PRESS Dy
Republic of the Philippines ‘fe desig pa A
HOUSE OF REPRESENTATIVES nig ‘Sr

Quezon City, Metro Manila

Eighteenth Congress
First Regular Session

House Bill No. 1051

Introduced by Honorable Dahlia A. Loyola

EXPLANATORY NOTE

This bill was originally the consolidated bill filed during the Second Regular
Session of the Seventeenth Congress. It was approved on third reading by the House
of representatives and transmitted to the Senate. In the Senate, the Committee on
Local Government chaired by Senator Juan Edgardo M. Angara submitted a
counterpart measure docketed as Senate Bill No.1842 as contained under Committee
Report No. 396 with Senators Panfilo M. Lacson, Antonio F. Trillanes, Juan Edgardo
M. Angara, Richard J. Gordon, Juan Miguel F. Zubiri as authors thereof. Said bill was
pending on second reading when the Seventeenth Congress adjourned last June 7,
2019.

The primordial reason for converting a municipality or cluster of barangays into
a city is to ensure its economic viability (Latasa v Commission on Elections, G.R. No.
154829, December 10, 2003). As a general rule, the creation of a local government
unit or its conversion from one level into another shall be based on verifiable indicators
or viability and projected capacity to provide services, specifically income, population
and land area (Section 7, R.A. No. 7160, Local Government Code of 1991).

Among the three, there is no doubt that the income requirement is the most
controlling. In recognition of such fact, the Code sets forth the following criterion:
Income — It must be sufficient, based on acceptable standards, to provide for all
essential facilities and services and special functions commensurate with the size of
its population, as expected of the local government unit concerned (Section 7(a),
supra).

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With regards to the population requirement, the Code merely provides, to wit:
Population — It shall be determined as the total number of inhabitants, within the
territorial jurisdiction of the local government unit concerned (Section 7(b), supra).

And lastly, with regards to the land area, the Code merely requires that the
same be contiguous; properly identified by metes and bounds; and more importantly,
must be sufficient to provide for such basic sorvices and facilities to mect the
raquiraments of its populace (Section 7(c), supra).

As our law stands today, before a municipality or cluster of barangays could be
converted into a component city, it must have an annual income of at least One
Hundred Million Pesos (P100,000,000.00) and a territory of at least one hundred (100)
square kilometers or a population of not less than one hundred fifty thousand
(150,000) (Sec. 450, R.A. No. 7160, Local Government Code, as amended by R.A.
9006).

However, there are some municipalities which, though not compliant with the
population and income requirement, have nevertheless demonstrated unquestionable
capacity to provide essential government facilities, social services to its inhabitants,
comparable or even superior to that of existing cities.

As we alll know, living in a city has its corresponding economic advantage. Thus,
it would be utterly unfair to the inhabitants of municipalities to forever foreclose their
right to the benefits of cityhood simply because such municipalities’ land area and
population is less than that required under the Local Government Code.

While there is no hard and fast rule to determine the optimum populace or land
area for a city, applying the principles of political law for the creation of a sovereign
‘state, the population must be numerous enough and able to procreate in order to
ensure perpetuation of the political entity. With regards to its land area, the same must
be large enough to be able to sufficiently provide for its people.

Noteworthy are the small states, specifically: Monaco, a tiny state along the
French Riviera which has an area of just 0.7 square miles (1.81 sq. km.) and a
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population of just 32,000. The island state of Naura, became independent in 1968,
and has an area of just 8.5 square miles (22 sq. km.) and a population of just 13,000.
Tuvalu, formerly known as Ellice Islands, gained its independence in 1978, and has
an area of just 9 square miles (23.3 sq. km.) and a population of 12,000. San Marino,
located at Mt. Titano in north central Italy, which has an area of just 24 square miles
(62.13 sq. km.) and a population of just 29,000.

If the above political entities have attained their status as an independent state
despite its small population and land area, all the more reason for municipalities which
have time and again demonstrated their capacity to thrive despite their small
population and land area to be allowed to upgrade its status to that of a city.

To allay the fear of the league of cities that said conversion will adversely affect
the IRA share of their members, this bill introduces the concept of IRA Portability
allowing these municipalities to bring their current IRA with them after their conversion.
With existing cities retaining their present share in the IRA shares, with a minimal
decrease due to the corresponding increase in the IRAs of the converted
municipalities, the adverse effects of the numerous conversions of municipalities
qualified under this bill's proposed exemption will be avoided.

Further, to emphasize, this proposed bill provides just an exception to the
general rule. The general rule remains — that for creation of or conversion into a city,
a municipality must have an income of at least P100,000,000.00 and a land area of at
least 100 square kilometers of population of at least 150,000. The exception is that, if
the municipality generates a local income of at least double than that of the general
rule, that is, Two Hundred Fifty Million Pesos (P250,000,000.00), then it is qualified to
be converted into a city without regard to the size of its land area or population.

In view thereof, support and approval of this measure is earnestly sought.

DR. DAHLIA A. LOYOLA
RepresentatWe
Fifth District, Cavite


PUNE

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Eighteenth Congress
First Regular Session

House Bill No. 1051

Introduced by Honorable Dahlia A. Loyola

AN ACT
EXEMPTING FROM THE POPULATION AND LAND AREA REQUIREMENTS THE
CONVERSION OF A MUNICIPALITY INTO A COMPONENT CITY IF IT HAS A
LOCALLY GENERATED AVERAGE ANNUAL INCOME OF AT LEAST TWO
HUNDRED FIFTY MILLION PESOS (P250,000,000.00) AND ADOPTING IRA
PORTABILITY FOR EVERY SUBSEQUENT CONVERSION OF A MUNICIPALITY
INTO A CITY, AMENDING FOR SUCH PURPOSE SECTION 450 OF REPUBLIC
ACT NO. 7160, OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OF
1991

Be it enacted by the Senate and House of Representatives in Congress
assembled:

SECTION 1. Section 450 of Republic Act No. 7160 as amended, otherwise
known as the Local Government Code of 1991, as amended by Republic Act No. 9009,
is hereby further amended to read as follows:

“ SEC. 450. Requisites for Creation - (a) A municipality or a cluster of
barangays may be converted into a component cily if it has a locally generated
average annual income, as certified by the Department of Finance, of at least
One hundred million pesos (P100,000,000.00) for the last two (2) consecutive
years based on [2000] 2012 constant prices, and if it has either of the following
requisites:

(i) Contiguous territory of at least one hundred (100) square kilometers,
as certified by the Lands Management Bureau; or

(ii) a population of not less than one hundred fifty thousand (150,000)
inhabitants, as certified by the [National Statistics Office] PHILIPPINE
STATISTICS AUTHORITY (PSA).

“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.


“A MUNICIPALITY OR A CLUSTER OF BARANGAYS WITH A
LOCALLY GENERATED AVERAGE ANNUAL INCOME, AS
CERTIFIED BY THE DEPARTMENT OF FINANCE, OF AT LEAST
TWO HUNDRED FIFTY MILLION PESOS (P250,000,000.00) FOR THE
LAST TWO (2) CONSECUTIVE YEARS BASED ON 2012 CONSTANT
PRICES MAY ALSO BE CONVERTED INTO A COMPONENT CITY IF
IT HAS EITHER A POPULATION OF NOT LESS THAN ONE
HUNDERED THOUSAND (100,000) INHABITANTS AS CERTIFIED
BY THE PSA OR A CONTIGUOUS TERRITORY OF AT LEAST ONE
HUNDRED (100) SQUARE KILOMETERS, AS CERTIFIED BY THE
LAND MANAGEMENT BUREAU: PROVIDED THAT, THREE (3)
YEARS AFTER THE EFFECTIVITY OF THIS ACT AND EVERY
THREE (3) YEARS THEREAFTER, THE THRESHOLD AMOUNT OF
TWO HUNDRED FIFTY MILLION PESOS (P250,000,000.00) SHALL
BE INCREASED BY FIVE PERCENT (5%). PROVIDED, FURTHER,
THAT THE NEWLY CONVERTED CITIES FROM THE ENACTMENT
OF THIS LAW SHALL BRING THEIR INTERNAL REVENUE
ALLOTMENT (IRA) AS MUNICIPALITIES TO THE IRA SHARE OF
CITIES TO MINIMIZE THE EFFECT OF CONVERSION.”

(b) The territorial jurisdiction of a newly-created city shall be properly identified
by metes and bounds. The requirement on land area shall not apply where the
city proposed to be created is composed of one (1) or more islands. The territory
need not be contiguous if it comprises two (2) or more islands.

(c) The average annual income shall include the income accruing to the general
fund, exclusive of specific funds, transfers, and non-recurring income.

SEC. 2. Separability Clause - If any provision of this Act shalll be declared invalid
or unconstitutional, the remaining part or provisions not otherwise affected shall
remain in force.

SEC. 3. Repealing Clause - Any law, decreed, ordinance, administrative
circulars not consistent with any provision of this Act is hereby amended, repealed or
modified accordingly.

SEC. 4. Effectivity - This Act shall take effect fifteen (15) days after its complete
publication in the Official Gazette or in at least two (2) newspapers of general
circulation.

Approved,