(Eagle News) — President Bongbong Marcos has signed into law Republic Act No. 11964, which institutionalizes the automatic income classification of local government units.
Under the law, LGUs shall be classified into five classes, according to their income ranges and based on the average annual regular income for three fiscal years preceding a general income reclassification.
Those classified as First Class are earning an annual average income of P200,000,000.
Second Class LGUs, meanwhile, have an average annual income of P160,000,000, or more but less than P200,000,000.
Third Class LGUs are those earning P130,000,000 or more, but less than P160,000,000
Fourth Class are those with an annual average regular income of P90,000,000 or more, but less than P130,000,000.
Fifth Class, meanwhile, have an average annual income of less than P90,000,000.
Under the new law, the first income reclassification will take effect on January 1st of the immediately succeeding year following the issuance of the table of income classification by the Finance Secretary.
The classification shall serve as the basis for the identification of administrative and statutory aids, financial grants and other forms of assistance to LGUs, determination of LGU capability to undertake development programs and projects, total annual supplemental appropriation for personal services of an LGU, and for compensation adjustment for LGUs personnel, pursuant to Republic Act No. 11466, or the “Salary Standardization Law of 2019,” the Presidential Communications Office said.
The PCO added the new law provides “a more responsive approach to the promotion of local autonomy,” allowing LGUs to realize their full economic potential.
