[G.R. No. 118303.

January 31, 1996]

SENATOR HEHERSON T. ALVAREZ, ET AL., vs. HON. TEOFISTO T.

GUINGONA, JR., ET AL.,
DECISION
Of main concern to the petitioners is whether Republic Act No. 7720, just
recently passed by Congress and signed by the President into law, is
constitutionally infirm.
Indeed, in this Petition for Prohibition with prayer for Temporary
Restraining Order and Preliminary Prohibitory Injunction, petitioners assail the
validity of Republic Act No. 7720, entitled, An Act Converting the Municipality
of Santiago, Isabela into an Independent Component City to be known as the
City of Santiago, mainly because the Act allegedly did not originate exclusively
in the House of Representatives as mandated by Section 24, Article VI of the
1987 Constitution.
Also, petitioners claim that the Municipality of Santiago has not met the
minimum average annual income required under Section 450 of the Local
Government Code of 1991 in order to be converted into a component city.
Undisputed is the following chronicle of the metamorphosis of House Bill
No. 8817 into Republic Act No. 7720:
On April 18, 1993, HB No. 8817, entitled An Act Converting
the Municipality of Santiago into an Independent Component City to be known
as the City of Santiago, was filed in the House of Representatives with
Representative Antonio Abaya as principal author. Other sponsors included
Representatives Ciriaco Alfelor, Rodolfo Albano, Santiago Respicio and
Faustino Dy. The bill was referred to the House Committee on Local
Government and the House Committee on Appropriations on May 5, 1993.
On May 19, 1993, June 1, 1993, November 28, 1993, and December 1,
1993, public hearings on HB No. 8817 were conducted by the House
Committee on Local Government. The committee submitted to the House a
favorable report, with amendments, on December 9, 1993.
On December 13, 1993, HB No. 8817 was passed by the House of
Representatives on Second Reading and was approved on Third Reading
on December 17, 1993. On January 28, 1994, HB No. 8817 was transmitted
to the Senate.

Meanwhile, a counterpart of HB No. 8817, Senate Bill No. 1243, entitled,

An
Act
Converting
the
Municipality
of Santiago into
an
Independent] Component City to be Known as the City of Santiago, was filed
in the Senate. It was introduced by Senator Vicente Sotto III, as principal
sponsor, on May 19, 1993. This was just after the House of Representatives
had conducted its first public hearing on HB No. 8817.
On February 23, 1994, or a little less than a month after HB No. 8817 was
transmitted to the Senate, the Senate Committee on Local Government
conducted public hearings on SB No. 1243. On March 1, 1994, the said
committee submitted Committee Report No. 378 on HB No. 8817, with the
recommendation that it be approved without amendment, taking into
consideration the reality that H.B. No. 8817 was on all fours with SB No. 1243.
Senator Heherson T. Alvarez, one of the herein petitioners, indicated his
approval thereto by signing said report as member of the Committee on Local
Government.
On March 3, 1994, Committee Report No. 378 was passed by the Senate
on Second Reading and was approved on Third Reading on March 14, 1994.
On March 22, 1994, the House of Representatives, upon being apprised of
the action of the Senate, approved the amendments proposed by the Senate.
The enrolled bill, submitted to the President on April 12, 1994, was signed
by the Chief Executive on May 5, 1994 as Republic Act No. 7720. When a
plebiscite on the Act was held onJuly 13, 1994, a great majority of the
registered voters of Santiago voted in favor of the conversion of Santiago into
a city.
The question as to the validity of Republic Act No. 7720 hinges on the
following twin issues: (I) Whether or not the Internal Revenue Allotments
(IRAs) are to be included in the computation of the average annual income of
a municipality for purposes of its conversion into an independent component
city, and (II) Whether or not, considering that the Senate passed SB No. 1243,
its own version of HB No. 8817, Republic Act No. 7720 can be said to have
originated in the House of Representatives.
Petitioners claim that Santiago could not qualify into a component city
because its average annual income for the last two (2) consecutive years
based on 1991 constant prices falls below the required annual income of
Twenty Million Pesos (P20,000,000.00) for its conversion into a city,
petitioners having computed Santiagos average annual income in the
following manner:
Total income (at 1991 constant prices) for 1991 P20,379,057.07
Total income (at 1991 constant prices) for 1992 P21,570,106.87

Total income for 1991 and 1992 P41,949,163.94

Minus:
IRAs for 1991 and 1992 P15,730,043.00
Total income for 1991 and 1992 P26,219,120.94
Average Annual Income P13,109,960.47
By dividing the total income of Santiago for calendar years 1991 and 1992,
after deducting the IRAs, the average annual income arrived at would only be
P13,109,560.47 based on the 1991 constant prices. Thus, petitioners claim
that Santiagos income is far below the aforesaid Twenty Million Pesos
average annual income requirement.
The certification issued by the Bureau of Local Government Finance of the
Department of Finance, which indicates Santiagos average annual income to
be P20,974,581.97, is allegedly not accurate as the Internal Revenue
Allotments were not excluded from the computation. Petitioners asseverate
that the IRAs are not actually income but transfers and! or budgetary aid from
the national government and that they fluctuate, increase or decrease,
depending on factors like population, land and equal sharing.
In this regard, we hold that petitioners asseverations are untenable
because Internal Revenue Allotments form part of the income of Local
Government Units.
It is true that for a municipality to be converted into a component city, it
must, among others, have an average annual income of at least Twenty
Million Pesos for the last two (2) consecutive years based on 1991 constant
prices. Such income must be duly certified by the Department of Finance.
1

Resolution
of
the
controversy
regarding
compliance
by
the Municipality of Santiago with the aforecited income requirement hinges on
a correlative and contextual explication of the meaning of internal revenue
allotments (IRAs) vis-a-vis the notion of income of a local government unit and
the principles of local autonomy and decentralization underlying the
institutionalization and intensified empowerment of the local government
system.
A Local Government Unit is a political subdivision of the State which is
constituted by law and possessed of substantial control over its own
affairs. Remaining to be an intra sovereign subdivision of one sovereign
nation, but not intended, however, to be an imperium in imperio, the local
government unit is autonomous in the sense that it is given more powers,
3

authority, responsibilities and resources. Power which used to be highly

centralized in Manila, is thereby deconcentrated, enabling especially the
peripheral local government units to develop not only at their own pace and
discretion but also with their oWn resources and assets.
5

The practical side to development through a decentralized local

government system certainly concerns the matter of financial resources. With
its broadened powers and increased responsibilities, a local government unit
must now operate on a much wider scale. More extensive operations, in turn,
entail more expenses. Understandably, the vesting of duty, responsibility and
accountability in every local government unit is accompanied with a provision
for reasonably adequate resources to discharge its powers and effectively
carry out its functions. Availment of such resources is effectuated through the
vesting in every local government unit of (1) the right to create and broaden its
own source of revenue; (2) the right to be allocated a just share in national
taxes, such share being in the form of internal revenue allotments (IRAs); and
(3) the right to be given its equitable share in the proceeds of the utilization
and development of the national wealth, if any, within its territorial boundaries.
7

8.

The funds generated from local taxes, IRAs and national wealth utilization
proceeds accrue to the general fund of the local government and are used to
finance its operations subject to specified modes of spending the same as
provided for in the Local Government Code and its implementing rules and
regulations. For instance, not less than twenty percent (20%) of the IRAs must
be set aside for local development projects. As such, for purposes of budget
preparation, which budget should reflect the estimates of the income of the
local government unit, among others, the IRAs and the share in the national
wealth utilization proceeds are considered items of income. This is as it should
be, since income is defined in the Local Government Code to be all revenues
and receipts collected or received forming the gross accretions of funds of the
local government unit.
9

10

The IRAs are items of income because they form part of the gross
accretion of the funds of the local government unit. The IRAs regularly and
automatically accrue to the local treasury without need of any further action on
the part of the local government unit. They thus constitute income which the
local government can invariably rely upon as the source of much needed
funds.
11

For purposes of converting the Municipality of Santiago into a city, the

Department of Finance certified, among others, that the municipality had an
average annual income of at least Twenty Million Pesos for the last two (2)
consecutive years based on 1991 constant prices. This, the Department of
Finance did after including the IRAs in its computation of said average annual
income.

Furthermore, Section 450 (c) of the Local Government Code provides that
the average annual income shall include the income accruing to the general
fund, exclusive of special funds, transfers, and non-recurring income. To
reiterate, IRAs are a regular, recurring item of income; nil is there a basis, too,
to classify the same as a special fund or transfer, since IRAs have a technical
definition and meaning all its own as used in the Local Government Code that
unequivocally makes it distinct from special funds or transfers referred to
when the Code speaks of funding support from the national government, its
instrumentalities and government-owned-or-controlled corporations.
12

Thus, Department of Finance Order No. 3593 correctly encapsulizes the

full import of the above disquisition when it defined ANNUAL INCOME to be
revenues and receipts realized by provinces, cities and municipalities from
regular sources of the Local General Fund including the internal revenue
allotment and other shares provided for in Sections 284, 290 and 291 of the
Code, but exclusive of non-recurring receipts, such as other national aids,
grants, financial assistance, loan proceeds, sales of fixed assets, and similar
others (Italics ours). Such order, constituting executive or contemporaneous
construction of a statute by an administrative agency charged with the task of
interpreting and applying the same, is entitled to full respect and should be
accorded great weight by the courts, unless such construction is clearly
shown to be in sharp conflict with the Constitution, the governing statute, or
other laws.
13

14

15

II
Although a bill of local application like HB No. 8817 should, by
constitutional prescription, originate exclusively in the House of
Representatives, the claim of petitioners that Republic Act No. 7720 did not
originate exclusively in the House of Representatives because a bill of the
same import, SB No. 1243, was passed in the Senate, is untenable because it
cannot be denied that HB No. 8817 was filed in the House of Representatives
first before SB No. 1243 was filed in the Senate. Petitioners themselves
cannot disavow their own admission that HB No. 8817 was filed on April 18,
1993 while SB No. 1243 was filed on May 19, 1993. The filing of HB No. 8817
was thus precursive not only of the said Act in question but also of SB No.
1243. Thus, HB No. 8817, was the bill that initiated the legislative process that
culminated in the enactment of Republic Act No. 7720. No violation of Section
24, Article VI, of the 1987 Constitution is perceptible under the circumstances
attending the instant controversy.
16

Furthermore, petitioners themselves acknowledge that HB No. 8817 was

already approved on Third Reading and duly transmitted to the Senate when
the Senate Committee on Local Government conducted its public hearing on
HB No. 8817. HB No. 8817 was approved on the Third Reading on December

17, 1993 and transmitted to the Senate on January 28, 1994; a little less than
a month thereafter, or on February 23, 1994, the Senate Committee on Local
Government conducted public hearings on SB No. 1243. Clearly, the Senate
held in abeyance any action on SB No. 1243 until it received HB No. 8817,
already approved on the Third Reading, from the House of Representatives.
The filing in the Senate of a substitute bill in anticipation of its receipt of the bill
from the House, does not contravene the constitutional requirement that a bill
of local application should originate in the House of Representatives, for as
long as the Senate does not act thereupon until it receives the House bill.
We have already addressed this issue in the case of
Tolentino vs. Secretary of Finance. There, on the matter of the Expanded
Value Added Tax (EVAT) Law, which, as a revenue bill, is nonetheless
constitutionally required to originate exclusively in the House of
Representatives, we explained:
17

x x x To begin with, it is not the law-but the revenue bill-which is required by the
Constitution to originate exclusively in the House of Representatives. It is important
to emphasize this, because a bill originating in the House may undergo such extensive
changes in the Senate that the result may be a rewriting of the whole. x x x as a result
of the Senate action, a distinct bill may be produced. To insist that a revenue statuteand not only the bill which initiated the legislative process culminating in the
enactment of the law-must substantially be the same as the House bill would be to
deny the Senates power not only to concur with amendments but also to propose
amendments. It would be to violate the coequality of legislative power of the two
houses of Congress and in fact make the House superior to the Senate.
xxx xxx xxx
It is insisted, however, that S. No. 1630 was passed not in substitution of H. No. 11197
but of another Senate bill (S. No. 1129) earlier filed and that what the Senate did was
merely to take [H. No. 11197] into consideration in enacting S. No. 1630. There is
really no difference between the Senate preserving H. No. 11197 up to the enacting
clause and then writing its own version following the enacting clause (which, it would
seem petitioners admit is an amendment by substitution), and, on the other hand,
separately presenting a bill of its own on the same subject matter. In either case the
result are two bills on the same subject.
Indeed, what the Constitution simply means is that the initiative for filing revenue,
tariff, or tax bills, bills authorizing an increase of the public debt, private bills and
bills of local application must come from the House of Representatives on the theory
that, elected as they are from the districts, the members of the House can be expected
to be more sensitive to the local needs and problems. On the other hand, the senators,
who are elected at large, are expected to approach the same problems from the

national perspective. Both views are thereby made to bear on the enactment of such
laws.
Nor does the Constitution prohibit the filing in the Senate of a substitute bill in
anticipation of its receipt of the bill from the House, so long as action by the Senate as
a body is withheld pending receipt of the House bill. x x x
18

It is a well-entrenched jurisprudential rule that on the side of every law lies

the presumption of constitutionality. Consequently, for RA No. 7720 to be
nullified, it must be shown that there is a clear and unequivocal breach of the
Constitution, not merely a doubtful and equivocal one; in other words, the
grounds for nullity must be clear and beyond reasonable doubt. Those who
petition this court to declare a law to be unconstitutional must clearly and fully
establish the basis that will justify such a declaration; otherwise, their petition
must fail. Taking into consideration the justification of our stand on the
immediately preceding ground raised by petitioners to challenge the
constitutionality of RA No. 7720, the Court stands on the holding that
petitioners have failed to overcome the presumption. The dismissal of this
petition is, therefore, inevitable.
19

20

WHEREFORE, the instant petition is DISMISSED for lack of merit with

costs against petitioners.
SO ORDERED.

G.R. No. 111097 July 20, 1994

MAYOR PABLO P. MAGTAJAS & THE CITY OF CAGAYAN DE ORO, petitioners,
vs.
PRYCE PROPERTIES CORPORATION, INC. & PHILIPPINE AMUSEMENT AND GAMING
CORPORATION,respondents.

There was instant opposition when PAGCOR announced the opening of a casino in Cagayan de Oro
City. Civic organizations angrily denounced the project. The religious elements echoed the objection
and so did the women's groups and the youth. Demonstrations were led by the mayor and the city
legislators. The media trumpeted the protest, describing the casino as an affront to the welfare of the
city.
The trouble arose when in 1992, flush with its tremendous success in several cities, PAGCOR
decided to expand its operations to Cagayan de Oro City. To this end, it leased a portion of a building
belonging to Pryce Properties Corporation, Inc., one of the herein private respondents, renovated
and equipped the same, and prepared to inaugurate its casino there during the Christmas season.
The reaction of the Sangguniang Panlungsod of Cagayan de Oro City was swift and hostile. On
December 7, 1992, it enacted Ordinance No. 3353 reading as follows:
ORDINANCE NO. 3353
AN ORDINANCE PROHIBITING THE ISSUANCE OF BUSINESS PERMIT AND
CANCELLING EXISTING BUSINESS PERMIT TO ANY ESTABLISHMENT FOR
THE USING AND ALLOWING TO BE USED ITS PREMISES OR PORTION
THEREOF FOR THE OPERATION OF CASINO.
BE IT ORDAINED by the Sangguniang Panlungsod of the City of Cagayan de Oro, in
session assembled that:
Sec. 1. That pursuant to the policy of the city banning the operation of casino
within its territorial jurisdiction, no business permit shall be issued to any person,
partnership or corporation for the operation of casino within the city limits.
Sec. 2. That it shall be a violation of existing business permit by any persons,
partnership or corporation to use its business establishment or portion thereof, or
allow the use thereof by others for casino operation and other gambling activities.
Sec. 3. PENALTIES. Any violation of such existing business permit as defined
in the preceding section shall suffer the following penalties, to wit:
a) Suspension of the business permit for sixty (60)
days for the first offense and a fine of P1,000.00/day
b) Suspension of the business permit for Six (6)
months for the second offense, and a fine of
P3,000.00/day
c) Permanent revocation of the business permit and
imprisonment of One (1) year, for the third and
subsequent offenses.
Sec. 4. This Ordinance shall take effect ten (10) days from publication thereof.
Nor was this all. On January 4, 1993, it adopted a sterner Ordinance No. 3375-93 reading as follows:
ORDINANCE NO. 3375-93
AN ORDINANCE PROHIBITING THE OPERATION OF CASINO AND PROVIDING
PENALTY FOR VIOLATION THEREFOR.

WHEREAS, the City Council established a policy as early as 1990 against CASINO
under its Resolution No. 2295;
WHEREAS, on October 14, 1992, the City Council passed another Resolution No.
2673, reiterating its policy against the establishment of CASINO;
WHEREAS, subsequently, thereafter, it likewise passed Ordinance No. 3353,
prohibiting the issuance of Business Permit and to cancel existing Business Permit to
any establishment for the using and allowing to be used its premises or portion
thereof for the operation of CASINO;
WHEREAS, under Art. 3, section 458, No. (4), sub paragraph VI of the Local
Government Code of 1991 (Rep. Act 7160) and under Art. 99, No. (4), Paragraph VI
of the implementing rules of the Local Government Code, the City Council as the
Legislative Body shall enact measure to suppress any activity inimical to public
morals and general welfare of the people and/or regulate or prohibit such activity
pertaining to amusement or entertainment in order to protect social and moral
welfare of the community;
NOW THEREFORE,
BE IT ORDAINED by the City Council in session duly assembled that:
Sec. 1. The operation of gambling CASINO in the City of Cagayan de Oro is
hereby prohibited.
Sec. 2. Any violation of this Ordinance shall be subject to the following penalties:
a) Administrative fine of P5,000.00 shall be imposed against the proprietor,
partnership or corporation undertaking the operation, conduct, maintenance of
gambling CASINO in the City and closure thereof;
b) Imprisonment of not less than six (6) months nor more than one (1) year or a fine
in the amount of P5,000.00 or both at the discretion of the court against the manager,
supervisor, and/or any person responsible in the establishment, conduct and
maintenance of gambling CASINO.
Sec. 3. This Ordinance shall take effect ten (10) days after its publication in a local
newspaper of general circulation.
Pryce assailed the ordinances before the Court of Appeals, where it was joined by PAGCOR as
intervenor and supplemental petitioner. Their challenge succeeded. On March 31, 1993, the Court of
Appeals declared the ordinances invalid and issued the writ prayed for to prohibit their
enforcement. 1 Reconsideration of this decision was denied on July 13, 1993. 2
Cagayan de Oro City and its mayor are now before us in this petition for review under Rule 45 of the
Rules of Court. 3 They aver that the respondent Court of Appeals erred in holding that:
1. Under existing laws, the Sangguniang Panlungsod of the City of Cagayan de Oro
does not have the power and authority to prohibit the establishment and operation of
a PAGCOR gambling casino within the City's territorial limits.
2. The phrase "gambling and other prohibited games of chance" found in Sec. 458,
par. (a), sub-par. (1) (v) of R.A. 7160 could only mean "illegal gambling."
3. The questioned Ordinances in effect annul P.D. 1869 and are therefore invalid on
that point.

4. The questioned Ordinances are discriminatory to casino and partial to cockfighting

and are therefore invalid on that point.
5. The questioned Ordinances are not reasonable, not consonant with the general
powers and purposes of the instrumentality concerned and inconsistent with the laws
or policy of the State.
6. It had no option but to follow the ruling in the case of Basco, et al. v.
PAGCOR, G.R. No. 91649, May 14, 1991, 197 SCRA 53 in disposing of the issues
presented in this present case.
PAGCOR is a corporation created directly by P.D. 1869 to help centralize and regulate all games of
chance, including casinos on land and sea within the territorial jurisdiction of the Philippines.
In Basco v. Philippine Amusements and Gaming Corporation, 4 this Court sustained the
constitutionality of the decree and even cited the benefits of the entity to the national economy as the third
highest revenue-earner in the government, next only to the BIR and the Bureau of Customs.
Cagayan de Oro City, like other local political subdivisions, is empowered to enact ordinances for the
purposes indicated in the Local Government Code. It is expressly vested with the police power under
what is known as the General Welfare Clause now embodied in Section 16 as follows:
Sec. 16. General Welfare. Every local government unit shall exercise the
powers expressly granted, those necessarily implied therefrom, as well as powers
necessary, appropriate, or incidental for its efficient and effective governance, and
those which are essential to the promotion of the general welfare. Within their
respective territorial jurisdictions, local government units shall ensure and support,
among other things, the preservation and enrichment of culture, promote health and
safety, enhance the right of the people to a balanced ecology, encourage and
support the development of appropriate and self-reliant scientific and technological
capabilities, improve public morals, enhance economic prosperity and social justice,
promote full employment among their residents, maintain peace and order, and
preserve the comfort and convenience of their inhabitants.
In addition, Section 458 of the said Code specifically declares that:
Sec. 458. Powers, Duties, Functions and Compensation. (a) The Sangguniang
Panlungsod, as the legislative body of the city, shall enact ordinances, approve
resolutions and appropriate funds for the general welfare of the city and its
inhabitants pursuant to Section 16 of this Code and in the proper exercise of the
corporate powers of the city as provided for under Section 22 of this Code, and shall:
(1) Approve ordinances and pass resolutions necessary for an efficient and effective
city government, and in this connection, shall:
xxx xxx xxx
(v) Enact ordinances intended to prevent, suppress
and impose appropriate penalties for habitual
drunkenness in public places, vagrancy, mendicancy,
prostitution, establishment and maintenance of
houses of ill repute,gambling and other prohibited
games of chance, fraudulent devices and ways to
obtain money or property, drug addiction,
maintenance of drug dens, drug pushing, juvenile
delinquency, the printing, distribution or exhibition of
obscene or pornographic materials or publications,

and such other activities inimical to the welfare and

morals of the inhabitants of the city;
This section also authorizes the local government units to regulate properties and businesses within
their territorial limits in the interest of the general welfare. 5
The petitioners argue that by virtue of these provisions, the Sangguniang Panlungsod may prohibit
the operation of casinos because they involve games of chance, which are detrimental to the people.
Gambling is not allowed by general law and even by the Constitution itself. The legislative power
conferred upon local government units may be exercised over all kinds of gambling and not only
over "illegal gambling" as the respondents erroneously argue. Even if the operation of casinos may
have been permitted under P.D. 1869, the government of Cagayan de Oro City has the authority to
prohibit them within its territory pursuant to the authority entrusted to it by the Local Government
Code.
It is submitted that this interpretation is consonant with the policy of local autonomy as mandated in
Article II, Section 25, and Article X of the Constitution, as well as various other provisions therein
seeking to strengthen the character of the nation. In giving the local government units the power to
prevent or suppress gambling and other social problems, the Local Government Code has
recognized the competence of such communities to determine and adopt the measures best
expected to promote the general welfare of their inhabitants in line with the policies of the State.
The petitioners also stress that when the Code expressly authorized the local government units to
prevent and suppress gambling and other prohibited games of chance, like craps, baccarat,
blackjack and roulette, it meant allforms of gambling without distinction. Ubi lex non distinguit, nec
nos distinguere debemos. 6 Otherwise, it would have expressly excluded from the scope of their power
casinos and other forms of gambling authorized by special law, as it could have easily done. The fact that
it did not do so simply means that the local government units are permitted to prohibit all kinds of
gambling within their territories, including the operation of casinos.
The adoption of the Local Government Code, it is pointed out, had the effect of modifying the charter
of the PAGCOR. The Code is not only a later enactment than P.D. 1869 and so is deemed to prevail
in case of inconsistencies between them. More than this, the powers of the PAGCOR under the
decree are expressly discontinued by the Code insofar as they do not conform to its philosophy and
provisions, pursuant to Par. (f) of its repealing clause reading as follows:
(f) All general and special laws, acts, city charters, decrees, executive orders,
proclamations and administrative regulations, or part or parts thereof which are
inconsistent with any of the provisions of this Code are hereby repealed or modified
accordingly.
It is also maintained that assuming there is doubt regarding the effect of the Local Government Code
on P.D. 1869, the doubt must be resolved in favor of the petitioners, in accordance with the direction
in the Code calling for its liberal interpretation in favor of the local government units. Section 5 of the
Code specifically provides:
Sec. 5. Rules of Interpretation. In the interpretation of the provisions of this Code,
the following rules shall apply:
(a) Any provision on a power of a local government unit shall be liberally interpreted
in 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;
xxx xxx xxx

(c) The general welfare provisions in this Code shall be liberally interpreted to give
more powers to local government units in accelerating economic development and
upgrading the quality of life for the people in the community; . . . (Emphasis
supplied.)
Finally, the petitioners also attack gambling as intrinsically harmful and cite various provisions of the
Constitution and several decisions of this Court expressive of the general and official disapprobation
of the vice. They invoke the State policies on the family and the proper upbringing of the youth and,
as might be expected, call attention to the old case of U.S. v. Salaveria, 7 which sustained a municipal
ordinance prohibiting the playing of panguingue. The petitioners decry the immorality of gambling. They
also impugn the wisdom of P.D. 1869 (which they describe as "a martial law instrument") in creating
PAGCOR and authorizing it to operate casinos "on land and sea within the territorial jurisdiction of the
Philippines."
This is the opportune time to stress an important point.
The morality of gambling is not a justiciable issue. Gambling is not illegal per se. While it is generally
considered inimical to the interests of the people, there is nothing in the Constitution categorically
proscribing or penalizing gambling or, for that matter, even mentioning it at all. It is left to Congress
to deal with the activity as it sees fit. In the exercise of its own discretion, the legislature may prohibit
gambling altogether or allow it without limitation or it may prohibit some forms of gambling and allow
others for whatever reasons it may consider sufficient. Thus, it has prohibited jueteng and monte but
permits lotteries, cockfighting and horse-racing. In making such choices, Congress has consulted its
own wisdom, which this Court has no authority to review, much less reverse. Well has it been said
that courts do not sit to resolve the merits of conflicting theories. 8 That is the prerogative of the
political departments. It is settled that questions regarding the wisdom, morality, or practicibility of statutes
are not addressed to the judiciary but may be resolved only by the legislative and executive departments,
to which the function belongs in our scheme of government. That function is exclusive. Whichever way
these branches decide, they are answerable only to their own conscience and the constituents who will
ultimately judge their acts, and not to the courts of justice.
The only question we can and shall resolve in this petition is the validity of Ordinance No. 3355 and
Ordinance No. 3375-93 as enacted by the Sangguniang Panlungsod of Cagayan de Oro City. And
we shall do so only by the criteria laid down by law and not by our own convictions on the propriety
of gambling.
The tests of a valid ordinance are well established. A long line of decisions 9 has held that to be valid,
an ordinance must conform to the following substantive requirements:
1) It must not contravene the constitution or any statute.
2) It must not be unfair or oppressive.
3) It must not be partial or discriminatory.
4) It must not prohibit but may regulate trade.
5) It must be general and consistent with public policy.
6) It must not be unreasonable.
We begin by observing that under Sec. 458 of the Local Government Code, local government units
are authorized to prevent or suppress, among others, "gambling and other prohibited games of
chance." Obviously, this provision excludes games of chance which are not prohibited but are in fact
permitted by law. The petitioners are less than accurate in claiming that the Code could have
excluded such games of chance but did not. In fact it does. The language of the section is clear and
unmistakable. Under the rule of noscitur a sociis, a word or phrase should be interpreted in relation

to, or given the same meaning of, words with which it is associated. Accordingly, we conclude that
since the word "gambling" is associated with "and other prohibited games of chance," the word
should be read as referring to only illegal gambling which, like the other prohibited games of chance,
must be prevented or suppressed.
We could stop here as this interpretation should settle the problem quite conclusively. But we will
not. The vigorous efforts of the petitioners on behalf of the inhabitants of Cagayan de Oro City, and
the earnestness of their advocacy, deserve more than short shrift from this Court.
The apparent flaw in the ordinances in question is that they contravene P.D. 1869 and the public
policy embodied therein insofar as they prevent PAGCOR from exercising the power conferred on it
to operate a casino in Cagayan de Oro City. The petitioners have an ingenious answer to this
misgiving. They deny that it is the ordinances that have changed P.D. 1869 for an ordinance
admittedly cannot prevail against a statute. Their theory is that the change has been made by the
Local Government Code itself, which was also enacted by the national lawmaking authority. In their
view, the decree has been, not really repealed by the Code, but merely "modified pro tanto" in the
sense that PAGCOR cannot now operate a casino over the objection of the local government unit
concerned. This modification of P.D. 1869 by the Local Government Code is permissible because
one law can change or repeal another law.
It seems to us that the petitioners are playing with words. While insisting that the decree has only
been "modifiedpro tanto," they are actually arguing that it is already dead, repealed and useless for
all intents and purposes because the Code has shorn PAGCOR of all power to centralize and
regulate casinos. Strictly speaking, its operations may now be not only prohibited by the local
government unit; in fact, the prohibition is not only discretionary but mandated by Section 458 of the
Code if the word "shall" as used therein is to be given its accepted meaning. Local government units
have now no choice but to prevent and suppress gambling, which in the petitioners' view includes
both legal and illegal gambling. Under this construction, PAGCOR will have no more games of
chance to regulate or centralize as they must all be prohibited by the local government units
pursuant to the mandatory duty imposed upon them by the Code. In this situation, PAGCOR cannot
continue to exist except only as a toothless tiger or a white elephant and will no longer be able to
exercise its powers as a prime source of government revenue through the operation of casinos.
It is noteworthy that the petitioners have cited only Par. (f) of the repealing clause, conveniently
discarding the rest of the provision which painstakingly mentions the specific laws or the parts
thereof which are repealed (or modified) by the Code. Significantly, P.D. 1869 is not one of them. A
reading of the entire repealing clause, which is reproduced below, will disclose the omission:
Sec. 534. Repealing Clause. (a) Batas Pambansa Blg. 337, otherwise known as
the "Local Government Code," Executive Order No. 112 (1987), and Executive Order
No. 319 (1988) are hereby repealed.
(b) Presidential Decree Nos. 684, 1191, 1508 and such other decrees, orders,
instructions, memoranda and issuances related to or concerning the barangay are
hereby repealed.
(c) The provisions of Sections 2, 3, and 4 of Republic Act No. 1939 regarding hospital
fund; Section 3, a (3) and b (2) of Republic Act. No. 5447 regarding the Special
Education Fund; Presidential Decree No. 144 as amended by Presidential Decree
Nos. 559 and 1741; Presidential Decree No. 231 as amended; Presidential Decree
No. 436 as amended by Presidential Decree No. 558; and Presidential Decree Nos.
381, 436, 464, 477, 526, 632, 752, and 1136 are hereby repealed and rendered of no
force and effect.
(d) Presidential Decree No. 1594 is hereby repealed insofar as it governs locallyfunded projects.

(e) The following provisions are hereby repealed or amended insofar as they are
inconsistent with the provisions of this Code: Sections 2, 16, and 29 of Presidential
Decree No. 704; Sections 12 of Presidential Decree No. 87, as amended; Sections
52, 53, 66, 67, 68, 69, 70, 71, 72, 73, and 74 of Presidential Decree No. 463, as
amended; and Section 16 of Presidential Decree No. 972, as amended, and
(f) All general and special laws, acts, city charters, decrees, executive orders,
proclamations and administrative regulations, or part or parts thereof which are
inconsistent with any of the provisions of this Code are hereby repealed or modified
accordingly.
Furthermore, it is a familiar rule that implied repeals are not lightly presumed in the absence of a
clear and unmistakable showing of such intention. In Lichauco & Co. v. Apostol, 10 this Court
explained:
The cases relating to the subject of repeal by implication all proceed on the
assumption that if the act of later date clearly reveals an intention on the part of the
lawmaking power to abrogate the prior law, this intention must be given effect; but
there must always be a sufficient revelation of this intention, and it has become an
unbending rule of statutory construction that the intention to repeal a former law will
not be imputed to the Legislature when it appears that the two statutes, or provisions,
with reference to which the question arises bear to each other the relation of general
to special.
There is no sufficient indication of an implied repeal of P.D. 1869. On the contrary, as the private
respondent points out, PAGCOR is mentioned as the source of funding in two later enactments of
Congress, to wit, R.A. 7309, creating a Board of Claims under the Department of Justice for the
benefit of victims of unjust punishment or detention or of violent crimes, and R.A. 7648, providing for
measures for the solution of the power crisis. PAGCOR revenues are tapped by these two statutes.
This would show that the PAGCOR charter has not been repealed by the Local Government Code
but has in fact been improved as it were to make the entity more responsive to the fiscal problems of
the government.
It is a canon of legal hermeneutics that instead of pitting one statute against another in an inevitably
destructive confrontation, courts must exert every effort to reconcile them, remembering that both
laws deserve a becoming respect as the handiwork of a coordinate branch of the government. On
the assumption of a conflict between P.D. 1869 and the Code, the proper action is not to uphold one
and annul the other but to give effect to both by harmonizing them if possible. This is possible in the
case before us. The proper resolution of the problem at hand is to hold that under the Local
Government Code, local government units may (and indeed must) prevent and suppress all kinds of
gambling within their territories except only those allowed by statutes like P.D. 1869. The exception
reserved in such laws must be read into the Code, to make both the Code and such laws equally
effective and mutually complementary.
This approach would also affirm that there are indeed two kinds of gambling, to wit, the illegal and
those authorized by law. Legalized gambling is not a modern concept; it is probably as old as illegal
gambling, if not indeed more so. The petitioners' suggestion that the Code authorizes them to
prohibit all kinds of gambling would erase the distinction between these two forms of gambling
without a clear indication that this is the will of the legislature. Plausibly, following this theory, the City
of Manila could, by mere ordinance, prohibit the Philippine Charity Sweepstakes Office from
conducting a lottery as authorized by R.A. 1169 and B.P. 42 or stop the races at the San Lazaro
Hippodrome as authorized by R.A. 309 and R.A. 983.
In light of all the above considerations, we see no way of arriving at the conclusion urged on us by
the petitioners that the ordinances in question are valid. On the contrary, we find that the ordinances
violate P.D. 1869, which has the character and force of a statute, as well as the public policy

expressed in the decree allowing the playing of certain games of chance despite the prohibition of
gambling in general.
The rationale of the requirement that the ordinances should not contravene a statute is obvious.
Municipal governments are only agents of the national government. Local councils exercise only
delegated legislative powers conferred on them by Congress as the national lawmaking body. The
delegate cannot be superior to the principal or exercise powers higher than those of the latter. It is a
heresy to suggest that the local government units can undo the acts of Congress, from which they
have derived their power in the first place, and negate by mere ordinance the mandate of the statute.
Municipal corporations owe their origin to, and derive their powers and rights wholly
from the legislature. It breathes into them the breath of life, without which they cannot
exist. As it creates, so it may destroy. As it may destroy, it may abridge and control.
Unless there is some constitutional limitation on the right, the legislature might, by a
single act, and if we can suppose it capable of so great a folly and so great a wrong,
sweep from existence all of the municipal corporations in the State, and the
corporation could not prevent it. We know of no limitation on the right so far as to the
corporation themselves are concerned. They are, so to phrase it, the mere tenants at
will of the legislature. 11
This basic relationship between the national legislature and the local government units has not been
enfeebled by the new provisions in the Constitution strengthening the policy of local autonomy.
Without meaning to detract from that policy, we here confirm that Congress retains control of the
local government units although in significantly reduced degree now than under our previous
Constitutions. The power to create still includes the power to destroy. The power to grant still
includes the power to withhold or recall. True, there are certain notable innovations in the
Constitution, like the direct conferment on the local government units of the power to tax, 12which
cannot now be withdrawn by mere statute. By and large, however, the national legislature is still the
principal of the local government units, which cannot defy its will or modify or violate it.
The Court understands and admires the concern of the petitioners for the welfare of their
constituents and their apprehensions that the welfare of Cagayan de Oro City will be endangered by
the opening of the casino. We share the view that "the hope of large or easy gain, obtained without
special effort, turns the head of the workman" 13 and that "habitual gambling is a cause of laziness and
ruin." 14 In People v. Gorostiza, 15 we declared: "The social scourge of gambling must be stamped out. The
laws against gambling must be enforced to the limit." George Washington called gambling "the child of
avarice, the brother of iniquity and the father of mischief." Nevertheless, we must recognize the power of
the legislature to decide, in its own wisdom, to legalize certain forms of gambling, as was done in P.D.
1869 and impliedly affirmed in the Local Government Code. That decision can be revoked by this Court
only if it contravenes the Constitution as the touchstone of all official acts. We do not find such
contravention here.
We hold that the power of PAGCOR to centralize and regulate all games of chance, including
casinos on land and sea within the territorial jurisdiction of the Philippines, remains unimpaired. P.D.
1869 has not been modified by the Local Government Code, which empowers the local government
units to prevent or suppress only those forms of gambling prohibited by law.
Casino gambling is authorized by P.D. 1869. This decree has the status of a statute that cannot be
amended or nullified by a mere ordinance. Hence, it was not competent for the Sangguniang
Panlungsod of Cagayan de Oro City to enact Ordinance No. 3353 prohibiting the use of buildings for
the operation of a casino and Ordinance No. 3375-93 prohibiting the operation of casinos. For all
their praiseworthy motives, these ordinances are contrary to P.D. 1869 and the public policy
announced therein and are therefore ultra vires and void.
WHEREFORE, the petition is DENIED and the challenged decision of the respondent Court of
Appeals is AFFIRMED, with costs against the petitioners. It is so ordered.

Narvasa, C.J., Feliciano, Bidin, Regalado, Romero, Bellosillo, Melo, Quiason, Puno, Vitug,
Kapunan and Mendoza, JJ., concur.

Separate Opinions

PADILLA, J., concurring:

I concur with the majority holding that the city ordinances in question cannot modify much less
repeal PAGCOR's general authority to establish and maintain gambling casinos anywhere in the
Philippines under Presidential Decree No. 1869.
In Basco v. Philippine Amusement and Gaming Corporation (PAGCOR), 197 SCRA 52, I stated in a
separate opinion that:
. . . I agree with the decision insofar as it holds that the prohibition, control, and
regulation of the entire activity known as gambling properly pertain to "state policy". It
is, therefore, the political departments of government, namely, the legislative and the
executive that should decide on what government should do in the entire area of
gambling, and assume full responsibility to the people for such policy." (Emphasis
supplied)
However, despite the legality of the opening and operation of a casino in Cagayan de Oro City by
respondent PAGCOR, I wish to reiterate my view that gambling in any form runs counter to the
government's own efforts to re-establish and resurrect the Filipino moral character which is generally
perceived to be in a state of continuing erosion.
It is in the light of this alarming perspective that I call upon government to carefully weigh the
advantages and disadvantages of setting up more gambling facilities in the country.
That the PAGCOR contributes greatly to the coffers of the government is not enough reason for
setting up more gambling casinos because, undoubtedly, this will not help improve, but will cause a
further deterioration in the Filipino moral character.
It is worth remembering in this regard that, 1) what is legal is not always moral and 2) the ends do
not always justify the means.
As in Basco, I can easily visualize prostitution at par with gambling. And yet, legalization of the
former will not render it any less reprehensible even if substantial revenue for the government can
be realized from it. The same is true of gambling.
In the present case, it is my considered view that the national government (through PAGCOR)
should re-examine and re-evaluate its decision of imposing the gambling casino on the residents of
Cagayan de Oro City; for it is abundantly clear that public opinion in the city is very much against it,
and again the question must be seriously deliberated: will the prospects of revenue to be realized
from the casino outweigh the further destruction of the Filipino sense of values?

DAVIDE, JR., J., concurring:

While I concur in part with the majority, I wish, however, to express my views on certain aspects of
this case.
I.
It must at once be noted that private respondent Pryce Properties Corporation (PRYCE) directly filed
with the Court of Appeals its so-called petition for prohibition, thereby invoking the said court's
original jurisdiction to issue writs of prohibition under Section 9(1) of B.P. Blg. 129. As I see it,
however, the principal cause of action therein is one for declaratory relief: to declare null and
unconstitutional for, inter alia, having been enacted without or in excess of jurisdiction, for
impairing the obligation of contracts, and for being inconsistent with public policy the challenged
ordinances enacted by the Sangguniang Panglungsod of the City of Cagayan de Oro. The
intervention therein of public respondent Philippine Amusement and Gaming Corporation (PAGCOR)
further underscores the "declaratory relief" nature of the action. PAGCOR assails the ordinances for
being contrary to the non-impairment and equal protection clauses of the Constitution, violative of
the Local Government Code, and against the State's national policy declared in P.D. No. 1869.
Accordingly, the Court of Appeals does not have jurisdiction over the nature of the action. Even
assuming arguendo that the case is one for prohibition, then, under this Court's established policy
relative to the hierarchy of courts, the petition should have been filed with the Regional Trial Court of
Cagayan de Oro City. I find no special or compelling reason why it was not filed with the said court. I
do not wish to entertain the thought that PRYCE doubted a favorable verdict therefrom, in which
case the filing of the petition with the Court of Appeals may have been impelled by tactical
considerations. A dismissal of the petition by the Court of Appeals would have been in order
pursuant to our decisions in People vs. Cuaresma (172 SCRA 415, [1989]) and Defensor-Santiago
vs. Vasquez (217 SCRA 633 [1993]). In Cuaresma, this Court stated:
A last word. This court's original jurisdiction to issue writs of certiorari (as well as
prohibition,mandamus, quo warranto, habeas corpus and injunction) is not exclusive.
It is shared by this Court with Regional Trial Courts (formerly Courts of First
Instance), which may issue the writ, enforceable in any part of their respective
regions. It is also shared by this court, and by the Regional Trial Court, with the Court
of Appeals (formerly, Intermediate Appellate Court), although prior to the effectivity
ofBatas Pambansa Bilang 129 on August 14, 1981, the latter's competence to issue
the extraordinary writs was restricted by those "in aid of its appellate jurisdiction."
This concurrence of jurisdiction is not, however, to be taken as according to parties
seeking any of the writs an absolute, unrestrained freedom of choice of the court to
which application therefor will be directed. There is after all a hierarchy of courts.
That hierarchy is determinative of the revenue of appeals, and should also serve as a
general determinant of the appropriate forum for petitions for the extraordinary writs.
A becoming regard for that judicial hierarchy most certainly indicates that petitions for
the issuance of extraordinary writs against first level ("inferior") courts should be filed
with the Regional Trial Court, and those against the latter, with the Court of Appeals.
A direct invocation of the Supreme Court's original jurisdiction to issue these writs
should be allowed only when there are special and important reasons therefor,
clearly and specifically set out in the petition. This is established policy. It is a policy
that is necessary to prevent inordinate demands upon the Court's time and attention
which are better devoted to those matters within its exclusive jurisdiction, and to
prevent further over-crowding of the Court's docket. Indeed, the removal of the
restriction of the jurisdiction of the Court of Appeals in this regard, supra resulting
from the deletion of the qualifying phrase, "in aid of its appellate jurisdiction" was
evidently intended precisely to relieve this Court pro tanto of the burden of dealing
with applications for extraordinary writs which, but for the expansion of the Appellate
Court's corresponding jurisdiction, would have had to be filed with it. (citations
omitted)

And in Vasquez, this Court said:

One final observation. We discern in the proceedings in this case a propensity on the
part of petitioner, and, for that matter, the same may be said of a number of litigants
who initiate recourses before us, to disregard the hierarchy of courts in our judicial
system by seeking relief directly from this Court despite the fact that the same is
available in the lower courts in the exercise of their original or concurrent jurisdiction,
or is even mandated by law to be sought therein. This practice must be stopped, not
only because of the imposition upon the previous time of this Court but also because
of the inevitable and resultant delay, intended or otherwise, in the adjudication of the
case which often has to be remanded or referred to the lower court as the proper
forum under the rules of procedure, or as better equipped to resolve the issues since
this Court is not a trier of facts. We, therefore, reiterate the judicial policy that this
Court will not entertain direct resort to it unless the redress desired cannot be
obtained in the appropriate courts or where exceptional and compelling
circumstances justify availment of a remedy within and calling for the exercise of our
primary jurisdiction.
II.
The challenged ordinances are (a) Ordinance No. 3353 entitled, "An Ordinance Prohibiting the
Issuance of Business Permit and Canceling Existing Business Permit To Any Establishment for the
Using and Allowing to be Used Its Premises or Portion Thereof for the Operation of Casino," and (b)
Ordinance No. 3375-93 entitled, "An Ordinance Prohibiting the Operation of Casino and Providing
Penalty for Violation Therefor." They were enacted to implement Resolution No. 2295 entitled,
"Resolution Declaring As a Matter of Policy to Prohibit and/or Not to Allow the Establishment of the
Gambling Casino in the City of Cagayan de Oro," which was promulgated on 19 November 1990
nearly two years before PRYCE and PAGCOR entered into a contract of lease under which the latter
leased a portion of the former's Pryce Plaza Hotel for the operation of a gambling casino which
resolution was vigorously reiterated in Resolution No. 2673 of 19 October 1992.
The challenged ordinances were enacted pursuant to the Sangguniang Panglungsod's express
powers conferred by Section 458, paragraph (a), subparagraphs (1)-(v), (3)-(ii), and (4)-(i), (iv), and
(vii), Local Government Code, and pursuant to its implied power under Section 16 thereof (the
general welfare clause) which reads:
Sec. 16. General Welfare. Every local government unit shall exercise the powers
expressly granted, those necessarily implied therefrom, as well as powers necessary,
appropriate, or incidental for its efficient and effective governance, and those which
are essential to the promotion of the general welfare. Within their respective territorial
jurisdictions, local government units shall ensure and support, among other things,
the preservation and enrichment of culture, promote health and safety, enhance the
right of the people to a balanced ecology, encourage and support the development of
appropriate and self-reliant scientific and technological capabilities, improve public
morals, enhance economic prosperity and social justice, promote full employment
among their residents, maintain peace and order, and preserve the comfort and
convenience of their inhabitants.
The issue that necessarily arises is whether in granting local governments (such as the City of
Cagayan de Oro) the above powers and functions, the Local Government Code has, pro tanto,
repealed P.D. No. 1869 insofar as PAGCOR's general authority to establish and maintain gambling
casinos anywhere in the Philippines is concerned.
I join the majority in holding that the ordinances cannot repeal P.D. No. 1869.
III.

The nullification by the Court of Appeals of the challenged ordinances as unconstitutional primarily
because it is in contravention to P.D. No. 1869 is unwarranted. A contravention of a law is not
necessarily a contravention of the constitution. In any case, the ordinances can still stand even if
they be conceded as offending P.D. No. 1869. They can be reconciled, which is not impossible to do.
So reconciled, the ordinances should be construed as not applying to PAGCOR.
IV.
From the pleadings, it is obvious that the government and the people of Cagayan de Oro City are,
for obvious reasons, strongly against the opening of the gambling casino in their city. Gambling,
even if legalized, would be inimical to the general welfare of the inhabitants of the City, or of any
place for that matter. The PAGCOR, as a government-owned corporation, must consider the valid
concerns of the people of the City of Cagayan de Oro and should not impose its will upon them in an
arbitrary, if not despotic, manner.

# Separate Opinions

PADILLA, J., concurring:

I concur with the majority holding that the city ordinances in question cannot modify much less
repeal PAGCOR's general authority to establish and maintain gambling casinos anywhere in the
Philippines under Presidential Decree No. 1869.
In Basco v. Philippine Amusement and Gaming Corporation (PAGCOR), 197 SCRA 52, I stated in a
separate opinion that:
. . . I agree with the decision insofar as it holds that the prohibition, control, and
regulation of the entire activity known as gambling properly pertain to "state policy". It
is, therefore, the political departments of government, namely, the legislative and the
executive that should decide on what government should do in the entire area of
gambling, and assume full responsibility to the people for such policy. (emphasis
supplied)
However, despite the legality of the opening and operation of a casino in Cagayan de Oro City by
respondent PAGCOR, I wish to reiterate my view that gambling in any form runs counter to the
government's own efforts to re-establish and resurrect the Filipino moral character which is generally
perceived to be in a state of continuing erosion.
It is in the light of this alarming perspective that I call upon government to carefully weigh the
advantages and disadvantages of setting up more gambling facilities in the country.
That the PAGCOR contributes greatly to the coffers of the government is not enough reason for
setting up more gambling casinos because, undoubtedly, this will not help improve, but will cause a
further deterioration in the Filipino moral character.
It is worth remembering in this regard that, 1) what is legal is not always moral and 2) the ends do
not always justify the means.
As in Basco, I can easily visualize prostitution at par with gambling. And yet, legalization of the
former will not render it any less reprehensible even if substantial revenue for the government can
be realized from it. The same is true of gambling.

In the present case, it is my considered view that the national government (through PAGCOR)
should re-examine and re-evaluate its decision of imposing the gambling casino on the residents of
Cagayan de Oro City; for it is abundantly clear that public opinion in the city is very much against it,
and again the question must be seriously deliberated: will the prospects of revenue to be realized
from the casino outweigh the further destruction of the Filipino sense of values?
DAVIDE, JR., J., concurring:
While I concur in part with the majority, I wish, however, to express my views on certain aspects of
this case.
I.
It must at once be noted that private respondent Pryce Properties Corporation (PRYCE) directly filed
with the Court of Appeals its so-called petition for prohibition, thereby invoking the said court's
original jurisdiction to issue writs of prohibition under Section 9(1) of B.P. Blg. 129. As I see it,
however, the principal cause of action therein is one for declaratory relief: to declare null and
unconstitutional for, inter alia, having been enacted without or in excess of jurisdiction, for
impairing the obligation of contracts, and for being inconsistent with public policy the challenged
ordinances enacted by the Sangguniang Panglungsod of the City of Cagayan de Oro. The
intervention therein of public respondent Philippine Amusement and Gaming Corporation (PAGCOR)
further underscores the "declaratory relief" nature of the action. PAGCOR assails the ordinances for
being contrary to the non-impairment and equal protection clauses of the Constitution, violative of
the Local Government Code, and against the State's national policy declared in P.D. No. 1869.
Accordingly, the Court of Appeals does not have jurisdiction over the nature of the action. Even
assuming arguendo that the case is one for prohibition, then, under this Court's established policy
relative to the hierarchy of courts, the petition should have been filed with the Regional Trial Court of
Cagayan de Oro City. I find no special or compelling reason why it was not filed with the said court. I
do not wish to entertain the thought that PRYCE doubted a favorable verdict therefrom, in which
case the filing of the petition with the Court of Appeals may have been impelled by tactical
considerations. A dismissal of the petition by the Court of Appeals would have been in order
pursuant to our decisions in People vs. Cuaresma (172 SCRA 415, [1989]) and Defensor-Santiago
vs. Vasquez (217 SCRA 633 [1993]). In Cuaresma, this Court stated:
A last word. This court's original jurisdiction to issue writs of certiorari (as well as
prohibition,mandamus, quo warranto, habeas corpus and injunction) is not exclusive.
It is shared by this Court with Regional Trial Courts (formerly Courts of First
Instance), which may issue the writ, enforceable in any part of their respective
regions. It is also shared by this court, and by the Regional Trial Court, with the Court
of Appeals (formerly, Intermediate Appellate Court), although prior to the effectivity
ofBatas Pambansa Bilang 129 on August 14, 1981, the latter's competence to issue
the extraordinary writs was restricted by those "in aid of its appellate jurisdiction."
This concurrence of jurisdiction is not, however, to be taken as according to parties
seeking any of the writs an absolute, unrestrained freedom of choice of the court to
which application therefor will be directed. There is after all a hierarchy of courts.
That hierarchy is determinative of the revenue of appeals, and should also serve as a
general determinant of the appropriate forum for petitions for the extraordinary writs.
A becoming regard for that judicial hierarchy most certainly indicates that petitions for
the issuance of extraordinary writs against first level ("inferior") courts should be filed
with the Regional Trial Court, and those against the latter, with the Court of Appeals.
A direct invocation of the Supreme Court's original jurisdiction to issue these writs
should be allowed only when there are special and important reasons therefor,
clearly and specifically set out in the petition. This is established policy. It is a policy
that is necessary to prevent inordinate demands upon the Court's time and attention
which are better devoted to those matters within its exclusive jurisdiction, and to
prevent further over-crowding of the Court's docket. Indeed, the removal of the
restriction of the jurisdiction of the Court of Appeals in this regard, supra resulting

from the deletion of the qualifying phrase, "in aid of its appellate jurisdiction" was
evidently intended precisely to relieve this Court pro tanto of the burden of dealing
with applications for extraordinary writs which, but for the expansion of the Appellate
Court's corresponding jurisdiction, would have had to be filed with it. (citations
omitted)
And in Vasquez, this Court said:
One final observation. We discern in the proceedings in this case a propensity on the
part of petitioner, and, for that matter, the same may be said of a number of litigants
who initiate recourses before us, to disregard the hierarchy of courts in our judicial
system by seeking relief directly from this Court despite the fact that the same is
available in the lower courts in the exercise of their original or concurrent jurisdiction,
or is even mandated by law to be sought therein. This practice must be stopped, not
only because of the imposition upon the previous time of this Court but also because
of the inevitable and resultant delay, intended or otherwise, in the adjudication of the
case which often has to be remanded or referred to the lower court as the proper
forum under the rules of procedure, or as better equipped to resolve the issues since
this Court is not a trier of facts. We, therefore, reiterate the judicial policy that this
Court will not entertain direct resort to it unless the redress desired cannot be
obtained in the appropriate courts or where exceptional and compelling
circumstances justify availment of a remedy within and calling for the exercise of our
primary jurisdiction.
II.
The challenged ordinances are (a) Ordinance No. 3353 entitled, "An Ordinance Prohibiting the
Issuance of Business Permit and Canceling Existing Business Permit To Any Establishment for the
Using and Allowing to be Used Its Premises or Portion Thereof for the Operation of Casino," and (b)
Ordinance No. 3375-93 entitled, "An Ordinance Prohibiting the Operation of Casino and Providing
Penalty for Violation Therefor." They were enacted to implement Resolution No. 2295 entitled,
"Resolution Declaring As a Matter of Policy to Prohibit and/or Not to Allow the Establishment of the
Gambling Casino in the City of Cagayan de Oro," which was promulgated on 19 November 1990
nearly two years before PRYCE and PAGCOR entered into a contract of lease under which the latter
leased a portion of the former's Pryce Plaza Hotel for the operation of a gambling casino which
resolution was vigorously reiterated in Resolution No. 2673 of 19 October 1992.
The challenged ordinances were enacted pursuant to the Sangguniang Panglungsod's express
powers conferred by Section 458, paragraph (a), subparagraphs (1)-(v), (3)-(ii), and (4)-(i), (iv), and
(vii), Local Government Code, and pursuant to its implied power under Section 16 thereof (the
general welfare clause) which reads:
Sec. 16. General Welfare. Every local government unit shall exercise the powers
expressly granted, those necessarily implied therefrom, as well as powers necessary,
appropriate, or incidental for its efficient and effective governance, and those which
are essential to the promotion of the general welfare. Within their respective territorial
jurisdictions, local government units shall ensure and support, among other things,
the preservation and enrichment of culture, promote health and safety, enhance the
right of the people to a balanced ecology, encourage and support the development of
appropriate and self-reliant scientific and technological capabilities, improve public
morals, enhance economic prosperity and social justice, promote full employment
among their residents, maintain peace and order, and preserve the comfort and
convenience of their inhabitants.
The issue that necessarily arises is whether in granting local governments (such as the City of
Cagayan de Oro) the above powers and functions, the Local Government Code has, pro tanto,

repealed P.D. No. 1869 insofar as PAGCOR's general authority to establish and maintain gambling
casinos anywhere in the Philippines is concerned.
I join the majority in holding that the ordinances cannot repeal P.D. No. 1869.
III.
The nullification by the Court of Appeals of the challenged ordinances as unconstitutional primarily
because it is in contravention to P.D. No. 1869 is unwarranted. A contravention of a law is not
necessarily a contravention of the constitution. In any case, the ordinances can still stand even if
they be conceded as offending P.D. No. 1869. They can be reconciled, which is not impossible to do.
So reconciled, the ordinances should be construed as not applying to PAGCOR.
IV.
From the pleadings, it is obvious that the government and the people of Cagayan de Oro City are,
for obvious reasons, strongly against the opening of the gambling casino in their city. Gambling,
even if legalized, would be inimical to the general welfare of the inhabitants of the City, or of any
place for that matter. The PAGCOR, as a government-owned corporation, must consider the valid
concerns of the people of the City of Cagayan de Oro and should not impose its will upon them in an
arbitrary, if not despotic, manner.
G.R. No. 91649

May 14, 1991

ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES MARANAN AND

LORENZO SANCHEZ,petitioners,
vs.
PHILIPPINE AMUSEMENTS AND GAMING CORPORATION (PAGCOR), respondent.
A TV ad proudly announces:
"The new PAGCOR responding through responsible gaming."
But the petitioners think otherwise, that is why, they filed the instant petition seeking to annul the
Philippine Amusement and Gaming Corporation (PAGCOR) Charter PD 1869, because it is
allegedly contrary to morals, public policy and order, and because
A. It constitutes a waiver of a right prejudicial to a third person with a right recognized by law.
It waived the Manila City government's right to impose taxes and license fees, which is
recognized by law;
B. For the same reason stated in the immediately preceding paragraph, the law has intruded
into the local government's right to impose local taxes and license fees. This, in
contravention of the constitutionally enshrined principle of local autonomy;
C. It violates the equal protection clause of the constitution in that it legalizes PAGCOR
conducted gambling, while most other forms of gambling are outlawed, together with
prostitution, drug trafficking and other vices;
D. It violates the avowed trend of the Cory government away from monopolistic and crony
economy, and toward free enterprise and privatization. (p. 2, Amended Petition; p. 7, Rollo)
In their Second Amended Petition, petitioners also claim that PD 1869 is contrary to the declared
national policy of the "new restored democracy" and the people's will as expressed in the 1987
Constitution. The decree is said to have a "gambling objective" and therefore is contrary to Sections
11, 12 and 13 of Article II, Sec. 1 of Article VIII and Section 3 (2) of Article XIV, of the present
Constitution (p. 3, Second Amended Petition; p. 21, Rollo).

The procedural issue is whether petitioners, as taxpayers and practicing lawyers (petitioner Basco
being also the Chairman of the Committee on Laws of the City Council of Manila), can question and
seek the annulment of PD 1869 on the alleged grounds mentioned above.
The Philippine Amusements and Gaming Corporation (PAGCOR) was created by virtue of P.D.
1067-A dated January 1, 1977 and was granted a franchise under P.D. 1067-B also dated January 1,
1977 "to establish, operate and maintain gambling casinos on land or water within the territorial
jurisdiction of the Philippines." Its operation was originally conducted in the well known floating
casino "Philippine Tourist." The operation was considered a success for it proved to be a potential
source of revenue to fund infrastructure and socio-economic projects, thus, P.D. 1399 was passed
on June 2, 1978 for PAGCOR to fully attain this objective.
Subsequently, on July 11, 1983, PAGCOR was created under P.D. 1869 to enable the Government
to regulate and centralize all games of chance authorized by existing franchise or permitted by law,
under the following declared policy
Sec. 1. Declaration of Policy. It is hereby declared to be the policy of the State to
centralize and integrate all games of chance not heretofore authorized by existing franchises
or permitted by law in order to attain the following objectives:
(a) To centralize and integrate the right and authority to operate and conduct games of
chance into one corporate entity to be controlled, administered and supervised by the
Government.
(b) To establish and operate clubs and casinos, for amusement and recreation, including
sports gaming pools, (basketball, football, lotteries, etc.) and such other forms of amusement
and recreation including games of chance, which may be allowed by law within the territorial
jurisdiction of the Philippines and which will: (1) generate sources of additional revenue to
fund infrastructure and socio-civic projects, such as flood control programs, beautification,
sewerage and sewage projects, Tulungan ng Bayan Centers, Nutritional Programs,
Population Control and such other essential public services; (2) create recreation and
integrated facilities which will expand and improve the country's existing tourist attractions;
and (3) minimize, if not totally eradicate, all the evils, malpractices and corruptions that are
normally prevalent on the conduct and operation of gambling clubs and casinos without
direct government involvement. (Section 1, P.D. 1869)
To attain these objectives PAGCOR is given territorial jurisdiction all over the Philippines. Under its
Charter's repealing clause, all laws, decrees, executive orders, rules and regulations, inconsistent
therewith, are accordingly repealed, amended or modified.
It is reported that PAGCOR is the third largest source of government revenue, next to the Bureau of
Internal Revenue and the Bureau of Customs. In 1989 alone, PAGCOR earned P3.43 Billion, and
directly remitted to the National Government a total of P2.5 Billion in form of franchise tax,
government's income share, the President's Social Fund and Host Cities' share. In addition,
PAGCOR sponsored other socio-cultural and charitable projects on its own or in cooperation with
various governmental agencies, and other private associations and organizations. In its 3 1/2 years
of operation under the present administration, PAGCOR remitted to the government a total of P6.2
Billion. As of December 31, 1989, PAGCOR was employing 4,494 employees in its nine (9) casinos
nationwide, directly supporting the livelihood of Four Thousand Four Hundred Ninety-Four (4,494)
families.
But the petitioners, are questioning the validity of P.D. No. 1869. They allege that the same is "null
and void" for being "contrary to morals, public policy and public order," monopolistic and tends
toward "crony economy", and is violative of the equal protection clause and local autonomy as well
as for running counter to the state policies enunciated in Sections 11 (Personal Dignity and Human
Rights), 12 (Family) and 13 (Role of Youth) of Article II, Section 1 (Social Justice) of Article XIII and
Section 2 (Educational Values) of Article XIV of the 1987 Constitution.
This challenge to P.D. No. 1869 deserves a searching and thorough scrutiny and the most deliberate
consideration by the Court, involving as it does the exercise of what has been described as "the
highest and most delicate function which belongs to the judicial department of the government."
(State v. Manuel, 20 N.C. 144; Lozano v. Martinez, 146 SCRA 323).

As We enter upon the task of passing on the validity of an act of a co-equal and coordinate branch of
the government We need not be reminded of the time-honored principle, deeply ingrained in our
jurisprudence, that a statute is presumed to be valid. Every presumption must be indulged in favor of
its constitutionality. This is not to say that We approach Our task with diffidence or timidity. Where it
is clear that the legislature or the executive for that matter, has over-stepped the limits of its authority
under the constitution, We should not hesitate to wield the axe and let it fall heavily, as fall it must, on
the offending statute (Lozano v. Martinez, supra).
In Victoriano v. Elizalde Rope Workers' Union, et al, 59 SCRA 54, the Court thru Mr. Justice Zaldivar
underscored the
. . . thoroughly established principle which must be followed in all cases where questions of
constitutionality as obtain in the instant cases are involved. All presumptions are indulged in
favor of constitutionality; one who attacks a statute alleging unconstitutionality must prove its
invalidity beyond a reasonable doubt; that a law may work hardship does not render it
unconstitutional; that if any reasonable basis may be conceived which supports the statute, it
will be upheld and the challenger must negate all possible basis; that the courts are not
concerned with the wisdom, justice, policy or expediency of a statute and that a liberal
interpretation of the constitution in favor of the constitutionality of legislation should be
adopted. (Danner v. Hass, 194 N.W. 2nd 534, 539; Spurbeck v. Statton, 106 N.W. 2nd 660,
663; 59 SCRA 66; see also e.g. Salas v. Jarencio, 46 SCRA 734, 739 [1970]; Peralta v.
Commission on Elections, 82 SCRA 30, 55 [1978]; and Heirs of Ordona v. Reyes, 125 SCRA
220, 241-242 [1983] cited in Citizens Alliance for Consumer Protection v. Energy Regulatory
Board, 162 SCRA 521, 540)
Of course, there is first, the procedural issue. The respondents are questioning the legal personality
of petitioners to file the instant petition.
Considering however the importance to the public of the case at bar, and in keeping with the Court's
duty, under the 1987 Constitution, to determine whether or not the other branches of government
have kept themselves within the limits of the Constitution and the laws and that they have not
abused the discretion given to them, the Court has brushed aside technicalities of procedure and
has taken cognizance of this petition. (Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas
Inc. v. Tan, 163 SCRA 371)
With particular regard to the requirement of proper party as applied in the cases before us,
We hold that the same is satisfied by the petitioners and intervenors because each of them
has sustained or is in danger of sustaining an immediate injury as a result of the acts or
measures complained of. And even if, strictly speaking they are not covered by the definition,
it is still within the wide discretion of the Court to waive the requirement and so remove the
impediment to its addressing and resolving the serious constitutional questions raised.
In the first Emergency Powers Cases, ordinary citizens and taxpayers were allowed to
question the constitutionality of several executive orders issued by President Quirino
although they were involving only an indirect and general interest shared in common with the
public. The Court dismissed the objection that they were not proper parties and ruled that
"the transcendental importance to the public of these cases demands that they be settled
promptly and definitely, brushing aside, if we must technicalities of procedure." We have
since then applied the exception in many other cases. (Association of Small Landowners in
the Philippines, Inc. v. Sec. of Agrarian Reform, 175 SCRA 343).
Having disposed of the procedural issue, We will now discuss the substantive issues raised.
Gambling in all its forms, unless allowed by law, is generally prohibited. But the prohibition of
gambling does not mean that the Government cannot regulate it in the exercise of its police power.
The concept of police power is well-established in this jurisdiction. It has been defined as the "state
authority to enact legislation that may interfere with personal liberty or property in order to promote
the general welfare." (Edu v. Ericta, 35 SCRA 481, 487) As defined, it consists of (1) an imposition or
restraint upon liberty or property, (2) in order to foster the common good. It is not capable of an exact
definition but has been, purposely, veiled in general terms to underscore its all-comprehensive
embrace. (Philippine Association of Service Exporters, Inc. v. Drilon, 163 SCRA 386).

Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future where it
could be done, provides enough room for an efficient and flexible response to conditions and
circumstances thus assuming the greatest benefits. (Edu v. Ericta, supra)
It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the
charter. Along with the taxing power and eminent domain, it is inborn in the very fact of statehood
and sovereignty. It is a fundamental attribute of government that has enabled it to perform the most
vital functions of governance. Marshall, to whom the expression has been credited, refers to it
succinctly as the plenary power of the state "to govern its citizens". (Tribe, American Constitutional
Law, 323, 1978). The police power of the State is a power co-extensive with self-protection and is
most aptly termed the "law of overwhelming necessity." (Rubi v. Provincial Board of Mindoro, 39 Phil.
660, 708) It is "the most essential, insistent, and illimitable of powers." (Smith Bell & Co. v. National,
40 Phil. 136) It is a dynamic force that enables the state to meet the agencies of the winds of
change.
What was the reason behind the enactment of P.D. 1869?
P.D. 1869 was enacted pursuant to the policy of the government to "regulate and centralize thru an
appropriate institution all games of chance authorized by existing franchise or permitted by law" (1st
whereas clause, PD 1869). As was subsequently proved, regulating and centralizing gambling
operations in one corporate entity the PAGCOR, was beneficial not just to the Government but to
society in general. It is a reliable source of much needed revenue for the cash strapped
Government. It provided funds for social impact projects and subjected gambling to "close scrutiny,
regulation, supervision and control of the Government" (4th Whereas Clause, PD 1869). With the
creation of PAGCOR and the direct intervention of the Government, the evil practices and
corruptions that go with gambling will be minimized if not totally eradicated. Public welfare, then, lies
at the bottom of the enactment of PD 1896.
Petitioners contend that P.D. 1869 constitutes a waiver of the right of the City of Manila to impose
taxes and legal fees; that the exemption clause in P.D. 1869 is violative of the principle of local
autonomy. They must be referring to Section 13 par. (2) of P.D. 1869 which exempts PAGCOR, as
the franchise holder from paying any "tax of any kind or form, income or otherwise, as well as fees,
charges or levies of whatever nature, whether National or Local."
(2) Income and other taxes. a) Franchise Holder: No tax of any kind or form, income or
otherwise as well as fees, charges or levies of whatever nature, whether National or Local,
shall be assessed and collected under this franchise from the Corporation; nor shall any form
or tax or charge attach in any way to the earnings of the Corporation, except a franchise tax
of five (5%) percent of the gross revenues or earnings derived by the Corporation from its
operations under this franchise. Such tax shall be due and payable quarterly to the National
Government and shall be in lieu of all kinds of taxes, levies, fees or assessments of any kind,
nature or description, levied, established or collected by any municipal, provincial or national
government authority (Section 13 [2]).
Their contention stated hereinabove is without merit for the following reasons:
(a) The City of Manila, being a mere Municipal corporation has no inherent right to impose taxes
(Icard v. City of Baguio, 83 Phil. 870; City of Iloilo v. Villanueva, 105 Phil. 337; Santos v. Municipality
of Caloocan, 7 SCRA 643). Thus, "the Charter or statute must plainly show an intent to confer that
power or the municipality cannot assume it" (Medina v. City of Baguio, 12 SCRA 62). Its "power to
tax" therefore must always yield to a legislative act which is superior having been passed upon by
the state itself which has the "inherent power to tax" (Bernas, the Revised [1973] Philippine
Constitution, Vol. 1, 1983 ed. p. 445).
(b) The Charter of the City of Manila is subject to control by Congress. It should be stressed that
"municipal corporations are mere creatures of Congress" (Unson v. Lacson, G.R. No. 7909, January
18, 1957) which has the power to "create and abolish municipal corporations" due to its "general
legislative powers" (Asuncion v. Yriantes, 28 Phil. 67; Merdanillo v. Orandia, 5 SCRA 541).
Congress, therefore, has the power of control over Local governments (Hebron v. Reyes, G.R. No.
9124, July 2, 1950). And if Congress can grant the City of Manila the power to tax certain matters, it
can also provide for exemptions or even take back the power.
(c) The City of Manila's power to impose license fees on gambling, has long been revoked. As early
as 1975, the power of local governments to regulate gambling thru the grant of "franchise, licenses

or permits" was withdrawn by P.D. No. 771 and was vested exclusively on the National Government,
thus:
Sec. 1. Any provision of law to the contrary notwithstanding, the authority of chartered cities
and other local governments to issue license, permit or other form of franchise to operate,
maintain and establish horse and dog race tracks, jai-alai and other forms of gambling is
hereby revoked.
Sec. 2. Hereafter, all permits or franchises to operate, maintain and establish, horse and dog
race tracks, jai-alai and other forms of gambling shall be issued by the national government
upon proper application and verification of the qualification of the applicant . . .
Therefore, only the National Government has the power to issue "licenses or permits" for the
operation of gambling. Necessarily, the power to demand or collect license fees which is a
consequence of the issuance of "licenses or permits" is no longer vested in the City of Manila.
(d) Local governments have no power to tax instrumentalities of the National Government. PAGCOR
is a government owned or controlled corporation with an original charter, PD 1869. All of its shares of
stocks are owned by the National Government. In addition to its corporate powers (Sec. 3, Title II,
PD 1869) it also exercises regulatory powers thus:
Sec. 9. Regulatory Power. The Corporation shall maintain a Registry of the affiliated
entities, and shall exercise all the powers, authority and the responsibilities vested in the
Securities and Exchange Commission over such affiliating entities mentioned under the
preceding section, including, but not limited to amendments of Articles of Incorporation and
By-Laws, changes in corporate term, structure, capitalization and other matters concerning
the operation of the affiliated entities, the provisions of the Corporation Code of the
Philippines to the contrary notwithstanding, except only with respect to original incorporation.
PAGCOR has a dual role, to operate and to regulate gambling casinos. The latter role is
governmental, which places it in the category of an agency or instrumentality of the Government.
Being an instrumentality of the Government, PAGCOR should be and actually is exempt from local
taxes. Otherwise, its operation might be burdened, impeded or subjected to control by a mere Local
government.
The states have no power by taxation or otherwise, to retard, impede, burden or in any
manner control the operation of constitutional laws enacted by Congress to carry into
execution the powers vested in the federal government. (MC Culloch v. Marland, 4 Wheat
316, 4 L Ed. 579)
This doctrine emanates from the "supremacy" of the National Government over local governments.
Justice Holmes, speaking for the Supreme Court, made reference to the entire absence of
power on the part of the States to touch, in that way (taxation) at least, the instrumentalities
of the United States (Johnson v. Maryland, 254 US 51) and it can be agreed that no state or
political subdivision can regulate a federal instrumentality in such a way as to prevent it from
consummating its federal responsibilities, or even to seriously burden it in the
accomplishment of them. (Antieau, Modern Constitutional Law, Vol. 2, p. 140, emphasis
supplied)
Otherwise, mere creatures of the State can defeat National policies thru extermination of what local
authorities may perceive to be undesirable activities or enterprise using the power to tax as "a tool
for regulation" (U.S. v. Sanchez, 340 US 42).
The power to tax which was called by Justice Marshall as the "power to destroy" (Mc Culloch v.
Maryland, supra) cannot be allowed to defeat an instrumentality or creation of the very entity which
has the inherent power to wield it.
(e) Petitioners also argue that the Local Autonomy Clause of the Constitution will be violated by P.D.
1869. This is a pointless argument. Article X of the 1987 Constitution (on Local Autonomy) provides:
Sec. 5. Each local government unit shall have the power to create its own source of revenue
and to levy taxes, fees, and other charges subject to such guidelines and limitation as the

congress may provide, consistent with the basic policy on local autonomy. Such taxes, fees
and charges shall accrue exclusively to the local government. (emphasis supplied)
The power of local government to "impose taxes and fees" is always subject to "limitations" which
Congress may provide by law. Since PD 1869 remains an "operative" law until "amended, repealed
or revoked" (Sec. 3, Art. XVIII, 1987 Constitution), its "exemption clause" remains as an exception to
the exercise of the power of local governments to impose taxes and fees. It cannot therefore be
violative but rather is consistent with the principle of local autonomy.
Besides, the principle of local autonomy under the 1987 Constitution simply means
"decentralization" (III Records of the 1987 Constitutional Commission, pp. 435-436, as cited in
Bernas, The Constitution of the Republic of the Philippines, Vol. II, First Ed., 1988, p. 374). It does
not make local governments sovereign within the state or an "imperium in imperio."
Local Government has been described as a political subdivision of a nation or state which is
constituted by law and has substantial control of local affairs. In a unitary system of
government, such as the government under the Philippine Constitution, local governments
can only be an intra sovereign subdivision of one sovereign nation, it cannot be
an imperium in imperio. Local government in such a system can only mean a measure of
decentralization of the function of government. (emphasis supplied)
As to what state powers should be "decentralized" and what may be delegated to local government
units remains a matter of policy, which concerns wisdom. It is therefore a political question. (Citizens
Alliance for Consumer Protection v. Energy Regulatory Board, 162 SCRA 539).
What is settled is that the matter of regulating, taxing or otherwise dealing with gambling is a State
concern and hence, it is the sole prerogative of the State to retain it or delegate it to local
governments.
As gambling is usually an offense against the State, legislative grant or express charter
power is generally necessary to empower the local corporation to deal with the subject. . . .
In the absence of express grant of power to enact, ordinance provisions on this subject
which are inconsistent with the state laws are void. (Ligan v. Gadsden, Ala App. 107 So. 733
Ex-Parte Solomon, 9, Cals. 440, 27 PAC 757 following in re Ah You, 88 Cal. 99, 25 PAC 974,
22 Am St. Rep. 280, 11 LRA 480, as cited in Mc Quinllan Vol. 3 Ibid, p. 548, emphasis
supplied)
Petitioners next contend that P.D. 1869 violates the equal protection clause of the Constitution,
because "it legalized PAGCOR conducted gambling, while most gambling are outlawed together
with prostitution, drug trafficking and other vices" (p. 82, Rollo).
We, likewise, find no valid ground to sustain this contention. The petitioners' posture ignores the
well-accepted meaning of the clause "equal protection of the laws." The clause does not preclude
classification of individuals who may be accorded different treatment under the law as long as the
classification is not unreasonable or arbitrary (Itchong v. Hernandez, 101 Phil. 1155). A law does not
have to operate in equal force on all persons or things to be conformable to Article III, Section 1 of
the Constitution (DECS v. San Diego, G.R. No. 89572, December 21, 1989).
The "equal protection clause" does not prohibit the Legislature from establishing classes of
individuals or objects upon which different rules shall operate (Laurel v. Misa, 43 O.G. 2847). The
Constitution does not require situations which are different in fact or opinion to be treated in law as
though they were the same (Gomez v. Palomar, 25 SCRA 827).
Just how P.D. 1869 in legalizing gambling conducted by PAGCOR is violative of the equal protection
is not clearly explained in the petition. The mere fact that some gambling activities like cockfighting
(P.D 449) horse racing (R.A. 306 as amended by RA 983), sweepstakes, lotteries and races (RA
1169 as amended by B.P. 42) are legalized under certain conditions, while others are prohibited,
does not render the applicable laws, P.D. 1869 for one, unconstitutional.
If the law presumably hits the evil where it is most felt, it is not to be overthrown because
there are other instances to which it might have been applied. (Gomez v. Palomar, 25 SCRA
827)

The equal protection clause of the 14th Amendment does not mean that all occupations
called by the same name must be treated the same way; the state may do what it can to
prevent which is deemed as evil and stop short of those cases in which harm to the few
concerned is not less than the harm to the public that would insure if the rule laid down were
made mathematically exact. (Dominican Hotel v. Arizona, 249 US 2651).
Anent petitioners' claim that PD 1869 is contrary to the "avowed trend of the Cory Government away
from monopolies and crony economy and toward free enterprise and privatization" suffice it to state
that this is not a ground for this Court to nullify P.D. 1869. If, indeed, PD 1869 runs counter to the
government's policies then it is for the Executive Department to recommend to Congress its repeal
or amendment.
The judiciary does not settle policy issues. The Court can only declare what the law is and
not what the law should be. Under our system of government, policy issues are within the
domain of the political branches of government and of the people themselves as the
repository of all state power. (Valmonte v. Belmonte, Jr., 170 SCRA 256).
1wphi1

On the issue of "monopoly," however, the Constitution provides that:

Sec. 19. The State shall regulate or prohibit monopolies when public interest so requires. No
combinations in restraint of trade or unfair competition shall be allowed. (Art. XII, National
Economy and Patrimony)
It should be noted that, as the provision is worded, monopolies are not necessarily prohibited by the
Constitution. The state must still decide whether public interest demands that monopolies be
regulated or prohibited. Again, this is a matter of policy for the Legislature to decide.
On petitioners' allegation that P.D. 1869 violates Sections 11 (Personality Dignity) 12 (Family) and 13
(Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII and Section 2 (Educational
Values) of Article XIV of the 1987 Constitution, suffice it to state also that these are merely
statements of principles and, policies. As such, they are basically not self-executing, meaning a law
should be passed by Congress to clearly define and effectuate such principles.
In general, therefore, the 1935 provisions were not intended to be self-executing principles
ready for enforcement through the courts. They were rather directives addressed to the
executive and the legislature. If the executive and the legislature failed to heed the directives
of the articles the available remedy was not judicial or political. The electorate could express
their displeasure with the failure of the executive and the legislature through the language of
the ballot. (Bernas, Vol. II, p. 2)
Every law has in its favor the presumption of constitutionality (Yu Cong Eng v. Trinidad, 47 Phil. 387;
Salas v. Jarencio, 48 SCRA 734; Peralta v. Comelec, 82 SCRA 30; Abbas v. Comelec, 179 SCRA
287). Therefore, for PD 1869 to be nullified, it must be shown that there is a clear and unequivocal
breach of the Constitution, not merely a doubtful and equivocal one. In other words, the grounds for
nullity must be clear and beyond reasonable doubt. (Peralta v. Comelec, supra) Those who petition
this Court to declare a law, or parts thereof, unconstitutional must clearly establish the basis for such
a declaration. Otherwise, their petition must fail. Based on the grounds raised by petitioners to
challenge the constitutionality of P.D. 1869, the Court finds that petitioners have failed to overcome
the presumption. The dismissal of this petition is therefore, inevitable. But as to whether P.D. 1869
remains a wise legislation considering the issues of "morality, monopoly, trend to free enterprise,
privatization as well as the state principles on social justice, role of youth and educational values"
being raised, is up for Congress to determine.
As this Court held in Citizens' Alliance for Consumer Protection v. Energy Regulatory Board, 162
SCRA 521
Presidential Decree No. 1956, as amended by Executive Order No. 137 has, in any case, in
its favor the presumption of validity and constitutionality which petitioners Valmonte and the
KMU have not overturned. Petitioners have not undertaken to identify the provisions in the
Constitution which they claim to have been violated by that statute. This Court, however, is
not compelled to speculate and to imagine how the assailed legislation may possibly offend
some provision of the Constitution. The Court notes, further, in this respect that petitioners
have in the main put in question the wisdom, justice and expediency of the establishment of

the OPSF, issues which are not properly addressed to this Court and which this Court may
not constitutionally pass upon. Those issues should be addressed rather to the political
departments of government: the President and the Congress.
Parenthetically, We wish to state that gambling is generally immoral, and this is precisely so when
the gambling resorted to is excessive. This excessiveness necessarily depends not only on the
financial resources of the gambler and his family but also on his mental, social, and spiritual outlook
on life. However, the mere fact that some persons may have lost their material fortunes, mental
control, physical health, or even their lives does not necessarily mean that the same are directly
attributable to gambling. Gambling may have been the antecedent, but certainly not necessarily the
cause. For the same consequences could have been preceded by an overdose of food, drink,
exercise, work, and even sex.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.
Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Feliciano, Gancayco, Bidin, Sarmiento, Grio-Aquino,
Medialdea, Regalado and Davide, Jr., JJ., concur.

Separate Opinions
PADILLA, J., concurring:
I concur in the result of the learned decision penned by my brother Mr. Justice Paras. This means
that I agree with the decision insofar as it holds that the prohibition, control, and regulation of the
entire activity known as gambling properly pertain to "state policy." It is, therefore, the political
departments of government, namely, the legislative and the executive that should decide on what
government should do in the entire area of gambling, and assume full responsibility to the people for
such policy.
The courts, as the decision states, cannot inquire into the wisdom, morality or expediency of policies
adopted by the political departments of government in areas which fall within their authority, except
only when such policies pose a clear and present danger to the life, liberty or property of the
individual. This case does not involve such a factual situation.
However, I hasten to make of record that I do not subscribe to gambling in any form. It demeans the
human personality, destroys self-confidence and eviscerates one's self-respect, which in the long run
will corrode whatever is left of the Filipino moral character. Gambling has wrecked and will continue
to wreck families and homes; it is an antithesis to individual reliance and reliability as well as
personal industry which are the touchstones of real economic progress and national development.
Gambling is reprehensible whether maintained by government or privatized. The revenues realized
by the government out of "legalized" gambling will, in the long run, be more than offset and negated
by the irreparable damage to the people's moral values.
Also, the moral standing of the government in its repeated avowals against "illegal gambling" is
fatally flawed and becomes untenable when it itself engages in the very activity it seeks to eradicate.
One can go through the Court's decision today and mentally replace the activity referred to therein
as gambling, which is legal only because it is authorized by law and run by the government, with the
activity known asprostitution. Would prostitution be any less reprehensible were it to be authorized
by law, franchised, and "regulated" by the government, in return for the substantial revenues it would
yield the government to carry out its laudable projects, such as infrastructure and social
amelioration? The question, I believe, answers itself. I submit that the sooner the legislative
department outlaws all forms of gambling, as a fundamental state policy, and the sooner the
executive implements such policy, the better it will be for the nation.

G.R. No. 80391 February 28, 1989

SULTAN ALIMBUSAR P. LIMBONA, petitioner,
vs.
CONTE MANGELIN, SALIC ALI, SALINDATO ALI, PILIMPINAS CONDING, ACMAD TOMAWIS,
GERRY TOMAWIS, JESUS ORTIZ, ANTONIO DELA FUENTE, DIEGO PALOMARES, JR., RAUL
DAGALANGIT, and BIMBO SINSUAT, respondents.
Ambrosio Padilla, Mempin & Reyes Law Offices for petitioner petitioner.
Makabangkit B. Lanto for respondents.

SARMIENTO, J.:
The acts of the Sangguniang Pampook of Region XII are assailed in this petition. The antecedent
facts are as follows:
1. On September 24, 1986, petitioner Sultan Alimbusar Limbona was appointed as a
member of the Sangguniang Pampook, Regional Autonomous Government, Region
XII, representing Lanao del Sur.
2. On March 12, 1987 petitioner was elected Speaker of the Regional Legislative
Assembly or Batasang Pampook of Central Mindanao (Assembly for brevity).
3. Said Assembly is composed of eighteen (18) members. Two of said members,
respondents Acmad Tomawis and Pakil Dagalangit, filed on March 23, 1987 with the
Commission on Elections their respective certificates of candidacy in the May 11,
1987 congressional elections for the district of Lanao del Sur but they later withdrew

from the aforesaid election and thereafter resumed again their positions as members
of the Assembly.
4. On October 21, 1987 Congressman Datu Guimid Matalam, Chairman of the
Committee on Muslim Affairs of the House of Representatives, invited Mr. Xavier
Razul, Pampook Speaker of Region XI, Zamboanga City and the petitioner in his
capacity as Speaker of the Assembly, Region XII, in a letter which reads:
The Committee on Muslim Affairs well undertake consultations and
dialogues with local government officials, civic, religious organizations
and traditional leaders on the recent and present political
developments and other issues affecting Regions IX and XII.
The result of the conference, consultations and dialogues would
hopefully chart the autonomous governments of the two regions as
envisioned and may prod the President to constitute immediately the
Regional Consultative Commission as mandated by the Commission.
You are requested to invite some members of the Pampook
Assembly of your respective assembly on November 1 to 15, 1987,
with venue at the Congress of the Philippines. Your presence,
unstinted support and cooperation is (sic) indispensable.
5. Consistent with the said invitation, petitioner sent a telegram to Acting Secretary
Johnny Alimbuyao of the Assembly to wire all Assemblymen that there shall be no
session in November as "our presence in the house committee hearing of Congress
take (sic) precedence over any pending business in batasang pampook ... ."
6. In compliance with the aforesaid instruction of the petitioner, Acting Secretary
Alimbuyao sent to the members of the Assembly the following telegram:
TRANSMITTING FOR YOUR INFORMATION AND GUIDANCE
TELEGRAM RECEIVED FROM SPEAKER LIMBONA QUOTE
CONGRESSMAN JIMMY MATALAM CHAIRMAN OF THE HOUSE
COMMITTEE ON MUSLIM AFFAIRS REQUESTED ME TO ASSIST
SAID COMMITTEE IN THE DISCUSSION OF THE PROPOSED
AUTONOMY ORGANIC NOV. 1ST TO 15. HENCE WERE ALL
ASSEMBLYMEN THAT THERE SHALL BE NO SESSION IN
NOVEMBER AS OUR PRESENCE IN THE HOUSE COMMITTEE
HEARING OF CONGRESS TAKE PRECEDENCE OVER ANY
PENDING BUSINESS IN BATASANG PAMPOOK OF MATALAM
FOLLOWS UNQUOTE REGARDS.
7. On November 2, 1987, the Assembly held session in defiance of petitioner's
advice, with the following assemblymen present:
1. Sali, Salic
2. Conding, Pilipinas (sic)
3. Dagalangit, Rakil
4. Dela Fuente, Antonio
5. Mangelen, Conte
6. Ortiz, Jesus

7. Palomares, Diego
8. Sinsuat, Bimbo
9. Tomawis, Acmad
10. Tomawis, Jerry
After declaring the presence of a quorum, the Speaker Pro-Tempore was authorized
to preside in the session. On Motion to declare the seat of the Speaker vacant, all
Assemblymen in attendance voted in the affirmative, hence, the chair declared said
seat of the Speaker vacant. 8. On November 5, 1987, the session of the Assembly
resumed with the following Assemblymen present:
1. Mangelen Conte-Presiding Officer
2. Ali Salic
3. Ali Salindatu
4. Aratuc, Malik
5. Cajelo, Rene
6. Conding, Pilipinas (sic)
7. Dagalangit, Rakil
8. Dela Fuente, Antonio
9. Ortiz, Jesus
10 Palomares, Diego
11. Quijano, Jesus
12. Sinsuat, Bimbo
13. Tomawis, Acmad
14. Tomawis, Jerry
An excerpt from the debates and proceeding of said session reads:
HON. DAGALANGIT: Mr. Speaker, Honorable Members of the House, with the
presence of our colleagues who have come to attend the session today, I move to
call the names of the new comers in order for them to cast their votes on the
previous motion to declare the position of the Speaker vacant. But before doing so, I
move also that the designation of the Speaker Pro Tempore as the Presiding Officer
and Mr. Johnny Evangelists as Acting Secretary in the session last November 2,
1987 be reconfirmed in today's session.
HON. SALIC ALI: I second the motions.
PRESIDING OFFICER: Any comment or objections on the two motions presented?
Me chair hears none and the said motions are approved. ...

Twelve (12) members voted in favor of the motion to declare the seat of the Speaker
vacant; one abstained and none voted against. 1
Accordingly, the petitioner prays for judgment as follows:

WHEREFORE, petitioner respectfully prays that(a) This Petition be given due course;
(b) Pending hearing, a restraining order or writ of preliminary injunction be issued
enjoining respondents from proceeding with their session to be held on November 5,
1987, and on any day thereafter;
(c) After hearing, judgment be rendered declaring the proceedings held by
respondents of their session on November 2, 1987 as null and void;
(d) Holding the election of petitioner as Speaker of said Legislative Assembly or
Batasan Pampook, Region XII held on March 12, 1987 valid and subsisting, and
(e) Making the injunction permanent.
Petitioner likewise prays for such other relief as may be just and equitable.

Pending further proceedings, this Court, on January 19, 1988, received a resolution filed by the
Sangguniang Pampook, "EXPECTING ALIMBUSAR P. LIMBONA FROM MEMBERSHIP OF THE
SANGGUNIANG PAMPOOK AUTONOMOUS REGION XII," 3 on the grounds, among other things, that
the petitioner "had caused to be prepared and signed by him paying [sic] the salaries and emoluments of
Odin Abdula, who was considered resigned after filing his Certificate of Candidacy for Congressmen for
the First District of Maguindanao in the last May 11, elections. . . and nothing in the record of the
Assembly will show that any request for reinstatement by Abdula was ever made . . ." 4 and that "such
action of Mr. Lim bona in paying Abdula his salaries and emoluments without authority from the
Assembly . . . constituted a usurpation of the power of the Assembly," 5 that the petitioner "had recently
caused withdrawal of so much amount of cash from the Assembly resulting to the non-payment of the
salaries and emoluments of some Assembly [sic]," 6 and that he had "filed a case before the Supreme
Court against some members of the Assembly on question which should have been resolved within the
confines of the Assembly," 7 for which the respondents now submit that the petition had become "moot
and academic". 8
The first question, evidently, is whether or not the expulsion of the petitioner (pending litigation) has
made the case moot and academic.
We do not agree that the case has been rendered moot and academic by reason simply of the
expulsion resolution so issued. For, if the petitioner's expulsion was done purposely to make this
petition moot and academic, and to preempt the Court, it will not make it academic.
On the ground of the immutable principle of due process alone, we hold that the expulsion in
question is of no force and effect. In the first place, there is no showing that the Sanggunian had
conducted an investigation, and whether or not the petitioner had been heard in his defense,
assuming that there was an investigation, or otherwise given the opportunity to do so. On the other
hand, what appears in the records is an admission by the Assembly (at least, the respondents) that
"since November, 1987 up to this writing, the petitioner has not set foot at the Sangguniang
Pampook." 9 "To be sure, the private respondents aver that "[t]he Assemblymen, in a conciliatory gesture,
wanted him to come to Cotabato City," 10 but that was "so that their differences could be threshed out and
settled."11 Certainly, that avowed wanting or desire to thresh out and settle, no matter how conciliatory it
may be cannot be a substitute for the notice and hearing contemplated by law.

While we have held that due process, as the term is known in administrative law, does not absolutely
require notice and that a party need only be given the opportunity to be heard, 12 it does not appear
herein that the petitioner had, to begin with, been made aware that he had in fact stood charged of graft
and corruption before his collegues. It cannot be said therefore that he was accorded any opportunity to
rebut their accusations. As it stands, then, the charges now levelled amount to mere accusations that
cannot warrant expulsion.
In the second place, (the resolution) appears strongly to be a bare act of vendetta by the other
Assemblymen against the petitioner arising from what the former perceive to be abduracy on the
part of the latter. Indeed, it (the resolution) speaks of "a case [having been filed] [by the petitioner]
before the Supreme Court . . . on question which should have been resolved within the confines of
the Assemblyman act which some members claimed unnecessarily and unduly assails their integrity
and character as representative of the people" 13 an act that cannot possibly justify expulsion. Access to
judicial remedies is guaranteed by the Constitution, 14 and, unless the recourse amounts to malicious
prosecution, no one may be punished for seeking redress in the courts.
We therefore order reinstatement, with the caution that should the past acts of the petitioner indeed
warrant his removal, the Assembly is enjoined, should it still be so minded, to commence proper
proceedings therefor in line with the most elementary requirements of due process. And while it is
within the discretion of the members of the Sanggunian to punish their erring colleagues, their acts
are nonetheless subject to the moderating band of this Court in the event that such discretion is
exercised with grave abuse.
It is, to be sure, said that precisely because the Sangguniang Pampook(s) are "autonomous," the
courts may not rightfully intervene in their affairs, much less strike down their acts. We come,
therefore, to the second issue: Are the so-called autonomous governments of Mindanao, as they are
now constituted, subject to the jurisdiction of the national courts? In other words, what is the extent
of self-government given to the two autonomous governments of Region IX and XII?
The autonomous governments of Mindanao were organized in Regions IX and XII by Presidential
Decree No. 1618 15 promulgated on July 25, 1979. Among other things, the Decree established "internal
autonomy" 16 in the two regions "[w]ithin the framework of the national sovereignty and territorial integrity
of the Republic of the Philippines and its Constitution," 17 with legislative and executive machinery to
exercise the powers and responsibilities 18 specified therein.
It requires the autonomous regional governments to "undertake all internal administrative matters for
the respective regions," 19 except to "act on matters which are within the jurisdiction and competence of
the National Government," 20 "which include, but are not limited to, the following:
(1) National defense and security;
(2) Foreign relations;
(3) Foreign trade;
(4) Currency, monetary affairs, foreign exchange, banking and quasi-banking, and
external borrowing,
(5) Disposition, exploration, development, exploitation or utilization of all natural
resources;
(6) Air and sea transport
(7) Postal matters and telecommunications;
(8) Customs and quarantine;

(9) Immigration and deportation;

(10) Citizenship and naturalization;
(11) National economic, social and educational planning; and
(12) General auditing. 21
In relation to the central government, it provides that "[t]he President shall have the power of general
supervision and control over the Autonomous Regions ..." 22
Now, autonomy is either decentralization of administration or decentralization of power. There is
decentralization of administration when the central government delegates administrative powers to
political subdivisions in order to broaden the base of government power and in the process to make
local governments "more responsive and accountable," 23 "and ensure their fullest development as selfreliant communities and make them more effective partners in the pursuit of national development and
social progress." 24 At the same time, it relieves the central government of the burden of managing local
affairs and enables it to concentrate on national concerns. The President exercises "general
supervision" 25 over them, but only to "ensure that local affairs are administered according to law." 26 He
has no control over their acts in the sense that he can substitute their judgments with his own. 27
Decentralization of power, on the other hand, involves an abdication of political power in the favor of
local governments units declare to be autonomous . In that case, the autonomous government is
free to chart its own destiny and shape its future with minimum intervention from central authorities.
According to a constitutional author, decentralization of power amounts to "self-immolation," since in
that event, the autonomous government becomes accountable not to the central authorities but to its
constituency. 28
But the question of whether or not the grant of autonomy Muslim Mindanao under the 1987
Constitution involves, truly, an effort to decentralize power rather than mere administration is a
question foreign to this petition, since what is involved herein is a local government unit constituted
prior to the ratification of the present Constitution. Hence, the Court will not resolve that controversy
now, in this case, since no controversy in fact exists. We will resolve it at the proper time and in the
proper case.
Under the 1987 Constitution, local government units enjoy autonomy in these two senses, thus:
Section 1. The territorial and political subdivisions of the Republic of the Philippines
are the provinces, cities, municipalities, and barangays. Here shall be autonomous
regions in Muslim Mindanao ,and the Cordilleras as hereinafter provided. 29
Sec. 2. The territorial and political subdivisions shall enjoy local autonomy. 30
xxx xxx xxx

See. 15. Mere shall be created 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, economic and social
structures, and other relevant characteristics within the framework of this Constitution
and the national sovereignty as well as territorial integrity of the Republic of the
Philippines. 31
An autonomous government that enjoys autonomy of the latter category [CONST. (1987), art. X, sec.
15.] is subject alone to the decree of the organic act creating it and accepted principles on the
effects and limits of "autonomy." On the other hand, an autonomous government of the former class
is, as we noted, under the supervision of the national government acting through the President (and
the Department of Local Government).32 If the Sangguniang Pampook (of Region XII), then, is

autonomous in the latter sense, its acts are, debatably beyond the domain of this Court in perhaps the
same way that the internal acts, say, of the Congress of the Philippines are beyond our jurisdiction. But if
it is autonomous in the former category only, it comes unarguably under our jurisdiction. An examination
of the very Presidential Decree creating the autonomous governments of Mindanao persuades us that
they were never meant to exercise autonomy in the second sense, that is, in which the central
government commits an act of self-immolation. Presidential Decree No. 1618, in the first place, mandates
that "[t]he President shall have the power of general supervision and control over Autonomous
Regions." 33 In the second place, the Sangguniang Pampook, their legislative arm, is made to discharge
chiefly administrative services, thus:

SEC. 7. Powers of the Sangguniang Pampook. The Sangguniang Pampook shall

exercise local legislative powers over regional affairs within the framework of national
development plans, policies and goals, in the following areas:
(1) Organization of regional administrative system;
(2) Economic, social and cultural development of the Autonomous Region;
(3) Agricultural, commercial and industrial programs for the Autonomous Region;
(4) Infrastructure development for the Autonomous Region;
(5) Urban and rural planning for the Autonomous Region;
(6) Taxation and other revenue-raising measures as provided for in this Decree;
(7) Maintenance, operation and administration of schools established by the
Autonomous Region;
(8) Establishment, operation and maintenance of health, welfare and other social
services, programs and facilities;
(9) Preservation and development of customs, traditions, languages and culture
indigenous to the Autonomous Region; and
(10) Such other matters as may be authorized by law,including the enactment of
such measures as may be necessary for the promotion of the general welfare of the
people in the Autonomous Region.
The President shall exercise such powers as may be necessary to assure that
enactment and acts of the Sangguniang Pampook and the Lupong Tagapagpaganap
ng Pook are in compliance with this Decree, national legislation, policies, plans and
programs.
The Sangguniang Pampook shall maintain liaison with the Batasang Pambansa.

34

Hence, we assume jurisdiction. And if we can make an inquiry in the validity of the expulsion in
question, with more reason can we review the petitioner's removal as Speaker.
Briefly, the petitioner assails the legality of his ouster as Speaker on the grounds that: (1) the
Sanggunian, in convening on November 2 and 5, 1987 (for the sole purpose of declaring the office of
the Speaker vacant), did so in violation of the Rules of the Sangguniang Pampook since the
Assembly was then on recess; and (2) assuming that it was valid, his ouster was ineffective
nevertheless for lack of quorum.
Upon the facts presented, we hold that the November 2 and 5, 1987 sessions were invalid. It is true
that under Section 31 of the Region XII Sanggunian Rules, "[s]essions shall not be suspended or

adjourned except by direction of the Sangguniang Pampook," 35 but it provides likewise that "the
Speaker may, on [sic] his discretion, declare a recess of "short intervals." 36 Of course, there is
disagreement between the protagonists as to whether or not the recess called by the petitioner effective
November 1 through 15, 1987 is the "recess of short intervals" referred to; the petitioner says that it is
while the respondents insist that, to all intents and purposes, it was an adjournment and that "recess" as
used by their Rules only refers to "a recess when arguments get heated up so that protagonists in a
debate can talk things out informally and obviate dissenssion [sic] and disunity. 37 The Court agrees with
the respondents on this regard, since clearly, the Rules speak of "short intervals." Secondly, the Court
likewise agrees that the Speaker could not have validly called a recess since the Assembly had yet to
convene on November 1, the date session opens under the same Rules. 38 Hence, there can be no
recess to speak of that could possibly interrupt any session. But while this opinion is in accord with the
respondents' own, we still invalidate the twin sessions in question, since at the time the petitioner called
the "recess," it was not a settled matter whether or not he could. do so. In the second place, the invitation
tendered by the Committee on Muslim Affairs of the House of Representatives provided a plausible
reason for the intermission sought. Thirdly, assuming that a valid recess could not be called, it does not
appear that the respondents called his attention to this mistake. What appears is that instead, they
opened the sessions themselves behind his back in an apparent act of mutiny. Under the circumstances,
we find equity on his side. For this reason, we uphold the "recess" called on the ground of good faith.
It does not appear to us, moreover, that the petitioner had resorted to the aforesaid "recess" in order
to forestall the Assembly from bringing about his ouster. This is not apparent from the pleadings
before us. We are convinced that the invitation was what precipitated it.
In holding that the "recess" in question is valid, we are not to be taken as establishing a precedent,
since, as we said, a recess can not be validly declared without a session having been first opened.
In upholding the petitioner herein, we are not giving him a carte blanche to order recesses in the
future in violation of the Rules, or otherwise to prevent the lawful meetings thereof.
Neither are we, by this disposition, discouraging the Sanggunian from reorganizing itself pursuant to
its lawful prerogatives. Certainly, it can do so at the proper time. In the event that be petitioner
should initiate obstructive moves, the Court is certain that it is armed with enough coercive remedies
to thwart them. 39
In view hereof, we find no need in dwelling on the issue of quorum.
WHEREFORE, premises considered, the petition is GRANTED. The Sangguniang Pampook, Region
XII, is ENJOINED to (1) REINSTATE the petitioner as Member, Sangguniang Pampook, Region XII;
and (2) REINSTATE him as Speaker thereof. No costs.
SO ORDERED.

G.R. No. 93252 August 5, 1991

RODOLFO T. GANZON, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and LUIS T. SANTOS, respondents.
G.R. No. 93746 August 5,1991
MARY ANN RIVERA ARTIEDA, petitioner,
vs.
HON. LUIS SANTOS, in his capacity as Secretary of the Department of Local Government,
NICANOR M. PATRICIO, in his capacity as Chief, Legal Service of the Department of Local
Government and SALVADOR CABALUNA JR., respondents.
G.R. No. 95245 August 5,1991
RODOLFO T. GANZON, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and LUIS T. SANTOS, in his capacity as the
Secretary of the Department of Local Government, respondents.
Nicolas P. Sonalan for petitioner in 93252.
Romeo A. Gerochi for petitioner in 93746.
Eugenio Original for petitioner in 95245.

SARMIENTO, J.:p
The petitioners take common issue on the power of the President (acting through the Secretary of
Local Government), to suspend and/or remove local officials.
The petitioners are the Mayor of Iloilo City (G.R. Nos. 93252 and 95245) and a member of the
Sangguniang Panglunsod thereof (G.R. No. 93746), respectively.
The petitions of Mayor Ganzon originated from a series of administrative complaints, ten in number,
filed against him by various city officials sometime in 1988, on various charges, among them, abuse
of authority, oppression, grave misconduct, disgraceful and immoral conduct, intimidation, culpable
violation of the Constitution, and arbitrary detention. 1 The personalities involved are Joceleehn
Cabaluna, a clerk at the city health office; Salvador Cabaluna, her husband; Dr. Felicidad Ortigoza,
Assistant City Health Officer; Mansueto Malabor, Vice-Mayor; Rolando Dabao, Dan Dalido, German
Gonzales, Larry Ong, and Eduardo Pefia Redondo members of the Sangguniang Panglunsod; and
Pancho Erbite, a barangay tanod. The complaints against the Mayor are set forth in the opinion of the
respondent Court of Appeals. 2 We quote:
xxx xxx xxx

In her verified complaint (Annex A), Mrs. Cabaluna, a clerk assigned to the City
Health, Office of Iloilo City charged that due to political reasons, having supported
the rival candidate, Mrs. Rosa 0. Caram, the petitioner City Mayor, using as an
excuse the exigency of the service and the interest of the public, pulled her out from
rightful office where her qualifications are best suited and assigned her to a work that
should be the function of a non-career service employee. To make matters worse, a
utility worker in the office of the Public Services, whose duties are alien to the
complainant's duties and functions, has been detailed to take her place. The
petitioner's act are pure harassments aimed at luring her away from her permanent
position or force her to resign.
In the case of Dra. Felicidad Ortigoza, she claims that the petitioner handpicked her
to perform task not befitting her position as Assistant City Health Officer of Iloilo City;
that her office was padlocked without any explanation or justification; that her salary
was withheld without cause since April 1, 1988; that when she filed her vacation
leave, she was given the run-around treatment in the approval of her leave in
connivance with Dr. Rodolfo Villegas and that she was the object of a wellengineered trumped-up charge in an administrative complaint filed by Dr. Rodolfo
Villegas (Annex B).
On the other hand, Mansuelo Malabor is the duly elected Vice-Mayor of Iloilo City
and complainants Rolando Dabao, Dan Dalido, German Gonzales, Larry Ong and
Eduardo Pefia Pedondo are members of the Sangguniang Panglunsod of the City of
Iloilo. Their complaint arose out from the case where Councilor Larry Ong, whose
key to his office was unceremoniously and without previous notice, taken by
petitioner. Without an office, Councilor Ong had to hold office at Plaza Libertad, The
Vice-Mayor and the other complainants sympathized with him and decided to do the
same. However, the petitioner, together with its fully-armed security men, forcefully
drove them away from Plaza Libertad. Councilor Ong denounced the petitioner's
actuations the following day in the radio station and decided to hold office at the
Freedom Grandstand at Iloilo City and there were so many people who gathered to
witness the incident. However, before the group could reach the area, the petitioner,
together with his security men, led the firemen using a firetruck in dozing water to the
people and the bystanders.
Another administrative case was filed by Pancho Erbite, a barangay tanod, appointed
by former mayor Rosa O. Caram. On March 13, 1988, without the benefit of charges
filed against him and no warrant of arrest was issued, Erbite was arrested and
detained at the City Jail of Iloilo City upon orders of petitioner. In jail, he was
allegedly mauled by other detainees thereby causing injuries He was released only
the following day. 3
The Mayor thereafter answered 4 and the cases were shortly set for hearing. The opinion of the Court of
Appeals also set forth the succeeding events:
xxx xxx xxx
The initial hearing in the Cabaluna and Ortigoza cases were set for hearing on June
20-21, 1988 at the Regional Office of the Department of Local Government in Iloilo
City. Notices, through telegrams, were sent to the parties (Annex L) and the parties
received them, including the petitioner. The petitioner asked for a postponement
before the scheduled date of hearing and was represented by counsel, Atty. Samuel
Castro. The hearing officers, Atty. Salvador Quebral and Atty. Marino Bermudez had
to come all the way from Manila for the two-day hearings but was actually held only
on June 20,1988 in view of the inability and unpreparedness of petitioner's counsel.

The next hearings were re-set to July 25, 26, 27,1988 in the same venue-Iloilo City.
Again, the petitioner attempted to delay the proceedings and moved for a
postponement under the excuse that he had just hired his counsel. Nonetheless, the
hearing officers denied the motion to postpone, in view of the fact that the parties
were notified by telegrams of the scheduled hearings (Annex M).
In the said hearings, petitioner's counsel cross-examined the complainants and their
witnesses.
Finding probable grounds and reasons, the respondent issued a preventive
suspension order on August 11, 1988 to last until October 11,1988 for a period of
sixty (60) days.
Then the next investigation was set on September 21, 1988 and the petitioner again
asked for a postponement to September 26,1988. On September 26, 1988, the
complainants and petitioner were present, together with their respective counsel. The
petitioner sought for a postponement which was denied. In these hearings which
were held in Mala the petitioner testified in Adm. Case No. C-10298 and 10299.
The investigation was continued regarding the Malabor case and the complainants
testified including their witnesses.
On October 10, 1988, petitioner's counsel, Atty. Original moved for a postponement
of the October 24, 1988 hearing to November 7 to 11, 1988 which was granted.
However, the motion for change of venue as denied due to lack of funds. At the
hearing on November 7, 1988, the parties and counsel were present. Petitioner
reiterated his motion to change venue and moved for postponement anew. The
counsel discussed a proposal to take the deposition of witnesses in Iloilo City so the
hearing was indefinitely postponed. However, the parties failed to come to terms and
after the parties were notified of the hearing, the investigation was set to December
13 to 15, 1988.
The petitioner sought for another postponement on the ground that his witnesses
were sick or cannot attend the investigation due to lack of transportation. The motion
was denied and the petitioner was given up to December 14, 1988 to present his
evidence.
On December 14,1988, petitioner's counsel insisted on his motion for postponement
and the hearing officers gave petitioner up to December 15, 1988 to present his
evidence. On December 15, 1988, the petitioner failed to present evidence and the
cases were considered submitted for resolution.
In the meantime, a prima facie evidence was found to exist in the arbitrary detention
case filed by Pancho Erbite so the respondent ordered the petitioner's second
preventive suspension dated October 11, 1988 for another sixty (60) days. The
petitioner was able to obtain a restraining order and a writ of preliminary injunction in
the Regional Trial Court, Branch 33 of Iloilo City. The second preventive suspension
was not enforced. 5
Amidst the two successive suspensions, Mayor Ganzon instituted an action for prohibition against
the respondent Secretary of Local Government (now, Interior) in the Regional Trial Court, Iloilo City,
where he succeeded in obtaining a writ of preliminary injunction. Presently, he instituted CA-G.R. SP
No. 16417, an action for prohibition, in the respondent Court of Appeals.
Meanwhile, on May 3, 1990, the respondent Secretary issued another order, preventively
suspending Mayor Ganzon for another sixty days, the third time in twenty months, and designating
meantime Vice-Mayor Mansueto Malabor as acting mayor. Undaunted, Mayor Ganzon commenced

CA-G.R. SP No. 20736 of the Court of Appeals, a petition for prohibition, 6 (Malabor it is to be noted, is
one of the complainants, and hence, he is interested in seeing Mayor Ganzon ousted.)
On September 7, 1989, the Court of Appeals rendered judgment, dismissing CA-G.R. SP No. 16417.
On July 5, 1990, it likewise promulgated a decision, dismissing CA-G.R. SP No. 20736. In a
Resolution dated January 24, 1990, it issued a Resolution certifying the petition of Mary Ann Artieda,
who had been similary charged by the respondent Secretary, to this Court.
On June 26,1990, we issued a Temporary Restraining Order, barring the respondent Secretary from
implementing the suspension orders, and restraining the enforcement of the Court of Appeals' two
decisions.
In our Resolution of November 29, 1990, we consolidated all three cases. In our Resolutions of
January 15, 1991, we gave due course thereto.
Mayor Ganzon claims as a preliminary (GR No. 93252), that the Department of Local Government in
hearing the ten cases against him, had denied him due process of law and that the respondent
Secretary had been "biased, prejudicial and hostile" towards him 7 arising from his (Mayor Ganzon's)
alleged refusal to join the Laban ng Demokratikong Pilipino party 8 and the running political rivalry they
maintained in the last congressional and local elections; 9 and his alleged refusal to operate a lottery in
Iloilo City. 10 He also alleges that he requested the Secretary to lift his suspension since it had come ninety
days prior to an election (the barangay elections of November 14, 1988), 11notwithstanding which, the
latter proceeded with the hearing and meted out two more suspension orders of the aforementioned
cases. 12 He likewise contends that he sought to bring the cases to Iloilo City (they were held in Manila) in
order to reduce the costs of proceeding, but the Secretary rejected his request. 13 He states that he asked
for postponement on "valid and justifiable" 14 grounds, among them, that he was suffering from a heart
ailment which required confinement; that his "vital" 15 witness was also hospitalized 16 but that the latter
unduly denied his request. 17
Mayor Ganzon's primary argument (G.R. Nos. 93252 and 95245) is that the Secretary of Local
Government is devoid, in any event, of any authority to suspend and remove local officials, an
argument reiterated by the petitioner Mary Ann Rivera Artieda (G.R. No. 93746).
As to Mayor Ganzon's charges of denial of due process, the records do not show very clearly in what
manner the Mayor might have been deprived of his rights by the respondent Secretary. His claims
that he and Secretary Luis-Santos were (are) political rivals and that his "persecution" was politically
motivated are pure speculation and although the latter does not appear to have denied these
contentions (as he, Mayor Ganzon, claims), we can not take his word for it the way we would have
under less political circumstances, considering furthermore that "political feud" has often been a
good excuse in contesting complaints.
The Mayor has failed furthermore to substantiate his say-so's that Secretary Santos had attempted
to seduce him to join the administration party and to operate a lottery in Iloilo City. Again, although
the Secretary failed to rebut his allegations, we can not accept them, at face value, much more, as
judicial admissions as he would have us accept them 18 for the same reasons above-stated and
furthermore, because his say so's were never corroborated by independent testimonies. As a responsible
public official, Secretary Santos, in pursuing an official function, is presumed to be performing his duties
regularly and in the absence of contrary evidence, no ill motive can be ascribed to him.
As to Mayor Ganzon's contention that he had requested the respondent Secretary to defer the
hearing on account of the ninety-day ban prescribed by Section 62 of Batas Blg. 337, the Court finds
the question to be moot and academic since we have in fact restrained the Secretary from further
hearing the complaints against the petitioners. 19
As to his request, finally, for postponements, the Court is afraid that he has not given any compelling
reason why we should overturn the Court of Appeals, which found no convincing reason to overrule
Secretary Santos in denying his requests. Besides, postponements are a matter of discretion on the

part of the hearing officer, and based on Mayor Ganzon's above story, we are not convinced that the
Secretary has been guilty of a grave abuse of discretion.
The Court can not say, under these circumstances, that Secretary Santos' actuations deprived
Mayor Ganzon of due process of law.
We come to the core question: Whether or not the Secretary of Local Government, as the
President's alter ego, can suspend and/or remove local officials.
It is the petitioners' argument that the 1987 Constitution 20 no longer allows the President, as the 1935
and 1973 Constitutions did, to exercise the power of suspension and/or removal over local officials.
According to both petitioners, the Constitution is meant, first, to strengthen self-rule by local government
units and second, by deleting the phrase 21 as may be provided by law to strip the President of the power
of control over local governments. It is a view, so they contend, that finds support in the debates of the
Constitutional Commission. The provision in question reads as follows:
Sec. 4. The President of the Philippines shall exercise general supervision over local
governments. Provinces with respect to component cities and municipalities, and
cities and municipalities with respect to component barangays shall ensure that the
acts of their component units are within the scope of their prescribed powers and
functions. 22
It modifies a counterpart provision appearing in the 1935 Constitution, which we quote:
Sec. 10. The President shall have control of all the executive departments, bureaus,
or offices, exercise general supervision over all Local governments as may be
provided by law, and take care that the laws be faithfully executed. 23
The petitioners submit that the deletion (of "as may be provided by law") is significant, as their
argument goes, since: (1) the power of the President is "provided by law" and (2) hence, no law may
provide for it any longer.
It is to be noted that in meting out the suspensions under question, the Secretary of Local
Government acted in consonance with the specific legal provisions of Batas Blg. 337, the Local
Government Code, we quote:
Sec. 62. Notice of Hearing. Within seven days after the complaint is filed, the
Minister of local Government, or the sanggunian concerned, as the case may be,
shall require the respondent to submit his verified answer within seven days from
receipt of said complaint, and commence the hearing and investigation of the case
within ten days after receipt of such answer of the respondent. No investigation shall
be held within ninety days immediately prior to an election, and no preventive
suspension shall be imposed with the said period. If preventive suspension has been
imposed prior to the aforesaid period, the preventive suspension shall be lifted. 24
Sec. 63. Preventive Suspension. (1) Preventive suspension may be imposed by
the Minister of Local Government if the respondent is a provincial or city official, by
the provincial governor if the respondent is an elective municipal official, or by the
city or municipal mayor if the respondent is an elective barangay official.
(2) Preventive suspension may be imposed at any time after the issues are joined,
when there is reasonable ground to believe that the respondent has committed the
act or acts complained of, when the evidence of culpability is strong, when the gravity
of the offense so warrants, or when 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. In all cases, preventive suspension shall not extend beyond sixty
days after the start of said suspension.

(3) At the expiration of sixty days, the suspended official shall be deemed reinstated
in office without prejudice to the continuation of the proceedings against him until its
termination. However ' if the delay in the proceedings of the case is due to his fault,
neglect or request, the time of the delay shall not be counted in computing the time of
suspension. 25
The issue, as the Court understands it, consists of three questions: (1) Did the 1987 Constitution, in
deleting the phrase "as may be provided by law" intend to divest the President of the power to
investigate, suspend, discipline, and/or remove local officials? (2) Has the Constitution repealed
Sections 62 and 63 of the Local Government Code? (3) What is the significance of the change in the
constitutional language?
It is the considered opinion of the Court that notwithstanding the change in the constitutional
language, the charter did not intend to divest the legislature of its right or the President of her
prerogative as conferred by existing legislation to provide administrative sanctions against local
officials. It is our opinion that the omission (of "as may be provided by law") signifies nothing more
than to underscore local governments' autonomy from congress and to break Congress' "control"
over local government affairs. The Constitution did not, however, intend, for the sake of local
autonomy, to deprive the legislature of all authority over municipal corporations, in particular,
concerning discipline.
Autonomy does not, after all, contemplate making mini-states out of local government units, as in the
federal governments of the United States of America (or Brazil or Germany), although Jefferson is
said to have compared municipal corporations euphemistically to "small republics." 26 Autonomy, in
the constitutional sense, is subject to the guiding star, though not control, of the legislature, albeit the
legislative responsibility under the Constitution and as the "supervision clause" itself suggest-is to wean
local government units from over-dependence on the central government.
It is noteworthy that under the Charter, "local autonomy" is not instantly self-executing, but subject
to, among other things, the passage of a local government code, 27 a local tax law, 28 income
distribution legislation, 29 and a national representation law, 30 and measures 31 designed to realize
autonomy at the local level. It is also noteworthy that in spite of autonomy, the Constitution places the
local government under the general supervision of the Executive. It is noteworthy finally, that the Charter
allows Congress to include in the local government code provisions for removal of local officials, which
suggest that Congress may exercise removal powers, and as the existing Local Government Code has
done, delegate its exercise to the President. Thus:
Sec. 3. The Congress shall enact a local government code which shall provide for a
more responsive and accountable local government structure instituted through a
system of decentralization with effective mechanisms of recall, initiative, and
referendum, allocate among the different local government units their powers,
responsibilities and resources, and provide for the qualifications, election,
appointment and removal, term, salaries, powers and functions and duties of local
officials, and all other matters relating to the organization and operation of the local
units. 32
As hereinabove indicated, the deletion of "as may be provided by law" was meant to stress, sub
silencio, the objective of the framers to strengthen local autonomy by severing congressional control
of its affairs, as observed by the Court of Appeals, like the power of local legislation. 33 The
Constitution did nothing more, however, and insofar as existing legislation authorizes the President
(through the Secretary of Local Government) to proceed against local officials administratively, the
Constitution contains no prohibition.
The petitioners are under the impression that the Constitution has left the President mere
supervisory powers, which supposedly excludes the power of investigation, and denied her control,
which allegedly embraces disciplinary authority. It is a mistaken impression because legally,
"supervision" is not incompatible with disciplinary authority as this Court has held, 34 thus:

xxx xxx xxx

It is true that in the case of Mondano vs. Silvosa, 51 Off. Gaz., No. 6 p. 2884, this
Court had occasion to discuss the scope and extent of the power of supervision by
the President over local government officials in contrast to the power of control given
to him over executive officials of our government wherein it was emphasized that the
two terms, control and supervision, are two different things which differ one from the
other in meaning and extent. Thus in that case the Court has made the following
digression: "In administration law supervision means overseeing or the power or
authority of an officer to see that subordinate officers perform their duties. If the latter
fail or neglect to fulfill them the former may take such action or step as prescribed by
law to make them perform their duties. Control, on the other hand, means the power
of an officer to alter or modify or nullify of set aside what a subordinate officer had
done in the performance of his duties and to substitute the judgment of the former for
that of the latter." But from this pronouncement it cannot be reasonably inferred that
the power of supervision of the President over local government officials does not
include the power of investigation when in his opinion the good of the public service
so requires, as postulated in Section 64(c) of the Revised Administrative Code. ... 35
xxx xxx xxx

"Control" has been defined as "the power of an officer to alter or modify or nullify or set aside what a
subordinate officer had done in the performance of his duties and to substitute the judgment of the
former for test of the latter." 36 "Supervision" on the other hand means "overseeing or the power or
authority of an officer to see that subordinate officers perform their duties. 37 As we held, 38 however,
"investigating" is not inconsistent with "overseeing", although it is a lesser power than "altering". The
impression is apparently exacerbated by the Court's pronouncements in at least three cases, Lacson v.
Roque, 39 Hebron v. Reyes, 40 and Mondano v. Silvosa, 41 and possibly, a fourth one, Pelaez v. Auditor
General. 42 In Lacson, this Court said that the President enjoyed no control powers but only supervision
"as may be provided by law," 43 a rule we reiterated in Hebron, and Mondano. In Pelaez, we stated that
the President "may not . . . suspend an elective official of a regular municipality or take any disciplinary
action against him, except on appeal from a decision of the corresponding provincial board." 44 However,
neither Lacson nor Hebron nor Mondano categorically banned the Chief Executive from exercising acts of
disciplinary authority because she did not exercise control powers, but because no law allowed her to
exercise disciplinary authority. Thus, according to Lacson:
The contention that the President has inherent power to remove or suspend
municipal officers is without doubt not well taken. Removal and suspension of public
officers are always controlled by the particular law applicable and its proper
construction subject to constitutional limitations. 45
In Hebron we stated:
Accordingly, when the procedure for the suspension of an officer is specified by law,
the same must be deemed mandatory and adhered to strictly, in the absence of
express or clear provision to the contrary-which does not et with respect to municipal
officers ... 46
In Mondano, the Court held:
... The Congress has expressly and specifically lodged the provincial supervision
over municipal officials in the provincial governor who is authorized to "receive and
investigate complaints made under oath against municipal officers for neglect of duty,
oppression, corruption or other form of maladministration of office, and conviction by
final judgment of any crime involving moral turpitude." And if the charges are serious,
"he shall submit written charges touching the matter to the provincial board,
furnishing a copy of such charges to the accused either personally or by registered

mail, and he may in such case suspend the officer (not being the municipal treasurer)
pending action by the board, if in his opinion the charge by one affecting the official
integrity of the officer in question." Section 86 of the Revised Administration Code
adds nothing to the power of supervision to be exercised by the Department Head
over the administration of ... municipalities ... . If it be construed that it does and such
additional power is the same authority as that vested in the Department Head by
section 79(c) of the Revised Administrative Code, then such additional power must
be deemed to have been abrogated by Section 110(l), Article VII of the
Constitution. 47
xxx xxx xxx
In Pelaez, we stated that the President can not impose disciplinary measures on local officials
except on appeal from the provincial board pursuant to the Administrative Code. 48
Thus, in those case that this Court denied the President the power (to suspend/remove) it was not
because we did not think that the President can not exercise it on account of his limited power, but
because the law lodged the power elsewhere. But in those cases ii which the law gave him the
power, the Court, as in Ganzon v. Kayanan, found little difficulty in sustaining him. 49
The Court does not believe that the petitioners can rightfully point to the debates of the
Constitutional Commission to defeat the President's powers. The Court believes that the
deliberations are by themselves inconclusive, because although Commissioner Jose Nolledo would
exclude the power of removal from the President, 50Commissioner Blas Ople would not. 51
The Court is consequently reluctant to say that the new Constitution has repealed the Local
Government Code, Batas Blg. 37. As we said, "supervision" and "removal" are not incompatible
terms and one may stand with the other notwithstanding the stronger expression of local autonomy
under the new Charter. We have indeed held that in spite of the approval of the Charter, Batas Blg.
337 is still in force and effect. 52
As the Constitution itself declares, local autonomy means "a more responsive and accountable local
government structure instituted through a system of decentralization." 53 The Constitution as we
observed, does nothing more than to break up the monopoly of the national government over the affairs
of local governments and as put by political adherents, to "liberate the local governments from the
imperialism of Manila." Autonomy, however, is not meant to end the relation of partnership and interdependence between the central administration and local government units, or otherwise, to user in a
regime of federalism. The Charter has not taken such a radical step. Local governments, under the
Constitution, are subject to regulation, however limited, and for no other purpose than precisely, albeit
paradoxically, to enhance self- government.
As we observed in one case, 54 decentralization means devolution of national administration but not
power to the local levels. Thus:
Now, autonomy is either decentralization of administration or decentralization of
power. There is decentralization of administration when the central government
delegates administrative powers to political subdivisions in order to broaden the base
of government power and in the process to make local governments "more
responsive and accountable," and "ensure their fullest development as self-reliant
communities and make them more effective partners in the pursuit of national
development and social progress." At the same time, it relieves the central
government of the burden of managing local affairs and enables it to concentrate on
national concerns. The President exercises "general supervision" over them, but only
to "ensure that local affairs are administered according to law." He has no control
over their acts in the sense that he can substitute their judgments with his own.

Decentralization of power, on the other hand, involves an abdication of political

power in the favor of local governments units declared to be autonomous, In that
case, the autonomous government is free to chart its own destiny and shape its
future with minimum intervention from central authorities. According to a
constitutional author, decentralization of power amounts to "self-immolation," since in
that event, the autonomous government becomes accountable not to the central
authorities but to its constituency. 55
The successive sixty-day suspensions imposed on Mayor Rodolfo Ganzon is albeit another matter.
What bothers the Court, and what indeed looms very large, is the fact that since the Mayor is facing
ten administrative charges, the Mayor is in fact facing the possibility of 600 days of suspension, in
the event that all ten cases yield prima facie findings. The Court is not of course tolerating
misfeasance in public office (assuming that Mayor Ganzon is guilty of misfeasance) but it is certainly
another question to make him serve 600 days of suspension, which is effectively, to suspend him out
of office. As we held: 56
2. Petitioner is a duly elected municipal mayor of Lianga, Surigao del Sur. His term of
office does not expire until 1986. Were it not for this information and the suspension
decreed by the Sandiganbayan according to the Anti-Graft and Corrupt Practices Act,
he would have been all this while in the full discharge of his functions as such
municipal mayor. He was elected precisely to do so. As of October 26, 1983, he has
been unable to. it is a basic assumption of the electoral process implicit in the right of
suffrage that the people are entitled to the services of elective officials of their choice.
For misfeasance or malfeasance, any of them could, of course, be proceeded
against administratively or, as in this instance, criminally. In either case, Ms
culpability must be established. Moreover, if there be a criminal action, he is entitled
to the constitutional presumption of innocence. A preventive suspension may be
justified. Its continuance, however, for an unreasonable length of time raises a due
process question. For even if thereafter he were acquitted, in the meanwhile his right
to hold office had been nullified. Clearly, there would be in such a case an injustice
suffered by him. Nor is he the only victim. There is injustice inflicted likewise on the
people of Lianga They were deprived of the services of the man they had elected to
serve as mayor. In that sense, to paraphrase Justice Cardozo, the protracted
continuance of this preventive suspension had outrun the bounds of reason and
resulted in sheer oppression. A denial of due process is thus quite manifest. It is to
avoid such an unconstitutional application that the order of suspension should be
lifted. 57
The plain truth is that this Court has been ill at ease with suspensions, for the above reasons, 58 and
so also, because it is out of the ordinary to have a vacancy in local government. The sole objective of a
suspension, as we have held, 59 is simply "to prevent the accused from hampering the normal cause of
the investigation with his influence and authority over possible witnesses" 60 or to keep him off "the
records and other evidence. 61
It is a means, and no more, to assist prosecutors in firming up a case, if any, against an erring local
official. Under the Local Government Code, it can not exceed sixty days, 62 which is to say that it need
not be exactly sixty days long if a shorter period is otherwise sufficient, and which is also to say that it
ought to be lifted if prosecutors have achieved their purpose in a shorter span.
Suspension is not a penalty and is not unlike preventive imprisonment in which the accused is held
to insure his presence at the trial. In both cases, the accused (the respondent) enjoys a presumption
of innocence unless and until found guilty.
Suspension finally is temporary and as the Local Government Code provides, it may be imposed for
no more than sixty days. As we held, 63 a longer suspension is unjust and unreasonable, and we might
add, nothing less than tyranny.

As we observed earlier, imposing 600 days of suspension which is not a remote possibility Mayor
Ganzon is to all intents and purposes, to make him spend the rest of his term in inactivity. It is also to
make, to all intents and purposes, his suspension permanent.
It is also, in fact, to mete out punishment in spite of the fact that the Mayor's guilt has not been
proven. Worse, any absolution will be for naught because needless to say, the length of his
suspension would have, by the time he is reinstated, wiped out his tenure considerably.
The Court is not to be mistaken for obstructing the efforts of the respondent Secretary to see that
justice is done in Iloilo City, yet it is hardly any argument to inflict on Mayor Ganzon successive
suspensions when apparently, the respondent Secretary has had sufficient time to gather the
necessary evidence to build a case against the Mayor without suspending him a day longer. What is
intriguing is that the respondent Secretary has been cracking down, so to speak, on the Mayor
piecemeal apparently, to pin him down ten times the pain, when he, the respondent Secretary, could
have pursued a consolidated effort.
We reiterate that we are not precluding the President, through the Secretary of Interior from
exercising a legal power, yet we are of the opinion that the Secretary of Interior is exercising that
power oppressively, and needless to say, with a grave abuse of discretion.
The Court is aware that only the third suspension is under questions, and that any talk of future
suspensions is in fact premature. The fact remains, however, that Mayor Ganzon has been made to
serve a total of 120 days of suspension and the possibility of sixty days more is arguably around the
corner (which amounts to a violation of the Local Government Code which brings to light a pattern of
suspensions intended to suspend the Mayor the rest of his natural tenure. The Court is simply
foreclosing what appears to us as a concerted effort of the State to perpetuate an arbitrary act.
As we said, we can not tolerate such a state of affairs.
We are therefore allowing Mayor Rodolfo Ganzon to suffer the duration of his third suspension and
lifting, for the purpose, the Temporary Restraining Order earlier issued. Insofar as the seven
remaining charges are concerned, we are urging the Department of Local Government, upon the
finality of this Decision, to undertake steps to expedite the same, subject to Mayor Ganzon's usual
remedies of appeal, judicial or administrative, or certiorari, if warranted, and meanwhile, we are
precluding the Secretary from meting out further suspensions based on those remaining complaints,
notwithstanding findings of prima facie evidence.
In resume the Court is laying down the following rules:
1. Local autonomy, under the Constitution, involves a mere decentralization of administration, not of
power, in which local officials remain accountable to the central government in the manner the law
may provide;
2. The new Constitution does not prescribe federalism;
3. The change in constitutional language (with respect to the supervision clause) was meant but to
deny legislative control over local governments; it did not exempt the latter from legislative
regulations provided regulation is consistent with the fundamental premise of autonomy;
4. Since local governments remain accountable to the national authority, the latter may, by law, and
in the manner set forth therein, impose disciplinary action against local officials;
5. "Supervision" and "investigation" are not inconsistent terms; "investigation" does not signify
"control" (which the President does not have);
6. The petitioner, Mayor Rodolfo Ganzon. may serve the suspension so far ordered, but may no
longer be suspended for the offenses he was charged originally; provided:

a) that delays in the investigation of those charges "due to his fault,

neglect or request, (the time of the delay) shall not be counted in
computing the time of suspension. [Supra, sec. 63(3)]
b) that if during, or after the expiration of, his preventive suspension,
the petitioner commits another or other crimes and abuses for which
proper charges are filed against him by the aggrieved party or
parties, his previous suspension shall not be a bar to his being
preventively suspended again, if warranted under subpar. (2), Section
63 of the Local Government Code.
WHEREFORE, premises considered, the petitions are DISMISSED. The Temporary Restraining
Order issued is LIFTED. The suspensions of the petitioners are AFFIRMED, provided that the
petitioner, Mayor Rodolfo Ganzon, may not be made to serve future suspensions on account of any
of the remaining administrative charges pending against him for acts committed prior to August 11,
1988. The Secretary of Interior is ORDERED to consolidate all such administrative cases pending
against Mayor Ganzon.
The sixty-day suspension against the petitioner, Mary Ann Rivera Artieda, is AFFIRMED. No costs.
SO ORDERED.

[G.R. No. 135962. March 27, 2000]

METROPOLITAN MANILA DEVELOPMENT AUTHORITY, petitioner, vs.
BEL-AIR VILLAGE ASSOCIATION, INC., respondent.
DECISION
PUNO, J.:
Not infrequently, the government is tempted to take legal shortcuts to solve
urgent problems of the people. But even when government is armed with the
best of intention, we cannot allow it to run roughshod over the rule of law.
Again, we let the hammer fall and fall hard on the illegal attempt of the MMDA
to open for public use a private road in a private subdivision. While we hold
that the general welfare should be promoted, we stress that it should not be
achieved at the expense of the rule of law. h Y
Petitioner MMDA is a government agency tasked with the delivery of basic
services in Metro Manila. Respondent Bel-Air Village Association, Inc. (BAVA)
is a non-stock, non-profit corporation whose members are homeowners in
Bel-Air Village, a private subdivision in Makati City. Respondent BAVA is the
registered owner of Neptune Street, a road inside Bel-Air Village.
On December 30, 1995, respondent received from petitioner, through its
Chairman, a notice dated December 22, 1995 requesting respondent to open
Neptune Street to public vehicular traffic starting January 2, 1996. The notice
reads: Court
"SUBJECT: NOTICE of the Opening of Neptune Street to Traffic
"Dear President Lindo,
"Please be informed that pursuant to the mandate of the MMDA
law or Republic Act No. 7924 which requires the Authority to
rationalize the use of roads and/or thoroughfares for the safe and

convenient movement of persons, Neptune Street shall be

opened to vehicular traffic effective January 2, 1996.
"In view whereof, the undersigned requests you to voluntarily
open the points of entry and exit on said street.
"Thank you for your cooperation and whatever assistance that
may be extended by your association to the MMDA personnel
who will be directing traffic in the area.
"Finally, we are furnishing you with a copy of the handwritten
instruction of the President on the matter.
"Very truly yours,
PROSPERO I. ORETA
Chairman"

[1]

On the same day, respondent was apprised that the perimeter wall separating
the subdivision from the adjacent Kalayaan Avenue would be
demolished. Sppedsc
On January 2, 1996, respondent instituted against petitioner before the
Regional Trial Court, Branch 136, Makati City, Civil Case No. 96-001 for
injunction. Respondent prayed for the issuance of a temporary restraining
order and preliminary injunction enjoining the opening of Neptune Street and
prohibiting the demolition of the perimeter wall. The trial court issued a
temporary restraining order the following day.
On January 23, 1996, after due hearing, the trial court denied issuance of a
preliminary injunction. Respondent questioned the denial before the Court of
Appeals in CA-G.R. SP No. 39549. The appellate court conducted an ocular
inspection of Neptune Street and on February 13, 1996, it issued a writ of
preliminary injunction enjoining the implementation of the MMDAs proposed
action.
[2]

[3]

[4]

On January 28, 1997, the appellate court rendered a Decision on the merits of
the case finding that the MMDA has no authority to order the opening of
Neptune Street, a private subdivision road and cause the demolition of its
perimeter walls. It held that the authority is lodged in the City Council of
Makati by ordinance. The decision disposed of as follows: Jurissc
"WHEREFORE, the Petition is GRANTED; the challenged Order
dated January 23, 1995, in Civil Case No. 96-001, is SET ASIDE

and the Writ of Preliminary Injunction issued on February 13, 1996

is hereby made permanent.
"For want of sustainable substantiation, the Motion to Cite
Roberto L. del Rosario in contempt is denied.
[5]

"No pronouncement as to costs.

"SO ORDERED."

[6]

The Motion for Reconsideration of the decision was denied on September 28,
1998. Hence, this recourse. Jksm
Petitioner MMDA raises the following questions:
"I
HAS THE METROPOLITAN MANILA DEVELOPMENT
AUTHORITY (MMDA) THE MANDATE TO OPEN NEPTUNE
STREET TO PUBLIC TRAFFIC PURSUANT TO ITS
REGULATORY AND POLICE POWERS?
II
IS THE PASSAGE OF AN ORDINANCE A CONDITION
PRECEDENT BEFORE THE MMDA MAY ORDER THE
OPENING OF SUBDIVISION ROADS TO PUBLIC TRAFFIC?
III
IS RESPONDENT BEL-AIR VILLAGE ASSOCIATION, INC.
ESTOPPED FROM DENYING OR ASSAILING THE AUTHORITY
OF THE MMDA TO OPEN THE SUBJECT STREET? Jlexj
V
WAS RESPONDENT DEPRIVED OF DUE PROCESS DESPITE
THE SEVERAL MEETINGS HELD BETWEEN MMDA AND THE
AFFECTED BEL-AIR RESIDENTS AND BAVA OFFICERS?
V
HAS RESPONDENT COME TO COURT WITH UNCLEAN
HANDS?"
[7]

Neptune Street is owned by respondent BAVA. It is a private road inside BelAir Village, a private residential subdivision in the heart of the financial and

commercial district of Makati City. It runs parallel to Kalayaan Avenue, a

national road open to the general public. Dividing the two (2) streets is a
concrete perimeter wall approximately fifteen (15) feet high. The western end
of Neptune Street intersects Nicanor Garcia, formerly Reposo Street, a
subdivision road open to public vehicular traffic, while its eastern end
intersects Makati Avenue, a national road. Both ends of Neptune Street are
guarded by iron gates. Edp mis
Petitioner MMDA claims that it has the authority to open Neptune Street to
public traffic because it is an agent of the state endowed with police power in
the delivery of basic services in Metro Manila. One of these basic services is
traffic management which involves the regulation of the use of thoroughfares
to insure the safety, convenience and welfare of the general public. It is
alleged that the police power of MMDA was affirmed by this Court in the
consolidated cases of Sangalang v. Intermediate Appellate Court. From the
premise that it has police power, it is now urged that there is no need for the
City of Makati to enact an ordinance opening Neptune street to the public.
[8]

[9]

Police power is an inherent attribute of sovereignty. It has been defined as the

power vested by the Constitution in the legislature to make, ordain, and
establish all manner of wholesome and reasonable laws, statutes and
ordinances, either with penalties or without, not repugnant to the Constitution,
as they shall judge to be for the good and welfare of the commonwealth, and
for the subjects of the same. The power is plenary and its scope is vast and
pervasive, reaching and justifying measures for public health, public safety,
public morals, and the general welfare.
[10]

[11]

It bears stressing that police power is lodged primarily in the National

Legislature. It cannot be exercised by any group or body of individuals not
possessing legislative power. The National Legislature, however, may
delegate this power to the President and administrative boards as well as the
lawmaking bodies of municipal corporations or local government units. Once
delegated, the agents can exercise only such legislative powers as are
conferred on them by the national lawmaking body.
[12]

[13]

[14]

[15]

A local government is a "political subdivision of a nation or state which is

constituted by law and has substantial control of local affairs." The Local
Government Code of 1991 defines a local government unit as a "body politic
and corporate" -- one endowed with powers as a political subdivision of the
National Government and as a corporate entity representing the inhabitants of
its territory. Local government units are the provinces, cities, municipalities
and barangays. They are also the territorial and political subdivisions of the
state.
[16]

[17]

[18]

[19]

[20]

Our Congress delegated police power to the local government units in

the Local Government Code of 1991. This delegation is found in Section 16
of the same Code, known as the general welfare clause, viz: Chief
"Sec. 16. General Welfare.Every local government unit shall
exercise the powers expressly granted, those necessarily implied
therefrom, as well as powers necessary, appropriate, or incidental
for its efficient and effective governance, and those which are
essential to the promotion of the general welfare. Within their
respective territorial jurisdictions, local government units shall
ensure and support, among other things, the preservation and
enrichment of culture, promote health and safety, enhance the
right of the people to a balanced ecology, encourage and support
the development of appropriate and self-reliant scientific and
technological capabilities, improve public morals, enhance
economic prosperity and social justice, promote full employment
among their residents, maintain peace and order, and preserve
the comfort and convenience of their inhabitants."
[21]

Local government units exercise police power through their respective

legislative bodies. The legislative body of the provincial government is
the sangguniang panlalawigan, that of the city government is
the sangguniang panlungsod, that of the municipal government is
the sangguniang bayan, and that of the barangay is the sangguniang
barangay. The Local Government Code of 1991 empowers the sangguniang
panlalawigan, sangguniang panlungsod and sangguniang bayan to
"enact ordinances, approve resolutions and appropriate funds for the general
welfare of the [province, city or municipality, as the case may be], and its
inhabitants pursuant to Section 16 of the Code and in the proper exercise of
the corporate powers of the [province, city municipality] provided under the
Code x x x." The same Code gives the sangguniang barangay the power to
"enact ordinances as may be necessary to discharge the responsibilities
conferred upon it by law or ordinance and to promote the general welfare of
the inhabitants thereon."
[22]

[23]

Metropolitan or Metro Manila is a body composed of several local

government units - i.e., twelve (12) cities and five (5) municipalities, namely,
the cities of Caloocan, Manila, Mandaluyong, Makati, Pasay, Pasig, Quezon,
Muntinlupa, Las Pinas, Marikina, Paranaque and Valenzuela, and the
municipalities of Malabon, , Navotas, , Pateros, San Juan and Taguig.With
the passage of Republic Act (R. A.) No. 7924 in 1995, Metropolitan
Manila was declared as a "special development and administrative
region" and the Administration of "metro-wide" basic services affecting
the region placed under "a development authority" referred to as the
MMDA.
[24]

[25]

"Metro-wide services" are those "services which have metro-wide impact

and transcend local political boundaries or entail huge expenditures such that
it would not be viable for said services to be provided by the individual local
government units comprising Metro Manila." There are seven (7) basic
metro-wide services and the scope of these services cover the following: (1)
development planning; (2) transport and traffic management; (3) solid waste
disposal and management; (4) flood control and sewerage management; (5)
urban renewal, zoning and land use planning, and shelter services; (6) health
and sanitation, urban protection and pollution control; and (7) public safety.
The basic service of transport and traffic management includes the
following: Lexjuris
[26]

"(b) Transport and traffic management which include the

formulation, coordination, and monitoring of policies,
standards, programs and projects to rationalize the existing
transport operations, infrastructure requirements, the use of
thoroughfares, and promotion of safe and convenient
movement of persons and goods; provision for the mass
transport system and the institution of a system to regulate
road users; administration and implementation of all traffic
enforcement operations, traffic engineering services and
traffic education programs, including the institution of a
single ticketing system in Metropolitan Manila;"
[27]

In the delivery of the seven (7) basic services, the MMDA has the
following powers and functions: Esm
"Sec. 5. Functions and powers of the Metro Manila Development
Authority.The MMDA shall:
(a) Formulate, coordinate and regulate the implementation of
medium and long-term plans and programs for the delivery of
metro-wide services, land use and physical development within
Metropolitan Manila, consistent with national development
objectives and priorities;
(b) Prepare, coordinate and regulate the implementation of
medium-term investment programs for metro-wide services which
shall indicate sources and uses of funds for priority programs and
projects, and which shall include the packaging of projects and
presentation to funding institutions; Esmsc
(c) Undertake and manage on its own metro-wide programs and
projects for the delivery of specific services under its jurisdiction,

subject to the approval of the Council. For this purpose, MMDA

can create appropriate project management offices;
(d) Coordinate and monitor the implementation of such plans,
programs and projects in Metro Manila; identify bottlenecks and
adopt solutions to problems of implementation;
(e) The MMDA shall set the policies concerning traffic in
Metro Manila, and shall coordinate and regulate the
implementation of all programs and projects concerning
traffic management, specifically pertaining to enforcement,
engineering and education. Upon request, it shall be
extended assistance and cooperation, including but not
limited to, assignment of personnel, by all other government
agencies and offices concerned;
(f) Install and administer a single ticketing system, fix,
impose and collect fines and penalties for all kinds of
violations of traffic rules and regulations, whether moving or
non-moving in nature, and confiscate and suspend or revoke
drivers licenses in the enforcement of such traffic laws and
regulations, the provisions of RA 4136 and PD 1605 to the
contrary notwithstanding. For this purpose, the Authority
shall impose all traffic laws and regulations in Metro Manila,
through its traffic operation center, and may deputize
members of the PNP, traffic enforcers of local government
units, duly licensed security guards, or members of nongovernmental organizations to whom may be delegated
certain authority, subject to such conditions and
requirements as the Authority may impose; and
(g) Perform other related functions required to achieve the
objectives of the MMDA, including the undertaking of delivery of
basic services to the local government units, when deemed
necessary subject to prior coordination with and consent of the
local government unit concerned." Jurismis
The implementation of the MMDAs plans, programs and projects is
undertaken by the local government units, national government agencies,
accredited peoples organizations, non-governmental organizations, and the
private sector as well as by the MMDA itself. For this purpose, the MMDA has
the power to enter into contracts, memoranda of agreement and other
cooperative arrangements with these bodies for the delivery of the required
services within Metro Manila.
[28]

The governing board of the MMDA is the Metro Manila Council. The
Council is composed of the mayors of the component 12 cities and 5
municipalities, the president of the Metro Manila Vice-Mayors League and the
president of the Metro Manila Councilors League. The Council is headed by
a Chairman who is appointed by the President and vested with the rank of
cabinet member. As the policy-making body of the MMDA, the Metro Manila
Council approves metro-wide plans, programs and projects, and issues the
necessary rules and regulations for the implementation of said plans; it
approves the annual budget of the MMDA and promulgates the rules and
regulations for the delivery of basic services, collection of service and
regulatory fees, fines and penalties. These functions are particularly
enumerated as follows: LEX
[29]

"Sec. 6. Functions of the Metro Manila Council. (a) The Council shall be the policy-making body of the MMDA;
(b) It shall approve metro-wide plans, programs and projects and
issue rules and regulations deemed necessary by the MMDA to
carry out the purposes of this Act;
(c) It may increase the rate of allowances and per diems of the
members of the Council to be effective during the term of the
succeeding Council. It shall fix the compensation of the officers
and personnel of the MMDA, and approve the annual budget
thereof for submission to the Department of Budget and
Management (DBM);
(d) It shall promulgate rules and regulations and set policies and
standards for metro-wide application governing the delivery of
basic services, prescribe and collect service and regulatory fees,
and impose and collect fines and penalties." Jj sc
Clearly, the scope of the MMDAs function is limited to the delivery of the
seven (7) basic services. One of these is transport and traffic management
which includes the formulation and monitoring of policies, standards and
projects to rationalize the existing transport operations, infrastructure
requirements, the use of thoroughfares and promotion of the safe movement
of persons and goods. It also covers the mass transport system and the
institution of a system of road regulation, the administration of all traffic
enforcement operations, traffic engineering services and traffic education
programs, including the institution of a single ticketing system in Metro Manila
for traffic violations. Under this service, the MMDA is expressly authorized "to
set the policies concerning traffic" and "coordinate and regulate the
implementation of all traffic management programs." In addition, the MMDA

may "install and administer a single ticketing system," fix, impose and collect
fines and penalties for all traffic violations. Ca-lrsc
It will be noted that the powers of the MMDA are limited to the following acts:
formulation, coordination, regulation, implementation, preparation,
management, monitoring, setting of policies, installation of a system and
administration. There is no syllable in R. A. No. 7924 that grants the
MMDA police power, let alone legislative power. Even the Metro Manila
Council has not been delegated any legislative power. Unlike the legislative
bodies of the local government units, there is no provision in R. A. No. 7924
that empowers the MMDA or its Council to "enact ordinances, approve
resolutions and appropriate funds for the general welfare" of the inhabitants of
Metro Manila. The MMDA is, as termed in the charter itself, a "development
authority." It is an agency created for the purpose of laying down policies and
coordinating with the various national government agencies, peoples
organizations, non-governmental organizations and the private sector for the
efficient and expeditious delivery of basic services in the vast metropolitan
area. All its functions are administrative in nature and these are actually
summed up in the charter itself, viz:
[30]

"Sec. 2. Creation of the Metropolitan Manila Development

Authority. -- x x x.
The MMDA shall perform planning, monitoring and
coordinative functions, and in the process exercise regulatory
and supervisory authority over the delivery of metro-wide
services within Metro Manila, without diminution of the autonomy
of the local government units concerning purely local matters."
[31]

Petitioner cannot seek refuge in the cases of Sangalang v. Intermediate

Appellate Court where we upheld a zoning ordinance issued by the Metro
Manila Commission (MMC), the predecessor of the MMDA, as an exercise of
police power. The first Sangalang decision was on the merits of the petition,
while the second decision denied reconsideration of the first case and in
addition discussed the case of Yabut v. Court of Appeals.
[32]

[33]

[34]

Sangalang v. IAC involved five (5) consolidated petitions filed by respondent

BAVA and three residents of Bel-Air Village against other residents of the
Village and the Ayala Corporation, formerly the Makati Development
Corporation, as the developer of the subdivision. The petitioners sought to
enforce certain restrictive easements in the deeds of sale over their respective
lots in the subdivision. These were the prohibition on the setting up of
commercial and advertising signs on the lots, and the condition that the lots
be used only for residential purposes. Petitioners alleged that respondents,
who were residents along Jupiter Street of the subdivision, converted their

residences into commercial establishments in violation of the "deed

restrictions," and that respondent Ayala Corporation ushered in the full
commercialization" of Jupiter Street by tearing down the perimeter wall that
separated the commercial from the residential section of the village.
[35]

The petitions were dismissed based on Ordinance No. 81 of the Municipal

Council of Makati and Ordinance No. 81-01 of the Metro Manila Commission
(MMC). Municipal Ordinance No. 81 classified Bel-Air Village as a Class A
Residential Zone, with its boundary in the south extending to the center line of
Jupiter Street. The Municipal Ordinance was adopted by the MMC under the
Comprehensive Zoning Ordinance for the National Capital Region and
promulgated as MMC Ordinance No. 81-01. Bel-Air Village was indicated
therein as bounded by Jupiter Street and the block adjacent thereto was
classified as a High Intensity Commercial Zone.
[36]

We ruled that since both Ordinances recognized Jupiter Street as the

boundary between Bel-Air Village and the commercial district, Jupiter Street
was not for the exclusive benefit of Bel-Air residents. We also held that the
perimeter wall on said street was constructed not to separate the residential
from the commercial blocks but simply for security reasons, hence, in tearing
down said wall, Ayala Corporation did not violate the "deed restrictions" in the
deeds of sale. Scc-alr
We upheld the ordinances, specifically MMC Ordinance No. 81-01, as a
legitimate exercise of police power. The power of the MMC and the Makati
Municipal Council to enact zoning ordinances for the general welfare prevailed
over the "deed restrictions".
[37]

In the second Sangalang/Yabut decision, we held that the opening of Jupiter

Street was warranted by the demands of the common good in terms of "traffic
decongestion and public convenience." Jupiter was opened by the Municipal
Mayor to alleviate traffic congestion along the public streets adjacent to the
Village. The same reason was given for the opening to public vehicular traffic
of Orbit Street, a road inside the same village. The destruction of the gate in
Orbit Street was also made under the police power of the municipal
government. The gate, like the perimeter wall along Jupiter, was a public
nuisance because it hindered and impaired the use of property, hence, its
summary abatement by the mayor was proper and legal.
[38]

[39]

Contrary to petitioners claim, the two Sangalang cases do not apply to

the case at bar. Firstly, both involved zoning ordinances passed by the
municipal council of Makati and the MMC. In the instant case, the basis for the
proposed opening of Neptune Street is contained in the notice of December
22, 1995 sent by petitioner to respondent BAVA, through its president. The
notice does not cite any ordinance or law, either by the Sangguniang

Panlungsod of Makati City or by the MMDA, as the legal basis for the
proposed opening of Neptune Street. Petitioner MMDA simply relied on its
authority under its charter "to rationalize the use of roads and/or thoroughfares
for the safe and convenient movement of persons." Rationalizing the use of
roads and thoroughfares is one of the acts that fall within the scope of
transport and traffic management. By no stretch of the imagination, however,
can this be interpreted as an express or implied grant of ordinance-making
power, much less police power. Misjuris
Secondly, the MMDA is not the same entity as the MMC
in Sangalang. Although the MMC is the forerunner of the present MMDA,
an examination of Presidential Decree (P. D.) No. 824, the charter of the
MMC, shows that the latter possessed greater powers which were not
bestowed on the present MMDA. Jjlex
Metropolitan Manila was first created in 1975 by Presidential Decree (P.D.)
No. 824. It comprised the Greater Manila Area composed of the contiguous
four (4) cities of Manila, Quezon, Pasay and Caloocan, and the thirteen (13)
municipalities of Makati, Mandaluyong, San Juan, Las Pinas, Malabon,
Navotas, Pasig, Pateros, Paranaque, Marikina, Muntinlupa and Taguig in the
province of Rizal, and Valenzuela in the province of Bulacan. Metropolitan
Manila was created as a response to the finding that the rapid growth of
population and the increase of social and economic requirements in these
areas demand a call for simultaneous and unified development; that the public
services rendered by the respective local governments could be administered
more efficiently and economically if integrated under a system of central
planning; and this coordination, "especially in the maintenance of peace and
order and the eradication of social and economic ills that fanned the flames of
rebellion and discontent [were] part of reform measures under Martial Law
essential to the safety and security of the State."
[40]

[41]

Metropolitan Manila was established as a "public corporation" with the

following powers: Calrs-pped
"Section 1. Creation of the Metropolitan Manila.There is hereby
created a public corporation, to be known as the Metropolitan
Manila, vested with powers and attributes of a corporation
including the power to make contracts, sue and be sued,
acquire, purchase, expropriate, hold, transfer and dispose of
property and such other powers as are necessary to carry
out its purposes. The Corporation shall be administered by a
Commission created under this Decree."
[42]

The administration of Metropolitan Manila was placed under the Metro Manila
Commission (MMC) vested with the following powers:

"Sec. 4. Powers and Functions of the Commission. - The

Commission shall have the following powers and functions:
1. To act as a central government to establish and administer
programs and provide services common to the area;
2. To levy and collect taxes and special assessments, borrow and
expend money and issue bonds, revenue certificates, and other
obligations of indebtedness. Existing tax measures should,
however, continue to be operative until otherwise modified or
repealed by the Commission;
3. To charge and collect fees for the use of public service facilities;
4. To appropriate money for the operation of the metropolitan
government and review appropriations for the city and municipal
units within its jurisdiction with authority to disapprove the same if
found to be not in accordance with the established policies of the
Commission, without prejudice to any contractual obligation of the
local government units involved existing at the time of approval of
this Decree;
5. To review, amend, revise or repeal all ordinances,
resolutions and acts of cities and municipalities within
Metropolitan Manila;
6. To enact or approve ordinances, resolutions and to fix
penalties for any violation thereof which shall not exceed a
fine of P10,000.00 or imprisonment of six years or both such
fine and imprisonment for a single offense;
7. To perform general administrative, executive and policy-making
functions;
8. To establish a fire control operation center, which shall direct
the fire services of the city and municipal governments in the
metropolitan area;
9. To establish a garbage disposal operation center, which shall
direct garbage collection and disposal in the metropolitan area;
10. To establish and operate a transport and traffic center, which
shall direct traffic activities; Jjjuris
11. To coordinate and monitor governmental and private activities
pertaining to essential services such as transportation, flood

control and drainage, water supply and sewerage, social, health

and environmental services, housing, park development, and
others;
12. To insure and monitor the undertaking of a comprehensive
social, economic and physical planning and development of the
area;
13. To study the feasibility of increasing barangay participation in
the affairs of their respective local governments and to propose to
the President of the Philippines definite programs and policies for
implementation;
14. To submit within thirty (30) days after the close of each fiscal
year an annual report to the President of the Philippines and to
submit a periodic report whenever deemed necessary; and
15. To perform such other tasks as may be assigned or directed
by the President of the Philippines." Sc jj
The MMC was the "central government" of Metro Manila for the purpose of
establishing and administering programs providing services common to the
area. As a "central government" it had the power to levy and collect taxes and
special assessments, the power to charge and collect fees; the power to
appropriate money for its operation, and at the same time, review
appropriations for the city and municipal units within its jurisdiction. It was
bestowed the power to enact or approve ordinances, resolutions and fix
penalties for violation of such ordinances and resolutions. It also had the
power to review, amend, revise or repeal all ordinances, resolutions and acts
of any of the four (4) cities and thirteen (13) municipalities comprising Metro
Manila.
P. D. No. 824 further provided:
"Sec. 9. Until otherwise provided, the governments of the four
cities and thirteen municipalities in the Metropolitan Manila shall
continue to exist in their present form except as may be
inconsistent with this Decree. The members of the existing city
and municipal councils in Metropolitan Manila shall, upon
promulgation of this Decree, and until December 31, 1975,
become members of the Sangguniang Bayan which is hereby
created for every city and municipality of Metropolitan
Manila.
In addition, the Sangguniang Bayan shall be composed of as
many barangay captains as may be determined and chosen by

the Commission, and such number of representatives from other

sectors of the society as may be appointed by the President upon
recommendation of the Commission.
x x x.
The Sangguniang Bayan may recommend to the Commission
ordinances, resolutions or such measures as it may adopt;
Provided, that no such ordinance, resolution or measure
shall become effective, until after its approval by the
Commission; and Provided further, that the power to impose
taxes and other levies, the power to appropriate money and
the power to pass ordinances or resolutions with penal
sanctions shall be vested exclusively in the Commission."
The creation of the MMC also carried with it the creation of the
Sangguniang Bayan. This was composed of the members of the component
city and municipal councils, barangay captains chosen by the MMC and
sectoral representatives appointed by the President. The Sangguniang
Bayan had the power to recommend to the MMC the adoption of ordinances,
resolutions or measures. It was the MMC itself, however, that possessed
legislative powers. All ordinances, resolutions and measures recommended
by the Sangguniang Bayan were subject to the MMCs approval. Moreover,
the power to impose taxes and other levies, the power to appropriate money,
and the power to pass ordinances or resolutions with penal sanctions were
vested exclusively in the MMC. Sce-dp
Thus, Metropolitan Manila had a "central government," i.e., the MMC
which fully possessed legislative and police powers. Whatever
legislative powers the component cities and municipalities had were all
subject to review and approval by the MMC.
After President Corazon Aquino assumed power, there was a clamor to
restore the autonomy of the local government units in Metro Manila. Hence,
Sections 1 and 2 of Article X of the 1987 Constitution provided: Sj cj
"Section 1. The territorial and political subdivisions of the Republic
of the Philippines are the provinces, cities, municipalities and
barangays. There shall be autonomous regions in Muslim
Mindanao and the Cordilleras as herein provided.
Section 2. The territorial and political subdivisions shall enjoy local
autonomy."
The Constitution, however, recognized the necessity of creating metropolitan
regions not only in the existing National Capital Region but also in potential

equivalents in the Visayas and Mindanao. Section 11 of the same Article X

thus provided:
[43]

"Section 11. The Congress may, by law, create special

metropolitan political subdivisions, subject to a plebiscite as set
forth in Section 10 hereof. 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 thereby be
created shall be limited to basic services requiring coordination."
The Constitution itself expressly provides that Congress may, by law, create
"special metropolitan political subdivisions" which shall be subject to approval
by a majority of the votes cast in a plebiscite in the political units directly
affected; the jurisdiction of this subdivision shall be limited to basic services
requiring coordination; and the cities and municipalities comprising this
subdivision shall retain their basic autonomy and their own local executive and
legislative assemblies. Pending enactment of this law, the Transitory
Provisions of the Constitution gave the President of the Philippines the power
to constitute the Metropolitan Authority, viz:
[44]

"Section 8. Until otherwise provided by Congress, the President

may constitute the Metropolitan Authority to be composed of the
heads of all local government units comprising the Metropolitan
Manila area."
[45]

In 1990, President Aquino issued Executive Order (E. O.) No. 392 and
constituted the Metropolitan Manila Authority (MMA). The powers and
functions of the MMC were devolved to the MMA. It ought to be
stressed, however, that not all powers and functions of the MMC were
passed to the MMA. The MMAs power was limited to the "delivery of
basic urban services requiring coordination in Metropolitan
Manila." The MMAs governing body, the Metropolitan Manila Council,
although composed of the mayors of the component cities and
municipalities, was merely given the power of: (1) formulation of policies
on the delivery of basic services requiring coordination and
consolidation; and (2) promulgation of resolutions and other issuances,
approval of a code of basic services and the exercise of its rule-making
power.
[46]

[47]

[48]

Under the 1987 Constitution, the local government units became primarily
responsible for the governance of their respective political subdivisions.
The MMAs jurisdiction was limited to addressing common problems
involving basic services that transcended local boundaries. It did not have
legislative power. Its power was merely to provide the local government units

technical assistance in the preparation of local development plans. Any

semblance of legislative power it had was confined to a "review [of] legislation
proposed by the local legislative assemblies to ensure consistency among
local governments and with the comprehensive development plan of Metro
Manila," and to "advise the local governments accordingly."
[49]

When R.A. No. 7924 took effect, Metropolitan Manila became a "special
development and administrative region" and the MMDA a "special
development authority" whose functions were "without prejudice to the
autonomy of the affected local government units." The character of the
MMDA was clearly defined in the legislative debates enacting its charter.
R. A. No. 7924 originated as House Bill No. 14170/ 11116 and was introduced
by several legislators led by Dante Tinga, Roilo Golez and Feliciano
Belmonte. It was presented to the House of Representatives by the
Committee on Local Governments chaired by Congressman Ciriaco R. Alfelor.
The bill was a product of Committee consultations with the local government
units in the National Capital Region (NCR), with former Chairmen of the MMC
and MMA, and career officials of said agencies. When the bill was first taken
up by the Committee on Local Governments, the following debate took place:
[50]

"THE CHAIRMAN [Hon. Ciriaco Alfelor]: Okay, Let me explain.

This has been debated a long time ago, you know. Its a special
we can create a special metropolitan political subdivision. Supreme
Actually, there are only six (6) political subdivisions provided for in
the Constitution: barangay, municipality, city, province, and we
have the Autonomous Region of Mindanao and we have the
Cordillera. So we have 6. Now.
HON. [Elias] LOPEZ: May I interrupt, Mr. Chairman. In the case of
the Autonomous Region, that is also specifically mandated by the
Constitution.
THE CHAIRMAN: Thats correct. But it is considered to be a
political subdivision. What is the meaning of a political
subdivision? Meaning to say, that it has its own government,
it has its own political personality, it has the power to tax,
and all governmental powers: police power and everything.
All right. Authority is different; because it does not have its
own government. It is only a council, it is an organization of
political subdivision, powers, no, which is not imbued with
any political power. Esmmis
If you go over Section 6, where the powers and functions of
the Metro Manila Development Authority, it is purely

coordinative. And it provides here that the council is policymaking. All right.
Under the Constitution is a Metropolitan Authority with
coordinative power. Meaning to say, it coordinates all of the
different basic services which have to be delivered to the
constituency. All right.
There is now a problem. Each local government unit is given its respective as
a political subdivision. Kalookan has its powers, as provided for and protected
and guaranteed by the Constitution. All right, the exercise. However, in the
exercise of that power, it might be deleterious and disadvantageous to other
local government units. So, we are forming an authority where all of these will
be members and then set up a policy in order that the basic services can be
effectively coordinated. All right. justice
Of course, we cannot deny that the MMDA has to survive. We
have to provide some funds, resources. But it does not
possess any political power. We do not elect the Governor.
We do not have the power to tax. As a matter of fact, I was
trying to intimate to the author that it must have the power to sue
and be sued because it coordinates. All right. It coordinates
practically all these basic services so that the flow and the
distribution of the basic services will be continuous. Like traffic, we
cannot deny that. Its before our eyes. Sewerage, flood control,
water system, peace and order, we cannot deny these. Its right on
our face. We have to look for a solution. What would be the right
solution? All right, we envision that there should be a coordinating
agency and it is called an authority. All right, if you do not want to
call it an authority, its alright. We may call it a council or maybe a
management agency.
x x x."

[51]

Clearly, the MMDA is not a political unit of government. The power

delegated to the MMDA is that given to the Metro Manila Council to
promulgate administrative rules and regulations in the implementation of the
MMDAs functions. There is no grant of authority to enact ordinances and
regulations for the general welfare of the inhabitants of the
metropolis. This was explicitly stated in the last Committee deliberations prior
to the bills presentation to Congress. Thus: Ed-p
"THE CHAIRMAN: Yeah, but we have to go over the suggested
revision. I think this was already approved before, but it was
reconsidered in view of the proposals, set-up, to make the MMDA

stronger. Okay, so if there is no objection to paragraph "f" And

then next is paragraph "b," under Section 6. "It shall approve
metro-wide plans, programs and projects and issue
ordinances or resolutions deemed necessary by the MMDA to
carry out the purposes of this Act." Do you have the powers?
Does the MMDA because that takes the form of a local
government unit, a political subdivision.
HON. [Feliciano] BELMONTE: Yes, I believe so, your Honor.
When we say that it has the policies, its very clear that those
policies must be followed. Otherwise, whats the use of
empowering it to come out with policies. Now, the policies may be
in the form of a resolution or it may be in the form of a ordinance.
The term "ordinance" in this case really gives it more teeth, your
honor. Otherwise, we are going to see a situation where you have
the power to adopt the policy but you cannot really make it stick
as in the case now, and I think here is Chairman Bunye. I think he
will agree that that is the case now. Youve got the power to set a
policy, the body wants to follow your policy, then we say lets call it
an ordinance and see if they will not follow it.
THE CHAIRMAN: Thats very nice. I like that. However, there is a
constitutional impediment. You are making this MMDA a
political subdivision. The creation of the MMDA would be
subject to a plebiscite. That is what Im trying to avoid. Ive
been trying to avoid this kind of predicament. Under the
Constitution it states: if it is a political subdivision, once it is
created it has to be subject to a plebiscite. Im trying to make
this as administrative. Thats why we place the Chairman as a
cabinet rank.
HON. BELMONTE: All right, Mr. Chairman, okay, what you are
saying there is .
THE CHAIRMAN: In setting up ordinances, it is a political
exercise. Believe me.
HON. [Elias] LOPEZ: Mr. Chairman, it can be changed into
issuances of rules and regulations. That would be it shall
also be enforced. Jksm
HON. BELMONTE: Okay, I will .
HON. LOPEZ: And you can also say that violation of such
rule, you impose a sanction. But you know, ordinance has a
different legal connotation.

HON. BELMONTE: All right. I defer to that opinion, your

Honor. sc
THE CHAIRMAN: So instead of ordinances, say rules and
regulations.
HON. BELMONTE: Or resolutions. Actually, they are actually
considering resolutions now.
THE CHAIRMAN: Rules and resolutions.
HON. BELMONTE: Rules, regulations and resolutions."

[52]

The draft of H. B. No. 14170/ 11116 was presented by the Committee to the
House of Representatives. The explanatory note to the bill stated that the
proposed MMDA is a "development authority" which is a "national agency, not
a political government unit." The explanatory note was adopted as the
sponsorship speech of the Committee on Local Governments. No
interpellations or debates were made on the floor and no amendments
introduced. The bill was approved on second reading on the same day it was
presented.
[53]

[54]

When the bill was forwarded to the Senate, several amendments were made.
These amendments, however, did not affect the nature of the MMDA as
originally conceived in the House of Representatives.
[55]

It is thus beyond doubt that the MMDA is not a local government unit or
a public corporation endowed with legislative power. It is not even a
"special metropolitan political subdivision" as contemplated in Section 11,
Article X of the Constitution. The creation of a "special metropolitan political
subdivision" requires the approval by a majority of the votes cast in a
plebiscite in the political units directly affected. R. A. No. 7924 was not
submitted to the inhabitants of Metro Manila in a plebiscite. The Chairman of
the MMDA is not an official elected by the people, but appointed by the
President with the rank and privileges of a cabinet member. In fact, part of his
function is to perform such other duties as may be assigned to him by the
President, whereas in local government units, the President merely exercises
supervisory authority. This emphasizes the administrative character of the
MMDA. Newmiso
[56]

[57]

Clearly then, the MMC under P. D. No. 824 is not the same entity as the
MMDA under R. A. No. 7924. Unlike the MMC, the MMDA has no power to
enact ordinances for the welfare of the community. It is the local
government units, acting through their respective legislative councils, that
possess legislative power and police power. In the case at bar, the
Sangguniang Panlungsod of Makati City did not pass any ordinance or

resolution ordering the opening of Neptune Street, hence, its proposed

opening by petitioner MMDA is illegal and the respondent Court of Appeals did
not err in so ruling. We desist from ruling on the other issues as they are
unnecessary. Esmso
We stress that this decision does not make light of the MMDAs noble efforts to
solve the chaotic traffic condition in Metro Manila. Everyday, traffic jams and
traffic bottlenecks plague the metropolis. Even our once sprawling boulevards
and avenues are now crammed with cars while city streets are clogged with
motorists and pedestrians. Traffic has become a social malaise affecting our
peoples productivity and the efficient delivery of goods and services in the
country. The MMDA was created to put some order in the metropolitan
transportation system but unfortunately the powers granted by its charter are
limited. Its good intentions cannot justify the opening for public use of a private
street in a private subdivision without any legal warrant. The promotion of the
general welfare is not antithetical to the preservation of the rule of law. Sdjad
IN VIEW WHEREOF, the petition is denied. The Decision and Resolution of
the Court of Appeals in CA-G.R. SP No. 39549 are affirmed. Sppedsc
SO ORDERED.