The Local Government Code of 1991 (Republic Act 7160) classifies all cities into one of three categories:
Highly Urbanized Cities – Cities with a minimum population of two hundred thousand (200,000) inhabitants, as certified by the National Statistics Office, and with the latest annual income of at least Fifty Million Pesos (P50,000,000.00) based on 1991 constant prices, as certified by the city treasurer. There are currently 33 highly urbanized cities in the Philippines, 16 of them located in Metro Manila.
Independent Component Cities – Cities whose charters prohibit their voters from voting for provincial elective officials. Independent component cities are independent of the province. There are five such cities: Dagupan, Cotabato, Naga, Ormoc and Santiago.
Component Cities – Cities which do not meet the above requirements are considered component cities of the province in which they are geographically located. If a component city is located within the boundaries of two (2) or more provinces, such city shall be considered a component of the province of which it used to be a municipality.
Cities are classified according to average annual income based on the previous 3 calendar years.
- 1st class – P300 million or more
- 2nd class – P240 million or more but less than P 300 million
- 3rd class – P180 million or more but less than P240 million
- 4th class – P120 million or more but less than P180 million
- 5th class – P60 million or more but less than P120 million
- 6th class – Below P 60 million
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