Title
Pimentel, Jr. vs. Aguirre
Case
G.R. No. 132988
Decision Date
Jul 19, 2000
Petitioner challenged AO 372, which mandated 25% cost reduction and withheld LGUs' IRA, arguing it violated fiscal autonomy. SC upheld advisory nature of cost reduction but declared IRA withholding unconstitutional, emphasizing President's limited supervisory power and LGUs' fiscal autonomy.

Case Digest (G.R. No. 132988)

Facts:

  • Parties and Proceedings
  • Petitioner Aquilino Q. Pimentel Jr. filed an original petition for certiorari and prohibition to annul Section 1 of Administrative Order No. 372 (AO 372) and enjoin the implementation of Section 4 of the same order.
  • Roberto Pagdanganan, Bulacan Provincial Governor and league president, was permitted to intervene, joining petitioner in seeking relief.
  • Administrative Orders at Issue
  • AO 372 (December 27, 1997) directed all government agencies, including LGUs, to reduce non‐personal services expenditures by at least 25 % of authorized appropriations (Sec. 1) and to withhold 10 % of LGUs’ internal revenue allotment (IRA) pending fiscal assessment (Sec. 4).
  • AO 43 (December 10, 1998) amended Sec. 4 of AO 372 by reducing the withheld IRA share from 10 % to 5 %.
  • Contentions of the Parties
  • Petitioner argued that AO 372’s directives exceed the President’s supervisory power, constitute control, and violate local fiscal autonomy under Art. X, Secs. 4 and 6 of the Constitution and Sec. 286 of the Local Government Code (LGC).
  • Respondents (Executive Secretary and DBM Secretary) maintained that AO 372 is a valid exercise of the President’s power of general supervision, that Sec. 1 is merely advisory with no sanctions, and that Sec. 4’s withholding is temporary pending fiscal review.

Issues:

  • Whether Section 1 of AO 372, ordering LGUs to implement a 25 % expenditure reduction, is a valid exercise of the President’s power of general supervision or an unlawful exercise of control over LGUs.
  • Whether Section 4 of AO 372 (and its amendment in AO 43), withholding 10 % (later 5 %) of LGUs’ IRA, violates the Constitution’s guarantee of automatic release (Art. X, Sec. 6) and Sec. 286 of the LGC prohibiting any lien or holdback on IRA shares.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)

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