Philippine Local Government Code 1991

Law Summary

Operative Principles of Decentralization

Effective allocation of powers and resources to local units.
Efficient, accountable, and dynamic organizational structures.
Appointment and removal based on merit and fitness.
Local governments have power to generate revenue, including broadening sources.
Provinces ensure component units act within powers.
Local governments may group or coordinate services.
Private sector participation encouraged.
Ecological balance shared between local and national governments.

Scope of Application

Applies to all provinces, cities, municipalities, barangays, and other political subdivisions.

Interpretation Rules

Powers of local units liberally interpreted in favor of devolution.
Tax ordinances construed strictly for benefit of taxpayers.
General welfare provisions liberally construed.
Existing rights governed by original terms.
Customs may be applied in controversies absent law or precedent.

Creation, Division, and Abolition of Local Government Units

Creation, division, merger, abolition by Congress law or local ordinance.
Based on viability indicators: income, population, land area.
Plebiscite required for changes; conducted by Comelec.
Selection of local government site subject to considerations of centrality and accessibility.
Government centers to consolidate offices where possible.

Naming Local Government Units and Public Places

Name changes require consultation with Philippine Historical Commission.
No naming after living persons; no change more than once every 10 years.
Changes effective after plebiscite.

Powers and Attributes of Local Government Units

Political and corporate nature; powers for governance and corporate functions.
Exercise powers necessary for general welfare including promotion of health, safety, economic prosperity, culture, and environment.
Devolution of national functions including health, social welfare, agriculture, infrastructure.
Capability to generate and apply resources including taxing powers and property management.
Power of eminent domain with provisions for just compensation.
Power to reclassify agricultural lands within specified limits.
Authority to close or open local roads by ordinance with notice.

Relations with National Government

President exercises general supervision ensuring local units act within powers.
National agencies coordinate with local governments and assist upon request.
Projects affecting environment require prior consultation with local governments.

Local Legislation

Local legislative bodies are prescribed: sangguniang panlalawigan, panlungsod, bayan, and barangay.
Presiding officers and rules of procedure defined.
Ordinance approval process involves chief executive with veto power.
Review powers exist for higher-level local governments over component units.

Human Resources and Development

Local government units design staffing patterns within Civil Service minimum standards.
Chief executives responsible for personnel actions.
Prohibitions on appointments of relatives within fourth degree.
Fixing compensation with limits.
Grievance procedures and disciplinary rules in place.
Prohibitions on prohibited business and personal interests.
Local officials may be removed or suspended following due process.

Local School Boards

Established in every province, city, and municipality.
Composition includes local chief executives, school superintendents, PTA officers, and other representatives.
Manage supplementary budgets for education.

Local Health Boards

Established per local government unit.
Chaired by local chief executive and with health officer, sanggunian committees, and private sector representatives.
Advise on health matters and budget allocation.

Local Development Councils

Multi-sectoral councils at each local government unit level.
Composed of elected officials, barangay representatives, non-government organizations, and others.
Formulate development plans, appraise projects, coordinate implementation.

Local Peace and Order Council

Established per province, city, and municipality in accordance with national directives.

Autonomous Special Economic Zones

Establishment subject to local government concurrence.

Settlement of Boundary Disputes

Guidelines for referring disputes to appropriate sanggunians based on jurisdiction.
Can be elevated to Regional Trial Court if unresolved.

Initiative and Referendum

Registered voters can propose, enact, amend ordinances via initiative.
Requires signature thresholds and procedural requirements.
Referendum allows voters to approve or reject ordinances.
Limitations on frequency and scope apply.

Local Taxation and Fiscal Matters

Local units can impose taxes, fees, and charges within prescribed limits.
Definitions of terms such as business, amusement, gross receipts, etc., provided.
Restrictions on types of taxes local units may impose.
Specific provisions for provinces, cities, municipalities, and barangays.
Community tax established.
Rules on collection, surcharges, interest, and appeals detailed.

Real Property Taxation

Administration primarily by provinces and cities; respectively defined terms.
Fair market value basis for appraisal.
Owners required to declare values periodically.
Classification of land and assessment levels specified.
Local Board of Assessment Appeals and Central Board of Assessment Appeals established for appeals.
Procedures for levy, sale, redemption, and collection defined.

Shares of Local Government Units in National Taxes and Wealth

Local units entitled to internal revenue allotments, growing from 30% to 40%.
Shares allocated among provinces, cities, municipalities, and barangays based on population, land area, and equal sharing.
Local governments share in proceeds from national wealth exploitation.

Credit and Financing

Local units may incur debt and obtain loans for development projects.
Bonds and other securities may be issued.
May enter contracts with private sector for public infrastructure under specified conditions.

Local Fiscal Administration

Principles governing local government financial affairs set.
Funds must be appropriated for specific purposes.
Separate accounts and funds prescribed.
Budget preparation, authorization, and revisions process detailed.
Penalties and remedies for violations included.

Property and Supply Management

Procurement rules require competitive bidding with exceptions.
Committee on Awards and Local PBAC created.
Procedures for emergency and negotiated purchases.
Property disposal and transfer rules.

Local Government Units: Barangay, Municipality, City, Province

Definition, creation, and role of barangay as basic political unit.
Barangay officials: punong barangay, sangguniang barangay (legislative body), sangguniang kabataan (youth council), lupong tagapamayapa (conciliation panel).
Procedures for dispute resolution via katarungang pambarangay.
Composition and functions of municipal, city, and provincial governments, including officials and powers.

Leagues of Local Government Units

Formation of leagues (barangay, municipality, city, province) for mutual assistance.
League of local elective officials organized similarly.

Penal Provisions

Penalties for various violations including failure to post ordinances, prohibited business interest, assessment abuses, and improper procurement.

Final Provisions

Mandatory review of Code every 5 years.
Insurance coverage for barangay officials.
Provisions on personnel retirement.
Implementation and transitory provisions for transition and devolution of functions.

This summary captures the key provisions, scope, definitions, procedural mechanisms, legal principles, and penalties in the Local Government Code of 1991.