Ben Madilynn
THE Provincial Local Government Unit (PLGU) of Davao Occidental announced on Thursday, January 9, 2025, that four towns have achieved first-class municipality status under Republic Act No. 11964, also known as the “Automatic Income Classification of Local Government Units Act.”
Malita and Jose Abad Santos have retained their first-class status, while Don Marcelino and Santa Maria have been upgraded from second and third-class municipalities, respectively, to first-class status.
This reclassification, effective January 1, 2025, follows Department Order No. 074, Series of 2024, issued by the Department of Finance (DOF).
Municipalities, cities, and provinces are classified into five categories based on their average yearly regular income over the previous three fiscal years. First-class municipalities are those with an income of P200 million or more. Second-class municipalities have an income between P160 million and P200 million, while third-class municipalities earn between P130 million and P160 million. Fourth-class municipalities have an income between P90 million and P130 million, and fifth-class municipalities earn below P90 million.
The DOF also reported a significant decrease in the number of fifth-class municipalities in the Davao Region, from nine last year to just one this year.
Previously classified under the fourth income category, Davao Occidental has now been upgraded to second-class status.
Currently, Davao de Oro, Davao del Norte, Davao Oriental, and Davao del Sur are the only provinces in the region to retain their first-class status.
In 2023, President Ferdinand “Bongbong” Marcos Jr. signed RA No. 11964 into law, which institutionalizes the automatic income classification of LGUs. The law aims to promote local autonomy and support the full economic potential of LGUs.
The Department of Finance (DOF), in collaboration with the Department of Budget and Management (DBM) and consultations with LGU Leagues, is tasked with drafting the law’s implementing rules and regulations (IRR) within three months of its enactment. DEF
