THE SENATE on Tuesday ratified the bicameral report of a measure calling for the automatic reclassification of local government units (LGUs) by their income levels.

At the Senate’s plenary session late Tuesday, Senator Joseph Victor G. Ejercito, who led the Senate contingent to the bicameral session on Aug. 23, said the legislators decided to classify LGUs into five income classes.

The current system has six classes of municipality.

The bicameral report reconciled Senate Bill 2165 and House Bill No. 7006, which is one of President Ferdinand R. Marcos, Jr.’s priority bills. The bicameral committee adopted the Senate version as the working draft during discussions.

“The reconciled bill also restored, as one of the uses of income classification, the compensation adjustment for personnel of LGUs pursuant to the Salary Standardization Law of 2019,” Mr. Ejercito said.

The Senate approved its bill on Aug. 8, while the House of Representatives approved its measure in March.

The reconciled version of the measure also adjusted income thresholds for provinces. Second-class provinces are those with yearly income of between P900 million and P1.5 billion. The equivalent range for third-class provinces is between P700 million and less than P900 million, fourth-class provinces between P500 million and less than P700 million; and fifth-class provinces less than P500 million.

“We have propounded that the three main objectives of the bill are to regularly and accurately update the income classification of LGUs based on their current financial capabilities; to provide predictable and transparent indicators in adjusting the income brackets; and to incentivize the LGUs’ efforts in terms of locally sourced income,” he said. — John Victor D. Ordoñez