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Manila Bulletin devider Philippines devider National devider Senate approves automatic income classification bill on final reading

Senate approves automatic income classification bill on final reading

Published Aug 7, 2023 02:38 pm

The Senate has approved on Monday, August 7, the proposed law that seeks to institutionalize the automatic income classification of provinces, cities, and municipalities on third and final reading.

Sen. Joseph Victor “JV” Ejercito principal author and sponsor of Senate Bill No. 2165, thanked his colleagues for supporting the measure. The bill received 22 affirmative votes, two negative votes and no abstentions.

Senate Minority Leader Aquilino “Koko” Pimentel III and Sen. Risa Hontiveros both voted against the measure.

“Through constructive collaboration and thorough deliberation, we have ensured that this legislation upholds the principles of transparency, accountability, and balanced governance, all for the welfare and safeguarding the interest of our local government units (LGUs),” said Ejercito, chairman of the Senate Committee on Local Government.

The House of Representatives has approved its version of the measure last March.

The measure particularly seeks to set the income thresholds for provinces, cities, and municipalities and empower the Secretary of Finance to regularly reclassify LGUs and revise income ranges in consultation with LGU leagues.

The measure is included as one of President Ferdinand Marcos Jr.’s legislative priorities.

According to Ejercito, no LGU would be downgraded under the said measure unless it falls below its income range during the next reclassification.

The final version of the measure also sought to address redundant limitations between the Salary Standardization Law of 2019 and the Local Government Code of 1991.

Thus, he said this enables LGUs to exercise their administrative autonomy in streamlining their organizational structures and make them more efficient and responsive to their respective service delivery requirements.

The latest income reclassification was implemented in 2008, shortly before the issuance of an adverse Opinion from the Department of Justice (DOJ) on the power of the Secretary of Finance to adjust the income ranges under Executive Order No. 249, dated July 26, 1987.

According to Ejercito, the current income classification of LGUs is based on outdated revenue figures from their 2004-2007 Financial Statements.

In explaining his negative vote, Pimentel said he believes the delegation of legislative power to the secretary of the Department of Finance (DOF) is unnecessary because the bill will achieve its objective of updating income classification even without it.

This legislative power, Pimentel said has been exercised by the Legislative department since the 1930s.

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Senate of the Philippines income classification local government units
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