LAWS, REGULATIONS AND REGULATORY AGENCIES

LAWS, REGULATIONS
AND
REGULATORY AGENCIES
(LOCAL GOVERNMENT UNITS)
Submitted by:
Elegores, Razel Corin
Meneses, Eumaida
Pascua, Karen
Pineda, Jan Marco
Quintos, Jan Raine
Santiago, Jesselle

Submitted to:

Mr. John Evander Cainip

Instructor

October 2021

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TABLE OF CONTENTS
Title: Laws, Regulations and Regulatory Agencies...................................................................................... 1
Table of Contents ........................................................................................................................................... 2
1. General- Local Government Units… ................................................................................................. 3
A. Objectives .....................................................................................................................................4
B. Roles, Structure and Authorities ................................................................................................... 5
C. Key Applicable Laws.................................................................................................................... 9
D. Key Regulatory Requirements and Penalties for Non-Compliance .............................................14
E. Latest News and Updates .............................................................................................................. 21

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What is LGU (Local Government Unit)?

The UN (1962) defines local government as “political subdivision of a nation or state” Local
government refers to political administrative divisions of a state. It pertains to the activity by which local
officials both elected and appointed, implement the goals and manage the resources of the local government
unit. Autonomy of local government unit (sec.25, Art.II &Sec 2 and 3 Art.X of constitution) The Constitution
mandated the Congress to “enact a local government code” Local Government Code of 1991 (RA 7610)
Practicable element of the national government for local functions

In the Philippines local government is composed and divided into three levels:
❖ Provinces and independent cities
The largest unit in the political structure of the Philippines
❖ Cities and municipalities
Cities are divided in 3 classes which are the highly urbanized, the component cities and lastly to
their administrative supervision
While on the other hand municipality is define as a subsidiary of the province which consist of a
number of barangays within its territorial boundaries, one of which is the seat of government found at
the town proper poblacion).
❖ Barangays
The smallest political unit into which cities and municipalities in the Philippines are divided. It’s
the basic unit of the Philippine political system.
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According to the history, cities, municipalities and provinces of today evolved from the barangays of pre-
Spanish times, the pueblos and cabildos/ayuntamiento of the Spanish colonial days and the townships of the
American regime.

CHARACTERISTIC OF LOCAL GOVERNMENT UNITS

1. It must exist as an organized entity.

2. It must possess governmental accountability to the public at large with official
3. It must have substantial autonomy

OBJECTIVES:
The objective of local government is-
A. To provide democratic and accountable government for local communities;
B. To ensure the provision of services to communities in sustainable manner;
C. To promote social and economic development
D. To promote a safety and economic development
E. To promote a safe and healthy environment; and
F. To encourage the involvement of communities and community organizations in the matter of local government

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ROLES, STRUCTURE AND AUTHORITIES

Local Government refers to political administrative divisions of a state.

This is within the act of physically reaching to the citizens it governs with officials elected if not appointed by elected
officials.
LOCAL AUTONOMY - Is the ability of local governments to have an independent impact on the well-being of their
citizens.
DECENTRALIZATION - It is the transfer of power, authority or responsibility or the discretion to plan, decide and
manage from central to local levels; administrative and sectoral.
FUNCTIONS OF LGU
1. Legislative Function
2. Executive Function
3. Quasi-judicial Function
4. Taxation Function
5. Local Budget Preparation
6. Exercises the power of eminent domain
7. Maintenance and Protection of Public Property

STRUCTURE OF LOCAL GOVERNMENT UNITS

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LOCAL GOVERNMENT UNITS

These are institutional units whose fiscal, legislative and executive authority extends over the smallest
geographical areas distinguished for administrative and political purposes. The Philippines is divided into units of
different sizes -- known as political subdivisions. These are autonomous regions, provinces, municipalities & cities,
and barangays. These local governments are agencies of the national government in the matter of collection of taxes,
law enforcement, and other governmental functions, which may be delegated by the national government to these local
governments.

PROVINCE
The provincial government is the largest political unit in the Philippines. It takes care of the function so which
affect the people of a certain province. It possesses the following powers ---
1.) to acquire and transfer real and personal properties
2.) to enter into contracts, including those incurring obligations, which are expressly provided by law; and
3.) to exercise such other rights and incur such other obligations as are expressly authorized by law.

AUTHORITIES
There are 81 provinces in the Philippines. Which are classified according to their average income for five
consecutive years. The higher the income of the province, the higher is its classification.
A province is governed by the governor and a legislature known as the Sangguniang Panlalawigan. A province
elects its executives -- the governor, vice governor, and the members of the provincial board (vocales). The rest of the
provincial officials -- like the provincial treasurer, provincial assessor, district auditor, judges of the Regional Trial
courts, provincial fiscal, division superintendent of schools, district health officer, district engineer, and register of
deeds -- are all appointed by the corresponding departments of the national government.

ROLES
The provincial board is the law-making body of the province, with the provincial governor serving as the presiding
officer. Some of its most important functions are as follows:
a.) it passes laws for the welfare of the municipalities and cities within its jurisdiction;
b) it prepares and approves the provincial budget;
c) it appropriates money for provincial purposes;
d) it exercises the power of eminent domain; and
e) it provides for the maintenance of equipment and buildings for provincial purposes.
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CITIES AND MUNICIPALITIES

A municipality is a local government unit (LGU) in the Philippines which is called town in its archaic term: a
municipality has the function of a town since its inception. It is a public corporation created by an act of congress and
is governed by the Municipality Law, which defines its duties and powers. It is distinct from city, which is a different
category of local government unit.
A city is also one of the units of local government in the Philippines. All Philippine cities are chartered cities,
whose existence as corporate and administrative entities is governed by their own specific municipal charters. The
charter creates the city, defines its boundaries, provides its system of government, and defines the powers and duties of
its officials.

Municipalities have some autonomy from the National Government, they are classified according to their
average annual income for the last four fiscal years. They have been granted corporate personality enabling them to
enact local policies and laws, enforce them, and govern their jurisdictions. They can enter into contracts and other
transactions through their elected and appointed officials and can tax. They are tasked with enforcing all laws, whether
local or national but National Government assists and supervises them to make sure that they do not violate national
law.
Cities are entitled to at least one representative in the House of Representatives if its population reaches
250,000, they are classified according to average annual income of the city based on the previous four calendar years.
They are allowed to use a common seal and as corporate entities, cities have the power to take, purchase, receive, hold,
lease, convey, and dispose of real and personal property for its general interests, condemn private property for public
use contract and be contracted with, sue and exercise all the powers conferred to it by Congress.

AUTHORITIES AND ROLES

A municipality shall mainly have a mayor (alkalde), a vice mayor (bise alkalde) and members (kagawad) of the
legislative branch Sangguniang Bayan alongside a secretary to the said legislature. The municipal mayor is the chief
executive officer of the municipal government and shall determine guidelines on local policies and direct formulation
of development plans. These responsibilities shall be under approval of the Sangguniang Bayan. The vice mayor shall
sign all warrants drawn on the municipal treasury, which in short serves as the legislative.
The city elective officials are the mayor, vice mayor, and the members of the board of councilors. The mayor is
the executive official of the city, aided by the appointive heads of the various departments. The vice mayor serves as
the presiding officer of the Sangguniang Panlungsod (city council), which serves as the city's legislative body. Upon
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receiving their charters, cities also receive a full complement of executive departments to better serve their
constituents. Some departments are established on a case-by-case basis, depending on the needs of the city.

The municipal council is the lawmaking body of a municipality and is composed of the mayor, vice mayor, and
the councilors. Each councilor is in-charge of a village or barangay. Some of the more important mandatory powers of
the municipal council are the following:
1) to fix the salaries of all municipal offices and employees, except the treasurer, teachers in the public schools, and
staff of national government agencies assignee to the municipality;
2) to provide for expenses necessary to carry out the functions of the municipality;
3) to provide for buildings adequate for municipal uses, including school houses;
4) to provide for the levy and collection of taxes, fees, and charges as sources of municipal revenue; and
5) to establish and maintain an efficient police department and an adequate municipal jail.
The council is the lawmaking body of a city. Among its important functions are as follows:
1)to levy and collect taxes in accordance with law;
2) to enact ordinances;
3) to provide for public works constructions and for the maintenance of a local police force;
4) to establish fire zones within the city and to regulated the type of building which may be constructed
within each zone; and
5) to provide for the protection of the inhabitants from public calamities and to provide relied in times of
emergency. There are 67 chartered cities in the Philippines.

BARANGAY

A barangay, historically referred to as barrio, is the smallest administrative division in the Philippines and is the
native Filipino term for a village, district, or ward. Municipalities and cities in the Philippines are subdivided into
barangays. It is sometimes informally subdivided into smaller areas called purok, or barangay zones consisting of a
cluster of houses for organizational purposes. 42,046 barangays As of March 2021, there are 42,046 barangays
throughout the Philippines. They are public corporations and so, they can sue and be sued in court; can enter into contracts, can
acquire and hold all kinds of property; and can exercise such powers or perform such acts as are provided by law.

AUTHORITIES AND ROLES

The Barangay council is considered to be a local government unit, similar to the provincial and the municipal
government. The modern barangay is headed by elected officials, the topmost being the Punong Barangay or the

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Barangay Chairperson (addressed as Kapitan; also known as the Barangay Captain). The Kapitan is aided by the
Sangguniang Barangay (Barangay Council) whose members, called Barangay Kagawad ("Councilors"), are also
elected. As chief executive, the barangay captain is its recognized leader. He enforces all the laws and ordinances
applicable to his constituency. He may organize fire brigades, preside over all meetings both of the barangay council
and assembly, organize groups of citizens to fight criminality and brigandage, and approve all payments from barangay
funds.

The Barangay Justice System or Katarungang Pambarangay is composed of members commonly known as
Lupon Tagapamayapa (Justice of the peace). Their function is to conciliate and mediate disputes at the Barangay level
to avoid legal action and relieve the courts of docket congestion.
A tanod, or barangay police officer, is an unarmed watchman who fulfills policing functions within the barangay.
The number of barangay tanods differs from one barangay to another; they help maintain law and order in the
neighborhoods throughout the Philippines. Funding for the barangay comes from their share of the Internal Revenue
Allotment (IRA) with a portion of the allotment set aside for the Sangguniang Kabataan. The exact amount of money is
determined by a formula combining the barangay's population and land area.

Key Applicable Laws

“LOCAL GOVERNMENT CODE 1991”

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.
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.

➢ responsive and accountable local government structure instituted through a system of decentralization

➢ powers, authority, responsibilities, and resources.

SECTION 4. Scope of Application.

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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.

Territorial and Political Subdivisions

NATIONAL
GOVERNMENT

LOCAL
GOVERNMENT

PROVINCES CITIES MUNICIPALITIES BARANGAYS

SECTION 5. Rules of Interpretation.

(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

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General Powers and Attributes of Local Government Units
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 (b) Population (c) Land Area

It must be sufficient, based on It shall be determined as the total It must be contiguous unless it
acceptable standards, to provide number of inhabitants within the comprises two (2) or more
for all essential government territorial jurisdiction of the islands or is separated by a local
facilities and services and local government unit government unit independent of
special functions commensurate concerned; and the others; properly identified by
with the size of its population, as metes and bounds with technical
expected of the local descriptions; and sufficient to
government unit concerned. provide for such basic services
and facilities to meet the
requirements of its populace.

"Section 450. Requisites for Creation. -

(a)A municipality or a cluster of barangays may be converted into a component city if it has a locally generated
average annual income, as certified by the Department of Finance, of at least One hundred million pesos
(P100,000,000) for the last two (2) consecutive years based on 2000 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 Land Management
Bureau; or
❑ (ii)a population of not less than one hundred fifty thousand (150,000) inhabitants, as certified by the National
Statistics Office.
(c)The average annual income shall include the income accruing to the general fund, exclusive of special funds,
transfers, and non-recurring income."

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.

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.
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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.

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

(1) For a Barangay:

• Agricultural support services
• Health and social welfare services
• Services and facilities
• Maintenance of katarungang pambarangay;
• Maintenance of barangay roads and bridges and water supply systems.
• Infrastructure facilities
• Information and reading center; and
• Satellite or public market

(2) For a Municipality:

• Extension and on-site research services and facilities related to agriculture and fishery activities, quality control
of copra and improvement and development of local distribution channels,
• Pursuant to national policies and subject to supervision, control, and review of the DENR, implementation of
community-based forestry projects.
• Health services
• Social welfare services
• Information services
• Solid waste disposal system or environmental management system and services or facilities related to general
hygiene and sanitation
• Municipal buildings, cultural centers, public parks including freedom parks, playgrounds, and other sports
facilities and equipment, and other similar facilities
• Infrastructure facilities intended primarily to service the needs of the residents of the municipality, and which
are funded out of municipal funds.
• Public markets, slaughterhouses, and other municipal enterprises.
• Public cemetery
• Tourism facilities and other tourist attractions
• Sites for police and fire stations and substations and municipal jail.

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(3) For a Province:
• Agricultural extension and on-site research services and
• Industrial research and development services,
• 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
• health services
• Social welfare services
• Provincial buildings, provincial jails, freedom parks and other public assembly areas, and similar facilities.
• Infrastructure facilities intended to service the needs of the residents of the province
• Programs and projects for low-cost housing and other mass dwellings, except those funded by the Social
Security System (SSS), Government Service Insurance System (GSIS), and the Home Development
• Investment support services
• Upgrading and modernization of tax information and collection services through the use of computer hardware
and software and other means;
• Inter-municipal telecommunications services, subject to national policy guidelines; and
• 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:
• Adequate communication and transportation facilities;
• Support for education, police and fire services and facilities;

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.
LOCAL TAXES AS TO IMPOSING AUTHORITY
❑ Provincial Taxes
• Real property tax and other related taxes
• Other privilege taxes
❑ Municipal Taxes
• Community Tax
• Local Business Tax

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❑ Barangay Taxes
• Tax on small retailers

SECTION 22. Corporate 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.
(c) 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.
(d) Local government units shall enjoy full autonomy in the exercise of their proprietary functions and in the
management of their economic enterprises, subject to the limitations provided in this Code and other applicable laws.

Key Regulatory Requirements & Penalties for Non-Compliance

BUSINESS REGISTRATION
• BARANGAY
Barangay Clearance
• Barangay Clearance is one of the permits or documents required when registering a new business in the
Philippines. This certificate is also needed when renewing your expired Mayor’s Permit or Business License,
changing your business location, and changing a new business commercial name.

Steps in Acquiring Barangay Clearance

1. Prepare your business documents.
2. Go to Barangay Hall or to the Office of the Barangay Captain.
3. Pay your Business Clearance Fee.

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4. Claim your Barangay Business Permit.
• CITY/MUNICIPALITY
Mayor’s Permit
• Securing a Mayor’s Permit is one of the requirements for every business or company to operate in the
Philippines. Each municipality has different procedures depending on the of the ordinance of the city or
municipality.

Steps in Securing Mayor’s Permit

1. Secure the initial requirements
2. Secure permits and clearances
3. File your Application Form along with the other requirements
4. Procure a Community Tax Certificate/Cedula
5. An assessor will assess your application fees
6. Submit your application requirements
7. Pay the necessary payment fees for the permits and licenses
8. Obtain a Fire Safety Inspection Permit from the designated
9. Obtain a Temporary Sanitary Permit
10. Submit all requirements, along with the Fire Safety Inspection Permit
11. Release of Mayor’s Permit

REGULATION OF BUSINESSES BY LGU

• Provided in The Local Government Code of the Philippines also known as the “Local Government Code of
1991”

Relevant Provisions on Revenue Regulation of LGU

➢ SECTION 134 - the province may levy only the taxes, fees, and charges.
➢ SECTION 142 - municipalities may levy taxes, fees, and charges not otherwise levied by provinces.
➢ SECTION 151 - 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
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➢ SECTION 152 - The Barangays may levy taxes, fees, and charges which shall exclusively accrue to them.
➢ SECTION 147 - The municipality may impose and collect such reasonable fees and charges on business and
occupation, 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 153 - Local government units may impose and collect such reasonable fees and charges for services
rendered.
TAXING POWERS OF LOCAL GOVERNMENT UNITS
➢ SECTION 128 - The provision herein shall govern the exercise by provinces, cities, municipalities, and
Barangays of their taxing and other revenue-raising powers

Fundamental Principles
1. Uniform in each local government unit.
2. Equitable and based as far as practicable on the taxpayer's ability to pay, levied and collected only for public
purposes, not to be unjust, excesses, oppressive, or confiscatory and not be contrary to law, public policy,
national economic policy or in the restraint of trade.
3. Collections shall in no case be let to any private person.
4. Collections shall inure solely to the benefit of, and be subject to the disposition by the local government unit
levying the tax, fee, or charge or other imposition
5. Evolves a progressive system of taxation

Provisions on the Taxing and Other Revenue Raising Powers of Local Government Units
1. Provinces
▪ Tax on Transfer of Real Property Ownership - 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 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

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▪ 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 other 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
onetwentieth (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 reference shall
be exempt from the tax herein imposed.

▪ Franchise Tax - Notwithstanding any exemption granted by any law or other special laws, the province may
impose a tax on business enjoying a franchise, at a rate 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 onetwentieth (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.

▪ 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 proceeds of the tax on sand, gravel and other quarry resources shall be distributed as follows:
o Province - Thirty percent (30%)
o Component City or Municipality where the sand, gravel, and other quarry resources are extracted -
Thirty percent (30%)
o Barangay where the sand, gravel, and other quarry resources are extracted - Forty percent (40%).

▪ Professional Tax - The province may levy an annual professional tax on each person engaged in the exercise or
practice of his profession requiring government examination as such amount and reasonable classification as the
Sangguniang Panlalawigan may determine but shall in no case exceed Three hundred pesos (P300.00).

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▪ Amusement Tax - 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.

▪ Annual Fixed Tax for Every Delivery Truck or Van of Manufacturers or Producers, Wholesalers of,
Dealers, or Retailers in, Certain Products - 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, consumers, whether directly or indirectly, within the province in an
amount not exceeding Five hundred pesos (P500.00).

2. Municipalities
• municipalities may levy taxes, fees, and charges not otherwise levied by provinces
• 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 of nature
• On wholesalers, distributors, or dealers in any article of commerce of whatever kind or nature
• On exporters, and on manufacturers, millers, producers, wholesalers, distributors, dealers or retailers of
essential commodities
• On retailers
• On contractors and other independent contractors
• On banks and other financial institutions

3. Cities
• 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

4. Barangay
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• The Barangays may levy taxes, fees, and charges which shall exclusively accrue to them
➢ Taxes - On stores or retailers with fixed business establishments with 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, at a rate not exceeding one percent (1%)
on such gross sales or receipts.
➢ Service Fees or Charges - Barangays may collect reasonable fees or charges for services rendered in
connection with the regulation or the use of Barangay-owned properties or service facilities such as palay,
copra, or tobacco dryers.
➢ 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.
➢ Other Fees and Charges
o On commercial breeding of fighting cocks, cockfighting and cockpits
o On places of recreation which charge admission fees
o On billboards, signboards, neon signs, and outdoor advertisements

Real Property Tax

• The real property tax (RPT) is an ad valorem tax on real properties such as lands, buildings, and other
improvements, and machineries imposed by provinces, cities and municipalities.
Exemption
• The following are exempted from payment of the RPT.
➢ 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
➢ 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
➢ All machineries and equipment that are actually, directly and exclusively used by local water districts and
government owned or–controlled corporations (GOCCs) engaged in the supply and distribution of water and/or
generation and transmission of electric power

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➢ All real property owned by duly registered cooperatives as provided for under RA 6938
➢ Machinery and equipment used for pollution control and environment protection

Community Tax
• Cities or municipalities may levy a community tax in accordance with the provisions of the Local Government
Code.

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 community 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).

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, on no case, shall exceed Ten thousand pesos (P10,000.00) in accordance with the following
schedule:
• 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 the 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)
• 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).

Exempted from Community Tax

• Diplomatic and consular representatives
• Transient visitors when their stay in the Philippines does not exceed three (3) months

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Common Revenues of LGUs

• Service Fees and Charges - Local government units may impose and collect such reasonable fees and charges
for services rendered.
• Public Utility 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. 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.
PENALTIES FOR NON-COMPLIANCE
➢ Surcharges and Penalties on unpaid Taxes, fees, or Charges - The Sanggunian may impose a surcharge not
exceeding twenty-five percent (25%) of the amount of taxes, fees or charges not paid on time and an interest at
the rate not exceeding two percent (2%) per month of the unpaid taxes, fees or charges including surcharges,
until such amount is fully paid but in no case shall the total interest on the unpaid amount or portion thereof
exceed thirty-six (36) months.
➢ 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.
LATEST NEWS AND UPDATES

DILG: 95% or P10.7-billion aid already distributed to eligible beneficiaries

The Department of Interior and Local Government (DILG) announced that 95% or P10.7-billion in financial aid or
assistance has been distributed by local governments in the National Capital Region (NCR) to eligible low-income
beneficiaries as of August 31, 2021.

According to DILG Secretary Eduardo M. Año, 10,663,537 beneficiaries from Metro Manila have already received
financial assistance to support them after the region was subjected to Enhanced Community Quarantine (ECQ). He
also acknowledged the local governments for their quick distribution of aid and hoped they would be able to disburse
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the remaining funds soon.

"It is a victory in the midst of the COVID-19 pandemic that local governments in Metro Manila have distributed
financial assistance to our countrymen and now 95% or P10.7-billion has been distributed," said Año.

He said, for those who have not yet received assistance, they can process and submit their pending claims to the LGU
Grievance and Appeals Committee until September 10, 2021 which is the last day of distribution before returning the
remaining funds to the National Treasury.

"Congratulations to our local governments for their rapid distribution of aid even in the midst of the spread of the Delta
variant, while continuing to enforce our health protocols," he added.

A total of P11.2-billion in financial assistance has been allocated by the national government which has provided
P1,000 to each low-income individual up to a maximum of P4,000 in assistance for an entire family affected by ECQ
in NCR since August. 6-20, 2021.

Año said six NCR cities including Manila, Caloocan, Pasig, Malabon, Navotas, and Quezon City have completed the
distribution of aid to 6,536,554 beneficiaries with a total amount of P6.5- billion in financial aid.

"We congratulate the cities in NCR that their distribution rate is 100% because it just means that the help from the
government has reached all our countrymen in need," he said.

He also added that most of the NCR local governments are almost done with the distribution of aid with a percentage
of 90% -99% such as the Cities of San Juan, Pateros City, Las Piñas City and Mandaluyong City with percentage
distributions of 99.52%, 98.85%, 96.61%, 95.61%, and 93.90%, respectively.

Meanwhile, DILG Spokesperson and Deputy Secretary Jonathan E. Malaya acknowledged the Philippine National
Police, barangay leaders, and other government agencies such as the Department of Social Welfare and Development
(DSWD) and the Department of National Defense (DND) in helping distribute aid “amid the intense threat of the more
contagious Delta variant.”

“We thank all those of us who were instrumental in distributing financial assistance for ECQ here in NCR. You are
making a huge sacrifice but in return we have helped millions of our countrymen in this pandemic, ”said Malaya.

DILG confers Manila BAYani Awards to 5 LGUs

The Department of the Interior and Local Government (DILG) has conferred the national Manila BAYani awards to
three cities and two municipalities for their strong commitment and contribution in the efforts to rehabilitate the Manila
Bay watershed area even amid the COVID-19 pandemic.

DILG Secretary Eduardo M. Año identified the national awardees to the 2020 Manila BAYani Awards and Incentives
(MBAI) program to the City of Biñan in Laguna (1st place), the City of Balanga in Bataan (2nd place), and Navotas
City (3rd place) for the city category; and the municipalities of Kalayaan in Laguna (1st place) and Baliwag in Bulacan
(2nd place) for the municipality category.

“Congratulations to our national awardees! We are inspired by your continuous commitment to comply with
environmental laws that support the rehabilitation of the Manila Bay and the objectives of the Manila Bay Clean-up
Rehabilitation and Preservation Program (MBCRPP). Ipagpatuloy n’yo ang inyong pakikiisa at pakikipagtulungan sa
rehabilitasyon ng Manila Bay,” he said.

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Spearheaded by the DILG, through the MBCRPP, the MBAI aims to recognize LGUs that have shown exemplary
performance in the implementation of their mandates and responsibilities under environmental laws relative to Manila
Bay rehabilitation. It enjoins LGUs to develop their creativity in coming up with innovative strategies to environmental
management.

Año said the five national awardees emerged as top performers among 187 local government units (LGUs) within the
Manila Bay watershed area after rigid assessment and validation on the following areas: liquid waste management,
solid waste management, informal settlers families management, and information education and communication and
institutional arrangements.

“Hindi matatawaran ang pagtugon at pakikiisa ng mga LGU na ito sa ating hangaring muling buhayin ang Manila Bay
sa pamamagitan ng MBCRPP. Ang ating paggagawad sa kanila ay isang pasasalamat at isang patunay na kinikilala
natin ang kanilang mga pagsisikap,” he said.

Año shared that assessing the 187 LGUs around the Manila Bay area for the MBAI was a challenge due to the
restrictions placed to curtail public transmission of COVID-19 yet “the DILG, both regional and national, has been
creative to ensure that stringent evaluation is executed.”

“Sa kabila ng mga hamon na kinakaharap ng ating bansa, nais namin sa DILG na huwag mawala sa radar ng mga LGU
ang rehabilitation ng Manila Bay kaya patuloy kami sa effort na ito,” he said.

The DILG Chief said that first-time winner City of Biñan received P1.5-million for topping the City category, while
the three-time finalist City of Balanga, and Navotas City received P750,000 and P500,000, respectively.

The town of Kalayaan in Laguna likewise received P1.5-million for topping the Municipality category and P750,000
for three-time winner Baliwag, Bulacan, which came in second.

Año also added that prior to the selection of national winners, regional qualifiers were also chosen through the
Regional Interagency Committee Assessment (RIAC) giving P300,000, P200,000, and, P100,000 for the top three
ranked LGUs in Regions 3 and 4A, and the National Capital Region (NCR).

Per the Mandamus issued by the Supreme Court (SC) on December 18, 2008, the DILG, DENR and 11 other national
agencies (NGAs) were mandated to rehabilitate and preserve the Manila Bay to make it fit for swimming, skin diving,
and other forms of contact recreation in its waters.

The DILG was specifically mandated by the high court to supervise the LGUs in Regions III, IV-A, and the NCR that
are within the vicinity of the Manila Bay watershed to conduct programs and activities for the rehabilitation, as well as
information and education campaigns to inform and get the public involved.
DILG: Barangay tanods not allowed to carry firearms on duty
Following a barangay tanod’s fatal shooting of a person in Tondo, the Department of the Interior and Local
Government (DILG) today said barangay tanods and other members of so-called “police auxiliary units” (PAU) are not
allowed under the law to carry firearms in the performance of their official duties and functions.

DILG Secretary Eduardo M. Año said Republic Act (RA) No. 10591 or The Comprehensive Firearms and
Ammunition Regulation Act enacted in 2012 has revoked the authority of police auxiliary units, including barangay
tanods to carry firearms, which was previously allowed by Circular 2008-013 of the National Police Commission
(Napolcom).

“While we acknowledge that barangay tanods play a complementary role to local authorities in the maintenance of the
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peace of order in their respective communities, we firmly reiterate that they are not authorized to carry any firearm in
the performance of their duties even if they own these firearms,” said Año.

He said the law is clear that registered firearms of local government units (LGUs) shall only be issued to a government
official or employee with a permanent plantilla position. “Since the barangay tanod position is not part of the plantilla,
barangay tanods are, therefore, not authorized to bear firearms while on duty,” he said.

He called on all Local Chief Executives (LCEs) to direct all barangay tanods within their respective jurisdiction not to
carry any firearm while in the performance of their duties and functions or face charges from the DILG.

Under DILG Memorandum Circular (MC) No. 2003-42, the gadgets which barangay tanods may use are the following:
nightstick with teargas with belt and holster, handcuff with holster, whistle, flashlight, raincoat, rain boots, small
notebooks and ballpens, and first-aid kits.

According to Año, if a barangay tanod feels that they are in a potentially dangerous situation they can always seek the
help of the local police or other barangay tanods. “Hindi sana humantong sa pamamaril at pagkamatay ng curfew
violator kung hindi armado ang tanod at kung kumilos siya nang naaayon lamang sa katungkulan niya,” he said.

Based on police reports, Cesar Panlaqui, a barangay tanod of Barangay 156 in Tondo, allegedly gunned down Eduardo
Geñoga along Tayuman Street last Saturday after the latter allegedly approached the former with a stick.

Filing of charges

Meanwhile, DILG Undersecretary and Spokesperson Jonathan E. Malaya reminded barangay tanods not to be reckless
and hotheaded in dealing with curfew violators and enforcing quarantine regulations.

“While we want the public to abide by health protocols, hindi dapat pairalin ang init ng ulo at maging padalos-dalos sa
pagpapatupad ng mga regulasyon. Ang lahat naman ay madadaan sa maayos na paalala at pakikipag-usap,” he said.

Malaya said the Philippine National Police (PNP) is already investigating the incident and is set to file murder charges
against the erring barangay tanod.

DILG: P16.24B or 99% of Barangay Development Fund released to LGUs

The Department of the Interior and Local Government (DILG) today confirms that a total of P16.24-billion or 99% of
the funds for the Barangay Development Program (BDP) targeting 822 barangays cleared of Communist Terrorist
Groups have already been released to the recipient local government units (LGUs) as of June 30, 2021.

DILG Secretary Eduardo M. Año said that the P16.24-billion will finance 2,276 projects in 812 barangays whose
allocations have already been approved and released by the Department of Budget and Management (DBM).

“With the P16.24-billion fund downloaded to the recipient Local Government Units nationwide, we will implement
some 2,276 projects which will benefit our kababayans in the sitios and barrios that were formerly influenced by the
Communist terrorists. These projects are tangible proof of the government’s desire to bring development to far flung
areas that have not seen government projects in a very long time,” he said.

According to the DILG Secretary, majority of the projects identified by the recipient barangays are infrastructure
projects which compose the biggest bulk of the LGSF with 926 farm-to-market roads; 516 water and sanitation
projects; 156 health stations; and 135 school buildings.
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“It is apparent na malaki ang pangangailangan sa mga komunidad ng mga proyektong pang-imprastraktura kaya tayo
po ay natutuwa na sa tulong ng BDP ay napaglaanan ang mga proyektong tulad nito,” he said.

He said that P11.611-billion has been earmarked to farm-to-market road projects; P2.386-billion for water and
sanitation system; P569-million for school buildings; P491-million for health station; P482-million for rural
electrification; and, P328-million for agricultural, livelihood and technical vocational projects.

He further said that P125.8-million are for other infrastructure projects; P110-million cost of assistance to indigent
individuals and families; P87-million for the cost of reconstruction, rehabilitation, repair and other similar projects;
P22.4-million for housing; and, P22.5-million COVID-19-related projects.

The top five regions which received the biggest allocation are Regions 6, 10, 11, 12, and 13.

As for the remaining 10 barangays, whose allocations have not yet been released yet, Año said they are in the process
of completing their documentary project requirements as prescribed in the policies and procedures under the Local
Budget Circulars issued by the DBM for the implementation of the 2021 Local Government Support Fund – Support to
Barangay Development Program (LGSF-SBDP).

The BDP is a flagship program which was conceptualized to finally address insurgency by bringing sustainable
solutions and basic services to communities in need. The total budget of P16.44-billion for the 822 barangays, which
were formerly communist strongholds, is directly released to the Provincial or City Governments and not coursed
through the National Task Force to End Local Communist Armed Conflict (NTF-ELCAC).

Monitoring of BDP projects

Meanwhile, DILG Undersecretary Jonathan Malaya, who is also the NTF-ELCAC spokesperson on BDP, said that the
Department shall conduct stringent monitoring of the more than 2,000 BDP initiatives to ensure the progress of each
project and that they are adhering to the set guidelines and standard of the law.

“These projects are relevant to the people and utilize hard-earned tax money of our working force kaya naman
titiyakan natin na ang mga BDP initiatives na ito ay maisasakatuparan at magtatagumpay,” Malaya said.

As provided in the Special Provision No. 4 of Republic Act No.11518 or 2021 General Appropriations Act, the DILG
shall monitor and evaluate the projects covered by the LGSF, which includes the SBDP. This process shall include the
monitoring and evaluation of the preparation and submission of documentary requirements and actual project
implementation.

Furthermore, Malaya said that the DILG shall also use a portion of its budget for third party monitoring to be
conducted by an accredited non-government entity.

Meanwhile, he likewise urged the public to monitor the progress of these projects by regularly visiting
https://www.ntfelcac.org/bdp-dashboard and demand transparency in the implementation of the barangay development
projects.

DoST grants P7.36 million assistance to 7 Tarlac LGUs

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TARLAC: Seven local government units (LGUs) in the province have benefited from the P7.36 million grant from
the Department of Science and Technology (DoST) for their science and technology (S&T) projects.

Recipients include the provincial government of Tarlac, which got a chunk of the aid with P2.5 million. The
municipalities of Camiling received P2.59 million, Mayantoc (P568,000), Moncada (P444,000), Victoria (P410,000)
and Pura (P355,000). Tarlac also received a P495,000 DoST aid.

DoST provincial director Karen Dañez said financial assistance was awarded to LGUs assessed in terms of condition
of their areas, sectors, livelihood, education, health and environment to identify technology innovation the department
can provide through the Grants-in-Aid of the Project Municipal Innovation through Science and Technology.

"Strengths and opportunities based on the result of the assessment helped our S&T coordinators determine the
appropriate project foreach LGU," she said.

Dañez added Camiling town, with the highest financial grant, was under a research and development collaboration
with Tarlac State University (TSU) for the product and packaging standardization of Chicharon Camiling.

"The ultimate goal is to make Chicharon Camiling the first Tarlac product to pass the Philippine National
Standards through the help of TSU and University of the Philippines Los Baños," she said. Dañez also cited the
beneficiaries of the Community Empowerment through Science and Technology (CEST) program intended for
indigenous peoples in geographically isolated and disadvantaged areas.

Under the CEST program, the municipal governments of Bamban, Mayantoc, San Clemente and San Jose will receive
a total of P5.67 million worth of S&T projects.

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