revenue for the cash strapped Government. It provided funds for social impact
Landowners in the Philippines, Inc. v. Sec. of Agrarian Reform, 175 SCRA projects and subjected gambling to "close scrutiny, regulation, supervision and
343). control of the Government" (4th Whereas Clause, PD 1869). With the creation
of PAGCOR and the direct intervention of the Government, the evil practices
Having disposed of the procedural issue, We will now discuss the substantive and corruptions that go with gambling will be minimized if not totally eradicated.
issues raised. Public welfare, then, lies at the bottom of the enactment of PD 1896.

Gambling in all its forms, unless allowed by law, is generally prohibited. But Petitioners contend that P.D. 1869 constitutes a waiver of the right of the City
the prohibition of gambling does not mean that the Government cannot of Manila to impose taxes and legal fees; that the exemption clause in P.D.
regulate it in the exercise of its police power. 1869 is violative of the principle of local autonomy. They must be referring to
Section 13 par. (2) of P.D. 1869 which exempts PAGCOR, as the franchise
The concept of police power is well-established in this jurisdiction. It has been holder from paying any "tax of any kind or form, income or otherwise, as well
defined as the "state authority to enact legislation that may interfere with as fees, charges or levies of whatever nature, whether National or Local."
personal liberty or property in order to promote the general welfare." (Edu v.
(2) Income and other taxes. a) Franchise Holder: No tax of any kind or Sec. 2. Hereafter, all permits or franchises to operate, maintain and establish,
form, income or otherwise as well as fees, charges or levies of whatever horse and dog race tracks, jai-alai and other forms of gambling shall be issued
nature, whether National or Local, shall be assessed and collected under this by the national government upon proper application and verification of the
franchise from the Corporation; nor shall any form or tax or charge attach in qualification of the applicant . . .
any way to the earnings of the Corporation, except a franchise tax of five (5%)
percent of the gross revenues or earnings derived by the Corporation from its Therefore, only the National Government has the power to issue "licenses or
operations under this franchise. Such tax shall be due and payable quarterly permits" for the operation of gambling. Necessarily, the power to demand or
to the National Government and shall be in lieu of all kinds of taxes, levies, collect license fees which is a consequence of the issuance of "licenses or
fees or assessments of any kind, nature or description, levied, established or permits" is no longer vested in the City of Manila.
collected by any municipal, provincial or national government authority
(Section 13 [2]). (d) Local governments have no power to tax instrumentalities of the
National Government. PAGCOR is a government owned or controlled
Their contention stated hereinabove is without merit for the following reasons: corporation with an original charter, PD 1869. All of its shares of stocks are
owned by the National Government. In addition to its corporate powers (Sec.
(a) The City of Manila, being a mere Municipal corporation has no 3, Title II, PD 1869) it also exercises regulatory powers thus:
inherent right to impose taxes (Icard v. City of Baguio, 83 Phil. 870; City of
Iloilo v. Villanueva, 105 Phil. 337; Santos v. Municipality of Caloocan, 7 SCRA Sec. 9. Regulatory Power. The Corporation shall maintain a Registry of the
643). Thus, "the Charter or statute must plainly show an intent to confer that affiliated entities, and shall exercise all the powers, authority and the
power or the municipality cannot assume it" (Medina v. City of Baguio, 12 responsibilities vested in the Securities and Exchange Commission over such
SCRA 62). Its "power to tax" therefore must always yield to a legislative act affiliating entities mentioned under the preceding section, including, but not
which is superior having been passed upon by the state itself which has the limited to amendments of Articles of Incorporation and By-Laws, changes in
"inherent power to tax" (Bernas, the Revised [1973] Philippine Constitution, corporate term, structure, capitalization and other matters concerning the
Vol. 1, 1983 ed. p. 445). operation of the affiliated entities, the provisions of the Corporation Code of
the Philippines to the contrary notwithstanding, except only with respect to
(b) The Charter of the City of Manila is subject to control by Congress. It original incorporation.
should be stressed that "municipal corporations are mere creatures of
Congress" (Unson v. Lacson, G.R. No. 7909, January 18, 1957) which has the PAGCOR has a dual role, to operate and to regulate gambling casinos. The
power to "create and abolish municipal corporations" due to its "general latter role is governmental, which places it in the category of an agency or
legislative powers" (Asuncion v. Yriantes, 28 Phil. 67; Merdanillo v. Orandia, 5 instrumentality of the Government. Being an instrumentality of the
SCRA 541). Congress, therefore, has the power of control over Local Government, PAGCOR should be and actually is exempt from local taxes.
governments (Hebron v. Reyes, G.R. No. 9124, July 2, 1950). And if Congress Otherwise, its operation might be burdened, impeded or subjected to control
can grant the City of Manila the power to tax certain matters, it can also provide by a mere Local government.
for exemptions or even take back the power.
The states have no power by taxation or otherwise, to retard, impede, burden
(c) The City of Manila's power to impose license fees on gambling, has or in any manner control the operation of constitutional laws enacted by
long been revoked. As early as 1975, the power of local governments to Congress to carry into execution the powers vested in the federal government.
regulate gambling thru the grant of "franchise, licenses or permits" was (MC Culloch v. Marland, 4 Wheat 316, 4 L Ed. 579)
withdrawn by P.D. No. 771 and was vested exclusively on the National
Government, thus: This doctrine emanates from the "supremacy" of the National Government
over local governments.
Sec. 1. Any provision of law to the contrary notwithstanding, the authority of
chartered cities and other local governments to issue license, permit or other Justice Holmes, speaking for the Supreme Court, made reference to the entire
form of franchise to operate, maintain and establish horse and dog race tracks, absence of power on the part of the States to touch, in that way (taxation) at
jai-alai and other forms of gambling is hereby revoked. least, the instrumentalities of the United States (Johnson v. Maryland, 254 US
51) and it can be agreed that no state or political subdivision can regulate a
federal instrumentality in such a way as to prevent it from consummating its
federal responsibilities, or even to seriously burden it in the accomplishment As to what state powers should be "decentralized" and what may be delegated
of them. (Antieau, Modern Constitutional Law, Vol. 2, p. 140, emphasis to local government units remains a matter of policy, which concerns wisdom.
supplied) It is therefore a political question. (Citizens Alliance for Consumer Protection
v. Energy Regulatory Board, 162 SCRA 539).
Otherwise, mere creatures of the State can defeat National policies thru
extermination of what local authorities may perceive to be undesirable What is settled is that the matter of regulating, taxing or otherwise dealing with
activities or enterprise using the power to tax as "a tool for regulation" (U.S. v. gambling is a State concern and hence, it is the sole prerogative of the State
Sanchez, 340 US 42). to retain it or delegate it to local governments.

The power to tax which was called by Justice Marshall as the "power to As gambling is usually an offense against the State, legislative grant or
destroy" (Mc Culloch v. Maryland, supra) cannot be allowed to defeat an express charter power is generally necessary to empower the local corporation
instrumentality or creation of the very entity which has the inherent power to to deal with the subject. . . . In the absence of express grant of power to enact,
wield it. ordinance provisions on this subject which are inconsistent with the state laws
are void. (Ligan v. Gadsden, Ala App. 107 So. 733 Ex-Parte Solomon, 9, Cals.
(e) Petitioners also argue that the Local Autonomy Clause of the 440, 27 PAC 757 following in re Ah You, 88 Cal. 99, 25 PAC 974, 22 Am St.
Constitution will be violated by P.D. 1869. This is a pointless argument. Article Rep. 280, 11 LRA 480, as cited in Mc Quinllan Vol. 3 Ibid, p. 548, emphasis
X of the 1987 Constitution (on Local Autonomy) provides: supplied)

Sec. 5. Each local government unit shall have the power to create its own Petitioners next contend that P.D. 1869 violates the equal protection clause of
source of revenue and to levy taxes, fees, and other charges subject to such the Constitution, because "it legalized PAGCOR conducted gambling, while
guidelines and limitation as the congress may provide, consistent with the most gambling are outlawed together with prostitution, drug trafficking and
basic policy on local autonomy. Such taxes, fees and charges shall accrue other vices" (p. 82, Rollo).
exclusively to the local government. (emphasis supplied)
We, likewise, find no valid ground to sustain this contention. The petitioners'
The power of local government to "impose taxes and fees" is always subject posture ignores the well-accepted meaning of the clause "equal protection of
to "limitations" which Congress may provide by law. Since PD 1869 remains the laws." The clause does not preclude classification of individuals who may
an "operative" law until "amended, repealed or revoked" (Sec. 3, Art. XVIII, be accorded different treatment under the law as long as the classification is
1987 Constitution), its "exemption clause" remains as an exception to the not unreasonable or arbitrary (Itchong v. Hernandez, 101 Phil. 1155). A law
exercise of the power of local governments to impose taxes and fees. It cannot does not have to operate in equal force on all persons or things to be
therefore be violative but rather is consistent with the principle of local conformable to Article III, Section 1 of the Constitution (DECS v. San Diego,
autonomy. G.R. No. 89572, December 21, 1989).

Besides, the principle of local autonomy under the 1987 Constitution simply The "equal protection clause" does not prohibit the Legislature from
means "decentralization" (III Records of the 1987 Constitutional Commission, establishing classes of individuals or objects upon which different rules shall
pp. 435-436, as cited in Bernas, The Constitution of the Republic of the operate (Laurel v. Misa, 43 O.G. 2847). The Constitution does not require
Philippines, Vol. II, First Ed., 1988, p. 374). It does not make local governments situations which are different in fact or opinion to be treated in law as though
sovereign within the state or an "imperium in imperio." they were the same (Gomez v. Palomar, 25 SCRA 827).

Local Government has been described as a political subdivision of a nation or Just how P.D. 1869 in legalizing gambling conducted by PAGCOR is violative
state which is constituted by law and has substantial control of local affairs. In of the equal protection is not clearly explained in the petition. The mere fact
a unitary system of government, such as the government under the Philippine that some gambling activities like cockfighting (P.D 449) horse racing (R.A.
Constitution, local governments can only be an intra sovereign subdivision of 306 as amended by RA 983), sweepstakes, lotteries and races (RA 1169 as
one sovereign nation, it cannot be an imperium in imperio. Local government amended by B.P. 42) are legalized under certain conditions, while others are
in such a system can only mean a measure of decentralization of the function prohibited, does not render the applicable laws, P.D. 1869 for one,
of government. (emphasis supplied) unconstitutional.
If the law presumably hits the evil where it is most felt, it is not to be overthrown executive and the legislature failed to heed the directives of the articles the
because there are other instances to which it might have been applied. available remedy was not judicial or political. The electorate could express
(Gomez v. Palomar, 25 SCRA 827) their displeasure with the failure of the executive and the legislature through
the language of the ballot. (Bernas, Vol. II, p. 2)
The equal protection clause of the 14th Amendment does not mean that all
occupations called by the same name must be treated the same way; the state Every law has in its favor the presumption of constitutionality (Yu Cong Eng v.
may do what it can to prevent which is deemed as evil and stop short of those Trinidad, 47 Phil. 387; Salas v. Jarencio, 48 SCRA 734; Peralta v. Comelec,
cases in which harm to the few concerned is not less than the harm to the 82 SCRA 30; Abbas v. Comelec, 179 SCRA 287). Therefore, for PD 1869 to
public that would insure if the rule laid down were made mathematically exact. be nullified, it must be shown that there is a clear and unequivocal breach of
(Dominican Hotel v. Arizona, 249 US 2651). the Constitution, not merely a doubtful and equivocal one. In other words, the
grounds for nullity must be clear and beyond reasonable doubt. (Peralta v.
Anent petitioners' claim that PD 1869 is contrary to the "avowed trend of the Comelec, supra) Those who petition this Court to declare a law, or parts
Cory Government away from monopolies and crony economy and toward free thereof, unconstitutional must clearly establish the basis for such a declaration.
enterprise and privatization" suffice it to state that this is not a ground for this Otherwise, their petition must fail. Based on the grounds raised by petitioners
Court to nullify P.D. 1869. If, indeed, PD 1869 runs counter to the government's to challenge the constitutionality of P.D. 1869, the Court finds that petitioners
policies then it is for the Executive Department to recommend to Congress its have failed to overcome the presumption. The dismissal of this petition is
repeal or amendment. therefore, inevitable. But as to whether P.D. 1869 remains a wise legislation
considering the issues of "morality, monopoly, trend to free enterprise,
The judiciary does not settle policy issues. The Court can only declare what privatization as well as the state principles on social justice, role of youth and
the law is and not what the law should be.1wphi1 Under our system of educational values" being raised, is up for Congress to determine.
government, policy issues are within the domain of the political branches of
government and of the people themselves as the repository of all state power. As this Court held in Citizens' Alliance for Consumer Protection v. Energy
(Valmonte v. Belmonte, Jr., 170 SCRA 256). Regulatory Board, 162 SCRA 521

On the issue of "monopoly," however, the Constitution provides that: Presidential Decree No. 1956, as amended by Executive Order No. 137 has,
in any case, in its favor the presumption of validity and constitutionality which
Sec. 19. The State shall regulate or prohibit monopolies when public petitioners Valmonte and the KMU have not overturned. Petitioners have not
interest so requires. No combinations in restraint of trade or unfair competition undertaken to identify the provisions in the Constitution which they claim to
shall be allowed. (Art. XII, National Economy and Patrimony) have been violated by that statute. This Court, however, is not compelled to
speculate and to imagine how the assailed legislation may possibly offend
It should be noted that, as the provision is worded, monopolies are not some provision of the Constitution. The Court notes, further, in this respect that
necessarily prohibited by the Constitution. The state must still decide whether petitioners have in the main put in question the wisdom, justice and expediency
public interest demands that monopolies be regulated or prohibited. Again, this of the establishment of the OPSF, issues which are not properly addressed to
is a matter of policy for the Legislature to decide. this Court and which this Court may not constitutionally pass upon. Those
issues should be addressed rather to the political departments of government:
On petitioners' allegation that P.D. 1869 violates Sections 11 (Personality the President and the Congress.
Dignity) 12 (Family) and 13 (Role of Youth) of Article II; Section 13 (Social
Justice) of Article XIII and Section 2 (Educational Values) of Article XIV of the Parenthetically, We wish to state that gambling is generally immoral, and this
1987 Constitution, suffice it to state also that these are merely statements of is precisely so when the gambling resorted to is excessive. This excessiveness
principles and, policies. As such, they are basically not self-executing, necessarily depends not only on the financial resources of the gambler and his
meaning a law should be passed by Congress to clearly define and effectuate family but also on his mental, social, and spiritual outlook on life. However, the
such principles. mere fact that some persons may have lost their material fortunes, mental
control, physical health, or even their lives does not necessarily mean that the
In general, therefore, the 1935 provisions were not intended to be self- same are directly attributable to gambling. Gambling may have been the
executing principles ready for enforcement through the courts. They were antecedent, but certainly not necessarily the cause. For the same
rather directives addressed to the executive and the legislature. If the
consequences could have been preceded by an overdose of food, drink, IPINASIYA, na tutulan gaya ng dito ay mahigpit na TINUTUTULAN ang ano
exercise, work, and even sex. mang uri ng sugal dito sa lalawigan ng Laguna lalo't higit ang Lotto;

WHEREFORE, the petition is DISMISSED for lack of merit. IPINASIYA PA RIN na hilingin tulad ng dito ay hinihiling sa Panlalawigang
pinuno ng Philippine National Police (PNP) Col. [illegible] na mahigpit na pag-
SO ORDERED. ibayuhin ang pagsugpo sa lahat ng uri ng illegal na sugal sa buong lalawigan
ng Laguna lalo na ang "Jueteng".3
2. Lina v. Pano
As a result of this resolution of denial, respondent Calvento filed a complaint
G.R. No. 129093 August 30, 2001 for declaratory relief with prayer for preliminary injunction and temporary
restraining order. In the said complaint, respondent Calvento asked the
HON. JOSE D. LINA, JR., SANGGUNIANG PANLALAWIGAN OF LAGUNA, Regional Trial Court of San Pedro Laguna, Branch 93, for the following reliefs:
and HON. CALIXTO CATAQUIZ, petitioners, (1) a preliminary injunction or temporary restraining order, ordering the
vs. defendants to refrain from implementing or enforcing Kapasiyahan Blg. 508,
HON. FRANCISCO DIZON PAO and TONY CALVENTO, respondents. T. 1995; (2) an order requiring Hon. Municipal Mayor Calixto R Cataquiz to
issue a business permit for the operation of a lotto outlet; and (3) an order
QUISUMBING, J.: annulling or declaring as invalid Kapasiyahan Blg. 508, T. 1995.

For our resolution is a petition for review on certiorari seeking the reversal of On February 10, 1997, the respondent judge, Francisco Dizon Pao,
the decision 1 dated February 10, 1997 of the Regional Trial Court of San promulgated his decision enjoining the petitioners from implementing or
Pedro, Laguna, Branch 93, enjoining petitioners from implementing or enforcing resolution or Kapasiyahan Blg. 508, T. 1995. The dispositive portion
enforcing Kapasiyahan Bilang 508, Taon 1995, of the Sangguniang of said decision reads:
Panlalawigan of Laguna and its subsequent Order 2 dated April 21, 1997
denying petitioners' motion for reconsideration. WHEREFORE, premises considered, defendants, their agents and
representatives are hereby enjoined from implementing or enforcing resolution
On December 29, 1995, respondent Tony Calvento was appointed agent by or kapasiyahan blg. 508, T. 1995 of the Sangguniang Panlalawigan ng Laguna
the Philippine Charity Sweepstakes Office (PCSO) to install Terminal OM 20 prohibiting the operation of the lotto in the province of Laguna.
for the operation of lotto. He asked Mayor Calixto Cataquiz, Mayor of San
Pedro, Laguna, for a mayor's permit to open the lotto outlet. This was denied SO ORDERED.4
by Mayor Cataquiz in a letter dated February 19, 1996. The ground for said
denial was an ordinance passed by the Sangguniang Panlalawigan of Laguna Petitioners filed a motion for reconsideration which was subsequently denied
entitled Kapasiyahan Blg. 508, T. 1995 which was issued on September 18, in an Order dated April 21, 1997, which reads:
1995. The ordinance reads:
Acting on the Motion for Reconsideration filed by defendants Jose D. Lina, Jr.
ISANG KAPASIYAHAN TINUTUTULAN ANG MGA "ILLEGAL GAMBLING" and the Sangguniang Panlalawigan of Laguna, thru counsel, with the
LALO NA ANG LOTTO SA LALAWIGAN NG LAGUNA opposition filed by plaintiff's counsel and the comment thereto filed by counsel
for the defendants which were duly noted, the Court hereby denies the motion
SAPAGKA'T, ang sugal dito sa lalawigan ng Laguna ay talamak na; for lack of merit.

SAPAGKA'T, ang sugal ay nagdudulot ng masasamang impluwensiya lalo't SO ORDERED.5


higit sa mga kabataan;
On May 23, 1997, petitioners filed this petition alleging that the following errors
KUNG KAYA'T DAHIL DITO, at sa mungkahi nina Kgg. Kgd. Juan M. Unico at were committed by the respondent trial court:
Kgg. Kgd. Gat-Ala A. Alatiit, pinangalawahan ni Kgg. Kgd. Meliton C. Larano
at buong pagkakaisang sinangayunan ng lahat ng dumalo sa pulong; I
THE TRIAL COURT ERRED IN ENJOINING THE PETITIONERS FROM which PCSO seeks to conduct in Laguna, pursuant to its legislative grant of
IMPLEMENTING KAPASIYAHAN BLG. 508, T. 1995 OF THE authority, the province's Sangguniang Panlalawigan cannot nullify the exercise
SANGGUNIANG PANLALAWIGAN OF LAGUNA PROHIBITING THE of said authority by preventing something already allowed by Congress.
OPERATION OF THE LOTTO IN THE PROVINCE OF LAGUNA.
The issues to be resolved now are the following: (1) whether Kapasiyahan Blg.
II 508, T. 1995 of the Sangguniang Panlalawigan of Laguna and the denial of a
mayor's permit based thereon are valid; and (2) whether prior consultations
THE TRIAL COURT FAILED TO APPRECIATE THE ARGUMENT POSITED and approval by the concerned Sanggunian are needed before a lotto system
BY THE PETITIONERS THAT BEFORE ANY GOVERNMENT PROJECT OR can be operated in a given local government unit.
PROGRAM MAY BE IMPLEMENTED BY THE NATIONAL AGENCIES OR
OFFICES, PRIOR CONSULTATION AND APPROVAL BY THE LOCAL The entire controversy stemmed from the refusal of Mayor Cataquiz to issue a
GOVERNMENT UNITS CONCERNED AND OTHER CONCERNED mayor's permit for the operation of a lotto outlet in favor of private respondent.
SECTORS IS REQUIRED. According to the mayor, he based his decision on an existing ordinance
prohibiting the operation of lotto in the province of Laguna. The ordinance,
Petitioners contend that the assailed resolution is a valid policy declaration of however, merely states the "objection" of the council to the said game. It is but
the Provincial Government of Laguna of its vehement objection to the a mere policy statement on the part of the local council, which is not self-
operation of lotto and all forms of gambling. It is likewise a valid exercise of the executing. Nor could it serve as a valid ground to prohibit the operation of the
provincial government's police power under the General Welfare Clause of lotto system in the province of Laguna. Even petitioners admit as much when
Republic Act 7160, otherwise known as the Local Government Code of 1991.6 they stated in their petition that:
They also maintain that respondent's lotto operation is illegal because no prior
consultations and approval by the local government were sought before it was 5.7. The terms of the Resolution and the validity thereof are express and
implemented contrary to the express provisions of Sections 2 (c) and 27 of clear. The Resolution is a policy declaration of the Provincial Government of
R.A. 7160.7 Laguna of its vehement opposition and/or objection to the operation of and/or
all forms of gambling including the Lotto operation in the Province of
For his part, respondent Calvento argues that the questioned resolution is, in Laguna.12
effect, a curtailment of the power of the state since in this case the national
legislature itself had already declared lotto as legal and permitted its As a policy statement expressing the local government's objection to the lotto,
operations around the country.8 As for the allegation that no prior consultations such resolution is valid. This is part of the local government's autonomy to air
and approval were sought from the sangguniang panlalawigan of Laguna, its views which may be contrary to that of the national government's. However,
respondent Calvento contends this is not mandatory since such a requirement this freedom to exercise contrary views does not mean that local governments
is merely stated as a declaration of policy and not a self-executing provision of may actually enact ordinances that go against laws duly enacted by Congress.
the Local Government Code of 1991.9 He also states that his operation of the Given this premise, the assailed resolution in this case could not and should
lotto system is legal because of the authority given to him by the PCSO, which not be interpreted as a measure or ordinance prohibiting the operation of lotto.
in turn had been granted a franchise to operate the lotto by Congress.10
The game of lotto is a game of chance duly authorized by the national
The Office of the Solicitor General (OSG), for the State, contends that the government through an Act of Congress. Republic Act 1169, as amended by
Provincial Government of Laguna has no power to prohibit a form of gambling Batas Pambansa Blg. 42, is the law which grants a franchise to the PCSO and
which has been authorized by the national government.11 He argues that this allows it to operate the lotteries. The pertinent provision reads:
is based on the principle that ordinances should not contravene statutes as
municipal governments are merely agents of the national government. The SECTION 1. The Philippine Charity Sweepstakes Office. The Philippine
local councils exercise only delegated legislative powers which have been Charity Sweepstakes Office, hereinafter designated the Office, shall be the
conferred on them by Congress. This being the case, these councils, as principal government agency for raising and providing for funds for health
delegates, cannot be superior to the principal or exercise powers higher than programs, medical assistance and services and charities of national character,
those of the latter. The OSG also adds that the question of whether gambling and as such shall have the general powers conferred in section thirteen of Act
should be permitted is for Congress to determine, taking into account national Numbered One thousand four hundred fifty-nine, as amended, and shall have
and local interests. Since Congress has allowed the PCSO to operate lotteries the authority:
under our previous Constitutions. The power to create still includes the power
A. To hold and conduct charity sweepstakes races, lotteries, and other to destroy. The power to grant still includes the power to withhold or recall.
similar activities, in such frequency and manner, as shall be determined, and True, there are certain notable innovations in the Constitution, like the direct
subject to such rules and regulations as shall be promulgated by the Board of conferment on the local government units of the power to tax (citing Art. X,
Directors. Sec. 5, Constitution), which cannot now be withdrawn by mere statute. By and
large, however, the national legislature is still the principal of the local
This statute remains valid today. While lotto is clearly a game of chance, the government units, which cannot defy its will or modify or violate it.15
national government deems it wise and proper to permit it. Hence, the
Sangguniang Panlalawigan of Laguna, a local government unit, cannot issue Ours is still a unitary form of government, not a federal state. Being so, any
a resolution or an ordinance that would seek to prohibit permits. Stated form of autonomy granted to local governments will necessarily be limited and
otherwise, what the national legislature expressly allows by law, such as lotto, confined within the extent allowed by the central authority. Besides, the
a provincial board may not disallow by ordinance or resolution. principle of local autonomy under the 1987 Constitution simply means
"decentralization". It does not make local governments sovereign within the
In our system of government, the power of local government units to legislate state or an "imperium in imperio".16
and enact ordinances and resolutions is merely a delegated power coming
from Congress. As held in Tatel vs. Virac,13 ordinances should not contravene To conclude our resolution of the first issue, respondent mayor of San Pedro,
an existing statute enacted by Congress. The reasons for this is obvious, as cannot avail of Kapasiyahan Bilang 508, Taon 1995, of the Provincial Board of
elucidated in Magtajas v. Pryce Properties Corp.14 Laguna as justification to prohibit lotto in his municipality. For said resolution
is nothing but an expression of the local legislative unit concerned. The Board's
Municipal governments are only agents of the national government. Local enactment, like spring water, could not rise above its source of power, the
councils exercise only delegated legislative powers conferred upon them by national legislature.
Congress as the national lawmaking body. The delegate cannot be superior to
the principal or exercise powers higher than those of the latter. It is a heresy As for the second issue, we hold that petitioners erred in declaring that
to suggest that the local government units can undo the acts of Congress, from Sections 2 (c) and 27 of Republic Act 7160, otherwise known as the Local
which they have derived their power in the first place, and negate by mere Government Code of 1991, apply mandatorily in the setting up of lotto outlets
ordinance the mandate of the statute. around the country. These provisions state:

Municipal corporations owe their origin to, and derive their powers and rights SECTION 2. Declaration of Policy. . . .
wholly from the legislature. It breathes into them the breath of life, without
which they cannot exist. As it creates, so it may destroy. As it may destroy, it (c) It is likewise the policy of the State to require all national agencies and
may abridge and control. Unless there is some constitutional limitation on the offices to conduct periodic consultations with appropriate local government
right, the legislature might, by a single act, and if we can suppose it capable of units, non-governmental and people's organizations, and other concerned
so great a folly and so great a wrong, sweep from existence all of the municipal sectors of the community before any project or program is implemented in their
corporations in the state, and the corporation could not prevent it. We know of respective jurisdictions.
no limitation on the right so far as the corporation themselves are concerned.
They are, so to phrase it, the mere tenants at will of the legislature (citing SECTION 27. Prior Consultations Required. No project or program shall
Clinton vs. Ceder Rapids, etc. Railroad Co., 24 Iowa 455). be implemented by government authorities unless the consultations
mentioned in Section 2 (c) and 26 hereof are complied with, and prior approval
Nothing in the present constitutional provision enhancing local autonomy of the sanggunian concerned is obtained; Provided, that occupants in areas
dictates a different conclusion. where such projects are to be implemented shall not be evicted unless,
appropriate relocation sites have been provided, in accordance with the
The basic relationship between the national legislature and the local provisions of the Constitution.
government units has not been enfeebled by the new provisions in the
Constitution strengthening the policy of local autonomy. Without meaning to From a careful reading of said provisions, we find that these apply only to
detract from that policy, we here confirm that Congress retains control of the national programs and/or projects which are to be implemented in a particular
local government units although in significantly reduced degree now than local community. Lotto is neither a program nor a project of the national
government, but of a charitable institution, the PCSO. Though sanctioned by WHEREFORE, the petition is DENIED for lack of merit. The Order of the
the national government, it is far fetched to say that lotto falls within the Regional Trial Court of San Pedro, Laguna enjoining the petitioners from
contemplation of Sections 2 (c) and 27 of the Local Government Code. implementing or enforcing Resolution or Kapasiyahan Blg. 508, T. 1995, of the
Provincial Board of Laguna is hereby AFFIRMED. No costs.
Section 27 of the Code should be read in conjunction with Section 26
thereof.17 Section 26 reads: SO ORDERED.

SECTION 26. Duty of National Government Agencies in the Maintenance of 3. Limbona v. Mangelin
Ecological Balance. - It shall be the duty of every national agency or
government-owned or controlled corporation authorizing or involved in the G.R. No. 80391 February 28, 1989
planning and implementation of any project or program that may cause
pollution, climatic change, depletion of non-renewable resources, loss of crop SULTAN ALIMBUSAR P. LIMBONA, petitioner,
land, range-land, or forest cover, and extinction of animal or plant species, to vs.
consult with the local government units, nongovernmental organizations, and CONTE MANGELIN, SALIC ALI, SALINDATO ALI, PILIMPINAS CONDING,
other sectors concerned and explain the goals and objectives of the project or ACMAD TOMAWIS, GERRY TOMAWIS, JESUS ORTIZ, ANTONIO DELA
program, its impact upon the people and the community in terms of FUENTE, DIEGO PALOMARES, JR., RAUL DAGALANGIT, and BIMBO
environmental or ecological balance, and the measures that will be undertaken SINSUAT, respondents.
to prevent or minimize the adverse effects thereof.
Ambrosio Padilla, Mempin & Reyes Law Offices for petitioner petitioner.
Thus, the projects and programs mentioned in Section 27 should be
interpreted to mean projects and programs whose effects are among those Makabangkit B. Lanto for respondents.
enumerated in Section 26 and 27, to wit, those that: (1) may cause pollution;
(2) may bring about climatic change; (3) may cause the depletion of non-
renewable resources; (4) may result in loss of crop land, range-land, or forest SARMIENTO, J.:
cover; (5) may eradicate certain animal or plant species from the face of the
planet; and (6) other projects or programs that may call for the eviction of a The acts of the Sangguniang Pampook of Region XII are assailed in this
particular group of people residing in the locality where these will be petition. The antecedent facts are as follows:
implemented. Obviously, none of these effects will be produced by the
introduction of lotto in the province of Laguna. 1. On September 24, 1986, petitioner Sultan Alimbusar Limbona was
appointed as a member of the Sangguniang Pampook, Regional Autonomous
Moreover, the argument regarding lack of consultation raised by petitioners is Government, Region XII, representing Lanao del Sur.
clearly an afterthought on their part. There is no indication in the letter of Mayor
Cataquiz that this was one of the reasons for his refusal to issue a permit. That 2. On March 12, 1987 petitioner was elected Speaker of the Regional
refusal was predicated solely but erroneously on the provisions of Legislative Assembly or Batasang Pampook of Central Mindanao (Assembly
Kapasiyahan Blg. 508, Taon 1995, of the Sangguniang Panlalawigan of for brevity).
Laguna.
3. Said Assembly is composed of eighteen (18) members. Two of said
In sum, we find no reversible error in the RTC decision enjoining Mayor members, respondents Acmad Tomawis and Pakil Dagalangit, filed on March
Cataquiz from enforcing or implementing the Kapasiyahan Blg. 508, T. 1995, 23, 1987 with the Commission on Elections their respective certificates of
of the Sangguniang Panlalawigan of Laguna. That resolution expresses candidacy in the May 11, 1987 congressional elections for the district of Lanao
merely a policy statement of the Laguna provincial board. It possesses no del Sur but they later withdrew from the aforesaid election and thereafter
binding legal force nor requires any act of implementation. It provides no resumed again their positions as members of the Assembly.
sufficient legal basis for respondent mayor's refusal to issue the permit sought
by private respondent in connection with a legitimate business activity 4. On October 21, 1987 Congressman Datu Guimid Matalam, Chairman of the
authorized by a law passed by Congress. Committee on Muslim Affairs of the House of Representatives, invited Mr.
Xavier Razul, Pampook Speaker of Region XI, Zamboanga City and the
petitioner in his capacity as Speaker of the Assembly, Region XII, in a letter 3. Dagalangit, Rakil
which reads:
4. Dela Fuente, Antonio
The Committee on Muslim Affairs well undertake consultations and dialogues
with local government officials, civic, religious organizations and traditional 5. Mangelen, Conte
leaders on the recent and present political developments and other issues
affecting Regions IX and XII. 6. Ortiz, Jesus

The result of the conference, consultations and dialogues would hopefully 7. Palomares, Diego
chart the autonomous governments of the two regions as envisioned and may
prod the President to constitute immediately the Regional Consultative 8. Sinsuat, Bimbo
Commission as mandated by the Commission.
9. Tomawis, Acmad
You are requested to invite some members of the Pampook Assembly of your
respective assembly on November 1 to 15, 1987, with venue at the Congress 10. Tomawis, Jerry
of the Philippines. Your presence, unstinted support and cooperation is (sic)
indispensable. After declaring the presence of a quorum, the Speaker Pro-Tempore was
authorized to preside in the session. On Motion to declare the seat of the
5. Consistent with the said invitation, petitioner sent a telegram to Acting Speaker vacant, all Assemblymen in attendance voted in the affirmative,
Secretary Johnny Alimbuyao of the Assembly to wire all Assemblymen that hence, the chair declared said seat of the Speaker vacant. 8. On November 5,
there shall be no session in November as "our presence in the house 1987, the session of the Assembly resumed with the following Assemblymen
committee hearing of Congress take (sic) precedence over any pending present:
business in batasang pampook ... ."
1. Mangelen Conte-Presiding Officer
6. In compliance with the aforesaid instruction of the petitioner, Acting
Secretary Alimbuyao sent to the members of the Assembly the following 2. Ali Salic
telegram:
3. Ali Salindatu
TRANSMITTING FOR YOUR INFORMATION AND GUIDANCE TELEGRAM
RECEIVED FROM SPEAKER LIMBONA QUOTE CONGRESSMAN JIMMY 4. Aratuc, Malik
MATALAM CHAIRMAN OF THE HOUSE COMMITTEE ON MUSLIM
AFFAIRS REQUESTED ME TO ASSIST SAID COMMITTEE IN THE 5. Cajelo, Rene
DISCUSSION OF THE PROPOSED AUTONOMY ORGANIC NOV. 1ST TO
15. HENCE WERE ALL ASSEMBLYMEN THAT THERE SHALL BE NO 6. Conding, Pilipinas (sic)
SESSION IN NOVEMBER AS OUR PRESENCE IN THE HOUSE
COMMITTEE HEARING OF CONGRESS TAKE PRECEDENCE OVER ANY 7. Dagalangit, Rakil
PENDING BUSINESS IN BATASANG PAMPOOK OF MATALAM FOLLOWS
UNQUOTE REGARDS. 8. Dela Fuente, Antonio

7. On November 2, 1987, the Assembly held session in defiance of petitioner's 9. Ortiz, Jesus
advice, with the following assemblymen present:
10 Palomares, Diego
1. Sali, Salic
11. Quijano, Jesus
2. Conding, Pilipinas (sic)
12. Sinsuat, Bimbo
LIMBONA FROM MEMBERSHIP OF THE SANGGUNIANG PAMPOOK
13. Tomawis, Acmad AUTONOMOUS REGION XII," 3 on the grounds, among other things, that the
petitioner "had caused to be prepared and signed by him paying [sic] the
14. Tomawis, Jerry salaries and emoluments of Odin Abdula, who was considered resigned after
filing his Certificate of Candidacy for Congressmen for the First District of
An excerpt from the debates and proceeding of said session reads: Maguindanao in the last May 11, elections. . . and nothing in the record of the
Assembly will show that any request for reinstatement by Abdula was ever
HON. DAGALANGIT: Mr. Speaker, Honorable Members of the House, with the made . . ." 4 and that "such action of Mr. Lim bona in paying Abdula his salaries
presence of our colleagues who have come to attend the session today, I move and emoluments without authority from the Assembly . . . constituted a
to call the names of the new comers in order for them to cast their votes on the usurpation of the power of the Assembly," 5 that the petitioner "had recently
previous motion to declare the position of the Speaker vacant. But before doing caused withdrawal of so much amount of cash from the Assembly resulting to
so, I move also that the designation of the Speaker Pro Tempore as the the non-payment of the salaries and emoluments of some Assembly [sic]," 6
Presiding Officer and Mr. Johnny Evangelists as Acting Secretary in the and that he had "filed a case before the Supreme Court against some
session last November 2, 1987 be reconfirmed in today's session. members of the Assembly on question which should have been resolved within
the confines of the Assembly," 7 for which the respondents now submit that
HON. SALIC ALI: I second the motions. the petition had become "moot and academic". 8

PRESIDING OFFICER: Any comment or objections on the two motions The first question, evidently, is whether or not the expulsion of the petitioner
presented? Me chair hears none and the said motions are approved. ... (pending litigation) has made the case moot and academic.

Twelve (12) members voted in favor of the motion to declare the seat of the We do not agree that the case has been rendered moot and academic by
Speaker vacant; one abstained and none voted against. 1 reason simply of the expulsion resolution so issued. For, if the petitioner's
expulsion was done purposely to make this petition moot and academic, and
Accordingly, the petitioner prays for judgment as follows: to preempt the Court, it will not make it academic.

WHEREFORE, petitioner respectfully prays that- On the ground of the immutable principle of due process alone, we hold that
the expulsion in question is of no force and effect. In the first place, there is no
(a) This Petition be given due course; showing that the Sanggunian had conducted an investigation, and whether or
not the petitioner had been heard in his defense, assuming that there was an
(b) Pending hearing, a restraining order or writ of preliminary injunction investigation, or otherwise given the opportunity to do so. On the other hand,
be issued enjoining respondents from proceeding with their session to be held what appears in the records is an admission by the Assembly (at least, the
on November 5, 1987, and on any day thereafter; respondents) that "since November, 1987 up to this writing, the petitioner has
not set foot at the Sangguniang Pampook." 9 "To be sure, the private
(c) After hearing, judgment be rendered declaring the proceedings held respondents aver that "[t]he Assemblymen, in a conciliatory gesture, wanted
by respondents of their session on November 2, 1987 as null and void; him to come to Cotabato City," 10 but that was "so that their differences could
be threshed out and settled." 11 Certainly, that avowed wanting or desire to
(d) Holding the election of petitioner as Speaker of said Legislative thresh out and settle, no matter how conciliatory it may be cannot be a
Assembly or Batasan Pampook, Region XII held on March 12, 1987 valid and substitute for the notice and hearing contemplated by law.
subsisting, and
While we have held that due process, as the term is known in administrative
(e) Making the injunction permanent. law, does not absolutely require notice and that a party need only be given the
opportunity to be heard, 12 it does not appear herein that the petitioner had,
Petitioner likewise prays for such other relief as may be just and equitable. 2 to begin with, been made aware that he had in fact stood charged of graft and
corruption before his collegues. It cannot be said therefore that he was
Pending further proceedings, this Court, on January 19, 1988, received a accorded any opportunity to rebut their accusations. As it stands, then, the
resolution filed by the Sangguniang Pampook, "EXPECTING ALIMBUSAR P.
charges now levelled amount to mere accusations that cannot warrant (2) Foreign relations;
expulsion.
(3) Foreign trade;
In the second place, (the resolution) appears strongly to be a bare act of
vendetta by the other Assemblymen against the petitioner arising from what (4) Currency, monetary affairs, foreign exchange, banking and quasi-banking,
the former perceive to be abduracy on the part of the latter. Indeed, it (the and external borrowing,
resolution) speaks of "a case [having been filed] [by the petitioner] before the
Supreme Court . . . on question which should have been resolved within the (5) Disposition, exploration, development, exploitation or utilization of all
confines of the Assemblyman act which some members claimed unnecessarily natural resources;
and unduly assails their integrity and character as representative of the people"
13 an act that cannot possibly justify expulsion. Access to judicial remedies is (6) Air and sea transport
guaranteed by the Constitution, 14 and, unless the recourse amounts to
malicious prosecution, no one may be punished for seeking redress in the (7) Postal matters and telecommunications;
courts.
(8) Customs and quarantine;
We therefore order reinstatement, with the caution that should the past acts of
the petitioner indeed warrant his removal, the Assembly is enjoined, should it (9) Immigration and deportation;
still be so minded, to commence proper proceedings therefor in line with the
most elementary requirements of due process. And while it is within the (10) Citizenship and naturalization;
discretion of the members of the Sanggunian to punish their erring colleagues,
their acts are nonetheless subject to the moderating band of this Court in the (11) National economic, social and educational planning; and
event that such discretion is exercised with grave abuse.
(12) General auditing. 21
It is, to be sure, said that precisely because the Sangguniang Pampook(s) are
"autonomous," the courts may not rightfully intervene in their affairs, much less In relation to the central government, it provides that "[t]he President shall have
strike down their acts. We come, therefore, to the second issue: Are the so- the power of general supervision and control over the Autonomous Regions
called autonomous governments of Mindanao, as they are now constituted, ..." 22
subject to the jurisdiction of the national courts? In other words, what is the
extent of self-government given to the two autonomous governments of Now, autonomy is either decentralization of administration or decentralization
Region IX and XII? of power. There is decentralization of administration when the central
government delegates administrative powers to political subdivisions in order
The autonomous governments of Mindanao were organized in Regions IX and to broaden the base of government power and in the process to make local
XII by Presidential Decree No. 1618 15 promulgated on July 25, 1979. Among governments "more responsive and accountable," 23 "and ensure their fullest
other things, the Decree established "internal autonomy" 16 in the two regions development as self-reliant communities and make them more effective
"[w]ithin the framework of the national sovereignty and territorial integrity of the partners in the pursuit of national development and social progress." 24 At the
Republic of the Philippines and its Constitution," 17 with legislative and same time, it relieves the central government of the burden of managing local
executive machinery to exercise the powers and responsibilities 18 specified affairs and enables it to concentrate on national concerns. The President
therein. exercises "general supervision" 25 over them, but only to "ensure that local
affairs are administered according to law." 26 He has no control over their acts
It requires the autonomous regional governments to "undertake all internal in the sense that he can substitute their judgments with his own. 27
administrative matters for the respective regions," 19 except to "act on matters
which are within the jurisdiction and competence of the National Government," Decentralization of power, on the other hand, involves an abdication of political
20 "which include, but are not limited to, the following: power in the favor of local governments units declare to be autonomous . In
that case, the autonomous government is free to chart its own destiny and
(1) National defense and security; shape its future with minimum intervention from central authorities. According
to a constitutional author, decentralization of power amounts to "self-
immolation," since in that event, the autonomous government becomes the second place, the Sangguniang Pampook, their legislative arm, is made to
accountable not to the central authorities but to its constituency. 28 discharge chiefly administrative services, thus:

But the question of whether or not the grant of autonomy Muslim Mindanao SEC. 7. Powers of the Sangguniang Pampook. The Sangguniang Pampook
under the 1987 Constitution involves, truly, an effort to decentralize power shall exercise local legislative powers over regional affairs within the
rather than mere administration is a question foreign to this petition, since what framework of national development plans, policies and goals, in the following
is involved herein is a local government unit constituted prior to the ratification areas:
of the present Constitution. Hence, the Court will not resolve that controversy
now, in this case, since no controversy in fact exists. We will resolve it at the (1) Organization of regional administrative system;
proper time and in the proper case.
(2) Economic, social and cultural development of the Autonomous Region;
Under the 1987 Constitution, local government units enjoy autonomy in these
two senses, thus: (3) Agricultural, commercial and industrial programs for the Autonomous
Region;
Section 1. The territorial and political subdivisions of the Republic of the
Philippines are the provinces, cities, municipalities, and barangays. Here shall (4) Infrastructure development for the Autonomous Region;
be autonomous regions in Muslim Mindanao ,and the Cordilleras as
hereinafter provided. 29 (5) Urban and rural planning for the Autonomous Region;

Sec. 2. The territorial and political subdivisions shall enjoy local autonomy. 30 (6) Taxation and other revenue-raising measures as provided for in this
Decree;
xxx xxx xxx
(7) Maintenance, operation and administration of schools established by the
See. 15. Mere shall be created autonomous regions in Muslim Mindanao and Autonomous Region;
in the Cordilleras consisting of provinces, cities, municipalities, and
geographical areas sharing common and distinctive historical and cultural (8) Establishment, operation and maintenance of health, welfare and other
heritage, economic and social structures, and other relevant characteristics social services, programs and facilities;
within the framework of this Constitution and the national sovereignty as well
as territorial integrity of the Republic of the Philippines. 31 (9) Preservation and development of customs, traditions, languages and
culture indigenous to the Autonomous Region; and
An autonomous government that enjoys autonomy of the latter category
[CONST. (1987), art. X, sec. 15.] is subject alone to the decree of the organic (10) Such other matters as may be authorized by law,including the
act creating it and accepted principles on the effects and limits of "autonomy." enactment of such measures as may be necessary for the promotion of the
On the other hand, an autonomous government of the former class is, as we general welfare of the people in the Autonomous Region.
noted, under the supervision of the national government acting through the
President (and the Department of Local Government). 32 If the Sangguniang The President shall exercise such powers as may be necessary to assure that
Pampook (of Region XII), then, is autonomous in the latter sense, its acts are, enactment and acts of the Sangguniang Pampook and the Lupong
debatably beyond the domain of this Court in perhaps the same way that the Tagapagpaganap ng Pook are in compliance with this Decree, national
internal acts, say, of the Congress of the Philippines are beyond our legislation, policies, plans and programs.
jurisdiction. But if it is autonomous in the former category only, it comes
unarguably under our jurisdiction. An examination of the very Presidential The Sangguniang Pampook shall maintain liaison with the Batasang
Decree creating the autonomous governments of Mindanao persuades us that Pambansa. 34
they were never meant to exercise autonomy in the second sense, that is, in
which the central government commits an act of self-immolation. Presidential Hence, we assume jurisdiction. And if we can make an inquiry in the validity of
Decree No. 1618, in the first place, mandates that "[t]he President shall have the expulsion in question, with more reason can we review the petitioner's
the power of general supervision and control over Autonomous Regions."33 In removal as Speaker.
the future in violation of the Rules, or otherwise to prevent the lawful meetings
Briefly, the petitioner assails the legality of his ouster as Speaker on the thereof.
grounds that: (1) the Sanggunian, in convening on November 2 and 5, 1987
(for the sole purpose of declaring the office of the Speaker vacant), did so in Neither are we, by this disposition, discouraging the Sanggunian from
violation of the Rules of the Sangguniang Pampook since the Assembly was reorganizing itself pursuant to its lawful prerogatives. Certainly, it can do so at
then on recess; and (2) assuming that it was valid, his ouster was ineffective the proper time. In the event that be petitioner should initiate obstructive
nevertheless for lack of quorum. moves, the Court is certain that it is armed with enough coercive remedies to
thwart them. 39
Upon the facts presented, we hold that the November 2 and 5, 1987 sessions
were invalid. It is true that under Section 31 of the Region XII Sanggunian In view hereof, we find no need in dwelling on the issue of quorum.
Rules, "[s]essions shall not be suspended or adjourned except by direction of
the Sangguniang Pampook," 35 but it provides likewise that "the Speaker WHEREFORE, premises considered, the petition is GRANTED. The
may, on [sic] his discretion, declare a recess of "short intervals." 36 Of course, Sangguniang Pampook, Region XII, is ENJOINED to (1) REINSTATE the
there is disagreement between the protagonists as to whether or not the petitioner as Member, Sangguniang Pampook, Region XII; and (2)
recess called by the petitioner effective November 1 through 15, 1987 is the REINSTATE him as Speaker thereof. No costs.
"recess of short intervals" referred to; the petitioner says that it is while the
respondents insist that, to all intents and purposes, it was an adjournment and SO ORDERED.
that "recess" as used by their Rules only refers to "a recess when arguments
get heated up so that protagonists in a debate can talk things out informally 4. Disomangcop v. Datumanong
and obviate dissenssion [sic] and disunity. 37 The Court agrees with the
respondents on this regard, since clearly, the Rules speak of "short intervals." [G.R. No. 149848. November 25, 2004]
Secondly, the Court likewise agrees that the Speaker could not have validly
called a recess since the Assembly had yet to convene on November 1, the ARSADI M. DISOMANGCOP and RAMIR M. DIMALOTANG, petitioners, vs.
date session opens under the same Rules. 38 Hence, there can be no recess THE SECRETARY OF THE DEPARTMENT OF PUBLIC WORKS AND
to speak of that could possibly interrupt any session. But while this opinion is HIGHWAYS SIMEON A. DATUMANONG and THE SECRETARY OF
in accord with the respondents' own, we still invalidate the twin sessions in BUDGET and MANAGEMENT EMILIA T. BONCODIN, respondents.
question, since at the time the petitioner called the "recess," it was not a settled DECISION
matter whether or not he could. do so. In the second place, the invitation TINGA, J.:
tendered by the Committee on Muslim Affairs of the House of Representatives
provided a plausible reason for the intermission sought. Thirdly, assuming that At stake in the present case is the fate of regional autonomy for Muslim
a valid recess could not be called, it does not appear that the respondents Mindanao which is the epoch-making, Constitution-based project for achieving
called his attention to this mistake. What appears is that instead, they opened national unity in diversity.
the sessions themselves behind his back in an apparent act of mutiny. Under
the circumstances, we find equity on his side. For this reason, we uphold the Challenged in the instant petition for certiorari, prohibition and mandamus with
"recess" called on the ground of good faith. prayer for a temporary restraining order and/or writ of preliminary injunction[1]
(Petition) are the constitutionality and validity of Republic Act No. 8999 (R.A.
It does not appear to us, moreover, that the petitioner had resorted to the 8999),[2] entitled An Act Establishing An Engineering District in the First
aforesaid "recess" in order to forestall the Assembly from bringing about his District of the Province of Lanao del Sur and Appropriating Funds Therefor,
ouster. This is not apparent from the pleadings before us. We are convinced and Department of Public Works and Highways (DPWH) Department Order
that the invitation was what precipitated it. No. 119 (D.O. 119)[3] on the subject, Creation of Marawi Sub-District
Engineering Office.
In holding that the "recess" in question is valid, we are not to be taken as
establishing a precedent, since, as we said, a recess can not be validly The Background
declared without a session having been first opened. In upholding the
petitioner herein, we are not giving him a carte blanche to order recesses in The uncontested legal and factual antecedents of the case follow.
For the first time in its history after three Constitutions, the Philippines ordained
the establishment of regional autonomy with the adoption of the 1987 Subject: Creation of Marawi Sub-District Engineering Office
Constitution. Sections 1[4] and 15, Article X mandate the creation of
autonomous regions in Muslim Mindanao and in the Cordilleras. Section 15 Pursuant to Sections 6 and 25 of Executive Order No. 124 dated 30 January
specifically provides that [t]here shall be created autonomous regions in 1987, there is hereby created a DPWH Marawi Sub-District Engineering Office
Muslim Mindanao and in the Cordilleras consisting of provinces, cities, which shall have jurisdiction over all national infrastructure projects and
municipalities, and geographical areas sharing common and distinctive facilities under the DPWH within Marawi City and the province of Lanao del
historical and cultural heritage, economic and social structures, and other Sur. The headquarters of the Marawi Sub-District Engineering Office shall be
relevant characteristics within the framework of this Constitution and the at the former quarters of the Marawi City Engineering Office.
national sovereignty as well as territorial integrity of the Republic of the
Philippines. To effectuate this mandate, the Charter devotes a number of Personnel of the above-mentioned Sub-District Engineering Office shall be
provisions under Article X.[5] made up of employees of the National Government Section of the former
Marawi City Engineering Office who are now assigned with the Iligan City Sub-
Pursuant to the constitutional mandate, Republic Act No. 6734 (R.A. 6734), District Engineering Office as may be determined by the DPWH Region XII
entitled An Act Providing for An Organic Act for the Autonomous Region in Regional Director. (Emphasis supplied)
Muslim Mindanao, was enacted and signed into law on 1 August 1989. The
law called for the holding of a plebiscite in the provinces of Basilan, Cotabato, Almost two (2) years later, on 17 January 2001, then President Joseph E.
Davao del Sur, Lanao del Norte, Lanao del Sur, Maguindanao, Palawan, South Estrada approved and signed into law R.A. 8999. The text of the law reads:
Cotabato, Sultan Kudarat, Sulu, Tawi-Tawi, Zamboanga del Norte, and
Zamboanga del Sur, and the cities of Cotabato, Dapitan, Dipolog, General AN ACT ESTABLISHING AN ENGINEERING DISTRICT IN THE FIRST
Santos, Iligan, Marawi, Pagadian, Puerto Princesa and Zamboanga.[6] In the DISTRICT OF THE PROVINCE OF LANAO DEL SUR AND
ensuing plebiscite held on 19 November 1989, only four (4) provinces voted APPROPRIATING FUNDS THEREFOR
for the creation of an autonomous region, namely: Lanao del Sur,
Maguindanao, Sulu and Tawi-Tawi. These provinces became the Autonomous Be it enacted by the Senate and House of Representatives of the Philippines
Region in Muslim Mindanao (ARMM).[7] The law contains elaborate provisions in Congress assembled:
on the powers of the Regional Government and the areas of jurisdiction which
are reserved for the National Government.[8] SECTION 1. The City of Marawi and the municipalities comprising the First
District of the Province of Lanao del Sur are hereby constituted into an
In accordance with R.A. 6734, then President Corazon C. Aquino issued on engineering district to be known as the First Engineering District of the
12 October 1990, Executive Order No. 426 (E.O. 426), entitled Placing the Province of Lanao del Sur.
Control and Supervision of the Offices of the Department of Public Works and
Highways within the Autonomous Region in Muslim Mindanao under the SEC. 2. The office of the engineering district hereby created shall be
Autonomous Regional Government, and for other purposes. Sections 1 to 3[9] established in Marawi City, Province of Lanao del Sur.
of the Executive Order are its operative provisions.
SEC. 3. The amount necessary to carry out the provisions of this Act shall be
ARMM was formally organized on 6 November 1990. President Corazon C. included in the General Appropriations Act of the year following its enactment
Aquino flew to Cotabato, the seat of the Regional Government, for the into law. Thereafter, such sums as may be necessary for the maintenance and
inauguration. At that point, she had already signed seven (7) Executive Orders continued operation of the engineering district office shall be included in the
devolving to ARMM the powers of seven (7) cabinet departments, namely: (1) annual General Appropriations Act.
local government; (2) labor and employment; (3) science and technology; (4)
public works and highways; (5) social welfare and development; (6) tourism; SEC. 4. This Act shall take effect upon its approval. (Emphasis supplied)
and (7) environment and national resources.[10]
Congress later passed Republic Act No. 9054 (R.A. 9054), entitled An Act to
Nearly nine (9) years later, on 20 May 1999, then Department of Public Works Strengthen and Expand the Organic Act for the Autonomous Region in Muslim
and Highways (DPWH) Secretary Gregorio R. Vigilar issued D.O. 119 which Mindanao, Amending for the Purpose Republic Act No. 6734, entitled An Act
reads, thus: Providing for the Autonomous Region in Muslim Mindanao, as Amended. Like
its forerunner, R.A. 9054 contains detailed provisions on the powers of the
Regional Government and the retained areas of governance of the National Petitioners also contend that R.A. 8999 is a piece of legislation that was not
Government.[11] intelligently and thoroughly studied, and that the explanatory note to House Bill
No. 995 (H.B. 995) from which the law originated is questionable. Petitioners
R.A. 9054 lapsed into law[12] on 31 March 2001. It was ratified in a plebiscite assert as well that prior to the sponsorship of the law, no public hearing nor
held on 14 August 2001. The province of Basilan and the City of Marawi also consultation with the DPWH-ARMM was made. The House Committee on
voted to join ARMM on the same date. R.A. 6734 and R.A. 9054 are Public Works and Highways (Committee) failed to invite a single official from
collectively referred to as the ARMM Organic Acts. the affected agency. Finally, petitioners argue that the law was skillfully timed
for signature by former President Joseph E. Estrada during the pendency of
On 23 July 2001, petitioners Arsadi M. Disomangcop (Disomangcop) and the impeachment proceedings.[17]
Ramir M. Dimalotang (Dimalotang) addressed a petition to then DPWH
Secretary Simeon A. Datumanong, seeking the revocation of D.O. 119 and the In its resolution of 8 October 2001, the Court required respondents to file their
non-implementation of R.A. 8999. No action, however, was taken on the comment.[18] In compliance, respondents DPWH Secretary and DBM
petition.[13] Secretary, through the Solicitor General, filed on 7 January 2002, their
Comment.
Consequently, petitioners Disomangcop and Dimalotang filed the instant
petition, in their capacity as Officer-in-Charge and District Engineer/Engineer In their Comment,[19] respondents, through the Office of the Solicitor General,
II, respectively, of the First Engineering District of the Department of Public maintain the validity of D.O. 119, arguing that it was issued in accordance with
Works and Highways, Autonomous Region in Muslim Mindanao (DPWH- Executive Order No. 124 (E.O. 124).[20] In defense of the constitutionality of
ARMM) in Lanao del Sur. R.A. 8999, they submit that the powers of the autonomous regions did not
diminish the legislative power of Congress.[21] Respondents also contend that
Petitioners seek the following principal reliefs: (1) to annul and set aside D.O. the petitioners have no locus standi or legal standing to assail the
119; (2) to prohibit respondent DPWH Secretary from implementing D.O. 119 constitutionality of the law and the department order. They note that petitioners
and R.A. 8999 and releasing funds for public works projects intended for Lanao have no personal stake in the outcome of the controversy.[22]
del Sur and Marawi City to the Marawi Sub-District Engineering Office and
other administrative regions of DPWH; and (3) to compel the Secretary of the Asserting their locus standi, petitioners in their Memorandum[23] point out that
Department of Budget and Management (DBM) to release all funds for public they will suffer actual injury as a result of the enactments complained of.[24]
works projects intended for Marawi City and the First District of Lanao del Sur
to the DPWH-ARMM First Engineering District in Lanao del Sur only; and to Jurisdictional Considerations
compel respondent DPWH Secretary to let the DPWH-ARMM First
Engineering District in Lanao del Sur implement all public works projects within First, the jurisdictional predicates.
its jurisdictional area.[14]
The 1987 Constitution is explicit in defining the scope of judicial power. It
The petition includes an urgent application for the issuance of a temporary establishes the authority of the courts to determine in an appropriate action the
restraining order (TRO) and, after hearing, a writ of preliminary injunction, to validity of acts of the political departments. It speaks of judicial prerogative in
enjoin respondent DBM Secretary from releasing funds for public works terms of duty.[25]
projects in Lanao del Sur to entities other than the DPWH-ARMM First
Engineering District in Lanao del Sur, and also to restrain the DPWH Secretary Jurisprudence has laid down the following requisites for the exercise of judicial
from allowing others besides the DPWH-ARMM First Engineering District in power: First, there must be before the Court an actual case calling for the
Lanao del Sur to implement public works projects in Lanao del Sur.[15] exercise of judicial review. Second, the question before the Court must be ripe
for adjudication. Third, the person challenging the validity of the act must have
To support their petition, petitioners allege that D.O. 119 was issued with grave standing to challenge. Fourth, the question of constitutionality must have been
abuse of discretion and that it violates the constitutional autonomy of the raised at the earliest opportunity. Fifth, the issue of constitutionality must be
ARMM. They point out that the challenged Department Order has tasked the the very lis mota of the case.[26]
Marawi Sub-District Engineering Office with functions that have already been
devolved to the DPWH-ARMM First Engineering District in Lanao del Sur.[16]
In seeking to nullify acts of the legislature and the executive department on the supervising and implementing all public works projects to be undertaken and
ground that they contravene the Constitution, the petition no doubt raises a being undertaken in Lanao del Sur which is the area of their jurisdiction.[33]
justiciable controversy. As held in Taada v. Angara,[27] where an action of the
legislative branch is seriously alleged to have infringed the Constitution, it It is thus not far-fetched that the creation of the Marawi Sub-District
becomes not only the right but in fact the duty of the judiciary to settle the Engineering Office under D.O. 119 and the creation of and appropriation of
dispute. But in deciding to take jurisdiction over this petition questioning acts funds to the First Engineering District of Lanao del Sur as directed under R.A.
of the political departments of government, the Court will not review the 8999 will affect the powers, functions and responsibilities of the petitioners and
wisdom, merits, or propriety thereof, but will strike them down only on either of the DPWH-ARMM. As the two offices have apparently been endowed with
two grounds: (1) unconstitutionality or illegality and (2) grave abuse of functions almost identical to those of DPWH-ARMM First Engineering District
discretion.[28] in Lanao del Sur, it is likely that petitioners are in imminent danger of being
eased out of their duties and, not remotely, even their jobs. Their material and
For an abuse to be grave, the power must be exercised in an arbitrary or substantial interests will definitely be prejudiced by the enforcement of D.O.
despotic manner by reason of passion or personal hostility. The abuse of 119 and R.A. 8999. Such injury is direct and immediate. Thus, they can
discretion must be patent and gross as to amount to an evasion of a positive legitimately challenge the validity of the enactments subject of the instant case.
duty, or a virtual refusal to perform the duty enjoined or to act in contemplation
of law. There is grave abuse of discretion when respondent acts in a capricious Points of Contention
or whimsical manner in the exercise of its judgment as to be equivalent to lack
of jurisdiction.[29] In the petition before us, petitioners contend that R.A. 8999 and D.O. 119 are
unconstitutional and were issued with grave abuse of discretion.
The challenge to the legal standing of petitioners cannot succeed. Legal
standing or locus standi is defined as a personal and substantial interest in the We agree in part.
case such that the party has sustained or will sustain direct injury as a result
of the governmental act that is being challenged. The term interest means a Republic Act No. 8999
material interest, an interest in issue affected by the decree, as distinguished
from a mere interest in the question involved, or a mere incidental interest.[30] At the outset, let it be made clear that it is not necessary to declare R.A. No.
8999 unconstitutional for the adjudication of this case. The accepted rule is
A party challenging the constitutionality of a law, act, or statute must show not that the Court will not resolve a constitutional question unless it is the lis mota
only that the law is invalid, but also that he has sustained or is in immediate, of the case, or if the case can be disposed of or settled on other grounds.[34]
or imminent danger of sustaining some direct injury as a result of its
enforcement, and not merely that he suffers thereby in some indefinite way. The plain truth is the challenged law never became operative and was
He must show that he has been, or is about to be, denied some right or superseded or repealed by a subsequent enactment.
privilege to which he is lawfully entitled, or that he is about to be subjected to
some burdens or penalties by reason of the statute complained of.[31] The ARMM Organic Acts are deemed a part of the regional autonomy scheme.
While they are classified as statutes, the Organic Acts are more than ordinary
But following the new trend, this Court is inclined to take cognizance of a suit statutes because they enjoy affirmation by a plebiscite.[35] Hence, the
although it does not satisfy the requirement of legal standing when paramount provisions thereof cannot be amended by an ordinary statute, such as R.A.
interests are involved. In several cases, the Court has adopted a liberal stance 8999 in this case. The amendatory law has to be submitted to a plebiscite.
on the locus standi of a petitioner where the petitioner is able to craft an issue
of transcendental significance to the people.[32] We quote excerpts of the deliberations of the Constitutional Commission:

In the instant case, petitioner Disomangcop holds the position of Engineer IV. FR. BERNAS. Yes, that is the reason I am bringing this up. This thing involves
When he filed this petition, he was the Officer-in-Charge, Office of the District some rather far-reaching consequences also in relation to the issue raised by
Engineer of the First Engineering District of DPWH-ARMM, Lanao del Sur. On Commissioner Romulo with respect to federalism. Are we, in effect, creating
the other hand, petitioner Dimalotang is an Engineer II and President of the new categories of laws? Generally, we have statutes and constitutional
rank and file employees also of the First Engineering District of DPWH-ARMM provisions. Is this organic act equivalent to a constitutional provision? If it is
in Lanao del Sur. Both are charged with the duty and responsibility of going to be equivalent to a constitutional provision, it would seem to me that
the formulation of the provisions of the organic act will have to be done by the Although R.A. 9054 was enacted later, it reaffirmed the imperativeness of the
legislature, acting as a constituent assembly, and therefore, subject to the plebiscite requirement.[37] In fact, R.A. 9054 itself, being the second or later
provisions of the Article on Amendments. That is the point that I am trying to ARMM Organic Act, was subjected to and ratified in a plebiscite.
bring up. In effect, if we opt for federalism, it would really involve an act of the
National Assembly or Congress acting as a constituent assembly and present The first ARMM Organic Act, R.A. 6074, as implemented by E.O. 426,
amendments to this Constitution, and the end product itself would be a devolved the functions of the DPWH in the ARMM which includes Lanao del
constitutional provision which would only be amendable according to the Sur (minus Marawi City at the time)[38] to the Regional Government. By
processes indicated in the Constitution. creating an office with previously devolved functions, R.A. 8999, in essence,
sought to amend R.A. 6074. The amendatory law should therefore first obtain
MR. OPLE. Madam President, may I express my personal opinion in this the approval of the people of the ARMM before it could validly take effect.
respect. Absent compliance with this requirement, R.A. 8999 has not even become
operative.
I think to require Congress to act as a constituent body before enacting an
organic act would be to raise an autonomous region to the same level as the From another perspective, R.A. 8999 was repealed and superseded by R.A.
sovereign people of the whole country. And I think the powers of the Congress 9054. Where a statute of later date clearly reveals an intention on the part of
should be quite sufficient in enacting a law, even if it is now exalted to the level the legislature to abrogate a prior act on the subject, that intention must be
of an organic act for the purpose of providing a basic law for an autonomous given effect.
region without having to transform itself into a constituent assembly. We are
dealing still with one subordinate subdivision of the State even if it is now Of course, the intention to repeal must be clear and manifest.[39] Implied
vested with certain autonomous powers on which its own legislature can pass repeal by irreconcilable inconsistency takes place when the two statutes cover
laws. the same subject matter; they are clearly inconsistent and incompatible with
each other that they cannot be reconciled or harmonized; and both cannot be
FR. BERNAS. So the questions I have raised so far with respect to this organic given effect, that is, that one law cannot be enforced without nullifying the
act are: What segment of the population will participate in the plebiscite? In other.[40]
what capacity would the legislature be acting when it passes this? Will it be a
constituent assembly or merely a legislative body? What is the nature, The Court has also held that statutes should be construed in light of the
therefore, of this organic act in relation to ordinary statutes and the objective to be achieved and the evil or mischief to be suppressed, and they
Constitution? Finally, if we are going to amend this organic act, what process should be given such construction as will advance the object, suppress the
will be followed? mischief and secure the benefits intended.[41]

MR. NOLLEDO. May I answer that, please, in the light of what is now R.A. 9054 is anchored on the 1987 Constitution. It advances the constitutional
appearing in our report. grant of autonomy by detailing the powers of the ARG covering, among others,
Lanao del Sur and Marawi City, one of which is its jurisdiction over regional
First, only the people who are residing in the units composing the regions urban and rural planning. R.A. 8999, however, ventures to reestablish the
should be allowed to participate in the plebiscite. Second, the organic act has National Governments jurisdiction over infrastructure programs in Lanao del
the character of a charter passed by the Congress, not as a constituent Sur. R.A. 8999 is patently inconsistent with R.A. 9054, and it destroys the latter
assembly, but as an ordinary legislature and, therefore, the organic act will still laws objective.
be subject to amendments in the ordinary legislative process as now
constituted, unless the Gentlemen has another purpose. Clearly, R.A. 8999 is antagonistic to and cannot be reconciled with both ARMM
Organic Acts, R.A. 6734 and R.A. 9054. The kernel of the antagonism and
FR. BERNAS. But with plebiscite again. disharmony lies in the regional autonomy which the ARMM Organic Acts
ordain pursuant to the Constitution. On the other hand, R.A. 8999 contravenes
MR. NOLLEDO. Those who will participate in the plebiscite are those who are true decentralization which is the essence of regional autonomy.
directly affected, the inhabitants of the units constitutive of the region.
(Emphasis supplied)[36] Regional Autonomy Under
R.A. 6734 and R.A. 9054
The 1987 Constitution mandates regional autonomy to give a bold and Honorable Commissioners, we wish to impress upon you the gravity of the
unequivocal answer to the cry for a meaningful, effective and forceful decision to be made by every single one of us in this Commission. We have
autonomy.[42] According to Commissioner Jose Nolledo, Chairman of the the overwhelming support of the Bangsa Moro and the Cordillera Constitution.
Committee which drafted the provisions, it is an indictment against the status By this we mean meaningful and authentic regional autonomy. We propose
quo of a unitary system that, to my mind, has ineluctably tied the hands of that we have a separate Article on the autonomous regions for the Bangsa
progress in our country . . . our varying regional characteristics are factors to Moro and Cordillera people clearly spelled out in this Constitution, instead of
capitalize on to attain national strength through decentralization.[43] prolonging the agony of their vigil and their struggle. This, too is a plea for
national peace. Let us not pass the buck to the Congress to decide on this. Let
The idea behind the Constitutional provisions for autonomous regions is to us not wash our hands of our responsibility to attain national unity and peace
allow the separate development of peoples with distinctive cultures and and to settle this problem and rectify past injustices, once and for all.[50]
traditions.[44] These cultures, as a matter of right, must be allowed to
flourish.[45] The need for regional autonomy is more pressing in the case of the Filipino
Muslims and the Cordillera people who have been fighting for it. Their political
Autonomy, as a national policy, recognizes the wholeness of the Philippine struggle highlights their unique cultures and the unresponsiveness of the
society in its ethnolinguistic, cultural, and even religious diversities. It strives unitary system to their aspirations.[51] The Moros struggle for self-
to free Philippine society of the strain and wastage caused by the determination dates as far back as the Spanish conquest in the Philippines.
assimilationist approach.[46] Policies emanating from the legislature are Even at present, the struggle goes on.[52]
invariably assimilationist in character despite channels being open for minority
representation. As a result, democracy becomes an irony to the minority Perforce, regional autonomy is also a means towards solving existing serious
group.[47] peace and order problems and secessionist movements. Parenthetically,
autonomy, decentralization and regionalization, in international law, have
Several commissioners echoed the pervasive sentiment in the plenary become politically acceptable answers to intractable problems of nationalism,
sessions in their own inimitable way. Thus, Commissioner Blas Ople referred separatism, ethnic conflict and threat of secession.[53]
to the recognition that the Muslim Mindanao and the Cordilleras do not belong
to the dominant national community as the justification for conferring on them However, the creation of autonomous regions does not signify the
a measure of legal self-sufficiency, meaning self-government, so that they will establishment of a sovereignty distinct from that of the Republic, as it can be
flourish politically, economically and culturally, with the hope that after installed only within the framework of this Constitution and the national
achieving parity with the rest of the country they would give up their own sovereignty as well as territorial integrity of the Republic of the Philippines.[54]
autonomous region in favor of joining the national mainstream.[48] For his part,
the Muslim delegate, Commissioner Ahmad Alonto, spoke of the diversity of Regional autonomy is the degree of self-determination exercised by the local
cultures as the framework for nation-building.[49] Finally, excerpts of the government unit vis--vis the central government.
poignant plea of Commissioner Ponciano Bennagen deserve to be quoted
verbatim: In international law, the right to self-determination need not be understood as
a right to political separation, but rather as a complex net of legal-political
. . . They see regional autonomy as the answer to their centuries of struggle relations between a certain people and the state authorities. It ensures the
against oppression and exploitation. For so long, their names and identities right of peoples to the necessary level of autonomy that would guarantee the
have been debased. Their ancestral lands have been ransacked for their support of their own cultural identity, the establishment of priorities by the
treasures, for their wealth. Their cultures have been defiled, their very lives communitys internal decision-making processes and the management of
threatened, and worse, extinguished, all in the name of national development; collective matters by themselves.[55]
all in the name of public interest; all in the name of common good; all in the
name of the right to property; all in the name of Regalian Doctrine; all in the If self-determination is viewed as an end in itself reflecting a preference for
name of national security. These phrases have meant nothing to our homogeneous, independent nation-states, it is incapable of universal
indigenous communities, except for the violation of their human rights. application without massive disruption. However, if self-determination is
viewed as a means to an endthat end being a democratic, participatory political
... and economic system in which the rights of individuals and the identity of
minority communities are protectedits continuing validity is more easily issues in which the territorial integrity and the solidarity of this country are being
perceived.[56] put at stake, in a manner of speaking.

Regional autonomy refers to the granting of basic internal government powers We are writing a peace Constitution. We hope that the Article on Social Justice
to the people of a particular area or region with least control and supervision can contribute to a climate of peace so that any civil strife in the countryside
from the central government.[57] can be more quickly and more justly resolved. We are providing for
autonomous regions so that we give constitutional permanence to the just
The objective of the autonomy system is to permit determined groups, with a demands and grievances of our own fellow countrymen in the Cordilleras and
common tradition and shared social-cultural characteristics, to develop freely in Mindanao. One hundred thousand lives were lost in that struggle in
their ways of life and heritage, exercise their rights, and be in charge of their Mindanao, and to this day, the Cordilleras is being shaken by an armed
own business. This is achieved through the establishment of a special struggle as well as a peaceful and militant struggle.
governance regime for certain member communities who choose their own
authorities from within the community and exercise the jurisdictional authority ...
legally accorded to them to decide internal community affairs.[58]
Rather than give opportunity to foreign bodies, no matter how sympathetic to
In the Philippine setting, regional autonomy implies the cultivation of more the Philippines, to contribute to the settlement of this issue, I think the
positive means for national integration. It would remove the wariness among Constitutional Commission ought not to forego the opportunity to put the stamp
the Muslims, increase their trust in the government and pave the way for the of this Commission through definitive action on the settlement of the problems
unhampered implementation of the development programs in the region.[59] that have nagged us and our forefathers for so long.[62]
Again, even a glimpse of the deliberations of the Constitutional Commission
could lend a sense of the urgency and the inexorable appeal of true A necessary prerequisite of autonomy is decentralization.[63]
decentralization:
Decentralization is a decision by the central government authorizing its
MR. OPLE. . . . We are writing a Constitution, of course, for generations to subordinates, whether geographically or functionally defined, to exercise
come, not only for the present but for our posterity. There is no harm in authority in certain areas. It involves decision-making by subnational units. It
recognizing certain vital pragmatic needs for national peace and solidarity, and is typically a delegated power, wherein a larger government chooses to
the writing of this Constitution just happens at a time when it is possible for this delegate certain authority to more local governments. Federalism implies
Commission to help the cause of peace and reconciliation in Mindanao and some measure of decentralization, but unitary systems may also decentralize.
the Cordilleras, by taking advantage of a heaven-sent opportunity. . . . [60] Decentralization differs intrinsically from federalism in that the sub-units that
have been authorized to act (by delegation) do not possess any claim of right
... against the central government.[64]

MR. ABUBAKAR. . . . So in order to foreclose and convince the rest of the of Decentralization comes in two formsdeconcentration and devolution.
the Philippines that Mindanao autonomy will be granted to them as soon as Deconcentration is administrative in nature; it involves the transfer of functions
possible, more or less, to dissuade these armed men from going outside while or the delegation of authority and responsibility from the national office to the
Mindanao will be under the control of the national government, let us establish regional and local offices. This mode of decentralization is also referred to as
an autonomous Mindanao within our effort and capacity to do so within the administrative decentralization.[65]
shortest possible time. This will be an answer to the Misuari clamor, not only
for autonomy but for independence.[61] Devolution, on the other hand, connotes political decentralization, or the
transfer of powers, responsibilities, and resources for the performance of
... certain functions from the central government to local government units.[66]
This is a more liberal form of decentralization since there is an actual transfer
MR. OPLE. . . . The reason for this abbreviation of the period for the of powers and responsibilities.[67] It aims to grant greater autonomy to local
consideration of the Congress of the organic acts and their passage is that we government units in cognizance of their right to self-government, to make them
live in abnormal times. In the case of Muslim Mindanao and the Cordilleras, self-reliant, and to improve their administrative and technical capabilities.[68]
we know that we deal with questions of war and peace. These are momentous
This Court elucidated the concept of autonomy in Limbona v. Mangelin,[69] substantial and meaningful autonomy is the kind of local self-government
thus: which allows the people of the region or area the power to determine what is
best for their growth and development without undue interference or dictation
Autonomy is either decentralization of administration or decentralization of from the central government.[74]
power. There is decentralization of administration when the central
government delegates administrative powers to political subdivisions in order To this end, Section 16, Article X[75] limits the power of the President over
to broaden the base of government power and in the process to make local autonomous regions.[76] In essence, the provision also curtails the power of
governments more responsive and accountable, and ensure their fullest Congress over autonomous regions.[77] Consequently, Congress will have to
development as self-reliant communities and make them more effective re-examine national laws and make sure that they reflect the Constitutions
partners in the pursuit of national development and social progress. At the adherence to local autonomy. And in case of conflicts, the underlying spirit
same time, it relieves the central government of the burden of managing local which should guide its resolution is the Constitutions desire for genuine local
affairs and enables it to concentrate on national concerns. The President autonomy.[78]
exercises general supervision over them, but only to ensure that local affairs
are administered according to law. He has no control over their acts in the The diminution of Congress powers over autonomous regions was confirmed
sense that he can substitute their judgments with his own. in Ganzon v. Court of Appeals,[79] wherein this Court held that the omission
(of as may be provided by law) signifies nothing more than to underscore local
Decentralization of power, on the other hand, involves an abdication of political governments autonomy from Congress and to break Congress control over
power in the favor of local government units declared to be autonomous. In local government affairs.
that case, the autonomous government is free to chart its own destiny and
shape its future with minimum intervention from central authorities. According This is true to subjects over which autonomous regions have powers, as
to a constitutional author, decentralization of power amounts to self- specified in Sections 18 and 20, Article X of the 1987 Constitution. Expressly
immolation, since in that event the autonomous government becomes not included therein are powers over certain areas. Worthy of note is that the
accountable not to the central authorities but to its constituency. area of public works is not excluded and neither is it reserved for the National
Government. The key provisions read, thus:
In the case, the Court reviewed the expulsion of a member from the
Sangguniang Pampook, Autonomous Region. It held that the Court may SEC. 18. The Congress shall enact an organic act for each autonomous region
assume jurisdiction as the local government unit, organized before 1987, with the assistance and participation of the regional consultative commission
enjoys autonomy of the former category. It refused, though, to resolve whether composed of representatives appointed by the President from a list of
the grant of autonomy to Muslim Mindanao under the 1987 Constitution nominees from multisectoral bodies. The organic act shall define the basic
involves, truly, an effort to decentralize power rather than mere structure of government for the region consisting of the executive department
administration.[70] and legislative assembly, both of which shall be elective and representative of
the constituent political units. The organic acts shall likewise provide for special
A year later, in Cordillera Broad Coalition v. Commission on Audit,[71] the courts with personal, family and property law jurisdiction consistent with the
Court, with the same composition, ruled without any dissent that the creation provisions of the Constitution and national laws.
of autonomous regions contemplates the grant of political autonomyan
autonomy which is greater than the administrative autonomy granted to local The creation of the autonomous region shall be effective when approved by
government units. It held that the constitutional guarantee of local autonomy majority of the votes cast by the constituent units in a plebiscite called for the
in the Constitution (Art. X, Sec. 2) refers to administrative autonomy of local purpose, provided that only provinces, cities, and geographic areas voting
government units or, cast in more technical language, the decentralization of favorably in such plebiscite shall be included in the autonomous region.
government authority. On the other hand, the creation of autonomous regions
in Muslim Mindanao and the Cordilleras, which is peculiar to the 1987 SEC. 20. Within its territorial jurisdiction and subject to the provisions of this
Constitution, contemplates the grant of political autonomy and not just Constitution and national laws, the organic act of autonomous regions shall
administrative autonomy to these regions.[72] provide for legislative powers over:

And by regional autonomy, the framers intended it to mean meaningful and (1) Administrative organization;
authentic regional autonomy.[73] As articulated by a Muslim author,
(2) Creation of sources of revenues; 3. Ensure the implementation of laws, policies, programs, rules and regulations
regarding infrastructure projects as well as all public and private physical
(3) Ancestral domain and natural resources; structures within the ARMM;

(4) Personal, family and property relations; 4. Provide technical assistance related to their functions to other agencies
within the ARMM, especially the local government units;
(5) Regional urban and rural planning development;
5. Coordinate with other national and regional government departments,
(6) Economic, social, and tourism development; agencies, institutions and organizations, especially the local government units
within the ARMM in the planning and implementation of infrastructure projects;
(7) Educational policies;
6. Conduct continuing consultations with the local communities, take
(8) Preservation and development of the cultural heritage; and appropriate measures to make the services of the Autonomous Regional
Government responsive to the needs of the general public and recommend
(9) Such other matters as may be authorized by law for the promotion of such appropriate actions as may be necessary; and
general welfare of the people of the region. (Emphasis supplied)
7. Perform such other related duties and responsibilities within the ARMM as
E.O. 426 officially devolved the powers and functions of the DPWH in ARMM may be assigned or delegated by the Regional Governor or as may be
to the Autonomous Regional Government (ARG). Sections 1 and 2 of E.O. 426 provided by law. (Emphasis supplied)
provide:
More importantly, Congress itself through R.A. 9054 transferred and devolved
SECTION 1. Transfer of Control and Supervision. The offices of the the administrative and fiscal management of public works and funds for public
Department of Public Works and Highways (DPWH) within the Autonomous works to the ARG. Section 20, Article VI of R.A. 9054 provides:
Region in Muslim Mindanao (ARMM) including their functions, powers and
responsibilities, personnel, equipment, properties, budgets and liabilities are ARTICLE VI
hereby placed under the control and supervision of the Autonomous Regional
Government. THE LEGISLATIVE DEPARTMENT

In particular, these offices are identified as the four (4) District Engineering SEC. 20. Annual Budget and Infrastructure Funds. The annual budget of the
Offices (DEO) in each of the four provinces respectively and the three (3) Area Regional Government shall be enacted by Regional Assembly. Funds for
Equipment Services (AES) located in Tawi-Tawi, Sulu and Maguindanao infrastructure in the autonomous region allocated by the central government
(Municipality of Sultan Kudarat). or national government shall be appropriated through a Regional Assembly
Public Works Act.
SEC. 2. Functions Transferred. The Autonomous Regional Government shall
be responsible for highways, flood control and water resource development Unless approved by the Regional Assembly, no public works funds allocated
systems, and other public works within the ARMM and shall exercise the by the central government or national government for the Regional
following functions: Government or allocated by the Regional Government from its own revenues
may be disbursed, distributed, realigned, or used in any manner.
1. Undertake and evaluate the planning, design, construction and works
supervision for the infrastructure projects whose location and impact are The aim of the Constitution is to extend to the autonomous peoples, the people
confined within the ARMM; of Muslim Mindanao in this case, the right to self-determinationa right to
choose their own path of development; the right to determine the political,
2. Undertake the maintenance of infrastructure facilities within the ARMM and cultural and economic content of their development path within the framework
supervise the maintenance of such local roads and other infrastructure of the sovereignty and territorial integrity of the Philippine Republic.[80] Self-
facilities receiving financial assistance from the National Government; determination refers to the need for a political structure that will respect the
autonomous peoples uniqueness and grant them sufficient room for self- It is clear from the foregoing provision of law that except for the areas of
expression and self-construction.[81] executive power mentioned therein, all other such areas shall be exercised by
the Autonomous Regional Government (ARG) of the Autonomous Region in
In treading their chosen path of development, the Muslims in Mindanao are to Muslim Mindanao. It is noted that programs relative to infrastructure facilities,
be given freedom and independence with minimum interference from the health, education, women in development, agricultural extension and
National Government. This necessarily includes the freedom to decide on, watershed management do not fall under any of the exempted areas listed in
build, supervise and maintain the public works and infrastructure projects the abovequoted provision of law. Thus, the inevitable conclusion is that all
within the autonomous region. The devolution of the powers and functions of these spheres of executive responsibility have been transferred to the ARG.
the DPWH in the ARMM and transfer of the administrative and fiscal
management of public works and funds to the ARG are meant to be true, Reinforcing the aboveview (sic) are the various executive orders issued by the
meaningful and unfettered. This unassailable conclusion is grounded on a President providing for the devolution of the powers and functions of specified
clear consensus, reached at the Constitutional Commission and ratified by the executive departments of the National Government to the ARG. These are
entire Filipino electorate, on the centrality of decentralization of power as the E.O. Nos. 425 (Department of Labor and Employment, Local Government,
appropriate vessel of deliverance for Muslim Filipinos and the ultimate unity of Tourism, Environment and Natural Resources, Social Welfare and
Muslims and Christians in this country. Development and Science and Technology), 426 (Department of Public Works
and Highways), 459 (Department of Education, Culture and Sports) and 460
With R.A. 8999, however, this freedom is taken away, and the National (Department of Agriculture). The execution of projects on infrastructure,
Government takes control again. The hands, once more, of the autonomous education, women, agricultural extension and watershed management within
peoples are reined in and tied up. the Autonomous Region of Muslim Mindanao normally fall within the
responsibility of one of the aforementioned executive departments of the
The challenged law creates an office with functions and powers which, by National Government, but by virtue of the aforestated EOs, such responsibility
virtue of E.O. 426, have been previously devolved to the DPWH-ARMM, First has been transferred to the ARG.
Engineering District in Lanao del Sur.
E.O. 426 was issued to implement the provisions of the first ARMM Organic
E.O. 426 clearly ordains the transfer of the control and supervision of the Act, R.A. 6734the validity of which this Court upheld in the case of Abbas v.
offices of the DPWH within the ARMM, including their functions, powers and Commission on Elections.[83] In Section 4, Article XVIII of said Act, central
responsibilities, personnel, equipment, properties, and budgets to the ARG. government or national government offices and agencies in the autonomous
Among its other functions, the DPWH-ARMM, under the control of the region which are not excluded under Section 3, Article IV[84] of this Organic
Regional Government shall be responsible for highways, flood control and Act, shall be placed under the control and supervision of the Regional
water resource development systems, and other public works within the Government pursuant to a schedule prescribed by the oversight committee.
ARMM. Its scope of power includes the planning, design, construction and
supervision of public works. According to R.A. 9054, the reach of the Regional Evidently, the intention is to cede some, if not most, of the powers of the
Government enables it to appropriate, manage and disburse all public work national government to the autonomous government in order to effectuate a
funds allocated for the region by the central government. veritable autonomy. The continued enforcement of R.A. 8999, therefore, runs
afoul of the ARMM Organic Acts and results in the recall of powers which have
The use of the word powers in E.O. 426 manifests an unmistakable case of previously been handed over. This should not be sanctioned, elsewise the
devolution. Organic Acts desire for greater autonomy for the ARMM in accordance with
the Constitution would be quelled. It bears stressing that national laws are
In this regard, it is not amiss to cite Opinion No. 120, S. 1991[82] of the subject to the Constitution one of whose state policies is to ensure the
Secretary of Justice on whether the national departments or their counterpart autonomy of autonomous regions. Section 25, Article II of the 1987
departments in the ARG are responsible for implementation of roads, rural Constitution states:
water supply, health, education, women in development, agricultural extension
and watershed management. Referring to Section 2, Article V of R.A. 6734 Sec. 25. The State shall ensure the autonomy of local governments.
which enumerates the powers of the ARG, he states:
R.A. 8999 has made the DPWH-ARMM effete and rendered regional
autonomy illusory with respect to infrastructure projects. The Congressional
Record shows, on the other hand, that the lack of an implementing and generali. As this Court expressed in the case of Leveriza v. Intermediate
monitoring body within the area has hindered the speedy implementation, of Appellate Court,[91] another basic principle of statutory construction mandates
infrastructure projects.[85] Apparently, in the legislatures estimation, the that general legislation must give way to special legislation on the same
existing DPWH-ARMM engineering districts failed to measure up to the task. subject, and generally be so interpreted as to embrace only cases in which the
But if it was indeed the case, the problem could not be solved through the special provisions are not applicable, that specific statute prevails over a
simple legislative creation of an incongruous engineering district for the central general statute and that where two statutes are of equal theoretical application
government in the ARMM. As it was, House Bill No. 995 which ultimately to a particular case, the one designed therefor specially should prevail.
became R.A. 8999 was passed in record time on second reading (not more
than 10 minutes), absolutely without the usual sponsorship speech and E.O. No. 124, upon which D.O. 119 is based, is a general law reorganizing the
debates.[86] The precipitate speed which characterized the passage of R.A. Ministry of Public Works and Highways while E.O. 426 is a special law
8999 is difficult to comprehend since R.A. 8999 could have resulted in the transferring the control and supervision of the DPWH offices within ARMM to
amendment of the first ARMM Organic Act and, therefore, could not take effect the Autonomous Regional Government. The latter statute specifically applies
without first being ratified in a plebiscite. What is more baffling is that in March to DPWH-ARMM offices. E.O. 124 should therefore give way to E.O. 426 in
2001, or barely two (2) months after it enacted R.A. 8999 in January 2001, the instant case.
Congress passed R.A. 9054, the second ARMM Organic Act, where it
reaffirmed the devolution of the DPWH in ARMM, including Lanao del Sur and In any event, the ARMM Organic Acts and their ratification in a plebiscite in
Marawi City, to the Regional Government and effectively repealed R.A. 8999. effect superseded E.O. 124. In case of an irreconcilable conflict between two
laws of different vintages, the later enactment prevails because it is the later
DPWH Department Order No. 119 legislative will.[92]

Now, the question directly related to D.O. 119. Further, in its repealing clause, R.A. 9054 states that all laws, decrees, orders,
rules and regulations, and other issuances or parts thereof, which are
D.O. 119 creating the Marawi Sub-District Engineering Office which has inconsistent with this Organic Act, are hereby repealed or modified
jurisdiction over infrastructure projects within Marawi City and Lanao del Sur accordingly.[93] With the repeal of E.O. 124 which is the basis of D.O. 119, it
is violative of the provisions of E.O. 426. The Executive Order was issued necessarily follows that D.O. 119 was also rendered functus officio by the
pursuant to R.A. 6734which initiated the creation of the constitutionally- ARMM Organic Acts.
mandated autonomous region[87] and which defined the basic structure of the
autonomous government.[88] E.O. 426 sought to implement the transfer of the Grave abuse of discretion
control and supervision of the DPWH within the ARMM to the Autonomous
Regional Government. In particular, it identified four (4) District Engineering Without doubt, respondents committed grave abuse of discretion. They
Offices in each of the four (4) provinces, namely: Lanao del Sur, Maguindanao, implemented R.A. 8999 despite its inoperativeness and repeal. They also put
Sulu and Tawi-Tawi.[89] Accordingly, the First Engineering District of the in place and maintained the DPWH Marawi Sub-District Engineering Office in
DPWH-ARMM in Lanao del Sur has jurisdiction over the public works within accordance with D.O. 119 which has been rendered functus officio by the
the province. ARMM Organic Acts.

The office created under D.O. 119, having essentially the same powers, is a Still, on the issue of grave abuse of discretion, this Court, however, cannot
duplication of the DPWH-ARMM First Engineering District in Lanao del Sur uphold petitioners argument that R.A. 8999 was signed into law under
formed under the aegis of E.O. 426. The department order, in effect, takes suspicious circumstances to support the assertion that there was a capricious
back powers which have been previously devolved under the said executive and whimsical exercise of legislative authority. Once more, this Court cannot
order. D.O. 119 runs counter to the provisions of E.O. 426. The DPWHs order, inquire into the wisdom, merits, propriety or expediency of the acts of the
like spring water, cannot rise higher than its source of powerthe Executive. legislative branch.

The fact that the department order was issued pursuant to E.O. 124signed and Likewise, the alleged lack of consultation or public hearing with the affected
approved by President Aquino in her residual legislative powersis of no agency during the inception of the law does not render the law infirm. This
moment. It is a finely-imbedded principle in statutory construction that a special Court holds that the Congress did not transgress the Constitution nor any
provision or law prevails over a general one.[90] Lex specialis derogant statute or House Rule in failing to invite a resource person from the DPWH-
ARMM during the Committee meeting. Section 27, Rule VII of the Rules of the SANDOVAL-GUTIERREZ, J.:
House[94] only requires that a written notice be given to all the members of a
Committee seven (7) calendar days before a regularly scheduled meeting, In the late 1940s, John Walson, an appliance dealer in Pennsylvania, suffered
specifying the subject matter of the meeting and the names of the invited a decline in the sale of television (tv) sets because of poor reception of signals
resource persons. And it must be emphasized that the questions of who to in his community. Troubled, he built an antenna on top of a nearby mountain.
invite and whether there is a need to invite resource persons during Committee Using coaxial cable lines, he distributed the tv signals from the antenna to the
meetings should be addressed solely to Congress in its plenary legislative homes of his customers. Walsons innovative idea improved his sales and at
powers.[95] the same time gave birth to a new telecommunication system -- the Community
Antenna Television (CATV) or Cable Television.[1]
Conclusion
This technological breakthrough found its way in our shores and, like in its
The repeal of R.A. 8999 and the functus officio state of D.O. 119 provide the country of origin, it spawned legal controversies, especially in the field of
necessary basis for the grant of the writs of certiorari and prohibition sought by regulation. The case at bar is just another occasion to clarify a shady area.
the petitioners. However, there is no similar basis for the issuance of a writ of Here, we are tasked to resolve the inquiry -- may a local government unit (LGU)
mandamus to compel respondent DBM Secretary to release funds regulate the subscriber rates charged by CATV operators within its territorial
appropriated for public works projects in Marawi City and Lanao del Sur to the jurisdiction?
DPWH-ARMM First Engineering District in Lanao del Sur and to compel
respondent DPWH Secretary to allow the DPWH-ARMM, First Engineering This is a petition for review on certiorari filed by Batangas CATV, Inc.
District in Lanao del Sur to implement all public works projects within its (petitioner herein) against the Sangguniang Panlungsod and the Mayor of
jurisdictional area. Section 20, Article VI of R.A. 9054 clearly provides that Batangas City (respondents herein) assailing the Court of Appeals (1)
(f)unds for infrastructure in the autonomous region allocated by the central Decision[2] dated February 12, 1999 and (2) Resolution[3] dated May 26,
government or national government shall only be appropriated through a 1999, in CA-G.R. CV No. 52361.[4] The Appellate Court reversed and set
Regional Assembly Public Works Act passed by the Regional Assembly. There aside the Judgment[5] dated October 29, 1995 of the Regional Trial Court
is no showing that such Regional Assembly Public Works Act has been (RTC), Branch 7, Batangas City in Civil Case No. 4254,[6] holding that neither
enacted. of the respondents has the power to fix the subscriber rates of CATV operators,
such being outside the scope of the LGUs power.
WHEREFORE, considering that Republic Act No. 9054 repealed Republic Act
No. 8999 and rendered DPWH Department Order No. 119 functus officio, the The antecedent facts are as follows:
petition insofar as it seeks the writs of certiorari and prohibition is GRANTED.
Accordingly, let a writ of prohibition ISSUE commanding respondents to desist On July 28, 1986, respondent Sangguniang Panlungsod enacted Resolution
from implementing R.A. 8999 and D.O. 119, and maintaining the DPWH No. 210[7] granting petitioner a permit to construct, install, and operate a CATV
Marawi Sub-District Engineering Office and the First Engineering District of the system in Batangas City. Section 8 of the Resolution provides that petitioner
Province of Lanao del Sur comprising the City of Marawi and the municipalities is authorized to charge its subscribers the maximum rates specified therein,
within the First District of Lanao del Sur. However, the petition insofar as it provided, however, that any increase of rates shall be subject to the approval
seeks a writ of mandamus against respondents is DENIED. of the Sangguniang Panlungsod.[8]

No costs. Sometime in November 1993, petitioner increased its subscriber rates from
P88.00 to P180.00 per month. As a result, respondent Mayor wrote petitioner
SO ORDERED. a letter[9] threatening to cancel its permit unless it secures the approval of
respondent Sangguniang Panlungsod, pursuant to Resolution No. 210.
5. Batangas CATV v. CA
Petitioner then filed with the RTC, Branch 7, Batangas City, a petition for
BATANGAS CATV, INC., petitioner, vs. THE COURT OF APPEALS, THE injunction docketed as Civil Case No. 4254. It alleged that respondent
BATANGAS CITY SANGGUNIANG PANLUNGSOD and BATANGAS CITY Sangguniang Panlungsod has no authority to regulate the subscriber rates
MAYOR, respondents. charged by CATV operators because under Executive Order No. 205, the
DECISION
National Telecommunications Commission (NTC) has the sole authority to convenience, maintain peace and order, improve the morals, and promote the
regulate the CATV operation in the Philippines. prosperity and general welfare of the community and the inhabitants thereof,
and the protection of property therein;
On October 29, 1995, the trial court decided in favor of petitioner, thus:
xxx
WHEREFORE, as prayed for, the defendants, their representatives, agents,
deputies or other persons acting on their behalf or under their instructions, are d) Regulate, fix the license fee for, and tax any business or profession being
hereby enjoined from canceling plaintiffs permit to operate a Cable Antenna carried on and exercised within the territorial jurisdiction of the city, except
Television (CATV) system in the City of Batangas or its environs or in any travel agencies, tourist guides, tourist transports, hotels, resorts, de luxe
manner, from interfering with the authority and power of the National restaurants, and tourist inns of international standards which shall remain
Telecommunications Commission to grant franchises to operate CATV under the licensing and regulatory power of the Ministry of Tourism which shall
systems to qualified applicants, and the right of plaintiff in fixing its service exercise such authority without infringement on the taxing and regulatory
rates which needs no prior approval of the Sangguniang Panlungsod of powers of the city government;
Batangas City.
Under cover of the General Welfare Clause as provided in this section, Local
The counterclaim of the plaintiff is hereby dismissed. No pronouncement as to Government Units can perform just about any power that will benefit their
costs. constituencies. Thus, local government units can exercise powers that are: (1)
expressly granted; (2) necessarily implied from the power that is expressly
IT IS SO ORDERED.[10] granted; (3) necessary, appropriate or incidental for its efficient and effective
governance; and (4) essential to the promotion of the general welfare of their
The trial court held that the enactment of Resolution No. 210 by respondent inhabitants. (Pimentel, The Local Government Code of 1991, p. 46)
violates the States deregulation policy as set forth by then NTC Commissioner
Jose Luis A. Alcuaz in his Memorandum dated August 25, 1989. Also, it Verily, the regulation of businesses in the locality is expressly provided in the
pointed out that the sole agency of the government which can regulate CATV Local Government Code. The fixing of service rates is lawful under the General
operation is the NTC, and that the LGUs cannot exercise regulatory power Welfare Clause.
over it without appropriate legislation.
Resolution No. 210 granting appellee a permit to construct, install and operate
Unsatisfied, respondents elevated the case to the Court of Appeals, docketed a community antenna television (CATV) system in Batangas City as quoted
as CA-G.R. CV No. 52361. earlier in this decision, authorized the grantee to impose charges which cannot
be increased except upon approval of the Sangguniang Bayan. It further
On February 12, 1999, the Appellate Court reversed and set aside the trial provided that in case of violation by the grantee of the terms and
courts Decision, ratiocinating as follows: conditions/requirements specifically provided therein, the City shall have the
right to withdraw the franchise.
Although the Certificate of Authority to operate a Cable Antenna Television
(CATV) System is granted by the National Telecommunications Commission Appellee increased the service rates from EIGHTY EIGHT PESOS (P88.00)
pursuant to Executive Order No. 205, this does not preclude the Sangguniang to ONE HUNDRED EIGHTY PESOS (P180.00) (Records, p. 25) without the
Panlungsod from regulating the operation of the CATV in their locality under approval of appellant. Such act breached Resolution No. 210 which gives
the powers vested upon it by Batas Pambansa Bilang 337, otherwise known appellant the right to withdraw the permit granted to appellee.[11]
as the Local Government Code of 1983. Section 177 (now Section 457
paragraph 3 (ii) of Republic Act 7160) provides: Petitioner filed a motion for reconsideration but was denied.[12]

Section 177. Powers and Duties The Sangguniang Panlungsod shall: Hence, the instant petition for review on certiorari anchored on the following
assignments of error:
a) Enact such ordinances as may be necessary to carry into effect and
discharge the responsibilities conferred upon it by law, and such as shall be I
necessary and proper to provide for health and safety, comfort and
THE COURT OF APPEALS ERRED IN HOLDING THAT THE GENERAL
WELFARE CLAUSE OF THE LOCAL GOVERNMENT CODE AUTHORIZES On July 21, 1979, President Marcos issued Letter of Instruction (LOI) No. 894
RESPONDENT SANGGUNIANG PANLUNGSOD TO EXERCISE THE vesting upon the Chairman of the Board of Communications direct supervision
REGULATORY FUNCTION SOLELY LODGED WITH THE NATIONAL over the operations of Sining Makulay, Inc. Three days after, he issued E.O.
TELECOMMUNICATIONS COMMISSION UNDER EXECUTIVE ORDER NO. No. 546[19] integrating the Board of Communications[20] and the
205, INCLUDING THE AUTHORITY TO FIX AND/OR APPROVE THE Telecommunications Control Bureau[21] to form a single entity to be known as
SERVICE RATES OF CATV OPERATORS; AND the National Telecommunications Commission. Two of its assigned functions
are:
II
a. Issue Certificate of Public Convenience for the operation of communications
THE COURT OF APPEALS ERRED IN REVERSING THE DECISION utilities and services, radio communications systems, wire or wireless
APPEALED FROM AND DISMISSING PETITIONERS COMPLAINT.[13] telephone or telegraph systems, radio and television broadcasting system and
other similar public utilities;
Petitioner contends that while Republic Act No. 7160, the Local Government
Code of 1991, extends to the LGUs the general power to perform any act that b. Establish, prescribe and regulate areas of operation of particular operators
will benefit their constituents, nonetheless, it does not authorize them to of public service communications; and determine and prescribe charges or
regulate the CATV operation. Pursuant to E.O. No. 205, only the NTC has the rates pertinent to the operation of such public utility facilities and services
authority to regulate the CATV operation, including the fixing of subscriber except in cases where charges or rates are established by international bodies
rates. or associations of which the Philippines is a participating member or by bodies
recognized by the Philippine Government as the proper arbiter of such charges
Respondents counter that the Appellate Court did not commit any reversible or rates;
error in rendering the assailed Decision. First, Resolution No. 210 was enacted
pursuant to Section 177(c) and (d) of Batas Pambansa Bilang 337, the Local Although Sining Makulay Inc.s exclusive franchise had a life term of 25 years,
Government Code of 1983, which authorizes LGUs to regulate businesses. it was cut short by the advent of the 1986 Revolution. Upon President Corazon
The term businesses necessarily includes the CATV industry. And second, C. Aquinos assumption of power, she issued E.O. No. 205[22] opening the
Resolution No. 210 is in the nature of a contract between petitioner and CATV industry to all citizens of the Philippines. It mandated the NTC to grant
respondents, it being a grant to the former of a franchise to operate a CATV Certificates of Authority to CATV operators and to issue the necessary
system. To hold that E.O. No. 205 amended its terms would violate the implementing rules and regulations.
constitutional prohibition against impairment of contracts.[14]
On September 9, 1997, President Fidel V. Ramos issued E.O. No. 436[23]
The petition is impressed with merit. prescribing policy guidelines to govern CATV operation in the Philippines. Cast
in more definitive terms, it restated the NTCs regulatory powers over CATV
Earlier, we posed the question -- may a local government unit (LGU) regulate operations, thus:
the subscriber rates charged by CATV operators within its territorial
jurisdiction? A review of pertinent laws and jurisprudence yields a negative SECTION 2. The regulation and supervision of the cable television industry in
answer. the Philippines shall remain vested solely with the National
Telecommunications Commission (NTC).
President Ferdinand E. Marcos was the first one to place the CATV industry
under the regulatory power of the national government.[15] On June 11, 1978, SECTION 3. Only persons, associations, partnerships, corporations or
he issued Presidential Decree (P.D.) No. 1512[16] establishing a monopoly of cooperatives, granted a Provisional Authority or Certificate of Authority by the
the industry by granting Sining Makulay, Inc., an exclusive franchise to operate Commission may install, operate and maintain a cable television system or
CATV system in any place within the Philippines. Accordingly, it terminated all render cable television service within a service area.
franchises, permits or certificates for the operation of CATV system previously
granted by local governments or by any instrumentality or agency of the Clearly, it has been more than two decades now since our national
national government.[17] Likewise, it prescribed the subscriber rates to be government, through the NTC, assumed regulatory power over the CATV
charged by Sining Makulay, Inc. to its customers.[18] industry. Changes in the political arena did not alter the trend. Instead,
subsequent presidential issuances further reinforced the NTCs power. balanced ecology, encourage and support the development of appropriate and
Significantly, President Marcos and President Aquino, in the exercise of their self-reliant, scientific and technological capabilities, improve public morals,
legislative power, issued P.D. No. 1512, E.O. No. 546 and E.O. No. 205. enhance economic prosperity and social justice, promote full employment
Hence, they have the force and effect of statutes or laws passed by among their residents, maintain peace and order, and preserve the comfort
Congress.[24] That the regulatory power stays with the NTC is also clear from and convenience of their inhabitants.
President Ramos E.O. No. 436 mandating that the regulation and supervision
of the CATV industry shall remain vested solely in the NTC. Blacks Law In addition, Section 458 of the same Code specifically mandates:
Dictionary defines sole as without another or others.[25] The logical
conclusion, therefore, is that in light of the above laws and E.O. No. 436, the SECTION 458. Powers, Duties, Functions and Compensation. (a) The
NTC exercises regulatory power over CATV operators to the exclusion of other Sangguniang Panlungsod, as the legislative body of the city, shall enact
bodies. ordinances, approve resolutions and appropriate funds for the general welfare
of the city and its inhabitants pursuant to Section 16 of this Code and in the
But, lest we be misunderstood, nothing herein should be interpreted as to strip proper exercise of the corporate powers of the city as provided for under
LGUs of their general power to prescribe regulations under the general welfare Section 22 of this Code, x x x:
clause of the Local Government Code. It must be emphasized that when E.O.
No. 436 decrees that the regulatory power shall be vested solely in the NTC, The general welfare clause is the delegation in statutory form of the police
it pertains to the regulatory power over those matters which are peculiarly power of the State to LGUs.[28] Through this, LGUs may prescribe regulations
within the NTCs competence, such as, the: (1) determination of rates, (2) to protect the lives, health, and property of their constituents and maintain
issuance of certificates of authority, (3) establishment of areas of operation, peace and order within their respective territorial jurisdictions. Accordingly, we
(4) examination and assessment of the legal, technical and financial have upheld enactments providing, for instance, the regulation of
qualifications of applicant operators, (5) granting of permits for the use of gambling,[29] the occupation of rig drivers,[30] the installation and operation
frequencies, (6) regulation of ownership and operation, (7) adjudication of of pinball machines,[31] the maintenance and operation of cockpits,[32] the
issues arising from its functions, and (8) other similar matters.[26] Within these exhumation and transfer of corpses from public burial grounds,[33] and the
areas, the NTC reigns supreme as it possesses the exclusive power to operation of hotels, motels, and lodging houses[34] as valid exercises by local
regulate -- a power comprising varied acts, such as to fix, establish, or control; legislatures of the police power under the general welfare clause.
to adjust by rule, method or established mode; to direct by rule or restriction;
or to subject to governing principles or laws.[27] Like any other enterprise, CATV operation maybe regulated by LGUs under
the general welfare clause. This is primarily because the CATV system
Coincidentally, respondents justify their exercise of regulatory power over commits the indiscretion of crossing public properties. (It uses public properties
petitioners CATV operation under the general welfare clause of the Local in order to reach subscribers.) The physical realities of constructing CATV
Government Code of 1983. The Court of Appeals sustained their stance. system the use of public streets, rights of ways, the founding of structures, and
the parceling of large regions allow an LGU a certain degree of regulation over
There is no dispute that respondent Sangguniang Panlungsod, like other local CATV operators.[35] This is the same regulation that it exercises over all
legislative bodies, has been empowered to enact ordinances and approve private enterprises within its territory.
resolutions under the general welfare clause of B.P. Blg. 337, the Local
Government Code of 1983. That it continues to posses such power is clear But, while we recognize the LGUs power under the general welfare clause, we
under the new law, R.A. No. 7160 (the Local Government Code of 1991). cannot sustain Resolution No. 210. We are convinced that respondents
Section 16 thereof provides: strayed from the well recognized limits of its power. The flaws in Resolution
No. 210 are: (1) it violates the mandate of existing laws and (2) it violates the
SECTION 16. General Welfare. Every local government unit shall exercise the States deregulation policy over the CATV industry.
powers expressly granted, those necessarily implied therefrom, as well as
powers necessary, appropriate, or incidental for its efficient and effective I.
governance, and those which are essential to the promotion of the general
welfare. Within their respective territorial jurisdictions, local government units Resolution No. 210 is an enactment of an LGU acting only as agent of the
shall ensure and support, among others, the preservation and enrichment of national legislature. Necessarily, its act must reflect and conform to the will of
culture, promote health and safety, enhance the right of the people to a its principal. To test its validity, we must apply the particular requisites of a
valid ordinance as laid down by the accepted principles governing municipal law.[44] In the language of Justice Isagani Cruz (ret.), this Court, in Magtajas
corporations. [36] vs. Pryce Properties Corp., Inc.,[45] ruled that:

Speaking for the Court in the leading case of United States vs. Abendan,[37] The rationale of the requirement that the ordinances should not contravene a
Justice Moreland said: An ordinance enacted by virtue of the general welfare statute is obvious. Municipal governments are only agents of the national
clause is valid, unless it contravenes the fundamental law of the Philippine government. Local councils exercise only delegated legislative powers
Islands, or an Act of the Philippine Legislature, or unless it is against public conferred on them by Congress as the national lawmaking body. The delegate
policy, or is unreasonable, oppressive, partial, discriminating, or in derogation cannot be superior to the principal or exercise powers higher than those of the
of common right. In De la Cruz vs. Paraz,[38] we laid the general rule that latter. It is a heresy to suggest that the local government units can undo the
ordinances passed by virtue of the implied power found in the general welfare acts of Congress, from which they have derived their power in the first place,
clause must be reasonable, consonant with the general powers and purposes and negate by mere ordinance the mandate of the statute.
of the corporation, and not inconsistent with the laws or policy of the State.
Municipal corporations owe their origin to, and derive their powers and rights
The apparent defect in Resolution No. 210 is that it contravenes E.O. No. 205 wholly from the legislature. It breathes into them the breath of life, without
and E.O. No. 436 insofar as it permits respondent Sangguniang Panlungsod which they cannot exist. As it creates, so it may destroy. As it may destroy, it
to usurp a power exclusively vested in the NTC, i.e., the power to fix the may abridge and control. Unless there is some constitutional limitation on the
subscriber rates charged by CATV operators. As earlier discussed, the fixing right, the legislature might, by a single act, and if we can suppose it capable of
of subscriber rates is definitely one of the matters within the NTCs exclusive so great a folly and so great a wrong, sweep from existence all of the municipal
domain. corporations in the State, and the corporation could not prevent it. We know of
no limitation on the right so far as to the corporation themselves are concerned.
In this regard, it is appropriate to stress that where the state legislature has They are, so to phrase it, the mere tenants at will of the legislature.
made provision for the regulation of conduct, it has manifested its intention that
the subject matter shall be fully covered by the statute, and that a municipality, This basic relationship between the national legislature and the local
under its general powers, cannot regulate the same conduct.[39] In Keller vs. government units has not been enfeebled by the new provisions in the
State,[40] it was held that: Where there is no express power in the charter of a Constitution strengthening the policy of local autonomy. Without meaning to
municipality authorizing it to adopt ordinances regulating certain matters which detract from that policy, we here confirm that Congress retains control of the
are specifically covered by a general statute, a municipal ordinance, insofar as local government units although in significantly reduced degree now than
it attempts to regulate the subject which is completely covered by a general under our previous Constitutions. The power to create still includes the power
statute of the legislature, may be rendered invalid. x x x Where the subject is to destroy. The power to grant still includes the power to withhold or recall.
of statewide concern, and the legislature has appropriated the field and True, there are certain notable innovations in the Constitution, like the direct
declared the rule, its declaration is binding throughout the State. A reason conferment on the local government units of the power to tax, which cannot
advanced for this view is that such ordinances are in excess of the powers now be withdrawn by mere statute. By and large, however, the national
granted to the municipal corporation.[41] legislature is still the principal of the local government units, which cannot defy
its will or modify or violate it.
Since E.O. No. 205, a general law, mandates that the regulation of CATV
operations shall be exercised by the NTC, an LGU cannot enact an ordinance Respondents have an ingenious retort against the above disquisition. Their
or approve a resolution in violation of the said law. theory is that the regulatory power of the LGUs is granted by R.A. No. 7160
(the Local Government Code of 1991), a handiwork of the national lawmaking
It is a fundamental principle that municipal ordinances are inferior in status and authority. They contend that R.A. No. 7160 repealed E.O. No. 205 (issued by
subordinate to the laws of the state. An ordinance in conflict with a state law President Aquino). Respondents argument espouses a bad precedent. To say
of general character and statewide application is universally held to be that LGUs exercise the same regulatory power over matters which are
invalid.[42] The principle is frequently expressed in the declaration that peculiarly within the NTCs competence is to promote a scenario of LGUs and
municipal authorities, under a general grant of power, cannot adopt ordinances the NTC locked in constant clash over the appropriate regulatory measure on
which infringe the spirit of a state law or repugnant to the general policy of the the same subject matter. LGUs must recognize that technical matters
state.[43] In every power to pass ordinances given to a municipality, there is concerning CATV operation are within the exclusive regulatory power of the
an implied restriction that the ordinances shall be consistent with the general NTC.
that the intent in enacting the new law was to abrogate the old one. The
At any rate, we find no basis to conclude that R.A. No. 7160 repealed E.O. No. intention to repeal must be clear and manifest; otherwise, at least, as a general
205, either expressly or impliedly. It is noteworthy that R.A. No. 7160 repealing rule, the later act is to be construed as a continuation of, and not a substitute
clause, which painstakingly mentions the specific laws or the parts thereof for, the first act and will continue so far as the two acts are the same from the
which are repealed, does not include E.O. No. 205, thus: time of the first enactment.

SECTION 534. Repealing Clause. (a) Batas Pambansa Blg. 337, otherwise As previously stated, E.O. No. 436 (issued by President Ramos) vests upon
known as the Local Government Code." Executive Order No. 112 (1987), and the NTC the power to regulate the CATV operation in this country. So also
Executive Order No. 319 (1988) are hereby repealed. Memorandum Circular No. 8-9-95, the Implementing Rules and Regulations of
R.A. No. 7925 (the Public Telecommunications Policy Act of the Philippines).
(b) Presidential Decree Nos. 684, 1191, 1508 and such other decrees, orders, This shows that the NTCs regulatory power over CATV operation is
instructions, memoranda and issuances related to or concerning the barangay continuously recognized.
are hereby repealed.
It is a canon of legal hermeneutics that instead of pitting one statute against
(c) The provisions of Sections 2, 3, and 4 of Republic Act No. 1939 regarding another in an inevitably destructive confrontation, courts must exert every
hospital fund; Section 3, a (3) and b (2) of Republic Act. No. 5447 regarding effort to reconcile them, remembering that both laws deserve a becoming
the Special Education Fund; Presidential Decree No. 144 as amended by respect as the handiwork of coordinate branches of the government.[47] On
Presidential Decree Nos. 559 and 1741; Presidential Decree No. 231 as the assumption of a conflict between E.O. No. 205 and R.A. No. 7160, the
amended; Presidential Decree No. 436 as amended by Presidential Decree proper action is not to uphold one and annul the other but to give effect to both
No. 558; and Presidential Decree Nos. 381, 436, 464, 477, 526, 632, 752, and by harmonizing them if possible. This recourse finds application here. Thus,
1136 are hereby repealed and rendered of no force and effect. we hold that the NTC, under E.O. No. 205, has exclusive jurisdiction over
matters affecting CATV operation, including specifically the fixing of subscriber
(d) Presidential Decree No. 1594 is hereby repealed insofar as it governs rates, but nothing herein precludes LGUs from exercising its general power,
locally-funded projects. under R.A. No. 7160, to prescribe regulations to promote the health, morals,
peace, education, good order or safety and general welfare of their
(e) The following provisions are hereby repealed or amended insofar as they constituents. In effect, both laws become equally effective and mutually
are inconsistent with the provisions of this Code: Sections 2, 16, and 29 of complementary.
Presidential Decree No. 704; Section 12 of Presidential Decree No. 87, as
amended; Sections 52, 53, 66, 67, 68, 69, 70, 71, 72, 73, and 74 of Presidential The grant of regulatory power to the NTC is easily understandable. CATV
Decree No. 463, as amended; and Section 16 of Presidential Decree No. 972, system is not a mere local concern. The complexities that characterize this
as amended, and new technology demand that it be regulated by a specialized agency. This is
particularly true in the area of rate-fixing. Rate fixing involves a series of
(f) All general and special laws, acts, city charters, decrees, executive orders, technical operations.[48] Consequently, on the hands of the regulatory body
proclamations and administrative regulations, or part or parts thereof which lies the ample discretion in the choice of such rational processes as might be
are inconsistent with any of the provisions of this Code are hereby repealed or appropriate to the solution of its highly complicated and technical problems.
modified accordingly. Considering that the CATV industry is so technical a field, we believe that the
NTC, a specialized agency, is in a better position than the LGU, to regulate it.
Neither is there an indication that E.O. No. 205 was impliedly repealed by R.A. Notably, in United States vs. Southwestern Cable Co.,[49] the US Supreme
No. 7160. It is a settled rule that implied repeals are not lightly presumed in the Court affirmed the Federal Communications Commissions (FCCs) jurisdiction
absence of a clear and unmistakable showing of such intentions. In Mecano over CATV operation. The Court held that the FCCs authority over cable
vs. Commission on Audit,[46] we ruled: systems assures the preservation of the local broadcast service and an
equitable distribution of broadcast services among the various regions of the
Repeal by implication proceeds on the premise that where a statute of later country.
date clearly reveals an intention on the part of the legislature to abrogate a
prior act on the subject, that intention must be given effect. Hence, before there II.
can be a repeal, there must be a clear showing on the part of the lawmaker
Resolution No. 210 violated the States deregulation policy. enactments of contrary measures. Verily, in the case at bar, petitioner may
increase its subscriber rates without respondents approval.
Deregulation is the reduction of government regulation of business to permit
freer markets and competition.[50] Oftentimes, the State, through its regulatory At this juncture, it bears emphasizing that municipal corporations are bodies
agencies, carries out a policy of deregulation to attain certain objectives or to politic and corporate, created not only as local units of local self-government,
address certain problems. In the field of telecommunications, it is recognized but as governmental agencies of the state.[51] The legislature, by establishing
that many areas in the Philippines are still unserved or underserved. Thus, to a municipal corporation, does not divest the State of any of its sovereignty;
encourage private sectors to venture in this field and be partners of the absolve itself from its right and duty to administer the public affairs of the entire
government in stimulating the growth and development of state; or divest itself of any power over the inhabitants of the district which it
telecommunications, the State promoted the policy of deregulation. possesses before the charter was granted.[52]

In the United States, the country where CATV originated, the Congress Respondents likewise argue that E.O. No. 205 violates the constitutional
observed, when it adopted the Telecommunications Act of 1996, that there prohibition against impairment of contracts, Resolution No. 210 of Batangas
was a need to provide a pro-competitive, deregulatory national policy City Sangguniang Panlungsod being a grant of franchise to petitioner.
framework designed to accelerate rapidly private sector deployment of
advanced telecommunications and information technologies and services to We are not convinced.
all Americans by opening all telecommunications markets to competition. The
FCC has adopted regulations to implement the requirements of the 1996 Act There is no law specifically authorizing the LGUs to grant franchises to operate
and the intent of the Congress. CATV system. Whatever authority the LGUs had before, the same had been
withdrawn when President Marcos issued P.D. No. 1512 terminating all
Our country follows the same policy. The fifth Whereas Clause of E.O. No. 436 franchises, permits or certificates for the operation of CATV system previously
states: granted by local governments. Today, pursuant to Section 3 of E.O. No. 436,
only persons, associations, partnerships, corporations or cooperatives granted
WHEREAS, professionalism and self-regulation among existing operators, a Provisional Authority or Certificate of Authority by the NTC may install,
through a nationally recognized cable television operators association, have operate and maintain a cable television system or render cable television
enhanced the growth of the cable television industry and must therefore be service within a service area. It is clear that in the absence of constitutional or
maintained along with minimal reasonable government regulations; legislative authorization, municipalities have no power to grant franchises.[53]
Consequently, the protection of the constitutional provision as to impairment
This policy reaffirms the NTCs mandate set forth in the Memorandum dated of the obligation of a contract does not extend to privileges, franchises and
August 25, 1989 of Commissioner Jose Luis A. Alcuaz, to wit: grants given by a municipality in excess of its powers, or ultra vires.[54]

In line with the purpose and objective of MC 4-08-88, Cable Television System One last word. The devolution of powers to the LGUs, pursuant to the
or Community Antenna Television (CATV) is made part of the broadcast media Constitutional mandate of ensuring their autonomy, has bred jurisdictional
to promote the orderly growth of the Cable Television Industry it being in its tension between said LGUs and the State. LGUs must be reminded that they
developing stage. Being part of the Broadcast Media, the service rates of merely form part of the whole. Thus, when the Drafters of the 1987 Constitution
CATV are likewise considered deregulated in accordance with MC 06-2-81 enunciated the policy of ensuring the autonomy of local governments,[55] it
dated 25 February 1981, the implementing guidelines for the authorization and was never their intention to create an imperium in imperio and install an intra-
operation of Radio and Television Broadcasting stations/systems. sovereign political subdivision independent of a single sovereign state.

Further, the Commission will issue Provisional Authority to existing CATV WHEREFORE, the petition is GRANTED. The assailed Decision of the Court
operators to authorize their operations for a period of ninety (90) days until of Appeals dated February 12, 1999 as well as its Resolution dated May 26,
such time that the Commission can issue the regular Certificate of Authority. 1999 in CA-G.R. CV No. 52461, are hereby REVERSED. The RTC Decision
in Civil Case No. 4254 is AFFIRMED.
When the State declared a policy of deregulation, the LGUs are bound to
follow. To rule otherwise is to render the States policy ineffective. Being mere No pronouncement as to costs.
creatures of the State, LGUs cannot defeat national policies through
SO ORDERED. b) That all contractual and statutory obligations of the LGU including the
implementation of R.A. 6758 shall have been fully provided in the budget;
II. Power of the President over LGU
c) That the budgetary requirements/limitations under Section 324 and 325 of
6. Dadole v. Commission on Audit R.A. 7160 should be satisfied and/or complied with; and

[G.R. No. 125350. December 3, 2002] d) That the LGU has fully implemented the devolution of functions/personnel
in accordance with R.A. 7160.[3] (italics supplied)
HON. RTC JUDGES MERCEDES G. DADOLE (Executive Judge, Branch 28),
ULRIC R. CAETE (Presiding Judge, Branch 25), AGUSTINE R. VESTIL xxx xxx xxx
(Presiding Judge, Branch 56), HON. MTC JUDGES TEMISTOCLES M.
BOHOLST (Presiding Judge, Branch 1), VICENTE C. FANILAG (Judge The said circular likewise provided for its immediate effectivity without need of
Designate, Branch 2), and WILFREDO A. DAGATAN (Presiding Judge, publication:
Branch 3), all of Mandaue City, petitioners, vs. COMMISSION ON AUDIT,
respondent. 5.0 EFFECTIVITY
DECISION
CORONA, J.: This Circular shall take effect immediately.

Before us is a petition for certiorari under Rule 64 to annul the decision[1] and Acting on the DBM directive, the Mandaue City Auditor issued notices of
resolution[2], dated September 21, 1995 and May 28, 1996, respectively, of disallowance to herein petitioners, namely, Honorable RTC Judges Mercedes
the respondent Commission on Audit (COA) affirming the notices of the G. Dadole, Ulric R. Caete, Agustin R. Vestil, Honorable MTC Judges
Mandaue City Auditor which diminished the monthly additional allowances Temistocles M. Boholst, Vicente C. Fanilag and Wilfredo A. Dagatan, in excess
received by the petitioner judges of the Regional Trial Court (RTC) and of the amount authorized by LBC 55. Beginning October, 1994, the additional
Municipal Trial Court (MTC) stationed in Mandaue City. monthly allowances of the petitioner judges were reduced to P1,000 each.
They were also asked to reimburse the amount they received in excess of
The undisputed facts are as follows: P1,000 from April to September, 1994.

In 1986, the RTC and MTC judges of Mandaue City started receiving monthly The petitioner judges filed with the Office of the City Auditor a protest against
allowances of P1,260 each through the yearly appropriation ordinance the notices of disallowance. But the City Auditor treated the protest as a motion
enacted by the Sangguniang Panlungsod of the said city. In 1991, Mandaue for reconsideration and indorsed the same to the COA Regional Office No. 7.
City increased the amount to P1,500 for each judge. In turn, the COA Regional Office referred the motion to the head office with a
recommendation that the same be denied.
On March 15, 1994, the Department of Budget and Management (DBM) issued
the disputed Local Budget Circular No. 55 (LBC 55) which provided that: On September 21, 1995, respondent COA rendered a decision denying
petitioners motion for reconsideration. The COA held that:
xxx xxx xxx
The issue to be resolved in the instant appeal is whether or not the City
2.3.2. In the light of the authority granted to the local government units under Ordinance of Mandaue which provides a higher rate of allowances to the
the Local Government Code to provide for additional allowances and other appellant judges may prevail over that fixed by the DBM under Local Budget
benefits to national government officials and employees assigned in their Circular No. 55 dated March 15, 1994.
locality, such additional allowances in the form of honorarium at rates not
exceeding P1,000.00 in provinces and cities and P700.00 in municipalities xxx xxx xxx
may be granted subject to the following conditions:
Applying the foregoing doctrine, appropriation ordinance of local government
a) That the grant is not mandatory on the part of the LGUs; units is subject to the organizational, budgetary and compensation policies of
budgetary authorities (COA 5th Ind., dated March 17, 1994 re: Province of
Antique; COA letter dated May 17, 1994 re: Request of Hon. Renato Leviste,
Cong. 1st Dist. Oriental Mindoro). In this regard, attention is invited to xxx xxx xxx[4]
Administrative Order No. 42 issued on March 3, 1993 by the President of the
Philippines clarifying the role of DBM in the compensation and classification of On November 27, 1995, Executive Judge Mercedes Gozo-Dadole, for and in
local government positions under RA No. 7160 vis-avis the provisions of RA behalf of the petitioner judges, filed a motion for reconsideration of the decision
No. 6758 in view of the abolition of the JCLGPA. Section 1 of said of the COA. In a resolution dated May 28, 1996, the COA denied the motion.
Administrative Order provides that:
Hence, this petition for certiorari by the petitioner judges, submitting the
Section 1. The Department of Budget and Management as the lead following questions for resolution:
administrator of RA No. 6758 shall, through its Compensation and Position
Classification Bureau, continue to have the following responsibilities in I
connection with the implementation of the Local Government Code of 1991:
HAS THE CITY OF MANDAUE STATUTORY AND CONSTITUTIONAL BASIS
a) Provide guidelines on the classification of local government positions and TO PROVIDE ADDITIONAL ALLOWANCES AND OTHER BENEFITS TO
on the specific rates of pay therefore; JUDGES STATIONED IN AND ASSIGNED TO THE CITY?

b) Provide criteria and guidelines for the grant of all allowances and additional II
forms of compensation to local government employees; xxx. (underscoring
supplied) CAN AN ADMINISTRATIVE CIRCULAR OR GUIDELINE SUCH AS LOCAL
BUDGET CIRCULAR NO. 55 RENDER INOPERATIVE THE POWER OF THE
To operationalize the aforecited presidential directive, DBM issued LBC No. LEGISLATIVE BODY OF A CITY BY SETTING A LIMIT TO THE EXTENT OF
55, dated March 15, 1994, whose effectivity clause provides that: THE EXERCISE OF SUCH POWER?

xxx xxx xxx III

5.0 EFFECTIVITY HAS THE COMMISSION ON AUDIT CORRECTLY INTERPRETED LOCAL


BUDGET CIRCULAR NO. 55 TO INCLUDE MEMBERS OF THE JUDICIARY
This Circular shall take effect immediately. IN FIXING THE CEILING OF ADDITIONAL ALLOWANCES AND BENEFITS
TO BE PROVIDED TO JUDGES STATIONED IN AND ASSIGNED TO
It is a well-settled rule that implementing rules and regulations promulgated by MANDAUE CITY BY THE CITY GOVERNMENT AT P1,000.00 PER MONTH
administrative or executive officer in accordance with, and as authorized by NOTWITHSTANDING THAT THEY HAVE BEEN RECEIVING
law, has the force and effect of law or partake the nature of a statute (Victorias ALLOWANCES OF P1,500.00 MONTHLY FOR THE PAST FIVE YEARS?
Milling Co., Inc., vs. Social Security Commission, 114 Phil. 555, cited in
Agpalos Statutory Construction, 2nd Ed. P. 16; Justice Cruzs Phil. Political IV
Law, 1984 Ed., p. 103; Espanol vs. Phil Veterans Administration, 137 SCRA
314; Antique Sawmills Inc. vs. Tayco, 17 SCRA 316). IS LOCAL BUDGET CIRCULAR NO. 55 DATED MARCH 15, 1994 ISSUED
BY THE DEPARTMENT OF BUDGET AND MANAGEMENT VALID AND
xxx xxx xxx ENFORCEABLE CONSIDERING THAT IT WAS NOT DULY PUBLISHED IN
ACCODANCE WITH LAW?[5]
There being no statutory basis to grant additional allowance to judges in
excess of P1,000.00 chargeable against the local government units where they Petitioner judges argue that LBC 55 is void for infringing on the local autonomy
are stationed, this Commission finds no substantial grounds or cogent reason of Mandaue City by dictating a uniform amount that a local government unit
to disturb the decision of the City Auditor, Mandaue City, disallowing in audit can disburse as additional allowances to judges stationed therein. They
the allowances in question. Accordingly, the above-captioned appeal of the maintain that said circular is not supported by any law and therefore goes
MTC and RTC Judges of Mandaue City, insofar as the same is not covered by beyond the supervisory powers of the President. They further allege that said
Circular Letter No. 91-7, is hereby dismissed for lack of merit. circular is void for lack of publication.
One such law imposing a limitation on a local government units autonomy is
On the other hand, the yearly appropriation ordinance providing for additional Section 458, par. (a) (1) [xi], of RA 7160, which authorizes the disbursement
allowances to judges is allowed by Section 458, par. (a)(1)[xi], of RA 7160, of additional allowances and other benefits to judges subject to the condition
otherwise known as the Local Government Code of 1991, which provides that: that the finances of the city government should allow the same. Thus, DBM is
merely enforcing the condition of the law when it sets a uniform maximum
Sec. 458. Powers, Duties, Functions and Compensation. (a) The sangguniang amount for the additional allowances that a city government can release to
panlungsod, as the legislative body of the city, shall enact ordinances, approve judges stationed therein.
resolutions and appropriate funds for the general welfare of the city and its
inhabitants pursuant to Section 16 of this Code and in the proper exercise of Assuming arguendo that LBC 55 is void, respondent COA maintains that the
the corporate powers of the city as provided for under Section 22 of this Code, provisions of the yearly approved ordinance granting additional allowances to
and shall: judges are still prohibited by the appropriation laws passed by Congress every
year. COA argues that Mandaue City gets the funds for the said additional
(1) Approve ordinances and pass resolutions necessary for an efficient and allowances of judges from the Internal Revenue Allotment (IRA). But the
effective city government, and in this connection, shall: General Appropriations Acts of 1994 and 1995 do not mention the
disbursement of additional allowances to judges as one of the allowable uses
xxx xxx xxx of the IRA. Hence, the provisions of said ordinance granting additional
allowances, taken from the IRA, to herein petitioner judges are void for being
(xi) When the finances of the city government allow, provide for additional contrary to law.
allowances and other benefits to judges, prosecutors, public elementary and
high school teachers, and other national government officials stationed in or To resolve the instant petition, there are two issues that we must address: (1)
assigned to the city; (italics supplied) whether LBC 55 of the DBM is void for going beyond the supervisory powers
of the President and for not having been published and (2) whether the yearly
Instead of filing a comment on behalf of respondent COA, the Solicitor General appropriation ordinance enacted by the City of Mandaue that provides for
filed a manifestation supporting the position of the petitioner judges. The additional allowances to judges contravenes the annual appropriation laws
Solicitor General argues that (1) DBM only enjoys the power to review and enacted by Congress.
determine whether the disbursements of funds were made in accordance with
the ordinance passed by a local government unit while (2) the COA has no We rule in favor of the petitioner judges.
more than auditorial visitation powers over local government units pursuant to
Section 348 of RA 7160 which provides for the power to inspect at any time On the first issue, we declare LBC 55 to be null and void.
the financial accounts of local government units.
We recognize that, although our Constitution[6] guarantees autonomy to local
Moreover, the Solicitor General opines that the DBM and the respondent are government units, the exercise of local autonomy remains subject to the power
only authorized under RA 7160 to promulgate a Budget Operations Manual for of control by Congress and the power of supervision by the President. Section
local government units, to improve and systematize methods, techniques and 4 of Article X of the 1987 Philippine Constitution provides that:
procedures employed in budget preparation, authorization, execution and
accountability pursuant to Section 354 of RA 7160. The Solicitor General Sec. 4. The President of the Philippines shall exercise general supervision
points out that LBC 55 was not exercised under any of the aforementioned over local governments. x x x
provisions.
In Pimentel vs. Aguirre[7], we defined the supervisory power of the President
Respondent COA, on the other hand, insists that the constitutional and and distinguished it from the power of control exercised by Congress. Thus:
statutory authority of a city government to provide allowances to judges
stationed therein is not absolute. Congress may set limitations on the exercise This provision (Section 4 of Article X of the 1987 Philippine Constitution) has
of autonomy. It is for the President, through the DBM, to check whether these been interpreted to exclude the power of control. In Mondano v. Silvosa,[i][5]
legislative limitations are being followed by the local government units. the Court contrasted the President's power of supervision over local
government officials with that of his power of control over executive officials of
the national government. It was emphasized that the two terms -- supervision
and control -- differed in meaning and extent. The Court distinguished them as units. Hence, the President or any of his or her alter egos cannot interfere in
follows: local affairs as long as the concerned local government unit acts within the
parameters of the law and the Constitution. Any directive therefore by the
"x x x In administrative law, supervision means overseeing or the power or President or any of his or her alter egos seeking to alter the wisdom of a law-
authority of an officer to see that subordinate officers perform their duties. If conforming judgment on local affairs of a local government unit is a patent
the latter fail or neglect to fulfill them, the former may take such action or step nullity because it violates the principle of local autonomy and separation of
as prescribed by law to make them perform their duties. Control, on the other powers of the executive and legislative departments in governing municipal
hand, means the power of an officer to alter or modify or nullify or set aside corporations.
what a subordinate officer ha[s] done in the performance of his duties and to
substitute the judgment of the former for that of the latter."[ii][6] Does LBC 55 go beyond the law it seeks to implement? Yes.

In Taule v. Santos,[iii][7] we further stated that the Chief Executive wielded no LBC 55 provides that the additional monthly allowances to be given by a local
more authority than that of checking whether local governments or their government unit should not exceed P1,000 in provinces and cities and P700
officials were performing their duties as provided by the fundamental law and in municipalities. Section 458, par. (a)(1)(xi), of RA 7160, the law that
by statutes. He cannot interfere with local governments, so long as they act supposedly serves as the legal basis of LBC 55, allows the grant of additional
within the scope of their authority. "Supervisory power, when contrasted with allowances to judges when the finances of the city government allow. The said
control, is the power of mere oversight over an inferior body; it does not include provision does not authorize setting a definite maximum limit to the additional
any restraining authority over such body,"[iv][8] we said. allowances granted to judges. Thus, we need not belabor the point that the
finances of a city government may allow the grant of additional allowances
In a more recent case, Drilon v. Lim,[v][9] the difference between control and higher than P1,000 if the revenues of the said city government exceed its
supervision was further delineated. Officers in control lay down the rules in the annual expenditures. Thus, to illustrate, a city government with locally
performance or accomplishment of an act. If these rules are not followed, they generated annual revenues of P40 million and expenditures of P35 million can
may, in their discretion, order the act undone or redone by their subordinates afford to grant additional allowances of more than P1,000 each to, say, ten
or even decide to do it themselves. On the other hand, supervision does not judges inasmuch as the finances of the city can afford it.
cover such authority. Supervising officials merely see to it that the rules are
followed, but they themselves do not lay down such rules, nor do they have Setting a uniform amount for the grant of additional allowances is an
the discretion to modify or replace them. If the rules are not observed, they inappropriate way of enforcing the criterion found in Section 458, par. (a)(1)(xi),
may order the work done or redone, but only to conform to such rules. They of RA 7160. The DBM over-stepped its power of supervision over local
may not prescribe their own manner of execution of the act. They have no government units by imposing a prohibition that did not correspond with the
discretion on this matter except to see to it that the rules are followed. law it sought to implement. In other words, the prohibitory nature of the circular
had no legal basis.
Under our present system of government, executive power is vested in the
President.[vi][10] The members of the Cabinet and other executive officials are Furthermore, LBC 55 is void on account of its lack of publication, in violation
merely alter egos. As such, they are subject to the power of control of the of our ruling in Taada vs. Tuvera[8] where we held that:
President, at whose will and behest they can be removed from office; or their
actions and decisions changed, suspended or reversed.[vii][11] In contrast, the xxx. Administrative rules and regulations must also be published if their
heads of political subdivisions are elected by the people. Their sovereign purpose is to enforce or implement existing law pursuant to a valid delegation.
powers emanate from the electorate, to whom they are directly accountable.
By constitutional fiat, they are subject to the Presidents supervision only, not Interpretative regulations and those merely internal in nature, that is, regulating
control, so long as their acts are exercised within the sphere of their legitimate only the personnel of an administrative agency and the public, need not be
powers. By the same token, the President may not withhold or alter any published. Neither is publication required of the so-called letters of instruction
authority or power given them by the Constitution and the law. issued by administrative superiors concerning the rules or guidelines to be
followed by their subordinates in the performance of their duties.
Clearly then, the President can only interfere in the affairs and activities of a
local government unit if he or she finds that the latter has acted contrary to law. Respondent COA claims that publication is not required for LBC 55 inasmuch
This is the scope of the Presidents supervisory powers over local government as it is merely an interpretative regulation applicable to the personnel of an
LGU. We disagree. In De Jesus vs. Commission on Audit[9] where we dealt interests are affected by the same. From the time the COA disallowed the
with the same issue, this Court declared void, for lack of publication, a DBM expenses in audit up to the filing of herein petition the subject circular remained
circular that disallowed payment of allowances and other additional in legal limbo due to its non-publication. As was stated in Taada v. Tuvera,
compensation to government officials and employees. In refuting respondent prior publication of laws before they become effective cannot be dispensed
COAs argument that said circular was merely an internal regulation, we ruled with, for the reason that it would deny the public knowledge of the laws that
that: are supposed to govern it.[11]

On the need for publication of subject DBM-CCC No. 10, we rule in the We now resolve the second issue of whether the yearly appropriation
affirmative. Following the doctrine enunciated in Taada v. Tuvera, publication ordinance enacted by Mandaue City providing for fixed allowances for judges
in the Official Gazette or in a newspaper of general circulation in the Philippines contravenes any law and should therefore be struck down as null and void.
is required since DBM-CCC No. 10 is in the nature of an administrative circular
the purpose of which is to enforce or implement an existing law. Stated According to respondent COA, even if LBC 55 were void, the ordinances
differently, to be effective and enforceable, DBM-CCC No. 10 must go through enacted by Mandaue City granting additional allowances to the petitioner
the requisite publication in the Official Gazette or in a newspaper of general judges would still (be) bereft of legal basis for want of a lawful source of funds
circulation in the Philippines. considering that the IRA cannot be used for such purposes. Respondent COA
showed that Mandaue Citys funds consisted of locally generated revenues and
In the present case under scrutiny, it is decisively clear that DBM-CCC No. 10, the IRA. From 1989 to 1995, Mandaue Citys yearly expenditures exceeded its
which completely disallows payment of allowances and other additional locally generated revenues, thus resulting in a deficit. During all those years,
compensation to government officials and employees, starting November 1, it was the IRA that enabled Mandaue City to incur a surplus. Respondent avers
1989, is not a mere interpretative or internal regulation. It is something more that Mandaue City used its IRA to pay for said additional allowances and this
than that. And why not, when it tends to deprive government workers of their violated paragraph 2 of the Special Provisions, page 1060, of RA 7845 (The
allowance and additional compensation sorely needed to keep body and soul General Appropriations Act of 1995)[12] and paragraph 3 of the Special
together. At the very least, before the said circular under attack may be Provision, page 1225, of RA 7663 (The General Appropriations Act of
permitted to substantially reduce their income, the government officials and 1994)[13] which specifically identified the objects of expenditure of the IRA.
employees concerned should be apprised and alerted by the publication of Nowhere in said provisions of the two budgetary laws does it say that the IRA
subject circular in the Official Gazette or in a newspaper of general circulation can be used for additional allowances of judges. Respondent COA thus argues
in the Philippines to the end that they be given amplest opportunity to voice that the provisions in the ordinance providing for such disbursement are
out whatever opposition they may have, and to ventilate their stance on the against the law, considering that the grant of the subject allowances is not
matter. This approach is more in keeping with democratic precepts and within the specified use allowed by the aforesaid yearly appropriations acts.
rudiments of fairness and transparency. (emphasis supplied)
We disagree.
In Philippine International Trading Corporation vs. Commission on Audit[10],
we again declared the same circular as void, for lack of publication, despite Respondent COA failed to prove that Mandaue City used the IRA to spend for
the fact that it was re-issued and then submitted for publication. Emphasizing the additional allowances of the judges. There was no evidence submitted by
the importance of publication to the effectivity of a regulation, we therein held COA showing the breakdown of the expenses of the city government and the
that: funds used for said expenses. All the COA presented were the amounts
expended, the locally generated revenues, the deficit, the surplus and the IRA
It has come to our knowledge that DBM-CCC No. 10 has been re-issued in its received each year. Aside from these items, no data or figures were presented
entirety and submitted for publication in the Official Gazette per letter to the to show that Mandaue City deducted the subject allowances from the IRA. In
National Printing Office dated March 9, 1999. Would the subsequent other words, just because Mandaue Citys locally generated revenues were not
publication thereof cure the defect and retroact to the time that the above- enough to cover its expenditures, this did not mean that the additional
mentioned items were disallowed in audit? allowances of petitioner judges were taken from the IRA and not from the citys
own revenues.
The answer is in the negative, precisely for the reason that publication is
required as a condition precedent to the effectivity of a law to inform the public Moreover, the DBM neither conducted a formal review nor ordered a
of the contents of the law or rules and regulations before their rights and disapproval of Mandaue Citys appropriation ordinances, in accordance with
the procedure outlined by Sections 326 and 327 of RA 7160 which provide ROBERTO PAGDANGANAN, intervenor.
that: DECISION
PANGANIBAN, J.:
Section 326. Review of Appropriation Ordinances of Provinces, Highly
Urbanized Cities, Independent Component Cities, and Municipalities within the The Constitution vests the President with the power of supervision, not control,
Metropolitan Manila Area. The Department of Budget and Management shall over local government units (LGUs). Such power enables him to see to it that
review ordinances authorizing the annual or supplemental appropriations of LGUs and their officials execute their tasks in accordance with law. While he
provinces, highly-urbanized cities, independent component cities, and may issue advisories and seek their cooperation in solving economic
municipalities within the Metropolitan Manila Area in accordance with the difficulties, he cannot prevent them from performing their tasks and using
immediately succeeding Section. available resources to achieve their goals. He may not withhold or alter any
authority or power given them by the law. Thus, the withholding of a portion of
Section 327. Review of Appropriation Ordinances of Component Cities and internal revenue allotments legally due them cannot be directed by
Municipalities.- The sangguninang panlalawigan shall review the ordinance administrative fiat.
authorizing annual or supplemental appropriations of component cities and
municipalities in the same manner and within the same period prescribed for The Case
the review of other ordinances.
Before us is an original Petition for Certiorari and Prohibition seeking (1) to
If within ninety (90) days from receipt of copies of such ordinance, the annul Section 1 of Administrative Order (AO) No. 372, insofar as it requires
sangguniang panlalawigan takes no action thereon, the same shall be deemed local government units to reduce their expenditures by 25 percent of their
to have been reviewed in accordance with law and shall continue to be in full authorized regular appropriations for non-personal services; and (2) to enjoin
force and effect. (emphasis supplied) respondents from implementing Section 4 of the Order, which withholds a
portion of their internal revenue allotments.
Within 90 days from receipt of the copies of the appropriation ordinance, the
DBM should have taken positive action. Otherwise, such ordinance was On November 17, 1998, Roberto Pagdanganan, through Counsel Alberto C.
deemed to have been properly reviewed and deemed to have taken effect. Agra, filed a Motion for Intervention/Motion to Admit Petition for Intervention,[1]
Inasmuch as, in the instant case, the DBM did not follow the appropriate attaching thereto his Petition in Intervention[2] joining petitioner in the reliefs
procedure for reviewing the subject ordinance of Mandaue City and allowed sought. At the time, intervenor was the provincial governor of Bulacan, national
the 90-day period to lapse, it can no longer question the legality of the president of the League of Provinces of the Philippines and chairman of the
provisions in the said ordinance granting additional allowances to judges League of Leagues of Local Governments. In a Resolution dated December
stationed in the said city. 15, 1998, the Court noted said Motion and Petition.

WHEREFORE, the petition is hereby GRANTED, and the assailed decision The Facts and the Arguments
and resolution, dated September 21, 1995 and May 28, 1996, respectively, of
the Commission on Audit are hereby set aside. On December 27, 1997, the President of the Philippines issued AO 372. Its full
text, with emphasis on the assailed provisions, is as follows:
No costs.
"ADMINISTRATIVE ORDER NO. 372
SO ORDERED.
ADOPTION OF ECONOMY MEASURES IN GOVERNMENT FOR FY 1998
7. Pimentel v. Aguirre et., al.
WHEREAS, the current economic difficulties brought about by the peso
[G.R. No. 132988. July 19, 2000] depreciation requires continued prudence in government fiscal management
to maintain economic stability and sustain the country's growth momentum;
AQUILINO Q. PIMENTEL JR., petitioner, vs. Hon. ALEXANDER AGUIRRE in
his capacity as Executive Secretary, Hon. EMILIA BONCODIN in her capacity WHEREAS, it is imperative that all government agencies adopt cash
as Secretary of the Department of Budget and Management, respondents. management measures to match expenditures with available resources;
g. Grant of honoraria, except in cases where it constitutes the only source of
NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the compensation from government received by the person concerned;
Philippines, by virtue of the powers vested in me by the Constitution, do hereby
order and direct: h. Publications, media advertisements and related items, except those
required by law or those already being undertaken on a regular basis;
SECTION 1. All government departments and agencies, including state
universities and colleges, government-owned and controlled corporations and i. Grant of new/additional benefits to employees, except those expressly and
local governments units will identify and implement measures in FY 1998 that specifically authorized by law; and
will reduce total expenditures for the year by at least 25% of authorized regular
appropriations for non-personal services items, along the following suggested j. Donations, contributions, grants and gifts, except those given by institutions
areas: to victims of calamities.

1. Continued implementation of the streamlining policy on organization and 3. Suspension of all tax expenditure subsidies to all GOCCs and LGUs
staffing by deferring action on the following:
4. Reduction in the volume of consumption of fuel, water, office supplies,
a. Operationalization of new agencies; electricity and other utilities

b. Expansion of organizational units and/or creation of positions; 5. Deferment of projects that are encountering significant implementation
problems
c. Filling of positions; and
6. Suspension of all realignment of funds and the use of savings and reserves
d. Hiring of additional/new consultants, contractual and casual personnel,
regardless of funding source. SECTION 2. Agencies are given the flexibility to identify the specific sources
of cost-savings, provided the 25% minimum savings under Section 1 is
2. Suspension of the following activities: complied with.

a. Implementation of new capital/infrastructure projects, except those which SECTION 3. A report on the estimated savings generated from these
have already been contracted out; measures shall be submitted to the Office of the President, through the
Department of Budget and Management, on a quarterly basis using the
b. Acquisition of new equipment and motor vehicles; attached format.

c. All foreign travels of government personnel, except those associated with SECTION 4. Pending the assessment and evaluation by the Development
scholarships and trainings funded by grants; Budget Coordinating Committee of the emerging fiscal situation, the amount
equivalent to 10% of the internal revenue allotment to local government units
d. Attendance in conferences abroad where the cost is charged to the shall be withheld.
government except those clearly essential to Philippine commitments in the
international field as may be determined by the Cabinet; SECTION 5. The Development Budget Coordination Committee shall conduct
a monthly review of the fiscal position of the National Government and if
e. Conduct of trainings/workshops/seminars, except those conducted by necessary, shall recommend to the President the imposition of additional
government training institutions and agencies in the performance of their reserves or the lifting of previously imposed reserves.
regular functions and those that are funded by grants;
SECTION 6. This Administrative Order shall take effect January 1, 1998 and
f. Conduct of cultural and social celebrations and sports activities, except those shall remain valid for the entire year unless otherwise lifted.
associated with the Philippine Centennial celebration and those involving
regular competitions/events; DONE in the City of Manila, this 27th day of December, in the year of our Lord,
nineteen hundred and ninety-seven."
However, the intervention of Roberto Pagdanganan has rendered academic
Subsequently, on December 10, 1998, President Joseph E. Estrada issued any further discussion on this matter.
AO 43, amending Section 4 of AO 372, by reducing to five percent (5%) the
amount of internal revenue allotment (IRA) to be withheld from the LGUs. The Court's Ruling

Petitioner contends that the President, in issuing AO 372, was in effect The Petition is partly meritorious.
exercising the power of control over LGUs. The Constitution vests in the
President, however, only the power of general supervision over LGUs, Main Issue:
consistent with the principle of local autonomy. Petitioner further argues that Validity of AO 372
the directive to withhold ten percent (10%) of their IRA is in contravention of Insofar as LGUs Are Concerned
Section 286 of the Local Government Code and of Section 6, Article X of the Before resolving the main issue, we deem it important and appropriate to
Constitution, providing for the automatic release to each of these units its share define certain crucial concepts: (1) the scope of the President's power of
in the national internal revenue. general supervision over local governments and (2) the extent of the local
governments' autonomy.
The solicitor general, on behalf of the respondents, claims on the other hand
that AO 372 was issued to alleviate the "economic difficulties brought about by Scope of President's Power of Supervision Over LGUs
the peso devaluation" and constituted merely an exercise of the President's
power of supervision over LGUs. It allegedly does not violate local fiscal Section 4 of Article X of the Constitution confines the President's power over
autonomy, because it merely directs local governments to identify measures local governments to one of general supervision. It reads as follows:
that will reduce their total expenditures for non-personal services by at least
25 percent. Likewise, the withholding of 10 percent of the LGUs IRA does not "Sec. 4. The President of the Philippines shall exercise general supervision
violate the statutory prohibition on the imposition of any lien or holdback on over local governments. x x x"
their revenue shares, because such withholding is "temporary in nature
pending the assessment and evaluation by the Development Coordination This provision has been interpreted to exclude the power of control. In
Committee of the emerging fiscal situation." Mondano v. Silvosa,[5] the Court contrasted the President's power of
supervision over local government officials with that of his power of control
The Issues over executive officials of the national government. It was emphasized that the
two terms -- supervision and control -- differed in meaning and extent. The
The Petition[3] submits the following issues for the Court's resolution: Court distinguished them as follows:

"A. Whether or not the president committed grave abuse of discretion [in] "x x x In administrative law, supervision means overseeing or the power or
ordering all LGUS to adopt a 25% cost reduction program in violation of the authority of an officer to see that subordinate officers perform their duties. If
LGU[']S fiscal autonomy the latter fail or neglect to fulfill them, the former may take such action or step
as prescribed by law to make them perform their duties. Control, on the other
"B. Whether or not the president committed grave abuse of discretion in hand, means the power of an officer to alter or modify or nullify or set aside
ordering the withholding of 10% of the LGU[']S IRA" what a subordinate officer ha[s] done in the performance of his duties and to
substitute the judgment of the former for that of the latter."[6]
In sum, the main issue is whether (a) Section 1 of AO 372, insofar as it "directs"
LGUs to reduce their expenditures by 25 percent; and (b) Section 4 of the In Taule v. Santos,[7] we further stated that the Chief Executive wielded no
same issuance, which withholds 10 percent of their internal revenue more authority than that of checking whether local governments or their
allotments, are valid exercises of the President's power of general supervision officials were performing their duties as provided by the fundamental law and
over local governments. by statutes. He cannot interfere with local governments, so long as they act
within the scope of their authority. "Supervisory power, when contrasted with
Additionally, the Court deliberated on the question whether petitioner had the control, is the power of mere oversight over an inferior body; it does not include
locus standi to bring this suit, despite respondents' failure to raise the issue.[4] any restraining authority over such body,"[8] we said.
In a more recent case, Drilon v. Lim,[9] the difference between control and government delegates administrative powers to political subdivisions in order
supervision was further delineated. Officers in control lay down the rules in the to broaden the base of government power and in the process to make local
performance or accomplishment of an act. If these rules are not followed, they governments 'more responsive and accountable,'[17] and 'ensure their fullest
may, in their discretion, order the act undone or redone by their subordinates development as self-reliant communities and make them more effective
or even decide to do it themselves. On the other hand, supervision does not partners in the pursuit of national development and social progress.'[18] At the
cover such authority. Supervising officials merely see to it that the rules are same time, it relieves the central government of the burden of managing local
followed, but they themselves do not lay down such rules, nor do they have affairs and enables it to concentrate on national concerns. The President
the discretion to modify or replace them. If the rules are not observed, they exercises 'general supervision'[19] over them, but only to 'ensure that local
may order the work done or redone, but only to conform to such rules. They affairs are administered according to law.'[20] He has no control over their acts
may not prescribe their own manner of execution of the act. They have no in the sense that he can substitute their judgments with his own.[21]
discretion on this matter except to see to it that the rules are followed.
Decentralization of power, on the other hand, involves an abdication of political
Under our present system of government, executive power is vested in the power in the favor of local government units declared to be autonomous. In
President.[10] The members of the Cabinet and other executive officials are that case, the autonomous government is free to chart its own destiny and
merely alter egos. As such, they are subject to the power of control of the shape its future with minimum intervention from central authorities. According
President, at whose will and behest they can be removed from office; or their to a constitutional author, decentralization of power amounts to 'self-
actions and decisions changed, suspended or reversed.[11] In contrast, the immolation,' since in that event, the autonomous government becomes
heads of political subdivisions are elected by the people. Their sovereign accountable not to the central authorities but to its constituency."[22]
powers emanate from the electorate, to whom they are directly accountable.
By constitutional fiat, they are subject to the Presidents supervision only, not Under the Philippine concept of local autonomy, the national government has
control, so long as their acts are exercised within the sphere of their legitimate not completely relinquished all its powers over local governments, including
powers. By the same token, the President may not withhold or alter any autonomous regions. Only administrative powers over local affairs are
authority or power given them by the Constitution and the law. delegated to political subdivisions. The purpose of the delegation is to make
governance more directly responsive and effective at the local levels. In turn,
Extent of Local Autonomy economic, political and social development at the smaller political units are
expected to propel social and economic growth and development. But to
Hand in hand with the constitutional restraint on the President's power over enable the country to develop as a whole, the programs and policies effected
local governments is the state policy of ensuring local autonomy.[12] locally must be integrated and coordinated towards a common national goal.
Thus, policy-setting for the entire country still lies in the President and
In Ganzon v. Court of Appeals,[13] we said that local autonomy signified "a Congress. As we stated in Magtajas v. Pryce Properties Corp., Inc., municipal
more responsive and accountable local government structure instituted governments are still agents of the national government.[23]
through a system of decentralization." The grant of autonomy is intended to
"break up the monopoly of the national government over the affairs of local The Nature of AO 372
governments, x x x not x x x to end the relation of partnership and
interdependence between the central administration and local government Consistent with the foregoing jurisprudential precepts, let us now look into the
units x x x." Paradoxically, local governments are still subject to regulation, nature of AO 372. As its preambular clauses declare, the Order was a "cash
however limited, for the purpose of enhancing self-government.[14] management measure" adopted by the government "to match expenditures
with available resources," which were presumably depleted at the time due to
Decentralization simply means the devolution of national administration, not "economic difficulties brought about by the peso depreciation." Because of a
power, to local governments. Local officials remain accountable to the central looming financial crisis, the President deemed it necessary to "direct all
government as the law may provide.[15] The difference between government agencies, state universities and colleges, government-owned and
decentralization of administration and that of power was explained in detail in controlled corporations as well as local governments to reduce their total
Limbona v. Mangelin[16] as follows: expenditures by at least 25 percent along suggested areas mentioned in AO
372.
"Now, autonomy is either decentralization of administration or decentralization
of power. There is decentralization of administration when the central
Under existing law, local government units, in addition to having administrative
autonomy in the exercise of their functions, enjoy fiscal autonomy as well. Petitioner points out that respondents failed to comply with these requisites
Fiscal autonomy means that local governments have the power to create their before the issuance and the implementation of AO 372. At the very least, they
own sources of revenue in addition to their equitable share in the national taxes did not even try to show that the national government was suffering from an
released by the national government, as well as the power to allocate their unmanageable public sector deficit. Neither did they claim having conducted
resources in accordance with their own priorities. It extends to the preparation consultations with the different leagues of local governments. Without these
of their budgets, and local officials in turn have to work within the constraints requisites, the President has no authority to adjust, much less to reduce,
thereof. They are not formulated at the national level and imposed on local unilaterally the LGU's internal revenue allotment.
governments, whether they are relevant to local needs and resources or not.
Hence, the necessity of a balancing of viewpoints and the harmonization of The solicitor general insists, however, that AO 372 is merely directory and has
proposals from both local and national officials,[24] who in any case are been issued by the President consistent with his power of supervision over
partners in the attainment of national goals. local governments. It is intended only to advise all government agencies and
instrumentalities to undertake cost-reduction measures that will help maintain
Local fiscal autonomy does not however rule out any manner of national economic stability in the country, which is facing economic difficulties. Besides,
government intervention by way of supervision, in order to ensure that local it does not contain any sanction in case of noncompliance. Being merely an
programs, fiscal and otherwise, are consistent with national goals. advisory, therefore, Section 1 of AO 372 is well within the powers of the
Significantly, the President, by constitutional fiat, is the head of the economic President. Since it is not a mandatory imposition, the directive cannot be
and planning agency of the government,[25] primarily responsible for characterized as an exercise of the power of control.
formulating and implementing continuing, coordinated and integrated social
and economic policies, plans and programs[26] for the entire country. While the wordings of Section 1 of AO 372 have a rather commanding tone,
However, under the Constitution, the formulation and the implementation of and while we agree with petitioner that the requirements of Section 284 of the
such policies and programs are subject to "consultations with the appropriate Local Government Code have not been satisfied, we are prepared to accept
public agencies, various private sectors, and local government units." The the solicitor general's assurance that the directive to "identify and implement
President cannot do so unilaterally. measures x x x that will reduce total expenditures x x x by at least 25% of
authorized regular appropriation" is merely advisory in character, and does not
Consequently, the Local Government Code provides:[27] constitute a mandatory or binding order that interferes with local autonomy.
The language used, while authoritative, does not amount to a command that
"x x x [I]n the event the national government incurs an unmanaged public emanates from a boss to a subaltern.
sector deficit, the President of the Philippines is hereby authorized, upon the
recommendation of [the] Secretary of Finance, Secretary of the Interior and Rather, the provision is merely an advisory to prevail upon local executives to
Local Government and Secretary of Budget and Management, and subject to recognize the need for fiscal restraint in a period of economic difficulty. Indeed,
consultation with the presiding officers of both Houses of Congress and the all concerned would do well to heed the President's call to unity, solidarity and
presidents of the liga, to make the necessary adjustments in the internal teamwork to help alleviate the crisis. It is understood, however, that no legal
revenue allotment of local government units but in no case shall the allotment sanction may be imposed upon LGUs and their officials who do not follow such
be less than thirty percent (30%) of the collection of national internal revenue advice. It is in this light that we sustain the solicitor general's contention in
taxes of the third fiscal year preceding the current fiscal year x x x." regard to Section 1.

There are therefore several requisites before the President may interfere in Withholding a Part of LGUs' IRA
local fiscal matters: (1) an unmanaged public sector deficit of the national
government; (2) consultations with the presiding officers of the Senate and the Section 4 of AO 372 cannot, however, be upheld. A basic feature of local fiscal
House of Representatives and the presidents of the various local leagues; and autonomy is the automatic release of the shares of LGUs in the national
(3) the corresponding recommendation of the secretaries of the Department of internal revenue. This is mandated by no less than the Constitution.[28] The
Finance, Interior and Local Government, and Budget and Management. Local Government Code[29] specifies further that the release shall be made
Furthermore, any adjustment in the allotment shall in no case be less than directly to the LGU concerned within five (5) days after every quarter of the
thirty percent (30%) of the collection of national internal revenue taxes of the year and "shall not be subject to any lien or holdback that may be imposed by
third fiscal year preceding the current one. the national government for whatever purpose."[30] As a rule, the term "shall"
is a word of command that must be given a compulsory meaning.[31] The Indeed, even a singular violation of the Constitution and/or the law is enough
provision is, therefore, imperative. to awaken judicial duty. Said the Court:

Section 4 of AO 372, however, orders the withholding, effective January 1, "In seeking to nullify an act of the Philippine Senate on the ground that it
1998, of 10 percent of the LGUs' IRA "pending the assessment and evaluation contravenes the Constitution, the petition no doubt raises a justiciable
by the Development Budget Coordinating Committee of the emerging fiscal controversy. Where an action of the legislative branch is seriously alleged to
situation" in the country. Such withholding clearly contravenes the Constitution have infringed the Constitution, it becomes not only the right but in fact the
and the law. Although temporary, it is equivalent to a holdback, which means duty of the judiciary to settle the dispute. 'The question thus posed is judicial
"something held back or withheld, often temporarily."[32] Hence, the rather than political. The duty (to adjudicate) remains to assure that the
"temporary" nature of the retention by the national government does not supremacy of the Constitution is upheld.'[34] Once a 'controversy as to the
matter. Any retention is prohibited. application or interpretation of a constitutional provision is raised before this
Court x x x , it becomes a legal issue which the Court is bound by constitutional
In sum, while Section 1 of AO 372 may be upheld as an advisory effected in mandate to decide.'[35]
times of national crisis, Section 4 thereof has no color of validity at all. The
latter provision effectively encroaches on the fiscal autonomy of local xxxxxxxxx
governments. Concededly, the President was well-intentioned in issuing his
Order to withhold the LGUs IRA, but the rule of law requires that even the best "As this Court has repeatedly and firmly emphasized in many cases,[36] it will
intentions must be carried out within the parameters of the Constitution and not shirk, digress from or abandon its sacred duty and authority to uphold the
the law. Verily, laudable purposes must be carried out by legal methods. Constitution in matters that involve grave abuse of discretion brought before it
in appropriate cases, committed by any officer, agency, instrumentality or
Refutation of Justice Kapunan's Dissent department of the government."

Mr. Justice Santiago M. Kapunan dissents from our Decision on the grounds In the same vein, the Court also held in Tatad v. Secretary of the Department
that, allegedly, (1) the Petition is premature; (2) AO 372 falls within the powers of Energy:[37]
of the President as chief fiscal officer; and (3) the withholding of the LGUs IRA
is implied in the President's authority to adjust it in case of an unmanageable "x x x Judicial power includes not only the duty of the courts to settle actual
public sector deficit. controversies involving rights which are legally demandable and enforceable,
but also the duty to determine whether or not there has been grave abuse of
First, on prematurity. According to the Dissent, when "the conduct has not yet discretion amounting to lack or excess of jurisdiction on the part of any branch
occurred and the challenged construction has not yet been adopted by the or instrumentality of government. The courts, as guardians of the Constitution,
agency charged with administering the administrative order, the determination have the inherent authority to determine whether a statute enacted by the
of the scope and constitutionality of the executive action in advance of its legislature transcends the limit imposed by the fundamental law. Where the
immediate adverse effect involves too remote and abstract an inquiry for the statute violates the Constitution, it is not only the right but the duty of the
proper exercise of judicial function." judiciary to declare such act unconstitutional and void."

This is a rather novel theory -- that people should await the implementing evil By the same token, when an act of the President, who in our constitutional
to befall on them before they can question acts that are illegal or scheme is a coequal of Congress, is seriously alleged to have infringed the
unconstitutional. Be it remembered that the real issue here is whether the Constitution and the laws, as in the present case, settling the dispute becomes
Constitution and the law are contravened by Section 4 of AO 372, not whether the duty and the responsibility of the courts.
they are violated by the acts implementing it. In the unanimous en banc case
Taada v. Angara,[33] this Court held that when an act of the legislative Besides, the issue that the Petition is premature has not been raised by the
department is seriously alleged to have infringed the Constitution, settling the parties; hence it is deemed waived. Considerations of due process really
controversy becomes the duty of this Court. By the mere enactment of the prevents its use against a party that has not been given sufficient notice of its
questioned law or the approval of the challenged action, the dispute is said to presentation, and thus has not been given the opportunity to refute it.[38]
have ripened into a judicial controversy even without any other overt act.
Second, on the President's power as chief fiscal officer of the country. Justice WHEREFORE, the Petition is GRANTED. Respondents and their successors
Kapunan posits that Section 4 of AO 372 conforms with the President's role as are hereby permanently PROHIBITED from implementing Administrative
chief fiscal officer, who allegedly "is clothed by law with certain powers to Order Nos. 372 and 43, respectively dated December 27, 1997 and December
ensure the observance of safeguards and auditing requirements, as well as 10, 1998, insofar as local government units are concerned.
the legal prerequisites in the release and use of IRAs, taking into account the
constitutional and statutory mandates."[39] He cites instances when the SO ORDERED.
President may lawfully intervene in the fiscal affairs of LGUs.
Davide, Jr., C.J., Bellosillo, Melo, Puno, Vitug, Mendoza, Quisumbing, Pardo,
Precisely, such powers referred to in the Dissent have specifically been Buena, Gonzaga-Reyes, and De Leon, Jr., JJ., concur.
authorized by law and have not been challenged as violative of the Kapunan, J., see dissenting opinion.
Constitution. On the other hand, Section 4 of AO 372, as explained earlier, Purisima, and Ynares-Santiago, JJ., join J. Kapunan in his dissenting opinion.
contravenes explicit provisions of the Local Government Code (LGC) and the DISSENTING OPINION
Constitution. In other words, the acts alluded to in the Dissent are indeed
authorized by law; but, quite the opposite, Section 4 of AO 372 is bereft of any KAPUNAN, J.:
legal or constitutional basis.
In striking down as unconstitutional and illegal Section 4 of Administrative
Third, on the President's authority to adjust the IRA of LGUs in case of an Order No. 372 ("AO No. 372"), the majority opinion posits that the President
unmanageable public sector deficit. It must be emphasized that in striking exercised power of control over the local government units ("LGU), which he
down Section 4 of AO 372, this Court is not ruling out any form of reduction in does not have, and violated the provisions of Section 6, Article X of the
the IRAs of LGUs. Indeed, as the President may make necessary adjustments Constitution, which states:
in case of an unmanageable public sector deficit, as stated in the main part of
this Decision, and in line with Section 284 of the LGC, which Justice Kapunan SEC. 6. Local government units shall have a just share, as determined by law,
cites. He, however, merely glances over a specific requirement in the same in the national taxes which shall be automatically released to them.
provision -- that such reduction is subject to consultation with the presiding
officers of both Houses of Congress and, more importantly, with the presidents and Section 286(a) of the Local Government Code, which provides:
of the leagues of local governments.
SEC. 286. Automatic Release of Shares. - (a) The share of each local
Notably, Justice Kapunan recognizes the need for "interaction between the government unit shall be released, without need of any further action, directly
national government and the LGUs at the planning level," in order to ensure to the provincial, city, municipal or barangay treasurer, as the case may be, on
that "local development plans x x x hew to national policies and standards." a quarterly basis within five (5) days after the end of each quarter, and which
The problem is that no such interaction or consultation was ever held prior to shall not be subject to any lien or holdback that may be imposed by the national
the issuance of AO 372. This is why the petitioner and the intervenor (who was government for whatever purpose.
a provincial governor and at the same time president of the League of
Provinces of the Philippines and chairman of the League of Leagues of Local The share of the LGUs in the national internal revenue taxes is defined in
Governments) have protested and instituted this action. Significantly, Section 284 of the same Local Government Code, to wit:
respondents do not deny the lack of consultation.
SEC. 284. Allotment of Internal Revenue Taxes. - Local government units shall
In addition, Justice Kapunan cites Section 287[40] of the LGC as impliedly have a share in the national internal revenue taxes based on the collection of
authorizing the President to withhold the IRA of an LGU, pending its the third fiscal year preceding the current fiscal year as follows:
compliance with certain requirements. Even a cursory reading of the provision
reveals that it is totally inapplicable to the issue at bar. It directs LGUs to (a) On the first year of the effectivity of this Code, thirty percent (30%);
appropriate in their annual budgets 20 percent of their respective IRAs for
development projects. It speaks of no positive power granted the President to (b) On the second year, thirty-five (35%) percent; and
priorly withhold any amount. Not at all.
(c) On the third year and thereafter, forty percent (40%).
Provided, That in the event that the national government incurs an
unmanageable public sector deficit, the President of the Philippines is hereby SECTION 4. Pending the assessment and evaluation by the Development
authorized, upon the recommendation of Secretary of Finance, Secretary of Budget Coordinating Committee of the emerging fiscal situation the amount
Interior and Local Government and Secretary of Budget and Management, and equivalent to 10% of the internal revenue allotment to local government units
subject to consultation with the presiding officers of both Houses of Congress shall be withheld.
and the presidents of the liga, to make the necessary adjustments in the
internal revenue allotment of local government units but in no case shall the xxx
allotment be less than thirty percent (30%) of the collection of national internal
revenue taxes of the third fiscal year preceding the current fiscal year: Subsequently, on December 10, 1998, President Joseph E. Estrada issued
Provided, further, That in the first year of the effectivity of this Code, the local Administrative Order No. 43 (AO No. 43), amending Section 4 of AO No. 372,
government units shall, in addition to the thirty percent (30%) internal revenue by reducing to five percent (5%) the IRA to be withheld from the LGUs, thus:
allotment which shall include the cost of devolved functions for essential public
services, be entitled to receive the amount equivalent to the cost of devolved ADMINISTRATIVE ORDER NO. 43
personal services.
AMENDING ADMINISTRATIVE ORDER NO. 372 DATED 27 DECEMBER
xxx 1997 ENTITLED "ADOPTION OF ECONOMY MEASURES IN
GOVERNMENT FOR FY 1998"
The majority opinion takes the view that the withholding of ten percent (10%)
of the internal revenue allotment ("IRA") to the LGUs pending the assessment WHEREAS, Administrative Order No. 372 dated 27 December 1997 entitled
and evaluation by the Development Budget Coordinating Committee of the "Adoption of Economy Measures in Government for FY 1998" was issued to
emerging fiscal situation as called for in Section 4 of AO No. 372 transgresses address the economic difficulties brought about by the peso devaluation in
against the above-quoted provisions which mandate the "automatic" release 1997;
of the shares of the LGUs in the national internal revenue in consonance with
local fiscal autonomy. The pertinent portions of AO No. 372 are reproduced WHEREAS, Section 4 of Administrative Order No. 372 provided that the
hereunder: amount equivalent to 10% of the internal revenue allotment to local
government units shall be withheld; and,
ADMINISTRATIVE ORDER NO. 372
WHEREAS, there is a need to release additional funds to local government
ADOPTION OF ECONOMY MEASURES IN GOVERNMENT FOR FY 1998 units for vital projects and expenditures.

WHEREAS, the current economic difficulties brought about by the peso NOW, THEREFORE, I, JOSEPH EJERCITO ESTRADA, President of the
depreciation requires continued prudence in government fiscal management Republic of the Philippines, by virtue of the powers vested in me by law, do
to maintain economic stability and sustain the countrys growth momentum; hereby order the reduction of the withheld Internal Revenue Allotment (IRA) of
local government units from ten percent to five percent.
WHEREAS, it is imperative that all government agencies adopt cash
management measures to match expenditures with available resources; NOW The five percent reduction in the IRA withheld for 1998 shall be released before
THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the 25 December 1998.
Philippines, by virtue of the powers vested in me by the Constitution, do hereby
order and direct: DONE in the City of Manila, this 10th day of December, in the year of our Lord,
nineteen hundred and ninety eight.
SECTION 1. All government departments and agencies, including x x x local
government units will identify and implement measures in FY 1998 that will With all due respect, I beg to disagree with the majority opinion.
reduce total appropriations for non-personal services items, along the following
suggested areas: Section 4 of AO No. 372 does not present a case ripe for adjudication. The
language of Section 4 does not conclusively show that, on its face, the
xxx constitutional provision on the automatic release of the IRA shares of the LGUs
has been violated. Section 4, as worded, expresses the idea that the units,"11 but to make local governments "more responsive and accountable"
withholding is merely temporary which fact alone would not merit an outright [to] "ensure their fullest development as self-reliant communities and make
conclusion of its unconstitutionality, especially in light of the reasonable them more effective partners in the pursuit of national development and social
presumption that administrative agencies act in conformity with the law and progress."12
the Constitution. Where the conduct has not yet occurred and the challenged
construction has not yet been adopted by the agency charged with The interaction between the national government and the local government
administering the administrative order, the determination of the scope and units is mandatory at the planning level. Local development plans must thus
constitutionality of the executive action in advance of its immediate adverse hew to "national policies and standards13 as these are integrated into the
effect involves too remote and abstract an inquiry for the proper exercise of regional development plans for submission to the National Economic
judicial function. Petitioners have not shown that the alleged 5% IRA share of Development Authority. "14 Local budget plans and goals must also be
LGUs that was temporarily withheld has not yet been released, or that the harmonized, as far as practicable, with "national development goals and
Department of Budget and Management (DBM) has refused and continues to strategies in order to optimize the utilization of resources and to avoid
refuse its release. In view thereof, the Court should not decide as this case duplication in the use of fiscal and physical resources."15
suggests an abstract proposition on constitutional issues.
Section 4 of AO No. 372 was issued in the exercise by the President not only
The President is the chief fiscal officer of the country. He is ultimately of his power of general supervision, but also in conformity with his role as chief
responsible for the collection and distribution of public money: fiscal officer of the country in the discharge of which he is clothed by law with
certain powers to ensure the observance of safeguards and auditing
SECTION 3. Powers and Functions. - The Department of Budget and requirements, as well as the legal prerequisites in the release and use of IRAs,
Management shall assist the President in the preparation of a national taking into account the constitutional16 and statutory17 mandates.
resources and expenditures budget, preparation, execution and control of the
National Budget, preparation and maintenance of accounting systems However, the phrase "automatic release" of the LGUs' shares does not mean
essential to the budgetary process, achievement of more economy and that the release of the funds is mechanical, spontaneous, self-operating or
efficiency in the management of government operations, administration of reflex. IRAs must first be determined, and the money for their payment
compensation and position classification systems, assessment of collected.18 In this regard, administrative documentations are also undertaken
organizational effectiveness and review and evaluation of legislative proposals to ascertain their availability, limits and extent. The phrase, thus, should be
having budgetary or organizational implications.1 used in the context of the whole budgetary process and in relation to pertinent
laws relating to audit and accounting requirements. In the workings of the
In a larger context, his role as chief fiscal officer is directed towards "the budget for the fiscal year, appropriations for expenditures are supported by
nation's efforts at economic and social upliftment"2 for which more specific existing funds in the national coffers and by proposals for revenue raising. The
economic powers are delegated. Within statutory limits, the President can, money, therefore, available for IRA release may not be existing but merely
thus, fix "tariff rates, import and export quotas, tonnage and wharfage dues, inchoate, or a mere expectation. It is not infrequent that the Executive
and other duties or imposts within the framework of the national development Department's proposals for raising revenue in the form of proposed legislation
program of the government,3 as he is also responsible for enlisting the country may not be passed by the legislature. As such, the release of IRA should not
in international economic agreements.4 More than this, to achieve "economy mean release of absolute amounts based merely on mathematical
and efficiency in the management of government operations," the President is computations. There must be a prior determination of what exact amount the
empowered to create appropriation reserves,5 suspend expenditure local government units are actually entitled in light of the economic factors
appropriations,6 and institute cost reduction schemes.7 which affect the fiscal situation in the country. Foremost of these is where, due
to an unmanageable public sector deficit, the President may make the
As chief fiscal officer of the country, the President supervises fiscal necessary adjustments in the IRA of LGUs. Thus, as expressly provided in
development in the local government units and ensures that laws are faithfully Article 284 of the Local Government Code:
executed.8 For this reason, he can set aside tax ordinances if he finds them
contrary to the Local Government Code.9 Ordinances cannot contravene x x x (I)n the event that the national government incurs an unmanageable
statutes and public policy as declared by the national govemment.10 The goal public sector deficit, the President of the Philippines is hereby authorized, upon
of local economy is not to "end the relation of partnership and inter- the recommendation of Secretary of Finance, Secretary of Interior and Local
dependence between the central administration and local government Government and Secretary of Budget and Management and subject to
consultation with the presiding officers of both Houses of Congress and the
presidents of the "liga," to make the necessary adjustments in the internal xxx
revenue allotment of local government units but in no case shall the allotment
be less than thirty percent (30%) of the collection of national internal revenue (c) The IRA share of LGUs shall not be subject to any lien or hold back that
taxes of the third fiscal year preceding the current fiscal year. x x x. may be imposed by the National Government for whatever purpose unless
otherwise provided in the Code or other applicable laws and loan contract on
Under the aforecited provision, if facts reveal that the economy has sustained project agreements arising from foreign loans and international commitments,
or will likely sustain such "unmanageable public sector deficit," then the LGUs such as premium contributions of LGUs to the Government Service Insurance
cannot assert absolute right of entitlement to the full amount of forty percent System and loans contracted by LGUs under foreign-assisted projects.
(40%) share in the IRA, because the President is authorized to make an
adjustment and to reduce the amount to not less than thirty percent (30%). It Apart from the above, other mandatory deductions are made from the IRAs
is, therefore, impractical to immediately release the full amount of the IRAs and prior to their release, such as: (1) total actual cost of devolution and the cost
subsequently require the local government units to return at most ten percent of city-funded hospitals;20 and (2) compulsory contributions21 and other
(10%) once the President has ascertained that there exists an unmanageable remittances.22 It follows, therefore, that the President can withhold portions of
public sector deficit. IRAs in order to set-off or compensate legitimately incurred obligations and
remittances of LGUs.
By necessary implication, the power to make necessary adjustments (including
reduction) in the IRA in case of an unmanageable public sector deficit, includes Significantly, Section 286 of the Local Government Code does not make
the discretion to withhold the IRAs temporarily until such time that the mention of the exact amount that should be automatically released to the
determination of the actual fiscal situation is made. The test in determining LGUs. The provision does not mandate that the entire 40% share mentioned
whether one power is necessarily included in a stated authority is: "The in Section 284 shall be released. It merely provides that the "share" of each
exercise of a more absolute power necessarily includes the lesser power LGU shall be released and which "shall not be subject to any lien or holdback
especially where it is needed to make the first power effective."19 If the that may be imposed by the national government for whatever purpose." The
discretion to suspend temporarily the release of the IRA pending such provision on automatic release of IRA share should, thus, be read together
examination is withheld from the President, his authority to make the with Section 284, including the proviso on adjustment or reduction of IRAs, as
necessary IRA adjustments brought about by the unmanageable public sector well as other relevant laws. It may happen that the share of the LGUs may
deficit would be emasculated in the midst of serious economic crisis. In the amount to the full forty percent (40%) or the reduced amount of thirty percent
situation conjured by the majority opinion, the money would already have been (30%) as adjusted without any law being violated. In other words, all that
gone even before it is determined that fiscal crisis is indeed happening. Section 286 requires is the automatic release of the amount that the LGUs are
rightfully and legally entitled to, which, as the same section provides, should
The majority opinion overstates the requirement in Section 286 of the Local not be less than thirty percent (30%) of the collection of the national revenue
Government Code that the IRAs "shall not be subject to any lien or holdback taxes. So that even if five percent (5%) or ten percent (10%) is either
that may be imposed by the national government for whatever purpose" as temporarily or permanently withheld, but the minimum of thirty percent (30%)
proof that no withholding of the release of the IRAs is allowed albeit temporary allotment for the LGUs is released pursuant to the President's authority to
in nature. make the necessary adjustment in the LGUS' share, there is still full
compliance with the requirements of the automatic release of the LGUs' share.
It is worthy to note that this provision does not appear in the Constitution.
Section 6, Art X of the Constitution merely directs that LGUs "shall have a just Finally, the majority insists that the withholding of ten percent (10%) or five
share" in the national taxes "as determined by law" and which share shall be percent (5%) of the IRAs could not have been done pursuant to the power of
automatically released to them. This means that before the LGUs share is the President to adjust or reduce such shares under Section 284 of the Local
released, there should be first a determination, which requires a process, of Government Code because there was no showing of an unmanageable public
what is the correct amount as dictated by existing laws. For one, the sector deficit by the national government, nor was there evidence that
Implementing Rules of the Local Government Code allows deductions from consultations with the presiding officers of both Houses of Congress and the
the IRAs, to wit: presidents of the various leagues had taken place and the corresponding
recommendations of the Secretary of Finance, Secretary of Interior and Local
Article 384. Automatic Release of IRA Shares of LGUs: Government and the Budget Secretary were made.
I beg to differ. The power to determine whether there is an unmanageable DECISION
public sector deficit is lodged in the President. The President's determination,
as fiscal manager of the country, of the existence of economic difficulties which CALLEJO, SR., J.:
could amount to "unmanageable public sector deficit" should be accorded
respect. In fact, the withholding of the ten percent (10%) of the LGUs' share The Province of Batangas, represented by its Governor, Hermilando I.
was further justified by the current economic difficulties brought about by the Mandanas, filed the present petition for certiorari, prohibition and mandamus
peso depreciation as shown by one of the "WHEREASES" of AO No. 372.23 under Rule 65 of the Rules of Court, as amended, to declare as
In the absence of any showing to the contrary, it is presumed that the President unconstitutional and void certain provisos contained in the General
had made prior consultations with the officials thus mentioned and had acted Appropriations Acts (GAA) of 1999, 2000 and 2001, insofar as they uniformly
upon the recommendations of the Secretaries of Finance, Interior and Local earmarked for each corresponding year the amount of five billion pesos
Government and Budget.24 (5,000,000,000.00) of the Internal Revenue Allotment (IRA) for the Local
Government Service Equalization Fund (LGSEF) and imposed conditions for
Therefore, even assuming hypothetically that there was effectively a deduction the release thereof.
of five percent (5%) of the LGUs' share, which was in accordance with the
President's prerogative in view of the pronouncement of the existence of an Named as respondents are Executive Secretary Alberto G. Romulo, in his
unmanageable public sector deficit, the deduction would still be valid in the capacity as Chairman of the Oversight Committee on Devolution, Secretary
absence of any proof that the LGUs' allotment was less than the thirty percent Emilia Boncodin of the Department of Budget and Management (DBM) and
(30%) limit provided for in Section 284 of the Local Government Code. Secretary Jose Lina of the Department of Interior and Local Government
(DILG).
In resume, the withholding of the amount equivalent to five percent (5%) of the
IRA to the LGUs was temporary pending determination by the Executive of the Background
actual share which the LGUs are rightfully entitled to on the basis of the
applicable laws, particularly Section 284 of the Local Government Code, On December 7, 1998, then President Joseph Ejercito Estrada issued
authorizing the President to make the necessary adjustments in the IRA of Executive Order (E.O.) No. 48 entitled "ESTABLISHING A PROGRAM FOR
LGUs in the event of an unmanageable public sector deficit. And assuming DEVOLUTION ADJUSTMENT AND EQUALIZATION." The program was
that the said five percent (5%) of the IRA pertaining to the 1998 Fiscal Year established to "facilitate the process of enhancing the capacities of local
has been permanently withheld, there is no showing that the amount actually government units (LGUs) in the discharge of the functions and services
released to the LGUs that same year was less than thirty percent (30%) of the devolved to them by the National Government Agencies concerned pursuant
national internal revenue taxes collected, without even considering the proper to the Local Government Code."1 The Oversight Committee (referred to as the
deductions allowed by law. Devolution Committee in E.O. No. 48) constituted under Section 533(b) of
Republic Act No. 7160 (The Local Government Code of 1991) has been tasked
WHEREFORE, I vote to DISMISS the petition. to formulate and issue the appropriate rules and regulations necessary for its
effective implementation.2 Further, to address the funding shortfalls of
8. Batangas v. Romulo functions and services devolved to the LGUs and other funding requirements
of the program, the "Devolution Adjustment and Equalization Fund" was
created.3 For 1998, the DBM was directed to set aside an amount to be
G.R. No. 152774 May 27, 2004 determined by the Oversight Committee based on the devolution status
appraisal surveys undertaken by the DILG.4 The initial fund was to be sourced
THE PROVINCE OF BATANGAS, represented by its Governor, from the available savings of the national government for CY 1998.5 For 1999
HERMILANDO I. MANDANAS, petitioner, and the succeeding years, the corresponding amount required to sustain the
vs. program was to be incorporated in the annual GAA.6 The Oversight
HON. ALBERTO G. ROMULO, Executive Secretary and Chairman of the Committee has been authorized to issue the implementing rules and
Oversight Committee on Devolution; HON. EMILIA BONCODIN, Secretary, regulations governing the equitable allocation and distribution of said fund to
Department of Budget and Management; HON. JOSE D. LINA, JR., Secretary, the LGUs.7
Department of Interior and Local Government, respondents.
The LGSEF in the GAA of 1999 RESOLUTION REQUESTING HIS EXCELLENCY PRESIDENT JOSEPH
EJERCITO ESTRADA TO APPROVE THE REQUEST OF THE OVERSIGHT
In Republic Act No. 8745, otherwise known as the GAA of 1999, the program COMMITTEE ON DEVOLUTION TO SET ASIDE TWENTY PERCENT (20%)
was renamed as the LOCAL GOVERNMENT SERVICE EQUALIZATION OF THE LOCAL GOVERNMENT SERVICE EQUALIZATION FUND (LGSEF)
FUND (LGSEF). Under said appropriations law, the amount of FOR LOCAL AFFIRMATIVE ACTION PROJECTS AND OTHER PRIORITY
96,780,000,000 was allotted as the share of the LGUs in the internal revenue INITIATIVES FOR LGUs INSTITUTIONAL AND CAPABILITY BUILDING IN
taxes. Item No. 1, Special Provisions, Title XXXVI A. Internal Revenue ACCORDANCE WITH THE IMPLEMENTING GUIDELINES AND
Allotment of Rep. Act No. 8745 contained the following proviso: MECHANICS AS PROMULGATED BY THE COMMITTEE.

... PROVIDED, That the amount of FIVE BILLION PESOS (5,000,000,000) These OCD resolutions were approved by then President Estrada on October
shall be earmarked for the Local Government Service Equalization Fund for 6, 1999.
the funding requirements of projects and activities arising from the full and
efficient implementation of devolved functions and services of local Under the allocation scheme adopted pursuant to Resolution No. OCD-99-
government units pursuant to R.A. No. 7160, otherwise known as the Local 005, the five billion pesos LGSEF was to be allocated as follows:
Government Code of 1991: PROVIDED, FURTHER, That such amount shall
be released to the local government units subject to the implementing rules 1. The PhP4 Billion of the LGSEF shall be allocated in accordance with the
and regulations, including such mechanisms and guidelines for the equitable allocation scheme and implementing guidelines and mechanics promulgated
allocations and distribution of said fund among local government units subject and adopted by the OCD. To wit:
to the guidelines that may be prescribed by the Oversight Committee on
Devolution as constituted pursuant to Book IV, Title III, Section 533(b) of R.A. a. The first PhP2 Billion of the LGSEF shall be allocated in accordance with
No. 7160. The Internal Revenue Allotment shall be released directly by the the codal formula sharing scheme as prescribed under the 1991 Local
Department of Budget and Management to the Local Government Units Government Code;
concerned.
b. The second PhP2 Billion of the LGSEF shall be allocated in accordance with
On July 28, 1999, the Oversight Committee (with then Executive Secretary a modified 1992 cost of devolution fund (CODEF) sharing scheme, as
Ronaldo B. Zamora as Chairman) passed Resolution Nos. OCD-99-003, OCD- recommended by the respective leagues of provinces, cities and municipalities
99-005 and OCD-99-006 entitled as follows: to the OCD. The modified CODEF sharing formula is as follows:

OCD-99-005 Province : 40%

RESOLUTION ADOPTING THE ALLOCATION SCHEME FOR THE PhP5 Cities : 20%
BILLION CY 1999 LOCAL GOVERNMENT SERVICE EQUALIZATION FUND
(LGSEF) AND REQUESTING HIS EXCELLENCY PRESIDENT JOSEPH Municipalities : 40%
EJERCITO ESTRADA TO APPROVE SAID ALLOCATION SCHEME.
This is applied to the P2 Billion after the approved amounts granted to
OCD-99-006 individual provinces, cities and municipalities as assistance to cover decrease
in 1999 IRA share due to reduction in land area have been taken out.
RESOLUTION ADOPTING THE ALLOCATION SCHEME FOR THE PhP4.0
BILLION OF THE 1999 LOCAL GOVERNMENT SERVICE EQUALIZATION 2. The remaining PhP1 Billion of the LGSEF shall be earmarked to support
FUND AND ITS CONCOMITANT GENERAL FRAMEWORK, local affirmative action projects and other priority initiatives submitted by LGUs
IMPLEMENTING GUIDELINES AND MECHANICS FOR ITS to the Oversight Committee on Devolution for approval in accordance with its
IMPLEMENTATION AND RELEASE, AS PROMULGATED BY THE prescribed guidelines as promulgated and adopted by the OCD.
OVERSIGHT COMMITTEE ON DEVOLUTION.
In Resolution No. OCD-99-003, the Oversight Committee set aside the one
OCD-99-003 billion pesos or 20% of the LGSEF to support Local Affirmative Action Projects
(LAAPs) of LGUs. This remaining amount was intended to "respond to the
urgent need for additional funds assistance, otherwise not available within the
parameters of other existing fund sources." For LGUs to be eligible for funding k. other projects that may be authorized by the OCD consistent with the
under the one-billion-peso portion of the LGSEF, the OCD promulgated the aforementioned objectives and guidelines;
following:
4. Except on extremely meritorious cases, as may be determined by the
III. CRITERIA FOR ELIGIBILITY: Oversight Committee on Devolution, this portion of the LGSEF shall not be
used in expenditures for personal costs or benefits under existing laws
1. LGUs (province, city, municipality, or barangay), individually or by group or applicable to governments. Generally, this fund shall cover the following
multi-LGUs or leagues of LGUs, especially those belonging to the 5th and 6th objects of expenditures for programs, projects and activities arising from the
class, may access the fund to support any projects or activities that satisfy any implementation of devolved and regular functions and services:
of the aforecited purposes. A barangay may also access this fund directly or
through their respective municipality or city. a. acquisition/procurement of supplies and materials critical to the full and
effective implementation of devolved programs, projects and activities;
2. The proposed project/activity should be need-based, a local priority, with
high development impact and are congruent with the socio-cultural, economic b. repair and/or improvement of facilities;
and development agenda of the Estrada Administration, such as food security,
poverty alleviation, electrification, and peace and order, among others. c. repair and/or upgrading of equipment;

3. Eligible for funding under this fund are projects arising from, but not limited d. acquisition of basic equipment;
to, the following areas of concern:
e. construction of additional or new facilities;
a. delivery of local health and sanitation services, hospital services and other
tertiary services; f. counterpart contribution to joint arrangements or collective projects among
groups of municipalities, cities and/or provinces related to devolution and
b. delivery of social welfare services; delivery of basic services.

c. provision of socio-cultural services and facilities for youth and community 5. To be eligible for funding, an LGU or group of LGU shall submit to the
development; Oversight Committee on Devolution through the Department of Interior and
Local Governments, within the prescribed schedule and timeframe, a Letter
d. provision of agricultural and on-site related research; Request for Funding Support from the Affirmative Action Program under the
LGSEF, duly signed by the concerned LGU(s) and endorsed by cooperators
e. improvement of community-based forestry projects and other local projects and/or beneficiaries, as well as the duly signed Resolution of Endorsement by
on environment and natural resources protection and conservation; the respective Sanggunian(s) of the LGUs concerned. The LGU-proponent
shall also be required to submit the Project Request (PR), using OCD Project
f. improvement of tourism facilities and promotion of tourism; Request Form No. 99-02, that details the following:

g. peace and order and public safety; (a) general description or brief of the project;

h. construction, repair and maintenance of public works and infrastructure, (b) objectives and justifications for undertaking the project, which should
including public buildings and facilities for public use, especially those highlight the benefits to the locality and the expected impact to the local
destroyed or damaged by man-made or natural calamities and disaster as well program/project arising from the full and efficient implementation of social
as facilities for water supply, flood control and river dikes; services and facilities, at the local levels;

i. provision of local electrification facilities; (c) target outputs or key result areas;

j. livelihood and food production services, facilities and equipment; (d) schedule of activities and details of requirements;
Provided that the respective Leagues representing the provinces, cities,
(e) total cost requirement of the project; municipalities and barangays shall draw up and adopt the horizontal
distribution/sharing schemes among the member LGUs whereby the Leagues
(f) proponent's counterpart funding share, if any, and identified source(s) of concerned may opt to adopt direct financial assistance or project-based
counterpart funds for the full implementation of the project; arrangement, such that the LGSEF allocation for individual LGU shall be
released directly to the LGU concerned;
(g) requested amount of project cost to be covered by the LGSEF.
Provided further that the individual LGSEF shares to LGUs are used in
Further, under the guidelines formulated by the Oversight Committee as accordance with the general purposes and guidelines promulgated by the
contained in Attachment - Resolution No. OCD-99-003, the LGUs were OCD for the implementation of the LGSEF at the local levels pursuant to Res.
required to identify the projects eligible for funding under the one-billion-peso No. OCD-99-006 dated October 7, 1999 and pursuant to the Leagues'
portion of the LGSEF and submit the project proposals thereof and other guidelines and mechanism as approved by the OCD;
documentary requirements to the DILG for appraisal. The project proposals
that passed the DILG's appraisal would then be submitted to the Oversight Provided further that each of the Leagues shall submit to the OCD for its
Committee for review, evaluation and approval. Upon its approval, the approval their respective allocation scheme, the list of LGUs with the
Oversight Committee would then serve notice to the DBM for the preparation corresponding LGSEF shares and the corresponding project categories if
of the Special Allotment Release Order (SARO) and Notice of Cash Allocation project-based;
(NCA) to effect the release of funds to the said LGUs.
Provided further that upon approval by the OCD, the lists of LGUs shall be
The LGSEF in the GAA of 2000 endorsed to the DBM as the basis for the preparation of the corresponding
NCAs, SAROs, and related budget/release documents.
Under Rep. Act No. 8760, otherwise known as the GAA of 2000, the amount
of 111,778,000,000 was allotted as the share of the LGUs in the internal 2. The remaining 1,500,000,000 of the CY 2000 LGSEF shall be earmarked
revenue taxes. As in the GAA of 1999, the GAA of 2000 contained a proviso to support the following initiatives and local affirmative action projects, to be
earmarking five billion pesos of the IRA for the LGSEF. This proviso, found in endorsed to and approved by the Oversight Committee on Devolution in
Item No. 1, Special Provisions, Title XXXVII A. Internal Revenue Allotment, accordance with the OCD agreements, guidelines, procedures and
was similarly worded as that contained in the GAA of 1999. documentary requirements:

The Oversight Committee, in its Resolution No. OCD-2000-023 dated June 22, On July 5, 2000, then President Estrada issued a Memorandum authorizing
2000, adopted the following allocation scheme governing the five billion pesos then Executive Secretary Zamora and the DBM to implement and release the
LGSEF for 2000: 2.5 billion pesos LGSEF for 2000 in accordance with Resolution No. OCD-
2000-023.
1. The PhP3.5 Billion of the CY 2000 LGSEF shall be allocated to and shared
by the four levels of LGUs, i.e., provinces, cities, municipalities, and Thereafter, the Oversight Committee, now under the administration of
barangays, using the following percentage-sharing formula agreed upon and President Gloria Macapagal-Arroyo, promulgated Resolution No. OCD-2001-
jointly endorsed by the various Leagues of LGUs: 29 entitled "ADOPTING RESOLUTION NO. OCD-2000-023 IN THE
ALLOCATION, IMPLEMENTATION AND RELEASE OF THE REMAINING
For Provinces 26% or 910,000,000 2.5 BILLION LGSEF FOR CY 2000." Under this resolution, the amount of
one billion pesos of the LGSEF was to be released in accordance with
For Cities 23% or 805,000,000 paragraph 1 of Resolution No. OCD-2000-23, to complete the 3.5 billion pesos
allocated to the LGUs, while the amount of 1.5 billion pesos was allocated for
For Municipalities 35% or 1,225,000,000 the LAAP. However, out of the latter amount, 400,000,000 was to be
allocated and released as follows: 50,000,000 as financial assistance to the
For Barangays 16% or 560,000,000 LAAPs of LGUs; 275,360,227 as financial assistance to cover the decrease
in the IRA of LGUs concerned due to reduction in land area; and 74,639,773
for the LGSEF Capability-Building Fund.
On January 25, 2002, Pres. Macapagal-Arroyo approved Resolution No. OCD-
The LGSEF in the GAA of 2001 2002-001.

In view of the failure of Congress to enact the general appropriations law for The Petitioner's Case
2001, the GAA of 2000 was deemed re-enacted, together with the IRA of the
LGUs therein and the proviso earmarking five billion pesos thereof for the The petitioner now comes to this Court assailing as unconstitutional and void
LGSEF. the provisos in the GAAs of 1999, 2000 and 2001, relating to the LGSEF.
Similarly assailed are the Oversight Committee's Resolutions Nos. OCD-99-
On January 9, 2002, the Oversight Committee adopted Resolution No. OCD- 003, OCD-99-005, OCD-99-006, OCD-2000-023, OCD-2001-029 and OCD-
2002-001 allocating the five billion pesos LGSEF for 2001 as follows: 2002-001 issued pursuant thereto. The petitioner submits that the assailed
provisos in the GAAs and the OCD resolutions, insofar as they earmarked the
Modified Codal Formula 3.000 billion amount of five billion pesos of the IRA of the LGUs for 1999, 2000 and 2001
Priority Projects 1.900 billion for the LGSEF and imposed conditions for the release thereof, violate the
Capability Building Fund.100 billion Constitution and the Local Government Code of 1991.

5.000 billion Section 6, Article X of the Constitution is invoked as it mandates that the "just
RESOLVED FURTHER, that the 3.0 B of the CY 2001 LGSEF which is to be share" of the LGUs shall be automatically released to them. Sections 18 and
allocated according to the modified codal formula shall be released to the four 286 of the Local Government Code of 1991, which enjoin that the "just share"
levels of LGUs, i.e., provinces, cities, municipalities and barangays, as follows: of the LGUs shall be "automatically and directly" released to them "without
need of further action" are, likewise, cited.
LGUs Percentage Amount
Provinces 25 0.750 billion The petitioner posits that to subject the distribution and release of the five-
Cities 25 0.750 billion-peso portion of the IRA, classified as the LGSEF, to compliance by the
Municipalities 35 1.050 LGUs with the implementing rules and regulations, including the mechanisms
Barangays 15 0.450 and guidelines prescribed by the Oversight Committee, contravenes the
explicit directive of the Constitution that the LGUs' share in the national taxes
100 3.000 billion "shall be automatically released to them." The petitioner maintains that the use
RESOLVED FURTHER, that the 1.9 B earmarked for priority projects shall of the word "shall" must be given a compulsory meaning.
be distributed according to the following criteria:
To further buttress this argument, the petitioner contends that to vest the
1.0 For projects of the 4th, 5th and 6th class LGUs; or Oversight Committee with the authority to determine the distribution and
release of the LGSEF, which is a part of the IRA of the LGUs, is an anathema
2.0 Projects in consonance with the President's State of the Nation Address to the principle of local autonomy as embodied in the Constitution and the
(SONA)/summit commitments. Local Government Code of 1991. The petitioner cites as an example the
experience in 2001 when the release of the LGSEF was long delayed because
RESOLVED FURTHER, that the remaining 100 million LGSEF capability the Oversight Committee was not able to convene that year and no guidelines
building fund shall be distributed in accordance with the recommendation of were issued therefor. Further, the possible disapproval by the Oversight
the Leagues of Provinces, Cities, Municipalities and Barangays, and approved Committee of the project proposals of the LGUs would result in the diminution
by the OCD. of the latter's share in the IRA.

Upon receipt of a copy of the above resolution, Gov. Mandanas wrote to the Another infringement alleged to be occasioned by the assailed OCD
individual members of the Oversight Committee seeking the reconsideration resolutions is the improper amendment to Section 285 of the Local
of Resolution No. OCD-2002-001. He also wrote to Pres. Macapagal-Arroyo Government Code of 1991 on the percentage sharing of the IRA among the
urging her to disapprove said resolution as it violates the Constitution and the LGUs. Said provision allocates the IRA as follows: Provinces 23%; Cities
Local Government Code of 1991. 23%; Municipalities 34%; and Barangays 20%.8 This formula has been
improperly amended or modified, with respect to the five-billion-peso portion
of the IRA allotted for the LGSEF, by the assailed OCD resolutions as they merely intended to be the "default share" of the LGUs to do away with the need
invariably provided for a different sharing scheme. to determine annually by law their "just share." However, the LGUs have no
vested right in a permanent or fixed percentage as Congress may increase or
The modifications allegedly constitute an illegal amendment by the executive decrease the "just share" of the LGUs in accordance with what it believes is
branch of a substantive law. Moreover, the petitioner mentions that in the appropriate for their operation. There is nothing in the Constitution which
Letter dated December 5, 2001 of respondent Executive Secretary Romulo prohibits Congress from making such determination through the
addressed to respondent Secretary Boncodin, the former endorsed to the latter appropriations laws. If the provisions of a particular statute, the GAA in this
the release of funds to certain LGUs from the LGSEF in accordance with the case, are within the constitutional power of the legislature to enact, they should
handwritten instructions of President Arroyo. Thus, the LGUs are at a loss as be sustained whether the courts agree or not in the wisdom of their enactment.
to how a portion of the LGSEF is actually allocated. Further, there are still
portions of the LGSEF that, to date, have not been received by the petitioner; On procedural grounds, the respondents urge the Court to dismiss the petition
hence, resulting in damage and injury to the petitioner. outright as the same is defective. The petition allegedly raises factual issues
which should be properly threshed out in the lower courts, not this Court, not
The petitioner prays that the Court declare as unconstitutional and void the being a trier of facts. Specifically, the petitioner's allegation that there are
assailed provisos relating to the LGSEF in the GAAs of 1999, 2000 and 2001 portions of the LGSEF that it has not, to date, received, thereby causing it (the
and the assailed OCD resolutions (Resolutions Nos. OCD-99-003, OCD-99- petitioner) injury and damage, is subject to proof and must be substantiated in
005, OCD-99-006, OCD-2000-023, OCD-2001-029 and OCD-2002-001) the proper venue, i.e., the lower courts.
issued by the Oversight Committee pursuant thereto. The petitioner, likewise,
prays that the Court direct the respondents to rectify the unlawful and illegal Further, according to the respondents, the petition has already been rendered
distribution and releases of the LGSEF for the aforementioned years and moot and academic as it no longer presents a justiciable controversy. The
release the same in accordance with the sharing formula under Section 285 of IRAs for the years 1999, 2000 and 2001, have already been released and the
the Local Government Code of 1991. Finally, the petitioner urges the Court to government is now operating under the 2003 budget. In support of this, the
declare that the entire IRA should be released automatically without further respondents submitted certifications issued by officers of the DBM attesting to
action by the LGUs as required by the Constitution and the Local Government the release of the allocation or shares of the petitioner in the LGSEF for 1999,
Code of 1991. 2000 and 2001. There is, therefore, nothing more to prohibit.

The Respondents' Arguments Finally, the petitioner allegedly has no legal standing to bring the suit because
it has not suffered any injury. In fact, the petitioner's "just share" has even
The respondents, through the Office of the Solicitor General, urge the Court to increased. Pursuant to Section 285 of the Local Government Code of 1991,
dismiss the petition on procedural and substantive grounds. On the latter, the the share of the provinces is 23%. OCD Nos. 99-005, 99-006 and 99-003 gave
respondents contend that the assailed provisos in the GAAs of 1999, 2000 and the provinces 40% of 2 billion of the LGSEF. OCD Nos. 2000-023 and 2001-
2001 and the assailed resolutions issued by the Oversight Committee are not 029 apportioned 26% of 3.5 billion to the provinces. On the other hand, OCD
constitutionally infirm. The respondents advance the view that Section 6, No. 2001-001 allocated 25% of 3 billion to the provinces. Thus, the petitioner
Article X of the Constitution does not specify that the "just share" of the LGUs has not suffered any injury in the implementation of the assailed provisos in
shall be determined solely by the Local Government Code of 1991. Moreover, the GAAs of 1999, 2000 and 2001 and the OCD resolutions.
the phrase "as determined by law" in the same constitutional provision means
that there exists no limitation on the power of Congress to determine what is The Ruling of the Court Procedural Issues
the "just share" of the LGUs in the national taxes. In other words, Congress is
the arbiter of what should be the "just share" of the LGUs in the national taxes. Before resolving the petition on its merits, the Court shall first rule on the
following procedural issues raised by the respondents: (1) whether the
The respondents further theorize that Section 285 of the Local Government petitioner has legal standing or locus standi to file the present suit; (2) whether
Code of 1991, which provides for the percentage sharing of the IRA among the petition involves factual questions that are properly cognizable by the lower
the LGUs, was not intended to be a fixed determination of their "just share" in courts; and (3) whether the issue had been rendered moot and academic.
the national taxes. Congress may enact other laws, including appropriations
laws such as the GAAs of 1999, 2000 and 2001, providing for a different The petitioner has locus standi to maintain the present suit
sharing formula. Section 285 of the Local Government Code of 1991 was
The gist of the question of standing is whether a party has "alleged such a 3. The release of the LGSEF to the LGUs only upon their compliance with the
personal stake in the outcome of the controversy as to assure that concrete implementing rules and regulations, including the guidelines and mechanisms,
adverseness which sharpens the presentation of issues upon which the court prescribed by the Oversight Committee.
so largely depends for illumination of difficult constitutional questions."9
Accordingly, it has been held that the interest of a party assailing the Considering that these facts, which are necessary to resolve the legal question
constitutionality of a statute must be direct and personal. Such party must be now before this Court, are no longer in issue, the same need not be determined
able to show, not only that the law or any government act is invalid, but also by a trial court.11 In any case, the rule on hierarchy of courts will not prevent
that he has sustained or is in imminent danger of sustaining some direct injury this Court from assuming jurisdiction over the petition. The said rule may be
as a result of its enforcement, and not merely that he suffers thereby in some relaxed when the redress desired cannot be obtained in the appropriate courts
indefinite way. It must appear that the person complaining has been or is about or where exceptional and compelling circumstances justify availment of a
to be denied some right or privilege to which he is lawfully entitled or that he is remedy within and calling for the exercise of this Court's primary jurisdiction.12
about to be subjected to some burdens or penalties by reason of the statute or
act complained of.10 The crucial legal issue submitted for resolution of this Court entails the proper
legal interpretation of constitutional and statutory provisions. Moreover, the
The Court holds that the petitioner possesses the requisite standing to "transcendental importance" of the case, as it necessarily involves the
maintain the present suit. The petitioner, a local government unit, seeks relief application of the constitutional principle on local autonomy, cannot be
in order to protect or vindicate an interest of its own, and of the other LGUs. gainsaid. The nature of the present controversy, therefore, warrants the
This interest pertains to the LGUs' share in the national taxes or the IRA. The relaxation by this Court of procedural rules in order to resolve the case
petitioner's constitutional claim is, in substance, that the assailed provisos in forthwith.
the GAAs of 1999, 2000 and 2001, and the OCD resolutions contravene
Section 6, Article X of the Constitution, mandating the "automatic release" to The substantive issue needs to be resolved notwithstanding the supervening
the LGUs of their share in the national taxes. Further, the injury that the events
petitioner claims to suffer is the diminution of its share in the IRA, as provided
under Section 285 of the Local Government Code of 1991, occasioned by the Granting arguendo that, as contended by the respondents, the resolution of
implementation of the assailed measures. These allegations are sufficient to the case had already been overtaken by supervening events as the IRA,
grant the petitioner standing to question the validity of the assailed provisos in including the LGSEF, for 1999, 2000 and 2001, had already been released
the GAAs of 1999, 2000 and 2001, and the OCD resolutions as the petitioner and the government is now operating under a new appropriations law, still,
clearly has "a plain, direct and adequate interest" in the manner and there is compelling reason for this Court to resolve the substantive issue raised
distribution of the IRA among the LGUs. by the instant petition. Supervening events, whether intended or accidental,
cannot prevent the Court from rendering a decision if there is a grave violation
The petition involves a significant legal issue of the Constitution.13 Even in cases where supervening events had made the
cases moot, the Court did not hesitate to resolve the legal or constitutional
The crux of the instant controversy is whether the assailed provisos contained issues raised to formulate controlling principles to guide the bench, bar and
in the GAAs of 1999, 2000 and 2001, and the OCD resolutions infringe the public.14
Constitution and the Local Government Code of 1991. This is undoubtedly a
legal question. On the other hand, the following facts are not disputed: Another reason justifying the resolution by this Court of the substantive issue
now before it is the rule that courts will decide a question otherwise moot and
1. The earmarking of five billion pesos of the IRA for the LGSEF in the assailed academic if it is "capable of repetition, yet evading review."15 For the GAAs in
provisos in the GAAs of 1999, 2000 and re-enacted budget for 2001; the coming years may contain provisos similar to those now being sought to
be invalidated, and yet, the question may not be decided before another GAA
2. The promulgation of the assailed OCD resolutions providing for the is enacted. It, thus, behooves this Court to make a categorical ruling on the
allocation schemes covering the said five billion pesos and the implementing substantive issue now.
rules and regulations therefor; and
Substantive Issue
As earlier intimated, the resolution of the substantive legal issue in this case and the OCD resolutions promulgated pursuant thereto, transgress the
calls for the application of a most important constitutional policy and principle, Constitution and the Local Government Code of 1991.
that of local autonomy.16 In Article II of the Constitution, the State has
expressly adopted as a policy that: The assailed provisos in the GAAs of 1999, 2000 and 2001 and the OCD
resolutions violate the constitutional precept on local autonomy
Section 25. The State shall ensure the autonomy of local governments.
Section 6, Article X of the Constitution reads:
An entire article (Article X) of the Constitution has been devoted to
guaranteeing and promoting the autonomy of LGUs. Section 2 thereof Sec. 6. Local government units shall have a just share, as determined by law,
reiterates the State policy in this wise: in the national taxes which shall be automatically released to them.

Section 2. The territorial and political subdivisions shall enjoy local autonomy. When parsed, it would be readily seen that this provision mandates that (1) the
LGUs shall have a "just share" in the national taxes; (2) the "just share" shall
Consistent with the principle of local autonomy, the Constitution confines the be determined by law; and (3) the "just share" shall be automatically released
President's power over the LGUs to one of general supervision.17 This to the LGUs.
provision has been interpreted to exclude the power of control. The distinction
between the two powers was enunciated in Drilon v. Lim:18 The Local Government Code of 1991, among its salient provisions,
underscores the automatic release of the LGUs' "just share" in this wise:
An officer in control lays down the rules in the doing of an act. If they are not
followed, he may, in his discretion, order the act undone or re-done by his Sec. 18. Power to Generate and Apply Resources. Local government units
subordinate or he may even decide to do it himself. Supervision does not cover shall have the power and authority to establish an organization that shall be
such authority. The supervisor or superintendent merely sees to it that the responsible for the efficient and effective implementation of their development
rules are followed, but he himself does not lay down such rules, nor does he plans, program objectives and priorities; to create their own sources of revenue
have the discretion to modify or replace them. If the rules are not observed, he and to levy taxes, fees, and charges which shall accrue exclusively for their
may order the work done or re-done but only to conform to the prescribed use and disposition and which shall be retained by them; to have a just share
rules. He may not prescribe his own manner for doing the act. He has no in national taxes which shall be automatically and directly released to them
judgment on this matter except to see to it that the rules are followed.19 without need of further action;

The Local Government Code of 199120 was enacted to flesh out the mandate ...
of the Constitution.21 The State policy on local autonomy is amplified in
Section 2 thereof: Sec. 286. Automatic Release of Shares. (a) The share of each local
government unit shall be released, without need of any further action, directly
Sec. 2. Declaration of Policy. (a) It is hereby declared the policy of the State to the provincial, city, municipal or barangay treasurer, as the case may be, on
that the territorial and political subdivisions of the State shall enjoy genuine a quarterly basis within five (5) days after the end of each quarter, and which
and meaningful local autonomy to enable them to attain their fullest shall not be subject to any lien or holdback that may be imposed by the national
development as self-reliant communities and make them more effective government for whatever purpose.
partners in the attainment of national goals. Toward this end, the State shall
provide for a more responsive and accountable local government structure (b) Nothing in this Chapter shall be understood to diminish the share of local
instituted through a system of decentralization whereby local government units government units under existing laws.
shall be given more powers, authority, responsibilities, and resources. The
process of decentralization shall proceed from the National Government to the Webster's Third New International Dictionary defines "automatic" as
local government units. "involuntary either wholly or to a major extent so that any activity of the will is
largely negligible; of a reflex nature; without volition; mechanical; like or
Guided by these precepts, the Court shall now determine whether the assailed suggestive of an automaton." Further, the word "automatically" is defined as
provisos in the GAAs of 1999, 2000 and 2001, earmarking for each "in an automatic manner: without thought or conscious intention." Being
corresponding year the amount of five billion pesos of the IRA for the LGSEF "automatic," thus, connotes something mechanical, spontaneous and
perfunctory. As such, the LGUs are not required to perform any act to receive
the "just share" accruing to them from the national coffers. As emphasized by 2 billion - allocated according to Sec. 285 LGC
the Local Government Code of 1991, the "just share" of the LGUs shall be
released to them "without need of further action." Construing Section 286 of 2 billion - Modified Sharing Formula (Provinces 40%;
the LGC, we held in Pimentel, Jr. v. Aguirre,22 viz:
Cities 20%; Municipalities 40%)
Section 4 of AO 372 cannot, however, be upheld. A basic feature of local fiscal
autonomy is the automatic release of the shares of LGUs in the National 1 billion projects (LAAP) approved by OCD.24
internal revenue. This is mandated by no less than the Constitution. The Local
Government Code specifies further that the release shall be made directly to For 2000
the LGU concerned within five (5) days after every quarter of the year and
"shall not be subject to any lien or holdback that may be imposed by the 3.5 billion Modified Sharing Formula (Provinces 26%;
national government for whatever purpose." As a rule, the term "SHALL" is a
word of command that must be given a compulsory meaning. The provision is, Cities 23%; Municipalities 35%; Barangays 16%);
therefore, IMPERATIVE.
1.5 billion projects (LAAP) approved by the OCD.25
Section 4 of AO 372, however, orders the withholding, effective January 1,
1998, of 10 percent of the LGUs' IRA "pending the assessment and evaluation For 2001
by the Development Budget Coordinating Committee of the emerging fiscal
situation" in the country. Such withholding clearly contravenes the Constitution 3 billion Modified Sharing Formula (Provinces 25%;
and the law. Although temporary, it is equivalent to a holdback, which means
"something held back or withheld, often temporarily." Hence, the "temporary" Cities 25%; Municipalities 35%; Barangays 15%)
nature of the retention by the national government does not matter. Any
retention is prohibited. 1.9 billion priority projects

In sum, while Section 1 of AO 372 may be upheld as an advisory effected in 100 million capability building fund.26
times of national crisis, Section 4 thereof has no color of validity at all. The
latter provision effectively encroaches on the fiscal autonomy of local Significantly, the LGSEF could not be released to the LGUs without the
governments. Concededly, the President was well-intentioned in issuing his Oversight Committee's prior approval. Further, with respect to the portion of
Order to withhold the LGUs' IRA, but the rule of law requires that even the best the LGSEF allocated for various projects of the LGUs (1 billion for 1999; 1.5
intentions must be carried out within the parameters of the Constitution and billion for 2000 and 2 billion for 2001), the Oversight Committee, through the
the law. Verily, laudable purposes must be carried out by legal methods.23 assailed OCD resolutions, laid down guidelines and mechanisms that the
LGUs had to comply with before they could avail of funds from this portion of
The "just share" of the LGUs is incorporated as the IRA in the appropriations the LGSEF. The guidelines required (a) the LGUs to identify the projects
law or GAA enacted by Congress annually. Under the assailed provisos in the eligible for funding based on the criteria laid down by the Oversight Committee;
GAAs of 1999, 2000 and 2001, a portion of the IRA in the amount of five billion (b) the LGUs to submit their project proposals to the DILG for appraisal; (c) the
pesos was earmarked for the LGSEF, and these provisos imposed the project proposals that passed the appraisal of the DILG to be submitted to the
condition that "such amount shall be released to the local government units Oversight Committee for review, evaluation and approval. It was only upon
subject to the implementing rules and regulations, including such mechanisms approval thereof that the Oversight Committee would direct the DBM to release
and guidelines for the equitable allocations and distribution of said fund among the funds for the projects.
local government units subject to the guidelines that may be prescribed by the
Oversight Committee on Devolution." Pursuant thereto, the Oversight To the Court's mind, the entire process involving the distribution and release
Committee, through the assailed OCD resolutions, apportioned the five billion of the LGSEF is constitutionally impermissible. The LGSEF is part of the IRA
pesos LGSEF such that: or "just share" of the LGUs in the national taxes. To subject its distribution and
release to the vagaries of the implementing rules and regulations, including
For 1999 the guidelines and mechanisms unilaterally prescribed by the Oversight
Committee from time to time, as sanctioned by the assailed provisos in the This provision no longer appears in the present configuration; does this mean
GAAs of 1999, 2000 and 2001 and the OCD resolutions, makes the release that the concept of giving local autonomy to local governments is no longer
not automatic, a flagrant violation of the constitutional and statutory mandate adopted as far as this Article is concerned?
that the "just share" of the LGUs "shall be automatically released to them." The
LGUs are, thus, placed at the mercy of the Oversight Committee. MR. NOLLEDO. No. In the report of the Committee on Preamble, National
Territory, and Declaration of Principles, that concept is included and widened
Where the law, the Constitution in this case, is clear and unambiguous, it must upon the initiative of Commissioner Bennagen.
be taken to mean exactly what it says, and courts have no choice but to see
to it that the mandate is obeyed.27 Moreover, as correctly posited by the MR. MAAMBONG. Thank you for that.
petitioner, the use of the word "shall" connotes a mandatory order. Its use in a
statute denotes an imperative obligation and is inconsistent with the idea of With regard to Section 6, sources of revenue, the creation of sources as
discretion.28 provided by previous law was "subject to limitations as may be provided by
law," but now, we are using the term "subject to such guidelines as may be
Indeed, the Oversight Committee exercising discretion, even control, over the fixed by law." In Section 7, mention is made about the "unique, distinct and
distribution and release of a portion of the IRA, the LGSEF, is an anathema to exclusive charges and contributions," and in Section 8, we talk about
and subversive of the principle of local autonomy as embodied in the "exclusivity of local taxes and the share in the national wealth." Incidentally, I
Constitution. Moreover, it finds no statutory basis at all as the Oversight was one of the authors of this provision, and I am very thankful. Does this
Committee was created merely to formulate the rules and regulations for the indicate local autonomy, or was the wording of the law changed to give more
efficient and effective implementation of the Local Government Code of 1991 autonomy to the local government units?31
to ensure "compliance with the principles of local autonomy as defined under
the Constitution."29 In fact, its creation was placed under the title of "Transitory MR. NOLLEDO. Yes. In effect, those words indicate also "decentralization"
Provisions," signifying its ad hoc character. According to Senator Aquilino Q. because local political units can collect taxes, fees and charges subject merely
Pimentel, the principal author and sponsor of the bill that eventually became to guidelines, as recommended by the league of governors and city mayors,
Rep. Act No. 7160, the Committee's work was supposed to be done a year with whom I had a dialogue for almost two hours. They told me that limitations
from the approval of the Code, or on October 10, 1992.30 The Oversight may be questionable in the sense that Congress may limit and in effect deny
Committee's authority is undoubtedly limited to the implementation of the Local the right later on.
Government Code of 1991, not to supplant or subvert the same. Neither can it
exercise control over the IRA, or even a portion thereof, of the LGUs. MR. MAAMBONG. Also, this provision on "automatic release of national tax
share" points to more local autonomy. Is this the intention?
That the automatic release of the IRA was precisely intended to guarantee and
promote local autonomy can be gleaned from the discussion below between MR. NOLLEDO. Yes, the Commissioner is perfectly right.32
Messrs. Jose N. Nolledo and Regalado M. Maambong, then members of the
1986 Constitutional Commission, to wit: The concept of local autonomy was explained in Ganzon v. Court of Appeals33
in this wise:
MR. MAAMBONG. Unfortunately, under Section 198 of the Local Government
Code, the existence of subprovinces is still acknowledged by the law, but the As the Constitution itself declares, local autonomy 'means a more responsive
statement of the Gentleman on this point will have to be taken up probably by and accountable local government structure instituted through a system of
the Committee on Legislation. A second point, Mr. Presiding Officer, is that decentralization.' The Constitution, as we observed, does nothing more than
under Article 2, Section 10 of the 1973 Constitution, we have a provision which to break up the monopoly of the national government over the affairs of local
states: governments and as put by political adherents, to "liberate the local
governments from the imperialism of Manila." Autonomy, however, is not
The State shall guarantee and promote the autonomy of local government meant to end the relation of partnership and interdependence between the
units, especially the barrio, to insure their fullest development as self-reliant central administration and local government units, or otherwise, to usher in a
communities. regime of federalism. The Charter has not taken such a radical step. Local
governments, under the Constitution, are subject to regulation, however
limited, and for no other purpose than precisely, albeit paradoxically, to
enhance self-government. Following this ratiocination, the Court in Pimentel struck down as
unconstitutional Section 4 of Administrative Order (A.O.) No. 372 which
As we observed in one case, decentralization means devolution of national ordered the withholding, effective January 1, 1998, of ten percent of the LGUs'
administration but not power to the local levels. Thus: IRA "pending the assessment and evaluation by the Development Budget
Coordinating Committee of the emerging fiscal situation."
Now, autonomy is either decentralization of administration or decentralization
of power. There is decentralization of administration when the central In like manner, the assailed provisos in the GAAs of 1999, 2000 and 2001, and
government delegates administrative powers to political subdivisions in order the OCD resolutions constitute a "withholding" of a portion of the IRA. They
to broaden the base of government power and in the process to make local put on hold the distribution and release of the five billion pesos LGSEF and
governments 'more responsive and accountable' and 'ensure their fullest subject the same to the implementing rules and regulations, including the
development as self-reliant communities and make them more effective guidelines and mechanisms prescribed by the Oversight Committee from time
partners in the pursuit of national development and social progress.' At the to time. Like Section 4 of A.O. 372, the assailed provisos in the GAAs of 1999,
same time, it relieves the central government of the burden of managing local 2000 and 2001 and the OCD resolutions effectively encroach on the fiscal
affairs and enables it to concentrate on national concerns. The President autonomy enjoyed by the LGUs and must be struck down. They cannot,
exercises 'general supervision' over them, but only to 'ensure that local affairs therefore, be upheld.
are administered according to law.' He has no control over their acts in the
sense that he can substitute their judgments with his own. The assailed provisos in the GAAs of 1999, 2000

Decentralization of power, on the other hand, involves an abdication of political and 2001 and the OCD resolutions cannot amend
power in the [sic] favor of local governments [sic] units declared to be
autonomous. In that case, the autonomous government is free to chart its own Section 285 of the Local Government Code of 1991
destiny and shape its future with minimum intervention from central authorities.
According to a constitutional author, decentralization of power amounts to 'self- Section 28438 of the Local Government Code provides that, beginning the
immolation,' since in that event, the autonomous government becomes third year of its effectivity, the LGUs' share in the national internal revenue
accountable not to the central authorities but to its constituency.34 taxes shall be 40%. This percentage is fixed and may not be reduced except
"in the event the national government incurs an unmanageable public sector
Local autonomy includes both administrative and fiscal autonomy. The fairly deficit" and only upon compliance with stringent requirements set forth in the
recent case of Pimentel v. Aguirre35 is particularly instructive. The Court same section:
declared therein that local fiscal autonomy includes the power of the LGUs to,
inter alia, allocate their resources in accordance with their own priorities: Sec. 284. ...

Under existing law, local government units, in addition to having administrative Provided, That in the event that the national government incurs an
autonomy in the exercise of their functions, enjoy fiscal autonomy as well. unmanageable public sector deficit, the President of the Philippines is hereby
Fiscal autonomy means that local governments have the power to create their authorized, upon recommendation of Secretary of Finance, Secretary of
own sources of revenue in addition to their equitable share in the national taxes Interior and Local Government and Secretary of Budget and Management, and
released by the national government, as well as the power to allocate their subject to consultation with the presiding officers of both Houses of Congress
resources in accordance with their own priorities. It extends to the preparation and the presidents of the liga, to make the necessary adjustments in the
of their budgets, and local officials in turn have to work within the constraints internal revenue allotment of local government units but in no case shall the
thereof. They are not formulated at the national level and imposed on local allotment be less than thirty percent (30%) of the collection of the national
governments, whether they are relevant to local needs and resources or not internal revenue taxes of the third fiscal year preceding the current fiscal year;
...36 Provided, further That in the first year of the effectivity of this Code, the local
government units shall, in addition to the thirty percent (30%) internal revenue
Further, a basic feature of local fiscal autonomy is the constitutionally allotment which shall include the cost of devolved functions for essential public
mandated automatic release of the shares of LGUs in the national internal services, be entitled to receive the amount equivalent to the cost of devolved
revenue.37 personnel services.
cannot include in a general appropriation bill matters that should be more
Thus, from the above provision, the only possible exception to the mandatory properly enacted in a separate legislation.42
automatic release of the LGUs' IRA is if the national internal revenue
collections for the current fiscal year is less than 40 percent of the collections A general appropriations bill is a special type of legislation, whose content is
of the preceding third fiscal year, in which case what should be automatically limited to specified sums of money dedicated to a specific purpose or a
released shall be a proportionate amount of the collections for the current fiscal separate fiscal unit.43 Any provision therein which is intended to amend
year. The adjustment may even be made on a quarterly basis depending on another law is considered an "inappropriate provision." The category of
the actual collections of national internal revenue taxes for the quarter of the "inappropriate provisions" includes unconstitutional provisions and provisions
current fiscal year. In the instant case, however, there is no allegation that the which are intended to amend other laws, because clearly these kinds of laws
national internal revenue tax collections for the fiscal years 1999, 2000 and have no place in an appropriations bill.44
2001 have fallen compared to the preceding three fiscal years.
Increasing or decreasing the IRA of the LGUs or modifying their percentage
Section 285 then specifies how the IRA shall be allocated among the LGUs: sharing therein, which are fixed in the Local Government Code of 1991, are
matters of general and substantive law. To permit Congress to undertake
Sec. 285. Allocation to Local Government Units. The share of local these amendments through the GAAs, as the respondents contend, would be
government units in the internal revenue allotment shall be allocated in the to give Congress the unbridled authority to unduly infringe the fiscal autonomy
following manner: of the LGUs, and thus put the same in jeopardy every year. This, the Court
cannot sanction.
(a) Provinces Twenty-three (23%)
It is relevant to point out at this juncture that, unlike those of 1999, 2000 and
(b) Cities Twenty-three percent (23%); 2001, the GAAs of 2002 and 2003 do not contain provisos similar to the herein
assailed provisos. In other words, the GAAs of 2002 and 2003 have not
(c) Municipalities Thirty-four (34%); and earmarked any amount of the IRA for the LGSEF. Congress had perhaps seen
fit to discontinue the practice as it recognizes its infirmity. Nonetheless, as
(d) Barangays Twenty percent (20%). earlier mentioned, this Court has deemed it necessary to make a definitive
ruling on the matter in order to prevent its recurrence in future appropriations
However, this percentage sharing is not followed with respect to the five billion laws and that the principles enunciated herein would serve to guide the bench,
pesos LGSEF as the assailed OCD resolutions, implementing the assailed bar and public.
provisos in the GAAs of 1999, 2000 and 2001, provided for a different sharing
scheme. For example, for 1999, 2 billion of the LGSEF was allocated as Conclusion
follows: Provinces 40%; Cities 20%; Municipalities 40%.39 For 2000,
3.5 billion of the LGSEF was allocated in this manner: Provinces 26%; In closing, it is well to note that the principle of local autonomy, while
Cities 23%; Municipalities 35%; Barangays 26%.40 For 2001, 3 billion concededly expounded in greater detail in the present Constitution, dates back
of the LGSEF was allocated, thus: Provinces 25%; Cities 25%; to the turn of the century when President William McKinley, in his Instructions
Municipalities 35%; Barangays 15%.41 to the Second Philippine Commission dated April 7, 1900, ordered the new
Government "to devote their attention in the first instance to the establishment
The respondents argue that this modification is allowed since the Constitution of municipal governments in which the natives of the Islands, both in the cities
does not specify that the "just share" of the LGUs shall only be determined by and in the rural communities, shall be afforded the opportunity to manage their
the Local Government Code of 1991. That it is within the power of Congress own affairs to the fullest extent of which they are capable, and subject to the
to enact other laws, including the GAAs, to increase or decrease the "just least degree of supervision and control in which a careful study of their
share" of the LGUs. This contention is untenable. The Local Government Code capacities and observation of the workings of native control show to be
of 1991 is a substantive law. And while it is conceded that Congress may consistent with the maintenance of law, order and loyalty."45 While the 1935
amend any of the provisions therein, it may not do so through appropriations Constitution had no specific article on local autonomy, nonetheless, it limited
laws or GAAs. Any amendment to the Local Government Code of 1991 should the executive power over local governments to "general supervision ... as may
be done in a separate law, not in the appropriations law, because Congress be provided by law."46 Subsequently, the 1973 Constitution explicitly stated
that "[t]he State shall guarantee and promote the autonomy of local
government units, especially the barangay to ensure their fullest development FOUNDATION, INC. (PEACE FOUNDATION, INC.); PHILIPPINE
as self-reliant communities."47 An entire article on Local Government was PARTNERSHIP FOR THE DEVELOPMENT OF HUMAN RESOURCES IN
incorporated therein. The present Constitution, as earlier opined, has RURAL AREAS (PHILDHRRA); PILIPINA, INC. (ANG KILUSAN NG
broadened the principle of local autonomy. The 14 sections in Article X thereof KABABAIHANG PILIPINO); SENTRO NG ALTERNATIBONG LINGAP
markedly increased the powers of the local governments in order to PANLIGAL (SALIGAN); URBAN LAND REFORM TASK FORCE (ULR-TF);
accomplish the goal of a more meaningful local autonomy. ADELINO C. LAVADOR; PUNONG BARANGAY ISABEL MENDEZ;
PUNONG BARANGAY CAROLINA ROMANOS, petitioners,
Indeed, the value of local governments as institutions of democracy is vs.
measured by the degree of autonomy that they enjoy.48 As eloquently put by HON. RONALDO ZAMORA, in his capacity as Executive Secretary, HON.
BENJAMIN DIOKNO, in his capacity as Secretary, Department of Budget and
M. De Tocqueville, a distinguished French political writer, "[l]ocal assemblies Management, HON. LEONOR MAGTOLIS-BRIONES, in her capacity as
of citizens constitute the strength of free nations. Township meetings are to National Treasurer, and the COMMISSION ON AUDIT, respondents.
liberty what primary schools are to science; they bring it within the people's
reach; they teach men how to use and enjoy it. A nation may establish a DECISION
system of free governments but without the spirit of municipal institutions, it
cannot have the spirit of liberty."49 CARPIO MORALES, J.:

Our national officials should not only comply with the constitutional provisions Pursuant to Section 22, Article VII of the Constitution1 mandating the President
on local autonomy but should also appreciate the spirit and liberty upon which to submit to Congress a budget of expenditures within thirty days before the
these provisions are based.50 opening of every regular session, then President Joseph Ejercito Estrada
submitted the National Expenditures Program for Fiscal Year 2000. In the said
WHEREFORE, the petition is GRANTED. The assailed provisos in the General Program, the President proposed an Internal Revenue Allotment (IRA) in the
Appropriations Acts of 1999, 2000 and 2001, and the assailed OCD amount of 121,778,000,000 following the formula provided for in Section 284
Resolutions, are declared UNCONSTITUTIONAL. of the Local Government Code of 1992, viz:

SO ORDERED. SECTION 284. Allotment of Internal Revenue Taxes. - Local government units
shall have a share in the national internal revenue taxes based on the
9. ACORD v. Zamora collection of the third fiscal year preceding the current fiscal year as follows:

G.R. No. 144256 June 8, 2005 (a) On the first year of the effectivity of this Code, thirty percent (30%);

ALTERNATIVE CENTER FOR ORGANIZATIONAL REFORMS AND (b) On the second year, thirty-five percent (35%); and
DEVELOPMENT, INC. (ACORD), BALAY MINDANAW FOUNDATION, INC.
(BMFI); BARRIOS, INC.; CAMARINES SUR NGO-PO DEVELOPMENT (c) On the third year and thereafter, forty percent (40%).
NETWORK, INC. (CADENET); CENTER FOR PARTICIPATORY
GOVERNANCE (CPAG); ENVIRONMENTAL LEGAL ASSISTANCE x x x (Emphasis supplied)
CENTER, INC. (ELAC); FELLOWSHIP FOR ORGANIZING ENDEAVORS
(FORGE); FOUNDATION FOR LOCAL AUTONOMY AND GOOD On February 16, 2000, the President approved House Bill No. 8374 - a bill
GOVERNNANCE, INC. (FLAGG); INSTITUTE OF POLITICS AND sponsored in the Senate by then Senator John H. Osmea who was the
GOVERNANCE (IPG); KAISAHAN PARA SA KAUNLARAN NG KANAYUNAN Chairman of the Committee on Finance. This bill became Republic Act No.
AT REPORMANG PANSAKAHAN (KAISAHAN); MANGGAGAGAWANG 8760, "AN ACT APPROPRIATING FUNDS FOR THE OPERATION OF THE
KABABAIHANG MITHI AY PAGLAYA (MAKALAYA); NAGA CITY PEOPLE'S GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES FROM
COUNCIL (NCPC); NGO-PO COUNCIL OF CAMARINES SUR FOR JANUARY ONE TO DECEMBER THIRTY-ONE, TWO THOUSAND, AND
COMMUNITY PARTICIPATION AND EMPOWERMENT, INC. (NPCCS); FOR OTHER PURPOSES".
PAILIG DEVELOPMENT FOUNDATION INC. (PDFI); PHILIPPINE
ECUMENICAL ACTION FOR COMMUNITY EMPOWERMENT
The act, otherwise known as the General Appropriations Act (GAA) for the A. PURPOSE(S)
Year 2000, provides under the heading "ALLOCATIONS TO LOCAL
GOVERNMENT UNITS" that the IRA for local government units shall amount xxxx
to 111,778,000,000:1avvphi1.zw+
6. Additional
XXXVII. ALLOCATIONS TO LOCAL Operational
Requirements
GOVERNMENT UNITS and Projects of
A. INTERNAL REVENUE ALLOTMENT Agencies 14,788,764,000
xxxx
For apportionment of the shares of local government units in the internal
revenue taxes in accordance with the purpose indicated hereunder Special Provisions
... 111,778,000,000
1. Release of the Fund. The amounts herein appropriated shall be released
New Appropriations, by Purpose only when the revenue collections exceed the original revenue targets
submitted by the President of the Philippines to Congress pursuant to Section
Current Operating Expenditures 22, Article VII of the Constitution or when the corresponding funding or receipts
for the purpose have been realized except in the special cases covered by
specific procedures in Special Provision Nos. 2, 3, 4, 5, 7, 8, 9, 13 and 14
Maintenance herein: PROVIDED, That in cases of foreign-assisted projects, the existence
and Other Personal of a perfected loan agreement shall be sufficient compliance for the issuance
Services Operating of a Special Allotment Release Order covering the loan proceeds: PROVIDED,
Expenses Capital FURTHER, That no amount of the Unprogrammed Fund shall be funded out
Outlays Total of the savings generated from programmed items in this Act.

A. PURPOSE(S) xxxx
a. Internal Revenue
Allotment 111,778,000,000 111,778,000,000 4. Additional Operational Requirements and Projects of Agencies. The
xxx appropriations for Purpose 6 - Additional Operational Requirements and
TOTAL NEW Projects of Agencies herein indicated shall be released only when the original
APPROPRIATIONS 111,778,000,000 revenue targets submitted by the President of the Philippines to Congress
In another part of the GAA, under the heading "UNPROGRAMMED FUND," it pursuant to Section 22, Article VII of the Constitution can be realized based on
is provided that an amount of 10,000,000,000 (10 Billion), apart from the a quarterly assessment of the Development Budget Coordinating Committee,
111,778,000,000 mentioned above, shall be used to fund the IRA, which the Committee on Finance of the Senate and the Committee on Appropriations
amount shall be released only when the original revenue targets submitted by of the House of Representatives and shall be used to fund the following:
the President to Congress can be realized based on a quarterly assessment
to be conducted by certain committees which the GAA specifies, namely, the xxxx
Development Budget Coordinating Committee, the Committee on Finance of
the Senate, and the Committee on Appropriations of the House of Internal Revenue Allotments
Representatives.
Maintenance and
LIV. UNPROGRAMMED FUND Other Operating
Expenses 10,000,000,000
For fund requirements in accordance with the purposes indicated hereunder total IRA --------------------
48,681,831,000 10,000,000,000
xxxx
3. SECTION 1, XXXVII (A) AND LIV, SPECIAL PROVISIONS 1 AND 4, OF
Total 14,788,764,000 THE YEAR 2000 GAA ARE NULL AND VOID FOR BEING
UNCONSTITUTIONAL AS THE PLACING OF 10 BILLION PESOS OF THE
x x x x (Emphasis supplied) IRA UNDER "UNPROGRAMMED FUNDS" CONSTITUTES AN UNDUE
DELEGATION OF LEGISLATIVE POWER TO THE RESPONDENTS.
Thus, while the GAA appropriates 111,778,000,000 of IRA as Programmed
Fund, it appropriates a separate amount of 10 Billion of IRA under the 4. SECTION 1, XXXVII (A) AND LIV, SPECIAL PROVISIONS 1 AND 4, OF
classification of Unprogrammed Fund, the latter amount to be released only THE YEAR 2000 GAA ARE NULL AND VOID FOR BEING
upon the occurrence of the condition stated in the GAA. UNCONSTITUTIONAL AS THE PLACING OF 10 BILLION PESOS OF THE
IRA UNDER "UNPROGRAMMED FUNDS" CONSTITUTES AN
On August 22, 2000, a number of non-governmental organizations (NGOs) AMENDMENT OF THE LOCAL GOVERNMENT CODE OF 1991, WHICH
and people's organizations, along with three barangay officials filed with this CANNOT BE DONE IN A GENERAL APPROPRIATIONS ACT AND WHICH
Court the petition at bar, for Certiorari, Prohibition and Mandamus With PURPOSE WAS NOT REFLECTED IN THE TITLE OF THE YEAR 2000 GAA.
Application for Temporary Restraining Order, against respondents then
Executive Secretary Ronaldo Zamora, then Secretary of the Department of 5. THE YEAR 2000 GAA'S REDUCTION OF THE IRA UNDERMINES THE
Budget and Management Benjamin Diokno, then National Treasurer Leonor FOUNDATION OF OUR LOCAL GOVERNANCE SYSTEM WHICH IS
Magtolis-Briones, and the Commission on Audit, challenging the ESSENTIAL TO THE EFFICIENT OPERATION OF THE GOVERNMENT
constitutionality of above-quoted provision of XXXVII (ALLOCATIONS TO AND THE DEVELOPMENT OF THE NATION.
LOCAL GOVERNMENT UNITS) referred to by petitioners as Section 1,
XXXVII (A), and LIV (UNPROGRAMMED FUND) Special Provisions 1 and 4 6. THE CONGRESS AND THE EXECUTIVE, IN PASSING AND
of the GAA (the GAA provisions). APPROVING, RESPECTIVELY, THE YEAR 2000 GAA, AND THE
RESPONDENTS, IN IMPLEMENTING THE SAID YEAR 2000 GAA,
Petitioners contend that: INSOFAR AS SECTION 1, XXXVII (A) AND LIV, SPECIAL PROVISIONS 1
AND 4, ARE CONCERNED, ACTED WITH GRAVE ABUSE OF DISCRETION
1. SECTION 1, XXXVII (A) AND LIV, SPECIAL PROVISIONS 1 AND 4, OF AMOUNTING TO LACK OR EXCESS OF JURISDICTION AS THEY
THE YEAR 2000 GAA ARE NULL AND VOID FOR BEING TRANSGRESSED THE CONSTITUTION AND THE LOCAL GOVERNMENT
UNCONSTITUTIONAL AS THEY VIOLATE THE AUTONOMY OF LOCAL CODE'S PROHIBITION ON ANY INVALID REDUCTION AND
GOVERNMENTS BY UNLAWFULLY REDUCING BY TEN BILLION PESOS WITHHOLDING OF THE LOCAL GOVERNMENTS' IRA. (Underscoring
(10 BILLION) THE INTERNAL REVENUE ALLOTMENTS DUE TO THE supplied)
LOCAL GOVERNMENTS AND WITHHOLDING THE RELEASE OF SUCH
AMOUNT BY PLACING THE SAME UNDER "UNPROGRAMMED FUNDS." After the parties had filed their respective memoranda, a "MOTION FOR
THIS VIOLATES THE CONSTITUTIONAL MANDATE IN ART. X, SEC. 6, INTERVENTION/MOTION TO ADMIT ATTACHED PETITION FOR
THAT THE LOCAL GOVERNMENT UNITS' JUST SHARE IN THE NATIONAL INTERVENTION" was filed on October 22, 2001 by the Province of Batangas,
TAXES SHALL BE AUTOMATICALLY RELEASED TO THEM. IT ALSO represented by then Governor Hermilando I. Mandanas.
VIOLATES THE LOCAL GOVERNMENT CODE, SPECIFICALLY, SECS. 18,
284, AND 286. On November 6, 2001, the Province of Nueva Ecija, represented by Governor
Tomas N. Joson III, likewise filed a "MOTION FOR LEAVE OF COURT TO
2. SECTION 1, XXXVII (A) AND LIV, SPECIAL PROVISIONS 1 AND 4, OF INTERVENE AND FILE PETITION-IN-INTERVENTION".
THE YEAR 2000 GAA ARE NULL AND VOID FOR BEING
UNCONSTITUTIONAL AS THEY VIOLATE THE AUTONOMY OF LOCAL The motions for intervention, both of which adopted the arguments of the main
GOVERNMENTS BY PLACING TEN BILLION PESOS (10 BILLION) OF petition,2 were granted by this Court.3
THE INTERNAL REVENUE ALLOTMENTS DUE TO THE LOCAL
GOVERNMENTS, EFFECTIVELY AND PRACTICALLY, WITHIN THE Although the effectivity of the Year 2000 GAA has ceased, this Court shall
CONTROL OF THE CENTRAL AUTHORITIES. nonetheless proceed to resolve the issues raised in the present case, it being
impressed with public interest. The ruling of this Court in the case of The
Province of Batangas v. Romulo,4 wherein GAA provisions relating to the IRA and that [to] the best of my knowledge are true and correct" is insufficient since
were likewise challenged, is in point, to wit: under section 6 of Rule 7, it is required that the person verifying must have
read the pleading and that the allegations thereof are true of his own
Granting arguendo that, as contended by the respondents, the resolution of knowledge. We do not see any reason for rendering the said verification void.
the case had already been overtaken by supervening events as the IRA, The statement "to the best of my knowledge are true and correct" referring to
including the LGSEF, for 1999, 2000 and 2001, had already been released the allegations in the petition does not mean mere "knowledge, information
and the government is now operating under a new appropriations law, still, and belief." It constitutes substantial compliance with the requirement of
there is compelling reason for this Court to resolve the substantive issue raised section 6 of Rule 7, as held in Madrigal vs. Rodas (80 Phil. 252.). At any rate,
by the instant petition. Supervening events, whether intended or accidental, this petty technicality deserves scant consideration where the question at issue
cannot prevent the Court from rendering a decision if there is a grave violation is one purely of law and there is no need of delving into the veracity of the
of the Constitution. Even in cases where supervening events had made the allegations in the petition, which are not disputed at all by respondents. As we
cases moot, the Court did not hesitate to resolve the legal or constitutional have held time and again, imperfections of form and technicalities of procedure
issues raised to formulate controlling principles to guide the bench, bar and are to be disregarded except where substantial rights would otherwise be
public. prejudiced. (Emphasis and underscoring supplied)

Another reason justifying the resolution by this Court of the substantive issue Respondents go on to claim that the same verifications were signed by
now before it is the rule that courts will decide a question otherwise moot and persons who were not authorized by the incorporated cause-oriented groups
academic if it is "capable of repetition, yet evading review." For the GAAs in which they claim to represent, hence, the Petition should be treated as an
the coming years may contain provisos similar to those now being sought to unsigned pleading.
be invalidated, and yet, the question may not be decided before another GAA
is enacted. It, thus, behooves this Court to make a categorical ruling on the Indeed, only duly authorized natural persons may execute verifications in
substantive issue now.5 behalf of juridical entities such as petitioners NGOs and people's
organizations. As this Court held in Santos v. CA, "In fact, physical actions,
Passing on the arguments of all parties, bearing in mind the dictum that "the e.g., signing and delivery of documents, may be performed on behalf of the
court should not form a rule of constitutional law broader than is required by corporate entity only by specifically authorized individuals."9
the precise facts to which it is applied,"6 this Court finds that only the following
issues need to be resolved in the present petition: (1) whether the petition Nonetheless, the present petition cannot be treated as an unsigned pleading.
contains proper verifications and certifications against forum-shopping, (2) For even if the rule that representatives of corporate entities must present the
whether petitioners have the requisite standing to file this suit, and (3) whether requisite authorization were to be strictly applied, there would remain among
the questioned provisions violate the constitutional injunction that the just the multi-group-petitioners the individuals who validly executed verifications in
share of local governments in the national taxes or the IRA shall be their own names, namely, petitioners Adelino C. Lavador, Punong Barangay
automatically released. Isabel Mendez, and Punong Barangay Carolina Romanos.

Sufficiency of Verification and Certification Against Forum-Shopping At all events, in light of the following ruling of this Court in Shipside Inc. v.
CA:10
Respondents assail as improperly executed petitioners' verifications and
certifications against forum-shopping as they merely state that the allegations . . . in Loyola, Roadway, and Uy, the Court excused non-compliance with the
of the Petition are "true of our knowledge and belief" instead of "true and requirement as to the certificate of non-forum shopping. With more reason
correct of our personal knowledge or based on authentic records" as required should we allow the instant petition since petitioner herein did submit a
under Rule 7, Section 4 of the Rules of Court.7 certification on non-forum shopping, failing only to show proof that the
signatory was authorized to do so. That petitioner subsequently submitted a
Jurisprudence is on petitioners' side. In Decano v. Edu,8 this Court held: secretary's certificate attesting that Balbin was authorized to file an action on
behalf of petitioner likewise mitigates this oversight.
Respondents finally raise a technical point referring to the allegedly defective
verification of the petition filed in the trial court, contending that the clause in It must also be kept in mind that while the requirement of the certificate of non-
the verification statement "that I have read the contents of the said petition; forum shopping is mandatory, nonetheless the requirements must not be
interpreted too literally and thus defeat the objective of preventing the Article X, Section 6 of the Constitution provides:
undesirable practice of forum-shopping (Bernardo v. NLRC, 255 SCRA 108
[1996]). Lastly, technical rules of procedure should be used to promote, not SECTION 6. Local government units shall have a just share, as determined by
frustrate justice. While the swift unclogging of court dockets is a laudable law, in the national taxes which shall be automatically released to them.
objective, the granting of substantial justice is an even more urgent ideal.
(Underscoring supplied), Petitioners argue that the GAA violated this constitutional mandate when it
made the release of IRA contingent on whether revenue collections could meet
a too literal interpretation must be avoided if it defeats the objective of the revenue targets originally submitted by the President, rather than making
preventing the practice of forum shopping. the release automatic.

Standing Respondents counterargue that the above constitutional provision is


addressed not to the legislature but to the executive, hence, the same does
Respondents assail petitioners' standing in this controversy, proffering that it not prevent the legislature from imposing conditions upon the release of the
is the local government units - each having a separate juridical entity - which IRA. They cite the exchange between Commissioner (now Chief Justice)
stand to be injured. Davide and Commissioner Nolledo in the deliberations of the Constitutional
Commission on the above-quoted Sec. 6, Art. X of the Constitution, to wit:
The subsequent intervention of the provinces of Batangas and Nueva Ecija
which have adopted the arguments of petitioners has, however, made the THE PRESIDENT. How about the second sentence?
question of standing academic.11
MR. DAVIDE. The second sentence would be a new section that would be
Respondents, contending that petitioners have no cause of action against Section 13. As modified it will read as follows: "LOCAL GOVERNMENT UNITS
them as they claim to have no responsibility with respect to the mandate of the SHALL HAVE A JUST SHARE, AS DETERMINED BY LAW, in the national
GAA provisions, proffer that the committees mentioned in the GAA provisions, taxes WHICH SHALL BE automatically PERIODICALLY released to them."
namely, the Development Budget Coordinating Committee, Committee on
Finance of the Senate, and Committee on Appropriations of the House of MR. NOLLEDO. That will be Section 12, subsection (1) in the amendment.
Representatives, should instead have been impleaded.
MR. DAVIDE. No, we will just delete that because the second would be another
Respondents' position does not lie. section so Section 12 would only be this: "LOCAL GOVERNMENT UNITS
SHALL HAVE A JUST SHARE, AS DETERMINED BY LAW, in the national
The GAA provisions being challenged were not to be implemented solely by taxes WHICH SHALL BE automatically PERIODICALLY released to them."
the committees specifically mentioned therein, for they being in the nature of
appropriations provisions, they were also to be implemented by the executive MR. NOLLEDO. But the word "PERIODICALLY" may mean possibly
branch, particularly the Department of Budget and Management (DBM) and withholding the automatic release to them by adopting certain periods of
the National Treasurer. The task of the committees related merely to the automatic release. If we use the word "automatically" without
conduct of the quarterly assessment required in the provisions, and not in the "PERIODICALLY," the latter may be already contemplated by "automatically."
actual release of the IRA which is the duty of the executive. Since the present So, the Committee objects to the word "PERIODICALLY."
controversy centers on the proper manner of releasing the IRA, the impleaded
respondents are the proper parties to this suit. MR. DAVIDE. If we do not say PERIODICALLY, it might be very, very difficult
to comply with it because these are taxes collected and actually released by
In fact in earlier petitions likewise involving the constitutionality of provisions of the national government every quarter. It is not that upon collection a portion
previous general appropriations acts which this Court granted, the therein should immediately be released. It is quarterly. Otherwise, the national
respondent officials were the same as those in the present case, e.g., government will have to remit everyday and that would be very expensive.
Guingona v. Carague12 and PHILCONSA v. Enriquez.13
MR. NOLLEDO. That is not hindered by the word "automatically." But if we put
Constitutionality of the GAA Provisions "automatically" and "PERIODICALLY" at the same time, that means certain
periods have to be observed as will be set forth by the Budget Officer thereby virtually to make the Constitution amendable by statute - a proposition which
negating the meaning of "automatically." is patently absurd.

MR. DAVIDE. On the other hand, if we do not state PERIODICALLY, it may Moreover, there is merit in the argument of the intervenor Province of
be done every semester; it may be done at the end of the year. It is still Batangas that, if indeed the framers intended to allow the enactment of
automatic release. statutes making the release of IRA conditional instead of automatic, then
Article X, Section 6 of the Constitution would have been worded differently.
MR. NOLLEDO. As far as the Committee is concerned, we vigorously object Instead of reading "Local government units shall have a just share, as
to the word "PERIODICALLY." determined by law, in the national taxes which shall be automatically released
to them" (italics supplied), it would have read as follows, so the Province of
MR. DAVIDE. Only the word PERIODICALLY? Batangas posits:

MR. NOLLEDO. If the Commissioner is amenable to deleting that, we will "Local government units shall have a just share, as determined by law, in the
accept the amendment. national taxes which shall be [automatically] released to them as provided by
law," or,
MR. DAVIDE. I will agree to the deletion of the word PERIODICALLY.
"Local government units shall have a just share in the national taxes which
MR. NOLLEDO. Thank you. shall be [automatically] released to them as provided by law," or

The Committee accepts the amendment. (Emphasis supplied)14 "Local government units shall have a just share, as determined by law, in the
national taxes which shall be automatically released to them subject to
In the above exchange of statements, it is clear that although Commissioners exceptions Congress may provide."16 (Italics supplied)
Davide and Nolledo held different views with regard to the proper wording of
the constitutional provision, they shared a common assumption that the entity Since, under Article X, Section 6 of the Constitution, only the just share of local
which would execute the automatic release of internal revenue was the governments is qualified by the words "as determined by law," and not the
executive department. release thereof, the plain implication is that Congress is not authorized by the
Constitution to hinder or impede the automatic release of the IRA.
Commissioner Davide referred to the national government as the entity that
collects and remits internal revenue. Similarly, Commissioner Nolledo alluded Indeed, that Article X, Section 6 of the Constitution did bind the legislative just
to the Budget Officer, who is clearly under the executive branch. as much as the executive branch was presumed in the ruling of this Court in
the case of The Province of Batangas v. Romulo17 which is analogous in many
Respondents thus infer that the subject constitutional provision merely respects to the one at bar.
prevents the executive branch of the government from "unilaterally"
withholding the IRA, but not the legislature from authorizing the executive In Batangas, the petitioner therein challenged the constitutionality of certain
branch to withhold the same. In the words of respondents, "This essentially provisos of the GAAs for FY 1999, 2000, and 2001 which set up the Local
means that the President or any member of the Executive Department cannot Government Service Equalization Fund (LGSEF). The LGSEF was a portion
unilaterally, i.e., without the backing of statute, withhold the release of the of the IRA which was to be released only upon a finding of the Oversight
IRA."15 Committee on Devolution that the LGU concerned had complied with the
guidelines issued by said committee. This Court measured the challenged
Respondents' position does not lie. legislative acts against Article X, Section 6 and declared them unconstitutional
- a ruling which presupposes that the legislature, like the executive, is
As the Constitution lays upon the executive the duty to automatically release mandated by said constitutional provision to ensure that the just share of local
the just share of local governments in the national taxes, so it enjoins the governments in the national taxes are automatically released.
legislature not to pass laws that might prevent the executive from performing
this duty. To hold that the executive branch may disregard constitutional Respondents, in further support of their claim that the automatic release
provisions which define its duties, provided it has the backing of statute, is requirement in the Constitution constrains only the executive branch and not
the legislature, cite three statutory provisions whereby the legislature "automatic," thus, connotes something mechanical, spontaneous and
authorized the executive branch to withhold the IRA in certain circumstances, perfunctory. x x x" (Emphasis and underscoring supplied)24
namely, Section 70 of the Philippine National Police Reform and
Reorganization Act of 1998,18 Section 531(e) of the Local Government Further on, the Court held:
Code,19 and Section 10 of Republic Act 7924 (1995).20 Towards the same
end, respondents also cite Rule XXXII, Article 383(c) of the Rules and To the Court's mind, the entire process involving the distribution and release
Regulations Implementing the Local Government Code.21 of the LGSEF is constitutionally impermissible. The LGSEF is part of the IRA
or "just share" of the LGUs in the national taxes. To subject its distribution and
While statutes and implementing rules are entitled to great weight in release to the vagaries of the implementing rules and regulations, including
constitutional construction as indicators of contemporaneous interpretation, the guidelines and mechanisms unilaterally prescribed by the Oversight
such interpretation is not necessarily binding or conclusive on the courts. In Committee from time to time, as sanctioned by the assailed provisos in the
Taada v. Cuenco, the Court held: GAAs of 1999, 2000 and 2001 and the OCD resolutions, makes the release
not automatic, a flagrant violation of the constitutional and statutory mandate
As a consequence, "where the meaning of a constitutional provision is clear, that the "just share" of the LGUs "shall be automatically released to them." The
a contemporaneous or practical . . . executive interpretation thereof is entitled LGUs are, thus, placed at the mercy of the Oversight Committee.
to no weight and will not be allowed to distort or in any way change its natural
meaning." The reason is that "the application of the doctrine of Where the law, the Constitution in this case, is clear and unambiguous, it must
contemporaneous construction is more restricted as applied to the be taken to mean exactly what it says, and courts have no choice but to see
interpretation of constitutional provisions than when applied to statutory to it that the mandate is obeyed. Moreover, as correctly posited by the
provisions," and that "except as to matters committed by the constitution itself petitioner, the use of the word "shall" connotes a mandatory order. Its use in a
to the discretion of some other department, contemporaneous or practical statute denotes an imperative obligation and is inconsistent with the idea of
construction is not necessarily binding upon the courts, even in a doubtful discretion. x x x (Emphasis and underscoring supplied)25
case." Hence, "if in the judgment of the court, such construction is erroneous
and its further application is not made imperative by any paramount While "automatic release" implies that the just share of the local governments
considerations of public policy, it may be rejected." (Emphasis and determined by law should be released to them as a matter of course, the GAA
underscoring supplied, citations omitted)22 provisions, on the other hand, withhold its release pending an event which is
not even certain of occurring. To rule that the term "automatic release"
The validity of the legislative acts assailed in the present case should, contemplates such conditional release would be to strip the term "automatic"
therefore, be assessed in light of Article X, Section 6 of the Constitution. of all meaning.

Again, in Batangas,23 this Court interpreted the subject constitutional Additionally, to interpret the term automatic release in such a broad manner
provision as follows: would be inconsistent with the ruling in Pimentel v. Aguirre.26 In the said case,
the executive withheld the release of the IRA pending an assessment very
When parsed, it would be readily seen that this provision mandates that (1) the similar to the one provided in the GAA. This Court ruled that such withholding
LGUs shall have a "just share" in the national taxes; (2) the "just share" shall contravened the constitutional mandate of an automatic release, viz:
be determined by law; and (3) the "just share" shall be automatically released
to the LGUs. Section 4 of AO 372 cannot, however, be upheld. A basic feature of local fiscal
autonomy is the automatic release of the shares of LGUs in the national
xxx internal revenue. This is mandated by no less than the Constitution. The Local
Government Code specifies further that the release shall be made directly to
Webster's Third New International Dictionary defines "automatic" as the LGU concerned within five (5) days after every quarter of the year and
"involuntary either wholly or to a major extent so that any activity of the will is "shall not be subject to any lien or holdback that may be imposed by the
largely negligible; of a reflex nature; without volition; mechanical; like or national government for whatever purpose." As a rule, the term "shall" is a
suggestive of an automaton." Further, the word "automatically" is defined as word of command that must be given a compulsory meaning. The provision is,
"in an automatic manner: without thought or conscious intention." Being therefore, imperative.
Section 4 of AO 372, however, orders the withholding, effective January 1, however, must be echoed: "[T]he rule of law requires that even the best
1998, of 10 percent of the LGUs' IRA "pending the assessment and evaluation intentions must be carried out within the parameters of the Constitution and
by the Development Budget Coordinating Committee of the emerging fiscal the law. Verily, laudable purposes must be carried out by legal methods."30
situation" in the country. Such withholding clearly contravenes the Constitution
and the law. x x x27 (Italics in the original; underscoring supplied) WHEREFORE, the petition is GRANTED. XXXVII and LIV Special Provisions
1 and 4 of the Year 2000 GAA are hereby declared unconstitutional insofar as
There is no substantial difference between the withholding of IRA involved in they set apart a portion of the IRA, in the amount of 10 Billion, as part of the
Pimentel and that in the present case, except that here it is the legislature, not UNPROGRAMMED FUND.
the executive, which has authorized the withholding of the IRA. The distinction
notwithstanding, the ruling in Pimentel remains applicable. As explained SO ORDERED.
above, Article X, Section 6 of the Constitution - the same provision relied upon
in Pimentel - enjoins both the legislative and executive branches of 10. Kida v. Senate (28 Feb 2012 resolution)
government. Hence, as in Pimentel, under the same constitutional provision,
the legislative is barred from withholding the release of the IRA. DATU MICHAEL ABAS KIDA,
in his personal capacity, and in representation of MAGUINDANAO
It bears stressing, however, that in light of the proviso in Section 284 of the FEDERATION OF AUTONOMOUS IRRIGATORS ASSOCIATION, INC.,
Local Government Code which reads: HADJI MUHMINA J. USMAN, JOHN ANTHONY L. LIM, JAMILON T. ODIN,
ASRIN TIMBOL JAIYARI, MUJIB M. KALANG, ALIH AL-SAIDI J. SAPI-E,
Provided, That in the event that the national government incurs an KESSAR DAMSIE ABDIL, and BASSAM ALUH SAUPI,
unmanageable public sector deficit, the President of the Philippines is hereby Petitioners,
authorized, upon the recommendation of Secretary of Finance, Secretary of
Interior and Local Government and Secretary of Budget and Management, and
subject to consultation with the presiding officers of both Houses of Congress - versus -
and the presidents of the "liga," to make the necessary adjustments in the
internal revenue allotment of local government units but in no case shall the
allotment be less than thirty percent (30%) of the collection of national internal SENATE OF THE PHILIPPINES, represented by its President JUAN PONCE
revenue taxes of the third fiscal year preceding the current fiscal year: ENRILE, HOUSE OF REPRESENTATIVES, thru SPEAKER FELICIANO
Provided, further, That in the first year of the effectivity of this Code, the local BELMONTE, COMMISSION ON ELECTIONS, thru its Chairman, SIXTO
government units shall, in addition to the thirty percent (30%) internal revenue BRILLANTES, JR., PAQUITO OCHOA, JR., Office of the President Executive
allotment which shall include the cost of devolved functions for essential public Secretary, FLORENCIO ABAD, JR., Secretary of Budget, and ROBERTO
services, be entitled to receive the amount equivalent to the cost of devolved TAN, Treasurer of the Philippines,
personal services. (Underscoring supplied), Respondents.
x----------------------------------------------x
the only possible exception to mandatory automatic release of the IRA is, as BASARI D. MAPUPUNO,
held in Batangas: Petitioner,

if the national internal revenue collections for the current fiscal year is less
than 40 percent of the collections of the preceding third fiscal year, in which - versus -
case what should be automatically released shall be a proportionate amount
of the collections for the current fiscal year. The adjustment may even be made
on a quarterly basis depending on the actual collections of national internal SIXTO BRILLANTES, in his capacity as Chairman of the Commission on
revenue taxes for the quarter of the current fiscal year. x x x28 Elections, FLORENCIO ABAD, JR. in his capacity as Secretary of the
Department of Budget and Management, PACQUITO OCHOA, JR., in his
A final word. This Court recognizes that the passage of the GAA provisions by capacity as Executive Secretary, JUAN PONCE ENRILE, in his capacity as
Congress was motivated by the laudable intent to "lower the budget deficit in Senate President, and FELICIANO BELMONTE, in his capacity as Speaker of
line with prudent fiscal management."29 The pronouncement in Pimentel, the House of Representatives,
Respondents.
x----------------------------------------------x
- versus -
REP. EDCEL C. LAGMAN,
Petitioner,
THE COMMISSION ON ELECTIONS and EXECUTIVE SECRETARY
PAQUITO N. OCHOA, JR.,
- versus - Respondents.
x----------------------------------------------x

PAQUITO N. OCHOA, JR., in his capacity as the Executive Secretary, and the JACINTO V. PARAS,
COMMISSION ON ELECTIONS, Petitioner,
Respondents.
x----------------------------------------------x - versus -

ALMARIM CENTI TILLAH, DATU


CASAN CONDING CANA, and PARTIDO DEMOKRATIKO PILIPINO LAKAS EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR., and the
NG BAYAN (PDP-LABAN), COMMISSION ON ELECTIONS,
Petitioners, Respondents.
x--------------------------------------------x

- versus - MINORITY RIGHTS FORUM, PHILIPPINES, INC.,


Respondents-Intervenor.

THE COMMISSION ON ELECTIONS, through its Chairman, SIXTO G.R. No. 196271
BRILLANTES, JR., HON. PAQUITO N. OCHOA, JR., in his capacity as
Executive Secretary, HON. FLORENCIO B. ABAD, JR., in his capacity as Present:
Secretary of the Department of Budget and Management, and HON.
ROBERTO B. TAN, in his capacity as Treasurer of the Philippines, CORONA, C.J.,
Respondents. CARPIO,
x----------------------------------------------x VELASCO, JR.,
LEONARDO-DE CASTRO,
ATTY. ROMULO B. MACALINTAL, BRION,
Petitioner, PERALTA,
BERSAMIN,
DEL CASTILLO,
- versus - ABAD,
VILLARAMA, JR.,
PEREZ,
COMMISSION ON ELECTIONS and THE OFFICE OF THE PRESIDENT, MENDOZA,
through EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR., SERENO,
Respondents. REYES, and
x----------------------------------------------x PERLAS-BERNABE, JJ.

LUIS BAROK BIRAOGO, Promulgated:


Petitioner,
October 18, 2011
G.R. No. 196305 Section 18 of the Article, on the other hand, directed Congress to enact an
G.R. No. 197221 organic act for these autonomous regions to concretely carry into effect the
G.R. No. 197280 granted autonomy.
G.R. No. 197282
G.R. No. 197392 Section 18. The Congress shall enact an organic act for each autonomous
G.R. No. 197454 region with the assistance and participation of the regional consultative
commission composed of representatives appointed by the President from a
list of nominees from multisectoral bodies. The organic act shall define the
basic structure of government for the region consisting of the executive
x------------------------------------------------------------------------------------x department and legislative assembly, both of which shall be elective and
representative of the constituent political units. The organic acts shall likewise
provide for special courts with personal, family and property law jurisdiction
DECISION consistent with the provisions of this Constitution and national laws.
BRION, J.:
The creation of the autonomous region shall be effective when approved by a
majority of the votes cast by the constituent units in a plebiscite called for the
On June 30, 2011, Republic Act (RA) No. 10153, entitled An Act Providing for purpose, provided that only provinces, cities, and geographic areas voting
the Synchronization of the Elections in the Autonomous Region in Muslim favorably in such plebiscite shall be included in the autonomous region.
Mindanao (ARMM) with the National and Local Elections and for Other
Purposes was enacted. The law reset the ARMM elections from the 8th of On August 1, 1989 or two years after the effectivity of the 1987 Constitution,
August 2011, to the second Monday of May 2013 and every three (3) years Congress acted through Republic Act (RA) No. 6734 entitled An Act Providing
thereafter, to coincide with the countrys regular national and local elections. for an Organic Act for the Autonomous Region in Muslim Mindanao. A
The law as well granted the President the power to appoint officers-in-charge plebiscite was held on November 6, 1990 as required by Section 18(2), Article
(OICs) for the Office of the Regional Governor, the Regional Vice-Governor, X of RA No. 6734, thus fully establishing the Autonomous Region of Muslim
and the Members of the Regional Legislative Assembly, who shall perform the Mindanao (ARMM). The initially assenting provinces were Lanao del Sur,
functions pertaining to the said offices until the officials duly elected in the May Maguindanao, Sulu and Tawi-tawi. RA No. 6734 scheduled the first regular
2013 elections shall have qualified and assumed office. elections for the regional officials of the ARMM on a date not earlier than 60
days nor later than 90 days after its ratification.
Even before its formal passage, the bills that became RA No. 10153 already
spawned petitions against their validity; House Bill No. 4146 and Senate Bill RA No. 9054 (entitled An Act to Strengthen and Expand the Organic Act for
No. 2756 were challenged in petitions filed with this Court. These petitions the Autonomous Region in Muslim Mindanao, Amending for the Purpose
multiplied after RA No. 10153 was passed. Republic Act No. 6734, entitled An Act Providing for the Autonomous Region
in Muslim Mindanao, as Amended) was the next legislative act passed. This
Factual Antecedents law provided further refinement in the basic ARMM structure first defined in the
original organic act, and reset the regular elections for the ARMM regional
The State, through Sections 15 to 22, Article X of the 1987 Constitution, officials to the second Monday of September 2001.
mandated the creation of autonomous regions in Muslim Mindanao and the
Cordilleras. Section 15 states: Congress passed the next law affecting ARMM RA No. 9140[1] - on June 22,
2001. This law reset the first regular elections originally scheduled under RA
Section 15. There shall be created autonomous regions in Muslim Mindanao No. 9054, to November 26, 2001. It likewise set the plebiscite to ratify RA No.
and in the Cordilleras consisting of provinces, cities, municipalities, and 9054 to not later than August 15, 2001.
geographical areas sharing common and distinctive historical and cultural
heritage, economic and social structures, and other relevant characteristics RA No. 9054 was ratified in a plebiscite held on August 14, 2001. The province
within the framework of this Constitution and the national sovereignty as well of Basilan and Marawi City voted to join ARMM on the same date.
as territorial integrity of the Republic of the Philippines.
RA No. 9333[2] was subsequently passed by Congress to reset the ARMM d) Petition for Certiorari and Mandamus[8] filed by Jacinto Paras as a
regional elections to the 2nd Monday of August 2005, and on the same date member of the House of Representatives against Executive Secretary Paquito
every 3 years thereafter. Unlike RA No. 6734 and RA No. 9054, RA No. 9333 Ochoa, Jr. and the COMELEC, docketed as G.R. No. 197454.
was not ratified in a plebiscite.
Petitioners Alamarim Centi Tillah and Datu Casan Conding Cana as registered
Pursuant to RA No. 9333, the next ARMM regional elections should have been voters from the ARMM, with the Partido Demokratiko Pilipino Lakas ng Bayan
held on August 8, 2011. COMELEC had begun preparations for these (a political party with candidates in the ARMM regional elections scheduled for
elections and had accepted certificates of candidacies for the various regional August 8, 2011), also filed a Petition for Prohibition and Mandamus[9] against
offices to be elected. But on June 30, 2011, RA No. 10153 was enacted, the COMELEC, docketed as G.R. No. 197280, to assail the constitutionality of
resetting the ARMM elections to May 2013, to coincide with the regular RA No. 9140, RA No. 9333 and RA No. 10153.
national and local elections of the country.
Subsequently, Anak Mindanao Party-List, Minority Rights Forum Philippines,
RA No. 10153 originated in the House of Representatives as House Bill (HB) Inc. and Bangsamoro Solidarity Movement filed their own Motion for Leave to
No. 4146, seeking the postponement of the ARMM elections scheduled on Admit their Motion for Intervention and Comment-in-Intervention dated July 18,
August 8, 2011. On March 22, 2011, the House of Representatives passed HB 2011. On July 26, 2011, the Court granted the motion. In the same Resolution,
No. 4146, with one hundred ninety one (191) Members voting in its favor. the Court ordered the consolidation of all the petitions relating to the
constitutionality of HB No. 4146, SB No. 2756, RA No. 9333, and RA No.
After the Senate received HB No. 4146, it adopted its own version, Senate Bill 10153.
No. 2756 (SB No. 2756), on June 6, 2011. Thirteen (13) Senators voted
favorably for its passage. On June 7, 2011, the House of Representative Oral arguments were held on August 9, 2011 and August 16, 2011. Thereafter,
concurred with the Senate amendments, and on June 30, 2011, the President the parties were instructed to submit their respective memoranda within twenty
signed RA No. 10153 into law. (20) days.

As mentioned, the early challenge to RA No. 10153 came through a petition On September 13, 2011, the Court issued a temporary restraining order
filed with this Court G.R. No. 196271[3] - assailing the constitutionality of both enjoining the implementation of RA No. 10153 and ordering the incumbent
HB No. 4146 and SB No. 2756, and challenging the validity of RA No. 9333 as elective officials of ARMM to continue to perform their functions should these
well for non-compliance with the constitutional plebiscite requirement. cases not be decided by the end of their term on September 30, 2011.
Thereafter, petitioner Basari Mapupuno in G.R. No. 196305 filed another
petition[4] also assailing the validity of RA No. 9333. The Arguments

With the enactment into law of RA No. 10153, the COMELEC stopped its The petitioners assailing RA No. 9140, RA No. 9333 and RA No. 10153 assert
preparations for the ARMM elections. The law gave rise as well to the filing of that these laws amend RA No. 9054 and thus, have to comply with the
the following petitions against its constitutionality: supermajority vote and plebiscite requirements prescribed under Sections 1
and 3, Article XVII of RA No. 9094 in order to become effective.
a) Petition for Certiorari and Prohibition[5] filed by Rep. Edcel Lagman as a
member of the House of Representatives against Paquito Ochoa, Jr. (in his The petitions assailing RA No. 10153 further maintain that it is unconstitutional
capacity as the Executive Secretary) and the COMELEC, docketed as G.R. for its failure to comply with the three-reading requirement of Section 26(2),
No. 197221; Article VI of the Constitution. Also cited as grounds are the alleged violations
of the right of suffrage of the people of ARMM, as well as the failure to adhere
b) Petition for Mandamus and Prohibition[6] filed by Atty. Romulo Macalintal to the elective and representative character of the executive and legislative
as a taxpayer against the COMELEC, docketed as G.R. No. 197282; departments of the ARMM. Lastly, the petitioners challenged the grant to the
President of the power to appoint OICs to undertake the functions of the
c) Petition for Certiorari and Mandamus, Injunction and Preliminary elective ARMM officials until the officials elected under the May 2013 regular
Injunction[7] filed by Louis Barok Biraogo against the COMELEC and elections shall have assumed office. Corrolarily, they also argue that the power
Executive Secretary Paquito N. Ochoa, Jr., docketed as G.R. No. 197392; and of appointment also gave the President the power of control over the ARMM,
in complete violation of Section 16, Article X of the Constitution.
The Issues I. Synchronization as a recognized constitutional mandate

The respondent Office of the Solicitor General (OSG) argues that the
From the parties submissions, the following issues were recognized and Constitution mandates synchronization, and in support of this position, cites
argued by the parties in the oral arguments of August 9 and 16, 2011: Sections 1, 2 and 5, Article XVIII (Transitory Provisions) of the 1987
Constitution, which provides:
I. Whether the 1987 Constitution mandates the synchronization of elections
Section 1. The first elections of Members of the Congress under this
II. Whether the passage of RA No. 10153 violates Section 26(2), Article VI Constitution shall be held on the second Monday of May, 1987.
of the 1987 Constitution The first local elections shall be held on a date to be determined by the
President, which may be simultaneous with the election of the Members of the
III. Whether the passage of RA No. 10153 requires a supermajority vote and Congress. It shall include the election of all Members of the city or municipal
plebiscite councils in the Metropolitan Manila area.
Section 2. The Senators, Members of the House of Representatives and the
A. Does the postponement of the ARMM regular elections constitute an local officials first elected under this Constitution shall serve until noon of June
amendment to Section 7, Article XVIII of RA No. 9054? 30, 1992.
Of the Senators elected in the election in 1992, the first twelve obtaining the
B. Does the requirement of a supermajority vote for amendments or revisions highest number of votes shall serve for six year and the remaining twelve for
to RA No. 9054 violate Section 1 and Section 16(2), Article VI of the 1987 three years.
Constitution and the corollary doctrine on irrepealable laws? xxx
Section 5. The six-year term of the incumbent President and Vice President
C. Does the requirement of a plebiscite apply only in the creation of elected in the February 7, 1986 election is, for purposes of synchronization of
autonomous regions under paragraph 2, Section 18, Article X of the 1987 elections, hereby extended to noon of June 30, 1992.
Constitution? The first regular elections for President and Vice-President under this
Constitution shall be held on the second Monday of May, 1992.
IV. Whether RA No. 10153 violates the autonomy granted to the ARMM We agree with this position.

V. Whether the grant of the power to appoint OICs violates: While the Constitution does not expressly state that Congress has to
synchronize national and local elections, the clear intent towards this objective
A. Section 15, Article X of the 1987 Constitution can be gleaned from the Transitory Provisions (Article XVIII) of the
Constitution,[10] which show the extent to which the Constitutional
B. Section 16, Article X of the 1987 Constitution Commission, by deliberately making adjustments to the terms of the incumbent
officials, sought to attain synchronization of elections.[11]
C. Section 18, Article X of the 1987 Constitution
The objective behind setting a common termination date for all elective
VI. Whether the proposal to hold special elections is constitutional and officials, done among others through the shortening the terms of the twelve
legal. winning senators with the least number of votes, is to synchronize the holding
of all future elections whether national or local to once every three years.[12]
We shall discuss these issues in the order they are presented above. This intention finds full support in the discussions during the Constitutional
Commission deliberations.[13]
These Constitutional Commission exchanges, read with the provisions of the
OUR RULING Transitory Provisions of the Constitution, all serve as patent indicators of the
constitutional mandate to hold synchronized national and local elections,
We resolve to DISMISS the petitions and thereby UPHOLD the starting the second Monday of May, 1992 and for all the following elections.
constitutionality of RA No. 10153 in toto.
This Court was not left behind in recognizing the synchronization of the government is also reflected in Section 1, Article X of the Constitution, which
national and local elections as a constitutional mandate. In Osmea v. provides:
Commission on Elections,[14] we explained:
Section 1. The territorial and political subdivisions of the Republic of the
It is clear from the aforequoted provisions of the 1987 Constitution that the Philippines are the provinces, cities, municipalities, and barangays. There shall
terms of office of Senators, Members of the House of Representatives, the be autonomous regions in Muslim Mindanao, and the Cordilleras as
local officials, the President and the Vice-President have been synchronized hereinafter provided.
to end on the same hour, date and year noon of June 30, 1992.
It is likewise evident from the wording of the above-mentioned Sections that
the term of synchronization is used synonymously as the phrase holding Thus, we find the contention that the synchronization mandated by the
simultaneously since this is the precise intent in terminating their Office Tenure Constitution does not include the regional elections of the ARMM
on the same day or occasion. This common termination date will synchronize unmeritorious. We shall refer to synchronization in the course of our
future elections to once every three years (Bernas, the Constitution of the discussions below, as this concept permeates the consideration of the various
Republic of the Philippines, Vol. II, p. 605). issues posed in this case and must be recalled time and again for its complete
That the election for Senators, Members of the House of Representatives and resolution.
the local officials (under Sec. 2, Art. XVIII) will have to be synchronized with
the election for President and Vice President (under Sec. 5, Art. XVIII) is
likewise evident from the x x x records of the proceedings in the Constitutional II. The Presidents Certification on the Urgency of RA No. 10153
Commission. [Emphasis supplied.]
The petitioners in G.R. No. 197280 also challenge the validity of RA No. 10153
Although called regional elections, the ARMM elections should be included for its alleged failure to comply with Section 26(2), Article VI of the
among the elections to be synchronized as it is a local election based on the Constitution[18] which provides that before bills passed by either the House or
wording and structure of the Constitution. the Senate can become laws, they must pass through three readings on
separate days. The exception is when the President certifies to the necessity
A basic rule in constitutional construction is that the words used should be of the bills immediate enactment.
understood in the sense that they have in common use and given their ordinary
meaning, except when technical terms are employed, in which case the The Court, in Tolentino v. Secretary of Finance,[19] explained the effect of the
significance thus attached to them prevails.[15] As this Court explained in Presidents certification of necessity in the following manner:
People v. Derilo,[16] [a]s the Constitution is not primarily a lawyers document,
its language should be understood in the sense that it may have in common. The presidential certification dispensed with the requirement not only of
Its words should be given their ordinary meaning except where technical terms printing but also that of reading the bill on separate days. The phrase "except
are employed. when the President certifies to the necessity of its immediate enactment, etc."
in Art. VI, Section 26[2] qualifies the two stated conditions before a bill can
Understood in its ordinary sense, the word local refers to something that become a law: [i] the bill has passed three readings on separate days and [ii]
primarily serves the needs of a particular limited district, often a community or it has been printed in its final form and distributed three days before it is finally
minor political subdivision.[17] Regional elections in the ARMM for the approved.
positions of governor, vice-governor and regional assembly representatives
obviously fall within this classification, since they pertain to the elected officials xxx
who will serve within the limited region of ARMM. That upon the certification of a bill by the President, the requirement of three
readings on separate days and of printing and distribution can be dispensed
From the perspective of the Constitution, autonomous regions are considered with is supported by the weight of legislative practice. For example, the bill
one of the forms of local governments, as evident from Article X of the defining the certiorari jurisdiction of this Court which, in consolidation with the
Constitution entitled Local Government. Autonomous regions are established Senate version, became Republic Act No. 5440, was passed on second and
and discussed under Sections 15 to 21 of this Article the article wholly devoted third readings in the House of Representatives on the same day [May 14, 1968]
to Local Government. That an autonomous region is considered a form of local after the bill had been certified by the President as urgent.
In the present case, the records show that the President wrote to the Speaker opportunities to present their views. In this light, no reason exists to nullify RA
of the House of Representatives to certify the necessity of the immediate No. 10153 on the cited ground.
enactment of a law synchronizing the ARMM elections with the national and
local elections.[20] Following our Tolentino ruling, the Presidents certification III. A. RA No. 9333 and RA No. 10153 are not amendments to RA No. 9054
exempted both the House and the Senate from having to comply with the three The effectivity of RA No. 9333 and RA No. 10153 has also been challenged
separate readings requirement. because they did not comply with Sections 1 and 3, Article XVII of RA No. 9054
in amending this law. These provisions require:
On the follow-up contention that no necessity existed for the immediate
enactment of these bills since there was no public calamity or emergency that Section 1. Consistent with the provisions of the Constitution, this Organic Act
had to be met, again we hark back to our ruling in Tolentino: may be reamended or revised by the Congress of the Philippines upon a vote
of two-thirds (2/3) of the Members of the House of Representatives and of the
The sufficiency of the factual basis of the suspension of the writ of habeas Senate voting separately.
corpus or declaration of martial law Art. VII, Section 18, or the existence of a
national emergency justifying the delegation of extraordinary powers to the Section 3. Any amendment to or revision of this Organic Act shall become
President under Art. VI, Section 23(2) is subject to judicial review because effective only when approved by a majority of the vote cast in a plebiscite called
basic rights of individuals may be of hazard. But the factual basis of for the purpose, which shall be held not earlier than sixty (60) days or later
presidential certification of bills, which involves doing away with procedural than ninety (90) days after the approval of such amendment or revision.
requirements designed to insure that bills are duly considered by members of
Congress, certainly should elicit a different standard of review. [Emphasis We find no merit in this contention.
supplied.]
In the first place, neither RA No. 9333 nor RA No. 10153 amends RA No. 9054.
As an examination of these laws will show, RA No. 9054 only provides for the
schedule of the first ARMM elections and does not fix the date of the regular
The House of Representatives and the Senate in the exercise of their elections. A need therefore existed for the Congress to fix the date of the
legislative discretion gave full recognition to the Presidents certification and subsequent ARMM regular elections, which it did by enacting RA No. 9333
promptly enacted RA No. 10153. Under the circumstances, nothing short of and thereafter, RA No. 10153. Obviously, these subsequent laws RA No. 9333
grave abuse of discretion on the part of the two houses of Congress can justify and RA No. 10153 cannot be considered amendments to RA No. 9054 as they
our intrusion under our power of judicial review.[21] did not change or revise any provision in the latter law; they merely filled in a
gap in RA No. 9054 or supplemented the law by providing the date of the
The petitioners, however, failed to provide us with any cause or justification for subsequent regular elections.
this course of action. Hence, while the judicial department and this Court are
not bound by the acceptance of the President's certification by both the House This view that Congress thought it best to leave the determination of the date
of Representatives and the Senate, prudent exercise of our powers and of succeeding ARMM elections to legislative discretion finds support in
respect due our co-equal branches of government in matters committed to ARMMs recent history.
them by the Constitution, caution a stay of the judicial hand.[22]
To recall, RA No. 10153 is not the first law passed that rescheduled the ARMM
In any case, despite the Presidents certification, the two-fold purpose that elections. The First Organic Act RA No. 6734 not only did not fix the date of
underlies the requirement for three readings on separate days of every bill the subsequent elections; it did not even fix the specific date of the first ARMM
must always be observed to enable our legislators and other parties interested elections,[24] leaving the date to be fixed in another legislative enactment.
in pending bills to intelligently respond to them. Specifically, the purpose with Consequently, RA No. 7647,[25] RA No. 8176,[26] RA No. 8746,[27] RA No.
respect to Members of Congress is: (1) to inform the legislators of the matters 8753,[28] and RA No. 9012[29] were all enacted by Congress to fix the dates
they shall vote on and (2) to give them notice that a measure is in progress of the ARMM elections. Since these laws did not change or modify any part or
through the enactment process.[23] provision of RA No. 6734, they were not amendments to this latter law.
Consequently, there was no need to submit them to any plebiscite for
We find, based on the records of the deliberations on the law, that both ratification.
advocates and the opponents of the proposed measure had sufficient
The Second Organic Act RA No. 9054 which lapsed into law on March 31, as they do the same plenary powers. Perpetual infallibility is not one of the
2001, provided that the first elections would be held on the second Monday of attributes desired in a legislative body, and a legislature which attempts to
September 2001. Thereafter, Congress passed RA No. 9140[30] to reset the forestall future amendments or repeals of its enactments labors under
date of the ARMM elections. Significantly, while RA No. 9140 also scheduled delusions of omniscience.
the plebiscite for the ratification of the Second Organic Act (RA No. 9054), the
new date of the ARMM regional elections fixed in RA No. 9140 was not among xxx
the provisions ratified in the plebiscite held to approve RA No. 9054.
Thereafter, Congress passed RA No. 9333,[31] which further reset the date of A state legislature has a plenary law-making power over all subjects, whether
the ARMM regional elections. Again, this law was not ratified through a pertaining to persons or things, within its territorial jurisdiction, either to
plebiscite. introduce new laws or repeal the old, unless prohibited expressly or by
implication by the federal constitution or limited or restrained by its own. It
From these legislative actions, we see the clear intention of Congress to treat cannot bind itself or its successors by enacting irrepealable laws except when
the laws which fix the date of the subsequent ARMM elections as separate and so restrained. Every legislative body may modify or abolish the acts passed by
distinct from the Organic Acts. Congress only acted consistently with this intent itself or its predecessors. This power of repeal may be exercised at the same
when it passed RA No. 10153 without requiring compliance with the session at which the original act was passed; and even while a bill is in its
amendment prerequisites embodied in Section 1 and Section 3, Article XVII of progress and before it becomes a law. This legislature cannot bind a future
RA No. 9054. legislature to a particular mode of repeal. It cannot declare in advance the
intent of subsequent legislatures or the effect of subsequent legislation upon
III. B. Supermajority voting requirement unconstitutional for giving RA No. 9054 existing statutes.[34] (Emphasis ours.)
the character of an irrepealable law

Even assuming that RA No. 9333 and RA No. 10153 did in fact amend RA No. Thus, while a supermajority is not a total ban against a repeal, it is a limitation
9054, the supermajority (2/3) voting requirement required under Section 1, in excess of what the Constitution requires on the passage of bills and is
Article XVII of RA No. 9054[32] has to be struck down for giving RA No. 9054 constitutionally obnoxious because it significantly constricts the future
the character of an irrepealable law by requiring more than what the legislators room for action and flexibility.
Constitution demands. III. C. Section 3, Article XVII of RA No. 9054 excessively enlarged the plebiscite
requirement found in Section 18, Article X of the Constitution
Section 16(2), Article VI of the Constitution provides that a majority of each
House shall constitute a quorum to do business. In other words, as long as The requirements of RA No. 9054 not only required an unwarranted
majority of the members of the House of Representatives or the Senate are supermajority, but enlarged as well the plebiscite requirement, as embodied in
present, these bodies have the quorum needed to conduct business and hold its Section 3, Article XVII of that Act. As we did on the supermajority
session. Within a quorum, a vote of majority is generally sufficient to enact requirement, we find the enlargement of the plebiscite requirement required
laws or approve acts. under Section 18, Article X of the Constitution to be excessive to point of
absurdity and, hence, a violation of the Constitution.
In contrast, Section 1, Article XVII of RA No. 9054 requires a vote of no less
than two-thirds (2/3) of the Members of the House of Representatives and of Section 18, Article X of the Constitution states that the plebiscite is required
the Senate, voting separately, in order to effectively amend RA No. 9054. only for the creation of autonomous regions and for determining which
Clearly, this 2/3 voting requirement is higher than what the Constitution provinces, cities and geographic areas will be included in the autonomous
requires for the passage of bills, and served to restrain the plenary powers of regions. While the settled rule is that amendments to the Organic Act have to
Congress to amend, revise or repeal the laws it had passed. The Courts comply with the plebiscite requirement in order to become effective,[35]
pronouncement in City of Davao v. GSIS[33] on this subject best explains the questions on the extent of the matters requiring ratification may unavoidably
basis and reason for the unconstitutionality: arise because of the seemingly general terms of the Constitution and the
obvious absurdity that would result if a plebiscite were to be required for every
Moreover, it would be noxious anathema to democratic principles for a statutory amendment.
legislative body to have the ability to bind the actions of future legislative body,
considering that both assemblies are regarded with equal footing, exercising
Section 18, Article X of the Constitution plainly states that The creation of the synchronized elections assume office; or (3) to authorize the President to
autonomous region shall be effective when approved by the majority of the appoint OICs, pursuant to Section 3 of RA No. 10153, also until those elected
votes case by the constituent units in a plebiscite called for the purpose. With in the synchronized elections assume office.
these wordings as standard, we interpret the requirement to mean that only
amendments to, or revisions of, the Organic Act constitutionally-essential to As will be abundantly clear in the discussion below, Congress, in choosing to
the creation of autonomous regions i.e., those aspects specifically mentioned grant the President the power to appoint OICs, chose the correct option and
in the Constitution which Congress must provide for in the Organic Act require passed RA No. 10153 as a completely valid law.
ratification through a plebiscite. These amendments to the Organic Act are
those that relate to: (a) the basic structure of the regional government; (b) the V. The Constitutionality of RA No. 10153
regions judicial system, i.e., the special courts with personal, family, and
property law jurisdiction; and, (c) the grant and extent of the legislative powers A. Basic Underlying Premises
constitutionally conceded to the regional government under Section 20, Article
X of the Constitution.[36] To fully appreciate the available options, certain underlying material premises
must be fully understood. The first is the extent of the powers of Congress to
The date of the ARMM elections does not fall under any of the matters that the legislate; the second is the constitutional mandate for the synchronization of
Constitution specifically mandated Congress to provide for in the Organic Act. elections; and the third is on the concept of autonomy as recognized and
Therefore, even assuming that the supermajority votes and the plebiscite established under the 1987 Constitution.
requirements are valid, any change in the date of elections cannot be
construed as a substantial amendment of the Organic Act that would require The grant of legislative power to Congress is broad, general and
compliance with these requirements. comprehensive.[39] The legislative body possesses plenary power for all
purposes of civil government.[40] Any power, deemed to be legislative by
IV. The synchronization issue usage and tradition, is necessarily possessed by Congress, unless the
Constitution has lodged it elsewhere.[41] Except as limited by the Constitution,
As we discussed above, synchronization of national and local elections is a either expressly or impliedly, legislative power embraces all subjects and
constitutional mandate that Congress must provide for and this extends to all matters of general concern or common interest.[42]
synchronization must include the ARMM elections. On this point, an existing
law in fact already exists RA No. 7166 as the forerunner of the current RA No. The constitutional limitations on legislative power are either express or implied.
10153. RA No. 7166 already provides for the synchronization of local elections The express limitations are generally provided in some provisions of the
with the national and congressional elections. Thus, what RA No. 10153 Declaration of Principles and State Policies (Article 2) and in the provisions Bill
provides is an old matter for local governments (with the exception of barangay of Rights (Article 3). Other constitutional provisions (such as the initiative and
and Sanggunian Kabataan elections where the terms are not constitutionally referendum clause of Article 6, Sections 1 and 32, and the autonomy
provided) and is technically a reiteration of what is already reflected in the law, provisions of Article X) provide their own express limitations. The implied
given that regional elections are in reality local elections by express limitations are found in the evident purpose which was in view and the
constitutional recognition.[37] circumstances and historical events which led to the enactment of the
particular provision as a part of organic law.[43]
To achieve synchronization, Congress necessarily has to reconcile the
schedule of the ARMMs regular elections (which should have been held in The constitutional provisions on autonomy specifically, Sections 15 to 21 of
August 2011 based on RA No. 9333) with the fixed schedule of the national Article X of the Constitution constitute express limitations on legislative power
and local elections (fixed by RA No. 7166 to be held in May 2013). as they define autonomy, its requirements and its parameters, thus limiting
what is otherwise the unlimited power of Congress to legislate on the
During the oral arguments, the Court identified the three options open to governance of the autonomous region.
Congress in order to resolve this problem. These options are: (1) to allow the
elective officials in the ARMM to remain in office in a hold over capacity, Of particular relevance to the issues of the present case are the limitations
pursuant to Section 7(1), Article VII of RA No. 9054, until those elected in the posed by the prescribed basic structure of government i.e., that the
synchronized elections assume office;[38] (2) to hold special elections in the government must have an executive department and a legislative assembly,
ARMM, with the terms of those elected to expire when those elected in the both of which must be elective and representative of the constituent political
units; national government, too, must not encroach on the legislative powers synchronizing regional autonomous elections would entail; thus, the present
granted under Section 20, Article X. Conversely and as expressly reflected in problem is with us today.
Section 17, Article X, all powers and functions not granted by this Constitution
or by law to the autonomous regions shall be vested in the National The creation of local government units also represents instances when interim
Government. measures are required. In the creation of Quezon del Sur[48] and Dinagat
The totality of Sections 15 to 21 of Article X should likewise serve as a standard Islands,[49] the creating statutes authorized the President to appoint an interim
that Congress must observe in dealing with legislation touching on the affairs governor, vice-governor and members of the sangguniang panlalawigan
of the autonomous regions. The terms of these sections leave no doubt on although these positions are essentially elective in character; the appointive
what the Constitution intends the idea of self-rule or self-government, in officials were to serve until a new set of provincial officials shall have been
particular, the power to legislate on a wide array of social, economic and elected and qualified.[50] A similar authority to appoint is provided in the
administrative matters. But equally clear under these provisions are the transition of a local government from a sub-province to a province.[51]
permeating principles of national sovereignty and the territorial integrity of the
Republic, as expressed in the above-quoted Section 17 and in Section 15.[44] In all these, the need for interim measures is dictated by necessity; out-of-the-
In other words, the Constitution and the supporting jurisprudence, as they now way arrangements and approaches were adopted or used in order to adjust to
stand, reject the notion of imperium et imperio[45] in the relationship between the goal or objective in sight in a manner that does not do violence to the
the national and the regional governments. Constitution and to reasonably accepted norms. Under these limitations, the
choice of measures was a question of wisdom left to congressional discretion.
In relation with synchronization, both autonomy and the synchronization of
national and local elections are recognized and established constitutional To return to the underlying basic concepts, these concepts shall serve as the
mandates, with one being as compelling as the other. If their compelling force guideposts and markers in our discussion of the options available to Congress
differs at all, the difference is in their coverage; synchronization operates on to address the problems brought about by the synchronization of the ARMM
and affects the whole country, while regional autonomy as the term suggests elections, properly understood as interim measures that Congress had to
directly carries a narrower regional effect although its national effect cannot be provide. The proper understanding of the options as interim measures assume
discounted. prime materiality as it is under these terms that the passage of RA No. 10153
should be measured, i.e., given the constitutional objective of synchronization
These underlying basic concepts characterize the powers and limitations of that cannot legally be faulted, did Congress gravely abuse its discretion or
Congress when it acted on RA No. 10153. To succinctly describe the legal violate the Constitution when it addressed through RA No. 10153 the
situation that faced Congress then, its decision to synchronize the regional concomitant problems that the adjustment of elections necessarily brought
elections with the national, congressional and all other local elections (save for with it?
barangay and sangguniang kabataan elections) left it with the problem of how
to provide the ARMM with governance in the intervening period between the B. Holdover Option is Unconstitutional
expiration of the term of those elected in August 2008 and the assumption to
office twenty-one (21) months away of those who will win in the synchronized We rule out the first option holdover for those who were elected in executive
elections on May 13, 2013. and legislative positions in the ARMM during the 2008-2011 term as an option
that Congress could have chosen because a holdover violates Section 8,
The problem, in other words, was for interim