Republic Act No. 7160

• Section 1  Title.

  This Act shall be known and cited as the "Local Government Code of 1991".

• Section 2  Declaration of Policy.
  • a

    It is hereby declared the policy of the State that the territorial and political subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make them more effective partners in the attainment of national goals. Toward this end, the State shall provide for a more responsive and accountable local government structure instituted through a system of decentralization whereby local government units shall be given more powers, authority, responsibilities, and resources. The process of decentralization shall proceed from the National Government to the local government units.

  • b

    It is also the policy of the State to ensure the accountability of local government units through the institution of effective mechanisms of recall, initiative and referendum.

  • c

    It is likewise the policy of the State to require all national agencies and offices to conduct periodic consultations with appropriate local government units, nongovernmental and people's organizations, and other concerned sectors of the community before any project or program is implemented in their respective jurisdictions.

• Section 3  Operative Principles of Decentralization.

  The formulation and implementation of policies and measures on local autonomy shall be guided by the following operative principles:

  • a

    There shall be an effective allocation among the different local government units of their respective powers, functions, responsibilities, and resources;

  • b

    There shall be established in every local government unit an accountable, efficient, and dynamic organizational structure and operating mechanism that will meet the priority needs and service requirements of its communities;

  • c

    Subject to civil service law, rules and regulations, local officials and employees paid wholly or mainly from local funds shall be appointed or removed, according to merit and fitness, by the appropriate appointing authority;

  • d

    The vesting of duty, responsibility, and accountability in local government units shall be accompanied with provision for reasonably adequate resources to discharge their powers and effectively carry out their functions; hence, they shall have the power to create and broaden their own sources of revenue and the right to a just share in national taxes and an equitable share in the proceeds of the utilization and development of the national wealth within their respective areas;

  • e

    Provinces with respect to component cities and municipalities, and cities and municipalities with respect to component barangays, shall ensure that the acts of their component units are within the scope of their prescribed powers and functions;

  • 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 and extension of adequate technical and material assistance to less developed and deserving local government units;

  • l

    The participation of the private sector in local governance, particularly in the delivery of basic services, shall be encouraged to ensure the viability of local autonomy as an alternative strategy for sustainable development; and

  • m

    The national government shall ensure that decentralization contributes to the continuing improvement of the performance of local government units and the quality of community life.

• Section 4  Scope of Application.

  This Code shall apply to all provinces, cities, municipalities, barangays, and other political subdivisions as may be created by law, and, to the extent herein provided, to officials, offices, or agencies of the national government.

• Section 5  Rules of Interpretation.

  In the interpretation of the provisions of this Code, the following rules shall apply:

  • a

    Any provision on a power of a local government unit shall be liberally interpreted in its favor, and in case of doubt, any question thereon shall be resolved in favor of devolution of powers and of the lower local government unit. Any fair and reasonable doubt as to the existence of the power shall be interpreted in favor of the local government unit concerned;

  • b

    In case of doubt, any tax ordinance or revenue measure shall be construed strictly against the local government unit enacting it, and liberally in favor of the taxpayer. Any tax exemption, incentive or relief granted by any local government unit pursuant to the provisions of this Code shall be construed strictly against the person claiming it.

  • c

    The general welfare provisions in this Code shall be liberally interpreted to give more powers to local government units in accelerating economic development and upgrading the quality of life for the people in the community;

  • d

    Rights and obligations existing on the date of effectivity of this Code and arising out of contracts or any other source of 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.

• Section 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.

• Section 7  Creation and Conversion.

  As a general rule, the creation of a local government unit or its conversion from one level to another level shall be based on verifiable indicators of viability and projected capacity to provide services, to wit:

  • a  Income.

    It must be sufficient, based on acceptable standards, to provide for all essential 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).

• Section 8  Division and Merger.

  Division and merger of existing local government units shall comply with the same requirements herein prescribed for their creation: Provided, however, That such division shall not reduce the income, population, or land area of the local government unit or units concerned to less than the minimum requirements prescribed in this Code: Provided, further, That the income classification of the original local government unit or units shall not fall below its current income classification prior to such division.

  • The income classification of local government units shall be updated within six (6) months from the effectivity of this Code to reflect the changes in their financial position resulting from the increased revenues as provided herein.

• Section 9  Abolition of Local Government Units.

  A local government unit may be abolished when its income, population, or land area has been irreversibly reduced to less than the minimum standards prescribed for its creation under Book III of this Code, as certified by the national agencies mentioned in Section 7 hereof to Congress or to the sanggunian concerned, as the case may be.

  • The law or ordinance abolishing a local government unit shall specify the province, city, municipality, or barangay with which the local government unit sought to be abolished will be incorporated or merged.

• Section 10  Plebiscite Requirement.

  No creation, division, merger, abolition, or substantial alteration of boundaries of local government units shall take effect unless approved by a majority of the votes cast in a plebiscite called for the purpose in the political unit or units directly affected. Said plebiscite shall be conducted by the Commission on Elections (COMELEC) within one hundred twenty (120) days from the date of effectivity of the law or ordinance effecting such action, unless said law or ordinance fixes another date.

• Section 11  Selection and Transfer of Local Government Site, Offices and Facilities.
  • a

    The law or ordinance creating or merging local government units shall specify the seat of government from where governmental and corporate services shall be delivered. In selecting said site, factors relating to geographical centrality, accessibility, availability of transportation and communication facilities, drainage and sanitation, development and economic progress, and other relevant considerations shall be taken into account.

  • b

    When conditions and developments in the local government unit concerned have significantly changed subsequent to the establishment of the seat of government, its sanggunian may, after public hearing and by a vote of two-thirds (2/3) of all its members, transfer the same to a site better suited to its needs. Provided, however, That no such transfer shall be made outside the territorial boundaries of the local government unit concerned.

    • The old site, together with the improvements thereon, may be disposed of by sale or lease or converted to such other use as the sanggunian concerned may deem beneficial to the local government unit concerned and its inhabitants.

  • c

    Local government offices and facilities shall not be transferred, relocated, or converted to other uses unless public hearings are first conducted for the purpose and the concurrence of the majority of all the members of the sanggunian concerned is obtained.

• Section 12  Government Centers.

  Provinces, cities, and municipalities shall endeavor to establish a government center where offices, agencies, or branches of the National Government, local government units, or government-owned or -controlled corporations may, as far as practicable, be located. In designating such a center, the local government unit concerned shall take into account the existing facilities of national and local agencies and offices which may serve as the government center as contemplated under this Section. The National Government, local government unit or government-owned or -controlled corporation concerned shall bear the expenses for the construction of its buildings and facilities in the government center.

• Section 13  Naming of Local Government Units and Public Places, Streets and Structures.
  • a

    The sangguniang panlalawigan may, in consultation with the Philippine Historical Commission (PHC), change the name of the following within its territorial jurisdiction:

    • 1

      Component cities and municipalities, upon the recommendation of the sanggunian concerned;

    • 2

      Provincial roads, avenues, boulevards, 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.

• Section 14  Beginning of Corporate Existence.

  When a new local government unit is created, its corporate existence shall commence upon the election and qualification of its chief executive and a majority of the members of its sanggunian, unless some other time is fixed therefor by the law or ordinance creating it.

• Section 15  Political and Corporate Nature of Local Government Units.

  Every local government unit created or recognized under this Code is a body politic and corporate endowed with powers to be exercised by it in conformity with law. As such, it shall exercise powers as a political subdivision of the national government and as a corporate entity representing the inhabitants of its territory.

• Section 16  General Welfare.

  Every local government unit shall exercise the powers expressly granted, those necessarily implied 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.

• Section 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 a 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, multi-purpose 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 seeding materials for aquaculture; palay, corn, and vegetable seed farms; medicinal plant gardens; fruit tree, coconut, and other kinds of seedling nurseries; demonstration farms; quality control of copra and improvement and development of local distribution channels, preferably through cooperatives; interbarangay irrigation systems; water and soil resource 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 forests 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 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 diseases; dairy farms, livestock markets, animal breeding stations, and artificial insemination centers; and assistance in the organization of farmers' and fishermen's cooperatives and other collective organizations, as well as the transfer of appropriate technology;

      • 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-hydroelectric 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 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.

• Section 18  Power to Generate and Apply Resources.

  Local government units shall have the power and authority to establish an organization that shall be responsible for the efficient and effective implementation of their development plans, program objectives and priorities; to create their own sources of revenues and to levy taxes, fees, and charges which shall accrue exclusively for their use and disposition and which shall be retained by them; to have a just share in national taxes which shall be automatically and directly released to them without need of any further action; to have an equitable share in the proceeds from the utilization and development of the national wealth and resources within their respective territorial jurisdictions including sharing the same with the inhabitants by way of direct benefits; to acquire, develop, lease, encumber, alienate, or otherwise dispose of real or personal property held by them in their proprietary capacity and to apply their resources and assets for productive, developmental, or welfare purposes, in the exercise or furtherance of their governmental or proprietary powers and functions and thereby ensure their development into self-reliant communities and active participants in the attainment of national goals.

• Section 19  Eminent Domain.

  A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws: Provided, however, That the power of eminent domain may not be exercised unless a valid and definite offer has been previously made to the owner, and such offer was not accepted: Provided, further, That the local government unit may immediately take possession of the property upon the filing of the expropriation proceedings and upon making a deposit with the proper court of at least fifteen percent (15%) of the fair market value of the property based on the current tax declaration of the property to be expropriated: Provided, finally, That, the amount to be paid for the expropriated property shall be determined by the proper court, based on the fair market value at the time of the taking of the property.

• Section 20  Reclassification of Lands.
  • a

    A city or municipality may, through an ordinance passed by the sanggunian after conducting public hearings for the purpose, authorize the reclassification of agricultural lands and provide for the manner of their utilization or disposition in the following cases: (1) when the land ceases to be economically feasible and sound for agricultural purposes as determined by the Department of Agriculture or (2) where the land shall have substantially greater economic value for residential, commercial, or industrial purposes, as determined by the sanggunian concerned: Provided, That such reclassification shall be limited to the following percentage of the total agricultural land area at the time of the passage of the ordinance:

    • 1

      For highly urbanized and independent component cities, fifteen percent (15%);

    • 2

      For component cities and first to 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

    Where approval by a national agency is required for reclassification, such approval shall not be unreasonably withheld. Failure to act on a proper and complete application for reclassification within three (3) months from receipt of the same shall be deemed as approval thereof.

  • e

    Nothing in this Section shall be construed as repealing, amending, or modifying in any manner the provisions of R.A. No. 6657.

• Section 21  Closure and Opening of Roads.
  • a

    A local government unit may, pursuant to an ordinance, permanently or temporarily close or open any local road, alley, park, or square falling within its jurisdiction: Provided, however, That in case of permanent closure, such ordinance must be approved by at least two-thirds (2/3) of all the members of the sanggunian, and when necessary, an adequate substitute for the public facility that is subject to closure is provided.

  • b

    No such way or place or any part thereof shall be permanently closed without making provisions for the maintenance of public safety therein. A property thus permanently withdrawn from public use may be used or conveyed for any purpose for which other real property belonging to the local government unit concerned may be lawfully used or conveyed: Provided, however, That no freedom park shall be closed permanently without provision for its transfer or relocation to a new site.

  • c

    Any national or local road, alley, park, or square may be temporarily closed during an actual emergency, or fiesta celebrations, public rallies, agricultural or industrial fairs, or an undertaking of public works and highways, telecommunications, and waterworks projects, the duration of which shall be specified by the local chief executive concerned in a written order: Provided, however, That no national or local road, alley, park, or square shall 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.

• Section 22  Corporate Powers.
  • a

    Every local government unit, as a corporation, shall have the following powers:

    • 1

      To have continuous succession in its corporate name;

    • 2

      To sue and be sued;

    • 3

      To have and use a corporate seal;

    • 4

      To acquire and convey real or personal property;

    • 5

      To enter into contracts; and

    • 6

      To exercise such other powers as are granted to corporations, subject to the limitations provided in this Code and other laws.

  • b

    Local government units may continue using, modify, or change their existing corporate seals: Provided, That newly established local government units or those without corporate seals may create their own corporate seals which shall be registered with the Department of the Interior and Local Government: Provided, further, That any change of corporate seal shall also be registered as provided hereon.

  • 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.

• Section 23  Authority to Negotiate and Secure Grants.

  Local chief executives may, upon authority of the sanggunian, negotiate and secure financial grants or donations in kind, in support of the basic services or facilities enumerated under Section 17 hereof, from local and foreign assistance agencies without necessity of securing clearance or approval therefor from any department, agency, or office of the National Government or from any higher local government unit: Provided, That projects financed by such grants or assistance with national security implications shall be approved by the national agency concerned: Provided, further, That when such national agency fails to act on the request for approval within thirty (30) days from receipt thereof, the same shall be deemed approved.

  • The local chief executive shall, within thirty (30) days upon signing of such grant agreement or deed of donation, report the nature, amount, and terms of such assistance to both Houses of Congress and the President.

• Section 24  Liability for Damages.

  Local government units and their officials are not exempt from liability for death or injury to persons or damage to property.

• Article I  National Government and Local Government Units
  • Section 25  National Supervision over Local Government Units.
    • a

      Consistent with the basic policy on local autonomy, the President shall exercise general supervision over local government units to ensure that their acts are within the scope of their prescribed powers and functions.

      • The President shall exercise supervisory authority directly over provinces, highly urbanized cities, and independent component cities; through the province with respect to component cities and municipalities; and through the city and municipality with respect to barangays.

    • b

      National agencies and offices with project implementation functions shall coordinate with one another and with the local government units concerned in the discharge of these functions. They shall ensure the participation of local government units both in the planning and implementation of said national projects.

    • c

      The President may, upon request of the local government unit concerned, direct the appropriate national agency to provide financial, technical, or other forms of assistance to the local government unit. Such assistance shall be extended at no extra cost to the local government unit concerned.

    • d

      National agencies and offices including government-owned or -controlled corporations with field units or branches in a province, city, or municipality shall furnish the local chief executive concerned, for his information and guidance, monthly reports including duly certified budgetary allocations and expenditures.

  • Section 26  Duty of National Government Agencies in the Maintenance of Ecological Balance.

    It shall be the duty of every national agency or government-owned or -controlled corporation authorizing or involved in the planning and implementation of any project or program that may cause pollution, climatic change, depletion of non-renewable resources, loss of cropland, rangeland, or forest cover, and extinction of animal or plant species, to consult with the local government units, nongovernmental organizations, and other sectors concerned and explain the goals and objectives of 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.

  • Section 27  Prior Consultations Required.

    No project or program shall be implemented by government authorities unless the consultations mentioned in Sections 2 (c) and 26 hereof are complied with, and prior approval of the sanggunian concerned is obtained: Provided, That occupants in areas where such projects are to be implemented shall not be evicted unless appropriate relocation sites have been provided, in accordance with the provisions of the Constitution.

• Article II  Relations with the Philippine National Police
  • Section 28  Powers of Local Chief Executives over the Units of the Philippine National Police.

    The extent of operational supervision and control of local chief executives over the police force, fire protection unit, and jail management personnel assigned in their respective jurisdictions shall be governed by the provisions of Republic Act Numbered Sixty-nine hundred seventy-five (R.A. No. 6975), otherwise known as "The Department of the Interior and Local Government Act of 1990", and the rules and regulations issued pursuant thereto.

• Article III  Inter-Local Government Relations
  • Section 29  Provincial Relations with Component Cities and Municipalities.

    The province, through the governor, shall ensure that every component city and municipality within its territorial jurisdiction acts within the scope of its prescribed powers and functions. Highly urbanized cities and independent component cities shall be independent of the province.

  • Section 30  Review of Executive Orders.
    • a

      Except as otherwise provided under the Constitution and special statutes, the governor shall review all executive orders promulgated by the component city or municipal mayor within his jurisdiction. The city or municipal mayor shall review all executive orders promulgated by the punong barangay within his jurisdiction. Copies of such orders shall be forwarded to the governor or the city or municipal mayor, as the case may be, within three (3) days from their issuance. In all instances of review, the local chief executive concerned shall ensure that such executive orders are within the powers granted by law and in conformity with provincial, city, or municipal ordinances.

    • b

      If the governor or the city or municipal mayor fails to act on said executive orders within thirty (30) days after their submission, the same shall be deemed consistent with law and therefore valid.

  • Section 31  Submission of Municipal Questions to the Provincial Legal Officer or Prosecutor.

    In the absence of a municipal legal officer, the municipal government may secure the opinion of the provincial legal officer, and in the absence of the latter, that of the provincial prosecutor on any legal question affecting the municipality.

  • Section 32  City and Municipal Supervision over Their Respective Barangays.

    The city or municipality, through the city or municipal mayor concerned, shall exercise general supervision over component barangays to ensure that said barangays act within the scope of their prescribed powers and functions.

  • Section 33  Cooperative Undertakings Among Local Government Units.

    Local government units may, through appropriate ordinances, group themselves, consolidate, or coordinate their efforts, services, and resources for purposes commonly beneficial to them. In support of such undertakings, the local government units involved may, upon approval by the sanggunian concerned after a public hearing conducted for the purpose, contribute funds, real estate, equipment, and other kinds of property and appoint or assign personnel under such terms and conditions as may be agreed upon by the participating local units through Memoranda of Agreement.

• Section 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.

• Section 35  Linkages with People's and Non-Governmental Organizations.

  Local government units may enter into joint ventures and such other cooperative arrangements with people's and 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, diversify agriculture, spur rural industrialization, promote ecological balance, and enhance the economic and social well-being of the people.

• Section 36  Assistance to People's and 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.

• Section 37  Local Prequalification, Bids and Awards Committee (Local PBAC).
  • a

    There is hereby created a local prequalification, bids and awards committee in every province, city, and municipality, which shall be primarily responsible for the conduct of prequalification of contractors, bidding, evaluation of bids, and the recommendation of awards concerning local infrastructure projects. The governor or the city or municipal mayor shall act as the chairman with the following as members:

    • 1

      The chairman of the appropriations committee of the sanggunian concerned;

    • 2

      A representative of the minority party in the sanggunian concerned, if any, or if there be none, one (1) chosen by said sanggunian from among its members;

    • 3

      The local treasurer;

    • 4

      Two (2) representatives of 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.

• Section 38  Local Technical Committee.
  • a

    There is hereby created a local technical committee in every province, city and municipality to provide technical assistance to the local prequalification, bids and awards committees. It shall be composed of the provincial, city or municipal engineer, the local planning and development coordinator, and such other officials designated by the local prequalification, bids and awards committee.

  • b

    The chairman of the local technical committee shall be designated by the local prequalification, bids and awards committee and shall attend its meeting in order to present the reports and recommendations of the local technical committee.

• Section 39  Qualifications.
  • a

    An elective local official must be a citizen of the Philippines; a registered voter in the barangay, municipality, city, or province or, in the case of a member of the sangguniang panlalawigan, sangguniang panlungsod, or 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.

• Section 40  Disqualifications.

  The following persons are disqualified from running for any elective local position:

  • a

    Those sentenced by final judgment for an offense involving moral turpitude or for an offense punishable by one (1) year or more of imprisonment, within two (2) years after serving sentence;

  • b

    Those removed from office as a result of an administrative case;

  • c

    Those convicted by final judgment for violating the oath of allegiance to the Republic;

  • d

    Those with dual citizenship;

  • e

    Fugitives from justice in criminal or non-political cases here or abroad;

  • f

    Permanent residents in a foreign country or those who have acquired the right to reside abroad and continue to avail of the same right after the effectivity of this Code; and

  • g

    The insane or feeble-minded.

• Section 41  Manner of Election.
  • a

    The governor, vice-governor, city mayor, city vice-mayor, municipal mayor, municipal vice-mayor, and punong barangay shall be elected at large in their respective units by the qualified voters therein. However, the sangguniang kabataan chairman for each barangay shall be elected by the registered voters of the katipunan ng kabataan, as provided in this Code.

  • b

    The regular members of the sangguniang panlalawigan, sangguniang panlungsod, and sangguniang bayan shall be elected by district, as may be provided for by law. Sangguniang barangay members shall be elected at large. The presidents of the leagues of sanggunian members of component cities and municipalities shall serve as ex officio members of the sangguniang panlalawigan concerned. The presidents of the liga ng mga barangay and the pederasyon ng mga sangguniang kabataan elected by their respective chapters, as provided in this Code, shall serve as ex officio members of the sangguniang panlalawigan, sangguniang panlungsod, and sangguniang bayan.

  • c

    In addition thereto, there shall be one (1) sectoral representative from the women, one (1) from the workers, and one (1) from any of the following sectors: the urban poor, indigenous cultural communities, disabled persons, or any other sector as may be determined by the sanggunian concerned within ninety (90) days prior to the holding of the next local elections as may be provided for by law. The COMELEC shall promulgate the rules and regulations to effectively provide for the election of such sectoral representatives.

• Section 42  Date of Election.

  Unless otherwise provided by law, the elections for local officials shall be held every three (3) years on the second Monday of May.

• Section 43  Term of Office.
  • a

    The term of office of all local elective officials elected after the effectivity of this Code shall be three (3) years, starting from noon of June 30, 1992 or such date as may be provided for by law, except that of elective barangay officials: Provided, That all local officials first elected during the local elections immediately following the ratification of the 1987 Constitution shall serve until noon of June 30, 1992.

  • b

    No local elective official shall serve for more than three (3) consecutive terms in the same position. Voluntary renunciation of the office for any length of time shall not be considered as an interruption in the continuity of service for the full term for which the elective official concerned was elected.

  • c

    The term of office of barangay officials and members of the sangguniang kabataan shall be for three (3) years, which shall begin after the regular election of barangay officials on the second Monday of May 1994.

• Section 44  Permanent Vacancies in the Offices of the Governor, Vice-Governor, Mayor, and Vice-Mayor.
  • a

    If a permanent vacancy occurs in the office of the governor or mayor, the vice-governor or vice-mayor concerned shall become the governor or mayor. If a permanent vacancy occurs in the offices of the governor, vice-governor, mayor, or vice-mayor, the highest ranking sanggunian member or, in case of his permanent inability, the second highest ranking sanggunian member, shall become the governor, vice-governor, mayor or vice-mayor, as the case may be. Subsequent vacancies in the said office shall be filled automatically by the other sanggunian members according to their ranking as defined herein.

  • b

    If a permanent vacancy occurs in the office of the punong barangay, the highest ranking sanggunian barangay member or, in case of his permanent inability, the second highest ranking sanggunian member, shall become the punong barangay.

  • c

    A tie between or among the highest ranking sanggunian members shall be resolved by the drawing of lots.

  • d

    The successors as defined herein shall serve only the unexpired terms of their predecessors.

  • For purposes of this Chapter, a permanent vacancy arises when an elective local official fills a higher vacant office, refuses to assume office, fails to qualify, dies, is removed from office, voluntarily resigns, or is otherwise permanently incapacitated to discharge the functions of his office.

  • For purposes of succession as provided in this Chapter, ranking in the sanggunian shall be determined on the basis of the proportion of votes obtained by each winning candidate to the total number of registered voters in each district in the immediately preceding local election.

• Section 45  Permanent Vacancies in the Sanggunian.
  • a

    Permanent vacancies in the sanggunian where automatic succession 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 therefor.

  • c

    In case the permanent vacancy is caused by a sanggunian member who does not belong to any political party, the local chief executive shall, upon recommendation of the sanggunian concerned, appoint a qualified person to fill the vacancy.

  • d

    In case of vacancy in the representation of the youth and the barangay in the sanggunian, said vacancy shall be filled automatically by the official next in rank of the organization concerned.

• Section 46  Temporary Vacancy in the Office of the Local Chief Executive.
  • a

    When the governor, city or municipal mayor, or punong barangay is temporarily incapacitated to perform his duties for physical or legal reasons such as, but not limited to, leave of absence, travel abroad, and suspension from office, the vice-governor, city or municipal vice-mayor, or the highest ranking sangguniang barangay member shall automatically exercise the powers and perform the duties and functions of the local chief executive concerned, except the power to appoint, suspend, or dismiss employees which can only be exercised if the period of temporary incapacity exceeds thirty (30) working days.

  • b

    Said temporary incapacity shall terminate upon submission to the appropriate sanggunian of a written declaration by the local chief executive concerned that he has reported back to office. In cases where the temporary incapacity is due to legal causes, the local chief executive concerned shall also submit necessary documents showing that said legal causes no longer exist.

  • c

    When the incumbent local chief executive is traveling within the country but outside his territorial jurisdiction for a period not exceeding three (3) consecutive days, he may designate in writing the officer-in-charge of the said office. Such authorization shall specify the powers and functions that the local official concerned shall exercise in the absence of the local chief executive except the power to appoint, suspend, or dismiss employees.

  • d

    In the event, however, that the local chief executive concerned fails or refuses to issue such authorization, the vice-governor, the city or municipal vice-mayor, or the highest ranking sangguniang barangay member, as the case may be, shall have the right to assume the powers, duties, and functions of the said office on the fourth (4th) day of absence of the said local chief executive, subject to the limitations provided in subsection (c) hereof.

  • e

    Except as provided above, the local chief executive shall in no case authorize any local official to assume the powers, duties, and functions of the office, other than the vice-governor, the city or municipal vice-mayor, or the highest ranking sangguniang barangay member, as the case may be.

• Section 47  Approval of Leaves of Absence.
  • a

    Leaves of absence of local elective officials shall be approved as follows:

    • 1

      Leaves of absence of the governor and the mayor of a highly urbanized city or an independent component city shall be approved by the President or his duly authorized representative;

    • 2

      Leaves of absence of 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.

• Section 48  Local Legislative Power.

  Local legislative power shall be exercised by the sangguniang panlalawigan for the province; the sangguniang panlungsod for the city; the sangguniang bayan for the municipality; and the sangguniang barangay for the barangay.

• Section 49  Presiding Officer.
  • a

    The vice-governor shall be the presiding officer of the sangguniang panlalawigan; the city vice-mayor, of the sangguniang panlungsod; the municipal vice-mayor of the sangguniang bayan; and the punong barangay, of the sangguniang barangay. The presiding officer shall vote only to break a tie.

  • b

    In the event of the inability of the regular presiding officer to preside at a sanggunian session, the members present and constituting a quorum shall elect from among themselves a temporary presiding officer. He shall certify within ten (10) days from the passage of ordinances enacted and resolutions adopted by the sanggunian in the session over which he temporarily presided.

• Section 50  Internal Rules of Procedure.
  • a

    On the first regular session following the election of its members and within ninety (90) days thereafter, the sanggunian concerned shall adopt or update its existing rules of procedure.

  • b

    The rules of procedure shall provided 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.

• Section 51  Full Disclosure of Financial and Business Interests of Sanggunian Members.
  • a

    Every sanggunian member shall, upon assumption to office, make a full disclosure of his business and financial interests. He shall also disclose any business, financial, or professional relationship or any relation by affinity or consanguinity within the fourth civil degree, which he may have with any person, firm, or entity affected by any ordinance or resolution under consideration by the sanggunian of which he is a member, which relationship may result in conflict of interest. Such relationship shall include:

    • 1

      Ownership of stock or capital, or investment, in the entity or firm to which the ordinance or resolution may apply; and

    • 2

      Contracts or agreements with any person or entity which the ordinance or resolution under consideration may affect.

    • In the absence of a specific constitutional or statutory provision applicable to this situation, "conflict of interest" refers in general to one where it may be reasonably deduced that a member of a sanggunian may not act in the public interest due to some private, pecuniary, or other personal considerations that may tend to affect his judgment to the prejudice of the service or the public.

  • b

    The disclosure required under this Act shall be made in writing and submitted to the secretary of the sanggunian or the secretary of the committee of which he is a member. The disclosure shall, in all cases, form part of the record of the proceedings and shall be made in the following manner:

    • 1

      Disclosure shall be made before the member participates in the deliberations on the ordinance or resolution under consideration: Provided, That, if the member did not participate during the deliberations, the disclosure shall be made before voting on the ordinance or resolution on second and third readings; and

    • 2

      Disclosure shall be made when a member takes a position or makes a privilege speech on a matter that may affect the business interest, financial connection, or professional relationship described herein.

• Section 52  Sessions.
  • a

    On the first day of the session immediately following the election of its members, the sanggunian shall, by resolution, fix the day, time, and place of its regular sessions. The minimum number of regular sessions shall be once a week for the sangguniang panlalawigan, sangguniang panlungsod, and sangguniang bayan, and twice a month for the sangguniang barangay.

  • b

    When public interest so demands, special sessions may be called by the local chief executive or by a majority of the members of the sanggunian.

  • c

    All sanggunian sessions shall be open to the public unless a closed-door session is ordered by an affirmative vote of majority of the members present, there being a quorum, in the public interest or for reasons of security, decency, or morality. No two (2) sessions, regular or special, may be held in a single day.

  • d

    In the case of special sessions of the sanggunian, a written notice to the members shall be served personally at the member's usual place of residence at least twenty-four (24) hours before the special session is held.

    • Unless otherwise concurred in by two-thirds (2/3) vote of the sanggunian members present, there being a quorum, no other matters may be considered at a special session except those stated in the notice.

  • e

    Each sanggunian shall keep a journal and record of its proceedings which may be published upon resolution of the sanggunian concerned.

• Section 53  Quorum.
  • a

    A majority of all the members of the sanggunian who have been elected and qualified shall constitute a quorum to transact official business. Should a question of quorum be raised during a session, the presiding officer shall immediately proceed to call the roll of the members and thereafter announce the results.

  • b

    Where there is no quorum, the presiding officer may declare a recess until such time as a quorum is constituted, or a majority of the members present may adjourn from day to day and may compel the immediate attendance of any member absent without justifiable cause by designating a member of the sanggunian, to be assisted by a member or members of the police force assigned in the territorial jurisdiction of the local government unit concerned, to arrest the absent member and present him at the session.

  • c

    If there is still no quorum despite the enforcement of the immediately preceding subsection, no business shall be transacted. The presiding officer, upon proper motion duly approved by the members present, shall then declare the session adjourned for lack of quorum.

• Section 54  Approval of Ordinances.
  • a

    Every ordinance enacted by the sangguniang panlalawigan, sangguniang panlungsod, or sangguniang bayan shall be presented to the provincial governor or city or municipal mayor, as the case may be. If the local chief executive concerned approves the same, he shall affix his signature on each and every page thereof; otherwise, he shall veto it and return the same with his objections to the sanggunian, which may proceed to reconsider the same. The sanggunian concerned may override the veto of the local chief executive by two-thirds (2/3) vote of all its members, thereby making the ordinance or resolution effective for all legal intents and purposes.

  • b

    The veto shall be communicated by the local chief executive concerned to the sanggunian within fifteen (15) days in the case of a province, and ten (10) days in the case of a city or a municipality; otherwise, the ordinance shall be deemed approved as if he had signed it.

  • c

    Ordinances enacted by the sangguniang barangay shall, upon approval by the majority of all its members, be signed by the punong barangay.

• Section 55  Veto Power of the Local Chief Executive.
  • a

    The local chief executive may veto any ordinance of the sangguniang panlalawigan, sangguniang panlungsod, or sangguniang bayan on the ground that it is ultra vires or prejudicial to the public welfare, stating his reasons therefor in writing.

  • b

    The local chief executive, except the punong barangay, shall have the power to veto any particular item or items of an appropriations ordinance, an ordinance or resolution adopting a local development plan and public investment program, or an ordinance directing the payment of money or creating liability. In such a case, the veto shall not affect the item or items which are not objected to. The vetoed item or items shall not take effect unless the sanggunian overrides the veto in the manner herein provided; otherwise, the item or items in the appropriations ordinance of the previous year corresponding to those vetoed, if any, shall be deemed reenacted.

  • c

    The local chief executive may veto an ordinance or resolution only once. The sanggunian may override the veto of the local chief executive by two-thirds (2/3) vote of all its members, thereby making the ordinance effective even without the approval of the local chief executive concerned.

• Section 56  Review of Component City and Municipal Ordinances or Resolutions by the Sangguniang Panlalawigan.
  • a

    Within three (3) days after approval, the secretary to the sangguniang 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 the 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.

• Section 57  Review of Barangay Ordinances by the Sangguniang Panlungsod or Sangguniang Bayan.
  • a

    Within ten (10) days after its enactment, the sangguniang barangay shall furnish copies of all barangay ordinances to the sangguniang panlungsod or sangguniang bayan concerned for review as to whether the ordinance is consistent with law and city or municipal ordinances.

  • b

    If the sangguniang panlungsod or sangguniang bayan, as the case may be, fails to take action on barangay ordinances within thirty (30) days from receipt thereof, the same shall be deemed approved.

  • c

    If the sangguniang panlungsod or sangguniang bayan, as the case may be, finds the barangay ordinances inconsistent with law or city or municipal ordinances, the sanggunian concerned shall, within thirty (30) days from receipt thereof, return the same with its comments and recommendations to the sangguniang barangay concerned for adjustment, amendment, or modification; in which case, the effectivity of the barangay ordinance is suspended until such time as the revision called for is effected.

• Section 58  Enforcement of Disapproved Ordinances or Resolutions.

  Any attempt to enforce any ordinance or any resolution approving the local development plan and public investment program, after the disapproval thereof, shall be sufficient ground for the suspension or dismissal of the official or employee concerned.

• Section 59  Effectivity of Ordinances or Resolutions.
  • a

    Unless otherwise stated in the ordinance or the resolution approving the local development plan and public investment program, the same shall take effect after ten (10) days from the date a copy thereof is posted in a bulletin board at the entrance of the provincial capitol or city, municipal, or barangay hall, as the case may be, and in at least two (2) other conspicuous places in the local government unit concerned.

  • b

    The secretary to the sanggunian concerned shall cause the posting of an ordinance or resolution in the bulletin board at the entrance of the provincial capitol and the city, municipal, or barangay hall in at least two (2) conspicuous places in the local government unit concerned not later than five (5) days after approval thereof.

    • The text of the ordinance or resolution shall be disseminated and posted in Filipino or English and in the language or dialect 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.

• Section 60  Grounds for Disciplinary Actions.

  An elective local official may be disciplined, suspended, or removed from office on any of the following grounds:

  • a

    Disloyalty to the Republic of the Philippines;

  • b

    Culpable violation of the Constitution;

  • c

    Dishonesty, oppression, misconduct in office, gross negligence, or dereliction of duty;

  • d

    Commission of any offense involving moral turpitude or an offense punishable by at least prision mayor;

  • e

    Abuse of authority;

  • f

    Unauthorized absence for fifteen (15) consecutive working days, except in the case of members of the sangguniang panlalawigan, sangguniang panlungsod, sangguniang bayan, and sangguniang barangay;

  • g

    Application for, or acquisition of, foreign citizenship or residence or the status of an immigrant of another country; and

  • h

    Such other grounds as may be provided in this Code and other laws.

  • An elective local official may be removed from office on the grounds enumerated above by order of the proper court.

• Section 61  Form and Filing of Administrative Complaints.

  A verified complaint against any erring local elective official shall be prepared as follows:

  • a

    A complaint against any elective official of a province, a highly urbanized city, an independent component city or component city shall be filed before the Office of the President;

  • b

    A complaint against any elective official of a municipality shall be filed before the sangguniang panlalawigan whose decision may be appealed to the Office of the President; and

  • c

    A complaint against any elective barangay official shall be filed before the sangguniang panlungsod or sangguniang bayan concerned whose decision shall be final and executory.

• Section 62  Notice of Hearing.
  • a

    Within seven (7) days after the administrative complaint is filed, the Office of the President or the sanggunian concerned, as the case may be, shall require the respondent to submit his verified answer within fifteen (15) days from receipt thereof, and commence the investigation of the case within ten (10) days after receipt of such answer of the respondent.

  • b

    When the respondent is an elective official of a province or highly urbanized city, such hearing and investigation shall be conducted in the place where he renders or holds office. For all other local elective officials, the venue shall be the place where the sanggunian concerned is located.

  • c

    However, no investigation shall be held within ninety (90) days immediately prior to any local election, and no preventive suspension shall be imposed within the said period. If preventive suspension has been imposed prior to the 90-day period immediately preceding local election, it shall be deemed automatically lifted upon the start of aforesaid period.

• Section 63  Preventive Suspension.
  • a

    Preventive suspension may be imposed:

    • 1

      By the President, if the respondent is an elective official of a province, a highly urbanized or an independent component city;

    • 2

      By the governor, if the respondent is an elective official of a component city or municipality; or

    • 3

      By the mayor, if the respondent is an elective official of the barangay.

  • b

    Preventive suspension may be imposed at any time after the issues are joined, when the evidence of guilt is strong, and given the gravity of the offense, there is great probability that the continuance in office of the respondent could influence the witnesses or pose a threat to the safety and integrity of the records and other evidence: Provided, That, any single preventive suspension of local elective officials shall not extend beyond sixty (60) days: Provided, further, That in the event that several administrative cases are filed against an elective official, he cannot be preventively suspended for more than ninety (90) days within a single year on the same ground or grounds existing and known at the time of the first suspension.

  • c

    Upon expiration of the preventive suspension, the suspended elective official shall be deemed reinstated in office without prejudice to the continuation of the proceedings against him, which shall be terminated within one hundred twenty (120) days from the time he was formally notified of the case against him. However, if the delay in the proceedings of the case is due to his fault, neglect, or request, other than the appeal duly filed, the duration of such delay shall not be counted in computing the time of termination of the case.

  • d

    Any abuse of the exercise of the power of preventive suspension shall be penalized as abuse of authority.

• Section 64  Salary of Respondent Pending Suspension.

  The respondent official preventively suspended from office shall receive no salary or compensation during such suspension; but upon subsequent exoneration and reinstatement, he shall be paid full salary or compensation including such emoluments accruing during such suspension.

• Section 65  Rights of Respondent.

  The respondent shall be accorded full opportunity to appear and defend himself in person or by counsel, to confront and cross-examine the witnesses against him, and to require the attendance of witnesses and the production of documentary evidence in his favor through the compulsory process of subpoena or subpoena duces tecum.

• Section 66  Form and Notice of Decision.
  • a

    The investigation of the case shall be terminated within ninety (90) days from the start thereof. Within thirty (30) days after the end of the investigation, the Office of the President or the sanggunian concerned shall render a decision in writing stating clearly and distinctly the facts and the reasons for such decision. Copies of said decision shall immediately be furnished the respondent and all interested parties.

  • b

    The penalty of suspension shall not exceed the unexpired term of the respondent or a period of six (6) months for every administrative offense, nor shall said penalty be a bar to the candidacy of the respondent so suspended as long as he meets the qualifications required for the office.

  • c

    The penalty of removal from office as a result of an administrative investigation shall be considered a bar to the candidacy of the respondent for any elective position.

• Section 67  Administrative Appeals.

  Decisions in administrative cases may, within thirty (30) days from receipt thereof, be appealed to the following:

  • a

    The sangguniang panlalawigan, in the case of decisions of the sangguniang panlungsod of component cities and the sangguniang bayan; and

  • b

    The Office of the President, in the case of decisions of the sangguniang panlalawigan and the sangguniang panlungsod of highly urbanized cities and independent component cities.

  • Decisions of the Office of the President shall be final and executory.

• Section 68  Execution Pending Appeal.

  An appeal shall not prevent a decision from becoming final or executory. The respondent shall be considered as having been placed under preventive suspension during the pendency of an appeal in the event he wins such appeal. In the event the appeal results in an exoneration, he shall be paid his salary and such other emoluments during the pendency of the appeal.

• Section 69  By Whom Exercised.

  The power of recall for loss of confidence shall be exercised by the registered voters of a local government unit to which the local elective official subject to such recall belongs.

• Section 70  Initiation of the Recall Process.
  • a

    Recall may be initiated by a preparatory recall assembly or by the registered voters of the local government unit to which the local elective official subject to such recall belongs.

  • b

    There shall be a preparatory recall assembly in every province, city, district, and municipality which shall be composed of the following:

    • 1  Provincial level.

      All mayors, vice-mayors, and sanggunian members of the municipalities and component cities;

    • 2  City level.

      All punong barangay and sanggunian 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 proceedings 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, 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.

• Section 71  Election on Recall.

  Upon the filing of a valid resolution or petition for recall with the appropriate local office of the COMELEC, the Commission or its duly authorized representative shall set the date of the election on recall, which shall not be later than thirty (30) days after the filing of the resolution or petition for recall in the case of the barangay, city, or municipal officials, and forty-five (45) days in the case of provincial officials. The official or officials sought to be recalled shall automatically be considered as duly registered candidate or candidates to the pertinent positions and, like other candidates, shall be entitled to be voted upon.

• Section 72  Effectivity of Recall.

  The recall of an elective local official shall be effective only upon the election and proclamation of a successor in the person of the candidate receiving the highest number of votes cast during the election on recall. Should the official sought to be recalled receive the highest number of votes, confidence in him is thereby affirmed, and he shall continue in office.

• Section 73  Prohibition from Resignation.

  The elective local official sought to be recalled shall not be allowed to resign while the recall process is in progress.

• Section 74  Limitations on Recall.
  • a

    Any elective local official may be the subject of a recall election only once during his term of office for loss of confidence.

  • b

    No recall shall take place within one (1) year from the date of the official's assumption to office or one (1) year immediately preceding a regular local election.

• Section 75  Expenses Incident to Recall Elections.

  All expenses incident to recall elections shall be borne by the COMELEC. For this purpose, there shall be included in the annual General Appropriations Act a contingency fund at the disposal of the COMELEC for the conduct of recall elections.

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.

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.

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.

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.

• 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 of personnel for employment as well as for promotion, and in the formulation of such policies as would contribute to employee welfare.

• c

  The personnel selection board shall be headed by the local chief executive, and its members shall be determined by resolution of the sanggunian concerned. A representative of the Civil Service Commission, if any, and the personnel officer of the local government unit concerned shall be ex officio members of the board.

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.

• 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 prescribe the manner of acting upon such resignations.

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.

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.

• 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.

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.

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.

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.

• 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.

• 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.

• 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.

• a

  All elective and appointive local officials and employees shall, upon assumption to office, subscribe to an oath or affirmation of office in the prescribed form. The oath or affirmation of office shall be filed with the office of the local chief executive concerned. A copy of the oath or affirmation of office of all elective and appointive local officials and employees shall be preserved in the individual personal records file under the custody of the personnel office, division, or section of the local government unit concerned.

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.

• 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 afer such election, be appointed to any office in the government or any government-owned or -controlled corporations or in any of their subsidiaries.

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.

• a

  Provincial, city, municipal, and barangay appointive officials going on official travel shall apply and secure written permission from their respective local chief executives before departure. The application shall specify the reasons for such travel, and the permission shall be given or withheld based on considerations of public interest, financial capability of the local government unit concerned and urgency of the travel. Should the local chief executive concerned fail to act upon such application within four (4) working days from receipt thereof, it shall be deemed approved.

• b

  Mayors of component cities and municipalities shall secure the permission of the governor concerned for any travel outside the province.

• c

  Local government officials traveling abroad shall notify their respective sanggunian: Provided, That when the period of travel extends to more than three (3) months, during periods of emergency or crisis or when the travel involves the use of public funds, permission from the Office of the President shall be secured.

• d

  Field officers of national agencies or offices assigned in provinces, cities, and municipalities shall not leave their official stations without giving prior written notice to the local chief executive concerned. Such notice shall state the duration of travel and the name of the officer whom he shall designate to act for and in his behalf during his absence.

On or before March 31 of each year, every local chief executive shall submit an annual report to the sanggunian concerned on the socio-economic, 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.

• 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 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 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 co-chairman for the provincial and city school boards; and

  • 2

    The division superintendent of schools shall designate the district supervisor who shall serve as co-chairman of the municipal school board.

• d

  The performance of the duties and responsibilities of the abovementioned officials in their respective local school boards shall not be delegated.

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.

• 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.

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.

• a

  There shall be established a local health board in every province, city, or municipality. The composition of the local health boards shall be as follows:

  • 1

    The provincial health board shall be headed by the governor as chairman, the provincial health officer as vice-chairman, and the chairman of the committee on health of the sangguniang panlalawigan, a representative from the private sector or non-governmental organizations involved in health services, and a representative of the Department of Health in the province, as members;

  • 2

    The city health board shall be headed by the city mayor as chairman, the city health officer as vice-chairman, and the chairman of the committee on health of the sangguniang panlungsod, a representative from the private sector or non-governmental organizations involved in health services, and a representative of the Department of Health in the city, as members; and

  • 3

    The municipal health board shall be headed by the municipal mayor as chairman, the municipal health officer as vice-chairman, and the chairman of the committee on health of the sangguniang bayan, a representative from the private sector or non-governmental organizations involved in health services, and a representative of the Department of Health in the municipality, as members.

• b

  The functions of the local health board shall be:

  • 1

    To propose to the sanggunian concerned, in accordance with standards and criteria set by the Department of Health, annual budgetary allocations for the operation and maintenance of health facilities and services within the municipality, city or province, as the case may be;

  • 2

    To serve as an advisory committee to the sanggunian concerned on health matters such as, but not limited to, the necessity for, and application of, local appropriations for public health purposes; and

  • 3

    Consistent with the technical and administrative standards of the Department of Health, create committees which shall 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.

• a

  The board shall meet at least once a month or 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.

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.

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.

• 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.

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 (1/4th) of the members of the fully organized council;

  • 3

    A representative of the congressman.

• a

  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 than one-fourth (1/4th) 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 (1/4th) 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.

Within a period of sixty (60) days from the start of organization of local development councils, the non-governmental organizations shall choose from among themselves their representatives to said councils. The local sanggunian concerned shall accredit non-governmental organizations subject to such criteria as may be provided by law.

• 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 socio-economic 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 component 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.

The local development council shall meet at least once every six (6) months or as often as may be necessary.

• a

  Each local development council shall create an executive committee to represent it and act in its behalf when it is not in session. The composition of the executive committee shall be as follows:

  • 1

    The executive committee of the provincial development council shall be composed of the governor as chairman, the representative of component city and municipal mayors to be chosen from among themselves, the chairman of the committee on appropriations of the sangguniang panlalawigan, the president of the 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 non-governmental 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.

The local development councils may form sectoral or functional committees to assist them in the performance of their functions.

There is hereby constituted for each local development council a secretariat which shall be responsible for providing technical support, documentation of proceedings, preparation of reports and such other assistance as may be required in the discharge of its functions. The local development council may avail of the services of any 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.

• 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 integrated with the development plans of the next higher level of local development council.

• b

  The approved development plans of provinces, highly-urbanized cities, and independent component cities shall be submitted to the regional development council, which shall be integrated into the regional development plan for submission to the National Economic and Development Authority, in accordance with existing laws.

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.

• Section 116  Organization.

  There is hereby established in every province, city and municipality a local peace and order council, pursuant to Executive Order Numbered Three hundred nine (E.O. No. 309), 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.

• Section 117  Establishment of Autonomous Special Economic Zones.

  The establishment by law of autonomous special economic zones in selected areas of the country shall be subject to concurrence by the local government units included therein.

• Section 118  Jurisdictional Responsibility for Settlement of Boundary Dispute.

  Boundary disputes between and among local government units shall, as much as possible, be settled amicably. To this end:

  • a

    Boundary disputes involving two (2) or more barangays in the same city or municipality shall be referred for settlement to the sangguniang panlungsod or sangguniang bayan concerned.

  • b

    Boundary disputes involving two (2) or more municipalities within the same province shall be referred for settlement to the sangguniang panlalawigan concerned.

  • c

    Boundary disputes involving municipalities or component cities of different provinces shall be jointly referred for settlement to the sanggunians of the provinces concerned.

  • d

    Boundary disputes involving a component city or municipality on the one hand and a highly urbanized city on the other, or two (2) or more highly urbanized cities, shall be jointly referred for settlement to the respective sanggunians of the parties.

  • e

    In the event the sanggunian fails to effect an amicable settlement within sixty (60) days from the date the dispute was referred thereto, it shall issue a certification to that effect. Thereafter, the dispute shall be formally tried by the sanggunian concerned which shall decide the issue within sixty (60) days from the date of the certification referred to above.

• Section 119  Appeal.

  Within the time and manner prescribed by the Rules of Court, any party may elevate the decision of the sanggunian concerned to the proper Regional Trial Court having jurisdiction over the area in dispute. The Regional Trial Court shall decide the appeal within one (1) year from the filing thereof. Pending final resolution of the disputed area prior to the dispute shall be maintained and continued for all legal purposes.

• Section 120  Local Initiative Defined.

  Local initiative is the legal process whereby the registered voters of a local government unit may directly propose, enact, or amend any ordinance.

• Section 121  Who May Exercise.

  The power of local initiative and referendum may be exercised by all registered voters of the provinces, cities, municipalities, and barangays.

• Section 122  Procedure in Local Initiative.
  • a

    Not less than one thousand (1,000) registered voters in case of provinces and cities, one hundred (100) in case of municipalities, and fifty (50) in case of barangays, may file a petition with the sanggunian concerned proposing the adoption, enactment, repeal, or amendment of an ordinance.

  • b

    If no favorable action thereon is taken by the sanggunian concerned within thirty (30) days from its presentation, the proponents, through their duly authorized and registered representatives, may invoke their power of initiative, giving notice thereof to the sanggunian concerned.

  • c

    The proposition shall be numbered serially starting from Roman numeral I. The COMELEC or its designated representative shall extend assistance in the formulation of the proposition.

  • d

    Two (2) or more propositions may be submitted in an initiative.

  • e

    Proponents shall have ninety (90) days in case of provinces and cities, sixty (60) days in case of municipalities, and thirty (30) days in case of barangays, from notice mentioned in subsection (b) hereof to collect the required number of signatures.

  • f

    The petition shall be signed before the election registrar, or his designated representatives, in the presence of a representative of the proponent, and a representative of the sanggunian concerned in a public place in the local government unit, as the case may be. Stations for collecting signatures may be established in as many places as may be warranted.

  • g

    Upon the lapse of the period herein provided, the COMELEC, through its office in the local government unit concerned, shall certify as to whether or not the required number of signatures has been obtained. Failure to obtain the required number defeats the proposition.

  • h

    If the required number of signatures is obtained, the COMELEC shall then set a date for the initiative during which the proposition shall be submitted to the registered voters in the local government unit concerned for their approval within sixty (60) days from the date of certification by the COMELEC, as provided in subsection (g) hereof, in case of provinces and cities, forty-five (45) days in case of municipalities, and thirty (30) days in case of barangays. The initiative shall then be held on the date set, after which the results thereof shall be certified and proclaimed by the COMELEC.

• Section 123  Effectivity of Local Propositions.

  If the proposition is approved by a majority of the votes cast, it shall take effect fifteen (15) days after certification by the COMELEC as if affirmative action thereon had been made by the sanggunian and local chief executive concerned. If it fails to obtain said number of votes, the proposition is considered defeated.

• Section 124  Limitations on Local 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 sanggunian 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 cancelled. However, those against such action may, if they so desire, apply for initiative in the manner herein provided.

• Section 125  Limitations upon Sanggunians.

  Any proposition or ordinance approved through the system of initiative and referendum as herein provided shall not be repealed, modified or amended by the sanggunian concerned within six (6) months from the date of the approval thereof, and may be amended, modified or repealed by the sanggunian within three (3) years thereafter by a vote of three-fourths (3/4) of all its members: Provided, That in case of barangays, the period shall be eighteen (18) months after the approval thereof.

• Section 126  Local Referendum Defined.

  Local referendum is the legal process whereby the registered voters of the local government units may approve, amend or reject any ordinance enacted by the sanggunian.

  • The local referendum shall be held under the control and direction of the COMELEC within sixty (60) days in case of provinces and cities, forty-five (45) days in case of municipalities and thirty (30) days in case of barangays.

  • The COMELEC shall certify and proclaim the results of the said referendum.

• Section 127  Authority of Courts.

  Nothing in this Chapter shall prevent or preclude the proper courts from declaring null and void any proposition approved pursuant to this Chapter for violation of the Constitution or want of capacity of the sanggunian concerned to enact the said measure.

• Section 128  Scope.

  The provisions herein shall govern the exercise by provinces, cities, municipalities, and barangays of their taxing and other revenue-raising powers.

• Section 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.

• Section 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.

• Section 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 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" 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 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 salons and similar establishments; photographic studios; funeral parlors; proprietors or operators of hotels, motels, and lodging houses; proprietors or operators of arrastre and stevedoring, warehousing, or forwarding establishments; master plumbers, smiths, and house or sign painters; printers, bookbinders, lithographers; publishers except those engaged in the publication or printing of any newspaper, magazine, review or bulletin which appears at regular intervals with fixed prices for subscription and sale and which is not devoted principally to the publication and 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, street-sweepers, sprinklers, lawn mowers, bulldozers, graders, fork-lifts, amphibian trucks, and cranes if not used on public roads, vehicles which run only on rails or tracks, and tractors, trailers, and traction engines of all kinds used exclusively for agricultural purposes;

  • 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 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 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.

• Section 132  Local Taxing Authority.

  The power to impose a tax, fee, or charge or to generate revenue under this Code shall be exercised by the sanggunian of the local government unit concerned through an appropriate ordinance.

• Section 133  Common Limitations on the Taxing Powers of Local Government Units.

  Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following:

  • 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.

• Article I  Provinces
  • Section 134  Scope of Taxing Powers.

    Except as otherwise provided in this Code, the province may levy only the taxes, fees, and charges as provided in this Article.

  • Section 135  Tax on Transfer of Real Property Ownership.
    • a

      The province may impose a tax on the sale , donation, barter, or on any other mode of transferring ownership or title of real property at the rate of not more than fifty percent (50%) of 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 cancelling 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.

  • Section 136  Tax on Business of Printing and Publication.

    The province may impose a tax on the business of persons engaged in the printing and/or publication of books, cards, posters, leaflets, handbills, certificates, receipts, pamphlets, and 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.

  • Section 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 a 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.

  • Section 138  Tax on Sand, Gravel and Other Quarry Resources.

    The province may levy and collect not more than ten percent (10%) of fair market value in the locality per cubic meter of ordinary stones, sand, gravel, earth, and other quarry resources, as defined under the National Internal Revenue Code, as amended, extracted from public lands or from the beds of seas, lakes, rivers, streams, creeks, and other public waters within its territorial jurisdiction.

    • The permit to extract sand, gravel and other quarry resources shall be issued exclusively by the provincial governor, pursuant to the ordinance of the sangguniang panlalawigan.

    • The proceeds of the tax on sand, gravel and other quarry resources shall be distributed as follows:

      • 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%).

  • Section 139  Professional Tax.
    • a

      The province may levy an annual professional tax on each person engaged in the exercise or practice of his profession requiring government examination 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.

  • Section 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 hereon 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.

  • Section 141  Annual Fixed Tax For Every Delivery Truck or Van of Manufacturers or Producers, Wholesalers of, Dealers, or Retailers in, Certain Products.
    • a

      The province may levy an annual fixed tax for every truck, van or any vehicle used by manufacturers, producers, wholesalers, dealers or retailers in the delivery or distribution of distilled spirits, fermented liquors, soft drinks, cigars and cigarettes, and other products as may be determined by the sangguniang panlalawigan, to sales outlets, 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 II  Municipalities
  • Section 142  Scope of Taxing Powers.

    Except as otherwise provided in this Code, municipalities may levy taxes, fees, and charges not otherwise levied by provinces.

  • Section 143  Tax 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: |   | Amount of 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 | 440.00 30,000.00 or more but less than | 40,000.00 | 660.00 40,000.00 or more but less than | 50,000.00 | 825.00 50,000.00 or more but less than | 75,000.00 | 1,320.00 75,000.00 or more but less than | 100,000.00 | 1,650.00 100,000.00 or more but less than | 150,000.00 | 2,200.00 150,000.00 or more but less than | 200,000.00 | 2,750.00 200,000.00 or more but less than | 300,000.00 | 3,850.00 300,000.00 or more but less than | 500,000.00 | 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 or moreat a rate not exceeding thirty-seven and a half percent (37½%) of one percent (1%) |  

    • 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 P1,000.00 |   | P18.00 P1,000.00 or more but less than | P2,000.00 | 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 | 220.00 15,000.00 or more but less than | 20,000.00 | 275.00 20,000.00 or more but less than | 30,000.00 | 330.00 30,000.00 or more but less than | 40,000.00 | 440.00 40,000.00 or more but less than | 50,000.00 | 660.00 50,000.00 or more but less than | 75,000.00 | 990.00 75,000.00 or more but less than | 100,000.00 | 1,320.00 100,000.00 or more but less than | 150,000.00 | 1,870.00 150,000.00 or more but less than | 200,000.00 | 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 2,000,000.00 or more |   |at a rate not 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 (½) 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, herbicides and other farm inputs;

      • 6

        Poultry feeds and other animal feeds;

      • 7

        School supplies; and

      • 8

        Cement.

    • d

      On retailers.

      With gross sales or receiptsfor the preceding calendar year of: | Rate of Tax Per Annum :-:|:-: P400,000.00 or less | 2% more than P400,000.00 | 1%

      Provided, however, That barangays shall have the exclusive power to levy taxes, as provided under Section 152 hereof, on gross sales or receipts of the preceding calendar year of Fifty thousand pesos (P50,000.00) or less, in the case of 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 sales or receipts for the preceding calendar year in the amount of: |   | Amount of Tax Per Annum :-:|:-:|:-: Less than P5,000.00 |   | P27.50 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 | 880.00 75,000.00 or more but less than | 100,000.00 | 1,320.00 100,000.00 or more but less than | 150,000.00 | 1,980.00 150,000.00 or more but less than | 200,000.00 | 2,640.00 200,000.00 or more but less than | 250,000.00 | 3,630.00 250,000.00 or more but less than | 300,000.00 | 4,620.00 300,000.00 or more but less than | 400,000.00 | 6,160.00 400,000.00 or more but less than | 500,000.00 | 8,250.00 500,000.00 or more but less than | 750,000.00 | 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 | 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 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.

  • Section 144  Rates of Tax within the Metropolitan Manila Area.

    The municipalities within the Metropolitan Manila Area may levy taxes at rates which shall not exceed by fifty percent (50%) the maximum rates prescribed in the preceding section.

  • Section 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.

  • Section 146  Payment of Business Taxes.
    • a

      The taxes imposed under Section 143 shall be payable for every separate or distinct establishment or place where business subject to the tax is conducted and one line of business does not become exempt by being conducted with some other businesses for which such tax has been paid. The tax on a business must be paid by the person conducting the same.

    • b

      In cases where a person conducts or operates two (2) or more of the businesses mentioned in Section 143 of this Code which are subject to the same rate of tax, the tax shall be computed on the combined total gross sales or receipts of the said two (2) or more related businesses.

    • c

      In cases where a person conducts or operates two (2) or more businesses mentioned in Section 143 of this Code which are subject to different rates of tax, the gross sales or receipts of each business shall be separately reported for the purpose of computing the tax due from each business.

  • Section 147  Fees and Charges.

    The municipality may impose and collect such reasonable fees and charges on business and occupation and, except as reserved to the province in Section 139 of this Code, on the practice of any profession or calling, commensurate with the cost of regulation, inspection and licensing before any person may engage in such business or occupation, or practice such profession or calling.

  • Section 148  Fees for Sealing and Licensing of Weights and Measures.
    • a

      The municipality may levy fees for the sealing and licensing of weights and measures at such reasonable rates as shall be prescribed by the sangguniang bayan.

    • b

      The sangguniang bayan shall prescribe the necessary regulations for the use of such weights and measures, subject to such guidelines as shall be prescribed by the Department of Science and Technology. The sanggunian concerned shall, by appropriate ordinance, penalize fraudulent practices and unlawful possession or use of instruments of weights and measures and prescribe the criminal penalty 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 (P200,000).

  • Section 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, oysters, mussels or other aquatic beds or bangus fry areas, within a definite zone of the municipal waters, as determined by it: Provided, however, That duly registered organizations and cooperatives of marginal fishermen shall have the preferential right to such fishery privileges: Provided, further, That the sangguniang bayan may require a public bidding in conformity with and pursuant to an ordinance for the grant of such privileges: Provided, finally, That in the absence of such organizations and cooperatives or their failure to exercise their preferential right, other parties may participate in the public bidding in conformity with the above cited procedure.

      • 2

        Grant the privilege to gather, take or catch bangus fry, prawn fry or kawag-kawag or fry of other species and fish from the municipal waters by nets, traps or other fishing gears to marginal fishermen free of any rental, fee, charge or any other imposition whatsoever.

      • 3

        Issue 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, muro-ami, 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.

  • Section 150  Situs of the Tax.
    • a

      For purposes of collection of the taxes under Section 143 of this Code, manufacturers, assemblers, repackers, brewers, distillers, rectifiers and compounders of liquor, distilled spirits and wines, millers, producers, exporters, wholesalers, distributors, dealers, contractors, banks and other financial institutions, and other businesses, maintaining or operating branch or sales outlet elsewhere shall record the sale in the branch or sales outlet making the sale or transaction, and the tax thereon shall accrue and shall be paid to the municipality where such branch or sales outlet is located. In cases where there is no such branch or sales outlet in the city or municipality where the sale or transaction is made, the sale shall be duly recorded in the principal office and the taxes due shall accrue and shall be paid to such city or municipality.

    • b

      The following sales allocation shall apply to manufacturers, assemblers, contractors, producers, and exporters with factories, project offices, plants, and plantations in the pursuit of their business:

      • 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 III  Cities
  • Section 151  Scope of Taxing Powers.

    Except as otherwise provided in this Code, the city, may levy the taxes, fees, and charges which the province or municipality may impose: Provided, however, That the taxes, fees and charges levied and collected by highly urbanized and independent component cities shall accrue to them and distributed in accordance with the provisions of this Code.

    • The rates of taxes that the city may levy may exceed the maximum rates allowed for the province or municipality by not more than fifty percent (50%) except the rates of professional and amusement taxes.

• Article IV  Barangays
  • Section 152  Scope of Taxing Powers.

    The barangays may levy taxes, fees, and charges, as provided in this Article, which shall exclusively accrue to them:

    • a  Taxes.

      On stores or retailers with fixed business establishments with gross sales of 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 regulations or the use of barangay-owned properties or service facilities such as palay, copra, or tobacco dryers.

    • c  Barangay Clearance.

      No city or municipality may issue any license or permit for any business or activity unless a clearance is first obtained from the barangay where such business or activity is located or conducted. For such clearance, the sangguniang barangay may impose a reasonable fee. The application for clearance shall be acted upon within seven (7) working days from the filing thereof. In the event that the clearance is not issued within the said period, the city or municipality may issue the said license or permit.

    • d  Other fees and Charges.

      The barangay may levy reasonable fees and charges:

      • 1

        On commercial breeding of fighting cocks, cockfights and cockpits;

      • 2

        On places of recreation which charge admission fees; and

      • 3

        On billboards, signboards, neon signs, and outdoor advertisements.

• Article V  Common Revenue-raising Powers
  • Section 153  Service Fees and Charges.

    Local government units may impose and collect such reasonable fees and charges for services rendered.

  • Section 154  Public Utility Charges.

    Local government units may fix the rates for the operation of public utilities owned, operated and maintained by them within their jurisdiction.

  • Section 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 VI  Community Tax
  • Section 156  Community Tax.

    Cities or municipalities may levy a community tax in accordance with the provisions of this Article.

  • Section 157  Individuals Liable to Community Tax.

    Every inhabitant of the Philippines eighteen (18) years of age or over who has been regularly employed on a wage or salary basis for at least thirty (30) consecutive working days during any calendar year, or who is engaged in business or occupation, or who owns real property with an aggregate assessed value of One thousand pesos (P1,000.00) or more, or who is required by law to file an income tax return shall pay an annual additional 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.

  • Section 158  Juridical Persons Liable to Community Tax.

    Every corporation no matter how created or organized, whether domestic or resident foreign, engaged in or doing business in the Philippines shall pay an annual community tax of Five hundred pesos (P500.00) and an annual additional tax, which, 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.

  • Section 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.

  • Section 160  Place of Payment.

    The community tax shall be paid in the place of residence of the individual, or in the place where the principal office of the juridical entity is located.

  • Section 161  Time for Payment; Penalties for Delinquency.
    • 1

      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.

    • 2

      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.

  • Section 162  Community Tax Certificate.

    A community tax certificate shall be issued to every person or corporation upon payment of the community tax. A community tax certificate may also be issued to any person or corporation not subject to the community tax upon payment of One peso (P1.00).

  • Section 163  Presentation of Community Tax Certificate On Certain Occasions.
    • 1

      When an individual subject to the community tax acknowledges any document before a notary public, takes the oath of office upon election or appointment to any position in the government service; receives any license, certificate, or permit from any public authority; pays any tax or fee; receives any money from any public fund; transacts other official business; or receives any salary or wage from any person or corporation, it shall be the duty of any person, officer, or corporation with whom such transaction is made or business done or from whom any salary or wage is received to require such individual to exhibit the community tax certificate.

      • The presentation of community tax certificate shall not be required in connection with the registration of a voter.

    • 2

      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.

    • 3

      The community tax certificate required in the two preceding paragraphs shall be the one issued for the current year, except for the period from January until the fifteenth (15th) of April each year, in which case, the certificate issued for the preceding year shall suffice.

  • Section 164  Printing of Community Tax Certificates and Distribution of Proceeds.
    • 1

      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.

    • 2

      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.

    • 3

      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.

• Section 165  Tax Period and Manner of Payment.

  Unless otherwise provided in this Code, the tax period of all local taxes, fees and charges shall be the calendar year. Such taxes, fees and charges may be paid in quarterly installments.

• Section 166  Accrual of Tax.

  Unless otherwise provided in this Code, all local taxes, fees, and charges shall accrue on the first (1st) day of January of each year. However, new taxes, fees or charges, or changes in the rates thereof, shall accrue on the first (1st) day of the quarter next following the effectivity of the ordinance imposing such new levies or rates.

• Section 167  Time of Payment.

  Unless otherwise provided in this Code, all local taxes, fees, and charges shall be paid within the first twenty (20) days of January or of each subsequent quarter, as the case may be. The sanggunian concerned may, for a justifiable reason or cause, extend the time for payment of such taxes, fees, or charges without surcharges or penalties, but only for a period not exceeding six (6) months.

• Section 168  Surcharges and Penalties on Unpaid Taxes, Fees, or Charges.

  The sanggunian may impose a surcharge not exceeding twenty-five (25%) of the amount of taxes, fees or charges not paid on time and an interest at the rate not exceeding two percent (2%) per month of the unpaid taxes, fees or charges including surcharges, until such amount is fully paid but in no case shall the total interest on the unpaid amount or portion thereof exceed thirty-six (36) months.

• Section 169  Interests on Other Unpaid Revenues.

  Where the amount of any other revenue due a local government unit, except voluntary contributions or donations, is not paid on the date fixed in the ordinance, or in the contract, expressed or implied, or upon the occurrence of the event which has given rise to its collection, there shall be collected as part of that amount an interest thereon at the rate not exceeding two percent (2%) per month from the date it is due until it is paid, but in no case shall the total interest on the unpaid amount or a portion thereof exceed thirty-six (36) months.

• Section 170  Collection of Local Revenue 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.

• Section 171  Examination of Books of Accounts and Pertinent Records of Businessmen by Local Treasurer.

  The provincial, city, municipal or barangay treasurer may, by himself or through any of his 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.

• Section 172  Application of Chapter.

  The provisions of this Chapter and the remedies provided herein may be availed of for the collection of any delinquent local tax, fee, charge, or other revenue.

• Section 173  Local Government's Lien.

  Local taxes, fees, charges and other 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.

• Section 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.

• Section 175  Distraint of Personal Property.

  The remedy by distraint shall proceed as follows:

  • a  Seizure.

    Upon failure of the person owing any local tax, fee, or charge to pay the same at the time required, the local treasurer or his deputy may, upon written notice, seize or confiscate any personal property belonging to that person or any personal property subject to the lien in sufficient quantity to satisfy the tax, fee, or charge in question, together with any increment thereto incident to delinquency and the expenses of seizure. In such case, the local treasurer or his deputy shall issue a duly authenticated certificate based upon the records of his office showing the fact of delinquency and the amounts of the tax, fee, or charge and penalty due. Such certificate shall serve as sufficient warrant for the distraint of personal property aforementioned, subject to the taxpayer's right to claim exemption under the provisions of existing laws. Distrained personal property shall be sold at public auction in the manner herein provided for.

  • b  Accounting of distrained goods.

    The officer executing the distraint shall make or cause to be made an account of the goods, chattels or effects distrained, a copy of which signed by himself shall be 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 cancelled.

    • Said Committee on Appraisal shall be composed of the city or municipal treasurer as chairman, with a representative of the Commission on Audit and the city or municipal assessor as members.

  • f  Disposition of proceeds.

    The proceeds of the sale shall be applied to satisfy the tax, including the surcharges, interest, and other penalties incident to delinquency, and the expenses of the distraint and sale. The balance over and above what is required to pay the entire claim shall be returned to the owner of the property sold. The expenses chargeable upon the seizure and sale shall embrace only the actual expenses of seizure and preservation of the property pending the sale, and no charge shall be imposed for the services of the local officer or his deputy. Where the proceeds of the sale are insufficient to satisfy the claim, other property may, in like manner, be distrained until the full amount due, including all expenses, is collected.

• Section 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.

• Section 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.

• Section 178  Advertisement and Sale.

  Within thirty (30) days after the 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 the proceedings by paying the taxes, fees, charges, penalties and interests. If he fails to do so, the sale shall proceed and shall be held either at the main entrance of the provincial, city or municipal building, or on the property to be sold, or at any other place as determined by the local treasurer conducting the sale and specified in the notice of sale.

  • Within thirty (30) days after the sale, the local treasurer or his deputy shall make a report of the sale to the sanggunian concerned, and which shall form part of his records. After consultation with the sanggunian, the local treasurer shall make and deliver to the purchaser a certificate of sale, showing the proceedings of the sale, describing the property sold, stating the name of the purchaser and setting out the exact amount of all taxes, fees, charges, and related surcharges, interests, or penalties: Provided, however, That any excess in the proceeds of the sale over the claim and cost of sales shall be turned over to the owner of the property.

  • The local treasurer may, by ordinance duly approved, advance an amount sufficient to defray the costs of collection by means of the remedies provided for in this Title, including the preservation or transportation in case of personal property, and the advertisement and subsequent sale, in cases of personal and real property including improvements thereon.

• Section 179  Redemption of Property Sold.

  Within one (1) year from the date of sale, the delinquent taxpayer or his representative shall have the right to redeem the property upon payment to the local treasurer of the total amount of taxes, fees, or charges, and related surcharges, interests or penalties from the date of delinquency to the date of sale, plus interest of not more than two percent (2%) per month on the purchase price from the date of purchase to the date of redemption. Such payment shall invalidate the certificate of sale issued to the purchaser and the owner shall be entitled to a certificate of redemption from the provincial, city or municipal treasurer or his deputy.

  • The provincial, city or municipal treasurer or his deputy, upon surrender by the purchaser of the certificate of sale previously issued to him, shall forthwith return to the latter the entire purchase price paid by him plus the interest of not more than two percent (2%) per month herein provided for, the portion of the cost of sale and other legitimate expenses incurred by him, and said property thereafter shall be free from the lien of such taxes, fees, or charges, related surcharges, interests, and penalties.

  • The owner shall not, however, be deprived of the possession of said property and shall be entitled to the rentals and other income thereof until the expiration of the time allowed for its redemption.

• Section 180  Final Deed to Purchaser.

  In case the taxpayer fails to redeem the property as provided herein, the local treasurer shall execute a deed conveying to the purchaser so much of the property as has been sold, free from liens of any taxes, fees, charges, related surcharges, interests, and penalties. The deed shall succinctly recite all the proceedings upon which the validity of the sale depends.

• Section 181  Purchase of Property By the Local Government Units for Want of Bidder.

  In case there is no bidder for the real property advertised for sale as provided herein, or if the highest bid is for an amount insufficient to pay the taxes, fees, or charges, related surcharges, interests, penalties and costs, the local treasurer conducting the sale shall purchase the property in behalf of the local government unit concerned to satisfy the claim and within two (2) days thereafter shall make a report of his proceedings which shall be reflected upon the records of his office. It shall be the duty of the Registrar of Deeds concerned upon registration with his office of any such declaration of forfeiture to transfer the title of the forfeited property to the local government unit concerned without the necessity of an order from a competent court.

  • Within one (1) year from the date of such forfeiture, the taxpayer or any of his representative, may redeem the property by paying to the local treasurer the full amount of the taxes, fees, charges, and related surcharges, interests, or penalties, and the costs of sale. If the property is not redeemed as provided herein, the ownership thereof shall be fully vested on the local government unit concerned.

• Section 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.

• Section 183  Collection of Delinquent Taxes, Fees, Charges or other Revenues through Judicial Action.

  The local government unit concerned may enforce the collection of delinquent taxes, fees, charges or other revenues by civil action in any court of competent jurisdiction. The civil action shall be filed by the local treasurer within the period prescribed in Section 194 of this Code.

• Section 184  Further Distraint or Levy.

  The remedies by distraint and levy may be repeated if necessary until the full amount due, including all expenses, is collected.

• Section 185  Personal Property Exempt from Distraint or Levy.

  The following property shall be exempt from distraint and 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.

• Section 186  Power To Levy Other Taxes, Fees or Charges.

  Local government units may exercise the power to levy taxes, fees or charges on any base or subject not otherwise specifically enumerated herein or taxed under the provisions of the National Internal Revenue Code, as amended, or other applicable laws: Provided, That the taxes, fees, or charges shall not be unjust, excessive, oppressive, confiscatory or contrary to declared national policy: Provided, further, That the ordinance levying such taxes, fees or charges shall not be enacted without any prior public hearing conducted for the purpose.

• Section 187  Procedure for Approval and Effectivity of Tax Ordinances and Revenue Measures; Mandatory Public Hearings.

  The procedure for approval of local tax ordinances and revenue measures shall be in accordance with the provisions of this Code: Provided, That public hearings shall be conducted for the purpose prior to the enactment thereof: Provided, further, That any question on the constitutionality or legality of tax ordinances or revenue measures may be raised on appeal within thirty (30) days from the effectivity thereof to the Secretary of Justice who shall render a decision within sixty (60) days from the date of receipt of the appeal: Provided, however, That such appeal shall not have the effect of suspending the effectivity of the ordinance and the accrual and payment of the tax, fee, or charge levied therein: Provided, finally, That within thirty (30) days after receipt of the decision or the lapse of the sixty-day period without the Secretary of Justice acting upon the appeal, the aggrieved party may file appropriate proceedings with a court of competent jurisdiction.

• Section 188  Publication of Tax Ordinances and Revenue Measures.

  Within ten (10) days after their approval, certified true copies of all provincial, city, and municipal tax ordinances or revenue 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.

• Section 189  Furnishing of Copies of Tax Ordinances and Revenue Measures.

  Copies of all provincial, city, and municipal and barangay tax ordinances and revenue measures shall be furnished the respective local treasurers for public dissemination.

• Section 190  Attempt to Enforce Void or Suspended Tax Ordinances and Revenue Measures.

  The enforcement of any tax ordinance or revenue measure after due notice of the disapproval or suspension thereof shall be sufficient ground for administrative disciplinary action against the local officials and employees responsible therefor.

• Section 191  Authority of Local Government Units to Adjust Rates of Tax Ordinances.

  Local 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.

• Section 192  Authority to Grant Tax Exemption Privileges.

  Local government units may, through ordinances duly approved, grant tax exemptions, incentives or reliefs under such terms and conditions as they may deem necessary.

• Section 193  Withdrawal of Tax Exemption Privileges.

  Unless otherwise provided in this Code, tax exemptions or incentives granted to, or presently enjoyed by all persons, whether natural or juridical, including government-owned or -controlled corporations, except local water districts, 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.

• Section 194  Periods of Assessment and Collection.
  • a

    Local taxes, fees, or charges shall be assessed within five (5) years from the date they became due. No action for the collection of such taxes, fees, or charges, whether administrative or judicial, shall be instituted after the expiration of such period: Provided, That taxes, fees or charges which have accrued before the effectivity of this Code may be assessed within a period of three (3) years from the date they became due.

  • b

    In case of fraud or intent to evade the payment of taxes, fees, or charges, the same may be assessed within ten (10) years from discovery of the fraud or intent to evade payment.

  • c

    Local taxes, fees, or charges may be collected within five (5) years from the date of 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 of collection;

    • 2

      The taxpayer requests for a reinvestigation and executes a waiver in writing before expiration of the period within which to assess or collect; and

    • 3

      The taxpayer is out of the country or otherwise cannot be located.

• Section 195  Protest of Assessment.

  When the local treasurer or his duly authorized representative finds that correct taxes, fees, or charges have not been paid, he shall issue a notice of assessment stating the nature of the tax, fee, or charge, the amount of deficiency, the surcharges, interests and penalties. Within sixty (60) days from the receipt of the notice of assessment, the taxpayer may file a written protest with the local treasurer contesting the assessment; otherwise, the assessment shall 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 cancelling wholly or partially the assessment. However, if the local treasurer finds the assessment to be wholly or partly correct, he shall deny the protest wholly or partly with notice to the taxpayer. The taxpayer shall have thirty (30) days from the receipt of the denial of the protest or from the lapse of the sixty (60)-day period prescribed herein within which to appeal with the court of competent jurisdiction otherwise the assessment becomes conclusive and unappealable.

• Section 196  Claim for Refund of Tax Credit.

  No case or proceeding shall be maintained in any court for the recovery of any tax, fee, or charge erroneously or illegally collected until a written claim for refund or credit has been filed with the local treasurer. No case or proceeding shall be entertained in any court after the expiration of two (2) years from the date of the payment of such tax, fee, or charge, or from the date the taxpayer is entitled to a refund or credit.

• Section 197  Scope.

  This Title shall govern the administration, appraisal, assessment, levy and collection of real property tax.

• Section 198  Fundamental Principles.

  The appraisal, assessment, levy and collection of real property tax shall be guided by the following fundamental principles:

  • a

    Real property shall be appraised at its current and fair market value;

  • b

    Real property shall be classified for assessment purposes on the basis of its actual use;

  • c

    Real property shall be assessed on the basis of a uniform classification within each local government unit;

  • d

    The appraisal, assessment, levy and collection of real property tax shall not be let to any private person; and

  • e

    The appraisal and assessment of real property shall be equitable.

• Section 199  Definition 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, 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 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 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, 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.

• Section 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.

• Section 201  Appraisal of Real Property.

  All real property, whether taxable or exempt, shall be appraised at the current and fair market value prevailing in the locality where the property is situated. The Department of Finance shall promulgate the necessary rules and regulations for the classification, appraisal, and assessment of real property pursuant to the provisions of this Code.

• Section 202  Declaration of Real Property by the Owner or Administrator.

  It shall be the duty of all persons, natural or juridical, owning or administering real property, including the improvements therein, within a city or municipality, or their duly authorized representative, to prepare, or cause to be prepared, and file with the provincial, city or municipal assessor, a sworn statement declaring the true value of their property, whether previously declared or undeclared, taxable or exempt, which shall be the current and fair market value of the property, as determined by the declarant. Such declaration shall contain a description of the property sufficient in detail to enable the assessor or his deputy to identify the same for assessment purposes. The sworn declaration of real property herein referred to shall be filed with the assessor concerned once every three (3) years during the period from January first (1st) to June thirtieth (30th) commencing with the calendar year 1992.

• Section 203  Duty of Person Acquiring Real Property or Making Improvement Thereon.

  It shall also be the duty of any person, or his authorized representative, acquiring at any time real property in any municipality or city or making any improvement on real property, to prepare, or cause to be prepared, and file with the provincial, city or municipal assessor, a sworn statement declaring the true value of subject property, within sixty (60) days after the acquisition of such property or upon completion or occupancy of the improvement, whichever comes earlier.

• Section 204  Declaration of Real Property by the Assessor.

  When any person, natural or juridical, by whom real property is required to be declared under Section 202 hereof, refuses or fails for any reason to make such declaration within the time prescribed, the provincial, city or municipal assessor shall himself declare the property in the name of the defaulting owner, if known, or against an unknown owner, as the case may be, and shall assess the property for taxation in accordance with the provision of this Title. No oath shall be required of a declaration thus made by the provincial, city or municipal assessor.

• Section 205  Listing of Real Property in the Assessment Rolls.
  • a

    In every province and city, including the municipalities within the Metropolitan Manila Area, there shall be prepared and maintained by the provincial, city or municipal assessor an assessment roll wherein shall be listed all real property, whether taxable or exempt, located within the territorial jurisdiction of the local government unit concerned. Real property shall be listed, valued and assessed in the name of the owner or administrator, or anyone having legal interest in the property.

  • b

    The undivided real property of a deceased person may be listed, valued and assessed in the name of the estate or of the heirs and devisees without designating them individually; and undivided real property other than that owned by a deceased may be listed, valued and assessed in the name of one or more co-owners: Provided, however, That such heir, devisee, or co-owner shall be liable severally and proportionately for all obligations imposed by this Title and the payment of the real property tax with respect to the undivided property.

  • c

    The real property of a corporation, partnership, or association shall be listed, valued and 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.

• Section 206  Proof of Exemption of Real Property from Taxation.

  Every person by or for whom real property is declared, who shall claim tax exemption for such property under this Title shall file with the provincial, city or municipal assessor within thirty (30) days from the date of the declaration of real property sufficient documentary evidence in support of such claim including corporate charters, title of ownership, 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. However, if the property shall be proven to be tax exempt, the same shall be dropped from the assessment roll.

• Section 207  Real Property Identification System.

  All declarations of real property made under the provisions of this Title shall be kept and filed under a uniform classification system to be established by the provincial, city or municipal assessor.

• Section 208  Notification of Transfer of Real Property Ownership.

  Any person who shall transfer real property ownership to another shall notify the provincial, city or municipal assessor concerned within sixty (60) days from the date of such transfer. The notification shall include the mode of transfer, the description of the property alienated, the name and address of the transferee.

• Section 209  Duty of Registrar of Deeds to Apprise Assessor of Real Property Listed in Registry.
  • a

    To ascertain whether or not any real property entered in the Registry of Property has escaped discovery and listing for the purpose of taxation, the Registrar of Deeds shall prepare and submit to the provincial, city or municipal assessor, within six (6) months from the date of effectivity of this Code and every year thereafter, an abstract of his registry, which shall include brief but sufficient description of the real properties entered therein, 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.

• Section 210  Duty of Official Issuing Building Permit or Certificate of Registration of Machinery to Transmit Copy to Assessor.

  Any public official or employee who may now or hereafter be required by law or regulation to issue to any person a permit for the construction, addition, repair, or renovation of a building, or permanent improvement on land, or a certificate of registration for any machinery, including machines, mechanical contrivances, and apparatus attached or affixed on land or to another real property, shall transmit a copy of such permit or certificate within thirty (30) days of its issuance, to the assessor of the province, city or municipality where the property is situated.

• Section 211  Duty of Geodetic Engineers to Furnish Copy of Plans to Assessor.

  It shall be the duty of all geodetic engineers, public or private, to furnish free of charge to the assessor of the province, city or municipality where the land is located with a white or blue print copy of 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.

• Section 212  Preparation of Schedule of Fair Market Values.

  Before any general revision of property assessment is made pursuant to the provisions of this Title, there shall be prepared a schedule of fair market values by the provincial, city and 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 (2) other conspicuous public places therein.

• Section 213  Authority of Assessor to Take Evidence.

  For the purpose of obtaining information on which to base the market value of any real property, the assessor of the province, city or municipality or his deputy may summon the owners of the properties to be affected or persons having legal interest therein and witnesses, administer oaths, and take deposition concerning the property, its ownership, amount, nature, and value.

• Section 214  Amendment of Schedule of Fair Market Values.

  The provincial, city or municipal assessor may recommend to the sanggunian concerned amendments to correct errors in valuation in the schedule of fair market values. The sanggunian concerned shall, by ordinance, act upon the recommendation within ninety (90) days from receipt thereof.

• Section 215  Classes of Real Property for Assessment Purposes.

  For purposes of assessment, real property shall be classified as residential, agricultural, commercial, industrial, mineral, 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.

• Section 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.

• Section 217  Actual Use of Real Property as Basis for Assessment.

  Real property shall be classified, valued and assessed on the basis of its actual use regardless of where located, whoever owns it, and whoever uses it.

• Section 218  Assessment Levels.

  The assessment levels to be applied to the fair market value of real property to determine its assessed value shall be fixed by ordinances of the sangguniang panlalawigan, sangguniang panlungsod or sangguniang bayan of a municipality within the Metropolitan Manila Area, at the rates not exceeding the following:

  • a  On Lands

    CLASS ASSESSMENT	LEVELS
    Residential	20%
    Agricultural	40%
    Commercial	50%
    Industrial	50%
    Mineral	50%
    Timberland	20%

  • b  On Buildings and Other Structures
    • 1  Residential

      Fair market Value

      Over	Not Over	Assessment Levels
      	P175,000.00	0%
      P175,000.00	300,000.00	10%
      300,000.00	500,000.00	20%
      500,000.00	750,000.00	25%
      750,000.00	1,000,000.00	30%
      1,000,000.00	2,000,000.00	35%
      2,000,000.00	5,000,000.00	40%
      5,000,000.00	10,000,000.00	50%
      10,000,000.00		60%

    • 2  Agricultural

      Fair market Value

      Over	Not Over	Assessment Levels
      	P300,000.00	25%
      P300,000.00	500,000.00	30%
      500,000.00	750,000.00	35%
      750,000.00	1,000,000.00	40%
      1,000,000.00	2,000,000.00	45%
      2,000,000.00		50%

    • 3  Commercial / Industrial

      Fair market Value

      Over	Not Over	Assessment Levels
      	P300,000.00	30%
      P300,000.00	500,000.00	35%
      500,000.00	750,000.00	40%
      750,000.00	1,000,000.00	50%
      1,000,000.00	2,000,000.00	60%
      2,000,000.00	5,000,000.00	70%
      5,000,000.00	10,000,000.00	75%
      10,000,000.00		80%

    • 4  Timberland

      Fair market Value

      Over	Not Over	Assessment Levels
      	P300,000.00	40%
      P300,000.00	500,000.00	50%
      500,000.00	750,000.00	55%
      750,000.00	1,000,000.00	60%
      5,000,000.00	2,000,000.00	65%
      2,000,000.00		70%

  • c  On Machineries

    Class	Assessment Levels
    Agricultural	40%
    Residential	50%
    Commercial	80%
    Industrial	80%

  • d  On Special Classes

    The assessment levels for all lands buildings, machineries and other improvements;

    Actual Use	Assessment Level
    Cultural	15%
    Scientific	15%
    Hospital	15%
    Local water districts	10%
    Government-owned or controlled corporations engaged in the supply and distribution of
    water and/or generation and transmission of electric power	10%

• Section 219  General Revision of Assessments and Property Classification.

  The provincial, city or municipal assessor shall undertake a general revision of real property assessments within two (2) years after the effectivity of this Code and every three (3) years thereafter.

• Section 220  Valuation of Real Property.

  In cases where (a) real property is declared and listed for taxation purposes for the first time; (b) there is an ongoing general revision of property classification and assessment; or (c) a request is made by the person in whose name the property is declared, the provincial, city or municipal assessor or his duly authorized deputy shall, in accordance with the provisions of this Chapter, make a classification, appraisal and assessment of the real property listed and described in the declaration irrespective of any previous assessment or taxpayer's valuation thereon: Provided, however, That the assessment of real property shall not be increased oftener than once every three (3) years except in case of new improvements substantially increasing the value of said property or of any change in its actual use.

• Section 221  Date of Effectivity of Assessment or Reassessment.

  All assessments or reassessments made after the first (1st) day of January of any year shall take effect on the first (1st) day of January of the succeeding year: Provided, however, That the reassessment of real property due to its partial or total destruction, or to a major change in its actual use, or to any great and sudden inflation or deflation of real property values, or to the gross illegality of the assessment when made or to any other abnormal cause, shall be made within ninety (90) days from the date any such cause or causes occurred, and shall take effect at the beginning of the quarter next following the reassessment.

• Section 222  Assessment of Property Subject to Back Taxes.

  Real property declared for the first time shall be assessed for taxes for the period during which it would have been liable but in no case for more than ten (10) years prior to the date of initial assessment: Provided, however, That such taxes shall be computed on the basis of the applicable schedule of values in force during the corresponding period.

  • If such taxes are paid on or before the end of the quarter following the date the notice of assessment was received by the owner or his representative, no interest for delinquency shall be imposed thereon; otherwise, such taxes shall be subject to an interest at the rate of two percent (2%) per month or a fraction thereof from the date of the receipt of the assessment until such taxes are fully paid.

• Section 223  Notification of New or Revised Assessment.

  When real property is assessed for the first time or when an existing assessment is increased or decreased, the provincial, city or municipal assessor shall within thirty (30) days give written notice of such new or revised assessment to the person in whose name the property is declared. The notice may be delivered personally or by registered mail or through the assistance of the punong barangay to the last known address of the person to be served.

• Section 224  Appraisal and Assessment of Machinery.
  • a

    The fair market value of a brand-new machinery shall be the acquisition cost. In all other cases, the fair market value shall be determined by dividing the remaining economic life of the machinery by its estimated economic life and multiplied by the replacement or reproduction cost.

  • b

    If the machinery is imported, the acquisition cost includes freight, insurance, bank and other charges, brokerage, arrastre and handling, duties and taxes, plus cost of inland transportation, handling, and installation charges at the present site. The cost in foreign currency of imported machinery shall be converted to peso cost on the basis of foreign currency exchange rates as fixed by the Central Bank.

• Section 225  Depreciation Allowance for Machinery.

  For purposes of assessment, a 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.

• Section 226  Local Board of Assessment Appeals.

  Any owner or person having legal interest in the property who is not satisfied with the action of the provincial, city or municipal assessor in the assessment of his property may, within sixty (60) days from the date of receipt of the written notice of assessment, appeal to the Board of Assessment Appeals of the province or city by filing a petition under oath in the form prescribed for the purpose, together with copies of the tax declarations and such affidavits or documents submitted in support of the appeal.

• Section 227  Organization, Powers, Duties, and Functions of the Local Board of Assessment Appeals.
  • a

    The Board of Assessment Appeals of the province or city shall be composed of the Registrar of Deeds, as Chairman, the provincial or city prosecutor and the provincial, or city engineer as members, who shall serve as such in an ex officio capacity without additional compensation.

  • b

    The chairman of the Board shall have the power to designate any employee of the province or city to serve as secretary to the Board also without additional compensation.

  • c

    The chairman and members of the Board of Assessment Appeals of the province or city shall assume their respective positions without need of further appointment or special designation immediately upon effectivity of this Code. They shall take 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.

• Section 228  Meetings and Expenses of the Local Board of Assessment Appeals.
  • a

    The Board of Assessment Appeals of the province or city shall meet once a month and as often as may be necessary for the prompt disposition of appealed cases. No member of the Board shall be entitled to per diems or traveling expenses for his attendance in Board meetings, except when conducting an ocular inspection in connection with a case under appeal.

  • b

    All expenses of the Board shall be charged against the general fund of the province or city, as the case may be. The sanggunian concerned shall appropriate the necessary funds to enable the Board in their respective localities to operate effectively.

• Section 229  Action by the Local Board of Assessment Appeals.
  • a

    The Board shall decide the appeal within one hundred twenty (120) days from the date of receipt of such appeal. The Board, after hearing, shall render its decision based on substantial evidence or such relevant evidence on record as a reasonable mind might accept as adequate to support the conclusion.

  • b

    In the exercise of its appellate jurisdiction, the Board shall have the power to summon witnesses, administer oaths, conduct ocular inspection, take depositions, and issue subpoena and subpoena duces tecum. The proceedings of the Board shall be conducted solely for the purpose of ascertaining the facts without necessarily adhering to technical rules applicable in judicial proceedings.

  • c

    The secretary of the Board shall furnish the owner of the property or the person having legal interest therein and the provincial or city assessor with a copy of the decision of the Board. In case the provincial or city assessor concurs in the revision or the assessment, it shall be his duty to notify the owner of the property or the person having legal interest therein of such fact using the form prescribed for the purpose. The owner of the property or the person having legal interest therein or the assessor who is not satisfied with the decision of the Board, may, within thirty (30) days after receipt of the decision of said Board, appeal to the Central Board of Assessment Appeals, as herein provided. The decision of the Central Board shall be final and executory.

• Section 230  Central Board of Assessment Appeals.

  The Central Board of Assessment Appeals shall be composed of a chairman and two (2) members to be appointed by the President, who shall serve for a term of seven (7) years, without reappointment. Of those first appointed, the chairman shall hold office for seven (7) years, one member for five (5) years, and the other member for three (3) years. Appointment to any vacancy shall be only for the unexpired portion of the term of the predecessor. In no case shall any member be appointed or designated in a temporary or acting capacity. The chairman and the members of the Board shall be Filipino citizens, at least forty (40) years old at the time of their appointment, and members of the Bar or Certified Public Accountants 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 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 budget of the Department of Finance in the corresponding General Appropriations Act.

• Section 231  Effect of Appeal on the Payment of Real Property Tax.

  Appeal on 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.

• Section 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.

• Section 233  Rates of Levy.

  A province or city or a municipality within the Metropolitan Manila Area shall fix a uniform rate of basic real property tax applicable to their respective localities as follows:

  • a

    In the case of a province, at the rate not exceeding one percent (1%) of the assessed value of real property; and

  • b

    In the case of a city or a municipality within the Metropolitan Manila Area, at the rate not exceeding two percent (2%) of the assessed value of real property.

• Section 234  Exemptions from Real Property Tax.

  The following are exempted from payment of the real property tax:

  • a

    Real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person;

  • b

    Charitable institutions, churches, parsonages or convents appurtenant thereto, mosques, non-profit 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.

• Section 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).

• Section 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.

• Section 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.

• Section 238  Idle Lands Exempt from Tax.

  A province or city or a municipality within the Metropolitan Manila Area may exempt idle lands from the additional levy by reason of force majeure, civil disturbance, natural calamity or any cause or circumstance which physically or legally prevents the owner of the property or person having legal interest therein from improving, utilizing or cultivating the same.

• Section 239  Listing of Idle Lands by the Assessor.

  The provincial, city or municipal assessor shall make and keep an updated record of all idle lands located within his area of jurisdiction. For purposes of collection, the provincial, city or municipal assessor shall furnish a copy thereof to the provincial or city treasurer who shall notify, on the basis of such record, the owner of the property or person having legal interest therein of the imposition of the additional tax.

• Section 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.

• Section 241  Ordinance Imposing a Special Levy.

  A tax ordinance imposing a special levy shall describe with reasonable accuracy the nature, extent, and location of the public works projects or improvements to be undertaken, state the estimated cost thereof, specify the metes and bounds by monuments and lines and the number of annual installments for the payment of the special levy which in no case shall be less than five (5) nor more than ten (10) years. The sanggunian concerned shall not be obliged, in the apportionment and computation of the special levy, to establish a uniform percentage of all lands subject to the payment of the tax for the entire district, but it may fix different rates for different parts or sections thereof, depending on whether such land is more or less benefited by the proposed work.

• Section 242  Publication of Proposed Ordinance Imposing a Special Levy.

  Before the 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.

• Section 243  Fixing the Amount of Special Levy.

  The special levy authorized herein shall be apportioned, computed, and assessed according to the assessed valuation of the lands affected as shown by the books of the assessor concerned, or its current assessed value as fixed by said assessor if the property does not appear of record in his books. Upon the effectivity of the ordinance imposing special levy, the assessor concerned shall forthwith proceed to determine the annual amount of special levy assessed against each parcel of land comprised within the area especially benefited and shall send to each landowner a written notice thereof by mail, personal service or publication in appropriate cases.

• Section 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.

• Section 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.

• Section 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.

• Section 247  Collection of Tax.

  The collection of the real property tax with interest thereon and related expenses, and the enforcement of the remedies provided for in this Title or any applicable laws, shall be the responsibility of the city or municipal treasurer concerned.

  • The city or municipal treasurer may deputize the barangay treasurer to collect all taxes on real property located in the barangay: Provided, That the barangay treasurer is properly bonded for the purpose: Provided, further, That the premium on the bond shall be paid by the city or municipal government concerned.

• Section 248  Assessor to Furnish Local Treasurer with Assessment Roll.

  The provincial, city or municipal assessor shall prepare and submit to the treasurer of the local government unit, on or before the thirty-first (31st) day of December each year, an assessment roll containing a list of all persons whose real properties have been newly assessed or reassessed and the values of such properties.

• Section 249  Notice of Time for Collection of Tax.

  The city or municipal treasurer shall, on or before the thirty-first (31st) day of January each year, in the case of the basic real property tax and the additional tax for the Special Education Fund (SEF) or 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.

• Section 250  Payment of Real Property Taxes in Installments.

  The owner of the real property or the person having legal interest therein may pay the basic real property tax and the additional tax for Special Education Fund (SEF) due thereon without interest in four (4) equal installments: the first installment to be due and payable on or before the thirty-first (31st) of March; the second installment, on or before the thirty (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.

• Section 251  Tax Discount for Advanced Prompt Payment.

  If the basic real property tax and the additional tax accruing to the Special Education Fund (SEF) are paid in advance in accordance with the prescribed schedule of payment as provided under Section 250, the sanggunian concerned may grant a discount not exceeding twenty percent (20%) of the annual tax due.

• Section 252  Payment Under Protest.
  • a

    No protest shall be entertained unless the taxpayer first pays the tax. There shall be annotated on the tax receipts the words "paid under protest". The protest in writing must be filed within thirty (30) days from payment of the tax to the provincial, city treasurer or municipal treasurer, in the case of a municipality within Metropolitan Manila Area, who shall decide the protest within sixty (60) days from receipt.

  • b

    The tax or a portion thereof paid under protest shall be held in trust by the treasurer concerned.

  • c

    In the event that the protest is finally decided in favor of the taxpayer, the amount or portion of the tax protested shall be refunded to the protestant, or applied as tax credit against his existing or future tax liability.

  • d

    In the event that the protest is denied or upon the lapse of the sixty-day period prescribed in subparagraph (a), the taxpayer may avail of the remedies as provided for in Chapter 3, Title II, Book II of this Code.

• Section 253  Repayment of Excessive Collections.

  When an assessment of basic real property tax, or any other tax levied under this Title, is found 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 II, Book II of this Code.

• Section 254  Notice of Delinquency in the Payment of the Real Property Tax.
  • a

    When the real property tax or any other tax imposed under this Title becomes delinquent, the provincial, city or municipal treasurer shall immediately cause a notice of the delinquency to be posted at the main entrance of the provincial capitol, or city or municipal hall and in a publicly accessible and conspicuous place in each barangay of the local government unit concerned. The notice of delinquency shall also be published once a week for two (2) consecutive weeks, in a newspaper of general circulation in the province, city, or municipality.

  • b

    Such notice shall specify the date upon which the tax became delinquent and shall state that personal property may be distrained to effect payment. It shall likewise state that at any time before the distraint of personal property, payment of the tax with surcharges, interests and penalties may be made in accordance with the next following section, and unless the tax, surcharges and penalties are paid before the expiration of the year for which the tax is due, except when the notice of assessment or special levy is contested administratively or judicially pursuant to the provisions of Chapter 3, Title II, Book II of this Code, the delinquent real property will be sold at public auction, and the title to the property will be vested in the purchaser, subject, however, to the right of the delinquent owner of the property or any person having legal interest therein to redeem the property within one (1) year from the date of sale.

• Section 255  Interests on Unpaid Real Property Tax.

  In case of failure to pay the basic real property tax or any other tax levied under this Title upon the expiration of the periods as provided in Section 250, or when due, as the case may be, shall subject the taxpayer to the payment of interest at the rate of two percent (2%) per month on the unpaid amount or a fraction thereof, until the delinquent tax shall have been fully paid: Provided, however, That in no case shall the total interest on the unpaid tax or portion thereof exceed thirty-six (36) months.

• Section 256  Remedies For The Collection Of Real Property Tax.

  For the collection of the basic real property tax and any other tax levied under this Title, the local government unit concerned may avail of the remedies by administrative action through levy on real property or by judicial action.

• Section 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.

• Section 258  Levy on Real Property.

  After the expiration of the time required to pay the basic real property tax or any other tax levied under this Title, real property subject to such tax may be levied upon through the issuance of a warrant on or before, or simultaneously with, the institution of the civil action for the collection of the delinquent tax. The provincial or city treasurer, or a treasurer of a municipality within the Metropolitan Manila Area, as the case may be, when issuing a warrant of levy shall prepare a duly authenticated certificate showing the name of the delinquent owner of the property or person having legal interest therein, the description of the property, the amount of the tax due and the interest thereon. The warrant shall operate with the force of a legal execution throughout the province, city or a municipality within the Metropolitan Manila Area. The warrant shall be mailed to or served upon the delinquent owner of the real property or person having legal interest therein, or in case he is out of the country or cannot be located, 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.

• Section 259  Penalty for Failure to Issue and Execute Warrant.

  Without prejudice to criminal prosecution under the Revised Penal Code and other applicable laws, any local treasurer or his deputy who fails to issue or execute the warrant of levy within one (1) year from the time the tax becomes delinquent or within thirty (30) days from the date of the issuance thereof, or who is found guilty of abusing the exercise thereof in an administrative or judicial proceeding shall be dismissed from the service.

• Section 260  Advertisement and Sale.

  Within thirty (30) days after service of the warrant of levy, the local treasurer shall proceed to publicly advertise for sale or auction the property or a usable portion thereof as may be 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.

• Section 261  Redemption of Property Sold.

  Within one (1) year from the date of sale, the owner of the delinquent real property or person having legal interest therein, or his representative, shall have the right to redeem the property upon payment to the local treasurer of the amount of the delinquent tax, including the interest due thereon, and the expenses of sale from the date of delinquency to the date of sale, plus interest of not more than two percent (2%) per month on the purchase price from the date of sale to the date of redemption. Such payment shall invalidate the certificate of sale issued to the purchaser and the owner of the delinquent real property or person having legal interest therein shall be entitled to a certificate of redemption which shall be issued by the local treasurer or his deputy.

  • From the date of sale until the expiration of the period of redemption, the delinquent real property shall remain in the possession of the owner or person having legal interest therein who shall be entitled to the income and other fruits thereof.

  • The local treasurer or his deputy, upon receipt from the purchaser of the certificate of sale, shall forthwith return to the latter the entire amount paid by him plus interest of not more than two percent (2%) per month. Thereafter, the property shall be free from the lien of such delinquent tax, interest due thereon and expenses of sale.

• Section 262  Final Deed to Purchaser.

  In case the owner or person having legal interest 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.

• Section 263  Purchase of Property By the Local Government Units for Want of Bidder.

  In case there is no bidder for the real property advertised for sale as provided herein, or if the highest bid is for an amount insufficient to pay the real property tax and the related interest and costs of sale the local treasurer conducting the sale shall purchase the property in behalf of the local government unit concerned to satisfy the claim and within two (2) days thereafter shall make a report of his proceedings which shall be reflected upon the records of his office. It shall be the duty of the Registrar of Deeds concerned upon registration with his office of any such declaration of forfeiture to transfer the title of the forfeited property to the local government unit concerned without the necessity of an order from a competent court.

  • Within one (1) year from the date of such forfeiture, the taxpayer or any of his representative, may redeem the property by paying to the local treasurer the full amount of the real property tax and the related interest and the costs of sale. If the property is not redeemed as provided herein, the ownership thereof shall be vested on the local government unit concerned.

• Section 264  Resale of Real Estate Taken for Taxes, Fees, or Charges.

  The sanggunian concerned may, by ordinance duly approved, and upon notice of not less than twenty (20) days, sell and dispose of the real property acquired under the preceding section at public auction. The proceeds of the sale shall accrue to the general fund of the local government unit concerned.

• Section 265  Further Distraint or Levy.

  Levy may be repeated if necessary until the full amount due, including all expenses, is collected.

• Section 266  Collection of Real Property Tax Through the Courts.

  The local government unit concerned may enforce the collection of the basic real property tax or any other tax levied under this Title by civil action in any court of competent jurisdiction. The civil action shall be filed by the local treasurer within the period prescribed in Section 270 of this Code.

• Section 267  Action Assailing Validity of Tax Sale.

  No court shall entertain any action assailing the validity of any sale at public auction of real property or rights therein under this Title until the taxpayer shall have deposited with the court the amount for which the real property was sold, together with interest of two percent (2%) per month from the date of sale to the time of the institution of the action. The amount so deposited shall be paid to the purchaser at the auction sale if the deed is declared invalid but it shall be returned to the depositor if the action fails.

  • Neither shall any court declare a sale at public auction invalid by reason of irregularities or informalities in the proceedings unless the substantive rights of the delinquent owner of the real property or the person having legal interest therein have been impaired.

• Section 268  Payment of Delinquent Taxes on Property Subject of Controversy.

  In any action involving the ownership or possession of, or succession to, real property, the court may, motu proprio or upon representation of the provincial, city, or municipal treasurer or his deputy, award such ownership, possession, or succession to any party to the action upon payment to the court of the taxes with interest due on the property and all other costs that may have accrued, subject to the final outcome of the action.

• Section 269  Treasurer to Certify Delinquencies Remaining Uncollected.

  The provincial, city or municipal treasurer or 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 non-collection 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.

• Section 270  Periods Within Which to Collect Real Property Taxes.

  The basic real property tax and any other tax levied under this Title shall be collected within five (5) years from the date they become due. No action for the collection of the tax, whether administrative or judicial, shall be instituted after the expiration of such period. In case of fraud or intent to evade payment of the tax, such action may be instituted for the collection of the same within ten (10) years from the discovery of such fraud or intent to evade payment.

  • The period of prescription within which to collect shall be suspended for the time during which:

    • 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.

• Section 271  Distribution of Proceeds.

  The proceeds of the basic real property tax, including interest thereon, and proceeds from the use, lease or disposition, sale or redemption of property acquired at a public auction, in accordance with the provisions of this Title, by the province or city or a municipality within the Metropolitan Manila Area shall be distributed as follows:

  • a

    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

      Barangay – Thirty percent (30%) shall be distributed among the component barangays of the cities where the property is located in the following manner:

      • i

        Fifty percent (50%) shall accrue to the barangay where the property is located;

      • ii

        Fifty percent (50%) shall accrue equally to all component barangays of the city; and

  • 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.

• Section 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 Special Education Fund (SEF) shall be automatically released to the local school boards: Provided, That, in case of provinces, the proceeds shall be divided equally between the provincial and municipal school boards: Provided, however, That the proceeds shall be allocated for the operation and maintenance of public schools, construction and repair of school buildings, facilities and equipment, educational research, purchase of books and periodicals, and sports development as determined and approved by the local school board.

• Section 273  Proceeds of the Tax on Idle Lands.

  The proceeds of the additional real property tax on idle lands shall accrue to the respective general fund of the province or city where the land is located. In the case of a municipality within the Metropolitan Manila Area, the proceeds shall accrue equally to the Metropolitan Manila Authority and the municipality where the land is located.

• Section 274  Proceeds of the Special Levy.

  The proceeds of the special levy on lands benefited by public works, projects and other improvements shall accrue to the general fund of the local government unit which financed such public works, projects or other improvements.

• Section 275  General Assessment Revision; Expenses Incident Thereto.

  The sanggunian of provinces, cities and municipalities within the Metropolitan Manila Area shall provide the necessary appropriations to defray the expenses incident to the general revision of real property assessment.

  • All expenses incident to a general revision of real property assessments shall, by ordinance of the sangguniang panlalawigan, be apportioned between the province and the municipality on the basis of the taxable area of the municipality concerned.

• Section 276  Condonation or Reduction of Real Property Tax and Interest.

  In case of a general failure of crops or substantial decrease in the price of agricultural or agribased products, or calamity in any province, city or municipality, the sanggunian concerned, by ordinance passed prior to the first (1st) day of January of any year and upon recommendation of the Local Disaster Coordinating Council, may condone or reduce, wholly or partially, the taxes and interest thereon for the succeeding year or years in the city or municipality affected by the calamity.

• Section 277  Condonation or Reduction of Tax by the President of the Philippines.

  The 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.

• Section 278  Duty of Registrar of Deeds and Notaries Public to Assist the Provincial, City or Municipal Assessor.

  It shall be the duty of the Registrar of Deeds and notaries public to furnish the provincial, city or municipal assessor with copies of all contracts selling, transferring, or otherwise conveying, leasing, or mortgaging real property received by, or acknowledged before them.

• Section 279  Insurance Companies to Furnish Information.

  Insurance companies are hereby required to furnish the provincial, city or municipal assessor copies of any contract or policy insurance on buildings, structures, and improvements insured by them or such other documents which may be necessary for the proper assessment thereof.

• Section 280  Fees in Court Actions.

  All court actions, criminal or civil, instituted at the instance of the provincial, city or municipal treasurer or assessor under the provisions of this Code, shall be exempt from the payment of court and sheriff's fees.

• Section 281  Fees in Registration of Papers or Documents on Sale of Delinquent Real Property to Province, City or Municipality.

  All certificates, documents, and papers covering the sale of delinquent property to the province, city or municipality, if registered in the Registry of Property, shall be exempt from the documentary stamp tax and registration fees.

• Section 282  Real Property Assessment Notices or Owner's Copies of Tax Declarations to be Exempt from Postal Charges or Fees.

  All real property assessment notices or owner's copies of tax declaration sent through the mails by the assessor shall be exempt from the payment of postal charges or fees.

• Section 283  Sale and Forfeiture Before Effectivity of Code.

  Tax delinquencies incurred, and sales and forfeitures of delinquent real property effected, before the effectivity of this Code shall be governed by the provisions of applicable laws then in force.

• Section 284  Allotment of Internal Revenue Taxes.

  Local government units shall have a share in the national internal revenue taxes based on the collection of the third fiscal year preceding the current fiscal year as follows:

  • a

    On the first year of the effectivity of this Code, thirty percent (30%);

  • b

    On the second year, thirty-five percent (35%); and

  • c

    On the third year and thereafter, forty percent (40%).

  • Provided, That in the event that the National Government incurs an unmanageable public sector deficit, the President of the Philippines is hereby authorized, upon the recommendation of Secretary of Finance, Secretary of Interior and Local Government, and Secretary of Budget and Management, and subject to consultation with the presiding officers of both Houses of Congress and the presidents of the "liga", to make the necessary adjustments in the internal revenue allotment of local government units but in no case shall the allotment be less than thirty percent (30%) of the collection of national internal revenue taxes of the third fiscal year preceding the current fiscal year: Provided, further, That in the first year of the effectivity of this Code, the local government units shall, in addition to the thirty percent (30%) internal revenue allotment which shall include the cost of devolved functions for essential public services, be entitled to receive the amount equivalent to the cost of devolved personal services.

• Section 285  Allocation to Local Government Units.

  The share of local government units in the internal revenue allotment shall be allocated in the following manner:

  • a

    Provinces – Twenty-three percent (23%);

  • b

    Cities – Twenty-three percent (23%);

  • c

    Municipalities – Thirty-four percent (34%); and

  • d

    Barangays – Twenty percent (20%)

  • Provided, however, That the share of each province, city, and municipality shall be determined on the basis of the following formula:

    • a

      Population – Fifty percent (50%);

    • b

      Land Area – Twenty-five percent (25%); and

    • c

      Equal sharing – Twenty-five percent (25%)

  • Provided, further, That the share of each barangay with a population of not less than one hundred (100) inhabitants shall not be less than Eighty thousand (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

        Population – Forty percent (40%); and

      • 2

        Equal Sharing – Sixty percent (60%)

    • b

      On the second year:

      • 1

        Population – Fifty percent (50%); and

      • 2

        Equal Sharing – Fifty percent (50%)

    • c

      On the third year and thereafter:

      • 1

        Population – Sixty percent (60%); and

      • 2

        Equal sharing – Forty percent (40%).

  • Provided, finally, That the financial requirements of barangays created by local government units after the effectivity of this Code shall be the responsibility of the local government unit concerned.

• Section 286  Automatic Release of Shares.
  • a

    The share of each local government unit shall be released, without need of any further action, directly to the provincial, city, municipal or barangay treasurer, as the case may be, on a quarterly basis within five (5) days after the end of each quarter, and which shall not be subject to any lien or holdback that may be imposed by the National Government for whatever purpose.

  • b

    Nothing in this Chapter shall be understood to diminish the share of local government units under existing laws.

• Section 287  Local Development Projects.

  Each local government unit shall appropriate in its annual budget no less than twenty percent (20%) of its annual internal revenue allotment for development projects. Copies of the development plans of local government units shall be furnished the Department of Interior and Local Government.

• Section 288  Rules and Regulations.

  The Secretary of Finance, in consultation with the 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.

• Section 289  Share in the Proceeds from the Development and Utilization of the National Wealth.

  Local government units shall have an equitable share in the proceeds derived from the utilization and development of the national wealth within their respective areas, including sharing the same with the inhabitants by way of direct benefits.

• Section 290  Amount of Share of Local Government Units.

  Local government units shall, in addition to the internal revenue allotment, have a share of forty percent (40%) of the gross collection derived by the national government from the preceding fiscal year from mining taxes, royalties, forestry and fishery charges, and such other taxes, fees, or charges, including related surcharges, interests, or fines, and from its share in any co-production, joint venture or production sharing agreement in the utilization and development of the national wealth within their territorial jurisdiction.

• Section 291  Share of the Local Governments from any Government Agency or 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.

• Section 292  Allocation of Shares.

  The share in the preceding section shall be distributed in the following manner:

  • a

    Where the natural resources are located in the province:

    • 1

      Province – Twenty percent (20%);

    • 2

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

    • 3

      Barangay – Thirty-five percent (35%)

    • Provided, however, That where the natural resources are located in two (2) or more provinces, or in two (2) or more component cities or municipalities or in two (2) or more barangays, their respective shares shall be computed on the basis of:

      • 1

        Population – Seventy percent (70%); and

      • 2

        Land area – Thirty percent (30%)

  • b

    Where the natural resources are located in a highly urbanized or independent component city:

    • 1

      City – Sixty-five percent (65%); and

    • 2

      Barangay – Thirty-five percent (35%)

    • Provided, however, That where the natural resources are located in such two (2) or more cities, the allocation of shares shall be based on the formula on population and land area as specified in paragraph (a) of this section.

• Section 293  Remittance of the Share of Local Government Units.

  The share of local government units from the utilization and development of national wealth shall be remitted in accordance with Section 286 of this Code: Provided, however, That in the case of any government agency or government-owned or -controlled corporation engaged in the utilization and development of the national wealth, such share shall be directly remitted to the provincial, city, municipal or barangay treasurer concerned within five (5) days after the end of each quarter.

• Section 294  Development and Livelihood Projects.

  The proceeds from the share of local government units pursuant to this chapter shall be appropriated by their respective sanggunian to finance local development and livelihood projects: Provided, however, That at least eighty percent (80%) of the proceeds derived from the development and utilization of hydrothermal. geothermal, and other sources of energy shall be applied solely to lower the cost of electricity in the local government unit where such a source of energy is located.

This Title shall govern the power of local government units to create indebtedness and to enter into credit and other financial transactions.

• 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.

• 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.

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.

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.

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.

• 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.

• a

  Local government units may enter into contracts with any duly prequalified individual contractor, for the financing, construction, operation, and maintenance of any financially viable infrastructure facilities, under the build-operate-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 build-operate-and-transfer agreement shall be confirmed by the local development councils.

• c

  Projects implemented under this section shall be subject to the following terms and conditions:

  • 1

    The provincial, city or municipal engineer, as the case may be, upon formal request in writing by the local chief executive, shall prepare the plans and specifications for the proposed 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-4) 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 not, as the case may be, allow any contractor to initiate the prosecution of projects under this section unless such contractor presents proof or evidence that he has posted the required bond.

  • 4

    The contractor shall be entitled to a reasonable return of its investment in accordance with its bid proposal as accepted by the local government unit concerned.

    • 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.

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.

• Section 304  Scope.

  This Title shall govern the conduct and management of financial affairs, transactions, and operations of provinces, cities, municipalities, and barangays.

• Section 305  Fundamental Principles.

  The financial affairs, transactions, and operations of local government units shall be governed by the following fundamental principles:

  • a

    No money shall be paid out of the local treasury except in pursuance of an appropriations ordinance or law;

  • b

    Local government funds and monies shall be spent solely for public purposes;

  • c

    Local revenue is generated only from sources expressly authorized by law or ordinance, and collection thereof shall at all times be acknowledged properly;

  • d

    All monies officially received by a local government officer in any capacity or on any occasion shall be accounted for as local funds, unless otherwise provided by law;

  • 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 local budgets shall be based on functions, activities, and projects, in terms of expected results;

  • h

    Local budget plans and goals shall, as far as practicable, be harmonized with national development plans, goals, and strategies in order to optimize the utilization of resources and to avoid duplication in the use of fiscal and physical resources;

  • i

    Local budgets shall operationalize approved local development plans;

  • j

    Local government units shall ensure that their respective budgets incorporate the requirements of their component units and provide for equitable allocation of resources among these component units;

  • k

    National planning shall be based on local planning to ensure that the needs and aspirations of the people as articulated by the local government units in their respective local development plans are considered in the formulation of budgets of national line agencies or offices;

  • l

    Fiscal responsibility shall be shared by all those exercising authority over the financial affairs, transactions, and operations of the local government units; and

  • m

    The local government unit shall endeavor to have a balanced budget in each fiscal year of operation.

• Section 306  Definition 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" refers to appropriations for the purchase of goods and services, the benefits of which extend beyond the fiscal year and which add to the assets of the local government unit concerned, including investments in public utilities such as public markets and slaughterhouses;

  • e

    "Continuing Appropriation" refers to an appropriation available to support obligations for a specified purpose or projects, such as those for the construction of physical structures or for the acquisition of real property or equipment, even when these obligations are incurred beyond the budget year;

  • f

    "Current Operating Expenditures" refers to appropriations for the purchase of goods and services for the conduct of normal local government operations within the fiscal year, including goods and services that will be used or consumed during the budget year;

  • g

    "Expected Results" refers to the services, products, or benefits that 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" refers to an amount committed to be paid by the local government unit for any lawful act made by an accountable officer for and in behalf of the local government unit concerned;

  • k

    "Personal Services" refers to appropriations for the payment of salaries, wages and other compensation of permanent, temporary, contractual, and casual employees of the local government unit;

  • l

    "Receipts" refers to income realized from operations and activities of the local government or are received by it in the exercise of its corporate functions, consisting of charges for services rendered, conveniences furnished, or the price of a commodity sold, as well as loans, contributions or aids from other entities, except provisional advances for budgetary purposes; and

  • m

    "Revenue" refers to income derived from the regular system of taxation enforced under authority of law or ordinance, and, as such, accrue more or less regularly every year.

• Article I  Receipts, Safekeeping Article and Disposition of Local Funds
  • Section 307  Remittance of Government Monies to the Local Treasury.

    Officers of the 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.

  • Section 308  Local Funds.

    Every local government unit shall maintain a General Fund which shall be used to account for such monies and resources as may be received by and disbursed from the local treasury. The General Fund shall consist of monies and resources of the local government which are available for the payment of expenditures, obligations or purposes not specifically declared by law as accruing and chargeable to, or payable from, any other fund.

  • Section 309  Special Funds.

    There shall be maintained in every provincial, city, or municipal treasury the following special funds:

    • a

      Special Education Fund (SEF) 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 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.

  • Section 310  Separation of Books and Depository Accounts.

    Local accountants and treasurers shall maintain separate books and depository accounts, respectively, for each fund in their custody or administration under such rules and regulations as the Commission on Audit may prescribe.

  • Section 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 of jurisdiction. Earnings of each depository account shall accrue exclusively thereto.

  • Section 312  Separation of Personal Money from Public Funds.

    Local treasurers and other accountable officers shall keep personal monies separate and distinct from local public funds in their custody and shall not make profit out of public money or otherwise apply the same to any use not authorized by law or ordinance.

• Article II  Special Accounts
  • Section 313  Special Accounts to be Maintained in the General Fund.

    Local government units shall maintain special accounts in the general fund for the following:

    • a

      Public utilities and other economic enterprises;

    • b

      Loans, interests, bond issues, and other contributions for specific purposes; and

    • c

      Development projects funded from the share of the local government unit concerned in the internal revenue allotment and such other special accounts which may be created by law or ordinance.

    • Receipts, transfers, and expenditures involving the foregoing special accounts shall be properly taken up thereunder.

    • Profits or income derived from the operation of public utilities and other economic enterprises, after deduction for the cost of improvement, repair and other related expenses of the public utility or economic enterprise concerned, shall first be applied for the return of the advances or loans made therefor. Any excess shall form part of the general fund of the local government unit concerned.

• Article I  Local Government Budgets
  • Section 314  Form and Content.
    • a

      Local government budgets shall primarily consists 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 revenue-raising 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.

  • Section 315  Submission of Detailed Statements of Income and Expenditures.
    • a

      On or before the fifteenth (15th) day of July of each year, local treasurers shall submit to their respective local chief executives a certified statement covering the income and expenditures of the preceding fiscal year, the actual income and expenditures of the first two (2) quarters of the current year, and the estimated income and expenditures for the last two (2) quarters of the current year.

  • Section 316  Local Finance Committee.

    There is hereby created in every province, city or municipality a local finance committee to be composed of the local planning and development officer, the local budget officer, and the local treasurer. It shall exercise the following functions:

    • a

      Determine the income reasonably projected as collectible for the ensuing fiscal year;

    • b

      Recommend the appropriate tax and other revenue measures or borrowings which may be appropriate to support the budget;

    • c

      Recommend to the local chief executive concerned the level of the annual expenditures and the ceilings of spending for economic, social, and general services based on the approved local development plans;

    • d

      Recommend to the local chief executive concerned the proper allocation of expenditures for each development activity between current operating expenditures and capital outlays;

    • e

      Recommend to the local chief executive concerned the amount to be allocated for capital 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.

  • Section 317  Submission of Budget Proposals by Heads of Departments or Offices.
    • a

      Each head of department or office shall submit a budget proposal for his department or office to the local chief executive on or before the fifteenth (15th) of July of each year: Provided, That the budget proposal of each department of 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 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 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.

  • Section 318  Preparation of the Budget by the Local Chief Executive.

    Upon receipt of the statements of income and expenditures from the treasurer, the budget proposals of the heads of departments and offices, and the estimates of income and budgetary ceilings from the local finance committee, the local chief executive shall prepare the executive budget for the ensuing fiscal year in accordance with the provisions of this Title.

    • The local chief executive shall submit the said executive budget to the sanggunian concerned not later than the sixteenth (16th) of October of the current fiscal year. Failure to submit such budget on the date prescribed herein shall subject the local chief executive to such criminal and administrative penalties as provided for under this Code and other applicable laws.

  • Section 319  Legislative Authorization of the Budget.

    On or before the end of the current fiscal year, the sanggunian concerned shall, through an ordinance, the annual budget of the local government unit for the ensuing fiscal year on the basis of the estimates of income and expenditures submitted by the local chief executive.

  • Section 320  Effectivity of Budgets.

    The ordinance enacting the annual budget shall take effect at the beginning of the ensuing calendar year. An ordinance enacting a supplemental budget, however, shall take effect upon its approval or on the date fixed therein.

    • The responsibility for the execution of the annual and supplemental budgets and the accountability therefor shall be vested primarily in the local chief executive concerned.

  • Section 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.

  • Section 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 fund at the end of the fiscal year and shall not thereafter be available for the expenditure except by subsequent enactment. However, appropriations for capital outlays shall continue and remain valid until fully spent, reverted or the project is completed. Reversions of continuing appropriations shall not be allowed unless obligations therefor have been fully paid or otherwise settled.

    • The balances of continuing appropriations shall be reviewed as part of the annual budget preparation and the sanggunian concerned may approve, upon recommendation of the local chief executive, the reversion of funds no longer needed in connection with the activities funded by said continuing appropriations subject to the provisions of this section.

  • Section 323  Failure to Enact the Annual Appropriations.

    In case the sanggunian concerned fails to pass the ordinance authorizing the annual appropriations at the beginning of the ensuing fiscal year, it shall continue to hold sessions, without additional remuneration for its members, until such ordinance is approved, and no other business may be taken up during such sessions. If the sanggunian still fails to enact such ordinance after ninety (90) days from the beginning of the fiscal year, the ordinance authorizing the appropriations of the preceding year shall be deemed reenacted and shall remain in force and effect until the ordinance authorizing the proposed appropriations is passed by the sanggunian concerned. However, only the annual appropriations for salaries and wages of existing positions, statutory and contractual obligations, and essential operating expenses authorized in the annual and supplemental budgets for the preceding year shall be deemed reenacted and disbursement of funds shall be in accordance therewith.

    • In the implementation of such reenacted ordinance, the local treasurer concerned shall exclude from the estimates of income for the preceding fiscal year those realized from nonrecurring sources, like national aids, proceeds from loans, sale of assets, prior year adjustments, and other analogous sources of income. No ordinance authorizing supplemental appropriations shall be passed in place of the annual appropriations.

    • In case the revised income estimates be less than the aggregate reenacted appropriations, the local treasurer concerned shall accordingly advise the sanggunian concerned which shall, within ten (10) days from the receipt of such advice, make the necessary adjustments or reductions. The revised appropriations authorized by the sanggunian concerned shall then be the basis for disbursements.

  • Section 324  Budgetary Requirements.

    The budgets of local government units for any fiscal year shall comply with the following requirements:

    • a

      The aggregate amount appropriated shall not exceed the estimates of income;

    • b

      Full provision shall be made for all statutory and contractual obligations of the local government unit concerned: Provided, however, That the amount of appropriations for debt servicing shall not exceed twenty percent (20%) of the regular income of the local government unit concerned;

    • c

      In the case of provinces, cities, and municipalities, aid to component barangays shall be 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 unforeseen expenditures arising from the occurrence of calamities: Provided, however, That such appropriation shall be used only in the area, or a portion thereof, of the local government unit or other areas declared in a state of calamity by the President.

  • Section 325  General Limitations.

    The use of the provincial, city, and municipal funds shall be subject to the following limitations:

    • a

      The total appropriations, whether annual or supplemental, for personal services of a local government unit for one (1) fiscal year shall not exceed forty-five percent (45%) in the case of first to third class provinces, cities and municipalities, and fifty-five percent (55%) in the case of fourth class or lower, of the total annual income from regular sources realized in the next preceding fiscal year. The appropriations for salaries, wages, representation and transportation allowances of officials and employees of the public utilities and economic enterprises owned, operated, and maintained by the local government unit concerned shall not be included in the annual budget or in the computation of the maximum amount for personal services. The appropriations for the personal services of such economic enterprises shall be charged to their respective budgets;

    • b

      No official or employee shall be entitled to a salary rate higher than the maximum fixed for his position or other positions of equivalent rank by applicable laws or rules and regulations issued thereunder;

    • c

      No local fund shall be appropriated to increase or adjust salaries or wages of officials and employees of the national government, except as may be expressly authorized by law;

    • d

      In cases of abolition of positions and the creation of new ones resulting from the abolition of existing positions in the career service, such abolition or creation shall be made in accordance with pertinent provisions of this Code and the civil service law, rules and regulations;

    • e

      Positions in the official plantilla for career positions which are occupied by incumbents holding permanent appointments shall be covered by adequate appropriations;

    • f

      No changes in designation or nomenclature of positions resulting in a promotion or demotion in rank or increase or decrease in compensation shall be allowed, except when the position is actually vacant, and the filling of such positions shall be strictly made in accordance with the civil service law, rules and regulations;

    • g

      The creation of new positions and salary increases or adjustments shall in no case be made retroactive; and

    • h

      The annual appropriations for discretionary purposes of the local chief executive shall not exceed two percent (2%) of the actual receipts derived from basic real property tax in the next preceding calendar year. Discretionary funds shall be disbursed only for public purposes to be supported by appropriate vouchers and subject to such guidelines as may be prescribed by law. No amount shall be appropriated for the same purpose except as authorized under this section.

  • Section 326  Review of Appropriation Ordinances of Provinces, Highly-Urbanized Cities, Independent Component Cities, and Municipalities within the Metropolitan Manila Area.

    The Department of Budget and Management shall review ordinances authorizing the annual or supplemental appropriations of provinces, highly-urbanized cities, independent component cities, and municipalities within the Metropolitan Manila Area in accordance with the immediately succeeding section.

  • Section 327  Review of Appropriation Ordinances of Component Cities and Municipalities.

    The sangguniang panlalawigan shall review the ordinance authorizing annual or supplemental appropriations of component cities and municipalities in the same manner and within the same period prescribed for the review of other ordinances.

    • If within ninety (90) days from receipt of copies of such ordinance, the sangguniang panlalawigan takes no action thereon, the same shall be deemed to have been reviewed in accordance with law and shall continue to be in full force and effect. If within the same period, the sangguniang panlalawigan shall have ascertained that the ordinance authorizing annual or supplemental appropriations has not complied with the requirements set forth in this Title, the sangguniang panlalawigan shall, within the ninety-day period hereinabove prescribed, declare such ordinance inoperative in its entirety or in part. Items of appropriation contrary to limitations prescribed in this Title or in excess of the amounts prescribed herein shall be disallowed or reduced accordingly.

    • The sangguniang panlalawigan shall, within the same period, advise the sangguniang panlungsod or sangguniang bayan concerned, through the local chief executive, of any action on the ordinance under review. Upon receipt of such advice, the city or municipal treasurer concerned shall not make further disbursements of funds from any of the items of appropriation declared inoperative, disallowed or reduced.

  • Section 328  Duration of Appropriation.

    Appropriations for ordinary administrative purposes not duly obligated shall terminate with the fiscal year and all unexpended balances thereof shall be automatically reverted on the thirty-first (31st) day of December of each year to the general fund of the local government unit.

• Article II  Barangay Budgets
  • Section 329  Barangay Funds.

    Unless otherwise provided in this Title, all the income of the barangay from whatever source shall accrue to its general fund and shall, at the option of the barangay concerned, be kept as trust fund in the custody of the city or municipal treasurer or be deposited in a bank, preferably government-owned, situated in or nearest to its area of jurisdiction. Such funds shall be disbursed in accordance with the provisions of this Title. Ten percent (10%) of the general fund of the barangay shall be set aside for the sangguniang kabataan.

  • Section 330  Submission of Detailed Statements of Income and Expenditures for the Barangay Budgets.

    On or before the fifteenth (15th) day of September of each year, the barangay treasurer shall submit to the punong barangay a statement covering the estimates of income and expenditures for the ensuing fiscal year, based on a certified statement issued by the city or municipal treasurer covering the estimates of income from local sources for the barangay concerned.

  • Section 331  Preparation of the Barangay Budget.
    • a

      Upon receipt of the statement of income and expenditures from the barangay treasurer, the punong barangay shall prepare the barangay budget for the ensuing fiscal year in the manner and within the period prescribed in this Title and submit the annual barangay budget to the sangguniang barangay for legislative enactment.

    • b

      The total annual appropriations for personal services of a barangay for one (1) fiscal year shall not exceed fifty-five percent (55%) of the total annual income actually realized from local sources during the next preceding fiscal year.

    • c

      The barangay budget shall likewise be subject to the same budgetary requirements and limitations hereinabove prescribed.

  • Section 332  Effectivity of Barangay Budgets.

    The ordinance enacting the annual budget shall take effect at the beginning of the ensuing calendar year. An ordinance enacting a supplemental budget, however, shall take effect upon its approval or on the date fixed therein.

    • The responsibility for the execution of the annual and supplemental budgets and the accountability therefor shall be vested primarily in the punong barangay concerned.

  • Section 333  Review of the Barangay Budget.
    • a

      Within ten (10) 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.

  • Section 334  Barangay Financial Procedures.
    • a

      The barangay treasurer shall collect all taxes, fees, and other charges due and contributions accruing to the barangay for which he shall issue official receipts, and shall deposit all collections with the city or municipal treasury or in the depository account maintained in the name of the barangay within five (5) days after receipt thereof. He may collect real property taxes and such other taxes as may be imposed by a province, city or municipality that are due in his barangay only after being deputized by the local treasurer concerned for the purpose.

    • b

      The barangay treasurer may be authorized by the sangguniang barangay to make direct purchases amounting to not more than One thousand pesos (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 (COA). 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.

• Section 335  Prohibitions Against Expenditures for Religious or Private Purposes.

  No public money or property shall be appropriated or applied for religious or private purposes.

• Section 336  Use of Appropriated Funds and Savings.

  Funds shall be available exclusively for the specific purpose for which they have been appropriated. No ordinance shall be passed authorizing any transfer of appropriations from one item to another. However, the local chief executive or the presiding officer of the sanggunian concerned may, by ordinance, be authorized to augment any item in the approved annual budget for their respective offices from savings in other items within the same expense class of their respective appropriations.

• Section 337  Restriction Upon Limit of Disbursements.

  Disbursements in accordance with appropriations in the approved annual budget may be made from any local fund in the custody of the treasurer, but the total disbursements from any local fund shall in no case exceed fifty percent (50%) of the uncollected estimated revenue accruing to such local fund in addition to the actual collections: Provided, however, That no cash overdraft in any local fund shall be incurred at the end of the fiscal year.

  • In case of emergency arising from a typhoon, earthquake, or any other calamity, the sanggunian concerned may authorize the local treasurer to continue making disbursements from any local fund in his possession in excess of the limitations herein provided, but only for such purposes and amounts included in the approved annual budgets.

  • Any overdraft which may be incurred at the end of the year in any local fund by virtue of the provisions hereof shall be covered with the first collections of the immediately succeeding fiscal year accruing to such local fund.

• Section 338  Prohibitions Against Advance Payments.

  No money shall be paid on account of any contract under which no services have been rendered or goods delivered.

• Section 339  Cash Advances.

  No cash advance shall be granted to any local official or employee, elective or appointive, unless made in accordance with the rules and regulations as the COA may prescribe.

• Section 340  Persons Accountable for Local Government Funds.

  Any officer of the local government unit whose duty permits or requires the possession or custody of local government funds shall be accountable and responsible for the safekeeping thereof in conformity with the provisions of this Title. Other local officers who, though not accountable by the nature of their duties, may likewise be similarly held accountable and responsible for local government funds through their participation in the use or application thereof.

• Section 341  Prohibitions Against Pecuniary Interest.

  Without prejudice to criminal prosecution under applicable laws, any local treasurer, accountant, budget officer, or other accountable local officer having any pecuniary interest, direct or indirect, in any contract, work or other business of the local government unit of which he is an accountable officer shall be administratively liable therefor.

• Section 342  Liability for Acts Done Upon Direction of Superior Officer, or Upon Participation of Other Department Heads or Officers of Equivalent Rank.

  Unless he registers his objection in writing, the local treasurer, accountant, budget officer, or other accountable officer shall not be relieved of liability for illegal or improper use or application or deposit of government funds or property by reason of his having acted upon the direction of a superior officer, elective or appointive, or upon participation of other department heads or officers of equivalent rank. The superior officer directing, or the department head participating in such illegal or improper use or application or deposit of government funds or property, shall be jointly and severally liable with the local treasurer, accountant, budget officer, or other accountable officer for the sum or property so illegally or improperly used, applied or deposited.

• Section 343  Prohibition Against Expenses for Reception and Entertainment.

  No money shall be appropriated, used, or paid for entertainment or reception except to the extent of the representation allowances authorized by law or for the reception of visiting dignitaries of foreign governments or foreign missions, or when expressly authorized by the President in specific cases.

• Section 344  Certification on, and Approval of, Vouchers.

  No money shall be disbursed unless the local budget officer certifies to the existence of appropriation that has been legally made for the purpose, the local accountant has obligated said appropriation, and the local treasurer certifies to the availability of funds for the purpose. Vouchers and payrolls shall be certified to and approved by the head of the department or office who has administrative control of the fund concerned, as to validity, propriety, and legality of the claim involved. Except in cases of disbursements involving regularly recurring administrative expenses such as payrolls for regular or permanent employees, expenses for light, water, telephone and telegraph services, remittances to government creditor agencies such as 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 he shall be fully responsible therefor.

• Section 345  Officials Authorized to Draw Checks in Settlement of Obligations.

  Checks in settlement of obligations shall be drawn by the local treasurer and countersigned by the local administrator.

  • In case of temporary absence or incapacity of the foregoing officials, these duties shall devolve upon their immediate assistants.

• Section 346  Disbursements of Local Funds and Statement of Accounts.

  Disbursements shall be made in accordance with the ordinance authorizing the annual or supplemental appropriations without the prior approval of the sanggunian concerned. Within thirty (30) days after the close of each month, the local accountant shall furnish the sanggunian with such financial statements as may be prescribed by the 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.

• Section 347  Rendition of Accounts.

  Local treasurers, accountants and other local accountable officers shall render their accounts within such time, in such form, style, and content and under such 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.

• Section 348  Auditorial Visitation.

  The books, accounts, papers, and cash of local treasurer, accountant, budget officer, or other accountable officers shall at all times be open for inspection of the 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.

• Section 349  Accounting for Revenues.

  Estimated revenues which remain unrealized at the close of the fiscal year shall not be booked or credited to the unappropriated surplus or any other account.

• Section 350  Accounting for Obligations.

  All lawful expenditures and obligations incurred during a fiscal year shall be taken up in the accounts of that year.

• Section 351  General Liability for Unlawful Expenditures.

  Expenditures of funds or use of property in violation of this Title and other laws shall be a personal liability of the official or employee responsible therefor.

• Section 352  Posting of the Summary of Income and Expenditures.

  Local treasurers, accountants, budget officers, and other accountable officers shall, within thirty (30) days from the end of each fiscal year, post in at least three (3) publicly accessible and conspicuous places in the local government unit a summary of all revenues collected and funds received including the appropriations and disbursements of such funds during the preceding fiscal year.

• Section 353  The Official Fiscal Year.

  The official fiscal year of local government units shall be the period beginning with the first (1st) day of January and ending with the thirty-first (31st) day of December of the same year.

• Section 354  Administrative Issuances; Budget Operations Manual.

  The Secretary of Budget and Management jointly with the Chairman of the 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.

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.

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.

When used in this Title, the term:

• a

  "Lowest Complying and Responsible Bid" refers to the proposal of one who offers the lowest price, meets all the technical specifications and requirements of the supplies desired and, as a dealer in the line of supplies involved, maintains a regular establishment, and has complied consistently with previous commitments;

• b

  "Suitable Substitute" refers to that kind of article which would serve substantially the same purpose or produce substantially the same results as the brand, type, or make of article originally desired or requisitioned;

• c

  "Supplies" includes everything, except real property, which may be needed in the transaction of public business or in the pursuit of any undertaking, project, or activity, whether in the nature of equipment, furniture, stationary materials for construction or personal property of any sort, including non-personal or contractual services such as the repair and maintenance of equipment and furniture, as well as trucking, hauling, janitorial, security, and related services; and

• d

  "Terms and Conditions" refer to other requirements not affecting the technical specifications and requirements of the required supplies desired such as bonding, terms of delivery and payment, and related preferences.

Any order for supplies shall be filled by the provincial or city general services officer or the municipal or barangay treasurer concerned, as the case may be, for any office or department of a local government unit only upon written requisition as hereinafter provided.

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.

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.

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.

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.

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.

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.

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.

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.

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

    &nsbp; | &nsbp;

    -- | --

    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

    &nsbp; | &nsbp;

    -- | --

    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)

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.

• 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.

• a

  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.

Procurement may be made directly from duly licensed manufacturers in cases of supplies of Philippine manufacture or origin and in case there are two (2) or more manufacturers of the required supplies, canvass of the known manufacturers shall be conducted to obtain the lowest price for the quality of the said supplies.

Procurement may, in the case of supplies of foreign origin, preferably be made directly from the exclusive or reputable Philippine distributors or agents, subject to the following conditions:

• a

  That the Philippine distributor has no subdealers selling at lower prices; and

• b

  That no suitable substitutes of substantially the same quality are available at lower prices.

Procurement may be made directly from the 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.

• 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.

• d

  A violation of this section shall be a ground for suspension or dismissal of any official or employee responsible therefor.

Every local government unit shall provide for the establishment of an archival system to ensure the safety and protection of all government property, public documents or records such as records of births, marriages, property inventory, land assessments, land ownership, tax payments, tax accounts, and business permits, and such other records or documents of public interest in the various departments and offices of the provincial, city, or municipal government concerned.

• 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.

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.

• a

  The person immediately accountable for government property shall be liable for its money value in case of the illegal, improper or unauthorized use or misapplication thereof, by himself or any other person for whose acts he may be responsible, and he shall be liable for all loss, damage, or deterioration occasioned by negligence in the keeping or use of such property unless it is proved that he has exercised due diligence and care in the utilization and safekeeping thereof.

• b

  Unless he registers his objection in writing, an accountable person shall not be relieved from liability by reason of his having acted under the direction of a superior officer in using property with which he is chargeable; but the officer directing any illegal, unauthorized or improper use of property shall first be required to answer therefor.

• c

  In cases of loss, damage, or deterioration of government property arising from, or attributable to, negligence in security, the head of the security agency shall be held liable therefor.

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 Commission on Audit, to be 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 Commission on Audit for his appropriate action.

When property of any local government unit has become unserviceable for any cause or is no longer needed, it shall, upon application of the officer accountable therefor, be inspected and appraised by the provincial, city or municipal auditor, as the case may be, or his duly authorized representative or that of the Commission on Audit and, if found valueless or unusable, shall be destroyed in the presence of the inspecting officer.

• If found valuable, the same shall be sold at public auction to the highest bidder under the supervision of the Committee on Awards and in the presence of the provincial, city or municipal auditor or his duly authorized representative. Notice of the public auction shall be posted in at least three (3) publicly accessible and conspicuous places, and if the acquisition cost exceeds One hundred thousand pesos (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.

Property no longer needed may also be disposed of at a private sale at such price as may be determined by the Committee on Awards, subject to the approval of the Commission on Audit or its duly authorized representative when the acquisition or transfer cost of the property exceeds Fifty thousand pesos (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 Commission on Audit regardless of the value or cost involved.

Property which has become unserviceable or is no longer needed may be transferred without cost to another office, agency, subdivision or instrumentality of the national government or another local government unit at an appraised valuation determined by the local Committee on Awards. Such transfer shall be 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.

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.

The Chairman of the Commission on Audit shall promulgate the rules and regulations necessary to effectively implement the provisions of this Title, including requirements as to testing, inspection, and standardization of supply and property.

• Section 384  Role of the Barangay.

  As the basic political unit, the barangay serves as the primary planning and implementing unit of government policies, plans, programs, projects, and activities in the community, and as a forum wherein the collective views of the people may be expressed, crystallized and considered, and where disputes may be amicably settled.

• Section 385  Manner of Creation.

  A barangay may be created, divided, merged, abolished, or its boundary 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.

• Section 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.

• Section 387  Chief Officials and Offices.
  • a

    There shall be in each barangay a punong barangay, seven (7) sangguniang barangay members, the sangguniang kabataan chairman, a barangay secretary, and a barangay treasurer.

  • b

    There shall also be in every barangay a lupong tagapamayapa. The sangguniang barangay may form community brigades and create such other positions or offices as may be deemed necessary to carry out the purposes of the barangay government in accordance with the needs of public service, subject to the budgetary limitations on personal services prescribed under Title Five, Book II of this Code.

• Section 388  Persons in Authority.

  For purposes of the Revised Penal Code, the punong barangay, sangguniang barangay members, and members of the lupong tagapamayapa in each barangay shall be deemed as persons in authority in their jurisdictions, while other barangay officials and members who may be designated by law or ordinance and charged with the maintenance of public order, protection and security of life and property, or the maintenance of a desirable and balanced environment, and any barangay member who comes to the aid of persons in authority, shall be deemed agents of persons in authority.

• Section 389  Chief Executive: Powers, Duties, and Functions.
  • a

    The punong barangay, as the chief executive of the barangay government, shall exercise such powers and perform such duties and functions, as provided by this Code and other laws.

  • 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.

  • 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.

• Section 390  Composition.

  The sangguniang barangay, the legislative body of the barangay, shall be composed of the punong barangay as presiding officer, and the seven (7) regular sangguniang barangay members elected at large and sangguniang kabataan chairman, as members.

• Section 391  Powers, Duties, and Functions.
  • a

    The sangguniang barangay, as the legislative body of the barangay, shall:

    • 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 fund of the barangay: Provided, That in the appropriation thereof, the specific purpose for which such fund-raising activity has been held shall be first satisfied: Provided, further, That no fund-raising activities shall be held within a period of sixty (60) days immediately preceding and after a national or local election, recall, referendum, or plebiscite: Provided, finally, That said fund-raising activities shall comply with national policy standards and regulations on morals, health, and safety of the persons participating therein. The sangguniang barangay, through the punong barangay, shall render a public accounting of the funds raised at the completion of the project for which the fund-raising activity was undertaken;

    • 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.

• Section 392  Other Duties of Sangguniang Barangay Members.

  In addition to their duties as members of the sangguniang barangay, sangguniang barangay members may:

  • a

    Assist the punong barangay in the discharge of his duties and functions;

  • b

    Act as peace officers in the maintenance of public order and safety; and

  • c

    Perform such other duties and functions as the punong barangay may delegate.

• Section 393  Benefits of Barangay Officials.
  • a

    Barangay officials, including barangay tanods and members of the lupong tagapamayapa, shall receive honoraria, allowances, and such other emoluments as may be authorized by law or barangay, municipal or city ordinance in accordance with the provisions of this Code, but in no case shall it be less than One thousand pesos (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.

• Section 394  Barangay Secretary: Appointment, Qualifications, Powers and Duties.
  • a

    The barangay secretary shall be appointed by the punong barangay with the concurrence of the majority of all the sangguniang barangay members. The appointment of the barangay secretary shall not be subject to attestation by the Civil Service Commission.

  • b

    The barangay secretary shall be of legal age, a qualified voter and an actual resident of the barangay concerned.

  • c

    No person shall be appointed barangay secretary if he is a sangguniang barangay member, a government employee, or a relative of the punong barangay within the fourth civil degree of consanguinity 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 ordinance;

    • 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.

• Section 395  Barangay Treasurer: Appointment, Qualifications, Powers and Duties.
  • a

    The barangay treasurer shall be appointed by the punong barangay with the concurrence of the majority of all the sangguniang barangay members. The appointment of the barangay treasurer shall not be subject to attestation by the Civil Service Commission.

  • b

    The barangay treasurer shall be of legal age, a qualified voter, and an actual resident of the barangay concerned.

  • c

    No person shall be appointed barangay treasurer if he is a sangguniang barangay member, a government employee, or a relative of the punong barangay within the fourth civil degree of consanguinity or affinity.

  • d

    The barangay treasurer shall be bonded in accordance with existing laws in an amount to be determined by the sangguniang barangay but not exceeding Ten thousand pesos (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 law or ordinance.

• Section 396  Other Appointive Officials.

  The qualifications, duties, and functions of all other barangay officials appointed by the punong barangay shall be governed by the provisions of this Code and other laws or by barangay ordinances.

• Section 397  Composition; Meetings.
  • a

    There shall be a barangay assembly composed of all persons who are actual residents of the barangay for at least six (6) months, fifteen (15) years of age or over, citizens of the Philippines, and duly registered in the list of barangay assembly members.

  • b

    The barangay assembly shall meet at least twice a year to hear and discuss the semestral report of the sangguniang barangay concerning its activities and finances as well as problems affecting the barangay. Its meetings shall be held upon call of the punong barangay or of at least four (4) members of the sangguniang barangay, or upon written petition of at least five percent (5%) of the assembly members.

  • c

    No meeting of the barangay assembly shall take place unless a written notice is given one (1) week prior to the meeting except on matters involving public safety or security, in which case notice within a reasonable time shall be sufficient. The punong barangay, or in his absence, the sangguniang barangay member acting as punong barangay, or any assembly member selected during the meeting, shall act as presiding officer in all the meetings of the assembly. The barangay secretary, or in his absence, any member designated by the presiding officer to act as secretary, shall discharge the duties of secretary of the barangay assembly.

• Section 398  Powers of the Barangay Assembly.

  The barangay assembly shall:

  • a

    Initiate legislative processes by recommending to the sangguniang barangay the adoption of measures for the welfare of the barangay and the city or municipality concerned;

  • b

    Decide on the adoption of initiative as a legal process whereby the registered voters of the barangay may directly propose, enact, or amend any ordinance; and

  • c

    Hear and pass upon the semestral report of the sangguniang barangay concerning its activities and finances.

• Section 399  Lupong Tagapamayapa.
  • a

    There is hereby created in each barangay a lupong tagapamayapa, hereinafter referred to as the lupon, composed of the punong barangay, as chairman and ten (10) to twenty (20) members. The lupon shall be constituted every three (3) years in the manner provided herein.

  • 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 appointment 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.

• Section 400  Oath and Term of Office.

  Upon appointment, each lupon member shall take an oath of office before the punong barangay. He shall hold office until a new lupon is constituted on the third year following his appointment unless sooner terminated by resignation, transfer of residence or place of work, or withdrawal of appointment by the punong barangay with the concurrence of the majority of all the members of the lupon.

• Section 401  Vacancies.

  Should a vacancy occur in the lupon for any cause, the punong barangay shall immediately appoint a qualified person who shall hold office only for the unexpired portion of the term.

• Section 402  Functions of the Lupon.

  The lupon shall:

  • a

    Exercise administrative supervision over the conciliation panels provided herein;

  • b

    Meet regularly once a month to provide a forum for exchange of ideas among its members and the public on matters relevant to the amicable settlement of disputes, and to enable various conciliation panel members to share with one another their observations and experiences in effecting speedy resolution of disputes; and

  • c

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

• Section 403  Secretary of the Lupon.

  The barangay secretary shall concurrently serve as the secretary of the lupon. He shall record the results of mediation proceedings before the punong barangay and shall submit a report thereon to the proper city or municipal courts. He shall also receive and keep the records of proceedings submitted to him by the various conciliation panels.

• Section 404  Pangkat ng Tagapagkasundo.
  • a

    There shall be constituted for each dispute brought before the lupon a conciliation panel to be known as the pangkat ng tagapagkasundo, hereinafter referred to as the pangkat, consisting of three (3) members who shall be chosen by the parties to the dispute from the list of members of the lupon.

    • Should the parties fail to agree on the pangkat membership, the same shall be determined by lots drawn by the lupon chairman.

  • b

    The three (3) members constituting the pangkat shall elect from among themselves the chairman and the secretary. The secretary shall prepare the minutes of the pangkat proceedings and submit a copy duly attested to by the chairman to the lupon secretary and to the proper city or municipal court. He shall issue and cause to be served notices to the parties concerned.

    • The lupon secretary shall issue certified true copies of any public record in his custody that is not by law otherwise declared confidential.

• Section 405  Vacancies in the Pangkat.

  Any vacancy in the pangkat shall be chosen by the parties to the dispute from among the other lupon members. Should the parties fail to agree on a common choice, the vacancy shall be filled by lot to be drawn by the lupon chairman.

• Section 406  Character of Office and Service of Lupon Members.
  • a

    The lupon members, while in the performance of their official duties or on the occasion thereof, shall be deemed as persons in authority, as defined in the Revised Penal Code.

  • b

    The lupon or pangkat members shall serve without compensation, except as provided for in Section 393 and without prejudice to incentives as provided for in this section and in Book IV of this Code. The Department of the Interior and Local Government shall provide for a system of granting economic or other incentives to the lupon or pangkat members who adequately demonstrate the ability to judiciously and expeditiously resolve cases referred to them. While in the performance of their duties, the lupon or pangkat members, whether in public or private employment, shall be deemed to be on official time, and shall not suffer from any diminution in compensation or allowance from said employment by reason thereof.

• Section 407  Legal Advice on Matters Involving Questions of Law.

  The provincial, city legal officer or prosecutor or the municipal legal officer shall render legal advice on matters involving questions of law to the punong barangay or any lupon or pangkat member whenever necessary in the exercise of his functions in the administration of the katarungang pambarangay.

• Section 408  Subject Matter for Amicable Settlement; Exception Thereto.

  The lupon of each barangay shall have authority to bring together the parties actually residing in the same city or municipality for amicable settlement of all disputes except:

  • 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, motu proprio refer the case to the lupon concerned for amicable settlement.

• Section 409  Venue.
  • a

    Disputes between persons actually residing in the same barangay shall be brought for amicable settlement before the lupon of said barangay.

  • b

    Those involving actual residents of different barangays within the same city or municipality shall be brought in the barangay where the respondent or any of the respondents actually resides, at the election of the complainant.

  • c

    All disputes involving real property or any interest therein shall be brought in the barangay where the real property or the larger portion thereof is situated.

  • d

    Those arising at the workplace where the contending parties are employed or at the institution where such parties are enrolled for study, shall be brought in the barangay where such workplace or institution is located.

  • Objections to venue shall be raised in the mediation proceedings before the punong barangay; otherwise, the same shall be deemed waived. Any legal question which may confront the punong barangay in resolving objections to venue herein referred to may be submitted to the Secretary of Justice or his duly designated representative, whose ruling thereon shall be binding.

• Section 410  Procedure for Amicable Settlement.
  • a  Who may initiate proceeding.

    Upon payment of the appropriate filing fee, any individual who has a cause of action against another individual involving any matter within the authority of the lupon may complain, orally or in writing, to the lupon chairman of the barangay.

  • b  Mediation by lupon chairman.

    Upon receipt of the complaint, the lupon chairman shall, within the next working day, summon the respondent(s), with notice to the complainant(s) for them and their witnesses to appear before him for a mediation of their conflicting interests. If he fails in his mediation effort within fifteen (15) days from the first meeting of the parties before him, he shall forthwith set a date for the constitution of the pangkat in accordance with the provisions of this Chapter.

  • c  Suspension of prescriptive period of offenses.

    While the dispute is under mediation, conciliation, or arbitration, the prescriptive periods for offenses and cause of action under existing laws shall be interrupted upon filing of the complaint with the punong barangay. The prescriptive periods shall resume upon receipt by the complainant of the complaint or the certificate of repudiation or of the certification to file action issued by the lupon or pangkat secretary: Provided, however, That such interruption shall not exceed sixty (60) days from the filing of the complaint with the punong barangay.

  • d  Issuance of summons; hearing; grounds for disqualification.

    The pangkat shall convene not later than three (3) days from its constitution, on the day and hour set by the lupon chairman, to hear both parties and their witnesses, simplify issues, and explore all possibilities for amicable settlement. For this purpose, the pangkat may issue summons for the personal appearance of parties and witnesses before it. In the event that a party moves to disqualify any member of the pangkat by reason of relationship, bias, interest, or any other similar grounds discovered after the constitution of the pangkat, the matter shall be resolved by the affirmative vote of the majority of the pangkat whose decision shall be final. Should disqualification be decided upon, the resulting vacancy shall be filled as herein provided for.

  • e  Period to arrive at a settlement

    The pangkat shall arrive at a settlement or resolution of the dispute within fifteen (15) days from the day it convenes in accordance with this section. This period shall, at the discretion of the pangkat, be extendible for another period which shall not exceed fifteen (15) days, except in clearly meritorious cases.

• Section 411  Form of settlement.

  All amicable settlements shall be in writing, in a language or dialect known to the parties, signed by them, and attested to by the lupon chairman or the pangkat chairman, as the case may be. When the parties to the dispute do not use the same language or dialect, the settlement shall be written in the language known to them.

• Section 412  Conciliation.
  • a  Pre-condition to Filing of Complaint in Court.

    No complaint, petition, action, or proceeding involving any matter within the authority of the lupon shall be filed or instituted directly in court or any other government office for adjudication, unless there has been a confrontation between the parties before the lupon chairman or the pangkat, and that no conciliation or settlement has been reached as certified by the lupon secretary or pangkat secretary as attested to by the lupon or pangkat chairman or unless the settlement has been repudiated by the parties thereto.

  • b  Where Parties May Go Directly to Court.

    The parties may go directly to court in the following instances:

    • 1

      Where the accused is under detention;

    • 2

      Where a person has otherwise been deprived of personal liberty calling for habeas corpus proceedings;

    • 3

      Where actions are coupled with provisional remedies such as preliminary injunction, attachment, delivery of personal property and support pendente lite; and

    • 4

      Where the action may otherwise be barred by the statute of limitations.

  • c  Conciliation Among Members of Indigenous Cultural Communities.

    The customs and traditions of indigenous cultural communities shall be applied in settling disputes between members of the cultural communities.

• Section 413  Arbitration.
  • a

    The parties may, at any stage of the proceedings, agree in writing that they shall abide by the arbitration award of the lupon chairman or the pangkat. Such agreement to arbitrate may be repudiated within five (5) days from the date thereof for the same grounds and in accordance with the procedure hereinafter prescribed. The arbitration award shall be made after the lapse of the period for repudiation and within ten (10) days thereafter.

  • b

    The arbitration award shall be in writing in a language or dialect known to the parties. When the parties to the dispute do not use the same language or dialect, the award shall be written in the language or dialect known to them.

• Section 414  Proceedings Open to the Public; Exception.

  All proceedings for settlement shall be public and informal: Provided, however, That the lupon chairman or the pangkat chairman, as the case may be, may motu proprio or upon request of a party, exclude the public from the proceedings in the interest of privacy, decency, or public morals.

• Section 415  Appearance of Parties in Person.

  In all katarungang pambarangay proceedings, the parties must appear in person without the assistance of counsel or representative, except for minors and incompetents who may be assisted by their next-of-kin who are not lawyers.

• Section 416  Effect of Amicable Settlement and Arbitration Award.

  The amicable settlement and arbitration award shall have the force and effect of a final judgment of a court upon the expiration of ten (10) days from the date thereof, unless repudiation of the settlement has been made or a petition to nullify the award has been filed before the proper city or municipal court.

  • However, this provision shall not apply to court cases settled by the lupon under the last paragraph of Section 408 of this Code, in which case the compromise settlement agreed upon by the parties before the lupon chairman or the pangkat chairman shall be submitted to the court and upon approval thereof, have the force and effect of a judgment of said court.

• Section 417  Execution.

  The amicable settlement or arbitration award may be enforced by execution by the lupon within six (6) months from the date of the settlement. After the lapse of such time, the settlement may be enforced by action in the appropriate city or municipal court.

• Section 418  Repudiation.

  Any party to the dispute may, within ten (10) days from the date of the settlement, repudiate the same by filing with the lupon chairman a statement to that effect sworn to before him, where the consent is vitiated by fraud, violence, or intimidation. Such repudiation shall be sufficient basis for the issuance of the certification for filing a complaint as hereinabove provided.

• Section 419  Transmittal of Settlement and Arbitration Award to the Court.

  The secretary of the lupon shall transmit the settlement or the arbitration award to the appropriate city or municipal court within five (5) days from the date of the award or from the lapse of the ten-day period repudiating the settlement and shall furnish copies thereof to each of the parties to the settlement and the lupon chairman.

• Section 420  Power to Administer Oaths.

  The punong barangay, as chairman of the lupong tagapamayapa, and the members of the pangkat are hereby authorized to administer oaths in connection with any matter relating to all proceedings in the implementation of the katarungang pambarangay.

• Section 421  Administration; Rules and Regulations.

  The city or municipal mayor, as the case may be, shall see to the efficient and effective implementation and administration of the katarungang pambarangay. The Secretary of Justice shall promulgate the rules and regulations necessary to implement this Chapter.

• Section 422  Appropriations.

  Such amount as may be necessary for the effective implementation of the katarungang pambarangay shall be provided for in the annual budget of the city or municipality concerned.

• Section 423  Creation and Election.
  • a

    There shall be in every barangay a sangguniang kabataan to be composed of a chairman, seven (7) members, a secretary, and a treasurer.

  • b

    A sangguniang kabataan official who, during his term of office, shall have passed the age of twenty-one (21) years shall be allowed to serve the remaining portion of the term for which he was elected.

• Section 424  Katipunan ng Kabataan.

  The katipunan ng kabataan shall be composed of all citizens of the Philippines actually residing in the barangay for at least six (6) months, who are fifteen (15) but not more than twenty-one (21) years of age, and who are duly registered in the list of the sangguniang kabataan or in the official barangay list in the custody of the barangay secretary.

• Section 425  Meetings of the Katipunan ng Kabataan.

  The katipunan ng kabataan shall meet at least once every three (3) months, or at the call of the chairman of the sangguniang kabataan or upon written petition of at least one-twentieth (1/20) of its members, to decide on important issues affecting the youth of the barangay.

• Section 426  Powers and Functions of the Sangguniang Kabataan.

  The sangguniang kabataan shall:

  • a

    Promulgate resolutions necessary to carry out the objectives of the youth in the barangay in accordance with the applicable provisions of this Code;

  • b

    Initiate programs designed to enhance the social, political, economic, cultural, intellectual, moral, spiritual, and physical development of the members;

  • c

    Hold fund-raising activities, the proceeds of which shall be tax-exempt and shall accrue to the general fund of the sangguniang kabataan: Provided, however, That in the appropriation thereof, the specific purpose for which such activity has been held shall be first satisfied;

  • d

    Create such bodies or committees as it may deem necessary to effectively carry out its programs and activities;

  • e

    Submit annual and end-of-term reports to the sangguniang barangay on their projects and activities for the survival and development of the youth in the barangay;

  • f

    Consult and coordinate with all youth organizations in the barangay for policy formulation and program implementation;

  • g

    Coordinate with the appropriate national agency for the implementation of youth development projects and programs at the national level;

  • h

    Exercise such other powers and perform such other duties and functions as the sangguniang barangay may determine or delegate or as may be prescribed by law or ordinance.

• Section 427  Meetings of the Sangguniang Kabataan.

  The sangguniang kabataan shall meet regularly once a month on the date, time, and place to be fixed by the said sanggunian. Special meetings may be called by the sangguniang kabataan chairman or any three (3) of its members by giving written notice to all members of the date, time, place and agenda of the meeting at least one (1) day in advance. Notices of regular or special meetings shall be furnished the punong barangay and the sangguniang barangay.

  • A majority of the members of the sangguniang kabataan shall constitute a quorum.

• Section 428  Qualifications.

  An elective official of the sangguniang kabataan must be a citizen of the Philippines, a qualified voter of the katipunan ng kabataan, a resident of the barangay for at least one (1) year immediately prior to election, at least fifteen (15) years but not more than twenty-one (21) years of age on the day of his election, able to read and write Filipino, English, or the local dialect, and must not have been convicted of any crime involving moral turpitude.

• Section 429  Term of Office.

  The sangguniang kabataan chairman and members shall hold office for a period of three (3) years, unless sooner removed for cause as provided by law, permanently incapacitated, die or resign from office.

• Section 430  Sangguniang Kabataan Chairman.

  The registered voters of the katipunan ng kabataan shall elect the chairman of the sangguniang kabataan who shall automatically serve as an ex officio member of the sangguniang barangay upon his assumption to office. As such, he shall exercise the same powers, discharge the same duties and functions, and enjoy the same privileges as the regular sangguniang barangay members, and shall be the chairman of the committee on youth and sports development in the said sanggunian.

• Section 431  Powers and Duties of the Sangguniang Kabataan Chairman.

  In addition to the duties which may be assigned to him by the sangguniang barangay, the sangguniang kabataan chairman shall:

  • a

    Call and preside over all meetings of the katipunan ng kabataan and the sangguniang kabataan;

  • b

    Implement policies, programs, and projects within his jurisdiction in coordination with the sangguniang barangay;

  • c

    Exercise general supervision over the affairs and activities of the sangguniang kabataan and the official conduct of its members, and such other officers of the sangguniang kabataan within his jurisdiction;

  • 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.

• Section 432  Sangguniang Kabataan Secretary.

  The sangguniang kabataan secretary shall:

  • a

    Keep all records of the katipunan ng kabataan and sangguniang kabataan;

  • b

    Prepare and keep the minutes of all meetings of the katipunan ng kabataan and sangguniang kabataan;

  • c

    Prepare all forms necessary for the conduct of registrations, elections, initiatives, referenda, or plebiscites, in coordination with the barangay secretary and the COMELEC; and

  • d

    Perform such other duties and discharge such other functions as the chairman of the sangguniang kabataan may prescribe or direct.

• Section 433  Sangguniang Kabataan Treasurer.

  The sangguniang kabataan treasurer shall:

  • a

    Take custody of all sangguniang kabataan property and funds not otherwise deposited with the city or municipal treasurer;

  • b

    Collect and receive contributions, monies, materials, and all other resources intended for the sangguniang kabataan and 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.

• Section 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 a state college or university within or nearest their area of jurisdiction.

• Section 435  Succession and Filling of Vacancies.
  • a

    In case a sangguniang kabataan chairman refuses to assume office, fails to qualify, is convicted of a felony, voluntarily resigns, dies, is permanently incapacitated, is removed from office, or has been absent without leave for more than three (3) consecutive months, the sangguniang kabataan member who obtained the next highest number of votes in the election immediately preceding shall assume the office of the chairman for the unexpired portion of the term, and shall discharge the powers and duties, and enjoy the rights and privileges appurtenant to the office. In case the said member refuses to assume the position or fails to qualify, the sangguniang kabataan 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.

• Section 436  Pederasyon ng mga Sangguniang Kabataan.
  • a

    There shall be an organization of all the pederasyon ng mga sangguniang kabataan to be known as follows:

    • 1

      In municipalities, pambayang pederasyon ng mga 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.

• Section 437  Constitution and By-Laws.

  The term of office, manner of election, removal and suspension of the officers of the pederasyon ng mga sangguniang kabataan at all levels shall be governed by the constitution and by-laws of the pederasyon in conformity with the provisions of this Code and national policies on youth.

• Section 438  Membership in the Sanggunian.
  • a

    A sangguniang kabataan chairman shall, upon certification of his election by the COMELEC and during his tenure of office is elected as pederasyon president, serve as an ex officio member of the 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.

• Section 439  Observance of Linggo ng Kabataan.
  • a

    Every barangay, municipality, city and province shall, in coordination with the pederasyon ng mga sangguniang kabataan at all levels, conduct an annual activity to be known as the Linggo ng Kabataan on such date as shall be determined by the Office of the President.

  • b

    The observance of the Linggo ng Kabataan shall include the election of the counterparts of all local elective and appointive officials, as well as heads of national offices or agencies stationed or assigned in the territorial jurisdiction of the local government unit, among in-school and community youth residing in the local government unit concerned from ages thirteen (13) to seventeen (17). During said week, they shall hold office as boy and girl officials and shall perform such duties and conduct such activities as may be provided in the ordinance enacted pursuant to this Chapter.

• Section 440  Role of the Municipality.

  The municipality, consisting of a group of barangays, serves primarily as a general purpose government for the coordination and delivery of basic, regular and direct services and effective governance of the inhabitants within its territorial jurisdiction.

• Section 441  Manner of Creation.

  A municipality may be created, divided, merged, abolished, or its boundary substantially altered only by an Act of Congress and subject to the approval by a majority of the votes cast in a plebiscite to be conducted by the COMELEC in the local government unit or units directly affected. Except as may otherwise be provided in the said Act, the plebiscite shall be held within one hundred twenty (120) days from the date of its effectivity.

• Section 442  Requisites for Creation.
  • a

    A municipality may be created if it has an average annual income, as certified by the provincial treasurer, of at least Two million five hundred thousand pesos (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 non-recurring income.

  • d

    Municipalities existing as of the date of the effectivity of this Code shall continue to exist and operate as such. Existing municipal districts organized pursuant to presidential issuances or executive orders and which have their respective set of elective municipal officials holding office at the time of the effectivity of this Code shall henceforth be considered as regular municipalities.

• Section 443  Officials of the Municipal Government.
  • a

    There shall be in each municipality a municipal mayor, a municipal vice-mayor, sangguniang bayan members, a secretary to the sangguniang bayan, a municipal treasurer, a municipal assessor, a municipal accountant, a municipal budget officer, a municipal planning and development coordinator, a municipal engineer/building official, a municipal health officer and a municipal civil registrar.

  • b

    In addition thereto, the mayor may appoint a municipal administrator, a municipal legal officer, a municipal agriculturist, a municipal environment and natural resources officer, a municipal social welfare and development officer, a municipal architect, and a municipal information officer.

  • c

    The sangguniang bayan may:

    • a

      Maintain existing offices not mentioned in subsections (a) and (b) hereof;

    • b

      Create such other offices as may be necessary to carry out the purposes of the municipal government; or

    • c

      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.

• Article I  The Municipal Mayor
  • Section 444  The Chief Executive: Powers, Duties, Functions and Compensation.
    • a

      The municipal mayor, as the chief executive of the municipal government, shall exercise such powers and performs 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 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 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 advise him on matters affecting the municipality and to make recommendations thereon, or to coordinate in the formulation and implementation of plans, programs and projects, and when appropriate, initiate an administrative or judicial action against a national government official or employee who may have committed an offense in the performance of his official duties while stationed in or assigned to the local 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

        • x

          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 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 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 year 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 II  The Vice Mayor
  • Section 445  Powers, Duties and Compensation.
    • a

      The vice-mayor shall:

      • 1

        Be the presiding officer of the sangguniang bayan and sign all warrants drawn on the municipal treasury for all expenditures appropriated for the operation of the sangguniang bayan;

      • 2

        Subject to civil service law, rules and regulations, appoint all officials and employees of the sangguniang bayan, except those whose manner of appointment is specifically provided in this Code;

      • 3

        Assume the office of the municipal mayor for the unexpired term of the latter in the event of permanent vacancy as provided for in Section 44, Book I of this Code;

      • 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 III  The Sangguniang Bayan
  • Section 446  Composition.
    • a

      The sangguniang bayan, the legislative body of the municipality, shall be composed of the municipal vice mayor as the presiding officer, the regular sanggunian members, the president of the municipal chapter of the liga ng mga barangay, the president of the pambayang pederasyon ng mga sangguniang kabataan, and the sectoral representatives, as members.

    • b

      In addition thereto, there shall be three (3) sectoral representatives: one (1) from the women; and as shall be determined by the sanggunian concerned within ninety (90) days prior to the holding of local elections, one (1) from the agricultural or industrial workers, and one (1) from other sectors, including the urban poor, indigenous cultural communities, or disabled persons.

    • c

      The regular members of the sangguniang bayan and the sectoral representatives shall be elected in the manner as may be provided for by law.

  • Section 447  Powers, Duties, Functions and Compensation.
    • a

      The sangguniang bayan, as the legislative body of the municipality, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the municipality and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the municipality as provided for under Section 22 of this Code, and shall:

      • 1

        Approve ordinances and pass resolutions necessary for an efficient and effective municipal government, and in this connection shall:

        • i

          Review all ordinances approved by the sangguniang barangay and executive orders issued by the punong 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 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 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:

        • a

          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;

        • b

          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;

        • c

          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;

        • d

          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;

        • e

          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;

        • f

          Prescribe reasonable limits and restraints on the use of property within the jurisdiction of the municipality:

        • g

          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;

        • h

          Reclassify land within the jurisdiction of the municipality, subject to the pertinent provisions of this Code;

        • i

          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;

        • j

          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;

        • k

          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;

        • l

          With the concurrence of at least two-thirds (2/3) of all the members of the sangguniang bayan, grant tax exemptions, incentives or reliefs to entities engaged in community growth-inducing industries, subject to the provisions of Chapter 5, Title I, Book II of this Code.

        • m

          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;

        • n

          Regulate the numbering of residential, commercial and other buildings; and

        • o

          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:

        • a

          Fix and impose reasonable fees and charges for all services rendered by the municipal government to private persons or entities;

        • b

          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;

        • c

          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;

        • d

          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;

        • e

          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;

        • f

          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;

        • g

          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:

        • a

          Declare, prevent or abate any nuisance;

        • b

          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;

        • c

          Regulate the disposal of clinical and other wastes from hospitals, clinics and other similar establishments;

        • d

          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;

        • e

          Regulate the sale, giving away or dispensing of any intoxicating malt, vino, mixed or fermented liquors at any retail outlet;

        • f

          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;

        • g

          Regulate the establishment, operation, and maintenance of entertainment or amusement facilities, including theatrical performances, circuses, billiards 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;

        • h

          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

        • i

          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; 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

        • xvii

          Establish a municipal council for the orderly 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).