Co-Sponsorship Speech on Senate Bill No. 2165 under Committee Report No. 64: Income Classification of LGUs

SBN 2165 under Committee Report No. 64 Income Classification of LGUs

10 May 2023

19th Congress, 1st Regular Session

Mister President, I associate myself with Senate Bills No. 1530, 1913 and 2067 under Committee Report No. 64 entitled: An Act Institutionalizing the Automatic Income Classification of Provinces, Cities, and Municipalities, and for Other Purposes. Also, with the indulgence of the author and sponsor, I would like to be made co-author and co-sponsor, as well.

The income classification of local government units (LGUs) is fundamental and imperative to determine their financial capability to fund development projects and priority programs, to establish the salary scales and other emoluments of their officials and personnel, to determine financial grants, aids, and other forms of assistance to LGUs, among others.

The most recent income classificaton was the Department of Finance (DOF) Order No. 23-08 issued on July 29, 2008. After almost fifteen years, this is clearly outdated. The income classification of local governments had evolved but do not reflect their actual financial capability. It is no longer in consonance with the prevailing economic conditions and the overall financial status of the LGUs.

For the LGUs to remain dynamic and consistent, the institutionalization of the automatic income classification is a welcome development as it will improve the status of the LGUs and correctly reflect their financial capacity. By regularly assessing any changes in their capacity, the LGUs can formulate and direct policies accordingly and can better align themselves in the national government’s financial and fiscal policies.

Thus, I enjoin my colleagues in the passage of this “Automatic Income Classification of Local Government Units Act.”

Thank You, Mr. President.