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TodayisFriday,October28,2016

RepublicofthePhilippines
SUPREMECOURT
Manila
ENBANC
G.R.No.125350December3,2002
HON.RTCJUDGESMERCEDESG.DADOLE(ExecutiveJudge,Branch28),
ULRICR.CAETE(PresidingJudge,Branch25),
AGUSTINER.VESTIL(PresidingJudge,Branch56),
HON.MTCJUDGESTEMISTOCLESM.BOHOLST(PresidingJudge,Branch1),
VICENTEC.FANILAG(JudgeDesignate,Branch2),
andWILFREDOA.DAGATAN(PresidingJudge,Branch3),allofMandaueCity,petitioners,
vs.
COMMISSIONONAUDIT,respondent.
DECISION
CORONA,J.:
BeforeusisapetitionforcertiorariunderRule64toannulthedecision1andresolution2,datedSeptember21,1995
and May 28, 1996, respectively, of the respondent Commission on Audit (COA) affirming the notices of the
MandaueCityAuditorwhichdiminishedthemonthlyadditionalallowancesreceivedbythepetitionerjudgesofthe
RegionalTrialCourt(RTC)andMunicipalTrialCourt(MTC)stationedinMandaueCity.
Theundisputedfactsareasfollows:
In1986,theRTCandMTCjudgesofMandaueCitystartedreceivingmonthlyallowancesofP1,260eachthrough
theyearlyappropriationordinanceenactedbytheSangguniangPanlungsodofthesaidcity.In1991,MandaueCity
increasedtheamounttoP1,500foreachjudge.
OnMarch15,1994,theDepartmentofBudgetandManagement(DBM)issuedthedisputedLocalBudgetCircular
No.55(LBC55)whichprovidedthat:
"xxxxxxxxx
2.3.2.InthelightoftheauthoritygrantedtothelocalgovernmentunitsundertheLocalGovernmentCodeto
provideforadditionalallowancesandotherbenefitstonationalgovernmentofficialsandemployeesassigned
in their locality, such additional allowances in the form of honorarium at rates not exceeding P1,000.00 in
provincesandcitiesandP700.00inmunicipalitiesmaybegrantedsubjecttothefollowingconditions:
a)ThatthegrantisnotmandatoryonthepartoftheLGUs
b)ThatallcontractualandstatutoryobligationsoftheLGUincludingtheimplementationofR.A.6758shall
havebeenfullyprovidedinthebudget
c) That the budgetaryrequirements/limitations under Section 324and 325ofR.A.7160 should besatisfied
and/orcompliedwithand
d)ThattheLGUhasfullyimplementedthedevolutionoffunctions/personnelinaccordancewithR.A.7160.3"
(italicssupplied)
xxxxxxxxx
Thesaidcircularlikewiseprovidedforitsimmediateeffectivitywithoutneedofpublication:
"5.0EFFECTIVITY
ThisCircularshalltakeeffectimmediately."
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ActingontheDBMdirective,theMandaueCityAuditorissuednoticesofdisallowancetohereinpetitioners,namely,
Honorable RTC Judges Mercedes G. Dadole, Ulric R. Caete, Agustin R. Vestil, Honorable MTC Judges
TemistoclesM.Boholst,VicenteC.FanilagandWilfredoA.Dagatan,inexcessoftheamountauthorizedbyLBC
55. Beginning October, 1994, the additional monthly allowances of the petitioner judges were reduced to P1,000
each.TheywerealsoaskedtoreimbursetheamounttheyreceivedinexcessofP1,000fromApriltoSeptember,
1994.
ThepetitionerjudgesfiledwiththeOfficeoftheCityAuditoraprotestagainstthenoticesofdisallowance.Butthe
CityAuditortreatedtheprotestasamotionforreconsiderationandindorsedthesametotheCOARegionalOffice
No.7.Inturn,theCOARegionalOfficereferredthemotiontotheheadofficewitharecommendationthatthesame
bedenied.
OnSeptember21,1995,respondentCOArenderedadecisiondenyingpetitioners'motionforreconsideration.The
COAheldthat:
TheissuetoberesolvedintheinstantappealiswhetherornottheCityOrdinanceofMandauewhichprovidesa
higher rate of allowances to the appellant judges may prevail over that fixed by the DBM under Local Budget
CircularNo.55datedMarch15,1994.
xxxxxxxxx
Applyingtheforegoingdoctrine,appropriationordinanceoflocalgovernmentunitsissubjecttotheorganizational,
budgetaryandcompensationpoliciesofbudgetaryauthorities(COA5thInd.,datedMarch17,1994re:Provinceof
AntiqueCOAletterdatedMay17,1994re:RequestofHon.RenatoLeviste,Cong.1stDist.OrientalMindoro).In
this regard, attention is invited to Administrative Order No. 42 issued on March 3, 1993 by the President of the
PhilippinesclarifyingtheroleofDBMinthecompensationandclassificationoflocalgovernmentpositionsunderRA
No. 7160 visavis the provisions of RA No. 6758 in view of the abolition of the JCLGPA. Section 1 of said
AdministrativeOrderprovidesthat:
"Section 1. The Department of Budget and Management as the lead administrator of RA No. 6758 shall,
throughitsCompensationandPositionClassificationBureau,continuetohavethefollowingresponsibilitiesin
connectionwiththeimplementationoftheLocalGovernmentCodeof1991:
a)Provideguidelinesontheclassificationoflocalgovernmentpositionsandonthespecificratesofpay
therefore
b)Providecriteriaandguidelinesforthegrantofallallowancesandadditionalformsofcompensation
tolocalgovernmentemployeesxxx."(underscoringsupplied)
To operationalize the aforecited presidential directive, DBM issued LBC No. 55, dated March 15, 1994, whose
effectivityclauseprovidesthat:
xxxxxxxxx
"5.0EFFECTIVITY
ThisCircularshalltakeeffectimmediately."
Itisawellsettledrulethatimplementingrulesandregulationspromulgatedbyadministrativeorexecutiveofficerin
accordance with, and as authorized by law, has the force and effect of law or partake the nature of a statute
(VictoriasMillingCo.,Inc.,vs.SocialSecurityCommission,114Phil.555,citedinAgpalo'sStatutoryConstruction,
2nd Ed. P. 16 Justice Cruz's Phil. Political Law, 1984 Ed., p. 103 Espanol vs. Phil Veterans Administration, 137
SCRA314AntiqueSawmillsInc.vs.Tayco,17SCRA316).
xxxxxxxxx
TherebeingnostatutorybasistograntadditionalallowancetojudgesinexcessofP1,000.00chargeableagainst
thelocalgovernmentunitswheretheyarestationed,thisCommissionfindsnosubstantialgroundsorcogentreason
to disturb the decision of the City Auditor, Mandaue City, disallowing in audit the allowances in question.
Accordingly,theabovecaptionedappealoftheMTCandRTCJudgesofMandaueCity,insofarasthesameisnot
coveredbyCircularLetterNo.917,isherebydismissedforlackofmerit.
xxxxxxxxx4
OnNovember27,1995,ExecutiveJudgeMercedesGozoDadole,forandinbehalfofthepetitionerjudges,fileda
motion for reconsideration of the decision of the COA. In a resolution dated May 28, 1996, the COA denied the
motion.
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Hence,thispetitionforcertioraribythepetitionerjudges,submittingthefollowingquestionsforresolution:
I
HAS THE CITY OF MANDAUE STATUTORY AND CONSTITUTIONAL BASIS TO PROVIDE
ADDITIONALALLOWANCESANDOTHERBENEFITSTOJUDGESSTATIONEDINANDASSIGNED
TOTHECITY?
II
CANANADMINISTRATIVECIRCULARORGUIDELINESUCHASLOCALBUDGETCIRCULARNO.
55RENDERINOPERATIVETHEPOWEROFTHELEGISLATIVEBODYOFACITYBYSETTINGA
LIMITTOTHEEXTENTOFTHEEXERCISEOFSUCHPOWER?
III
HASTHECOMMISSIONONAUDITCORRECTLYINTERPRETEDLOCALBUDGETCIRCULARNO.
55 TO INCLUDE MEMBERS OF THE JUDICIARY IN FIXING THE CEILING OF ADDITIONAL
ALLOWANCES AND BENEFITS TO BE PROVIDED TO JUDGES STATIONED IN AND ASSIGNED
TO MANDAUE CITY BY THE CITY GOVERNMENT AT P1,000.00 PER MONTH
NOTWITHSTANDING THAT THEY HAVE BEEN RECEIVING ALLOWANCES OF P1,500.00
MONTHLYFORTHEPASTFIVEYEARS?
IV
ISLOCALBUDGETCIRCULARNO.55DATEDMARCH15,1994ISSUEDBYTHEDEPARTMENT
OFBUDGETANDMANAGEMENTVALIDANDENFORCEABLECONSIDERINGTHATITWASNOT
DULYPUBLISHEDINACCODANCEWITHLAW?5
Petitioner judges argue that LBC 55 is void for infringing on the local autonomy of Mandaue City by dictating a
uniformamountthatalocalgovernmentunitcandisburseasadditionalallowancestojudgesstationedtherein.They
maintain that said circular is not supported by any law and therefore goes beyond the supervisory powers of the
President.Theyfurtherallegethatsaidcircularisvoidforlackofpublication.
On the other hand, the yearly appropriation ordinance providing for additional allowances to judges is allowed by
Section458,par.(a)(1)[xi],ofRA7160,otherwiseknownastheLocalGovernmentCodeof1991,whichprovides
that:
Sec.458.Powers,Duties,FunctionsandCompensation.(a)Thesangguniangpanlungsod,asthelegislativebody
ofthecity,shallenactordinances,approveresolutionsandappropriatefundsforthegeneralwelfareofthecityand
itsinhabitantspursuanttoSection16ofthisCodeandintheproperexerciseofthecorporatepowersofthecityas
providedforunderSection22ofthisCode,andshall:
(1) Approve ordinances and pass resolutions necessary for an efficient and effective city government, and in this
connection,shall:
xxxxxxxxx
(xi)Whenthefinancesofthecitygovernmentallow,provideforadditionalallowancesandotherbenefitstojudges,
prosecutors, public elementary and high school teachers, and other national government officials stationed in or
assignedtothecity(italicssupplied)
InsteadoffilingacommentonbehalfofrespondentCOA,theSolicitorGeneralfiledamanifestationsupportingthe
position of the petitioner judges. The Solicitor General argues that (1) DBM only enjoys the power to review and
determine whether the disbursements of funds were made in accordance with the ordinance passed by a local
government unit while (2) the COA has no more than auditorial visitation powers over local government units
pursuanttoSection348ofRA7160whichprovidesforthepowertoinspectatanytimethefinancialaccountsof
localgovernmentunits.
Moreover, the Solicitor General opines that "the DBM and the respondent are only authorized under RA 7160 to
promulgate a Budget Operations Manual for local government units, to improve and systematize methods,
techniquesandproceduresemployedinbudgetpreparation,authorization,executionandaccountability"pursuant
to Section 354 of RA 7160. The Solicitor General points out that LBC 55 was not exercised under any of the
aforementionedprovisions.
RespondentCOA,ontheotherhand,insiststhattheconstitutionalandstatutoryauthorityofacitygovernmentto
provide allowances to judges stationed therein is not absolute. Congress may set limitations on the exercise of
autonomy.ItisforthePresident,throughtheDBM,tocheckwhethertheselegislativelimitationsarebeingfollowed
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bythelocalgovernmentunits.
One such law imposing a limitation on a local government unit's autonomy is Section 458, par. (a) (1) [xi], of RA
7160, which authorizes the disbursement of additional allowances and other benefits to judges subject to the
condition that the finances of the city government should allow the same. Thus, DBM is merely enforcing the
conditionofthelawwhenitsetsauniformmaximumamountfortheadditionalallowancesthatacitygovernment
canreleasetojudgesstationedtherein.
Assuming arguendo that LBC 55 is void, respondent COA maintains that the provisions of the yearly approved
ordinancegrantingadditionalallowancestojudgesarestillprohibitedbytheappropriationlawspassedbyCongress
every year. COA argues that Mandaue City gets the funds for the said additional allowances of judges from the
Internal Revenue Allotment (IRA). But the General Appropriations Acts of 1994 and 1995 do not mention the
disbursementofadditionalallowancestojudgesasoneoftheallowableusesoftheIRA.Hence,theprovisionsof
said ordinance granting additional allowances, taken from the IRA, to herein petitioner judges are void for being
contrarytolaw.
Toresolvetheinstantpetition,therearetwoissuesthatwemustaddress:(1)whetherLBC55oftheDBMisvoidfor
goingbeyondthesupervisorypowersofthePresidentandfornothavingbeenpublishedand(2)whethertheyearly
appropriation ordinance enacted by the City of Mandaue that provides for additional allowances to judges
contravenestheannualappropriationlawsenactedbyCongress.
Weruleinfavorofthepetitionerjudges.
Onthefirstissue,wedeclareLBC55tobenullandvoid.
Werecognizethat,althoughourConstitution6guaranteesautonomytolocalgovernmentunits,theexerciseoflocal
autonomy remains subject to the power of control by Congress and the power of supervision by the President.
Section4ofArticleXofthe1987PhilippineConstitutionprovidesthat:
Sec.4.ThePresidentofthePhilippinesshallexercisegeneralsupervisionoverlocalgovernments.xxx
InPimentelvs.Aguirre7,wedefinedthesupervisorypowerofthePresidentanddistinguisheditfromthepowerof
controlexercisedbyCongress.Thus:
Thisprovision(Section4ofArticleXofthe1987PhilippineConstitution)hasbeeninterpretedtoexcludethepower
of control. In Mondano v. Silvosa,i 5 the Court contrasted the President's power of supervision over local
government officials with that of his power of control over executive officials of the national government. It was
emphasizedthatthetwotermssupervisionandcontroldifferedinmeaningandextent.TheCourtdistinguished
themasfollows:
"x x x In administrative law, supervision means overseeing or the power or authority of an officer to see that
subordinateofficersperformtheirduties.Ifthelatterfailorneglecttofulfillthem,theformermaytakesuchactionor
step asprescribedbylaw tomakethemperformtheirduties.Control, on the other hand,meansthe powerof an
officertoalterormodifyornullifyorsetasidewhatasubordinateofficerha[s]doneintheperformanceofhisduties
andtosubstitutethejudgmentoftheformerforthatofthelatter."ii6
InTaule v. Santos,iii7 we further stated that the Chief Executive wielded no more authority than that of checking
whetherlocalgovernmentsortheirofficialswereperformingtheirdutiesasprovidedbythefundamentallawandby
statutes. He cannot interfere with local governments, so long as they act within the scope of their authority.
"Supervisorypower,whencontrastedwithcontrol,isthepowerofmereoversightoveraninferiorbodyitdoesnot
includeanyrestrainingauthorityoversuchbody,"iv8wesaid.
In a more recent case, Drilon v. Lim,v 9 the difference between control and supervision was further delineated.
Officersincontrollaydowntherulesintheperformanceoraccomplishmentofanact.Iftheserulesarenotfollowed,
they may, in their discretion, order the act undone or redone by their subordinates or even decide to do it
themselves.Ontheotherhand,supervisiondoesnotcoversuchauthority.Supervisingofficialsmerelyseetoitthat
therulesarefollowed,buttheythemselvesdonotlaydownsuchrules,nordotheyhavethediscretiontomodifyor
replacethem.Iftherulesarenotobserved,theymayordertheworkdoneorredone,butonlytoconformtosuch
rules. They may not prescribe their own manner of execution of the act. They have no discretion on this matter
excepttoseetoitthattherulesarefollowed.
Under our present system of government, executive power is vested in the President.vi10 The members of the
Cabinetandotherexecutiveofficialsaremerelyalteregos.Assuch,theyaresubjecttothepowerofcontrolofthe
President, at whose will and behest they can be removed from office or their actions and decisions changed,
suspended or reversed.vii 11 In contrast, the heads of political subdivisions are elected by the people. Their
sovereign powers emanatefrom the electorate, towhom theyaredirectlyaccountable. Byconstitutional fiat, they
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aresubjecttothePresident'ssupervisiononly,notcontrol,solongastheiractsareexercisedwithinthesphereof
their legitimate powers. By the same token, the President may not withhold or alter any authority or power given
thembytheConstitutionandthelaw.
Clearlythen,thePresidentcanonlyinterfereintheaffairsandactivitiesofalocalgovernmentunitifheorshefinds
that the latter has acted contrary to law. This is the scope of the President's supervisory powers over local
governmentunits.Hence,thePresidentoranyofhisorheralteregoscannotinterfereinlocalaffairsaslongasthe
concernedlocalgovernmentunitactswithintheparametersofthelawandtheConstitution.Anydirectivetherefore
bythePresidentoranyofhisorheralteregosseekingtoalterthewisdomofalawconformingjudgmentonlocal
affairsofalocalgovernmentunitisapatentnullitybecauseitviolatestheprincipleoflocalautonomyandseparation
ofpowersoftheexecutiveandlegislativedepartmentsingoverningmunicipalcorporations.
DoesLBC55gobeyondthelawitseekstoimplement?Yes.
LBC55providesthattheadditionalmonthlyallowancestobegivenbyalocalgovernmentunitshouldnotexceed
P1,000 in provinces and cities and P700 in municipalities. Section 458, par. (a)(1)(xi), of RA 7160, the law that
supposedly serves as the legal basis of LBC 55, allows the grant of additional allowances to judges "when the
financesofthecitygovernmentallow."Thesaidprovisiondoesnotauthorizesettingadefinitemaximumlimittothe
additionalallowancesgrantedtojudges.Thus,weneednotbelaborthepointthatthefinancesofacitygovernment
mayallowthegrantofadditionalallowanceshigherthanP1,000iftherevenuesofthesaidcitygovernmentexceed
itsannualexpenditures.Thus,toillustrate,acitygovernmentwithlocallygeneratedannualrevenuesofP40million
and expenditures of P35 million can afford to grant additional allowances of more than P1,000 each to, say, ten
judgesinasmuchasthefinancesofthecitycanaffordit.
Setting a uniform amount for the grant of additional allowances is an inappropriate way of enforcing the criterion
found in Section 458, par. (a)(1)(xi), of RA 7160. The DBM overstepped its power of supervision over local
government units by imposing a prohibition that did not correspond with the law it sought to implement. In other
words,theprohibitorynatureofthecircularhadnolegalbasis.
Furthermore, LBC 55 is void on account of its lack of publication, in violation of our ruling in Taada vs. Tuvera8
whereweheldthat:
xxx.Administrativerulesandregulationsmustalsobepublishediftheirpurposeistoenforceorimplementexisting
lawpursuanttoavaliddelegation.
Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of an
administrativeagencyandthepublic,neednotbepublished.Neitherispublicationrequiredofthesocalledletters
of instruction issued by administrative superiors concerning the rules or guidelines to be followed by their
subordinatesintheperformanceoftheirduties.
Respondent COA claims that publication is not required for LBC 55 inasmuch as it is merely an interpretative
regulationapplicabletothepersonnelofanLGU.Wedisagree.InDeJesusvs.CommissiononAudit9 where we
dealtwiththesameissue,thisCourtdeclaredvoid,forlackofpublication,aDBMcircularthatdisallowedpayment
of allowances and other additional compensation to government officials and employees. In refuting respondent
COA'sargumentthatsaidcircularwasmerelyaninternalregulation,weruledthat:
On the need for publication of subject DBMCCC No. 10, we rule in the affirmative. Following the doctrine
enunciatedinTaadav.Tuvera, publication in the Official Gazette or in a newspaper of general circulation in the
Philippines is required since DBMCCC No. 10 is in the nature of an administrative circular the purpose of
whichistoenforceorimplementanexistinglaw.Stateddifferently,tobeeffectiveandenforceable,DBMCCC
No.10mustgothroughtherequisitepublicationintheOfficialGazetteorinanewspaperofgeneralcirculationin
thePhilippines.
Inthepresentcaseunderscrutiny,itisdecisivelyclearthatDBMCCCNo.10,whichcompletelydisallowspayment
of allowances and other additional compensation to government officials and employees, starting November 1,
1989,isnotamereinterpretativeorinternalregulation.Itissomethingmorethanthat.Andwhynot,whenittendsto
deprivegovernmentworkersoftheirallowanceandadditionalcompensationsorelyneededtokeepbodyandsoul
together.At the very least, before the said circular under attack may be permitted to substantially reduce
their income, the government officials and employees concerned should be apprised and alerted by the
publication of subject circular in the Official Gazette or in a newspaper of general circulation in the
Philippinestotheendthattheybegivenamplestopportunitytovoiceoutwhateveroppositiontheymay
have, and to ventilate their stance on the matter. This approach is more in keeping with democratic
preceptsandrudimentsoffairnessandtransparency.(emphasissupplied)
InPhilippineInternationalTradingCorporationvs.CommissiononAudit10,weagaindeclaredthesamecircularas
void,forlackofpublication,despitethefactthatitwasreissuedandthensubmittedforpublication.Emphasizing
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theimportanceofpublicationtotheeffectivityofaregulation,wethereinheldthat:
IthascometoourknowledgethatDBMCCCNo.10hasbeenreissuedinitsentiretyandsubmittedforpublication
in the Official Gazette per letter to the National Printing Office dated March 9, 1999. Would the subsequent
publicationthereofcurethedefectandretroacttothetimethattheabovementioneditemsweredisallowedinaudit?
Theanswerisinthenegative,preciselyforthereasonthatpublicationisrequiredasaconditionprecedenttothe
effectivity of a law to inform the public of the contents of the law or rules and regulations before their rights and
interestsareaffectedbythesame.FromthetimetheCOAdisallowedtheexpensesinaudituptothefilingofherein
petitionthesubjectcircularremainedinlegallimboduetoitsnonpublication.AswasstatedinTaadav.Tuvera,
"priorpublicationoflawsbeforetheybecomeeffectivecannotbedispensedwith,forthereasonthatitwoulddeny
thepublicknowledgeofthelawsthataresupposedtogovernit."11
WenowresolvethesecondissueofwhethertheyearlyappropriationordinanceenactedbyMandaueCityproviding
forfixedallowancesforjudgescontravenesanylawandshouldthereforebestruckdownasnullandvoid.
According to respondent COA, even if LBC 55 were void, the ordinances enacted by Mandaue City granting
additional allowances to the petitioner judges would "still (be) bereft of legal basis for want of a lawful source of
fundsconsideringthattheIRAcannotbeusedforsuchpurposes."RespondentCOAshowedthatMandaueCity's
fundsconsistedoflocallygeneratedrevenuesandtheIRA.From1989to1995,MandaueCity'syearlyexpenditures
exceeded its locally generated revenues, thus resulting in a deficit. During all those years, it was the IRA that
enabled Mandaue City to incur a surplus. Respondent avers that Mandaue City used its IRA to pay for said
additionalallowancesandthisviolatedparagraph2oftheSpecialProvisions,page1060,ofRA7845(TheGeneral
Appropriations Act of 1995)12 and paragraph 3 of the Special Provision, page 1225, of RA 7663 (The General
Appropriations Act of 1994)13 which specifically identified the objects of expenditure of the IRA. Nowhere in said
provisions of the two budgetary laws does it say that the IRA can be used for additional allowances of judges.
RespondentCOAthusarguesthattheprovisionsintheordinanceprovidingforsuchdisbursementareagainstthe
law, considering that the grant of the subject allowances is not within the specified use allowed by the aforesaid
yearlyappropriationsacts.
Wedisagree.
Respondent COA failed to prove that Mandaue City used the IRA to spend for the additional allowances of the
judges.TherewasnoevidencesubmittedbyCOAshowingthebreakdownoftheexpensesofthecitygovernment
andthefundsusedforsaidexpenses.AlltheCOApresentedweretheamountsexpended,thelocallygenerated
revenues,thedeficit,thesurplusandtheIRAreceivedeachyear.Asidefromtheseitems,nodataorfigureswere
presentedtoshowthatMandaueCitydeductedthesubjectallowancesfromtheIRA.Inotherwords,justbecause
MandaueCity'slocallygeneratedrevenueswerenotenoughtocoveritsexpenditures,thisdidnotmeanthatthe
additionalallowancesofpetitionerjudgesweretakenfromtheIRAandnotfromthecity'sownrevenues.
Moreover,theDBMneitherconductedaformalreviewnororderedadisapprovalofMandaueCity'sappropriation
ordinances,inaccordancewiththeprocedureoutlinedbySections326and327ofRA7160whichprovidethat:
Section 326. Review of Appropriation Ordinances of Provinces, Highly Urbanized Cities, Independent Component
Cities, and Municipalities within the Metropolitan Manila Area. The Department of Budget and Management shall
review ordinances authorizing the annual or supplemental appropriations of provinces, highlyurbanized cities,
independent component cities, and municipalities within the Metropolitan Manila Area in accordance with the
immediatelysucceedingSection.
Section 327. Review of Appropriation Ordinances of Component Cities and Municipalities. The sangguninang
panlalawiganshallreviewtheordinanceauthorizingannualorsupplementalappropriationsofcomponentcitiesand
municipalitiesinthesamemannerandwithinthesameperiodprescribedforthereviewofotherordinances.
Ifwithinninety(90)daysfromreceiptofcopiesofsuchordinance,thesangguniangpanlalawigantakesno
actionthereon,thesameshallbedeemedtohavebeenreviewedinaccordancewithlawandshallcontinue
tobeinfullforceandeffect.(emphasissupplied)
Within90daysfromreceiptofthecopiesoftheappropriationordinance,theDBMshouldhavetakenpositiveaction.
Otherwise, such ordinance was deemed to have been properly reviewed and deemed to have taken effect.
Inasmuch as, in the instant case, the DBM did not follow the appropriate procedure for reviewing the subject
ordinance of Mandaue City and allowed the 90day period to lapse, it can no longer question the legality of the
provisionsinthesaidordinancegrantingadditionalallowancestojudgesstationedinthesaidcity.
WHEREFORE, the petition is hereby GRANTED, and the assailed decision and resolution, dated September 21,
1995andMay28,1996,respectively,oftheCommissiononAuditareherebysetaside.
Nocosts.
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SOORDERED.
Davide,Jr.,C.J.,Bellosillo,Vitug,Mendoza,Panganiban,Quisumbing,YnaresSantiago,SandovalGutierrez,
Carpio,AustriaMartinez,CarpioMorales,andCallejo,Sr.,JJ.,concur.
Puno,J.,onofficialbusiness.
Azcuna,J.,onleave.

Footnotes

1COADecisionNo.95568Rollo,pp.4247.
2COADecisionNo.96282Rollo,pp.4849.
3Rollo,p.128Rollo,p.47.
4Rollo,pp.4447.
5Rollo,p.24.
6Sec.25,[Art.II].TheStateshallensuretheautonomyoflocalgovernments.

Sec.2,[Art.X].Theterritorialandpoliticalsubdivisionsshallenjoylocalautonomy.
7336SCRA201,214215(2000).
8146SCRA453,454(1986).
9294SCRA152,157158(1998).
10309SCRA179,189(1999).
11Id.,p.189.
12SPECIALPROVISIONS

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3.UseofFunds.Theamounthereinshall,pursuanttoSection17(g)oftheCode,provideforthecost
ofbasicservicesandfacilitiesenumeratedunderSection17(b)thereof,particularlythosewhichhave
beendevolvedbytheDepartmentofHealth,theDepartmentofSocialWelfareandDevelopment,the
DepartmentofAgriculture,andtheDepartmentofEnvironmentandNaturalResourcesaswellasother
agenciesofthenationalgovernment,including(1)construction/improvement,repairandmaintenance
of local roads (2) concrete barangay roads/multipurpose pavements construction and improvement
program to be implemented in accordance with R.A. No. 6763 (3) construction, rehabilitation and
improvement of communal irrigation projects/systems PROVIDED, That each local government unit
shall,inaccordancewithSection287oftheCode,appropriateinitsannualbudgetnolessthantwenty
percent (20%) of its share from internal revenue allotment for development projects PROVIDED,
FURTHER, That enforcement of the provisions of Sections 325(a) and 331(b) of the Code shall be
waived to enable local government units to absorb national government personnel transferred on
account of devolution, create the mandatory positions specified in the Code, enable the barangay
officials to receive the minimum allowable level of remuneration provided under Section 393 of the
CodeaswellascontinuetheimplementationofthesalarystandardizationauthorizedunderR.A.No.
6758:PROVIDED,FINALLY,ThatsuchamountsasmaybedeterminedbytheDepartmentofBudget
andManagementcorrespondingtotherequirementsofhealthcareandservicesasdevolvedtoLocal
GovernmentsUnitsR.A.No.7160shallnotberealignedorutilizedbyLGUsconcernedforanyother
expenditureorpurpose.
13SPECIALPROVISIONS

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2. Use of Funds. The amount herein appropriated shall, pursuant to Section 17(g) of the Code,
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provideforthecostofbasicservicesandfacilitiesenumeratedunderSection17(b)thereof,particularly
thosedevolvedbytheDepartmentofHealth,theDepartmentofSocialWelfareandDevelopment,the
DepartmentofAgriculture,andtheDepartmentofEnvironmentandNaturalResourcesaswellasother
agenciesoftheNationalGovernment,including(1)construction/improvement,repairandmaintenance
of local roads (2) concrete barangay roads/multipurpose pavements, construction and improvement
program to be implemented in accordance with R.A. No. 6763 (2) construction, rehabilitation and
improvement of communal irrigation projects/systems and (4) payment of not less than fifty percent
(50%)ofthetotalrequirementfortheMagnaCartabenefitsofdevolvedhealthworkerspursuanttothe
provisionsofR.A.No.7305andsuchotherguidelinesthatmaybeissuedbytheDepartmentofHealth
forthepurpose:PROVIDED,Thateachlocalgovernmentunitshall,inaccordancewithSection287of
the Code, appropriate in its budget no less than twenty percent (20%) of its share from Internal
Revenue Allotment for development projects PROVIDED, FURTHER, That enforcement of the
provisionsofSections325(a)and331(b)oftheCodeshallbewaivedenablelocalgovernmentunitsto
absorband/ormaintainnationalgovernmentpersonneltransferredonaccountofdevolution,createthe
mandatory positions specified in the Code, enable the barangay officials to receive the minimum
allowable level of remuneration provided under Section 393 of the Code, as well as continue the
implementationofthesalarystandardizationauthorizedunderR.A.No.6758andthepaymentofnot
less than fifty percent (50%) of the total requirement for the Magna Carta benefits of health workers
mandated under R.A. No. 7305 and such other guidelines as may be issued by the Department of
Healthforthepurpose.
TheLawphilProjectArellanoLawFoundation

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