CONSTITUTIONAL LAW 1

Professor: Atty. Sedillo

G.R. No. 199802
Ponente: Bersamin, J
Mandanas vs Ochoa JULY 3, 2018 Submitted by: Submitted on:

Petitioners:
CONGRESSMAN HERMILANDO I.
MANDANAS; MAYOR EFREN B. DIONA;
MAYOR ANTONINO A. AURELIO; KAGA WAD
MARIOILAGAN;BARANGAY CHAIR PERLITO
MANALO; BARANGA Y CHAIR MEDEL
MEDRANO;BARANGAY KAGA WAD CRIS
RAMOS; BARANGA Y KAGA WAD ELISA D.
BALBAGO, and ATTY. JOSE MALVAR
VILLEGAS
Respondents:
XECUTIVE SECRETARY PAQUITO N.
OCHOA, JR.; SECRETARY CESAR
PURISIMA, Department of Finance;
SECRETARY FLORENCIO H. ABAD,
Department of Budget and Management;
COMMISSIONER KIM JACINTO-HENARES,
Bureau of Internal Revenue; and NATIONAL
TREASURER ROBERTO TAN, Bureau of the
Treasury

DOCTRINE OF THE CASE:

NATURE OF PETITION:
A special civil action for certiorari, prohibition and mandamus assailing the manner the General
Appropriations Act (GAA) for FY 2012 computed the IRA for the LGUs.

RELEVANT LAWS:

Section 284 of the LGC in relation to Section 6, Article X of the 1987 Constitution

(if pwede, paste here the law in question or used, only the relevant part)
FACTS:

 One of the key features of the 1987 Constitution is its push towards decentralization
of government and local autonomy. Local autonomy has two facets, the
administrative and the fiscal.
 Implementing the constitutional mandate for decentralization and local autonomy,
Congress enacted Republic Act No. 7160, otherwise known as the Local
Government Code (LGC).
 The share of the LGUs, heretofore known as the Internal Revenue Allotment (IRA),
has been regularly released to the LGUs. According to the implementing rules and
regulations of the LGC, the IRA is determined on the basis of the actual collections of
the National Internal Revenue Taxes (NIRTs) as certified by the Bureau of Internal
Revenue (BIR).
 Mandanas, et al. allege herein that certain collections of NIR Ts by the Bureau of
Customs (BOC) - specifically: excise taxes, value added taxes (VATs) and
documentary stamp taxes (DSTs) - have not been included in the base amounts for
the computation of the IRA; that such taxes, albeit collected by the BOC, should form
part of the base from which the IRA should be computed because they constituted
NIRTs; that, consequently, the release of the additional amount of
₱60,750,000,000.00 to the LGUs as their IRA for FY 2012 should be ordered; and
 that for the same reason the LGUs should also be released their unpaid IRA for FY
1992 to FY 2011, inclusive, totaling ₱438,103,906,675.73.

Issues Ruling
 Is Section 284 of the LGC unconstitutional for being repugnant to Section
YES
6, Article X of the 1987 Constitution?
 Can the LGUs’ just share in the national taxes be automatically released YES
without the need of an appropriation?

RULING:

1. There is no issue as to what constitutes the LGUs' just share expressed in percentages of
the national taxes (i.e.,30%, 35% and 40% stipulated in subparagraphs (a), (b), and (c) of
Section 284 ). Yet, Section 6, supra, mentions national taxes as the source of the just share of
the LGUs while Section 284 ordains that the share of the LG Us be taken from national internal
revenue taxes instead.
Although the power of Congress to make laws is plenary in nature, congressional lawmaking
remains subject to the limitations stated in the 1987 Constitution. The phrase national internal
revenue taxes engrafted in Section 284 is undoubtedly more restrictive than the term national
taxes written in Section 6. As such, Congress has actually departed from the letter of the 1987
Constitution stating that national taxes should be the base from which the just share of the LGU
comes. Such departure is impermissible. Verba legis non est recedendum (from the words of a
statute there should be no departure). Equally impermissible is that Congress has also thereby
curtailed the guarantee of fiscal autonomy in favor of the LGUs under the 1987 Constitution.
Although it has the primary discretion to determine and fix the just share of the LGUs in the
national taxes (e.g., Section 284 of the LGC), Congress cannot disobey the express mandate of
Section 6, Article X of the 1987 Constitution for the just share of the LGUs to be derived from
the national taxes. The phrase as determined by law in Section 6 follows and qualifies the
phrase just share, and cannot be construed as qualifying the succeeding phrase in the national
taxes. The intent of the people in respect of Section 6 is really that the base for reckoning the
just share of the LGUs should include all national taxes. To read Section 6 differently as
requiring that the just share of LGUs in the national taxes shall be determined by law is
tantamount to the unauthorized revision of the 1987 Constitution.
2. Section 6, Article X of the 1987 Constitution commands that the just share of the LGUs in
national taxes shall be automatically released to them. The term automatic connotes
something mechanical, spontaneous and perfunctory; and, in the context of this case, the
LGUs are not required to perform any act or thing in order to receive their just share in the
national taxes.
Section 6 does not mention of appropriation as a condition for the automatic release of the
just share to the LGUs. This is because Congress not only already determined the just
share through the LGC's fixing the percentage of the collections of the NIRTs to constitute
such fair share subject to the power of the President to adjust the same in order to manage
public sector deficits subject to limitations on the adjustments, but also explicitly authorized
such just share to be "automatically released" to the LGUs in the proportions and regularity
set under Section 285 of the LGC without need of annual appropriation.
The 1987 Constitution is forthright and unequivocal in ordering that the just share of the
LGUs in the national taxes shall be automatically released to them. With Congress having
established the just share through the LGC, it seems to be beyond debate that the inclusion
of the just share of the LGUs in the annual GAAs is unnecessary, if not superfluous. Hence,
the just share of the LGUs in the national taxes shall be released to them without need of
yearly appropriation.