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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE
Every local government unit (LGU), as a corporation, shall have corporate powers such as: (1) to have continuous succession in its corporate name; (2) to sue and be sued; (3) to have and use a corporate seal; (4) to acquire and convey real or personal property; (5) to enter into contracts; and (6) to exercise such other powers as are granted to corporations, subject to the limitations provided in this Code and other laws. (Section 2 par. a, Book I, Local Government Code)
Local Autonomy
An LGU has been defined as a political subdivision of the State which is constituted by law and possessed of substantial control over its own affairs. (Republic of the Philippines v. Provincial Government of Palawan, G.R. No. 170867, January 21, 2020)
The law says:
“The territorial and political subdivisions shall enjoy local autonomy.” (Section 2, Article X, 1987 Constitution)
Jurisprudence says:
“It must be clarified that the constitutional guarantee of local autonomy in the Constitution (Art. X, sec. 2) refers to the administrative autonomy of local government units or, cast in more technical language, the decentralization of government authority. (Cordillera Broad Coalition v. Commission on Audit, G.R. No. 79956, January 29, 1990)
Fiscal Autonomy
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. Fiscal autonomy means that local governments have the power to create their own sources of revenue in addition to their equitable share in the national taxes released by the National Government, as well as the power to allocate their resources in accordance with their own priorities. (Mandanas v. Ochoa, Jr., G.R. No. 208488, July 3, 2018)
Beginning of Corporate Existence
When a local government unit is created, its corporate existence shall thereafter begin.
The law says:
When a new local government unit is created, its corporate existence shall commence upon election and qualification of its chief executive and a majority of the members of its Sanggunian, unless some other time is fixed therefor by the law or ordinance creating it. (Section 14, Book I, LGC)
Corporate Powers of LGUs
Under the Local Government Code, as a corporation, every local government unit shall have corporate powers. By virtue of its corporate existence, an LGU may exercise such corporate powers under the Local Government Code.
The law says:
“Every local government unit, as a corporation, shall have the following powers:
- To have continuous succession in its corporate name:
- To sue and be sued;
- To have and use a corporate seal;
- To acquire and convey real or personal property;
- To enter into contracts; and
- To exercise such other powers as are granted to corporations, subject to the limitations provided in this Code and other laws.” (Section 22, par. a., Book I, LGC)
What is a municipal corporation?
The law says:
“Political and Corporate Nature of Local Government Units. – Every local government unit created or recognized under this Code is a body politic and corporate endowed with powers to be exercised by it in conformity with law. As such, it shall exercise powers as a political subdivision of the national government and as a corporate entity representing the inhabitants of its territory.” (Section 15, LGC)
Jurisprudence says:
“Municipal corporations are now commonly known as local governments. They are the bodies politic established by law partly as agencies of the State to assist in the civil governance of the country. Their chief purpose has been to regulate and administer the local and internal affairs of the cities, municipalities or districts. They are legal institutions formed by charters from the sovereign power, whereby the populations within communities living within prescribed areas have formed themselves into bodies politic and corporate, and assumed their corporate names with the right of continuous succession and for the purposes and with the authority of subordinate self-government and improvement and the local administration of the affairs of the State.” (Mandanas v. Ochoa, Jr., G.R. No. 208488, July 3, 2018)
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