Tacloban City: At least 106 of 136 towns in Eastern Visayas have been upgraded in income classification according to the latest guidelines from the Department of Finance (DOF), an official announced.
According to Philippines News Agency, Maria Rosaura Espejo, who heads the Bureau of Local Government Finance (BLGF) regional financial, monitoring, and evaluation unit, disclosed that improvements in income classification were also seen in four of the six provinces and three of the seven cities in the region. Among the 106 municipalities with higher classification, 34 are in Leyte, 18 in Samar, 18 in Northern Samar, 17 in Eastern Samar, 12 in Southern Leyte, and seven in Biliran.
Espejo highlighted the importance of this reclassification, stating that it reflects a local government unit’s capacity to implement development programs. The reclassified towns will receive a larger share of national taxes, which is expected to enhance public service delivery.
Municipalities are categorized based on their average annual income over three years: 1st class municipalities earn PHP200 million or more, 2nd class earn between PHP160 million and less than PHP200 million, 3rd class earn between PHP130 million and less than PHP160 million, and 4th class earn between PHP90 million and less than PHP130 million. Municipalities with revenues of less than PHP90 million are classified as 5th class.
The provinces that saw an upgrade in income classification include Biliran, Eastern Samar, Northern Samar, and Southern Leyte. For the cities, Baybay City in Leyte, Catbalogan City in Samar, and Maasin City in Southern Leyte experienced an upgrade.
Espejo noted that the reclassification follows a DOF department order issued in November 2024, marking the first general reclassification of LGUs in the country since 2008. Future reclassifications will be automatic as per the new law.
On October 24, 2024, President Ferdinand R. Marcos Jr. signed Republic Act 11964 into law, institutionalizing the automatic income classification of local government units. This law aims to provide a more responsive approach to local autonomy and empower LGUs to achieve their full economic potential.
The income classification serves as a basis for determining administrative and statutory aids, financial grants, and other forms of assistance to LGUs. It also influences the capability of LGUs to undertake development programs, the annual supplemental appropriation for personal services, and adjustments in LGU personnel compensation under Republic Act 11466, also known as the ‘Salary Standardization Law of 2019.’
Additionally, it aids in the creation of new LGUs, setting the number of elective members in local councils, issuing free patent titles to residential lands, setting minimum wages for domestic workers, insuring LGU properties, and determining the percentage of agricultural land that can be reclassified.
