Local Governments: Creation, Merger, Abolition and Powers

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Part I

Local Governments: Creation, Merger, Abolition and Powers

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Constitutional Basis

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Art X, 1987 Constitution

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 hereinafter provided.

Section 2. The territorial and political subdivisions shall enjoy local autonomy.

Section 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 local units.

Section 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.

Section 5. Each local government unit shall have the power to create its own sources of revenues and to levy taxes, fees, and charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic policy of local autonomy. Such taxes, fees, and charges shall accrue exclusively to the local governments.

Chapter 2, RA 7160 (Sec 6 – 10)

Sec. 6. Authority to Create Local Government Units. A local government unit may be created, divided, merged, abolished, or its boundaries substantially altered either by law enacted by Congress in the case of a province, city, municipality, or any other political subdivision, or by ordinance passed by the sangguniang panlalawigan or sangguniang panlungsod concerned in the case of a barangay located within its territorial jurisdiction, subject to such limitations and requirements prescribed in this Code.

Comment:Congress has the power to create or abolish a province, city, municipality, or any other political subdivision.The sangguniang panlalawigan or sangguniang panlungsod has the power to create and abolish barangays located within its territorial jurisdiction

Sec. 7. Creation and Conversion. As a general rule, the creation of a local government unit or its conversion from one level to another level shall be based on verifiable indicators of viability and projected capacity to provide services, to wit:

(a) Income. It must be sufficient, based on acceptable standards, to provide for all essential government facilities and services and special functions commensurate with the size of its population, as expected of the local government unit concerned;

(b) Population. It shall be determined as the total number of inhabitants within the territorial jurisdiction of the local government unit concerned; and

(c) Land Area. It must be contiguous, unless it comprises two (2) or more islands or is separated by a local government unit independent of the others; properly identified by metes and bounds with technical descriptions and sufficient to provide for such basic services and facilities to meet the requirements of its populace.

Compliance with the foregoing indicators shall be attested to by the Department of Finance (DOF), the National Statistics Office (NSO), and the Lands Management Bureau (LMB) of the Department of Environment and Natural Resources (DENR).

Mariano v. Comelec (242 SCRA 211)
Facts: Petitioners assail the Constitutionality of RA 7859 on the ground that it did not properly identify the land area or territorial jurisdiction of Makati by metes and bound.
Held: The petitioners in the case have not demonstrated that the delineation of the land area of the proposed area of Makati (without metes and bounds) will cause confusion as to its boundaries. Congress has refrained from using metes and bounds description of land areas of other local government units.

Municipality of Jimnez v. Baz Jr. (265 SCRA 182)
Facts: EO 258 creating the Mun. of Sinacaban contained a technical description of its land area. Based on said EO 258, Sinacaban claimed portions of several barrios previously thought to be part of the Mun. of Jimenez. The latter Municipality asserted jurisdiction in the claimed portion on the basis of an agreement entered into in 1950 with Sinacaban, approved by the Provincial Board.
Held: The technical description, containing the metes and bounds of a municipality’s territory staed in EO 258 creating the Municipality of Sinacaban, Misamis Oriental is binding.

Sec. 8. Division and Merger. Division and merger of existing local government units shall comply with the same requirements herein prescribed for their creation: Provided, however, That such division shall not reduce the income, population, or land area of the local government unit or units concerned to less than the minimum requirements prescribed in this Code: Provided, further, That the income classification of the original local government unit or units shall not fall below its current classification prior to such division.

The income classification of local government units shall be updated within six (6) months from the effectivity of this Code to reflect the changes in their financial position resulting from the increased revenues as provided herein.

Sec. 9. Abolition of Local Government Units. A local government unit may be abolished when its income, population, or land area has been irreversibly reduced to less than the minimum standards prescribed for its creation under Book III of this Code, as certified by the national agencies mentioned in Section 7 hereof to Congress or to the sangguniang concerned, as the case may be.

The law or ordinance abolishing a local government unit shall specify the province, city, municipality, or barangay with which the local government unit sought to be abolished will be incorporated or merged.

Comment: The Code now lays down three important indicators of viability in the creation of local government units namely: income, population and land area.

Sec. 10. Plebiscite Requirement. No creation, division, merger, abolition, or substantial alteration of boundaries of local government units shall take effect unless approved by a majority of the votes cast in a plebiscite called for the purpose in the political unit or units directly affected. Said plebiscite shall be conducted by the Commission on Elections (Comelec) within one hundred twenty (120) days from the date of effectivity of the law or ordinance effecting such action, unless said law or ordinance fixes another date.

Abbas v. COMELEC (179 SCRA 278)
Held: There is no conflict between the power of the President to merge administrative region with the Constitutional provision, requiring plebiscite in the merger of local government units because the requirement of the plebiscite in a merger expressly applies only to provinces, cities, municipalities or barangays, not administrative regions.

City of Pasig v. COMELEC 314 SCRA 179
Facts: Karangalan Village petitioned that they be segregated from Brgy. Manggahan and Dela Paz, Pasig. Plebiscite was scheduled but the Mun. of Cainta moved to suspend due to a pending case in RTC-Antipolo, Rizal for settlement of boundary dispute.
Held: A case involving a boundary dispute between local government units presents a prejudicial question which must first be decided before plebiscites for creation of proposed barangay maybe held.

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Articles and References

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Public Corporations, Chapters 1-6 (Martin)

CHAPTER ONE: General Principles

A corporation is an artificial being created by operation of law, having the right of succession and the powers, attributes, and properties expressly authorized by law or incident to its existence. It exists only in contemplation of law.

A corporation is a legal institution devised to confer upon the individuals of which it is composed powers, privileges, and immunities which they would not otherwise possess, the most important of which are continuous legal identity or unity, and perpetual or indefinite succession under the corporate name, notwithstanding successive changes by death or otherwise, in the corporators or members.

Classes of corporations

1. Public— formed or organized for the government of a portion of a State for the accomplishment of parts of its own public works. These are created by State either by special or general act.
2. 2. Private—formed for some private purpose, benefit, aim or end; organized wholly for the profit and advantage of their own members and cannot constitutionally be granted governmental powers. These are created by the will of the incorporators with the recognizance of the State.

Public vs Private— Consider as criterion the relation of the corporation to the State. If it is created by the State as its own agency or instrumentality to help it carry out its governmental functions, then it is public. Otherwise, it is private.

1. Quasi-public—private corporations that render public service or supply public wants; while purposely organized for the gain or benefit of its members, the law requires them to discharge functions for the public benefit (i.e. utility companies).

Private vs Quasi public— Consider as criterion the service the corporation renders to the public. If a corporation performs a public sovereign power, even though its incorporators intend to obtain profits from its undertaking, it is quasi-public.

Classes of public corporations

1. Quasi-Corporations—public corporations created as agencies of the State for a narrow and limited purpose. They differ from other public corporations in that they do not possess the powers and liabilities of self-governing corporations. Instead, their powers generally relate to matters of State, and not municipal concerns. Thus, although they are public in nature, they cannot be strictly considered municipal corporations because of their limited number of corporate powers and low grade of corporate existence. The main purpose of their creation is to aid the State in, or to take charge of, some public or state work other than community government for the general welfare.
2. 2. Municipal corporations

CHAPTER TWO: Nature, elements, kinds and history of municipal Corporations

A municipal corporation is a body politic constituted by the incorporation of the inhabitants of a city or town for the purpose of its local government. It is established by law partly as an agency of the State to assist in the civil government of a country, but chiefly to regulate and administer the local or internal affairs of the city/town/district which is incorporated.

Courts regard these as subordinate branches of government of the State exercising delegated powers (municipal administration as an instrumentality of state administration). Municipal corporations are granted charters for the better government of particular areas or districts.

Municipal corporation vs public corporation—All municipal corporations are public corporations, but not all public corporations are municipal corporations. Municipal corporations refer to incorporated villages, towns, and cities with powers of local administration.

Elements:

1. A legal creation or incorporation;
2. A corporate name by which the legal entity is known and in which all corporate acts are done;
3. Inhabitants constituting the population invested with the political and corporate powers which are exercised through duly constituted officers and agents;
4. Place or territory within which the local civil government and corporate functions are exercised.

Kinds:

1. Municipal Corporation Proper—incorporated cities/towns/villages invested with the power of local legislation. These exist and are governed by their respective charters. Its distinctive purpose and distinguishing feature is the power of local government.
2. Quasi-municipal corporation—same as a quasi-corporation, i.e. it operates directly as an agency of the State to help in the administration of public functions.

Municipal corporation proper vs quasi municipal corporation— When invested with the power of local government, the municipal corporation as an agency of the state becomes a municipal corporation proper. Consider as criterion the voluntary or involuntary nature of the corporation; the existence or non-existence of a charter; and whether the purpose of the corporation is solely a governmental agency or one for self-government.

Municipal corporation proper vs quasi corporation— Both are agents of the state for limited and narrow purposes but have different powers and liabilities. Municipal corporations proper are created either by the direct solicitation or by the free consent of the persons composing them while quasi corporations (also called involuntary corporations) are only local organizations which, for purposes of civil administration, are invested with some characteristics of corporate existence. They are local subdivisions of the state, created by the sovereign legislative power of its own sovereign will and without any particular solicitation, consent or concurrent action from the inhabitants (West Chicago Park Commissioners vs Chicago).

Purposes:

1. To serve as an agency or instrumentality of the state in carrying out the functions of government which the state cannot conveniently exercise (i.e. tax collection, assessment of property, enforcement of police regulations)
2. To act as an agency of the inhabitants in the regulation and operation of municipal franchises and public utilities, and the promotion and management of their local affairs (i.e. maintenance of water system, ferries, wharves). In this character, they act as separate entities for their own purposes and not as subdivisions of the State (Lidasan vs COMELEC).

Dual nature : Two-fold character:

1. Public—Municipal corporation acts as an agent of the State for the government of the territory and inhabitants within the municipal limits. It exercises by delegation a part of the sovereignty of the State.
2. Private—Municipal corporation acts as a business corporation with functions not strictly governmental or political. It sees to the administration of local affairs which are beyond the sphere of the public purposes for which its governmental powers are conferred (Villa vs City of Manila, Surigao Electric Co. Inc. vs Municipality of Surigao).

Origin and history

England  Municipal corporations can be traced back to the “farmer commonwealths” of the Teutons, and each “wick,” “ham,” “stead,” or “tun” took its name form the winsmen who lived there.

United States Early American municipal corporations were similar to English municipalities of the 18th century. Prior to the revolution, local governments in the nature of municipalities existed in the American colonies by prescription, sovereign recognition or by virtue of special charters from the sovereign.

Philippines under the Spanish RegimeThe basic unit of local administration was the pueblo, composed of numerous barrios, and governed by the cabeza de barangay, an honorific title continued by the Spaniards. Towns were organized, under the government of a gobernadorcillo, also called capitan, who represented the provincial governor as the arbiter of local questions, collected taxes, assisted the parish priest and entertained visiting officials. He was assisted by tenientes (deputies), alguaciles (subordinate employees) and chiefs of police. Elections for these municipal offices were held annually.

Barangays were administered by cabezas de barangay whose principal duties were to act as agents for the collection of taxes. They paid no tribute on their own account and were members of the principalia, the voting and privileged class. The position was originally hereditary and breaks were filled by appointments, but eventually, the position became elective and service compulsory.

The Maura Law constituted a municipal council of 1 captain and 4 lieutenants, in charge of the active work of governing the municipality, such as administration of public works and the details of taxation. These positions were honorary, and each of the members was required to have special qualifications. The Governor General, provincial council and provincial governor retained disciplinary jurisdiction over the council and its individual members.

Philippines under the American RegimeGeneral Order No. 43, series of 1899 first provided for the government of municipalities. This was superseded by General Order No. 40, series of 1900, promulgated by the Military Governor, supposedly to give the Filipino people the right to elect their municipal officers, “only slightly restricted” by certain conditions. President McKinley’s instructions to the 2nd Philippine Commission also directed the body to devote their attention to the establishment of municipal governments, giving the “natives of the islands” the “opportunity to manage their own local affairs to the fullest extent of which they are capable, and subject to the least degree of supervision and control which a careful study of their capacities and observation of the workings of native controls show to be consistent with the maintenance of law, order and loyalty.”

The Philippine Commission passed Act No. 82 on January 31, 1901, providing for the organization and government of municipalities and Act No. 83 on February 5, 1901, for the organization of provinces. These were later modified in the Administrative Code.

CHAPTER THREE: Creation of Municipal Corporations

The power to create municipal corporations is essentially legislative, exclusive and practically unlimited. Aside from the legislature, the President under his martial law powers can exercise legislative powers and create municipal corporations.

In the absence of a Constitutional provision permitting it, this power cannot be delegated by the legislature to any inferior or subordinate tribunal or board. However, it can pass a general law for the incorporation of municipal corporations, giving the conditions on which they may be created, and determining whether such conditions exist.

Certain conditions are needed in order to obtain a municipal corporation’s incorporation as a city or a town. Such conditions may refer to extent of area, nature of the territory, the character of the land and the uses to which it may be devoted, the number of inhabitants, and the density and location of the area to be incorporated.