NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
First Regular Session
SENATE 
s. B. NO. 924
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of tijf fepcrctni'^
*22 JUL28 P5 -01
RECEIVED BV;
Introduced by SENATOR JOEL VILLANUEVA
AN ACT PROMOTING LOCAL GOVERNMENT 
EMPOWERMENT IN ORDER TO ACHIEVE INCLUSIVE 
DEVELOPMENT, AMENDING FOR THE PURPOSE SECTION 
284 OF REPUBLIC ACT NO. 7160, OTHERWISE KNOWN AS 
THE LOCAL GOVERNMENT CODE OF 1991
EXPLANATORY NOTE
Republic Act No. 7160 or the Local Government Code of 1991 (LGC) 
sought to empower Local Government Units (LGUs) by giving them the 
authority to effectively formulate and implement their respective projects and 
programs by, among others, giving them a just share in the national taxes and 
empowering them to create their own sources of revenue.
The share of the LGUs in national taxes is realized through the automatic 
appropriation and release of Internal Revenue Allotments (IRA) to each LGU. 
The IRA from the National Government enables the LGUs to fund their 
respective programs consistent with the national objective of effectively 
carrying out devolved functions. With this principle in mind, the Supreme Court 
in Mandanas v. Ochoa (G.R. No. 199802, 2018) clarified that the just share of 
the LGUs includes all national taxes and not only national internal revenue 
taxes. World Bank estimates that the share of the IRA of LGUs in the 2022 
budget increased by 55%.1
1 June 10, 2021. PHILI.PPINES: Mandanas Ruling Provides Opportunities for Improving Service Delivery Through 
Enhanced Decentralization. June 10, 
2021. Retrieved from: httDs://wv/w.worldbank.ora/en/news/Dress-
release/2021/06/10/philippines-mandanas-rulina-provides-opportunities-for-improvinq-service-deliverv-throuah-
enhanced-decentralization (last accessed: July 22, 2022).


Aside from their right to a just share in national taxes, LGUs are also 
empowered under the LGC to create and broaden their own sources of 
revenue, by giving therr., for example, the power to tax the transfer of real 
property ownership.
However, despite the additional resources and possible additional 
sources of revenue, many LGUs continue to suffer from limited fiscal resources. 
More often than not, this translates to a failure to effectively and adequately 
provide social services to constituents. To date, many LGUs continue to rely on 
direct provision from the national government especially for programs and 
projects that contribute to local development.
To address the issue of scarce resources faced by many LGUs and to 
support them in the full devolution of certain functions and delivery of basic 
services and facilities, this bill seeks to provide additional funding to LGUs by 
amending Section 248 of the LGC by increasing their share in the national taxes 
from forty percent (40%) to fifty percent (50%).
Thus, the immediate passage of this bill is earnestly sought.
SENATOR JOEL VILLANUEVA


NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
First Regular Session
SENATE
s. B. NO. 924
^euate
of tDe ^ccrctari>
•22 JUL28 P5:01
RHCEIVED SrY:
Introduced by SENATOR JOEL VILLANUEVA
AN ACT PROMOTING LOCAL GOVERNMENT EMPOWERMENT IN 
ORDER TO ACHIEVE INCLUSIVE DEVELOPMENT, AMENDING FOR 
THE PURPOSE SECTION 284 OF REPUBLIC ACT NO. 7160, 
OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OF
1991
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Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
SECTION 1. Section 284 of Republic Act No. 7160, otherwise known as 
the “Local Government Code of 1991” is hereby amended to read as follows:
“SEC. 284. Allotment of [Internal Revenue] Taxes. -
Local government units shall have a share in the 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, FIFTY PERCENT (50%) [forty 
percent (40%).]
XXX
SEC. 2. Implementing Rules and Regw/af/ons. - Within sixty (60) days 
from the effectivity of this Act, the Secretary of Finance and the Secretary of 
Budget and Management, in consultation with Department of Interior and Local 
Government (DILG), the Leagues of Provinces, Cities and Municipalities, Liga 
ng mga Barangay and other relevant stakeholders, shall promulgate the 
necessary rules and regulations for the effective implementation of this Act.


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SEC. 3. Separability Clause. - If any provision of this Act or the 
application such provision to any person or circumstances is declared 
unconstitutional, the remainder of the Act or the application of such provision to 
other person or circumstances shall not be affected by such declaration.
SEC. 4. Repealing Clause. - Any law, presidential decree or issuance, 
executive order, letter of instruction, administrative order, rule or regulation of 
the contrary to or inconsistent with any provision of this Act is hereby repealed 
or modified accordingly.
SEC. 5. Effectivity. - This Act shall take effect fifteen (15) days from 
the date of its publication in the Official Gazette or in at least two (2) newspapers 
of general circulation.
Approved,