NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
SENATE 
S. B. No. 90.*^
o( tl)f f ft rhii'i’
*22 JUL27 P4 41
RECEIVED BY;
Introduced by Senator SONNY ANGARA
AN ACT
TO REDUCE THE COST OF DOING BUSINESS IN LOCAL GOVERNMENT 
UNITS BY AMENDING CERTAIN PROVISIONS IN BOOK II OF REPUBLIC 
ACT NO. 7160, OTHERWISE KNOWN AS THE "LOCAL GOVERNMENT CODE 
OF 1991"
EXPLANATORY NOTE
One of the key objectives of the Local Government Code (Republic Act No. 
7160) was to provide local government units (LGUs) greater means to create their 
own revenue sources. Over the years and in a number of LGUs, the pursuit of this 
objective has been in conflict with attracting and maintaining private investment. 
Many private businesses complain that the fees imposed by LGUs have raised the 
cost of doing business, thereby reducing their profitability and their viability.
LGUs unlikely impose high fees and charges with the intent of taxing 
businesses out of existence. However, in many cases, LGUs lack the guidance on 
how to fairly and efficiently determine what should be imposed (fee or charge).
With this in mind, this bill mandates the Department of Finance thru the 
Bureau of Local Government Finance to be the principal agency in charge of 
providing clear guidelines in the setting of local fees and charges, which LGUs should 
then incorporate in their impositions. Such reform will raise LGU competitiveness and 
strike a healthy balance between revenue generation and private business 
promotion.
In view of the foregoing, approval of this bill is earnestly requested.
SONNY ANGARA


NINETEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
SENATE
s. B. No. nn.‘^
Senate
of till' ^ra etni-p
•22 JUL27 P4:41
RECEIVLDBV
Introduced by Senator SONNY ANGARA
AN ACT
TO REDUCE THE COST OF DOING BUSINESS IN LOCAL GOVERNMENT 
UNITS BY AMENDING CERTAIN PROVISIONS IN BOOK II OF REPUBLIC 
ACT NO. 7160, OTHERWISE KNOWN AS THE "LOCAL GOVERNMENT CODE 
OF 1991"
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
1 
SECTION 1. Section 131 of Republic Act No. 7160, otherwise known as the
2 
Local Government Code of 1991, hereinafter referred to as the "Code", is hereby
3 
amended to read as follows:
4 
"Sec. 131. Definition of Terms. - When used in this Title, the term:
5 
(a)xxx
6 
XXX
7 
(g) ["ChargcG"-rcfci^to pecuniary liability-,-as-rents or fees against
8 
persons or property] "CHARGE" REFERS TO LIABILITY FOR
9 
SERVICES RENDERED OR CONVENIENCES PROVIDED BY THE
10 
LOCAL GOVERNMENT UNIT, THE AMOUNT OF WHICH SHOULD
11 
BE COMMENSURATE TO SUCH SERVICES AND CAPITAL
12 
RECOVERY WHICH ENSURES CONTINUED DELIVERY;
13 
(h)xxx
14 
XXX
15 
(I) "Fee" [means a-charge fixed by law or ordinance for the-regulation
16 
or inspection-ef-a-biisi-ness-er—activity] REFERS TO A LIABILITY


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
IMPOSED FOR THE REGULATION OR INSPECTION OF A 
BUSINESS OR ACTIVITY THE AMOUNT OF WHICH SHOULD BE 
COMMENSURATE TO THE ADMINISTRATIVE COST OF 
REGULATION AND SURVEILLANCE;
(m) XXX
XXX."
SEC. 2. Section 147 of the same Code is hereby amended to read as follows: 
"Sec. 147. MUNICIPAL Fees and Charges. - The municipality may 
impose and collect such reasonable fees and charges FOR SERVICES 
RENDERED OR CONVENIENCES PROVIDED on business and 
occupation and, except as reserved to the province in Section 139 of 
this Code, on the practice of any profession or calling, commensurate 
with the cost of regulation, inspection and licensing before any person 
may engage in such business or occupation, or practice such 
profession or calling AND SUBJECT TO GUIDELINES TO BE 
PROVIDED BY THE BUREAU OF LOCAL GOVERNMENT FINANCE 
OF THE DEPARTMENT OF FINANCE, IN CONSULTATION WITH 
THE LEAGUE OF MUNICIPALITIES OF THE PHILIPPINES, ON 
THE SETTING OF LOCAL FEES TAKING INTO CONSIDERATION 
THE RECOVERY OF ADMINISTRATIVE COSTS."
SEC. 3. Section 149 of the same Code is hereby amended to read as
follows:
"Sec. 149. Fishery [Rentals-,] LICENSE Fees and RENTAL Charges. -
(a) Municipalities shall have the exclusive authority to grant fishery 
privileges in the municipal waters and impose rentals, fees or charges 
therefore in accordance with the provisions of this Section.
(b) The sangguniang bayan may:
(1) Grant fishery privileges to erect fish corrals, oyster, mussel, or 
other aquatic beds or bangus fry areas, within a definite zone of the 
municipal waters, as determined by it AND LEVY RENTAL CHARGES 
FOR SAID PRIVILEGE SUBJECT TO GUIDELINES TO BE 
PROVIDED BY THE BUREAU OF LOCAL GOVERNMENT FINANCE


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
OF THE DEPARTMENT OF FINANCE, THE DEPARTMENT OF THE 
ENVIRONMENT AND NATURAL RESOURCES, AND THE BUREAU 
OF FISHERIES AND AQUATIC RESOURCES OF THE 
DEPARTMENT OF AGRICULTURE, IN CONSULTATION WITH 
THE LEAGUE OF MUNICIPALITIES OF THE PHILIPPINES, ON 
THE SETTING OF LOCAL CHARGES TAKING INTO 
CONSIDERATION THE COSTS OF SERVICES FOR THE 
ENVIRONMENTAL MAINTENANCE AND SUSTAINABILITY OF 
THE MUNICIPAL WATERS COVERED BY THE PRIVILEGE: 
Provided, however, That duly registered organizations and 
cooperatives of marginal fishermen shall have the preferential right to 
such fishery privileges: Provided, further. That the Sangguniang Bayan 
may require a public bidding in conformity with and pursuant to an 
ordinance for the grant of such privileges: Provided, finaiiy. That in the 
absence of such organizations and cooperatives or their failure to 
exercise their preferential right, other parties may participate in the 
public bidding in conformity with the above cited procedure.
(2) Grant the privilege to gather, take or catch bangus fry, prawn fry or 
kawag-kawag or fry of other species and fish from the municipal 
waters by nets, traps or other fishing gears to marginal fishermen free 
of any rental, fee, charge, or any other imposition whatsoever.
(3) Issue licenses for the operation of fishing vessels of three (3) tons 
or less for which purpose the Sangguniang Bayan shall promulgate 
rules and regulations regarding the issuances of such licenses to 
qualified applicants under existing laws AND LEVY FEES SUBJECT 
TO GUIDELINES TO BE PROVIDED BY THE BUREAU OF LOCAL 
GOVERNMENT FINANCE OF THE DEPARTMENT OF FINANCE, 
IN CONSULTATION WITH THE LEAGUE OF MUNICIPALITIES 
OF THE PHILIPPINES, ON THE SETTING OF LOCAL FEES 
TAKING INTO CONSIDERATION THE RECOVERY OF 
ADMINISTRATIVE COSTS: Provided, however. That the 
sangguniang concerned shall, by appropriate ordinance, penalize the


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
use of explosives, noxious or poisonous substances, electricity, muro- 
ami, and other deleterious methods of fishing and prescribe a criminal 
penalty therefor in accordance with the provisions of this Code: 
Provided, finally, That the sanggunian concerned shall have the 
authority to prosecute any violation of the provisions of applicable 
fishery laws.
SEC. 4. Section 152 of the same Code is hereby amended to read as follows: 
"Sec. 152. Scope of Taxing Powers. - The barangays may levy taxes, 
fees and charges, as provided in this Article, which shall exclusively 
accrue to them:
(a) Taxes - On stores or retailers with fixed business establishments 
with gross sales or receipts of the preceding calendar year of Fifty 
thousand pesos (P50,000.00) or less, in the case of cities and Thirty 
thousand pesos (P30,000.00) or less, in the case of municipalities, at a 
rate not exceeding one percent (1%) on such gross sales or receipts.
(b) [Service Fees or] Charges - Barangays may collect reasonable 
[fees—er] charges for [services rendered in connection with the 
regulation or] the use of barangay-owned properties or service 
facilities such as paiay, copra or tobacco dryers SUBJECT TO 
GUIDELINES TO BE PROVIDED BY THE BUREAU OF LOCAL 
GOVERNMENT FINANCE OF THE DEPARTMENT OF FINANCE, 
IN CONSULTATION WITH THE LIGA NG MGA BARANGAYS SA 
PILIPINAS, ON THE SETTING OF LOCAL CHARGES TAKING 
INTO CONSIDERATION THE RECOVERY OF, MAINTENANCE 
AND CAPITAL REPLACEMENT COSTS.
(c) Barangay Clearance - No city or municipality may issue any license 
or permit for any business or activity unless a clearance Is first 
obtained from the barangay where such business or activity is located 
or conducted. For such clearance, the sanggunian barangay may 
impose a reasonable fee SUBJECT TO GUIDELINES TO BE 
PROVIDED BY THE BUREAU OF LOCAL GOVERNMENT FINANCE 
OF THE DEPARTMENT OF FINANCE, IN CONSULTATION WITH


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
THE LIGA NG MGA BARANGAY SA PILIPINAS, ON THE 
SETTING OF LOCAL FEES TAKING INTO CONSIDERATION THE 
RECOVERY OF ADMINISTRATIVE COSTS. The application for 
clearance shall be acted upon within seven (7) working days from the 
filing thereof. In the event that the clearance is not issued within the 
said period, the city or municipality may issue the said license or 
permit.
(d) Other fees [and Charges] - SUBJECT TO GUIDELINES TO BE 
PROVIDED BY THE BUREAU OF LOCAL GOVERNMENT FINANCE 
OF THE DEPARTMENT OF FINANCE, IN CONSULTATION WITH 
THE LIGA NG MGA BARANGAY SA PILIPINAS, ON THE 
SETTING OF LOCAL FEES TAKING INTO CONSIDERATION THE 
RECOVERY OF ADMINISTRATIVE COSTS, [T] The barangay may 
levy reasonable fees [and charges]:
(1) On commercial breeding of fighting cocks, cockfights and 
cockpits;
(2) On places of recreation which charge admission fees; and
(3) On billboards, signboards, neon signs, and outdoor 
advertisements."
SEC. 5. Section 153 of the same Code is hereby amended to read as follows: 
"Sec. 153. [Service] OTHER Fees {or] AND Charges. - Local 
government units may impose and collect such reasonable fees and 
charges for services rendered SUBJECT TO GUIDELINES TO BE 
PROVIDED BY THE BUREAU OF LOCAL GOVERNMENT FINANCE 
OF THE DEPARTMENT OF FINANCE, IN CONSULTATION WITH 
THE APPROPRIATE LEAGUE OF THE LOCAL GOVERNMENT 
UNIT, ON THE SETTING OF LOCAL FEES AND CHARGES 
TAKING INTO CONSIDERATION THE RECOVERY OF 
ADMINISTRATIVE, CAPITAL, MAINTENANCE AND OTHER 
SERVICE DELIVERY COSTS."
SEC. 6. Section 154 of the same Code is hereby amended to read as follows:


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
"Sec. 154. Public Utility Charges. - Local government units may fix the 
rates for the operation of public utilities owned, operated and 
maintained by them within their jurisdiction SUBJECT TO 
GUIDELINES TO BE PROVIDED BY THE BUREAU OF LOCAL 
GOVERNMENT FINANCE OF THE DEPARTMENT OF FINANCE, 
IN CONSULTATION WITH THE APPROPRIATE LEAGUE OF THE 
LOCAL GOVERNMENT UNIT, ON THE SETTING OF LOCAL 
CHARGES TAKING INTO CONSIDERATION THE RECOVERY OF 
CAPITAL, MAINTENANCE AND OTHER SERVICE DELIVERY 
COSTS."
SEC. 7. Section 155 of the same Code is hereby amended to read as follows: 
"Sec. 155 Toll [Fees or'\ Charges. - The sanggunian concerned may 
prescribe the terms and conditions and [fix] SET the rates [for the 
imposition of toll fees or] ON charges IMPOSED 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 SUBJECT TO GUIDELINES TO BE 
PROVIDED BY THE BUREAU OF LOCAL GOVERNMENT FINANCE 
OF THE DEPARTMENT OF FINANCE, IN CONSULTATION WITH 
THE APPROPRIATE LEAGUE OF THE LOCAL GOVERNMENT 
UNIT, ON THE SETTING OF LOCAL CHARGES TAKING INTO 
CONSIDERATION THE RECOVERY OF CAPITAL, MAINTENANCE 
AND OTHER SERVICE DELIVERY COSTS: Provided, That no such 
toll [fees-or] charges shall be collected from 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 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."


1 
SEC. 8. Ordinances Imposing Fees and Charges. - All existing ordinances on
2 
the imposition of fees and charges of local government units shall continue to be in
3 
force and effect after the effectivity of this Act: Provided, That within two (2) years
4 
from the effectivity of this Act, the concerned local government unit shall enact an
5 
ordinance in compliance with the guidelines to be issued pursuant to this Act.
6 
SEC. 9. Repeaiing Ciause. - Except as provided in the preceding section, all
7 
general and special laws, acts, city charters, executive orders, presidential
8 
proclamations, issuances, rules and regulations, or parts thereof which are contrary
9 
to or inconsistent with any of the provisions of this Act are hereby repealed,
10 
amended, or modified accordingly.
11 
SEC. 10. Impiementing Ruies and Reguiations. - Within sixty (30) days from
12 
the approval of this Act, the Bureau of Local Government Finance of the Department
13 
of Finance shall promulgate the rules and regulations implementing the provisions of
14 
this Act.
15 
SEC. 11. Separabiiity Ciause. - If any portion or provision of this Act is
16 
subsequently declared invalid or unconstitutional, other provisions hereof which are
17 
not affected thereby shall remain in full force and effect.
18 
SEC. 12. Effectivity. - This Act shall take effect fifteen (15) days after its
19 
publication in the Officiai Gazette or in a newspaper of general circulation.
Approved,