President Marcos Pledges Major Reforms to Overhaul 35-Year-Old Philippine Local Government Code

President Marcos Jr. vows to reform the Local Government Code to boost fiscal autonomy, digitalize governance, and empower local units in the Philippines.

By: AXL Media

Published: Apr 7, 2026, 8:42 AM EDT

Source: Information for this report was sourced from INQUIRER.net

Modernizing the Framework of Local Governance

The Philippine executive branch is moving to restructure the foundational laws governing provincial and municipal administrations to better suit the demands of a modern economy. During an oath-taking ceremony for the Vice Mayors’ League of the Philippines on Monday, President Ferdinand Marcos Jr. announced a formal commitment to modifying Republic Act No. 7160, also known as the Local Government Code of 1991. The President argued that the current 35-year-old framework contains administrative and financial limitations that hinder the full devolution of basic services. By pursuing these amendments, the administration intends to clarify responsibilities and enhance the fiscal capacities of local leaders across the archipelago.

Addressing Systemic Financial Dependencies

A primary driver for the proposed legislative overhaul is the persistent reliance of local government units (LGUs) on national funding rather than independent revenue generation. Data from 2021 revealed that 64 percent of LGUs were dependent on the National Tax Allotment, with externally sourced revenues making up 71 percent of their total operating income. This fiscal imbalance often leaves local administrations vulnerable to national budget shifts and limits their ability to respond to unique community needs. President Marcos noted that the reform, developed in coordination with the Department of Economy, Planning, and Development, aims to unlock the self-reliant potential of these units to make them more competitive.

Closing the Good Governance Gap

The push for reform also stems from concerns over administrative performance and accountability standards. In 2023, only 29 percent of LGUs managed to pass the Seal of Good Local Governance, a benchmark used to assess transparency and efficiency. Those that failed the assessment frequently exhibited significant gaps in essential areas such as social protection, disaster preparedness, and financial administration. The administration plans to use the legislative review to embed stricter accountability measures within the code, ensuring that local officials are better equipped to meet national standards for public service delivery and crisis management.