Republic of the Philippines

HOUSE OF REPRESENTATIVES
Quezon City

Seventeenth Congress
First Regular Session

HOUSE BILL NO. _____

Introduced by REPRESENTATIVE

AN ACT AMENDING CERTAIN PROVISIONS OF REPUBLIC ACT NO. 7160 OTHERWISE KNOWN
AS THE “LOCAL GOVERNMENT CODE” AND FOR OTHER PURPOSES

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

assembled::

1 Section 1. Section Section 284, as hereby modified, shall henceforth read as follows:
2
3 “ Section 284. Allotment of Taxes. - Local government units shall
4 have a share in the national taxes based on the collection of the
5 third fiscal year preceding the current fiscal year as follows:
6
7 (a) On the first year of the effectivity of this Code, thirty
8 percent (30%);
9 (b) On the second year, thirty-five percent (35%); and
10 (c) On the third year and thereafter, forty percent (40%).
11
12 Provided, That in the event that the national government
13 incurs an unmanageable public sector deficit, the President of the
14 Philippines is hereby authorized, upon the recommendation of
15 Secretary of Finance, Secretary of Interior and Local Government
16 and Secretary of Budget and Management, and subject to
17 consultation with the presiding officers of both Houses of
18 Congress and the presidents of the "liga", to make the necessary
19 adjustments in the allotment of local government units but in no
20 case shall the allotment be less than thirty percent (30%) of the
21 collection of national taxes of the third fiscal year preceding the
22 current fiscal year; Provided, further, That in the first year of the
23 effectivity of this Code, the local government units shall, in
24 addition to the thirty percent (30%) allotment which shall include
25 the cost of devolved functions for essential ~ Decision 37 G.R. Nos.
26 199802 & 208488 public services, be entitled to receive the
27 amount equivalent to the cost of devolved personal services.”
28
29 Section 2. Section 285 of Republic Act 7160, otherwise known as the “Local Government Code”
30 is hereby amended to read as follows:
31
32 “ Section 285. Allocation to Local Government Units. - The share
33 of local government units in the allotment shall be collected in the
34 following manner:
35
36 (a) Provinces - Twenty-three percent (23%);
37 (b) Cities - Twenty-three percent (23%);

1
 1 (c) Municipalities - Thirty-four percent (34%); and
2 (d) Barangays -- Twenty percent (20%)
3 Provided, however, That the share of each province, city,
4 and municipality shall be determined on the basis of the following
5 formula:
6
7 (a) Population -- Fifty percent (50%);
8 (b) Land Area-· Twenty-five percent (25%); and
9 (c) Equal sharing--Twenty-five percent (25%)
10
11 Provided, further. That the share of each barangay with a
12 population of not less than one hundred ( 100) inhabitants shall
13 not be less than Eighty thousand (P-80,000.00) per annum
14 chargeable against the twenty percent (20%) share of the
15 barangay from the allotment, and the balance to be allocated on
16 the basis of the following formula:
17
18 (a) On the first year of the effectivity of this Code:
19 ( 1) Population - Forty percent (40% ); and
20 (2) Equal sharing - Sixty percent (50%)
21 (b) On the second year:
22 (1) Population·--· Filly percent (50%); and
23 (2) Equal sharing --- Fitly percent: (50%)
24 ( c) On the third year and thereafter:
25 (1) Population - Sixty percent (60%); and
26 (2) Equal Sharing – Forty percent (40%)
27
28 Provided, finally, That the financial requirements of
29 barangays created by local government units after the effectivity
30 of this Code shall be the responsibility of the local government
31 unit concerned.”
32
33 Section 3: Section 287 of Republic Act 7160, otherwise known as the “Local Government Code”
34 is hereby amended to read as follows:
35
36 “ Section 287. Local Development Projects. - Each local
37 government unit shall appropriate in its annual budget no less
38 than twenty percent (20%) of its annual allotment for
39 development projects. Copies of the development plans of local
40 government units shall be furnished the Department of Interior
41 and Local Government.”
42
43 Section 4: Section 290 of Republic Act 7160, otherwise known as the “Local Government Code”
44 is hereby amended to read as follows:
45
46 “ Section 290. Amount of Share of Local Government Units. -
47 Local government units shall, in addition to the allotment, have a
48 share of forty percent ( 40%) of the gross collection derived by the
49 national government from the preceding fiscal year from mining
50 taxes, royalties, forestry and fishery charges, and such other taxes,
51 fees, or charges, including related surcharges, interests, or fines,
52 and from its share in any co-production, joint venture or
53 production sharing agreement in the utilization and development
54 of the national wealth within their territorial jurisdiction.”
55
56
57 Section 5. Assigned Authorities to carry out the objectives of this Act. – The Secretary of the
58 Department of Finance; the Secretary of the Department of Budget and Management; the

2
 1 Commissioner of Internal Revenue; the Commissioner of Customs; and the National Treasurer
2 are directed to include ALL COLLECTIONS OF NATIONAL TAXES in the computation of the base
3 of the just share of the Local Government Units except those accruing to special purpose funds
4 and special allotments for the utilization and development of the national wealth.
5
6 Section 6. Appropriations. – Such sums as may be necessary to carry out the provisions of this
7 Act, including the salaries of complementary personnel and those needed for operating
8 expenses and equipment, are hereby appropriated out of any funds in the National Treasury
9 not otherwise appropriated. Henceforth, the same shall be included in the annual general
10 appropriations Act.
11
12 Section 7. Separability Clause. – In case any provision of this Act is declared unconstitutional,
13 the other provisions shall remain in effect.
14
15 Section 8. Repealing Clause. – All other laws, decrees, executive orders, rules or regulations
16 inconsistent herewith are hereby repealed, amended or modified accordingly.
17
18 Section 9. Effectivity. – This Act shall take effect fifteen (15) days after its publication in at least
19 two (2) national newspapers of general application.
20
21 Approved.