Marcos signs law formalizing income classification of LGUs

MANILA, Philippines — President Marcos signed into law Republic Act 11964 or the Automatic Income Classification of Local Government Units on Oct. 26, institutionalizing the automatic income classification of LGUs.

Under RA 11964, provinces, cities and municipalities shall be categorized into five classes according to their income ranges and average annual regular income for three fiscal years preceding a general income reclassification.

The classifications of provinces are as follows: First Class, provinces that have obtained an average annual regular income of P1.5 billion or more; Second Class, provinces with an average annual income of P900 million or more, but less than P1.5 billion; Third Class, provinces with an average annual regular income of P700 million or more but less than P900 million; Fourth Class, provinces that have average annual regular income of P500 million or more but less than P700 million; Fifth Class, provinces that have average

 annual regular income of less than P500 million.

Cities will also be classified into five classes: First Class, cities with an average annual regular income of P1.3 billion; Second Class, cities with an average annual regular income of P1 billion or more but less than P1.3 billion; Third Class, cities with an average annual regular income of P800 million or more but less than P1 billion; Fourth Class, cities with an average annual regular income of P500 million or more but less than P800 million; Fifth Class, cities with an average annual regular income of less than P500 million.

Meanwhile, municipalities will be classified as First Class, or municipalities earning an annual average income of P200 million; Second Class, municipalities earning an average annual income of P160 million or more, but less than P200 million; Third Class, those earning P130 million or more, but less than P160 million; Fourth Class, those with an annual average regular income of P90 million or more, but less than P130 million; Fifth Class, those with an average annual income of less than P90 million.

The LGU income classification will serve as the basis for the identification of administrative and statutory aids, financial grants and