Press Release
July 23, 2008

Loren wants direct remittance of 40% wealth share to LGUs

Local government units (LGUs) will no longer have to undergo tedious process working for the release of their development fund once the proposed amendment of a certain provision in the Republic Act No. 7160 is acted upon in the Senate.

Senator Loren Legarda said she will earnestly seek the passage of a bill which will amend Section 293 of the Local Government Code of 1991 to benefit the hardworking local executives in their development undertaking.

Legarda noted that under the present system, it usually takes a long time before an LGU receives its portion of the proceeds of the excise taxes, which has to be disbursed from the national government coffers.

"This system gives LGUs a difficult time financing their development projects that purport to advance the local economy, so we will seek for the speedy enactment of a bill which will provide remedy for this," said Legarda.

LGUs will be able to immediately act on their projects once the proposed amendment is enacted. This means that the host LGU will directly receive its forty percent (40%) share from the national wealth taxes.

"Under this proposed system, the proceeds due to the LGUs shall no longer pass through the Department of Budget and Management (DBM) which is usually the cause of delay," Legarda said.

"Through this measure, LGUs will be able to immediately act on their projects. This will help improve their investment climate and thereby provide an impetus to the growth of their economy," Legarda added.

In seeking remedy for the old system, the bill will mandate the corporations or any group, private or public, engaging in the utilization and development of the national wealth within the area, to directly remit to the concerned LGUs its forty percent share.

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