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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Batasan Hills, Quezon City 
NINETEENTH CONGRESS 
Second Regular Session 
House Bill No. _________ 
Introduced by 
SPEAKER FERDINAND MARTIN G. ROMUALDEZ
HON. YEDDA MARIE K. ROMUALDEZ 
and 
HON. JUDE A. ACIDRE 
AN ACT 
INSTITUTIONALIZING THE INCOME CLASSIFICATION OF BARANGAYS, 
PROVIDING A BARANGAY EQUALIZATION FUND, AND FOR OTHER 
PURPOSES 
EXPLANATORY NOTE 
The barangay is the smallest political unit in the Philippines. Under Republic 
Act No. 7160, otherwise known as the “Local Government Code of 1991,” the 
barangay serves as the primary planning and implementing unit of government 
policies, plans, programs, projects, and activities in the community, and as a forum 
wherein the collective views of the people may be expressed, crystallized, and 
considered, and where disputes may be amicably settled. 
Barangays also have the power to create their own sources of revenue. It may 
levy taxes, fees, and charges within their respective territorial jurisdiction. Further, they 
also have shares in the Internal Revenue Allotment (IRA) of the city or municipality 
that they are part of. However, despite such, most barangays still lack the sufficient 
funds to address the needs of their constituents.  
Pursuant thereto, this bill seeks to establish a Barangay Equalization Fund for 
every barangay, in addition to the Internal Revenue Allotment share that each 
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barangay is already receiving from the national government. It shall be allocated for 
infrastructure development, livelihood programs, various social services, and a 
barangay nutrition program. The implementation of this bill will uplift the socio-
economic conditions especially of those residing in far-flung barangays and will help 
spur economic development.  
In the 18th Congress, this bill was filed by Rep. Ron P. Salo which was primarily 
referred to the Committee on Local Government.  
In view of the foregoing, approval of this bill is earnestly sought. 
Rep. FERDINAND MARTIN G. ROMUALDEZ 
Representative, First District of Leyte 
Rep. YEDDA MARIE K. ROMUALDEZ 
Representative, Tingog Sinirangan 
Rep. JUDE A. ACIDRE 
Representative, Tingog Sinirangan 


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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Batasan Hills, Quezon City 
NINETEENTH CONGRESS 
Second Regular Session 
House Bill No. _________ 
Introduced by 
SPEAKER FERDINAND MARTIN G. ROMUALDEZ
HON. YEDDA MARIE K. ROMUALDEZ 
and 
HON. JUDE A. ACIDRE 
AN ACT 
INSTITUTIONALIZING THE INCOME CLASSIFICATION OF BARANGAYS, 
PROVIDING A BARANGAY EQUALIZATION FUND, AND FOR OTHER 
PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
Section 1. Declaration of Policy. Section 9, Article I of the 1987 Constitution
states that "the State shall promote a just and dynamic social order that will ensure 
the prosperity and independence of the nation and free the people from poverty 
through policies that provide adequate social services, promote full employment, a 
rising standard of living, and an improved quality of life for all." 
Section 2. Barangay Equalization Fund. There shall be included in the
annual national budget a Barangay Equalization Fund for every barangay. The 
appropriation of each barangay shall be based on the Philippine Statistics Authority's 
income classification of the city or municipality in which the barangay belongs. The 
Barangay Equalization Fund shall be on top of the Internal Revenue Allotment share 
that each barangay is already receiving from the national government. 
a. Every barangay of Fourth, Fifth and Sixth Class municipalities shall receive an
annual appropriation of six million pesos (₱ 6,000,000.00)
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b. Every barangay of First, Second and Third Class municipalities shall receive an 
annual appropriation of five million pesos (₱ 5,000,000.00). 
c. Every barangay of Fourth, Fifth and Sixth Class cities shall receive an annual 
appropriation of four million pesos (₱ 4,000,000.00). 
d. Every barangay of First, Second and Third Class cities shall receive an annual 
appropriation of three million pesos (₱ 3,000,000.00). 
 
Section 3. Trust Fund Classification. The Barangay Equalization Fund shall 
be released annually to every barangay before March 1st of the calendar year and 
shall be treated as a trust fund in their annual budget. 
 
Section 4. Exclusive Allocation. The fund shall be solely allocated for the 
upliftment of the economic life of the constituents of the barangay, and shall 
specifically be allotted as follows: 
a. Twenty-five per cent (25%) shall be allocated for infrastructure development; 
b. Twenty-five per cent (25%) shall be allocated for livelihood programs; 
c. Twenty-five per cent (25%) shall be allocated for social services such as 
medical, educational, transportation, burial, and food subsidy assistance; and, 
d. Twenty-five per cent (25%) shall be allocated for a barangay nutrition program. 
 
Not more than 5% of the allocated amount shall be spent for administration of 
any of the aforesaid program or project. 
 
Section 5. Prohibited Acts. Any public officer accountable for the Barangay 
Equalization Fund who shall take or misappropriate, or shall consent or permit, through 
abandonment or negligence, any other person to take such public funds or property, 
wholly or partially, shall be liable for misappropriation or malversation of such funds or 
property, and shall suffer the penalties prescribed in Article 217 of the Revised Penal 
Code. 
 
Section 6. Implementing Rules and Regulations. Within ninety (90) days 
from the effectivity of this Act, the Department of Budget and Management, 


 
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Department of Finance, and the Department of the Interior and Local Government, 
shall promulgate the implementing rules and regulations of this Act. 
 
Section 7. Appropriations. The amount necessary for the initial 
implementation of this Act shall be included in the annual General Appropriations Act. 
 
Section 8. Separability Clause. If any provision or part of this Act is declared 
invalid or unconstitutional, the remaining parts or provisions not affected thereby shall 
continue to be in full force and effect. 
 
Section 9. Repealing Clause. All laws, executive orders, and administrative 
orders, or parts thereof, inconsistent with any provision of this Act are hereby repealed 
or amended accordingly. 
 
Section 10. Effectivity Clause. This Act shall take effect fifteen (15) days after 
its publication in the online version of the Official Gazette or in two (2) newspapers of 
general circulation. 
 
Approved,