LAW ON PUBLIC CORPORATIONS
An attempt in good faith to organize under it
A. General Principles
1. CORPORATIONan artificial being created by operation of law, having the right of
succession and the powers, attributes and properties expressly authorized by law or incident
to its existence.
PUBLIC CORPORATIONone formed and organized for the government of a
portion of the State.
2. Classes of Corporation:
a. Public or Municipala body politic and corporate constituted by
incorporation of inhabitants of city or town for purposes of local
government thereof or as agency of State to assist in civil
government of the country; one formed and organized for the
government of a portion of the State.
b. Privateone formed for some private purpose, benefit, aim or end.
c. Quasi-Publica private corporation that renders public service or
supplies public wants.
d. Quasi-corporationpublic corporations created as agencies of State for
narrow and limited purpose.
3. Elements of Municipal Corporation
a. Legal creation or incorporation
b. Corporate name
c. Inhabitants
d. Territory
4. Dual Nature of Municipal Corporation
Every local government unit created or organized is a body politic and corporate
endowed with powers to be exercised by it in conformity with law. As such, it shall
exercise powers as political subdivision of the National Government and as a
corporate entity representing the inhabitants of its territory.
a. Public/Governmentalit acts as an agent of the State for the
government of the territory and the inhabitants within the municipal
limits; it exercises by delegation a part of the sovereignty of the
State.
b. Private/Proprietaryit acts in a similar category as a business
corporation, performing functions not strictly governmental or
political; it stands for the community in the administration of local
affairs. It acts as a separate entity for its own purposes and not as a
subdivision of the State.
5. Criterion to determine whether corporation is public:
The relationship of the corporation to the State, i.e., if created by the State as its
own agency to help the State in carrying out its governmental functions, then it is
public, otherwise, it is private.
6. De Facto Municipal Corporation
--a corporation that may exist in fact although not point of law because of certain
defects in some essential features of its incorporation.
7. Elements of De Facto Municipal Corporation:
a. A valid law authorizing incorporation
b.
c. A colorable compliance with the law
d. An assumption of corporate powers
8. Three forms of decentralization:
a. Devolution- is the transfer of power and authority from the national
government to LGUs as the territorial and political subdivisions of the
State. The nature of power transfer is political and the approach is
territorial or areal.
b. Deconcentration- is the transfer of power, authority or responsibility, or the
discretion to plan, decide and manage from central point or local levels,
but within the central or national government itself. The nature of the
transfer is administrative and the approach is sectoral.
c. Debureaucratization- is the transfer of some public functions and
responsibilities, which the government may perform, to private entities or
non-governmental organizations; it is peoples empowerment or
participation in local governance.
Decentralization of Administration- the central government delegates
administrative powers to political subdivisions in order to broaden the base of
government power.
Decentralization of Power (Political Decentralization)- involves abdication of
political power in favor of LGUs declared autonomous. (Limbonas vs. Mangelin,
170 SCRA 786)
NOTE:
Local Autonomy-is self-governing. It is the granting of more powers, authority,
responsibilities and resources to the lower or local levels of a government system.
The principle of local autonomy under the 1987 Constitution simply means
decentralization. It does not make the local government sovereign within the state
or an imperium in imperio.
Among the regulatory powers of the National Government Agencies transferred or
devolved to the LGUs include the following:
1. The reclassification of agricultural lands- DAR to cities and municipalities
2. Enforcement of environmental laws- DENR to all LGUs
3. Inspection of food products and quarantine- DOH to cities and municipalities
4. The enforcement of the National Building Code- DPWH to cities and municipalities
5. The processing and approval of subdivision plans- HLURB to cities and municipalities
6. The operation of tricycles- LTFRB to cities and municipalities
7. The establishment of cockpits and holding of cockfights- Philippine Gamefowl
Commission to cities and municipalities
Among the basic services and facilities devolved to LGUs include:
1. Agricultural extension and on-site research of the Department of Agriculture;
2. Community-based forestry project of the DENR;
3. Field health and hospital services and other tertiary health services of the DOH;
4. Public works and infrastructure projects funded out of local funds of the DPWH;
5. The school building program of the DECS;
6. Social welfare services of the DSWD;
7. Tourism facilities and tourism promotion and development of the DOT;
8. Telecommunications services for provinces and cities of the DOTC;
9. Housing projects for provinces and cities; and
10. Other services such as investment support.
9. How local autonomy enhances governmental and corporate powers of LGUs:
a. Every local government unit shall have:
i. Full autonomy in their exercise of proprietary rights and management of
economic enterprises.
ii. Full authority to secure domestic or foreign grants without the approval of the
NGAs concerned, unless these are projects with national security implications,
and
iii. Financial undertakings for LGUs for mutual advantage thru loans and
assistance to calamity-stricken LGUs.
b. R.A. 7160Policy and Application; Constitutional Provisions
1. EffectivityJanuary 1, 1992
2. Scope of Application (Sec. 4, RA 7160)
Applicable to:
a. all provinces
b. cities
c. municipalities
d. barangays
e. and other political bodies as may be created by law, and
f. to the extent provided in the LGC (i.e. devolution of powers):
-officials
-offices, or
-agencies of the National Government
3. Rules of Interpretation (Sec. 5, RA 7160)
a. Any provision on a local government unit shall be liberally interpreted its
favor, and in case of doubt, any question thereon shall be resolved in
favor of devolution of powers and of the lower local government unit. Any
fair and reasonable doubt as to the existence of the power shall be
interpreted in favor of the local government unit concerned;
b. In case of doubt, any tax ordinance or revenue measure shall be
construed strictly against the local govt unit enacting it, and liberally in
favor of the taxpayer. Any tax exemption, incentive or relief granted by
any local govt unit pursuant to the provisions of this Code shall be
construed strictly against the person claiming it;
c. The general welfare provisions in this Code shall be liberally interpreted
to give more powers to local govt units in accelerating economic
development and upgrading the quality of life for the people in the
community.
d. Rights and obligations existing on the date of effectivity of this Code
and arising out of contracts or any other source of prestation
involving a local govt unit shall be governed by the original terms
and conditions of said contracts or the law in force at the time such
rights were vested.
e. In the resolution of controversies arising under this Code where no legal
provision or jurisprudence applies, resort may be had to the customs
and traditions in the place where the controversies take place.
4. Declaration of State Policy over LGUs (Sec. 2, RA 7160)
a. The territorial and political subdivisions of the State shall enjoy
genuine and meaningful local autonomy to enable them to
attain their fullest development as self-reliant communications
and make them more effective partners in the attainment of
national goals.
b. To ensure the accountability of local govt units through the
institution of effective mechanisms of recall, initiative and
referendum.
c. To require all national agencies and offices to conduct periodic
consultations with appropriate local govt units, non-
governmental and peoples organizations and other
concerned sectors of the community before any project or
program is implemented in their respective jurisdictions.
II. INTER-GOVERNMENTAL RELATIONS
1. National Government and Local Government Units
a. The President shall exercise general supervision over LGUs.
I. The President shall exercise supervisory authority directly over provinces,
highly urbanized cities and independent component cities.
ii. The President shall exercise supervision over component cities and
municipalities, through province, and over barangays through city and
municipality. (Sec. 25)
The Presidents power of general supervision over LGUs includes the authority to investigate
and impose disciplinary measures (suspension or removal) upon elective local officials.
Basis Power of Control
A. as to nature of power Legislative
B. as to who exercises the
Congress P
power
creation, conversion of LGUs and alteration of its boundaries;
allocate powers, responsibilities and resources among LGUs;
provide for qualifications, election, appointment, removal, term,
C. as to what the power
salaries and functions and duties of local officials;
includes
provide other matters relating to the organization and operation
of LGUs;
amendment of charters of LGUs.
b. General responsibilities of the National Government towards LGUs:
i. formulate policies and set standards and guidelines
ii. provide funding support
iii. augment basic services assigned to LGUs
iv. provide technical and other forms of assistance and coordinate on the
discharge of NGA functions
v. ensure the participation of LGUs in planning and implementing national
projects
vi. conduct mandatory consultations with LGUs
NOTE:
No project shall be implemented by government authorities without consultation
with the local government units and prior approval of the Sanggunian concerned. (Sec.27)
The requirement of prior consultation applies only to national projects and/or
programs which are to be implemented in a particular local community. Although sanctioned
by the national government, the operation of lotto is neither a program nor project of the
national government but of charitable institution, the Philippine Charity Sweepstakes Office.
The projects and programs mentioned in Sec. 27 should be interpreted to mean projects and
programs whose environmental and ecological effects are among those mentioned in Sec. 26
and 27 of the LGC (Lina vs. Pano, G.R. No. 129093, August 30, 2001).
c. Extent of the LCEs authority over NGAs and their functionaries:
i. The LCE can call upon any employee stationed or assigned in his locality to advise
him on matters affecting the LGU as well as coordinate with said officials,
plans, programs and projects.
ii. The LCE can enlist the attendance of the national official stationed in the LGU on
a meeting of elective and appointed officials of the LGU treating matters in
the promotion of the general welfare of the residents.
Iii. The LCE can also initiate proper administrative or judicial action against national
government official or employee who may have committed an offense
while stationed or assigned in the LGU.
Power of Control and Power of General
Supervision distinguished:
2. Inter-Local Government Relations
a. The province, through the governor, shall ensure that every component city and
municipality acts within its powers.
b. The city or municipality, through the mayor, shall ensure that barangays act within the
scope of their powers.
c. The governor shall review all executive orders promulgated by the mayor. The mayor
shall review orders promulgated by the punong barangay.
The Sangguniang Panlalawigan of a province reviews all ordinances enacted by the
Sangguniang Panlungsod of component cities and Sangguniang Bayan of municipalities under
their jurisdiction. In turn, the Sangguniang Panlungsod and Sangguniang Bayan review all
ordinances passed by the Sannguniang Barangay under the jurisdiction.
Likewise, the Sangguniang Panlalawigan of a province exercises the quasi-judicial
function (administrative disciplinary authority) of hearing and deciding administrative cases
involving elective municipal and component city officials under their jurisdiction. In turn, the
Sangguniang Panlungsod and Sangguniang Bayan exercise disciplinary authority over elective
barangay officials within their jurisdiction.
3. Relations with Peoples Organizations and Non-Government Organizations
a. Private Sector Participation in Local Governance
Purpose: to ensure the viability of local autonomy as an alternative
strategy for sustainable development. LGUs shall encourage private-
sector participation in the delivery of basic services.
b. Role of POs, NGOs in the LGUs:
LGUs shall promote the establishment and operation of peoples and
non-governmental organizations as active partners.
LGUs may enter into joint venture and cooperative undertakings with
peoples and non-governmental organizations particularly in the following:
1. delivery of certain basic services
2. capability building and livelihood projects; and
3. developing local enterprises designed to improve productivity
and income, diversifies agriculture, spur rural industrialization,
and enhance the economic and social well-being of the people.
c. Special Local Bodies where the private sector may participate in local
governance:
1. Local Development Council
-a duly constituted body which shall assist the corresponding Sanggunian in setting the
direction of economic and social development, and coordinating development efforts in its
territorial jurisdiction.
2. Prequalification, Bids and Awards Committee (PBAC)
responsible for the conduct of prequalification of contractors, bidding, evaluation of bids,
and the recommendation of awards concerning local infrastructure projects.
governor or the city or municipality mayor: Chairman
3. Local Peace and Order Council, pursuant to E.O. No.309, as amended, Series of
1988.
4. Local School Board
The DECS shall consult the Board on the appointment of division superintendents, district
supervisors, school principals, and other school officials.
5. Local Health Board
6. Peoples Law Enforcement Board (PLEB)
III. CREATION, CONVERSION, DIVISION, MERGER AND CONSOLIDATION, AND
ABOLITION OF LGUs
A. Creation of LGUs:
A local government unit may be created, divided, merged, abolished, or its boundaries
substantially altered by law enacted by Congress in the case of a province, city, municipality, or
other political subdivisions, or by Sanggunian Panlalawigan or Sanggunian Panlungsod
ordinance in the case of a barangay. (Sec.6)
NOTE:
nature of the power to create: LEGISLATIVE
1. While the power to create barangays has been delegated to Sanggunian Panlalawigan and
Sangguniang Panlungsod, Congress, in order to enhance the delivery of basic services in
indigenous cultural communities, may create barangays in such communities notwithstanding
the requirements set forth by law. (Sec.385a, LGC)
2. The creation or conversion of a local government unit to another level shall be based on the
following verifiable indicators of viability and projected capacity to provide services:
a. Sufficient income and
b. Population and/or
c. Land area
NOTE: Compliance with the above-cited indicators shall be attested by the Department of
Finance, the National Statistics Office and the Land Management Bureau of the DENR,
respectively.
3. Necessity of Fixing Corporate Limits:
As a matter of general rule, municipal corporations cannot, without legal authorization,
exercise its powers beyond its own corporate limits. It is necessary that it must have its
boundaries fixed, definite and certain, in order that may be identified and that all may know the
exact scope or section of territory or geographical division embraced within the corporate limits
and over which the municipal corporation has jurisdiction. A description of the boundaries of a
municipal corporation is said to be an essential part of its charter and necessary to corporate
existence. An incorporation is void where the boundaries of the municipal corporation are not
described with certainty.
4. Manner of Creation
1. Creation of Barangays:
a. Role: serves as the primary planning and implementing unit of government policies,
plans programs, projects and activities in the community, and as a forum wherein the collective
views of the people may be expressed, crystallized and considered, and where disputes may
be amicably settled.
b. Who creates: a barangay may be created, divided, merged, abolished or its
boundary substantially altered by law or by an ordinance of the Sangguniang Panlalawigan or
Sangguniang Panlungsod. Where a barangay is created by an ordinance of the Sangguniang
Panlalawigan, the recommendation of the Sangguniang Bayan concerned shall be necessary.
c. Substantive Requisites:
1. Population- at least 2000 inhabitants
Except in cities and municipalities within Metro Manila or in highly urbanized
citiesmust be at least 5000 inhabitants
2. Income- no minimum income requirement
3. Land Area- no minimum requirement, but it must be contiguous but it need not
be contiguous if the barangay is comprised with two or more islands.
NOTE:
The creation of the new barangay shall not however reduce the population of the original
barangay to less than the minimum requirement prescribed in the Code. (Sec.386, LGC)
2. Creation of Municipalities
a. Role: serves primarily as a general purpose government for the coordination and
delivery of basic, regular and direct services and effective governance of the inhabitants within
its territorial jurisdiction.
b. Who creates: may be created, divided, merged, abolished or its boundary
substantially altered only by an act of Congress subject to the criteria established by the Code.
c. Substantive Requisites:
1. Population- at least 25,000 inhabitants
2. Income- average annual income of at least P2.5 million for the last two
consecutive years based on the 1991 constant prices.
3. Land Area- a contiguous territory of 50 square kilometers.
3. Creation of Component Cities
a. Role- serves primarily as a general purpose government for the coordination and
delivery of basic, regular and direct services and effective governance of the inhabitants within
its territorial jurisdiction.
b. Who creates- may be created, divided, merged or abolished, or its boundary
substantially altered only by an act of Congress subject to the criteria provided in the Code.
c. Substantive Requisites:
1. Population- at least 150,000 inhabitants
2. Income- at least P100 million for the last two consecutive years
3. Land Area- contiguous territory of at least 100 square kilometers
NOTE:
The Internal Revenue Allotments shall be included in the computation of the average
annual income of the municipality for purposes of determining whether the municipality may be
validly converted into a city. Income is defined in the LGC to be all revenues and receipts
collected or received forming the gross accretions of funds of the local government unit. The
IRAs are regular and recurring income and not merely special funds or transfers and/or
budgetary aids from the national government or non-recurring income. The IRAs regularly and
automatically accrue to the local treasury without need of any further action on the part of the
local government unit (Alvarezvs. Guingona, 252 SCRA 695).
4. Conversion of a Component City into a Highly Urbanized City
a. If a component city shall have met the minimum requirements for a highly urbanized
city, it shall be the duty of the President to declare the city as highly urbanized city upon: (1)
proper application and (2) upon ratification in a plebiscite by the majority of registered voters
therein.
b. Substantive Requisites:
1. Population- at least 200,000 inhabitants
2. Income- at least P50 million
5. Creation of Provinces
a. Role- as a political and corporate unit of government, it serves as a dynamic
mechanism for development processes and effective governance of local government units
within its territorial jurisdiction.
b. Who creates- may be created, divided, merged, or abolished, or its boundary
substantially altered, only by an act of Congress, subject to the satisfaction of the criteria set
forth by the LGC.
c. Substantive Requirements:
1. Population- not less than 250,000 inhabitants
2. Income- average annual income of at least P20 million
3. Land Area- a contiguous territory of at least 2000 square kilometers
NOTE:
BP 885, which created the Province of Negros del Norte was declared unconstitutional
because it did not comply with the land area criterion prescribed under the LGC. The use of
the word territory in Sec. 17 of the LGC refers only to the physical mass of land area, not to the
waters comprising a political entity. It excludes the waters over which the political unit
exercises control (Tan vs. Comelec, 142 SCRA 727).
6. Status of Sub-provinces
Existing sub-provinces are converted into regular provinces upon the approval by a
majority votes cast in a plebiscite to be held in the said sub-province and the original province
directly affected. (Sec.462, LGC)
7. Autonomous Regions
The Philippine Constitution mandates the creation of autonomous regions in Muslim
Mindanao and in the Cordilleras consisting of provinces, cities, municipalities, and
geographical areas sharing common and distinctive historical and cultural heritage, and
economic and social cultures. (Sec.15, Art.10, PC)

NOTE:
RA 6734, the organic act establishing the Autonomous Regional Government of
Muslim Mindanao was held valid by the Supreme Court. (Datu Firdausi Abbas vs.
COMELEC, 179 SCRA 287). However, the soleProvince of Ifugao which, in the plebiscite,
alone voted in favor of RA 6766, cannot validly constitute the Autonomous Region of
the Cordilleras. (Ordillo vs. COMELEC, 192 SCRA 100)
8. Special Metropolitan Political Subdivisions
The Congress may, by law, create special metropolitan political subdivisions, but the
component cities and municipalities shall retain their basic autonomy and shall be entitled to
their own local executives and legislative assemblies. The jurisdiction of the metropolitan
authority that will be thereby created shall be limited to basic services requiring coordination.
(Sec. 11, Art. X, PC)
NOTE:
With the passage of RA 7924, Metropolitan Manila was declared as a special
development and administrative region and the administration of metrowide basic services
affecting the region was placed under a development authority referred to as the Metropolitan
Manila Development Authority (MMDA), whose functions were without prejudice to the
autonomy of the affected local government units. The law does not grant police nor legislative
powers to MMDA. Even the Metro Manila Council, the governing board of the MMDA, has not
been delegated any legislative power. Clearly, MMDA is not a political unit. There is no grant
of authority to enact ordinances and regulations for the general welfare of the inhabitants of
the metropolis. MMDA cannot open for public use a private road in a private
subdivision (MMDA vs. Bel-Air Village Association, Inc., G.R. No. 135962,March 27, 2000).
9. Attack against invalidity of incorporation
No collateral attack shall lie; an inquiry into the legal existence of a municipal
corporation is reserved to the State in a proceeding for quo warranto or other direct
proceeding. But this rule applies only when the municipal corporation is, at least, a de facto
municipal corporation.
10. PLEBISCITE REQUIREMENT: Who shall participate
Sec. 10 of the LGC provides that the creation, division and merger, abolition or
substantial alteration of the boundaries of local government units must be approved by a
majority of votes cast in a plebiscite in the political unit or units directly affected. Such
plebiscite shall be conducted by the COMELEC within 120 days from the date of the effectivity
of the law. The completion of the publication of the law should be the reckoning point in
determining the 120-day period within which to conduct the plebiscite, not from the date of its
approval when the law had not yet been published. Since publication is indispensable for the
effectivity of a law, a plebiscite can be scheduled only after the law creating a city took
effect. (Cawaling vs. COMELEC, Oct. 26, 2002)
The plebiscite for the creation of a new province or municipality shall include the
participation of the residents of the mother province or mother municipality in order to conform
to the constitutional requirement. (Padilla vs. COMELEC, 214 SCRA 735)
In the conversion of a municipality into a component city, however, only the registered
voters of the municipality sought to be converted into a component city, shall participate in the
plebiscite.
Summary of Substantive Requirements in the Creation of LGUs
LGU Created Income Population
2,000 but 5,000 for Metro Manila and highly urbanized cities
Barangay No minimum requirement
Municipality P2.5 million 25,000, and
Component City P100 million 150,000 or
Highly Urbanized City P50 million 200,000
Province P20 million 250,000 or
11. Beginning of Corporate Existence
When a new local government unit is created, its corporate existence shall commence
upon the election and qualification of its chief executive and a majority members of the
Sanggunian, unless some other date is fixed therefore by law or ordinance creating it. (Sec.14,
LGC)
12. Division and Merger of LGUs
The division and merger of local government units shall comply with the same
requirements for their creation. The income, population or land area shall not be reduced to
less than the minimum requirements. Likewise, the income classification of the original local
government unit shall not fall below its current income classification prior to such division.
(Sec.8, LGC)
13. Abolition of LGUs
A local government unit may be abolished when its income, population or land area
has been irreversibly reduced to less than the minimum standards prescribed for its creation
under the LGC, as certified by the national agencies to Congress or to the Sanggunian
concerned. Likewise, the law or, ordinance abolishing an LGU shall specify the province, city,
municipality, or barangay with which the local government unit sought to be abolished will be
incorporated or merged. (Sec.9, LGC)
14. Effects of Annexation/Consolidation of Municipal Corporations
1. On the legal existence of the territory annexed- Unless otherwise provided for
by law, the annexation of one municipal corporation to another will dissolve the
annexed territory. It shall become part of the annexing corporation and will fall
under the jurisdiction of the latter.
2. On the laws and ordinances of the annexed corporation- In the absence of
any provision of law to the contrary, when a territory is annexed to a municipal
corporation, it shall become subject to all the laws and ordinances by which
the annexing corporation is governed.
3. On the right of officers or employees of the annexed or consolidated territory
to continue to hold their offices- Subject to what the legislature may provide
upon annexation, the officers and employees of the annexed or consolidated
territory shall terminate their official relation with their offices.
4. On the title to the property of the annexed territory- When a municipal
corporation is annexed to another, the annexing territory shall acquire title to
the property of the annexed territory at the time of annexation without
compensation unless the annexing statute provides otherwise. Where the
annexed territory, however, forms part of a municipality from which it is taken,
the legislature may provide for the payment of compensation for the
indebtedness incurred on account of the property taken.
With regard to public buildings and improvements located in
the annexed territory, the annexing territory is not required to pay for
said buildings or improvements as they have already been paid for by the
annexed territory. It would be otherwise if there exists an indebtedness on
said buildings in which case, the annexing state may be required to share in
the payment of said indebtedness.
5. On the debts and obligations of the annexed territory- It has been stated that
debts and obligations of a municipal corporation contracted before its
annexation to another territory shall be assumed by the annexing territory in
the absence of any provision to the contrary. The same rule applies of
 consolidation where the consolidating municipal corporation is held
responsible for the indebtedness and obligations incurred by the territories
which are consolidated.
15. Effects of Division of LGUs
On the legal existence of the original corporation: The division of municipal corporation
extinguishes the corporate existence of the original municipality.
On the property, powers and rights of the original corporation: Unless the law provides
otherwise, when a municipal corporation is divided into two or more municipalities, each
municipality acquires title to all the property, powers, rights and obligations falling within its
territorial jurisdiction.
5. Must not be unreasonable; and
6. Must be general in application and consistent with public policy.
An ordinance extending burial assistance of P500 to a bereaved family whose gross
income does not exceed P2,000 a month, has been upheld by the Supreme Court as a valid
exercise of police power. This power is organic and flexible. The care for the poor is generally
recognized as a public duty. The support for the poor has long been an accepted exercise of
police power in the promotion of common good. The police power of a municipal corporation
is broad and commensurate with the duty to provide for the real needs of the people in their
health, safety, comfort, and convenience as consistently as may be with private rights. It
extends to all the great public needs and in a broad sense includes all legislation and almost
every function of the municipal government. (Binay vs. Domingo, 201 SCRA 508)

IV. GENERAL POWERS AND ATTRIBUTES OF LGUs 2. Basic Services and Facilities:
A. Powers in general 17, LGC(a) Local government units shall endeavor to be self-reliant and shall continue
exercising the powers and discharging the duties and functions currently vested upon them.
1. Sources: They shall also discharge the functions and responsibilities of national agencies and offices
a. Sec. 25, Art II: Secs. 5,6 and 7, Art. X, Philippine Constitution devolved to them pursuant to this Code. Local government units shall likewise exercise such
b. Statutes, e.g., R.A. 7160 other powers and discharge such other functions and responsibilities as are necessary,
c. Charter (particularly of cities) appropriate, or incidental to efficient and effective provision of the basic services and facilities
d. Doctrine of the right of self-government, but applies only in States which adhere to enumerated under the Code.
the doctrine.
Devolution refers to the act by which the national government confers powers and authority
upon the various local government units to perform specific functions and responsibilities. This
2. Classifications: includes the transfer to the local government units of the records, equipment and other assets
a. Express, implied and inherent and personnel of national agencies and offices.
b. Public or governmental, private or proprietary
c. Intramural or extramural 3. Power to generate and apply resources (18, LGC)
d. Mandatory and directory, ministerial and discretionary The exercise by local governments of the power to tax is ordained by the present
Constitution (5, Art. X, Phil. Constitution). Only guidelines and limitations that may be
3. Execution of powers: established by Congress can define and limit such power of local governments. But local
a. Where the statute prescribes the manner of exercise, the procedure must be followed. governments have no power to tax instrumentalities of the National Government. PAGCOR
b. Where the statute is silent, local government units have discretion to select reasonable being an instrumentality of the National Government is therefore exempt from local
means and methods of exercise. taxes. (Bascovs. PAGCOR, 197 SCRA 52)

B. GOVERNMENTAL POWERS: Main Sources of Revenues of LGUs

1. General Welfare Clause- the statutory grant of police power to local government units. A. Under the Constitution
Limitations: 1. taxes, fees and charges (5, Art. X)
a. Express grant by law 2. share in the national taxes- Internal Revenue Allotment
b. Exercisable only within the territorial limits of the LGU, except for protection of water supply 3. share in the proceeds of the utilization and development of the national
c. Equal protection clause wealth within their areas (7, Art. X)
d. Due process clause B. Under the Local Government Code
e. Must not be contrary to the Constitution and the laws. 1. floating of bonds
2. grants/aids
NOTE:
A local government unit may exercise delegated governmental powers: All LGUs are empowered to create their own sources of revenue and to levy taxes, fees and
Police power (under the General Welfare Clause) charges subject to the provisions on local taxation consistent with the basic policy of local
Power of Taxation autonomy. The Sanggunian concerned through an ordinance has the power to impose a tax,
Power of Eminent Domain fee or charge. The procedural requirements of public hearing and publication must be
observed for purposes of compliance with the requirements of due process.
a. Requisites for the validity of a municipal ordinance:
1. Must not contravene the Constitution and any statute; C. Fundamental Principles on Local taxation
2. Must not be unfair or oppressive; 1. Taxation shall be uniform in each local government unit;
3. Must not be partial or discriminatory; 2. Taxes, fees, charges and other impositions shall:
4. Must not prohibit, but may regulate trade which is not illegal per se; a. be equitable and based as far as practicable on the taxpayers ability to pay;
 b. be levied and collected only for public purposes;
c. not be unjust, excessive, oppressive or confiscatory;
d. not be contrary to law, public policy, national economic policy, or in restraint of trade.
3. The collection of taxes, fees, charges and other impositions shall in no case be let
to any private persons;
4. The revenue collected pursuant to the provisions of the LGC shall inure solely to the
benefit of, and be subject to disposition by, the local government unit levying the tax,
fee, charge or other imposition unless otherwise specifically provided herein; and
5. Each local government unit shall, as far as practicable, evolve a progressive system
of taxation.
NOTES:
Shares of LGUs in the proceeds of national taxes
The share of the LGU in Internal Revenue Taxes is 40%. The 40% IRA is allocated to
LGUs as follows: for provinces and cities- 23%; for municipalities- 34%; for barangays- 20%.
No less than 20% of the IRA is allotted for development project by the local unit from
the IRA.
Shares in National Wealth
40% of the gross collection from mining taxes, royalties, forestry and fishery charges,
and from each share in any joint effort in utilizing and developing the national wealth within the
LGUs jurisdiction and shall be remitted without need for further action to the local treasurer on
a quarterly basis within five days after the end of every quarter.
LGUs shall receive 1% of the gross sale or receipts of the preceding calendar year and
40% of taxes, fees or charges that GOCCs would have paid if not tax exempt, whichever is
higher.
How National Wealth is Distributed
If the national wealth is located in one province, the province shall receive 20%, the
component city/municipality shall receive 45% and the barangays 35%.
If the national wealth is located in two or more LGUs, distribution shall be based on the
following: population- 70% and land area- 30%.
If the national wealth is located in highly urbanized city or independent component city,
the HUC or ICC shall receive 65% and the barangays shall receive 35%.
D. Fundamental Principles of Local Fiscal Administration
1. No money shall be paid out of the local treasury except in pursuance of an
appropriation ordinance or law;
2. Local government funds and monies shall be spent solely for public purposes;
3. Local revenue is generated only from the sources expressly authorized by law or
ordinance, and collection thereof shall at all times be acknowledged properly;
4. All monies officially received by a local government officer in any capacity or on any
occasion shall be accounted for as local funds, unless otherwise provided by law;
5. Trust funds in the local treasury shall not be paid out except in fulfillment of the
purpose for which the trust is created or the funds received.
6. Every officer of the local government unit whose duties permit or require the
possession or custody of local funds shall be properly bonded, and such officer shall be
accountable and responsible for said funds and for the safekeeping thereof in conformity with
the provisions of law.
7. Local governments shall formulate sound financial plans, and the local budgets
shall be based on functions, activities and projects, in terms of expected results.
8. Local budget plans and goals shall, as far as practicable, be harmonized with
national development plans, goals and strategies in order to optimize the utilization of
resources and to avoid duplication in the use of fiscal and physical resources.
9. Local budgets shall operationalize approved development plans.
10. Local government units shall ensure that their respective budgets incorporate the
requirements of their component units and provide for equitable allocation of resources among
these component units.
11. National planning shall be based on local planning to ensure that the needs and
aspirations of the people as articulated by the local government units in their respective local
development plans are considered in the formulation of budgets of national line agencies or
offices.
12. Fiscal responsibility shall be shared by all those exercising authority over the
financial affairs, transactions, and operations of the local government units.
13. The local government unit shall endeavor to have a balanced budget in each fiscal
year of operation.
4. Eminent Domain (19, LGC)
The power to expropriate private property has been delegated by Congress to LGUs
under 19, LGC. The exercise by LGUs of the power of eminent domain are subject to the
usual constitutional limitations such as necessity, private property, taking, public use, just
compensation and due process of law.
The determination of whether there is genuine necessity for the exercise of the power of
eminent domain is a justiciable question when exercised by the LGUs and generally a political
question when exercised by Congress.
NOTE:
Private property already devoted to public use can still be a subject of expropriation by
Congress but not by LGUs.
The additional limitations on the exercise of the power of eminent domain by LGUs are, as
follows:
1. Exercised only by the local chief executive, acting pursuant to a valid ordinance;
2. For public use or purpose or welfare, for the benefit of the poor and the landless;
3. Only after a valid and definite offer had been made to, and not accepted by, the owner;
4. An LGU shall file a complaint for expropriation on the strength of an ordinance and not a
mere resolution passed by the Sanggunian. (Municipality of Paranaque vs. VM Realty Corp.,
292 SCRA 676)
The promulgation of the ordinance authorizing the local chief executive to exercise the power
must be promulgated prior to the filing of the complaint for eminent domain with the proper
court, and not after the court shall have determined the amount of just compensation to which
the defendant is entitled. (Heirs of Suguitan vs. City of Mandaluyong, 328 SCRA 137)
NOTE:
An LGU may immediately take possession of the property upon filing of expropriation
proceedings and deposit in court of 15% of the FMV of the property.
5. Other powers
a. Reclassification of lands (20, RA 7160)
A city or municipality may, through an ordinance passed after conducting public
hearings for the purpose, may authorize the reclassification of agricultural lands and
provide for the manner of their utilization or their disposition:
i. When the land ceases to be economically feasible and sound for
agricultural purposes as determined by the Department of Agriculture;
ii. Where the land shall have substantially greater economic value for
residential, commercial or industrial purposes as determined by the
sanggunian; provided that such reclassification shall be limited to the following
 percentage of the total agricultural land area at the time of the passage of the
ordinance:
for highly urbanized cities and independent component cities: 15%
for component cities and 1st to 3rd class municipalities: 10%
for 4th and 6th class municipalities: 5%
Provided that agricultural land distributed to land reform beneficiaries shall not be affected by
such reclassification.
b. Closure and opening of roads (21, RA 7160)
A local government unit may, pursuant to an ordinance, permanent or
temporarily close or open any local road, alley, park, or square falling within its jurisdiction,
provided that in case of permanent closure, such ordinance must be approved by at least 2/3
of all the members of the sanggunian, and when necessary, and adequate substitute for the
public facility shall be provided.
NOTE:
Additional limitations in case of permanent closure:
i. Adequate provision for the maintenance of public safety must be made;
ii. The property may be used or conveyed for any purpose for which other real
property may be lawfully used or conveyed, but no freedom park shall be closed
permanently without provision for its transfer or relocation to a new site.
Temporary closure may be made during an actual emergency, fiesta celebrations, public
rallies, etc.
c. Naming of LGUs, public places, streets and structures
1. Provinces- The sangguniang panlalawigan may change the name of the
following within its territorial jurisdiction:
i. Component cities and municipalities, upon the recommendation of the
sangguniang concerned;
ii. Provincial roads, avenues, boulevards, thoroughfares and bridges;
iii. Public vocational or technical schools and other post secondary and
tertiary schools;
iv. Provincial hospitals, health centers, and other health facilities; and
v. Any other public place or building owned by the provincial government.
2. Highly Urbanized and Independent Component Cities- The sanggunians of
HUCs and ICCs may change the name of the following within its territorial jurisdiction:
i. City barangays, upon the recommendation of the sangguniang barangay
concerned;
ii. City roads, avenues, boulevards, thoroughfares, and bridges;
iii. Public elementary, secondary and vocational or technical schools,
community colleges and non-chartered colleges;
iv. City hospitals, health centers and other health facilities; and
v. Any other public place or building owned by the city government.
3. Component Cities and Municipalities- The sanggunians of component cities
and municipalities may change the name of the following within its territorial jurisdiction:
i. City and municipal barangays, upon recommendation of the
sangguniang barangay concerned;
ii. City, municipal and barangay roads, avenues, boulevards,
thoroughfares, and bridges;
iii. City and municipal public elementary, secondary and vocational or
technical schools, post-secondary and other tertiary schools;
iv. City and municipal hospitals, health centers and other health facilities;
and
v. Any other public place or building owned by the municipal government.
NOTES:
None of the foregoing local government units, institutions, places, or buildings shall be
named after a living person, nor may a change of name be made unless for a justifiable reason
and, in any case, not oftener than once every ten years. The name of a local government unit
or a public place, street or structure with historical, cultural, or ethnic significance shall not be
changed, unless by a unanimous vote of the sanggunian concerned and in consultation with
the Philippine Historical Commission.
A change of name of a public school shall be made only upon the recommendation of the
local school board concerned.
A change of name of public hospitals, health centers, and other health facilities shall be made
only upon the recommendation of the local health board concerned.
The change of name of any local government unit shall be effective only upon ratification in a
plebiscite conducted for the purpose in the political unit directly affected.
In any change of name, the Office of the President, the representative of the legislative
district concerned, and the Bureau of Posts shall be notified. (13, LGC)
d. Settlement of boundary disputes (118 a-d, RA 7160):
Boundary disputes between and among local government units shall, as
much as possible, be settled amicably. To this end:
a. Boundary disputes involving two or more barangays in the same
city or municipality shall be referred for settlement to the
sangguniang panlungsod or sangguniang bayan concerned.
b. Boundary disputes involving two or more municipalities within
the same province shall be referred for settlement to the
sangguniang panlalawigan concerned.
c. Boundary disputes involving municipalities or component cities
of different provinces shall be jointly referred for settlement to the
sanggunians of the provinces concerned.
d. Boundary disputes involving a component city or municipality on
the one hand and a highly urbanized city on the other, or two or
more highly urbanized cities, shall be jointly referred for
settlement to the respective sanggunians of the parties.
Procedure:
In the event the sanggunian fails to effect an amicable settlement within 60 days
from the date the dispute was referred thereto, it shall issue a certification to that effect.
Thereafter, the dispute shall be formally tried by the sanggunian concerned which shall decide
the issue within 60 days from the date of the certification referred to above.
Within the time and manner prescribed by the Rules of Court, any party may elevate
the decision of the sanggunian concerned, any party may elevate the decision of the
sanggunian concerned to the proper Regional Trial Court having jurisdiction over the area in
dispute. The Regional Trial Court shall decide the appeal within one (1) year from the filing
thereof. Pending final resolution of the case, the disputed area prior to the dispute shall be
maintained and continued for all legal purposes. (119, LGC)
e. Authority over police units (6, Art. XVI, Philippine Constitution)
The State shall establish and maintain one police force, which shall be national in
scope and civilian in character, to be administered and controlled by a National Police
Commission. The authority of local executives over the police units in their jurisdiction shall be
provided by law.
6. LOCAL LEGISLATIVE POWER
A. Products of legislative action
1. Ordinance- prescribes a rule of conduct.
2. Resolution- of temporary character, or expresses sentiment.
B. Requisites for validity:
1. Must not contravene the Constitution and 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
6. Must be general in application and consistent with public policy.
Approval of ordinances:
Ordinances passed by the sangguniang panlalawigan, sangguniang panlungsod or
sangguniang bayan shall be approved:
If the local chief executive approves the same, affixing his signature on each and every page
thereof.
If the local chief executive vetoes the same, and the veto is overridden by 2/3 vote of all the
members of the sanggunian.
Where petitioner was charged with falsification of a public document for approving a
resolution which purportedly appropriated money to pay for the terminal leave of 2 employees
when actually no such resolution was passed, the petitioner argued that his signature on the
resolution was merely ministerial. The Supreme Court disagreed, saying that the grant of the
veto power accords the Mayor the discretion whether or not to approve the resolution. (De Los
Reyes vs. Sandiganbayan, G.R. 121215, Nov. 13, 1997)
NOTES:
1. The vice governor, the vice mayor and the punong barangay shall be the presiding officer of
the sanggunians but shall vote only in case of tie.
2. In case of inability of the presiding officer, the members shall elect a temporary presiding
officer from among themselves. (49)
3. For disorderly behavior and absence without justifiable cause for 4 consecutive sessions, a
member may be censured, reprimanded, excluded from the session, suspended for not more
than 60 days, or expelled. Suspension or expulsion shall require concurrence of at least 2/3 of
all sanggunian members. A member sentenced by final judgment to imprisonment for at least
one year for a crime involving moral turpitude shall be automatically expelled. (50)
4. Every sanggunian member, upon assumption of office shall make a full disclosure of his
business and financial interests. He shall also disclose any business, financial or professional
relationship or any relationship within the 4thdegree which he may have with anyone affected
by any ordinance or resolution of the sanggunian which involves a conflict of interests.
Such relationship includes:
i. Investment in the entity to which the ordinance may apply
ii. Contracts with any person to which the ordinance may apply
Conflict of interests refers to a situation where a sanggunian member may not act in the
public interest due to personal consideration that may affect his judgment to the prejudice of
the public. (51)
5. A special session may be called by the local chief executive or a majority of the sanggunian
members. Unless concurred in by 2/3 vote of the members present, no matter may be
reconsidered at the special session except those stated in the notice. (52)
6. A majority of all the members of the sanggunian shall constitute a quorum. (53)
7. An ordinance shall be approved by the local chief executive by affixing his signature in each
and every page thereof.
8. The governor or mayor may veto any item in the following cases:
a. Particular item or items in an appropriations ordinance
b. Ordinance adopting a local development plan and public investment program
c. Ordinance directing the payment of money or creating liability. (55)
9. The grounds for veto are:
a. The ordinance is ultra vires
b. Or that it is prejudicial to public welfare
10. The veto shall be communicated to the sanggunian within 15 days in the case of a
province and 10 days in the case of a city or municipality; otherwise, the ordinance shall be
deemed approved, as if he signed it. The sanggunian may override the veto by 2/3 of all its
members. (54)
11. Ordinances enacted by the sangguniang barangay shall, upon approval by a majority of all
its members, be signed by the Punong Barangay. The latter has no veto power.
12. Review
a. The sangguniang panlalawigan shall review ordinances and resolution of cities and
municipalities to determine if they are within their power. (56)
Procedure:
Within 3 days after approval, the secretary of the sangguniang panlungsod
(in component cities) or sangguniang bayan shall forward to the sangguniang
panlalawigan for review copies of approved ordinances and resolutions approving
the local development plans and public investment programs formulated by the local
development councils. The sangguniang panlalawigan shall review the same within
30 days; if it finds that the ordinance or resolution is beyond the power conferred
upon the sangguniang panlungsod or sangguniang bayan concerned, it shall declare
such ordinance or resolution invalid in whole or in part. If no action is taken within
30 days, the ordinance or resolution is presumed consistent with law, and therefore,
valid.
b. The sangguniang panlungsod or bayan shall review sangguniang barangay
ordinances to determine if they are lawful. (57)
Procedure:
Within 10 days from enactment, the sangguniang barangay shall furnish copies
of all barangay ordinances to the sangguniang panlungsod or sangguniang bayan for
review. If the reviewing sanggunian finds the barangay ordinances inconsistent with law
or city or municipal ordinances, the sangguniang concerned shall, within 30 days from
receipt thereof, return the same with its comments and recommendations to the
sangguniang barangay for adjustment, amendment or modification, in which case the
effetivity of the ordinance is suspended until the revision called for is effected. If no action
is taken by the sangguniang panlungsod or sangguniang bayan within 30 days, the
ordinance is deemed approved.
13. Enforcement of disapproved ordinances/resolutions:
Any attempt to enforce an ordinance or resolution approving the local development
plan and public investment program, after the disapproval thereof, shall be sufficient ground for
the suspension or dismissal of the official or employee concerned.
14. Effectivity
a. Unless otherwise stated in the ordinance, it shall take effect after 10 days from
posting at the provincial capitol or city, municipal or barangay hall and two other
conspicuous places.
b. The gist of all ordinances with penal sanction shall be published in a newspaper of
general circulation in the province. In the absence of such newspaper, the
ordinance shall be posted in all municipalities and cities of the province where the
sanggunian of origin is situated.
c. In highly urbanized and independent component cities, in addition to posting, the
main features of the ordinance shall be published in a local newspaper of general
circulation. In the absence of such newspaper, it shall be published in any
newspaper of general circulation. (59
C. Corporate Powers (22, RA 7160)
1. To have continuous succession in its corporate name
2. To sue and be sued
3. To have and use a corporate seal
4. To acquire and convey real or personal property
a. The local government unit may acquire real or personal, tangible or intangible
property, in any manner allowed by law, e.g., sale, donation, etc.
b. The local government unit may alienate only patrimonial property, upon proper
authority.
c. In the absence of proof that the property was acquired through corporate or
private funds, the presumption is that it came from the State upon the creation
of the municipality and, thus, is governmental or public property.(Salas vs.
Jarencio, 48 SCRA 734; Rebuco vs. Villegas, 55 SCRA 656)
d. Town plazas are properties of public dominion; they may be occupied
temporarily, but only for the duration of an emergency (Espiritu vs. Municipal
Council of Pozorrubio, Pangasinan, 102 Phil. 866).
e. A public plaza is beyond the commerce of man, and cannot be the subject of
lease or other contractual undertaking. And, even assuming the existence of a
valid lease of the public plaza or part thereof, the municipal resolution
effectively terminated the agreement, for it is settled that the police power
cannot be surrendered or bargained away through the medium of a
contract (Villanueva vs. Castaneda, 154 SCRA 142).
5. Power to enter into contracts
a. Requisites of a valid municipal contracts
i. The local government unit has the express, implied or inherent
power to enter into the particular contract.
ii. The contract is entered into by the proper department, board,
committee, officer or agent. Unless otherwise provided by the Code,
no contract may be entered into by the local chief executive on behalf
of the local government unit without prior authorization by the
sangguniang concerned.
iii. The contract must comply with certain substantive requirements,
i.e., when expenditure of public fund is to be made, there must be an
actual appropriation and a certificate of availability of funds.
iv. The contract must comply with the formal requirements of written
contracts, e.g., the Statute of Frauds.
b. Ultra vires contracts
When a contract is entered into without compliance with the first and the third
requisites (above), the same is ultra vires and is null and void. Such contract cannot
be ratified or validated. Ratification of defective municipal contracts is possible only
when there is non-compliance with the second and/or fourth requirements above.
Ratification may be express or implied.
c. Authority to negotiate and secure contracts (23, RA 7160)
The local chief executive may, upon authority of the sanggunian, negotiate and
secure financial grants or donations in kind, in support of the basic services and
facilities enumerated under 17, from local and foreign assistance agencies without
necessity of securing clearance or approval from any department, agency, or office
of the national government or from any higher local government unit; Provided, that
projects financed by such grants or assistance with national security implications
shall be approved by the national agency concerned.
6. To exercise such other powers as are granted to corporations, subject to limitations
provided in the Code and other laws.
V. MUNICIPAL LIABILITY
1. Specific provisions making LGUs liable:
a. 24, RA 7160- Liability for damages- Local government units and their officials are
not exempt from liability for death or injury to persons or damage to property.
b. Art. 2189, NCC- The local government unit is liable in damages for death or injuries
suffered by reason of the defective condition of roads, streets, bridges, public
buildings and other public works.
c. Art. 2180, (par.6), NCC- The State is responsible when it acts through a special
agent.
d. Art. 34, NCC- The local government unit is subsidiarily liable for damages suffered
by a person by reason of the failure or refusal of a member of the police force to
render aid and prosecution in case of danger to life and property.
2. Liability for Tort
a. If the local government unit is engaged in governmental functions, it is NOT liable.
b. If engaged in proprietary functions, local government unit is liable.
Holding of town fiesta is a proprietary function. The Municipality of Malasique,
Pangasinan, was held liable for the death of a member of the zarzuela group when
the stage collapsed, under the principle of respondeat superior.
NOTE: The municipal council managed the town fiesta. While the municipality was held liable,
the councilors themselves are not liable for the negligence of their employees or
agents. (Torio vs. Fontanilla, 85 SCRA 599)
c. Personal Liability of local officials
3. Liability for violation of law
Case:
The Municipality of Bunawan, Agusan del Sur, through the Mayor, was held in
contempt and fined P1,000.00 with a warning, because of the refusal of the Mayor to abide by
a Temporary Restraining Order issued by the Court (Moday vs. CA, 243 SCRA 152).
4. Liability for contracts
a. General Rule- A municipal corporation, like an ordinary person, is liable on a
contract it enters into, provided that the contract is intra vires. If the contract is ultra
vires, the munipal corporation is not liable.
 NOTES:
A private individual who deals with a municipal corporation is imputed constructive
knowledge of the extent of the power or authority of the municipal corporation to enter into
contracts.
Ordinarily, therefore, the doctrine of estoppel does not lie against municipal corporation.
b. Doctrine of Implied Municipal Liability- A municipality may become obligated upon
an implied contract to pay the reasonable value of the benefits accepted or
appropriated by it as to which it has the general power to contract (Province of
Cebu vs. IAC, 147 SCRA 447).
The doctrine applies to all cases where money or property of a party is received
under such circumstances that the general law, independent of an express contract,
implies an obligation to do justice with respect to the same.
Thus, in this case, the Province of Cebu cannot set up the plea that the contract
was ultra vires and still retain benefits thereunder. Having regarded the contract as
valid for purposes of reaping benefits, the Province ofCebu is estopped to question
its validity for the purpose of denying answerability.
VI. LOCAL OFFICIALS
A. Provisions applicable to elective and appointive officials
1. 89, RA 7160: Prohibited business and pecuniary interest- It shall be unlawful for
any local government official or employee, directly or indirectly, to:
a. Engage in any business transaction with the local government unit in which he is
an official or employee or over which he has the power of supervision, or with any
of its authorized boards, officials, agents, or attorneys, whereby money is to be
paid, or property or any other thing of value is to be transferred, directly or
indirectly, out of the resources of the local government unit to such person or firm;
b. Hold such interests in any cockpit or other games licensed by a local government
unit;
c. Purchase any real estate or other property forfeited in favor of such local
government unit for unpaid taxes or assessment, or by virtue of a legal process at
the instance of the said local government unit;
d. Be a surety for any person contracting or doing business with the local
government unit for which a surety is required; and
e. Possess or use any public property of the local government unit for private
purposes.
f. The prohibitions and inhibitions prescribed in RA 6713 also apply.
2. Practice of Profession (90, RA 7160)
a. Governors or mayors are prohibited from practicinstrative proceedings involving
the local government unit of which he is an official.
iv. Use property and personnel of the government except when the sanggunian
member is defending the interest of the government.
Case:
It was held that by appearing as counsel for dismissed employees, City Councilor
Javellana violated the prohibition against engaging in private practice if such practice
represents interests adverse to the government.(Javellana vs. DILG, 212 SCRA 475)
b. Physicians may practice their profession even during office hours only on
emergencies and without monetary compensation.
3. Prohibition against appointment (94, RA 7160)
a. No elective or appointive local official shall be eligible for appointment or
designation to any public office during his tenure.
b. Unless otherwise allowed by law or by the primary function of his office, no
elective or appointive local official shall hold any other office.
c. Except for losing candidates in barangay elections, no candidate who lost in any
election should be appointed to any office within one year after election.
B. ELECTIVE LOCAL OFFICIALS
1. Qualifications:
a. Common qualifications:
i. Filipino Citizen
ii. Registered voter of the local government unit, or of the district where he intends to
be elected in the case of the members of the sanggunian.
iii. Resident therein for at least one year immediately before the election
iv. Ability to read and write Filipino or any other local dialect.
b. Age
i. Candidates in provinces and highly urbanized cities- at least 23 years old
ii. Candidates for mayor and vice mayor of component cities and municipalities- at
least 21 years old
iii. Candidates for sanggunian members in component cities and municipalities- at
least 18 years old
iv. Barangay officials- at least 18 years old
v. Sangguniang Kabataan- at least 15-21 years
NOTES:
Age- must be possessed on the day of the election.
The LGC does not specify any particular date when the candidate must possess Filipino
citizenzship. Philippine citizenship is required to ensure that no alien shall govern our people.
An official begins to govern only upon his proclamation and on the day that his term begins.
Since Frivaldo took his oath of allegiance on June 30, 1995, when his application for
repatriation was granted by the Special committee on Naturalization created under PD 825, he
was therefore qualified to be proclaimed. Besides, 39 of the LGC speaks of qualifications of
elective officials, not of candidates (Frivaldo vs. COMELEC, 271 SCRA 767).
Petitioner was over 21 years of age on the day of the election was ordered disqualified by the
Supreme Court when the latter rejected the contention of the petitioner that she was qualified
because she was less than 22 years old. The phrase not more than 21 years old is not
equivalent to less than 22 years old (Garvida vs. Sales).
2. Disqualifications (40, RA 7160)- The following are disqualified from running for any
elective local position:
a. Those sentenced by final judgment for an offense involving moral turpitude or
for an offense punishable by one year or more of imprisonment, within two
years after serving sentence;
b. Those removed from office as a result of an administrative case;
c. Those convicted by final judgment for violating the oath of allegiance to the
Republic;
d. Those with dual citizenship;
e. Fugitives from justice in criminal or non-political cases here or abroad;
f. Permanent residents in a foreign country or those who have acquired the right
to reside abroad and continue to avail of the same right after the effectivity of
the Code; and
g. The insane or feeble-minded.
3. Manner of Election
 a. The governor, vice-governor, city or municipal mayor, city or municipal vice-
mayor and punong barangay shall be elected at large in their respective
units. The sangguniang kabataan chairman shall be elected by the registered
voters of the katipunan ng kabataan.
b. The regular members of the sangguniang panlalawigan, panlungsod and
bayan shall be elected by district, as may be provided by law. The presidents
of the leagues of sanggunian members of component cities and municipalities
shall serve as ex officio members of the sangguniang panlalawigan
concerned. The presidents of the liga ng mga barangay and the pederasyon
ng mga sangguniang kabataan elected by their respective chapters, shall
serve as ex officio members of the sangguniang panlalawigan, panlungsod or
bayan.
c. In addition, there shall be one sectoral representative from the women, one
from the workers, and one from any of the following sectors: urban poor,
indigenous cultural communities, disabled persons, or any other sector as
may be determined by the sanggunian concerned within 90 days prior to the
holding of the next local elections as may be provided by law. The Comelec
shall promulgate the rules and regulations to effectively provide for the
election of such sectoral representatives.
4. Date of Election
Every three years on the second Monday of May, unless otherwise provided by law.
5. Term of Office
Three years, starting from noon of June 30, 1992, or such date as may be provided
by law, except that of elective barangay officials. No local elective official shall serve for more
than three consecutive terms in the same position. The term of office of barangay officials and
members of the sangguniang kabataan shall be for five years, which shall begin after the
regular election of barangay officials on the second Monday of May, 1997. (R.A. 8524)
The three-term limit on a local official is to be understood to refer to terms for which the
official concerned was elected. Thus, a person who was elected Vice Mayor in 1988 and who,
because of the death of the Mayor, became Mayor in 1989, may still be eligible to run for the
position of Mayor in 1998, even if elected as such in 1992 and 1995 (Borja v. Comelec, G.R.
No. 133495, Sept. 3, 1998).
6. Rules on Succession (44-46, RA 7160)
A. Permanent vacancies: 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 permanently incapacitated to discharge the functions of his
office.
a. Governor and Mayor
i. Vice Governor and Vice Mayor
ii. Sanggunian members according to ranking
b. Punong barangay
i. Highest ranking sanggunian member
ii. Second highest ranking sangguniang barangay member
c. Ranking in the sanggunian shall be determined on the basis of the proportion of the
votes obtained to the number of registered votes in each district.
d. Ties will be resolved by drawing of lots. (44)
e. Sanggunian:
i. Provinces, highly urbanized cities and independent component cities- appointment
by the President
ii. Component city and municipality- appointment by governor
iii. Sangguniang barangay- appointment by mayor
iv. Except for the sangguniang barangay, the appointee shall come from the political
party of the member who caused the vacancy.
NOTE:
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 certificate shall be null and void and shall be a ground for administrative action
against the official concerned.
v. If the member does not belong to any party, the appointee shall be recommended
by the sanggunian.
vi. The appointee for the sangguniang barangay shall be recommended by the
sangguniang barangay.
vii. Vacancy in the representation of the youth and the barangay in the sanggunian
shall be filled by the official next in rank of the organization. (45)
B. Temporary vacancy
a. When the governor, mayor or punong barangay is temporarily incapacitated to
perform his duties, the vice governor, vice mayor, or ranking sangguniang barangay
member shall exercise his powers except the power to appoint, suspend or dismiss
employees, which can only be exercised after 30 working days.
b. When the local chief executive is traveling within the Philippines for not more than 3
consecutive days, he may designate an officer-in-charge. The authorization shall
specify the powers of the officer-in-charge except the power to appoint, suspend or
dismiss employees.
c. If the local chief executive does not issue the authorization, the vice governor, vice
mayor, or highest ranking sangguniang barangay member shall assume his powers
on the fourth day of his absence. (46)
VII. LOCAL INITIATIVE AND REFERENDUM
A. Local Initiative
1. Defined- It is the legal process whereby the registered voters of a
local government unit may directly propose, enact or amend any
ordinance. It may be exercised by all registered voters of the
provinces, cities, municipalities and barangays
2. Procedure:
a. Not less than 2,000 registered voters in the region; 1,000
registered voters in case of provinces and cities; 100 voters in
case of municipalities, and 50 in case of barangays, may file a
petition with the sanggunian concerned proposing the adoption,
enactment, repeal or amendment of an ordinance.
b. If no favorable action is taken by the sanggunian concerned
within 30 days from presentation, the proponents, through their
duly authorized and registered representatives, may invoke
their power of initiative, giving notice thereof to the sanggunian
concerned.
c. The proposition shall be numbered serially, starting from
Roman numeral I. Two or more propositions may be submitted
in an initiative. The Comelec or its designated representative
shall extend assistance in the formulation of the proposition.
d. Proponents shall have 90 days (in case of provinces and
cities), 60 days (in case of municipalities) and 30 days (in case
 of barangays) from notice mentioned in (b) to collect the
required number of signatures.
e. The petition shall be signed before the election registrar or his
designated representatives, and in the presence of a
representative of the proponent and a representative of the
sanggunian concerned in a public place in the local government
unit.
f. Upon the lapse of the period, the Comelec shall certify as to
whether or not the required number of signatures has been
obtained. Failure to obtain the required number of signatures
defeats the proposition.
g. If the required number is obtained, the Comelec shall set a
date for the initiative during which the proposition is submitted
to the registered voters in the local government unit for their
approval within 60 days (in case of provinces), 45 days (in case
of municipalities), and 30 days (in case of barangays) from the
date of certification by the Comelec. The initiative shall be held
on the date set after which the results thereof shall be certified
and proclaimed by the Comelec.
h. If the proposition is approved by a majority of the votes cast, it
shall take effect 15 days after the certification by the Comelec
as if affirmative action had been taken thereon by the
sanggunian and the local chief executive concerned.

3. Limitations:
a. On local initiative:
i. The power of local initiative shall not be exercised more than
once a year.
ii. Initiative shall extend only to subjects or matters which are within
the legal powers of the sanggunian to enact.
iii. If at any time before the initiative is held, the sanggunian
concerned adopts in toto the proposition presented and the local
chief executive approves the same, the initiative shall be cancelled.
However, those against such action may, if they so desire, apply for
initiative in the manner herein provided.
b. On the sanggunian: Any proposition or ordinance approved through
an initiative and referendum shall not be repealed, modified or
amended by the sanggunian within 6 months from the date of
approval thereof, and may be amended, modified or repealed within
3 years thereafter by a vote of of all its members. In case of
barangays, the period shall be 18 months after the approval thereof.

B. Local referendum:
3. Defined- It is the legal process whereby the registered voters of the local
government units may approve, amend or reject any ordinance enacted
by the sanggunian.
4. The local referendum shall be held under the control and direction of the
Comelec within 60 days (in case of provinces), 45 days (in case of
municipalities) and 30 days (in case of barangays). The Comelec shall
certify and proclaim the results of the said referendum.

C. Authority of Courts- Nothing in the foregoing shall preclude the proper courts from
declaring null and void any proposition approved pursuant hereto for violation of the
Constitution or want of capacity of the sanggunian concerned to enact said
measure.