. 
-- 
0' 
UTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
I'.. 
S. BILL NO. 
Introduced bv Senator Raloh G. Recto 
Explanatory Note 
Section 284 of Republic Act No. 7660, otherwise known as the Local Government 
Code provides for the adjustment of the Internal Revenue Allotment (IRA) in the event the 
national government incurs an unmanageable public sector deficit. 
Historically, the national government has consistently incurred deficits of 
With thls provision, the IRA of LGUs may be slashed by 
This could lead to cuts in the local government units' public 
unmanageable proportions. 
considerable amounts. 
spending and ultimately result to hampered delivery of much-needed public service. 
In order to ensure continuous funding for programs of local government units, this 
Thus, the President is prevented, for any reason, to 
bill proposes to repeal this provision. 
adjust, reduce or put a lien on the IRA. 
This measure further protects local government units from funding restrictions or 
holdback in the event that the national government incurs an unmanageable public sector 
deficit 
It also protects local government units from holdbacks or liens made by the 
Executive Department. 
More importantly, it assures local government units of local 
autonomy-and fiscal %ability as mandated in the Constitution and the Local Government 
Code. 
In view of the foregoing, approval of this bill is e 


,.83 
aTM 
CONGRESS OF THE REPUBLIC ) 
JUL -6 
m i  s a  
OF THE PHIIJIPPINES 
1 
First ReGiar Session 
) 
s
t
 
S E N A T E  
S. BILL NO. 
lntroduced by Senator Ralph G. Recto 
AN ACT 
AMENDING 
THE 
STATUTORY 
PROVISION 
AUTHORIZING 
THE 
PRESIDENT OF THE PHILIPPINES T O  MAKE THE NECESSARY 
ADJUSTMENTS IN THE INTERNAL REVENUE ALLOTMENT OF LOCAL 
GOVERNMENT 
UNITS 
I N  THE EVENT THAT THE NATION& 
GOVERNMENT INCURS AN UNMANAGEABLE PUBLIC SECTOR DEFICIT, 
AMENDING FOR THE PURPOSE SECTION 284 OF REPUBLIC ACT NO. 7160 
Be it enacted 8 
the Senate and House of Representatives athe Philippines in Congress assembled; 
1 
2 
3 
4 
5 
SECTION 1. Section 284 of Republic Act No. 7160, otherwise known as the “Local 
Government Code of 1991” is hereby amended to read as follows: 
“SEC. 284. Allotment ofInternalRevenue Taxes. - Local government units shall 
have a share in the national internal revenue taxes based on the collection of the 
6 
third fiscal year preceding the current fiscal year as follows: 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
(a) 
x x x 
@) x x x  
(c) x x x 
- ~- 
-- 
- 
[Prouided, 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 the Secretary of Finance, Secretary of the 
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 president of the Liga, to make the necessary adjustment in the internal revenue 
allotment of local government units but in no cas’e shall the allotment be less than 
t k t y  percent (30%) of the collection of national internal revenue taxes of the third 
1 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
fiscal year preceding the current fiscal year:] Provided, [un‘bec]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.” 
<- 
-. - 
Sec. 2. 
All laws, d e s  and regulations, decrees, issuances, or any parts thereof 
inconsistent with this Act are hereby repealed or modified accordingly. 
Sec. 3. This Act shall take effect fifteen (15) days after its publication in the O@&l 
Ga@& or in at least two (2) national newspapers of general circulation, whichever .. 
comes 
. 
earlier. 
, 
Appmved,