Senate approves automatic income classification of LGUs bill
August 10, 2023
The Senate has approved on third and final
reading a bill that seeks to institutionalize the automatic income
classification of provinces, cities, and municipalities.
Senate Bill No. 2165, which was principally
authored and sponsored by Senator Joseph Victor “JV” Ejercito, received 22
affirmative votes, two negative votes, and no abstentions.
Ejercito, who also serves as the chair of the
Senate Committee on Local Government, thanked his colleagues for supporting the
said measure.
“Through constructive collaboration and
thorough deliberation, we have ensured that this legislation upholds the
principles of transparency, accountability, and balanced governance, all for
the welfare and safeguarding the interest of our local government units
(LGUs),” he said.
The Automatic Income Classification of LGUs
Bill is the second proposed measure sponsored by Ejercito to get the Senate’s
final nod. The first one was the Charter of Carmona City, Cavite, which the
Senate passed last January.
For its part, the House of Representatives
approved on third and final reading its version of the said bill back in March.
Senate Bill No. 2165 consolidated Senate Bill
No. 1530, authored by Ejercito and Senator Joel Villanueva; Senate Bill No.
1913, by Senator Ramon Bong Revilla Jr.; and Senate Bill No. 2067, by Senator
Win Gatchalian.
The said substitute bill, which was recently
included as one of President Ferdinand Marcos Jr.’s legislative priorities,
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.
No LGU will be downgraded under the said
measure unless it falls below its income range during the next
reclassification.
Moreover, the final version of the measure
addressed redundant limitations between the Salary Standardization Law of 2019
and the Local Government Code of 1991, thus enabling local government units to
exercise their administrative autonomy in streamlining their organizational
structures towards greater efficiency and responsiveness to their respective
service delivery requirements.
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.
