14& Congress of the Republic 
) 
of the Philippines 
) 
1st Regular Session 
1 
s. No. .I J 6 I 
~ 
Introduced by Senator Aquilino Q. Pimentel, Jr. 
EXPLANATORY NOTE 
R.A. 7160, otherwise known as the Local Government Code of 1991, is 
considered by many social and economic scientists as the "key that unlocks vast 
opportunities in the countryside." 
The Code has provided operational meaning to decentralization and 
devolution. 
It is a giant step in our country's journey towards full 
democratization. Like many great pieces of legislation, however, the law has to 
be assessed and amended to address new needs and recommend solutions to the 
burgeoning problems of Iocal governance. Local government officials and 
advocates of local autonomy clamor for changes in the law to address matters 
like: (a) the inadequacy of the internal revenue shares of the local government 
units to meet the budgetary requirements of the devolved functions, programs 
and projects; (b) the continued lack of budgetary support from the national 
government for the full implementation of devolved tertiary health services; (c) 
the interference of national government in personnel and fiscal management of 
the local government units; (d) the need to further broaden the tax base of the 
local government units and {e) the time frame for the revision of real property 
assessment. 
In response to these concerns, amendments to the Code are hereby 
introduced with the view of strengthening local autonomy and providing 
dynamism in the implementation of the devolved functions, programs, projects, 
and services. The development objectives of the national government should be 
viewed within the context of local autonomy and decentralization. 
The highlights of the proposed amendments are as follows: 
BOOK ONE -GENERAL PRINCIPLES 
Consultation with local government units on the planning and 
implementation of national programs and projects is emphasized and made 
mandatory; 
Local government units shall now enjoy greater fiscal autonomy; 
e 


8 
e 
8 
8 
e 
m 
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8 
Income based on locally generated revenue is made a basis for the creation of 
a province, city, or a municipality; 
The sangguniang panlalawigan, sangguniang padungsod, and sangguniang 
bayan are aufhorized to declare public holidays in their respective 
jurisdictions; 
The Bureau of Fire Protection is now devolved to local government units; 
The following services, programs and functions are also devolved to local 
government units: 
a. Implementation of forest projects, and the execution of laws 
designed to protect the environment; 
b. The construction, supervision, and management of nationally 
funded infrastructure projects; 
c. Processing and approval of subdivision and condominium 
plans, including the issuance of licenses and the grant of 
authority to sell subdivision lots and condominium units; 
d. Issuance of environment compliance and clearance certificates; 
and 
e. Regulation and setting of public and private utility vehicle fees 
within the province. 
Local government units are given eighteen (18) months within which to 
prepare and enact a comprehensive land use plan and zoning ordinance after 
agriculturd land within their jurisdiction is reclassified into residential, 
commercia1 or industrial land; 
The Barangay shall have their own Pre-qualification, Bids and Awards 
Committees (PBACs); 
A local executive may issue a temporary appointment or designation of an 
officer-in-charge for a period not exceeding sixty (60) days; 
Teaching and non-teaching staffs of the DECS are given non-taxable monthly 
fixed allowances chargeable against the Special Education Fund (SEF) of the 
different local government units concerned. 
BOOK TWO - LOCAL TAXATION 
AND FISCAL MATTERS 
Government officials who fail to comply with requirements imposed by law 
upon them in the transfer of land are now subject to sanctions; 
The gross income of banks and other financial institutions are subject to local 
government taxation; 


Local government units now have a share in the tax imposed by the province 
on the business of printing and publication. 
Franchise tax coverage is expanded; 
The barangay in municipalities are now empowered to impose business taxes 
on stores or retailers with gross sales of up to five hundred thousand pesos 
(P500,OOO) and up to one million pesos (Pl,OOO,OOO) gross sales in the case of 
the barangay in the cities and the municipalities in Metro Manila. 
For assessment purposes, the fair market value of a residential building to be 
exempted from real property taxes is raised from one hundred seventy five 
thousand (P175,OOO) to five hundred thousand (P500,OOO) pesos. 
The revision of real property assessment will be undertaken every six (6) 
years instead of every three (3) years. 
The shares of the local government units are now based on the collection of 
national taxes, and their aIlotments are increased to fifty percent (50%) 
starting fiscal year 2001; 
The shares in the proceeds of the utilization and deveIopment of national 
wealth is increased from 40% to 60% and retained by the collecting agency. 
These shall be remitted to the local government units concerned on a 
quarterly basis; 
Availment by local government units of any of the modes of credit financing 
shall not be subject to interference by any national government agency, the 
same being a curtailment of the exercise of LGU fiscal 
* 
* 
autonomy; 
0 Heavy equipment and machineries imported by local water districts 
registered under R.A. 6938 are exempted from the payment of duties, taxes, 
fees and charges; 
Development projects implemented under the build-operate-and-transfer and 
other financing schemes may receive incentives; 
Local government units are required to inform their constituents of LGU loan 
applications, indicating the amount, the project to be financed, the 
implementation timetable, terms of payment, and the security to be used for 
such loans; 
The local government units are now allowed to maintain depository accounts 
with any private commercial bank licensed by the Bangko Sintral ng Pilipinas 
(BSP). 
BOOK THREE - LOCAL GOVERNMENT UNITS 
Barangay sanggunian members are now entitled to retirement benefits; 
* Barangay tanod brigades or their equivalent are entitled to monthly 
allowances; 


Income requirement for the creation of a province, city, or municipality is 
increased and shall be based on locally generated income; 
Local executives shail now appoint treasurers and assistant treasurers; 
Provinces, cities, and first class municipalities are now required to appoint 
and hire environment and natural resources officers, cooperative officers, 
buildings and grounds officers, and human resources development officers. 
Fire protection officers for cities and municipalities are required to be 
appointed; 
Fishing cooperatives shall be allowed to operate commercial fishing vessels in 
municipal waters; 
The power to issue environmental compliance and clearance certificates in 
certain industries is now vested in governors and city and municipal mayors; 
BOOK FOUR - MISCELLANEOUS AND FINAL PROVISIONS 
0 Penal sanction is now imposed for the violation of provisions of the Local 
Government Code. 
This bill is designed to strengthen local government units, assuring the 
growth and development of self-reliant and dynamic communities throughout 
the country. 
The approval of this bill is urgently requested. 
@/Aw& 
A UILINO . PIMENTEL, 
w JR. 


S E N A T E  
#-- 
~~~~~~V~~ BY : - 
- 
SB. No. 13161 
' 
Introduced by Senator Aquilino Q .  Pimentel, J r .  
AN ACT 
TO STRENGTHEN LOCAL GOVERNMENT UNITS BY AMENDING CERTAIN 
PROVISIONS OF REPUBLIC ACT. NO. 7160, OTHERWISE KNOWN AS THE 
LOCAL GOVERNMENT CODE OF 1991 
BOOK ONE - GENERAL PROVISIONS 
SECTION 1. Section 2 of Republic Act No. 7160, otherwise known as the Local 
Government Code of 1991, hereinafter referred to as the Code, is hereby amended to 
read as follows: 
Section 2. Declaration of Policy. - 
(a) It is hereby declared [the] A policy of the State TO ENSURE that [the] ITS 
territorial and political subdivisions [of the State shall] enjoy genuine and meaningful 
local autonomy to enable them to attain [their fullest] FULL development as self-reliant 
communities and [make them more] BECOME effective partners in the attainment of 
national goals. 
(B) Towards this end, the State shall provide for a more responsive and 
accountable local government structure instituted through a system of decentralization 
[whereby] WHERE local government units [shall be given] ARE GRANTED more 
powers, authority, responsibilities [,I and resources. The process of decentralization 
shall proceed from the [National] CENTRAL Government to the local government units. 
[(b)] (C) It is also [the] A policy of the State to [ensure the accountability of 18 
local government units through the institution ofj INSTITUTE effective 


mechanisms [of] FOR recall, initiative and referendum, TO ENSURE THAT LOCAL 
ELECTIVE OFFICIALS ARE MORE ACCOUNTABLE TO THE PEOPLE. 
[(c)] (D) It is likewise [the] A policy of the State to require all [national] 
CENTRAL GOVERNMENT agencies and offices to conduct [periodic consultations] 
PUBLIC HEARINGS AND CONSULT with THE 
[appropriate] PROPER local 
government units, non-governmental and people’s organizations, and other concerned 
sectors of the community, before any [project or] program OR PROJECT is APPROVED 
FOR implement[ed]ATION BY CENTRAL GOVERNMENT AGENCIES, OFFICES OR 
GOVERNMENTOWNED OR CONTROLLED CORPORATIONS, in their respective 
jurisdictions. 
(E) THE STATE SHALL EMPOWER LOCAL GOVERNMENT UNITS TO 
REGULATE OR PROHIBIT GAMBLING AND OTHER ACTIVITIES THAT MAY 
ADVERSELY AFFECT THE MORALS, WELL-BEING AND GOOD ORDER OF 
INHABITANTS IN THEIR COMMUNITIES. 
SECTION 2. Section 3 of the Code is hereby amended to read as follows: 
Section 3. Operative Principles of Decentralization. - The formulation and 
by the 
implementation of policies and measures on local autonomy shall be guided 
Mowing operative principles: 
(a) xxx 
(b) xxx 
(c) [Subject to civil service law, rules and regulations,] [IILocal officials and 
employees WHO ARE paid wholly [or mainly] from local funds, 
shall, UNLESS 
OTHERWISE PROVIDED UNDER THIS CODE, be appointed [or removed] BY THE 
GOVERNOR, MAYOR, OR PUNONG BARANGAY OR BY THE VICE-GOVERNOR OR 
VICE-MAYOR AS THE CASE MAY BE according to merit and fitness, AND MAY 
ONLY BE REMOVED FOR CAUSE, SUBJECT TO CIVIL SERVICE LAW, RULES AND 
REGULATIONS [by the appropriate appointing authority]; 
(d) xxx 
(e) xxx 
2 


(9 xxx 
(9) xxx 
(h) xxx 
(i) Local government units shall share with the [National] CENTRAL Government 
the responsibility [in the management and maintenance ofl TO MAINTAIN SOUND 
ecological balance [within] IN their RESPECTIVE territorial [al]ES burisdiction], subject 
to the provisions of this Code [and national policies]; 
0) xxx 
(k) The realization of local autonomy shall be facilitated through improved 
coordination of [national] CENTRAL government [policies and] programs AND 
POLICIES, and TO extenD[sion of] adequate technical and material assistance to less 
developed and deserving local government units; 
(I) The [participation of the] private sector [in local governance, particularly, in 
the delivery of basic services] shall be encouraged TO PARTICIPATE AS PARTNERS 
IN LOCAL GOVERNANCE, ESPECIALLY IN THE DELIVERY OF BASIC SERVICES, 
to ensure the [viability] EFFECTIVENESS of local autonomy as an [alternative strategy] 
INSTRUMENT for sustainable development; [and] 
(m) The [National] CENTRAL Government shall ensure that decentralization 
contributes to the continuing improvement of the performance of local government units 
and the quality of [community] life IN THEIR COMMUNITIES; AND 
(N) LOCAL GOVERNMENT UNITS SHALL ENJOY FISCAL AUTONOMY, AND 
SHALL EXERCISE PRIMARY AUTHORITY TO ALLOCATE, UTILIZE AND DISPOSE 
OF FUNDS GENERATED BY THEM OR ALLOTTED TO THEM, SUBJECT TO THE 
PROVISIONS OF THIS CODE AND OTHER APPLICABLE LAWS. 
SECTION 3. Section 7 of the Code is hereby amended to read as follows: 
Section 7. Creation and Conversion. - As a general rule, the creation of 
a local government unit or its conversion from one level to another level shall be based 
on verifiable indicators of viability and projected capacity to provide services, to wit: 
(a) Income - MONEY RECEIVED FROM REGULAR LOCAL REVENUE 
3 


SOURCES, SHARE FROM NATIONAL TAXES, AND OTHER NON-REGULAR LOCAL 
REVENUE. FOR THE PURPOSE OF CREATION OR CONVERSION OF A 
LOCAL 
GOVERNMENT UNIT, [It] INCOME [must be sufficient, based on acceptable standards, 
to provide for all essential government facilities and services and special functions 
commensurate with the size of its population, as expected of the local government unit 
concerned.] SHALL BE BASED ONLY ON REVENUES GENERATED LOCALLY; 
(b) Population. - It shall be determined as the total number of inhabitants within 
territorial jurisdiction of the local government unit concerned; [and] 
(c) Land Area. - It must be continuous, unless it comprises two (2) or more 
islands or is separated by a local government unit independent of the 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[.]; AND 
(D) TAX COLLECTION EFFICIENCY - IN CASE OF A CONVERSION OF A 
MUNICIPALITY INTO A COMPONENT OR INDEPENDENT CITY OR FROM 
COMPONENT CITY AND INDEPENDENT COMPONENT CITY INTO A HIGHLY 
URBANIZED CITY, THE LOCAL GOVERNMENT UNIT CONCERNED MUST HAVE 
AN AVERAGE OF, AT LEAST, EIGHTYPERCENT (80%) REAL PROPERTY TAX 
COLLECTION EFFICIENCY AND NINETY PER CENT (90%) COLLECTION OF 
9THER LOCAL TAXES EVERY YEAR IN THE THREE (3) IMMEDIATELY 
PRECEDING YEARS. 
TAX COLLECTION EFFICIENCY IS MEASURED AS THE 
RATIO OF ACTUAL TAX REVENUES COLLECTED TO THE AMOUNT OF TAXES 
THAT ARE DUE AND COLLECTIBLE. 
[Compliance with the foregoing indicators shall be attested to by the Department 
of Finance (DOF), the National Statistics Office (NSO), and the Lands Management 
Pureau (LMB) of the Department of Environment and Natural Resources (DENR).] THE 
FOLLOWING CENTRAL GOVERNMENT AGENClES SHALL ATTEST TO THE 
VIABILITY OF A LOCAL GOVERNMENT UNIT UNDER THE FOREGOING 
INDICATORS, TO WIT: 
(1) THE DEPARTMENT OF FINANCE (DOF), AS TO INCOME 
AND THE COMMISSION ON AUDIT (COA) AS TO TAX COLLECTION 
4 


EFFICIENCY, IN THE CASE OF THE CREATION OF A PROVINCE OR 
THE CONVERSION OF A METROPOLITAN MANILA MUNICIPALITY 
INTO A CITY. IN THE CASE OF THE CREATION OF A MUNICIPALITY, 
CITY OR CONVERSION OF AN INDEPENDENT OR COMPONENT CITY 
INTO HIGHLY URBANIZED STATUS, THE PROVINCIAL TREASURER 
CONCERNED SHALL CERTIFY AS TO THE INCOME AND TAX 
COLLECTION EFFICIENCY OF THE LOCAL GOVERNMENT UNIT. 
(2) THE NATIONAL STATISTICS OFFICE (NSO), AS TO 
POPULATION. 
(3) THE LAND MANAGEMENT BUREAU (LMB) AND BUREAU OF 
FISHERIES AND AQUATIC RESOURCES (BFAR), AS TO LAND AREA. 
SECTION 4. Section 13 of the Code is hereby amended to read as follows: 
Section 13. Naming [olj' Local Government Units, [and] Public Places, 
Streets and Structures, AND DECLARING LOCAL PUBLIC HOLIDAYS. - (a) The 
sangguniang panlalawigan, [may] in consultation with the [Philippine Historical 
Commission (PHC)] NATIONAL HISTORICAL INSTITUTE (NHI) 
AND 
LOCAL 
HISTORICAL ASSOCIATIONS, IF ANY, MAY NAME OR change the name of the 
following within its territorial jurisdiction: 
(1) Component cities and municipalities, upon [the] recommendation of the 
sanggunian concerned; 
(2) xxx 
(3) xxx 
(4) xxx 
(5) xxx 
(b) The sanggunian[s] of highly urbanized cities and [ofj component cities, 
whose charters prohibit their voters from voting for provincial elective 
officials, hereinafter referred to [in this Code] as independent component cities,[may,] in 
consultation with the [Philippine Historical Commission] NATIONAL HISTORICAL 
5 


INSTITUTE, AND LOCAL HISTORICAL ASSOCIATIONS, IF ANY, MAY NAME OR 
+ange the name of the following within its territorial jurisdiction: 
(1) City barangays, upon [the] recommendation of the sangguniang barangay 
concerned; 
(1) xxx 
(2)xxx 
(3)xxx 
(4)xxx 
(c) The sanggunian[s] of component cities and municipalities, [ may ] in 
consultation with the [Philippine Historical Commission] NATIONAL HISTORICAL 
INSTITUTE, AND LOCAL HISTORICAL ASSOCIATIONS, IF ANY, MAY NAME OR 
change the name of the following within its territorial jurisdiction: 
(1) 
City and municipal barangays, upon [the] recommendation of the 
sangguniang barangay concerned; 
(2) 
xxx 
(3) 
xxx 
(4) 
xxx 
(5 
)xxx 
(d) xxx 
(e) xxx 
(0 xxx 
(9) xxx 
THE SANGGUNIANG PANLALAWIGAN, PANLUNGSOD OR BAYAN, UPON 
CONSULTATION WITH THE NATIONAL HISTORICAL INSTITUTE AND LOCAL 
!-IISTORICAL ASSOCIATIONS, IF ANY, AND THE DEPARTMENT OF LABOR AND 
EMPLOYMENT (DOLE), THROUGH AN ORDINANCE DULY APPROVED BY THREE- 
FOURTHS (3/4) VOTE OF ALL THEIR RESPECTIVE MEMBERS, MAY DECLARE 
ONE WORKING 
OR 
NON WORKING 
SPECIAL 
PUBLIC 
HOLIDAY TO 
COMMEMORATE SIGNIFICANT HISTORIC EVENTS IN THE LOCAL GOVERNMENT 
UNIT CONCERNED 
6 


SECTION 5. Section 14 of the Code is hereby amended to read as follows: 
Section 14. Beginning of Corporate Existence. - [When a new local 
government unit is created, its] THE corporate existence OF A NEWLY CREATED 
LOCAL GOVERNMENT UNIT shall commence upon the [election] EFFECTIVITY OF 
THE LAW OR ORDINANCE CREATING IT, [and qualification of its chief executive and 
a majority of the members of its sanggunian,] unless [some] other [time] BASIS is [fixed 
therefor by the law or ordinance creating it] PROVIDED THEREIN. 
SECTION 6. Section 17 (a) (b) (1) (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), 2(i), (ii), 
(iii), (iv), (v), (vi), (vii), (viii), (x), (xi), (xii), (xiii) (b), 3 (i), (iii), (iv), (v), (vi),(vii), (viii), (x), 4 
(i), (ii) (c), (e), (h), (i) (j) of the same Code are hereby amended to read as follows: 
Section 17. [Basic] Services and Facilifies. - (a) Local government units shall 
endeavor to be self-reliant and shall continue exercising the powers and discharging the 
duties and functions currently vested upon them. They shall also 
the 
POWERS, functions and responsibilities of [national] CENTRAL GOVERNMENT 
agencies and offices devolved to them pursuant to this Code. Local government units 
shall likewise exercise such other powers and discharge such other functions and 
responsibilities as are necessary, appropriate, or incidental to efficient and effective 
[provision of 
the basic services and facilities enumerated herein] LOCAL 
GOVERNANCE. 
discharge 
(b) Such [basic] services and facilities include, but are not limited to, the 
following: 
(1) For a Barangay: 
(i) Agricultural support services which include THE DISTRIBUTION 
OF planting materials [distribution system] and operation AND 
MAINTENANCE of [farm produce] collection and buying stations FOR 
FARM PRODUCTS; 
7 


(ii) Health and [social welfare services which include maintenance 
of barangay health center, and] day-care centers, AND OTHER SOCIAL 
WELFARE 
SERVICES; 
(iii) [Services and facilities related to general hygiene and] 
COMMUNITY ACTIONS FOR CLEANLINESS, sanitation, beautification 
and SYSTEMATIC COLLECTION AND DISPOSAL OF [solid] wastes 
[collection]; 
(iv) [Maintenance of katarungang pambarangay] MEDIATION AND 
CONCILIATION AND 
ARBITRATION 
SERVICES 
UNDER 
THE 
BARANGAY JUSTICE SYSTEM; 
(v) 
CONSTRUCTION, 
Maintenance, 
REPAIR 
AND 
REHABILITATION of barangay roads [and], bridges, and water supply 
systems. 
THE FOLLOWING ARE BARANGAY ROADS: 
1. 
2. 
3. 
THOSE CONSTRUCTED BY THE BARANGAY OUT OF ITS OWN 
FUNDS; 
THOSE CONSTRUCTED BY HIGHER LOCAL GOVERNMENT 
UNITS OR CENTRAL GOVERNMENT AND TURNED OVER TO 
THE BARANGAY; AND 
THOSE 
CONSTRUCTED 
BY 
PRIVATE 
PERSONS 
AS 
PREVIOUSLY APPROVED BY THE SANGGUNIAN CONCERNED 
AND ARE OFFICIALLY DONATED TO THE BARANGAY 
CONCERNED. FUNDS FOR THE MAINTENANCE, REPAIR AND 
REHABILITATION 
OF 
BARANGAY 
ROADS 
SHALL 
BE 
DEVOLVED TO THE BARANGAY CONCERNED: 
(vi) [Infrastructure facilities such as m] Multi-purpose hall, multi-purpose 
pavement, plaza, sports center and other similar INFRASTRUCTURE 
facilities; 
(vii) Information and reading centers; and 
(viii) Satellite or public markets, where viable. 
8 


(2) For a Municipality: 
(i) Extension and on-site research services and facilities related to agriculture 
INCLUDING ANIMAL HEALTH, and fishery activities which include dispersal of 
livestock and poultry, fingerlings, and other seeding materials for aquaculture; palay, 
corn, and vegetable seed farms; medicinal plant 
gardens; fruit tree, coconut, and 
other kinds of seedling nurseries[;] AND demonstration farms; quality control of copra 
and improvement and development of local distribution channels, preferably through 
Fooperatives; inter-barangay irrigation systems; water and soil resource utilization and 
conservation projects; and enforcement of fishery laws AND ORDINANCES in 
municipal waters [including] ESPECIALLY the conservation of mangroves; 
(ii) [Pursuant to national policies and subject to supervision, control and review of 
the DENR, J [iJlmplementation of community-based forestry projects which include 
integrated social forestry programs and similar projects; management and control of 
mmmunal forests with an area not exceeding fifty (50) square kilometers; establishment 
of tree parks, greenbelts, and similar forest development projects. 
(iii) [Subject to the provisions of Title Five Book I of this Code,] [h]Health services 
which include [the] implementation of programs and projects on primary health care, 
maternal and child care, and communicable and non communicable disease control 
services; access to secondary and tertiary health services; purchase of medicines, 
medical supplies[,] and equipment needed to carry out the services herein enumerated, 
SUBJECT TO THE PROVISIONS OF TITLE FIVE, BOOK I OF THIS CODE; 
(iv) Social welfare services which include programs and projects on child, 
[and] youth AND SPECIAL CHILDREN welfare, family and community welfare, women's 
welfare, welfare of the elderly and disabled persons; community-based rehabilitation 
programs for vagrants, beggars, street children, scavengers, juvenile delinquents, and 
victims of drug abuse; livelihood and other pro-poor projects; nutrition [services;], and 
family planning services; 
(v) Information services [which include] ON investment[s] and job [placement 
information systems] OPPORTUNITIES, tax and market[ing] information [systems], and 
[maintenance of a] public librar[y]lES AND OTHER SIMILAR FACILITIES; 


(vi) [Solid] [w]Waste disposal systems or environmental management systems 
and services or facilities related to general hygiene and sanitation; 
(vii) Municipal buildings, cuJturaJ centers, publjc [parks including] AND freedom 
parks, playgrounds, [and] sports facilities and equipment, and other similar [facilities] 
SERVICES; 
(viii) Infrastructure facilities intended primarily to service the needs of the 
residents [of] WITHIN the municipality and which are funded [out ofJ BY CENTRAL, 
PROVINCIAL OR municipal [funds] GOVERNMENT BUDGETS SHALL INCLUDE 
[including, but not limited to,] municipal roads and bridges; [school buildings, and other 
facilities for] public elementary and secondary school[s] BUILDINGS AND SIMILAR 
STRUCTURES, AND PUBLIC LIBRARIES; CRISES CENTERS, clinics, health centers 
and other [health] facilities necessary to carry out health services; communal irrigation, 
small water impounding [projects] and [other] similar projects; fish ports AND 
LNHARVES; artesian wells, spring development, rainwater collectors and water supply 
systems; RECLAMATION, seawall[s], dike[s], drainage [and], sewerage, and flood 
control PROJECTS; traffic signals [and], road signs[;], and similar facilities[;]. THE 
FOLLOWING ARE MUNICIPAL ROADS: 
1. 
THOSE CONSTRUCTED BY THE MUNICIPALITY OUT OF ITS 
OWN FUNDS; 
2. 
THOSE CONSTRUCTED BY HIGHER LOCAL GOVERNMENT 
UNITS OR CENTRAL GOVERNMENT AND TURNED OVER TO 
THE MUNICIPALITY; AND 
3. 
THOSE 
CONSTRUCTED 
BY 
PRIVATE 
PERSONS 
AS 
PREVIOUSLY APPROVED BY THE SANGGUNIAN CONCERNED 
AND ARE OFFICIALLY DONATED TO OR TAKEN OVER BY THE 
MUNICIPALITY CONCERNED; 
(ix) xxx 
(x) Public cemeter[y]lES. 
(xi) Tourism facilities and tourist attractions, including [the] acquisition of 
LANDS AND equipment FOR THE PURPOSE; regulation and supervision of business 


concessions RELATED TO THE TOURISM INDUSTRY[;] and security [services] for 
such SERVICES and facilities; [and] 
(xii) Sites for police [and fire] stations and substations and [the] municipal 
jails; 
(XIII) FIRE PROTECTION SERVICE; AND 
(XIV) UPGRADING AND MODERNIZATION OF TAX INFORMATION 
AND COLLECTION SERVICES AND OTHER SYSTEMS AND PROCESSES 
THROUGH THE USE OF INFORMATION TECHNOLOGY AND OTHER MEANS; 
(3) For a Province: 
(i) Agricultural extension and on-site research services and facilities which 
include the prevention and control of plant and animal pests and diseases; dairy farms, 
livestock markets, animal breeding stations, and artificial insemination centers; and 
assistance in the organization of farmers' and fishermen's cooperatives and other 
collective organizations, as well as IN the transfer of appropriate technology. 
(ii) xxx 
(iii) Pursuant to national policies, [and subject to supervision, control and 
review of the DENR,] enforcement of forestry laws [limited to community-based forestry 
projects], pollution control law, small-scale mining law, and other laws on the protection 
of the environment; [and] mini-hydro electric projects for local purposes; MONITOR 
AND EVALUATE THE IMPLEMENTATION OF PROGRAMS AND PROJECTS ON 
ENVIRONMENT AND NATURAL RESOURCES; 
(iv) [Subject to the provisions of Title Five, Book I of this Code,] [h]Health 
services which include THE ESTABLISHMENT, OPERATION AND MAINTENANCE OF 
hospitals and other tertiary health services; PROCUREMENT OF DRUGS, 
MEDICINES, HOSPITAL SUPPLIES AND EQUIPMENT, MEDICINES, MEDICAMENTS 
AND EQUIPMENT; AND INTEGRATION AND MONITORING OF HEALTH-RELATED 
PROJECTS AND SERVICES IN THE PROVINCE, SUBJECT TO THE PROVISIONS 
OF TITLE FIVE, BOOK I OF THIS CODE. 
THE PROCUREMENT OF DRUGS, MEDICINES, HOSPITAL SUPPLIES 
AND EQUIPMENT, MEDICINES, MEDICAMENTS AND EQUIPMENT BY THE 


CENTRAL 
GOVERNMENT 
FOR 
DISTRIBUTION TO 
PROVINCES, CITIES, 
MUNICIPALITIES AND BARANGAY SHALL BE DONE ONLY AFTER DUE 
CONSULTATION WITH THE LEAGUES OF PROVINCES, CITIES, MUNICIPALITIES 
AND BARANGAY, RESPECTIVELY; 
PURCHASE 
MEDICINES 
AND 
DRUGS 
BY 
THE 
CENTRAL 
GOVERNMENT SHALL BE DEVOLVED TO THE LOCAL GOVERNMENT UNIT. 
(v) Social welfare services which include programs and projects on rebel 
returnees and evacuees; relief operations, and population development [services]; 
(vi) Provincial buildings, provincial jails, freedom parks and other assembly 
areas, and [other] similar facilities; 
(vii) PUBLIC WORKS AND [I]infrastructure [facilities] PROJECTS 
intended to service the needs of the residents [ofl WITHIN the province [which are] 
WHETHER funded [out of] BY CENTRAL OR provincial [funds] GOVERNMENT 
BUDGETS including [, but not limited to,] provincial roads, NATIONAL ROADS, [and] 
bridges, PORTS, inter-municipal [waterworks] WATER SYSTEMS, drainage, sewerage, 
flood control, and irrigation systems, INTER-MUNICIPAL reclamation projects and 
other similar facilities. THE FOLLOWING ARE PROVINCIAL ROADS: 
1, 
THOSE CONSTRUCTED BY THE PROVINCE OUT OF ITS OWN 
FUNDS; 
THOSE CONSTRUCTED BY CENTRAL GOVERNMENT OR BY 
THE COMPONENT CITY, MUNICIPALITY OR BARANGAY AND 
TURNED OVER TO THE PROVINCE; AND 
2. 
3. 
THOSE 
CONSTRUCTED 
BY 
PRIVATE 
PERSONS 
AS 
PREVIOUSLY APPROVED BY THE SANGGUNIAN CONCERNED 
AND ARE OFFICIALLY DONATED TO OR TAKEN OVER BY THE 
PROVINCE CONCERNED; 
(viii) [Programs and projects for] [IjLow-cost housing and other mass 
dwelling PROGRAMS AND PROJECTS, except those funded by the Social Security 
System (SSS), Government Service Insurance System (GSIS), and the Home 
Development Mutual Fund (HDMF): Provided, That national funds for these programs 


and projects shall be equitably allocated among the regions in proportion to the ratio of 
the homeless to the population; 
(ix) xxx 
(x) Upgrading and modernization of tax information and collection services 
AND OTHER SYSTEMS AND PROCESSES 'through the use of [computer hardware 
and software] INFORMATION TECHNOLOGY and other means; 
(xi) [Inter-municipal] [t]Telecommunications AND TRANSPORTATION 
services AND FACILITIES, subject to national policy guidelines; and 
(xii) Xxx 
(4) For a City: 
All the services and facilities [of the municipality and province] WHICH 
PROVINCES AND MUNICIPALITIES MAY DELIVER AND PROVIDE SHALL ALSO 
APPLY TO CITIES[, and in addition thereto, the following:] 
[(i) Adequate communications and transportation facilities;] 
[(ii) Support for education, police and fire services and facilities;] 
(c) [Notwithstanding the provisions of] UNLESS OTHERWISE 
PROVIDEDUNDER subsection (b) hereof, public works and infrastructure projects and 
other facilities, programs and services funded by the [National] CENTRAL Government 
under the General Appropriations Act, other special laws, pertinent executive orders 
m d  those wholly or partially funded from foreign sources, are not [covered under this 
Section] DEVOLVED TO THE LOCAL GOVERNMENT UNITS, except in those cases 
where the local government unit concerned is duly designated as the implementing 
agency for such projects, facilities, programs and services. 
(d) xxx 
(e) [National] CENTRAL GOVERNMENT agencies or offices concerned 
shall 
devolve to local government units the POWERS AND responsibilit[yJlES TO DELIVER 
AND PROVIDE [for the provision of] basic AND OTHER services and facilities, AND 
THE FUNCTIONS AND PROGRAMS enumerated in this Section, within six (6) months 
after the effectivity of this Code, AS AMENDED. 


(f) xxx 
(9) xxx 
(h) Regional, PROVINCIAL, CITY, MUNICIPAL AND DISTRICT offices of 
[national] CENTRAL GOVERNMENT agencies or offices whose functions are devolved 
to local government units as provided herein shall be phased out within one (1) year 
from 
the approval of this Code, AS AMENDED. Said [national] CENTRAL GOVERNMENT 
agencies and offices may establish such field units as may be necessary for monitoring 
purposes and providing technical assistance to local government units. The properties, 
equipment, and other assets of these regional offices shall be distributed to the local 
government units in the region in accordance with the rules and regulations issued by 
the Oversight Committee created under this Code. 
(i) The devolution contemplated in this Code shall include the transfer to 
local government units of the FUNDS, records, equipment, and other assets and 
personnel of [national] CENTRAL GOVERNMENT agencies and offices corresponding 
to the devolved powers, functions, and responsibilities. 
Personnel of said [national] CENTRAL GOVERNMENT agencies or 
offices shall be absorbed by the local government units to which they belong or in 
whose areas they are assigned to the extent that it is administratively viable as 
Wermined by the said oversight committee: Provided, That the rights accorded to such 
personnel pursuant to civil service law, rules and regulations shall not be impaired: 
Provided, further, That regional directors who are career executive service officers and 
other officers of similar rank in the said regional offices who cannot be absorbed by the 
local government unit shall be retained by the [National] CENTRAL Government, 
without any diminution of rank, salary or tenure. 
(J) THE CENTRAL GOVERNMENT, REGIONAL, PROVINCIAL, CITY, 
MUNICIPAL AND 
DISTRICT OFFICES WHOSE FUNCTIONS HAVE BEEN 
DEVOLVED OR PHASED OUT AS HEREIN PROVIDED, SHALL SUBMIT A REPORT 
TO CONGRESS REGARDING THE STATUS OF 
THEIR 
COMPLIANCE 
WITH 
THE DEVOLUTION HEREIN MANDATED ON OR BEFORE JULY OF EVERY 


CALENDAR YEAR. 
SUCH A REPORT SHALL BE USED BY CONGRESS TO 
DETERMINE THEIR RESPECTIVE BUDGETS. 
[(j)] (K) To ensure 
the active participation of the private sector in local 
governance, local government units may, by ordinance, sell, lease, encumber, or 
otherwise dispose of public economic enterprises owned by them on their propriety 
capacity. 
SECTION 7. Section 20, Paragraphs (a) and (c) of the Code is hereby 
amended to read as follows: 
Section 20. Reclassification of Lands. - 
(a) A city or municipality, [may, through an] BY ordinance passed by the 
sanggunian after conducting public hearings for the purpose, MAY authorize the 
reclassification of agricultural lands and provide for the manner of their utilization or 
disposition in the following cases: (1) when the land ceases to be economically 
feasible and sound for agricultural purposes as determined by the Department of 
Agriculture [or] AND (2) where the land shall have substantially greater economic value 
for residential, commercial, or industrial purposes, as determined by the sanggunian 
concerned: 
Provided, That such reclassification shall be limited to the following 
percentage of the total agricultural land area at the time of the passage of [the 
xdinance] THIS CODE, AS AMENDED. 
(1) 
For highly urbanized and independent component cities, fifteen 
percent (15%); 
For component cities and first to third class municipalities, ten 
percent (10%); and 
For fourth to sixth class municipalities, five percent (5%): Provided, 
further, That agricultural lands distributed to agrarian reform 
beneficiaries pursuant to Republic Act Numbered Sixty-six hundred 
fifty-seven 
(R.A. 
No. 
6657), 
otherwise 
known 
as 
"The 
Comprehensive Agrarian Reform Law", shall not be affected by the 
(2) 
(3) 


said reclassification and the conversion of such lands into other 
purposes shall be governed by Section 65 of said Act. 
(b) xxx 
(c) NOTWITHSTANDING ANY LAW TO THE CONTRARY, [The] local 
government units shall [, in conformity with existing laws, continue to prepare] 
RECLASSIFY 
THEIR 
RESPECTIVE AGRICULTURAL 
LAND AREAS 
INTO 
INDUSTRIAL, COMMERCIAL AND RESIDENTIAL AND TO BE INCLUDED IN their 
respective comprehensive land use plans enacted through zoning ordinances WITHIN 
EIGHTEEN (18) MONTHS FROM APPROVAL OF THIS CODE, AS AMENDED, [which 
shall be the primary and dominant basis for the future use of land resources,] AND MAY 
BE REVIEWED EVERY FIVE YEARS THEREAFTER; [Provided, That] [t]The 
requirements for food 
production, human settlements, and 
industrial AND 
COMMERCIAL expansion shall be taken into consideration in the preparation of such 
plans. 
(d)xxx 
(e)xxx 
SECTION 8. Section 25 of the Code is hereby amended to read as follows: 
Section 25. [NationaQ CENTRAL GOVERNMENT Supervision over 
!oca/ Government Units. - (a) Consistent with the basic policy on local autonomy, the 
President shall exercise general supervision over local government units to ensure that 
their acts are within the scope of their prescribed powers and functions. 
The President shall exercise supervisory authority over provinces, highly 
urbanized cities, independent component cities; through the province with respect to 
component cities and municipalities; and through the city and municipality with respect 
$1 barangays. 
(b) [National] CENTRAL GOVERNMENT agencies and offices with project 
implementation functions shall coordinate with one another and with the local 
government units concerned in the discharge of these functions. They shall ensure the 
participation of local government units both in the planning and implementation of said 


national projects. FOR THIS PURPOSE ALL CENTRAL GOVERNMENT AGENCIES 
SHALL FURNISH COPIES OF THEIR NATIONAL PROGRAMS, PROJECTS AND 
PLANS TO THE LOCAL GOVERNMENT UNIT CONCERNED WITHIN WHOSE 
BOUNDARIES THE PROGRAMS, PROJECTS AND 
PLANS ARE TO 
BE 
IMPLEMENTED. 
(c) xxx 
(d) xxx 
SECTION 9. Section 26 of the Code is hereby amended to read as follows: 
Section 26. Duty of [Nationag CENTRAL Government Agencies in the 
Maintenance of Ecological Balance. - 
It shall be the duty of every [national] 
CENTRAL GOVERNMENT agency or government-owned or -controlled corporation 
authorizing or involved in the planning and implementation of any project or program 
that may cause pollution, climatic change, depletion of non renewable resources, loss of 
cropland, rangeland, or forest cover, and extinction of animal or plant species, to HOLD 
ACTUAL CONSULTATIONS with the local government units, non-governmental 
organizations, and other sectors concerned; and TO explain the goals and objectives of 
the project or program, its impact upon the people and the community in terms of 
environmental or ecological balance, and the measures that will be undertaken to 
prevent or minimize the adverse effects thereof. 
THE CONSULTATION REQUIREMENT AS 
PROVIDED HEREIN 
APPLIES ALSO TO PRIVATE FIRMS OR ENTITIES. 
SECTION 10. Section 27 of this Code is hereby amended to read as follows: 
Section 27. Prior Consultations Required. - No project or program OF 
THE CENTRAL GOVERNMENT AGENCIES OR PRIVATE SECTOR THAT 
iRlTlCALLY IMPACTS ON THE ENVIRONMENT shall be implemented [by 
government authorities unless] WITHOUT the consultations [mentionedIPROVIDED 
FOR in Sections 2 [(c)](D), [and] 26 hereof [are complied with], and THE prior approval 
OF THE MAJORITY OF THE MEMBERS IN A RESOLUTION of the sanggunian 
concerned [is obtained]; Provided, That occupants in areas where such projects are to 


be implemented shall not be evicted unless appropriate relocation sites have been 
provided, in accordance with the provisions of the Constitution AND EXISTING LAWS, 
SECTION 11. Section 28 of this Code is hereby amended to read as follows: 
Section 28. Powers of Local Chief Executives over the units of the 
Philippine National Police. - The extent of operational supervision and control of local 
chief executives over the police force, and jail management personnel assigned in their 
respective jurisdictions shall be governed by the provisions of Republic Act Numbered 
Sixty-nine seventy-five (R.A. No. 6975), otherwise known as "The Department of the 
Interior and Local Government Act of 1990", and the rules AS AMENDED and 
regulations issued pursuant thereto. 
SECTION 12. Section 37 of the same Code is hereby amended to read as 
follows: 
Section 37. 
Local Pre-qualification, Bids and Awards Committee 
(Local PSAC). - (a) There is hereby created a [local] pre-qualification, bids and awards 
committee in every province, city, [and] municipality, AND BARANGAY [which] THAT 
shall be primarily responsible for the conduct of pre qualification of contractors, 
bidding, evaluation of bids, and [the] recommendation of awards concerning local 
infrastructure projects. 
The governor, or the city or municipal mayor, shall act as [the] chairman 
OF THE COMMITTEE, with the following as members: 
(1) 
concerned; 
(2) 
The chairman of the appropriations committee of the sanggunian 
A representative of the minority party in the sanggunian concerned, 
!f any, or if there be none, one (1) chosen by said sanggunian from among its members; 
(3) 
The local treasurer; 
(4) 
Two (2) representatives of non-governmental organizations that are 
represented in the local development council concerned, to be 
chosen by the organizations themselves; [and] 


(5) 
[Any] A PRACTICING certified public accountant from the private 
sector, to be designated by the local chapter of the Philippine 
Institute of Certified Public Accountants, if any; AND 
THE LEGAL OFFICER OF THE LOCAL GOVERNMENT UNIT 
CONCERNED, IF ANY. 
(6) 
THE PUNONG BARANGAY SHALL ACT AS CHAIRMAN OF THE 
BARANGAY PRE-QUALIFICATION, BIDS AND AWARDS COMMITTEE, WITH THE 
FOLLOWING AS MEMBERS: 
(1) 
A REPRESENTATIVE OF THE SANGGUNIANG BARANGAY 
CHOSEN FROM AMONG THE MEMBERS; 
(2) THE BARANGAY TREASURER; AND 
(3) ONE (1) REPRESENTATIVE CHOSEN BY THE NON 
GOVERNMENTAL OR PEOPLES ORGANIZATION FROM AMONG ITS 
REPRESENTATIVES IN THE BARANGAY DEVELOPMENT COUNCIL. 
Representatives of the Commission on Audit shall observe the proceedings of 
such A committee and THE COMMISSION ON AUDIT shall certify THEREAFTER that 
the rules and procedures for pre-qualification, bids and awards have been complied 
with. 
THE PROCEEDINGS OF THE BARANGAY COMMITTEE SHALL BE 
OBSERVED AND CERTIFIED TO BY THE MUNICIPAL TREASURER, AND/OR BY 
THE AUTHORIZED REPRESENTATIVES OF THE LATTER, RESPECTIVELY. THE 
FOLLOWING CONTRACTS INVOLVING INFRASTRUCTURE PROJECTS ARE 
SUBJECT TO PUBLIC BIDDING, TO WIT: 
(1) 
THOSE AMOUNTING TO TEN MILLION (PlO,OOO,OOO) PESOS 
OR MORE IN THE CASE OF PROVINCES, HIGHLY URBANIZED 
AND 
INDEPENDENT 
COMPONENT 
CITIES 
AND 
MUNICIPALITIES WITHIN THE METROPOLITAN MANILA AREA; 
THOSE AMOUNTING TO FIVE MILLION (P5,000,000.00) PESOS 
OR MORE IN THE CASE OF COMPONENT CITIES AND FIRST 
CLASS MUNICIPALITIES; 
(2) 


(3) 
THOSE AMOUNTING TO THREE MILLION (P3,000,000) PESOS 
OR MORE IN THE CASE OF 
SECOND TO SIXTH CLASS 
MUNICIPALITIES, AND 
ANY AMOUNT IN THE CASE OF THE BARANGAY. 
(4) 
LOCAL GOVERNMENT UNITS SHALL NOT SPLIT CONTRACTS FOR 
INFRASTRUCTURE 
PROJECTS 
OR 
FOR 
THE 
ACQUISITION 
AND 
PROCUREMENT OF SUPPLIES, GOODS, EQUIPMENT AND SERVICES 
SUBJECT OF THE ABOVE PROVISIONS FOR THE PURPOSE OF EVADING 
THE MAXIMUM LIMITATIONS SPECIFIED THEREIN. 
(b) Xxx 
(c) xxx 
SECTION 13. Section 38 of the Code is hereby 'amended as follows: 
Section 38. Local Technical Commitfee. - (a) There is hereby created a 
local technical committee in every province, city and municipality to provide technical 
assistance to the local pre-qualification, bids and awards committees. 
It shall be 
composed of the provincial, city or municipal engineer, the local planning and 
development coordinator, and such other officials designated by the local pre- 
qualification, bids and awards committee. 
THE CITY OR MUNICIPAL TECHNICAL COMMITTEE SHALL PROVIDE 
TECHNICAL ASSISTANCE TO THE BARANGAY PRE- QUALIFICATION, BIDS AND 
AWARDS COMMITTEE IN THE LOCAL GOVERNMENT UNIT CONCERNED, UPON 
REQUEST OF THE LATTER. 
(b) The chairman of the local technical committee shall be designated by the 
local pre-qualification, bids and awards committee and shall attend its meeting in order 
'13 present the reports and recommendations of the local technical committee. 
SECTION 14. Section 46 of the Code is hereby 'amended as follows: 
Section 46. 
Temporary Vacancy in the Office of the Local Chief 
OR city or municipal mayor [, or punong 
Executive. - (a) 
When the governor, 
20 


barangay] is temporarily incapacitated to perform his duties for physical or legal reasons 
such as, but not limited to, leave of absence, travel abroad, and suspension from office, 
i:ie vice-governor, city or municipal vice-mayor [or the highest ranking sangguniang 
barangay member] shall automatically exercise the powers and perform the duties 
and functions of the local chief executive concerned, except the power to appoint, 
suspend, or dismiss employees which can only be exercised if the period of temporary 
incapacity exceeds thirty (30) days. 
IF A TEMPORARY VACANCY OCCURS IN THE OFFICE OF THE GOVERNOR 
ciR MAYOR, VICE-GOVERNOR OR VICE-MAYOR, THE HIGHEST RANKING 
SANGGUNIAN MEMBER OR, IN THE CASE OF HIS/HER INABILITY, THE SECOND 
HIGHEST RANKING SANGGUNIAN MEMBER SHALL BECOME THE GOVERNOR, 
VICE-GOVERNOR, MAYOR OR VICE MAYOR, AS THE CASE MAY BE. 
SUBSEQUENT VACANCIES 
IN THE 
SAID 
OFFICE 
SHALL 
BE 
FILLED 
AUTOMATICALLY BY THE OTHER SANGGUNIAN MEMBERS ACCORDING TO 
THEIR RANKING AS DEFINED HEREIN. 
IN CASE OF TEMPORARY INCAPACITY OF THE PUNONG BARANGAY TO 
PERFORM HIS/HER DUTIES FOR PHYSICAL OR LEGAL REASONS, SUCH AS BUT 
NOT LIMITED TO, LEAVE OF ABSENCE, TRAVEL ABROAD, AND SUSPENSION 
FROM OFFICE, THE HIGHEST RANKING SANGGUNIAN MEMBER SHALL 
4UTOMATICALLY ASSUME THE POWERS, DUTIES AND FUNCTIONS OF THE 
PUNONG BARANGAY, EXCEPT THE POWER TO APPOINT, SUSPEND, OR 
DISMISS EMPLOYEES WHICH CAN ONLY BE EXERCISED IF THE PERIOD OF 
TEMPORARY 
INCAPACITY EXCEEDS THIRTY (30) 
DAYS. SUBSEQUENT 
VACANCIES IN THE SAID OFFICE SHALL BE FILLED AUTOMATICALLY BY THE 
OTHER SANGGUNIAN MEMBERS ACCORDING TO THEIR RANKING AS DEFINED 
FEREIN. 
SECTION 15. Section 47 of the Code is hereby amended to read as follows: 
Section 47. Approval of Leave of Absence. - (a) Leaves of absence of 
local elective officials shall be approved as follows: 


(1) Leaves of absence of the governor and the mayor of a highly 
urbanized 
city or and independent component city shall be approved by the President or 
his duly authorized representative; 
(2) Leaves of absence of a vice-governor or a city or municipal vice-mayor 
shall be approved by the local chief executive concerned[: Provided, That]. [t]The 
leaves of absence of the members of the sanggunian and its employees shall be 
approved by the vice-governor or city or municipal vice-mayor concerned; 
(3) Leaves of absence of the component city or municipal mayor shall be 
approved by the governor; and 
(4) Leaves of absence of a punong barangay shall be approved the city or 
municipal mayor[: Provided, That]. [IILeaves of absence of sangguniang 
barangay members shall be approved by the punong barangay. 
(b) Whenever the application for leave of absence hereinabove specified 
is not acted upon within [five (5)] THREE (3) working days after receipt thereof, the 
application for leave of absence shall be deemed approved 
SECTION 16. Subparagraph 49 of the Code is hereby amended by adding a 
new subparagraph to be known as subparagraph "C" which shall read as follows: 
Section 49. Presiding Officer. - 
(a) xxx 
(b) xxx 
(C) 
THE 
VICE-GOVERNOR, 
VICE-MAYOR 
OR 
ANY 
ACTING 
PRESIDING OFFICER MAY TEMPORARILY RELINQUISH THE CHAIR TO THE 
MAJORITY FLOOR LEADER OR TO ANY MEMBER CHOSEN BY THE 
FANGGUNIAN, TO PROPOSE OR DEFEND AN ORDINANCE OR A RESOLUTION, 
OR TO PARTICIPATE IN A DEBATE OR DISCUSSION ON THE FLOOR OF THE 
SANGGUNIAN. 
(D) ISSUE SUBPOENA DUCES TECUM AND AD TESTIFICANDUM 
WHEN AUTHORIZED BY A RESOLUTION OF THE SANGGUNIAN CONCERNED. 
22 


SECTION 17. Section 60 of the Code is hereby amended to read as follows: 
Section 60. Grounds for Disciplinary Action. - An elective local official 
may be discipline, suspended or removes from office on any of the following grounds: 
(a)xxx 
(b)xxx 
(c)xxx 
(d)xxx 
(9) Application for, or acquisition of, foreign citizenship or residence or the 
status of an immigrant of another country; [and] 
(H) 
FAILURE 
OR 
REFUSAL OF 
THE 
PUNONG-BARANGAY, 
MUNICIPAL OR CITY MAYOR, AND PROVINCIAL GOVERNOR CONCERNED TO 
CONVENE THE MEETINGS OF THE LOCAL DEVELOPMENT COUNCIL AND 
OTHER LOCAL SPECIAL BODIES IS SUBJECT TO DISCIPLINARY ACTION AS 
PROVIDED FOR IN THIS CODE: 
[(h)] (I) Such other grounds as may be provided in this Code and other 
laws. 
An elective local official may be removed from office on the grounds enumerated 
above by order of the proper court. 
SECTION 18. Section 61 of the Code is hereby amended to read as follows: 
Section 61. 
Form and Filing of Administrative Complaints. - [A 
verified] AN ADMINISTRATIVE complaint against [any erring] A local elective official 
i.;ha!l 
be prepared as follows] MUST BE VERIFIED AND FILED WITH: 
(a)xxx 
(b)[A complaint against any elective official of a municipality shall be filed 
before the sangguniang panlalawigan whose decision may be appealed to the Office of 
the President] THE SANGGUNIANG PANLALAWIGAN, WHOSE DECISIONS ON 
23 


QUESTIONS OF FACT IS FINAL AND EXECUTORY, WHEN THE COMPLAINT IS 
AGAINST AN OFFICIAL OF A COMPONENT CITY OR A MUNICIPALITY. 
(c )[A complaint against any elective barangay official shall be filed before 
the sangguniang panlungsod or sangguniang bayan concerned whose decision shall be 
final and executory.] THE SANGGUNIANG PANLUNGSOD OR SANGGUNIANG 
BAYAN CONCERNED, WHOSE DECISION ON QUESTIONS OF FACT IS FINAL AND 
EXECUTORY, WHEN THE COMPLAINT IS AGAINST A BARANGAY OFFICIAL. 
SECTION 19. Section 63 of the Code is hereby amended to read as follows: 
Section 63. Preventive Suspension. - (a) Preventive suspension may 
be imposed: 
(1) By the President, if the respondent is an elective official of a province, a 
highly urbanized or an independent component city; or MUNICIPALITY WITHIN THE 
METROPOLITAN MANILA AREA 
(2) By the governor, if the respondent is an elective official of a component city 
or municipa1ity;or 
(3) By the mayor, if the respondent is an elective official of the barangay. 
A LOCAL ELECTIVE OFFICIAL WHO IS CHARGED CRIMINALLY MAY 
BE PREVENTIVELY SUSPENDED ONLY BY THE COURT THAT HAS ACQUIRED 
JURISDICTION OVER THE PERSON OF THE ACCUSED. THE PREVENTIVE 
SUSPENSION SHALL NOT EXCEED A PERIOD OF TWO (2) MONTHS. 
SECTION 20. Section 71 of the Code is hereby amended to read as follows: 
Section 71. Election on Recall. - Upon the filing of a valid [resolution or] 
petition for recall with the [appropriate] PROPER local office of the Comelec, the 
Commission or its duly authorized representative shall set the date of the election on 
;?call, which shall not be later than thirty (30) days after the filing of the [resolution or] 
petition [for recall] in the case of [the] barangay, city, or municipal officials, and forty- 
five (45) days in the case of provincial officials. The official [or officials] sought to be 
recalled shall automatically be considered [as] A duly registered candidate [or 
24 


candidates] to the pertinent position[s] and, like other candidates, shall be entitled to be 
voted upon. 
t 
SECTION 21. Section 77 of the Code is hereby amended to read as follows: 
Section 77. Responsibility for Human Resource[s and] Development. 
- The chief executive of every local government unit shall be responsible for human 
resource [and] development in his unit and shall take all personnel actions [in 
accordance with] PURSUANT TO the Constitutional provisions [on civil service, 
pertinent] AND laws[, and rules and regulations thereon,] including such policies, 
guidelines and standards as the Civil Service Commission may [establish] 
PROMULGATE[: Provided, That]. [t]The local chief executive may employ emergency 
or casual employees or laborers paid on the daily wage or piecework basis and hired 
through job orders for local projects authorized by the sanggunian concerned, without 
need of approval or attestation [ made ] by the Civil Service Commission[: Provided, 
further, That] [t]The period of employment of emergency or casual laborers AND 
EMPLOYEES as provided in this Section shall not exceed six (6) months. WHEN A 
CASUAL OR CONTRACTUAL EMPLOYEE WHO HAD CONSECUTIVELY SERVED 
AS SUCH FOR FIVE (5) YEARS IS HIRED AGAIN, THE EMPLOYEE SHALL BE 
EXTENDED A PERMANENT APPOINTMENT SUBJECT TO CIVIL SERVICE LAW, 
9.ULES AND REGULATIONS. 
SECTION 22. Section 79 of the same Code is hereby amended to read as 
follows: 
Section 79. 
Limitation on Appointment. - (A) No person shall be 
appointed in the career service of the local government if he is related within the fourth 
civil degree of consanguinity or affinity to the appointing or recommending authority. 
THIS PROHIBITION SHALL NOT APPLY TO PROMOTIONAL APPOINTMENTS 
WHERE THE RELATIVES TO BE APPOINTED ARE NEXT IN RANK AND QUALIFIED 
TO BE APPOINTED TO THE POSITIONS CONCERNED. 


(B) NO APPOINTMENT, IN A TEMPORARY CAPACITY, OR DESIGNATION AS 
OFFICER-IN-CHARGE, TO A VACANT REGULAR POSITION SHALL BE EXTENDED 
FOR MORE THAN SIXTY (60) DAYS. AT THE EXPIRATION OF THE PERIOD, THE 
APPOINTMENT IS DEEMED TERMINATED AND THE OFFICER NEXT IN RANK, 
SHALL AUTOMATICALLY ASSUME THE POSITION AS OFFICER-IN-CHARGE 
UNTIL A QUALIFIED REPLACEMENT IS PERMANENTLY APPOINTED. 
SECTION 23. Section 80 of the Code is hereby amended to read as follows: 
Section 80. Public Notice of Vacancy; Personnel Selection Board. - 
(a) Xxx 
(b) xxx 
(c) The personnel selection board shall be headed by the local chief executive, 
and its members shall be determined by resolution of the sanggunian 
concerned. A representative of the Civil Service Commission, if any, and the 
personnel officer of the local government unit concerned shall be ex officio 
members of the board. 
THE POWERS AND FUNCTIONS OF THE HEAD OF THE SELECTION BOARD 
SHALL NOT BE DELEGATED. NO APPOINTMENT TO A PERMANENT OR 
TEMPORARY POSITION SHALL BE EXTENDED BY THE CHIEF EXECUTIVE 
WITHOUT THE ENDORSEMENT OF THE PROPER SELECTION BOARD. 
THE SANGGUNIAN MAY CREATE A SELECTION BOARD FOR ITS OWN 
PERSONNEL, WITH ITS OFFICIAL PRESIDING OFFICER AS CHAIRMAN WITH A 
REPRESENTATIVE OF A CIVIL SERVICE COMMISSION AS EX-OFFICIO MEMBER. 
SECTION 24. Section 81 of this code is hereby amended to read as follows: 
Section. 81. Compensation of Local Officials and Employees. - The 
compensation of local officials and personnel shall be determined by the sanggunian 
concerned[: Provided, That]. [t]The increase in compensation of elective local officials 
shall take effect only after the terms of office of those approving such increase shall 
have expired[: Provided, furfher, That]. SUBJECT TO THE PROVISION ABOVE 


STATED, the increase in compensation of the appointive officials and employees shall 
take effect as provided in the ordinance authorizing such increase[: Provided, however, 
-I hat said]. THE increases shall not exceed the limitations on budgetary allocations for 
personal services provided under Title Five Book II of this Code[: Provided, fina//y, 
That]. [s]Such compensation SHALL [may] be based upon the pertinent provisions of 
Republic Act Numbered Sixty-seven fifty-eight (R.A. 6758), otherwise known as the 
"Compensation and Position Classification Act of 1989." 
SECTION 25. Sec. 86 of this Code is hereby amended to read as follows: 
Section. 86. Administrative Investigation. - In any local government 
units, administrative investigation may be conducted by a person or a committee duly 
authorized by the APPOINTING AUTHORITY [local chief executive]. Said person or 
committee shall conduct hearings on the cases brought against appointive local officials 
and employees and submit their findings and recommendations to the local chief 
executive concerned within fifteen (15) days from the conclusion of the hearings. The 
administrative cases herein mentioned shall be decided within [ninety (go)] SIXTY (60) 
days from the time of the FILING THEREOF [respondent is formally notified of the 
charges]. 
FAILURE OF THE OFFICIALS CONDUCTING THE INVESTIGATION TO 
TECIDE THE ADMINISTRATIVE CASES WITHIN SIXTY DAYS FROM THE FILING 
THEREOF SHALL BE A GROUND FOR THE FILING OF ADMINISTRATIVE ACTION 
AGAINST THEM. 
SECTION 27. Section 99 of the Code is hereby amended to read as follows: 
Section 99. Functions of Local School Boards. - The province, city or 
municipal school board shall USE THEIR SHARES OF THE SPECIAL EDUCATION 
WND FOR THE DISCHARGE OF ANY OR ALL OF THE FOLLOWING FUNCTIONS: 
(a) xxx 
(b) xxx 
(c) xxx 
27 


(d) Recommend changes in the names of public schools within the territorial 
jurisdiction of the local government unit for enactment by the sanggunian concerned [,I; 
(E) PROVIDE FUNDS FOR THE ACQUISITION OF SCHOOL SITES, SCHOOL 
BUILDINGS, EQUIPMENT, BOOKS AND LEARNING MATERIALS AND THE LIKE, 
SUBJECT TO THE PERTINENT PROVISIONS OF THIS CODE; 
(F) GRANT OF NON-TAXABLE MONTHLY AUGMENTATION ALLOWANCES, 
WHENEVER FEASIBLE; AND 
(G) PROVIDE FUNDS FOR SCHOLARSHIPS AND ALLOWANCES WITH 
PRIORITY FOR POOR AND DESERVING STUDENTS. 
The Department of Education, Culture and Sports shall consult the local school 
board on the appointment of division superintendents, district supervisors, school 
principals, and [other school officials] TEACHING PERSONNEL TO THE END THAT 
QUALIFIED RESIDENTS OF THE LOCAL GOVERNMENT UNIT CONCERNED 
SHALL BE GIVEN PRIORITY. 
SUCH CONSULTATION IS PREREQUISITE TO SAID APPOINTMENTS, AND 
THE SECRETARY OF THE SCHOOL BOARD CONCERNED SHALL CERTIFY TO 
COMPLIANCE THEREWITH. 
FAILURE TO FOLLOW THIS PROCESS SHALL 
NULLIFY THE APPOINTMENT. 
SECTION 27. 
Section 100 of the Code is hereby amended by adding 
paragraphs to read as follows: 
Section 100. Meetings and Quorum; Budget. - 
(a) xxx 
(b) xxx 
(c) Tbe annual school board budget shall give priority to the following: 
(1) Construction, repair, and maintenance of school buildings and other 
facilities of public elementary and secondary schools, SUBJECT TO THE 
PERTINENT PROVISIONS OF THIS CODE; 
(2) Establishment and maintenance of extension classes AND NON-FORMAL 
EDUCATION AND TRAINING PROGRAMS where necessary; [and] 
28 


(3) HOLDING OF [S]sports activities at the division, district, municipal, and 
barangay levels: 
SECTION 28. Section 102 of the Code is hereby amended to read as follows: 
Section 102. Creation and Composition. - (a) There shall be 
established a 
local health board in every province, city, or municipality, [Tithe 
composition of the local health board OF WHICH shall be as follows: 
(1) The provincial health board shall be headed by the governor as chairman, the 
provincial health officer as vice chairman, and the chairman of the committee 
on health of the sangguniang panlalawigan, [a] TWO (2) representatives 
from the private sector or non governmental organizations involved in health 
services, and a representative of the Department of Health in the province, as 
members; 
(2) The city health board shall be headed by the city mayor as chairman, the city 
health officer as vice-chairman, and the chairman of the committee on health 
of the sangguniang panglunsod, [a] TWO representatives from the private 
sector or non-governmental organizations involves in health services, and a 
representative of the Department of Health in the city, as members and: 
(3) The municipal health board shall be headed by the municipal mayor as 
chairman, the municipal health officer as vice chairman of the committee on 
health the of sangguniang bayan, [a] TWO (2) representatives from the 
private sector or non-governmental organizations involved in health services, 
and a representative of the Department of Health in the municipality, as 
members. 
(b) The functions of the local health board shall be: 
(1) 
To propose to the sanggunian concerned BY MEANS OF A 
RESOLUTION DULY APPROVED AND in accordance with standards and 
criteria set by SECTION 17 (9) OF THIS CODE AND the Department of 
Health, annual budgetary allocations for the operation, maintenance and 
29 


IMPROVEMENT of health facilities and services within the municipality, 
city or province, as the case may be; 
(2) 
To serve as a TECHNICAL AND an advisory committee to the 
sanggunian concerned AND THE LOCAL DEVELOPMENT COUNCIL on 
health matters such as, but not limited to, the necessity for, and 
application of, local appropriations for public health FACILITIES AND 
SERVICES [purposes]; and 
(3) 
Consistent with the technical and administrative standards of the 
Department of Health, create committees which shall GUIDE [advise] local 
health agencies on matters such as but not limited to, INTER-LOCAL 
GOVERNMENT UNIT AND LOCAL GOVERNMENT UNITS AND 
DEPARTMENT OF HEALTH COOPERATION AND AGREEMENTS, 
personnel selection and promotion, bids and awards grievance and 
complaints, personnel discipline, budget review, operations review and 
similar functions. 
SECTION 29. Section 103 of the Code is hereby amended to read as follows: 
Section 103. Meetings and Quorum. - (a) The Board shall meet at 
least once a month or as often as may be necessary. 
(b) A majority of the board shall constitute a quorum, but the chairman or vice 
chairman must be present during meetings where budgetary proposals are [being] 
prepared or considered. The affirmative votes of [all] the majority of the members shall 
be necessary to approve such proposals. 
SECTION 30. Section 105 of the Code is hereby amended to read as follows: 
Section. 105. Direct National, Supervision and Control by the 
Secrefary of Healfh OR THE SECRETARY OF AGRICULTURE. - In cases of 
epidemics, pestilence, and other widespread public health dangers, the Secretary of 
Health may, upon the direction of the President, and in consultation with the local 
government unit concerned, temporarily assume direct supervision and control over 


health operations in any local government unit for the duration of the emergency, but in 
no case exceeding a cumulative period of six (6) months. With the concurrence of the 
local government unit concerned, the period for such direct national control and 
supervision may be [further] extended. 
IN CASES OF EPIDEMICS, PESTILENCES, AND OTHER WIDE SPREAD 
PUBLIC HEALTH DANGERS INVOLVING AGRICULTURE AND FISHERIES, THE 
SECRETARY OF AGRICULTURE MAY, UPON THE DIRECTION OF THE 
PRESIDENT, AND IN CONSULTATION WITH THE LOCAL GOVERNMENT UNIT 
CONCERNED, TEMPORARILY ASSUME DIRECT SUPERVISION AND CONTROL 
OVER HEALTH OPERATIONS IN ANY LOCAL GOVERNMENT UNIT FOR THE 
DURATION OF THE EMERGENCY, BUT IN NO CASE EXCEEDING A CUMULATIVE 
PERIOD OF SIX (6) MONTHS. 
WITH THE CONCURRENCE OF THE LOCAL 
GOVERNMENT UNIT CONCERNED, THE PERIOD FOR SUCH DIRECT NATIONAL 
CONTROL AND SUPERVISION MAY BE EXTENDED. 
SECTION 31. Section 107 of the Code is hereby amended to read as follows: 
Section 107. Composition of Local Development Councils. - The 
composition of the local development council shall be as follows: 
(a) The barangay development council shall be headed by the punong barangay 
[‘and shall be composed of] WITH the following AS members: 
(1) Members of the sangguniang barangay; 
(2) Representatives of non-governmental organizations operating in the 
barangay, who shall constitute not less than one fourth (114) of the members 
of the fully organized councils; AND 
(3) A MEMBER OF CONGRESS OR AN AUTHORIZED representative [of the 
congressman]. 
(b) The city or municipal development council shall be headed by the mayor, 
[and shall be composed of] WITH the following AS members: 
(1) All punong barangay[s] in the city or municipality WHERE THERE ARE 
TWENTY (20) OR LESS BARANGAY. A CITY OR MUNlCfPALfTY WITH 
31 


MORE THAN TWENTY (20) BARANGAY SHALL BE ENTITLED TO 
TWENTY (20) REPRESENTATIVES PLUS ONE (I) 
REPRESENTATIVE 
FOR EVERY ADDITIONAL TWENTY (20) BARANGAY OR FRACTION 
THEREOF DULY ELECTED BY THE PUNONG BARANGAY THEMSELVES. 
(2) The chairmen of the committees on appropriations AND PUBLIC WORKS of 
the sangguniang panlungsod or sanggunian bayan concerned; 
(3) [The congressman ] A MEMBER OF CONGRESS or [his] AN AUTHORIZED 
representative; [and] Representatives of non-governmental organizations 
operating in the city or municipality, as the case may be, who shall constitute 
not less that one-fourth (1/4) of the members of the fully organized council. 
AT LEAST TWENTY FIVE PERCENT (25%) OF THE MEMBERS OF THE 
CITY OR MUNICIPAL DEVELOPMENT SHALL CONSTITUTE A QUORUM. 
(c) The provincial development council shall be headed by the governor, [and 
-hall be composed of the] WITH THE following AS members: 
(1) All mayors of component cities and municipalities; 
(2) The chair[men] of the committees on appropriations AND PUBLIC WORKS of 
the sangguniang panlalawigan; 
(3) The congressman] ONE REPRESENTATIVE FOR EVERY MEMBER OF 
CONGRESS [or his representative]; and 
(4) Representatives of the non-governmental organizations operating in the 
province, who shall constitute not less than one-fourth (1h) of the members of 
the fully organized council. 
THE LEAGUE OF PROVINCES, LEAGUE OF CITIES, LEAGUE OF 
MUNICIPALITIES AND LlGA NG MGA BARANGAY SHALL MONITOR COMPLIANCE 
WITH THIS SECTION BY THEIR RESPECTIVE LOCAL GOVERNMENT UNITS AND 
REPORT TO CONGRESS, THROUGH THE OVERSIGHT COMMITTEE ON 
DEVOLUTION, WITHIN NINETY (90) DAYS FROM APPROVAL OF THIS CODE, AS 
AMENDED, AND EVERY JANUARY THEREAFTER. 
(d) xxx 
32 


SECTION 32. Section 108 of the Code is hereby amended to read as follows: 
Section 108. Representation of Non-governmental Organizations. - 
Within 
[a period of] sixty (60) days from the start of THE organization of local 
development councils, the non-governmental organizations, THROUGH THEIR 
RESPECTIVE FEDERATIONS OR ASSOCIATIONS, shall choose from among 
themselves their representatives to said councils. The local sanggunian concerned 
shall accredit ONLY non-governmental organizations RECOMMENDED BY THEIR 
RESPECTIVE FEDERATIONS OR ASSOCIATIONS, subject to such criteria as may be 
provided by law AND IMPLEMENTING RULES AND REGULATIONS. IN CASE THERE 
IS 
NO 
FEDERATION 
OR 
ASSOCIATION 
OF 
NON-GOVERNMENTAL 
ORGANIZATIONS IN THE LOCALITY, THE EXISTING NON-GOVERNMENTAL 
ORGANIZATIONS SHALL CHOOSE FROM AMONG THEMSELVES THEIR 
REPRESENTATIVES TO THE COUNCIL. 
SECTION 33. Section 110 of the Code is hereby amended to read as follows: 
Section 110. 
Meetings [and Quorum]. - 
The local development 
councils shall meet [at least once every six (6) months] FOUR (4) TIMES A YEAR: IN 
MARCH, JUNE, SEPTEMBER AND DECEMBER, or as often as may be necessary 
AND SHALL BE CONVENED BY THE PUNONG BARANGAY, MUNICIPAL OR CITY 
MAYOR AND PROVINCIAL GOVERNOR CONCERNED. 
SECTION 34. Section 112 of the Code is hereby amended to read as follows: 
Section 112. 
Sectoral or Functional Committees - The Local 
Development council SHALL [may] form sectoral or functional committees WHICH 
SHALL 
INCLUDE A 
COMMITTEE FOR 
SUSTAINABLE 
ENVIRONMENTAL 
MANAGEMENT to assist them on the performance of their functions. 
SECTION 35. Section 114 of the Code is hereby amended to read as follows: 
Section 114. Relation of Local Development councils to the 
Sanggunian and Regional Development Council. - (a) The policies, programs and 


projects proposed 
councils shall be submitted to the 
sanggunian concerned for appropriate action UNLESS OTHERWISE ADOPTED 
THROUGH LOCAL INITIATIVE. 
by the local development 
IF WITHIN THIRTY (30) CALENDAR DAYS THE POLICIES, PROGRAMS AND 
PROJECTS SUBMITTED BY THE LOCAL DEVELOPMENT COUNCIL CONCERNED 
ARE NOT MODIFIED OR DISAPPROVED BY THE SANGGUNIAN, THE SAME SHALL 
BE DEEMED APPROVED AND THE 
FUNDS NECESSARY FOR THEIR 
IMPLEMENTATION PURSUANT TO THE PRIORITIES SET OUT IN THE ANNUAL 
INVESTMENT PLAN SHALL THEREAFTER BE ALLOCATED BY THE SANGGUNIAN 
CONCERNED. 
FAILURE ON THE PART OF THE SANGGUNIAN CONCERNED TO 
ALLOCATE FUNDS SHALL RENDER THE ANNUAL BUDGET OF THE LOCAL 
GOVERNMENT CONCERNED INOPERATIVE WITHOUT PREJUDICE TO THE 
! ._ 
OCAL OFFICIALS CONCERNED BEING SUBJECTED TO ADMINISTRATIVE 
SANCTIONS. 
The local development plans THUS approved by their respective sanggunian 
[may] SHALL be integrated [with] INTO the development plans of the next higher level 
of local development council. 
SECTION 36. Section I 
15 of the Code is hereby amended to read as follows: 
Section 115. Budget Information. - WITHIN JANUARY OF EVERY 
YEAR, [Tlthe Department of the Budget and Management shall furnish the various local 
development councils information on financial resources and budgetary allocations OF 
NATIONAL FUNDS FOR PROGRAMS AND PROJECTS applicable to their respective 
jurisdiction to guide them in their planning functions. 
SECTION 37. Section 116 of the Code is hereby amended to read as follows: 
Section 116. 
Organization. - There is hereby established in every 
province, city and municipality a local peace, LAW and order council, pursuant to 
Executive Order Numbered Three Hundred Nine (E.O. No. 309), as amended, Series of 
34 


1988. IN ADDITION, NOT MORE THAN TWO (2) REPRESENTATIVES ELECTED BY 
THE ACCREDITED NON-GOVERNMENTAL OR PEOPLES ORGANIZATIONS MAY 
REPRESENT THE SAID ORGANIZATIONS IN THE COUNCIL. [The local peace and 
order councils shall have the same composition and functions as those prescribed by 
the said executive order] 
SECTION 38. Section 117 of the Code is hereby amended to read as follows: 
Section 11 7. 
Establishment of Autonomous Special Economic 
Zones. - The establishment by law of autonomous special economic zones in selected 
areas of the country shall be subject to concurrence by the local government units 
included therein. 
ALL IDENTIFIED SPECIAL ECONOMIC ZONES ENUMERATED IN SECTION 5 
OF R.A. 7916, OTHERWISE KNOWN AS THE SPECIAL ECONOMIC ZONE ACT OF 
;995 WHICH HAVE NOT YET BEEN OFFICIALLY ESTABLISHED UPON THE 
APPROVAL OF THIS ACT, SHALL BE SUBJECT TO THE PROVISION ABOVE- 
MENTIONED. 
SECTION 39. Section 118 of the Code is hereby amended to read as follows: 
Section 118. Jurisdictional Responsibility for Settlement of Boundary 
Dispufe. - Boundary disputes between and among local government units shall, as 
much as possible, be settled amicably. To this end: 
(a) xxx 
(b) Boundary disputes involving two (2) or more municipalities OR COMPONENT 
CITIES within the same province shall be referred for settlement to the sangguniang 
panlalawigan concerned. 
(c) Boundary disputes involving municipalities, or component cities of different 
provinces shall be jointly referred for settlement to the sanggunians of the provinces 
concerned. 
35 


(d) Boundary disputes involving a component city or municipality on the one hand 
and a highly urbanized city on the other, or two (2) or more highly urbanized cities, shall 
be jointly referred for settlement to the respective sanggunians of the parties; 
(e) In the event the sanggunian fails to effect an amicable settlement within sixty 
(60) days from the date the dispute was referred thereto, it shall issue a certification to 
that effect. Thereafter, the dispute shall be formally tried by the sanggunian concerned 
which shall decide the issue within sixty (60) days from [the date of the] ITS RECEIPT 
9F THE certification referred to above. 
SECTION 40. Section 120 of the Code is hereby amended to read as follows. 
Section 120. Local Initiative Defined. - Local initiative is the legal 
process whereby the registered voters of a local government unit may directly propose, 
enact, or amend any ordinance OR RESOLUTION. 
SECTION 41. Section 121 of the Code is hereby amended to read as follows: 
Section 121. Who May Exercise lNlTlATlVE AND REFERENDUM. - 
The power of local initiative and referendum may be exercised by all registered voters of 
the provinces, cities, municipalities, and barangays. 
SECTION 42. Section 122 of the is hereby amended to read as follows: 
Section 122. Procedure in Local Initiative. - (a) Not less than one 
thousand (1,000) registered voters in case of provinces and cities, one hundred (100) 
in case of municipalities, and fifty (50) in case of barangays may file a petition with the 
sanggunian concerned proposing the adoption, enactment, repeal, or amendment of an 
Qrdinance. 
(b) xxx 
(c) xxx 
(d) xxx 
(e) Proponent shall have a (90) days in case of provinces and cities, sixty (60) 
days in case of municipalities, and thirty (30) days in case of barangays, from notice 
36 


mentioned in subsection (b) hereof to collect the required number of signatures. AT 
!,.EAST TWO PERCENT (2%) OF THE SIGNATURES GATHERED FOR A LOCAL 
INITIATIVE IN PROVINCES, CITIES, OR MUNICIPALITIES SHALL COME FROM 
RESIDENTS OF EVERY BARANGAY THEREIN. 
SECTION 43. Section 125 of the Code is hereby amended to read as follows: 
Section 125. Limitations upon Sanggunians. - Any proposition or 
ordinance approved through the system of initiative and referendum as herein provided 
shall not be AMENDED [repealed], modified or [amended] REPEALED by the 
sanggunian concerned within six (6) months from the date of ITS approval. 
THEREAFTER 
THE 
PROPOSITION 
OR 
ORDINANCE 
OR 
RESOLUTION 
CONCERNED MAY BE AMENDED, MODIFIED OR 
REPEALED BY THE 
SANGGUNIAN BY THE VOTE OF THREE FOURTHS (3/4) OF ALL ITS MEMBERS. 
[thereof, and may be amended, modified or repealed by the sanggunian within three 
(3) years thereafter by a vote of three-fourths of all its members: Provided, That] [illn 
THE case of barangays, the PROPOSITION OR ORDINANCE OR RESOLUTION 
CONCERNED SHALL NOT BE AMENDED, MODIFIED OR REPEALED WITHIN 
[period shall be] eighteen (18) months FROM [after the] ITS approval [thereofl. 


BOOK TWO - LOCAL TAXATION 
AND FISCAL MATTERS 
SECTION 45. Section 131 of the Code is hereby amended to read as 
follows: 
Section 131. Definifion of Terms. - When used in this Title, the term: 
(a) xxx 
(b) xxx 
(c) "Amusement Places" - ARE PLACES THAT PROVIDE AMUSEMENT OR 
RECREATION SUCH AS theaters, cinemas, concert halls, circuses, COUNTRY AND 
SPORTS 
CLUBS, 
GOLF 
COURSES, 
BEACH 
AND 
OTHER 
RESORTS, 
RECREATIONAL PARKS, COCKPITS, and other places of amusement where one 
seeks [admission to] entertainment [oneself] by 
[seeing or viewing the show] 
WA7CHING SHOWS or performances, OR [entertain oneselfl BY PARTICIPATING IN 
ACTIVITIES OR USING THE FACILITIES THEREAT. 
(i) "Corporation" xxx 
(n) "Gross Sales or Receipts" include the total amount of money or its equivalent 
representing the contract price, compensation or service fee, including the amount 
charged or materials supplied with the services and deposits or advance payments 
actually or constructively received during the taxable [quarter] YEAR for the services 
performed or to be performed for another person excluding discounts if determinable at 
the time of sales, sales return, excise tax, and value-added tax (VAT); 
(z)"Wholesale" xxx 
SECTION 45. Section 133, Paragraph (d), (I) and (0) 
of the Code are hereby 
amended to read as follows: 
Section 133. Common Limitations on the Taxing Powers Of Local 
Government Units. - Unless otherwise provided herein, the exercise of the taxing 
powers of provinces, cities, municipalities, and barangays shall not extend to the levy of 
the following: 


(a) xxx 
(b) xxx 
(d) Customs duties AND registration fees of vessel WITH TONNAGE FIVE (5) 
TONS AND ABOVE, [and] wharfage on wharves, tonnage dues, and all other kinds of 
customs fees, charges and dues except wharfage on wharves constructed, [and] 
maintained OR OPERATED by the local government unit concerned OR BY A 
PRIVATE PERSON OR ENTITY; 
(e) xxx 
(0 
xxx 
(9) xxx 
(h) Excise taxes [on articles enumerated under the National Internal Revenue 
Code, as amended,] and OTHER taxes, fees or charges on petroleum products; 
(I) Taxes[, fees or charges] for the registration of motor vehicles and for the 
issuance of all kinds of licenses or permits for the driving thereof except tricycles AND 
PUBLIC UTILITY VEHICLES OPERATING WITHIN THE PROVINCE; 
(m) xxx 
(n) Taxes, fees or other charges, on [Countryside and Barangay Business 
Enterprises and] cooperatives duly registered under [R.A. 6810 and] Republic Act 
yumbered Sixty-nine hundred thirty-eight 
(R. A. 6938) otherwise known as the 
"Cooperative Code of the Philippines" [respectively]; and 
(0) Taxes [, fees or charges] of any kind on the [National] CENTRAL 
Government, its agencies and instrumentalities, and local government units[.], EXCEPT 
QUASI-PUBLIC CORPORATIONS, GOVERNMENT BANKS, FINANCING AND 
INVESTMENT 
INSTITUTIONS, 
GAMBLING 
AND 
GAMING 
ENTERPRISES 
SPERATED 
BY 
THE 
CENTRAL 
GOVERNMENT 
OR 
ITS AGENTS OR 
INSTRUMENTALITIES, OR CONTRACTED OUT BY IT TO FOREIGN OR DOMESTIC 
CORPORATIONS, INDIVIDUALS OR ENTITIES, WHICH HAVE BEEN GIVEN 
PERMITS BY THE LOCAL GOVERNMENT UNITS. 
39 


Provinces 
SECTION 47. Section 136 of the Code is hereby amended to read as follows: 
Section 136. Tax on Business of Printing and Publication. - The 
province may impose a tax on the business of persons engaged in the printing and/or 
publication of books, cards, posters, leaflets, handbills, certificates, receipts, pamphlets, 
and others of similar nature, at a rate not exceeding fifty percent (50%) of one percent 
(1%) of the gross annual receipts for the preceding calendar year. 
In the case of a newly started business, the tax shall not exceed one-twentieth 
(1/20) of one (1%) of the capital investment. 
In the succeeding calendar year, 
regardless of when the business started to operate, the tax shall be based on the gross 
receipts for the preceding calendar year, or any fraction thereof, as provided herein; 
The receipts from the printing andlor publishing of books or other reading 
materials prescribed by the Department of Education, Culture and Sports as school 
texts or references shall be exempt from the tax herein imposed. 
PROVIDED, THAT SIXTY PERCENT (60%) OF THE PROCEEDS OF THE TAX 
MENTIONED IN THIS SECTION SHALL ACCRUE TO THE PROVINCE AND FIFTY 
PERCENT (50%) SHALL ACCRUE TO THE MUNICIPALITY WHERE THE BUSINESS 
E3 LOCATED. 
SECTION 48. Section 137 of the Code is hereby amended to read as follows. 
Section 137. Franchise Tax. - Notwithstanding any exemption granted 
by any law or other special laws, the province may impose a tax on ANY business[es] 
enjoying a franchise GRANTED BY CONGRESS, A CENTRAL GOVERNMENT 
AGENCY OR A LOCAL GOVERNMENT UNIT, INCLUDING POWER GENERATION, 
TRANSMISSION AND DISTRIBUTION, TELECOMMUNICATIONS, ICE PLANTS AND 
STORAGE FACILITIES, LEGAL GAMBLING OR GAMING ACTIVITIES, AND OTHER 
SIMILAR BUSINESSES, BASED ON INCOME REALIZED WITHIN ITS TERRITORIAL 
JURISDICTION, at a rate not exceeding fifty percent (50%) of one percent (1%) of 
40 


the gross annual receipts for the preceding calendar year [based on the income receipt, 
or realized, within its territorial jurisdiction). 
SECTION 49. Section 138 of the Code is hereby amended to read as 
follows: 
Section 138. Section 138. Tax on Sand, Gravel and Other Quarry 
Resources. - The province may levy and collect not more than ten percent (10%) of 
fair market value in the locality per cubic meter of ordinary stones, sand, gravel, earth, 
and other resources as defined in the Internal Revenue Code, as amended, extracted 
from public lands or from the beds of seas, lakes, rivers, streams, creeks, and other 
public waters within its territorial jurisdiction. 
The permit to extract sand, gravel, and other quarry resources shall be issued 
Iexclusively] by the provincial governor 1, pursuant to the ordinance of the sangguniang 
panlalawigan] UPON THE RECOMMENDATION OF THE MAYOR OF THE CITY OR 
MUNICIPALITY CONCERNED. 
The proceeds of the tax on sand, gravel and other quarry resources shall be 
distributed as follows: 
(1) Province - Thirty percent (30%); 
(2) Component City or Municipality where the sand, gravel, and other quarry 
resources are extracted -Thirty percent (30%); and 
(3) Barangay where the sand, gravel, and other quarry resources are extracted - 
Forty percent (40%) 
SECTION 50. 
Section 139 of the Code is hereby amended to read as 
tbllaws: 
Section 139. Professional Tax. (a) The province may levy an annual 
professional tax on each person engaged in the exercise and practice of his profession 
requiring government examination at such REASONABLE amount and [reasonable] 
classification as the sanggunian panlalawigan may PROVIDE. [determine but shall not 
in no case exceed Three hundred pesos (P300.00).] 
41 


SECTION 51. Section 747 of the Code is hereby amended to read as 
follows: 
Section 141. Annual Fixed Tax For Every Delivery Truck or Van of 
Manufacturers or Producers, Wholesalers of, Dealers, or Retailers in, Certain 
Products. - (a) The province may levy an annual fixed tax for every truck, van or any 
vehicle used by manufacturers, producers, wholesalers, dealers, or retailers in the 
delivery or distribution of distilled spirits, fermented liquors, softdrinks, cigars and 
cigarettes, and other products as may be determined by the sangguniang panlalawigan, 
to sales outlets, or consumers, whether directly or indirectly, within the province [in an 
amount not exceeding Five hundred pesos (P500.00)]. 
Municipalities 
SECTION 52. Section 143 of the Code is hereby amended to read as follows: 
Section 143. Tax on Business. - The municipality may impose taxes on 
ANY BUSINESS AT THE RATE NOT EXCEEDING TWO AND A HALF PERCENT 
(2%%) BASED ON THE GROSS SALES OR RECEIPTS IN THE PRECEDING 
CALENDAR YEAR. 
[(a) xxxl 
[(b) xxxl 
[(c) On exporters, and on] IN THE CASE OF manufacturers, millers, producers, 
wholesalers, distributors, dealers or retailers of essential commodities enumerated 
hereunder, [at a] THE rate SHALL not [exceeding] EXCEED one-half (112) of the rates 
[prescribed under subsections (a), (b) and (d) of this Section] IMPOSED BY THE 
MUNICIPALITY IN ACCORDANCE WITH THE PRECEEDING PARAGRAPH: 
(1) Rice and corn; 
(2) Wheat or cassava flour, meat, dairy products, locally manufactured, 
processed or preserved food, sugar, salt and other agricultural, marine, and 
fresh water products, whether in their original state or not; 
42 


(3) Cooking od and cooking gas; 
(4) Laundry soap, detergents, and medicine: 
(5) Agricultural implements, equipment and post-harvest facilities, fertilizers, 
pesticides, insecticides, herbicides and other farm inputs; 
(6) Poultry feeds and other animal feeds 
(7) School supplies; and 
(8) Cement 
IN THE CASE OF EXPORTERS, INDIRECT EXPORTERS AND EXPORT SUB- 
CONTRACTORS, THE RATE OF BUSINESS TAXES SHALL NOT EXCEED ONE 
PERCENT (1%) OF GROSS SALES OR RECEIPTS OF THE PRECEEDING YEAR. 
[(d) On retailers, 
With gross sales or receipts 
Rate of Tax 
From the preceding calendar year of: 
Per Annum 
P400,OOO.OO or less 
2% 
More than P400,OOO.OO 
1% 
Provided, however, That Barangays shall have the exclusive power to levy taxes, 
as provided under Section 152 hereof, on gross sales or receipts of the preceding 
calendar year of Fifty thousand pesos (P50,OOO.OO) or less, in the case of cities, and 
','hifly thousand pesos (P30,OOO.OO) or less, in the case of municipalities.] 
[(e) On contractors and other independent contractors, in accordance with the 
following schedule: 
With gross sales or receipts for the 
Amount of Tax 
preceding calendar year in the amount of 
Less than 5,000.00 
P5,OOO.OO or more but less than 10,000.00 
10,000.00 or more but less than 15,000.00 
15,000.00 or more but less than 20,000.00 
20,000.00 or more but less than 30,000.00 
30,000.00 or more but less than 40,000.00 
40,000.00 or more but less than 50,000.00 
43 
Per Annum 
27.50 
61.60 
104.50 
165.00 
275.00 
385.00 
550.00 


50,000.00 or more but less than 75,000.00 
880.00 
75,000.00 or more but less than 100,000.00 
1,320.00 
100,000.00 or more but less than 150,000.00 1,980.00 
150,000.00 or more but less than 200,000.00 
2,640.00 
200,000.00 or more but less than 250,000.00 
3,630.00 
250,000.00 or more but less than 300,000.00 
4,620.00 
300,000.00 or more but less than 400,000.00 
6,160.00 
400,000.00 or more but less than 500,000.00 
8,250.00 
500,000.00 or more but less than 750,000.00 
9,250.00 
750,000.00 or more but less than 1,000,000.00 10,250.00 
1,000,000.00 or more but less than2,000,000.00 
2,000,000.00 or more at a rate not exceeding fifty percent (50%) of one percent 
1 1,500.OO 
1 %)I 
[(9 On banks and other financial institutions, at a rate not exceeding fifty percent 
(50%) of one percent (1%) on the gross receipts of the preceding calendar year derived 
from interest, commissions and discounts from lending activities, income from financial 
leasing, dividends, rentals on property and profit from exchange or sale of property, 
insurance premium.] 
[(g) On peddlers engaged in the sale of any merchandise or article of commerce, 
at a rate not exceeding Fifty pesos (P50.00) per peddler annually.] 
[(h) On any business, not otherwise specified in the preceding paragraphs, which 
the sanggunian concerned may deem proper to tax: Provided, That on any business 
subject to the excise, value-added or percentage tax under the National Internal 
Revenue Code, as amended, the rate of tax shall not exceed two percent (2%) of gross 
sales or receipts of the preceding calendar year.] 
[The sanggunian concerned may prescribe a schedule of graduated tax rates but 
in no case to exceed the rates prescribed herein.] 
44 


SECTION 52. Section 152 of the Code is hereby amended to read as 
follows: 
Section 152. Scope of Taxing Powers. - The barangays may levy taxes, 
fees, and charges, as provided in this Article, [which] THAT shall exclusively accrue to 
them: 
(a) Taxes - On stores or retailers with fixed business establishments [with] 
HAVING gross sales or receipts [of] IN the preceding calendar year of [Fifty 
thousand pesos (PSO,OOO.OO)] ONE MILLION PESOS ( P I  ,000,000.00) or 
less, in the case of BARANGAYS IN cities and IN MUNICIPALITIES WITHIN 
METROPOLITAN MANILA AREA, 
AND 
[thirty thousand pesos 
(P30,000.00)] 
FIVE HUNDRED THOUSAND PESOS (P500,000.00) or less, 
in the case of BARANGAYS IN OTHER 
municipalities, at a rate not 
exceeding one percent (1 %) on such gross sales or receipts. 
(b) Xxx 
SECTION 53. Sec. 155 of this Code is amended to read as follows: 
Section 155. Toll Fees or Charges. - The sanggunian concerned may 
prescribe the terms and conditions and fix the rates for the imposition of toll fees or 
charges for the use of any public road, pier or wharf, waterway, bridge, ferry or 
telecommunication system funded and constructed by the local government unit 
concerned: Provided, That no such toll fees or charges shall be collected from 
GOVERNMENT VEHICLES AND VEHICLES EXCLUSIVELY CARRYING officers and 
enlisted men of the Armed Forces of the Philippines and members of the Philippine 
National Police, on mission, post office personnel delivering mail, physically- 
handicapped, [and] disabled PERSONS AND SENIOR citizens [who are sixty-five (65) 
years or older]. 
When public safety and welfare so requires, the sanggunian concerned may 
discontinue the collection of the tolls, and thereafter the said facility shall be free and 
open for public use. 
45 


SECTION 54. Sec. 157 of this Code is hereby amended to read as follows: 
Section 157. individuals Liable to Community Tax. - Every inhabitant 
of the Philippines eighteen (18) years of age or over who has been regularly employed 
on a wage or salary basis for at least thirty (30) consecutive working days during any 
calendar year, or who is engaged in business or occupation, or who owns real property 
with an aggregate assessed value of One thousand pesos (PI ,000.00) or more, or who 
is required by law to file an income tax return shall pay an annual community tax of Five 
pesos (P5.00) and an annual additional tax of One peso (P1.00) for every One 
thousand pesos (PI ,000.00) of income regardless of whether from business, exercise of 
profession, EMPLOYMENT or from property which in no case shall exceed Five 
thousand pesos (P5,OOO.OO) 
In the case of husband and wife, the additional tax herein imposed shall be 
based upon the total property owned by them and the total gross receipts or earnings 
derived by them. 
SECTION 55. Section 159 of the Code is hereby amended to read as follows: 
Section 159. Exemptions. - The following are exempt from the 
community tax: 
(1) Diplomatic and consular representatives; [and] 
(2) Transient visitors when their stay in the Philippines does not exceed three (3) 
months; 
(3) DISABLED PERSONS; AND 
(4) SENIOR CITIZENS UNLESS GAINFULLY EMPLOYED OR ENGAGED IN 
BUSINESS AND EARNING MORE THAN SIXTY THOUSAND PESOS 
(P60,OOO) ANNUALLY. 
SECTION 56. Section 171 of the Code is hereby amended to read as follows: 
Section 171. Examination of Books of Accounts and Pertinent 
BUSlNESS Records [of Businessmen] by Local Treasurer. - The provincial, city, 
t.iunicipal or barangay treasurer may, by himself or [through] BY any of his deputies 


i:uly authorized in writing, examine the books, account, and other pertinent records of 
any person, partnership, corporation, or association subject to local taxes, fees and 
charges in order to ascertain, assess and collect the correct amount of tax, fees or 
charge. Such examination shall be made during regular business hours, only once 
every tax period, and shall be certified to by the examining official. Such certificate shall 
be made of record in the book of accounts of the taxpayer examined. 
In case the examination herein authorized is made by a duly authorized deputy of 
the local treasurer, the written authority of the deputy concerned shall specifically state 
the name, address, and business of the taxpayer whose books, account, and pertinent 
records are to be examined, the date and place of such examination, and the procedure 
to be followed in conducting the same. 
For this purpose, the records of the revenue district office of the Bureau of 
Internal Revenue shall be made available to the local treasurer, his deputy or duly 
authorized representative. SUCH BUSINESS RECORDS SHALL BE TREATED AS 
CONFIDENTIAL UNLESS OTHERWISE ORDERED BY THE COURT. 
SECTION 57. 
Section 188 of the Code is hereby amended to read as 
follows : 
Section 188. Publication of Tax Ordinances and Revenue Measures. 
-Within ten (IO) days after their approval, certified true copies of all provincial, city, and 
municipal tax ordinances or revenue measures shall be published in full for three (3) 
consecutive days in a DAILY newspaper PUBLISHED AND CIRCULATED LOCALLY [of 
local circulation] OR ONCE A WEEK FOR THREE CONSECUTIVE WEEKS IN THE 
C.1SE OF A WEEKLY NEWSPAPER PUBLISHED AND CIRCULATED LOCALLY[: 
Provided, however, That]. [illn provinces, cities, and municipalities where there are no 
newspapers THAT ARE PUBLISHED AND CIRCULATED LOCALLY [of local 
circulation], the same [may] SHALL INSTEAD be posted FOR AT LEAST ONE (1) 
MONTH in PROVINCIAL CAPITOLS, CITY OR MUNICIPAL HALLS, ALL BARANGAY 
HALLS AND OTHER [at least two (2)] conspicuous and publicly accessible places. 


SECTION 58. Section I91 of the Code is hereby amended to read as follows: 
Section 191. Authority of Local Government Units to 
Adjust Rates of Tax Ordinances. Local government units shall have the authority to 
adjust the tax rates as prescribed herein not oftener than once every five (5) years, but 
in no case shall such adjustment exceed ten percent (10%) of the rates fixed under this 
Code. 
IN THE CASE OF FIXED TAXES PRESCRIBED IN THIS CODE, THE 
MAXIMUM ALLOWABLE RATE MAY BE ADJUSTED NOT MORE THAN ONCE 
EVERY THREE (3) YEARS EASED ON THE AVERAGE ANNUAL INFLATION RATE 
AS CERTIFIED BY THE NATIONAL STATISTICS OFFICE. 
SECTION 59. Section 195 of the Code is hereby amended to read as follows: 
Section 195. Protest of Assessment. - When the local treasurer or his 
duly authorized representative finds that correct taxes, fees, or charges have not been 
paid, he shall issue a notice of assessment stating the nature of the tax, fee or charge, 
the amount of deficiency, the surcharges, interests and penalties. Within sixty (60) days 
from the receipt of the notice of assessment, the taxpayer may file a written protest with 
the local treasurer contesting the assessment; otherwise, the assessment shall become 
final and executory. The local treasurer shall decide the protest within [sixty (60)] 
THIRTY (30) days from the time of its filing. If the local treasurer finds the protest to be 
wholly or partly meritorious, he shall issue a notice canceling wholly or partially the 
assessment. However, if the local treasurer finds the assessment to be wholly or partly 
correct, he shall deny the protest wholly or partly with notice to the taxpayer. The 
taxpayer shall have thirty (30) days from the receipt of the denial of the protest or from 
the lapse of the [sixty (6U)J THIRTY (30) day period prescribed herein within which to 
appeal with the court of competent jurisdiction otherwise the assessment becomes 
conclusive and unappealable. 
48 


SECTION 60. Section 199 of this Code is hereby amended to read as 
follows: 
Section 199. Definition of Terms. 
(a) 
xxx 
(b) 
xxx 
xxx 
(0) "Machinery" embraces machines, equipment, mechanical contrivances, 
instruments, appliances or apparatus which may or may not be attached 
permanently or temporarily, to the real property. It includes the physical 
facilities for production, the installations and appurtenant service facilities, 
those which are mobile, self-powered or self-propelled, and those not 
permanently attached to the real property which are actually, directly, and 
exclusively used to meet the needs of the particular industry, business or 
activity and which by their very nature and purpose are designed for or 
necessary to its manufacturing, mining, logging, commercial, industrial or 
agricultural purposes. 
SECTION 61. Section 204 of the Code is hereby amended to read as follows: 
Section.204. Declaration of Real Property by the Assessor. - When 
any person, natural or juridical, by whom rea! property is required to be declared under 
Section 202 hereof, refuses or fails for any reason to make such declaration within the 
time prescribed, the [provincial,] city or municipal assessor shall himself declare the 
property in the name of the defaulting owner, if known, or against an unknown owner, 
as the case may be, and shall assess the property for taxation in accordance with the 
provision of this Title. No oath shall be required of a declaration thus made by the 
[provincial,] city or municipal assessor. 
SECTION 62. Section 205 of the Code is hereby amended to read as follows: 
Section 205. Listing of Real Property in the Assessment Rolls. (a) In 
every [province and] city [, including the] AND municipalit[ies]Y [within the Metropolitan 
49 


ldanila Area,] there shall be prepared and maintained by the [provincial,] city or 
municipal assessor an assessment roll wherein shall be listed all real property, whether 
taxable or exempt, located within the territorial jurisdiction of the local government unit 
concerned. Real property shall be listed, valued and assessed in the name of the 
owner or administrator, or anyone having legal interest in the property. THE 
PROVINCIAL ASSESSOR SHALL CONSOLIDATE THE ASSESSMENT ROLLS OF 
‘THE MUNICIPALITIES WITHIN THE PROVINCE. 
(b) xxx 
(c) xxx 
SECTION 63. Section 206 of this Code is hereby amended to read as follows: 
Section 206. Proof of Exemption of Real Propetiy from Taxation. - 
Every person by or for whom real property is declared, who shall claim tax exemption 
for such property under this Title shall file with the [provincial,] city or municipal 
assessor within thirty (30) days from the date of the declaration of real property 
sufficient documentary evidence in support of such claim including corporate charters, 
title of ownership, articles of incorporafion, bylaws, contracts, affidavits, certifications 
2nd mortgage deeds, similar documents. 
If the required evidence is not submitted within the period herein prescribed, the 
property shall be listed as taxable in the assessment roll. However, if the property shall 
be proven to be tax exempt, the same shall be dropped from the assessment roll. 
Section 64. Section 207 of this Code is hereby amended to read as follows: 
Section 207. Real Property Identification System. - All declarations of 
real property made under the provisions of this Title shall be kept and filed BY THE 
PROVINCIAL, CITY OR MUNICIPAL ASSESSOR under a uniform classification system 
[to be established] DEFINED by the [provincial, city or municipal assessor] 
DEPARTMENT OF FINANCE PURSUANT TO THE PROVISIONS OF THIS CODE. 


SECTION 65. Section 208 of the Code is hereby amended to read as follows: 
SECTlON 208. Notification of Transfer of Real Properfy Ownership. - 
Any person who shall transfer real property ownership to another shall notify the 
[provincial,] city or municipal assessor concerned within sixty (60) days from the date of 
such transfer. The notification shall include the mode of transfer, the description of the 
property alienated, the name and address of the transferee. 
SECTION 66. Section 21 3 of the Code is hereby amended to read as follows: 
Section 213. Aufhorify of Assessor to Take Evidence. - For the 
purpose of obtaining information on which to base the market value of any real property, 
the assessor of the [province,] city or municipality or his deputy may summon the 
owners of the properties to be affected or persons having legal interest therein and 
witnesses, administer oaths, and take deposition concerning the property, its ownership, 
amount, nature, and value. 
SECTION 67. Section 215 of this Code is hereby amended to read as follows: 
Section 215. Classes of Real Properfy for Assessment Purposes. For 
purposes of assessment, real property shall be classified as residential, agricultural, 
commercial, industrial, mineral, timberland or special. 
[The] CitlES[y] [or] AND municipalit[y]lES [within the Metropolitan Manila Area], 
through their respective sanggunian shall have the power to classify lands as 
residential, agricultural, commercial, industrial, mineral, timberland, or special in 
accordance with their zoning ordinances. 
PROVINCES SHALL HAVE THE SAME POWER TO CLASSIFY LANDS ON 
THE BASIS OF THE ZONING ORDINANCES OF THEIR COMPONENT CITIES AND 
MUNICIPALITIES. 
SECTION 68. Section 218, paragraph (b), sub-paragraph (1) is hereby amended 
to read as follows: 
Section 218. Assessment Levels. -The assessment levels to be applied 
to the fair market value of real property to determine its assessed value shall be fixed by 
51 


Grdinances of the sangguniang panlalawigan, sangguniang panlungsod or sangguniang 
bayan of a municipality [within the Metropolitan Manila area,] at the rate not exceeding 
the following: 
(a) On lands: 
CLASS 
ASSESSMENT LEVELS 
Residential 
20% 
Agricultural 
40% 
Commercial 
50% 
Industrial 
50% 
Mineral 
50% 
RECREATIONAL 
50% 
Timberland 
20% 
(b) On Buildings and Other Structures: 
(1) Residential 
Fair Market Value 
Over 
Not Over 
Assessment Levels 
[P175,000,00]P500,000.00 
0 Yo 
[P175,000.00]500,000.00 
[P300,000.00]P750,000.00 
10% 
[P300,000.00]750,000.00 
[P500,000.00]P850,000.00 
20% 
[P500,000.00]850,000.00 P1,000,000.00 
30% 
xxxx 
xxxx 
SECTION 69. Section 219 of the Code is hereby amended to read as follows: 
Section 219. General Revision of Assessment and Property 
Classification. - The provincial, city or municipal assessor shall undertake a general 
revision of real property assessments within two (2) years after the effectively of this 
[Code] ACT and every [three (3)] SIX (6) years thereafter. 
52 


SECTION 70. Section 220 of the Code is hereby amended to read as follows: 
Section 220. Valuation of Real froperfy. - In cases where (a) real 
property is declared and listed for taxation purposes for the first time; (b) there is an 
ongoing general revision of property classification and assessment; or (c) a request is 
made by the person in whose name the property is declared, the provincial, city or 
municipal assessor or his duly authorized deputy shall, in accordance with the provision 
(-2 this Chapter, make a classification, appraisal and assessment of the real property 
listed and described in the declaration irrespective of any previous assessment or 
taxpayer’s valuation thereon; Provided, however, That the assessment of real property 
shall not be increased oftener than once every [three (3)J SIX (6) years except in case 
of new improvements substantially increasing the value of said property or of any 
change in its actual use. 
SECTION 71. Section 223 of the Code is hereby amended to read as follows: 
Section 223. Notification of New or Revised Assessment. -When real 
property is assessed for the first time or when an existing assessment is increased or 
decreased, the [provincial,] city or municipal assessor shall within thirty (30) days give 
written notice of such new or revised assessment to the person in whose name the 
property is declared. The notice may be delivered personally or by registered mail or 
through the assistance of the punong barangay to the last known address of the person 
to be served. 
SECTION 72. Section 227 of the Code is hereby amended to read as follows: 
Section 227. 
Organization, Powers, Duties and Functions of the 
Local Board of Assessment Appeals. -(a) The Board of Assessment Appeal of the 
provinces or city shall be composed of the Registrar of Deeds, as Chairman, the 
CHIEF OF THE provincial or city [prosecutor] PUBLIC ATTORNEY OFFICE, and 
PROVINCIAL OR city engineer, as members, who shall serve as such in an ex-officio 
capacity without additional compensation. 
(a) xxx 
53 


(b) xxx 
(d) In provinces and cities without a provincial or city engineer, the district 
engineer shall serve as member of the Board. In the absence of the Registrar of Deeds, 
or the CHIEF OF THE provincial or city PUBLIC ATTORNEY OFFICER [prosecutor], or 
the provincial or city engineer, or the district engineer, the persons performing their 
duties, whether in an acting capacity or as duly designated officer-in- charge shall 
automatically become the chairman or member respectively, of the said Board, as the 
case maybe. 
SECTION 73. Section 229 of the Code is hereby amended to read as follows: 
Section 229. Action by the Local Board of Assessment Appeals. - (a) 
The Board shall decide the appeal within [one hundred twenty (120)] SIXTY (60) days 
from the date of receipt of such appeal. The Board, after hearing, shall render its 
decision based on substantial evidence or such relevant evidence on record as a 
reasonable mind might accept as adequate to support the conclusion. 
(b) xxx 
(c) The secretary of the Board shall furnish the owner of the property 
or the person having legal interest therein and the [provincial or] city OR MUNICIPAL 
assessor with a copy of the decision of the Board. In case the [provincial or] city OR 
MUNICIPAL assessor concurs in the revision or the assessment, it shall be his duty to 
notify the owner of the property or the person having legal interest therein of such fact 
using [the] A form prescribed for the purpose. The owner of the property or the person 
having legal interest therein or the assessor who is not satisfied with the decision of the 
Roard may, within [thirty (30)] FIFTEEN (15) days after receipt of the decision of said 
Board, appeal to the Central Board of Assessment Appeals, as herein provided. The 
decision of the Central Board OF ASSESSMENT APPEAL shall be final and executory. 
IT HAS ONE HUNDRED TWENTY (120) DAYS TO DECIDE THE APPEAL FROM THE 
DATE OF THE RECEIPT THEREOF. 
54 


SECTION 74. Section 230 of the Code is hereby amended to read as follows: 
Section 230. Central Board of Assessment Appeals. The Central 
Board Assessment Appeals shall be composed of a chairman and two members to be 
appointed by the President, who shall serve for a term of seven years, without 
reappointment. Of those first appointed, the chairman shall hold office for seven years, 
one member for five years, and the other member for three years. Appointment to any 
vacancy shall only be for the unexpired portion of the term of the predecessor. In no 
case shall any member be appointed or designated in temporary or acting capacity. 
The chairman and the members of the Board shall be Filipino citizen, at least forty years 
old at the time of their appointment, and members of the Bar or Certified Public 
Accountant for at least ten (IO) years immediately preceding their appointment. The 
rhairman of the Board of Assessment Appeal shall have the salary grade equivalent to 
the rank of Director [Ill] IV under the Salary Standardization Law exclusive of 
allowances and other emoluments. The members of the Board shall have the salary 
grade equivalent to the rank of Director [Ill 111 under the Salary Standardization Law 
exclusive of allowances and other emoluments. The Board shall have appellate 
jurisdiction over all assessment cases decided by the Local Board of Assessment 
;'.ppsals. 
There shall be Hearing Officer to be appointed by the Central Board of 
Assessment Appeals pursuant to civil service law, rules and regulations, one each for 
Luzon, Visayas and Mindanao, who shall hold office in Manila, Cebu and Cagayan de 
Oro City, respectively, and who shall serve for a term of six (6) years, without 
reappointment until their successor have been appointed and qualified. The hearing 
Officer shall have the same qualifications as that of the Judges of the Municipal Trial 
court. 
,
.
 
The Hearing Officer shall have the salary grade equivalent to the rank of Director 
[I] II under the Salary Standardization Law exclusive of allowances and other 
emoluments. 
9 
55 


SECTION 75. Section 232 of this Code is hereby amended to read as 
follows: 
Section 232. Power to Levy Real Property Tax. - A province or city or a 
municipality within the Metropolitan Manila Area may levy an annual ad valorem tax on 
real property such as land, building, machinery, and other improvement not hereinafter 
s-ecifically exempted. IN THE CASE OF A LEVY IMPOSED BY THE PROVINCE, 
SHALL BE GUIDED BY THE INCOME CLASSIFICATION OF THE MUNICIPALITIES 
WITHIN THE PROVINCE. 
SECTION 76. Section 271 of the Code is hereby amended to read as follows: 
Section 271. Distribution of Proceeds. - The proceeds of the basic real 
troperty tax, including interest thereon, and proceeds from the use, lease or disposition, 
sale or redemption of property acquired at a public auction, in accordance with the 
provisions of this Title, by the province, or city or a municipality within the Metropolitan 
Manila Area shall be distributed as follows: 
(a) In the case of provinces: 
(1) Province - Thirty[-five] percent [(35%)](30%) shall accrue to the 
general fund; 
(2) Municipality - Forty-FIVE percent [(40%)](45%) to the general fund of 
the municipality where the property is located; and 
(3) Barangay - Twenty-five percent (25%) shall BE DISTRIBUTED 
[accrue] to THE COMPONENT barangay [where the property is 
located] IN THE FOLLOWING MANNER:[.] 
(I) SIXTY 
PERCENT (60%) 
SHALL ACCRUE TO THE 
BARANGAY WHERE THE PROPERTY IS LOCATED; 
(11) FORTY PERCENT (40%) SHALL ACCRUE EQUALLY TO ALL 
OTHER BARANGAYS OF THE MUNICIPALITY. 
(b) In the case of cities: 
(1) Seventy percent (70%) shall accrue to the general fund of the city; and 
56 


(2) Thirty percent (30%) shall be distributed among the component 
barangays of the cities [where the property is located] in the following 
manner: 
(i) Fifty percent (50%) shall accrue to the barangay where the 
property is located; 
(ii) Fifty percent (50%) shall accrue equally to all component 
barangays of the city. 
(c) In the case of a municipality within the Metropolitan Manila Area: 
(1) The Metropolitan Manila Authority- Thirty-five percent (35%) shall 
accrue to the general fund of the Metropolitan Manila Authority; 
(2) Municipality - Thirty-five percent (35%) shall accrue to the general 
fund of the municipality where the property is located; 
(3) 
Barangays Thirty percent (30%) shall be distributed among the 
component barangays of the municipality [where the property is 
located ] in the following manner: 
(i) Fifty percent (50%) shall accrue to the barangay where the 
property is located; and 
(ii) Fifty percent (50%) shall accrue equally to all THE OTHER 
component barangays of the municipality. 
(d) The share of each barangay shall be released without need of any further 
action directly to the barangay treasurer on a quarterly basis, within five (5) days after 
the end of each quarter, and shall not be subject to any lien 'or holdback for whatever 
gurpose. 
SECTION 77. Section 272 of the Code is hereby amended to read as follows: 
Section 272. Application of the Proceeds of the Additional One 
Percent SEF Tax. - The proceeds from the additional one percent (1%) tax on real 
property accruing to the Special Education Fund (SEF) shall be automatically released 
:J the local school boards[: Provided, That,]. [illn THE case of provinces, FORTY 
PERCENT (40%) OF the proceeds shall [be divided equally between] ACCRUE TO the 


provincial SCHOOL BOARDS and SIXTY PERCENT (60%) TO THE municipal school 
boards: Provided, [however,] That the proceeds shall be allocated for the operation and 
maintenance of public schools, construction and repair of school buildings, facilities and 
equipment, educational researches, purchase of books and periodicals, [and] sports 
development, AND 
ALLOWANCES 
FOR TEACHING AND 
NON-TEACHING 
PERSONNEL, as determined and approved by the [IILocal [s]School [b]Boards. 
SECTION 78. Section 273 of the Code is hereby amended to read as follows: 
Section 273. 
Proceeds of Tax on Idle Lands. - The proceeds of the 
additional real property tax on idle lands shall [accrue to the respective general fund of 
the province, or, city, where the land is located. In the case of a municipality within the 
Metropolitan Manila Area, the proceeds shall accrue equally to the Metropolitan Manila 
Authority and the municipality here the land is located] BE DISTRIBUTED AS 
FOLLOWS: 
(A) 
IN THE CASE OF PROVINCES: 
1) 
PROVINCE - THIRTY PERCENT (30%) SHALL ACCRUE TO 
THE GENERAL FUND; 
2) 
MUNICIPALITY - FORTY-FIVE PERCENT (45%) TO THE 
GENERAL FUND OF THE MUNICIPALITY WHERE THE PROPERTY 
IS LOCATED; AND 
3) 
BARANGAY - TWENTY-FIVE PERCENT (25%) SHALL BE 
DISTRIBUTED TO THE COMPONENT BARANGAY OF THE 
MUNICIPALITY IN THE FOLLOWING MANNER: 
(I) SIXTY PERCENT (60%) SHALL ACCRUE TO THE BARANGAY 
WHERE THE PROPERTY IS LOCATED; 
(11) FORTY PERCENT (40%) SHALL ACCRUE EQUALLY TO ALL 
OTHER BARANGAYS OF THE MUNICIPALITY. 
(B) 
IN THE CASE OF CITIES: 
(1) SEVENTY PERCENT (70%) SHALL ACCRUE TO THE GENERAL 
FUND OF THE CITY; AND 


(1) THIRTY PERCENT (30%) SHALL BE DISTRIBUTED AMONG THE 
COMPONENT BARANGAYS OF THE CITY IN THE FOLLOWING 
MANNER: 
(1) 
FIFTY PERCENT (50%) 
SHALL ACCRUE TO THE 
BARANGAY WHERE THE PROPERTY IS LOCATED; 
(11) 
FIFTY PERCENT (50%) SHALL ACCRUE EQUALLY TO ALL 
OTHER BARANGAYS OF THE CITY. 
(C) 
IN THE CASE OF A MUNICIPALITY WITHIN THE METROPOLITAN 
MANILA AREA: 
(1) MUNICIPALITY - SEVENTY PERCENT (70%) SHALL ACCRUE TO 
THE GENERAL FUND OF THE MUNICIPALITY WHERE THE 
PROPERTY IS LOCATED; 
(2) BARANGAYS - THIRTY PERCENT (30%) SHALL BE OlSTRfBUTED 
AMONG THE COMPONENT BARANGAYS OF THE MUNICIPALITY 
IN THE FOLLOWING MANNER: 
(I) FIFTY PERCENT (50%) SHALL ACCRUE TO THE BARANGAY 
WHERE THE PROPERTY IS LOCATED; AND 
(11) FIFTY PERCENT (50%) SHALL ACCRUE EQUALLY TO ALL THE 
OTHER COMPONENT BARANGAYS OF THE MUNICIPALITY. 
SECTION 79. Section 284 of the Code is hereby amended to read as follows: 
Section 284. [Allotmeng SHARE of [Internal Revenue] NATIONAL 
&'axes. - UPON APPROVAL OF THIS CODE, AS AMENDED, [Ljlocal government 
units [shall have a] ARE ENTITLED TO A FIFTY PERCENT (50%) share [in the] OF 
national [internal revenue] taxes based on the collection of the third fiscal year 
preceding the current fiscal year [as follows:]. 
[(a) On the first year of the effectivity of this Code, thirty percent (30%); 
(b) On the second year, thirty-five percent (35%); and 
(c) On the third year and thereafter, forty percent (40%); 


[Provided, That in the event that the National Government incurs an 
unmanageable public sector deficit, the President of the Philippines is hereby 
authorized, upon the recommendation of the Secretary of Finance, Secretary of Interior 
and Local Government, and Secretary of Budget and Management, and subject to 
consultations with the presiding officers of both Houses of the Congress and the 
Presidents of the Liga, to make the necessary adjustments in the internal revenue 
allotment of local government units, but in no case shall the allotment be less than thirty 
percent (30%) of the collection of the internal revenue taxes the third fiscal year 
preceding the current fiscal year. Provided, further, That in the first year of the effectivity 
of this Code, the local government units shall, in addition to the thirty percent (30%) 
internal revenue allotment which shall include the cost of devolved functions for 
essential public services, be entitled to receive the amount equivalent to the cost of 
devolved personal services.] 
SECTION 80. Section 285 of the Code is hereby amended to read as follows: 
Section 285. A//ocation to Local Government Units. - The share of 
!ncal government units in the [internal revenue] NATIONAL TAXES [allotment], WHICH 
IS AUTOMATICALLY APPROPRIATED AND OBLIGATED, shall be allocated in the 
following manner: 
(a) Provinces - Twenty-three percent (23%); 
(b) Cities - Twenty-[three] ONE percent [(23%)] (21%); 
(c) Municipalities - Thirty-[four] SIX percent [(34%)] (36%); and 
(d) Barangayts] - 
Twenty percent (20%) 
Provided, however, That the share of each province, city and municipality shall 
be determined on the basis of the following formula: 
(a) Population - Fifty percent (50%) 
(b) Land Area - Twenty-five percent (25%) 
(c) Equal sharing - Twenty-five percent (25%) 


SECTION 81. Section 286 of the Code is hereby amended to read as follows: 
Section 286. Automatic Release of Shares. - (a) The share of each 
local government unit shall be released without need of any further action, directly to 
the provincial, city, municipal or barangay treasurer, as the case may be, on a 
MONTHLY OR quarterly basis within five (5) days after the end of each MONTH OR 
quarter [, and which 1. 
(B) SAID SHARE shall not be subject to any lien, or holdback that may be 
imposed by the [national] CENTRAL government for whatever purpose. 
[(b)](C) Nothing in this Chapter shall be understood to diminish the share of local 
government units under existing laws. 
SECTION 82. Section 287 of the Code is hereby amended to read as follows: 
Section 287. Local Development Projects. - Each local government unit 
shall appropriate in its annual budget no less than [twenty percent (20%)] THIRTY 
PERCENT (30%) of its annual [internal revenue] NATIONAL TAX [allotment] SHARE for 
development projects. PROVIDED, HOWEVER, THAT AT LEAST TH/RTY PERCENT 
(30%) OF WHICH SHALL BE APPROPRIATED FOR THE DEVELOPMENT OF 
COASTAL RESOURCES OF ClTIES AND MUNICIfAL/T/ES CONCERNED, IN 
ACCORDANCE WITH THE ANNUAL INVESTMENT PROGRAM EMBODIED IN THE 
LOCAL DEVELOPMENT PLAN PREPARED BY THE LOCAL DEVELOPMENT 
COUNCIL AND APPROVED BY THE SANGGUNIANG CONCERNED. [Copies of the 
development plans of the local government units shall be furnished the Department of 
Interior and Local Government.] 
SECTION 83. Section 289 of this Code is hereby amended to read as follows: 
Section 289. Share in the Proceeds from the Development and 
Utilization of the National Wealth. Local government units shall have an equitable 
share in the proceeds derived from the utilization and development of the national 
wealth within their respective areas, including sharing the same with the inhabitants by 
way of direct benefits. 


NATIONAL WEALTH SHALL BE DEFINED AS ALL NATURAL 
RESOURCES SITUATED WITHIN THE TERRITORIAL JURISDICTION OF THE 
REPUBLIC INCLUDING BUT NOT LIMITED TO LANDS OF PUBLIC DOMAIN, 
WATERS, MINERALS, POTENTIAL ENERGY SOURCES, GAS AND OIL DEPOSITS, 
FOREST PRODUCTS, FLORA AND FAUNA, FISHERY AND AQUATIC RESOURCES, 
ALL QUARRY PRODUCTS, AND OTHER RESOURCES WHICH CAN BE 
EXTRACTED OR UTILIZED. 
SECTION 84. Section 290 of the Code is hereby amended to read as follows: 
Section 290. Amount of Share of Local Government Units. - Local 
government units shall, I]ln addition to their SHARE OF THE [internal revenue] 
NATIONAL TAXES, LOCAL GOVERNMENT UNITS SHALL [allotment] have a share of 
[forty percent (40%)] SIXTY PERCENT (60%) of the gross collection derived by the 
National Government [from] IN the preceding fiscal year from mining taxes, royalties, 
forestry and fishery charges, and such other taxes, fees, or charges, including related 
surcharges, interests, or fines, and from its share in any co-production, joint venture or 
Froduction sharing agreement in the utilization and development of the national wealth 
within their territorial jurisdiction. 
SECTION 85. Section 294 of the Code is hereby amended to read as follows: 
Section 294. Development and Live/ihood Projects. - The proceeds 
from the share of local government units pursuant to this chapter shall be appropriated 
by their respective sanggunian to finance development and livelihood projects[: 
Provided, however, That]. [eIEighty percent (80%) of the proceeds derived from the 
development and utilization of hydro-thermal, geothermal, and other sources of energy 
shall be applied [solely] to lower the cost of electricity AND TO FINANCE 
DEVELOPMENT PROJECTS in the local government unit where [such a] THE source 
of energy is located. 
62 


SECTION 86. Section 296 of the Code is hereby amended to read as follows: 
Section 296. General Policy. - 
(a) It shall be the basic policy that any local government unit may create 
indebtedness, and avail of credit facilities to finance local infrastructure and other socio- 
economic development projects in accordance with the approved local development 
plan and public investment program. 
(b) A local government unit may avail of credit lines from [government or private 
banks] ANY BANK and OTHER lending institutions AUTHORIZED BY THE BANGKO 
SENTRAL NG PILIPINAS, for the purpose of stabilizing local finances. 
SECTION 87. Section 297 of the Code is hereby amended to read as follows: 
Section 297. Loans, Credits, and Ofher Forms of Indebtedness of 
Local Government Units. - 
(a) A local government unit may [contract] SECURE loans, credits, 
GUARANTEES and other forms of indebtedness with any government or domestic 
private bank, and other lending institutions, to finance the construction, installation, 
improvement, expansion, operation, or maintenance of public facilities, infrastructure 
facilities, housing projects, [the] acquisition of real property, and [the] implementation of 
other capital investment projects, subject to such terms and conditions as may be 
agreed upon by the local government unit and the lender. The proceeds from such 
transactions shall accrue directly to the local government unit concerned. 
(b) xxx 
(c) Government financial and other lending institutions are hereby authorized to 
grant loans, credits, and other forms of indebtedness out of their loanable funds to local 
government units for purposes specified above. 
GOVERNMENT FINANCING INSTITUTIONS SHALL OPEN APPROPRIATE 
LENDING WINDOWS FOR LOCAL GOVERNMENT UNITS. THESE FINANCIAL 
INSTITUTIONS SHALL 
LEND TO 
FOURTH, FIFTH AND 
SIXTH CLASS 
MUNICIPALITIES. CITIES AND PROVINCES AT CONCESSIONAL RATES. 


(D) THE LOCAL GOVERNMENT UNIT CONCERNED SHALL PUBLISH ALL 
LOANS APPLIED FOR, SPECIFYING THE AMOUNT TO BE BORROWED, THE 
PROJECT TO BE FUNDED, THE SECURITY OFFERED, AND THE TERMS OF 
PAYMENT IN A NEWSPAPER OF LOCAL CIRCULATION, IF ANY OR IF THERE IS 
NONE, IN A NEWSPAPER OF GENERAL CIRCULATION IN THE PROVINCE, CITY, 
MUMICIPALITY OR BARANGAY CONCERNED. THE PUBLICATION SHALL BE 
DONE IN THREE (3) CONSECUTIVE ISSUES OF A DAILY NEWSPAPER. 
UPON THE FILING OF THE LOAN, THE PROVINCIAL GOVERNMENT 
CONCERNED SHALL CAUSE THE POSTING OF THE LOAN APPLICATION IN ALL 
THE CITY OR MUNICIPAL HALLS OF THE PROVINCE. IN THE CASE OF A CITY 
OR MUNICIPALITY, THE LOAN APPLICATION SHALL BE POSTED IN ALL 
BARANGAY HALLS AND IN THE MUNICIPAL OR CITY HALL CONCERNED. 
IN THE CASE OF THE BARANGAY, THE LOAN APPLICATION SHALL BE 
POSTED IN THE BARANGAY HALL AND IN CONSPICUOUS AND PUBLICLY 
ACCESSIBLE PLACES. 
FAILURE TO COMPLY WITH THIS PROVISION WILL SUBJECT THE LOCAL 
EXECUTIVE CONCERNED TO DISCIPLINARY ACTION UNDER SECTION 60 OF 
THIS CODE. 
SECTION 89. Section 299 of the Code is hereby amended to read as follows: 
Section 299. Bonds and Other Long-Term Securities. Subject to the 
rules and regulations of the Central Bank and the Securities and Exchange 
Commission, provinces, cities, and municipalities are hereby authorized to issue bonds, 
debentures, securities, collateral[s], notes and other obligations to finance self- 
liquidating, income-producing development or livelihood projects pursuant to the 
priorities established in the approved local development plan or the public investment 
program. The sanggunian concerned shall, through an ordinance approved by a 
majority of all its members, declare and state the terms and conditions of the bonds and 
tne purpose for which the proposed indebtedness is to be incurred. 
64 


THE 
SANGGUNIAN 
CONCERNED 
MAY 
EXEMPT 
SAID 
BONDS, 
DEBENTURES, SECURITIES, COLLATERAL, NOTES AND OTHER OBLIGATIONS 
FROM LOCAL TAXES. 
SECTION 89. Section 302 of the Code is hereby amended to read as follows: 
Section 302. Financing, Construction, Maintenance, Operation, and 
Management of Infrastructure AND OTHER DEVELOPMENT Projects by the 
Private Sector. - 
(a) Local government units may enter into contracts with any [duly pre-] qualified 
[ individual contractor, ] PROJECT PROPONENT INCLUDING COOPERATIVES AND 
NON-GOVERNMENT ORGANIZATIONS for the financing, construction, operation, 
MANAGEMENT, PROVISIONING and/OR 
maintenance of any financially viable 
[infrastructure] DEVELOPMENT PROJECT [ facilities ] under the build-operate-and- 
transfer agreement AND/ OR ITS VARIANTS, OR UNDER CONTRACT OF 
MANAGEMENT, 
SERVICE, 
LEASE, 
CONCESSION, JOINT VENTURE, 
OR 
COMBINATION THEREOF, 
OR UNDER ANY 
OTHER PRIVATE SECTOR 
PARTICIPATION ARRANGEMENT, AS PROVIDED FOR UNDER R.A. 6957, AS 
AMENDED, [subject to the applicable provisions of Republic Act Numbered Sixty-nine 
hundred fifty seven ( R.A. 6957 ) authorizing the financing, construction, operation and 
maintenance of infrastructure projects 
by the private sector and the rules and 
regulations issued thereunder and such terms and conditions provided in this Section. ] 
ALL PROJECTS IMPLEMENTED UNDER THIS SECTION SHALL BE SUBJECT 
TO THE FOLLOWING TERMS AND CONDITIONS: 
(1) NO APPROVAL BY ANY NATIONAL GOVERNMENT AGENCY, OFFICE OR 
INSTRUMENTALITY IS REQUIRED FOR IMPLEMENTATION OF THE 
PROJECT, REGARDLESS OF ITS COST, UNDER WHATEVER PRIVATE 
SECTOR PARTICIPATION AGREEMENT, OR WHETHER INVOLVING ONE 
OR MORE LOCAL GOVERNMENT UNITS. 
65 


WHERE THE 
PROJECT INVOLVES TWO 
OR MORE LOCAL 
GOVERNMENT 
UNITS, 
THE 
APPROVAL 
BY 
ITS 
RESPECTIVE 
SANGGUNIAN IS REQUIRED. 
FOR PROJECTS JOINTLY PURSUED BY ONE OR MORE LOCAL 
GOVERNMENT UNITS AND THE NATIONAL GOVERNMENT, OR ITS 
AGENCIES 
OR 
INSTRUMENTALITIES, THE APPROVAL 
BY THE 
INVESTMENT COORDINATING COMMITTEE (ICC) OF THE NATIONAL 
ECONOMIC AND DEVELOPMENT AUTHORITY 
(NEDA) SHALL BE 
REQUIRED. 
ALL PROJECT PROPOSALS SHALL FIRST UNDERGO THE PROCESS 
REQUIRED UNDER SECTION 114 OF THIS CODE. 
(2) ONLY THE APPROVAL OF THE SANGGUNIAN CONCERNED IS 
REQUIRED 
FOR 
LOCALLY FUNDED 
PROJECTS 
IMPLEMENTED 
THROUGH COMPETITIVE PUBLIC BIDDING, 
INCLUDING TOLLS, 
CHARGES, RENTALS OR FEES, AND ADJUSTMENTS THEREON, FOR 
THE USE OF SAID PROJECTS OR FACILITIES. THE AGREEMENT OF 
THE PARTIES IMPLEMENTING THE PROJECTS MAY DEFINE THE 
NATURE AND EXTENT OF SAID ADJUSTMENTS. 
(3) TOLLS, CHARGES, RENTALS OR FEES, INCLUDING ADJUSTMENTS 
THEREON, FOR THE USE OF PROJECTS OR FACILITIES SUBJECT TO 
NEGOTIATED CONTRACTS SHALL REQUIRE APPROVAL BY THE 
SANGGUNIAN CONCERNED. 
(4) LOCAL GOVERNMENT UNITS IMPORTING HEAVY EQUIPMENT AND 
MACHINERY ARE EXEMPT FROM PAYMENT OF DUTIES, TAXES OR 
CHARGES FOR IMPLEMENTING DEVELOPMENT PROJECTS. 
(5) THE REQUIREMENTS OF CONSULTATION PROVIDED FOR UNDER 
SECTIONS 2 (D), 26 AND 27 SHALL BE COMPLIED WITH. 
(b) Local government units shall include in their respective local development 
Oians and public investment programs priority projects that may be financed, 
constructed, operated and maintained by the private sector under this Section. It shall 
66 


be the duty of the local government unit concerned to disclose to the public all projects 
eligible for financing under this Section, including official notification of duly registered 
contractors AND SUPPLIERS OF GOODS AND SERVICES and publication in 
newspapers of general or local circulation, in conspicuous and accessible public places. 
Local projects under the build-operate-transfer agreement shall be confirmed by the 
:ucal development councils. 
(c)xxx 
SECTION 90. Section 305 of the Code is hereby amended to read as follows: 
Section 305 - Fundamental Principles - The financial affairs, 
transactions, and operations of local government units shall be governed by the 
?ollo;Ning fundamental principles: 
(a) xxx 
(b) xxx 
(9 Every officer of the local government unit whose duties permit or require the 
possession or custody of local funds shall be properly bonded EQUIVALENT TO THE 
AMOUNT HElSHE IS AUTHORIZED TO KEEP OR HOLD, and such officer shall be 
accountable and responsible for said funds and for the safekeeping thereof in 
conformity with the provisions of law; 
SECTION 91. Section 31 1 of the Code is hereby amended to read as follows: 
Section 31 I. Depository Account. - Local treasurers shall maintain 
depository accounts in the name of their respective local government units with banks 
DULY AUTHORIZED BY THE BANGKO SENTRAL NG PILIPINAS [, preferably 
government -owned] 
PREFERABLY 
NEAREST TO 
THE 
SEAT 
OF 
ITS 
GOVERNMENT. [located in or nearest to their respective areas of jurisdiction.] Earnings 
of each depository account shall accrue exclusively thereto. 
SECTION 92. Section 374 (b)(l) of the Code is hereby amended to read as 
follows: 
67 


Section 314. Form and Content. - (a) Local government budgets shall 
primarily consist of two (2) parts: 
(1) xxxx 
(2) xxxx 
(b) The budget document shall contain: 
(1) [A ] THE budget message of the local chief executive setting forth [in 
brief] the significance of the executive budget, particularly in relation to the 
approved 
[local developmentj ANNUAL INVESTMENT plan WHICH 
SHALL FORM PART OF THE BUDGET DOCUMENT; 
(2) xxxx 
(3) xxxx 
SECTION 93. Section 318 of the Code is hereby amended to read as follows: 
Section 318. Preparation of the Budget by the Local Chief Executive. 
- Upon receipt of the statements of income and expenditures from the treasurer, the 
budget proposals of the heads of departments and offices, and the estimates of THE 
REGULAR income and budgetary ceilings from the local finance committee, the local 
chief executive shall prepare the executive budget for the ensuing fiscal year in 
accordance with the provisions of this Title. 
The local chief executive shall submit the said executive budget to the 
sanggunian concerned not later than the sixteenth (16th) of October of the current fiscal 
year. Failure to submit such budget on the date prescribed herein shall subject the local 
chief executive to such criminal and administrative penalties as provided for under this 
Code and other applicable laws. 
SECTION 94. Section 321 of the Code is hereby amended to read as follows: 
Section 321. Changes in the annual budget All budgetary proposals 
shall be included and considered in the budget preparation process. After the local chief 
cqxecutive concerned shall have submitted the executive budget to the sangguniang, no 
ordinance providing for the supplemental budget shall be enacted except when 
68 


supported by funds actually available as certified by local treasurer or by new revenue 
sources. THE LOCAL GOVERNMENT UNIT REALIZES ADDITIONAL INCOME AS 
CERTIFIED TO BY THE LOCAL TREASURER COMING FROM ANY SOURCE 
DURING THE CURRENT FISCAL YEAR. THE DEVELOPMENT PROJECTS 
FINANCED BY THE SUPPLEMENTAL BUDGET SHALL BE INCORPORATED IN THE 
: OCAL DEVELOPMENT PLAN AND ANNUAL INVESTMENT PROGRAM. 
SECTION 95. Section 323 of the Code is hereby amended to read as follows: 
Section 323. Failure to Enact the Annual Appropriafions. - In case 
the sanggunian concerned fails to pass the ordinance authorizing the annual 
appropriations at the beginning of the ensuing fiscal year THE BUDGET AS 
SUBMITTED BY THE LOCAL EX€CUT/V€ CONCERNED, 
SHALL BE DEEMED 
APPROVED. It shall continue to hold DAILY sessions, EXCLUSIVE OF SATURDAYS, 
SUNDAYS AND HOLIDAYS, without additional remuneration for its members, until such 
ordinance is approved, and no other business may be taken up during such sessions. If 
the sanggunian still fails to enact such ordinance after [ninety ( 90) J SIXTY (60) days 
from the beginning of the fiscal year, the ordinance authorizing the appropriations of the 
preceding year shall be deemed reenacted and shall remain in force and effect until the 
ordinance authorizing the proposed appropriations is passed by the sanggunian 
concerned. However, only the annual appropriations for salaries and wages of existing 
positions, statutory and contractual obligations, and essential operating expenses 
authorized in the annual and supplemental budgets for the preceding year shall be 
deemed reenacted and disbursement of funds shall be in accordance therewith. 
SECTION 96. Section 324 of the Code is hereby amended to read as follows: 
Section 324. Budgetary Requirements. - The budgets of local 
government units for any fiscal year shall comply with the following requirements: 
(a)xxxx 
(b)xxxx 
69 


(d) Five percent ( 5% ) of the estimated revenue from regular source shall be set 
aside as an 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 a portion thereof, of the local government unit [or other areas] 
declared in a state of calamity by the [President] GOVERNOR IN THE CASE OF A 
PROVINCE AND THE MAYOR IN THE CASE OF A CITY OR MUNICIPALITY. A COPY 
5 F  THE DECLARATION SHALL IMMEDIATELY BE FURNISHED THE SANGGUNIAN 
OF THE LOCAL GOVERNMENT UNIT CONCERNED. THE SANGGUNIAN MAY 
CONCUR OR REJECT THE DECLARATION OF CALAMITY. IN THE EVENT OF A 
REJECTION BY THE SANGGUNIAN OF THE DECLARATION OF CALAMITY, NO 
LOCAL GOVERNMENT FUNDS SHALL BE DISBURSED THEREFOR. FAILURE OF 
THE SANGGUNIAN CONCERNED TO ACT ON THE DECLARATION OF CALAMITY 
WITHIN TWENTY-FOUR (24) HOURS FROM ITS RECEIPT OF THE COPY OF THE 
DECLARATION OF CALAMITY MENTIONED ABOVE, THE SAME SHALL BE 
DEEMED APPROVED. 
(e) AT LEAST TWENTY PERCENT (20%) OF THE SHARES OF THE LOCAL 
GOVERNMENT UNITS FROM THE INTERNAL REVENUE ALLOTMENT SHALL BE 
SET ASIDE TO DEFRAY THE COST OF THE DEVOLVED BASIC SERVICES AND 
FACILITIES IN ACCORDANCE WITH SECTION 17, PARAGRAPH (G) OF THE CODE. 
SECTION 97. Section 325 of the Code is hereby amended to read as follows: 
Section 325. General Limitations. - The use of provincial, city, and 
municipal funds shall be subject to the following limitations: 
(a) The [total] appropriations, whether annual or supplemental, for personal 
services of a local government unit for one (1) fiscal year shall not exceed forty-five 
percent (45%) in the case of first to third class provinces, cities and municipalities, and 
fifty-five percent (55%) in the case of fourth class or lower, of the annual income from 
regular sources realized in the next preceding fiscal year. The appropriations for 
salaries, wages, representation and transportation allowances of officials and 
employees of the public utilities and economic enterprises owned, operated and 
70 


maintained by the local government unit concerned shall not be included in the annual 
budget or in the computation of the maximum amount for personal services. The 
appropriation for the personal services of such economic enterprises shall be charged 
to their respective budgets. 
(b) xxx 
(c) xxx 
SECTION 98. Section 326 of the Code is hereby amended to read as follows: 
[Section 326. Review of Appropriation Ordinances of Provinces, 
Highly - Urbanized Cities, Independent Component Cities, and Municipalities 
within the Metropolitan Manila Area. - The Department of Budget and Management 
shall review ordinances, authorizing the annual or supplemental appropriations of 
provinces, highly-urbanized cities, independent component cities, and municipalities 
within the Metropolitan Manila Area in accordance with the immediately succeeding 
Section. ] 
SECTION 99. Section 327 of the Code is hereby amended to read as follows: 
Section 327. Review of Appropriation Ordinances of Component 
Cities and Municipalities. - 
The sanggunian panlalawigan shall review the ordinance authorizing annual or 
supplemental appropriation of component cities and municipalities in the same manner 
and within the same period prescribed for the review of other ordinances. 
If within [ninety (go)] THIRTY (30) days from receipt of copies of such ordinance, 
iiie sangguniang panlalawigan takes no action thereon, the same shall be deemed to 
have been reviewed in accordance with law and shall continue to be in full force and 
effect. If within the same period, the sangguniang panlalawigan shall have ascertained 
that the ordinance authorizing annual or supplemental appropriations has not complied 
with the requirements set forth in this Title, the sangguniang panlalawigan shall, within 
[ninety day] THE period, [hereinabove prescribed,] declare such ordinance inoperative 
in its entirety or in part. Items of appropriation contrary to limitations prescribed in this 
71 


Title or in excess of the amounts prescribed herein shall be disallowed or reduced 
accordingly. 
The sanggunian panlalawigan shall within the same period advise the 
sangguniang panlungsod or sangguniang bayan concerned through the local chief 
executive of any action on the ordinance under review. Upon receipt of such advice, 
the city or municipal treasurer concerned shall not make further disbursement of funds 
from any of the items of appropriation declared inoperative, disallowed or reduced. 
SECTION 100. Section 329 of the Code is hereby amended to read as follows: 
Section 329. Barangay funds. - Unless otherwise provided in this Title, 
all the income of the barangay from whatever source INCLUDING ITS SHARE OF THE 
NATIONAL TAXES AS PROVIDED UNDER SECTION 286 OF THIS CODE shall 
accrue to its general fund and shall [, at the option of the barangay concerned, be kept 
as trust fund in the custody of the city or municipal treasurer, or ] be RELEASED TO 
AND deposited FOR THE ACCOUNT OF THE BARANGAY in a bank [, preferably 
government owned,] PREFERABLY LOCATED WITHIN THE BARANGAY. [situated in 
or nearest to its area of jurisdiction.] Such funds shall be disbursed PURSUANT TO AN 
APPROVED ORDINANCE BY THE BARANGAY CONCERNED in accordance with the 
provisions of this Title. Ten percent (10%) of the general fund of the barangay shall be 
[set aside] AUTOMATICALLY APPROPRIATED AND OBLIGATED for the Sangguniang 
Kabataan WHICH SHALL BE RELEASED TO AND DEPOSITED TO THE ACCOUNT 
OF THE SANGGUNIANG KABATAAN IN A BANK PREFERABLY LOCATED WITHIN 
THE BARANGAY WITHIN TWENTY (20) DAYS AFTER THE END OF EVERY 
QUARTER OF THE CURRENT YEAR. 
SUCH FUNDS SHALL BE DISBURSED 
PURSUANT TO AN APPROVED RESOLUTION BY THE SANGGUNIAN KABATAAN 
CONCERNED. 
SECTION 101. Sec. 334 of the Code is hereby amended to read as follows: 
Section 334. Barangay Financial Procedure. (a) The barangay treasurer shall 
collect all taxes, fees and other charges due and contributions accruing to the barangy 
72 


for which he shall issue receipts, and shall deposit all collections [with the city or 
municipality treasury or] in the depository account maintained in the name of the 
barangay within (5) days after receipt thereof. 
SECTION 102. Sec. 339 of this Code is hereby amended to read as follows: 
Section 339. Cask Advances. -No Cash advance shall be granted to any 
local official or employee, elective or appointive, unless made in accordance with the 
rules and regulations as the COA may prescribe. ANY LOCAL ELECTIVE OR 
APPOINTIVE OFFICIAL WHO 
HAS AVAILED 
OF 
CASH ADVANCES 
IN 
CONNECTION WITH HlSlHER DUTIES SHALL LIQUIDATE THE SAID CASH 
ADVANCES WITHIN ONE (1) YEAR FROM THE AVAILMENT THEREOF. FAILURE 
TO LIQUIDATE THE SAID CASH ADVANCES WITHIN THE PERIOD ABOVE 
PRESCRIBED SHALL CAUSE THE AUTOMATIC DEDUCTION BY THE LOCAL 
TREASURER CONCERNED EQUAL TO TWENTY-FIVE PERCENT (25%) OF THE 
MONTHLY SALARY, HONORARIUM AND ALLOWANCES OF THE OFFICIAL OR 
EMPLOYEE CONCERNED UNTIL THE UNLIQUIDATED CASH ADVANCE IS FULLY 
PAID WITHOUT 
PREJUDICE TO 
THE 
APPROPRIATE 
ADMINISTRATIVE 
SANCTIONS THAT MAY BE IMPOSED UPON HIM/HER BY THE PROPER 
AUTHORITIES. FAILURE OF THE LOCAL TREASURER CONCERNED TO CAUSE 
THE DEDUCTION MENTIONED ABOVE SHALL SUBJECT THE SAID TREASURER 
TO ADMINISTRATIVE OR CRIMINAL SANCTIONS. 
SECTION 103. Section 344 of the Code is hereby amended to read as follows: 
Section 344. Certification on, and Approval of, Vouchers. - No money shall 
be disbursed unless the local budget affker certifies to the existence of appropriation that 
has been legally made for the purpose, the local accountant has obligated said 
appropriation, and the local treasurer certifies to the availability of funds for the purpose. 
Vouchers and payrolls shall be certified to and approved by the head of the department or 
office who has administrative control of the fund concerned as to validity, propriety, and 
73 


legality of the claim involved. Except in cases of disbursements involving regularly 
recurring administrative expenses such as payralls for regular or permanent employees, 
expenses for light, water, telephone and telegraph services, remittances to government 
creditor agencles such as the GSIS, SSS, LBP, DBP, National Printing Office 
Procurement Service of the DBM and others, approval of the disbursement voucher by 
::le local chief executive [himselq OR BY THE DEPARTMENT HEADS OR CHIEFS OF 
HOSPITALS DULY AUTHORIZED BY THE LOCAL CHIEF EXECUTIVE CONCERNED, 
shall be required whenever local funds are disbursed. 
SECTION 104. Section 345 of the Code is hereby amended to read as follows: 
Section 345. Officials Authorized to Draw Checks in Settlement of 
c*lbllgafions. - Checks in settlement of obligations shall be drawn by the Treasurer and 
countersigned by the local [administrator] CHIEF EXECUTIVE, OR IN HISHER 
ABSENCE, AN OFFICIAL DULY AUTHORIZED BY LAW. CHECKS IN SETTLEMENT 
OF 
OBLIGATIONS 
DULY 
APPROPRIATED 
FOR 
PERSONAL 
SERVICES, 
MAINTENANCE AND OTHER OPERATING EXPENSES AND CAPITAL OUTLAY OF 
THE SANGGUNIAN SHALL BE COUNTERSIGNED BY THE VICE-GOVERNOR OR 
THE VICE-MAYOR FOR THE PROVINCE, CITY OR MUNICIPALITY, AS THE CASE 
MAY BE, OR IN HISIHER ABSENCE, BY AN OFFICIAL DULY AUTHORIZED BY LAW. 
INCASEOFTHEABSENCEOFTHETREASURERFORMORETHANTHREE 
(3) DAYS, THE SIGNING OF THE CHECKS ABOVE MENTIONED SHALL BE DONE 
BY AN OFFICIAL DULY AUTHORIZED BY LAW. 
CHECKS ISSUED IN SETTLEMENT OF OBLIGATIONS OF THE BARANGAY, 
SHALL BE SIGNED BY THE BARANGAY TREASURER WHO SHALL BE PROPERLY 
BONDED, AND COUNTERSIGNED BY THE PUNONG BARANGAY. 
IN THE 
ABSENCE OF EITHER OR BOTH OF THEM FOR MORE THAN THREE (3) DAYS, 
THE SANGGUNIANG BARANGAY, BY MAJORITY VOTE, SHALL DESIGNATE FROM 
AMONG THEMSELVES TWO (2) MEMBERS WHO SHALL BE SIGNATORIES TO 
HE CHECKS. 
74 


[In case of temporary absence or incapacity of the foregoing officials, these 
functions shall devolve upon their immediate assistants.] 
SECTION 105. Section 352 of the Code is hereby amended to read as follows: 
Section 352. Posting of the Summary of Income and Expenditures, - 
Local treasurers, accountants, budget officers and other accountable officers shall, 
within thirty (30) days from the end of each fiscal year, post in at least three (3) publicly 
accessible and conspicuous places SUCH AS PLAZA AND MAIN STREET in the local 
government unit CONCERNED, AND TO PUBLISH SAID STATEMENTS OF INCOME 
AND EXPENDITURES IN A NEWSPAPER OF GENERAL CIRCULATION, WHERE 
AVAILABLE, IN THE TERRITORIAL JURISDICTION OF SUCH UNIT, a summary of all 
revenues collected and funds received including the appropriations, and disbursements 
of such funds during the preceding fiscal year. FAILURE TO COMPLY WITH THIS 
REQUIREMENT 
SHALL 
SUBJECT 
THE 
OFFICIALS 
CONCERNED 
TO 
DISCIPLINARY ACTION IN ACCORDANCE WITH SECTION 60 OF THIS CODE. 
SECTION 106. Section 356 of the Code is hereby amended to read as folJows: 
Section 356. General Rule in Procurement or Disposal. - Except as 
otherwise provided herein, AND SUBJECT TO THE LIMITATIONS PROVIDED IN 
SECTION (364) OF THIS CODE, LOCAL GOVERNMENT UNITS ARE AUTHORIZED 
[acquisition of supplies by local government units] TO DIRECTLY ACQUIRE OR 
PROCURE SUPPLIES AND EQUIPMENT FROM EITHER LOCAL OR FOREIGN 
ZUPPLIERS [shall be] through competitive public bidding, WITHOUT NEED OF PRIOR 
APPROVAL OR AUTHORITY FROM ANY AGENCY O f  THE GOVERNMENT. 
Supplies which have become unserviceable or no longer needed shall be sold, 
whenever applicable, at public auction, subject to applicable rules and regulations. 
SECTION 107. Section 364 of the Code is hereby amended to read as follows: 
75 


Section 364. The Committee on Awards. - There shall be in every 
province, city or municipality a Committee on Awards to decide the winning bids and 
questions of awards and procurement and disposal of property. 
The Committee on Award shall be composed of the local chief executive as 
chairman, the local treasurer, the local accountant, the local budget officer, the local 
general services officer, [and] the head of office or department for whose use the 
supplies are being procured, ONE (1) REPRESENTATIVE OF THE PHILIPPINE 
INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS (PICPA), AND TWO (2) 
REPRESENTATIVES OF NON-GOVERNMENTAL ORGANIZATIONS THAT ARE 
REPRESENTED IN THE LOCAL DEVELOPMENT COUNCIL CONCERNED, TO BE 
CHOSEN BY THE ORGANIZATIONS THEMSELVES, as members. In case a head of 
office or department would sit in a dual capacity, a member of the sanggunian elected 
from among its members shall sit as a member. The Committee on Awards at the 
barangay level shall be the sangguniang barangay. No national official shall sit as a 
member of the Committee on Awards. 
The results of the bidding shall be made public by [conspicuously] posting the 
;ame 
IN A CONSPICUOUS PLACE in the provincial capitol or city, municipal, or 
barangay hall. 
SECTION 108. Section 367 of the Code is hereby amended to read as follows: 
Section 367. Procurement through Personal Canvass - Upon approval 
by the Committee on Awards, procurement of supplies may be effected after personal 
canvass of at least three (3) responsible suppliers in the locality by a committee of 
[three (3)] FOUR (4) composed of the local general services officer or the municipal or 
barangay treasurer, as the case may be, the local accountant, [and] the head of office 
or department for whose use the supplies are being procured, AND A 
REPRESENTATIVE OF NON-GOVERNMENTAL ORGANIZATION. The Awards shall 
be decided by the Committee on Awards. THE ACQUISITION AND PROCUREMENT 
BY LOCAL GOVERNMENT UNITS OF SUPPLIES, GOODS, EQUIPMENT AND 
SERVICES, EXCEPT CONSULTANTS AS AUTHORIZED BY THE SANGGUNIANG 


CONCERNED, THROUGH PERSONAL CANVASS IPurchases under this section] shall 
not exceed TWENTY-FIVE PERCENT (25%) OF the TOTAL amount[s] ALLOCATED 
FOR THE PURPOSE [specified hereunder for all items] in any one (1) month [for each 
local government unit:]. THE SERVICES PURCHASED THROUGH PERSONAL 
CANVASS SHALL BE PERFORMED AND COMPLETED WITHIN A PERIOD OF 
THIRTY (30) DAYS FROM THE DATE OF PURCHASE. 
["Provinces and Cities and Municipalities within the Metropolitan Manila Area: 
First and Second Class - One hundred fifty thousand pesos (P150,OOO.OO) 
Third and Fourth Class - One hundred thousand pesos (PlOO,OOO.OO) . 
"Fifth and Sixth Class - Fifty thousand pesos (P50,OOO.OO) 
"Municipalities: 
"First Class - Sixty thousand pesos (P60,OOO.OO). 
"Second and Third Class - Forty thousand pesos (P40,OOO.OO) 
"Fourth Class and Below -Twenty thousand pesos (P20,000.00).] 
SECTION 109. Section 369 of this Code is hereby amended to read as follows: 
Section 369. Negotiated Purchase. - 
(a) xxx 
(b) In case of repeat orders for regular supplies, procurement may be made by 
negotiated purchase; Provided, That the repeat order is made within SIX (6) [three (3)] 
months from the last procurement of the same item: Provided, further, That the same 
terms and conditions of sale are obtained for the said repeat order. 
BOOK THREE 
LOCAL GOVERNMENT UNITS 
Barangays 
77 


SECTION 110. Section 391 (a), (20) of the Code is hereby amended to read as 
follows: 
Section 391. Powers, Duties, and Functions. - (a) The sangguniang 
barangay, as the legislative body of the barangay, shall: 
xxx 
xxx 
xxx 
xxx 
xxx 
xxx 
xxx 
xxx 
xxx 
xxx 
xxx 
xxx 
(13) Authorize the barangay treasurer to make direct purchases in the amount 
not exceeding [one] FIVE thousand pesos [(PI ,000.OO)l (P5,OOO.OO) at any one time for 
the ordinary and essential administrative needs of the barangay. 
(14) Prescribe fines in amount not exceeding [one] FIVE thousand pesos 
[(PI ,OOO.OO)] (P5,OOO.OO) for violation of barangay ordinances. 
(1 5) xxx 
(20) Adopt measures [towards the prevention and eradication ofj TO PREVENT 
AND ERADICATE drug abuse, child abuse, and juvenile delinquency; PROVIDE 
ASSISTANCE TO BATTERED AND ABUSED WOMEN; AND ESTABLISH CRISES 
CENTERS TO SERVE THESE PURPOSES. 
(22) Provide for the establishment of CENTERS FOR [a] non-formal education 
?;enter], 
VOCATIONAL AND TECHNOLOGICAL TRAINING in the barangay whenever 
feasible, in coordination with the Department of Education, Culture and Sports AND 
THE TECHNICAL EDUCATION AND SKILLS DEVELOPMENT AUTHORITY; 
78 


SECTION 111. Section 393 paragraph (a) and (b) of the Code are hereby 
amended to read as follows: 
Section 393. Benefits of Barangay Officials. - 
(a) 
x x x  
(b) 
x x x  
(c) 
Elective barangay officials shall have preference in appointments to 
any government position or in any government-owned or -controlled corporations, 
including their subsidiaries, after their tenure of office, subject to the requisite 
qualifications and provisions of the immediately preceding paragraph. 
THE GOVERNMENT SERVICE INSURANCE SYSTEM SHALL PROVIDE A 
SPECIAL LIFE INSURANCE AND RETIREMENT BENEFITS PLAN FOR ELECTIVE 
BARANGAY 
OFFICIALS 
INCLUDING 
BARANGAY 
TREASURERS 
AND 
SECRETARIES. 
THE BARANGAY OFFICIALS CONCERNED SHALL PAY AS CONTRIBUTION 
A CORRESPONDING PERCENTAGE FROM THEIR ALLOWANCES, HONORARIA 
AND OTHER FEES RECEIVED FROM THE BARANGAY. 
BARANGAY FUNDS MAY BE UTILIZED AS COUNTERPART CONTRIBUTION 
FOR THE SPECIAL LIFE INSURANCE AND RETIREMENT BENEFITS PLAN FOR 
THE 
BARANGAY 
OFFICIALS CONCERNED AS 
MAY 
BE 
REASONABLY 
DETERMINED BY THE GOVERNMENT SERVICE INSURANCE SYSTEM. 
(d) All duly appointed members of the barangay tanod brigades, or their 
equivalent, which shall number not more than twenty (20) in each barangay, shall be 
ENTITLED TO 
MONTHLY 
HONORARIA TO BE 
DETERMINED BY 
THE 
SANGGUNIANG BARANGAY, AND shall be granted COMPULSORY insurance 
COVERAGE or other benefits during their incumbency, chargeable to the barangay, or 
the city or municipal government to which the barangay belongs. 
SANGGUNIANG KABATAAN 
79 


SECTION 112. Section 423 of the Code are hereby amended to read as follows 
Section 423. 
Creation and Election - (a) There shall be in every 
barangay, a Sangguniang Kabataan to be composed of a Chairman[,] AND seven (7) 
members[, a secretary and a treasurer]. 
SECTION 113. Section 426 (b) of the Code is hereby amended to read as 
follows: 
Section 426. Powers and Functions of the Sangguniang Kabataan. - 
The sangguniang kabataan shall: 
(a) 
xxx 
(b) Initiate, UNDERTAKE AND IMPLEMENT programs, PROJECTS, AND 
ACTIVITIES, designed to enhance the social, political, economic, cultural, intellectual, 
moral, spiritual, and physical development of the members [;I. SUBJECT TO REVIEW 
BY THE SANGGUNIANG BARANGAY, THE SANGGUNIANG KABATAAN SHALL 
ENACT AN ANNUAL BUDGET TO CARRY OUT THE FOREGOING FUNCTIONS. NO 
FUNDS OF THE SANGGUNIANG KABATAAN SHALL BE DISBURSED WITHOUT AN 
APPROVED APPROPRIATION. 
(c) xxx 
(g-I) 
COORDINATE WITH THE APPROPRIATE AGENCY OF THE 
GOVERNMENT FOR THE IMPLEMENTATION IN THEIR RESPECTIVE BARANGAY 
OF PROJECTS AND PROGRAMS RELATED TO ENVIRONMENTAL PROTECTION, 
LIKE. TREE PLANTING AND SOLID WASTE DISPOSAL. 
IN THE URBAN CENTERS WHERE TREE PLANTING IS NO LONGER 
FEASIBLE, THE SANGGUNIANG KABATAAN SHALL PARTICIPATE IN "GREENING" 
PROGRAMS IN AREAS IDENTIFIED BY THE LOCAL GOVERNMENT UNITS 
CONCERNED. 
(h) xxx 
SECTION 114. Section 427 of the Code is hereby amended to read as 
follows: 


Section 427. Meetings of the Sangguniang Kabataan. 
- 
The 
sangguniang kabataan shall meet regularly [once] TWICE a month on the date, time 
and place WITHIN THE BARANGAY to be fixed by the said sanggunian. Special 
meetings may be called by the sangguniang kabataan chairman or any three (3) of its 
members by giving written notice to all members of the date, time, place, and agenda of 
the meeting at least one (1) day in advance. Notices of regular or special meeting shall 
be furnished the punong barangay and the sanggunian barangay. 
A majority of the members of the sangguniang kabataan shall constitute a 
quorum. 
ABSENCE WITHOUT JUST CAUSE FOR TWO (2) CONSECUTIVE SESSIONS 
MAY BE A GROUND FOR DISCIPLINARY ACTION. 
SECTION 115. Section 431 of the Code is hereby amended to read as follows: 
Section 
431. 
Powers and Duties of the Sanggunian Kabataan 
Chairman. In addition to the duties which may be assigned to him by the sangguniang 
Larangay, the sangguniang kabataan shall: 
(a) 
xxx 
(b) 
xxxx 
(d) With the concurrence of the sangguniang kabataan, appoint [from among the 
members of the sangguniang kabataan,] the secretary and THE treasurer, 
and such other officers as may be deemed necessary; and 
(e) xxx 
SECTION 116. Section 433 of the Code is hereby amended to read as follows: 
Section 433. Sangguniang Kabataan Treasurer. - The sangguniang 
kabataan treasurer shall: 
(a) 
Take custody of all sangguniang kabataan property and funds. 
[not otherwise deposited with the city or municipal treasurer] THE FUNDS OF THE 
SANGGUNIANG KABATAAN SHALL BE DEPOSITED IN THE NAME OF THE 
81 


SANGGUNIANG KABATAAN CONCERNED IN A BANK DULY AUTHORIZED BY THE 
BANGKO SENTRAL NG PILIPINAS PREFERABLY LOCATED IN OR NEAREST THE 
BARANGAY CONCERNED; 
(b) 
xxx 
IC) 
xxx 
(d) xxx 
(e) Submit to the sangguniang kabataan and to the sangguniang barangay 
certified and detailed statements of actual income and expenditures at the end of every 
[month] QUARTER AND THE SAME SHALL BE PUBLISHED OR POSTED IN THE 
AREA DESIGNATED FOR THIS PURPOSE; and 
(0 xxx 
SECTION 117. Section 434 of the Code is hereby amended to read as 
follows: 
Section 434, Privileges of Sangguniang kabataan. - The sangguniang 
kabataan chairman shall have the same privileges enjoyed by other sangguniang 
barangay officials under this Code subject to such requirements and limitations provided 
herein. During their incumbency, sangguniang kabataan officials shall be exempt from 
payment of tuition and matriculation fees while enrolled in public tertiary schools, 
including state colleges and universities. The national government shall reimburse said 
college or university the amount of the tuition and matriculation fees: Provided, That, to 
qualify for the privilege, the said officials shall enroll in the state college or university 
within or nearest their area of jurisdiction. 
THE SANGGUNIANG KABATAAN CHAIRMAN, THE SECRETARY AND 
TREASURER MAY BE PROVIDED WITH HONORARIA OR ALLOWANCES BY THE 
SANGGUNIANG KABATAAN CONCERNED. 
SECTION 118. Section 435 of the Code is hereby amended to read as follows: 
Section 435. Succession and Filling of Vacancies. - (a) In case a 
sangguniang kabataan chairman refuses to assume office, fails to qualify, is convicted 
82 


of a felony, voluntarily resigns, dies, is permanently incapacitated, is removed from 
office, or has been absent without leave for more than [three (3)] TWO (2) consecutive 
[months] MEETINGS, OR FOR FAILURE TO CALL A REGULAR MEETING OF THE 
SANGGUNIANG KABATAAN AND/OR OF THE KATIPUNAN NG KABATAAN 
WITHOUT JUSTIFIABLE CAUSE, the sangguniang kabataan member who obtained 
the [next] highest number of votes in the election immediately preceding shall assume 
the office of the chairman for the unexpired portion of the term, and shall discharge the 
powers and duties, and enjoy the rights and privileges appurtenant to the office. In case 
the said member refuses to assume the position or fails to qualify, the sanggunian 
member obtaining the next highest number of votes shall assume the position of the 
chairman for the unexpired portion of the term. 
(b) xxx 
(c) xxx 
(d) xxx 
SECTION 119. Section 437 of he Code is hereby amended to read as 
follows: 
Section 437. Constitution and By-Laws. - The term of office, manner of 
election, removal, suspension AND DISCIPLINARY ACTION of the officers and 
MEMBERS of the pederasyon ng mga sangguniang kabataan at all levels AND THE 
SANGGUNIANG KABATAAN AT THE BARANGAY LEVEL shall be governed by the 
Constitution and By-Laws of the Sangguniang Kabataan in conformity with the 
provisions of this Code and national policies of the youth. 
THE PAMBANSANG PEDERASYON NG MGA SANGGUNIANG KABATAAN 
SHALL PROMULGATE THE APPROPRIATE GUIDELINES FOR THE CONDUCT OF 
THE PEDERASYON ELECTIONS AT ALL LEVELS IN CONSULTATION WITH THE 
i;OMMISSION ON ELECTIONS. 
SECTION 120. Section 438 of the Code is hereby amended to read as 
follows: 
83 


Section. 438. Membership in the Sanggunjan - 
(a) A sangguniang kabataan chairman shall, upon the certification of his election 
by the Comelec and during his tenure of office is elected as pederasyon president, 
serve as an ex-officio member of the sangguniang panlalawigan, sangguniang 
panlungsod, and sangguniang bayan as the case may be, without need of further 
appointment. HE SHALL HAVE THE SAME POWERS, DUTIES AND FUNCTIONS, 
AND ENJOY THE SAME PRIVILEGES AS THE REGULAR MEMBERS. . 
SECTION 121. Section 442 (a) of the same Code is hereby amended to read 
as follows: 
Section 442. Requisites for Creation. - (a) A municipality may be 
created if it has a [an] LOCALLY GENERATED average annual income as certified 
by the provincial treasurer, of at least [Two] TWENTY million [five hundred thousand] 
pesos [(P2,500,000.00)] (P20,000,000.00) for the last two (2) consecutive years based 
2~ the [I9911 1998 constant prices; a population of at least twenty-five thousand 
(25,000) inhabitants, as certified by the National Statistics Office; and a contiguous 
territory of at least fifty (50) square kilometers as certified by the Lands Management 
Bureau: Provided, That the creation thereof shall not reduce the land area, population or 
income of the original municipality or municipalities at the time of said creation, to less 
than the minimum requirements prescribed herein. 
(b) xxx 
SECTION 122. Section 443 (a) and (b) of the Code are hereby amended to 
read as follows: 
Section 443. Officials of the Municipal Government - (a) There shall 
be in each municipality a municipal mayor, a municipal vice-mayor, sangguniang bayan 
members[,]. IN ADDITION, THE MUNICIPAL MAYOR SHALL APPOINT THE 
FOLLOWING OFFICIALS: [a secretary to the sanggunian bayan] a municipal treasurer, 
a municipal assessor, a municipal accountant, a municipal budget officer, a municipal 
planning and development coordinator, a municipal engineer[/], A MUNICIPAL building 
$4 


official, a municipal health officer, FIRE PROTECTION OFFICER, A MUNICIPAL 
LIBRARIAN FOR FIRST CLASS MUNICIPALITIES, OPTIONAL FOR SECOND UP TO 
SIXTH CLASS MUNICIPALITIES, and a municipal civil registrar. 
(b) [In addition thereto,] ItlThe mayor may ALSO appoint a municipal 
administrator, a municipal legal officer, a municipal agriculturist, a municipal 
environment and natural resources officer, a municipal social welfare and development 
officer, a municipal architect, A MUNICIPAL HUMAN RESOURCE DEVELOPMENT 
OFFICER, COOPERATIVES OFFICER, and a municipal information officer. 
(c) xxx 
SECTION 123. Section 444 of the Code is hereby amended to read a s  
follows: 
Section 444. The Chief Executive: Powers, Duties, Functions and 
Compensation. - 
(a) 
xxx 
(b) 
xxx 
(1) xxx 
(i) xxx 
(ii) xxx 
(v) Appoint all officials and employees whose salaries and wages are 
wholly or mainly paid out of municipal funds and whose appointments 
are not otherwise provided for in this Code as well as those he may be 
authorized by law to appoint; EXCEPT THOSE TO BE APPOINTED 
BY THE VICE MAYOR AS PROVIDED FOR IN SECTION 445 (a)(2) 
OF THS CODE; 
(2) xxx 
(3) Initiate and maximize the generation of resources and revenues, and apply 
the same to the implementation of development plans, program objectives,and priorities 
as provided for under Section 18 of this Code, particularly those resources and 
85 


revenues programmed for agro-industrial development and country-wide growth and 
progress, and relative thereto, shall: 
(i) xxx 
(ii) xxx 
(iv) Issue licenses and permits and suspend or revoke the same for any violation 
of the conditions upon which said licenses or permits had been issued, 
pursuant to law or ordinance [;/SUBJECT TO THE ORDINANCE OF THE 
SANGGUNIANG BAYAN ISSUE 
LICENSES AND PERMITS FOR 
GAMBLING OPERATIONS AUTHORIZED BY LAW; 
(vii) Adopt adequate measures to safeguard and conserve land, mineral, marine, 
forest, THE ECOLOGICAL SYSTEM, and other resources of the municipality; 
and protect the funds, credit, rights and other priorities of the municipality, 
AND ISSUE, UPON THE AUTHORIZATION OF THE SANGGUNIANG 
BAYAN, AN ENVIRONMENTAL CLEARANCE CERTIFICATE AND A 
PERMIT TO OPERATE FOR ANY FIRM OR ENTITY TO OPERATE IN THE 
MUNICIPALITY. 
(viii) xxx 
(ix) xxx 
SECTION 124. Section 445 (2) of the Code is hereby amended to read as 
follows: 
Section 445. Powers, Duties, and Compensation. - The vice mayor 
shall: 
(1) xxxx 
(2) Subject to civil service law, rules, and regulations, appoint THE SECRETARY 
r)F THE SANGGUNIANG BAYAN AND all OTHER officials and employees [of the 
sangguniang bayan], INCLUDING THE EMPLOYEES OF THE INDIVIDUAL MEMBERS 
THEREOF, except those whose manner of appointment is specifically provided in this 
Code; 
(3) xxx 
86 


SECTION 125 - Section 447, (a),(l), (v), (viii), (2) (x), (3) (vii) (xi), (5) (xiv), (xv) 
of the Code are hereby amended as follows: 
Section 447 - Powers, Duties, Functions, and Compensation. - (a) 
The sangguniang bayan, as the legislative body of the municipality, shall enact 
ordinances, approve resolutions and appropriate funds for the general welfare of the 
municipality and its inhabitants pursuant to Section 16 of this Code and in the proper 
exercise of the corporate powers of the municipality as provided for under Section 22 of 
this Code, and shall: 
(1) 
PASS [Approve] ordinances and [pass] resolutions necessary for an 
efficient and effective municipal government, and in this connection shall: 
(i) xxxx 
(iv) [Adopt measures] ENACT ORDINANCES to protect the inhabitants of the 
municipality from the harmful effects of man-made or natural calamities; and 
to provide relief services and assistance for victims during and IN the 
aftermath of said disasters or calamities and ASSIST THEM in their return to 
productive livelihood. 
[following said events.] 
(V) AUTHORIZE THE MAYOR TO ISSUE AN ENVIRONMENTAL CLEARANCE 
CERTIFICATE AND A PERMIT TO OPERATE FOR ANY FIRM OR ENTITY 
TO OPERATE IN THE MUNICIPALITY AFTER THE REQUIREMENTS OF 
SECTION 2(D), 26 AND 27 HAVE BEEN COMPLIED WITH. 
REQUIRE THE SUBMISSION OF AN ENVIRONMENTAL CLEARANCE 
CERTIFICATE ISSUED BY THE DEPARTMENT OF ENVIRONMENT AND NATURAL 
RESOURCES FOR PROJECTS, PROGRAMS AND ACTIVITIES DEALING WITH 
LOGGING, QUARRYING, COMMERCIAL AND INDUSTRIAL DISTRICTS, ZONES OR 
ESTABLISMENTS, RECLAMATIONS, ESTABLISHMENTS AND OPERATION OF 
NON-FERROUS INDUSTRIES, IRON AND STEEL MILLS, SMELTING PLANTS, OIL, 
GAS, AND PETROLEUM AND PETROCHEMICAL INDUSTRIES, FOSSIL FUELLED, 
NUCLEAR, COAL-FIRED, HYDRO-ELECTRIC, GEOTHERMAL AND OTHER MAJOR 


POWER PLANTS, AND FOR THE CONSTRUCTION OF EDIFICES, ROADS, 
BRIDGES AND SIMILAR FACILITIES AND OTHER PROJECTS OR PROGRAMS OF 
CENTRAL GOVERNMENT AGENCIES OR PRIVATE SECTOR THAT CRITICALLY 
IMPACTS ON THE ENVIRONMENT, SUBJECT TO THE REQUIREMENTS OF 
SECTION 2 (D), 26 AND 27 OF THE CODE AS AMENDED; 
[(v)] (VI) Enact ordinances intended to prevent, suppress and impose appropriate 
penalties for habitual drunkenness in public places, vagrancy, mendicancy, prostitution, 
establishment and maintenance of houses of ill repute, gambling and other [prohibited] 
games of chance, fraudulent devices and ways to obtain money or property, drug 
addiction, maintenance of drug dens, drug pushing, juvenile delinquency, SQUATTING, 
ILLEGAL VENDING AND PEDDLING, [the] printing, distribution or exhibition of obscene 
or pornographic materials or publications, and such other activities inimical to the 
welfare and morals of the inhabitants of the municipality; 
[(vi)] (vii) xxx 
[(vii)] (viii) xxx 
[(viii)] (ix) xxx 
[(xii)] (xiii) Provide [for] legal assistance to MUNICIPAL AND barangay officials 
INCLUDING THE MEMBERS OF THE MUNICIPAL POLICE who, in the performances 
of their official duties, or on the occasion thereof, have to, initiate judicial proceedings or 
defend themselves against legal actions [; and]. THE SANGGUNIANG BAYAN MAY 
AUTHORIZE THE MUNICIPAL MAYOR TO ENGAGE THE SERVICES OF PRIVATE 
COUNSEL FOR THIS PURPOSE; AND 
[xiii] (xiv) xxx 
(2) Generate and maximize the use of resources and revenues for the 
development plans, program objectives and priorities of the municipality as provided for 
under Section 18 of this Code, with particular attention to agro-industrial development 
and countryside growth and progress, and relative thereto, shall: 
(i) xxx 
(ii) xxx 
(iii) xxx 


(vii) Adopt a comprehensive land use plan for the municipality WHICH SHALL BE 
REVIEWED EVERY FIVE YEARS THEREAFTER: Provided, That the 
formulation, adoption, or modification of said plan shall be in coordination 
with the approved provincial comprehensive land use plan; 
( 4  
xxx 
(vi) 
xxx 
(vii) 
xxx 
(viii) 
xxx 
(ix) 
xxx 
(x) [Subject to national law,] AUTHORIZE THE MUNICIPAL MAYOR process 
and approve subdivision AND CONDOMINIUM plans for residential, 
commercial, or industrial [purposes] and other development purposes[,] 
AND 
TO ISSUE LICENSE OR AUTHORITY TO SELL SUCH 
SUBDIVISION LOTS AND CONDOMINIUM UNITS and collect [processing] 
fees and other charges THEREFOR SUBJECT TO NATIONAL LAW[,]. 
[t]The proceeds of which shall accrue entirely to the municipality[;]. 
[Provided, however, That, where approval by a national agency or office is 
required, said approval shall not be withheld for more than thirty (30) days 
from receipt of the application. Failure to act on the application within the 
period stated above shall be deemed as approval thereof.] 
(xi) [Subject to the provisions of Book II of this Code,] [g]Grant [the] exclusive 
privilege of constructing fish corrals or fish pens, or the taking or catching of 
bangus fry, prawn fry or kawag-kawag or fry of any species or fish within the 
municipal waters SUBJECT TO THE PROVISION OF BOOK II OF THIS 
CODE. THE MUNICIPAL WATERS SHALL BE RESERVED FOR FISHING 
ACTIVITIES OF RESIDENT FISHERFOLKS AND COOPERATIVES DULY 
REGISTERED WITH THE COOPERATIVE DEVELOPMENT AUTHORITY 
IN ACCORDANCE WITH R.A. 6938 WHERE AT LEAST TWO-THIRDS OF 
ITS MEMBERS ARE RESIDENTS OF THE MUNICIPALITY CONCERNED. 
(xv) xxx 
89 


(3) xxx 
(i) xxx 
(v) [Any law to the contrary notwithstanding] [aJAuthorize and license the 
establishment, operation and maintenance of cockpits[,] AND COMMERCIAL 
BREEDING OF GAMECOCKS, and regulate cockfighting [and commercial 
breeding 
of 
gamecocks] 
AFTER 
COMPLIANCE 
WITH 
THE 
REQUIREMENTS OF SECTIONS 2 (D), 26 and 27 OF THIS CODE : 
Provided, That existing rights should not be prejudiced. 
IN THE CASE OF OTHER LEGALIZED GAMBLING AND GAMING 
ACTIVITIES AUTHORIZED BY THE CENTRAL GOVERNMENT SUCH AS BUT 
NOT LIMITED TO CASINOS, LOTTO OUTLETS, JAl-AIAI FRONTONS AND 
BETTING 
STATIONS 
AND 
ON-LINE 
BINGO, 
THE 
SANGGUNIAN 
CONCERNED MAY AUTHORIZE THE MAYOR TO ISSUE A PERMIT FOR THE 
OPERATION WITHIN THE LOCAL JURISDICTION AND TO REGULATE ITS 
LOCATIONS WITHIN THE MUNICIPALITY SUBJECT TO THE PROVISIONS 
OF SECTIONS 2 (D), 26 AND 27 OF THIS CODE; 
(vi)xxx 
(4) xxx 
(i) xxx 
(5) Approve ordinances which shall ensure the efficient and effective delivery of 
the basic services and facilities as provided for under Section 17 of this Code, and in 
addition to said services and facilities, shall: 
(1) xxx 
(ii) xxx 
(iii) Authorize the establishment, maintenance and operations of ferries, wharves, 
and other structure, and marine and seashore or offshore activities 
intended to accelerate productivity, AND CORRESPONDINGLY LEVY 
TAXES, FEES AND CHARGES THEREOF; 
(vi) Regulate traffic on all streets and bridges, prohibit the putting up of 
encroachments or obstacles thereon, and, when necessary in the interest 


of public welfare, authorize the removal of encroachments and illegal 
constructions in public places; 
INSTALL AND ADMINISTER A TICKETING SYSTEM, FIX, 
IMPOSE AND COLLECT FINES AND PENALTIES FOR ALL KINDS OF 
VIOLATIONS OF TRAFFIC RULES AND REGULATIONS FOR MOVING 
OR NON-MOVING MOTOR VEHICLES AND CONFISCATE DRIVERS' 
LICENSES. 
(xiv) Provide for the PROPER care, PROTECTION AND WELL-BEING of 
paupers, the aged, the sick, persons of unsound mind, disabled persons, 
BATTERED AND SEXUALLY ABUSED PERSONS, abandoned minors, 
juvenile delinquents, drug dependents, abused children and other needy 
and disadvantaged persons, particularly children and youth below 
eighteen (18) years of age and [, subject to availability of funds,] establish 
and provide for the operation of centers and facilities for said needy and 
disadvantaged persons[;]. 
THE SANGGUNIANG BAYAN SHALL 
APPROPRIATE FUNDS FOR THE IMPLEMENTATION OF THIS 
PROVISION. 
(xv) Establish and provide SEPARATE JAIL FACILITIES FOR JUVENILE AND 
ADULT PRISONERS AND DETAINEES, AS WELL AS, FOR MALE AND 
FEMALE PRISONERS AND DETAINEES; for the maintenance and 
improvement of jails and detention centers, institute sound jail 
management programs, and appropriate funds for the subsistence of 
detainees and convicted prisoners in the municipality; 
(XVI) ESTABLISH AND MAINTAIN FIRE STATION STRUCTURES 
FOR 
SOUND, 
EFFICIENT 
AND 
EFFECTIVE 
FIRE 
PROTECTION 
MANAGEMENT. 
(XVII) REGULATE THE ADVERTISING OF LIQUOR AND TOBACCO 
PRODUCTS. 
91 


(XIV) ADOPT MEASURES TO ENHANCE THE FULL IMPLEMENTATION OF 
THE NATIONAL AGRARIAN REFORM PROGRAM IN COORDINATION 
WITH THE DEPARTMENT OF AGRARIAN REFORM. 
SECTION 126. Section 450 (a) of the Code is hereby amended to read as 
follows: 
Section 450. Requisites for Creation. - (a) A municipality or a cluster of 
barangay[s] may be converted into a component city if it has [an] A LOCALLY 
GENERATED average annual income , as certified by the [Department of Finance] 
PROVINCIAL TREASURER , of at least [Twenty million pesos (P20,000,000.00)] ONE 
HUNDRED MILLION PESOS (PlOO,OOO,OOO.OO) for the last two (2) years based on 
[I9911 1998 constant prices [,] ; AN AVERAGE REAL PROPERTY TAX COLLECTION 
EFFICIENCY OF, AT LEAST, EIGHTY PERCENT (80%) DURING THE THREE 
YEARS PRECEDING THE CURRENT CALENDAR YEAR IN THE CASE OF A 
MUNICIPALITY CONVERTED INTO COMPONENT CITY, and if it has the following 
requisites: 
0) 
a contiguous territory of at least 
one hundred 
(100) square 
kilometers, as certified by the Lands Management Bureau; or 
a population of not less than [one hundred fifty thousand (1 50,000) 
inhabitants, as certified by the National Statistics Office. 
(ii) 
Provided: That, the creation thereof shall not reduce the land area, population, and 
income of the original unit or units at the time of said creation to less that the minimum 
requirements prescribed herein. 
(b) xxx 
(c) xxx 
SECTION 127. Section 452 (a) of the same Code is hereby amended to read as 
follows: 
Section 452- Highly Urbanized Cities. - (a) 
Cities with a minimum 
ppulation of two hundred 
thousand (200,000) inhabitants, as certified 
by the 
92 


b!ational Statistics Office, and with the latest LOCALLY GENERATED annual income of 
at least [Fifty Million Pesos (P50,000,000.00)] TWO HUNDRED FIFTY MILLION 
PESOS (P250,000,000.00) based on [I9911 1998 constant prices, as certified by the 
[city treasurer1DEPARTMENT OF FINANCE, AND AN AVERAGE REAL PROPERTY 
TAX COLLECTION EFFICIENCY OF, AT LEAST, EIGHTY PERCENT (80%) FOR 
THE THREE YEARS PRECEDING THE CURRENT CALENDAR YEAR, shall be 
ciassified as highly urbanized cities. 
(b) xxx 
(c) xxx 
SECTION 128. Section 454 of the Code is hereby amended to read as follows: 
Section 454 - Officials of the City Government - (a) There shall be in 
each city a mayor, a city vice-mayor, sangguniang panlungsod members [,I. IN 
ADDITION, THE CITY MAYOR SHALL APPOINT THE FOLLOWING OFFICIALS [a 
secretary to the sangguniang panlungsod,] a city treasurer, a city assessor, a city 
accountant, a city budget officer, a city planning and development coordinator, a city 
engineer, a city health officer, a city civil registrar, a city administrator, a city legal 
officer, a city veterinarian, a city social welfare and development officer, A CITY 
ENVIRONMENT AND NATURAL RESOURCES OFFICER, A CITY COOPERATIVES 
OFFICER, A CITY BUILDINGS AND GROUNDS OFFICER, A CITY HUMAN 
RESOURCE DEVELOPMENT OFFICER, A CITY FIRE PROTECTION OFFICER, A 
CITY LIBRARIAN and a city general services officer. 
(b) [In addition thereto, t] The City mayor may appoint a city architect, a city 
information officer, a city agriculturist, AND a city population officer. [a city environment 
and natural resources officer, and a city cooperative officer]. 
(c) xxx 
SECTION 129 - Section 455- (b) (3)(vii) of the Code is hereby amended to read 
as follows: 
Section 455. Chief Executive: Powers, Duties and Compensation. 
93 


(a) xxx 
(b) xxx 
(1) 
xxx 
(v) Appoint all officials and employees whose salaries and wages are wholly or 
mainly paid out of city funds and whose appointments are not otherwise 
provided for in this Code, as well as those he may be authorized by law to 
appoint EXCEPT THOSE WHO ARE TO BE APPOINTED BY THE VICE 
MAYOR AS PROVIDED FOR IN SECTION 456 OF THIS CODE. 
(3) xxx 
(iv) Issue licenses and permits and suspend or revoke the same for any violation 
of the conditions upon which said licenses a permits had been issued 
pursuant to law a ordinance [;I. 
THIS INCLUDES THE ISSUANCE OF 
LICENSES AND PERMITS FOR GAMBLING OPERATIONS AUTHORIZED 
BY LAW SUBJECT TO THE ORDINANCE OF THE SANGGUNIANG 
PANLUNGSOD; 
IN THE CASE OF OTHER LEGALIZED GAMBLING AND GAMING ACTIVITIES 
AUTHORIZED BY THE CENTRAL GOVERNMENT SUCH AS BUT NOT LIMITED TO 
YASINOS, LOTTO OUTLETS, JAl-ALA1 FRONTONS AND BETTING STATIONS AND 
ON-LINE BINGO, THE SANGGUNIAN CONCERNED MAY AUTHORIZE THE MAYOR 
TO ISSUE A PERMIT FOR THE OPERATION WITHIN THE LOCAL JURISDICTION 
AND TO REGULATE ITS LOCATIONS WITHIN THE CITY SUBJECT TO THE 
PROVISIONS OF SECTIONS 2 (D), 26 AND 27 OF THIS CODE; 
(vii) Adopt adequate measures to safeguard and conserve land, mineral, marine, 
forest, THE ECOLOGICAL SYSTEM and other resources of the city[.] AND 
ISSUE, UPON THE AUTHORIZATION OF THE 
SANGGUNIANG 
PANGLUNGSOD, AN ENVIRONMENTAL CLEARANCE CERTIFICATE 
AND A PERMIT TO OPERATE FOR ANY FIRM OR ENTITY TO OPERATE 
IN THE CITY. 
94 


SECTION 130. Section 456 (3) of the code is hereby amended to read as 
follows: 
Section 456. Powers, Duties and Compensation. - (a)The city vice- 
mayor shall: 
(1) xxxx 
(2) Subject to civil service law, rules and Regulations,] [a]Appoint THE 
SECRETARY OF THE SANGGUNIAN AND 
all OTHER officials and 
employees THEREOF, 
[of the sangguniang panglunsod,] AND SUCH 
EMPLOYEES OF THE INDIVIDUAL MEMBERS OF THE SANGGUNIANG 
PANLUNGSOD, except those whose manner of appointment is specifically 
provided in this Code; 
(3) xxx 
SECTION 131. Section 458 of the Code is hereby amended to read as follows: 
Section 458. Powers, Duties, Functions and Compensation. (a) xxx 
(1) xxx 
(i) xxx 
(ii) xxx 
(V) AUTHORIZE THE MAYOR TO ISSUE AN ENVIRONMENTAL CLEARANCE 
CERTIFICATE AND A PERMIT TO OPERATE FOR ANY FIRM OR ENTITY TO 
OPERATE IN THE CITY AFTER PUBLIC CONSULTATIONS HAVE BEEN COMPLIED 
WITH OR AFTER THE REQUIREMENTS OF SECTION 2(D), 26 AND 27 HAVE BEEN 
COMPLIED WITH. 
REQUJRE THE SUBMISSION OF AN ENVIRONMENTAL CLEARANCE 
CERTIFICATE ISSUED BY THE DEPARTMENT OF ENVIRONMENT AND NATURAL 
RESOURCES FOR PROJECTS, PROGRAMS, AND ACTIVITIES DEALING WITH 
LOGGING, QUARRYING, COMMERCIAL AND INDUSTRIAL DISTIRCTS, ZONES OR 
ESTABLISHMENTS, RECLAMATION, ESTABLISHMENT AND OPERATION OF NON- 
FERROUS INDUSTRIES, IRON AND STEEL MILLS, SMELTING PLANTS, OIL, GAS 
AND PETROLEUM AND PETROCHEMICAL INDUSTRIES, FOSSIL-FUELLED, 


NUCLEAR, COAL-FIRED, HYDRO-ELECTRIC, GEOTHERMAL AND OTHER MAJOR 
POWER PLANTS, AND FOR THE CONSTRUCTION OF EDIFIES, ROADS, BRIDGES, 
AND SIMILAR FACILITIES AND OTHER PROJECTS OR PROGRAMS OF CENTRAL 
GOVERNMENT AGENCIES OR PRIVATE SECTOR THAT CRITICALLY IMPACTS ON 
THE ENVIRONMENT, SUBJECT TO THE REQUIREMENTS OF SECTION 2 (D), 26 
AND 27 OF THE CODE AS AMENDED; 
[VI (vi) Enact ordinances intended to prevent, suppress, and impose appropriate 
penalties for habitual drunkenness in public places, vagrancy, mendicancy, prostitution, 
establishment and maintenance of houses of ill repute, gambling and other prohibited 
games of chance, fraudulent devices and ways to obtain money or property, drug 
addiction, maintenance of drug dens, drug pushing, juvenile delinquency, the printing, 
uistribution or exhibition of obscene or pornographic materials or publications, and such 
other activities inimical to the welfare and morals of the inhabitants of the city; 
(xii) Provide legal assistance to CITY AND barangay officials INCLUDING THE 
MEMBERS OF THE CITY POLICE who, in the performance of their official duties or on 
the occasion thereof, have to initiate judicial proceedings or defend themselves against 
legal actions [;and]. THE SANGGUNIANG PANLUNGSOD MAY AUTHORIZE THE 
CITY MAYOR TO ENGAGE THE SERVICES OF PRIVATE COUNSEL FOR THIS 
PURPOSE; AND 
(xiii) xxx 
(2) Generate and maximize the use of resources and revenues for the 
development plans, program objectives and priorities of the city as provided for under 
Section 18 of this Code, with particular attention to agro-industrial development and city- 
wide growth and progress, and relative thereto, shall: 
0) 
xxx 
(ii) 
xxx 
(x) [Subject to national law,] AUTHORIZE THE CITY MAYOR TO process and 
approve subdivision AND CONDOMINIUM plans for residential, commercial, or 
I.-,dustrial [purposes] and other development purposes[,] AND TO ISSUE LICENSE OR 
AUTHORITY TO SELL SUCH SUBDIVISION LOTS AND CONDOMINIUM UNITS and 
96 


collect [processing] fees and other charges THEREFOR SUBJECT TO NATIONAL 
LAWS[,]. [tlThe proceeds of which shall accrue entirely to the municipality[;]. [Provided, 
however, That, where approval by a national agency or office is required, said approval 
shall not be withheld for more than thirty (30) days from receipt of the application. 
Failure to act on the application within the period stated above shall be deemed as 
approval thereof.] 
(3) xxxx 
(v) 
[Any law to the contrary notwithstanding] [a]Authorize and 
license the establishment, operation and 
maintenance of 
cockpits[,] AND 
COMMERCIAL BREEDING OF GAMECOCKS, and regulate cockfighting [and 
commercial 
breeding 
of 
gamecocks] 
AFTER 
COMPLIANCE 
WITH 
THE 
REQUIREMENTS OF SECTIONS 2 (D), 26 and 27 OF THIS CODE : Provided, That 
existing rights should not be prejudiced. 
IN THE CASE OF OTHER LEGALIZED GAMBLING AND GAMING ACTIVITIES 
AUTHORIZED BY THE CENTRAL GOVERNMENT SUCH AS BUT NOT LIMITED TO 
CASINOS, LOTTO OUTLETS, JAI-ALA1 FRONTONS AND BETTING STATIONS AND 
ON-LINE BINGO, THE SANGGUNIAN CONCERNED MAY AUTHORIZE THE MAYOR 
TO ISSUE A PERMIT FOR THE OPERATION WITHIN THE LOCAL JURISDICTION 
AND TO REGULATE ITS LOCATIONS WITHIN THE CITY SUBJECT TO THE 
PROVISIONS OF SECTIONS 2 (D), 
26 AND 27 OF THIS CODE; 
(vi) xxx 
SECTION 132 - Section 461(a) of the Code is hereby amended to read as 
follows: 
Section 461. Requisites for Creation. - (a) A province may be created if 
it has [an] A LOCALLY GENERATED average annual income, as certified by the 
Department of Finance, of not less than [twenty million pesos (P20,000,000.00)] TWO 
HUNDRED MILLION PESOS (P200,000,000.00) based on [I9911 1998 constant prices; 
AN AVERAGE REAL PROPERTY TAX COLLECTION EFFICIENCY, OF AT LEAST, 
97 


EIGHTY PERCENT (80%) DURING THE THREE YEARS PRECEDING THE 
CURRENT CALENDAR YEAR; and it has the following requisites: 
(i) contiguous territory of at least two thousand (2,000) square kilometers, as 
certified by the Lands Management Bureau; or 
(ii) population of not less than 
two hundred fifty thousand (250,000) inhabitants as certified by the National [Census 
and] Statistics Office. 
Provided, That, the creation thereof shall not reduce the land area, population, 
and income of the original unit or units at the time of said creation to less than the 
minimum requirements prescribed herein. 
SECTION 133 - Section 463 (a) and (b) of the Code are hereby amended to 
read as follows: 
Section 463 - Officials of the Provincial Government - (a) There shall 
be in each province a governor, a vice-governor, members of the sangguniang 
panlalawigan. IN ADDITION, THE PROVINCIAL GOVERNOR SHALL APPOINT THE 
FOLLOWING; [a secretary to the sangguniang panlalawigan], a provincial treasurer, a 
Tiovincial assessor, a provincial accountant, a provincial engineer, a provincial budget 
officer, a provincial planning and development coordinator, a provincial legal officer, a 
provincial administrator, a provincial health officer, a provincial social welfare and 
development officer, a provincial general services officer, a provincial agriculturist, A 
PROVINCIAL ENVIRONMENT AND 
NATURAL RESOURCES OFFICER, A 
PROVINCIAL COOPERATIVES OFFICER, A HUMAN RESOURCE DEVELOPMENT 
OFFICER , A PROVINCIAL LIBRARIAN and a provincial veterinarian. 
(b) [In addition thereto,] [t]The governor may ALSO appoint a provincial 
population officer, [ a provincial natural resources and environment officer, a provincial 
cooperative officer,] a provincial architect, and a provincial information officer. 
SECTION 134 - Section 465, (b),(3)(v) of the Code is hereby amended by 
adding sub-paragraph vii to read as follows: 
98 


Section 465. 
The Chief Executive: Powers, duties, Functions and 
Compensation. 
(I) xxx 
(3) xxx 
(i) xxx 
(ii) xxx 
(v) Adopt adequate measures to safeguard and conserve land, mineral, marine, 
forest and other resources, AND PRESERVE THE ECOSYSTEM of the province, in 
coordination with the mayors of component cities and municipalities. 
THE GOVERNOR MAY ISSUE ENVIRONMENTAL CLEARANCE CERTIFICATE 
FOR ANY FIRM OR ENTITY TO OPERATE IN THE PROVINCE WHOSE 
ENVIRONMENTAL IMPACT AFFECTS TWO OR MORE MUNICIPALITIES AFTER 
THE APPROVAL OF TWO-THIRD VOTES OF THE MEMBERS OF THE 
SANGGUNIANG PANLALAWIGAN, AND UPON FAVORABLE RECOMMENDATION 
OF THE SANGGUNIANG BAYANS OF THE MUNICIPALITY WHERE THE FIRM OR 
ENTITY WOULD OPERATE AS WELL AS THE SANGGUNIANG BAYANS OF THE 
AFFECTED MUNICIPALITIES. 
SECTION 135 - Section 466 (2) of the Code is hereby amended to read as 
follows: 
Section 466. Powers, Duties, and Compensation. - (a) The vice- 
governor shall: 
(1) xxxx 
(2) [Subject to civil service law, rules and regulations,] [a]Appoint THE 
SECRETARY OF THE SANGGUNIANG PANLALAWIGAN AND all OTHER 
officials and employees [ of the sangguniang panlalawigan] INCLUDING THE 
EMPLOYEES OF THE INDIVIDUAL MEMBERS THEREOF, except those 
whose manner of appointment is specifically provided in this Code; 
(3) xxx 
99 


SECTION 136 - Section 468, (a), (4), (vi), (vii) of the Code is hereby amended to 
read as follows: 
Section 468 - Powers, Duties, Functions, and Composition. - (a) The 
sangguniang panlalawigan, as the legislative body of the province, shall enact 
Grdinances, approve resolutions and appropriate funds for the general welfare of the 
province and its inhabitants pursuant to Section 16 of this Code and in the proper 
exercise of the corporate powers of the province for under Section 22 of this Code, and 
shall: 
(1) xxx 
(3) Subject to the provision of the Book II of this Code, grant franchises, approve 
the issuance of permits or licenses, or enact ordinances levying taxes, fees and charges 
upon such conditions and for such purposes intended to promote the general welfare of 
the inhabitants of the province, and pursuant to this legislative authority shall: 
(0 
Fix and impose reasonable fees and charges for all services 
rendered by the provincial government to private persons and 
entities; [and] 
(ii) Regulate THE OPERATION AND FIX LICENSE FEES OF PUBLIC UTILITY 
VEHICLES OPERATING WITHIN THE PROVINCE [and fix the license fees for such 
activities as provided for under this Code]. 
(4) Approve ordinances which shall ensure the efficient and effective delivery of 
the basic services and facilities as provided for under Section 17 of this Code, and, in 
addition to said services and facilities, shall: 
(i) xxx 
(11) 
AUTHORIZE THE GOVERNOR TO ISSUE AN ENVIRONMENTAL 
CLEARANCE CERTIFICATE AND A PERMIT TO OPERATE FOR ANY FIRM OR 
ENTITY TO OPERATE IN THE PROVINCE AFTER PUBLIC CONSULTATIONS HAVE 
BEEN COMPLIED WITH OR AFTER THE REQUIREMENTS OF SECTION 2 (D), 26 
AND 27 HAVE BEEN COMPLIED WITH. 
REQUIRE THE SUBMISSION OF AN ENVIRONMENTAL CLEARANCE 
CERTIFICATE ISSUED BY THE DEPARTMENT OF ENVIRONMENT AND NATURAL 


RESOURCES FOR PROJECTS, PROGRAMS, AND ACTIVITIES DEALING WITH 
LOGGING, QUARRYING, COMMERCIAL AND INDUSTRIAL DISTRICTS, ZONES OR 
ESTABLISHMENT, RECLAMATION, ESTABLISHMENT AND OPERATION OF NON- 
FERROUS INDUSTRIES, IRON AND STEEL MILLS, SMELTING PLANTS, OIL, GAS, 
AND PETROLEUM AND PETROCHEMICAL INDUSTRIES, FOSSIL-FUELLED, 
NUCLEAR, COAL-FIRED, HYDRO-ELECTRIC, GEOTHERMAL AND OTHER MAJOR 
POWER PLANTS, AND FOR THE CONSTRUCTION OF EDIFICES, ROADS, 
BRIDGES AND SIMILAR FACILITIES AND OTHER PROJECTS OR PORGRAMS OF 
CENTRAL GOVERNMENT AGENCIES OR PRIVATE SECTOR THAT CRITICALLY 
IMPACTS ON THE ENVIRONMENT, SUBJECT TO THE REQUIREMENTS OF 
SECTION 2(D), 26 AND 27 OF THE CODE AS AMENDED; 
(111) xxx 
(vi) Provide for the PROPER care, PROTECTION AND WELL-BEING of 
paupers, the aged, the sick, persons of unsound mind, BATTERED AND SEXUALLY 
ABUSED PERSONS, abandoned minors, abused children, disabled persons, juvenile 
delinquents, drug dependents, and other needy and disadvantaged persons, particularly 
children and youth below eighteen (18) years of age; [subject to availability funds,] 
establish and support the operation of PROVINCIAL REHABILITATION AND/OR 
CRISES centers and facilities for said needy and disadvantaged persons; and facilitate 
efforts to promote the welfare of families below the poverty threshold, the 
disadvantaged, and the exploited. THE SANGGUNIANG PANLALAWIGAN SHALL 
APPRORIATE FUNDS TO BE INCLUDED IN THE ANNUAL BUDGET OF THE 
PROVINCE, FOR THE PROPER IMPLEMENTATION OF THIS PROVISION. 
(v) xxx 
SECTION 137- Section 470 of the Code is hereby amended to read as follows: 
Section 470. Appointment, Qualifications, Powers and Duties - [(a) 
The treasurer shall be appointed by the Secretary of Finance from a list of at least three 
(3) ranking, eligible recommendees of the governor or mayor, as the case may be, 
subject to civil service law, rules, and regulations.] 
a 01 


[(b) The treasurer shall be under the administrative supervision of the governor or 
mayor, as the case may be, to whom he shall report regularly on tax collection efforts in 
the local government unit.] 
[(c)] (A) No person shall be appointed treasurer unless he is a citizen of the 
Philippines, a resident of the local government unit concerned, of good moral character, 
a holder of college degree preferably in commerce, public administration or law from a 
recognized college or university, and a first grade civil service eligible or its equivalent. 
He must have acquired experience in treasury or accounting service for at least five (5) 
years in the case of the provincial or city treasurer, and three years in the case of 
nunicipal treasurer. 
The appointment of a treasurer shall be mandatory for provincial, city and 
municipal governments. 
[(d)] (C) The treasurer shall take charge of the treasury office, perform the duties 
provided for under Book II of this Code, and shall: 
(1) Advise the governor or mayor, as the case may be, the sanggunian, and 
uther local government [and national] officials concerned regarding THE COLLECTION 
EFFORT IN THE LOCAL GOVERNMENT UNIT AS WELL AS disposition of local 
government funds and on such other matters relative to public finance; 
(2) xxx 
[(e)] (D) Exercise such other powers and perform such other duties and functions 
as may be prescribed by law or ordinance. 
SECTION 138. Section 471 of the Code is hereby amended to read as follows: 
Section 471. Assistant Treasurer. - (a) An assistant treasurer may be 
appointed by the [Secretary of Finance from a list of at least three (3) ranking eligible 
recommendees of the] governor or mayor AS THE CASE MAY BE, subject to civil 
service law, rules and regulations. 


SECTION 139 -Article Seven and Section 477 of the Code are hereby amended 
by adding Article Seven - A  and B and Section 477 - I and 2 to read as follows: 
Article Seven - The Engineer 
Section 477 - Qualifications, Powers, and Duties. - (a) No person shall 
be appointed engineer unless he is a citizen of the Philippines, PREFERABLY a 
resident of the local government unit concerned of good moral character and a licensed 
civil engineer. He must have acquired experience in the practice of his profession for at 
least five (5) years in the case of the provincial or city engineer, and three (3) years in 
the case of the municipal engineer. 
The appointment of an engineer shall be mandatory for the provincial, city, and 
municipal governments. [The city and municipal engineer shall also act as the local 
building official.] 
(4 
xxx 
ARTICLE SEVEN - A  - 
BUILDINGS AND GROUNDS OFFICER - 
SECTION 477 - I - (A) QUALIFICATIONS, POWERS, AND DUTIES - NO 
PERSON SHALL BE APPOINTED BUILDINGS AND GROUNDS OFFICER UNLESS 
HE IS A CITIZEN OF THE PHILIPPINES, PREFERABLY A RESIDENT OF THE 
LOCAL GOVERNMENT UNIT CONCERNED, OF GOOD MORAL CHARACTER, AND 
A LICENSED ARCHITECT OR CIVIL ENGINEER. HE MUST HAVE ACQUIRED 
DIVERSIFIED AND PROFESSIONAL EXPERIENCE IN BUILDING DESIGN AND 
CONSTRUCTION FOR AT LEAST FIVE (5) YEARS IN THE CASE OF THE 
PROVINCIAL OR CITY, AND AT LEAST THREE (3) YEARS, IN THE CASE OF A 
MUNICIPAL, BUILDINGS AND GROUNDS OFFICER. 
THE APPOINTMENT OF A BUILDINGS AND GROUNDS OFFICER IS 
MANDATORY FOR A CITY AND A MUNICIPALITY. 
(B) THE BUILDINGS AND GROUNDS OFFICER SHALL TAKE CHARGE OF 
THE BUILDINGS AND GROUNDS SERVICES AND SHALL: 


(1) BE PRIMARILY RESPONSIBLE FOR 
ENFORCEMENT OF THE 
OF THE PHILIPPINES AS WELL AS 
PROVISIONS OF THE BUILDING CODE 
THOSE THE SANGGUNIAN CONCERNED MAY PRESCRIBE; 
(i) ISSUE BUILDING PERMITS; 
(ii) INSPECT DURING REASONABLE TIME AND DETERMINE COMPLIANCE 
WITH THE REQUIREMENTS OF THE BUILDING CODE AS WELL AS RULES AND 
REGULATIONS PROMUGATED BY THE SANGGUNIAN; 
(1) ORDER WORK STOPPAGE WHEN THE CONSTRUCTION OF ANY 
BUILDING IS FOUND TO BE VIOLATIVE OF THE PROVISIONS OF THE BUILDING 
CODE AND THE SANGGUNIAN RULES AND REGULATIONS, AND PRECRIBE THE 
TERMS AND CONDITIONS FOR RESUMPTION OF SAID WORK; 
2) ORDER DISCONTUANCE OF OCCUPANCY OR USE OF ANY BUILDING 
OR STRUCTURE OR PORTION THEREOF, FOUND OCCUPIED OR USED 
CONTRARY TO THE PROVISIONS OF THE BUILDING CODE AND THE RULES AND 
REGULATIONS PRESCRIBED BY THE SANGGUNIAN; 
(3) MAINTAIN AN INVENTORY, AND CONDUCT A PERIODIC ASSESSMENT 
OF THE CONDITIONS OF ALL BUILDINGS IN THE LOCALITY; AND, 
(4) EXERCISE OTHER POWERS AND PERFORM OTHER DUTIES AND 
FUNCTIONS AS MAY BE PROVIDED BY LAW OR ORDINANCE. 
ARTICLE SEVEN -B- FIRE PROTECTION OFFICE 
SECTION 477 - 2 - QUALIFICATIONS, POWERS AND DUTIES - (A) NO 
PERSON SHALL BE APPOINTED FIRE PROTECTION OFFICER UNLESS HE IS A 
CITIZEN OF THE PHILIPPINES, A RESIDENT OF THE LOCAL GOVERNMENT UNIT 
CONCERNED, OF GOOD MORAL CHARACTER, AND A LICENSED ELECTRICAL 
ENGINEER. HE MUST HAVE ACQUIRED EXPERIENCE IN THE PRACTICE OF HIS 
PROFESSION FOR AT LEAST FIVE (5) YEARS IN THE CASE OF THE CITY, AND 
THREE (3) YEARS IN THE CASE OF THE MUNICIPAL, FIRE PROTECTION 
OFFICER. 
THE APPOINTMENT OF THE FIRE PROTECTION OFFICER SHALL BE 
MANDATORY FOR THE CITY AND MUNICIPAL GOVERNMENTS. 
104 


(B) THE FIRE PROTECTION OFFICER SHALL BE RESPONSIBLE FOR: 
(1) THE PREVENTION AND SUPRESSION OF ALL DESTRUCTIVE FIRES ON 
BUILDINGS, 
HOUSES 
AND 
OTHER 
STRUCTURES; 
FORESTS, 
PUBLIC 
PLANTATIONS OR NURSERIES; PUBLIC TRANSPORT VEHICLES, EQUIPMENT OR 
MACHINERY; SHIPS, VESSELS AND OTHER PUBLIC TRANSPORT CRAFTS 
DOCKED AT PIERS OR WHARVES OR ANCHORED AT MAJOR SEAPORTS; 
PETROLEUM INDUSTRY INSTALLATIONS, PLANE CRASHES AND OTHER 
SIMILAR INCIDENTS; 
(2) ENFORCING THE FIRE CODE AND OTHER RELATED LAWS; 
(3) 
INVESTIGATING CAUSES OF 
DESTRUCTIVE FIRES AND, 
IF 
WARRANTED, FILING OF THE PROPER COMPLAINTS RELATIVE THERETO. 
(4) MONITORING, EVALUATING, AND WHENEVER POSSIBLE, ASSISTING 
IN THE SUPPRESSION OF DESTRUCTIVE FIRES OCCURING IN NEIGHBORING 
LOCALITIES. 
(5) 
INITIATING FIRE 
PROTECTION AND 
EMERGENCY SERVICES 
PROGRAMS AND PUBLIC SAFETY DRILLS SUCH AS FOR RESCUE AND 
EVACUATION IN FIRE-RELATED DISASTROUS INCIDENTS. 
(6) INITIATING PROGRAMS DESIGNED TO IMPROVE AND STRENGTHEN 
THE FIRE PROTECTION CAPABILITY OF THE LOCAL GOVERNMENT UNIT; AND 
(7) EXERCISING OTHER POWERS AND PERFORMING OTHER DUTIES AND 
FUNCTIONS AS MAY BE PROVIDED BY LAW OR ORDINANCE. 
SECTION 139. Section 478 of the Code is hereby amended to read as follows: 
Section 478. Qualifications, Powers andDufies - (a) No person shall be 
appointed health officer unless he is a citizen of the Philippines, a resident of the local 
government unit concerned, of good moral character, and a licensed medical 
practitioner. He must have acquired experience in the practice of his profession for at 
least five (5) years in the case of the provincial or city health officer, and three (3) years 
in the case of the municipal health officer. 
105 


The appointment of a health officer shall be mandatory for provincial, city and 
municipal governments. 
(b) the health officer shall take charge of the office on health services shall: xxx 
(4) COORDINATE WITH THE DEPARTMENT OF HEALTH AND THE OTHER 
LOCAL GOVERNMENT UNITS TO ENSURE AN INTEGRATED APPROACH TO THE 
DELIVERY OF HEALTH CARE SERVICES THROUGH AREA-BASED HEALTH 
PLANNING, 
COMPLEMENT 
HEALTH SERVICES AMONG 
OTHER 
LOCAL 
GOVERNMENT UNITS AND WITH THE DEPARTMENT OF HEALTH THROUGH 
COMPREHENSIVE 
HEALTH CARE AGREEMENTS 
(CHCAs) AND 
OTHER 
INSTRUMENTS: PROVIDED, THAT THE FORMULATION OF SUCH AGREEMENTS 
AND 
INSTRUMENTS AS 
WELL 
AS 
THE 
PROGRAMMING, 
PLANNING, 
PRIORITIZING OF PROJECTS AND IMPLEMENTATION OF THE SAME SHALL BE 
UNDERTAKEN IN COLLABORATION AND TOGETHER WITH THE LOCAL 
GOVERNMENT UNITS CONCERNED; 
(5) IN THE CASE OF THE PROVINCIAL HEALTH OFFICER, HElSHE 
COORDINATE WITH THE HEALTH OFFICERS OF COMPONENT CITIES AND 
MUNICIPALITIES FOR THE PURPOSE OF INTEGRATION, COORDINATION, AND 
MONITORING LOCAL HEALTH PROGRAMS;" 
SECTION 140. An Article shall be added after Article Ten Article, to be known as 
Article Ten -A- SECTION 481-ENTITLED HUMAN RESOURCE DEVELOPMENT 
OFFICER and shall read as follows: 
ARTICLE TEN -The Administrator 
ARTICLE TEN - A  - HUMAN RESOURCE 
DEVELOPMENT OFFICER 
SECTION 480 - I - QUALIFICATIONS, TERMS, POWERS, AND 
DUTIES - (a) NO PERSON SHALL BE APPOINTED HUMAN RESOURCE 
DEVELOPMENT OFFICER UNLESS HE IS A CITIZEN OF THE PHILIPPINES, A 
RESIDENT OF THE LOCAL GOVERNMENT UNIT CONCERNED, OF GOOD MORAL 
CHARACTER, HOLDER OF A COLLEGE DEGREE, PREFERABLY IN HUMAN 
106 


RESOURCE 
DEVELOPMENT, 
PERSONNEL 
MANAGEMENT, 
PUBLIC 
ADMINISTRATION, LAW, OR OTHER RELATED COURSE FROM RECOGNIZED 
,COLLEGE OR UNIVERSITY, AND HOLDER OF FIRST GRADE CIVIL SERVICE 
ELIGIBILITY OR ITS EQUIVALENT. HE MUST HAVE ACQUIRED EXPERIENCE IN 
PERSONNEL MANAGEMENT AND HUMAN RESOURCE DEVELOPMENT WORK 
FOR AT LEAST FIVE (5) YEARS IN THE CASE OF THE PROVINCIAL OR CITY, AND 
THREE (3) YEARS IN THE CASE OF THE MUNICIPAL, HUMAN RESOURCE 
DEVELOPMENT OFFICER. 
THE APPOINTMENT OF A HUMAN RESOURCE DEVELOPMENT OFFICER IS 
MANDATORY FOR THE PROVINCIAL AND CITY GOVERNMENTS AND OPTIONAL 
FOR THE MUNICIPAL GOVERNMENT. 
(B) THE HUMAN RESOURCE DEVELOPMENT OFFICER SHALL: 
(1) 
PROVIDE DIRECTION AND SUPERVISION OF ACTIVITIES 
INVOLVING 
PERSONNEL 
MANAGEMENT 
AND 
HUMAN 
RESOURCE 
DEVELOPMENT; 
(2) 
HANDLE ACTIVITIES PERTAINING TO PERSONNEL MOVEMENT, 
EMPLOYEE DEVELOPMENT AND WELFARE BENEFITS; 
(3) 
REVIEW 
AND 
PROCESS 
APPOINTMENT 
PAPERS, 
PROMOTIONS, TRANSFERS, DETAILS, 
LEAVES OF ABSENCE 
AND OTHER 
PERSONNEL MOVEMENTS; 
(4) 
SUPERVISE PREPARATION OF PAYROLLS, UPDATE REPORTS 
ON SALARIES, SALARY DIFFERENTIALS, AND OTHER COMPENSATIONS AND 
EMOLUMENTS; 
(5) 
CONDUCT 
TESTS, 
INTERVIEWS, 
EVALUATION 
OF 
APPLICATIONS AND RECOMMEND PLACEMENT OF QUALIFIED APPLICANTS. 
(6) 
ACT AS CUSTODIAN OF RECORD OF PERSONNEL 
IN HIS 
JURISDICTION; 
(7) 
PROVIDE APPROPRIATE SECRETARIAT SERVICES FOR THE 
PROMOTION AND 
SELECTION BOARD; 
107 


(8) 
DESIGN MODULES FOR THE TRAINING REQUIREMENTS, 
COORDINATE 
AND 
CONDUCT 
IN-HOUSE 
SEMINARS, 
WORKSHOPS AND TRAINING FOR EMPLOYEES; 
(9) 
PREPARE 
STUDIES 
ON 
EMPLOYEE 
BENEFITS, AND 
PROPOSE POLICY ORDERS DESIGNED FOR EMPLOYEES' 
WELFARE; 
COORDINATE WITH THE CIVIL SERVICE COMMISSION ON 
PERSONNEL MATTERS; AND 
EXERCISE OTHER POWERS AND PERFORM OTHER DUTIES 
AND FUNCTIONS AS MAY BE PROVIDED BY LAW OR 
ORDINANCE. 
(1 0) 
(11) 
ARTICLE TWELVE - THE AGRICULTURIST 
SECTION 141. Section 482 of the Code is hereby amended to read as follows: 
Section 482. Qualifications, Powers and Duties. - (a) No person shall be 
appointed agriculturist unless he is a citizen af the Philippines, a resident of the local 
government unit concerned, of good moral character, a holder of a college degree in 
agriculture or any related caurse from a recognized college or university and a first grade 
civil service eligible or its equivarent. He must have practiced his professian in agriculture 
ur acquired experience in a related field for at least five (5) years in the case of the 
pravincial or city agriculturist, and three (3) years in the case of the municipal agriculturist. 
"The pasition of an agriculturist shall be mandatory for the provinc[ial]ES [government,] 
MUNICIPALITIES and [optional for the] cit[y]lES WHICH HAVE AGRICULTURAL AREAS 
[and urban municipal governments]. 
ARTICLE THIRTEEN - 
THE SOCIAL WELFARE AND DEVELOPMENT OFFICER 
SECTION 142. Section 483. Qualifications, Powers and Duties of the Code is 
hereby amended to read as follows: 
Section 483. Qualifications, Powers and Duties. - (a) No person shall be 
appointed social welfare and development officer unless he is a citizen of the 
108 


Philippines, a resident of the local government unit concerned, of good moral character, 
a duly licensed social worker [ or a holder of a college degree preferably in sociology or 
any related course from recognized college or university, and a first grade civil service 
eligible or its equivalent 1. He must have acquired experience in the practice of social 
work for at least five (5) years in the case of the provincial or city social welfare and 
development officer, and three (3) years in the case of the municipal social welfare and 
development officer. 
The appointment of social welfare and development officer is mandatory for the 
provincial, [and] city [government and optional for] and municipal governments. 
ARTICLE FOURTEEN - 
THE ENVIRONMENT AND NATURAL RESOURCES OFFICER 
SECTION 143. Section 484 of the Code is hereby amended to read as follows: 
Section 484 - Qualifications, Powers and Duties. - (a) No person shall 
be appointed environment and natural resources officer unless he is a citizen of the 
Philippines, a resident of the local government unit concerned, of good moral character, 
a holder of a college degree preferably in environment, forestry, agriculture or any 
related course from a recognized college or university, and a first grade civil service 
eligible or its equivalent. He must have acquired experience in environmental and 
natural resources management, conservation, and utilization, for at least five (5) years 
in the case of the provincial or city environment and natural resources officer, and three 
(3) years in the case of the municipal environment and natural resources officer. 
The appointment of the environment and natural resources officer is [optional] 
MANDATORY for the provincial[,] AND city [and] BUT OPTIONAL FOR municipal 
governments. 
(b) xxx 
ARTICLE SEVENTEEN - 
THE COOPERATIVES OFFICER 
109 


SECTION 144. Section 487 (a) of the Code is hereby amended to read as 
?dlows: 
Section 487 - Qualifications, Powers and Duties. - (a) No person shall 
be appointed cooperatives officer unless he is a citizen of the Philippines a resident of 
the local government unit concerned, of good moral character, a holder of a college 
degree preferably in business administration with special training in cooperatives or any 
related course from a recognized college or university, and a first grade civil service 
eligible or its equivalent. He must have experience in cooperatives organization and 
management for at least five (5) years in the case of the provincial or city cooperatives 
officer, and three (3) years in the case of the municipal cooperatives officer. 
The appointment of the cooperatives officer is [optional] MANDATORY for the 
provincial and city [,I [and] BUT OPTIONAL FOR municipal governments. 
SECTION 145. Section 492 of the Code is hereby amended to read as follows: 
Section 492. 
Representation, Chapters, National Liga - Every 
barangay shall be represented in said liga by the punong barangay or, in his absence or 
incapacity, by [a] THE HIGHEST RANKING sanggunian member [duly elected for the 
purpose among its members], who shall attend meetings or deliberations called by the 
different chapters of the liga. xxx" 
SECTION 146. Section 508 of the Code is hereby amended to read as follows: 
Section 508. Organizations - (a) Vice-governors, vice-mayors, 
sangguniang members of barangays, municipalities, component cities, highly urbanized 
cities and municipalities, and other [elective] officials and local government units, 
including those of the Metropolitan Manila area and any metropolitan political 
subdivisions, may form their respective leagues or federations, subject to applicable 
provisions of this title and pertinent provisions of this Code. 
I10 


BOOK FOUR 
MISCELLANEOUS AND FINAL PROVISIONS 
Title One - Penal Provisions 
SECTION 147. Section 513 of the Code is hereby amended to read as follows: 
Section 513 - Failure To Post and Publish the [Itemized] Monthly 
[Collections 
and 
Disbursements] 
STATEMENTS 
OF 
INCOME 
AND 
EXPENDITURES. - Failure by the local treasurer or the local chief accountant to post 
the [itemized] monthly [collections and disbursements] STATEMENTS OF INCOME 
AND EXPENDITURES of the local government unit concerned within ten (IO) days 
following the end of every month and for at least two (2) consecutive weeks at 
prominent places in the main office building of the local government unit concerned, its 
plaza and main street, and to publish said [itemization] STATEMENTS OF INCOME 
AND EXPENDITURES in a newspaper of general circulation, where available, in the 
territorial jurisdiction of such unit, shall be punishable by a fine not exceeding [Five 
hundred pesos (P500.OO)l TEN THOUSAND PESOS (PI 0,000.00) or by imprisonment 
not exceeding [one (1) month] ONE (1) YEAR , or both such fine and imprisonment, at 
the discretion of the court. 
SECTION 148. Section 516 of the Code is hereby amended to read as follows: 
Section 516 - Penalties for Violation of Tax Ordinances. - The 
sanggunian of a local government unit is authorized to prescribe fines or other penalties 
for violation of tax ordinances but in no case shall such fines be less than One thousand 
pesos (P1,OOO.OO) 
nor more than [Five] TEN thousand pesos [(P5,000.00)], 
(PlO,OOO.OO) nor shall imprisonment be less than one (1) month nor more than six 
(6)months. Such fine or other penalty, or both, shall be imposed at the discretion of the 
court. The sangguniang barangay may prescribe a fine of not less than One hundred 
pesos (P100.00) nor more than One thousand pesos (P1,OOO.OO) OR IMPRISONMENT 
OF NOT MORE THAN ONE (1) MONTH OR BOTH AT THE DISCRETION OF THE 
COURT. 


SECTION 149. Add new section 521 to read as follows: 
SECTION 
521 - PENALTIES 
FOR VIOLATIONS OF 
OTHER 
PROVISIONS OF THE CODE. ANY VIOLATION OF PROVISIONS OF THIS CODE 
NOT OTHERWISE SPECIFICALLY PENALIZED SHALL BE PUNISHED WITH A FINE 
NOT EXCEEDING FIVE THOUSAND PESOS (P5,OOO.OO) OR IMPRISONMENT OF 
NOT MORE THAN SIX (6) MONTHS OR BOTH AT THE DISCRETION OF THE 
GOURT. 
SECTION [521] 522. Mandatory Review Every Five Years. xxx 
SECTION [522] 523. Insurance Coverage. xxx 
SECTION [523] 524. Personnel Retirement and/or Benefits. xxx 
SECTION 150. Section 524 of the Code is hereby amended to read as follows: 
Section [524] 525 - lnventory of lnfrastructure and ESTABLlSHMENT 
OF Other Community Facilities - 
(a) Each local government unit shall conduct a periodic inventory of infrastructure 
and other community facilities and undertake the maintenance, repair, improvement, or 
reconstruction of these facilities through a closer cooperation among the various 
agencies of the National Government operating within the province, city, or municipality 
concerned. 
(b) No infrastructure or community project within the territorial jurisdiction of any 
local government unit shall be undertaken without informing the local executive and the 
sanggunian concerned AND COMPLIANCE WITH THE REQUIREMENTS OF 
SECTIONS 2 (D), 26 AND 27 OF THIS CODE. 
SECTION [525] 526. Records and Properties. - xxx 
TITLE THREE - TRANSITORY PROVISIONS 
SECTION [526] 527. Application of this Code to Local Government 
Units in the autonomous Regions. - xxx 
SECTION [527] 528. Prior Approval or Clearance on Regular and 
Recurring Transactions. - xxx 
112 


SECTION [528] 529. 
Deconcentration of Requisite Authority and Power - 
xxx 
SECTION [529] 530 - Tax Ordinance or Revenue Measures. - xxx 
SECTION 151. Section 530 of the Code is hereby amended to read as follows: 
Section [530] 531 - Local Water Districts. - All powers, functions, and 
Attributes granted by Presidential Decree Numbered One hundred ninety - eight ( P.D. 
198 ), otherwise known as " The Provincial Water Utility Act of 1973, " to the Local 
Water Utilities Administration (LWUA) [may] SHALL be devolved into the existing local 
water district or THE LOCAL GOVERNMENT UNIT should they opt or choose to 
exercise, in writing, such powers, functions and attributes: Provided, That all obligations 
of the local water district concerned to the LWUA, IF ANY, shall first be settled prior to 
said devolution: PROVIDED, FURTHER, THAT LOCAL GOVERNMENT UNIT 
OPERATING A LOCAL WATER SYSTEM SHALL BE EXEMPTED FROM PAYMENT 
OF TARIFF AND DUTIES ON IMPORTED MACHINERY 
AND EQUIPMENT 
DIRECTLY USED IN THE OPERATION AND MAINTENANCE OF THE WATER 
SYSTEM. 
SECTION [531] 532. Debt Relief for Local Government Units. - xxx 
SECTION [532] 533. Election for the Sangguniang Kabataan. - xxx 
SECTION 152. Section 533 of the Code is hereby amended to read as follows: 
Section 15331 534, Formulation of lrnplementing Rules and Regulations. - (a) 
With one month after the approval of this Code, the President shall convene the 
wersight Committee as herein provided for. The said Committee shall formulate and 
issue the appropriate rules and regulations necessary for the efficient and effective 
implementation of any and all provisions of this Code, thereby ensuring compliance with 
the principles of local autonomy as defined under the Constitution. 
(b) The Committee shall be composed of the following: 
(1) The Executive Secretary who shall be the Chairman; 
113 


(2) [Three (3) members of the Senate to be appointed by the President of the 
Senate, to include] THE CHAIRMAN OF THE SENATE COMMITTEE ON 
LOCAL 
GOVERNMENT 
OR 
HIS 
DULY 
AUTHORIZED 
REPRESENTATIVE 
(3) [Three (3) members of the House of Representatives to be appointed by 
the Speaker, to include] THE CHAIRMAN OF THE HOUSE COMMITTEE 
ON 
LOCAL 
GOVERNMENT 
OR 
HIS 
DULY 
AUTHORIZED 
REPRESENTATIVE. 
(4) The Cabinet represented by the following: 
(i) 
Secretary of the Interior and Local Government OR HIS 
UNDERSECRETARY; 
Secretary of Finance OR HIS UNDERSECRETARY; 
(ii) 
(iii) 
Secretary 
of 
Budget 
and 
Management 
OR 
HIS 
UNDERSECRETARY; 
(5) One representative from each of the following: 
(i) 
The league of Provinces; 
(ii) 
The League of Cities; 
(iii) 
(iv) 
The League of Municipalities; and 
The Liga ng mga Barangay; 
(6) ONE REPRESENTATIVE FROM EACH OF THE NATIONAL AGENCIES 
WITH DEVOLVED FUNCTIONS 
(c) The Committee shall submit its report and recommendation to the President 
within two (2) months after its organization. If the president fails to act within thirty (30) 
uays from receipt thereof, the recommendation of the Oversight Committee shall be 
deemed approved. Thereafter, the Committee shall supervise the transfer of such 
powers and functions mandated under this Code to the local government units together 
with the corresponding personnel, properties, asset and liabilities of the offices or 
agencies concerned, with the least possible disruptions to existing programs and 
projects. The Committee shall likewise recommend the corresponding appropriations 
necessary to effect the said transfer. 
114 


For this purpose, the services of a technical staff shall be enlisted from among 
the qualified employees of Congress, the government offices and the leagues 
constituting the Committee. 
THE COMMITTEE SHALL NOW DISCHARGE THE FOLLOWING FUNCTIONS: 
ASSIST THE OFFICE OF THE PRESIDENT IN THE FORMULATION OF 
POLICIES AND SERVE AS THE CENTRAL CLEARING BODY FOR THE 
ISSUANCE 
OF 
POLICIES 
RELATIVE 
TO 
THE 
EXECUTIVE 
INTERPRETATION OF THE LOCAL GOVERNMENT CODE; 
SERVE AS THE VENUE FOR CONSULTATION TO VENTILLATE, 
ARTICULATE AND CONCEPTUALIZE ISSUES AFFECTING LOCAL 
GOVERNANCE AND THE PROMOTION OF LOCAL AUTONOMY; 
COORDINATE EFFORTS OF VARIOUS NATIONAL GOVERNMENT 
AGENCIES, THE DIFFERENT LOCAL GOVERNMENT LEAGUES, NON- 
GOVERNMENTAL AND 
PEOPLE'S ORGANIZATIONS, AND 
THE 
PRIVATE SECTOR IN THE IMPLEMENTATION OF THE LOCAL 
GOVERNMENT CODE OF 1991; AND 
MONITOR THE 
IMPLEMENTATION OF VARIOUS 
ISSUES AND 
POLICIES THROUGH REGIONAL ACTION TEAMS. 
THE DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT SHALL 
SERVE AS THE COORDINATING ARM OF THE OVERSIGHT COMMITTEE. 
SUCH AMOUNTS AS MAY BE NECESSARY FOR THE OVERSIGHT 
COMMITTEES OPERATING AND OTHER EXPENSES SHALL BE CHARGED 
AGAINST THE APPROPRIATIONS OF THE DEPARTMENT OF THE INTERIOR AND 
LOCAL GOVERNMENT. 
TITLE FOUR - FINAL PROVISIONS 
SECTION 154 - Section 534 of the Code is hereby amended to read as 
follows: 
Section [534] 535 - Repealing Clause - 
(a) xxx 
(b) xxx 
115 


(e) 
The 
PROVISIONS OF 
THE 
following 
[provisions] 
LAWS AND 
PRESIDENTIAL DECREES are hereby repealed or amended insofar as they are 
inconsistent with the provisions of this Code: Sections 2, 16, and 29 of Presidential 
Decree 704; Section 12 of Presidential Decree No. 87, as amended; Sections 52, 53, 
66, 67, 68, 70, 71, 72, and 74 of Presidential Decree No. 463; Section 16, of 
Fresidential Decree No., 972, as amended; SECTION 18 OF REPUBLIC ACT 8550 AS 
AMENDED; SECTIONS 201, 203, 205, 206, AND 207 OF PRESIDENTIAL DECREE 
NO, 1096; SECTIONS 3,4, 5, 6, 8, 9, AND 10 OF PRESIDENTIAL DECREE NO. 957; 
SECTION 4 AND SECTION 22, PARAGRAPHS (2) and (3), CHAPTER I, TITLE V OF 
EXECUTIVE ORDER NO. 292, SERIES OF 1987; SECTION 13, PARAGRAPH 2) OF 
PRESIDENTIAL DECREE NO. 1869; and 
(9 
All general and special laws, acts, city charters, decrees, executive orders, 
proclamations and administrative regulations, or part or parts thereof which are 
inconsistent with any of the provisions of this Code are hereby repealed or modified 
accordingly. 
SECTION 155- Section 535 of the Code is hereby amended to read as follows: 
Section [535] 536 - Separability Clause - If, for any reason or reasons, any 
part or provision of this Code shall be held unconstitutional or invalid, other parts or 
provisions hereof which are not affected thereby shall continue to be in full force and 
effect. 
SECTION 156 - Section 536 of the Code is hereby amended to read as follows: 
Section [536] 537 - Effectivity Clause - This Code shall take effect on 
January first, nineteen hundred ninety-two, unless otherwise provided herein, after its 
complete publication in at least 
[one (1) newspaper] TWO (2) NATIONAL 
NEWSPAPERS of general circulation. 
Approved. 
116