The Department of the Interior and Local Government lauds President Ferdinand R. Marcos, Jr.’s approval of Republic Act No. 11964, which provides for the automatic income classification of local government units.

“RA 11964 is clear proof that the President—himself a former local chief executive—and his administration understands and values the role of LGUs in national development,” DILG Secretary Benjamin C. Abalos, Jr. said.

Under the new law, a general income reclassification of LGUs shall be made within six months and then automatically every three years thereafter.

“This is very, very important to our LGUs as income classification impacts their ability to undertake development projects, access financial grants from various sources, and determine the salary of LGU personnel,” Secretary Abalos explained.

“With this new law, we now have a better, more flexible system of determining income classification, which responds to current economic contexts and considers the impact of the Mandanas-Garcia ruling,” he continued.

RA 11964 also adjusts the income ranges that serve as basis for classification, determined through the average annual regular income of the LGU for the past three fiscal years. Further adjustment to these income ranges may be made administratively and shall be in consultation with local government leagues.

“The enactment of this law is also an apt development as we close the celebration of the Local Government Month this October. Truly, we stand closer than ever to the genuine local autonomy that was envisioned through the Local Government Code thirty-two years ago,” Secretary Abalos said.