HOUSE OF REPRESENTATIVES 1 onre. YUL 8

Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House BILL NOE!

Introduced by REP. ROMAN T. ROMULO
Lone District, Pasig City

AN ACT
EXEMPTING FROM THE POPULATION AND LAND AREA
REQUIREMENTS THE CONVERSION OF A MUNICIPALITY INTO A
COMPONENT CITY IF IT HAS A LOCALLY GENERATED
AVERAGE ANNUAL INCOME OF AT LEAST TWO HUNDRED
FIFTY MILLION PESOS (P250,000,000.00) AND ADOPTING IRA
PORTABILITY FOR EVERY SUBSEQUENT CONVERSION OF A
MUNICIPALITY INTO A CITY, AMENDING FOR SUCH PURPOSE
SECTION 450 OF REPUBLIC ACT NO. 7160, OTHERWISE KNOWN
AS THE LOCAL GOVERNMENT CODE OF 1991

EXPLANATORY NOTE

This bill was originally the consolidated bill filed during the Second
Regular Session of the Seventeenth Congress. It was approved on third reading
by the House of representatives and transmitted to the Senate. In the Senate, the
Committee on Local Government chaired by Senator Juan Edgardo M. Angara
submitted a counterpart measure docketed as Senate Bill No.1842 as contained
under Committee Report No. 396 with this representation, Antonio F. Trillanes,
Juan Edgardo M. Angara, Richard J. Gordon, Juan Miguel F. Zubiri as authors
thereof. Said bill was pending on second reading when the Seventeenth
Congress adjourned last June 7, 2019.

The primordial reason for converting a municipality or cluster of
barangays into a city is to ensure its economic viability (Latasa v Commission
on Elections, G.R. No. 154829, December 10, 2003). As a general rule, the
creation of a local government unit or its conversion from one level into
another shall be based on verifiable indicators or viability and projected
capacity to provide services, specifically income, population and land area
(Section 7, R.A. No. 7160, Local Government Code of 1991).

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Among the three, there is no doubt that the income requirement is the
most controlling. In recognition of such fact, the Code sets forth the following
criterion: Income — It must be sufficient, based on acceptable standards, to
provide for all essential facilities and services and special functions
commensurate with the size of its population, as expected of the local
government unit concerned (Section 7(a), supra).

With regard to the population requirement, the Code merely provides, to
wit: Population — It shall be determined as the total number of inhabitants,
within the territorial jurisdiction of the local government unit concerned
(Section 7(b), supra).

And lastly, with regards to the land area, the Code merely requires that
the same be contiguous; properly identified by metes and bounds; and more
importantly, must be sufficient to provide for such basic services and facilities
to meet the requirements of its populace (Section 7(c), supra).

As our law stands today, before a municipality or cluster of barangays
could be converted into a component city, it must have an annual income of at
least One Hundred Million Pesos (P100,000,000.00) and a territory of at least
one hundred (100) square kilometers or a population of not less than one
hundred fifty thousand (150,000) (Sec. 450, R.A. No. 7160, Local Government
Code, as amended by R.A. 9006).

However, there are some municipalities which, though not compliant
with the population and income requirement, have nevertheless demonstrated
unquestionable capacity to provide essential government facilities, social
services to its inhabitants, comparable or even superior to that of existing cities.

‘As we all know, living in a city has its corresponding economic
advantage. Thus, it would be utterly unfair to the inhabitants of municipalities
to forever foreclose their right to the benefits of cityhood simply because such
municipalities’ land area and population is less than that required under the
Local Government Code.

While there is no hard and fast rule to determine the optimum populace
or land area for a city, applying the principles of political law for the creation
of a sovereign state, the population must be numerous enough and able to
procreate in order to ensure perpetuation of the political entity. With regards to
its land area, the same must be large enough to be able to sufficiently provide
for its people.

Noteworthy are the small states, specifically: Monaco, a tiny state along
the French Riviera which has an area of just 0.7 square miles (1.81 sq. km.) and
a population of just 32,000. The island state of Naura, became independent in


1968, and has an area of just 8.5 square miles (22 sq. km.) and a population of
just 13,000. Tuvalu, formerly known as Ellice Islands, gained its independence
in 1978, and has an area of just 9 square miles (23.3 sq. km.) and a population
of 12,000. San Marino, located at Mt. Titano in north central Italy, which has
an area of just 24 square miles (62.13 sq. km.) and a population of just 29,000.

If the above political entities have attained their status as an independent
state despite its small population and land area, all the more reason for
municipalities which have time and again demonstrated their capacity to thrive
despite their small population and land area to be allowed to upgrade its status
to that of a city.

To allay the fear of the league of cities that said conversion will
adversely affect the IRA share of their members, this bill introduces the
concept of IRA Portability allowing these municipalities to bring their current
IRA with them after their conversion. With existing cities retaining their
present share in the IRA shares, with a minimal decrease due to the
corresponding increase in the IRAs of the converted municipalities, the adverse
effects of the numerous conversions of municipalities qualified under this bill’s
proposed exemption will be avoided

Further, to emphasize, this proposed bill provides just an exception to
the general rule. The general rule remains — that for creation of or conversion
into a city, a municipality must have an income of at least P100,000,000.00 and
a land area of at least 100 square kilometers of population of at least 150,000
The exception is that, if the municipality generates a local income of at least
double than that of the general rule, that is, Two Hundred Fifty Million Pesos
(P250,000,000.00), then it is qualified to be converted into a city without
regard to the size of its land area or population.

In view thereof, support and approval of this measure is earnestly sought

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ROMAN T. ROMULO


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HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 3148

Introduced by REP. ROMAN T. ROMULO
Lone District, Pasig City

AN ACT
EXEMPTING FROM THE POPULATION AND LAND AREA
REQUIREMENTS THE CONVERSION OF A MUNICIPALITY INTO A
COMPONENT CITY IF IT HAS A LOCALLY GENERATED
AVERAGE ANNUAL INCOME OF AT LEAST TWO HUNDRED
FIFTY MILLION PESOS (P250,000,000.00) AND ADOPTING IRA
PORTABILITY FOR EVERY SUBSEQUENT CONVERSION OF A
MUNICIPALITY INTO A CITY, AMENDING FOR SUCH PURPOSE
SECTION 450 OF REPUBLIC ACT NO. 7160, OTHERWISE KNOWN
AS THE LOCAL GOVERNMENT CODE OF 1991

Be it enacted by the Senate and House of Representatives 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:

“ SEC. 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 (P100,000,000.00) for
the last two (2) consecutive years based on [2000] 2012 constant prices,
and if it has either of the following requisites:

(i) Contiguous territory of at least one hundred (100) square
kilometers, as certified by the Lands Management Bureau; or

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


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Office] PHILIPPINE STATISTICS AUTHORITY (PSA).

“PROVIDED, THAT, the creation thereof shall not reduce the
land area, population and income of the original unit or units at
the time of said creation to less than the minimum requirements
prescribed herein.

“A MUNICIPALITY OR A CLUSTER OF BARANGAYS
WITH A LOCALLY GENERATED AVERAGE ANNUAL
INCOME, AS CERTIFIED BY THE DEPARTMENT OF
FINANCE, OF AT LEAST TWO HUNDRED FIFTY
MILLION PESOS (P250,000,000.00) FOR THE LAST TWO
(2) CONSECUTIVE YEARS BASED ON 2012 CONSTANT
PRICES MAY ALSO BE CONVERTED INTO A
COMPONENT CITY IF IT HAS EITHER A POPULATION
OF NOT LESS THAN ONE HUNDERED THOUSAND
(100,000) INHABITANTS AS CERTIFIED BY THE PSA OR
A CONTIGUOUS TERRITORY OF AT LEAST ONE
HUNDRED (100) SQUARE KILOMETERS, AS
CERTIFIED BY THE LAND MANAGEMENT BUREAU:
PROVIDED THAT, THREE (3) YEARS AFTER THE
EFFECTIVITY OF THIS ACT AND EVERY THREE (3)
YEARS THEREAFTER, THE THRESHOLD AMOUNT OF
TWO HUNDRED FIFTY MILLION PESOS
(P250,000,000.00) SHALL BE INCREASED BY FIVE
PERCENT (5%). PROVIDED, FURTHER, THAT THE
NEWLY CONVERTED CITIES FROM THE
ENACTMENT OF THIS ACT SHALL BRING THEIR IRA
SHARE AS MUNICIPALITIES TO THE IRA SHARE OF
CITIES TO MINIMIZE THE EFFECT OF
CONVERSION.”

(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 specific funds, transfers, and non-recurring
income.

SEC. 2. Separability Clause - If any provision of this Act shall be
declared invalid or unconstitutional, the remaining part or provisions not
otherwise affected shall remain in force.


SEC. 3. Repealing Clause - Any law, decreed, ordinance, administrative
circulars not consistent with any provision of this Act is hereby amended,
repealed or modified accordingly

SEC. 4. Effectivity - This Act shall take effect fifteen (15) days after its
complete publication in the Official Gazette or in at least two (2) newspapers of
general circulation.

Approved,