CAGAYAN DE ORO CITY — The dismissal of 1,832 workers in Misamis Oriental was not an accident of bureaucracy. It was a precision strike made possible by a legal loophole that turns the provincial budget into a political kill switch.

While the public focus has been on the P1.1-billion slash in the executive budget, the real mechanism of the purge lies in the obscure mechanics of a “Re-enacted Budget” — a fiscal safety net that has been weaponized to specifically target the most vulnerable sector of the government workforce: the Job Orders (JOs).

This investigation reveals how a deadlock in the Sangguniang Panlalawigan (Provincial Board) triggered a specific provision of the Local Government Code, effectively erasing the legal existence of nearly 2,000 workers while keeping the rest of the Capitol running.

The weapon: Section 323

At the heart of the crisis is Section 323 of Republic Act 7160, the Local Government Code of 1991.

Designed as a fail-safe, the law states that if a local legislature fails to pass a budget by the start of the fiscal year, the previous year’s budget is deemed “re-enacted.” This allows the local government to continue operating despite political gridlock.

However, there is a catch.

According to DILG Legal Opinion No. 13 (s. 2012) and affirmed by Supreme Court rulings, a re-enacted budget has strict limitations. It authorizes spending only for:

  • Salaries and wages of existing positions.
  • Statutory and contractual obligations entered into in the previous year.
  • Essential operating expenses.

This provision creates a lethal distinction between “Regular” employees and “Job Orders.”

Regular employees occupy “existing positions” (plantilla) that carry over from year to year. Their salaries are automatically covered. Job Orders, however, are legally defined as “intermittent” or “project-based” contracts that expire on December 31.

Because their contracts expired at the end of 2025, they are not considered “existing positions” or “continuing obligations” when the clock strikes January 1, 2026. Without a new appropriation ordinance to fund them, they legally cease to exist.

The trap: ‘Technical malversation’

Celso Abucejo, Special Assistant to Governor Juliette Uy, cited “technical malversation” as the reason the province cannot pay the workers. This is not an excuse; it is a legal reality.

Under the re-enacted budget rules, using funds allocated for “essential operating expenses” to pay for new (renewed) Job Order contracts would constitute the diversion of public funds — a criminal offense punishable by imprisonment.

“Pwede sila mag delete og item pero dili sila pwede modugang (They can delete an item, but they cannot add),” Abucejo said, referring to the Board’s power.

By slashing the 2026 budget proposal from P4.4 billion to P3.3 billion and delaying its passage, the Provincial Board did not just cut funding; they triggered the Section 323 trap. 

The stalemate forced the automatic re-enactment of the 2025 budget, which, by its nature, cannot fund the renewal of the 1,832 JO contracts.

The numbers game: Realistic or political?

The justification for the budget cut relies on a single metric: “Collection Efficiency.”

Appropriations Chair Rommel Maslog argued that the Governor’s P4.4 billion proposal was “unrealistic” because the province historically collects only about 50% of its projected local revenue.

“It’s like counting money you haven’t collected yet,” Maslog said.

However, an analysis of the province’s fiscal history suggests this metric may be selectively applied.

2025 (Previous Year): The same Provincial Board approved a P5.8 billion budget. At that time, the National Tax Allotment (NTA) — the guaranteed cash from the national government — was only P2.6 billion (45% of the total). The Board was willing to bet on high local collection.

2026 (Current Year): The NTA has risen to P3 billion. Yet, the Board capped the budget at P3.3 billion. This means the NTA now covers 91% of the total budget.

The Board effectively removed the “bet” on local revenue entirely, slashing the budget to the bare minimum of guaranteed national funds. By doing so, they eliminated the fiscal space usually reserved for discretionary hiring — the Job Orders.

The human cost of legal warfare

The result is a Capitol divided by class. Regular employees continue to receive salaries, protected by the Civil Service laws that Section 323 respects. The 1,832 JOs and casuals — janitors, clerks, hospital aides, and drivers — are left in a “no work, no pay” limbo.

Currently, 500 of these workers have volunteered to continue working without pay, hoping that a political compromise will lead to retroactive salaries. But legal experts warn this is a gamble.

Since no contract exists for 2026, there is no legal basis to pay them for work done in January or February, even if a budget is eventually passed. Unless the new appropriation ordinance includes a specific “back pay” provision — which is legally contentious — these volunteer hours may end up being a donation to the province.

No tenure

The “Job Order” system was designed for emergency work. In Misamis Oriental, it has become the standard employment model for nearly 2,000 people. By keeping these workers on short-term contracts for years, the provincial government created a workforce with no tenure.

And by weaponizing the budget process, the Provincial Board has demonstrated how easy it is to pull the plug.