The Local Government Code provides for Internal Revenue Allotment:
Section 284 of the LGC of 1991
Local government units shall have a share in the national internal revenue taxes based on the collection of the third fiscal year preceding the current fiscal year as follows:
a. On the first year of the effectivity of this Code, thirty percent
(30%);
b. On the second year, thirty-five percent (35%); and
c. On the third year and thereafter, forty percent (40%).
Provided, That in the event that the national government incurs an unmanageable public sector deficit, the President of the Philippines is hereby authorized, upon the recommendation of Secretary of Finance, Secretary of Interior and Local Government and Secretary of Budget and Management, and subject to consultation with the presiding officers of both Houses of Congress and the presidents of the liga, to make the necessary adjustments in the internal revenue allotment of local government units but in no case shall the allotment be less than thirty percent (30%) of the collection of national internal revenue taxes of the third fiscal year preceding the current fiscal year: Provided, further That in the first year of the effectivity of this Code, the local government units shall, in addition to the thirty percent (30%) internal revenue allotment which shall include the cost of devolved functions for essential public services, be entitled to receive the amount equivalent to the cost of devolved personal services.
Section 285 of the LGC of 1991
Allocation to Local Government Units. - The share of local government units in the internal revenue allotment shall be allocated in the following manner:
a. Provinces - Twenty-three percent (23%);
b. Cities - Twenty-three percent (23%);
c. Municipalities - Thirty-four percent (34%); and
d. Barangays - Twenty percent (20%)
Provided, however, That the share of each province, city, and municipality shall be determined on the basis of the following formula:
a. Population - Fifty percent (50%);
b. Land Area - Twenty-five percent (25%); and
c. Equal sharing - Twenty-five percent (25%)
Provided, further, That the share of each Barangay with a population of not less than one hundred (100) inhabitants shall not be less than Eighty thousand pesos (P=80,000.00) per annum chargeable against the twenty percent (20%) share of the Barangay from the internal revenue allotment, and the balance to be allocated on the basis of the following formula:
a. On the first year of the effectivity of this Code:
1. Population - Forty percent (40%); and
2. Equal Sharing - Sixty percent (60%)
b. On the second year:
1. Population - Fifty percent (50%); and
2. Equal Sharing - Fifty percent (50%)
c. On the third year and thereafter:
1. Population - Sixty percent (60%); and
2. Equal Sharing - Forty percent (40%)
Provided, finally, That the fiscal requirements of barangays created by local government units after the effectivity of this Code shall be the responsibility of the local government unit concerned.
My Proposed amendments are as follows:
The 1st and 2nd terms of Article 284 of the code which both constituted a 50% internal revenue share in the national government are irrelevant because decades have already passed since the effectivity of this code and LGU’s nowadays are crawling to grasp and have been endeavouring the struggle against the attainment, accumulation and procurement of revenues. I want it to strike out from the code itself because of the underlying inequality against the financial sharing of the LGU. Further, that 40% of the accumulated revenue of the LGU shall be changed into 10% percent revenue annually, and shall only be increased in cases of restructuring or re-organization of the government as a whole that may require a great deal of finance and assistance from various LGU’s. It is obvious that we have not yet overcome the unfair competition against foreign investors or multinational companies because we fail to address and empower the local industries and the chance to provide opportunities for local businessmen. Once we challenge the ammendments to the said article can we oly develop and leaving no room for doubts as to the financial managements, procurement and appropriations. The question may now arise: does the 10% share in the national government enough for the budget assistance to the national government in discharging its duties and responsibilities? The answer: it is more than enough! In fact, As of September 2012, there were 80 provinces, 35 highly-urbanized cities, 5independent component cities, and one independent municipality. Imagine every LGU’s has a share in the national government with utmost 10% of their internal revenue income. There’s no less enough to say that this is unfair and uneven for the national government has more than enough accumulated shares from various LGU’s annually. We shared our estimated 60% internal income to the national government yet in return we will only have 25%. What an injustice! For Article 285, I suggest that the manner in which the internal revenue shall be alloted shall be based solely on economic, population and illiteracy rate, and capacity of a certain LGU’s to employ its people giving the opportunity to enhance and develop their capabilities not that we measure it by polititcal subdivisions and boarders across the regions.
Justification and Recommendations
Unlike to our present system, where the poverty of one region is mostly the fault of the national government, giving an excuse for local leaders of their inability to develop their own initiative. The excuse is often states as “wala pa kasing approval ng national or na approve na pero wala pa ang budget sa local.” This system made all this excuses possible. The effect is liability and responsibility of local leaders to prove their competence is quite hard to measure. In the pideral Philippines "system change, people change”. If the system placing liability and responsibility to local states through retaining a larger percentage on revenue allowing devolution and providing decentralized power to local states , hence system change from the unitary arrangement, we can expect local leaders being change with taking clear responsibility as they cannot any more make excuses of wala pa kasing approval ng national or na approve na kaya lng wala pa ang budget sa local.
No wonder we have not overcome some features of foreign controls due to the kind of education we served. No enough level of intellect could change this country except if we make our education as implied result of the system. Look at most of our elected officials, studied from prestigious school in the country, the school of the best, from which most of our government officials elected or non elective do the administration of government, and yet, we are poor, with a corrupt system implemented and administered by the best. With federal eventually every state will develop a more better education, not the type of which is religiously oriented or that which seek to down the intellectual capability of people, fearing that they would eventually be enlightened.
With federal every state would aim to seriously educate human resource that would administer better development in the interest of the state and not simply business education championed by the religious sect. Though the unitary centralized may have likeness to federal they have taken that which essential to the success of the US in having multi states to work for their own territorial jurisdiction, hence divulging the liability for every state to attend for its development to which every state may have direct knowledge and experience as opposed and impossible for the national federal government to immediately ascertain. Giving the national federal government a lighter load to deal with the welfare of the people but concentrates on the national policy development to which they extracted from the success of federal states. Our central government has to do both the welfare act, the administration, and almost everything including the distribution of relief goods. (Ian Balbin, LLP Page. February 1, 2013)
Under local government administration it allows too many opportunity to engage to business enterprise thus increasing its own revenue. The problem a large percentage of this revenue is sent to national which in turn will be part of the general appropriation act decided by the national legislature for which majority members came from luzon. Having this condition most locals had minimal interest on pursuing revenue raising and instead place their hope to budgets provided by those who have pork barrel and cash gifts from among politician to share. unfortunately, we only have two senators in mindanao that could possibly share a little. Another thing what are those business enterprise local government are usually engaged with? Nothing but more or like of small medium enterprises, like souvenir centers that earns rent,public terminal ticketing, sidewalk vendors ticket all branded as GOCC's revenue making. Under Pideral we are talking of devolution of economic enterprise, more of large scale business enterprise under the administration and operation of state government.
