NINETEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
SENATE
S. B. No. 774
r-1 /-J,. Ml r>'' 
* •
72 JUL19 P6:42
RliCEiVllD L v;
Introduced by Senator SONNY ANGARA
AN ACT
TO ENHANCE THE USE OF NATIONAL WEALTH FOR LOCAL DEVELOPMENT 
BY AMENDING CERTAIN PROVISIONS IN BOOK II OF REPUBLIC ACT NO. 
7160, OTHERWISE KNOWN AS THE "LOCAL GOVERNMENT CODE OF 1991"
EXPLANATORY NOTE
Republic Act No. 7160, otherwise known as the Local Government Code of 
1991, mandates that Local Government Units (LGUs) is entitled to forty percent (40%) 
of the "gross collections, derived by the national government from the preceding fiscal 
year from mining taxes, royalties, forestry and fishery charges, and sudi other taxes, 
fees, or charges including related surcharges or fines" and from "any co-production, 
joint venture or production sharing agreement in the utilization and development of 
the national wealth within their territorial jurisdiction".1 The Code further states that 
the proceeds from these collections shall be used to finance local development and 
livelihood project. However, where the proceeds are from energy sources including 
hydrothermal and geothermal the collections shall be applied solely to lowering the 
cost of electricity in the community.2
During the review of the Local Government Code, under this representation's 
chairmanship of the Committee on Local Government in the 17th Congress, it was 
found that the foregoing restriction on the collections from energy sources has not 
only limited the efficient use of the resource but may have led to preference for non­
priority projects aimed at lowering the cost of electricity if only to utilize the funds.
1 Secs. 289 and 290, Chapter II, Title III, Book II, Local Government Code
2 Sec. 294, Chapter II, Title III, Book II, Local Government Code


It is therefore recommended that this restriction on the use of proceeds from 
the development and utilization of energy sources be removed to allow the LGUs to 
apply the funds to more critcal proiacts, program achvities 'dentified and prioritized 
in their medium-term investment program and annual investment program.
In view of the foregoing, approval of this measure is earnestly sought.
SONNY ANGARA


NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
SENATE
S. B. No. 774
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•22 JUL 19 P6 42
V
RUCESVnO CY:
Introduced by Senator SONNY ANGARA
AN ACT
TO ENHANCE THE USE OF NATIONAL WEALTH FOR LOCAL DEVELOPMENT 
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 294 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. 294. Development and Livelihood Projects. -The proceeds from the
5 
share of local government units pursuant to this chapter shall be
6 
appropriated by their respective sanggunian to finance local government
7 
and live ihocd projects IN THE APPROVED LOCAL DEVELOPMENT
8 
INVESTMENT PROGRAM AND ANNUAL INVESTMENT PROGRAM.'
9 
Provided, however. That [at least- eighty percent (8O%)-of--the-pF0€eed5
10 
derived-frem the development and utilization-ef bydrothermal.-geothefmaly
11 
and-othc F-5ecFFeG5--ef’ energy shall be applied solely ^o ■ lower the- cest-ef
12 
electricity in the local-government unit where such -a source of energy-is
13 
located] THE PROCEEDS, OR A PORTION THEREOF DERIVED FROM
14 
THE DEVELOPMENT AND UTILIZATION OF HYDROTHERMAL,
15 
GEOTHERMAL, AND OTHER SOURCES OF ENERGY MAY BE
16 
APPLIED, AT THE OPTION OF THE LOCAL GOVERNMENT UNIT, TO


1 
LOWER THE COST OF ELECTRICITY IN THE LOCAL GOVERNMENT
2 
UNIT WHERE SUCH SOURCE OF ENERGY IS LOCATED."
3 
Sec. 2. Use of Unutilized Shares. - The concerned local government units are
4 
hereby authorized to use the proceeds previously derived from the development and
5 
utilization of hydrothermal, geothermal, and other sources of energy which remain
6 
unutilized, in accordance with their approved local development investment program
7 
and annual investment program.
8 
Sec. 3. Repealing Cause. - '\ll general and special Ijws, acts, city charters,
9 
executive orders, presidential proclamations, issuances, rules and regulations, or parts
10 
thereof which are contrary to or inconsistent with any of the provisions of this Act are
11 
hereby repealed, amended, or modified accordingly.
12 
Sec. 4. Separability Cause. - If any portion or provision of this Act is
13 
subsequently declared invalid or unconstitutional, other provisions hereof which are
14 
not affected thereby shall remain in full force and effect.
15 
Sec. 5. Effectivity Cause. - This Act shall take effect fifteen (15) days after its
16 
publication in the Official Gazette or in a newspaper of general circulation.
Approved,