Bureau of Local Government Finance Opinion

September 2, 2011 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 1st Indorsement Respectfully referred thru the ICO-Regional Director, Region VIII, 3rd Floor Tri-Star Bldg., 170 Avenida Veteranos Street, Tacloban City, to the Provincial Treasurer of Eastern Samar the herein letter dated July 25, 2011 of the Provincial Assessor, same province, submitting the Report of Revenues and Receipt of the province for CYs 2008-2010, in support of the request to upgrade its income classification from 2nd Class to 1st Class. It is informed that under BLGF Memorandum Circular No. 01-P(a)-08, dated January 6, 2009, copy attached, Eastern Samar was classified as 2nd Class, with the Average Annual Income for CYs 2004-2007, in the amount of Php410,425,895.47, and in accordance with the income bracket of "P360M or more but less than P450M" for 2nd Class provinces as provided for by Department of Finance (DOF) Order No. 23-08, dated July 29, 2008, copy also attached. Take note of the provisions of Sections 2 and 3 of the aforecited DOF Order No. 23-08, that the income 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. : DTAHEC "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 reclassification 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." Accordingly, the annual regular income of the province from the years 2004-2007, as certified to by the Commission on Audit (COA) were the basis in the computation of its Average Annual Income as aforementioned. The next general income re-classification of provinces, cities and municipalities shall be undertaken in 2012 which will cover certified annual regular incomes for CYs 2008, 2009, 2010 and 2011. Be guided accordingly. SACEca (SGD.) MA. PRESENTACION R. MONTESA, CESO III Executive Director