NINETEENTH CONGRESS OF THE 
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REPUBLIC OF THE PHILIPPINES 
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First Regular Session 
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SENATE
S. No. _ 51
tHEjS1
BILLS & (INDEX
Introduced by Senator FRANCIS G. ESCUDERO
AN ACT
PROHIBITING ANY FORM OF INTERFERENCE BY NATIONAL GOVERNMENT 
AGENCIES WITH THE USE OF THE NATIONAL TAX ALLOTMENT AND 
LOCALLY GENERATED REVENUES OF LOCAL GOVERNMENT UNITS
EXPLANATORY NOTE
The imposition by national government agencies (NGAs) of a wide assortment 
of rules and regulations on LGUs has effectively Impinged on the autonomy 
supposedly granted to them under the 1987 Constitution and the Local Government 
Code of 1991. This rampant use of executive issuances has continually deprived LGUs 
of the opportunity to manage their own affairs and to develop their own mechanisms 
to address the concerns of their constituents.
This bill seeks to carve a path towards a more genuine local autonomy by 
prohibiting NGAs from issuing or promulgating rules and regulations that would 
interfere with the utilization of National Tax Allotment and locally-generated 
revenues, rendering the same void and without effect. It also penalizes with removal 
from office those responsible NGA officials and employees who failed to heed to such 
prohibition. Through these interventions, it is hoped that LGUs would have enough 
leeway to perform their mandates without excessive restrictions imposed by the 
national government.
Ultimately, this bill seeks to realize the objectives of the Local Government 
Code by allowing LGUs to enjoy genuine and meaningful local autonomy, enabling 
them to realize their fullest development as self-reliant communities, and making 
them more effective partners in the attainment of national goals.
In line with these intentions, the passage of the bill is hereby sought.
FRANCIS G. ESCUDERO


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NINETEENTH CONGRESS OF THE 
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REPUBLIC OF THE PHILIPPINES 
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First Regular Session 
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SENATE
S. No. 51
BILLS SMNDEX
Introduced by Senator FRANCIS G. ESCUDERO
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AN ACT
PROHIBITING ANY FORM OF INTERFERENCE BY NATIONAL GOVERNMENT 
AGENCIES WITH THE USE OF THE NATIONAL TAX ALLOTMENT AND 
LOCALLY GENERATED REVENUES OF LOCAL GOVERNMENT UNITS
Be it enacted by the Senate and House of Representatives of the Philippines 
in Congress assembled:
Section 1. Declaration of Policy. — It is hereby declared the policy of the State 
for the government to strengthen, and work for, full local autonomy1 as a means to 
ensure local fiscal governance and administration of Local Government Units (LGUs) 
without any interference from the National Government (NG), especially with funds 
constitutionally allocated to and solely generated by them. While the President may 
have general supervision over LGUs, such power must be used to enhance, not to 
frustrate, self-governance of every territorial and political subdivision of the State.
Sec. 2. Prohibition. — Notwithstanding any other provisions of law to the 
contrary, all agencies of the NG shall not issue or promulgate any rules or regulations 
in the form of memoranda, circulars, orders, resolutions, guidelines or any other 
issuances in the performance of their respective statutory functions and duties that 
shall interfere, in any form, with the use of the National Tax Allotment and locally 
generated revenues of LGUs.
1 Sec. 2, Art. X of the Constitution. The territorial and political subdivisions shall enjoy local autonomy.


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Sec. 3. Definition of Terms. - For purposes of this Act:
National Government shall refer to the entire machinery of the central 
government as distinguished from the different forms of local governments.
Interference in any form shall mean any rules or regulations in the form of 
memoranda, circulars, orders, resolutions, guidelines or any other issuances that 
impede, prevent, disturb or obstruct the activities or the conduct of the business or 
contractual relations of LGUs, or those that enter into the local concerns, duties or 
functions of LGUs.
Local Government Units shall refer to the territorial and political subdivisions 
of the Philippines established by or in accordance with Section 1, Article X of the 
Constitution.2
National Tax Allotment shall refer to the just share of LGUs in the national 
taxes as provided under Section 6, Article X of the Constitution.3
Locally Generated Funds shall refer to any and all funds solely realized, 
produced or gained by LGUs and that as provided for in Section 5, Article X of the 
Constitution.4
Sec. 4. Effect — Notwithstanding any other provisions of law to the contrary, 
any rules or regulations In the form of memoranda, circulars, orders, resolutions.
2 The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities, 
municipalities, and barangays.
3 Sec. 6. Local government units shall have a just share, as determined by law, in the national taxes 
which shall be automatically released to them.
4 Each local government unit shall have the power to create its own sources of revenues and to levy 
taxes, fees, and charges subject to such guidelines and limitations as the Congress may provide, 
consistent with the basic policy of local autonomy. Such taxes, fees, and charges shall accrue exclusively 
to the local governments.


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guidelines or any other issuances issued or promulgated by agencies of the National 
Government In violation of this Act shall be rendered void and without effect. 
Furthermore, any official or employee of the National Government found to be 
responsible for such issuance or promulgation by a court of competent jurisdiction 
under this Act shall be removed from office.
Sec. 5. Separability Clause. - If any part or provision of this Act shall be held 
unconstitutional or invalid, other provisions hereof which are not affected hereby shall 
continue to be in full force and effect.
Sec. 6. Repealing Clause - All laws, presidential decrees, executive orders, 
rules, and regulations or parts thereof which are Inconsistent with the provisions of 
this Act are hereby repealed or modified accordingly.
Sec. 7. Effectivity Clause. -This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or at least two (2) newspapers of general 
circulation.
Approved,