Alvarez vs Guingona G.R. No. 118303 (Case Digest)

 

Alvarez vs Guingona

G.R. No. 118303

Facts:

            Petitioners assail the validity of RA. 7720, entitled, "An Act Converting the Municipality of Santiago, Isabela into an Independent Component City to be known as the City of Santiago," because the Municipality of Santiago has not met the minimum average annual income required under Section 450 of the Local Government Code of 1991 in order to be converted into a component city.

                By dividing the total income of Santiago for calendar years 1991 and 1992, after deducting the IRAs, the average annual income arrived at would only be P13,109,560.47 based on the 1991 constant prices. Thus, petitioners claim that Santiago's income is far below the aforesaid Twenty Million Pesos average annual income requirement.

                The certification issued by the Bureau of Local Government Finance of the Department of Finance, which indicates Santiago's average annual income to be P20,974,581.97, is allegedly not accurate as the Internal Revenue Allotments were not excluded from the computation. Petitioners asseverate that the IRAs are not actually income but transfers and/or budgetary aid from the national government and that they fluctuate, increase or decrease, depending on factors like population, land and equal sharing.

 

Issue:

            Whether Municipality of Santiago has not met the minimum average annual income required under Section 450 of LGC.

 

Held:

            NO. A Local Government Unit is a political subdivision of the State which is constituted by law and possessed of substantial control over its own affairs. Remaining to be an intra sovereign subdivision of one sovereign nation, but not intended, however, to be an imperium in imperio, the local government unit is autonomous in the sense that it is given more powers, authority, responsibilities and resources. Power which used to be highly centralized in Manila, is thereby deconcentrated, enabling especially the peripheral local government units to develop not only at their own pace and discretion but also with their own resources and assets.

                The IRAs are items of income because they form part of the gross accretion of the funds of the local government unit. The IRAs regularly and automatically accrue to the local treasury without need of any further action on the part of the local government unit. They thus constitute income which the local government can invariably rely upon as the source of much needed funds.