Judge Dadole v. Commission of Audit, G.R. No.

125350, 3 December
2002

FACTS: Acting on the DBM's Local Budget Circular No. 55, the Mandaue City
Auditor issued notices of disallowances to RTC and MTC Judges, in excess of
the amount (maximum of P1000 and P700 in provinces and cities and
municipalities, respectively) authorized by said circular. The additional
monthly allowances of the judges shall be reduced to P1000 each. They were
also asked to reimbursed the amount they received in excess of P1000 from
the last six months.
ISSUE: Whether or not Local Budget Circular No. 55 void for going beyond
the supervisory powers of the President.
RULING:Yes. Although the Constitution guarantees autonomy to local
government units, the exercise of local autonomy remains subject to the
power of control by Congress and the power of supervision by the President.
Sec 4 Art X of 1987 Constitution: "The President of the Philippines shall
exercise general supervision over local governments…" The said provision
has been interpreted to exclude the power of control. The members of the
Cabinet and other executive officials are merely alter egos of the President.
As such, they are subject to the power of control of the President; he will
see to it that the local governments or their officials were performing their
duties as provided by the Constitution and by statutes, at whose will and
behest they can be removed from office; or their actions and decisions
changed, suspended or reversed. They are subject to the President's
supervision only, not control, so long as their acts are exercised within the
sphere of their legitimate powers. The President can only interfere in the
affairs and activities of a LGU if he or she finds that the latter has acted
contrary to law. This is the scope of the President's supervisory powers over
LGUs.

Drilon v. Lim, G.R. No. 112497, 4 August 1994

Facts: Sec. Drilon issued a resolution declaring Ordinance No. 7794 or the
Manila Revenue Code based on an appeal of 4 oil companies. The City of
Manila petitioned before the RTC to revoke the said resolution, which the
RTC granted. Drilon argued that Sec. 187 of the Local Government Code was
not complied with.
Issues: 1. Whether the DOJ declaration should be declared void?
2. Whether the procedures of enacting the Manila Revenue Code was
complied with?
Held: 1. No. Section 187 authorizes the DOJ to review only the
constitutionality of the ordinance. Sec. Drilon did not replace it with his own
version of the Code. He did not say it was a bad law. All he did in reviewing
the said measure was determined if the petitioners were performing their
functions in accordance with law. That was an act not of control but of
supervision.
2. YES. The procedural requirements have been observed. Notices of public
hearings were sent, the proposed ordinances were published in “Balita” and
“Manila Standard” and the approved ordinance was published in the same
newspaper for 3 days. The posting of the approved ordinance was omitted
but the publication for 3 consecutive days will satisfy due process.

Pimentel vs. Aguirre, G.R. No.

Facts: In 1997, President Ramos issued AO 372 which: (1) required all
government departments and agencies, including SUCs, GOCCs and LGUs to
identify and implement measures in FY 1998 that will reduce total
expenditures for the year by at least 25% of authorized regular
appropriations for non-personal services items (Section 1) and (2) ordered
the withholding of 10% of the IRA to LGUs (Section 4) . On 10 December
1998, President Estrada issued AO 43, reducing to 5% the amount of IRA to
be withheld from LGU.

Issues: 1. Whether or not the president committed grave abuse of

discretion in ordering all LGUS to adopt a 25% cost reduction program in
violation of the LGU'S fiscal autonomy
2. Whether Section 4 of the same issuance, which withholds 10 percent of
their internal revenue allotments, are valid exercises of the President's power
of general supervision over local governments
Held: 1. Section 1 of AO 372 does not violate local fiscal autonomy. Local
fiscal autonomy does not rule out any manner of national government
intervention by way of supervision, in order to ensure that local programs,
fiscal and otherwise, are consistent with national goals.
AO 372, however, is merely directory and has been issued by the
President consistent with his power of supervision over local governments.
It is intended only to advise all government agencies and instrumentalities
to undertake cost-reduction measures that will help maintain economic
stability in the country, which is facing economic difficulties. Besides, it does
not contain any sanction in case of noncompliance. Being merely an advisory,
therefore, Section 1 of AO 372 is well within the powers of the President.
Since it is not a mandatory imposition, the directive cannot be characterized
as an exercise of the power of control.
2. Section 4 of AO 372 cannot be upheld. A basic feature of local fiscal
autonomy is the automatic release of the shares of LGUs in the national
internal revenue. This is mandated by no less than the Constitution. The
Local Government Code specifies further that the release shall be made
directly to the LGU concerned within five (5) days after every quarter of the
year and "shall not be subject to any lien or holdback that may be imposed
by the national government for whatever purpose." As a rule, the term "shall"
is a word of command that must be given a compulsory meaning. The
provision is, therefore, imperative.

Laban!