A local government unit (LGU) maybe a barangay, a municipality, city, or a province that puts up a post-secondary institution based on Section 447(a)(5)(x) (Municipality), 458(a)(5)(x) (City), and 468(a)(4)(iii) (Province) of the Local Government Code of 1991, which provide that "subject to availability of funds and to existing laws, rules and regulations the" LGU "shall establish and provide for the operation of vocational and technological schools and similar post-secondary institutions and, with approval of the Department of Education, fix and collect reasonable fees and other school charges at said institutions, subject to existing laws on tuition fees."
LCUs operate on the premise that the territorial boundary of the LGU, with all the education infrastructure and facilities built by the province, city, or municipality, is the university campus itself.
It means that an LCU has free access to all the structures found in the LGU, including its library, sports complex, hospitals, business establishments, and barangay centers.
[1] In 1965, the Pamantasan ng Lungsod ng Maynila, the first institution of higher learning in the Philippines to be fully subsidized by a local government unit, was established through the Republic Act 4196, which authorizes the City of Manila to operate its own university.
With an increased share of taxes from 11% to 40% given by the national government units plus their own income as highly urbanized cities or municipalities, a good number of LGUs decided to put up their own LCUs.