Digests

MMDA Vs. Bel-Air Village [328 SCRA 836; G.R. No. 135962; 27 Mar 2000]

Facts: Metropolitan Manila Development Authority (MMDA), petitioner herein, is a

Government Agency tasked with the delivery of basic servicesin Metro Manila. Bel-Air Village
Association (BAVA), respondent herein, received a letter of request from the petitioner to open
Neptune Street of Bel-Air Village for the use of the public. The said opening of Neptune Street
will be for the safe and convenient movement of persons and to regulate the flow of traffic in
Makati City. This was pursuant to MMDA law or Republic Act No. 7924. On the same day, the
respondent was appraised that the perimeter wall separating the subdivision and
Kalayaan Avenuewould be demolished.

The respondent, to stop the opening of the said street and demolition of the wall, filed
a preliminary injunction and a temporary restraining order. Respondent claimed that the
MMDA had no authority to do so and the lower court decided in favor of the Respondent.
Petitioner appealed the decision of the lower courts and claimed that it has the authority to
open Neptune Street to public traffic because it is an agent of the State that canpractice police
power in the delivery of basic services in Metro Manila.

Issue: Whether or not the MMDA has the mandate to open Neptune Street to public traffic
pursuant to its regulatory and police powers.

Held: The Court held that the MMDA does not have the capacity toexercise police power. Police
power is primarily lodged in the National Legislature. However, police power may
be delegated to government units. Petitioner herein is a development authority and not a
political government unit. Therefore, the MMDA cannot exercise police power because it
cannot be delegated to them. It is not a legislative unit of the government. Republic Act No.
7924 does not empower the MMDA to enact ordinances, approve resolutions and appropriate
funds for the general welfare of the inhabitants of Manila. There is no syllable in the said act
that grants MMDA police power.

It is an agency created for the purpose of laying down policies and coordinating with various
national government agencies, people’s organizations, non-governmental organizations and the
private sector for the efficient and expeditious delivery of basic services in the vast
metropolitan area.
G.R. No. 111097 July 20, 1994
MAYOR PABLO P. MAGTAJAS & THE CITY OF CAGAYAN DE ORO, petitioners,
vs.
PRYCE PROPERTIES CORPORATION, INC. & PHILIPPINE AMUSEMENT AND GAMING
CORPORATION,

FACTS: There was instant opposition when PAGCOR announced the opening of a casino in
Cagayan de Oro City. Civic organizations angrily denounced the project.The trouble arose when
in 1992, flush with its tremendous success in several cities, PAGCOR decided to expand its
operations to Cagayan de Oro City.he reaction of the Sangguniang Panlungsod of Cagayan de
Oro City was swift and hostile. On December 7, 1992, it enacted Ordinance No. 3353.Nor was
this all. On January 4, 1993, it adopted a sterner Ordinance No. 3375-93Pryce assailed the
ordinances before the Court of Appeals, where it was joined by PAGCOR as intervenor and
supplemental petitioner. Their challenge succeeded. On March 31, 1993, the Court of Appeals
declared the ordinances invalid and issued the writ prayed for to prohibit their enforcement

ISSUE: WON Ordinance 3353 and 3375-93 valid

HELD: No
Local Government Code, local government units are authorized to prevent or suppress, among
others, "gambling and other prohibited games of chance." Obviously, this provision excludes
games of chance which are not prohibited but are in fact permitted by law.The rationale of the
requirement that the ordinances should not contravene a statute is obvious.Casino gambling is
authorized by P.D. 1869. This decree has the status of a statute that cannot be amended or
nullified by a mere ordinance. Hence, it was not competent for the Sangguniang Panlungsod of
Cagayan de Oro City to enact Ordinance No. 3353 prohibiting the use of buildings for the
operation of a casino and Ordinance No. 3375-93 prohibiting the operation of casinos. For all
their praiseworthy motives, these ordinances are contrary to P.D. 1869 and the public policy
announced therein and are therefore ultra vires and void.

Basco vs. PAGCOR (G.R. No. 91649) - Digest

Facts:
Petitioner is seeking to annul the Philippine Amusement and Gaming Corporation (PAGCOR)
Charter -- PD 1869, because it is allegedly contrary to morals, public policy and order, and
because it constitutes a waiver of a right prejudicial to a third person with a right recognized
by law. It waived the Manila Cit government’s right to impose taxes and license fees, which is
recognized by law. For the same reason, the law has intruded into the local government’s
right to impose local taxes and license fees. This is in contravention of the constitutionally
enshrined principle of local autonomy.

Issue:
Whether or not Presidential Decree No. 1869 is valid.

Ruling:
1. The City of Manila, being a mere Municipal corporation has no inherent right to impose
taxes. Their charter or statute must plainly show an intent to confer that power, otherwise
the municipality cannot assume it. Its power to tax therefore must always yield to a
legislative act which is superior having been passed upon by the state itself which has the
“inherent power to tax.”

The Charter 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 the 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.

2. The City of Manila’s power to impose license fees on gambling, has long been revoked by
P.D. No. 771 and vested exclusively on the National Government. Therefore, only the
National Government has the power to issue “license or permits” for the operation of
gambling.

3. Local governments have no power to tax instrumentalities of the National Government.

PAGCOR is government owned or controlled corporation with an original charter, P.D. No.
1869. All of its shares of stocks are owned by 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 an
instrumentality of the Government, PAGCOR should be and actually is exempt from local
taxes. Otherwise, its operation might be burdened, impeded or subjected to control by a
mere Local Government.

4. Petitioners also argue that the Local Autonomy Clause of the Constitution will be violated
by P.D. No. 1869.

Article 10, Section 5 of the 1987 Constitution:

“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.”

SC said this is a pointless argument. The power of the local government to “impose taxes and
fees” is always subject to “limitations” which Congress may provide by law. Besides, the
principle of local autonomy under the 1987 Constitution simply means “decentralization.” It
does not make local governments sovereign within the state.
Wherefore, the petition is DISMISSED.

G.R. No. 93252 August 5 1991

FACTS:
Ganzon, after having been issued three successive 60-day of suspension order by Secretary of
Local Government, filed a petition for prohibition with the CA to bar Secretary Santos from
implementing the said orders. Ganzon was faced with 10 administrative complaints on various
charges on abuse of authority and grave misconduct.

ISSUE:
Whether or not the Secretary of Local Government (as the alter ego of the President) has the
authority to suspend and remove local officials.

RULING:
The Constitution did nothing more, and insofar as existing legislation authorizes the President
(through the Secretary of Local Government) to proceed against local officials administratively,
the Constitution contains no prohibition. The Chief Executive is not banned from exercising acts
of disciplinary authority because she did not exercise control powers, but because no law
allowed her to exercise disciplinary authority.

In those case that this Court denied the President the power (to suspend/remove) it was not
because that the President cannot exercise it on account of his limited power, but because the
law lodged the power elsewhere. But in those cases in which the law gave him the power, the
Court, as in Ganzon v. Kayanan, found little difficulty in sustaining him.

We reiterate that we are not precluding the President, through the Secretary of Interior from
exercising a legal power, yet we are of the opinion that the Secretary of interior is exercising
that power oppressively, and needless to say, with a grave abuse of discretion.
As we observed earlier, imposing 600 days of suspension which is not a remote possibility
Mayor Ganzon is to all intents and purposes, to make him spend the rest of his term in
inactivity. It is also to make, to all intents and purposes, his suspension permanent.

[Existence of Standing]

Province of Batangas vs. Romulo, GR No. 152774, May 27, 2004

Ponente: Callejo, Sr.

Doctrine: The crucial legal issue submitted for resolution of this Court entails the proper legal
interpretation of constitutional and statutory provisions. Moreover, the “transcendental
importance” of the case, as it necessarily involves the application of the constitutional principle
on local autonomy, cannot be gainsaid. The nature of the present controversy, therefore,
warrants the relaxation by this Court of procedural rules in order to resolve the case.

 In 1998, then President Estrada issued EO No. 48 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.

WON the petitioner has legal standing or locus standi to file the present suit
Yes.
 The Court holds that the petitioner possesses the requisite standing to maintain the
present suit. The petitioner, a local government unit, seeks relief in order to protect or
vindicate an interest of its own, and of the other LGUs.
 This interest pertains to the LGUs share in the national taxes or the IRA. The petitioners
constitutional claim is, in substance, that the assailed provisos in 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 LGUs of their share in the national taxes.
 Further, the injury that the 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 implementation of the assailed measures. These allegations are
sufficient to grant the petitioner standing to question the validity of the assailed
provisos in the GAAs of 1999, 2000 and 2001, and the OCD resolutions as the petitioner
 clearly has a plain, direct and adequate interest in the manner and distribution of the
IRA among the LGUs.

WHEREFORE, the petition is GRANTED. The assailed provisos in the General Appropriations
Acts of 1999, 2000 and 2001, and the assailed OCD Resolutions, are declared
UNCONSTITUTIONAL.

THE SOLICITOR GENERAL vs. THE METROPOLITAN MANILA AUTHORITY and the MUNICIPALITY
OF MANDALUYONG
G.R. No. 102782; December 11, 1991

CRUZ, J.

Facts:

On July 13, 1990, the Court held that the confiscation of the license plates of motor vehicles for
traffic violations was not among the sanctions that could be imposed by the Metro Manila
Commission under PD 1605 and was permitted only under the conditions laid down by LOI 43 in
the case of stalled vehicles obstructing the public streets. It was there also observed that even
the confiscation of driver's licenses for traffic violations was not directly prescribed by the
decree nor was it allowed by the decree to be imposed by the Commission. No motion for
reconsideration of that decision was submitted (Metropolitan Traffic Command, West Traffic
District vs. Hon. Arsenio M. Gonong).

In a letter dated October 17, 1990, Rodolfo A. Malapira complained to the Court that when he
was stopped for an alleged traffic violation, his driver's license was confiscated by Traffic
Enforcer Angel de los Reyes in Quezon City. Likewise, several letter-complaints were received
regarding removal of front license plate by E. Ramos of the Metropolitan Manila Authority-
Traffic Operations Center and the confiscation of his driver's license by Pat. A.V. Emmanuel of
the Metropolitan Police Command-Western Police District.

On May 1990, the Metropolitan Manila Authority issued Ordinance No. 11, Series of 1991,
authorizing itself "to detach the license plate/tow and impound attended/ unattended/
abandoned motor vehicles illegally parked or obstructing the flow of traffic in Metro Manila."

On July 2, 1991, the Court issued the following resolution stating that the authority to detach
plate/tow and impound attended/unattended/abandoned motor vehicles illegally parked or
obstructing the flow of traffic in Metro Manila by the MMA appears to be in conflict with the
decision of the Court in the case abovementioned where it was held that the license plates of
motor vehicles may not be detached except only under the conditions prescribed in LOI 43.
MMA defended the said ordinance on the ground that it was adopted pursuant to the powers
conferred upon it by EO 392. It particularly cited Section 2 thereof vesting in the Council (its
governing body) the responsibility among others of:
1. Formulation of policies on the delivery of basic services requiring coordination
or consolidation for the Authority; and
2. Promulgation of resolutions and other issuances of metropolitan wide
application, approval of a code of basic services requiring coordination,
and exercise of its rule-making powers.

MMA argued that there was no conflict between the decision and the ordinance because the
latter was meant to supplement and not supplant the latter. It stressed that the decision itself
said that the confiscation of license plates was invalid in the absence of a valid law or
ordinance, which was why Ordinance No. 11 was enacted. MMA sustains Ordinance No. 11,
Series of 1991, under the specific authority conferred upon it by EO 392, and while Ordinance
No. 7, Series of 1988, is justified on the basis of the General Welfare Clause embodied in the
Local Government Code.

Solicitor General expressed the view that the ordinance was null and void because it
represented an invalid exercise of a delegated legislative power. The flaw in the measure was
that it violated existing law, specifically PD 1605, which does not permit, and so impliedly
prohibits, the removal of license plates and the confiscation of driver's licenses for traffic
violations in Metropolitan Manila.

Issue: WON ORDINANCE #11 IS VALID?

Ruling: No. The Court holds that there is a valid delegation of legislative power to promulgate
such measures, it appearing that the requisites of such delegation are present. These requisites
are. 1) the completeness of the statute making the delegation; and 2) the presence of a
sufficient standard. Under the first requirement, the statute must leave the legislature
complete in all its terms and provisions such that all the delegate will have to do when the
statute reaches it is to implement it. As a second requirement, the enforcement may be
effected only in accordance with a sufficient standard, the function of which is to map out the
boundaries of the delegate's authority and thus "prevent the delegation from running riot."

The measures in question are enactments of local governments acting only as agents of the
national legislature. Necessarily, the acts of these agents must reflect and conform to the will of
their principal. To test the validity of such acts in the specific case now before us, we apply the
particular requisites of a valid ordinance as laid down by the accepted principles governing
municipal corporations.

According to Elliot, a municipal ordinance, to be valid: 1) must not contravene the Constitution
or any statute; 2) must not be unfair or oppressive; 3) must not be partial or discriminatory; 4)
must not prohibit but may regulate trade; 5) must not be unreasonable; and 6) must be general
and consistent with public policy.
A careful study of the Gonong decision will show that the measures under consideration do not
pass the first criterion because they do not conform to existing law. The pertinent law is PD
1605. PD 1605 does not allow either the removal of license plates or the confiscation of driver's
licenses for traffic violations committed in Metropolitan Manila. There is nothing in the
following provisions of the decree authorizing the Metropolitan Manila Commission (and now
the Metropolitan Manila Authority) to impose such sanctions.

In fact, the above provisions prohibit the imposition of such sanctions in Metropolitan Manila.
The Commission was allowed to "impose fines and otherwise discipline" traffic violators only
"in such amounts and under such penalties as are herein prescribed," that is, by the decree
itself. Nowhere is the removal of license plates directly imposed by the decree or at least
allowed by it to be imposed by the Commission. Notably, Section 5 thereof expressly provides
that "in case of traffic violations, the driver's license shall not be confiscated." These restrictions
are applicable to the Metropolitan Manila Authority and all other local political subdivisions
comprising Metropolitan Manila, including the Municipality of Mandaluyong.

It is for Congress to determine, in the exercise of its own discretion, whether or not to impose
such sanctions, either directly through a statute or by simply delegating authority to this effect
to the local governments in Metropolitan Manila. Without such action, PD 1605 remains
effective and continues prohibit the confiscation of license plates of motor vehicles (except
under the conditions prescribed in LOI 43) and of driver licenses as well for traffic violations in
Metropolitan Manila.
 PIMENTEL vs. AQUIRRE
G.R. No. 132988
19 JULY 2000

FACTS:
 Subject of this action is Administrative Order No. 372 (AO 372) requires local
government units (LGU) to reduce their expenditures by 25% of their authorized regular
appropriations for non-personal services (Sec. 1); and allows the LGUs to withhold a
portion of their internal revenue allotments.

 Petitioner filed to the SC a petition for certiorari and prohibition, contending that the
President, in issuing the said AO, was in effect exercising the power of control over
LGUs; & that the directive to withhold a portion of their IRA is in contravention of Sec.
286 of the LGC & Sec. 6, Art. X of the Constitution.

ISSUE: Whether Secs. 1 & 4 of AO 372 are valid exercises of the President’s power of
general supervision over LGUs.

HELD: Sec. 1 – YES; Sec. 4 – NO

RATIO:
 The Court held that Sec. 1 of AO 372, being merely an advisory is well within the powers
of the President. It is not a mandatory imposition, and such directive cannot be
characterized as an exercise of the power of control.

 Local fiscal autonomy does not 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. The AO is intended only to advise all
government agencies and instrumentalities to undertake cost-reduction measures that
will help maintain economic stability in the country. It does not contain any sanction in
case of noncompliance.

 The Local Government Code also allows the President to interfere in local fiscal matters,
provided that certain requisites are met:
o (1) an unmanaged public sector deficit of the national government;
o (2) consultations with the presiding officers of the Senate and the House of
Representatives and the presidents of the various local leagues;
 o (3) the corresponding recommendation of the secretaries of the Department of
Finance, Interior and Local Government, and Budget and Management; and
o (4) any adjustment in the allotment shall in no case be less than 30% of the
collection of national internal revenue taxes of the third fiscal year preceding the
current one.

 However, Sec. 4 of AO 372 cannot 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 the Constitution and the Local Government Code. Section 4 which orders
the withholding of a portion of the LGU’s IRA clearly contravenes the Constitution and
the law.

San Juan vs. Civil Service Commisssion

GR No. 92299, 19 April 1991

Facts: The Provincial Budget Officer of Rizal (PBO) was left vacant; thereafter Rizal Governor
San Juan, peititioner, nominated Dalisay Santos for the position and the latter quickly assumed
position. However, Director Abella of Region IV Department of Budget and Management (DBM)
did not endorse the nominee, and recommended private respondent Cecilia Almajose as PBO
on the ground that she was the most qualified. This appointment was subsequently approved
by the DBM. Petitioner protested the appointment of Almajose before the DBM and the Civil
Service Commission who both dismissed his complaints. His arguments rest on his contention
that he has the sole right and privilege to recommend the nominees to the position of PBO and
that the appointee should come only from his nominees. In support thereof, he invokes Section
1 of Executive Order No. 112.

Issue: Whether or not DBM is empowered to appoint a PBO who was not expressly nominated
by the provincial governor.

Held: Under the cited Sec 1 of EO 112, the petitioner's power to recommend is subject to the
qualifications prescribed by existing laws for the position of PBO. Consequently, in the event
that the recommendations made by the petitioner fall short of the required standards, the
appointing authority, public respondent DBM is expected to reject the same. In the event that
the Governor recommends an unqualified person, is the Department Head free to appoint
anyone he fancies?

Petitioner states that the phrase of said law: "upon recommendation of the local chief
executive concerned" must be given mandatory application in consonance with the state policy
of local autonomy as guaranteed by the 1987 Constitution under Art. II, Sec. 25 and Art. X, Sec.
2 thereof. He further argues that his power to recommend cannot validly be defeated by a
mere administrative issuance of public respondent DBM reserving to itself the right to fill-up
any existing vacancy in case the petitioner's nominees do not meet the qualification
requirements as embodied in public respondent DBM's Local Budget Circular No. 31 dated
February 9, 1988.

This case involves the application of a most important constitutional policy and principle, that
of local autonomy. 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 Malacañang and the other
beneficial to local autonomy, the scales must be weighed in favor of autonomy.
The 1935 Constitution clearly limited the executive power over local governments to "general
supervision . . . as may be provided by law." 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. The exercise of greater local autonomy is even more
marked in the present Constitution. Article II, Section 25 provides: "The State shall ensure the
autonomy of local governments"

Thereby, DBM Circular 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.
LEVY D. MACASIANO VS. HONORABLE ROBERTO C. DIOKNO,MUNICIPALITY OF
PARANAQUE,METRO MANILA, PALANYAG KILUSANG BAYAN FOR SERVICE GR No. 97764
August 10, 1992

Facts: On June 13, 1990, the municipality of Paranaque passed an ordinance authorizing the
closure of some streets located at Baclaran, Paranaque, Metro Manila and the establishment
of a flea market thereon. By virtue of this Paranaque Mayor Ferrer was authorized to enter
into a contract to any service cooperative for the establishment, operation, maintenance and
management of flea market and/or vending areas. Because of this purpose, respondent
Palanyag entered into an agreement with the municipality of Paranaque with the obligation
to remit dues to the treasury. Consequently, market stalls were put up by respondent
Palanyag on the said streets.

On September 30, 1990, Brig. Gen Macasiano, PNP Superintendent of Metropolitan

Traffic Command ordered the destruction and confiscation of the stalls. These stalls were
later returned to Palanyag. Petitioner then sent a letter to Palanyag giving the latter 10 days
to discontinue the flea market otherwise the market stalls shall be dismantled. Hence,
respondents filed with the court a joint petition for prohibition and mandamus with damages
and prayer for preliminary injunction, to which the petitioner filed his
memorandum/opposition to the issuance of the writ of preliminary injunction. The court
issued a temporary restraining order to enjoin petitioner from enforcing his letter pending
the hearing on the motion for writ of preliminary injunction.

Issue: Whether an ordinance issued by the municipality of Paranaque authorizing the lease
and use of public streets or thoroughfares as sites for flea market is valid?

Held: Article 424 lays down the basic principle that properties of public domain devoted to
public use and made available to the public in general are outside the commerce of man and
cannot be disposed or leased by the local government unit to private persons. Aside from the
requirement of due process, the closure of the road should be for the sole purpose of
withdrawing the road or other public property from public use when circumstances show that
such property is no longer intended or necessary for public use or public service. When it is
already withdrawn from public use, the property becomes patrimonial property of the local
government unit concerned. It is only then that respondent municipality can use or convey
them for any purpose for which other real property belonging to the local unit concerned
might lawfully used or conveyed.

Those roads and streets which are available to the public in general and ordinarily used
for vehicular traffic are still considered public property devoted to public use. In such case,
the local government has no power to use it for another purpose or to dispose of or lease it
to private persons. Hence the ordinance is null and void.

JUDGE TOMAS C. LEYNES, petitioner, vs. THE COMMISSION ON AUDIT (COA), HON. GREGORIA
S. ONG, DIRECTOR, COMMISSION ON AUDIT and HON. SALVACION DALISAY, PROVINCIAL
AUDITOR, respondents.
G.R. No. 143596
December 11, 2003
Ponente: Justice Corona

This is a petition for certiorari seeking to reverse and set aside the decision of the Commission
on Audit (COA) denying the grant of P1,600 monthly allowance to petitioner Judge Tomas C.
Leynes by the Municipality of Naujan, Oriental Mindoro.

Facts:

1. Petitioner Judge Tomas C. Leynes was formerly assigned to the Municipality of Naujan,
Oriental Mindoro as the sole presiding judge of the Municipal Trial Court. He received:
a. Salary and representation and transportation allowance (RATA) from the SC
b. A monthly allowance of P944 from the local funds of of Naujan starting 1984

2. On March 15, 1993, the Sangguniang Bayan, through Resolution No. 057, sought the
opinion of the Provincial Auditor and the Provincial Budget Officer regarding any
budgetary limitation on the grant of a monthly allowance by the municipality to
petitioner judge.
a. On May 7, 1993, the Sangguniang Bayan unanimously approved Resolution No. 101
increasing petitioner judge’s monthly allowance from P944 to P1,600 starting May
1993.
b. In 1994, the Municipal Government of Naujan again provided for petitioner judge’s
P1,600 monthly allowance in its annual budget which was again approved by the
Sangguniang Panlalawigan and the Office of Provincial Budget and Management of
Oriental Mindoro.
3. On February 17, 1994, Provincial Auditor Salvacion M. Dalisay sent a letter to the
Municipal Mayor and the Sangguniang Bayan of Naujan directing them:
a. To stop the payment of the P1,600 monthly allowance or RATA
b. To require the immediate refund of the amounts previously paid to the judge.

4. She opined that the Municipality of Naujan could not grant RATA to petitioner judge in
addition to the RATA the latter was already receiving from the Supreme Court based on
Section 36, RA No. 7645, General Appropriations Act of 1993, stating that: “No one
shall be allowed to collect RATA from more than one source.”

5. Petitioner judge appealed to COA Regional Director Gregoria S. Ong.

a. COA Reg Dir Ong upheld the opinion of Provincial Auditor Dalisay
b. She added that Resolution No. 101 failed to comply with Section 3 of Local Budget
Circular No. 53 outlining the conditions for the grant of allowances to judges and
other national officials or employees by the local government units, particularly
“That similar allowances/additional compensation are not granted by the national
government to the officials/employees assigned to the LGU.”

6. Petitioner judge appealed the unfavorable resolution of the Regional Director to the
Commission on Audit.
a. Disallowance of the payment of the P1,600 monthly allowance to petitioner was
issued. Thus he received his P1,600 monthly allowance from the Municipality of
Naujan only for the period May 1993 to January 1994.

7. On September 14, 1999, the COA issued its decision affirming the resolution of Regional
Director Gregoria S. Ong. It ruled that:
a. The conflicting provisions of Section 447, Par. (1) (xi) of the Local Government Code
of 1991 (that the finances of the municipality allow the grant thereof) and Section
36 of the General Appropriations Act of 1993 [RA 7645] (No one shall be allowed to
collect RATA from more than one source) have been harmonized by the Local
Budget Circular No. 53 dated 01 September 1993 (provided that similar
allowance/additional compensation are not granted by the national government
to the official/employee assigned to the local government unit), issued by the
Department of Budget and Management pursuant to its powers under Section 25
and Section 327 of the Local Government Code;
b. The subject SB Resolution No. 101 dated 11 May 1993 of the Sangguniang Bayan of
Naujan, Oriental Mindoro is null and void;
c. The Honorable Judge Tomas C. Leynes, being a national government official is
prohibited to receive additional RATA from the local government fund.
 8. Petitioner judge filed a motion for reconsideration but it was denied by the COA. Hence,
this petition.

ISSUE: Whether or not the petitioner judge was entitled to receive the additional allowances
granted to him by the Municipality of Naujan, Oriental Mindoro, in addition to that provided by
the Supreme Court.

HELD:
The Court ruled in favor of petitioner judge.

a. An administrative circular cannot supersede, abrogate, modify or nullify a statute. A

statute is superior to an administrative circular, thus the latter cannot repeal or amend
it.
 In the present case, NCC No. 67, being a mere administrative circular, cannot
repeal a substantive law like RA 7160.

b. Repeal of statutes by implication is not favored, unless it is manifest that the legislature
so intended. The legislature is assumed to know the existing laws on the subject and
cannot be presumed to have enacted inconsistent or conflicting statutes.
 There was no other provision in RA 7645 from which a repeal of Section
447(a)(1)(xi) of RA 7160 could be implied.

c. The presumption against implied repeal becomes stronger when one law is special and
the other is general. (Generalia specialibus non derogant or a general law does not
nullify a specific or special law)
 The reason for this is that the legislature, in passing a law of special character,
considers and makes special provisions for the particular circumstances dealt
with by the special law.

d. The General Appropriations Act (R.A. No. 7645), being a general law, could not have, by
mere implication, repealed Section 447(a)(1)(xi) of the Local Government Code (R.A. No.
7160).

 In this case, RA 7160 (the LGC of 1991) is a special law which exclusively deals
with local government units (LGUs), outlining their powers and functions in
consonance with the constitutionally mandated policy of local autonomy.
 RA 7645 (the GAA of 1993) was a general law which outlined the share in the
national fund of all branches of the national government.
  Therefore, RA 7645 being a general law, could not have, by mere implication,
repealed RA 7160. Rather, RA 7160 should be taken as the exception to RA 7645
in the absence of circumstances warranting a contrary conclusion.

e. In construing NCC No. 67, force and effect should not be narrowly given to isolated and
disjoined clauses of the law but to its spirit, broadly taking all its provisions together in
one rational view.
 Because a statute is enacted as a whole and not in parts or sections, one part is
as important as the others, the statute should be construed and given effect as a
whole. A provision or section which is unclear by itself may be clarified by
reading and construing it in relation to the whole statute.
 Taking NCC No. 67 as a whole, what it seeks to prevent is the dual collection of
RATA by a national official from the budgets of “more than one national agency.”


 NCC No. 67 applies only to the national funds administered by the DBM, not the
local funds of the LGUs to prevent the much-abused practice of multiple
allowances, thus standardizing the grant of RATA by national agencies. By no
stretch of the imagination can NCC No. 67 be construed as nullifying the power
of LGUs to grant allowances to judges under the Local Government Code of
1991. It applies only to the national funds administered by the DBM, not the
local funds of LGUs.

f. To rule against the power of LGUs to grant allowances to judges will threaten the
principle of local autonomy guaranteed by the Constitution.
 The power of LGUs to grant allowances to judges and leaving to their discretion
the amount of allowances they may want to grant, depending on the availability
of local funds ensures the genuine and meaningful local autonomy of LGUs.

g. Section 3, paragraph (e) thereof is invalid.

 Section 3, paragraph (e) of LBC No. 53, by outrightly prohibiting LGUs from
granting allowances to judges whenever such allowances are (1) also granted by
the national government, or (2) similar to the allowances granted by the national
government, violates Section 447(a)(1)(xi) of the Local Government Code of
1991.

h. An ordinance must be presumed valid in the absence of evidence showing that it is not
in accordance with the law.
 The resolution of the Municipality of Naujan granting the P1,600 monthly
allowance to petitioner judge fully complied with the law. Therefore, valid.