Meaning of the Term "Financial Requirements" in the Last Paragraph of Section 285 of R.A. No. 7160 (Local Government Code of 1991)

July 22, 2014 DILG LEGAL OPINION NO. 027-14 Hon. Adelino B. Sitoy Mayor Cordova, Cebu Dear Mayor Sitoy : This has reference to your letter dated 16 May 2014 requesting the Department's legal opinion on the meaning of the term "financial requirements" in the last paragraph of Section 285 of Republic Act No. 7160 or the Local Government Code of 1991. Does the aforesaid term refer to the conduct of the plebiscite or the share in the Internal Revenue Allotment (IRA)? What is its entire scope? Please be informed that the Department has already addressed a similar concern in DILG Opinion No. 34, series of 2004. 1 Pertinent portion of the aforesaid opinion is hereunder quoted for ease of reference: "May we point out that under Section 285 (last par.) of the Local Government Code of 1991, it is so provided that: 'Provided, finally, that the fiscal requirements of barangays created by LGUs after the effectivity of the Code, shall be the responsibility of the local government units concerned.' In relation thereto, Article XIV (g) of the implementing Rules and Regulations of RA 7160, provides: '(g) Financial requirement the financial requirements of the barangays created by LGUs after the effectivity of the Code shall be the responsibility of the LGU concerned.' In that regard, may it be noted that barangays may be created through a law enacted by Congress or through an ordinance by the Sangguniang Panlalawigan with respect to the creation of new barangays in a municipality, or by the Sangguniang panlungsod, with respect to the creation of new barangays within a city (Secs. 385 and 386, RA 7160). The aforequoted provisions expressly provides that the financial requirement of the barangays created by LGUs, i.e., by the provincial government or the city government as the case may be, after the effectivity of the Code, shall be the responsibility of the LGU concerned. Corollarily, the phrase 'local government units concerned' undoubtedly refers to the local government units which created the new barangays and obviously that refers also to the provincial or city government, as the case may be. Accordingly, with respect to the financial requirement of the newly created barangays in your municipality, their IRA share should be borne by the provincial government, being the creating LGU. " (Emphasis Supplied) Hence, based on the foregoing, it can be reasonably deduced that the term "financial requirements" in the last paragraph of Section 285 of the Local Government Code of 1991 pertain only to the newly created barangay's IRA share. The foregoing inference was in fact bolstered by the issuance of the DBM of Local Budget Memorandum No. 66-A 2 dated 28 December 2012 entitled "FY 2013 Adjusted, Internal Revenue Allotment Shares of Local Government Units," Item 2.3 thereof reads: "2.3 Exclusion of Barangay Canumay, Valenzuela City in the computation due to the enactment by said city of Sangguniang Panlungsod (SP) Ordinance No. 37 series of 2011 entitled 'An Ordinance Dividing Barangay Canumay and Creating Two (2) New Barangays to be Known as Barangay Canumay West and Barangay Canumay East, Subject to All Legal and Existing Rules and Regulations,' which was ratified in a plebiscite conducted on March 3, 2012. AaDSEC This is pursuant to Section 285 of the Local Government Code (Code), which provides that the financial requirements of the barangays created by the local government units (LGU) after the effectivity of the Code shall be the responsibility of the LGU concerned . " (Emphasis Supplied) Thank you. Very truly yours, (SGD.) AUSTERE A. PANADERO Undersecretary ATTACHMENT April 21, 2004 DILG OPINION NO. 034-04 Kagawad Robert L. Villamayor Barangay Tayuman Binangonan, Rizal Dear Kagawad Villamayor : This refers to your letter, requesting for this Department's interpretation of the last paragraph of Section 285 of RA 7160. May we point out that under Section 285 (last par.) of the Local Government Code of 1991 it is so provided that: "Provided, finally, that the fiscal requirements of barangays created by LGUs after the effectivity of the Code shall be the responsibility of the local government units concerned ." (Emphasis ours) In relation thereto, Article XIV (g) of the Implementing Rules and Regulations of RA 7160, provides: "(g) Financial requirement the financial requirements of the barangays created by LGUs after the effectivity of the Code shall be the responsibility of the LGU concerned." (Emphasis ours) In that regard, may it be noted that barangays may be created through a law enacted by Congress or through an ordinance by the Sangguniang Panlalawigan with respect to the creation of new barangays in a municipality, or by the Sangguniang Panlungsod, with respect to the creation of new barangays within a city (Secs. 385 and 386, RA 7160). The aforequoted provisions expressly provides that the financial requirement of the barangays created by LGUs, i. e. , by the provincial government or the city government as the case may be, after the effectivity of the Code, shall be the responsibility of the LGU concerned. Corollarily, the phrase "local government units concerned" undoubtedly refers to the local government units which created the new barangays and obviously that refers also to the provincial or city government, as the case may be. lalg2004 Accordingly, with respect to the financial requirement of the newly created barangays In your municipality, their IRA share should be borne by the provincial government, being the creating LGU. We hope we have enlightened you on the matter. TAHCEc Very truly yours, (SGD.) JOSE D. LINA, JR. Secretary December 28, 2012 DBM LOCAL BUDGET MEMORANDUM NO. 066-A-12 TO : The Provincial Governors, City and Municipal Mayors, Barangay Chairmen, Members of Local Sangguniang Panlungsod/Bayan/Lalawigan and Local Finance Committees, Local Budget Officers, Treasurers and All Others Concerned SUBJECT : FY 2013 Adjusted Internal Revenue Allotment Shares of Local Government Units 1.0 Section 2.1.2 of Local Budget Memorandum (LBM) No. 66 dated July 2, 2012 provides that the FY 2013 Internal Revenue Allotment (IRA) shares of Local Government Units (LGUs) provided therein shall be adjusted accordingly should there be any adjustments, changes, modifications or alterations in any of the factors affecting the computation of IRA that occurred or happened, including final and executory decisions rendered during the current fiscal year (FY 2012) pursuant to Section 83 of the General Provisions of Republic Act No. 10155 (The FY 2012 General Appropriations Act). cIETHa 2.0 In view of the aforecited provision, the FY 2013 IRA level of LGUs is hereby adjusted taking into consideration the following: 2.1 Issuance of Entry of Judgment by the Supreme Court (SC) on October 24, 2012 which rendered final and executory the SC decision on the constitutionality of Republic Act No. 9355 entitled "An Act Creating the Province of Dinagat Islands"; 2.2 Ratification of the cityhood laws of the municipalities listed hereunder; and Region LGU Cityhood Laws II Ilagan, Isabela Republic Act No. 10169 III Mabalacat, Pampanga Republic Act No. 10164 IVA Cabuyao, Laguna Republic Act No. 10163 2.3 Exclusion of Barangay Canumay, Valenzuela City in the computation due to the enactment by said city of Sangguniang Panlungsod (SP) Ordinance No. 37 series of 2011 entitled "An Ordinance Dividing Barangay Canumay and Creating Two (2) New Barangays to be Known as Barangay Canumay West and Barangay Canumay East, Subject to All Legal and Existing Rules and Regulations",which was ratified in a plebiscite conducted on March 3, 2012. This is pursuant to Section 285 of the Local Government Code (Code), which provides that the financial requirements of the barangays created by the local government units (LGU) after the effectivity of the Code shall be the responsibility of the LGU concerned. 3.0 Summarized below and detailed by region and by level of LGU in the attached Annex "A",is the adjusted FY 2013 IRA level of P302,304,001,000: cSDIHT Share Equivalent to Share 1992 Cost of Determined Level of No. of Devolved Functions/ on the basis of Total IRA Shares LGU LGUs City-Funded Section 285 of Hospitals, as of 31 R.A. No. 7160 December 1992 Provinces 81 P2,845,490,826 P68,040,348,432 P70,885,839,258 Cities 143 1,026,395,758 68,040,348,432 69,066,744,190 Municipalities 1,479 2,604,512,536 100,581,384,639 103,185,897,175 Barangays 41,889 59,165,520,377 59,165,520,377 Total 43,592 P6,476,399,120 P295,827,601,880 P302,304,001,000 ======== ============== ============== =============== 4.0 The LGUs shall be notified of their adjusted IRA allocation by the concerned Department of Budget and Management (DBM) Regional Offices. 5.0 Please be guided accordingly. (SGD.) FLORENCIO B. ABAD Secretary ANNEX A FY 2013 INTERNAL REVENUE ALLOTMENT FOR LGUs (In P0.00) Authorized Appropriations Region Provinces Cities Municipalities Sub-Total PCM Barangays Grand Total National Capital Region 240,979,887 13,521,467,654 81,695,421 13,844,142,962 5,239,414,157 19,083,557,119 Cordillera Administrative Region 3,033,721,722 968,665,594 4,044,456,466 8,046,843,782 1,304,980,224 9,351,824,006 Regional Office No. I 3,978,268,255 2,386,291,206 6,643,593,028 13,008,152,489 3,736,548,979 16,744,701,468 Regional Office No. II 4,248,213,786 2,233,247,716 6,496,457,437 12,977,918,939 2,596,851,832 15,574,770,771 Regional Office No. III 7,427,290,793 5,325,612,850 10,398,432,296 23,151,335,939 5,579,537,485 28,730,873,424 Regional Office No. IV.A 8,063,432,305 7,518,356,186 10,572,868,090 26,154,656,581 7,055,673,879 33,210,330,460 Regional Office No. IV.B 3,817,735,212 1,714,515,728 5,764,430,644 11,296,681,584 1,893,828,427 13,190,510,011 Regional Office No. V 4,930,675,514 2,255,320,735 7,546,899,724 14,732,895,973 4,104,778,116 18,837,674,089 Regional Office No. VI 5,530,123,890 6,333,809,173 7,693,881,096 19,557,814,159 5,075,729,489 24,633,543,648 Regional Office No. VII 4,350,589,646 6,021,272,135 6,754,939,748 17,126,801,529 4,325,211,492 21,452,013,021 Regional Office No. VIII 4,457,448,251 3,089,869,052 7,085,413,111 14,632,730,414 4,188,613,861 18,821,344,275 Regional Office No. IX Inc. ARMM 4,488,898,841 3,285,743,664 6,774,097,530 14,548,740,035 3,415,402,904 17,964,142,939 Regional Office No. X 3,779,670,482 4,431,803,866 5,314,004,117 13,525,478,465 2,788,707,409 16,314,185,874 Regional Office No. XI 3,288,378,207 4,662,896,377 4,205,145,347 12,156,419,931 2,299,811,022 14,456,230,953 Regional Office No. XII Inc. ARMM 5,971,447,866 2,693,152,245 9,472,462,883 18,137,062,994 3,880,679,897 22,017,742,891 Regional Office No. XIII (CARAGA) 3,278,964,601 2,624,720,009 4,337,120,237 10,240,804,847 1,679,751,204 11,920,556,051 70,885,839,258 69,066,744,190 103,185,897,175 243,138,480,623 59,165,520,377 302,304,001,000 ============ ============ ============ ============= ============ ============ Footnotes 1. Photocopy attached. 2. Photocopy attached. Published in The Philippine Star on January 9, 2013.