Pimentel, Jr. vs. Aguirre
G.R. No. 132988| July 19, 2000| J. PANGANIBAN| Trish Veluya FACTS:
In 1997, then president Fidel V. Ramos issued A.O. 372 which provided for the adoption of economy measures in government for FY 1998. Sec. 1 of AO 372 provides that: All government departments and agencies, including state universities and colleges, government-owned and controlled corporations and local governments units will identify and implement measures in FY 1998 that will reduce total expenditures for the year by at least 25% of the authorized regular appropriations. In addition, Sec. 4 of AO 372 provides that: Pending the assessment and evaluation by the Development Budget Coordinating Committee of t he emerging fiscal situation, the amount equivalent to 10% of the internal revenue allotment to local government units shall be withheld. On December 10, 1998 then President P resident Joseph Estrada issued AO43 which amended Sec. 4 of AO 372 which reduced the 10% withholding to 5% of the internal revenue allotment. Pimentel contends that the President in his issuance of AO 372 exercised the power of control over LGUs. He claims that the President exercised exercised powers which were beyond the ones allowed to him. Under the Constitution, the President is only allowed to exercise supervisorial power over the LGUs and this is consistent to the local autonomy given to the LGUs. Pimentel further alleged that the withholding of 10% of the IRA is in contravention to Sec. 286 of the t he Local Government Code and Sec. 6, Art. X of the Constitution which provide the automatic release of the LGU’s share in the national internal revenue. The Solicitor General (representing the respondents) claim that the AO was issued to alleviate economic difficulties difficulties brought about by the peso devaluation and that the AO was merely a product of the President’s power of supervision. It does not violate fiscal autonomy because it merely directs the local governments to identify measures that will reduce their expenditures. The Sol Gen further claims that the withholding of 10% of the IRA is not contrary to the law since this withholding is merely temporary.
ISSUES:
supervision 1. WON Sec. 1 of EO 372 is an exercise of the President’s power of supervision 2. WON Sec. 4 of EO 372 is valid
HELD:
1. Yes, Sec. 1 of EO 372 is an exercise of the President’s power of supervision. Even if the EO sounds commanding and authoritative, the SC sided with the Sol Gen and said that the EO is merely directory. There can be no legal sanction if the LGU does not comply with the directive. The SC differentiated between the power to control and the power to supervise. Being an LGU, the sovereign power of the LGU comes from the electorate thus they cannot be said to be under the control of the President. Comparing this to A dministrative bodies, they (Cabinet members) derive their power from the President himself thus they fall under the control of the President.
Sec. 4 of the Constitution provides that the P resident has the power of general supervision over the local government units. The SC ruled that supervision is merely limited to oversight and they can only take actions to ensure that the rules and regulations are being followed. The President however, may not draft or make the rules and regulations. Control, on the other hand, means the power of an officer to alter or modify or nullify or set aside what a subordinate officer has done in the performance of his duties and t o substitute the judgment of the former for that of the latter. The Court stated that local autonomy signified “a more responsive and accountable local government structure instituted through a system of decentralization.” The grant of autonomy is intended to “break up the monopoly of the national government over the affairs of local governments” This is not done to impair the partnership of the local and national government to
pursue the improvement of the government. Paradoxically, local governments are still subject to regulation, however limited, for the purpose of enhancing self-government. self-government. Decentralization simply means the devolution of national administration, not power, to local governments. Local officials remain accountable to the central government as the law may provide. Sec. 284 of the L ocal Government Code allows the president may interfere with the local fiscal affairs of the LGU. The requisites are: 1) an unmanaged public sector deficit deficit of the national government; 2) consultations with the presiding officers of the Senate and the House of Representatives and the presidents of the various local leagues; and 3) the corresponding recommendation of the secretaries of the Department of Finance, Interior and Local Government, and Budget and Management. Furthermore, any adjustment in the allotment shall in no case be less than thirty percent (30%) of the collection of national internal revenue taxes of the third fiscal year preceding the current one. (No compliance with the conditions but as stated earlier EO 372 is merely directive) 2. No, Sec. 4 of EO 372 is null and void since it is not in consonance with Sec. 286 of the Local Government Code and Sec. 6, Art. X of t he Constitution which provide the automatic release of the LGU’s share in the national internal revenue. The LGC provides 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.” The SC ruled that even if the withholding is merely temporary the “temporary” nature of the retention by the national government does not matter. Any retention
is prohibited. This encroaches upon the fiscal autonomy of the LGUs.
