LGUs benefiting from revenue improvements

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Improved revenue collections have allowed the government to increase allocations for local government units (LGUs), the Budget department said.

This year, 43,593 LGUs were given internal revenue allocations (IRA) amounting to a total of P428.62 billion, 10 percent higher compared to 2015. Reckoned from 2010, the amount is over 60 percent higher, the department said in a statement on Wednesday.

Under the Local Government Code (LGC) of 1991, LGUs are provided a 40 percent share from national internal revenue tax collections of the third fiscal year preceding the current year, the Budget department explained.

“[T]he increase in IRA can only mean more capacity for LGUs to provide social services and local infrastructure projects for local communities,” Budget Secretary Florencio Abad said in the statement.

“Efficient tax collection and our policy of building the capacity of LGUs to serve as partners of the national government in the implementation of projects have made this possible. This means more gains in terms of infrastructure build-up and social services in local communities,” he added.

The Budget department said that since 2012, IRA shares have been automatically released at the start of every year without any conditions or actions required from LGUs, improving on the LGC requirement that releases be made on a quarterly basis.

This was further enhanced by Budget and Finance departments’ adoption of a policy allowing the IRA shares to be released directly from the Bureau of Treasury to the LGUs’ bank accounts.

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