FOURTEENTH CONGRESS OF THE REPUBLIC) 
First Regular Session 
) 
7 JUL -3 P4 :zj 
OF THE PHILIPPINES 
1 
S E N A T E  
S. No. $53 
Introduced by Senator Manuel “Lito” M. Lapid 
EXPLANATORY NOTE 
As an archipelago situated in the western rim of the Pacific Ocean and 
part of the circum-Pacific seismic belt, the Philippines is situated in the path of 
turbulent and destructive typhoons, storms, floods, drought, earthquake, 
volcanic eruption and landslides. Its coastline of 17,461 kilometers makes it 
vulnerable to tsunamis and storm surges that endanger coastal communities. 
Natural disasters cause great loss of life and extensive damage to 
property and infrastructure. The macroeconomic impact of these catastrophies 
can be measured in terms of its effects on agricultural production, industry and 
services, employment and inflation. In other words, the loss of resources due to 
these unpredicted catastrophies adversely affect the national economy. 
Depending on the extent of damage, the development process can be delayed or 
set back by years or a decade. 
It may be gleaned from Section 324, paragraph (d) of R.A. 7160, 
otherwise known as The Local Government Code of 1991, that the unused or 
unutilized balance of the annual five percent (5%) set aside for unforeseen 
calamities is reverted back to the unappropriated surplus of fbe general funds 
(Sec. 322, R.A. 7160) of the municipality. Such reversion will render the 
unexpended balance available for reapportionment at the pleasure of the 
sangguanian concerned. 
This bill seeks to amend a specific provision in R.A. 7160 by providing for 
a “Calamity Reserve Fund” to mitigate the damages caused by calamities and for 
the declaration of a state of calamity by the local chief executive of the concerned 
local sanggunian. This amendment will further the express dictate of the 
constitution on local autonomy. 
r - 7  
MANUEL “LITO” M. LAPID 
Y 


Introduced by Senator Manuel “Lito” M. Lapid 
AN ACT 
AMENDING PARAGRAPH (D), SECTION 324 OF REPUBLIC ACT NO. 7160, 
OTHERWISE KNOWN AS THE LOCAL GOVERNEMENT CODE OF 1991 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Paragraph (d), Section 324 of Republic Act No. 7160, 
otherwise known as the Local Government Code of 1991, is hereby amended to 
read as follows: 
“Sec. 324. Budgetary Requirements. - The budgets of local 
government units for any fiscal year shall comply with the following requirements” 
“xxx 
“(d) Five percent (5%) of the estimated revenue from regular 
sources shall be set aside as annual lump sum appropriation for unforeseen 
expenditures arising from the occurrence of calamities: Provided, however, That 
such appropriation shall be used only in the area, or portion thereof, of the local 
government unit or other areas [declared in state of calamity by the President] 
AFFECTED BY DISASTER OR CALAMITY AS DETERMINED BY THE LOCAL 
SANGGUNIAN CONCERNED AND DULY CONCURRED BY THE LOCAL 
THE 
UNEXPENDED 
BALANCE 
OF 
THE 
ANNUAL 
LUMP 
SUM 
APPROPRIATION FOR UNFORSEEN EXPENDITURES ARISING FROM THE 
OCCURRENCE 
OF 
CALAMITIES 
SHALL 
NOT 
REVERT 
TO 
THE 
UNAPPROPRIATED SURPLUS OF THE GENERAL FUND, AND SHALL BE 
TO 
AUGMENT 
THE 
ANNUAL 
CALAMITY 
FUND WHEN 
DEEMED 
NECESSARY.” 
CHIEF EXECUTIVE: PROVIDED, THAT THE TWENTY PERCENT (20%) OF 
SET ASIDE AS A CALAMITY RESERVED FUND. SAID FUND SHALL BE USED 
SEC. 2. Repealing Clause. - The provision of any law, which are 
inconsistent with the provision of this act are hereby repealed, amended or 
modified accordingly. 
SEC. 3. Separability clause. If for any reason, any provision of this 
Act is declared invalid or unconstitutional, the remainder of this Act shall 
not be affected. 
SEC. 4. Effectivity. - This Act shall take effect immediately upon 
publication in a newspaper of general circulation. 
Approved,