Internal Revenue Allotment and Tax Treatment of Barangay Guinsaugon, St. Bernard, Southern Leyte

March 27, 2006 DILG LEGAL OPINION NO. 017-06 Governor Rosette Y. Lerias Provincial Capitol Building Maasin City, Southern Leyte Dear Governor Lerias : This refers to your letter-request for this Department's opinion on the following issues, to wit: 1. "Will Barangay Guinsaugon remain as a barangay with only 500 or less inhabitants? Will they receive the same Internal Revenue Allotment? 2. Will the relocation of the whole barangay to another barangay within a municipality retain their status as a barangay? Will they retain their Internal Revenue Allotment? 3. What happens to a barangay being relocated to another municipality? This might happen due to scarcity of relocation sites, especially in St. Bernard." Before addressing the above questions, may we state in gist the applicable provisions of the Local Government Code (RA 7160) for a better appreciation of our position, viz: Section 6 of RA 7160 enumerates the bodies authorized to create local government units, which include inter alia ,the Sangguniang Panlalawigan or Sangguniang Panlungsod in cases of creation of barangays within its territorial jurisdiction. ACDTcE Section 7 thereof provides for the verifiable indicators for creation, i.e .(1) income; (2) population; and (3) land area. Such indicators shall be attested to by the Department of Finance, National Statistics Office (NSO) and the Land Management Bureau, respectively. With respect, however, to barangays, the only verifiable indicator for creating a barangay is population. Hence, Section 386 of RA 7160 provides that the minimum population requirement for creation of barangays is 2,000 inhabitants, as certified by the NSO, except in cities and municipalities within Metro Manila and other Metropolitan subdivisions or highly urbanized cities which requires for the minimum population requirement at 5,000 inhabitants. Section 9 of RA 7160, on the other hand, provides for the instances when a local government unit may be abolished and that would be when there is a reduction of any, or all of the following: income, population or land area of subject local government unit. It bears stressing, however, that the reduction of all or any of the verifiable indications, i.e .,income, land area and population, will not automatically abolish a local government unit. It is settled in our jurisprudence that what has been created by law may only be abolished by law. Hence, the reduction contemplated above will only give rise to a legal basis or ground in passing a law or ordinance abolishing the local government unit. In cases of barangays, it is the passage by the Sangguniang Panlalawigan or Panlungsod, as the case may be, of an ordinance abolishing a particular barangay. We now address your queries. In reply to the first issue, a certification from the NSO as to the remaining population of Barangay Guinsaugon has yet to be issued before a provincial ordinance may be passed abolishing the said barangay. Hence, without compliance with the above requirements, Barangay Guinsaugon shall remain in existence and retain its identity, albeit its IRA shall be adjusted based on the computation to be made by the Department of Budget and Management. IcaHTA Anent the second issue, we need to distinguish. If the relocation of the whole barangay to another barangay within a municipality is merely temporary, then Barangay Guinsaugon should be allowed to retain its status as a barangay. It bears to stress that this is not the first time that said set up happened. It could be recalled that when Mt. Pinatubo erupted, thereby causing massive damage to the barangays in Pampanga, Zambales and some areas in Tarlac, a temporary arrangement was entered into between the Commission on Audit, the Department of Budget and Management and this Department whereby, considering the peculiar situation, the affected barangays, though provided with temporary relocation sites in another area, were still recognized as barangay and allowed to receive their IRA. This position, however, will change if the relocation contemplated is permanent. Hence, if Barangay Guinsaugon is permanently relocated to another barangay in the same municipality, Barangay Guinsaugon will lose its territory which may result in the abolition of Barangay Guinsaugon. If the intention, however, is to retain Barangay Guinsaugon as a barangay, then an ordinance should be passed dividing the barangay where Barangay Guinsaugon was relocated, in order to legally provide Barangay Guinsaugon with a territory. If such division would result to the reduction of the land area of the barangay where Barangay Guinsaugon is relocated, the same has no legal implication since under the Code, the only verifiable indicator for the barangay is population. Anent the third issue, your query is answered similarly with the second issue such that if Barangay Guinsaugon is permanently relocated to another municipality, then Barangay Guinsaugon will now form part of the municipality where it is relocated. We hope we have enlightened you on the matter. Very truly yours, (SGD.) G. J. EMETERIO S. MORENO, JR. Director III Department of Interior and Local Government March 17, 2006 HON. RONALDO V. PUNO Secretary Department of Interior and Local Government A. Francisco Gold Condominium II EDSA corner Mapagmahal St.,Diliman Quezon City Dear Secretary Puno : The Philippine Atmospheric Geophysical and Astronomical Services Administration (PAGASA) reported during one of their briefings that the province of Southern Leyte will experience more landslides which will cause more barangays to be relocated. HEcIDa In view hereof, may I ask for some clarifications on the following issues: 1. Will Barangay Guinsaugon remain as a barangay with only 500 or less inhabitants? Will they receive the same Internal Revenue Allotment? 2. Will the relocation of the whole barangay to another barangay within a municipality retain their status as a barangay? Will they retain their Internal Revenue Allotment? 3. What happens to a barangay being relocated to another municipality? This might happen due to scarcity of relocation sites, especially in St. Bernard. May I earnestly request for the issuance of a Department Order resolving these issues and their ramifications so that we will be guided accordingly. Best regards and more power. Very truly yours, (SGD.) ROSETTE Y. LERIAS Provincial Governor