LGUs to get less in NG tax share, Dinagat Islands' budget still pending

LOCAL GOVERNMENT units (LGUs) will have to share a smaller pool of money next year as their internal revenue allotment (IRA) shrank slightly, according to the Department of Budget and Management (DBM).

A total of P273.31 billion is earmarked for the 2012 IRA, which is the share of LGUs in national tax revenues. This amount is a 4.75% dip from the P286.945 billion allocated this year, according to Local Budget Memorandum No. 65, dated June 27.

Eighty provinces will share P64.217 billion in IRA, 122 cities will receive P62.327 billion, 1,500 municipalities will get P93.399 billion and 41,890 barangays will be allocated a total of P53.367 billion.

The 16 municipalities petitioning to be converted into cities, which get bigger IRAs, were still considered as municipalities, “pending the issuance of an entry of judgment by the Supreme Court,” the DBM said.

The 16 municipalities concerned are: Baybay (Leyte); Bogo, Carcar and Naga (Cebu province); Catbalogan (Samar); Tandag (Surigao del Sur); Borongan (Eastern Samar); Tayabas (Quezon); Lamitan (Basilan); Tabuk (Kalinga); Bayuga (Agusan del Sur); Batac (Ilocos Norte); Mati (Davao Oriental); Guihulngan (Negros Oriental); Cabadbaran (Agusan del Norte); and El Salvador (Misamis Oriental).

The conversion to city of the 16 municipalities has been much-debated since 2008. In its latest ruling on the controversy in February, the court stated that the 16 municipalities were qualified to be cities, therefore, qualified to get a bigger slice of the IRA pie.


But this was questioned by the League of Cities of the Philippines and a motion for reconsideration was filed in March.

The contested province status of Dinagat Islands was also not considered by the Budget department, pending a decision from the Supreme Court.

Should the court decide definitively on these questions within the year, the 2012 IRAs will be adjusted accordingly, the DBM said.

“The IRA and other local resources shall first cover the cost of providing basic services and facilities...particularly those devolved by the Department of Health, Department of Social Welfare and Development, Department of Agriculture and the Department of Environment and Natural Resources...,” DBM’s memo read.

A quarter of the IRA is equally shared among LGUs. Another quarter is distributed based on the land area of the LGU, while the other half is allocated based on population.

In addition to the IRA, some local governments receive special shares from national taxes, which is then integrated into their total budget.

These include excise taxes on native tobacco products, gross income taxes paid by businesses within ecozones and proceeds “from the utilization and development of national wealth within their territorial jurisdiction.”

Moreover, the DBM also released the guidelines for the preparation of the 2012 budgets of LGUs. LGUs are required to submit schedules on personnel and other operation expenditures, as well as servicing of debt and other contractual obligations.

They must also submit a report on their actual revenue collections and expenditures for this year, including their Annual Investment Program.

In compliance with other laws, the 2012 budget of LGUs must also allocate funds for gender concerns and development, senior citizens and persons with disabilities, acquired immune deficiency syndrome, and the implementation of programs for the protection of children.

Lastly, the Budget department reminded LGUs to align their programs with the priority thrusts set by the Aquino administration, namely: anti-corruption, poverty reduction, economic growth, as well as lasting peace and environmental protection. -DIANE CLAIRE J. JIAO, Reporter/Business World


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