RA 7160 - LOCAL GOVERNMENT CODE OF 1991

Effectivity: 01 Jan 1992

minimum requirements for creation

Barangay Municipality City Province
Population 2000 25,000 ICC & CC = 150,000 250,000
MM & HUCs 5000 HUC = 200,000
Ave. Annual P 2.5 M P 20 M P 20 M
Income HUC P100 M (per
RA9009)
Territory 50 km² 100 km² 2,000 km²

Population – as certified by NSO

Income – as certified by Provincial Treasurer for municipality, by Dept. of Finance for city & province;
reckoned from the last 2 years in the case of municipality & component cities
Territory – as certified by LMB; contiguous, except for islands

LIGA NG MGA BARANGAY

Org: President, Vice President, 5 members of the board of directors
The National Liga shall be headed by the elected secretary-general

LEAGUE OF MUNICIPALITIES
Shall form provincial chapter composed of league presidents for all component municipalities of the
province

LEAGUE OF CITIES
The National League shall be composed of the presidents of the league of HUCs and presidents of the
provincial chapters of the league of component cities

LEAGUE OF PROVINCES
Metropolitan Manila Area and any metropolitan political subdivision shall be considered as separate
provincial units of the league

LEAGUES AND FEDERATION OF LOCAL EXECUTIVE OFFICIAL

Org: Vice-Governors, Vice-Mayors, Sanggunian members of barangays, municipalities, component cities,
HUCs, & provinces, & other elected officials of LGUs

• Changing of names of LGUs, public places, streets, structures -> by higher sanggunian in
coordination with Philippine Historical Commission (PHC) (Shall not be named to a living individual)
• 2 natures of LGUs -> body politic & corporate entity
Sec. 16. General Welfare Goals
1. Preservation and enrichment of culture
2. Promotion of health and safety
3. Enhancement of the right of the people to a balanced ecology
4. Encourage and support the development of appropriate and self-reliant scientific and
technological capabilities
5. Improvement of public morals
6. Enhancement of economic prosperity and social justice
7. Promotion of full employment
 8. Maintenance of peace and order
9. Preservation of comfort and convenience
• Sec. 18 – Power to Generate and Apply Resources
• Sec. 19 – Eminent Domain
• Sec. 20 – Reclassification of Land
Limits in reclassifying agricultural lands:
HUCs and ICCs: 15%
CCs and 1st to 3rd class municipalities: 10%
4th to 6th class municipalities: 5%
Not affecting RA 6657 or the Comprehensive Agrarian Reform Law
• Sec. 37 – LOCAL PRE-QUALIFICATION, BIDS AND AWARDS COMMITTEE (LOCAL PBAC)
-governor or mayor as chairman; chairman of appropriations committee of sanggunian;
representative of the minority party in sanggunian; local treasurer; 2 reps. Of NGOs; private CPA
• Sec. 38 – Local Technical Committee -> to provide technical assistance to the local PBAC
>local engineer; & the local PBAC
• Sec.41 (b) (as amended by RA 8553) No. Of members of sanggunian:
1st and 2nd class provinces: 10 regular members
3rd and 4th class provinces: 8 members
5th and 6th class provinces: 6 members
For provinces with more than 5 legislative districts, each district shall have 2 members
• Sec. 43 Term of Office (as amended by RA 8524)
All local elective official: 3 years, for not more than 3 consecutive terms
%DUDQJD\2IILFLDOVDQGSanggunian Kabataan: 5 yearsDVSHU 5$WKHQ6DQJJXQLDQ.DEDWDDQJREDFNWR\UV
• Sec. 97 Annual Report. On or before Mar 31 of each year, local chief executives submit to
sanggunian a report on socioeconomic, political, and peace and order conditions, and other
matters. cc:DILG
• Sec. 98. LOCAL SCHOOL BOARD
Provincial School Board: governor and division superintendent of schools as co-chair; chair of the
education committee of sanggunian; provincial treasurer; rep. of the pederasyon ng mga
sangguniang kabataan in the sangguniang; president of provincial federation of PTA; rep. of
teachers’ org. in the province; rep. of the non-acad personnel of public schools
Sec. 100 – Local School Board shall meet at least once a month
• LOCAL HEALTH BOARD
Governor/mayor as chairman; local health officer as vice-chair; chairman of the committee on
health of the sanggunian; rep. from private sector or NGO involved in health services; rep. of DOH
in the prov/mun./city
-shall meet at least once a month

Sec. 106. LOCAL DEVELOPMENT COUNCILS

Each LGU shall have a comprehensive multi-sectoral development plan
Sec. 107. Composition of LGCs
Barangay LDC City/Municipal LDC Provincial LDC
*headed by punong barangay *headed by the mayor *headed by the governor
*members of the Sangguniang Bgy. *all punong barangays *all mayors of component cities &
*Rep. of NGOs (not less than ¼) *chair of the committee on municipalities
*Rep. of the congressman appropriations of sanggunian *chair of the committee on
*the congressman or his rep. appropriations
*rep. of NGOs (not less than ¼) *the congressman or his rep.
 *rep. of NGOs (not less than ¼)
Sec. 108. Representative NGOs shall be chosen within 60 days from organization of the LDC, and shall
be accredited by the local sanggunian
Sec. 109. LDC shall meet once every 6 months

Sec. 111. Executive Committee – to represent LDC and act in its behalf when it is not in session
Composition:
Provincial City/Municipal Barangay
*governor as chair *mayor as chair *punong barangay as chair
*rep. of component city & *chair of the committee on *rep. of sangguniang barangay
municipal mayors appropriations of sanggunian *rep. of NGOs
*chair of committee on *president of the city/municipal
appropriations league of barangays
*president of the provincial league *a rep. of NGOs represented in the
of barangays council
*a rep. of NGOs represented in the
council

Sec. 112. Sectoral or Functional Committees – may be formed by the LDCs

Sec. 113. Secretariat – may be availed by LDC from services of any NGO or educational or research
institution
-shall be headed by the the LGU’s planning and development coordinators
-Barangay Devt. Council Secretariat shall be headed by the Barangay Secretary
Sec. 114. Approved development plans of provinces, HUC & ICCs shall be submitted to the regional
development council which shall be integrated to the regional development plan for submission to
NEDA
Sec. 116. Establishment of local peace and order council pursuant to EO 309, as amended, s. 1988
Sec. 117. Establishment of Autonomous Special Economic Zones – subject to concurrence by the LGU
Sec. 120. Local Initiative – a legal process whereby the registered voters of an LGU may directly
propose, enact, or amend any ordinance
Sec. 126. Local Referendum - a legal process whereby the registered voters of the LGU may approve,
amend or reject any ordinance enacted by the sanggunian

REAL PROPERTY TAXATION

Appraisal – the act or process of determining the value of property as of a specific date, for a specific
purpose
Assessment – the act or process of determining the value of a property, or proportion subject to tax,
including the discovery, listing, classification, & appraisal of properties
Ad Valorem Tax - is a levy on real property determined on the basis of a fixed proportion of the value
of the property
Sec. 205. LGU assessor shall prepare and maintain an assessment roll wherein shall be listed all real
property, whether taxable or exempt, located within the territorial jurisdiction of the LGU
Sec. 212. There shall be prepared a schedule of fair market values by LGU assessors for the different
classes of real property situtaed in their respective LGU for enactment by ordinance by of the
sanggunian concerned
Sec. 215. Classes of Real Property for Assessment Purposes
Residential Mineral
 Agricultural Timber land
Commercial Special
Industrial
Sec. 219. General revision of assessment & property classification – every 3 year
Sec. 226. Local Board of Assessment Appeals – where to appeal when not satisfied with the action of
LGU assessor in the assessment of property
-composed of Register of Deeds as chairman; prosecutor; engineer

Imposition of Real Property Tax

Sec. 233. Rates of Levy
a. Province -> not exceeding 1% of assessed value
b. City or municipality w/n MM -> not exceeding 2%
Special Levies on Real Property
Sec. 235. Additional Levy on Real Property for the Special Education Fund (SEF)
->1% on the assessed value in addition to the basic real property tax
Sec. 236. Additional Ad Valorem Tax on Idle Lands
->not exceeding 5% of the assessed value of property, in addition to the basic tax
Sec. 237. Coverage of Idle Lands
a. Agri Lands, more than 1ha., ½ of which remain uncultivated or unimproved
b. Lands, other than agri, in city or municipality, more than 1000m², ½ of which remain
unutilized or unimproved
Sec. 240. Special Levy by LGUs – special levy on lands benefitted by a public works project or
improvements funded by the LGU concerned; shall not exceed 60% of the cost of the project
Sec. 241. Installments for the payment of special levy shall not be less than 5 years, but not more
than 10 years
Sec. 255. Interests on unpaid real property tax
->2% per month on the unpaid amount; but shall not exceed 36 months

Sec. 271. Distribution of Proceeds (accruing to the general fund)

Province City Municipalities within MM
Province: 35% City: 70% MMA: 35%
Municipality: 40% Barangay: 30% (50% to bgy. where Municipality: 35%
Barangay: 25% property is located; 50% equally to Barangay: 30% (50% to bgy. where
all component bgys. property is located; 50% equally to
all component bgys.
Share of bgy. shall be released on a quarterly basis, within 5 days after each quarter
Sec. 272. Proceeds from the additional 1% tax on real property accruing to the SEF shall be
automatically released to the local school boards
-in case of provinces, proceeds shall be divided equally between the provincial & municipal school
boards
Sec. 273. Proceeds of Idle Lands Tax -> general fund of the province or city where land is located; for
MM, proceeds shall accrue equally to the MMA & the municipality where land is located
Sec. 274. Proceeds of the Special Levy -> general fund of the LGU which financed the public works,
projects or other improvements
Sec. 284. Allotment of Internal Revenue Taxes
-based on the collection of the 3rd fiscal year preceding the current fiscal year
-local government share in the national internal revenue taxes is 40%
Sec. 285. Share of LGUs in the IRA:
 Provinces: 23%
Cities: 23%
Municipalities: 34%
Barangays: 20%
-based on the ff. formula:
Population 50%; Land Area 25%; Equal Sharing 25%
-share of each bgy. with a population not less than 100 inhabitants shall not be less than P80,000.00
per annum, on the basis of pop’n 60%, equall sharing 40%
Sec. 286. Release of shares shall be on a quarterly basis, w/n 5 days after end of quarter
Sec. 287. Local Development Projects ->shall not be less than 20% of LGUs annual IRA
-development plans shall be furnished the DILG
Sec. 290. LGUs shall in addition to IRA, have a share of 40% of the gross collection derived by the
national government from the preceeding fiscal year from mining taxes, royalties, forestry and
fishery charges,... & from its share in any co-production, joint venture or production sharing
agreement in the utilization & devt. of the nat’l wealth within their territorial jurisdiction
Sec. 291. Share of LGUs from any govt agency of GOCC shall be based on the ff. formula whichever is
higher
a. 1% of the gross sales or receipts of the preceding year, or
b. 40% of the mining taxes, royalties,... such other
Sec. 292. Allocation of Shares --^
Province: Province 20%; Component City/Mun 45%, Barangay 35%
If 2 or more LGUs: Pop’n 70% & Land Area 30%
In HUCs or ICCs: City 65%, Bgy. 35%
Sec. 294. Proceeds from the share of LGUs in national wealth shall be appropriated by the sanggunian
to finance local development and livelihood projects
Sec. 302. LGUs may enter into contracts with “private” under BOT agreement, subject to applicable
provisions of RA 6957

LOCAL FISCAL ADMINISTRATION

Receipts -> income realized from operations & activities of the LGU in the exercise of its corporate
functions..
Revenue -> income derived from the regular system of taxation
Sec. 308. Every LGU shall maintain a General Fund. ->shall be used to account for such monies &
resources as may be received by & disbursed from the local treasury
Sec. 309. Special Funds:
a. SEF
b. Trust Funds – shall be used for the specific purpose for which it was created..

Sec. 313. Special Accounts to be maintained in the General Fund:

a. Public utilities and other economic enterprises;
b. Loans, interests, bond issues, & other contributions for specific purposes; &
c. Dev’t projects funded from the share of the LGU concerned in the IRA..
Sec. 316. Local Finance Committee – LPDO, budget officer, treasurer
Local chief executive shall submit executive budget not later than 16th of October
Submission of budget proposals – on or before 15th of July
Sec. 324. The amount of appropriations for debt servicing shall not exceed 20% of the regular income
of the LGU concerned
 ->aid to component bgys. shall be provided in the amount not less than P1000 per bgy.
->5% of estimated revenue from regular sources shall be set aside as annual lump sum appropriation
for unforseen expenditures from occurrence of calamities
Sec. 329. 10% of the general fund of the bgy. shall be set aside for the SK
Sec. 353. Official fiscal year -> begins Jan 1, ends Dec 31
Sec. 354. Budget Operations Manual -> promulgated by Secretary of DBM w/ COA Chairman
Sec. 356. ..Acquisition of supplies by LGUs shall be through competitive public bidding
Sec. 364. The Committee on Awards -> to decide the winning bids & questions of awards on
procurement & disposal of property
-LCE as chair, treasurer, accountant, budget officer, general services officer, head of ofc./dept.

APPOINTIVE LOCAL OFFICIALS

Secretary to the Sanggunian
The Treasurer -appointed by Secretary of Finance (from at least 3
recommendees of mayor or governor)
-may be w/ Asst. Treasurer, also appointed by Sec. of
Finance
The Assessor -may be w/ Asst. Assessor
The Accountant -preference in appointment is given to incumbent chief
accountant in the office of the treasurer
The Budget Officer
The Planning & Development Coordinator -exercises supervision & control over the secretariat of LDC
(among other functions)
-prepares comprehensive plans & other devt. planing docs.
The Engineer -licensed civil engineer
-shall also act as the local building official
The Health Officer -a licensed medical practitioner
The Civil Registrar
The Administrator -term is coterminous w/ the appointing authority
The Legal Officer -member of Phil. Bar
-term is coterminous w/ the appointing authority
The Agriculturist -mandatory for provincial; optional for city & municipal
govts.
The Social Welfare & Development Officer -mandatory for provincial & city govts; optional for
municipal
-duly licensed social worker
The Environment & Natural Resources -optional
Officer
The Architect -optional
-duly licensed architect
The Information Officer -optional
-term is coterminous w/ the appointing authority
The Cooperatives Officer -optional
The Population Officer -optional
-among other functions, implement appropriate training
programs responsive to the cultural heritage of the
inhabitants
The Veterinarian -a licensed doctor of veterinary medicine
-optional for prov’l or city
The General Services Officer -optional for prov’l or city