LOCAL GOVERNMENT CODE

REPUBLIC ACT NO. 7160 October 10, 1992

AN ACT PROVIDING FOR A LOCAL GOVERNMENT CODE OF 1991
BOOK I
GENERAL PROVISIONS
Title One
BASIC PRINCIPLES
CHAPTER 1.
The Code: Policy and Application
Sec. 1. Title. This Act shall be known and cited as the "Local Government Code of
1991".
Sec. 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, nongovernmental and people's organizations, and other concerned sectors of the
community before any project or program is implemented in their respective
jurisdictions.
Sec. 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;
(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 unit
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;
(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 be 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 programs an 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 contributes to the
continuing improvement of the performance of local government units and the
quality of community life.
Sec. 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.
Sec. 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 presentation 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

Sec. 6. Authority to Create Local Government Units. A local government unit may be
created, divided, merged, abolished, or its boundaries substantially altered 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.
Sec. 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 government 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 determined as the total number of inhabitants within
the territorial jurisdiction of the local government unit concerned; and
(c)
Land Area. It must be contiguous, unless it comprises two (2) 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).
Sec. 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 in this Code: Provided, further, That the income
classification of the original local government unit or units shall not fall below its
current 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.
Sec. 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 7 hereof to Congress
or to the sangguniang 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.
Sec. 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.
Sec. 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, 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 sangguniang 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.
Sec. 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.
Sec. 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, thoroughfares, 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.
(b)
The sanggunians 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, thoroughfares, 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:

(1)
City and municipal barangays, upon recommendation of the sangguniang
barangay concerned;
(2)
City, municipal and barangay roads, avenues, boulevards, thoroughfares, and
bridges;
(3)
City and municipal public elementary, secondary and vocational or technical
schools, post-secondary and other tertiary schools;
(4)
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,
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.
(h)
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.
Sec. 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.
Sec. 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.
Sec. 16.
General Welfare. Every local government unit shall exercise the powers
expressly granted, those necessarily implied therefrom, 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.
Sec. 17.
Basic Services and Facilities. (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 Barangay:
(i)
Agricultural support services which include planting materials distribution
system and operation of farm produce collection and buying stations;
(ii)
Health and social welfare services which include maintenance of barangay
health center and day-care center;
(iii) 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;
(vi) Infrastructure facilities such as multi-purpose hall, multipurpose pavement,
plaza, sports center, and other similar facilities;
(vii) Information and reading center; and
(viii) 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 seedling 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
systems; water and soil resources utilization and conservation 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 forest with an area not exceeding fifty (50) square kilometers;
establishment of tree parks, greenbelts, and similar forest development projects;
(iii) Subject to the provisions of Title Five, Book I of this 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;
(iv) 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 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 other sports facilities and equipment, and other similar facilities;
(viii) 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 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;
(ix) 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
(xii) Sites for police and fire stations and substations and the municipal jail;
(3)
For a Province:
(i)
Agricultural extension and on-site research services and facilities which
include the prevention and control of plant and animal pests and disease; 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;
(ii)
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, 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;
(iv) 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 programs and projects on rebel returnees
and evacuees; relief operations and, population development services;
(vi) Provincial buildings, provincial jails, freedom parks and other public assembly
areas, and other similar facilities;
(vii) 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,
provincial roads and bridges; inter-municipal waterworks, drainage and sewerage,
flood control, and irrigation systems; reclamation projects; and similar facilities;
(viii) Programs and projects for low-cost housing and other mass dwellings, except
those funded by the Social 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) 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;
(xi) Inter-municipal telecommunications services, subject to national policy
guidelines; and
(xii) 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, programs and services 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.
(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)
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.
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.
Sec. 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.
Sec. 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 benefits 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 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.
Sec. 20.
Reclassification of Lands. (a) A city or municipality may, through an
ordinance passed by the sanggunian after conducting public hearing 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 the 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 dominant bases for the future use of land
resources: Provided, That the requirements for food production, human settlements,

and industrial expansion shall be taken into consideration in the preparation of such
plans.
(d)
When 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.
Sec. 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 be 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 ordinance,
temporarily close and regulate the use of any local street, 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.
Sec. 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, no 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.
Sec. 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 of 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.
Sec. 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
Sec. 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.
(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.
Sec. 26.
Duty of National Government Agencies in the Maintenance of
Ecological Balance. It shall be the duty of every national agency or governmentowned 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 cropland, rangeland, or forest cover,
and extinction of animal or plant species, to consult with the local government units,
non-governmental organizations, and other sectors concerned and explain the goals
and objectives of the 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.

Sec. 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

Sec. 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

Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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 Non-governmental Organizations

Sec. 34.
Role of People's and Non-governmental Organizations. Local
government units shall promote the establishment and operation of people's and
non-governmental organizations to become active partners in the pursuit of local
autonomy.
Sec. 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 non-governmental 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, diversity
agriculture, spur rural industrialization, promote ecological balance, and enhance the
economic and social well-being of the people.
Sec. 36.
Assistance to People's and Non-governmental 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 non-governmental organizations for economic, socially-oriented, environmental,
or cultural projects to be implemented within its territorial jurisdiction.
CHAPTER 5.

Local Prequalification, Bids and Awards Committee

Sec. 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 non-governmental organizations that are
represented in the local development council concerned, to be chosen by the
organizations themselves; and
(5)
Any practicing certified public accountant from the 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.
Sec. 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.
Qualifications and Election
Sec. 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
sangguniang 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 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, or 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.
Sec. 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.
Sec. 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 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

sagguniang 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.
Sec. 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.
Sec. 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.
CHAPTER 2.

Vacancies and Succession

Sec. 44.
Permanent Vacancies in the Office 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 the 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.

Sec. 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;
(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 therefore.
(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.
Sec. 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 vicegovernor, 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 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.
Sec. 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 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 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

Sec. 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.
Sec. 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
sangguninag 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.
Sec. 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;
(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.
Sec. 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 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.
Sec. 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 panglungsod, 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.
Sec. 53.
Quorum. (a) A majority of all the members of the sanggunian who have
been elected and qualified shall constitute a quorum to transact 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.
Sec. 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.
Sec. 55.
Veto Power of the Local Chief Executive. (a) The local chief executive
may veto any ordinance of the sanggunian panlalawigan, sangguniang panlungsod, or
sanggunian bayan on the ground that it is ultra vires or prejudicial to the public
welfare, stating his reasons therefor in writing.
(b)
The local chief executive, except the punong barangay, shall have the power to
veto any particular item or items of an appropriations ordinance, and 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.

Sec. 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 resolution, the same shall be presumed
consistent with law and therefore valid.
Sec. 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.
Sec. 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.
Sec. 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 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 and independent component 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

Sec. 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
(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.
Sec. 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.
Sec. 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.
Sec. 63.
Preventive Suspension. (a) Preventive suspension may be imposed:
(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.
Sec. 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.
Sec. 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 his favor through compulsory process
of subpoena or subpoena duces tecum.
Sec. 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.

Sec. 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.
Sec. 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

Sec. 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.
Sec. 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 case 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 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Title Three
HUMAN RESOURCES AND DEVELOPMENT
Sec. 76.
Organization 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.
Sec. 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.
Sec. 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.

Sec. 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.
Sec. 80.
Public Notice of Vacancy; Personnel Selection Board. (a) Whenever a
local 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.
(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 or 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.
Sec. 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.
Sec. 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;
(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 the
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 sanggunian 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 prescribed the manner of acting upon such resignations.

Sec. 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.
Sec. 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.
Sec. 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 and 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.
(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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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 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.
Sec. 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
(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.
Sec. 91.
Statement of Assets and Liabilities. (a) Officials and employees of local
government units shall file sworn statements of assets, liabilities and net worth, 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.
Sec. 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 personnel records file under the custody of the personnel office, division,
or section of the local government unit concerned.
Sec. 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.

Sec. 94.
Appointment of Elective and Appointive Local Officials; Candidates
Who Lost in an 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 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.
Sec. 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.
Sec. 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 fall 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.
Sec. 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 the 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
Sec. 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-chairman; 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 parentsteachers associations, the duly elected representative of the teachers' organizations 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 president of the municipal federation of parent-teacher 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
municipality, 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 cochairman 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.
Sec. 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 of 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
(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.

Sec. 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
the 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.
Sec. 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 the funds of the local school board concerned, subject to existing
accounting and auditing rules and regulations.
Title Five
LOCAL HEALTH BOARDS
Sec. 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 nongovernmental 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 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 advise local health agencies on matters such
as, but not limited to, personnel selection and promotion, bids and awards, grievance
and complaints, personnel discipline, budget review, operations review and similar
functions.

Sec. 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.
Sec. 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.
Sec. 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
Sec. 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.
Sec. 107.
Composition of Local Development Councils. The composition of the
local development council shall be as follows:
(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 non-governmental organizations operating in the city or
municipality, as the case may be, who shall constitute not less thanone-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 non-governmental 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 government unit to assist in the
formulation of their respective development plans and public investment programs.
Sec. 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.
Sec. 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 socio-economic 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.
Sec. 110.
Meetings and Quorum. The local development council shall meet at
least once every six (6) months or as often as may be necessary.
Sec. 111.
Executive Committee. The 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
provincial league of barangays, and a representative of non-governmental
organizations that are represented in the council, as 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 non-governmental
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.
Sec. 112.
Sectoral or Functional Committees. The local development councils
may form sectoral or functional committees to assist them in the performance of their
functions.
Sec. 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 development council may avail
of the services of any non-governmental 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.
Sec. 114.
Relation of Local Development Councils to the Sanggunian and the
Regional Development Council. (a) The policies, programs, and projects proposed by
local development councils shall be submitted to the sanggunian concerned for
appropriate action.
The local development plans approved by their respective sanggunian may be
interpreted 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.
Sec. 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
Sec. 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), as amended, Series of 1988. The local peace and
order councils shall have the same composition and functions as those prescribed by
said executive order.
Title Eight
AUTONOMOUS SPECIAL ECONOMIC ZONES
Sec. 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
Sec. 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 ate 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.
Sec. 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. *
CHAPTER 2.

Local Initiative and Referendum

Sec. 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.
Sec. 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.
Sec. 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.
(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.
Sec. 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.
Sec. 124.
Limitations on Local Initiative. (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
toto 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.
Sec. 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.
Sec. 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 barangays.
The Comelec shall certify and proclaim the results of the said referendum.
Sec. 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.
BOOK II
LOCAL TAXATION AND FISCAL MATTERS

Title One
CHAPTER 1.

General Provisions

Sec. 128.
Scope. The provisions herein shall govern the exercise by provinces,
cities, municipalities, and barangays of their taxing and other revenue-raising
powers.
Sec. 129.
Power to Create Sources 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.
Sec. 130.
Fundamental Principles. The following fundamental principles shall
govern the exercise of the taxing and other revenue-raising powers of local
government units:
(a)
Taxation shall be uniform in each local government unit;
(b)
Taxes, fees, charges and other impositions shall:
(1)
be equitable and based as far as practicable on the taxpayer's ability to pay;
(2)
be levied and collected only for public purposes;
(3)
not be unjust, excessive, oppressive, or confiscatory;
(4)
not be contrary to law, public policy, national economic policy, or in restraint
of trade;
(c)
The collection of local taxes, fees, charges and other impositions shall in no
case be let to any private person;
(d)
The revenue collected pursuant to the provisions of this Code shall inure solely
to the benefit of, and be subject to the disposition by, the local government unit
levying the tax, fee, charge or other imposition unless otherwise specifically provided
herein; and,
(e)
Each local government unit shall, as far as practicable, evolve a progressive
system of taxation.
Sec. 131.
Definition of Terms. When used in this Title, the term:
(a)
"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 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 products for market;
(b)
"Amusement" is a pleasurable diversion and entertainment. It is synonymous
to relaxation, avocation, pastime, or fun;
(c)
"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;
(d)
"Business" means trade or commercial activity regularly engaged in as a means
of livelihood or with a view to profit;
(e)
"Banks and other financial institutions" include non-bank financial
intermediaries, lending investors, finance and investment companies, pawnshops,
money shops, insurance companies, stock markets, stock brokers and dealers in
securities and foreign exchange, as defined under applicable laws, or rules and
regulations thereunder;

(f)
"Capital Investment" is the capital which a person employs 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;
(g)
"Charges" refer to pecuniary liability, as rents or fees against persons or
property;
(h)
"Contractor" includes persons, natural or juridical, not subject to professional
tax under Section 139 of this Code, whose activity consists essentially of the sale of all
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 establishments for planing
or surfacing and recutting of lumber, and sawmills under contract to saw or cut logs
belonging to others; proprietors or operators of dry-cleaning or dyeing
establishments, steam laundries, and 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, milliners 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 newspapers, 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.
(i)
"Corporation" includes partnerships, no matter how created or organized,
joint-stock companies, joint accounts (cuentas en participacion), associations or
insurance companies but does not include general professional partnerships and a
joint venture or consortium 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 partnerships are partnerships 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;
(j)
"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)";

(k)
"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 depends for his profit not upon the labor he
bestows upon his commodities but upon the skill and foresight with which he watches
the market;
(l)
"Fee" means a charge fixed by law or ordinance for the regulation or inspection
of a business or activity;
(m) "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;
(n)
"Gross Sales or Receipts" include the total amount of money or its equivalent
representing the contract price, compensation or service fee, including the amount
charged or materials supplied 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);
(o)
"Manufacturer" includes every person who, by physical or chemical process,
alters the exterior texture or form or inner substance of any raw material or
manufactured or partially manufactured product in such manner as to prepare it for
special use or uses to which it could not have been put in its original condition, or
who by any such process, alters the quality of any such raw material 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 or partially 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 or partially 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;
(p)
"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;
(q)
"Motor Vehicle" means any vehicle propelled by any power other than
muscular power using the public roads, but excluding road rollers, trolley cars, streetsweepers, sprinklers, lawn mowers, bulldozers, graders, forklifts, 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;
(r)
"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 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 their respective
municipalities;

(s)
"Operator" includes the owner, manager, administrator, or any other person
who operates or is responsible for the operation of a business establishment or
undertaking;
(t)
"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;
(u)
"Persons" means every natural or juridical being, susceptible of rights and
obligations or of being the subject of legal relations;
(v)
"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 which 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;
(w)
"Retail" means a sale where the purchaser buys the commodity for his own
consumption, irrespective of the quantity of the commodity sold;
(x)
"Vessel" includes every type of boat, craft, or other artificial contrivance used,
or capable of being used, as a means of transportation on water;
(y)
"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
(z)
"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.
Sec. 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.
Sec. 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:
(a)
Income tax, except when levied on banks and other financial institutions;
(b)
Documentary stamp tax;
(c)
Taxes on estates, inheritance, gifts, legacies and other acquisitions mortis
causa, except as otherwise provided herein;
(d)
Customs duties, registration fees of vessel 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;
(e)
Taxes, fees 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;
(f)
Taxes, fees or charges on agricultural and aquatic products when sold by
marginal farmers or fishermen;
(g)
Taxes on business enterprises certified to by the Board of Investments as
pioneer or non-pioneer for a period of six (6) and four (4) years, respectively from the
date of registration;
(h)
Excise taxes on articles enumerated under the national Internal Revenue Code,
as amended, and taxes, fees or charges on petroleum products;

(i)
Percentage or value-added tax (VAT) on sales, barters or exchanges or similar
transactions on goods or services except as otherwise provided herein;
(j)
Taxes on the gross receipts of transportation 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;
(k)
Taxes on premiums paid by way of reinsurance or retrocession;
(l)
Taxes, fees or charges for the registration of motor vehicles and for the
issuance of all kinds of licenses or permits for the driving thereof, except tricycles;
(m) Taxes, fees, or other charges on Philippine products actually exported, except
as otherwise provided herein;
(n)
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 "Cooperative
Code of the Philippines" respectively; and
(o)
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
Sec. 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.
Sec. 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
the 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 treasurer 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 from the date of the execution of the
deed or from the date of the decedent's death.
Sec. 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 others 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
references shall be exempt from the tax herein imposed.

Sec. 137.
Franchise Tax. Notwithstanding any exemption granted by any law or
other special law, the province may impose a tax on businesses enjoying a franchise,
at the rate not 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 thereon, as provided herein.
Sec. 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:
(1)
Province Thirty percent (30%);
(2)
Component City or Municipality where the sand, gravel, and other quarry
resources are extracted Thirty percent (30%); and
(3)
Barangay where the sand, gravel, and other quarry resources are extracted
Forty percent (40%).
Sec. 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 at 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 fee for the practice of
such profession.
(c)
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.
(d)
The professional tax shall be payable annually, on or before the thirty-first
(31st) day of January. Any person first beginning to practice a profession after the
month 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.
(e)
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.
Sec. 140.
Amusement Tax. (a) The province may levy an amusement tax to be
collected from the proprietors, lessees, or operators of theaters, 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.

(b)
In the case of theaters or 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.
(c)
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.
(d)
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, interest and penalties as it
may deem appropriate.
(e)
The proceeds from the amusement tax shall be shared equally by the province
and the municipality where such amusement places are located.
Sec. 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, or consumers, whether directly or indirectly, within the province in an
amount not exceeding Five hundred pesos (P500.00).
(b)
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.
Article Two

Municipalities

Sec. 142.
Scope of Taxing Powers. Except as otherwise provided in this Code,
municipalities may levy taxes, fees, and charges not otherwise levied by provinces.
Sec. 143.
Tax on Business. The municipality may impose taxes on the following
businesses:
(a)
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 or nature, in accordance with the
following schedule:
With gross sales or receipts for the
preceding calendar year in the amount of:
Less than 10,000.00
P

Amount of Tax
Per Annum

165.00

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

20,000.00 or more but less than 30,000.00

30,000.00 or more but less than 40,000.00
40,000.00 or more but less than 50,000.00
50,000.00 or more but less than 75,000.00
75,000.00 or more but less than 100,000.00
100,000.00 or more but less than 150,000.00
150,000.00 or more but less than 200,000.00
200,000.00 or more but less than300,000.00
300,000.00 or more but less than500,000.00

440.00
660.00
825.00
1,320.00
1,650.00
2,200.00
2,750.00
3,850.00
5,500.00

500,000.00 or more but less than750,000.00 8,000.00

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
2,000,000.00 or more but less than
3,000,000.00
16,500.00
3,000,000.00 or more but less than
4,000,000.00
19,800.00
4,000,000.00 or more but less than
5,000,000.00
23,100.00
5,000,000.00 or more but less than
6,500,000.00
24,375.00
6,000,000.00 or more
at a rate not exceeding
a half percent
(37 1/2)of one percent (1%)

thirty-seven and

(b)
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 10,00.00 18.00

P

1,000.00 or more but less than

2,000.00 or more but less than
3,000.00 or more but less than
4,000.00 or more but less than
5,000.00 or more but less than
6,000.00 or more but less than
7,000.00 or more but less than
8,000.00 or more but less than
10,000.00 or more but less than
15,000.00 or more but less than

2,000.00
3,000.00
4,000.00
5,000.00
6,000.00
7,000.00
8,000.00
10,000.00
15,000.00
20,000.00

20,000.00 or more but less than 30,000.00

30,000.00 or more but less than 40,000.00
40,000.00 or more but less than 50,000.00
50,000.00 or more but less than 75,000.00
75,000.00 or more but less than 100,000.00
100,000.00 or more but less than 150,000.00
150,000.00 or more but less than 200,000.00
200,000.00 or more but less than300,000.00
300,000.00 or more but less than500,000.00

33.00
50.00
72.00
100.00
121.00
143.00
165.00
187.00
220.00
275.00
330.00
440.00
660.00
990.00
1,320.00
1,870.00
2,420.00
3,300.00
4,400.00

500,000.00 or more but less than750,000.00 6,600.00

750,000.00 or more but less than 1,000,000.00

8,800.00

1,000,000.00 or more but less than

2,000,000.00
2,000,000.00 or more
at a rate not

10,000.00

exceeding
fifty percent
(50 %) of one

percent (1%)

(c)
On exporters, and on manufacturers , millers, producers, wholesalers,
distributors, dealers or retailers of essential commodities enumerated hereunder at a
rate not exceeding one-half (1/2) of the rates prescribed under subsection (a), (b) and
(d) of this Section:

(1)
Rice and corn;
(2)
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;
(3)
Cooking oil and cooking gas;
(4)
Laundry soap, detergents, and medicine;
(5)
Agricultural implements, equipment and post-harvest facilities, fertilizers,
pesticides, insecticides and other farm inputs;
(6)
Poultry feeds and other animal feeds;
(7)
School supplies; and
(8)
Cement.
(d)
On retailers.
With gross sales or receipts
for the preceding calendar year of:
P400,000.00 or less
more than P400,000.00

Rate of Tax
Per Annum
2%
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 cities, and
Thirty thousand pesos (P30,000.00) 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 Amount of Tax
preceding calendar year in the amount of:
Per Annum
Less than P5,000.00
P

27.50

5,000.00 or more but less than 10,000.00

10,000.00 or more but less than 15,000.00
15,000.00 or more but less than 20,000.00
20,000.00 or more but less than 30,000.00
30,000.00 or more but less than 40,000.00
40,000.00 or more but less than 50,000.00
50,000.00 or more but less than 75,000.00
75,000.00 or more but less than 100,000.00
100,000.00 or more but less than 150,000.00

61.60
104.50
165.00
275.00
385.00
550.00
880.00
1,320.00
1,980.00

150,000.00 or more but less than 200,000.00 2,640.00

200,000.00 or more but less than250,000.00 3,630.00
250,000.00 or more but less than 300,000.00 4,620.00
300,000.00 or more but less than400,000.00 6,160.00
400,000.00 or more but less than
500,000.00 8,250.00
500,000.00 or more but less than750,000.00 9,250.00
750,000.00 or more but less than 1,000,000.00
10,250.00
1,000,000.00 or more but less than
2,000,000.00
2,000,000.00 or more
at a rate not

11,500.00

exceeding
fifty (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 exchange or
sale of property, insurance premium.
(g)
On peddlers engaged in the sale of any merchandise or article of commerce, at
a rate not exceeding Fifty pesos (P50.00) per peddler annually.
(h)
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.
Sec. 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.
Sec. 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 be less than
the tax due on said gross sales or receipts of the current year, the difference shall be
paid before the business is considered officially retired.
Sec. 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 case 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.
Sec. 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.
Sec. 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 therefor
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 therefor is filed in court, upon
payment of a compromise penalty of not less than Two hundred pesos (P200.00).

Sec. 149.
Fishery Rentals, Fees and Charges. (a) Municipalities shall have the
exclusive authority to grant fishery privileges in the municipal waters and impose
rentals, fees or charges therefor in accordance with the provisions of this Section.
(b)
The sangguniang bayan may:
(1)
Grant fishery privileges to erect fish corrals, oyster, mussel 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 kawagkawag 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 licenses 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 poisonous substances, electricity, muroami, and other deleterious methods of fishing and prescribe a criminal penalty
therefor 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.
Sec. 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 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 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:
(1)
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
(2)
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 cases 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%) sales allocation 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 volumes of 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 plantation is
located.
Article Three.

Cities

Sec. 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

Sec. 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 connection 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)
(1)
(2)
(3)

Other Fees and Charges. The barangay may levy reasonable fees and charges:
On commercial breeding of fighting cocks, cockfights and cockpits;
On places of recreation which charge admission fees; and
On billboards, signboards, neon signs, and outdoor advertisements.

Article Five.

Common Revenue-Raising Powers

Sec. 153.
Service Fees and Charges. Local government units may impose and
collect such reasonable fees and charges for services rendered.
Sec. 154.
Pubic Utility Charges. Local government units may fix the rates for the
operation of public utilities owned, operated and maintained by them within their
jurisdiction.
Sec. 155.
Toll Fees or 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

Sec. 156.
Community Tax. Cities or municipalities may levy a community tax in
accordance with the provisions of this Article.
Sec. 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 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.
Sec. 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 in 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 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.
Sec. 159.
Exemptions. 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.
Sec. 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.
Sec. 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 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 Philippines 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)
Corporations 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.
Sec. 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).
Sec. 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,
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.
(b)
When, through its authorized officers, any corporation subject to the
community tax receives any license, certificate or permit from any public authority,
pays any 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.
Sec. 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 of 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.
CHAPTER 3.

Collection of Taxes

Sec. 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.
Sec. 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.
Sec. 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 for payment of such taxes, fees, or charges
without surcharges or penalties, but only for a period not exceeding six (6) months.
Sec. 168.
Surcharges and Penalties on Unpaid Taxes, Fees, or Charges. The
sanggunian may impose a surcharge not exceeding twenty-five (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.
Sec. 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.
Sec. 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.
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.
Sec. 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 deputies duly authorized in writing,
examine the books, accounts, and other pertinent records of any 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 taxpayer 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

Sec. 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.
Sec. 173.
Local Government's Lien. Local taxes, fees, charges and other revenues
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 to 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.
Sec. 174.
Civil Remedies. The civil remedies for the collection of local taxes, fees,
or charges, and related surcharges and interest resulting from delinquency shall be:
(a)
By administrative action through distraint of goods, chattels, or effects, and
other personal property 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 simultaneously at the
discretion of the local government unit concerned.
Sec. 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 left 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 three (3) public and conspicuous places in the territory of the local
government unit where the distraint is made, 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 consummation of 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 shall 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 canceled.
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, is collected.
Sec. 176.
Levy on Real Property. After the expiration of the time required to pay
the delinquent tax, fee, or charge, real property may be levied on before,
simultaneously, or after the distraint of personal property belonging 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 Register 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.

Sec. 177.
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 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.
Sec. 178.
Advertisement and Sale. Within thirty (30) days after levy, the local
treasurer shall 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 they 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 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 t0his 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.
Sec. 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.

Sec. 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, and penalties. The deed shall succinctly recite
all the proceedings upon which the validity of the sale depends.
Sec. 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 on the local government unit concerned.
Sec. 182.
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.
Sec. 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.
Sec. 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.
Sec. 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:
(a)
Tools and 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 (P10,000.00);
(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
(P10,000.00), 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

Sec. 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.
Sec. 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 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.
Sec. 188.
Publication of Tax Ordinances and Revenue Measures. Within (10)
days after their approval, certified true copies of all provincial, city, and municipal tax
ordinances or revenue measures 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.
Sec. 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.
Sec. 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.
Sec. 191.
Authority of Local Government Units to Adjust Rates of Tax
Ordinances. Local government 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.
Sec. 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.
Sec. 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, 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

Sec. 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 assessment by administrative 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 suspended for the time during which:
(1)
The treasurer is legally prevented from making the assessment or 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.
Sec. 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 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-day period prescribed herein within which to appeal with the court of
competent jurisdiction otherwise the assessment becomes conclusive and
unappealable.
Sec. 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 Two
REAL PROPERTY TAXATION
CHAPTER 1.
General Provisions
Sec. 197.
Scope. This Title shall govern the administration, appraisal,
assessment, levy and collection of real property tax.
Sec. 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.
Sec. 199.
Definitions of Terms. When used in this Title, the term:
(a)
"Acquisition Cost" for newly-acquired machinery not yet depreciated and
appraised within the 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 utilized 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;
(e)
"Appraisal" is the act or process of determining the value of property as of a
specified 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 taxation value of 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 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, appliances or apparatus which may or may not be attached,
permanently or temporarily, to the real property. It includes the physical facilities for
production, the 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.
Sec. 200.
Administration of the Real Property Tax. The provinces and cities,
including the municipalities within the Metropolitan Manila Area, shall be primarily
responsible for the proper, efficient and effective administration of the real property
tax.
CHAPTER 2.

Appraisal and Assessment of Real Property

Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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 provision of this Title. No oath shall be required of a declaration thus made
by the provincial, city or municipal assessor.

Sec. 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, orco-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 assessed in the same manner as that of an individual.
(d)
Real property owned by the Republic of the Philippines, its 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.
Sec. 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,
articles 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.
Sec. 207.
Real Property Identification System. All declarations of real property
made under the provisions of this Title shall be kept and filed under a uniform
classification system to be established by the provincial, city or municipal assessor.
Sec. 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.
Sec. 209.
Duty of Registrar of Deeds to Appraise 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, their 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.
Sec. 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.
Sec. 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 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, or the Housing and
Land Use Regulatory Board, as the case may be.
Sec. 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.
Sec. 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.
Sec. 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 recommendation within ninety (90) days
from receipt thereof.
Sec. 215.
Classes of Real Property for Assessment Purposes. For purposes of
assessment, real property shall be classified as residential, agricultural, commercial,
industrial, mineral, timberland or special.
The city or municipality within the Metropolitan Manila Area, through their
respective sanggunian, shall have the power to classify lands as residential,
agricultural, commercial, industrial, mineral, timberland, or special in accordance
with their zoning ordinances.
Sec. 216.
Special Classes of Real Property. All lands, buildings, and other
improvements thereon 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.
Sec. 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.
Sec. 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)
On Lands:
Class Assessment Levels
Residential
Agricultural
Commercial
Industrial
Mineral
Timberland
(b)
(1)

20%
40%
50%
50%
50%
20%

On Buildings and Other Structures:

Residential
Fair market Value
Over

(2)

Not Over

175,000.00

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
2,000,000.00
5,000,000.00
5,000,000.00
10,000,000.00
10,000,000.00
60%

(3)

0%

Agricultural

Fair Market Value

Over Not Over

Assessment Levels

Assessment Levels

300,000.00 25%

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
2,000,000.00
50%
Commercial/Industrial

Fair Market Value

45%

35%
40%
50%

Over Not Over

P
P

(4)

Assessment Levels

300,000.00 30%

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
2,000,000.00
5,000,000.00
5,000,000.00
10,000,000.00
10,000,000.00
80%

60%
70%
75%

Timberland

Fair Market Value

Over Not Over
P
P

(c)

Assessment Levels

300,000.00 45%

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
2,000,000.00
70%

65%

On Machineries
Class Assessment Levels

Agricultural
Residential
Commercial
Industrial

40%
50%
80%
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 districts10%
Government-owned or
controlled corporations
engaged in the supply
and distribution of
water and/or generation
and transmission
of electric power
10%
Sec. 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.
Sec. 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.
Sec. 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 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 225.
Depreciation Allowance for Machinery. For purposes of assessment, a
depreciation 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, or reproduction cost for so long as the machinery is useful and
in operation.

CHAPTER 3.

Assessment Appeals

Sec. 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 provincial 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.
Sec. 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.
(c)
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. In the absence of the Registrar of
Deeds, or the provincial or city prosecutor, or the provincial or city engineer, or the
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.
Sec. 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, 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.
Sec. 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.
Sec. 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 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 pursuant 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 of Assessment Appeals, in the performance of its powers and
duties, may establish 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.
Sec. 231.
Effect of Appeal on the Payment of Real Property Tax. Appeal on
assessments 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

Sec. 232.
Power to Levy Real Property Tax. A province or city or a municipality
within the Metropolitan Manila Area my levy an annual ad valorem tax on real
property such as land, building, machinery, and other improvement not hereinafter
specifically exempted.
Sec. 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.
Sec. 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 equipment used for pollution control and environmental
protection.
Except as provided 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

Sec. 235.
Additional Levy on Real Property for the Special Education Fund (SEF).
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 property tax. The proceeds thereof shall
exclusively accrue to the Special Education Fund (SEF).
Sec. 236.
Additional Ad Valorem Tax on Idle Lands. A province or city, or a
municipality within 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.
Sec. 237.
Idle Lands, Coverage. For purposes of real property taxation, idle lands
shall include 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.

Sec. 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.
Sec. 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.
Sec. 240.
Special Levy by Local Government Units. A province, city or
municipality may impose 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.
Sec. 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.
Sec. 242.
Publication of Proposed Ordinance Imposing a Special Levy. Before the
enactment of an ordinance 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.
Sec. 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.
Sec. 244.
Taxpayer's Remedies Against Special Levy. Any owner of real property
affected by 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.
Sec. 245.
Accrual of Special Levy. The special levy shall accrue on the first day of
the quarter next following the effectivity of the ordinance imposing such levy.

CHAPTER 6.

Collection of Real Property Tax

Sec. 246.
Date of Accrual of Tax. The real property tax for any year shall accrue
on the first (1st) 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.
Sec. 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.
Sec. 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.
Sec. 249.
Notice of Time for Collection of Tax. The city or municipal treasurer
shall, on or before the thirty-first day of January each year, in the case of the basic
real property tax and the additional tax for the (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.
Sec. 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 the SEF due thereon without interest in four (4) equal
installments: the first installment to be due and payable on or before the thirty-first
(31st) of March; the second installment, on or before the thirtieth (30th) of June; the
third installment, on or before the thirtieth (30th) of September; and the last
installment on or before the thirty-first (31st) of December, 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.
Sec. 251.
Tax Discount for Advanced Prompt Payment. If the basic real property
tax and the additional tax accruing to the 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.
Sec. 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 thesixty-day period
prescribed in subparagraph (a), the taxpayer may avail of the remedies as provided
for in Chapter 3, Title Two, Book II of this Code.
Sec. 253.
Repayment of Excessive Collections. When an assessment of basic real
property tax, or any other tax levied under this Title, is found 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, Title Two,
Book II of this Code.
Sec. 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 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 Two, 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.
Sec. 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.
Sec. 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 Title, the local
government unit concerned may avail of the remedies by administrative action thru
levy on real property or by judicial action.
Sec. 257.
Local Government's Lien. The basic real property tax and any other tax
levied under this Title constitute 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.

Sec. 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, 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 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.
Sec. 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.
Sec. 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 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 through the remedies provided for in this Title,
including the expenses of advertisement and sale.
Sec. 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 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.
Sec. 262.
Final Deed to Purchaser. In case the owner or person having legal
interest therein 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.
Sec. 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.
Sec. 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.
Sec. 265.
Further Distraint or Levy. Levy may be repeated if necessary until the
full amount due, including all expenses, is collected.
Sec. 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 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.

Sec. 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.
Sec. 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.
Sec. 269.
Treasurer to Certify Delinquencies Remaining Uncollected. The
provincial, city or municipal treasurer or his deputy 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 noncollection or non-payment, and shall submit the same to the sanggunian concerned
on or before the thirty-first (31st) of December 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.
Sec. 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:
(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

Sec. 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)
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)
Barangays 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;
(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;
and
(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.
Sec. 272.
Application of Proceeds of the Additional One Percent SEF Tax. The
proceeds from the additional one percent (1%) tax on real property accruing to the
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.
Sec. 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.
Sec. 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.
CHAPTER 8.

Special Provisions

Sec. 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 assessment 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.

Sec. 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.
Sec. 277.
Condonation or Reduction of Tax by the President of the Philippines.
The President 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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 Three
SHARES OF LOCAL GOVERNMENT UNITS
IN THE PROCEEDS OF NATIONAL TAXES
CHAPTER 1.
Allotment of Internal Revenue
Sec. 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 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.
Sec. 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
(P80,000.00) 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)
(2)

Population Forty percent (40%); and

Equal Sharing Sixty percent (60%)

(b)

On the second year:

(1)
(2)

Population Fifty percent (50%); and

Equal Sharing Fifty percent (50%)

(c)

On the third year and thereafter:

(1)
(2)

Population Sixty percent (60%); and

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.
Sec. 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.
Sec. 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.

Sec. 288.
Rules and Regulations. The Secretary of Finance, in consultation with
the Secretary 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
Sec. 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.
Sec. 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 in the
utilization and development of the national wealth within their territorial
jurisdiction.
Sec. 291.
Share of the Local Governments from any Government Agency or
Government-Owned or 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.
Sec. 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)
(2)
(3)

Province Twenty percent (20%);

Component City/Municipality Forty-five percent (45%); and
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)
(2)

Population Seventy percent (70%); and

Land area Thirty percent (30%).

(b)
Where the natural resources are located in a highly urbanized or independent
component city:
(1)
(2)

City Sixty-five percent (65%); and

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.
Sec. 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.
Sec. 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 Four
CREDIT FINANCING
Sec. 295.
Scope. This Title shall govern the power of local government units to
create indebtedness and to enter into credit and other financial transactions.
Sec. 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.
Sec. 297.
Loans, Credits, and Other Forms of Indebtedness of Local Government
Units. (a) A local government unit may contract loans, credits, and other forms of
indebtedness with any government or domestic private bank and other lending
institutions to finance the construction, installation, 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 institution 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 and 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.
Sec. 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.
Sec. 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.
Sec. 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 sanggunians, jointly
or severally contract loans, credits, and other forms of indebtedness for purposes
mutually beneficial to them.
Sec. 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 partly 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.
Sec. 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 pre-qualified 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 general or local circulation
and in conspicuous and accessible public places. Local projects under the buildoperate-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 projects, 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-1) hereof.
In the case of a build-operate-and-transfer agreement, the 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.
(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, as the case may be, not 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.
In the case of a build-operate-and-transfer agreement, the 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.
In the case of a build-operate-and-transfer agreement, the 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 determine their legality, validity,
enforceability and correctness of form.
Sec. 303.
Remedies and Sanctions. Local government unit 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
Sec. 403.
Scope. This Title shall govern the conduct and management of financial
affairs, transactions, and operations of provinces, cities, municipalities, and
barangays.
Sec. 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;
(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.
Sec. 306.
Definitions of Terms. 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;
(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" refer 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 project, 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 shall 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" refer 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 government unit concerned;
(k)
"Personal Services" refer 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" refer 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, 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, more or less regularly
every year.
CHAPTER 2.
Local and Other Special Funds
Article One.
Receipts, Safekeeping
and Disposition of Local Funds
Sec. 307.
Remittance of Government Monies to the Local Treasury. Officers of
local government 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.
Sec. 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.
Sec. 309.
Special Funds. There shall be maintained in every provincial, city or
municipal treasury the following special funds:
(a)
Special Education Fund which shall consist of the respective shares of
provinces, cities, municipalities 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 which 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.
Sec. 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 administration under such rules and regulations as the
Commission on Audit may prescribe.
Sec. 311.
Depository Accounts. Local treasurers shall maintain depository
accounts in the name of their respective local government units with banks,
preferably government-owned, located in or nearest to their respective areas or
jurisdiction. Earnings of each depository account shall accrue exclusively thereto.
Sec. 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

Sec. 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.
CHAPTER 3.
Article One.

Budgeting
Local Government Budgets

Sec. 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
pursuit 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)
The actual income and expenditures during the immediately preceding year;
(ii)
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;
(iii) 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 revenueraising proposals;
(iv) 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;
(vi) Summary statement of all statutory and contractual obligations due; and
(vii) 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.
Sec. 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.
Sec. 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 outlay 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;
(g)
Assist the sanggunian concerned in the analysis and review of annual regular
and supplemental 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.
Sec. 317.
Submission of Budget Proposals by Heads or 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 guidelines 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 starting 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, 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) preceding and current fiscal years.
Sec. 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 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.

Sec. 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.
Sec. 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 therefor shall be vested primarily in the local chief executive
concerned.
Sec. 321.
Changes in the Annual Budget. All budgetary proposals shall be
included and considered in the budget preparation process. After the local chief
executive concerned shall have submitted the executive budget to the 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 in a state of
calamity by the President. 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 to by the local chief executive, and the various items of
appropriations affected and the reasons for the change.
Sec. 322.
Reversion of Unexpended Balances of Appropriations, Continuing
Appropriations. Unexpended balances of appropriations authorized in the annual
appropriations ordinance shall revert to the unappropriated surplus of the general
funds 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.
Sec. 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.

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 non-recurring 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.
Sec. 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 provided in amounts of not less than One thousand pesos
(P1,000.00) 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 unforseen 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 in a state of calamity by the President.
Sec. 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 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.
Sec. 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 supplemental appropriations of provinces, highlyurbanized cities, independent component cities, and municipalities within the
Metropolitan Manila in accordance with the immediately succeeding Section.
Sec. 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.
Sec. 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 Budget
Sec. 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 governmentowned, 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.

Sec. 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.
Sec. 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.
Sec. 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.
Sec. 333.
Review of the Barangay Budget. (a) Within ten (10) days 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 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.
Sec. 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 (P1,000.00)
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 COA 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 COA shall prescribe and put into effect
simplified procedures for barangay finances within six (6) months following the
effectivity of this Code.
CHAPTER 4. Expenditures, Disbursements,
Accounting and Accountability
Sec. 335.
Prohibitions Against Expenditures for Religious or Private Purposes.
No public money or property shall be appropriated or applied for religious or private
purposes.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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 COA may prescribe.
Sec. 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 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.

Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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 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 shall be fully
responsible therefor.
Sec. 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.
Sec. 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 COA. In the case of the year-end statement of accounts, the period shall be sixty
(60) days after the thirty-first (31st) of December.

Sec. 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 regulations as the COA may prescribe.
Provincial, city, and municipal auditors shall certify the balances arising in the
accounts settled by them to the Chairman of the COA 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.
Sec. 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 COA 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 and notify the COA, 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 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.
Sec. 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.
Sec. 350.
Accounting for Obligations. All lawful expenditures and obligations
incurred during a fiscal year shall be taken up in the accounts of that year.
Sec. 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.
Sec. 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 the 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.
Sec. 353.
The Official Fiscal Year. The official fiscal year of local government
units shall be the period beginning with the first (1st) day of January and ending with
the thirty-first (31st) day of December of the same year.
Sec. 354.
Administrative Issuances; Budget Operations Manual. The Secretary of
Budget and Management jointly with the Chairman of the COA 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.
Title Six
PROPERTY AND SUPPLY MANAGEMENT
IN THE LOCAL GOVERNMENT UNITS

Sec. 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.
Sec. 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.
Sec. 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" include 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.
Sec. 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,
as the case may be, for any office or department of a local government unit only upon
written requisition as hereinafter provided.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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 fifty thousand

pesos (P150,000.00)
Third and Fourth Class
One hundred thousand pesos
(P100,000.00)
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)
Sec. 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;
(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 availability 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.
Sec. 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;
(4)
The unit price and the total contract price;
(5)
A certification of the provincial or city general services of 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.
Sec. 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 shall be
conducted to obtain the lowest price for the quality of the said supplies.
Sec. 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 sub-dealers selling at lower prices; and
(b) That no suitable substitutes of substantially the same quality are available at
lower prices.
Sec. 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.
Sec. 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
political or employee responsible therefor.
Sec. 374.
Establishment of an Archival System. Every local government unit shall
provide for the establishment of 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.
Sec. 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 require 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.
(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.
Sec. 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.
Sec. 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 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.
Sec. 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 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 COA, to the exercised only if the loss is

not in excess of Fifty thousand pesos (P50,000.00). 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 COA for his appropriate action.
Sec. 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 COA 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
(P100,000.00) in the case of provinces and cities, and Fifty thousand pesos
(P50,000.00) 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.
Sec. 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 COA or its duly authorized representative
when the acquisition or transfer cost of the property exceeds Fifty thousand pesos
(P50,000.00) in the case of provinces and cities, and Twenty-five thousand pesos
(P25,000.00) in the case of municipalities and barangays.
In case of real property, the disposal shall be subject to the approval of the COA
regardless of the value or cost involved.
Sec. 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 or another local government unit at an appraised valuation determined
by the local Committee on Awards. Such transfer shall be 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.
Sec. 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.
Sec. 383.
Implementing Rules and Regulations. The Chairman of the COA 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
CHAPTER 1. Role and Creation of the Barangay
Sec. 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 views of the people may be expressed, crystallized and considered, and
where disputes may be amicably settled.
Sec. 385.
Manner of Creation. A barangay may be created, divided, merged,
abolished, or its boundary substantially 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 local
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 panlalawigan, the recommendation of the
sangguniang bayan concerned shall be necessary.
Sec. 386.
Requisites for Creation. (a) A barangay may be 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 comprises two (2) or more islands.
(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
Sec. 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.
Sec. 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
Sec. 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.
(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:
(1)
Enforce all laws and ordinances which are applicable within the barangay;
(2)
Negotiate, enter into, and sign contracts for and in behalf of the barangay,
upon authorization of the sangguniang barangay;
(3)
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;
(4)
Call and preside over the sessions of the sangguniang barangay and the
barangay assembly, and vote only to break a tie;
(5)
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;
(6)
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;
(7)
In coordination with the barangay development council prepare the annual
executive and supplemental budgets of the barangay;
(8)
Approve vouchers relating to the disbursement of barangay funds;
(9)
Enforce laws and regulations relating to pollution control and protection of the
environment;
(10) Administer the operation of the katarungang pambarangay in accordance with
the provisions of this Code;
(11) Exercise general supervision over the activities of the sangguniang kabataan;
(12) Ensure the delivery of basic services as mandated under Section 17 of this
Code;
(13) 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;
(14) Promote the general welfare of the barangay; and
(15) 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
Sec. 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.
Sec. 391.
Powers, Duties, and Functions. (a) The sangguniang barangay, as the
legislative body of the barangay, shall:

(1)
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;
(2)
Enact tax and revenue ordinances, subject to the limitations imposed in this
Code;
(3)
Enact annual and supplemental budgets in accordance with the provisions of
this Code;
(4)
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;
(5)
Submit to the sangguniang panlungsod or sangguniang bayan such
suggestions or recommendations as it may see fit for the improvement of the
barangay or for the welfare of the inhabitants thereof;
(6)
Assist in the establishment, organization, and promotion of cooperative
enterprises that will improve the economic condition and well-being of the residents;
(7)
Regulate the use of multi-purpose halls, multi-purpose 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;
(8)
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;
(9)
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;
(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 funds 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 fundraising activity was undertaken;

(12) Authorize the punong barangay to enter into contracts in behalf of the
barangay, subject to the provisions of this Code;
(13) 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;
(14) Prescribe fines in amounts not exceeding One thousand pesos (P1,000.00) for
violation of barangay ordinances;
(15) Provide for the administrative needs of the lupong tagapamayapa and the
pangkat ng tagapagkasundo;
(16) Provide for the organization of community brigades, barangay tanod, or
community service units as may be necessary;
(17) 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;
(18) Adopt measures to prevent and control the proliferation of squatters and
mendicants in the barangay;
(19) 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;
(20) Adopt measures towards the prevention and eradication of drug abuse, child
abuse, and juvenile delinquency;
(21) Initiate the establishment of a barangay high school, whenever feasible, in
accordance with law;
(22) 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;
(23) 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.
Sec. 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.
Sec. 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 (P1,000.00) per month for the punong
barangay and Six hundred pesos (P600.00) 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 funds appropriated by the National Government for the purpose;
(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;
(4)
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
(5)
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.
CHAPTER 5. Appointive Officials
Sec. 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 of affinity.
(d)
The barangay secretary shall:
(1)
Keep custody of all records of the sangguniang barangay and the barangay
assembly meetings;
(2)
Prepare and keep the minutes of all meetings of the sangguniang barangay and
the barangay assembly;
(3)
Prepare a list of members of the barangay assembly, and have the same posted
in conspicuous places within the barangay;
(4)
Assist in the preparation of all necessary forms for the conduct of barangay
elections, initiatives, referenda or plebiscites, in coordination with the Comelec;
(5)
Assist the municipal civil registrar in the registration of births, deaths, and
marriages;
(6)
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;
(7)
Submit a report on the actual number of barangay residents as often as may be
required by the sangguniang barangay; and
(8)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
Sec. 395.
Barangay Treasurer: Appointment, Qualification, 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 (P10,000.00), premiums for which shall be paid by the barangay.
(e)
The barangay treasurer shall:
(1)
Keep custody of barangay funds and properties;
(2)
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;
(3)
Disburse funds in accordance with the financial procedures provided in this
Code;
(4)
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;
(5)
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;
(6)
Certify as to the availability of funds whenever necessary;
(7)
Plan and attend to the rural postal circuit within his jurisdiction; and
(8)
Exercise such other powers and perform such other duties and functions as
may be prescribed by the law or ordinance.
Sec. 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
Sec. 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.
Sec. 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
Sec. 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.
(b)
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.
(c)
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;
(d)
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.
(e)
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
(f)
In barangays where majority of the inhabitants are members of indigenous
cultural communities, local systems of settling disputes through their councils of
datus or elders shall be recognized without prejudice to the applicable provisions of
this Code.
Sec. 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.
Sec. 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.
Sec. 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 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 functions as
may be prescribed by law or ordinance.
Sec. 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.
Sec. 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.
(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.
Sec. 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.
Sec. 406.
Character of Office and Service of Lupon Members. (a) The 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.
Sec. 407.
Legal Advise 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.
Sec. 408.
Subject Matter for Amicable Settlement; Exception Therein. 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:

(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 (P5,000.00);
(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;
(g)
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, non proproi refer the case to
the lupon concerned for amicable settlement.
Sec. 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 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.
Sec. 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
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.
Sec. 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.
Sec. 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 chairman 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 be applied in
settling disputes between members of the cultural communities.
Sec. 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.
Sec. 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 propio or upon request of a

party, exclude the public from the proceedings in the interest of privacy, decency, or
public morals:
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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

Sec. 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.
Sec. 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 of the sangguniang kabataan or in the official barangay
list in the custody of the barangay secretary.
Sec. 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.
Sec. 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; and
(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.
Sec. 427.
Meetings of the Sangguniang Kabataan. The sangguniang kabataan
shall meet regularly once a month on the date, time, and place 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.
Sec. 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.
Sec. 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.
Sec. 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.

Sec. 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;
(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 functions as
may be prescribed by law or ordinance.
Sec. 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.
Sec. 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 the katipunan ng kabataan;
(c)
Disburse funds in accordance with an approved budget of the sangguniang
kabataan;
(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
(f)
Perform such other duties and discharge such other functions as the chairman
of the sangguniang kabataan may direct.
Sec. 434.
Privileges of Sangguniang Kabataan Officials. The sangguniang
kabataan chairman shall have the same privileges enjoyed by other sangguniang
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.
Sec. 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 sangguniang 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.
CHAPTER 9. Pederasyon ng mga Sangguniang
Kabataan
Sec. 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 sangguniang kabataan;
(2)
in cities, panlungsod na pederasyon ng mga sangguniang kabataan;
(3)
in provinces, panlalawigang pederasyon ng mga sangguniang kabataan;
(4)
in special metropolitan political subdivisions, pangmetropolitang pederasyon
ng mga sangguniang 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:
(1)
The panlungsod and pambayang pederasyon shall be composed of the
sangguniang kabataan chairmen of barangays in the city or municipality,
respectively;
(2)
The panlalawigang pederasyon shall be composed of presidents of the
panlungsod and pambayang pederasyon;
(3)
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.
Sec. 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 constitution andby-laws of the
pederasyon in conformity with the provisions of this Code and national policies on
youth.
Sec. 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 anex-officio member of the sangguniang
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

Sec. 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.
Title Two
THE MUNICIPALITY
CHAPTER 1. Role and Creation of the Municipality
Sec. 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.
Sec. 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.
Sec. 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 (P2,500,000.00) 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 nonrecurring 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.
CHAPTER 2. Municipal Officials in General
Sec. 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.
CHAPTER 3. Officials and Offices
Common to All Municipalities
Article One. The municipal mayor
Sec. 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;
(ii)
Direct the formulation of the municipal development plan, with the assistance
of the municipal development council, and upon approval thereof by the sangguniang
bayan, implement the same;
(iii) 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;
(iv) Initiate and propose legislative measures to the sangguniang bayan and, from
time to time as the situation may require, provide such information and data needed
or requested by said sanggunian in the performance of its legislative functions;
(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
provided for in this Code, as well as those he may be authorized by law to appoint;
(vi) Upon authorization by the sangguniang bayan, represent the municipality in
all its business transactions and sign on its behalf all bonds, contracts, and
obligations, and such other documents made pursuant to law or ordinance;
(vii) Carry out such emergency measures as may be necessary during and in the
aftermath of man-made and natural disasters and calamities;
(viii) 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;
(ix) 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 as 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 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;
(xii) 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;
(xiii) 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 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;
(xiv) Act on leave applications of officials and employees appointed by him and the
commutation of the monetary value of leave credits according to law;
(xv) Authorize official trips outside of the municipality of municipal officials and
employees for a period not exceeding thirty (30) days;
(xvi) Call upon any national official or employee stationed in or assigned to the
municipality to advice 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 government unit concerned;

(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;
(xix) 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
(xx) Submit to the provincial governor the following reports; an annual report
containing a summary of all matters pertaining to the management, administration
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
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)
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;
(ii)
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;
(iii) Issue such executive orders as are necessary for the proper enforcement and
execution of laws and ordinances;
(iv) 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;
(vi) Call upon the appropriate law enforcement agencies to suppress disorder, riot,
lawless violence, rebellion or sedition or to apprehend violations of the law when
public interest so requires and the municipal police forces are inadequate to cope
with the situation or the violators;
(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 development and country-wide growth and
progress, and relative thereto, shall:
(i)
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;
(ii)
Prepare and submit to the sanggunian for approval the executive and
supplemental budgets of the municipality for the ensuing calendar years in the
manner provided for under Title Five, Book II of this Code;

(iii) 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;
(iv) 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;
(vii) Adopt adequate measures to safeguard and conserve land, mineral, marine,
forest, and other resources of the municipality;
(viii) Provide efficient and effective property and supply management in the
municipality; and protect the funds, credits, rights and other properties of the
municipality; and
(ix) Institute or cause to be instituted administrative or 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 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
(ii)
Coordinate the implementation of technical services rendered by national and
provincial offices, including public works and infrastructure programs in the
municipality; and
(5)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
(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

Sec. 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;

(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
(5)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
(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

Sec. 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.
Sec. 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 barangay to determine whether these are within the
scope of the prescribed powers of the sanggunian and of the punong barangay;
(ii)
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;
(iii) Approve ordinances imposing a fine not exceeding Two thousand five hundred
pesos (P2,500.00) 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;
(iv) 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;

(vi) 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;
(vii) Subject to the provisions of this Code and pertinent laws, determine the
powers and duties of officials and employees of the municipality;
(viii) Determine the positions and the salaries, wages, allowances and other
emoluments and benefits of officials and employees paid wholly or mainly from
municipal funds and provide for expenditures necessary for the proper conduct of
programs, projects, services, and activities of the municipal government;
(ix) 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 officials or employee designed 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;
(xi) 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 the
municipality, or for other purposes not contrary to law, in order to promote the
general welfare of the municipality and its inhabitants;
(ii)
Subject to the provisions of Book II of this Code and applicable laws and upon
the majority vote of all the 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;
(iii) Subject to the provisions of Book II of this Code and 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;
(iv) Subject to the provisions of Book II of this Code and applicable laws and upon
the majority vote of all the 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;
(vi) Prescribe reasonable limits and restraints on the use of property within the
jurisdiction of the municipality;
(vii) 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;
(viii) Reclassify land within the jurisdiction of the municipality, subject to the
pertinent provisions of this Code;
(ix) Enact integrated zoning ordinances in consonance with the approved
comprehensive land use plan, subject to existing laws, rules and regulations;
established 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 Fire Code;
(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;
(xi) 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 of fry of any species or fish within the municipal waters;
(xii) 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
One, Book II of this Code;
(xiii) Grant loans or provide grants to other local government units or to national,
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) 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;
(ii)
Regulate any business, occupation, or practice of profession or calling which
does not require government examination within the municipality and the conditions
under which the license for said business or practice of profession may be issued or
revoked;
(iii) 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;

(iv) 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;
(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 establishment, operation, and maintenance 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 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;
(ii)
Establish markets, slaughterhouses or animal corrals and authorize the
operation thereof, and regulate the 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) 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;
(vi) 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, or
watershed used in connection with the water service; and regulate the consumption,
use or wastage of water;
(viii) 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 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
property; and regulate the construction and use of private water closets, privies and
other similar structures in buildings and homes;
(ix) 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;
(xi) Establish a scholarship fund for poor but deserving students residing within
the municipality in schools located within its jurisdiction;

(xii) Approve measures and adopt quarantine regulations to prevent the

introduction and spread of diseases;
(xiii) 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;
(xiv) 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 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 sound jail management programs, and appropriate funds
for the subsistence of detainees and convicted prisoners in the municipality;
(xvi) Establish a municipal council whose purpose is the promotion of culture and
the arts, coordinate with government agencies and non-governmental organizations
and, subject to the availability of funds, appropriate funds for the support and
development of the same; and
(xvi) Establish a municipal council for the elder 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
(6)
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 bayan shall receive a minimum monthly
compensation corresponding to Salary Grade twenty-four (24) as prescribed under
R.A. No. 6758 and the implementing guidelines issued pursuant thereto: Provided,
That, in municipalities in 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).
Title Three
THE CITY
CHAPTER 1. Role and Creation of the City
Sec. 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.
Sec. 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 plebiscite to be conducted by the Comelec
in the local government unit or 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.
Sec. 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
(P20,000,000.00) 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.
(c)
The average annual income shall include the income accruing to the general
fund, exclusive of specific funds, transfers, and non-recurring income.
Sec. 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.
Sec. 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
(P50,000,000.00) 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.
Sec. 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
Sec. 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
engineer, a city health officer, a city civil 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:
(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
city 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 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 determined by law or ordinance,
subject to the budgetary limitations 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.
CHAPTER 3. Officials and Offices Common to all Cities
Article One. The City Mayor
Sec. 455.
Chief Executive: Powers, Duties and Compensation. (a) The city mayor,
as the chief executive of the city 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 city and its inhabitants pursuant to Section 16 of this Code, the
city mayor shall:
(1)
Exercise general supervision and control over all programs, projects, services,
and activities of the city government, and in this connection, shall:
(i)
Determine the guidelines of city policies and be responsible to the sangguniang
panlungsod for the program of government;
(ii)
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;
(iii) 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;
(iv) Initiate and propose legislative measures to the 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;
(v)
Appoint all officials and employees whose salaries 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 authorized by law to appoint;
(vi) 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
sangguniang panlungsod or pursuant to law or ordinance;

(vii) Carry out such emergency measures as may be necessary during and in the
aftermath of man-made and natural disasters and calamities;
(viii) 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;
(ix) 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;
(x)
Ensure that all executive officials and employees of 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 highlyurbanized 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 issuances;
(xiii) 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;
(xiv) Act on leave applications of officials and employees appointed by him and the
commutation of the monetary value of their leave credits in accordance with law;
(xv) Authorize official trips of city officials and employees outside of the city for a
period not exceeding thirty (30) days;
(xvi) Call upon any national official or employee stationed 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 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 duties and functions, subject to availability of funds;
(xviii) Solemnize marriages, any provision of law to the contrary notwithstanding;
(xix) 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
(xx) Submit to the provincial governor, in 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 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 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;
(2)
Enforce all laws and ordinances relative to the governance of the city and in
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 city and, in addition to the foregoing, shall:
(i)
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;
(ii)
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;
(ii)
Issue such executive orders for the faithful and appropriate enforcement and
execution of laws and ordinances;
(iv) 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 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;
(vi) 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;
(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 development and countryside growth and
progress and relative thereto, shall:
(i)
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;
(ii)
Prepare and submit to the sanggunian for approval 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;
(iii) 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;
(iv) 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;

(vii) Adopt adequate measures to safeguard and conserve land, mineral, marine,
forest, and other resources of the city;
(viii) Provide efficient and effective property and supply management in the city;
and protect the funds, credits, rights and other properties of the city; and
(ix) Institute or cause to be instituted administrative or 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 city 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 city, and in the case of component cities, of the city and of the
province; and
(ii)
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
(5)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
(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

Sec. 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 expenditures appropriated for the operation of the
sangguniang panlungsod;
(2)
Subject to civil service law, rules and regulations, appoint all officials and
employees of the sangguniang panlungsod, except those whose manner of
appointment is specifically provided in this Code;
(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;
(4)
Exercise the powers and perform the duties and functions of the city mayor in
cases of temporary vacancy as provided for in Section 46, Book I of this Code; and
(5)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
(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

Sec. 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 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 the local elections, one (1) from 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.
Sec. 458.
Powers, Duties, Functions and Compensation. (a) The sangguniang
panlungsod, as the legislative 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:
(1)
Approve ordinances and pass resolutions necessary for an 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;
(ii)
Maintain peace and order by enacting measures to prevent and suppress
lawlessness, disorder, riot, violence, rebellion or sedition and impose penalties for
violation of said ordinances;
(iii) 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;
(iv) 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
in 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 city.
(vi) 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;
(vii) Subject to the provisions of this Code and pertinent laws, determine the
powers and duties of officials and employees of the city;
(viii) Determine the positions and the salaries, wages, allowances and other
emoluments and benefits of officials and employees paid wholly or mainly from city
funds and provide for expenditures necessary for the proper conduct of programs,
projects, services, and activities of the city government;
(ix) 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 city 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 city
government;
(xi) When the finances of the city 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 city;
(xii) 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
(xiii) 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;
(2)
Generate and maximize the use of resources and revenues for the development
plans, program objectives and priorities 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;
(ii)
Subject to the provisions of Book II of this Code and applicable laws and upon
the majority vote of all the members of the sangguniang panlungsod, enact
ordinances levying taxes, fees and charges, prescribing the rates thereof for general
and specific purposes, and granting tax exemptions, incentives or 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;
(iv) Subject to the provisions of Book II of this Code and applicable laws and upon
the majority vote of all the members of the sangguniang panlungsod, 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 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;
(vi) Prescribe reasonable limits and restraints on the use of property within the
jurisdiction of the city;
(vii) 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;
(viii) Reclassify land within the jurisdiction of the city, subject to the pertinent
provisions of this Code;
(ix) 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 the application. Failure to act on the application within the period stated
above shall be deemed as approval thereof;
(xi) 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;
(xii) 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;
(xiii) 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;
(xiv) Regulate the numbering of residential, commercial and other buildings; and
(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:
(i)
Fix and impose reasonable fees and charges for all services rendered by the
city government to private persons or entities;
(ii)
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;
(iii) 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;
(iv) 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 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;
(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 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;
(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 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;
(ii)
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;
(iii) Authorize the establishment, maintenance and operation by the city
government of ferries, wharves, and other structures intended to accelerate
productivity related to marine and seashore or offshore activities;
(iv) Regulate the preparation and sale of meat, poultry, fish, vegetables, fruits,
fresh dairy products, and other food-stuffs 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;
(vi) Regulate traffic on all streets and bridges; prohibit encroachments or obstacles
thereon and, when necessary in the interest of public welfare, authorize the removal
or 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;
(viii) 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 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
property; and regulate the construction and use of private water closets, privies and
other similar structures in buildings and homes;
(ix) 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;
(xi) Establish a scholarship fund for poor but deserving students in schools located
within its jurisdiction or for students residing within the city;
(xii) Approve measures and adopt quarantine regulations to prevent the
introduction and spread of diseases;
(xiii) 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;
(xiv) 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 program, and appropriate funds
for the subsistence of detainees and convicted prisoners in the city;
(xvi) Establish a city council whose purpose is the promotion of culture and the arts,
coordinate with government agencies and non-governmental organizations and,
subject to the availability of funds, appropriate funds for the support and
development of 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
(6)
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 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.
Title Four
THE PROVINCE
CHAPTER 1. Role and Creation of the Province
Sec. 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.
Sec. 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 plebiscite to be conducted by
the Comelec in the local government unit or 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.
Sec. 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 (P20,000,000.00) 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.
(c)
The average annual income shall include the income accruing to the general
fund, exclusive of special funds, trust funds, transfers, and non-recurring income.
Sec. 462.
Existing Subprovinces. Existing sub-provinces are hereby converted
into regular provinces upon approval by a majority of the votes 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 sub-provinces 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
subprovinces 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
Sec. 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 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:
(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
provincial 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 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 determined by law or ordinance,
subject to the budgetary limitations 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.

Sec. 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.
CHAPTER 3. Officials and Offices Common to all Provinces
Article One. The Provincial Governor
Sec. 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.
(b)
For efficient, effective and economical governance the purpose of which is the
general welfare of the province and its inhabitants pursuant to Section 16 of this
Code, the provincial governor shall:
(1)
Exercise general supervision and control over all programs, 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 program of government;
(ii)
Direct the formulation of the provincial development plan, with the assistance
of the provincial development council, and upon approval thereof by the sangguniang
panlalawigan, implement the same;
(iii) 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;
(iv) Initiate and propose legislative measures to the 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;
(v)
Appoint all officials and employees whose salaries 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 authorized by law to appoint;
(vi) Represent the province in all its business transactions and sign in its behalf all
bonds, contracts, and obligations, and such other documents upon authority of the
sangguniang panlalawigan or pursuant to law or ordinance;
(vii) Carry out such emergency measures as may be necessary during and in the
aftermath of man-made and natural disasters and calamities;
(viii) 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;
(ix) 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;
(x)
Ensure that all executive officials and employees of 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;
(xi) 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;
(xiii) 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;
(xiv) Act on leave applications of officials and employees appointed by him and the
commutation of the monetary value of leave credits in accordance with law.
(xv) Authorize official trips of provincial officials and employees outside of the
province for a period not exceeding thirty (30) days;
(xvi) Call upon any national official or employee stationed in or assigned to the
province to advise him on matters affecting the province and to make
recommendations thereon; coordinate with said official or employee 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 province;
(xvii) 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;
(xviii) 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;
(xix) 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
(xx) 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 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;
(2)
Enforce all laws and ordinances relative to the governance 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:
(i)
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;
(ii)
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;

(iii) Issue such executive orders for the faithful and appropriate enforcement and
execution of laws and ordinances;
(iv) Be entitled to carry the necessary firearm within his territorial jurisdiction;
(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;
(vi) 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;
(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 development and country-wide growth and
progress and, relative thereto, shall:
(i)
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;
(ii)
Prepare and submit to the sanggunian for approval the executive and
supplemental budgets of the province for the ensuing calendar year in the manner
provided for under Title Five, Book II of this Code;
(iii) 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;
(iv) 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)
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;
(vi) Provide efficient and effective property and supply management in the
province; and protect the funds, credits, rights, and other properties of the province;
and
(vii) Institute or cause to be instituted administrative or 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 province 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 province and of its component cities and municipalities; and
(ii)
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; and
(5)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.

(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
Sec. 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 expenditures appropriated for the operation
of the sangguniang panlalawigan;
(2)
Subject to civil service law, rules and regulations, appoint all officials and
employees of the sangguniang panlalawigan, except those whose manner of
appointment is specially provided in this Code;
(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;
(4)
Exercise the powers and perform the duties and functions of the governor in
cases of temporary vacancy as provided for in Section 46, Book I of this Code; and
(5)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
(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
Sec. 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
members of municipalities and component cities, 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 the local elections, one (1) from the
agricultural or industrial workers; and one (1) from 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.
Sec. 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 in the proper exercise of the corporate
powers of the province as provided for under Section 22 of this Code, and shall:
(1)
Approve ordinances and pass resolutions necessary for an efficient and
effective provincial government and, in this connection, shall:
(i)
Review all ordinances approved by the sanggunians of component cities and
municipalities and executives 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 prevent and suppress
lawlessness, disorder, riot, violence, rebellion or sedition and impose penalties for the
violation of said ordinances;

(iii) Approve ordinances imposing a fine not exceeding Five thousand pesos
(P5,000.00) or imprisonment not exceeding one (1) year, or both in the discretion of
the court, for the violation of a provincial ordinance;
(iv) 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 aftermath of said disasters and 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 province;
(vi) 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;
(vii) Subject to the provisions of this Code and pertinent laws, determine the
powers and duties of officials and employees of the province;
(viii) Determine the positions and the salaries, wages, allowances and other
emoluments and benefits of officials and employees paid wholly or mainly from
provincial funds and provide for expenditures necessary for the proper conduct of
programs, projects, services, and activities of the provincial government;
(ix) 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 provincial 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
provincial government; and
(xi) When the finances of the provincial government allow, provide for additional
allowances and other benefits to judges, prosecutors, public elementary and high
school teachers, and other national government officials stationed or assigned to the
province;
(2)
Generate and maximize the use of resources and revenues for the development
plans, program objectives and priorities of the province as provided for under Section
18 of this Code, with particular attention to agro-industrial development and countrywide 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;
(ii)
Subject to the provisions of Book II of this Code and applicable laws and upon
the majority vote of all the members of the sangguniang panlalawigan, enact

ordinances levying taxes, fees and charges, prescribing the rates thereof for general
and specific purposes, and granting tax exemptions, incentives or reliefs;
(iii) Subject to the provisions of Book II of this Code and applicable laws and upon
the majority vote of all the 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 applicable laws and upon
the majority vote of all the members of the sangguniang panlalawigan, 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 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;
(vii) 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
(viii) Adopt measures to enhance the full implementation of the national agrarian
reform program in coordination with the Department of Agrarian Reform;
(3)
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:
(i)
Fix and impose reasonable fees and charges for all 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;
(4)
Approve ordinances which shall ensure the efficient and effective delivery of
basic services and facilities as 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;
(ii)
Subject to applicable laws, facilitate or provide for the establishment and
maintenance of waterworks system or district waterworks for supplying water to
inhabitants of component cities and municipalities;
(iii) Subject to the availability of funds and to existing 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 jurisdiction or for students residing within the province;
(v)
Approve measures and adopt quarantine regulations to prevent the
introduction and spread of diseases within its territorial jurisdiction;
(vi) 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;
(viii) Establish a provincial council whose purpose is the promotion of culture and
the arts, coordinate with government agencies and non-governmental organizations
and, subject to the availability of funds, appropriate funds for the support and
development of the same;
(ix) 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 non-governmental agencies and entities to support
the programs and projects of the elderly; and
(5)
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. No. 6758 and the implementing guidelines issued pursuant
thereto.
Title Five
APPOINTIVE LOCAL OFFICIALS COMMON TO ALL
MUNICIPALITIES, CITIES AND PROVINCES
Article One. Secretary to the Sanggunian
Sec. 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 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

Sec. 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 provincial or city 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;
(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 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;
(6)
In the case of the provincial treasurer, exercise technical supervision over all
treasury offices of component cities and municipalities; and
(e)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.

Sec. 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 of the provincial or city 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
Sec. 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 provincial or city assessor,
and three (3) years in the case of the municipal assessor.
The appointment of an assessor shall be mandatory for provincial, city and municipal
governments.
(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;
(5)
Prepare, install and maintain a system of tax mapping, showing graphically all
properties 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 government unit concerned;
(8)
Prepare a schedule of the fair market value for the different classes of real
properties, in accordance with Title Two, 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
(c)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
Sec. 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 provincial or city assistant assessor, and one (1) year in the case of the
city or provincial assistant assessor.
The appointment of an assistant assessor is optional for provincial, city and
municipal governments.
(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 assessments.
Article Four. The Accountant
Sec. 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 government unit
concerned;
(2)
Prepare and submit financial statements to the governor or mayor, as the case
may be, and to the sanggunian concerned;
(3)
Appraise the sanggunian and other local government officials on the financial
condition and operations of the local government unit concerned;
(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
(13) Exercise such other powers and perform such other duties 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
Sec. 475.
Qualifications, Powers and Duties. (a) No person shall be 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 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 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, the 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
(c)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
(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.

Article Six.
The Planning
and Development Coordinator
Sec. 476.
Qualifications, Powers and Duties. (a) No person shall be 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;
(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

Sec. 477.
Qualifications, Powers and Duties. (a) No person shall be 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
(c)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
Article Eight.

The Health Officer

Sec. 478.
Qualifications, Powers and Duties. (a) No person shall be 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 services and shall:
(1)
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;
(ii)
Advise the governor or mayor, as the case may be, and the sanggunian on
matters pertaining to health;
(iii) Execute and enforce all laws, ordinances and regulations relating to public
health;
(iv) 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;
(viii) Coordinate with other government agencies and non-governmental
organizations involved in the promotion and delivery of health services; and

(ix) In the case of the provincial health officer, exercise general supervision over
health officers of component cities and municipalities; and
(5)
Be in the front-line of the delivery of health services, particularly during and in
the aftermath of man-made and natural disasters and calamities; and
(c)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
Article Nine.

The Civil Registrar

Sec. 479.
Qualifications, Powers and Duties. (a) No person shall be 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 grade civil service eligible or its
equivalent. He must have acquired 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 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:
(1)
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 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)
Accept all registerable documents and judicial decrees affecting the civil status
of persons;
(ii)
File, keep and preserve in a secure place the books required by law;
(iii) Transcribe and enter immediately upon receipt all registerable documents and
judicial decrees affecting the civil status of persons in the appropriate civil registry
books;
(iv) 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;
(vi) 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) Coordinate with the National Statistics Office in conducting educational
campaigns for vital registration and assist in the preparation of demographic and
other statistics for the local government unit concerned; and
(3)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
Article Ten.

The Administrator

Sec. 480.
Qualifications, Terms, Powers and Duties. (a) No person shall be
appointed administrator 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 public administration, law, 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 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:
(1)
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 the management and administration-related programs and projects which the
governor or 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 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;
(ii)
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;
(iii) Conduct a continuing organizational development of the local government unit
with the end in view of the instituting effective administrative reforms;
(3)
Be in the front-line 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
(5)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or by ordinance.
Article Eleven.

The Legal Officer

Sec. 481.
Qualifications, Terms, Powers and Duties. (a) No person shall be
appointed legal officer unless he is a citizen of the Philippines, a resident of the local
government concerned, of good moral character, 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 a 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 for legal services and shall:
(1)
Formulate measures for the consideration of the sanggunian 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;
(2)
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 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 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) Render his opinion in writing on any question of law when requested to do so
by the governor, mayor, or sanggunian;
(iv) 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 recommend 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 execute
orders issued by component units;
(4)
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;
(5)
Be in the front-line of protecting human rights and prosecuting any violations
thereof, particularly those which occur during and in the aftermath of man-made or
natural disasters and calamities; and
(6)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
Article Twelve.

The Agriculturist

Sec. 482.
Qualifications, Powers and Duties. (a) No person shall be 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 or 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;

(2)
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 agricultural 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 the foregoing duties and functions, the 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;
(ii)
Conduct or cause to be conducted location-specific agricultural researches and
assist in making available the appropriate technology arising out of and
disseminating information on basic research on crops, preventive and control of plant
diseases and pests, and other agricultural matters which will maximize productivity;
(iii) Assist the governor or mayor, as the case may be, in the establishment and
extension services of demonstration farms or aqua-culture and marine products;
(iv) Enforce rules and regulations relating to agriculture and aqua-culture;
(v)
Coordinate with government agencies and non-governmental organizations
which promote agricultural productivity through appropriate technology compatible
with environmental integrity;
(4)
Be in the front-line of the delivery of basic agricultural services, particularly
those needed for the survival of the inhabitants during and in the aftermath of manmade and natural disasters and calamities;
(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
(c)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
Article Thirteen.
The Social
Welfare and Development Officer
Sec. 483.
Qualifications, Powers and Duties. (a) No person shall be 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 the
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:
(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 endure 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;
(2)
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 social welfare 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 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 and implement appropriate measures to alleviate their problems and
improve their living conditions;
(ii)
Provide relief and appropriate crisis intervention for victims of abuse and
exploitation and recommend appropriate measures to deter further abuse and
exploitation;
(iii) 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;
(iv) 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;
(vi) 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;
(4)
Be in the front-line of service delivery, particularly those which have to do with
immediate relief during and assistance in the aftermath of man-made and natural
disasters and 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
(c)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance;
Article Fourteen.
The Environment and
Natural Resources Officer
Sec. 484.
Qualifications, Powers and Duties. (a) No person shall be 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 college or university, and a first grade civil service eligible or its
equivalent. He must have acquired experience in environmental and natural
resources management, conservation, and utilization for 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 the
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:
(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 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;

(2)
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 environment 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;
(3)
In addition to the foregoing duties and functions, the environment and natural
resources officer shall:
(i)
Establish, maintain, protect and preserve communal forests, watersheds, tree
parks, mangroves, greenbelts, commercial forests and similar forest projects 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 forest 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 front-line 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 disasters and calamities;
(5)
Recommend to the sanggunian and advise the governor or 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
(c)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
Article Fifteen.

The Architect

Sec. 485.
Qualifications, Powers and Duties. (a) No person shall be appointed
architect unless he is a citizen of the Philippines, a resident of the local government
unit concerned, of good moral character, and 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:
(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 measures to ensure the delivery of basic services and provision of
adequate facilities relative to architectural planning and design as provided for under
Section 17 of this Code;
(2)
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 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 the 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
governmental and non-governmental entities or individuals, particularly those for
undeveloped, underdeveloped, and poorly-designed areas;
(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 front-line 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 disasters and calamities;
(5)
Recommend to the sanggunian and advise the governor or mayor, as the case
may be, on all other matters relative to the architectural planning and design as it
relates to the total socioeconomic development of the local government unit; and
(c)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
Article Sixteen.

The Information Officer

Sec. 486.
Qualifications, Powers and Duties. (a) No person shall be appointed
information 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 journalism, mass communications 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 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 coterminous with that of his appointing
authority.
(b)
The information officer shall take charge of the office on public information
and shall:
(1)
Formulate measure for the consideration of the sanggunian and provide
technical assistance and support to the 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 the governor or
mayor, as the case may be, implement the same, particularly those which have to do
with public information and research data to support 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 the foregoing duties and functions, the 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 front-line in providing information during and in the aftermath of
man-made and natural disasters and calamities, with special attention to the victims
thereof, to help minimize injuries and casualties during and after the emergency, and
to accelerate relief and rehabilitation;
(5)
Recommend to the sanggunian and advise the governor or mayor, as the case
may be, on all other matters relative to public information and research data as it
relates to the total socioeconomic development of the local government unit; and
(c)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
Article Seventeen.

The Cooperatives Officer

Sec. 487.
Qualifications, Powers and Duties. (a) No person shall be appointed
cooperatives 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 business course from a recognized college or university, and a first
grade civil service eligible or its equivalent. He must have experience in cooperatives
organization and management for at least five (5) years in the case of the provincial
or city cooperatives officer, and three (3) years in the case of the 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 measures to ensure the delivery of basic services and 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 the governor or
mayor, as the case may be, implement the same, particularly those which have to do
with the integration of cooperatives 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;
(3)
In addition to the foregoing duties and functions, the cooperatives officer
shall:
(i)
Assist in the organization of cooperatives;
(ii)
Provide technical and other forms of assistance to existing cooperatives to
enhance their viability as an economic enterprise and social organization;
(iii) Assist cooperatives in establishing linkages with government agencies and
non-government organizations involved in the promotion and integration of the
concept of cooperatives in the livelihood of the people and other community
activities;
(4)
Be in the front-line of cooperatives organization, rehabilitation or viabilityenhancement, 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 mayor, as the case
may be, on all other matters relative to cooperatives development and viabilityenhancement which will improve the livelihood and quality of life of the inhabitants;
and
(c)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
Article Eighteen.

The Population Officer

Sec. 488.
Qualifications, Powers and Duties. (a) No person shall be appointed
population 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
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:
(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 measures to ensure the delivery of basic services and provision of
adequate facilities relative to the integration of the population development
principles and in providing access to said services and facilities;
(2)
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 the 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;
(3)
In addition to the foregoing duties and functions, the 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;
(ii)
Establish and maintain an updated data bank for program operations,
development planning and an educational program to ensure the people's
participation in and understanding of population development;
(iii) Implement appropriate training programs responsive to the cultural heritage
of the inhabitants; and
(c)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
Article Nineteen.

The Veterinarian

Sec. 489.
Qualifications, Powers and Duties. (a) No person shall be appointed
veterinarian unless he is a citizen of the Philippines, a resident of the local
government concerned, of good moral character, and a licensed doctor of veterinary
medicine. He must have practiced his profession for at least three (3) years in the
case of the 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.

(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 measures to ensure the delivery of basic services and provision of
adequate facilities pursuant to Section 17 of this Code;
(2)
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 veterinary related activities 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 veterinarian shall:
(i)
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;
(ii)
Regulate the keeping of domestic animals;
(iii) Regulate and inspect poultry, milk and dairy products for public consumption;
(iv) 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 front-line 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 disasters and calamities;
(5)
Recommend to the sanggunian and advise the governor or mayor, as the case
may be, on all other matters relative to 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
(c)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
Article Twenty.

The General Services Officer

Sec. 490.
Qualifications, Powers and Duties. (a) No person shall be 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 for at least five (5) years in the
case of the provincial or city general services officer, and three (3) years in the case of
the municipal general services officer.
The appointment of a general services officer shall be mandatory for the provincial
and city governments.
(b)
The general services officer shall take charge of the office on general 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 measures to ensure the delivery of basic services and provision of
adequate facilities pursuant to Section 17 of this Code and which require general
services expertise and technical support services;
(2)
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 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;
(ii)
With the approval of the governor, 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;
(iii) 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;
(iv) 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;
(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;
(vi) Collate and disseminate information regarding prices, shipping and other
costs of supplies and other items commonly used by the local government unit;
(vii) Perform archival and record management with respect to records of offices
and departments of the local government unit; and
(viii) 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;
(4)
Be in the front-line 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 disasters and calamities;
(5)
Recommend to the sanggunian and advise the governor or mayor, as the case
may be, on all other matters relative to general services; and
(c)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
Title Six
LEAGUES OF LOCAL GOVERNMENT UNITS
AND ELECTIVE OFFICIALS
CHAPTER I.
Leagues of Local Government Units
Article One.
Liga ng Mga Barangay
Sec. 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.
Sec. 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.
Sec. 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 activities of the chapters of
the liga.
Sec. 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, and sangguniang panlalawigan,
respectively. They shall serve as such only during their term of office as presidents of
the liga chapters, which in no case shall be beyond the term of office of the
sanggunian concerned.
Sec. 495.
Powers, Functions and Duties of the Liga ng mga Barangay. The Liga
ng mga Barangay 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

Sec. 496.
Purpose of Organization. There shall be an organization of all
municipalities, to be known as the 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.
Sec. 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.

Sec. 498.
Powers, Functions and Duties of the League of Municipalities. The
League of Municipalities shall:
(a)
Assist the National Government in the formulation and implementation of
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
(h)
Exercise such other powers and perform such other duties and functions as the
league may prescribe for the welfare of the municipalities.
Article Three.

League of Cities

Sec. 499.
Purpose of Organization. There shall be an organization of all 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.
Sec. 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.
Sec. 501.
Powers, Functions and Duties of the League of Cities. The League of
Cities shall:
(a)
Assist the National Government in the formulation and implementation of the
policies, programs and projects affecting 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 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 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;
(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 cities; and

(h)
Exercise such other powers and perform such other duties and functions as the
league may prescribe for the welfare of the cities.
Article Four.

League of Provinces

Sec. 502.
Purpose of Organization. There shall be an organization of all
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.
Sec. 503.
Representation. Every province shall be represented in the league by
the provincial governor, or in his absence, by the provincial 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.
Sec. 504.
Powers, Functions and Duties of the League of Provinces. The league of
Provinces shall:
(a)
Assist the National Government in the formulation and implementation of the
policies, programs and projects affecting 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 people's participation in local government administration in order
to promote united and concerted action for the attainment of countrywide
development goals;
(e)
Supplement the efforts of the National Government in creating 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;
(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 provinces; and
(h)
Exercise such other powers and perform such other duties and functions as the
league may prescribe for the welfare of the provinces and metropolitan political
subdivisions.
Article Five.

Provisions Common to all Leagues

Sec. 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 provisions of this
Code and 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 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.
Sec. 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 directors of the leagues for municipalities, cities
or provinces shall coordinate programs, projects and activities of the chapter and the
national-level league.
Sec. 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
Sec. 508.
Organization. (a) Vice governors, 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 federations, 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.
Sec. 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.
Sec. 510.
Funding. The leagues and federations may derive 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.
BOOK IV.
MISCELLANEOUS AND FINAL PROVISIONS
Title One
PENAL PROVISIONS
Sec. 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)
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.
Sec. 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.
Sec. 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 (P500.00) or
by imprisonment not exceeding one (1) month, or both such fine and imprisonment,
at the discretion of the court.
Sec. 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 (6) months and one day to six (6) years, or a fine
of not less than Three thousand pesos (P3,000.00) nor more than Ten thousand
pesos (P10,000.00), or both such imprisonment and fine, at the discretion of the
court.
Sec. 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
the Katarungang 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.
Sec. 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
(P1,000.00) nor more than Five thousand pesos (P5,000.00), 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
(P100.00) nor more than One thousand pesos (P1,000.00).
Sec. 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 fail to perform any duty imposed
upon him by law relating to the assessment of taxable real property shall, upon
conviction, be punished by a fine of not less than One thousand pesos (P1,000.00)
nor more than Five thousand pesos (P5,000.00), 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 be imposed 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 (P500.00) nor more than Five thousand
pesos (P5,000.00) 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.
Sec. 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 (P500.00) nor more than Five thousand pesos (P5,000.00), 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.
Sec. 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 (P1,000.00) nor more than Five thousand pesos (P5,000.00), 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.
Sec. 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 used in the
said project. Any person convicted for violation of the provisions of said Title shall be
removed from office and shall be punished 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
Sec. 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.
Sec. 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.
Sec. 523.
Personnel Retirement and/or Benefits. An official or employee of the
National Government or local government unit separated from the services 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.
Sec. 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 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.
Sec. 525.
Records and Properties. All records, equipment, buildings, facilities 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
Sec. 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.
Sec. 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.
Sec. 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.
Sec. 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.

Sec. 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 obligations of the local water district concerned to the
LWUA shall first be settled prior to said devolution.
Sec. 531.
Debts 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)
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 corporation. GOCCs may in turn offset
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 (Pagibig), Medicare, and those pertaining to premium contributions and amortization
payments of salary and policy loans 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.
Sec. 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.
Sec. 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;
(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 (P5,000,000.00), 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.
Title Four
FINAL PROVISIONS
Sec. 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 Decree 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
Decree Nos. 559 and 1741; Presidential Decree No. 231 as amended; Presidential
Decree No. 436 as amended by Presidential Decree No. 558; and Presidential Decree
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 locallyfunded projects.
(e)
The following provisions are hereby repealed or amended insofar as they are
inconsistent with the provisions of this Code: Sections 2, 16, 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.
Sec. 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.
Sec. 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.
Approved,
(Sgd.) RAMON V. MITRA (Sgd.) JOVITO R. SALONGA
Speaker

President of the Senate

House of Representatives
This bill which was a consolidation of Senate Bill No. 155 and House Bill No. 31046
was finally passed by the Senate and the House of Representatives on September 10,
1991 and September 12, 1991, respectively.
(Sgd.) CAMILO L. SABIO (Sgd.) DEMAREE J.B. RAVAL
Secretary General

Acting Secretary of the Senate

House of Representatives
Approved: October 10, 1991
(Sgd.) CORAZON C. AQUINO
President of the Philippines
*
This sentence should read: Pending final resolution of the case, the disputed
area prior to the dispute shall be maintained and continued for all legal purposes.
*
This provision is defective.
RULES AND REGULATIONS IMPLEMENTING THE LOCAL GOVERNMENT CODE
OF 1991
RULE I
POLICY AND APPLICATION
Art. 1. Title. These Rules shall be known and cited as the Rules and Regulations
Implementing the Local Government Code of 1991.
Art. 2. Purpose. These Rules are promulgated to prescribe the procedures and
guidelines for the implementation of the Local Government Code of 1991 in order to
facilitate compliance therewith and achieve the objectives thereof.
Art. 3. Declaration of Policy. (a) It is hereby declared the policy of the State that the
territorial and political subdivisions of the State 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 (LGUs) shall be given more powers, authority,
responsibilities, and resources. The process of decentralization shall proceed from the
National Government to the LGUs.
(b)
It is also the policy of the State to ensure the accountability of LGUs through
the institution of effective mechanisms of recall, initiative and referendum.
(c)
It is likewise the policy of the State to require all national government agencies
and offices (NGOs) to conduct periodic consultations with appropriate LGUs, nongovernmental organizations (NGOs) and people's organizations, and other concerned

sectors of the community before any project or program is implemented in their

respective jurisdictions.
(d)
Every LGU shall exercise the powers expressly granted, those necessarily
implied therefrom, 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, LGUs 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.
Art. 4. Scope of Application. These Rules shall apply to the following:
(a)
All provinces, cities, municipalities, barangays, and such other political
subdivisions as may be created by law;
(b)
All LGUs in the Autonomous Region in Muslim Mindanao and other
autonomous political units as may be created by law, until such time that they shall
have enacted their own local government code; and
(c)
NGAs and other government instrumentalities including government-owned
and -controlled corporations (GOCCs) to the extent provided in the Code.
Art. 5. Rules of Interpretation. In the interpretation of the provisions of the Code, the
following rules shall apply:
(a)
The general welfare provisions, any provision on the powers of an LGU, and
any question regarding the devolution of powers shall be liberally interpreted and
resolved in their favor of the LGU.
(b)
Any fair and reasonable doubt on the powers of LGUs shall be liberally
interpreted and resolved in their favor; and in cases involving lower and higher level
LGUs, in favor of the lower level LGU.
(c)
Rights and obligations existing on the date of effectivity of the Code and
arising out of contracts or any other source of prestation involving an LGU shall be
governed by the original terms and conditions of said contracts or the law in force at
the time such rights were vested.
(d)
In the resolution of controversies arising under the Code where no legal
provision or jurisprudence applies, the customs and traditions in the place where the
controversies take place may be resorted to.
(e)
In case of doubt, any tax ordinance or revenue measure shall be construed
strictly against the LGU enacting it, and liberally in favor of the taxpayer. Any tax
exemption, incentive, or relief granted by any LGU pursuant to the provisions of the
Code shall be construed strictly against the person claiming it.
RULE II
CREATION, CONVERSION, DIVISION, MERGER, ABOLITION,
AND ALTERATION OF BOUNDARIES OF
LOCAL GOVERNMENT UNITS
Art. 6. Common Provisions. (a) Authority to create LGUs An LGU may be created,
converted, divided, merged, abolished, or its boundaries substantially altered either
by Act of 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 Rule.
Notwithstanding the population requirement, the Congress may create barangays in
indigenous cultural communities to enhance the delivery of basic services in said
areas and in the municipalities within the Metropolitan Manila Area (MMA).

(b)
Creation or conversion
(1)
The creation of an LGU or its conversion from one level to another shall be
based on the following verifiable indicators of viability and projected capacity to
provide services:
(i)
Income which must be sufficient, based on acceptable standards, to provide
for all essential government facilities and services and special functions
commensurate to the size of its population, as expected of the LGU. The income shall
be based on 1991 constant prices, as determined by the Department of Finance
(DOF).
(ii)
Population which shall be the total number of inhabitants within the
territorial jurisdiction of the LGU.
(iii) Land area which must be contiguous, unless it comprises two (2) or more
islands or is separated by an LGU 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.
(2)
Compliance with the foregoing indicators shall be attested by:
(i)
The Secretary of Finance as to the income requirement in the case of provinces
and cities, and the provincial treasurer in the case of municipalities;
(ii)
The Administrator of the National Statistics Office (NSO) as to the population
requirement; and
(iii) The Director of the Lands Management Bureau (LMB) of the Department of
Environment and Natural Resources (DENR) as to the land area requirement.
(c)
Division or merger Division or merger of existing LGUs shall comply with the
same requirements for their creation. Such division or merger shall not reduce the
income, population, or land area of the original LGU or LGUs to less than the
prescribed minimum requirements and that their income classification shall not fall
below their current income classification prior to the division or merger.
(d)
Abolition An LGU may be abolished when its income, population, or land area
has been irreversibly reduced during the immediately preceding three (3) consecutive
years to less than the requirements for its creation, as certified by DOF, in the case of
income; by NSO, in the case of population; and by LMB, in the case of land area. The
law or ordinance abolishing an LGU shall specify the province, city, municipality, or
barangay to which an LGU sought to be abolished will be merged with.
(e)
Updating of income classification 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.
(f)
Plebiscite (1) No creation, conversion, division, merger, abolition, or
substantial alteration of boundaries of LGUs shall take effect unless approved by a
majority of the votes cast in a plebiscite called for the purpose in the LGU or LGUs
directly affected. The plebiscite shall be conducted by the Commission on Elections
(Comelec) within one hundred twenty (120) days from the effectivity of the law or
ordinance prescribing such action, unless said law or ordinance fixes another date.
(2)
The Comelec shall conduct an intensive information campaign in the LGUs
concerned at least twenty (20) days prior to the plebiscite, in the case of provinces,
cities, and municipalities; and ten (10) days, in the case of barangays. The Comelec
may seek the assistance of national and local government officials, mass media,
NGOs, and other interested parties.
(g)
Beginning of corporate existence When a new LGU 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.

Art. 7. Selection and Transfer of Local Government Site, Offices, and Facilities. (a)
The seat of government of an LGU from where governmental and corporate services
are delivered shall be at the site designated by the law or ordinance creating the LGU.
(b)
In the case of a province, the site shall be within its capital town or city.
(c)
In selecting the 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.
(d)
When subsequent to the establishment of the government site conditions and
developments in the LGU have significantly changed, the sanggunian may, after
public hearing and by a vote of two-thirds (2/3) of all its members, transfer the
government site to a location best suited to present needs and anticipated future
development and progress. No transfer shall be made outside the territorial
boundaries of the LGU 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 may deem beneficial to the LGU and its inhabitants.
(e)
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 a majority of all the members of the sanggunian is obtained.
Art. 8. Government Centers. (a) Every province, city, and municipality shall endeavor
to establish a government center where offices, agencies, or branches of the National
Government, LGUs or GOCCs may, as far as practicable, be located.
(b)
The LGU shall take into account its existing facilities and those of NGAs in
designating such government center.
(c)
Construction of buildings in the government center shall conform with the
overall physical and architectural plans and motif of the government center, as
approved by the sanggunian concerned.
(d)
The National Government, LGU, or GOCC concerned shall bear the expenses
for the construction of its own buildings and facilities in the government center.
Art. 9. Provinces. (a) Requisites for creation A province shall not be created unless
the following requisites on income and either population or land area are present:
(1)
Income An average annual income of not less than Twenty Million Pesos
(P20,000,000.00) for the immediately preceding two (2) consecutive years based on
1991 constant prices, as certified by DOF. The average annual income shall include
the income accruing to the general fund, exclusive of special funds, special accounts,
transfers, and non-recurring income; and
(2)
Population or land area Population which shall not be less than two hundred
fifty thousand (250,000) inhabitants, as certified by NSO; or land area which must be
contiguous with an area of at least two thousand (2,000) square kilometers, as
certified by LMB. 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 land area requirement shall not apply where the
proposed province is composed of one (1) or more islands. The territorial jurisdiction
of a province sought to be created shall be properly identified by metes and bounds.
The creation of a new province shall not reduce the land area, population, and income
of the original LGU or LGUs at the time of said creation to less than the prescribed
minimum requirements. All expenses incidental to the creation shall be borne by the
petitioners.
(b)
Procedure for creation
(1)
Petition Interested municipalities or component cities shall submit the
petition, in the form of a resolution, of their respective sanggunians requesting the

creation of a new province to the Congress, and furnish copies thereof to the
sangguniang panlalawigan of the original province or provinces.
(2)
Comments on petition The sangguniang panlalawigan of the original province
or provinces shall submit to the Congress its comments and recommendations on the
petition for creation of the proposed province.
(3)
Documents to Support Petition The following documents shall be attached to
the petition for creation:
(i)
Certification by DOF that the average annual income of the proposed province
meets the minimum income requirement and that its creation will not reduce the
income, based on 1991 constant prices, of the original LGU or LGUs to less than the
prescribed minimum;
(ii)
Certification by the NSO as to population of the proposed province and that its
creation will not reduce the population of the original LGUs to less than the
prescribed minimum;
(iii) Certification by LMB that the land area of the proposed province meets the
minimum land area requirement and that its creation will not reduce the land area of
the original LGU or LGUs to less than the prescribed minimum;
(iv) Map of the original LGU or LGUs, indicating the areas to be created into a
province. The map shall be prepared by the provincial, city, or district engineer and
shall clearly indicate the road network within the proposed province; and
(v)
Such other information that the petitioners may deem relevant for
consideration in the petition.
All costs incurred in the production of the required documents shall be borne by the
petitioning LGUs.
(4)
Plebiscite
(i)
Upon the effectivity of the law creating a province, the Comelec shall conduct a
plebiscite in the LGU or LGUs directly affected within one hundred twenty (120) days
or within the period specified in the law.
(ii)
The Comelec shall conduct an intensive information campaign in the LGUs
concerned at least twenty (20) days prior to the plebiscite. For this purpose, the
Comelec may seek the assistance of national and local government officials, mass
media, NGOs, and other interested parties.
(c)
Beginning of corporate existence When a province is created, its corporate
existence shall commence upon the election and qualification of its governor and a
majority of the members of its sanggunian unless some other time is fixed therefor by
the law creating it.
Art. 10.
Status of Existing Subprovinces. (a) The existing subprovinces of
Biliran in the province of Leyte, and Guimaras in the province of Iloilo, shall
automatically be converted into regular provinces upon approval by a majority of the
votes cast in a plebiscite to be held in the said subprovince and the original provinces
directly affected which shall be conducted by the Comelec simultaneously with the
national elections on May 11, 1992.
(b)
The new legislative districts created as a result of such conversion shall
continue to be represented in the Congress by the duly elected representatives of the
original districts out of which the new provinces or districts were created until their
own representatives shall have been elected in the next regular congressional
elections and have qualified.
(c)
The incumbent elective officials of the subprovinces converted into regular
provinces shall continue to hold office until June 30, 1992. Any vacancy occurring in
the offices occupied by said incumbents, 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.

(d)
The appointees shall hold office until their successors shall have been elected
in the regular local elections following the plebiscite and have qualified.
(e)
After effectivity of such conversion, the President shall appoint the governor,
vice governor and other members of the sangguniang panlalawigan if none has yet
been appointed, all of whom shall likewise hold office until their successors shall have
been elected in the next regular local elections and have qualified.
(f)
All qualified appointive officials and employees in the career service of the
subprovinces at the time of their conversion into regular provinces shall continue in
office in accordance with civil service law, rules and regulations.
Art. 11.
Cities. (a) Requisites for creation A city shall not be created unless the
following requisites on income and either population or land area are present:
(1)
Income An average annual income of not less than Twenty Million Pesos
(P20,000,000.00), for the immediately preceding two (2) consecutive years based on
1991 constant prices, as certified by DOF. The average annual income shall include
the income accruing to the general fund, exclusive of special funds, special accounts,
transfers, and non-recurring income; and
(2)
Population or land area Population which shall not be less than one hundred
fifty thousand (150,000) inhabitants, as certified by the NSO; or land area which
must be contiguous with an area of at least one hundred (100) square kilometers, as
certified by LMB. 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 land area requirement shall not apply where the
proposed city is composed of one (1) or more islands. The territorial jurisdiction of a
city sought to be created shall be properly identified by metes and bounds.
The creation of a new city shall not reduce the land area, population, and income of
the original LGU or LGUs at the time of said creation to less than the prescribed
minimum requirements. All expenses incidental to the creation shall be borne by the
petitioners.
(b)
Procedure for creation
(1)
Petition Interested municipalities or barangays shall submit the petition, in
the form of a resolution, of their respective sanggunians requesting the creation of a
new city to the Congress, and furnish copies thereof to the sangguniang panlalawigan
or sangguniang panlungsod of the LGUs concerned.
(2)
Comments on petition The sangguniang panlalawigan or sangguniang
panlungsod shall submit to the Congress its comments and recommendations on the
petition for creation of the city.
(3)
Documents to support petition The following documents shall be attached to
the petition for creation:
(i)
Certification by DOF that the average annual income of the proposed city
meets the minimum income requirement and that its creation will not reduce the
income based on 1991 constant prices, of the original LGU or LGUs to less than the
prescribed minimum;
(ii)
Certification by NSO as to population of the proposed city and that its creation
will not reduce the population of the original LGUs to less than the prescribed
minimum;
(iii) Certification by LMB that the land area of the proposed city meets the
minimum land area requirement and that its creation will not reduce the land area of
the original LGU or LGUs to less than the prescribed minimum;
(iv) Map of the original LGU or LGUs, indicating the areas to be created into a city.
The map shall be prepared by the provincial, city, or district engineer as the case may
be and shall clearly indicate the road network within the proposed city;

(v)
Certification by LMB that disposable and alienable public lands are available
in the area to be created into a city sufficient to meet its growing population and the
following purposes:

Government center site of not less than ten thousand (10,000) square meters
which shall include the city hall site and those of other government buildings;

Market site of not less than ten thousand (10,000) square meters, located out
of view of the city hall, schools, plaza, and cemetery and near but not along a
provincial road, railroad station, navigable river, or sea;

Plaza or park of not less than ten thousand (10,000) square meters located
preferably in front of the city hall;

School site of not less than ten thousand (10,000) square meters, in welldrained location that conforms with the requirements prescribed by public school
authorities; and

Cemetery site of not less than five thousand (5,000) square meters for every
ten thousand (10,000) population which conforms with the requirements prescribed
by the health authorities;
(vi) Number and nature of existing and commercial establishments in the territory
of the proposed city as certified by NSO;
(vii) Sources of potable water supply for the inhabitants as certified by the Local
Water Utilities Administration (LWUA) or the Metropolitan Waterworks and
Sewerage System (MWSS), as the case may be;
(viii) Facilities, plans, and site for sewerage, garbage and waste disposal as certified
by the local engineer; and
(ix) Such other information that the petitioners may deem relevant for
consideration in the petition.
All costs incurred in the production of the required documents shall be borne by the
petitioning LGUs.
(4)
Plebiscite
(i)
Upon the effectivity of the law creating a city, the Comelec shall conduct a
plebiscite in the LGUs directly affected within one hundred twenty (120) days or
within the period specified in the law.
(ii)
The Comelec shall conduct an intensive information campaign in the LGUs
concerned at least twenty (20) days prior to the plebiscite. For this purpose, the
Comelec may seek the assistance of national and local government officials, mass
media, NGOs, and other interested parties.
(c)
Beginning of corporate existence. When a city is created, its corporate
existence shall commence upon the election and qualification of its mayor and a
majority of the members of its sanggunian, unless some other time is fixed therefor
by the law creating it.
Art. 12.
Conversion of a Component City Into a Highly-Urbanized City. (a)
Requisites for conversion A component city shall not be converted into a highlyurbanized city unless the following requisites are present:
(1)
Income latest annual income of not less than Fifty Million Pesos
(P50,000,000.00) based on 1991 constant prices, as certified by the city treasurer.
The annual income shall include the income accruing to the general fund, exclusive of
special funds, transfers, and non-recurring income; and
(2)
Population which shall not be less than two hundred thousand (200,000)
inhabitants, as certified by NSO.
(b)
Procedure for conversion
(1)
Resolution The interested component city shall submit to the Office of the
President a resolution of its sanggunian adopted by a majority of all its members in a
meeting duly called for the purpose, and approved and endorsed by the city mayor.
Said resolution shall be accompanied by certifications as to income and population.

(2)
Declaration of conversion Within thirty (30) days from receipt of such
resolution, the President shall, after verifying that the income and population
requirements have been met, declare the component city as highly-urbanized.
(3)
Plebiscite Within one hundred twenty (120) days from the declaration of the
President or as specified in the declaration, the Comelec shall conduct a plebiscite in
the city proposed to be converted. Such plebiscite shall be preceded by a
comprehensive information campaign to be conducted by the Comelec with the
assistance of national and local government officials, media, NGOs, and other
interested parties.
(c)
Effect of Conversion
The conversion of a component city into a highly-urbanized city shall make it
independent of the province where it is geographically located.
Art. 13.
Municipalities. (a) Requisites for Creation A municipality shall not be
created unless the following requisites are present:
(i)
Income An average annual income of not less than Two Million Five Hundred
Thousand Pesos (P2,500,000.00), for the immediately preceding two (2) consecutive
years based on 1991 constant prices, as certified by the provincial treasurer. The
average annual income shall include the income accruing to the general fund,
exclusive of special funds, special accounts, transfers, and non-recurring income;
(ii)
Population which shall not be less than twenty five thousand (25,000)
inhabitants, as certified by NSO; and
(iii) Land area which must be contiguous with an area of at least fifty (50) square
kilometers, as certified by LMB. The territory need not be contiguous if it comprises
two (2) or more islands. The requirement on land area shall not apply where the
proposed municipality is composed of one (1) or more islands. The territorial
jurisdiction of a municipality sought to be created shall be properly identified by
metes and bounds.
The creation if a new municipality shall not reduce the land area, population, and
income of the original LGU or LGUs at the time of said creation to less than the
prescribed minimum requirements. All expenses incidental to the creation shall be
borne by the petitioners.
(b)
Procedure for creation
(1)
Petition Interested barangays shall submit the petition, in the form of a
resolution, of their respective sanggunians requesting the creation of a new
municipality to the Congress, and furnish copies thereof to the sangguniang
panlalawigan, sangguniang panlungsod, or sangguniang bayan of the LGUs
concerned.
(2)
Comments on petition The sangguniang panlungsod or sangguniang bayan,
together with the sangguniang panlalawigan, shall submit to the Congress its
comments and recommendations on the petition for creation of the municipality.
(3)
Documents to support petition The following documents shall be attached to
the petition for creation:
(i)
Certification by the provincial treasurer, in the case of municipalities and
component cities, and the city treasurer, in the case of highly-urbanized cities, that
the average annual income of the proposed municipality meets the minimum income
requirement and that its creation will not reduce the income, based on 1991 constant
prices, of the original LGU or LGUs to less than the prescribed minimum;
(ii)
Certification by NSO as to population of the proposed municipality and that its
creation will not reduce the population of the original LGU or LGUs to less than the
prescribed minimum;

(iii) Certification by the LMB that the land area of the proposed municipality meets
the minimum land area requirement and that its creation will not reduce the land
area of the original LGU or LGUs to less than the prescribed minimum;
(iv) Map of the original LGU or LGUs, indicating the areas to be created into a
municipality. The map shall be prepared by the provincial, city, or district engineer as
the case may be and shall clearly indicate the road network within the proposed city;
(v)
Certification by LMB that disposable and alienable public lands are available
in the area to be created into a municipality sufficient to meet its growing population
and the following purposes:

Government center site of not less than five thousand (5,000) square meters
which shall include the municipal hall site and those of other government buildings;

Market site of not less than five thousand (5,000) square meters, located out of
view of the municipal hall, schools, plaza, and cemetery and near but not along a
provincial road, railroad station, navigable river, or sea;

Plaza or park of not less than five thousand (5,000) square meters located
preferably in front of the municipal hall;

School site of not less than five thousand (5,000) square meters, in welldrained location that conforms with the requirements prescribed by public school
authorities; and

Cemetery site of not less than five thousand (5,000) square meters for every
ten thousand (10,000) population which conforms with the requirements prescribed
by health authorities.
(vi) Number and nature of existing industrial and commercial establishments in
the territory of the proposed municipality as certified by NSO;
(vii) Sources of potable water supply for the inhabitants as certified by LWUA or
MWSS, as the case may be;
(viii) Facilities, plans, and site for sewerage, garbage and waste disposal as certified
by the local engineer; and
(ix) Such other information that the petitioners may deem relevant for
consideration in the petition.
All costs incurred in the production of the required documents shall be borne by the
petitioning LGUs.
(4)
Plebiscite
(i)
Upon the effectivity of the law creating a municipality, the Comelec shall
conduct a plebiscite in the LGUs directly affected within one hundred twenty (120)
days or within the period specified in the law.
(ii)
The Comelec shall conduct an intensive information campaign in the LGUs
concerned at least twenty (20) days prior to the plebiscite. For this purpose, the
Comelec may seek the assistance of national and local government officials, mass
media, NGOS, and other interested parties.
(c)
Beginning of corporate existence. When a municipality is created, its
corporate existence shall commence upon the election and qualification of its mayor
and a majority of the members of its sanggunian, unless some other time is fixed
therefor by the law creating it.
Art. 14.
Barangays. (a) Creation of barangays by the sangguniang panlalawigan
shall require prior recommendation of the sangguniang bayan.
(b)
New barangays in the municipalities within MMA shall be created only by Act
of Congress, subject to the limitations and requirements prescribed in this Article.
(c)
Notwithstanding the population requirement, a barangay may be created in
the indigenous cultural communities by Act of Congress upon recommendation of the
LGU or LGUs where the cultural community is located.
(d)
A barangay shall not be created unless the following requisites are present:

(1)
Population which shall not be less than two thousand (2,000) inhabitants,
except in municipalities and cities within MMA and other metropolitan political
subdivisions as may be created by law, or in highly-urbanized cities where such
territory shall have a population of at least five thousand (5,000) inhabitants, as
certified by NSO. The creation of a barangay shall not reduce the population of the
original barangay or barangays to less than the prescribed minimum.
(2)
Land area which must be contiguous, unless comprised by two (2) or more
islands. The territorial jurisdiction of a barangay sought to be created shall be
properly identified by metes and bounds or by more or less permanent natural
boundaries.
All expenses incidental to the creation shall be borne by the petitioners.
(e)
Procedure for creation
(1)
Petition A written petition of a majority of the registered voters residing in the
area sought to be created or resolutions of the sangguniang barangays desiring to be
merged, as the case may be, shall be presented to the sangguniang panlalawigan,
upon recommendation of the sangguniang bayan concerned, or to the sangguniang
panlungsod, for appropriate action.
In the case of municipalities within MMA, a similar petition or resolution shall be
presented to the Congress, upon recommendation of the sangguniang bayan
concerned.
(2)
Documents to support petition In addition to the petition or resolution, the
following shall be submitted:
(i)
Certification by NSO as to the population of the proposed barangay and that
its creation will not reduce the population of the original barangay or barangays to
less than the prescribed minimum.
(ii)
Map of the original barangay or barangays indicating the areas to be created
into a new barangay and technical description certified by LMB or city or municipal
assessor, as the case may be.
All costs incurred in the production of the required documents shall be borne by the
petitioning LGUs.
(3)
Comments on petition The presiding officer of the sangguniang bayan shall
require the sangguniang barangay of the original barangay or barangays to submit
their comments on the proposed creation within twenty (20) days after receipt of said
petition or resolution which shall serve as basis for recommending appropriate action
thereon to the sangguniang panlalawigan.
(4)
Action on petition The sangguniang panlalawigan or sangguniang panlungsod
shall, within fifteen (15) days from submission of the petition and other required
supporting documents, take action granting or denying the petition.
(i)
The ordinance granting the petition creating a new barangay shall be approved
by two-thirds (2/3) of all the members of the sangguniang panlalawigan or
sangguniang panlungsod.
The ordinance shall properly identify by metes and bounds or by natural boundaries,
the territorial jurisdiction of the new barangay. The ordinance shall likewise fix the
date of the plebiscite to be conducted by the Comelec in the area or areas directly
affected to ratify the creation of the new barangay.
(ii)
A denial shall be in the form of a resolution stating clearly the facts and
reasons for such denial.
(5)
Submission of ordinance to the Comelec Within thirty (30) days before the
plebiscite, the secretary to the sangguniang panlalawigan or sangguniang panlungsod
shall furnish the Comelec with a signed official copy of the ordinance creating the
barangay.
(6)
Conduct of information campaign The Comelec shall conduct an intensive
information campaign in the LGUs concerned at least ten (10) days prior to the

plebiscite. For this purpose, the Comelec may seek the assistance of national and local
government officials, mass media, NGOs, and other interested parties.
(7)
Submission of plebiscite results At least seven (7) days after the conduct of the
plebiscite, the city or municipality concerned shall submit the Certificates of Canvass
of Votes Cast, Statement of Affirmative and Negative Votes, Abstentions Cast in every
voting center as well as the provincial or city ordinance creating the barangay to the
Comelec and DILG central office for inclusion in the Official Masterlist of Barangays.
(f)
Beginning of corporate existence When a barangay is created, its corporate
existence shall commence upon the election and qualification of its punong barangay
and a majority of the members of its sanggunian unless some other time is fixed
therefor by the law or ordinance creating it.
(g)
Financial requirement The financial requirements of the barangays created by
LGUs after the effectivity of the Code shall be the responsibility of the LGU
concerned.
(h)
Consolidation plan of barangays Based on the criteria prescribed in this
Article, the governor or city mayor may prepare a consolidation plan for barangays
within his territorial jurisdiction. The said plan shall be submitted to the sangguniang
panlalawigan or sangguniang panlungsod for appropriate action.
In the case of municipalities within MMA and other metropolitan political
subdivisions as may be created by law, the barangay consolidation plan shall be
prepared and approved by the sangguniang bayan concerned.
RULE III
SETTLEMENT OF BOUNDARY DISPUTES
Art. 15.
Definition and Policy. There is a boundary dispute when a portion or
the whole of the territorial area of an LGU is claimed by two or more LGUs. Boundary
disputes between or among LGUs shall, as much as possible, be settled amicably.
Art. 16.
Jurisdictional Responsibility. Boundary disputes shall be referred for
settlement to the following:
(a)
Sangguniang panlungsod or sangguniang bayan for disputes involving two (2)
or more barangays in the same city or municipality, as the case may be;
(b)
Sangguniang panlalawigan, for those involving two (2) or more municipalities
within the same province;
(c)
Jointly, to the sanggunians of provinces concerned, for those involving
component cities or municipalities of different provinces; or
(d)
Jointly, to the respective sanggunians, for those involving a component city or
municipality and a highly-urbanized city; or two (2) or more highly-urbanized cities.
Art. 17.
Procedures for Settling Boundary Disputes. The following procedures
shall govern the settlement of boundary disputes:
(a)
Filing of petition The sanggunian concerned may initiate action by filing a
petition, in the form of a resolution, with the sanggunian having jurisdiction over the
dispute.
(b)
Contents of petition The petition shall state the grounds, reasons or
justifications therefor.
(c)
Documents attached to petition The petition shall be accompanied by:
(1)
Duly authenticated copy of the law or statute creating the LGU or any other
document showing proof of creation of the LGU;
(2)
Provincial, city, municipal, or barangay map, as the case may be, duly certified
by the LMB;
(3)
Technical description of the boundaries of the LGUs concerned;

(4)
Written certification of the provincial, city, or municipal assessor, as the case
may be, as to territorial jurisdiction over the disputed area according to records in
custody;
(5)
Written declarations or sworn statements of the people residing in the
disputed area; and
(6)
Such other documents or information as may be required by the sanggunian
hearing the dispute.
(d)
Answer of adverse party Upon receipt by the sanggunian concerned of the
petition together with the required documents, the LGU or LGUs complained against
shall be furnished copies thereof and shall be given fifteen (15) working days within
which to file their answers.
(e)
Hearing Within five (5) working days after receipt of the answer of the adverse
party, the sanggunian shall hear the case and allow the parties concerned to present
their respective evidences.
(f)
Joint hearing When two or more sanggunians jointly hear a case, they may sit
en banc or designate their respective representatives. Where representatives are
designated, there shall be an equal number of representatives from each sanggunian.
They shall elect from among themselves a presiding officer and a secretary. In case of
disagreement, selection shall be by drawing lot.
(g)
Failure to settle In the event the sanggunian fails to amicably settle the
dispute within sixty (60) days from the date such dispute was referred thereto, it shall
issue a certification to that effect and copies thereof shall be furnished the parties
concerned.
(h)
Decision Within sixty (60) days from the date the certification was issued, the
dispute shall be formally tried and decided by the sanggunian concerned. Copies of
the decision shall, within fifteen (15) days from the promulgation thereof, be
furnished the parties concerned, DILG, local assessor, Comelec, NSO, and other
NGAs concerned.
(i)
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 dispute by filing therewith the appropriate
pleading, stating among others, the nature of the dispute, the decision of the
sanggunian concerned and the reasons for appealing therefrom. The Regional Trial
Court shall decide the case within one (1) year from the filing thereof. Decisions on
boundary disputes promulgated jointly by two (2) or more sangguniang
panlalawigans shall be heard by the Regional Trial Court of the province which first
took cognizance of the dispute.
Art. 18.
Maintenance of Status Quo. Pending final resolution of the dispute, the
status of the affected area prior to the dispute shall be maintained and continued for
all purposes.
Art. 19.
Official Custodian. The DILG shall be the official custodian of copies of
all documents on boundary disputes of LGUs.
RULE IV
NAMING OF LOCAL GOVERNMENT UNITS, PUBLIC PLACES,
STREETS, AND STRUCTURES
Art. 20.
Naming by the Sangguniang Panlalawigan. The sangguniang
panlalawigan, in consultation with the National Historical Institute (NHI), referred to
as the Philippine Historical Commission in the Code, may change the name of the
following within its territorial jurisdiction:
(a)
Component cities and municipalities, upon the recommendation of the
sangguniang panlungsod or sangguniang bayan, as the case may be;
(b)
Provincial roads, streets, avenues, boulevards, thoroughfares, and bridges;

(c)
Provincial public vocational or technical schools and other post-secondary and
tertiary schools;
(d)
Provincial hospitals, health centers, and other health facilities; and
(e)
Any other public place or building owned by the province.
Art. 21.
Naming by the Sanggunians of Highly-Urbanized Cities and
Independent Component Cities. The sanggunians of highly-urbanized cities and
component cities whose charters prohibit their voters from voting for provincial
elective officials, hereinafter referred to as independent component cities may, in
consultation with NHI, change the name of the following within their respective
territorial jurisdictions:
(a)
City barangays, upon the recommendation of the sangguniang barangay;
(b)
City and barangay roads, streets, avenues, boulevards, thoroughfares, and
bridges;
(c)
City public elementary, secondary, and vocational or technical schools,
community colleges, and non-chartered colleges;
(d)
City hospitals, health centers, and other health facilities; and
(e)
Any other public place or building owned by the city.
Art. 22.
Naming by the Sanggunians of Component Cities and Municipalities.
The sanggunians of component cities and municipalities may, in consultation with
the NHI, change the name of the following within their respective territorial
jurisdictions:
(a)
City and municipal barangays, upon the recommendation of the sangguniang
barangay;
(b)
City, municipal, and barangay roads, streets, avenues, boulevards,
thoroughfares, and bridges;
(c)
City and municipal public elementary, secondary, and vocational or technical
schools, post-secondary and other tertiary schools;
(d)
City and municipal hospitals, health centers, and other public health facilities;
and
(e)
Any other public place or building owned by the city or municipality.
Art. 23.
Guidelines and Limitations. (a) No name of LGUs, public places,
streets, and structures with historical, cultural, or ethnic significance shall be
changed, unless by unanimous vote of the sanggunian and in consultation with NHI.
(b)
No change in name of an LGU shall be effective unless ratified in a plebiscite
called for the purpose.
(c)
Naming shall be subject to the following conditions:
(1)
Naming after a living person shall not be allowed;
(2)
A change in name shall be made only for a justifiable reason;
(3)
Any change shall not be made more than once every ten (10) years;
(4)
A change in name of a local public school shall be made only upon the
recommendation of the local school board;
(5)
A change in name of local public hospitals, health centers, and other health
facilities shall be made only upon the recommendation of the local health board;
(6)
The whole length of a street shall have only one name; and
(7)
The name of a family in a particular community whose members significantly
contributed to the welfare of the Filipino people may be used;
(d)
The Office of the President, the representative of the legislative district
concerned, and the Postal Services Office shall be notified of any change in name of
LGUs, public places, streets, and structures.
RULE V
BASIC SERVICES AND FACILITIES
Art. 24.
Devolution. (a) Consistent with local autonomy and decentralization,
the provision for the delivery of basic services and facilities shall be devolved from the

National Government to provinces, cities, municipalities, and barangays so that each

LGU shall be responsible for a minimum set of services and facilities in accordance
with established national policies, guidelines, and standards.
(b)
For purposes of this Rule, devolution shall mean the transfer of power and
authority from the National Government to LGUs to enable them to perform specific
functions and responsibilities.
(c)
Any subsequent change in national policies, guidelines, and standards shall be
subject to prior consultation with LGUs.
Art. 25.
Responsibility for Delivery of Basic Services and Facilities. The LGUs
shall, in addition to their existing functions and responsibilities, provide basic
services and facilities devolved to them covering, but not limited to, the following:
Barangay
(a)
Agricultural support services through a distribution system for agriculture and
fishery inputs and the operation of agricultural and fishery produce collection and
buying stations;
(b)
Health and social welfare services, through maintenance of barangay health
and daycare centers;
(c)
Services and facilities related to general hygiene and sanitation, beautification,
and solid waste collection;
(d)
Administration and maintenance of the Katarungang Pambarangay;
(e)
Maintenance of barangay roads and bridges and water supply systems;
(f)
Infrastructure facilities such as multipurpose hall, multipurpose pavement,
plaza, sports center, and other similar facilities;
(g)
Information and reading center; and
(h)
Satellite public market, where viable.
Municipality
(a)
Agriculture and fishery extension and on-site research through:
(1)
dispersal of livelihood and poultry, fingerlings, and other seeding materials for
agriculture;
(2)
establishment and maintenance of seed farms for palay, corn, and vegetables;
medicinal plant gardens; seedling nurseries for fruit trees, coconuts, and other trees
or crops; and demonstration farms;
(3)
Enforcement of standards for quality control or copra and improvement and
development of local distribution channels, preferably through cooperatives;
(4)
Maintenance and operation of inter-barangay irrigation system;
(5)
Implementation of water and soil resource utilization and conservation
projects; and
(6)
Enforcement of fishery laws in municipal waters, including conservation of
mangroves.
(b)
In accordance with national policies and subject to supervision, control, and
review of DENR, implementation of community-based forestry projects through:
(1)
Integrated social forestry programs and similar projects;
(2)
Management and control of communal forests with an area not exceeding fifty
(50) square kilometers; and
(3)
Establishment of tree parks, greenbelts, and similar forest development
projects.
(c)
Subject to the provisions of Rule XXIII on local health boards and in
accordance with the standards and criteria of the Department of Health (DOH),
provision of health services through:
(1)
Implementation of programs and projects on primary health care, maternal
and child care, and communicable and non-communicable disease control services;
(2)
Access to secondary and tertiary health services; and

(3)
Purchase of medicines, medical supplies, and equipment needed to carry out
the devolved health services.
(d)
Provision of social welfare services through:
(1)
Programs and projects for the welfare of the youth and children, family and
community, women, the elderly, and the disabled;
(2)
Community-based rehabilitation programs for vagrants, beggars, street
children, scavengers, juvenile delinquents, and victims of drug abuse;
(3)
Livelihood and other pro-poor projects;
(4)
Nutrition services; and
(5)
Family planning services.
(e)
Provision of information services through investment and job placement
information systems, tax and marketing information systems, and maintenance of a
public library;
(f)
Provision of solid waste disposal or environmental management systems and
services or facilities related to general hygiene and sanitation;
(g)
Construction and maintenance of infrastructure facilities funded by the
municipality to serve the needs of the residents including, but not limited to:
(1)
Municipal roads and bridges;
(2)
School buildings and other facilities for public elementary and secondary
schools;
(3)
Clinics, health centers, and other health facilities necessary to carry out health
services;
(4)
Communal irrigation, small water impounding projects, and other similar
projects;
(5)
Fish ports;
(6)
Artesian wells, spring development, rainwater collectors, and water supply
systems;
(7)
Seawalls, dikes, drainage and sewerage, and flood control;
(8)
Traffic signals and road signs; and
(9)
Other similar facilities.
(h)
Construction, maintenance, and operation of municipal public markets,
slaughterhouses, and other economic enterprises;
(i)
Construction, maintenance, and operation of municipal cemeteries;
(j)
Construction, maintenance, and operation of tourism facilities and other
tourist attractions, including acquisition of equipment, regulation and supervision of
business concessions, and security services for such facilities; and
(k)
Provision of sites for police and fire stations and substations and municipal
jail.
Province
(a)
Agricultural extension and on-site research services and facilities through:
(1)
Prevention and control of plant and animal pests and diseases;
(2)
Establishment and maintenance of dairy farms, livestock markets, animal
breeding stations, and artificial insemination centers;
(3)
Assistance in the organization of farmer's and fishermen's cooperatives and
other collective organizations; and
(4)
Transfer of appropriate technology.
(b)
Industrial research and development services, as well as transfer of
appropriate technology;
(c)
Pursuant to national policies and subject to supervision, control, and review of
DENR, 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-hydroelectric projects for local purposes;

(d)
Subject to the provision of Rule XXIII on local health boards, health services
which include hospitals and other tertiary health services;
(e)
Social welfare services which include programs and projects on rebel returnees
and evacuees, relief operations, and population development services;
(f)
Construction and maintenance of provincial buildings, provincial jails,
freedom parks and public assembly areas, and other similar facilities;
(g)
Construction and maintenance of infrastructure facilities funded by the
province to serve the needs of the residents including, but not limited to:
(1)
Provincial roads and bridges;
(2)
Inter-municipal waterworks, drainage, and sewerage, flood control, and
irrigation systems;
(3)
Reclamation projects; and
(4)
Other similar facilities.
(h)
Planning and implementation of the programs and projects for low-cost
housing and other mass dwellings, except those funded by the Social Security System,
Government Service Insurance System, and the Home Development Mutual Fund.
National funds for these programs and projects shall be equitably allocated to the
regions in proportion to the ratio of the homeless to the population;
(i)
Provision for investment support services, including access to credit financing;
(j)
Upgrading and modernization of tax information and collection services
through the use of computer hardware and software and other means;
(k)
Provision for inter-municipal telecommunications services, subject to national
policy guidelines and standards; and
(l)
Planning and implementation of tourism development and promotion
programs.
City
All services and facilities provided by the municipality and the province and, in
addition thereto, the following:
(a)
Adequate communication and transportation facilities; and
(b)
Support services and facilities for education, police, and fire protection.
Art. 26.
Exceptions. Public works and infrastructure projects and other
facilities, programs, and services funded by the National Government under the
annual General Appropriations Act, other special laws, and pertinent executive
orders, and those wholly or partially funded from foreign sources, are not covered by
the devolution of basic services and facilities under this Rule, except in those cases
where the LGU concerned is duly designated as the implementing agency for such
projects, facilities, programs, and services.
Art. 27.
Specification and Testing of Materials and Procurement Systems. The
designs, plans, specifications, testing of materials, and procurement of equipment
and materials from both foreign and local sources necessary for the provision of basic
services and facilities shall be undertaken by the LGU based on national policies,
standards, and guidelines.
Art. 28.
Period of Devolution. The NGAs concerned shall devolve to LGUs the
responsibility for the provision of basic services and facilities enumerated in this Rule
within six (6) months after the effectivity of the Code on January 1, 1992.
Art. 29.
Funding. Basic services and facilities shall be funded from the share of
LGU in the proceeds of national taxes, other local revenues, and funding support
from the National Government and its instrumentalities including GOCCs, tasked by
law to establish and maintain such services or facilities. Any available fund or
resource of LGUs shall first be allocated for the provision of basic services and
facilities before using such fund or resource for other purposes, unless otherwise
provided under these Rules.

Art. 30.
Commercialization and Privatization. (a) LGUs may, by ordinance, sell,
lease, encumber, or otherwise dispose of public economic enterprises owned by them
in their proprietary capacity to ensure active participation of the private sector in
local governance.
(b)
Without prejudice to the social attributes of basic services and facilities, LGUs
may tap the private sector in the delivery of basic services and facilities.
(c)
Reasonable costs may be charged by the private sector concerned for the
operation and management of economic enterprises for the delivery of basic services
and facilities.
(d)
The guidelines issued by DILG in its Circular No. 90-104 dated December 3,
1990 (Annex A) may initially serve as bases for determining the nature and scope of
such services and facilities of LGU that could be assigned to the private sector.
(e)
The DILG shall formulate an accreditation scheme for the private sector, and a
system for cost recovery and privatization of local public enterprises.
Art. 31.
Augmentation Scheme. NGAS affected by devolution or the next higher
LGU may augment basic services and facilities assigned to a lower LGU. Standards
and guidelines for basic services and facilities prescribed by NGAs shall be the bases
for determining non-availability or inadequacy of such services and facilities in an
LGU.
In the event an LGU cannot continually support the salaries of devolved personnel,
maintain the operation of transferred assets, or finance the adequate delivery of basic
services and facilities, the President may, upon request of the LGU concerned, direct
the appropriate NGA to provide financial, technical, or other form of assistance. Such
assistance shall be extended at no extra cost on the part of the LGU.
RULE VI
EMINENT DOMAIN
Art. 32.
When Exercised. (a) An LGU may, through its chief executive and
acting pursuant to an ordinance, exercise the power of eminent domain for public
use, purpose, or welfare of the poor and the landless, upon payment of just
compensation, pursuant to the provisions of the Constitution and pertinent laws.
(b)
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 was not accepted.
Art. 33.
Public Use, Purpose, or Welfare. The following shall, among others, be
considered as public use, purpose, or welfare:
(a)
Socialized housing;
(b)
Construction or extension of roads, streets, sidewalks, viaducts, bridges,
ferries, levees, wharves, or piers;
(c)
Construction or improvement of public buildings;
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)

Establishment of parks, playgrounds, or plazas;

Establishment of market places;
Construction of artesian wells or water supply systems;
Establishment of cemeteries or crematories;
Establishment of drainage systems, cesspools, or sewerage systems;
Construction of irrigation canals or dams;
Establishment of nurseries, health centers, or hospitals;
Establishment of abattoirs; and
Building of research, breeding, or dispersal centers for animals.

Art. 34.
Prerequisites. In acquiring private property for public use or purpose,
LGU shall first establish the suitability of the property to be acquired for the use
intended, then proceed to obtain from the proper authorities the necessary locational
clearance and other requirements imposed under existing laws, rules and regulations.

Art. 35.
Offer to Buy and Contract of Sale. (a) The offer to buy private property
for public use or purpose shall be in writing. It shall specify the property sought to be
acquired, the reasons for its acquisition, and the price offered.
(b)
If the owner or owners accept the offer in its entirety, a contract of sale shall be
executed and payment forthwith made.
(c)
If the owner or owners are willing to sell their property but at a price higher
than that offered to them, the local chief executive shall call them to a conference for
the purpose of reaching an agreement on the selling price. The chairman of the
appropriation or finance committee of the sanggunian, or in his absence, any member
of the sanggunian duly chosen as its representative, shall participate in the
conference. When an agreement is reached by the parties, a contract of sale shall be
drawn and executed.
(d)
The contract of sale shall be supported by the following documents:
(1)
Resolution of the sanggunian authorizing the local chief executive to enter into
a contract of sale. The resolution shall specify the terms and conditions to be
embodied in the contract;
(2)
Ordinance appropriating the amount specified in the contract; and
(3)
Certification of the local treasurer as to availability of funds together with a
statement that such fund shall not be disbursed or spent for any purpose other than
to pay for the purchase of the property involved.
Art. 36.
Expropriation Proceedings. (a) If the LGU fails to acquire a private
property for public use, purpose, or welfare through purchase, LGU may expropriate
said property through a resolution of the sanggunian authorizing its chief executive to
initiate expropriation proceedings.
(b)
The local chief executive shall cause the provincial, city, or municipal attorney
concerned or, in his absence, the provincial or city prosecutor, to file expropriation
proceedings in the proper court in accordance with the Rules of Court and other
pertinent laws.
(c)
The LGU may immediately take possession of the property upon the filing of
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.
Art. 37.
Payment. 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.
RULE VII
RECLASSIFICATION OF AGRICULTURAL LANDS
Art. 38.
Authority to Reclassify Agricultural Lands. (a) A city or municipality
may reclassify agricultural lands through an ordinance enacted by the sanggunian
after conducting public hearings for the purpose provided that there exists an
approved zoning ordinance implementing its comprehensive land use plan.
(b)
Agricultural lands may be classified in the following cases:
(1)
When 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.
Art. 39.
Limitations. (a) 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)
and

For component cities and first to third class municipalities, ten percent (10%);

(3)
For fourth to sixth class municipalities, five percent (5%).
(b)
Agricultural lands distributed to agrarian reform beneficiaries pursuant to
Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform
Law, shall not be affected by the reclassification. Conversion of such lands into other
purposes shall be governed by Section 65 of said law.
(c)
The city or municipality shall provide mechanisms for the preservation and
protection of the tenurial rights of agrarian reform beneficiaries as provided under
RA 3844, otherwise known as Agricultural Land Reform Code, as amended, and
other applicable laws in the reclassification of agricultural lands not yet distributed
under RA 6657.
(d)
Nothing in this Rule shall be construed as repealing, amending, or modifying
in any manner the provisions of RA 6657.
Art. 40.
Reclassification in Excess of Percentage Limitation. The President may,
when public interest so requires and upon recommendation of the National
Economic and Development Authority (NEDA), authorize a city or municipality to
reclassify lands in excess of the percentage limitation set in the immediately
preceding article. Recommendation of NEDA shall be based on the requirements for
food production, human settlements, ecological considerations, and other relevant
factors in the city or municipality.
Art. 41.
Comprehensive Land Use Plans. (a) Subject to applicable laws, rules
and regulations, cities and municipalities shall continue to prepare their respective
comprehensive land use plans enacted through zoning ordinances. The requirements
for food production, human settlements, ecological balance, and industrial expansion
shall be considered in the preparation of such plans.
(b)
The comprehensive land use plan shall be the primary and dominant basis for
future use of local resources and for reclassification of agricultural lands.
(c)
The sangguniang panlalawigan shall review the comprehensive land use plans
and zoning ordinances of component cities and municipalities and shall adopt
comprehensive provincial land use plan, primarily based on the revised plans.
Art. 42.
Approval of Reclassification. When approval of an NGA is required for
reclassification, such approval shall not be unreasonably withheld. Failure to act on a
proper and complete application for reclassification within three months from receipt
of the same shall be deemed as approval thereof.
RULE VIII
CLOSURE AND OPENING OF ROADS OR PARKS
Art. 43.
Authority to Close or Open. An LGU may, through an ordinance,
permanently or temporarily close or open any road, alley, park, or square within its
jurisdiction.
Art. 44.
Permanent Closure. (a) No permanent closure of any local road, street,
alley, park, or square shall be affected unless there exists a compelling reason or
sufficient justification therefor such as, but not limited to, change in land use,
establishment of infrastructure facilities, projects, or such other justifiable reasons as
public welfare may require.
(b)
When necessary, an adequate substitute for the public facility that is subject to
closure shall be provided. No freedom park shall be closed permanently without
provision for its transfer or relocation to a new site.
(c)
No such way or place or any part thereof shall be permanently closed without
making provisions for the maintenance of public safety therein.

(d)
A property permanently withdrawn from public use may be used or conveyed
for any purpose for which other real property belonging to LGU may be lawfully used
or conveyed.
(e)
The ordinance authorizing permanent closure must be approved by at least
two-thirds (2/3) of all members of the sanggunian. Public hearings shall first be
conducted before any ordinance authorizing permanent closure of any local roads,
alley, park, or square is enacted. Notices of such hearings and copies of the proposed
ordinance shall be posted for a minimum period of three (3) consecutive weeks in
conspicuous places in the provincial capitol, or in the city, municipal, or barangay
hall of LGU and within the vicinity of the street or park proposed to be closed.
Art. 45.
Temporary closure. (a) Any national or local road, alley, park, or square
may be temporarily closed during actual emergency or fiesta celebrations, public
rallies, agricultural or industrial fairs, or 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, as follows:
(1)
During fiesta celebrations for a period not exceeding nine (9) days;
(2)
During agricultural or industrial fairs or expositions for a period as may be
determined to be necessary and reasonable;
(3)
When public works projects or activities are being undertaken for a period as
may be determined necessary for the safety, security, health, or welfare of the public
or when such closure is necessary to facilitate completion of the projects or activities.
(b)
An LGU may temporarily close and regulate the use of any local street, road,
thoroughfare, or public place where shopping malls, Sunday markets, flea or night
markets, or shopping areas may be established and where goods, merchandise,
foodstuff, commodities, or articles of commerce may be sold and dispensed to the
general public.
(c)
No national or local road, alley, park, or square shall be temporarily closed for
athletic, cultural, or civic activities not officially sponsored, recognized, or approved
by the LGU.
RULE IX
CORPORATE POWERS AND CORPORATE SEAL
Art. 46.
Corporate Powers. Every LGU, as a corporation, shall exercise the
following powers:
(a)
To have continuous succession in its corporate name;
(b)
To sue and be sued;
(c)
To have and use a corporate seal;
(d)
To acquire and convey real or personal property;
(e)
To enter into contracts; and
(f)
To exercise such other powers as are granted to corporations subject to the
limitations provided under the Code and other applicable laws.
Art. 47.
How Exercised. (a) Unless otherwise provided in the Code, no contract
may be entered into by the local chief executive in behalf of an LGU without prior
authorization by the sanggunian. A legible copy of such contract shall be posted at a
conspicuous place in the provincial capitol, or in the city, municipal, or barangay hall.
(b)
LGUs 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 the Code and other applicable laws.
(c)
An LGU shall duly register in its name all its acquired real property and shall
notify the Commission on Audit (COA) of such registration.
Art. 48.
Corporate Seal. LGUs may modify, change, or continue using their
existing corporate seals. Newly established LGUs or those without corporate seals
may create their own corporate seals in consultation with NHI, and shall register

such seals with DILG. Any change of corporate seal shall also be registered with
DILG.
RULE X
AUTHORITY TO NEGOTIATE AND SECURE GRANTS
Art. 49.
Extent of Authority. Local chief executive may, upon authority of the
sanggunian, negotiate and secure financial grants or donations in kind, in support of
the basic services and facilities enumerated under Rule V of these Rules, from local or
foreign assistance agencies without necessity of securing clearance, or approval
therefor from any NGA or from any higher LGU. In cases where the projects financed
by such grants or assistance affect national security, prior clearance shall be secured
by the LGU from the NGA concerned. If the NGA fails to act on the request for
clearance within thirty (30) days from receipt thereof, such request shall be deemed
approved.
Art. 50.
Monitoring System. Within thirty (30) days after the approval of these
Rules, the NEDA shall, in coordination with DILG and other NGAs concerned, design
and formulate a clearing and monitoring system to:
(a)
Assist LGUs and the granting institutions in the expeditious submission and
approval of project proposals, respectively;
(b)
Assist LGUs and the granting institutions in the monitoring of project status
and progress;
(c)
Ensure the granting institutions that no project shall be doubly funded by
other institutions; and
(d)
Ensure submission of satisfactory project status reports to the granting
institutions in compliance with grant agreements.
Art. 51.
Directory and Quarterly Information. (a) The NEDA shall annually
provide a directory of all local and foreign granting institutions which shall contain
the thrusts and priorities of such institutions and guidelines on application for grants
as well as other relevant information.
(b)
The NEDA and all other NGAs concerned shall provide quarterly information
to all LGUs on unutilized balances of granting institutions.
Art. 52.
Report. The local chief executive shall, within thirty (30) days upon
approval of the grant agreement or deed of donation, report the nature, amount, and
terms of such assistance to both Houses of Congress and the President, through
DILG.
RULE XI
NATIONAL-LOCAL GOVERNMENT RELATIONS
Art. 53.
National Government Supervision and Coordination. (a) The President
shall exercise general supervision over LGUs to ensure that their acts are within the
scope of their prescribed powers and functions.
The President shall exercise supervisory authority directly over provinces, highlyurbanized 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.
In exercising general supervision over LGUs the President shall be assisted primarily
by DILG, unless otherwise provided in the Code or elsewhere in these Rules and other
applicable laws.
(b)
The President may, upon request of LGU concerned, direct the appropriate
NGA to provide financial, technical, or other forms of assistance to LGU.
Art. 54.
Mandatory Consultations. (a) All NGAs shall conduct periodic
consultations with appropriate LGUs, people's organizations, NGOs, and other
concerned sectors of the community before any project or program is implemented in
their respective jurisdictions.

(b)
NGAs or GOCCs authorizing or involved in planning and implementation of
any project or program that may cause pollution, climatic change, depletion of nonrenewable resources, loss of cropland, rangeland, or forest cover, and extinction of
animal or plant species shall consult with LGUs, NGOs, and other sectors concerned
and explain the goals and objectives of the 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.
Art. 55.
Coordination with LGUs. (a) NGAs with project implementation
functions shall coordinate with one another and with LGUs concerned in the
discharge of these functions. They shall ensure the participation of LGUs both in the
planning and implementation of said national projects.
(b)
NGAs and GOCCs 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.
Art. 56.
Relationship of Local Chief Executive with National Functionaries
Stationed in LGUs. (a) The local chief executives may call upon any national official
or employee stationed in or assigned to an LGU to advise and regularly report to him
on matters affecting LGUs and make recommendations thereon; or to coordinate in
the formulation and implementation of all plans, programs, and projects.
(b)
When appropriate, the local chief executive may initiate an administrative or
judicial action against any National Government official or employee who may have
committed an offense in the performance of his official duties while stationed or
assigned in the LGU concerned.
(c)
The local chief executive shall inform the NGA concerned if any services have
adverse effects on the lives of the citizen that is foreseen or is being felt and to submit
proposals intended to prevent or mitigate the same preferably before project
implementation.
Art. 57.
Relations with 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 jurisdiction shall be
governed by the provisions of RA 6975, otherwise known as The Department of the
Interior and Local Government Act of 1990, and the rules and regulations issued
pursuant thereto (Annex C).
Art. 58.
Prior Approval or Clearance on Regular and Recurring Transactions.
Six (6) months after the effectivity of the Code, prior approval of or clearance from
NGAs shall no longer be required and recurring transactions and activities of LGUs.
RULE XII
INTER-LOCAL GOVERNMENT RELATIONS
Art. 59.
General Supervision of the Province Over Component Cities and
Municipalities. (a) The province, through its governor, shall exercise supervisory
authority over component cities and municipalities within its territorial jurisdiction
to ensure that they act within the scope of their prescribed powers and functions.
Highly-urbanized cities and independent component cities shall be independent of
the province.
(b)
The scope of supervision by the province over component cities and
municipalities shall include, but not limited to, the following:
(1)
The governor shall review executive orders issued by the mayor of the
component city or municipality, subject to the concurrence of the sangguniang
panlalawigan, except as otherwise provided under the Constitution and special
statutes. If the governor and the sangguniang panlalawigan fail to act on said
executive orders within thirty (30) days from receipt thereof, the same shall be
deemed consistent with law and therefore valid.

(2)
The sangguniang panlalawigan shall review all approved city or municipal
ordinances and resolutions approving the development plans and public investment
programs formulated by the city or municipal development councils.
(3)
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 of
the LGU.
(4)
The governor shall visit component cities and municipalities of the province at
least once every six (6) months to fully understand their 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 conduct visits and inspections to the
end that the governance of the province shall improve the quality of life of the
inhabitants.
(5)
The governor shall coordinate plans, measures, and developmental activities
with component cities and municipalities as well as NGAs concerned to:
(i)
Formulate peace and order plan of the province in coordination with mayors of
component cities and municipalities and the National Police Commission;
(ii)
Adopt adequate measures to safeguard and conserve land, mineral, marine,
forest, and other resources of the province, in coordination with mayors of
component cities and municipalities;
(iii) Coordinate efforts of component cities and municipalities in the national or
regional palaro or sports development activities; and
(iv) Call conventions, conferences, seminars, or meetings of any elective and
appointive officials of the province and component cities and municipalities.
(6)
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 shall be shared by the province, municipality, and barangay in the
manner prescribed in Rule XXXI of these Rules.
(7)
The province shall share its collections from the tax on sand, gravel, and other
quarry resources with its component city and municipality, and the barangay where
said resources are extracted.
Art. 60.
General Supervision of Cities and Municipalities Over Barangays. (a)
The city and municipality, through the city and municipal mayor, shall exercise
supervisory authority over every barangay in their respective territorial jurisdictions
to ensure that they act within the scope of their assigned powers and functions.
(b)
The scope of supervision by the city and municipality over their barangays
shall include, but not limited to, the following:
(1)
The city or municipal mayor shall review all executive orders promulgated by
the punong barangay within his jurisdiction, subject to the concurrence of the
sangguniang panlungsod or sangguniang bayan, except as otherwise provided under
the Constitution and special statutes.
(2)
The sangguniang panlungsod or sangguniang bayan concerned shall review all
barangay ordinances to determine whether or not such ordinances are consistent
with law.
(3)
The city or municipal mayor shall visit and inspect his barangays at least once
every six (6) months to fully understand the problems and conditions therein, listen
and give appropriate counsel to barangay officials and inhabitants, and inform them
of general laws and ordinances which especially concern them, and conduct visits and
inspections to the end that the governance of the city or municipality will improve the
quality of life of the inhabitants.

(4)
Cities or municipalities shall provide an annual aid of not less than One
Thousand Pesos (P1,000.00) per barangay.
(5)
Cities or municipalities shall coordinate with their barangays in the adoption
of complementary development plans and programs for a more effective solution of
problems or concerns affecting the LGU.
(6)
The sangguniang panlungsod or the sangguniang bayan shall 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 finances of the city or municipality allow said coverage.
(7)
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 public auction by the city or municipality shall be shared with their barangays in
the manner prescribed under these Rules.
Art. 61.
Inter-Local Government Loans, Grants, Subsidies and Other
Cooperative Undertakings. (a) Provinces, cities, and municipalities may, upon
approval of a majority of all members of the sanggunian concerned and in amounts
not exceeding their surplus funds, extend loans, grants, or subsidies to other LGUs
under such terms and conditions as may be agreed upon by the contracting parties.
(b)
LGUs may, through appropriate ordinances, group themselves, consolidate or
coordinate their efforts, sources, and resources for purposes commonly beneficial to
them. In support of such undertakings, LGUs may, upon approval by the sanggunian
concerned after 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 LGUs through
a Memorandum of Agreement.
(c)
LGUs may, upon approval of their respective sanggunians, jointly or severally
contract loans, credits and other forms of indebtedness for purposes mutually
beneficial to them.
(d)
The procedures in contracting inter-local government loans, credits and other
forms of indebtedness as well as other cooperative undertakings are as follows:
(1)
The local chief executive, in consultation with the local development council
(LDC), shall identify the programs, projects, and activities that may be considered;
(2)
The local chief executive shall negotiate with the prospective LGU partner or
partners on the terms and conditions of the agreement to be embodied in a
Memorandum of Agreement.
(3)
The local chief executives concerned may organize a team to negotiate the
terms and conditions of the joint loan. The final terms and conditions shall be subject
to the approval of the said local chief executives.
(4)
The local chief executives concerned shall submit the Memorandum of
Agreement to their respective sanggunians for approval and authority to enter into
inter-local government cooperative undertaking or joint loan or credit. In the case of
cooperative undertakings, the sanggunian shall conduct as many public hearings as
may be required to obtain the views and opinions of the affected sectors.
(5)
The loan agreement shall be signed jointly by the local chief executives
concerned.
(6)
Within ten (10) days from signing of the loan agreement, the local chief
executives concerned shall formally submit a copy of the approved loan agreement to
their respective sanggunians.
RULE XIII
LOCAL GOVERNMENT RELATIONS WITH PEOPLE'S ORGANIZATIONS,
NONGOVERNMENTAL ORGANIZATIONS, AND THE PRIVATE SECTOR

Art. 62.
Role of People's Organizations, Non-governmental Organizations and
the Private Sector. LGUs shall promote the establishment and operation of people's
organizations, NGOs, and the private sector, to make them active partners in the
pursuit of local autonomy. For this purpose, people's organizations, NGOs, and the
private sector shall be directly involved in the following plans, programs, projects, or
activities of LGUs:
(a)
Local special bodies;
(b)
Delivery of basic services and facilities;
(c)
Joint ventures and cooperative programs or undertakings;
(d)
Financial and other forms of assistance;
(e)
Preferential treatment for organizations and cooperatives of marginal
fishermen;
(f)
Preferential treatment for cooperatives development; and
(g)
Financing, construction, maintenance, operation, and management of
infrastructure projects.
Art. 63.
Local Special Bodies. (a) Local Development Councils The duly
designated representatives of accredited people's organizations, NGOs, and the
private sector operating in the provinces, cities, municipalities, or barangays shall sit
as members in the provincial, city, municipal, or barangay development councils, as
the case may be. The number of NGO representatives in each LDC shall not be less
than one-fourth (1/4) of the total membership of the fully organized council.
The local chief executive shall undertake the necessary information campaign to
ensure participation of all NGOs operating within his territorial jurisdiction.
(b)
Local Prequalification, Bids and Awards Committees Two (2) representatives
of people's organizations or NGOs that are represented in the LDC concerned, to be
chosen by the organizations themselves, and a practicing certified public accountant
from the private sector, to be designated by the local chapter of the Philippine
Institute of Certified Public Accountant, if any, shall sit as members of the provincial,
city, and municipal prequalification, bids and awards committees (PBACs).
(c)
Local Health Boards A representative from NGOs or the private sector
involved in health services in the province, city, and municipality shall sit as member
of the provincial, city or municipal health boards, respectively.
(d)
Local School Boards The representatives of NGOs or the private sector who
shall sit as members of the local school boards are as follows:
(1)
Provincial school board the duly elected president of the provincial federation
of parents-teachers associations, the duly elected representative of teachers'
organizations in the province, and the duly elected representative of the nonacademic personnel of public schools in the province;
(2)
City school board the duly elected president of the city federation of parentsteachers associations, the duly elected representative of teachers' organizations in the
city, and the duly elected representative of the non-academic personnel of public
schools in the city;
(3)
Municipal school board the duly elected 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 nonacademic personnel of the public schools in the municipality;
(e)
Local Peace and Order Councils The representatives of people's organizations
or NGOs in the local peace and order councils shall be the same as those provided
under Presidential EO 309, series of 1988, as amended, and the implementing rules
and regulations issued pursuant thereto (Annex B).
(f)
People's Law Enforcement Boards The representatives of people's
organizations or NGOs who sit as members of the boards shall be the same as those
provided under RA 6975, and the rules and regulations issued pursuant thereto.

Art. 64.
Procedures and Guidelines for Selection of Representatives of People's
Organizations, Non-governmental Organizations, or the Private Sector in Local
Special Bodies. (a) Call for application Within thirty (30) days from the approval of
these Rules and thereafter, within thirty (30) days from the organization of the newly
elected sanggunian, each sanggunian concerned shall call all community-based
people's organizations or NGOs, including business and professional groups, and
other similar aggrupations to apply with the LGU concerned for accreditation for
membership in the local special bodies. The application shall include a duly approved
board resolution of the people's organizations, NGOs or the private sector concerned,
certificate of registration, list of officers, accomplishments, and financial data of the
organization;
(b)
Accreditation The sanggunian concerned shall accredit the organizations
based on the following criteria:
(1)
Registration with either the Securities and Exchange Commission,
Cooperatives Development Authority, Department of Labor and Employment,
Department of Social Welfare and Development, or any recognized NGA that
accredits people's organizations, NGOs, or the private sector. If not formally
registered, the said organizations may be recognized by the sanggunian for purposes
only of meeting the minimum requirements for membership of such organizations in
local special bodies;
(2)
Organizational purpose and objectives include community organization and
development, institution-building, local enterprise development, livelihood
development, capability-building, and similar developmental objectives and
considerations;
(3)
Community-based with project development and implementation track record
of at least one (1) year;
(4)
Reliability as evidenced by the preparation of annual reports and conduct of
annual meetings duly certified by the board secretary of the organization; and
(5)
In the case of PBACs, the organization or any of its members shall have no
conflict of interest in the awarding of infrastructure or other projects.
(c)
Completion of the accreditation process The sanggunian shall complete the
accreditation process within sixty (60) days from the promulgation of these Rules or
within the same period from the organization of the newly elected sanggunian.
(d)
Meeting to choose representatives of people's organizations, NGOs, or the
private sector Within fifteen (15) days after the accreditation process, the DILG field
officer assigned in the LGU shall call all accredited people's organizations, NGOs, or
the private sector to a meeting where these organizations shall choose from among
themselves which people's organizations, NGOs or private sector will be represented
in the local special bodies. The selected people's organizations, NGOs or private
sector shall then designate their principal and alternate representatives who are
residents of the LGU concerned. In no case shall an organization or a representative
thereof be a member of more than one local special body within a province, city, or
municipality.
(e)
Term of office of selected representatives The term of office of a selected
representative shall be coterminous with that of the local chief executive concerned.
Should a vacancy arise, the selected people's organizations, NGOs, or the private
sector shall designate a replacement for the unexpired term.
Art. 65.
Delivery of Basic Services and Facilities. LGUs may, by ordinance, sell,
lease, encumber, or otherwise dispose of public economic enterprises owned by them
in their proprietary capacity to the private sector to ensure their active participation
in local governance.

Art. 66.
Joint Ventures and Cooperative Programs or Undertakings. LGUs may
enter into joint ventures and such other cooperative arrangements with people's
organizations, NGOs or the private sector, to engage in the delivery of certain basic
services; capability-building and livelihood projects; 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.
Art. 67.
Financial and Other Forms of Assistance. An LGU may, through its
chief executive and with the concurrence of the sanggunian concerned, provide
assistance, financial or otherwise, to people's organizations, NGOs, or the private
sector for economic, socially-oriented, environmental, or cultural projects to be
implemented within its territorial jurisdiction. An LGU may likewise grant tax
exemptions, tax relief and other tax incentives to the said organizations as provided
in these Rules.
Art. 68.
Preferential Treatment for Organizations and Cooperatives of Marginal
Fishermen. (a) The duly registered organizations and cooperatives of marginal
fishermen shall have preferential right in the grant by the sanggunian to erect fish
corrals, oyster, mussel or aquatic beds or bangus fry areas, within a definite zone of
the municipal waters.
(b)
The sanggunian may 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.
Art. 69.
Preferential Treatment for Cooperatives. Upon approval by a majority
vote of all its members, the sangguniang panlungsod or sangguniang bayan may
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 city or municipality as may be allowed by
applicable laws. Cooperatives shall be given preference in the grant of franchises as
contemplated in this Article.
Art. 70.
Financing, Construction, Maintenance, Operation, and Management of
Infrastructure Projects by the Private Sector. LGUs may enter into a contract with
any duly pre-qualified individual contractor for the financing, construction,
operation, and maintenance of any financially viable infrastructure facilities, under
the build-operate-and-transfer (B-O-T) agreement, subject to the applicable
provisions of RA 6957 authorizing the financing, construction, operation, and
maintenance of infrastructure projects by the private sector and the rules and
regulations issued thereunder and such other terms and conditions as may be agreed
upon by the contracting parties.
RULE XIV
COMMON PROVISIONS FOR ELECTIVE LOCAL OFFICIALS
Art. 71.
Local Officials. The elective officials of provinces, cities, municipalities,
and barangays are the following:
Provinces
(a)
governor;
(b)
vice governor; and
(c)
members of the sangguniang panlalawigan.
Cities
(a)
city mayor;
(b)
city vice mayor; and
(c)
members of the sangguniang panlungsod.
Municipalities
(a)
municipal mayor;

(b)
(c)

municipal vice mayor; and

members of the sangguniang bayan.

Barangays
(a)
punong barangay;
(b)
members of the sangguniang barangay; and
(c)
members of the sangguniang kabataan.
Art. 72.
Qualifications. All elective local officials shall possess the following
qualifications:
(a)
A citizen of the Philippines;
(b)
A registered voter in the province, city, municipality, or barangay where he
intends to be elected or, in the case of a member of the sangguniang panlalawigan,
sangguniang panlungsod, or sangguniang bayan, the district where he intends to be
elected;
(c)
A resident of the LGU concerned for at least one (1) year immediately
preceding the day of the election;
(d)
Able to read and write Filipino or any other Philippine language or dialect;
(e)
Candidates for the position of governor, vice governor, or member of the
sangguniang panlalawigan, or city mayor, vice mayor, or member of the sangguniang
panlungsod of highly-urbanized cities must be at least twenty-three (23) years of age
on election day;
(f)
Candidates for the position of mayor or vice mayor of independent component
cities, component cities, or municipalities must be at least twenty-one (21) years of
age on election day;
(g)
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;
(h)
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; and
(i)
Candidates for the position of member of 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.
Art. 73.
Disqualifications. The following persons shall be 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 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 of the Philippines;
(d)
Those with dual citizenship;
(e)
Fugitives from justice in criminal or nonpolitical cases here or abroad. Fugitive
from justice refers to a person who has been convicted by final judgment.
(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 the
Code; and
(g)
The insane of the feeble-minded.
Art. 74.
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 LGUs by the qualified voters therein. The
sangguniang kabataan chairman for each barangay shall be elected by the registered
voters of the katipunan ng kabataan, as provided in Rule XXVII of these Rules.

(b)
The regular members of the sangguniang panlalawigan, sangguniang
panlungsod, and sangguniang bayan shall be elected by district, as may be provided
by law. Sangguniang barangay members shall be elected at large.
(c)
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 by law. The Comelec shall promulgate
rules and regulations to effectively provide for the election of such sectoral
representatives.
Art. 75.
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
starting on the second Monday of May 1992 except for the barangay officials which
shall be on the second Monday of May, 1994 and sangguniang kabataan officials
which shall be one hundred twenty days (120) after the second Monday of May, 1994.
Art. 76.
Term of Office. (a) The term office of all elective local officials shall be
three (3) years, starting from noon of June 30, 1992 or such date as may be provided
by law except that of elective barangay officials, which shall begin after the regular
elections for barangay officials on the second Monday of May, 1994.
(b)
No elective local 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.
Art. 77.
Compensation and Benefits. (a) Compensation
(1)
Upon effectivity of the Code, an elective local official shall receive a minimum
monthly compensation corresponding to the salary grade as prescribed under RA
6758, otherwise known as the Salary Standardization Law, and the implementing
guidelines issued thereunder, as follows:
Provinces
(i)
governor
SG-30
(ii)
vice governorSG-28
(iii) members of the sangguniang panlalawigan
Cities
(i)
city mayor
SG-30
(ii)
city vice mayor
highly-urbanized cities
SG-28
components cities SG-26
(iii) members of the sangguniang panlungsod
highly-urbanized cities
SG-27
component cities SG-25
Municipalities
(i)
municipal mayor
within MMA SG-28
outside MMA
SG-27
(ii)
municipal vice mayor
within MMA SG-26

SG-27

outside MMA
SG-25
(iii) members of the sangguniang bayan within MMA
SG-25
outside MMA
SG-24
(2)
The ex officio members in the sangguniang panlalawigan shall receive their
authorized salaries and emoluments from the component city or municipality where
they are representing their respective ligas of federations. The province shall
appropriate funds for the additional allowances of said members such that their total

compensation shall be equivalent to the compensation actually received by their

elective counterparts in the sangguniang panlalawigan.
(3)
Any compensation beyond the minimum of the authorized salary grade 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 and provided further, that said
increase shall not exceed the budgetary limitation on personal services and provided
finally, that such compensation shall not be higher than the maximum fixed for their
positions provided under applicable laws or rules and regulations issued thereunder.
(4)
Notwithstanding the prohibition under the immediately preceding
subparagraph (3), elective local officials may, during their tenure, be allowed to
receive the minimum rate of the salary grade prescribed in this Article.
(5)
Elective barangay officials shall receive honoraria, allowances, and such other
emoluments as may be authorized by law or city, municipal or barangay ordinance in
accordance with the provisions of these Rules, but in no case shall it be less than One
Thousand Pesos (P1,000.000) per month for the punong barangay and Six Hundred
Pesos (P600.00) per month for the members of the sangguniang barangay, subject to
budgetary limitations prescribed in Rule XXXIV of these Rules.
(b)
Benefits
(1)
Elective local officials shall be entitled to the same leave privileges those
enjoyed by appointive local officials, including the cumulation and commulation
thereof.
(2)
Elective barangay officials shall:
(i)
Be entitled to a 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 funds appropriated by the National Government for the purpose;
(ii)
Be entitled, during their incumbency, to insurance coverage which shall
include, but not limited to temporary and permanent disability, double indemnity,
accident insurance, death and burial benefits, in accordance with RA 6942 entitled
An Act Increasing the Insurance Benefits of Local Government Officials and
Providing Funds Therefor.
The Government Service Insurance System 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 the
immediately preceding paragraph. For this purpose, the Government Service
Insurance System shall undertake an actual study, issue rules and regulations,
determine the premiums payable, and recommend to the 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.
(iii) Be entitled to free medical care including subsistence, medicines, and medical
attendance in any government hospital or institution. 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 elective barangay official 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;
(iv) 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
(v)
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
CSC.
(3) Elective barangay officials shall have preference in appointments to any
government position or in any GOCC, including its subsidiaries, after their tenure of
office, subject to the requisite qualifications as CSC may prescribe.
(4)
The sangguniang kabataan officials shall have the same privileges enjoyed by
other sangguniang barangay officials under the Code, subject to such requirements
and limitations provided in these Rules. During their incumbency, sangguniang
kabataan officials shall be exempt from payment of tuition and matriculation fees.
The said officials shall enroll in the state college or university within or nearest their
area of jurisdiction to qualify for the privilege.
Art. 78.
Prohibition Against Withholding of Benefits. Willful and malicious
withholding of any of the benefits accorded to barangay officials under this Rule shall
be punished with suspension or dismissal from office of the official or employee
responsible therefor.
Art. 79.
Residence and Office. During their incumbency,
(a)
Governors shall have his official residence in the capital town or capital city of
the province.
(b)
All other provincial elective officials shall hold office in the provincial capital
provided that upon resolution of the sangguniang panlalawigan, said 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.
(c)
City and municipal mayors shall hold office in their respective city and
municipal halls.
Art. 80.
Prohibition on Appointment to Other Public Office. No elective 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 local official shall hold any other office or employment in the government or
any subdivision, agency or instrumentality thereof, including GOCCs, or in any of
their subsidiaries.
Art. 81.
Appointment of Candidates Who Lost in an Election. 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
GOCCs or in any of their subsidiaries.
Art. 82.
Resignation. (a) Resignations of elective local officials shall be deemed
effective only upon acceptance by the following authorities:
(1)
By the President, in the case of governors and vice governors, mayors and vice
mayors of highly-urbanized cities, independent component cities, and municipalities
within MMA and other metropolitan political subdivisions as may be created by law;
(2)
By the governor, in the case of municipal mayors, municipal vice mayors,
mayors and vice mayors of component cities;
(3)
By the sanggunian concerned, in the case of sangguniang members; and
(4)
By the city or municipal mayor, in the case of barangay officials.
(b)
The DILG shall be furnished copies of the resignation letters of elective local
officials, together with the action taken by the authorities concerned.
(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 sanggunian members shall be deemed accepted
upon presentation before an open session of the sanggunian concerned and duly
entered in its records. This provision shall 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.
Art. 83.
Vacancies and Succession of Elective Local Officials. (a) What
constitutes permanent vacancy 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.
(b)
Permanent vacancies in the offices of the governor, vice governor, mayor and
vice mayor
(1)
If a permanent vacancy occurs in the office of the governor or mayor, the vice
governor or vice mayor concerned shall ipso facto 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 ipso facto 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 in this Article.
(2)
Permanent vacancy in the office of the punong barangay If a permanent
vacancy occurs in the office of the punong barangay, the highest ranking sangguniang
barangay member or, in case of his permanent inability, the second highest ranking
sanggunian member, shall ipso facto become the punong barangay.
(3)
Resolution of ties A tie between or among the highest ranking sangguniang
members shall be resolved by drawing of lot.
(4)
Term of successors. The successors as defined in this Article shall serve only
the unexpired terms of their predecessors.
(5)
Ranking in the sanggunian for purposes of succession 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 elections. For this purpose, the Comelec shall, within
sixty (60) days from the last local elections, prepare a ranking of sanggunian
members.
(c)
Permanent vacancies in the sanggunian
(1)
Permanent vacancies not covered by automatic succession Permanent
vacancies in the sanggunian where automatic successions do not apply shall be filled
by appointment in the following manner:
(i)
By the President, through the Executive Secretary, in the case of the
sangguniang panlalawigan, the sangguniang panlungsod of highly-urbanized cities
and independent component cities, and the sangguniang bayan of municipalities
within MMA and other metropolitan political subdivisions as may be created by law;
(ii)
By the governor, in the case of the sangguniang panlungsod of component
cities and the sangguniang bayan;
(iii) By the city or municipal mayor, in the case of the sangguniang barangay, upon
the recommendation of the sangguniang barangay concerned.
(2)
Eligible appointee
(i)
Except for the sangguniang barangay, only the nominee of the political party
under which the sanggunian member concerned has 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 provided in this Article. 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.

(ii)
For appointments made in accordance with the immediately preceding
subparagraph (i), the appointing authority shall see to it that a certificate of
membership of the appointee and nomination from the highest official of the political
party concerned are conditions sine qua non, and any appointment without such
certification and nomination shall be null and void ab initio and shall be a ground for
administrative action against the official responsible therefor.
(3)
Permanent vacancy caused by a sanggunian member not belonging to any
political party. 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 person who possesses all
the qualifications and none of the disqualifications for the position, to fill the vacancy.
(4)
Vacancy in the representation of the youth and the liga ng mga barangay in the
sanggunian In case of vacancy in the representation of the youth and the liga ng mga
barangay in the sanggunian, the vice president or the official next-in-rank of the
pederasyon ng mga sangguniang kabataan and the local chapter of the liga ng mga
barangay concerned shall automatically fill up said vacancy.
(d)
Temporary vacancy in the office of the local chief executive
(1)
Temporary incapacity 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.
(2)
Termination of temporary incapacity 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 chief executive concerned shall
also submit necessary documents showing that said legal causes no longer exist.
(3)
Temporary vacancy due to local travel
(i)
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 office of the local chief
executive. 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.
(ii)
In the event that the local chief executive concerned fails or refuses to issue
such authorization, the vice governor, the city or municipal vice mayor, 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 the immediately preceding subparagraph (i).
(iii) Except as provided in this Article, 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.
Art. 84.
Leaves of Absence. (a) Leaves of absence of elective local officials shall
be approved as follows:
(1)
Leaves of absence of governors and mayors of highly-urbanized cities,
independent component cities, and municipalities within MMA, shall be approved by
the President or his duly authorized representative;
(2)
Leaves of absence of vice governors or city or municipal vice mayors shall be
approved by the local chief executive concerned;

(3)
Leaves of absence of the members of the sanggunian and appointive
employees therein shall be approved by the vice governor or city or municipal vice
mayor concerned;
(4)
Leaves of absence of mayors of component cities or municipalities shall be
approved by the governor;
(5)
Leaves of absence of punong barangays shall be approved by the city or
municipal mayor; and
(6)
Leaves of absence of sangguniang barangay members shall be approved by the
punong barangay.
(b)
Whenever the application for leave of absence is not acted upon within five (5)
working days after receipt thereof, such application shall be deemed approved.
RULE XV
POWERS, DUTIES, AND FUNCTIONS OF LOCAL CHIEF EXECUTIVES
Art. 85.
Powers, Duties, and Functions of the Governor. (a) The governor, as
the chief executive of the province, shall exercise such powers and perform such
duties and functions as provided by the Code and other applicable laws.
(b)
For efficient, effective and economical governance the purpose of which is the
general welfare of the province and its inhabitants pursuant to Section 16 of the Code,
the governor shall:
(1)
Exercise general supervision and control over all programs, projects, services,
and activities of the province, and in this connection, shall:
(i)
Determine the guidelines of provincial policies and be responsible to the
sangguniang panlalawigan for the program of government;
(ii)
Direct the formulation of the provincial development plan, with the assistance
of the provincial development council, and upon approval thereof by the sangguniang
panlalawigan, implement the same;
(iii) 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;
(iv) Initiate and propose legislative measures to the 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;
(v)
Appoint all officials and employees whose salaries and wages are wholly or
mainly paid out of provincial funds and whose appointments are not otherwise
provided in the Code, as well as those he may be authorized by law to appoint;
(vi) Represent the province in all its business transactions and sign in its behalf all
bonds, contracts, and obligations, and such other documents upon authority of the
sangguniang panlalawigan or pursuant to law or ordinance;
(vii) Carry out such emergency measures as may be necessary during and in the
aftermath of man-made and natural disasters and calamities;
(viii) Determine the time, manner, and place of payment of salaries or wages of the
officials and employees of the province, in accordance with law ordinance;
(ix) 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 province;
(x)
Ensure that all executive officials and employees of the province faithfully
discharge their duties and functions as provided by law and the 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;

(xi) 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;
(xiii) 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;
(xiv) Act on leave applications of officials and employees appointed by him and the
commutation of the monetary value of leave credits in accordance with law;
(xv) Authorize official trips of provincial officials and employees outside of the
province for a period not exceeding thirty (30) days;
(xvi) Call upon any national official or employee stationed in or assigned to the
province to advise him on matters affecting the province and to make
recommendations thereon; coordinate with said official or employee 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 province;
(xvii) 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,
(xviii) Represent the province in inter-provincial or regional sports councils or
committees, and coordinate the efforts of component cities or municipalities in the
national or regional palaro or sports development activities;
(xix) 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
(xx) 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 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;
(2)
Enforce all laws and ordinances relative to the governance of the province and
the exercise of the appropriate corporate powers provided in Rule IX of these Rules,
implement all approved policies, programs, projects, services, and activities of the
province and, in addition to the foregoing, shall:
(i)
Ensure that the acts of the component cities and municipalities of the province
and of their officials and employees are within the scope of their prescribed powers,
duties, and functions;
(ii)
Call conventions, conference, 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;
(iii) Issue such executive orders for the faithful and appropriate enforcement and
execution of laws and ordinances;
(iv) Be entitled to carry the necessary firearm within his territorial jurisdiction;
(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 RA 6975; and
(vi) 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;
(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 in Rule XXX of these Rules, particularly those resources and revenues
programmed for agro-industrial development and countrywide growth and progress
and, relative thereto, shall:
(i)
Require each head of an officer or department to prepare and submit an
estimate or appropriations for the ensuing calendar year, in accordance with the
budget preparation process in Rule XXXIV of these Rules;
(ii)
Prepare and submit to the sanggunian for approval the executive and
supplemental budgets of the province for the ensuing calendar year in the manner
provided in Rule XXXIV of these Rules;
(iii) 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;
(iv) 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)
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
(vi) Institute or cause to be instituted administrative or 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 province 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 in Rule V of these Rules, and in addition thereto, shall:
(i)
Ensure that the construction and repair of roads and highways funded by the
National Government shall, as far as practicable, be carried out in a spatially
contiguous manner and in coordination with the construction and repair of the roads
and bridges of the province and of its component cities and municipalities; and,
(ii)
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.
(5)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.

Art. 86.
Powers, Duties, and Functions of the City Mayor. (a) The city mayor, as
chief executive of the city, shall exercise such powers and perform such duties and
functions as provided by the Code and other applicable laws.
(b)
For efficient, effective and economical governance the purpose of which is the
general welfare of the city and its inhabitants pursuant to Section 16 of the Code, the
city mayor shall:
(1)
Exercise general supervision and control over all programs, projects, services,
and activities of the city, and this connection, shall:
(i)
Determine the guidelines of city policies and be responsible to the sangguniang
panlungsod for the program of government;
(ii)
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;
(iii) 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 the general welfare
of the inhabitants and the needs to the city may require;
(iv) Initiate and propose legislative measures to the 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;
(v)
Appoint all officials and employees whose salaries and wages are wholly or
mainly paid out of city funds as whose appointments are not otherwise provided
under the Code, as well as those he may be authorized by law to appoint;
(vi) 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
sangguniang panlungsod or pursuant to law or ordinance;
(vii) Carry out such emergency as may be necessary during and in the aftermath of
man-made and natural disasters or calamities;
(viii) 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;
(ix) 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;
(x)
Ensure that all executive officials and employees of the city faithfully discharge
their duties and functions as provided by law and the 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 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 within MMA and other metropolitan political subdivisions as may be
created by law, within seventy-two (72) hours after their issuance;
(xiii) Visit 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 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;
(xiv) Act on leave applications of officials and employees appointed by him and the
commutation of the monetary value of their leave credits in accordance with law;
(xv) Authorize official trips of city officials and employees outside of the city for a
period not exceeding thirty (30) days;
(xvi) Call upon any national official or employee stationed 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 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;
(xviii) Solemnize marriages, any provision of law to the contrary notwithstanding;
(xix) 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
(xx) Submit to the governor, in the case of component cities; to the Office of the
President, in the case of highly-urbanized cities; to the Metropolitan Manila Council
chairman and to the Office of the President, in the case of cities of the MMA and
other metropolitan political subdivisions as may be created by law, 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 political, social and economic conditions; and supplemental
reports when unexpected events and situations arise at any time during the year,
particularly 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 country, region, province, or city.
(2)
Enforce all laws and ordinances relative to the governance of the city and in
the exercise of the appropriate corporate powers provided in Rule IX of these Rules,
implement all approved policies, programs, projects, services, and activities of the
city and, in addition thereto, shall:
(i)
Ensure that the acts of the city's barangays and of their officials and employees
are within the scope of their prescribed powers, duties, and functions;
(ii)
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 LGU
and its inhabitants;
(iii) Issue such executive orders for the faithful and appropriate enforcement and
execution of laws and ordinances;
(iv) 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 city and upon its approval, implement the
same; and as such representative, exercise general and operational control and
supervision over the local police forces in the city, in accordance with RA 6975; and
(vi) 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.
(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 in Section 18 of the Code, particularly those resources and revenues
programmed for agro-industrial development countryside growth and progress and,
relative thereto, shall:
(i)
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 preparations process under Rule XXXIV of these Rules;
(ii)
Prepare and submit to the sanggunian for approval the executive and
supplemental budgets of the city for the ensuing calendar year in the manner
provided for under Rule XXXIV of these Rules;
(iii) 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;
(iv) 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;
(vii) 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
property of the city; and
(viii) Institute or cause to be instituted administrative or judicial proceedings for
violation of ordinances in the collection of taxes, fees, or charges, and for the recovery
of funds and property; and to cause the city 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 in Rule V of these Rules, in addition thereto, shall:
(i)
Ensure that the construction and repair of roads and highways funded by the
National Government shall, as far as practicable, be carried out in a spatially
contiguous manner and in coordination with the construction and repair of the roads
and bridges of the city, and in the case of component cities, of the city and of the
province; and
(ii)
Coordinate the implementation of technical services, including public works
and infrastructure programs, rendered by NGAs in the case of highly urbanized and
independent component cities, and by national and provincial offices in the case of
component cities.
(5)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
Art. 87.
Powers, Duties, and Functions of the Municipal Mayor. (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 the Code and
other applicable 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 the
Code, the municipal mayor shall:
(1)
Exercise general supervision and control over all programs, projects, services,
and activities of the municipality, and in this connection, shall:
(i)
Determine the guidelines of municipal policies and be responsible to the
sangguniang bayan for the program of government;
(ii)
Direct the formulation of the municipal development plan, with the assistance
of the municipal development council, and upon approval thereof by the sangguniang
bayan, implement the same;
(iii) 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;
(iv) Initiate and propose legislative measures to the sangguniang bayan and, from
time to time as the situation may require, provide such information and data needed
or requested by said sanggunian in the performance of its legislative functions;
(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
provided for in the Code, as well as those he may be authorized by law to appoint;
(vi) Upon authorization by the sangguniang bayan, represent the municipality in
all its business transactions and sign on its behalf all bonds, contracts, and
obligations, and such other documents made pursuant to law or ordinance;
(vii) Carry out such emergency measures as may be necessary during and if the
aftermath of man-made and natural disasters and calamities;
(viii) 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;
(ix) 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 municipality;
(x)
Ensure that all executive officials and employees of the municipality faithfully
discharge their duties and functions as provided by law and the 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;
(xi) Examine the books, records and other documents of all offices, officials, agents
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;
(xii) Furnish copies of executive orders issued by him to the governor within
seventy-two (72) hours after their issuance provided that municipalities of MMA and
that of any metropolitan political subdivision, as may be created by law, shall furnish
copies of said executive orders to the metropolitan authority council chairman and to
the Office of the President;
(xiii) Visit 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 barangay officials
and inhabitants of general laws and 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 the life of the inhabitants;
(xiv) Act on leave applications of officials and employees appointed by him and the
commutation of the monetary value of leave credits according law;
(xv) Authorize official trips outside of the municipality of municipal officials and
employees for a period not exceeding thirty (30) days;
(xvi) 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 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 municipality concerned;
(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;
(xix) Conduct a palarong bayan, in coordination with the Department of Education,
Culture and Sports, as annual activity which shall feature traditional sports and
disciplines included in national and international games; and
(xx) Submit to the provincial governor the following reports: an annual report
containing a summary of all matters pertaining to the management, administration
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 MMA and other
metropolitan political subdivisions, as may be created by law, shall submit said
reports to their 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 in Rule IX of these Rules,
implement all approved policies, programs, projects, services and activities of the
municipality and, in addition, shall:
(i)
Ensure that the acts of the municipality's barangays and of their officials and
employees are within the scope of their prescribed powers, functions, duties and
responsibilities;
(ii)
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 municipality and its inhabitants;
(iii) Issue such executive orders as are necessary for the proper enforcement and
execution of laws and ordinances;
(iv) 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 RA 6975;
(vi) 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 municipal police forces are inadequate to cope
with the situation or the violators.
(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 under these Rules, particularly those resources and revenues
programmed for agro-industrial development and countrywide growth and progress,
and relative thereto, shall:
(i)
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 in Rule XXXIV of these Rules;
(ii)
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 in Rule XXXIV of these Rules;
(iii) 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;
(iv) 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 NGA, 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;
(vii) Adopt adequate measures to safeguard and conserve land, mineral, marine,
forest, and other resources of the municipality; provide efficient and effective supply
and property management in the municipality; and protect the funds, credits, rights
and other properties of the municipality; and
(viii) Institute or cause to be instituted administrative or 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 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 in Rule V of these Rules and, in addition thereto, shall:
(i)
Ensure that the construction and repair of roads and highways funded by the
National Government shall, as far as practicable, be 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
(ii)
Coordinate the implementation of technical services rendered by national and
provincial offices, including the public works and infrastructure programs in the
municipality.
(5)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
Art. 88.
Powers, Duties, and Functions of the Punong Barangay. (a) The
punong barangay, as the chief executive of the barangay, shall exercise such powers
and perform such duties and functions, as provided by the Code and other laws.
(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 the
Code, the punong barangay shall:

(1)
Enforce all laws and ordinances which are applicable within the barangay;
(2)
Negotiate, enter into, and sign contracts for and in behalf of the barangay,
upon authorization of the sangguniang barangay;
(3)
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;
(4)
Call and preside over the sessions of the sangguniang barangay and the
barangay assembly, and vote only to break a tie;
(5)
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;
(6)
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;
(7)
In coordination with the barangay development council, prepare the annual
executive and supplemental budgets of the barangay;
(8)
Approve vouchers relating to the disbursement of barangay funds;
(9)
Enforce laws and regulations relating to pollution control and protection of the
environment;
(10) Administer the operation of the katarungang pambarangay in accordance with
the provisions of the Code;
(11) Exercise general supervision over the activities of the sangguniang kabataan;
(12) Ensure the delivery of basic services as mandated in Rule V of these Rules;
(13) 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;
(14) Promote the general welfare of the barangay; and
(15) Exercise such other powers and perform such other duties and functions as
may be prescribed by law of ordinance.
(c)
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.
RULE XVI
POWERS, DUTIES, AND FUNCTIONS OF VICE GOVERNORS,
CITY AND MUNICIPAL VICE MAYORS
Art. 89.
Powers, Duties, and Functions of the Vice Governor. The vice governor
shall:
(a)
Be the presiding officer of the sangguniang panlalawigan and sign all warrants
drawn on the provincial treasury for all expenditures appropriated for the operation
of the sangguniang panlalawigan;
(b)
Appoint all officials and employees of the sangguniang panlalawigan, except
those whose manner of appointment is specifically provided under these Rules,
subject to civil service law, rules and regulations;
(c)
Assume the office of the governor for the unexpired term of the latter in the
event of permanent vacancy as provided under these Rules; and
(d)
Exercise the powers and perform the duties and functions of the governor in
cases of temporary vacancy as provided under these Rules.
Art. 90.
Powers, Duties, and Functions of the City Vice Mayor. The city vice
mayor shall:
(a)
Be the presiding officer of the sangguniang panlungsod and sign all warrants
drawn on the city treasury for all expenditures appropriated for the operation of the
sangguniang bayan;

(b)
Appoint all officials and employees of the sangguniang bayan, except those
whose manner of appointment is specifically provided under these Rules, subject to
civil service law, rules and regulations;
(c)
Assume the office of the city mayor for the unexpired term of the latter in the
event of permanent vacancy as provided under these Rules; and
(d)
Exercise the powers and perform the duties and functions of the city mayor in
cases of temporary vacancy as provided under these Rules.
Art. 91.
Powers, Duties, and Functions of the Municipal Vice Mayor. The
municipal vice mayor shall:
(a)
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;
(b)
Appoint all officials and employees of the sangguniang bayan, except those
whose manner of appointment is specifically provided under these Rules, subject to
civil service law, rules and regulations;
(c)
Assume the office of the municipal mayor for the unexpired term of the latter
in the event of permanent vacancy as provided under these Rules; and
(d)
Exercise the powers and perform the duties and functions of the municipal
mayor in cases of temporary vacancy as provided under these Rules.
RULE XVII
LOCAL LEGISLATIVE BODIES AND LOCAL LEGISLATION
Art. 92.
Local Legislative Bodies. Local legislative power shall be exercised by
the following legislative bodies of the LGUs:
(a)
Sangguniang panlalawigan for the province;
(b)
Sangguniang panlungsod for the city;
(c)
Sangguniang bayan for the municipality; and
(d)
Sangguniang barangay for the barangay.
Art. 93.
Composition. (a) Sangguniang panlalawigan
(1)
The sangguniang panlalawigan shall be composed of the vice governor as the
presiding officer, the regular sangguniang 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 members of municipalities and component cities, and the sectoral
representatives, as members.
(2)
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 by law.
(b)
Sangguniang panlungsod
(1)
The sangguniang panlungsod shall be composed of the city vice mayor as the
presiding officer, the regular sangguniang 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 representatives, as members.
(2)
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 by law.
(c)
Sangguniang bayan
(1)
The sangguniang bayan shall be composed of the municipal vice mayor as
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.
(2)
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 by law.
(d)
Sangguniang barangay The sangguniang 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.
Art. 94.
Manner of Election and Number of Elective Sanggunian Members. (a)
Sangguniang panlalawigan
(1)
For provinces with two (2) or more legislative districts, the elective members
of the sangguniang panlalawigan shall be elected by legislative districts. For this
purpose, they shall be apportioned equitably provided that if equal division is not
possible, the remaining member or members shall be elected in the district or
districts with the greater number of population or, if they be the same, with the
greater number of voters; and provided further, that if a legislative district comprises
an independent component city such that an equal distribution of sanggunian
members does not result in equitable apportionment on the basis of population of the
province, the Comelec shall allocate the number among the districts in proportion to
the population or constituencies voting for the members of the sangguniang
panlalawigan.
(2)
For provinces with only one (1) representative district, the Comelec shall
divide the members into to (2) districts for purposes of provincial representation as
nearly as practicable according to the number of inhabitants. Each district
comprising a compact, contiguous and adjacent territory, and the number of elective
members of their respective sanggunians shall be equitably apportioned between the
districts in accordance with the standard or formula provided in the immediately
preceding subparagraph (1).
(3)
First and second class provinces shall each have ten (10) elective members;
third and fourth class provinces, eight (8); and fifth and sixth class provinces, six (6)
to be elected at large by the qualified voters therein.
(b)
Sangguniang panlungsod
(1)
For purposes of the regular elections on May 11, 1992, elective members of the
sangguniang panlungsod shall be elected at large in accordance with existing laws.
Beginning with the regular elections in 1995, said members shall be elected by
district.
(2)
The number and election of elective members of the sangguniang panlungsod
in the MMA, City of Cebu, City of Davao and any other city with two (2) or more
legislative districts shall continue to be governed by the provisions of Sections 2 and 3
of RA 6636, as amended, to wit:
"Sec. 2.
Metro Manila Area. ... the City of Manila, Quezon City and the City of
Caloocan shall have six (6) councilors for each of their representative districts who
shall be residents thereof to be elected by the qualified voters therein. The City of
Pasay ... which comprises a representative district, shall have twelve (12) councilors ...
to be elected at large by the qualified voters of the said city ...."
"Sec. 3.
Other Cities. ... The City of Cebu, City of Davao, and any other city with
more than one representative district shall have eight (8) councilors for each district
who shall be residents thereof to be elected by the qualified voters therein, provided

that the cities of Cagayan de Oro, Zamboanga, Bacolod, Iloilo and other cities
comprising a representative district shall have twelve (12) councilors each and all
other cities shall have ten (10) councilors each to be elected at large by the qualified
voters of the said cities provided that in no case shall the present number of
councilors according to their charters be reduced."
(c)
Sangguniang bayan
(1)
For purposes of the regular elections on May 11, 1992, elective members of the
sangguniang bayan shall be elected at large in accordance with RA 6636. Beginning
with the regular elections in 1995, they shall be elected by district.
(2)
The number and election of elective members of the sangguniang bayan of the
municipalities in the MMA shall be governed by the provisions of Section 2 of RA
6636, as amended, to wit:
"Sec. 2.
Metro Manila Area . . . The municipalities of Makati, Paraaque, Pasig,
Marikina, and Valenzuela, each of which comprises a representative district, shall
have twelve (12) councilors each to be elected at large by the qualified voters of the
said ... municipalities. All the other municipalities within the Metropolitan Manila
Area shall have ten (10) councilors each, with the exception of the municipality of
Pateros which shall have eight (8) councilors, to be elected at large by their respective
qualified voters."
(3)
All municipalities shall have eight members to be elected at large by the
qualified voters therein.
(d)
Sangguniang barangay
(1)
The sangguniang barangay members shall be elected at large in their
respective barangays by the qualified voters therein.
(2)
The sangguniang kabataan chairman for each barangay shall be elected by the
registered voters of the katipunan ng kabataan, as provided in Rule XXVII of these
Rules.
Art. 95.
Manner of Election of Sectoral Representatives in the Sanggunian. The
Comelec shall promulgate rules and regulations to effectively provide for the election
of sectoral representatives in the sangguniang panlalawigan, sangguniang
panlungsod, and sangguniang bayan.
Art. 96.
Term of Office. The term of office of sanggunian members is provided
under Rule XIV of these Rules.
Art. 97.
Compensation and Other Benefits. Compensation and other benefits of
sanggunian members are provided in Rule XIV of these Rules.
Art. 98.
Powers, Duties, and Functions of the Sangguniang Panlalawigan. (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 the Code and in the proper
exercise of the corporate powers of the province as provided in Rule IX of these
Rules, and shall:
(1)
Approve ordinances and pass resolutions necessary for an efficient and
effective provincial government and 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 prevent and suppress
lawlessness, disorder, riot, violence, rebellion, or sedition and impose penalties for
the violation of said ordinances;
(iii) Approve ordinances imposing imprisonment not exceeding one (1) year or a
fine not exceeding Five Thousand Pesos (P5,000.00) or both imprisonment and fine
at the discretion of the court, for violation of a provincial ordinance;

(iv) 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 aftermath of said disasters and 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 province;
(vi) 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;
(vii) Subject to the provisions of the Code and applicable laws, determine the
powers and duties of officials and employees of the province;
(viii) Determine the positions and the salaries, wages, allowances and other
emoluments and benefits of officials and employees paid wholly or mainly from
provincial funds and provide for expenditures necessary for the proper conduct of
programs, projects, services, and activities of the provincial government;
(ix) 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 provincial 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
provincial government; and
(xi) When the finances of the provincial government allow, provide for additional
allowances and other benefits to judges, prosecutors, public elementary and high
school teachers, and other national government officials stationed or assigned to the
province.
(2)
Generate and maximize the use of resources and revenues for the development
plans, program objectives and priorities of the province as provided in Section 18 of
the Code, with particular attention to agro-industrial development and countrywide
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;
(ii)
Subject to the provisions of Book II of the Code and applicable laws and upon
the majority vote of the members of the sangguniang panlalawigan, enact ordinances
levying taxes, fees and charges, prescribing the rates thereof for general and specific
purposes, and granting tax exemptions, incentives or reliefs;

(iii) Subject to the provisions of Book II of the Code and applicable laws and upon a
majority vote of all the 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 the Code and applicable laws and upon a
majority vote of all the members of the sangguniang panlalawigan, 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 province; and upon a 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 propriety capacity, subject to applicable laws,
rules and regulations;
(vi) Prescribe reasonable limits and restraints on the use of property within the
jurisdiction of the province;
(vii) Review the comprehensive land use plans and zoning ordinances of
component cities and municipalities and adopt a comprehensive provincial land use
plan, subject to applicable laws; and
(viii) Adopt measures to enhance the full implementation of the national agrarian
reform program in coordination with the Department of Agrarian Reform;
(3)
Subject to the provisions of Book II of the 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:
(i)
Fix and impose reasonable fees and charges for all services rendered by the
provincial government to private persons or entities; and
(ii)
Regulate and fix the license fees for such activities as provided under the Code.
(4)
Approve ordinances which shall ensure the efficient and effective delivery of
the basic services and facilities as provided under Rule V of these Rules, 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;
(ii)
Subject to applicable laws, facilitate or provide for the establishment and
maintenance of a waterworks systems or district waterworks for supplying water to
inhabitants of component cities and municipalities;
(iii) Subject to the availability of funds and to applicable 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 jurisdiction or for students residing within the province;
(v)
Approve measures and adopt quarantine regulations to prevent the
introduction and spread of diseases within its territorial jurisdiction;
(vi) Provide for the care of paupers, the aged, the disabled, the sick, persons of
unsound mind, abandoned minors, abused children, 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;
(viii) Establish a provincial council whose purpose is the promotion of culture and
the arts, coordinate with government agencies and non-governmental organizations
and, subject to the availability of funds, appropriate funds for the support and
development of the same;
(ix) 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 NGOs to support the programs and projects of the
elderly; and
(5)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
Art. 99.
Powers, Duties, and Functions of the Sangguniang Panlungsod. (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 the Code and in the proper exercise of the
corporate powers of the city as provided in Rule IX of these Rules, and shall:
(1)
Approve ordinances and pass resolutions necessary for an efficient and
effective city government, and relative thereto, 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;
(ii)
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;
(iii) Approve ordinances imposing imprisonment not exceeding one (1) year or a
fine not exceeding Five Thousand Pesos (P5,000.00) or both imprisonment and fine
at the discretion of the court, for violation of a city ordinance;
(iv) 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;
(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 city;
(vi) 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, slach and burn farming, and such other
activities which result in pollution, acceleration of eutrophication of rivers and lakes,
or of ecological imbalance;
(vii) Subject to the provisions of the Code and applicable laws, determine the
powers and duties of officials and employees of the city;
(viii) Determine the positions and the salaries, wages, allowances and other
emoluments and benefits of officials end employees paid wholly or mainly from city

funds and provide for expenditures necessary for the proper conduct of programs,
projects, services, and activities of the city government;
(ix) 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 city 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 city
government;
(xi) When the finances of the city 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 city;
(xii) 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
(xiii) Provide 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;
(2)
Generate and maximize the use of resources and revenues for the development
plans, program objectives and priorities of the city as provided in Section 18 of the
Code, with particular attention to agro-industrial development and citywide 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;
(ii)
Subject to the provisions of Book II of the Code and applicable laws and upon a
majority vote of all the members of the sangguniang panlungsod, enact ordinances
levying taxes, fees and charges, prescribing the rates thereof for general and specific
purposes, and granting tax exemptions, incentives or reliefs;
(iii) Subject to the provisions of Book II of the Code and upon a majority vote of all
the members of the sangguniang panlungsod, authorize the city mayor to negotiate
and contract loans and other forms of indebtedness;
(iv) Subject to the provisions of Book II of the Code and applicable laws and upon a
majority vote of all the members of the sangguniang panlungsod, 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 city; and, upon a 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 propriety capacity, subject to existing laws, rules and
regulations;
(vi) Prescribe reasonable limits and restraints on the use of property within the
jurisdiction of the city;
(vii) 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;

(viii) Reclassify agricultural lands within the jurisdiction of the city, subject to the
provisions of Rule VII of these Rules;
(ix) 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 that where approval of an NGA 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 said period shall be deemed as approval thereof;
(xi) Subject to the provisions of Book II of the 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;
(xii) 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 the Code;
(xiii) Grant loans or provide grants to other LGUs or to national, provincial, and city
charitable, benevolent or educational institutions provided that said institutions are
operated and maintained within the city;
(xiv) Regulate the numbering of residential, commercial and other buildings; and
(xv) Regulate the inspection, weighing and measuring of articles of commerce.
(3)
Subject to the provisions of Book II of the 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:
(i)
Fix and impose reasonable fees and charges for all services rendered by the
city government to private persons or entities;
(ii)
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;
(iii) 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;
(iv) 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 an
Communications, regulate the operation of tricycles and grant franchises for the
operation thereof within the territorial jurisdiction of the city; and
(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 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 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
expense of the owner, administrator or tenant concerned; or require the filing up of
any land or premises to a grade necessary for proper sanitation;
(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 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;
(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 applicable laws, rules and regulations.
(5)
Approve ordinances which shall ensure the efficient and effective delivery of
the basic services and facilities as provided in Rule V of these Rules, 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;
(ii)
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;
(iii) Authorize the establishment, maintenance, and operation by the city
government of ferries, wharves, and other structures intended to accelerate
productivity related to marine and seashore or offshore activities;
(iv) 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;
(vi) 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 applicable 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 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;
(viii) 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 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
property; and regulate the construction and use of private water closets, privies, and
other similar structures in buildings and homes;
(ix) 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 availability of funds and to applicable 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 education institutions
supported by the city;
(xi) Establish a scholarship fund for poor but deserving students in schools located
within its jurisdiction or for students residing within the city;
(xii) Approve measures and adopt quarantine regulations to prevent the
introduction and spread of diseases;
(xiii) Provide for an efficient and effective system of solid waste and garbage
collection and disposal; prohibit littering and placing or throwing of garbage, refuse
and other filths and wastes;
(xiv) Provide for the care of the disabled, the aged, the sick, paupers, persons of
unsound mind, abandoned minors, juvenile delinquents, drug dependents, abuse
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 them;
(xv) 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 city;
(xvi) Establish a city council whose purpose is the promotion of culture and the arts,
coordinate with NGAs and NGOs and, subject to availability of funds, appropriate
funds for the support and development of 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 NGOs, subject to the availability of funds, appropriate funds to support programs
and projects for the benefit of the elderly; and
(6)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
Art. 100.
Powers, Duties, and Functions of the Sangguniang Bayan. (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 the Code and in the proper
exercise of the corporate powers of the municipality as provided in Rule IX of these
Rules, and shall:
(1)
Approve ordinances and pass resolutions necessary for an efficient and
effective municipal governance, and relative thereto, 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;
(ii)
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;
(iv) 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 of publications, and such other activities inimical to the welfare and morals
of the inhabitants of the municipality;
(vi) 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;
(vii) Subject to the provisions of the Code and applicable laws, determine the
powers and duties of officials and employees of the municipality;
(viii) Determine the positions and the salaries, wages, allowances and other
emoluments and benefits of officials and employees paid wholly or mainly from
municipal funds and provide for expenditures necessary for the proper conduct of
programs, projects, services, and activities of the municipal government;
(ix) 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;
(xi) When the finances of the municipality 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 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 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 for the municipality as provided in Section
18 of the 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 the
municipality, or for other purposes not contrary to law, in order to promote the
general welfare of the municipality and its inhabitants;
(ii)
Subject to the provisions of Book II of the Code and applicable laws and upon
the majority vote of all the 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;
(iii) Subject to the provisions of Book II of the Code and upon a majority vote of all
the members of the sangguniang bayan, authorize the municipal mayor to negotiate
and contract loans and other forms of indebtedness;
(iv) Subject to the provisions of Book II of the Code and applicable laws and upon a
majority vote of all the members of the sangguniang bayan, enact ordinances
authorizing the floatation 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 a majority vote of all the members
of the sangguniang bayan, authorize the municipal mayor to lease to private parties
such public buildings held in the propriety capacity, subject to existing laws, rules
and regulations;
(vi) Prescribe reasonable limits and restraints on the use of property within the
jurisdiction of the municipality;
(vii) 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;
(viii) Reclassify agricultural lands within the jurisdiction of the municipality, subject
to the provisions of Rule VII of these Rules;
(ix) 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 the 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 collect
processing fees and other charges, the proceeds of which shall accrue entirely to the
municipality provided 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;
(xi) Subject to the provisions of Book II of the Code, grant the exclusive privilege of
constructing fish corrals or fish pens, or taking or catching of bangus fry, prawn fry or
kawag-kawag or fry of any species or fish within the municipal waters;
(xii) 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 the Code;
(xiii) Grant loans or provide grants to another LGUs or to national, 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) Regulate the inspection, weighing and measuring of articles of commerce.
(3)
Subject to the provisions of Book II of the 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;
(ii)
Regulate any business, occupation, or practice of profession or calling which
does not require government examination within the municipality and the conditions
under which the license for said business or practice of profession may be issued or
revoked;
(iii) 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;
(iv) 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;
(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 establishment, operation, and maintenance 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 applicable laws, rules and regulations.
(5)
Approve ordinances which shall ensure the efficient and effective delivery of
the basic services and facilities as provided in Rule V of these Rules, 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;
(ii)
Establish markets, slaughterhouses, or animal corrals and authorize the
operation thereof, and regulate the 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) 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;
(vi) 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 applicable 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, or
watershed used in connection with the water service; and regulate the consumption,
use or wastage of water;
(viii) 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
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
property; and, regulate the construction and use of private water closets, privies and
other similar structures in buildings and homes;
(ix) 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 applicable 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;
(xi) Establish a scholarship fund for poor but deserving students residing within
the municipality in schools located within its jurisdiction;
(xii) Approve measures and adopt quarantine regulations to prevent the
introduction and spread of diseases;
(xiii) 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;
(xiv) Provide for the care of paupers, the aged, the disabled, 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 persons;
(xv) 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;
(xvi) Establish a municipal council whose purpose is the promotion of culture and
the arts, coordinate with the NGAs and NGOs and, subject to the availability of funds,
appropriate funds for the support and development of the same; and
(xvii) 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 NGOs and, subject to availability of funds, appropriate funds to support
programs and projects for the benefit of the elderly; and
(6)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law of ordinance.
Art. 101.
Powers, Duties, and Functions of the Sangguniang Barangay. (a) The
sangguniang barangay, as the legislative body of the barangay, shall:

(1)
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;
(2)
Enact tax and revenue ordinances, subject to the limitations imposed in the
Code;
(3)
Enact annual and supplemental budgets in accordance with the provisions of
these Rules;
(4)
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;
(5)
Submit to the sangguniang panlungsod or sangguniang bayan such
suggestions or recommendations as it may see fit for the improvement of the
barangay or for the welfare of the inhabitants thereof;
(6)
Assist in the establishment, organization, and promotion of cooperative
enterprises that will improve the economic condition and well-being of the residents;
(7)
Regulate the use of multi-purpose halls, multi-purpose 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
with the jurisdiction of the barangay and charge reasonable fees for the use thereof;
(8)
Solicit or accept monies, materials and voluntary labor for specific public
works and cooperative enterprises of the barangay from residents, landowners,
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 that monies or properties donated by private agencies and
individuals for specific purposes shall accrue to the barangay as trust fund;
(9)
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 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 diem 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 the Code provided
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;
(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 shall be first satisfied and 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 and 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 fundraising activity was undertaken;
(12) Authorize the punong barangay to enter into contracts in behalf of the
barangay, subject to the provisions of the Code;

(13) 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;
In the exercise of this power, the sangguniang barangay shall observe the applicable
guidelines on government procurement of supplies issued by COA.
(14) Prescribe fines in amounts not exceeding One Thousand Pesos (P1,000.00) for
violation of barangay ordinances;
(15) Provide for the administrative needs of the lupong tagapamayapa and the
pangkat ng tagapagkasundo;
(16) Provide for the organization of community brigades, barangay tanod, or
community service units as may be necessary;
(17) 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;
(18) Adopt measures to prevent and control the proliferation of squatters and
mendicants in the barangay;
(19) 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;
(20) Adopt measures towards the prevention and eradication of drug abuse, child
abuse, and juvenile delinquency;
(21) Initiate the establishment of a barangay high school, whenever feasible, in
accordance with law;
(22) 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;
(23) 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.
Art. 102.
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.
(b)
The presiding officer shall vote only to break a tie.
(c)
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.
Art. 103.
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 among others, 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
provided the sectoral representatives shall automatically chair the committee
corresponding to their sectoral group. The president of the local chapters of the liga
ng mga barangay in provincial, city, or municipal level shall likewise automatically
chair the committee on barangay affairs or its equivalent.

(2)
The order and calendar of business for each session;
(3)
The legislative process;
(4)
The parliamentary procedures which include the conduct of members during
the sessions;
(5)
The discipline of members for disorderly behavior and absences without
justifiable causes 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 and
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.
Art. 104.
Full Disclosure of Financial and Business Interests of Sanggunian
Members. (a) Every sanggunian members 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, capital, or investment in the entity or firm to which the
ordinance or resolution may relate; and
(2)
Contracts or agreements with any person or entity which the ordinance or
resolution under consideration may effect.
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 to the service of the public.
(b)
The disclosure required under this Rule 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 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 in this Article.
Art. 105.
Sessions. (a) The sessions of the sanggunian may either be regular or
special.
(1)
Regular sessions 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 panlungsod, and sangguniang bayan, and twice a month for
the sangguniang barangay.
(2)
Special sessions
(i)
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.
(ii)
A written notice to the sanggunian members stating the date, time and
purpose of the meeting shall be served personally or left with a member of his

household at his usual place of residence at least twenty-four (24) hours before the
special session is held.
(iii) Unless otherwise agrees upon by two-thirds (2/3) vote of the members
present, there being a quorum, no other matter may be considered at a special
session except those stated in the notice.
(b)
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, whether regular or special, may be held in a single day.
(c)
Each sanggunian shall keep a journal and record of its proceedings which may
be published upon resolution of the sanggunian concerned.
Art. 106.
Quorum. (a) A majority of all the members of the sanggunian who have
been elected and qualified shall constitute a quorum to transact official business.
(b)
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.
(c)
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 LGU concerned, to arrest the absent member and present him at
the session.
(d)
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.
Art. 107.
Ordinances and Resolutions. The following rules shall govern the
enactment of ordinances and resolutions:
(a)
Legislative actions of a general and permanent character shall be enacted in
the form of ordinances, while those which are of temporary character shall be passed
in the form of resolutions. Matters relating to proprietary functions and to private
concerns shall also be acted upon by resolution.
(b)
Proposed ordinances and resolutions shall be in writing and shall contain an
assigned number, a title or caption, an enacting or ordaining clause, and the date of
its proposed effectivity. In addition, every proposed ordinance shall be accompanied
by a brief explanatory note containing the justification for its approval. It shall be
signed by the author or authors and submitted to the secretary to the sanggunian who
shall report the same to the sanggunian at its next meeting.
(c)
A resolution shall be enacted in the same manner prescribed for an ordinance,
except that it need not go through a third reading for its final consideration unless
decided otherwise by a majority of all the sanggunian members.
(d)
No ordinance or resolution shall be considered on second reading in any
regular meeting unless it has been reported out by the proper committee to which it
was referred or certified as urgent by the local chief executive.
(e)
Any legislative matter duly certified by the local chief executive as urgent,
whether or not it is included in the calendar of business, may be presented and
considered by the body at the same meeting without need of suspending the rules.
(f)
The secretary to the sanggunian of the province, city or municipality shall
prepare copies of the proposed ordinance or resolution in the form it was passed on
second reading, and shall distribute to each sanggunian member a copy thereof,
except that a measure certified by the local chief executive concerned as urgent may

be submitted for final voting immediately after debate or amendment during the
second reading.
(g)
No ordinance or resolution passed by the sanggunian in a regular or special
session duly called for the purpose shall be valid unless approved by a majority of the
members present, there being a quorum. Any ordinance or resolution authorizing or
directing the payment of money or creating liability, shall require the affirmative vote
of a majority of all the sanggunian members for its passage.
(h) Upon the passage of all ordinances and resolutions directing the payment of
money or creating liability, and at the request of any member, of any resolution or
motion, the sanggunian shall record the ayes and nays. Each approved ordinance or
resolution shall be stamped with the seal of the sanggunian and recorded in a book
kept for the purpose.
Art. 108.
Approval of Ordinances. (a) Every ordinance enacted by the
sanggunian shall be present to the local chief executive. 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 a
majority of all its members, be signed by the punong barangay.
Art. 109.
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.
(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 as
provided in the immediately preceding Article; 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.
Art. 110.
Review of Component City and Municipal Ordinances or Resolutions by
the Sangguniang Panlalawigan. (a) Within (3) days after approval, the secretary to
the sangguniang panlungsod or sangguniang bayan shall transmit to the sangguniang
panlalawigan for review, copies of approved ordinances and resolutions approving
and adopting 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 the 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 resolution, the same shall be presumed
consistent with the law and, therefore, valid.
Art. 111.
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.
Art. 112.
Enforcement of Ordinances or Resolutions After Disapproval by
Reviewing Authority. Any attempt to enforce any disapproved ordinance or
resolution adopting the local development plan and public investment program. After
disapproval by the local chief executive or by the reviewing authority shall be
sufficient ground for the suspension or dismissal of the official or employee
concerned.
Art. 113.
Effectivity of Ordinances and Resolutions. Unless otherwise stated in
the ordinance or 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 LGU concerned.
Art. 114.
Posting and Publication of Ordinance with Penal Sanctions. (a)
Ordinances with penal sanctions shall be posted at conspicuous places in the
provincial capitol, or 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 LGU 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 said ordinance for publication. The Official Gazette
may publish ordinances with penal sanctions for archival and reference purposes.
RULE XVIII
APPOINTIVE LOCAL OFFICIALS
Art. 115.
Appointive Provincial Officials. (a) The mandatory appointive
provincial officials are as follows:
(1)
secretary to the sangguniang panlalawigan;
(2)
provincial treasurer;
(3)
provincial assessor;
(4)
provincial accountant;
(5)
provincial budget officer;
(6)
provincial planning and development coordinator;
(7)
provincial engineer;
(8)
provincial health officer;
(9)
provincial administrator;
(10)
(11)
(12)
(13)
(14)
(b)
(1)
(2)
(3)
(4)
(5)

provincial legal officer;

provincial agriculturist;
provincial social welfare and development officer;
provincial veterinarian; and
provincial general services officer.
In addition thereto, the governor may appoint the following officials:
provincial environment and natural resources officer;
provincial architect;
provincial information officer;
provincial cooperatives officer; and
provincial population officer.

The appointment of provincial population officer shall be optional in the province

provided 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
the Code after which, said offices shall become optional.
Art. 116.
Appointive City Officials. (a) The mandatory appointive city officials
are as follows:
(1)
secretary to the sangguniang panlungsod;
(2)
city treasurer;
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(b)
(1)

city assessor;
city accountant;
city budget officer;
city planning and development coordinator;
city engineer;
city health officer;
city civil registrar;
city administrator;
city legal officer;
city veterinarian;
city social welfare and development officer; and
city general services officer.
In addition thereto, the city mayor may appoint the following officials:
city architect;

(2)
(3)
(4)
(5)
(6)

city information officer;

city agriculturist;
city population officer;
city environment and natural resources officer; and
city cooperatives officer.

The appointment of city population officer shall be optional in the city provided 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 the Code after which,
said offices shall become optional.
Art. 117.
Appointive Municipal Officials. (a) The mandatory appointive
municipal officials are as follows:
(1)
secretary to the sangguniang bayan;
(2)
municipal treasurer;
(3)
municipal assessor;
(4)
municipal accountant;
(5)
municipal budget officer; OJOFF
(6)
municipal planning and development coordinator; OJON
(7)
municipal engineer/building official;
(8)
municipal health officer; and
(9)
municipal civil registrar.
(b)
In addition thereto, the municipal mayor may appoint the following officials:
(1)
municipal administrator;
(2)
municipal legal officer;
(3)
municipal agriculturist;
(4)
municipal environment and natural resources officer,
(5)
municipal social welfare and development officer;
(6)
municipal architect; and
(7)
municipal information officer.
Art. 118.
Appointive Barangay Officials. (a) The mandatory appointive barangay
officials are as follows:
(1)
barangay secretary; and
(2)
barangay treasurer.
Art. 119.
Appointment of Appointive Local Officials. (a) Unless otherwise
provided in this Rule, heads of offices and departments in the LGUs shall be
appointed by the local chief executive concerned with the concurrence of a majority of
all the members of the sanggunian, subject to civil service laws, rules and regulations.
(b)
The sanggunian concerned shall act on the appointment within fifteen (15)
days from the date of its submission; otherwise, the same shall be deemed confirmed.
(c)
The term of office of the local administrator, local legal officer, and local
information officer is coterminous with that of their appointing authority.
Art. 120.
Other Local Government Offices. The sanggunian may:
(a)
Maintain existing offices not mentioned in this Rule;
(b)
Create such other offices as may be necessary to carry out the purposes of the
LGU; or
(c)
Consolidate the functions of any office with those of another in the interest of
efficiency and economy.
Art. 121.
Residency Requirement. The requirement for an appointive local
official to be a resident of the LGU concerned shall be construed to mean as actual
residence in the locality for at least six (6) months immediately preceding his
appointment.
Art. 122.
Qualifications, Powers, and Duties of Appointive Local Officials.
(a)
The secretary to the sanggunian.
(1)
The secretary to the sanggunian shall be a career official with rank and salary
equal to a head of office or department.
(2)
No person shall be appointed secretary to the sanggunian unless he is a citizen
of the Philippines, a resident of the LGU 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 holder of a first grade civil service eligibility or
its equivalent.
(3)
The secretary to the sanggunian shall take charge of the office of the secretary
to the sanggunian and shall:
(i)
Attend meetings of the sanggunian and keep a journal of its proceedings;
(ii)
Keep the seal of the LGU 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;
(iii) 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;
(iv) Transmit to the sangguniang panlungsod or sangguniang 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;
(v)
Furnish, upon request of any interested party, certified copies of records of
public character in his custody, upon payment to the local treasurer of such fees as
may be prescribed by ordinance;
(vi) 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;
(vii) Keep his office and all non-confidential records therein open to the public
during the usual business hours;
(viii) Translate into the dialect used by a majority of the inhabitants all ordinances
and resolutions immediately after their approval, and cause the publication thereof,
together with the original version in the manner provided in Rule XVII of these
Rules;
(ix) Take custody of the local archives and, where applicable, the local library and
annually account for the same; and
(x)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance relative to his position.
(xi) In the case of the barangay secretary, he shall keep custody of all records of the
sangguniang barangay and the barangay assembly meetings; prepare and keep the
minutes of all meetings of the sangguniang barangay and the barangay assembly;
prepare a list of members of the barangay assembly, and have the same posted in
conspicuous places within the barangay; assist in the preparation of all necessary
forms for the conduct of barangay elections, initiatives, referenda or plebiscites, in
coordination with the Comelec; assist the municipal civil registrar in the registration
of births, deaths, and marriages; 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 ordinance; submit a report on the actual
number of barangay residents as often as may be required by the sangguniang
barangay; and exercise such other powers and perform such other duties and
functions as may be prescribed by law or ordinance.
(b)
The Treasurer
(1)
The provincial, city, and municipal treasurers 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.
(2)
No person shall be appointed treasurer unless he is a citizen of the Philippines,
a resident of the LGU 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 holder of a first grade civil service eligibility or its
equivalent. He must have acquired experience in treasury or accounting service for at

least five (5) years in the case of the provincial or city treasurer, and three (3) years in
the case of the municipal treasurer.
(3)
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 LGU.
(4)
The treasurer shall take charge of the treasury office, perform the duties
provided under Book II of the Code, and shall:
(i)
Advise the governor or mayor, as the case may be, the sanggunian, and other
local and national government officials concerned regarding disposition of local
government funds, and on such other matters relative to public finance;
(ii)
Take custody of, and exercise proper management of the funds of the LGU
concerned;
(iii) Take charge of the disbursement of all and such other funds the custody of
which may be entrusted to him by law or other competent authority;
(iv) Inspect private commercial and industrial establishments within the
jurisdiction of the LGU concerned in relation to the implementation of tax
ordinances, pursuant to the provisions under Book II of the Code;
(v)
Maintain and update the tax information system of the LGU;
(vi) In the case of the provincial treasurer, exercise technical supervision over all
treasury offices of component cities and municipalities; and
(vii) Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
(viii) In the case of the barangay treasurer, he shall keep custody of barangay funds
and properties; 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 the Code; disburse funds in accordance with the financial procedures provided in
the Code; 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 the Code; 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; certify
as to the availability of funds whenever necessary; plan and attend to the rural postal
circuit within his jurisdiction; and exercise such other powers and perform such other
duties and functions as may be prescribed by law or ordinance.
(5)
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, as the
case may be, subject to civil service law, rules and regulations.
No person shall be appointed assistant treasurer unless he is a citizen of the
Philippines, a resident of the LGU 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 holder of first grade civil service eligibility or
its equivalent. He must have acquired at least five (5) years experience in the treasury
or accounting service in the case of the provincial or city assistant treasurer, and
three (3) years in the case of the municipal assistant treasurer.
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.

The position of assistant treasurer, while considered optional under the code, shall be
maintained by the LGU concerned if occupied by a person holding a permanent
appointment.
(c)
The Assessor
(1)
No person shall be appointed assessor unless he is a citizen of the Philippines,
a resident of the LGU 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 holder of a first grade civil service
eligibility 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
provincial or city assessor, and three (3) years in the case of the municipal assessor.
(2)
The assessor shall take charge of the assessor's office, perform the duties
provided under Book II of the Code, and shall:
(i)
Ensure that all laws and policies governing the appraisal and assessment of
real properties for taxation purposes are properly executed;
(ii)
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;
(iii) Establish a systematic method of real property assessment;
(iv) Install and maintain a real property identification and accounting system;
(v)
Prepare, install, and maintain a system of tax mapping, showing graphically all
property subject to assessment and gather all data concerning the same;
(vi) Conduct frequent physical surveys to verify and determine as to whether or not
all real properties within the province are properly listed in the assessment rolls;
(vii) Exercise the functions of appraisal and assessment primarily for taxation
purposes of all real properties in the LGU concerned;
(viii) Prepare a schedule of fair market values for the different classes of real
properties, in accordance with Title Two, Book II of the Code;
(ix) 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;
(x)
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;
(xi) 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 said
board;
(xii) 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. Upon full
provision by the competent city or municipality concerned for 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 city or municipal
assessor; and
(xiii) Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.

(3)
All incumbent assessors holding permanent appointment shall continue in
office without need of further appointment. The local chief executive may exercise his
power to appoint the assessor only when vacancy occurs.
(4)
An assistant assessor may be appointed by the local chief executive, subject to
civil service law, rules, and regulations. No person shall be appointed assistant
assessor unless he is a citizen of the Philippines, a resident of the LGU 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 holder of a first grade civil service eligibility 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 provincial or city assistant assessor, and one (1) year in the case of the
municipal assistant assessor.
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.
All incumbent assistant assessors holding permanent appointments shall continue in
office without need of further appointment. The local chief executive may exercise his
power to appoint the assistant assessor only when vacancy occurs.
(d)
The Accountant
(1)
No person shall be appointed accountant unless he is a citizen of the
Philippines, a resident of the LGU 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 of city accountant, and
three (3) years in the case of the municipal accountant.
(2)
The accountant shall take charge of both the accounting and internal audit
services of the LGU concerned and shall:
(i)
Install and maintain an internal audit system in the LGU concerned;
(ii)
Prepare and submit financial statements to the governor or mayor, as the case
may be, and to the sanggunian concerned;
(iii) Apprise the sanggunian and other local government officials on the financial
condition and operations of the LGU concerned;
(iv) Certify to the availability of budgetary allotment to which expenditures and
obligations may be properly charged;
(v)
Review supporting documents before preparation of vouchers to determine
completeness requirements;
(vi) Prepare statements of cash advances, liquidation, salaries, allowances,
reimbursements and remittances pertaining to the LGU;
(vii) Prepare statements of journal vouchers and liquidation of the same and other
adjustments related thereto;
(viii) Post individual disbursements to the subsidiary ledger and index cards;
(ix) Maintain individual ledgers for officials and employees of the LGU pertaining
to payrolls and deductions;
(x)
Record and post in index cards details of purchased furniture, fixtures, and
equipment, including disposal thereof; if any;
(xi) Account for all issued requests for obligations and maintain and keep all
records and reports related thereto;
(xii) Prepare journals and the analysis of obligations and maintain and keep all
records and reports related thereto; and
(xiii) Exercise such other powers and perform such other duties and functions as
may be provided by law or ordinance.
(3)
The incumbent chief accountant in the office of the treasurer shall be given
preference in the appointment to the position of accountant, subject to civil service
law, rules and regulations.

(e)
The Budget Officer
(1)
No person shall be appointed budget officer unless he is a citizen of the
Philippines, a resident of the LGU 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 holder of a first grade
civil service eligibility or its equivalent. He must 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.
(2)
The budget officer shall take charge of the budget office and shall:
(i)
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;
(ii)
Review and consolidate the budget proposals of different offices and
departments of the LGU;
(iii) Assist the governor or mayor, as the case may be, in the preparation of the
budget and during budget hearings;
(iv) Study and evaluate budgetary implications of proposed legislation and submit
comments and recommendations thereon;
(v)
Submit periodic budgetary reports to DBM;
(vi) Coordinate with the treasurer, accountant, and the planning and development
coordinator for the purpose of budgeting;
(vii) Assist the sanggunian concerned in reviewing the approved budgets of
component LGUs;
(viii) Coordinate with the planning and development coordinator in the formulation
of the development plan of the LGU; and
(ix) Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
(3)
The appropriations for personal services of the budget officer provided under
the budget of the DBM shall, upon effectivity of the Code, be transferred to the LGU
concerned. Thereafter, the appropriations for personal services of the budget officer
shall be provided in full in the budget of the LGU.
(f)
The Planning and Development Coordinator
(1)
No person shall be appointed planning and development coordinator unless he
is a citizen of the Philippines, a resident of the LGU 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 holder of a first grade civil service eligibility 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.
(2)
The planning and development coordinator shall take charge of the planning
and development office and shall:
(i)
Formulate integrated economic, social, physical, and other development plans
and policies for consideration of the local government development council;
(ii)
Conduct continuing studies, researches, and training programs necessary to
evolve plans and programs for implementation;
(iii) Integrate and coordinate all sectoral plans and studies undertaken by the
different functional groups or agencies;
(iv) Monitor and evaluate the implementation of the different development
programs, projects, and activities in the LGU concerned in accordance with the
approved development plan;

(v)
Prepare comprehensive plans and other development planning documents for
the consideration of the LDC;
(vi) Analyze the income and expenditure patterns, and formulate and recommend
fiscal plans and policies for consideration of the finance committee of the LGU
concerned as provided under Title Five, Book II of the Code;
(vii) Promote people participation in development planning within the LGU
concerned;
(ix) Exercise such other powers and perform such other functions and duties as
may be prescribed by law or ordinance.
(g)
The Engineer
(1)
No person shall be appointed engineer unless he is a citizen of the Philippines,
a resident of the LGU 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.
(2)
The engineer shall take charge of the engineering office and shall:
(i)
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 LGU concerned;
(ii)
Advise the governor or mayor, as the case may be, on infrastructure, public
works, and other engineering matters;
(iii) Administer, coordinate, supervise, and control the construction, maintenance,
improvement, and repair of roads, bridges, and other engineering and public works
projects of the LGU concerned;
(iv) Provide engineering services to the LGU concerned, including investigation
and survey, engineering designs, feasibility studies, and project management;
(v)
In the case of the provincial engineer, exercise technical supervision over all
engineering offices of component cities and municipalities; and
(vi) Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
(h)
The Health Officer
(1)
No person shall be appointed health officer unless he is a citizen of the
Philippines, a resident of the LGU 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.
(2)
The health officer shall take charge of the office on health and shall:
(i)
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;
(ii)
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 in Rule V of these Rules;
(iii) Develop plans and strategies on health programs and projects, and implement
them upon approval thereof by the governor or mayor as the case may be;
(iv) Formulate and implement policies, plans, programs and projects to promote
the health of the people in the LGU concerned;

(v)
Advise the governor or mayor, as the case may be, and the sanggunian on
matters pertaining to health;
(vi) Execute and enforce all laws, ordinances, and regulations relating to public
health;
(vii) 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;
(viii) Recommend the prosecution of any violation of sanitary laws, ordinances, or
regulations;
(ix) Direct the sanitary inspectors to inspect 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;
(x)
Conduct health information campaigns and render health intelligence services;
(xi) Coordinate with other government agencies and NGO's involved in the
promotion and delivery of health services;
(xii) In the case of the provincial health officer, exercise general supervision over
health officers of competent cities and municipalities;
(xiii) Be in the front-line of the delivery of health services, particularly during and in
the aftermath of man-made and natural disasters and calamities; and
(xiv) Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
(i)
The Civil Registrar
(1)
No person shall be appointed civil registrar unless he is a citizen of the
Philippines, a resident of the LGU concerned, of good moral character, a holder of a
college degree from a recognized college or university, and a holder of a first grade
civil service eligibility or its equivalent. He must have acquired 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.
(2)
The civil registrar shall be responsible for the civil registration program in the
LGU concerned, pursuant to the Civil Registry Law, the Civil Code, and other
pertinent laws, rules and regulations issued to implement them.
(3)
The Civil Registrar shall take charge of the office of the civil registry and shall:
(i)
Develop plans and strategies on civil registry programs and projects and
implement them upon approval thereof by the governor or mayor, as the case may be;
(ii)
Accept all registerable documents and judicial decrees affecting the civil status
of persons;
(iii) File, keep, and preserve in a secure place the books required by law;
(iv) Transcribe and enter immediately upon receipt all registerable documents and
judicial decrees affecting the civil status of persons in the appropriate civil registry
books;
(v)
Transmit to the Office of the Civil Registrar-General, within the prescribed
period, duplicate copies of registered documents required by law;
(vi) Issue certified transcripts or copies of any certificate or registered documents
upon payment of the prescribed fees to the treasurer;
(vii) 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;
(viii) Coordinate with the NSO in conducting educational campaigns for vital
registration and assist in the preparation of demographic and other statistics for the
LGU concerned; and
(ix) Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.

(j)
The Administrator
(1)
No person shall be appointed administrator unless he is a citizen of the
Philippines, a resident of the LGU concerned, of good moral character, a holder of a
college degree preferably in public administration, law, or any other related course
from a recognized college or university, and a holder of a first grade civil service
eligibility or its equivalent. He must have acquired 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.
(2)
The administrator shall take charge of the office of the administrator and shall:
(i)
Develop plans and strategies on management and programs and projects and
implement them upon approval thereof by the governor or mayor, as the case may be;
(ii)
Assist in coordinating the work of all the officials of the LGU 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 LGU;
(iii) Establish and maintain a sound personnel program for the LGU designed to
promote career development and uphold the merit principle in the local government
service;
(iv) Conduct a continuing organizational development of the LGU with the end in
view of instituting effective administrative reforms;
(v)
Be in the front-line of the delivery of administrative support services,
particularly those related to situations during and in the aftermath of man-made and
natural disasters and calamities;
(vi) 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
LGU; and
(vii) Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
(k)
The Legal Officer
(1)
No person shall be appointed legal officer unless he is a citizen of the
Philippines, a resident of the LGU concerned, of good moral character, 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 or city legal officer, and three (3) years in the case of the
municipal legal officer.
(2)
The legal officer, as chief legal counsel of the LGU, shall take charge of the
office of legal services and shall:
(i)
Formulate measures for the consideration of the sanggunian 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 in Rule
V of these Rules;
(ii)
Develop plans and strategies on programs and projects related to legal services
and implement upon approval thereof by the governor or mayor, as the case may be;
(iii) Represent the LGU in all civil actions and special proceedings wherein the
LGU 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;
(iv) When required by the governor, mayor, or sanggunian, draft ordinances,
contracts, bonds, leases, and other instruments involving any interest of the LGU;
and provide comments and recommendations on any instruments already drawn;
(v)
Render his opinion in writing on any question of law when requested to do so
by the governor, mayor, or sanggunian;

(vi) 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;
(vii) 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 recommend appropriate
action to the governor, mayor, or sanggunian, as the case may be;
(viii) When directed by the governor, mayor, or sanggunian, initiate and prosecute
in the interest of the LGU concerned any civil action on any bond, lease, or other
contract upon any breach or violation thereof;
(ix) Review and submit recommendations on ordinances approved and executive
orders issued by component LGUs;
(x)
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;
(xi) Be in the front-line 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
(xii) Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
(l)
The Agriculturist
(1)
No person shall be appointed agriculturist unless he is a citizen of the
Philippines, a resident of the LGU 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 holder of a first grade civil service eligibility 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.
(2)
The agriculturist shall take charge of the office for agricultural services, and
shall:
(i)
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 in Rule V of these Rules;
(ii)
Develop plans and strategies on agricultural programs and projects and
implement them upon approval thereof by the governor or mayor, as the case may be;
(iii) Ensure that maximum assistance and access to resources in the production,
processing and marketing of agricultural and aquacultural and marine products are
extended to farmers, fishermen and local entrepreneurs;
(iv) Conduct or cause to be conducted location-specific agricultural researches and
assist in making available the appropriate technology arising out of, and disseminate
information on, basic research on crops, prevention and control of plant diseases and
pests, and other agricultural matters which will maximize productivity;
(v)
Assist the governor or mayor, as the case may be, in the establishment and
extension services of demonstration farms or aquaculture and marine products;
(vi) Enforce rules and regulations relating to agriculture and aquaculture;
(vii) Coordinate with NGAs and NGOs which promote agricultural productivity
through appropriate technology compatible with environmental integrity;
(viii) Be in the front-line 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;

(ix) Recommend to the sanggunian and advise the governor or mayor, as the case
may be, on all other matters related to agriculture and aquaculture which will
improve the livelihood and living conditions of the inhabitants; and
(x)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
(m) The Social Welfare and Development Officer
(1)
No person shall be appointed social welfare and development officer unless he
is a citizen of the Philippines, a resident of the LGU 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
holder of a first grade civil service eligibility 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.
(2)
The social welfare and development officer shall take charge of the office on
social welfare and development services and shall:
(i)
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 in Rule V of these
Rules;
(ii)
Develop plans and strategies on social welfare programs and projects and
implement them upon approval thereof by the governor or mayor, as the case may be;
(iii) identify the basic needs of the needy, the disadvantaged and the impoverished
and develop and implement appropriate measures to alleviate their problems and
improve their living conditions;
(iv) Provide relief and appropriate crisis intervention for victims of abuse and
exploitation and recommend appropriate measures to deter further abuse and
exploitation;
(v)
Assist the governor or mayor, as the case may be, in implementing the
barangay program for the total development and protection of children up to six (6)
years of age;
(vi) Facilitate the implementation of welfare programs for the disabled, the 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;
(vii) Initiate and support youth welfare programs that will enhance the role of the
youth in nation-building;
(viii) Coordinate with government agencies and NGOs which have for their purpose
the promotion and 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;
(ix) Be in the front-line of service delivery, particularly those concerning
immediate relief and assistance during and in the aftermath of man-made and
natural disaster and calamities;
(x)
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
(xi) Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
(n)
The Environment and Natural Resources Officer
(1)
No person shall be appointed environment and natural resources officer unless
he is a citizen of the Philippines, a resident of the LGU concerned, of good moral

character, a holder of a college degree preferably in environment, forestry, agriculture

or any related course from a recognized college or university, and a holder of a first
grade civil service eligibility or its equivalent. He must have acquired experience in
environmental and natural resources management, conservation, and utilization, for
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.
(2)
The environment and natural resources officer shall take charge of the office
on environment and natural resources and shall:
(i)
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 measures to ensure the delivery of basic services and provision of
adequate facilities relative to environment and natural resources services as provided
in Rule V of these Rules;
(ii)
Develop plans and strategies on environment and natural resources programs
and projects and implement them upon approval thereof by the governor or mayor,
as the case may be;
(iii) 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;
(iv) Provide extension services to beneficiaries of forest development projects and
technical, financial and infrastructure assistance;
(v)
Manage and maintain seed banks and produce seedlings for forests and tree
parks;
(vi) Provide extension services to beneficiaries of forest development projects and
render assistance to natural resources-related conservation and utilization activities
consistent with ecological balance;
(vii) Promote small-scale mining and utilization of mineral resources, particularly
mining of gold;
(viii) Coordinate with government agencies and NGOs in the implementation of
measures to prevent and control land, air, and water pollution with the assistance of
the DENR;
(ix) Be in the front-line 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;
(x)
Recommend to the sanggunian and advise the governor or 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
(xi) Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
(o)
The Architect
(1)
No person shall be appointed architect unless he is a citizen of the Philippines,
a resident of the LGU concerned, of good moral character, and 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.
(2)
The architect shall take charge of the office on architectural planning and
design and shall:
(i)
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 measures to ensure the delivery of basic services and provision of

adequate facilities relative to architectural planning and design as provided in Rule V

of these Rules;
(ii)
Develop plans and strategies on architectural planning and design programs
and projects and implement them upon approval thereof by the governor or mayor,
as the case may be;
(iii) Prepare and recommend for consideration of the sanggunian the architectural
plan and design for the LGU 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;
(iv) Review and recommend for appropriate action of the sanggunian, governor or
mayor, as the case may be, the architectural plans and design submitted by
governmental and non-governmental entities or individuals, particularly those for
undeveloped, underdeveloped, and poorly-designed areas;
(v)
Coordinate with government and non-government entities and individuals
involved in the aesthetics and the maximum utilization of land and water within the
jurisdiction of the LGU, compatible with environmental integrity and ecological
balance;
(vi) Be in the front-line 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;
(vii) Recommend to the sanggunian and advise the governor or mayor, as the case
may be, on all other matters relative to the architectural planning and design as it
relates to the total socioeconomic development of the LGU; and
(viii) Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
(p)
The Information Officer
(1)
No person shall be appointed information officer unless he is a citizen of the
Philippines, a resident of the LGU concerned, of good moral character, a holder of a
college degree, preferably in journalism, mass communication or any related course
from a recognized college or university, and a holder of a first grade civil service
eligibility 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.
(2)
The information officer shall take charge of the office on public information
and shall:
(i)
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
providing 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;
(ii)
Develop plans and strategies on programs and projects related to public
information and, implement them upon approval thereof by the governor or mayor,
as the case may be;
(iii) Provide relevant, adequate, and timely information to the LGU and its
residents;
(iv) Furnish information and data on LGUs to NGAs, as may be required by law or
ordinance, including those on NGOs;
(v)
Maintain effective liaison with 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;

(vi) Be in the front-line in providing information during and in the aftermath of

man-made 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;
(vii) Recommend to the sanggunian and advise the governor or mayor, as the case
may be, on all matters relative to public information and research data as it relates to
the total socioeconomic development of the LGU; and
(viii) Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
(q)
The Cooperatives Officer
(1)
No person shall be appointed cooperatives officer unless he is a citizen of the
Philippines, a resident of the LGU concerned, of good moral character, a holder of a
college degree, preferably in business administration with special training in
cooperatives or any related course from a recognized college or university, and a
holder of a first grade civil service eligibility or its equivalent. 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
the provincial or city cooperatives officer, and three (3) years in the case of municipal
cooperatives officer.
(2)
The cooperatives officer shall take charge of the office for the development of
cooperatives and shall:
(i)
Formulate measures for consideration 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
facilities through the development of cooperatives, and providing access to such
services and facilities;
(ii)
Develop plans and strategies on cooperatives programs and projects and,
implement them upon approval thereof by the governor or mayor, as the case may be;
(iii) Assist in the organization of cooperatives;
(iv) Provide technical and other forms of assistance to existing cooperatives to
enhance their viability as an economic enterprise and social organization;
(v)
Assist cooperatives in establishing linkages with NGAs and NGOs involved in
the promotion and integration of the concept of cooperatives in the livelihood of the
people and other community activities;
(vi) Be in the front-line of cooperatives organization, rehabilitation or viabilityenhancement, particularly during and in the aftermath of man-made and natural
calamities and disasters, to aid in their survival and, if necessary, subsequent
rehabilitation;
(vii) Recommend to the sanggunian, and advise the governor or mayor, as the case
may be, on all other matters relative to cooperatives development and viabilityenhancement which will improve the livelihood and quality of life of the inhabitants;
and
(viii) Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
(r)
The Population Officer
(1)
No person shall be appointed population officer unless he is a citizen of the
Philippines, a resident of the LGU concerned, of good moral character, a holder of a
college degree with specialized training in population development from a recognized
college or university, and a holder of a first grade civil service eligibility 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.

(2)
The population officer shall take charge of the office on population
development and shall:
(i)
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 measures to ensure the delivery of basic services and provision of
adequate facilities relative to the integration of population development principles
and in providing access to said services and facilities;
(ii)
Develop plans and strategies and upon approval thereof by the governor or
mayor, as the case may be, implement the same, particularly those concerning the
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 under the Code;
(iii) 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;
(iv) Establish and maintain an updated data bank for program operations,
development, planning and an educational program to ensure the people's
participation in and understanding of population development;
(v)
Implement appropriate training programs responsive to the cultural heritage
of the inhabitants; and
(vi) Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
(s)
The Veterinarian
(1)
No person shall be appointed veterinarian unless he is a citizen of the
Philippines, a resident of the LGU concerned, of good moral character, and 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.
(2)
The veterinarian shall take charge of the office for veterinary services and
shall:
(i)
Formulate measures for consideration 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 pursuant to Rule V of these Rules;
(ii)
Develop plans and strategies on veterinary-related activities and implement
them upon approval thereof by the governor or mayor, as the case may be;
(iii) Advise the governor or mayor, as the case may be, on all matters pertaining to
the slaughter of animals for human consumption and the regulation of
slaughterhouses;
(iv) Regulate the keeping of domestic animals;
(v)
Regulate and inspect poultry, milk and dairy products for public consumption;
(vi) Enforce all laws and regulations for the prevention of cruelty to animals;
(vii) Take necessary measures to eradicate, prevent, or cure all forms of animal
diseases;
(viii) Be in the front-line of veterinary related activities, such as is 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 the
aftermath of man-made and natural calamities and disasters;
(ix) Recommend to the sanggunian and advise the governor or mayor, as the case
may be, on all other matters relative to 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

(x)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
(t)
The General Services Officer
(1)
No person shall be appointed general services officer unless he is a citizen of
the Philippines, a resident of the LGU 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 holder of a first grade civil service
eligibility or its equivalent. He must have acquired experience in general services,
including management of supply, property, solid waste disposal, and general services
officer, 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.
(2)
The general services officer shall take charge of the office on general services
and shall:
(i)
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 measures to ensure the delivery of basic services and provision of
adequate facilities pursuant to Rule V of these Rules and which require general
services expertise and technical support services;
(ii)
Develop plans and strategies on general services supportive of the welfare of
the inhabitants and implement them upon approval thereof by the governor or
mayor, as the case may be;
(iii) Take custody of and be accountable for all properties, real or personal, owned
by the LGU and those granted to it in the form of donation, reparation, assistance and
counterpart of joint projects;
(iv) 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;
(v)
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 LGU;
(vi) 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 LGU;
(vii) Maintain and supervise janitorial, security, landscaping and other related
services in all public buildings and other real property, whether owned or leased by
the LGU;
(viii) Collate and disseminate information regarding prices, shipping, and other
costs of supplies and other items commonly used by the LGU;
(ix) Perform archival and record management with respect to records of offices
and departments of the LGU;
(x)
Perform all other functions pertaining to supply and property management
heretofore performed by the treasurer; and enforce policies on records creation,
maintenance, and disposal;
(xi) Be in the front-line 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;
(xii) Recommend to the sanggunian and advise the governor or mayor, as the case
may be, on all other matters relative to general services; and
(xiii) Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance.
Art. 123.
Resignations. Resignation of appointive local officials and employees
must be in writing and shall be deemed effective upon acceptance by the local chief

executive concerned. In the case of the provincial, city, and municipal treasurers, and
their respective assistants, their resignations shall be deemed effective upon
acceptance by the Secretary of Finance.
RULE XIX
DISCIPLINARY ACTIONS
Art. 124.
Grounds for Disciplinary Actions. (a) An elective local official may be
censured, reprimanded, suspended, or removed from office after due notice and
hearing on any of the following grounds:
(1)
Disloyalty to the Republic of the Philippines;
(2)
Culpable violation of the Constitution;
(3)
Dishonesty, oppression, misconduct in office, gross negligence, or dereliction
of duty;
(4)
Commission of any offense involving moral turpitude or an offense punishable
by at least prision mayor which is from six (6) years and one (1) day to twelve (12)
years imprisonment;
(5)
Abuse of authority;
(6)
Unauthorized absence for fifteen (15) consecutive working days, in the case of
local chief executives and four (4) consecutive sessions in case of members of the
sangguniang panlalawigan, sangguniang panlungsod, sangguniang bayan, and
sangguniang barangay;
(7)
Application for, or acquisition of, foreign citizenship or residence or the status
of an immigrant of another country; and
(8)
Such other grounds as may be provided by the Code; RA 6713; RA 3019;
Administrative Code of 1987; the Revised Penal Code and all other applicable general
and special laws.
(b)
An elective local official may be removed from office on the grounds
enumerated in paragraph (a) of this Article by order of the proper court or the
disciplining authority whichever first acquires jurisdiction to the exclusion of the
other.
Art. 125.
Form and Filing of Administrative Complaints. A verified complaint
against any erring elective local official shall be prepared and filed as follows:
(a)
Against any elective official of a province, a highly-urbanized city, a
component city, a municipality within MMA, an independent component city, before
the Office of the President;
(b)
Against any elective official of a municipality, before the sangguniang
panlalawigan whose decision may be appealed to the Office of the President.
(c)
Against any elective barangay official, before the sangguniang panlungsod or
sangguniang bayan concerned whose decision shall be final and executory.
Copies of the complaints shall be furnished the office of the governor, in the case of
component cities and municipalities, and in all cases, the DILG.
Art. 126.
Hearings. (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.
(1)
Unreasonable failure of the respondent to file his verified answer within fifteen
(15) days from receipt of the complaint shall be considered a waiver of his rights to
present evidence in his behalf.
(2)
Unreasonable failure to commence the investigation within the prescribed
period by the person or persons assigned to investigate shall be a ground for
disciplinary action.
(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 elective local officials, the venue shall be the place where
the sanggunian concerned is located.
(c)
No investigation shall be held within ninety (90) days immediately prior to any
local elections, and no preventive suspension shall be imposed within the same
period. If preventive suspension has been imposed prior to the 90-day period
immediately preceding local elections, it shall be deemed automatically lifted upon
the start of the said period.
Art. 127.
Preventive Suspension. (a) Preventive suspension may be imposed:
(1)
By the President, if the respondent is an elective official of a province, a highlyurbanized city, an independent component city or a municipality within MMA;
(2)
By the governor, if the respondent is an elective official of a component city or
municipality;
(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 evidence.
(c)
Any single preventive suspension of an elective local official shall not extend
beyond sixty (60) days.
(d)
In the event that several administrative cases are filed against an elective local
official, he cannot be placed under preventive suspension 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.
(e)
Upon expiration of the preventive suspension, the suspended elective local
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. 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 be counted in computing the time of
termination of the case.
(f)
Any abuse of the exercise of the power of preventive suspension shall be
penalized as abuse of authority.
Art. 128.
Salary of Respondent Pending Suspension. The respondent elective
local official who is under preventive suspension shall receive no salary or
compensation during such suspension. Upon subsequent exoneration and
reinstatement, however, he shall be paid his full salary or compensation including
other emoluments accruing during his suspension.
Art. 129.
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 his favor through the compulsory
process of subpoena or subpoena duces tecum.
Art. 130.
Investigation and Decision. (a) The investigation of the case shall be
terminated within ninety (90) days from the start thereof. Unreasonable failure to
complete the investigation after same period of ninety (90) days by the person or
persons assigned to investigate shall be a ground for disciplinary action.
(b)
Within thirty (30) days after the end of the investigation, the Office of the
President or the sanggunian concerned shall render a written decision stating clearly
and distinctly the facts and reasons for such decision. Copies of decision shall be
immediately furnished the respondent and all interested parties. In case of failure of
the sanggunian concerned to render a decision on the resolution recommended on
the investigation within thirty (30) days after the end of the investigation, the
recommended resolution shall be considered the decision.

(c)
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.
(d)
The penalty of removal from office shall be considered a bar to the candidacy
of the respondent for any elective position.
Art. 131.
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, the sangguniang panlungsod of highly-urbanized cities and
independent component cities, and the sangguniang bayan of municipalities within
MMA.
Decisions of the Office of the President shall be final and executory.
(c)
If no appeal is made within thirty (30) days from receipt of the decision, the
decision shall become final and executory.
Art. 132.
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
the appeal results in an exoneration, he shall be paid his salary and such other
emoluments accruing during the pendency of the appeal.
RULE XX
LOCAL INITIATIVE AND REFERENDUM
Art. 133.
Local Initiative Defined. Local initiative is the legal process whereby
the registered voters of an LGU may directly propose, enact, or amend any ordinance
through an election called for the purpose.
Art. 134.
Who may Exercise. The power of initiative may be exercised by all the
registered voters of provinces, cities, municipalities, or barangays, and metropolitan
political subdivisions as may be created by law.
Art. 135.
Procedure in Local Initiative. (a) The exercise of the power of initiative
shall commence with the filing of a petition with the sanggunian concerned.
(b)
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.
(c)
If no favorable action thereon is taken by the sanggunian concerned within
thirty (30) days from the presentation of the petition, the proponents, through their
duly authorized and registered representatives, may invoke their power of initiative,
giving notice thereof to the sanggunian concerned.
Art. 136.
Petition. A petition is a written instrument containing the proposition
and the required number of signatories in the form to be prescribed by the Comelec.
A petition shall state the following:
(a)
Contents or text of the proposed ordinance sought to be enacted, approved or
rejected, amended or repealed, as the case may be;
(b)
The proposition;
(c)
The reasons therefor;
(d)
That it is not one of the limitations provided in Article 150 of this Rule;
(e)
Signatures of the petitioners or registered voters;
(f)
A formal designation of their duly authorized representatives;
(g)
An abstract or summary proposition in not more than one hundred (100)
words which shall be legibly written or printed at the top of every page of the petition.

Art. 137.
The Proposition. (a) The proposition is the measure proposed by the
voters.
(b)
The proposition shall be numbered serially starting from Roman Numeral I.
(c)
Two (2) or more propositions may be submitted in an initiative.
(d)
The Comelec or its designated representative shall extend assistance in the
formulation of the proposition.
Art. 138.
Copies of Petition and Notice. (a) If the subject of the initiative is a
provincial ordinance, the proponents shall furnish the provincial election supervisor
sufficient number of copies of the petition and notice for distribution to the election
registrars in the province.
(b)
If the subject is a city ordinance, the proponents shall furnish the election
registrar sufficient number of copies of the petition and notice for distribution to the
barangays within the city.
(c)
If the subject is a municipal ordinance, the proponents shall furnish the
provincial election registrar sufficient number of copies of the petition and notice for
distribution to the barangays in the municipality.
(d)
If the subject is a barangay ordinance, the proponents shall furnish the
provincial election registrar sufficient number of copies of the petition and notice.
(e)
The proponents shall likewise furnish copies of the petition and notice to the
Comelec in Manila, through its executive director and its Election Records and
Statistics Department.
Art. 139.
Posting. Upon receipt of the petition and notice, all election officers
concerned shall cause copies thereof to be posted conspicuously in public places in
the LGU concerned, together with a notice of the dates of signing in accordance with
the following article.
Art. 140.
Schedule of Signing of Petition. Upon receipt of the notice and petition,
the election officer in the LGU concerned shall schedule the signing of the petition in
the LGU.
The collection of signatures shall commence on the first Saturday and Sunday
following receipt thereof, and every Saturday and Sunday thereafter for a period of
ninety (90) days for provinces and cities, sixty (60) days for municipalities, and thirty
(30) days for barangays.
Signing may also be done on weekdays in the office of the proper election registrar.
Art. 141.
Signature Stations. Stations for collecting signatures may be
established in as many places as may be warranted and as far as practicable, in public
school buildings nearest the residence of the voters. For this purpose, the election
registrar may cluster existing precincts into signature stations at a ratio of one (1)
signature station for every ten (10) precincts.
Each signature station shall be under the supervision of a public school teacher
designated by the election registrar.
Art. 142.
Procedure for Signing of Petition. On any of the days scheduled for the
signing of the petition, any registered voter in an LGU concerned, may assign the
petition. 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 LGU concerned.
The signatures of the voters shall be affixed on the form prescribed by the Comelec.
Each voter shall affix his signature over his printed name and address. All illiterate or
disabled voter, who is currently registered as such, shall be assisted by a person of his
confidence. The election registrar shall have custody of all the forms used during the
signing.
Art. 143.
Verification of Signatures. The election registrar or his representative
shall , during the period of signing, verify the genuineness and authenticity of the

signatures by referring to the book of voters, voter's affidavits and voters'

identification cards used in the immediately preceding election. The election registrar
shall cancel any signature on the ground that it is forged or falsified, or that the
signatory is not a registered voter, or that the signature of the voter appears more
than once in the same or other forms. The determination by the election registrar of
the genuineness and authenticity of the signatures shall be final.
Art. 144.
Certification of Number of Registered Voters. Upon receipt of a copy of
the notice referred to in Article 139 of this Rule, the Election Records and Statistics
Department of the Comelec shall certify to the total number of registered voters in the
constituency to which the initiative pertains, and immediately, send the certification
to the highest local election officer of the LGUs affected. For initiatives on local laws
before the 1992 general elections, the said Election Records and Statistics
Department shall, wherever proper, use as basis the registration records for the
January 18, 1988 local elections. Thereafter, the basis shall be the registration records
of the general and local elections immediately preceding the initiative.
Upon receipt of the certification from the Election Records and Statistics
Department, the regional election directors, provincial election supervisor, or election
registrar, as the case may be, shall post a copy of the certification on the bulletin
board of his office.
Art. 145.
Number of Signatures Required. (a) A local initiative affecting an
ordinance passed by the sanggunian of a province or a city is deemed validly initiated
if the petition therefor is signed by at least ten percent (10%) of the registered voters
in the province or city, of which every legislative district must be represented by at
least three percent (3%) of the registered voters therein. If the province or city is
composed of only one legislative district, at least each municipality in the province or
each barangay in a city must be represented by at least three percent (3%) of the
registered voters therein.
(b)
An initiative on municipal ordinance shall be deemed validly initiated if the
petition therefor is signed by at least ten percent (10%) of the registered voters in the
municipality, of which every barangay must be represented by at least three percent
(3%) of the registered voters therein.
(c)
An initiative on a barangay ordinance is deemed validly initiated if signed by at
least ten percent (10%) of the registered voters in said barangay.
Art. 146.
Determination of Percentage and Certification, and Action by the
Comelec. Upon the lapse of the period for collecting signatures, the Comelec,
through its office in the LGU concerned, shall determine and certify whether or not
the required number of signatures has been obtained. Failure to obtain the required
number defeats the proposition. Within fifteen (15) days from receipt of the
certification, the Comelec shall act on the findings of sufficiency or insufficiency of
the petition for initiative.
Art. 147.
Call for Initiative by the Comelec. If the required number of signatures
is obtained, the Comelec shall set a date for the initiative during which the
proposition shall be submitted to the registered voters in the LGU concerned for their
approval within sixty (60) days from the date of certification by the Comelec 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.
Art. 148.
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 local chief executive
and the sanggunian concerned.
If the proposition fails to obtain the required number of votes, the proposition is
considered defeated.

Art. 149.
Limitations on Local Initiative. (a) The power of local initiative shall
not be exercised more than once a year.
(b)
An 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
toto the proposition presented and the local chief executive approves the same, the
initiative shall be canceled. Those against such action may, if they so desire, apply for
initiative in the manner provided in this Rule.
Art. 150.
Local Referendum Defined. Local referendum is the legal process
whereby the registered voters of LGUs may approve, amend, or reject any ordinance
enacted by the sanggunian through an election held for the purpose.
Art. 151.
Procedure in Local Referendum. (a) Any sanggunian may submit to the
registered voters of any province, city, municipality, and barangay for approval or
rejection any ordinance or resolution duly enacted or approved by said sanggunian.
(b)
The local referendum shall be held under the control and direction of the
Comelec within sixty (60) days in the case of a province or a city, forty-five (45) days
in case of a municipality, and thirty (30) days in case of a barangay. The Comelec
shall certify and proclaim the results of the said referendum.
(c)
The manner of securing the required number of signatures and other
requisites for local referendum shall be the same as those for local initiative.
Art. 152.
Limitations Upon Sanggunian. Any proposition or ordinance approved
through the system of initiative and referendum shall not be repealed, modified or
amended by the sanggunian concerned within six (6) months from the date of
approval thereof. Such proposition or ordinance may, however, be amended,
modified or repealed by the sanggunian three (3) years thereafter by a vote of threefourths (3/4) of all its members provided that in case of barangays, the period shall
be eighteen (18) months after the approval thereof.
Art. 153.
Authority of Courts. Nothing in this Rule shall prevent or preclude the
proper courts from declaring null and void any proposition or ordinance approved in
accordance with this Rule for violation of the Constitution or want of capacity of the
sanggunian concerned to enact the said measure.
RULE XXI
RECALL
Art. 154.
By Whom Exercised. The power of recall for loss of confidence shall be
exercised by the registered voters of an LGU to which the elective local official subject
to such recall belongs.
Art. 155.
Who May Be Recalled. Any elective provincial, city, municipal or
barangay official may be recalled for loss of confidence in the manner prescribed in
this rule provided that no recall may be instituted against said elective local official
who has been the subject of a previous recall election held during the same term of
office.
Art. 156.
Preparatory Recall Assembly. There shall be a preparatory recall
assembly in every province, city, legislative district, and municipality which shall be
composed of the following:
(1)
Province all mayors, vice-mayors and sanggunian members of component
cities and municipalities;
(2)
City all punong barangay and sangguniang barangay members of the city;
(3)
Legislative District all elective barangay officials of the district; and
(4)
Municipality all punong barangay and sangguniang barangay members of the
municipality.

Art. 157.
Recall Procedures. (a) Recall may be initiated by the preparatory recall
assembly or by the registered voters of the LGU to which the elective local official
subject to such recall belongs.
(b)
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 an LGU concerned during the election in which the
elective local official sought to be recalled was elected.
(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 local
official in the LGU 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)
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 LGU 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 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.
(e)
Upon the lapse of the period for publication of the petition, 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.
Art. 158.
Election on Recall. Upon filing of a valid resolution or petition for recall
with the appropriate local office of the Comelec, the Comelec 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
elective 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.
Art. 159.
Effectivity. 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.
Art. 160.
Prohibition from Resignation. The elective local official sought to be
recalled shall not be allowed to resign while the recall process is in progress.
Art. 161.
Limitations. Any elective local official may be the subject of a recall
election only once during his term of office for loss of confidence. 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.
Art. 162.
Expenses Incident to Recall Election. All expenses incidental 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.
RULE XXII
HUMAN RESOURCE MANAGEMENT AND DEVELOPMENT
Art. 163.
Organizational Structure and Staffing Pattern. Every LGU shall design
and implement its own organizational structure and staffing pattern taking into

consideration its priority needs, service requirements, and financial capabilities

consistent with the principles on simplicity, efficiency, economy, effectiveness,
dynamism, and public accountability, subject to the minimum standards and
guidelines prescribed therefor by CSC.
Art. 164.
Responsibility for Human Resource Management and Development;
Applicable Laws. (a) An LGU may reorganize through the sanggunian its present
organizational structure or alter its present staffing pattern in accordance with laws
pertinent to government reorganization and implementing rules and regulations
issued thereunder.
(b)
The local chief executive shall be responsible for human resource management
and development in his LGU and shall take all personnel actions in accordance with
the constitutional provisions on civil service, pertinent laws, rules and regulations,
including such policies, guidelines, and standards as CSC may prescribe. For this
purposes, the local chief executive may avail of the services of the Local Government
Academy and other learning institutions.
(c)
The presiding officer of the sanggunian shall, where applicable, be responsible
for human resource management and development and shall take all personnel
actions in accordance with civil service law, rules and regulations.
(d)
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 CSC provided that the period of employment of emergency or casual
laborers shall not exceed six (months).
Art. 165.
Recruitment and Selection. Opportunity for employment in an LGU
shall be open to all qualified candidates. Utmost effort shall be exerted to attract the
best qualified to enter the local government service. Employees shall be selected on
the basis of merit and fitness.
Art. 166.
Personnel Selection Board. (a) There shall be established in every
province, city or municipality a personnel selection board to assist the local chief
executive or, where applicable, the presiding officer of the sanggunian, in the
judicious and objective selection of personnel for employment as well as for
promotion.
(b)
The personnel selection board shall be composed of the local chief executive or
his duly authorized representative as chairman, and members to be determined by
resolution of the sanggunian concerned in accordance with pertinent civil service law,
rules and regulations. A representative of CSC, if any, and the local human resource
management officer or his equivalent in the LGU concerned, shall be ex officio
members of the board.
(c)
The personnel selection board shall formulate screening procedures and shall
adopt criteria for evaluating candidates for employment or promotion in the first and
second levels of the local government career service.
(d)
The personnel selection board shall formulate screening policies on employee
welfare in accordance with civil service law, rules and regulations.
Art. 167.
Public Notice of Vacancy. Whenever a local chief executive decides to
fill a vacant career position, notices of vacancy shall be posted in at least three (3)
conspicuous public places for a period of not less than fifteen (15) days and published
once in a newspaper of general circulation in the LGU concerned.
Art. 168.
Appointments. (a) Appointments to positions in LGUs, except those
classified by law or competent authority as policy determining, primarily confidential,
or highly technical in nature, shall be made only according to merit and fitness to be
determined, as far as practicable, by competitive examinations.

(b)
The local chief executive concerned or, where applicable, the presiding officer
of the sanggunian shall be the appointing authority of all officials and employees paid
wholly or partially out of local government funds except as otherwise provided by law
or these Rules.
(c)
Appointments to the career service shall either be permanent or temporary:
(1)
A permanent appointment shall be issued to a person who meets all the
requirements for the position to which he is appointed, including the appropriate
eligibility prescribed by law or regulations.
(2)
In the absence of a qualified civil service eligible and whenever public interest
so requires to fill a vacancy, a temporary appointment shall be issued to a person who
meets all the requirements for the position to which he is being appointed except the
possession of the appropriate civil service eligibility. Such temporary appointment
shall not exceed twelve (12) months but may be terminated sooner if a qualified
eligible becomes available.
(d)
A contractual appointment shall be issued only under the following
circumstances or conditions:
(1)
The proposed appointee undertakes a specific work or project to be completed
within a limited period not to exceed one (1) year;
(2)
The proposed appointee has a special or technical skill not available in the
employing LGU;
(3)
The proposed appointee performs or accomplishes his work under his own
responsibility with minimum direction and supervision from the hiring LGU.
(4)
In the case of aliens, a contractual appointment may be extended only if it can
be shown that there is no Filipino expert available within the region as certified by the
appointing authority.
(5)
Due to the temporary nature of contractual appointment, the high quality of
expertise desired, the difficulty of recruitment, or the time constraint for the
completion of the assigned tasks, personnel hired on a contractual basis may be paid
a higher compensation than that given to employees occupying similar positions or
performing substantially the same duties and responsibilities but not more than the
ceiling fixed by the appropriate authority; and
(6)
At least two (2) copies of a duly accomplished Position Description Form shall
be forwarded to the appropriate NGA before the employment contract is finalized. A
certification stating the reason for resorting to contractual employment shall also be
submitted.
(e)
All appointments shall be made in such form, content and supporting
documentation as CSC may prescribe.
(f)
Except as otherwise provided by law, appointments shall be submitted to CSC
for attestation within thirty (30) days from the date of issuance thereof; otherwise
said appointments shall become ineffective after the lapse of thirty (30) days.
(g)
Appointments of those who do not meet the appropriate eligibility and
required qualifications shall not be made, except in cases allowed by civil service law,
rules and regulations.
(h)
An appointment issued in accordance with applicable laws, rules and
regulations shall take effect immediately upon its issuance by the appointing
authority, and if the appointee has assumed the duties of the position, he shall be
entitled to receive his salary at once without awaiting the attestation of his
appointment By CSC.
(i)
The appointing authority shall be liable for the payment of the salary of the
appointee for actual services rendered if the appointment is disapproved because the
appointing authority issued it in willful violation of applicable laws, rules and
regulations thereby making the appointment unlawful.

(j)
No person shall be appointed in the local government career service if he is
related within the fourth civil degree of consanguinity or affinity to the appointing or
recommending authority.
Art. 169.
Promotions. (a) Promotions in the local government career service
shall be made in accordance with civil service law, rules and regulations.
(b)
No promotion shall be made unless recommended by the personnel selection
board.
Art. 170.
Compensation. (a) Compensation of local officials and employees shall
be determined by the sanggunian concerned, subject to the budgetary limitations on
personal services provided in Rule XXXIV of these Rules and other applicable laws.
(b)
Barangay elective officials shall receive honoraria, allowances and such other
emoluments as may be authorized by law, or city, municipal or barangay ordinance,
in accordance with the provisions of the Code, but in no case shall it be less than One
Thousand Pesos (P1,000.00) per month for the punong barangay and Six Hundred
Pesos (P600.00) per month for the sangguniang barangay members provided that
the annual appropriations for personal services shall be subject to the budgetary
limitations prescribed in Rule XXXIV of these Rules.
(c)
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 the 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.
Art. 171.
Working Hours and Attendance. (a) All appointive local officials and
employees are required to render not less than the official hours of work prescribed
by law.
(b)
When the interest of public service so requires, the local chief executive may
extend the daily hours of work of any or all the officials or employees in his LGU, or
require them to work on Saturdays, Sundays and Holidays. Overtime shall be paid for
such additional hours rendered, subject to availability of funds and applicable laws.
(c)
The local chief executive shall require a daily record of attendance of personnel
under him to be kept in the proper forms prescribed by CSC. A record shall also be
made for each day of all absences from duty of any local official or employee for any
cause and the duration thereof; and
(d)
Elective local officials need not be required to keep a daily record of
attendance but their absences shall be properly recorded.
Art. 172.
Leave Privilege. Elective local officials shall be entitled to the same
leave privileges and such other leave privileges as the law may provide, subject to
standards set by CSC, as those enjoyed by appointive local officials, including
cumulation and commutation thereof, as follows:
(a)
Vacation Leave. After six (6) months of continuous and satisfactory service,
officials and employees of an LGU shall be entitled to fifteen (15) days of vacation
leave with full pay for each year of service. Such leave shall be computed exclusive of
Saturdays, Sundays, and Holidays. Local government personnel shall be encouraged
to take an annual five (5) days vacation leave if he has at least a total of ten (10) days
vacation leave credits earned during the year.
(b)
Sick Leave. Officials and employees of an LGU shall also be entitled to fifteen
(15) days sick leave with full pay for each year of service. Such leave shall be
computed exclusive of Saturdays, Sundays, and Holidays.
(c)
Maternity Leave. In addition to vacation and sick leave privileges, a married
woman in the service of an LGU shall be entitled to maternity leave of sixty (60) days
with pay, subject to the following provisions:

(1)
An official or employee shall be entitled to full pay if she has rendered two or
more years of continuous service.
(2)
An official or employee shall be entitled to one-half pay if she has rendered less
than two (2) years of continuous service.
Art. 173.
Permission to Leave Station. (a) All appointive local 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 LGU concerned, and urgency of the travel. Should
the local chief executive concerned fail to act on 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 of the province.
(c)
Local government officials traveling abroad shall notify their respective
sanggunians 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 NGAs 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.
Art. 174.
Grievances. There shall be established in every LGU a grievance
committee to inquire into, act upon, resolve, or settle complaints and grievances
presented by local government employees.
Art. 175.
Statements of Assets and Liabilities. (a) Officials and employees of
LGUs except those who serve in an honorary capacity, laborers, and casual or
temporary workers, shall file:
(1)
sworn statements of assets, liabilities and net worth;
(2)
lists of relatives within the fourth civil degree of consanguinity or affinity in
government service;
(3)
financial and business interests; and
(4)
personal data sheets as required by law.
Art. 176.
Oath of Office. 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 shall be
preserved in the individual personal record file under the custody of the personnel
office, division, or section, as the case may be, of the LGU concerned.
Art. 177.
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 an LGU 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 LGU of which he is an official; and

(4)
Use property and personnel of the government except when the sanggunian
member concerned in 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.
Art. 178.
Partisan Political Activity. (a) No local official or employee in the career
service shall:
(1)
Engage directly or indirectly in any partisan political activity;
(2)
Take part in any election, initiative, referendum, plebiscite, or recall, except to
vote;
(3)
Use his official authority or influence to cause the performance of any political
activity by any person or body.
(b)
The local official or employee may, however, express his views on current
issues, or mention the names of certain candidates for public office whom he
supports.
(c)
Elective local officials make 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, as amended.
Art. 179.
Prohibited Business and Pecuniary Interest. (a) It shall be unlawful for
any local government official or employee whether directly or indirectly, to:
(1)
Engage in any business transaction with the LGU 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 to be transferred, directly of indirectly, out of the resources of
LGU to such person or firm;
(2)
Hold such interests in any cockpit or other games licensed by LGUs;
(3)
Purchase any real estate or other property forfeited in favor of an LGU for
unpaid taxes or assessment, or by virtue of a legal process at the instance of the said
LGU;
(4)
Be a surety for any person contracting or doing business with an LGU for
which a surety is required; and
(5)
Possess or use any public property of an LGU for private purposes.
(b)
All other prohibitions governing the conduct of national public officers relating
to prohibited business and pecuniary interest so provided in RA 6713, otherwise
known as the Code of Conduct and Ethical Standards for Public Officials and
Employees, and other laws, rules and regulations shall also be applicable to local
government officials and employees.
Art. 180.
Penalty for 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 under Article 180 of this Rule, shall be
punished with imprisonment of not less than six (6) months and one (1) day but not
exceeding six (6) years, or a fine of not less than Three Thousand Pesos (P3,000.00)
but not more than Ten Thousand Pesos (P10,000.00), or both such imprisonment
and fine, at the discretion of the court.
RULE XXIII
LOCAL SPECIAL BODIES
Art. 181.
Local Special Bodies. There shall be organized in the LGU concerned
the following local special bodies:
(a)
Local Development Councils;
(b)
Local Prequalification, Bids and Awards Committees;
(c)
Local School Boards;
(d)
Local Health Boards;

(e)
Local Peace and Order Councils; and
(f)
People's Law Enforcement Boards.
Art. 182.
Local Development Councils. Every LGU shall have a comprehensive
multi-sectoral development plan to be initiated by the LDC concerned and approved
by its sanggunian. For this purpose, the provincial, city, municipal, or barangay
development council, shall assist the corresponding sanggunian in setting the
direction of economic and social development, and coordinating development efforts
within its territorial jurisdiction.
(a)
Composition.
(1)
The provincial development council shall be headed by the governor and shall
be composed of the following members:
(i)
All mayors of component cities and municipalities;
(ii)
The chairman of the committee on appropriations of the sangguniang
panlalawigan;
(iii) The congressman or his representative; and
(iv) Representatives of NGOs operating in the province, who shall constitute not
less than one-fourth (1/4) of the members of the fully organized council.
(2)
The city or municipal development council shall be headed by the mayor and
shall be composed of the following members:
(i)
All punong barangays in the city or municipality;
(ii)
The chairman of the committee on appropriations of the sangguniang
panlungsod or sangguniang bayan concerned;
(iii) The congressman or his representative; and
(iv) Representatives of NGOs 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.
(3)
The barangay development council shall be headed by the punong barangay
and shall be composed of the following members:
(i)
Members of the sangguniang barangay;
(ii)
Representatives of NGOs operating in the barangay, who shall constitute not
less than one fourth (1/4) of the members of the fully organized council.
(iii) A representative of the congressman.
(4)
The LDC may call upon any local or national official in the LGU to assist in the
formulation of the development plans and public investment programs of the said
LGU.
(b)
Representation of NGOs Within a period of sixty (60) days from organization
of LDCs, NGOs shall choose from among themselves their representatives to said
LDCs. The sanggunian concerned shall accredit NGOs, subject to such criteria as
provided in Rule XIII of these Rules.
(c)
Reconstitution of LDCs Upon effectivity of these Rules, all existing LDCs
organized under EO 319, series of 1988, as amended, shall be reconstituted in
accordance with this Rule.
(d)
Functions of LDCs
(1)
The provincial, city, and municipal development councils shall perform the
following functions:
(i)
Formulate long-term, medium-term, and annual socioeconomic development
plans and policies;
(ii)
Formulate medium-term and annual public investment programs;
(iii) Evaluate and prioritize socioeconomic development programs and projects;
(iv) Formulate local investment incentives to promote the inflow and direction of
private investment capital;
(v)
Coordinate, monitor, and evaluate the implementation of development
programs and projects; and

(vi) Perform such other functions as may be provided by law or component

authority.
(2) The barangay development council shall perform the following functions:
(i)
Mobilize people's participation in local development efforts;
(ii)
Prepare barangay development plans based on local requirements;
(iii) Monitor and evaluate the implementation of national or local programs and
projects; and
(iv) Perform such other functions as may be provided by law or component
authority.
(e)
Meetings The LDCs shall meet at least once every six (6) months or as often as
may be necessary.
(f)
Executive Committee The provincial, city, municipal, or barangay
development council shall, by resolution and within three (3) months from the date of
reorganization of the LDC, create an executive committee to represent and act in
behalf of the LDC when it is not in session.
(1)
Composition
(i)
The executive committee of the provincial development council shall be
composed of the governor as chairman, the representative of the 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
provincial liga ng mga barangay, and a representative of NGOs that are represented
in the LDC, as members.
(ii)
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 panlungsod or sangguniang bayan, the president
of the city or municipal liga ng mga barangay, and a representative of NGOs that are
represented in the LDC, as members.
(iii) 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 NGOs that
are represented in the LDC, as members.
(2)
Powers and Functions. The executive committee shall exercise and perform
the following powers and functions:
(i)
Ensure that the decisions of the LDC are faithfully carried out and
implemented;
(ii)
Act on matters that need immediate attention and action of the LDC;
(iii) Formulate policies, plans, and programs based on the objectives and priorities
set by the LDC; and
(iv) Take final action on matters that may be authorized by the LDC except the
approval of local development plans and annual investment plans.
(3)
Meetings The executive committee shall hold its meetings at least once a
month. Special meetings may be called by the chairman or by a majority of its
members.
(g)
Sectoral and Functional Committees
(1)
The LDCs may form sectoral or functional committees to assist them in the
performance of their functions.
(2)
To ensure policy coordination and uniformity in operational directions, the
sectoral and functional committees shall directly establish linkages with NGAs and
such sectoral or functional committees organized by the government for
development, investment and consultative purposes.
(3)
Consistent with national policies and standards, the sectoral or functional
committees shall:

(i)
Provide the LDC with data and information essential to the formulation of
plans, programs, and activities;
(ii)
Define sectoral or functional objectives, set targets, and identify programs,
projects, and activities for the particular sector or function;
(iii) Collate and analyze information and statistics and conduct related studies;
(iv) Conduct public hearings on vital issues affecting the sector or function;
(v)
Coordinate planning, programming, and implementation of programs,
projects, and activities within each sector;
(vi) Monitor and evaluate programs and projects; and
(vii) Perform such other functions as may be assigned by the LDC.
(h)
Participation of LDC Members in Sectoral or Functional Committees Each
member of the LDC shall, as far as practicable, participate in at least one sectoral or
functional committee.
(i)
Secretariat There shall be constituted for each LDC a secretariat responsible
for providing technical and administrative support, documenting proceedings,
preparing reports; and providing such other assistance as may be required by the
LDC. The LDC may avail of the services of any NGO or educational or research
institution for this purpose.
The secretariat of the provincial, city, and municipal development councils shall be
headed by their respective local 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.
(j)
Relation of LDCs to the Sanggunian and the Regional Development Council
(1)
The policies, programs, and projects proposed by the LDCs shall be submitted
to the sanggunian concerned for appropriate action.
(2)
The local development plan approved by the sanggunian shall be integrated
into the development plan of the next higher LDC.
(3)
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 NEDA, in accordance with applicable laws, rules and regulations.
(k)
Local Development Planning Process The DILG shall, in coordination and
consultation with NEDA and the leagues of LGUs, formulate the operational
guidelines of the local development planning process.
(l)
Budget Information The DBM shall furnish LDCs information on financial
resources and budgetary allocations applicable to their respective jurisdictions to
guide them in their planning functions.
Art. 183.
A Local Prequalification, Bids and Awards Committee. (a) Creation and
Composition There shall be created in every province, city, and municipality a PBAC
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, city or municipal mayor shall
act as chairman with the following as members:
(1)
The chairman of the appropriations committee of the sanggunian;
(2)
A representative of the minority party in the sanggunian, if any, or if there be
none, one (1) chosen by the sanggunian from among its members;
(3)
The local treasurer;
(4)
Two (2) representatives of NGOs that are represented in the LDC concerned,
to be chosen by the organizations themselves; and
(5)
Any practicing certified public accountant, from the private sector, to be
designated by the local chapter of the Philippine Institute of Certified Public
Accountants, if any.

Representatives of COA shall observe the proceedings of the PBAC and shall certify
that the rules and procedure for prequalification, bids and awards have been
complied with.
(b)
Agenda and Meetings
(1)
The agenda and other information relevant to the meetings of the PBAC shall
be deliberated upon by the committee at least one (1) week before the holding of such
meetings.
(2)
All meetings of the PBAC 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 conspicuous places in the provincial
capitol or the city or municipal hall, and delivered by the most expedient means to
elective local officials concerned.
(c)
Technical Committee
(1)
A technical committee shall be created in every province, city, and
municipality to provide technical assistance to PBACs. It shall be composed of the
local engineer, the local planning and development coordinator, and such other
officials designated by the local PBAC.
(2)
The chairman of the technical committee shall be designated by the local PBAC
and shall attend its meetings in order to present the reports and recommendations of
the said technical committee.
Art. 184.
Local School Boards. (a) Creation and Composition There shall be
established in every province, city or municipality a provincial, city or municipal
school board, respectively, in accordance with the following:
(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 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
associations, the duly elected representative of the teachers' organizations 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 committee on
education of the sangguniang panlungsod, the city treasurer, the representative of
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 committee on
education of the sangguniang bayan, the municipal treasurer, the representative of
the pederasyon ng mga sangguniang kabataan in the sangguniang bayan, the duly
elected president of the municipal federation of parents-teachers associations, the
duly elected representative of the teachers' organization in the municipality, and the
duly elected representative of the non-academic personnel of public schools in the
municipality, as members.
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 cochairman of the local school board shall be determined as follows:
(i)
The Department of Education, Culture and Sports (DECS) shall designate the
co-chairman for the provincial and city school boards; and

(ii)
The division superintendent of schools shall designate the district supervisor
who shall serve as co-chairman of the municipal school board.
(b)
Functions. The provincial, city or municipal school board shall:
(1)
Determine, in accordance with the criteria set by DECS, the annual
supplemental 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 of the proceeds of the special levy on
real property constituting the special education fund and such other sources of
revenue as the Code and other laws or ordinances may provide;
(2)
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 in
accordance with applicable existing rules and regulations;
(3)
Serve as 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
(4)
Recommend changes in the names of public schools within the territorial
jurisdiction of the LGU for enactment by the sanggunian concerned.
(c)
Consultation. The DECS shall consult the local school board on the
appointment of division superintendents, district supervisors, school principals, and
other school officials.
(d)
Prohibition from Delegation The performance of the duties and
responsibilities of the officials mentioned in paragraph (a) of this Article in their
respective local school boards shall not be delegated.
(e)
Meetings and Quorum
(1)
The local school board shall meet at least once a month or as often as may be
necessary.
(2)
Any of the co-chairmen may call a meeting. A majority of all its members shall
constitute a quorum. 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.
(f)
Budget 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. A majority of all the members shall be
necessary to approve the budget.
The annual school board 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 when necessary; and
(3)
Holding of sports activities at the division, district, municipal, and barangay
levels.
(g)
Special Education Fund The proceeds from 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 and provided further, that the proceeds shall be allocated in accordance with
Article 327 of Rule XXXI of these Rules, as determined by the local school boards.
(h)
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 shall be entitled to necessary traveling expenses and allowances chargeable

against the funds of the local school board concerned.
Art. 185.
Local Health Boards. (a) Creation and Composition There shall be
established in every province, city, or municipality a local health board composed of
the following:
(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 sanggunian panlalawigan, a representative from the private sector or
NGO involved in health services, and a representative of the DOH 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 NGO involved in
health services, and a representative of the DOH in the city, as members;
(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 NGO involved in health services and a representative of the DOH in the
municipality, as members.
(b)
Functions The provincial, city, and municipal health boards shall:
(1)
Propose to the sanggunian concerned, in accordance with the standards and
criteria set by DOH, annual budgetary allocations for the operation and maintenance
of health facilities and services within the province, city, or municipality, as the case
may be;
(2)
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)
Create committees which shall advise, local health agencies on matters such
as, but not limited to, technical and administrative standards of DOH, personnel
selection and promotion, bids and awards, grievances and complaints, personnel
discipline, budget review, operations review and similar functions.
(c)
Meetings and Quorum
(1)
The board shall meet at least once a month or as often as may be necessary.
(2)
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 a majority of the
members shall be necessary to approve such proposals.
(d)
Compensation and Remuneration The chairman, vice chairman, and
members of the provincial, city, or municipal health boards 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.
(e)
Direct supervision and control of DOH over local health operations 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 LGU
concerned, temporarily assume direct supervision and control over health operations
in any LGU for the duration of the emergency, but in no case exceeding a cumulative
period of six (6) months. With the concurrence of the LGU concerned, the period for
such direct national control and supervision may be further extended.
Art. 186.
Local Peace and Order Councils. There shall be established in every
province, city, and municipality a local peace and order council pursuant to EO No.

309, series of 1988, as amended (Annex C). The local peace and order councils shall
have the same composition and functions as those prescribed by said executive order.
Art. 187.
People's Law Enforcement Boards. There shall be established in the
LGU concerned a people's law enforcement board (PLEB) pursuant to the pertinent
provisions of RA 6975 (Annex D). The PLEBs shall have the same composition and
functions as those prescribed by said law.
Art. 188.
Membership of NGOs. Membership of NGOs in local special bodies
shall be determined in accordance with Rule XIII of these Rules.
RULE XXIV
ANNUAL REPORTS
Art. 189.
Submission. 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
LGU, which shall cover the immediately preceding calendar year. A copy of the report
shall be forwarded to DILG. Component cities and municipalities shall likewise
provide the sangguniang panlalawigan concerned copies of their respective annual
reports.
Art. 190.
Contents of the Report. The annual report shall be comprehensive in
scope and, as much as possible, be prepared in accordance with the following form
and contents:
(a)
Message contains important local policies, programs, and activities of the
LGU concerned; the status of their implementation; and other relevant information
that affects the lives and welfare of its inhabitants. It may also contain information on
what the populace may expect for the coming year or years. This portion of the report
may be signed solely by the local chief executive or jointly with the sanggunian
members concerned.
(b)
Executive Summary contains the significant results of local government
operations of the year under review.
(c)
Brief Description of the LGU provides information on the LGU's
socioeconomic and demographic profile; political and peace and order conditions;
general and sectoral development objectives; physical framework plans; land use
plans; and other related information.
(d)
Organization and Management identifies the offices and personnel of the
LGU, including a description of their functions, duties, and responsibilities; and
describes the role of each office and key personnel. For each office, the report of
accomplishments shall be focused on the delivery of basic services and facilities.
Physical accomplishments may be stated in terms of the number of people served,
revenues collected, and kilometers of roads constructed or maintained. In all cases,
physical results correspond with financial expenditures. These reports may include a
comparative statement showing actual accomplishment versus target.
(e)
Budget Performance and Financial Statements report on the results of the
budgetary and financial transactions of the LGU for the preceding year. Such data
shall include an analysis of performance versus approved budget, disbursements, and
cash balances; comparative data for the year preceding the year under review;
revenue-expenditure pattern for three (3) to five (5) years; efficiency and
effectiveness of the LGU in the delivery of basic services vis-a-vis budgetary
expenditures on a sectoral and per capita basis; and financial statements duly
certified by COA.
(f)
Plans, Programs, and Accomplishment describe in narrative and pictorial
manner the major plans and programs of the LGU and its accomplishments during
the year under review. Presentation is performance-oriented indicating types of
services delivered and projects undertaken in the social or economic fields.

(g)
Local Legislation contains the report of the sanggunian in the exercise of its
legislative powers such as budget approval, concurrence with the appointments made
by the local chief executive, passage of significant ordinances and resolutions, and
results of oversight and review functions.
(h)
Plans and Programs for the Ensuing Year describe the visions, directions,
plans, and budgetary thrusts of the LGU for the coming year.
Art. 191.
Distribution and Evaluation of Reports. (a) Two (2) copies of the
annual reports shall be submitted to the central and regional offices of DILG which
shall evaluate these annual reports and use the same for the development and
recommendation of integrated and comprehensive technical assistance packages for
LGUs.
(b)
Component cities and municipalities shall likewise submit to the sangguniang
panlalawigan copies of their annual reports. Submission shall be done formally in a
sanggunian session called for the purpose of receiving and reviewing such reports.
This occasion may be used by the province to assist the component LGUs in
identifying and defining problems, issues and concerns, development assistance
requirements, and possible formulation of inter-local linkages for consideration of
the governor.
Art. 192.
Special Reports. Whenever necessary, all local chief executives may
submit special reports to the Secretary of DILG on any unusual or unexpected events
and occurrences in their localities particularly if such information deals with internal
security or promotes intergovernmental relations.
RULE XXV
BARANGAY ASSEMBLY
Art. 193.
Composition. There shall be a barangay assembly in every barangay
composed of all persons who are:
(a)
actual residents of the barangay for at least six (6) months;
(b)
fifteen (15) years of age or over;
(c)
citizens of the Philippines; and
(d)
duly registered in the list of barangay assembly members.
Art. 194.
Meetings. (a) The barangay assembly shall meet at least twice a year
and discuss the semestral report of the sangguniang barangay concerning its
activities and finances as well as problems affecting the 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 which shall be submitted to, and favorably
acted upon, by the punong barangay.
(b)
A written notice to all barangay assembly members stating the date, time,
venue, and purpose of the meeting shall be posted in three (3) conspicuous places
within the barangay 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.
(c)
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 the meetings of the assembly.
(d)
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.
Art. 195.
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.
RULE XXVI
KATARUNGANG PAMBARANGAY
Art. 196.
Lupong Tagapamayapa. There shall be created in each barangay a
lupong tagapamayapa composed of the punong barangay as chairman and ten (10) to
twenty (20) members. The lupon shall be constituted every three (3) years.
Art. 197.
Pangkat ng Tagapagkasundo. There shall be constituted for each
dispute brought before the lupon a conciliation panel to be known as the pangkat ng
tagapagkasundo consisting of three (3) members who shall be chosen by the parties
to the dispute from the list of members of the lupon.
Art. 198.
Economic or Other Incentives. The DILG shall provide 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.
Art. 199.
Penalty for 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 summons issued pursuant to this
Rule 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 course of action, and the respondent who refuses to appear,
from filing any counterclaim arising out of, or necessarily connected with the
complaint.
Art. 200.
Responsibility of the City or Municipal Mayor. The city or municipal
mayor, as the case may be, shall be responsible for the efficient and effective
implementation of the katarungang pambarangay.
Art 201.
Implementing Rules and Regulations. The Secretary of Justice shall
promulgate the rules and regulations to implement this Rule which shall form part of
these Rules.
RULE XXVII
SANGGUNIANG KABATAAN
Art. 202.
Katipunan ng Kabataan. (a) Organization and Purpose There shall be
an assembly of youth in every barangay, to be known as katipunan ng kabataan,
whose primary objective is to enhance the social, political, economic, cultural,
intellectual, moral, spiritual, and physical development of the youth of the country.
(b)
Composition The katipunan ng kabataan shall be composed of all Filipino
citizens actually residing in the barangay for at least six (6) months, who are at least
fifteen (15) but not more than twenty-one (21) years of age, and who are duly
registered in the sanggunian ng kabataan or in the official barangay list in the custody
of the barangay secretary.
(c)
Meetings 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.
(d)
Rights and Duties of Members Every member of the katipunan ng kabataan is
eligible to vote and be elected in the sangguniang kabataan elections and participate
in the programs, projects, and activities of the barangay as may be adopted by the
sangguniang kabataan or the sangguniang barangay, unless otherwise provided in the
Code and other applicable laws.
Art. 203.
Sangguniang Kabataan. (a) Organization and Composition

(1)
There shall be in every barangay a sangguniang kabataan composed of a
chairman, seven (7) members, a secretary, and a treasurer.
(2)
The chairman and the seven (7) members shall be elected at large by the
registered members of the katipunan ng kabataan.
(3)
The secretary and the treasurer shall be appointed by the chairman from
among the members of the sangguniang kabataan, subject to their concurrence.
(b)
Powers and Functions The sangguniang kabataan shall:
(1)
Promulgate resolutions necessary to carry out the objectives of the youth in the
barangay in accordance with applicable provisions of the Code;
(2)
Initiate programs designed to enhance the social, political, economic, cultural,
intellectual, moral, spiritual, and physical development of the members;
(3)
Hold fund-raising activities, the proceeds of which shall be tax-exempt and
shall accrue to the general fund of the sangguniang kabataan provided that, in the
appropriation thereof, the specific purpose for which such activity has been held shall
be first satisfied;
(4)
Create such bodies or committees as it may be deemed necessary to effectively
carry out its programs and activities;
(5)
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;
(6)
Consult and coordinate with all youth organizations in the barangay for policy
formulation and program implementation;
(7)
Coordinate with the Presidential Council for Youth Affairs (PCYA) and other
NGAs concerned for the implementation of youth development projects and
programs at the national level; and
(8)
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.
(c)
Meetings and Quorum The sangguniang kabataan shall meet regularly once a
month on the date, time, and place to be fixed by the said sangguniang. Special
meetings may be called by the sangguniang kabataan chairman or any three (3) of its
members by giving a written notice to all members of the date, time, place, and
agenda of the meetings at least one (1) day in advance. Notices of regular or special
meetings shall be furnished the punong barangay and the members of the
sangguniang barangay. A majority of the members of the sangguniang kabataan shall
constitute a quorum.
(d)
Qualifications of Elective Members An elective official of the sangguniang
kabataan must be:
(1)
A citizen of the Philippines;
(2)
A qualified voter of the katipunan ng kabataan;
(3)
A resident in the barangay for at least one (1) year immediately prior to
election;
(4)
At least fifteen (15) years but not more than twenty one (21) years of age on the
day of his election;
(5)
Able to read and write Filipino, any Philippine language or dialect, or English;
and
(6)
Such elective official must not have been convicted of any crime involving
moral turpitude.
(e)
Elections and Tern of Office (1) The first elections for the sangguniang
kabataan to be conducted under the Code shall be held on June 11, 1992. The
members to be elected shall serve from June 30, 1992 to September 30, 1994.
(2)
The regular elections for the sangguniang kabataan members shall be held one
hundred twenty (120) days after the barangay elections in 1994 and the succeeding

election shall be held every three (3) years thereafter. The regular term of office of the
sangguniang kabataan members shall be three (3) years, unless sooner removed for
cause as provided by law, permanently incapacitated, die, or resign from office.
(3)
The sangguniang kabataan chairman and members will 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.
(4)
A sangguniang kabataan official who, during his tern 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.
(5)
The conduct and administration of the elections for sangguniang kabataan
members shall be governed by the rules promulgated by the Comelec. These Rules
shall be suppletory in character.
(f)
Powers and Duties of the Chairman The registered voters of the katipunan ng
kabataan shall elect the chairman of the sangguniang kabataan who shall:
(1)
Serve automatically as ex officio member of the sangguniang barangay upon
his assumption to office. As an ex officio member, he shall exercise the same powers,
discharged 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;
(2)
Serve as member of the barangay development council; and
(3)
Represent the sangguniang kabataan in the pederasyon ng mga sangguniang
kabataan;
(4)
Call and preside over all meetings of the katipunan ng kabataan and the
sangguniang kabataan;
(5)
Implement policies, programs, and projects within his jurisdiction in
coordination with the sangguniang barangay;
(6)
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;
(7)
Appoint with the concurrence of the sangguniang kabataan from among the
members of the sangguniang kabataan, the secretary and the treasurer, and such
other officers as may be deemed necessary; and
(8)
Exercise such other powers and perform such other duties and functions as
may be prescribed by law or ordinance;
(g)
Duties of the Secretary The sangguniang kabataan secretary shall:
(1)
Keep all records of the katipunan ng kabataan and sangguniang kabataan;
(2)
Prepare and keep the minutes of all meetings of the katipunan ng kabataan
and sangguniang kabataan;
(3)
Prepare all forms necessary for the conduct of registrations, elections,
initiatives, referenda, or plebiscites, in coordination with the barangay secretary and
the Comelec; and
(4)
Perform such other duties and discharge such other functions as the chairman
of the sangguniang kabataan may prescribe or direct.
(h)
Duties of the Treasurer The sangguniang kabataan treasurer shall:
(1)
Take custody of all sangguniang kabataan property and funds not otherwise
deposited with the city or municipal treasurer;
(2)
Collect and receive contributions, monies, materials, and all other resources
intended for the sangguniang kabataan and the katipunan ng kabataan;
(3)
Disburse funds in accordance with an approved budget of the sangguniang
kabataan;
(4)
Certify to the availability of funds whenever necessary;

(5)
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
(6)
Perform such other duties and discharge such other functions as the
sangguniang kabataan chairman may direct.
(i)
Privileges The sangguniang kabataan chairman shall have the same privileges
enjoyed by other sangguniang barangay officials under Rule XIV of these Rules,
subject to such requirements and limitations provided in this Rule. 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, said officials shall enroll in the state college or university within or
nearest their area of jurisdiction.
(j)
Succession and Filing of Vacancies
(1)
In case a sangguniang kabataan chairman refuses to assume office, fails to
qualify, is convicted of 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 members 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 sangguniang
kabataan member obtaining the next highest number of votes shall assume the
position of the chairman for the unexpired portion of the term.
(2)
Where two (2) or more sangguniang kabataan members obtained the same
next highest number of votes, the other sangguniang kabataan members shall
conduct and election to choose the successor to the chairman from among the said
members.
(3)
After the vacancy shall have been filled, the sangguniang kabataan chairman
shall call a special election to complete the membership of said sanggunian. The duly
elected sangguniang kabataan member shall hold office for the unexpired portion of
the term of the vacant seat.
(4)
In case of suspension of the sangguniang kabataan chairman, the successor, as
determined in paragraphs (2) and (3) above, shall assume the position during the
period of such suspension.
Art. 204.
Pederasyon ng mga Sangguniang Kabataan (a) Organization There
shall be an organization of all the pederasyon ng mga sangguniang kabataan to be
known as follows:
(1)
For municipalities, Pambayang Pederasyon ng Sangguniang Kabataan;
(2)
For cities, Panlungsod na Pederasyon ng Sangguniang Kabataan;
(3)
For provinces, Panlalawigang Pederasyon ng Sangguniang Kabataan;
(4)
For special metropolitan political subdivisions, Pangmetropolitang Pederasyon
ng Sangguniang Kabataan; and
(5)
For the national level, Pambansang Pederasyon ng Sangguniang Kabataan.
(b)
Election 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. Election of officer shall be held thirty (30) days after the
sangguniang kabataan elections.
(c)
Composition The pederasyon ng mga sangguniang kabataan shall be
organized in the following manner.

(1)
The panlungsod and pambayang pederasyon shall be composed of the
sangguniang kabataan chairmen of barangays in the city and municipality,
respectively;
(2)
The panlalawigan pederasyon shall be composed of presidents of the
panlungsod and pambayang pederasyon;
(3)
The pangmetropolitang pederasyon shall be composed of presidents of the
panlungsod and pambayang pederasyon in special metropolitan political
subdivisions.
(d)
Pambansang Katipunan ng mga Sangguniang Kabataan 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 and shall hold elections for the pambansang katipunan
thirty days (30) days after the panlalawigan and pangmetropolitang pederasyon
elections.
(e)
Constitution and By-laws The term of office, manner of election, removal, and
suspension of pederasyon officers shall be governed by the constitution and by-laws
of the pederasyon in conformity with the provisions of the Code and national policies
on youth.
(f)
Ex Officio Membership in the Sanggunian
(1)
A sangguniang kabataan chairman who is elected as pederasyon president
during his tenure of office and upon certification as such by the Comelec shall serve
as ex officio member of the sangguniang panlalawigan, sangguniang panlungsod, and
sangguniang bayan, as the case may be, without need of further appointment.
(2)
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.
(3)
The pederasyon president or vise president, as the case may be, shall be the
chairman of the committee on youth and sports development of the sanggunian
concerned.
(g)
Membership in the Local School Board The pederasyon ng mga sangguniang
kabataan president shall serve as member of the local school board in the province,
city, and municipality, as the case may be.
(h)
Declaration of Vacancy 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 shall have been selected.
(i)
National Secretariat The PCYA shall serve as the national secretariat of the
pambansang pederasyon.
Art. 205.
Funds for the Elections of Sangguniang Kabataan. (a) The amount
pertaining to the ten percent (10%) allocation for the kabataang barangay as provided
in Section 103 of BP 337 is hereby reappropriated for the purpose of funding the first
election of the sangguniang kabataan to be held on June 11, 1992. The balance of such
funds, if there be any after said elections, shall be administered by the PCYA for the
purpose of training the newly elected sangguniang kabataan officials in the discharge
of their functions.
(b)
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 under these Rules.
Art. 206.
Kabataang Barangay Elections. Elections for the kabataang barangay
conducted under BP 337 at any time between January 1, 1988 and January 1, 1992
shall be considered as the first elections provided in the 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 the Code.

Art. 207.
Training of Newly Elected Sangguniang Kabataan Officials. (a) The
PCYA shall, in coordination with the local chief executive concerned, administer a
training program for the newly elected sangguniang kabataan officials with the
following objectives:
(1)
Develop their leadership abilities;
(2)
Orient them on the pertinent provisions of these Rules, the Code and such
other applicable laws, rules and regulations;
(3)
Enhance their organizational and managerial skills;
(4)
Increase their awareness and appreciation of such relevant concepts as unity,
nationalism, peace, cooperation, service, concern for the environment, citizenship,
and respect for the rule of law; and
(5)
Evolve a sustained development training program for the youth in the LGU.
RULE XXVIII
LINGGO NG KABATAAN
Art. 208.
Observance of Linggo ng Kabataan. (a) Every province, city,
municipality, and barangay 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 elective and appointive local officials, as well as heads of NGAs
stationed or assigned in the territorial jurisdiction of the LGU, among in-school and
community youth residing in the LGU 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 Rule.
Art. 209.
Linggo ng Kabataan Activities. The pederasyon ng sangguniang
kabataan shall conduct the following activities during the Linggo ng Kabataan:
(a)
Commemoration of young Filipino heroes who made significant contributions
to the development of the country or the locality;
(b)
Recognition and awarding of outstanding youth organizations for their
achievements and contributions to development; and
(c)
Awareness campaign on environmental issues, sports festivals and
competitions, cultural festivals, arts and skills exhibition, volunteer work, tour of
historical places, and such youth-oriented activities as may be deemed relevant.
RULE XXIX
LEAGUES OF LOCAL GOVERNMENT UNITS AND FEDERATIONS OF OTHER
ELECTIVE LOCAL OFFICIALS
Art. 210.
Liga ng mga Barangay. (a) Organization and Purpose
(1)
There shall be an organization of all barangays, to be known as the liga ng mga
barangay.
(2)
The said liga shall be organized for the primary purpose of determining the
representation of the liga in the sanggunian and for ventilating, articulating, and
crystallizing issues affecting barangay government administration and securing,
through proper and legal means, solutions thereto.
(b)
Representation Every barangay shall be represented in the 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.
(c)
Local Chapters and National Liga The liga shall have chapters in the
municipality, city, province, and metropolitan political subdivision.

(1)
Municipal and City Chapters The municipal and city chapters of the liga shall
be composed of the barangay representatives of municipal and city barangays,
respectively. The existing association of barangay councils in all municipalities and
cities shall be recognized as municipal and city chapters of the liga, subject to the
provisions of this Rule.
(2)
Provincial Chapter The duly elected presidents of municipal and component
city chapters shall constitute the provincial chapter. The existing association of
barangay councils in the province shall be recognized as provincial chapters of the
liga, subject to the provisions of this Rule.
(3)
Metropolitan Chapter The duly elected presidents of the municipal chapters
within MMA or such other metropolitan political subdivision as may be created by
law, shall constitute the metropolitan chapter.
(4)
National Liga ng mga Barangay The duly elected presidents of highly
urbanized city chapters, provincial chapters, and metropolitan chapters shall
constitute the national liga ng mga barangay.
(d)
Ex Officio Membership in the Sanggunian
(1)
The duly elected presidents of the liga at the municipality, city, and province,
including component cities and municipalities within MMA, or any metropolitan
political subdivision as may be created by law, shall serve as ex officio members of the
sangguniang bayan, sangguniang panglungsod, and sangguniang panlalawigan, as the
case may be.
(2)
They shall serve as ex officio members of the sanggunian concerned only
during their term of office as presidents of the liga chapters, which in no case shall go
beyond the term of office of the sanggunian concerned.
(3)
The incumbent presidents of the municipal, city, and provincial chapters of the
liga shall continue to serve as ex officio members of the sanggunian concerned until
the expiration of their term of office, unless sooner removed for cause.
(e)
Powers, Functions and Duties of the Liga ng mga Barangay The liga shall:
(1)
Give priority to programs designed for the total development of the barangays
and consonance with the policies, programs and projects of the National
Government;
(2)
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 countrywide development goals;
(3)
Supplement the efforts of government in creating gainful employment within
the barangay;
(4)
Adopt measures to promote the welfare of barangay officials;
(5)
Serve as a forum of the barangays in order to forge linkages with NGAs and
NGOs and thereby promote the social, economic, and economic well-being of the
barangay; and
(6)
Exercise such other powers and perform such other duties and functions which
will bring about the stronger ties among barangays and promote the welfare of
barangay inhabitants.
(f)
Organizational Structure
(1)
The national liga and its local chapters shall directly elect their respective
officers, namely: a president, 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. Pending
election of the presidents of the municipal, city, provincial, and metropolitan
chapters of the liga, the incumbent presidents of the association of barangay councils
in the municipality, city, province, and Metropolitan Manila shall continue to act as
presidents of the corresponding liga chapters under this Rule.

(2)
A secretary-general shall be elected from among the members of the national
liga who shall be responsible for the overall operation of the liga. Pending election of
a secretary-general under this rule, the incumbent president of the pambansang
katipunan ng mga barangay shall act as the secretary-general. The incumbent
members of the board of the pambansang katipunan ng mga barangay, headed by the
secretary-general, who continue to be presidents of the respective chapters of the liga
to which they belong, shall constitute a committee to exercise the powers and duties
of the national liga and draft or amend the constitution and by-laws of the national
liga to conform to the provisions of this Rule.
(3)
The board of directors shall coordinate the activities of the various chapters of
the liga.
(g)
Constitution and By-Laws of the Liga
(1)
All other matters not provided under this Rule affecting the internal
organization of the liga shall be governed by its constitution and by-laws, unless
inconsistent with the Constitution and applicable laws, rules and regulations.
(2)
The committee created in this Article shall formulate uniform constitution and
by-laws applicable to the national liga and all local chapters. The committee shall
convene the national liga to ratify the constitution and by-laws within six (6) months
from issuance of these Rules.
(3)
Election of the first set of officers of the national liga and local chapters shall
be held in accordance with the duly adopted constitution and by-laws within six (6)
months from ratification by the barangay national assembly.
Art. 211.
League of Municipalities. (a) There shall be an organization of all
municipalities to be known as the league of municipalities. The existing municipal
mayors league of the Philippines shall be recognized as the league of municipalities,
subject to the provisions of this Rule.
(b)
The league shall have the primary purpose of ventilating, articulating, and
crystallizing issues affecting municipal government administration and securing,
through proper and legal means, solutions thereto.
(c)
Every municipality shall be represented in the league by the municipal mayor
or, in his absence, by the vice mayor or sangguniang bayan member duly elected for
the purpose by the members, who shall attend all meetings and participate in the
deliberations of the league.
(d)
The league shall form the following local chapters:
(1)
Provincial chapters, composed of municipal mayors or their duly authorized
representatives for all municipalities of every province; and
(2)
Metropolitan chapters, composed of municipal mayors within MMA or other
metropolitan political subdivisions as may be created by law.
The provincial and metropolitan chapters shall carry out the policies and instructions
formulated by the national board of directors.
(e)
All municipal mayors in every province and in Metropolitan Manila or a
majority thereof shall, on the second Monday of June, 1992 following their election as
mayors, initially convene in their capacity as representatives of their respective
municipalities and elect their provincial and metropolitan chapter presidents and
other officers from among themselves.
(f)
A national board of directors shall be organized composed of all provincial and
metropolitan chapter presidents. The national board shall be the policy governing
body of the league whose primary functions consist of formulating general policies for
attaining the purpose of the league and approving its annual budget.
Art. 212.
League of Cities. (a) There shall be an organization of all cities to be
known as the league of cities. The existing league of cities shall be recognized as the
league of cities, subject to the provisions of this Rule.

(b)
The league shall have the primary purpose of ventilating, articulating, and
crystallizing issues affecting city government administration and securing, through
proper and legal means, solutions thereto.
(c)
Every city shall be represented in the league by the city mayor or, in his
absence, by the vice mayor or sanggunian member duly elected for the purpose by the
members, who shall attend all meetings and participate in the deliberations of the
league.
(d)
Component cities of province and highly-urbanized cities may form their
respective local chapters.
(e)
The national leagues shall be composed of the presidents of the chapter of
highly-urbanized cities and the chapter of component cities of a province.
Art. 213.
League of Provinces. (a) There shall be an organization of all provinces
to be known as the league of provinces. The existing league of provincial governors
shall be recognized as the league of provinces, subject to the provisions of this Rule.
(b)
The league shall have the primary purpose of ventilating, articulating, and
crystallizing issues affecting provincial and metropolitan government administration
and securing, through proper and legal means, solutions thereto. For this purpose,
the MMA and any metropolitan political subdivision as may be created by law shall
be considered as separate provincial units of the league.
Art. 214.
Common Provisions for the Leagues of Municipalities, Cities, and
Provinces. (a) Powers and Functions The leagues shall:
(1)
Assist the National Government in the formulation and implementation of
policies, programs and projects affecting LGUs;
(2)
Promote local autonomy;
(3)
Adopt measures for the promotion of the welfare of the LGU concerned and its
officials and employees;
(4)
Encourage people's participation in local government administration in order
to promote united and concerted action for the attainment of countrywide
development goals.
(5)
Supplement the efforts of the National government in creating opportunities
for gainful employment within the LGUs;
(6)
Give priority to programs designed for the total development of LGUs in
consonance with the policies, programs, and projects of the National Government;
(7)
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 LGUs; and
(8)
Exercise such other powers and functions as the leagues may prescribe for the
welfare of LGUs.
(b)
Organizational Structure The leagues of municipalities, cities, and provinces
shall elect their respective chapter-level and national-level boards of directors and
sets of officers headed by the president. A secretary-general shall be chosen from
among the national league members to manage the day-to-day operations 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 local chapters and of the national leagues. The national board of
directors of the leagues of municipalities, cities, and provinces shall coordinate
programs, projects, and activities of the local chapters and the national league.
The incumbent presidents of the leagues shall act as the concurrent secretary-general
of their respective leagues until their successors shall have been elected and qualified.
(c)
Term of Office The term of office of all officers of the leagues in the local
chapters and the national board of directors shall be coterminous with their term of
office as municipal or city mayors or provincial governors, as the case may be.

(d)
(1)

Funding
Funds of the leagues and the liga ng mga barangay shall be sourced from:

(i)
Contributions of members LGUs the amount of which shall be prescribed
under the constitution and by-laws of the league. The membership fee and annual
due shall be charged against any available fund of the LGU concerned.
(ii)
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 projects for which such proceeds have been raised,
subject to the pertinent provisions of the Code and the Omnibus Election Code, as
amended; and
(iii) Other lawful sources of funds which shall be identified under the constitution
and by-laws of the league.
(2)
All funds of the league shall be deposited as trust funds in the name of the
league and administered by its treasurer and shall be disbursed in accordance with
the board of directors' resolutions, subject to pertinent accounting and auditing rules
and regulations. 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.
(e)
Constitution and By-Laws
(1)
The national board of directors shall promulgate and adopt the constitution
and by-laws of the league immediately after the formal organization of the local
chapters as provided in this Rule.
(2)
The constitution and by-laws of the league shall be ratified by a majority of the
members present there being a quorum in the general assembly to be called for the
purpose.
(3)
All other matters not provided under this Rule affecting the internal
organization of the league shall be governed by its constitution and by-laws which
shall conform to the provisions of the Constitution, the Code, and other applicable
laws.
Art. 215.
Federations of Other Elective Local Officials. (a) Organization (1) Vice
governors, vice mayors, sanggunian members of barangays, municipalities,
component cities, highly-urbanized cities, and provinces, and other elective officials
of LGUs, including those of MMA and any metropolitan political subdivision as may
be created by law, may form their respective federations, subject to applicable
provisions of this Rule;
(2)
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.
(3)
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 said federation, which in no case shall go beyond the term of
office of the sangguniang panlalawigan concerned.
(b)
Constitution and By-Laws The federations shall adopt their respective
constitutions and by-laws which shall govern their respective internal organizations
and operations provided that said constitutions and by-laws conform to the
provisions of the Constitution and applicable laws.
(c)
Funding The federations may derive their funds from contributions of their
members or from fund-raising projects or activities. The LGU concerned may
appropriate funds to support the federations organized in accordance with this Rule,
subject to availability of funds.

Art. 216.
Assistance to the Leagues. The DILG may extend technical and
financial assistance and secretariat services to the leagues of LGUs and federations of
other elective local officials upon request.
RULE XXX
LOCAL GOVERNMENT TAXATION
Part One. General Provisions
Art. 217.
Scope. The following rules and regulations shall govern the exercise by
provinces, cities, municipalities, and barangays of their taxing and other revenueraising powers.
Art. 218.
Power to Create Sources of Revenue. Consistent with the basic policy of
local autonomy, each LGU shall exercise its power to create its own sources of
revenue and to levy taxes, fees, or charges, subject to the provisions of this Rule. Such
taxes, fees, or charges shall accrue exclusively to the LGU.
Art. 219.
Fundamental Principles. The following fundamental principles shall
govern the exercise of the taxing and other revenue-raising powers of LGUs:
(a)
Taxation shall be uniform in each LGU. The uniformity required is only within
the territorial jurisdiction of a province, a city, a municipality, or a barangay;
(b)
Taxes, fees, charges, or other impositions shall:
(1)
Be equitable and based, as far as practicable, on the taxpayer's ability to pay;
(2)
Be levied and collected only for public purposes;
(3)
Not be unjust, excessive, oppressive, or confiscatory;
(4)
Not be contrary to law, public policy, national economic policy, or in restraint
of trade;
(c)
Collection of local taxes, fees, charges, or other impositions shall in no case be
let to any private person;
(d)
The revenue collected pursuant to the provisions of this Rule shall insure
solely to the benefit of, and be subject to disposition by, the LGU levying the tax, fee,
charge, or other imposition unless otherwise specifically provided in this Rules; and
(e)
Each LGU shall, as far as practicable, evolve a progressive system of taxation.
Art. 220.
Definition of Terms. (a) 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 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.
To be considered an agricultural product whether in its original form or not, its
transformation must have been undertaken by the farmer, fisherman, producer or
owner.
Agricultural products as defined include those that have undergone not only simple
but even sophisticated processes employing advanced technological means in
packaging like dressed chicken or ground coffee in plastic bags or styropor or other
packaging materials intended to process and prepare the products for the market.
The term by-products shall mean those materials which in the cultivation or
processing of an article remain over, and which are still of value and marketable, like
copra cake from copra or molasses from sugar cane;
(b)
Amusement is a pleasurable diversion and entertainment. It is synonymous to
relaxation, avocation, pastime, or fun;
(c)
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 performance;

(d)
Business means trade or commercial activity regularly engaged in as a means
of livelihood or with a view to profit;
(e)
Banks and Other Financial Institutions include non-bank financial
intermediaries, lending investors, finance and investment companies, pawnshops,
money shops, insurance companies, stock markets, stock brokers and dealers in
securities and foreign exchange, as defined under applicable law, or rules and
regulations thereunder;
(f)
Capital Investment is the capital which a person employs 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;
(g)
Charges refers to pecuniary liability, as rents or fees against persons or
property;
(h)
Contractor includes persons, natural or juridical, not subject to professional
tax under Article 229 of this Rule, whose activity consists essentially of the sale of all
kind 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 Article, 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 establishments for planing
or surfacing and recutting of lumber, and sawmills under contract to saw or cut logs
belonging to others; proprietors or operators of dry-cleaning or dyeing establishment,
steam laundries, and 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, milliners and hatters, beauty
parlors, barbershops, massage clinics, sauna, Turkish and Swedish baths,
slenderizing and body-building saloons and similar establishment; 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 as 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;
(i)
Corporation includes partnerships, no matter how created or organized, jointstock companies, joint accounts (cuentas en participacion), associations or insurance
companies but does not include general professional partnerships and a joint venture
or consortium formed for the purpose of undertaking construction projects or
engaging in petroleum, coal, geothermal, coal, geothermal, and other energy
operations or consortium agreement under a service contract with the government.
General professional partnerships are partnerships 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;
(j)
Countryside and Barangay Business Enterprise refers to any business entity,
association, or cooperative registered under the provisions of RA 6810, otherwise
known as Magna Carta For Countryside And Barangay Business Enterprises
(Kalakalan 20);
(k)
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 consumers and depends for his profit not upon the labor he
bestows upon his commodities but upon the skill and foresight with which he watches
the market:
(l)
Fee means a charge fixed by law or ordinance for the regulation or inspection
of a business or activity. It shall also include charges fixed by law or agency for the
services of a public officer in the discharge of his official duties;
(m) 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;
(n)
Gross Sales or Receipts include the total amount of money or its equivalent
representing the contract price, compensation or service fee, including the amount
charged or materials supplied 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);
(o)
Manufacturer includes every person who, by physical or chemical process,
alters the exterior texture or form or inner substance of any raw materials or
manufactured or partially manufactured product in such manner as to prepare it for
special use or uses to which it could not have been put in its original condition, or
who by any such process, alters the quality of any such raw material 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 or partially 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 in their original
condition could not have been put, and who in addition, alters such raw material or
manufactured or partially 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;
(p)
Marginal Farmer or Fisherman refers or 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, and
whose annual net income from such farming of fishing does not exceed Fifty
Thousand Pesos (P50,000.00) or the poverty line established by NEDA for the
particular region or locality, whichever is higher;
(q)
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, forklifts, amphibian trucks, and cranes
if not used on public roads, vehicle which run only on rails or tracks, and tractors,
trailers, and traction engines of all kinds used exclusively for agricultural purposes;
(r)
Municipal Waters include 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 respective
municipalities;
(s)
Operator includes the owner, manager, administrator, or any other person
who operates or is responsible for the operation of a business establishment or
undertaking;
(t)
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 retail peddler of a particular commodity shall be
determined from the definition of wholesale dealer or retail dealer as provided in this
Rule;
(u)
Persons mean every natural or juridical being, susceptible of rights and
obligations or of being the subject to legal relations;
(v)
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 which 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;
(w)
Retail means a sale where the purchaser buys the commodity for his own
consumption, irrespective of the quantity of the commodity sold;
(x)
Vessel includes every type of boat, craft, or other artificial contrivance used, or
capable of being used, as a means of transportation on water;
(y)
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
(z)
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.
Art. 221.
Common Limitations on the Taxing and Other Revenue-Raising Powers
of Local Government Units. Unless otherwise provided in this Rule, the exercise of
the taxing and other revenue-raising powers of provinces, cities, municipalities and
barangays shall not extend to the levy of the following:
(a)
Income tax, except when levied on banks and other financial institutions as
provided in Article 233(f) of this Rule;
(b)
Documentary stamp tax;
(c)
Taxes on estates, inheritance, gifts, legacies and other acquisitions mortis
causa, except as otherwise provided in Article 225 of this Rule;
(d)
Customs duties, registration fees of vessel and wharfage on wharves, tonnage
dues, and all other kinds of customs fee, charges and dues except wharfage on
wharves constructed and maintained by the LGU concerned;
(e)
Taxes, fee, and charges and other impositions upon goods carried into or out
of, or passing through the territorial jurisdictions of LGUs 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;

(f)
Taxes, fee, or charges on agricultural and aquatic products when sold by
marginal farmers or fishermen;
(g)
Taxes on business enterprises certified by the Board of Investments as pioneer
or non-pioneer for a period of six (6) and four (4) years, respectively, from the date of
registration;
(h)
Excise taxes on articles enumerated under the National Internal Revenue Code
(NIRC), as amended, and taxes, fees or charges on petroleum products;
(i)
Percentage or Value Added Tax (VAT) on sales, barters, or exchanges or
similar transactions on goods or services, except as otherwise provided herein;
(j)
Taxes on the gross receipts of transportation contractors and persons engaged
in the transportation of passengers or freight by hire and common carriers by air,
land or water, except on the operation and franchising of tricycles;
(k)
Taxes on premiums paid by way of reinsurance or retrocession;
(l)
Taxes, fees, or charges for the registration of motor vehicles and for the
issuance of all kinds of licensor permits for the driving thereof, except tricycles;
(m) Taxes, fees, or other charges on Philippine products actually exported, except
as otherwise provided in Article 233(c) of this Rule;
(n)
Taxes, fees, or charges, on countryside and barangay business enterprises and
cooperatives duly registered under RA 6810, and RA 6938, otherwise known as the
Cooperatives Code of the Philippines, respectively; and
(o)
Taxes, fees or charges of any kind on the National Government, its agencies
and instrumentalities, and LGUs.
Art. 222.
Local Taxing Authority. The power to impose a tax, fee, or charge or to
generate revenue under the Code shall be exercised by the sanggunian of the LGU
concerned through an appropriate tax ordinance or revenue measure.
Part Two. Provinces
Art. 223.
Taxing and Other Revenue-Raising Powers of Provinces. Except as
otherwise provided in this Rule, the province may levy only the taxes, fees and
charges as herein provided for.
Art. 224.
Tax on Transfer or 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 RA 6657 shall be exempt from this tax.
The fair market value as used herein shall be that reflected in the prevailing schedule
of fair market values enacted by the sanggunian concerned.
(b)
For this purpose, the registrar 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 treasurer 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 from the date of the execution of the
deed or from the date of the property owner's death.
Art. 225.
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 printed
materials of similar nature, at 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 business started to operate, the tax shall be based on the gross
receipts for the preceding calendar year, or any fraction thereof as provided in this
Rule.
The receipts from the printing and/or publishing of books or other reading materials
prescribed by DECS as school texts or references shall be exempt from the tax herein
imposed.
Art. 226.
Franchise Tax. (a) Notwithstanding any exemption granted by any law
or other special law, the province may impose a tax on businesses enjoying a
franchise, at a rate not exceeding fifty percent (50%) of one percent (1%) of the gross
annual receipts, which shall include both cash sales and sales on account realized
during the preceding calendar year within its territorial jurisdiction, excluding the
territorial limits of any city located in the province.
(b)
The province shall not impose the tax on business enjoying franchise operating
within the territorial jurisdiction of any city located within the province.
(c)
The term businesses enjoying franchise shall not include holders of certificates
of public convenience for the operation of public utility vehicles for reason that such
certificates are not considered as franchises.
(d)
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 in this
Article.
The capital investment to be used as basis of the tax of a newly started business as
herein provided shall be determined in the following manner:
(1)
In the locality where the principal office of the business is located, the paid-upcapital stated in the articles of incorporation, in case of corporations, or in any similar
document in case of other types of business organizations or enterprises shall be
considered as the capital investment.
(2)
Where there is a branch or sales office which commences business operations
during the same year as the principal office but which is located in another province
or in a city outside the province, the paid-up capital referred to above shall be
reduced by the amount of the capital investment made for the said branch or sales
office which shall be taxable instead by the province or city where it is located.
(3)
Where the newly started business is a branch or sales office commencing
business operations at a year later than that of the principal office, capital investment
shall mean the total funds invested in the branch or sales office.
Art. 227.
Tax on Sand, Gravel, and Other Quarry Resources. (a) 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, such as but not limited to marl, marble, granite, volcanic cinders, basalt,
tuff and rock phosphate, extracted from public lands or from the beds of seas, lakes,
rivers, streams, creeks, and other public waters within its territorial jurisdiction.
(b)
The permit to extract sand, gravel, and other quarry resources shall be issued
exclusively by the governor, pursuant to the ordinance of the sangguniang
panlalawigan.
(c)
The proceeds of the tax on sand, gravel, and other quarry resources shall be
distributed as follows:
(1)
Province Thirty percent (30%)
(2)
Component city or municipality where the sand, gravel and other quarry
resources are extracted Thirty percent (30%)

(3)
Barangay where the sand, gravel, and other quarry resources are extracted
Forty percent (40%)
Art. 228.
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 at 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 practice 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 the Philippines without being
subjected to any other national or local tax, license, or fee for the practice of such
profession.
(c)
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.
(d)
The professional tax shall be payable annually, on or before the thirty-first
(31st) day of January. Any person first beginning to practice a profession after the
month 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.
(e)
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.
(f)
The professionals subject to tax herein imposed are only those who have
passed the bar examinations, or any board or other examinations conducted by the
Professional Regulation Commission (PRC). For example, a lawyer who is also a
Certified Public Accountant (CPA) must pay the professional tax imposed on lawyers
and that fixed for CPAs, if he is to practice both professions.
For the purpose of collecting the tax, the provincial treasurer or his duly authorized
representative shall require from such professionals their current annual registration
cards issued by competent authority before accepting payment of their professional
tax for the current year. The PRC shall likewise require the professionals presentation
of proof of payment before registration of proof of payment before registration of
professionals or renewal of their licenses.
Art. 229.
Amusement Tax. (a) The province may levy an amusement tax to be
collected from the proprietors, lessees, or operators of theaters, 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.
(b)
In the case of theaters or 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.
(c)
The holding of operas, concerts, dramas, recitals, paintings and art
exhibitions, flower shows, musical programs, literary and oratorical presentations
except pop, rock or similar concerts shall be exempted from the payment of the
amusement tax, subject to the guidelines issued by DOF.
(d)
The sangguniang panlalawigan may prescribe the time, manner, terms and
conditions, including the issuance by proprietor, lessee, or operator of the theater or

amusement place of admission tickets 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 as it may deem appropriate.
(e)
The proceeds from the amusement tax shall be shared equally by the province
and the municipality where such amusement places are located.
Art. 230.
Annual Fixed Tax For Every Delivery Truck or Van of Manufacturers or
Producers, Wholesales of, Dealers or Retailers in, Certain Products. (a) The province
may levy an annual fixed tax for every truck, van, or any motor 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, or consumers, whether directly or indirectly, within the province in an
amount not exceeding Five Hundred Pesos (P500.00).
(b)
The manufacturers, producers, wholesalers, dealers, and retailers referred to
in the immediately preceding paragraph (a) hereof shall be exempt from the tax on
peddlers prescribed in Article 233 (g) of this Rule.
Part Three. Municipalities
Art. 231.
Scope of Taxing and Other Revenue-Raising Powers of Municipalities.
Unless provided in this Rule, municipalities may levy taxes, fees, and charges not
otherwise levied by the province.
Art. 232.
Tax on Business. The municipality may impose taxes on the following
businesses:
(a)
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 or nature, in accordance with the
following schedule:
Gross Sales/Receipts
Amount of
For the Preceding Calendar Year Tax Per Annum
Less than P10,000.00
P165.00
P10,000.00 or more but less than 15,000.00 220.00
15,000.00 or more but less than 20,000.00 302.00
20,000.00 or more but less than 30,000.00
30,000.00 or more but less than 40,000.00
40,000.00 or more but less than 50,000.00
50,000.00 or more but less than 75,000.00
75,000.00 or more but less than 100,000.00
100,000.00 or more but less than 150,000.00
150,000.00 or more but less than 200,000.00
200,000.00 or more but less than 300,000.00
300,000.00 or more but less than 500,000.00

440.00
660.00
825.00
1,320.00
1,650.00
2,200.00
2,750.00
3,850.00
5,500.00

500,000.00 or more but less than 750,000.00 8,000.00

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
2,000,000.00 or more but less than 3,000,000.00
16,500.00
3,000,000.00 or more but less than 4,000,000.00
19,800.00
4,000,000.00 or more but less than 5,000,000.00
23,100.00
5,000,000.00 or more but less than 6,500,000.00
24,375.00
6,500,000.00 M or more at a rate not exceeding thirty seven and a half percent (37
1/2%) of one percent (1%)
The preceding rates shall apply only to amount of domestic sales of manufacturers,
assemblers, repackers, processors, brewers, distillers, rectifiers and compounders of

liquors, distilled spirits, and wines or manufacturers of any article of commerce

whatever kind or nature other than those enumerated in paragraph (c) of this Article.
(b)
On wholesalers, distributors, or dealers in any article of commerce of whatever
kind or nature in accordance with the following schedules:
Gross Sales/Receipts
Amount of
For the Preceding Calendar Year Tax Per Annum
Less than P1,000.00
P18.00
P1,000.00 or more but less than 2,000.00
33.00
2,000.00 or more but less than 3,000.00
50.00
3,000.00 or more but less than 4,000.00
72.00
4,000.00 or more but less than 5,000.00
100.00
5,000.00 or more but less than 6,000.00
121.00
6,000.00 or more but less than 7,000.00
143.00
7,000.00 or more but less than 8,000.00
165.00
8,000.00 or more but less than 10,000.00
187.00
10,000.00 or more but less than 15,000.00
15,000.00 or more but less than 20,000.00
20,000.00 or more but less than 30,000.00
30,000.00 or more but less than 40,000.00
40,000.00 or more but less than 50,000.00
50,000.00 or more but less than 75,000.00
75,000.00 or more but less than 100,000.00
100,000.00 or more but less than 150,000.00
150,000.00 or more but less than 200,000.00

220.00
275.00
330.00
440.00
660.00
990.00
1,320.00
1,870.00
2,420.00

200,000.00 or more but less than 300,000.00 3,300.00

300,000.00 or more but less than 500,000.00 4,400.00
500,000.00 or more but less than 750,000.00 6,600.00
750,000.00 or more but less than 1,000,000.00
8,800.00
1,000,000.00 or more but less than 2,000,000.00
10,000.00
P2,000,000.00 or more at a rate not exceeding fifty percent (50%) of one percent
(1%)
The businesses enumerated in paragraph (a) above shall no longer be subject to the
tax on wholesalers, distributors, or dealers provided in this Article.
(c)
On exporters, and on manufacturers, millers, producers, wholesalers,
distributors, dealers or retailers of essential commodities enumerated hereunder at a
rate not exceeding one-half (1/2) of the rates prescribed in paragraphs (a), (b) and (d)
of this Article:
(1)
Rice and corn;
(2)
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;
(3)
Cooking oil and cooking gas;
(4)
Laundry soap, detergents, and medicine;
(5)
Agricultural implements, equipment and post-harvest facilities, fertilizers,
pesticides, insecticides, herbicides, and other farm inputs;
(6)
Poultry feeds and other animals feeds;
(7)
School supplies; and
(8)
Cement.
For purposes of this Article, the term exporters shall refer to those who are
principally engaged in the business of exporting goods and merchandise, as well as
manufacturers and producers whose goods or products are both sold domestically
and abroad. The amount of export sales shall be excluded from the total sales and

shall be subject to the rates not exceeding one half (1/2) of the rates prescribed under
paragraphs (a), (b) and (d) of this Article.
(d)
On retailers,
Gross Sales/Receipts
Rate of Tax
For the Preceding Year
Per Annum
P400,000.00 or less
2%
more than P400,000.00 1%
The rate of two percent (2%) per annum shall be imposed on sales not exceeding Four
Hundred Thousand Pesos (P400,000.00), while the rate of one percent (1%) per
annum shall be imposed on sales in excess of the first Four Hundred Thousand Pesos
(P400,000.00).
Barangays, however, shall have the exclusive power to levy taxes, as provided under
Article 241 (a) of this Rule, on 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.
(e)
On contractors and other independent contractors, in accordance with the
following schedule:
Gross Sales/Receipts
Amount of
For the Preceding Calendar Year Tax Per Annum
Less than P5,000.00
P 27.50
P5,000.00 or more but less than 10,000.00
61.60
10,000.00 or more but less than 15,000.00
104.50
15,000.00 or more but less than 20,000.00
165.00
20,000.00 or more but less than 30,000.00
275.00
30,000.00 or more but less than 40,000.00
385.00
40,000.00 or more but less than 50,000.00
550.00
50,000.00 or more but less than 75,000.00
75,000.00 or more but less than 100,000.00
100,000.00 or more but less than 150,000.00
150,000.00 or more but less than 200,000.00
200,000.00 or more but less than 250,000.00
250,000.00 or more but less than 300,000.00
300,000.00 or more but less than 400,000.00
400,000.00 or more but less than 500,000.00
500,000.00 or more but less than 750,000.00

880.00
1,320.00
1,980.00
2,640.00
3,630.00
4,620.00
6,160.00
8,250.00
9,250.00

750,000.00 or more but less than 1,000,000.00

10,250.00
1,000,000.00 or more but less than 2,000,000.00
11,500.00
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 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 exchange or
sale of property, insurance premium.
All other income and receipts of banks and financial institutions not otherwise
enumerated above shall be excluded from the taxing authority of the LGU concerned.
(g)
On peddlers engaged in the sale of any merchandise or article of commerce, at
a rate not exceeding Fifty Pesos (P50.00) per peddler annually.
Delivery trucks, vans, or motor vehicles used by manufacturers, producers,
wholesalers, dealers or retailers enumerated in Article 231 of this Rule shall be
exempt from the peddler's tax imposed in this Rule.
(h)
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 exercise tax, VAT, or percentage tax under the NIRC, as amended, the
rate of tax shall not exceed two percent (2%) of gross sales or receipts of the
preceding calendar year and provided further, that in line with existing national
policy, any business engaged in the production, manufacture, refining, distribution or
sale of oil, gasoline, and other petroleum products shall not be subject to any local tax
imposed in this Article.
The sanggunian concerned may prescribe a schedule of graduated tax rates but in no
case to exceed the rates prescribed in this Article.
Art. 233.
Fees and Charges. The municipality may impose and collect such
reasonable fees and charges on businesses and occupations and, except as reserved to
the province in Article 229 of this Rule, on the practice of any profession or calling
before any person may engage in such business or occupation, or practice such
profession or calling provided that such fees or charges shall only be commensurate
to the cost of issuing the license or permit and the expenses incurred in the conduct
of the necessary inspection or surveillance.
No such fee or charge shall be based on capital investment or gross sales or receipts of
the person or business liable therefor.
Art. 234.
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 enact an appropriate ordinance prescribing the
necessary regulations for the use of weights and measures which shall be in
accordance with such guidelines as may be prescribed by the Department of Science
and Technology. The ordinance enacted for the purpose shall also prescribe the
penalties for violations, fraudulent practices, and unlawful possession or use of
instruments of weights and measures including the criminal penalty therefor in
accordance with Article 280 of this Rule provided, however, that the sangguniang
bayan concerned may authorize the municipal treasurer to settle an offense not
involving the commission of fraud before a case therefor is filed in court, upon
payment of a compromise penalty of not less than Two Hundred Pesos (P200.00).
(c)
The ordinance of the sangguniang bayan may also embody such sanctions as
may be deemed appropriate relative to the use of any weight or measure not properly
sealed or licensed in accordance with paragraph (b) of this Article, such as the
confiscation of said illegal weight or measure, or the revocation of the permit or
license of the business, and/or the filing of appropriate charges against the owner or
operator of the business.
Art. 235.
Fishery Rentals, Fees, and Charges. (a) Municipalities shall have the
exclusive authority to grant fishery privileges in the municipal waters and impose
rentals, fees, or charges therefor in accordance with the provisions of this Article.
(b)
The sangguniang bayan may:
(1)
Grant fishery privileges to erect fish corrals, oyster, mussel, or other aquatic
beds or bangus fry areas, within a definite zone of the municipal waters, as
determined by the sangguniang bayan. The sangguniang bayan may require the
conduct of a public bidding provided that duly registered organizations and
cooperatives of marginal fishermen shall have the preferential right to such fishery
privileges without being required to undergo the bidding and provided further that in
the absence of such organizations and cooperatives or failure to exercise their
preferential right, other parties may participate in the said public bidding in
conformity with this provision.
(2)
Grant the privilege to gather, take or catch bangus fry, prawn fry, or kawagkawag 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 licenses 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 sangguniang bayan concerned shall, by appropriate
ordinance, penalize the use of explosives, noxious or poisonous substances,
electricity, muro-ami, and other deleterious methods of fishing and prescribe a
criminal penalty therefor in accordance with the provisions of this Rule and provided
further that the sangguniang bayan concerned shall have the authority to prosecute
any violation of the provisions of applicable fishery laws.
Art. 236.
Rates of Tax in Municipalities Within the Metropolitan Manila Area.
(a) The municipalities within MMA may levy the taxes on businesses enumerated in
Article 233 of this Rule at rates which shall not exceed by fifty percent (50%) the
maximum rates prescribed for said businesses.
(b)
The said municipalities within MMA, pursuant to Article 275 of this Rule, may
levy and collect the taxes which may be imposed by the province under Article 225,
226, 227, 228, 229, 230 and 231 of this Rule at rates not exceeding those prescribed
therein.
Part Four. Cities
Art. 237.
Scope of Taxing and Other Revenue-Raising Powers of Cities. The city
may:
(a)
Levy and collect any of the taxes, fees, charges and other impositions that the
province and the municipality may impose. 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; and
(b)
Levy and collect a percentage tax on any business not otherwise specified
under paragraphs (a) to (g), Article 233 of this Rule, at rates not exceeding three
percent (3%) of the gross sales or receipts of the preceding calendar year.
Art. 238.
Uniform Tax Rates. The rates of the following taxes shall be uniform
for the city and the province:
(a)
Professional tax under Article 229 of this Rule which shall not exceed Three
Hundred Pesos (P300.00); and
(b)
Amusement tax on paid admission under Article 230 of this Rule, the rate of
which shall not be more than thirty percent (30%) of the gross receipts from
admission fees.
Art. 239.
Sharing of Tax on Sand, Gravel, and Other Quarry Resources. The
proceeds of the tax on sand, gravel and other quarry resources in highly-urbanized
cities shall be distributed as follows:
Highly urbanized city
Sixty percent (60%)
Barangay where the sand, gravel, and other quarry resources are extracted
Forty percent (40%)
Part Five. Barangays
Art. 240.
Scope of Taxing and Other Revenue-Raising Powers of Barangays. The
barangays may levy the following taxes, fees, and charges, 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 a barangay within a city, and Thirty Thousand Pesos (P30,000.00)
or less, in the case of a barangay within a municipality, at rates not exceeding one
percent (1%) on such gross sales or receipts.
(b)
Service fees or charges for services rendered in connection with the regulation
or the use of barangay-owned properties or service facilities such as palay, copra, or
tobacco dryers.

(c)
Fee for the issuance of a barangay clearance for any business or activity located
or conducted within the territorial jurisdiction of the barangay before the city or
municipality may issue a license or permit to said business or activity.
The application for barangay clearance shall be acted upon within seven (7) working
days from the filing thereof. In the event that a clearance is not issued or the
application is denied within the said period, the city or municipality may issue the
license or permit to the applicant.
The issuance of a barangay clearance shall not be required during CY 1992 in the case
of existing businesses or activities applying only for renewal of their respective
permits or licenses with the city or municipality concerned.
(d)
Other fees and charges on:
(1)
Commercial breeding of fighting cocks.
For purposes of imposing barangay fees and charges on the commercial breeding of
fighting cocks, commercial breeding shall mean an annual sale of more than five (5)
fighting cocks of a duly registered breeder.
(2)
Cockfights and cockpits
(3)
Places of recreation which charge admission fees.
Places of recreation shall include places of amusement where one seeks admission to
entertain himself by seeing or viewing the show or performance or those where one
amuses himself by direct participation.
(4) Billboards, signboards, neon signs, and outdoor advertisements at rates not
less than the following:
(i)
Billboards or signboards for advertisement of business, per square meter or
fraction thereof:
Single-Faced Ten Pesos (P10.00)
Double-Faced Twenty Pesos (P20.00)
(ii)
Billboards or signs for professionals, per square meter or fraction thereof:
Eight Pesos (P8.00)
(iii) Billboards, signs, or advertisements for business and professions painted on
any building or structures or otherwise separated or detached therefrom, per square
meter thereof: Nine Pesos P9.00)
(iv) Advertisement for business or professions by means of slides in movies
payable by the advertisers: One Hundred Pesos (P100.00)
(v)
Advertisements by means of vehicle, balloons, kites, etc. per day or fraction
thereof: Forty Pesos (P40.00); per week or fraction thereof: Sixty Pesos (P60.00);
and per month or fraction thereof: eighty Pesos (P80.00).
For the use of electric or neon lights in billboards under items (i) to (iv) above, the
amount of Ten Pesos (P10,00) per square meter or fraction thereof shall be imposed
in addition to the above prescribed rates.
(vi) Signs, signboards, billboards, advertisements, including stickouts, streamers,
lighted signs, and other electronic media, posters, privilege panels, stone signs,
placards, price strips, buntings, and the like, belonging to manufacturers or
producers or professionals, but displayed at the place where a business or profession
is conducted, or displayed on delivery or other service and public utility vehicles, shall
be exempt from such fees or charges provided in paragraphs (i) and (ii) above and
other impositions that may be imposed by the barangay.
(vii) Privilege panels shall be subject to one half (1/2) of the rates herein prescribed.
(viii) For purposes of this Article, the new rates to be adopted by the barangay shall
apply only to billboards, privilege panels, signs, and outdoor advertisements which
shall be constructed or installed after the effectivity of the Code.
Part Six. Special Provisions
Art. 241.
Retirement of Business. (a) Any person natural or juridical, subject to
the tax on businesses under Article 233 of this Rule shall, upon termination of the

business, submit a sworn statement of the gross sales or receipts for the calendar
year.
For purposes hereof, termination shall mean that business operations are stopped
completely. Any change in ownership, management and/or name of the business
shall not constitute termination as contemplated in this Article. Unless stated
otherwise, assumption of the business by any new owner or manager or registration
of the same business under a new name will only be considered by the LGU
concerned for record purposes in the course of the renewal of the permit or license to
operate the business.
The local treasurer concerned shall see to it that the payment of taxes of a business is
not avoided by simulating the termination or retirement thereof. For this purpose,
the following procedural guidelines shall be strictly observed:
(1)
The local treasurer shall assign every application for the termination or
retirement of business to an inspector in his office who shall go to the address of the
business on record to verify if it is really no longer operating. If the inspector finds
that the business is simply placed under a new name, manager and/or new owner,
the local treasurer shall recommend to the mayor the disapproval of the application
for the termination or retirement of said business. Accordingly, the business
continues to become liable for the payment of all taxes, fees, and charges imposed
thereon under existing local tax ordinances; and
(2)
In the case of a new owner to whom the business was transferred by sale or
other form of conveyance, said new owner shall be liable to pay the tax or fee for the
transfer of the business to him if there is an existing ordinance prescribing such
transfer tax.
(b)
If it is found that the retirement or termination of the business is legitimate,
and the tax due therefrom be less than the tax due for the current year based on the
gross sales or receipts, the difference in the amount of the tax shall be paid before the
business is considered officially retired or terminated.
(c)
The permit issued to a business retiring or terminating its operations shall be
surrendered to the local treasurer who shall forthwith cancel the same and record
such cancellation in his books.
Art. 242.
Related or Combined Businesses. (a) The conduct or operation of two
or more related businesses provided in Article 233 of this Rule by any one person,
natural or juridical, shall require the issuance of a separate permit or license to each
business.
(b)
If a person conducts or operates two (2) or more related businesses which are
subject to the same rate of imposition, the tax shall be computed on the basis of the
combined total gross sales or receipts of the said two (2) or more related businesses.
(c)
If, however, the businesses operated by one person are governed by separate
tax schedules or the rates of the taxes are different, the taxable gross sales or receipts
of each business shall be reported independently and the tax thereon shall be
computed on the basis of the appropriate schedule.
Art. 243.
Situs of the Tax. (a) Definition of Terms
(1)
Principal Office. the head or main office of the business appearing in the
pertinent documents submitted to the Securities and Exchange Commission, or the
Department of Trade and Industry, or other appropriate agencies, as the case may be.
The city or municipality specifically mentioned in the articles of incorporation of
official registration papers as being the official address of said principal office shall be
considered as the situs thereof.
In case there is a transfer or relocation of the principal office to another city or
municipality, it shall be the duty of the owner, operator or manager of the business to

give due notice of such transfer or relocation to the local chief executives of the cities
or municipalities concerned within fifteen (15) days after such transfer or relocation
is effected.
(2)
Branch or Sales Office a fixed place in a locality which conducts operations of
the business as an extension of the principal office. Offices used only as display areas
of the products where no stocks or items are stored for sale, although orders for the
products may be received thereat, are not branch or sales offices as herein
contemplated. A warehouse which accepts orders and/or issues sales invoices
independent of a branch with sales office shall be considered as a sales office.
(3)
Warehouse a building utilized for the storage of products for sale and from
which goods or merchandise are withdrawn for delivery to customers or dealers, or
by persons acting in behalf of the business. A warehouse that does not accept orders
and/or issue sales invoices as aforementioned shall not be considered a branch or
sales office.
(4)
Plantation a tract of agricultural land planted to trees or seedlings whether
fruit bearing or not, uniformly spaced or seeded by broadcast methods or normally
arranged to allow highest production. For purposes of this Article, inland fishing
ground shall be considered as plantation.
(5)
Experimental Farms agricultural land utilized by a business or corporation to
conduct studies, tests, researches or experiments involving agricultural, agribusiness,
marine, or aquatic, livestock, poultry, dairy and other similar products for the
purpose of improving the quality and quantity of goods or products.
On-site sales of commercial quantity made in experimental farms shall be similarly
imposed the corresponding tax under Article 233 and allocated in paragraph (b) of
this Article.
(b)
Sales Allocation
(1)
All sales made in a locality where there is a branch or sales office or warehouse
shall be recorded in said branch or sales office or warehouse and the tax shall be
payable to the city or municipality where the same is located.
(2)
In cases where there is no such branch, sales office, or warehouse in the
locality where the sale is made, the sale shall be recorded in the principal office along
with the sales made by said principal office and the tax shall accrue to the city or
municipality where said principal office is located.
(3)
In cases where there is a factory, project office, plant or plantation in pursuit of
business, 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 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. LGUs
where only experimental farms are located shall not entitled to the sales allocation
provided in this subparagraph.
(4)
In case of a plantation located in a locality other than that where the factory is
located, the seventy percent (70%) sales allocation shall be divided as follows:
(i)
Sixty percent (60%) to the city or municipality where the factory is located;
and
(ii)
Forty percent (40%) to the city or municipality where the plantation is located.
(5)
In cases where there are two (2) or more factories, project offices, plants or
plantations located in different localities, the seventy percent (70%) sales allocation
shall be prorated among the localities where such factories, project offices, plants,
and plantations are located in proportion to their respective volumes of production
during the period for which the tax is due. In the case of project offices of service and
other independent contractors, the term production shall refer to the cost of projects
actually undertaken during the tax period.

(6)
The sales allocation in paragraph (b) hereof shall be applied irrespective of
whether or not sales are made in the locality where the factory, project office, plant or
plantation is located. In case of sales made by the factory, project office, plant or
plantation, the sale shall be covered by subparagraphs (1) or (2) above.
(7)
In case of manufacturers or producers which engage the services of an
independent contractor to produce or manufacture some of their products, these
rules on situs of taxation shall apply except that the factory or plant and warehouse of
the contractor utilized for the production and storage of the manufacturers' products
shall be considered as the factory or plant and warehouse of the manufacturer.
(c)
Port of Loading The city or municipality where the port of loading is located
shall not levy and collect the tax imposable in Article 233 of this Rule unless the
exporter maintains in said city or municipality its principal office, a branch, sales
office or warehouse, factory, plant, or plantation in which case, the rule on the matter
shall apply accordingly.
(d)
Sales made by route trucks, vans, or vehicles
(1)
For route sales made in a locality where a manufacturer, producer, wholesaler,
retailer or dealer has a branch or sales office or warehouse, the sale are recorded in
the branch, sales office or warehouse and the tax due thereon is paid to the LGU
where such branch, sales office or warehouse is located.
(2)
For route sales made in a locality where a manufacturer, producer, wholesaler,
retailer or dealer has no branch, sales office or warehouse the sales are recorded in
the branch, sales office or warehouse from where the route trucks withdraw their
products for sale, and the tax due on such sales is paid to the LGU where such branch,
sales office or warehouse is located.
(3)
Based on subparagraphs (1) and (2) above, LGUs where route trucks deliver
merchandise cannot impose any tax on said trucks except the annual fixed tax
authorized to be imposed by the province in Article 231 of this Rule on every delivery
truck or van or any motor 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, and by the city, pursuant to Article 223 of this
Rule.
(4)
In addition to this annual fixed tax, cities may also collect from same
manufacturers, producers, wholesalers, retailers, and dealers using route trucks a
mayor's permit fee which shall be imposed in a local tax ordinance pursuant to Article
234 in relation to Article 223 of this Rule.
Part Seven. Common Revenue-Raising Powers
Art. 244.
Common Revenue-Raising Powers. Provinces, cities, municipalities,
and barangays:
(a)
May impose and collect fees and service or user charges for any service
rendered by LGUs in an amount reasonably commensurate to such service provided
that no service charge shall be based on capital investments or gross sales or receipts
of the persons or business liable therefor.
(b)
Shall exercise the power to collect charges for services rendered by LGUs in
connection with the operation of public utilities owned, operated, and maintained by
them at rates to be fixed by the sanggunian concerned.
LGUs may prescribe the terms and conditions, through an appropriate ordinance
enacted by their sanggunians, for the use of any public road, pier or wharf, waterway,
bridge, or ferry or telecommunication system, funded and constructed by them, and
fix reasonable toll fees and service charges for the use thereof provided that the
following persons shall be exempted from the payment of said toll fees and charges:

(1)
Officers and enlisted men of the Armed Forces of the Philippines and members
of the Philippine National Police on mission;
(2)
Post Office personnel delivering mail;
(3)
Persons who are physically handicapped; and
(4)
Disabled citizens who are sixty-five (65) years or older.
(c)
The collection of toll fees and charges may be discontinued by the sanggunian
concerned when public safety and welfare so requires.
Art. 245.
Community Tax. Cities or municipalities may levy an annual
community tax in lieu of the residence tax formerly levied and collected in Section 38
of PD 231, as amended. Accordingly, all cities and municipalities shall enact for the
purpose, a tax ordinance to take effect as of January 1, 1992.
For purposes of enactment of a local tax ordinance levying a community tax, the
conduct of a public hearing provided in Article 259 of this Rule shall no longer be
required.
Art. 246.
Levy or Imposition. The levy or imposition of community tax by a city
or municipality shall be governed by the following rules and guidelines:
(a)
Individuals liable to the payment of community tax
(1)
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 years;
(2)
An individual who is engaged in business or occupation;
(3)
An individual who owns real property with an aggregate assessed value of One
Thousand Pesos (P1,000.00) or more;
(4)
An individual who is required by law to file an income tax return.
(b)
Rate of community tax payable by individuals
(1)
The rate of community tax that may be levied and collected from said
individuals shall be Five Pesos (P5.00) plus an additional tax of One Peso (P1.00) for
every One Thousand Pesos (P1,000.00) of income regardless of whether from
business, exercise of profession, or from property but which in no case shall exceed
Five Thousand Pesos (P5,000.00).
(2)
In case of husband and wife, each of them shall be liable to pay the basic tax of
Five Pesos (P5.00), but the additional tax imposable on the husband and wife shall be
One Peso (P1.00) for every One Thousand Pesos (P1,000.00) of income from the total
property owned by them and/or the total gross receipts or earnings derived by them.
(c)
Juridical persons liable to the payment of 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 community tax of Five Hundred
Pesos (P500.00) and an additional tax, which, in 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 the juridical entity during the preceding year, based on the
assessed value used for the payment of the real property tax under existing laws Two
pesos (P2.00); and
(2)
For every Five Thousand Pesos (P5,000.00) of gross receipts or earnings
derived from the business in the Philippines during the preceding year Two pesos
(P2.00).
The dividends received by a corporation from another corporation shall, for the
purpose of the additional tax, be considered as part of the gross receipts or earnings
of said corporation.
(d)
Exemptions The following are exempt from the payment of community tax:
(1)
Diplomatic and consular representatives; and
(2)
Transient visitors when their stay in the Philippines does not exceed three (3)
months.

(e)
Place of Payment
(1)
Community tax shall be paid in the city or municipality where the residence of
the individual is located, or in the city or municipality where the principal office of
the juridical entity is located.
(2)
It shall be unlawful for any city or municipal treasurer to collect community
tax outside the territorial jurisdiction of the city or the municipality.
(3)
In case of branch, sales office or warehouse where sales are made and
recorded, corresponding community tax shall be paid to the LGU where such branch,
sales office or warehouse is located.
(4)
Any person, natural or juridical, who pays community tax to a city or
municipality other than the city or municipality where his residence, or principal
office in the case of juridical persons, is located shall remain liable to pay such tax to
the city or municipality concerned.
(f)
Time for Payment
(1)
Community tax shall accrue on the first (1st) day of January of each year and
shall be paid not later than the last day of February of each year.
(2)
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 for the payment of
community tax on the day he reaches such age or upon the day the exemption on or
before the last day of March, he shall have twenty (20) days within which to pay the
community tax without becoming delinquent.
(3)
Persons who come to reside in the Philippines 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 community tax for that
year.
(4)
Corporations established and organized on or before the last day of June shall
be liable for the payment of community tax for that year. 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
community tax for that year.
(g)
Penalties for the payment If the tax is not paid within the prescribed period,
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.
Art. 247.
Community Tax Certificate. A community tax certificate shall be issued
to every person or corporation upon payment of community tax. A community tax
certificate may also be issued to any person or corporation not subject to community
tax upon payment of One Peso (P1.00).
Art. 248.
Presentation of Community Tax Certificate. (a) When an individual
subject to 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 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 for the
registration of a voter.
(b)
When, through its authorized officers, any corporation subject to community
tax receives any license, certificate, or permit from any public authority, pays any 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.
Art. 249.
Printing of Community Tax Certificates and Distribution of Proceeds.
The Bureau of Internal Revenue (BIR) 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. To facilitate
distribution, the BIR may send on consignment to the provincial treasurers blank
forms of the community tax certificates and the municipal treasurers of the province
shall secure through the provincial treasurer, their respective requirements. The city
or municipal treasurer concerned shall remit to the National Treasurer, for the
account of the BIR, the share of the National Government in the proceeds of the tax,
representing the cost of printing and distribution, within ten (10) days after the end
of each quarter. In cases where the certificates were secured or requisitioned from the
provincial treasurer, the municipal treasurers shall remit payments to the provincial
treasurer who shall, in turn, effect the remittance to the National Treasurer as
required.
Art. 250.
Collection of Community Tax by the Barangay Treasurer. The tax
ordinance levying the community tax shall authorize the city or municipal treasurer
to deputize the barangay treasurers to collect the community tax in their respective
jurisdictions. Such deputation shall be limited to the community tax payable by
individual taxpayers and shall be extended only to barangay treasurers who are
properly bonded in accordance with applicable laws.
Art. 251.
Allocation of Proceeds of Community Tax. The proceeds of 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. The proceeds of
community tax collected through the barangay treasurers shall be apportioned as
follows:
(a)
Fifty percent (50%) shall accrue to the general fund of the city or municipality
concerned; and
(b)
Fifty percent (50%) shall accrue to the barangay where the tax is collected.
Art. 252.
Authority to Use Blank Forms of Residence Certificates. The city and
municipal treasurer shall be authorized to use for the year 1992 blank forms of
residence certificates still in their stock, pending the distribution by the BIR of the
new form for the community tax certificate provided that:
(a)
The word residence shall be canceled and in its place, the word community
shall be superimposed;
(b)
The maximum amount of additional tax payable by individual and corporate
taxpayers shall be changed from P3,000.00 to P5,000.00 and from P6,000.00 to
P10,000.00, respectively, in accordance with the schedule provided in Article 247 of
this Rule.
(c)
Corresponding reports as to quantity and serial numbers of old blank forms
used during Calendar Year 1992 shall be submitted by the city and municipal
treasurers to the BIR pursuant to applicable rules and regulations.
Part Nine. Collection of Taxes
Art. 253.
Tax Period and Manner of Payment. Unless otherwise provided in this
Rule, 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 as may be
provided in the tax ordinance.

Art. 254.
Accrual of Tax. Unless otherwise provided herein, local taxes, fees, and
charges shall accrue on the first (1st) day of January of each year as regards tax
subjects then liable therefor, but an entirely new tax, fee or charge, or charges in the
rates of existing taxes, fees, or charges, shall accrue on the first day of the quarter
next following the effectivity of the ordinance imposing such new levies or rates.
Art. 255.
Time of Payment. Unless otherwise specifically provided in this Rule,
all local taxes, fees, and charges due and accruing to the LGUs 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
for payment of such taxes, fees, or charges without surcharges or penalties, but only
for a period not exceeding six (6) months.
Art. 256.
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.
Art. 257.
Interests on Other Unpaid Revenues. Where the amount of any other
revenue due an LGU, 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.
Art. 258.
Collection of Local Revenues. All local taxes, fees, and charges shall be
collected by the provincial, city, municipal, or barangay treasurer, or their duly
authorized deputies.
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 premium thereon
in addition to the premiums of bond that may be required under these Rules.
Art. 259.
Examination of Books of Accounts and Pertinent Records of
Businessmen. (a) For purposes of implementing this Article, only the treasurer of the
LGU imposing the tax, fee, or charge, may examine the books of accounts and
pertinent records of businessmen in order to ascertain, assess, and collect the correct
amount of taxes, fees, and charges.
(b)
The provincial, city, 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 any person, partnership, corporation, or association
subject to local taxes, fees, and charges.
(c)
The examination shall be made during regular business hours not oftener than
once a year for every tax period, which shall be the year immediately preceding the
examination, and shall be certified by the examining official. Such certification shall
be made of record in the books of accounts of the taxpayer examined.
(d)
In case the examination 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 taxpayer 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.
(e)
For this purpose, the records of the revenue district office of the BIR shall be
made available to the local treasurer, his deputy or duly authorized representative.

(f)
The Secretary of Finance shall prescribe the necessary forms to be used and
such guidelines which may be deemed necessary for the proper and effective
implementation of this Article.
Part Ten. Civil Remedies for Collection of Revenues
Art. 260.
Application. The provisions of Part Ten of this Rule and the remedies
herein provided may be availed of for the collection of any delinquent local tax, fee,
charge, or other revenues.
Art. 261.
Local Government's Lien. Local taxes, fees, charges, and other revenues
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 to 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 interests.
Art. 262.
Civil Remedies. The civil remedies for the collection of local taxes, fees,
or charges, and related surcharges and interests resulting from delinquencies shall
be:
(a)
By administrative action through distraint of goods, chattels, or effects, and
other personal property 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 two (2) remedies or both may be pursued concurrently or
simultaneously at the discretion of the LGU concerned.
Art. 263.
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 applicable laws. Distrained personal property shall be sold at public
auction in the manner provided in this Rule.
(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 left 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 three (3) public and conspicuous places in the territory of the LGU
where the distraint is made, 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 LGU in which the property is distrained.

(d)
Release of distrained property upon payment prior to sale If at any time prior
to the consummation of 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 time and place fixed in the notice, the officer conducting
the sale shall 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 LGU
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
canceled.
The committee on appraisal shall be composed of the city or municipal treasurer as
chairman, with a representative of COA 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, interests, 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, is collected.
Art. 264.
Levy on Real Property. After the expiration of the time required to pay
the delinquent tax, fee, or charge, real property may be levied on, before,
simultaneously, after the distraint of personal property belonging to the delinquent
taxpayer. 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. Such 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 local assessor and 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.
Art. 265.
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 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.

Art. 266.
Advertisement and Sale. Within thirty (30) days after levy, the local
treasurer shall 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 city or municipal hall, and in public
and conspicuous places 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 capitol, city or
municipal hall, or on the property to be sold, or at 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 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 a duly
approved ordinance, advance an amount sufficient to defray the costs of collection by
means of the remedies provided, in this Rule, 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.
Art. 267.
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, interest, 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 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 .
Art. 268.
Final Deed of Conveyance 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, and penalties. The deed shall
succinctly recite all the proceedings upon which the validity of the sale depends.
Art. 269.
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 LGU 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 LGU
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 on the LGU concerned.
Art. 270.
Resale of Real Estate Acquired for Payment of Taxes, Fees, or Charges.
The sanggunian concerned may, by a duly approved ordinance, and upon notice of
not less than twenty (20) days, sell and dispose of the real property acquired under
the preceding Article at public auction. The proceeds of the sale shall accrue to the
general fund of the LGU concerned.
Art. 271.
Collection of Delinquent Taxes, Fees, Charges, or Other Impositions
through Judicial Action. The LGU concerned may enforce the collection of
delinquent taxes, fees, charges, or other impositions by civil action in any court of
competent jurisdiction. The civil action shall be filed by the local treasurer within the
period prescribed in Article 285 of this Rule.
Art. 272.
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.
Art. 273.
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 related
surcharges and interests:
(a)
Tools and 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 (P10,000.00);
(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 (1) fishing boat and net, not exceeding the total value of Ten Thousand
Pesos (P10,000.00), 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.
Part Eleven. Miscellaneous Provisions
Art. 274.
Power to Levy Other Taxes, Fees, or Charges. LGUs may exercise the
power to levy taxes, fees, or charges on any base or subject not otherwise specifically
enumerated in this Rule or taxed under the provisions of the NIRC, 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 prior public hearing conducted for the purpose.

Art. 275.
Procedure for Approval and Effectivity of Tax Ordinances and Revenue
Measures. The procedure for approval of local tax ordinances and revenue measures
shall be in accordance with the provisions of this Rule provided that public hearings
shall be conducted for the purpose prior to the enactment 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 furthermore 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 and 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.
All tax ordinances or revenue measures shall be numbered consecutively throughout
the calendar year and continuously from year to year, using the last two (2) digits of
the calendar year in which it is enacted, followed by denominated number. For
example, an ordinance is passed in January, 1992, and it is the first ordinance for that
year. The ordinance shall be denominated and numbered as Tax Ordinance No. 92001. The next be Tax Ordinance No. 92-002, Tax Ordinance No. 92-003, and so
forth.
Art. 276.
Publication of Tax Ordinances and Revenue Measures. (a) Within ten
(10) days after their approval, certified true copies of all provincial, city, and
municipal tax ordinances or revenue measures shall be published in full for three (3)
consecutive days in a newspaper of local circulation provided 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.
If the tax ordinance or revenue measure contains penal provisions as authorized in
Article 280 of this Rule, the gist of such tax ordinance or revenue measure shall be
published in a newspaper of general circulation within the province where the
sanggunian concerned belongs. In the absence of any newspaper of general
circulation within the province, posting of such ordinance or measure shall be made
in accessible and conspicuous public places in all municipalities and cities of the
province to which the sanggunian enacting the ordinance or revenue measure
belongs.
In case the effectivity of any tax ordinance or revenue measure falls on any date other
than the beginning of the quarter, the same shall be considered as falling at the
beginning of the next ensuing quarter and the taxes, fees, or charges due shall begin
to accrue therefrom.
(b)
The conduct of public hearings shall be governed by the following procedure:
(1)
Within ten (10) days from filing of any proposed tax ordinance or revenue
measure, the same shall first be published for three (3) consecutive days in a
newspaper of local circulation or shall be posted simultaneously in at least four (4)
conspicuous public places within the territorial jurisdiction of the LGU concerned.
(2)
In addition to the requirement for publication or posting, the sanggunian
concerned shall cause the sending of written notices of the proposed ordinance,
enclosing a copy thereof, to the interested or affected parties operating or doing
business within the territorial jurisdiction of the LGU concerned.
(3)
The notice or notices shall specify the date or dates and venue of the public
hearing or hearing. The initial public hearing shall be held not earlier than ten (10)
days from the sending out of notice or notices, or the last day of publication, or date
of posting thereof, whichever is later.

(4)
At the public hearing or hearings, all affected or interested parties shall be
accorded an opportunity to appear and present or express their views, comments and
recommendations, and such public hearing or hearings shall continue until all issues
have been presented and fully deliberated upon and/or consensus is obtained,
whether for or against the enactment of the proposed tax ordinance or revenue
measure.
(5)
The secretary of the sanggunian concerned shall prepare the minutes of such
public hearing and shall attach to the minutes the position papers, memoranda, and
other documents submitted by those who participated.
(c)
No tax ordinance or revenue measure shall be enacted or approved in the
absence of a public hearing duly conducted in the manner provided in this Article.
Art. 277.
Furnishing of Copies of Tax Ordinance and Revenue Measures. Copies
of all provincial, city, municipal, and barangay tax ordinances and revenue measures
shall be furnished the respective local treasurers concerned for public dissemination.
Art. 278.
Existing Tax Ordinances or Revenue Measures. (a) All existing tax
ordinances or revenue measures of provinces, cities, municipalities, and barangays
imposing taxes, fees, or charges shall continue to be in force and effect after the
effectivity of the Code, except those imposing levies on tax bases or tax subjects which
are no longer within the taxing and revenue-raising powers of the LGU concerned
and where the rates levied in the tax ordinance are higher than the taxes, fees, or
charges prescribed in this Rule in which case, the lower rates shall be collected.
(b)
In case of failure of the sanggunian to amend or revoke tax ordinances or
revenue measures inconsistent with, or in violation of the provisions of this Rule, the
same shall be deemed rescinded upon the effectivity of the Code and these Rules.
Art. 279.
Penalties for Violation of Tax Ordinances. The sanggunian of an LGU is
authorized to prescribe imprisonment of fines or other penalties for violation of tax
ordinances but in no case shall such imprisonment be less than one (1) month nor
more than six (6) months or such fine be less than One Thousand Pesos (P1,000.00)
nor more than Five Thousand Pesos (P5,000.00), or both such imprisonment or fine,
at the discretion of the court. The sanggunian barangay may prescribe a fine of not
less than One Hundred Pesos (P100.00) nor more than One Thousand Pesos
(P1,000.00).
Art. 280
Attempt to Enforce Void or Suspended Tax Ordinances and Revenue
Measures. Enforcement of any tax ordinance or revenue measure after due notice of
the disapproval or suspension thereof shall be a sufficient ground for administrative
disciplinary action against the local officials and employees responsible therefor. Any
attempt to enforce any tax ordinance or revenue measure deemed rescinded by
operation of law, or the effectivity of which has been suspended, or the passage of
which has been declared illegal, shall subject the local officials and employees
responsible therefor to administrative disciplinary action.
Art. 281.
Authority to Adjust Rates of Taxes. LGUs shall be authorized to adjust
the tax rates prescribed in this Rule not oftener than once every five (5) years, but in
no case shall such adjustments exceed ten percent (10%) of the rates fixed in this
Rules.
Art. 282.
Authority to Grant Tax Exemption Privileges or Incentives. (a) While
sanggunians may grant tax exemption, tax incentive, or tax relief, such grant shall not
apply to regulatory fees which are levied under the police power of LGUs. Tax
exemptions shall be conferred through the issuance of a tax exemption certificate,
which shall be non-transferable.
(b)
The sanggunians granting tax exemptions, tax incentives and tax reliefs may
be guided by the following:
(1)
On the grant of tax exemptions or tax reliefs:

(i)
Tax exemption or tax relief may be granted in cases of natural calamities, civil
disturbance, general failure of crops, or adverse economic conditions such as
substantial decrease in the prices of agricultural or agri-based products;
(ii)
The grant of exemption or relief shall be through an ordinance.
(iii) Any exemption or relief granted to a type or kind of business shall apply to all
business similarly situated; and
(iv) Any exemption or relief granted shall take effect only during the next calendar
year for a period not exceeding twelve (12) months as may be provided in the
ordinance. In the case of shared revenues, the exemption or relief shall only extend to
the LGU granting such exemption or relief.
(2)
On the grant of tax incentives:
(i)
The tax incentive shall be granted only to new investments in the locality and
the ordinance shall prescribe the terms and conditions therefor;
(ii)
The grant of the tax incentive shall be for a definite period not exceeding one
(1) calendar year;
(iii) The grant of tax incentives shall be by ordinance passed prior to the first (1st)
day of January of any year; and
(iv) Any tax incentive granted to a type or kind of business shall apply to all
businesses similarly situated.
Art. 283.
Withdrawal of Tax Exemption Privileges or Incentives. Unless
otherwise provided in this Rule, beginning January 1, 1992, all local tax exemption
privileges or incentives granted to and presently enjoyed by any person, whether
natural or juridical, including GOCCs, are considered withdrawn, except the
following:
(a)
Local water districts;
(b)
Cooperatives duly registered under RA 6938, otherwise known as the
Cooperative Code of the Philippines;
(c)
Non-stock and non-profit hospitals and educational institutions;
(d)
Business enterprises certified by the Board of Investments (BOI) as pioneer or
non-pioneer for a period of six (6) and four (4) years, respectively, from the date of
registration;
(e)
Business entity, association, or cooperatives registered under RA 6810; and
(f)
Printer and/or publisher of books or other reading materials prescribed by
DECS as school texts or references, insofar as receipts from the printing and/or
publishing thereof are concerned.
Unless otherwise repealed by law, business and economic enterprises operating
within export processing zones administered by the Export Processing Zone
Authority shall continue to enjoy the tax exemption privileges and tax incentives
granted in PD 66, as amended.
Part Twelve. Taxpayer's Remedies
Art. 284.
Period of Assessment and Collection. (a) Local taxes, fees, or charges
shall be assessed within five (5) years from the date they become 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 the 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 assessment by administrative or judicial action. No such action shall be
instituted after the expiration of said period provided that taxes, fees, or charges

assessed before the effectivity of the 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 suspended for the time during which:
(1)
The treasurer is legally prevented from making the assessment of collection;
(2)
The taxpayer requests re-investigation 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.
Art. 285.
Protest on 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
receipt of the notice of assessment, the taxpayer may file a written protest with the
local treasurer contesting the assessment; otherwise, the assessment shall 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. 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 receipt of the denial of the protest or
from the lapse of the sixty-day period prescribed in this Article within which to
appeal with the court of competent jurisdiction; otherwise, the assessment becomes
conclusive and unappealable.
Art. 286.
Claim for Refund or Tax Credit. All taxpayers entitled to a refund or tax
credit provided in this Rule shall file with the local treasurer a claim in writing duly
supported by evidence of payment (e.g., official receipts, tax clearance, and such
other proof evidencing overpayment within two (2) years from payment of the tax,
fee, or charge. No case or proceeding shall be entertained in any court without this
claim in writing, and after the expiration of two (2) years from the date of payment of
such tax, fee, or charge, or from the date the taxpayer is entitled to a refund or tax
credit.
The tax credit granted a taxpayer shall not be refundable in cash but shall only be
applied to future tax obligations of the same taxpayer for the same business. If a
taxpayer has paid in full the tax due for the entire year and he shall have no other tax
obligation payable to the LGU concerned during the year, his tax credits, if any, shall
be applied in full during the first quarter of the next calendar year on the tax due
from him for the same business of said calendar year.
Any unapplied balance of the tax credit shall be refunded in cash in the event that he
terminates operation of the business involved within the locality.
Art. 287.
Authority of the Secretary of Finance. The Secretary of Finance shall, in
consultation with the leagues of LGUs formulate and prescribe, from time to time,
procedures and guidelines as may be necessary for the proper, efficient, and effective
implementation of this Rule.
RULE XXXI
REAL PROPERTY TAXATION
Art. 288.
Scope. This Rule shall cover the administration, appraisal, assessment,
levy, and collection of real property tax.
Art. 289.
Fundamental Principles. The appraisal, assessment, levy, and
collection of real property tax shall be governed 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 LGU;
(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.
Art. 290.
Definition of Terms.
(a)
Acquisition Cost for newly-acquired machinery not yet depreciated and
appraised within the 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 utilized 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 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 of 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, which is intended to enhance its value, beauty or utility or to adapt it for
new or further purposes, amounting to more than a mere repair or replacement of
parts involving capital expenditures and labor and normally requiring a building
permit;
(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, appliances or apparatus, which may or may not be attached,
permanently or temporarily to the real property.
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 shall be classified as real property provided that:
(1)
They are actually, directly, and exclusively used to meet the needs of the
particular industry, business, or activity; and

(2)
By their very nature and purpose are designed for, or necessary to
manufacturing, mining, logging, commercial, industrial, or agricultural purposes.
Machinery which are of general purpose use including but not limited to office
equipment, typewriters, telephone equipment, breakable or easily damaged
containers (glass or cartons), microcomputers, facsimile machines, telex machines,
cash dispensers, furniture and fixtures, freezers, refrigerators, display cases or racks,
fruit juice or beverage automatic dispensing machines which are not directly and
exclusively used to meet the needs of a particular industry, business or activity shall
not be considered within the definition of machinery under this Rule.
Residential machinery shall include machines, equipment, appliances or apparatus
permanently attached to residential land and improvements or those immovable by
destination.
(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 property, on the basis of
current prices with the same or closely similar materials; and
(u)
Residential Land is land principally devoted to habitation.
Art. 291.
Administration of Real Property Tax. Provinces and cities, including
municipalities within MMA, shall be primarily responsible for the proper, efficient
and effective administration of the real property tax, subject to the rules and
regulations governing the classification, appraisal and assessment of real property
issued by DOF.
The DOF and the province shall exercise the authority to review and examine on a
continuing basis property, assessment, and real property tax records to ensure the
proper implementation of this Rule and determine compliance with applicable laws,
rules and regulations.
Art. 292.
Appraisal of Real Property. Within sixty (60) days from the effectivity
of these Rules, DOF shall promulgate rules and regulations and such procedural
guidelines as may be necessary for the proper classification, appraisal, and
assessment of real property in accordance with the provisions of this Rule.
Art. 293.
Declaration of Real Property by the Owner or Administrator.
(a)
All persons, natural or judicial, or their duly authorized representatives,
owning or administering real property, including improvements thereon, within a city
or a municipality, shall 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 or properties, 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.
(b)
Such declaration shall contain a description of the property sufficient in detail
to enable the local assessor or his deputy to identify the same for assessment
purposes.
(c)
All property owners or administrators or their duly authorized representatives
shall file the sworn declaration of real property values once every three (3) years
during the period from January 1 to June 30 of the year commencing with Calendar
Year 1992.

(d)
The DOF shall prescribe a standard form to be known as Sworn Declaration of
Property Values for the use of all local assessors' offices, as well as the procedures to
be observed in the filing and safekeeping thereof.
The sangguniang panlungsod and sangguniang bayan may enact their respective
ordinances providing for the imposition of penalties or pecuniary fines on property
owners or administrators who fail to comply with this Article.
Art. 294.
Duty of Persons Acquiring Real Property or Making Improvement
Thereon. (a) All persons, natural or juridical, or their duly authorized
representatives, who acquire at any time a parcel or parcels of land in and city or
municipality, shall file with the provincial, city, or municipal assessor of the locality
where the property is located, a sworn statement declaring the true value of subject
property within sixty (60) days after the acquisition of such property as evidenced by
a duly notarized or final deed of conveyance executed between the contracting parties
bearing proof of registration from the registrar of deeds concerned. The sixty-day
period shall commence on the date of execution of the deed of conveyance.
(b)
In the case of houses, buildings, or other improvements acquired or newly
constructed which will require building permits, property owners or their authorized
representatives shall likewise file a sworn declaration of the true value of the subject
house, building, or other improvement within sixty (60) days after:
(1)
The date of a duly notarized final deed of sale, contract, or other deed of
conveyance covering the subject property executed between the contracting parties;
(2)
The date of completion or occupancy of the newly constructed building, house,
or improvement whichever comes earlier; and
(3)
The date of completion or occupancy of any expansion, renovation, or
additional structures or improvements made upon any existing building, house, or
other real property, whichever comes earlier.
(c)
In the case of machinery, the sixty-day period for filing the required sworn
declaration of property values shall commence on the date of installation thereof as
determined by the city or municipal assessor and, for this purpose, said local assessor
may secure certification of the building official or engineer or other appropriate
official stationed in the province, city, or municipality concerned.
(d)
The sangguniang panlalawigan, sangguniang panlungsod, and sangguniang
bayan shall enact their respective local ordinances providing for the imposition of
penalties or pecuniary fines on property owners or administrators who fail to comply
with this Article.
Art. 295.
Declaration of Real Property by the Local Assessor. (a) The local
assessor shall declare only real property previously undeclared from taxation
purposes.
(b)
In the case of real property discovered whose owner or owners are unknown,
the provincial, city, or municipal assessor shall likewise declare the same in the name
of the Unknown Owner, copy furnished the provincial assessor in the case of
declarations made by a component city or municipal assessor, until such time that a
person, natural or juridical, comes forth and files the sworn declaration of property
values required under either Article 294 or 295 of this Rule, as the case may be.
(c)
No oath shall be required of any declaration made by the provincial, city, or
municipal assessor.
Art. 296.
Listing of Real Property in the Assessment Rolls. (a) In every province
and city, including the municipalities within MMA, there shall be prepared and
maintained by the provincial, city, or municipal assessor an assessment roll wherein
all real property, whether taxable or exempt, located within the territorial jurisdiction
of the LGU concerned shall be listed. 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 Rule 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 assessed in the same manner as that of an individual.
(d)
Real property owned by the Republic of the Philippines, its 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.
Art. 297.
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 Rule 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,
articles of incorporation, by laws, 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. If the property shall be
proven to be tax exempt, the same shall be dropped from the assessment roll.
Art. 298.
Real Property Identification System. All declarations of real property
made under the provisions of this Rule shall be kept and filed under a uniform
classification system to be established by the provincial, city, or municipal assessor
pursuant to such guidelines as may be issued by DOF for the purpose.
Art. 299.
Notification of Transfer of Real Property Ownership. (a) Any person,
natural or juridical, who transfers real property ownership to another shall
accordingly notify the provincial, city, or municipal assessor concerned within sixty
(60) days from the date of such transfer, which shall be determined on the basis of
documents required in Article 294 and 295 of this Rule.
(b)
The notice of transfer shall include the mode of conveyance, description of
property alienated, and the name and address of the transferee.
(c)
In addition to the notice of transfer, the previous property owner shall likewise
surrender to the provincial, city or municipal assessor concerned, the tax declaration
covering the subject property in order that the same may be canceled from the
assessment records of the LGU. If, however, said previous owner still owns property
other than the property alienated, he shall, within the prescribed sixty-day period, file
with the provincial, city, or municipal assessor concerned, as amended sworn
declaration of the true value of the property or properties he retains in accordance
with the provisions of Article 294 or 295 of this Rule.
Art. 300.
Duty of Registrar of Deeds to Apprise Local Assessor of Real Property
Listed in Registry. (a) Within six (6) months from the date of effectivity of the Code,
and on or before June 30th of every year thereafter, the registrar of deeds shall
prepare and submit to the provincial, city, or municipal assessor concerned the
abstract of his Registry of Property which include a brief but sufficient description of
the real property entered therein, their present owners, and the date of their most
recent transfer or alienation accompanied by copies of corresponding deeds of sale,
donation, or partition or other forms of alienation.

(b)
Before any document of transfer, alienation, or encumbrance of real property
may be registered, the registrar of deeds shall require the presentation of a certificate
or clearance issued by the local treasurer concerned to the effect that all current year
and past year basic and additional special education fund, real property taxes, and
the tax on transfer of real property ownership in Rule XXX of these Rules, due on the
subject property, have been paid in full including interests or penalties due thereon.
Failure to provide such certificate shall be a valid cause for the registrar of deeds to
refuse the registration of the document. In the absence of such certification or tax
clearance, the registration is null and void.
(c)
The registrar of deeds and notaries public shall furnish the provincial, city, or
municipal assessor with copies of all contracts, selling, transferring, or otherwise
conveying, leasing, or mortgaging real property registered by, or acknowledged
before them, within thirty (30) days from the date of registration or acknowledgment.
Art. 301.
Duty of Official Issuing Building Permit or Certificate of Registration of
Machinery to Transmit Copy to Local Assessor. (a) Any person entrusted by law with
the issuance of permits for the construction, renovation, addition, repair, or any other
permanent improvement on land, or those who are authorized to issue certificates of
registration or installation of any machinery, including mechanical contrivances and
apparatus attached to or affixed on land or any other real property, shall transmit
within thirty (30) days from the date of issuance a copy of such permits or certificates
to the assessor of the province, city, or municipality where the building or machinery
is situated. Where it is found to be more convenient or efficient, said official may, in
lieu of individual copies of the said permits or certificates, furnish the local assessor
concerned with monthly summaries of issued permits or certificates within the first
ten (10) days of the succeeding month.
(b)
Any official referred to in paragraph (a) hereof shall likewise furnish the local
assessor concerned with copies of the building floor plans and/or certificates of
registration or installation of other machineries which may not be permanently or
temporarily attached to land or another real property but falling under the definition
of the term machinery under Article 291 of this Rule and the rules and guidelines
issued by DOF.
Art. 302.
Duty of Geodetic Engineer to Furnish Copy of Plans to Local Assessor.
All persons authorized by law to conduct land surveys and to certify as to the validity
of such survey, whether public or private, shall furnish free of charge the assessor of
the province, city, or municipality where the property is located with a white or blue
print copy of all approved original or subdivision plans or maps of surveys they have
conducted within thirty (30) days from receipt of such approved plans from LMB,
National Land Titles and Deed Registration Administration, or Housing and Land
Use Regulatory Board, as the case may be.
Art. 303.
Preparation of Schedule of Fair Market Values. (a) Before any general
revision of property assessment is made pursuant to the provisions of this Rule, there
shall be prepared a schedule of fair market values by the provincial and city assessors,
and the municipal assessors of the municipalities within MMA for the different
classes of real property situated in their respective LGUs 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 (2) other conspicuous public places therein.
(b)
In the preparation of schedules of fair market values, the provincial and city
assessors and the municipal assessors of the municipalities within MMA shall be
guided by the rules and regulations issued by DOF.

Art. 304.
Authority of Local Assessors 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.
Art. 305.
Amendment of Schedule of Fair Market Values. (a) 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 recommendation within ninety (90) days
from receipt thereof.
(b)
The provincial, city, or municipal assessor may recommend to the sanggunian
concerned amendments to the prevailing schedule of fair market values of the locality
to correct errors arising from, or involving, omissions in the subject schedule of any
kind or type of real property, or any city, district or barangay, or any road or street
and/or the classification or sub-classification of real property.
Art. 306.
Classes of Real Property for Assessment Purposes. Real property shall
be classified as residential, agricultural, commercial, industrial, mineral, timberland,
or special by the provincial and city assessors, including the municipal assessors of
MMA. The cities and municipalities within MMA shall, through their respective
sanggunians, exercise the power to classify lands as such in accordance with their
zoning ordinances provided that for purposes of assessment, real property shall be
classified on the basis of actual use regardless of where located as provided in Article
309 of this Rule.
Art. 307.
Special Classes of Real Property. All lands, buildings, and other
improvements thereon actually, directly and exclusively used for hospitals, cultural,
or scientific purposes, and those owned and used by local water districts, and GOCCs
rendering essential public services in the supply and distribution of water and
generation and transmission of electric power shall be classified as special.
Art. 308.
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.
Art. 309.
Assessment Levels. (a) 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 MMA, at the rates not exceeding the
following:
(1)
On Lands:
Class Assessment Level
Residential 20%
Agricultural 40%
Commercial 50%
Industrial
50%
Mineral
50%
Timberland 20%
(2)
On Buildings and Other Structures:
Residential
Fair Market Value
Over Not Over
Assessment Level
P 175,000.00
0%
P 175,000.00300,000.00 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
2,000,000.00
5,000,000.00
5,000,000.00
10,000,000.00
10,000,000.00
60%
Agricultural
Fair Market Value
Over Not Over
Assessment Level
P 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
2,000,000.00
50%
Commercial or Industrial
Fair Market Value
Over Not Over
Assessment Level
P 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
2,000,000.00
5,000,000.00
5,000,000.00
10,000,000.00
10,000,000.00
80%
Timberland

35%
40%
50%

45%

60%
70%
75%

Fair Market Value

Over Not Over
Assessment Level
P 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
70%
(3)
On Machineries
Class Assessment Level
Agricultural 40%
Residential 50%
Commercial 80%
Industrial
80%
(4)
On Special Classes: Assessment level for all lands, buildings, machineries and
other improvements;
Actual Use Assessment Level
Cultural
15%
Scientific
15%
Hospital
15%
Local Water District
10%
GOCCs engaged in the supply and distribution of water and/or generation and
transmission of electric power
10%
(b)
Assessment levels in paragraph (a) hereof shall be applied initially during the
first general revision of real property assessments to be undertaken pursuant to
Article 310 of this Rule.
(c)
Pending the enactment of a schedule of fair market values under Articles 303
and 310 of this Rule and the effectivity of the revised new assessment levels, the

prevailing schedules of market values and the levels currently used by the provincial,
city, and municipal assessors shall continue to be applied.
Art. 310.
General Revision of Assessments and Property Classification. (a) The
provincial, city, or municipal assessor shall undertake a general revision of real
property assessment within two (2) years after the effectivity of the Code and every
three (3) years thereafter.
(b)
For this purpose, the provincial assessors, the city assessors, and the
municipal assessors of MMA shall prepare the schedule of fair market values for the
different kinds and classes of real property located within their respective territorial
jurisdictions within one (1) year from the effectivity of the Code in accordance with
such rules and regulations issued by DOF.
(c)
The general revision of assessments and property classification shall
commence upon the enactment of an ordinance by the sanggunian concerned
adopting the schedule of fair market values but not later than two (2) years from the
effectivity of the Code. Thereafter, the provincial, city, or municipal assessor shall
undertake the general revision of real property assessment and property classification
once every three (3) years.
Art. 311.
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 on-going 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
Rule, 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 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.
Art. 312.
Date of Effectivity of Assessment or Reassessment. All assessments or
reassessment 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 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.
Art. 313.
Assessment of Property Subject to Back Taxes. Real property declared
for the first time shall be assessed for the 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 receipt of the assessment until such taxes are fully paid.
Art. 314.
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.

Art. 315.
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.
Art. 316.
Depreciation Allowance for Machinery. For purposes of assessment, a
depreciation 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 that the remaining value for all kinds of
machinery shall be fixed at not less than twenty percent (20%) of such original,
replacement, or reproduction cost for so long as the machinery is useful and in
operation.
Art. 317.
Local Board of Assessment Appeals. (a) Any property owner or person
having legal interest or claim in the property who is not satisfied with the assessment
of his property made by the provincial, city, or municipal assessor pursuant to the
provisions of this Rule may, within sixty (60) days from the date of receipt of the
written notice of assessment, appeal to local board of assessment appeals of the
province or city where the subject property is situated by filing a petition under oath
in the standard form prescribed therefor, together with copies of the tax declaration
and such affidavits or documents in support of the appeal.
(b)
In the case of municipalities within MMA, the appeals may be filed with the
municipal board of assessment appeals of each municipality as provided in Article
318 of this Rule.
Art. 318.
Organization, Powers, and Functions of the Local Board of Assessment
Appeals. (a) In the determination and resolution of assessment appeals, the
provincial or city board of assessment appeals shall be composed of the following:
Registrar of Deeds
Chairman
Provincial or City Prosecutor
Member
Provincial or City Engineer
Member
(b)
In the case of municipalities within MMA, the municipal board of assessment
appeals shall be composed of the following:
Registrar of Deeds of the municipality or of the area having custody and jurisdiction
over titles of land within the jurisdiction of the municipality
Chairman
Prosecutor designated or assigned
to the municipality
Member
Municipal Engineer
Member
(c)
The chairman and members of the local board of assessment appeals shall
serve in an ex officio capacity without additional compensation.
(d)
The chairman of the board shall have the power to designate any employee of
the province or city, or municipality within MMA, to serve as secretary to the said
board.
(e)
In cases of provinces or cities, and municipalities within MMA without a
provincial, city, or municipal engineer, the district engineer shall serve as member of
the board until a provincial or municipal engineer shall have been duly appointed or
designated. In the absence of the registrar of deeds, or the prosecutor, or the local
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 of the said board, as the case may be.
(f)
The chairman and members of the local board of assessment appeals shall
assume their respective positions without need of further appointment or special
designation immediately upon effectivity of the Code.
(g)
Before the assumption of the official functions or before discharging their
duties as chairman and members of the local board of assessment appeals, they shall
take an oath or affirmation of office in the manner herein set forth:
"I ___________________, after having been appointed to the position of
_________________________, in the province, city, or municipality of
______________, and now assuming my position as ____________ of the
Board of Assessment Appeals of the province, city or municipality of ________,
hereby solemnly swear that I will faithfully discharge to the best of my ability the
duties of this position and of all others that I am holding, or may hereafter hold,
under the Republic of the Philippines, and that I will support and defend the
Constitution of the Philippines; and that I will obey the laws and legal orders
promulgated by the duly constituted authorities of the Republic of the Philippines;
and that I will well and truly hear and determine all matters and issues between
taxpayers and the provincial or city assessor submitted for my decision, and that I
impose this obligation upon myself voluntarily, without mental reservation or
purpose of evasion.
So help me God.
_________________
Signature
Subscribed and sworn to before me on this _______ day of________, A.D.
____________ at _________ Philippines.
_____________________
Signature of Officer
Administering Oath
Art. 319.
Meetings and Expenses of the Local Board of Assessment Appeals. (a)
The local board of assessment appeals shall meet once a month and as often as may
be necessary for the prompt disposition of appealed cases without entitlement to per
diem or traveling expenses for their attendance in board meeting except when
conducting an ocular inspection of real properties whose assessment is under appeal,
in which case, such expenses shall be charged against the general fund of the province
or city, or municipality within MMA, as the case may be.
(b)
The sanggunian concerned shall include in their general appropriations
ordinance necessary funds to defray expenses of the board.
Art. 320.
Action by the Local Board of Assessment Appeals. (a) From the date of
receipt of an appeal, the local board of assessment appeals shall, on the basis of
substantial evidence or such relevant evidence on record adequately acceptable to
support a conclusion, decide such appeal within one hundred twenty (120) days.
(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 or municipal
assessor within MMA with a copy of the decision of the board. In case the provincial
or city assessor or municipal assessor within MMA concurs with 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 the board, appeal to the Central Board of Assessment
Appeals as herein provided. The decision of the Central Board shall be final and
executory.
Art. 321.
Central Board of Assessment Appeals. The Central Board 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 of 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 Central 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 for at least ten (10) years immediately preceding their appointment. The
chairman of the Central Board 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 Central 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 Central Board shall have appellate
jurisdiction over all assessment cases decided by the local board and assessment
appeals.
The incumbents of the positions of Chairman I and Member I of the Central Board
shall continue to receive the same salary and other benefits attached to their positions
during their tenure if appointed chairman and members of the new Central Board.
There shall be hearing officers to be appointed by the Central Board pursuant to civil
service law, rules and regulations, one each of Luzon, Visayas, and Mindanao, who
shall hold office in the City of 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 shall have been appointed and qualified. The hearing officers
shall have the same qualifications as those of the Judges of the Municipal Trial
Courts.
The hearing officers shall each have a 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 Central Board.
The Central Board, in the performance of its powers and duties, may establish and
organize staffs, offices, or 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
shall be included in the annual budget of DOF.
Art. 322.
Effect of Appeal on the Payment of Real Property Tax. Appeals on
assessments of real property made under the provisions of this Rule shall, in no case,
suspend the collection of the corresponding real property taxes on the property
involved as assessed by the provincial or city assessor, or the municipal assessor
within MMA, without prejudice to subsequent adjustment depending upon the final
outcome of the appeal.
Art. 323.
Power to Levy Real Property Tax. Provinces and cities, and
municipalities within MMA, through their respective sanggunians, may levy the
annual ad valorem tax on real property such as land, buildings, machinery, and other
improvements not specifically exempted under this Rule.
Art. 324.
Rates of Levy. A province or a city, or a municipality within MMA shall
fix a uniform rate of basic real property tax applicable in their respective jurisdictions
as follows:

(a)
For provinces: not exceeding one per cent (1%) of the assessed value;
(b)
For cities or for municipalities within MMA: not exceeding two percent (2%) of
the assessed value.
No public hearing shall be required before the enactment of a local tax ordinance
levying the basic real property tax.
Art. 325.
Exemption from Payment of Real Property Tax. The following are
exempted from payment of the real property tax:
(a)
All 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 GOCCs 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 in RA
6938; and
(e)
Machinery and equipment exclusively used for pollution control and
environmental protection.
Except as provided in this Rule, any exemption from payment of real property tax
previously granted to, or presently enjoyed by, all persons, whether natural or
juridical, including all GOCCs are withdrawn upon the effectivity of the Code.
Art. 326.
Additional Levy on Real Property for the Special Education Fund. A
province or city, or a municipality within MMA, 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 property tax. The proceeds thereof shall exclusively accrue to the special
education fund.
All provinces and cities, and the municipalities within MMA shall enact their
respective tax ordinances imposing the additional tax for the special education fund.
No public hearing shall be required before the enactment of a local tax ordinance
levying the additional one percent (1%) special education fund tax.
Art. 327.
Additional Ad Valorem Tax on Idle Lands. A province or city, or a
municipality within MMA, 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.
Art. 328.
Idle Lands, Coverage. For purposes of real property taxation, idle lands
shall include 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 Article 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
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 the subdivision owner or operator.
Art. 329.
Idle Lands Exempt from Tax. A province or a city or a municipality
within MMA 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.
Art. 330.
Listing of Idle Lands by the Local 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.
Art. 331.
Special Levy by Local Government Units. A province, city, or
municipality may impose a special levy on the lands comprised within its territorial
jurisdiction specially benefited by public works projects or improvements funded by
the LGU concerned provided 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 and 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 LGU
concerned for the construction of such projects or improvements.
Art. 332.
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.
Art. 333.
Publication of Proposed Ordinance Imposing a Special Levy. Before the
enactment of an ordinance imposing a special levy, the sanggunian concerned shall
conduct a public hearing thereon and 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.
Art. 334.
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 local assessor concerned, or its
current assessed value as fixed by said assessor if the property does not appear on
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.
Art. 335.
Taxpayers' Remedies Against Special Levy. Any owner of real property
affected by 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 in Article 317 of this Rule.
Art. 336.
Accrual of Special Levy. The special levy shall accrue on the first day of
the quarter next following the effectivity of the ordinance imposing such levy.

Art. 337.
Date of Accrual of Tax. The real property tax for any year shall accrue
on the first day of January and from the 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.
Art. 338.
Collection of Tax. The collection of the real property tax with interest
thereon and related expenses, and the enforcement of the remedies provided in this
Rule or any applicable laws, shall be the responsibility of the city or municipal
treasurer concerned.
Property owners, however, at their option or convenience, may pay their real property
taxes to the provincial treasurer of the province to which the municipality where the
subject property is located, belongs.
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 and provided further that the premium on the bond
shall be paid by the city or municipality concerned.
Art. 339.
Local Assessor to Furnish Local Treasurer with Assessment Roll. The
provincial, city, or municipal assessor shall prepare and submit to the local treasurer
concerned, 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.
Art. 340.
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 special education fund or on any
other date to be prescribed by the sanggunian concerned in the case of any other tax
levied in this Rule, 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.
Art. 341.
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 due thereon without interest in
four (4) equal installments; the first installment to be due and payable on or before
the thirty-first (31st) of March, the second installment, on or before the thirtieth
(30th) of June; the third installment, on or before the thirtieth (30th) of September,
and the last installment on or before the thirty-first (31st) of December, except the
special levy for which the payment thereof shall be governed by ordinance of the
sanggunian concerned.
The date for payment of any other tax imposed in this Rule 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.
Art. 342.
Tax Discount for Advanced and Prompt Payment. If the basic real
property tax and the additional tax accruing to special education fund are paid on
time or in advance in accordance with the prescribed schedule of payment as
provided in Article 341 of this Rule, the sanggunian concerned may grant a discount
not exceeding twenty percent (20%) of the annual tax due.
For purposes of this Rule, prompt payments may be given a discount of ten percent
(10%), while advanced payments may be entitled to the maximum discount of twenty
percent (20%).
Art. 343.
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 or city treasurer, or municipal treasurer, in the
case of a municipality within MMA, 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
local treasurer concerned. Fifty percent (50%) of the tax paid under protest shall,
however, be distributed in accordance with the provisions of this Rule on the
distribution of proceeds.
(c)
In the event that the protest in 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 paragraph (a) hereof, the taxpayer may avail of the remedies provided
in Articles 317 and 320 of this Rule.
Art. 344.
Repayment of Excessive Collections. When an assessment of basic real
property tax, or any other tax levied in this Rule, is found 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 this Rule.
Art. 345.
Notice of Delinquency in the Payment of Real Property Tax. (a) When
the real property tax or any other tax imposed in this Rule 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 LGU 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 concerned.
(b)
The 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
Article 346 of this Rule, 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 this Rule, 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.
Art. 346.
Interests on Unpaid Real Property Tax. Failure to pay the basic real
property tax or any other tax levied in this Rule upon the expiration of the periods
prescribed in Article 341 hereof, 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 that in no case shall the total interest on the unpaid tax or portion
thereof exceed thirty-six (36) months.
Art. 347.
Remedies for the Collection of Real Property Tax. For the collection of
the basic real property tax and any other tax levied under this Rule, LGU may avail of
remedies by administrative or judicial action. The administrative remedies which are
summary in nature are:

(a)
Levy on real property, and (b)
Sale of real property at public auction.
The judicial remedy is availed of in the court of appropriate jurisdiction. These
remedies are cumulative, simultaneous and unconditional, that is, any or all of the
remedies or combination thereof may be resorted to and the use or non-use of one
remedy shall not be a bar against the institution of the others. Formal demand for the
payment of the delinquent taxes and penalties due is not a pre-requisite to such
remedies. The notice of delinquency required in Article 346 of this Rule shall be
sufficient for the purpose.
Art. 348.
Local Government Lien. The basic real property tax and any other tax
levied under this Rule constitute 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.
Art. 349.
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 Rule, 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 civic action for the collection of
the delinquent tax. Levy on real property shall be made in the manner herein set
forth.
(a)
The provincial or city treasurer, or municipal treasurer of a municipality
within MMA when issuing a warrant of levy shall prepare the duly authenticated
certificate showing the name of the delinquent property owner or person having legal
interest therein, the description of the property, the amount of the tax due and the
interest thereon.
(b)
The warrant shall be mailed to or served upon the delinquent real property
owner or person having legal interest therein. In case he is out or can not be located,
to the occupant or administrator of the subject property.
(c)
Written notice of levy with the attached warrant shall be mailed to or served
upon the assessor and the registrar of deeds of the province, city, or municipality
within MMA where the property is located.
(d)
The assessor and registrar of deeds shall annotate the levy on the tax
declaration and the certificate of title, respectively.
(e)
The levying officer shall submit a written report on the levy to the sanggunian
concerned within ten (10) days after receipt of the warrant by the property owner or
person having legal interest in the property.
Art. 350.
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.
Art. 351.
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 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
conspicuous and publicly accessible 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 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 the sale and a brief description of the proceedings provided 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 a duly approved ordinance, advance an amount sufficient
to defray the costs of collection through the remedies provided for in this Rule,
including the expenses of advertisement and sale.
Art. 352.
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 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.
Art. 353.
Final Deed to Purchaser. In case the owner or person having legal
interest therein 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.
Art. 354.
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 the sale, the local treasurer conducting the sale
shall purchase the property in behalf of the LGU 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 LGU concerned without the necessity
of an order from a competent court.
Within one (1) year from the date of such forfeiture, the taxpayer or 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 costs of sale. If the
property is not redeemed as provided herein, the ownership thereof shall be fully
vested on the LGU concerned.

Art. 355.
Resale of Real Estate Taken for Taxes, Fees, or Charges. The
sanggunian concerned may, by a duly approved ordinance, and upon notice of not
less than twenty (20) days, sell and dispose of the real property acquired under the
preceding Article at public auction. The proceeds of the sale shall accrue to the
general fund of the LGU concerned.
Art. 356.
Further Distraint or Levy. Levy may be repeated if necessary on the
same property subject to tax until the full amount due, including all expenses, is
collected.
Art. 357.
Collection of Real Property Tax Through the Courts. The delinquent
basic real property tax or any other tax levied under this Rule shall constitute a lawful
indebtedness of the taxpayer to the LGU. Collection of such indebtedness can be
enforced thru civil action in any court of competent jurisdiction, as follows:
(a)
The provincial or city treasurer, or municipal treasurer of a municipality of
MMA shall furnish the provincial attorney or city or municipal legal officer a certified
statement of delinquency who, within fifteen (15) days after receipt, shall file the civil
action in the name of the province, city, or municipality in the proper court of
competent jurisdiction. The jurisdiction of the court is determined by the amount
sought to be recovered exclusive of interests and costs. Thus, where the delinquent
tax due does not exceed Ten Thousand Pesos (P10,000.00), the competent court is
the municipal or city trial court, and where the amount due is in excess of Ten
Thousand Pesos (P10,000.00), the proper court is the regional trial court.
(b)
Where cognizable in an inferior court, the action must be filed in the
municipality or city where the delinquent property is located. Where the regional trial
court has jurisdiction, the plaintiff LGU shall file the complaint in the city or province
where the property is situated.
(c)
In both cases, that is, where the claim is either cognizable by an inferior court
or by the regional trial court, the provincial or city treasurer shall furnish the
provincial attorney or the city or municipal legal officer concerned the exact address
of the defendant where he may be served with summons.
Art. 358.
Action Assailing Validity of Tax Sale. (a) No court shall entertain any
action assailing the validity of any sale at public auction of real property or rights
therein under this Rule 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.
(b)
No court shall 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.
Art. 359.
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 proprio or upon representation of the provincial, city, or
municipal treasurer or their respective deputies, award such ownership, possession,
or succession to any party to the action upon payment to the court of the taxes with
interests due to the property and all other costs that may have accrued, subject to the
final outcome of the action.
Art. 360.
Certification of Local Treasurer on Delinquencies Remaining
Uncollectible. 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 said

documents 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 in this Rule.
Art. 361.
Periods Within Which To Collect Real Property Taxes. The basic real
property tax and any other tax levied under this Rule shall be collected within five (5)
years from the date they become due. No action for 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 thereof 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:
(a)
The local treasurer is legally prevented from collecting the tax;
(b)
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
(c)
The owner of the property or the person having legal interest therein is out of
the country or otherwise cannot be located.
Art. 362.
Distribution of Proceeds. (a) The proceeds of the basic real property
tax, including interest thereon, and proceeds from use, lease or disposition, sale or
redemption of property acquired at a public auction, and fifty percent (50%) of the
tax paid under protest collected by the local treasurer shall be distributed as follows:
Provinces
(1)
Provincial Share Thirty-five percent (35%) shall accrue to the general fund.
(2)
Municipal Share Forty percent (40%) shall accrue to the general fund of the
municipality where the property is located.
(3)
Barangay Share Twenty-five percent (25%) shall accrue to the barangay where
the property is located.
Cities
(1)
City Share Seventy percent (70%) shall accrue to the general fund of the city.
(2)
Barangay Share 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%) share accrue to the barangay where the property is located.
(ii)
Fifty percent (50%) shall accrue equally to all component barangays of the city.
Municipality within MMA
(1)
Metropolitan Manila Authority Share Thirty-five percent (35%) shall accrue to
the general fund of the Authority.
(2)
Municipal Share Thirty-five percent (35%) shall accrue to the general fund of
the municipality where the property is located.
(3)
Barangay Share Thirty percent (30%) shall be distributed among the
component barangays of the municipality where the real 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.
(b)
The share of each barangay shall be released directly to the barangay treasurer
on a quarterly basis within five (5) days after the end of each quarter, without need of
any further action, and shall not be subject to any lien or holdback for whatever
purpose subject to such rules as may be prescribed by COA for this purpose.

Art. 363.
Application of Proceeds of the Additional One Percent (1%) Special
Education Fund Tax. (a) The proceeds of the additional one percent (1%) real
property tax accruing to special education fund shall be automatically released to the
local school boards.
(b) In case of provinces, the process of the special education fund shall be divided
equally between the provincial and municipal school boards.
(c)
Said proceeds shall be allocated as determined and approved by the local
school board concerned only for the following purposes:
(1)
operation and maintenance of public schools;
(2)
construction and repair of school buildings, facilities and equipment;
(3)
educational research;
(4)
purchase of books and periodicals; and
(5)
sports development.
Art. 364.
Proceeds of the Tax on Idle Lands. The collection of additional real
property tax on the idle lands shall accrue to the respective general fund of the
province or city where the land subject to tax is situated. In the case of a municipality
within MMA, the same shall accrue equally to the Metropolitan Manila Authority and
the municipality where the land is situated. Accordingly, the proceeds of this tax shall
be treated in the income account as revenue from taxation.
Art. 365.
Proceeds of the Special Levy. The proceeds of the special levy of lands
benefited by public works, projects and other improvements shall accrue to the
general fund of the LGU which financed such public works, projects or other
improvements. Accordingly, all income derived from this special levy shall be treated
in the income account as revenue from taxation.
Art. 366.
General Assessment Revision; Expenses Incident Thereto. (a) The
sanggunian of provinces, cities and municipalities within MMA shall provide the
necessary appropriations to defray the expenses incident to the general revision of
real property assessment.
(b)
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.
(c)
The barangays may be required by the sanggunian of the city or municipality
to share in the expenses to be incurred for the conduct of a general revision of real
property assessments.
Art. 367.
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.
Art. 368.
Condonation or Reduction of Tax by the President of the Philippines.
The President 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 MMA.
Art. 369.
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.
Art. 370.
Duty of Insurance Companies to Furnish Information to Local Assessor.
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.
Art. 371.
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 Rule, shall be exempt from the payment of court and sheriff's fees.
Art. 372.
Fees in Registration of Papers or Documents on Sale of Delinquent Real
Property to Provinces, Cities, or Municipalities. 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.
Art. 373.
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 declarations sent through the mails by the
assessor shall be exempt from payment of postal charges or fees.
Art. 374.
Sale and Forfeiture Before Effectivity of the Code. Tax delinquencies
incurred, and sales and forfeitures of delinquent real property effected, before the
effectivity of the Code, shall be governed by the provisions of applicable laws then in
force.
Art. 375.
Penalties for Omission of Property from Assessment or Tax Rolls by
Officers and Other Acts. Any officer charged with the duty of assessing a 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, be punished by imprisonment of not less than one (1)
month nor more than six (6) months, or by a fine of not less than One Thousand
Pesos (P1,000.00) nor more than Five Thousand Pesos (P5,000.00), or both such
imprisonment and fine, 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 Rule 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
imprisonment of not less than one (1) month nor more than six (6) months, or by a
fine of not less than Five Hundred Pesos (P500.00) nor more than Five Thousand
Pesos (P5,000.00), or both such imprisonment and fine, at the discretion of the
court.
Art. 376.
Penalties for 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 imprisonment of not less than one (1) month nor
more than six (6) months, or by a fine of not less than Five Hundred Pesos
(P500.00), nor more than Five Thousand Pesos (P5,000.00), or both such
imprisonment and fine, at the discretion of the court.
Art. 377.
Penalties for 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 Rule,
and any other LGU official whose acts hinder the prompt disposition of delinquent
real property at public auction shall, upon conviction, be subject to imprisonment of
not less than one (1) month nor more than six (6) months, or a fine of not less than

One Thousand Pesos (P1,000.00) nor more than Five Thousand Pesos (P5,000.00),
or both such imprisonment and fine, at the discretion of the court.
RULE XXXII
SHARES OF LOCAL GOVERNMENT UNITS
IN THE PROCEEDS OF NATIONAL TAXES
Part One. Internal Revenue Allotment
Art. 378.
Allotment of Internal Revenue Taxes. The total annual internal revenue
allotments (IRAs) due the LGUs shall be determined on the basis of collections from
national internal revenue taxes actually realized as certified by the BIR during the
third fiscal year preceding the current fiscal year as follows:
(a)
For the first year of effectivity of the Code (1992), thirty percent (30%);
(b)
For the second year (1993), thirty-five percent (35%); and
(c)
For the third year (1994), and thereafter, forty percent (40%).
Art. 379.
Adjustment in the Internal Revenue Allotment Share. (a) In the event
that an unmanageable public sector deficit is incurred by the National Government,
the Secretary of Finance, the Secretary of the Interior and Local Government, and the
Secretary of Budget and Management shall submit to the President a joint
recommendation that will institute necessary adjustments in the IRAs of LGUs.
(b)
Upon receipt of the joint recommendation of the Secretary of Finance, the
Secretary of the Interior and Local Government, and the Secretary of Budget and
Management and subject to consultation with the presiding officers of both Houses of
Congress and the presidents of the leagues of LGUs, the President shall authorize the
necessary adjustments of the total IRA to be distributed among LGUs for the given
year, provided that in no case shall the adjusted amount be less than thirty percent
(30%) of the national internal revenue tax collections of the third fiscal year
preceding the fiscal year during which the reduction is to be made.
(c)
Adjustment to the IRA share of LGUs shall be made only after effecting a
corresponding reduction of the National Government expenditures including cash
and non-cash budgetary aids to GOCCs, government financial institutions (GFIs), the
Oil Price Stabilization Fund (OPSF), and the Central Bank (CB).
Art. 380.
Scope. (a) The IRA of LGUs shall be an integration of all allotments
received by them under existing laws, such as the regular internal revenue allotments,
the specific tax allotments (STA), and shares from the Local Government Revenue
Stabilization Fund (LGRSF).
(b)
Without prejudice to the provisions of RA 6743, the IRA of LGUs under the
Autonomous Region in Muslim Mindanao shall be governed by the Code and the
related implementing guidelines, which in no case shall be less than the amount as
determined by the computational formula provided in Article 382 of this Rule.
(c)
The share of COA in the collections of internal revenue taxes shall continue to
be governed by Sec. 24 (3) of PD 1445, as amended.
Art. 381.
Cost of Devolved Personal Services. For the first year of the effectivity
of the Code, the thirty percent (30%) IRAs due LGUs shall include the cost of
devolved functions for essential public services. The amount equivalent to the cost of
devolved personal services shall be remitted to LGUs concerned in addition to their
respective IRA for the year.
Art. 382.
Allocation of the Internal Revenue Allotment. (a) The total annual IRA
shares due all LGUs shall be allocated as follows:
Provinces
Twenty-three percent (23%)
Cities
Twenty-three percent (23%)
Municipalities
Thirty-four percent (34%)
Barangays
Twenty percent (20%)

(b)
The share of every province, city, and municipality shall be determined on the
basis of the following distribution formula:
Population
Fifty percent (50%)
Land Area
Twenty-five percent (25%)
Equal Sharing
Twenty-five percent (25%)
(c)
Every barangay with a population of not less than one hundred (100)
inhabitants shall be entitled to an IRA share of not less than Eighty Thousand Pesos
(P80,000.00) per annum chargeable against the 20% share of the barangays from the
total IRA;
(d)
After deducting the aggregate sum of the individual barangay share of Eighty
Thousand Pesos (P80,000.00) each from the total twenty percent (20%) allocation
for all barangays, the remaining balance of said twenty percent (20%) allocation shall
be further distributed to the barangays on the basis of the following formula:
(1)
For Calendar Year 1992
Population
Forty percent (40%); and
Equal Sharing
Sixty percent (60%).
(2)
For Calendar Year 1993
Population
Fifty percent (50%) and
Equal Sharing
Fifty percent (50%)
(3)
For Calendar Year 1994; and thereafter
Population
Sixty percent (60%); and
Equal Sharing
Forty percent (40%).
(e)
Financial requirements for the initial year of existence of provinces, cities, and
municipalities to be created after the effectivity of the Code shall be specified in the
law creating said LGUs.
(f)
Financial requirements of barangays created by LGUs after the effectivity of
the Code shall be the responsibility of the LGU concerned.
Art. 383.
Automatic Release of IRA Shares of LGUs. (a) The individual shares in
IRA of each LGU shall be automatically released, without need of any further action,
direct to the provincial, city, municipal, or barangay treasurer, as the case may be, on
a quarterly basis but not beyond five (5) days after the end of each quarter.
(b)
For the purpose of implementing this Article, the comprehensive Advice of
Allotment for the IRA shares of LGUs for the whole year shall be released by DBM
within the first ten (10) days of January of every year.
The corresponding Notices of Cash Allocation and checks, however, may be released
on a monthly basis but in no case shall the total amount due any LGU for each
quarter be released beyond five (5) days after the end of the corresponding quarter.
(c)
The IRA share of LGUs shall not be subject to any lien or holdback that may be
imposed by the National Government for whatever purpose unless otherwise
provided in the Code or other applicable laws and loan contract or project agreements
arising from foreign loans and international commitments, such as premium
contributions of LGUs to the Government Service Insurance System and loans
contracted by LGUs under foreign-assisted projects.
(d)
No LGU shall receive an annual IRA share that will be less than the total
amount it actually received in 1991.
Art. 384.
Allocation of Twenty Percent (20%) IRA Share of LGUs for
Development Projects. It shall be mandatory for each LGU to set aside in its annual
budgets amounts no less than twenty percent (20%) of its IRA for the year as
appropriation for local development projects that are embodied or contained in the
local development plans. Copies of local development plans shall be furnished the
DILG.

Art. 385.
Simplified Disbursement Scheme. The Secretary of Finance shall, in
consultation with the Secretary of Budget and Management, design and install a
simplified disbursement scheme that will ensure the prompt and regular release of
the individual IRA shares of all LGUs.
Part Two. Share of Local Government Units
in the National Wealth
Art. 386.
Share in the Proceeds from the Development and Utilization of the
National Wealth. (a) LGUs 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.
(b)
The term national wealth shall mean all natural resources situated within the
Philippine territorial jurisdiction including lands of public domain, waters, minerals,
coal, petroleum, mineral oils, potential energy forces, gas and oil deposits, forest
products, wildlife, flora and fauna, fishery and aquatic resources, and all quarry
products.
Art. 387.
Amount of Share of Local Government Units. (a) LGUs shall, in
addition to the IRA, have a share of forty percent (40%) of the gross collection
derived by the National Government from the preceding fiscal year from the
following:
(1)
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 in the utilization
and development of the national wealth within their territorial jurisdiction.
(2)
Administrative charges enumerated herein accruing to the National
Government whether collected by the National Government collecting agencies or, in
certain cases, by LGUs.
(3)
Proceeds from the development and utilization of national wealth where the
LGU actually collects and automatically retains its share of at least forty percent
(40%) of such proceeds shall not form part of the revenue base in the computation of
the forty percent (40%) share.
Art. 388.
Share of the Local Government Units from Any Government-Owned or
Controlled Corporations. LGUs shall have a share based on the preceding fiscal year
from the proceeds derived by any NGA or GOCC engaged in the utilization and
development of the national wealth based on the following formula whichever will
produce a higher share for the LGU:
(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 NGA or GOCC would have paid if it were not otherwise exempt.
Art. 389.
Allocation of Shares. The share in the immediately preceding Article
shall be distributed in the following manner:
(a)
Where the natural resources are located in the province:
Province
Twenty percent (20%)
Component City or
Municipality
Forty-five percent (45%); and
Barangay
Thirtyfive percent (35%)
provided 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:
Population
Seventy percent (70%); and
Land Area
Thirty percent (30%).

(b)
Where the natural resources are located in a highly-urbanized or independent
component city:
City
Sixty-five percent (65%); and
Barangay
Thirty-five percent (35%).
provided 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) hereof.
Art. 390.
Computation and Remittance of the Shares of Local Government Units.
The computation and remittance of the shares of LGUs shall be in accordance with
the following procedures:
(a)
The computation of the forty percent (40%) share of each LGU in the proceeds
from the development and utilization of the national wealth from the preceding year,
indicating the corresponding share of each province, city, municipality, and barangay
where the national wealth is being developed and/or utilized, shall be submitted by
the revenue collecting agencies to DBM not later than the fifteenth (15th) of March of
each ensuing year.
(b)
The allotment representing the share of each LGU shall be released without
need of any further action, directly to the provincial, city, municipal, or barangay
treasurers, 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.
(c)
Share of LGUs from the proceeds derived by any NGA or GOCC engaged in the
utilization and development of national wealth shall be directly remitted by such
agency or corporation to the provincial, city, municipal, or barangay treasurer
concerned within five (5) days after the end of each quarter. Within three (3) days
from the date of remittance, the agency or corporation concerned shall furnish the
Treasurer of the Philippines with a copy of the remittance advice.
Art. 391.
Development and Livelihood Projects. The proceeds from the share of
LGUs referred to in Article 386 of this Rule shall be appropriated by their respective
sanggunian to finance local development and livelihood projects provided 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 LGU where such source of energy is
located.
Art. 392.
Monitoring of Implementation. The DILG, in coordination with DOF
and in actual consultation with the leagues of LGUs, shall monitor the proper
implementation of Part Two of this Rule.
RULE XXXIII
LOCAL GOVERNMENT CREDIT FINANCING
Art. 393.
Scope. This Rule shall govern the power of LGUs to create indebtedness
and to enter into credit and other financial transactions.
Art. 394.
General Policy. (a) Any LGU 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)
An LGU may avail of credit lines from government or private banks and
lending institutions for the purpose of stabilizing local finances.
Art. 395.
Loans, Credits, and Other Forms of Indebtedness of Local Government
Units. (a) An LGU may contract loans, credits, and other forms of indebtedness with
any government or domestic private bank and other lending institutions to finance
the construction, installation, 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 LGU and the lender. The
proceeds from such transactions shall accrue directly to the LGU concerned.
(b)
An LGU may secure from any government bank and lending institution 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, housing financing, and livelihood projects, and other
economic enterprises.
(c)
Government financial and other lending institutions are authorized to grant
LGUs such loans, credit lines, advances, and other forms of indebtedness for projects
and purposes referred in paragraph (b) hereof, preferably at concessional interest
rates lower than the prevailing rates as may be authorized by the governing board of
the financial or lending institution.
Prevailing rates shall mean the Central Bank standard reference rate for medium-and
long-term loans.
(d)
The authority of an LGU to incur loans, credits, or other forms of indebtedness
shall be exercised through a sanggunian resolution, which shall expressly authorize
the governor, the city mayor, the municipal mayor, or the punong barangay
concerned to negotiate and enter into contract for purposes of securing the loan,
credit, or indebtedness applied for.
Art. 396.
Deferred-Payment and Other Financial Schemes. Provinces, cities, and
municipalities may likewise acquire property, plant, machinery, equipment, and such
necessary accessories under a supplier's credit, deferred payment plan, or other
financial schemes under the following conditions:
(a)
That the acquisition of such equipment, machinery, and their accessories shall
be governed by the pertinent provisions of Rule XXXV of these Rules, whether such
items are to be supplied or purchased from a local or foreign supplier; and
(b)
That the local chief executive, through a sanggunian resolution, is authorized
to negotiate the contract executed under the deferred payment scheme.
Art. 397.
Bonds and Other Long-Term Securities. (a) Subject to the rules and
regulations of the Central Bank and the Securities and Exchange Commission,
provinces, cities and municipalities are authorized to issue bonds, debentures,
securities, collaterals, notes, and other obligations to finance self-liquidating, incomeproducing development or livelihood projects pursuant to the priorities established in
the approved local development plan or 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.
(b)
In cases where the bond issue shall bear the guarantee of the National
Government, the approval of the Secretary of Finance shall be required.
Art. 398.
Inter-Local Government Loans, Grants, and Subsidies. Provinces,
cities, and municipalities may, upon approval of a majority of all members of the
sanggunian concerned and in amounts not exceeding their surplus funds, extend
loans, grants, or subsidies to other LGUs under such terms and conditions as may be
agreed upon by the contracting parties.
LGUs may, upon approval of their respective sanggunians, jointly or severally
contract loans, credits, and other forms of indebtedness for purposes mutually
beneficial to them.
Art. 399.
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 or agency, 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 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 LGU concerned. The proceeds from such loans shall accrue directly
to the said LGU.
(b)
The President may likewise authorize the relending to LGUs of the proceeds of
grants secured from foreign sources, subject to the provisions of existing laws and
applicable grant agreements.
(c)
Repayment or amortization of loans, including accrued interest thereon, may
be financed partly from the income of the projects or services and from the regular
income of the LGU, which must be provided for and appropriated regularly in its
annual budget until the loan and the interest thereon have been fully paid.
Art. 400.
Financing, Construction, Maintenance, Operation, and Management of
Infrastructure Projects by the Private Sector. (a) LGUs may enter into contracts with
any duly pre-qualified individual contractor, for the financing, construction,
operation, and maintenance of any financially viable infrastructure facilities, under
the build-operate-and-transfer (B-O-T) agreement, subject to the applicable
provisions of RA 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 Article.
(b)
LGUs 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 Article. It shall be the duty of the
LGU concerned to disclose to the public all projects eligible for financing, including
official notification of duly registered contractors and publication in newspapers of
general or local circulation and in conspicuous and accessible public places. Local
projects under the B-O-T agreement shall be confirmed by the LDC concerned.
(c)
Projects implemented under this Article 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 in this Article shall be in accordance with
the Code and other applicable laws, rules and regulations.
In the case of a B-O-T agreement, the contract shall be awarded to the lowest
complying bidder whose offer is deemed most advantageous to the LGU 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 LGU concerned
the franchise to operate and maintain the facility, including the collection of tolls,
fees, rentals, and charges in accordance with paragraph (c)(4) hereof.
In the case of a B-O-T agreement, the 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.
(3)
Any contractor who shall undertake the prosecution of any project in this
Article 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, as the case may be, not allow any
contractor to initiate the prosecution of projects in this Article 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 his investment in
accordance with his bid proposal as accepted by the LGU concerned.
In the case of a B-O-T agreement, the 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 LGU 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
and 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.
In the case of a B-O-T agreement, the 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 in this Article shall be constructed,
operated, and maintained by the contractor under the technical supervision of the
LGU 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 Article to determine their legality, validity,
enforceability, and correctness of form.
(e)
The pertinent Rules and Regulations Implementing RA 6957 shall form part of
this Rule (Annex D).
Art. 401.
Remedies and Sanctions. LGUs shall appropriate in their respective
annual budgets such amount as are sufficient to pay the loans and other indebtedness
incurred or redeem or retire bonds, debentures, securities, notes, and other
obligations issued pursuant to this Rule provided that failure to provide the
appropriations herein required shall render their annual budgets inoperative.
Any LGU, through its local chief executive and upon authorization by the sanggunian
concerned, may authorize the National Government to deduct or withhold a portion
of its IRA share for the payment of its contractual obligation, subject to the
limitations in Article 419(b) of Rule XXXIV of these Rules. For this purpose, the
resolution of the sanggunian shall clearly state the name of the creditor, the nature of
the indebtedness, the amount to be withheld, and a period of time that such
withholding of IRA shares shall be made.
Art. 402.
Prohibited Acts Related to the Awards of Contract. It shall be unlawful
for any public official or employee in the province, city or municipality, 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 this

Rule, or for the procurement of any supplies, materials, or equipment of any kind to
be used in the said project. Any person convicted for violation of the provisions of this
Rule shall be removed from office and shall be punished with imprisonment of not
less than one (1) month but not more than two (2) years, at the discretion of the
court, without prejudice to prosecution under other laws.
Art. 403.
Technical Assistance. The DOF may provide technical assistance to any
LGU in the availment of credit facilities, flotation of bonds, contracting of loans, and
other indebtedness and shall issue such guidelines as may be necessary for the
purpose.
RULE XXXIV
LOCAL GOVERNMENT BUDGETING
Art. 404.
Scope. This Rule shall cover the budgeting operations of provinces,
cities, municipalities, and barangays.
Art. 405.
Fundamental Principles. The following fundamental principles shall
govern local government budgeting:
(a)
National planning shall be based on local planning to ensure that the needs
and aspirations of the people as well as those of the LGUs shall be considered in the
formulation of budgets of NGAs;
(b)
Local budget plans and goals shall, as far as practicable, be harmonized with
national development goals and strategies in order to optimize the utilization of
resources and to avoid duplication in the use of fiscal and physical resources;
(c)
LGUs shall formulate sound financial plans, and local budgets shall be based
on functions, activities, and projects, in terms of expected results;
(d)
LGUs shall ensure that their respective budgets incorporate the requirements
of their component LGUs and provide for equitable allocation of resources among
these LGUs;
(e)
Local government budgets shall operationalize approved local development
plans;
(f)
No money shall be paid out of the local treasury except in pursuance of an
appropriations ordinance or law;
(g)
LGUs shall endeavor to have a balanced budget in each fiscal year of
operation;
(h)
Local government funds and monies shall be spent solely for public purposes;
(i)
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;
(j)
Fiscal responsibility shall be shared by all those exercising authority over
financial affairs, transactions, and operations of LGUs;
(k)
Local revenue is generated only from sources expressly authorized by law or
ordinance, and collection thereof shall at all times be acknowledged properly;
(l)
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; and
(m) Every officer of LGU 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.
Art. 406.
Definition of Terms. (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 the ordinance directing the
payment of goods and services from local government funds under specified
conditions or for specific purposes;

(c)
Budget Document refers to the instruments used by the local chief executive to
present a comprehensive financial plan to the sanggunian concerned;
(d)
Capital Outlay refers to appropriation for the purchase of goods and services,
the benefits of which extend beyond the fiscal year and which add to the assets of the
LGU concerned, including investments in public utilities such as public markets and
slaughterhouses;
(e)
Continuing Appropriation refers to an appropriation available to support
obligation for a specified purpose or project, 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 refer 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 refer to 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 LGU;
(j)
Obligations refer to an amount committed to be paid by the LGU for any lawful
act made by an accountable officer for and in behalf of the LGU concerned;
(k)
Personal Services refer to appropriations for the payment of salaries, wages,
and other compensation of temporary, contractual, and casual employees of the LGU;
(l)
Receipts refer to income realized from the operations and activities of the LGU
or are received by the LGU in the exercise of its corporate functions, consisting of
charges for services rendered, 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;
(m) Revenues refer to income derived from the regular system of taxation enforced
under the authority of law or ordinance and as such, accrue more or less regularly
every year.
Art. 407.
Composition. Local government budgets shall primarily consist of two
(2) parts:
(a)
The estimates of income; and
(b)
The total appropriations covering the current operating expenditures and
capital outlays.
Art. 408.
Form and Content. The budget document shall contain:
(a)
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;
(b)
A brief summary of the functions, projects, and activities to be accomplished in
pursuit of the goals and objectives of the LGU for the ensuing fiscal year, specifically
the delivery of basic services or facilities enumerated in Rule V of these Rules.
(c)
Summary of financial statements setting forth:
(1)
The actual income and expenditures during the immediately preceding year;
(2)
The actual income and expenditure of the first two (2) quarters and the
estimates of income and expenditure for the last two (2) quarters of the current fiscal
year;

(3)
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 revenueraising proposals;
(4)
The estimated expenditures necessary to carry out the functions, projects, and
activities of the LGU for the ensuing fiscal year;
(5)
All essential facts regarding the bonded and other long-term obligations and
indebtedness of the LGU, if any;
(6)
Summary statement of all statutory and contractual obligations due; and
(7)
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 LGU.
Art. 409.
Internal Revenue Allotment and Shares in the Utilization of National
Wealth. For purposes of budget preparation, DBM and other appropriate NGAs and
GOCCs concerned, shall provide LGUs, not later than the fifteenth (15th) day of June
of each year, information as to their allocation of, and shares from, the utilization and
development of national wealth, if any, for the budget year.
Art. 410.
Submission of Local Development Plan. LDCs shall submit to the local
finance committee a copy of the local development plan and annual investment
program prepared and approved during the fiscal year before the calendar for budget
preparation in accordance with applicable laws, specifying therein projects proposed
for inclusion in the local government budget as well as in the budgets of NGAs or
GOCCs concerned.
The local finance committee shall use the plan to ensure that projects proposed for
local funding are included in the budget.
NGAs and GOCCs shall provide LGUs all necessary information on projects already
funded in their respective budgets. Such information shall include specifically, among
other things: name of project, location, sources, and levels of funding for said
projects. The same information must be made available to the local finance
committee concerned within the first quarter of the year to avoid duplications in
funding project proposals.
Art. 411.
Submission of Detailed Statements of Income and Expenditures. 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.
All statements of income and expenditures referred to in this Article, shall be jointly
certified by the local treasurer and the local accountant.
Art. 412.
Local Finance Committee. There shall be created in every province,
city, or municipality a local finance committee to be composed of the local planning
and development coordinator, the local budget officer, and the local treasurer. The
committee shall:
(a)
Determine the income reasonably projected as collectible for the ensuing fiscal
year;
(b)
Recommend appropriate tax and other revenue measures or borrowing which
may be required to support the budget;
(c)
Recommend to the local chief executive concerned the level of annual
expenditures and 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 outlay under each development activity or infrastructure project;
(f)
Assist the sangguniang panlalawigan in the review and evaluation of the
budget of component cities and municipalities in the case of the provincial finance
committee, the barangay budgets in the case of the city or the municipal finance
committee, and recommend appropriate action thereon;
(g)
Assist the sanggunian concerned in the analysis and review of annual regular
and supplemental budgets of the respective LGUs to determine compliance with
statutory and administrative requirements; and
(h)
Conduct semi-annual review and general examination of costs and
accomplishments against performance standards applied in undertaking
development projects, and prepare a report thereon. A copy of the 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.
Art. 413.
Submission of Budget Proposals by Heads of Offices or Departments.
(a) Each head of office or department shall submit a budget proposal for his office or
department to the local chief executive on or before the fifteenth (15th) day of July of
each year.
The budget proposal of each office or department shall be categorized under either
economic, social, or general services. Each service shall be covered by the budget of at
least one (1) office or department of the LGU.
(b)
The basic services and facilities shall be funded from the share of LGUs in the
proceeds of national taxes and other local revenues, and funding support from the
National Government, its instrumentalities and GOCCs which are tasked by law to
establish and maintain such services or facilities. Any fund or resource available for
the use of LGUs shall first be allocated for the provision of basic services or facilities
enumerated in Rule V of these Rules before applying the same for other purposes,
unless otherwise provided in these Rules.
(c)
The budget proposal shall be prepared in accordance with such policy and
program guidelines as the local chief executive may issue in conformity with the local
development plan, the budgetary ceilings prescribed by the local finance committee,
and the budgetary requirements and limitations prescribed under this Rule.
(d)
The budget proposal of offices or departments shall be divided into two (2)
parts:
(1)
Current Operating Expenditures; and
(2)
Capital Outlays.
(e)
The budget proposal 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
costs 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, 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 date for the last two (2) preceding fiscal years, and current and ensuing
fiscal years; and
(6)
Accomplishment reports for the last two (2) preceding and the current fiscal
years.
(f)
The budget proposal of the sanggunian shall be submitted in the same manner
and within the same period as those of the other offices or departments in the LGU.
Art. 414.
Preparation of Executive Budget. Upon receipt of the statement of
incomes and expenditures from the local treasurer, the budget proposals of the heads
of offices or departments, 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.
The local chief executive shall submit the executive budget to the sanggunian
concerned not later than the sixteenth (16th) day of October of the current fiscal year.
If the local chief executive fails to submit the budget within the prescribed date, he
shall be subject to such criminal and administrative penalties as provided under these
Rules and other applicable laws.
Art. 415.
Budget Authorization. (a) 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 LGU for the ensuing fiscal year on the
basis of the estimates of income and expenditures submitted by the local chief
executive.
In case the sanggunian concerned fails to pass the ordinance authorizing the annual
appropriations at the beginning of the ensuing fiscal year, the ordinance authorizing
the appropriations of the preceding year shall be deemed reenacted. The sanggunian
shall continue to hold sessions without additional remuneration for its members until
the ordinance authorizing the annual appropriations 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
reenacted budget shall remain in force and effect until such time that the ordinance
authorizing the annual appropriations is approved by the sanggunian concerned.
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.
In the implementation of the reenacted budget, the local treasurer concerned shall
exclude from estimates of income for the preceding year those realized from nonrecurring sources, like national aids, proceeds from loans, sale of assets, prior year
adjustments, and other analogous sources of income. National aids shall not include
the IRA of LGUs and their shares in the utilization and development of national
wealth.
No ordinance authorizing supplemental appropriations shall be passed in place of
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 receipt of such advice, make
necessary adjustments or reductions. The revised appropriations authorized by the
sanggunian concerned shall then be the basis for disbursements.
The local sanggunian may not increase the proposed amount in the executive budget
nor include new items except to provide for statutory and contractual obligations but
in no case shall it exceed the total appropriations in the executive budget.

(b)
Veto Power of the Local Chief Executive 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.
The local chief executive, except the punong barangay, shall exercise the power to
veto any particular item or items of an appropriations ordinance, or 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 cases, 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 provided
in Rule XVII of these Rules; otherwise, the item or items in the appropriations
ordinance of the previous year corresponding to those vetoed, if any, shall be deemed
reenacted.
Art. 416.
Effectivity of Budgets. (a) The ordinance enacting the annual budget
shall take effect at the beginning of the ensuing calendar year.
(b)
Supplemental budget shall take effect upon its approval or on the date fixed in
the ordinance.
The local chief executive shall be primarily responsible for the execution and
accountability for the annual and supplemental budgets.
Art. 417.
Changes in the Annual Budget. Changes in the annual budget may be
done through supplemental budgets.
No ordinance providing for a supplemental budget shall be enacted except for the
following:
(a)
When supported by funds actually available as certified by the local treasurer;
or by new revenue sources;
Funds actually available refers to the amount of money actually collected as certified
by the local treasurer during a given fiscal year which is over and above the realized
estimated income of that year. An appropriation ordinance providing for the
supplemental budget sourced out of funds actually available shall be enacted only
once during the fiscal year.
(b)
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 LGU or in other areas
declared in a state of calamity by the President. Such ordinance shall clearly indicate
the sources of funds available for appropriations, as certified under oath jointly by the
local treasurer and the local accountant and attested by the local chief executive, and
the various items of appropriations affected, and the reasons for the change.
Art. 418.
Reversion of Unexpected Balances of Appropriations; Continuing
Appropriations. (a) Unexpected balances of appropriations authorized in the
appropriations ordinance shall revert to the balance at the end of the fiscal year and
shall not thereafter be available for expenditure except by subsequent enactment.
Appropriations for capital outlays shall continue and remain valid until fully spent or
the project is completed.
(b)
Reversions of continuing appropriations shall not be allowed unless
obligations therefor have been fully paid or otherwise settled. Balances of continuing
appropriations shall be reviewed as part of the annual budget preparation. 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.
Continuing appropriations refer to appropriations available to support obligations for
a specified purpose or project, even when these obligations are beyond the budget
year.

Art. 419.
Budgetary Requirements. The budgets of LGUs 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
LGU concerned provided that the amount of appropriations for debt servicing shall
not exceed twenty percent (20%) of the regular income of the LGU concerned.
Regular income refers to the estimates of regular income for the budget year as
determined by the local finance committee.
(c)
In the case of provinces, cities, and municipalities, aid to barangays shall be
provided in amounts of not less than One thousand Pesos (P1,000.00) 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 unforseen expenditures arising from
the occurrence of calamities provided that such appropriation shall be used only in
the area or a portion thereof of the LGU, or other areas declared in a state of calamity
by the President.
Art. 420.
General Limitations. (a) The total appropriations, whether annual or
supplemental, for personal services of an LGU 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 or lower class
provinces, cities, and municipalities, of the total annual income from regular sources
realized in the next preceding fiscal year. The appropriations for salaries, wages,
representation and transportation allowances of officials and employees of public
utilities and economic enterprises owned, operated, and maintained by the LGU
concerned shall not be included in the annual budget and in the computation of the
maximum amount for personal services. The appropriations for personal services of
such economic enterprises shall be charged to their respective budgets. The
limitations prescribed herein shall apply only after the LGU shall have complied with
the implementation of RA 6758 or Salary Standardization Law for existing and
mandatory positions.
(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, 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 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 these Rules and 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 filing of such positions
shall be strictly made in accordance with 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 in this Article.
Art. 421.
Review of Appropriations Ordinances of Provinces, Highly-Urbanized
Cities and Independent Component Cities, and Municipalities within the
Metropolitan Manila Area. DBM shall review ordinances authorizing the annual or
supplemental appropriations of provinces, highly-urbanized cities, independent
component cities, and municipalities within MMA in accordance with the
immediately succeeding Article.
Art. 422.
Review of Appropriations Ordinances of Component Cities and
Municipalities. (a) The Sangguniang Panlalawigan shall review the ordinances
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.
(b)
If within ninety (90) days from receipt of copies of appropriations ordinances
of component cities and municipalities, 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 budgetary
requirements and limitations provided in this Rule, the sangguniang panlalawigan
shall, within the ninety-day period herein prescribed, declare such ordinance
inoperative in its entirety or in part. Items of appropriation contrary to limitations
prescribed in this Rule 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.
(c)
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 LGU.
Art. 423.
Preparation of Barangay Budgets. (a) Unless otherwise provided in this
Rule, 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 Rule.
Ten percent (10%) of the general fund of the barangay shall be set aside for the
sangguniang kabataan. The said ten percent (10%) share shall be appropriated and
administered by the sangguniang kabataan and shall be spent for the purposes
provided in Rule XXVII of these Rules except for personal services.
(b)
On or before the fifth (5th) day of September each year, the city or municipal
treasurer, jointly with the city or municipal accountant, shall issue a certified
statement covering the actual income of the past year and estimates of income of the
current and ensuing fiscal years from local sources for the barangay concerned. Based
on such certified statements, the barangay treasurer shall submit, on or before the
fifteenth (15th) day of September of each year, to the punong barangay a statement
covering the estimates of income and expenditures for the past, current, and ensuing
fiscal years.

(c)
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 Rule and submit the
annual barangay budget to the sangguniang barangay for enactment.
(d)
The total annual appropriations of a barangay for personal services, inclusive
of benefits provided under applicable laws 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.
(e)
The barangay budget including changes therein shall be subject to the same
budgetary requirements and limitations applicable to other local government
budgets.
(f)
The barangay ordinance enacting the annual budget shall take effect at the
beginning of the ensuing calendar year. An ordinance enacting a supplemental
budget shall take effect upon its approval or on the date fixed therein.
(g)
The punong barangay shall be primarily responsible for the execution of and
the accountability for the annual and supplemental budgets of the barangay.
Art. 424.
Review of Barangay Budgets. (a) Within ten (10) days from its
approval, copies of the barangay ordinance authorizing the annual appropriations
shall be furnished the sangguniang panlungsod or the sangguniang bayan, through
the city or municipal budget officer, as the case may be.
(b)
The sanggunian concerned shall review the barangay ordinance to ensure
compliance thereof with all the budgetary requirements and limitations provided in
this Rule.
(c)
If within sixty (60) days after receipt of the barangay ordinance the
sanggunian concerned takes no action thereon, said ordinance shall continue to be in
full force and effect. If within the same period the sanggunian concerned shall have
ascertained that the subject ordinance contains appropriations in excess of the
estimates of income duly certified as collectible, or that the same has not complied
with the established budgetary requirement, said ordinance shall be declared
inoperative in its entirety or in part. Items of appropriations contrary to or in excess
of any of the general limitations or the maximum amount prescribed in this Rule
shall be disallowed or reduced accordingly.
(d)
Within the established reglementary period, 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
in the form of a resolution or letter of review, as may be prescribed by the sanggunian
concerned, for proper and appropriate adjustments and corrections; in which case,
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 for the year in question shall have met the objections and
disallowances raised by the reviewing sanggunian.
Upon receipt of the review action on the budget, the barangay treasurer or the city or
municipal treasurer who has custody of the barangay funds shall not make further
disbursements from any items of appropriation declared inoperative, disallowed, or
reduced.
Art. 425.
Barangay Financial Procedures. (a) The barangay treasurer shall collect
taxes, fees, and other charges due and contributions accruing to the barangay. Official
Receipts shall be issued for all such collections.
(b)
When deputized by the provincial or city or municipal treasurer, the barangay
treasurer shall collect real property taxes and all other taxes as may be imposed by
the province, city, or municipality, as the case may be, due the barangay.

(c)
Within five (5) days after receipt of collections, the barangay treasurer shall
deposit all collections with the city, or municipal treasurer, or in the depository
account maintained in the name of the barangay.
(d)
The barangay treasurer may be authorized by the sangguniang barangay to:
(1)
Hold petty cash that shall not exceed twenty percent (20%) of the funds
available and to the credit of the barangay treasury; and
(2)
Make direct purchases amounting to not more than One Thousand Pesos
(P1,000.00) at any time for the ordinary and essential needs of the barangay.
(e)
The financial records of the barangay such as books of accounts, ledgers,
statements of income and expenditures, balance sheets, trial balances, and other
documents shall be kept in the office of the city or municipal accountant in a
simplified manner as may be prescribed by COA. The representatives of COA shall
audit the accounts and financial records of the barangay annually, or as often as may
be necessary, and shall submit an audit report thereon to the sangguniang
panlungsod or sangguniang bayan, as the case may be.
The COA shall prescribe simplified procedures for barangay finances within six (6)
months after approval of these Rules.
Art. 426.
Responsibility of the Department of Budget and Management and the
Commission of Audit. (a) The DBM, jointly with COA shall, within one (1) year from
the effectivity of these Rules, promulgate a Budget Operations Manual for LGUs to
improve and systematize methods, techniques, and procedures in local government
budget preparation, authorization, execution, and accountability.
(b)
The DBM shall promulgate such administrative issuances as may be needed
from time to time relative to the implementation of the provisions of this Rule.
(c)
The DBM shall, upon request of LGUs, extend technical assistance on local
government budgeting.
RULE XXXV
LOCAL GOVERNMENT SUPPLY AND PROPERTY MANAGEMENT
Art. 427.
Scope. This Rule shall govern the procurement, care, utilization,
custody, and disposal of supplies and the other aspects of supply management in an
LGU.
This Rule shall not cover direct purchase made by the barangay treasurer that may be
authorized by the sangguniang barangay pursuant to Article 101, Rule XVII of these
Rules.
Art. 428.
Definition of terms. (a) Lowest Complying and Responsible Bid refers
to the proposal of one who offers the lowest price and 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 designed or requisitioned;
(c)
Supplies include 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.

Art. 429.
General Rule in Procurement or Disposal. Except as otherwise
provided in this Rule, acquisition of supplies by LGUs shall be through competitive
public bidding. Supplies which have become unserviceable or are no longer needed
shall be sold, whenever applicable, at public auction, subject to applicable rules and
regulations.
The governor or city mayor, through the provincial or city general services officer,
respectively, and the municipal mayor or punong barangay, through the municipal or
barangay treasurer, shall provide for the efficient and effective property management
in an LGU.
Art. 430.
Procurement Organization. The office of the provincial or city general
services officer shall exercise the function of acquiring all necessary supplies for the
province and the city, respectively. The municipal treasurer and the barangay
treasurer shall exercise the same function for the municipality and barangay,
respectively.
Art. 431.
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 quantity of
supplies needed for the entire fiscal year, complete descriptions thereof as to kind,
quantity and quality, estimated cost, and the balance on hand. The total estimated
cost of the approved annual procurement program shall not exceed the total
appropriations authorized for the acquisition of supplies.
LGUs 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 or property shall be made
unless included in, or covered by, the approved procurement program.
(c)
The conversion of excess cash into supplies or stock is prohibited except to the
extent of the kind and quantity specified in the approved annual procurement plan.
(d)
A violation of this Article shall be a ground for suspension or dismissal of any
official or employee responsible therefor.
Art. 432.
Requisition Procedures. (a) Requirement of Requisition Any order for
supplies shall be filled by the provincial general services officer, the city general
services officer, the municipal treasurer or barangay treasurer, as the case may be, for
any office or department of LGU concerned only upon written requisition as
hereinafter provided.
(b)
Preparation of Requisition shall be prepared by the head of office or
department, or the punong barangay for the barangay, needing the supplies, who
shall certify as to their necessity for official use and shall specify the project or activity
where the supplies or property are to be used.
(c)
Certification on Existence of Appropriations Every requisition must be
accompanied by a request for obligation and allotment showing the certification of
the local budget officer, the local accountant, and the local treasurer that an
appropriation therefor exists; that the estimated amount of such expenditure has
been obligated; and that funds are available for the purpose, respectively.
In case of the barangays, every requisition must be accompanied by a request for
obligation and allotment showing the certifications of: the chairman of the committee
on appropriations or its equivalent of the sangguniang barangay that an
appropriation exists; the city or municipal accountant that the amount has been
obligated; and the barangay treasurer that funds are available for the purpose.
(d)
Forms to be Used Requisitions shall be accomplished using the following
forms:

(1)
Requisition and Issue Voucher (RIV) for supplies carried in stock; and
(2)
Purchase Request (PR) for supplies not carried in stock.
(c)
Approval of Requisitions Approval of requisition by the head of the 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 and
provided further that nothing herein contained shall be construed as authorizing the
purchase of furniture and equipment for stock purposes.
The punong barangay shall approve all requisitions of the barangay.
Art. 433.
Call for Bids. When procurement is to be made by LGUs, the provincial
general services officer or city general services officer, or the municipal treasurer, 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.
Art. 434.
Publication of Call for Bids. (a) The call for bids shall be given the
widest publicity possible, sending by mail or otherwise, any known prospective
participant in the locality, 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. The provincial general services
officer, or the city general services officer, or municipal treasurer, or barangay
treasurer, as the case may be, shall certify to the effect that these requirements have
been complied with.
(b)
The notice of the bidding may likewise be published in a newspaper of general
circulation in the territorial jurisdiction of LGU concerned when the provincial
general services officer, city general services officer, or the municipal treasurer, or the
barangay treasurer, as the case may be, deems it necessary in order to obtain the
lowest responsible and complying bid.
Unless otherwise directed by the committee on awards, publication shall be made at
least ten (10) calendar days prior to the opening of bids.
Art. 435.
Committee on Awards. (a) There shall be in every province, city, or
municipality a committee on awards which shall exercise exclusive jurisdiction in
deciding the winning bids and questions of awards on procurement and disposal of
supplies or property except in cases of procurement through emergency purchase, or
when the amortization is specifically vested by law in another body.
(b)
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
provincial general services officer, the city 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.
(c)
The committee on awards of the barangay shall be the sangguniang barangay.
(d)
In no case shall a National Government official sit as a member of the
committee on awards.
Art. 436.
Procedures on Awards. (a) Roster of Bidders The provincial general
services officer, the city general services officer, the municipal treasurer, or the

barangay treasurer, respectively, shall maintain a list of bonafide bidders in their

respective LGUs.
(b)
Obligations of Bidders Every bidder shall be presumed to know all terms and
conditions of the call for bid and shall assume all risks attendant thereto.
(c)
Quotations must be certain and definite in amount. Unless otherwise called
for in the call for bids, all quotations must be in Philippine currency inclusive of all
government taxes, fees, imposts, or duties, if any, and all incidental expenses.
The bidders shall state the period during which offer is good, which in no case shall
be less than sixty (60) days.
(d)
Submission of Bids On or before the time and date of opening of bids, the
bidders shall submit their bids in sealed envelopes to the offices of the provincial
general services officer and city general services officer or in the offices of the
municipal treasurer or barangay treasurer, as the case may be. Said offices shall
stamp thereon the time and date of receipt.
(e)
Opening of Bids All bids submitted shall be opened at the time, date and place
set in the call for bids by the committee on awards. Opening of bids shall be made
only in the presence of the provincial, city, or municipal auditor or his duly
authorized representative who shall initial and secure copies of the bids and certify
the abstract of the bidding.
Bidders or their representatives may witness the proceedings.
(f)
Acceptance of Bids and Awards. Award 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.
The results of the bidding shall be made public by posting the same in the provincial
capitol or city, municipal, or barangay hall, as the case may be.
(g)
Protest Against an Award A losing bidder may file with the committee on
awards a protest within ten (10) days from the date the winner was announced. The
protest shall be in writing based on justifiable grounds, accompanied with a protest
bond, either in cash, certified or cashier's check, or surety bond, in an amount
equivalent to ten percent (10%) of the total value involved. Within seven (7) days
from receipt of the protest, the committee on awards shall render its decision.
Art. 437.
Procurement Without Public Bidding. The procurement of supplies
may be made without the benefit of public bidding under any of the following modes:
(a)
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 merchants or suppliers in the locality by a committee of three
(3) composed of the provincial or city 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 through personal canvass under this paragraph shall not exceed the
amounts specified hereunder for all items in any one (1) month for each LGU:
Provinces and Cities, and Municipalities within MMA:
First and Second Class One Hundred Fifty Thousand Pesos (P150,000.00);
Third and Fourth Class One Hundred Thousand Pesos (P100,000.00);
Fifth and Sixth Class Fifty Thousand Pesos (P50,000.00);
Municipalities outside MMA:
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);
Barangays in Cities, in Municipalities within the MMA, and in
other Metropolitan Subdivisions as may be created by law Ten

Thousand Pesos (P10,000.00);

All other barangays Five Thousand Pesos (P5,000.00).
(b)
Emergency Purchase
(1)
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, LGUs may, though 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 Article
shall be made within ten (10) days after placement thereof. Immediately after the
emergency purchase or repair order is made, the head 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:
(i)
Complete description of the supplies acquired or work done or to be
performed;
(ii)
By whom furnished or executed;
(iii) Date of placing the order and date and time of delivery or execution;
(iv) Unit price and total contract price;
(v)
Brief and concise explanation of the circumstances why procurement was of
such urgency that the same could not be done through regular course without
involving danger to, or loss of, life or property;
(vi) Certification of the provincial general services officer, city general services
officer, municipal treasurer, 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
(vii) Certification of the local budget officer as to the existence of appropriations for
the purpose, of the local accountant as to the obligation of the amount involved, and
of the local treasurer as to availability of funds.
(2)
The goods or services procured in case of emergency must be utilized or
availed of within fifteen (15) days from the date of delivery or availability.
(3)
Without prejudice to criminal prosecution under applicable laws, the local
chief executive or the head of office making the procurement shall be administratively
liable for any violation of the provisions on emergency purchase and shall be a
ground for suspension or dismissal from service.
(c)
Negotiated Purchase
(1)
In cases where public biddings have failed for two (2) consecutive times and no
suppliers have qualified to participate or win in the biddings, LGUs may, through the
local chief executive, undertake the procurement of supplies by negotiated purchase,
regardless of amount, without public bidding provided that the contract covering the
negotiated purchase shall be approved by the sanggunian concerned. Delivery of
purchase orders or utilization of repair orders shall be made within seven (7) days
after placement thereof. 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:
(i)
Complete description of the supplies acquired or the work done or to be
performed;
(ii)
By whom furnished or executed;
(iii) Date of placing the order and date and time of delivery or execution;
(iv) Unit price and total contract price;
(v)
Certification of the provincial general services officer, city general services
officer, municipal treasurer, or barangay treasurer, as the case may be, to the effect
that the price or contracted for was the lowest at the time of procurement; and
(vi) Certification of the local budget officer as to the existence of appropriations for
the purpose; of the local accountant as to the obligation of the amount involved; and
of the local treasurer as to availability of funds.

(2)
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 and provided further, that the same
terms and conditions of sale are obtained for the same repeat order.
(d)
Procurement from Duly Licensed Manufacturers Procurement of supplies or
property may be made directly from duly licensed manufacturers in cases of supplies
of Philippine manufacture or origin. The manufacturer must be able to present proof
showing that it is a duly licensed manufacturer of the desired product.
In case there are two (2) or more known manufacturers of the required supplies or
property, canvass of prices of the known manufacturers shall be conducted to obtain
the lowest price for the same quality of said supplies or property.
The award for the procurement of supplies or property from duly licensed
manufacturers shall be made by the committee on awards.
(e)
Procurement from Exclusive Philippine Agents or Distributors
(1)
Procurement of supplies or property of foreign origin may preferably be made
directly from the exclusive or reputable Philippine agents or distributors under the
following terms and conditions:
(i)
That the Philippine agent or distributor has no subagents or sub-dealers
selling at lower prices; and
(ii)
That no suitable substitutes of substantially the same quality are available at
lower prices.
(2)
The award for the procurement of supplies from exclusive Philippine agents or
distributors shall be made by the committee on awards.
(f)
Procurement from Government Entities
(1)
Government entities that are possible sources of supplies or property may be
requested to fill the needs of LGUs. Procurement procedures established by these
entities shall be observed.
(2)
Prior authority from the Office of the President shall be secured in cases of
procurement from units or agencies of foreign governments with which the
Philippines maintains diplomatic relations.
Art. 438.
Archival System. Upon the effectivity of these Rules, every LGU 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 report, land assessments, land ownership,
tax payments, tax accounts, business permits, and such other records or documents
of public interest in the various offices and departments in the province, city, or
municipality, and the barangay concerned.
Art. 439.
Primary and Secondary Accountability for Government Property. (a)
The head of office or department of a province, city, or municipality or the punong
barangay, shall be primarily accountable for all supplies and property assigned or
issued to his office or department. The person or persons entrusted with the
possession or custody of supplies and property under the primary accountability of
the head of an office or department shall be immediately accountable to said officer.
(b)
The head of an office or department primarily accountable for government
property may require the person in possession 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.
(c)
It shall be the duty of every head of an office or department to keep a complete
record of all supplies and property under his charge and render his accounts thereof
semi-annually to the provincial or city general services officer or the municipal mayor
or punong barangay, as the case may be. The municipal or barangay treasurer, as the
case may be, shall be furnished with a copy of said report.

(d)
Buildings and other physical structures shall be under the accountability and
responsibility of the provincial or city general services officer, municipal mayor or
punong barangay, as the case may be. He shall keep a separate and updated record of
these properties and shall submit an inventory report to the provincial, city, or
municipal auditor on or before the fifteenth (15th) day of January each year showing,
among other things, the condition of said properties.
Art. 440.
Responsibility for Proper Use and Care of Government Property. The
person in actual physical possession of or entrusted with the custody or control of
supplies or property shall be responsible for the proper use and care of the same and
shall exercise due diligence in the utilization and safekeeping thereof. He shall
likewise keep a complete and updated record of such supplies and property and shall
render an account thereof semi-annually to the head of office or department
concerned.
Art. 441.
Measure of Liability of Persons Accountable for Government Property.
(a) The person in possession of or having custody or control of supplies or property
shall be liable for its money value in case of illegal, improper, or unauthorized use or
misapplication thereof, by himself or any other person whose acts he may be
responsible for, and shall be liable for all loss, damage, or deterioration occasioned by
negligence in the keeping or use of such property, unless it is proven 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 supplies or property for which he is accountable. 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 local security unit shall be
held liable therefor.
Art. 442.
Credit for Loss Occurring in Transit or Due to Casualty. (a) When loss
of government property occurs in transit or is caused by fire, theft, force majeure, or
other casualty, it shall be the duty of the officer accountable therefor or having
custody thereof to immediately notify simultaneously within thirty (30) days from
such loss, the office or department head and the provincial, city, or municipal auditor
concerned. The office or department head shall immediately conduct an investigation
of the loss and refer the matter to the proper government investigating agency. The
provincial, city, or municipal auditor shall conduct a separate inquiry of the reported
loss while the clues are still fresh to determine that the alleged loss or other casualty
had really occurred. An officer or employee who fails to comply with these
requirements shall not be relieved of liability or allowed credit for any of such loss in
the settlement in his accounts.
(b)
The request for relief shall be filed with the provincial, city, or municipal
auditor by the accountable officer within the statutory period of thirty (30) days or of
such longer period as may be allowed by the auditor. The request shall be
accompanied by the following documents:
(1)
Affidavit of the accountable officer containing a statement of the facts and
circumstances of loss;
(2)
Affidavit of two (2) disinterested persons cognizant of the facts and
circumstances of loss;
(3)
Final investigation report of the office or department head and proper
government investigating agency;

(4)
A list and description including book value, date of acquisition, property
number, account classification, condition of the property, and other additional
relevant information of the properties lost duly certified by the provincial general
services officer, city general services officer, municipal treasurer, or barangay
treasurer, as the case may be.
For this purpose, the request for relief shall be coursed through the office or
department head concerned and the provincial general services officer, city general
services officer, municipal treasurer, or barangay treasurer, as the case may be.
(c)
In case of bulk losses of property pertaining to more than one office or
department, the request for relief shall be made by the local general services officer or
local treasurer concerned. The request shall also be accompanied by the latest
inventory report preceding the loss and the inventory report of properties remaining
after the loss, duly witnessed by the provincial, city, or municipal auditor concerned.
(d)
The same officials shall request relief for losses occurring in transit.
(e)
In all cases, the request shall be endorsed by the local chief executive, together
with his recommendations, to the provincial, city or municipal auditor.
(f)
Credit for losses shall be returned, through the local chief executive, to the
local accountant who shall on account thereof, drop the lost properties from the
books of accounts through journal voucher attaching thereto the credit granted,
together with all supporting documents. The local accountant shall furnish the
provincial general services officer, city general services officer, municipal treasurer,
or barangay treasurer, as the case may be, and the accountable officer concerned a
copy of the journal voucher.
(g)
A provincial, city, or municipal auditor shall not allow credit for these losses
unless so expressly authorized by COA, to be exercised only if the loss is not in excess
of Fifty Thousand Pesos (P=50,000.00). In the event that 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 COA Chairman for his appropriate action.
Art. 443.
Property Clearances. When an employee transfers to another
government offices, retires, resigns, is dismissed, or is separated from the service, he
shall be required to secure supplies or property clearance from the supply officer
concerned, the provincial or city general services officer concerned, the municipal
mayor and the municipal treasurer, or the punong barangay and the barangay
treasurer, as the case may be. The local chief executive shall prescribe the property
clearance form for this purpose.
Art. 444.
Modes of Disposition of Property. As a general rule, sale of property
owned by the LGU shall be made only through public auction. Other modes of
disposal may be resorted to only when public auction has failed.
(a)
Public Auction When the property of an LGU has become unserviceable for
any cause, or is no longer needed, the officer immediately accountable therefor shall
return the same to the head of the office or department who shall cancel the
corresponding Memorandum Receipt. If no longer needed in the office or
department, the head of the office or department shall return the same to the
provincial or city general services officer, municipal treasurer, or barangay treasurer,
as the case may be, with the use of Property Return Slip. The provincial or city
general services officer, municipal or barangay treasurer, as the case may be, shall,
through the local chief executive, file an application for its disposal through an
Inventory and Inspection Report with the provincial, city, or municipal auditor for
inspection and determination whether the subject property is with or without value.
If a property of an LGU has become unserviceable for any cause or is no longer
needed but is found to be still valuable, the provincial, city or municipal auditor shall

indicate his findings in the Inventory and Inspection Report and forward the same to
the committee on awards. The subject property shall then 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 public auction shall be posted in at least three (3)
conspicuous and publicly accessible places. If the acquisition cost exceeds One
Hundred Thousand Pesos (P100,000.00) in the case of provinces and cities, and Fifty
Thousand Pesos (P50,000.00) in the case of municipalities, notices of auction shall
be published at least two (2) times within a reasonable period in a newspaper of
general circulation in the locality.
The provincial or city general services officer or the municipal or barangay treasurer,
as the case may be, shall be responsible for disposal of supplies or property of the
LGU.
The local chief executive shall be responsible for the disposal of real property,
building and other physical structures.
(b)
Sale through Negotiation Supplies and property no longer needed may be
disposed of through private sale at such price as may be determined by the committee
on awards, subject to the approval of COA or its duly authorized representative when
the acquisition or transfer cost of the property exceeds Fifty Thousand Pesos
(P50,000.00) in the case of municipalities or barangays.
In case of real property, disposal shall be subject to the approval of COA regardless of
the value or cost involved.
(c)
Transfer without Cost to Other Offices or Departments or Other Government
Agencies 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 LGU at an appraised valuation determined by
the committee on awards. Such transfer shall be subject to the approval of the
sanggunian concerned making the transfer and by the head of the office, agency,
subdivision, instrumentality or LGU receiving the property.
(d)
By Destruction When property of an LGU has become unserviceable for any
cause or is no longer needed, it shall, upon application of the head of the office or
department 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 COA Chairman, and if found valueless or unusable, shall be destroyed either by
burning, pounding, throwing beyond recovery, and the like, in the presence of the
auditor.
Art. 445.
Tax Exemption Privileges of Local Government Units. LGUs shall be
exempt from payment of duties and taxes for the importation of heavy equipment or
machinery 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 that such equipment or
machinery shall not be disposed of, either by public auction or negotiated sale as
provided in this Rule, within five (5) years from the importation thereof. In case the
equipment or machinery is sold within 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.
For the effective implementation of this Article, the DOF shall issue the necessary
procedures in the availment of tax exemption privileges on importation by LGUs of
heavy equipment or machinery 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.
Art. 446.
Implementing Rules and Regulations. The COA shall promulgate the
rules and regulations on supply and property management of LGUs to effectively

implement the provisions of this Rule, including requirements as to testing,

inspection, and standardization of supplies and property.
RULE XXXVI
OTHER FISCAL MATTERS
Art. 447.
Scope. This Rule shall govern the conduct and management of financial
affairs, transactions, and operations of provinces, cities, municipalities, and barangay
not treated in Rules XXX, XXXI, XXXII, XXXIII, XXXIV, and XXXV of these Rules.
Art. 448.
Local Funds and Special Funds. (a) Local Funds Every LGU 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 LGU 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.
(b)
Special Funds There shall be maintained in every provincial, city, or municipal
treasury the following special funds which shall be deemed automatically
appropriated for purposes indicated therefor:
(1)
Special Education Fund shall consist of the respective shares of provinces,
cities, municipalities, and barangays in the proceeds of the additional tax on real
property to be appropriated to purposes prescribed in Article 327, Rule XXXI of these
Rules; and
(2)
Trust Funds shall consist of private and public monies which have officially
come into the possession of the LGU 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 LGU.
Art. 449.
Remittance of Government Monies to the Local Treasury. Officers of
LGU 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 LGU which shall be credited to the particular account or accounts to which
the monies in question properly belong.
Art. 450.
Separation of Books and Depository Accounts. Local accountants and
local treasurers shall maintain separate books and depository accounts, respectively,
for each fund in their custody or administration under such rules and regulations as
COA may prescribe.
Art. 451.
Depository Accounts. Local treasurers shall maintain depository
accounts in the name of their respective LGUs with banks, preferably governmentowned, located in or nearest their respective areas of jurisdiction. Earnings of each
depository account shall accrue exclusively thereto.
Art. 452.
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.
Art. 453.
Special Accounts to be Maintained in the General Fund. LGUs 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 LGU concerned in the IRA
and such other special accounts which may be created by law or ordinance.
Receipts, transfer, 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 LGU concerned.
Art. 454.
Expenditures, Disbursements, Accounting, and Accountability. (a)
Prohibition Against Expenditures for Religious or Private Purposes No public money
shall be appropriated or applied for the benefit of any religious sect or activity not any
undertaking or purpose private in character.
(b)
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. 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.
For purposes of this Article, savings and augmentation shall mean:
(1)
Savings refer to portions or balances of any programmed appropriation free
from any obligation or encumbrance still available after the satisfactory completion
or unavoidable discontinuance or abandonment of the work, activity or purpose for
which the appropriation is authorized, or arising from unpaid compensation and
related costs pertaining to vacant positions and leaves of absence without pay.
(2)
Augmentation implies the existence in the budget of an item, project, activity
or purpose with an appropriation which upon implementation or subsequent
evaluation of needed resources is determined to be deficient.
(c)
Restrictions upon Limit of Disbursements in accordance with appropriations
in the approved annual budget may be made from any local fund in the custody of the
local 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 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.
(d)
Disbursements of Appropriations for Development Projects. Art. 391 of Rule
XXXII of these Rules mandate each LGU to appropriate their share in the proceeds
from the development and utilization of the national wealth to finance local
development and livelihood projects, respectively.
Disbursements from such special accounts under the General Fund shall proceed
from itemized appropriations in the budgets of LGU instead of by lumpsum. Such
itemized appropriations shall be for specific development projects/activities
embodied in the local development plan and/or public investment program
formulated and prioritized by the Local Development Council and approved by the
sanggunian concerned. Provided also that copies of the development plan of LGU
shall be furnished DILG and that at least eighty (80) percent 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 LGUs where
such a source of energy is located.

Appropriation for development projects shall not include those for personal services
including salaries standardization except for contractual employees who may be, if
necessary, contracted coterminous with and compensation, against the project,
subject to budget and COA rules and regulations.
Development projects, activities for this purpose, are those component
project/activity incidental to the efficient and effective provision of the basic services
and facilities enumerated in Rule of these Rule and for the preservation and
enhancement of the indigenous resources of wealth of the LGU from which share is
derived, as the case may be.
(e)
Prohibitions Against Advance Payments No money shall be paid on account of
any contract under which no services have been rendered or goods delivered.
(f)
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 COA may prescribe.
(g)
Persons Accountable for Local Government Funds Any officer of the LGU
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 this Rule. 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.
(h)
Prohibitions Against Pecuniary Interest Without prejudice to criminal
prosecution under applicable laws, any local treasurer, local accountant, local budget
officer, or other accountable local officer having any pecuniary interest, direct or
indirect, in any contract, work or other business of the LGU of which he is an
accountable officer shall be administratively liable therefor.
(i)
Liability for Acts Done Upon Direction of Superior Officer, or Upon
Participation of Other Officer or Department Heads or Officers of Equivalent Rank
Unless he registers his objection in writing, the local treasurer, local accountant, local
budget officer, or other accountable local 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 office or department heads or officers of
equivalent rank. The superior officer directing, or the office or 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, local
accountant, local budget officer, or other accountable local officer for the sum or
property so illegally or improperly used, applied or deposited.
(j)
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.
(k)
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 office or department
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 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 office or department head, the
officer next-in-rank shall automatically perform his function and he shall be fully
responsible therefor.
(l)
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.
(m) Disbursements of Local Funds and Statements 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
COA. In the case of the year-end statement of accounts, the period shall be sixty (60)
days after the thirty-first (31st) of December.
(n)
Rendition of Accounts Local treasurers, local accountants and other
accountable local officers shall render their accounts within such time, in such form,
style, and content and under such regulations as COA may prescribe.
Provincial, city, and municipal auditors shall certify the balances arising in the
accounts settled by them to the COA Chairman and to the local treasurer, local
accountant, and other accountable local 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.
(o)
Auditorial Visitation The books, accounts, papers, and cash of local treasurer,
local accountant, local budget officer, or other accountable local officers shall at all
times be open for inspection of COA 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 COA, 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 the said officer is
likewise under investigation, the auditor shall take full possession of 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.
(p)
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.
(q)
Accounting for Obligations All lawful expenditures and obligations incurred
during a fiscal year shall be taken up in the accounts of that year.
(r)
General Liability for Unlawful Expenditures of funds or use of property in
violation of the applicable provisions of these Rule and other laws shall be a personal
liability of the official or employee responsible therefor.
(s)
Posting of the Summary of Income and Expenditures Local treasurers, local
accountants, local budget offices, and other accountable local officers shall, within

thirty (30) days from the end of each fiscal year, post in at least three (3) conspicuous
and publicly accessible places in the LGU a summary of all revenues collected and
funds received including the appropriations and disbursement of such funds during
the preceding fiscal year.
Art. 455.
The Official Fiscal Year. The official fiscal year of LGUs shall be the
period beginning with the first (1st) day of January and ending with the thirty-first
(31st) day of December of the same year.
Art. 456.
Administrative Issuances, Local Treasury Operations Manual. The
DOF, jointly with the Chairman of COA, shall within one (1) year from the effectivity
of the Code, promulgate a Treasury Operations Manual for LGUs.
RULE XXXVII
DEBT RELIEF FOR LOCAL GOVERNMENT UNITS
Art. 457.
Scope. This Rule shall govern the granting of debt relief for provinces,
cities and municipalities.
Art. 458.
Coverage. Debt relief for LGUs shall cover the following:
(a)
All debts owed by LGUs to the National Government arising from statutory
contributions to the Integrated National Police Fund, the Special Education Fund,
and the hospital fund.
(b)
National government shares in taxes, fees, and charges collected by LGUs that
have been unremitted as of December 31, 1991.
(c)
Program loans, either secured to LGUs by NGAs and which were relent to
private persons, natural or juridical, or granted to LGUs by NGAs and which were
utilized by LGUs for community development, livelihood, and other small-scale
projects.
(d)
Debts due to GFIs, GOCCs and private utilities that are outstanding as of
December 31, 1988.
Art. 459.
Limitations. Debt relief shall not apply to the following:
(a)
Statutory contribution of the cities and municipalities of MMA to the
Metropolitan Manila Authority that have accrued as of December 31, 1991.
Beginning calendar year 1992, cities and municipalities within MMA are no longer
required to make such contributions to the Metropolitan Manila Authority.
(b)
Foreign loans or indebtedness of LGUs arising from loan contracts or project
agreements entered into with foreign countries or international lending institutions
and agencies.
(c)
National taxes collected by the local treasurer that accrue in full to the
National Government.
(d)
Debts incurred or contracted by LGUs from GFIs, GOCCs, and private utilities
after December 31, 1988, which shall be settled by the LGU concerned. For this
purpose, repayments of outstanding obligations which are covered by existing
withholding agreement shall continue to be deducted from the IRA share of debtorLGU.
(e)
Obligations to the Home Development Mutual Fund (Pag-IBIG), Medicare,
and those pertaining to premium contributions and amortization payment of salary
and policy loans to the Government Service Insurance System.
Art. 460.
Manner of Settlement. (a) Subject to limitations provided under this
Rule, all unremitted national collections and statutory contributions and program
loans shall be written off in full provided that NGA tasked with the implementation of
program loans secured by LGU which were relent to private persons, natural or
juridical, shall continue to collect from debtors belonging to the private sector
concerned.

(b)
The National Government shall assume all debts incurred or contracted by
LGUs from GFIs, GOCCs, and private utilities that are outstanding as of December
31, 1988, in accordance with the following schemes:
(1)
The National Government may buy outstanding obligations incurred by LGUs
from GFIs at a discounted rate.
(2)
The National Government may settle obligations due GOCCs at a discounted
rate through offsetting, only to the extent of the obligations of LGUs against the
outstanding advances made by the National Treasury in behalf of the GOCC
concerned.
(3)
The National Government may settle debts due private utilities at a discounted
rate by offsetting against the outstanding obligations of such private utilities to
GOCCs. GOCCs may in turn offset these obligations against the outstanding advances
made by the National Treasury in their behalf.
In the case of obligations owed by LGUs to private utilities which are not indebted to
any GOCC or NGA, the National Government may instead buy the obligations of
LGUs from the private utilities at a discounted rate, upon concurrence by the private
utilities concerned.
Art. 461.
Recovery Schemes for the National Government. (a) LGUs 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 LGUs. These outstanding obligations shall be restructured and an
amortization schedule prepared, based on the capability of LGU to pay.
(b)
The National Government shall be authorized to deduct from the quarterly
share of each LGU in internal revenue allotments an amount to be determined on the
basis of the amortization schedule of LGU concerned provided that such deduction
shall not exceed five percent (5%) of the monthly internal revenue allotment of LGU
concerned.
(c)
As incentive to debtor-LGUs to increase fiscal management efficiency, the
National Government shall write off outstanding debts of LGUs at the rate of five
percent (5%) for every one percent (1%) increase in revenues generated by LGU over
the collections of the preceding year. For this purpose, the annual increase in local
revenue collections shall be computed starting from the year 1988.
Art. 462.
Appropriations. Such amount as may be necessary to implement the
provisions of this Rule shall be included in the annual General Appropriations Act.
Art. 463.
Implementation. The Development Budget Coordinating Committee
through the Task Force on debt relief created under DBCC Order No. 2 dated
September 18, 1990, in consultation with the presidents of the leagues of provinces,
cities and municipalities, shall prepare and implement a debt relief program for LGUs
and issue such guidelines as may be necessary for the effective implementation of this
Rule.
RULE XXXVIII
MONITORING SYSTEM FOR THE IMPLEMENTATION OF THE LOCAL
GOVERNMENT CODE OF 1991
Art. 464.
Mandate. Pursuant to the Code, the Oversight Committee shall
supervise the transfer of such powers and functions mandated under the Code to the
LGUs, 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.
The Code likewise provides that the Congress shall conduct a mandatory review of the
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.
Art. 465.
Installation and Purpose of a Monitoring System. There shall be
established a monitoring system for the implementation of the code to hasten the
decentralization process, support the oversight committee in the supervision of the
transfer of powers and functions from the national government agencies to local
government units and provide valuable information to promote local autonomy.
Art. 466.
Organization and Responsibility. There shall be established from the
national to the local levels an organization responsible for the operationalization of
the monitoring system. For this purpose, the DILG shall be the lead agency of the said
organization composed of the following:
(a)
National
(1)
Department of the Interior and Local Government
(2)
Department of Finance
(3)
Department of Budget and Management
(4)
Senate
(5)
House of Representatives
(6)
League of Provinces
(7)
League of Cities
(8)
League of Municipalities
(9)
Liga ng mga Barangay
(10) Commission on Audit
(11) Civil Service Commission
(12) National Government Agencies affected by Devolution
(b)
Regional All national government agencies represented at the national
organization of the monitoring system.
(c)
Province, City, and Municipality All provincial, city, and municipal field
offices of the DILG and NGAs affected by devolution.
A National Secretariat for the monitoring system shall be created in the DILG.
Art. 467.
Target Users and Their Information Requirements. The target users of
the monitoring system are the Oversight Committee, the NGAs concerned, the
Congress, and the LGUs.
The information requirements of the target users cover the following areas:
(a)
Transfer of personnel, assets, projects, funds, and records corresponding to
the devolved functions;
(b)
Deconcentration of requisite authority and power of national government
agencies from their central offices to appropriate regional and field offices;
(c)
Mandated fund allocations to LGUs;
(d)
Reorganization of LGUs and affected NGAs;
(e)
Formation and operation of local special bodies;
(f)
Compliance with established standards, guidelines, systems and procedures;
(g)
LGU participation in the planning and implementation of national projects;
(h)
NGO-LGU joint ventures and cooperative programs or undertakings;
(i)
Grants, aids, and subsidies given to LGUs; and
(j)
Other relevant information.
Art. 468.
Funding. Funds for the implementation of the monitoring system shall
be taken the appropriations of the DILG. Other national government agencies may
augment funds out of their savings. Likewise, the LGUs may set aside funds for this
purpose from any available local funds.
Art. 469.
Implementation. The monitoring system shall be implemented upon
approval of these Rules.
The national organization shall provide the monitoring network with module
specifications, implementation strategy, and timetable.

RULE XXXIX
MISCELLANEOUS AND FINAL PROVISIONS
Art. 470.
Inventory of Infrastructure and Other Community Facilities. (a) Every
LGU shall conduct a periodic inventory of infrastructure and other community
facilities and undertake the maintenance, repair, improvement, or reconstruction of
these facilities through a closer cooperation among the NGAs operating within the
province, city, municipality, or barangay concerned.
(b)
No infrastructure or community project within the territorial jurisdiction of an
LGU shall be undertaken without informing the local chief executive and the
sanggunian concerned.
Art. 471.
Liability for Damages. As provided in Article 2189 of RA 386, otherwise
known as the Civil Code of the Philippines, as amended, provinces, cities, and
municipalities shall be liable for damages for the death of, or injuries suffered by, any
person by reason of the defective condition of roads, streets, bridges, public
buildings, and other public works under their control or supervision. The extent of
liability for damages shall be governed by the provisions of the Civil Code on quasidelicts.
Art. 472.
Failure to Post and Publish the Itemized Monthly Collections and
Disbursements. Failure by the local treasurer or the local accountant to post the
itemized monthly collections and disbursements of the LGU concerned, within ten
(10) days following the end of every month and for at least two (2) consecutive weeks
at prominent places in the provincial capitol, or city, municipal or barangay hall, its
plaza and main street, and to publish said itemization in a newspaper of general
circulation, where available, in the territorial jurisdiction of the LGU concerned, shall
be punished by imprisonment not exceeding one (1) month or a fine not exceeding
Five Hundred Pesos (P500,00), or both such imprisonment and fine, at the discretion
of the court.
Art. 473.
Separability Clause. If, for any reason or reasons, any part or provision
of these Implementing Rules and Regulations shall be held unconstitutional or
invalid, other parts or provisions thereof which are not affected thereby shall
continue to be in full force and effect.
Art. 474.
Repealing Clause. (a) Except as otherwise provided in the Code, the
following are repealed:
(1)
BP 337, EO 112, series of 1987, and EO 319, series of 1988;
(2)
PDs 684, 1191, 1508, and such other decrees, orders, instructions, memoranda,
and issuances related to or concerning the barangay;
(3)
The provisions of Sections 2,3, and 4 of RA 1939 regarding hospital fund;
Section 3, a(3) and b(2) of RA 5447 regarding the special education fund; PD 144, as
amended by PDs 559 and 1741; PD 231, as amended; PD 436, as amended by PD 558;
and PDs 381, 436, 464, 477, 526, 632, 752, and 1136; and
(4) PD 1594 insofar as it governs locally-funded projects.
(b)
Insofar as they are inconsistent with the provisions of the Code, the following
are repealed, amended, or modified accordingly:
(1)
Sections 2, 16, and 29 of PD 704; Section 12 of PD 87, as amended; Sections
52, 53, 66, 67, 68, 69, 70, 71, 72, 73, and 74 of PD 463, as amended; and Section 16 of
PD 972, as amended; and
(2)
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 the Code.
Art. 475.
Effectivity. These Rules shall take effect upon publication thereof in a
newspaper of general circulation.

The foregoing Implementing Rules and Regulations of the Local Government Code of
1991 consisting of 250 pages including this page are being issued in compliance with
Section 533 of the Code.
Approved: February 21, 1992
RULES AND REGULATIONS ON SUPPLY AND PROPERTY MANAGEMENT
Title I GENERAL PROVISIONS
Rule 1. Title and Definitions
Sec. 1. Authority. Pursuant to Section 383 of Republic Act No. 7160, otherwise
known as the Local Government Code of 1991, these rules and regulations providing
for an improved system of procurement, care, utilization, custody, and disposal of
supplies and property in the local governments are hereby prescribed.
Sec. 2. Title. These rules and regulations shall be known as: Rules and Regulations on
Supply and Property Management in the Local Governments.
Sec. 3. Applicability. These rules and regulations shall apply to all provinces, subprovinces, cities, municipalities and barangays. These shall also apply to the
Autonomous Region in Muslim Mindanao, the Cordillera Administrative Region and
the Metropolitan Manila Authority until such time that a separate set of rules and
regulations on the subject is prescribed for these regional governments and the
Metropolitan Manila Authority.
Sec. 4. Definitions of Abbreviations and Terms. For purposes of these rules and
regulations, the following abbreviations and terms are hereby defined:
"Annual Procurement Plan" refers to the itemized list prepared by the head of the
department or office showing the kind, estimated quantity, estimated cost,
description of supplies or property together with the balance on hand, if any, required
by the department or office for the ensuing fiscal year.
"Annual Procurement Program" refers to the itemized list prepared by the local chief
executive showing the kind, estimated quantity, estimated cost, description of
supplies together with the balance on hand, if any, required by the local government
for the ensuing fiscal year. The annual procurement program shall essentially be
based on the annual procurement plan.
"Amendatory Procurement Plan" is the itemized list prepared by the head of the
department or office showing the required supplies in a fiscal year in lieu of those
deleted, canceled or substituted in the approved annual procurement plan. The
amendatory procurement plan shall be supported by a written justification.
"Amendatory Procurement Program" refers to the itemized list prepared by the
general services officer or local treasurer, as the case may be, for the approval of the
local chief executive showing the required supplies in a fiscal year in lieu of those
deleted, canceled or substituted in the approved annual procurement program. The
amendatory procurement program shall be supported by amendatory procurement
plan.
"Appraised Value" refers to the estimated value of disposable property after
inspection taking into account its condition, usability and other factors.
"Award" is the decision of the Committee on Awards as to who among the suppliers
shall get the order or contract.
"Beyond Economical Repair" refers to the condition of the supplies when the cost of
repairing becomes prohibitive and disadvantageous to the government or when the
cost to repair an item is over sixty per cent (60%) of the acquisition cost.
"Bidder's Bond" is a bond in cash, certified or cashier's check or surety required of
bidders before they can participate in any competitive bidding, to guarantee in good
faith the submission of their tenders and acceptance of all the terms and conditions
thereof.

"Bona-Fide Bidder" is a registered merchant licensed as manufacturer, producer,

regular dealer or service establishment with reputable establishment for at least three
(3) months prior to the public bidding he intends to participate in.
"Canvass, Sealed" is one wherein an offer is received by the authorized official in a
sealed envelope or the like.
"Care" refers to the proper use and maintenance of supplies or property; the act of
giving attention, interest and safety to supplies or property.
"Condemnation" is the act of destroying valueless supplies or property by burning,
pounding, throwing beyond recovery, or the like.
"Custody" refers to the actual or constructive possession or control of supplies or
property.
"Defective Bid" is a bid which complies with the advertised descriptions and
specifications but not with the terms and conditions in the invitation to bid.
"Department or Office" is a principal sub-division of a local government unit defined
in RA No. 7160 and national offices authorized to receive augmentation of their
supply requirement from the local government unit concerned.
"Disposable Property" is a property reported for disposition by a department or
office.
"Disposal" refers to the act of parting with, alienation of, or giving up of supplies or
property.
"Economically Repairable" refers to that condition of supplies or property which can
still be repaired or rehabilitated at a reasonable cost or that in which the cost of repair
or rehabilitation would not exceed sixty per cent (60%) of the acquisition cost of the
item to be repaired/rehabilitated. Changes in monetary rates should be considered in
the computation of cost.
"Emergency" refers to any event or occurrence wherein the need for supplies or
property has become exceptionally urgent or absolutely indispensable and only to
prevent imminent danger to, or loss of, life or property.
"Enormity of Order" refers to that circumstance wherein the supplies or property to
be delivered exceed the normal requirement or is out of proportion to the usual
volume of orders.
"Equipment" refers to all articles needed to outfit an individual or organization which
do not lose their identify when used or applied. The term refers to typewriters, adding
machines, computers, printers, vehicles, weapons and other similar items.
"Excess Property" is a property no longer needed by a department or an office.
"Expendable Supplies" refer to articles which are consumed in use, such as
ammunition, fuel, forage, drugs, medicines, and such spare or repair parts as are used
to repair or complete other articles and which thereby lose their identity in the
process.
"General Bond" is a combination of bidder's bond and a performance which may be
in cash, certified or cashier's check.
"Habitual Delinquent" refers to a contractor/supplier who fails to abide by or comply
with terms and conditions of his contract for two (2) or more times within a period of
one (1) year.
"Improvement" refers to a valuable addition made to property or an amelioration in
its condition amounting to more than mere repairs intended to enhance its value,
beauty or utility or to adopt it for new or further purposes.
"Immediate Accountability" refers to the accountability of a person in possession of
or having custody of supplies or property.
"Inventory" is an itemized list of supplies or property on hand containing designation
or description of each specific article with its valuation.

"Issue Slip" is the document used as evidence in the transfer of non-consumable

supplies or property from the general services officer, municipal or barangay
treasurer, as the case may be, to a department head for issuance to the end-user.
"ITB" refers to the Invitation to Bid.
"Locality", whenever used in these rules and regulations, refers to the territorial
jurisdiction of the province of which the city or municipality is a component part. For
the Metropolitan Manila Area, it shall include all cities and municipalities within the
Metropolitan Manila Area.
"Lowest Complying and Reasonable Bid" refers to the proposal of one who offers the
lowest price, meets all the technical specifications and requirements of the supplies or
property desired and, as a dealer in the line of supplies involved, maintains a regular
establishment, and has complied consistently with previous commitments.
"Minor or Ordinary Repair" means repair merely to keep a building or equipment in
fit condition or use without increasing its capacity or otherwise adding to its normal
value as an asset.
"Major or Extraordinary Repair" refers to alteration, addition, partition, extension,
and other construction or installation which materially increases the value or extend
the useful life of the structure or equipment.
"Negotiated Purchase" refers to the procurement of supplies without public bidding
undertaken for the purpose.
"Negotiated Sale" refers to a sale without public bidding undertaken for the purpose.
"Non-complying Bid" is a bid which does not comply with the advertised descriptions
and specifications.
"Non-Expendable Supplies or Property" or "Non-consumable Supplies or Property"
refer to articles which are not consumed in used and which ordinarily retain their
original identity during the period of use, such as weapons, vehicles, machines, tools,
and instruments.
"Non-Personal Services" includes, but not limited to, repairing, cleaning,
redecorating, or rental of personal property and furnishing of necessary repair parts
or other supplies as part of the services performed.
"Obsolete Property" is a property which has lost its efficiency either due to
technological advancement, change or procedure, reorganization of a department or
office, or completion of a project.
"Offer" is a proposal involving one or more items in a tender.
"Overrun" is an excess over the quantity ordered.
"Performance Bond" is a bond in cash, certified or cashier's check, or surety, required
of winning bidders to guarantee performance of an order or contract.
"Personal Canvass" refers to a mode of procurement allowed as an exception to public
bidding whereby designated canvassers request price quotations from at least three
(3) responsible suppliers in the locality.
"PR" refers to purchase request us in the requisition of supplies or property not to be
carried in stock.
"Procurement" refers to the acquisition of supplies or property, including nonpersonal services, by written order or contract through bidding or negotiation or by
transfer under existing laws or regulations
"Primary Accountability" refers to the accountability of the head of a department or
office for supplies or property transferred to his department or office for issuance to
the end-user.
"Property Responsibility" refers to the obligation of an individual for the proper
custody, care and safekeeping of property entrusted to his possession or under his
supervision.
"Protest" refers to the objection to a contemplated or actual award.

"Protest Bond" is a bond in cash, certified or cashier's check, or surety required of

protestants against awards.
"Public Auction" is synonymous to public bidding as applied to sale of disposable
supplies of property.
"Purchase" refers to the act of procuring or acquiring supplies or property for a price.
"Purchase Order" is a contract between the local government and the suppliers or
dealers for the delivery of supplies at a stipulated amount and includes, among
others, quantity, period and mode of delivery, unit and total price per item, and mode
of payment.
"Real Property" or "Real Estate" refers to land and buildings and other improvements
which are more or less of permanent structure and substantially adhering to the land
with the intent of permanent annexation.
"Repeat Order" is a form of negotiated purchase whereby a local government unit
buys from the same supplier, the same items at the same terms and conditions as the
original purchase within three (3) months therefrom.
"RIV" means Requisition and Issue Voucher use in the requisition of supplies or
property carried in stock.
"Running and Test Inventory" is an inventory of property made upon order of the
local chief executive at any time to ascertain the correctness of the property records of
the unit.
"Specification" refers to technical description of supplies or property being
requisitioned or ordered, which should be clear and complete, including if necessary,
the specific uses therefor and how acceptability thereof can be determined.
"Splitting" means division or breaking up of requisition or order into separate
requisitions or orders, of smaller quantities and amounts, to avoid review and/or
induce approval thereof by higher authorities.
"Standard" refers to a gauge which has been established by authority, custom or
common acceptance as proper and adequate for a given purpose.
"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.
"Supplemental Procurement Plan or Procurement Program" is the itemized list
showing the required supplies in a fiscal year not covered in the annual or
amendatory procurement plan or program.
"Supplier" is a person, firm or manufacturer who furnishes or sells the supplies or
property needed or required by a local government unit. It is synonymous to dealer,
bidder, offerer, seller or contractor.
"Supplies" or "Property" 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, stationery,
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.
"Surplus Property" is a property no longer needed by a local government unit.
"Tender" is synonymous with proposal, bid or the quotation for supplies or property
offered.
"Terms and Conditions" refer to other requirements not affecting the technical
specifications and requirements of the supplies or property desired such as bonding,
terms of delivery and payment, and related preferences.
"Tolerance" is the specified allowance for error in weighing, measuring, etc., or
variation from the standard or given dimension, weight or the like.
"Underrun" refers to the deficiency in the quantity ordered.

"Unserviceable Property" is a property that is not operational. It may be economically

repairable or beyond economical repair.
"Utilization" refers to the act of employing, enjoying, applying, converting supplies or
property for the purpose for which the same are acquired.
"Winning Bidders" are bidders who have received awards of contract or orders.
Rule 2. Standardization of Supplies or Property
Sec. 5. Procurement of Supplies or Property Certified by the Bureau of Product
Standards. To ensure maximum and efficient utilization of government resources,
LGUs shall limit their purchases of supplies or property from Bureau of Product
Standards (BPS) certified products in accordance with the Joint Memorandum
Circular, dated October 1, 1987, issued by the Department of Budget and
Management, Department of Trade and Industry and the Commission on Audit.
For this purpose, it shall be the duty of the general services officer, municipal or
barangay treasurer, as the case may be, to maintain and make reference to an updated list of PS Quality Mark Licenses and list of importers with Import Commodity
Clearance whenever procurement of supplies or property is to be made.
However, the application of this Rule may not be mandatory to procurement of
supplies or property under extreme necessity referred to in the Second Paragraph of
Section 88, Rule 8, hereof.
TITLE II ACQUISITION OF SUPPLIES OR PROPERTY
Rule 3. Procurement Plans and Programs
Sec. 6. Coverage. This Title shall cover acquisitions of supplies or property intended
for the following:
a.
operation of the local governments;
b.
prosecution of infrastructure projects by administration solely funded from
local funds;
c.
prosecution by administration of national funded infrastructure projects;
d.
prosecution by administration of foreign assisted infrastructure projects; and
e.
prosecution by administration of infrastructure projects funded from local
donation.
Where the release of funds for Sub-Paragraphs (d) and (e) is accompanied by specific
instructions, said instructions may be followed insofar as they do not directly
contravene existing laws. These rules and regulations shall have suppletory effect in
these cases.
Sec. 7. Annual Procurement Plan. At such time as may be prescribed by the local
chief executive, heads of departments or offices shall submit to the general services
officer or local treasurer, as the case may be, procurement plan of their supply
requirements for the ensuing fiscal year.
Sec. 8. Annual Procurement Program. On or before the fifteenth day of July of each
year, the general services officer or the local treasurer, as the case may be, shall
prepare for the approval of the local chief executive an annual procurement program
for the ensuing fiscal year which shall contain an itemized quantity of supplies or
property needed for the entire fiscal year, complete description thereof as to kind,
quantity and quality, the estimated cost, and the balance on hand. The total estimated
cost of the annual procurement program shall not exceed the total appropriations
authorized for the acquisition of supplies or property.
Sec. 9. Purchases Covered By Approved Procurement Program. Except in case of
emergency purchases or where urgent and indispensable needs could not have been
reasonably anticipated, no purchase of supplies or property shall be made unless
included in or covered by, an approved procurement program.
Sec. 10.
Prohibition Against Conversion of Cash Into Supplies. The conversion
of excess cash into supplies is prohibited except to the extent of the kind and quantity
specified in the approved procurement plan.

Sec. 11.
Supplementary Procurement Plan. At any time during the fiscal year,
heads of departments or offices may prepare and submit to the general services
officer or local treasurer, as the case may be, for the approval of the local chief
executive a supplementary procurement plan to cover supply or property
requirement of his department or office not otherwise included in the annual
procurement plan.
Sec. 12.
Supplementary Procurement Program. Within a reasonable time upon
receipt of the supplementary procurement plan, the general services officer or local
treasurer, as the case may be, shall prepare for the approval of the local chief
executive a supplementary procurement program based on the supplementary
procurement plan.
Sec. 13.
Amendatory Procurement Plan. At any time during the fiscal year, the
head of department or office may prepare and submit to the general services officer
or local treasurer, as the case may be, for the approval of the local chief executive an
amendatory procurement plan for supply or property requirement of his department
or office in lieu of those deleted, canceled or substituted in the approved procurement
plan. Amendatory procurement plan shall be supported by a written justification.
Sec. 14.
Amendatory Procurement Program. Within a reasonable time upon
receipt of the amendatory procurement plan from a head of the department or office,
the general services officer or local treasurer, as the case may be, shall prepare for the
approval of the local chief executive an amendatory procurement program for the
department or office concerned.
Sec. 15.
Provision for Contingency. In the preparation of annual procurement
plan, a maximum of fifteen per cent (15%) of the estimated requirements may be
provided for contingency and miscellaneous items. This shall take care of the
requirements which could not be anticipated or defined during the preparation of the
plan.
Sec. 16.
Separate Procurement Plans and Programs for Supplies or Property,
Non-Expendable Supplies, Non-Personal Services, and Materials for Infrastructure
Project. Separate procurement plans and programs shall be prepared for supplies or
property for the operation of a department or office, non-expendable supplies, nonpersonal services, and supplies or property intended for infrastructure project.
Rule 4. Requisition of Supplies or Property
Sec. 17.
Requirement of Requisition. No order for supplies or property shall be
placed by the local general services officer, municipal treasurer or barangay treasurer,
as the case may be, for any department or office of the local government except upon
written requisition as herein provided. Except in the case of emergency purchase, no
requisition shall be given due course unless the supplies or property desired are
included or listed in the annual procurement program or amendatory procurement
program.
Sec. 18.
Officers Authorized to Draw Requisition. Requisitions shall be drawn
by the head of the department or office needing the supplies or property who shall
certify as to their necessity for official use and shall specify the project or activity
where the supplies or property are to be used.
Sec. 19.
Approval of Requisitions. Approval of the requisition by the head of the
department or office concerned who has administrative control of the appropriation
against which the proposed expenditure is chargeable is deemed sufficient, except
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 construed as authorizing the
purchase of furniture and equipment for stock purposes.

Purchases by barangays, including those authorized under Section 391, Paragraph

(a), Sub-Paragraph 13, of RA No. 7160, shall be made only upon duly approved
requisition.
The punong barangay shall approve the requisition in the case of barangays.
Sec. 20.
Certification by the Local Budget Officer, Accountant, and Treasurer.
Every requisition must be accompanied by a Request for Obligation and Allotment
(ROA) showing the certification of the local budget officer, the local accountant, and
the local treasurer that an appropriation thereof exists, that the estimated amount of
such expenditure has been obligated, and that funds are available for the purpose,
respectively.
In the case of barangays, every requisition must be accompanied by a request for
obligation and allotment showing the certification of the following:
a.
the chairman of appropriations committee of the sangguniang barangay that
an appropriation therefor exists;
b.
the city or municipal accountant that the amount has been obligated; and
c.
the barangay treasurer that funds are available.
Sec. 21.
Forms to be Used. Requisitions shall be accomplished in the forms as
follows:
a.
for supplies carried in stock Requisition and Issue Voucher [General Form
45(A) as amended 1992]; and
b.
for supplies not carried in stock Purchase Request (LGU Form No. 05).
Sec. 22.
Number of Copies and Their Distribution. RIVs and PRs shall be
prepared in not less than three (3) copies to be distributed as follows:
a.
the original copy to be attached as supporting paper to the voucher prepared to
effect the payment of the supplies or property procured;
b.
a copy to the local general services officer, municipal treasurer or barangay
treasurer, as the case may be; and
c.
a copy to the requisitioning department or office.
Sec. 23.
Statement of Delivery Period. The requisitioner shall state with
definiteness and certainty the period of delivery desired so as not to leave doubt when
the supplies are needed. Statements of delivery period such as "immediate delivery",
"as soon as possible", other words and phrases having similar imports or without
stating a particular period shall be understood to mean seven (7) calendar days after
receipt by the supplier or contractor of the purchase order or contract.
Sec. 24.
Specification of Supplies of Property. The description and specification
of the supplies or property called for in the requisition shall include only the technical
specifications which will fill and satisfy the needs of the requisitioner. All
measurements and weights shall be stated in metric system except those supplies or
property which can better be described in the English system.
The general services officer, municipal or barangay treasurer, as the case may be,
shall be responsible for the correctness and accuracy of the specifications or technical
descriptions of supplies or property to be purchased, whatever is the mode of
procurement, to avoid delays that could arise from any ambiguity.
Sec. 25.
Filing of Requisitions in Advance. Heads of departments or offices shall
file their requisitions in advance to allow procurement thereof through the normal
process.
Sec. 26.
Prohibition Against Splitting of Requisitions. Except in case of
requisitions of supplies or property through emergency purchases, requisitions for
items needed for each quarter must be consolidated. There is deemed to be splitting
when it is resorted to in order to evade the required approval of higher authorities or
circumvent control measures provided for in these rules and regulations. The
following are illustrations of splitting.

a.
non-consolidation of requisition for one (1) or more items needed at or about
the same time by the requisitioner; and
b.
issuance of two (2) or more purchase orders based on two (2) or more
requisitions for items needed at about the same time by different requisitioners.
Rule 5. General Policies on Procurement
Sec. 27.
Public Bidding as the Primary Mode of Procurement. Except as
otherwise provided herein, acquisition of supplies or property by local government
units shall be through competitive public bidding.
Sec. 28.
Other Modes of Procurement. Local government units may make
procurement of their supply or property requirements without public bidding
through any of the following modes applicable in the circumstances, as provided
hereunder:
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.
It shall be the responsibility of the general services officer, municipal or barangay
treasurer, as the case may be, to recommend to the Committee on Awards/Local
Chief Executive upon whom approving authority has been vested by RA No. 7160 the
modes of procurement provided for in this section to be adopted in each particular
case.
Sec. 29.
Procurement Organization. In every province and city, the office of the
general services officer shall exercise the function of acquiring for the province or city
all its supply or property requirements. The municipal treasurer and barangay
treasurer shall exercise said function for the municipal and barangay government,
respectively. The offices of the general services officer, municipal treasurer or
barangay treasurer, as the case may be, shall provide the necessary secretariat
services to the Committee on Awards constituted in their respective government.
With the concurrence of the majority of the members of the Committee on Awards,
the local chief executive shall designate a Secretary to the Committee who shall,
among others, keep records of the minutes and other proceedings of the Committee.
Sec. 30.
The Committee on Awards. There shall be in every local government
unit a Committee on Awards. Except as provided herein, or in case of procurement
through emergency purchase, or when the authorization is specifically vested by law
to another body, the Committee on Awards shall exercise exclusive jurisdiction to
decide the winning bids and questions of awards on procurement and disposal of
supplies or property.
Sec. 31.
Composition of the Committee on Awards. 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 (in case of
provinces and cities), and the head of office or department for whose use the property
or supplies are being procured, as members. In case a head of office or department
would sit in a dual capacity, or when the requisitioning office is a national
government agency located in the local government unit and which supply or
property requirement is authorized by law to be augmented by said local government
unit, 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.
Sec. 32.
Prohibition of National Official From Sitting as Member of the
Committee on Awards. Under no circumstance shall an official of the national
government sit as a member of the Committee on Awards.

Sec. 33.
Attendance in Proceedings. Every member of the Committee on
Awards shall be present in all proceedings of the Committee unless prevented from
doing so by sickness or other unavoidable circumstance, in which case he may
authorize in writing a representative to attend in his behalf. Representatives of the
members of the Committee may deliberate on the bids for and in behalf of the
Committee members. However, the Committee members shall personally decide on
the bids and/or questions of awards and shall sign the Committee decisions.
Sec. 34.
Quorum in the Committee on Awards. Two-Thirds (2/3) of the
members of the Committee on Awards shall constitute a quorum to do business;
Provided, That the head of the department or office for whose use the supplies are to
be procured is among those present; Provided further, That in case the requisitioning
office is a national government agency located in the local government unit and which
supply requirement is authorized by law to be augmented by the local government
concerned, the sanggunian member authorized in this Rule to sit as a member of the
Committee on Awards is present.
Sec. 35.
Decision on Award. The decision of the Committee on a particular bid
or question of awards shall be concurred in by at least majority of the members
present and constituting a quorum.
The members who voted in favor shall sign the decision of the Committee. The
members who voted against may explain their objection in writing and the same shall
form an integral part of the supporting papers to the claim.
Sec. 36.
An Excerpt of the Proceedings in the Committee on Awards Shall Form
Part of the Supporting Papers. The Secretary of the Committee shall prepare, certify
and attach to the decision of the Committee on Awards an excerpt of the proceedings
during which said decision was rendered.
Sec. 37.
Proceedings Open to Public. The proceedings of the Committee on
Awards shall at all times be open to the public and any decision shall be duly
recorded and posted at a prominent place in the provincial capitol or the city or
municipal or barangay hall. The Secretary to the Committee on Awards shall certify to
the effect that the requirements of this section have been complied with.
Rule 6. Procurement Thru Public Bidding
Sec. 38.
Call for Bids. When procurement is to be made by provinces or cities,
the office of the provincial or city general services officer shall call bids for open
public competition. When procurement is to be made by municipalities and
barangays, the office of the municipal treasurer or barangay treasurer, respectively,
shall call bids for public competition.
The call for bids shall show the complete descriptions and technical specifications of
the required supplies or property and shall embody all terms and conditions of
participation and award, terms of delivery and payment, and all other terms 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.
Sec. 39.
Bidder's Bond. A bidder's bond shall be fixed at five per cent (5%) of
the total amount of the tender or offer but shall not exceed twenty thousand pesos
(P20,000.00) per bid proposal.
Sec. 40.
Sanctions for Refusal to Accept Award. A winning bidder who refuses
to accept the award without justifiable reason shall forfeit his bidder's bond and shall
be barred from participating in future biddings.
Sec. 41.
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. The general services officer,

municipal or barangay treasurer, as the case may be, shall certify to the effect that the
requirements of this section have been complied with.
In addition, 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 provincial or city general services officer or the municipal or
barangay treasurer, as the case may be, deems it necessary taking into consideration
the significance of the amount involved in order to obtain the lowest responsible and
complying bid.
Unless otherwise directed by the Committee on Awards, publication shall be made at
least ten (10) calendar days prior to the opening of bids.
Sec. 42.
Roster of Bidders. It shall be the duty of the general services officer or
local treasurer, as the case may be, to maintain a list of bona-fide bidders in the
locality, indexed and cross-indexed by supplies categories.
A bona-fide bidder shall have the following minimum qualifications:
a.
duly licensed for the business engaged in;
b.
has established place of business for at least three (3) months prior to the
public bidding he intends to participate; and
c.
not otherwise disqualified under RA No. 3019, as amended, or barred by
proper government agencies from dealing with the government.
Sec. 43.
Duties of Bidders. Bidders must carefully study the specifications,
terms and conditions advertised in the call for bids. In case of doubt, they may ask for
clarification so as to preclude erroneous tenders. Every bidder is chargeable with the
knowledge of all terms and conditions of the call for bid and assumes all risks
attendant thereto.
Bidders shall accomplish bid forms in as many copies as may be required in the call
for bids, preferably typewritten, and identical in all respects. All blank spaces shall be
filled properly and fully. Phrases like "See Attached Documents" and others of similar
purpose shall not be considered, unless the same are intended only to identify the
source of information for verification purposes. Erasures or alteration therein shall be
initiated by the person signing the bid.
Bids shall be signed by a responsible officer of the company or firm authorized for the
purpose whose name and designation must be clearly indicated in the bid.
Sec. 44.
Declaration of Business Interests. All bids must be accompanied by
statement declaring under oath all the business establishments or interest in the
locality of the bidders. The statement shall include, among others, the business name,
business address and the nature of the business.
Sec. 45.
Quotations. Price quotations must be certain and definite in amount.
Bids with conditions which would tend to make the quoted price uncertain, like
"subject to increase or decrease of the present rate of exchange" or others of similar
imports, incorporated in the tender or offer shall not be considered.
For a better appreciation of a bid offer, the brand name and country of origin or
manufacturer of the supplies or property should be stated.
Sec. 46.
Quotations not in Official Form. Quotations, although not in official
form, may be accepted and the bidder thereof, by submitting his tender, thereupon
binds himself to abide by the terms and conditions of the call for bids as advertised.
Sec. 47.
Quotations in Philippine Currency. Unless otherwise called for in the
call for bids, all quotations must be in Philippine Currency, inclusive of all
government taxes, fees, imposts, or duties, if any, and all incidental expenses. The
contractors shall certify that if they secure a waiver for, or refund of, all or any
portion of such taxes, fees, etc., the refund shall be paid back to the local government
concerned.

Sec. 48.
Quotations are By Item. Unless the call specifically provides for
quotation by lot or set, when more than one item are called for, quotations are to be
treated individually, and a bidder shall be compelled to accept the award of such
items as may be awarded to him.
Sec. 49.
Brand New Items Presumed. Unless otherwise specified in the call for
bids, all quotations shall be for brand new fresh commercial stock supplies or
property.
Sec. 50.
Ample Time to Evaluate the Tender. Tenders with condition which
tends to delimit the time of the government to consider and accept or reject the
proposal, like "subject to prior sale"; "subject to confirmation by our supplier" and
others of similar import shall be disregarded.
Sec. 51.
Statement of the Period Within Which the Offer is Good. The Bidders
shall state the period during which their offer is good, which in no case shall be less
than sixty (60) calendar days. Tenders which state a shorter period or fail to state any
period at all shall be understood as having a period of sixty (60) calendar days.
Sec. 52.
Submission of Samples, Reports of Analyses, Catalogs, Literature, and
Sketches. Unless a bidder has quoted exactly as per official sample, specification,
brand or quality of supplies called for, he may be required to submit a sample of his
bid; Provided, That nothing herein shall be construed as prohibiting the Committee
on Awards to require the bidder to present samples, reports of analyses, catalogs,
literature, or sketches as it may deem necessary under the circumstances.
Sec. 53.
Identification of Samples. Samples submitted when required shall be
properly identified. Reference to a sample previously submitted shall not be
considered unless the bidder was recently awarded a contract for the supply of the
same. Reference to catalogs and the like shall be definite by name, number, model,
page of catalog, edition, etc.
Sec. 54.
Bids on Brand-Names Other Than Those Specified. Whenever
reference to a manufacturer's brand-name is indicated in the call for bids, it shall be
intended to be descriptive, not restrictive, and shall be understood to merely indicate
to prospective bidders that brand-names other than those specified, if of equal
quality, may be considered, regardless of whether or not a statement to that effect is
made in the tender, provided that the bidder shall give full description of his offer
accompanied with catalog, literature, and/or sample. An offer guaranteeing to deliver
an "equal" or "equivalent" without acceptable proof shall not be considered.
Sec. 55.
Responsibility for Patent and/or Copyright Infringement. A bidder
shall be held solely responsible for all claims of infringement of patents and
copyrights in connection with any contract awarded to him by reason of his tender in
the bidding.
Sec. 56.
Submission And Acceptance of Bids. On or before the time and date of
opening of bids, bidders shall submit their bids in sealed envelopes with the office of
the general services officer in case of provinces and cities, or in the offices of the
municipal treasurer or barangay treasurer in the case of municipalities or barangays,
respectively. Said offices shall stamp thereon the time and date of receipt.
Sec. 57.
First Failure of Public Bidding. If no bid or only one (1) qualified bid is
received on or before the scheduled date of opening of bids, the Committee on
Awards may schedule another bidding following the same procedures herein
prescribed.
Sec. 58.
Second Failure of Public Bidding. If there is a failure of bidding for the
second time, the Committee on Awards may recommend the procurement through
negotiated purchase in accordance with these rules and regulations.
Sec. 59.
Withdrawal of Bids. A bidder may be allowed to withdraw his tender or
offer before the opening of the bids. His bid shall be returned to him un-opened.

Sec. 60.
Opening of Bids. All bids submitted shall be opened at the time, date
and place set in the call for bids by the Committee on Awards. Opening of bids shall
only be made in the presence of the provincial, city or municipal auditor or his duly
authorized representative who shall initial and secure copies of the bids. Bidders or
their representatives may witness the proceedings.
When the date of opening of bids is declared a holiday, it is understood that the bids
shall be opened on the working day following, at the same place and time.
Sec. 61.
Postponement of Opening of Bids Prohibited. The opening of bids shall
not be postponed unless there are compelling reasons or causes that justify the
postponement as may be determined by the Committee on Awards, which shall notify
the prospective bidders accordingly.
Sec. 62.
Abstract of Bids. Offers submitted by the bidders shall be abstracted
which shall be certified as to their correctness and authenticity by the Committee on
Awards and the provincial, city or municipal auditor or their duly authorized
representatives.
Sec. 63.
Bids Submitted Late. Bids submitted after the time and date of opening
of bids shall not be accepted.
Sec. 64.
Unsigned Bids. Bids submitted which are not signed shall be totally
disregarded and declared as "No Bid".
Sec. 65.
Non-Complying Bids. Bids submitted which do not conform to the
specifications and descriptions of the supplies or property are non-complying bids
and shall be rejected. In no case shall failure to meet the specifications or technical
requirements of the supplies or property desired be waived.
Sec. 66.
Consideration of Defective Bids. Defective bids defined in Section 4
herein may be considered for the purpose of determining whether it would be
advisable to hold a re-bidding or to waive the defects. The guidelines outlined
hereunder shall be observed.
Whenever the price in a defective bid is lower than that in a non-defective bid by at
least ten (10%) per cent, the bidder who offered the non-defective bid shall be asked
to reduce his price to that of the defective bid. If he consents, the award shall be made
to him at the reduced price.
If the bidder offering the non-defective bid refuses to reduce his offer to that of the
defective bid, re-bidding may be advertised within forty-eight (48) hours.
If the Committee on Awards believes that re-bidding is impractical, the defects may
be waived and the award shall be made in favor of the defective bid.
If the defect cannot be waived to meet the needs and requirements of the
requisitioner, or if there is conclusive evidence showing that the defective bid was
submitted to prejudice the non-defective bid, the award shall be made in favor of the
latter without reduction in price.
Sec. 67.
Acceptance of Bids and Awards. Awards in the procurement of supplies
or property shall be given to the lowest complying and responsible bid which meets
all the terms and conditions of the contract or undertaking. The following factors,
among others, shall be considered in making the award:
a.
conformity with the specifications in the ITB;
b.
price quoted, considering the Flag Material Law (CA 138), as amended,
whenever applicable, and other laws and policies pertinent to procurement;
c.
when time is of the essence, the bidder who offers to deliver within the period
stipulated in the invitation to bid shall be awarded the contract, provided that the
price is not unreasonably higher than the lowest price offered;
d.
all things equal, the bidder who offers to supply the whole quantity shall be
preferred in order to obtain uniformity in quality, tensible strength, color shade, etc.;
and

e.
reliability of bidder as a supplier or contractor.
Sec. 68.
Release of Bidder's Bond. Immediately upon the declaration of award
to the lowest bid or the rejection of all bids offered, bidder's bonds of the unsuccessful
bidders shall be released. The return shall be indicated conspicuously on the tender
to be signed by the bidders acknowledging the return of the bond. On the other hand,
the bidder's bond of the successful bidder shall be properly receipted and the same
may be released only upon his entering into contract and filing of a necessary
performance bond.
Sec. 69.
Division of Award. Division of award may be made only in either of the
following instances:
a.
in case of tie offers and the supplies are divisible, the award may be divided
equally as far as practicable unless the interest of the service demands that it should
be given to only one dealer; or
b.
in case the lowest bidder offers to supply a limited or partial quantity only, in
which event the balance may be awarded to other acceptable bidders in the order of
advantage of their offer.
Sec. 70.
Notification of Acceptance of Bids. The bidder or bidders who offer the
most advantageous tenders to the government shall be notified of the acceptance of
their bids. The losing bidders shall likewise be notified accordingly.
Sec. 71.
Award of Contract. Awards of contracts for the supply requirements of
the government shall be made by the Committee on Awards.
Sec. 72.
Protest Against an Award. A using bidder may file a protest with the
Committee on Awards against its award or decision within ten (10) days from the
date the winner was announced. The protest shall be in writing based on justifiable
grounds and accompanied with a protest bond, either in cash, certified or cashier's
check, or surety bond, in an amount equivalent to ten (10%) per cent of the total value
of his tender. Within seven (7) days from receipt of the protest the Committee on
Awards shall render a decision.
Sec. 73.
Forfeiture of Protest Bond. The protest bond posted by a protesting
bidder shall be forfeited in favor of the government should the protest be found to be
filed only to prejudice the awardee.
Sec. 74.
Issuance of Purchase Orders or Contract. Immediately after the
Committee shall have decided the winning bids, a purchase/letter order or contract
shall be issued to winning bidders. The following shall clearly appear in every
purchase/letter order or contract aside from the other requirements prescribed by
existing laws and regulations:
a.
office to which the account shall be charged and the requisition number;
b.
name and address of the supplier or contractor;
c.
office to with the delivery shall be made;
d.
complete descriptions and specifications of the supplies or property and all
other information and data needed to enable the supplier, COA inspector (if
applicable), and others concerned to determine the nature and quality of the items
purchased;
e.
provisions for penalty in case of late or non-delivery;
f.
quantity and unit price;
g.
period of delivery;
h.
shipping terms and conditions and other conditions of delivery;
i.
date of effectivity and termination of the contract; and
j.
conditions regarding importation, if any.
The date when the purchase/letter order was received by the supplier or contractor
shall be indicated clearly.

Sec. 75.
Who may Receive Purchase Order or Contract. The purchase order or
contract shall be released only to, and signed for by, the duly authorized
representative of the awardee after posting the performance bond.
Sec. 76.
Performance Bond. Performance bond shall be fixed at ten per cent
(10%) of the value of the contract or purchase order. However, in case of importation
and the same is to be financed by the government, performance bond may be
increased to twenty per cent (20%) depending on the reliability and integrity of the
awardee.
A purchase order or contract involving ten thousand pesos (P10,000.00) or less need
not be covered by performance bond.
Sec. 77.
Extension of Time to Deliver. Request for extension of time to deliver
beyond the period stipulated in the purchase order or contract shall not be granted
except in the following cases:
a.
force majeure;
b.
when failure to make delivery is due to an act or order of the government; or
c.
other justifiable reasons beyond the control of the contractor or supplier.
Provided, That the request for extension of delivery time is made before the term has
expired and recommended by the Committee on Awards and approved by the local
chief executive.
Sec. 78.
Reduction of Quantity. Amendment by reduction of the quantity called
for in the purchase order or contract may be allowed provided the supplier's request
is based on justifiable reasons and the requisitioning department or office offers no
objection. The request for amendment shall be approved by the Committee on
Awards.
Sec. 79.
Substitution of Supplies. Amendment by substitution of supplies or
property called for under the purchase order or contract may be approved by the
Committee on Award if the interest of the government is not prejudiced and the items
offered as substitute are of equal or better in quality and the contract price is not
increased by reason of the substitution.
Sec. 80.
Price Adjustment. The contract price may be adjusted in cases, when at
any time during the effectivity of the contract, the government should impose, modify
or abolish any tax, custom duties, license, imposts, fee, or other similar charges, or
enact, amend or repeal any law or decree, which would directly affect the purchase
order or contract, subject to the approval of the Committee on Awards.
Sec. 81.
Competition Between Local and Foreign Products. When there is a
competition between local product and a product coming from a foreign country,
preference should be given to the Philippine product unless the price of the
Philippine product exceeds the price of the foreign product by more than fifteen
(15%) per cent.
Rule 7. Procurement Through Personal Canvass
Sec. 82.
Canvass and Award. Upon approval of the Committee on Awards,
procurement of supplies or property 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 canvass of prices at the barangay level shall be conducted by a committee of three
(3) composed of the barangay treasurer and two (2) members of the sangguniang
barangay to be designated by the punong barangay.
Abstract of the canvass shall be prepared by the office of the general services officer,
municipal or barangay treasurer, as the case may be, and authenticated by the
canvassers.
The award shall be decided by the Committee on Awards.

Sec. 83.
Limitations of Procurement thru Personal Canvass. Purchases through
personal canvass shall not exceed the amounts specified hereunder for all items in
any one (1) month for all departments or offices combined in the local government
unit concerned.
1.
1.1
1.2
1.3
2.
2.1
2.2

Provinces, cities, and municipalities within the Metropolitan Manila Area:

first and second class one hundred fifty thousand pesos (P150,000.00);
third and fourth class one hundred thousand pesos (P100,000.00); and
fifth and sixth class fifty thousand pesos (P50,000.00).
municipalities outside Metropolitan Manila Area:
first class sixty thousand pesos (P60,000.00);
second and third class forty thousand pesos (P40,000.00);

2.3
fourth class and below twenty thousand pesos (P20,000.00).
3.
barangays in cities and in Metropolitan Manila Area ten thousand pesos
(P10,000.00); and
4.
all other barangays five thousand pesos (P5,000.00).
The governments of the Metropolitan Manila Authority, the Autonomous Region in
Muslim Mindanao and the Cordillera Administrative Region shall, for the purpose of
these rules and regulations, fall under the category of a first class province.
The phrase "all items in any one month" means that the total purchases thru personal
canvass of all the departments or offices in the local government unit concerned shall
not exceed the limitations prescribed herein.
Sec. 84.
Duty of the Procurement Officers on Purchases thru Personal Canvass.
It shall be the duty of the general services officer, municipal or barangay treasurer, as
the case may be, to ensure that procurement of supplies thru personal canvass shall
not exceed the limitations prescribed in Section 83 hereof. For this purpose, they
shall keep and maintain complete records of all purchase orders effected thru
personal canvass. Every purchase through personal canvass shall bear the
certification of said officials to the effect that the current purchase under
consideration has not exceeded the prescribed ceilings.
Rule 8. Emergency Purchases
Sec. 85.
When to Make an Emergency Purchase. In case of emergency where
the need for the supplies is exceptionally urgent or absolutely indispensable and only
to prevent imminent and real 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.
Sec. 86.
Limitations of Emergency Purchases. Deliveries under emergency
purchases or repair orders shall be made within ten (10) days after placement of the
same. The supplies procured must be utilized or availed of within fifteen (15) days
from the date of delivery or availability.
Sec. 87.
Mandatory Requisites of Emergency Purchases. Under no
circumstance may emergency purchase be resorted to unless all the following
conditions are met:
a.
the need for the supplies or repair is exceptionally urgent or absolutely
indispensable and only to prevent imminent and real danger to, or loss of, life or
property;
b.
there is no material time to procure the supplies through public bidding;
c.
appropriations therefor exist;
d.
the estimated amount has been obligated;
e.
funds for the purpose are available;
f.
the prices of the supplies to be procured are the lowest obtainable in the
market at the time of the purchase; and

g.
the supplies to be purchased are not available from any of the store rooms of
the local government concerned.
Sec. 88.
Canvass of Prices in the Locality of at Least Three Suppliers in
Emergency Purchase. Canvass of prices shall be conducted of at least three (3)
suppliers in the locality to secure the lowest price obtainable at the time of the
purchase.
Under extreme necessity when it becomes impracticable for the general services
officer, municipal or barangay treasurer, as the case may be, or their duly authorized
representatives, to conduct canvass of prices in the locality, the canvass may be made
within the immediate vicinity where the emergency occurs by the official or employee
needing the supplies; Provided, That if the suppliers canvassed in the said vicinity are
less than three (3), purchase of the supplies may still be made from the most
advantageous offer and the obtaining conditions shall be fully disclosed and indicated
in the abstract of canvass; Provided, further, That the quantity procured shall be
sufficient to meet the emergency and in no case shall the total amount exceed Ten
Thousand (P10,000.00) pesos in case of provinces, cities and municipalities and One
Thousand (P1,000.00) pesos in the case of barangays. If the canvass of prices can not
be made in the official canvass from at the time of purchase, it shall be the duty of the
official or employee who made the purchase to make a report of and certify to the
canvass in the official canvass form, attaching thereto the unofficial canvass form.
Sec. 89.
Authority to Decide and Award on Emergency Purchases. The authority
to decide and award on emergency purchases is vested in the local chief executive
upon recommendation of the general services officer, the municipal or barangay
treasurer, as the case may be.
Sec. 90.
Report of Utilization. Immediately after the supplies or property
procured through emergency purchase had been consumed but not later than three
(3) days upon the expiration of the fifteen (15) days prescribed in these regulations,
the head of the requisitioning department or office shall submit a Report of
Utilization (LGU Form No. 07) addressed to the local chief executive thru the general
services officer, municipal or barangay treasurer, as the case may be, containing,
among others, the following:
a.
date when the supplies or property were delivered and fully utilized; and
b.
exact location or address where supplies or property were delivered.
The report must be supported by RIVs signed for by the authorized representatives of
intended beneficiary groups.
The auditor concerned shall immediately be furnished with a copy of said report for
his guidance in audit.
The Report of Utilization for purchases of supplies under the second paragraph of
Section 88 shall be prepared by the official or employee who made the emergency
purchase duly noted by his immediate superior and the department head concerned
containing, in addition to the above-enumerated information, the date, time, place
and particulars of the emergency.
Sec. 91.
Confirmatory Report on Emergency Purchase. Immediately after the
emergency purchase is made, the head of the requisitioning department or office
shall draw a regular requisition to cover the same which shall contain by attachment
the following:
a.
complete descriptions of the supplies or property acquired or the work done or
to be performed;
b.
by whom furnished or executed;
c.
the unit price and the total contract price;
d.
the date of placing the order and the date and time of delivery or execution;

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 officer 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;
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 availability of funds; and
h.
the abstract of canvass.
Sec. 92.
Depository of Confirmatory Reports. The original copy of the approved
Confirmatory Report, together with all the attachments, shall be filed with the
disbursement voucher prepared for payment of the items procured. All members of
the Committee on Awards shall also be furnished with a copy.
Sec. 93.
Sanction for Non-Compliance. Without prejudice to criminal
prosecution under applicable laws, the local chief executive, the head of the
department, or the chief of office making the procurement shall be administratively
liable for any violation of, or non-compliance with, any of the rules and regulations
pertaining to emergency purchases which shall be a ground for suspension or
dismissal from the service pursuant to Section 368 of RA No. 7160.
Rule 9. Negotiated Purchase
Sec. 94.
When to Make a Negotiated Purchase. In cases where public biddings
have failed for two (2) consecutive times and no suppliers or dealers have qualified to
participate or win in the biddings, the Committee on Awards shall attest to this fact
and may recommend to the local chief executive, through the general services officer,
municipal or barangay treasurer, as the case may be, that the procurement be made
by negotiated purchase regardless of amount; Provided, however, that the supplies or
property to be procured are covered by the annual procurement program and shall be
delivered within seven (7) calendar days after placement of the order; and Provided
further, that the contract covering the negotiated purchase shall be approved by the
sanggunian concerned.
Sec. 95.
When Public Bidding is Deemed a Failure. For the purposes of these
rules and regulations, public bidding is deemed to have failed under any of the
following circumstances:
a.
when no or only one qualified bid is received on or before the scheduled date
of the opening of the bids; or
b.
when all the bids submitted are defective and/or non-complying bids or not
responsive to the terms, conditions and specifications of the tender documents.
Sec. 96.
Canvass of Prices for Negotiated Purchase. Canvass of Prices of at least
three (3) suppliers or dealers in the locality shall be conducted to obtain the lowest
price. However, under circumstances when it becomes impracticable to conduct
canvass of prices, purchase of supplies or property may still be made through
negotiation provided that the Committee on Awards shall attest to this fact.
Sec. 97.
Person to Conduct Canvass of Prices in Negotiated Purchase. The
Committee on Awards or its duly authorized representatives shall conduct the
canvass of prices in purchases through negotiation.
Sec. 98.
Abstract of Canvass for Negotiated Purchase. Quotations submitted by
the various suppliers shall be abstracted and certified as to its correctness and
authenticity by the members of the Committee on Awards. The abstract shall, among
others, serve as the basis for negotiation. The original of the abstract shall be attached
to the contract to be entered into by the local chief executive for the purpose.

Sec. 99.
Authority to Decide and Award on Negotiated Purchase. The authority
to decide and award on negotiated purchases is vested in the local chief executive
upon the recommendation of the Committee on Awards.
Sec. 100.
Confirmatory Report on Negotiated Purchase. Immediately after the
negotiated purchase, the local chief executive concerned shall draw a regular
requisition to cover the same which shall contain by attachment, among others, the
following:
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;
d.
the unit price and the total contract price;
e.
a certification of the provincial or city general services officer 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;
f.
a certification of the local budget officer as to existence of appropriations for
the purpose;
g.
a certification of the local accountant to the effect that the estimated amount
covering the purchase has been obligated;
h.
a certification of the local treasurer to the effect that sufficient funds to cover
the purchase are available; and
i.
the abstract of canvass.
The requisition which shall be accomplished on an RIV shall be processed and
approved in accordance with these rules and regulations.
Sec. 101.
Repeat Orders. When the need for additional quantity of the same
items covered by a previous purchase arises, the local chief executive upon
recommendation of the general services officer, municipal or barangay treasurer, as
the case may be, may place an order for said items from the same supplier or dealer,
provided all the following conditions are met:
a.
the original purchase was made through public bidding;
b.
the quantity does not exceed one hundred per cent (100%) of the original
purchase;
c.
the prices of said items have not gone down in the market by more than ten
per cent (10%);
d.
the order is made within three (3) months from the date of the original
purchase order; and
e.
the same terms and conditions in the original purchase are obtained.
Rule 10. Direct Purchase from Duly Licensed Manufacturer
Sec. 102.
When Direct Purchase from Duly Licensed Manufacturer may be Made.
Procurement of supplies or property of Philippine manufacture or origin may be
made directly from duly licensed manufacturers; Provided, That the manufacturer is
able to present proof showing that it is a duly licensed manufacturer of the desired
product and there is no dealer or distributor offering the same items at lower prices.
Sec. 103.
Canvass of Prices in Procurement from Duly Licensed Manufacturer. In
case there are two (2) or more known manufacturers of the required supplies or
property, canvass of prices should be made of the known manufacturers within the
locality to obtain the most advantageous price.
Sec. 104.
Authority to Decide and Award in Procurement from Duly Licensed
Manufacturer. The award for the procurement of supplies or property from duly
licensed manufacturer shall be made by the Committee on Awards in accordance with
the procedures prescribed in these rules and regulations.
Rule 11. Procurement from Exclusive Philippine Agents or Distributors.

Sec. 105.
When Procurement from Exclusive Philippine Agent or Distributors
may be Made. Procurement of supplies or property of foreign origin may preferably
be made directly from the exclusive or reputable Philippine distributors or agents
subject to the following conditions:
a.
the Philippine distributor has no sub-dealers selling at lower prices; and
b.
no suitable substitutes of substantially the same quality are available at lower
prices.
Provided, That certification to the effect that the distributor has no sub-dealers
selling at lower price is secured from the principal and/or exclusive distributor.
Sec. 106.
Authority to Decide and Award in Procurement from Exclusive
Philippine Agents or Distributors. The award for the procurement of supplies or
property from exclusive Philippine agents or distributors shall be made by the
Committee on Awards.
Rule 12. Procurement from Government Entities
Sec. 107.
Purchases from Other Philippine Government Entities. Government
entities that are possible sources of supplies or property may be requested to fill the
needs of local governments. Procurement procedures prescribed for these
government entities shall be observed.
Sec. 108.
Purchase Through Foreign Government Entities. Procurement of
supplies may be made by local government units from agencies of foreign
governments with which the Philippine maintains diplomatic relations. Procurement
under this mode shall be made only upon prior authority from the Office of the
President of the Philippines and in accordance with existing importation law, rules
and regulations.
Rule 13. Other Modes of Procurement
Sec. 109.
Procurement Authorized by Special Law. Procurement other than those
defined in these rules and regulations but authorized by special law shall be governed
by said Special Law.
Sec. 110.
Suppletory Character of these Rules and Regulations. These regulations
shall be applied to fill in any deficiency of a Special Law authorizing a mode of
procurement other than those defined herein.
TITLE III DELIVERY AND INSPECTION OF SUPPLIES OR PROPERTY
Rule 14. Delivery
Sec. 111.
Packing. All supplies shall be adequately contained, packed, crated,
cased, bundled, wrapped, or sealed, as the case may be, in accordance with the
purchase order or contract, to safeguard them from damage, spoilage, and/or loss.
Sec. 112.
Responsibility in case of Damage, Spoilage or Loss. Responsibility in
case of damage, spoilage or loss shall be governed by the existing laws on the matter
unless the purchase order or contract provides otherwise.
Sec. 113.
Time and Place of Delivery. Unless otherwise provided in the purchase
order or contract, deliveries shall be made within seven (7) calendar days upon
receipt of the order and during office hours at the place stipulated.
Rule 15. Inspection and Accomplishment of Inspection Reports
Sec. 114.
Inspection of Purchases. Inspection and verification of purchases shall
be done according to these rules:
a.
Purchases made by the local government units must be inspected and verified
by their authorized inspector for conformity with specifications in the order.
However, the chief of the inspection service authorized by the local chief executive,
may waive the inspection of purchases of insignificant value, provided he is fully
convinced that the delivery in question is in accordance with the specifications of the
order. The waiver of inspection must be stamped on the original copies of the order
and invoice.

b.
Evidence of inspection of deliveries of supplies or property of insignificant
value must be shown by notation on the original copies of the order and invoice, thus:
Inspected by:
..........................................
(Name and Signature)
Date: ................
c.
All items to be inspected shall be accepted first by the general services officer,
municipal or barangay treasurer, as the case may be.
d.
Report of inspection of all consumables shall be submitted to the provincial,
city or municipal auditor, as the case may be, within twenty four (24) hours.
Sec. 115.
Submission and Approval of Inspection Reports. The property
inspectors of the local government units shall promptly submit reports of all
inspections finished during the day to their supervisors for evaluation and approval.
The approved inspection report and other documents pertaining to the inspection
shall form part of the supporting papers of the disbursement voucher covering the
payment of the purchases.
Sec. 116.
Surprise and Selective Inspections by the Local Auditors. The
provincial, city or municipal auditor or their representatives shall conduct a surprise
and selective inspections of deliveries soon after their acceptance by the local
government units.
Rule 16. Articles Subject to Test
Sec. 117.
Drugs, Chemicals and Medicines. Utmost care and caution shall be
exercised at all times in the inspection of the following items:
a.
medicines and pharmaceutical preparations the analyses must conform to
their formulas;
b.
drugs, chemicals including disinfectants their analyses must conform to the
USP, NF, BHF, or BFD requirements; and
c.
insecticides, fungicides, etc. the quality of these items shall be determined
through laboratory analysis.
Quantity of samples required:
tablets30
tablets ointments 100
grams liquids100 cc.
solids 50 grams
capsules
5 capsules
The samples to be sent to BFD for the necessary test shall be taken at random and
shall be placed in a free-contamination container. The same shall be properly sealed
with a strip of onion skin paper bearing the signature or initial of the dealer,
requisitioner and inspector. The order, invoice and requisition numbers and the
description of the items shall be indicated on the container.
Sec. 118.
Paper and Paper Products. Papers are manufactured from materials
like wood, pulp, bagasse, etc., in combination with chemicals to make different kinds
of paper. These articles differ in texture, finish, and thickness. Their specifications
vary in accordance with the intended purposes.
The usual specifications of paper are substance number or gram quality, size, color,
finish, rag or silk content, bursting strength, thickness and other special features, like
water markings.
A representative sample from five (5) different reams of the delivery shall be taken for
test and analysis if additional specifications other than color, size and substance are
required, like bursting strength, thickness, density, rag or silk content.
Sec. 119.
G.I. Sheets, Pipes, Reinforcing Steel Bars, and Other Alloys. When
testing of samples is to be performed, the informations hereunder are significant:

a.
G.I. sheets This item covers galvanized iron sheets, zinc coated, classified into
two (2) types according to the purpose. Type A is used for permanent construction
(more than five years) and Type B is used for non-permanent construction (less than
five years).
The weight of a zinc coating (ordered coating) shall conform to the requirements
prescribed in the tables, below, provided, that in no case shall ordered coating weight
be less than 1.25 ounces per square foot.
Ordered Coating and Minimum Coating Test Limits,
Ounces Per Square Foot
Order Coating
Minimum
Minimum
Practical Limits
Weight or Nominal Coating
Coating
Galvanized
Coating Value
By Diagonal By Single
Sheet Gauge
Appearing Triple
on the Sheet Spot Test
2.75 2.35 2.00 Nos. 8 to 24
2.50 2.10 1.80 Nos. 8 to 26
2.25 1.85 1.60 Nos. 8 to 28
2.00 1.65 1.40 Nos. 11 to 28
1.75 1.40 1.20 Nos. 14 to 28
1.50 1.15 1.00 Nos. 16 to 30
1.25 0.90 0.80 Nos. 18 to 30
Table of Zinc Coating Tolerances
Specified
Average
Any One
Average
Zinc Triple Triple of Min.
Minimum
Coating
Spot Test
Spot Test
Spot Test
Ave. or 3
Specimens
2.75 2.40 2.30 2.20 2.00

Any One
Spot Test

2.50 1.95 1.80 1.75 1.60

2.20 1.75 1.60 1.55 1.40
1.75 1.50 1.35 1.30 1.20
1.50 1.25 1.15 1.10 1.40
1.25 1.05 0.95 0.90 0.55
Before it is coated with zinc, a steel sheet is referred to as base metal. The base metal
for the sheets shall be made from acid bessemer or basic-open hearth process. The
base metal of plain sheets shall be able to stand while being bent cold through 180
degrees flat on itself without fracture.
Coating bent test for plain sheet specimens, 3 to 4 inches in width, shall be able to
stand while being bent cold through 180 degrees without flaking of the coating on the
specimens. The tests shall be performed in accordance with the procedures adopted
by the Industrial Technology Development Institute (ITDI) and the Bureau of
Research and Standards (BRS) of the Department of Public Works and Highways
(DPWH).
For the purposes of determining the uniformity of a given lot, three (3) tests shall be
made. The whole lot shall be rejected if these three (3) tests fail.
b.
G.I. Pipes These items are manufactured in accordance with ASTM
specifications. A length of one (1) piece of sample shall be submitted in accordance
with the usual sampling requirements. Notably, both ITDI and BRS have the
necessary facilities that can be availed of in testing these articles.
c.
Reinforcing steel bars Reinforcing bars of various sizes, forms and lengths are
manufactured in accordance with ASTM and ASSHO specifications.
Samples to be tested and analyzed shall be sent to the BRS.
The following methods of sampling shall be followed:

A sample of at least one (1) meter shall be cut from every ten (10) of the deliveries. In
addition to the usual sampling requirements, the request for test must contain these
informations, namely: number of tons constituting the delivery, name of dealer or
contractor, length of bars, and the name of the inspector present during the sampling.
d.
Concrete blocks, wall boards, asbestos roofing materials The ITDI and BRS
require samples of at least five (5) pieces for concrete blocks and one (1) sheet for wall
boards and roofing materials.
e.
Alloys The assay of these materials shall be made using the facilities of ITDI
and the Metal Industry Research and Development Corporation (MIRDC). The
request for analysis shall state the kind of analysis desired. A portion of at least two
(2) inches cut from the delivery and properly identified shall be sent to ITDI and
MIRDC for the necessary test.
Sec. 120.
Cereals and Animal Feeds. The guidelines, below, shall be availed of if
testing of cereals and animal feeds is necessary:
a.
rice and corn the classification, verification and evaluation of deliveries of rice
and corn shall be made at the laboratories of the Bureau of Animal Industry (BAI)
Composite samples of at least twenty (20) grams shall be submitted in sealed and
properly labeled containers.
b.
animal feeds the procedures for feeds analysis formulated by the BAI shall be
observed in testing animal feeds. Copra and fish meals have their own specific
analyses and the same shall be tested to determine conformity with specifications.
Samples of animal feeds may be analyzed either at ITDI or BAI.
A sample of at least 250 grams shall be submitted. A small quantity of feeds from
every sack of the delivery will be sufficient sample. The samples are mixed thoroughly
and divided into three (3) equal parts. They are then placed into clean glass
containers to insure against contamination. A strip of onion skin paper bearing the
signature or initial of the inspector, requisitioner and dealer, together with the
number, requisition and invoice numbers, shall be pasted on each container.
The requisitioner and the inspector shall each retain a bottle of samples for their
ready reference. A bottle of same samples shall be forwarded to the laboratory
performing the test.
Sec. 121.
Textile, Flags and Flag Materials, Canvass, Gauge, Bandages, etc. The
testing of samples shall be done in the laboratories named opposite each group of
items:
a.
textiles, including canvass, tracing cloth, etc. A yard shall be sufficient as
sample for testing and analysis purposes. Notably, both ITDI and the Phil. Textile
Research Institute (PTRI) have the necessary facilities that can be availed of in testing
these articles.
b.
Flags and flag materials Although flags and their manufacturers are being
regulated by the government, prior approval of the Philippine Heraldry Committee
must be secured regarding design, color, materials, etc. Nevertheless, the actual
testing and evaluation of these articles shall be done by ITDI and PTRI. One (1) flag
or a piece from each item subject to test must be submitted as sample.
c.
Gauze, bandages, absorbent cotton Although categorized as hospital supplies,
gauze, bandages and absorbent cotton are classified as Textiles. Thus, the qualities of
these articles are covered by USP specifications. A roll of gauze, bandage or cotton
shall be submitted to ITDI for the necessary test.
Sec. 122.
Leather and Leather Goods. The following quantities of samples of
leather and leather goods shall be sent to the ITDI for the necessary test:
a.
finished product (raw materials) ...... 1 square foot
b.
finished product ............ 1 piece of each item requiring test.

Sec. 123.
Soap and Soap Products. Samples of soap and soap products shall be
sent to ITDI for the necessary test. A cake or print, in case of liquid soap, will serve as
sample.
Sec. 124.
Paint and Paint Materials The following quantities of samples of paint
and paint materials shall be sent to ITDI for the necessary test:
a.
ready-mixed paints, enamel lacquers and other fluid paints ...... 1 gallon or at
least 1 quart;
b.
paint paste, powder water paints and dry pigments .......... 1 keg or at least 5
lbs; and
c.
drying oils, etc. ....... 1 gallon or at least 1/2 gallon.
Sec. 125.
Wires, Telephones, Electric Steel Cables, etc. Wires are manufactured
from steel, copper, silver, etc. The specifications of these articles vary in accordance
with the specific requirements of the intended purposes; hence, requests for test must
be based on such specifications.
The facilities of the ITDI or MIRDC shall be availed of if the desired test includes a
series of requirements. A sample of at least thirty (30) feet shall be necessary.
Sec. 126.
Canned Goods. Samples of canned goods shall be submitted to BFD for
the necessary analysis.
Sec. 127.
Inks and Adhesives. Inks include stamping, stencil, writing, etc.
Adhesives include mucilages, office paste, etc. The following quantities of samples of
these articles shall be submitted to the ITDI for analysis and certifications:
a.
writing ink ........... 1/2 pint;
b.
stamping ink ......... 1/2 pint and one new stamping pad;
c.
mimeograph ink ...... 1 lb. and one ream of mimeograph paper long size;
d.
mucilages, office paste, etc ...... 1/2 lb.
Sec. 128.
Lubricating Oil, Fuel Oil, Grease, etc. The quality of lubricating oils is
standardized under SAE (Society of American Engineers) requirements. SAE-30, 40,
50, etc., are the classifications of lubricating oils for different types of engines. The
following quantities of samples shall be submitted to ITDI for the necessary analyses:
a.
lubricating oils ....................... 1 liter
b.
grease ................................... 1 pound
c.
fuel oil (bunker, diesel, etc.) .... 1 gallon
Sec. 129.
Asphalt and Asphaltum Products. The following quantities of samples
of asphalt and asphaltum products shall be submitted to BRS for testing to determine
their conformity with the specifications prescribed by DPWH:
a.
rock asphalt ........................... 1 drum
b.
asphaltum emulsion ................. 1 gallon
Rule 17. Testing and Evaluation of Analysis Reports Certificates
Sec. 130.
Authorized Laboratories. For ready reference, enumerated hereunder
are laboratories authorized to perform tests and analyses whenever required and
practicable to determine conformity with specifications:
a.
Research and Development Center, AFP
- ordinance and chemicals
- quarter master
- special projects
b.
Bureau of Food and Drug
- food
- drugs and medicines
- cosmetics
c.
d.

Bureau of Research and Standards, DPWH

- construction materials
Industrial Technology Development Institute

e.
f.
g.
h.
i.

- office supplies
- industrial products
Metals Industry Research and Development
Center
- metal products
Bureau of Soils and Water Management
- fertilizers
Bureau of Animal Industry
- animal feeds
- veterinary products
Forest Management Bureau, DENR
- wood and wood products
Philippine Textile Research Institute

(PTRI)
- textiles.
Unless the contrary is stipulated in the contract or purchase order, all charges and
fees on test and analysis of deliveries shall be for the account of the procuring local
governments.
Sec. 131.
Acceptance and Rejection of Deliveries. The results of the tests of the
samples shall determine the appropriate actions to be taken on the supplies or
property delivered in accordance with the following:
a.
supplies or property tested and found to be in accordance with the required
specifications shall be accepted;
b.
supplies or property whose quality analysis shows a deficiency of less than ten
(10%) per cent may be accepted, provided they shall serve the purpose for which they
were purchased, the defect is minor and the contract price is reduced according to the
deficiency noted;
c.
supplies or property whose analysis shows a deficiency of ten (10%) per cent or
above shall be totally rejected and replacement thereof shall be demanded; and
d.
supplies or property whose quantity is short by volume, weight, actual count,
etc., shall be subject to reduction in contract price at an amount equivalent to the
shortage, provided said deliveries are acceptable to the local government unit.
Damaged items which are not disclosed or incorrectly marked as such shall also be
subjected to corresponding reduction in price.
Sec. 132.
Waiver of Test. The authorized inspector may waive the test and
analysis of deliveries subject to test under any of the following conditions:
a.
when the specifications of the order can be determined or calculated without
actual testing;
b.
when the specifications of the supplies or property of the current purchase are
similar with those of the prior purchase which had already been tested by authorized
testing agency, provided that the current and previous purchases are from the same
supplier. The previous laboratory report shall be valid for six (6) months from date of
test; and
c.
government products, provided that same are delivered to the local
governments in their original containers, sealed and properly labeled without any
indication of tampering or an attempt to unseal the containers.
Rule 18. Sampling of Articles Subject to Test
Sec. 133.
Procedures in the Sampling of Articles Subject to Test. To insure
prompt and speedy sampling of articles subject to test, the following procedures shall
be observed:
a.
Immediately upon completion of inspection of deliveries subject to test, the
property inspector shall accomplish the Certificate of Sampling at the back of the
inspection report. The general services officer or local treasurer, as the case may be,
shall request the presence of the dealer or his authorized representative during the

sampling. If the dealer fails to be present, the property inspector shall forward the
inspection report to the general services officer or local treasurer, as the case may be,
with a notation to this effect.
b.
The property inspector may proceed with the sampling if authorized by the
dealer, but no voucher covering 80 percent of the purchase value of the articles
subject to test shall be released unless accompanied by a certificate signed by the
dealer or his authorized representative waiving his right to be present in the
sampling.
c.
The duplicate copy of the certificate of waiver secured from the dealer shall be
sent to the provincial/city or municipal auditor, as the case may be, for his
information and guidance.
d.
Where the delivery is subject to analysis and the sample is to be taken
therefrom, the dealer or his authorized representative shall also sign the certificate.
Where the dealer waives his right to be present in the sampling of a particular
delivery or of all his deliveries subject to analysis, he shall prepare a written
statement to this effect to be attached to the report of inspection. The property
inspector shall not submit any sample for analysis without a properly accomplished
certificate of sampling.
e.
Where the official sample submitted with the bid is attached to the buyer's
order, letter order, etc., a certificate to that effect shall be secured and signed by the
dealer or his representative and by the property inspector. Said certificate, together
with the official bid sample, shall be delivered immediately to the authorities
concerned by the property inspector, himself. This requirement shall also apply
where the bid sample has been forwarded direct to the requisitioner. In either case,
diligent care shall be observed to insure that the official bid sample will not be
tampered or substituted.
f.
The property inspector shall take custody of all official samples submitted with
the bids. If the official bid sample is subject to analysis, the same shall be sent to any
of the laboratories mentioned in Section 130 hereof within twenty-four (24) hours
from receipt of the same by the property inspector. If analysis is not necessary, he
shall compare the actual deliveries with said samples. No request for inspection of
delivery shall be entertained unless the dealer has submitted enough bid samples of
the articles delivered.
g.
All official bid samples placed in containers shall be properly labeled. They
must be sealed with strips of onion skin paper bearing the signature of the buyer and
property inspector and securely pasted along with all the orifices of the containers.
Sec. 134.
Samples, Sketches, Blueprints, etc. All samples, sketches, blueprints,
etc., attached to the order shall be submitted by the contractor to the office of the
general services officer, municipal treasurer or barangay treasurer, as the case may
be.
Sec. 135.
Penalties. For failure of the contractor to make delivery when due, the
following penalties shall be imposed:
a.
a liquidated damage in the amount of one-tenth (1/10) of one per cent (1%) of
the total value of the contract shall be deducted for each day of delay; or
b.
a liquidated damage in the amount of one-tenth (1/10) of one per cent (1%) of
the total value of the undelivered portion shall be deducted for each day of delay, if
the contract has been partially filled.
Sec. 136.
Withdrawal of Rejected Deliveries. Delivered goods which are rejected
due to non-conformity with specifications or due to other justifiable reasons shall be
withdrawn by the contractor from the government warehouse or premises within

seven (7) working days after the date of receipt by the contractor of a "Notice of
Rejected Goods"
Sec. 137.
Storage Charges. A storage charge of fifteen per cent (15%) per month
of the value of the rejected goods shall be collected from the contractor after the lapse
of seven (7) working days from the date of receipt by the contractor of the Notice of
Rejected Goods.
Sec. 138.
Unclaimed Rejected Goods. Rejected goods which remain unclaimed
for a period of three (3) months shall be disposed of by the local government in a
most advantageous manner to defray storage costs.
TITLE IV UTILIZATION AND ACCOUNTING
Rule 19. Utilization of Supplies or Property
Sec. 139.
Responsibility for Wasteful Use of Supplies or Property. It shall be the
direct responsibility of every local chief executive to prevent or minimize wasteful
uses of supplies or property requisitioned by each department or office. The local
chief executive shall develop operating standards to guard against the improper or
wasteful use of supplies or property. These standards shall be approved by the local
sanggunian concerned.
Sec. 140.
Direct Responsibility for Supplies or Property. The person in actual
physical possession of supplies or property or entrusted with its custody and control
shall be responsible for its proper use and care and shall exercise the diligence of a
good father of a family in the utilization and safekeeping thereof.
Sec. 141.
Transfer of Excess Property. It shall be the duty of every head of the
department or office to turn over to the general services officer or municipal or
barangay treasurer, as the case may be, excess property for reissuance to other
departments or offices.
Rule 20. Accountability for Supplies
or Property
Sec. 142.
Primary and Secondary Accountability for Supplies or Property. Every
head of department or office of a local government unit shall be primarily
accountable for all supplies or property assigned or issued to his department or office.
The person or persons entrusted with the possession or custody of supplies or
property under the primary accountability of the head of a department or office shall
be immediately accountable to said officer. The head of a department or office may
require the person in possession 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.
Sec. 143.
Transfer of Accountability. Transfer of non-consumable supplies or
property from the general services officer, municipal or barangay treasurer, as the
case may be, to any department or office for reissue to the end-user shall be covered
by a Property Issue Slip (LGU Form No. 08) to be prepared in such number of copies
as are necessary showing the complete descriptions of the supplies or property and
the acquisition cost. Each Property Issue Slip must bear certificates effecting the
transfer to be signed by the general services officer, municipal or barangay treasurer,
as the case may be, and head of the department or office.
Transfer of non-consumable supplies or property from the head of the department or
office to the end-user shall be covered by Memorandum Receipts (LGU Form No.
09). The general services officer, municipal or barangay treasurer, as the case may be,
shall be furnished with a copy of said Memorandum Receipts.
Sec. 114.
Designation of Supply Officer. The local chief executive may designate
a supply officer in each department or office upon the recommendation of the head of
the department or office concerned. The supply officer shall be immediately
accountable to the head of the department or office for supplies or property placed
under his actual custody and control.

Sec. 145.
Responsibility and Duty of a Person Immediately Accountable. The
person in actual physical possession of or entrusted with the custody or control of
supplies of property shall be responsible for the proper use and care of the same and
shall exercise due diligence in the utilization and safekeeping thereof. Further, he
shall keep a complete and updated record of the same and shall render an account
thereof semi-annually to the head of department or office concerned.
Sec. 146.
Duty of a Person Primarily Accountable. It shall be the duty of every
head of a department or office to keep a complete record of all supplies or property
under his charge and render his accounts thereof semi-annually to the local chief
executive thru the provincial or city general services officer; or to the municipal or
punong barangay thru the barangay treasurer, as the case may be, on or before July
31 and January 15 of each year. The auditor shall be furnished a copy of the report.
Sec. 147.
Accountability and Responsibility on Buildings and other Physical
Structures. Buildings and other physical structures shall be under the accountability
and responsibility of the provincial or city general services officer, municipal mayor
or punong barangay, as the case may be. He shall keep a separate and updated record
of these properties and shall submit an inventory report to the provincial, city or
municipal auditor on or before the 15th day of January each year showing, among
others, the condition of said properties.
Sec. 148.
Responsibility for Real Estate. Every local chief executive shall be
immediately responsible for the proper and effective use and management of real
estate owned or titled in the name of the local government unit. He shall ensure that
all real estate under his responsibility are registered, under the Torens Title System
and safeguarded from squatters, unlawful occupants or the like.
Sec. 149.
Measures of Liability of Persons Accountable for Supplies or Property.
The person in possession of or having custody or control of supplies or property is
immediately accountable therefor and shall be liable for its money value in case of
illegal, improper or unauthorized use or misapplication thereof, by himself or any
other person for whose acts he may be responsible, and he also shall be liable for all
loss, damage, or deterioration occasioned by negligence in the keeping or use of such
property. The burden of proof that due diligence and care in the utilization and
safekeeping thereof was observed, rests on the accountable officer.
Unless he registered 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 supplies or property with which he is chargeable. The officer directing
any illegal, unauthorized or improper use of supplies or property shall first be
required to answer therefor.
Sec. 150.
Liability of Security Agency. In case of loss, damage, or deterioration of
government supplies or property arising from, or attributable to, negligence in
security, the head of the security agency shall be held liable therefor.
Sec. 151.
Notice of Loss and Application for Relief. When loss of government
supplies or property occurs, it shall be the duty of the officer immediately accountable
therefor or having custody thereof to immediately notify simultaneously the office or
department head and the provincial, city or municipal auditor concerned. The office
or department head shall immediately conduct a preliminary investigation of the loss
and refer the matter to the proper government investigation agency. The provincial,
city or municipal auditor shall conduct a separate inquiry of the reported loss while
the clues are still fresh to determine that the alleged loss or other casualty had really
occurred. An officer or employee who fails to comply with these requirements shall
not be relieved of liability or allowed credit for any of such loss in the settlement of
his accounts.

The request for relief shall be filed with the provincial, city or municipal auditor by
the accountable officer within the statutory period of thirty (30) days or of such
longer period as may be allowed by the auditor. In general, the request shall be
accompanied by the following documents:
a.
the basic notice of loss showing the exact date of filing and receipt in the office
of the auditor concerned or the COA;
b.
affidavit of the accountable officer containing a statement of facts and
circumstances of the loss;
c.
affidavits of two (2) disinterested persons cognizant of the facts circumstances
of the loss;
d.
final investigation report of the office or department head, proper government
investigating agency and the auditor on the facts and circumstances surrounding the
loss;
e.
a list and description including book value, date of acquisition, property
number, account classification, condition of the property, and other additional
relevant information of the properties lost duly certified by the general services
officer, municipal or barangay treasurer, as the case may be;
f.
latest inventory and inspection report preceding the loss and inventory report
of properties remaining after the loss, duly witnessed by the provincial, city or
municipal auditor concerned;
g.
comment and/or recommendation of the local chief executive concerned on
the request;
h.
exact or accurate amount of government cash or book value of the property,
subject of the request for relief; and
i.
Memorandum Receipt, if any, covering the properties subject of the request.
The request for relief shall be coursed through the office or department head
concerned and general services officer, municipal or barangay treasurer, as the case
may be, for their comment and recommendation.
In case of bulk losses of supplies or property pertaining to more than one (1) office or
department, the request for relief shall be made by the local general services officer or
local treasurer concerned. The request shall also be accompanied by the latest
inventory report preceding the loss and the inventory report of properties remaining
after the loss, duly witnessed by the provincial; city or municipal auditor concerned.
The same officials shall request relief for losses occurring in transit.
In all cases, the request shall be endorsed by the local chief executive together with
his recommendations, to the provincial, city or municipal auditor.
In case of delay in the filing of the aforesaid notice and request, satisfactory
explanation or the reason(s) for such delay should be submitted, after which the
reasons/explanation given should be verified or confirmed by the provincial, city or
municipal auditor concerned.
If the occurrence of the loss has also been reported to other police agencies, like the
N.B.I., C.I.S., etc., the final investigation report thereon should be submitted.
Sec. 152.
Additional Information in Certain Cases. In cases where the loss of
government property is due to fire, theft, robbery/hold up, force majeure,
(earthquake, typhoons, etc.) or death of large cattle and other livestock, the request
for relief shall be accompanied by the documents hereunder enumerated in addition
to those required under Section 151:
1.
fire
1.1
the final report of the local Police/Fire Department or Station on the incident;
1.2
list or inventory of burned or destroyed properties as well as those properties
retrieved after the fire, stating therein the acquisition cost/book value of each item,
duly verified by the provincial, city or municipal auditor concerned;

1.3
authenticated picture(s) showing the site/office or government properties
razed by the fire; and
1.4
fire insurance policy, if any, covering subject property.
2.
theft or robbery/hold-up
2.1
the final police report on the theft or robbery case;
2.2
detailed list of government properties lost or destroyed as well as those
properties retrieved after the robbery incident disclosing the book value of each item
or exact amount of government money/cash involved, duly certified by the auditor
concerned; and
2.3
authenticated picture(s) taken relative to the incident.
3.
force majeure (earthquake, typhoon, etc.)
3.1
detailed list/inventory of lost or destroyed government properties or lost cash,
as well as those properties retrieved after the calamity, duly verified by the auditor
concerned; and
3.2
certification of the proper official of the local PAGASA or other similar
government agency on the actual occurrence of the calamity specifying therein the
approximate or exact time the incident happen and the areas or places affected
thereby.
4.
death of large cattle and other livestock
4.1
certificate of death of large cattle issued by proper official and duly verified by
the auditor concerned.
4.2
autopsy report, if any, of the proper veterinarian.
If the property is insured, information as to whether or not the local government unit
concerned has already been paid the proceeds of the said insurance policy shall be
disclosed. In the affirmative, evidence to this effect should be submitted. If the
property has not been insured, reasons to this effect shall be submitted.
In cases of theft or robbery including those with force upon things (destruction of
padlocks, doors, window jalousies, etc.), information as to whether or not the
premises of the local government unit concerned are manned by security guards shall
be submitted. In the affirmative, the respective sworn statements or affidavits of the
guards respecting the incident shall be obtained and submitted.
A certified copy of the contract of security/services entered into by and between the
local government unit and the security agency shall also be submitted.
If the security guard(s) is found to be negligent in the premises, information shall be
revealed on whether or not appropriate action has been instituted to enforce the civil
liability of the security guard and/or security agency concerned.
In cases of theft or robbery/hold-up of government cash/funds to be deposited with
or withdrawn from a depository bank or other local government unit, information as
to whether or not the accountable officer was escorted by a policeman or security
guard should also be submitted. In the negative, explanation to this effect should be
submitted.
Sec. 153.
Credit for Loss. Credit for losses involving less than fifty thousand
pesos (P50,000.00) shall be allowed by the COA director or provincial, city or
municipal auditor in accordance with the authority issued by the Chairman,
Commission on Audit. Those involving P50,000.00 or more and those not falling
within the authority of the regional director and provincial, city or municipal auditors
under existing COA regulations on the matter shall with the recommendation of the
auditor and regional director concerned, be forwarded to the Chairman, Commission
on Audit for his appropriate action.
Credit for losses shall be returned through the local chief executive to the local
accountant who shall on account thereof, drop the lost properties from the books of
accounts thru journal voucher attaching thereto the credit granted together with all

supporting documents. The local accountant shall furnish the general services officer,
municipal or barangay treasurer, as the case may be, and the accountable officer
concerned a copy of the journal voucher.
Sec. 154.
Responsibility of the Director of COA Regional Offices and the
Provincial, City or Municipal Auditors on Request for Relief Submitted to the
Commission on Audit for Resolution. In order to ensure or facilitate the evaluation
and resolution of application for relief from accountability, the COA Directors
concerned and/or the provincial, city or municipal auditor, shall first ascertain that
the information required under Section 151, and Section 152 whenever applicable, are
duly complied with and shall forward the same to the Commission on Audit with the
following:
a.
comment and/or recommendation of the COA Director/OIC and provincial,
city or municipal auditor, as the case may be, on the propriety of the request, together
with a full statement of material facts; and
b.
a categorical determination by the auditor concerned on the absence of fault or
negligence on the part of the accountable officer in the handling, safekeeping, etc. of
the funds and properties under his custody as evidenced by a recital of the
precautionary/security measures adopted to protect or safeguard them.
The comment and/or recommendation of the director and/or provincial/district
auditor concerned on the determination by the unit auditor on the absence of fault or
negligence on the part of the applicant shall also be submitted.
Sec. 155.
Central Record. The provincial or city general services officer,
municipal or barangay treasurer, as the case may be, shall maintain a central record
of all supplies or property of the local government. Computerization of records shall,
as much as practicable, be availed of.
Sec. 156.
Annual Inventory of Supplies or Property. The local chief executive
shall require an annual physical inventory of all supplies or property of the local
government unit as of December 31 of each year, to be conducted by office or
department by a committee of three (3) consisting of the representative of the local
chief executive as chairman and the general services officer, municipal or barangay
treasurer, as the case may be, and the supply accountable officer of the department or
officer concerned, as members. The inventory report shall be submitted to the local
chief executive and copy furnished the provincial, city or municipal auditor
concerned.
Sec. 157.
Role of the Auditor in Physical Inventory. The provincial, city or
municipal auditor or his duly authorized representative shall witness the inventory
taking referred to in Section 156.
Sec. 158.
Receipts of Issuances. All issuances shall be properly receipted as
follows:
a.
transfer of non-expendable supplies or property from one supply officer to
another supply officer shall be covered by Invoice Receipt (General Form 3-A, as
amended).
b.
transfer of non-expendable supplies or property from general services officer,
municipal or barangay treasurer, as the case may be, to the head of the department or
office shall be covered by Property Issue Slip (LGU Form No. 08);
c.
transfer of non-expandable supplies or property from head of the department
or office to the end-user shall be covered by a Memorandum Receipts (LGU Form No.
09);
d.
transfer of expendable supplies or property from the general services officer,
municipal or barangay treasurer, as the case may be, to the requisitioning department
or office shall be covered by Requisition and Issue Voucher (General Form 45-A), as
amended); and

e.
transfer of expendable supplies or property from head of the department or
supply officer to the end-user shall be receipted using Recapitulation form (LGU
Form No. 11).
The general services officer, municipal or barangay treasurer, as the case may be,
shall be furnished with a copy of General Form No. 30-A, LGU Form Nos. 09and 11.
Property Issue Slip and Memorandum Receipt shall be renewed every three (3) years.
Sec. 159.
Running and Test Inventory. Aside from the annual inventory, the local
chief executive shall order a running and test inventory or property under his
accountability at any time for the purpose of ascertaining the correctness of the
supplies or property records. Discrepancies or losses that may be disclosed thereby
shall immediately be reported to the provincial, city or municipal auditor for
appropriate action in accordance with these regulations.
Sec. 160.
Inventory in Cases of Changes of Accountable Officers. In cases of
change of accountable supply officers, an inventory of existing supplies or property
shall be taken jointly by the out-going and incoming accountable supply officers to
the witnessed by the provincial, city or municipal auditor concerned or his duly
authorized representative. Transfer of property shall be effected thru Invoice Receipts
for Property.
Sec. 161.
Property Clearances. When an employee is transferred to another
government office, retired, resigned, dismissed or separated from the service, he shall
be required to secure property clearance. The local chief executive shall prescribe the
form and procedure for property clearance.
TITLE V DISPOSAL OF SUPPLIES OR PROPERTY
Rule 21. General Policy on Disposal
Sec. 162.
When Supplies or Property shall be Disposed of. When supplies or
property of any local government unit have become unserviceable for any cause or are
no longer needed, the same shall be disposed of in accordance with the procedures
prescribed in these rules and regulations.
Sec. 163.
Responsibility for the Disposal of Supplies or Property. The provincial
or city general services officer or municipal or barangay treasurer, as the case may be,
shall be responsible for disposal of supplies or property of the local government.
Sec. 164.
Responsibility for the Disposal of Real Property, Buildings and Other
Physical Structures. The local chief executive or punong barangay, as the case may
be, shall be responsible for the disposal of real property, buildings and other physical
structures.
Sec. 165.
Public Auction as the Primary Mode of Disposal. Supplies or Property
which have become unserviceable or no longer needed shall be sold, whenever
applicable, at public auction, subject to applicable rules and regulations.
Sec. 166.
Other Methods of Disposal. For justifiable reasons, disposable supplies
and property may also be disposed of in the following manner:
a.
sale thru negotiation;
b.
transfer without cost to other offices or department or other government
agencies; and
c.
by destruction
Rule 22. Reporting of Disposable Supplies or Property
Sec. 167.
Disposal Procedures. When the supplies or property of a local
government unit have become unserviceable from any cause, or are no longer needed,
the officer immediately accountable thereof shall return the same to the head of the
department or office who shall cancel the corresponding Memorandum Receipt. If no
longer needed in the department, the head of the department or office shall return
the same to the general services officer, municipal or barangay treasurer, as the case
may be, with the use of Property Return Slip (LGU) Form No. 12). The General

services officer, municipal or barangay treasurer, as the case may be, shall through
the local chief executive, file an application for its disposal with the provincial, city or
municipal auditor who shall conduct an inspection and determination whether the
subject property is with or without value.
Sec. 168.
Forms to be Used. The following forms shall be used in the reporting of
disposable supplies or property:
a.
Inventory, Inspection and Appraisal (General Form No. 17-A, as amended)
shall be used whenever the supplies or property to be disposed are: (1) supplies in
stock accounts for consumption of the local government unit or for sale; (2)
equipment; (3) building and other physical structures; and
b.
Report of Waste Materials (General Form No. 61-A, as amended) shall be used
for disposable supplies or property not covered in Sub-Paragraph (a) of this section.
Sec. 169.
Responsibility of the Provincial, City or Municipal Auditor on
Disposable Property. The provincial, city or municipal auditor shall inspect the
supplies or property to be disposed of to determine whether the same are with value
or without value. He shall indicate his findings on the Inventory, Inspection and
Appraisal form and shall forward same to the Committee on Awards with his
recommendation. If the supplies or property are found to be valuable, he shall
recommend its sale thru public auction; otherwise, he shall recommend its
destruction in his presence.
Sec. 170.
Appraisal of Property by the Committee On Awards. Upon receipt of
the Inventory, Inspection and Appraisal form, the Committee on Awards shall
appraise the supplies or property recommended by the provincial, city or municipal
auditor to be disposed of which appraisal shall be considered as the floor price in the
public auction to be conducted for the purpose under the supervision of said
Committee.
Rule 23. Sale thru Public Auction
Sec. 171.
Invitation to Bid. The Committee on Awards shall issue the Invitation
to Bid (ITB) which shall contain, among others, the following:
a.
date of issuance;
b.
location of the supplies or property;
c.
quantity and adequate description of the supplies or property;
d.
statement of reservation or option on the part of the local government unit to
accept or reject any or all bids and to waive any formal defects in the bid; and
e.
clear instructions on how the bids are to be accomplished and submitted.
Sec. 172.
Publication of the Invitation to Bid. The invitation to bid shall be given
the widest publicity by sending copies to known and regular bidders in the locality
and by posting notices of the public bidding in at least three (3) accessible and
conspicuous places in the locality including the bulletin board provided for the
purpose, barangay halls, and market places. If the acquisition cost of the supplies or
property to be disposed of exceeds one hundred thousand pesos (P100,000.00) in the
case of provinces and cities, and fifty thousand pesos (P50,000.00) in the case of
municipalities, notices shall be published at least two (2) times within reasonable
period in a newspaper of general circulation in the locality.
Sec. 173.
Bond Requirement. Bid tenders or offers must be accompanied by
bidder's bond in cash or cashier's check in an amount equivalent to at least ten per
cent (10%) of the bid.
Sec. 174.
Refusal to Accept the Award Price. In case of unjustifiable refusal or
failure of the winning bidder to accept the award price within five (5) days from the
receipt of the official notice of the award, the bidder's bond posted shall be forfeited
in favor of the local government.

Sec. 175.
Withdrawal of Bids. A bidder may be allowed to withdraw his tender or
offer before the opening of the bids. His bid shall be returned to him un-opened.
Sec. 176.
Opening of Bids. The committee on Awards shall open all bids received
at the time, date and place set in the ITB. Bidders or their authorized representative
may witness the proceedings; Provided, That no bids shall be opened without the
presence of the provincial, city or municipal auditor or his duly authorized
representative who shall identify the bids submitted.
Sec. 177.
Evaluation of Bids. The Committee on Awards shall, within three (3)
working days from the date of the opening of the bids, decide the award and notify
the awardee.
Sec. 178.
Basis of Award. Award shall be given to the highest complying bidder,
provided the offer is not less than the appraised value of the property being sold.
Sec. 179.
When Bids or Offers are Lower than the Appraised Value. When the
bids received are lower than the appraised value or when there are no bidders, rebidding shall be conducted. If re-bidding in impracticable, the Committee on Awards
may cause the disposal of the property by sale through negotiation in accordance with
these regulations.
Rule 24. Sale thru Negotiation.
Sec. 180.
When Negotiated Sale may be Done. When public auction is
impracticable, negotiated sale may be resorted to at such price as determined by the
Committee on Awards.
Sec. 181.
Negotiated Sale Subject to COA Approval. When the acquisition or
transfer cost of supplies or property exceeds fifty thousand pesos (P50,000.00) in the
case of provinces and cities, and twenty-five thousand pesos (P25,000.00) in the case
of municipalities and barangays, the sale thru negotiation shall be subject to the
approval of the Commission on Audit or its duly authorized representative.
Sec. 182.
Who Undertakes the Sale. The Committee on Awards shall undertake
the negotiated sale.
Sec. 183.
Who Approves the Negotiated Sale. The Committee on Awards shall
approve the sale.
Sec. 184.
Transfer of Property with Costs to other Government Offices. Transfer
of property with costs to other government offices is considered as negotiated sale.
Accordingly, the provisions of these regulations pertaining to negotiated sale shall
apply.
Rule 25. Transfer Without Cost to other
Government Offices.
Sec. 185.
Transfer and Appraisal of Unserviceable or Property no Longer Needed.
Property which has become unserviceable or no longer needed by any local
government unit may be transferred without cost to another government office,
agency, subdivision, or instrumentality at an appraised valuation determined by the
local Committee on Awards.
Sec. 186.
Who shall Approve the Transfer. Transfer without cost of supplies or
property from local government unit to any other government agency shall be
approved as follows:
a.
transfer between local government. the sanggunian representing the
transferor and the local chief executive representing the transferee shall approve the
transfer; and
b.
transfer between local government and national government the sanggunian
shall approve for the local government and the head of the department or office of the
national government shall approve for the department or office of the national
government concerned.
The devolution of property referred to under Title One, Book I, of R.A. No. 7160, is
not within the context of this Section.

Rule 26. Condemnation

Sec. 187.
What Property shall be Condemned. Valueless property shall be
condemned either by burning, pounding, throwing beyond recovery, and the like. It
shall be the duty of the general services officer, municipal or barangay treasurer, as
the case may be, to ensure compliance with the requirement of this Section.
Sec. 188.
Who shall Decide on Condemnation. The local chief executive shall
authorize the condemnation upon the recommendation of the provincial, city or
municipal auditor.
Rule 27. Other Modes of Disposal
Sec. 189.
Donations to Charitable, Scientific, Educational or Cultural Association.
In exceptional cases and for meritorious reasons, disposable government property
may be donated to charitable, scientific, educational and cultural associations with
the approval of the sanggunian concerned.
Sec. 190.
Other Modes of Disposal Authorized By Law. Disposable supplies or
property or local government may be disposed of in such other manner as may be
authorized and prescribed by competent authority and/or as may be provided by law.
Rule 28. Payment and Delivery
Sec. 191.
Payment. Upon receipt of the notice of award, the awardee shall pay to
the local treasurer the amount of the award for which an official receipt shall be
issued.
Sec. 192.
Sales Invoice. A Sales Invoice (LGU) Form No. 13) listing the items to
be sold be shall be approved by the local chief executive and signed by the buyer. The
buyer shall acknowledge receipt of the items by signing in the sales invoice.
Sec. 193.
Delivery. The delivery shall be made to the awardee or his authorized
representative after the invoice price is fully paid as evidenced by an official receipt.
The delivery shall be effected by the general services officer or municipal or barangay
treasurer, as the case may be.
Rule 29. Dropping of Accounts
Sec. 194.
Return of Reports. After the disposal of the supplies or property, the
office of the general services officer or municipal or barangay treasurer, as the case
may be, shall return the properly accomplished Inventory, Inspection and Appraisal
form or the Report of Waste Materials duly acted upon together with a copy of the
Official Receipt (if disposal is for value received) to the local accountant concerned
informing him that the property listed may now be dropped from the book of
accounts of the department or office concerned.
Sec. 195.
Dropping of Book Value. After disposal, the book value of the supplies
or property shall be dropped from the book of accounts in accordance with existing
accounting and auditing rules and regulations.
TITLE VI MISCELLANEOUS PROVISIONS
AND ADMINISTRATIVE INSTRUCTIONS
Rule 30. Miscellaneous Provisions.
Sec. 196.
Lease of Spaces for Public Use. Availment of an office space or grounds
for public uses shall be thru sealed bid or negotiation if sealed bid has failed as
defined herein. The contract of lease of buildings and grounds for this purpose shall
be in writing and shall be approved by the sanggunian concerned. Such contract shall
run for a period of one (1) year coincident with the budget period, but may be subject
to renewal at the option of the local government. The terms and conditions of the
contract of lease for this purpose shall explicitly include the following:
a.
obligation to pay taxes due on the property rented shall remain with the owner
during the term of the contract;
b.
repairs of the buildings, including periodic repainting, shall be at the expense
of the property owner, however, minor repairs thereof such as changing of light

bulbs, repairs or leaks and the like, shall be at the expense of the local government
unit, provided that the total amount in each case does not exceed two thousand
(P2,000.00) pesos; and
c.
necessary partitioning to make the property fit for the purpose shall be
undertaken by the owner at his own expense. However, if the exigency of the service
so demands, necessary partitioning cost may be advanced by the local government to
be deducted from the rental immediately due and demandable.
Nothing contained herein shall be construed as authorizing permanent improvement
or major repair on leased property.
Sec. 197.
Disposal of Real Property and Improvements. Real estate and their
improvements owned by the local government units may be sold to other government
or private entity under sealed bids or by negotiation if sealed bid has failed as defined
herein at a price to be determined by the Committee on Awards. The contract of
conveyance shall be executed by the local chief executive in behalf of the local
government unit concerned in accordance with the formalities required by law on the
matter and shall be approved by the local sanggunian. The disposal shall also be
subject to the approval of the Commission on Audit regardless of the value of the
property to be disposed.
Expenses relative to the registration and transfer of ownership from the local
government to the vendee shall be borne by the vendee.
Sec. 198.
Lease of Government Spaces to Other Entities. Idle lands, buildings or
other physical structures of the local governments may be leased to other government
or private entity thru sealed bids or by negotiation if sealed bids have failed as
defined herein. The contract of lease which includes the following shall be executed in
accordance with the formalities required by law:
a.
the lease shall be required to deposit an amount equivalent to two (2) months
rental or Thirty thousand (P30,000.00) pesos whichever is higher to answer for
damages resulting from improper use of the leased property and an advance one (1)
month rental;
b.
the lessee shall promptly pay the monthly billings for facilities like electric,
water and telephone during the period of the lease, and shall be held answerable in
case of disconnection of said facilities due to his failure to pay the bills;
c.
the lessee shall surrender the building/space upon expiration of the lease
contract and respond for damages which the local government unit may suffer for his
failure to surrender the same;
d.
the leasee shall comply faithfully with the terms and conditions of the
agreement;
e.
in the event the building/space is deserted by the lessee before the expiration
of the lease without justifiable cause, the local government unit shall reserve the right
to enter and relet the same and receive the rentals corresponding to the unexpired
period of the lease; and
f.
the local government unit shall reserve the right to terminate the lease
contract for failure or refusal of the lessee to pay the rentals agreed upon during the
period stipulated in the lease contract or for violation of the conditions of the contract
by the lessee.
The guidelines promulgated by the government agency concerned on the
reasonableness of rental rate of buildings and other structure may be availed of by the
Committee on Awards in determining the rental rates to be approved by sanggunian.
Sec. 199.
Lease of Equipment. Idle equipment of the local governments may be
leased to other government or private entity thru sealed bids or by negotiation if
sealed bids have failed as defined herein. The contract of lease which includes the
following shall be executed in accordance with the formalities required by law:

a.
the lease shall be on fully maintained basis without fuel and operator;
b.
a lease contract longer than one (1) month shall be supported by a surety bond
to guarantee the replacement cost of the property in case of loss, cost of repair that
are not due to normal wear and tear, replacement cost of missing parts, tools,
attachments and accessories originally issued with the property.
c.
the rental must be paid in advance or the lessee shall put up a domestic letter
of credit to guarantee the payment of the rental for the period of lease;
d.
the mobilization cost from the lessor's yard to project site and the
demobilization cost from project site to the lessor's yard shall be borne by the lessee;
e.
the lessee shall be liable for compensation and lawsuits, if any, arising from
injury or damage caused to any person or property by reason of the use of the
equipment during the period of the lease;
f.
a daily basis lease shall correspond to eight (8) hours use and any usage in
excess of eight (8) hours shall be considered overtime and corresponding additional
rental shall be charged;
g.
a monthly basis lease shall be understood to correspond to one hundred sixty
(160) hours use per month; and
h.
a proportionate rental shall be collected on the actual operating hours in
excess of the one hundred sixty (160) referred to above regardless of whether the
property is in use or not.
Provided, That the rental rate to be determined by the Committee on Awards and
approved by sanggunian shall in no case be below the daily rates prescribed by a
proper government agency, if any.
The phrase "rental day" refers to a continuous eight (8) hours workable period within
a day of twenty-four (24) hours, excluding mealtime.
The foregoing provisions notwithstanding, no contract of lease shall be entered into
unless the general services officer, municipal or barangay treasurer, as the case may
be, shall certify that the property to be leased is not needed for any purpose by any
department or office of the local government during the duration of the lease.
Sec. 200.
Discounting of Rental Rates. The rates of rental may be reduced as the
efficiency of the equipment or machinery subject of a lease contract becomes lesser
on account of age or obsolescence; Provided, That no such reduction shall be allowed
during the first three (3) years from the date of acquisition of the property. Provided
further, That the maximum discount shall not exceed twenty-five percent (25%) of
the property's normal rental rate in accordance with the following schedule:
Age Based on
CrawlerDate of
Pneumatic-Mounted
Mounted
Acquisition Units Units
4 years old 5%
5%
5 years old 10% 10%
6 years old 15% 15%
7 years old 25% 25%
Provided finally; That newly rehabilitated property shall be classified under the
category of five (5) years old and shall have a discount rate of ten per cent (10%) for
the first year, fifteen percent (15%) for the second year, and twenty-five per cent
(25%) thereafter. The rate of reduction in rental shall be determined by the
Committee on Awards and approved by sanggunian if the age of the property which
has not undergone any rehabilitation is more than seven (7) years old.
Sec. 201.
Disposal of Firearms. Disposal of firearms and explosive weapons shall
be subject to the approval of the Director General, Philippine National Police.
Sec. 202.
Properties Imported Free of Duties and Taxes. 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.
Sec. 203.
Transitory Provisions. All supplies or property issued or assigned to the
different departments or office of the local government units shall be deemed ipso
facto transferred to the person primarily accountable and that the person in
possession of or having custody of said supplies or property shall become
immediately accountable therefor upon the effectivity of Republic Act No. 7160. It
shall be the duty of the general services officer, municipal or barangay treasurer, as
the case may be, to effect said transfer in the manner prescribed herein.
Rule 31. Administrative Instructions
Sec. 204.
Establishment of an Archival System. Immediately upon the effectivity
of these regulations, 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
report, 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.
Sec. 205.
Issuance of Guidelines. The local chief executive may issue guidelines
as may be deemed necessary for the proper and effective implementation of these
regulations.
Sec. 206.
Separability and Repealing Clause. Any provision of these rules and
regulations which shall be declared illegal by a court of competent jurisdiction shall
not affect the other provisions hereof.
Joint Department Order No. 1-75, dated August 19, 1975, is deemed superseded.
All other Circulars, Memoranda and regulations inconsistent or in conflict with the
provisions of these rules and regulations are hereby repealed, modified and/or
amended accordingly insofar as applicable to local governments.
Sec. 207.
Effectivity. These rules and regulations shall take effect immediately.
Approved: October 20, 1992
APPENDIX "A"
LGU Form No. 01 ANNNUAL PROCUREMENT PLAN
APPENDIX "B"
LGU Form No. 02 PROCUREMENT PROGRAM
APPENDIX "C"
LGU Form No. 03 AMENDATORY PROCUREMENT PLAN
APPENDIX "D"
LGU Form No. 04 AMENDATORY PROCUREMENT PROGRAM
APPENDIX "E"
Gen. Form 45(A) REQUISITION AND ISSUE VOUCHER
APPENDIX "F"
LGU Form No. 05 PURCHASE REQUEST
APPENDIX "G"
LGU Form No. 06 PURCHASE ORDER
APPENDIX "H"
LGU Form No. 07 REPORT OF UTILIZATION

APPENDIX "I"
LGU Form No. 08 PROPERTY ISSUE SLIP
APPENDIX "J"
LGU Form No. 09 MEMORANDUM RECEIPT FOR SEMI-EXPENDABLE AND
NON-EXPENDABLE SUPPLIES OR PROPERTY
APPENDIX "K"
LGU For No. 10 SEMI-ANNUAL REPORT OF SUPPLIES ISSUED
APPENDIX "L"
Gen. Form No. 30-A INVOICE RECEIPT FOR PROPERTY
APPENDIX "M"
LGU Form No. 11 RECAPITULATION
APPENDIX "N"
LGU Form No. 12 PROPERTY RETURN SLIP
APPENDIX "O"
Gen. Form No. 17-A INVENTORY, INSPECTION AND APPRAISAL OF
UNSERVICEABLE PROPERTY
APPENDIX "P"
Gen. Form No. 61-A REPORT OF WASTE MATERIALS
APPENDIX "Q"
LGU Form No. 13 SALES INVOICE FOR SUPPLIES/PROPERTY