JV Ejercito: Automatic income classification of LGUs Act to boost economic growth, local autonomy
October 27, 2023
Senator Joseph Victor "JV" Ejercito
said the new law, which institutionalizes the automatic income classification
of local government units (LGUs), will boost their economic growth and enhance
their local autonomy.
President Ferdinand Marcos Jr. just signed
into law the Republic Act No. 11964 or the “Automatic Income Classification of
Local Government Units Act,” which seeks to set the income thresholds for
provinces, cities, and municipalities and empower the Secretary of Finance to
regularly reclassify LGUs and revise income ranges.
The Automatic Income Classification of LGUs
Act is the first law Ejercito has passed in the 19th Congress, adding to his
list of landmark legislation like the Universal Health Care Act and the
Department of Human Settlements and Urban Development Act.
“Ipinapaabot ko po ang aming pasasalamat kay
Pangulong Bongbong Marcos sa pagpirma upang gawing batas ang Republic Act No.
11964 o Automatic Income Classification of Local Government Units Act na aking
pong isinulong at iniakda,” Ejercito said.
Ejercito, who previously served as local chief
executive of his hometown in San Juan, said the new law will guide the national
government in efficiently allocating its resources for the compensation of
local government personnel and the distribution of financial grants to LGUs.
“Sa pagkakapasa nito, inaasahan po natin na
makatutulong ang batas sa national government sa pagsusuri ng financial
capacity ng mga LGU at sa pagtukoy po ng angkop na uri ng tulong sa kanila,”
the senator emphasized.
“Ang amin pong layunin sa batas na ito ay
malinaw: i-synchronize ang reklasipikasyon ng mga LGU sa termino ng mga lokal
na opisyal na inihalal.”
The first general income reclassification will
be made within six months of the law taking effect, and then every three years
after that. The changes shall take effect on January 1 next year.
Under the law, an LGU won't be reclassified to
a lower category unless its income falls below the new range during the next
reclassification.
This law will also be used to determine the
minimum wage for domestic workers as per Republic Act No. 10361, commonly known
as the Domestic Workers Act or Batas Kasambahay.
Ejercito thanked Senate President Juan Miguel
Zubiri and his fellow senators for backing the measure, and the Department of
Finance for their technical assistance.
The latest income reclassification was
implemented in 2008, shortly before the issuance of an adverse Opinion from the
Department of Justice on the power of the Secretary of Finance to adjust the
income ranges under Executive Order No. 249, dated July 26, 1987.
This means that the current income
classification of LGUs is based on outdated revenue figures from their
2004-2007 Financial Statements.