Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BLL NO. 1314

Introduced by Honorable Florencio C. Garay

EXPLANATORY NOTE

This bill seeks to amend Sections 326 and 327 of Republic Act No. 7160,
otherwise known as the Local Government Code of 1991, by transferring the
power to review of appropriation ordinances of component cities and
municipalities from the Sangguniang Panlalawigan to the Department of Budget
and Management.

Under Section 327 of the Local Government Code, ordinances authorizing
annual or supplemental appropriations of component cities and municipalities
are subject to review by the Sangguniang Panlalawigan. However, it bears
noting that the said provision does not mandate the immediate action of the
Sangguniang Panlalawigan, but gives it a “loose period” of ninety (90) days, and
“if within ninety (90) days from receipt of copies of such ordinance, the
Sangguniang Panlalawigan takes no action thereon, the same shall be deemed to
have been reviewed in accordance with law and shall continue to be in full force
and effect.” This “loose period” inevitably invites partisanship, which may result
to a faster or a delay in the review, depending on the nature of the political
leanings of the examining Sanggunian Panlalawigan official. This is what this
bill seeks to curb, by transferring the review powers of the Sanggunian to the
Department of Budget and Management.

Records of the Department of the Interior and Local Government (DILG)
disclose that there have already been numerous requests for legal opinion and
even appeals made by component cities and municipalities questioning the
actions made on appropriation ordinances by the Sangguniang Panlalawigan. In

one case, the Department even invalidated the Sanggunian's action, holding
that:

“The only ground upon which a provincial board may
declare any municipal resolution, or order invalid is when


such resolution, ordinance or order is beyond the powers
conferred upon the council or president making the same.
Absolutely no other ground is recognized by the law. A
strictly legal question is before the provincial board in its
consideration of a municipal resolution, ordinance or order.
The provincial (board's) disapproval of any resolution,
ordinance or order must be premised specifically upon the
fact that such resolution, ordinance or order is outside the
scope of the power conferred by law. If a provincial board
passes these limits, it usurps the legislative functions of the
municipal council or president. Such has been the
consistent course of executive authority.” (DILG Opinion No.
94, Series of 2003, August 7, 2003)

In another case, the Department ruled that the Sangguniang Panlalwigan
is not vested with authority to look into and decide the question of whether or
not the required number of votes necessary to approve the annual budget of a
city was attained by the Sangguniang Panlungsod considering that Section 324
and 325 of Republic Act 7160 on the scope and limitation of the review power of
the Sangguniang Panlalawigan did not include the same. (DILG Opinion,
November 9, 2004, on the Request of Mayor Carlo V. Gamban of Silay City).

Appropriation ordinances are vital if local government units are to achieve
their planned programs and objectives. These ordinances, being essentially in
the nature of legislative authorization to utilize government funds for public
purposes, should be given priority action without unnecessary delay, otherwise
government projects would be rendered worthless and vital government
functions brought to a halt, to the detriment of our people.

In view of its vital importance, the approval of this bill is earnestly sought.

un

FLORENCIO C. ‘Y


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 1314

Introduced by Honorable Florencio C. Garay

AN ACT
AMENDING SECTIONS 326 AND 327 OF REPUBLIC ACT NO.
7160, OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE
OF 1991

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Section 326 of Republic Act No. 7160, otherwise known as
the Local Government Code, is hereby amended to read as follows:

“SEC. 326. Review of Appropriation Ordinances of
Provinces, Highly Urbanized Cities, AND COMPONENT CITIES
AND MUNICIPALITIES. - The Department of Budget and
Management shall review ordinances authorizing the annual or
supplemental appropriations of provinces, highly urbanized cities,
AND OF COMPONENT CITIES AND MUNICIPALITIES, in
accordance with the immediately succeeding Section.”

SECTION 2.. Section 327 of Republic Act No. 7160 is likewise amended to
read as follows:

“SEC. 327. If within ninety (90) days from receipt of copies
of such ordinance, the DEPARTMENT OF BUDGET AND
MANAGEMENT takes no action thereon, the same shall be deemed
to have been reviewed in accordance with law and shall continue to
be in full force and effect. If within the same period, the
DEPARTMENT OF BUDGET AND MANAGEMENT shall have
ascertained that the ordinance authorizing annual or supplemental
appropriations had not complied with the requirements set forth in


this Title, the DEPARTMENT shall, within the ninety-day period
hereinabove prescribed, declare such ordinance inoperative in its
entirety or in part. Items of appropriation contrary to limitations
prescribed in this title or in excess of the amounts prescribed
therein shall be disallowed or reduced accordingly.

The DEPARTMENT OF BUDGET AND MANAGEMENT shall,
within the same period, advise the Sangguniang Panlungsod or
Sangguniang Bayan concerned, through the local chief executive,
of any action on the ordinance under review. Upon receipt of such
advice, the city or municipal treasurer concerned shall not make
further disbursements of funds from any of the items of
appropriation declared inoperative, disallowed or reduced.”

SEC. 3. The provisions of existing laws, decrees, issuances, rules and
regulations, or portions thereof, which are inconsistent herewith are hereby
repealed, modified or amended accordingly.

SEC. 4. This Act shall take effect fifteen (15) days after its publication
in at least two (2) newspapers of general circulation.

Approved,