PS ELECT 1: LOCAL GOVERNMENT IN THE PHILIPPINES

LESSON 4
Features of the Local Government Code of 1991

Module Learning Objective:

At the end of the module, the students are expected to identify the features
of the Philippine Local Government Code of 1991

 The EDSA Revolution brought in a new era of reforms, and the move for
genuine local autonomy became more pressing.
 A new local government code was introduced that pioneered
empowerment and community organization through political devolution
and administrative de-concentration.
 This was a breakthrough, the response of the Aquino administration to the
1987 Constitution which encouraged that the state shall ensure autonomy
of local governments (Art. II Sec. 25), a fitting and enabling law came into
effect several years after, the R.A 7160 which gave birth to the Code.
 The code has devolved to LGUs the ff. functions of the central government:
- Environmental Protection
- local public works
- health
- social services
- agriculture
- tourism
 Nevertheless, the Code is so far the best legislative framework for local
autonomy especially in terms of empowerment framework and mode for
community organizing that is responsive to the actual needs of the citizens
at the local levels.

Enhancement of Powers and Responsibilities of LGUs

All Local Government Units in the Philippines exercise the following general
functions and powers which are as follows:

1. Efficient service delivery;

2. Management of the environment;
3. Economic Development;
4. Poverty alleviation;

Local governments are likewise empowered to exercise their corporate

powers as provided under Sec 22 of RA 7160. This specific section provides that
local government as a corporation shall have the following powers:
1. To have continuous succession of its corporate name;
2. To sue and be sued;
3. To have and use a corporate seal;
4. To acquire and convey real property or personal property;
5. To enter into contracts;
6. To exercise such other functions and powers as granted by local
government, subject to limitations provided by the local government code.

Among the expanded economic powers of local government units under the
code are as follows:
1. Power to levy taxes: the authority to levy taxes and increase them without
prior approval of the Department of Finance. These includes the authority of
the LGUs to tap and utilize local sources of revenue and income. Moreover,
they are guaranteed of the expanded shares of Internal Revenue Allotment
(IRA).
2. Tax exemption privileges: LGUs are exempt from the payment of import
duties and taxes for heavy equipment or machineries for infrastructure
projects, as well as garbage trucks and other similar equipment.
3. Improve budgeting system: LGUs can formulate and implement local
development priorities without the initial approval of DILG and without further
review of DBM. Likewise, a provision for supplemental budget of LGUs are
accorded to them favorably.
4. Direct sourcing of funds: Local Chief Executives, upon the authority of the
concerned Sanggunian or local council, may negotiate and secure grants or
donations in kind from local and foreign assistance agencies without the
approval and clearance from the National Government.
5. Debt Relief: LGUs’ debts are written of as follows: a. unremitted contributions
to the integrated national public funds; b. un-remitted national government
shares of taxes, charges, and fees collected by local governments; and c.
special education funds and statutory contributions.
6. Organizational change: organizational positions are created/recognized.
Creation of new mandatory positions like the office of Local School Board and
Local Health Board; separation of treasury and accounting functions, among
others. Likewise, there is also the creation of Local Development Councils.
7. Credit and other forms of financing: Liberal use of credit financing in support
of local infrastructure and other socioeconomic development projects: a)
borrowing from government or domestic private banks; b) deferred payment
scheme; c) inter-LGUs loan; d) co-financing with private sector; e)other
development financing schemes now allowed and reemphasized, and the
like.
8. Developing partnership: Local Public Organizations can collaborate in
tandem with private sector by offering competitive advantages such as lower
cost of doing business, better access to markets, and a skilled labor force. In
providing public services or utilities, LGUs can encourage public-private
networking.