The Republic Act No. 7160, otherwise known as the Local Government Code of 1991 (LGC), stands as the most significant piece of legislation concerning the administrative structure of the Philippines since the restoration of democracy. Enacted on October 10, 1991, and becoming effective on January 1, 1992, the Code sought to transform Local Government Units (LGUs) from mere administrative extensions of the national government into self-reliant communities and active partners in nation-building.
1. Declaration of Policy and Principles of Decentralization
The bedrock of the LGC is the constitutional mandate for local autonomy. The Code operates on the principle that the most effective way to provide services is to bring the decision-making process closer to the people.
Basic Principles:
- Effective Devolution: The transfer of power and authority from the national government to LGUs.
- Self-Reliance: LGUs are empowered to create their own sources of revenue and manage their own financial resources.
- Accountability: Local officials are made directly responsible to their constituents through mechanisms like recall and people’s participation.
2. Devolution of Basic Services and Facilities
One of the most impactful provisions of the LGC is the devolution of functions. Responsibility for the delivery of basic services was transferred from national agencies to LGUs.
| Sector | Devolved Functions |
|---|---|
| Health | Maintenance of barangay health centers, municipal hospitals, and tertiary hospitals (provincial level). |
| Agriculture | Extension services, distribution of seeds, and local irrigation systems. |
| Social Welfare | Programs for the elderly, disabled, and victims of drug abuse; poverty alleviation. |
| Public Works | Construction and maintenance of local roads, bridges, and drainage systems funded by local funds. |
| Environment | Community-based forestry projects and solid waste management. |
3. The Hierarchy and Structure of LGUs
The LGC defines the roles and requirements for the four tiers of local government:
The Barangay
The primary planning and implementing unit. It serves as the forum where the collective views of the people are expressed and where disputes are mediated through the Katarungang Pambarangay (Barangay Justice System).
The Municipality
Consists of a group of barangays. It serves primarily as a general-purpose government for the coordination and delivery of basic, regular, and direct services within its jurisdiction.
The City
Similar to municipalities but with greater financial capacity and population. Cities are classified as Component Cities (under provincial supervision) or Highly Urbanized Cities (independent of the province).
The Province
The largest political unit, composed of a cluster of municipalities and component cities. Its primary role is to ensure that every component LGU acts within the scope of its prescribed powers and functions.
4. Local Fiscal Autonomy and the "Just Share"
Under the LGC, LGUs have the "power to create its own sources of revenue and to levy taxes, fees, and charges."
Power of Taxation
LGUs can levy real property taxes, business taxes, and various fees (e.g., franchise taxes, sand and gravel taxes). However, they cannot tax goods carried into or out of their jurisdiction (prohibition on "ceped" or transit fees).
The Mandanas-Garcia Ruling
Historically, LGUs received an Internal Revenue Allotment (IRA) based solely on national internal revenue taxes. However, the landmark Mandanas-Garcia Ruling (G.R. No. 204664) clarified that the "just share" of LGUs must be computed based on all national taxes, including customs duties. This significantly increased the fiscal resources available to local governments, now referred to as the National Tax Allotment (NTA).
5. Eminent Domain and Police Power
LGUs exercise delegated sovereign powers:
- Eminent Domain: An LGU, through its chief executive and an ordinance, may take private property for public use, purpose, or welfare upon payment of just compensation.
- Police Power: LGUs may enact ordinances to promote the general welfare, health, safety, and morals of their inhabitants.
- Closure of Roads: LGUs have the authority to permanently or temporarily close local roads, alleys, or parks, provided they comply with the requirements of public notice and compensation where applicable.
6. People’s Participation and Civil Society
The LGC mandates the involvement of Non-Governmental Organizations (NGOs) and People’s Organizations (POs) in local governance.
- Local Development Councils (LDCs): At least 25% of the membership of LDCs must come from the private sector or NGOs.
- Local Boards: NGOs must have representation in the Local Health Board, Local School Board, and Local Peace and Order Council.
- Initiative and Referendum: The legal process whereby registered voters can directly propose, enact, or reject ordinances.
7. Term Limits and Vacancies
To prevent the concentration of power, the LGC (consistent with the Constitution) limits the terms of elective local officials.
Section 43: The term of office of all local elective officials shall be three (3) years. No local elective official shall serve for more than three (3) consecutive terms in the same position.
In cases of permanent vacancies (death, resignation, or permanent incapacity):
- Governor/Mayor: The Vice-Governor or Vice-Mayor automatically succeeds.
- Sanggunian (Council): Vacancies are filled by appointment by the higher executive authority (e.g., the President for provincial vacancies, the Governor for municipal vacancies), usually based on the political party of the member who caused the vacancy.
8. The Lingua Franca of Local Disputes: Katarungang Pambarangay
The Code institutionalizes a system of amicable settlement of disputes at the barangay level to help decongest court dockets. No complaint can be filed in court unless it has undergone mediation before the Lupong Tagapamayapa, except for specific cases involving government entities, urgent legal remedies, or offenses punishable by imprisonment exceeding one year.