REPUBLIC OF THE PHILIPPINES

NORTHERN NEGROS STATE COLLEGE OF SCIENCE AND

TECHNOLOGY
OLD SAGAY, SAGAY CITY, NEGROS OCCIDENTAL
(034)722-4169/www.nonescost.edu.com

COLLEGE OF BUSINESS
AND MANAGEMENT
(Bachelor of Public
Administration)
COURSE MODULE IN
PHILIPPINE
ADMINISTRATIVE
THOUGHT AND
INSTITUTION
1 Semester; A.Y. 2022 – 2023
st

2
COURSE FACILITATOR: APRIL ROSE MAE B. MORADA, LPT, MPA
FB/MESSENGER: April Rose Mae Morada
Email: smilemorada410@gmail.com
Phone No: 09104363697

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 VISION

Northern Negros State College of Science and technology envisions a skillful and

productive manpower, qualified and competent professionals endowed with leadership qualities,

commitment to public service, a common shared value, and capacities to integrate and use new

knowledge and skills in various vocations and professions to meet the challenges of the new

millennium.

MISSION

To train and develop semi-skilled manpower, middle level professionals and competent

and qualified leaders in the various professions responsive to the needs and requirements of

the service areas providing appropriate and relevant curricular programs and offerings, research

projects and entrepreneurial activities, extension services and develop progressive leadership

to effect socio-economic change and thereby improve the quality of life.

INSTITUTIONAL OUTCOMES

1. Demonstrate logical thinking, critical judgment and independent decision-making on any

confronting situations
2. Demonstrate necessary knowledge, skills and desirable attitudes expected of one’s
educational level and field of discipline
3. Exhibit necessary knowledge, skills and desirable attitudes in research
4. Exhibit proactive and collaborative attributes in diverse fields
5. Manifest abilities and willingness to work well with others either in the practice of one’s
profession or community involvement without compromising legal and ethical
responsibilities and accountabilities.

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PROGRAM LEARNING OUTCOMES

BPA Program Outcomes:

The program shall produce a graduate who can:

a. articulate and discuss the latest developments in the specific field of practice;
b. effectively communicate orally and in writing using both English and Filipino;
c. work effectively and independently in multi-disciplinary and multi-cultural teams;
d. act in recognition of professional, social and ethical responsibility;
e. preserve and promote “Filipino historical and cultural heritage”;
f. demonstrate corporate citizenship and social responsibility;
g. exercise high personal moral and ethical standards;
h. apply information and communication technology (ICT) skills as required for Public
Administration;
i. employ adequate knowledge and understanding of fundamentals of good governance;
j. demonstrate high appreciation for the demands and challenges of public service;
k. develop ethical values for public service, accountability, nationalism and sustainability;
l. exhibit strong sense of duty to promote and protect public interest especially for the
depressed and the marginalized communities;
m. apply adequate skills in management including planning, implementation, monitoring and
human, material and resource management for government and civil society
organizations; and
n. apply adequate ability to engage in scientific research and national decision-making.

NONESCOST BPA Program Outcomes:

The program shall produce a graduate who can:
1. conceptualize, utilize and commercialize administrative and management research
outputs;
2. apply current and relevant practices and trends in the public sector; and
3. assess and address issues of the community in the field of public administration and
management.

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Warm greetings!

Welcome to the second semester of School Year 2022-2023! Welcome to the College of
Business and Management and welcome to NONESCOST!

Despite of all the happenings around us, there is still so much to be thankful for and one
of these is the opportunity to continue learning.

You are right now browsing your course module in PA103, Philippine Administrative
Thought and Institution. As you read on, you will have an overview of the course, the
content, requirements and other related information regarding the course. The module is
made up of 2 lessons. Each lesson has seven parts:

INTRODUCTION- Overview of the lesson

LEARNING OUTCOMES- Lesson objectives for you to ponder on

MOTIVATION- Fuels you to go on

PRESENTATION- A smooth transition to the lesson

TEACHING POINTS- Collection of ideas that you must discover

LEARNING ACTIVITIES – To measure your learnings in the lesson where you wandered

ASSESSMENT – To test your understanding in the lesson you discovered

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 Please read your modules and learn the concepts by heart. It would help you prepare to
be effective and efficient professional in your respective fields. You can explore more of
the concepts by reading the references and the supplementary readings.

I encourage you to get in touch with me in case you may encounter problems while
studying your modules. Keep a constant and open communication. Use your real names
in your FB accounts or messenger so I can recognize you based on the list of officially
enrolled students in the course. I would be very glad to assist you in your journey.
Furthermore, I would also suggest that you build a workgroup among your classmates.
Participate actively in our discussion board or online discussion if possible and submit
your outputs/requirements on time. You may submit them online through email and
messenger. You can also submit hard copies. Place them in short size bond paper inside
a short plastic envelop with your names and submit them in designated pick-up areas.

I hope that you will find this course interesting and fun. I hope to know more of your
experiences, insights, challenges and difficulties in learning as we go along this course. I
am very positive that we will successfully meet the objectives of the course.

May you continue to find inspiration to become a great professional. Keep safe and God
bless!

Course Outline in PA 103 – Philippine Administrative Thought & Institution

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 Course
PA 103
Number
Course Title Philippine Administrative Thought and Institution
This course introduces students to the theories and ideas underlying
the Philippine Administrative System; the general structure of the Philippine
Course
bureaucracy; its principal operating features, including the personnel system,
Description
the financial system, the processes of policy-making, national-local relations,
and problem areas.
No. of Units 3 units
Pre-requisites None
1. Identify the characteristics of the national government and local
government, including the executive, legislative and judiciary branches
of government
Course 2. Identify the financial system and process of policy-making in national
Intended and local government
Learning
Outcomes 3. Recognize the local government units of the Philippines
4. Identify the duties and responsibilities of the Local Government Units
5. Evaluate the role of the Local Government Units in the Philippine
system of governing
Content MODULE 1
Coverage LESSON 1
INTRODUCTION TO CHARACTERISTICS AND STRUCTURES OF
PHILIPPINE GOVERNMENT
A. Demography of the Philippines
B. Concept and Framework of Philippine Government
C. Separation of Powers
D. Bureaucracy and Philippine Government
E. Political Development of Philippine Government

LESSON 2
BASIC PRINCIPLES, CODE, POLICY AND APPLICATION TO LOCAL
GOVERNMENT OF THE PHILIPPINES
A. Republic Act No. 7160
B. Local Government Code of 1991
C. Decentralization
D. Decentralization, Power and Networked Governance Practices in
Metro Manila by Emma Porio

MODULE 2
LESSON 1
GENERAL PROVISIONS OF LOCAL GOVERNMENT
A. Local Government Power and Attributes
B. Intergovernmental Relations
C. Non-governmental Organization and People Relations
D. Local Special Bodies

LESSON 2
LOCAL TAXATION AND FISCAL MATTERS
A. Sustainable Development
B. Taxing Powers, Scope and Limitations of National Government
Agencies
C. Taxing Powers, Scope and Limitations of Local Government Units
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 (RA No. 7160 – The Local Government Code of 1991)
D. Procedures and Sharing System of Internal Revenue Allotments
E. Responsibilities and Accountabilities Agencies Involved in Fiscal
F. Government Enterprises
G. Role of Management in Promoting Gender Equality

MODULE 3
LESSON 1
LOCAL GOVERNMENT UNITS: ROLE, CREATION, OFFICIALS AND
OFFICES
A. Local Administration
B. The Philippine Administrative System
C. Types of LGU’s
D. Concepts and Definitions (Local Government Units)
E. LGU Creation Criteria
F. Branches/Composition of LGU’s
G. Layers of Local Authority
H. Powers of the LCE’s
I. Powers of the Sanggunian
J. Approval of Ordinances
K. Issues and Concerns
L. Duties of LGU According to Gender Related Laws

LESSON 2
MISCELLANEOUS AND FINAL PROVISIONS OF LOCAL
GOVERNMENT
A. Penal Provisions
B. Provisions for Implementation
C. Transitory Provisions
D. Final Provisions

REFERENCES:
R1 - Course Syllabus
R2 - Atienza’, Maria Ela L. (2006). “Local Government and Devolution in
the Philippines. “In Noel M. Morada and Teresa S. Encarnacion
Tadem (Eds.), Philippine Politics and Governance: An Introduction.
Diliman, Quezon City: Department of Political Science, College of
Social Sciences and Philosophy, University of the Philippines. pp.
415-440.
R3 - Dolan, Ronald E. (Ed.). (1991). “Philippines: A country study.
Washington, D.C.” GPO for the Library of Congress. pp. 191 – 206.
References R4 - Republic of the Philippines, Department of the Interior and Local
Government. (1991). “Local government code of 1991, Book III,
Local Government Units.”pp. 117.
R5 - Tapales, P.D (1998). “Local Government in the Philippines: A book
of Reading.” (Vol. 1) Diliman Quezon City: NCPAG Publication
Office. pp. 5-25.
R6 - The 1987 Constitution of the Republic of the Philippines – Article X.
(1987). Article X. pp 3-41.

ONLINE REFERENCES:
OR1 - https://www.worldometers.info/demographics/philippines-
demographics/

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 OR2 - https://www.lawphil.net/statutes/repacts/ra1991/ra_7160_1991.html
OR3 - http://www.dilg.gov.ph/PDF_File/reports_resources/DILG-Resources-
201162- 99c00c33f8.pdf
OR4 - http://www.gov.ph/constitutions/the-1987-constitution-of-the-republic-
ofthe-philippines/the-1987-constitution-of-the-republic-of-the-philippines-
article-x/

1. Active class participation (online discussion board, FB Closed group

account)
2. Module Activities/Final Outputs
Course
Requirements 3. Quizzes
4. Term Examinations
5. Submit all activities required

Prepared by: April Rose Mae B. Morada, LPT, MPA

Reviewed and Approved by:

Subject Area Coordinator/

Program Head : ERNALYN M. AURETA, MPA

Dean, CBM : RICHEL P. ALOB, Ph. D.

OIC GAD Director : JACKIELEE A. ANACLETO, LPT, MAED

CIMD Chairperson : MA. JANET S. GEROSO, LPT, Ph. D.

QA Director : DONNA FE V. TOLEDO, LPT, Ed. D.

OIC VP- Academic Affairs : LEA MAE K. CALIMPONG, LPT, MAEd

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 MODULE 2

LESSO
N
GENERAL PROVISIONS OF
1 LOCAL GOVERNMENT
9
HOURS

 This module introduces you to the concept of Local Government Unit (LGU) in which focuses in the
program of good governance, economic development and public fiscal administration that is valuable and beneficial
to the community, businesses and welfare of the people. The main tasks of the local and national government were
the maintenance of law and order and the collection of taxes. The LGUs with respect to financial management,
authorized to create income and were given the power to enhance their financial resources by allowing them to
increase tax rates. However, thus module will be breakdown the aspects of local government in mind, attention will
be directed towards the typical structure of local government forms the basic framework where in local public policy
is determined and implemented.

At the end of this lesson, you are expected to:

a. discuss the authority, creation and conversion of Local Government Units;
b. discuss the general welfare, basic services and facilities;
c. describe the power to generate and apply resources;
d. define the concept of eminent domain and corporate powers;
e. discuss the supervision of National over LGU;
f. describe the relation of Philippine National Police to the LGU;
g. discuss the role linkages and assistance of relations with people’s and non-governmental
organization;
h. discuss the concept of Local Prequalification of Bids and Awards Committee.
i.

ACTIVITY #1: ESSAY, EASY PEASY!

Instruction: Answer the following questions. (5 points each)

a) What is a Local Government Unit?

__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
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 b) What are the levels of government in the Philippines?
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________

ACTIVITY #2: DESCRIBE IT!

Instruction: Describe the meaning of the words below. (5 points)

1) POWER:
__________________________________________________________________________________
__________________________________________________________________________________
2) ATTRIBUTES:
__________________________________________________________________________________
__________________________________________________________________________________

I. LOCAL GOVERNMENT POWER AND ATTRIBUTES

A. STRUCTURE, POWER AND FUNCTIONS OF LGU IN THE PHILIPPINES
Sec. 3, Art. X of the 1987 Constitution:
The Congress shall enact a local government code which shall provide for a more responsive and
accountable local government structure instituted through a system of decentralization with effective
mechanisms of recall, initiative, and referendum, allocate among the different local government units their
powers, responsibilities, and resources, and provide for the qualification, election, appointment or removal,
term, salaries, powers and functions and duties of local officials and all other matters relating to the
organization and operation of the local units.
Sec. 4 of 1991 LGC. Scope of Application.
This Code shall apply to all provinces, cities, municipalities, barangays, and other political subdivisions
as may be created by law, and, to the extent herein provided, to officials, offices, or agencies of the national
government. Cities shall be governed by their charters as long as the charters are not inconsistent with 1991
LGC. (Sec. 534(f))
The national government by law creates, merges or abolishes LGUs, endows them with powers within their
jurisdictions and determines national-local government units.
While these local units may be created by law, the Local Government Code mandates that the residents of
the areas affected by the creation should approve the measure in a plebiscite.

HOW LGU IS MADE?

 Sec. 6 of the Local Government Code of 1991:
Authority to create Local Government Units- a Local Government Unit may be created, divide, merged,
abolished, or its boundaries substantially altered either by law enacted by congress in the case of
province, city, municipality or any other political subdivision or by ordinances passed by the
Sangguniang Panlalawigan or Sangguniang Panlungsod concerned in the case of a barangay located
within its territorial jurisdiction, subject to such limitations and requirements prescribed in this code.

B. LGU’s ROLE IN DEVELOPMENT

Sec. 16. General Welfare. – LGUs shall ensure and support preservation & enrichment of culture, promote
health & safety, enhance right of people to a balanced ecology, encourage & support development of
appropriate & self-reliant scientific & technological capabilities, improve economic prosperity & social

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 justice, promote full employment among residents, maintain peace & order, & preserve the comfort &
convenience of inhabitants.
Sec. 17. Basic Services & Facilities. – LGUs shall discharge the functions & responsibilities of national
agencies & offices devolved to them; exercise powers & discharge functions & responsibilities incidental to
efficient & effective provision of the basic services and facilities enumerated.
Devolved Basic Services
 Agriculture
 Health
 Social services
 Environment & natural resources
 Public works
 Tourism
 School building program

C. REGULATORY POWERS AND CORPORATE POWERS

- Power to generate & apply resources
- Power of eminent domain
- Power to reclassify agricultural lands (not under CARP): 15% for HUC &
- Independent Component Cities; 10% for
- Component Cities & 1st to 3rd Class Municipalities; 5% for 4th to 6th Class
- Municipalities
- Power to close & open roads
- Inspection of food products
- Adoption of quarantine regulations
- Enforcement of National Building Code
- Regulation and operation of tricycles
- Regulation of real estate trade and business
- Licensing of cockpits & regulation of cockfighting

WHAT IS A PUBLIC CORPORATION?

 Those formed or organized by the organized by the government of a portion of the state for the
accomplishment of parts of its own public works.
 An LGU’s also a business unit of the government
 An LGU’s has corporate powers

CORPORATE POWERS (Sec. 22 of the LOCAL GOVERNMENT CODE OF 1991)

 A continuous use of its corporate name
 TO SUE AND TO BE SUED (ex. Renz Ramoset. AL. VS City of Pasig)
 To have a use of corporate seal
 To acquire and convey a real or personal property
 To enter into contracts and/or agreements
 To exercise such other powers as are granted to corporations subject to limitations provided by the
law.

D. OTHERS POWER OF LGU (Police Power, Eminent Domain and Generate Tax)

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E. TYPES OF LGU’s UNDER THE 1987 PHILIPPINE CONSTITUTION
Sec. 1, Art. X:
The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities,
municipalities, and barangays. There shall be autonomous regions in Muslim Mindanao and the Cordilleras as
herein provided.
 Autonomous Regions – 2 regions were pre-identified but only one is existing
 Provinces – composed of clusters of municipalities or municipalities and component cities
 Cities – component (independent & dependent) and highly urbanized
 Municipalities – composed of barangays
 Barangays – basic political unit

F. SPECIAL TYPE OF LGU

Sec. 11, Art. X, 1987 Constitution:
The Congress may, by law, create special metropolitan political subdivisions, subject to a plebiscite as set
forth in Section 10 hereof, the component cities and municipalities shall retain their basic autonomy and shall
be entitled to their own local executives and legislative assemblies. The jurisdiction of the metropolitan
authority that will thereby be created shall be limited to basic services requiring coordination; PD 824(MMC,
4/76), EO 392(MMA,1/9/90, RA 7924(MMDA, 2/95)

G. LGU CREATION CRITERIA

H. POWERS OF THE LCE’s

- Execute all applicable laws & ordinances within territorial jurisdiction
- Appointing authority
- Supervisory authority over executive officials of unit
- Issuance of executive orders
- Police power
- Visitorial power
- Issuance of permits
- Difference: mayors can solemnize marriage

I. GUIDELINESS ON ORGANIZATIONAL STRUCTURE

LGUs may create optional positions provided all mandatory positions were created in accordance with
budgetary limitations
Tenure of Administrator, Information Officer &Legal Officer shall be coterminous with LCE
May create other offices & positions provided that mandatory positions have been created & subject to
budgetary limitations
Heads of departments and offices shall be appointed by the LCE with the concurrence of majority of all
members of Sanggunian subject to civil service law, rules and regulations
Qualification requirements provided in the Code shall be applied; no substitution for deficiency in education
and/or experience shall be allowed

Structural Units of an Office:

Section = lowest structural unit/level composed of at least 3 personnel
Division = second highest structural unit/level composed of at least 2 sections
Department = highest structural unit/level composed of at least 4 divisions
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J. LOCAL FISCAL ADMINISTRATION
Fundamental Principles:
No money shall be paid out of local treasury without an appropriation ordinance or law
LG funds & monies shall be spent solely for public purposes
Local revenue generated only from sources authorized by law or ordinance, & collection must be
acknowledged properly
Monies officially received in any capacity or occasion shall be accounted as local funds, unless
otherwise provided by law

FISCAL ADMINISTRATION FUNDAMENTAL PRINCIPLES

 Trust funds in local treasury shall not be paid out except in fulfillment of purpose for which trust was
created or funds received
 Accountable officers must be properly bonded
 LGs shall formulate sound financial plans, & local budgets shall be based on functions, activities, &
projects, in terms of expected results
 Budget plans shall be harmonized with national development plans, goals & strategies to optimize
resource utilization & avoid duplication in use of fiscal & physical resources
 Budgets shall operationalize approved local development plans
 LGUs shall ensure budgets incorporate requirements of component units equitably
 National planning shall be based on local planning to ensure consideration of local needs & aspirations
 Fiscal responsibility shall be shared by all those exercising authority over financial affairs, transactions,
& operations of LGUs
 LGUs shall endeavor to have a balanced budget in each fiscal year

K. RESOUCES GENERATION & ALLOCATION

Sources of Revenue:
Local generated: business tax & other local taxes; real property tax
Externally sourced: share in BIR collections (IRA); share in proceeds from national wealth

DISTRIBUTION FORMULA
National wealth located in a Province
Province = 20%
Component city/municipality = 45%
Barangays = 35%

National wealth located in two or more LGUs

Population = 70%
Land Area = 30%

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 BUDGETARY LIMITATION (Sec. 325)
 45-55% limitation on personnel services
 No salary rate higher than maximum fixed for position
 No appropriations for salary increase of NGA officials & employees
 Abolition & creation of positions must be in accordance with Code & CS law, rules & regulations
 Occupied plantilla positions (career) must be covered by adequate appropriations
 No reclassification of positions except when position is vacant
 Creation of new positions & salary increases or adjustments shall not be retroactive
 LCE discretionary fund shall be limited to 2% of real property tax in preceding calendar year

REVIEW OF APPROPRIATION
 DBM for Provinces, HUCs, Independent
 Component Cities, & Municipalities within the Metro Manila Area
 Sangguniang Panlalawigan for Component Cities & Municipalities

II. INTERGOVERNMENTAL RELATIONS

A. NATIONAL GOVERNMENT AND LOCAL GOVERNMENT
President exercises general supervision over LGUs to ensure compliance with prescribed powers &
functions
Coordination of NGAs with each other & with LGUs prior to project implementation
Provision for financial, technical or other forms of assistance to LGUs without extra cost
Submission of monthly reports to LCEs by NGA field units
Duty of NGAs to maintain local ecological balance
Prior consultations & Sanggunian approval required prior to project or program implementation

B. RELATIONS WITH PNP

 LCE extent of operational supervision and control over police force, fire protection unit, & jail management
personnel shall be governed by the provisions of RA 6975 or the DILG Act of 1990 & its implementing rules
& regulations.

LCE Powers re: PNP

Power to direct, superintend, oversee daily functions of police investigation of crime, crime
prevention activities, & traffic control
Power to direct employment & deployment of PNP units or elements thru station commander to
ensure public safety & effective maintenance of peace & order
Authority to choose chief of police from list of 5 eligible or recommend recall/reassign chief of
police
Authority to recommend transfer, reassignment or detail of PNP members outside LGU
Authority to recommend appointment of new members of PNP from a list of eligible for assignment
to LGU
Control & supervision of anti-gambling operations
Automatic deputation of LCEs as Commission representatives

C. INTER-LOCAL GOVERNMENT RELATIONS

Province thru governor shall ensure every component city & municipality acts within prescribed powers
& functions; HUCs & independent component cities are independent of the province
Governors review executive orders of mayors of component cities & municipalities; city & municipal
mayors review EOs of PBs
Municipal government may secure opinion of provincial legal officer or provincial prosecutor on any
legal question
City or municipal LCE exercises general supervision over component barangays to ensure compliance
with prescribed powers & functions
Cooperative undertakings among LGUs

III. NON-GOVERNMENTAL ORGANIZATION AND PEOPLE RELATIONS

A. RELATIONS WITH PEOPLE’s ORGANIZATION AND NON-GOVERNMENTAL ORGANIZATIONS
 Promote establishment & operation of POs & NGOs as active partners in autonomy pursuit
 Enter into joint ventures/cooperative arrangements with POs &NGOs in delivery of basic services,
capability building & livelihood projects, & develop local enterprises to improve productivity & income,
diversify agriculture, spur rural industrialization, promote ecological balance, & enhance economic & social
aspects

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 B. ASSISTANCE TO PEOPLE’s ORGANIZATION AND NON-GOVERNMENTAL ORGANIZATIONS
LCEs with concurrence of Sanggunian shall provide assistance, financial or otherwise, to POs & NGOs for
economic, socially-oriented, environmental, or cultural projects to be implemented

IV. LOCAL SPECIAL BODIES

A. LOCAL PREQUALIFICATION, BIDS AND AWARDS COMMITTEE
Conduct prequalification of contractors, bidding, evaluation of bids, &
recommendation of awards concerning local infrastructure projects
Composition: LCE as chairman; Sanggunian appropriations committee chairman, Sanggunian minority
representative, treasurer, 2 NGO representatives, practicing
CPA, & COA representative as observer

B. LOCAL SCHOOL BOARD (LSB)

Determine supplemental budget for public schools from real property special levy share (SEF)
Authorize disbursement of SEF
Advise Sanggunian on education matters
Recommend changes in public school names
Consulted by DepEd on appointments of Superintendents, supervisors, principals & other school
officials

 Local School Board Composition

 LCE & Division Superintendent/District Supervisor as cochairmen
 Sanggunian Education Committee chairman
 Treasurer
 SK Federation President
 President of PTA Federation
 Public Schools Non-Academic personnel representative

C. LOCAL HEALTH BOARD (LHB)

Propose to Sanggunian annual budgetary allocations for operation & maintenance of health facilities &
services
within locality
Advise Sanggunian on health matters
Create committees to advise local health agencies on personnel selection & promotion, bids & awards,
grievances & complaints, personnel discipline, budget review, operations review & other similar
functions

 Local Health Board Composition

 LCE as chairman
 Local Health Officer as vice chairman
 Sanggunian Health Committee chairman
 PO or NGO representative
 DOH representative

D. LOCAL DEVELOPMENT COUNCIL (LDC)

Formulate long-term, medium-term & annual socio-economic development plans & policies
Formulate medium-term & annual public investment plan
Formulate local investment incentives to promote inflow & direction of private investment capital
Coordinate, monitor & evaluate implementation of development programs & projects

 Local Development Council Composition

Barangay:
 Punong Barangay as chairman
 Members of the Sangguniang Barangay
 NGO representatives who shall constitute ¼ of the members of the fully
 organized council
 Representative of the congressman
City or Municipality:
 LCE as chairman
 All PBs of the city or municipality
 Chairman of the Sanggunian Committee on
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  Appropriations
 Congressman or his representative
 NGO representatives who shall constitute ¼ of the members of the fully organized council
Province:
 Governor as chairman
 All mayors of component cities & municipalities
 Chairman of the Sanggunian Committee on
 Appropriations
 Congressman or his representative
 NGO representatives who shall constitute ¼ of the members of the fully organized council

 Relation of LDC to Sanggunian and RDC

o LDC proposals shall be submitted to
o Sanggunian for appropriate action; approved local development plans may be integrated with
development plans of next higher level LDC
o Approved development plans of Provinces, HUCs & Independent Component Cities shall be
submitted to RDC for integration to regional development plan

E. LOCAL PEACE AND ORDER COUNCIL(LPOC)

The composition and functions of the provincial, city & municipal peace & order councils shall be governed
by the provisions of EO 309, s. 1988, as amended.

 Local Peace and Order Council Functions:

 Formulate plans & recommend measures to improve/enhance peace & order & public safety
 Monitor implementation of peace & order programs & projects & operation of Civilian Volunteer
Self-Defense Organizations & other counter-insurgency programs/activities
 Make periodic assessments or peace & order situation & submit recommendations to NPOC
 Receive complaints against government personnel, civilian or military & endorse to concerned
agency

F. PEOPLE’s LAW ENFORCEMENT BOARD (PLEB)

Receive, take cognizance of or refer complaints against officer members of the PNP to proper disciplining
authority or adjudicatory authority within 3 days from filing of complaint
3 members chosen by LPOC from respected members of community with one woman & another a member
of the bar

References:
Brillantes, Alex Jr. B. 1998. Decentralized Democratic Governance Under the Local Government Code: A
Government Perspective, Manila: Philippine Journal of Public Administration.

Tapales, Proserpina D. The Nature and State of Local Government. Public Administration in the Philippines: A
Reader. ed by Bautista, et al. NCPAG-UP Diliman. 2003

“It is better for a city to be

governed by a good man than by good
laws.” – Aristotle

ACTIVITY #3: ESSAY, EASY PEASY!

Instruction: Answer the following questions. (5 points each)

1. What are the similarities of the three inherit powers of the state? (Police power, eminent domain
and generate tax)

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 _____________________________________________________________________________________
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2. What is the distinction of police power, eminent domain and generate tax in terms of the following?
POINT OF POLICE EMINENT GENERATE
COMPARISON POWER DOMAIN TAX (Taxation)

Authority

Purpose

Scope

Effect

Amount of Exaction

Benefits of Received

Non-impairment of
Contracts

ACTIVITY #4: ESSAY, EASY PEASY!

Instruction: Answer the following question. (5 points each)

1. Can the provincial Legislative Board (Sangguniang Panlalawigan) create a City or Municipality?
And why? (State your basis)
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
____________

2. Can a barangay be merged or abolished by the city/ municipality council (Sangguniang

Panlungsod/Pambayan)? (State your basis)
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
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____________

3. In the exercise of the power of eminent domain, what value shall be paid to the owner?
__________________________________________________________________________________
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 __________________________________________________________________________________
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____________

SCORE RUBRICS (for 5 points)

COMPONENT
5 4 3 2 1
Focus Takes a clear Takes a clear Takes a clear Takes a position Takes a position
position support position and position and and provides but essay is
consistency with supports it with support it with uneven support; underdeveloped.
well-chosen relevant some relevant may lack
reasons and/or reasons and/or reasons and/or development in
examples: may examples examples; there parts or be
use persuasive through much of is some repetitive or
strategy to the essay. development of essay is no
convey an the essay. more than a
argument. well-written
beginning.
Organization Is focused well Is well Is generally d, Is organized in Is disorganized
organized, with organized, but but has few or parts of the or unfocused in
effective use of may lack some no transitions essay; other much of the
transitions. transitions. among sections. parts are essay or is clear
disjointed but too brief.
and/or lack
transitions.
Sentence, Consistency Exhibit some Most sentences Sentences Sentences lack
Fluency and exhibits variety variety in are well structure be formal structure;
Word Choice in sentence sentence constructed but simple and word choice
structure and structure and have similar unvaried; word may be often be
word choice uses good word structure; word choice is mostly inaccurate.
choice: choice lacks accurate.
occasionally, variety or flair.
words may be
used
inaccurately.
Conventions Errors in Errors in More frequent Errors in Errors in
grammar, grammar, errors in grammar, grammar,
spelling and spelling and grammar, spelling and spelling and
punctuations punctuation do spelling and punctuation punctuation
are few and do not interfere punctuation but sometimes interfere with
not interfere with they do not interfere with understanding in
with understanding. interfere with understanding. much of the
understanding. understanding. essay.

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 LESSO
N
LOCAL TAXATION AND FISCAL
2 MATTERS
9
HOURS

 This module introduces you to the fundamental principles of tax in the national government and
government units, define the terminologies in taxation, limitation of in taxing power in the local government unit,
discuss about taxes, fees and charges, identity the types of collection taxes in the local government units and
identify the different types of collection taxes.

At the end of this lesson, you are expected to:

j. discuss the fundamentals principles of tax and in the LGU;
k. define taxation terminologies being used;
l. identify the limitation in taxing power in LGU;
m. discuss about taxes, fees and charges in the LGU;
n. identify the different types of collection taxes;
o. discuss the remedies for collection of taxes;
p. discuss all revision of assessment and property classification.

ACTIVITY #1: “IDENTIFICATION”

Instruction: Identify the following questions. (5 points each)

1. What are the different sources of funds for the National Government?

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 __________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
______

ACTIVITY #2: “IDENTIFICATION”

Instruction: Identify the following questions.

1. Who are the major recipients in the government budget?

 _______________________________________________________________________________
_______________________________________________________________________________
______________________________________________________________________________
 _______________________________________________________________________________
_______________________________________________________________________________
______________________________________________________________________________
 _______________________________________________________________________________
_______________________________________________________________________________
______________________________________________________________________________

I. TAXING POWERS, SCOPE & LIMITATIONS OF NATIONAL GOVERNMENT AGENCIES

A. WHAT IS NATIONAL GOVERNMENT?
 Under the Constitution, the government is divided into executive, legislative and judicial departments. The
separation of powers is based on the theory of checks and balances.
Executive Branch (law enforcing body)
- is under the headship of the president. The president obtains the position through national voting
system; the tenure is a six-year period.
Legislative Branch (lawmaking body)
- is characterized by a bicameral congress comprising the Senate and the House of
Representatives. Occupying the upper house is the Senate whose 24 members are voted in a
national election with a 6-year term.
Judicial Branch (law interpreting body)
- demonstrates its authority to the Supreme Court of the Philippines as the highest judicial body and
presided by a Chief Justice with 14 Associate Justices; all are appointed by the president under the
advice of the Judicial and Bar Council.

B. WHAT ARE THE MAJOR SOURCES OF FUNDS TO FINANCE THE NATIONAL GOVERNMENT?
1. revenues from both tax and non-tax sources;
2. borrowings from both domestic and foreign sources; and,
3. withdrawals from available cash balances

C. BANGKO SENTRAL NG PILIPINAS

 is a banking institution granted the exclusive privilege to lend a government its currency. Like a normal
commercial bank, the bank charges interest on the loans made to borrowers, primarily the government,
typically as a ‘lender of last resort’.

D. TAXATION
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 is a power by which an Independent State, through its law-making body, raises and accumulates revenue
from its inhabitants to pay the necessary expenses of the government
 As a power, it refers to the inherent power of a state, co-extensive with sovereignty to demand
contributions for public purposes to support the government.

E. TAX LAW IN THE PHILIPPINES COVERS NATIONAL AND LOCAL TAXES

National Taxes
Refer to national internal revenue taxes imposed and collected by the national government through
the Bureau of Internal Revenue (BIR) and local taxes refer to those imposed and collected by the
local government.

National Law-1987 Constitution

The 1987 Philippine Constitution sets limitations on the exercise of the power to tax.
The rule of taxation shall be uniform and equitable. The Congress shall evolve a progressive
system of taxation.

Kinds of National Internal Revenue Taxes

Income Tax
 is a tax on a person’s income, profits and the like, realized in a one taxable year
Estate and Donor Taxes
Estate Tax- is the tax on the right of the deceased person to transmit his lawful heirs or
beneficiaries
Inheritance Tax- is a tax on the right of the heirs of beneficiaries to receive the estate of the
deceased person
Donor Tax – donation is an act of liberality whereby a person disposes gratuitously of a thing
or right in favor of another who accepts it

Value Added Tax (VAT)

 is a percentage tax imposed on every sale, barter, exchange, or lease of goods or properties
(real or personal) or sale of services in the course of trade or business, and on every
importation of goods, whether or not in the course of trade or business, based on the gross
selling price or value, or the gross receipts, payable by the seller, transferor, lessor, or
importer.

Other Percentage Taxes

 are taxes based on a certain percentage of the gross selling price or gross value in money of
goods sold, bartered, exchanged, or imported, or gross receipts or earnings derived by a
person engaged in the sale of services

PERSONS OR BUSINESS SUBJECT TO AND RATES OF OTHER PERCENTAGE

TAXES
1. Small business enterprises, i.e., those whose annual gross sales and/or receipts do
not exceed Php 550,000, - 3% of gross quarterly sales or receipts.
2. Domestic carriers by land, air or water and transport passengers for hire, and keepers
of garages-3% of gross receipts.
3. International carriers, air or shipping, doing business in the Philippines – 3% of their
gross quarterly receipts
4. Franchise holders or grantees in respect to franchises on radio and/or television
broadcasting companies whose annual gross receipts of the preceding year do not
exceed Php 10 million – 3% of gross receipts, and on electric, gas, and water utilities-
2%
5. Senders of overseas messages-10% of the amount paid for the service.
6. Life insurance companies – 5% of gross premium collected.
7. Proprietors, lessees or operators of amusement places – 15%, 18%, or 30% of gross
receipts
8. Sale of shares of stock. -1/2 of 1% (0.05), 4%, 2%, and 1% of gross selling price or
gross value of the shares.

 Overseas Communication Tax

The tax is imposed upon every overseas dispatch message or conversation transmitted
from the Philippines by telephone, telewriter exchange, wireless and other communication
services equivalent to 10% on the amount paid for such services payable by the person
paying for the services rendered.

 Tax on Receipt of Life Insurance Companies

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 The tax is imposed on persons, companies or corporations engaged in insurance business
in the Philippines equivalent to 2% of the total premiums collected. Certain premiums
mentioned by law are not included in the taxable receipts.
The law exempts from the tax purely cooperative companies or associations defined as
those as are conducted by the members thereof with the money collected from among
themselves and solely for their own protection and not for profit. Agents of non-resident
foreign insurance companies shall pay a tax equal to 10% of the total premiums received.

 AMUSEMENT TAXES
1. Taxes on gross receipts.
Taxes equivalent to 18% of the gross receipts of cockpits, cabarets, and day or night
clubs; 10% in the case of boxing exhibitions; 15% in the case of professional
basketball games; and 30% in the case of race tracks and jai-alai, irrespective of
whether or not any amount is charged or pay for admission, collected from every
proprietor, lessee, or operator of such establishment.
2. Taxes on winnings.
Taxes imposed on every person who wins in a horse race or jai-alai equivalent to 10%
of his winnings or “dividends”. The same tax is collected from the owners of winning
race horses. The amusement tax on admission to places of amusement is now levied
and collected by the provinces and cities to the exclusion of national government.

Excise Taxes on Certain Goods

Excise Tax
 as used in the Tax Code, are taxes imposed on certain specified goods manufactured or
produced in the Philippines for domestic sale or consumption or for any other disposition
and on goods imported into the Philippines.

Nature of Excise Tax

 Excise Taxes subject directly the produce or goods to tax. They are, therefore, taxes on
property.

GOODS SUBJECT TO EXCISE TAXES

1. In General-Excise Taxes apply:
a. To goods manufactured or produced in the Phils. For domestic use or consumption or
for any other disposition and
b. To goods imported from foreign countries
2. In Particular-The Tax Code enumerates the goods subject to excise taxes, namely:
a. Alcohol products
b. Tobacco products
c. Petroleum products
d. Miscellaneous goods
e. Mineral products

Documentary Stamp Taxes

 Is a tax on documents, and papers evidencing the acceptance, assignment, sale or transfer of
an obligation, right or property incident thereto.
 The purpose of the law in imposing stamp taxes is to raise revenue, and not to invalidate the
contract

Tax Exemptions
 are limited to those granted by law. However, no law granting any tax exemption shall be
passed without the concurrence of a majority of all the members of the Congress.

The Constitution Expressly Grants Tax Exemption on Certain Entities/ Institutions

as:
1. charitable institutions, churches, parsonages or convents appurtenant thereto,
mosques, and nonprofit cemeteries and all lands, buildings and improvements
actually, directly and exclusively used for religious, charitable or educational purposes
2. non-stock non-profit educational institutions used actually, directly and exclusively for
educational purposes.

F. NATURE OF TAXATION POWER

1. Inherent Power
2. Legislative Function
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 3. Public Purposes
4. Operating within Territorial Jurisdiction
5. The strongest among the inherent powers of the government.
6. Taxation is the subject to limitation
Inherent limitations
Constitutional Limitations.

G. SCOPE OF TAXATION OF NGA’s

1. Plenary or Complete- Taxation has unlimited area of application and only restricted by the inherent
and constitutional limitation.
2. Comprehensive- It has a wide scope of coverage. It covers all persons, properties, rights and
transactions subject to taxation, unless expressly exempted by laws within the sovereign.
3. Supreme- it has the highest degree of application and it considered as the strongest among the
inherent power of the state.
o Taxation reaches every trade or occupation, every object of industry, and every species of
possession. It imposes a burden which, in case of failure to discharge, may be followed by
seizure or confiscation of property.

H. LIMITATIONS OF TAXATION OF NGA’s

1. Inherit Powers
 Levy for public purpose;
 Non-delegation of legislative power to tax.
 Exemption of government entities.
 Tax power is limited to territorial jurisdiction of the State;
 Taxation is subject to international comity;
2. Constitutional Limitations
 Due process of law (Art. III, Section I);
 Equal protection of law (Art. III, Section I);
 Rule of uniformity and equity (Art. VI, Sec. 28. par.1);
 President’s power to veto separate items in revenue or tariff bills (Art. VI, Sec. 27 (2));
 Exemption from property taxation of religious, charitable or educational entities, nonprofit
cemeteries, churches and convents appurtenant thereto (Art. VI, Sec. 28, par. 3);
 Exemption from property taxation of religious, charitable or educational entities, nonprofit
cemeteries, churches and convents appurtenant thereto (Art. VI, Sec. 28, par. 3);
 No public money shall be appropriated for religious purposes (Art. VI, Sec. 29);
 Majority of all the members of the Congress granting tax exemption (Art. VI, Sec. 28, par. 4);
 No public money shall be appropriated for religious purposes (Art. VI, Sec. 29);
 Majority of all the members of the Congress granting tax exemption (Art. VI, Sec. 28, par. 4);
 No imprisonment for nonpayment of poll tax (Art. III, Sec. 20); and
 Tax collection shall generally be treated as general funds of the government (Art. VI, Sec. 29, par.
3).

II. TAXING POWERS, SCOPE & LIMITATIONS OF LOCAL GOVERNMENT UNITS (RA No. 7160 – The
Local Government Code of 1991)
Section 18. Power to Generate and Apply Resources
 Local government units shall have the power and authority to establish an organization that shall
be responsible for the efficient and effective implementation of their development plans, program,
objectives and priority.
 to create their own sources of revenues and to levy taxes, fees, and charges which shall accrue
exclusively for their use and disposition and which shall be retained by them; to have a just share
in national taxes.
Section 128. Scope
 The provision herein shall govern the exercise by provinces, cities, municipalities and barangays of
their taxing and other revenue raising powers.
Section 132. Local Taxing Authority.
 The power to impose a tax, fee, or charge or to generate revenue under this Code shall be
exercised by the Sanggunian of the local government unit concerned through an appropriate
ordinance.

A. TAXING POWER OF LGU’s

1. Fees and charges for services rendered
2. Charges for operation of public utilities owned, operated and maintained by them within their
jurisdiction
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3. Toll fees and charges for use of public road pier, wharf, waterways, bridge, ferry or telecommunications
system funded and constructed by them.

DISTRIBUTION OF THE POWER TO IMPOSE TAX BY PROVINCIAL, CITY, MUNICIPAL AND

BARANGAY GOVERNMENT:

TAX ASSIGNMENT BY LOCAL GOVERNMENT IN THE PHILIPPINES

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 SUMMARY OF PROVINCIAL TAXES WITH SHARED PROCEEDS

SUMMARY OF CITY TAXES WITH SHARED PROCEEDS

B. LIMITATIONS IN THE TAXING POWERS OF LOCAL GOVERNMENT UNITS

1. Constitutional Limitations
2. Inherit Limitations
3. Statutory Limitations - LGUs’ taxing and revenue raising powers are limited. They can only impose
taxes, fees and charges as the law may allow.

C. COMMON LIMITATIONS ON THE TAXING POWERS OF LGU’s ( RA 7160 Sec. 133)

a. Income tax, except when levied on banks and other financial institutions;
b. Documentary stamp tax;
c. Taxes on estates, inheritance, gifts, legacies and other acquisitions mortis causa, except as otherwise
provided herein;
d. Customs duties, registration fees of vessel and wharf age on wharves, tonnage dues, and all other
kinds of customs fees, charges and dues except wharf age on wharves constructed and maintained by
the local government unit concerned;
e. Taxes, fees and charges and other impositions upon goods carried into or out of, or passing through,
the territorial jurisdictions of local government units in the guise of charges for wharf age, tolls for
bridges or otherwise, or other taxes, fees or charges in any form whatsoever upon such goods or
merchandise;
f. Taxes, fees or charges on agricultural and aquatic products when sold by marginal farmers or
fishermen;

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 g. Taxes on business enterprises certified to by the Board of Investments as pioneer or non-pioneer for a
period of six (6) and four (4) years, respectively from the date of registration;
h. Excise taxes on articles enumerated under the National Internal Revenue Code, as amended, and
taxes, fees or charges on petroleum products;
i. Percentage or value-added tax (VAT) on sales, barters or exchanges or similar transactions on goods
or services except as otherwise provided herein;
j. Taxes on the gross receipts of transportation contractors and persons engaged in the transportation of
passengers or freight by hire and common carriers by air, land or water, except as provided in this
Code;
k. Taxes on premiums paid by way of reinsurance or retrocession;
l. Taxes, fees or charges for the registration of moto vehicles and for the issuance of all kinds of licenses
or permits for the driving thereof, except tricycles;
m. Taxes, fees, or other charges on Philippine products actually exported, except as otherwise provided
herein;
n. Taxes, fees or charges of any kind on the National Government, its agencies and instrumentalities, and
local government units.

III. PROCEDURES AND SHARING SYSTEM OF INTERNAL REVENUE ALLOTMENTS

A. WHAT IS REVENUE ALLOTMENT (IRA)?
 is the annual share of local governments out of the proceeds from national revenue taxes.
 It is estimated at forty percent (40%) of the actual collections of national internal revenue taxes during
the third fiscal year preceding the current year (Section 284 of RA No. 7160)

B. WHAT CONSTITUTE THE NATIONAL INTERNAL REVENUE TAXES BEING USED AS BASES FOR
THE COMPUTATION OF IRA
1. Income Tax
2. Estate Tax and Donor’s Tax
3. Value Added Tax
4. Other Percentages Taxes
5. Taxes imposes by special laws, such as travel tax

SEC. 285 Allocation to LGU

The distribution of shares of individual provinces, cities and municipality shall be determined on the
basis of the following formula:

 THE SHARE OF EACH BARANGAY IS COMPUTED AS FOLLOW:

Php80,000.00 for each barangay with a population of not less than 100 inhabitants.
the balance is allocated as follows:

C. PROCESS FLOW: RELEASE OF IRA

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 DBM-ROCS
1. Prepares the SARO, NCA and Schedule of Releases
2. Prepares funding checks

DBM REGIONAL OFFICE GOVERNMENT SERVICING BANK

Prepares Notice of Funding Checks Issued Receives Funding Checks for credit to the
(NCFI’s) for transmission to barangays account of the barangays

PUNONG BARANGAY/ BRGY. TREASURER

Withdraws cash from bank

D. SEC 286AUTOMATIC RELEASE OF SHARES

The share of each LGU shall be released, without need of any further action, directly to the provincial,
city, municipal or barangay treasurer, as the case may be, on a quarterly basis within five days after
the end of each quarter, and which shall not be subject to any lien or holdback that may be imposed by
the National Government for whatever purpose.

E. SEC 287 LOCAL DEVELOPMENT PROJECTS

Each local government unit shall appropriate in its annual budget no less than twenty percent (20%) of
its annual internal revenue allotment for development funds. Copies of the development plans of local
government units shall be furnished by the DILG.

IV. RESPONSIBILITIES AND ACCOUNTABILITIES AGENCIES INVOLVED IN FISCAL ADMINISTRATION:

NGA & LGU’s
 Local government units, by virtue of the 1987 Constitution and the Local Government Code of 1991,
otherwise known as Republic Act 7160 have been given the power to raise certain taxes.
 Each local government unit (LGU) has the power to create its own sources of revenue and to levy taxes,
fees and charges
 The grant of power to create sources of revenue is consistent with the basic policy of local autonomy The
taxes, fees and charges shall accrue exclusively to the LGU.

 SEC. 130. Fundamental Principles – the following fundamental principles shall govern the exercise of the
taxing and other revenue-raising powers of local government units:
a. Taxation shall be uniform in each local government unit;
b. Taxes, fees, charges and other impositions shall:
1. Be equitable and based as far as practicable on the taxpayer’s ability to pay;
2. Be levied and collected only for public purposes;
3. Not be unjust, excessive, oppressive, or confiscatory;
4. Not be contrary to law, public policy, national economic policy, or in restraint
c. The collection of local taxes, fees, charges and other impositions shall in no case be let to any private
person;
d. The revenue collected pursuant to the provisions of this Code shall inure solely to the benefit of, and be
subjected to disposition by, the local government until levying the tax, fee, charge or other imposition
unless otherwise specifically provided herein; and
e. Each local government unit shall, as far as practicable, evolve a progressive system of taxation.

THE CONDUCT AND MANAGEMENT OF FINANCIAL AFFAIRS, TRANSACTIONS, AND OPERATIONS

OF PROVINCES, CITIES, MUNICIPALITIES, AND BARANGAYS.

 SEC. 305. Fundamental Principles. – The financial affairs, transactions, and operations of local
government units shall be governed by the following fundamental principles:
a. No money shall be paid out of the local treasury except in pursuance of an appropriations ordinance or
law;
b. Local government funds and monies shall be spent solely for public purposes;
c. Local revenue is generated only from sources expressly authorized by law or ordinance, and collection
thereof shall at all times be acknowledged properly;
d. All monies officially received by a local government officer in any capacity or on any occasion shall be
accounted for as local funds, unless otherwise provided by law;
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 e. Trust funds in the local treasury shall not be paid out except in fulfillment of the purpose for which the
trust was created or the funds received;
f. Every officer of the local government unit whose duties permit or require the possession or custody of
local funds shall be properly bonded, and such officer shall be accountable and responsible for said
funds and for the safekeeping thereof in conformity with the provisions of law;
g. Local governments shall formulate sound financial plans, and the local budgets shall be based on
functions, activities, and projects, in terms of expected results; development plans, goals, and
strategies in order to optimize the utilization of resources and to avoid duplication in the use of fiscal
and physical resources;
h. Local budgets shall operationalize approved local development plans;
i. Local government units shall ensure that their respective budgets incorporate the requirements of their
component units and provide for equitable allocation of resources among these component units;
j. National planning shall be based on local planning to ensure that the needs and aspirations of the
people as articulated by the local government units in their respective local development plans are
considered in the formulation of budgets of national line agencies or offices;
k. Fiscal responsibility shall be shared by all those exercising authority over the financial affairs,
transactions, and operations of the local government units; and
l. The local government unit shall endeavor to have a balanced budget in each fiscal year of operation.

V. GOVERNMENT ENTERPRISES
A. GOCC’s Government-Owned and Controlled Corporation
Presidential Decree No. 2029
A stock or a non-stock corporation whether performing governmental or proprietary functions,
which is directly chartered by a special law or, if organized under the general corporation law, is
owned or controlled by the government directly or indirectly through a parent corporation or a
subsidiary corporation.
Presently 158 GOCC
84 Chartered
74 registered under the SEC
Owned and controlled by the state supposed to address market failures and correct imperfections.
Executive Order No. 64 of 1993
A corporation created by special law or incorporated and organized under the Corporation Code
and in which government, directly or indirectly, has ownership of the majority of the capital stock.
WHY GOCC’s ARE CREATED
Grounded on the idea that market failures do exist and government needs to intervene to protect
public interest.
The use of corporate vehicle recognized as efficient means to mobilized government assets.

History of GOCC’s in the Philippines

Mid 50’s and early 60’s GOCC disastrous financial performance.
OCC in 1965
During president Marcos first 10 years, GOCC reach up to 120 in 1975
303 GOCC in 1984
And in 2010 there is 604 GOCC’s in which 446 are operational water districts.
There is no central agency tasked to monitor and supervise the activities of the government
corporate sector or the GOCC’s

Presidential Proclamation No. 50

Creation of GCMC (Government Corporate Monitoring Committee.)
“Executive Order No. 936“
Authorized the privatization of GOCC’s (that resulted to only 158 GOCC’s today.)

Conditions in where GOCC operates

In cases where private sector is unwilling or unable to provide goods and services vital to the
society such construction of large infrastructure i.e., roads & ports;
When there is a need to create bias in favor of disadvantage sector of the society in a free market
such as distribution of staples and sugar;
To spur the development of strategic activities with wide ranging economic impact; and
When there exist natural monopolies which government want to control to protect the consuming
public.

Groups of GOCC
Cluster A – Financial Institutions
Cluster B - Public Utilities, Industrial, area development, agricultural, trading, promotional
Cluster C – Social, Cultural and Scientific
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 How do GOCC’s performance impact the government?
Section 3 of R.A. 7656 require all GOCC to remit 50% of annual net earnings in cash, stock or
property dividends to national government. (35.7 billion collected from GOCC in 2009 or 25.3% of
total non-tax revenue)
GOCC’s constitutes expenditures, they deemed to be entitled to financial support in form of
subsidies, equity infusion & lending (23.8 billion of financial aid or 1.7% in government budget in
2009.)

GOCC Governance Act of 2011 (RA No. 10149)

Consolidation of Senate Bill no. 2640 & House Bill No. 4067
Central advisory, monitoring and oversight body with authority to formulate, implement and
coordinate policies concerning GOCC’s and related corporation.

Disclosure & Audit Requirement

 “R.A. 10149 require full disclosure of all GOCC through a website and grant unrestricted public
access”
 Latest annual audited financial report within 30 days from receipt
 Audited financial statements in immediate 5 years
 Quarterly, annual report & trial balance
 Current corporate operating budget

Compete Compensation Package of all Board Members & Officers

 Travel
 Representation
 Transportation and any form of allowances or expenses.
 Local & foreign borrowings.
 Performance scorecards & strategy maps
 Government subsidiary & net lending
 All borrowing guaranteed by the government
 All information GCG requires

Exempted of the Coverage of RA 10149

Bangko Sentral ng Pilipinas
State Universities & Colleges Cooperatives
Local water districts
Economic zone authorities
Research institution

 Directors/Trustees/Employees
 Compensation and Position classification system for
 GOCC officers & employees
 Subject to Phil president approval
 Additional incentives
 No incentives shall be granted unless GOCC has fully paid taxes for which its liable
 Position Titles and Salary Grade

 PUBLIC ECONOMIC ENTERPRISES

 A business-like entity, wholly or partially owned by local government that sells a product or service
to meet a perceived specific public demand.

COMMON PUBLIC ECONOMIC ENTERPRISES:

1. Public markets
2. Slaughterhouses
3. Bus terminals
4. Waterworks
5. Cemeteries

 PURPOSEFUL PEE
 is the one that contributes to the sustainable development and quality service delivery goals of the local
government unit (LGU) and the nation

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  HOW DO PURPOSEFUL PEE’s CONTRIBUTE TO POVERTY REDUCTION?
1. Require less subsidy from government and generate profit.
2. Equitable delivery of products and services will increase the access of marginalized groups to local
services.
3. Quality services such as utilities, markets and transportation will attract potential investors to the LGUs.

VI. ROLE OF MANAGEMENT IN PROMOTING GENDER EQAULITY

A. Key provision of the Recommendation on institutional frameworks:
1.) Establish an institutional framework to ensure the effective implementation, co-ordination and
sustainability of the gender equality and mainstreaming strategy, by: establishing clear roles,
responsibilities, mandates and lines of accountability of key governmental and oversight bodies in
implementing gender equality and mainstreaming initiatives;
2.) Bolstering the capacities and resources of gender equality institutions to facilitate a consistent
response at appropriate levels of government and to develop, implement and monitor gender-sensitive
programmes and policies throughout the government, based on gender-disaggregated statistics and
indicators. Effectiveness of gender equality institutions can also be strengthened by placing them at the
highest possible level in the government:
3.) Ensuring the capacity and resources of public institutions to integrate gender equality perspectives in
their activities, for example, by identifying gender equality focal points across governmental bodies, by
investing resources in training and promoting collaborative approaches with knowledge centers to produce
gender-sensitive knowledge, leadership and communication, by ensuring the collection of gender and
gender-disaggregated statistics in their areas of responsibility and by providing clear guidelines, tools,
communication and expectations to public institutions in this area (see also recommendations II.2 and
III.2); and;
4.) Strengthening vertical and horizontal co-ordination mechanisms for policy coherence across
governmental bodies and levels of government that involve relevant non-governmental stakeholders to
ensure synergies and effective implementation of gender equality initiatives.

B. PRIORITY CHECKLIST FOR INSTITUTIONAL MECHANISM FOR GENDER EQAULITY AND

MAINSTREAMING
Roles and responsibilities to implement gender equality and mainstreaming are clearly assigned
across the government.
Government has an institution for gender equality with adequate level of responsibility and position
within the governmental structure.
All government institutions are equipped and responsible for integrating gender equality in their
policy making processes and programmes.
Gender equality initiatives are effectively coordinated across institutions at different levels of
government.

C. WHAT ARE THE KEY ACTIONS TO CONSIDER?

Locate central gender equality institution within the highest possible level of government (e.g., Cabinet
level) to ensure it has visibility and authority to coordinate and monitor government-wide gender
equality strategic plan;
Establish clear mandate, resources and capacity within central gender equality institution to deliver as
expected;
Assess whether available resources (e.g., time, staff, budget, skill sets, equipment, training, etc.) are
adequate to effectively execute its mandate, strategic goals and work plans;
Allocate and systematically review resources to meet the strategic goals and work plans of gender
equality institution;
Ensure that central gender equality institutions are staffed with expertise in policy, analysis, advocacy,
communication and monitoring to implement their mandates.

D. WHAT ARE THE PITFALLS TO AVOID?

Central gender institutions do not have the leverage necessary to co-ordinate a whole-of-government
approach across policy fields regardless of their institutional designs;
Central gender equality institutions have limited capacities, inadequate or inexistent budgets and/or
unclear responsibilities;
Central gender equality institutions lack expertise in policy development, analysis, advocacy,
communication and/or monitoring to fully implement their mandates;
Central gender equality institutions are unable to effectively ensure gender mainstreaming at the
subnational level.

Reference:
https://www2.slideshare.net/normina/taxing-powers-scope-and-limitations-of-nga-and-lgu
https://www.bridge.ids.ac.uk/reports/Governance_OR_final.pdf

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 ACTIVITY #3: NAME IT!
Instruction: Answer the following questions. (5 points each)

1. List down 5 GOCCs in the Philippines.

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2. Name and define the different types of Collection Taxes.

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ACTIVITY #4: “ESSAY, EASY PEASY”

Instruction: Answer the following questions. (5 points each)

1. What are the government’s current efforts to improve tax collections?

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 2. Is the level of responsibility and position of the gender equality institution within the
governmental structure adequate for promoting gender equality supporting government-wide
gender equality policy?
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PSCORE RUBRICS (for 5 points)

COMPONENT
5 4 3 2 1
Focus Takes a clear Takes a clear Takes a clear Takes a position Takes a position
position support position and position and and provides but essay is
consistency with supports it with support it with uneven support; underdeveloped.
well-chosen relevant some relevant may lack
reasons and/for reasons and/or reasons and/or development in
examples: may examples examples; there parts or be
use persuasive through much of is some repetitive or
strategy to the essay. development of essay is no
convey an the essay. more than a
argument. well-written
beginning.
Organization Is focused well Is well Is generally d, Is organized in Is disorganized
organized, with organized, but but has few or parts of the or unfocused in
effective use of may lack some no transitions essay; other much of the
transitions. transitions. among sections. parts are essay or is clear
disjointed but too brief.
and/or lack
transitions.
Sentence, Consistency Exhibit some Most sentences Sentences Sentences lack
Fluency and exhibits variety variety in are well structure be formal structure;
Word Choice in sentence sentence constructed but simple and word choice
structure and structure and have similar unvaried; word may be often be
word choice uses good word structure; word choice is mostly inaccurate.
choice: choice lacks accurate.
occasionally, variety or flair.
words may be
used
inaccurately.
Conventions Errors in Errors in More frequent Errors in Errors in
grammar, grammar, errors in grammar, grammar,
spelling and spelling and grammar, spelling and spelling and
punctuations punctuation do spelling and punctuation punctuation
are few and do not interfere punctuation but sometimes interfere with
not interfere with they do not interfere with understanding in
with understanding. interfere with understanding. much of the
understanding. understanding. essay.

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