Carlo's Think Pieces

Reflections of a Filipino in the Netherlands

Posts Tagged ‘Internal Revenue Allotment’

Growing Importance of Barangays

Posted by butalidnl on 9 February 2012

When I visited the Philippines recently, I noticed that in provincial roads, there were ‘road blocks’ set up in front of elementary schools. These were obviously set up to force motorists to slow down and avoid hitting children. It was literally everywhere: from Pampanga and Bataan, to Bohol, and even Sarangani. It was obviously the work of the barangays in these places.

It was not only in the case of school road blocks that the barangay fulfills a very useful function. One is its role in settling minor disputes, mostly over land. Such disputes need to be put before a barangay resolution committee (Lupon Tagapamayapa), which will try to settle the matter out of court. Only when this fails, would the case be forwarded to the courts. This has meant that the regular courts are no longer swamped with so many minor cases.

The barangay also has a role in approving permits for businesses. For the majority of applicants this is just a procedural question. Sometimes, the barangay would disapprove an application if it is to the detriment of the residents. Or, the barangay may negotiate to have the business hire a percentage of its workers from the area. Some people want to abolish barangay permits  in order to streamline the procedure for setting up businesses. I think it would be better to streamline the required tax procedures, which are more meticulous (and quite useless and outdated) rather than abolishing the barangay permit.

Some barangays have gone beyond their limits in making ordinances. Barangay Ayala Alabang in 2011 made a resolution that drugstores could only sell contraceptives based on a doctor’s prescription. Other barangay councils have made resolutions against mining in their areas.  These matters are properly handled by higher government bodies, at munipal, provincial or national level.

Barangays have been growing in importance, making them prime political targets. This is partly due to the Local Government Code which allots them a share of the Internal Revenue collections. In 2012, the average barangay would receive P520,000/year in assured funds as a result.  Add to this the income barangays have from giving business permits etc. With the increased importance and funds, there are inevitably those who would abuse these positions. However, at the same time, more and more people are taking the barangay seriously and have campaigned to have ‘good’ people elected to the barangay councils. Also, there is an increasing expectation that the barangay will act on a host of things: from roads within the barangay, to traffic, cleanliness etc.

What many Filipinos don’t realize is that elected barangay councils are relatively rare in the world. In most countries, the lowest elected officials are city/municipal councils. In Western Europe, it seems that only Portugal has elected barangay councils (they are called ‘parish’ councils). This means that there is a democratic gap in most other countries, where municipal councils often make decisions that may not have fully considered the situation in neighborhoods or districts.

Having an elected structure at the barangay level comes in handy in many cases. During calamities, barangay officials coordinate the local response; barangays are instrumental in fighting diseases (e.g. dengue, malaria). Even in cases of armed conflict, barangays make for a coordinated evacuation of inhabitants (and are able to better arrange for relief goods).

With their growing importance, people will become more motivated to get involved in barangay politics. Barangay elections will be more contested, and people will be more demanding on the officials who are elected. And all this makes for a more participative democracy in the Philippines.


Posted in LGU, Philippine politics, Philippines, politics | Tagged: , , , , | 1 Comment »

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.

Posted in Philippine economics, Philippine politics, Philippines, politics | Tagged: , , , , | 2 Comments »