LAW ON PUBLIC CORPORATIONS DERRAMAS | BEDA LAW | A.Y.

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OUTLINE # 9

F. FISCAL AUTONOMY AND SOURCES OF FUNDS

1. Sources of Funds

Article X, Section 5, 6, 7 1987 Constitution

Section 5 Each local government unit shall have the power to create its own sources of revenues and to levy taxes,
fees and charges subject to such guidelines and limitations as the Congress may provide, consistent with the
basic policy of local autonomy. Such taxes, fees, and charges shall accrue exclusively to the local
governments.
Section 6 Local government units shall have a just share, as determined by law, in the national taxes which shall be
automatically released to them.
Section 7 Local governments shall be entitled to an equitable share in the proceeds of the utilization and development
of the national wealth within their respective areas, in the manner provided by law, including sharing the
same with the inhabitants by way of direct benefits.

2. Fiscal Autonomy
Cases:
PROVINCE OF BATANGAS VS. ROMULO, G.R. NO. 152774, MAY 27, 2004
 Local autonomy includes both administrative and fiscal autonomy.
 The provisions in the General Appropriation Act creating the Local Government Special Equalization Fund and
authorizing the non-release of the full 40% to all LGUs are inappropriate provisions/riders. Further, an
appropriations act cannot amend a substantive law, i.e., 1991 LGC.

PIMENTEL VS. AGUIRRE, G.R. NO. 132988, JULY 19, 2000

 LGUs enjoy fiscal autonomy. The constitutional basis of fiscal autonomy is Section 5, Article X of the 1987
Constitution.
 Fiscal autonomy means that LGUs have the:
(1) 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 (2) power to allocate their resources in accordance with their own
priorities. (3) It extends to the preparation of their budgets, and local officials in turn-have to work within the
constraints thereof.
 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.
 The President cannot withhold 10% of the IRA without complying with the requirements under Section 284 of the
1991 LGC. This would be violative of local autonomy and fiscal autonomy.

VILLAFUERTE V. ROBREDO, G.R. NO. G.R. NO. 195390, DECEMBER 10, 2014
 Fiscal autonomy does not leave LGUs with unbridled discretion in the disbursement of public funds. They remain
accountable to their constituency. Thus, the DILG can issue circulars regarding the full disclosure of local budgets and
finances and list of expenses which the internal revenue allotment (IRA) can be used and which requires publication in
biddings, since these are mere reiterations of statutory provisions.
 Local autonomy granted to LGUs does not completely sever them from the national government or turn them into
impenetrable states. Autonomy does not make local governments sovereign within the state. Thus, notwithstanding the
local fiscal autonomy being enjoyed by LGUs, they are still under the supervision of the President and may be held
accountable for malfeasance or violations of existing laws

3. Internal Revenue Allotment

Section 6 Local government units shall have a just share, as determined by law, in the national taxes which shall be
automatically released to them.
Section 284-286, 1991 LGC
Section 284 Allotment of Internal Revenue Taxes. – Local government units shall have a share in the national internal
revenue taxes based on the collection of the third fiscal year preceding the current fiscal year as follows:
(a) On the first year of the effectivity of this Code, thirty percent (30%);
(b) On the second year, thirty-five percent (35%); and
(c) On the third year and thereafter, forty percent (40%).
Provided, That in the event that the national government incurs an unmanageable public sector deficit , the
President of the Philippines is hereby authorized, upon the recommendation of Secretary of Finance,

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Secretary of Interior and Local Government and Secretary of Budget and Management, and subject to
consultation with the presiding officers of both Houses of Congress 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: Provided, further, That in the first year of the
effectivity of this Code, the local government units shall, in addition to the thirty percent (30%) internal
revenue allotment which shall include the cost of devolved functions for essential public services, be
entitled to receive the amount equivalent to the cost of devolved personal services
Section 285 Allocation to Local Government Units. – The share of local government units in the internal revenue
allotment shall be collected in the following manner:
(a) Provinces - Twenty-three percent (23%);
(b) Cities - Twenty-three percent (23%);
(c) Municipalities - Thirty-four percent (34%); and
(d) Barangays - Twenty percent (20%)
Provided, however, That the share of each province, city, and municipality shall be determined on the basis
of the following formula:
(a) Population - Fifty percent (50%);
(b) Land Area - Twenty-five percent (25%); and
(c) Equal sharing - Twenty-five percent (25%)
Provided, further, That the share of each barangay with a population of not less than one hundred (100)
inhabitants shall not be less than Eighty thousand (P80,000.00) per
annum chargeable against the twenty percent (20%) share of the barangay from the internal revenue
allotment, and the balance to be allocated on the basis of the following formula:
(a) On the first year of the effectivity of this Code:
(1) Population - Forty percent (40%); and
(2) Equal sharing - Sixty percent (60%)
(b) On the second year:
(1) Population - Fifty percent (50%); and
(2) Equal sharing - Fifty percent (50%)
(c) On the third year and thereafter:
(1) Population - Sixty percent (60%); and
(2) Equal sharing - Forty percent (40%).
Provided, finally, That the financial requirements of barangays created by local government units after the
effectivity of this Code shall be the responsibility of the local government unit concerned.
Section 286 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 five (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.
(b) Nothing in this Chapter shall be understood to diminish the share of local government units under
existing laws.

Cases:
MANDANAS V. OCHOA, G.R. NO. 199802, JULY 3, 2018
 IRA of LGUs should be based on “national taxes” and not “national internal revenue taxes”
ALVAREZ VS. GUINGONA, G.R. NO. 118303, JANUARY 31, 1996
 Income under the 1991 LGC pertains to all funds of the LGU including the Internal Revenue Allotment.
 The IRA of LGUs: (1) forms part of the income of local government units; (2) forms part of the gross accretion of the
funds of the local government units; (3) regularly and automatically accrues to the local treasury without need of
further action on the part of the LGU; (4) is a regular and recurring item of income; (5) accrues to the general fund of
the LGUs; (6) is used to finance local operations subject to modes provided by the 1991 LGC and its implementing
rules; and (7) is included in the computation of the average annual income for purposes of conversion of LGUs.
CIVIL SERVICE COMMISSION VS. DEPARTMENT OF BUDGET AND MANAGEMENT, G.R. NO. 158791, JULY
22, 2005
 A “no report, no release” policy may not be validly enforced against offices vested with fiscal autonomy. The
automatic release provision found in the Constitution means that LGUs cannot be required to perform any act to
receive the “just share” accruing to them from the national coffers

4. Share in National Wealth Proceeds

Section 7 Local governments shall be entitled to an equitable share in the proceeds of the utilization and

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development of the national wealth within their respective areas, in the manner provided by law, including
sharing the same with the inhabitants by way of direct benefits.
Section 290-292, 1991 LGC
Section 290 Section 290. Amount of Share of Local Government Units. - Local government units shall, in addition to the
internal revenue allotment, have a share of forty percent (40%) of the gross collection derived by the
national government from the preceding fiscal year from mining taxes, royalties, forestry and fishery
charges, and such other taxes, fees, or charges, including related surcharges, interests, or fines, and from its
share in any co-production, joint venture or production sharing agreement in the utilization and development
of the national wealth within their territorial jurisdiction.
Section 291 Section 291. Share of the Local Governments from any Government Agency or Owned or Controlled
Corporation. - Local government units shall have a share based on the preceding fiscal year from the
proceeds derived by any government agency or government-owned or controlled corporation engaged in the
utilization and development of the national wealth based on the following formula whichever will produce a
higher share for the local government unit:
(a) One percent (1%) of the gross sales or receipts of the preceding calendar year; or
(b) Forty percent (40%) of the mining taxes, royalties, forestry and fishery charges and such other taxes, fees
or charges, including related surcharges, interests, or fines the government agency or government owned or
controlled corporation would have paid if it were not otherwise exempt.
Section 292 Section 292. Allocation of Shares. - The share in the preceding Section shall be distributed in the following
manner:
(a) Where the natural resources are located in the province:
(1) Province - Twenty percent (20%);
(2) Component City/Municipality - Forty-five percent (45%); and
(3) Barangay - Thirty-five percent (35%)
Provided, however, That where the natural resources are located in two (2) or more provinces, or in two (2)
or more component cities or municipalities or in two (2) or more
barangays, their respective shares shall be computed on the basis of:
(1) Population - Seventy percent (70%); and
(2) Land area - Thirty percent (30%)
(b) Where the natural resources are located in a highly urbanized or independent component city:
(1) City - Sixty-five percent (65%); and
(2) Barangay - Thirty-five percent (35%)
Provided, however, That where the natural resources are located in such two (2) or more cities, the
allocation of shares shall be based on the formula on population and land area as specified in paragraph (a)
of this Section.

5. Power of Taxation

Section 5 Each local government unit shall have the power to create its own sources of revenues and to levy taxes,
fees and charges subject to such guidelines and limitations as the Congress may provide, consistent with the
basic policy of local autonomy. Such taxes, fees, and charges shall accrue exclusively to the local
governments.
Section 186-187, 1991 LGC
Section 186 Power To Levy Other Taxes, Fees or Charges. - Local government units may exercise the power to levy
taxes, fees or charges on any base or subject not otherwise specifically enumerated herein or taxed under the
provisions of the National Internal Revenue Code, as amended, or other applicable laws: Provided, That the
taxes, fees, or charges shall not be unjust, excessive, oppressive, confiscatory or contrary to declared national
policy: Provided, further, That the ordinance levying such taxes, fees or charges shall not be enacted without
any prior public hearing conducted for the purpose.
Section 187 Procedure for Approval and Effectivity of Tax, Ordinances and Revenue Measures; Mandatory Public
Hearings. - The procedure for approval of local tax ordinances and revenue measures shall be in accordance
with the provisions of this Code: Provided, That public hearings shall be conducted for the purpose prior to
the enactment thereof: Provided, further, That any question on the constitutionality or legality of tax
ordinances or revenue measures may be raised on appeal within thirty (30) days from the effectivity thereof
to the Secretary of Justice who shall render a decision within sixty (60) days from the date of receipt of the
appeal: Provided, however, That such appeal shall not have the effect of suspending the effectivity of the
ordinance and the accrual and payment of the tax, fee, or charge levied therein: Provided, finally, That within
thirty (30) days after receipt
of the decision or the lapse of the sixty-day period without the Secretary of Justice acting upon the appeal,
the aggrieved party may file appropriate proceedings with a court of competent jurisdiction.

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Cases:
FERRER VS. BAUTISTA, G.R. NO. 210551, JUNE 30, 2015
 LGUs have no inherent power to tax except to the extent that such power might be delegated to them either by the basic
law or by the statute. Under the now prevailing Constitution, where there is neither a grant nor a prohibition by
statute, the tax power must be deemed to exist although Congress may provide statutory limitations and
guidelines. The basic rationale for the current rule is to safeguard the viability and self-sufficiency of local government
units by directly granting them general and broad tax powers. Nevertheless, the fundamental law did not intend the
delegation to be absolute and unconditional; the constitutional objective obviously is to ensure that, while the local
government units are being strengthened and made more autonomous, the legislature must still see to it that (a) the
taxpayer will not be over-burdened or saddled with multiple and unreasonable impositions; (b) each local government
unit will have its fair share of available resources; (c) the resources of the national government will not be unduly
disturbed; and (d) local taxation will be fair, uniform, and just.
 An LGU is empowered as well to apply its resources and assets for productive, developmental, or welfare purposes,
in the exercise or furtherance of their governmental or proprietary powers and functions.
 To pass judicial scrutiny, a regulatory fee must not produce revenue in excess of the cost of the regulation because
such fee will be construed as an illegal tax when the revenue generated by the regulation exceeds the cost of the
regulation.
 The mayor has the ministerial duty to ensure that all taxes and other revenues of the city are collected, and that city
funds are applied to the payment of expenses and settlement of obligations of the city, in accordance with law or
ordinance. On the other hand, under the LGC, all local taxes, fees, and charges shall be collected by the provincial, city,
municipal, or barangay treasurer, or their duly-authorized deputies, while the assessor shall take charge, among others,
of ensuring that all laws and policies governing the appraisal and assessment of real properties for taxation purposes are
properly executed. Thus, a writ of prohibition may be issued against them to desist from further proceeding in the
action or matter specified in the petition
 The socialized housing tax charged by the city is a tax which is within its power to impose. Aside from the specific
authority vested by Section 43 of the UDHA, cities are allowed to exercise such other powers and discharge such other
functions and responsibilities as are necessary, appropriate, or incidental to efficient and effective provision of the basic
services and facilities which include, among others, programs and projects for low-cost housing and other mass
dwellings. The collections made accrue to its socialized housing programs and projects. The tax is not a pure exercise
of taxing power or merely to raise revenue; it is levied with a regulatory purpose. The levy is primarily in the exercise
of the police power for the general welfare of the entire city. It is greatly imbued with public interest
 The socialized housing tax imposed by the city is not confiscatory or oppressive since the tax being imposed therein is
below what the UDHA actually allows.
 The garbage fee is a charge fixed for the regulation of an activity. It is not a tax and cannot violate the rule on double
taxation

MACTAN CEBU INTERNATIONAL AIRPORT AUTHORITY VS. MARCOS, G.R. NO. 120082, SEPTEMBER 11,
1996
 The power to tax is primarily vested in the Congress; however, in our jurisdiction, it may be exercised by local
legislative bodies, no longer merely by virtue of a valid delegation as before, but pursuant to direct authority
conferred by Section 5, Article X of the 1987 Constitution. The exercise of the power may be subject to such
guidelines and limitations as the Congress may provide which, however, must be consistent with the basic policy of
local autonomy.

G. LOCAL GOVERNMENT OFFICIALS

1. Term of Office
Chapter X, Section 8, 1987 Constitution:

R.A. No. 9164

Cases:
ABUNDO V. VEGA, G.R. NO. 201716, JANUARY 8, 2013
 As summarized in the case of Abundo v. Vega (G.R. No. 201716, January 8, 2013), there is involuntary interruption
of a local government officials’ term in the following instances:
a) When a permanent vacancy occurs in an elective position and the official merely assumed the position
pursuant to the rules on succession under the LGC, then his service for the unexpired portion of the term of
the replaced official cannot be treated as one full term as contemplated under the subject constitutional and
statutory provision that service cannot be counted in the application of any term limit (Borja, Jr.). If the

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official runs again for the same position he held prior to his assumption of the higher office, then his
succession to said position is by operation of law and is considered an involuntary severance or interruption
(Montebon).
b) An elective official, who has served for three consecutive terms and who did not seek the elective position for
what could be his fourth term, but later won in a recall election, had an interruption in the continuity of the
official’s service. For, he had become in the interim, i.e., from the end of the 3rd term up to the recall
election, a private citizen (Adormeo and Socrates).
c) The abolition of an elective local office due to the conversion of a municipality to a city does not, by itself,
work to interrupt the incumbent official’s continuity of service (Latasa).
d) Preventive suspension is not a term-interrupting event as the elective officer’s continued stay and entitlement
to the office remain unaffected during the period of suspension, although he is barred from exercising the
functions of his office during this period (Aldovino, Jr.).
e) When a candidate is proclaimed as winner for an elective position and assumes office, his term is interrupted
when he loses in an election protest and is ousted from office, thus disenabling him from serving what would
otherwise be the unexpired portion of his term of office had the protest been dismissed (Lonzanida and
Dizon). The break or interruption need not be for a full term of three years or for the major part of the 3-year
term; an interruption for any length of time, provided the cause is involuntary, is sufficient to break the
continuity of service (Socrates, citing Lonzanida).
f) When an official is defeated in an election protest and said decision becomes final after said official had
served the full term for said office, then his loss in the election contest does not constitute an interruption
since he has managed to serve the term from start to finish. His full service, despite the defeat, should be
counted in the application of term limits because the nullification of his proclamation came after the
expiration of the term (Ong and Rivera).
 The two-year period during which a mayor’s opponent was serving as mayor should be considered as an
interruption which effectively removed the mayor’s case from the ambit of the three-term limit rule. That two-year
period is therefore not considered a term for the mayor.

BORJA VS. COMELEC, G.R. NO. 133495, SEPTEMBER 03, 1998.

 The term limit for elective local officials must be taken to refer to the right to be elected as well as the right to serve
in the same elective position. Consequently, it is not enough that an individual has served three consecutive terms in
an elective local office, he/she must also have been elected to the same position for the same number of times before
the disqualification can apply. Thus, the term of a vice-mayor who became the mayor by succession is not considered a
term as mayor for purposes of the 3-term rule.
ALDOVINO, JR. VS. COMMISSION ON ELECTIONS, G.R. NO. 184836, DECEMBER 23, 2009
 Preventive suspension, by its nature, does not involve an effective interruption of a term and should therefore not
be a reason to avoid the 3-term limitation. Because it is imposed by operation of law, preventive suspension does not
involve a voluntary renunciation; it merely involves the temporary incapacity to perform the service that an
elective office demands. The best indicator of the suspended official’s continuity in office is the absence of a
permanent replacement and the lack of the authority to appoint one since no vacancy exists.
SOCRATES VS. COMELEC, G.R. NO. 154512, NOVEMBER 12, 2002
 A person who has run for three consecutive terms may run in a recall election so long as the said candidate is not
running for immediate reelection following his/her three consecutive terms. Term limits should be construed
strictly to give the fullest possible effect to the right of the electorate to choose their leaders. Thus, the 3-term limit for
local elected officials is not violated when a local official wins in a recall election for mayor after serving three full
terms as mayor since said election is not considered immediate reelection
ALBANIA V. COMELEC, G.R. NO. 226792, 7 JUNE 2017

BOLOS VS. COMELEC, G.R. NO. 184082, MARCH 17, 2009

 A punong barangay serving his/her third term of office who ran, won and assumed office as sanggunian bayan
member is deemed to have voluntarily relinquished his/her office as punong barangay for purposes of the three-term
rule
LATASA VS. COMELEC, G.R. NO. 154829, DECEMBER 10, 2003
 A 3-term mayor of a municipality converted into a city on the 3rd term of the mayor cannot seek office as a city
mayor in the 1st elections of city officials considering the area and inhabitants of the locality are the same and that the
municipal mayor continued to hold office until such time as city elections are held. There was no involuntary
renunciation on the part of the municipal mayor at any time during the three terms. While the city acquired a new
corporate existence separate and distinct from that of the municipality, this does not mean that for the purpose of
applying the constitutional provision on term limitations, the office of the municipal mayor would be construed as
different from that of the office of the city mayor

2. Power of Local Officials

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1991 LGC
Section 465 Too long; see codal
Section 455
Section 444

3. Ban on Dual Positions

Cases:
FLORES VS. DRILON, G.R. NO. 104732, JUNE 22, 1993
 A city mayor cannot be appointed to the position of chairperson of the Subic Bay Metropolitan Authority since
such office is not an ex-officio post or attached to the office of the mayor. This provision expresses the “policy
against the concentration of several public positions in one person, so that a public officer or employee may serve full-
time with dedication and thus be efficient in the delivery of public services

4. Vacancies and Succession

Sections 44-46, 1991 LGC.

Section 44 Governor, Vice-Governor, Mayor, and Vice-Mayor. - If a permanent vacancy occurs in the office of the
governor or mayor, the vice-governor or vice-mayor concerned shall become the governor or mayor. If a
permanent vacancy occurs in the offices of the governor, vice-governor, mayor, or vice-mayor, the highest
ranking sanggunian member or, in case of his permanent inability, the second highest ranking sanggunian
member, shall become the governor, vice-governor, mayor or vice-mayor, as the case may be. Subsequent
vacancies in the said office shall be filled automatically by the other sanggunian members according to their
ranking as defined herein.
(b) If a permanent vacancy occurs in the office of the punong barangay, the highest ranking sanggunian
barangay member or, in case of his permanent inability, the second highest ranking sanggunian member, shall
become the punong barangay.
(c) A tie between or among the highest ranking sanggunian members shall be resolved by the drawing of lots.
(d) The successors as defined herein shall serve only the unexpired terms of their predecessors.
For purposes of this Chapter, a permanent vacancy arises when an elective local official fills a higher vacant
office, refuses to assume office, fails to qualify, dies, is removed from office, voluntarily resigns, or is
otherwise permanently incapacitated to discharge the functions of his office.
For purposes of succession as provided in the Chapter, ranking in the sanggunian shall be determined on the
basis of the proportion of votes obtained by each winning candidate to the total number of registered voters in
each district in the immediately preceding local election.
Section 45 Section 45. Permanent Vacancies in the Sanggunian. -
(a) Permanent vacancies in the sanggunian where automatic succession provided above do not apply shall be
filled by appointment in the following manner:
(1) The President, through the Executive Secretary, in the case of the sangguniang panlalawigan and
the sangguniang panlungsod of highly urbanized cities and independent component cities;
(2) The governor, in the case of the sangguniang panlungsod of component cities and the sangguniang
bayan;
(3) The city or municipal mayor, in the case of sangguniang barangay, upon recommendation of the
sangguniang barangay concerned.
(b) Except for the sangguniang barangay, only the nominee of the political party under which the sanggunian
member concerned had been elected and whose elevation to the position next higher in rank created the last
vacancy in the sanggunian shall be appointed in the manner hereinabove provided. The appointee shall come
from the same political party as that of the sanggunian member who caused the vacancy and shall serve the
unexpired term of the vacant office. In the appointment herein mentioned, a nomination and a certificate of
membership of the appointee from the highest official of the political party concerned are conditions sine
qua non, and any appointment without such nomination and certification shall be null and void ab initio and
shall be a ground for administrative action against the official responsible therefore.
(c) In case or permanent vacancy is caused by a sanggunian member who does not belong to any political
party, the local chief executive shall, upon recommendation of the sanggunian concerned, appoint a qualified
person to fill the vacancy.
(d) In case of vacancy in the representation of the youth and the barangay in the sanggunian, said vacancy
shall be filled automatically by the official next in rank of the organization concerned.
Section 46 Section 46. Temporary Vacancy in the Office of the Local Chief Executive. -
(a) When the governor, city or municipal mayor, or punong barangay is temporarily incapacitated to perform
his duties for physical or legal reasons such as, but not limited to, leave of absence, travel abroad, and

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suspension from office, the vice-governor, city or municipal vice-mayor, or the highest ranking sangguniang
barangay member shall automatically exercise the powers and perform the duties and functions of the local
chief executive concerned, except the power to appoint, suspend, or dismiss employees which can only be
exercised if the period of temporary incapacity exceeds thirty (30) working days.
(b) Said temporary incapacity shall terminate upon submission to the appropriate sanggunian of a written
declaration by the local chief executive concerned that he has reported back to office. In cases where the
temporary incapacity is due to legal causes, the local chief executive concerned shall also submit necessary
documents showing that said legal causes no longer exist.
(c) When the incumbent local chief executive is traveling within the country but outside his territorial
jurisdiction for a period not exceeding three (3) consecutive days, he may designate in writing the officer-in-
charge of the said office. Such authorization shall specify the powers and functions that the local official
concerned shall exercise in the absence of the local chief executive except the power to appoint, suspend, or
dismiss employees.
(d) In the event, however, that the local chief executive concerned fails or refuses to issue such authorization,
the vice-governor, the city or municipal vice-mayor, or the highest ranking sangguniang barangay member, as
the case may be, shall have the right to assume the powers, duties, and functions of the said office on the
fourth (4th) day of absence of the said local chief executive, subject to the limitations provided in subsection
(c) hereof.
(e) Except as provided above, the local chief executive shall in no case authorize any local official to assume
the powers, duties, and functions of the office, other than the vice-governor, the city or municipal vice-mayor,
or the highest ranking sangguniang barangay member, as the case may be.

Cases:
GAMBOA VS. AGUIRRE, ET. AL., G.R. NO. 134213, JULY 20, 1999
 When the Vice-Governor exercises the powers and duties of the Office of the Governor, he/she does not assume
the latter office. He/she only acts as the Governor but does not ‘become’ the Governor. His/her assumption of the
powers of the provincial Chief Executive does not create a permanent vacuum or vacancy in his/her position as the
Vice-Governor. But he/she does temporarily relinquish the powers of the Vice-Governor, including the power to
preside over the sessions of the sangguniang panlalawigan.
 Absence should be reasonably construed to mean ‘effective’ absence, i.e., one that renders the officer concerned
powerless, for the time being, to discharge the powers and prerogatives of his/her office. There is no vacancy
whenever the office is occupied by a legally qualified incumbent. A sensu contrario, there is a vacancy when there
is no person lawfully authorized to assume and exercise at present the duties of the office

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VI. ACCOUNTABILITY OF LGUs AND OFFICIALS

1. Liability of LGUs

Cases:
GONTANG V. ALAYAN, G.R. NO. 191691, JANUARY 16, 2013
 In the discharge of governmental functions, municipal corporations are responsible for the acts of its officers ,
except if and when, and only to the extent that, they have acted by authority of the law, and in conformity with the
requirements thereof.
 When personal liability on the part of local government officials is sought, they may properly secure the services of
private counsel
GUILATCO VS. DAGUPAN, G.R. NO. 61516, MARCH 21, 1989
 An LGU is liable for injuries sustained due to defective roads and manholes. For liability to arise under Article
2189 of the Civil Code, ownership of the roads, streets, bridges, public buildings and other public works is not a
controlling factor, it being sufficient that a province, city or municipality has control or supervision thereof

2. Liability of Local Officials

Section 60 Grounds for Disciplinary Actions. - An elective local official may be disciplined, suspended, or removed
from office on any of the following grounds:
(a) Disloyalty to the Republic of the Philippines;
(b) Culpable violation of the Constitution;
(c) Dishonesty, oppression, misconduct in office, gross negligence, or dereliction of duty;
(d) Commission of any offense involving moral turpitude or an offense punishable by at least prision mayor;
(e) Abuse of authority;
(f) Unauthorized absence for fifteen (15) consecutive working days, except in the case of members of the
sangguniang panlalawigan, sangguniang panlungsod, sangguniang bayan, and sangguniang barangay;
(g) Application for, or acquisition of, foreign citizenship or residence or the status of an immigrant of
another country; and
(h) Such other grounds as may be provided in this Code and other laws.
An elective local official may be removed from office on the grounds enumerated above by order of the
proper court.

Cases:
JOSON VS. TORRES, G.R. NO. 131255, MAY 20, 1998
 The President’s power of general supervision means no more than the power of ensuring that laws are faithfully
executed, or that subordinate officers act within the law. Supervision is not incompatible with discipline. The power
to discipline and ensure that the laws be faithfully executed must be construed to authorize the President to order an
investigation of the act or conduct of local officials when in his/her opinion the good of the public service so requires.
 Jurisdiction over administrative disciplinary actions against elective local officials is lodged in two authorities: the
Disciplining Authority and the Investigating Authority. The Disciplinary Authority may constitute a Special
Investigating Committee in lieu of the SILG. With respect to a provincial governor, the disciplining Authority is the
President of the Philippines, whether acting by himself/herself or through the Executive Secretary.
 The SILG is the Investigating Authority, who may act himself/ herself or constitute and Investigating Committee.
The Secretary of the Department, however, is not the exclusive Investigating Authority. In lieu of the Department
Secretary, the Disciplining Authority may designate a Special Investigating Committee.
 The President has the power to discipline erring local elective officials. The power to discipline is not incompatible
with supervision
SALALIMA VS. GUINGONA, G.R. NO. 117589-92, MAY 22, 1996
 An “administrative offense” means every act or conduct or omission which amounts to, or constitutes, any of the
grounds for disciplinary action.
 Only the courts can remove a local elective official. The President and higher supervising LGU have no such authority.
The President may suspend an erring provincial elected official who committed several administrative offenses for an
aggregate period exceeding six months provided that each administrative offense, the period of suspension does not
exceed the 6-month limit.
 A public official cannot be removed for administrative misconduct committed during a prior term since his/her
re-election to office operates as a condonation. To do otherwise would be to deprive the people of their right to elect
their officers. When the people have elected a person to office, it must be assumed that they did this with knowledge of
his/her life and character that they disregarded or forgave his/her fault, if he/she had been guilty of any.
MIRANDA VS. SANDIGANBAYAN, G.R. NO. 154098, JULY 27, 2005

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A mayor who continues to perform the functions of the office despite the fact that he/she is under preventive
suspension usurps the authority of the Office of the Mayor and is liable for violation of Section 13 of the Anti-Graft
and Corrupt Practices Act.
 Section 63 of the 1991 LGC which provides for a 60-day maximum period for preventive suspension for a single
offense does not govern preventive suspensions imposed by the Ombudsman. Under the Ombudsman Act, the
preventive suspension shall continue until the case is terminated by the Office of the Ombudsman but not more
than six months
VARGAS VS. CAJUCOM, G.R. NO. 171095, JUNE 22, 2015
 If the enforcement of a writ of execution would be limited to one option out of three provided in the LGC (i.e.,
demolition of the structures), it is not due to any defect in the writ itself, but to the circumstances of the case and the
situation of the parties at the time of execution. Thus, the writ would still be valid.
 The writ was directed at the mayor not in his personal capacity, but in his capacity as municipal mayor, so that it is
not irregular whether it was served upon him during his earlier term or in his subsequent one.

3. Administrative Proceedings

Section 61 Section 61. Form and Filing of Administrative Complaints. - A verified complaint against any erring local
elective official shall be prepared as follows:
(a) A complaint against any elective official of a province, a highly urbanized city, an independent
component city or component city shall be filed before the Office of the President;
(b) A complaint against any elective official of a municipality shall be filed before the sangguniang
panlalawigan whose decision may be appealed to the Office of the President; and
(c) A complaint against any elective barangay official shall be filed before the sangguniang panlungsod or
sangguniang bayan concerned whose decision shall be final and executory.

Cases:
BALINDONG VS. DACALOS, G.R. NO. 158874, NOVEMBER 10, 2004
 Under Section 61 of the 1991 LGC, a complaint against any elective official of a municipality shall be filed before the
sangguniang panlalawigan whose decision may be appealed to the Office of the President.
MALINAO VS. REYES, G.R. NO. 117618, MARCH 29, 1996
 The voting following the deliberation of the members of the sanggunian in administrative cases does not constitute the
decision unless this was embodied in an opinion prepared by one of them and concurred in by the majority. Until
they have signed the opinion and the decision is promulgated, the councilors are free to change their votes. No notice
of the session where a decision of the sanggunian is to be promulgated on the administrative case is required to be
given to the any person. The deliberation of the sanggunian is an internal matter.
 An administrative case has become moot and academic as a result of the expiration of term of office of an elective
local official during which the act complained of was allegedly committed. Proceedings against respondent are
therefor barred by his/her re-election

4. Penalties

Cases:
SANGGUNIANG BARANGAY OF DON MARIANO MARCOS, BAYOMBONG VS. PUNONG BARANGAY
MARTINEZ, G.R. NO. 170626, MARCH 3, 2008
 The sangguniang bayan is not empowered to remove an elective local official from office. Section 60 of the 1991 LGC
conferred exclusively on the courts such power. Thus, if the acts allegedly committed by a barangay official are of a
grave nature and, if found guilty, would merit the penalty of removal from office, the case should be filed with the
regional trial court.

5. Preventive Suspension

Section 63 Preventive Suspension. -

(a) Preventive suspension may be imposed:
(1) By the President, if the respondent is an elective official of a province, a highly urbanized or an
independent component city;
(2) By the governor, if the respondent is an elective official of a component city or municipality; or
(3) By the mayor, if the respondent is an elective official of the barangay.
(b) Preventive suspension may be imposed at any time after the issues are joined, when the evidence of guilt
is strong, and given the gravity of the offense, there is great probability that the continuance in office of the
respondent could influence the witnesses or pose a threat to the safety and integrity of the records and other
evidence: Provided, That, any single preventive suspension of local elective officials shall not extend beyond

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sixty (60) days: Provided, further, That in the event that several administrative cases are filed against an
elective official, he cannot be preventively suspended for more than ninety (90) days within a single year on
the same ground or grounds existing and known at the time of the first suspension.
(c) Upon expiration of the preventive suspension, the suspended elective official shall be deemed reinstated in
office without prejudice to the continuation of the proceedings against him, which shall be terminated within
one hundred twenty (120) days from the time he was formally notified of the case against him. However, if
the delay in the proceedings of the case is due to his fault, neglect, or request, other than the appeal duly filed,
the duration of such delay shall not be counted in computing the time of termination of the case.
(d) Any abuse of the exercise of the power of preventive suspension shall be penalized as abuse of authority.

Cases:
QUIMBO VS. GERVACIO, G.R. NO. 155620, AUGUST 09, 2005
 The purpose of the suspension order is to prevent the accused from using his/her position and the powers and
prerogatives of his/her office to influence potential witnesses or tamper with records which may be vital in the
prosecution of the case against him/her. If after such investigation, the charge is established and the person
investigated is found guilty of acts warranting his/her suspension or removal, then he/she is suspended, removed or
dismissed. This is the penalty. Not being a penalty, the period within which one is under preventive suspension is not
considered part of the actual penalty of suspension. Thus, service of the preventive suspension cannot be credited as
service of penalty.
CARABEO VS. COURT OF APPEALS, G.R. NOS. 178000/ 178003, DECEMBER 4, 2009
 The rule under the Ombudsman Act of 1989 is different. Ombudsman Act of 1989 does not require that notice and
hearing precede the preventive suspension of an erring official. Only two requisites must concur to render the
preventive suspension order valid. First, there must a prior determination by the Ombudsman that the evidence of
respondent’s guilt is strong. Second, (1) the offense charged must involve dishonesty, oppression, grave misconduct or
neglect in the performance of duty; (2) the charges would warrant removal from the service; or (3) the respondent’s
continued stay in the office may prejudice the case filed against him.

6. Effect of Re-election

Cases:
SALUMBIDES VS. OFFICE OF THE OMBUDSMAN, G.R. NO.180917, APRIL 23, 2010
 The electorate’s condonation of the previous administrative infractions of reelected officials cannot be extended
to that of reappointed coterminous employees. In the latter’s case, there is neither subversion of the sovereign will
nor disenfranchisement of the electorate to speak of. It is the populace’s will, not the whim of the appointing authority,
that could extinguish an administrative liability.

7. Doctrine of Condonation

Cases:
OMBUDSMAN CARPIO-MORALES V. CA AND BINAY, G.R. NO. 217126-27, NOVEMBER 10, 2015

VII. People’s Participation

1. Initiative and Referendum

Section 120 Local Initiative Defined. - Local initiative is the legal process whereby the registered voters of a local
government unit may directly propose, enact, or amend any ordinance.
Section 121 Who May Exercise. - The power of local initiative and referendum may be exercised by all registered voters
of the provinces, cities, municipalities, and barangays.

Cases:
SUBIC BAY METROPOLITAN AUTHORITY VS. COMELEC, G.R. NO. 125416, SEPTEMBER 26, 1996
 Initiative is resorted to or initiated by the people directly either because the law-making body fails or refuses to enact
the law, ordinance, resolution or act that they desire or because they want to amend or modify one already existing. On
the other hand, in a local referendum, the law-making body submits to the registered voters of its territorial
jurisdiction, for approval or rejection, any ordinance or resolution which is duly enacted or approved by such law-
making authority.

2. Recall

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Section 69 By Whom Exercised. - The power of recall for loss of confidence shall be exercised by the registered voters
of a local government unit to which the local elective official subject to such recall belongs.

Cases:
GARCIA VS. COMELEC, G.R. NO. 111511, OCTOBER 5, 1993
 Recall is a mode of removal of public officer by the people before the end of his/her term of office. The people’s
prerogative to remove a public officer is an incident of their sovereign power and in the absence of any Constitutional
restraint, the power is implied in all governmental operations. Loss of confidence as a ground for recall is a political
question.

CLAUDIO VS. COMELEC, G.R. NO. 140560, MAY 4, 2000

 The 1-year ban cannot be deemed to apply to the entire recall proceedings. The limitations apply only to the exercise
of the power of recall which is vested in the registered voters. So, as long as the election is held outside the one-year
period, from assumption to office the local official sought to be recalled, the preliminary proceedings to initiate a
recall can be held even before the end of the first year in office of said local official

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