Case Summary (G.R. No. 125350)
Key Dates
• 1986 – Initial grant of P1,260 monthly allowances.
• 1991 – City ordinance increases allowances to P1,500.
• March 15, 1994 – DBM issues Local Budget Circular (LBC) No. 55, capping allowances at P1,000.
• September 21, 1995 – COA decision affirming disallowance.
• May 28, 1996 – COA resolution denying motion for reconsideration.
• December 3, 2002 – Supreme Court decision.
Applicable Law
• 1987 Constitution, Article X, Section 4 (Presidential general supervision over local governments).
• Republic Act No. 7160 (Local Government Code of 1991), Section 458(a)(1)(xi) (power of sangguniang panlungsod to grant additional allowances when finances allow).
• DBM Local Budget Circular No. 55 (1994).
• Sections 326–327, RA 7160 (procedure for DBM review of local appropriation ordinances).
• Publication requirements under Taftada v. Tuvera and De Jesus v. Commission on Audit.
Background Facts
From 1986, RTC and MTC judges in Mandaue City received P1,260 monthly allowances, raised by city ordinance to P1,500 in 1991. DBM LBC 55 (1994) unilaterally capped all local additional allowances at P1,000 per month. The City Auditor enforced this cap, reducing monthly payments and demanding reimbursement for the excess. The judges’ protests were treated as motions for reconsideration and ultimately denied by COA.
Procedural History
Petitioners filed a petition for certiorari under Rule 64 seeking annulment of COA’s September 21, 1995 decision and May 28, 1996 resolution. The issues raised addressed the city’s authority to grant allowances, the validity and enforceability of LBC 55, COA’s interpretation thereof, and publication requirements.
Issues for Resolution
- Whether Mandaue City has statutory and constitutional authority to grant additional allowances to judges assigned therein.
- Whether an administrative circular such as LBC 55 can limit the legislative power of the city council.
- Whether COA correctly interpreted LBC 55 to cap judicial allowances at P1,000.
- Whether LBC 55 is valid and enforceable absent publication.
Petitioners’ Arguments
• Section 458(a)(1)(xi) of RA 7160 expressly empowers the city council to grant additional allowances “when the finances of the city government allow.”
• LBC 55 lacks statutory basis, improperly exercises presidential supervision as control, and infringes local autonomy.
• The circular was never published and thus violates constitutional due process and publication precedents.
Respondent’s Position
• Local autonomy is subject to congressional limitation and presidential supervision; RA 7160’s “when finances allow” condition permits DBM to set a maximum.
• Even if LBC 55 were void, the city’s appropriation ordinance lacks a lawful funding source since the Internal Revenue Allotment (IRA) may not be used for judicial allowances under the General Appropriations Acts.
Supreme Court’s Analysis: Presidential Supervision vs Local Autonomy
Under the 1987 Constitution, the President’s general supervision over local governments (Art. X, Sec. 4) does not extend to control or modification of duly enacted local ordinances. Supervision entails oversight to ensure legality, not the power to prescribe or limit policy choices properly adopted within statutory authority.
Supreme Court’s Analysis: Exceeding Statutory Authority
LBC 55’s fixed ceiling of P1,000 per month conflicts with RA 7160’s grant of discretion to city councils to set allowances based on financial capacity. By imposing an arbitrary cap, DBM exceeded its supervisory mandate and enacted a prohibition unsupported by statute.
Supreme Court’s Analysis: Publication Requirement
DBM LBC 55 was not published in the Official Gazette or a newspaper of general circulation. Pre–enactment pub
...continue readingCase Syllabus (G.R. No. 125350)
Facts
- In 1986, all Regional Trial Court (RTC) and Municipal Trial Court (MTC) judges of Mandaue City began receiving monthly additional allowances of ₱1,260 under a yearly appropriation ordinance passed by the Sangguniang Panlungsod.
- In 1991, the city ordinance increased these allowances to ₱1,500 per month for each judge.
- On March 15, 1994, the Department of Budget and Management (DBM) issued Local Budget Circular No. 55 (LBC 55), which:
- Authorized additional allowances to national government officials assigned to localities, not to exceed ₱1,000/month in cities and provinces.
- Imposed conditions on grant of such allowances, including budget sufficiency, compliance with devolution, and optional grant by LGUs.
- Took effect immediately, without prior publication.
Notices of Disallowance
- Acting on LBC 55, the Mandaue City Auditor issued notices of disallowance reducing the judges’ allowances to ₱1,000/month beginning October 1994.
- Judges were ordered to reimburse the excess allowances received from April through September 1994.
- A protest filed by the petitioners was treated as a motion for reconsideration and elevated to the Commission on Audit (COA).
Procedural History
- September 21, 1995: COA denied the petitioners’ motion for reconsideration (COA Decision No. 95-568), upholding the ₱1,000 ceiling.
- May 28, 1996: COA denied the subsequent motion for reconsideration (COA Resolution No. 96-282).
- Petition for certiorari under Rule 64 filed with the Supreme Court, assailing the COA decisions.
Issues Presented
- Whether Mandaue City has statutory and constitutional authority to grant additional allowances to judges beyond ₱1,000/month.
- Whether an administrative circular (LBC 55) can limit the exercise of a city’s legislative power on local allowances.
- Whether COA correctly interpreted LBC 55 as including members of the judiciary.
- Whether LBC 55 is valid and enforceable despite lack of publication.
Petitioners’ Contentions
- LBC 55 infringes on Mandaue City’s autonomy and e