RECEIVED 4
owe) [JUL 2013
re, 3G PA

Republic of the Philippines

House of Representatives
Quezon City, Metro Manila

SIXTEENTH CONGRESS
First Regular Session

1549

House Bill No.

Introduced by Honorable ERLPE JOHN “PING” M. AMANTE

EXPLANATORY NOTE

‘The present mechanism of income classification of Local Government Units
under Executive Order No. 249 provides for the inclusion of the share in the
internal revenue in the classification criteria which the undersigned believed, is
depriving local governments to showcase the hype of economic development of their
localities. ‘This bill seeks to exclude the internal revenue share of the local
government in the income classification system, in line with the policy of the State
in ensuring local autonomy, thus, giving them power and authority to craft their
own destiny.

‘The current system of income classification is not the real picture of
economic development of their local government, There are many local governments
especially in the countryside which, based on the local revenues generated are
performing well in complying their mandate to provide and initiate all kinds of
development in their areas, However, because of the income classification settings,
which internal revenue is included; they could not afford to achieve the higher
classification because they are only occupying a small land area which is part of
computing the IRA. Thus, they are deprived of due recognition in their productivity
and performance as local governments.

Further, in investment opportunities, it is unfair for those local governments
who were not given higher income classification but with productive local income
generation programs and investors are discouraged to put up their investments due
to the impression that local government with low income classification is not yet
prepared to welcome more business ventures and with no sufficient infrastructure
and facilities to accommodate their business necessities.

In view of the foregoing, the approval of this bill is earnestly sought.

El me AMANTE


Republic of the Philippines
House of Representatives
Quezon City, Metro Manila

SIXTEENTH CONGRESS
First Regular Session.

1549

House Bill No.

Introduced by Honorable ERLPE JOHN “PING” M. AMANTE

AN ACT
PROVIDING FOR THE EXCLUSION OF INTERNAL REVENUE ALLOTMENT
IN THE INCOME CLASSIFICATION SYSTEM OF LOCAL GOVERNMENT UNITS,
‘THEREBY AMENDING SECTION 4(A) OF
EXECUTIVE ORDER NO. 249, SERIES OF 1987
ENTITLED “PROVIDING FOR NEW INCOME CLASSIFICATION OF
PROVINCES,CITIES AND MUNICIPALITIES AND FOR OTHER PURPOSES.”

Be it enacted by the Senate and the House of Representatives in session assembled:
Section 1. Section 4(a) of Executive Order No 249, series of 1987 entitled

“Providing for new income classification of provinces, cities and municipalities and
for other purposes” is hereby amended to read as follows:

a. The term "annual income” shall refer to revenues and receipts realized by

provinces, cities and municipalities from regular sources of the local general
and infrastructure funds (including) excluding the internal revenue and
non-recurring receipts, (exclusive) such as other national aids, grants,
financial assistance, loan proceeds, sales of fixed assets, and (including)
similar others but exclusive of specific tax allotments provided for in
Republic Act 7610, otherwise known as the Local Government Code of
1991.

Section 2. Implementing Rules and Regulations. For purposes of the
implementation of this Act, the Secretary of the Department of Finance shall issue
such rules and regulations as he may deem necessary and appropriate Department
Orders fixing the new income bracket for the classifications of provinces, cities and
municipalities.

Section 3. Repealing Clause - All other laws, decrees, orders, issuances
and rules and regulations or parts thereof inconsistent with this Act, are hereby
repealed or modified accordingly.


Section 4. Separability Clause .All other provisions of Executive Order No.
249 not otherwise affected by the provisions of this Act shall remain in full force
and effect.

Section 5. Bffectivity Clause - This Act shall take effect fifteen (15) days
after its publication in at least two (2) national newspapers of general circulation.

Approved,