Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

4109

HOUSE BILL No.

Introduced by HON, JULIETTE T, UY

EXPLANATORY NOTE

It is the declared policy of the State to promote autonomy in local governments, Article I,
Section 25 of the Constitution that provides that “The State shall ensure the autonomy of local
governments.” Article X Section 6 states that “Local government units shall have a just share, as
determined by law, in the national taxes which shall be automatically released to them’ while
Section 7 provides that “Local governments shall be entitled to an equitable share in the
proceeds of the utilization and development of the national wealth within their respective areas,
in the manner provided by law, including sharing the same with the inhabitants by way of direct
benefits.”

However, the last parageaph of Section 285 of RA No. 7160 otherwise known as the Local
Government Code of 1991 states that “the financial requirements of barangays created by local
government units after the effectivity of this Code shall be the responsibility of the local
government unit concerned.” It practically excludes barangays created after the Code’s effectivity
from receiving their just shares of the Internal Revenue Allotment (IRA), practically negating the
constitutional provisions on local government autonomy.

‘The continued exclusion of such barangays from the IRA severely impairs the delivery of
government social services and projects. ‘Thus, this bill is a remedial measure to correct the
lopsided, if not unjust distribution of funds among LGUs and arrive at an equitable distribution
of LGU shares from national taxes and the utilization and development of the national wealth.

On the other hand, the bill shall also engender strict LGU compliance with the requirements on
the creation of barangays. These shall all help in ending the financial deprivation of non-IRA.

barangays and make local government autonomy a reality for the same.

In view of the foregoing, the passage of this measure is earnestly sought.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

4109

HOUSE BILL No.

Introduced by HON. JULIETTE T. UY

AN ACT
GRANTING INTERNAL REVENUE ALLOTMENTS TO BARANGAYS CREATED
BY LOCAL SANGGUNIANS, AMENDING FOR THE PURPOSE SECTIONS 6, 7,
AND 285 OF REPUBLIC ACT NO. 7160, AS AMENDED, OTHERWISE KNOWN AS
‘THE LOCAL GOVERNMENT CODE OF 1991.

Be it enacted by the Senate and Hlouse of Representatives of the Philipines in Congress assembled:

SECTION 1, Section 6 of Republic Act No. 7160, otherwise known as the Local Government
Code of 1991, as amended, is hereby further amended to read as follows:

“Sec 6, Authority to Create Local Government Units. - A local government
unit may be created, divided, merged, abolished, or its boundaries substantially
altered cither by law enacted by Congress in the case of a province, city,
municipality, or any other political subdivision, or by ordinance passed by the
sangguniang panlalawigan or sangguniang panlungsod concerned in the case of a
barangay located within its territorial jurisdiction, subject to THE STRICT
[such] limitations and requirements prescribed in this Code,

SECTION 2. Section 7 of the Local Government Code of 1991, as amended, is hereby further
amended to read as follows:

“Sec. 7. Creation and Conversion. —

“x08,
Compliance with the foregoing indicators shall be attested to by the Department of
Finance (DOF), the Philippine Statisties Authority (PSA) [National Statistics Office
(NSO)], and the Lands Management Bureau (LMB) of the Department of Environment
and Natural Resources (DENR).

SECTION 3. Section 285 of the Local Government Code of 1991, as amended, is hereby
further amended to read as follows:

“Sec. 285. Allocation to Local Government Units, - The share of local
government units in the internal revenue allotment shall be collected in the
following manner:


“XXX.

[Provided, finally, That the financial requirements of barangays created by local
government units after the effectivity of this Code shall be the responsibility of
the local government unit concerned ]

SECTION 4, All barangays created by the sangguniang panlalawigan or sangguniang
panlungsod pursuant to Section 6 of Republic Act No. 7160, otherwise known as the Local
Government Code of 1991, as amended shall be entitled to an internal revenue allotment share
in accordance with the formula prescribed in under Section 285 of the Code after the effectivity
of this Act, Provided That baeangays created by local government units that have failed to meet the
population requirement under Section 386 of the Code shall not be entitled to the benefits
covered by this Act.

SECTION 5. The Department of Finance (DOF), in close coordination with the Department
of Budget and Management (DBM) and Department of Interior and Local Government (DILG)
and the leagues of local government units shall issue the necessary implementing rules and
regulations within sixty (60) days upon effectivity of this Act.

SECTION 6. All laws, presidential decrees, executive orders, rules and regulations, and parts
thereof which are inconsistent with any of the provisions of this Act shall be deemed repealed or
modified accordingly,

SECTION 7, This Act shall take effect fifteen (15) days after its complete publication in two (2)
newspapers of general circulation,

Approved,