Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
First Regular Session

House Bill No.__ 2.4.74

INTRODUCED BY HON. MARCELINO “MARCY” R. TEODORO.

EXPLANATORY NOTE

The Local Government Code of 1991 (Republic Act No. 7160) mandates
that power, responsibilities and functions should be decentralized from the
central government to the local government units (LGU's) for a more efficient
organization of structures to serve the needs of the people, since the LGU’s are
more connected with the concerns of the citizens on the ground. The law also
has features that define the governing rules for such structuring, including the
allotment of funds for the local government units.

The internal revenue allotment (IRA) is the funds allocated by the national
government for the operations of the LGU's. Based on the Code, it is currently
pegged at 40%. This percentage seems prohibitive, considering the expenses
LGU"s might incur as they fulfill responsibilities in the service of the people, such
as potential increases in population, which translates to additional services
and/or infrastructure and therefore, additional expenses.

To address the aforementioned issue, this bill seeks to amend several
provisions in the Local Government Code to increase the internal revenue
allotment of local government units. An increase is ideal for the optimum
performance of the LGU’s for the benefit of the community. In addition, this also
proposes an automatic retention of the local government units’ allotment to
ensure the unhampered delivery of services and the fulfillment of their duties,
notwithstanding exigencies that may arise. These amendments are all in line with
the thrust of R.A. 7160, which is to develop and empower the LGU's.

In light of the foregoing, immediate passage of this bill is highly sought.

AaAe Tram

MARCELINO “MARCY” R. TEODORO
Representative, 1 District
City of Marikina


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
First Regular Session

House Bill No. 2474

INTRODUCED BY HON. MARCELINO “MARCY” R. TEODORO.

AN ACT
INCREASING THE INTERNAL REVENUE ALLOTMENT OF LOCAL
GOVERNMENT UNITS (LGUs) AND AUTHORIZING ITS AUTOMATIC
RETENTION, AMENDING FOR THAT PURPOSE SECTION 284 AND 286 OF
RA. No. 7160 OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE
OF 1991

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

SECTION 1. Section 284 of Republic Act No. 7160 is hereby amended to
read as follows:

"Section 284.- Allotment of Internal Revenue Taxes - Local Government Units
shall have a share in the national intemal revenue taxes based in 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 UNTIL THE SEVENTH YEAR [and thereafter], forty
percent (40%);

(d) ON THE EIGHT YEAR, FIFTY PERCENT (50%);

(e) ON THE NINTH YEAR AND THEREAFTER SIXTY PERCENT (60%).

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SEC. 2. Section 286 of the Republic Act No. 7160 is’ likewise hereby
amended to read as follows:

"Section 286. Automatic [Release] RETENTION of Shares - a) The share of
each local government unit shall be [release] RETAINED AUTOMATICALLY BY
THE CONCERNED LOCAL GOVERNMENT UNIT, without need of any further
action, [directly to] by the provincial, city, municipal or barangay treasurer, as the
case may be, on a quarterly basis within five (5) days after the end of each
quarter, and which shall not be subject to any lien or holdback that may be
imposed by the national government for whatever purpose.
b) xxx...”

SEC. 3. All laws, issuances, rules and regulations inconsistent with the
provisions of this Act are hereby amended, repealed or modified accordingly.

SEC. 4. This Act shall take effect fifteen (15) days after its publication in at
least two (2) newspapers of general circulation.

Approved.