Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

NINETEENTH CONGRESS
First Regular Session

427

i
HOUSE BILL NO.

Introduced by Representative CARLITO S. MARQUEZ

EXPLANATORY NOTE

This bill seeks to strengthen and provide support to local government units (LGUs)
which have difficulty in coping with the developed and urbanized counterparts.

Devolution by virtue of Republic Act 7160, otherwise known as the Local
Government Code of 1991, champions local governments to provide for the basic social
services to its constituents. The funding for these functions comes from national taxes
through the national tax allocation (NTA), formerly known as the Internal Revenue
Allotment. However, the policy design is seen to have fiscal vertical and horizontal
imbalances among the LGUs. The distribution formula favors the LGUs with bigger tax
bases.

Cities, that are classified based on their income, land area, and population such as
Highly Urbanized Cities, Independent Component Cities, and Component Cities, have an
economic advantage over municipalities. Although they receive a 23-percent share, each
city receives more tax shares than each of the 1,488 municipalities which are sharing in
the 34-percent formula. In effect, municipalities are forced to find alternatives to increase
its funding for the devolved functions.

While municipalities aspire to become assured with economic viability, the LGUs
strive to meet the minimum requirements for cityhood. This includes capital towns in
provinces that bear the burden in providing for the needs of its constituents even those
who come from adjacent municipalities. Based on the 2021 Philippine Statistics Authority
Provincial Summary, there are 28 out of 81 provinces with no component cities,
independent component cities, or highly urbanized cities within its territorial jurisdiction
Their historical and cultural centers or capitals remain to be mere towns or

municipalities:



[ REGION PROVINCE CAPITAL TOWN
Cordillera Administrative Region Abra Bangued
‘Apayao Kabugao
Ifugao Lagawe
Mountain Province _| Bontoc
Cagayan Valley (Region Ii) Batanes Basco
‘Nueva Vizeaya Bayombong
Quirino Cabarroguis
Central Luzon (Region I) Aurora Baler
MIMAROPA (Region IV-B) Marinduque Boae
Occidental Mindoro | Mamburao
| Romblon Romblon
Bicol Region (Region V) Camarines Norte Daet
Catanduanes Virae
Western Visayas (Region VI) ‘Aklan Kalibo
Antique San Jose
Guimaras Jordan
[Central Visayas (Region VIT) Siquijor Siguijor
Eastern Visayas (Region VII) Biliran Naval
Northern Samar Catarman
Zamboanga Peninsula (Region IX) Zamboanga Sibugay _| Ipil
Northern Mindanao (Region X) Camiguin Mambajao
Davao Region (Region XI) ‘Compostela Valley | Nabunturan
Davao Occidental__| Malita
SOCCSKSARGEN (Region XI) Sarangani. Alabel
‘Caraga (Region XIII) Dinagat Islands San Jose
Bangsamoro Autonomous Region in | Maguindanao Buluan
Muslim Mindanao Sulu Jolo
t ‘Tawi-Tawi Bongao

Accordingly, these capital towns even serve as a center for trade, tourism, and

the seat of government ~each corresponding NTA share is inadequate for the capital

towns to provide better access to services and devolved functions.

With respect to the present provision of Republic Act No. 9009, there should

be an exception in which provinces without cities within their territorial jurisdiction

be waived on meeting the minimum requirements based on the income, land area, and

population to convert their respective capital towns to a component city. Such motion

employs better opportunity for the locality not only on the fiscal viability but also

towards greater resources stimulating growth and development.

Immediate approval of this bill is earnestly sought.

thy 2%

ENGR. CARL]

'O “Lito” S. MARQUEZ



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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

NINETEENTH CONGRESS
First Regular Session

jv. 427
HOUSE BILL NO.

Introduced by Representative CARLITO S. MARQUEZ

AN ACT
AMENDING SECTION 450 OF REPUBLIC ACT NO. 7160, OTHERWISE
KNOWN AS THE LOCAL GOVERNMENT CODE, BY AUTOMATICALLY
CONVERTING CAPITAL TOWNS OF PROVINCES WITHOUT CITIES
CLASSIFIED EITHER HIGHLY URBANIZED CITIES, INDEPENDENT
COMPONENT CITIES, OR COMPONENT CITIES

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

SECTION 1. Section 450 of Republic Act No. 7160 as amended, otherwise
known as the “Local Government Code of 1991”, as amended by Republic Act No.
9009 is hereby further amended to read as follows:

“See 450. Requisites for Creation. -(a) A municipality or a cluster of
barangays may be converted into a component city if it has a locally
generated average annual income, as certified by the Department of Finance,
of at least One hundred million pesos (P100,000,000) for the last two (2)
consecutive years based on 2000 constant prices, and if it has either of the

{following requisites:

() a contiguous territory of at least one hundred (100) square
kilometers, as certified by the Land Management Bureau; or

(ii) a population of not less than one hundred fifty-thousand (150,000)
inhabitants, as certified by the National Statistics Office.

Provided, That the creation thereof shall not reduce the land area,


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population, and income of the original unit or units at the time of said
creation to less than the minimum requirements prescribed therein.

PROVIDED, FURTHER, THAT THE MINIMUM
REQUIREMENTS PRESCRIBED HEREIN SHALL NOT APPLY
IF A MUNICIPALITY TO BE CONVERTED INTO A CITY IS THE
CAPITAL TOWN OF A PROVINCE HAVING NO CLASSIFIED
CITIES WITHIN ITS TERRITORIAL JURISDICTION.

(b) The territorial jurisdiction of a newly-created city shall be properly
identified by metes and bounds. The requirement on land area shall not apply
where the city proposed to be created is composed of one (1) or more islands.
The territory need not be contiguous if it comprises two (2) or more islands.

(c) The average annual income shall include the income accruing to the
general fund, exclusive of s requisites for Creation."

See. 2. Repealing Clause. — Alllaws, decrees, executive orders and regulations,
issuances or parts thereof inconsistent with his Act are hereby repealed or amended
accordingly.

Sec. 3. Effectivity. This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved,