Preamble
WHEREAS, pursuant to Section 2 of Republic Act No. 4477, provinces and cities shall be classified by the Secretary of Finance every four fiscal years on the basis of the average annual income of the local units as certified by the Auditor General (now the Chairman, Commission on Audit) ; WHEREAS, the Secretary of Finance shall likewise classify all municipalities every four fiscal years pursuant to Section 4 of Republic Act No. 2368 and subclassify all first class municipalities under Section 2 of Republic Act No. 4358; WHEREAS, the minimum annual income of P1.5 million fixed under Republic Act No. 4477 for first class provinces and cities; and the minimum annual income of P2.5 million fixed under Republic Act No. 4358 for first class-1 municipalities, as well as the maximum and minimum ranges fixed for the other classes are no longer in proportion to the present income of the local government; WHEREAS, in view of new issuances and changes in fiscal policies, there has been a marked and significant increase in the collection of local revenues; and WHEREAS, the classification of provinces, cities and municipalities serves, among other purposes, as basis for fixing the maximum tax ceilings imposable by the local governments under the Local Tax Code, as amended by Presidential Decree No. 426; NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers in me vested by the Constitution, in order to provide a more equitable system of classifying provinces, cities and municipalities that will be commensurate with their respective revenue-raising capacities, hereby adopt and fix, as it is hereby adopted and fixed, the following income classifications of provinces, cities and municipalities: