Local Government Code of 1991
Section 450. Requisites for Creation.
(a) A municipality or a cluster of barangays may be converted into a component city if it has an average annual income, as certified by the Department of Finance, of at least Twenty million (P20,000,000.00) for the last two (2) consecutive years based on 1991 constant prices, and if it has either of the following requisites:
(i) a contiguous territory of at least one hundred (100) square kilometers, as certified by the Lands Management Bureau; or
(ii) a population of not less than one hundred fifty thousand (150,000) inhabitants, as certified by the National Statistics Office:
Provided, That, the creation thereof shall not reduce the land area, population, and income of the original unit or units at the time of said creation to less than the minimum requirements prescribed herein.
(b) The territorial jurisdiction of a newly-created city shall be properly identified by metes and bounds. The requirement on land area shall not apply where the city proposed to be created is composed of one (1) or more islands. The territory need not be contiguous if it comprises two (2) or more islands.
(c) The average annual income shall include the income accruing to the general fund, exclusive of specific funds, transfers, and non-recurring income.