HOUSE F REPRESENTATIVES
RECEIVED
parce 3 AUG 2016,

Republic of the Philippines
HOUSE OF REPRESENTATIVE!
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

STP ATION UNIT

BILLS www ADE X SERVI

HOUSE BILL No. “

Introduced by Representatives HORACIO P. SUANSING, JR.
and ESTRELLITA B. SUANSING

AN ACT
STRENGTHENING THE LOCAL GOVERNMENT UNITS (LGUs) BY INCREASING TO
FIFTY PERCENT (50%) THEIR ANNUAL INTERNAL REVENUE ALLOTMENT (IRA)
SHARE AND FOR OTHER PURPOSES

EXPLANATORY NOTE

Internal revenue’ allotment (IRA) is the share of a local government unit (LGU) from
the revenues generated by the national government. Provinces, independent and
component cities, municipalities and barangays are entitled to IRAs based on their type of
government and formula factored on land area and population. Section 284 of Republic Act
7160, “Local Government Code of the Philippines” provides for the formula on the distribution of
IRAs.

By necessary implication, the link between capacity for LGU governance and IRA share
is prevalent. Thus, this bill seeks to enhance the capacity for LGU governance by increasing their
IRA share from forty percent (40%) to fifty percent (50%). Enlarging the LGU’s share in the
national taxes will elevate their wherewithal to implement programs and projects initiated by the
national government or the LGU themselves. As such, the efficient delivery of basic services,
local revenue generation, LGU financial management, performance of public economic
enterprises and mechanism for transparency and accountability would all be affected and refined
to the satisfaction of the constituents.

The importance of LGUs cannot be overemphasized, from the implementation of
infrastructure projects, local education facilities, barangay resolution committee (Lupon
Tagamapayapa), business permit issuance to calamity relief efforts the LGUs are expected to
lead.

Statistically for the year 2016, the total IRA share released to the 43,593 LGUs amount to
P428.62 billion’. With the proposed 10% increase in the IRA share, it is estimated that the FY
2017 IRA level can reach P608.61 billion which is P121.72 billion or 21.1% higher than the
original projection of P480.41 billion (less the proposed 10% increase). The difference in the
projected figures represent miniscule consideration if the importance of LGUs as cited-above is
put forth.

In view of the foregoing, the immediate approval of this bill is eamestly sought.

HON. woo P, SUANSING, JR. HON~ESTRELLITA B. SUA

Representative Representative
2” District of Sultan Kudarat 1 District of Nueva Ecija

* Local Government Code of 1991, cited by wikipedia.org, retrieved on August 22, 2016
* Department of Budget and Management, Local Budget Memorandum No. 70 “FY2016 IRA Level and Other Local Budget Preparation
Matters", viewed on August 22, 2016


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No, 3195

Introduced by Representatives HORACIO P. SUANSING, JR.
and ESTRELLITA B. SUANSING

AN ACT
STRENGTHENING THE LOCAL GOVERNMENT UNITS (LGUs) BY INCREASING
TO FIFTY PERCENT (50%) THEIR ANNUAL INTERNAL REVENUE ALLOTMENT
SHARE AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines
in Congress assembled:

SECTION 1. Short Title. - This Act shall be known as the “Equal Income
Sharing Act of LGUs 2016”.

SEC. 2. Declaration of Policy — It is hereby declared the policy of the State to
promote good governance by local government units (LGUs) and empower
government officials and public volunteer workers at the grassroots level.

The State recognizes the need of LGUs to have adequate funds to perform its
expenditure responsibilities.

In line with this policy and in cognizance of the crucial role of barangays as
the primary planning and implementing units of government policies, programs and
projects, the State shall, through the provision of increasing the barangay budget for
the payment of compensation, allowances, emoluments and other privileges such as
social security benefits, protect the rights and promote the welfare of barangay
officials and volunteer workers.

SEC. 3. Increase in the Annual Internal Revenue Allotment (IRA) Share of
LGUs. — Local government units shall have a share of fifty percent (50%) in the
national internal revenue taxes based on the collection of the third fiscal year
preceding the current fiscal year.

PROVIDED. That the ten percent (10%) increase in the annual internal
revenue allotment may be set aside and used for the payment of compensation,
allowances, emoluments and other privileges such as social security benefits of
barangay officials and volunteer workers.


SEC. 4. Implementing Rules and Regulations. ~ The Secretary of the
Department of the Interior and Local Government in coordination with the
Secretaries of the Department of Finance and the Department of Budget and
Management, shall jointly within ninety (90) days from the effectivity of this Act,
formulate and promulgate the rules and regulations to implement the provisions of
this Act.

SEC. 5. Repealing Clause. — Section 284 of Republic Act 7160 otherwise
known as the “Local Government Code’ is hereby amended. All other laws, orders,
decrees, issuances, circulars, rules and regulations or parts thereof which are
inconsistent with any of the provisions of this Act are hereby repealed or modified
accordingly.

SEC. 6. Effectivity Clause. — This Act shall take effect fifteen (15) days from
the date of publication in the Official Gazette or in at least two (2) newspapers of
general circulation.

Approved,