Greater Balanga Development Corporation v.

Municipality
of Balanga, Bataan (1998)
Facts:
The case involves a parcel of land, Lot 261-B-6-A-3

located behind the public market in the Municipality of

Balanga, Province of Bataan. It is registered in the name
of Greater Balanga Development, Corp., owned and
controlled by the Camacho family. The lot was part of Lot
261-B, formerly registered in the name of Aurora Banzon
Camacho, which was later subdivided into certain lots,
some of which were sold, others donated. Five buyers of
the lot filed a civil case against Camacho for partition and
delivery of titles.
Petitioner applied for and was granted a business

permit by the Office of the Mayor of Balanga but failed to

mention the existence of the civil case for partition and
delivery of titles. The permit was granted the privilege of
a real estate dealer/privately-owned market operator.
However, the Sangguniang Bayan (SB) passed Resolution
No. 12 s-88, annulling the Mayor's permit issued to
Petitioner, on the ground that the issue as to the
ownership of the lot caused anxiety, uncertainty and
restiveness among the stallholders and traders in the lot,
and advising the Mayor to revoke the permit to operate a
public market. The Mayor then revoked the permit
through EO No. 1 s-88.
Petitioner filed this petition with prayer for

preliminary prohibitory and mandatory injunction or

restraining order and to reinstate the Mayor's permit and
to curtail the municipality's collection of market and
entrance fees from the lot occupants. He alleges that: 1)
it didn't violate any law, thus, there's no reason for
revocation of the permit; 2) Respondents failed to observe
due process in the revocation; 3) the collection of market
fees is illegal.
On the other hand, Respondents assert that the Mayor

as the local chief executive has the power to issue, deny

or revoke permits. They claim that the revocation was due
to the violation by Petitioner of Section 3A-06(b) of the
Balanga Revenue Code when it: 1) made false statement in
the application form, failing to disclose that the lot was
subject to adverse claims for which a civil case was filed;
2) failed to apply for 2 separate permits for the 2 lines of
business (real estate and public market).
Issue: W/N the revocation of the Mayor's permit was valid.
Held: NO.
The powers of municipal corporations are to be

construed in strictissimi juris and any doubt or ambiguity

must be construed against the municipality. The authority
of the Mayor to revoke permits is premised on a violation
by the grantee of any of its conditions for its grant. For
revocation to be justified under the Balanga Revenue
Code, there must be: 1) proof of willful
misrepresentation, and 2) deliberate intent to make a
false statement. Good faith is always presumed.

In this case, the application for Mayor's permit

requries the applicant to state the type of business,
profession, occupation, privileges applied for.
Petitioner left this entry bank in its application
form. It is only in the Mayor's permit itself that
petitioner's lines of business appear. Revocation is
not justified because Petitioner did not make any
false statement therein.

Neither was petitioner's applying for two

businesses in one permit a ground for revocation.
The second paragraph of Section 3A-06(b) does not
expressly require two permits for their conduct of
two or more businesses in one place, but only that
separate fees be paid for each business. Granting,
however, that separate permits are actually
required, the application form does not contain any
entry as regards the number of businesses the
applicant wishes to engage in.
The SB's Resolution merely mentioned the plan to

acquire the Lot for expansion of the Balanga Public

Market adjacent thereto. The SB doesn't actually
maintain a public market on the area. Until

expropriation proceedings are instituted in court, the

landowner cannot be deprived of its right over the land.
Of course, the SB has the duty in the exercise of its
police powers to regulate any business subject to
municipal license fees and prescribe the conditions
under which a municipal license already issued may be
revoked (B.P. Blg. 337, Sec. 149 [1] [r]), but the "anxiety,
uncertainty, restiveness" among the stallholders and
traders doing business on a property not owned by the
Municipality cannot be a valid ground for revoking the
permit of Petitioner.
Also, the manner by which the Mayor revoked the
permit transgressed petitioner's right to due process.
The alleged violation of Section 3A-06(b) of the Balanga
Revenue Code was not stated in the order of revocation,
and neither was petitioner informed of this specific
violation. Moreover, Respondent Municipality isn't the
owner of Lot 261 B-6-A-3, and thus cannot collect
market fees, which only an owner can do.

Lidasan v. Comelec
Digest
Lidasan v Comelec
G.R. No. L-28089 October 25, 1967
Sanchez, J.:
Facts:
1. Lidasan, a resident and taxpayer of the
detached portion of Parang, Cotabato, and a
qualified voter for the 1967 elections assails
the constitutionality of RA 4790 and
petitioned that Comelec's resolutions
implementing the same for electoral
purposes be nullified. Under RA 4790, 12
barrios in two municipalities in the province
of Cotabato are transferred to the province
of Lanao del Sur. This brought about a
change in the boundaries of the two
provinces.
2. Barrios Togaig and Madalum are within the
municipality of Buldon in the Province of
Cotabato, and that Bayanga, Langkong,
Sarakan, Kat-bo, Digakapan, Magabo,
Tabangao,
Tiongko,
Colodan
and
Kabamakawan are parts and parcel of
another municipality, the municipality
of Parang,
also
in
the Province
of
Cotabato and not of Lanao del Sur.
3. Apprised of this development, the Office of
the President, recommended to Comelec
that the operation of the statute be
suspended until "clarified by correcting
legislation."
4. Comelec, by resolution declared that the
statute should be implemented unless
declared unconstitutional by the Supreme
Court.

ISSUE: Whether or not RA 4790, which is

entitled "An Act Creating the Municipality
of Dianaton in the Province of Lanao del
Sur", but which includes barrios located in
another
province

Cotabato is
unconstitutional for embracing more than
one subject in the title
YES. RA 4790 is null and void
1. The constitutional provision contains dual
limitations upon legislative power. First.
Congress is to refrain from conglomeration,
under one statute, of heterogeneous
subjects. Second. The title of the bill is to
be couched in a language sufficient to notify
the legislators and the public and those
concerned of the import of the single
subject thereof. Of relevance here is the
second directive. The subject of the statute
must be "expressed in the title" of the bill.
This constitutional requirement "breathes
the spirit of command." Compliance is
imperative, given the fact that the
Constitution does not exact of Congress the
obligation to read during its deliberations
the entire text of the bill. In fact, in the
case of House Bill 1247, which became RA
4790, only its title was read from its
introduction to its final approval in the
House where the bill, being of local
application, originated.
2. The Constitution does not require Congress
to employ in the title of an enactment,
language of such precision as to mirror, fully
index or catalogue all the contents and the
minute details therein. It suffices if the title
should serve the purpose of the
constitutional demand that it inform the
legislators, the persons interested in the
subject of the bill, and the public, of the
nature, scope and consequences of the
proposed law and its operation. And this, to
lead them to inquire into the body of the
bill, study and discuss the same, take
appropriate action thereon, and, thus,
prevent surprise or fraud upon the
legislators.
3. The test of the sufficiency of a title is
whether or not it is misleading; and, which
technical accuracy is not essential, and the
subject need not be stated in express terms
where it is clearly inferable from the details
set forth, a title which is so uncertain that
the average person reading it would not be
informed of the purpose of the enactment
or put on inquiry as to its contents, or which

is misleading, either in referring to or

indicating one subject where another or
different one is really embraced in the act,
or in omitting any expression or indication
of the real subject or scope of the act, is
bad.
4. The title "An Act Creating the Municipality
of Dianaton, in the Province of Lanao del
Sur" projects the impression that only the
province of Lanao del Sur is affected by the
creation of Dianaton. Not the slightest
intimation is there that communities in the
adjacent province of Cotabato are
incorporated in this new Lanao del Sur
town. The phrase "in the Province of Lanao
del Sur," read without subtlety or
contortion, makes the title misleading,
deceptive. For, the known fact is that the
legislation has a two-pronged purpose
combined in one statute: (1) it creates the
municipality of Dianaton purportedly from
twenty-one barrios in the towns of Butig and
Balabagan, both in the province of Lanao
del Sur; and (2) it also dismembers two
municipalities in Cotabato, a province
different from Lanao del Sur.
5.

Finally, the title did not inform the

members of Congress the full impact of the
law. One, it did not apprise the people in
the towns of Buldon and Parang in Cotabato
and in the province of Cotabato itself that
part of their territory is being taken away
from their towns and province and added to
the adjacent Province of Lanao del Sur. Two,
it kept the public in the dark as to what
towns and provinces were actually affected
by the bill.

MMDA v Bel-Air
Village
Association, Inc.
Posted on November 18, 2012

GR 135962
March 27, 2000
FACTS:
On December 30, 1995, respondent received
from petitioner a notice requesting the former
to open its private road, Neptune Street, to
public vehicular traffic starting January 2, 1996.
On the same day, respondent was apprised that
the perimeter separating the subdivision from

Kalayaan Avenue would be demolished.

legislative councils, that possess legislative

Respondent instituted a petition for injunction

power and police power.

against petitioner, praying for the issuance of a

The Sangguniang Panlungsod of Makati City did

TRO and preliminary injunction enjoining the

not pass any ordinance or resolution ordering

opening of Neptune Street and prohibiting the

the opening of Neptune Street, hence, its

demolition of the perimeter wall.

proposed opening by the MMDA is illegal.

ISSUE:
WON MMDA has the authority to open Neptune
Street to public traffic as an agent of the state
endowed with police power.
HELD:
A local government is a political subdivision
of a nation or state which is constituted by law
and has substantial control of local affairs. It is
a body politic and corporate one endowed
with powers as a political subdivision of the
National Government and as a corporate entity
representing the inhabitants of its territory
(LGC of 1991).
Our Congress delegated police power to the
LGUs in Sec.16 of the LGC of 1991. It
empowers the sangguniang panlalawigan,
panlungsod and bayan to enact ordinances,
approve resolutions and appropriate funds for
the general welfare of the [province, city or
municipality] and its inhabitants pursuant
to Sec.16 of the Code and in the proper exercise
of the [LGUs corporate powers] provided under
the Code.
There is no syllable in RA 7924 that grants the
MMDA police power, let alone legislative power.
Unlike the legislative bodies of the LGUs, there
is no grant of authority in RA 7924 that allows
the MMDA to enact ordinances and regulations
for the general welfare of the inhabitants of
Metro Manila. The MMDA is merely a
development authority and not a political
unit of government since it is neither an LGU or
a public corporation endowed with legislative
power. The MMDA Chairman is not an elective
official, but is merely appointed by the
President with the rank and privileges of a
cabinet member.
In sum, the MMDA has no power to enact
ordinances for the welfare of the community. It
is the LGUs, acting through their respective

15 SCRA 569 Political Law Sufficient

Standard Test and Completeness Test
In 1964, President Ferdinand Marcos issued
executive orders creating 33 municipalities
this was purportedly pursuant to Section 68 of
the Revised Administrative Code which provides
in part:
The President may by executive order define
the boundary of any municipality and may
change the seat of government within any
subdivision to such place therein as the public
welfare may require
The then Vice President, Emmanuel Pelaez,
as a taxpayer, filed a special civil action to
prohibit the auditor general from disbursing
funds to be appropriated for the said
municipalities. Pelaez claims that the EOs were
unconstitutional. He said that Section 68 of the
RAC had been impliedly repealed by Section 3 of
RA 2370 which provides that barrios may not
be created or their boundaries altered nor their
names changed except by Act of Congress.
Pelaez argues: If the President, under this new
law, cannot even create a barrio, how can he
create a municipality which is composed of
several barrios, since barrios are units of
municipalities?
The Auditor General countered that there was
no repeal and that only barrios were barred
from being created by the President.
Municipalities are exempt from the bar and that
a municipality can be created without creating
barrios. He further maintains that through Sec.
68 of the RAC, Congress has delegated such
power to create municipalities to the President.
ISSUE: Whether or not Congress has delegated
the power to create barrios to the President by
virtue of Sec. 68 of the RAC.
HELD: No.
There
was
no
delegation
here. Although Congress may delegate to
another branch of the government the power to
fill in the details in the execution, enforcement

or administration of a law, it is essential, to

forestall a violation of the principle of
separation of powers, that said law: (a) be
complete in itself it must set forth therein
the policy to be executed, carried out or
implemented by the delegate and (b) fix a
standard the limits of which are sufficiently
determinate or determinable to which the
delegate must conform in the performance of
his functions. In this case, Sec. 68 lacked any
such standard. Indeed, without a statutory
declaration of policy, the delegate would, in
effect, make or formulate such policy, which is
the essence of every law; and, without the
aforementioned standard, there would be no
means to determine, with reasonable certainty,
whether the delegate has acted within or
beyond the scope of his authority.
Further, although Sec. 68 provides the qualifying
clause as the public welfare may require
which would mean that the President may
exercise such power as the public welfare may
require is present, still, such will not replace
the standard needed for a proper delegation of
power. In the first place, what the phrase as
the public welfare may require qualifies is the
text which immediately precedes hence, the
proper interpretation is the President may
change the seat of government within any
subdivision to such place therein as the public
welfare may require. Only the seat of
government may be changed by the President
when public welfare so requires and NOT the
creation of municipality.

establishing the Program for Devolution

Adjustment and Equalization to enhance the
capabilities of LGUs in the discharge of the
functions and services devolved to them through
the LGC.
The Oversight Committee under Executive
Secretary Ronaldo Zamora passed Resolutions
No. OCD-99-005, OCD-99-006 and OCD-99-003
which were approved by Pres. Estrada on
October 6, 1999. The guidelines formulated by
the Oversight Committee required the LGUs to
identify the projects eligible for funding under
the portion of LGSEF and submit the project
proposals and other requirements to the DILG
for appraisal before the Committee serves
notice to the DBM for the subsequent release of
the corresponding funds.
Hon. Herminaldo Mandanas, Governor of
Batangas, petitioned to declare unconstitutional
and void certain provisos contained in the
General Appropriations Acts (GAAs) of 1999,
2000, and 2001, insofar as they uniformly
earmarked for each corresponding year the
amount of P5billion for the Internal Revenue
Allotment (IRA) for the Local Government
Service Equalization Fund (LGSEF) & imposed
conditions for the release thereof.
ISSUE:
Whether the assailed provisos in the GAAs of

The Supreme Court declared that the power to

create municipalities is essentially and
eminently
legislative
in
character
not
administrative (not executive).

1999, 2000, and 2001, and the OCD resolutions

Province of
Batangas
vs. Romulo

The assailed provisos in the GAAs of 1999, 2000,

Posted on November 20, 2012

GR 152774
May 27, 2004
FACTS:
In 1998, then President Estrada issued EO No. 48

infringe the Constitution and the LGC of 1991.

HELD:
Yes.
and 2001, and the OCD resolutions constitute a
withholding of a portion of the IRA they
effectively encroach on the fiscal autonomy
enjoyed by LGUs and must be struck down.
According to Art. II, Sec.25 of the
Constitution, the State shall ensure the local
autonomy of local governments. Consistent
with the principle of local autonomy,
theConstitution confines the Presidents power
over the LGUs to one of general supervision,
which has been interpreted to exclude

the power of control. Drilon v.

purpose or a separate fiscal unit any

Limdistinguishes supervision from

provision therein which is intended to amend

control: control lays down the rules in the

another law is considered an inappropriate

doing of an act the officer has the discretion

provision. Increasing/decreasing the IRA of

to order his subordinate to do or redo the act,

LGUs fixed in the LGC of 1991 are matters of

or decide to do it

general & substantive law. To permit the

himself; supervision merely sees to it that the

Congress to undertake these amendments

rules are followed but has no authority to set

through the GAAs would unduly infringe the

down the rules or the discretion to

fiscal autonomy of the LGUs.

modify/replace them.

The value of LGUs as institutions of

The entire process involving the distribution &

democracy is measured by the degree of

release of the LGSEF is constitutionally

autonomy they enjoy. Our national officials

impermissible. The LGSEF is part of the IRA or

should not only comply with the constitutional

just share of the LGUs in the national

provisions in local autonomy but should also

taxes. Sec.6, Art.X of the

appreciate the spirit and liberty upon which

Constitution mandates that the just

these provisions are based.

share shall beautomatically released to the

LGUs. Since the release is automatic, the LGUs
arent required to perform any act to receive
the just share it shall be released to them
without need of further action. To subject its
distribution & release to the vagaries of the
implementing rules & regulations as sanctioned
by the assailed provisos in the GAAs of 19992001 and the OCD Resolutions would violate this
constitutional mandate.
The only possible exception to the mandatory
automatic release of the LGUs IRA is if the
national internal revenue collections for the
current fiscal year is less than 40% of the
collections of the 3rd preceding fiscal year. The
exception does not apply in this case.
The Oversight Committees authority is limited
to the implementation of the LGC of 1991
not to supplant or subvert the same, and
neither can it exercise control over the IRA of
the LGUs.
Congress may amend any of the provisions of
the LGC but only through a separate lawand not
through appropriations laws or GAAs. Congress
cannot include in a general appropriations bill
matters that should be more properly enacted
in a separate legislation.
A general appropriations bill is a special type of
legislation, whose content is limited to
specified sums of money dedicated to a specific

SAN JUAN VS SCS, DBM & ALMAJOSE

Posted by kaye lee on 6:50 PM
Reynaldo R. San Juan vs CSC, DBM, Cecilia Almajose
GR No. 92299, April 19, 1991
FACTS:
The position of Provincial Budget Officer for the Province of
Rizal was left vacant on March 22, 1988.
Provincial Governor, petitioner informed the Director of DBM
that Ms. Dalisay Santos, then Municipal Budget Officer of
Taytay, Rizal, assumed offices as Acting PBO since March 22,
1988 and requested the Director of DBM to endorse the
appointment of Ms. Santos to the position of PBO. DBM
Regional Director found Cecilia Almajose, among the
nominees of the petitioner to be the most qualified and
recommended to the DBM Secretary the appointment of
Almajose as PBO of Rizal, which the DBM USec signed the
appointment papers of Almajose as PBO.
Upon learning of Almajoses appointment, petitioner wrote
DBM Sec protesting against the said appointment on the
grounds that the DBM Usec is not legally authorized to
appoint the PBO, that Almajose lacks the required 3 yrs works
experience as provided in Local Budget Circular No. 31, and
that under EO No. 112, it is the Provincial Governor, not the
Regional Director or a Congressman, who has the power to
recommend nominees for the position of PBO.
ISSUE:
Whether or not the DBM has the power to appoint the PBO
without violating the principle of Local Autonomy.
RULING:
We have to obey the clear mandate on local autonomy. Where
a law is capable of two interpretations, one in favor of
centralized power in Malacaang and the other beneficial to
local autonomy, the scales must be weighed in favor of
autonomy.
The 1935 Constitution had no specific article on local
autonomy but distinguished presidential control to
supervision:
"The President shall have control of all the executive
departments, bureaus, or offices, exercise general
supervision over all local governments as may be provided by
law, and take care that the laws be faithfully executed. (Sec.
11, Article VII, 1935 Constitution)"
The President controls the executive departments. He has no
such power over local governments. He has only supervision
and that supervision is both general and circumscribed by
statute.

Article II, S. 25, 1987 Constitution states:

"Sec. 25. The State shall ensure the autonomy of local
governments."
The 14 sections in Article X, on Local Government not only
reiterate earlier doctrines but give in greater detail the
provisions making local autonomy more meaningful.
"Sec. 2. The territorial and political subdivisions shall enjoy
local autonomy.
"Sec. 3. The Congress shall enact a local government code
which shall provide for a more responsive and accountable
local government structure instituted through a system of
decentralization with effective mechanisms of recall,
initiative, and referendum, allocate among the different local
government units their powers, responsibilities, and
resources, and provide for the qualifications, election,
appointment and removal, term, salaries, powers and
functions and duties of local officials, and all other matters
relating to the organization and operation of the local units."
The right given by Local Budget Circular No. 31 which states:
Sec. 6.0 The DBM reserves the right to fill up any existing
vacancy where none of the nominees of the local chief
executive meet the prescribed requirements.
is ultra vires and is, accordingly, set aside. The DBM may
appoint only from the list of qualified recommendees
nominated by the Governor. If none is qualified, he must
return the list of nominees to the Governor explaining why no
one meets the legal requirements and ask for new
recommendees who have the necessary eligibilities and
qualifications.

Tano vs Socrates
Natural and Environmental Laws; Constitutional
Law; Regalian Doctrine
GR No. 110249; August 21, 1997
FACTS:
On Dec 15, 1992, the Sangguniang Panglungsod
ng Puerto Princesa enacted an ordinance
banning the shipment of all live fish and lobster
outside Puerto Princesa City from January 1,
1993 to January 1, 1998. Subsequently the
Sangguniang Panlalawigan, Provincial
Government of Palawan enacted a resolution
prohibiting the catching , gathering, possessing,
buying, selling, and shipment of a several
species of live marine coral dwelling aquatic
organisms for 5 years, in and coming from
Palawan waters.
Petitioners filed a special civil action for
certiorari and prohibition, praying that the
court declare the said ordinances and
resolutions as unconstitutional on the ground
that the said ordinances deprived them of the
due process of law, their livelihood, and unduly
restricted them from the practice of their
trade, in violation of Section 2, Article XII and
Sections 2 and 7 of Article XIII of the 1987
Constitution.
ISSUE:
Are the challenged ordinances unconstitutional?
HELD:
No. The Supreme Court found the petitioners
contentions baseless and held that the

challenged ordinances did not suffer from any

infirmity, both under the Constitution and
applicable laws. There is absolutely no showing
that any of the petitioners qualifies as a
subsistence or marginal fisherman. Besides,
Section 2 of Article XII aims primarily not to
bestow any right to subsistence fishermen, but
to lay stress on the duty of the State to protect
the nations marine wealth. The so-called
preferential right of subsistence or marginal
fishermen to the use of marine resources is not
at all absolute.
In accordance with the Regalian Doctrine,
marine resources belong to the state and
pursuant to the first paragraph of Section 2,
Article XII of the Constitution, their
exploration, development and
utilization...shall be under the full control and
supervision of the State.
In addition, one of the devolved powers of the
LCG on devolution is the enforcement of fishery
laws in municipal waters including the
conservation of mangroves. This necessarily
includes the enactment of ordinances to
effectively carry out such fishery laws within
the municipal waters. In light of the principles
of decentralization and devolution enshrined in
the LGC and the powers granted therein to LGUs
which unquestionably involve the exercise of
police power, the validity of the questioned
ordinances cannot be doubted.

G.R. No. 91649 May 14, 1991Basco vs. PAGCOR

H.B. Basco & Associates for petitioners Valmonte
Law Offices collaborating counsel for
petitionersAguirre, Laborte and Capule for
respondent PAGCOR
Facts:
The Philippine Amusements and Gaming
Corporation (PAGCOR) was created by virtue of
P.D. 1067-A dated January 1, 1977 and was
granted a franchise under P.D. 1067-B also dated
January 1, 1977"to establish, operate and
maintain gambling casinos on land or water within
the territorial jurisdictionof the Philippines."
Petitioners filed an instant petition seeking to
annul the Philippine Amusement and
GamingCorporation (PAGCOR) Charter PD 1869,
because it is allegedly contrary to morals, public
policy and order
Petitioners claim that P.D. 1869 constitutes a
waiver of the right of the City of Manila to impose
taxesand legal fees; that the exemption clause in
P.D. 1869 is in violation of the principle of
localautonomy.
oSection 13 par. (2) of P.D. 1869 exempts PAGCOR,
as the franchise holder from paying any"tax of any
kind or form, income or otherwise, as well as
fees, charges or levies of whatever nature,
whether National or Local."Issue:
Does the local Government of Manila have the
power to impose taxes on PAGCOR?Held

No, the court rules that The City government of

Manila has no power to impose taxes on
PAGCOR.Reason:

The principle of Local autonomy does not make

local governments sovereign within the state; the
principle of local autonomy within the constitution
simply means decentralization. It cannot be
anImperium in imperio it can only act intra
sovereign, or as an arm of the National
Government.

PAGCOR has a dual role, to operate and to

regulate gambling casinos. The latter role is
governmental,which places it in the category of

an agency or instrumentality of the Government.

Being aninstrumentality of the Government,
PAGCOR should be and actually is exempt from
local taxes.

The power of local government to "impose taxes

and fees" is always subject to "limitations" which
Congress may provide by law. Since PD 1869
remains an "operative" law until "amended,
repealed or revoked" (Sec. 3, Art. XVIII, 1987
Constitution), its "exemption clause" remains as an
exception tothe exercise of the power of local
governments to impose taxes and fees. It cannot
therefore beviolative but rather is consistent with
the principle of local autonomy.

197 SCRA 52 Political Law Constitutional Law

Bill of Rights Equal Protection Clause

Municipal Corporation Local Autonomy

Imperium in Imperio
In 1977, the Philippine Amusements and Gaming
Corporation (PAGCOR) was created by Presidential
Decree 1067-A. PD 1067-B meanwhile granted
PAGCOR the power to establish, operate and
maintain gambling casinos on land or water within
the territorial jurisdiction of the Philippines.
PAGCORs operation was a success hence in 1978,
PD 1399 was passed which expanded PAGCORs
power. In 1983, PAGCORs charter was updated
through PD 1869. PAGCORs charter provides that
PAGCOR shall regulate and centralize all games of
chance authorized by existing franchise or
permitted by law. Section 1 of PD 1869 provides:
Section 1.
Declaration of Policy. It is hereby
declared to be the policy of the State to
centralize and integrate all games of chance not
heretofore authorized by existing franchises or
permitted by law.
Atty. Humberto Basco and several other lawyers
assailed the validity of the law creating PAGCOR.
They claim that PD 1869 is unconstitutional
because a) it violates the equal protection clause
and b) it violates the local autonomy clause of the
constitution.
Basco et al argued that PD 1869 violates the equal
protection clause because it legalizes PAGCORconducted gambling, while most other forms of
gambling are outlawed, together with
prostitution, drug trafficking and other vices.

Anent the issue of local autonomy, Basco et al

contend that P.D. 1869 forced cities like Manila to
waive its right to impose taxes and legal fees as
far as PAGCOR is concerned; that Section 13 par.
(2) of P.D. 1869 which exempts PAGCOR, as the
franchise holder from paying any tax of any kind
or form, income or otherwise, as well as fees,
charges or levies of whatever nature, whether
National or Local is violative of the local
autonomy principle.

ISSUE:
1. Whether or not PD 1869 violates the equal
protection clause.
2. Whether or not PD 1869 violates the local
autonomy clause.

HELD:
1. No. Just how PD 1869 in legalizing gambling
conducted by PAGCOR is violative of the equal
protection is not clearly explained in Bascos
petition. The mere fact that some gambling
activities like cockfighting (PD 449) horse racing
(RA 306 as amended by RA 983), sweepstakes,
lotteries and races (RA 1169 as amended by BP 42)
are legalized under certain conditions, while
others are prohibited, does not render the
applicable laws, PD. 1869 for one,
unconstitutional.
Bascos posture ignores the well-accepted
meaning of the clause equal protection of the
laws. The clause does not preclude classification
of individuals who may be accorded different
treatment under the law as long as the
classification is not unreasonable or arbitrary. A
law does not have to operate in equal force on all
persons or things to be conformable to Article III,
Sec 1 of the Constitution. The equal protection
clause does not prohibit the Legislature from
establishing classes of individuals or objects upon
which different rules shall operate. The
Constitution does not require situations which are
different in fact or opinion to be treated in law as
though they were the same.
2. No. Section 5, Article 10 of the 1987
Constitution provides:
Each local government unit shall have the power
to create its own source of revenue and to levy
taxes, fees, and other charges subject to such
guidelines and limitation as the congress may
provide, consistent with the basic policy on local

autonomy. Such taxes, fees and charges shall

accrue exclusively to the local government.
A close reading of the above provision does not
violate local autonomy (particularly on taxing
powers) as it was clearly stated that the taxing
power of LGUs are subject to such guidelines and
limitation as Congress may provide.
Further, the City of Manila, being a mere
Municipal corporation has no inherent right to
impose taxes. The Charter of the City of Manila is
subject to control by Congress. It should be
stressed that municipal corporations are mere
creatures of Congress which has the power to
create and abolish municipal corporations due
to its general legislative powers. Congress,
therefore, has the power of control over Local
governments. And if Congress can grant the City of
Manila the power to tax certain matters, it can
also provide for exemptions or even take back the
power.
Further still, local governments have no power to
tax instrumentalities of the National Government.
PAGCOR is a government owned or controlled
corporation with an original charter, PD 1869. All
of its shares of stocks are owned by the National
Government. Otherwise, its operation might be
burdened, impeded or subjected to control by a
mere Local government.
This doctrine emanates from the supremacy of
the National Government over local governments.

200 SCRA 271 Political Law Control Power Local

Government
Rodolfo Ganzon was the then mayor of Iloilo City. 10
complaints were filed against him on grounds of
misconduct and misfeasance of office. The Secretary of
Local Government issued several suspension orders against
Ganzon based on the merits of the complaints filed
against him hence Ganzon was facing about 600 days of
suspension. Ganzon appealed the issue to the CA and the
CA affirmed the suspension order by the Secretary. Ganzon
asserted that the 1987 Constitution does not authorize the
President nor any of his alter ego to suspend and remove
local officials; this is because the 1987 Constitution
supports local autonomy and strengthens the same. What
was given by the present Constitution was mere
supervisory power.
ISSUE: Whether or not the Secretary of Local Government,
as the Presidents alter ego, can suspend and or remove
local officials.

HELD: Yes. Ganzon is under the impression that the

Constitution has left the President mere supervisory
powers, which supposedly excludes the power of
investigation, and denied her control, which allegedly
embraces disciplinary authority. It is a mistaken
impression because legally, supervision is not
incompatible with disciplinary authority.
The SC had occasion to discuss the scope and extent of
the power of supervision by the President over local
government officials in contrast to the power of control
given to him over executive officials of our government
wherein it was emphasized that the two terms, control
and supervision, are two different things which differ one
from the other in meaning and extent. In administration
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 of set aside what a
subordinate officer had done in the performance of his
duties and to substitute the judgment of the former for
that of the latter. But from this pronouncement it cannot
be reasonably inferred that the power of supervision of
the President over local government officials does not
include the power of investigation when in his opinion the
good of the public service so requires.
The Secretary of Local Government, as the alter ego of
the president, in suspending Ganzon is exercising a valid
power. He however overstepped by imposing a 600 day
suspension.