Republic of the Philippines
HOUSEOF REPRESENTATIYES
Quezon City
EIGHTEENTH CONGRESS
Second Regular Session
HOUSE BILL NO.
INTRODUCED BY HONORABLE CHERYL P. DELOSO.MONTALLA
AN ACT
ALLOWING THE COIYVERSION OF A MUNICIPALITY
INTO A COMPONENT CITY IN A PROVINCE THAT DOES NOT HAVE AN
EXISTING COMPONENT CITY, AMENDING FOR THE PURPOSE
SECTION 450 OF RA7r60, AS AMENDED BY RA 9009,
OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OT 1991
EXPLANATORY NOTE
For a municipality to be converted into a city, the Local Government Code provides:
*SECTION 450. Requisites for Creation. - (a) A municipality or a cluster of barangays
may be converted into a component clty it has an average annual income, as certified by the
Departrnent of Finance, of at least Twenty million pesos (20,000,000.00) for the last two (2)
consecutive years based on 1991 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.
Provided, That, the creation thereof shall not reduce the land areq 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 are shall not apply where the city proposed to be created is
composed of one (1) or more island. 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 firnd,
exclusive of special funds, transfers, and non-recurring income."
Substantial differences do exist between amunicipality and acity. For one, there is a material
change in the political and economic rights of the local government unit when it is converted from
a municipality to a city and undoubtedly, these changes affect the people as well.r
As may be gleaned from the Local Government Code, the creation or conversion of a local
govemment unit is done mainly to help assure its economic viability. Such creation or conversion
is based on verified indicators:
I Miranda v. Aguirre,314 SCRA 603,610 (1999).
April 27, 2021
6:00 pm
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"SECTION 7. Creation and Conversion --- As a general rule, the creation of a local
govemment unit or its conversion from one level to another shall be based on verifiable indicators
or viability and projected capacity to provide services, to wit:
(a) Income. --- It must be sufficient, based on acceptable standards, to provide for all
essential govemment facilities and services and special functions commensurate with the size of
its population, as expected ofthe local govemment unit concemed;
(b) Population. -- It shall be determined as the total number of inhabitants within the
territorial jurisdiction of the local govemment unit concemed; and
(c) Land Area. --- It must be contiguous, unless it comprises two (2) or more islands or is
separated by a local govemment unit independent ofthe others; properly identified by metes and
bounds with technical descriptions; and sufficient to provide for such basic services and facilities
to meet the requirements of its populace.
Compliance with the foregoing indicators shall be attested to by the Departrnent ofFinance
(DOF), the National Statistics Office (NSO), and the Lands Management Bureau (LMB) of the
Department of Environment and Natural Resources (DENR).2
Based on the 2018 report of the Philippine Statistics Authority, there are thirty- two (32)
provinces without a component city that will benefit from this legislation. Of the qualified
provinces, sixteen (16) are in Luzon, six (6) in Visayas, and ten (10) in Mindanao. The case ofthe
Province ofZambales is peculiar in that Olongapo City, a chartered city, is situated geographically
in its periphery. Thus, the anticipated economic gains that the presence of Olongapo City can give
to the municipalities of the Province of Zambales is, at most, minimal particularly to the towns
north of its capital.
Having a component city is a catalyst for change and development in a province. Its
character complements each other and carries economic gains in adjacent municipalities. Having
at least one component city in a province is instrumental in boosting socio-economic development
in the area. It promotes commerce, improved delivery of services, tourism and altemative sources
of income to the communities. To function and become a city is more of a character rather than
just financial, population or land requirement. Even a small municipality can qualifo as a city
when it can perform and has the character and functions of a city. It can even excel further ifthe
qualified municipality is the center of commerce to neighboring towns, provides services and
maintains supply of goods."l
Capital towns are generally designated and perceived to be the seat of govemment and
at the same time the center of local hade or business of a province where usual day-to-day
commercial and state transactions occur. Automatically granting city status to these symbolic
representations, such as the capital, advances the LGU's stature in a nationwide scale.a
It is in this light that this bill is being frled and immediate passage ofthis bill is
sought
C
RYL P. DELOSO.MONTALLA
Representative
2nd District, Zarnbales
2 Section 7, Chapter 2, Book I, Local Govemment Code.
3 Ibid.
4 Explanatory Note of House Bill No. 302 t, authored by Hon. Wilter "Sharkee" Wee Palma II


Republic of the Philippines
HOUSEOF REPRESENTATTVES
Quezon City
EIGHTEENTH CONGRESS
Second Regular Session
HOUSE BILL NO.
INTRODUCED BY HONORABLE CHERYL P. DELOSO.MONTALLA
AI\ ACT
ALLOWING THE COIMERSION OT A MUNICIPALITY
INTO A COMPONENT CITY IN A PROVINCE THAT DOES NOT HAVE AN
EXISTING COMPONENT CITY, AMENDING T'OR THE PURPOSE
SECTTON 450 OF RA7160, AS AMENDED By RA 9009,
OTHER}YISE KNOWI\ 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 450 of Republic Act No. 7160 as amended by Republic Act No.
9009, otherwise known as the Local Government Code of 1991 is hereby flrrther amended to read
as follows:
"SECTION 450. Requisites for Creation. - (a) A municipality or cluster of barangays may
be converted into a component crty if it has a locally generated average 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] 2012 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
THE REQUISITES FOR CREATION PRESCRIBED HEREIN SHALL NOT
APPLY IT' THE }TUNICIPALITY BELONGS TO A PROVINCE THAT DOES NOT
HAVE AIY EXISTING COMPONENT CITY: PROWDED, THAT THE MUNICIPALITY
SHALL QUALIFY WITH THE REQUIREMENTS AIYD CHARACTER OF A CITY AS
PROYIDED T]NDER THIS BILL.
SECTION 2. Scope and Prioritizatior. - All provinces without an existing component
city shall be covered by this Act. The component city to be prioritized shall be selected only
among the respective province's capital town or frst (l$) class municipalities. Further, priorrty
shall be given to the municipality with the highest locally generated average annual income, as
certified by the Department of Finance.
SECTION 3. Requirements. - After determination of the candidate municipality, it shall
undergo compliance with the following requirements and characteristics of acity. The Department
of the Interior and Local Government (DILG) shall evaluate and issue the certificate of
compliance for purposes of this Act.
(a) Aside from the mandatory offices in its charter, at least 3 of the following local
government offices, including personnel, shall be established.
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DRRM Office
Local Economic and Investrnent Promotion Office
Tourism OfEce
Environment Offrce
(b) It shall submit at least 3 ofthe following development or management plans:
l0-Year Solid Waste Management Plan
Local Shelter Plan
Peace and Order and Public Safety Plan
Comprehensive Land Use Plan and/or Comprehensive Developmenl
Plan
Human Resource Management and Development Plan
Gender and Development Plan
(c) 
It shall establish at least 3 of the following infrastructures for evaluation:
Central Market
Unified PUV terminal
Solid Waste Facilities (Central MRF, MRF or MRS in barangays,
approved disposal facility/access to approved disposal facility)
Evacuation center
Road networks (paved roads)
Drug rehabilitation center and/or Special Drug Education Center
(d) It shall have at least 3 of the following economic characteristics similar to a city:
High business retention with an approved business and investment
incentive code
Has a cenhal business district
Business friendly
Average revenue growth for the last 3 years is positive
Local development ftrnd allocation is followed and is disbursed
High employment density compared to other municipalities in province
SECTION 4. Addilional Exemption. - All municipalities that will quali$ as potential
candidates shall be exempted from the Personnel Services Limitation upon effectivity ofthis Act.
Such exemption shall be effective for at most two (2) years or until a municipality within the
province shall have beenconverted into a city, whichever comes first.
If a candidate municipality qualifies and is subsequently converted into a city, the
exemption in this item shall apply for an additional three (3) years from the date of its conversion.
SECTION 5. Funding. - The Department of Budget and Management (DBM) shall
allocate funds for the fnst five (5) years the Internal Revenue Allotrnent (IRA) of the newly
established component cities. This allocation shall be an addition and separate from the IRA
of already existing cities so as to not drastically decrease theallocation for all cities.
SECTION 6. Effectivity. - This act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.
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Approved,