Republic of the Philippines
HOUSE OF REPRESENTATIVES
—_—- Quezon City —

FIFTEENTH CONGRESS
First Regular Session

_, 448
COMMITTEE REPORT NO,

Submitted by the Committee on Local Government on__ 07 MAR 2011
Re: — House Bill No. 4

Recommending its approval in substitution of House Bill No. 2002

Sponsors: Representatives George P. Arnaiz and Pablo John F. Garcia

Mr. Speaker:

The Committee on Local Government to which was referred House Bill No. 2002
introduced by Representative Pablo John F. Garcia entitled:

“AN ACT
RATIONALIZING THE INCOMF. REQUIREMENTS FOR THE CREATION OF
A PROVINCE AND THE DECLARATION OF HIGHLY URBANIZED STATUS,
IN THE CASE OF COMPONENT CITIES, AMENDING FOR THAT PURPOSE
REPUBLIC ACT NUMBERED 7160, OTHERWISE KNOWN AS THE LOCAL
GOVERNMENT CODE OF 1991”
4334

has considered the same and recommends that the attached House Bill No.
entitled:

“AN ACT
RATIONALIZING = THE INCOME REQUIREMENTS FOR TILE
DECLARATION OF HIGHLY URBANIZED STATUS IN THE CASE OF
COMPONENT CITIES AND FOR THE CREATION OF A PROVINCE,
AMENDING FOR THE PURPOSE SECTIONS 452 AND 461 OF REPUBLIC ACT
No. 7160 OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OF
1991”

be approved in substitution of House Bill Nos. 2002 with Representative Pablo John F.

Garcia as author thereoi.


Respectfully submitte
fs

L
GEQRGE P. ARNAIZ
Chairman
Committee on Local Government

THE HONORABLE SPEAKER
HOUSE OF REPRESENTATIVES



Republic of the Philippines
—_— HOUSE OF REPRESENTATIVES =~
Quezon City

FIFTEENTH CONGRE:
First Regular Session

HOUSE BILI.No.___ 4334

Introduced by: REPRESENTATIVE PABLO JOHN F. GARCIA

AN ACT
RATIONALIZING IHF INCOME REQUIREMENTS FOR THE
DECLARATION OF HIGHLY URBANIZED STATUS IN THE CASE OF
COMPONENT CITIES AND FOR THE CREATION OF A PROVINCE,
AMENDING FOR THE PURPOSE SECTIONS 452 AND 461 OF REPUBLIC ACT
No. 7160 OTHERWISE KNOWN AS THE LOCAL GOVENRMENT CODE. OF
1991

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

SECTION 1. Section 452 of Republic Act No. 7160, as amended otherwise

Known as the Local Government Code of 1991 is hereby amended to read as follows:

“SEC, 452. Highly Urbanized Cities, (a) Cities with a minimum
population of two hundred thousand (200.0000) inhabitants, as certified by
the National Statistics Office, and [with the latest] AN AVERAGE
LOCALLY-GENERATED annual income FOR THF LAST TWO (2)
CONSECUTIVE YEARS, as certified by the DEPARTMENT OF
FINANCE {eity weasurer}, of fat least] NOY LESS THAN TWO
HUNDRED Fifty Million Pesos (P250,000,000.00) |(P50,000,000.00)|

based on [1991] 2000 constant prices. fus certified by the city weasurer,]

shall be classified as highly urbanized cities.”


rr XXX x

2 (D) THE AVFRAGE ANNUAL INCOME SHALL INCLUDE
3 THF INCOME ACCRUING TO THE GENERAL FUND, EXCLUSIVE
4 OF THE INTERNAT. REVENUE ALLOTMENT (IRA) SHARES.
s SPECIAL FUNDS, TRUST FUNDS, TRANSFERS, AND NON-
6 RECURRING INCOME.”

7 SEC. 2. Section 461 of the same Code is hereby amended to read as follows:
8 “SEC. 461. Reguisites for Creation. — (a) A province may be
9 created if it has an average TOCALLY-GFNERAILD annual income
10 FOR THE LAS{ TWO (2) CONSECUTIVE YFARS, as certified by the
u Department of Finance. of not than less [Twenty] TWO HUNDRED
res million pesos (P200,000.000.00) [(P20.000.600,003} based on [1994] 2000

constant prices and either of the following requisites:

uu (i) a contiguous territory of at least to thousand 2.000) square
15 kilometres. as certified by the Lands Management Bureau; or

16 (ii) a population of not less than two hundred fifty thousand (250.000)
1" inhabitants as certified by the National Statistics Office:

Is Provided, That, the creation thereof shall not reduce the fund area.
» population. and income of the original unit or units at the time of said
20 creation to less than the minimum requirements prescribed herein.

2 (b) The territory need not be contiguous if it comprises two (2) or
2 more islands or is separated by a chartered city or cities, which do not

3 contribute to the income of the province.


{e) The average annual income shall include the income accruing
to the general fund, exclusive of THE INTERNAL REVENUE
ALLOTMENT (IRA) SHARES. special funds. trust funds. transfers. and

non-recurring incor

SEC. 3. All jaws, decrees, executive orders. rules and regulations inconsistent

herewith are hercby amended, repealed or modified accordingly.

SC. 4. his Act shall take effect fifteen (15) days after ils complete publication

in at least two (2) newspapers of general circulation.

Approved,


FACT SHEET

House Bill No. 2002
{As Approved by the Committee on September 29,2010)

RATIONALIZING THE INCOME REQUIREMENT FOR THE CREATION OF A
PROVINCE AND THE DECLARATION OF HIGHLY-URBANIZED STATUS IN THE
CASE OF COMPONENT CITIES

introduced by: Rep. Pablo John F. Garcia

Committee Referral: Committee on Local Government (Primary)
Committee Chairperson. REP. George P. Arnaiz

OBJECTIVES:

© To rectify inconsistencies in RA. 7160 otherwise known as the Local
Government Code of 1991 with respect to the income requirement for the
creation or conversion of iocal government units,

To effectively complement R.A. No. 9009 otherwise known as “An Act
Amending Section 450 of R.A. 7160", which significantly increased the
income requirement for the conversion of a municipality or cluster of
barangays into a city from an average annual income of twenty million
pesos (PhP20,000,000.00) to a locally generated annual income for two
consecutive years of hundred million pesos: (PhP 100,000,000.00)

KEY PROVISION:

«Amends Section 452 and 461 of RA. 7160, for the purpose of
rationalizing the income requirements for the creation of a province and
the declalaration of highly urbanized status in the case of component
cities.

RELATED LAWS;

* Sections 452 and 461 of the Local Government Code of 1991 or RA.
7160;

* RA. 9009 amending Section 450 of R.A. 7160, increasing the average
annual income requirement for a municipaiity or cluster of barangays to be
converted into a component city.


Republic vf the Philippines
HOUSE OF REPRESENTATIVES

Quezon Oy. Mere Manila

Reguutr Session

House BillNe 200R

Tntroduced by Hun. PABLO JOAN FV, GARCIA

“AN ACT RATIONALIZING THF INCOME REQUIREMENT FOR THE
CREATION OF A PROVINCE AND SHE DECLARATION OF HIGHT. ¥-
URBANIZED STATUS IN THE CASE. OF COMPONENT. CITIES, AMENDIN
FOR THAT PURPOSE REPUBLIC ACT NUMBERED 7160, OTHERWISE. .
KNOWN AS THE “LOCAL GOVERNMENT CODE OF 19917

EXPLANATORY NOTE.

Whilz Republic Act No. 9609 has -n:de inore stringent the income requirement
for the conversion of a municipality er aster of sarengays into a component ci-y, the
income requirements for the creation ot a provizce and ihe declaration of highly
urbanized status in the case of componcnt cities, have remained the same.

herefore have a situation where a city Sy nol be created if the -neome of a

ur a cluster of harangeys tals below PICO million, while for a mere P20
mn, a new province may be created. L:kewise, we have a situation where, despite the
P2106 miltion threshold in the creation of « cite, a highly urbarized city may be declared
on the basis of a P50 million inccme.

Thers is therevore a need to further emend Republic Act No. 7160, o-henwise
known us the Local Gevernment Code of :991, in order 0 rationalize the income |
requirements for the conversica or declaration of the different species of boca)
government units,

The early passave of this bill, therefore, 's urgenyif sought.



Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezen

First Regular Session

2002

House BULNe

Introduced by Hou. PABLO JOHN F. GARCI

“AN ACT RATIONALIZING THE INCOME REQUIREMENT FOR THE
CREATION OF A PROVINCE AND THE DECLARATION OF HIGHLY-
URBANIZED STATUS IN THE CASE Of COMPONENT CITIES, AMENDING
FOR THAT PURPOSE REPUBLIC ACT NUMBERED 7160, OTHERWISE
KNOWN AS THE “LOCAL GOVERNMENT CODE OF 1991”

Be it enacted in he Senare and the Huse of Representatives of the Phitippines in
Congress assembled:

SECTION 1. Section 461 of Reptblic Act No. 7160 is hereby amerded to read as
follows:

“SEC. 461. Reguisites for Creation. — (a) A p-ovince may be created if it has un avverai
LOCALLY-GENERATED annul incom® for “he last wo consecutive years, as cert
by the Department of Finance, of ne tan TWC HUNDRED MILLION PESOS
(P209.000,010.00) based on 2006 constant prices und either of the following, requisites:

@ 2 contiguous territory of at feast iwc thousand (2,000) square kilometers, as
certified by the Lands Managemen: Burzau; or

Gi) 4 population of not fess than avo hundred fifiy thousand (250,100) inhabitaats as
certified by the National S atistics Oics:

Provided that, the creation thereof saall not reduce the land area, populat'on, and
income of the original unit or uni:s at the time of said creation :o less than the minimum
requirements prescribed herein. :

(0) The territory need not te contiguous if it comprises two (2) or more islands or
is separated by a chartered city or cities, wbicn do not contribute to the income of the
province,

{c) The average anaual income shel) include the income accruing to the zeneral
fund, exclusive of the intemal revenue allotmem (IRA), special funds, trast funds,
iransfers, and non-recuning income.

SECTION 2, Section 452 of the same Ac! is hereby amended to read as follows:

SEC. 452. Highly Urbanized Cives. — (a) Cines with a minimum population 27 nso
hundred thousand (200,006) inhabitants, a3 certisied by the Natioaal Statistics office, aad
an_averag? locally-generated annual income sor the last two_consecutive years, as
certified by the Department of Finance. of not less than TWO HUNDREI FIFTY
MILLION PESOS (2250,060.00), 2 OC constant prices, shall be classified as
bivhty arbanized cities,

Metro Manila _ ——


jes tha: du not meot the akeve requirements shall be considered component

cities ol
Jucated withia the boundaries oF wo
component of the provinee of «wh

or rote provinces, such city shall be considered
ased to be municipality,

{c) Qualified voters of nghly urbaniz:¢ cities shall remain exeluded from voting
for elective provincial officials. Uniess otherwise provided in the Consitution or this
Code, qual fied voters of independent component cities shall be governed by their
respective charters, as amendec, on the participation of voters in provincial elections,
Qualified voters of cities whe acquired -ke rzht to vote for elective provincia: officials
Prior to the classificetion of said citics as higbly-urhanized after the ratification of the
Constitutior: and before the effeciivity of this Code, shail continue i exercise such right.

(4) The average annual jacome shall_aclude the income aceruing to the gencrul
func, _exchasive of the jnternal revenus, alletment GRA), special funds. trast finds,

non-recurring income,

SECTION 3. Any law, executive order, cule or regulation inconsistent herewith
are Lereby repealed or modified accondingly :

SECTION 4. If any portion of this Act is deciared invalid or unconst:tutional,
such invalidity or unconstitutionaiity sball nor affect the other provisions, whick. shail
remain in full Torce and effect.

SECTION 5. ‘This Act shall take ¢ Veet fitteen (15) days after the completion of its
publicacion in at least twe (2) newspapers of general circulation

Approved,

Province in which they an: yec zraphically located, If a component-eity-is——


Republic of the Paiipoines
HOUSE OF REPRESENTATIVES.
Quezon City Mero Manis

-—. First Regular Session _

Minutes 9f ne “neenng ef tne Committee on Losal Government neia 311 S¢
‘Ramon V. Mitra Big. House of Reprasersatives, Q.28z0n City

Guests:

Ms, Mary cane Onaga, representative, League of Cities of the Philippines
Mr cesse Alcaraz, Polisy Officer, League of Provinces of the Pnilippines
Ms, Minenve Esquives representative, National Statistios Ofice (NSO)
Ms. Carminaa Afavalo, representative, Nationa: Historicai Institute

GALL TO ORDER / ROLL CALL

The Charperson . Rep. George P. Amaiz, called the maeting 16 order at 1:50 p.m, On motion af Rep Pabio Jonn
# the Roll

“py F, Garcia, auiy seconded, the Body dispensed with :ne cating oF
APPROVAL OF THE MINUTES OF THE MEETING OF THE SEPTEMBER 22, 2010 MEETING

‘On mation 3! Rap. Pablo Johr. "Put F, Garcia, duly sec0728q, the Body dispensed with the reading of the minuzes
eetng nei on September 22. 2010 and avpraved tne same.

u.

Ii, DELIBERATION ON HOUSE BILL NO. 121 — - AN ACT REVISING THE CHARTER OF THE CITY OF
BAGUIO", INTRODUCED BY REP. BERNARDO M, VERGARA

modify the charter of the City af Saar
ised, He said that the Cy C:

gare stated that nis bill seeks tc sev":
122 on September 1, 1905 ana nes
amanges for the ‘allowing pumoses:

: y's boundary dispute with tne edjoi unicipality of Tuba, Province of Benguet.
2 Teet imglement the land use development pier. of the city govemment
3. Ta rationaize -ne disposition of alienable ant d.sposaole oubiis lands which are part cf tas

reservation.

al, ne poundary sonflic: between te City of Baguio ans t

hat tne city conduct a massive suodivision survey of
townsite reservation in accordance wrin its iand use
award committee which shall award the aisposable
with the rules prescribe in the bill. He swessec that tne
on 7E of Republic Act 371, othe-wise knwo as the
Lastiy. ne further pointed out that tne revision of the
Ina fiscal autonomy for the e:ty goverment of

He sad expected te settle once anc f
Municipality 0 ther said that the bill prooeses
nts al disposable lang wnich are par: cf
aevelonment pen He stated that the bili will establish an
residentia: |9'S 12 actual of qualified applicants in aocordar.
ball cia 5

jas tna: ancestral lands recognized pursuam te 3
Peopes Regnts act are considersd private pracenu
wil surety enhance Jenuine and meaningful zottisa. soce

og charter
Baguio

f Tuna, Province of Benguet, done witr respect to
‘ang the Municipality of Tube whicn is suposed ta
Municipality of Tuba and the City of Saguio

Rep Simeon A. Datumanong asked what has the Muaiaigsiity
its part of the karaain in tne agreement between the City of Ea
be incorporated in the Bill. Rep Vergara replied that the officiais of the
have agreed i principle abou the dispute in the boundaries.

1a tnat in the deliberation of the bill last Congress, the officials of the Municipality of Tusa ans the

He however inquired from the auther wrether # sull
the offisiass are sill there and te Congressman wno
ty. He tod the Chair tnat thare is no probierr epeut tre
ane the City of Baguio.

‘The Chair :2c2i
City of Bagi 23 agreed on the delineabon af their bourdane:
exist Rap. Vergara replied that the agreement still exiswesine
authored ne Congress is presently the Mayor of the
s between the Munisipality of Tu:

ior ot Rep. Datumanong, duly s: s approved Hause Bil! No 121

1



¢, DELIBERATION ON HOUSE BILL No. 2061- * AN ACT REAPPORTIONING THE LONE LEGISLATIVE
DISTRICT AND THE SANGGUNIANG PANLUNGSOD OF THE CITY OF ILOILO”, INTRODUCED BY REP.
SERRY P.TRENAS ~ ~
ep. Met Senen S, Sarmiento-sponsored-ihe-eiin aeralt.of tne author. Met Jerry P. Trenas_who_was in tlolla
Cry atending t= ms sick son. He stated thar the Sill wes siready approved by the Hause of Representatives in ine
previous Congress anc was transmitted to the Senats However he said the Senate did not acron the b#?:, He then

moved to” the approver of the ball

Rap. Daumanang seconded the motion on the presumetion that the bill has complied with the recuirements of ine
tow. Rep. Sarmiento replied that the bill has compliec will al tne parameters set forth by the Constiz.tion.

‘Theveaher, tne Body approved House Bill No 121

V. DELIBERATION ON HOUSE BILL NO. 626 ~* AN ACT PROVIDING FOR THE REAPPORTIONMENT OF THE
PROVINCE OF MAGUINDANAO INTO THREE (3) LEGISLATIVE DISTRICTS”, INTRODUCED BY REP
SIMEON A DATUMANONG .

Rep Datumanong said that the Province af Maguindanao nas two {2) Congressional Dstncts with a total
population 9° OVE: ‘one mifion, He further said that the Second Oistnct, which he represents, has a populatiot of over
ed Third Disvict in the Prowinoe of Maguindanao will pancipatly came from

500,000. fe funner said that the propos
the arae of ine Seconc istrict which would compose or consthar municipalities contiguous to each other. He stated

that the proposed congressional district will have @ popusation ‘of 236.420 leaving the Second District with @ population
of 454,293.

6.425 white the

2f Maguindango hes @ population of 7
399 and 258, 420 respectively.

The Cnai’ informeo the Body that the First Dis
propases Secon and Third Districts have a sopulation of 454

Thereatar. on mewn of Rep. Sammiente, duly seca7ad. ine body approved House Bill No. 325

Vi. DELIBERATION ON HOUSE BILL NO. 2002—* AN ACT RATIONALIZING THE INCOME REQUIREMENT FOR
THE CREATION OF A PROVINCE AND THE DECLARATION OF HIGHLY-URBANIZED STATUS IN THE
CASE OF COMPONENT CITIES, AMENDING FOR THAT PURPOSE REPUBLIC ACT 7160, OTHERWISE
KNOWN AS THE LOCAL GOVERNMENT CODE OF ", INTRODUCED BY REP, PABLO JOHN F. GARCIA

exe 12 rationale a rather “anomalous situation” in the Lozal
ios mie sreatign of sertsin loca! gavernmem: unis, He further
; Fecuiremants for the creation of 2 city, the

Res. Panic Jonn #. Garcie stated that nis bu:

Cooe as regares to the income requirer
@ Republic Act 9909 has increased mi

stated
sehramens for Me crsation of 2 province still remains tne same @s wren the Local Government Code 199k effect in
sete cag ines unser Repubie Act 9008, city may te created only if has. & locally-genezated income of 100

¢ is

nie a province may be created if i has an income of only 20 million pasos. He stressed in
ee erate city aeing required 10 shaw ar. income of 106 milion while @ province can bs creates on

polier peso income.

milign 2352
an ‘ancmaicu:
she pa

the case of the declaration of highly urbanizec
cibes insota: Income requirement is concemad vecause nds al 50 million pesos, while for the creacicn of a
cee Or manor pesos. He explained that technscal’y #2 cxy #8 created, Y coh already apply for 2 highty vmarzed
city assureng al! remenis are met. He stated that house Bill No. 2002 aroposes that the income requi reament
for tne cre2zar. of a province should be set at ar aveeae “ocaliy generated-incame of 200 million pasos wile for
righly -rbanzed sities should be set at 20 million pesos

Reo. Garcia said that there is aiso an “anomalous

le informed the Body that his bill fs a re-fled bil wnich was passed on Third Reading by the Hous of
Representatives anc transmittes to the Senate but tne ¢ Committe on Local Government failed to act on the

bill

lesse § Awaraz, Policy Officer, League of Provinces of the Philippines. stated that the feague of Provinces
has not formady come up with an official position on tne matter. He further stated that the League nes aweys:
ae a te necking to provide more eppropriaie auailtcations for the creation of ProVvinsSs. He sais
; of poiey, the League has supported vavigus Bil! filad last Congress and in the same manner
ing their Support for the bill

supported 2s!
tha: as a ai
formaiy mani

Ortaga, represeritative, League o* Cnies 9° the Philippines, stated that they Suzoon 1
However 12¥ shat a lower amount for the requce ment would be more acceptable to the otrer staken
She proposes tnat the income requirement for the, creation of a province be sct at 150 million peses and for the
cre an'ol a highly urbanized city be set at 150 oF 200 millon pesos whichever the author would accept

he. 2

Ms, Mary Je



Rep Garcia exptalned the logic behind the propesa: for tne requirement of highly urbanized cities to have an
Incore of 250 milion pesos, He said that before, a city may 22 created when it has an income of 20 million pesos
while for a highty urbanizes sity it must have an income of 5G milion pesos so that it is actually 2.5 times the
requirement He explained that the income requirement now for @ city 1 100 million pesos and multiply 7: with tne 2.
factor it comes up 10 259 million pesos :

Provinces would not want any new province in the same
58 it will greatly diminish their Intema! Revenue

Tne Chair states thal as a matter of policy, the Leacue
manner that tne League of Cities does not want any new city De:
Allatments. He suggestea that 200 milion pesos 1s r2sona:

Rep. Sanmento proposed an amendment thal the income requirement fer the creation of a highly urbanized sity
be reduced from 250 mifion pesos to 150 milion pesos.

Rep. Garcia replied that for uniformity sake, since the highly urbanized city acts like a province itself, he proposed
that 209 million pesos be required for the creation af highly urbanized cities. :

Thereafter, or motion of Rep, Datumanong, duly secongec, the body approved House Bill No. 625.

Vii. OTHER MATTERS

RECONSIDERATION ON THE APPROVAL OF HOUSE BILL No. 140 - “AN ACT EMPOWERING THE
PUNONG BARANGAY TO ADMINISTER OATH OF OFFICE TO ANY GOVERNMENT OFFICIAL, INCLUDING.
THE PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES, AMENDING FOR THE PURPOSE SECTION
420 OF REPUBLIC ACT NO. 7460 AS AMENDED, OTHERWISE KNOWN AS THE LOCAL GOVERNMENT
CODE OF 1991”, INTRODUCED BY REP. SALVIO 8. FORTUNO

1

‘The Chair expizined that in the last committee m: tne Body approved the proposad bill whien authorizes the
Pusong Bazangay to administer the oath of office to any goverment official ncliding the Presigent of the Repupiic of
the Phitipines. amending for the purpose the Locai Govern: Code, He stressed that the power to saminister the
cath of office Js ioagec with the different public offtciais tiraugh the Aoministrative Code of 1987. He said {nat the
proper law t2 De amends should be the Administrative Cae 3° “987 through an amendment by addition. He direcred
the Secretaris: tc furn.sn tre Members with a copy o! the pvoposea commitiae report

Tre Char rep.20 in the affirmative on the query of Rep. Datumanong whether the bill nas already Deen sparoved
last committee meeting. Me poinied out that insteac of the Loca! Government Code it should be ime Administrative

Coze of 1987 cna: shaule be amended

moved for the reconsideration of te approva’ of House Bill Nc. 149 The Chair
econsigevation of the approve. 2:  B.il No 145. Thereaiter, Rep Garsiz mov:
ndment of House Bill No 14¢ sravicing for the amendment of the Administ
Savemment Code. The Body aperaved pause Bii! Nc. 740 as amended

Catumansr
aggrcves t

VII. ADJOURNMENT

discuss, the meeting adjoumec

6K Lobe a
ENNIS/A. GUEVARA
SsLsot

correct!

MYR P. TEOXON.

fominitee Secretary

Nota¢ oy

HON, GEORGE P. ARNAIZ
Chairman