Republic of the Philippines
HOUSE 0F REPRESENTATIVES
Constitution Hills, Quezon City
NINETEENTH CONGRE SS
First Regular Session
HOUSE BILL NO. 6102
Introduced by 2nd District of Agusan del Norte Representative
HON. DALE 8. CORVERA
ANACT
ARENDING  SECTION  285  0F  REPUBLIC  ACT  NO.  7160,  OTHERWISE
KNOWN AS TIIE "LOCAL GOVERNRENT CODE 0F 1991", AS AMENDED,
T0  INCLUDE  AREA  0F  MUNICIPAL  WATHRS  AS  AN  ADDITIONAL
FACTOR    IN    DETERENING    TIIE     SIIARE     0F    EACH    LOCAL
GovERNhmNT UNIT IN THH NATloNAL TAx ALLOTRENT
EXPLANATORY NOTE
Republic Act (RA) No. 7160, otherwise known as the Local Government Code of 1991
(LGC), is the enabling law for Article X of the 1987 Constitution. Through the LGC, a more
responsive and  accountable local  government structure  was  instituted through a system  of
decentralization whereby local government units a,GUs) were given more powers, authority,
responsibilities, and resources.  The process of decentralization proceeded from the national
government to the LGUs
Section 6, Article X of the Constitution provides that the local government units shall
have a just share,  as determined by law, in the national taxes which shall  be automatically
released to them. In the LGC, the constitutional provision pertaining to the just share of the
LGUs in the national taxes is implemented by Chapter I, Title Ill, Sections 284-288.
The ruling of the Supreme Court in Mandanas ct al. vs. Executive Seeretary et al. (G.R
Nos.  199802 and 208488) clarified that the share of the LGUs should not be limited to national
I.72fer#a/ reve#afe tames alone. Rather, it should include all national taxes, except those that have
been collected for a specific puxpose.
The Mandanas Ruling solved the issue on the just share of the LGUs as a whole in the
national  taxes,  by  correcting  the  phrasing  in  Section  284  of  the  LGC.  However,  this
representation believes that a deeper issue in Section 285 of the LGC must be addressed.
Under Section 285, after the determination of the share of LGUs per class (province,
city,  municipality  or barangay) has  been made,  the  share of a particular province,  city  or
municipality shall be determined on the basis of three factors: i) Population, ii) Land Area, and
iii) Equal sharing. But it appears that these factors forgot to consider one critical information -


the  fact  that  the  Philippines  is  an  archipelagic  country.  In  fact,  more  than  50%  of  all
municipalities and cities in the country are considered coastal.
The current formula for determining the share of each province, city or municipality is
unfair to the LGUs which have vast municipal waters.  Conversely,  it greatly  favors LGUs
which are landiock. Coastal LGUs are compelled to provide services, programs and facilities
for the protection, promotion and maintenance of the municipal waters pursuant to existing
laws despite the fact that in the current distribution of the national taxes, the area of municipal
waters is not considered.
One such law is RA No.  8550, otherwise known as the Philippine Fisheries Code of
1998, as alnended. This law defined "municipal waters" and made municipal/city government
responsible  for  the  management,  conservation,  development,  protection,  utilization,  and
disposition of all fish and fishery/aquatic resources within their respective municipal waters.
Yet, no corresponding adjustments were made in the aforementioned factors under the LGC to
cover  the  expenses  brought  about  by  the  increase  in  responsibilities  associated  with  the
implementation of RA No. 8550.
Moreover, coastal cities and municipalities are the most exposed to huge daniages and
displacements  brought  about  by  strong  eyclones,  storm  surges  and  tsunamis.  In  fact,  the
Philippines has been ranked first (1St) in the recently released 2022 World Risk Index as the
most affected country from extreme weather events. The World Risk Index is a tool used to
assess  and  estimate the  disaster risk  of a country,  using  both  external  and  internal  hazard
factors, including eyclones, floods, droughts, sea level rise and societal conditions.
Coastal LGUs, especially those located at the eastern part of the country, unfortunately
have to deal with typhoons at the time when they are strongest and raging. Coastal LGUs are
obliged to spend on projects and programs to prevent loss of life and property due to these
events.
The hard truth is promotion, protection and preservation of coastal areas entail costs.
And these costs are not considered by the present distribution of shares to the LGUs under Sec.
285 of the LGC.
This proposed measure aims to provide LGUs with their TRULY JUST SHARE from
the national taxes.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City
NINETEENTH CONGRESS
First Regular Session
HOusE BILLNO.  61n2
Introduced by 2nd District of Agusan del Norte Representative
HON. DALE 8. CORVERA
ANACT
ARENDING  SECTION  285  0F  REPUBLIC  ACT  NO.  7160,  OTHERWISE
ENOWN AS THE "LOCAL GOVERNRENT CODE OF 1991", AS AMENDED,
T0  INCLUDE  AREA  0F  MUNICIPAL  WATERS  AS  AN  ADDITIONAL
FACTOR    IN     DETERMINING     TIIE     SHARE     0F     EACH     LOCAL
GOVERNRENT UNIT IN TIIE NATIONAL TAX ALLOTMENT
Be  it  e.r!ac.ted by the  Se:Iriate and  House  Of Representatives  Of the  Philippines  in Congress
assembled:
Section  1.  Section  285  of Republic  Act  No.  7160,  otherwise  knoum  as  the  Local
Government Code of 1991, is herdy7 amended to read as follows:
«SEC"OIN 28S. Allocation to Local Government Units. -The share cif
local government units in the internal re`..enue allotment shall be collected in the
following manner:
(a) Provinces - Twenty-three percent (23%);
(b) Cities -Twenty-three percent (23%);
(c) Municipalities - Thirty-four percent (34%); and
(d) Barangays - Twenty percent (20%)
Provided,   however,   That  the   share  of  each   province,   city,   and
municipalityshallbedeterminedonthebasisofthefol]owing`formula:
(a) Population -Fifty percent (50%);
a) Land Area AI`ro AREA OF MUNICIPAL WATERS - (25%); and
(c) Equal sharing - Twenty-five percent (25%)
Provided, firfuer, That the share of each barangay with a population of
notlessthanonehundred(loo)inhahitantsshallnotbelessthanEightythousand
(P80,000.00) per annum chargeable against the twenty percent (20%) share of
the barangay from the internal revenue allotment, and the balance to be allocated
on the basis of the following formula:


(a) On the first year of the effectivity of this Code:
(1) Population ~ Folly percent (40%); and
(2) Equal sharing - Sixty percent (60%)
a) On the second year:
(1) Population -Fifty pereent (50%); and
(2) Equal sharing - Fifty percent (50%)
(c) Cia the third year and thereafter:
(1) Population -Sixty percent (60%); and
(2) Equal sharing - Forty percent (40%).
Provided, finally, That the financial requirements of barangays created
by  local  government  units  after  the  effeedvity  of this  Code  shall  be  the
responsibility of the local government unit concerned.
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Section 2. Coxprerfeeus;-ve Szfrve}i a/M3ffl!.ctpcr/ Wcr/era. -  The National Mapping and
Resource  Information Athority  QIAMRIA) shall  conduct  a comprehensive survey  of all
municipal  waters  Of the  country,  which  result  shall  be  submitted  to  the  Department  of
EnvironmentandNaturalResources(DENR),DepartmentofBudgetandManngement(DBro,
Department  of  Interior  and  Local  Government  (DILG)  and  the  LGU-NTA  Oversight
Committee within one (1) year from the effectivity of this Act.
Section  3.  Creefrore  a/ Oversz.gfef Commz.#ee.  - Upon the  effectivity  of this  Act,  a
Congressional  Oversight  Committee  hereafter  referred  to  as  the  LGU-NTA  Oversight
Committee is herety constituted. This committee shall set the overall framework and review
the implementation of this Act. It shall likewise detemine the inherent weaknesses in the law
and recommend necessary remedial legislation or executive measures.
The  oversight  committee  shall  be  composed  of three  (3)  Senators  and  three  (3)
Representatives to be appointed by the Senate President and the Speaker of the House of
Representatives, respeetively, and corchaired by the Chairpersons of the Committee on Local
GovemmentoftheSenateandOftheHouseofRepresentatives.
For purposes of determining remedial legislation, the oversight committee shall, within
two(2)yearsaftertheeffectivityofthisAct,conduetareviewwhichshallincludeaaystematic
evaluation of the impact of this Act, accomplishments of the progranL and the performance of
the implementing agencies.


I
Section 4. Jmp/emeHfr.ng R#/es aHd JiegziJafz.ous. - Within thirty (30) days from the
effndvityofthisAct,theDBn4inconsultationwiththeDENRandotherrelevantgoyemment
agencies, shall formulate the rules and regulations for the effective implementation of this Act.
Section 5. Slepcrmbi.JI.ty a/aase. -If, for any reason, any section, clause or tern Of this
Act is held to be illegal, invalid, or unconstitutional, such parts not affected by such declaration
shall remain in full force and effect.
Section  6. Repea/j.#g Cdrzjse.  - AIl  laws,  presidential  decrees,  issuances,  executive
orders, letters of instruction, rules, and regulations inconsistent with the provisions of this Act
are hereby repealed or modified accordingly.
Section 7. Ej7ec#.vjfy CJaasG.  -Tis Act shall take effeet fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.
Approved,