Bukidnon to lose P214M in IRA due to national revenue shortfall

MALAYBALAY CITY (MindaNews/14 July) – Due to the five-percent shortfall in the national revenue in 2009, which is the basis for the computation of the internal revenue allotment (IRA) for 2012, local government units in Bukidnon will lose a total of about P213.8 million, according to a memorandum circular released recently by Budget and Management Secretary Florencio B. Abad.

Iligan City Mayor Lawrence Cruz, meanwhile, also complained that IRA would be further reduced because of the Supreme Court’s final ruling on the creation of 16 new cities, including 6 in Mindanao .

This year, Bukidnon – including its 2 cities and 20 municipalities – received a total of P4.486 billion. But due to the cut, they expect to receive P4.272 billion next year, a reduction of 4.77 percent.

MindaNews obtained a copy of the list of reductions Wednesday from Concessa B. Gamao, budget consultant of the Sangguniang Panlalawigan.

Gamao, previously head of the provincial budget office, said the reduction usually means a freeze on salary increases.

But Cruz said that budget cuts could affect administrative operational costs, development program agenda, maintenance of facilities, hiring of employees and allocation of benefits for regular employees.

He said he consequentially tightened budget for projects and festivities in the last two years, especially that the city need to regularly pay loans from banks incurred for Iligan’s water system development and solid waste management.

This year, Iligan City allocated nearly P72.9 million for debt servicing and interests fees.

The Provincial Government of Bukidnon, which received an IRA of P1.311 billion in 2011, will expect to get only P1.249 billion or about P62.265 million less.

Malaybalay City will receive P36.9 million less next year. From P765.9 million in 2011 to P728.9 million in 2012. Furthermore, Malaybalay expects to lose P60 million due to the creation of 16 new cities.

Valencia City, which received about P592.8 million in 2011, will expect to receive only P564.3 million next year, or about P28.6 million less.

Bukidnon’s 20 municipalities, with a combined IRA of P1.815 billion this year, would end up getting P1.729 billion in 2012.

According to Section 284 of Republic Act 7160 or the Local Government Code, 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.”

The DBM showed that tax collections in 2007 reached P699.7 billion; P761.95 billion for 2008; and P720.54 billion in 2009.

“The smaller [IRA] … for fiscal year 2012 is due to the sharp decrease of revenue collections in 2009 due to the global economic slump as well as revenue-eroding measures passed at that time,” the DBM said in a press statement published in its website, www.dbm.gov.ph.

The DBM encouraged LGUs to align their programs, projects and activities to the five priority areas under the social contract agenda of the national government.

“The National Government can co-finance LGUs’ critical development projects such as school buildings, rural health centers, infrastructure that supports agriculture and tourism, and other endeavours consistent with the Social Contract,” Abad said. He noted that each LGU is mandated to appropriate at least 20 percent of its IRA for development projects. (Walter I. Balane with reports from Violeta M. Gloria /MindaNews)