Press Release
March 15, 2009


The share of local government units (LGUs) from internal revenue taxes being collected by the national government has climbed to P249 billion this year, from P210 billion last year, Senate Minority Leader Aquilino Q. Pimentel, Jr. (PDP-Laban) said today.

Pimentel said the steady hike in the share of LGUs from national tax collection, commonly called Internal Revenue Allotment, was made possible by the enactment of the Local Government Code (Republic Act 7160) in 1991. The Code mandates that 40 percent of yearly tax revenues should go to the LGUs and the central government, 60 percent.

The IRA share of the LGUs is about one-fifth of the P1.414 trillion national budget for fiscal year 2009 which has just been signed into law by President Gloria Macapagal-Arroyo.

He said that this is a far cry from the IRA share of LGUs in the years preceding the enactment of the landmark Code -- P2.58 billion in 1987, P3.22 billion in 1988, P4.23 billion in 1989 and P7.50 billion in 1990.

"Needless to say, the infusion of so much money into the coffers of the local government units after the enactment of the Local Government Code in l99l triggered a lot of development in most provinces, cities, municipalities and barangays," Pimentel said at the Regional Seminar on the Role of Parliaments in Promoting Peaceful and Sustainable Societies in Southeast Asia in Phom Penh under the joint auspices of the Inter-Parliamentary Union and the Cambodian government.

"Under the Code, the LGUs now have the money to spend for the priority needs of their constituents."

The 40 percent share of LGUs from national taxes is apportioned as follows: 20 percent for barangays, 34 percent for municipalities, 23 percent for cities and 23 percent for provinces.

The LGUs are also entitled to a share of the fees, royalties and charges that the national government imposes on earnings from utilization of minerals, energy, water and other natural resources that are found within their territorial jurisdiction.

With the resources at the disposal of the LGUs, Pimentel said local roads and bridges could now be built more expeditiously, agricultural priorities of the localities could now be addressed more directly and health clinics, if not small hospitals could now be put up and maintained in the communities.

Pimentel, principal author of the Code, said while education is mainly the work of the central government, a part of the real estate taxes that now fully accrue to the LGUs goes to the Local Schools Board in every province, city and municipality.

With the development of the localities that used to be ignored by national politicians, he said the number of recruits for the ideological armed rebels has declined considerably.

He said this is not to say that the Local Government Code was responsible for the diminution of the rural folks' attraction to the rebel groups.

"Perhaps, our people are now getting tired of bearing up arms against the government or it may also be due to the fact that when people see that their government is seriously delivering basic services to the nooks and corners of the land, the inclination to fight against perceived or real injustices is somehow dissipated," he said.

Pimentel said that for the record, the massive corruption blights the good effects of the implementation of the Code. For instance, he said the recent scandal over the World Bank-funded road projects and the oppressive manner by which some LGUs govern their localities thwarts the Code's main objective: to bring development and peace to the nation and the countryside.

Like anything else, he said the intent of any good law is frustrated by the failure of those in power to implement the Rule of Law faithfully.

"It is my opinion that in my country contrary to the facile suggestions of arm-chair strategists, we do not need more laws, or stringent penalties or even the death penalty to make the government officials respond more faithfully to the demands of service by our people," Pimentel said.

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