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[G.R. No. 138498. June 15, 1999]

ROBERTO M. PAGDANGANAN vs. RONALDO V. PUNO

EN BANC

Gentlemen:

Quoted hereunder, for your information, is a resolution of this Court dated JUN 15, 1999.

G.R. No. 138498 (Roberto M. Pagdanganan and Ramon Pagdanganan vs. Ronaldo V. Puno.)

Memorandum Circular No. 99-66, dated April 23, 1999, of the Department of Interior and Local Government (DILG) prescribes guidelines for the use of the development fund which local government units are required to set aside from the annual internal allotment given to them under §287 of R.A. No. 7610, otherwise known as the Local Government Code. On the other hand, Memorandum Circular No. 99-65 of the DILG, dated April 23, 1999, prescribes guidelines for the use of whatever intelligence fund local government unit may have. The validity of these memorandum circulars is questioned in separate petitions for certiorari and prohibition filed in these cases.

Petitioner Roberto M. Pagdanganan is suing as a taxpayer and resident of Calumpit, Bulacan, while petitioner Ramon M. Pagdanganan is suing as mayor of Calumpit, Bulacan. They contend that the memorandum circulars in question violate the constitutional guarantee of local and fiscal autonomy by imposing limits on the use of the development and intelligence funds by local government units thus depriving them of "discretion and judgment in deciding how these shall be appropriated and used." They contend that as there are no legislative restrictions, there can be no restrictions by the national government.

Challenged as unconstitutional in G.R. No. 138498 are the following provisions of Memorandum Circular No. 99-66:

II. GENERAL POLICIES AND GUIDELINES

In support of the Framework of Governance of the Presidency, the pertinent provisions of Memorandum Circular No. 95-216, as amended, are hereby reiterated, or further amended, as follows:

General Policies

1. The 20% Development Fund shall be appropriated for programs, projects and activities in furtherance of the development agenda of the government, such as food security, poverty eradication, job generation, livelihood, housing, environmental protection, health and sanitation and peace and order. Provided, that financial allocation for welfare programs and services in favor of the needy and the marginal sectors in a locality may be augmented from out of the 20% Development Fund during calamities and disasters.

2. Employable skills-oriented trainings in support of job generation and livelihood promotion efforts may be funded out of the 20% Development Fund. Provided, that the 20% Development Fund, or a portion thereof, shall not be utilized for local government internal capability-building trainings, seminars or study tours of local government officials or personnel.

3. The 20% Development Fund, or a part thereof, may be appropriated and disbursed for the prosecution of brand new heavy equipment only, for infrastructure, agricultural development and environmental management projects. Provided, that the purchase of such equipment shall not prejudice jobs and livelihood opportunities. Provided further, that requests for the use of said Fund, or a portion thereof, to finance the purchase of heavy equipment shall first be approved by the Secretary of the Interior and Local Government.

4. The local Annual Investment Plan (AIP) shall clearly specify the programs, projects or activities that are to be funded from out of the 20% Development Fund. A copy of the AIP shall be furnished the Field Offices of the Department of the Interior and Local Government for monitoring and other general supervisor-related purposes. Each local government unit shall, likewise, provide a copy of the said AIP to the Commission of Audit's Field Office concerned.

5. Any reverted or unexpended balance of the 20% Development Fund during the year shall be re-approriated to finance only those development programs, projects or activities identified to be funded under the 20% Development Fund for the ensuing year.

Program, Project and Activity Coverage

Expenditures from out of the 20% Development Fund shall be limited to the following sectoral programs, projects or activities:

1. Social Development

(a)        Human and Ecological Security initiatives (20% of the 20% Development Fund) which shall include, but not limited to, the following:

(i)         Comprehensive solid waste management, including the purchase of brand new equipment, such as garbage trucks and garbage compactor trucks, as well as, the purchase of land for sanitary landfill purposes.

(ii)        Purchase of lot for hospitals, health centers, day care centers and similar facilities, including their construction, maintenance or repair;

(iii)       Purchase of lot for the resettlement of squatters, including the construction of housing units and facilities;

(iv)       Purchase of lot for public parks, including maintenance, as well as, labor-intensive cleaning and greening of built-up areas, and community reforestation projects;

(v)        Purchase of medicines and other medical supplies and equipment, and basic commodities' assistance for the displaced and the needy in times of disasters and calamities; and

(vi)       Youth Welfare and Development Programs, e.g., drug abuse prevention, control and rehabilitation, out-of-school youth education, job placement and referrals, community-based physical fitness and sports development, and other related projects or activities;

(b)        Purchase of fire trucks, patrol cars, patrol jeeps, and other relevant equipment for purposes of maintaining law and order and public safety;

(c)        Tourism Development and Promotion; and

(d)        Other social development undertakings which are highly supportive of job generation and livelihood opportunities.

2. Economic Development

(a)        Food Security Program;

(b)        Poverty Eradication initiatives;

(c)        Seedling nurseries, agricultural demonstration farms and animal breeding stations, including the purchase or rent of implements;

(d)        Cooperatives Development;

(e)        Livestock Dispersal;

(f)        Fishery Development and Fish Culture Farming;

(g)        Pre-investment studies as part of investment projects intended to generate jobs and livelihood opportunities; and

(h)        Other economic developments undertakings which are highly supportive of job generation and livelihood opportunities.

3. Infrastructure Development

(a)        Construction, maintenance or repair of:

(i)         agricultural post-harvest facilities, irrigation and other agro-production systems;

(ii)        provincial, city, municipal, or barangay roads and bridges;

(iii)       water and sewerage system, as well as, power and communication facilities; and

(iv)       public buildings, such as, but not limited to the following:

-           Provincial capitol, city hall, municipal hall and barangay hall;

-           Public schools and reading centers; and

-           Public markets and slaughterhouses.

including the purchase of brand new heavy equipment necessary in the implementation of infrastructure undertakings; and

(b)        Development of industrial parks or areas.

III. AUTHORITY TO USE THE 20% DEVELOPMENT FUND

The use of the 20% Development Fund, or a portion thereof, to finance the purchase of a brand new heavy equipment for infrastructure, agricultural development or environmental management programs or projects, shall first be approved by the Secretary of the Interior and Local Government. Any request for the use of the said Fund, or any part thereof, for the purchase of heavy equipment shall be endorsed by the DILG Regional Director concerned after a complete and substantive review of the documents submitted, as well as, verification of the circumstances justifying the purchase of equipment, through the Director of the Bureau of Local Governments Supervision, and Undersecretary for Local Government for final processing and evaluation, to the Secretary of the Interior and Local Government, together with the following documents, namely:

1.         Approved Annual Equipment Procurement Program, specifying therein the heavy equipment to be purchased;

2.         Approved Annual Budget, indicating the amount appropriated for the heavy equipment to be purchased;

3.         Certification from the local Treasurer, and attested by the Local Chief Executive concerned, as to the source of fund, except the 20% Development Fund, for the maintenance of the heavy equipment to be purchased; and

4.         Certification from the Local Chief Executive concerned, as to how the heavy equipment to be purchased directly generate jobs or livelihood opportunities, for whom and how, and other relevant information.

VI. SANCTIONS

Any local official, who willfully or through negligence, violates any of the provisions of this Memorandum Circular shall be subject to the sanctions provided under the Local Government Code and under such other applicable laws.

On the other hand, in G.R. No. 138499, petitioners assail the following provisions of Memorandum Circular No. 99-65:

II. POLICIES AND GUIDELINES

....

2.         Funds for Intelligence or Confidential purposes may be sourced from the: (a) appropriations for peace and order; or (b) total annual appropriations. Provided, that the total annual amount appropriated for Intelligence or Confidential undertakings shall not exceed thirty per cent (30%) of the total annual amount allocated for peace and order efforts or three per cent (3%) of the total annual appropriations, whichever is lower.

3.         The use for Intelligence or Confidential activities shall be limited to the following: (a) purchase of information; (b) payment of rewards; (c) rental and other incidental expenses relative to the maintenance of safehouses; and (d) purchase of supplies and ammunitions, provision of medical and food aid, as well as, payment of incentives or traveling expenses relative to the conduct of intelligence or confidential operations;

III. EXEMPTION

Allocation for Intelligence or Confidential purposes beyond the limitations prescribed under Item II.2 of these Guidelines shall be subject to the prior approval of the Secretary of the Interior and Local Government.

Petitioners contend that in view of the grant of local and fiscal autonomy to them, local government units have authority t determine the allocation and disbursement of local funds. They argue that since R.A. No. 7160 does not limit the use of local funds to specific development projects or grant the DILG the authority to approve expenditures and disbursements relative to the development fund as well as the intelligence fund, the portions of Memorandum Circular No. 99-66 and Memorandum Circular No. 99-65 quoted above are contrary to the grant of local and fiscal autonomy to local government units.

After due deliberation, the Court RESOLVED to DISMISS the instant petitions for the following reasons:

1. Petitioners have no standing. Petitioners' asserted status as taxpayers does not give them the right to question the constitutionality of the memorandum circulars concerned since the circulars do not involve the exercise of the taxing or the spending power of local governments. Nor do petitioners have standing as residents of local government units as they do not allege any direct and personal injury as a result of the application of the memorandum circulars to them. If at all, petitioners' only interest is a generalized one shared in common with other people.

Petitioners contend that the memorandum circulars infringe on the local and fiscal autonomy of local government units. If so, the proper parties to raise the question should be the local government units. Although petitioner Ramon M. Pagdanganan states that he is mayor of a municipality, it does not appear he has been authorized to bring these suits through appropriate resolutions of the local government unit (R.A. No. 7610 §§22(2) and 447(a)).

2. There is no actual case or controversy. The questions raised are abstract and hypothetical. At best, the instant petitions are anticipatory; otherwise, there is no immediacy of threat to any right of petitioners. "[The power of] judicial review cannot be exercised in vacuo," (See Allied Broadcasting Center, Inc. V. Republic, 190 SCRA 782, 787 (1990)). It can only be exercised in the decision of an actual case brought by parties asserting antagonistic claims. Otherwise, courts would be rendering advisory opinions, which, of course, they cannot.

WHEREFORE, the instant petition are DISMISSED. Panganiban, J., is on leave.

Very truly yours,

LUZVIMINDA D. PUNO

Clerk of Court


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