Supreme Court Decision on
Withholding IRAs
Republic of the Philippines
Supreme Court
Manila
EN BANC
AQUILINO Q. PIMENTEL JR., G.R. No. 132988
Petitioner,
Present:
Davide Jr., CJ,
Bellosillo,
Melo,
Puno,
- versus - Vitug,
Kapunan,
Mendoza,
Panganiban,
Quisumbing,
Purisima,
Pardo,
Buena,
Gonzaga-Reyes,
Ynares-Santiago, and
De Leon Jr., JJ.
Hon. ALEXANDER AGUIRRE
in his capacity as Executive Secretary,
Hon. EMILIA BONCODIN
in her capacity as Secretary of the
Department of Budget and Management,
Respondents.
ROBERTO PAGDANGANAN,
Intervenor.
Promulgated:
July 19, 2000
x.........................................x
DECISION
PANGANIBAN, J.:
The Constitution vests the President with the power of
supervision, not control, over local government units (LGUs).
Such power enables him to see to it that LGUs and their officials
execute their tasks in accordance with law. While he may issue
advisories and seek their cooperation in solving economic
difficulties, he cannot prevent them from performing their tasks
and using 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 internal revenue allotments
legally due them cannot be directed by administrative fiat.
The Case
Before us is an original Petition for Certiorari and
Prohibition seeking (1) to annul Section 1 of Administrative
Order (AO) No. 372, insofar as it requires local government units
to reduce their expenditures by 25 percent of their authorized
regular appropriations for non-personal services; and (2) to
enjoin respondents from implementing Section 4 of the Order,
which withholds a portion of their internal revenue allotments.
On November 17, 1998, Roberto Pagdanganan, through Counsel
Alberto C. Agra, filed a Motion for Intervention/Motion to Admit
Petition for Intervention1, attaching thereto his Petition in
Intervention2 joining petitioner in the reliefs sought. At the
time, intervenor was the provincial governor of Bulacan, national
president of the League of Provinces of the Philippines and
chairman of the League of Leagues of Local Governments. In a
Resolution dated December 15, 1998, the Court noted said Motion
and Petition.
The Facts and the Arguments
On December 27, 1997, the President of the Philippines
issued AO 372. Its full text, with emphasis on the assailed
provisions, is as follows:
"ADMINISTRATIVE ORDER NO. 372
ADOPTION OF ECONOMY MEASURES
IN GOVERNMENT FOR FY 1998
WHEREAS, the current economic difficulties brought
about by the peso depreciation requires continued
prudence in government fiscal management to maintain
economic stability and sustain the country's growth
momentum;
WHEREAS, it is imperative that all government
agencies adopt cash management measures to match
expenditures with available resources;
NOW, THEREFORE, I, FIDEL V. RAMOS, President of
the Republic of the Philippines, by virtue of the
powers vested in me by the Constitution, do hereby
order and direct:
SECTION 1. All government departments and
agencies, including state universities and colleges,
government-owned and controlled corporations and local
governments units will identify and implement measures
in FY 1998 that will reduce total expenditures for the
year by at least 25% of authorized regular
appropriations for non-personal services items, along
the following suggested areas:
1.Continued implementation of the streamlining
policy on organization and staffing by
deferring action on the following:
a.Operationalization of new agencies;
b.Expansion of organizational units and/or
creation of positions;
c.Filling of positions; and
d.Hiring of additional/new consultants,
contractual and casual personnel, regardless
of funding source.
2.Suspension of the following activities:
a.Implementation of new capital/infrastructure
projects, except those which have already
been contracted out;
b.Acquisition of new equipment and motor
vehicles;
c.All foreign travels of government personnel,
except those associated with scholarships and
trainings funded by grants;
d.Attendance in conferences abroad where the
cost is charged to the government except
those clearly essential to Philippine
commitments in the international field as may
be determined by the Cabinet;
e.Conduct of trainings/workshops/seminars,
except those conducted by government training
institutions and agencies in the performance
of their regular functions and those that are
funded by grants;
f.Conduct of cultural and social celebrations
and sports activities, except those
associated with the Philippine Centennial
celebration and those involving regular
competitions/events;
g.Grant of honoraria, except in cases where it
constitutes the only source of compensation
from government received by the person
concerned;
h.Publications, media advertisements and
related items, except those required by law
or those already being undertaken on a
regular basis;
i.Grant of new/additional benefits to
employees, except those expressly and
specifically authorized by law; and
j.Donations, contributions, grants and gifts,
except those given by institutions to victims
of calamities.
3.Suspension of all tax expenditure subsidies to
all GOCCs and LGUs
4.Reduction in the volume of consumption of fuel,
water, office supplies, electricity and other
utilities
5.Deferment of projects that are encountering
significant implementation problems
6.Suspension of all realignment of funds and the
use of savings and reserves
SECTION 2. Agencies are given the flexibility to
identify the specific sources of cost-savings, provided
the 25% minimum savings under Section 1 is complied
with.
SECTION 3. A report on the estimated savings
generated from these measures shall be submitted to the
Office of the President, through the Department of
Budget and Management, on a quarterly basis using the
attached format.
SECTION 4. Pending the assessment and evaluation
by the Development Budget Coordinating Committee of the
emerging fiscal situation, the amount equivalent to 10%
of the internal revenue allotment to local government
units shall be withheld.
SECTION 5. The Development Budget Coordination
Committee shall conduct a monthly review of the fiscal
position of the National Government and if necessary,
shall recommend to the President the imposition of
additional reserves or the lifting of previously
imposed reserves.
SECTION 6. This Administrative Order shall take
effect January 1, 1998 and shall remain valid for the
entire year unless otherwise lifted.
DONE in the City of Manila, this 27th day of
December, in the year of our Lord, nineteen hundred and
ninety-seven."
Subsequently, on December 10, 1998, President Joseph E.
Estrada issued 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.
Petitioner contends that the President, in issuing AO 372,
was in effect exercising the power of control over LGUs. The
Constitution vests in the President, however, only the power of
general supervision over LGUs, consistent with the principle of
local autonomy. Petitioner further argues that the directive to
withhold ten percent (10%) of their IRA is in contravention of
Section 286 of the Local Government Code and of Section 6,
Article X of the Constitution, providing for the automatic
release to each of these units its share in the national internal
revenue.
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 the peso devaluation" and
constituted merely an exercise of the President's power of
supervision over LGUs. It allegedly does not violate local fiscal
autonomy, because it merely directs local governments to identify
measures 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 violate the
statutory prohibition on the imposition of any lien or holdback
on their revenue shares, because such withholding is "temporary
in nature pending the assessment and evaluation by the
Development Coordination Committee of the emerging fiscal
situation."
The Issues
The Petition3 submits the following issues for the Court's
resolution:
"A. Whether or not the president committed grave
abuse of discretion [in] ordering all LGUS to adopt a
25% cost reduction program in violation of the LGU[']S
fiscal autonomy
"B. Whether or not the president committed grave
abuse of discretion in ordering the withholding of 10%
of the LGU[']S IRA"
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 same issuance, which withholds
10 percent of their internal revenue allotments, are valid
exercises of the President's power of general supervision over
local governments.
Additionally, the Court deliberated on the question whether
petitioner had the locus standi to bring this suit, despite
respondents' failure to raise the issue.4 However, the
intervention of Roberto Pagdanganan has rendered academic any
further discussion on this matter.
The Court's Ruling
The Petition is partly meritorious.
Main Issue:
Validity of AO 372
Insofar as LGUs Are Concerned
Before resolving the main issue, we deem it important and
appropriate to define certain crucial concepts: (1) the scope of
the President's power of general supervision over local
governments and (2) the extent of the local governments'
autonomy.
Scope of President's Power of
Supervision Over LGUs
Section 4 of Article X of the Constitution confines the
President's power over local governments to one of general
supervision. It reads as follows:
"Sec. 4. The President of the Philippines shall
exercise general supervision over local governments. x
x x"
This provision has been interpreted to exclude the power of
control. In Mondano v. Silvosa,5 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 follows:
"x x x In administrative law, supervision means
overseeing or the power or authority of an officer to
see that subordinate officers perform their duties. If
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
hand, means the power of an officer to alter or modify
or nullify or set aside 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 Taule v. Santos,7 we further stated that the Chief
Executive wielded no more authority than that of checking whether
local governments or their officials were performing their duties
as provided by the fundamental law and by statutes. He cannot
interfere with local governments, so long as they act within the
scope of their authority. "Supervisory power, when contrasted
with control, is the power of mere oversight over an inferior
body; it does not include any restraining authority over such
body,"8 we said.
In a more recent case, Drilon v. Lim,9 the difference
between control and supervision was further delineated. Officers
in control lay down the rules in the performance or
accomplishment of an act. If these rules are not followed, they
may, in their discretion, order the act undone or redone by their
subordinates or even decide to do it themselves. On the other
hand, supervision does not 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 the
discretion to modify or replace them. If the rules are not
observed, they may order the work done or redone, but only to
conform to such rules. They may not prescribe their own manner of
execution of the act. They have no discretion on this matter
except to see to it that the rules are followed.
Under our present system of government, executive power is
vested in the President.10 The members of the Cabinet and other
executive officials are merely alter egos. As such, they are
subject to the power of control of the President, at whose will
and behest they can be removed from office; or their actions and
decisions changed, suspended or reversed.11 In contrast, the heads
of political subdivisions are elected by the people. Their
sovereign powers emanate from the electorate, to whom they are
directly accountable. By constitutional fiat, they are subject to
the President's supervision only, not control, so long as their
acts are exercised within the sphere of their legitimate powers.
By the same token, the President may not withhold or alter any
authority or power given them by the Constitution and the law.
Extent of Local Autonomy
Hand in hand with the constitutional restraint on the
President's power over local governments is the state policy of
ensuring local autonomy.12 In Ganzon v. Court of Appeals,13 we said
that local autonomy signified "a more responsive and accountable
local government structure instituted 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
governments, x x x not x x x to end the relation of partnership
and interdependence between the central administration and local
government units x x x." Paradoxically, local governments are
still subject to regulation, however limited, for the purpose of
enhancing self-government.14
Decentralization simply means the devolution of national
administration, not power, to local governments. Local officials
remain accountable to the central government as the law may
provide.15 The difference between decentralization of
administration and that of power was explained in detail in
Limbona v. Mangelin16 as follows:
"Now, autonomy is either decentralization of
administration or decentralization of power. There is
decentralization of administration when the central
government delegates administrative powers to political
subdivisions in order to broaden the base of government
power and in the process to make local governments
`more responsive and accountable,'17 and `ensure their
fullest development as self-reliant communities and
make them more effective partners in the pursuit of
national development and social progress.'18 At the same
time, it relieves the central government of the burden
of managing local affairs and enables it to concentrate
on national concerns. The President exercises `general
supervision'19 over them, but only to `ensure that local
affairs are administered according to law.'20 He has no
control over their acts in the sense that he can
substitute their judgments with his own.21
Decentralization of power, on the other hand,
involves an abdication of political power in the favor
of local government units declared to be autonomous. In
that case, the autonomous government is free to chart
its own destiny and 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 accountable not to the
central authorities but to its constituency."22
Under the Philippine concept of local autonomy, the national
government has not completely relinquished all its powers over
local governments, including autonomous regions. Only
administrative powers over local affairs are delegated to
political subdivisions. The purpose of the delegation is to make
governance more directly responsive and effective at the local
levels. In turn, economic, political and social development at
the smaller political units are expected to propel social and
economic growth and development. But to enable the country to
develop as a whole, the programs and policies effected locally
must be integrated and coordinated towards a common national
goal. Thus, policy-setting for the entire country still lies in
the President and Congress. As we stated in Magtajas v. Pryce
Properties Corp., Inc., municipal governments are still agents of
the national government.23
The Nature of AO 372
Consistent with the foregoing jurisprudential precepts, let
us now look into the nature of AO 372. As its preambular clauses
declare, the Order was a "cash management measure" adopted by the
government "to match expenditures with available resources,"
which were presumably depleted at the time due to "economic
difficulties brought about by the peso depreciation." Because of
a looming financial crisis, the President deemed it necessary to
"direct all government agencies, state universities and colleges,
government-owned and controlled corporations as well as local
governments to reduce their total expenditures by at least 25
percent along suggested areas mentioned in AO 372.
Under existing law, local government units, in addition to
having administrative autonomy in the exercise of their
functions, enjoy fiscal autonomy as well. Fiscal autonomy means
that local governments have the power to create their own sources
of revenue in addition to their equitable share in the national
taxes released by the national government, as well as the power
to allocate their resources in accordance with their own
priorities. It extends to the preparation of their budgets, and
local officials in turn have to work within the constraints
thereof. They are not formulated at the national level and
imposed on local governments, whether they are relevant to local
needs and resources or not. Hence, the necessity of a balancing
of viewpoints and the harmonization of proposals from both local
and national officials,24 who in any case are partners in the
attainment of national goals.
Local fiscal autonomy does not however rule out any manner
of national government intervention by way of supervision, in
order to ensure that local programs, fiscal and otherwise, are
consistent with national goals. Significantly, the President, by
constitutional fiat, is the head of the economic and planning
agency of the government,25 primarily responsible for formulating
and implementing continuing, coordinated and integrated social
and economic policies, plans and programs26 for the entire
country. However, under the Constitution, the formulation and the
implementation of such policies and programs are subject to
"consultations with the appropriate public agencies, various
private sectors, and local government units." The President
cannot do so unilaterally.
Consequently, the Local Government Code provides:27
"x x x [I]n the event the national government
incurs an unmanaged public sector deficit, the
President of the Philippines is hereby authorized, upon
the recommendation of [the] Secretary of Finance,
Secretary of the Interior and Local 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 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 taxes of the
third fiscal year preceding the current fiscal year x x
x."
There are therefore several requisites before the President
may interfere in local fiscal matters: (1) an unmanaged public
sector deficit of the national government; (2) consultations with
the presiding officers of the Senate and the House of
Representatives and the presidents of the various local leagues;
and (3) the corresponding recommendation of the secretaries of
the Department of Finance, Interior and Local Government, and
Budget and Management. Furthermore, any adjustment in the
allotment shall in no case be less than thirty percent (30%) of
the collection of national internal revenue taxes of the third
fiscal year preceding the current one.
Petitioner points out that respondents failed to comply with
these requisites before the issuance and the implementation of AO
372. At the very least, they did not even try to show that the
national government was suffering from an unmanageable public
sector deficit. Neither did they claim having conducted
consultations with the different leagues of local governments.
Without these requisites, the President has no authority to
adjust, much less to reduce, unilaterally the LGU's internal
revenue allotment.
The solicitor general insists, however, that AO 372 is
merely directory and has been issued by the President consistent
with his power of supervision over local governments. It is
intended only to advise all government agencies and
instrumentalities to undertake cost-reduction measures that will
help maintain economic stability in the country, which is facing
economic difficulties. Besides, it does not contain any sanction
in case of noncompliance. Being merely an advisory, therefore,
Section 1 of AO 372 is well within the powers of the President.
Since it is not a mandatory imposition, the directive cannot be
characterized as an exercise of the power of control.
While the wordings of Section 1 of AO 372 have a rather
commanding tone, and while we agree with petitioner that the
requirements of Section 284 of the Local Government Code have not
been satisfied, we are prepared to accept the solicitor general's
assurance that the directive to ``identify and implement 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 constitute a mandatory or binding order
that interferes with local autonomy. The language used, while
authoritative, does not amount to a command that emanates from a
boss to a subaltern.
Rather, the provision is merely an advisory to prevail upon
local executives to recognize the need for fiscal restraint in a
period of economic difficulty. Indeed, all concerned would do
well to heed the President's call to unity, solidarity and
teamwork to help alleviate the crisis. It is understood, however,
that no legal sanction may be imposed upon LGUs and their
officials who do not follow such advice. It is in this light that
we sustain the solicitor general's contention in regard to
Section 1.
Withholding a Part of LGUs' IRA
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 internal revenue. This is mandated
by no less than the Constitution.28 The Local Government Code29
specifies further that the release shall be made directly to 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 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 provision is, therefore, imperative.
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 by the Development Budget
Coordinating Committee of the emerging fiscal situation" in the
country. Such withholding clearly contravenes the Constitution
and the law. Although temporary, it is equivalent to a holdback,
which means "something held back or withheld, often temporarily."32
Hence, the "temporary" nature of the retention by the national
government does not matter. Any retention is prohibited.
In sum, while Section 1 of AO 372 may be upheld as an
advisory effected in 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 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 intentions must be carried out within the
parameters of the Constitution and the law. Verily, laudable
purposes must be carried out by legal methods.
Refutation of Justice Kapunan`s Dissent
Mr. Justice Santiago M. Kapunan dissents from our Decision
on the grounds that, allegedly, (1) the Petition is premature;
(2) AO 372 falls within the powers 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 public sector deficit.
First, on prematurity. According to the Dissent, when "the
conduct has not yet occurred and the challenged construction has
not yet been adopted by the agency charged with administering the
administrative order, the determination of the scope and
constitutionality of the executive action in advance of its
immediate adverse effect involves too remote and abstract an
inquiry for the proper exercise of judicial function."
This is a rather novel theory -- that people should await
the implementing evil to befall on them before they can question
acts that are illegal or unconstitutional. Be it remembered that
the real issue here is whether the Constitution and the law are
contravened by Section 4 of AO 372, not whether they are violated
by the acts implementing it. In the unanimous en banc case Tañada
v. Angara,33 this Court held that when an act of the legislative
department is seriously alleged to have infringed the
Constitution, settling the controversy becomes the duty of this
Court. By the mere enactment of the questioned law or the
approval of the challenged action, the dispute is said to have
ripened into a judicial controversy even without any other overt
act. Indeed, even a singular violation of the Constitution and/or
the law is enough to awaken judicial duty. Said the Court:
"In seeking to nullify an act of the Philippine
Senate on the ground that it contravenes the
Constitution, the petition no doubt raises a
justiciable controversy. Where an action of the
legislative branch is seriously alleged to have
infringed the Constitution, it becomes not only the
right but in fact the duty of the judiciary to settle
the dispute. `The question thus posed is judicial
rather than political. The duty (to adjudicate) remains
to assure that the supremacy of the Constitution is
upheld.'34 Once a `controversy as to the 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 mandate to
decide.'35
xxx xxx xxx
"As this Court has repeatedly and firmly
emphasized in many cases,36 it will not shirk, digress
from or abandon its sacred duty and authority to uphold
the Constitution in matters that involve grave abuse of
discretion brought before it in appropriate cases,
committed by any officer, agency, instrumentality or
department of the government."
In the same vein, the Court also held in Tatad v. Secretary
of the Department of Energy:37
"x x x Judicial power includes not only the duty
of the courts to settle actual controversies involving
rights which are legally demandable and enforceable,
but also the duty to determine whether or not there has
been grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or
instrumentality of government. The courts, as guardians
of the Constitution, have the inherent authority to
determine whether a statute enacted by the legislature
transcends the limit imposed by the fundamental law.
Where the statute violates the Constitution, it is not
only the right but the duty of the judiciary to declare
such act unconstitutional and void."
By the same token, when an act of the President, who in our
constitutional scheme is a coequal of Congress, is seriously
alleged to have infringed the Constitution and the laws, as in
the present case, settling the dispute becomes the duty and the
responsibility of the courts.
Besides, the issue that the Petition is premature has not
been raised by the parties; hence it is deemed waived.
Considerations of due process really prevents its use against a
party that has not been given sufficient notice of its
presentation, and thus has not been given the opportunity to
refute it.38
Second, on the President's power as chief fiscal officer of
the country. Justice Kapunan posits that Section 4 of AO 372
conforms with the President's role as chief fiscal officer, who
allegedly "is clothed by law with certain powers to ensure the
observance of safeguards and auditing requirements, as well as
the legal prerequisites in the release and use of IRAs, taking
into account the constitutional and statutory mandates."39 He
cites instances when the President may lawfully intervene in the
fiscal affairs of LGUs.
Precisely, such powers referred to in the Dissent have
specifically been authorized by law and have not been challenged
as violative of the Constitution. On the other hand, Section 4 of
AO 372, as explained earlier, contravenes explicit provisions of
the Local Government Code (LGC) and the 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 legal or constitutional basis.
Third, on the President's authority to adjust the IRA of
LGUs in case of an unmanageable public sector deficit. It must be
emphasized that in striking down Section 4 of AO 372, this Court
is not ruling out any form of reduction in the IRAs of LGUs.
Indeed, as the President may make necessary adjustments 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 cites. He, however, merely glances over a
specific requirement in the same provision -- that such reduction
is subject to consultation with the presiding officers of both
Houses of Congress and, more importantly, with the presidents of
the leagues of local governments.
Notably, Justice Kapunan recognizes the need for
"interaction between the national government and the LGUs at the
planning level," in order to ensure that "local development plans
x x x hew to national policies and standards." The problem is
that no such interaction or consultation was ever held prior to
the issuance of AO 372. This is why the petitioner and the
intervenor (who was 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 Governments) have
protested and instituted this action. Significantly, respondents
do not deny the lack of consultation.
In addition, Justice Kapunan cites Section 28740 of the LGC
as impliedly authorizing the President to withhold the IRA of an
LGU, pending its 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 appropriate
in their annual budgets 20 percent of their respective IRAs for
development projects. It speaks of no positive power granted the
President to priorly withhold any amount. Not at all.
WHEREFORE, the Petition is GRANTED. Respondents and their
successors are hereby permanently PROHIBITED from implementing
Administrative Order Nos. 372 and 43, respectively dated December
27, 1997 and December 10, 1998, insofar as local government units
are concerned.
SO ORDERED.
(Sgd.) ARTEMIO V. PANGANIBAN
Associate Justice
WE CONCUR:
(Sgd.) HILARIO G. DAVIDE, JR.
Chief Justice
(Sgd.) JOSUE N. BELLOSILLO
Associate Justice
(Sgd.) REYNATO S. PUNO
Associate Justice
(With annotation: "see Dessenting Opinion")
(Sgd.) SANTIAGO M. KAPUNAN
Associate Justice
(Sgd.) LEONARDO A. QUISUMBING
Associate Justice
(Sgd.) BERNARDO P. PARDO
Associate Justice
(Sgd.) MINERVA P. GONZAGA-REYES
Associate Justice
(Sgd.) JOSE A.R. MELO
Associate Justice
(Sgd.) JOSE C. VITUG
Associate Justice
(Sgd.) VICENTE V. MENDOZA
Associate Justice
(With annotation: "I join J. Kapunan in his dissent")
(Sgd.) FIDEL P. PURISIMA
Associate Justice
(Sgd.) ARTURO B. BUENA
Associate Justice
(With annotation: "I join the dissenting opinion of J. Kapunan")
(Sgd.) CONSUELO YNARES-SANTIAGO
Associate Justice
(Sgd.) SABINO R. DE LEON, JR.
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, it is
hereby certified that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the
writer of the opinion of the Court.
(Sgd.) HILARIO G. DAVIDE, JR.
Chief Justice
___________________________________________
1 Rollo, pp. 48-55
2 Ibid, pp. 56-75
3 This case was deemed submitted for decision on September 27,
1999, upon receipt by this Court of respondents' 10-page
Memorandum, which was signed by Asst. Sol. Gen. Mariano M.
Martinez and Sol. Ofelia B. Cajigal. Petitioner's Memorandum was
filed earlier, on September 21, 1999. Intervenor failed, despite
due notice, to submit a memorandum within the alloted time; thus,
he is deemed to have waived the filing of one.
4 Issues of mootness and locus standi were not raised by the
respondents. However, the intervention of Roberto Pagdanganan, as
explained in the main text, has stopped any further discussion of
petitioner's standing. On the other hand, by the failure of
respondents to raise mootness as an issue, the Court thus
understands that the main issue is still justiciable. In any
case, respondents are deemed to have waived this defense or, at
the very least, to have submitted the Petition for resolution on
the merits, for the future guidance of the government, the bench
and the bar.
5 97 Phil 143, May 30, 1955; per Padilla, J.
6 Ibid., pp. 147-148. Reiterated in Ganzon v. Kayanan, 104 Phil
484 (1985); Ganzon v. Court of Appeals, 200 SCRA 271, August 5,
1991; Taule v. Santos, 200 SCRA 512, August 12, 1991.
7 Ibid.; citing Pelaez v. Auditor General, 15 SCRA 569, December
24, 1965; Hebron v. Reyes, 104 Phil. 175 (1958); and Mondano v.
Silvosa, supra.
8 Ibid., p. 522; citing Hebron v. Reyes, ibid., per Concepcion,
J.
9 235 SCRA 135, 142, August 4,1994.
10 1, Art. VII of the Constitution.
11 Joaquin G. Bernas, SJ, The 1987 Constitution of the Republic of
the Philippines: A
Commentary, 1996 ed., p. 739.
12 The Constitution provides:
"Sec. 25[, Art. II]. The State shall ensure the autonomy of
local governments."
"Sec. 2[, Art. X]. The territorial and political
subdivisions shall enjoy local autonomy."
13 200 SCRA 271, 286, August 5,1991, per Sarmiento, J.; citing 3,
Art. X of the
Constitution.
14 Ibid.
15 Ibid.
16 170 SCRA 786, 794-795, February 28, 1989, per Sarmiento,J.
17 Citing 3, Art. X, 1987 Const.
18 Citing 2, BP 337.
19 Citing 4, Art. X, 1987 Const.
20 Citing BP 337; and Hebron v. Reyes, supra.
21 Citing Hebron v. Reyes, supra.
22 Citing Bernas, "Brewing storm over autonomy," The Manila
Chronicle, pp. 4-5.
23 234 SCRA 255, 272, July 20, 1994
24 San Juan v. Civil Service Commission, 196 SCRA 69, 79, April
19, 1991.
25 9, Art. XII of the Constitution.
26 3, Chapter 1, Subtitle C, Title II, Book V, EQ 292
(Administrative Code of 1987).
27 284. See also Art. 379 of the Rules and Regulations
Implementing the Local Government Code of 1991.
28 6 of Art. X of the Constitution reads:
"Local government units shall have a just share, as determined by
law, in the national taxes which shall be automatically released
to them."
29 286 (a) provides:
"Automatic Release of Shares. -- (a) The share of each local
government unit shall be released, without need of any further
action, directly to the provincial, city, municipal or barangay
treasurer, as the case may be, on a quarterly basis within (5)
days after the end of each quarter, and which shall not be
subject to any lien or holdback that may be imposed by the
national government for whatever purpose."
30 Emphasis supplied.
31 Ruben B. Agpalo, Statutory Construction, 1990 ed., p. 239.
32 Webster's Third New International Dictionary, 1993 ed.
33 272 SCRA 18, May 2, 1997, per Panganiban, J.
34 Citing Aquino Jr. v. PonceEnrile, 59 SCRA 183, 196, September
17, 1974.
35 Citing Guingona Jr. v. Gonzales, 219 SCRA 326, 337, March
1,1993.
36 Cf. Daza v. Singson, 180 SCRA 496, December 21, 1989.
37 281 SCRA 330, 347-48, November 5,1997, per Puno,J.
38 See Philippine National Bank v. Sayo, Jr., 292 SCRA 202, July
9,1998; Vinta Maritime Co., Inc. v. NLRC, 284 SCRA 656, January
23, 1998.
39 Footnotes omitted.
40 "Sec. 287. Local Development Projects. Each local government
unit shall appropriate in its annual budget no less than twenty
percent (20%) of its annual internal revenue allotment for
development projects. Copies of the development plans of local
government units shall be furnished the Department of Interior
and Local Government."