The Department of Budget and Management (DBM) said it expects improved productivity in tobacco-producing areas in the country given the release of a P3.45 billion budgetary support for livelihood and cooperative projects for farmers.
In a statement over the weekend, the Budget agency said the fund released to tobacco-producing local government units (LGUs) came from the 2012 tobacco excise tax collection, charged against the 2014 General Appropriations Act.
The agency said areas producing burley and native tobacco get a share from 15 percent of the incremental revenue collected from the excise tax on tobacco products under Republic Act 8240.
These areas are Abra, Kalinga, Mountain Province, Ilocos Norte, Ilocos Sur, La Union, Pangasinan, Cagayan, Isabela, Nueva Vizcaya, Quirino, Tarlac, Occidental Mindoro, Misamis Oriental, Maguindanao, and North Cotabato.
Meanwhile, local governments producing locally manufactured Virginia-type cigarettes such as Abra, Ilocos Norte, Ilocos Sur, and La Union get their share from 15 percent of the excise tax collection on such cigarettes under RA 7171.
The Budget agency said it has released the Special Allotment Release Orders (SAROs) and the Notices of Cash Allocation (NCAs).
Once the documentary requirements prescribed under Local Budget Memorandum 69, which was issued Feb 18, 2015 are submitted, the release of funds to those areas will proceed, it said.
However, the DBM clarified that the P3.45-billion release is just a portion of the total tobacco excise tax shares yet to be allocated to the tobacco-producing local governments.
Budget Secretary Florencio Abad said that with the P3.45 billion budget support, tobacco farmers should be able to develop self-reliance through livelihood and cooperative projects that can help increase their productivity or enhance their income.
“More than just strengthening the LGUs that benefit from the releases, the proceeds from the taxes give these LGUs more economic opportunities. In the end, the progress of the tobacco industry also sustains the country’s overall economic expansion and inclusive development,” he concluded.