Press Release
August 12, 2011


The fiscal gap left by the decreased in the allocation of the internal revenue allotment (IRA) to local government units (LGUs) should be subsidized by the central government in light of the hundreds of billions in savings the Palace has accumulated in the past months.

Senator Chiz Escudero said the projected decline in the IRA release for 2012 should be cushioned by the government in order to avoid disruption in the delivery of social and basic services to the people.

The proposed IRA for fiscal year 2012 is P273 billion, down from P287 billion in 2011. The slash, according to Budget Secretary Butch Abad, is due to the "sharp decrease in revenues in 2009 as a result of the global economic crisis and revenue-eroding measures passed at that time."

Escudero said the P13-billion gap should be subsidized by the government and source the subsidy from savings and allocated budget for unprogrammed funds for 2012.

In the budget hearing at the Senate this week, the government's economic managers admitted that the state has an unspent P1.12 trillion in the national budget for the current fiscal year.

"The government coffer is still half-full for 2011. In the hearing, we also found out that there lies a cool P161 billion for unprogrammed funds for the next fiscal year. There is so much public money lying idle and this can be put into better use like filling the IRA gap so that standards in service delivery of the LGUs can be fulfilled." Escudero explained.

The senator said that an IRA cut could compromise the powers and resources of LGUS in terms of delivering social services.

"Local governments are the front liners in basic social services. When you cut their IRA share, there follows the disruption of health services, food security, infrastructure and public works like school buildings and barangay roads," Escudero said.

In subsidizing the gap, the government remains consistent in upholding the devolution law, which mandates that "LGUs be given more powers, authorities, responsibilities and resources."

"While it is true that we want our local government units to be self-sufficient and reliant, to enhance and develop their own economic programs, not all LGUs are on the same page," Escudero said. "Some or only a few would not feel the crunch of a reduced financial infusion from the government. But for those LGUs who are just starting to build their own sources of fiscal revenues and for those who have been besieged by one calamity after the other, the IRA is a vital equalizer."

News Latest News Feed