Local Government Code of 1991.pptx

THE LOCAL GOVERNMENT CODE OF THE
PHILIPPINES
BOOK I
GENERAL PROVISIONS
TITLE ONE. - BASIC PRINCIPLES
CHAPTER 1. - THE CODE, POLICY AND APPLICATION
SECTION 1. Title. - This Act shall be known and cited as the "Local Government
Code of 1991".
SECTION 2. Declaration of Policy. - (a) It is hereby declared the policy of the
State that the territorial and political subdivisions of the State shall enjoy
genuine and meaningful local autonomy to enable them to attain their
fullest development as self-reliant communities and make them more
effective partners in the attainment of national goals. Toward this end, the
State shall provide for a more responsive and accountable local
government structure instituted through a system of decentralization
whereby local government units shall be given more powers, authority,
responsibilities, and resources. The process of decentralization shall
proceed from the national government to the local government units.
(b) It is also the policy of the State to ensure the accountability of local
government units through the institution of effective mechanisms of
recall, initiative and referendum.
(c) It is likewise the policy of the State to require all national agencies
and offices to conduct periodic consultations with appropriate local
government units, non-governmental and people's organizations,
and other concerned sectors of the community before any project
or program is implemented in their respective jurisdictions.
SECTION 3. Operative Principles of Decentralization. - The formulation and
implementation of policies and measures on local autonomy shall be
guided by the following operative principles:
(a) There shall be an effective allocation among the different local
government units of their respective powers, functions,
responsibilities, and resources;
(b) There shall be established in every local government unit an
accountable, efficient, and dynamic organizational structure and
operating mechanism that will meet the priority needs and service
requirements of its communities;
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(c) Subject to civil service law, rules and regulations, local officials and
employees paid wholly or mainly from local funds shall be
appointed or removed, according to merit and fitness, by the
appropriate appointing authority;
(d) The vesting of duty, responsibility, and accountability in local
government units shall be accompanied with provision for
reasonably adequate resources to discharge their powers and
effectively carry out their functions; hence, they shall have the
power to create and broaden their own sources of revenue and the
right to a just share in national taxes and an equitable share in the
proceeds of the utilization and development of the national wealth
within their respective areas;
(e) Provinces with respect to component cities and municipalities, and
cities and municipalities with respect to component Barangays,
shall ensure that the acts of their component units are within the
scope of their prescribed powers and functions:
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(f) Local government units may group themselves, consolidate or
coordinate their efforts, services, and resources for purposes
commonly beneficial to them;
(g) The capabilities of local government units ,especially the
municipalities and Barangays, shall been enhanced by providing
them with opportunities to participate actively in the implementation
of national programs and projects;
(h) There shall be a continuing mechanism to enhance local autonomy
not only by legislative enabling acts but also by administrative and
organizational reforms;
(i) Local government units shall share with the national government
the responsibility in the management and maintenance of
ecological balance within their territorial jurisdiction, subject to the
provisions of this Code and national policies;
(j) Effective mechanisms for ensuring the accountability of local
government units to their respective constituents shall be
strengthened in order to upgrade continually the quality of local
leadership;
(k) The realization of local autonomy shall be facilitated through
improved coordination of national government policies and

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programs and extension of adequate technical and material
assistance to less developed and deserving local government units;
(l) The participation of the private sector in local governance,
particularly in the delivery of basic services, shall be encouraged to
ensure the viability of local autonomy as an alternative strategy for
sustainable development; and
(m) The national government shall ensure that decentralization tributes
to the continuing improvement of the performance of local
government units and the quality of community life.
SECTION 4. Scope of Application. - This Code shall apply to all provinces,
cities, municipalities, Barangays, and other political subdivisions as may
be created by law, and, to the extent herein provided, to officials, offices,
or agencies of the national government.
SECTION 5. Rules of Interpretation. - In the interpretation of the provisions of
this Code, the following rules shall apply:
(a) Any provision on a power of a local government unit shall be
liberally interpreted in its favor, and in case of doubt, any question
thereon shall be resolved in favor of devolution of powers and of
the lower local government unit. Any fair and reasonable doubt as
to the existence of the power shall be interpreted in favor of the
local government unit concerned;
(b) In case of doubt, any tax ordinance or revenue measure shall be
construed strictly against the local government unit enacting it, and
liberally in favor of the taxpayer. Any tax exemption, incentive or
relief granted by any local government unit pursuant to the
provisions of this Code shall be construed strictly against the
person claiming it.
(c) The general welfare provisions in this Code shall be liberally
interpreted to give more powers to local government units in
accelerating economic development and upgrading the quality of
life for the people in the community;
(d) Rights and obligations existing on the date of effectivity of this Code
and arising out of contracts or any other source of prestation
involving a local government unit shall be governed by the original
terms and conditions of said contracts or the law in force at the time
such rights were vested; and

(e) In the resolution of controversies arising under this Code where no
legal provision or jurisprudence applies, resort may be had to the
customs and traditions in the place where the controversies take
place.
CHAPTER 2. - GENERAL POWERS AND ATTRIBUTES OF LOCAL
GOVERNMENT UNITS
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SECTION 6. Authority to Create Local Government Units. - A local
government unit may be created, divided, merged, abolished, or its
boundaries substantially alte red either by law enacted by Congress in the
case of a province, city, municipality, or any other political subdivision, or
by ordinance passed by the Sangguniang Panlalawigan or Sangguniang
Panlungsod concerned in the case of a Barangay located within its
territorial jurisdiction, subject to such limitations and requirements
prescribed in this Code.
SECTION 7. Creation and Conversion. - As a general rule, the creation of a
local government unit or its conversion from one level to another level
shall be based on verifiable indicators of viability and projected capacity to
provide services, to wit:
(a) Income. - It must be sufficient, based on acceptable standards, to
provide for all essential governm ent facilities and services and
special functions commensurate with the size of its population, as
expected of the local government unit concerned;
(b) Population. - It shall be det ermined as the total number of
inhabitants within the territorial ju risdiction of the local government
unit concerned; and
(c) Land Area. - It must be contiguous, unless it comprises two or more
islands or is separated by a local government unit independent of
the others; properly identified by metes and bounds with technical
descriptions; and sufficient to provide for such basic services and
facilities to meet the requirements of its populace. Compliance with
the foregoing indicators shall be attested to by the Department of
Finance (DOF), the National Statistics Office (NSO), and the Lands
Management Bureau (LMB) of the Department of Environment and
Natural Resources(DENR).
SECTION 8. Division and Merger. - Division and merger of existing local
government units shall comply with the same requirements herein
prescribed for their creation: Provided however, That such division shall
not reduce the income, population, or land area of the local government
unit or units concerned to less than the minimum requirements prescribed

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in this Code: Provided, further, That the income classification of the
original local government unit or units shall not fall below its current
income classification prior to such division.
The income classification of local government units shall be updated
within six (6) months from the effectivity of this Code to reflect the changes
in their financial position resulting from the increased revenues as
provided herein.
SECTION 9. Abolition of Local Government Units. - A local government unit
may be abolished when its income, population, or land area has been
irreversibly reduced to less than the minimum standards prescribed for its
creation under Book III of this Code, as certified by the national agencies
mentioned in Section 17 hereof to Congress or to the Sanggunian
concerned, as the case may be.
The law or ordinance abolishing a local government unit shall specify the
province, city, municipality, or Barangay with which the local government
unit sought to be abolished will be incorporated or merged.
SECTION 10. Plebiscite Requirement. - No creation, division, merger, abolition,
or substantial alteration of boundaries of local government units shall take
effect unless approved by a majority of the votes cast in a plebiscite called
for the purpose in the political unit or units directly affected. Said plebiscite
shall be conducted by the Commission on Elections (Comelec) within one
hundred twenty (120) days from the date of effectivity of the law or
ordinance effecting such action, unless said law or ordinance fixes another
date.
SECTION 11. Selection and Transfer of Local Government Site, Offices and
Facilities.
(a) The law or ordinance creating or merging local government units
shall specify the seat of government from where governmental and
corporate services shall be delivered. In selecting said site, factors
relating to geographical centrality, accessibility, availability of
transportation and communication facilities, drainage and
sanitation, development and economic progress, and other relevant
considerations shall be taken into account.
(b) When conditions and developments in the local government unit
concerned have significantly changed subsequent to the
establishment of the seat of government, its Sanggunian may, after
public hearing and by a vote of two-thirds (2/3) of all its members,
transfer the same to a site better suited to its needs. Provided,

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however, That no such transfer shall be made outside the territorial
boundaries of the local government unit concerned.
The old site, together with the improvements thereon, may be
disposed of by sale or lease or converted to such other use as the
Sanggunian concerned may deem beneficial to the local
government unit concerned and its inhabitants.
(c) Local government offices and facilities shall not be transferred,
relocated, or converted to other uses unless public hearings are
first conducted for the purpose and the concurrence of the majority
of all the members of the Sanggunian concerned is obtained.
SECTION 12. Government Centers. - Provinces, cities, and municipalities shall
endeavor to establish a government center where offices, agencies, or
branches of the national government, local government units, or
government-owned or -controlled corporations may, as far as practicable,
be located. In designating such a center, the local government unit
concerned shall take into account the existing facilities of national and
local agencies and offices which may serve as the government center as
contemplated under this Section. The national government , local
government unit or government-owned or -controlled corporation
concerned shall bear the expenses for the construction of its buildings and
facilities in the government center.
SECTION 13. Naming of Local Government Units and Public Places, Streets
and Structures.
(a) The Sangguniang Panlalawigan may, in consultation with the
Philippine Historical Commission (PHC), change the name of the
following within its territorial jurisdiction:
(1) Component cities and municipalities, upon the
recommendation of the Sanggunian concerned;
(2) Provincial roads, avenues, boulevards, thorough-fares, and
bridges;
(3) Public vocational or technical schools and other post-
secondary and tertiary schools;
(4) Provincial hospitals, health centers, and other health
facilities; and
(5) Any other public place or building owned by the provincial
government.

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(b) The Sanggunian of highly urbanized cities and of component cities
whose charters prohibit their voters from voting for provincial
elective officials, hereinafter referred to in this Code as independent
component cities, may, in consultation with the Philippine Historical
Commission, change the name of the following within its territorial
jurisdiction:
(1) City Barangays, upon the recommendation of the
Sangguniang Barangay concerned;
(2) City roads, avenues, boulevards, thorough fares, and
bridges;
(3) Public elementary, secondary and vocational or technical
schools, community colleges and non-chartered colleges;
(4) City hospitals, health centers and other health facilities; and
(5) Any other public place or building owned by the city
government.
(c) The Sanggunians of component cities and municipalities may, in
consultation with the Philippine Historical Commission, change the
name of the following within its territorial jurisdiction:
(6) city and municipal Barangays, upon recommendation of the
Sangguniang Barangay concerned;
(7) city, municipal and Barangay roads, avenues, boulevards,
thorough fares, and bridges;
(8) city and municipal public elementary, secondary and
vocational or technical schools, post-secondary and other
tertiary schools;
(9) city and municipal hospitals, health centers and other health
facilities; and (5)Any other public place or building owned by
the municipal government.
(d) None of the foregoing local government units, institutions, places,
or buildings shall be named after a living person, nor may a change
of name be made unless for a justifiable reason and, in any case,
not oftener than once every ten (10) years. The name of a local
government unit or a public place, street or structure with historical,

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cultural, or ethnic significance shall not be changed, unless by a
unanimous vote of the Sanggunian concerned and in consultation
with the PHC.
(e) A change of name of a public school shall be made only upon the
recommendation of the local school board concerned.
(f) A change of name of public hospitals, health centers, and other
health facilities shall be made only upon the recommendation of the
local health board concerned.
(g) The change of name of any local government unit shall be effective
only upon ratification in a plebiscite conducted for the purpose in
the political unit directly affected. In any change of name, the Office
of the President, the representative of the legislative district
concerned, and the Bureau of Posts shall be notified.
SECTION 14. Beginning of Corporate Existence. - When a new local
government unit is created, its corporate existence shall commence upon
the election and qualification of its chief executive and a majority of the
members of its Sanggunian, unless some other time is fixed therefor by
the law or ordinance creating it.
SECTION 15. Political and Corporate Nature of Local Government Units. -
Every local government unit created or recognized under this Code is a
body politic and corporate endowed with powers to be exercised by it in
conformity with law. As such, it shall exercise powers as a political
subdivision of the national government and as a corporate entity
representing the inhabitants of its territory.
SECTION 16. General Welfare. - Every local government unit shall exercise the
powers expressly granted, those necessarily implied there from, as well as
powers necessary, appropriate, or incidental for its efficient and effective
governance, and those which are essential to the promotion of the general
welfare. Within their respective territorial jurisdictions, local government
units shall ensure and support, among other things, the preservation and
enrichment of culture, promote health and safety, enhance the right of the
people to a balanced ecology, encourage and support the development of
appropriate and self-reliant scientific and technological capabilities,
improve public morals, enhance economic prosperity and social justice,
promote full employment among their residents, maintain peace and
order, and preserve the comfort and convenience of their inhabitants.
SECTION 17. Basic Services and Facilities.

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(a) Local government units shall endeavor to be self-reliant and shall
continue exercising the powers and discharging the duties and
functions currently vested upon them. They shall also discharge the
functions and responsibilities of national agencies and offices
devolved to them pursuant to this Code. Local government units
shall likewise exercise such other powers and discharge such other
functions and responsibilities as are necessary, appropriate, or
incidental to efficient and effective provision of the basic services
and facilities enumerated herein.
(b) Such basic services and facilities include, but are not limited to, the
following:
(1) For a Barangay:
(i)
(ii)
(iii)
(vi)
(vii)
(viii)
Agricultural support services which include planting
materials distribution system and operation of farm
produce collection and buying stations;
Health and social welfare services which include
maintenance of Barangay health center and day-care
center;
Services and facilities related to general hygiene and
sanitation, beautification, and solid waste collection;
(iv) Maintenance of Katarungang Pambarangay;
(v) Maintenance of Barangay roads and bridges and
water supply systems
Infrastructure facilities such as multipurpose hall,
multipurpose pavement, plaza, sports center, and
other similar facilities;
Information and reading center; and
Satellite or public market, where viable;
(2) For a municipality:
(i) Extension and on-site research services and facilities
related to agriculture and fishery activities which
include dispersal of livestock and poultry, fingerlings,
and other seeding materials for aquaculture; palay,
corn, and vegetable seed farms; medicinal plant
gardens; fruit tree, coconut, and other kinds of
seedling nurseries; demonstration farms; quality
control of copra and improvement and development of
local distribution channels, preferably through
cooperatives; inter -Barangay irrigation system; water
and soil resource utilization and conservation

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projects; and enforcement of fishery laws in municipal
waters including the conservation of mangroves;
(ii) Pursuant to national policies and subject to
supervision, control and review of the DENR,
implementation of community-based forestry projects
which include integrated social forestry programs and
similar projects; management and control of
communal forests with an area not exceeding fifty
(50) square kilometers; establishment of tree parks,
greenbelts, and similar forest development projects;
Subject to the provisions of Title Five, Book I of this
(iii)
Code, health services which include the
implementation of programs and projects on primary
health care, maternal and child care, and
communicable and non-communicable disease
control services; access to secondary and tertiary
health services; purchase of medicines, medical
supplies, and equipment needed to carry out the
services herein enumerated;
Social welfare services which include programs and
projects on child and youth welfare, family and
community welfare, women's welfare, welfare of the
elderly and disabled persons; community-based
rehabilitation programs for vagrants, beggars, street
(iv)
children, scavengers, juvenile delinquents, and
victims of drug abuse; livelihood and other pro-poor
projects; nutrition services; and family planning
services;
(v) Information services which include investments and
job placement information systems, tax and marketing
information systems, and maintenance of a public
library;
(vi) Solid waste disposal system or environmental
management system and services or facilities related
to general hygiene and sanitation;
(vii) Municipal buildings, cultural centers, public parks
including freedom parks, playgrounds, and sports
facilities and equipment, and other similar facilities;
Infrastructure facilities intended primarily to service
the needs of the residents of the municipality and
which are funded out of municipal funds including, but
not limited to, municipal roads and bridges; school
buildings and other facilities for public elementary and
secondary schools; clinics, health centers and other
health facilities necessary to carry out health services;
communal irrigation, small water impounding projects
(viii)

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(ix)
and other similar projects; fish ports; artesian wells,
spring development, rainwater collectors and water
supply systems; seawalls, dikes, drainage and
sewerage, and flood control; traffic signals and road
signs; and similar facilities;
Public markets, slaughterhouses and other municipal
enterprises;
(x) Public cemetery;
(xi) Tourism facilities and other tourist attractions,
including the acquisition of equipment, regulation and
supervision of business concessions, and security
services for such facilities; and
Sites for police and fire stations and substations and
the municipal jail;
(xii)
(3) For a Province:
(ii)
(i) Agricultural extension and on-site research services
and facilities which include the prevention and control
of plant and animal pests and diseases; dairy farms,
livestock markets, animal breeding stations, and
artificial insemination centers; and assistance in the
organization of farmers' and fishermen's cooperatives
and other collective organizations, as well as the
transfer of appropriate technology;
Industrial research and development services, as well
as the transfer of appropriate technology;
(iii) Pursuant to national policies and subject to
supervision, control and review of the DENR,
(iv)
(vi)
(vii)
enforcement of forestry laws limited to community-
based forestry projects, pollution control law, small-
scale mining law, and other laws on the protection of
the environment; and mini-hydro electric projects for
local purposes;
Subject to the provisions of Title Five, Book I of this
Code, health services which include hospitals and
other tertiary health services;
(v) Social welfare services which include pro grams and
projects on rebel returnees and evacuees; relief
operations; and, population development services;
Provincial buildings, provincial jails, freedom parks
and other public assembly areas, and other similar
facilities;
Infrastructure facilities intended to service the needs
of the residents of the province and which are funded
out of provincial funds including, but not limited to,

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provincial roads and bridges; inter-municipal
waterworks, drainage and sewerage, flood control,
and irrigation systems; reclamation projects; and
similar facilities;
Programs and projects for low-cost housing and other
mass dwellings, except those funded by the Social
(viii)
Security System (SSS), Government Service
Insurance System (GSIS), and the Home
Development Mutual Fund (HDMF): Provided, That
national funds for these programs and projects shall
be equitably allocated among the regions in
proportion to the ratio of the homeless to the
population;
(ix)
(xi)
(xii)
Investment support services, including access to
credit financing;
(x) Upgrading and modernization of tax information and
collection services through the use of computer
hardware and software and other means;
Inter-municipal telecommunications services, subject
to national policy guidelines; and
Tourism development and promotion programs;
(4) For a City:
All the services and facilities of the municipality and
province, and in addition thereto, the following:
(i) Adequate communication and transportation facilities;
(ii) Support for education, police and fire services and
facilities.
(c) Notwithstanding the provisions of subsection (b) hereof, public
works and infrastructure projects and other facilities funded by the
national government under the annual General Appropriations Act,
other special laws, pertinent executive orders, and those wholly or
partially funded from foreign sources, are not covered under this
Section, except in those cases where the local government unit
concerned is duly designated as the implementing agency for such
projects, facilities, programs, and services.
(d) The designs, plans, specifications, testing of materials, and the
procurement of equipment and materials from both foreign and
local sources necessary for the provision of the foregoing services
and facilities shall be undertaken by the local government unit
concerned, based on national policies, standards and guidelines.

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(e) National agencies or offices concerned shall devolve to local
government units the responsibility for the provision of basic
services and facilities enumerated in this Section within six (6)
months after the effectivity of this Code.
As used in this Code, the term "devolution" refers to the act by
which the national government confers power and authority upon
the various local government units to perform specific functions and
responsibilities.
(f) The national government or the next higher level of local
government unit may provide or augment the basic services and
facilities assigned to a lower level of local government unit when
such services or facilities are not made available or, if made
available, are inadequate to meet the requirements of its
inhabitants.
(g) The basic services and facilities hereinabove enumerated shall be
funded from the share of local government units in the proceeds of
national taxes and other local revenues and funding support from
the national government, its instrumentalities and government-
owned or -controlled corporations which are tasked by law to
establish and maintain such services or facilities. Any fund or
resource available for the use of local government units shall be
first allocated for the provision of basic services or facilities
enumerated in subsection (b) hereof before applying the same for
other purposes, unless otherwise provided in this Code.
(h) The Regional offices of national agencies or offices whose
functions are devolved to local government units as provided herein
shall be phased out within one (1) year from the approval of this
Code. Said national agencies and offices may establish such field
units as may be necessary for monitoring purposes and providing
technical assistance to local government units. The properties,
equipment, and other assets of these regional offices shall be
distributed to the local government units in the region in accordance
with the rules and regulations issued by the oversight committee
created under this Code.
(i) The devolution contemplated in this Code shall include the transfer
to local government units of the records, equipment and other
assets and personnel of national agencies and offices,
corresponding to the devolved powers, functions, and
responsibilities.

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Personnel of said national agencies or offices shall be absorbed by
the local government units to which they belong or in whose areas
they are assigned to the extent that it is administratively viable as
determined by the said oversight committee: Provided, That the
rights accorded to such personnel pursuant to civil service law,
rules and regulations shall not be impaired: Provided, Further, That
regional directors who are career executive service officers and
other officers of similar rank in the said regional offices who cannot
be absorbed by the local government unit shall be retained by the
national government, without any diminution of rank, salary or
tenure.
(j) To ensure the active participation of the private sector in local
governance, local government units may, by ordinance, sell, lease,
encumber, or otherwise dispose of public economic enterprises
owned by them in their proprietary capacity.
Costs may also be charged for the delivery of basic services or
facilities enumerated in this Section.
SECTION 18. Power to Generate and Apply Resources. - Local government
units shall have the power and authority to establish an organization that
shall be responsible for the efficient and effective implementation of their
development plans, program objectives and priorities; to create their own
sources of revenue and to levy taxes, fees, and charges which shall
accrue exclusively for their use and disposition and which shall be
retained by them; to have a just share in national taxes which shall be
automatically and directly released to them without need of any further
action; to have an equitable share in the proceeds from the utilization and
development of the national wealth and resources within their respective
territorial jurisdictions including sharing the same with the inhabitants by
way of direct benefits; to acquire, develop, lease, encumber, alienate, or
otherwise dispose of real or personal property held by them in their
proprietary capacity and to apply their resources and assets for
productive, developmental, or welfare purposes, in the exercise or
furtherance of their governmental or proprietary powers and functions and
thereby ensure their development into self-reliant communities and active
participants in the attainment of national goals.
SECTION 19. Eminent Domain. - A local government unit may, through its chief
executive and acting pursuant to an ordinance, exercise the power of
eminent domain for public use, or purpose, or welfare for the benefit of the
poor and the landless, upon payment of just compensation, pursuant to
the provisions of the Constitution and pertinent laws: Provided, however,
That the power of eminent domain may not be exercised unless a valid
and definite offer has been previously made to the owner, and such offer

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was not accepted: Provided, further, That the local government unit may
immediately take possession of the property upon the filing of the
expropriation proceedings and upon making a deposit with the proper
court of at least fifteen percent (15%) of the fair market value of the
property based on the current tax declaration of the property to be
expropriated: Provided, finally, That, the amount to be paid for the
expropriated property shall be determined by the proper court, based on
the fair market value at the time of the taking of the property.
SECTION 20. Reclassification of Lands.
(a) (a) A city or municipality may, through an ordinance passed by the
Sanggunian after conducting public hearings for the purpose, authorize
the reclassification of agricultural lands and provide for the manner of
their utilization or disposition in the following cases: (1) when the land
ceases to be economically feasible and sound for agricultural purposes
as determined by the Department of Agriculture or (2) where the land
shall have substantially greater economic value for residential,
commercial, or industrial purposes, as determined by the Sanggunian
concerned: Provided, That such reclassification shall be limited to the
following percentage of the total agricultural land area at the time of the
passage of the ordinance:
(1) For highly urbanized and independent component cities,
fifteen percent (15%);
(2) For component cities and first to third class municipalities,
ten percent (10%); and
(3) For fourth to sixth class municipalities, five percent(5%):
Provided, further, That agricultural lands distributed to
agrarian reform beneficiaries pursuant to Republic Act
Numbered Sixty-six hundred fifty-seven (R.A. No. 6657),
otherwise known as "The Comprehensive Agrarian Reform
Law", shall not be affected by the said reclassification and
the conversion of such lands into other purposes shall be
governed by Section 65 of said Act.
(b) The President may, when public interest so requires and upon
recommendation of the National Economic and Development
Authority, authorize a city or municipality to reclassify lands in
excess of the limits set in the next preceding paragraph.
(c) The local government units shall, in conformity with existing laws,
continue to prepare their respective comprehensive land use plans
enacted through zoning ordinances which shall be the primary and

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dominant bases for the future use of land resources: Provided, That
production, human settlements, and
be taken into consideration in the
the requirements for food
industrial expansion shall
preparation of such plans.
(d) Where approval by a national agency is required for
reclassification, such approval shall not be unreasonably withheld.
Failure to act on a proper and complete application for
reclassification within three (3) months from receipt of the same
shall be deemed as approval thereof.
(e) Nothing in this Section shall be construed as repealing, amending,
or modifying in any manner the provisions of R.A. No. 6657.
SECTION 21. Closure and Opening of Roads.
(a) A local government unit may, pursuant to an ordinance,
permanently or temporarily close or open any local road, alley,
park, or square falling within its jurisdiction: Provided, however,
That in case of permanent closure, such ordinance must be
approved by at least two-thirds (2/3) of all the members of the
Sanggunian, and when necessary, an adequate substitute for the
public facility that is subject to closure is provided.
(b) No such way or place or any part thereof shall be permanently
closed without making provisions for the maintenance of public
safety therein. A property thus permanently withdrawn from public
use may be used or conveyed for any purpose for which other real
property belonging to the local government unit concerned may be
lawfully used or conveyed: Provided, however, That no freedom
park shall be closed permanently without provision for its transfer or
relocation to a new site.
(c) Any national or local road, alley, park, or square may be temporarily
closed during an actual emergency, or fiesta celebrations, public
rallies, agricultural or industrial fairs, or an undertaking of public
works and highways, telecommunications, and waterworks
projects, the duration of which shall be specified by the local chief
executive concerned in a written order: Provided, however, That no
national or local road, alley, park, or square shall set temporarily
closed for athletic, cultural, or civic activities not officially
sponsored, recognized, or approved by the local government unit
concerned.
(d) Any city, municipality, or Barangay may, by a duly enacted close
and regulate the use of any local ordinance, temporarily street,

17
road, thoroughfare, or any other public place where shopping malls,
Sunday, flea or night markets, or shopping areas may be
established and where goods, merchandise, foodstuffs,
commodities, or articles of commerce may be sold and dispensed
to the general public.
SECTION 22. Corporate Powers.
(a) Every local government unit, as a corporation, shall have the
following powers:
(1) To have continuous succession in its corporate name;
(2) To sue and be sued;
(3) To have and use a corporate seal;
(4) To acquire and convey real or personal property;
(5) To enter into contracts; and
(6) To exercise such other powers as are granted to
corporations, subject to the limitations provided in this Code
and other laws.
(b) Local government units may continue using, modify, or change their
existing corporate seals: Provided, That newly established local
government units or those without corporate seals may create their
own corporate seals which shall be registered with the Department
of the Interior and Local Government: Provided, further, That any
change of corporate seal shall also be registered as provided
herein.
(c) Unless otherwise provided in this Code, contract may be entered
into by the local chief executive in behalf of the local government
unit without prior authorization by the Sanggunian concerned. A
legible copy of such contract shall be posted at a conspicuous
place in the provincial capitol or the city, municipal or Barangay
hall.
(d) Local government units shall enjoy full autonomy in the exercise of
their proprietary functions and in the management of their economic
enterprises, subject to the limitations provided in this Code and
other applicable laws.

18
SECTION 23. Authority to Negotiate and Secure Grants. - Local chief
executives may, upon authority of the Sanggunian, negotiate and secure
financial grants or donations in kind, in support of the basic services or
facilities enumerated under Section 17 hereof, from local and foreign
assistance agencies without necessity of securing clearance or approval
therefor from any department, agency, or office of the national government
or from any higher local government unit: Provided, That projects financed
by such grants or assistance with national security implications shall be
approved by the national agency concerned: Provided, further, That when
such national agency fails to act on the request for approval within thirty
(30) days from receipt thereof, the same shall be deemed approved.
The local chief executive shall, within thirty (30) days upon signing of such
grant agreement or deed of donation, report the nature, amount, and
terms of such assistance to both Houses of Congress and the President.
SECTION 24. Liability for Damages. - Local government units and their officials
are not exempt from liability for death or injury to persons or damage to
property.
CHAPTER 3. - INTERGOVERNMENTAL RELATIONS
Article One. - National Government and Local Government Units
SECTION 25. National Supervision over Local Government Units. -(a)
Consistent with the basic policy on local autonomy, the President shall
exercise general supervision over local government units to ensure that
their acts are within the scope of their prescribed powers and functions.
The President shall exercise supervisory authority directly over provinces,
highly urbanized cities, and independent component cities; through the
province with respect to component cities and municipalities; and through
the city and municipality with respect to Barangays.
(b) National agencies and offices with project implementation functions
shall coordinate with one another and with the local government
units concerned in the discharge of these functions. They shall
ensure the participation of local government units both in the
planning and implementation of said national projects.
(c) The President may, upon request of the local government unit
concerned, direct the appropriate national agency to provide
financial, technical, or other forms of assistance to the local
government unit. Such assistance shall be extended at no extra
cost to the local government unit concerned.

19
(d) National agencies and offices including government-owned or -
controlled corporations with field units or branches in a province,
city, or municipality shall furnish the local chief executive
concerned, for his information and guidance, monthly reports
including duly certified budgetary allocations and expenditures.
SECTION 26. Duty of National Government Agencies in the Maintenance of
Ecological Balance. - It shall be the duty of every national agency or
government-owned or -controlled corporation authorizing or involved in the
planning and implementation of any project or program that may cause
pollution, climatic change, depletion of non-renewable resources, loss of
crop land, rangeland, or forest cover, and extinction of animal or plant
species, to consult with the local government units, nongovernmental
organizations, and other sectors concerned and explain the goals and
objectives of project or program, its impact upon the people and the
community in terms of environmental or ecological balance, and the
measures that will be undertaken to prevent or minimize the adverse
effects thereof.
SECTION 27. Prior Consultations Required.- No project or program shall be
implemented by government authorities unless the consultations
mentioned in Sections 2 (c) and 26 hereof are complied with, and prior
approval of the Sanggunian concerned is obtained: Provided, That
occupants in areas where such projects are to be implemented shall not
be evicted unless appropriate relocation sites have been provided, in
accordance with the provisions of the Constitution.
Article Two. - Relations with the Philippine National Police
SECTION 28. - Powers of Local Chief Executives over the Units of the
Philippine National Police. - The extent of operational supervision and
control of local chief executives over the police force, fire protection unit,
and jail management personnel assigned in their respective jurisdictions
shall be governed by the provisions of Republic Act Numbered Sixty-nine
hundred seventy-five (R.A. No. 6975), otherwise known as "The
Department of the Interior and Local Government Act of 1990", and the
rules and regulations issued pursuant thereto.
Article Three. - Inter-Local Government Relations
SECTION 29. Provincial Relations with Component Cities and
Municipalities. - The province, through the governor, shall ensure that
every component city and municipality within its territorial jurisdiction acts
within the scope of its prescribed powers and functions. Highly urbanized
cities and independent component cities shall be independent of the
province.

20
SECTION 30. Review of Executive Orders. - (a) Except as otherwise provided
under the Constitution and special statutes, the governor shall review all
executive orders promulgated by the component city or municipal Mayor
within his jurisdiction. The city or municipal Mayor shall review all
executive orders promulgated by the Punong Barangay within his
jurisdiction. Copies of such orders shall be forwarded to the governor or
the city or municipal Mayor, as the case may be, within three (3) days from
their issuance. In all instances of review, the local chief executive
concerned shall ensure that such executive orders are within the powers
granted by law and in conformity with provincial, city, or municipal
ordinances.
(b) If the governor or the city or municipal Mayor fails to act on said
executive orders within thirty (30) days after their submission, the
same shall be deemed consistent with law and therefore valid.
SECTION 31. Submission of Municipal Questions to the Provincial Legal
Officer or Prosecutor. - In the absence of a municipal legal officer, the
municipal government may secure the opinion of the provincial legal
officer, and in the absence of the latter, that of the provincial prosecutor on
any legal question affecting the municipality.
SECTION. 32. City and Municipal Supervision over Their Respective
Barangays. - The city or municipality, through the city or municipal Mayor
concerned, shall exercise general supervision over component Barangays
to ensure that said Barangays act within the scope of their prescribed
powers and functions.
SECTION 33. Cooperative Undertakings Among Local Government Units. -
Local government units may, through appropriate ordinances, group
themselves, consolidate, or coordinate their efforts, services, and
resources for purposes commonly beneficial to them. In support of such
undertakings, the local government units involved may, upon approval by
the Sanggunian concerned after a public hearing conducted for the
purpose, contribute funds, real estate, equipment, and other kinds of
property and appoint or assign personnel under such terms and conditions
as may be agreed upon by the participating local units through
Memoranda of Agreement.
CHAPTER 4. - RELATIONS WITH PEOPLE'S AND NONGOVERNMENTAL
ORGANIZATIONS
SECTION 34. Role of People's and Nongovernmental Organizations. - Local
government units shall promote the establishment and operation of

21
people's and nongovernmental organizations to become active partners in
the pursuit of local autonomy.
SECTION 35. Linkages with People's and Non-Governmental Organizations.
- Local government units may enter into joint ventures and such other
cooperative arrangements with people's and nongovernmental
organizations to engage in the delivery of certain basic services,
capability-building and livelihood projects, and to develop local enterprises
designed to improve productivity and income, diversify agriculture, spur
rural industrialization, promote ecological balance, and enhance the
economic and social well-being of the people.
SECTION 36. Assistance to People's and Nongovernmental Organizations. -
A local government unit may, through its local chief executive and with the
concurrence of the Sanggunian concerned, provide assistance, financial
or otherwise, to such people's and nongovernmental organizations for
economic, socially-oriented, environmental, or cultural projects to be
implemented within its territorial jurisdiction.
CHAPTER 5. - LOCAL PREQUALIFICATION, BIDS AND AWARDS
COMMITTEE
SECTION 37. Local Prequalification, Bids and Awards Committee (Local
PBAC).
(a) There is hereby created a local prequalification, bids and awards
committee in every province, city, and municipality, which shall be
primarily responsible for the conduct of prequalification of
contractors, bidding, evaluation of bids, and the recommendation of
awards concerning local infrastructure projects. The governor or the
city or municipal Mayor shall act as the chairman with the following
as members:
(1) The chairman of the appropriations committee of the
Sanggunian concerned;
(2) A representative of the minority party in the Sanggunian
concerned, if any, or if there be none, one (1) chosen by said
Sanggunian from among its members;
(3) The local treasurer;
(4) Two (2) representatives of nongovernmental organizations
that are represented in the local development council
concerned, to be chosen by the organizations themselves;
and (11) Any practicing certified public accountant from the

22
private sector, to be designated by the local chapter of the
Philippine Institute of Certified Public Accountants, if any.
Representatives of the Commission on Audit shall observe
the proceedings of such committee and shall certify that the
rules and procedures for prequalification, bids and awards
have been complied with.
(b) The agenda and other information relevant to the meetings of such
committee shall be deliberated upon by the committee at least one
(1) week before the holding of such meetings.
(c) All meetings of the committee shall be held in the provincial capitol
or the city or municipal hall. The minutes of such meetings of the
committee and any decision made therein shall be duly recorded,
posted at a prominent place in the provincial capitol or the city or
municipal hall, and delivered by the most expedient means to
elective local officials concerned.
SECTION 38. Local Technical Committee. - (a) There is hereby created a local
technical committee in every province, city and municipality to provide
technical assistance to the local prequalification, bids and awards
committees. It shall be composed of the provincial, city or municipal
engineer, the local planning and development coordinator, and such other
officials designated by the local prequalification, bids and awards
committee.
(b) The chairman of the local technical committee shall be designated
by the local prequalification, bids and awards committee and shall
attend its meeting in order to present the reports and
recommendations of the local technical committee.
TITLE TWO. - ELECTIVE OFFICIALS
CHAPTER 1. - QALIFICATIONS AND ELECTION
SECTION 39. Qualifications. - (a) An elective local official must be a citizen of
the Philippines; a registered voter in the Barangay, municipality, city, or
province or, in the case of a member of the Sangguniang Panlalawigan,
Sangguniang Panlungsod, or Sanggunian bayan, the district where he
intends to be elected; a resident therein for at least one (1) year
immediately preceding the day of the election; and able to read and write
Filipino or any other local language or dialect.
(b) Candidates for the position of governor, vice- governor or member
of the Sangguniang Panlalawigan, or Mayor, vice-mayor or member

23
of the Sangguniang Panlungsod of highly urbanized cities must be
at least twenty-three (23) years of age on election day.
(c) Candidates for the position of Mayor or vice-mayor of independent
component cities, component cities, municipalities must be at least
twenty-one (21) years of age on election day.
(d) Candidates for the position of member of the Sangguniang
Panlungsod or Sangguniang bayan must be at least eighteen (18)
years of age on election day.
(e) Candidates for the position of Punong Barangay or member of the
Sangguniang Barangay must be at least eighteen (18) years of age
on election day.
(f) Candidates for the Sangguniang kabataan must be at least fifteen
(15) years of age but not more than twenty-one (21) years of age
on election day.
SECTION 40. Disqualifications. - The following persons are disqualified from
running for any elective local position:
(a) Those sentenced by final judgment for an offense involving moral
turpitude or for an offense punishable by one (1) year or more of
imprisonment, within two (2) years after serving sentence;
(b) Those removed from office as a result of an administrative case;
(c) Those convicted by final judgment for violating the oath of
allegiance to the Republic;
(d) Those with dual citizenship;
(e) Fugitives from justice in criminal or nonpolitical cases here or
abroad;
(f) Permanent residents in a foreign country or those who have
acquired the right to reside abroad and continue to avail of the
same right after the effectivity of this Code; and
(g) The insane or feeble-minded.
SECTION 41. Manner of Election. - (a) The governor, vice-governor, city Mayor,
city vice-mayor, municipal Mayor, municipal vice-mayor, and Punong
Barangay shall be elected at large in their respective units by the qualified
voters therein. However, the Sangguniang kabataan chairman for each

24
Barangay shall be elected by the registered voters of the katipunan ng
kabataan, as provided in this Code.
(b) The regular members of the Sangguniang Panlalawigan,
Sangguniang Panlungsod, and Sangguniang bayan shall be
elected by district, as may be provided for by law. Sangguniang
Barangay members shall be elected at large. The presidents of the
leagues of Sanggunian members of component cities and
municipalities shall serve as ex officio members of the
Sangguniang Panlalawigan concerned. The presidents of the liga
ng mga Barangay and the pederasyon ng mga Sangguniang
kabataan elected by their respective chapters, as provided in this
Code, shall serve as ex officio members of the Sangguniang
Panlalawigan, Sangguniang Panlungsod, and Sangguniang bayan.
(c) In addition thereto, there shall be one (1) sectoral representative
from the women, one (1) from the workers, and one (1) from any of
the following sectors: the urban poor, indigenous cultural
communities, disabled persons, or any other sector as may be
determined by the Sanggunian concerned within ninety (90) days
prior to the holding of the next local elections, as may be provided
for by law. The Comelec shall promulgate the rules and regulations
to effectively provide for the election of such sectoral
representatives.
SECTION 42. Date of Election. - Unless otherwise provided by law, the
elections for local officials shall be held every three (3) years on the
second Monday of May.
SECTION 43. Term of Office. - (a) The term of office of all local elective officials
elected after the effectivity of this Code shall be three (3) years, starting
from noon of June 30, 1992 or such date as may be provided for by law,
except that of elective Barangay officials: Provided, That all local officials
first elected during the local elections immediately following the ratification
of the 1987 Constitution shall serve until noon of June 30, 1992.
(b) No local elective official shall serve for more than three (3)
consecutive terms in the same position. Voluntary renunciation of
the office for any length of time shall not be considered as an
interruption in the continuity of service for the full term for which the
elective official concerned was elected.
(c) The term of office of Barangay officials and members of the
Sangguniang kabataan shall be for three (3) years, which shall
begin after the regular election of Barangay officials on the second
Monday of May 1994.

25
CHAPTER 2. - VACANCIES AND SUCCESSION
SECTION 44. Permanent Vacancies in the Offices of the Governor, Vice-
Governor, Mayor, and Vice-Mayor. - If a permanent vacancy occurs in
the office of the governor or Mayor, the vice-governor or vice-mayor
concerned shall become the governor or Mayor. If a permanent vacancy
occurs in the offices of the governor, vice-governor, Mayor, or vice-mayor,
the highest ranking Sanggunian member or, in case of his permanent
inability, the second highest ranking Sanggunian member, shall become
the governor, vice-governor, Mayor or vice-mayor, as the case may be.
Subsequent vacancies in the said office shall be filled automatically by the
other Sanggunian members according to their ranking as defined herein.
(b) If a permanent vacancy occurs in the office of the Punong
Barangay, the highest ranking Sanggunian Barangay member or, in
case of his permanent inability, the second highest ranking
Sanggunian member, shall become the Punong Barangay.
(c) A tie between or among the highest ranking Sanggunian members
shall be resolved by the drawing of lots.
(d) The successors as defined herein shall serve only the unexpired
terms of their predecessors. For purposes of this Chapter, a
permanent vacancy arises when an elective local official fills a
higher vacant office, refuses to assume office, fails to qualify, dies,
is removed from office, voluntarily resigns, or is otherwise
permanently incapacitated to discharge the functions of his office.
For purposes of succession as provided in this Chapter, ranking in
the Sanggunian shall be determined on the basis of the proportion
of votes obtained by each winning candidate to the total number of
registered voters in each district in the immediately preceding local
election.
SECTION 45. Permanent Vacancies in the Sanggunian.
(a) Permanent vacancies in the Sanggunian where automatic
successions provided above do not apply shall be filled by
appointment in the following manner:
(1) The President, through the Executive Secretary, in the case
of the Sangguniang Panlalawigan and the Sangguniang
Panlungsod of highly urbanized cities and independent
component cities;

26
(2) The governor, in the case of the Sangguniang Panlungsod of
component cities and the Sangguniang bayan;
(3) The city or municipal Mayor, in the case of Sangguniang
Barangay, upon recommendation of the Sangguniang
Barangay concerned.
(b) Except for the Sangguniang Barangay, only the nominee of the
political party under which the Sanggunian member concerned had
been elected and whose elevation to the position next higher in
rank created the last vacancy in the Sanggunian shall be appointed
in the manner hereinabove provided. The appointee shall come
from the same political party as that of the Sanggunian member
who caused the vacancy and shall serve the unexpired term of the
vacant office. In the appointment herein mentioned, a nomination
and a certificate of membership of the appointee from the highest
official of the political party concerned are conditions sine qua non,
and any appointment without such nomination and certification shall
be null and void ab initio and shall be a ground for administrative
action against the official responsible therefor.
(c) In case the permanent vacancy is caused by a Sanggunian
member who does not belong to any political party, the local chief
executive shall, upon recommendation of the Sanggunian
concerned, appoint a qualified person to fill the vacancy.
(d) In case of vacancy in the representation of the youth and the
Barangay in the Sanggunian, said vacancy shall be filled
automatically by the official next in rank of the organization
concerned.
SECTION 46. Temporary Vacancy in the Office of the Local Chief Executive.
- (a) When the governor, city or municipal Mayor, or Punong Barangay is
temporarily incapacitated to perform his duties for physical or legal
reasons such as, but not limited to, leave of absence, travel abroad, and
suspension from office, the vice-governor, city or municipal vice-mayor, or
the highest ranking Sangguniang Barangay member shall automatically
exercise the powers and perform the duties and functions of the local chief
executive concerned, except the power to appoint, suspend, or dismiss
employees which can only be exercised if the period of temporary
incapacity exceeds thirty (30) working days.
(b) Said temporary incapacity shall terminate upon submission to the
appropriate Sanggunian of a written declaration by the local chief
executive concerned that he has reported back to office. In cases
where the temporary incapacity is due to legal causes, the local

27
chief executive concerned shall also submit necessary documents
showing that said legal causes no longer exist.
(c) When the incumbent local chief executive is traveling within the
country but outside his territorial jurisdiction for a period not
exceeding three (3) consecutive days, he may designate in writing
the officer-in-charge of the said office. Such authorization shall
specify the powers and functions that the local official concerned
shall exercise in the absence of the local chief executive except the
power to appoint, suspend, or dismiss employees.
(d) In the event, however, that the local chief executive concerned fails
or refuses to issue such authorization, the vice-governor, the city or
municipal vice-mayor, or the highest ranking Sangguniang
Barangay member, as the case may be, shall have the right to
assume the powers, duties, and functions of the said office on the
fourth (4th) day of absence of the said local chief executive, subject
to the limitations provided in subsection (c) hereof.
(e) Except as provided above, the local chief executive shall in no case
authorize any local official to assume the powers, duties, and
functions of the office, other than the vice-governor, the city or
municipal vice- Mayor, or the highest ranking Sangguniang
Barangay member, as the case may be.
SECTION 47. Approval of Leaves of Absence. - (a) Leaves of absence of local
elective officials shall be approved as follows:
(1) Leaves of absence of the governor and the Mayor of a highly
urbanized city or an independent component city shall be
approved by the President or his duly authorized
representative;
(2) Leaves of absence of a vice-governor or a city or municipal
vice-mayor shall be approved by the local chief executive
concerned: Provided, That the leaves of absence of the
members of the Sanggunian and its employees shall be
approved by the vice-governor or city or municipal vice-
mayor concerned;
(3) Leaves of absence of the component city or municipal Mayor
shall be approved by the governor; and
(4) Leaves of absence of a Punong Barangay shall be approved
by the city or municipal mayor: Provided, That leaves of

28
absence of Sangguniang Barangay members shall be
approved by the Punong Barangay.
(b) Whenever the application for leave of absence hereinabove
specified is not acted upon within five (5) working days after receipt
thereof, the application for leave of absence shall be deemed
approved.
CHAPTER 3. - LOCAL LEGISLATION
SECTION 48. Local Legislative Power. - Local legislative power shall be
exercised by the Sangguniang Panlalawigan for the province; the
Sangguniang Panlungsod for the city; the Sangguniang bayan for the
municipality; and the Sangguniang Barangay for the Barangay.
SECTION 49. Presiding Officer. - (a) The vice-governor shall be the presiding
officer of the Sangguniang Panlalawigan; the city vice-mayor, of the
Sangguniang Panlungsod; the municipal vice-mayor, of the Sangguniang
bayan; and the Punong Barangay, of the Sangguniang Barangay. The
presiding officer shall vote only to break a tie.
(b) In the event of the inability of the regular Presiding officer to preside
at a Sanggunian session, the members present and constituting a
quorum shall elect from among themselves a temporary presiding
officer. He shall certify within ten (10) days from the passage of
ordinances enacted and resolutions adopted by the Sanggunian in
the session over which he temporarily presided.
SECTION 50. Internal Rules of Procedure. - (a) On the first regular session
following the election of its members and within ninety (90) days
thereafter, the Sanggunian concerned shall adopt or update its existing
rules of procedure.
(b) The rules of procedure shall provide for the following:
(1) The organization of the Sanggunian and the election of its
officers as well as the creation of standing committees which
shall include, but shall not be limited to, the committees on
appropriations, women and family, human rights, youth and
sports development, environmental protection, and
cooperatives; the general jurisdiction of each committee; and
the election of the chairman and members of each
committee;
(2) The order and calendar of business for each session;

29
(3) The legislative process;
(4) The parliamentary procedures which include the conduct of
members during sessions;
(5) The discipline of members for disorderly behavior and
absences without justifiable cause for four (4) consecutive
sessions, for which they may be censured, reprimanded, or
excluded from the session, suspended for not more than
sixty (60) days, or expelled: Provided, That the penalty of
suspension or expulsion shall require the concurrence of at
least two-thirds (2/3) vote of all the Sanggunian members:
Provided, further, That a member convicted by final
judgment to imprisonment of at least one (1) year for any
crime involving moral turpitude shall be automatically
expelled from the Sanggunian; and
(6) Such other rules as the Sanggunian may adopt.
SECTION 51. Full Disclosure of Financial and Business Interests of
Sanggunian Members. - (a) Every Sanggunian member shall, upon
assumption to office, make a full disclosure of his business and financial
interests. He shall also disclose any business, financial, or professional
relationship or any relation by affinity or consanguinity within the fourth
civil degree, which he may have with any person, firm, or entity affected by
any ordinance or resolution under consideration by the Sanggunian of
which he is a member, which relationship may result in conflict of interest.
Such relationship shall include:
(1) Ownership of stock or capital, or investment, in the entity or
firm to which the ordinance or resolution may apply; and
(2) Contracts or agreements with any person or entity which the
ordinance or resolution under consideration may affect. In
the absence of a specific constitutional or statutory provision
applicable to this situation, "conflict of interest" refers in
general to one where it may be reasonably deduced that a
member of a Sanggunian may not act in the public interest
due to some private, pecuniary, or other personal
considerations that may tend to affect his judgment to the
prejudice of the service or the public.
(b) The disclosure required under this Act shall be made in writing and
submitted to the secretary of the Sanggunian or the secretary of the
committee of which he is a member. The disclosure shall, in all

30
cases, form part of the record of the proceedings and shall be
made in the following manner:
(1) Disclosure shall be made before the member participates in
the deliberations on the ordinance or resolution under
consideration: Provided, That, if the member did not
participate during the deliberations, the disclosure shall be
made before voting on the ordinance or resolution on second
and third readings; and
(2) Disclosure shall be made when a member takes a position
or makes a privilege speech on a matter that may affect the
business interest, financial connection, or professional
relationship described herein.
SECTION 52. Sessions. - (a) On the first day of the session immediately
following the election of its members, the Sanggunian shall, by resolution,
fix the day, time, and place of its regular sessions. The minimum number
of regular sessions shall be once a week for the Sangguniang
Panlalawigan, Sangguniang Panlungsod, and Sangguniang bayan, and
twice a month for the Sangguniang Barangay.
(b) When public interest so demands, special sessions may be called
by the local chief executive or by a majority of the members of the
Sanggunian.
(c) All Sanggunian sessions shall be open to the public unless a
closed-door session is ordered by an affirmative vote of a majority
of the members present, there being a quorum, in the public
interest or for reasons of security, decency, or morality. No two (2)
sessions, regular or special, may be held in a single day.
(d) In the case of special sessions of the Sanggunian, a written notice
to the members shall be served personally at the member's usual
place of residence at least twenty- four (24) hours before the
special session is held. Unless otherwise concurred in by two-thirds
(2/3) vote of the Sanggunian members present, there being a
quorum, no other matters may be considered at a special session
except those stated in the notice.
(e) Each Sanggunian shall keep a journal and record of its proceedings
which may be published upon resolution of the Sanggunian
concerned.
SECTION 53. Quorum. - (a) A majority of all the members of the Sanggunian
who have been elected and qualified shall constitute a quorum to transact

31
official business. Should a question of quorum be raised during a session,
the presiding officer shall immediately proceed to call the roll of the
members and thereafter announce the results.
(b) Where there is no quorum, the presiding officer may declare a
recess until such time as a quorum is constituted, or a majority of
the members present may adjourn from day to day and may
compel the immediate attendance of any member absent without
justifiable cause by designating a member of the Sanggunian, to be
assisted by a member or members of the police force assigned in
the territorial jurisdiction of the local government unit concerned, to
arrest the absent member and present him at the session.
(c) If there is still no quorum despite the enforcement of the
immediately preceding subsection, no business shall be transacted.
The presiding officer, upon proper motion duly approved by the
members present, shall then declare the session adjourned for lack
of quorum.
SECTION 54. Approval of Ordinances. - (a) Every ordinance enacted by the
Sangguniang Panlalawigan, Sangguniang Panlungsod, or Sangguniang
bayan shall be presented to the provincial governor or city or municipal
mayor, as the case may be. If the local chief executive concerned
approves the same, he shall affix his signature on each and every page
thereof; otherwise, he shall veto it and return the same with his objections
to the Sanggunian, which may proceed to reconsider the same. The
Sanggunian concerned may override the veto of the local chief executive
by two-thirds (2/3) vote of all its members, thereby making the ordinance
or resolution effective for all legal intents and purposes.
(b) The veto shall be communicated by the local chief executive
concerned to the Sanggunian within fifteen (15) days in the case of
a province, and ten (10) days in the case of a city or a municipality;
otherwise, the ordinance shall be deemed approved as if he had
signed it.
(c) ordinances enacted by the Sangguniang Barangay shall, upon
approval by the majority of all its members, be signed by the
Punong Barangay.
SECTION 55. Veto Power of the Local Chief Executive. - (a) The local chief
executive may veto any ordinance of the Sangguniang Panlalawigan,
Sangguniang Panlungsod, or Sangguniang bayan on the ground that it is
ultra vires or prejudicial to the public welfare, stating his reasons therefor
in writing.

32
(b) The local chief executive, except the Punong Barangay, shall have
the power to veto any particular item or items of an appropriations
ordinance, an ordinance or resolution adopting a local development
plan and public investment program, or an ordinance directing the
payment of money or creating liability. In such a case, the veto shall
not affect the item or items which are not objected to. The vetoed
item or items shall not take effect unless the Sanggunian overrides
the veto in the manner herein provided; otherwise, the item or items
in the appropriations ordinance of the previous year corresponding
to those vetoed, if any, shall be deemed reenacted.
(c) The local chief executive may veto an ordinance or resolution only
once. The Sanggunian may override the veto of the local chief
executive concerned by two-thirds (2/3) vote of all its members,
thereby making the ordinance effective even without the approval of
the local chief executive concerned.
SECTION 56. Review of Component City and Municipal Ordinances or
Resolutions by the Sangguniang Panlalawigan. - (a) Within three (3)
days after approval, the secretary to the Sanggunian Panlungsod or
Sangguniang bayan shall forward to the Sangguniang Panlalawigan for
review, copies of approved ordinances and the resolutions approving the
local development plans and public investment programs formulated by
the local development councils.
(b) Within thirty (30) days after receipt of copies of such ordinances
and resolutions, the Sangguniang Panlalawigan shall examine the
documents or transmit them to the provincial attorney, or if there be
none, to the provincial prosecutor for prompt examination. The
provincial attorney or provincial prosecutor shall, within a period of
ten (10) days from receipt of the documents, inform the
Sangguniang Panlalawigan in writing of his comments or
recommendations, which may be considered by the Sangguniang
Panlalawigan in making its decision.
(c) If the Sangguniang Panlalawigan finds that such an ordinance or
resolution is beyond the power conferred upon the Sangguniang
Panlungsod or Sangguniang bayan concerned, it shall declare such
ordinance or resolution invalid in whole or in part. The Sangguniang
Panlalawigan shall enter its action in the minutes and shall advise
the corresponding city or municipal authorities of the action it has
taken.
(d) If no action has been taken by the Sangguniang Panlalawigan
within thirty (30) days after submission of such an ordinance or

33
resolution, the same shall be presumed consistent with law and
therefore valid.
SECTION 57. Review of Barangay Ordinances by the Sangguniang
Panlungsod or Sangguniang Bayan. - (a) Within ten (10) days after its
enactment, the Sangguniang Barangay shall furnish copies of all
Barangay ordinances to the Sangguniang Panlungsod or Sangguniang
bayan concerned for review as to whether the ordinance is consistent with
law and city or municipal ordinances.
(b) If the Sangguniang Panlungsod or Sangguniang bayan, as the case
may be, fails to take action on Barangay ordinances within thirty
(30) days from receipt thereof, the same shall be deemed
approved.
(c) If the Sangguniang Panlungsod or Sangguniang bayan, as the case
may be, finds the Barangay ordinances inconsistent with law or city
or municipal ordinances, the Sanggunian concerned shall, within
thirty (30) days from receipt thereof, return the same with its
comments and recommendations to the Sangguniang Barangay
concerned for adjustment, amendment, or modification; in which
case, the effectivity of the Barangay ordinance is suspended until
such time as the revision called for is effected.
SECTION 58. Enforcement of Disapproved ordinances or Resolutions. - Any
attempt to enforce any ordinance or any resolution approving the local
development plan and public investment program, after the disapproval
thereof, shall be sufficient ground for the suspension or dismissal of the
official or employee concerned.
SECTION 59. Effectivity of Ordinances or Resolutions. (a) Unless otherwise
stated in the ordinance or the resolution approving the local development
plan and public investment program, the same shall take effect after ten
(10) days from the date a copy thereof is posted in a bulletin board at the
entrance of the provincial capitol or city, municipal, or Barangay hall, as
the case may be, and in at least two (2) other conspicuous places in the
local government unit concerned.
(b) The secretary to the Sanggunian concerned shall cause the posting
of an ordinance or resolution in the bulletin board at the entrance of
the provincial capitol and the city, municipal, or Barangay hall in at
least two (2) conspicuous places in the local government unit
concerned not later than five (5) days after approval thereof.
The text of the ordinance or resolution shall be disseminated and
posted in Filipino or English and in the language or dialect

34
understood by the majority of the people in the local government
unit concerned, and the secretary to the Sanggunian shall record
such fact in a book kept for the purpose, stating the dates of
approval and posting.
(c) The gist of all ordinances with penal sanctions shall be published in
a newspaper of general circulation within the province where the
local legislative body concerned belongs. In the absence of any
newspaper of general circulation within the province, posting of
such ordinances shall be made in all municipalities and cities of the
province where the Sanggunian of origin is situated.
(d) In the case of highly urbanized cities, the main features of the
ordinance or resolution duly enacted or adopted shall, in addition to
being posted, be published once in a local newspaper of general
circulation within the city: Provided, That in the absence thereof the
ordinance or resolution shall be published in any newspaper of
general circulation.
CHAPTER 4. - DISCIPLINARY ACTIONS
SECTION 60. Grounds for Disciplinary Actions. - An elective local official may
be disciplined, suspended, or removed from office on any of the following
grounds:
(a) Disloyalty to the Republic of the Philippines;
(b) Culpable violation of the Constitution;
(c) Dishonesty, oppression, misconduct in office, gross negligence, or
dereliction of duty;
(d) Commission of any offense involving moral turpitude or an offense
punishable by at least prision mayor;
(e) Abuse of authority;
(f) Unauthorized absence for fifteen (15) consecutive working days,
except in the case of members of the Sangguniang Panlalawigan,
Sangguniang Panlungsod, Sangguniang bayan, and Sangguniang
Barangay;
(g) Application for, or acquisition of, foreign citizenship or residence or
the status of an immigrant of another country; and

35
(h) Such other grounds as may be provided in this Code and other
laws. An elective local official may be removed from office on the
grounds enumerated above by order of the proper court.
SECTION 61. Form and Filing of Administrative Complaints. - A verified
complaint against any erring local elective official shall be prepared as
follows:
(a) A complaint against any elective official of a province, a highly
urbanized city, an independent component city or component city
shall be filed before the Office of the President;
(b) A complaint against any elective official of a municipality shall be
filed before the Sangguniang Panlalawigan whose decision may be
appealed to the Office of the President; and
(c) A complaint against any elective Barangay official shall be filed
before the Sangguniang Panlungsod or Sangguniang bayan
concerned whose decision shall be final and executory.
SECTION 62. Notice of Hearing. - (a) Within seven (7) days after the
administrative complaint is filed, the Office of the President or the
Sanggunian concerned, as the case may be, shall require the respondent
to submit his verified answer within fifteen (15) days from receipt thereof,
and commence the investigation of the case within ten (10) days after
receipt of such answer of the respondent.
(b) When the respondent is an elective official of a province or highly
urbanized city, such hearing and investigation shall be conducted in
the place where he renders or holds office. For all other local
elective officials, the venue shall be the place where the
Sanggunian concerned is located.
(c) However, no investigation shall be held within ninety (90) days
immediately prior to any local election, and no preventive
suspension shall be imposed within the said period. If preventive
suspension has been imposed prior to the 90-day period
immediately preceding local election, it shall be deemed
automatically lifted upon the start of aforesaid period.
SECTION 63. Preventive Suspension.
(a) Preventive suspension may be imposed:

36
(1) By the President, if the respondent is an elective official of a
province, a highly urbanized or an independent component
city;
(2) By the governor, if the respondent is an elective official of a
component city or municipality; or
(3) By the mayor, if the respondent is an elective official of the
Barangay.
(b) Preventive suspension may be imposed at any time after the issues
are joined, when the evidence of guilt is strong, and given the
gravity of the offense, there is great probability that the continuance
in office of the respondent could influence the witnesses or pose a
threat to the safety and integrity of the records and other evidence:
Provided, That, any single preventive suspension of local elective
officials shall not extend beyond sixty (60) days: Provided, further,
That in the event that several administrative cases are filed against
an elective official, he cannot be preventively suspended for more
than ninety (90) days within a single year on the same ground or
grounds existing and known at the time of the first suspension.
(c) Upon expiration of the preventive suspension, the suspended
elective official shall be deemed reinstated in office without
prejudice to the continuation of the proceedings against him, which
shall be terminated within one hundred twenty (120) days from the
time he was formally notified of the case against him. However, if
the delay in the proceedings of the case is due to his fault, neglect,
or request, other than the appeal duly filed, the duration of such
delay shall not be counted in computing the time of termination of
the case.
(d) Any abuse of the exercise of the power of preventive suspension
shall be penalized as abuse of authority.
SECTION 64. Salary of Respondent Pending Suspension. - The respondent
official preventively suspended from office shall receive no salary or
compensation during such suspension; but, upon subsequent exoneration
and reinstatement, he shall be paid full salary or compensation including
such emoluments accruing during such suspension.
SECTION 65. Rights of Respondent - The respondent shall be accorded full
opportunity to appear and defend himself in person or by counsel, to
confront and cross-examine the witnesses against him, and to require the
attendance of witnesses and the production of documentary evidence in

37
his favor through the compulsory process of subpoena or subpoena duces
tecum.
SECTION 66. Form and Notice of Decision. - (a) The investigation of the case
shall be terminated within ninety (90) days from the start thereof. Within
thirty (30) days after the end of the investigation, the Office of the
President or the Sanggunian concerned shall render a decision in writing
stating clearly and distinctly the facts and the reasons for such decision.
Copies of said decision shall immediately be furnished the respondent and
all interested parties.
(b) The penalty of suspension shall not exceed the unexpired term of
the respondent or a period of six (6) months for every
administrative offense, nor shall said penalty be a bar to the
candidacy of the respondent so suspended as long as he meets the
qualifications required for the office.
(c) The penalty of removal from office as a result of an administrative
investigation shall be considered a bar to the candidacy of the
respondent for any elective position.
SECTION 67. Administrative Appeals. - Decisions in administrative cases may,
within thirty (30) days from receipt thereof, be appealed to the following:
(a) The Sangguniang Panlalawigan, in the case of decisions of the
Sangguniang Panlungsod of component cities and the
Sangguniang bayan; and
(b) The Office of the President, in the case of decisions of the
Sangguniang Panlalawigan and the Sangguniang Panlungsod of
highly urbanized cities and independent component cities.
Decisions of the Office of the President shall be final and executory.
SECTION 68. Execution Pending Appeal. - An appeal shall not prevent a
decision from becoming final or executory. The respondent shall be
considered as having been placed under preventive suspension during the
pendency of an appeal in the event he wins such appeal. In the event the
appeal results in an exoneration, he shall be paid his salary and such
other emoluments during the pendency of the appeal.
CHAPTER 5. - RECALL
SECTION 69. By Whom Exercised. - The power of recall for loss of confidence
shall be exercised by the registered voters of a local government unit to
which the local elective official subject to such recall belongs.

38
SECTION 70. Initiation of the Recall Process. - (a) Recall may be initiated by a
preparatory recall assembly or by the registered voters of the local
government unit to which the local elective official subject to such recall
belongs.
(b) There shall be a preparatory recall assembly in every province, city,
district, and municipality which shall be composed of the following:
(1) Provincial level. - All mayors, vice-mayors, and Sanggunian
members of the municipalities and component cities;
(2) City level. - All Punong Barangay and Sangguniang
Barangay members in the city;
(3) Legislative District level. - In cases where Sangguniang
Panlalawigan members are elected by district, all elective
municipal officials in the district; and in cases where
Sangguniang Panlungsod members are elected by district,
all elective Barangay officials in the district; and
(4) Municipal level. - All Punong Barangay and Sangguniang
Barangay members in the municipality.
(c) A majority of all the preparatory recall assembly members may
convene in session in a public place and initiate a recall proceeding
against any elective official in the local government unit concerned.
Recall of provincial, city, or municipal officials shall be validly
initiated through a resolution adopted by a majority of all the
members of the preparatory recall assembly concerned during its
session called for the purpose.
(d) Recall of any elective provincial, city, municipal, or Barangay official
may also be validly initiated upon petition of at least twenty-five
percent (25%) of the total number of registered voters in the local
government unit concerned during the election in which the local
official sought to be recalled was elected.
(1) A written petition for recall duly signed before the election
registrar or his representative, and in the presence of a
representative of the petitioner and a representative of the
official sought to be recalled, and in a public place in the
province, city, municipality, or Barangay, as the case may
be, shall be filed with the Comelec through its office in the
local government unit concerned. The Comelec or its duly
authorized representative shall cause the publication of the
petition in a public and conspicuous place for a period of not

39
less than ten (10) days nor more than twenty (20) days, for
the purpose of verifying the authenticity and genuineness of
the petition and the required percentage of voters.
(2) Upon the lapse of the aforesaid period, the Comelec or its
duly authorized representative shall announce the
acceptance of candidates to the position and thereafter
prepare the list of candidates which shall include the name
of the official sought to be recalled.
SECTION 71. Election on Recall. - Upon the filing of a valid resolution or
petition for recall with the appropriate local office of the Comelec, the
Commission or its duly authorized representative shall set the date of the
election on recall, which shall not be later than thirty (30) days after the
filing of the resolution or petition for recall in the case of the Barangay,
city, or municipal officials, and forty-five (45) days in the case of provincial
officials. The official or officials sought to be recalled shall automatically be
considered as duly registered candidate or candidates to the pertinent
positions and, like other candidates, shall be entitled to be voted upon.
SECTION 72. Effectivity of Recall. - The recall of an elective local official shall
be effective only upon the election and proclamation of a successor in the
person of the candidate receiving the highest number of votes cast during
the election on recall. Should the official sought to be recalled receive the
highest number of votes, confidence in him is thereby affirmed, and he
shall continue in office.
SECTION 73. Prohibition from Resignation. - The elective local official sought
to be recalled shall not be allowed to resign while the recall process is in
progress.
SECTION 74. Limitations on Recall. - (a) Any elective local official may be the
subject of a recall election only once during his term of office for loss of
confidence.
(b) No recall shall take place within one (1) year from the date of the
official's assumption to office or one (1) year immediately preceding
a regular local election.
SECTION 75. Expenses Incident to Recall Elections. - All expenses incident
to recall elections shall be borne by the Comelec. For this purpose, there
shall be included in the annual General Appropriations Act a contingency
fund at the disposal of the Comelec for the conduct of recall elections.

40
TITLE THREE. - HUMAN RESOURCES AND DEVELOPMENT
SECTION 76. Organizational Structure and Staffing Pattern. - Every local
government unit shall design and implement its own organizational
structure and staffing pattern taking into consideration its service
requirements and financial capability, subject to the minimum standards
and guidelines prescribed by the Civil Service Commission.
SECTION 77. Responsibility for Human Resources and Development. - The
chief executive of every local government unit shall be responsible for
human resources and development in his unit and shall take all personnel
actions in accordance with the Constitutional provisions on civil service,
pertinent laws, and rules and regulations thereon, including such policies,
guidelines and standards as the Civil Service Commission may establish:
Provided, That the local chief executive may employ emergency or casual
employees or laborers paid on a daily wage or piecework basis and hired
through job orders for local projects authorized by the Sanggunian
concerned, without need of approval or attestation by the Civil Service
Commission: Provided, further, That the period of employment of
emergency or casual laborers as provided in this Section shall not exceed
six (6) months.
The Joint Commission on Local Government Personnel Administration
organized pursuant to Presidential Decree Numbered Eleven Hundred
thirty-six (P.D. No. 1136) is hereby abolished and its personnel , records,
equipment and other assets transferred to the appropriate office in the
Civil Service Commission.
SECTION 78. Civil Service Law, Rules and Regulations, and Other Related
Issuances. - All matters pertinent to human resources and development
in local government units shall be governed by the civil service law and
such rules and regulations and other issuances promulgated pursuant
thereto, unless otherwise specified in this Code.
SECTION 79. Limitation on Appointments. - No person shall be appointed in
the career service of the local government if he is related within the fourth
civil degree of consanguinity or affinity to the appointing or recommending
authority.
SECTION 80. Public Notice of Vacancy; Personnel Selection Board. - (a)
Whenever a local chief executive decides to fill a vacant career position,
there shall be posted notices of the vacancy in at least three (3)
conspicuous public places in the local government unit concerned for a
period of not less than fifteen (15) days.

41
(b) There shall be established in every province, city or municipality a
personnel selection board to assist the local chief executive in the
judicious and objective selection of personnel for employment as
well as for promotion, and in the formulation of such policies as
would contribute to employee welfare.
(c) The personnel selection board shall be headed by the local chief
executive, and its members shall be determined by resolution of the
Sanggunian concerned. A representative of the Civil Service
Commission, if any, and the personnel officer of the local
government unit concerned shall be ex officio members of the
board.
SECTION 81. Compensation of Local Officials and Employees. - The
compensation of local officials and personnel shall be determined by the
Sanggunian concerned: Provided, That the increase in compensation of
elective local officials shall take effect only after the terms of office of
those approving such increase shall have expired: Provided, further, That
the increase in compensation of the appointive officials and employees
shall take effect as provided in the ordinance authorizing such increase:
Provided, however, That said increases shall not exceed the limitations on
budgetary allocations for personal services provided under Title Five,
Book II of this Code: Provided, finally, That such compensation may be
based upon the pertinent provisions of Republic Act Numbered Sixty-
seven fifty-eight (R.A. No. 6758), otherwise known as the "Compensation
and Position Classification Act of 1989".
The Punong Barangay, the Sangguniang Barangay members, the
Sangguniang kabataan chairman, the Barangay treasurer, and the
Barangay secretary shall be entitled to such compensation, allowances,
emoluments, and such other privileges as provided under Title One, Book
III of this Code.
Elective local officials shall be entitled to the same leave privileges as
those enjoyed by appointive local officials, including the cumulation and
commutation thereof.
SECTION 82. Resignation of Elective Local Officials. - (a) Resignations by
elective local officials shall be deemed effective only upon acceptance by
the following authorities:
(1) The President, in the case of governors, vice- governors,
and mayors and vice-mayors of highly urbanized cities and
independent component cities;

42
(2) The governor, in the case of municipal mayors, municipal
vice-mayors, city mayors and city vice-mayors of component
cities;
(3) The Sanggunian concerned, in the case of Sanggunian
members; and
(4) The city or municipal mayor, in the case of Barangay
officials.
(b) Copies of the resignation letters of elective local officials, together
with the action taken by the aforesaid authorities, shall be furnished
the Department of Interior and Local Government.
(c) The resignation shall be deemed accepted if not acted upon by the
authority concerned within fifteen (15) working days from receipt
thereof.
(d) Irrevocable resignations by Sangguniang members shall be
deemed accepted upon presentation before an open session of the
Sanggunian concerned and duly entered in its records: Provided,
however, That this subsection does not apply to Sanggunian
members who are subject to recall elections or to cases where
existing laws prescribe the manner of acting upon such
resignations.
SECTION 83. Grievance Procedure. - In every local government unit, the local
chief executive shall establish a procedure to inquire into, act upon,
resolve or settle complaints and grievances presented by local
government employees.
SECTION 84. Administrative Discipline. - Investigation and adjudication of
administrative complaints against appointive local officials and employees
as well as their suspension and removal shall be in accordance with the
civil service law and rules and other pertinent laws. The results of such
administrative investigations shall be reported to the Civil Service
Commission.
SECTION 85. Preventive Suspension of Appointive Local Officials and
Employees. - (a) The local chief executives may preventively suspend for
a period not exceeding sixty (60) days any subordinate official or
employee under his authority pending investigation if the charge against
such official or employee involves dishonesty, oppression or grave
misconduct or neglect in the performance of duty, or if there is reason to
believe that the respondent is guilty of the charges which would warrant
his removal from the service.

43
(b) Upon expiration of the preventive suspension, the suspended
official or employee shall be automatically reinstated in office
without prejudice to the continuation of the administrative
proceedings against him until its termination. If the delay in the
proceedings of the case is due to the fault, neglect or request of the
respondent, the time of the delay shall not be counted in computing
the period of suspension herein provided.
SECTION 86. Administrative Investigation. - In any local government unit,
administrative investigation may be conducted by a person or a committee
duly authorized by the local chief executive. Said person or committee
shall conduct hearings on the cases brought against appointive local
officials and employees and submit their findings and recommendations to
the local chief executive concerned within fifteen (15) days from the
conclusion of the hearings. The administrative cases herein mentioned
shall be decided within ninety (90) days from the time the respondent is
formally notified of the charges.
SECTION 87. Disciplinary Jurisdiction. - Except as otherwise provided by law,
the local chief executive may impose the penalty of removal from service,
demotion in rank, suspension for not more than one (1) year without pay,
fine in an amount not exceeding six (6) months' salary, or reprimand and
otherwise discipline subordinate officials and employees under his
jurisdiction. If the penalty imposed is suspension without pay for not more
than thirty (30) days, his decision shall be final. If the penalty imposed is
heavier than suspension of thirty (30) days, the decision shall be
appealable to the Civil Service Commission, which shall decide the appeal
within thirty (30) days from receipt thereof.
SECTION 88. Execution Pending Appeal. - An appeal shall not prevent the
execution of a decision of removal or suspension of a respondent-
appellant. In case the respondent-appellant is exonerated, he shall be
reinstated to his position with all the rights and privileges appurtenant
thereto from the time he had been deprived thereof.
SECTION 89. Prohibited Business and Pecuniary Interest. - (a) It shall be
unlawful for any local government official or employee, directly or
indirectly, to:
(1) Engage in any business transaction with the local
government unit in which he is an official or employee or
over which he has the power of supervision, or with any of its
authorized boards, officials, agents, or attorneys, whereby
money is to be paid, or property or any other thing of value is

44
to be transferred, directly or indirectly, out of the resources of
the local government unit to such person or firm;
(2) Hold such interests in any cockpit or other games licensed
by a local government unit.
(3) Purchase any real estate or other property forfeited in favor
of such local government unit for unpaid taxes or
assessment, or by virtue of a legal process at the instance of
the said local government unit.
(4) Be a surety for any person contracting or doing business
with the local government unit for which a surety is required;
and
(5) Possess or use any public property of the local government
unit for private purposes.
(b) All other prohibitions governing the conduct of national public
officers relating to prohibited business and pecuniary interest so
provided for under Republic Act Numbered Sixty-seven thirteen (R.
A. No. 6713) otherwise known as the "Code of Conduct and Ethical
Standards for Public Officials and Employees" and other laws shall
also be applicable to local government officials and employees.
SECTION 90. Practice of Profession. - (a) All governors, city and municipal
mayors are prohibited from practicing their profession or engaging in any
occupation other than the exercise of their functions as local chief
executives.
(b) Sanggunian members may practice their professions, engage in
any occupation, or teach in schools except during session hours:
Provided, That Sanggunian members who are also members of the
Bar shall not:
(1) Appear as counsel before any court in any civil case wherein
a local government unit or any office, agency, or
instrumentality of the government is the adverse party;
(2) Appear as counsel in any criminal case wherein an officer or
employee of the national or local government is accused of
an offense committed in relation to his office.
(3) Collect any fee for their appearance in administrative
proceedings involving the local government unit of which he
is an official; and

45
(4) Use property and personnel of the government except when
the Sanggunian member concerned is defending the interest
of the government.
(c) Doctors of medicine may practice their profession even during
official hours of work only on occasions of emergency: Provided,
That the officials concerned do not derive monetary compensation
therefrom.
SECTION 91. Statement of Assets and Liabilities.- (a) Officials and
employees of local government units shall file sworn statements of assets,
liabilities and networth, lists of relatives within the fourth civil degree of
consanguinity or affinity in government service, financial and business
interests, and personnel data sheets as required by law.
SECTION 92. Oath of Office. - (a) All elective and appointive local officials and
employees shall, upon assumption to office, subscribe to an oath or
affirmation of office in the prescribed form. The oath or affirmation of
office shall be filed with the office of the local chief executive concerned.
A copy of the oath or affirmation of office of all elective and appointive
local officials and employees shall be preserved in the individual personal
records file under the custody of the personnel office, division, or section
of the local government unit concerned.
SECTION 93. Partisan Political Activity. - No local official or employee in the
career civil service shall engage directly or indirectly in any partisan
political activity or take part in any election, initiative, referendum,
plebiscite, or recall, except to vote, nor shall he use his official authority or
influence to cause the performance of any political activity by any person
or body. He may, however, express his views on current issues, or
mention the names of certain candidates for public office whom he
supports. Elective local officials may take part in partisan political and
electoral activities, but it shall be unlawful for them to solicit contributions
from their subordinates or subject these subordinates to any of the
prohibited acts under the Omnibus Election Code.
SECTION 94. Appointment of Elective and Appointive Local Officials;
Candidates Who Lost in Election. - (a) No elective or appointive local
official shall be eligible for appointment or designation in any capacity to
any public office or position during his tenure.
Unless otherwise allowed by law or by the primary functions of his
position, no elective or appointive local official shall hold any other
office or employment in the government or any subdivision, agency

46
or instrumentality thereof, including government-owned or -
controlled corporations or their subsidiaries.
(b) Except for losing candidates in Barangay elections, no candidate
who lost in any election shall, within one (1) year after such
election, be appointed to any office in the government or any
government-owned or -controlled corporations or in any of their
subsidiaries.
SECTION 95. Additional or Double Compensation. - No elective or appointive
local official or employee shall receive additional, double, or indirect
compensation, unless specifically authorized by law, nor accept without
the consent of Congress, any present, emoluments, office, or title of any
kind from any foreign government. Pensions or gratuities shall not be
considered as additional, double, or indirect compensation.
SECTION 96. Permission to Leave Station. - (a) Provincial, city, municipal,
and Barangay appointive officials going on official travel shall apply and
secure written permission from their respective local chief executives
before departure. The application shall specify the reasons for such
travel, and the permission shall be given or withheld based on
considerations of public interest, financial capability of the local
government unit concerned and urgency of the travel.
Should the local chief executive concerned fail to act upon such
application within four (4) working days from receipt thereof, it shall be
deemed approved.
(b) Mayors of component cities and municipalities shall secure the
permission of the governor concerned for any travel outside the
province.
(c) Local government officials traveling abroad shall notify their
respective Sanggunian: Provided, That when the period of travel
extends to more than three (3) months, during periods of
emergency or crisis or when the travel involves the use of public
funds, permission from the Office of the President shall be secured.
(d) Field officers of national agencies or offices assigned in provinces,
cities, and municipalities shall not leave their official stations without
giving prior written notice to the local chief executive concerned.
Such notice shall state the duration of travel and the name of the
officer whom he shall designate to act for and in his behalf during
his absence.

47
SECTION 97. Annual Report. - On or before March 31 of each year, every local
chief executive shall submit an annual report to the Sanggunian
concerned on the socioeconomic, political and peace and order
conditions, and other matters concerning the local government unit, which
shall cover the immediately preceding calendar year. A copy of the report
shall be forwarded to the Department of Interior and Local Government.
Component cities and municipalities shall likewise provide the
Sangguniang Panlalawigan copies of their respective annual reports.
TITLE FOUR. - LOCAL SCHOOL BOARDS
SECTION 98. Creation, Composition and Compensation. - (a) There shall be
established in every province, city, or municipality a provincial, city or
municipal school board, respectively.
(b) The composition of local school boards shall be as follows:
(1) The provincial school board shall be composed of the
governor and the division superintendent of schools as co-
chairmen; the chairman of the education committee of the
Sangguniang Panlalawigan, the provincial treasurer, the
representative of the pederasyon ng mga Sangguniang
kabataan in the Sangguniang Panlalawigan, the duly elected
president of the provincial federation of parents-teachers
association, the duly elected representative of the teachers'
organization in the province, and the duly elected
representative of the non-academic personnel of public
schools in the province, as members;
(2) The city school board shall be composed of the city mayor
and the city superintendent of schools as co-chairmen; the
chairman of the education committee of the Sangguniang
Panlungsod, the city treasurer, the representative of the
pederasyon ng mga Sangguniang kabataan in the
Sangguniang Panlungsod, the duly elected president of the
city federation of parents-teachers associations, the duly
elected representative of the teachers' organizations in the
city, and the duly elected representative of the non-academic
personnel of public schools in the city, as members; and
(3) The municipal school board shall be composed of the
municipal mayor and the district supervisor of schools as
co-chairmen; the chairman of the education committee of the
Sangguniang bayan, the municipal treasurer, the
representative of the pederasyon ng mga Sangguniang
kabataan in the Sangguniang bayan, the duly elected

48
president of the municipal federation of parents-teachers
associations, the duly elected representative of the teachers'
organizations in the municipality, and the duly elected
representative of the non-academic personnel of public
schools in the city, as members;
(c) In the event that a province or city has two (2) or more school
superintendents, and in the event that a municipality has two (2) or
more district supervisors, the co-chairman of the local school board
shall be determined as follows:
(1) The Department of Education, Culture and Sports shall
designate the co-chairman for the provincial and city
school boards; and
(2) The division superintendent of schools shall designate the
district supervisor who shall serve as co-chairman of the
municipal school board.
(d) The performance of the duties and responsibilities of the
abovementioned officials in their respective local school boards
shall not be delegated.
SECTION 99. Functions of Local School Boards. - The provincial, city or
municipal school board shall:
(a) Determine, in accordance with the criteria set by the Department of
Education, Culture and Sports, the annual supplementary
budgetary needs for the operation and maintenance of public
schools within the province, city or municipality, as the case may
be, and the supplementary local cost of meeting such needs, which
shall be reflected in the form of an annual school board budget
corresponding to its share in the proceeds of the special levy on
real property constituting the Special Education fund and such
other sources of revenue as this Code and other laws or
ordinances may provide;
(b) Authorize the provincial, city or municipal treasurer, as the case
may be, to disburse funds from the Special Education fund
pursuant to the budget prepared and in accordance with existing
rules and regulations;
(c) Serve as an advisory committee to the Sanggunian concerned on
educational matters such as, but not limited to, the necessity for
and the uses of local appropriations for educational purposes; and

49
(d) Recommend changes in the names of public schools within the
territorial jurisdiction of the local government unit for enactment by
the Sanggunian concerned.
The Department of Education, Culture and Sports shall consult the
local school board on the appointment of division superintendents,
district supervisors, school principals, and other school officials.
SECTION 100. Meetings and Quorum; Budget. - (a) The local school board
shall meet at least once a month or as often as may be necessary.
(b) Any of the co-chairmen may call a meeting. A majority of all its
members shall constitute a quorum. However, when both co-
chairmen are present in a meeting, the local chief executive
concerned, as a matter of protocol, shall be given preference to
preside over the meeting. The division superintendent, city
superintendent or district supervisor, as the case may be, shall
prepare the budget of the school board concerned. Such budget
shall be supported by programs, projects, and activities of the
school board for the ensuing fiscal year. The affirmative vote of the
majority of all its members shall be necessary to approve the
budget.
(c) The annual school board budget shall give priority to the following:
(1) Construction, repair, and maintenance of school buildings
and other facilities of public elementary and secondary
schools;
(2) Establishment and maintenance of extension classes where
necessary; and
(3) Sports activities at the division, district, municipal, and
Barangay levels.
SECTION 101. Compensation and Remuneration. - The co-chairmen and
members of the provincial, city or municipal school board shall perform
their duties as such without compensation or remuneration. Members
thereof who are not government officials or employees shall be entitled to
necessary traveling expenses and allowances chargeable against funds of
the local school board concerned, subject to existing accounting and
auditing rules and regulations.

50
TITLE FIVE. - LOCAL HEALTH BOARDS
SECTION 102. Creation and Composition. - (a) There shall be established a
local health board in every province, city or municipality. The composition
of the local health boards shall be as follows:
(1) The provincial health board shall be headed by the governor
as chairman, the provincial health officer as vice-chairman,
and the chairman of the committee on health of the
Sangguniang Panlalawigan, a representative from the
private sector or non-governmental organizations involved in
health services, and a representative of the Department of
Health in the province, as members;
(2) The city health board shall be headed by the city mayor as
chairman, the city health officer as vice-chairman, and the
chairman of the committee on health of the Sangguniang
Panlungsod, a representative from the private sector or non-
governmental organizations involved in health services, and
a representative of the Department of Health in the city, as
members; and
(3) The municipal health board shall be headed by the municipal
mayor as chairman, the municipal health officer as vice-
chairman, and the chairman of the committee on health of
the Sangguniang bayan, a representative from the private
sector or non-governmental organizations involved in health
services, and a representative of the Department of Health in
the municipality, as members;
(b) The functions of the local health board shall be:
(1) To propose to the Sanggunian concerned, in accordance
with standards and criteria set by the Department of Health,
annual budgetary allocations for the operation and
maintenance of health facilities and services within the
municipality, city or province, as the case may be.
(2) To serve as an advisory committee to the Sanggunian
concerned on health matters such as, but not limited to, the
necessity for, and application of, local appropriations for
public health purposes; and
(3) Consistent with the technical and administrative standards of
the Department of Health, create committees which shall

51
advise local health agencies on matters such as, but not
limited to, personnel selection and promotion, bids and
awards, grievances and complaints, personnel discipline,
budget review, operations review and similar functions.
SECTION 103. Meetings and Quorum. - (a) The board shall meet at least once
a month or as often as may be necessary.
(b) A majority of the members of the board shall constitute a quorum,
but the chairman or the vice-chairman must be present during
meetings where budgetary proposals are being prepared or
considered. The affirmative vote of all the majority of the members
shall be necessary to approve such proposals.
SECTION 104. Compensation and Remuneration. - The chairman, vice-
chairman, and members of the provincial, city or municipal health board
shall perform their duties as such without compensation or remuneration.
Members thereof who are not government officials or employees shall be
entitled to necessary traveling expenses and allowances chargeable
against the funds of the local health board concerned, subject to existing
accounting and auditing rules and regulations.
SECTION 105. Direct National Supervision and Control by the Secretary of
Health. - In cases of epidemics, pestilence, and other widespread public
health dangers, the Secretary of Health may, upon the direction of the
President and in consultation with the local government unit concerned,
temporarily assume direct supervision and control over health operations
in any local government unit for the duration of the emergency, but in no
case exceeding a cumulative period of six (6) months. With the
concurrence of the local government unit concerned, the period for such
direct national control and supervision may be further extended.
TITLE SIX. - LOCAL DEVELOPMENT COUNCILS
SECTION 106. Local Development Councils. - (a) Each local government unit
shall have a comprehensive multi-sectoral development plan to be
initiated by its development council and approved by its Sanggunian. For
this purpose, the development council at the provincial city, municipal, or
Barangay level, shall assist the corresponding Sanggunian in setting the
direction of economic and social development, and coordinating
development efforts within its territorial jurisdiction.
SECTION 107. Composition of Local Development Councils. - The
composition of the local development council shall be as follows:

52
(a) The Barangay development council shall be headed by the Punong
Barangay and shall be composed of the following members:
(1) Members of the Sangguniang Barangay;
(2) Representatives of non-governmental organizations
operating in the Barangay, who shall constitute not less than
one fourth (1/4) of the members of the fully organized
council;
(3) A representative of the congressman.
(b) The city or municipal development council shall be headed by the
mayor and shall be composed of the following members:
(1) All Punong Barangays in the city or municipality;
(2) The chairman of the committee on appropriations of the
Sangguniang Panlungsod or Sangguniang bayan
concerned;
(3) The congressman or his representative; and
(4) Representatives of nongovernmental organizations
operating in the city or municipality, as the case may be, who
shall constitute not less than one-fourth (1/4) of the members
of the fully organized council.
(c) The provincial development council shall be headed by the
governor and shall be composed of the following members:
(1) All mayors of component cities and municipalities;
(2) The chairman of the committee on appropriations of the
Sangguniang Panlalawigan;
(3) The congressman or his representative; and
(4) Representatives of nongovernmental organizations
operating in the province, who shall constitute not less than
one-fourth (1/4) of the members of the fully organized
council.
(d) The local development councils may call upon any local official
concerned or any official of national agencies or offices in the local

53
government unit to assist in the formulation of their respective
development plans and public investment programs.
SECTION 108. Representation of Non-Governmental Organizations. - Within
a period of sixty (60) days from the start of organization of local
development councils, the nongovernmental organizations shall choose
from among themselves their representatives to said councils. The local
Sanggunian concerned shall accredit nongovernmental organizations
subject to such criteria as may be provided by law.
SECTION 109. Functions of Local Development Councils. - (a) The
provincial, city, and municipal development councils shall exercise the
following functions:
(1) Formulate long-term, medium-term, and annual
socioeconomic development plans and policies;
(2) Formulate the medium-term and annual public investment
programs;
(3) Appraise and prioritize socioeconomic development
programs and projects;
(4) Formulate local investment incentives to promote the inflow
and direction of private investment capital;
(5) Coordinate, monitor, and evaluate the implementation of
development programs and projects; and
(6) Perform such other functions as may be provided by law or
competent authority.
(b) The Barangay development council shall exercise the following
functions:
(1) Mobilize people's participation in local development efforts;
(2) Prepare Barangay development plans based on local
requirements;
(3) Monitor and evaluate the implementation of national or local
programs and projects; and
(4) Perform such other functions as may be provided by law or
competent authority.

54
SECTION 110. Meetings and Quorum. - The local development council shall
meet at least once every six (6) months or as often as may be necessary.
SECTION 111. Executive Committee. - (a) Each local development council
shall create an executive committee to represent it and act in its behalf
when it is not in session. The composition of the executive committee shall
be as follows:
(1) The executive committee of the provincial development
council shall be composed of the governor as chairman, the
representative of component city and municipal mayors to be
chosen from among themselves, the chairman of the
committee on appropriations of the Sangguniang
Panlalawigan, the president of the
Barangays, and a representative
provincial league of
of nongovernmental
in the council, as
organizations that are represented
members;
(2) The executive committee of the city or municipal
development council shall be composed of the mayor as
chairman, the chairman of the committee on appropriations
of the Sangguniang Panlalawigan, the president of the city or
municipal league of Barangays, and a representative of
nongovernmental organizations that are represented in the
council, as members; and
(3) The executive committee of the Barangay development
council shall be composed of the Punong Barangay as
chairman, a representative of the Sangguniang Barangay to
be chosen from among its members, and a representative of
nongovernmental organizations that are represented in the
council, as members.
(b) The executive committee shall exercise the following powers and
functions:
(1) Ensure that the decision of the council are faithfully carried
out and implemented;
(2) Act on matters requiring immediate attention or action by the
council;
(3) Formulate policies, plans, and programs based on the
general principles laid down by the council; and
(4) Act on other matters that may be authorized by the council.

55
SECTION 112. Sectoral or Functional Committees. - The local development
councils may form sectoral or functional committees to assist them in the
performance of their functions.
SECTION 113. Secretariat. - There is hereby constituted for each local
development council a secretariat which shall be responsible for providing
technical support, documentation of proceedings, preparation of reports
and such other assistance as may be required in the discharge of its
functions. The local development council may avail of the services of any
nongovernmental organization or educational or research institution for
this purpose.
The secretariats of the provincial, city, and municipal development
councils shall be headed by their respective planning and development
coordinators. The secretariat of the Barangay development council shall
be headed by the Barangay secretary who shall be assisted by the city or
municipal planning and development coordinator concerned.
SECTION 114. Relation of Local Development Councils to the Sanggunian
and the Regional Development Council. - (a) Thepolicies, programs,
and projects proposed by localdevelopment councils shall be submitted to
the Sanggunian concerned for appropriate action. The local development
plans approved by their respective Sanggunian may be integrated with the
development plans of the next higher level of local development council.
(b) The approved development plans of provinces, highly-urbanized
cities, and independent component cities shall be submitted to the
regional development council, which shall be integrated into the
regional development plan for submission to the National Economic
and Development Authority, in accordance with existing laws.
SECTION 115. Budget Information. - The Department of Budget and
Management shall furnish the various local development councils
information on financial resources and budgetary allocations applicable to
their respective jurisdictions to guide them in their planning functions.
TITLE SEVEN. -LOCAL PEACE AND ORDER COUNCIL
SECTION 116. Organization. - There is hereby established in every province,
city and municipality a local peace and order council, pursuant to
Executive Order Numbered Three hundred nine (E.O. No. 309), Series of
1988. The local peace and order councils shall have the same
composition and functions as those prescribed by the said executive
order.

56
TITLE EIGHT. - AUTONOMOUS SPECIAL ECONOMIC ZONE
SECTION 117. Establishment of Autonomous Special Economic Zones. -
The establishment by law of autonomous special economic zones in
selected areas of the country shall be subject to concurrence by the local
government units included therein.
TITLE NINE. - OTHER PROVISIONS APPLICABLE TO LOCAL
GOVERNMENT UNITS
CHAPTER 1. - Settlement of Boundary Disputes
SECTION 118. Jurisdictional Responsibility for Settlement of Boundary
Dispute. - Boundary disputes between and among local government units
shall, as much as possible, be settled amicably. To this end:
(a) Boundary disputes involving two (2) or more Barangays in the
same city or municipality shall be referred for settlement to the
Sangguniang Panlungsod or Sangguniang bayan concerned.
(b) Boundary disputes involving two (2) or more municipalities within
the same province shall be referred for settlement to the
Sangguniang Panlalawigan concerned.
(c) Boundary disputes involving municipalities or component cities of
different provinces shall be jointly referred for settlement to the
Sanggunians of the provinces concerned.
(d) Boundary disputes involving a component city or municipality on
the one hand and a highly urbanized city on the other, or two (2) or
more highly urbanized cities, shall be jointly referred for settlement
to the respective Sanggunians of the parties.
(e) In the event the Sanggunian fails to effect an amicable settlement
within sixty (60) days from the date the dispute was referred
thereto, it shall issue a certification to that effect. Thereafter, the
dispute shall be formally tried by the Sanggunian concerned which
shall decide the issue within sixty (60) days from the date of the
certification referred to above.
SECTION 119. Appeal. - Within the time and manner prescribed by the Rules of
Court, any party may elevate the decision of the Sanggunian concerned to
the proper Regional Trial Court having jurisdiction over the area in dispute.
The Regional Trial Court shall decide the appeal within one (1) year from
the filing thereof. Pending final resolution of the disputed area prior to the
dispute shall be maintained and continued for all legal purposes.

57
CHAPTER 2. - LOCAL INITIATIVE AND REFERENDUM
SECTION 120. Local Initiative Defined. - Local initiative is the legal process
whereby the registered voters of a local government unit may directly
propose, enact, or amend any ordinance.
SECTION 121. Who May Exercise. - The power of local initiative and
referendum may be exercised by all registered voters of the provinces,
cities, municipalities, and Barangays.
SECTION 122. Procedure in Local Initiative. - (a) Not less than one thousand
(1,000) registered voters in case of provinces and cities, one hundred
(100) in case of municipalities, and fifty (50) in case of Barangays, may file
a petition with the Sanggunian concerned proposing the adoption,
enactment, repeal, or amendment of an ordinance.
(b) If no favorable action thereon is taken by the Sanggunian
concerned within thirty (30) days from its presentation, the
proponents, through their duly authorized and registered
representatives, may invoke their power of initiative, giving notice
thereof to the Sanggunian concerned.
(c) The proposition shall be numbered serially starting from Roman
numeral I. The Comelec or its designated representative shall
extend assistance in the formulation of the proposition.
(d) Two (2) or more propositions may be submitted in an initiative.
(e) Proponents shall have ninety (90) days in case of provinces and
cities, sixty (60) days in case of municipalities, and thirty (30) days
in case of Barangays, from notice mentioned in subsection (b)
hereof to collect the required number of signatures.
(f) The petition shall be signed before the election registrar, or his
designated representatives, in the presence of a representative of
the proponent, and a representative of the Sanggunian concerned
in a public place in the local government unit, as the case may be.
Stations for collecting signatures may be established in as many
places as may be warranted.
(g) Upon the lapse of the period herein provided, the Comelec, through
its office in the local government unit concerned, shall certify as to
whether or not the required number of signatures has been
obtained. Failure to obtain the required number defeats the
proposition.

58
(h) If the required number of signatures is obtained, the Comelec shall
then set a date for the initiative during which the proposition shall
be submitted to the registered voters in the local government unit
concerned for their approval within sixty (60) days from the date of
certification by the Comelec, as provided in subsection (g) hereof,
in case of provinces and cities, forty-five (45) days in case of
municipalities, and thirty (30) days in case of Barangays. The
initiative shall then be held on the date set, after which the results
thereof shall be certified and proclaimed by the Comelec.
SECTION 123. Effectivity of Local Propositions. - If the proposition is
approved by a majority of the votes cast, it shall take effect fifteen (15)
days after certification by the Comelec as if affirmative action thereon had
been made by the Sanggunian and local chief executive concerned. If it
fails to obtain said number of votes, the proposition is considered
defeated.
SECTION 124. Limitations on Local Initiatives. - (a) The power of local
initiative shall not be exercised more than once a year.
(b) Initiative shall extend only to subjects or matters which are within
the legal powers of the Sanggunians to enact.
(c) If at any time before the initiative is held, the Sanggunian
concerned adopts in to the proposition presented and the local
chief executive approves the same, the initiative shall be canceled.
However, those against such action may, if they so desire, apply for
initiative in the manner herein provided.
SECTION 125. Limitations upon Sanggunians. - Any proposition or ordinance
approved through the system of initiative and referendum as herein
provided shall not be repealed, modified or amended by the Sanggunian
concerned within six (6) months from the date of the approval thereof, and
may be amended, modified or repealed by the Sanggunian within three (3)
years thereafter by a vote of three-fourths (3/4) of all its members:
Provided, That in case of Barangays, the period shall be eighteen (18)
months after the approval thereof.
SECTION 126. Local Referendum Defined. - Local referendum is the legal
process whereby the registered voters of the local government units may
approve, amend or reject any ordinance enacted by the Sanggunian. The
local referendum shall be held under the control and direction of the
Comelec within sixty (60) days in case of provinces and cities, forty-five
(45) days in case of municipalities and thirty (30) days in case of

59
Barangays. The Comelec shall certify and proclaim the results of the said
referendum.
SECTION 127. Authority of Courts. - Nothing in this Chapter shall prevent or
preclude the proper courts from declaring null and void any proposition
approved pursuant to this Chapter for violation of the Constitution or want
of capacity of the Sanggunian concerned to enact the said measure.

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BOOK II
LOCAL TAXATION AND FISCAL MATTERS
TITLE ONE. – LOCAL GOVERNMENT TAXATION
CHAPTER 1. – GENERAL PROVISIONS
SECTION 128. Scope - The provision herein shall govern the exercise by
provinces, cities, municipalities, and Barangays of their taxing and other
revenue-raising powers.
SECTION 129. Power to Create Source of Revenue - Each local government
unit shall exercise its power to create its own sources of revenue and to
levy taxes, fees, and charges subject to the provisions herein, consistent
with the basic policy of local autonomy. Such taxes, fees, and charges
shall accrue exclusively to the local government units.
SECTION 130. Fundamental Principles. - The following fundamental principles
shall govern the exercise of the taxing and other revenue-raising powers
of local government units:
(1) Taxation shall be uniform in each local government unit;
(2) Taxes, fees, charges and other impositions shall:
(a) be equitable and based as far as practicable on the
taxpayer's ability to pay;
(b) be levied and collected only for public purposes;
(c) not be adjust, excessive, oppressive, or confiscatory;
(d) not be contrary to law, public policy, national economic
policy, or in restraint of trade;
(3) The collection of local taxes, fees, charges and other impositions
shall in no case be let to any private person;
(4) The revenue collected pursuant to the provisions of this Code shall
inure solely to the benefit of, and be subject to disposition by, the
local government unit levying the tax, fee, charge or other
imposition unless otherwise specifically provided herein; and,

61
(5) Each local government unit shall, as far as practicable, evolve a
progressive system of taxation.
SECTION 131. Definition of Terms. - When used in this Title, the term:
(6) "Agricultural Product" includes the yield of the soil, such as corn,
rice wheat, rye, hay, coconuts, sugarcane, tobacco, root crops,
vegetables, fruits, flowers, and their by-products; ordinary salt; all
kinds of fish; poultry; and livestock and animal products, whether in
their original form or not.
The phrase "whether in their original form or not" refers to the
transfers to the transformation of said products by the farmer,
fisherman, producer or owner through the application of processes
to preserve or otherwise to prepare said products for the market
such as freezing, drying salting, smoking, or stripping for purposes
of preserving or otherwise preparing said product s for market;
(7) "Amusement" is a pleasurable diversion and entertainment. It is
synonymous to relaxation, avocation, pastime, or fun;
(8) "Amusement Places" include theaters, cinemas, concert halls,
circuses and other places of amusement where one seeks
admission to entertain oneself by seeing or viewing the show or
performances;
(9) "Business" means trade or commercial activity regularly engaged in
as a means of livelihood or with a view to profit;
(10) "Banks and other financial institutions" include non-bank financial
intermediaries, lending investors, finance and investment
companies, pawnshops, money shops, insurance companies, stock
markets, stockbrokers and dealers in securities and foreign
exchange, as defined under applicable laws, or rules and
regulations thereunder;
(11) "Capital Investment" is the capital which a person employees in any
undertaking, or which he contributes to the capital of a partnership,
corporation, or any other juridical entity or association in a particular
taxing jurisdiction
(12) "Charges" refer to pecuniary liability, as rents or fees against
persons or property;
(13) "Contractor" includes persons, natural or juridical, not subject to
professional tax under Section 139 of this Code, whose activity

62
consists essentially of the sale of kinds of services for a fee,
regardless of whether or not the performance of the service calls for
the exercise or use of the physical or mental faculties of such
contractor or his employees.
As used in this Section, the term "contractor" shall include general
engineering, general building and specialty contractors as defined
under applicable laws; filling, demolition and salvage works
contractors; proprietors or operators of mine drilling apparatus;
proprietors or operators of dockyards; persons engaged in the
installation of water system, and gas or electric light, heat, or
power, proprietors or operators of smelting plants; engraving,
plating, and plastic lamination establishments; proprietors or
operators of establishments for repairing, repainting, upholstering,
washing or greasing of vehicles, heavy equipment, vulcanizing,
recapping and battery charging; proprietors or operators of furniture
shops and establishment for planning or surfacing and recutting of
lumber, and sawmills under contract and recutting of lumber, and
sawmill under contract to saw or cut logs belongings to others
proprietors or operators of dry-cleaning or dyeing establishments,
steam laundries using washing machines; proprietors or owners of
shops for the repair of any kind of mechanical and electrical
devices, instruments, apparatus, or furniture and shoe repairing by
machine or any mechanical contrivance; proprietors or operators of
establishments or lots for parking purposes; proprietors or
operators of tailor shops, dress shops, millineres and hatters,
beauty parlors, barbershops, massage clinics, sauna, Turkish and
Swedish baths, slenderizing and building saloons and similar
establishments; photographic studios; funeral parlors; proprietors or
operators of hotels, motels, and lodging houses; proprietors or
operators of arrastre and stevedoring, warehousing, or forwarding
establishments; master plumbers, smiths, and house or sign
painters; printers, bookbinders, lithographers; publishers except
those engaged in the publication or printing of any newspaper,
magazine, review or bulletin which appears at regular intervals with
fixed prices for subscription and sale and which is not devoted
principally to the publication of advertisements, business agents,
private detective or watchman agencies, commercial and
immigration brokers, and cinematographic film owners, lessors and
distributors.
(14) "Corporation" includes partnerships, no matter how created or
organized, joint- stock companies, joint accounts (cuentas en
participation), associations or insurance companies but does not
include general professional partnership but does not include
general professional partnership and a joint venture or consortium

63
formed for the purpose of undertaking construction projects or
engaging in petroleum, coal, geothermal, and other energy
operations pursuant to an operating or consortium agreement
under a service contract with the government. General
professional partnership are partnership formed by persons for the
sole purpose of exercising their common profession, no part of the
income of which is derived from engaging in any trade or business.
The term "resident foreign" when applied to a corporation means a
foreign corporation not otherwise organized under the laws of the
Philippines but engaged in trade or business within the Philippines;
(15) "Countryside and Barangay Business Enterprise" refers to any
business entity, association, or cooperative registered under the
provisions of Republic Act Numbered Sixty-eight hundred ten (R.A.
No. 6810)., otherwise known as "Magna Carta For Countryside and
Barangay Business Enterprises (Kalakalan 20)'.
(16) "Dealer" means one whose business is to buy and sell
merchandise, goods, and chattels as a merchant. He stands
immediately between the producer or manufacturer and the
consumer and depend for his profit not upon the labor he bestows
upon his commodities but upon the skill and foresight with which he
watches the market;
(17) "Fee" means a charge fixed by law or ordinance for the regulation
or inspection of a business or activity;
(18) "Franchise" is a right or privilege, affected with public interest which
is conferred upon private persons or corporations, under such
terms and conditions as the government and its political
subdivisions may impose in the interest of public welfare, security,
and safety;
(19) "Gross Sales or Receipt" include the total amount of money or its
equivalent representing the contract price, compensation or service
fee, including the amount charged or materials supplies with the
services and deposits or advance payments actually or
constructively received during the taxable quarter for the services
performed or to be performed for another person excluding
discounts if determinable at the time of sales, sales return, excise
tax, and value-added tax (VAT);
(20) "Manufacturer" includes every person who, by physical or chemical
process, alters the exterior textures or form or inner substance of
any raw material or manufactured product in such manner as to

64
prepare it for special use or uses to which is could not have been
put in its original condition, or who by any such process alters the
quality of any such raw materials or manufactured or partially
manufactured products so as to reduce it to marketable shape or
prepare it for any of the use of industry, or who by any such
process combines any such raw material or manufactured products
with other materials or products of the same or of different kinds
and in such manner that the finished products of such process or
manufacture can be put to a special use or uses to which such raw
material or manufactured or partially manufactured products in their
original condition could not have been put, and who in addition
alters such raw material or manufactured products, or combines the
same to produce such finished products for the purpose of their
sale or distribution to others and not for his own use or
consumption;
(21) "Marginal Farmer or Fisherman" refers to an individual engaged in
subsistence farming or fishing which shall be limited to the sale,
barter or exchange of agricultural or marine products produced by
himself and his immediate family;
(22) "Motor Vehicle" means any vehicle propelled by any power other
than muscular power using the public roads, but excluding road
rollers, trolley cars, street-sweepers, sprinklers, lawn mowers,
bulldozers, graders, fork-lifts, amphibian trucks, and cranes if not
used on public roads, vehicles which run only on rails or tracks, and
tractors, trailers, and traction engines of all kinds used exclusively
for agricultural purposes;
(23) "Municipal Waters" includes not only 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, but also
marine 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;
(24) "Operator" includes the owner, manager, administrator, or any
other person who operates or is responsible for the operation of a
business establishment or undertaking;

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(25) "Peddler" means any person who, either for himself or on
commission, travels from place to place and sells his goods or
offers to sell and deliver the same. Whether a peddler is a
wholesale peddler or a retail peddler of a particular commodity shall
be determined from the definition of wholesale dealer or retail
dealer as provided in this Title;
(26) "Persons" means every natural or juridical being, susceptible of
rights and obligations or of being the subject of legal relations;
(27) "Residents" refer to natural persons who have their habitual
residence in the province, city, or municipality where they exercise
their civil rights and fulfill their civil obligations, and to juridical
persons for whom the law or any other provision creating or
recognizing them fixes their residence in a particular province, city,
or municipality. In the absence of such law, juridical persons are
residents of the province, city, or municipality where they have their
legal residence or principal place of business or where they
conduct their principal business or occupation;
(28) "Retail means a sale where the purchaser buys the commodity for
his own consumption, irrespective of the quantity of the commodity
sold;
(29) "Vessel" includes every type of boat, craft, or other artificial
contrivance used, or capable of being used, as a means of
transportation on water;
(30) "Wharfage" means a fee assessed against the cargo of a vessel
engaged in foreign or domestic trade based on quantity, weight, or
measure received and/or discharged by vessel; and
(31) "Wholesale" means a sale where the purchaser buys or imports the
commodities for resale to persons other than the end user
regardless of the quantity of the transaction.
SECTION 132. Local Taxing Authority - The power to impose a tax, fee, or
charge or to generate revenue under this Code shall be exercised by the
Sanggunian of the local government unit concerned through an
appropriate ordinance.
SECTION 133. Common Limitations on the Taxing Powers of Local
Government Units. - Unless otherwise provided herein, the exercise of
the taxing powers of provinces, cities, municipalities, and Barangays shall
not extend to the levy of the following:

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(32) Income tax, except when levied on banks and other financial
institutions;
(33) Documentary stamp tax;
(34) Taxes on estates, inheritance, gifts, legacies and other acquisitions
mortis causa, except as otherwise provided herein;
(35) Customs duties, registration fees vessels and wharfage on wharves,
tonnage dues, and all other kinds of customs fees, charges and
dues except wharfage on wharves constructed and maintained by
the local government unit concerned;
(36) Taxes, fee and charges and other impositions upon goods carried
into or out of, or passing through, the territorial jurisdictions of local
government units in the guise of charges for wharfage, tolls for
bridges or otherwise, or other taxes, fees or charges in any form
whatsoever upon such goods or merchandise;
(37) Taxes, fees, or charges on agricultural and aquatic products when
sold by marginal farmers or fishermen;
(38) Taxes on business enterprises certified to by the Board of
Investments as pioneer or non-pioneer for a period of six (6) and
(4) four years, respectively from the date of registration;
(39) Excise taxes on articles enumerated under the National Internal
Revenue Code, as amended, and taxes, fees or charges on
petroleum products;
(40) Percentage or value added tax (VAT) on sales, barters or
exchanges or similar transactions on goods or services except as
otherwise provided herein;
(41) Taxes on the gross receipts of transaction contractors and persons
engaged in the transportation of passengers or freight by hire and
common carriers by air, land or water, except as provided in this
Code;
(42) Taxes on premium paid by way or reinsurance or retrocession;
(43) Taxes, fees or charges for the registration of motor vehicle and for
the issuance of all kinds of licenses or permits for the driving
thereof, except tricycles;

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(44) Taxes, fees or charges on Philippine products actually exported,
except as otherwise provided herein;
(45) Taxes, fees, or charges, on Countryside and Barangay Business
Enterprises and cooperatives duly registered under R.A. No. 6810
and Republic Act Numbered Sixty-nine hundred thirty-eight (R.A.
No. 6938) otherwise known as the "Cooperatives Code of the
Philippines" respectively; and
(46) Taxes, fees or charges, of any kind on the National Government, its
agencies and instrumentalities, and local government units.
CHAPTER 2. - Specific Provisions on the Taxing and Other Revenue
Raising Powers
of Local Government Units
Article One - Provinces
SECTION 134. Scope of Taxing Powers. - Except as otherwise provided in this
Code, the province may levy only the taxes, fees, and charges as
provided in this Article.
SECTION 135. Tax on Transfer of Real Property Ownership. - (a) The
province may impose a tax on the sale, donation, barter, or on any other
mode of transferring ownership or title of real property at the rate of not
more than fifty percent (50%) of one percent (1%) of the total
consideration involved in the acquisition of the property or of the fair
market value in case the monetary consideration involved in the transfer is
not substantial, whichever is higher. The sale, transfer or other disposition
of real property pursuant to R.A. No. 6657 shall be exempt from this tax.
(b) For this purpose, the Register of Deeds of the province concerned
shall, before registering any deed, require the presentation of the
evidence of payment of this tax. The provincial assessor shall
likewise make the same requirement before canceling an old tax
declaration and issuing a new one in place thereof. Notaries public
shall furnish the provincial treasures with a copy of any deed
transferring ownership or title to any real property within thirty (30)
days from the date of notarization.
It shall be the duty of the seller, donor, transferor, executor or
administrator to pay the tax herein imposed within sixty (60) days

68
from the date of the execution of the deed or from the date of the
decedent's death.
SECTION 136. Tax on Business of Printing and Publication. - The Province
may impose a tax on the business of persons engaged in the printing
and/or publication of books, cards, posters, leaflets, handbills, certificates,
receipts, pamphlets, and other of similar nature, at a rate not exceeding
fifty percent (50%) of one percent (1%) of the gross annual receipts for the
preceding calendar year.
In the case of a newly started business, the tax shall not exceed one-
twentieth (1/20) of one percent (1%) of the capital investment. In the
succeeding calendar year, regardless of when the business started to
operate, the tax shall be based on the gross receipts for the preceding
calendar year, or any fraction thereof, as provided herein.
The receipts from the printing and/or publishing of books or other reading
materials prescribed by the Department of Education, Culture and Sports
as school texts or reference shall be exempt from the tax herein imposed.
SECTION 137. Franchise Tax - Notwithstanding any exemption granted by any
law or other special laws, the province may impose a tax on business
enjoying a franchise, at a rate exceeding fifty percent (50%) of one
percent (1%) of the gross annual receipts for the preceding calendar year
based on the incoming receipt, or realized, within its territorial jurisdiction.
In the case of a newly started business, the tax shall not exceed one-
twentieth (1/20) of one percent (1%) of the capital investment. In the
succeeding calendar year, regardless of when the business started to
operate, the tax shall be based on the gross receipts for the preceding
calendar year, or any fraction thereof, as provided herein.
SECTION 138. Tax on Sand, Gravel and Other Quarry Resources - The
province may levy and collect not more than ten percent (10%) of fair
market value in the locality per cubic meter of ordinary stones, sand,
gravel, earth, and other quarry resources, as defined under the National
Internal Revenue Code, as amended, extracted from public lands or from
the beds of seas, lakes, rivers, streams, creeks, and other public waters
within its territorial jurisdiction.
The permit to extract sand, gravel and other quarry resources shall be
issued exclusively by the provincial governor, pursuant to the ordinance of
the Sangguniang Panlalawigan.
The proceeds of the tax on sand, gravel and other quarry resources shall
be distributed as follows:

69
(4) Province - Thirty percent (30%);
(5) Component City or Municipality where the sand, gravel, and
other quarry resources are extracted - Thirty percent (30%);
and
(6) Barangay where the sand, gravel, and other quarry
resources are extracted - Forty percent (40%).
SECTION 139. Professional Tax - (a) The province may levy an annual
professional tax on each person engaged in the exercise or practice of his
profession requiring government examination as such amount and
reasonable classification as the Sangguniang Panlalawigan may
determine but shall in no case exceed Three hundred pesos (P300.00)
(b) Every person legally authorized to practice his profession shall pay
the professional tax to the province where he practices his
profession or where he maintains his principal office in case he
practices his profession in several places: Provided, however, That
such person who has paid the corresponding professional tax shall
be entitled to practice his profession in any part of the Philippines
without being subjected to any other national or local tax, license,
or free for the practice of such profession.
(1) Any individual or corporation employing a person subject to
professional tax shall require payment by that person of the
tax on his profession before employment and annually
thereafter.
(2) The professional tax shall be payable annually on or before
the thirty first (31st) day of January must, however, pay the
full tax before engaging therein. A line of profession does
not become exempt even if conducted with some other
profession for which the tax has been paid. Professionals
exclusively employed in the government shall be exempt
from the payment of this tax.
(3) Any person subject to the professional tax shall write in
deeds, receipts, prescriptions, reports, books of account,
plans and designs, surveys and maps, as the case may be,
the number of the official receipt issued to him.
SECTION 140. Amusement Tax - (a) The province may levy an amusement tax
to be collected from the proprietors, lessees, or operators of theaters,

70
cinemas, concert halls, circuses, boxing stadia, and other places of
amusement at a rate of not more than thirty percent (30%) of the gross
receipts from admission fees.
(4) In the case of theaters of cinemas, the tax shall first be
deducted and withheld by their proprietors, lessees, or
operators and paid to the provincial treasurer before the
gross receipts are divided between said proprietors, lessees,
or operators and the distributors of the cinematographic
films.
(5) The holding of operas, concerts, dramas, recitals, painting
and art exhibitions, flower shows, musical programs, literary
and oratorical presentations, except pop, rock, or similar
concerts shall be exempt from the payment of the tax herein
imposed.
(6) The Sangguniang Panlalawigan may prescribe the time,
manner, terms and conditions for the payment of tax. In case
of fraud or failure to pay the tax, the Sangguniang
Panlalawigan may impose such surcharges, interests and
penalties.
(7) The proceeds from the amusement tax shall be shared
equally by the province and the municipality where such
amusement places are located.
SECTION 141. Annual Fixed Tax For Every Delivery Truck or Van of
Manufacturers or Producers, Wholesalers of, Dealers, or Retailers in,
Certain Products. - (a) The province may levy an annual fixed tax for
every truck, van or any vehicle used by manufacturers, producers,
wholesalers, dealers or retailers in the delivery or distribution of distilled
spirits, fermented liquors, soft drinks, cigars and cigarettes, and other
products as may be determined by the Sangguniang Panlalawigan, to
sales outlets, consumers, whether directly or indirectly, within the province
in an amount not exceeding Five hundred pesos (P500.00).
(8) The manufacturers, producers, wholesalers, dealers, and
retailers referred to in the immediately foregoing paragraph
shall be exempt from the tax on peddlers prescribed
elsewhere in this Code.

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Article Two. - Municipalities
SECTION 142. Scope of Taxing Powers. _ Except as otherwise provided in
this Code, municipalities may levy taxes, fees, and charges not otherwise
levied by provinces.
SECTION 143. Tax and Business - The municipality may impose taxes on the
following business:
(9) (9) On manufacturers, assemblers, repackers, processors,
brewers, distillers, rectifiers, and compounders of liquors,
distilled spirits, and wines or manufacturers of any article of
commerce of whatever kind of nature, in accordance with the
following schedule:
With gross sales or receipts for the Preceding
calendar year in the amount of
Amount of Tax
Per Annum
Less than 10,000.00 165.00
P 10,000.00 or more but less than 15,000.00 220.00
15,000.00 or more but less than 20,000.00 302.00
50,000.00 or more but less than 75,000.00 1,320.00
750,000.00 or more but less than 1,000,000.00 10,000.00
1,000,000.00 or more but less than 2,000,000.00 13,750.00
6,500,000.00 or more at a rate not exceeding thirty-seven and a
half percent (37 1/2%) of one percent (1%)

72
(10) On wholesalers, distributors, or dealers in any article of
commerce of whatever kind or nature in accordance with the
following schedule:
With gross sales or receipts for the Preceding calendar
year in the amount of:
Amount of Tax
Per Annum
Less than P1,000.00 18.00
750,000.00 or more but less than 1,000,000.00 8800.00
1,000,000.00 or more but less than 2,000,000.00 10000.00
2,000,000.00 or
more
at a rate not exceeding fifty percent (50%) of
one percent (1%)
(c) On
wholesalers, distributors, dealers or retailers of
exporters, and on manufacturers, millers, producers,
essential
commodities enumerated hereunder at a rate not exceeding one-
half (1/2) of the rates prescribed under subsections (a), (b) and (d)
of this Section:
(4) Rice and corn;
(5) Wheat or cassava flour, meat, dairy products, locally
manufactured, processed or preserved food, sugar, salt and
other agricultural, marine, and fresh water products, whether
in their original state or not;

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(6) Cooking oil and cooking gas;
(7) Laundry soap, detergents, and medicine;
(8) Agricultural implements, equipment and post harvest
facilities, fertilizers, pesticides, insecticides, herbicides and
other farm inputs;
(9) Poultry feeds and other animal feeds;
(10) School supplies; and
(11) Cement
(d) On retailers,
With gross sales or receipts for the
Preceding calendar year of:
Rate of Tax
Per Annum
P 400,000.00 or less 2%
More than P 400,000.00 1%
Provided, however, That Barangays shall have the exclusive power
to levy taxes, as provided under Section 152 hereof, on gross sales
or receipts of the preceding calendar year of Fifty thousand pesos
(P50,000.00) or less in the case of municipalities.
(e) On contractors and other independent contractors, in accordance
with the following schedule:
With gross receipts for the preceding Calendar
year in the amount of:
Amount of Tax
Per Annum
Less than P 5,000.00 27.50
10,000.00 or more but less than 15.000.00 104.50

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750,000.00 or more but less than 1,000,000.00 10250.00
1,000,000.00 or more but less than 2,000,000.00 11500.00
2,000,000.00 or
more
at a rate not exceeding fifty percent (50%) of
one percent (1%)
(f) On banks and other financial institutions, at a rate not exceeding
fifty percent (50% of one percent (1) on the gross receipts of the
preceding calendar year derived from interest, commissions and
discounts from lending activities, income from financial leasing,
dividends, rentals on property and profit from ex change or sale of
property, insurance premium.
(g) On peddlers engaged in the sale of any merchandise or article or
commerce, at a rate not exceeding Fifty pesos (P50.00) per peddler
annually.
(11) On any business, not otherwise specified in the preceding
paragraphs, which the Sanggunian concerned may deem
proper to tax: Provided, That on any business subject to the
excise, value-added or percentage tax under the National
Internal Revenue Code, as amended, the rate of tax shall
not exceed two percent (2%) of gross sales or receipts of the
preceding calendar year.
The Sanggunian concerned may prescribe a schedule of graduated
tax rates but in no case to exceed the rates prescribed herein.
SECTION 144. Rates of Tax within the Metropolitan Manila Area. - The
municipalities within the Metropolitan Manila Area may levy taxes at rates
which shall not exceed by fifty percent (50%) the maximum rates
prescribed in the preceding Section.
SECTIOIN 145. Retirement of Business. - A business subject to tax pursuant
to the preceding sections shall, upon termination thereof, submit a sworn
statement of its gross sales or receipts for the current year. If the tax paid
during the year, the difference shall be paid before the business is
concerned officially retired.

75
SECTION 146. Payment of Business Taxes. - (a) The taxes imposed under
Section 143 shall be payable for every separate or distinct establishment
or place where business subject to the tax is conducted and one line of
business does not become exempt by being conducted with some other
business for which such tax has been paid. The tax on a business must
be paid by the person conducting the same.
(b) In cases where a person conducts or operates two (2) or more of
the businesses mentioned in Section 143 of this Code which are
subject to the same rate of tax, the tax shall be computed on the
combined total gross sales or receipts of the said two (2) or more
related businesses.
(c) In cases where a person conducts or operates two (2) or more
businesses mentioned in Section 143 of this Code which are
subject to different rates of tax, the gross sales or receipts of each
business shall be separately reported for the purpose of computing
the tax due from each business.
SECTION 147. Fees and Charges. - The municipality may impose and collect
such reasonable fees and charges on business and occupation and,
except as reserved to the province in Section 139 of this Code, on the
practice of any profession or calling, commensurate with the cost of
regulation, inspection and licensing before any person may engage in
such business or occupation, or practice such profession or calling.
SECTION 148. Fees for Sealing and Licensing of Weights and Measures. -
(a) The municipality may levy fees for the sealing and licensing of weights
and measures at such reasonable rates as shall be prescribed by the
Sangguniang Bayan.
(b) The Sangguniang bayan shall prescribe the necessary regulations
for the use of such weights and measures, subject to such
guidelines as shall be prescribed by the Department of Science and
Technology. The Sanggunian concerned shall, by appropriate
ordinance, penalize fraudulent practices and unlawful possession
or use of instruments of weights and measures and prescribe the
criminal penalty therefore in accordance with the provisions of this
Code. Provided, however, That the Sanggunian concerned may
authorize the municipal treasurer to settle an offense not involving
the commission of fraud before a case therefore is files in court,
upon payment of a compromise penalty of not less than Two
hundred pesos (P200.00).
SECTION 149. Fishery Rentals, Fees and Charges. - (a) Municipalities shall
have the exclusive authority to grant fishery privileges in the municipal

76
waters and impose rentals, fees or charges therefore in accordance with
the provisions of this Section.
(b) The Sangguniang Bayan may:
(1) Grant fishery privileges to erect fish corrals, oyster, mussels
or other aquatic beds or bangus fry areas, within a definite
zone of the municipal waters, as determined by it: Provided,
however, That duly registered organizations and
cooperatives of marginal fishermen shall have the
preferential right to such fishery privileges: Provided, further,
That the Sangguniang bayan may require a public bidding in
conformity with and pursuant to an ordinance for the grant of
such privileges: Provided, finally, That in the absence of
such organizations and cooperatives or their failure to
exercise their preferential right, other parties may participate
in the public bidding in conformity with the above cited
procedure.
(2) Grant the privilege to gather, take or catch bangus fry, prawn
fry or kawag-kawag or fry of other species and fish from the
municipal waters by nets, traps or other fishing gears to
marginal fishermen free of any rental, fee, charge or any
other imposition whatsoever.
(3) Issue for the operation of fishing vessels of three (3) tons or
less for which purpose the Sangguniang bayan shall
promulgate rules and regulations regarding the issuances of
such licenses to qualified applicants under existing laws.
Provided, however, That the Sanggunian concerned shall,
by appropriate ordinance, penalize the use of explosives,
noxious or puissance substances, electricity, muro-ami, and
other deleterious methods of fishing and prescribe a criminal
penalty therefore in accordance with the provisions of this
Code: Provided, finally, That the Sanggunian concerned
shall have the authority to prosecute any violation of the
provisions of applicable fishery laws.
SECTION 150. Situs of the Tax. - (a) For purposes of collection of the taxes
under Section 143 of this Code, manufacturers, assemblers, repackers,
brewers, distillers, rectifiers and compounders of liquor, distilled spirits and
wines, millers, producers, exporters, wholesalers, distributors, dealers,
contractors, banks and other financial institutions, and other businesses,
maintaining or operating branch or sales outlet elsewhere shall record the
sale in the branch or sales outlet making the sale or transaction, and the

77
tax thereon shall accrue and shall be paid to the municipality where such
branch or sales outlet is located. In cases where there is no such branch
or sales outlet in the city or municipality where the sale or transaction is
made, the sale shall be duly recorded in the principal office and the taxes
due shall accrue and shall be paid to such city or municipality.
(b) The following sales allocation shall apply to manufacturers,
assemblers, contractors, producers, and exporters with factories,
project offices, plants, and plantations in the pursuit of their
business:
(4) Thirty percent (30%) of all sales recorded in the principal
office shall be taxable by the city or municipality where the
principal office is located; and
(5) Seventy percent (70%) of all sales recorded in the principal
office shall be taxable by the city or municipality where the
factory, project office, plant, or plantation is located.
(c) In case of a plantation located at a place other than the place
where the factory is located, said seventy percent (70%) mentioned
in subparagraph (b) of subsection (2) above shall be divided as
follows:
(1) Sixty percent (60%) to the city or municipality where the
factory is located; and
(2) Forty percent (40%) to the city or municipality where the
plantation is located.
(d) In case where a manufacturer, assembler, producer, exporter or
contractor has two (2) or more factories, project offices, plants, or
plantations located in different localities, the seventy percent (70%)
mentioned in subparagraph (b) of subsection (2) above shall be
prorated among the localities where the factories, project offices,
plants, and plantations are located in proportion to their respective
volume or production during the period for which the tax is due.
(e) The foregoing sales allocation shall be applied irrespective of
whether or not sales are made in the locality where the factory,
project office, plant or plan is located.

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Article Three. - Cities
SECTION 151. Scope of Taxing Powers. - Except as otherwise provided in
this Code, the city, may levy the taxes, fees, and charges which the
province or municipality may impose: Provided, however, That the taxes,
fees and charges levied and collected by highly urbanized and
independent component cities shall accrue to them and distributed in
accordance with the provisions of this code.
The rates of taxes that the city may levy may exceed the maximum rates
allowed for the province or municipality by not more than fifty percent
(50%) except the rates of professional and amusement taxes.
Article Four. - Barangays
SECTION 152. Scope of Taxing Powers. - The Barangays may levy taxes,
fees, and charges, as provided in this Article, which shall exclusively
accrue to them:
(a) Taxes - On stores or retailers with fixed business establishments
with gross sales or receipts of the preceding calendar year of Fifty
Thousand pesos (P50,000.00) or less, in the case of cities and
Thirty thousand pesos (P30,000.00) or less, in the case of
municipalities, at a rate not exceeding one percent (1%) on such
gross sales or receipts.
(b) Service Fees or Charges - Barangays may collect reasonable
fees or charges for services rendered in connectioin with the
regulation or the use of Barangay-owned properties or service
facilities such as palay, copra, or tobacco dryers.
(c) Barangay Clearance - No city or municipality may issue any
license or permit for any business or activity unless a clearance is
first obtained from the Barangay where such business or activity is
located or conducted. For such clearance, the Sangguniang
Barangay may impose a reasonable fee. The application for
clearance shall be acted upon within seven (7) working days from
the filing thereof. In the event that the clearance is not issued
within the said period, the city or municipality may issue the said
license or permit.
(d) Other Fees and Charges - The Barangay may levy reasonable
fees and charges:

79
(1) On commercial breeding of fighting cocks, cockfighting and
cockpits;
(2) On places of recreation which charge admission fees; and
(3) On billboards, signboards, neon signs, and outdoor
advertisements.
Article Five. - Common Revenue-Raising Powers
SECTION 153. Service Fees and Charges. - Local government units may
impose and collect such reasonable fees and charges for services
rendered.
SECTION 154. Public Utility Charges. - The Sanggunian concerned may
prescribe the terms and conditions and fix the rates for the imposition of
toll fees or charges for the use of any public road, pier or wharf, waterway,
bridge, ferry or telecommunication system funded and constructed by the
local government unit concerned: Provided, That no such toll fees or
charges shall be collected from officers and enlisted men of the Armed
Forces of the Philippines and members of the Philippine National Police
on mission, post office personnel delivering mail, physically-handicapped,
and disabled citizens who are sixty-five (65) years or older.
When public safety and welfare so requires, the Sanggunian concerned
may discontinue the collection of the tolls, and thereafter the said facility
shall be free and open for public use.
Article Six. - Community Tax
SECTION 156. Community Tax. - Cities or municipalities may levy a
community tax in accordance with the provisions of this Article.
SECTION 157. Individuals Liable to Community Tax. - Every inhabitant of
the Philippines eighteen (18) years of age or over who has been regularly
employed on a wage or salary basis for at least thirty (30) consecutive
working days during any calendar year, or who is engaged in business or
occupation, or who owns real property with an aggregate assessed value
of One thousand pesos (P1,000.00) or more, or who is required by law to
file an income tax return shall pay an annual community tax of Five pesos
(P5.00) and an annual additional tax of One peso (P1.00_ for every One
thousand pesos (P1,000.00) of income regardless of whether from

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business, exercise of profession or from property which in no case shall
exceed Five thousand pesos (P5,000.00).
In the case of husband and wife, the additional tax herein imposed shall
be based upon the total property owned by them and the total gross
receipts or earnings derived by them.
SECTION 158. Juridical Persons Liable to Community Tax. - Every
corporation no matter how created or organized, whether domestic or
resident foreign, engaged in or doing business in the Philippines shall pay
an annual community tax of Five hundred pesos (P500.00) and an annual
additional tax, which, on no case, shall exceed Ten thousand pesos
(P10,000.00) in accordance with the following schedule:
(1) For every Five thousand pesos (P5,000.00) worth of real property
in the Philippines owned by it during the preceding year based on
the valuation used for the payment of the real property tax under
existing laws, found in the assessment rolls of the city or
municipality where the real property is situated - Two pesos
(P2.00); and
(2) For every Five thousand pesos (P5,000.00) of gross receipts or
earnings derived by it from its business in the Philippines during the
preceding year - Two pesos (P2.00).
The dividends received by a corporation from another corporation
however shall, for the purpose of the additional tax, be considered
as part of the gross receipts or earnings of said corporation.
SECTION 159. Exemption. - The following are exempt from the community
tax:
(1) Diplomatic and consular representatives; and
(2) Transient visitors when their stay in the Philippines does not
exceed three (3) months.
SECTION 160. Place of Payment. - The community tax shall be paid in the
place of residence of the individual, or in the place where the principal
office of the juridical entity is located.
SECTION 161. Time for Payment; Penalties for Delinquency. - (a) The
community tax shall accrue on the first (1st) day of January of each year
which shall be paid not later than the last day of February of each year. If
a person reaches the age of eighteen (18) years or otherwise loses the
benefit of exemption on or before the last day of June, he shall be liable

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for the community tax on the day he reaches such age or upon the day the
exemption ends. However, if a person reaches the age of eighteen (18)
years or loses the benefit of exemption on or before the last day of June,
he shall be liable for the community tax on the day he reaches such age or
upon the day the exemption ends. However, if a person reaches the age
of eighteen (18) years or loses the benefit of exemption on or before the
last day of March, he shall have twenty (20) days to pay the community
tax without becoming delinquent.
Persons who come to reside in the Philippine or reach the age of eighteen
(18) years on or after the first (1st) day of July of any year, or who cease
to belong to an exempt class on or after the same date, shall not be
subject to the community tax for that year.
(b) Corporation established and organized on or before the last day of
June shall be liable for the community tax for that year. But
corporations established and organized on or before the last day of
March shall have twenty (20) days within which to pay the
community tax without becoming delinquent. Corporations
established and organized on or after the first day of July shall not
be subject to the community tax for that year.
If the tax is not paid within the time prescribed above, there shall be
added to the unpaid amount an interest of twenty-four percent
(24%) per annum from the due date until it is paid.
SECTION 162. Community Tax Certificate. - A community tax certificate shall
be issued to every person or corporation upon payment of the community
tax. A community tax certificate may also be issued to any person or
corporation not subject to the community tax upon payment of One peso
(P1.00).
SECTION 163. Presentation of Community Tax Certificate On Certain
Occasions. - (a) When an individual subject to the community tax
acknowledges any document before a notary public, takes the oath of
office upon election or appointment to any position in the government
service; receives any license, certificate, or permit from any public
authority; pays any tax or fee; receives any money from any public fund;
transacts other official business; or receives any salary or wage from any
person or corporation, it shall be the duty of any person, officer, or
corporation with whom such transaction is made or business done or from
whom any salary or wage is received to require such individual to exhibit
the community tax certificate.
The presentation of community tax certificate shall not be required in
connection with the registration of a voter.

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(b) When, through its authorized officers, any corporation subject to the
community tax receives any license, certificate, or permit from any
public authority, pays and tax or fee, receives money from public
funds, or transacts other official business, it shall be the duty of the
public official with whom such transaction is made or business
done, to require such corporation to exhibit the community tax
certificate.
(c) The community tax certificate required in the two preceding
paragraphs shall be the one issued for the current year, except for
the period from January until the fifteenth (15th) of April each year,
in which case, the certificate issued for the preceding year shall
suffice.
SECTION 164. Printing of Community Tax Certificates and Distribution of
Proceeds. - (a) The Bureau of Internal Revenue shall cause the printing
of community tax certificates and distribute the same to the cities and
municipalities through the city and municipal treasurers in accordance with
prescribed regulations.
The proceeds of the tax shall accrue to the general funds of the cities,
municipalities and Barangays except a portion thereof which shall accrue
to the general fund of the national government to cover the actual cost of
printing and distribution of the forms and other related expenses. The city
or municipal treasurer concerned shall remit to the national treasurer the
said share of the national government in the proceeds of the tax within ten
(10) days after the end o each quarter.
(b) The city or municipal treasurer shall deputize the Barangay
treasurer to collect the community tax in their respective
jurisdictions: Provided, however, That said Barangay treasurer
shall be bonded in accordance with existing laws.
(c) The proceeds of the community tax actually and directly collected
by the city or municipal treasurer shall accrue entirely to the general
fund of the city or municipality concerned. However, proceeds of
the community tax collected through the Barangay treasurers shall
be apportioned as follows:
(1) Fifty percent (50%) shall accrue to the general fund of the
city or municipality concerned; and
(2) Fifty percent (50%) shall accrue to the Barangay where the
tax is collected.

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CHAPTER 3. - Collection of Taxes
SECTION 165. Tax Period and Manner of Payment. - Unless otherwise
provided in this Code, the tax period of all local taxes, fees and charges
shall be the calendar year. Such taxes, fees and charges may be paid in
quarterly installments.
SECTION 166. Accrual of Tax. - Unless otherwise provided in this Code, all
local taxes, fees, and charges shall accrue on the first (1st) day of January
of each year. However, new taxes, fees or charges, or changes in the
rates thereof, shall accrue on the first (1st) day of the quarter next
following the effectivity of the ordinance imposing such new levies or
rates.
SECTION 167. Time of Payment. - Unless otherwise provided in this Code, all
local taxes, fees, and charges shall be paid within the first twenty (20)
days of January or of each subsequent quarter, as the case may be. The
Sanggunian concerned may, for a justifiable reason or cause, extend the
time of payment of such taxes, fees, or charges without surcharges or
penalties, but only for a period not exceeding six (6) months.
SECTION 168. Surcharges and Penalties on unpaid Taxes, fees, or
Charges. - The Sanggunian may impose a surcharge not exceeding
twenty-five percent (25%) of the amount of taxes, fees or charges not paid
on time and an interest at the rate not exceeding two percent (2%) per
month of the unpaid taxes, fees or charges including surcharges, until
such amount is fully paid but in no case shall the total interest on the
unpaid amount or portion thereof exceed thirty-six (36) months.
SECTION 169. Interests on Other Unpaid Revenues. Where the amount of
any other revenue due a local government unit, except voluntary
contributions or donations, is not paid on the date fixed in the ordinance,
or in the contract, expressed or implied, or upon the occurrence of the
event which has given rise to its collection, there shall be collected as part
of that amount an interest thereon at the rate not exceeding two percent
(2%) per month from the date it is due until it is paid, but in no case shall
the total interest on the unpaid amount or a portion thereof exceed thirty-
six (36) months.
SECTION 170. Collection of Local Revenues by Treasurer. - All local taxes,
fees, and charges shall be collected by the provincial, city, municipal, or
Barangay treasurer, or their duly authorized deputies.

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The provincial, city or municipal treasurer may designate the Barangay
treasurer as his deputy to collect local taxes, fees, or charges. In case a
bond is required for the purpose, the provincial, city or municipal
government shall pay the premiums thereon in addition to the premiums of
bond that may be required under this Code.
SECTION 171. Examination of Books of Accounts and Pertinent Records of
Businessmen by Local Treasurer. - The provincial, city, municipal or
Barangay treasurer may, by himself or through any of his municipal or
Barangay treasurer may, by himself or through any of his deputies duly
authorized in writing, examine the books, accounts, and other pertinent
records of nay person, partnership, corporation, or association subject to
local taxes, fees and charges in order to ascertain, assess, and collect the
correct amount of the tax, fee, or charge. Such examination shall be
made during regular business hours, only once for every tax period, and
shall be certified to by the examining official. Such certificate shall be
made of record in the books of accounts of the taxpayer examined.
In case the examination herein authorized is made by a duly authorized
deputy of the local treasurer, the written authority of the deputy concerned
shall specifically state the name, address, and business of the taxpayers
whose books, accounts, and pertinent records are to be examined, the
date and place of such examination, and the procedure to be followed in
conducting the same.
For this purpose, the records of the revenue district office of the Bureau of
Internal Revenue shall be made available to the local treasurer, his deputy
or duly authorized representative.
CHAPTER 4. - Civil Remedies for Collection of Revenues
SECTION 172. Application of Chapter. - The provisions of this Chapter and
the remedies provided herein may be availed of for the collection of any
delinquent local tax, fee, charge, or other revenue.
SECTION 173. Local Government's Lien. - Local taxes, fees, charges and
other revenue constitute a lien, superior to all liens, charges or
encumbrances in favor of any person, enforceable by appropriate
administrative or judicial action, not only upon any property or rights
therein which may be subject to the lien but also upon property used in
business, occupation, practice of profession or calling, or exercise of
privilege with respect tot which the lien is imposed. The lien may only be
extinguished upon full payment of the delinquent local taxes fees and
charges including related surcharges and interest.

85
SECTION 174. Civil Remedies. - The civil remedies for the collection of local
taxes, fees, or , and surcharges and interest resulting from delinquency
shall be:
(a) By administrative action thru distraint of goods, chattels, or effects,
and other personal of whatever character, including stocks and
other securities, debts, credits, bank accounts, and interest in and
rights to personal property, and by levy upon real property and
interest in or rights to real property; and
(b) By judicial action. Either of these remedies or all may be pursued
concurrently or at the discretion of the local government unit
concerned.
SECTION 175. Distraint of Personal Property. - The remedy by distraint shall
proceed as follows:
(a) Seizure - Upon failure of the person owing any local tax, fee, or
charge to pay the same at the time required, the local treasurer or
his deputy may, upon written notice, seize or confiscate any
personal property belonging to that person or any personal property
subject to the lien in sufficient quantity to satisfy the tax, fee, or
charge in question, together with any increment thereto incident to
delinquency and the expenses of seizure. In such case, the local
treasurer or his deputy shall issue a duly authenticated certificate
based upon the records of his office showing the fact of
delinquency and the amounts of the tax, fee, or charge and penalty
due. Such certificate shall serve as sufficient warrant for the
distraint of personal property aforementioned, subject to the
taxpayer's right to claim exemption under the provisions of existing
laws. Distrained personal property shall be sold at public auction in
the manner herein provided for.
(b) Accounting of distrained goods - The officer executing the distraint
shall make or cause to be made an account of the goods, chattels
or effects distrained, a copy of which signed by himself shall be
either with the owner or person from whose possession the goods,
chattels or effects are taken, or at the dwelling or place of business
of that person and with someone of suitable age and discretion, to
which list shall be added a statement of the sum demanded and a
note of the time and place of sale.
(c) Publication - The officer shall forthwith cause a notification to be
exhibited in not less than (3) public and conspicuous places in the
territory of the local government unit where the distraint is made,

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specifying the time and place of sale, and the articles distrained.
The time of sale shall not be less than twenty (20) days after
notice to the owner or possessor of the property as above specified
and the publication or posting of the notice. One place for the
posting of the notice shall be at the office of the chief executive of
the local government unit in which the property is distrained.
(d) Release of distrained property upon payment prior to sale - If at
any time prior to the sale, all the proper charges are paid to the
officer conducting the sale, the goods or effects distrained shall be
restored to the owner.
(e) Procedure of sale - At the time and place fixed in the notice, the
officer conducting the sale sell the goods or effects so distrained at
public auction to the highest bidder for cash. Within five (5) days
after the sale, the local treasurer shall make a report of the
proceedings in writing to the local chief executive concerned.
Should the property distrained be not disposed of within one
hundred and twenty (120) days from the date of distraint, the same
shall be considered as sold to the local government unit concerned
for the amount of the assessment made thereon by the Committee
on Appraisal and to the extent of the same amount, the tax
delinquencies shall be cancelled.
Said Committee on Appraisal shall be composed of the city or
municipal treasurer as chairman, with a representative of the
Commission on Audit and the city or municipal assessor as
members.
(f) Disposition of proceeds - The proceeds of the sale shall be applied
to satisfy the tax, including the surcharges, interest, and other
penalties incident to delinquency, and the expenses of the
distraint and sale. The balance over and above what is required to
pay the entire claim shall be returned to the owner of the property
sold. The expenses chargeable upon the seizure and sale shall
embrace only the actual expenses of seizure and preservation of
the property pending the sale, and no charge shall be imposed for
the services of the local officer or his deputy. Where the proceeds
of the sale are insufficient to satisfy the claim, other property may,
in like manner, be distrained until the full amount due, including all
expenses, collected.
SECTION 176. Levy on Real Property . - After the expiration of the time
required to pay the tax, fee, or charge, real property may be levied on
before, simultaneously, or after the distraint of personal property belonging

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to the delinquent taxpayer. To this end, the provincial, city or municipal
treasurer, as the case may be, shall prepare a duly authenticated
certificate showing the name of the taxpayer and the amount of the tax,
fee, or charge, and penalty due from him. Said certificate shall operate
with the force of a legal execution throughout the Philippines. Levy shall
be effected by writing upon said certificate the description of the property
upon which levy is made. At the same time, written notice of the levy shall
be mailed to or served upon the assessor and the Registrar of Deeds of
the province or city where the property is located who shall annotate the
levy on the tax declaration and certificate of title of the property,
respectively, and the delinquent taxpayer or, if he be absent from the
Philippines, to his agent or the manager of the business in respect to
which the liability arose, or if there be none, to the occupant of the
property in question. In case the levy on real property is not issued before
or simultaneously with the warrant of distraint on personal property, and
the personal property of the taxpayer is not sufficient to satisfy his
delinquency, the provincial, city or municipal treasurer, as the case may
be, shall within thirty (30) days after execution of the distraint, proceed
with the levy on the taxpayer's real property. A report on any levy shall,
within ten (10) days after receipt of the warrant, be submitted by the
levying officer to the Sanggunian concerned.
SECTION 177. Penalty for Failure to Issue and Execute Warrant. - Without
prejudice to criminal under the Revised Penal Code and other applicable
laws, any local treasurer who fails to issue or execute the warrant of
distraint or levy after the expiration of the time prescribed, or who is found
guilty of abusing the exercise thereof by competent authority shall be
automatically dismissed from the service after due notice and hearing.
SECTION 178. Advertisement and Sale. - Within thirty (30) days after levy, the
local treasurer proceed to publicly advertise for sale or auction the
property or a usable portion thereof as may be necessary to satisfy the
claim and cost of sale; and such advertisement shall cover a period of at
least thirty (30) days. It shall be effected by posting a notice at the main
entrance of the municipal building or city hall, and in a public and
conspicuous place in the Barangay where the real property is located, and
by publication once a week for three (3) weeks in a newspaper of general
circulation in the province, city or municipality where the property is
located. The advertisement shall contain the amount of taxes, fees or
charges, and penalties due thereon, and the time and place of sale, the
name of the taxpayer against whom the taxes, fees, or charges are levied,
and a short description of the property to be sold. At any time before the
date fixed for the sale, the taxpayer may stay the proceedings by paying
the taxes, fees, charges, penalties and interests. If he fails to do so, the
sale shall proceed and shall be held either at the main entrance of the
provincial, city or municipal building, or on the property to be sold, or at

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any other place as determined by the local treasurer conducting the sale
and specified in the notice of sale.
Within thirty (30) days after the sale, the local treasurer or his deputy shall
make a report of the sale to the Sanggunian concerned, and which shall
form part of his records. After consultation with the Sanggunian, the local
treasurer shall make and deliver to the purchaser a certificate of sale,
showing the proceedings of the sale, describing the property sold, stating
the name of the purchaser and setting out the exact amount of all taxes,
fees, charges, and related surcharges, interests, or penalties: Provided,
however, That any excess in the proceeds of the sale over the claim and
cost of sales shall be turned over to the owner of the property.
The local treasurer may, by ordinance duly approved, advance an amount
sufficient to defray the costs of collection by means of the remedies
provided for in this Title, including the preservation or transportation in
case of personal property, and the advertisement and subsequent sale, in
cases of personal and real property including improvements thereon.
SECTION 179. Redemption of Property Sold. - Within one (1) year from the
date of sale, the delinquent taxpayer or his representative shall have the
right to redeem the property upon payment to the local treasurer of the
total amount of taxes, fees, or charges, and related surcharges, interests
or penalties from the date of delinquency to the date of sale, plus interest
of not more than two percent (2%) per month on the purchase price from
the date of purchase to the date of redemption. Such payment shall
invalidate the certificate of sale issued to the purchaser and the owner
shall be entitled to a certificate of redemption from the provincial, city or
municipal treasurer or his deputy.
The provincial, city or municipal treasurer or his deputy, upon surrender by
the purchaser of the certificate of sale previously issued to him, shall
forthwith return to the latter the entire purchase price paid by him plus the
interest of not more than two percent (2%) per month herein provided for,
the portion of the cost of sale and other legitimate expenses incurred by
him, and said property thereafter shall be free from the lien of such taxes,
fees, or charges, related surcharges, interests, and penalties.
The owner shall not, however, be deprived of the possession of said
property and shall be entitled to the rentals and other income thereof until
the expiration of the time allowed for its redemption.
SECTION 180. Final Deed to Purchaser. - In case the taxpayer fails to redeem
the property as provided herein, the local treasurer shall execute a deed
conveying to the purchaser so much of the property as has been sold,
free from liens of any taxes, fees, charges, related surcharges, interests,

89
and penalties. The deed shall succinctly recite all the proceedings upon
which the validity of the sale depends.
SECTION 181. Purchase of Property By the Local Government Units for
Want of Bidder. - In case there is no bidder for the real property
advertised for sale as provided herein, or if the highest bid is for an
amount insufficient to pay the taxes, fees, or charges, related surcharges,
interests, penalties and costs, the local treasurer conducting the sale shall
purchase the property in behalf of the local government unit concerned to
satisfy the claim and within two (2) days thereafter shall make a report of
his proceedings which shall be reflected upon the records of his office. It
shall be the duty of the Registrar of Deeds concerned upon registration
with his office of any such declaration of forfeiture to transfer the title of the
forfeited property to the local government unit concerned without the
necessity of an order from a competent court.
Within one (1) year from the date of such forfeiture, the taxpayer or any of
his representative, may redeem the property by paying to the local
treasurer the full amount of the taxes, fees, charges, and related
surcharges, interests, or penalties, and the costs of sale. If the property is
not redeemed as provided herein, the ownership thereof shall be fully
vested of the local government unit concerned.
SECTION 182. Resale of Real Estate Taken for Taxes, Fees, or Charges. -
The Sanggunian may, by ordinance duly approved, and upon notice of not
less than twenty (20) days, sell and dispose of the real property acquired
under the preceding section at public auction. The proceeds of the sale
shall accrue to the general fund
SECTION 183. Collection of Delinquent Taxes, Fees, Charges or other
Revenues through Judicial Action. - The local government unit
concerned may enforce the collection of delinquent taxes, fees, charges or
other revenues by civil action in any court of competent jurisdiction. The
civil action shall be filed by the local treasurer within the period prescribed
in Section 194 of this Code.
SECTION 184. Further Distraint or Levy. - The remedies by distraint and levy
may be repeated if necessary until the full amount due, including all
expenses, is collected.
SECTION 185. Personal Property Exempt from Distraint or Levy. - The
following property shall be exempt from distraint and the levy, attachment
or execution thereof for delinquency in the payment of any local tax, fee or
charge, including the related surcharge and interest:

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(a) Tools and the implements necessarily used by the delinquent
taxpayer in his trade or employment;
(b) One (1) horse, cow, carabao, or other beast of burden, such as the
delinquent taxpayer may select, and necessarily used by him in his
ordinary occupation;
(c) His necessary clothing, and that of all his family;
(d) Household furniture and utensils necessary for housekeeping and
used for that purpose by the delinquent taxpayer, such as he may
select, of a value not exceeding Ten thousand pesos
(Php10,000.00);
(e) Provisions, including crops, actually provided for individual or family
use sufficient for four (4) months;
(f) The professional libraries of doctors, engineers, lawyers and
judges;
(g) One fishing boat and net, not exceeding the total value of Ten
thousand pesos (Php10,000.00), by the lawful use of which a
fisherman earns his livelihood; and
(h) Any material or article forming part of a house or improvement of
any real property.
CHAPTER 5 - MISCELLANEOUS PROVISIONS
SECTION 186. Power To Levy Other Taxes, Fees or Charges. - Local
government units may exercise the power to levy taxes, fees or charges
on any base or subject not otherwise specifically enumerated herein or
taxed under the provisions of the National Internal Revenue Code, as
amended, or other applicable laws: Provided, That the taxes, fees, or
charges shall not be unjust, excessive, oppressive, confiscatory or
contrary to declared national policy: Provided, further, That the ordinance
levying such taxes, fees or charges shall not be enacted without any prior
public hearing conducted for the purpose.
SECTION 187. Procedure for Approval and Effectivity of Tax ordinances
and Revenue Measures; Mandatory Public Hearings. - The procedure
for approval of local tax ordinances and revenue measures shall be in
accordance with the provisions of this Code: Provided, That public
hearings shall be conducted for the purpose prior to the enactment

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thereof: Provided, further, That any question on the constitutionality or
legality of tax ordinances or revenue measures may be raised on appeal
within thirty (30) days from the effectivity thereof to the Secretary of
Justice who shall render a decision within sixty (60) days from the date of
receipt of the appeal: Provided, however, That such appeal shall not have
the effect of suspending the effectivity of the ordinance and the accrual
and payment of the tax, fee, or charge levied therein: Provided, finally,
That within thirty (30) days after receipt of the decision or the lapse of the
sixty-day period without the Secretary of Justice acting upon the appeal,
the aggrieved party may file appropriate proceedings with a court of
competent jurisdiction.
SECTION 188. Publication of Tax ordinances and Revenue Measures. -
Within ten (10) days after their approval, certified true copies of all
provincial, city, and municipal tax ordinances or revenue shall be
published in full for three (3) consecutive days in a newspaper of local
circulation: Provided, however, That in provinces, cities and municipalities
where there are no newspapers of local circulation, the same may be
posted in at least two (2) conspicuous and publicly accessible places.
SECTION 189. Furnishing of Copies of Tax ordinances and Revenue
Measures. - Copies of all provincial, city, and municipal and Barangay tax
ordinances and revenue measures shall be furnished the respective local
treasurers for public dissemination.
SECTION 190. Attempt to Enforce Void or Suspended Tax ordinances and
revenue measures. - The enforcement of any tax ordinance or revenue
measure after due notice of the disapproval or suspension thereof shall be
sufficient ground for administrative disciplinary action against the local
officials and employees responsible therefor.
SECTION 191. Authority of Local Government Units to Adjust Rates of Tax
ordinances. - Local units shall have the authority to adjust the tax rates
as prescribed herein not oftener than once every five (5) years, but in no
case shall such adjustment exceed ten percent (10%) of the rates fixed
under this Code.
SECTION 192. Authority to Grant Tax Exemption Privileges. - Local
government units may, through ordinances duly approved, grant tax
exemptions, incentives or reliefs under such terms and conditions, as they
may deem necessary.
SECTION 193. Withdrawal of Tax Exemption Privileges. - Unless otherwise
provided in this Code, tax exemptions or incentives granted to, or
presently enjoyed by all persons, whether natural or juridical, including
government-owned or -controlled corporations, except local water districts,

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cooperatives duly registered under R.A. No. 6938, non-stock and non-
profit hospitals and educational institutions, are hereby withdrawn upon
the effectivity of this Code.
CHAPTER 6 - TAXPAYER'S REMEDIES
SECTION 194. Periods of Assessment and Collection. - (a) Local taxes, fees,
or charges shall be assessed within five (5) years from the date they
became due. No action for the collection of such taxes, fees, or charges,
whether administrative or judicial, shall be instituted after the expiration of
such period: Provided, That, taxes, fees or charges which have accrued
before the effectivity of this Code may be assessed within a period of
three (3) years from the date they became due.
(b) In case of fraud or intent to evade the payment of taxes, fees, or
charges, the same may be assessed within ten (10) years from
discovery of the fraud or intent to evade payment.
(c) Local taxes, fees, or charges may be collected within five (5) years
from the date of by or judicial action. No such action shall be
instituted after the expiration of said period: Provided, however,
That, taxes, fees or charges assessed before the effectivity of this
Code may be collected within a period of three (3) years from the
date of assessment.
(d) The running of the periods of prescription provided in the preceding
paragraphs shall be for the time during which:
(1) The treasurer is legally prevented from making the
assessment of collection;
(2) The taxpayer requests for a reinvestigation and executes a
waiver in writing before expiration of the period within which
to assess or collect; and
(3) The taxpayer is out of the country or otherwise cannot be
located.
SECTION 195. Protest of Assessment. - When the local treasurer or his duly
authorized representative finds that correct taxes, fees, or charges have
not been paid, he shall issue a notice of assessment stating the nature
of the tax, fee or charge, the amount of deficiency, the surcharges,
interests and penalties. Within sixty (60) days from the receipt of the
notice of assessment, the taxpayer may file a written protest with the local
treasurer contesting the assessment; otherwise, the assessment shall

93
become final and executory. The local treasurer shall decide the protest
within sixty (60) days from the time of its filing. If the local treasurer finds
the protest to be wholly or partly meritorious, he shall issue a notice
canceling wholly or partially the assessment. However, if the local
treasurer finds the assessment to be wholly or partly correct, he shall deny
the protest wholly or partly with notice to the taxpayer. The taxpayer shall
have thirty (30) days from the receipt of the denial of the protest or from
the lapse of the sixty (60) day period prescribed herein within which to
appeal with the court of competent jurisdiction otherwise the assessment
becomes conclusive and unappealable.
SECTION 196. Claim for Refund of Tax Credit. - No case or proceeding shall
be maintained in any court for the recovery of any tax, fee, or charge
erroneously or illegally collected until a written claim for refund or credit
has been filed with the local treasurer. No case or proceeding shall be
entertained in any court after the expiration of two (2) years from the date
of the payment of such tax, fee, or charge, or from the date the taxpayer is
entitled to a refund or credit.
TITLE II. REAL PROPERTY TAXATION
CHAPTER 1 - GENERAL PROVISIONS
SECTION 197. Scope. - This Title shall govern the administration, appraisal,
assessment, levy and collection of real property tax.
SECTION 198. Fundamental Principles. - The appraisal, assessment, levy and
collection of real property tax shall be guided by the following fundamental
principles:
(a) Real property shall be appraised at its current and fair market
value;
(b) Real property shall be classified for assessment purposes on the
basis of its actual use;
(c) Real property shall be assessed on the basis of a uniform
classification within each local government unit;
(d) The appraisal, assessment, levy and collection of real property tax
shall not be let to any private person; and
(e) The appraisal and assessment of real property shall be equitable.
SECTION 199. Definitions. - When used in this Title: (a) " Acquisition Cost" for
newly-acquired machinery not yet depreciated and appraised within the

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year of its purchase, refers to the actual cost of the machinery to its
present owner, plus the cost of transportation, handling, and installation at
the present site;
(b) "Actual Use" refers to the purpose for which the property is
principally or predominantly by the person in possession thereof;
(c) "Ad Valorem Tax" is a levy on real property determined on the
basis of a fixed proportion of the value of the property;
(d) "Agricultural Land" is land devoted principally to the planting of
trees, raising of crops, livestock and poultry, dairying, salt making,
inland fishing and similar aquacultural activities, and other
agricultural activities, and is not classified as mineral, timber,
residential, commercial or industrial land;
(e) "Appraisal" is the act or process of determining the value of
property as of a specific date for a specific purpose;
(f) "Assessment" is the act or process of determining the value of a
property, or proportion thereof subject to tax, including the
discovery, listing, classification, and appraisal of properties;
(g) "Assessment Level" is the percentage applied to the fair market
value to determine the taxable value the property;
(h) "Assessed Value" is the fair market value of the real property
multiplied by the assessment level. It is synonymous to taxable
value;
(i) "Commercial Land" is land devoted principally for the object of profit
and is not classified as agricultural, industrial, mineral, timber, or
residential land;
(j) "Depreciated Value" is the value remaining after deducting
depreciation from the acquisition cost;
(k) "Economic Life" is the estimated period over which it is anticipated
that a machinery or equipment may be profitably utilized;
(l) "Fair Market Value" is the price at which a property may be sold by
a seller who is not compelled to sell and bought by a buyer who is
not compelled to buy;
(m) "Improvement" is a valuable addition made to a property or an
amelioration in its condition, amounting to more than a mere repair

95
or replacement of parts involving capital expenditures and labor,
which is intended to enhance its value, beauty or utility or to adapt it
for new or further purposes;
(n) "Industrial Land" is land devoted principally to industrial activity as
capital investment and is not classified as agricultural, commercial,
timber, mineral or residential land;
(o) "Machinery" embraces machines, equipment, mechanical
contrivances, instruments, or apparatus which may or may not be
attached, permanently or temporarily, to the real property. It
includes the physical facilities for production, installations and
appurtenant service facilities, those which are mobile, self-powered
or self-propelled, and those not permanently attached to the real
property which are actually, directly, and exclusively used to meet
the needs of the particular industry, business or activity and which
by their very nature and purpose are designed for, or necessary to
its manufacturing, mining, logging, commercial, industrial or
agricultural purposes;
(p) "Mineral Lands" are lands in which minerals, metallic or non-
metallic, exist in sufficient quantity or grade to justify the necessary
expenditures to extract and utilize such materials;
(q) "Reassessment" is the assigning of new assessed values to
property, particularly real estate, as the result of a general, partial,
or individual reappraisal of the property;
(r) "Remaining Economic Life" is the period of time expressed in years
from the date of appraisal to the date when the machinery becomes
valueless;
(s) "Remaining Value" is the value corresponding to the remaining
useful life of the machinery;
(t) "Replacement or Reproduction Cost" is the cost that would be
incurred on the basis of current prices, in acquiring an equally
desirable substitute property, or the cost of reproducing a new
replica of the property on the basis of current prices with the same
or closely similar material; and
(u) "Residential Land" is land principally devoted to habitation.
SECTION 200. Administration of the Real Property Tax. - The provinces and
cities, including the municipalities within the Metropolitan Manila Area,

96
shall be primarily responsible for the proper, efficient and effective
administration of the real property tax.
CHAPTER 2 - APPRAISAL AND ASSESSMENT OF REAL PROPERTY
SECTION 201. Appraisal of Real Property. - All real property, whether taxable
or exempt, shall be appraised at the current and fair market value
prevailing in the locality where the property is situated. The Department of
Finance shall promulgate the necessary rules and regulations for the
classification, appraisal, and assessment of real property pursuant to the
provisions of this Code.
SECTION 202. Declaration of Real Property by the Owner or Administrator.
- It shall be the duty of all persons, natural or juridical, owning or
administering real property, including the improvements therein, within a
city or municipality, or their duly authorized representative, to prepare, or
cause to be prepared, and file with the provincial, city or municipal
assessor, a sworn statement declaring the true value of their property,
whether previously declared or undeclared, taxable or exempt, which shall
be the current and fair market value of the property, as determined by the
declarant. Such declaration shall contain a description of the property
sufficient in detail to enable the assessor or his deputy to identify the same
for assessment purposes. The sworn declaration of real property herein
referred to shall be filed with the assessor concerned once every three (3)
years during the period from January first (1st) to June thirtieth (30th)
commencing with the calendar year 1992.
SECTION 203. Duty of Person Acquiring Real Property or Making
Improvement Thereon. - It shall also be the duty of any person, or his
authorized representative, acquiring at any time real property in any
municipality or city or making any improvement on real property, to
prepare, or cause to be prepared, and file with the provincial, city or
municipal assessor, a sworn statement declaring the true value of subject
property, within sixty (60) days after the acquisition of such property or
upon completion or occupancy of the improvement, whichever comes
earlier.
SECTION 204. Declaration of Real Property by the Assessor. - When any
person, natural or juridical, by whom real property is required to be
declared under Section 202 hereof, refuses or fails for any reason to make
such declaration within the time prescribed, the provincial, city or
municipal assessor shall himself declare the property in the name of the
defaulting owner, if known, or against an unknown owner, as the case
may be, and shall assess the property for taxation in accordance with the

97
provision of this Title. No oath shall be required of a declaration thus made
by the provincial, city or municipal assessor.
SECTION 205. Listing of Real Property in the Assessment Rolls. - (a) In
every province and city, including the municipalities within the Metropolitan
Manila Area, there shall be prepared and maintained by the provincial, city
or municipal assessor an assessment roll wherein shall be listed all real
property, whether taxable or exempt, located within the territorial
jurisdiction of the local government unit concerned. Real property shall be
listed, valued and assessed in the name of the owner or administrator, or
anyone having legal interest in the property.
(b) The undivided real property of a deceased person may be listed,
valued and assessed in the name of the estate or of the heirs and
devisees without designating them individually; and undivided real
property other than that owned by a deceased may be listed,
valued and assessed in the name of one or more co-owners:
Provided, however, That such heir, devisee, or co-owner shall be
liable severally and proportionately for all obligations imposed by
this Title and the payment of the real property tax with respect to
the undivided property.
(c) The real property of a corporation, partnership, or association shall
be listed, valued and in the same manner as that of an individual.
(d) Real property owned by the Republic of the Philippines,
instrumentalities and political subdivisions, the beneficial use of
which has been granted, for consideration or otherwise, to a
taxable person, shall be listed, valued and assessed in the name of
the possessor, grantee or of the public entity if such property has
been acquired or held for resale or lease.
SECTION 206. Proof of Exemption of Real Property from Taxation. - Every
person by or for whom real property is declared, who shall claim tax
exemption for such property under this Title shall file with the provincial,
city or municipal assessor within thirty (30) days from the date of the
declaration of real property sufficient documentary evidence in support of
such claim including corporate charters, title of ownership, of
incorporation, bylaws, contracts, affidavits, certifications and mortgage
deeds, and similar documents. If the required evidence is not submitted
within the period herein prescribed, the property shall be listed as taxable
in the assessment roll. However, if the property shall be proven to be tax
exempt, the same shall be dropped from the assessment roll.
SECTION 207. Real Property Identification System. - All declarations of real
property made under the provisions of this Title shall be kept and filed

98
under a uniform classification system to be established by the provincial,
city or municipal assessor.
SECTION 208. Notification of Transfer of Real Property Ownership. - Any
person who shall transfer real property ownership to another shall notify
the provincial, city or municipal assessor concerned within sixty (60) days
from the date of such transfer. The notification shall include the mode of
transfer, the description of the property alienated, the name and address
of the transferee.
SECTION 209. Duty of Registrar of Deeds to Apprise Assessor of Real
Property Listed in Registry. - (a) To ascertain whether or not any real
property entered in the Registry of Property has escaped discovery and
listing for the purpose of taxation, the Registrar of Deeds shall prepare
and submit to the provincial, city or municipal assessor, within six (6)
months from the date of effectivity of this Code and every year thereafter,
an abstract of his registry, which shall include brief but sufficient
description of the real properties entered therein, present owners, and the
dates of their most recent transfer or alienation accompanied by copies of
corresponding deeds of sale, donation, or partition or other forms of
alienation.
(b) It shall also be the duty of the Registrar of Deeds to require every
person who shall present for registration a document of transfer,
alienation, or encumbrance of real property to accompany the same
with a certificate to the effect that the real property subject of the
transfer, alienation, or encumbrance, as the case may be, has
been fully paid of all real property taxes due thereon. Failure to
provide such certificate shall be a valid cause for the Registrar of
Deeds to refuse the registration of the document.
SECTION 210. Duty of Official Issuing Building Permit or Certificate of
Registration of Machinery to Transmit Copy to Assessor. - Any public
official or employee who may now or hereafter be required by law or
regulation to issue to any person a permit for the construction, addition,
repair, or renovation of a building, or permanent improvement on land, or
a certificate of registration for any machinery, including machines,
mechanical contrivances, and apparatus attached or affixed on land or to
another real property, shall transmit a copy of such permit or certificate
within thirty (30) days of its issuance, to the assessor of the province, city
or municipality where the property is situated.
SECTION 211. Duty of Geodetic Engineers to Furnish Copy of Plans to
Assessor. - It shall be the duty of all geodetic engineers, public or private,
to furnish free of charge to the assessor of the province, city or
municipality where the land is located with a white or blue print copy of

99
each of all approved original or subdivision plans or maps of surveys
executed by them within thirty (30) days from receipt of such plans from
the Lands Management Bureau, the Land Registration Authority, the
Housing and Land Use Regulatory Board, as the case may be.
SECTION 212. Preparation of Schedule of Fair Market Values. - Before any
general revision of property assessment is made pursuant to the
provisions of this Title, there shall be prepared a schedule of fair market
values by the provincial, city and the municipal assessors of the
municipalities within the Metropolitan Manila Area for the different classes
of real property situated in their respective local government units for
enactment by ordinance of the Sanggunian concerned. The schedule of
fair market values shall be published in a newspaper of general circulation
in the province, city or municipality concerned, or in the absence thereof,
shall be posted in the provincial capitol, city or municipal hall and in two
other conspicuous public places therein.
SECTION 213. Authority of Assessor to Take Evidence. - For the purpose of
obtaining information on which to base the market value of any real
property, the assessor of the province, city or municipality or his deputy
may summon the owners of the properties to be affected or persons
having legal interest therein and witnesses, administer oaths, and take
deposition concerning the property, its ownership, amount, nature, and
value.
SECTION 214. Amendment of Schedule of Fair Market Values. - The
provincial, city or municipal assessor may recommend to the Sanggunian
concerned amendments to correct errors in valuation in the schedule of
fair market values. The Sanggunian concerned shall, by ordinance, act
upon the within ninety (90) days from receipt thereof.
SECTION 215. Classes of Real Property for Assessment Purposes. - For
purposes of assessment, real property shall be classified as residential,
agricultural, commercial, industrial, mineral, or special. The city or
municipality within the Metropolitan Manila Area, through their respective
Sanggunian, have the power to classify lands as residential, agricultural,
commercial, industrial, mineral, timberland, or special in accordance with
their zoning ordinances.
SECTION 216. Special Classes of Real Property. - All lands, buildings, and
other improvements actually, directly and exclusively used for hospitals,
cultural, or scientific purposes, and those owned and used by local water
districts, and government-owned or -controlled corporations rendering
essential public services in the supply and distribution of water and/or
generation and transmission of electric power shall be classified as
special.

100
SECTION 217. Actual Use of Real Property as Basis for Assessment. - Real
property shall be classified, valued and assessed on the basis of its actual
use regardless of where located, whoever owns it, and whoever uses it.
SECTION 218. Assessment Levels. - The assessment levels to be applied to
the fair market value of real property to determine its assessed value shall
be fixed by ordinances of the Sangguniang Panlalawigan, Sangguniang
panlungsod or Sangguniang bayan of a municipality within the
Metropolitan Manila Area, at the rates not exceeding the following:
(a) (a) On Lands:
CLASS ASSESSMENT
LEVELS
Residential 20%
Agricultural 40%
Commercial 50%
Industrial 50%
Mineral 50%
Timberland 20%
(b) On Buildings and Other Structures:
(1) Residential
Fair Market Value
Over Not Over Assessment
Levels
P 175,000.00 0%
P 175,000.00 300,000.00 10%
300,000.00 500,000.00 20%
500,000.00 750,000.00 25%
750,000.00 1,000,000.00 30%
1,000,000.00 2,000,000.00 35%
2,000,000.00 5,000,000.00 40%
5,000,000.00 10,000.000.00 50%
10,000,000.00 60%
(2) Agricultural
Fair Market Value

101
Levels
300,000.00 25%
P 300,000.00 500,000.00 30%
500,000.00 750,000.00 35%
750,000.00 1,000,000.00 40%
1,000,000.00 2,000,000.00 45%
2,000,000.00 50%
(3) Commercial / Industrial
Fair Market Value
Levels
300,000.00 30%
P 300,000.00 500,000.00 35%
500,000.00 750,000.00 40%
750,000.00 1,000,000.00 50%
1,000,000.00 2,000,000.00 60%
2,000,000.00 5,000,000.00 70%
5,000,000.00 10,000.000.00 75%
10,000,000.00 80%
(4) Timber land
Fair Market Value
Levels
300,000.00 45%
P 300,000.00 500,000.00 50%
500,000.00 750,000.00 55%
750,000.00 1,000,000.00 60%
1,000,000.00 2,000,000.00 65%
2,000,000.00 5,000,000.00 70%
5,000,000.00 10,000.000.00 50%
10,000,000.00 60%
(b) (b) On Machineries
CLASS ASSESSMENT
LEVELS

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Agricultural 40%
Residential 50%
Commercial 80%
Industrial 80%
(d) On Special Classes: The assessment levels for all lands, buildings,
machineries and other improvements;
ACTUAL USE ASSESSMENT
LEVELS
Cultural 15%
Scientific 15%
Hospital 15%
Local water districts 10%
Government-owned or controlled
corporations engaged in the supply and
distribution of water and/or generation and
transmission of electric power
10%
SECTION 219. General Revision of assessments and Property
Classification. - The provincial, city or municipal assessor shall undertake
a general revision of real property assessments within two (2) years after
the effectivity of this Code and every three (3) years thereafter.
SECTION 220. Valuation of Real Property. - In cases where (a) real property is
declared and listed for taxation purposes for the first time; (b) there is an
ongoing general revision of property classification and assessment; or (c)
a request is made by the person in whose name the property is declared,
the provincial, city or municipal assessor or his duly authorized deputy
shall, in accordance with the provisions of this Chapter, make a
classification, appraisal and assessment of the real property listed and
described in the declaration irrespective of any previous assessment or
taxpayer's valuation thereon: Provided, however, That the assessment of
real property shall not be increased oftener than once every three (3)
years except in case of new improvements substantially increasing the
value of said property or of any change in its actual use.
SECTION 221. Date of Effectivity of Assessment or Reassessment. - All
assessments or reassessments made after the first (1st) day of January of
any year shall take effect on the first (1st) day of January of the
succeeding year: Provided, however, That the reassessment of real
property due to its partial or total destruction, or to a major change in its
actual use, or to any great and sudden inflation or deflation of real
property values, or to the gross illegality of the assessment when made or

103
to any other abnormal cause, shall be made within ninety (90) days from
the date any such cause or causes occurred, and shall take effect at the
beginning of the quarter next following the reassessment.
SECTION 222. Assessment of Property Subject to Back Taxes. - Real
property declared for the first time shall be assessed for taxes for the
period during which it would have been liable but in no case for more than
ten (10) years prior to the date of initial assessment: Provided, however,
That such taxes shall be computed on the basis of the applicable schedule
of values in force during the corresponding period. If such taxes are paid
on or before the end of the quarter following the date the notice of
assessment was received by the owner or his representative, no interest
for delinquency shall be imposed thereon; otherwise, such taxes shall be
subject to an interest at the rate of two percent (2%) per month or a
fraction thereof from the date of the receipt of the assessment until such
taxes are fully paid.
SECTION 223. Notification of New or Revised Assessment. - When real
property is assessed for the first time or when an existing assessment is
increased or decreased, the provincial, city or municipal assessor shall
within thirty (30) days give written notice of such new or revised
assessment to the person in whose name the property is declared. The
notice may be delivered personally or by registered mail or through the
assistance of the punong Barangay to the last known address of the
person to be served.
SECTION 224. Appraisal and Assessment of Machinery. - (a) The fair market
value of a brand-new machinery shall be the acquisition cost. In all other
cases, the fair market value shall be determined by dividing the remaining
economic life of the machinery by its estimated economic life and
multiplied by the replacement or reproduction cost.
(b) If the machinery is imported, the acquisition cost includes freight,
insurance, bank and other charges, brokerage, arrastre and
handling, duties and taxes, plus cost of inland transportation,
handling, and installation charges at the present site. The cost in
foreign currency of imported machinery shall be converted to peso
cost on the basis of foreign currency exchange rates as fixed by the
Central Bank.
SECTION 225. Depreciation Allowance for Machinery. - For purposes of
assessment, a allowance shall be made for machinery at a rate not
exceeding five percent (5%) of its original cost or its replacement or
reproduction cost, as the case may be, for each year of use: Provided,
however, That the remaining value for all kinds of machinery shall be
fixed at not less than twenty percent (20%) of such original, replacement,

104
or reproduction cost for so long as the machinery is useful and in
operation.
CHAPTER 3 - ASSESSMENT APPEALS
SECTION 226. Local Board of Assessment Appeals. - Any owner or person
having legal interest in the property who is not satisfied with the action of
the provincial, city or municipal assessor in the assessment of his property
may, within sixty (60) days from the date of receipt of the written notice of
assessment, appeal to the Board of Assessment appeals of the province
or city by filing a petition under oath in the form prescribed for the purpose,
together with copies of the tax declarations and such affidavits or
documents submitted in support of the appeal.
SECTION 227. Organization, Powers, Duties, and Functions of the Local
Board of Assessment Appeals. - (a) The Board of Assessment appeals
of the province or city shall be composed of the Registrar of Deeds, as
Chairman, the provincial or city prosecutor and the provincial, or city
engineer as members, who shall serve as such in an ex officio capacity
without additional compensation.
(b) The chairman of the Board shall have the power to designate any
employee of the province or city to serve as secretary to the Board
also without additional compensation.
(c) The chairman and members of the Board of Assessment appeals of
the province or city shall assume their respective positions without
need of further appointment or special designation immediately
upon effectivity of this Code. They shall take an oath or affirmation
of office in the prescribed form.
(d) In provinces and cities without a provincial or city engineer, the
district engineer shall serve as member of the Board.
absence of the Registrar of Deeds, or the provincial
prosecutor, or the provincial or city engineer, or the
In the
or city
district
engineer, the persons performing their duties, whether in an acting
capacity or as a duly designated officer-in-charge, shall
automatically become the chairman or member, respectively, of the
said Board, as the case may be.
SECTION 228. Meetings and Expenses of the Local Board of Assessment
Appeals. - (a) The Board of Assessment appeals of the province or city
shall meet once a month and as often as may be necessary for the prompt
disposition of appealed cases. No member of the Board shall be entitled to
per diems or traveling expenses for his attendance in Board meetings,

105
except when conducting an ocular inspection in connection with a case
under appeal.
(b) All expenses of the Board shall be charged against the general
fund of the province or city, as the case may be. The Sanggunian
concerned shall appropriate the necessary funds to enable the
Board in their respective localities to operate effectively.
SECTION 229. Action by the Local Board of Assessment Appeals. - (a) The
Board shall decide the appeal within one hundred twenty (120) days from
the date of receipt of such appeal. The Board, after hearing, shall render
its decision based on substantial evidence or such relevant evidence on
record as a reasonable mind might accept as adequate to support the
conclusion.
(b) In the exercise of its appellate jurisdiction, the Board shall have the
power to summon witnesses, administer oaths, conduct ocular
inspection, take depositions, and issue subpoena and subpoena
duces tecum. The proceedings of the Board shall be conducted
solely for the purpose of ascertaining the facts without necessarily
adhering to technical rules applicable in judicial proceedings.
(c) The secretary of the Board shall furnish the owner of the property
or the person having legal interest therein and the provincial or city
assessor with a copy of the decision of the Board. In case the
provincial or city assessor concurs in the revision or the
assessment, it shall be his duty to notify the owner of the property
or the person having legal interest therein of such fact using the
form prescribed for the purpose. The owner of the property or the
person having legal interest therein or the assessor who is not
satisfied with the decision of the Board, may, within thirty (30) days
after receipt of the decision of said Board, appeal to the Central
Board of Assessment appeals, as herein provided. The decision of
the Central Board shall be final and executory.
SECTION 230. Central Board of Assessment Appeals.- The Central Board of
Assessment appeals shall be composed of a chairman and two (2)
members to be appointed by the President, who shall serve for a term of
seven (7) years, without reappointment. Of those first appointed, the
chairman shall hold office for seven (7) years, one member for five (5)
years, and the other member for three (3) years. Appointment to any
vacancy shall be only for the unexpired portion of the term of the
predecessor. In no case shall any member be appointed or designated in
a temporary or acting capacity. The chairman and the members of the
Board shall be Filipino citizens, at least forty (40) years old at the time of
their appointment, and members of the Bar or Certified Public Accountants

106
for at least ten (10) years immediately preceding their appointment. The
chairman of the Board of Assessment appeals shall have the salary grade
equivalent to the rank of Director III under the Salary Standardization Law
exclusive of allowances and other emoluments. The members of the
Board shall have the salary grade equivalent to the rank of Director II
under the Salary Standardization Law exclusive of allowances and other
emoluments. The Board shall have appellate jurisdiction over all
assessment cases decided by the Local Board of Assessment appeals.
There shall be Hearing Officers to be appointed by the Central Board of
Assessment appeals to civil service laws, rules and regulations, one each
for Luzon, Visayas and Mindanao, who shall hold office in Manila, Cebu
City and Cagayan de Oro City, respectively, and who shall serve for a
term of six (6) years, without reappointment until their successors have
been appointed and qualified. The Hearing Officers shall have the same
qualifications as that of the Judges of the Municipal Trial Courts.
The Hearing Officers shall each have the salary grade equivalent to the
rank of Director I under the Salary Standardization Law exclusive of
allowances and other emoluments. The Hearing Officers shall try and
receive evidences on the appealed assessment cases as may be directed
by the Board.
The Central Board Assessment appeals, in the performance of its powers
and duties, may and organize staffs, offices, units, prescribe the titles,
functions and duties of their members and adopt its own rules and
regulations. Unless otherwise provided by law, the annual appropriations
for the Central Board of Assessment appeals shall be included in the
annual budget of the Department of Finance in the corresponding General
Appropriations Act.
SECTION 231. Effect of appeal on the Payment of Real Property Tax. -
appeal on of real property made under the provisions of this Code shall, in
no case, suspend the collection of the corresponding realty taxes on the
property involved as assessed by the provincial or city assessor, without
prejudice to subsequent adjustment depending upon the final outcome of
the appeal.
CHAPTER 4 - Imposition of Real Property Tax
SECTION 232. Power to Levy Real Property Tax. - A province or city or a
municipality within the Metropolitan Manila Area may levy an annual ad
valorem tax on real property such as land, building, machinery, and other
improvement not hereinafter specifically exempted.

107
SECTION 233. Rates of Levy. - A province or city or a municipality within the
Metropolitan Manila Area shall fix a uniform rate of basic real property tax
applicable to their respective localities as follows:
(a) In the case of a province, at the rate not exceeding one percent
(1%) of the assessed value of real property; and
(b) In the case of a city or a municipality within the Metropolitan Manila
Area, at the rate not exceeding two percent (2%) of the assessed
value of real property.
SECTION 234. Exemptions from Real Property Tax. - The following are
exempted from payment of the real property tax:
(a) Real property owned by the Republic of the Philippines or any of its
political subdivisions except when the beneficial use thereof has
been granted, for consideration or otherwise, to a taxable person;
(b) Charitable institutions, churches, parsonages or convents
appurtenant thereto, mosques, nonprofit or religious cemeteries
and all lands, buildings, and improvements actually, directly, and
exclusively used for religious, charitable or educational purposes;
(c) All machineries and equipment that are actually, directly and
exclusively used by local water districts and government-owned or -
controlled corporations engaged in the supply and distribution of
water and/or generation and transmission of electric power;
(d) All real property owned by duly registered cooperatives as provided
for under R. A. No. 6938; and
(e) Machinery and
environmental protection. Except as provided
equipment used for pollution control and
herein, any
exemption from payment of real property tax previously granted to,
or presently enjoyed by, all persons, whether natural or juridical,
including all government-owned or -controlled corporations are
hereby withdrawn upon the effectivity of this Code.
CHAPTER 5 - SPECIAL LEVIES ON REAL PROPERTY
SECTION 235. Additional Levy on Real Property for the Special Education
Fund. - A province or city, or a municipality within the Metropolitan Manila
Area, may levy and collect an annual tax of one percent (1%) on the
assessed value of real property which shall be in addition to the basic real

108
property tax. The proceeds thereof shall exclusively accrue to the Special
Education Fund (SEF).
SECTION 236. Additional Ad Valorem Tax on Idle Lands. - A province or city,
or a municipality the Metropolitan Manila Area, may levy an annual tax on
idle lands at the rate not exceeding five percent (5%) of the assessed
value of the property which shall be in addition to the basic real property
tax.
SECTION 237. Idle Lands, Coverage. - For purposes of real property taxation,
idle lands shall the following: a) "Agricultural lands, more than one (1)
hectare in area, suitable for cultivation, dairying, inland fishery, and other
agricultural uses, one-half (1/2) of which remain uncultivated or
unimproved by the owner of the property or person having legal interest
therein." Agricultural lands planted to permanent or perennial crops with at
least fifty (50) trees to a hectare shall not be considered idle lands. Lands
actually used for grazing purposes shall likewise not be considered idle
lands.
(b) Lands, other than agricultural, located in a city or municipality, more
than one thousand 1,000) square meters in area one-half (1/2) of
which remain unutilized or unimproved by the owner of the property
or person having legal interest therein. Regardless of land area,
this Section shall likewise apply to residential lots in subdivisions
duly approved by proper authorities, the ownership of which has
been transferred to individual owners, who shall be liable for the
additional tax: Provided, however, That individual lots of such
subdivisions, the ownership of which has not been transferred to
the buyer shall be considered as part of the subdivision, and shall
be subject to the additional tax payable by
subdivision owner or operator.
SECTION 238. Idle Lands Exempt from Tax. - A province or city or a
municipality within the Metropolitan Manila Area may exempt idle lands
from the additional levy by reason of force majeure, civil disturbance,
natural calamity or any cause or circumstance which physically or legally
prevents the owner of the property or person having legal interest therein
from improving, utilizing or cultivating the same.
SECTION 239. Listing of Idle Lands by the Assessor. - The provincial, city or
municipal assessor shall make and keep an updated record of all idle
lands located within his area of jurisdiction. For purposes of collection, the
provincial, city or municipal assessor shall furnish a copy thereof to the
provincial or city treasurer who shall notify, on the basis of such record,
the owner of the property or person having legal interest therein of the
imposition of the additional tax.

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SECTION 240. Special Levy by Local Government Units. - A province, city or
municipality may a special levy on the lands comprised within its territorial
jurisdiction specially benefited by public works projects or improvements
funded by the local government unit concerned: Provided, however, That
the special levy shall not exceed sixty percent (60%) of the actual cost of
such projects and improvements, including the costs of acquiring land and
such other real property in connection therewith: Provided, further, That
the special levy shall not apply to lands exempt from basic real property
tax and the remainder of the land portions of which have been donated to
the local government unit concerned for the construction of such
projects or improvements.
SECTION 241. Ordinance Imposing a Special Levy. - A tax ordinance
imposing a special levy shall describe with reasonable accuracy the
nature, extent, and location of the public works projects or improvements
to be undertaken, state the estimated cost thereof, specify the metes and
bounds by monuments and lines and the number of annual installments
for the payment of the special levy which in no case shall be less than five
(5) nor more than ten (10) years. The Sanggunian concerned shall not be
obliged, in the apportionment and computation of the special levy, to
establish a uniform percentage of all lands subject to the payment of the
tax for the entire district, but it may fix different rates for different parts or
sections thereof, depending on whether such land is more or less
benefited by the proposed work.
SECTION 242. Publication of Proposed Ordinance Imposing a Special Levy.
- Before the of an imposing a special levy, the Sanggunian concerned
shall conduct a public hearing thereon; notify in writing the owners of the
real property to be affected or the persons having legal interest therein as
to the date and place thereof and afford the latter the opportunity to
express their positions or objections relative to the proposed ordinance.
SECTION 243. Fixing the Amount of Special Levy. - The special levy
authorized herein shall be apportioned, computed, and assessed
according to the assessed valuation of the lands affected as shown by
the books of the assessor concerned, or its current assessed value as
fixed by said assessor if the property does not appear of record in his
books. Upon the effectivity of the ordinance imposing special levy, the
assessor concerned shall forthwith proceed to determine the annual
amount of special levy assessed against each parcel of land comprised
within the area especially benefited and shall send to each landowner a
written notice thereof by mail, personal service or publication in
appropriate cases.

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SECTION 244. Taxpayers' Remedies Against Special Levy. - Any owner of
real property affected a special levy or any person having a legal interest
therein may, upon receipt of the written notice of assessment of the
special levy, avail of the remedies provided for in Chapter 3, Title Two,
Book II of this Code.
SECTION 245. Accrual of Special Levy. -The special levy shall accrue on the
first day of the next following the effectivity of the ordinance imposing such
levy.
CHAPTER 6 - COLLECTION OF REAL PROPERTY TAX
SECTION 246. Date of Accrual of Tax.- The real property tax for any year shall
accrue on the first day of January and from that date it shall constitute a
lien on the property which shall be superior to any other lien, mortgage, or
encumbrance of any kind whatsoever, and shall be extinguished only
upon the payment of the delinquent tax.
SECTION 247. Collection of Tax. - The collection of the real property tax with
interest thereon and related expenses, and the enforcement of the
remedies provided for in this Title or any applicable laws, shall be the
responsibility of the city or municipal treasurer concerned. The city or
municipal treasurer may deputize the Barangay treasurer to collect all
taxes on real property located in the Barangay: Provided, That the
Barangay treasurer is properly bonded for the purpose: Provided, further,
That the premium on the bond shall be paid by the city or municipal
government concerned.
SECTION 248. Assessor to Furnish Local Treasurer with Assessment Roll. -
The provincial, city or municipal assessor shall prepare and submit to the
treasurer of the local government unit, on or before the thirty-first (31st)
day of December each year, an assessment roll containing a list of all
persons whose real properties have been newly assessed or reassessed
and the values of such properties.
SECTION 249. Notice of Time for Collection of Tax. - The city or municipal
treasurer shall, on or before the thirty-first (31st) day of January each year,
in the case of the basic real property tax and the additional tax for the
Special Education Fund (SEF) or on any other date to be prescribed by
the Sanggunian concerned in the case of any other tax levied under this
Title, post the notice of the dates when the tax may be paid without
interest at a conspicuous and publicly accessible place at the city or
municipal hall. Said notice shall likewise be published in a newspaper of
general circulation in the locality once a week for two (2) consecutive
weeks.

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SECTION 250. Payment of Real Property Taxes in Installments. - The owner
of the real property or the person having legal interest therein may pay the
basic real property tax and the additional tax for Special Education Fund
(SEF) due thereon without interest in four (4) equal installments; the first
installment to be due and payable on or before March Thirty-first (31st);
the second installment, on or before June Thirty (30); the third installment,
on or before September Thirty (30); and the last installment on or before
December Thirty-first (31st), except the special levy the payment of which
shall be governed by ordinance of the Sanggunian concerned. The date
for the payment of any other tax imposed under this Title without interest
shall be prescribed by the Sanggunian concerned. Payments of real
property taxes shall first be applied to prior years delinquencies, interests,
and penalties, if any, and only after said delinquencies are settled may tax
payments be credited for the current period.
SECTION 251. Tax Discount for Advanced Prompt Payment. - If the basic
real property tax and the additional tax accruing to the Special Education
Fund (SEF) are paid in advance in accordance with the prescribed
schedule of payment as provided under Section 250, the Sanggunian
concerned may grant a discount not exceeding twenty percent (20%) of
the annual tax due.
SECTION 252. Payment Under Protest. - (a) No protest shall be entertained
unless the taxpayer first pays the tax. There shall be annotated on the tax
receipts the words "paid under protest". The protest in writing must be filed
within thirty (30) days from payment of the tax to the provincial, city
treasurer or municipal treasurer, in the case of a municipality within
Metropolitan Manila Area, who shall decide the protest within sixty (60)
days from receipt.
(b) The tax or a portion thereof paid under protest, shall be held in trust
by the treasurer concerned.
(c) In the event that the protest is finally decided in favor of the
taxpayer, the amount or portion of the tax protested shall be
refunded to the protestant, or applied as tax credit against his
existing or future tax liability.
(d) In the event that the protest is denied or upon the lapse of the sixty
day period prescribed in subparagraph (a), the taxpayer may avail
of the remedies as provided for in Chapter 3, Title II, Book II of this
Code.
SECTION 253. Repayment of Excessive Collections. - When an assessment
of basic real property tax, or any other tax levied under this Title, is found

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to be illegal or erroneous and the tax is accordingly reduced or adjusted,
the taxpayer may file a written claim for refund or credit for taxes and
interests with the provincial or city treasurer within two (2) years from the
date the taxpayer is entitled to such reduction or adjustment. The
provincial or city treasurer shall decide the claim for tax refund or credit
within sixty (60) days from receipt thereof. In case the claim for tax refund
or credit is denied, the taxpayer may avail of the remedies as provided in
Chapter 3, II, Book II of this Code.
SECTION 254. Notice of Delinquency in the Payment of the Real Property
Tax. - (a) When the real property tax or any other tax imposed under this
Title becomes delinquent, the provincial, city or municipal treasurer shall
immediately cause a notice of the delinquency to be posted at the main
entrance of the provincial capitol, or city or municipal hall and in a publicly
accessible and conspicuous place in each Barangay of the local
government unit concerned. The notice of delinquency shall also be
published once a week for two (2) consecutive weeks, in a newspaper of
general circulation in the province, city, or municipality.
(b) Such notice shall specify the date upon which the tax became
delinquent and shall state that personal property may be distrained
to effect payment. It shall likewise state that at any time before the
distraint of personal property, payment of the tax with surcharges,
interests and penalties may be made in accordance with the next
following Section, and unless the tax, surcharges and penalties are
paid before the expiration of the year for which the tax is due
except when the notice of assessment or special levy is contested
administratively or judicially pursuant to the provisions of Chapter 3,
Title II, Book II of this Code, the delinquent real property will be sold
at public auction, and the title to the property will be vested in the
purchaser, subject, however, to the right of the delinquent owner of
the property or any person having legal interest therein to redeem
the property within one (1) year from the date of sale.
SECTION 255. Interests on Unpaid Real Property Tax. - In case of failure to
pay the basic real property tax or any other tax levied under this Title upon
the expiration of the periods as provided in Section 250, or when due, as
the case may be, shall subject the taxpayer to the payment of interest at
the rate of two percent (2%) per month on the unpaid amount or a fraction
thereof, until the delinquent tax shall have been fully paid: Provided,
however, That in no case shall the total interest on the unpaid tax or
portion thereof exceed thirty-six (36) months.
SECTION 256. Remedies For The Collection Of Real Property Tax. - For the
collection of the basic real property tax and any other tax levied under this

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Title, the local government unit concerned may avail of the remedies by
administrative action thru levy on real property or by judicial action.
SECTION 257. Local Governments Lien. - The basic real property tax and any
other tax levied under this Title constitutes a lien on the property subject to
tax, superior to all liens, charges or encumbrances in favor of any person,
irrespective of the owner or possessor thereof, enforceable by
administrative or judicial action, and may only be extinguished upon
payment of the tax and the related interests and expenses.
SECTION 258. Levy on Real Property. - After the expiration of the time required
to pay the basic real property tax or any other tax levied under this Title,
real property subject to such tax may be levied upon through the issuance
of a warrant on or before, or simultaneously with, the institution of the civil
action for the collection of the delinquent tax. The provincial or city
treasurer, or a treasurer of a municipality within the Metropolitan Manila
Area, as the case may be, when issuing a warrant of levy shall prepare a
duly authenticated certificate showing the name of the delinquent owner of
the property or person having legal interest therein, the description of
the property, the amount of the tax due and the interest thereon. The
warrant shall operate with the force of a legal execution throughout the
province, city or a municipality within the Metropolitan Manila Area. The
warrant shall be mailed to or served upon the delinquent owner of the real
property or person having legal interest therein, or in case he is out of the
country or cannot be located, to the administrator or occupant of the
property. At the same time, written notice of the levy with the attached
warrant shall be mailed to or served upon the assessor and the Registrar
of Deeds of the province, city or a municipality within the Metropolitan
Manila Area where the property is located, who shall annotate the levy on
the tax declaration and certificate of title of the property, respectively. The
levying officer shall submit a report on the levy to the Sanggunian
concerned within ten (10) days after receipt of the warrant by the owner of
the property or person having legal interest therein.
SECTION 259. Penalty for Failure to Issue and Execute Warrant. - Without
prejudice to criminal prosecution under the Revised Penal Code and other
applicable laws, any local treasurer or his deputy who fails to issue or
execute the warrant of levy within one (1) year from the time the tax
becomes delinquent or within thirty (30) days from the date of the
issuance thereof, or who is found guilty of abusing the exercise thereof in
an administrative or judicial proceeding shall be dismissed from the
service.
SECTION 260. Advertisement and Sale. - Within thirty (30) days after service of
the warrant of levy, the local treasurer shall proceed to publicly advertise
for sale or auction the property or a usable portion thereof as may be

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necessary to satisfy the tax delinquency and expenses of sale. The
advertisement shall be effected by posting a notice at the main entrance of
the provincial, city or municipal building, and in a publicly accessible and
conspicuous place in the Barangay where the real property is located, and
by publication once a week for two (2) weeks in a newspaper of general
circulation in the province, city or municipality where the property is
located. The advertisement shall specify the amount of the delinquent tax,
the interest due thereon and expenses of sale, the date and place of sale,
the name of the owner of the real property or person having legal interest
therein, and a description of the property to be sold. At any time before the
date fixed for the sale, the owner of the real property or person having
legal interest therein may stay the proceedings by paying the delinquent
tax, the interest due thereon and the expenses of sale. The sale shall be
held either at the main entrance of the provincial, city or municipal
building, or on the property to be sold, or at any other place as specified in
the notice of the sale.
Within thirty (30) days after the sale, the local treasurer or his deputy shall
make a report of the sale to the Sanggunian concerned, and which shall
form part of his records. The local treasurer shall likewise prepare and
deliver to the purchaser a certificate of sale which shall contain the name
of the purchaser, a description of the property sold, the amount of the
delinquent tax, the interest due thereon, the expenses of sale and a brief
description of the proceedings: Provided, however, That proceeds of the
sale in excess of the delinquent tax, the interest due thereon, and the
expenses of sale shall be remitted to the owner of the real property or
person having legal interest therein. The local treasurer may, by ordinance
duly approved, advance an amount sufficient to defray the costs of
collection thru the remedies provided for in this Title, including the
expenses of advertisement and sale.
SECTION 261. Redemption of Property Sold. - Within one (1) year from the
date of sale, the owner of the delinquent real property or person having
legal interest therein, or his representative, shall have the right to redeem
the property upon payment to the local treasurer of the amount of the
delinquent tax, including the interest due thereon, and the expenses of
sale from the date of delinquency to the date of sale, plus interest of not
more than two percent (2%) per month on the purchase price from the
date of sale to the date of redemption. Such payment shall invalidate the
certificate of sale issued to the purchaser and the owner of the delinquent
real property or person having legal interest therein shall be entitled to a
certificate of redemption which shall be issued by the local treasurer or his
deputy. From the date of sale until the expiration of the period of
redemption, the delinquent real property shall remain in the possession of
the owner or person having legal interest therein who shall be entitled to
the income and other fruits thereof. The local treasurer or his deputy, upon

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receipt from the purchaser of the certificate of sale, shall forthwith return to
the latter the entire amount paid by him plus interest of not more than two
percent (2%) per month. Thereafter, the property shall be free from the
lien of such delinquent tax, interest due thereon and expenses of sale.
SECTION 262. Final Deed to Purchaser. - In case the owner or person having
legal interest fails to redeem the delinquent property as provided herein,
the local treasurer shall execute a deed conveying to the purchaser said
property, free from lien of the delinquent tax, interest due thereon and
expenses of sale. The deed shall briefly state the proceedings upon which
the validity of the sale rests.
SECTION 263. Purchase of Property By the Local Government Units for
Want of Bidder. - In case there is no bidder for the real property
advertised for sale as provided herein, or if the highest bid is for an
amount insufficient to pay the real property tax and the related interest and
costs of sale the local treasurer conducting the sale shall purchase the
property in behalf of the local government unit concerned to satisfy the
claim and within two (2) days thereafter shall make a report of his
proceedings which shall be reflected upon the records of his office. It shall
be the duty of the Registrar of Deeds concerned upon registration with his
office of any such declaration of forfeiture to transfer the title of the
forfeited property to the local government unit concerned without the
necessity of an order from a competent court.
Within one (1) year from the date of such forfeiture, the taxpayer or any of
his representative, may redeem the property by paying to the local
treasurer the full amount of the real property tax and the related interest
and the costs of sale. If the property is not redeemed as provided herein,
the ownership thereof shall be fully vested on the local government unit
concerned.
SECTION 264. Resale of Real Estate Taken for Taxes, Fees, or Charges. -
The Sanggunian concerned may, by ordinance duly approved, and upon
notice of not less than twenty (20) days, sell and dispose of the real
property acquired under the preceding section at public auction. The
proceeds of the sale shall accrue to the general fund of the local
government unit concerned.
SECTION 265. Further Distraint or Levy. - Levy may be repeated if necessary
until the full due, including all expenses, is collected.
SECTION 266. Collection of Real Property Tax Through the Courts. - The
local government unit concerned may enforce the collection of the basic
real property tax or any other tax levied under this Title by civil action in

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any court of competent jurisdiction. The civil action shall be filed by the
local treasurer within the period prescribed in Section 270 of this Code.
SECTION 267. Action Assailing Validity of Tax Sale. - No court shall entertain
any action assailing the validity of any sale at public auction of real
property or rights therein under this Title until the taxpayer shall have
deposited with the court the amount for which the real property was sold,
together with interest of two percent (2%) per month from the date of sale
to the time of the institution of the action. The amount so deposited shall
be paid to the purchaser at the auction sale if the deed is declared invalid
but it shall be returned to the depositor if the action fails. Neither shall any
court declare a sale at public auction invalid by reason of irregularities or
informalities in the proceedings unless the substantive rights of the
delinquent owner of the real property or the person having legal interest
therein have been impaired.
SECTION 268. Payment of Delinquent Taxes on Property Subject of
Controversy. - In any action involving the ownership or possession of, or
succession to, real property, the court may, motu propio or upon
representation of the provincial, city, or municipal treasurer or his deputy,
award such ownership, possession, or succession to any party to the
action upon payment to the court of the taxes with interest due on the
property and all other costs that may have accrued, subject to the final
outcome of the action.
SECTION 269. Treasurer to Certify Delinquencies Remaining Uncollected. -
The provincial, city or municipal treasurer or their deputies shall prepare a
certified list of all real property tax delinquencies which remained
uncollected or unpaid for at least one (1) year in his jurisdiction, and a
statement of the reason or reasons for such non-collection or non-
payment, and shall submit the same to the Sanggunian concerned on or
before December thirty-first (31st) of the year immediately succeeding the
year in which the delinquencies were incurred, with a request for
assistance in the enforcement of the remedies for collection provided
herein.
SECTION 270. Periods Within Which To Collect Real Property Taxes. - The
basic real property tax and any other tax levied under this Title shall be
collected within five (5) years from the date they become due. No action
for the collection of the tax, whether administrative or judicial, shall be
instituted after the expiration of such period. In case of fraud or intent to
evade payment of the tax, such action may be instituted for the collection
of the same within ten (10) years from the discovery of such fraud or intent
to evade payment. The period of prescription within which to collect shall
be suspended for the time during which:

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(1) The local treasurer is legally prevented from collecting the tax;
(2) The owner of the property or the person having legal interest
therein requests for reinvestigation and executes a waiver in writing
before the expiration of the period within which to collect; and
(3) The owner of the property or the person having legal interest
therein is out of the country or otherwise cannot be located.
CHAPTER 7 - DISPOSITION OF PROCEEDS
SECTION 271. Distribution of Proceeds. - The proceeds of the basic real
property tax, including interest thereon, and proceeds from the use, lease
or disposition, sale or redemption of property acquired at a public auction
in accordance with the provisions of this Title by the province or city or a
municipality within the Metropolitan Manila Area shall be distributed as
follows:
(a) (a) In the case of provinces:
(1) province - Thirty-five percent (35%) shall accrue to the
general fund;
(2) municipality - Forty percent (40%) to the general fund of the
municipality where the property is located; and
(3) Barangay - Twenty-five percent (25%) shall accrue to the
Barangay where the property is located.
(b) In the case of cities:
(1) city - Seventy percent (70%) shall accrue to the general fund
of the city; and
(2) Thirty percent (30%) shall be distributed among the
component Barangays of the cities where the property is
located in the following manner:
(i) Fifty percent (50%) shall accrue to the Barangay
where the property is located;
(ii) Fifty percent (50%) shall accrue equally to all
component Barangays of the city; and

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(c) In the case of a municipality within the Metropolitan Manila Area:
(1) Metropolitan Manila Authority - Thirty-five percent (35%)
shall accrue to the general fund of the authority;
(2) municipality - Thirty-five percent (35%) shall accrue to the
general fund of the municipality where the property is
located;
(3) Barangays - Thirty percent (30%) shall be distributed among
the component Barangays of the municipality where the
property is located in the following manner:
(i) Fifty percent (50%) shall accrue to the Barangay
where the property is located;
(ii) Fifty percent (50%) shall accrue equally to all
component Barangays of the municipality.
(d) The share of each Barangay shall be released, without need of any
further action, directly to the Barangay treasurer on a quarterly
basis within five (5) days after the end of each quarter and shall not
be subject to any lien or holdback for whatever purpose.
SECTION 272. Application of Proceeds of the Additional One Percent SEF
Tax. - The proceeds the additional one percent (1%) tax on real property
accruing to the Special Education Fund (SEF) shall be automatically
released to the local school boards: Provided, That, in case of provinces,
the proceeds shall be divided equally between the provincial and
municipal school boards: Provided, however, That the proceeds shall be
allocated for the operation and maintenance of public schools,
construction and repair of school buildings, facilities and equipment,
educational research, purchase of books and periodicals, and sports
development as determined and approved by the Local School Board.
SECTION 273. Proceeds of the Tax on Idle Lands. - The proceeds of the
additional real property tax on idle lands shall accrue to the respective
general fund of the province or city where the land is located. In the case
of a municipality within the Metropolitan Manila Area, the proceeds shall
accrue equally to the Metropolitan Manila Authority and the municipality
where the land is located.
SECTION 274. Proceeds of the Special Levy. - The proceeds of the special
levy on lands benefited by public works, projects and other improvements
shall accrue to the general fund of the local government unit which
financed such public works, projects or other improvements.

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CHAPTER 8 - SPECIAL PROVISIONS
SECTION 275. General Assessment Revision; Expenses Incident Thereto. -
The Sanggunian of provinces, cities and municipalities within the
Metropolitan Manila Area shall provide the necessary appropriations to
defray the expenses incident to the general revision of real property
assessment. All expenses incident to a general revision of real property
assessments shall, by ordinance of the Sangguniang Panlalawigan, be
apportioned between the province and the municipality on the basis of the
taxable area of the municipality concerned.
SECTION 276. Condonation or Reduction of Real Property Tax and Interest.
- In case of a general failure of crops or substantial decrease in the price
of agricultural or agribased products, or calamity in any province, city, or
municipality, the Sanggunian concerned, by ordinance passed prior to the
first (1st) day of January of any year and upon recommendation of the
Local Disaster Coordinating Council, may condone or reduce, wholly or
partially, the taxes and interest thereon for the succeeding year or years in
the city or municipality affected by the calamity.
SECTION 277. Condonation or Reduction of Tax by the President of the
Philippines. - The of the Philippines may, when public interest so
requires, condone or reduce the real property tax and interest for any year
in any province or city or a municipality within the Metropolitan Manila
Area.
SECTION 278. Duty of Registrar of Deeds and Notaries Public to Assist the
Provincial, City or Municipal Assessor. - It shall be the duty of the
Registrar of Deeds and notaries public to furnish the provincial, city or
municipal assessor with copies of all contracts selling, transferring, or
otherwise conveying, leasing, or mortgaging real property received by, or
acknowledged before them.
SECTION 279. Insurance Companies to Furnish Information. - Insurance
companies are hereby required to furnish the provincial, city or municipal
assessor copies of any contract or policy insurance on buildings,
structures, and improvements insured by them or such other documents
which may be necessary for the proper assessment thereof.
SECTION 280. Fees in Court Actions. - All court actions, criminal or civil,
instituted at the instance of the provincial, city or municipal treasurer or
assessor under the provisions of this Code, shall be exempt from the
payment of court and sheriff's fees.

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SECTION 281. Fees in Registration of Papers or Documents on Sale of
Delinquent Real Property to province, City or municipality. - All
certificates, documents, and papers covering the sale of delinquent
property to the province, city or municipality, if registered in the Registry of
Property, shall be exempt from the documentary stamp tax and
registration fees.
SECTION 282. Real Property Assessment Notices or Owner's Copies of Tax
Declarations to be Exempt from Postal Charges or Fees. - All real
property assessment notices or owner's copies of tax declaration sent
through the mails by the assessor shall be exempt from the payment of
postal charges or fees.
SECTION 283. Sale and Forfeiture Before Effectivity of Code. - Tax
delinquencies incurred, and sales and forfeitures of delinquent real
property effected, before the effectivity of this Code shall be governed by
the provisions of applicable laws then in force.
TITLE III. - SHARES OF LOCAL GOVERNMENT UNITS IN THE
PROCEEDS
OF NATIONAL TAXES
CHAPTER 1 - ALLOTMENT OF INTERNAL REVENUE
SECTION 284. Allotment of Internal Revenue Taxes. - Local government units
shall have a share in the national internal revenue taxes based on the
collection of the third fiscal year preceding the current fiscal year as
follows:
(a) On the first year of the effectivity of this Code, thirty percent (30%);
(b) On the second year, thirty-five percent (35%); and
(c) On the third year and thereafter, forty percent (40%). Provided,
That in the event that the national government incurs an
unmanageable public sector deficit, the President of the Philippines
is hereby authorized, upon the recommendation of Secretary of
Finance, Secretary of Interior and Local Government and
Secretary of Budget and Management, and subject to consultation
with the presiding officers of both Houses of Congress and the
presidents of the liga, to make the necessary adjustments in the
internal revenue allotment of local government units but in no case
shall the allotment be less than thirty percent (30%) of the collection
of national internal revenue taxes of the third fiscal year preceding
the current fiscal year: Provided, further That in the first year of the

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effectivity of this Code, the local government units shall, in addition
to the thirty percent (30%) internal revenue allotment which shall
include the cost of devolved functions for essential public services,
be entitled to receive the amount equivalent to the cost of devolved
personal services.
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 formula:
(a) Population - Fifty percent (50%);
(b) Land Area - Twenty-five percent (25%); and
(c) Equal sharing - Twenty-five percent (25%)
Provided, further, That the share of each Barangay with a
population of not less than one hundred (100) inhabitants
shall not be less than Eighty thousand pesos (P=80,000.00)
per annum chargeable against the twenty percent (20%)
share of the Barangay from the internal revenue allotment,
and the balance to be allocated on the basis of the following
formula:
(a) On the first year of the effectivity of this Code:
(1) Population - Forty percent (40%); and
(2) Equal Sharing - Sixty percent (60%)
(b) On the second year:
(1) Population - Fifty percent (50%); and
(2) Equal Sharing - Fifty percent (50%)
(c) On the third year and thereafter:

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(1) Population - Sixty percent (60%); and
(2) Equal Sharing - Forty percent (40%). Provided,
finally, That the financial requirements of
Barangays created by local government units
after the effectivity of this Code shall be the
responsibility of the local government unit
concerned.
SECTION 286. Automatic Release of Shares. - (a) The share of each local
government unit shall be released, without need of any further action,
directly to the provincial, city, municipal or Barangay treasurer, as the case
may be, on a quarterly basis within five (5) days after the end of each
quarter, and which shall not be subject to any lien or holdback that may be
imposed by the national government for whatever purpose.
(b) Nothing in this Chapter shall be understood to diminish the share of
local government units under existing laws.
SECTION 287. Local Development Projects. - Each local government unit shall
appropriate in its annual budget no less than twenty percent (20%) of its
annual internal revenue allotment for development projects. Copies of the
development plans of local government units shall be furnished the
Department of Interior and Local Government.
SECTION 288. Rules and Regulations. - The Secretary of Finance, in
consultation with the of Budget and Management, shall promulgate the
necessary rules and regulations for a simplified disbursement scheme
designed for the speedy and effective enforcement of the provisions of this
Chapter.
CHAPTER 2 - SHARE OF LOCAL GOVERNMENT UNITS IN THE NATIONAL
WEALTH
SECTION 289. Share in the Proceeds from the Development and Utilization
of the National Wealth. - Local government units shall have an equitable
share in the proceeds derived from the utilization and development of the
national wealth within their respective areas, including sharing the same
with the inhabitants by way of direct benefits.
SECTION 290. Amount of Share of Local Government Units. - Local
government units shall, in addition to the internal revenue allotment, have
a share of forty percent (40%) of the gross collection derived by the
national government from the preceding fiscal year from mining taxes,
royalties, forestry and fishery charges, and such other taxes, fees, or
charges, including related surcharges, interests, or fines, and from its
share in any co-production, joint venture or production sharing agreement

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in the utilization and development of the national wealth within their
territorial jurisdiction.
SECTION 291 . Share of the Local Governments from any Government
Agency or -Owned and -Controlled Corporation. - Local government
units shall have a share based on the preceding fiscal year from the
proceeds derived by any government agency or government-owned or -
controlled corporation engaged in the utilization and development of the
national wealth based on the following formula whichever will produce a
higher share for the local government unit:
(a) One percent (1%) of the gross sales or receipts of the preceding
calendar year; or
(b) Forty percent (40%) of the mining taxes, royalties, forestry and
fishery charges and such other taxes, fees or charges, including
related surcharges, interests, or fines the government agency or
government -owned or -controlled corporation would have paid if it
were not otherwise exempt.
SECTION 292. Allocation of Shares. - The share in the preceding Section shall
be distributed in the following manner:
(a) Where the natural resources are located in the province
(1) province - Twenty percent (20%);
(2) Component city/municipality - Forty-five percent (45%); and
(3) Barangay - Thirty-five percent (35%)
Provided, however, That where the natural resources are
located in two (2) or more provinces, or in two (2) or more
component cities or municipalities or in two (2) or more
Barangays, their respective shares shall be computed on the
basis of:
(1) Population - Seventy percent (70%); and
(2) Land area - Thirty percent (30%).
(b) Where the natural resources are located in a highly urbanized or
independent component city:
(1) city - Sixty-five percent (65%); and

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(2) Barangay - Thirty-five percent (35%)
Provided, however, That where the natural resources are
located in such two (2) or more cities, the allocation of
shares shall be based on the formula on population and land
area as specified in paragraph (a) of this Section.
SECTION 293. Remittance of the Share of Local Government Units. - The
share of local government units from the utilization and development of
national wealth shall be remitted in accordance with Section 286 of this
Code: Provided, however, That in the case of any government agency or
government-owned or -controlled corporation engaged in the utilization
and development of the national wealth, such share shall be directly
remitted to the provincial, city, municipal or Barangay treasurer concerned
within five (5) days after the end of each quarter.
SECTION 294. Development and Livelihood Projects. - The proceeds from
the share of local government units pursuant to this chapter shall be
appropriated by their respective Sanggunian to finance local
development and livelihood projects: Provided, however, That at least
eighty percent (80%) of the proceeds derived from the development and
utilization of hydrothermal, geothermal, and other sources of energy shall
be applied solely to lower the cost of electricity in the local government
unit where such a source of energy is located.
TITLE IV. - CREDIT FINANCING
SECTION 295. Scope. - This Title shall govern the power of local government
units to create indebtedness and to enter into credit and other financial
transactions.
SECTION 296. General Policy. - (a) It shall be the basic policy that any local
government unit may create indebtedness, and avail of credit facilities to
finance local infrastructure and other socio-economic development
projects in accordance with the approved local development plan and
public investment program.
(b) A local government unit may avail of credit lines from government
or private banks and lending institutions for the purpose of
stabilizing local finances.
SECTION 297. Loans, Credits, and Other Forms of Indebted ness of Local
Government Units. - (a) A local government unit may contract loans,
credits, and other forms of indebtedness with any or domestic private
bank and other lending institutions to finance the construction, installation,

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improvement, expansion, operation, or maintenance of public facilities,
infrastructure facilities, housing projects, the acquisition of real property,
and the implementation of other capital investment projects, subject to
such terms and conditions as may be agreed upon by the local
government unit and the lender. The proceeds from such transactions
shall accrue directly to the local government unit concerned.
(b) A local government unit may likewise secure from any government
bank and lending short, medium and long-term loans and advances
against security of real estate or other acceptable assets for the
establishment, development, or expansion of agricultural, industrial,
commercial, house financing projects, livelihood projects, and other
economic enterprises.
(c) Government financial and other lending institutions are hereby
authorized to grant loans, credits, and other forms of indebtedness
out of their loanable funds to local government units for purposes
specified above.
SECTION 298. Deferred-Payment and other Financial Schemes. - Provincial,
city and municipal governments may likewise acquire property, plant,
machinery, equipment, and such necessary accessories under a supplier's
credit, deferred payment plan, or other financial scheme.
SECTION 299. Bonds and Other Long-Term Securities. - Subject to the rules
and regulations of the Central Bank and the Securities and Exchange
Commission, provinces, cities, and municipalities are hereby authorized to
issue bonds, debentures, securities, collaterals, notes and other
obligations to finance self-liquidating, income-producing development or
livelihood projects pursuant to the priorities established in the approved
local development plan or the public investment program. The Sanggunian
concerned shall, through an ordinance approved by a majority of all its
members, declare and state the terms and conditions of the bonds and the
purpose for which the proposed indebtedness is to be incurred.
SECTION 300. Inter-Local Government Loans, Grants, and Subsidies. -
Provinces, Cities and Municipalities may, upon approval of the majority of
all members of the Sanggunian concerned and in amounts not exceeding
their surplus funds, extend loans, grants, or subsidies to other local
government units under such terms and conditions as may be agreed
upon by the contracting parties. Local government units may, upon
approval of their respective Sanggunian, jointly or severally contract loans,
credits, and other forms of indebtedness for purposes mutually beneficial
to them.

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SECTION 301. Loans from Funds Secured by the National Government
from Foreign Sources. - (a) The President, or his duly authorized
representative, may, through any government financial or other lending
institution, relend to any province, city, municipality, or Barangay, the
proceeds of loans contracted with foreign financial institutions or other
international funding agencies for the purpose of financing the
construction, installation, improvement, expansion, operation, or
maintenance of public utilities and facilities, infrastructure facilities, or
housing projects, the acquisition of real property, and the implementation
of other capital investment projects, subject to such terms and conditions
as may be agreed upon by the President and the local government unit.
The proceeds from such loans shall accrue directly to the local
government concerned.
(b) The President may likewise authorize the relending to local
government units the proceeds of grants secured from foreign
sources, subject to the provisions of existing laws and the
applicable grant agreements.
(c) Repayment or amortization of loans including accrued interest
thereon, may be financed from the income of the projects or
services and from the regular income of the local government unit,
which must be provided for and appropriated regularly in its annual
budget until the loan and the interest thereon shall have been fully
paid.
SECTION 302. Financing, Construction, Maintenance, Operation, and
Management of Infrastructure Projects by the Private Sector. - (a)
Local government units may enter into contracts with any duly prequalified
individual contractor, for the financing, construction, operation, and
maintenance of any financially viable infrastructure facilities, under the
build-operate-and-transfer agreement, subject to the applicable provisions
of Republic Act Numbered Sixty-nine hundred fifty-seven (R.A. No. 6957)
authorizing the financing, construction, operation and maintenance of
infrastructure projects by the private sector and the rules and regulations
issued thereunder and such terms and conditions provided in this Section.
(b) Local government units shall include in their respective local
development plans and public investment programs priority projects
that may be financed, constructed, operated and maintained by the
private sector under this Section. It shall be the duty of the local
government unit concerned to disclose to the public all projects
eligible for financing under this Section, including official notification
of duly registered contractors and publication in newspapers of
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public places. Local projects under the build-operate-and-transfer
agreement shall be confirmed by the local development councils.
(c) Projects implemented under this Section shall be subject to the
following terms and conditions:
(1) The provincial, city, or municipal engineer, as the case may
be, upon formal request in writing by the local chief
executive, shall prepare the plans and specifications for the
proposed project, which shall be submitted to the
Sanggunian for approval.
(2) Upon approval by the Sanggunian of the project plans and
specifications, the provincial, city, or municipal engineer
shall, as the case may be, cause to be published once every
week for two (2) consecutive weeks in at least one (1) local
newspaper which is circulated in the region, province, city or
municipality in which the project is to be implemented, a
notice inviting all duly qualified contractors to participate in a
public bidding for the projects so approved. The conduct of
public bidding and award of contracts for local government
projects under this Section shall be in accordance with this
Code and other applicable laws, rules and regulations.
In the case of a build-operate-and-transfer agreement, the
contract shall be awarded to the lowest complying bidder
whose offer is deemed most advantageous to the local
government and based on the present value of its proposed
tolls, fees, rentals, and charges over a fixed term for the
facility to be constructed, operated, and maintained
according to the prescribed minimum design and
performance standards, plans, and specifications. For this
purpose, the winning contractor shall be automatically
granted by the local government unit concerned the
franchise to operate and maintain the facility, including the
collection of tolls, fees, rentals, and charges in accordance
with subsection (c-4) hereof.
contract shall be awarded to the lowest complying bidder
based on the present value of its proposed schedule of
amortization payments for the facility to be constructed
according to the prescribed minimum design and
performance standards, plans, and specifications.

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(3) Any contractor who shall undertake the prosecution of any
project under this Section shall post the required bonds to
protect the interest of the province, city, or municipality, in
such amounts as may be fixed by the Sanggunian
concerned and the provincial, city, or municipal engineer
shall not, as the case may be, allow any contractor to initiate
the prosecution of projects under this Section unless such
contractor presents proof or evidence that he has posted the
required bond.
(4) The contractor shall be entitled to a reasonable return of its
investment in accordance with its bid proposal as accepted
by the local government unit concerned.
repayment shall be made by authorizing the contractor to
charge and collect reasonable tolls, fees, rentals, and
charges for the use of the project facility not exceeding those
proposed in the bid and incorporated in the contract:
Provided, That the local government unit concerned shall,
based on reasonableness and equity, approve the tolls, fees,
rentals and charges: Provided, further, That the imposition
and collection of tolls, fees, rentals and charges shall be for
a fixed period as proposed in the bid and incorporated in the
contract which shall in no case exceed fifty (50) years:
Provided, finally, That during the lifetime of the contract, the
contractor shall undertake the necessary maintenance and
repair of the facility in accordance with standards prescribed
in the bidding documents and in the contract.
repayment shall be made through amortization payments in
accordance with the schedule proposed in the bid and
incorporated in the contract. In case of land reclamation or
construction of industrial estates, the repayment plan may
consist of the grant of a portion or percentage of the
reclaimed land or the industrial estate constructed.
(5) Every infrastructure project undertaken under this Section
shall be constructed, operated, and maintained by the
contractor under the technical supervision of the local
government unit and in accordance with the plans,
specifications, standards, and costs approved by it.
(d) The provincial, city or municipal legal officer shall, as the case may
be, review the contracts executed pursuant to this Section to

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determine their legality, validity, enforceability and correctness of
form.
SECTION 303. Remedies and Sanctions. - Local government units shall
appropriate in their respective annual budgets such amounts as are
sufficient to pay the loans and other indebtedness incurred or redeem or
retire bonds, debentures, securities, notes and other obligations issued
under this Title: Provided, That failure to provide the appropriations herein
required shall render their annual budgets inoperative.
TITLE FIVE. - LOCAL FISCAL ADMINISTRATION
CHAPTER 1 - GENERAL PROVISIONS
SECTION 304. Scope. - This Title shall govern the conduct and management of
financial affairs, transactions, and operations of provinces, cities,
municipalities, and Barangays.
SECTION 305. Fundamental Principles. - The financial affairs, transactions,
and operations of local government units shall be governed by the
following fundamental principles:
(a) No money shall be paid out of the local treasury except in
pursuance of an appropriations ordinance or law;
(b) Local government funds and monies shall be spent solely for public
purposes;
(c) Local revenue is generated only from sources expressly authorized
by law or ordinance, and collection thereof shall at all times be
acknowledged properly;
(d) All monies officially received by a local government officer in any
capacity or on any occasion shall be accounted for as local funds,
unless otherwise provided by law;

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(e) Trust funds in the local treasury shall not be paid out except in
fulfillment of the purpose for which the trust was created or the
funds received;
(f) Every officer of the local government unit whose duties permit or
require the possession or custody of local funds shall be properly
bonded, and such officer shall be accountable and responsible for
said funds and for the safekeeping thereof in conformity with the
provisions of law;
(g) Local governments shall formulate sound financial plans, and the
local budgets shall be based on functions, activities, and projects,
in terms of expected results;
(h) Local budget plans and goals shall, as far as practicable, be
harmonized with national development plans, goals, and strategies
in order to optimize the utilization of resources and to avoid
duplication in the use of fiscal and physical resources;
(i) Local budgets shall operationalize approved local development
plans;
(j) Local government units shall ensure that their respective budgets
incorporate the requirements of their component units and provide
for equitable allocation of resources among these component units;
(k) National planning shall be based on local planning to ensure that
the needs and aspirations of the people as articulated by the local
government units in their respective local development plans are
considered in the formulation of budgets of national line agencies or
offices;
(l) Fiscal responsibility shall be shared by all those exercising authority
over the financial affairs, transactions, and operations of the local
government units; and
(m) The local government unit shall endeavor to have a balanced
budget in each fiscal year of operation.
SECTION 306. Definitions. - When used in this Title, the term - (a) "Annual
Budget" refers to a financial plan embodying the estimates of income and
expenditures for one (1) fiscal year;
(b) "Appropriation" refers to an authorization made by ordinance,
directing the payment of goods and services from local government
funds under specified conditions or for specific purposes;

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(c) "Budget Document" refers to the instrument used by the local chief
executive to present a comprehensive financial plan to the
Sanggunian concerned;
(d) "Capital Outlays" refers to appropriations for the purchase of goods
and services, the benefits of which extend beyond the fiscal year
and which add to the assets of the local government unit
concerned, including investments in public utilities such as public
markets and slaughterhouses;
(e) "Continuing Appropriation" refers to an appropriation available to
support obligations for a specified purpose or projects, such as
those for the construction of physical structures or for the
acquisition of real property or equipment, even when these
obligations are incurred beyond the budget year;
(f) "Current Operating Expenditures" refers to appropriations for the
purchase of goods and services for the conduct of normal local
government operations within the fiscal year, including goods and
services that will be used or consumed during the budget year;
(g) "Expected Results" refers to the services, products, or benefits that
will accrue to the public, estimated in terms of performance
measures or physical targets;
(h) "Fund" refers to a sum of money, or other assets convertible to
cash, set aside for the purpose of carrying out specific activities or
attaining certain objectives in accordance with special regulations,
restrictions, or limitations, and constitutes an independent fiscal and
accounting entity;
(i) "Income" refers to all revenues and receipts collected or received
forming the gross accretions of funds of the local government unit;
(j) "Obligations" refers to an amount committed to be paid by the local
government unit for any lawful act made by an accountable officer
for and in behalf of the local unit concerned;
(k) "Personal Services" refers to appropriations for the payment of
salaries, wages and other compensation of permanent, temporary,
contractual, and casual employees of the local government unit;
(l) "Receipts" refers to income realized from operations and activities
of the local government or are received by it in the exercise of its
corporate functions, consisting of charges for services rendered,

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conveniences furnished, or the price of a commodity sold, as well
as loans, contributions or aids from other entities, except
provisional advances for budgetary purposes; and
(m) "Revenue" refers to income derived from the regular system of
taxation enforced under authority of law or ordinance, and, as such,
accrue more or less regularly every year.
CHAPTER 2 - LOCAL AND OTHER SPECIAL FUNDS
Article One. - Receipts, Safekeeping and Disposition of Local Funds
SECTION 307. Remittance of Government Monies to the Local Treasury. -
Officers of the local authorized to receive and collect monies arising from
taxes, revenues, or receipts of any kind shall remit the full amount
received and collected to the treasury of such local government unit which
shall be credited to the particular account or accounts to which the monies
in question properly belong.
SECTION 308. Local Funds. - Every local government unit shall maintain a
General Fund which shall be used to account for such monies and
resources as may be received by and disbursed from the local treasury.
The General Fund shall consist of monies and resources of the local
government which are available for the payment of expenditures,
obligations or purposes not specifically declared by law as accruing and
chargeable to, or payable from, any other fund.
SECTION 309. Special Funds. - There shall be maintained in every provincial,
city, or municipal treasury the following special funds:
(a) Special Education Fund (SEF) shall consist of the respective
shares of provinces, cities, and Barangays in the proceeds of the
additional tax on real property to be appropriated for purposes
prescribed in Section 272 of this Code; and
(b) Trust Funds shall consist of private and public monies which have
officially come into the possession of the local government or of a
local government official as trustee, agent or administrator, or which
have been received as a guaranty for the fulfillment of some
obligation. A trust fund shall only be used for the specific purpose
for which it was created or for which it came into the possession of
the local government unit.

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SECTION 310. Separation of Books and Depository Accounts. - Local
accountants and treasurers shall maintain separate books and depository
accounts, respectively, for each fund in their custody or under such rules
and regulations as the Commission on Audit may prescribe.
SECTION 311. Depository Accounts. - Local treasurers shall maintain
depository accounts in the of their respective local government units with
banks, preferably government-owned, located in or nearest to their
respective areas of jurisdiction. Earnings of each depository account shall
accrue exclusively thereto.
SECTION 312. Separation of Personal Money from Public Funds. - Local
treasurers and other accountable officers shall keep personal monies
separate and distinct from local public funds in their custody and shall not
make profit out of public money or otherwise apply the same to any use
not authorized by law or ordinance.
Article Two. - Special Accounts
SECTION 313. Special Accounts to be Maintained in the General Fund. -
Local government units shall maintain special accounts in the general fund
for the following:
(a) Public utilities and other economic enterprises;
(b) Loans, interests, bond issues, and other contributions for specific
purposes; and
(c) Development projects funded from the share of the local
government unit concerned in the internal revenue allotment and
such other special accounts which may be created by law or
ordinance. Receipts, transfers, and expenditures involving the
foregoing special accounts shall be properly taken up thereunder.
Profits or income derived from the operation of public utilities and
other economic enterprises, after deduction for the cost of
improvement, repair and other related expenses of the public utility
or economic enterprise concerned, shall first be applied for the
return of the advances or loans made therefor. Any excess shall
form part of the general fund of the local government unit
concerned.

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CHAPTER 3. - BUDGETING
Article One. - Local Government Budgets
SECTION 314. Form and Content. - (a) Local government budgets shall
primarily consist of two (2) parts:
(1) The estimates of income; and
(2) The total appropriations covering the current operating
expenditures and capital outlays.
(b) The budget document shall contain:
(1) A budget message of the local chief executive setting forth in
brief the significance of the executive budget, particularly in
relation to the approved local development plan;
(2) A brief summary of the functions, projects, and activities to
be accomplished in of the goals and objectives of the local
government unit for the ensuing fiscal year, specifically the
delivery of basic services or facilities enumerated under
Section 17 of this Code;
(3) Summary of financial statements setting forth:
(i)
(ii)
(iii)
(iv)
The actual income and expenditures during the
immediately preceding year;
The actual income and expenditures of the first two
(2) quarters and the estimates of income and
expenditures for the last two (2) quarters of the
current fiscal year;
The estimates of income for the ensuing fiscal year
from ordinances and laws existing at the time the
proposed budget is transmitted, together with other
revenue-raising proposals;
The estimated expenditures necessary to carry out
the functions, projects, and activities of the local
government unit for the ensuing fiscal year;
(v) All essential facts regarding the bonded and other
long-term obligations and indebtedness of the local
government unit, if any;

135
(vi) Summary statement of all statutory and contractual
obligations due; and
Such other financial statements and data as are
deemed necessary or desirable in order to disclose in
all practicable detail the financial condition of the local
government unit.
(vii)
SECTION 315. Submission of Detailed Statements of Income and
Expenditures. - (a) On or before the fifteenth (15th) day of July of each
year, local treasurers shall submit to their respective local chief executives
a certified statement covering the income and expenditures of the
preceding fiscal year, the actual income and expenditures of the first two
(2) quarters of the current year, and the estimated income and
expenditures for the last two (2) quarters of the current year.
SECTION 316. Local Finance Committee. - There is hereby created in every
province, city, or municipality a local finance committee to be composed of
the local planning and development officer, the local budget officer, and
the local treasurer. It shall exercise the following functions:
(a) Determine the income reasonably projected as collectible for the
ensuing fiscal year;
(b) Recommend the appropriate tax and other revenue measures or
borrowings, which may be appropriate to support the budget;
(c) Recommend to the local chief executive concerned the level of the
annual expenditures and the ceilings of spending for economic,
social, and general services based on the approved local
development plans;
(d) Recommend to the local chief executive concerned the proper
allocation of expenditures for each development activity between
current operating expenditures and capital outlays;
(e) Recommend to the local chief executive concerned the amount to
be allocated for capital under each development activity or
infrastructure project;
(f) Assist the Sangguniang Panlalawigan in the review and evaluation
of budget of component cities and municipalities in the case of
provincial finance committee, the Barangay budgets in the case of
city or municipal finance committee, and recommend the
appropriate action thereon;

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(g) Assist the Sanggunian concerned in the analysis and review of
annual regular and budgets of the respective local government unit
to determine compliance with statutory and administrative
requirements; and
(h) Conduct semi-annual review and general examination of cost and
accomplishments against performance standards applied in
undertaking development projects. A copy of this report shall be
furnished the local chief executive and the Sanggunian concerned,
and shall be posted in conspicuous and publicly accessible places
in the provinces, cities, municipalities and Barangays.
SECTION 317. Submission of Budget Proposals by Heads of Departments
or Offices. - (a) Each head of department or office shall submit a budget
proposal for his department or office to the local chief executive on or
before the fifteenth (15th) of July of each year: Provided, That the budget
proposal of each department or office shall be categorized under either
economic, social or general services: Provided, further, That each service
shall be covered by the budget of at least one (1) department or office of
the local government unit concerned.
The said budget proposal shall be prepared in accordance with such
policy and program as the local chief executive concerned may issue in
conformity with the local development plan, the budgetary ceilings
prescribed by the local finance committee, and the general requirements
prescribed in this Title.
(b) Budget proposals of departments or offices shall be divided into two
(2) primary categories, namely: the current operating expenditures
and the capital outlays. Such budget proposals shall contain the
following information:
(1) Objectives, functions, and projects showing the general
character and relative importance of the work to be
accomplished or the services to be rendered, and the cost
thereof;
(2) Organizational charts and staffing patterns indicating the list
of plantilla positions with their corresponding salaries, and
proposals for reclassification of positions and salary
changes, as well as the creation of new positions with their
proposed salary grade, duly supported by proper
justification;
(3) Brief description of the functions, projects and activities for
the ensuing fiscal year, expected results for each function,

137
project and activity, and the nature of work to be performed,
including the objects of expenditure for each function, project
and activity;
(4) Relation of the work and financial proposals to approved
local development plans;
(5) Estimated current operating expenditures and capital outlays
with comparative data for the last two (2) preceding, current,
and ensuing fiscal years; and
(6) Accomplishment reports for the last two (2) proceeding and
current fiscal years.
SECTION 318. Preparation of the Budget by the Local Chief Executive. -
Upon receipt of the statements of income and expenditures from the
treasurer, the budget proposals of the heads of departments and offices,
and the estimates of income and budgetary ceilings from the local finance
committee, the local chief executive shall prepare the executive budget for
the ensuing fiscal year in accordance with the provisions of this Title.
The local chief executive shall submit the said executive budget to the
Sanggunian concerned not later than the sixteenth (16th) of October of the
current fiscal year. Failure to submit such budget on the date prescribed
herein shall subject the local chief executive to such criminal and
administrative penalties as provided for under this Code and other
applicable laws.
SECTION 319. Legislative Authorization of the Budget. - On or before the end
of the current fiscal year, the Sanggunian concerned shall enact, through
an ordinance, the annual budget of the local government unit for the
ensuing fiscal year on the basis of the estimates of income and
expenditures submitted by the local chief executive.
SECTION 320. Effectivity of Budgets. - The ordinance enacting the annual
budget shall take effect at the beginning of the ensuing calendar year. An
ordinance enacting a supplemental budget, however, shall take effect
upon its approval or on the date fixed therein.
The responsibility for the execution of the annual and supplemental
budgets and the accountability therefore shall be vested primarily in the
local chief executive concerned.
SECTION 321. Changes in the Annual Budget. - All budgetary proposals shall
be included and in the budget preparation process. After the local chief
executive concerned shall have submitted the executive budget to the

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Sanggunian, no ordinance providing for a supplemental budget shall be
enacted, except when supported by funds actually available as certified by
the local treasurer or by new revenue sources.
A supplemental budget may also be enacted in times of public calamity by
way of budgetary realignment to set aside appropriations for the purchase
of supplies and materials or the payment of services which are
exceptionally urgent or absolutely indispensable to prevent imminent
danger to, or loss of, life or property, in the jurisdiction of the local
government unit or in other areas declared by the President in a state of
calamity. Such ordinance shall clearly indicate the sources of funds
available for appropriations, as certified under oath by the local treasurer
and local accountant and attested by the local chief executive, and the
various items of appropriations affected and the reasons for the change.
SECTION 322. Reversion of Unexpended Balances of Appropriations,
Continuing Appropriations. - balances of appropriations authorized in
the annual appropriations ordinance shall revert to the surplus of the
general fund at the end of the fiscal year and shall not thereafter be
available for expenditure except by subsequent enactment. However,
appropriations for capital outlays shall continue and remain valid until fully
spent, reverted or the project is completed. Reversions of continuing
appropriations shall not be allowed unless obligations therefor have been
fully paid or otherwise settled.
The balances of continuing appropriations shall be reviewed as part of the
annual budget preparation and the Sanggunian concerned may approve,
upon recommendation of the local chief executive, the reversion of funds
no longer needed in connection with the activities funded by said
continuing appropriations subject to the provisions of this Section.
SECTION 323. Failure to Enact the Annual Appropriations. - In case the
Sanggunian concerned fails to pass the ordinance authorizing the annual
appropriations at the beginning of the ensuing fiscal year, it shall continue
to hold sessions, without additional remuneration for its members, until
such ordinance is approved, and no other business may be taken up
during such sessions. If the Sanggunian still fails to enact such ordinance
after ninety (90) days from the beginning of the fiscal year, the ordinance
authorizing the appropriations of the preceding year shall be deemed
reenacted and shall remain in force and effect until the ordinance
authorizing the proposed appropriations is passed by the Sanggunian
concerned. However, only the annual appropriations for salaries and
wages of existing positions, statutory and contractual obligations, and
essential operating expenses authorized in the annual and supplemental
budgets for the preceding year shall be deemed reenacted and
disbursement of funds shall be in accordance therewith.

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In the implementation of such reenacted ordinance, the local treasurer
concerned shall exclude from the estimates of income for the preceding
fiscal year those realized from nonrecurring sources, like national aids,
proceeds from loans, sale of assets, prior year adjustments, and other
analogous sources of income. No ordinance authorizing supplemental
appropriations shall be passed in place of the annual appropriations. In
case the revised income estimates be less than the aggregate reenacted
appropriations, the local treasurer concerned shall accordingly advise the
Sanggunian concerned which shall, within ten (10) days from the receipt
of such advice, make the necessary adjustments or reductions. The
revised appropriations authorized by the Sanggunian concerned shall then
be the basis for disbursements.
SECTION 324. Budgetary Requirements. - The budgets of local government
units for any fiscal year shall comply with the following requirements: (a)
The aggregate amount appropriated shall not exceed the estimates of
income;
(b) Full provision shall be made for all statutory and contractual
obligations of the local government unit concerned: Provided,
however, That the amount of appropriations for debt servicing shall
not exceed twenty percent (20%) of the regular income of the local
government unit concerned;
(c) In the case of provinces, cities, and municipalities, aid to
component Barangays shall be in amounts of not less than One
thousand pesos (P=1,000.00) per Barangay; and
(d) Five percent (5%) of the estimated revenue from regular sources
shall be set aside as an annual lump sum appropriation for
unforeseen expenditures arising from the occurrence of calamities:
Provided, however, That such appropriation shall be used only in
the area, or a portion thereof, of the local government unit or other
areas declared by the President in a state of calamity.
SECTION 325. General Limitations. - The use of the provincial, city, and
municipal funds shall be subject to the following limitations:
(a) The total appropriations, whether annual or supplemental, for
personal services of a local government unit for one (1) fiscal year
shall not exceed forty-five percent (45%) in the case of first to third
class provinces, cities, and municipalities, and fifty-five percent
(55%) in the case of fourth class or lower, of the total annual
income from regular sources realized in the next preceding fiscal
year. The appropriations for salaries, wages, representation

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and transportation allowances of officials and employees of the
public utilities and economic enterprises owned, operated, and
maintained by the local government unit concerned shall not be
included in the annual budget or in the computation of the
maximum amount for personal services. The appropriations for the
personal services of such economic enterprises shall be charged to
their respective budgets;
(b) No official or employee shall be entitled to a salary rate higher than
the maximum fixed for his position or other positions of equivalent
rank by applicable laws or rules and regulations issued thereunder;
(c) No local fund shall be appropriated to increase or adjust salaries or
wages of officials and employees of the national government,
except as may be expressly authorized by law; (d) In cases of
abolition of positions and the creation of new ones resulting from
the abolition of existing positions in the career service, such
abolition or creation shall be made in accordance with pertinent
provisions of this code and the civil service law, rules and
regulations;
(e) Positions in the official plantilla for career positions which are
occupied by incumbents holding permanent appointments shall be
covered by adequate appropriations;
(f) No changes in designation or nomenclature of positions resulting in
a promotion or demotion in rank or increase or decrease in
compensation shall be allowed, except when the position is actually
vacant, and the filling of such positions shall be strictly made in
accordance with the civil service law, rules and regulations; (g) The
creation of new positions and salary increases or adjustments shall
in no case be made retroactive; and
(h) The annual appropriations for discretionary purposes of the local
chief executive shall not exceed two percent (2%) of the actual
receipts derived from basic real property tax in the next preceding
calendar year. Discretionary funds shall be disbursed only for public
purposes to be supported by appropriate vouchers and subject to
such guidelines as may be prescribed by law. No amount shall be
appropriated for the same purpose except as authorized under this
Section.
SECTION 326. Review of Appropriation Ordinances of provinces, Highly-
Urbanized Cities, Independent Component Cities, and Municipalities
within the Metropolitan Manila Area. - The Department of Budget and
Management shall review ordinances authorizing the annual or

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supplemental appropriations of provinces, highly-urbanized cities,
independent component cities, and municipalities within the Metropolitan
Manila Area in accordance with the immediately succeeding Section.
SECTION 327. Review of Appropriation Ordinances of Component Cities
and Municipalities. - The Sangguniang Panlalawigan shall review the
ordinance authorizing annual or supplemental appropriations of
component cities and municipalities in the same manner and within the
same period prescribed for the review of other ordinances.
If within ninety (90) days from receipt of copies of such ordinance, the
Sangguniang Panlalawigan takes no action thereon, the same shall be
deemed to have been reviewed in accordance with law and shall continue
to be in full force and effect. If within the same period, the Sangguniang
Panlalawigan shall have ascertained that the ordinance authorizing annual
or supplemental appropriations has not complied with the requirements
set forth in this Title, the Sangguniang Panlalawigan shall, within the
ninety-day period hereinabove prescribed, declare such ordinance
inoperative in its entirety or in part. Items of appropriation contrary to
limitations prescribed in this Title or in excess of the amounts prescribed
herein shall be disallowed or reduced accordingly.
The Sangguniang Panlalawigan shall within the same period advise the
Sangguniang panlungsod or Sangguniang bayan concerned through the
local chief executive of any action on the ordinance under review. Upon
receipt of such advice, the city or municipal treasurer concerned shall not
make further disbursements of funds from any of the items of
appropriation declared inoperative, disallowed or reduced.
SECTION 328. Duration of Appropriation. - Appropriations for ordinary
administrative purposes not duly obligated shall terminate with the fiscal
year and all unexpended balances thereof shall be automatically reverted
on the thirty-first (31st) day of December of each year to the general fund
of the local government unit.
Article Two. - Barangay Budgets
SECTION 329. Barangay Funds. - Unless otherwise provided in this Title, all the
income of the Barangay from whatever source shall accrue to its general
fund and shall, at the option of the Barangay concerned, be kept as trust
fund in the custody of the city or municipal treasurer or be deposited in a
bank, preferably government-owned, situated in or nearest to its area of
jurisdiction. Such funds shall be disbursed in accordance with the
provisions of this Title. Ten percent (10%) of the general fund of the
Barangay shall be set aside for the Sangguniang kabataan.

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SECTION 330. Submission of Detailed Statements of Income and
Expenditures for the Barangay Budgets. - On or before the fifteenth
(15th) day of September of each year, the Barangay treasurer shall submit
to the punong Barangay a statement covering the estimates of income
and expenditures for the ensuing fiscal year, based on a certified
statement issued by the city or municipal treasurer covering the estimates
of income from local sources for the Barangay concerned.
SECTION 331. Preparation of the Barangay Budget. - (a) Upon receipt of the
statement of income and expenditures from the Barangay treasurer, the
punong Barangay shall prepare the Barangay budget for the ensuing fiscal
year in the manner and within the period prescribed in this Title and
submit the annual Barangay budget to the Sangguniang Barangay for
legislative enactment.
(b) The total annual appropriations for personal services of a Barangay
for one (1) fiscal year shall not exceed fifty-five percent (55%) of the
total annual income actually realized from local sources during the
next preceding fiscal year.
(c) The Barangay budget shall likewise be subject to the same
budgetary requirements and limitations hereinabove prescribed.
SECTION 332. Effectivity of Barangay Budgets. - The ordinance enacting the
annual budget shall take effect at the beginning of the ensuing calendar
year. An ordinance enacting a supplemental budget, however, shall take
effect upon its approval or on the date fixed therein. The responsibility for
the execution of the annual and supplemental budgets and the
accountability therefor shall be vested primarily in the punong Barangay
concerned.
SECTION 333. Review of the Barangay Budget. - (a) Within ten (10) from its
approval, copies of the Barangay ordinance authorizing the annual
appropriations shall be furnished the Sangguniang panlungsod or the
Sangguniang bayan, as the case may be, through the city or municipal
budget officer. The Sanggunian concerned shall have the power to review
such ordinance in order to ensure that the provisions of this Title are
complied with. If within sixty (60) days after the receipt of the ordinance,
the Sanggunian concerned takes no action thereon, the same shall
continue to be in full force and effect. If within the same period, the
Sanggunian concerned shall have ascertained that the ordinance contains
appropriations in excess of the estimates of the income duly certified as
collectible, or that the same has not complied with the budgetary
requirements set forth in this Title, the said ordinance shall be declared
inoperative in its entirety or in part. Items of appropriation contrary to, or in

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excess of, any of the general limitations or the maximum amount
prescribed in this Title shall be disallowed or reduced accordingly.
(b) Within the period hereinabove fixed, the Sangguniang panlungsod
or Sangguniang bayan concerned shall return the Barangay
ordinance, through the city or municipal budget officer, to the
punong Barangay with the advice of action thereon for proper
adjustments, in which event, the Barangay shall operate on the
ordinance authorizing annual appropriations of the preceding fiscal
year until such time that the new ordinance authorizing annual
appropriations shall have met the objections raised. Upon receipt of
such advice, the Barangay treasurer or the city or municipal
treasurer who has custody of the funds shall not make further
disbursement from any item of appropriation declared inoperative,
disallowed, or reduced.
SECTION 334. Barangay Financial Procedures. - (a) The Barangay treasurer
shall collect all taxes, fees, and other charges due and contributions
accruing to the Barangay for which he shall issue official receipts, and
shall deposit all collections with the city or municipal treasury or in the
depository account maintained in the name of the Barangay within five (5)
days after receipt thereof. He may collect real property taxes and such
other taxes as may be imposed by a province, city or municipality that are
due in his Barangay only after being deputized by the local treasurer
concerned for the purpose.
(b) The Barangay treasurer may be authorized by the Sangguniang
Barangay to make direct purchases amounting to not more than
One thousand pesos (Php1,000.00) at any time for the ordinary and
essential needs of the Barangay. The petty cash that the Barangay
treasurer may be authorized to hold for the purpose shall not
exceed twenty percent (20%) of the funds available and to the
credit of the Barangay treasury.
(c) The financial records of the Barangay shall be kept in the office of
the city or municipal accountant in simplified manner as prescribed
by the Commission on Audit. Representatives of the Commission
on Audit shall audit such accounts annually or as often as may be
necessary and make a report of the audit to the Sangguniang
panlungsod or Sangguniang bayan, as the case may be. The
Commission on Audit shall prescribe and put into effect simplified
procedures for Barangay finances within six (6) months following
the effectivity of this Code.

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CHAPTER 4. - EXPENDITURES, DISBURSEMENTS, ACCOUNTING
AND ACCOUNTABILITY
SECTION 335. Prohibitions Against Expenditures for Religious or Private
Purposes. - No public money or property shall be appropriated or applied
for religious or private purposes.
SECTION 336. Use of Appropriated Funds and Savings. - Funds shall be
available exclusively for the specific purpose for which they have been
appropriated. No ordinance shall be passed authorizing any transfer of
appropriations from one item to another. However, the local chief
executive or the presiding officer of the Sanggunian concerned may, by
ordinance, be authorized to augment any item in the approved annual
budget for their respective offices from savings in other items within the
same expense class of their respective appropriations.
SECTION 337. Restriction Upon Limit of Disbursements. - Disbursements in
accordance with appropriations in the approved annual budget may be
made from any local fund in the custody of the treasurer, but the total
disbursements from any local fund shall in no case exceed fifty percent
(50%) of the uncollected estimated revenue accruing to such local fund in
addition to the actual collections: Provided, however, That no cash
overdraft in any local fund shall be incurred at the end of the fiscal year.
In case of emergency arising from a typhoon, earthquake, or any other
calamity, the Sanggunian concerned may authorize the local treasurer to
continue making disbursements from any local fund in his possession in
excess of the limitations herein provided, but only for such purposes and
amounts included in the approved annual budgets. Any overdraft which
may be incurred at the end of the year in any local fund by virtue of the
provisions hereof shall be covered with the first collections of the
immediately succeeding fiscal year accruing to such local fund.
SECTION 338. Prohibitions Against Advance Payments. - No money shall be
paid on account of any contract under which no services have been
rendered or goods delivered.
SECTION 339. Cash Advances. - No cash advance shall be granted to any
local official or employee, elective or appointive, unless made in
accordance with the rules and regulations as the Commission on Audit
may prescribe.
SECTION 340. Persons Accountable for Local Government Funds. - Any
officer of the local government unit whose duty permits or requires the
possession or custody of local government funds shall be accountable and
responsible for the safekeeping thereof in conformity with the provisions of

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this Title. Other local officers who, though not accountable by the nature of
their duties, may likewise be similarly held accountable and responsible
for local government funds through their participation in the use or
application thereof.
SECTION 341. Prohibitions Against Pecuniary Interest. - Without prejudice to
criminal prosecution under applicable laws, any local treasurer,
accountant, budget officer, or other accountable local officer having any
pecuniary interest, direct or indirect, in any contract, work or other
business of the local government unit of which he is an accountable officer
shall be administratively liable therefor.
SECTION 342. Liability for Acts Done Upon Direction of Superior Officer, or
Upon Participation of Other Department Heads or Officers of
Equivalent Rank. - Unless he registers his objection in writing, the local
treasurer, accountant, budget officer, or other accountable officer shall not
be relieved of liability for illegal or improper use or application or deposit of
government funds or property by reason of his having acted upon the
direction of a superior officer, elective or appointive, or upon participation
of other department heads or officers of equivalent rank. The superior
officer directing, or the department head participating in such illegal or
improper use or application or deposit of government funds or property,
shall be jointly and severally liable with the local treasurer, accountant,
budget officer, or other accountable officer for the sum or property so
illegally or improperly used, applied or deposited.
SECTION 343. Prohibition Against Expenses for Reception and
Entertainment. - No money shall be appropriated, used, or paid for
entertainment or reception except to the extent of the representation
allowances authorized by law or for the reception of visiting dignitaries of
foreign governments or foreign missions, or when expressly authorized by
the President in specific cases.
SECTION 344. Certification on, and Approval of, Vouchers. - No money shall
be disbursed unless the local budget officer certifies to the existence of
appropriation that has been legally made for the purpose, the local
accountant has obligated said appropriation, and the local treasurer
certifies to the availability of funds for the purpose. Vouchers and payrolls
shall be certified to and approved by the head of the department or office
who has administrative control of the fund concerned, as to validity,
propriety, and legality of the claim involved. Except in cases of
disbursements involving regularly recurring administrative expenses such
as payrolls for regular or permanent employees, expenses for light, water,
telephone and telegraph services, remittances to government creditor
agencies such as the GSIS, SSS, LBP, DBP, National Printing Office,
Procurement Service of the DBM and others, approval of the

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disbursement voucher by the local chief executive himself shall be
required whenever local funds are disbursed.
In cases of special or trust funds, disbursements shall be approved by the
administrator of the fund. In case of temporary absence or incapacity of
the department head or chief of office, the officer next-in-rank shall
automatically perform his function and he shall be fully responsible
therefor.
SECTION 345. Officials Authorized to Draw Checks in Settlement of
Obligations. - Checks in settlement of obligations shall be drawn by the
local treasurer and countersigned by the local administrator. In case of
temporary absence or incapacity of the foregoing officials, these duties
shall devolve upon their immediate assistants.
SECTION 346. Disbursements of Local Funds and Statement of Accounts. -
Disbursements shall be made in accordance with the ordinance
authorizing the annual or supplemental appropriations without the prior
approval of the Sanggunian concerned. Within thirty (30) days after the
close of each month, the local accountant shall furnish the Sanggunian
with such financial statements as may be prescribed by the Commission
on Audit. In the case of the year-end statement of accounts, the period
shall be sixty (60) days after the thirty-first (31st) of December.
SECTION 347. Rendition of Accounts. - Local treasurers, accountants and
other local accountable officers shall render their accounts within such
time, in such form, style, and content and under such as the Commission
on Audit may prescribe. Provincial, city, and municipal auditors shall
certify the balances arising in the accounts settled by them to the
Chairman of the Commission on Audit and to the local treasurer,
accountant, and other accountable officers. Copies of the certification shall
be prepared and furnished other local officers who may be held jointly and
severally liable for any loss or illegal, improper or unauthorized use or
misappropriation of local funds or property.
SECTION 348. Auditorial Visitation. - The books, accounts, papers, and cash
of local treasurer, accountant, budget officer, or other accountable officers
shall at all times be open for inspection of the Commission on Audit or its
duly authorized representative.
In case an examination of the accounts of a local treasurer discloses a
shortage in cash which should be on hand, it shall be the duty of the
examining officer to seize the office and its contents, notify the
Commission on Audit, the local chief executive concerned, and the local
accountant. Thereupon, the examining officer shall immediately turn over
to the accountable officer next-in- rank in the local treasury service, unless

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the said officer is likewise under investigation, the office of the treasurer
and its contents, and close and render his accounts on the date of
turnover. In case the accountable officer next in rank is under
investigation, the auditor shall take full possession of the office and its
contents, close and render his accounts on the date of taking possession,
and temporarily continue the public business of such office until such time
that the local treasurer is restored or a successor has been duly
designated. The local treasurer or accountable officer found with such
shortage shall be automatically suspended from office.
SECTION 349. Accounting for Revenues. - Estimated revenues which remain
unrealized at the close of the fiscal year shall not be booked or credited to
the unappropriated surplus or any other account.
SECTION 350. Accounting for Obligations. - All lawful expenditures and
obligations incurred during a fiscal year shall be taken up in the accounts
of that year.
SECTION 351. General Liability for Unlawful Expenditures. - Expenditures
of funds or use of property in violation of this Title and other laws shall be
a personal liability of the official or employee responsible therefor.
SECTION 352. Posting of the Summary of Income and Expenditures. - Local
treasurers, accountants, budget officers and other accountable officers
shall, within thirty (30) days from the end of each fiscal year, post in at
least three (3) publicly accessible and conspicuous places in the local
government unit a summary of all revenues collected and funds received
including the appropriations and disbursements of such funds during the
preceding fiscal year.
SECTION 353. The Official Fiscal Year. - The official fiscal year of local
government units shall be the period beginning with the first day of
January and ending with the thirty-first day of December of the same year.
SECTION 354. Administrative Issuances; Budget Operations Manual. - The
Secretary of Budget and Management jointly with the Chairman of the
Commission on Audit shall, within one (1) year from the effectivity of this
Code, promulgate a Budget Operations Manual for local government units
to improve and systematize methods, techniques, and procedures
employed in budget preparation, authorization, execution, and
accountability.

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TITLE VI. - PROPERTY AND SUPPLY MANAGEMENT IN THE LOCAL
GOVERNMENT UNITS
SECTION 355. Scope. - This Title shall govern the procurement, care, utilization,
custody, and disposal of supplies, as defined herein, by local government
units and the other aspects of supply management at the local levels.
SECTION 356. General Rule in Procurement or Disposal.- Except as
otherwise provided herein, acquisition of supplies by local government
units shall be through competitive public bidding. Supplies which have
become unserviceable or no longer needed shall be sold, whenever
applicable, at public auction, subject to applicable rules and regulations.
SECTION 357. Definition of Terms. - When used in this Title, the term -
(a) "Lowest Complying and Responsible Bid" refers to the proposal of
one who offers the lowest price, meets all the technical
specifications and requirements of the supplies desired and, as a
dealer in the line of supplies involved, maintains a regular
establishment, and has complied consistently with previous
commitments;
(b) "Suitable Substitute" refers to that kind of article which would serve
substantially the same purpose or produce substantially the same
results as the brand, type, or make of article originally desired or
requisitioned;
(c) "Supplies" includes everything, except real property, which may be
needed in the transaction of public business or in the pursuit of any
undertaking, project, or activity, whether in the nature of equipment,
furniture, stationary materials for construction or personal property
of any sort, including non-personal or contractual services such as
the repair and maintenance of equipment and furniture, as well as
trucking, hauling, janitorial, security, and related services; and
(d) "Terms and Conditions" refer to other requirements not affecting
the technical specifications and requirements of the required
supplies desired such as bonding, terms of delivery and payment,
and related preferences.
SECTION 358. Requirement of Requisition. - Any order for supplies shall be
filled by the provincial or city general services officer or the municipal or
Barangay treasurer concerned, as the case may be, for any office or

149
department of a local government unit only upon written requisition as
hereinafter provided.
SECTION 359. Officers Having Authority to Draw Requisitions. -
Requisitions shall be prepared by the head of office or department
needing the supplies, who shall certify as to their necessity for official use
and specify the project or activity where the supplies are to be used.
SECTION 360. Certification by the Local Budget Officer, Accountant, and
Treasurer. - Every requisition must be accompanied by a certificate
signed by the local budget officer, the local accountant, and the local
treasurer showing that an appropriation therefor exists, the estimated
amount of such expenditure has been obligated, and the funds are
available for the purpose, respectively.
SECTION 361. Approval of Requisitions. - Approval of the requisition by the
head of office or department concerned who has administrative control of
the appropriation against which the proposed expenditure is chargeable is
deemed sufficient, except in case of requisition for supplies to be carried
in stock which shall be approved by the local chief executive concerned:
Provided, That such supplies are listed or included in the annual
procurement plan and the maximum quantity thereof does not exceed the
estimated consumption corresponding to a programmed three-month
period: Provided, further, That nothing herein contained shall be held as
authorizing the purchase of furniture and equipment for stock purposes.
SECTION 362. Call for Bids. - When procurement is to be made by local
government units, the provincial or city general services officer or the
municipal or Barangay treasurer shall call bids for open public competition.
The call for bids shall show the complete specifications and technical
descriptions of the required supplies and shall embody all terms and
conditions of participation and award, terms of delivery and payment, and
all other covenants affecting the transaction. In all calls for bids, the right
to waive any defect in the tender as well as the right to accept the bid
most advantageous to the government shall be reserved. In no case,
however, shall failure to meet the specifications or technical requirements
of the supplies desired be waived.
SECTION 363. Publication of Call for Bids. - The call for bids shall be given
the widest publicity possible, sending, by mail or otherwise, any known
prospective participant in the locality, of copies of the call and by posting
copies of the same in at least three (3) publicly accessible and
conspicuous places in the provincial capitol or city, municipal, or Barangay
hall, as the case may be.

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The notice of the bidding may likewise be published in a newspaper of
general circulation in the territorial jurisdiction of the local government unit
concerned when the provincial or city general services officer or the
municipal or Barangay treasurer, as the case may be, deems it necessary
in order to obtain the lowest responsible and complying bid.
The opening of bids shall only be made in the presence of the provincial or
city auditor or his duly authorized representative who shall initial and
secure copies of the bids and certify the abstract of the bidding.
SECTION 364. The Committee on Awards. - There shall be in every province,
city or municipality a committee on awards to decide the winning bids and
questions of awards on procurement and disposal of property.
The Committee on Awards shall be composed of the local chief executive
as chairman, the local treasurer, the local accountant, the local budget
officer, the local general services officer, and the head of office or
department for whose use the supplies are being procured, as members.
In case a head of office or department would sit in a dual capacity, a
member of the Sanggunian elected from among its members shall sit as a
member. The committee on awards at the Barangay level shall be the
Sangguniang Barangay. No national official shall sit as a member of the
committee on awards.
The results of the bidding shall be made public by conspicuously posting
the same in the provincial capitol or city, municipal, or Barangay hall.
SECTION 365. Rule on Awards. - Awards in the procurement of supplies shall
be given to the lowest complying and responsible bid which meets all the
terms and conditions of the contract or undertaking.
SECTION 366. Procurement Without Public Bidding. - Procurement of
supplies may be made without the benefit of public bidding under any of
the following modes:
(a) Personal canvass of responsible merchants;
(b) Emergency purchase;
(c) Negotiated purchase;
(d) Direct purchase from manufacturers or exclusive distributors; and
(e) Purchase from other government entities.

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SECTION 367. Procurement through Personal Canvass. - Upon approval by
the Committee on Awards, procurement of supplies may be effected after
personal canvass of at least three (3) responsible suppliers in the locality
by a committee of three (3) composed of the local general services officer
or the municipal or Barangay treasurer, as the case may be, the local
accountant, and the head of office or department for whose use the
supplies are being procured. The award shall be decided by the
Committee on Awards.
Purchases under this Section shall not exceed the amounts specified
hereunder for all items in any one (1) month for each local government
unit:
Provinces and Cities and Municipalities within the Metropolitan Manila
Area:
First and Second Class One hundred
(P150,000.00)
fifty thousand pesos
Third and Fourth Class One hundred
(P100,000.00)
thousand pesos
Fifth and Sixth Class Fifty thousand pesos (P50,000.00)
Municipalities:
First Class Sixty thousand pesos (P60,000.00)
Second and Third Class Forty thousand pesos (P40,000.00)
Fourth Class and Below Twenty thousand pesos (P20,000.00)
SECTION 368. Emergency Purchase. - In cases of emergency where the need
for the supplies is exceptionally urgent or absolutely indispensable and
only to prevent imminent danger to, or loss of, life or property, local
government units may, through the local chief executive concerned, make
emergency purchases or place repair orders, regardless of amount,
without public bidding. Delivery of purchase orders or utilization of repair
orders pursuant to this Section shall be made within ten (10) days after
placement of the same. Immediately after the emergency purchase or
repair order is made, the chief of office or department making the
emergency purchase or repair order shall draw a regular requisition to
cover the same which shall contain the following:
(a) A complete description of the supplies acquired or the work done or
to be performed;
(b) By whom furnished or executed;
(c) Date of placing the order and the date and time of delivery or
execution

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(d) The unit price and the total contract price;
(e) A brief and concise explanation of the circumstances why
procurement was of such urgency that the same could not be done
through the regular course without involving danger to, or loss of,
life or property;
(f) A certification of the provincial or city general services or the
municipal or Barangay treasurer, as the case may be, to the effect
that the price paid or contracted for was the lowest at the time of
procurement; and
(g) A certification of the local budget officer as to the existence of
appropriations for the purpose, the local accountant as to the
obligation of the amount involved, and the local treasurer as to the
of funds. The goods or services procured under this Section must
be utilized or availed of within fifteen (15) days from the date of
delivery or availability.
Without prejudice to criminal prosecution under applicable laws, the
local chief executive, the head of department, or the chief of office
making the procurement shall be administratively liable for any
violation of this Section and shall be a ground for suspension or
dismissal from service.
SECTION 369. Negotiated Purchase. - (a) In cases where public biddings have
failed for two (2) consecutive times and no suppliers have qualified to
participate or win in the biddings, local government units may, through the
local chief executive concerned, undertake the procurement of supplies by
negotiated purchase, regardless of amount, without public bidding:
Provided, however, That the contract covering the negotiated purchase
shall be approved by the Sanggunian concerned. Delivery of purchase
orders or utilization of repair orders pursuant to this Section shall be made
within seven (7) days after placement of the same. Immediately after the
negotiated purchase or repair order is made, the local chief executive
concerned shall draw a regular requisition to cover the same which shall
contain the following:
(1) A complete description of the supplies acquired or the work
done or to be performed;
(2) By whom furnished or executed;
(3) Date of placing the order and the date and time of delivery or
execution;

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(4) The unit price and the total contract price;
(5) A certification of the provincial or city general services or the
municipal or Barangay treasurer, as the case may be, to the
effect that the price paid or contracted for was the lowest at
the time of procurement;
(6) A certification to the effect that the price paid or contracted
for was the lowest at the time of procurement; and
(7) A certification of the local budget officer as to the existence
of appropriations for the purpose, the local accountant as to
the obligation of the amount involved, and the local treasurer
as to the availability of funds.
(b) In case of repeat orders for regular supplies, procurement may be
made by negotiated purchase: Provided, That the repeat order is
made within three (3) months from the last procurement of the
same item: Provided, further, That the same terms and conditions
of sale are obtained for the said repeat order.
SECTION 370. Procurement from Duly Licensed Manufacturer. -
Procurement may be made directly from duly licensed manufacturers in
cases of supplies of Philippine manufacture or origin and in case there are
two (2) or more manufacturers of the required supplies, canvass of the
known manufacturers shall be conducted to obtain the lowest price for the
quality of the said supplies.
SECTION 371. Procurement from Exclusive Philippine Agents or
Distributors. - Procurement may, in the case of supplies of foreign origin,
preferably be made directly from the exclusive or reputable Philippine
distributors or agents, subject to the following conditions:
(a) That the Philippine distributor has no subdealers selling at lower
prices; and
(b) That no suitable substitutes of substantially the same quality are
available at lower prices.
SECTION 372. Procurement from Government Entities. - Procurement may
be made directly from government entities producing the required
supplies, including units or agencies of foreign governments with which
the Philippines maintains diplomatic relations. In the latter case, prior
authority from the Office of the President shall be required.

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SECTION 373. Annual Procurement Program. - (a) On or before the fifteenth
(15th) day of July each year, the local chief executive shall prepare an
annual procurement program for the ensuing fiscal year which shall
contain an itemized list of the estimated quantity of supplies needed for
such year, a complete description thereof as to kind, quality, estimated
cost, and balance on hand: Provided, however, That the total estimated
cost of the approved annual procurement program shall not exceed the
total appropriations authorized for the acquisition of supplies. The local
government units may augment the supplies and equipment provided
by the Supreme Court to the lower courts located in their respective
jurisdictions.
(b) Except in emergency cases or where urgent indispensable needs
could not have been reasonably anticipated, no purchase of
supplies shall be made unless included in, or covered by, the
approved procurement program.
(c) The conversion of excess cash into supplies stock is hereby
prohibited except to the extent of the kind and quantity specified in
the approved annual procurement plan. A violation of this Section
shall be a ground for suspension or dismissal of any official or
employee responsible therefor.
SECTION 374. Establishment of an Archival System. - Every local
government unit shall provide for the establishment of an archival system
to ensure the safety and protection of all government property, public
documents or records such as records of births, marriages, property
inventory, land assessments, land ownership, tax payments, tax accounts,
and business permits, and such other records or documents of public
interest in the various departments and offices of the provincial, city, or
municipal government concerned.
SECTION 375. Primary and Secondary Accountability for Government
Property. - (a) Each head of department or office of a province, city,
municipality or Barangay shall be primarily accountable for all government
property assigned or issued to his department or office. The person or
persons entrusted with the possession or custody of government property
under the accountability of any head of department or office shall be
immediately accountable to such officer.
(b) The head of a department or office primarily accountable for
government property may any person in possession of the property
or having custody and control thereof under him to keep such
records and make reports as may be necessary for his own
information and protection.

155
(c) Buildings and other physical structures shall be under the
accountability and responsibility of the provincial or city general
services officer or the municipal mayor or Punong Barangay, as the
case may be.
(d) Every officer primarily accountable for government property shall
keep a complete record of all properties under his charge and
render his accounts therefor semiannually to the provincial or city
general services officer or the municipal mayor or Punong
Barangay, as the case may be.
SECTION 376. Responsibility for Proper Use and Care of Government
Property. - The person in actual physical possession of government
property or entrusted with its custody and control shall be responsible for
its proper use and care and shall exercise due diligence in the utilization
and safekeeping thereof.
SECTION 377. Measure of Liability of Persons Accountable for Government
Property. - (a) The person immediately accountable for government
property shall be liable for its money value in case of the illegal, improper
or unauthorized use or misapplication thereof, by himself or any other
person for whose acts he may be responsible, and he shall be liable for all
loss, damage, or deterioration occasioned by negligence in the keeping or
use of such property unless it is proved that he has exercised due
diligence and care in the utilization and safekeeping thereof.
(b) Unless he registers his objection in writing, an accountable person
shall not be relieved from liability by reason of his having acted
under the direction of a superior officer in using property with which
he is chargeable; but the officer directing any illegal, unauthorized
or improper use of property shall first be required to answer
therefor.
(c) In cases of loss, damage, or deterioration of government property
arising from, or attributable to, negligence in security, the head of
the security agency shall be held liable therefor.
SECTION 378. Credit for Loss Occurring in Transit or Due to Casualty. -
When a loss of government property occurs while the same is in transit or
is caused by fire, theft, force majeure, or other casualty, the officer
accountable therefor or having custody thereof shall immediately notify the
provincial or city auditor concerned within thirty (30) days from the date
the loss occurred or for such longer period as the provincial, city or
municipal auditor, as the case may be, may in the particular case allow,
and he shall present his application for relief, with the available evidence
in support thereof. An officer who fails to comply with this requirement

156
shall not be relieved of liability or allowed credit for any such loss in the
settlement of his accounts.
A provincial, city or municipal auditor shall not allow credit for these losses
unless so expressly authorized by the Chairman of the Commission on
Audit , to be exercised only if the loss is not in excess of fifty thousand
pesos (Php50,000.00). In any case when the allowance of credit is not
within the competence of the provincial, city or municipal auditor, the
application and evidence, with the recommendation of the auditor
concerned, shall be forwarded to the Chairman of the Commission on
Audit for his appropriate action.
SECTION 379. Property Disposal. - When property of any local government
unit has become unserviceable for any cause or is no longer needed, it
shall, upon application of the officer accountable therefor, be inspected
and appraised by the provincial, city or municipal auditor, as the case may
be, or his duly authorized representative or that of the Commission on
Audit and, if found valueless or unusable, shall be destroyed in the
presence of the inspecting officer.
If found valuable, the same shall be sold at public auction to the highest
bidder under the supervision of the committee on awards and in the
presence of the provincial, city or municipal auditor or his duly authorized
representative. Notice of the public auction shall be posted in at least
three (3) publicly accessible and conspicuous places, and if the acquisition
cost exceeds One hundred thousand pesos (Php100,000.00) in the case
of provinces and cities, and Fifty thousand (Php50,000.00) in the case of
municipalities, notice of auction shall be published at least two (2) times
within a reasonable period in a newspaper of general circulation in the
locality.
SECTION 380. Negotiated Sale of Property. - Property no longer needed may
also be disposed of at a private sale at such price as may be determined
by the committee on awards, subject to the approval of the Commission
on Audit or its duly authorized representative when the acquisition or
transfer cost of the property exceeds Fifty thousand pesos (Php50,000.00)
in the case of provinces and cities, and Twenty-five thousand
(Php25,000.00) in the case of municipalities and Barangays. In case of
real property, the disposal shall be subject to the approval of the
Commission on Audit regardless of the value or cost involved.
SECTION 381. Transfer Without Cost. - Property which has become
unserviceable or is no longer needed may be transferred without cost to
another office, agency, subdivision or instrumentality of the national
government or another local government unit at an appraised valuation
determined by the local committee on awards. Such transfer shall be

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subject to the approval of the Sanggunian concerned making the transfer
and by the head of the office, agency, subdivision, instrumentality or local
government unit receiving the property.
SECTION 382. Tax Exemption Privileges of Local Government Units. - Local
government units shall be exempt from the payment of duties and taxes
for the importation of heavy equipment or machineries which shall be used
for the construction, improvement, repair, and maintenance of roads,
bridges and other infrastructure projects, as well as garbage trucks, fire
trucks, and other similar equipment: Provided, however, That such
equipment or machineries shall not be disposed of, either by public
auction or negotiated sale as hereinabove provided, within five (5) years
from the importation thereof. In case the machinery or equipment is sold
within the five-year period, the purchasers or recipients shall be
considered the importers thereof, and shall be liable for duties and taxes
computed on the book value of such importation.
SECTION 383. Implementing Rules and Regulations. - The Chairman of the
Commission on Audit shall promulgate the rules and regulations
necessary to effectively implement the provisions of this Title, including
requirements as to testing, inspection, and standardization of supply and
property.

BOOK III
LOCAL GOVERNMENT UNITS
TITLE ONE. – THE BARANGAY
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CHAPTER 1. – ROLE AND CREATION OF THE BARANGAY
SECTION. 384. Role of the Barangay. - As the basic political unit, the Barangay
serves as the primary planning and implementing unit of government
policies, plans, programs, projects, and activities in the community, and as
a forum wherein the collective view s of the people may be expressed,
crystallized and considered, and where disputes may be amicably settled.
SECTION. 385. Manner of Creation. - A Barangay may be created, divided,
merged, abolished, or its boundary substant ially altered, by law or by an
ordinance of the Sangguniang Panlalawigan or Sangguniang Panlungsod,
subject to approval by a majority of the votes cast in a plebiscite to be
conducted by the Comelec in the loca l government unit or units directly
affected within such period of time as may be determined by the law or
ordinance creating said Barangay. In the case of the creation of
Barangays by the Sangguniang Panlalawi gan, the recommendation of the
Sangguniang Bayan concerned shall be necessary.
SECTION. 386. Requisites for Creation. - (a) A Barangay maybe created out of
a contiguous territory which has a population of at least two thousand
(2,000) inhabitants as certified by the National Statistics Office except in
cities and municipalities within Metro Manila and other metropolitan
political subdivisions or in highly urbanized cities where such territory shall
have a certified population of at least five thousand(5,000) inhabitants:
Provided, That the creation thereof shall not reduce the population of the
original Barangay or Barangays to less than the minimum requirement
prescribed herein.
To enhance the delivery of basic services in the indigenous cultural
communities, Barangays may be created in such communities by an Act
of Congress, notwithstanding the above requirement.
(b) The territorial jurisdiction of the new Barangay shall be properly
identified by metes and bounds or by more or less permanent
natural boundaries. The territory need not be contiguous if it
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(c) The governor or city mayor may prepare a consolidation plan for
Barangays, based on the criteria prescribed in this Section, within
his territorial jurisdiction. The plan shall be submitted to the
Sangguniang Panlalawigan or Sangguniang Panlungsod concerned
for appropriate action.
In the case of municipalities within the Metropolitan Manila area
and other metropolitan political subdivisions, the Barangay
consolidation plan shall be prepared and approved by the
Sangguniang Bayan concerned.
CHAPTER 2 - Barangay Officials and Offices
SECTION. 387. Chief Officials and Offices. - (a) There shall be in each
Barangay a Punong Barangay, seven (7) Sangguniang Barangay
members, the Sangguniang Kabataan chairman, a Barangay Secretary,
and a Barangay treasurer.
(b) There shall also be in every Barangay a Lupong Tagapamayapa.
The Sangguniang Barangay may form community brigades and
create such other positions or offices as may be deemed necessary
to carry out the purposes of the Barangay government in
accordance with the needs of public service, subject to the
budgetary limitations on personal services prescribed under Title
Five, Book II of this Code.
SECTION. 388. Persons in Authority. - For purposes of the Revised Penal
Code, the Punong Barangay, Sangguniang Barangay members, and
members of the Lupong Tagapamayapa in each Barangay shall be
deemed as persons in authority in their jurisdictions, while other Barangay
officials and members who may be designated by law or ordinance and
charged with the maintenance of public order, protection and security of
life and property, or the maintenance of a desirable and balanced
environment, and any Barangay member who comes to the aid of persons
in authority, shall be deemed agents of persons in authority.
CHAPTER 3 - THE Punong Barangay
SECTION. 389. Chief Executive: Powers, Duties, and Functions. - (a) The
Punong Barangay, as the chief executive of the Barangay government,
shall exercise such powers and perform such duties and functions, as
provided by this Code and other laws.

160
(b) For efficient, effective and economical governance, the purpose of
which is the general welfare of the Barangay and its inhabitants
pursuant to Section 16 of this Code, the Punong Barangay shall:
(a) Enforce all laws and ordinances which are applicable within
the Barangay;
(b) Negotiate, enter into, and sign contracts for and in behalf of
the Barangay, upon authorization of the Sangguniang
Barangay;
(c) Maintain public order in the Barangay and, in pursuance
thereof, assist the city or municipal mayor and the
sanggunian members in the performance of their duties and
functions;
(d) Call and preside over the sessions of the Sangguniang
Barangay and the Barangay assembly, and vote only to
break a tie;
(e) Upon approval by a majority of all the members of the
Sangguniang Barangay, appoint or replace the Barangay
treasurer, the Barangay secretary, and other appointive
Barangay officials;
(f) Organize and lead an emergency group whenever the same
may be necessary for the maintenance of peace and order
or on occasions of emergency or calamity within the
Barangay;
(g) In coordination with the Barangay development council,
prepare the annual executive and supplemental budgets of
the Barangay;
(h) Approve vouchers relating to the disbursement of Barangay
funds;
(i) Enforce laws and regulations relating to pollution control and
protection of the environment;
(j) Administer the operation of the Katarungang PamBarangay
in accordance with the provisions of this Code;
(k) Exercise general supervision over the activities of the
Sangguniang Kabataan;

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(l) Ensure the delivery of basic services as mandated under
Section 17 of this Code;
(m) Conduct an annual palarong Barangay which shall feature
traditional sports and disciplines included in national and
international games, in coordination with the Department of
Education, Culture and Sports;
(n) Promote the general welfare of the Barangay; and
(o) Exercise such other powers and perform such other duties
and functions as may be prescribed by law or ordinance.
(b) In the performance of his peace and order functions, the Punong
Barangay shall be entitled to possess and carry the necessary
firearm within his territorial jurisdiction, subject to appropriate rules
and regulations.
CHAPTER 4 - The Sangguniang Barangay
SECTION. 390. Composition. - The Sangguniang Barangay, the legislative
body of the Barangay, shall be composed of the Punong Barangay as
presiding officer, and the seven (7) regular Sangguniang Barangay
members elected at large and Sangguniang Kabataan chairman, as
members.
SECTION. 391. Powers, Duties, and Functions. - (a) The Sangguniang
Barangay, as the legislative body of the Barangay, shall:
(a) Enact ordinances as may be necessary to discharge the
responsibilities conferred upon it by law or ordinance and to
promote the general welfare of the inhabitants therein;
(b) Enact tax and revenue ordinances, subject to the limitations
imposed in this Code;
(c) Enact annual and supplemental budgets in accordance with
the provisions of this Code;
(d) Provide for the construction and maintenance of Barangay
facilities and other public works projects chargeable to the
general fund of the Barangay or such other funds actually
available for the purpose;
(e) Submit to the Sangguniang Panlungsod or Sangguniang
Bayan such suggestions or recommendations as it may see

162
fit for the improvement of the Barangay or for the welfare of
the inhabitants thereof;
(f) Assist in the establishment, organization, and promotion of
cooperative enterprises that will improve the economic
condition and well-being of the residents;
(g) Regulate the use of multi-purpose halls, multipurpose
pavements, grain or copra dryers, patios and other post-
harvest facilities, Barangay waterworks, Barangay markets,
parking areas or other similar facilities constructed with
government funds within the jurisdiction of the Barangay and
charge reasonable fees for the use thereof;
(h) Solicit or accept monies, materials and voluntary labor for
specific public works and cooperative enterprises of the
Barangay from residents, land owners, producers and
merchants in the Barangay; monies from grants-in-aid,
subsidies, contributions, and revenues made available to the
Barangays from national, provincial, city or municipal funds;
and monies from other private agencies and individuals:
Provided, however, That monies or properties donated by
private agencies and individuals for specific purposes shall
accrue to the Barangay as trust fund;
(i) Solicit or accept, in any or all the foregoing public works and
cooperative enterprises, such cooperation as is made
available by national, provincial, city, or municipal agencies
established by law to render financial, technical, and
advisory assistance to Barangays and to Barangay
residents: Provided, however, That in soliciting or accepting
such cooperation, the Sangguniang Barangay need not
pledge any sum of money for expenditure in excess of
amounts currently in the Barangay treasury or encumbered
for other purposes;
(10) Provide compensation, reasonable allowances or per diems as well
as travel expenses for Sangguniang Barangay members and other
Barangay officials, subject to the budgetary limitations prescribed
under Title Five, Book II of this Code: Provided, however, That no
increase in the compensation or honoraria of the Sangguniang
Barangay members shall take effect until after the expiration of the
full term of all members of the Sangguniang Barangay approving
such increase;

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(11) Hold fund-raising activities for Barangay projects without the need
of securing permits from any national or local office or agency. The
proceeds from such activities shall be tax-exempt and shall accrue
to the general fund of the Barangay: Provided, That in the
appropriation thereof, the specific purpose for which such fund-
raising activity has been held shall be first satisfied: Provided,
further, That no fund-raising activities shall be held within a period
of sixty(60) days immediately preceding and after a national or local
election, recall, referendum, or plebiscite: Provided, finally, That
said fund-raising activities shall comply with national policy
standards and regulations on morals, health, and safety of the
persons participating therein. The Sangguniang Barangay, through
the Punong Barangay, shall render a public accounting of the funds
raised at the completion of the project for which the fund-raising
activity was undertaken;
Authorize the Punong Barangay to enter into contracts in behalf of
the Barangay, subject to the provisions of this Code;
(12)
(a) Authorize the Barangay treasurer to make direct purchases
in an amount not exceeding One thousand pesos
(P1,000.00) at any one time for the ordinary and essential
administrative needs of the Barangay;
(b) Prescribe fines in amounts not exceeding One thousand
pesos (P1,000.00) for violation of Barangay ordinances;
(c) Provide for the administrative needs of the Lupong
Tagapamayapa and the pangkat ng tagapagkasundo;
(d) Provide for the organization of community brigades,
Barangay tanod, or community service units as may be
necessary;
(e) Organize regular lectures, programs, or fora on community
problems such as sanitation, nutrition, literacy, and drug
abuse, and convene assemblies to encourage citizen
participation in government;
(f) Adopt measures to prevent and control the proliferation of
squatters and mendicants in the Barangay;
(g) Provide for the proper development and welfare of children
in the Barangay by promoting and supporting activities for
the protection and total development of children, particularly
those below seven (7) years of age;

164
(h) Adopt measures towards the prevention and eradication of
drug abuse, child abuse, and juvenile delinquency;
(i) Initiate the establishment of a Barangay high school,
whenever feasible, in accordance with law;
(j) Provide for the establishment of a non-formal education
center in the Barangay whenever feasible, in coordination
with the Department of Education, Culture and Sports, ;
(k) Provide for the delivery of basic services; and
(24) Exercise such other powers and perform such other duties and
functions as may be prescribed by law or ordinance.
SECTION. 392. Other Duties of Sangguniang Barangay Members. - In
addition to their duties as members of the Sangguniang Barangay,
Sangguniang Barangay members may:
(a) Assist the Punong Barangay in the discharge of his duties and
functions;
(b) Act as peace officers in the maintenance of public order and safety;
and
(c) Perform such other duties and functions as the Punong Barangay
may delegate.
SECTION. 393. Benefits of Barangay Officials. - (a) Barangay officials,
including Barangay tanods and members of the Lupong Tagapamayapa,
shall receive honoraria, allowances, and such other emoluments as may
be authorized by law or Barangay, municipal or city ordinance in
accordance with the provisions of this Code, but in no case shall it be less
than One thousand pesos (P=1,000.00) per month for the Punong
Barangay and Six hundred pesos (P=600.00) per month for the
Sangguniang Barangay members, Barangay treasurer, and Barangay
secretary: Provided, however, That the annual appropriations for personal
services shall be subject to the budgetary limitations prescribed under
Title Five, Book II of this Code;
(b) The Punong Barangay, the Sangguniang Barangay members, the
Barangay treasurer, and the Barangay secretary shall also:
(1) Be entitled to Christmas bonus of at least One thousand
pesos (P1,000.00) each, the funds for which shall be taken
from the general fund of the Barangay or from such other

165
funds appropriated by the national government for the
purpose;
(2) (2) Be entitled, during their incumbency, to insurance
coverage which shall include, but shall not be limited to
temporary and permanent disability, double indemnity,
accident insurance, death and burial benefits, in accordance
with Republic Act Numbered Sixty-nine hundred forty-two
(R.A. No. 6942), entitled "An Act Increasing the Insurance
Benefits of Local Government Officials and Providing Funds
Therefor";
(3) Be entitled to free medical care including subsistence,
medicines, and medical attendance in any government
hospital or institution: Provided, That such hospital care shall
include surgery or surgical expenses, medicines, X-rays,
laboratory fees, and other hospital expenses;
In case of extreme urgency where there is no available government
hospital or institution, the Barangay official concerned may submit himself
for immediate medical attendance to the nearest private clinic, hospital or
institution and the expenses not exceeding Five thousand pesos
(P5,000.00) that may be incurred therein shall be chargeable against the
funds of the Barangay concerned;
(a) Be exempted during their incumbency from paying tuition and
matriculation fees for their legitimate dependent children attending
state colleges or universities. He may likewise avail of such
educational benefits in a state college or university located within
the province or city to which the Barangay belongs; and
(b) Be entitled to appropriate civil service eligibility on the basis of the
number of years of service to the Barangay, pursuant to the rules
and regulations issued by the Civil Service Commission.
(c) Elective Barangay officials shall have preference in appointments to
any government position or in any government-owned or -controlled
corporations, including their subsidiaries, after their tenure of office,
subject to the requisite qualifications and the provisions of the
immediately preceding paragraph.
(d) All duly appointed members of the Barangay tanod brigades, or
their equivalent, which shall number not more than twenty (20) in
each Barangay, shall be granted insurance or other benefits during
their incumbency, chargeable to the Barangay or the city or
municipal government to which the Barangay belongs.

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CHAPTER 5 - APPOINTIVE BARANGAY OFFICIALS
SECTION. 394. Barangay secretary: Appointment, Qualifications, Powers
and Duties. - (a) The Barangay secretary shall be appointed by the
Punong Barangay with the concurrence of the majority of all the
Sangguniang Barangay members. The appointment of the Barangay
secretary shall not be subject to attestation by the Civil Service
Commission.
(b) The Barangay secretary shall be of legal age, a qualified voter and
an actual resident of the Barangay concerned.
(c) No person shall be appointed Barangay secretary if he is a
Sangguniang Barangay member, a government employee, or a
relative of the Punong Barangay within the fourth civil degree of
consanguinity or affinity.
(d) The Barangay secretary shall:
(a) Keep custody of all records of the Sangguniang Barangay
and the Barangay assembly meetings;
(b) Prepare and keep the minutes of all meetings of the
Sangguniang Barangay and the Barangay assembly;
(c) Prepare a list of members of the Barangay assembly, and
have the same posted in conspicuous places within the
Barangay;
(d) Assist in the preparation of all necessary forms for the
conduct of Barangay elections, initiatives, referenda or
plebiscites, in coordination with the Comelec;
(e) Assist the municipal civil registrar in the registration of births,
deaths, and marriages;
(f) Keep an updated record of all inhabitants of the Barangay
containing the following items of information: name, address,
place and date of birth, sex, civil status, citizenship,
occupation, and such other items of information as may be
prescribed by law or ordinances;

167
(g) Submit a report on the actual number of Barangay residents
as often as may be required by the Sangguniang Barangay;
and
(h) Exercise such other powers and perform such other duties
SECTION. 395. Barangay Treasurer: Appointment, Qualifications, Powers
and Duties. - (a) The Barangay treasurer shall be appointed by the
Punong Barangay with the concurrence of the majority of all the
Sangguniang Barangay members. The appointment of the Barangay
treasurer shall not be subject to attestation by the Civil Service
Commission.
(b) The Barangay treasurer shall be of legal age, a qualified voter, and
an actual resident of the Barangay concerned.
(c) No person shall be appointed Barangay treasurer if he is a
Sangguniang Barangay member, a government employee, or a
relative of the Punong Barangay within the fourth civil degree of
consanguinity or affinity.
(d) The Barangay treasurer shall be bonded in accordance with
existing laws in an amount to be determined by the Sangguniang
Barangay but not exceeding Ten thousand pesos (P=10,000.00),
premiums for which shall be paid by the Barangay.
(e) The Barangay treasurer shall:
(a) Keep custody of Barangay funds and properties;
(b) Collect and issue official receipts for taxes, fees,
contributions, monies, materials, and all other resources
accruing to the Barangay treasury and deposit the same in
the account of the Barangay as provided under Title Five,
Book II of this Code;
(c) Disburse funds in accordance with the financial procedures
provided in this Code;
(d) Submit to the Punong Barangay a statement covering the
actual and estimates of income and expenditures for the
preceding and ensuing calendar years, respectively, subject
to the provisions of Title Five, Book II of this Code;

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(e) Render a written accounting report of all Barangay funds and
property under his custody at the end of each calendar year,
and ensure that such report shall be made available to the
members of the Barangay assembly and other government
agencies concerned;
(f) Certify as to the availability of funds whenever necessary;
(g) Plan and attend to the rural postal circuit within his
jurisdiction; and
(h) Exercise such other powers and perform such other duties
SECTION. 396. Other Appointive Officials. - The qualifications, duties, and
functions of all other Barangay officials appointed by the Punong
Barangay shall be governed by the provisions of this Code and other laws
or by Barangay ordinances.
CHAPTER 6 - BARANGAY ASSEMBLY
SECTION. 397. Composition; Meetings. - (a) There shall be a Barangay
assembly composed of all persons who are actual residents of the
Barangay for at least six (6) months, fifteen(15) years of age or over,
citizens of the Philippines, and duly registered in the list of Barangay
assembly members.
(b) The Barangay assembly shall meet at least twice a year to hear
and discuss the semestral report of the Sangguniang Barangay
concerning its activities and finances as well as problems affecting
the Barangay. Its meetings shall be held upon call of the Punong
Barangay or of at least four (4) members of the Sangguniang
Barangay, or upon written petition of at least five percent (5%) of
the assembly members.
(c) No meeting of the Barangay assembly shall take place unless a
written notice is given one (1) week prior to the meeting except on
matters involving public safety or security, in which case notice
within a reasonable time shall be sufficient. The Punong Barangay,
or in his absence, the Sangguniang Barangay member acting as
Punong Barangay, or any assembly member selected during the
meeting, shall act as presiding officer in all the meetings of the
assembly. The Barangay secretary, or in his absence, any member
designated by the presiding officer to act as secretary, shall
discharge the duties of secretary of the Barangay assembly.

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SECTION. 398. Powers of the Barangay Assembly. - The Barangay assembly
shall:
(a) Initiate legislative processes by recommending to the Sangguniang
Barangay the adoption of measures for the welfare of the Barangay
and the city or municipality concerned;
(b) Decide on the adoption of initiative as a legal process whereby the
registered voters of the Barangay may directly propose, enact, or
amend any ordinance; and
(c) Hear and pass upon the semestral report of the Sangguniang
Barangay concerning its activities and finances.
CHAPTER 7 - KATARUNGANG PAMBARANGAY
SECTION. 399. Lupong Tagapamayapa. - (a) There is hereby created in each
Barangay a Lupong Tagapamayapa, hereinafter referred to as the lupon,
composed of the Punong Barangay as chairman and ten(10) to twenty
(20) members. The lupon shall be constituted every three (3) years in the
manner provided herein.
(a) Any person actually residing or working in the Barangay, not
otherwise expressly disqualified by law, and possessing integrity,
impartiality, independence of mind, sense of fairness, and
reputation for probity, may be appointed a member of the lupon.
(a) A notice to constitute the lupon, which shall include the names of
proposed members who have expressed their willingness to serve,
shall be prepared by the Punong Barangay within the first fifteen
(15) days from the start of his term of office. Such notice shall be
posted in three (3) conspicuous places in the Barangay
continuously for a period of not less than three(3) weeks;
(b) The Punong Barangay, taking into consideration any opposition to
the proposed appointment or any recommendations for
appointments as may have been made within the period of posting,
shall within ten (10) days thereafter, appoint as members those
whom he determines to be suitable therefor. Appointments shall be
in writing, signed by the Punong Barangay, and attested to by the
Barangay secretary.
(c) The list of appointed members shall be posted in three (3)
conspicuous places in the Barangay for the entire duration of their
term of office; and

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(d) In Barangays where majority of the inhabitants are members of
indigenous cultural communities, local systems of es through their
councils of datus or elders shall be recognized without prejudice to
the applicable provisions of this Code.
SECTION. 400. Oath and Term of Office. - Upon appointment, each lupon
member shall take an oath of office before the Punong Barangay. He shall
hold office until a new lupon is constituted on the third year following his
appointment unless sooner terminated by resignation, transfer of
residence or place of work, or withdrawal of appointment by the Punong
Barangay with the concurrence of the majority of all the members of the
lupon.
SECTION. 401. Vacancies. - Should a vacancy occur in the lupon for any cause,
the Punong Barangay shall immediately appoint a qualified person who
shall hold office only for the unexpired portion of the term.
SECTION. 402. Functions of the Lupon. - The lupon shall:
(a) Exercise administrative supervision over the conciliation panels
provided herein;
(b) Meet regularly once a month to provide a forum for exchange of
ideas among its members and the public on matters relevant to the
amicable settlement of disputes, and to enable various conciliation
panel members to share with one another their observations and
experiences in effecting speedy resolution of disputes; and
(c) Exercise such other powers and perform such other duties and
SECTION. 403. Secretary of the Lupon. - The Barangay secretary shall
concurrently serve as the secretary of the lupon. He shall record the
results of mediation proceedings before the Punong Barangay and shall
submit a report thereon to the proper city or municipal courts. He shall
also receive and keep the records of proceedings submitted to him by the
various conciliation panels.
SECTION. 404. Pangkat ng Tagapagkasundo. - (a) There shall be constituted
for each dispute brought before the lupon a conciliation panel to be known
as the pangkat ng tagapagkasundo, hereinafter referred to as the pangkat,
consisting of three (3) members who shall be chosen by the parties to the
dispute from the list of members of the lupon.
Should the parties fail to agree on the pangkat membership, the same
shall be determined by lots drawn by the lupon chairman.

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(b) The three (3) members constituting the pangkat shall elect from
among themselves the chairman and the secretary. The secretary
shall prepare the minutes of the pangkat proceedings and submit a
copy duly attested to by the chairman to the lupon secretary and to
the proper city or municipal court. He shall issue and cause to be
served notices to the parties concerned.
The lupon secretary shall issue certified true copies of any public
record in his custody that is not by law otherwise declared
confidential.
SECTION. 405. Vacancies in the Pangkat. - Any vacancy in the pangkat shall
be chosen by the parties to the dispute from among the other lupon
members. Should the parties fail to agree on a common choice, the
vacancy shall be filled by lot to be drawn by the lupon chairman.
SECTION. 406. Character of Office and Service of Lupon Members. -(a) The
lupon members, while in the performance of their official duties or on the
occasion thereof, shall be deemed as persons in authority, as defined in
the Revised Penal Code.
(b) The lupon or pangkat members shall serve without compensation,
except as provided for in Section 393 and without prejudice to
incentives as provided for in this Section and in Book IV of this
Code. The Department of the Interior and Local Government shall
provide for a system of granting economic or other incentives to the
lupon or pangkat members who adequately demonstrate the ability
to judiciously and expeditiously resolve cases referred to them.
While in the performance of their duties, the lupon or pangkat
members, whether in public or private employment, shall be
deemed to be on official time, and shall not suffer from any
diminution in compensation or allowance from said employment by
reason thereof.
SECTION. 407. Legal Advice on Matters Involving Questions of Law. - The
provincial, city legal officer or prosecutor or the municipal legal officer shall
render legal advice on matters involving questions of law to the Punong
Barangay or any lupon or pangkat member whenever necessary in the
exercise of his functions in the administration of the katarungang
pamBarangay.
SECTION. 408. Subject Matter for Amicable Settlement; Exception Thereto.
- The lupon of each Barangay shall have authority to bring together the
parties actually residing in the same city or municipality for amicable
settlement of all disputes except:

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(a) Where one party is the government, or any subdivision or
instrumentality thereof;
(b) Where one party is a public officer or employee, and the dispute
relates to the performance of his official functions;
(c) Offenses punishable by imprisonment exceeding one (1) year or a
fine exceeding Five thousand pesos (Php5,000.00);
(d) Offenses where there is no private offended party;
(e) Where the dispute involves real properties located in different cities
or municipalities unless the parties thereto agree to submit their
differences to amicable settlement by an appropriate lupon;
(f) Disputes involving parties who actually reside in Barangays of
different cities or municipalities, except where such Barangay units
adjoin each other and the parties thereto agree to submit their
differences to amicable settlement by an appropriate lupon;
(d) Such other classes of disputes which the President may determine
in the interest of justice or upon the recommendation of the
secretary of Justice.
The court in which non-criminal cases not falling within the authority
of the lupon under this Code are filed may, at any time before trial,
motu proprio refer the case to the lupon concerned for amicable
settlement.
SECTION. 409. Venue. - (a) Disputes between persons actually residing in the
same Barangay shall be brought for amicable settlement before the lupon
of said Barangay.
(b) Those involving actual residents of different Barangays within the
same city or municipality shall be brought in the Barangay where
the respondent or any of the respondents actually resides, at the
election of the complainant.
(c) All disputes involving real property or any interest therein shall be
brought in the Barangay where the real property or the larger
portion thereof is situated.
(d) Those arising at the workplace where the contending parties are
employed or at the institution where such parties are enrolled for

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study, shall be brought in the Barangay where such workplace or
institution is located.
Objections to venue shall be raised in the mediation proceedings
before the Punong Barangay; otherwise, the same shall be deemed
waived. Any legal question which may confront the Punong
Barangay in resolving objections to venue herein referred to may
be submitted to the secretary of Justice, or his duly designated
representative, whose ruling thereon shall be binding.
SECTION. 410. Procedure for Amicable Settlement. - (a) Who may initiate
proceeding - Upon payment of the appropriate filing fee, any individual
who has a cause of action against another individual involving any matter
within the authority of the lupon may complain, orally or in writing, to the
lupon chairman of the Barangay.
(b) Mediation by lupon chairman - Upon receipt of the complaint, the
lupon chairman shall within the next working day summon the
respondent(s), with notice to the complainant(s) for them and their
witnesses to appear before him for a mediation of their conflicting
interests. If he fails in his mediation effort within fifteen (15) days
from the first meeting of the parties before him, he shall forthwith
set a date for the constitution of the pangkat in accordance with the
provisions of this Chapter.
(c) Suspension of prescriptive period of offenses - While the dispute is
under mediation, conciliation, or arbitration, the prescriptive periods
for offenses and cause of action under existing laws shall be
interrupted upon filing of the complaint with the Punong Barangay.
The prescriptive periods shall resume upon receipt by the
complainant of the complaint or the certificate of repudiation or of
the certification to file action issued by the lupon or pangkat
secretary: Provided, however, That such interruption shall not
exceed sixty (60) days from the filing of the complaint with the
Punong Barangay.
(d) Issuance of summons; hearing; grounds for disqualification- The
pangkat shall convene not later than three (3) days from its
constitution, on the day and hour set by the lupon chairman, to hear
both parties and their witnesses, simplify issues, and explore all
possibilities for amicable settlement. For this purpose, the pangkat
may issue summons for the personal appearance of parties and
witnesses before it. In the event that a party moves to disqualify
any member of the pangkat by reason of relationship, bias, interest,
or any other similar grounds discovered after the constitution of the
pangkat, the matter shall be resolved by the affirmative vote of the

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majority of the pangkat whose decision shall be final. Should
disqualification be decided upon, the resulting vacancy shall be
filled as herein provided for.
(e) Period to arrive at a settlement - The pangkat shall arrive at a
settlement or resolution of the dispute within fifteen (15) days from
the day it convenes in accordance with this section. This period
shall, at the discretion of the pangkat, be extendible for another
period which shall not exceed fifteen (15) days, except in clearly
meritorious cases.
SECTION. 411. Form of Settlement. - All amicable settlements shall be in
writing, in a language or dialect known to the parties, signed by them, and
attested to by the lupon chairman or the pangkat chairman, as the case
may be. When the parties to the dispute do not use the same language or
dialect, the settlement shall be written in the language or dialect known to
them.
SECTION. 412. Conciliation. - (a) Pre-condition to Filing of Complaint in Court. -
No complaint, petition, action, or proceeding involving any matter within
the authority of the lupon shall be filed or instituted directly in court or any
other government office for adjudication, unless there has been a
confrontation between the parties before the lupon chairman or the
pangkat, and that no conciliation or settlement has been reached as
certified by the lupon secretary or pangkat secretary as attested to by the
lupon or pangkat chairman or unless the settlement has been repudiated
by the parties thereto.
(b) Where Parties May Go Directly to Court. - The parties may go
directly to court in the following instances:
(1) Where the accused is under detention;
(2) Where a person has otherwise been deprived of personal
liberty calling for habeas corpus proceedings;
(3) Where actions are coupled with provisional remedies such
as preliminary injunction, attachment, delivery of personal
property, and support pendente lite; and
(4) Where the action may otherwise be barred by the statute of
limitations.
(c) Conciliation among members of indigenous cultural communities. -
The customs and traditions of indigenous cultural communities shall

175
be applied in settling disputes between members of the cultural
communities.
SECTION. 413. Arbitration. - (a) The parties may, at any stage of the
proceedings, agree in writing that they shall abide by the arbitration award
of the lupon chairman or the pangkat. Such agreement to arbitrate may be
repudiated within five (5) days from the date thereof for the same grounds
and in accordance with the procedure hereinafter prescribed. The
arbitration award shall be made after the lapse of the period for
repudiation and within ten (10) days thereafter.
(b) The arbitration award shall be in writing in a language or dialect
known to the parties. When the parties to the dispute do not use the
same language or dialect, the award shall be written in the
language or dialect known to them.
SECTION. 414. Proceedings Open to the Public; Exception. - All proceedings
for settlement shall be public and informal: Provided, however, That the
lupon chairman or the pangkat chairman, as the case may be, may motu
proprio or upon request of a party, exclude the public from the
proceedings in the interest of privacy, decency, or public morals.
SECTION. 415. Appearance of Parties in Person. - In all katarungang
pamBarangay proceedings, the parties must appear in person without the
assistance of counsel or representative, except for minors and
incompetents who may be assisted by their next-of-kin who are not
lawyers.
SECTION. 416. Effect of Amicable Settlement and Arbitration Award. - The
amicable settlement and arbitration award shall have the force and effect
of a final judgment of a court upon the expiration of ten (10) days from the
date thereof, unless repudiation of the settlement has been made or a
petition to nullify the award has been filed before the proper city or
municipal court.
However, this provision shall not apply to court cases settled by the lupon
under the last paragraph of section 408 of this Code, in which case the
compromise settlement agreed upon by the parties before the lupon
chairman or the pangkat chairman shall be submitted to the court and
upon approval thereof, have the force and effect of a judgment of said
court.
SECTION. 417. Execution. - The amicable settlement or arbitration award may
be enforced by execution by the lupon within six (6) months from the date
of the settlement. After the lapse of such time, the settlement may be
enforced by action in the appropriate city or municipal court.

176
SECTION. 418. Repudiation. - Any party to the dispute may, within ten (10)
days from the date of the settlement, repudiate the same by filing with the
lupon chairman a statement to that effect sworn to before him, where the
consent is vitiated by fraud, violence, or intimidation. Such repudiation
shall be sufficient basis for the issuance of the certification for filing a
complaint as hereinabove provided.
SECTION. 419. Transmittal of Settlement and Arbitration Award to the
Court. - The secretary of the lupon shall transmit the settlement or the
arbitration award to the appropriate city or municipal court within five (5)
days from the date of the award or from the lapse of the ten-day period
repudiating the settlement and shall furnish copies thereof to each of the
parties to the settlement and the lupon chairman.
SECTION. 420. Power to Administer Oaths. - The Punong Barangay, as
chairman of the Lupong Tagapamayapa, and the members of the pangkat
are hereby authorized to administer oaths in connection with any matter
relating to all proceedings in the implementation of the katarungang
pamBarangay.
SECTION. 421. Administration; Rules and Regulations. - The city or
municipal mayor, as the case may be, shall see to the efficient and
effective implementation and administration of the katarungang
pamBarangay. The secretary of Justice shall promulgate the rules and
regulations necessary to implement this Chapter.
SECTION. 422. Appropriations. - Such amount as may be necessary for the
effective implementation of the katarungang pamBarangay shall be
provided for in the annual budget of the city or municipality concerned.
CHAPTER 8 - SANGGUNIANG KABATAAN
SECTION. 423. Creation and Election. - (a) There shall be in every Barangay a
Sangguniang Kabataan to be composed of a chairman, seven (7)
members, a secretary, and a treasurer.
(b) A Sangguniang Kabataan official who, during his term of office,
shall have passed the age of twenty-one (21) years shall be
allowed to serve the remaining portion of the term for which he was
elected.
SECTION. 424. Katipunan ng Kabataan. - The katipunan ng kabataan shall be
composed of all citizens of the Philippines actually residing in the
Barangay for at least six (6) months, who are fifteen (15) but not more
than twenty-one (21) years of age, and who are duly registered in the list

177
of the Sangguniang Kabataan or in the official Barangay list in the custody
of the Barangay secretary.
SECTION. 425. Meetings of the Katipunan ng Kabataan. - The katipunan ng
kabataan shall meet at least once every three (3) months, or at the call of
the chairman of the Sangguniang Kabataan or upon written petition of at
least one-twentieth(1/20) of its members, to decide on important issues
affecting the youth of the Barangay .
SECTION. 426. Powers and Functions of the Sangguniang Kabataan. - The
Sangguniang Kabataan shall:
(a) Promulgate resolutions necessary to carry out the objectives of the
youth in the Barangay in accordance with the applicable provisions
of this Code;
(b) Initiate programs designed to enhance the social, political,
economic, cultural, intellectual, moral, spiritual, and physical
development of the members;
(c) Hold fund-raising activities, the proceeds of which shall be tax-
exempt and shall accrue to the general fund of the Sangguniang
Kabataan: Provided, however, That in the appropriation thereof, the
specific purpose for which such activity has been held shall be first
satisfied;
(d) Create such bodies or committees as it may deem necessary to
effectively carry out its programs and activities;
(e) Submit annual and end-of-term reports to the Sangguniang
Barangay on their projects and activities for the survival and
development of the youth in the Barangay ;
(f) Consult and coordinate with all youth organizations in the Barangay
for policy formulation and program implementation;
(g) Coordinate with the appropriate national agency for the
implementation of youth development projects and programs at the
national level;
(h) Exercise such other powers and perform such other duties and
functions as the Sangguniang Barangay may determine or delegate
or as may be prescribed by law or ordinance.
SECTION. 427. Meetings of the Sangguniang Kabataan. - The Sangguniang
Kabataan shall meet regularly once a month on the date, time, and place

178
to be fixed by the said sanggunian. Special meetings may be called by the
Sangguniang Kabataan chairman or any three (3) of its members by
giving written notice to all members of the date, time, place, and agenda of
the meeting at least one (1) day in advance. Notices of regular or special
meetings shall be furnished the Punong Barangay and the Sangguniang
Barangay .
A majority of the members of the Sangguniang Kabataan shall constitute a
quorum.
SECTION. 428. Qualifications. - An elective official of the Sangguniang
Kabataan must be a citizen of the Philippines, a qualified voter of the
katipunan ng kabataan, a resident of the Barangay for at least one (1)
year immediately prior to election, at least fifteen (15) years but not more
than twenty-one (21) years of age on the day of his election, able to read
and write Filipino, English, or the local dialect, and must not have been
convicted of any crime involving moral turpitude.
SECTION. 429. Term of Office. - The Sangguniang Kabataan chairman and
members shall hold office for a period of three (3) years, unless sooner
removed for cause as provided by law, permanently incapacitated, die or
resign from office.
SECTION. 430. Sangguniang Kabataan Chairman. - The registered voters of
the katipunan ng kabataan shall elect the chairman of the Sangguniang
Kabataan who shall automatically serve as an ex-officio member of the
Sangguniang Barangay upon his assumption to office. As such, he shall
exercise the same powers, discharge the same duties and functions, and
enjoy the same privileges as the regular Sangguniang Barangay
members, and shall be the chairman of the committee on youth and sports
development in the said sanggunian.
SECTION. 431. Powers and Duties of the Sangguniang Kabataan Chairman.
- In addition to the duties which may be assigned to him by the
Sangguniang Barangay, the Sangguniang Kabataan chairman shall:
(a) Call and preside over all meetings of the katipunan ng kabataan
and the Sangguniang Kabataan;
(b) Implement policies, programs, and projects within his jurisdiction in
coordination with the Sangguniang Barangay ;
(c) Exercise general supervision over the affairs and activities of the
Sangguniang Kabataan and the official conduct of its members,
and such other officers of the Sangguniang Kabataan within his
jurisdiction;

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(d) With the concurrence of the Sangguniang Kabataan, appoint from
among the members of the Sangguniang Kabataan, the secretary
and treasurer, and such other officers as may be deemed
necessary; and
(e) Exercise such other powers and perform such other duties and
SECTION. 432. Sangguniang Kabataan Secretary. - The Sangguniang
Kabataan secretary shall :
(a) Keep all records of the katipunan ng kabataan and Sangguniang
Kabataan;
(b) Prepare and keep the minutes of all meetings of the katipunan ng
kabataan and Sangguniang Kabataan;
(c) Prepare all forms necessary for the conduct of registrations,
elections, initiatives, referenda, or plebiscites, in coordination with
the Barangay secretary and the Comelec; and
(d) Perform such other duties and discharge such other functions as
the chairman of the Sangguniang Kabataan may prescribe or
direct.
SECTION. 433. Sangguniang Kabataan Treasurer. - The Sangguniang
Kabataan treasurer shall:
(a) Take custody of all Sangguniang Kabataan property and funds not
otherwise deposited with the city or municipal treasurer;
(b) Collect and receive contributions, monies, materials, and all other
resources intended for the Sangguniang Kabataan and katipunan
ng kabataan;
(c) Disburse funds in accordance with an approved budget of the
(d) Certify to the availability of funds whenever necessary;
(e) Submit to the Sangguniang Kabataan and to the Sangguniang
Barangay certified and detailed statements of actual income and
expenditures at the end of every month; and

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(f) Perform such other duties and discharge such other functions as
the chairman of the Sangguniang Kabataan may direct.
SECTION. 434. Privileges of Sangguniang Kabataan Officials. - The
Sangguniang Kabataan chairman shall have the same privileges enjoyed
by otherSangguniang Barangay officials under this Code subject to such
requirements and limitations provided herein. During their incumbency,
Sangguniang Kabataan officials shall be exempt from payment of tuition
and matriculation fees while enrolled in public tertiary schools, including
state colleges and universities. The national government shall reimburse
said college or university the amount of the tuition and matriculation fees:
Provided, That, to qualify for the privilege, the said officials shall enroll in
the state college or university within or nearest their area of jurisdiction
SECTION. 435. Succession and Filling of Vacancies. - (a) In case a
Sangguniang Kabataan chairman refuses to assume office, fails to qualify,
is convicted of a felony, voluntarily resigns, dies, is permanently
incapacitated, is removed from office, or has been absent without leave for
more than three (3) consecutive months, the Sangguniang Kabataan
member who obtained the next highest number of votes in the election
immediately preceding shall assume the office of the chairman for the
unexpired portion of the term, and shall discharge the powers and duties,
and enjoy the rights and privileges appurtenant to the office. In case the
said member refuses to assume the position or fails to qualify, the
sanggunian member obtaining the next highest number of votes shall
assume the position of the chairman for the unexpired portion of the term.
(b) Where two (2) or more Sangguniang Kabataan members obtained
the same next highest number of votes, the other Sangguniang
Kabataan members shall conduct an election to choose the
successor to the chairman from among the said members.
(c) After the vacancy shall have been filled, the Sangguniang
Kabataan chairman shall call a special election to complete the
membership of said sanggunian. Such Sangguniang Kabataan
member shall hold office for the unexpired portion of the term of the
vacant seat.
(d) In case of suspension of the Sangguniang Kabataan chairman, the
successor, as determined in subsections (a) and(b) of this section
shall assume the position during the period of such suspension.

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CHAPTER 9 - PEDERASYON NG MGA SANGGUNIANG KABATAAN
SECTION. 436. Pederasyon ng mga Sangguniang Kabataan. - (a) There shall
be an organization of all the pederasyon ng mga Sangguniang Kabataan
to be known as follows:
(1) in municipalities, pambayang pederasyon ng mga
(2) in cities, panlungsod na pederasyon ng mga Sangguniang
Kabataan;
(3) in provinces, panlalawigang pederasyon ng mga
(4) in special metropolitan political subdivisions,
ng mga Sangguniang
pederasyon
pangmetropolitang
Kabataan; and
(5) on the national level, pambansang pederasyon ng mga
Sangguniang Kabataan.
(b) The pederasyon ng mga Sangguniang Kabataan shall, at all levels,
elect from among themselves the president, vice-president and
such other officers as may be necessary and shall be organized in
the following manner:
a. The panlungsod and pambayang pederasyon shall be
composed of the Sangguniang Kabataan chairmen of
Barangays in the city or municipality, respectively;
b. The panlalawigang pederasyon shall be composed of
presidents of the panlungsod and pambayang pederasyon;
c. The pangmetropolitang pederasyon shall be composed of
presidents of the panlungsod and pambayang pederasyon;
(c) The elected presidents of the pederasyon at the provincial, highly
urbanized city, and metropolitan political subdivision levels shall
constitute the pambansang katipunan ng mga Sangguniang
Kabataan.
SECTION. 437. Constitution and By-Laws. - The term of office, manner of
election, removal and suspension of the officers of the pederasyon ng
mga Sangguniang Kabataan at all levels shall be governed by the

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constitution and by-laws of the pederasyon in conformity with the
provisions of this Code and national policies on youth.
SECTION. 438. Membership in the Sanggunian. - (a) A Sangguniang
Kabataan chairman shall, upon certification of his election by the Comelec
and during his tenure of office is elected as pederasyon president, serve
as an ex-officio member of the Sanggunian Panlalawigan, Sangguniang
Panlungsod, and Sangguniang Bayan, as the case may be, without need
of further appointment.
(b) The vice-president of the pederasyon whose president has been
elected as president of a higher pederasyon shall serve as ex-
officio member of the sanggunian concerned without need of further
appointment.
(c) The pederasyon president or vice-president, as the case may be,
shall be the chairman of the committee on youth and sports
development of the sanggunian concerned.
CHAPTER 10 - LINGGO NG KABATAAN
SECTION. 439. Observance of Linggo ng Kabataan. - (a) Every Barangay,
municipality, city and province shall, in coordination with the pederasyon
ng mga Sangguniang Kabataan at all levels, conduct an annual activity to
be known as the Linggo ng Kabataan on such date as shall be determined
by the Office of the President.
(b) The observance of the Linggo ng Kabataan shall include the
election of the counterparts of all local elective and appointive
officials, as well as heads of national offices or agencies stationed
or assigned in the territorial jurisdiction of the local government unit,
among in-school and community youth residing in the local
government unit concerned from ages thirteen (13) to seventeen
(17). During said week, they shall hold office as boy and girl
officials and shall perform such duties and conduct such activities
as may be provided in the ordinance enacted pursuant to this
Chapter.

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TITLE TWO. - THE MUNICIPALITY
CHAPTER 1 - ROLE AND CREATION OF THE MUNICIPALITY
SECTION. 440. Role of the Municipality. - The municipality, consisting of a
group of Barangays, serves primarily as a general purpose government for
the coordination and delivery of basic, regular and direct services and
effective governance of the inhabitants within its territorial jurisdiction.
SECTION. 441. Manner of Creation. - A municipality may be created, divided,
merged, abolished, or its boundary substantially altered only by an Act of
Congress and subject to the approval by a majority of the votes cast in a
plebiscite to be conducted by the Comelec in the local government unit or
units directly affected. Except as may otherwise be provided in the said
Act, the plebiscite shall be held within one hundred twenty (120) days from
the date of its effectivity.
SECTION. 442. Requisites for Creation. - (a) A municipality may be created if it
has an average annual income, as certified by the provincial treasurer, of
at least Two million five hundred thousand pesos (P=2,500,000.00) for the
last two (2) consecutive years based on the 1991 constant prices; a
population of at least twenty-five thousand (25,000) inhabitants as certified
by the National Statistics Office; and a contiguous territory of at least fifty
(50) square kilometers as certified by the Lands Management Bureau:
Provided, That the creation thereof shall not reduce the land area,
population or income of the original municipality or municipalities at the
time of said creation to less than the minimum requirements prescribed
herein.
(b) The territorial jurisdiction of a newly-created municipality shall be
properly identified by metes and bounds. The requirement on land
area shall not apply where the municipality 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 of the municipality concerned, exclusive of special
funds, transfers and non-recurring income.
(d) Municipalities existing as of the date of the effectivity of this Code
shall continue to exist and operate as such. Existing municipal
districts organized pursuant to presidential issuances or executive
orders and which have their respective set of elective municipal
officials holding office at the time of the effectivity of this Code shall
henceforth be considered as regular municipalities.

184
CHAPTER 2 - MUNICIPAL OFFICIALS IN GENERAL
SECTION. 443. Officials of the Municipal Government. - (a) There shall be in
each municipality a municipal mayor, a municipal vice-mayor,
Sangguniang Bayan members, a secretary to the Sangguniang Bayan, a
municipal treasurer, a municipal assessor, a municipal accountant, a
municipal budget officer, a municipal planning and development
coordinator, a municipal engineer/building official, a municipal health
officer and a municipal civil registrar.
(b) In addition thereto, the mayor may appoint a municipal
administrator, a municipal legal officer, a municipal agriculturist, a
municipal environment and natural resources officer, a municipal
social welfare and development officer, a municipal architect, and a
municipal information officer.
(c) The Sangguniang Bayan may:
(1) Maintain existing offices not mentioned in subsections (a)
and (b) hereof;
(2) Create such other offices as may be necessary to carry out
the purposes of the municipal government; or
(3) Consolidate the functions of any office with those of another
in the interest of efficiency and economy.
(d) Unless otherwise provided herein, heads of departments and
offices shall be appointed by the municipal mayor with the
concurrence of the majority of all the Sangguniang Bayan
members, subject to civil service law, rules and regulations. The
Sangguniang Bayan shall act on the appointment within fifteen (15)
days from the date of its submission; otherwise, the same shall be
deemed confirmed.
(e) Elective and appointive municipal officials shall receive such
compensation, allowances and other emoluments as may be
determined by law or ordinance, subject to the budgetary limitations
on personal services as prescribed in Title Five, Book Two of this
Code: Provided, That no increase in compensation of the mayor,
vice-mayor, and Sangguniang Bayan members shall take effect
until after the expiration of the full term of all the elective local
officials approving such increase.

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CHAPTER 3 - OFFICIALS AND OFFICES COMMON TO ALL
MUNICIPALITIES
Article One. - The Municipal Mayor
SECTION. 444. The Chief Executive: Powers, Duties, Functions and
Compensation. - (a) The municipal mayor, as the chief executive of the
municipal government, shall exercise such powers and perform such
duties and functions as provided by this Code and other laws.
(b) For efficient, effective and economical governance the purpose of
which is the general welfare of the municipality and its inhabitants
pursuant to section 16 of this Code, the municipal mayor shall:
(1) Exercise general supervision and control over all programs,
projects, services, and activities of the municipal
government, and in this connection, shall:
(i) Determine the guidelines of municipal policies and be
responsible to the Sangguniang Bayan for the
program of government;
Direct the formulation of the municipal development
(ii)
plan, with the assistance of the municipal
development council, and upon approval thereof by
the Sangguniang Bayan, implement the same;
(iii)
(iv)
At the opening of the regular session of the
Sangguniang Bayan for every calendar year and, as
may be deemed necessary, present the program of
government and propose policies and projects for the
consideration of the Sangguniang Bayan as the
general welfare of the inhabitants and the needs of
the municipal government may require;
Initiate and propose legislative measures to the
Sangguniang Bayan and, from time to time as the
require, provide such information and data needed or
requested by said sanggunian in the performance of
its legislative functions; Appoint all officials and
employees whose salaries and wages are wholly or
mainly paid out of municipal funds and whose
appointments are not otherwise provided for in this
Code, as well as those he may be authorized by law
to appoint; situation may
(v) Appoint all officials and employees whose salaries
and wages are wholly or mainly paid out of municipal
funds and whose appointments are not otherwise

186
provided for in this Code, as well as those he may
authorized by law to appoint;
Upon authorization by the Sangguniang Bayan,
(vi)
represent the municipality in all its business
transactions and sign on its behalf all bonds,
(vii)
(viii)
(ix)
(xi)
(xii)
(xiii)
contracts, and obligations, and such other documents
made pursuant to law or ordinance;
Carry out such emergency measures as may be
necessary during and in the aftermath of man-made
and natural disasters and calamities;
Determine, according to law or ordinance, the time,
manner and place of payment of salaries or wages of
the officials and employees of the municipality;
Allocate and assign office space to municipal and
other officials and employees who, by law or
ordinance, are entitled to such space in the municipal
hall and other buildings owned or leased by the
municipal government;
(x) Ensure that all executive officials and employees of
the municipality faithfully discharge their duties and
functions as provided by law and this Code, and
cause to be instituted administrative or judicial
proceedings against any official or employee of the
municipality who may have committed an offense in
the performance of his official duties;
Examine the books, records and other documents of
all offices, officials, agents or employees of the
municipality and in aid of his executive powers and
authority, require all national officials and employees
stationed in or assigned to the municipality to make
available to him such books, records, and other
documents in their custody, except those classified by
law as confidential;
Furnish copies of executive orders issued by him to
the provincial governor within seventy-two (72) hours
after their issuance: Provided, That municipalities of
Metropolitan Manila Area and that of any metropolitan
political subdivision shall furnish copies of said
executive orders to the metropolitan authority council
chairman and to the Office of the President;
Visit component Barangays of the municipality at least
once every six (6) months to deepen his
understanding of problems and conditions therein,
listen and give appropriate counsel to local officials
and inhabitants, inform the component Barangay
officials and inhabitants of general laws and

187
ordinances which especially concern them, and
otherwise conduct visits and inspections to the end
that the governance of the municipality will improve
the quality of life of the inhabitants;
Act on leave applications of officials and employees
appointed by him and the commutation of the
monetary value of leave credits according to law;
Authorize official trips outside of the municipality of
municipal officials and employees for a period not
exceeding thirty (30) days;
Call upon any national official or employee stationed
in or assigned to the municipality to advise him on
matters affecting the municipality and to make
recommendations thereon, or to coordinate in the
formulation and implementation of plans, programs
and projects, and when appropriate, initiate an
administrative or judicial action against a national
government official or employee who may have
committed an offense in the performance of his official
duties while stationed in or assigned to the local
(xiv)
(xv)
(xvi)
(xvii) Subject to availability of funds, authorize payment of
medical care, necessary transportation, subsistence,
hospital or medical fees of municipal officials and
employees who are injured while in the performance
of their official duties and functions;
(xviii) Solemnize marriages, any provision of
law to the contrary notwithstanding;
Conduct a palarong bayan, in coordination with the
Department of Education, Culture and Sports, as an
annual activity which shall feature traditional sports
and disciplines included in national and international
games; and
Submit to the provincial governor the following
reports: an annual report containing a summary of all
matters pertaining to the management, administration
(xix)
(xx)
and development of the municipality and all
information and data relative to its political, social and
economic conditions; and supplemental reports when
unexpected events and situations arise at any time
during the year, particularly when man-made or
natural disasters or calamities affect the general
welfare of the municipality, province, region or
country. Mayors of municipalities of the Metropolitan
Manila Area and other metropolitan political
subdivisions shall submit said reports to their

188
respective metropolitan council chairmen and to the
Office of the President;
(2) Enforce all laws and ordinances relative to the governance
of the municipality and the exercise of its corporate powers
provided for under Section 22 of this Code, implement all
approved policies, programs, projects, services and activities
of the municipality and, in addition to the foregoing, shall:
(i)
(ii)
(iii)
(iv)
(vi)
Ensure that the acts of the municipality's component
Barangays and of its officials and employees are
within the scope of their prescribed powers,functions,
duties and responsibilities;
Call conventions, conferences, seminars or meetings
of any elective and appointive officials of the
municipality, including provincial officials and national
officials and employees stationed in or assigned to
the municipality at such time and place and on such
subject as he may deem important for the promotion
of the general welfare of the local government unit
and its inhabitants;
Issue such executive orders as are necessary for the
proper enforcement and execution of laws and
ordinances;
Be entitled to carry the necessary firearm within his
territorial jurisdiction;
(v) Act as the deputized representative of the National
Police Commission, formulate the peace and order
plan of the municipality and upon its approval,
implement the same and exercise general and
operational control and supervision over the local
police forces in the municipality in accordance with
R.A. No. 6975;
Call upon the appropriate law enforcement agencies
to suppress disorder, riot, lawless violence, sedition or
to apprehend violators of the law when public interest
so requires and the municipal police forces are
inadequate to cope with the situation or the violators;
rebellion or
(3) Initiate and maximize the generation of resources and
revenues, and apply the same to the implementation of
development plans, program objectives and priorities as
provided for under Section 18 of this Code,particularly those
resources and revenues programmed for agro-industrial

189
development and country-wide growth and progress, and
relative thereto, shall:
(i)
(ii)
(iii)
(iv)
Require each head of an office or department to
prepare and submit an estimate of appropriations for
the ensuing calendar year, in accordance with the
budget preparation process under Title Five, Book II
of this Code;
Prepare and submit to the sanggunian for approval
the executive and supplemental budgets of the
municipality for the ensuing calendar year in the
manner provided for under Title Five, Book II of this
Code;
Ensure that all taxes and other revenues of the
municipality are collected, and that municipal funds
are applied in accordance with law or ordinance to the
payment of expenses and settlement of obligations of
the municipality;
Issue licenses and permits and suspend or revoke the
same for any violation of the conditions upon which
said licenses or permits had been issued, pursuant to
law or ordinance;
(v) Issue permits, without need of approval therefor from
any national agency, for the holding of activities for
any charitable or welfare purpose, excluding
prohibited games of chance or shows contrary to law,
public policy and public morals;
(vi) Require owners of illegally constructed houses,
buildings or other structures to obtain the necessary
permit, subject to such fines and penalties as may be
imposed by law or ordinance, or to make necessary
changes in the construction of the same when said
construction violates any law or ordinance, or to order
the demolition or removal of said house, building or
structure within the period prescribed by law or
ordinance;
Adopt adequate measures to safeguard and conserve
land, mineral, marine, forest, and other resources of
(vii)
the municipality; provide efficient and effective
property and supply management in the municipality;
and protect the funds, credits, rights and other
properties of the municipality; and
Institute or cause to be instituted administrative or
(viii)
judicial proceedings for violation of ordinances in the
collection of taxes, fees or charges, and for the
recovery of funds and property; and cause the

190
municipality to be defended against all suits to ensure
that its interests, resources and rights shall be
adequately protected;
(4) Ensure the delivery of basic services and the provision of
adequate facilities as provided for under Section 17 of this
Code and, in addition thereto, shall:
(i) Ensure that the construction and repair of roads and
highways funded by the national government shall be,
as far as practicable, carried out in a spatially
contiguous manner and in coordination with the
construction and repair of the roads and bridges of
the municipality and the province; and
Coordinate the implementation of technical services
rendered by national and provincial offices, including
public works and infrastructure programs in the
municipality; and
(ii)
(5) Exercise such other powers and perform such other duties
c) During his incumbency, the municipal mayor shall hold office in the
municipal hall.
(d) The municipal mayor shall receive a minimum monthly
compensation corresponding to Salary Grade twenty-seven (27) as
prescribed under R.A. No. 6758 and the implementing guidelines
issued pursuant thereto.
Article Two. - The Vice Mayor
SECTION. 445. Powers, Duties and Compensation.- (a) The vice-mayor shall:
(1) Be the presiding officer of the Sangguniang Bayan and sign
all warrants drawn on the municipal treasury for all
expenditures appropriated for the operation of the
Sangguniang Bayan;
(2) Subject to civil service law, rules and regulations, appoint all
officials and employees of the Sangguniang Bayan, except
those whose manner of appointment is specifically provided
in this Code;
(3) Assume the office of the municipal mayor for the unexpired
term of the latter in the event of permanent vacancy as
provided for in section 44, Book I of this Code;

191
(4) Exercise the powers and perform the duties and functions of
the municipal mayor in cases of temporary vacancy as
provided for in section 46, Book I of this Code; and,
(b) The vice-mayor shall receive a monthly compensation
corresponding to Salary Grade twenty five (25) as prescribed under
R.A. No. 6758 and the implementing guidelines issued pursuant
thereto.
Article Three. - The Sangguniang Bayan
SECTION. 446. Composition. - (a) The Sangguniang Bayan, the legislative
body of the municipality, shall be composed of the municipal vice-mayor
as the presiding officer, the regular sanggunian members, the president of
the municipal chapter of the liga ng mga Barangay, the president of the
pambayang pederasyon ng mga Sangguniang Kabataan, and the sectoral
representatives, as members.
(b) In addition thereto, there shall be three (3) sectoral representatives:
one (1) from the women; and, as shall be determined by the
sanggunian concerned within ninety (90) days prior to the holding
of local elections, one (1) from the agricultural or industrial workers;
and one (1) from the other sectors, including the urban poor,
indigenous cultural communities, or disabled persons.
(c) The regular members of the Sangguniang Bayan and the sectoral
representatives shall be elected in the manner as may be provided
for by law.
SECTION. 447. - Powers, Duties, Functions and Compensation. - (a) The
Sangguniang Bayan, as the legislative body of the municipality, shall
enact ordinances, approve resolutions and appropriate funds for the
general welfare of the municipality and its inhabitants pursuant to section
16 of this Code and in the proper exercise of the corporate powers of the
municipality as provided for under section 22 of this Code, and shall:
(1) Approve ordinances and pass resolutions necessary for an
efficient and effective municipal government, and in this
connection shall:
(i) Review all ordinances approved by the Sangguniang
Barangay and executive orders issued by the Punong

192
(ii)
(iii)
(iv)
Barangay to determine whether these are within the
scope of the prescribed powers of the sanggunian
and of the Punong Barangay;
Maintain peace and order by enacting measures to
prevent and suppress lawlessness, disorder, riot,
violence, rebellion or sedition and impose penalties
for the violation of said ordinances;
Approve ordinances imposing a fine not exceeding
Two thousand five hundred pesos (P=2,500.00) or an
imprisonment for a period not exceeding six (6)
months, or both in the discretion of the court, for the
violation of a municipal ordinance;
Adopt measures to protect the inhabitants of the
municipality from the harmful effects of man-made or
natural disasters and calamities and to provide relief
services and assistance for victims during and in the
aftermath of said disasters or calamities and their
return to productive livelihood following said events;
(v) Enact ordinances intended to prevent, suppress and
impose appropriate penalties for habitual
drunkenness in public places, vagrancy, mendicancy,
prostitution, establishment and maintenance of
houses of ill repute, gambling and other prohibited
games of chance, fraudulent devices and ways to
obtain money or property, drug addiction,
maintenance of drug dens, drug pushing, juvenile
delinquency, the printing, distribution or exhibition of
obscene or pornographic materials or publications,
and such other activities inimical to the welfare and
morals of the inhabitants of the municipality;
Protect the environment and impose appropriate
penalties for acts which endanger the environment,
such as dynamite fishing and other forms of
destructive fishing, illegal logging and smuggling of
logs, smuggling of natural resources products and of
endangered species of flora and fauna, slash and
burn farming, and such other activities which result in
pollution, acceleration of eutrophication of rivers and
lakes, or of ecological imbalance;
Subject to the provisions of this Code and pertinent
laws, determine the powers and duties of officials and
employees of the municipality;
Determine the positions and the salaries, wages,
allowances and other emoluments and benefits of
officials and employees paid wholly or mainly from
(vi)
(vii)
(viii)
municipal funds and provide for expenditures

193
(ix)
(xi)
necessary for the proper conduct of programs,
projects, services, and activities of the municipal
government;
Authorize the payment of compensation to a qualified
person not in the government service who fills up a
temporary vacancy or grant honorarium to any
qualified official or employee designated to fill a
temporary vacancy in a concurrent capacity, at the
rate authorized by law;
(x) Provide a mechanism and the appropriate funds
therefor, to ensure the safety and protection of all
municipal government property, public documents, or
records such as those relating to property inventory,
land ownership, records of births, marriages, deaths,
assessments, taxation, accounts, business permits,
and such other records and documents of public
interest in the offices and departments of the
municipal government;
When the finances of the municipal government allow,
provide for additional allowances and other benefits to
judges, prosecutors, public elementary and high
school teachers, and other national government
officials stationed in or assigned to the municipality;
(xii) Provide for legal assistance to Barangay officials who,
in the performance of their official duties or on the
occasion thereof, have to initiate judicial proceedings
or defend themselves against legal action; and,
(xiii) Provide for group insurance or additional insurance
coverage for Barangay officials, including members of
Barangay tanod brigades and other service units, with
public or private insurance companies, when the
finances of the municipal government allow said
coverage.
(2) Generate and maximize the use of resources and revenues
for the development plans, program objectives and priorities
of the municipality as provided for under section 18 of this
Code with particular attention to agro-industrial development
and countryside growth and progress, and relative thereto,
shall:
(i) Approve the annual and supplemental budgets of the
municipal government and appropriate funds for
specific programs, projects, services and activities of

194
the municipality, or for other purposes not contrary to
law, in order to promote the general welfare of the
municipality and its inhabitants;
Subject to the provisions of Book II of this Code and
applicable laws and upon the majority vote of all the
(ii)
members of the Sangguniang Bayan, enact
ordinances levying taxes, fees and charges,
prescribing the rates thereof for general and specific
purposes, and granting tax exemptions, incentives or
reliefs;
upon the majority vote of all the members of the
Sangguniang Bayan, authorize the municipal mayor
to negotiate and contract loans and other forms of
indebtedness;
(iii)
(iv)
members of the Sangguniang Bayan, enact
ordinances authorizing the floating of bonds or other
instruments of indebtedness, for the purpose of
raising funds to finance development projects;
(v) Appropriate funds for the construction and
maintenance or the rental of buildings for the use of
the municipality and, upon the majority vote of all the
members of the Sangguniang Bayan, authorize the
municipal mayor to lease to private parties such
public buildings held in a proprietary capacity, subject
to existing laws, rules and regulations;
Prescribe reasonable limits and restraints on the use
of property within the jurisdiction of the municipality;
Adopt a comprehensive land use plan for the
municipality: Provided, That the formulation, adoption,
or modification of said plan shall be in coordination
with the approved provincial comprehensive land use
plan;
(vi)
(vii)
(viii) Reclassify land within the jurisdiction of the
municipality, subject to the pertinent provisions of this
Code;
Enact integrated zoning ordinances in consonance
(ix)
with the approved comprehensive land use plan,
subject to existing laws, rules and regulations;
establish fire limits or zones, particularly in populous
centers; and regulate the construction, repair or
modification of buildings within said fire limits or zones
in accordance with the provisions of the Fire Code;

195
(x) Subject to national law, process and approve
subdivision plans for residential, commercial, or
industrial purposes and other development purposes,
and collect processing fees and other charges, the
proceeds of which shall accrue entirely to the
municipality: Provided, however, That, where
approval by a national agency or office is required,
said approval shall not be withheld for more than thirty
(30) days from receipt of the application. Failure to act
on the application within the period stated above shall
be deemed as approval thereof;
Subject to the provisions of Book II of this Code, grant
the exclusive privilege of constructing fish corrals or
fish pens, or the taking or catching of bangus fry,
prawn fry or kawag-kawag or fry of any species or fish
within the municipal waters;
With the concurrence of at least two-thirds (2/3) of all
the members of the Sangguniang Bayan, grant tax
exemptions, incentives or reliefs to entities engaged
in community growth-inducing industries, subject to
the provisions of Chapter 5, Title I, Book II of this
Code;
(xi)
(xii)
(xiii) Grant loans or provide grants
government units or to national,
to other local
provincial and
municipal charitable, benevolent or educational
institutions: Provided, That said institutions are
operated and maintained within the municipality;
(xiv) Regulate the numbering of residential, commercial
and other buildings; and,
(xv) (xv) Regulate the inspection, weighing and
measuring of articles of commerce.
(3) Subject to the provisions of Book II of this Code, grant
franchises, enact ordinances authorizing the issuance of
permits or licenses, or enact ordinances levying taxes, fees
and charges upon such conditions and for such purposes
intended to promote the general welfare of the inhabitants of
the municipality, and pursuant to this legislative authority
shall:
(i) Fix and impose reasonable fees and charges for all
services rendered by the municipal government to
private persons or entities;
Regulate any business, occupation, or practice of
(ii)
profession or calling which does not require
government examination within the municipality and

196
(iii)
(iv)
the conditions under which the license for said
business or practice of profession may be issued or
revoked;
Prescribe the terms and conditions under which public
utilities owned by the municipality shall be operated
by the municipal government or leased to private
persons or entities, preferably cooperatives;
Regulate the display of and fix the license fees for
signs, signboards, or billboards at the place or places
where the profession or business advertised thereby
is, in whole or in part, conducted;
(v) Any law to the contrary notwithstanding, authorize
and license the establishment, operation, and
maintenance of cockpits, and regulate cockfighting
and commercial breeding of gamecocks: Provided,
That existing rights should not be prejudiced;
(vi) Subject to the guidelines prescribed by the
Department of Transportation and Communications,
regulate the operation of tricycles and grant
franchises for the operation thereof within the
territorial jurisdiction of the municipality;
(vii) Upon approval by a majority vote of all the members
of the Sangguniang Bayan, grant a franchise to any
person, partnership, corporation, or cooperative to
establish, construct, operate and maintain ferries,
wharves, markets or slaughterhouses, or such other
similar activities within the municipality as may be
allowed by applicable laws: Provided, That,
cooperatives shall be given preference in the grant of
such a franchise.
(4) Regulate activities relative to the use of land, buildings and
structures within the municipality in order to promote the
general welfare and for said purpose shall:
(i) Declare, prevent or abate any nuisance;
(ii) Require that buildings and the premises thereof and
any land within the municipality be kept and
maintained in a sanitary condition; impose penalties
for any violation thereof, or upon failure to comply with
said requirement, have the work done and require the
owner, administrator or tenant concerned to pay the
expenses of the same; or require the filling up of any
land or premises to a grade necessary for proper
sanitation;

197
(iii) Regulate the disposal of clinical and other wastes
from hospitals, clinics and other similar
establishments;
(iv) Regulate the establishment, operation and
maintenance of cafes, restaurants, beerhouses,
hotels, motels, inns, pension houses, lodging houses,
and other similar establishments, including tourist
guides and transports;
(v) Regulate the sale, giving away or dispensing of any
intoxicating malt, vino, mixed or fermented liquors at
any retail outlet;
(vi) Regulate the establishment and provide for the
inspection of steam boilers or any heating device in
buildings and the storage of inflammable and highly
combustible materials within the municipality;
(vii) Regulate the
maintenance
establishment, operation, and
of entertainment or amusement
facilities, including theatrical performances, circuses,
billiard pools, public dancing schools, public dance
halls, sauna baths, massage parlors, and other places
of entertainment or amusement; regulate such other
events or activities for amusement or entertainment,
particularly those which tend to disturb the community
or annoy the inhabitants, or require the suspension or
suppression of the same; or, prohibit certain forms of
amusement or entertainment in order to protect the
social and moral welfare of the community;
(viii) Provide for the impounding of stray animals; regulate
the keeping of animals in homes or as part of a
business, and the slaughter, sale or disposition of the
same; and adopt measures to prevent and penalize
cruelty to animals; and
(ix) Regulate the establishment, operation, and
maintenance of funeral parlors and the burial or
cremation of the dead, subject to existing laws, rules
and regulations.
(5) Approve ordinances which shall ensure the efficient and
effective delivery of the basic services and facilities as

198
provided for under Section 17 of this Code, and in addition to
said services and facilities, shall:
(i) Provide for the establishment, maintenance,
protection, and conservation of communal forests and
water sheds, tree parks, greenbelts, mangroves, and
other similar forest development projects;
Establish markets, slaughterhouses or animal corrals
and authorize the operation thereof, and regulate the
(ii)
construction and operation of private markets,
talipapas or other similar buildings and structures;
(iii) Authorize the establishment, maintenance and
operation of ferries, wharves, and other structures,
and marine and seashore or offshore activities
intended to accelerate productivity;
(iv)
(vi)
Regulate the preparation and sale of meat, poultry,
fish, vegetables, fruits, fresh dairy products, and other
foodstuffs for public consumption;
(v) Regulate the use of streets, avenues, alleys,
sidewalks, bridges, parks and other public places and
approve the construction, improvement, repair and
maintenance of the same; establish bus and vehicle
stops and terminals or regulate the use of the same
by privately-owned vehicles which serve the public;
regulate garages and the operation of conveyances
for hire; designate stands to be occupied by public
vehicles when not in use; regulate the putting up of
signs, signposts, awnings and awning posts on the
streets; and provide for the lighting, cleaning and
sprinkling of streets and public places;
Regulate traffic on all streets and bridges, prohibit the
putting up of encroachments or obstacles thereon,
and, when necessary in the interest of public welfare,
authorize the removal of encroachments and illegal
constructions in public places;
(vii) Subject to existing laws, provide for the
establishment, operation, maintenance, and repair of
an efficient waterworks system to supply water for the
inhabitants; regulate the construction, maintenance,
repair and use of hydrants, pumps, cisterns and
reservoirs; protect the purity and quantity of the water
supply of the municipality and, for this purpose,
extend the coverage of appropriate ordinances over
all territory within the drainage area of said water
supply and within one hundred (100) meters of the
reservoir, conduit, canal, aqueduct, pumping station,

199
or watershed used in connection with the water
service; and regulate the consumption, use or
wastage of water;
Regulate the drilling and excavation of the ground for
the laying of water, gas, sewer, and other pipes and
the construction, repair and maintenance of public
(viii)
drains, sewers, cesspools, tunnels and similar
structures; regulate the placing of poles and the use
(ix)
(xi)
(xii)
(xiii)
(xiv)
of crosswalks, curbs, and gutters; adopt measures to
ensure public safety against open canals, manholes,
live wires and other similar hazards to life and
property; and, regulate the construction and use of
private water closets, privies and other similar
structures in buildings and homes;
Regulate the placing, stringing, attaching, installing,
repair and construction of all gas mains, electric,
telegraph and telephone wires, conduits, meters and
other apparatus; and, provide for the correction,
condemnation or removal of the same when found to
be dangerous, defective or otherwise hazardous to
the welfare of the inhabitants;
(x) Subject to the availability of funds and to existing
laws, rules and regulations, establish and provide for
the operation of vocational and technical schools and
similar post-secondary institutions and, with the
approval of the Department of Education, Culture and
Sports, fix and collect reasonable fees and other
school charges on said institutions, subject to existing
laws on tuition fees;
Establish a scholarship fund for poor but deserving
students residing within the municipality in schools
located within its jurisdiction;
Approve measures and adopt quarantine regulations
to prevent the introduction and spread of diseases;
Provide for an efficient and effective system of solid
waste and garbage collection and disposal and
prohibit littering and the placing or throwing of
garbage, refuse and other filth and wastes;
Provide for the care of paupers, the aged, the sick,
persons of unsound mind, disabled persons,
abandoned minors, juvenile delinquents, drug
dependents, abused children and other needy and
disadvantaged persons, particularly children and
youth below eighteen (18) years of age and, subject
to availability of funds, establish and provide for the

200
operation of centers and facilities for said needy and
disadvantaged persons;
Establish and provide for the maintenance and
improvement of jails and detention centers, institute
sound jail management programs, and appropriate
funds for the subsistence of detainees and convicted
prisoners in the municipality;
Establish a municipal council whose purpose is the
promotion of culture and the arts, coordinate with
(xv)
(xvi)
government agencies and non-governmental
organizations and, subject to the availability of funds,
appropriate funds for the support and development of
the same; and
Establish a municipal council for the elderly which
shall formulate policies and adopt measures mutually
beneficial to the elderly and to the community; provide
incentives for non-governmental agencies and entities
and, subject to the availability of funds, appropriate
funds to support programs and projects for the benefit
of the elderly; and
(xvii)
(b) The members of the Sangguniang Bayan shall receive a minimum
monthly compensation corresponding to Salary Grade twenty-four
(24) as prescribed under R.A. 6758 and the implementing
guidelines issued pursuant thereto: Provided, That, in municipalities
in the Metropolitan Manila Area and other metropolitan political
subdivisions, members of the Sangguniang Bayan shall receive a
minimum monthly compensation corresponding to Salary grade
twenty-five (25).

201
TITLE THREE. - THE CITY
CHAPTER 1 - ROLE AND CREATION OF THE CITY
SECTION. 448. Role of the City. - The city, consisting of more urbanized and
developed Barangays, serves as a general-purpose government for the
coordination and delivery of basic, regular, and direct services and
effective governance of the inhabitants within its territorial jurisdiction.
SECTION. 449. Manner of Creation. - A city may be created, divided, merged,
abolished, or its boundary substantially altered, only by an Act of
Congress, and subject to approval by a majority of the votes cast in a
units directly affected. Except as may otherwise be provided in such Act,
the plebiscite shall be held within one hundred twenty (120) days from the
date of its effectivity.
SECTION. 450. Requisites for Creation. - (a) A municipality or a cluster of
Barangays may be converted into a component city if it has an average
annual income, as certified by the Department of Finance, of at least
Twenty million pesos (Php20,000,000.00) for the last two (2) consecutive
years based on 1991 constant prices, and if it has either of the following
requisites:
(i) a 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 Office: 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.
(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.
the general fund, exclusive of special funds, transfers, and non-
recurring income.

202
SECTION. 451. Cities, Classified. - A city may either be component or highly
urbanized: Provided, however, That the criteria established in this Code
shall not affect the classification and corporate status of existing cities.
Independent component cities are those component cities whose charters
prohibit their voters from voting for provincial elective officials.
Independent component cities shall be independent of the province.
SECTION. 452. Highly Urbanized Cities. - (a) Cities with a minimum population
of two hundred thousand (200,000) inhabitants, as certified by the
National Statistics Office, and with the latest annual income of at least
Fifty Million Pesos(Php50,000,000.00) based on 1991 constant prices, as
certified by the city treasurer, shall be classified as highly urbanized cities.
(b) Cities which do not meet the above requirements shall be
considered component cities of the province in which they are
geographically located. If a component city is located within the
boundaries of two (2) or more provinces, such city shall be
considered a component of the province of which it used to be a
municipality.
(c) Qualified voters of highly urbanized cities shall remain excluded
from voting for elective provincial officials.
Unless otherwise provided in the Constitution or this Code, qualified
voters of independent component cities shall be governed by their
respective charters, as amended, on the participation of voters in
provincial elections.
Qualified voters of cities who acquired the right to vote for elective
provincial officials prior to the classification of said cities as highly-
urbanized after the ratification of the Constitution and before the
effectivity of this Code, shall continue to exercise such right.
SECTION. 453. Duty to Declare Highly Urbanized Status. - It shall be the duty
of the President to declare a city as highly urbanized within thirty (30) days
after it shall have met the minimum requirements prescribed in the
immediately preceding section, upon proper application therefor and
ratification in a plebiscite by the qualified voters therein.
CHAPTER 2 - CITY OFFICIALS IN GENERAL
SECTION. 454. Officials of the City Government. - (a) There shall be in each
city a mayor, a vice-mayor, Sangguniang Panlungsod members, a
secretary to the Sangguniang Panlungsod, a city treasurer, a city
assessor, a city accountant, a city budget officer, a city planning and
development coordinator, a city engineer, a city health officer, a city civil

203
registrar, a city administrator, a city legal officer, a city veterinarian, a city
social welfare and development officer, and a city general services officer.
(b) In addition thereto, the city mayor may appoint a city architect, a
city information officer, a city agriculturist, a city population officer, a
city environment and natural resources officer, and a city
cooperatives officer.
The appointment of a city population officer shall be optional in the
city: Provided, however, That cities which have existing population
offices shall continue to maintain such offices for a period of five (5)
years from the date of the effectivity of this Code, after which said
offices shall become optional.
(c) The Sangguniang Panlungsod may:
and (b) hereof;
the purposes of the city government; or
in the interest of efficiency and economy.
offices shall be appointed by the city mayor with the concurrence of
the majority of all the Sangguniang Panlungsod members, subject
to civil service law, rules and regulations. The Sangguniang
Panlungsod shall act on the appointment within fifteen (15) days
from the date of its submission, otherwise the same shall be
deemed confirmed.
(e) Elective and appointive city officials shall receive such
compensation, allowances, and other emoluments as may be
on personal services prescribed under Title Five, Book II of this
Code: Provided, That, no increase in compensation of the mayor,
vice-mayor and Sangguniang Panlungsod members shall take
effect until after the expiration of the full term of the said local
officials approving such increase.

204
CHAPTER 3 - OFFICIALS AND OFFICES COMMON TO ALL CITIES
Article One. - The City Mayor
SECTION. 455. Chief Executive; Powers, Duties and Compensation. -(a) The
city mayor, as chief executive of the city government, shall exercise such
powers and perform such duties and functions as provided by this Code
and other laws.
which is the general welfare of the city and its inhabitants pursuant
to Section 16 of this Code, the city mayor shall:
projects, services, and activities of the city government, and
in this connection, shall:
(i)
(ii)
(iii)
(iv)
(vi)
Determine the guidelines of city policies and be
responsible to the Sangguniang Panlungsod for the
Direct the formulation of the city development plan,
with the assistance of the city development council,
and upon approval thereof by the Sangguniang
Panlungsod, implement the same;
Present the program of government and propose
policies and projects for the consideration of the
Sangguniang Panlungsod at the opening of the
regular session of the Sangguniang Panlungsod
every calendar year and as often as may be deemed
necessary as the general welfare of the inhabitants
and the needs of the city government may require;
Sangguniang Panlungsod and as often as may be
deemed necessary, provide such information and
data needed or requested by said sanggunian in the
performance of its legislative functions;
and wages are wholly or mainly paid out of city funds
and whose appointments are not otherwise provided
for in this Code, as well as those he may be
Represent the city in all its business transactions and
sign in its behalf all bonds, contracts, and obligations,
and such other documents upon authority of the

205
(vii)
(viii)
(ix)
Sangguniang Panlungsod or pursuant to law or
ordinance;
Determine the time, manner and place of payment of
salaries or wages of the officials and employees of
the city, in accordance with law or ordinance;
Allocate and assign office space to city and other
officials and employees who, by law or ordinance, are
entitled to such space in the city hall and other
buildings owned or leased by the city government;
the city faithfully discharge their duties and functions
as provided by law and this Code, and cause to be
instituted administrative or judicial proceedings
against any official or employee of the city who may
have committed an offense in the performance of his
official duties;
(xi) Examine the books, records and other documents of
all offices, officials, agents or employees of the city
and, in aid of his executive powers and authority,
require all national officials and employees stationed
in or assigned to the city to make available to him
such books, records, and other documents in their
custody, except those classified by law as
confidential;
(xii) Furnish copies of executive orders issued by him, to
the provincial governor in the case of component city
mayors, to the Office of the President in the case of
highly-urbanized city mayors, and to their respective
metropolitan council chairmen in the case of mayors
of cities in the Metropolitan Manila Area and other
metropolitan political subdivisions, within seventy-two
(72) hours after their issuance;
Visit component Barangays of the city at least once
every six (6) months to deepen his understanding of
problems and conditions, listen and give appropriate
counsel to local officials and inhabitants, inform the
component Barangay officials and inhabitants of
general laws and ordinances which especially
concern them, and otherwise conduct visits and
inspections to ensure that the governance of the city
will improve the quality of life of the inhabitants;
(xiii)
(xiv)

206
monetary value of their leave credits in accordance
with law;
Authorize official trips of city officials and employees
outside of the city for a period not exceeding thirty
(30) days;
in or assigned to the city to advise him on matters
affecting the city and to make recommendations
thereon; coordinate with said official or employee in
(xv)
(xvi)
the formulation and implementation of plans,
programs and projects; and, when appropriate, initiate
an administrative or judicial action against a national
government official or employee who may have
committed an offense in the performance of his official
duties while stationed in or assigned to the city;
(xvii) Authorize payment for medical care, necessary
transportation, subsistence, hospital or medical fees
of city officials and employees who are injured while
in the performance of their official duties and
functions, subject to availability of funds;
Solemnize marriage, any provision of law to the
contrary notwithstanding;
Conduct an annual palarong panlungsod, which shall
feature traditional sports and disciplines included in
national and international games, in coordination with
the Department of Education, Culture and Sports;
and,
Submit to the provincial governor, in the case of
component cities; to the Office of the President, in the
case of highly-urbanized cities; to their respective
metropolitan authority council chairmen and to the
Office of the President, in the case of cities of the
Metropolitan Manila Area and other metropolitan
political subdivisions, the following reports: an annual
report containing a summary of all matters pertinent to
the management, administration and development of
the city and all information and data relative to its
(xviii)
(xix)
(xx)
political, social and economic conditions; and
supplemental reports when unexpected events and
situations arise at any time during the year,
particularly when man-made or natural disasters or
calamities affect the general welfare of the city,
province, region or country;
of the city and in the exercise of the appropriate corporate

207
powers provided for under section 22 of this Code,
implement all approved policies, programs, projects,
services and activities of the city and, in addition to the
foregoing, shall:
(i)
(ii)
(iii)
(iv)
(vi)
Ensure that the acts of the city's component
Barangays and of its officials and employees are
within the scope of their prescribed powers, duties
and functions;
Call conventions, conferences, seminars, or meetings
of any elective and appointive officials of the city,
including provincial officials and national officials and
employees stationed in or assigned to the city, at
such time and place and on such subject as he may
deem important for the promotion of the general
welfare of the local government unit and its
inhabitants;
Issue such executive orders for the faithful and
appropriate enforcement and execution of laws and
ordinances;
(v) Act as the deputized representative of the National
Police Commission, formulate the peace and order
plan of the city and upon its approval, implement the
same; and as such exercise general and operational
control and supervision over the local police forces in
the city, in accordance with R.A. No. 6975;
Call upon the appropriate law enforcement agencies
to suppress disorder, riot, lawless violence, rebellion
or sedition, or to apprehend violators of the law when
public interest so requires and the city police forces
are inadequate to cope with the situation or the
violators;
provided for under section 18 of this Code, particularly those
development and countryside growth and progress and,
(i) Require each head of an office or department to

208
(ii)
(iii)
(iv)
budget preparations process under Title Five, Book II
of this Code;
the executive and supplemental budgets of the city for
the ensuing calendar year in the manner provided for
under Title Five, Book II of this Code;
Ensure that all taxes and other revenues of the city
are collected, and that city funds are applied to the
payment of expenses and settlement of obligations of
the city, in accordance with law or ordinance;
law or ordinance;
(v) Issue permits, without need of approval therefor from
any national agency, for the holding of activities for
any charitable or welfare purpose, excluding
prohibited games of chance or shows contrary to law,
public policy and public morals;
(vi) Require owners of illegally constructed houses,
buildings or other structures to obtain the necessary
permit, subject to such fines and penalties as may be
imposed by law or ordinance, or to make necessary
changes in the construction of the same when said
construction violates any law or ordinance, or to order
the demolition or removal of said house, building or
structure within the period prescribed by law or
ordinance;
Adopt adequate measures to safeguard and conserve
land, mineral, marine, forest, and other resources of
the city; provide efficient and effective property and
supply management in the city; and protect the funds,
credits, rights and other properties of the city; and
recovery of funds and property; and cause the city to
be defended against all suits to ensure that its
interests, resources and rights shall be adequately
protected;
(vii)
(viii)
adequate facilities as provided for under section 17 of this
Code and, in addition thereto, shall:

209
the city, and in the case of component cities, of the
city and of the province; and
Coordinate the implementation of technical services,
including public works and infrastructure programs,
rendered by national offices in the case of highly
urbanized and independent component cities, and by
national and provincial offices in the case of
component cities; and
(ii)
(c) During his incumbency, the city mayor shall hold office in the city
hall.
(d) The city mayor shall receive a minimum monthly compensation
corresponding to Salary Grade thirty (30) as prescribed under R.A.
No. 6758 and the implementing guidelines issued pursuant thereto.
Article Two. - The City Vice-Mayor
SECTION. 456. Powers, Duties and Compensation. - (a) The city vice-mayor
shall:
(1) Be the presiding officer of the Sangguniang Panlungsod and
sign all warrants drawn on the city treasury for all
Sangguniang Panlungsod;
officials and employees of the Sangguniang Panlungsod,
except those whose manner of appointment is specifically
(3) Assume the office of the city mayor for the unexpired term of
the latter in the event of permanent vacancy as provided for
in Section 44, Book I of this Code;
the city mayor in cases of temporary vacancy as provided for
in Section 46, Book I of this Code; and

210
(b) The city vice-mayor shall receive a monthly compensation
corresponding to Salary Grade twenty eight (28) for a highly
urbanized city and Salary Grade twenty six (26) for a component
city, as prescribed under R.A. No. 6758 and the implementing
guidelines issued pursuant thereto.
Article Three. - The Sangguniang Panlungsod
SECTION. 457. Composition. - (a) The Sangguniang Panlungsod, the
legislative body of the city, shall be composed of the city vice-mayor as
presiding officer, the regular sanggunian members, the president of the
city chapter of the liga ng mga Barangay, the president of the panlungsod
na pederasyon ng mga Sangguniang Kabataan, and the sectoral
(b) In addition thereto, there shall be three (3) sectoral representatives:
one (1) from the women; and, as shall be determined by the
of the local elections, one (1) from the agricultural or industrial
workers; and one (1) from the other sectors, including the urban
poor, indigenous cultural communities, or disabled persons.
(c) The regular members of the Sangguniang Panlungsod and the
sectoral representatives shall be elected in the manner as may be
provided for by law.
SECTION. 458. - Powers, Duties, Functions and Compensation. - (a) The
Sangguniang Panlungsod, as the legislative body of the city, shall enact
ordinances, approve resolutions and appropriate funds for the general
welfare of the city and its inhabitants pursuant to section 16 of this Code
and in the proper exercise of the corporate powers of the city as provided
for under section 22 of this Code, and shall:
efficient and effective city government, and in this
connection, shall:
(i) Review all ordinances approved by the Sangguniang
Barangay and executive orders issued by the Punong
Barangay to determine whether these are within the
scope of the prescribed powers of the sanggunian
and of the Punong Barangay;

211
(ii)
(iii)
(iv)
Maintain peace and order by enacting measures to
Approve ordinances imposing a fine not exceeding
Five thousand pesos (P5,000.00) or an imprisonment
for a period not exceeding one (1) year, or both in the
discretion of the court, for the violation of a city
ordinance;
Adopt measures to protect the inhabitants of the city
from the harmful effects of man-made or natural
disasters and calamities, and to provide relief services
and assistance for victims during and in the aftermath
of said disasters or calamities and their return to
productive livelihood following said events;
morals of the inhabitants of the city;
Protect the environment and impose appropriate
Subject to the provisions of this Code and pertinent
employees of the city;
Determine the positions and the salaries, wages,
city funds and provide for expenditures necessary for
the proper conduct of programs, projects, services,
and activities of the city government;
(vi)
(vii)
(viii)

212
(ix)
(xi)
(xii)
(xiii)
Authorize the payment of compensation to a qualified
temporary vacancy or grant honorarium to any
therefor, to ensure the safety and protection of all city
government property, public documents, or records
such as those relating to property inventory, land
ownership, records of births, marriages, deaths,
interest in the offices and departments of the city
government;
When the finances of the city government allow,
officials stationed in or assigned to the city;
Provide legal assistance to Barangay officials who, in
the performance of their official duties or on the
occasion thereof, have to initiate judicial proceedings
or defend themselves against legal action; and
Provide for group insurance or additional insurance
coverage for all Barangay officials, including members
of Barangay tanod brigades and other service units,
with public or private insurance companies, when the
finances of the city government allow said coverage;
of the city as provided for under section 18 of this Code, with
particular attention to agro-industrial development and city-
wide growth and progress, and relative thereto, shall:
(i) Approve the annual and supplemental budgets of the
city government and appropriate funds for specific
programs, projects, services and activities of the city,
or for other purposes not contrary to law, in order to
promote the general welfare of the city and its
inhabitants;
members of the Sangguniang Panlungsod, enact
(ii)

213
reliefs;
(iii) Subject to the provisions of Book II of this Code and
upon the majority vote of all the members of the
Sangguniang Panlungsod, authorize the city mayor to
negotiate and contract loans and other forms of
indebtedness;
members of the Sangguniang Panlungsod, enact
(iv)
(vi)
(vii)
(viii)
(ix)
the city; and, upon the majority vote of all the
members of the Sangguniang Panlungsod, authorize
the city mayor to lease to private parties such public
buildings held in a proprietary capacity, subject to
existing laws, rules and regulations;
Prescribe reasonable limits and restraints on the use
of property within the jurisdiction of the city;
Adopt a comprehensive land use plan for the city:
Provided, That in the case of component cities, the
formulation, adoption or modification of said plan shall
be in coordination with the approved provincial
comprehensive land use plan;
Reclassify land within the jurisdiction of the city,
subject to the pertinent provisions of this Code;
Enact integrated zoning ordinances in consonance
with the approved comprehensive land use plan,
subject to existing laws, rules and regulations;
establish fire limits or zones, particularly in populous
centers; and regulate the construction, repair or
modification of buildings within said fire limits or zones
in accordance with the provisions of the Fire Code;
(x) Subject to national law, process and approve
subdivision plans for residential, commercial, or
industrial purposes and other development purposes,
and to collect processing fees and other charges, the
proceeds of which shall accrue entirely to the city:
Provided, however, That where approval of a national
agency or office is required, said approval shall not be
withheld for more than thirty (30) days from receipt of

214
the application. Failure to act on the application within
the period stated above shall be deemed as approval
thereof;
Subject to the provisions of Book II of this Code, grant
the exclusive privilege of constructing fish corrals or
fish pens, or the taking or catching of bangus fry,
prawn fry or kawag-kawag, or fry of any species or
fish within the city waters;
With the concurrence of at least two-thirds (2/3) of all
the members of the Sangguniang Panlungsod, grant
tax exemptions, incentives or reliefs to entities
engaged in community growth-inducing industries,
subject to the provisions of Chapter 5, Title I, Book II
of this Code;
Grant loans or provide grants to other local
government units or to national, provincial, and city
charitable, benevolent or educational institutions:
Provided, That, said institutions are operated and
maintained within the city;
Regulate the numbering of residential, commercial
and other buildings; and,
(xi)
(xii)
(xiii)
(xiv)
(xv) Regulate the inspection, weighing and
measuring of articles of commerce.
(3) Subject to the provisions of Book II of this Code, enact
ordinances granting franchises and authorizing the issuance
of permits or licenses, upon such conditions and for such
purposes intended to promote the general welfare of the
inhabitants of the city and pursuant to this legislative
authority shall:
services rendered by the city government to private
persons or entities;
Regulate or fix license fees for any business or
practice of profession within the city and the
conditions under which the license for said business
or practice of profession may be revoked and enact
ordinances levying taxes thereon;
Provide for and set the terms and conditions under
which public utilities owned by the city shall be
operated by the city government, and prescribe the
conditions under which the same may be leased to
private persons or entities, preferably cooperatives;
Regulate the display of and fix the license fees for
signs, signboards, or billboards at the place or places
(ii)
(iii)
(iv)

215
where the profession or business advertised thereby
is, in whole or in part, conducted;
(v) Any law to the contrary notwithstanding, authorize
and license the establishment, operation, and
maintenance of cockpits, and regulate cockfighting
and commercial breeding of gamecocks: Provided,
That existing rights should not be prejudiced;
(vi) Subject to the guidelines prescribed by the
Department of Transportation and Communications,
regulate the operation of tricycles and grant
franchises for the operation thereof within the
territorial jurisdiction of the city;
(vii) Upon approval by a majority vote of all the members
of the Sangguniang Panlungsod: grant a franchise to
any person, partnership, corporation, or cooperative
to do business within the city; establish, construct,
operate and maintain ferries, wharves, markets or
slaughterhouses; or undertake such other activities
within the city as may be allowed by existing laws:
Provided, That, cooperatives shall be given
preference in the grant of such a franchise.
(4) Regulate activities relative to the use of land, buildings and
structures within the city in order to promote the general
welfare and for said purpose shall:
(i) Declare, prevent or abate any nuisance;
(ii) Require that buildings and the premises thereof and
any land within the city be kept and maintained in a
sanitary condition; impose penalties for any violation
thereof; or, upon failure to comply with said
requirement, have the work done at the expense of
the owner, administrator or tenant concerned; or
require the filling up of any land or premises to a
grade necessary for proper sanitation;
Regulate the disposal of clinical and other wastes
(iii)
from hospitals, clinics and other similar
establishments;
(iv) Regulate the establishment, operation and cafes,
restaurants, beerhouses, hotels, motels, inns, pension
houses, lodging houses, and other similar
and
establishments, including tourist guides
transports;

216
(v) Regulate the sale, giving away or dispensing of any
intoxicating malt, vino, mixed or fermented liquors at
any retail outlet;
(vi) Regulate the establishment and provide for the
inspection of steam boilers or any heating device in
buildings and the storage of inflammable and highly
combustible materials within the city;
(vii) Regulate the establishment, operation, and
maintenance of any entertainment or amusement
facilities, including theatrical performances, circuses,
billiard pools, public dancing schools, public dance
halls, sauna baths, massage parlors, and other places
for entertainment or amusement; regulate such other
events or activities for amusement or entertainment,
particularly those which tend to disturb the community
or annoy the inhabitants, or require the suspension or
suppression of the same; or, prohibit certain forms of
amusement or entertainment in order to protect the
social and moral welfare of the community;
Provide for the impounding of stray animals; regulate
the keeping of animals in homes or as part of a
business, and the slaughter, sale or disposition of the
same; and adopt measures to prevent and penalize
cruelty to animals; and,
(viii)
(ix) Regulate the establishment, operation and
maintenance of funeral parlors and the burial or
cremation of the dead, subject to existing laws, rules
and regulations.
provided for under Section 17 of this Code, and in addition to
said services and facilities, shall:
(i) Provide for the establishment, maintenance,
protection, and conservation of communal forests and
watersheds, tree parks, greenbelts, mangroves, and
other similar forest development projects;
Establish markets, slaughterhouses or animal corrals
and authorize the operation thereof by the city
government; and regulate the construction and
operation of private markets, talipapas or other similar
buildings and structures;
(ii)
(iii) Authorize the establishment, maintenance and
operation by the city government of ferries, wharves,

217
and other structures intended to accelerate
productivity related to marine and seashore or
offshore activities;
(iv)
(vi)
Regulate the preparation and sale of meat, poultry,
fish, vegetables, fruits, fresh dairy products, and other
foodstuffs for public consumption;
(v) Regulate the use of streets, avenues, alleys,
sidewalks, bridges, parks and other public places and
approve the construction, improvement, repair and
maintenance of the same; establish bus and vehicle
stops and terminals or regulate the use of the same
by privately-owned vehicles which serve the public;
regulate garages and the operation of conveyances
for hire; designate stands to be occupied by public
vehicles when not in use; regulate the putting up of
signs, signposts, awnings and awning posts on the
streets; and provide for the lighting, cleaning and
sprinkling of streets and public places;
Regulate traffic on all streets and bridges; prohibit
encroachments or obstacles thereon and, when
necessary in the interest of public welfare, authorize
the removal of encroachments and illegal
constructions in public places;
(vii) Subject to existing laws, establish and provide for the
maintenance, repair and operation of an efficient
waterworks system to supply water for the inhabitants
and to purify the source of the water supply; regulate
the construction, maintenance, repair and use of
hydrants, pumps, cisterns and reservoirs; protect the
purity and quantity of the water supply of the city and,
for this purpose, extend the coverage of appropriate
ordinances over all territory within the drainage area
of said water supply and within one hundred (100)
meters of the reservoir, conduit, canal, aqueduct,
pumping station, or watershed used in connection
with the water service; and regulate the consumption,
use or wastage of water and fix and collect charges
therefor;
Regulate the drilling and excavation of the ground for
the laying of water, gas, sewer, and other pipes and
the construction, repair and maintenance of public
(viii)
drains, sewers, cesspools, tunnels and similar
structures; regulate the placing of poles and the use
of crosswalks, curbs, and gutters; adopt measures to
ensure public safety against open canals, manholes,
live wires and other similar hazards to life and

218
(ix)
(xi)
(xii)
(xiii)
(xiv)
property; and regulate the construction and use of
private water closets, privies and other similar
structures in buildings and homes;
Regulate the placing, stringing, attaching, installing,
repair and construction of all gas mains, electric,
telegraph and telephone wires, conduits, meters and
other apparatus; and provide for the correction,
condemnation or removal of the same when found to
be dangerous, defective, or otherwise hazardous to
the welfare of the inhabitants;
(x) Subject to the availability of funds and to existing
laws, rules and regulations, establish and provide for
the operation of vocational and technical schools and
similar post-Secondary institutions and, with the
approval of the Department of Education, Culture and
Sports and subject to existing law on tuition fees, fix
and collect reasonable tuition fees and other school
charges in educational institutions supported by the
city government;
Establish a scholarship fund for the poor but
deserving students in schools located within its
jurisdiction or for students residing within the city;
Approve measures and adopt quarantine regulations
to prevent the introduction and spread of diseases;
Provide for an efficient and effective system of solid
waste and garbage collection and disposal; prohibit
littering and the placing or throwing of garbage, refuse
and other filth and wastes;
Provide for the care of disabled persons, paupers, the
aged, the sick, persons of unsound mind, abandoned
minors, juvenile delinquents, drug dependents,
abused children and other needy and disadvantaged
persons, particularly children and youth below
eighteen (18) years of age; and, subject to availability
of funds, establish and provide for the operation of
centers and facilities for said needy and
disadvantaged persons;
(xv) Establish and provide for the maintenance and
improvement of jails and detention centers, institute a
sound jail management, and appropriate funds for the
subsistence of detainees and convicted prisoners in
the city;
Establish a City council whose purpose is the
(xvi)

219
the same; and
(xvii) Establish a City council for the elderly which shall
formulate policies and adopt measures mutually
beneficial to the elderly and to the community; provide
incentives for non-governmental agencies and entities
and, subject to the availability of funds, appropriate
funds to support programs and projects for the benefit
of the elderly; and
(b) The members of the Sangguniang Panlungsod of component cities
shall receive a minimum monthly compensation corresponding to
Salary Grade twenty-five (25) and members of the Sangguniang
Panlungsod of highly- urbanized cities shall receive a minimum
monthly compensation corresponding to Salary Grade twenty-
seven (27), as prescribed under R.A. 6758 and the implementing
guidelines issued pursuant thereto.

220
TITLE FOUR. - THE PROVINCE
CHAPTER 1 - ROLE AND CREATION OF THE PROVINCE
SECTION. 459. Role of the Province. - The province, composed of a cluster of
municipalities, or municipalities and component cities, and as a political
and corporate unit of government, serves as a dynamic mechanism for
developmental processes and effective governance of local government
units within its territorial jurisdiction.
SECTION. 460. Manner of Creation. - A province may be created, divided,
merged, abolished, or its boundary substantially altered, only by an Act of
Congress and subject to approval by a majority of the votes cast in a
units directly affected. The plebiscite shall be held within one hundred
twenty (120) days from the date of effectivity of said Act, unless otherwise
provided therein.
SECTION. 461. Requisites for Creation. - (a) A province may be created if it
has an average annual income, as certified by the Department of Finance,
of not less than Twenty million pesos(Php20,000,000.00) based on 1991
constant prices and either of the following requisites:
(i) a contiguous territory of at least two thousand (2,000) square
kilometers, as certified by the Lands Management Bureau;
or,
(ii) a population of not less than two hundred fifty
thousand(250,000) inhabitants as certified by the National
Statistics Office:
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.
(b) The territory need not be contiguous if it comprises two (2) or more
islands or is separated by a chartered city or cities which do not
contribute to the income of the province.
the general fund, exclusive of special funds, trust funds, transfers,
and non-recurring income.
SECTION. 462. Existing Sub-Provinces. - Existing subprovinces are hereby
converted into regular provinces upon approval by a majority of the votes

221
cast in a plebiscite to be held in the said subprovinces and the original
provinces directly affected. The plebiscite shall be conducted by the
Comelec simultaneously with the national elections following the effectivity
of this Code.
The new legislative districts created as a result of such conversion shall
continue to be represented in Congress by the duly-elected
representatives of the original districts out of which said new provinces or
districts were created until their own representatives shall have been
elected in the next regular congressional elections and qualified.
The incumbent elected officials of the said subprovinces converted into
regular provinces shall continue to hold office until June 30, 1992. Any
vacancy occurring in the offices occupied by said incumbent elected
officials, or resulting from expiration of their terms of office in case of a
negative vote in the plebiscite results, shall be filled by appointment by the
President. The appointees shall hold office until their successors shall
have been elected in the regular local elections following the plebiscite
mentioned herein and qualified. After effectivity of such conversion, the
President shall fill up the position of governor of the newly-created
province through appointment if none has yet been appointed to the same
as hereinbefore provided, and shall also appoint a vice-governor and the
other members of the Sangguniang Panlalawigan, all of whom shall
likewise hold office until their successors shall have been elected in the
next regular local elections and qualified.
All qualified appointive officials and employees in the career service of the
said sub-provinces at the time of their conversion into regular provinces
shall continue in office in accordance with civil service law, rules and
regulations.
CHAPTER 2 - PROVINCIAL OFFICIALS IN GENERAL
SECTION. 463. Officials of the Provincial Government. - (a) There shall be in
each province a governor, a vice-governor, members of the Sangguniang
Panlalawigan, a Secretary to the Sangguniang Panlalawigan, a provincial
treasurer, a provincial assessor, a provincial accountant, a provincial
engineer, a provincial budget officer, a provincial planning and
development coordinator, a provincial legal officer, a provincial
administrator, a provincial health officer, a provincial social welfare and
development officer, a provincial general services officer, a provincial
agriculturist, and a provincial veterinarian.
(b) In addition thereto, the governor may appoint a provincial
population officer, a provincial natural resources and environment

222
officer, a provincial cooperative officer, a provincial architect, and a
provincial information officer.
The appointment of a provincial population officer shall be optional
in the province: Provided, however, That provinces which have
existing population offices shall continue to maintain such offices
for a period of five (5) years from the date of the effectivity of this
Code, after which said offices shall become optional.
(c) The Sangguniang Panlalawigan may:
and (b) hereof;
the purposes of the provincial government; or
in the interest of efficiency and economy;
offices shall be appointed by the governor with the concurrence of
the majority of all the Sangguniang Panlalawigan members, subject
to civil service law, rules and regulations. The Sangguniang
Panlalawigan shall act on the appointment within fifteen (15) days
from the date of its submission; otherwise the same shall be
deemed confirmed;
(e) Elective and appointive provincial officials shall receive such
compensation, allowances, and other emoluments as may be
on personal services prescribed under Title Five, Book II of this
Code: Provided, That, no increase in compensation shall take effect
until after the expiration of the full term of all the elective officials
approving such increase.
SECTION. 464. Residence and Office. - During the incumbency of the
governor, he shall have his official residence in the capital of the province.
All elective and appointive provincial officials shall hold office in the
provincial capital: Provided, That, upon resolution of the Sangguniang
Panlalawigan, elective and appointive provincial officials may hold office in
any component city or municipality within the province for a period of not
more than seven (7) days for any given month.

223
CHAPTER 3 - OFFICIALS AND OFFICES COMMON TO ALL PROVINCES
Article One. The Provincial Governor
SECTION. 465. The Chief Executive: Powers, Duties, Functions, and
Compensation. - (a) The provincial governor, as the chief executive of
the provincial government, shall exercise such powers and perform such
duties and functions as provided by this Code and other laws.
which is the general welfare of the province and its inhabitants
pursuant to Section 16 of this Code, the provincial governor shall:
projects, services, and activities of the provincial
government, and in this connection, shall:
(i) Determine the guidelines of provincial policies and be
responsible to the Sangguniang Panlalawigan for the
Direct the formulation of the provincial development
(ii)
plan, with the assistance of the provincial
development council, and upon approval thereof by
the Sangguniang Panlalawigan, implement the same;
(iii)
(iv)
(vi)
Present the program of government and propose
policies and projects for the consideration of the
Sangguniang Panlalawigan at the opening of the
regular session of the Sangguniang Panlalawigan
every calendar year and as often as may be deemed
necessary as the general welfare of the inhabitants
and the needs of the provincial government may
require;
Sangguniang Panlalawigan and as often as may be
deemed necessary, provide such information and
data needed or requested by said sanggunian in the
performance of its legislative functions;
and wages are wholly or mainly paid out of provincial
funds and whose appointments are not otherwise
provided for in this Code, as well as those he may be
Represent the province in all its business transactions
and sign in its behalf all bonds, contracts, and
obligations, and such other documents upon authority

224
(vii)
(viii)
(ix)
(xi)
of the Sangguniang Panlalawigan or pursuant to law
or ordinance;
Determine the time, manner and place of payment of
salaries or wages of the officials and employees of
the province, in accordance with law or ordinance;
Allocate and assign office space to provincial and
other officials and employees who, by law or
ordinance, are entitled to such space in the provincial
capitol and other buildings owned or leased by the
provincial government;
the province faithfully discharge their duties and
functions as provided by law and this Code, and
cause to be instituted administrative or judicial
proceedings against any official or employee of the
province who may have committed an offense in the
performance of his official duties;
Examine the books, records and other documents of
all offices, officials, agents or employees of the
province and, in aid of his executive powers and
authority, require all national officials and employees
stationed in the province to make available to him
such books, records, and other documents in their
custody, except those classified by law as
confidential;
(xii) Furnish copies of executive orders issued by him to
the Office of the President within seventy-two (72)
hours after their issuance;
Visit component cities and municipalities of the
province at least once every six (6) months to deepen
his understanding of problems and conditions, listen
and give appropriate counsel to local officials and
inhabitants, inform the officials and inhabitants of
component cities and municipalities of general laws
and ordinances which especially concern them, and
otherwise conduct visits and inspections to ensure
that the governance of the province will improve the
quality of life of the inhabitants;
monetary value of leave credits in accordance with
law;
(xiii)
(xiv)

225
(xv) Authorize official trips of provincial officials and
employees outside of the province for a period not
exceeding thirty (30) days;
in or assigned to the province to advise him on
(xvi)
matters affecting the province and to make
official or employee in the formulation
recommendations thereon; coordinate with said
and
implementation of plans, programs and projects; and
when appropriate, initiate an administrative or judicial
action against a national government official or
employee who may have committed an offense in the
performance of his official duties while stationed in or
assigned to the province;
Authorize payment for medical care, necessary
transportation, subsistence, hospital or medical fees
of provincial officials and employees who are injured
while in the performance of their official duties and
functions, subject to availability of funds;
Represent the province in inter-provincial or regional
sports councils or committees, and coordinate the
efforts of component cities or municipalities in the
regional or national palaro or sports development
activities;
Conduct an annual palarong panlalawigan, which
shall feature traditional sports and disciplines included
in national and international games, in coordination
with the Department of Education, Culture and Sports;
and,
Submit to the Office of the President the following
reports: an annual report containing a summary of all
matters pertinent to the management, administration
and development of the province and all information
and data relative to its political, social and economic
(xvii)
(xviii)
(xix)
(xx)
conditions; and supplemental reports when
unexpected events and situations arise at any time
during the year, particularly when man-made or
natural disasters or calamities affect the general
welfare of the province, region or country;
of the province and the exercise of the appropriate corporate
powers provided for under Section 22 of this Code,
implement all approved policies, programs, projects,
services and activities of the province and, in addition to the
foregoing, shall:

226
(i)
(ii)
(iii)
(iv)
Ensure that the acts of the component cities and
municipalities of the province and of its officials and
employees are within the scope of their prescribed
powers, duties and functions;
Call conventions, conferences, seminars, or meetings
of any elective and appointive officials of the province
and its component cities and municipalities, including
national officials and employees stationed in or
assigned to the province, at such time and place and
on such subject as he may deem important for the
promotion of the general welfare of the province and
its inhabitants;
Issue such executive orders for the faithful and
appropriate enforcement and execution of laws and
ordinances;
(v) In coordination with the mayors of component cities
and municipalities and the National Police
Commission, formulate the peace and order plan of
the province and upon its approval, implement the
same in accordance with R.A. No. 6975;
Call upon the appropriate national law enforcement
agencies to suppress disorder, riot, lawless violence,
rebellion or sedition or to apprehend violators of the
law when public interest so requires and the police
forces of the component city or municipality where the
disorder or violation is happening are inadequate to
cope with the situation or the violators;
(vi)
provided for under Section 18 of this Code, particularly those
development and country-wide growth and progress and,
(i) Require each head of an office or department to
budget preparation process under Title Five, Book II
of this Code;
the executive and supplemental budgets of the
(ii)

227
(iii)
(iv)
(vi)
(vii)
province for the ensuing calendar year in the manner
provided for under Title Five, Book II of this Code;
Ensure that all taxes and other revenues of the
province are collected, and that provincial funds are
applied to the payment of expenses and settlement of
obligations of the province, in accordance with law or
ordinance;
law or ordinance;
(v) Adopt adequate measures to safeguard and conserve
land, mineral, marine, forest and other resources of
the province, in coordination with the mayors of
component cities and municipalities;
Provide efficient and effective property and supply
management in the province; and protect the funds,
credits, rights, and other properties of the province;
and;
recovery of funds and property; and cause the
province to be defended against all suits to ensure
that its interests, resources and rights shall be
adequately protected.
adequate facilities as provided for under Section 17 of this
Code, and in addition thereto, shall:
the province and of its component cities and
municipalities; and,
Coordinate the implementation of technical services
by national offices for the province and its component
cities and municipalities, including public works and
infrastructure programs of the provincial government
and its component cities and municipalities;
(ii)

228
(c) The provincial governor shall receive a minimum monthly
compensation corresponding to Salary Grade thirty (30) prescribed
under R.A. No. 6758 and the implementing guidelines issued
pursuant thereto.
Article Two. - The Provincial Vice-Governor
SECTION. 466. Powers, Duties, and Compensation. - (a) The vice-governor
shall:
(1) Be the presiding officer of the Sangguniang Panlalawigan
and sign all warrants drawn on the provincial treasury for all
Sangguniang Panlalawigan;
officials and employees of the Sangguniang Panlalawigan,
except those whose manner of appointment is specifically
(3) Assume the office of the governor for the unexpired term of
the latter in the event of permanent vacancy as provided for
in Section 44, Book I of this Code;
the governor in cases of temporary vacancy as provided for
in Section 46, Book I of this Code; and
(b) The vice-governor shall receive a monthly compensation
corresponding to Salary Grade twenty-eight (28) as prescribed
under R.A. No. 6758 and the implementing guidelines issued
pursuant thereto.
Article Three. - The Sangguniang Panlalawigan
SECTION. 467. Composition. - (a) The Sangguniang Panlalawigan, the
legislative body of the province, shall be composed of the provincial vice-
governor as presiding officer, the regular sanggunian members, the
president of the provincial chapter of the liga ng mga Barangay, the
president of the panlalawigang pederasyon ng mga Sangguniang
Kabataan, the president of the provincial federation of sanggunian

229
members of municipalities and component cities, and the Sectoral
(b) In addition thereto, there shall be three (3) Sectoral representatives:
one (1) from the women; and as shall be determined by the
of the local elections, one (1) from the agricultural or industrial
workers; and one (1) from the other Sectors, including the urban
poor, indigenous cultural communities, or disabled persons.
(c) The regular members of the Sangguniang Panlalawigan and the
Sectoral representatives shall be elected in the manner as may be
provided for by law.
SECTION. 468. Powers, Duties, Functions and Compensation. - (a) The
Sangguniang Panlalawigan, as the legislative body of the province, shall
enact ordinances, approve resolutions and appropriate funds for the
general welfare of the province and its inhabitants pursuant to Section 16
of this Code and in the proper exercise of the corporate powers of the
province as provided for under Section 22 of this Code, and shall:
efficient and effective provincial government and, in this
connection, shall:
(i) Review all ordinances approved by the sanggunians
of component cities and municipalities and executive
orders issued by the mayors of said component units
to determine whether these are within the scope of
the prescribed powers of the sanggunian and of the
mayor;
(ii) Maintain peace and order by enacting measures to
(iii) Approve ordinances imposing a fine not exceeding
Five thousand pesos (P=5,000.00) or imprisonment
not exceeding one(1) year, or both in the discretion of
the court, for the violation of a provincial ordinance;
Adopt measures to protect the inhabitants of the
province from the harmful effects of man-made or
natural disasters and calamities, and to provide relief
services and assistance for victims during and in the
(iv)

230
aftermath of said disasters and calamities and their
return to productive livelihood following said events;
morals of the inhabitants of the province;
(vi) Protect the environment and impose appropriate
(vii) Subject to the provisions of this Code and pertinent
employees of the province;
(viii) Determine the positions and the salaries, wages,
provincial funds and provide for
necessary for the proper conduct
expenditures
of programs,
the provincial
projects, services, and activities of
government;
(ix) Authorize the payment of compensation to a qualified
temporary vacancy, or grant honorarium to any

231
therefor, to ensure the safety and protection of all
provincial government property, public documents, or
records such as those relating to property inventory,
land ownership, records of births, marriages, deaths,
interest in the offices and departments of the
provincial government; and
(xi) When the finances of the provincial government allow,
officials stationed or assigned to the province.
of the province as provided for under Section 18 of this
Code, with particular attention to agro-industrial development
and country-wide growth and progress and relative thereto,
shall:
(i) Enact the annual and supplemental appropriations of
the provincial government and appropriate funds for
specific programs, projects, services and activities of
the province, or for other purposes not contrary to
law, in order to promote the general welfare of the
province and its inhabitants;
members of the Sangguniang Panlalawigan, enact
(ii)
reliefs;
(iii)
members of the Sangguniang Panlalawigan,
authorize the provincial governor to negotiate and
contract loans and other forms of indebtedness;
(iv) Subject to the provisions of Book II of this Code and
members of the Sangguniang Panlalawigan, enact

232
the province; and upon the majority vote of all the
members of the Sangguniang Panlalawigan,
authorize the provincial governor to lease to private
parties such public buildings held in a proprietary
capacity, subject to existing laws, rules and
regulations;
(vi) Prescribe reasonable limits and restraints on the use
of property within the jurisdiction of the province;
Review the comprehensive land use plans and zoning
ordinances of component cities and municipalities and
adopt a comprehensive provincial land use plan,
subject to existing laws: and
(vii)
(3) Adopt measures to enhance the full implementation of the
national agrarian reform program in coordination with the
Department of Agrarian Reform;
(4) Subject to the provisions of Book II of this Code, grant
franchises, approve the issuance of permits or licenses, or
enact ordinances levying taxes, fees and charges upon such
conditions and for such purposes intended to promote the
general welfare of the inhabitants of the province, and
pursuant to this legislative authority, shall:
services rendered by the provincial government to
private persons or entities; and
(ii) Regulate and fix the license fees for such activities as
provided for under this Code.
provided for under Section 17 of this Code, and, in addition
to said services and facilities, shall:
(i) Adopt measures and safeguards against pollution and
for the preservation of the natural ecosystem in the
province, in consonance with approved standards on
human settlements and environmental sanitation;
Subject to applicable laws, facilitate or provide for the
establishment and maintenance of a waterworks
(ii)

233
system or district waterworks for supplying water to
inhabitants of component cities and municipalities;
Subject to the availability of funds and to existing
(iii)
laws, rules and regulations, provide for the
establishment and operation of vocational and
technical schools and similar post-Secondary
institutions; and, with the approval of the Department
of Education, Culture and Sports and subject to
existing laws on tuition fees, fix reasonable tuition
fees and other school charges in educational
institutions supported by the provincial government;
(iv) Establish a scholarship fund for the poor but
deserving students in schools located within its
the
jurisdiction or for students residing within
province;
(vi)
(v) Approve measures and adopt quarantine regulations
to prevent the introduction and spread of diseases
within its territorial jurisdiction;
Provide for the care of paupers, the aged, the sick,
persons of unsound mind, abandoned minors, abused
children, disabled persons, juvenile delinquents, drug
dependents, and other needy and disadvantaged
persons, particularly children and youth below
eighteen (18) years of age; subject to availability of
funds, establish and support the operation of centers
and facilities for said needy and disadvantaged
persons; and facilitate efforts to promote the welfare
of families below the poverty threshold, the
disadvantaged, and the exploited;
(vii) Establish and provide for the maintenance and
improvement of jails and detention centers, institute a
sound jail management program, and appropriate
funds for the subsistence of detainees and convicted
prisoners in the province;
Establish a provincial council whose purpose is the
(viii)
the same;
Establish a provincial council for the elderly which
shall formulate policies and adopt measures mutually
beneficial to the elderly and to the province; and
subject to the availability of funds, appropriate funds
to support programs and projects for the elderly; and
provide incentives for nongovernmental agencies
(ix)

234
and entities to support the programs and projects of
the elderly; and
(x) Exercise such other powers and perform such other
duties and functions as may be prescribed by law or
ordinance.
(b) The members of the Sangguniang Panlalawigan shall receive a
minimum monthly compensation corresponding to Salary Grade
twenty-seven (27) as prescribed under R.A. 6758 and the
implementing guidelines issued pursuant thereto.

235
TITLE FIVE. - APPOINTIVE LOCAL OFFICIALS COMMON TO ALL
MUNICIPALITIES, CITIES AND PROVINCES
Article One. - Secretary to the Sanggunian
SECTION. 469. Qualifications, Powers and Duties. - (a) There shall be a
Secretary to the sanggunian who shall be a career official with the rank
and salary equal to a head of department or office.
(b) No person shall be appointed Secretary to the sanggunian unless
he is a citizen of the Philippines, a resident of the local government
unit concerned, of good moral character, a holder of a college
degree preferably in law, commerce or public administration from a
recognized college or university, and a first grade civil service
eligible or its equivalent.
The appointment of a Secretary to the sanggunian is mandatory for
provincial, city and municipal governments.
(c) The Secretary to the sanggunian shall take charge of the office of
the Secretary to the sanggunian and shall:
(1) Attend meetings of the sanggunian and keep a journal of its
proceedings;
(2) Keep the seal of the local government unit and affix the
same with his signature to all ordinances, resolutions, and
other official acts of the sanggunian and present the same to
the presiding officer for his signature;
(3) Forward to the governor or mayor, as the case may be, for
approval, copies of ordinances enacted by the sanggunian
and duly certified by the presiding officer, in the manner
provided in Section 54 under Book I of this Code;
(4) Forward to the sanggunian panlungsod or bayan concerned,
in the case of the Sangguniang Barangay, and to the
Sangguniang Panlalawigan concerned, in the case of the
Sangguniang Panlungsod of component cities or
Sangguniang Bayan, copies of duly approved ordinances, in
the manner provided in Sections 56 and 57 under Book I of
this Code;
(5) Furnish, upon request of any interested party, certified
copies of records of public character in his custody, upon

236
payment to the treasurer of such fees as may be prescribed
by ordinance;
(6) Record in a book kept for the purpose, all ordinances and
resolutions enacted or adopted by the sanggunian, with the
dates of passage and publication thereof;
(7) Keep his office and all non-confidential records therein open
to the public during the usual business hours;
(8) Translate into the dialect used by the majority of the
inhabitants all ordinances and resolutions immediately after
their approval, and cause the publication of the same
together with the original version in the manner provided
under this Code; and
(9) Take custody of the local archives and, where applicable,
the local library and annually account for the same; and
(d) Exercise such other powers and perform such other duties and
functions as may be prescribed by law or ordinance relative to his
position.
Article Two . - The Treasurer
SECTION. 470. Appointment, Qualifications, Powers, and Duties.- (a) The
treasurer shall be appointed by the Secretary of Finance from a list of at
least three (3) ranking, eligible recommendees of the governor or mayor,
as the case may be, subject to civil service law, rules and regulations.
(b) The treasurer shall be under the administrative supervision of the
governor or mayor, as the case may be, to whom he shall report
regularly on the tax collection efforts in the local government unit;
(c) No person shall be appointed treasurer unless he is a citizen of the
Philippines, a resident of the local government unit concerned, of
good moral character, a holder of a college degree preferably in
commerce, public administration or law from a recognized college
or university, and a first grade civil service eligible or its equivalent.
He must have acquired experience in treasury or accounting
service for at least five (5) years in the case of the city or provincial
treasurer, and three (3) years in the case of the municipal treasurer.
The appointment of a treasurer shall be mandatory for provincial,
city and municipal governments.

237
(d) The treasurer shall take charge of the treasury office, perform the
duties provided for under Book II of this Code, and shall:
(1) Advise the governor or mayor, as the case may be,
the sanggunian, and other local government and
national officials concerned regarding disposition of
local government funds, and on such other matters
relative to public finance;
(2) Take custody of and exercise proper management of
the funds of the local government unit concerned;
(3) Take charge of the disbursement of all local
government funds and such other funds the custody
of which may be entrusted to him by law or other
competent authority;
(4) Inspect private commercial and industrial
establishments within the jurisdiction of the local
government unit concerned in relation to the
implementation of tax ordinances, pursuant to the
provisions under Book II of this Code;
(5) Maintain and update the tax information system of the
local government unit;
(e) In the case of the provincial treasurer, exercise technical
supervision over all treasury offices of component cities and
municipalities; and
(f) Exercise such other powers and perform such other duties and
SECTION. 471. Assistant Treasurer. - (a) An assistant treasurer may be
appointed by the Secretary of Finance from a list of at least three (3) ranking,
eligible recommendees of the governor or mayor, subject to civil service law,
rules and regulations.
(b) No person shall be appointed assistant treasurer unless he is a
citizen of the Philippines, a resident of the local government unit
concerned, of good moral character, a holder of a college degree
preferably in commerce, public administration, or law from a
recognized college or university, and a first grade civil service
eligible or its equivalent. He must have acquired at least five (5)
years experience in the treasury or accounting service in the case

238
of the city or provincial assistant treasurer, and three (3) years in
the case of the municipal assistant treasurer.
The appointment of an assistant treasurer shall be optional for
provincial, city and municipal governments;
(c) The assistant treasurer shall assist the treasurer and perform such
duties as the latter may assign to him. He shall have authority to
administer oaths concerning notices and notifications to those
delinquent in the payment of the real property tax and concerning
official matters relating to the accounts of the treasurer or otherwise
arising in the offices of the treasurer and the assessor.
Article Three. - The Assessor
SECTION. 472 . Qualifications, Powers and Duties. - (a) No person shall be
appointed assessor unless he is a citizen of the Philippines, a resident of
the local government unit concerned, of good moral character, a holder of
a college degree preferably in civil or mechanical engineering, commerce,
or any other related course from a recognized college or university, and a
first grade civil service eligible or its equivalent. He must have acquired
experience in real property assessment work or in any related field for at
least five (5) years in the case of the city or provincial assessor, and three
(3) years in the case of the municipal assessor.
The appointment of an assessor shall be mandatory for provincial,
(b) The assessor shall take charge of the assessor's office, perform the
duties provided for under Book II of this Code, and shall:
(1) Ensure that all laws and policies governing the appraisal and
assessment of real properties for taxation purposes are
properly executed;
(2) Initiate, review, and recommend changes in policies and
objectives, plans and programs, techniques, procedures and
practices in the valuation and assessment of real properties
for taxation purposes;
(3) Establish a systematic method of real property assessment;
(4) Install and maintain a real property identification and
accounting system,

239
(5) Prepare, install and maintain a system of tax mapping,
showing graphically all property subject to assessment and
gather all data concerning the same;
(6) Conduct frequent physical surveys to verify and determine
whether all real properties within the province are properly
listed in the assessment rolls;
(7) Exercise the functions of appraisal and assessment primarily
for taxation purposes of all real properties in the local
(8) Prepare a schedule of the fair market value for the different
classes of real properties, in accordance with Title Two
under Book II of this Code;
(9) Issue, upon request of any interested party, certified copies
of assessment records of real property and all other records
relative to its assessment, upon payment of a service charge
or fee to the treasurer;
(10) Submit every semester a report of all assessments, as well
as cancellations and modifications of assessments to the
local chief executive and the sanggunian concerned;
(11) In the case of the assessor of a component city or
municipality attend, personally or through an authorized
representative, all sessions of the local board of assessment
appeals whenever his assessment is the subject of the
appeal, and present or submit any information or record in
his possession as may be required by the board; and,
(12) In the case of the provincial assessor, exercise technical
supervision and visitorial functions over all component city
and municipal assessors, coordinate with component city or
municipal assessors in the conduct of tax mapping
operations and all other assessment activities, and provide
all forms of assistance therefor: Provided, however, That,
upon full provision by the component city or municipality
concerned to its assessor's office of the minimum personnel
, equipment, and funding requirements as may be prescribed
by the Secretary of Finance, such functions shall be
delegated to the said city or municipal assessor; and

240
SECTION. 473. Assistant Assessor. - (a) No person shall be appointed
assistant assessor unless he is a citizen of the Philippines, a resident of
the local government unit concerned, of good moral character, a holder of
a college degree preferably in civil or mechanical engineering, commerce,
or any related course from a recognized college or university, and a first
grade civil service eligible or its equivalent. He must have acquired
experience in assessment or in any related field for at least three (3) years
in the case of the city or provincial assistant assessor, and one (1) year in
the case of the city or provincial assistant assessor.
The appointment of an assistant assessor shall be optional for provincial,
(b) The assistant assessor shall assist the assessor and perform such
other duties as the latter may assign to him. He shall have the
authority to administer oaths on all declarations of real property for
purposes of assessment.
Article Four. - The Accountant
SECTION. 474. Qualifications, Powers and Duties. - (a) No person shall be
appointed accountant unless he is a citizen of the Philippines, a resident
of the local government unit concerned, of good moral character, and a
certified public accountant. He must have acquired experience in the
treasury or accounting service for at least five (5) years in the case of the
provincial or city accountant, and three (3) years in the case of the
municipal accountant.
The appointment of an accountant is mandatory for the provincial, city and
municipal governments.
(b) The accountant shall take charge of both the accounting and
internal audit services of the local government unit concerned and
shall:
(1) Install and maintain an internal audit system in the local
(2) Prepare and submit financial statements to the governor or
mayor, as the case may be, and to the sanggunian
concerned;
(3) Apprise the sanggunian and other local government officials
on the financial condition and operations of the local

241
(4) Certify to the availability of budgetary allotment to which
expenditures and obligations may be properly charged;
(5) Review supporting documents before preparation of
vouchers to determine completeness of requirements;
(6) Prepare statements of cash advances, liquidation, salaries,
allowances, reimbursements and remittances pertaining to
the local government unit;
(7) Prepare statements of journal vouchers and liquidation of the
same and other adjustments related thereto;
(8) Post individual disbursements to the subsidiary ledger and
index cards;
(9) Maintain individual ledgers for officials and employees of the
local government unit pertaining to payrolls and deductions;
(10) Record and post in index cards details of purchased
furniture, fixtures, and equipment, including disposal thereof,
if any;
(11) Account for all issued requests for obligations and maintain
and keep all records and reports related thereto;
(12) Prepare journals and the analysis of obligations and
maintain and keep all records and reports related thereto;
and
and functions as may be provided by law or ordinance.
(c) The incumbent chief accountant in the office of the treasurer shall
be given preference in the appointment to the position of
accountant.
Article Five. - The Budget Officer
appointed budget officer unless he is a citizen of the Philippines, a
resident of the local government unit concerned, of good moral character,
a holder of a college degree preferably in accounting, economics, public
administration or any related course from a recognized college or
university, and a first grade civil service eligible or its equivalent. He must

242
have acquired experience in government budgeting or in any related field
for at least five (5) years in the case of the provincial or city budget officer,
and at least three (3) years in the case of the municipal budget officer.
The appointment of a budget officer shall be mandatory for the provincial,
city, and municipal governments.
(b) The budget officer shall take charge of the budget office and shall:
(1) Prepare forms, orders, and circulars embodying instructions
on budgetary and appropriation matters for the signature of
the governor or mayor, as the case may be;
(2) Review and consolidate the budget proposals of different
departments and offices of the local government unit;
(3) Assist the governor or mayor, as the case may be, in the
preparation of the budget and during budget hearings;
(4) Study and evaluate budgetary implications of proposed
legislation and submit comments and recommendations
thereon;
(5) Submit periodic budgetary reports to the Department of
Budget and Management;
(6) Coordinate with the treasurer, accountant, and the planning
and development coordinator for the purpose of budgeting;
(7) Assist the sanggunian concerned in reviewing the approved
budgets of component local government units;
(8) Coordinate with the planning and development coordinator in
the formulation of the local government unit development
plan; and
(d) The appropriations for personal services of the budget officer
provided under the Department of Budget and Management shall,
upon effectivity of this Code, be transferred to the local government
unit concerned. Thereafter, the appropriations for personal services
of the budget officer shall be provided for in full in the budget of the
local government unit.

243
Article Six. - The Planning and Development Coordinator
appointed planning and development coordinator unless he is a citizen of
the Philippines, a resident of the local government unit concerned, of good
moral character, a holder of a college degree preferably in urban planning,
development studies, economics, public administration, or any related
course from a recognized college or university, and a first grade civil
service eligible or its equivalent. He must have acquired experience in
development planning or in any related field for at least five (5) years in
the case of the provincial or city planning and development coordinator,
and three (3) years in the case of the municipal planning and development
coordinator. The appointment of a planning and development coordinator
shall be mandatory for provincial, city and municipal governments.
(b) The planning and development coordinator shall take charge of the
planning and development office and shall:
(1) Formulate integrated economic, social, physical, and other
development plans and policies for consideration of the local
government development council;
(2) Conduct continuing studies, researches, and training
programs necessary to evolve plans and programs for
implementation;
(3) Integrate and coordinate all sectoral plans and studies
undertaken by the different functional groups or agencies;
(4) Monitor and evaluate the implementation of the different
development programs, projects, and activities in the local
government unit concerned in accordance with the approved
development plan;
(5) Prepare comprehensive plans and other development
planning documents for the consideration of the local
development council;
(6) Analyze the income and expenditure patterns, and formulate
and recommend fiscal plans and policies for consideration of
the finance committee of the local government unit
concerned as provided under Title Five, Book II of this Code;
(7) Promote people participation in development planning within
the local government unit concerned;

244
(8) Exercise supervision and control over the Secretariat of the
local development council; and
(c) Exercise such other powers and perform such other functions and
duties as may be prescribed by law or ordinance.
Article Seven. - The Engineer
appointed engineer unless he is a citizen of the Philippines, a resident of
the local government unit concerned, of good moral character, and a
licensed civil engineer. He must have acquired experience in the practice
of his profession for at least five (5) years in the case of the provincial or
city engineer, and three (3) years in the case of the municipal engineer.
The appointment of an engineer shall be mandatory for the provincial, city,
and municipal governments. The city and municipal engineer shall also act
as the local building official.
(b) The engineer shall take charge of the engineering office and shall:
(1) Initiate, review and recommend changes in policies and
objectives, plans and programs, techniques, procedures and
practices in infrastructure development and public works in
general of the local government unit concerned;
(2) Advise the governor or mayor, as the case may be, on
infrastructure, public works, and other engineering matters;
(3) Administer, coordinate, supervise, and control the
construction, maintenance, improvement, and repair of
roads, bridges, and other engineering and public works
projects of the local government unit concerned;
(4) Provide engineering services to the local government unit
concerned, including investigation and survey, engineering
designs, feasibility studies, and project management;
(5) In the case of the provincial engineer, exercise technical
supervision over all engineering offices of component cities
and municipalities; and

245
Article Eight. - The Health Officer
appointed health officer unless he is a citizen of the Philippines, a resident
of the local government unit concerned, of good moral character, and a
licensed medical practitioner. He must have acquired experience in the
practice of his profession for at least five (5) years in the case of the
provincial or city health officer, and three (3) years in the case of the
municipal health officer.
The appointment of a health officer shall be mandatory for provincial, city
and municipal governments.
b) The health officer shall take charge of the office on health and shall:
(1) Take charge of the office on health services, supervise the
personnel and staff of said office, formulate program
implementation guidelines and rules and regulations for the
operation of the said office for the approval of the governor
or mayor, as the case may be, in order to assist him in the
efficient, effective and economical implementation of a
health services program geared to implementation of health-
related projects and activities;
(2) Formulate measures for the consideration of the sanggunian
and provide technical assistance and support to the
governor or mayor, as the case may be, in carrying out
activities to ensure the delivery of basic services and
provision of adequate facilities relative to health services
provided under Section 17 of this Code;
(3) Develop plans and strategies and upon approval thereof by
the governor or mayor as the case may be, implement the
same, particularly those which have to do with health
programs and projects which the governor or mayor, is
empowered to implement and which the sanggunian is
empowered to provide for under this Code;
(4) In addition to the foregoing duties and functions, the health
officer shall :
(i) Formulate and implement policies, plans, programs
and projects to promote the health of the people in the
local government unit concerned;
Advise the governor or mayor, as the case may be,
and the sanggunian on matters pertaining to health;
(ii)

246
(iii)
(iv)
Execute and enforce all laws, ordinances and
regulations relating to public health;
Recommend to the sanggunian, through the local
health board, the passage of such ordinances as he
may deem necessary for the preservation of public
health;
(v) Recommend the prosecution of any violation of
sanitary laws, ordinances or regulations;
(vi) Direct the sanitary inspection of all business
establishments selling food items or providing
accommodations such as hotels, motels, lodging
houses, pension houses, and the like, in accordance
with the Sanitation Code;
(vii) Conduct health information campaigns and render
health intelligence services;
Coordinate with other government agencies and non-
governmental organizations involved in the promotion
and delivery of health services; and
In the case of the provincial health officer, exercise
general supervision over health officers of component
cities and municipalities; and
(viii)
(ix)
(5) Be in the frontline of health services delivery, particularly
during and in the aftermath of man-made and natural
disasters and calamities; and
Article Nine. - The Civil Registrar
appointed civil registrar unless he is a citizen of the Philippines, a resident
of the local government unit concerned, of good moral character, a holder
of a college degree from a recognized college or university, and a first
experience in civil registry work for at least five(5) years in the case of the
city civil registrar and three (3) years in the case of the municipal civil
registrar.
The appointment of a civil registrar shall be mandatory for city and
municipal governments.
(b) The civil registrar shall be responsible for the civil registration
program in the local government unit concerned, pursuant to the

247
Civil Registry Law, the Civil Code, and other pertinent laws, rules
and regulations issued to implement them.
(c) The Civil Registrar shall take charge of the office of the civil registry
and shall:
the governor or mayor, as the case may be, implement the
same, particularly those which have to do with civil registry
programs and projects which the mayor is empowered to
implement and which the sanggunian is empowered to
provide for under this Code;
(2) In addition to the foregoing duties and functions, the civil
registrar shall:
(i)
(ii)
(iii)
(iv)
(vi)
Accept all registrable documents and judicial decrees
affecting the civil status of persons;
File, keep and preserve in a secure place the books
required by law;
Transcribe and enter immediately upon receipt all
registrable documents and judicial decrees affecting
the civil status of persons in the appropriate civil
registry books;
Transmit to the Office of the Civil Registrar- General,
within the prescribed period, duplicate copies of
registered documents required by law;
(v) Issue certified transcripts or copies of any certificate
or registered documents upon payment of the
prescribed fees to the treasurer;
Receive applications for the issuance of a marriage
license and, after determining that the requirements
and supporting certificates and publication thereof for
the prescribed period have been complied with, issue
the license upon payment of the authorized fee to the
treasurer;
(vii)
registration and assist in the preparation
(vii) Coordinate with the National Statistics Office
in conducting educational campaigns for vital
of
demographic and other statistics for the local
government unit concerned; and

248
Article Ten. - The Administrator
SECTION. 480. Qualifications, Term, Powers and Duties. - (a) No person shall
be appointed administrator unless he is a citizen of the Philippines, a
a holder of a college degree preferably in public administration, law, or any
other related course from a recognized college or university, and a first
experience in management and administration work for at least five (5)
years in the case of the provincial or city administrator, and three (3) years
in the case of the municipal administrator.
The term of administrator is coterminous with that of his appointing
authority.
The appointment of an administrator shall be mandatory for the provincial
and city governments, and optional for the municipal government.
(b) The administrator shall take charge of the office of the administrator
and shall:
same particularly those which have to do with the
management and administration-related programs and
projects which the governor or mayor is empowered to
implement and which the sanggunian is empowered to
(2) In addition to the foregoing duties and functions, the
administrator shall:
(i) Assist in the coordination of the work of all the officials
of the local government unit, under the supervision,
direction, and control of the governor or mayor, and
for this purpose, he may convene the chiefs of offices
and other officials of the local government unit;
Establish and maintain a sound personnel program
for the local government unit designed to promote
career development and uphold the merit principle in
the local government service;
Conduct a continuing organizational development of
the local government unit with the end in view of
instituting effective administrative reforms;
(ii)
(iii)

249
(3) Be in the frontline of the delivery of administrative support
services, particularly those related to the situations during
and in the aftermath of man-made and natural disasters and
calamities;
(4) Recommend to the sanggunian and advise the governor and
mayor, as the case may be, on all other matters relative to
the management and administration of the local government
unit; and
Article Eleven. - The Legal Officer
SECTION. 481. Qualifications, Term, Powers and Duties. - (a) No person shall
be appointed legal officer unless he is a citizen of the Philippines, a
and a member of the Philippine Bar. He must have practiced his
profession for at least five (5) years in the case of the provincial and city
legal officer, and three (3) years in the case of the municipal legal officer.
The term of the legal officer shall be coterminous with that of his
appointing authority. The appointment of legal officer shall be mandatory
for the provincial and city governments and optional for the municipal
government.
(b) The legal officer, the chief legal counsel of the local government
unit, shall take charge of the office of legal services and shall:
and provide legal assistance and support to the governor or
mayor, as the case may be, in carrying out the delivery of
basic services and provisions of adequate facilities as
provided for under Section 17 of this Code;
same, particularly those which have to do with programs and
projects related to legal services which the governor or
mayor is empowered to implement and which the
sanggunian is empowered to provide for under this Code.
(3) In addition to the foregoing duties and functions, the legal
officer shall:
(i) Represent the local government unit in all civil actions
and special proceedings wherein the local

250
government unit or any official thereof, in his official
capacity, is a party: Provided, That, in actions or
proceedings where a component city or municipality is
a party adverse to the provincial government or to
another component city or municipality, a special legal
officer may be employed to represent the adverse
party;
(ii) When required by the governor, mayor or
sanggunian, draft ordinances, contracts, bonds,
leases and other instruments, involving any interest of
the local government unit; and provide comments and
recommendations on any instruments already drawn;
(iii)
(iv)
Render his opinion in writing on any question of law
when requested to do so by the governor, mayor, or
sanggunian;
Investigate or cause to be investigated any local
official or employee for administrative neglect or
misconduct in office, and recommend appropriate
action to the governor, mayor or sanggunian, as the
case may be;
(v) Investigate or cause to be investigated any person,
firm or corporation holding any franchise or exercising
any public privilege for failure to comply with any term
or condition in the grant of such franchise or privilege,
and recommending appropriate action to the
governor, mayor or sanggunian, as the case may be;
(vi) When directed by the governor, mayor, or
sanggunian, initiate and prosecute in the interest of
the local government unit concerned any civil action
on any bond, lease or other contract upon any breach
or violation thereof; and
(vii) Review and submit recommendations on ordinances
approved and executive orders issued by component
units;
(3) Recommend measures to the sanggunian and advise the
governor or mayor as the case may be on all other matters
related to upholding the rule of law ;
(4) Be in the frontline of protecting human rights and
prosecuting any violations thereof, particularly those which
occur during and in the aftermath of man-made or natural
disasters or calamities; and

251
Article Twelve. - The Agriculturist
appointed agriculturist unless he is a citizen of the Philippines, a resident
of the local government unit concerned, of good moral character, a holder
of a college degree in agriculture or any related course from a recognized
college or university, and a first grade civil service eligible or its equivalent.
He must have practiced his profession in agriculture or acquired
experience in a related field for at least five (5) years in the case of the
provincial and city agriculturist, and three (3) years in the case of the
municipal agriculturist.
The position of the agriculturist shall be mandatory for the provincial
government and optional for the city and municipal governments.
(b) The agriculturist shall take charge of the office for agricultural
services, and shall:
(1) Formulate measures for the approval of the sanggunian and
provide technical assistance and support to the governor or
mayor, as the case may be, in carrying out said measures to
ensure the delivery of basic services and provision of
adequate facilities relative to agricultural services as
provided for under Section 17 of this Code;
same, particularly those which have to do with agricultural
programs and projects which the governor or mayor is
empowered to implement and which the sanggunian us
agriculturist shall:
(i) Ensure that maximum assistance and access to
resources in the production, processing and
marketing of agricultural and aqua-cultural and marine
products are extended to farmers, fishermen and local
entrepreneurs;
Conduct or cause to be conducted location-specific
agricultural researches and assist in making available
the appropriate technology arising out of and
(ii)

252
disseminating information on basic research on crops,
preventive and control of plant diseases and pests,
and other agricultural matters which will maximize
productivity;
Assist the governor or mayor, as the case may be, in
(iii)
the establishment and extension services of
demonstration farms or aqua-culture and marine
products;
(iv) Enforce rules and regulations relating to agriculture
and aquaculture;
(v) Coordinate with government agencies and non-
governmental organizations which promote
agricultural productivity through appropriate
technology compatible with environmental integrity;
(4) Be in the frontline of delivery of basic agricultural services,
particularly those needed for the survival of the inhabitants
during and in the aftermath of man-made and natural
disasters; (5) Recommend to the sanggunian and advise the
governor or mayor, as the case may be, on all other matters
related to agriculture and aqua-culture which will improve the
livelihood and living conditions of the inhabitants; and
Article Thirteen. - The Social Welfare and Development Officer
appointed social welfare and development officer unless he is a citizen of
the Philippines, a resident of the local government unit concerned, of good
moral character, a duly licensed social worker or a holder of a college
degree preferably in sociology or any other related course from a
recognized college or university, and a first grade civil service eligible or
its equivalent. He must have acquired experience in the practice of social
work for at least five (5) years in the case of the provincial or city social
welfare and development officer, and three (3) years in the case of the
municipal social welfare and development officer.
The appointment of a social welfare and development officer is mandatory
for provincial and city governments, and optional for municipal
government.
(b) The social welfare and development officer shall take charge of the
office on social welfare and development services and shall:

253
(1) Formulate measures for the approval of the sanggunian and
provide technical assistance and support to the governor or
mayor, as the case may be, in carrying out measures to
ensure the delivery of basic services and provision of
adequate facilities relative to social welfare and development
services as provided for under Section 17 of this Code;
same particularly those which have to do with social welfare
programs and projects which the governor or mayor is
(3) In addition to the foregoing duties, the social welfare and
development officer shall:
(i) Identify the basic needs of the needy, the
disadvantaged and the impoverished and develop
(ii)
(iii)
(iv)
(vi)
and implement appropriate measures to alleviate their
problems and improve their living conditions;
Provide relief and appropriate crisis intervention for
victims of abuse and exploitation and recommend
appropriate measures to deter further abuse and
exploitation;
Assist the governor or mayor, as the case may be, in
implementing the Barangay level program for the total
development and protection of children up to six (6)
years of age;
Facilitate the implementation of welfare programs for
the disabled, elderly, and victims of drug addiction,
the rehabilitation of prisoners and parolees, the
prevention of juvenile delinquency and such other
activities which would eliminate or minimize the ill-
effects of poverty;
(v) Initiate and support youth welfare programs that will
enhance the role of the youth in nation-building;
Coordinate with government agencies and non-
governmental organizations which have for their
purpose the promotion and the protection of all needy,
disadvantaged, underprivileged or impoverished
groups or individuals, particularly those identified to
be vulnerable and high-risk to exploitation, abuse and
neglect;

254
(4) Be in the frontline of service delivery, particularly those
which have to do with immediate relief during and assistance
in the aftermath of man-made and natural disaster and
natural calamities;
(5) Recommend to the sanggunian and advise the governor or
mayor, as the case may be, on all other matters related to
social welfare and development services which will improve
the livelihood and living conditions of the inhabitants; and
Article Fourteen. - The Environment and Natural Resources Officer
appointed environment and natural resources officer unless he is a citizen
of the Philippines, a resident of the local government unit concerned, of
good moral character, a holder of a college degree preferably in
environment, forestry, agriculture or any related course from a recognized
He must have acquired experience in environmental and natural
resources management, conservation, and utilization, of at least five (5)
years in the case of the provincial or city environment and natural
resources officer, and three (3) years in the case of the municipal
environment and natural resources officer.
The appointment of the environment and natural resources officer
is optional for provincial, city, and municipal governments.
(b) The environment and natural resources management officer shall
take charge of the office on environment and natural resources and
shall:
measures to ensure the delivery of basic services and
provision of adequate facilities relative to environment and
natural resources services as provided for under Section 17
of this Code;
same, particularly those which have to do with environment

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and natural resources programs and projects which the
governor or mayor is empowered to implement and which
the sanggunian is empowered to provide for under this
Code;
environment and natural resources officer shall:
(i) Establish, maintain, protect and preserve communal
forests, watersheds, tree parks, mangroves,
greenbelts and similar forest projects and commercial
forest, like industrial tree farms and agro-forestry
projects;
(ii) Provide extension services to beneficiaries of forest
development projects and technical, financial and
infrastructure assistance;
(iii) Manage and maintain seed banks and produce
seedlings for forests and tree parks;
(iv) Provide extension services to beneficiaries of forest
development projects and render assistance for
natural resources-related conservation and utilization
activities consistent with ecological balance;
(v) Promote the small-scale mining and utilization of
mineral resources, particularly mining of gold;
(vi) Coordinate with government agencies and non-
governmental organizations in the implementation of
measures to prevent and control land, air and water
pollution with the assistance of the Department of
Environment and Natural Resources;
(4) Be in the frontline of the delivery of services concerning the
environment and natural resources, particularly in the
renewal and rehabilitation of the environment during and in
the aftermath of man-made and natural calamities and
disasters;
mayor, as the case may be, on all matters relative to the
protection, conservation, maximum utilization, application of
appropriate technology and other matters related to the
environment and natural resources; and

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Article Fifteen - The Architect
appointed architect unless he is a citizen of the Philippines, a resident of
the local government unit concerned, of good moral character, a duly
licensed architect. He must have practiced his profession for at least five
(5) years in the case of the provincial or city architect, and three (3) years
in the case of the municipal architect. The appointment of the architect is
optional for provincial, city and municipal governments.
(b) The architect shall take charge of the office on architectural
planning and design and shall:
provision of adequate facilities relative to architectural
planning and design as provided for under Section 17 of this
Code;
same, particularly those which have to do with architectural
planning and design programs and projects which the
governor or mayor is empowered to implement and which
the sanggunian is empowered to provide for under this
Code;
(3) In addition to foregoing duties and functions, the architect
shall:
(i) Prepare and recommend for consideration of the
sanggunian the architectural plan and design for the
local government unit or a part thereof, including the
renewal of slums and blighted areas, land reclamation
activities, the greening of land, and appropriate
planning of marine and foreshore areas;
(ii) Review and recommend for appropriate action of the
sanggunian, governor or mayor, as the case may be,
the architectural plans and design submitted by

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non-governmental entities or
governmental and
individuals, particularly those for undeveloped,
underdeveloped, and poorly-designed areas; and
(iii) Coordinate with government and non-government
entities and individuals involved in the aesthetics and
the maximum utilization of the land and water within
the jurisdiction of the local government unit,
compatible with environmental integrity and ecological
balance.
(4) Be in the frontline of the delivery of services involving
architectural planning and design, particularly those related
to the redesigning of spatial distribution of basic facilities and
physical structures during and in the aftermath of man-made
and natural calamities and disasters;
the architectural planning and design as it relates to the total
socioeconomic development of the local government unit;
and
Article Sixteen. - The Information Officer
appointed information officer unless he is a citizen of the Philippines, a
a holder of a college degree preferably in journalism, mass communication
or any related course from a recognized college or university, and a first
grade civil service eligible or its equivalent. He must have experience in
writing articles and research papers, or in writing for print, television or
broadcast media of at least three (3) years in the case of the provincial or
city information officer, and at least one (1) year in the case of municipal
information officer.
The appointment of the information officer is optional for the provincial, city
and municipal governments.
The term of the information officer is co-terminous with that of his
appointing authority.

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(b) The information officer shall take charge of the office on public
information and shall:
governor or mayor, as the case may be, in providing the
information and research data required for the delivery of
basic services and provision of adequate facilities so that the
public becomes aware of said services and may fully avail of
the same;
(2) Develop plans and strategies and, upon approval thereof by
same, particularly those which have to do with public
programs and
empowered to
empowered to
information and research data to support
projects which the governor or mayor is
implement and which the sanggunian is
information officer shall:
(i) Provide relevant, adequate, and timely information to
the local government unit and its residents;
(ii) Furnish information and data on local government
units to government agencies or offices as may be
required by law or ordinance; and non-governmental
organizations to be furnished to said agencies and
organizations;
(iii) Maintain effective liaison with the various Sectors of
the community on matters and issues that affect the
livelihood and the quality of life of the inhabitants and
encourage support for programs of the local and
national government;
(4) Be in the frontline in providing information during and in the
aftermath of manmade and natural calamities and disasters,
with special attention to the victims thereof, to help minimize
injuries and casualties during and after the emergency, and
to accelerate relief and rehabilitation;
public information and research data as it relates to the total

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socioeconomic development of the local government unit;
and
Article Seventeen. - The Cooperatives Officer
appointed cooperative officer unless he is a citizen of the Philippines, a
a holder of a college degree preferably in business administration with
special training in cooperatives or any related course from a recognized
He must have experience in cooperatives organization and management
of at least five (5) years in the case of the provincial or city cooperatives
officer, and three (3) years in the case of municipal cooperatives officer.
The appointment of the cooperatives officer is optional for the provincial
and city governments.
b) The cooperatives officer shall take charge of the office for the
development of cooperatives and shall:
(1) Formulate measures for the consideration of the
sanggunian, and provide technical assistance and support to
the governor or mayor, as the case may be, in carrying out
provision of facilities through the development of
cooperatives, and in providing access to such services and
facilities;
(2) Develop plans and strategies and, upon approval thereof by
same, particularly those which have to do with the
integration of
programs and
empowered to
cooperatives principles and methods in
projects which the governor or mayor is
implement and which the sanggunian is
cooperatives officer shall:
(i) Assist in the organization of cooperatives;

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(ii) Provide technical and other forms of assistance to
existing cooperatives to enhance their viability as an
economic enterprise and social organization;
Assist cooperatives in establishing linkages with
(iii)
agencies and non-government
involved in the promotion and
the concept of cooperatives in the
the people and other community
government
organizations
integration of
livelihood of
activities;
(4) Be in the frontline of cooperatives organization, rehabilitation
or viability-enhancement, particularly during and in the
aftermath of man-made and natural calamities and disasters,
to aid in their survival and, if necessary subsequent
rehabilitation;
(5) Recommend to the sanggunian, and advise the governor or
cooperatives development and viability- enhancement which
will improve the livelihood and quality of life of the
inhabitants; and
Article Eighteen. - The Population Officer
appointed population officer unless he is a citizen of the Philippines, a
a holder of a college degree with specialized training in population
development from a recognized college or university, and a first grade civil
service eligible or its equivalent. He must have experience in the
implementation of programs on population development or responsible
parenthood for at least five (5) years in the case of the provincial or city
population officer and three (3) years in the case of the municipal
population officer.
The appointment of a population officer shall be optional in the local
government unit: Provided, however, That provinces and cities which have
existing population offices shall continue to maintain such offices for a
period of five (5) years from the date of effectivity of this Code, after which
said offices shall become optional.
(b) The population officer shall take charge of the office on population
development and shall:

261
provision of adequate facilities relative to the integration of
the population development principles and in providing
access to said services and facilities;
integration of population development principles and
methods in programs and projects which the governor or
mayor is empowered to implement and which the
sanggunian is empowered to provide for under this Code;
population officer shall:
(i) Assist the governor or mayor, as the case may be, in
the implementation of the Constitutional provisions
relative to population development and the promotion
of responsible parenthood;
Establish and maintain an updated data bank for
program operations, development planning and an
(ii)
educational program to ensure the people's
participation in and understanding of population
development;
Implement appropriate training programs responsive
to the cultural heritage of the inhabitants; and
(iii)
Article Nineteen. - The Veterinarian
appointed veterinarian unless he is a citizen of the Philippines, a resident
of the local government concerned, of good moral character, a licensed
doctor of veterinary medicine. He must have practiced his profession for at
least three (3) years in the case of provincial or city veterinarian and at
least one (1) year in the case of the municipal veterinarian.
The appointment of a veterinarian officer is mandatory for the provincial
and city governments.

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(b) The veterinarian shall take charge of the office for veterinary
services and shall:
(1) Formulate measures for the consideration of the
sanggunian, and provide technical assistance and support to
the governor or mayor, as the case may be, in carrying out
provision of adequate facilities pursuant to Section 17 of this
Code;
veterinary-related activities which the governor or mayor is
veterinarian shall:
(i)
(ii)
(iii)
(iv)
Advise the governor or the mayor, as the case may
be, on all matters pertaining to the slaughter of
animals for human consumption and the regulation of
slaughterhouses;
Regulate the keeping of domestic animals;
Regulate and inspect poultry, milk and dairy products
for public consumption;
Enforce all laws and regulations for the prevention of
cruelty to animals; and
(v) Take the necessary measures to eradicate, prevent or
cure all forms of animal diseases;
(4) Be in the frontline of veterinary related activities, such as in
the outbreak of highly-contagious and deadly diseases, and
in situations resulting in the depletion of animals for work
and human consumption, particularly those arising from and
in the aftermath of man-made and natural calamities and
disasters;
veterinary services which will increase the number and improve the
quality of livestock, poultry and other domestic animals used for
work or human consumption; and

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Article Twenty. - The General Services Officer
appointed general services officer unless he is a citizen of the Philippines,
a resident of the local government unit concerned, of good moral
character, a holder of a college degree on public administration, business
administration and management from a recognized college or university,
and a first grade civil service eligible or its equivalent. He must have
acquired experience in general services, including management of supply,
property, solid waste disposal, and general sanitation, of at least five (5)
years in the case of the provincial or city general services officer, and at
least three (3) years in the case of the municipal general services officer.
The appointment of a general services officer is mandatory for the
provincial and city governments.
(b) The general services officer shall take charge of the office on
general services and shall:
provision of adequate facilities pursuant to Section 17 of this
Code and which require general services expertise and
technical support services;
same, particularly those which have to do with the general
services supportive of the welfare of the inhabitants which
the governor or mayor is empowered to implement and
which the sanggunian is empowered to provide for under this
Code;
(3) In addition to the foregoing duties and functions, the general
services officer shall:
(i) Take custody of and be accountable for all properties,
real or personal, owned by the local government unit
and those granted to it in the form of donation,
reparation, assistance and counterpart of joint
projects;

264
(ii) With the approval of the governor or mayor, as the
case may be, assign building or land space to local
officials or other public officials, who by law, are
entitled to such space;
Recommend to the governor or mayor, as the case
may be, the reasonable rental rates for local
government properties, whether real or personal,
which will be leased to public or private entities by the
local government;
Recommend to the governor or mayor, as the case
may be, reasonable rental rates of private properties
which may be leased for the official use of the local
government unit;
(iii)
(iv)
(v) Maintain and supervise janitorial, Security,
landscaping and other related services in all local
government public buildings and other real property,
whether owned or leased by the local government
unit;
Collate and disseminate information regarding prices,
shipping and other costs of supplies and other items
commonly used by the local government unit;
Perform archival and record management with
respect to records of offices and departments of the
local government unit; and
Perform all other functions pertaining to supply and
property management heretofore performed by the
local government treasurer; and enforce policies on
records creation, maintenance, and disposal;
(vi)
(vii)
(viii)
(4) Be in the frontline of general services related activities, such
as the possible or imminent destruction or damage to
records, supplies, properties, and structures and the orderly
and sanitary clearing up of waste materials or debris,
particularly during and in the aftermath of man-made and
natural calamities and disasters;
general services; and

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TITLE SIX. - LEAGUES OF LOCAL GOVERNMENT UNITS AND
ELECTIVE OFFICIALS
CHAPTER I - LEAGUES OF LOCAL GOVERNMENT UNITS
Article One. - Liga ng Mga Barangay
SECTION. 491. Purpose of Organization. - There shall be an organization of all
Barangays to be known as the liga ng mga Barangay for the primary
purpose of determining the representation of the Liga in the sanggunians,
and for ventilating, articulating and crystallizing issues affecting Barangay
government administration and securing, through proper and legal means,
solutions thereto.
SECTION. 492. Representation, Chapters, National Liga. - Every Barangay
shall be represented in said liga by the Punong Barangay, or in his
absence or incapacity, by a sanggunian member duly elected for the
purpose among its members, who shall attend all meetings or
deliberations called by the different chapters of the liga. The liga shall
have chapters at the municipal, city, provincial and metropolitan political
subdivision levels. The municipal and city chapters of the liga shall be
composed of the Barangay representatives of municipal and city
Barangays, respectively. The duly elected presidents of component
municipal and city chapters shall constitute the provincial chapter or the
metropolitan political subdivision chapter. The duly elected presidents of
highly-urbanized cities, provincial chapters, the Metropolitan Manila
chapter and metropolitan political subdivision chapters shall constitute the
National Liga ng mga Barangay.
SECTION. 493. Organization. - The liga at the municipal, city, provincial,
metropolitan political subdivision, and national levels directly elect a
president, a vice- president, and five (5) members of the board of
directors. The board shall appoint its Secretary and treasurer and create
such other positions as it may deem necessary for the management of the
chapter. A Secretary-general shall be elected from among the members of
the national liga and shall be charged with the overall operation of the liga
on the national level. The board shall coordinate the activi ties of the
chapters of the liga.
SECTION. 494. Ex-Officio Membership in Sanggunians. - The duly elected
presidents of the liga at the municipal, city and provincial levels, including
the component cities and municipalities of Metropolitan Manila, shall serve
as ex-officio members of the Sangguniang Bayan, Sangguniang
Panlungsod, Sangguniang Panlalawigan, respectively. They shall serve as
such only during their term of office as presidents of the liga chapters,

266
which in no case shall be beyond the term of office of the sanggunian
concerned.
SECTION. 495. Powers, Functions and Duties of the Liga. - The Liga shall:
(a) Give priority to programs designed for the total development of the
Barangays and in consonance with the policies, programs and
projects of the national government ;
(b) Assist in the education of Barangay residents for people's
participation in local government administration in order to promote
united and concerted action to achieve country-wide development
goals;
(c) Supplement the efforts of government in creating gainful
employment within the Barangay;
(d) Adopt measures to promote the welfare of Barangay officials;
(e) Serve as a forum of the Barangays in order to forge linkages with
government and non-governmental organizations and thereby
promote the social, economic and political well-being of the
Barangays; and
(f) Exercise such other powers and perform such other duties and
functions which will bring about stronger ties between Barangays
and promote the welfare of the Barangay inhabitants.
Article Two. - League of Municipalities
municipalities to be known as league of municipalities for the primary
purpose of ventilating, articulating and crystallizing issues affecting
municipal government administration, and securing, through proper and
legal means, solutions thereto. The league shall form provincial chapters
composed of the league presidents for all component municipalities of the
province.
SECTION. 497. Representation. - Every municipality shall be represented in the
league by the municipal mayor or in his absence, by the vice-mayor or a
sanggunian member duly elected for the purpose by the members, who
shall attend all meetings and participate in the deliberations of the league.
SECTION. 498. Powers, Functions and Duties of the League of
Municipalities. - The league of municipalities shall:

267
(a) Assist the national government in the formulation and
implementation of the policies, programs and projects affecting
municipalities as a whole;
(b) Promote local autonomy at the municipal level;
(c) Adopt measures for the promotion of the welfare of all
municipalities and its officials and employees;
(d) Encourage people's participation in local government administration
in order to promote united and concerted action for the attainment
of country-wide development goals;
(e) Supplement the efforts of the national government in creating
opportunities for gainful employment within the municipalities;
(f) Give priority to programs designed for the total development of the
municipalities in consonance with the policies, programs and
projects of the national government;
(g) Serve as a forum for crystallizing and expressing ideas, seeking the
necessary assistance of the national government, and providing the
private sector avenues for cooperation in the promotion of the
welfare of the municipalities; and
functions as the league may prescribe for the welfare of the
municipalities.
Article Three. - League of Cities
cities to be known as the League of Cities for the primary purpose of
ventilating, articulating and crystallizing issues affecting city government
administration, and securing, through proper and legal means, solutions
thereto. The League may form chapters at the provincial level for the
component cities of a province. Highly-urbanized cities may also form a
chapter of the League. The National League shall be composed of the
presidents of the league of highly-urbanized cities and the presidents of
the provincial chapters of the league of component cities.
SECTION. 500. Representation. - Every city shall be represented in the league
by the city mayor or in his absence, by the city vice-mayor or a
sanggunian member duly elected for the purpose by the members, who
shall attend all meetings and participate in the deliberations of the league.

268
SECTION. 501. Powers, Functions and Duties of the League of City. - The
league of cities shall:
cities as a whole;
(b) Promote local autonomy at the city level;
(c) Adopt measures for the promotion of the welfare of all cities and its
officials and employees;
(d) Encourage people's participation in local government administration
of country-wide development goals;
opportunities for gainful employment the cities;
(f) Give priority to programs designed for the total development of
cities in consonance with the policies, programs and projects of the
national government;
necessary assistance of the national government and providing the
welfare of the cities; and
functions as the league may prescribe for the welfare of the cities.
Article Four. - League of Provinces
provinces to be known as the League of Provinces for the primary purpose
of ventilating, articulating and crystallizing issues affecting provincial and
metropolitan political subdivision government administration, and securing,
through proper and legal means, solutions thereto. For this purpose, the
Metropolitan Manila Area and any metropolitan political subdivision shall
be considered as separate provincial units of the league.
SECTION. 503. Representation. - Every province shall be represented in the
league by the provincial governor or in his absence, by the provincial vice-
governor or a sanggunian member duly elected for the purpose by the
members, who shall attend all meetings and participate in the
deliberations of the league.

269
SECTION. 504. Powers, Functions and Duties of the League of Provinces. -
The league of provinces shall:
provinces as a whole;
(b) Promote local autonomy at the provincial level;
(c) Adopt measures for the promotion of the welfare of all provinces
and its officials and employees;
(d) Encourage peoples participation in local government administration
of countrywide development goals;
opportunities for gainful employment within the province;
(f) Give priority to programs designed for the total development of the
provinces in consonance with the policies, programs and projects of
the national government;
necessary assistance of the national government and providing the
welfare of the provinces; and
functions as the league may prescribe for the welfare of the
provinces and metropolitan political subdivisions.
Article Five. - Provisions Common to all Leagues
SECTION. 505. Funding. (a) All leagues shall derive its funds from contributions
of member local government units and from fund-raising projects and
activities without the necessity of securing permits therefor: Provided, That
the proceeds from said fund-raising projects and activities shall be used
primarily to fund the projects for which the said proceeds have been
raised, subject to the pertinent provision of this Code and the pertinent
provisions of the Omnibus Election Code.
(b) All funds of leagues shall be deposited as trust funds with its
treasurer and shall be disbursed in accordance with the board of
director's resolutions, subject to pertinent accounting and auditing

270
rules and regulations: Provided, That the treasurer shall be bonded
in an amount to be determined by the board of directors. The funds
of a chapter shall be deposited as chapter funds and funds of the
national league shall be deposited as national funds.
SECTION. 506. Organizational Structure. - To ensure the effective and efficient
administration, the leagues for municipalities, cities and provinces shall
elect chapter- level and national-level boards of directors and a set of
officers headed by the president. A secretary-general shall be chosen
from among the national league members to manage the day to day
operation and activities of the national league. The board of directors on
the chapter or national level may create such other positions as may be
deemed necessary for the management of the chapters and of the
national league. The national board of directors of the leagues for
municipalities, cities or provinces shall coordinate programs, projects and
activities of chapter and the national-level league.
SECTION. 507.- Constitution and By-laws of the Liga and the Leagues. - All
other matters not herein otherwise provided for affecting the internal
organization of the leagues of local government units shall be governed by
their respective constitution and by-laws which are hereby made
suppletory to the provision of this Chapter: Provided, That said
Constitution and By-laws shall always conform to the provisions of the
Constitution and existing laws.
CHAPTER 2 - LEAGUES AND FEDERATIONS OF LOCAL ELECTIVE
OFFICIALS
SECTION. 508. - Organization - (a) Vice-governor, vice-mayors, sanggunian
members of Barangays, municipalities, component cities, highly-urbanized
cities and provinces, and other elective local officials of local government
units, including those of the Metropolitan Manila area and any
metropolitan political subdivisions, may form their respective leagues or
federation, subject to applicable provisions of this Title and pertinent
provisions of this Code;
(b) Sanggunian members of component cities and municipalities shall
form a provincial federation and elect a board of directors and a set
of officers headed by the president. The duly elected president of
the provincial federation of sanggunian members of component
cities and municipalities shall be an ex-officio member of the
Sangguniang Panlalawigan concerned and shall serve as such only
during his term of office as president of the provincial federation of
sanggunian members of component cities and municipalities, which
in no case shall be beyond the term of office of the Sanggunian
Panlalawigan concerned.

271
SECTION. 509. Constitution and By-laws. - The leagues or federations shall
adopt a Constitution and by-laws which shall govern their internal
organization and operation: Provided, That said Constitution and by-laws
shall always conform to the provision of the Constitution and existing laws.
SECTION. 510. Funding. - The leagues and federations may derive their funds
from contributions of individual league or federation members or from
fund-raising projects or activities. The local government unit concerned
may appropriate funds to support the leagues or federation organized
pursuant to this Section, subject to the availability of funds.

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BOOK IV
MISCELLANEOUS AND FINAL PROVISIONS
TITLE ONE. – PENAL PROVISIONS
SECTION 511. Posting and Publication of Ordinances with Penal Sanctions.
- (a) ordinances with penal sanctions shall be posted at prominent places
in the provincial capitol, city, municipal or Barangay hall, as the case may
be, for a minimum period of three (3) consecutive weeks. Such ordinances
shall also be published in a newspaper of general circulation, where
available, within the territorial jurisdiction of the local government unit
concerned, except in the case of Barangay ordinances. Unless otherwise
provided therein, said ordinances shall take effect on the day following its
publication, or at the end of the period of posting, whichever occurs later.
(b) Any public officer or employee who violates an ordinance may be
meted administrative disciplinary action, without prejudice to the
filing of the appropriate civil or criminal action.
(c) The secretary to the Sanggunian concerned shall transmit official
copies of such ordinances to the chief executive officer of the
Official Gazette within seven (7) days following the approval of the
said ordinance for publication purposes. The Official Gazette may
publish ordinances with penal sanctions for archival and reference
purposes.
SECTION 512. Withholding of Benefits Accorded to Barangay Officials. -
Willful and malicious withholding of any of the benefits accorded to
Barangay officials under Section 393 hereof shall be punished with
suspension or dismissal from office of the official or employee responsible
therefor.
SECTION 513. Failure to Post and Publish the Itemized Monthly Collections
and Disbursements. - Failure by the local treasurer or the local chief
accountant to post the itemized monthly collections and disbursements of
the local government unit concerned within ten (10) days following the end
of every month and for at least two (2) consecutive weeks at prominent
places in the main office building of the local government unit concerned,
its plaza and main street, and to publish said itemization in a newspaper of
general circulation, where available, in the territorial jurisdiction of such
unit, shall be punished by a fine not exceeding Five hundred pesos

273
(Php500.00) or by imprisonment not exceeding one (1) month, or both
such fine and imprisonment, at the discretion of the court.
SECTION 514. Engaging in Prohibited Business Transactions or
Possessing Illegal Pecuniary Interest. - Any local official and any
person or persons dealing with him who violate the prohibitions provided
in Section 89 of Book I hereof, shall be punished with imprisonment for six
months and one day to six years, or a fine of not less than Three thousand
pesos (P=3,000.00) nor more than Ten thousand pesos (P=10,000.00), or
both such imprisonment and fine, at the discretion of the court.
SECTION 515. Refusal or Failure of Any Party or Witness to Appear before
the Lupon or Pangkat. - Refusal or willful failure of any party or witness
to appear before the lupon or pangkat in compliance with a summons
issued pursuant to the provisions on theKatarungang PamBarangay under
Chapter 7, Title One of Book III of this Code may be punished by the city
or municipal court as for indirect contempt of court upon application filed
therewith by the lupon chairman, the pangkat chairman, or by any of the
contending parties. Such refusal or willful failure to appear shall be
reflected in the records of the lupon secretary or in the minutes of the
pangkat secretary and shall bar the complainant who fails to appear, from
seeking judicial recourse for the same cause of action, and the respondent
who refuses to appear, from filing any counterclaim arising out of, or
necessarily connected with the complaint.
A pangkat member who serves as such shall be entitled to an honorarium,
the amount of which is to be determined by the Sanggunian concerned,
subject to the provisions in this Code cited above.
SECTION 516. Penalties for Violation of Tax ordinances. - The Sanggunian of
a local government unit is authorized to prescribe fines or other penalties
for violation of tax ordinances but in no case shall such fines be less than
One thousand pesos (Php1,000.00) nor more than Five thousand pesos
(Php5000.00), nor shall imprisonment be less than one (1) month nor
more than six (6) months. Such fine or other penalty, or both, shall be
imposed at the discretion of the court. The Sangguniang Barangay may
prescribe a fine of not less than One hundred pesos (Php100.00) nor
more than One thousand pesos (Php1,000.00).
SECTION 517. Omission of Property from Assessment or Tax Rolls by
Officers and Other Acts. - Any officer charged with the duty of assessing
real property who willfully fails to assess, or who intentionally omits from
the assessment or tax roll any real property which he knows to be taxable,
or who willfully or negligently underassesses any real property, or who
intentionally violates or fails to perform any duty imposed upon him by law
relating to the assessment of taxable real property shall, upon conviction,

274
be punished by a fine of not less than One thousand pesos (Php1,000.00)
nor more than Five thousand pesos (Php5000.00), or by imprisonment of
not less than one (1) month nor more than six (6) months, or both such
fine and imprisonment, at the discretion of the court.
The same penalty shall be imposed upon any officer charged with the duty
of collecting the tax due on real property who willfully or negligently fails to
collect the tax and institute the necessary proceedings for the collection of
the same.
Any other officer required by this Code to perform acts relating to the
administration of the real property tax or to assist the assessor or
treasurer in such administration, who willfully fails to discharge such duties
shall, upon conviction be punished by a fine of not less than Five hundred
pesos (Php500.00) nor more than Five thousand pesos (Php5000.00) or
imprisonment of not less than one (1) month nor more than six (6) months,
or both such fine and imprisonment, at the discretion of the court.
SECTION 518. Government Agents Delaying Assessment of Real Property
and Assessment Appeals. - Any government official who intentionally
and deliberately delays the assessment of real property or the filing of any
appeal against its assessment shall, upon conviction, be punished by a
fine of not less than Five hundred pesos (Php500.00) nor more than Five
thousand pesos (Php5000.00), or by imprisonment of not less than one (1)
month nor more than six (6) months, or both such fine and imprisonment,
at the discretion of the court.
SECTION 519. Failure to Dispose of Delinquent Real Property at Public
Auction. - The local treasurer concerned who fails to dispose of
delinquent real property at public auction in compliance with the pertinent
provisions of this Code, and any other local government official whose
acts hinder the prompt disposition of delinquent real property at public
auction shall, upon conviction, be subject to a fine of not less than One
thousand pesos (Php1000.00) nor more than Five thousand pesos
(Php5000.00), or imprisonment of not less than one (1) month nor more
than six (6) months, or both such fine and imprisonment, at the discretion
of the court.
SECTION 520. Prohibited Acts Related to the Award of Contracts Under the
Provisions on Credit Financing. - It shall be unlawful for any public
official or employee in the provincial, city, or municipal government, or
their relatives within the fourth civil degree of consanguinity or affinity, to
enter into or have any pecuniary interest in any contract for the
construction, acquisition, operation, or maintenance of any project
awarded pursuant to the provisions of Title Four in Book II hereof, or for
the procurement of any supplies, materials, or equipment of any kind to be

275
used in the said project. Any person convicted for violation of the
provisions of said Title shall be removed from office and shall be
punishable by imprisonment of not less than one (1) month, nor more than
two (2) years, at the discretion of the court, without prejudice to
prosecution under other laws.
TITLE TWO. - PROVISIONS FOR IMPLEMENTATION
SECTION 521. Mandatory Review Every Five Years. - Congress shall
undertake a mandatory review of this Code at least once every five (5)
years and as often as it may deem necessary, with the primary objective
of providing a more responsive and accountable local government
structure.
SECTION 522. Insurance Coverage. - The Government Service Insurance
System (GSIS) shall establish and administer an appropriate system
under which the Punong Barangay, the members of the Sangguniang
Barangay, the Barangay secretary, the Barangay treasurer, and the
members of the Barangay tanod shall enjoy insurance coverage as
provided in this Code and other pertinent laws. For this purpose, the GSIS
is hereby directed to undertake an actuarial study, issue rules and
regulations, determine the premiums payable, and recommend to
Congress the amount of appropriations needed to support the system.
The amount needed for the implementation of the said insurance system
shall be included in the annual General Appropriations Act.
SECTION 523. Personnel Retirement and/or Benefits. - An official or
employee of the national government or local government unit separated
from the service as a result of reorganization effected under this Code
shall, if entitled under the laws then in force, receive the retirement and
other benefits accruing thereunder: Provided, however, That such benefits
shall be given funding priority by the Department of Budget and
Management in the case of national officials and employees, and the local
government unit concerned in the case of local officials and employees.
Where the employee concerned is not eligible for retirement, he shall be
entitled to a gratuity from the national government or the local government
unit concerned, as the case may be, equivalent to an amount not lower
than one (1) month salary for every year of service over and above the
monetary value of the leave credits said employee is entitled to receive
pursuant to existing laws.
SECTION 524. Inventory of Infrastructure and Other Community Facilities. -
(a) Each local government unit shall conduct a periodic inventory of
infrastructure and other community facilities and undertake the
maintenance, repair, improvement, or reconstruction of these facilities

276
through a closer cooperation among the various agencies of the national
government operating within the province, city, or municipality concerned.
(b) No infrastructure or community project within the territorial jurisdiction
of any local government unit shall be undertaken without informing
the local chief executive and the Sanggunian concerned.
SECTION 525. Records and Properties. - All records, equipment, buildings,
facilities, and other properties of any office or body of a local government
unit abolished or reorganized under this Code shall be transferred to the
office or body to which its powers, functions, and responsibilities are
substantially devolved.
TITLE THREE. - TRANSITORY PROVISIONS
SECTION 526. Application of this Code to Local Government Units in the
Autonomous Regions. - This Code shall apply to all provinces, cities,
municipalities and Barangays in the autonomous regions until such time
as the regional government concerned shall have enacted its own local
government code.
SECTION 527. Prior Approval or Clearance on Regular and Recurring
Transactions. - Six (6) months after effectivity of this Code, prior approval
of or clearance from national agencies or offices shall no longer be
required for regular and recurring transactions and activities of local
government units.
SECTION 528. Deconcentration of Requisite Authority and Power. - The
national government shall, six (6) months after the effectivity of this Code,
effect the deconcentration of requisite authority and power to the
appropriate regional offices or field offices of national agencies or offices
whose major functions are not devolved to local government units.
SECTION 529. Tax Ordinances or Revenue Measures. - All existing tax
ordinances or revenue measures of local government units shall continue
to be in force and effect after the effectivity of this Code unless amended
by the Sanggunian concerned, or inconsistent with, or in violation of, the
provisions of this Code.
SECTION 530. Local Water Districts. - All powers, functions, and attributes
granted by Presidential Decree Numbered One hundred ninety-eight (P.D.
No. 198), otherwise known as "The Provincial Water Utility Act of 1973," to
the Local Water Utilities Administration (LWUA) may be devolved in toto to
the existing local water districts should they opt or choose to exercise, in
writing, such powers, functions and attributes: Provided, That all

277
obligations of the local government unit concerned to the LWUA shall first
be settled prior to said devolution.
SECTION 531. Debt Relief for Local Government Units. - (a) Unremitted
national collections and statutory contributions. - All debts owed by local
government units to the national government in unremitted contributions to
the Integrated National Police Fund, the Special Education Fund, and
other statutory contributions as well as in unremitted national government
shares of taxes, charges, and fees collected by the local government
units, are hereby written off in full.
(b) Program loans. - (1) Program loans secured by local government
units which were relent to private persons, natural or juridical, shall
likewise be written off from the books of the local government units
concerned: Provided, however, That the national government
agency tasked with the implementation of these programs shall
continue to collect from the debtors belonging to the private sector
concerned.
(2) Program loans granted to local government units by national
government agencies and which were utilized by the local
units for community development, livelihood, and other
small-scale projects are hereby written off in full.
(c) (c) Settlement of debts due to government financing institutions
(GFIs), government-owned and controlled corporations (GOCCs), and
private utilities. The national government shall assume all debts
incurred or contracted by local government units from GFIs, GOCCs,
and private utilities that are outstanding as of December 31, 1988, in
accordance with the following schemes:
(1) Debts due GFIs. - The national government may buy
outstanding obligations incurred by local government units
from government financing institutions at a discounted rate.
(2) Debts due GOCCs. - The national government may settle
such obligations at discounted rate through offsetting, only to
the extent of the obligations of local governments against the
outstanding advances made by the National Treasury in
behalf of the government-owned and controlled corporations
concerned.
(3) Debts Due Private Utilities. - The national government may
settle these obligations at a discounted rate by offsetting
against the outstanding obligations of such private utilities to
government-owned corporations. GOCCs may in turn offset

278
these obligations against the outstanding advances made by
the National Treasury in their behalf.
In the case of obligations owed by local government units to
private utilities which are not indebted to any GOCC or
national government agency, the national government may
instead buy the obligations of the local government units
from the private utilities at a discounted rate, upon
concurrence by the private utilities concerned.
(d) Limitations. - Obligations to the Home Development and Mutual
Fund (Pag-ibig), Medicare, and those pertaining to premium
contributions and amortization payments of salary and policyloans
to the Government Service Insurance System are excluded from
the coverage of this Section.
(e) Recovery schemes for the national government . - Local
government units shall pay back the national government whatever
amounts were advanced or offset by the national government to
settle their obligations to GFIs, GOCCs, and private utilities. The
national government shall not charge interest or penalties on the
outstanding balance owed by the local government units.
These outstanding obligations shall be restructured and an
amortization schedule prepared, based on the capability of the local
government unit to pay, taking into consideration the amount owed
to the National Government .
The National Government is hereby authorized to deduct from the
quarterly share of each local government unit in the internal
revenue collections an amount to be determined on the basis of the
amortization schedule of the local unit concerned: Provided, That
such amount shall not exceed five percent (5%) of the monthly
internal revenue allotment of the local government unit concerned.
As incentive to debtor-local government units to increase the
efficiency of their fiscal administration, the national government
shall write off the debt of the local government unit concerned at
the rate of five percent (5%) for every one percent (1%) increase in
revenues generated by such local government unit over that of the
preceding year. For this purpose, the annual increase in local
revenue collection shall be computed starting from the year 1988.
(f) Appropriations. - Such amount as may be necessary to implement
the provisions of this Section shall be included in the annual
General Appropriations Act.

279
SECTION 532. Elections for the Sangguniang Kabataan. - (a) The first
elections for the Sangguniang kabataan to be conducted under this Code
shall be held thirty (30) days after the next local elections: Provided, That,
the regular elections for the Sangguniang kabataan shall be held one
hundred twenty (120) days after the Barangay elections thereafter.
(b) The amount pertaining to the ten percent (10%) allocation for the
kabataang Barangay as provided for in Section 103 of Batas
Pambansa Blg. 337 is hereby reappropriated for the purpose of
funding the first elections mentioned above. The balance of said
funds, if there be any after the said elections, shall be administered
by the Presidential Council for Youth Affairs for the purpose of
training the newly elected Sangguniang kabataan officials in the
discharge of their functions.
(c) For the regular elections of the Sangguniang kabataan, funds shall
be taken from the ten percent (10%) of the Barangay funds
reserved for the Sangguniang kabataan, as provided for in Section
328 of this Code.
(d) All seats reserved for the pederasyon ng mga Sangguniang
kabataan in the different Sanggunians shall be deemed vacant until
such time that the Sangguniang kabataan chairmen shall have
been elected and the respective pederasyon presidents have been
selected: Provided, That, elections for the kabataang Barangay
conducted under Batas Pambansa Blg. 337 at any time between
January 1, 1988 and January 1, 1992 shall be considered as the
first elections provided for in this Code. The term of office of the
kabataang Barangay officials elected within the said period shall be
extended correspondingly to coincide with the term of office of
those elected under this Code.
SECTION 533. Formulation of Implementing Rules and Regulations. - (a)
Within one (1) month after the approval of this Code, the President shall
convene the Oversight Committee as herein provided for. The said
Committee shall formulate and issue the appropriate rules and regulations
necessary for the efficient and effective implementation of any and all
provisions of this Code, thereby ensuring compliance with the principles of
local autonomy as defined under the Constitution.
(b) The Committee shall be composed of the following:
(1) The Executive Secretary, who shall be the Chairman;

280
(2) Three (3) members of the Senate to be appointed by the
President of the Senate, to include the Chairman of the
Committee on Local Government;
(3) Three (3) members of the House of Representatives to be
appointed by the Speaker, to include the Chairman of the
Committee on Local Government;
(4) The Cabinet, represented by the following:
(i)
(ii)
(iii)
Secretary of the Interior and Local Government;
Secretary of Finance;
Secretary of Budget and Management; and
(5) One (1) representative from each of the following:
(i)
(ii)
(iii)
(iv)
The League of Provinces;
The League of Cities;
The League of Municipalities; and
The Liga ng mga Barangay.
(c) The Committee shall submit its report and recommendation to the
President within two (2) months after its organization. If the
President fails to act within thirty (30) days from receipt thereof, the
recommendation of the Oversight Committee shall be deemed
approved. Thereafter, the Committee shall supervise the transfer of
such powers and functions mandated under this Code to the local
government units, together with the corresponding personnel,
properties, assets and liabilities of the offices or agencies
concerned, with the least possible disruptions to existing programs
and projects. The Committee shall likewise recommend the
corresponding appropriations necessary to effect the said transfer.
For this purpose, the services of a technical staff shall be enlisted
from among the qualified employees of Congress, the government
offices, and the leagues constituting the Committee.
(d) The funding requirements and the secretariat of the Committee
shall be provided by the Office of the Executive Secretary.
(e) The sum of Five million pesos (P5,000,000), which shall be
charged against the Contingent Fund, is hereby allotted to the
Committee to fund the undertaking of an information campaign on
this Code. The Committee shall formulate the guidelines governing
the conduct of said campaign, and shall determine the national
agencies or offices to be involved for this purpose.

281
TITLE FOUR. - FINAL PROVISIONS
SECTION 534. Repealing Clause. - (a) Batas Pambansa Blg. 337, otherwise
known as the Local Government Code, Executive Order No. 112 (1987),
and Executive Order No. 319 (1988) are hereby repealed.
(b) Presidential Decrees Nos. 684, 1191, 1508 and such other
decrees, orders, instructions, memoranda and issuances related to
or concerning the Barangay are hereby repealed.
(c) The provisions of Sections 2, 3, and 4 of Republic Act No. 1939
regarding hospital fund; Section 3, a (3) and b (2) of Republic Act
No. 5447 regarding the Special Education Fund; Presidential
Decree No. 144 as amended by Presidential Decrees Nos. 559 and
1741; Presidential Decree No. 231 as amended; Presidential
Decree No. 436 as amended by Presidential Decree No. 558; and
Presidential Decrees Nos. 381, 436, 464, 477, 526, 632, 752, and
1136 are hereby repealed and rendered of no force and effect.
(d) Presidential Decree No. 1594 is hereby repealed insofar as it
governs locally-funded projects.
(e) The following provisions are hereby repealed or amended insofar
as they are inconsistent with the provisions of this Code: Sections
2, 16, and 29 of Presidential Decree No. 704; Section 12 of
Presidential Decree No. 87, as amended; Sections 52, 53, 66, 67,
68, 69, 70, 71, 72, 73, and 74 of Presidential Decree No. 463, as
amended; and Section 16 of Presidential Decree No. 972, as
amended, and
(f) All general and special laws, acts, city charters, decrees, executive
orders, proclamations and administrative regulations, or part or
parts thereof which are inconsistent with any of the provisions of
this Code are hereby repealed or modified accordingly.
SECTION 535. Separability Clause. - If, for any reason or reasons, any part or
provision of this Code shall be held to be unconstitutional or invalid, other
parts or provisions hereof which are not affected thereby shall continue to
be in full force and effect.
SECTION 536. Effectivity Clause. - This Code shall take effect on January first,
nineteen hundred ninety-two, unless otherwise provided herein, after its
complete publication in at least one (1) newspaper of general circulation.

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