Case Digest (G.R. No. 212764)
Facts:
Aquilino Q. Pimentel Jr., petitioner, filed an original petition for certiorari and prohibition challenging Administrative Order No. 372 (AO 372) dated December 27, 1997 insofar as Section 1 directed all local government units to reduce non‑personal expenditures by 25% and Section 4 withheld a portion of their internal revenue allotment (IRA); Administrative Order No. 43 (AO 43) of December 10, 1998 later reduced the withholding to five percent. Roberto Pagdanganan intervened; the matter was heard en banc and decided July 19, 2000.
Issues:
- Did the President commit grave abuse of discretion by ordering all LGUs to adopt a 25% cost reduction in violation of their fiscal autonomy?
- Did the President commit grave abuse of discretion by ordering the withholding of 10% (later 5%) of the LGUs' IRA?
Ruling:
The Petition was partly granted. The Court held that Section 1 of AO 372 was advisory only and did not constitute a valid exercise of control over LGUs. The Court struck down Section 4 of AO 372 (and AO 43 insofar as it withholds IRA) as unconstitutional and permanently prohibited respondents from implementing those provisions with respect to LGUs.
Ratio:
The Court reasoned that the President possesses only a power of general supervision over LGUs and may not alter or withhold powers granted by the Constitution and law; supervisory advisories that urge fiscal restraint are permissible but mandatory commands are not. The withholding of IRA violated Section 6, Article X of the Constitution and Section 286(a) of the Local Government Code, which mandate automatic release of LGU shares and forbid any lien or holdback; temporary retention is nonetheless a prohibited holdback. Adjustments to IRA under Section 284 are permissible only upon specified requisites (an unmanageable public sector deficit, recommendations of specified Secretaries, consultation with congressional presiding officers and league presidents, and a floor of thirty percent), none of which were shown to have been complied with.
Doctrine:
- The President has a power of general supervision over LGUs but not a power of control to alter or withhold their statutory or constitutional powers.
- (Get Pro to unlock 4 more doctrines)