DOJ Opinion No. 055, s. 1983

DOJ OPINION NO. 055 , s. 1983 6th Indorsement March 29, 1983 Respectfully returned to the Chairman, Commission on Audit, Quezon City, his within request for an advisory opinion on the "legality/propriety of the proposed investment by the . . . [provincial government] of Negros Oriental of it funds in the capital stock of the Negros Oriental Development and Management Corporation, a private corporation". We gather from the attached paper that the Sangguniang Panlalawigan of Negros Oriental has passed Resolution No. 263 dated August 27, 1982 appropriating the amount of P700,000,000, which amount will represent the "provincial counterpart fund in the formation of a corporation to be known as the Negros Oriental Development and Management Company, a joint venture of the province and private sector". The disbursement voucher drawn by the office of the Provincial Governor covering the aforementioned amount was submitted to the Provincial Auditor for pre-audit, and was referred to the Regional Director, Regional Office No. VII, Cebu City; and, finally to the Chairman, Commission on Audit. prcd The enclosed drafts or articles of incorporation of the proposed Negros Oriental Development and Management Corporation disclose its purposes, to wit: "PRIMARY PURPOSE" "To promote, engage in and carry on the business of developing the resources of the Province, and managing and marketing the products of any and all kinds of agro-industrial, agri-business, cottage industries and other related products and by-products of establishments operating in the Province of Negros Oriental: "SECONDARY PURPOSE "a. To engage in the general business of buy and sell, import and export and distribution of merchandise and any other commercial products; "b. To act as consultants, brokers, agents and prepare project studies for agro-industrial and agri-business projects particularly those that are similar to the corporation in their primary purposes; "c. To go into joint ventures with other corporations and enterprises particularly those in the same business; "d. To accept donations, any form of assistance; to acquire and dispose property for the benefit of the said corporation; "e. To provide training and labor placement services;" We are unable to find statutory authority expressly enabling the provincial government to invest its funds by subscribing to the capital of a private business corporation. However, our attention has been invited to the provisions of the Local Government Code (B.P. Blg. 337), Sec. 208 of which empowers the Sangguniang Panlalawigan: "(f) Upon recommendation of the provincial governor, to appropriate money for purposes not specified by law which will promote general welfare of the province and its inhabitants." Relevant to this provision are the rules of interpretation prescribed in the Code, to wit: "SEC. 4. Rules of Interpretation . (1) Any power of a barangay, municipality, city or province shall be liberally construed in its favor. Any fair and reasonable doubt as to the existence of the power shall be interpreted in favor of the local government unit concerned. (2) The general welfare provision in this Code shall be liberally interpreted so as to give more power to local governments in promoting the economic uplift, social welfare and material progress of the people in the community." In view of the far-reaching nature of the problem raised herein that may require a policy determination for the guidance of all local government units, and considering that the proposal for the undertaking to put up a corporate arm of the province to handle the KKK Projects herein, and to borrow from the Development Bank of the Philippines (DBP) was submitted to the President and upon his specific instructions, is under study by the DBP, it is believed that this matter should be resolved in the first instanced by the Ministry of Local Government, which is the agency through which the President exercises supervision over all local government units. prcd Please be guided accordingly. Very truly yours, (SGD.) RICARDO C. PUNO Minister of Justice