ADMINISTRATIVE ORDER NO. 270 ADMINISTRATIVE ORDER NO. 270 - PRESCRIBING THE IMPLEMENTING RULES AND REGULATIONS OF THE LOCAL GOVERNMENT CODE OF 1991 WHEREAS, Sec. 25, Article II of the Constitution mandates that the State shall ensure the autonomy of local governments; WHEREAS, pursuant to this declared policy, Republic Act No. 7160, otherwise known as the Local Government Code of 1991, affirms, among others, 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; WHEREAS, Sec. 533 of the Local Government Code of 1991 requires the President to convene an Oversight Committee for the purpose of formulating and issuing the appropriate rules and regulations necessary for the efficient and effective implementation of all the provisions of the said Code; and WHEREAS, the Oversight Committee, after due deliberations and consultations with all the concerned sectors of society and consideration of the operative principles of local autonomy as provided in the Local Government Code of 1991, has completed the formulation of the implementing rules and regulations; NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, by virtue of the powers vested in me by law, do hereby order: Section 1. The attached "Rules and Regulations Implementing the Local Government Code of 1991," which shall form an integral part of this Administrative Order, are hereby approved and adopted for the efficient and effective implementation of the said Code. Sec. 2. This Administrative Order shall take effect upon its publication in a newspaper of general circulation. DONE in the City of Manila, this 21st day of February, in the year of Our Lord, nineteen hundred and ninety-two. RULES AND REGULATIONS IMPLEMENTING THE LOCAL GOVERNMENT CODE OF 1991 RULE I Policy and Application ARTICLE 1. Title. — These Rules shall be known and cited as the Rules and Regulations Implementing the Local Government Code of 1991. ARTICLE 2. Purpose. — These Rules are promulgated to prescribe the procedures and guidelines for the implementation of the Local Government Code of 1991 in order to facilitate compliance therewith and achieve the objectives thereof. ARTICLE 3. 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 (LGUs) shall be given more powers, authority, responsibilities, and resources. The process of decentralization shall proceed from the National Government to the LGUs. (b) It is also the policy of the State to ensure the accountability of LGUs through the institution of effective mechanisms of recall, initiative and referendum. (c) It is likewise the policy of the State to require all national government agencies and offices (NGOs) to conduct periodic consultations with appropriate LGUs, nongovernmental organizations (NGOs) and people's organizations, and other concerned sectors of the community before any project or program is implemented in their respective jurisdictions. (d) Every LGU shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, LGUs shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants. ARTICLE 4. Scope of Application. — These Rules shall apply to the following: (a) All provinces, cities, municipalities, barangays, and such other political subdivisions as may be created by law; (b) All LGUs in the Autonomous Region in Muslim Mindanao and other autonomous political units as may be created by law, until such time that they shall have enacted their own local government code; and (c) NGAs and other government instrumentalities including government-owned and -controlled corporations (GOCCs) to the extent provided in the Code. ARTICLE 5. Rules of Interpretation. — In the interpretation of the provisions of the Code, the following rules shall apply: (a) The general welfare provisions, any provision on the powers of an LGU, and any question regarding the devolution of powers shall be liberally interpreted and resolved in their favor of the LGU. (b) Any fair and reasonable doubt on the powers of LGUs shall be liberally interpreted and resolved in their favor; and in cases involving lower and higher level LGUs, in favor of the lower level LGU. (c) Rights and obligations existing on the date of effectivity of the Code and arising out of contracts or any other source of prestation involving an LGU shall be governed by the original terms and conditions of said contracts or the law in force at the time such rights were vested. (d) In the resolution of controversies arising under the Code where no legal provision or jurisprudence applies, the customs and traditions in the place where the controversies take place may be resorted to. (e) In case of doubt, any tax ordinance or revenue measure shall be construed strictly against the LGU enacting it, and liberally in favor of the taxpayer. Any tax exemption, incentive, or relief granted by any LGU pursuant to the provisions of the Code shall be construed strictly against the person claiming it. RULE II Creation, Conversion, Division, Merger, Abolition, and Alteration of Boundaries of Local Government Units ARTICLE 6. Common Provisions. — (a) Authority to create LGUs — An LGU may be created, converted, divided, merged, abolished, or its boundaries substantially altered either by Act of Congress, in the case of a province, city, municipality, or any other political subdivision, or by ordinance 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 Rule. Notwithstanding the population requirement, the Congress may create barangays in indigenous cultural communities to enhance the delivery of basic services in said areas and in the municipalities within the Metropolitan Manila Area (MMA). (b) Creation or conversion — (1) The creation of an LGU or its conversion from one level to another shall be based on the following verifiable indicators of viability and projected capacity to provide services: (i) Income — which must be sufficient, based on acceptable standards, to provide for all essential government facilities and services and special functions commensurate to the size of its population, as expected of the LGU. The income shall be based on 1991 constant prices, as determined by the Department of Finance (DOF). (ii) Population — which shall be the total number of inhabitants within the territorial jurisdiction of the LGU. (iii) Land area — which must be contiguous, unless it comprises two (2) or more islands or is separated by an LGU independent of the others; properly identified by metes and bounds with technical descriptions; and sufficient to provide for such basic services and facilities to meet the requirements of its populace. (2) Compliance with the foregoing indicators shall be attested by: (i) The Secretary of Finance as to the income requirement in the case of provinces and cities, and the provincial treasurer in the case of municipalities; (ii) The Administrator of the National Statistics Office (NSO) as to the population requirement; and (iii) The Director of the Lands Management Bureau (LMB) of the Department of Environment and Natural Resources (DENR) as to the land area requirement. (c) Division or merger — Division or merger of existing LGUs shall comply with the same requirements for their creation. Such division or merger shall not reduce the income, population, or land area of the original LGU or LGUs to less than the prescribed minimum requirements and that their income classification shall not fall below their current income classification prior to the division or merger. (d) Abolition — An LGU may be abolished when its income, population, or land area has been irreversibly reduced during the immediately preceding three (3) consecutive years to less than the requirements for its creation, as certified by DOF, in the case of income; by NSO, in the case of population; and by LMB, in the case of land area. The law or ordinance abolishing an LGU shall specify the province, city, municipality, or barangay to which an LGU sought to be abolished will be merged with. (e) Updating of income classification — The income classification of LGUs shall be updated by DOF within six (6) months from the effectivity