SENATE OF THE PHILIPPINES 
SIXTEENTH CONGRESS 
First Regu lar Session 
SENATE 
Senate Bill No. _--=.::1'-"9--'O::....:3=---
'13 
NOV -5 r' 5 :29 
Introduced by SENATOR JOSEPH VICTOR G. EJERCITO 
EXPLANATORY NOTE 
This bill seeks to revise the formula used to determine the share of each 
province, city and municipality in the internal revenue allotment. Under 
Section 285 of Republic Act No. 7160, otherwise known as the Local 
Government Code of 1991, allocations of local government units are based on 
population, land area and equal sharing. The size of a municipality and the 
coastal water that the LGU has to manage are not factored in the computation. 
This arrangement does not favor smaller municipalities, particularly 
those with a sizable coastal area to maintain and protect. As it is, small towns 
do not have the financial muscle like large cities in providing basic services and 
developing local infrastructure. 
For this reason, it is necessary to include the size of an LGU's municipal 
waters to ensure it has adequate funds to manage its area of responsibility. It). 
view of the foregoing, approval of this bill is earnestly sought. 
, 
JOSEPH VICTOR G. EJERCITO 


SENATE OF THE PHILIPPINES 
SIXTEENTH CONGRESS 
First Regular Session 
) 
) 
SENATE 
Senate Bill No. __ 
.1_9_0_3_ 
'13 
NOV -5 P 5 :29 
Introduced by SENATOR JOSEPH VICTOR G. EJERCITO 
AN ACT AMENDING REPUBLIC ACT NO. 7160 FOR THE PURPOSE OF 
INCLUDING MUNICIPAL WATERS IN THE COMPUTATION OF A LOCAL 
GOVERNMENT UNIT'S INTERNAL REVENUE ALLOTMENT 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Section 285 of Republic Act No. 7160, otherwise known as 
the "Local Government Code of 1991," is hereby amended to read as follows: 
"SECTION 285. Allocation to Local Government Units. - The share of 
local government units in the internal revenue allotment shall be allocated in 
the following manner: 
a. Provinces - Twenty-three percent (23%); 
b. Cities - Twenty-three percent (23%); 
c. Municipalities - Thirty-four percent (34%); and 
d. Barangays - Twenty percent (20%) 
Provided, however, that the share of each province, city, and municipality shall 
be determined on the basis of the following: 
a. Population - Fifty pe;rcent (50%); 
b. Lcmd Area and Municipal Water area - (25%); and 
c. Equal Sharing - Twenty-five percent - (25%) 


SECTION 2. Definition - "Municipal Waters" refers to a body of water that 
includes streams, lakes, and tidal waters within the municipality, not being the. 
subject of private ownership and not comprised within the national parks, 
public forest, timber lands, forest reserves or fishery reserves. 
It also pertains to manne waters included between two lines drawn 
perpendicularly to the general coastline from points where the boundary lines 
of the municipality or city touch the sea at low tide and a third line parallel 
with the general coastline and fifteen (15) kilometers from it. Where two (2) 
municipalities are so situated on the opposite shores that there is less than 
fifteen (15) kilometers of marine waters between them, the third line shall be 
equally distant from opposite shores of the perspective municipalities; 
SECTION 3. Repealing Clause - All laws, decrees, executive orders, 
issuances, rules and regulations, or parts therof, not consistent with the 
provisions of this Act are hereby repealed or modified accordingly, 
SECTION 4. Effectivity - This Act shall take effect fifteen (15) days after 
its publication in the Official Gazette and two (2) newspapers with a nationwide 
circulation. 
Approved,