Dy: Local Government Code amendment will help LGUs address role better

MANILA, Philippines — House Speaker Faustino “Bojie” Dy III has admitted that there is a need to amend the Local Government Code of 1991, so local government units (LGUs) can address their roles better amid changes in their responsibilities.

In a speech delivered at the League of Municipalities of the Philippines (LMP) General Assembly on Tuesday, Dy said that he and the House had heard the call from mayors to amend Republic Act No. 7160 so that it would be more attuned to the responsibilities placed on the local executives’ shoulders.

“Our dear mayors, we have heard your voice and it is clear to the House what your call is.  Based on your own consultation and survey, it is very clear that we need to revise and update our 1991 Local Government Code,” Dy said in Filipino.

READ: Bill extending term of barangay execs approved on third reading

“It has been three decades since this law was passed, and during that time, there have been significant changes to governance, economy, and the responsibility of our LGUs.  It is good to look back and scrutinize this law, because after the Mandanas-Garcia ruling, the responsibility of local governments in delivering service to our people increased,” he added.

The Mandanas-Garcia Ruling, named after petitioners Batangas Governor Hermilando Mandanas and former Bataan Governor Enrique Garcia Jr., is a Supreme Court decision that sided with the two officials’ stand on how the internal revenue allotment (IRA) or the income-share of LGUs were being computed.

Before the decision, not all taxes were used as a basis for the IRA.  But SC ruled that the IRA should come from 40 percent of all national taxes collected by the Bureau of Internal Revenue (BIR) and the Bureau of Customs — effectively increasing the budget allocated to LGUs.

With this, the national government ceded some of its functions to LGUs.

IN THE KNOW: The Supreme Court’s Mandanas ruling https://newsinfo.inquirer.net/1534080/in-the-know-the-supreme-courts-mandanas-ruling

However, since the ruling was implemented in 2022, R.A. No. 7160 has not been amended, as the only amendment to the law came in February 1998, under R.A. No. 8542, which only clarified the term of office of all elective officials.

According to Dy, despite the ruling and the increased responsibilities passed to LGUs, not many resources were channeled to local governments, which is why the House should explore amendments to the Local Government Code, particularly provisions on the National Tax Allotment.

“However, the truth is that while your responsibilities have increased, this does not mean that you received additional resources or funding sources.  And unfortunately, you are first to feel the impact — if you lack health workers, classrooms, and if a barangay needs help but you do not have funds,” he said.

“That’s why it’s correct to discuss and study reforms on the Local Government Code, especially when it comes to the National Tax Allotment and the fiscal powers of our municipalities.  If LGUs have a greater responsibility, they should have enough resources to fulfill it,” he added.

If there are enough funds for LGUs, Dy said that more programs can be implemented, which will redound to families in different communities.

“We all know that people rely on mayors to solve the problems of their constituents,” he said.

“And if we have enough funds, we can do more, a lot more projects can be implemented, and more families can be assisted.  I just want to clarify that this is not merely about having funds. It is a discussion on our ‘capacity to serve.’  Because at the end, our goal is the same — to give our people better lives,” he added.

Over the years, there have been several proposals approved by the House regarding Local Government Code amendments.  Last June 2025, the House of the 19th Congress approved on third reading a bill that seeks to extend the term of elected officials under the Barangay and Sangguniang Kabataan (SK) system.

Under the bill, Section 42 of R.A. No. 7160 will be amended to hold the next Barangay and Sangguniang Kabataan Elections by the second Monday of May 2029, while the elected barangay official will now serve six-year terms instead of just three years.

However, the measure was not acted upon by both the House and the Senate before the 19th Congress adjourned.

It is unclear though how the House will tackle such amendments, when several pressing bills, like the suspension of excise tax collection on fuel products, the abolition of travel taxes, and the proposed anti-political dynasty bill, will take up much of the time during plenary debates.

Congress will adjourn its session by March 20 and will resume by May 4. /mr