Can LGUs Donate Government Property to Churches?

COA & Procurement Rules in the Philippine Context

Short answer: As a rule, no—local government units (LGUs) may not donate public money or property to churches or religious organizations. The Constitution’s appropriations clause and non-establishment principle prohibit using public resources for the use, benefit, or support of a church or religion. There are narrow, carefully structured exceptions grounded in a secular purpose (e.g., cultural-heritage conservation, chaplaincy under the constitutional carve-out, or neutral social-service partnerships that pass strict COA controls). Below is the full landscape.

1) The Constitutional Baseline

Non-establishment & neutrality.
- Art. II, Sec. 6: separation of Church and State.
- Art. III, Sec. 5 (Free Exercise) protects religious liberty but does not authorize public funding for religion.
- Art. VI, Sec. 29(2) (Appropriations Clause): “No public money or property shall be appropriated, applied, paid, or employed, directly or indirectly, for the use, benefit, or support of any sect, church, denomination, sectarian institution, or system of religion…” with a limited exception for chaplains in the armed forces, penal institutions, orphanages, and similar settings.
Key judicial themes.
- Courts recognize “benevolent neutrality” toward religion (respect and accommodation), not financial support that advances religion.
- Government actions that incidentally involve religion may pass muster when they (i) have a genuine secular purpose, (ii) do not principally advance or favor a religion, and (iii) avoid excessive entanglement.

Implication for LGUs: A straight donation of government property or funds to a church (e.g., transferring a lot, building a chapel, buying pews, paying for a retreat house) ordinarily violates Art. VI, Sec. 29(2), even if the aim is community goodwill.

2) COA’s Lens: Disallowances & Personal Liability

The Commission on Audit (COA) consistently disallows public spending that uses, benefits, or supports religious institutions or activities. Expect disallowances, refund directives, and possible liability (including return of amounts) for approving officers when:

The end-recipient is a religious entity and the object is religious (construction/repair of churches, liturgical items, fiestas, religious celebrations, clergy allowances, etc.).
The LGU transfers assets (real or movable) to a church without a defensible secular public purpose that is primary, clearly documented, and ring-fenced against religious use.
The LGU bypasses required documentation (Sanggunian authority, MOA with safeguards, inventory and valuation, due diligence) or misapplies disposal rules.

Takeaway: Even well-intentioned acts (e.g., donating a surplus vehicle “for parish outreach”) are high-risk. COA will ask: Who is benefited? What is the purpose? Where is the legal basis? How is secular use guaranteed and verified?

3) Procurement & Disposal: How the Rules Interlock

A) When “giving” property, you’re not procuring—you’re disposing an LGU asset

Government asset disposal is governed by COA and property-management rules (and, by policy cross-references, RA 9184’s implementing guidelines for disposal).
Default modes: public auction or transfer to another government entity. Donation, if allowed at all, is typically limited to other government bodies or specific public-interest channels—and must be justified, valued, and recorded.
Donating to a private religious entity generally falls outside allowable modes and runs straight into the Constitutional bar above.

B) If the LGU instead wants to spend on something located in church premises

That is procurement (goods, infrastructure, consulting) under RA 9184. It still cannot be for a religious purpose.
If the project is on private (church) land, the LGU must first secure an adequate real right (e.g., usufruct or long-term lease) in favor of the LGU/public, recorded and enforceable, to avoid findings of undue benefit to a private party.
Bidding, eligibility, and contract management rules apply; end-use must be secular and public (e.g., a multi-purpose evacuation center on land given under 25-year unrestricted usufruct to the LGU, with clear control by the LGU and open access to all residents).

4) The Narrow Paths That Can Be Lawful (If Done Right)

Golden rule: The primary purpose must be secular and public, not religious; public control and benefit must be real, documented, and verifiable.

Cultural-Heritage Conservation (Secular Purpose).
- Many churches are declared cultural properties. Funding for heritage conservation (e.g., structural stabilization, post-earthquake restoration) may be lawful if:
  - The objective is preservation of national patrimony, not religious worship.
  - The LGU contracts the works (RA 9184) with NHCP/NCCA technical standards, and funds are not used for liturgical features.
  - There is a MOA with the owner that:
    - Identifies the cultural-property status and scope limited to heritage works;
    - Grants the LGU/State oversight and access for inspection;
    - Bars use of the funds for religious activities; and
    - Requires audit-ready documentation (plans, progress reports, certifications).
Neutral Social-Service Partnerships with Religious NGOs.
- LGUs may partner with NGOs/POs for secular social services (feeding, shelters, disaster relief) provided strict COA rules are met: eligibility screening, public call for partners where required, MOA with deliverables, liquidation, and prohibition on sectarian activities funded by the grant.
- Funds must serve the general public, with no proselytizing conditions, and output-based reporting.
- Do not label the transfer a “donation”; treat it as a project grant/partnership with controls.
Use-Rights Instead of Donations (No Transfer of Ownership).
- If the (secular) public interest is best served on church-owned land (say, a barangay health station), use a usufruct or long-term lease to the LGU for nominal rent with public control clauses.
- The LGU then procures and owns the building/equipment serving all residents—not the church.
Incidental, Even-Handed Access Policies.
- Neutral use of public spaces (plazas, gymnasiums) by any civic group—including religious groups—under a content-neutral, fee-based permit system is permissible.
- This is not a donation; it’s equal access under general rules.
Chaplains Exception (Constitutional Carve-out).
- Funding chaplaincy in specified institutions (e.g., penal, military) is expressly allowed by the Constitution. This is not a general license to fund churches.

5) Red Flags That Typically Lead to COA Disallowance

Direct donation of land, buildings, vehicles, equipment to a church.
Construction/repair of a chapel, rectory, convent, or liturgical items with public funds.
Fiesta sponsorships, honoraria/love offerings for clergy, religious souvenirs.
Naming rights or control that effectively advances a religion.
Projects on church land with no enforceable public right (no usufruct/lease), or facilities later controlled by the church.
Bypassing Sanggunian authority, asset valuation, inventory, or competitive processes.

6) Practical Compliance Map for LGUs

A) If someone proposes a donation to a church:

Stop—flag the constitutional bar.
Offer alternatives (heritage conservation route; secular social-service MOA; usufruct + public facility).
Document the secular public purpose and audit trail.

B) If doing heritage conservation:

Secure proof of cultural-property status; adopt NHCP/NCCA technical scope.
Draft a MOA limiting funds to heritage (no liturgical items), ensure inspection rights and liquidation.
Bid/contract under RA 9184; maintain full as-built and photographic records.

C) If partnering with a faith-affiliated NGO for social services:

Treat as NGO/PO engagement, not a donation: eligibility, public interest test, MOA with outputs/indicators, liquidation within period, and no proselytizing.
Pay on milestones; require beneficiary lists, proof of open, non-sectarian access.

D) If building on church property for public use:

Execute a registered usufruct/long-term lease in favor of the LGU (public access, signage as LGU facility, maintenance obligations, and reversion terms).
Procure works under RA 9184; keep assets on the LGU books.

E) Disposal of LGU property:

Prefer transfer to another government entity or public auction.
Avoid “donation” to private religious entities; it’s both procedurally improper under disposal rules and substantively unconstitutional.

7) Templates & Clauses (grab-and-go)

Secular-Purpose Clause (MOA): “Funds shall be used solely for [heritage conservation/social service] purposes described in Annex __. No portion shall be used for liturgical, devotional, or sectarian activities. The Parties acknowledge Art. VI, Sec. 29(2) of the Constitution and agree to strict neutrality.”

Public-Control Clause (Usufruct): “The Property is granted to the LGU under usufruct for __ years to construct, operate, and maintain a public [facility]. The Facility shall be open to all residents without religious conditions. Title to improvements vests in the LGU; the Usufruct is registrable and binding on successors.”

Audit & Reporting Clause: “The Implementing Partner shall submit liquidation, beneficiary data, progress photos, and independent certifications within __ days of completion, subject to COA post-audit. Non-compliance triggers suspension of further releases and refund.”

8) FAQ

Q: Can we give an old LGU vehicle to the parish for charity drives? A: Not as a donation. If truly for public service, consider loan/use agreements with strict neutrality, or better, transfer to another government entity for the same public purpose.
Q: Can we fund repairs of a centuries-old church after an earthquake? A: Possibly yes, but only under a heritage-conservation program with secular scope, technical oversight, and RA 9184 procurement—not for liturgical restoration.
Q: What about fiesta sponsorships? A: Generally disallowed—they benefit a sectarian activity.
Q: If a church-run foundation runs a soup kitchen open to all, can we help? A: Yes, via a proper NGO partnership (not a donation), with secular outputs, controls, and liquidation.

9) Bottom Line

Direct donations of public property or funds to churches are constitutionally barred and are routinely disallowed by COA.
LGUs with legitimate community aims should re-engineer the approach: heritage conservation, neutral social-service MOAs, or usufruct-backed public facilities, each documented, procured, and audited to keep the primary purpose secular, the public benefit dominant, and COA happy.

This article is for general guidance only and is not a substitute for formal legal advice on specific facts and current circulars or local ordinances.