President Ferdinand Marcos Jr. | PHOTO: INQUIRER.net/Ryan Leagogo
President Ferdinand Marcos Jr. has signed into law Republic Act No. 11964 which automatically classifies local governments according to their income to promote local autonomy and to enable local governments to realize their full economic potential.
Under RA 11964, signed on Thursday, municipalities will be classified into five classes based on their income ranges as well as on the average annual regular income for three fiscal years preceding a general income reclassification.
First class towns should have average annual incomes of at least P200 million; second class—P160 million or more but less than P200 million; third class—P130 million or more but less than P160 million; fourth class—P90 million or more but less than P130 million; fifth class—less than P90 million.
According to the new law, the finance secretary, in consultation with the National Economic and Development Authority and the concerned local governments’ league, will have the authority to adjust the income ranges based on the actual growth rate of the annual regular income from the last income reclassification, and undertake regular income reclassification once every three years so that local governments’ income reclassification conforms with the prevailing economic conditions.
It said the first general income reclassification will be made within six months after the effectivity of the law and every three years thereafter.
Basis for assistance
The local government income classification, the new law said, would serve as the basis for the identification of administrative and statutory aids, financial grants and other forms of assistance to local governments.
It would also used to determine the local government’s capability to undertake development programs and projects, total annual supplemental appropriation for personal services of a local government, and for compensation adjustment for local governments’ personnel, pursuant to Republic Act No. 11466, or the Salary Standardization Law of 2019.
READ: Bongbong Marcos signs ‘Automatic Income Classification of LGUs Act’
The new measure would also serve as the basis for the creation of the new local government, setting numbers of elective members in the Sangguniang Panlalawigan and the Sangguniang Bayan, issuance of a free patent title to residential lands, minimum wage of domestic workers, insuring local government properties with the Government Service Insurance System, and for setting the limitation on the percentage of agricultural land area that could be reclassified and the manner of their utilization.
The first income reclassification of provinces, cities and municipalities will take effect on the first of January of the immediately succeeding year following the issuance of the table of income classification by the finance secretary, the law said. INQ