Republic of the Philippines

Congress of the Philippines

Metro Manila

Eighth Congress

Republic Act No. 7160 October 10, 1991

Setion 41(b) Amended by RA 8553
Setion 43 Amended by RA 8553

AN ACT PROVIDING FOR A LOCAL GOVERNMENT CODE OF 1991

Be it enacted by the Senate and House of Representatives of the Philippines in Congress

assembled::

BOOK I
GENERAL PROVISIONS

TITLE I
BASIC PRINCIPLES

CHAPTER I
The Code: Policy and Application

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. 1awphil.net

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 commonly beneficial to them;

(g) The capabilities of local government units, especially the municipalities and barangays,
shall be enhanced by providing them with opportunities to participate actively in the
implementation of national programs and projects;

(h) There shall be a continuing mechanism to enhance local autonomy not only by legislative
enabling acts but also by administrative and organizational reforms;

(i) Local government units shall share with the national government the responsibility in the
management and maintenance of ecological balance within their territorial jurisdiction,
subject to the provisions of this Code and national policies;

(j) Effective mechanisms for ensuring the accountability of local government units to their
respective constituents shall be strengthened in order to upgrade continually the quality of
local leadership;

(k) The realization of local autonomy shall be facilitated through improved coordination of
national government policies and programs an extension of adequate technical and material
assistance to less developed and deserving local government units;

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

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

CHAPTER II
General Powers and Attributes of Local Government Units

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 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 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 sangguniang concerned, as the case may be.

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

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 the sale or
lease or converted to such other use as the sangguniang concerned may deem beneficial to
the local government unit concerned and its inhabitants.

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

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 sanggunian 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 provisions of the basic services and
facilities enumerated herein.

(b) Such basic services and facilities include, but are not limited to, the following:

(1) For Barangay:

(i) Agricultural support services which include planting materials distribution

system and operation of farm produce collection and buying stations;

(ii) Health and social welfare services which include maintenance of

barangay health center and day-care center;

(iii) Services and facilities related to general hygiene and sanitation,

beautification, and solid waste collection;

(iv) Maintenance of katarungang pambarangay;

(v) Maintenance of barangay roads and bridges and water supply systems;

(vi) Infrastructure facilities such as multi-purpose hall, multipurpose

pavement, plaza, sports center, and other similar facilities;

(vii) Information and reading center; and

(viii) Satellite or public market, where viable;

(2) For a Municipality:

(i) Extension and on-site research services and facilities related to agriculture
and fishery activities which include dispersal of livestock and poultry,
fingerlings, and other seedling materials for aquaculture; palay, corn, and
vegetable seed farms; medicinal plant gardens; fruit tree, coconut, and other
kinds of seedling nurseries; demonstration farms; quality control of copra and
improvement and development of local distribution channels, preferably
through cooperatives; interbarangay irrigation system; 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 residence 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 p. 172 (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:

(1) Adequate communication and transportation 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 at P170 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 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 of from any higher local government unit: Provided, That
projects financed by such grants or assistance with national security implications shall be approved
by the national agency concerned: Provided, further, That when such national agency fails to act on
the request for approval within thirty (30) days from receipt thereof, the same shall be deemed
approved.
The local chief executive shall, within thirty (30) days upon signing of such grant agreement or deed
of donation, report the nature, amount, and terms of such assistance to both Houses of Congress
and the President.

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.

CHAPTER III
Intergovernmental Relations

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 crop land, 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.

CHAPTER IV
Relations With People's and Non-Governmental Organizations

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, diversity 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.

CHAPTER V
Local Prequalification, Bids and Awards Committee

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.

TITLE II
ELECTIVE OFFICIALS

CHAPTER I
Qualifications and Election

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-one (21) 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.

CHAPTER II
Vacancies and Succession

Section 44. Permanent Vacancies in the Offices of the Governor, Vice-Governor, Mayor, and Vice-
Mayor. - If a permanent vacancy occurs in the office of the governor or mayor, the vice-governor or
vice-mayor concerned shall become the governor or mayor. If a permanent vacancy occurs in the
offices of the governor, vice-governor, mayor, or vice-mayor, the highest ranking sanggunian
member or, in case of his permanent inability, the second highest ranking sanggunian member, shall
become the governor, vice-governor, mayor or vice-mayor, as the case may be. Subsequent
vacancies in the said office shall be filled automatically by the other sanggunian members according
to their ranking as defined herein.

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

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

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

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

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

(c) In case or 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.

CHAPTER III
Local Legislation

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. lawphil

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, 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 numbers 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 a majority of the members present, there being a quorum,
in the public interest or for reasons of security, decency, or morality. No two (2) sessions,
regular or special, may be held in a single day.

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

Unless otherwise concurred in by two-thirds (2/3) vote of the sanggunian members present,
there being a quorum, no other matters may be considered at a special session except those
stated in the notice.
 (e) Each sanggunian shall keep a journal and record of its proceedings which may be
published upon resolution of the sanggunian concerned.

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 sanggunian panlalawigan,
sangguniang panlungsod, or sanggunian bayan on the ground that it is ultra vires or
prejudicial to the public welfare, stating his reasons therefor in writing.

(b) The local chief executive, except the punong barangay, shall have the power to veto any
particular item or items of an appropriations ordinance, 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 concerned by two-thirds (2/3) vote of all its
members, thereby making the ordinance effective even without the approval of the local chief
executive concerned.

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 sanggunian panlungsod or
sangguniang bayan shall forward to the sangguniang panlalawigan for review, copies of
approved ordinances and the resolutions approving the local development plans and public
investment programs formulated by the local development councils.

(b) Within thirty (30) days after 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 understood by the majority of the people in the local government
unit concerned, and the secretary to the sanggunian shall record such fact in a book kept for
the purpose, stating the dates of approval and posting.

(c) The gist of all ordinances with penal sanctions shall be published in a newspaper of
general circulation within the province where the local legislative body concerned belongs. In
the absence of any newspaper of general circulation within the province, posting of such
ordinances shall be made in all municipalities and cities of the province where the
sanggunian of origin is situated.

(d) In the case of highly urbanized and independent component cities, the main features of
the ordinance or resolution duly enacted or adopted shall, in addition to being posted, be
published once in a local newspaper of general circulation within the city: Provided, That in
the absence thereof the ordinance or resolution shall be published in any newspaper of
general circulation.

CHAPTER IV
Disciplinary Actions

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 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.

CHAPTER V
Recall

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.

TITLE III.
HUMAN RESOURCES AND DEVELOPMENT

Section 76. Organizational Structure and Staffing Pattern. - Every local government unit shall design
and implement its own organizational structure and staffing pattern taking into consideration its
service requirements and financial capability, subject to the minimum standards and guidelines
prescribed by the Civil Service Commission.

Section 77. Responsibility for Human Resources and Development. - The chief executive of every
local government unit shall be responsible for human resources and development in his unit and
shall take all personnel actions in accordance with the Constitutional provisions on civil service,
pertinent laws, and rules and regulations thereon, including such policies, guidelines and standards
as the Civil Service Commission may establish: Provided, That the local chief executive may employ
emergency or casual employees or laborers paid on a daily wage or piecework basis and hired
through job orders for local projects authorized by the sanggunian concerned, without need of
approval or attestation by the Civil Service Commission: Provided, further, That the period of
employment of emergency or casual laborers as provided in this Section shall not exceed six (6)
months.

The Joint Commission on Local Government Personnel Administration organized pursuant to

Presidential Decree Numbered Eleven Hundred thirty-six (P.D. No. 1136) is hereby abolished and its
personnel, records, equipment and other assets transferred to the appropriate office in the Civil
Service Commission.

Section 78. Civil Service Law, Rules and Regulations, and Other Related Issuances. - All matters
pertinent to human resources and development in local government units shall be governed by the
civil service law and such rules and regulations and other issuances promulgated pursuant thereto,
unless otherwise specified in this Code.

Section 79. Limitation to Appointments. - No person shall be appointed in the career service of the
local government if he is related within the fourth civil degree of consanguinity or affinity to the
appointing or recommending authority.

Section 80. Public Notice of Vacancy; Personnel Selection Board. -

(a) Whenever a local executive decides to fill a vacant career position, there shall be posted
notices of the vacancy in at least three (3) conspicuous public places in the local government
unit concerned for a period of not less than fifteen (15) days.

(b) There shall be established in every province, city or municipality a personnel selection
board to assist the local chief executive in the judicious and objective selection or personnel
for employment as well as for promotion, and in the formulation of such policies as would
contribute to employee welfare.

(c) The personnel selection board shall be headed by the local chief executive, and its
members shall be determined by resolution of the sanggunian concerned. A representative
of the Civil Service Commission, if any, and the personnel officer of the local government unit
concerned shall be ex officio members of the board.
Section 81. Compensation of Local Officials and Employees. - The compensation of local officials
and personnel shall be determined by the sanggunian concerned: Provided, That the increase in
compensation of elective local officials shall take effect only after the terms of office of those
approving such increase shall have expired: Provided, further, That the increase in compensation of
the appointive officials and employees shall take effect as provided in the ordinance authorizing such
increase: Provided, however, That said increases shall not exceed the limitations on budgetary
allocations for personal services provided under Title Five, Book II of this Code: Provided, finally,
That such compensation may be based upon the pertinent provisions of Republic Act Numbered
Sixty-seven fifty-eight (R.A. No 6758), otherwise known as the "Compensation and Position
Classification Act of 1989".

The punong barangay, the sangguniang barangay member, 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.

Section 82. Resignation of Elective Local Officials. -

(a) Resignations by elective local officials shall be deemed effective only upon acceptance
by the following authorities:

(1) The President, in the case of governors, vice-governors, and mayors and vice-
mayors of highly urbanized cities and independent component cities;

(2) The governor, in the case of municipal mayors, municipal vice-mayors, city
mayors and city vice-mayors of component cities;

(3) The sanggunian concerned, in the case of sanggunian members; and

(4) The city or municipal mayor, in the case of barangay officials.

(b) Copies of the resignation letters of elective local officials, together with the action taken
by the aforesaid authorities, shall be furnished the Department of the Interior and Local
Government.

(c) The resignation shall be deemed accepted if not acted upon by the authority concerned
within fifteen (15) days from receipt thereof.

(d) Irrevocable resignations by sanggunian members shall be deemed accepted upon

presentation before an open session of the sanggunian concerned and duly entered in its
records: Provided, however, That this subsection does not apply to sanggunian members
who are subject to recall elections or to cases where existing laws prescribed the manner of
acting upon such resignations.

Section 83. Grievance Procedure. - In every local government unit, the local chief executive shall
establish a procedure to inquire into, act upon, resolve or settle complaints and grievances
presented by local government employees.
Section 84. Administrative Discipline. - Investigation and adjudication of administrative complaints
against appointive local officials and employees as well as their suspension and removal shall be in
accordance with the civil service law and rules and other pertinent laws. The results of such
administrative investigations shall be reported to the Civil Service Commission.

Section 85. Preventive Suspension of Appointive Local Officials and Employees. -

(a) The local chief executives may preventively suspend for a period not exceeding sixty (60)
days and subordinate official or employee under his authority pending investigation if the
charge against such official or employee involves dishonesty, oppression or grave
misconduct or neglect in the performance of duty, or if there is reason to believe that the
respondent is guilty of the charges which would warrant his removal from the service.

(b) Upon expiration of the preventive suspension, the suspended official or employee shall
be automatically reinstated in office without prejudice to the continuation of the administrative
proceedings against him until its termination. If the delay in the proceedings of the case is
due to the fault, neglect or request of the respondent, the time of the delay shall not be
counted in computing the period of suspension herein provided.

Section 86. Administrative Investigation. - In any local government unit, administrative investigation
may be conducted by a person or a committee duly authorized by the local chief executive. Said
person or committee shall conduct hearings on the cases brought against appointive local officials
and employees and submit their findings and recommendations to the local chief executive
concerned within fifteen (15) days from the conclusion of the hearings. The administrative cases
herein mentioned shall be decided within ninety (90) days from the time the respondent is formally
notified of the charges.

Section 87. Disciplinary Jurisdiction. - Except as otherwise provided by law, the local chief executive
may impose the penalty of removal from service, demotion in rank, suspension for not more than
one (1) year without pay, fine in an amount not exceeding six (6) months salary, or reprimand and
otherwise discipline subordinate officials and employees under his jurisdiction. If the penalty
imposed is suspension without pay for not more than thirty (30) days, his decision shall be final. If
the penalty imposed is heavier than suspension of thirty (30) days, the decision shall be appealable
to the Civil Service Commission, which shall decide the appeal within thirty (30) days from receipt
thereof.

Section 88. Execution Pending Appeal. - An appeal shall not prevent the execution of a decision of
removal or suspension of a respondent-appellant. In case the respondent-appellant is exonerated,
he shall be reinstated to his position with all the rights and privileges appurtenant thereto from the
time he had been deprived thereof.

Section 89. Prohibited Business and Pecuniary Interest. -

(a) It shall be unlawful for any local government official or employee, directly or indirectly, to:

(1) Engage in any business transaction with the local government unit in which he is
an official or employee or over which he has the power of supervision, or with any of
its authorized boards, officials, agents, or attorneys, whereby money is to be paid, or
property or any other thing of value is to be transferred, directly or indirectly, out of
the resources of the local government unit to such person or firm;
 (2) Hold such interests in any cockpit or other games licensed by a local government
unit;

(3) Purchase any real estate or other property forfeited in favor of such local
government unit for unpaid taxes or assessment, or by virtue of a legal process at
the instance of the said local government unit;

(4) Be a surety for any person contracting or doing business with the local
government unit for which a surety is required; and

(5) Possess or use any public property of the local government unit for private
purposes.

(b) All other prohibitions governing the conduct of national public officers relating to
prohibited business and pecuniary interest so provided for under Republic Act Numbered
Sixty-seven thirteen (R.A. No. 6713) otherwise known as the "Code of Conduct and Ethical
Standards for Public Officials and Employees" and other laws shall also be applicable to
local government officials and employees.

Section 90. Practice of Profession. -

(a) All governors, city and municipal mayors are prohibited from practicing their profession or
engaging in any occupation other than the exercise of their functions as local chief
executives.

(b) Sanggunian members may practice their professions, engage in any occupation, or teach
in schools except during session hours: Provided, That sanggunian members who are also
members of the Bar shall not:

(1) Appear as counsel before any court in any civil case wherein a local government
unit or any office, agency, or instrumentality of the government is the adverse party;

(2) Appear as counsel in any criminal case wherein an officer or employee of the
national or local government is accused of an offense committed in relation to his
office.

(3) Collect any fee for their appearance in administrative proceedings involving the
local government unit of which he is an official; and

(4) Use property and personnel of the government except when the sanggunian
member concerned is defending the interest of the government.

(c) Doctors of medicine may practice their profession even during official hours of work only
on occasions of emergency: Provided, That the officials concerned do not derive monetary
compensation therefrom.

Section 91. Statement of Assets and Liabilities. - (a) Officials and employees of local government
units shall file sworn statements of assets, liabilities and net worth, lists of relatives within the fourth
civil degree of consanguinity or affinity in government service, financial and business interests, and
personnel data sheets as required by law.
Section 92. Oath of Office. - (a) All elective and appointive local officials and employees shall, upon
assumption to office, subscribe to an oath or affirmation of office in the prescribed form. The oath or
affirmation of office shall be filed with the office of the local chief executive concerned. A copy of the
oath or affirmation of office of all elective and appointive local officials and employees shall be
preserved in the individual personal records file under the custody of the personnel office, division,
or section of the local government unit concerned.

Section 93. Partisan Political Activity. - No local official or employee in the career civil service shall
engage directly or indirectly in any partisan political activity or take part in any election, initiative,
referendum, plebiscite, or recall, except to vote, nor shall he use his official authority or influence to
cause the performance of any political activity by any person or body. He may, however, express his
views on current issues, or mention the names of certain candidates for public office whom he
supports. Elective local officials may take part in partisan political and electoral activities, but it shall
be unlawful for them to solicit contributions from their subordinates or subject these subordinates to
any of the prohibited acts under the Omnibus Election Code.

Section 94. Appointment of Elective and Appointive Local Officials; Candidates Who Lost in an
Election. - (a) No elective or appointive local official shall be eligible for appointment or designation
in any capacity to any public office or position during his tenure.

Unless otherwise allowed by law or by the primary functions of his position, no elective or appointive
local official shall hold any other office or employment in the government or any subdivision, agency
or instrumentality thereof, including government-owned or controlled corporations or their
subsidiaries.

Section 95. Additional or Double Compensation. - No elective or appointive local official or

employee shall receive additional, double, or indirect compensation, unless specifically authorized
by law, nor accept without the consent of Congress, any present, emoluments, office, or title of any
kind from any foreign government. Pensions or gratuities shall not be considered as additional,
double, or indirect compensation.

Section 96. Permission to Leave Station. -

(a) Provincial, city, municipal, and barangay appointive officials going on official travel shall
apply and secure written permission from their respective local chief executives before
departure. The application shall specify the reasons for such travel, and the permission shall
be given or withheld based on considerations of public interest, financial capability of the
local government unit concerned and urgency of the travel.

Should the local chief executive concerned fall to act upon such application within four (4)
working days from receipt thereof, it shall be deemed approved.

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

(c) Local government officials traveling abroad shall notify their respective sanggunian:
Provided, That when the period of travel extends to more than three (3) months, during
periods of emergency or crisis or when the travel involves the use of public funds, permission
from the Office of the President shall be secured.
 (d) Field officers of national agencies or offices assigned in provinces, cities, and
municipalities shall not leave their official stations without giving prior written notice to the
local chief executive concerned. Such notice shall state the duration of travel and the name
of the officer whom he shall designate to act for and in his behalf during his absence.

Section 97. Annual Report. - On or before March 31 of each year, every local chief executive shall
submit an annual report to the sanggunian concerned on the 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.

TITLE IV
LOCAL SCHOOL BOARDS

Section 98. Creation, Composition, and Compensation. -

(a) There shall be established in every province, city, or municipality a provincial, city, or
municipal school board, respectively.

(b) The composition of local school boards shall be as follows:

(1) The provincial school board shall be composed of the governor and the division
superintendent of schools as co-chairman; the chairman of the education committee
of the sangguniang panlalawigan, the provincial treasurer, the representative of the
"pederasyon ng mga sangguniang kabataan" in the sangguniang panlalawigan, the
duly elected president of the provincial federation of 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.

Section 99. Functions of Local School Boards. - The provincial, city or municipal school board shall:

(a) Determine, in accordance with the criteria set by the Department of Education, Culture
and Sports, the annual supplementary budgetary needs for the operation and maintenance
of public schools within the province, city, or municipality, as the case may be, and the
supplementary local cost of meeting such as 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.

Section 100. Meetings and Quorum; Budget. -

(a) The local school board shall meet at least once a month or as often as may be
necessary.

(b) Any of the co-chairmen may call a meeting. A majority of all its members shall constitute a
quorum. However, when both co-chairmen are present in a meeting, the local chief executive
concerned, as a matter of protocol, shall be given preference to preside over the meeting.
The division superintendent, city superintendent or district supervisor, as the case may be,
shall prepare the budget of the school board concerned. Such budget shall be supported by
programs, projects, and activities of the school board for the ensuing fiscal year. The
affirmative vote of the majority of all the members shall be necessary to approve the budget.

(c) The annual school board budget shall give priority to the following:

(1) Construction, repair, and maintenance of school buildings and other facilities of
public elementary and secondary schools;
 (2) Establishment and maintenance of extension classes where necessary; and

(3) Sports activities at the division, district, municipal, and barangay levels.

Section 101. Compensation and Remuneration. - The co-chairmen and members of the provincial,
city or municipal school board shall perform their duties as such without compensation or
remuneration. Members thereof who are not government officials or employees shall be entitled to
necessary traveling expenses and allowances chargeable against the funds of the local school
board concerned, subject to existing accounting and auditing rules and regulations.

TITLE V
LOCAL HEALTH BOARDS

Section 102. Creation and Composition. -

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

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

(2) The city health board shall be headed by the city mayor as chairman, the city
health officer as vice-chairman, and the chairman of the committee on health of the
sangguniang panlungsod, a representative from the private sector or 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.

Section 103. Meetings and Quorum. -

(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.

Section 104. Compensation and Remuneration. - The chairman, vice-chairman, and members of the
provincial, city or municipal health board shall perform their duties as such without compensation or
remuneration. Members thereof who are not government officials or employees shall be entitled to
necessary traveling expenses and allowances chargeable against the funds of the local health board
concerned, subject to existing accounting and auditing rules and regulations.

Section 105. Direct National Supervision and Control by the Secretary of Health. - In cases of
epidemics, pestilence, and other widespread public health dangers, the Secretary of Health may,
upon the direction of the President and in consultation with the local government unit concerned,
temporarily assume direct supervision and control over health operations in any local government
unit for the duration of the emergency, but in no case exceeding a cumulative period of six (6)
months. With the concurrence of the government unit concerned, the period for such direct national
control and supervision may be further extended.

TITLE VI
LOCAL DEVELOPMENT COUNCILS

Section 106. Local Development Councils. - (a) Each local government unit shall have a
comprehensive multi-sectoral development plan to be initiated by its development council and
approved by its sanggunian. For this purpose, the development council at the provincial, city,
municipal, or barangay level, shall assist the corresponding sanggunian in setting the direction of
economic and social development, and coordinating development efforts within its territorial
jurisdiction.

Section 107. Composition of Local Development Councils. - The composition of the local
development council shall be as follows:

(1) Members of the sangguniang barangay;

(2) Representatives of non-governmental organizations operating in the barangay

who shall constitute not less than one fourth () of the members of the fully
organized council;

(3) A representative of the congressman.

(b) The city or municipal development council shall be headed by the mayor and shall be
composed of the following members:

(1) All punong barangays in the city or municipality;

 (2) The chairman of the committee on appropriations of the sangguniang panlungsod
or sangguniang bayan concerned;

(3) The congressman or his representative; and

(4) Representatives of non-governmental organizations operating in the city or

municipality, as the case may be, who shall constitute not less than one-fourth () 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 () 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.

Section 108. Representation of Non-governmental Organizations. - 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.

Section 109. Functions of Local Development Councils. -

(a) The provincial, city, and municipal development councils shall exercise the following
functions:

(1) Formulate long-term, medium-term, and annual socio-economic development

plans and policies;

(2) Formulate the medium-term and annual public investment programs;

(3) Appraise and prioritize 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.

Section 110. Meetings and Quorum. - The local development council shall meet at least once every
six (6) months or as often as may be necessary.

Section 111. Executive Committee. - The local development council shall create an executive
committee to represent it and act in its behalf when it is not in session. The composition of the
executive committee shall be as follows:

(1) The executive committee of the provincial development council shall be

composed of the governor as chairman, the representative of component city and
municipal mayors to be chosen from among themselves, the chairman of the
committee on appropriations of the sangguniang panlalawigan, the president of the
provincial league of barangays, and a representative of non-governmental
organizations that are represented in the council, as members;

(2) The executive committee of the city or municipal development council shall be
composed of the mayor as chairman, the chairman of the committee on
appropriations of the sangguniang panlalawigan, the president of the city or
municipal league of barangays, and a representative of non-governmental
organizations that are represented in the council, as members; and

(3) The executive committee of the barangay development council shall be

composed of the punong barangay as chairman, a representative of the sangguniang
barangay to be chosen from among its members, and a representative of 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.

Section 112. Sectoral or Functional Committees. - The local development councils may form
sectoral or functional committees to assist them in the performance of their functions.
Section 113. Secretariat. - There is hereby constituted for each local development council a
secretariat which shall be responsible for providing technical support, documentation of proceedings,
preparation of reports and such other assistance as may be required in the discharge of its
functions. The 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.

Section 114. Relation of Local Development Councils to the Sanggunian and the Regional
Development Council.-

(a) The policies, programs, and projects proposed by local development councils shall be
submitted to the sanggunian concerned for appropriate action.

(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.

Section 115. Budget Information. - The Department of Budget and Management shall furnish the
various local development councils information on financial resources and budgetary allocations
applicable to their respective jurisdictions to guide them in their planning functions.

TITLE VII
LOCAL PEACE AND ORDER COUNCIL

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.

TITLE VIII
AUTONOMOUS SPECIAL ECONOMIC ZONES

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.

TITLE IX
OTHER PROVISIONS APPLICABLE TO LOCAL GOVERNMENT UNITS

CHAPTER I
Settlement of Boundary Disputes

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 province 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.

CHAPTER II
Local Initiative and Referendum

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.

BOOK II
LOCAL TAXATION AND FISCAL MATTERS

TITLE I
LOCAL GOVERNMENT TAXATION

CHAPTER I
General Provisions

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 the 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 partnership 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 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 provisions 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 or reinsurance or retrocession;

 (l) Taxes, fees or charges for the registration of motor vehicles and for the issuance of all
kinds of licenses or permits for the driving thereof, except tricycles;

(m) Taxes, fees, or other charges on Philippine products actually exported, except as
otherwise provided herein;

(n) Taxes, fees, or charges, on Countryside and Barangay Business Enterprises and
cooperatives duly registered under R.A. No. 6810 and Republic Act Numbered Sixty-nine
hundred thirty-eight (R.A. No. 6938) otherwise known as the "Cooperative Code of the
Philippines" respectively; and

(o) Taxes, fees or charges of any kind on the National Government, its agencies and
instrumentalities, and local government units.

CHAPTER II
Specific Provisions on the Taxing and Other Revenue-Raising Powers of 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 the rate not exceeding
fifty percent (50%) of one percent (1%) of the gross annual receipts for the preceding calendar year
based on the incoming receipt, or realized, within its territorial jurisdiction.

In the case of a newly started business, the tax shall not exceed one-twentieth (1/20) of one percent
(1%) of the capital investment. In the succeeding calendar year, regardless of when the business
started to operate, the tax shall be based on the gross receipts for the preceding calendar year, or
any fraction thereon, as provided herein.

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 Amount of Tax

preceding calendar year in the amount of: Per Annum
Less than 10,000.00 165.00
P 10,000.00 or more but less than 220.00
15,000.00
15,000.00 or more but less than 20,000.00 202.00
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 1,650.00
100,000.00
100,000.00 or more but less than 2,200.00
150,000.00
150,000.00 or more but less than 2,750.00
200,000.00
200,000.00 or more but less than 3,850.00
300,000.00
300,000.00 or more but less than 5,500.00
500,000.00
500,000.00 or more but less than 8,000.00
750,000.00
750,000.00 or more but less than 10,000.00
1,000,000.00
1,000,000.00 or more but less than 13,750.00
2,000,000.00
2,000,000.00 or more but less than 16,500.00
3,000,000.00
3,000,000.00 or more but less than 19,000.00
 4,000,000.00
4,000,000.00 or more but less than 23,100.00
5,000,000.00
5,000,000.00 or more but less than 24,375.00
6,500,000.00
6,000,000.00 or more at a rate not exceeding thirty-seven and
a half percent (37%) 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 Amount of Tax

preceding calendar year in the amount of: Per Annum
Less than 1,000.00 18.00
P 1,000.00 or more but less than 2,000.00 33.00
2,000.00 or more but less than 3,000.00 50.00
3,000.00 or more but less than 4,000.00 72.00
4,000.00 or more but less than 5,000.00 100.00
5,000.00 or more but less than 6,000.00 121.00
6,000.00 or more but less than 7,000.00 143.00
7,000.00 or more but less than 8,000.00 165.00
8,000.00 or more but less than 10,000.00 187.00
10,000.00 or more but less than 15,000.00 220.00
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 1,320.00
100,000.00
100,000.00 or more but less than 1,870.00
150,000.00
150,000.00 or more but less than 2,420.00
200,000.00
200,000.00 or more but less than 3,300.00
300,000.00
300,000.00 or more but less than 4,400.00
 500,000.00
500,000.00 or more but less than 6,600.00
750,000.00
750,000.00 or more but less than 8,800.00
1,000,000.00
1,000,000.00 or more but less than 10,000.00
2,000,000.00
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 () 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 receipts for the preceding Rate of Tax Per
calendar year in the amount of: 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 Amount of Tax

preceding calendar year in the amount of: Per Annum
Less than 5,000.00 27.50
P 5,000.00 or more but less than P 61.60
10,000.00
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 1,320.00
100,000.00
100,000.00 or more but less than 1,980.00
150,000.00
150,000.00 or more but less than 2,640.00
200,000.00
200,000.00 or more but less than 3,630.00
250,000.00
250,000.00 or more but less than 4,620.00
300,000.00
300,000.00 or more but less than 6,160.00
400,000.00
400,000.00 or more but less than 8,250.00
500,000.00
500,000.00 or more but less than 9,250.00
750,000.00
750,000.00 or more but less than 10,250.00
1,000,000.00
1,000,000.00 or more but less than 11,500.00
2,000,000.00
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 business 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
(P200.00).

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. -

(a) The community tax shall accrue on the first (1st) day of January of each year which shall
be paid not later than the last day of February of each year. If a person reaches the age of
eighteen (18) years or otherwise loses the benefit of exemption on or before the last day of
June, he shall be liable for the community tax on the day he reaches such age or upon the
 day the exemption ends. However, if a person reaches the age of eighteen (18) years or
loses the benefit of exemption on or before the last day of March, he shall have twenty (20)
days to pay the community tax without becoming delinquent.

Persons who come to reside in the Philippines or reach the age of eighteen (18) years on or
after the first (1st) day of July of any year, or who cease to belong to an exempt class or after
the same date, shall not be subject to the community tax for that year.

(b) Corporations established and organized on or before the last day of June shall be liable
for the community tax for that year. But corporations established and organized on or before
the last day of March shall have twenty (20) days within which to pay the community tax
without becoming delinquent. Corporations established and organized on or after the first
day of July shall not be subject to the community tax for that year.

If the tax is not paid within the time prescribed above, there shall be added to the unpaid amount an
interest of twenty-four percent (24%) per annum from the due date until it is paid.

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. -

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

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

(b) When, through its authorized officers, any corporation subject to the community tax
receives any license, certificate, or permit from any public authority, pays any tax or fee,
receives money from public funds, or transacts other official business, it shall be the duty of
the public official with whom such transaction is made or business done, to require such
corporation to exhibit the community tax certificate.

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

Section 164. Printing of Community Tax Certificates and Distribution of Proceeds. -

(a) The Bureau of Internal Revenue shall cause the printing of community tax certificates and
distribute the same to the cities and municipalities through the city and municipal treasurers
in accordance with prescribed regulations.
 The proceeds of the tax shall accrue to the general funds of the cities, municipalities and
barangays except a portion thereof which shall accrue to the general fund of the national
government to cover the actual cost of printing and distribution of the forms and other related
expenses. The city or municipal treasurer concerned shall remit to the national treasurer the
said share of the national government in the proceeds of the tax within ten (10) days after
the end of each quarter.

(b) The city or municipal treasurer shall deputize the barangay treasurer to collect the
community tax in their respective jurisdictions: Provided, however, That said barangay
treasurer shall be bonded in accordance with existing laws.

(c) The proceeds of the community tax actually and directly collected by the city or municipal
treasurer shall accrue entirely to the general fund of the city or municipality concerned.
However, proceeds of the community tax collected through the barangay treasurers shall be
apportioned as follows:

(1) Fifty percent (50%) shall accrue to the general fund of the city or municipality
concerned; and

(2) Fifty percent (50%) shall accrue to the barangay where the tax is collected.

CHAPTER III
Collection of Taxes

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 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.

CHAPTER IV
Civil Remedies for Collection of Revenues

Section 172. Application of Chapter. - The provisions of this Chapter and the remedies provided
hereon 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 thru 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;

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

Within thirty (30) days after the sale, the local treasurer or his deputy shall make a report of the sale
to the sanggunian concerned, and which shall form part of his records. After consultation with the
sanggunian, the local treasurer shall make and deliver to the purchaser a certificate of sale, showing
the proceeding 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 the levy, attachment or execution thereof for delinquency in the payment of
any local tax, fee or charge, including the related surcharge and interest:

(a) Tools and implements necessarily used by the delinquent taxpayer in his trade or
employment;

(b) One (1) horse, cow, carabao, or other beast of burden, such as the delinquent taxpayer
may select, and necessarily used by him in his ordinary occupation;

(c) His necessary clothing, and that of all his family;

(d) Household furniture and utensils necessary for housekeeping and used for that purpose
by the delinquent taxpayer, such as he may select, of a value not exceeding Ten thousand
pesos (P10,000.00);

(e) Provisions, including crops, actually provided for individual or family use sufficient for four
(4) months;

(f) The professional libraries of doctors, engineers, lawyers and judges;

(g) One fishing boat and net, not exceeding the total value of Ten thousand pesos
(P10,000.00), by the lawful use of which a fisherman earns his livelihood; and

(h) Any material or article forming part of a house or improvement of any real property.

CHAPTER V
Miscellaneous Provisions

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.

CHAPTER VI
Taxpayer's Remedies

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.

TITLE II
REAL PROPERTY TAXATION

CHAPTER I
General Provisions

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. Definitions. - When used in this Title:

(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.

CHAPTER II
Appraisal and Assessment of Real Property

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 Appraise Assessor of Real Property Listed in Registry. -

(a) To ascertain whether or not any real property entered in the Registry of Property has
escaped discovery and listing for the purpose of taxation, the Registrar of Deeds shall
prepare and submit to the provincial, city or municipal assessor, within six (6) months from
the date of effectivity of this Code and every year thereafter, an abstract of his registry, which
shall include brief but sufficient description of the real properties entered therein, their
present owners, and the dates of their most recent transfer or alienation accompanied by
copies of corresponding deeds of sale, donation, or partition or other forms of alienation.

(b) It shall also be the duty of the Registrar of Deeds to require every person who shall
present for registration a document of transfer, alienation, or encumbrance of real property to
accompany the same with a certificate to the effect that the real property subject of the
transfer, alienation, or encumbrance, as the case may be, has been fully paid of all real
property taxes due thereon. Failure to provide such certificate shall be a valid cause for the
Registrar of Deeds to refuse the registration of the document.

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 assessor of the municipalities
within the Metropolitan Manila Area for the different classes of real property situated in their
respective local government units for enactment by ordinance of the sanggunian concerned. The
schedule of fair market values shall be published in a newspaper of general circulation in the
province, city or municipality concerned or in the absence thereof, shall be posted in the provincial
capitol, city or municipal hall and in two other conspicuous public places therein.

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:

<td
</td
(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 10,000,000.0 50%
0
10,000,000.0 60%
0
(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 10,000,000.0 75%
0
10,000,000.0 80%
0
(4) Timberland
Fair Market Value
Over Not Over Assessment
Levels
P300,000.00 45%
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 10%
 controlled corporations
engaged in the supply and
distribution of water and/or
generation and transmission
of electric power

Section 219. General Revision of Assessment 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 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
of 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 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.

CHAPTER III
Assessment Appeals

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 provincial or city by filing a petition
under oath in the form prescribed for the purpose, together with copies of the tax declarations and
such affidavits or documents submitted in support of the appeal.

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
designations 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 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.

CHAPTER IV
Imposition of Real Property Tax

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.

CHAPTER V
Special Levies on Real Property

Section 235. Additional Levy on Real Property for the Special Education Fund. - 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 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. lawphil.net

CHAPTER VI
Collection of Real Property Tax

Section 246. Date of Accrual of Tax. - The real property tax for any year shall accrue on the first 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 March Thirty-first (31st); the second installment, on or
before June Thirty (30); the third installment, on or before September Thirty (30); and the last
installment on or before December Thirty-first (31st), 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 hall and in a publicly accessible and conspicuous place in each
barangay of the local government unit concerned. The notice of delinquency shall also be
published once a week for two (2) consecutive weeks, in a newspaper of general circulation
in the province, city, or municipality.

(b) Such notice shall specify the date upon which the tax became delinquent and shall state
that personal property may be distrained to effect payment. It shall likewise state that any
time before the distraint of personal property, payment of the tax with surcharges, interests
and penalties may be made in accordance with the next following Section, and unless the
tax, surcharges and penalties are paid before the expiration of the year for which the tax is
due except when the notice of assessment or special levy is contested administratively or
judicially pursuant to the provisions of Chapter 3, Title 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 thru levy on real property or by judicial action.
Section 257. Local Governments Lien. - The basic real property tax and any other tax levied under
this Title constitutes 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 thru 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 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 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 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, 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 or 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 or 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 propio
or upon representation of the provincial, city, or municipal treasurer or his deputy, award such
ownership, possession, or succession to any party to the action upon payment to the court of the
taxes with interest due on the property and all other costs that may have accrued, subject to the final
outcome of the action.

Section 269. Treasurer to Certify Delinquencies Remaining Uncollected. - The provincial, city or
municipal treasurer or their deputies shall prepare a certified list of all real property tax delinquencies
which remained uncollected or unpaid for at least one (1) year in his jurisdiction, and a statement of
the reason or reasons for such non-collection or non-payment, and shall submit the same to the
sanggunian concerned on or before December thirty-first (31st) of the year immediately succeeding
the year in which the delinquencies were incurred, with a request for assistance in the enforcement
of the remedies for collection provided 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.
 CHAPTER VII
Disposition of Proceeds

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) 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;

(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.

CHAPTER VIII
Special Provisions

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 assessment shall, by ordinance of the
sangguniang panlalawigan, be apportioned between the province and the municipality on the basis
of the taxable area of the municipality concerned.

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.

TITLE III
SHARES OF LOCAL GOVERNMENT UNITS IN THE PROCEEDS OF NATIONAL TAXES

CHAPTER I
Allotment of Internal Revenue

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 collected 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.

CHAPTER II
Share of Local Government Units in the National Wealth

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 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 government and livelihood projects: Provided, however, That at least eighty percent
(80%) of the proceeds derived from the development and utilization of hydrothermal. geothermal,
and other sources of energy shall be applied solely to lower the cost of electricity in the local
government unit where such a source of energy is located.

TITLE IV
Credit Financing

Section 295. Scope. - This Title shall govern the power of local government units to create
indebtedness and to enter into credit and other financial transactions.

Section 296. General Policy. -

(a) It shall be the basic policy that any local government unit may create indebtedness, and
avail of credit facilities to finance local infrastructure and other socio-economic development
projects in accordance with the approved local development plan and public investment
program.

(b) A local government unit may avail of credit lines from government or private banks and
lending institutions for the purpose of stabilizing local finances.

Section 297. Loans, Credits, and Other Forms of Indebtedness of Local Government Units. -
 (a) A local government unit may contract loans, credits, and other forms of indebtedness with
any government or domestic private bank and other lending institutions to finance the
construction, installation, improvement, expansion, operation, or maintenance of public
facilities, infrastructure facilities, housing projects, the acquisition of real property, and the
implementation of other capital investment projects, subject to such terms and conditions as
may be agreed upon by the local government unit and the lender. The proceeds from such
transactions shall accrue directly to the local government unit concerned.

(b) A local government unit may likewise secure from any government bank and lending
institution short, medium and long-term loans and advances against security of real estate or
other acceptable assets for the establishment, development, or expansion of agricultural,
industrial, commercial, house financing projects, 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.

Section 298. Deferred-Payment and other Financial Schemes. - Provincial, city and municipal
governments may likewise acquire property, plant, machinery, equipment, and such necessary
accessories under a supplier's credit, deferred payment plan, or either financial scheme.

Section 299. Bonds and Other Long-Term Securities. - Subject to the rules and regulations of the
Central Bank and the Securities and Exchange Commission, provinces, cities, and municipalities are
hereby authorized to issue bonds, debentures, securities, collaterals, notes and other obligations to
finance self-liquidating, income-producing development or livelihood projects pursuant to the
priorities established in the approved local development plan or the public investment program. The
sanggunian concerned shall, through an ordinance approved by a majority of all its members,
declare and state the terms and conditions of the bonds and the purpose for which the proposed
indebtedness is to be incurred.

Section 300. Inter-Local Government Loans, Grants, and Subsidies. - Provinces, cities, and
municipalities may, upon approval of the majority of all members of the sanggunian concerned and
in amounts not exceeding their surplus funds, extend loans, grants, or subsidies to other local
government units under such terms and conditions as may be agreed upon by the contracting
parties.

Local government units may, upon approval of their respective sanggunian, jointly or severally
contract loans, credits, and other forms of indebtedness for purposes mutually beneficial to them.

Section 301. Loans from Funds Secured by the National Government from Foreign Sources. -

(a) The President, or his duly authorized representative, may, through any government
financial or other lending institution, relend to any province, city, municipality, or barangay,
the proceeds of loans contracted with foreign financial institutions or other international
funding agencies for the purpose of financing the construction, installation, improvement,
expansion, operation, or maintenance of public utilities and facilities, infrastructure facilities,
or housing projects, the acquisition of real property, and the implementation of other capital
investment projects, subject to such terms and conditions as may be agreed upon by the
President and the local government unit. The proceeds from such loans shall accrue directly
to the local government concerned.
 (b) The President may likewise authorize the relending to local government units the
proceeds of grants secured from foreign sources, subject to the provisions of existing laws
and the applicable grant agreements. (c) Repayment or amortization of loans including
accrued interest thereon, may be financed partly from the income of the projects or services
and from the regular income of the local government unit, which must be provided for and
appropriated regularly in its annual budget until the loan and the interest thereon shall have
been fully paid.

Section 302. Financing, Construction, Maintenance, Operation, and Management of Infrastructure

Projects by the Private Sector. -

(a) Local government units may enter into contracts with any duly 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 publications 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.

Section 303. Remedies and Sanctions. - Local government unit shall appropriate in their respective
annual budgets such amounts as are sufficient to pay the loans and other indebtedness incurred or
redeem or retire bonds, debentures, securities, notes and other obligations issued under this Title:
Provided, That failure to provide the appropriations herein required shall render their annual budgets
inoperative.

TITLE V
Local Fiscal Administration

CHAPTER I
General Provisions

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. Definitions. - 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 as 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 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.

CHAPTER II
Local and Other Special Funds

ARTICLE I
Receipts, Safekeeping Article and Disposition of Local Funds

Section 307. Remittance of Government Monies to the Local Treasury. - Officers of local
government authorized to receive and collect monies arising from taxes, revenues, or receipts of any
kind shall remit the full amount received and collected to the treasury of such local government unit
which shall be credited to the particular account or accounts to which the monies in question
properly belong.

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

CHAPTER III
Budgeting

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 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 or Departments or Offices. -

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

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;

(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. Representatives
of the Commission on Audit 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 Commission on Audit shall prescribe and put into effect
simplified procedures for barangay finances within six (6) months following the effectivity of
this Code.

CHAPTER IV
Expenditures, Disbursements, Accounting and Accountability

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 Commission
on Audit 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, 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, LDP, 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

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 Commission on Audit. 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 Commission on Audit may prescribe.
Provincial, city, and municipal auditors shall certify the balances arising in the accounts settled by
them to the Chairman of the Commission on Audit 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 Commission on Audit or its duly authorized representative.

In case an examination of the accounts of a local treasurer discloses a shortage in cash which
should be on hand, it shall be the duty of the examining officer to seize the office and its contents,
notify the Commission on Audit, 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 the fiscal
year, post in at least three (3) publicly accessible and conspicuous places in the local government
unit a summary of all revenues collected and funds received including the appropriations and
disbursements of such funds during the preceding fiscal year.

Section 353. The Official Fiscal Year. - The official fiscal year of local government units shall be the
period beginning with the first day of January and ending with the thirty-first 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 Commission on Audit shall, within one (1) year from the
effectivity of this Code, promulgate a Budget Operations Manual for local government units to
improve and systematize methods, techniques, and procedures employed in budget preparation,
authorization, execution, and accountability.

TITLE VI
Property and Supply Management in the Local Government Units
Section 355. Scope. - This Title shall govern the procurement, care, utilization, custody, and
disposal of supplies, as defined herein, by local government units and the other aspects of supply
management at the local levels.

Section 356. General Rule in Procurement or Disposal. - Except as otherwise provided herein,
acquisition of supplies by local government units shall be through competitive public bidding.
Supplies which have become unserviceable or no longer needed shall be sold, whenever applicable,
at public auction, subject to applicable rules and regulations.

Section 357. Definition of Terms. - When used in this Title, the term

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

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

(c) "Supplies" 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.

Section 358. Requirement of Requisition. - Any order for supplies shall be filled by the provincial or
city general services officer or the municipal or barangay treasurer concerned, as the case may be,
for any office or department of a local government unit only upon written requisition as hereinafter
provided.

Section 359. Officers Having Authority to Draw Requisitions. - Requisitions shall be prepared by the
head of office or department needing the supplies, who shall certify as to their necessity for official
use and specify the project or activity where the supplies are to be used.

Section 360. Certification by the Local Budget Officer, Accountant, and Treasurer. - Every requisition
must be accompanied by a certificate signed by the local budget officer, the local accountant, and
the local treasurer showing that an appropriation therefor exists, the estimated amount of such
expenditure has been obligated, and the funds are available for the purpose, respectively.

Section 361. Approval of Requisitions. - Approval of the requisition by the head of office or
department concerned who has administrative control of the appropriation against which the
proposed expenditure is chargeable is deemed sufficient, except in case of requisition for supplies to
be carried in stock which shall be approved by the local chief executive concerned: Provided, That
such supplies are listed or included in the annual procurement plan and the maximum quantity
thereof does not exceed the estimated consumption corresponding to a programmed three-month
period: Provided, further, That nothing herein contained shall be held as authorizing the purchase of
furniture and equipment for stock purposes.

Section 362. Call for Bids. - When procurement is to be made by local government units, the
provincial or city general services officer or the municipal or barangay treasurer shall call bids for
open public competition. The call for bids shall show the complete specifications and technical
descriptions of the required supplies and shall embody all terms and conditions of participation and
award, terms of delivery and payment, and all other covenants affecting the transaction. In all calls
for bids, the right to waive any defect in the tender as well as the right to accept the bid most
advantageous to the government shall be reserved. In no case, however, shall failure to meet the
specifications or technical requirements of the supplies desired be awarded.

Section 363. Publication of Call for Bids. - The call for bids shall be given the widest publicity
possible, sending, by mail or otherwise, any known prospective participant in the locality, of copies of
the call and by posting copies of the same in at least three (3) publicly accessible and conspicuous
places in the provincial capitol or city, municipal, or barangay hall, as the case may be.

The notice of the bidding may likewise be published in a newspaper of general circulation in the
territorial jurisdiction of the local government unit concerned when the provincial or city general
services officer or the municipal or barangay treasurer, as the case may be, deems it necessary in
order to obtain the lowest responsible and complying bid.

The opening of bids shall only be made in the presence of the provincial or city auditor or his duly
authorized representative who shall initial and secure copies of the bids and certify the abstract of
the bidding.

Section 364. The Committee on Awards. - There shall be in every province, city or municipality a
committee on awards to decide the winning bids and questions of awards on procurement and
disposal of property.

The Committee on Awards shall be composed of the local chief executive as chairman, the local
treasurer, the local accountant, the local budget officer, the local general services officer, and the
head of office or department for whose use the supplies are being procured, as members. In case a
head of office or department would sit in a dual capacity, a member of the sanggunian elected from
among its members shall sit as a member. The committee on awards at the barangay level shall be
the sangguniang barangay. No national official shall sit as a member of the committee on awards.

The results of the bidding shall be made public by conspicuously posting the same in the provincial
capitol or city, municipal, or barangay hall.

Section 365. Rule on Awards. - Awards in the procurement of supplies shall be given to the lowest
complying and responsible bid which meets all the terms and conditions of the contract or
undertaking.

Section 366. Procurement Without Public Bidding. - Procurement of supplies may be made without
the benefit of public bidding under any of the following modes:

(a) Personal canvass of responsible merchants;

(b) Emergency purchase;

 (c) Negotiated purchase;

(d) Direct purchase from manufacturers or exclusive distributors; and

(e) Purchase from other government entities.

Section 367. Procurement through Personal Canvass. - Upon approval by the Committee on
Awards, procurement of supplies may be effected after personal canvass of at least three (3)
responsible suppliers in the locality by a committee of three (3) composed of the local services
officer or the municipal or barangay treasurer, as the case may be, the local accountant, and the
head of office or department for whose use the supplies are being procured. The award shall be
decided by the Committee on Awards.

Purchases under this Section shall not exceed the amounts specified hereunder for all items in any
one (1) month for each local government unit:

Provinces and Cities and Municipalities within the Metropolitan Manila Area:

First and Second Class - One hundred fifty thousand pesos (P150,000.00)

Third and Fourth Class - One hundred thousand pesos (P100,000.00)

Fifth and Sixth Class - Fifty thousand pesos (P50,000.00)

Municipalities:

First Class - Sixty thousand pesos (P60,000.00)

Second and Third Class - Forty thousand pesos (P40,000.00)

Fourth Class and Below - Twenty thousand pesos (P20,000.00)

Section 368. Emergency Purchase. - In cases of emergency where the need for the supplies is
exceptionally urgent or absolutely indispensable and only to prevent imminent danger to, or loss of,
life or property, local government units may, through the local chief executive concerned, make
emergency purchases or place repair orders, regardless of amount, without public bidding. Delivery
of purchase orders or utilization of repair orders pursuant to this Section shall be made within ten
(10) days after placement of the same. Immediately after the emergency purchase or repair order is
made, the chief of office or department making the emergency purchase or repair order shall draw a
regular requisition to cover the same which shall contain the following:

(a) A complete description of the supplies acquired or the work done or to be performed;

(b) By whom furnished or executed;

(c) Date of placing the order and the date and time of delivery or execution;

(d) The unit price and the total contract price;

 (e) A brief and concise explanation of the circumstances why procurement was of such
urgency that the same could not be done through the regular course without involving
danger to, or loss of, life or property;

(f) A certification of the provincial or city general services or the municipal or barangay
treasurer, as the case may be, to the effect that the price paid or contracted for was the
lowest at the time of procurement; and

(g) A certification of the local budget officer as to the existence of appropriations for the
purpose, the local accountant as to the obligation of the amount involved, and the local
treasurer as to the availability of funds. The goods or services procured under this Section
must be utilized or availed of within fifteen (15) days from the date of delivery or availability.

Without prejudice to criminal prosecution under applicable laws, the local chief executive, the head
of department, or the chief of office making the procurement shall be administratively liable for any
violation of this Section and shall be a ground for suspension or dismissal from service.

Section 369. Negotiated Purchase. -

(a) In cases where public biddings have failed for two (2) consecutive times and no suppliers
have qualified to participate or win in the biddings, local government units may, through the
local chief executive concerned, undertake the procurement of supplies by negotiated
purchase, regardless of amount, without public bidding: Provided, however, That the contract
covering the negotiated purchase shall be approved by the sanggunian concerned. Delivery
of purchase orders or utilization of repair orders pursuant to this Section shall be made within
seven (7) days after placement of the same. Immediately after the negotiated purchase or
repair order is made, the local chief executive concerned shall draw a regular requisition to
cover the same which shall contain the following:

(1) A complete description of the supplies acquired or the work done or to be

performed;

(2) By whom furnished or executed;

(3) Date of placing the order and the date and time of delivery or execution;

(4) The unit price and the total contract price;

(5) A certification of the provincial or city general services of the municipal or

barangay treasurer, as the case may be, to the effect that the price paid or
contracted for was the lowest at the time of procurement;

(6) A certification to the effect that the price paid or contracted for was the lowest at
the time of procurement; and

(7) A certification of the local budget officer as to the existence of appropriations for
the purpose, the local accountant as to the obligation of the amount involved, and the
local treasurer as to the availability of funds.

(b) In case of repeat orders for regular supplies, procurement may be made by negotiated
purchase: Provided, That the repeat order is made within three (3) months from the last
 procurement of the same item: Provided, further, That the same terms and conditions of sale
are obtained for the said repeat order.

Section 370. Procurement from Duly Licensed Manufacturer. - Procurement may be made directly
from duly licensed manufacturers in cases of supplies of Philippine manufacture or origin and in
case there are two (2) or more manufacturers shall be conducted to obtain the lowest price for the
quality of the said supplies.

Section 371. Procurement from Exclusive Philippine Agents or Distributors. - Procurement may, in
the case of supplies of foreign origin, preferably be made directly from the exclusive or reputable
Philippine distributors or agents, subject to the following conditions:

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

(b) That no suitable substitutes or substantially the same quality are available at lower prices.

Section 372. Procurement from Government Entities. - 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.

Section 373. Annual Procurement Program. -

(a) On or before the fifteenth (15th) day of July each year, the local chief executive shall
prepare an annual procurement program for the ensuing fiscal year which shall contain an
itemized list of the estimated quantity of supplies needed for such year, a complete
description thereof as to kind, quality, estimated cost, and balance on hand: Provided,
however, That the total estimated cost of the approved annual procurement program shall
not exceed the total appropriations authorized for the acquisition of supplies. The local
government units may augment the supplies and equipment provided by the Supreme Court
to the lower courts located in their respective jurisdictions.

(b) Except in emergency cases or where urgent indispensable needs could not have been
reasonably anticipated, no purchase of supplies shall be made unless included in. or
covered by, the approved procurement program. (c) The conversion of excess cash into
supplies stock is hereby prohibited except to the extent of the kind and quantity specified in
the approved annual procurement plan. A violation of this Section shall be a ground for
suspension or dismissal of any political or employee responsible therefor.

Section 374. Establishment of an Archival System. - Every local government unit shall provide for
the establishment of archival system to ensure the safety and protection of all government property,
public documents or records such as records of births, marriages, property inventory, land
assessments, land ownership, tax payments, tax accounts, and business permits, and such other
records or documents of public interest in the various departments and offices of the provincial, city,
or municipal government concerned.

Section 375. Primary and Secondary Accountability for Government Property. -

(a) Each head of department or office of a province, city, municipality or barangay shall be
primarily accountable for all government property assigned or issued to his department or
office. The person or persons entrusted with the possession or custody of government
 property under the accountability of any head of department or office shall be immediately
accountable to such officer.

(b) The head of a department or office primarily accountable for government property may
require any person in possession of the property or having custody and control thereof under
him to keep such records and make reports as may be necessary for his own information
and protection.

(c) Buildings and other physical structures shall be under the accountability and responsibility
of the provincial or city general services officer or the municipal mayor or punong barangay,
as the case may be. (d) Every officer primarily accountable for government property shall
keep a complete record of all properties under his charge and render his accounts therefor
semiannually to the provincial or city general services officer or the municipal mayor or
punong barangay, as the case may be.

Section 376. Responsibility for Proper Use and Care of Government Property. - The person in actual
physical possession of government property or entrusted with its custody and control shall be
responsible for its proper use and care and shall exercise due diligence in the utilization and
safekeeping thereof.

Section 377. Measure of Liability of Persons Accountable for Government Property. -

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

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

(c) In cases of loss, damage, or deterioration of government property arising from, or

attributable to, negligence in security, the head of the security agency shall be held liable
therefor.

Section 378. Credit for Loss Occurring in Transit or Due to Casualty. - When a loss of government
property occurs while the same is in transit or is caused by fire, theft, force majeure, or other
casualty, the officer accountable therefor or having custody thereof shall immediately notify the
provincial or city auditor concerned within thirty (30) days from the date the loss occurred or for such
longer period as the provincial, city or municipal auditor, as the case may be, may in the particular
case allow, and he shall present his application for relief, with the available evidence in support
thereof. An officer who fails to comply with this requirement shall not be relieved of liability or allowed
credit for any such loss in the settlement of his accounts.

A provincial, city or municipal auditor shall not allow credit for these losses unless so expressly
authorized by the Chairman of the Commission on Audit, to the exercised only if the loss is not in
excess of fifty thousand pesos (P50,000.00). In any case when the allowance of credit is not within
the competence of the provincial, city or municipal auditor, the application and evidence, with the
recommendation of the auditor concerned, shall be forwarded to the Chairman of the Commission
on Audit for his appropriate action.

Section 379. Property Disposal. - When property of any local government unit has become
unserviceable for any cause or is no longer needed, it shall upon application of the officer
accountable therefor, be inspected and appraised by the provincial, city or municipal auditor, as the
case may be, or his duly authorized representative or that of the 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.

Section 380. Negotiated Sale of Property. - Property no longer needed may also be disposed of at a
private sale at such price as may be determined by the committee on awards, subject to the
approval of the 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.

Section 381. Transfer Without Cost. - Property which has become unserviceable or is no longer
needed may be transferred without cost to another office, agency, subdivision or instrumentality of
the national government or another local government 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.

Section 382. Tax Exemption Privileges of Local Government Units. - Local government units shall
be exempt from the payment of duties and taxes for the importation of heavy equipment or
machineries which shall be used for the construction, improvement, repair, and maintenance of
roads, bridges and other infrastructure projects, as well as garbage trucks, fire trucks, and other
similar equipment: Provided, however, That such equipment or machineries shall not be disposed of,
either by public auction or negotiated sale as hereinabove provided, within five (5) years from the
importation thereof. In case the machinery or equipment is sold within the five-year period, the
purchasers or recipients shall be considered the importers thereof, and shall be liable for duties and
taxes computed on the book value of such importation.

Section 383. Implementing Rules and Regulations. - 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.

BOOK III
LOCAL GOVERNMENT UNITS

TITLE I
THE BARANGAY
 CHAPTER I
Role and Creation of the Barangay

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
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.

CHAPTER II
Barangay Officials and Offices

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.

CHAPTER III
The Punong Barangay

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.

(b) In the performance of his peace and order functions. the punong barangay shall be
entitled to possess and carry the necessary firearm within his territorial jurisdiction, subject to
appropriate rules and regulations.

CHAPTER IV
The Sangguniang Barangay

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 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 attendance to the nearest private clinic, hospital or
institution and the expenses not exceeding Five thousand pesos (P5,000.00) that
may be incurred therein shall be chargeable against the funds of the barangay
concerned;

(4) Be exempted during their incumbency from paying tuition and matriculation fees
for their legitimate dependent children attending state colleges or universities. He
may likewise avail of such educational benefits in a state college or university located
within the province or city to which the barangay belongs; and

(5) Be entitled to appropriate civil service eligibility on the basis of the number of
years of service to the barangay, pursuant to the rules and regulations issued by the
Civil Service Commission.

(c) Elective barangay officials shall have preference in appointments to any government
position or in any government-owned or controlled corporations, including their subsidiaries,
after their tenure of office, subject to the requisite qualifications and the provisions of the
immediately preceding paragraph.

(d) All duly appointed members of the barangay tanod brigades, or their equivalent, which
shall number not more than twenty (20) in each barangay, shall be granted insurance or
other benefits during their incumbency, chargeable to the barangay or the city or municipal
government to which the barangay belongs.

CHAPTER V
Appointive Barangay Officials

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, Qualification, Powers and Duties. -

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

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

(c) No person shall be appointed barangay treasurer if he is a sangguniang barangay

member, a government employee, or a relative of the punong barangay within the fourth civil
degree of consanguinity or affinity.
 (d) The barangay treasurer shall be bonded in accordance with existing laws in an amount to
be determined by the sangguniang barangay but not exceeding Ten thousand pesos
(P10,000.00), premiums for which shall be paid by the barangay.

(e) The barangay treasurer shall:

(1) Keep custody of barangay funds and properties;

(2) Collect and issue official receipts for taxes, fees, contributions, monies, materials,
and all other resources accruing to the barangay treasury and deposit the same in
the account of the barangay as provided under Title Five, Book II of this Code;

(3) Disburse funds in accordance with the financial procedures provided in this Code;

(4) Submit to the punong barangay a statement covering the actual and estimates of
income and expenditures for the preceding and ensuing calendar years, respectively,
subject to the provisions of Title Five, Book II of this Code.

(5) Render a written accounting report of all barangay funds and property under his
custody at the end of each calendar year, and ensure that such report shall be made
available to the members of the barangay assembly and other government agencies
concerned;

(6) Certify as to the availability of funds whenever necessary;

(7) Plan and attend to the rural postal circuit within his jurisdiction; and

(8) Exercise such other powers and perform such other duties and functions as may
be prescribed by 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.

CHAPTER VI
Barangay Assembly

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.

CHAPTER VII
Katarungang Pambarangay

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 propio 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 complaint.

(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 the complaint with the punong barangay. The
prescriptive periods shall resume upon receipt by the complainant of the complainant 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 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.

CHAPTER VIII
Sangguniang Kabataan

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; and

(i) Exercise such other powers and perform such other duties and functions 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 sources intended for
the sangguniang kabataan and 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 member obtaining the next highest number of votes shall
assume the position of the chairman for the unexpired portion of the term.

(b) Where two (2) or more sangguniang kabataan members obtained the same next highest
number of votes, the other sangguniang kabataan members shall conduct an election to
choose the successor to the chairman from among the said members.

(c) After the vacancy shall have been filled, the sangguniang kabataan chairman shall call a
special election to complete the membership of said sanggunian. Such sangguniang
kabataan member shall hold office for the unexpired portion of the term of the vacant seat.
 (d) In case of suspension of the sangguniang kabataan chairman, the successor, as
determined in subsections (a) and (b) of this Section shall assume the position during the
period of such suspension.

CHAPTER IX
Pederasyon ng mga Sangguniang Kabataan

Section 436. Pederasyon ng mga 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 kabataan;

(4) in special metropolitan political subdivisions, pangmetropolitan 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 pambayan 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.

CHAPTER X
Linggo ng Kabataan

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.

TITLE II
THE MUNICIPALITY

CHAPTER I
Role and Creation of the Municipality

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.

CHAPTER II
Municipal Officials in General

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:

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

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

(3) Consolidate the functions of any office with those of another in the interest of
efficiency and economy.

(d) Unless otherwise provided herein, heads of departments and offices shall be appointed
by the municipal mayor with the concurrence of the majority of all the sangguniang bayan
members, subject to civil service law, rules and regulations. The sangguniang bayan shall
act on the appointment within fifteen (15) days from the date of its submission; otherwise, the
same shall be deemed confirmed.

(e) Elective and appointive municipal officials shall receive such compensation, allowances
and other emoluments as may be determined by law or ordinance, subject to the budgetary
 limitations on personal services as prescribed in Title Five, Book Two of this Code: Provided,
That no increase in compensation of the mayor, vice-mayor, and sangguniang bayan
members shall take effect until after the expiration of the full term of all the elective local
officials approving such increase.

CHAPTER III
Officials and Offices Common to All Municipalities

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
as offense in the performance of his official duties;

(xi) Examine the books, records and other documents of all offices, officials,
agents or employees of the municipality and in aid of his executive powers
and authority, require all national officials and employees stationed in or
assigned to the municipality to make available to him such books, records,
and other documents in their custody, except those classified by law as
confidential;

(xii) Furnish copies of executive orders issued by him to the provincial

governor within seventy-two (72) hours after their issuance: Provided, That
municipalities of Metropolitan Manila Area and that of any metropolitan
political subdivision shall furnish copies of said executive orders to the
metropolitan authority council chairman and to the Office of the President;

(xiii) Visit component barangays of the municipality at least once every six (6)
months to deepen his understanding of problems and conditions therein,
listen and give appropriate counsel to local officials and inhabitants, inform
the component barangay officials and inhabitants of general laws and
ordinances which especially concern them, and otherwise conduct visits and
inspections to the end that the governance of the municipality will improve
the quality of life of the inhabitants;

(xiv) Act on leave applications of officials and employees appointed by him

and the commutation of the monetary value of leave credits according to law;

(xv) Authorize official trips outside of the municipality of municipal officials

and employees for a period not exceeding thirty (30) days;

(xvi) Call upon any national official or employee stationed in or assigned to

the municipality to 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

(xx) Submit to the provincial governor the following reports: an annual report
containing a summary of all matters pertaining to the management,
administration and development of the municipality and all information and
data relative to its political, social and economic conditions; and
supplemental reports when unexpected events and situations arise at any
time during the year, particularly when man-made or natural disasters or
calamities affect the general welfare of the municipality, province, region or
country. mayors of municipalities of the Metropolitan Manila Area and other
metropolitan political subdivisions shall submit said reports to their respective
metropolitan council chairmen and to the Office of the President;

(2) Enforce all laws and ordinances relative to the governance of the municipality and
the exercise of its corporate powers provided for under Section 22 of this Code
implement all approved policies, programs, projects, services and activities of the
municipality and, in addition to the foregoing, shall:

(i) Ensure that the acts of the municipality's component barangays and of its
officials and employees are within the scope of their prescribed powers,
functions, duties and responsibilities;

(ii) Call conventions, conferences, seminars or meetings of any elective and

appointive officials of the municipality, including provincial officials and
national officials and employees stationed in or assigned to the municipality
at such time and place and on such subject as he may deem important for
the promotion of the general welfare of the local government unit and its
inhabitants;

(iii) Issue such executive orders as are necessary for the proper enforcement
and execution of laws and ordinances;

(iv) Be entitled to carry the necessary firearm within his territorial jurisdiction;

(v) Act as the deputized representative of the National Police Commission,

formulate the peace and order plan of the municipality and upon its approval
implement the same and exercise general and operational control and
 supervision over the local police 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 gro-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; provide efficient and
effective property and supply management in the municipality; and protect
the funds, credits, rights and other properties of the municipality; and

(viii) Institute or cause to be instituted administrative or judicial proceedings

for violation of ordinances in the collection of taxes, fees or charges, and for
the recovery of funds and property; and cause the municipality to be
 defended against all suits to ensure that its interests, resources and rights
shall be adequately protected;

(4) Ensure the delivery of basic services and the provision of adequate facilities as
provided 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

(xii) Provide for group insurance or additional insurance coverage for

barangay officials, including members of barangay tanod brigades and other
service units, with public or private insurance companies, when the finances
of the municipal government allow said coverage.
(2) Generate and maximize the use of resources and revenues for the development
plans, program objectives and priorities of the municipality as provided for under
Section 18 of this Code with particular attention to agro-industrial development and
countryside growth and progress, and relative thereto, shall:

(i) Approve the annual and supplemental budgets of the municipal

government and appropriate funds for specific programs, projects, services
and activities of the municipality, or for other purposes not contrary to law, in
order to promote the general welfare of the municipality and its inhabitants;

(ii) Subject to the provisions of Book II of this Code and applicable laws and
upon the majority vote of all the members of the sangguniang bayan, enact
ordinances levying taxes, fees and charges, prescribing the rates thereof for
general and specific purposes, and granting tax exemptions, incentives or
reliefs;

(iii) Subject to the provisions of Book II of this Code and upon the majority
vote of all the members of the sangguniang bayan, authorize the municipal
mayor to negotiate and contract loans and other forms of indebtedness;

(iv) Subject to the provisions of Book II of this Code and applicable laws and
upon the majority vote of all the members of the sangguniang bayan, enact
ordinances authorizing the floating of bonds or other instruments of
indebtedness, for the purpose of raising funds to finance development
projects;

(v) Appropriate funds for the construction and maintenance or the rental of
buildings for the use of the municipality and, upon the majority vote of all the
members of the sangguniang bayan, authorize the municipal mayor to lease
to private parties such public buildings held in a proprietary capacity, subject
to existing laws, rules and regulations;

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

(vii) Adopt a comprehensive land use plan for the municipality: Provided, That
the formulation, adoption, or modification of said plan shall be in coordination
with the approved provincial comprehensive land use plan;

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

(ix) Enact integrated zoning ordinances in consonance with the approved

comprehensive land use plan, subject to existing laws, rules and regulations;
established fire limits or zones, particularly in populous centers; and regulate
the construction, repair or modification of buildings within said fire limits or
zones in accordance with the provisions of this Code;

(x) Subject to national law, process and approve subdivision plans for
residential, commercial, or industrial purposes and other development
purposes, and collect processing fees and other charges the proceeds of
 which shall accrue entirely to the municipality: Provided, however, That,
where approval by a national agency or office is required, said approval shall
not be withheld for more than thirty (30) days from receipt of the application.
Failure to act on the application within the period stated above shall be
deemed as approval thereof;

(xi) Subject to the provisions of Book II of this Code, grant the exclusive
privilege of constructing fish corrals or fish pens, or the taking or catching of
bangus fry, prawn fry or kawag-kawag of fry of any species or fish within the
municipal waters;

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

(xiii) Grant loans or provide grants to other local government units or to

national, provincial and municipal charitable, benevolent or educational
institutions: Provided, That said institutions are operated and maintained
within the municipality;

(xiv) Regulate the numbering of residential, commercial and other buildings;

and

(xv) Regulate the inspection, weighing and measuring of articles of

commerce.

(3) Subject to the provisions of Book II of this Code, grant franchises, enact
ordinances authorizing the issuance of permits or licenses, or enact ordinances
levying taxes, fees and charges upon such conditions and for such purposes
intended to promote the general welfare of the inhabitants of the municipality, and
pursuant to this legislative authority shall:

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

(ii) Regulate any business, occupation, or practice of profession or calling

which does not require government examination within the municipality and
the conditions under which the license for said business or practice of
profession may be issued or revoked;

(iii) Prescribe the terms and conditions under which public utilities owned by
the municipality shall be operated by the municipal government or leased to
private persons or entities, preferably cooperatives;

(iv) Regulate the display of and fix the license fees for signs, signboards, or
billboards at the place or places where the profession or business advertised
thereby is, in whole or in part, conducted;

(v) Any law to the contrary notwithstanding, authorize and license the
establishment, operation, and maintenance of cockpits, and regulate
 cockfighting and commercial breeding of gamecocks: Provided, That existing
rights should not be prejudiced;

(vi) Subject to the guidelines prescribed by the Department of Transportation

and Communications, regulate the operation of tricycles and grant franchises
for the operation thereof within the territorial jurisdiction of the municipality;

(vii) Upon approval by a majority vote of all the members of the sangguniang
bayan, grant a franchise to any person, partnership, corporation, or
cooperative to establish, construct, operate and maintain ferries, wharves,
markets or slaughterhouses, or such other similar activities within the
municipality as may be allowed by applicable laws: Provided, That,
cooperatives shall be given preference in the grant of such a franchise.

(4) Regulate activities relative to the use of land, buildings and structures within the
municipality in order to promote the general welfare and for said purpose shall:

(i) Declare, prevent or abate any nuisance;

(ii) Require that buildings and the premises thereof and any land within the
municipality be kept and maintained in a sanitary condition; impose penalties
for any violation thereof, or upon failure to comply with said requirement,
have the work done and require the owner, administrator or tenant concerned
to pay the expenses of the same; or require the filling up of any land or
premises to a grade necessary for proper sanitation;

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

(iv) Regulate the establishment, operation and maintenance of cafes,

restaurants, beerhouses, hotels, motels, inns, pension houses, lodging
houses, and other similar establishments, including tourist guides and
transports;

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

(vi) Regulate the establishment and provide for the inspection of steam
boilers or any heating device in buildings and the storage of inflammable and
highly combustible materials within the municipality;

(vii) Regulate the establishment, operation, and maintenance of

entertainment or amusement facilities, including theatrical performances,
circuses, 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;
 (viii) Provide for the impounding of stray animals; regulate the keeping of
animals in homes or as part of a business, and the slaughter, sale or
disposition of the same; and adopt measures to prevent and penalize cruelty
to animals; and

(ix) Regulate the establishment, operation, and maintenance of funeral

parlors and the burial or cremation of the dead, subject to existing laws, rules
and regulations.

(5) Approve ordinances which shall ensure the efficient and effective delivery of the
basic services and facilities as provided for under Section 17 of this Code, and in
addition to said services and facilities, shall:

(i) Provide for the establishment, maintenance, protection, and conservation

of communal forests and watersheds, tree parks, greenbelts, mangroves,
and other similar forest development projects;

(ii) Establish markets, slaughterhouses or animal corrals and authorize the

operation thereof, and regulate the construction and operation of private
markets, talipapas or other similar buildings and structures;

(iii) Authorize the establishment, maintenance and operation of ferries,

wharves, and other structures, and marine and seashore or offshore activities
intended to accelerate productivity;

(iv) Regulate the preparation and sale of meat, poultry, fish, vegetables,
fruits, fresh dairy products, and other foodstuffs for public consumption;

(v) Regulate the use of streets, avenues, alleys, sidewalks, bridges, parks
and other public places and approve the construction, improvement, repair
and maintenance of the same; establish bus and vehicle stops and terminals
or regulate the use of the same by privately-owned vehicles which serve the
public; regulate garages and the operation of conveyances for hire; designate
stands to be occupied by public vehicles when not in use; regulate the putting
up of signs, signposts, awnings and awning posts on the streets; 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 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 disposal and prohibit littering and the placing or throwing of
garbage, refuse and other filth and wastes;

(xiv) Provide for the care of paupers, the aged, the sick, persons of unsound
mind, disabled persons, abandoned minors, juvenile delinquents, drug
dependents, abused children and other needy and disadvantaged persons,
particularly children and youth below eighteen (18) years of age and, subject
to availability of funds, establish and provide for the operation of centers and
facilities for said needy and disadvantaged persons;

(xv) Establish and provide for the maintenance and improvement of jails and
detention centers, institute sound jail management programs, and
appropriate funds for the subsistence of detainees and convicted prisoners in
the municipality;

(xvi) Establish a municipal council whose purpose is the promotion of culture

and the arts, coordinate with government agencies and non-governmental
organizations and, subject to the availability of funds, appropriate funds for
the support and development of the same; and

(xvi) Establish a municipal council for the 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).

TITLE III
THE CITY

CHAPTER I
Role and Creation of the City

Section 448. Role of the City. - The city, consisting of more urbanized and developed barangays.
serves as a general purpose government for the coordination and delivery of basic, regular, and
direct services and effective governance of the inhabitants within its territorial jurisdiction.

Section 449. Manner of Creation. - A city may be created, divided, merged, abolished, or its
boundary substantially altered, only by an Act of Congress, and subject to approval by a majority of
the votes cast in a plebiscite to be conducted by the COMELEC in the local government unit or units
directly affected. Except as may otherwise be provided in such Act. the plebiscite shall be held within
one hundred twenty (120) days from the date of its effectivity.

Section 450. Requisites for Creation.

(a) A municipality or a cluster of barangays may be converted into a component city if it has
an average annual income, as certified by the Department of Finance, of at least Twenty
million (P20,000,000.00) for the last two (2) consecutive years based on 1991 constant
prices, and if it has either of the following requisites:

(i) a contiguous territory of at least one hundred (100) square kilometers, as certified
by the Lands Management Bureau; or

(ii) a population of not less than one hundred fifty thousand (150,000) inhabitants, as
certified by the National Statistics Office:

Provided, That, the creation thereof shall not reduce the land area, population, and
income of the original unit or units at the time of said creation to less than the
minimum requirements prescribed herein.

(b) The territorial jurisdiction of a newly-created city shall be properly identified by metes and
bounds. The requirement on land area shall not apply where the city proposed to be created
is composed of one (1) or more islands. The territory need not be contiguous if it comprises
two (2) or more islands.
 (c) The average annual income shall include the income accruing to the general fund,
exclusive of specific funds, transfers, and non-recurring income.

Section 451. Cities, Classified. - A city may either be component or highly urbanized: Provided,
however, That the criteria established in this Code shall not affect the classification and corporate
status of existing cities.

component cities whose charters prohibit their voters from voting for provincial elective officials.
Independent component cities shall be independent of the province. Independent component cities
are those

Section 452. Highly Urbanized Cities.

(a) Cities with a minimum population of two hundred thousand (200,000) inhabitants as
certified by the National Statistics Office, and within the latest annual income of at least Fifty
Million Pesos (P50,000,000.00) based on 1991 constant prices, as certified by the city
treasurer, shall be classified as highly urbanized cities.

(b) Cities which do not meet above requirements shall be considered component cities of the
province in which they are geographically located. If a component city is located within the
boundaries of two (2) or more provinces, such city shall be considered a component of the
province of which it used to be a municipality.

(c) Qualified voters of highly urbanized cities shall remain excluded from voting for elective
provincial officials.

Unless otherwise provided in the Constitution or this Code, qualified voters of independent
component cities shall be governed by their respective charters, as amended, on the
participation of voters in provincial elections.

Qualified voters of cities who acquired the right to vote for elective provincial officials prior to
the classification of said cities as highly-urbanized after the ratification of the Constitution and
before the effectivity of this Code, shall continue to exercise such right.

Section 453. Duty to Declare Highly Urbanized Status. - It shall be the duty of the President to
declare a city as highly urbanized within thirty (30) days after it shall have met the minimum
requirements prescribed in the immediately preceding section, upon proper application therefor and
ratification in a plebiscite by the qualified voters therein.

CHAPTER II
City Officials in General

Section 454. Officials of the City Government.

(a) There shall be in each city a mayor, a vice-mayor, sangguniang panlungsod members, a
secretary to the sangguniang panlungsod, a city treasurer, a city assessor, a city accountant,
a city budget officer, a city planning and development coordinator, a city engineer, a city
health officer, a city civil registrar, a city administrator, a city legal officer, a city veterinarian, a
city social welfare and development officer, and a city general services officer.
 (b) In addition thereto, the city mayor may appoint a city architect, a city information officer, a
city agriculturist, a city population officer, a city environment and natural resources officer,
and a city cooperatives officer.

The appointment of a city population officer shall be optional in the city: Provided, however,
That cities which have existing population offices shall continue to maintain such offices for a
period of five (5) years from the date of the effectivity of this Code, after which said offices
shall become optional.

(c) The sangguniang panlungsod may:

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

(2) Create such other offices as may be necessary to carry out the purposes of the
city government; or

(3) Consolidate the functions of any office with those of another in the interest of
efficiency and economy.

(d) Unless otherwise provided herein, heads of departments and offices shall be appointed
by the city mayor with the concurrence of the majority of all the sangguniang panlungsod
members, subject to civil service law, rules and regulations. The sangguniang panlungsod
shall act on the appointment within fifteen (15) days from the date of its submission,
otherwise the same shall be deemed confirmed.

(e) Elective and appointive city officials shall receive such compensation, allowances, and
other emoluments as may be determined by law or ordinance, subject to the budgetary
limitations on personal services prescribed under Title Five, Book II of this Code: Provided,
That, no increase in compensation of the mayor, vice-mayor and sangguniang panlungsod
members shall take effect until after the expiration of the full term of the said local officials
approving such increase.

CHAPTER III
Officials and Offices Common to All Cities

ARTICLE I
The City Mayor

Section 455. Chief Executive; Powers, Duties and Compensation.

(a) The city mayor, as chief executive of the city government, shall exercise such powers and
perform such duties and functions as provided by this Code and other laws.

(b) For efficient, effective and economical governance the purpose of which is the general
welfare of the city and its inhabitants pursuant to Section 16 of this Code, the city mayor
shall:

(1) Exercise general supervision and control over all programs, projects, services,
and activities of the city government. and in this connection, shall:
(i) Determine the guidelines of city policies and be responsible to the
sangguniang panlungsod for the program of government;

(ii) Direct the formulation of the city development plan, with the assistance of
the city development council, and upon approval thereof by the sangguniang
panlungsod, implement the same;

(iii) Present the program of government and propose policies and projects for
the consideration of the sangguniang panlungsod at the opening of the
regular session of the sangguniang panlungsod every calendar year and as
often as may be deemed necessary as the general welfare of the inhabitants
and the needs of the city government may require;

(iv) Initiate and propose legislative measures to the sangguniang panlungsod

and as often as may be deemed necessary, provide such information and
data needed or requested by said sanggunian in the performance of its
legislative functions;

(v) Appoint all officials and employees whose salaries and wages are wholly
or mainly paid out of city funds and whose appointments are not otherwise
provided for in this Code, as well as those he may be authorized by law to
appoint;

(vi) Represent the city in all its business transactions and sign in its behalf all
bonds, contracts, and obligations, and such other documents upon authority
of the sangguniang panlungsod or pursuant to law or ordinance;

(vii) Carry out such emergency measures as may be necessary during and in
the aftermath of man-made and natural disasters and calamities;

(viii) Determine the time, manner and place of payment of salaries or wages
of the officials and employees of the city, in accordance with law or
ordinance;

(ix) Allocate and assign office space to city and other officials and employees
who, by law or ordinance, are entitled to such space in the city hall and other
buildings owned or leased by the city government;

(x) Ensure that all executive officials and employees of the city faithfully
discharge their duties and functions as provided by law and this Code, and
cause to be instituted administrative or judicial proceedings against any
official or employee of the city who may have committed an offense in the
performance of his official duties;

(xi) Examine the books, records and other documents of all offices, officials,
agents or employees of the city and, in aid of his executive powers and
authority, require all national officials and employees stationed in or assigned
to the city to make available to him such books, records, and other
documents in their custody, except those classified by law as confidential;
(xii) Furnish copies of executive orders issued by him, to the provincial
governor in the case of component city mayors, to the Office of the President
in the case of highly-urbanized city mayors and to their respective
metropolitan council chairmen in the case of mayors of cities in the
Metropolitan Manila Area and other metropolitan political subdivisions, within
seventy-two (72) hours after their issuances;

(xiii) Visit component barangays of the city at least once every six (6) months
to deepen his understanding of problems and conditions, listen and give
appropriate counsel to, local officials and inhabitants, inform the component
barangay officials and inhabitants of general laws and ordinances which
especially concern them, and otherwise conduct visits and inspections to
ensure that the governance of the city will improve the quality of life of the
inhabitants;

(xiv) Act on leave applications of officials and employees appointed by him

and the commutation of the monetary value of their leave credits in
accordance with law;

(xv) Authorize official trips of city officials and employees outside of the city
for a period not exceeding thirty (30) days;

(xvi) Call upon any national official or employee stationed in or assigned to

the city to advise him on matters affecting the city and to make
recommendations thereon; coordinate with said official or employee in the
formulation and implementation of plans, programs and projects; and, when
appropriate, initiate an administrative or judicial action against a national
government official or employee who may have committed an offense in the
performance of his official duties while stationed in or assigned to the city;

(xvii) Authorize payment for medical care, necessary transportation,

subsistence, hospital or medical fees of city officials and employees who are
injured while in the performance of their duties and functions, subject to
availability of funds;

(xviii) Solemnize marriage, any provision of law to the contrary

notwithstanding;

(xix) Conduct an annual palarong panlungsod, which shall feature traditional

sports and disciplines included in national and international games, in
coordination with the Department of Education, Culture and Sports; and

(xx) Submit to the provincial governor, in case of component cities; to the

Office of the President, in the case of highly-urbanized cities; to their
respective metropolitan authority council chairmen and to the Office of the
President, in case of cities of the Metropolitan Manila Area and other
metropolitan political subdivisions, the following reports: an annual report
containing a summary of all matters pertinent to the management,
administration and development of the city and all information and data
relative to its political, social and economic conditions; and supplemental
reports when unexpected events and situations arise at any time during the
 year, particularly when man-made or natural disasters or calamities affect the
general welfare of the city, province, region or country;

(2) Enforce all laws and ordinances relative to the governance of the city and in the
exercise of the appropriate corporate powers provided for under Section 22 of this
Code, implement all approved policies, programs, projects, services and activities of
the city and, in addition to the foregoing, shall:

(i) Ensure that the acts of the city's component barangays and of its officials
and employees are within the scope of their prescribed powers, duties and
functions;

(ii) Call conventions, conferences, seminars, or meetings of any elective and

appointive officials of the city, including provincial officials and national
officials and employees stationed in or assigned to the city, at such time and
place and on such subject as he may deem important for the promotion of
the general welfare of the local government unit and its inhabitants;

(ii) Issue such executive orders for the faithful and appropriate enforcement
and execution of laws and ordinances;

(iv) Be entitled to carry the necessary firearm within his territorial jurisdiction;

(v) Act as the deputized representative of the National Police Commission,

formulate the peace and order plan of the city and upon its approval,
implement the same; and as such exercise general and operational control
and supervision over the local police forces in the city, in accordance with
R.A. No. 6975;

(vi) Call upon the appropriate law enforcement agencies to suppress

disorder, riot, lawless violence, rebellion or sedition, or to apprehend violators
of the law when public interest so requires and the city police forces are
inadequate to cope with the situations or the violators;

(3) Initiate and maximize the generation of resources and revenues, and apply the
same to the implementation of development plans, program objectives and priorities
as provided for under Section 18 of this Code, particularly those resources and
revenues programmed for agro-industrial development and countryside growth and
progress and, relative thereto, shall:

(i) Require each head of an office or department to prepare and submit an

estimate of appropriations for the ensuing calendar year, in accordance with
the budget preparations process under Title Five, Book II of this Code;

(ii) Prepare and submit to the sanggunian for approval the executive and
supplemental budgets of the city for the ensuing calendar year in the manner
provided for under Title Five, Book II of this Code;

(iii) Ensure that all taxes and other revenues of the city are collected, and that
city funds are applied to the payment of expenses and settlement of
obligations of the city, in accordance with law or ordinance;
 (iv) Issue licenses and permits and suspend or revoke the same for any
violation of the conditions upon which said licenses or permits had been
issued, pursuant to law or ordinance;

(v) Issue permits, without need of approval therefor from any national agency,
for the holding of activities for any charitable or welfare purpose, excluding
prohibited games of chance or shows contrary to law, public policy and public
morals;

(vi) Require owners of illegally constructed houses, buildings or other

structures to obtain the necessary permit, subject to such fines and penalties
as may be imposed by law or ordinance, or to make necessary changes in
the construction of the same when said construction violates any law or
ordinance, or to order the demolition or removal of said house, building or
structure within the period prescribed by law or ordinance;

(vii) Adopt adequate measures to safeguard and conserve land, mineral,

marine, forest, and other resources of the city; provide efficient and effective
property and supply management in the city; and protect the funds, credits,
rights and other properties of the city; and

(viii) Institute or cause to be instituted administrative or judicial proceedings

for violation of ordinances in the collection of taxes, fees or charges, and for
the recovery of funds and property; and cause the city to be defended
against all suits to ensure that its interests, resources and rights shall be
adequately protected;

(4) Ensure the delivery of basic services and the provision of adequate facilities as
provided for under Section 17 of this Code and, in addition thereto, shall:

(i) Ensure that the construction and repair of roads and highways funded by
the national government shall be, as far as practicable, carried out in a
spatially contiguous manner and in coordination with the construction and
repair of the roads and bridges of the city, and in the case of component
cities, of the city and of the province; and

(ii) Coordinate the implementation of technical services, including public

works and infrastructure programs, rendered by national offices in the case of
highly urbanized and independent component cities, and by national and
provincial offices in the case of component cities; and

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

(c) During his incumbency, the city mayor shall hold office in the city hall.

(d) The city mayor shall receive a minimum monthly compensation corresponding to Salary
Grade Thirty (30) as prescribed under R.A. No. 6758 and the implementing guidelines issued
pursuant thereto.
 ARTICLE II
The City Vice-Mayor

Section 456. Powers, Duties and Compensation.

(a) The city vice-mayor shall:

(1) Be the presiding officer of the sangguniang panlungsod and sign all warrants
drawn on the city treasury for all expenditures appropriated for the operation of the
sangguniang panlungsod;

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

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

(4) Exercise the powers and perform the duties and functions of the city mayor in
cases of temporary vacancy as provided for in Section 46, Book I of this Code; and

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

(b) The city vice-mayor shall receive a monthly compensation corresponding to Salary Grade
twenty eight (28) for a highly urbanized city and Salary Grade twenty-six (26) for a
component city, as prescribed under R.A. No. 6758 and the implementing guidelines issued
pursuant thereto.

ARTICLE III
The Sangguniang Panlungsod

Section 457. Composition

(a) The sangguniang panlungsod, the legislative body of the city, shall be composed of the
city vice-mayor as presiding officer, the regular sanggunian members, the president of the
city chapter of the liga ng mga barangay, the president of the panlungsod na pederasyon ng
mga sangguniang kabataan, and the sectoral representatives, as members.

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

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

Section 458. Powers, Duties, Functions and Compensation.

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

(1) Approve ordinances and pass resolutions necessary for an efficient and effective
city government, and in this connection, shall:

(i) Review all ordinances approved by the sangguniang barangay and

executive orders issued by the punong barangay to determine whether these
are within the scope of the prescribed powers of the sanggunian and of the
punong barangay;

(ii) Maintain peace and order by enacting measures to prevent and suppress
lawlessness, disorder, riot, violence, rebellion or sedition and impose
penalties for violation of said ordinances;

(iii) Approve ordinances imposing a fine not exceeding Five thousand pesos
(P5,000.00) or an imprisonment for a period not exceeding one (1) year, or
both in the discretion of the court, for the violation of a city ordinance;

(iv) Adopt measures to protect the inhabitants of the city from the harmful
effects of man-made or natural disasters and calamities, and to provide relief
services and assistance for victims during and in the aftermath of said
disasters or calamities and their return to productive livelihood following said
events;

(v) Enact ordinances intended to prevent, suppress and impose appropriate

penalties for habitual drunkenness in public places, vagrancy, mendicancy,
prostitution, establishment and maintenance of houses of ill repute, gambling
and other prohibited games of chance, fraudulent devices and ways to obtain
money or property, drug addiction, maintenance of drug dens, drug pushing,
juvenile delinquency, the printing, distribution or exhibition of obscene or
pornographic materials or publications, and such other activities inimical to
the welfare and morals of the inhabitants of the city.

(vi) Protect the environment and impose appropriate penalties for acts which
endanger the environment, such as dynamite fishing and other forms of
destructive fishing, illegal logging and smuggling of logs, smuggling of natural
resources products and of endangered species of flora and fauna, slash and
burn farming, and such other activities which result in pollution, acceleration
of eutrophication of rivers and lakes, or of ecological imbalance;

(vii) Subject to the provisions of this Code and pertinent laws, determine the
powers and duties of officials and employees of the city;

(viii) Determine the positions and the salaries, wages, allowances and other
emoluments and benefits of officials and employees paid wholly or mainly
from city funds and provide for expenditures necessary for the proper
conduct of programs, projects, services, and activities of the city government;
 (ix) Authorize the payment of compensation to a qualified person not in the
government service who fills up a temporary vacancy or grant honorarium to
any qualified official or employee designated to fill a temporary vacancy in a
concurrent capacity, at the rate authorized by law;

(x) Provide a mechanism and the appropriate funds therefor, to ensure the
safety and protection of all city government property, public documents, or
records such as those relating to property inventory, land ownership, records
of births, marriages, deaths, assessments, taxation, accounts, business
permits, and such other records and documents of public interest in the
offices and departments of the city government;

(xi) When the finances of the city government allow, provide for additional
allowances and other benefits to judges, prosecutors, public elementary and
high school teachers, and other national government officials stationed in or
assigned to the city;

(xii) Provide legal assistance to barangay officials who, in the performance of

their official duties or on the occasion thereof, have to initiate judicial
proceedings or defend themselves against legal action; and

(xiii) Provide for group insurance or additional insurance coverage for all
barangay officials, including members of barangay tanod brigades and other
service units, with public or private insurance companies, when the finances
of the city government allow said coverage;

(2) Generate and maximize the use of resources and revenues for the development
plans, program objectives and priorities of the city as provided for under Section 18
of this Code, with particular attention to agro-industrial development and city-wide
growth and progress, and relative thereto, shall:

(i) Approve the annual and supplemental budgets of the city government and
appropriate funds for specific programs, projects, services and activities of
the city, or for other purposes not contrary to law, in order to promote the
general welfare of the city and its inhabitants;

(ii) Subject to the provisions of Book II of this Code and applicable laws and
upon the majority vote of all the members of the sangguniang panlungsod,
enact ordinances levying taxes, fees and charges, prescribing the rates
thereof for general and specific purposes, and granting tax exemptions,
incentives or reliefs;

(iii) Subject to the provisions of Book II of this Code and upon the majority
vote of all the members of the sangguniang panlungsod, authorize the city
mayor to negotiate and contract loans and other forms of indebtedness;

(iv) Subject to the provisions of Book II of this Code and applicable laws and
upon the majority vote of all the members of the sangguniang panlungsod,
enact ordinances authorizing the floating of bonds or other instruments of
indebtedness, for the purpose of raising funds to finance development
projects;
(v) Appropriate funds for the construction and maintenance or the rental of
buildings for the use of the city; and, upon the majority vote of all the
members of the sangguniang panlungsod, authorize the city mayor to lease
to private parties such public buildings held in a proprietary capacity, subject
to existing laws, rules and regulations;

(vi) Prescribe reasonable limits and restraints on the use of property within
the jurisdiction of the city;

(vii) Adopt a comprehensive land use plan for the city: Provided, That in the
case of component cities, the formulation, adoption or modification of said
plan shall be in coordination with the approved provincial comprehensive
land use plan;

(viii) Reclassify land within the jurisdiction of the city, subject to the pertinent
provisions of this Code;

(ix) Enact integrated zoning ordinances in consonance with the approved

comprehensive land use plan, subject to existing laws, rules and regulations;
establish fire limits or zones, particularly in populous centers; and regulate
the construction, repair or modification of buildings within said fire limits or
zones in accordance with the provisions of the Fire Code;

(x) Subject to national law, process and approve subdivision plans for
residential, commercial, or industrial purposes and other development
purposes, and to collect processing fees and other charges, the proceeds of
which shall accrue entirely to the city: Provided, however, That where
approval of a national agency or office is required, said approval shall not be
withheld for more than thirty (30) days from receipt of the application. Failure
to act on the application within the period stated above shall be deemed as
approval thereof;

(xi) Subject to the provisions of Book II of this Code, grant the exclusive
privilege of constructing fish corrals or fish pens, or the taking or catching of
bangus fry, prawn fry or kawag-kawag, or fry of any species or fish within the
city waters;

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

(xiii) Grant loans or provide grants to other local government units or to

national, provincial, and city charitable, benevolent or educational institutions:
Provided, That, said institutions are operated and maintained within the city;

(xiv) Regulate the numbering of residential, commercial and other buildings;

and

(xv) Regulate the inspection, weighing and measuring of articles of

commerce.
(3) Subject to the provisions of Book II of this Code, enact ordinances granting
franchises and authorizing the issuance of permits or licenses, upon such conditions
and for such purposes intended to promote the general welfare of the inhabitants of
the city and pursuant to this legislative authority shall:

(i) Fix and impose reasonable fees and charges for all services rendered by
the city government to private persons or entities;

(ii) Regulate or fix license fees for any business or practice of profession
within the city and the conditions under which the license for said business or
practice of profession may be revoked and enact ordinances levying taxes
thereon;

(iii) Provide for and set the terms and conditions under which public utilities
owned by the city shall be operated by the city government, and prescribe
the conditions under which the same may be leased to private persons or
entities, preferably cooperatives;

(iv) Regulate the display of and fix the license fees for signs, signboards, or
billboards at the place or places where the profession or business advertised
thereby is, in whole or in part, conducted;

(v) Any law to the contrary notwithstanding, authorize and license the
establishment, operation, and maintenance of cockpits, and regulate
cockfighting and commercial breeding of gamecocks: Provided, That existing
rights should not be prejudiced;

(vi) Subject to the guidelines prescribed by the Department of Transportation

and Communications, regulate the operation of tricycles and grant franchises
for the operation thereof within the territorial jurisdiction of the city;

(vii) Upon approval by a majority vote of all the members of the sangguniang
panlungsod: grant a franchise to any person, partnership, corporation, or
cooperative to do business within the city; establish, construct, operate and
maintain ferries, wharves, markets or slaughterhouses; or undertake such
other activities within the city as may be allowed by existing laws: Provided,
That, cooperatives shall be given preference in the grant of such a franchise.

(4) Regulate activities relative to the use of land, buildings and structures within the
city in order to promote the general welfare and for said purpose shall:

(i) Declare, prevent or abate any nuisance;

(ii) Require that buildings and the premises thereof and any land within the
city be kept and maintained in a sanitary condition; impose penalties for any
violation thereof; or, upon failure to comply with said requirement, have the
work done at the expense of the owner, administrator or tenant concerned; or
require the filling up of any land or premises to a grade necessary for proper
sanitation;
 (iii) Regulate the disposal of clinical and other wastes from hospitals, clinics
and other similar establishments;

(iv) Regulate the establishment, operation and maintenance of cafes,

restaurants, beerhouses, hotels, motels, inns, pension houses, lodging
houses, and other similar establishments, including tourist guides and
transports;

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

(vi) Regulate the establishment and provide for the inspection of steam
boilers or any heating device in buildings and the storage of inflammable and
highly combustible materials within the city;

(vii) Regulate the establishment, operation, and maintenance of any

entertainment or amusement facilities, including theatrical performances,
circuses, billiard pools, public dancing schools, public dance halls, sauna
baths, massage parlors, and other places for entertainment or amusement;
regulate such other events or activities for amusement or entertainment,
particularly those which tend to disturb the community or annoy the
inhabitants, or require the suspension or suppression of the same; or, prohibit
certain forms of amusement or entertainment in order to protect the social
and moral welfare of the community;

(viii) Provide for the impounding of stray animals; regulate the keeping of
animals in homes or as part of a business, and the slaughter, sale or
disposition of the same; and adopt measures to prevent and penalize cruelty
to animals; and

(ix) Regulate the establishment, operation and maintenance of funeral parlors

and the burial or cremation of the dead, subject to existing laws, rules and
regulations.

(5) Approve ordinances which shall ensure the efficient and effective delivery of the
basic services and facilities as provided for under Section 17 of this Code, and in
addition to said services and facilities, shall:

(i) Provide for the establishment, maintenance, protection, and conservation

of communal forests and watersheds, tree parks, greenbelts, mangroves,
and other similar forest development projects;

(ii) Establish markets, slaughterhouses or animal corrals and authorize the

operation thereof by the city government; and regulate the construction and
operation of private markets, talipapas or other similar buildings and
structures;

(iii) Authorize the establishment, maintenance and operation by the city

government of ferries, wharves, and other structures intended to accelerate
productivity related to marine and seashore or offshore activities;
(iv) Regulate the preparation and sale of meat, poultry, fish, vegetables,
fruits, fresh dairy products, and other foodstuffs for public consumption;

(v) Regulate the use of streets, avenues, alleys, sidewalks, bridges, parks
and other public places and approve the construction, improvement repair
and maintenance of the same; establish bus and vehicle stops and terminals
or regulate the use of the same by privately-owned vehicles which serve the
public; regulate garages and the operation of conveyances for hire; designate
stands to be occupied by public vehicles when not in use; regulate the putting
up of signs, signposts, awnings and awning posts on the streets; and provide
for the lighting, cleaning and sprinkling of streets; and public places;

(vi) Regulate traffic on all streets and bridges; prohibit encroachments or

obstacles thereon, and when necessary in the interest of public welfare,
authorize the removal or encroachments and illegal constructions in public
places;

(vii) Subject to existing laws, establish and provide for the maintenance,
repair and operation of an efficient waterworks system to supply water for the
inhabitants and to purify the source of the water supply; regulate the
construction, maintenance, repair and use of hydrants, pumps, cisterns and
reservoirs; protect the purity and quantity of the water supply of the city and,
for this purpose, extend the coverage of appropriate ordinances over all
territory within the drainage area of said water supply and within one hundred
(100) meters of the reservoir, conduit, canal, aqueduct, pumping station, or
watershed used in connection with the water service; and regulate the
consumption, use or wastage of water and fix and collect charges therefor;

(viii) Regulate the drilling and excavation of the ground for the laying of water,
gas, sewer, and other pipes and the construction, repair and maintenance of
public drains, sewers, cesspools, tunnels and similar structures; regulate the
placing of poles and the use of crosswalks, curbs, and gutters; adopt
measures to ensure public safety against open canals, manholes. live wires
and other similar hazards to life and property; and regulate the construction
and use of private water closets, privies and other similar structures in
buildings and homes;

(ix) Regulate the placing, stringing, attaching, installing, repair and

construction of all gas mains, electric, telegraph and telephone wires,
conduits, meters and other apparatus; and provide for the correction,
condemnation or removal of the same when found to be dangerous,
defective, or otherwise hazardous to the welfare of the inhabitants;

(x) Subject to the availability of funds and to existing laws, rules and
regulations, establish and provide for the operation of vocational and
technical schools and similar post-secondary institutions and, with the
approval of the Department of Education, Culture and Sports and subject to
existing law on tuition fees, fix and collect reasonable tuition fees and other
school charges in educational institutions supported by the city government;

(xi) Establish a scholarship fund for the poor but deserving students in
schools located within its jurisdiction or for students residing within the city;
 (xii) Approve measures and adopt quarantine regulations to prevent the
introduction and spread of diseases;

(xiii) Provide for an efficient and effective system of solid waste and garbage
collection and disposal; prohibit littering and the placing or throwing of
garbage, refuse and other filth and wastes;

(xiv) Provide for the care of disabled persons, paupers, the aged, the sick,
persons of unsound mind, abandoned minors, juvenile delinquents, drug
dependents, abused children and other needy and disadvantaged persons,
particularly children and youth below eighteen (18) years of age; and subject
to availability of funds, establish and provide for the operation of centers and
facilities for said needy and disadvantaged persons;

(xv) Establish and provide for the maintenance and improvement of jails and
detention centers, institute a sound jail management program, and
appropriate funds for the subsistence of detainees and convicted prisoners in
the city;

(xvi) Establish a city council whose purpose is the promotion of culture and
the arts, coordinate with government agencies and non-governmental
organizations and, subject to the availability of funds, appropriate funds for
the support and development of the same; and

(xvii) Establish a city council for the elderly which shall formulate policies and
adopt measures mutually beneficial to the elderly and to the community;
provide incentives for non-governmental agencies and entities and, subject to
the availability of funds, appropriate funds to support programs and projects
for the benefit of the elderly; and

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

(b) The members of the sangguniang panlungsod of component cities shall receive a
minimum monthly compensation corresponding to Salary Grade twenty-five (25) and
members of the sangguniang panlungsod of highly-urbanized cities shall receive a minimum
monthly compensation corresponding to Salary Grade twenty-seven (27), as prescribed
under R.A. 6758 and the implementing guidelines issued pursuant thereto.

TITLE IV
THE PROVINCE

CHAPTER I
Role and Creation of the Province

Section 459. Role of the Province. - The province, composed of cluster of municipalities, or
municipalities and component cities, and as a political and corporate unit of government, serves as
dynamic mechanism for developmental processes and effective governance of local government
units within its territorial jurisdiction.
Section 460. Manner of Creation. - A province may be created, divided, merged, abolished, or its
boundary substantially altered, only by an Act of Congress and subject to approval by a majority of
the votes cast in a plebiscite to be conducted by the COMELEC in the local government unit or units
directly affected. The plebiscite shall be held within one hundred twenty (120) days from the date of
effectivity of said Act, unless otherwise provided therein.

Section 461. Requisites for Creation.

(a) A province may be created if it has an average annual income, as certified by the
Department of Finance, of not less than Twenty million pesos (P20,000,000.00) based on
1991 constant prices and either of the following requisites:

(i) a contiguous territory of at least two thousand (2,000) square kilometers, as

certified by the Lands Management Bureau; or

(ii) a population of not less than two hundred fifty thousand (250,000) inhabitants as
certified by the National Statistics Office:

Provided, That, the creation thereof shall not reduce the land area, population, and
income of the original unit or units at the time of said creation to less than the
minimum requirements prescribed herein.

(b) The territory need not be contiguous if it comprise two (2) or more islands or is separated
by a chartered city or cities which do not contribute to the income of the province.

(c) The average annual income shall include the income accruing to the general fund,
exclusive of special funds, trust funds, transfers and non-recurring income.

Section 462. Existing Sub-Provinces. - Existing sub-provinces are hereby converted into regular
provinces upon approval by a majority of the votes cast in a plebiscite to be held in the said
subprovinces and the original provinces directly affected. The plebiscite shall be conducted by the
COMELEC simultaneously with the national elections following the effectivity of this Code.

The new legislative districts created as a result of such conversion shall continue to be represented
in Congress by the duly-elected representatives of the original districts out of which said new
provinces or districts were created until their own representatives shall have been elected in the next
regular congressional elections and qualified.

The incumbent elected officials of the said subprovinces converted into regular provinces shall
continue to hold office until June 30, 1992. Any vacancy occurring in the offices occupied by said
incumbent elected officials, or resulting from expiration of their terms of office in case of a negative
vote in the plebiscite results, shall be filled by appointment by the President. The appointees shall
hold office until their successors shall have been elected in the regular local elections following the
plebiscite mentioned herein and qualified. After effectivity of such conversion, the President shall fill
up the position of governor of the newly-created province through appointment if none has yet been
appointed to the same as hereinbefore provided, and shall also appoint a vice-governor and the
other members of the sangguniang panlalawigan, all of whom shall likewise hold office until their
successors shall have been elected in the next regular local elections and qualified.
All qualified appointive officials and employees in the career service of the said subprovinces at the
time of their conversion into regular provinces shall continue in office in accordance with civil service
law, rules and regulations.

CHAPTER II
Provincial Officials in General

Section 463. Officials of the Provincial Government.

(a) There shall be in each province a governor, a vice-governor, members of the

sangguniang panlalawigan, a secretary to the sangguniang panlalawigan, a provincial
treasurer, a provincial assessor, a provincial accountant, a provincial engineer, a provincial
budget officer, a provincial planning and development coordinator, a provincial legal officer, a
provincial administrator, a provincial health officer, a provincial social welfare and
development officer, a provincial general services officer, a provincial agriculturist, and a
provincial veterinarian.

(b) In addition thereto, the governor may appoint a provincial population officer, a provincial
natural resources and environment officer, a provincial cooperative officer, a provincial
architect, and a provincial information officer.

The appointment of a provincial population officer shall be optional in the province: Provided,
however, That provinces which have existing population offices shall continue to maintain
such offices for a period of five (5) years from the date of the effectivity of this Code, after
which said offices shall become optional.

(c) The sangguniang panlalawigan may:

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

(2) Create such other offices as may be necessary to carry out the purposes of the
provincial government; or

(3) Consolidate the functions of any office with those of another in the interest of
efficiency and economy;

(d) Unless otherwise provided herein, heads of departments and offices shall be
appointed by the governor with the concurrence of the majority of all the
sangguniang panlalawigan members, subject to civil service law, rules and
regulations. The sangguniang panlalawigan shall act on the appointment within
fifteen (15) days from the date of its submission; otherwise the same shall be
deemed confirmed;

(e) Elective and appointive provincial officials shall receive such compensation, allowances,
and other emoluments as may be determined by law or ordinance, subject to the budgetary
limitations on personal services prescribed under Title Five, Book II of this Code: Provided,
That, no increase in compensation shall take effect until after the expiration of the full term of
all the elective officials approving such increase.

Section 464. Residence and Office. - During the incumbency of the governor, he shall have his
official residence in the capital of the province. All elective and appointive provincial officials shall
hold office in the provincial capital: Provided, That, upon resolution of the sangguniang panlalawigan,
elective and appointive provincial officials may hold office in any component city or municipality
within the province for a period of not more than seven (7) days for any given month.

CHAPTER III
Officials and Offices Common to All Provinces

ARTICLE I
The Provincial Governor

Section 465. The Chief Executive: Powers, Duties, Functions, and Compensation.

(a) The provincial governor, as the chief executive of the provincial government, shall
exercise such powers and perform such duties and functions as provided by this Code and
other laws.

(b) For efficient, effective and economical governance the purpose of which is the general
welfare of the province and its inhabitants pursuant to Section 16 of this Code, the provincial
governor shall:

(1) Exercise general supervision and control over all programs, projects, services,
and activities of the provincial government, and in this connection, shall:

(i) Determine the guidelines of provincial policies and be responsible to the

sangguniang panlalawigan for the program of government;

(ii) Direct the formulation of the provincial development plan, with the
assistance of the provincial development council, and upon approval thereof
by the sangguniang panlalawigan, implement the same;

(iii) Present the program of government and propose policies and projects for
the consideration of the sangguniang panlalawigan at the opening of the
regular session of the sangguniang panlalawigan every calendar year and as
after as may be deemed necessary as the general welfare of the inhabitants
and the needs of the provincial government may require;

(iv) Initiate and propose legislative measures to the sangguniang

panlalawigan and as often as may be deemed necessary, provide such
information and data needed or requested by said sanggunian in the
performance of its legislative functions;

(v) Appoint all officials and employees whose salaries and wages are wholly
or mainly paid out of provincial funds and whose appointments are not
otherwise provided for in this Code, as well as those he may be authorized
by law to appoint;

(vi) Represent the province in all its business transactions and sign in its
behalf all bonds, contracts, and obligations, and such other documents upon
authority of the sangguniang panlalawigan or pursuant to law or ordinance;
(vii) Carry out such emergency measures as may be necessary during and in
the aftermath of man-made and natural disasters and calamities;

(viii) Determine the time, manner and place of payment of salaries or wages
of the officials and employees of the province, in accordance with law or
ordinance;

(ix) Allocate and assign office space to provincial and other officials and
employees who, by law or ordinance, are entitled to such space in the
provincial capitol and other buildings owned or leased by the provincial
government;

(x) Ensure that all executive officials and employees of the province faithfully
discharge their duties and functions as provided by law and this Code, and
cause to be instituted administrative or judicial proceedings against any
official or employee of the province who may have committed an offense in
the performance of his official duties;

(xi) Examine the books, records and other documents of all offices, officials,
agents or employees of the province and, in aid of his executive powers and
authority, require all national officials and employees stationed in the province
to make available to him such books, records, and other documents in their
custody, except those classified by law as confidential;

(xii) Furnish copies of executive orders issued by him to the Office of the
President within seventy-two (72) hours after their issuance;

(xiii) Visit component cities and municipalities of the province at least once
every six (6) months to deepen his understanding of problems and
conditions, listen and give appropriate counsel to local officials and
inhabitants, inform the officials and inhabitants of component cities and
municipalities of general laws and ordinances which especially concern them,
and otherwise conduct visits and inspections to ensure that the governance
of the province will improve the quality of life of the inhabitants;

(xiv) Act on leave applications of officials and employees appointed by him

and the commutation of the monetary value of leave credits in accordance
with law;

(xv) Authorize official trips of provincial officials and employees outside of the
province for a period not exceeding thirty (30) days;

(xvi) Call upon any national official or employee stationed in or assigned to

the province to advise him on matters affecting the province and to make
recommendations thereon; coordinate with said official or employee in the
formulation and implementation of plans, programs and projects; and when
appropriate, initiate an administrative or judicial action against a national
government official or employee who may have committed an offense in the
performance of his official duties while stationed in or assigned to the
province;
 (xvii) Authorize payment for medical care, necessary transportation,
subsistence, hospital or medical fees of provincial officials and employees
who are injured while in the performance of their official duties and functions,
subject to availability of funds;

(xviii) Represent the province in inter-provincial or regional sports councils or

committees, and coordinate the efforts of component cities or municipalities
in the regional or national palaro or sports development activities;

(xix) Conduct an annual palarong panlalawigan, which shall feature

traditional sports and disciplines included in national and international games
in coordination with the Department of Education, Culture and Sports; and

(xx) Submit to the Office of the President the following reports: an annual
report containing a summary of all matters pertinent to the management,
administration and development of the province and all information and data
relative to its political, social and economic conditions; and supplemental
reports when unexpected events and situations arise at any time during the
year, particularly when man-made or natural disasters or calamities affect the
general welfare of the province, region or country;

(2) Enforce all laws and ordinances relative to the governance of the province and
the exercise of the appropriate corporate powers provided for under Section 22 of
this Code, implement all approved policies, programs, projects, services and
activities of the province and, in addition to the foregoing, shall:

(i) Ensure that the acts of the component cities and municipalities of the
province and of its officials and employees are within the scope of their
prescribed powers, duties and functions;

(ii) Call conventions, conferences, seminars, or meetings of any elective and

appointive officials of the province and its component cities and
municipalities, including national officials and employees stationed in or
assigned to the province, at such time and place and on such subject as he
may deem important for the promotion of the general welfare of the province
and its inhabitants;

(iii) Issue such executive orders for the faithful and appropriate enforcement
and execution of laws and ordinances;

(iv) Be entitled to carry the necessary firearm within his territorial jurisdiction;

(v) In coordination with the mayors of component cities and municipalities

and the National Police Commission, formulate the peace and order plan of
the province and upon its approval, implement the same in accordance with
R.A. No. 6975;

(vi) Call upon the appropriate national law enforcement agencies to suppress
disorder, riot, lawless violence, rebellion or sedition or to apprehend violators
of the law when public interest so requires and the police forces of the
 component city or municipality where the disorder or violation is happening
are inadequate to cope with the situation or the violators;

(3) Initiate and maximize the generation of resources and revenues, and apply the
same to the implementation of development plans, program objectives and priorities
as provided for under Section 18 of this Code, particularly those resources and
revenues programmed for agro-industrial development and country-wide growth and
progress and, relative thereto, shall:

(i) Require each head of an office or department to prepare and submit an

estimate of appropriations for the ensuing calendar year, in accordance with
the budget preparation process under Title Five, Book II of this Code;

(ii) Prepare and submit to the sanggunian for approval the executive and
supplemental budgets of the province for the ensuing calendar year in the
manner provided for under Title Five, Book II of this Code;

(iii) Ensure that all taxes and other revenues of the province are collected,
and that provincial funds are applied to the payment of expenses and
settlement of obligations of the province, in accordance with law or
ordinance;

(iv) Issue licenses and permits and suspend or revoke the same for any
violation of the conditions upon which said licenses or permits had been
issued, pursuant to law or ordinance;

(v) Adopt adequate measures to safeguard and conserve land, mineral,

marine, forest and other resources of the province, in coordination with the
mayors of component cities and municipalities; provide efficient and effective
property and supply management in the province; and protect the funds,
credits, rights, and other properties of the province; and

(vi) Institute or cause to be instituted administrative or judicial proceedings for

violation of ordinances in the collection of taxes, fees or charges, and for the
recovery of funds and property, and cause the province to be defended
against all suits to ensure that its interests, resources and rights shall be
adequately protected.

(4) Ensure the delivery of basic services and the provision of adequate facilities as
provided for under Section 17 of this Code, and in addition thereto, shall:

(i) Ensure that the construction and repair of roads and highways
funded by the national government shall be, as far as practicable,
carried out in a spatially contiguous manner and in coordination with
the construction and repair of the roads and bridges of the province
and of its component cities and municipalities; and

(ii) Coordinate the implementation of technical services by national

offices for the province and its component cities and municipalities,
including public works and infrastructure programs of the provincial
government and its component cities and municipalities;
 (5) Exercise such other powers and perform such other duties and functions as may
be prescribed by law or ordinance.

(c) The provincial governor shall receive a minimum monthly compensation corresponding to
Salary Grade thirty (30) prescribed under R.A. No. 6758 and the implementing guidelines
issued pursuant thereto.

ARTICLE II
The Provincial Vice-Governor

Section 466. Powers, Duties, and Compensation.

(a) The vice-governor shall:

(1) Be the presiding officer of the sangguniang panlalawigan and sign all warrants
drawn on the provincial treasury for all expenditures appropriated for the operation of
the sangguniang panlalawigan;

(2) Subject to civil service law, rules and regulations, appoint all officials and
employees of the sangguniang panlalawigan, except those whose manner of
appointment is specially provided in this Code;

(3) Assume the office of the governor for the unexpired term of the latter in the event
of permanent vacancy as provided for in Section 44, Book I of this Code;

(4) Exercise the powers and perform the duties and functions of the governor in
cases of temporary vacancy as provided for in Section 46, Book I of this Code; and

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

(b) The vice-governor shall receive a monthly compensation corresponding to Salary Grade
twenty-eight (28) as prescribed under R.A. No. 6758 and the implementing guidelines issued
pursuant thereto.

ARTICLE III
The Sangguniang Panlalawigan

Section 467. Composition.

(a) The sangguniang panlalawigan, the legislative body of the province, shall be composed
of the provincial vice-governor as presiding officer, the regular sanggunian members, the
president of the provincial chapter of the liga ng mga barangay, the president of the
panlalawigang pederasyon ng mga sangguniang kabataan, the president of the provincial
federation of sanggunian members of municipalities and component cities and the sectoral
representatives, as members.

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

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

Section 468. Powers, Duties, Functions and Compensation.

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

(1) Approve ordinances and pass resolutions necessary for an efficient and effective
provincial government and, in this connection, shall:

(i) Review all ordinances approved by the sangguniang of component cities

and municipalities and executive orders issued by the mayors of said
component units to determine whether these are within the scope of the
prescribed powers of the sanggunian and of the mayor;

(ii) Maintain peace and order by enacting measures to prevent and suppress
lawlessness, disorder, riot, violence, rebellion or sedition and impose
penalties for the violation of said ordinances;

(iii) Approve ordinances imposing a fine not exceeding Five thousand pesos
(P5,000.00) or imprisonment not exceeding one (1) year, or both in the
discretion of the court, for the violation of a provincial ordinance;

(iv) Adopt measures to protect the inhabitants of the province from harmful
effects of man-made or natural disasters and calamities, and to provide relief
services and assistance for victims during and in the aftermath of said
disasters and calamities and their return to productive livelihood following
said events;

(v) Enact ordinances intended to prevent, suppress and impose appropriate

penalties for habitual drunkenness in public places, vagrancy, mendicancy,
prostitution, establishment and maintenance of houses of ill repute, gambling
and other prohibited games of chance, fraudulent devices and ways to obtain
money or property, drug addiction, maintenance of drug dens, drug pushing,
juvenile delinquency, the printing, distribution or exhibition of obscene or
pornographic materials or publications, and other activities inimical to the
welfare and morals of the inhabitants of the province;

(vi) Protect the environment and impose appropriate penalties for acts which
endanger the environment, such as dynamite fishing and other forms of
destructive fishing, illegal logging and smuggling of logs, smuggling of natural
resources products and of endangered species of flora and fauna, slash and
burn farming, and such other activities which result in pollution acceleration
of eutrophication of rivers and lakes, or of ecological imbalance;
 (vii) Subject to the provisions of this Code and pertinent laws, determine the
powers and duties of officials and employees of the province;

(viii) Determine the positions and the salaries, wages, allowances and other
emoluments and benefits of officials and employees paid wholly or mainly
from provincial funds and provide for expenditures necessary for the proper
conduct of programs, projects, services, and activities of the provincial
government;

(ix) Authorize the payment of compensation to a qualified person not in the

government service who fills up a temporary vacancy, or grant honorarium to
any qualified official or employee designated to fill a temporary vacancy in a
concurrent capacity, at the rate authorized by law;

(x) Provide a mechanism and the appropriate funds therefor, to ensure the
safety and protection of all provincial government property, public documents,
or records such as those relating to property inventory, land ownership,
records of births, marriages, deaths, assessments, taxation, accounts,
business permits, and such other records and documents of public interest in
the offices and departments of the provincial government; and

(xi) When the finances of the provincial government allow, provide for
additional allowances and other benefits to judges, prosecutors, public
elementary and high school teachers, and other national government officials
stationed or assigned to the province.

(2) Generate and maximize the use of resources and revenues for the development
plans, program objectives and priorities of the province as provided for under Section
18 of this Code, with particular attention to agro-industrial development and country-
wide growth and progress and relative thereto, shall:

(i) Enact the annual and supplemental appropriations of the provincial

government and appropriate funds for specific programs, projects, services
and activities of the province, or for other purposes not contrary to law, in
order to promote the general welfare of the province and its inhabitants;

(ii) Subject to the provisions of Book II of this Code and applicable laws and
upon the majority vote of all the members of the sangguniang panlalawigan,
enact ordinances levying taxes, fees and charges, prescribing the rates
thereof for general and specific purposes, and granting tax exemptions,
incentives or reliefs;

(iii) Subject to the provisions of Book II of this Code and applicable laws and
upon the majority vote of all the members of the sangguniang panlalawigan,
authorize the provincial governor to negotiate and contract loans and other
forms of indebtedness;

(iv) Subject to the provisions of Book II of this Code and applicable laws and
upon the majority vote of all the members of the sangguniang panlalawigan,
enact ordinances authorizing the floating of bonds or other instruments of
indebtedness, for the purpose of raising funds to finance development
projects;
 (v) Appropriate funds for the construction and maintenance or the rental of
buildings for the use of the province; and upon the majority vote of all the
members of the sangguniang panlalawigan, authorize the provincial governor
to lease to private parties such public buildings held in a proprietary capacity,
subject to existing laws, rules and regulations;

(vi) Prescribe reasonable limits and restraints on the use of property within
the jurisdiction of the province;

(vii) Review the comprehensive land use plans and zoning ordinances of
component cities and municipalities and adopt a comprehensive provincial
land use plan, subject to existing laws; and

(viii) Adopt measures to enhance the full implementation of the national

agrarian reform program in coordination with the Department of Agrarian
Reform;

(3) Subject to the provisions of Book II of this Code, grant franchises, approve the
issuance of permits or licenses, or enact ordinances levying taxes, fees and charges
upon such conditions and for such purposes intended to promote the general welfare
of the inhabitants of the province, and pursuant to this legislative authority, shall:

(i) Fix and impose reasonable fees and charges for all services rendered by
the provincial government to private persons or entities; and

(ii) Regulate and fix the license fees for such activities as provided for under
this Code.

(4) Approve ordinances which shall ensure the efficient and effective delivery of basic
services and facilities as provided for under Section 17 of this Code, and, in addition
to said services and facilities, shall:

(i) Adopt measures and safeguards against pollution and for the preservation
of the natural ecosystem in the province, in consonance with approved
standards on human settlements and environmental sanitation;

(ii) Subject to applicable laws, facilitate or provide for the establishment and
maintenance of waterworks system or district waterworks for supplying water
to inhabitants of component cities and municipalities;

(iii) Subject to the availability of funds and to existing laws, rules and
regulations, provide for the establishment and operation of vocational and
technical schools and similar post-secondary institutions; and, with the
approval of the Department of Education, Culture and Sports and subject to
existing laws on tuition fees, fix reasonable tuition fees and other school
charges in educational institutions supported by the provincial government;

(iv) Establish a scholarship fund for the poor but deserving students in
schools located within its jurisdiction or for students residing within the
province;
 (v) Approve measures and adopt quarantine regulations to prevent the
introduction and spread of diseases within its territorial jurisdiction;

(vi) Provide for the care of paupers, the aged, the sick, persons of unsound
mind, abandoned minors, abused children, disabled persons, juvenile
delinquents, drug dependents, and other needy and disadvantaged persons,
particularly children and youth below eighteen (18) years of age; subject to
availability of funds, establish and support the operation of centers and
facilities for said needy and disadvantaged persons; and facilitate efforts to
promote the welfare of families below the poverty threshold, the
disadvantaged, and the exploited;

(vii) Establish and provide the maintenance and improvement of jails and
detention centers, institute a sound jail management program, and
appropriate funds for the subsistence of detainees and convicted prisoners in
the province;

(viii) Establish a provincial council whose purpose is the promotion of culture

and the arts, coordinate with government agencies and non-governmental
organizations and, subject to the availability of funds, appropriate funds for
the support and development of the same;

(ix) Establish a provincial council for the elderly which shall formulate policies
and adopt measures mutually beneficial to the elderly and to the province;
and subject to the availability of funds, appropriate funds to support programs
and projects for the elderly; and provide incentives for non-governmental
agencies and entities to support the programs and projects of the elderly; and

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

(b) The members of the sangguniang panlalawigan shall receive a minimum monthly
compensation corresponding to Salary Grade twenty-seven (27) as prescribed under R.A.
No. 6758 and the implementing guidelines issued pursuant thereto.

TITLE V
APPOINTED LOCAL OFFICIALS COMMON TO ALL MUNICIPALITIES, CITIES AND PROVINCES

ARTICLE I
Secretary to the Sanggunian

Section 469. Qualifications, Powers and Duties.

(a) There shall be a secretary to the sanggunian who shall be a career official with the rank
and salary equal to a head of department or office.

(b) No person shall be appointed secretary to the sanggunian unless he is a citizen of the
Philippines, a resident of the local government unit concerned, of good moral character, a
holder of a college degree preferably in law, commerce or public administration from a
recognized college or university, and a first grade civil service eligible or its equivalent.
 The appointment of a secretary to the sanggunian is mandatory for provincial, city and
municipal governments.

(c) The secretary to the sanggunian shall take charge of the office of the secretary to the
sanggunian and shall:

(1) Attend meetings of the sanggunian and keep a journal of its proceedings;

(2) Keep the seal of the local government unit and affix the same with his signature
to all ordinances, resolutions, and other official acts of the sanggunian and present
the same to the presiding officer for his signature;

(3) Forward to the governor or mayor, as the case may be, for approval, copies of
ordinances enacted by the sanggunian and duly certified by the presiding officer, in
the manner provided in Section 54 under Book I of this Code;

(4) Forward to the sanggunian panlungsod or bayan concerned, in the case of the
sangguniang barangay, and to the sangguniang panlalawigan concerned, in the case
of the sangguniang panlungsod of component cities or sangguniang bayan, copies of
duly approved ordinances, in the manner provided in Sections 56 and 57 under Book
I of this Code;

(5) Furnish, upon request of any interested party, certified copies of records of public
character in his custody, upon payment to the treasurer of such fees as may be
prescribed by ordinance;

(6) Record in a book kept for the purpose, all ordinances and resolutions enacted or
adopted by the sanggunian, with the dates of passage and publication thereof;

(7) Keep his office and all non-confidential records therein open to the public during
the usual business hours;

(8) Translate into the dialect used by the majority of the inhabitants all ordinances
and resolutions immediately after their approval, and cause the publication of the
same together with the original version in the manner provided under this Code; and

(9) Take custody of the local archives and, where applicable, the local library and
annually account for the same; and

(d) Exercise such other powers and perform such other duties and functions as may be
prescribed by law or ordinance relative to his position.

ARTICLE II
The Treasurer

Section 470. Appointment, Qualifications, Powers, and Duties.

(a) The treasurer shall be appointed by the Secretary of Finance from a list of at least three
(3) ranking, eligible recommendees of the governor or mayor, as the case may be, subject to
civil service law, rules and regulations.
 (b) The treasurer shall be under the administrative supervision of the governor or mayor, as
the case may be, to whom he shall report regularly on the tax collection efforts in the local
government unit;

(c) No person shall be appointed treasurer unless he is a citizen of the Philippines, a resident
of the local government unit concerned, of good moral character, a holder of a college
degree preferably in commerce, public administration or law from a recognized college or
university, and a first grade civil service eligible or its equivalent. He must have acquired
experience in treasury or accounting service for at least five (5) years in the case of the city
or provincial treasurer, and three (3) years in the case of municipal treasurer.

The appointment of a treasurer shall be mandatory for provincial, city and municipal
governments;

(d) The treasurer shall take charge of the treasury office, perform the duties provided for
under Book II of this Code, and shall:

(1) Advise the governor or mayor, as the case may be, the sanggunian, and other
local government and national officials concerned regarding disposition of local
government funds, and on such other matters relative to public finance;

(2) Take custody of and exercise proper management of the funds of the local
government unit concerned;

(3) Take charge of the disbursement of all local government funds and such other
funds the custody of which may be entrusted to him by law or other competent
authority;

(4) Inspect private commercial and industrial establishments within the jurisdiction of
the local government unit concerned in relation to the implementation of tax
ordinances, pursuant to the provisions under Book II of this Code;

(5) Maintain and update the tax information system of the local government unit;

(6) In the case of the provincial treasurer, exercise technical supervision over all
treasury offices of component cities and municipalities; and

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

Section 471. Assistant Treasurer.

(a) An assistant treasurer may be appointed by the Secretary of Finance from a list of at least
three (3) ranking, eligible recommendees of the governor or mayor, subject to civil service
law, rules and regulations.

(b) No person shall be appointed assistant treasurer unless he is a citizen of the Philippines,
a resident of the local government unit concerned, of good moral character, a holder of a
college degree preferably in commerce, public administration, or law from a recognized
college or university, and a first grade civil service eligible or its equivalent. He must have
acquired at least five (5) years experience in the treasury or accounting service in the case of
 the city or provincial assistant treasurer and three (3) years in the case of municipal assistant
treasurer.

The appointment of an assistant treasurer shall be optional for provincial, city and municipal
governments;

(c) The assistant treasurer shall assist the treasurer and perform such duties as the latter
may assign to him. He shall have authority to administer oaths concerning notices and
notifications to those delinquent in the payment of real property tax and concerning official
matters relating to the accounts of the treasurer or otherwise arising in the offices of the
treasurer and the assessor.

ARTICLE III
The Assessor

Section 472. Qualifications, Powers and Duties.

(a) No person shall be appointed assessor unless he is a citizen of the Philippines, a

resident of the local government unit concerned, of good moral character, a holder of a
college degree preferably in civil or mechanical engineering, commerce, or any other related
course from a recognized college or university, and a first grade civil service eligible or its
equivalent. He must have acquired experience in real property assessment work or in any
related field for at least five (5) years in the case of the city or provincial assessor, and three
(3) years in the case of the municipal assessor.

The appointment of an assessor shall be mandatory for provincial, city and municipal
governments.

(b) The assessor shall take charge of the assessor's office, perform the duties provided
under Book II of this Code, and shall:

(1) Ensure that all laws and policies governing the appraisal and assessment of real
properties for taxation purposes are properly executed;

(2) Initiate, review, and recommend changes in policies and objectives, plans and
programs, techniques, procedures and practices in the valuation and assessment of
real properties for taxation purposes;

(3) Establish a systematic method of real property assessment;

(4) Install and maintain a real property identification and accounting system;

(5) Prepare, install and maintain a system of tax mapping, showing graphically all
property subject to assessment and gather all data concerning the same;

(6) Conduct frequent physical surveys to verify and determine whether all real
property within the province are properly listed in the assessment rolls;

(7) Exercise the functions of appraisal and assessment primarily for taxation
purposes of all real properties in the local government unit concerned;
 (8) Prepare a schedule of the fair market value for the different classes of real
properties, in accordance with Title Two under Book II of this Code;

(9) Issue, upon request of any interested party, certified copies of assessment
records of real property and all other records relative to its assessment, upon
payment of a service charge or fee to the treasurer;

(10) Submit every semester a report of all assessments, as well as cancellations and
modifications of assessments to the local chief executive and the sanggunian
concerned;

(11) In the case of the assessor of a component city or municipality attend,

personally or through an authorized representative, all sessions of the local board of
assessment appeals whenever his assessment is the subject of the appeal, and
present or submit any information or record in his possession as may be required by
the board; and

(12) In the case of the provincial assessor, exercise technical supervision and
visitorial functions over all component city and municipal assessor, coordinate with
component city or municipal assessors in the conduct of tax mapping operations and
all other assessment activities, and provide all forms of assistance therefor:
Provided, however, That, upon full provision by the component city or municipality
concerned to its assessor's office of the minimum personnel, equipment, and funding
requirements as may be prescribed by the Secretary of Finance, such functions shall
be delegated to the said city or municipal assessor; and

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

Section 473. Assistant Assessor.

(a) No person shall be appointed assistant assessor unless he is a citizen of the Philippines,
a resident of the local government unit concerned, of good moral character, a holder of a
college degree preferably in civil or mechanical engineering, commerce, or any related
course from a recognized college or university, and a first grade civil service eligible or its
equivalent. He must have acquired experience in assessment or in any related field for at
least three (3) years in the case of the city or provincial assistant assessor, and one (1) year
in the case of the city or provincial assistant assessor.

The appointment of an assistant assessor shall be optional for provincial, city and municipal
governments.

(b) The assistant assessor shall assist the assessor and perform such other duties as the
latter may assign to him. He shall have the authority to administer oaths on all declarations of
real property for purposes of assessments.

ARTICLE IV
The Accountant

Section 474. Qualifications, Powers and Duties.

(a) No person shall be appointed accountant unless he is a citizen of the Philippines, a
resident of the local government unit concerned, of good moral character, and a a certified
public accountant. He must have acquired experience in the treasury or accounting service
for at least five (5) years in the case of the provincial or city accountant, and three (3) years
in the case of the municipal accountant.

The appointment of an accountant is mandatory for the provincial, city and municipal
governments.

(b) The accountant shall take charge of both the accounting and internal audit services of the
local government unit concerned and shall:

(1) Install and maintain an internal audit system in the local government unit
concerned;

(2) Prepare and submit financial statements to the governor or mayor, as the case
may be, and to the sanggunian concerned;

(3) Appraise the sanggunian and other local government officials on the financial
condition and operations of the local government unit concerned;

(4) Certify to the availability of budgetary allotment to which expenditures and

obligations may be properly charged;

(5) Review supporting documents before preparation of vouchers to determine

completeness of requirements;

(6) Prepare statements of cash advances, liquidation, salaries, allowances,

reimbursements and remittances pertaining to the local government unit;

(7) Prepare statements of journal vouchers and liquidation of the same and other
adjustments related thereto;

(8) Post individual disbursements to the subsidiary ledger and index cards;

(9) Maintain individual ledgers for officials and employees of the local government
unit pertaining to payrolls and deductions;

(10) Record and post in index cards details of purchased furniture, fixtures, and
equipment, including disposal thereof, if any;

(11) Account for all issued requests for obligations and maintain and keep all records
and reports related thereto;

(12) Prepare journals and the analysis of obligations and maintain and keep all
records and reports related thereto; and

(13) Exercise such other powers and perform such other duties and functions as may
be provided by law or ordinance.
 (c) The incumbent chief accountant in the office of the treasurer shall be given preference in
the appointment to the position of accountant.

ARTICLE V
The Budget Officer

Section 475. Qualifications, Powers and Duties.

(a) No person shall be appointed budget officer unless he is a citizen of the Philippines, a
resident of the local government unit concerned, of good moral character, a holder of a
college degree preferably in accounting, economics, public administration or any related
course from a recognized college or university, and a first grade civil service eligible or its
equivalent. He must have acquired experience in government budgeting or in any related
field for at least five (5) years in the case of the provincial or city budget officer, and at least
three (3) years in the case of the municipal budget officer.

The appointment of a budget officer shall be mandatory for the provincial, city, and municipal
governments.

(b) The budget officer shall take charge of the budget office and shall:

(1) Prepare forms, orders, and circulars embodying instructions on budgetary and
appropriation matters for the signature of the governor or mayor, as the case may be;

(2) Review and consolidate the budget proposals of different departments and offices
of the local government unit;

(3) Assist the governor or mayor, as the case may be, in the preparation of the
budget and during budget hearings;

(4) Study and evaluate budgetary implications of proposed legislation and submit
comments and recommendations thereon;

(5) Submit periodic budgetary reports to the Department of Budget and Management;

(6) Coordinate with the treasurer, accountant, and the planning and development
coordinator for the purpose of budgeting;

(7) Assist the sanggunian concerned in reviewing the approved budgets of

component local government units;

(8) Coordinate with the planning and development coordinator in the formulation of
the local government unit development plan; and

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

(d) The appropriations for personal services of the budget officer provided under the
Department of Budget and Management shall, upon effectivity of this Code, be transferred to
the local government unit concerned. Thereafter, the appropriations for personal services of
the budget officer shall be provided for in full in the budget of the local government unit.
 ARTICLE VI
The Planning and Development Coordinator

Section 476. Qualifications, Powers and Duties.

(a) No person shall be appointed planning and development coordinator unless he is a

citizen of the Philippines, a resident of the local government unit concerned, of good moral
character, a holder of a college degree preferably in urban planning, development studies,
economics, public administration, or any related course from a recognized college or
university, and a first grade civil service eligible or its equivalent. He must have acquired
experience in development planning or in any related field for at least five (5) years in the
case of the provincial or city planning and development coordinator, and three (3) years in
the case of the municipal planning and development coordinator.

The appointment of a planning and development coordinator shall be mandatory for

provincial, city and municipal governments.

(b) The planning and development coordinator shall take charge of the planning and
development office and shall:

(1) Formulate integrated economic, social, physical, and other development plans
and policies for consideration of the local government development council;

(2) Conduct continuing studies, researches, and training programs necessary to

evolve plans and programs for implementation;

(3) Integrate and coordinate all sectoral plans and studies undertaken by the different
functional groups or agencies;

(4) Monitor and evaluate the implementation of the different development programs,
projects, and activities in the local government unit concerned in accordance with the
approved development plan;

(5) Prepare comprehensive plans and other development planning documents for the
consideration of the local development council;

(6) Analyze the income and expenditure patterns, and formulate and recommend
fiscal plans and policies for consideration of the finance committee of the local
government unit concerned as provided under Title Five, Book II of this Code;

(7) Promote people participation in development planning within the local

government unit concerned;

(8) Exercise supervision and control over the secretariat of the local development
council; and

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

ARTICLE VII
The Engineer
Section 477. Qualifications, Powers and Duties.

(a) No person shall be appointed engineer unless he is a citizen of the Philippines, a resident
of the local government unit concerned, of good moral character, and a licensed civil
engineer. He must have acquired experience in the practice of his profession for at least five
(5) years in the case of the provincial or city engineer, and three (3) years in the case of the
municipal engineer.

The appointment of an engineer shall be mandatory for the provincial, city and municipal
governments. The city and municipal engineer shall also act as the local building official.

(b) The engineer shall take charge of the engineering office and shall:

(1) Initiate, review and recommend changes in policies and objectives, plans and
programs, techniques, procedures and practices in infrastructure development and
public works in general of the local government unit concerned;

(2) Advise the governor or mayor, as the case may be, on infrastructure, public
works, and other engineering matters;

(3) Administer, coordinate, supervise, and control the construction, maintenance,

improvement, and repair of roads, bridges, and other engineering and public works
projects of the local government unit concerned;

(4) Provide engineering services to the local government unit concerned, including
investigation and survey, engineering designs, feasibility studies, and project
management;

(5) In the case of the provincial engineer, exercise technical supervision over all
engineering offices of component cities and municipalities; and

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

ARTICLE VIII
The Health Officer

Section 478. Qualifications, Powers and Duties.

(a) No person shall be appointed health officer unless he is a citizen of the Philippines, a
resident of the local government unit concerned, of good moral character, and a licensed
medical practitioner. He must have acquired experience in the practice of his profession for
at least five (5) years in the case of the provincial or city health officer, and three (3) years in
the case of the municipal health officer.

The appointment of a health officer shall be mandatory for provincial, city and municipal
governments.

(b) The health officer shall take charge of the office on health and shall:
(1) Take charge of the office on health services, supervise the personnel and staff of
said office, formulate program implementation guidelines and rules and regulations
for the operation of the said office for the approval of the governor or mayor, as the
case may be, in order to assist him in the efficient, effective and economical
implementation of a health services program geared to implementation of health-
related projects and activities;

(2) Formulate measures for the consideration of the sanggunian and provide
technical assistance and support to the governor or mayor, as the case may be, in
carrying out activities to ensure the delivery of basic services and provisions of
adequate facilities relative to health services provided under Section 17 of this Code;

(3) Develop plans and strategies and upon approval thereof by the governor or
mayor as the case may be, implement the same, particularly those which have to do
with health programs and projects which the governor or mayor, is empowered to
implement and which the sanggunian is empowered to provide for under this Code;

(4) In addition to the foregoing duties and functions, the health officer shall:

(i) Formulate and implement policies, plans, programs and projects to

promote the health of the people in the local government unit concerned;

(ii) Advise the governor or mayor, as the case may be, and the sanggunian
on matters pertaining to health;

(iii) Execute and enforce laws, ordinances and regulations relating to public
health;

(iv) Recommend to the sanggunian, through the local health board, the
passage of such ordinances as he may deem necessary for the preservation
of public health;

(v) Recommend the prosecution of any violation of sanitary laws, ordinances

or regulations;

(vi) Direct the sanitary inspection of all business establishments selling food
items or providing accommodations such as hotels, motels, lodging houses,
pension houses, and the like, in accordance with the Sanitation Code;

(vii) Conduct health information campaigns and render health intelligence

services;

(viii) Coordinate with other government agencies and non-governmental

organizations involved in the promotion and delivery of health services; and

(ix) In the case of the provincial health officer, exercise general supervision
over health officers of component cities and municipalities; and

(5) Be in the frontline of health services, delivery, particularly during and in the
aftermath of man-made and natural disasters and calamities; and
 (c) Exercise such other powers and perform such other duties and functions as may be
prescribed by law or ordinance.

ARTICLE IX
The Civil Registrar

Section 479. Qualifications, Powers and Duties.

(a) No person shall be appointed civil registrar unless he is a citizen of the Philippines, a
resident of the local government unit concerned, of good moral character, a holder of a
college degree from a recognized college or university, and a first grade civil service eligible
or its equivalent. He must have acquired experience in civil registry work for at least five (5)
years in the case of the city civil registrar and three (3) years in the case of the municipal civil
registrar.

The appointment of a civil registrar shall be mandatory for city and municipal governments.

(b) The civil registrar shall be responsible for the civil registration program in the local
government unit concerned, pursuant to the Civil Registry Law, the Civil Code, and other
pertinent laws, rules and regulations issued to implement them.

(c) The Civil Registrar shall take charge of the office of the civil registry and shall:

(1) Develop plans and strategies and upon approval thereof by the governor or
mayor, as the case may be, implement the same, particularly those which have to do
with civil registry programs and projects which the mayor is empowered to implement
and which the sanggunian is empowered to provide for under this Code;

(2) In addition to the foregoing duties and functions, the civil registrar shall:

(i) Accept all registrable documents and judicial decrees affecting the civil
status of persons;

(ii) File, keep and preserve in a secure place the books required by law;

(iii) Transcribe and enter immediately upon receipt all registrable documents
and judicial decrees affecting the civil status of persons in the appropriate
civil registry books;

(iv) Transmit to the Office of the Civil Registrar-General, within the prescribed
period, duplicate copies of registered documents required by law;

(v) Issue certified transcripts or copies of any certificate or registered

documents upon payment of the prescribed fees to the treasurer;

(vi) Receive applications for the issuance of a marriage license and, after
determining that the requirement and supporting certificates and publication
thereof for the prescribed period have been complied with, issue the license
upon payment of the authorized fee to the treasurer;
 (vii) Coordinate with the National Statistics Office in conducting educational
campaigns for vital registration and assist in the preparation of demographic
and other statistics for the local government unit concerned; and

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

ARTICLE X
The Administrator

Section 480. Qualifications, Terms, Powers and Duties.

(a) No person shall be appointed administrator unless he is a citizen of the Philippines, a

resident of the local government unit concerned, of good moral character, a holder of a
college degree preferably in public administration, law, or any other related course from a
recognized college or university, and a first grade civil service eligible or its equivalent. He
must have acquired experience in management and administration work for at least five (5)
years in the case of the provincial or city administrator, and three (3) years in the case of the
municipal administrator.

The term of administrator is coterminous with that of his appointing authority.

The appointment of an administrator shall be mandatory for the provincial and city
governments, and optional for the municipal government.

(b) The administrator shall take charge of the office of the administrator and shall:

(1) Develop plans and strategies and upon approval thereof by the governor or
mayor, as the case may be, implement the same particularly those which have to do
with the management and administration-related programs and projects which the
governor or mayor is empowered to implement and which the sanggunian is
empowered to provide for under this Code;

(2) In addition to the foregoing duties and functions, the administrator shall:

(i) Assist in the coordination of the work of all the officials of the local
government unit, under the supervision, direction, and control of the governor
or mayor, and for this purpose, he may convene the chiefs of offices and
other officials of the local government unit;

(ii) Establish and maintain a sound personnel program for the local
government unit designed to promote career development and uphold the
merit principle in the local government service;

(iii) Conduct a continuing organizational development of the local government

unit with the end in view of the instituting effective administrative reforms;

(3) Be in the frontline of the delivery of administrative support services, particularly

those related to the situations during and in the aftermath of man-made and natural
disasters and calamities;
 (4) Recommend to the sanggunian and advise the governor and mayor, as the case
may be, on all other matters relative to the management and administration of the
local government unit; and

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

ARTICLE XI
The Legal Officer

Section 481. Qualifications, Terms, Powers and Duties.

(a) No person shall be appointed legal officer unless he is a citizen of the Philippines, a
resident of the local government concerned, of good moral character, and a member of the
Philippine Bar. He must have practiced his profession for at least five (5) years in the case of
the provincial and city legal officer, and three (3) years in the case of the municipal legal
officer.

The term of the legal officer shall be coterminous with that of his appointing authority.

The appointment of legal officer shall be mandatory for the provincial and city governments
and optional for the municipal government.

(b) The legal officer, the chief legal counsel of the local government unit, shall take charge of
the office of legal services and shall:

(1) Formulate measures for the consideration of the sanggunian and provide legal
assistance and support to the governor or mayor, as the case may be, in carrying out
the delivery of basic services and provisions of adequate facilities as provided for
under Section 17 of this Code;

(2) Develop plans and strategies and upon approval thereof by the governor or
mayor, as the case may be, implement the same, particularly those which have to do
with programs and projects related to legal services which the governor or mayor is
empowered to implement and which the sanggunian is empowered to provide for
under this Code;

(3) In addition to the foregoing duties and functions, the legal officer shall:

(i) Represent the local government unit in all civil actions and special
proceedings wherein the local government unit or any official thereof, in his
official capacity, is a party: Provided, That, in actions or proceedings where a
component city or municipality is a party adverse to the provincial
government or to another component city or municipality, a special legal
officer may be employed to represent the adverse party;

(ii) When required by the governor, mayor or sanggunian, draft ordinances,

contracts, bonds, leases and other instruments, involving any interest of the
local government unit and provide comments and recommendations on any
instrument already drawn;
 (iii) Render his opinion in writing on any question of law when requested to
do so by the governor, mayor or sanggunian;

(iv) Investigate or cause to be investigated any local official or employee for

administrative neglect or misconduct in office, and recommend appropriate
action to the governor, mayor or sanggunian, as the case may be;

(v) Investigate or cause to be investigated any person, firm or corporation

holding any franchise or exercising any public privilege for failure to comply
with any term or condition in the grant of such franchise or privilege, and
recommending appropriate action to the governor, mayor or sanggunian, as
the case may be;

(vi) When directed by the governor, mayor, or sanggunian, initiate and

prosecute in the interest of the local government unit concerned any civil
action on any bond, lease or other contract upon any breach or violation
thereof; and

(vii) Review and submit recommendations on ordinances approved and

execute orders issued by component units;

(3) Recommend measures to the sanggunian and advise the governor or mayor as
the case may be on all other matters related to upholding the rule of law;

(4) Be in the frontline of protecting human rights and prosecuting any violations
thereof, particularly those which occur during and in the aftermath of man-made or
natural disasters or calamities; and

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

ARTICLE XII
The Agriculturist

Section 482. Qualifications, Powers and Duties.

(a) No person shall be appointed agriculturist unless he is a citizen of the Philippines, a

resident of the local government unit concerned, of good moral character, a holder of a
college degree in agriculture or any related course from a recognized college or university
and a first grade civil service eligible or its equivalent. He must have practiced his profession
in agriculture or acquired experience in a related field for at least five (5) years in the case of
the provincial and city agriculturist, and three (3) years in the case of the municipal
agriculturist.

The position of the agriculturist shall be mandatory for the provincial government and
optional for the city and municipal governments.

(b) The agriculturist shall take charge of the office for agricultural services, and shall:

(1) Formulate measures for the approval of the sanggunian and provide technical
assistance and support to the governor or mayor, as the case may be, in carrying out
 said measures to ensure the delivery of basic services and provisions of adequate
facilities relative to agricultural services as provided for under Section 17 of this
Code;

(2) Develop plans and strategies and upon approval thereof by the governor or
mayor, as the case may be, implement the same, particularly those which have to do
with agricultural programs and projects which the governor or mayor is empowered
to implement and which the sanggunian is empowered to provide for under this
Code;

(3) In addition to the foregoing duties and functions, the agriculturist shall:

(i) Ensure that maximum assistance and access to resources in the

production, processing and marketing of agricultural and aqua-cultural and
marine products are extended to farmers, fishermen and local entrepreneurs;

(ii) Conduct or cause to be conducted location-specific agricultural

researches and assist in making available the appropriate technology arising
out of and disseminating information on basic research on crops, preventive
and control of plant diseases and pests, and other agricultural matters which
will maximize productivity;

(iii) Assist the governor or mayor, as the case may be, in the establishment
and extension services of demonstration forms or aqua-culture and marine
products;

(iv) Enforce rules and regulations relating to agriculture and aqua-culture;

(v) Coordinate with government agencies and non-governmental

organizations which promote agricultural productivity through appropriate
technology compatible with environmental integrity;

(4) Be in the frontline of delivery of basic agricultural services, particularly those

needed for the survival of the inhabitants during and in the aftermath of man-made
and natural disasters;

(5) Recommend to the sanggunian and advise the governor or mayor, as the case
may be, on all other matters related to agriculture and aqua-culture which will
improve the livelihood and living conditions of the inhabitants; and

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

ARTICLE XIII
The Social Welfare and Development Officer

Section 483. Qualifications, Powers and Duties

(a) No person shall be appointed social welfare and development officer unless he is a
citizen of the Philippines, a resident of the local government concerned, of good moral
character, a duly licensed social worker or a holder of a college degree preferably in
sociology or any other related course from a recognized college or university, and a first
grade civil service eligible or its equivalent. He must have acquired experience in the practice
of social work for at least five (5) years in the case of the provincial or city social welfare and
development officer, and three (3) years in the case of the municipal social welfare and
development officer.

The appointment of a social welfare and development officer is mandatory for provincial and
city governments, and optional for municipal government.

(b) The social welfare and development officer shall take charge of the office on social
welfare and development services and shall:

(1) Formulate measures for the approval of the sanggunian and provide technical
assistance and support to the governor or mayor, as the case may be, in carrying out
measures to endure the delivery of basic services and provisions of adequate
facilities relative to social welfare and development services as provided for under
Section 17 of this Code;

(2) Develop plans and strategies and upon approval thereof by the governor or
mayor, as the case may be, implement the same particularly those which have to do
with social welfare programs and projects which the governor or mayor is
empowered to implement and which the sanggunian is empowered to provide for
under this Code;

(3) In addition to the foregoing duties, the social welfare and development officer
shall:

(i) Identify the basic needs of the needy, the disadvantaged and the
impoverished and develop and implement appropriate measures to alleviate
their problems and improve their living conditions;

(ii) Provide relief and appropriate crisis intervention for victims of abuse and
exploitation and recommend appropriate measures to deter further abuse
and exploitation;

(iii) Assist the governor or mayor, as the case may be, in implementing the
barangay level program for the total development and protection of children
up to six (6) years of age;

(iv) Facilitate the implementation of welfare programs for the disabled,

elderly, and victims of drug addiction, the rehabilitation of prisoners and
parolees, the prevention of juvenile delinquency and such other activities
which would eliminate or minimize the ill-effects of poverty;

(v) Initiate and support youth welfare programs that will enhance the role of
the youth in nation-building;

(vi) Coordinate with government agencies and non-governmental

organizations which have for their purpose the promotion and the protection
of all needy, disadvantaged, underprivileged or impoverished groups or
 individuals, particularly those identified to be vulnerable and high-risk to
exploitation, abuse and neglect;

(4) Be in the frontline or service delivery, particularly those which have to do with
immediate relief during and assistance in the aftermath of man-made and natural
disaster and natural calamities;

(5) Recommend to the sanggunian and advise the governor or mayor, as the case
may be, on all other matters related to social welfare and development services
which will improve the livelihood and living conditions of the inhabitants; and

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

ARTICLE XIV
The Environment and Natural Resources Officer

Section 484. Qualifications, Powers and Duties.

(a) No person shall be appointed environment and natural resources officer unless he is a
citizen of the Philippines, a resident of the local government unit concerned, of good moral
character, a holder of a college degree preferably in environment, forestry, agriculture or any
related course from a recognized college or university, and a first grade civil service eligible
or its equivalent. He must have acquired experience in environmental and natural resources
management, conservation, and utilization, of at least five (5) years in the case of the
provincial or city environment and natural resources officer, and three (3) years in the case of
the municipal environment and natural resources officer.

The appointment of the environment and natural resources officer is optional for provincial,
city, and municipal governments.

(b) The environment and natural resources management officer shall take charge of the
office on environment and natural resources and shall:

(1) Formulate measures for the consideration of the sanggunian and provide
technical assistance and support to the governor or mayor, as the case may be, in
carrying out measures to ensure the delivery of basic services and provision of
adequate facilities relative to environment and natural resources services as
provided for under Section 17 of this Code;

(2) Develop plans and strategies and upon approval thereof, by the governor or
mayor, as the case may be, implement the same, particularly those which have to do
with environment and natural resources programs and projects which the governor or
mayor is empowered to implement and which the sanggunian is empowered to
provide for under this Code;

(3) In addition to the foregoing duties and functions, the environment and natural
resources officer shall:
 (i) Establish, maintain, protect and preserve communal forests, watersheds,
tree parks, mangroves, greenbelts and similar forest projects and commercial
forest, like industrial tree farms and agro-forestry projects;

(ii) Provide extension services to beneficiaries of forest development projects

and technical, financial and infrastructure assistance;

(iii) Manage and maintain seed banks and produce seedlings for forest and
tree parks;

(iv) Provide extension services to beneficiaries of forest development projects

and render assistance for natural resources-related conservation and
utilization activities consistent with ecological balance;

(v) Promote the small-scale mining and utilization of mineral resources,

particularly mining of gold;

(vi) Coordinate with government agencies and non-governmental

organizations in the implementation of measures to prevent and control land,
air and water pollution with the assistance of the Department of Environment
and Natural Resources;

(4) Be in the frontline of the delivery of services concerning the environment and
natural resources, particularly in the renewal and rehabilitation of the environment
during and in the aftermath of man-made and natural calamities and disasters;

(5) Recommend to the sanggunian and advise the governor or mayor, as the case
may be, on all matters relative to the protection, conservation maximum utilization,
application of appropriate technology and other matters related to the environment
and natural resources; and

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

ARTICLE XV
The Architect

Section 485. Qualifications, Powers and Duties.

(a) No person shall be appointed architect unless he is a citizen of the Philippines, a resident
of the local government unit concerned, of good moral character, a duly licensed architect.
He must have practiced his profession for at least five (5) years in the case of the provincial
or city architect, and three (3) years in the case of the municipal architect.

The appointment of the architect is optional for provincial, city and municipal governments.

(b) The Architect shall take charge of the office on architectural planning and design and
shall:

(1) Formulate measures for the consideration of the sanggunian and provide
technical assistance and support to the governor or mayor, as the case may be, in
 carrying out measures to ensure the delivery of basic services and provision of
adequate facilities relative to architectural planning and design as provided for under
Section 17 of this Code;

(2) Develop plans and strategies and upon approval thereof by the governor or
mayor, as the case may be, implement the same, particularly those which have to do
with architectural planning and design programs and projects which the governor or
mayor is empowered to implement and which the sanggunian is empowered to
provide for under this Code;

(3) In addition to foregoing duties and functions, the architect shall:

(i) Prepare and recommend for consideration of the sanggunian the

architectural plan and design for the local government unit or a part thereof,
including the renewal of slums and blighted areas, land reclamation activities,
the greening of land, and appropriate planning of marine and foreshore
areas;

(ii) Review and recommend for appropriate action of the sanggunian,

governor or mayor, as the case may be, the architectural plans and design
submitted by governmental and non-governmental entities or individuals,
particularly those for undeveloped, underdeveloped, and poorly-designed
areas; and

(iii) Coordinate with government and non-government entities and individuals

involved in the aesthetics and the maximum utilization of the land and water
within the jurisdiction of the local government unit, compatible with
environmental integrity and ecology balance;

(4) Be in the frontline of the delivery of services involving architectural planning and
design, particularly those related to the redesigning of spatial distribution of basic
facilities and physical structures during and in the aftermath of man-made and
natural calamities and disasters;

(5) Recommend to the sanggunian and advise the governor or mayor, as the case
may be, on all matters relative to the architectural planning and design as it relates to
the total socio-economic development of the local government units; and

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

ARTICLE XVI
The Information Officer

Section 486. Qualifications, Powers and Duties.

(a) No person shall be appointed information officer unless he is a citizen of the Philippines,
a resident of the local government unit concerned, of good moral character, a holder of a
college degree preferably in journalism, mass communication or any related course from a
recognized college or university, and a first grade civil service eligible or its equivalent. He
must have experience in writing articles and research papers, or in writing for print, television
or broadcast media of at least three (3) years in the case of the provincial or city information
officer, and at least one (1) year in the case of municipal information officer.

The appointment of the information officer is optional for the provincial, city and municipal
governments.

The term of the information officer is coterminous with that of his appointing authority.

(b) The information officer shall take charge of the office on public information and shall:

(1) Formulate measures for the consideration of the sanggunian and provide
technical assistance and support to the governor or mayor, as the case may be, in
providing the information and research data required for the delivery of basic
services and provision of adequate facilities so that the public becomes aware of said
services and may fully avail of the same;

(2) Develop plans and strategies and, upon approval thereof by the governor or
mayor, as the case may be, implement the same, particularly those which have to do
with public information and research data to support programs and projects which the
governor or mayor is empowered to implement and which the sanggunian is
empowered to provide for under this Code;

(3) In addition to the foregoing duties and functions, the information officer shall:

(i) Provide relevant, adequate, and timely information to the local government
unit and its residents;

(ii) Furnish information and data on local government units to government

agencies or offices as may be required by law or ordinance; and non-
governmental organizations to be furnished to said agencies and
organizations;

(iii) Maintain effective liaison with the various sectors of the community on
matters and issues that affect the livelihood and the quality of life of the
inhabitants and encourage support for programs of the local and national
government;

(4) Be in the frontline in providing information during and in the aftermath of man-
made and natural calamities and disasters, with special attention to the victims
thereof, to help minimize injuries and casualties during and after the emergency, and
to accelerate relief and rehabilitation;

(5) Recommend to the sanggunian and advise the governor or mayor, as the case
may be, on all matters relative to public information and research data as it relates to
the total socio-economic development of the local government unit; and

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

ARTICLE XVII
The Cooperatives Officer
Section 487. Qualifications, Powers and Duties.

(a) No person shall be appointed cooperative officer unless he is a citizen of the Philippines,
a resident of the local government unit concerned, of good moral character, a holder of a
college degree preferably in business administration with special training in cooperatives or
any related course from a recognized college or university, and a first grade civil service
eligible or its equivalent. He must have experience in cooperatives organizations and
management of at least five (5) years in the case of provincial or city cooperatives officer,
and three (3) years in the case of municipal cooperatives officer.

The appointment of the cooperatives officer is optional for the provincial and city
governments.

(b) The cooperatives officer shall take charge of the office for the development of
cooperatives and shall:

(1) Formulate measures for the consideration of the sanggunian, and provide
technical assistance and support to the governor or mayor, as the case may be, in
carrying out measures to ensure the delivery of basic services and provision of
facilities through the development of cooperatives, and in providing access to such
services and facilities;

(2) Develop plans and strategies and, upon approval thereof by the governor or
mayor, as the case may be, implement the same, particularly those which have to do
with the integration of cooperatives principles and methods in programs and projects
which the governor or mayor is empowered to implement and which the sanggunian
is empowered to provide for under this Code;

(3) In addition to the foregoing duties and functions, the cooperatives officer shall:

(i) Assist in the organization of cooperatives;

(ii) Provide technical and other forms of assistance to existing cooperatives to

enhance their viability as an economic enterprise and social organization;

(iii) Assist cooperatives in establishing linkages with government agencies

and non-government organizations involved in the promotion and integration
of the concept of cooperatives in the livelihood of the people and other
community activities;

(4) Be in the frontline of cooperatives organization, rehabilitation or viability-

enhancement, particularly during and in the aftermath of man-made and natural
calamities and disasters, to aid in their survival and, if necessary subsequent
rehabilitation;

(5) Recommend to the sanggunian, and advise the governor or mayor, as the case
may be, on all matters relative to cooperatives development and viability-
enhancement which will improve the livelihood and quality of life of the inhabitants;
and
 (c) Exercise such other powers and perform such other duties and functions as may be
prescribed by law or ordinance.

ARTICLE XVIII
The Population Officer

Section 488. Qualification, Powers and Duties. -

(a) No person shall be appointed population officer unless he is a citizen of the Philippines, a
resident of the local government unit concerned, of good moral character, a holder of a
college degree with specialized training in population development from a recognized college
or university, and a first grade civil service eligible or its equivalent. He must have experience
in the implementation of programs on population development or responsible parenthood for
at least five (5) years in the case of the provincial or city population officer, and three (3)
years in the case of the municipal population officer.

The appointment of a population officer shall be optional in the local government unit:
Provided, however, That provinces and cities which have existing population offices shall
continue to maintain such offices for a period of five (5) years from the date of effectivity of
this Code, after which said offices shall become optional.

(b) The population officer shall take charge of the office on population development and
shall:

(1) Formulate measures for the consideration of the sanggunian and provide
technical assistance and support to the governor or mayor, as the case may be, in
carrying out measures to ensure the delivery of basic services and provision of
adequate facilities relative to the integration of the population development principles
and in providing access to said services and facilities;

(2) Develop plans and strategies and upon approval thereof by the governor or
mayor, as the case may be, implement the same, particularly those which have to do
with the integration of population development principles and methods in programs
and projects which the governor or mayor is empowered to implement and which the
sanggunian is empowered to provide for under this Code;

(3) In addition to the foregoing duties and functions, the population officer shall:

(i) Assist the governor or mayor, as the case may be, in the implementation of
the Constitutional provisions relative to population development and the
promotion of responsible parenthood;

(ii) Establish and maintain an updated data bank for program operations,
development planning and an educational program to ensure the people's
participation in and understanding of population development;

(iii) Implement appropriate training programs responsive to the cultural

heritage of the inhabitants; and

(c) Exercise such other powers and perform such other duties and functions as may be
prescribed by law or ordinance.
 ARTICLE XIX
The Veterinarian

Section 489. Qualifications, Powers and Duties.

(a) No person shall be appointed veterinarian unless he is a citizen of the Philippines, a

resident of the local government unit concerned, of good moral character, a licensed doctor
of veterinary medicine. He must have practiced his profession for at least three (3) years in
the case of provincial or city veterinarian and at least one (1) year in the case of the
municipal veterinarian.

The appointment of a veterinarian officer is mandatory for the provincial and city
governments.

(b) The veterinarian shall take charge of the office for veterinary services and shall:

(1) Formulate measures for the consideration of the sanggunian, and provide
technical assistance and support to the governor or mayor, as the case may be, in
carrying out measures to ensure the delivery of basic services and provision of
adequate facilities pursuant to Section 17 of this Code;

(2) Develop plans and strategies and upon approval thereof by the governor or
mayor, as the case may be, implement the same, particularly those which have to do
with the veterinary-related activities which the governor or mayor is empowered to
implement and which the sanggunian is empowered to provide for under this Code;

(3) In addition to the foregoing duties and functions, the veterinarian shall:

(i) Advise the governor or the mayor, as the case may be, on all matters
pertaining to the slaughter of animals for human consumption and the
regulation of slaughterhouses;

(ii) Regulate the keeping of domestic animals;

(iii) Regulate and inspect poultry, milk and dairy products for public
consumption;

(iv) Enforce all laws and regulations for the prevention of cruelty to animals;
and

(v) Take the necessary measures to eradicate, prevent or cure all forms of
animal diseases;

(4) Be in the frontline of veterinary related activities, such as in the outbreak of

highly-contagious and deadly diseases, and in situations resulting in the depletion of
animals for work and human consumption, particularly those arising from and in the
aftermath of man-made and natural calamities and disasters;

(5) Recommend to the sanggunian and advise the governor or mayor, as the case
may be, on all other matters relative to veterinary services which will increase the
 number and improve the quality of livestock, poultry and other domestic animals
used for work or human consumption; and

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

ARTICLE XX
The General Services Officer

Section 490. Qualifications, Powers and Duties.

(a) No person shall be appointed general services officer unless he is a citizen of the
Philippines, a resident of the local government unit concerned, of good moral character, a
holder of a college degree on public administration, business administration and
management from a recognized college or university, and a first grade civil service eligible or
its equivalent. He must have acquired experience in general services, including management
of supply, property, solid waste disposal, and general sanitation, of at least five (5) years in
the case of the provincial or city general services officer, and at least three (3) years in the
case of the municipal general services officer.

The appointment of a general services officer is mandatory for the provincial and city
governments,

(b) The general services officer shall take charge of the office on general services and shall:

(1) Formulate measures for the consideration of the sanggunian and provide
technical assistance and support to the governor or mayor, as the case may be, in
carrying out measures to ensure the delivery of basic services and provision of
adequate facilities pursuant to Section 17 of this Code and which require general
services expertise and technical support services;

(2) Develop plans and strategies and upon approval thereof by the governor or
mayor, as the case may be, implement the same, particularly those which have to do
with the general services supportive of the welfare of the inhabitants which the
governor or mayor is empowered to implement and which the sanggunian is
empowered to provide for under this Code;

(3) In addition to the foregoing duties and functions, the general services officer shall:

(i) Take custody of and be accountable for all properties, real or personal,
owned by the local government unit and those granted to it in the form of
donation, reparation, assistance and counterpart of joint projects;

(ii) With the approval of the governor or mayor, as the case may be, assign
building or land space to local officials or other public officials, who by law,
are entitled to such space;

(iii) Recommend to the governor or mayor, as the case may be, the
reasonable rental rates for local government properties, whether real or
personal, which will be leased to public or private entities by the local
government;
 (iv) Recommend to the governor or mayor, as the case may be, reasonable
rental rates of private properties which may be leased for the official use of
the local government unit;

(v) Maintain and supervise janitorial, security, government public buildings

and other real property, whether owned or leased by the local government
unit;

(vi) Collate and disseminate information regarding prices, shipping and other
costs of supplies and other items commonly used by the local government
unit;

(vii) Perform archival and record management with respect to records of

offices and departments of the local government unit; and

(viii) Perform all other functions pertaining to supply and property

management heretofore performed by the local government treasurer; and
enforce policies on records creation, maintenance, and disposal;

(4) Be in the frontline of general services related activities, such as the possible or
imminent destruction or damage to records, supplies, properties, and structures and
the orderly and sanitary clearing up of waste materials or debris, particularly during
and in the aftermath of man-made and natural calamities and disasters;

(5) Recommend to the sanggunian and advise the governor or mayor, as the case
may be, on all matters relative to general services; and

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

TITLE VI
LEAGUES OF LOCAL GOVERNMENT UNITS AND ELECTIVE OFFICIALS

CHAPTER I
Leagues of Local Government Units

ARTICLE I
Liga ng Mga Barangay

Section 491. Purpose of Organization. - There shall be an organization of all barangays to be known
as the liga ng mga barangay for the primary purpose of determining the representation of the Liga in
the sanggunians, and for ventilating, articulating and crystallizing issues affecting barangay
government administration and securing, through proper and legal means, solutions thereto.

Section 492. Representation, Chapters, National Liga. - Every barangay shall be represented in
said liga by the punong barangay, or in his absence or incapacity, by a sanggunian member duly
elected for the purpose among its members, who shall attend all meetings or deliberations called by
the different chapters of the liga.

The liga shall have chapters at the municipal, city, provincial and metropolitan political subdivision
levels.
The municipal and city chapters of the liga shall be composed of the barangay representatives of
municipal and city barangays respectively. The duly elected presidents of component municipal and
city chapters shall constitute the provincial chapter or the metropolitan political subdivision chapter.
The duly elected presidents of highly-urbanized cities, provincial chapters, the Metropolitan Manila
chapter and metropolitan political subdivision chapters shall constitute the National Liga ng mga
Barangay.

Section 493. Organization. - The liga at the municipal, city, provincial, metropolitan political
subdivision, and national levels directly elect a president, a vice-president, and five (5) members of
the board of directors. The board shall appoint its secretary and treasurer and create such other
positions as it may deem necessary for the management of the chapter. A secretary-general shall be
elected from among the members of the national liga and shall be charged with the overall operation
of the liga on national level. The board shall coordinate the activities of the chapters of the liga.

Section 494. Ex-Officio Membership in Sanggunians. - The duly elected presidents of the liga at the
municipal, city and provincial levels, including the component cities and municipalities of
Metropolitan Manila, shall serve as ex-officio members of the sangguniang bayan, sangguniang
panlungsod, sangguniang panlalawigan, respectively. They shall serve as such only during their term
of office as presidents of the liga chapters, which in no case shall be beyond the term of office of the
sanggunian concerned.

Section 495. Powers, Functions and Duties of the Liga. - The liga shall:

(a) Give priority to programs designed for the total development of the barangays and in
consonance with the policies, programs and projects of the national government;

(b) Assist in the education of barangay residents for people's participation in local
government administration in order to promote united and concerted action to achieve
country-wide development goals;

(c) Supplement the efforts of government in creating gainful employment within the
barangay;

(d) Adopt measures to promote the welfare of barangay officials;

(e) Serve as a forum of the barangays in order to forge linkages with government and non-
governmental organizations and thereby promote the social, economic and political well-
being of the barangays; and

(f) Exercise such other powers and perform such other duties and functions which will bring
about stronger ties between barangays and promote the welfare of the barangay inhabitants.

ARTICLE II
League of Municipalities

Section 496. Purpose of Organization. - There shall be an organization of all municipalities to be

known as league of municipalities for the primary purpose of ventilating, articulating and crystallizing
issues affecting municipal government administration, and securing, through proper and legal
means, solutions thereto.
The league shall form provincial chapters composed of the league presidents for all component
municipalities of the province.

Section 497. Representation. - Every municipality shall be represented in the league by the
municipal mayor of in his absence, by the vice-mayor or a sanggunian member duly elected for the
purpose by the members, who shall attend all meetings and participate in the deliberations of the
league.

Section 498. Powers, Functions and Duties of the League of Municipalities. - The league of
municipalities shall:

(a) Assist the national government in the formulation and implementation of the policies,
programs and projects affecting municipalities as a whole;

(b) Promote local autonomy at the municipal level;

(c) Adopt measures for the promotion of the welfare of all municipalities and its officials and
employees;

(d) Encourage people's participation in local government administration in order to promote

united and concerted action for the attainment of country-wide development goals;

(e) Supplement the efforts of the national government in creating opportunities for gainful
employment within the municipalities;

(f) Give priority to programs designed for the total development of the municipalities in
consonance with the policies, programs and projects of the national government;

(g) Serve as a forum for crystallizing and expressing ideas, seeking the necessary
assistance of the national government, and providing the private sector avenues for
cooperation in the promotion of the welfare of the municipalities; and

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

ARTICLE III
League of Cities

Section 499. Purpose of Organization. - There shall be an organization of all cities to be known as
the League of Cities for the primary purpose of ventilating, articulating and crystallizing issues
affecting city government administration, and securing, through proper and legal means, solutions
thereto.

The league may form chapters at the provincial level for the component cities of a province. Highly-
urbanized cities may also form a chapter of the League. The National League shall be composed of
the presidents of the league of highly-urbanized cities and the presidents of the provincial chapters
of the league of component cities.

Section 500. Representation. - Every city shall be represented in the league by the city mayor or in
his absence, by the city vice-mayor or a sanggunian member duly elected for the purpose by the
members, who shall attend all meetings and participate in the deliberations of the league.
Section 501. Powers, Functions and Duties of the League of City. - The league of cities shall:

(a) Assist the national government in the formulation and implementation of the policies,
programs and projects affecting cities as a whole;

(b) Promote local autonomy at the city level;

(c) Adopt measures for the promotion of the welfare of all cities and its officials and
employees;

(d) Encourage people's participation in local government administration in order to promote

united and concerted action for the attainment of country-wide development goals;

(e) Supplement the efforts of the national government in creating opportunities for gainful
employment the cities;

(f) Give priority to programs designed for the total development of cities in consonance with
the policies, programs and projects of the national government;

(g) Serve as a forum for crystallizing and expressing ideas, seeking the necessary
assistance of the national government and providing the private sector avenues for
cooperation in the promotion of the welfare of the cities; and

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

ARTICLE IV
League of Provinces

Section 502. Purpose of Organization. - There shall be an organization of all provinces to be known
as the League of Provinces for the primary purpose of ventilating, articulating and crystallizing issues
affecting provincial and metropolitan political subdivision government administration, and securing,
through proper and legal means, solutions thereto. For this purpose, the Metropolitan Manila Area
and any metropolitan political subdivision shall be considered as separate provincial units of the
league.

Section 503. Representation. - Every province shall be represented in the league by the provincial
governor or in his absence, by the provincial vice-governor or a sanggunian member duly elected for
the purpose by the members, who shall attend all meetings and participate in the deliberations of the
league.

Section 504. Powers, Functions and Duties of the League of Provinces. - The league of provinces
shall:

(a) Assist the national government in the formulation and implementation of the policies,
programs and projects affecting provinces as a whole;

(b) Promote local autonomy at the provincial level;

(c) Adopt measures for the promotion of the welfare of all provinces and its officials and
employees;
 (d) Encourage people's participation in local government administration in order to promote
united and concerted action for the attainment of countrywide employment within the
province;

(e) Supplement the efforts of the national government in creating opportunities for gainful
employment within the province;

(f) Give priority to programs designed for the total development of the provinces in
consonance with the policies, programs and projects of the national government;

(g) Serve as a forum for crystallizing and expressing ideas, seeking the necessary
assistance of the national government and providing the private sector avenues for
cooperation in the promotion of the welfare of the provinces; and

(h) Exercise such other powers and perform such other duties and functions as the league
may prescribe for the welfare of the provinces and metropolitan political subdivisions.

ARTICLE V
Provisions Common to All Leagues

Section 505. Funding.

(a) All leagues shall derive its funds from contributions of member local government units
and from fund-raising projects and activities without the necessity of securing permits
therefor: Provided, That the proceeds from said fund-raising projects and activities shall be
used primarily to fund the projects for which the said proceeds have been raised, subject to
the pertinent provision of this Code and the pertinent provisions of the Omnibus Election
Code.

(b) All funds of leagues shall be deposited as trust funds with its treasurer and shall be
disbursed in accordance with the board of director's resolutions, subject to pertinent
accounting and auditing rules and regulations: Provided, That the treasurer shall be bonded
in an amount to be determined by the board of directors. The funds of a chapter shall be
deposited as chapter funds and funds of the national league shall be deposited as national
funds.

Section 506. Organizational Structure. - To ensure the effective and efficient administration, the
leagues for municipalities, cities and provinces shall elect chapter-level and national-level boards of
directors and a set of officers headed by the president. A secretary-general shall be chosen from
among the national league members to manage the day to day operation and activities of the
national league. The board of directors on the chapter or national level may create such other
positions as may be deemed necessary for the management of the chapters and of the national
league. The national board of directors of the leagues for municipalities, cities or provinces shall
coordinate programs, projects and activities of chapter and the national-level league.

Section 507. Constitution and By-laws of the Liga and the Leagues. - All other matters not herein
otherwise provided for affecting the internal organization of the leagues of local government units
shall be governed by their respective constitution and by-laws which are hereby made suppletory to
the provision of this Chapter: Provided, That said Constitution and By-laws shall always conform to
the provisions of the Constitution and existing laws.
 CHAPTER II
Leagues and Federation of Local Elective Officials

Section 508. Organization.

(a) Vice-governors, vice-mayors, sanggunian members of barangays, municipalities,

component cities, highly-urbanized cities and provinces, and other elective local officials of
local government units, including those of the Metropolitan Manila Area and any metropolitan
political subdivisions, may form their respective leagues or federation, subject to applicable
provisions of this Title and pertinent provisions of this Code;

(b) Sanggunian members of component cities and municipalities shall form a provincial
federation and elect a board of directors and a set of officers headed by the president. The
duly elected president of the provincial federation of sanggunian members of component
cities and municipalities shall be an ex-officio member of the sangguniang panlalawigan
concerned and shall serve as such only during his term of office as president of the
provincial federation of sanggunian members of component cities and municipalities, which
in no case shall be beyond the term of office of the sanggunian panlalawigan concerned.

Section 509. Constitution and By-laws. - The leagues or federations shall adopt a Constitution and
by-laws which shall govern their internal organization and operation: Provided, That said Constitution
and by-laws shall always conform to the provision of the Constitution and existing laws.

Section 510. Funding. - The leagues and federations may derive funds from contributions of
individual league or federation members or from fund-raising projects or activities. The local
government unit concerned may appropriate funds to support the leagues or federation organized
pursuant to this Section, subject to the availability of funds.

BOOK IV
MISCELLANEOUS AND FINAL PROVISIONS

TITLE I
PENAL PROVISIONS

Section 511. Posting and Publication of Ordinances with Penal Sanctions.

(a) Ordinances with penal sanctions shall be posted at prominent places in the provincial
capitol, city, municipal or barangay hall, as the case may be, for a minimum period of three
(3) consecutive weeks. Such ordinances shall also be published in a newspaper of general
circulation, where available, within the territorial jurisdiction of the local government unit
concerned, except in the case of barangay ordinances. Unless otherwise provided therein,
said ordinances shall take effect on the day following its publication, or at the end of the
period of posting, whichever occurs later.

(b) Any public officer or employee who violates an ordinance may be meted administrative
disciplinary action, without prejudice to the filing of the appropriate civil or criminal action.

(c) The secretary to the sanggunian concerned shall transmit official copies of such
ordinances to the chief executive officer of the Office Gazette within seven (7) days following
 the approval of the said ordinance for publication purposes. The Official Gazette may publish
ordinances with penal sanctions for archival and reference purposes.

Section 512. Withholding of Benefits Accorded to Barangay Officials. - Willful and malicious
withholding of any of the benefits accorded to barangay officials under Section 393 hereof shall be
punished with suspension or dismissal from office of the official or employee responsible therefor.

Section 513. Failure to Post and Publish the Itemized Monthly Collections and Disbursements. -
Failure by the local treasurer of the local chief accountant to post the itemized monthly collections
and disbursements of the local government unit concerned within ten (10) days following the end of
every month and for at least two (2) consecutive weeks at prominent places in the main office
building of the local government unit concerned, its plaza and main street, and to publish said
itemization in a newspaper of general circulation, where available, in the territorial jurisdiction of such
unit, shall be punished by a fine not exceeding Five hundred pesos (P500.00) or by imprisonment
not exceeding one (1) month, or both such fine and imprisonment, at the discretion of the court.

Section 514. Engaging in Prohibited Business Transactions or Possessing Illegal Pecuniary

Interest. - Any local official and any person or persons dealing with him who violate the prohibitions
provided in Section 89 of Book I hereof, shall be punished with imprisonment for six months and one
day to six years, or a fine of not less than Three thousand pesos (P3,000.00) nor more than Ten
thousand pesos (P10,000.00), or both such imprisonment and fine at the discretion of the court.

Section 515. Refusal or Failure of Any Party or Witness to Appear before the Lupon or Pangkat. -
Refusal or willful failure of any party or witness to appear before the lupon or pangkat in compliance
with a summons issued pursuant to the provisions on the Katarungang Pambarangay under Chapter
7, Title III of this Code may be punished by the city or municipal court as for indirect contempt of
court upon application filed therewith by the lupon chairman, the pangkat chairman, or by any of the
contending parties. Such refusal or willful failure to appear shall be reflected in the records of the
lupon secretary or in the minutes of the pangkat secretary and shall bar the complainant who fails to
appear, from seeking judicial recourse for the same cause of action, and the respondent who refuses
to appear, from filing any counterclaim arising out of, or necessarily connected with the complaint.

A pangkat member who serves as such shall be entitled to an honorarium, the amount of which is to
be determined by the sanggunian concerned subject to the provisions in this Code cited above.

Section 516. Penalties for Violation of Tax Ordinances. - The sanggunian of a local government unit
is authorized to prescribe fines or other penalties for violation of tax ordinances but in no case shall
such fines be less than One thousand pesos (P1,000.00) nor more than Five thousand pesos
(P5,000.00), nor shall imprisonment be less than one (1) month nor more than six (6) months. Such
fine or other penalty, or both, shall be imposed at the discretion of the court. The sangguniang
barangay may prescribe a fine of not less than One hundred pesos (P100.00) nor more than One
thousand pesos (P1,000.00).

Section 517. Omission of Property from Assessment or Tax Rolls by Officers and Other Acts. - Any
officer charged with the duty of assessing real property who willfully fails to assess, or who
intentionally omits from the assessment or tax roll any real property which he knows to be taxable, or
who willfully or negligently under assesses any real property, or who intentionally violates or fails to
perform any duty imposed upon him by law relating to the assessment of taxable real property shall,
upon conviction, be punished by a fine of not less than One thousand pesos (P1,000.00) nor more
than Five thousand pesos (P5,000.00), or by imprisonment of not less than one (1) month nor more
than six (6) months, or both such fine and imprisonment, at the discretion of the court.
The same penalty shall be imposed upon any officer charged with the duty of collecting the tax due
on real property who willfully or negligently fails to collect the tax and institute the necessary
proceedings for the collection of the same.

Any other officer required by this Code to perform acts relating to the administration of the real
property tax or to assist the assessor or treasurer in such administration, who willfully fails to
discharge such duties shall, upon conviction be punished by a fine of not less than Five hundred
pesos (P500.00) nor more than Five thousand pesos (P5,000.00) or imprisonment of not less than
one (1) month nor more than six (6) months, or both such fine and imprisonment, at the discretion of
the court.

Section 518. Government Agents Delaying Assessment of Real Property and Assessment
Appeals. - Any government official who intentionally and deliberately delays the assessment of real
property or the filing of any appeal against its assessment shall, upon conviction, be punished by a
fine of not less than Five hundred pesos (P500.00) nor more than Five thousand pesos (P5,000.00),
or by imprisonment of not less than one (1) month nor more than six (6) months, or both such fine
and imprisonment, at the discretion of the court.

Section 519. Failure to Dispose of Delinquent Real Property at Public Auction. - The local treasurer
concerned who fails to dispose of delinquent real property at public auction in compliance with the
pertinent provisions of this Code, and any other local government official whose acts hinder the
prompt disposition of delinquent real property at public auction shall, upon conviction, be subject to a
fine of not less than One thousand pesos (P1,000.00) nor more than Five thousand pesos
(P5,000.00), or imprisonment of not less than one (1) month nor more than six (6) months, or both
such fine and imprisonment, at the discretion of the court.

Section 520. Prohibited Acts Related to the Award of Contracts Under the Provisions on Credit
Financing. - It shall be unlawful for any public official or employee in the provincial, city, or municipal
government, or their relatives within the fourth civil degree of consanguinity or affinity, to enter into or
have any pecuniary interest in any contract for the construction, acquisition, operation or
maintenance of any project awarded pursuant to the provisions of Title Four in Book II hereof, or for
the procurement of any supplies, materials, or equipment of any kind to be used in the said project.
Any person convicted for violation of the provisions of said Title shall be removed from office and
shall be punishable by imprisonment of not less than one (1) month, nor more than two (2) years, at
the discretion of the court, without prejudice to prosecution under other laws.

TITLE II
PROVISIONS FOR IMPLEMENTATION

Section 521. Mandatory Review Every Five Years. - Congress shall undertake a mandatory review
of this Code at least once every five (5) years and as often as it may deem necessary, with the
primary objective of providing a more responsive and accountable local government structure.

Section 522. Insurance Coverage. - The Government Service Insurance System (GSIS) shall
establish and administer an appropriate system under which the punong barangay, the members of
the sangguniang barangay, the barangay secretary, the barangay treasurer, and the members of the
barangay tanod shall enjoy insurance coverage as provided in this Code and other pertinent laws.
For this purpose, the GSIS is hereby directed to undertake an actuarial study, issue rules and
regulations, determine the premiums payable, and recommend to Congress the amount of
appropriations needed to support the system. The amount needed for the implementation of the said
insurance shall be included in the annual General Appropriations Act.
Section 523. Personnel Retirement and/or Benefits. - An official or employee of the national
government or local government unit separated from the service as a result of reorganization
effected under this Code shall, if entitled under the laws then in force, receive the retirement and
other benefits accruing thereunder: Provided, however, That such benefits shall be given funding
priority by the Department of Budget and Management in the case of national officials and
employees, and the local government unit concerned in the case of local officials and employees.

Where the employee concerned is not eligible for retirement, he shall be entitled to a gratuity from
the national government or the local government unit concerned, as the case may be, equivalent to
an amount not lower than one (1) month salary for every year of service over and above the
monetary value of the leave credits said employee is entitled to receive pursuant to existing laws.

Section 524. Inventory of Infrastructure and Other Community Facilities.

(a) Each local government unit shall conduct a periodic inventory of infrastructure and other
community facilities and undertake the maintenance, repair, improvement, or reconstruction
of these facilities through a closer cooperation among the various agencies of the national
government operating within the province, city, or municipality concerned.

(b) No infrastructure or community project within the territorial jurisdiction of any local
government unit shall be undertaken without informing the local chief executive and the
sanggunian concerned.

Section 525. Records and Properties. - All records, equipment, buildings, facilities, and other
properties of any office or body of a local government unit abolished or reorganized under this Code
shall be transferred to the office or body to which its powers, functions, and responsibilities are
substantially devolved.

TITLE III
TRANSITORY PROVISIONS

Section 526. Application of this Code to Local Government Units in the Autonomous Regions. - This
Code shall apply to all provinces, cities, municipalities and barangays in the autonomous regions
until such time as the regional government concerned shall have enacted its own local government
code.

Section 527. Prior Approval or Clearance on Regular and Recurring Transactions. - Six (6) months
after effectivity of this Code, prior approval of or clearance from national agencies or offices shall no
longer be required for regular and recurring transactions and activities of local government units.

Section 528. Deconcentration of Requisite Authority and Power. - The national government shall, six
(6) months after the effectivity of this Code, effect the deconcentration of requisite authority and
power to the appropriate regional offices or field offices of national agencies or offices whose major
functions are not devolved to local government units.

Section 529. Tax Ordinances or Revenue Measures. - All existing tax ordinances or revenue
measures of local government units shall continue to be in force and effect after the effectivity of this
Code unless amended by the sanggunian concerned, or inconsistent with, or in violation of, the
provisions of this Code.
Section 530. Local Water Districts. - All powers, functions, and attributes granted by Presidential
Decree Numbered One hundred ninety-eight (P.D. No. 198), otherwise known as "The Provincial
Water Utility Act of 1973," to the Local Water Utilities Administration (LWUA) may be devolved in toto
to the existing local water districts should they opt or choose to exercise, in writing, such powers,
functions and attributes: Provided, That all obligations of the local government unit concerned to the
LWUA shall first be settled prior to said devolution.

Section 531. Debt Relief for Local Government Units. -

(a) Unremitted national collections and statutory contributions. - All debts owed by local
government units to the national government in unremitted contributions to the Integrated
National Police Fund, the Special Education Fund, and other statutory contributions as well
as in unremitted national government shares of taxes, charges, and fees collected by the
local government units, are hereby written off in full.

(b) Program loans. -

(1) Program loans secured by local government units which were relent to private
persons, natural or juridical, shall likewise be written off from the books of the local
government units concerned: Provided, however, That the national government
agency tasked with the implementation of these programs shall continue to collect
from the debtors belonging to the private sector concerned.

(2) Program loans granted to local government units by national government

agencies and which were utilized by the local units for community development,
livelihood, and other small-scale projects are hereby written off in full.

(c) Settlement of debts due to government financing institutions (GFIs), government-owned

and controlled corporations (GOCCs), and private utilities. The national government shall
assume all debts incurred or contracted by local government units from GFIs, GOCCs, and
private utilities that are outstanding as of December 31, 1988, in accordance with the
following schemes:

(1) Debts due GFIs. - The national government may buy outstanding obligations
incurred by local government units from government financing institutions at a
discounted rate.

(2) Debts due GOCCs. - The national government may settle such obligations at
discounted rate through offsetting, only to the extent of the obligations of local
governments against the outstanding advances made by the National Treasury in
behalf of the government-owned and controlled corporations concerned.

(3) Debts Due Private Utilities. - The national government may settle these
obligations at a discounted rate by offsetting against the outstanding obligations of
such private utilities to government-owned corporation. GOCCs may in turn offset
these obligations against the outstanding advances made by the National Treasury in
their behalf.

In the case of obligation owed by local government units to private utilities which are
not indebted to any GOCC or national government agency, the national government
 may instead buy the obligations of the local government units from the private utilities
at a discounted rate, upon concurrence by the private utilities concerned.

(d) Limitations. - Obligations to the Home Development and Mutual Fund (Pag-ibig),
Medicare, and those pertaining to premium contributions and amortization payments of
salary and policy loans to the Government Service Insurance System are excluded from the
coverage of this Section.

(e) Recovery schemes for the national government. - Local government units shall pay back
the national government whatever amounts were advanced or offset by the national
government to settle their obligations to GFIs, GOCCs, and private utilities. The national
government shall not charge interest or penalties on the outstanding balance owed by the
local government units.

These outstanding obligations shall be restructured and an amortization schedule prepared,

based on the capability of the local government unit to pay, taking into consideration the
amount owed to the national government.

The national government is hereby authorized to deduct from the quarterly share of each
local government unit in the internal revenue collections an amount to be determined on the
basis of the amortization schedule of the local unit concerned: Provided, That such amount
shall not exceed five percent (5%) of the monthly internal revenue allotment of the local
government unit concerned.

As incentive to debtor-local government units to increase the efficiency of their fiscal

administration, the national government shall write off the debt of the local government unit
concerned at the rate of five percent (5%) for every one percent (1%) increase in revenues
generated by such local government unit over that of the preceding year. For this purpose,
the annual increase in local revenue collection shall be computed starting from the year
1988.

(f) Appropriations. - Such amount as may be necessary to implement the provisions of this
Section shall be included in the annual General Appropriations Act.

Section 532. Elections for the Sangguniang Kabataan. -

(a) The first elections for the sangguniang kabataan to be conducted under this Code shall
be held thirty (30) days after the next local elections: Provided, That, the regular elections for
the sangguniang kabataan shall be held one hundred twenty (120) days after the barangay
elections thereafter.

(b) The amount pertaining to the ten percent (10%) allocation for the kabataang barangay as
provided for in Section 103 of Batas Pambansa Blg. 337 is hereby reappropriated for the
purpose of funding the first elections mentioned above. The balance of said funds, if there by
any after the said elections, shall be administered by the Presidential Council for Youth
Affairs for the purpose of training the newly elected sangguniang kabataan officials in the
discharge of their functions.

(c) For the regular elections of the sangguniang kabataan, funds shall be taken from the ten
percent (10%) of the barangay funds reserved for the sangguniang kabataan, as provided for
in Section 328 of this Code.
 (d) All seats reserved for the pederasyon ng mga sangguniang kabataan in the different
sanggunians shall be deemed vacant until such time that the sangguniang kabataan
chairmen shall have been elected and the respective pederasyon presidents have been
selected: Provided, That, elections for the kabataang barangay conducted under Batas
Pambansa Blg. 337 at any time between January 1, 1988 and January 1, 1992 shall be
considered as the first elections provided for in this Code. The term of office of the
kabataang barangay officials elected within the said period shall be extended
correspondingly to coincide with the term of office of those elected under this Code.

Section 533. Formulation of Implementing Rules and Regulations. -

(a) Within one (1) month after the approval of this Code, the President shall convene the
Oversight shall formulate and issue the appropriate rules and regulations necessary for the
efficient and effective implementation of any and all provisions of this Code, thereby ensuring
compliance with the principles of local autonomy as defined under the Constitution.

(b) The Committee shall be composed of the following:

(1) The Executive Secretary, who shall be the Chairman;

(2) Three (3) members of the Senate to be appointed by the President of the Senate,
to include the Chairman of the Committee on Local Government;

(3) Three (3) members of the House of Representatives to be appointed by the

Speaker, to include the Chairman of the Committee on Local Government;

(4) The Cabinet, represented by the following:

(i) Secretary of the Interior and Local Government;

(ii) Secretary of Finance;

(iii) Secretary of Budget and Management; and

(5) One (1) representative from each of the following:

(i) The League of Provinces;

(ii) The League of Cities;

(iii) The League of Municipalities; and

(iv) The Liga ng mga Barangay.

(c) The Committee shall submit its report and recommendation to the President within two (2)
months after its organization. If the President fails to act within thirty (30) days from receipt
thereof, the recommendation of the Oversight Committee shall be deemed approved.
Thereafter, the Committee shall supervise the transfer of such powers and functions
mandated under this Code to the local government units, together with the corresponding
personnel, properties, assets and liabilities of the offices or agencies concerned, with the
 least possible disruptions to existing programs and projects. The Committee shall likewise
recommend the corresponding appropriations necessary to effect the said transfer.

For this purpose, the services of a technical staff shall be enlisted from among the qualified
employees of Congress, the government offices, and the leagues constituting the
Committee.

(d) The funding requirements and the secretariat of the Committee shall be provided by the
Office of the Executive Secretary.

(e) The sum of Five million pesos (P5,000,000), which shall be charged against the
Contingent Fund, is hereby allotted to the Committee to fund the undertaking of an
information campaign on this Code. The Committee shall formulate the guidelines governing
the conduct of said campaign, and shall determine the national agencies or offices to be
involved for this purpose.

TITLE IV
FINAL PROVISIONS

Section 534. Repealing Clause. -

(a) Batas Pambansa Blg. 337, otherwise known as the Local Government Code, Executive
Order No. 112 (1987), and Executive Order No. 319 (1988) are hereby repealed.

(b) Presidential Decree Nos. 684, 1191, 1508 and such other decrees, orders, instructions,
memoranda and issuances related to or concerning the barangay are hereby repealed.

(c) The provisions of Sections 2, 3, and 4 of Republic Act No. 1939 regarding hospital fund;
Section 3, a (3) and b (2) of Republic Act No. 5447 regarding the Special Education Fund;
Presidential Decree No. 144 as amended by Presidential Decree Nos. 559 and 1741;
Presidential Decree No. 231 as amended; Presidential Decree No. 436 as amended by
Presidential Decree No. 558; and Presidential Decree Nos. 381, 436, 464, 477, 526, 632,
752, and 1136 are hereby repealed and rendered of no force and effect.

(d) Presidential Decree No. 1594 is hereby repealed insofar as it governs locally-funded
projects.

(e) The following provisions are hereby repealed or amended insofar as they are inconsistent
with the provisions of this Code: Sections 2, 16 and 29 of Presidential Decree No. 704;
Section 12 of Presidential Decree No. 87, as amended; Section 52, 53, 66, 67, 68, 69, 70,
71, 72, 73, and 74 of Presidential Decree No. 463, as amended; and Section 16 of
Presidential Decree No. 972, as amended, and

(f) All general and special laws, acts, city charters, decrees, executive orders, proclamations
and administrative regulations, or part or parts thereof which are inconsistent with any of the
provisions of this Code are hereby repealed or modified accordingly.

Section 535. Separability Clause. - If, for any reason or reasons, any part or provision of this Code
shall be held to be unconstitutional or invalid, other parts or provisions hereof which are not affected
thereby shall continue to be in full force and effect.
Section 536. Effectivity Clause. - This Code shall take effect on January first, nineteen hundred
ninety-two, unless otherwise provided herein, after its complete publication in at least one (1)
newspaper of general circulation.

Approved: October 10, 1991