WHEREAS, under the present system of local government administration, the municipal governments are required to contribute eight per cent of their annual revenues for the conduct of field agricultural extension work and rural health and sanitation services by the provincial governments;

WHEREAS, current trends in countryside development under-score the need for the direct involvement of the local officials in the planning and execution of mass-oriented and other relevant community projects;

WHEREAS, in order to make available additional funds for priority projects of the municipal governments and enhance the effectiveness of the town mayors in promoting rural development, the compulsory allocation of municipal revenues for contributions to the agricultural and health services of the provincial governments has to be dispensed with;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby decree and order:

SECTION 1. Exemption. — The municipal governments are hereby declared exempt from the local fund contributions to the provincial governments for the conduct of field agricultural extension work and rural health and sanitation services required under Sections 1012 and 1813-H of the Revised Administrative Code, as amended by Republic Act No. 5185; and such sums shall be retained by the municipal governments and utilized for the financing and prosecution of municipal development projects.

SEC. 2. Issuance of rules and regulations. — The municipal aids to the provincial governments referred to in Section 1 hereof shall no longer be required as budgetary allocations of the municipal governments and, for this purpose, the Secretary of Finance shall issue the necessary implementing rules and regulations.

SEC. 3. Repealing Clause. — Sections 1012, 1013, 1014, 1813-H, 1813-I, and other pertinent provisions of the Revised Administrative Code, Republic Act No. 5185, and other existing laws or decrees inconsistent with this Decree are hereby repealed or modified accordingly.

SEC. 4. Effectivity. — This Decree shall take effect on January 1, 1978.

Done in the City of Manila, this 30th day of November, in the year of Our Lord, Nineteen Hundred and Seventy-Seven.

			(Sgd.) FERDINAND E. MARCOS President of the Philippines
	By the President:
	(Sgd.) JACOBO C. CLAVE
		Presidential Executive Assistant