Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Philippines

FIFTEENTH CONGRESS
First Regular Session

2482

HOUSE BILL NO.

INTRODUCED BY: HON. MARCELINO “MARCY” R. TEQDORO.

EXPLANATORY NOTE

The Republic of the Philippines shares some problems of low-income countries,
including high poverty. The assessment confirms the multi-faceted nature of Philippine
poverty, including deprivation of access to finance (income, credit), human (education
and health), nature (land, clean air, biodiversity), physical resources (infrastructure and
services), and social resources (trust, reciprocity, cooperation). Much has been said
about the problems that the country is having. Thus, steps to reach an attainable
development should be made in both national and local level.

The bill aims to rationalize the computation of the Internal Revenue Allotment
(IRA) to local government units by taking into account the distribution formula of IRA
under RA no. 7160. Given that some areas in the Philippines encounter a certain level
of poverty, it is proposed that the share of each province, city and municipality shall be
determined on the basis of population and poverty incidence of such area. Moreover,
this bill recognizes that the “equal sharing” undermines the actual objective of the law. It
should be realized that while developed areas are constinously developing, those
underdeveloped are left behind. The gap between the two conditions is presumably
increasing if this situation is not given remedy.

If the factor on poverty incidence will be considered in order to compute for IRA
distribution of LGUs, poorer provinces, cities, municipalities and barangays will acquire
bigger IRA shares. Through this new formula, a more efficient distribution of IRA for
LGUs will result that would augment the local funds for the social and economic
development projects of the needy areas.

From the abovementioned propositions, consideration of this bill is earnestly

sought Van z

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


HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
First Regular Session

2482

House Bill No.

INTRODUCED BY HON. MARCELINO “MARCY” R. TEODORO

AN ACT
RATIONALIZING THE COMPUTATION OF THE INTERNAL REVENUE ALLOTMENT TO
LOCAL GOVERNMENT UNITS (LGUs), AMENDING FOR THE PURPOSE SECTION 285 OF
REPUBLIC ACT NO. 7160, OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OF
1991

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

SECTION 1. Section 285 and 286 of Republic Act No. 7160 are hereby amended as
follows:

“Sec. 285. Allocation to Local Government Units. - The share of local government units in

the intemal revenue allotment shall be allocated in the following manner:

fa) Provinces - Twenty-three percent (23%);
(b) Cities - Twenty-three percent (23%);

(©) Municipalities — [Thirty-four percent (34%)] THIRTY PERCENT (30%);
and

(a) Barangays — [Twenty percent (20%)] TWENTY-FOUR PERCENT (24%):

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%); AND
(b) [Land Area — Twenty-five percent (25%); and ] POVERTY INCIDENCE (50%);
[(¢) Equal sharing - Twenty-five percent (25%)]

Provided, further, That the share of each barangay with a population of not less that one
hundred (100) inhabitants shall not be less that Eighty thousand pesos (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) Xxx

(b) Xxx

(c) On the third year and thereafter:

(1) Population — Sixty percent (60%); and
(2) {Equal Sharing] POVERTY INCIDENCE — Forty Percent (40%):

Provided, finally, That the financial requirements of barangays created by local
government units after the effectivity of this Code shall be the responsibility of the local
government unit concerned.”

SECTION 2. All laws, executive orders, rules, regulations and other issuances
incohsistent with this Act are hereby repealed or modified accordingly.

SECTION 3. This Act shall take effect immediately upon its approval.

Approved,