PRESIDENT Ferdinand Marcos Jr. signed into law on Thursday, October 26, 2023, Republic Act 11964, institutionalizing the automatic income classification of local government units to provide a more responsive approach to the promotion of local autonomy and to enable LGUs to realize their full economic potential.
The new law mandates that the Secretary of Finance, in consultation with the National Economic and Development Authority and the concerned LGUs League, shall have the authority to adjust the income ranges based on the actual growth rate of the annual regular income from the last income reclassification and undertake regular income reclassification once every three years so that LGU income reclassification conforms with the prevailing economic conditions.