TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
25 JIJL -7 P1 57
SENATE
S. No.
228
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


TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE
S. No.
228
25 JIJL -7 P1 57
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 assemble
Section 1. Declaration of Policy. - It is hereby declared the policy of the State 
for the government to strengthen, and work for, full local autonomy guaranteed under 
Section 2, Article X of the Constitution 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.
Sec. 3. Definition of Terms. - For purposes of this Act:
(a) National Government shall refer to the entire machinery of the central 
government as distinguished from the different forms of local governments;


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(b) Interference in any form shall refer to any rule or regulation in the form of 
memorandum, circular, order, resolution, guideline or any other issuance that impede, 
prevent, disturb or obstruct the activities or the conduct of the business or contractuai 
reiations of LGUs, or those that enter into the iocai concerns, duties or functions of 
LGUs;
(c) Local Government Units or LGUs shaii refer to the territorial and political 
subdivisions of the Phiiippines established by or in accordance with Section 1, 
Articie X of the Constitution;
(d) National Tax Allotment shaii refer to the just share of LGUs in the national 
taxes as provided under Section 6, Articie X of the Constitution;
(e) 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, Articie X of the 
Constitution.
Sec. 4. Effect. - Notwithstanding any other provisions of law to the contrary, 
any rule or regulation in the form of memoranda, circuiar, order, resolution, guideline, 
or any other issuance issued or promuigated by agencies of the National Government 
in vioiation of this Act shaii be rendered void and without effect. Furthermore, any 
officiai or employee of the National Government found to be responsible for such 
issuance or promuigation by a court of competent jurisdiction under this Act shaii be 
removed from office.
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Sec. 5. Separability Clause. - If any part or provision of this Act shaii be held
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unconstitutional or invalid, other provisions hereof which are not affected hereby shall 
continue to be in fuli force and effect.
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Sec. 6. Repealing Clause. - Ail laws, presidential decrees, executive orders, 
ruies, and reguiations or parts thereof which are inconsistent with the provisions of 
this Act are hereby repeaied or modified accordingly.
Sec. 7. Effectivity. - This Act shaii take effect fifteen (15) days after its 
publication in the Official Gazette or at ieast two (2) newspapers of generai circulation.
Approved,