Powers of Local Government Units (LGUs)

Local Government Units (LGUs) in the Philippines derive their powers from Republic Act No. 7160, also known as the Local Government Code of 1991 (LGC), as well as from other special laws and the Constitution. The grant of powers to LGUs is grounded in the principle of decentralization, which aims to allow them to exercise greater autonomy and to foster development through local governance. Below is a comprehensive discussion of the various powers of LGUs under Philippine law.

I. General Powers of Local Government Units

Corporate Powers
LGUs, as corporations, are given certain corporate powers that allow them to operate as quasi-private entities in some respects. These powers include the following:

a. To Have Continuous Succession
LGUs have continuous succession in their corporate name. They can sue and be sued, enter into contracts, and own and manage properties.

b. To Enter into Contracts
LGUs may enter into various contracts necessary for their operations, including public-private partnerships, joint ventures, and other arrangements with private entities, provided these contracts are authorized by their respective legislative bodies (Sanggunians).

c. To Acquire and Hold Property
LGUs can acquire and hold real and personal property. They can also dispose of their assets, subject to the rules and limitations provided in the Local Government Code.

II. Express Powers under the Local Government Code

Police Power LGUs possess police power, which allows them to enact ordinances necessary to promote public health, safety, morals, general welfare, and convenience. This includes the regulation of business, maintenance of public order, sanitation, and the abatement of nuisances.

LGUs’ exercise of police power must meet the following criteria:
- It must be within their territorial jurisdiction.
- It should not contravene the Constitution, existing laws, or public policy.
- It must be necessary for the promotion of the general welfare.
Power of Eminent Domain The power of eminent domain, or the right to expropriate private property for public use upon payment of just compensation, is expressly granted to LGUs. However, certain procedural and substantive requirements must be followed, such as:
- The expropriation must be for a public purpose.
- A prior valid ordinance must authorize the expropriation.
- Payment of just compensation to the property owner must be made before taking possession.
LGUs may only exercise eminent domain after the approval of an ordinance and should ensure that the property to be expropriated is within their territorial jurisdiction.
Power to Tax, Levy Fees, and Other Impositions (Taxing Power) LGUs have the authority to impose taxes, fees, and charges. This power is granted under Section 129 of the Local Government Code and allows LGUs to generate their own revenue sources to finance their operations and projects.

LGUs can levy the following:
- Real property taxes
- Business taxes
- Fees for services
- Franchise taxes
- Community taxes
- Other local taxes authorized by the LGC or other laws
However, LGUs must strictly comply with the procedural requirements for the imposition of taxes, including public hearings and the publication of tax ordinances.
Power to Reclassify Lands LGUs have the power to reclassify agricultural lands into residential, commercial, industrial, or other uses in accordance with their development plans and zoning ordinances. This power is crucial in facilitating local development and ensuring that land use is aligned with the needs of the community.

Reclassification is limited by the following:
- The land must not exceed a certain percentage of the total agricultural land of the LGU, as prescribed by the Department of Agrarian Reform.
- The land must not be covered by the Comprehensive Agrarian Reform Program (CARP) unless authorized by law.
Power to Grant Franchises, Licenses, and Permits LGUs may grant franchises, licenses, and permits for the operation of public utilities, businesses, and other activities within their jurisdiction. These powers allow LGUs to regulate economic activities within their territories and ensure public safety and order.

Examples include:
- Granting of franchises for transportation routes within the LGU
- Issuance of business permits and building permits
- Licensing of establishments such as restaurants, bars, and other commercial entities
Power to Create and Dissolve Local Offices LGUs have the authority to create, divide, merge, or abolish offices or departments within their administrative structure, provided such actions comply with the Local Government Code and other pertinent laws. The LGUs’ legislative bodies have the power to create these positions through ordinances, subject to the availability of funds.

III. Implied Powers of LGUs

While most of the powers of LGUs are explicitly granted by law, certain powers are implied as necessary for carrying out their mandated functions. These implied powers include:

Power to Issue Orders and Implement Programs
LGUs have implied authority to issue orders, circulars, and memoranda to implement their programs and projects, provided that these are consistent with national laws.
Power to Protect the Environment
LGUs are tasked with promoting the ecological balance and protecting the environment within their territorial jurisdictions, as part of their mandate to ensure the general welfare. This includes regulating the disposal of waste, the use of natural resources, and the establishment of industries that may harm the environment.

IV. Limitations on the Powers of LGUs

The powers of LGUs are not absolute. They are subject to certain limitations:

Compliance with National Laws and Policies LGUs must exercise their powers in accordance with the Constitution, laws, and national policies. Their ordinances, resolutions, and executive orders must not contravene national statutes or regulations issued by higher authorities.
Territorial Jurisdiction LGUs can only exercise their powers within their respective territorial jurisdictions. Any action taken outside their geographical boundaries is ultra vires, or beyond their authority, unless expressly authorized by law.
Administrative Oversight The President of the Philippines, through the Department of the Interior and Local Government (DILG), exercises general supervision over LGUs to ensure that their actions are within the bounds of law. The President may suspend or remove local officials for abuse of authority, misconduct, or gross negligence in the performance of duty.
Expropriation for Public Use The power of eminent domain is subject to constitutional requirements, such as the taking must be for public use, and just compensation must be provided. Additionally, the courts may review the necessity of expropriation.

V. Delegated Powers

LGUs are also vested with powers delegated to them by national agencies or Congress through special laws. Examples include:

Power to Regulate the Utilization of Natural Resources Special laws, such as the Philippine Mining Act, allow LGUs to exercise regulatory functions over the exploration and development of natural resources within their jurisdiction.
Implementation of National Programs
Certain programs and projects, such as those under the Department of Health (DOH) or the Department of Education (DepEd), are devolved to LGUs, making them responsible for the implementation of these services.

VI. Autonomy and the Doctrine of Local Fiscal Autonomy

One of the fundamental principles behind the decentralization of power is fiscal autonomy, which allows LGUs to generate and manage their own financial resources, giving them the freedom to allocate funds for local projects without excessive dependence on the national government. The fiscal autonomy of LGUs is enhanced by the following:

Internal Revenue Allotment (IRA)
Now known as the National Tax Allotment (NTA) under the Mandanas-Garcia ruling, it ensures a steady flow of financial resources to LGUs.
Own-source Revenues
LGUs are empowered to raise their own funds through local taxes, fees, and other impositions, as mentioned earlier.

Conclusion

The powers of LGUs in the Philippines are broad and multi-faceted, encompassing corporate, police, taxation, eminent domain, and regulatory powers. These powers enable LGUs to effectively govern their jurisdictions, promote local development, and ensure the well-being of their constituents. However, these powers are subject to certain limitations, including compliance with national laws, territorial jurisdiction, and oversight by higher authorities. The overarching goal is to balance local autonomy with the need for national unity and policy coherence.