BUDGET Secretary Florencio Abad said on Tuesday local governments will get a smaller internal-revenue allotment (IRA) share in 2012–P273.31 billion from P286.94 billion in 2011—because of the “sharp decrease” in revenue collections in 2009.
Abad said in a press statement that 2009 revenues were pared down by the global economic slump and the revenue-eroding measures that came into force at that time.
“Year after year, we in the Department of Budget and Management [DBM] have followed the provisions of the Local Government Code on the share of local governments in national internal-revenue taxes, with no exception. It is unfortunate that revenues in 2009 declined, but that is the legally mandated base year for computing the IRA for fiscal year 2012,” he said.
Abad cited Section 284 of Republic Act 7160, which states that local governments shall have a 40-percent share in national internal-revenue taxes “based on the collection of the third fiscal year preceding the current fiscal year.”
The DBM said that under this formula, “IRA shares of local governments will decrease by P13.635 billion, or 4.8 percent, to P273.31 billion in 2012 as compared with P286.94 billion in 2011.”
Abad encouraged local government units (LGUs) to align their programs, projects and activities to the five priority areas under the Aquino “social contract” so that they can make full use of the funds available to them next year.
“The national government can cofinance local governments’ critical development projects, such as school buildings, rural health centers, infrastructure that supports agriculture and tourism, and other endeavors consistent with the social contract,” he said.
Abad noted that the Local Government Code of 1991 assures each local government of at least 20 percent of its IRA for development projects.
The five priority areas under the “social contract” are anticorruption, transparent, accountable and participatory governance; poverty reduction and employment of the poor and vulnerable; rapid, inclusive and sustained economic growth; just and lasting peace and the rule of law; integrity of the environment and climate-change adaptation and mitigation.
