2012 IRA drops 4.8 percent

MANILA, Philippines – There will be a sharp decline in the internal revenue allotment (IRA) for local government units (LGUs) in the proposed national budget for 2012 because of the steep decline in revenue collections in 2009, Budget Secretary Florencio Abad said yesterday.

Fiscal year 2009 is the legally mandated base year to be used in computing the IRA for fiscal year 2012.

In a statement, Abad said IRA shares in 2012 will decrease by 4.8 percent from this year’s allocation of P286.9 billion to P273.3 billion.

He said that in 2009, the global financial crisis weakened revenue collections for the year.

“Year after year, we in the DBM (Department of Budget and Management) have followed the provisions of the Local Government Code on the share of LGUs in national internal revenue taxes, with no exception. It is unfortunate that revenues in 2009 declined, but that is the legally-mandated base year for computing the IRA for fiscal year 2012,” Abad said.

Section 284 of Republic Act 7160 states that LGUs shall have a 40-percent share in national internal revenue taxes “based on the collection of the third fiscal year preceding the current fiscal year.”

Abad urged LGUs to align their projects to the five priority areas under the social contract of President Aquino. –Delon Porcalla (The Philippine Star)