REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Third Regular Session

House Bill No._ $026

Introduced by MAGDALO Party-List Representative
HON. GARY C. ALEJANO:

EXPLANATORY NOTE
Based on a Department of Justice opinion, Local Government Units, although they possess a
corporate personality, still cannot form a corporation among themselves since the Corporation Code

of the Philippines states that only natural persons can form a corporation.

Due to this restriction, LGU cooperation has been limited to resource-sharing for inter-LGU
ventures, since they cannot formalize a legal personality to effectively contract credit financing.
‘This limits their avenues to finance projects, which even with resource-sharing, might still prove too

costly.

To further the principle in the Local Government Code of 1991 that local issues and
development often do not respect geographic and administrative boundaries, Congress must enable
LGUs to formalize their own legal personalities to contract credit financing. This way, we are

practically expediting the development of two or more LGUs at the same time.

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

». GARY C. ALEJANO


REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Third Regular Session

House Bilt No, 8020

Introduced by MAGDALO Party-List Representative
HON. GARY C. ALEJANO

AN ACT
‘TO ENHANCE INTER-LGU COOPERATION BY AMENDING CERTAIN PROVISIONS
IN BOOK | OF REPUBLIC ACT 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:

SEC. 1. Section 3 of the Code is hereby amended to read as follows:

“SEC. 3. Operative Principles of Decentralization. - The formulation and
implementation of policies and measures on local autonomy shall be guided by the
following operative principles:

a)

(O Local government units may group themselves, consolidate or coordinate their
efforts, services, and resources for purposes commonly beneficial to them|;] THROUGH
MUTUAL AGREEMENT OR THROUGH THE FORMATION OF AN ALLIANCE
WITH A LEGAL PERSONALITY;”

‘SEC. 2. Section 33 of the Code is hereby amendment to read as follows:

“SEC. 33. Cooperative Undertakings Among Local Government Unit
THROUGH MUTUAL AGREEMENT. - Local government units may, through
appropriate ordinances, group themselves, consolidate, or coordinate their efforts, services,
and resources for purposes commonly beneficial to them THROUGH MUTUAL
AGREEMENT. In support of such undertaking, the local government units involved may
upon approval by the sanggunian concemed after a public hearing conducted for the
Purpose, contribute funds, real estate, equipment, and other kinds of property and appoint or
assign personnel under such items and conditions as may be agreed upon by the
participating local government units through Memoranda of Agreement.”

SEC. 3. A new section in Book I of the Code hereby reads as follows:

__. COOPERATIVE UNDERTAKINGS AMONG LOCAL
GOVERNMENT UNIT THROUGH THE FORMATION OF AN ALLIANCE WITH
LEGAL PERSONALITY. - LOCAL GOVERNMENT UNITS MAY GROUP
THEMSELVES, CONSOLIDATE, OR COORDINATE THEIR EFFORTS,


SERVICES, AND RESOURCES FOR PURPOSES COMMONLY BENEFICIAL TO
THEM THROUGH THE FORMATION OF AN ALLIANCE WITH A LEGAL
PERSONALITY. FOR THIS PURPOSE, A NATIONAL REGISTRY OF
ALLIANCES (NRA) SHALL BE FORMED TO REGISTER THE ALLIANCE OF
LGUS AND ESTABLISH THE LEGAL PERSONALITY AND = ALL THE
CONSEQUENT IMPLICATIONS OF THE SAME. THE NRA SHALL BE
COMPOSED OF THE SECRETARY OF THE DEPARTMENT OF INTERIOR AND
LOCAL GOVERNMENT AS CHAIR WITH THE PRESIDENTS OR CHAIRMEN
OF THE LEAGUES OF PROVINCES, CITIES, AND MUNICIPALITIES AND THE
LIGA NG MGA BARANGAYS AS BOARD MEMBERS. THE NRA BOARD SHALL
FORMULATE THE REQUIREMENTS, GUIDELINES, AND PROCEDURES FOR
THE APPLICATION, CREATION, REGISTRY, REGULATION AND
MONITORING OF INTER-LGU ALLIANCES COVERED BY THE NRA. THE
REGISTRY AND SECRETARIAT SHALL BE HOUSED AT THE DEPARTMENT
OF THE INTERIOR AND LOCAL GOVERNMENT.

SEC. 4. - Repealing Clause. All general and special laws, acts, city charters, decrees,

executive orders, proclamations and administrative regulations, or part or parts thereof which are
inconsistent with any of the provisions of this Act are hereby repealed or modified accordingly.

SEC. 5. - Separability Clause. \f, for any reason or reasons, any part of provision of this

Act shall be held unconstitutional or invalid, other parts or provisions hereof which not affected
thereby shall continue to be in full force and effect.

SEC. 6. Effectivity Clause. This Act shall take effect after fifteen (15) days from its

publication in the Official Gazette or in two (2) newspaper of general circulation.

Approved,