EXECUTIVE ORDER NO. 249 July 25, 1987
PROVIDING 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...
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Executive Orders
Providing For A New Income Classification of Provinces, Cities and Municipalities, and For Other Purposes
Executive Order No. 249
Summary of Executive Order No. 249
Income Classification of Provinces, Cities and Municipalities
- Provinces, cities (except Manila and Quezon City) and municipalities are divided into 6 classes based on average annual income realized in the last 4 calendar years. (Sec. 1 & 2)
- Income ranges for each class are specified for provinces/cities and municipalities. (Sec. 1 & 2)
- For new provinces/cities/municipalities with less than 4 years, classification is based on average income during the existing period. (Sec. 3)
Definition of Terms
- "Annual income" refers to revenues and receipts from regular sources of local general and infrastructure funds, excluding non-recurring receipts. (Sec. 4a)
- "Average annual income" is the sum of annual income divided by the number of calendar years, as certified by the Commission on Audit. (Sec. 4b)
Uses of Income Classification
- Fixing maximum tax ceilings imposable by local governments. (Sec. 5a)
- Determining administrative and statutory aids, financial grants, and other assistance to local governments. (Sec. 5b)
- Establishing salary scales, allowances, per diems, and other emoluments for local government officials and personnel. (Sec. 5c)
- Implementing personnel policies on promotions, transfers, details or secondment at the local government levels. (Sec. 5d)
- Formulating and executing local government budget policies. (Sec. 5e)
- Determining the financial capability of local government units to undertake developmental programs and priority projects. (Sec. 5f)
Maximum Amount Expendable for Salaries and Wages
- Total annual appropriations for salaries and wages shall not exceed 45% for first and second class, and 55% for lower than second class, of the total annual income from regular sources in the preceding or current year, whichever is lower. (Sec. 6)
- Exclusions from the computation are salaries and wages in public schools, hospitals, health and agricultural services, public utilities, markets, slaughterhouses, and other economic enterprises, as well as representation and emergency cost-of-living allowances. (Sec. 6)
- The Secretary of Finance may recommend setting aside appropriations in excess of the percentages, subject to conditions, but not more than 25% of the maximum expendable amounts. (Sec. 6)
Special Provisions
- Local governments shall revise and adjust their existing position classification and pay plans in accordance with the new classification, without diminution of basic salary rates. (Sec. 7)
- For CY 1988 budget, regular appropriations for salaries and wages shall be commensurate with the new classification, with additional appropriations to cover any deficiency in maintaining existing basic salaries. (Sec. 7)
- Newly appointed or promoted personnel shall receive salaries at rates authorized for the new classification. (Sec. 7)
- The Joint Commission on Local Government Personnel Administration shall issue guidelines and procedures within 60 days. (Sec. 7)
Maximum Rates of Local Taxes
- Local governments may maintain or adjust existing rates of local taxes, subject to review and approval by the Secretary of Finance within 60 days. (Sec. 8)
Administrative Authority of the Secretary of Finance
- The Secretary of Finance shall review the income ranges at least once every 4 years and recommend changes to conform with prevailing economic conditions and overall financial status of local governments. (Sec. 9)
- The Secretary of Finance shall issue rules and regulations and Department Orders fixing the new classifications of provinces, cities and municipalities. (Sec. 10)
Repealing Clause and Effectivity
- Presidential Decree No. 465 is repealed, and all inconsistent laws, orders, issuances, rules and regulations are repealed or modified accordingly. (Sec. 11)
- This Executive Order shall take effect immediately. (Sec. 12)
Income Classification of Provinces, Cities and Municipalities
- Provinces, cities (except Manila and Quezon City) and municipalities are divided into 6 classes based on average annual income realized in the last 4 calendar years. (Sec. 1 & 2)
- Income ranges for each class are specified for provinces/cities and municipalities. (Sec. 1 & 2)
- For new provinces/cities/municipalities with less than 4 years, classification is based on average income during the existing period. (Sec. 3)
Definition of Terms
- "Annual income" refers to revenues and receipts from regular sources of local general and infrastructure funds, excluding non-recurring receipts. (Sec. 4a)
- "Average annual income" is the sum of annual income divided by the number of calendar years, as certified by the Commission on Audit. (Sec. 4b)
Uses of Income Classification
- Fixing maximum tax ceilings imposable by local governments. (Sec. 5a)
- Determining administrative and statutory aids, financial grants, and other assistance to local governments. (Sec. 5b)
- Establishing salary scales, allowances, per diems, and other emoluments for local government officials and personnel. (Sec. 5c)
- Implementing personnel policies on promotions, transfers, details or secondment at the local government levels. (Sec. 5d)
- Formulating and executing local government budget policies. (Sec. 5e)
- Determining the financial capability of local government units to undertake developmental programs and priority projects. (Sec. 5f)
Maximum Amount Expendable for Salaries and Wages
- Total annual appropriations for salaries and wages shall not exceed 45% for first and second class, and 55% for lower than second class, of the total annual income from regular sources in the preceding or current year, whichever is lower. (Sec. 6)
- Exclusions from the computation are salaries and wages in public schools, hospitals, health and agricultural services, public utilities, markets, slaughterhouses, and other economic enterprises, as well as representation and emergency cost-of-living allowances. (Sec. 6)
- The Secretary of Finance may recommend setting aside appropriations in excess of the percentages, subject to conditions, but not more than 25% of the maximum expendable amounts. (Sec. 6)
Special Provisions
- Local governments shall revise and adjust their existing position classification and pay plans in accordance with the new classification, without diminution of basic salary rates. (Sec. 7)
- For CY 1988 budget, regular appropriations for salaries and wages shall be commensurate with the new classification, with additional appropriations to cover any deficiency in maintaining existing basic salaries. (Sec. 7)
- Newly appointed or promoted personnel shall receive salaries at rates authorized for the new classification. (Sec. 7)
- The Joint Commission on Local Government Personnel Administration shall issue guidelines and procedures within 60 days. (Sec. 7)
Maximum Rates of Local Taxes
- Local governments may maintain or adjust existing rates of local taxes, subject to review and approval by the Secretary of Finance within 60 days. (Sec. 8)
Administrative Authority of the Secretary of Finance
- The Secretary of Finance shall review the income ranges at least once every 4 years and recommend changes to conform with prevailing economic conditions and overall financial status of local governments. (Sec. 9)
- The Secretary of Finance shall issue rules and regulations and Department Orders fixing the new classifications of provinces, cities and municipalities. (Sec. 10)
Repealing Clause and Effectivity
- Presidential Decree No. 465 is repealed, and all inconsistent laws, orders, issuances, rules and regulations are repealed or modified accordingly. (Sec. 11)
- This Executive Order shall take effect immediately. (Sec. 12)