Income Come In! - Part 2

For income to come in especially for disadvantaged LGUs, something must be done ASAP!

The legal basis of all previous DOF issuances on income classification of LGUs cited EO 249, which was signed in 1987 by then President Aquino, in the exercise of her legislative powers, a few months after the ratification of the 1987 Constitution but prior to the enactment of the 1991 LGCode.

Article 6 (e) of the IRR of RA 7160 states that “The income classification of LGUs shall be updated by DOF within six (6) months from the effectivity of the Code to reflect the changes in the financial position resulting from the increased revenues.”

But then DOF Sec. Cesar Purisima sought clarification from the Department of Justice.  DOJ thus issued Legal Opinion No. 68, s. 2012 which stated that “the Secretary  of Finance has the authority to reclassify, every four years, all provinces, cities (except Quezon City and Manila) and municipalities based on the schedule of their annual income during the last four consecutive calendar years, but his authority with respect to revising or modifying such schedule of income or ‘income ranges’ only extends to recommending such appropriate changes or revisions to the proper authority.”  The DOJ further opined that “the proper authority to modify, revise or amend the applicable provisions of law is the Philippine legislature.”  Hence, Sen. Lacson filed SB 234 to give DOF the authority to do so.

Meantime, based on DOF’s 2015 SRE Reports of PCMs, only 12% of Provinces, 15% of Cities, and 12% of Municipalities have total income that fall under the P400M, P450M and P55M threshold for the 1st class level, respectively.  Despite this, status quo remains.  International, national and inter-local fund transfers and grants still considers the 4th to 6th class LGUs based on already outdated data.  

For income to come in especially for disadvantaged LGUs, something must be done ASAP!

About the Author
Sandra Tablan Paredes is presently the Executive Director of the League of Provinces of the Philippines (LPP) since October, 2016 although she previously served LPP as Director from 1997 to 2004 Sandy helped organize ULAP in 1998 with former Governor Joey Lina and advocated for the LGUs' rightful IRA share, among other league advocacies, programs and projects to help local officials ensure local and fiscal autonomy and good governance. Recently served as concurrent interim Executive Director of ULAP from Jan-March 31, 2017. You can email her at This email address is being protected from spambots. You need JavaScript enabled to view it.
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