EPRES,
Kos BS

RECEIVED @
04 JUL 2013

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

DATE:

Sixteenth Congress
First Regular Session

House Bill No. 23°

Introduced by Honorable Roy M. Loyola

EXPLANATORY NOTE

This bill was originally introduced at the Fifteenth (15°) Congress by Representatives
Rufus B. Rodriguez, Roy M. Loyola, and Erineo S. Maliksi as House Bill No, 4990. It was referred
and approved by the House Committee on Local Governments as substitute House Bill No, 5620
under Committee Report No. 1594 dated December 8, 2011. It was approved on 2” Reading on
January 24, 2012 and 3" and Final Reading on March 5, 2012. The Bill was transmitted to the
Senate on March 8, 2012 where it was read 1" Reading and was referred to the Committee on
Local Governments on March 18, 2012.

At the Senate, Hon. Panfilo M. Lacson on December 5, 2011 introduced the measure's
parallel bill, Senate Bill No. 3081. It was read on 1" Reading and referred to the Senate
Committee on Local Government the same day it was filed.

Both House Bill No. 5620 and Senate Bill No. 3081 were calendared and were taken up
at the Senate Joint Committee Hearings on November 15, 2012. Unfortunately, the bill was not
passed at the 15” Congress for lack of material time.

‘The primordial reason for converting a municipality or cluster of barangays into a city is to
ensure its economic viability (Latasa v Commission on Elections, G.R. No. 154829, December
10, 2003). As a general rule, the creation of a local government unit or its conversion from one
level into another shall be based on verifiable indicators or viability and projected capacity to
provide services, specifically income, population and land area (Section 7, R.A. No. 7160, Local
Government Code of 1991)

‘Among the three, there is no doubt that the income requirement is the most controlling. In
recognition of such fact, the Code sets forth the following criterion: Income ~ It must be sufficient,
based on acceptable standards, to provide for all essential facilities and services and special
functions commensurate with the size of its population, as expected of the local government unit
concemed (Section 7(a), supra).

With regards to the population requirement, the Code merely provides: Population — It
shall be determined as the total number of inhabitants, within the territorial jurisdiction of the local
government unit concemed (Section 7(b). supra).

‘And lastly, with regards to the land area, the Code merely requires that the same be
contiguous; properly identified by metes and bounds; and more importantly, must be sufficient to
provide for such basic services and facilities to meet the requirements of its populace (Section
7(c), supra).


As our law stands today, before a municipality or cluster of barangays could be converted
into a component city, it must have an annual income of at least One Hundred Million Pesos
(P 100,000,000.00) and a territory of at least one hundred (100) square kilometers or a population
of not less than one hundred fifty thousand (150,000) Sec. 450, RA No. 7160, Local
Government Code, as amended by RA. 9006).

However, there are some municipalities which, despite of its small land area or
population, have nevertheless demonstrated its unquestionable capacity to provide essential
government facilities, social services to its inhabitants, comparable or even superior to existing
cities.

‘As we all know, living in a city has its corresponding economic advantage. Thus, it would
be utterly unfair to the inhabitants of municipalities to forever foreclose their right to the benefits of
cityhood simply because such municipalities’ land area and population is less than one hundred
(100) square kilometers or one hundred fifty thousand (150,000), respectively.

While there is no hard and fast rule to determine the optimum populace or land area for a
city, applying the principles of political law for creation of a sovereign state, the population must
be numerous enough and able to procreate in order to ensure perpetuation of the political entity
With regards to its land area, the same must be large enough to be able to sufficiently provided
for its people.

Noteworthy are the small states, specifically: Monaco, a tiny state along the French
Riviera which has an area of just 0.7 square miles (1.81 sq. km.) and a population of just 32,000.
The island state of Naura, became independent in 1968, and has an area of just 8.5 square miles
(22 sq. km.) and a population of just 13,000. Tuvalu, formerly known as Ellice Islands, gained its
independence in 1978, and has an area of just 9 square miles (23.3 sq. km.) and a population of
12,000. San Marino, located at Mt. Titano in north central Italy, which has an area of just 24
square miles (62.13 sq. km.) and a population of just 29,000.

If the above political entities have attained their status as independent states despite their
‘small population and land area, all the more reason for municipalities which have time and again
demonstrated their capacity to thrive despite their small population and land area to be allowed to
upgrade its status to that of a city.

Just like in any other law, there is a general rule and there is an exception. For purposes:
of this bill, the general rule remains — that for creation of or conversion into a city, a municipality
must have an income of at least P100,000,000.00 and a land area of at least 100 square
kilometers ofpopulation of at least 150,000. The exception is that, if the municipality generates a
\ocal income oi at least Two Hundred Twenty Million Pesos (P220,000,000.00), then it is qualified
to be converted into a city without regard to the size of its land area or population.

In view thereof, support and approval of this measure is eamestly sought.

YY M. LOYOLA


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Sixteenth Congress
First Regular Session

House Bill Nos 232

Introduced by Honorable Roy M. Loyola

AN ACT EXEMPTING FROM THE POPULATION AND THE LAND AREA
REQUIREMENTS THE CONVERSION OF A MUNICIPALITY INTO A COMPONENT
CITY IF IT HAS A LOCALLY GENERATED AVERAGE ANNUAL INCOME OF AT
LEAST TWO HUNDRED TWENTY MILLION PESOS (P220,000,000.00), AMENDING
FOR THE PURPOSE SECTION 450 OF REPUBLIC ACT NO. 7160, AS AMENDED,
OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991.

Be it enacted by the Senate and House of Representatives in Congress assembled:
SECTION 1. Section 450 of Republic Act No. 7160 as amended, otherwise known as the
Local Government Code of 1991, as amended by Republic Act No. 9009, is hereby further

‘amended to read as follows:

SEC. 450. Requisites for Creation ~ (a) A municipality or a cluster of barangays may be
converted into @ component city if it has a locally generated average annual income, as
certified by the Department of Finance, of at least One hundred million pesos
(P100,000,000.00) for the last two (2) consecutive years based on 2000 constant prices,

and if has either of the following requisites:

() a contiguous territory of at least one hundred (100) square kilometers, as

certified by the Lands Management Bureau; or

(ji) a population of not less than one hundred fifty thousand (150,000) inhabitants,

as certified by the National Statistics Office.


THE POPULATION AND LAND AREA REQUIREMENTS PRESCRIBED
HEREIN SHALL NOT APPLY IF A MUNICIPALITY HAS A LOCALLY
GENERATED AVERAGE ANNUAL INCOME, AS CERTIFIED BY THE
DEPARTMENT OF FINANCE, OF AT LEAST TWO HUNDRED TWENTY
MILLION PESOS (P220,000,000.00) FOR THE LAST TWO (2) CONSECUTIVE
YEARS BASED ON 2010 CONSTANT PRICES AND HAS EITHER THE
POPULATION OR LAND AREA REQUIREMENT PRESCRIBED FOR THE
CREATION OF A MUNICIPALITY UNDER SECTION 443 OF THIS CODE.

The creation thereof shall not reduce the land area, population, and income of
the original unit or units at the time of said creation to less than the minimum

requirements prescribed herein.

(b) The territorial jurisdiction of a newly-created city shall be properly identified by metes
and bounds. The requirement on land area shall not apply where the city proposed to be
created is composed of one (1) or more islands. The territory need not be contiguous if it

comprises two (2) or more islands.

(c) The average annual income shall include the income accruing to the general fund,

exclusive of specific funds, transfers, and non-recurring income.”

SECTION 2. If any provision of this Act shall be declared invalid or unconstitutional, the

remaining part or provisions not otherwise affected shall remain in force.

SECTION 3. Any law, decreed, ordinance, administrative circulars not consistent with any

provision of this Act is hereby amended, repealed or modified accordingly.


‘SECTION 4. This Act shall take effect fifteen (15) days after its complete publication in
the Official Gazette or in at least two (2) newspapers of general circulation.

Approved,