LGUs to keep up to 85% of own revenues under federal system

HOUSE SPEAKER Pantaleon D. Alvarez yesterday said there may be no need for an internal revenue allotment (IRA) under the proposed federal system as 80% to 85% of public income will be left to the local government units (LGUs). Based on data from the Department of Finance, eight out of 16 regions in the present setup are 80% dependent on IRA, the annual budget coming from the national government. However, four of these eight regions only receive 3% to 4% of the national total. To balance this, Mr. Alvarez said poor regions could merge with the rich ones to form a single state and help each other. In any case, Mr. Alvarez added, poorer regions could still receive from the federal government a “special fund” to subsidize their operations until they can stand on their own. “Pero siyempre (But of course), we have to encourage the local government officials to be creative enough how to generate income do’n sa region nila (in their respective regions),” he said. — Minde Nyl R. dela Cruz