Law on income classification of LGUs sought

BOKOD, Benguet September 18 – The Cordillera Regional Development Council (RDC-CAR) and the Regional Peace and Order Council (RPOC) passed a resolution urging the Congress of the Philippines to upgrade and institutionalize the process of income classification of provinces, cities and municipalities.

The RDC-CAR and RPOC-CAR joint resolution stated there is a snowballing clamor to increase the income classification of local governments which has not been allegedly adjusted since 2008 or over a decade ago.

The resolution noted the income classification of provinces, cities and municipalities in the country serves as the basis for the determination of financial capability of local governments to provide, in full or in part, the funding requirements of development projects and other priority needs in their localities.

Further, the RDC-CAR and RPOC-CAR stipulated that the income classification of local governments can also be used as a factor in the allocation of national and other financial grants and is important in the fixing of maximum tax ceilings imposed by the local governments; the determination of administrative and statutory aid, financial grants, and other forms of assistance to local governments; the establishment of the salary scales and rates of allowances, per diems, and other emoluments officials and personnel may be entitled; the implementation of personnel policies on promotions, transfers, details or secondment and related matters at the local government levels; the formulation and execution of local government policies and the determination of financial capability of local governments to undertake developmental programs and priority projects.

According to the resolution, the advantages of upgrading the income classification of local governments are the corresponding increase in the Internal Revenue Allotment (IRA); increase in salaries of officials and personnel; sustained implementation of Magna Carta of personnel for the 4th to 6th class local governments and provision of mandatory services.

On the other hand, the resolution claimed that the disadvantages of the income classification are the lowering of the personnel services cap from 55 percent to 45 percent and the requirement of higher equity when the local governments apply for a loan.

Aside from the advantages of the proposed income classification, the RDC-CAR and RPOC-CAR added that other considerations which warrant the upgrading of local government income are the reported increasing population based on the 2015 census; selection of programs and projects based on LGU income classification and availment of loans by the LGU which is based on their capacity to pay back.

Despite the identified disadvantages, the resolution asserted that upgrading the income class of the LGUs will bring them confidence in fulfilling the funding requirements of development programs and projects in their own locality.

Section 9 of Executive Order No. 249, series of 1987 lodges on the Secretary of Finance the authority to review the income ranges, at least once every four years, provided that the finance department shall recommend appropriate changes or revisions to the proper authority, such that the income classification may continue to conform with prevailing economic conditions and the overall financial status of the local governments. By Dexter A. See

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