Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

4804
HOUSE BILL No.

Introduced by: REPRESENTATIVE MARISOL C. PANOTES

EXPLANATORY NOTE

Under the original provision of Republic Act No. 7160 of the Local Government
Code of 1991 as amended, specifically Section 450, the income requirement for the
conversion of a municipality or cluster of barangays into a component city was fixed at
an average annual income for two (2) consecutive years of Twenty Million Pesos,
including the Internal Revenue Allotment (IRA) shares, and all other incomes. However,
with the implementation of Republic Act No. 9009 in 2001, which effectively amended
the aforementioned provision of the Code, the income requirement was not only
significantly increased to One Hundred Million Pesos (P100,000,000.00) but also limited
to locally generated incomes only thereby excluding the IRA shares and other incomes.

Ironically, the income requirements for the creation of provinces and highly
urbanized cities are very much lower than in creating component cities. Sections 452 and
461 of the Local Government Code of 1991 only require an average annual income for
two (2) consecutive years of Fifty Million Pesos (P50,000,000.00) and Twenty Million
Pesos (P20,000,000.00) for the creation of a highly urbanized city and province
respectively, which even include the IRA shares and all other incomes

Under this situation, the capital towns, which have been considered as the face or
reflection of provinces, are placed in a very disadvantaged position thereby hindering
their progress and prosperity to the detriment of their constituents

This bill therefore, seeks to exempt the capital town of a province without a city
from the requisites prescribed for its conversion into a component city by further
amending Section 450 of Republic Act No. 7160, as amended, otherwise known as the
Local Government Code of 1991 to propel its growth and development

The foregoing reasons warrant the immediate approval of this important
legislative measure

(
MARISOL C. PANOTES
Representative
Second District, Camarines Norte


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

4804
HOUSE BILL No.

Introduced by: REPRESENTATIVE MARISOL C. PANOTES

AN ACT
EXEMPTING THE CAPITAL TOWN OF A PROVINCE WITHOUT A CITY,
FROM THE REQUISITES FOR ITS CONVERSION INTO A COMPONENT
CITY, AMENDING FOR THE PURPOSE SECTION 450 OF REPUBLIC ACT No.
7160, AS AMENDED BY REPUBLIC ACT No. 9009, OTHERWISE KNOWN AS
THE LOCAL GOVERNMENT CODE OF 1991

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

SECTION 1. Section 450 of Republic Act No. 7160 as amended by Republic Act
No. 9009, otherwise known as the Local Government Code of 1991 is hereby further
amended to read as follows:

“Section 450. Requisites for Creation. - (a) A municipality or a
cluster of barangays may be converted into a component city if it has a
locally generated 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 2000 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 Land Management Bureau; or

(ii) a population of not less than one hundred fifty thousand
(150,000) inhabitants, as certified by the [National Statistics Office]
PHILIPPINE STATISTICS AUTHORITY (PSA).

THE REQUISITES PRESCRIBED HEREIN SHALL NOT
APPLY TO THE CAPITAL TOWN OF A PROVINCE WITHOUT A
CITY,

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
(J) 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.”

SEC. 3. This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in a newspaper of general circulation

Approved,