PRESIDENT Marcos has enacted Republic Act (RA) No. 11964, which institutionalizes the automatic income classification of local government units (LGUs), Malacañang announced on Friday.
RA 11964, also known as the “Automatic Income Classification of Local Government Units Act,” classifies municipalities into five classes based on their average annual regular income.
Thus, municipalities with annual average income of P200,000,000 are classified as First Class; those with average annual income of P160,000,000 or more, but less than P200,000,000 are Second Class; those earning P130,000,000 or more, but less than P160,000,000 are Third Class; those with annual average income of P90,000,000 or more, but less than P130,000,000 are Fourth Class; and those with an average annual income of less than P90,000,000 are Fifth Class.
The Department of Finance, in consultation with the National Economic and Development Authority (NEDA) and the LGUs League, has the authority to adjust the income ranges based on In compliance with the law, the DOF must also undertake regular income reclassification once every three years to ensure that the LGU income reclassification conforms with the prevailing economic conditions.
The first general income reclassification will be made within six months after the law’s effectivity and every three years thereafter.