Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 1477

EXPLANATORY NOTE

This bill seeks to amend Sections 326 and 327 of Republic Act No. 7160,
otherwise known as the Local Government Code of 1991, by transferring the power to
review appropriation ordinances of component cities and municipalities from the
Sangguniang Panlalawigan to the Department of Budget and Management.

Under Section 327 of the Local Government Code, ordinances authorizing annual
or supplemental appropriations of component cities and municipalities are subject to
review by the Sangguniang Panlalawigan. However, it bears noting that the said
provision does not mandate the immediate action of the Sangguniang Panlalawigan, but
Gives it a “loose period” of ninety (90) days, and “if within ninety (90) days from receipt of
copies of such ordinance, the Sangguniang Panlalawigan takes no action thereon, the
same shall be deemed to have been reviewed in accordance with law and shall continue
to be in full force and effect.” This “loose period” inevitably invites partisanship, which
may result to a faster or a delay in the review, depending on the nature of the political
leanings of the examining Sanggunian Panlalawigan official. This is what this bill seeks to
curb, by transferring the review powers of the Sanggunian to the Department of Budget
and Management.

Records of the Department of the Interior and Local Government (DILG) disclose
that there have already been numerous requests for legal opinion and even appeals
made by component cities and municipalities questioning the actions made on
appropriation ordinances by the Sangguniang Panlalawigan. In one case, the
Department even invalidated the Sanggunian’s action, holding that:

“The only ground upon which a provincial board may declare
any municipal resolution, or order invalid is when such resolution,
ordinance or order is beyond the powers conferred upon the


council or president making the same. Absolutely no other ground
is recognized by the law. A strictly legal question is before the
provincial board in its consideration of a municipal resolution,
ordinance or order. The provincial (board's) disapproval of any
resolution, ordinance or order must be premised specifically upon
the fact that such resolution, ordinance or order is outside the
scope of the power conferred by law. If a provincial board passes
these limits, it usurps the legislative functions of the municipal
council or president. Such has been the consistent course of
executive authority.” (DILG Opinion No. 94, Series of 2003, August
7, 2003)

In another case, the Department ruled that the Sangguniang Panlalawigan is not
vested with authority to look into and decide the question of whether or not the required
number of votes necessary to approve the annual budget of a city was attained by the
Sangguniang Panlungsod considering that Section 324 and 325 of Republic Act 7160 on
the scope and limitation of the review power of the Sangguniang Panlalawigan did not
include the same. (DILG Opinion, November 9, 2004, on the Request of Mayor Carlo V.
Gamban of Silay City).

Appropriation ordinances are vital if local government units are to achieve their
planned programs and objectives. These ordinances, being essentially in the nature of
legislative authorization to utilize government funds for public purposes, should be given
priority action without unnecessary delay, otherwise government projects would be
rendered worthless and vital government functions brought to a halt, to the detriment of
our people.

In view of its vital importance, the approval of this bill is earnestly sought.
\

— MELO Zh
FLORENCIO c: GaRAY ~


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

HOUSE BILL No. 1477

Introduced by Honorable Florencio C. Garay

AN ACT
AMENDING SECTIONS 326 AND 327 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 Phillppines in Congress
assembled:

SECTION 1. Section 326 of Republic Act No. 7160, otherwise known as the Local
Government Code, is hereby amended to read as follows:

"SEC. 326. Review of Appropriation Ordinances of Provinces,
Highly Urbanized Cities, AND COMPONENT CITIES AND
MUNICIPALITIES. - The Department of Budget and Management shall
review ordinances authorizing the annual or supplemental appropriations
of provinces, highly urbanized cities, AND OF COMPONENT CITIES AND
MUNICIPALITIES, in accordance with the immediately succeeding
Section.”

SECTION 2. Section 327 of Republic Act No. 7160 is likewise amended to read as
follows:

“SEC. 327. If within ninety (90) days from receipt of copies of such
ordinance, the DEPARTMENT OF BUDGET AND MANAGEMENT takes
no action thereon, the same shall be deemed to have been reviewed in
accordance with law and shall continue to be in full force and effect. If
within the same period, the DEPARTMENT OF BUDGET AND
MANAGEMENT shall have ascertained that the ordinance authorizing


annual or supplemental appropriations had not complied with the
requirements set forth in this Title, the DEPARTMENT shall, within the
ninety-day period hereinabove prescribed, declare such ordinance
inoperative in its entirety or in part. Iiems of appropriation contrary to
limitations prescribed in this title or in excess of the amounts prescribed
therein shall be disallowed or reduced accordingly.

The DEPARTMENT OF BUDGET AND MANAGEMENT shall,
within the same period, advise the Sangguniang Panlungsod or
Sangguniang Bayan concerned, through the local chief executive, of any
action on the ordinance under review. Upon receipt of such advice, the
city or municipal treasurer concerned shall not make further
disbursements of funds from any of the items of appropriation declared
inoperative, disallowed or reduced.”

SEC. 3. The provisions of existing laws, decrees, issuances, rules and
regulations, or portions thereof, which are inconsistent herewith are hereby repealed,
modified or amended accordingly.

SEC.4. This Act shalll take effect fifteen (15) days after its publication in at
least two (2) newspapers of general circulation.

Approved,