FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
Real property tax (RPT) is the single major source of income of local govermnents. It 
accounts for roughly 36% of total locally-generated income ofLGUs. However, the Commission 
on Audit (COA) bared that only 54% of the total potential tax take are actually collected. There 
are several reasons raised why there is an apparent under collection of real property taxes: 
(1) Tnere is no uniform method of appraising real properties among local govermnents -
i.e., two similar assets located in two different but adjacent jurisdictions may bear different RPT 
burdens. (2) Revision or updating of the schedule of fair market values is so infrequent, thus, 
resulting in a low tax base even as assets in the market continue to appreciate. (3) The approval 
of the schedule of fair market values is vested on the Sanggunian PanlalawiganiPanlungsod. 
Considering the political nature of the local Sanggunian, the tendency is to forego revisions in 
the valuation schedule or to keep the property values understated. 
It is important, therefore, that the approval of the schedule of fair market values be 
transferred fiom the local Sanggunian to the Department of Finance (DOF) upon review and 
recommendation of a Regional Technical Valuation Committee. The power to determine the 
assessment levels and tax rates, however, shall remain with the local Sanggunian. 
The Committee shall be composed of the local assessors, and regional representatives 
from the Bureau of Local Govermnent Finance (BLGF), the Bureau of Internal Revenue (BIR), 
and the private sector. The same Committee will seek to harmonize the valuation method used by 
the different local government units, national government agencies, and the private sector. 
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This is a senate counterpart bill to one filed in the House of Representatives by Rep. Jose 
De Venecia, Jr. 1 
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I This bill was filed during the 14'h Congress I" Regular Session 
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FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
i Ci 
.. IUt 1'; P / :16 
t-1~e~"J~ f) f\,'-
Introduced by Senator Miriam Defensor Santiago 
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AN ACT 
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AMENDING SECTIONS 212 AND 214 OF REPUBLIC ACT 7160, OTHERWISE KNOWN 
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AS THE LOCAL GOVERNMENT CODE OF 1991 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
, 
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SECTION 1. Section 212 of the Local Government Code of 1991 is hereby amended to 
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read as follows: 
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SEC. 212. Preparation of Schedule of Fair Market Values. -
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Before any general revision of property assessment is made pursuant to the 
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provisions of this Title, [there shall be prepared a schedule of fair market values 
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by the provincial, city and the municipal assessors of the municipalities within the 
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Metropolitan Manila Area for the different classes of real property situated in 
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their respective local government units for enactment by ordinance of the 
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sanggunian concerned.] A SCHEDULE OF FAIR MARKET VALUES SHALL 
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BE PREPARED BY A REGIONAL TECHNICAL VALUATION COMMITTEE 
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FOR FINAL APPROVAL OF THE SECRETARY OF FINANCE. 
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THE REGIONAL TECHNICAL VALUATION COMMITTEE SHALL 
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BE COMPOSED 
OF THE PROVINCIAL, CITY AND MUNICIPAL 
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ASSESSORS 
OF MUNICIPALITIES WITHIN THE METROPOLITAN 
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MANILA ARBA, AND ONE REPRESENTATIVE EACH FROM THE 
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BUREAU OF LOCAL GOVERNMENT FINANCE (BLGF), THE BUREAU OF 
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INTERNAL REVENUE (BIR), AND THE PRIVATE SECTOR. THE 
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REPRESENTATIVE FROM THE PRIVATE SECTOR MUST BE DIRECTLY 
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INVOLVED IN REAL ESTATE APPRAISAL. 
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SECTION 2. Section 214 of the Local Government Code of 1991 is hereby amended to 
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read as follows: 
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SEC. 214. Amendment of Schedule of Fair Market Values. - The 
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[provincial, city or municipal assessor] REGIONAL TECHNICAL VALUATION 
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COMMITTEE may recommend to the [sanggunian] SECRETARY OF 
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FINANCE concerned amendments to correct errors in valuation of the schedule 
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of fair market values. The [sanggunian] SECRETARY concerned shall, [by 
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ordinance.] act upon the recommendation within ninety (90) days from receipt 
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thereof. 
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SECTION 3. Effectivity. - This Act shall take effect fifteen (15) days following its 
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Publication in two (2) newspaper of general circulation. 
Approved, 
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