Carlo's Think Pieces

Reflections of a Filipino in the Netherlands

Reduce IRAs of “non-performing” LGUs?

Posted by butalidnl on 9 February 2010

On 8 February, Noynoy Aquino proposed that the Internal Revenue Allotments of  Local Government Units (LGUs) which do not do their work well should be trimmed down. It’s a nice thought, coming from the idea of reducing waste in government expenditure. The problem with it, however, is that to do so would mean an increase in the president’s prerogatives, of which he has already too many. And if the president will be the one to decide which LGUs to cut the IRAs of, he could very well reduce the IRAs of provinces, cities or municipalities ruled by the opposition.

The Local Government Code, which among other things, provides for the Internal Revenue Allotments of LGUs, also provides for the automatic release of these funds. And with reason. This is to prevent national government tinkering with these funds in order to control the LGUs. I think it is a good idea for the release of these funds to be automatic.

Perhaps it would be a good idea to set up rules (or even pass a law amending the Local Government Code) which would spell out what it means to have a “non-performing LGU”, and then to prescribe exactly how much IRA reduction that will be imposed on it, and what the LGU needs to do to get its allotment restored. This way, the reduction of IRA will go about in an automatic way – that is, devoid of “presidential prerogative”.

Looking into the Local Government Code provision on IRAs, it specifies that the  allotment per LGU is determined on the basis of 50% population, 25% land area, and 25% equal sharing – this, after the initial division of the total internal revenue taxes by: provinces (23%), cities (23%), municipalities (34%) and baranggays (20%) . Now, I see the 25% “equal sharing” as unfairly benefitting small, less populous LGUs.  I suspect that many of the “not well spent” IRAs is connected to this amount given to small LGUs. Why not just eliminate this item altogether? And then make the division into 2/3 population, and 1/3 territory. This would make the allotments go more to the more populous and bigger LGUs who actually need more of the money, and perhaps are finding it hard to finance all their expenses.

And perhaps the IRA amounts should be published by the government on the internet,  as a step towards transparency. This way, the IRA amounts will be known to be public. Of course, it would be best if the full accounts of LGUs  also be on the internet.


2 Responses to “Reduce IRAs of “non-performing” LGUs?”

  1. marie said

    noynoy’s idea for me is nonsense! being an lgu employee, i do know that the LGUs rely mostly to the IRA in order to implement projects to its constituents! thus, when you cut the IRA of a certain LGU, you are actually depriving the residents of the money which is actually belongs to them!

  2. kalalagan said

    Well, IRA if spent wisely, it will be a better benefit to country folks but I’m sure there are provinces that the good government should pay attention regarding the use of this funds, as I observed there are billions of this money flowing in a certain provinces and municipalities w/o reaching the true recipient of the funds, Mayors or Governors are maintaining ghost employees to siphon the fund into their pocket, funding a ghost maintenance project are common issues everywhere. Creating a nonsense project like waiting shed, were is the watchdog of the masses I mean the COA, why ? there is no question on their liquidation papers. Not all but there are Mayors treating the IRA as their personal belongings, when the funds are about to be collected in LBP their nearest family members are to be ready to collect their share, & sometimes the Mayor is in trouble dividing the money to his family. That is why during election day we’ve witness the presence of chaos, the mayor even afford to kill his brother as long as he can be the Mayor, he will spent even billion just to win because of the huge IRA afterwards. I knew not only mayors and governor but some Barangay Chairman did this likewise, I remember when my father is a Bgry Chairman during the time of Mr. Marcos, IRA was not at that time & the Brgy Election is so peaceful that we can not hear any released violence, not like nowadays that we experience so many trouble in barangay just even during the brgy registration and how much more when election comes, there will be killings and many incidents happen, and to blame with is the IRA managements. The question again is how can we solve this problem, shall we recommend the total eradication of this funds to those who treated IRA as their own, or formulating a rules to lessen the corruption. I could not mention where this provinces but the reader clue is “Place where more trouble during Election day is” .

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