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PBBM signs into law measure institutionalizing LGU automatic income classification
PBBM signs into law measure institutionalizing LGU automatic income classification
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PBBM signs into law measure institutionalizing LGU automatic income classification
by Ellicia Del Mundo27 October 2023
Photo courtesy: Bongbong Marcos Facebook page

President Ferdinand 'Bongbong' Marcos Jr. has signed into law the measure that institutionalizes the automatic income classification of local government units (LGUs) — one of his administration's priority bills.

This was announced by the Presidential Communications Office (PCO) on its official Facebook page on Friday, Oct. 27.

"President Ferdinand R. Marcos Jr. signed into law Republic Act (RA) No. 11964 on Thursday, institutionalizing the automatic income classification of local government units (LGUs) to provide a more responsive approach to the promotion of local autonomy and to enable LGUs to realize their full economic potential," it said.

RA No. 11964 or the Automatic Income Classification of LGUs Act stated that there shall be formulated "policies and guidelines for an equitable and rational system of income classification to effectively distribute national resources based on the needs of the communities."

Provinces, cities, and municipalities shall be divided into five classes based "on the income ranges" and "on the average annual regular income for three fiscal years."

  • First-class - LGUs earning ₱200,000,000 annual average income

  • Second class - LGUs earning ₱160,000,000, or more but less than P200,000,000 average annual income

  • Third class - LGUs earning ₱130,000,000 or more, but less than ₱160,000,000 annual average income

  • Fourth class - LGUs earning ₱90,000,000 or more, but less than ₱130,000,000 annual average income

  • Fifth class - LGUs earning less than ₱P90,000,000 annual average income

The "reclassification" of provinces, cities, and municipalities shall take effect on January 1 "of the immediately succeeding year following the issuance of the table of income classification by the Secretary of Finance."

The Department of Finance has been tapped to formulate the Implementing Rules and Regulations (IRR) in coordination with the Department of Budget and Management and in consultation with LGU Leagues within three months from the Act's effectivity.

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