Political Law and Public International Law: Local Government Law – Quasi-Corporations
I. Introduction to Public Corporations
Public corporations are entities created by law to govern and manage local affairs, vested with corporate powers necessary to carry out their functions. These corporations may exercise powers either through their corporate character (proprietary functions) or by virtue of their governmental character (governmental functions).
Under the law, public corporations are typically divided into two classifications: municipal corporations and quasi-corporations. This outline will focus specifically on quasi-corporations, their characteristics, and their role within the local government framework.
II. Quasi-Corporations: Definition and Legal Basis
Quasi-corporations are legal entities created by statute for a limited and special public purpose. Unlike regular municipal corporations, which have broad powers and duties over a defined territory, quasi-corporations possess more specialized functions and exist primarily to achieve specific governmental objectives.
Quasi-corporations do not enjoy the full corporate personality that municipalities or other local government units (LGUs) possess. They are considered "quasi" because, while they have certain legal powers similar to corporations (such as the ability to sue and be sued), their primary function is governmental, and their powers are limited and specialized.
These entities are created either by special legislative acts or general laws and are typically charged with the administration of special tasks that benefit a larger area or perform functions that would be inefficient for municipalities or provinces to carry out individually.
Examples of Quasi-Corporations in Philippine Law:
- Barangay Waterworks Associations (BWAs) - Created for the administration and maintenance of local water systems in rural areas.
- Special Economic Zones – These may be formed with special powers to promote economic development in specific geographic areas, often involving tax incentives and regulatory autonomy.
- Barangay Councils of Local Government Units – While a barangay is a municipal corporation, certain specific functions (such as water supply or electricity distribution) may be delegated to quasi-corporate entities within barangays.
- School Boards or Special Districts – Sometimes quasi-corporations are tasked with administering local education or health care services, typically in coordination with the national government but with operational independence in certain areas.
Legal Basis in the Philippine Constitution and Laws:
- 1987 Constitution: While the Constitution provides for the creation and governance of local governments (Art. X), quasi-corporations are typically governed by specific statutes or laws that grant them the limited legal capacity to perform specific roles.
- Local Government Code of 1991 (RA 7160): This comprehensive code covers municipal corporations but also contemplates the creation of special purpose entities which can have a quasi-corporate character.
III. Characteristics of Quasi-Corporations
Quasi-corporations in the Philippines are characterized by the following features:
Limited Powers:
- Quasi-corporations are granted limited powers that are strictly defined by their enabling law. These powers generally pertain to a specific function or objective (e.g., managing a water district or a local economic zone).
- Unlike fully-fledged LGUs, they do not have police powers, taxing powers (except when explicitly granted by law), or broad legislative powers.
Special Purpose Entities:
- Their purpose is often tied to providing a specific public service, such as water distribution, health care, education, or regional economic development.
- They are created when it is more efficient to delegate a specific governmental task to a specialized entity rather than a regular LGU.
Public Character:
- While they have some elements of corporate personality, quasi-corporations are fundamentally public entities that serve governmental functions rather than proprietary interests.
- The primary goal of a quasi-corporation is to fulfill a public need, making them governmental rather than purely corporate in character.
Creation by Statute:
- Quasi-corporations are not organic entities but are created by legislative acts or executive orders. They are not created by local initiative but through national-level action that determines their scope and powers.
Limited Jurisdiction:
- These entities often have jurisdiction over a particular area or class of individuals or properties and do not exercise broad territorial jurisdiction like a city or municipality. Their jurisdiction is tied to their specific function.
Funding:
- Funding for quasi-corporations often comes from national government appropriations, grants, or specific fees collected for services rendered. They generally lack independent taxing power unless specifically conferred by law.
Limited Autonomy:
- Quasi-corporations may exercise a degree of operational independence but are often subject to oversight by national government agencies or departments, such as the Department of the Interior and Local Government (DILG) or specialized national agencies related to their specific function (e.g., water districts under the Local Water Utilities Administration).
IV. Differences Between Municipal Corporations and Quasi-Corporations
| Aspect | Municipal Corporations | Quasi-Corporations |
|---|---|---|
| Powers | Broad powers, including police power and taxation | Limited powers, tied to specific statutory objectives |
| Scope | Governs an entire city, municipality, or province | Often limited to a special function or purpose in a specific area |
| Creation | Created by the Local Government Code or special law | Created by specific legislative acts or executive orders |
| Funding | Can generate revenue through taxation and fees | Limited revenue-raising powers; often reliant on government funding |
| Autonomy | High degree of autonomy from the national government | Limited autonomy, often subject to supervision or control by national agencies |
| Primary Purpose | Governing the general welfare of the local constituency | Fulfilling a special or technical governmental function |
V. Functions and Powers of Quasi-Corporations
Quasi-corporations typically carry out specialized governmental functions such as:
Infrastructure Development:
- Some quasi-corporations are tasked with managing and maintaining infrastructure, such as water districts or local electric cooperatives, where direct municipal administration might not be feasible.
Service Provision:
- Entities like barangay water districts or health boards provide essential services to areas where local governments may lack the technical expertise or resources.
Regulation and Administration:
- In cases where specialized regulation or administration is required (e.g., in Special Economic Zones), quasi-corporations are empowered to act with limited authority, sometimes with delegated regulatory powers.
Collaboration with National Agencies:
- Quasi-corporations often collaborate with national agencies to implement specific policies or programs, such as environmental management, public health campaigns, or regional economic development initiatives.
VI. Conclusion
Quasi-corporations play a vital role in the decentralized structure of the Philippines by carrying out specialized functions that complement the broader mandates of local government units. Their creation reflects the need for targeted, efficient governance solutions in areas where full municipal or provincial oversight may be either inefficient or impractical. These entities, while limited in scope and powers, fulfill critical public functions and are essential components of the Philippine local government framework.
Their special-purpose nature distinguishes them from fully-fledged LGUs, highlighting their role in addressing specific public needs through a flexible, albeit controlled, corporate structure.