POLITICAL LAW AND PUBLIC INTERNATIONAL LAW

LAW ON LOCAL GOVERNMENTS

A. Public Corporations

3. Classifications

b. Municipal Corporations

Municipal corporations are essential elements in the structure of local governance, being political subdivisions created by law for the efficient administration of local affairs. Under Philippine law, municipal corporations fall within the broader concept of public corporations, which can either be public corporations for government purposes (like provinces, cities, municipalities, and barangays) or private corporations for proprietary or business purposes. The focus of this discussion is on municipal corporations as public entities.

i. Elements of Municipal Corporations

Municipal corporations possess certain essential elements that define their nature, authority, and functions under Philippine law. These elements are as follows:

1. Creation by Law or Legislative Grant

The first and foremost element of a municipal corporation is that it must be created by law or through legislative action. Municipal corporations do not arise through the voluntary association of individuals, but rather, they are created by the national legislature through a law or statute. In the Philippines, this is usually done through a Republic Act passed by Congress or through ordinances created by the legislative branch.

The Local Government Code of 1991 (Republic Act No. 7160) governs the creation, organization, and functions of local government units (LGUs) in the Philippines, including provinces, cities, municipalities, and barangays. This Code provides the legal basis for the existence and operation of municipal corporations.
Congress has the authority to create, divide, merge, abolish, or substantially alter the boundaries of municipalities and other local government units. However, such legislative action must be subject to the criteria established under the Local Government Code, including factors such as population, income, and land area.

2. Corporate Existence

A municipal corporation possesses dual personalities—it acts as both:

A public or governmental entity, performing political and governmental functions such as enforcing laws, maintaining peace and order, and providing basic services.
A corporate entity, with its own legal personality separate from its constituents, possessing corporate powers to enter into contracts, own property, sue and be sued, and manage its assets and liabilities.

This dual nature is what distinguishes municipal corporations from purely private entities. The powers and functions exercised by the municipal corporation vary according to whether it is acting in a governmental or proprietary capacity.

3. Defined Territory

A municipal corporation must have a definite and identifiable territorial jurisdiction. The boundaries of a municipality or city are defined by law or legislative action and serve as the geographical limits within which the corporation exercises its powers and performs its functions.

The determination of territorial boundaries is critical, as it determines the extent of the municipal corporation’s jurisdiction over its residents and the area where it can collect taxes, enforce regulations, and provide services.
Any alteration to the territorial limits of a municipal corporation must follow the procedures outlined in the Local Government Code, including the holding of a plebiscite among the affected constituents.

4. Population or Community

A municipal corporation is created for the benefit of a community of people residing within a defined territory. The population must meet certain minimum requirements, as stipulated in the Local Government Code. Municipalities and cities must have a minimum number of residents to ensure that they are viable and can sustain their operations, services, and governance responsibilities.

For instance, the Local Government Code sets a minimum population requirement for the creation of municipalities (at least 25,000 inhabitants for municipalities and 150,000 for cities). These population thresholds help ensure that the local government unit can operate effectively and have sufficient resources to provide essential services to its constituents.

5. Corporate Powers

Municipal corporations possess certain corporate powers necessary for them to function effectively. These powers are granted by law and may be classified into express, implied, and inherent powers:

Express powers are those specifically granted by the Constitution, laws, or the charter of the municipal corporation. Examples include the power to levy taxes, create ordinances, enter into contracts, and acquire property.
Implied powers are those that are reasonably necessary to carry out the express powers. For instance, the power to hire personnel is implied from the power to operate offices and provide services.
Inherent powers refer to those powers that are inherent in municipal corporations, such as the power of eminent domain, police power, and the power to tax.

These powers must be exercised within the framework of the Constitution, national laws, and the charter creating the municipal corporation. Municipalities, being creatures of the State, cannot act outside of the powers granted to them by law (the doctrine of ultra vires applies).

6. Governmental and Proprietary Functions

Municipal corporations exercise governmental and proprietary functions:

Governmental functions are those related to the exercise of sovereign power and include functions such as law enforcement, public safety, health services, education, and infrastructure development. These are typically considered public in nature and are not subject to taxation or legal liability in the same way private actions might be.
Proprietary functions refer to activities that the municipal corporation undertakes in a business or commercial capacity, such as operating markets, water supply systems, or transportation services. When engaging in proprietary activities, a municipal corporation acts like a private entity and may be held liable for its commercial dealings.

7. Local Autonomy

Municipal corporations are granted a certain degree of local autonomy under the 1987 Philippine Constitution and the Local Government Code. Local autonomy refers to the ability of LGUs, including municipal corporations, to govern themselves and make decisions concerning their internal affairs without undue interference from the national government.

The principle of decentralization is embodied in the Constitution, which encourages the devolution of powers to LGUs. This allows local governments to address local needs and concerns more effectively by giving them the authority to craft policies, pass ordinances, manage budgets, and deliver basic services such as health, education, and infrastructure.
However, local autonomy is not absolute. Municipal corporations remain subject to the Constitution, national laws, and the supervisory authority of the national government, primarily through the Department of the Interior and Local Government (DILG). The President of the Philippines also exercises general supervision over LGUs to ensure that local officials perform their duties in accordance with the law.

Conclusion

Municipal corporations in the Philippines are public entities created by law with specific governmental and corporate powers. Their essential elements include creation by legislative grant, defined territorial boundaries, a resident population, a corporate personality, the ability to exercise both governmental and proprietary functions, and a certain degree of local autonomy. Their operation and functions are primarily governed by the Local Government Code of 1991, and their powers are subject to the Constitution and national laws. The creation and functioning of municipal corporations are designed to foster local governance and decentralization while ensuring that the State retains oversight and control for matters of national importance.