REPUBLIC ACT NO.

7160

AN ACT PROVIDING FOR A LOCAL GOVERNMENT CODE OF 1991

BOOK I

General Provisions

TITLE I

Basic Principles

CHAPTER I

The Code: Policy and Application

SECTION 1. Title. – This Act shall be known and cited as the “Local Government Code of 1991”.

SECTION 2. Declaration of Policy. – (a) It is hereby declared the policy of the State that the territorial and
political subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to
attain their fullest development as self-reliant communities and make them more effective partners in
the attainment of national goals. Toward this end, the State shall provide for a more responsive and
accountable local government structure instituted through a system of decentralization whereby local
government units shall be given more powers, authority, responsibilities, and resources. The process of
decentralization shall proceed from the National Government to the local government units.

(b) It is also the policy of the State to ensure the accountability of local government units through the
institution of effective mechanisms of recall, initiative and referendum.

(c) It is likewise the policy of the State to require all national agencies and offices to conduct periodic
consultations with appropriate local government units, nongovernmental and people’s organizations,
and other concerned sectors of the community before any project or program is implemented in their
respective jurisdictions.

SECTION 3. Operative Principles of Decentralization. – The formulation and implementation of policies

(b) There shall be established in every local government unit an accountable, efficient, and dynamic
organizational structure and operating mechanism that will meet the priority needs and service
requirements of its communities;

(c) Subject to civil service law, rules and regulations, local officials and employees paid wholly or mainly
from local funds shall be appointed or removed, according to merit and fitness, by the appropriate
appointing authority;

(d) The vesting of duty, responsibility, and accountability in local government units shall be accompanied
with provision for reasonably adequate resources to discharge their powers and effectively carry out
their functions; hence, they shall have the power to create and broaden their own sources of revenue
and the right to a just share in national taxes and an equitable share in the proceeds of the utilization
and development of the national wealth within their respective areas;

(e) Provinces with respect to component cities and municipalities, and cities and municipalities with
respect to component barangays, shall ensure that the acts of their component units are within the
scope of their prescribed powers and functions;

(f) Local government units may group themselves, consolidate or coordinate their efforts, services, and
resources for purposes commonly beneficial to them;

(g) The capabilities of local government units, especially the municipalities and barangays, shall be
enhanced by providing them with opportunities to participate actively in the implementation of national
programs and projects;
(h) There shall be a continuing mechanism to enhance local autonomy not only by legislative enabling
acts but also by administrative and organizational reforms;

(i) Local government units shall share with the national government the responsibility in the
management and maintenance of ecological balance within their territorial jurisdiction, subject to the
provisions of this Code and national policies;

(j) Effective mechanisms for ensuring the accountability of local government units to their respective
constituents shall be strengthened in order to upgrade continually the quality of local leadership;
(k) The realization of local autonomy shall be facilitated through improved coordination of national
government policies and programs and extension of adequate technical and material assistance to less
developed and deserving local government units;

(l) The participation of the private sector in local governance, particularly in the delivery of basic
services, shall be encouraged to ensure the viability of local autonomy as an alternative strategy for
sustainable development; and

(m) The national government shall ensure that decentralization contributes to the continuing
improvement of the performance of local government units and the quality of community life.

SECTION 4. 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.

SECTION 5. Rules of Interpretation. – In the interpretation of the provisions of this Code, the following
rules shall apply:

(a) Any provision on a power of a local government unit shall be liberally interpreted in its favor, and in
case of doubt, any question thereon shall be resolved in favor of devolution of powers and of the lower
local government unit. Any fair and reasonable doubt as to the existence of the power shall be
interpreted in favor of the local government unit concerned;

(b) In case of doubt, any tax ordinance or revenue measure shall be construed strictly against the local
government unit enacting it, and liberally in favor of the taxpayer. Any tax exemption, incentive or relief
granted by any local government unit pursuant to the provisions of this Code shall be construed strictly
against the person claiming it.

(c) The general welfare provisions in this Code shall be liberally interpreted to give more powers to local
government units in accelerating economic development and upgrading the quality of life for the people
in the community;

(d) Rights and obligations existing on the date of effectivity of this Code and arising out of contracts or
any other source of prestation involving a local government unit shall be governed by the original terms
and conditions of said contracts or the law in force at the time such rights were vested; and

(e) In the resolution of controversies arising under this Code where no legal provision or jurisprudence
applies, resort may be had to the customs and traditions in the place where the controversies take
place.