Authority of DOF Secretary to Revise Income Benchmarks under EO No. 249 (1987) Relative to Income Classification of LGUs

DOJ OPINION NO. 020, s. 2015 March 25, 2015 Hon. Yolanda M. Pineda Municipal Mayor Office of the Municipal Mayor Municipal Government of Santa Rita Province of Pampanga Dear Mayor Pineda : This refers to your request for clarificatory opinion of Department of Justice Opinion No. 68, series of 2012, dated 21 September 2012, relating to the authority of the Secretary of Finance not only to reclassify all provinces, cities (except Manila and Quezon City) and municipalities once every four years but also to readjust/revise the income ranges benchmarks stated under Executive Order (EO) No. 249, series of 1987, 1 which provided for a new income classification of provinces, cities and municipalities. Your query, it appears, was precipitated by your request before the Bureau of Local Government Finance (BLGF), Department of Finance (DOF), with regard to the income re-classification of your Municipality, Municipality of Santa Rita, Pampanga (MSRP). You state that based on Department Order No. 23-08 dated 29 July 2008, issued by DOF, MSRP is entitled to be re-classified to fourth (4th) class municipality from its current status, a second (2nd) class municipality, as substantiated by Audited Financial Statements from calendar year 2008 to 2011, reflecting an average annual income of more than Fifty Three Million Pesos (Php53,000,000.00). You also say that you were informed by BLGF that as per Department of Justice's legal opinion, a congressional amendment of EO No. 249 is needed in order for the income benchmarks in the said executive order be adjusted; and that the concerned Local Government Units (LGUs) through BLGF were advised to continue the usage of the general income re-classification in 2008 until new general re-classification is used by Congress. Moreover, it is your position that congressional amendment of EO No. 249 is not necessary for the appropriate adjustment of income benchmarks; that adjustments for re-classification of concerned LGUs were duly delegated to the Secretary of Finance; that waiting for congressional amendment of income benchmarks for every period of general classifications of LGUs will defeat the very purpose of the law in providing a more realistic classification scheme that will effectively serve the aims and purposes of establishing income categories for the concerned LGUs; and that the complexities brought by congressional amendment will gravely delay in providing the immediate funding requirements of developmental projects and other priority needs of the concerned LGUs. At the outset, it is noted that the issues raised herein are, for all intent and purposes, the same as those raised in the Opinion sought to be clarified which had already been duly considered and commented on by this Department. At this point, may we reiterate that, as discussed in the subject Opinion No. 68, the Secretary of Finance has the authority to reclassify , every four years, all provinces, cities (except Manila and Quezon City) and municipalities based on the schedule of their annual income during the last four consecutive calendar years but his authority with respect to revising or modifying such schedule of income or "income ranges" only extends to recommending such appropriate changes or revisions to the proper authority . Sections 3 and 9 of EO No. 249, states: "Sec. 3. Periods of General Reclassification of Provinces, Cities and Municipalities . Upon the effectivity of this Executive Order and for each period of four consecutive calendar years thereafter, the Secretary of Finance shall reclassify all provinces, cities, except Manila and Quezon City which shall remain as Special class cities, and municipalities, on the basis of the foregoing schedules of the average annual income of each province, city or municipality derived during the last four consecutive calendar years immediately preceding such reclassification according to the provisions hereof; . . . . xxx xxx xxx Sec. 9. Administrative Authority of the Secretary of Finance . The Secretary of Finance shall have the authority to review the income ranges herein provided at least once every four years after the implementation of this Executive Order and recommend such appropriate changes or revisions to the proper authority in order that the income classification of local government units may continue to conform with prevailing economic conditions and the overall financial status of the local governments." (Emphasis supplied) It is a fundamental rule in statutory construction that when the law speaks in clear and categorical language, there is no room for interpretation, vacillation or equivocation there is only room for application. 2 That the "proper authority" to modify, revise or amend the applicable provisions of law is the Philippine legislature, namely, the two houses of Congress, since the above-mentioned EO was issued by then President Corazon Aquino in the exercise of her legislative powers. Further, under Section 6, Article XVIII of the 1987 Constitution, the incumbent President shall continue to exercise legislative power until the first Congress is convened. The legislative power of the President under this provision ended on 27 July 1987 when the First Congress convened. Acts of the President under this provision may be amended or repealed only by statute, in the same way that Presidential Decrees of President Marcos can be amended or repealed by legislative act. 3 Clearly, from the above-quoted Executive Orders, while there is an express authority for the Secretary of Finance to reclassify all provinces, cities (except Manila and Quezon City) and municipalities into the different classes (from first class to sixth class), such authority does not carry with it the concomitant power to actually revise or adjust the specific income ranges of each class to be used in the reclassification; and that, the law only allows the Secretary to review and thereafter recommend the necessary changes or revision in the income ranges. Please be guided accordingly. Very truly yours, (SGD.) LEILA M. DE LIMA Secretary Footnotes 1. Providing for a New Income Classification of Provinces, Cities and Municipalities, and for Other Purposes. 2. Director of Lands vs. CA , G.R. No. 102858, July 28, 1997. 3. Bernas, The 1987 Philippine Constitution: A Comprehensive Reviewer , 2006 ed.