Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

HOUSE BILL’ NO. 65

Introduced by REP. ANTHONY G. DEL ROSARIO

EXPLANATORY NOTE

Article 10, Section 7 of the 1987 Philippine Constitution provides that, “Local governments
shall be entitled to an equitable share in the proceeds of the utilization and development of the
national wealth within their respective areas, in the manner provided by law, including sharing the
same with the inhabitants by way of direct benefits.”

The last paragraph of Section 285 of RA 7160 otherwise known as the Local Government
Code of 1991 says that “the financial requirements of barangays created by local government units
after the effectivity of this Code shall be the responsibility of the local government unit concerned.” It
‘excludes several barangays from their just share of the Internal Revenue Allotment (IRA) and seems
to negate the constitutional declaration embodied in the aforementioned provision of the Constitution.

This bill seeks to address the predicament of non-IRA barangays. It aims to enable them to
optimize the performance of their functions and administration, effectively and efficiently. The delivery
of basic social services will be enhanced by granting IRA to these basic political units thereby
providing them with much needed funds to support various programs for poverty alleviation of their
respective populace.

Such allocations can serve as an effective tool for the barangay leaders to implement positive
change to improve the lives of their constituents. Otherwise, continued exclusion will result in the
impairment of essential projects and limited delivery of public services.

There is therefore a compelling reason to institute a remedial legislative measure to correct
this lopsided distribution of funds among LGUs and establish a more equitable distribution of
allotments. Further, it,aims to put an end to the practice of some LGUs to create new barangays
without considering the financial capability of these barangays because under the present law they
are not entitled to receive an IRA.

This Representation sees it relevant to re-introduce this bill filed in the Fourteenth Congress by

Rep. Bernardo F. Pinol in order to avoid further financial deprivation of non-IRA barangays and
likewise accord them full autonomy.

In view of the foregoing, approval of this bill is urgently requested.

G. DEL ROSARIO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

65
HOUSE BILL NO.

Introduced by REP. ANTHONY G. DEL ROSARIO

AN ACT
REMOVING THE AUTHORITY OF THE SANGGUNIANG PANLALAWIGAN AND SANGGUNIANG
PANGLUNSOD TO CREATE BARANGAYS AND GRANTING INTERNAL REVENUE
ALLOTMENTS TO BARANGAYS CREATED BY SAID LOCAL SANGGUNIANS, AMENDING FOR
THE PURPOSE SECTIONS 6 AND 285 OF REPUBLIC ACT NO. 7160, AS AMENDED,
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 6 of Republic Act No. 7160 otherwise known as the Local Government
Code of 1991, as amended, is hereby further amended to read as follows:

“SECTION 6. Authority to Create Local Government Units. — A local government unit may
be created, divided, merged, abolished, or its boundaries substantially altered ONLY [either] by law
enacted by Congress in the case of a province, city, municipality, or any other political subdivision, for
by ordinances passed by the sangguniang panlalawigan or sangguniang panlungsod concerned in
the case of a barangay located within its territorial jurisdiction,] subject to such limitations and
requirements prescribed in this Code.”

SEC. 2. Section 285 of the Local Government Code of 1991, as amended, is hereby further
amended to read as follows:

“SECTION 285. Allotment of Internal Revenue Taxes. — The share of local government
units in the internal revenue allotment shall be allocated in the following manner:

(a) Provinces - Twenty-three percent (23%)

(b) Cities — Twenty-three percent (23%)
(c) Municipalities — Thirty-four percent (34%); and
(d) Barangays — Twenty percent (20%);

Provided, however, That the share of each province, city, and municipality shall be
determined on the basis of the following formula:

(a) Population — Fifty percent (50%)

(b) Land Area — Twenty- five percent (25%); and
(c) Equal Sharing — Twenty-five percent ( 25%):

Provided, further, That the share of each barangay with a population of not less than one
hundred inhabitants shall not be less than Eighty thousand pesos (P80,000.00) per annum


chargeable against the twenty percent (20%) share of the barangay from the internal revenue
allotment, and the balance to be allocated on the basis of the formula:

(a) On the first year of the effectivity of this Code:
(1) Population — forty percent (40%); and

(2) Equal Sharing — Sixty percent (60%)

(b) On the second year:
(1) Population — Fifty percent (50%); and
(2) Equal Sharing - Fifty percent (50%)

(c) On the third year, and thereafter:
(1) Population — Sixty percent (60%); and
(2) Equal Sharing — Forty percent ( 40%):

[Provided, finally, That the financial requirements of barangays created by local
government units after the effectivity of this Code shall be the responsibility of the local
government unit concerned.]

SEC. 3. All barangays created by the sangguniang panlalawigan and sangguniang panlungsod
pursuant to Section 6 of Republic Act No. 7160 otherwise known as the Local Government Code of
1991, as amended shall be entitled to an internal revenue allotment share in accordance with the
formula prescribed under Section 285 of the Code after the effectivity of this Act: Provided, however,
That barangays created by local government units which failed to meet the population requirement
under Section 386 of the Code shall not be entitled to the benefit under this Act.

SEC. 4. The Department of Finance (DOF), in coordination with the Department of Budget and
Management (DBM), Department of Interior and Local Government (DILG) and the leagues of local
government units shall issue the necessary rules and regulations within (60) days after the effectivity
of this Act.

SEC. 5. This Act shall take effect fifteen (15) days after its publication in at least two
newspapers of general circulation.

Approved,