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RULES AND REGULATIONS IMPLEMENTING THE LOCAL GOVERNMENT CODE OF 1991 RULE I Policy and Application ARTICLE 1. Title. These Rules shall be known and cited as the Rules and Regulations Implementing the Local Government Code of 1991. ARTICLE 2. Purpose. These Rules are promulgated to prescribe the procedures and guidelines for the implementation of the Local Government Code of 1991 in order to facilitate compliance therewith and achieve the objectives thereof. ARTICLE 3. Declaration of Policy. (a) It is hereby declared the policy of the State that the territorial and political subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make them more effective partners in the attainment of national goals. Toward this end, the State shall provide for a more responsive and accountable local government structure instituted through a system of decentralization whereby local government units (LGUs) shall be given more powers, authority, responsibilities, and resources. The process of decentralization shall proceed from the National Government to the LGUs. (b) It is also the policy of the State to ensure the accountability of LGUs through the institution of effective mechanisms of recall, initiative and referendum. (c) It is likewise the policy of the State to require all national government agencies and offices (NGOs) to conduct periodic consultations with appropriate LGUs, nongovernmental organizations (NGOs) and people's organizations, and other concerned sectors of the community before any project or program is implemented in their respective jurisdictions. casia (d) Every LGU shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, LGUs shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants. ARTICLE 4. Scope of Application. These Rules shall apply to the following:

(a) All provinces, cities, municipalities, barangays, and such other political subdivisions as may be created by law; (b) All LGUs in the Autonomous Region in Muslim Mindanao and other autonomous political units as may be created by law, until such time that they shall have enacted their own local government code; and (c) NGAs and other government instrumentalities including government-owned and -controlled corporations (GOCCs) to the extent provided in the Code. ARTICLE 5. Rules of Interpretation. In the interpretation of the provisions of the Code, the following rules shall apply: (a) The general welfare provisions, any provision on the powers of an LGU, and any question regarding the devolution of powers shall be liberally interpreted and resolved in their favor of the LGU. (b) Any fair and reasonable doubt on the powers of LGUs shall be liberally interpreted and resolved in their favor; and in cases involving lower and higher level LGUs, in favor of the lower level LGU. (c) Rights and obligations existing on the date of effectivity of the Code and arising out of contracts or any other source of prestation involving an LGU shall be governed by the original terms and conditions of said contracts or the law in force at the time such rights were vested. (d) In the resolution of controversies arising under the Code where no legal provision or jurisprudence applies, the customs and traditions in the place where the controversies take place may be resorted to. (e) In case of doubt, any tax ordinance or revenue measure shall be construed strictly against the LGU enacting it, and liberally in favor of the taxpayer. Any tax exemption, incentive, or relief granted by any LGU pursuant to the provisions of the Code shall be construed strictly against the person claiming it. RULE II Creation, Conversion, Division, Merger, Abolition, and Alteration of Boundaries of Local Government Units ARTICLE 6. Common Provisions. (a) Authority to create LGUs An LGU may be created, converted, divided, merged, abolished, or its boundaries substantially altered either by Act of Congress, in the case of a province, city, municipality, or any other political subdivision, or by ordinance passed by the sangguniang panlalawigan or sangguniang panlungsod concerned, in the case of a barangay located within its territorial jurisdiction, subject to such limitations and requirements prescribed in this Rule.

Notwithstanding the population requirement, the Congress may create barangays in indigenous cultural communities to enhance the delivery of basic services in said areas and in the municipalities within the Metropolitan Manila Area (MMA). (b) Creation or conversion

(1) The creation of an LGU or its conversion from one level to another shall be based on the following verifiable indicators of viability and projected capacity to provide services: (i) Income which must be sufficient, based on acceptable standards, to provide for all essential government facilities and services and special functions commensurate to the size of its population, as expected of the LGU. The income shall be based on 1991 constant prices, as determined by the Department of Finance (DOF). (ii) Population which shall be the total number of inhabitants within the territorial jurisdiction of the LGU. (iii) Land area which must be contiguous, unless it comprises two (2) or more islands or is separated by an LGU independent of the others; properly identified by metes and bounds with technical descriptions; and sufficient to provide for such basic services and facilities to meet the requirements of its populace. cdasia (2) Compliance with the foregoing indicators shall be attested by:

(i) The Secretary of Finance as to the income requirement in the case of provinces and cities, and the provincial treasurer in the case of municipalities; (ii) The Administrator of the National Statistics Office (NSO) as to the population requirement; and (iii) The Director of the Lands Management Bureau (LMB) of the Department of Environment and Natural Resources (DENR) as to the land area requirement. (c) Division or merger Division or merger of existing LGUs shall comply with the same requirements for their creation. Such division or merger shall not reduce the income, population, or land area of the original LGU or LGUs to less than the prescribed minimum requirements and that their income classification shall not fall below their current income classification prior to the division or merger. (d) Abolition An LGU may be abolished when its income, population, or land area has been irreversibly reduced during the immediately preceding three (3) consecutive years to less than the requirements for its creation, as certified by DOF, in the case of income; by NSO, in the case of population; and by LMB, in the case of land area. The law or ordinance abolishing an LGU shall specify the province, city,

municipality, or barangay to which an LGU sought to be abolished will be merged with. (e) Updating of income classification The income classification of LGUs shall be updated by DOF within six (6) months from the effectivity of the Code to reflect the changes in the financial position resulting from the increased revenues. (f) Plebiscite (1) No creation, conversion, division, merger, abolition, or substantial alteration of boundaries of LGUs shall take effect unless approved by a majority of the votes cast in a plebiscite called for the purpose in the LGU or LGUs directly affected. The plebiscite shall be conducted by the Commission on Elections (COMELEC) within one hundred twenty (120) days from the effectivity of the law or ordinance prescribing such action, unless said law or ordinance fixes another date. (2) The COMELEC shall conduct an intensive information campaign in the LGUs concerned at least twenty (20) days prior to the plebiscite, in the case of provinces, cities, and municipalities; and ten (10) days, in the case of barangays. The COMELEC may seek the assistance of national and local government officials, mass media, NGOs, and other interested parties. (g) Beginning of corporate existence When a new LGU is created, its corporate existence shall commence upon the election and qualification of its chief executive and a majority of the members of its sanggunian, unless some other time is fixed therefor by the law or ordinance creating it. ARTICLE 7. Selection and Transfer of Local Government Site, Offices, and Facilities. (a) The seat of government of an LGU from where governmental and corporate services are delivered shall be at the site designated by the law or ordinance creating the LGU. (b) In the case of a province, the site shall be within its capital town or city.

(c) In selecting the site, factors relating to geographical centrality, accessibility, availability of transportation and communication facilities, drainage and sanitation, development and economic progress, and other relevant considerations shall be taken into account. (d) When subsequent to the establishment of the government site conditions and developments in the LGU have significantly changed, the sanggunian may, after public hearing and by a vote of two-thirds (2/3) of all its members, transfer the government site to a location best suited to present needs and anticipated future development and progress. No transfer shall be made o

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