SIXTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
S.No. 1842 
Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
;if't1:1h 
, i~lh;r i.ir Itl" ~~(\"~br~ 
'13 
OCT 14 P 5 :24 
Real property tax (RPT) is the single maj or 'source of income of local governments. It 
accounts for roughly 36% of total locally-generated income ofLGUs. However, the Commission 
on Audit (COA) bared that only 54% of the total potential tax take are actually collected. There 
are several reasons raised why there is an apparent under collection of real property taxes: 
. 
. 
(1) 
There is no uniform method of appraising real properties among local 
governments - i.e., two similar assets located in two different but adjacent jurisdictions may bear 
different RPT burdens. 
(2) 
Revision or updating of the schedule of fair market values is so infrequent, thus, 
resulting in a low tax base even as assets in the market continue to appreciate. 
(3) 
The approval of the schedule of fair market values is vested on the Sanggunian 
Panlalawigan!Panlungsod. Considering the political nature of the local Sanggunian, the tendency 
. is to forego revisions in the valuation schedule or to keep the property values understated. 
It is important, therefore, that t;he approval of the schedule .of fair market values be 
transferred from the local Sanggunian to the Department of Fimince (DOF) upon review and 
recommendation of a Regional Technical Valuation Committee. The power to determine the 
assessment levels and tax rates, however, shall remain with the local Sanggunian. 
The Committee shall be composed of the local assessors, and regional representatives 
from the Bureau of Local Government Finance (BLgF), the Bureau of Internal Revenue (BIR), 
I 


and the private sector, The same Committee shall seek to harmollize the v,aluation method used 
by the different local government units, national government agencies, and the private sector.' 
~\.. 4~ .... ~ J~ 
,tM',MIRIAM DEF~SOR sltm!fo 
• • 
" 
, This bill was originally filed during the 14th Congress, First Regular Session 
2 


SIXTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
'13 
OCT 14 P5 :24 
SENATE 
S.No. 1842 
Introduced by Senator Miriam Defensor Santiago 
RECEI\'EH llV._(, 
• • 
1 
AN ACT 
2 
AMENDING SECTIONS 212 AND 214 OF REPUBLIC ACT NO. 7160, OTHERWISE 
3 
KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
4 
SECTION 1. Section 212 of Republic Act No. 7160, or the Local Government Code of 
5 
1991, is hereby amended to read as follows: 
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"SEC. 212. Preparation of Schedule of Fair Market Values. - Before any 
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general revision of property assessment is made pursuant to the provisions of this 
8 
Title, [there shall be prepared a schedule of fait market values by the provincial, 
9 
city and the municipal assessors of the municipalities within the Metropolitan 
10 
Manila Area for the different classes of real property situated in their respective 
11 
local government units for enactment by ordinance of the sanggunian concerned.] 
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A SCHEDULE OF FAIR MARKET VALUES SHALL BE PREPARED BY 
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A REGIONAL TECHNICAL VALUATION COMMITTEE FOR FINAL 
14 
APPROVAL OF THE SECRETARY OF FINANCE. 
15 
THE REGIONAL TECHNICAL VALUATION COMMITTEE 
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SHALL 
BE 
COMPOSED 
OF 
THE 
PROVINCIAL, 
CITY 
AND 
17 
MUNICIPAL 
ASSESSORS 
OF 
MUNICIPALITIES 
WITHIN 
THE 
18 
METROPOLITAN MANILA AREA, AND ONE REPRESENTATIVE 
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EACH FROM THE BUREAU OF LO€AL GOVERNMENT FINANCE 
20 
(BLGF), THE BUREAU OF INTERNAL REVENUE (BIR), AND THE 
21 
PRIVATE SECTOR. THE REPRESENTATIVE FROM THE PRIVATE 
1 
• 


1 
SECTOR MUST BE DIRECTLY INVOLVED IN REAL ESTATE 
2 
APPRAISAL. 
3 
The schedule of fair market values shall be published in a newspaper of 
4 
general circulation in the province, city or municipality concerned or in the 
5 
absence thereof, shall be posted in the provincial capitol, city or municipal hall 
6 
and in two other conspicuous public place~ therein." 
7 
SECTION 2. Section 214 ofthe same law is hereby amended to read as follows: 
8 
"SEC. 214. Amendment. of Schedule of Fair Market Values. - The 
9 
[provincial, 
city 
or 
municipal 
assessor] 
REGIONAL 
TECHNICAL 
10 
VALUATION COMMITTEE may recommend to the [sanggunian concerned] 
11 
SECRETARY OF FINANCE amendments to correct errors in valuation in the 
12 
schedule of fair market values. The [sanggunian concerned] SECRETARY shall, 
13 
[by ordinance,] act upon the recommendation within ninety (90) days from receipt 
. , 
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thereof. 
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SECTION 3. Separability Clause. - If any provision or part hereof is held invalid or 
16 
unconstitutional, the remainder of the law or the provision not otherwise' affected shall remain' 
17 
valid and subsisting. 
18 
SECTION 4. Repealing Clause. - Any law, presidential decree or issuance, executive 
19 
order, letter of instruction, administrative order, rule, or regulation contrary to or inconsistent 
20 
with the provisions of this Act is hereby repealed, modified, or amended accordingly. 
21 
SECTION 5. Effectivity. - This Act shall take effect fifteen (15) days following its 
22 
Publication in at least two (2) newspapers of general circulation. 
Approved, 
2