As early as 1963, three years after the SAMICO road was completed and the company was in full-blast operation, the population of Bayog already warranted the creation of a new municipality. Thus, on November 14, 1964, Bayog started to function as a corporate municipality separate and distinct from the Municipality of Buug by virtue of Executive Order No. 112 issued by the then President Diosdado Macapagal. However, on February 15, 1966, the infant municipality was dissolved and reverted into its former status as one of the barangays of the Municipality of Buug by virtue of a Supreme Court decision in the case of Pelaez vs. Auditor General. The then Senator Pealez contented that the creation of a new municipality through an executive Order was against the law as the same was a prerogative of Congress.