Less revenue allotments for LGUs in 2012 – DBM

Budget Secretary Florencio Abad said on Monday that local government units (LGUs) will get less internal revenue allotments (IRAs) in next year’s budget due to the lingering effects of the global economic crisis.

Under the Local Government Code (Republic Act 7160), LGUs get a 40 percent share in the national internal revenue taxes based on the collection of the third fiscal year preceding the current fiscal year. This means that the 2012 IRAs are based on the tax collections in 2009.

Tax collection dropped to P720.546 billion in 2009 from P761.953 billion in 2008. Deducting tax refunds made and excise taxes, the 2009 tax collection dropped even further to P683.274 billion.

Abad explained that under the Local Government Code, the IRAs will decline by 4.8 percent from P286.94 billion in 2011 to P273.31 billion in 2012.

“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 heads the Department of Budget and Management which, among other things, drafts the national budget, known as the budget call, which Congress will use as basis for the General Appropriations Bill for the following year.

The budget secretary encouraged LGUs to maximize their IRAs by aligning their programs and projects with President Benigno Aquino III’s five priority areas, namely, anti-corruption and participatory governance; poverty reduction and employment of the poor; rapid and sustained economic growth; lasting peace and rule of law; and environmental integrity and climate change adaptation and mitigation.

Abad said the national government can help finance critical development projects such as school buildings, rural health centers, and agricultural and tourism infrastructure. — MRT/VS, GMA News