Bureau of Local Government Finance Opinion

October 14, 2011 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Ms. Norma A. Zarraga, MPA Secretary Office of the Sangguniang Bayan Municipal Hall Talusan, Zamboanga Sibugay Madam : This refers to your 1st Indorsement dated July 25, 2011, addressed to the Secretary of the Department of the Interior and Local Government (DILG), and forwarded to this Bureau for appropriate action, requesting to upgrade the income classification of that municipality from 5th Class to 4th Class. May we inform that under BLGF Memorandum Circular No. 01-M (79)-08, dated November 24, 2008, copy enclosed, that municipality was classified 5th Class, with an Average Annual Income for CYs 2004-2007, in the amount of Php22,940,431.29, and in accordance with the income bracket of "P15M or more but less than P25M" for 5th Class municipalities as provided for by Department of Finance (DOF) Order No. 23-08, dated July 29, 2008, copy also enclosed. May we also invite your attention to the provisions of Sections 2 and 3 of the aforecited DOF Order No. 23-08, that the re-classification of provinces, cities (except Manila and Quezon City which are considered special cities), and municipalities shall be based on their audited Financial Statements for CYs 2004-2007, or the last four (4) years immediately preceding the year of re-classification which shall be made once every four (4) years, viz. : EHSTcC "SECTION 2. Classification of Provinces, Cities and Municipalities. As provided for under Section 1 and Section 2 of Executive Order No. 249, dated July 25, 1987, Provinces, Cities and Municipalities, . . ., shall be divided into six (6) main classes according to the Average Annual Income actually realized during the last four (4) calendar years immediately preceding the re-classification. "Based on the Financial Statements of LGUs for CYs 2004-2007 of the Commission on Audit, the income brackets of Provinces, Cities and Municipalities which shall be used in their re-classification are ranged, . . . ." (emphasis supplied) "SECTION 3. Period of General Re-classification of Provinces, Cities and Municipalities. (a) Upon the effectivity of the re-classification of Provinces, Cities and Municipalities pursuant to the provisions of this Order and Section 3 of the aforementioned Executive Order No. 249 the general re-classification of LGUs shall be made once every four (4) consecutive years. "xxx xxx xxx." The next general income re-classification shall be undertaken in year 2012, which shall cover the local annual regular incomes for CYs 2008, 2009, 2010 and 2011. Accordingly, your subject request shall be given due course in the forthcoming general re-classification. AIDTSE Very truly yours, (SGD.) MA. PRESENTACION R. MONTESA, CESO III Executive Director