EIGHTEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
V'C'Mtiu' ot;:)( *ctirr?rt«
S E N A T E
S. B. No. 844
T9 
JUL 31 P4 ;08
Introduced by Senator SONNY ANGARA
AN ACT
TO 
ENHANCE 
INTER-LGU 
COOPERATION 
BY 
AMENDING 
CERTAIN 
PROVISIONS IN  BOOK I  OF REPUBLIC ACT NO. 7160, OTHERWISE 
KNOWN AS THE "LOCAL GOVERNMENT CODE OF 1991"
EXPLANATORY NOTE
A key feature of the Local Government Code (Republic Act No. 7160) is the 
recognition that local issues and development often do not respect geographic and 
administrative boundaries. Environmental concerns cut across municipalities and 
sometimes even provinces and regions.
For instance, road infrastructure investments made in one province can 
improve the access of agricultural goods in an adjoining province by connecting both 
of them to a national artery. As a result, the benefit of thinking "outside the 
boundaries" for their mutual benefit has become apparent to many LGUs. 
Fortunately, the Local Government Code has foreseen this and encourages inter-LGU 
cooperation ventures.
However, what the Code has not foreseen was that a new vehicle is needed 
whenever memoranda of agreement are insufficient to maximize the potential of 
inter-LGU cooperation. Although LGUs can share their resources for a venture, 
because existing law does not allow them to formalize a legal personality for the 
venture, they cannot collectively contract credit financing for the venture.
It is in this regard that an amendment of the Code is necessary for the 
creation of a mechanism by which LGUs that wish to organize themselves into a 
legal entity can access credit financing or other debt instruments, making their 
alliance more efficient and effective.


EIGHTEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHIUPPINES 
)
First Regular Session 
)
r.-n*
S E N A T E
S. B. No. 844
•19 JUL 31 P4-08
Introduced by Senator SONNY ANGARA
AN ACT
TO 
ENHANCE 
INTER-LGU 
COOPERATION 
BY 
AMENDING 
CERTAIN 
PROVISIONS IN  BOOK I  OF REPUBLIC ACT NO. 7160, OTHERWISE 
KNOWN AS THE "LOCAL GOVERNMENT CODE OF 1991"
Be it enacted by the Senate and House o f Representatives o f the Philippines in 
Congress assembled:
1 
Section 1. Section 3 of Republic Act No. 7160, otherwise known as the Local
2 
Government Code of 1991, hereinafter referred to as the "Code", is hereby amended
3 
to read as follows:
4 
"Sec. 3. Operative Principles o f Decentralization. -  The formulation and
5 
implementation of policies and measures on local autonomy shall be
6 
guided by the following operative principles:
7 
( a ) x x x
8 
XXX
9 
(f) 
Local government units may group themselves, consolidate or
10 
coordinate 
their efforts, 
services, 
and 
resources 
for 
purposes
11 
commonly beneficial to them THROUGH MUTUAL AGREEMENT OR
12 
THROUGH THE FORMATION OF AN ALLIANCE W ITH A LEGAL
13 
PERSONALITY;
14 
(g ) X X X
15 
XXX."


1 
Sec. 2. Section 33 of the Code is hereby amended to read as follows:
2 
"Sec. 33. Cooperative Undertakings Among Local Government Units
3 
THROUGH MUTUAL AGREEMENT. -  Local government units may,
4 
through appropriate ordinances, group themselves, consolidate, or
5 
coordinate 
their 
efforts, 
services, 
and 
resources 
for 
purposes
6 
commonly beneficial to them THROUGH MUTUAL AGREEMENT. In
7 
support of such undertaking, the local government units involved may
8 
upon approval by the sanggunian concerned after a public hearing
9 
conducted for the purpose, contribute funds, real estate, equipment,
10 
and other kinds of property and appoint or assign personnel under
11 
such items and conditions as may be agreed upon by the participating
12 
local government units through Memoranda of Agreement."
13 
Sec. 3. A new Section 33-A in Book I of the Code is hereby inserted as
14 
follows:
15 
"SEC. 33-A. COOPERATIVE UNDERTAKINGS AMONG LOCAL
16 
GOVERNMENT U N IT THROUGH 
THE FORMATION OF AN
17 
ALLIANCE W ITH LEGAL PERSONALITY. -  LOCAL GOVERNMENT
18 
UNITS 
MAY 
GROUP 
THEMSELVES, 
CONSOLIDATE, 
OR
19 
COORDINATE THEIR EFFORTS, SERVICES, AND RESOURCES
20 
FOR PURPOSES COMMONLY BENEFICIAL TO THEM THROUGH
21 
THE 
FORMATION 
OF 
AN 
ALLIANCE 
W ITH 
A 
LEGAL
22 
PERSONALITY. FOR THIS PURPOSE, A NATIONAL REGISTRY
23 
OF ALLIANCES (NRA) SHALL BE FORMED TO REGISTER THE
24 
ALLIANCE OF LGUS AND ESTABLISH THE LEGAL PERSONALITY
25 
AND ALL THE CONSEQUENT IM PLICATIONS OF THE SAME.
26 
THE NRA SHALL BE COMPOSED OF THE SECRETARY OF THE
27 
DEPARTMENT OF INTERIOR AND LOCAL GOVERNMENT AS
28 
CHAIR W ITH 
THE 
PRESIDENTS OR CHAIRMEN 
OF THE
29 
LEAGUES OF PROVINCES, CITIES, AND M UNICIPALITIES AND
30 
THE LIGA NG MGA BARANGAYS AS BOARD MEMBERS. THE
31 
NRA 
BOARD 
SHALL 
FORMULATE 
THE 
REQUIREMENTS,
32 
GUIDELINES, AND PROCEDURES FOR THE APPLICATION,


1 
CREATION, REGISTRY, REGULATION AND MONITORING OF
2 
INTER-LGU ALLIANCES COVERED BY THE NRA. THE REGISTRY
3 
AND SECRETARIAT SHALL BE HOUSED AT THE DEPARTMENT
4 
OF THE INTERIOR AND LOCAL GOVERNMENT."
5 
Sec. 4. Repealing Clause. -  All general and special laws, acts, city charters,
6 
executive orders, presidential proclamations, issuances, rules and regulations, or
7 
parts thereof which are contrary to or inconsistent with any of the provisions of this
8 
Act are hereby repealed, amended, or modified accordingly.
9 
Sec. 5. Separability Clause. -  If any portion or provision of this Act is
10 
subsequently declared invalid or unconstitutional, other provisions hereof which are
11 
not affected thereby shall remain in full force and effect.
12 
Sec. 6. Effectivity Clause. -  This Act shall take effect fifteen (15) days after its
13 
publication in the Official Gazette or in a newspaper of general circulation.
Approved,