THIRTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
SECOND REGULAR SESSION 
1 
SENATE 
Introduced by SENATOR ALFRED0 S. LIM 
EXPLANATORY NOTE 
The fast pace of development in the economic, political and social 
lives and well-being of the populace of various municipalities in the country 
indicates their desire to savor the fruits of progress on a higher level of 
political spectrum. 
This situation is more prominently felt in municipalities that serve as 
capital towns of provinces in as much as they are the hubs of tradehd 
commerce in their respective provinces that make them capable and 
qualified to receive broader autonomy, to be burdened with greater 
responsibilities, and to be granted appropriate taxing powers for the 
effective delivery of services to their constituents. 
They deserve to be converted into cities as aptly envisioned under 
Republic Act No. 7160, otherwise known as the ‘Local Government Code.” 
But these municipalities, though capable and prepared as they are 
to accept cityhood, are, however, unable to muster the minimum 
P I  OOmillion annual income requirement as fixed under Sec. 450 of the law. 
Thus, the proposed bill seeks to provide an exemption from such 
requirement as set out in the existing law. 


6 FEY 21 P I  m 
THIRTEENTH CONGRESS OF THE ). 
REPUBLIC OF THE PHILIPPINES ) 
SECOND REGULAR SESSION 
) 
S.B. NO. 
Introduced by SENATOR ALFRED0 S.LIM 
SECTION 1. Amending Sec. 450 of Republic Act No. 7160 as 
amended. Municipalities serving as capital towns of the provinces to 
which they belong shall be exempted from the minimum annual 
income requirement of One Hundred Million Pesos (P1UO,OOO,OOO) for 
conversion into city or be given priority for conversion into a city if the 
province to which it belongs does not have any city, amending for the 
purpose Section 450 of Republic Act No. 7160, otherwise known as the 
Local Government Code of 1991 as amended by Republic Act No. 9009, 
which shall commence henceforth as follows: 
'Sec. 450. Requisites for Creation. - (a) A municipality or 
a cluster of barangays may be converted into a component city if 
it has an average annual income, as certified by the Department 
of 
Finance, 
of 
at 
least 
One 
Hundred 
Million 
pesos 
(P100,000,000.00) for the last two (2) consecutive years based 
on 1991 constant prices, and if it has either of the following 
requisites." 
"(i) a contiguous territory of at least one hundred (100) 
square kilometers, as certified by the Lands Management 
Bureau; or," 
"(ii) a population of not less than one hundred fifty 
thousand (150,000) inhabitants, as certified by the National 
Statistics Office.'' 
"Provided, that the creation thereof shall not reduce the 
land area, population, and income of the original unit or units at 
the time of said creation to less than the minimum requirements 
prescribed herein;" 


"(b) The territorial jurisdiction of a newly-created city shall 
be properly identified by metes and bounds. The requirement on 
land area shall not apply where the city proposed to be created 
is composed of one (1) or more islands. The territory need not 
be contiguous if it comprises two (2) or more islands." 
"(c) The average annual income shall include the income 
accruing to the general fund, exclusive of special funds, transfers, 
and non-recurring income." 
SECTION 2. 
Repealing Clause. - All laws, decrees and other 
issuances which are inconsistent with this Act are hereby repealed. 
SECTION 3. Effectivity. - This Act shall take effect fifteen (15) 
days From its publication in two ( 2 )  newspapers of general circulation. 
Approved