A Reconnaissance of Philippine Cities (Part I: Formation and Characteristics of a City)

photo by Will Qua

 Introduction

Textbooks on local governments are usually arranged in the same order as the provisions on Local Government Code, making it hard for lay people and law students alike to understand the legal framework that governs Philippine cities.


This short legal treatise is an ambitious endeavor that aims to provide a clear view on that legal framework, the author recognizing that he himself experienced difficulty in understanding even the simplest textbooks on local governments.

However, his interest and curiosity on local development and his incessant observations on the cities he himself visited gave him a good perspective on the very confusing, complex, but intricately-interesting ramifications of the legal framework that governs cities in the Philippines.

The author, most of his life, has been living in Legazpi, a city over the edge of Luzon Island facing the Pacific Ocean with the pulchritudinous Mayon Volcano on its background. The city's profile - a component city on the verge of conversion into a highly-urbanized city - created an interesting discussion among locals whether to maintain its current status or to go on with the HUC conversion. 

The Formation of a City

A city is a product of evolution. But before we discuss how it evolves through the years, the reader may well be acquainted first with the fact that a city, just like any local government, is a locality - a place with a number of people living close to each other.

So the evolution of a place into a city may have begun with a barangay or a cluster of barangays. These lowly barangays may experience a surge in population that it becomes necessary that they be separated from the rest to form a new municipality. 

The creation of a municipality may only be done by virtue of an act of Congress approved by the locals in a plebiscite conducted for the purpose. (Section 441 of the Local Government Code)

Not all municipalities remain as such. Some experience an economic boom; others may well experience a slow but steady one. But when a municipality reaches a certain level of economic prosperity, the Congress may convert it into a city, as long as the following requirements are met: (1) a locally generated annual income of  at least one hundred million pesos (P 100,000,000.00) based on 2000 constant prices for the last two consecutive years as certified by the Department of Finance; and (2) a contiguous territory of at least one hundred (100) square meters as certified by the Land Management Bureau or a population of at least 150,000 inhabitants as certified by the National Statistics Office. (Section 450 of the Local Government Code, as amended by R.A. 9009)

The conversion must, however, be approved by a majority of the votes cast in a plebiscite to be conducted by the COMELEC in the local government unit or units directly affected. (Section 449 of the Local Government Code)

May a cluster of barangays be converted directly into a city?

Yes. Section 450 of the LGC is categorical on this question. It provides that "a municipality or a cluster of barangays may be converted into a component city."

What is a chartered city?

The reader may have heard the term "chartered city" but what does it refer to? It is a city that has its own specific charter, in addition to the Local Government Code. All cities in the Philippines are chartered; their charters being the statutes enacted by Congress converting them into cities.


Characteristics of a City

Reading the requirements of conversion of a municipality into a city raises this question: why the conversion? There seems to be no pragmatic reason for the conversion; it appears to be just some ego-boosting motive - "hey, I live in a city, I am a cosmopolitan now."

Indeed, both a municipality and a component city are under the supervisory powers of the province they belong to. They are basically of the same political levels. However, there is one characteristic that distinguishes a city from a municipality, which is understood after a closer look at a basic principle of taxation, the Rule of Preemption.

Under the Rule of Preemption, local government units are not allowed to levy taxes on fields taxed by other types of local government units. Hence, a province may not impose taxes on fields taxed by municipalities and the latter cannot impose taxes on fields taxed by the former. A city has a special privilege - it may impose taxes on all the fields both the provinces and municipalities tax. (Section 151 of the Local Government Code)

Such immunity from the said rule allows cities to generate far more revenues than municipalities. And it doesn't end there. Under Section 232 of the Local Government Code,  municipalities are not allowed to levy real property taxes - cities, on the other hand, may do so. Moreover, while portions of the proceeds from real property taxes accrue to municipalities, only 40% of such proceeds accrue to the general fund of the municipality - as opposed to the 70% that accrue to the general fund of the city. (Section 271 of the Local Government Code)

Reason for more Sources of Revenues

 This special privilege given to cities is not a product of mere whim. Due to larger concentrations of population, businesses and industries, cities face issues more complex than municipalities do that require far greater amounts of revenues to support their operations.

Upcoming Parts

There are three kinds of cities - component, independent component and highly urbanized. These cities will be discussed in the next part of this article.