LOCAL GOVERNMENT UNIT ( LGU)

WEEK 1
AUGUST 26, 2022
Prepared by: PROF. EDDIE O. SINNUNG JR

Administrative Structure

•Local governments as political and territorial subdivisions of the State

•Provinces, cities, and municipalities are directly headed by a local chief executive
(Governor for provinces, and Mayor for cities and municipalities) and a vice (Vice
Governor; Vice Mayor)

•Each local government has a local legislative council called “Sanggunian” (Provincial
Board; City/Municipal/Barangay Council) composed of councilors, with the Vice
Governor/Vice Mayor/Punong Barangay serving as Presiding Officer

• Barangays are headed by a Chairman

Each Local Government Unit (LGU) shall have the power to create its own sources of
revenues and to levy taxes, fees and charges subject to such guidelines and limitations as
the Congress may provide, consistent with the basic policy of local autonomy.

The President of the Philippines shall exercise general supervision over local
governments. Provinces with respect to component cities and municipalities, and cities and
municipalities with respect to component “barangays”, shall ensure that the acts of their
component units are within the scope of their prescribed powers and functions.

** Such taxes, fees, and charges shall accrue exclusively to the local governments.

LGUs shall have a just share, as determined by law, in the national taxes which shall be
automatically released to them.(Article X, Secs. 4-6, Phil. Constitution)

Every LGU created or recognized under the Local Government Code (LGC) is a body politic and
corporate endowed with powers to be exercised by it in conformity with law. As such, it
shall exercise powers as a political subdivision of the national government and as a
corporate entity representing the inhabitants of its territory.(Sec. 15, LGC)

When a new local government unit is created, its corporate existence shall commence upon
the election and qualification of its chief executive and a majority of the members of its
“sanggunian”, unless some other time is fixed by the law or ordinance creating it.

Every LGU, as a corporation, shall have the following powers:

1. To have continuous succession in its corporate name;

2. To sue and be sued;

3. To have and use a corporate seal;

4. To acquire and convey real or personal property;

5. To enter into contracts; and

6. To exercise such other powers as are granted to corporations, subject to the

limitations provided in this Code and other laws.(

Unless otherwise provided in the LGC, no contract may be entered into by the Local Chief
Executive (LCE) in behalf of the LGU without prior authorization by the
“sanggunian”concerned.

A legible copy of such contract shall be posted at a conspicuous place in the provincial
capitol or the city, municipal or “barangay hall”. It shall enjoy full autonomy in the
exercise of their proprietary functions and in the limitations provided in the LGC and other
applicable laws. (Sec. 22 (c), LGC)

Local government funds and monies shall be spent solely for public purposes(Sec. 305
(b), LGC);

Local revenue is generated only from sources expressly authorized by law or ordinance,
and collection thereof shall at all times be acknowledged properly Sec. 305 (c), LGC);

Creation, Division, Merger, Abolition and Conversion of Province, Cities and Municipalities.

–an LGU may be created, divided, merged, abolished, or its boundaries substantially
altered either by law enacted by Congress in the case of a province, city, municipality, or
any other political subdivision, or by ordinance passed by the “sangguniang panlalawigan or
sangguniang panlungsod” concerned in the case of a “barangay” located within its territorial
jurisdiction, subject to such limitations and requirements prescribed in the LGC.(Sec. 6,
LGC)

- LAW- CONGRESS-

Common Requirements for Creation and Conversion of Province and City:

As a general rule, the creation of an LGU or its conversion from one level to another
level shall be based on three (3) verifiable indicators of viability and projected
capacity to provide services, to wit:

➢ INCOME
➢ POPULATION
➢ LAND AREA

INCOME

It must be sufficient, based on acceptable standards, to provide for all essential

government facilities and services and special functions commensurate with the size
of its population, as expected of the local government unit concerned.

POPULATION

It shall be determined on the total number of inhabitants within the territorial

jurisdiction of the local government unit concerned.

LAND AREA

It must be contiguous, unless it comprises two or more islands or is separated by a

local government unit independent of the others; properly identified by metes and
bounds with technical descriptions; and sufficient to provide for such basic services
and facilities to meet the requirements of its populace.

Compliance with income, population and land area shall be, Philippine Statistics Authority
(PSA), and the Land Management Bureau (LMB), respectively.(Sec. 7, LGC)

Also, no creation, division, merger, abolition, or substantial alteration of boundaries of

LGUs shall take effect unless approved by a majority of the votes cast in a plebiscite
called for the purpose in the political unit or units directly affected.

Said plebiscite shall be conducted by the Commission on Elections (COMELEC) within one
hundred twenty (120) days from the date of effectivity of the law or ordinance effecting
such action, unless said law or ordinance fixes another date.

Requirements for the Creation of Province, Cities and Municipalities.

- A Province, City, Municipality (P/C/M) and Highly Urbanized City (HUC) may be created in
accordance with the criteria provided for in the LGC, viz:

CREATION OF PROVINCE:

1.1 A province may be created if it has an average annual income, as certified by the
Department of Finance (DOF) thru the Bureau of Local Government Finance (BLGF), of
not less than Twenty Million Pesos (₱20,000,000.00) based on 1991 constant prices and
either of the following requisites:

i. A contiguous territory of at least Two Thousand (2,000) square kilometers,

as certified by the Land Management Bureau of the Department of Environment and
Natural Resources (DENR); or

ii. A population of not less than Two Hundred Fifty Thousand (250,000)
inhabitants as certified by the National Statistics Office (NSO) now Philippines
Statistics Authority (PSA).

1.2 The average annual income shall include the income accruing to the general fund,
exclusive of special funds, trust funds, transfers and non-recurring income.

1.3 Provided, that, the creation thereof shall not reduce the land area, population,
and income of the original unit or units at the time of said creation to less than
the minimum requirements prescribed herein. Also, the territory need not be contiguous
if it comprise two (2) or more islands or is separated by a chartered city or cities
which do not contribute to the income of the province.(Sec. 461, LGC)

CREATION OF CITY:

2.1 A municipality or a cluster of “barangays” may be converted into a component city

if it has a locally generated average annual income, as certified by the DOF thru the
BLGF, of at least One Hundred Million Pesos (₱100,000,000.00) for the last two (2)
 consecutive years based on 2000 constant prices, and if it has either of the following
requisites:

i. A contiguous territory of at least One Hundred (100) square kilometers, as

certified by the LMB; or

ii. A population of not less than One Hundred Fifty Thousand (150,000)
inhabitants, as certified by the NSO now PSA.

2.2 The creation thereof shall not reduce the land area, population and income of the
original unit or units at the time of said creation to less than the minimum
requirements prescribed herein. The territorial jurisdiction of a newly-created city
shall be properly identified by metes and bounds. The requirement on land area shall
not apply where the city proposed to be created is composed of one (1) or more islands.
The territory need not be contiguous if it comprises two (2) or more islands. Also,
the average annual income shall include the income accruing to the general fund,
exclusive of special funds, transfers, and non-recurring income. (RA 90091 , amending
Sec. 450 of the LGC)

2.3 A city may either be Component or Highly Urbanized. Provided, however, that the
criteria established in the LGC shall not affect the classification and corporate
status of existing cities. 2.4 Independent component cities are those component cities
whose charters prohibit their voters from voting for provincial elective officials.
Independent component cities shall be independent of the province. (Sec. 451, LGC)

CREATION OF MUNICIPALITY:

A municipality may be created, divided, merged, abolished, or its boundary substantially

altered only by an Act of Congress and subject to the approval by the majority of the votes
cast in the plebisciteto be conducted by the COMELEC in the local government unit or units
directly affected. Except as may otherwise be provided in the said Act, the plebiscite shall
be held within one hundred twenty (120) days from the date of its effectivity. (Sec. 441,
LGC)

3.1 The requisites for creation of the municipality are the following:

i. An Average Annual Income, as certified by the Provincial Treasurer, of at least

Two Million five Hundred Thousand Pesos (₱2,500,000.00) for at least two (2)
consecutive years based on 1991 constant prices;

ii. A population of at least twenty-five thousand (25,000) inhabitants, as certified

by the National Statistics Office; and

iii. A contiguous territory of at least fifty (50) square kilometers, as certified by

the Land Management Bureau.

3.2 Provided, That the creation thereof shall not reduce the land area, population or income
of the original municipality or municipalities at the time of said creation to less than
the minimum requirements prescribed.

3.3 The Average Annual Income shall include the income accruing to the General Fund of the
municipality concerned, exclusive of special funds, transfers and non-accruing income.

3.4 The territorial jurisdiction of a newly created municipality shall be properly

identified by metes and bounds. The requirement on land area shall not apply where the
municipality proposed to be created is composed of one (1) or more islands. The territory
need not be contiguous if it comprises two (2) or more islands. (Sec. 442, LGC)

Highly Urbanized Cities (HUC):

4.1 Cities with a minimum population of Two Hundred Thousand (200,000) inhabitants, as
certified by the PSA, and with the latest annual income of at least Fifty Million Pesos
(₱50,000,000.00), based on 1991 constant prices, as certified by the City Treasurer, shall
be classified as HUC. (Sec. 452, LGC)

4.2 Article 12 (b) of the Implementing Rules and Regulations (IRR) of the LGC, the procedures
for converting a component City into a HUC are as follows:

i. Income - The interested City shall submit to the Office of the President of the
Philippines a resolution of its “sanggunian” adopted by a majority of all its members
in a meeting duly called for the purpose, approved and endorsed by the City Mayor.
Said resolution shall be accompanied by a certification as to income and population.

ii. Declaration of Conversion - Within Thirty (30) days from receipt of such
resolution, the President of the Philippines shall, after verifying that the income
and population requirements have been met, declare the City as highly urbanized. (Sec.
453, LGC)
iii. Plebiscite - Within One Hundred Twenty (120) days from the declaration of the
President of the Philippines or as specified in the declaration, the COMELEC shall
conduct a plebiscite in the City proposed to be converted. Such plebiscite shall be
preceded by a comprehensive information campaign conducted by the COMELEC with the
assistance of national and local government officials, media, NGOs and other
interested parties. 4.3 Cities, which do not meet the above requirements, shall be
considered component cities of the province in which they are geographically located.
If a component city is located within the boundaries of two (2) or more provinces,
such city shall be considered a component of the province of which it is used to be
a municipality. Qualified voters of highly urbanized cities shall remain excluded
from voting for elective provincial officials.