EXECUTIVE ORDER NO. 249
EXECUTIVE ORDER NO. 249 - OVIDING
FOR A NEW INCOME CLASSIFICATION OF PROVINCES, CITIES AND
MUNICIPALITIES, AND FOR OTHER PURPOSES
WHEREAS,
the last reclassification of provinces, cities and municipalities took
effect on July 1, 1982, and reclassification shall be effective July 1,
1986;
WHEREAS, a review of the present classification scheme revealed that
around eighty per cent (80%) of provinces, cities and municipalities
will fall under the same class, thereby nullifying the very objectives
and purposes of categorizing local government units;
WHEREAS, the income classification of provinces, cities and
municipalities serves, among other purposes, as basis for fixing the
maximum tax ceilings imposable by the local governments, for
determining administrative and statutory aids, financial grants and
other forms of assistance to local governments, and for the
implementation of salary laws and administrative issuances on
allowances and emoluments that local government officials and personnel
may be entitled to;
WHEREAS, there is an urgent need to prescribe a more realistic
classification scheme that will effectively serve the aims and purposes
of establishing income categories for the local government units;
NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, do
hereby order:
Section 1. Classification of Provinces and Cities. —
Provinces and cities, except Manila and Quezon City which shall remain
as Special class cities, are hereby divided into six (6) main classes
according to the average annual income that they actually realized
during the last four calendar years immediately preceding the general
classification, as follows:
(a)
First class — The provinces and cities that have obtained an average
annual income of thirty million pesos or more;
(b) Second
class — The provinces and cities that have obtained an average annual
income of twenty million pesos or more but less than thirty million
pesos.
(c) Third
class — The provinces and cities that have obtained an average annual
income of fifteen million pesos or more but less than twenty million
pesos;
(d) Fourth
class — The provinces and cities that have obtained an average annual
income of ten million pesos or more but less than fifteen million
pesos;
(e) Fifth
class — The provinces and cities that have obtained an average annual
income of five million pesos or more but less than ten million pesos;
and
(f) Sixth
class — The provinces and cities that have obtained an average annual
income of less than five million pesos.
Sec. 2. Classification of Municipalities. —
Municipalities are divided into six (6) main classes according to the
average annual income that they actually realized during the last four
calendar years immediately preceding the general classification, as
follows:
(a)
First class — Municipalities that have obtained an average annual
income of fifteen million pesos or more;
(b) Second
class — Municipalities that have obtained an average annual income of
ten million pesos or more but less than fifteen million pesos;
(c) Third
class — Municipalities that have obtained an average annual income of
five million pesos or more but less than ten million pesos;
(d) Fourth
class — Municipalities that have obtained an average annual income of
three million pesos or more but less than five million
pesos;
(e) Fifth
class — Municipalities that have obtained an average annual income of
one million pesos or more but less than three million pesos;
(f) Sixth
class — Municipalities that have obtained an average annual income of
less than one million pesos.
Sec. 3. Periods of General Reclassification of
Provinces, Cities and Municipalities. — Upon the effectivity of this
Executive Order and for each period of four consecutive calendar years
thereafter, the Secretary of Finance shall reclassify all provinces,
cities, except Manila and Quezon City which shall remain as Special
class cities, and municipalities, on the basis of the foregoing
schedules of the average annual income of each province, city or
municipality derived during the last four consecutive calendar years
immediately preceding such reclassification according to the provisions
hereof; Provided, That the first classification under this Executive
Order shall take effect on July first, nineteen hundred and
eighty-seven: Provided, further, That a province or city or
municipality which has been in existence for a period of less than four
full calendar years immediately preceding the classification herein
provided shall be classified on the basis of its average income during
such lesser number of full calendar years or year immediately following
its organization as such province or city or municipality; And
provided, finally, That no readjustment of classification shall be made
oftener than once in four consecutive calendar years after the first
general reclassification provided for herein, except in cases of
diminishing revenues when the Secretary of Finance may order at any
time the readjustment of the classification of any province of city or
municipality in accordance with the income ranges herein
prescribed.
Sec. 4. Definition of Terms. — As used in this
Executive Order:
a.
The term “annual income” shall refer to revenues and receipts realized
by provinces, cities and municipalities from regular sources of the
local general and infrastructure funds including the internal revenue
and specific tax allotments provided for in PDs 144 and 436, both as
amended, but exclusive of non-recurring receipts, such as other
national aids, grants, financial assistance, loan proceeds, sales of
fixed assets, and similar others.
b. The term
“average annual income” shall refer to the sum of the “annual income”
as herein defined actually obtained by a province, city or municipality
during the required number of consecutive calendar years immediately
preceding the general reclassification of local governments, divided by
such number of calendar years, as may be certified to by the Commission
on Audit for purposes of such reclassification of provinces, cities and
municipalities.
Sec. 5. Uses of Income Classification of
Provinces, Cities and Municipalities. — The income classification of
provinces, cities and municipalities shall, among other purposes, serve
as basis for:
a.
The fixing of the maximum tax ceilings imposable by the local
governments;
b. The
determination of administrative and statutory aids, financial grants,
and other forms of assistance to local governments;
c. The
establishment of the salary scales and rates of allowances, per diems,
and other emoluments that local government officials and personnel may
be entitled to;
d. The
implementation of personnel policies on promotions, transfers, details
or secondment, and related matters at the local government levels;
e. The
formulation and execution of local government budget policies; and
f. The
determination of the financial capability of local government units to
undertake developmental programs and priority projects.
Sec. 6. Maximum Amount Expendable for Salaries and
Wages. — The total annual appropriations for salaries and wages of
provincial, city and municipal officials and employees for one calendar
year shall not exceed forty-five per cent (45%), in the case of all
first and second class provinces, cities and municipalities, and
fifty-five (55%), in the case of those lower than second class, of the
total annual income actually realized from regular sources during the
next preceding calendar year or the current calendar year estimates
from the same sources certified as collectible by the provincial or
city treasurer concerned, whichever is lower, the appropriations for
salaries and wages of officials and employees in the public schools,
hospitals, health and agricultural services, public utilities, markets
and slaughterhouses and other economic enterprises owned, operated and
maintained by the province, city or municipality, as well as
representation and emergency cost-of-living allowances, shall not be
included in the computation of the maximum expandable for salaries and
wages.
The Secretary of Finance, however, may recommend to proper authority
the setting aside of appropriations in excess of the percentages
hereinabove fixed subject to such conditions as may be imposed but in
case shall the exceed in appropriations for salaries and wages be more
than twenty-five per cent (25%) of the maximum expendable amounts nor
shall such exemption be granted in case of overdraft or imminence
thereof.
Sec. 7. Special Provisions. — Provinces, cities or
municipalities whose income classification shall have been raised or
reduced pursuant to the provisions of this Executive Order shall
accordingly revise and adjust their existing position classification
and pay plans in accordance with the pertinent provisions of prevailing
circular issued by the joint Commission on Local Government Personnel
Administration created under PD 1136; Provided, That no official or
employee in the local governments shall suffer any diminution of the
basic salary rate that he is actually receiving at the time of the
effectivity of this Executive Order.
For purposes of the preparation and authorization of local government
budget for CY 1988, the regular appropriations for salaries and wages
in the General and Infrastructure Funds of the Local Governments shall
be commensurate only to the salary scales and rates of allowances, per
diems and other emoluments of local government officials and personnel
corresponding to their respective new classifications. However,
additional appropriations shall be set aside to cover in full any
deficiency that will be necessary to maintain the payment of basic
salaries at the rates actually being received by local government
officials and personnel at the time of the effectivity of this
Executive Order.
Newly appointed or promoted personnel shall receive salaries at rates
authorized for new classification of the local government unit.
For proper implementation of these special provisions the joint
Commission on Local Government Personnel Administration shall, within
sixty (60) days from the effectivity of this Executive Order, issue
appropriate guidelines and procedures for the information and guidance
of the local governments.
Sec. 8. Maximum Rates of Local Taxes. —
Notwithstanding any change in income classification by virtue of this
Executive Order, any province, city or municipality may maintain or
adjust accordingly the existing rates of local taxes: Provided, That
any local tax ordinance enacted for the purpose shall be subject to the
review and approval of the Secretary of Finance who, within sixty (60)
days from receipt of the ordinance, shall determine the reasonableness
thereof and its effect on the finances of the local governments.
Sec. 9. Administrative Authority of the Secretary
of Finance. — The Secretary of Finance shall have the authority to
review the income ranges herein provided at least once every four years
after the implementation of this Executive Order and recommend such
appropriate changes or revisions to the proper authority in order that
the income classification of local government units may continue to
conform with prevailing economic conditions and the overall financial
status of the local governments.
Sec. 10. Implementing Rules and Regulations. — For
purposes of implementation of this Executive Order, the Secretary of
Finance shall issue such rules and regulations as he may deem necessary
and appropriate Department Orders fixing the new classifications of
provinces, cities and municipalities.
Sec. 11. Repealing Clause. — Presidential Decree
No. 465, dated May 20, 1974 is hereby repealed, all laws, orders,
issuances, rules and regulations or parts thereof inconsistent with
this Executive Order are hereby repealed or modified accordingly.
Sec. 12. Effectivity. — This Executive Order shall
take effect immediately.
Done in the City of Manila,
this 25th day of July, in the year of Our Lord, nineteen hundred and
eighty-seven.
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Since 19.07.98.