FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
S. No. 973 
) 
) 
) 
.it' . Tf 
OffiCE >. ~;. 
.~~- "tt til !~'i 
Introduced by Senator Manuel "Lito" M. Lapid 
EXPLANATORY NOTE 
As an archipelago situated in the western rim of the Pacific Ocean and part 
of the circum-Pacific seismic belt, the Philippines is situated in the path of 
turbulent and destructive typhoons, storms, floods, drought, earthquake, vOlcanic 
eruption and landslides. Its coastline of 17,461 kilometers making it vulnerable to 
tsunamis and storm surges that endanger coastal communities. 
Natural disasters, like the above-mentioned, cause great loss of life and 
extensive damage to property and infrastructure. The macroeconomic impact of 
these catastrophies can be measured in terms of its effects on agricultural 
production; on industry and services, employment and inflation. In other words, 
the loss 'of resources due these un predicted catatrophies adversely affect the 
national economy. 
Depending on the extent of damage, the development 
process can be delayed or set back by years or a decade. 
It may be gleaned from Section 324, para. (d) of RA 7160 (The Local 
Government Code) that the unused or unutilized balance of the annual five 
percent (5%) sets aside for unforeseen calamities is reverted back to the 
unappropriated surplus of the general funds (Sec. 322, R. A. 7160) of the 
municipality. Thus, such reversion renders the unexpended balance available for 
re-apportionment at the pleasure of the sanggunian concerned. 
This bill seeks to amend a specific provision in R. A. 7160 by providing for 
a "Calamity Reserve Fund" to mitigate the effects of unprecedented calamities. 
The early passage of this bill is earnestly sought. 
MAN 
"LITO" M. LAPID 
Senator 


, 
FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHiLIPPINES 
First Regular Session 
SENATE 
S. No. 973 
) 
} 
) 
~r' 
-,Ot 
fJFFtCE '.,I: ":1 
_.'_ 
~~t ,I"~v 
1 0 JUL -8 All :24 
Introduced by Senator Manuel "Lito" M. Lapid 
AN ACT 
AMENDING PARAGRAPH (D), SECTION 324 OF REPUBLIC ACT NO. 
7160, 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. Paragraph (d), Section 324 of Republic Act No. 7160, otherwise 
known as the Local government Code of 1991 is hereby amended as follows: 
"Sec. 324. 
Budgetary Requirements. 
-
The 
budgets 
of local 
government units for any fiscal year shall comply with the following requirements: 
"XXX 
"(d) 
Five percent (5%) of the estimated revenue from regular sources 
shall be set aside as annual lump sum appropriation for unforeseen expenditures 
arising from the occurrence of calamities: 
Provided, however, That such 
appropriation shall be used only in the area, or portion thereof, of the local 
government unit or other areas [declared in state of calamity by the President] 
AFFECTED BY DISASTER OR CALAMITY AS DETERMINED BY THE LOCAL 
SANGGUNIAN CONCERNED: PROVIDED, THAT THE TWENTY PERCENT 
• 
(20%) OF THE UNEXPENDED BALANCE OF THE ANNUAL LUMP SUM 
APPROPRIATION FOR UNFORESEEN EXPENDITURES ARISING FROM THE 
OCCURRENCE 
OF 
CALAMITIES 
SHALL 
NOT 
REVERT 
TO 
THE 
UNAPPROPRIATED SURPLUS OF THE GENERAL FUND, BUT INSTEAD, 
1 


SHALL BE SET ASIDE AS A CALAMITY RESERVE FUND. SAID FUND TO 
BE USED TO AUGMENT THE ANNUAL CALAMITY FUND WHEN DEEMED 
NECESSARY." 
SEC. 2. 
Separability Clause. -
If for any reason any section or provision 
of this Act is declared unconstitutional, other provisions hereof which are not affected 
thereby shall continue to be in full force and effect. 
SEC. 3. 
Repealing Clause. - Any laws, decrees, or rules and regulations 
which are inconsistent with or contrary to the provisions of this Act are hereby amended 
or repealed. 
SEC. 4. 
Effectivity Clause. - This Act shall take effect upon its publication 
in at least two (2) national newspapers of general circulation. 
, 
Approved, 
2