Nature and Functions | Municipal Corporations | Classifications | Public Corporations | LAW ON LOCAL GOVERNMENTS

Political Law and Public International Law: Municipal Corporations (Nature and Functions)

Overview

Municipal corporations are a specific type of public corporation in the Philippines, created to perform public or governmental functions within a defined local area. They are essential units of local government, vested with legal personality and the authority to manage their own affairs within the framework set by law.

The relevant provisions regarding the nature, functions, and powers of municipal corporations can be found in the 1987 Philippine Constitution, particularly in Article X (Local Government), and the Local Government Code of 1991 (Republic Act No. 7160), which provides the legal framework for the organization, powers, and functions of local government units (LGUs).

Nature of Municipal Corporations

Municipal corporations are public entities established for local self-government. They are created by law and endowed with powers necessary to carry out public and governmental functions in a particular locality. Their existence and powers derive from both constitutional provisions and statutory enactments, particularly the Local Government Code of 1991.

The nature of municipal corporations can be classified as follows:

1. Political and Corporate Nature: Municipal corporations are recognized as both political and corporate entities. This means that they function not only as agents of the national government for administrative purposes but also as corporate bodies with legal personality capable of contracting, suing, and being sued.

   • As political entities: They perform governmental functions, such as implementing national laws and regulations within their territorial jurisdiction, maintaining peace and order, and providing basic services to their constituents.
   • As corporate entities: They are empowered to enter into contracts, acquire and hold properties, and manage their own local affairs independently within the bounds of law.

2. Creature of the State: A municipal corporation is created by the legislature, and as such, its powers are derived directly from the sovereignty of the State. Their powers are not inherent but are delegated to them by law, primarily through the Local Government Code. Thus, the principle of local autonomy underpins the operation of these corporations, granting them powers to govern local matters without undue interference from the national government.

3. Legal Personality: Municipal corporations possess a distinct legal personality, separate from the individuals who compose them. This grants them the ability to:

   • Sue and be sued;
   • Own and manage property;
   • Contract obligations;
   • Enter into agreements with private entities or other local governments;
   • Exercise powers vested upon them by the Constitution and law.

4. Inviolability of Municipal Charters: The charter of a municipal corporation, once granted by the legislature, cannot be altered or revoked arbitrarily. However, it remains subject to legislative control, and any changes to the powers or organization of the corporation must be done in accordance with the law.

Functions of Municipal Corporations

Municipal corporations, as local government units, are empowered to carry out a variety of governmental and corporate functions to serve the public welfare. The distinction between these two types of functions is crucial:

1. Governmental Functions: These are functions performed by municipal corporations as agents of the state, for the general welfare of the public. They are primarily regulatory and administrative in nature and include:

   • Law enforcement: Ensuring peace and order within their jurisdictions by enforcing national laws and local ordinances.
   • Public safety: Providing basic public safety services, such as fire protection, disaster response, and emergency services.
   • Health services: Administering health services, including managing hospitals, clinics, and other healthcare facilities within their jurisdiction.
   • Public infrastructure and utilities: Managing and maintaining public infrastructure such as roads, bridges, water supply, and drainage systems.
   • Taxation and revenue generation: Imposing and collecting local taxes, fees, and charges, subject to the limits prescribed by law.

   Key Principle: Municipal corporations do not have inherent power to tax. Their power to levy taxes must be expressly granted by law, and they must follow strict statutory guidelines in doing so.

2. Corporate (Proprietary) Functions: Municipal corporations also engage in corporate or proprietary functions, which are activities that are not inherently governmental but are undertaken to benefit the community and raise local revenues. These include:

   • Public markets and slaughterhouses: Operating and maintaining public markets, slaughterhouses, and similar enterprises.
   • Public utilities: Managing local utilities like water and electricity services, as well as public transportation systems.
   • Commercial ventures: Engaging in activities or ventures that may generate income, such as leasing public property or running enterprises for local benefit.

   Key Principle: When performing proprietary functions, municipal corporations act more like private entities, and they can be held liable in civil cases involving contracts, torts, or property disputes in the same way that private corporations can.

Powers of Municipal Corporations

The powers of municipal corporations can be divided into three general categories:

1. Express Powers: These are powers explicitly granted to municipal corporations by law, especially under the Local Government Code. Examples include the power to legislate local ordinances, impose taxes, and regulate land use.

2. Implied Powers: These are powers not explicitly stated but are considered necessary for the municipal corporation to effectively exercise its express powers. For instance, if a municipal corporation is given the power to maintain public roads, it is implied that it has the power to hire personnel to carry out road maintenance.

3. Inherent Powers: These are powers that are naturally vested in municipal corporations by virtue of their existence. One key inherent power is the police power, which allows the municipality to enact ordinances and regulations for the protection of public health, safety, and welfare.

   Under the Local Government Code, specific powers include:

   • Police Power: Municipalities can enact ordinances to regulate behavior and ensure the general welfare of their residents. This power is broad but must meet three tests: (1) the ordinance must not violate the Constitution, (2) it must be reasonable, and (3) it must serve the public welfare.
   • Power of Eminent Domain: Municipalities can exercise the power of eminent domain, or the right to expropriate private property for public use, subject to the payment of just compensation.
   • Power of Taxation: Municipalities have the authority to levy taxes, fees, and charges on businesses, properties, and services within their jurisdiction, as provided by the Local Government Code.

Supervision and Control

Although municipal corporations are granted a degree of autonomy, they remain subject to the general supervision of the national government, specifically the Department of the Interior and Local Government (DILG). The national government does not exercise control, which means it cannot substitute its judgment for that of the local government unit; instead, it ensures that local laws and policies conform to national laws.

The principle of local autonomy, enshrined in the 1987 Constitution, grants local government units the right to govern their local affairs, but this is subject to limitations set by law, especially when matters of national interest are involved.

Conclusion

Municipal corporations in the Philippines play a critical role in local governance. Their nature as both political and corporate entities allows them to balance governmental and proprietary functions for the welfare of their constituents. Although they enjoy local autonomy, their powers remain delegated by the national government, and they must operate within the bounds of the Constitution and statutory laws. Understanding the nature, functions, and limitations of municipal corporations is essential to ensuring they serve their purpose effectively within the Philippine legal framework.