Law Summary
Periodic Classification by the Secretary of Finance
- Starting July 1, 1958, the Secretary of Finance must classify municipalities every four years based on their average income certified by the Auditor General.
Salary Limits of Municipal Officers by Class and Revenue
- Maximum annual salaries are set for municipal officers by municipality class and average revenue, specifically for:
- Mayor, Municipal Treasurer, Municipal Secretary, Chief of Police, Chief of Municipal Fire Department
- First-class municipalities have five salary subcategories based on revenue ranges
- Salaries decrease progressively from first to seventh class municipalities
- Municipal Treasurer's salary is paid partly from municipal and provincial funds; provincial boards may authorize higher provincial salary portion provided total does not exceed the fixed maximum.
- The Secretary of Finance may approve salary increases for provincial or subprovincial capitals, not exceeding the next higher salary scale or P360 increment if no higher scale exists.
Compensation of Vice-Mayor and Councilors
- Vice-Mayor and councilors may receive a per diem during council sessions, with maximum amounts decreasing by class (from P20 in first class to P6 in seventh class).
- No per diem for more than four special sessions per month.
- Vice-Mayor or acting councilor receives full mayoral salary when performing mayoral duties due to mayor's absence or disability.
Salaries of Municipal Fire Department Members
- Salaries of the chief and other municipal fire department members are fixed by the municipal council.
Municipal Permanent Public Improvement Fund
- Special fund in municipal treasury for construction and maintenance of public improvements.
- Fund includes appropriations plus a percentage of the municipal general fund, varying by class:
- 12% in first to third class
- 10% in fourth and fifth class
- 8% in sixth and seventh class
- Fund may be used for other urgent municipal needs with provincial board approval.
Limitation on Expenditure for Salaries and Wages
- Percentage limits based on municipality class on the amount of general fund revenues that can be spent for salaries and wages (excluding public works):
- 55% for first class
- 60% for second class
- 65% for third class
- 70% for fourth class
- 75% for fifth class
- 80% for sixth class
- Exceeding limits requires Secretary of Finance approval with justifiable cause.
Application of Existing Laws and Transition Provisions
- Existing laws referring to older municipal class systems are mapped to the new class definitions accordingly.
- Municipalities with less than P5,000 annual revenue are exempt from certain financial contributions under a specific Republic Act.
Salary Appropriations and Civil Service Eligibility
- Municipal officers are entitled to full salary appropriations approved in budgets, subject to maximum compensation rates aligned with civil service eligibility.
Repeals and Modifications
- Specific sections of the Revised Administrative Code and prior Acts inconsistent with this Act are repealed or amended.
Effectivity
- The Act takes effect immediately upon approval.