Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
Second Regular Session —

HOUSEBILENo, 53899

Introduced by HONORABLE LANI MERCADO-REVILLA

EXPLANATORY NOTE

The Constitution, Article TI, Section 25 states: “The State shal! ensure the autonomy of
local governments.” Further, Article X, Section 6 mandates: “Local government units shall have
a just share, as determined by law, in the national taxes which shall be automatically released to
them.”

This bill seeks to amend Sections 284 and 286 of the Local Government Code of 1991 by
increasing to fifty percent (50%) the share of local government units (LGUs) in the national
taxes and to release to each local government unit, specifically directly to the provincial, city,
municipal or barangay treasurer, as the case may be, the said increase without need of any further
action, on a monthly or quarterly basis within five (5) days after the end of each month or
quarter. This share shall not be subject to any lien or holdback that may be imposed by the
national government.

This measure is consistent with the promotion and enhancement of local financial
autonomy of LGUs in order that they can enjoy genuine and meaningful local autonomy to
enable them to attain their fullest development as self-reliant communities

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

16 ‘LANI MERCADO-REVILLA

Second District, Cavite


Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City

FIFTEENTH CONGRESS
Second Regular Session

House BIifNo,_ 53893

Introduced by HONORABLE LANI MERCADO-REVILLA

AN ACT AMENDING SECTIONS 284 AND 286 OF REPUBLIC ACT NO. 7160,
OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION 1. Section 284 of RA 7160 is hereby amended and shall read as follows:

Section 284. [Allotment] SHARE of [Internal Revenue] NATIONAL taxes. UPON
APPROVAL OF THIS CODE, AS AMENDED, [L] local government nits [shall have a] ARE
ENTITLED TO A FIFTY PERCENT (50%) share [in the] OF national [internal revenue] taxes
based on the collection of the third fiscal year preceding the current fiscal year. [as follows: |

[(@) On the first year of the effectivity of this Code, thirty percent (30%);

(b) On the second year, thirty-five percent (35%); and

(©) On the third year and thereafter, forty percent (40%). Provided, That in the
event that the national government incurs an unmanageable public sector deficit, the
President of the Philippines is hereby authorized, upon the recommendation of Secretary
of Finance, Secretary of Interior and Local Goverment and Secretary of Budget and
Management, and subject to consultation with the presiding officers of both Houses of
Congress and the presidents of the liga, to make the necessary adjustments in the internal
reverue allotment of local government units but in no case shall the allotment be less
than thirty percent (30%) of the collection of national internal revenue taxes of the third
fiscal year preceding the current fiscal year: Provided, firther That in the first year of the
effectivity of this Code, the local government units shall, in addition to the thirty percent
(30%) intemal revenue allotment which shall inctude the cost of devolved functions for
essential public services, be entitled to receive the amount equivalent to the cost of
devolved personal services.]

SECTION 2. Section 286 of RA 7160 is hereby amended and shall read as follows:

Section 286, Automatic Release of Shares. - {a) The share of each local
government unit IS CONSIDERED OBLIGATED AND IT stall be released, without
need of any further action, directly to the provincial, city, municipal or barangay
treasurer, as the case may be, on a MONTHLY OR quarterly basis within five (5) days
afier the end of each MONTH OR quarter, [and which]

{B) SAID SHARE shall not be subject to any lien or holdback that may be
imposed by the (national) CENTRAL goverment for whatever purpose.

{(b)] (© Nothing in this Chapter shall be understood to diminish the share of
local government units under existing laws.


SECTION 3. Repealing Clause, - All laws, decrees, executive orders, proclamations, rules and
regulations, or parts thereof inconsistent herewith are hereby repealed or modified accordingly.

SECTION 4. Separability Clause. - If any provision of this Act is held invalid or unconstitutional, the
other provisions not affected hereby shall remain valid and subsisting.

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

Approved,