, , 
'" 
SIXTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
Second Regular Session 
) 
'14 
OCT 28 P6 :21 
SENATE 
!{ECEiVEII BY: __ f-~-
S.B. No. 2439 
Introduced by Senator JOSEPH VICTOR G. EJERCITO 
AN ACT 
RATIONALIZING THE INCOME REQUIREMENTS FOR THE CREATION 
OF A MUNICIPALITY, THE DECLARATION OF HIGHLY-URBANIZED 
STATUS IN THE CASE OF COMPONENT CITIES AND THE CREATION 
OF A PROVINCE, AMENDING FOR THE PURPOSE SECTIONS 442 (a), 
452 (a), 453 and 461 (a) AND (e) OF REPUBLIC ACT NO. 7160, AS 
AMENDED, OTHERWISE KNOWN AS THE LOCAL GOVERNMENT 
CODE OF 1991 
EXPLANATORY NOTE 
Laws are enacted in order to respond to the need of the times. 
Such is the flexible nature of laws for where it any different, the needed 
effect would not be accomplished. 
In olden times, Romans applied substantial justice and enacted 
laws in order to respond accordingly. 
The Local Government Code is not immune from this flexibility. It 
has undergone amendments in its provisions in several ways that it 
cannot be accused of standing still. Short of saying, it has responded to 
the needs of the times. 
This amendment of the Local Government Code must be made 
because the effects of economic success are not limited to that which has 
a large square kilometer in area. 
Vibrant municipalities have sprung from the ground up which 
have not necessarily been limited by their land area and are thus 
needing recognition as a city, with all accompanying benefits thereto. 
In view of the foregoing, the passage of this measure is earnestly 
sought. 
• 
() b--' 
JOSEPH VICTOR G. EJERCITO 


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SIXTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
Second Regular Session 
) 
SENATE 
S.B. No. 
2439 
Introduced by Senator JOSEPH VICTOR G. EJERCITO 
AN ACT 
St~t1!~ it"' 
(OI{I~f llf tttf\ ~Nt'i"hlr~ 
'14 
OCT 28 P 6 :21 
RATIONALIZING THE INCOME REQUIREMENTS FOR THE CREATION 
OF A MUNICIPALITY, THE DECLARATION OF HIGHLY-URBANIZED 
STATUS IN THE CASE OF COMPONENT CITIES AND THE CREATION 
OF A PROVINCE, AMENDING FOR THE PURPOSE SECTIONS 442 (a), 
452 (a), 453 and 461 (a) AND (e) OF REPUBLIC ACT NO. 7160, AS 
AMENDED, 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 442 (a) of Republic Act 7160, as amended, otheIWise 
known as the Local Government Code of 1991, is hereby amended to 
read as follows: 
"SECTION 442. Requisites for Creation. -
(a) A 
municipality may be created if it has an average annual 
income, as certified by the provincial treasurer, of at least 
TWELVE MILLION FIVE HUNDRED THOUSAND PESOS 
(P12,500,000.00) for the last two (2) consecutive years 
based on the 2013 constant prices; a population of at least 
twenty-five thousand (25,000) inhabitants as certified by 
the National Statistics Office; and a contiguous territory of 
at least fifty (50) square kilometers as certified by the 
Lands Management Bureau: Provided, That the creation 
thereof shall not reduce the land area, population or 
income of the original municipality or municipalities at the 
time of said creation to less than the minimum 
requirements prescribed herein." 
xxx 
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SECTION 2. Section 452 (a) and 453 of the Local Government Code of 
1991, as amended, are amended to read as follows: 
"SECTION 452. Highly Urbanized Cities. - (a) Cities with a 
minimum population of two hundred thousand (200,000) 
inhabitants as certified by the National Statistics Office, 
and with A LOCALLY-GENERATED annual income FOR 


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THE LAST TWO (2) CONSECUTIVE YEARS of at least TWO 
HUNDRED Fifty Million Pesos (P250,000,000.00) based on 
2000 constant prices, as certified by the DEPARTMENT OF 
FINANCE, shall be classified as highly urbanized cities: 
PROVIDED, THAT THE ANNUAL AVERAGE INCOME 
SHALL INCLUDE THE INCOME ACCRUING TO THE 
GENERAL FUHND, BUT EXCLUDING THE INTERNAL 
REVENUE ALLOTMENT (IRA) SHARES, SPECIAL FUNDS, 
TRUST FUNDS AND NON-RECURRING INCOME." 
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"SECTION 453. Duty to Declare Highly Urbanized Status. -
It shall be the duty of the CONGRESS TO PASS A JOINT 
RESOLUTION to declare a city as highly urbanized within 
thirty (30) days after it shall have met the mlllimum 
requirements prescribed in the immediately preceding 
section, 
upon 
proper 
DETERMINATION 
therefor: 
PROVIDED, 
THAT 
THE 
DECLARATION 
SHALL 
BE 
RATIFIED in a plebiscite by the qualified voters OF THE 
PROVINCE IN WHICH THE CITY GEOGRAPHICALLY 
BELONGS." 
SECTION 3. Section 461 (a) and (c) of the Local Government Code of 
199.1, as amended, is amended to read as follows: 
Section 461. Requisites for Creation. - (a) A province may 
be created if it has an average LOCALLY-GENERATED 
annual income FOR THE LAST TWO (2) CONSECUTIVE 
YEARS, as certified by the Department of Finance, of not 
less than TWO HUNDRED million pesos (P200,000,000.00) 
based on YEAR 2000 constant prices and either of the 
following requisites: 
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(c) The average annual LOCALLY-GENERATED income 
shall include the income accruing to the general fund, 
exclusive of the INTERNAL REVENUE ALLOTMENT (IRA) 
SHARES, special funds, trust funds, transfers and non-
recurring income. 
SECTION 4. The Department of Interior and Local Government (DILG) 
shall issue the necessary rules and regulations' within sixty (60) days 
after the effectivity of this Act. 
SECTION 5. All laws, decrees, executive orders, rules and regulations, 
which are inconsistent with this Act, are hereby repealed, amended, or 
modified accordingly. 
SECTION 6. This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in a newspaper of general 
circulation. 
Approved,