TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
25 JUL -7 P1 :58
S. No.
SENATE
229
Introduced by Senator Francis G. Escudero
AN ACT
TO FURTHER STRENGTHEN LOCAL AUTONOMY THROUGH A MORE 
RATIONALIZED SYSTEM OF DECENTRALIZATION AMENDING FOR THE 
PURPOSE REPUBLIC ACT NUMBER 7160, AS AMENDED, OTHERWISE 
KNOWN AS THE ”LOCAL GOVERNMENT CODE OF 1991"
EXPLANATORY NOTE
The Constitution speaks of local autonomy in five (5) occasions1, all couched in 
mandatory terms. Concomitantly, as a Constitutional mandate, local government units 
are allowed to make independent administrative determinations on their own and 
theirs alone. Hence, any regulations in the exercise of local autonomy must not, in 
any manner or form, result in neither restriction nor control.
The cases of Pimentel, Jr. vs. Aguirre (GR No. 132998, 19 July 2000) and 
Mandanas vs. Ochoa (GR No. 199802,03 July 2018) clarified and defined, respectively, 
the Constitutional grant of local autonomy as specifically provided for in Section 2, 
Article X of the Constitution in the following manner:
"In Ganzon i/. Court of Appeals, we said that local autonomy 
signified 'a more responsive and accountable local government structure 
instituted through a system of decentralization.' The grant of autonomy 
is intended to 'break up the monopoly of the national government over 
the affairs of local governments, xxx not xxx to end the relation of
partnership and interdependence between the centra! administration
and local government units xxx. Paradoxically, local governments are 
still subject to regulation, however limited, for the purpose of enhancing
self-government
1In Section 25, Article II; and Sections 2, 5, 11, and 14, Article X.


Under the Philippine concept of local autonomy, the national 
government has not completely relinquished all Its powers over local 
governments, including autonomous regions. Only administrative 
powers over local affairs are delegated to political subdivisions. The
purpose of the delegation is to make governance more directly 
responsive and effective at the local levels. In turn, economic, political 
and social development at the smaller political units are expected to 
propel social and economic growth and development. But to enable the 
country to develop as a whole, the programs and policies effected locally 
must be Integrated and coordinated towards a common national goal.
Thus, poHcy-setting for the entire country still Hes In the President and 
Congress. As we stated in Magtajas v. Pryce Properties Corp., Inc., 
municipal governments are still agents of the national government
The constitutional mandate to ensure local autonomy refers to 
decentralization. In Its broad or general sense, decentralization has two 
forms in the Philippine setting, namely: the decentralization of power 
and the decentralization of administration. The decentralization of power 
involves the abdication of political power In favor of the autonomous 
LGUs as to grant them the freedom to chart their own destinies and to 
shape their futures with minimum intervention from the centra! 
government This amounts to self-immolation because the autonomous 
LGUs thereby become accountable not to the centra! authorities but to 
their constituencies. On the other hand, the decentralization of 
administration occurs when the centra! government delegates
administrative powers to the LGUs as the means of broadening the base
of governmental powers and of making the LGUs more responsive and
accountable in the process, and thereby ensure their fullest
development as self-reliant communities and more effective partners in
the pursuit of the goals of national development and social progress.
This form of decentralization further relieves the centra! government of
the burden of managing local affairs so that it can concentrate on
national concerns (Underscoring supplied)."
As ruled in the above cited cases and in Viliafuerte vs. Robredo (GR No. 195390, 
10 December 2014), the grant of local autonomy is not synonymous to local 
government units' sovereignty within the state but emphasizes interdependence 
between the nationai and local government agencies. Such that while regulations may 
be validly imposed on local government units, such regulations are but geared toward 
"enhancing self-governance."
Consequently, decentralization, which is inherent in iocal autonomy, should not 
be rendered useless and without effect by the necessity of prior approval from national 
government agencies. To the contrary, local governments to be autonomous must be 
able to act promptly and effectively In the exigencies of public service sans any undue 
restrictions.


Section 4, Article X of the Constitution prescribes the exercise of mere 
supervision, not control, by the President over iocai government units. Mondano vs. 
Silvosa (GR No. L-7708, 30 May 1955) contrasted the President's power of supervision 
over local government units with that of the President's power of controi over ali 
officials in the nationai government, thus:
"In administrative iaw, supervision means overseeing or the 
power or authority of an officer to see that subordinate officers perform 
their duties. If the latter faii or negiect to fulfill them, the former may 
take such action or step as prescribed by iaw to make them perform 
their duties. Control, on the other hand, means the power of an officer 
to alter or modify or nullify or set aside what a subordinate officer ha[s] 
done in the performance of his duties and to substitute the judgment of 
the former for that of the latter."
Otherwise stated, "supervisory power, when contrasted with control, is the 
power of mere oversight over an inferior body; it does not include any restraining 
authority over such body."
In view of the foregoing, this bili seeks to amend Repubiic Act No. 7160, as 
amended, or the Locai Government Code of 1991, taking into consideration its more 
than three (3) decade implementation and the way it has been interpreted and applied 
as a Constitutionally prescribed and mandated policy.
For local autonomy to be made effective, it must amount to effective authority 
for local government units to decide matters concerning locai affairs. And although it 
may not be absolute, the parameters limiting its exercise must not give the national 
government the power to restrict the actions of local government units or to substitute 
its judgment with their own.
Respectfuliy submitted.
FRANCIS G. ESCUDERO


TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
25 JUL-7 pi 58
SENATE
S. No.
229
Introduced by Senator Francis G. Escudero
AN ACT
TO FURTHER STRENGTHEN LOCAL AUTONOMY THROUGH A MORE 
RATIONALIZED SYSTEM OF DECENTRALIZATION AMENDING FOR THE 
PURPOSE REPUBLIC ACT NUMBER 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 assemble
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Section 1. Declaration of State Policies and Principles. - It is hereby declared a
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policy of the State to ensure local autonomy of its territorial and political subdivisions
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consistent with decentralization inherent in local autonomy thereby ensuring local
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administrative determination without undue restrictions.
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Sec. 2. Interpretation. - The provisions of this Act shall be interpreted in favor
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of local autonomy and to ensure the independent administrative determination of local
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government units free from any control or regulation of national agencies such that
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the national government is not given the power to restrain or substitute the judgement
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of local government units with its own.
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Sec. 3. Section 3 of Republic Act No. 7160 is hereby amended to read as
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follows:
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"Sec. 3. Operative Principles of Decentralization. - The
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formulation and implementation of policies and measures on local
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autonomy shall be guided by the following operative principles:


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"(a) There shall be an effective allocation among the 
different locai government units of their respective powers, 
functions, responsibilities, and resources INDEPENDENT OF 
ANY RESTRICTIONS FROM NATIONAL AGENCIES;
"(b) There shall be established in every local government 
unit an INDEPENDENT, accountable, efficient, and dynamic 
organizational structure and operating mechanism that will meet 
the priority needs and service requirements of its communities;
"(c) Subject to civil service law, rules and regulations AS
GUIDELINES AND WITHOUT RESTRICTING 
ADMINISTRATIVE DETERMINATION, local officials and 
employees paid wholly or mainly from local funds shall be 
appointed or removed, according to merit and fitness, by the 
appropriate appointing authority;
"(d) The vesting of duty, responsibility, and accountability 
in local government units shall be accompanied with provision for 
reasonably adequate resources to INDEPENDENTLY AND 
EFFECTIVELY discharge their powers and [effectively] carry out 
their functions: hence, they shall have the power to create and 
broaden their own sources of revenue and the right to a just 
share in national taxes and an equitable share in the proceeds of 
the utilization and development of the national wealth within their 
respective areas;
"x X x;
"(g) The capabilities of local government units, especially 
the municipalities and barangays, shall be enhanced by providing 
them with opportunities to participate actively In the 
implementation of national programs and projects AND THE
MEANS AND CAPABILITIES TO INDEPENDENTLY CARRY 
ON THEIR RESPECTIVE PROGRAMS AND PROJECTS;


X X X.
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Sec. 4. Section 76 of Republic Act No. 7160 is hereby amended to read
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as follows:
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"Sec. 76. Organizational Structure and Staffing Pattern. - Every 
local government unit shall INDEPENDENTLY design and implement 
its own organizational structure and staffing pattern taking into 
consideration its service requirements and financial capability, subject 
to the minimum standards and guidelines prescribed FOR THE 
PURPOSE by the Civil Service Commission WITHOUT RESTRICTING 
THE ADMINISTRATIVE DETERMINATION OF LOCAL 
GOVERNMENT UNITS."
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Sec 5. Section 288 of Republic Act No. 7160 is hereby amended to read
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as follows:
"Sec. 288. Rules and Regulations. - The Secretary of Finance, in 
consultation with the Secretary of Budget and Management AND THE
LOCAL GOVERNMENT UNITS THROUGH THEIR RESPECTIVE 
LEAGUES, shall promulgate the necessary rules and regulations for a 
simplified disbursement scheme designed for the speedy and effective 
enforcement of the provisions of this Chapter WITHOUT 
RESTRICTING THE ADMINISTRATIVE DETERMINATION OF 
LOCAL GOVERNMENT UNITS."
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Sec. 6. Section 325 of Republic Act No. 7160 is hereby amended to read
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as follows:
"Sec. 325. General Limitations. - The use of the provincial, city, 
and municipal funds shall be subject to the following limitations:
"(a) X X x;
"x X x;
"(d) In cases of abolition of positions and the creation of new 
ones resulting from the abolition of existing positions in the career


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service, such abolition or creation shall be made in accordance with
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pertinent provisions of this code and the civil service law, rules and
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regulations AS GUIDELINES WITHOUT RESTRICTING THE
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ADMINISTRATIVE DETERMINATION OF LOCAL GOVERNMENT
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UNITS;
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"X X X.
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Sec. 7. Section 326 of Republic Act No. 7160 is hereby amended to read
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as follows:
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"Sec. 326. [Review of] Appropriation Ordinances of Provinces,
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Highiy-Urbanized Cities, 
Independent Component Cities, and
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Municipalities within the Metropolitan Manila Area. - [The Department
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of Budget and Management shall review] Ordinances authorizing the
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annual or supplemental appropriations of provinces, highly-urbanized
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cities, independent component cities, and municipalities within the
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Metropolitan Manila Area SHALL BE IN ACCORDANCE WITH THE
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GUIDELINES SET IN THE BUDGET OPERATIONS MANUAL AS
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PROVIDED FOR IN SECTION 354 OF THIS CODE WITHOUT
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NEED OF ANY REVIEW [in accordance with the-immediately
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succeeding Section]."
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Sec. 8. Section 354 of Republic Act No. 7160 is hereby amended to read
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as follows:
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"Sec. 354. Administrative Issuances; Budget Operations Manual.
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- The Secretary of Budget and Management AND THE LOCAL
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GOVERNMENT UNITS THROUGH THEIR RESPECTIVE LEAGUES
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jointly with the Chairman of the Commission on Audit shall, [within one
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(1) year from the offoctivity of this Code] IF SO REQUESTED BY
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LOCAL GOVERNMENT UNITS THROUGH THEIR RESPECTIVE
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LEAGUES, promulgate a Budget Operations Manual for local
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government units to improve and systematize methods, techniques, and
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procedures employed In budget preparation, authorization, execution.


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and accountability WITHOUT RESTRICTING THE 
ADMINISTRATIVE DETERMINATION OF LOCAL GOVERNMENT 
UNITS."
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Sec. 9. Section 383 of Republic Act No. 7160 is hereby amended to read
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as follows:
"Sec. 383. Implementing Rules and Regulations. - The Chairman 
of the Commission on Audit AND THE LOCAL GOVERNMENT UNITS 
THROUGH THEIR RESPECTIVE LEAGUES shail promuigate the rules 
and regulations necessary to effectively implement the provisions of this 
Tide, inciuding requirements as to testing, inspection, and 
standardization of supply and property WITHOUT RESTRICTING THE 
ADMINISTRATIVE DETERMINATION OF LOCAL GOVERNMENT 
UNITS."
Sec. 10. Separability Clause. - If any provision of this Act or the appiication of 
such provision to any person or circumstance is declared invalid, the remainder of the 
Act or the application of such provision to other persons or circumstances shall not be 
affected thereby.
Sec. 11. Repealing Clause. - All laws, decrees, administrative issuances, rules 
and regulations, and orders or parts thereof inconsistent with this Act are deemed 
repeaied or modified accordingly.
Sec. 12. Effectivity. - This Act shali take effect after fifteen (15) days following 
the completion of its publication in the Official Gazette or in two (2) national 
newspapers of general circulation, whichever comes first.
Approved,