The Supreme Court has declared unconstitutional a provision in Presidential Decree No. 198 that allowed the provincial governor to appoint members of the Metro Cebu Water District (MCWD) board if no city or municipality within the district accounted for at least 75% of its water service connections. This decision affirms the local autonomy of highly urbanized cities like Cebu City, ensuring that the city’s mayor retains the authority to appoint the water district’s board members. It underscores the principle that local governments are best positioned to address the needs of their constituents, particularly in providing essential services like water supply.

Water Rights and City Lights: Can the Governor Decide Cebu’s Water Board?

This case revolves around a dispute over who has the power to appoint the Board of Directors of the Metropolitan Cebu Water District (MCWD). MCWD was formed under Presidential Decree (P.D.) No. 198, also known as the Provincial Water Utilities Act of 1973. MCWD provides water services to several cities and municipalities geographically located within the Province of Cebu. Section 3(b) of P.D. No. 198 dictates who gets to appoint the board members. If a city or municipality has more than 75% of the water service connections, its mayor gets to appoint. Otherwise, the provincial governor gets the nod.

The root of the controversy began when the Governor of Cebu asserted the authority to appoint members to the MCWD board, arguing that Cebu City’s water service connections had fallen below the 75% threshold specified in P.D. No. 198. This assertion was challenged by the Mayor of Cebu City, who maintained that the power to appoint should remain with the city, given its historical role in establishing the waterworks system and the concentration of water service connections within its boundaries. The legal battle eventually reached the Supreme Court, prompting a thorough examination of the balance between local autonomy and centralized control.

The Supreme Court held that Section 3(b) of P.D. No. 198 is partially unconstitutional. The Court emphasized that the 1987 Constitution guarantees and promotes the administrative and fiscal autonomy of Local Government Units (LGUs). To support this, the Court cited Article X of the 1987 Constitution, which underscores the importance of local autonomy. This includes the power of each LGU to manage its own affairs without undue interference from the national government or other LGUs. This right is further reinforced by the 1991 Local Government Code (LGC), which aims to strengthen the autonomy of LGUs.

The Court acknowledged that P.D. No. 198 was enacted before the 1987 Constitution and the LGC. At that time, Cebu City was a component city of Cebu Province. The enactment of B.P. Blg. 51 and the subsequent reclassification of Cebu City as a Highly Urbanized City (HUC) significantly altered its relationship with the province. As an HUC, Cebu City became independent of the province, with its residents no longer eligible to vote for provincial officials.

The Court explained that to conform with the guarantees of the Constitution in favor of the autonomy of the LGUs, it had the duty to declare and pronounce Section 3(b) of P.D. No. 198 as already partially unconstitutional. This decision aligns with the stance of the National Government, as demonstrated in the comment of the Solicitor General, reinforcing the commitment to local autonomy.

The Court also addressed the argument that Section 3(b) violates the due process and equal protection clauses. While recognizing that the provision initially served a valid purpose, the Court noted that the intervening reclassification of Cebu City into an HUC, along with the enactment of the 1991 Local Government Code, rendered its continued application unreasonable and unfair.

The decision stresses that water and its efficient supply are primary concerns for every LGU. Any issues that diminish the authority of local boards to manage water districts are imbued with public interest. Since MCWD was established from the former Osmeña Waterworks Systems (OWS) without any investment or contribution from the Province of Cebu, and the City Mayor of Cebu had always appointed the members of the MCWD Board of Directors, the pronouncement rests on firm ground.

The Supreme Court explained that substantive due process requires that the law itself is fair, reasonable, and just, while the equal protection clause mandates that all persons are treated equally under the law. The Court concluded that while Section 3(b) may have had a valid basis when enacted, the changes in Cebu City’s status and the enactment of the LGC rendered its continued enforcement a violation of these constitutional guarantees.

The Court clarified that this decision underscores the importance of aligning legal provisions with the evolving needs and circumstances of local communities, particularly concerning essential services like water supply. In sum, the RTC gravely abused its discretion in upholding Section 3(b) of P.D. No. 198. It disregarded the clear policies favoring local autonomy enshrined in the 1987 Constitution and effected by the 1991 Local Government Code and subsequent statutory enactments and violated the Due Process and Equal Protection Clauses of the 1987 Constitution.

FAQs

What was the key issue in this case?	The central issue was determining the proper appointing authority for the members of the Metro Cebu Water District (MCWD) Board of Directors, specifically whether it should be the Mayor of Cebu City or the Governor of Cebu Province.
What is Presidential Decree No. 198?	Presidential Decree No. 198, also known as the Provincial Water Utilities Act of 1973, is a law that governs the formation and administration of local water districts in the Philippines. It includes provisions on the appointment of board members.
What did the Supreme Court decide?	The Supreme Court declared Section 3(b) of Presidential Decree No. 198 partially unconstitutional, specifically the provision that allows the provincial governor to appoint MCWD board members if no city or municipality meets a 75% water service connection threshold.
Why did the Supreme Court declare it unconstitutional?	The Court found that the provision violated the local autonomy of highly urbanized cities like Cebu City, as guaranteed by the 1987 Constitution and the Local Government Code.
What is local autonomy?	Local autonomy is the degree of self-governance granted to local government units, allowing them to manage their own affairs and resources with minimal interference from the national government. It is enshrined in the 1987 Constitution.
What is a Highly Urbanized City (HUC)?	A Highly Urbanized City (HUC) is a city with a large population and high income, making it independent from the province in which it is geographically located.
Who now has the power to appoint the MCWD board members?	The Mayor of Cebu City is now recognized as the appointing authority for the members of the Board of Directors of the Metro Cebu Water District.
Does this decision affect other water districts in the Philippines?	The decision primarily affects water districts with similar circumstances to MCWD, particularly those serving highly urbanized cities that were previously subject to provincial appointment powers based on similar percentage thresholds.

This Supreme Court decision reinforces the principle of local autonomy, ensuring that highly urbanized cities like Cebu City have the power to manage their own affairs, especially regarding essential services like water supply. By declaring Section 3(b) of Presidential Decree No. 198 partially unconstitutional, the Court has clarified the balance between centralized control and local self-governance, empowering local governments to better serve their constituents.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: HON. MICHAEL L. RAMA, VS. HON. GILBERT P. MOISES, G.R. No. 197146, December 06, 2016