Local Government Units (LGUs) are entitled to an equitable share in the proceeds of the utilization and

development of national wealth within their respective areas. The 1987 Constitution conferred on LGUs
the power to create its own sources of revenue and the right to share not only in the national taxes, but
also in the proceeds of the utilization of national wealth in their respective areas. LGUs shall, in addition
to the internal revenue allotment, have a share of forty percent (40%) of the gross collection derived by
the national government from the preceding fiscal year from mining taxes, royalties, forestry and fishery
charges, and such other taxes, fees, or charges, including related surcharges, interests, or fines, and
from its share in any co-production, joint venture or production sharing agreement in the utilization and
development of the national wealth within their territorial jurisdiction. Territorial jurisdiction refers to
the LGU's territorial boundaries. (Republic of the Philippines, represented by Raphael P.M. Lotilla,
Secretary, Department of Energy (DOE), et al. vs. Provincial Government of Palawan, represented by
Governor Abraham Kahlil B. Mitra/Bishop Pedro Dulay Arigo, et al. vs. Hon. Executive Secretary Eduardo
R. Ermita, et al., G.R. No. 170867/185941, 04 December 2018)