Senate OKs bill lifting cap on LGU use of proceeds from power sources

The Senate on Monday approved on third and final reading a measure lifting the restriction on local government units’ (LGUs) use of proceeds from the development and utilization of energy sources.

Senate Bill No. 1789 seeks to amend the provisions of the Local Government Code of 1991, or Republic Act No. 7160, so that it will enhance the use of national wealth for developmental purposes of the LGUs.

Under section 241 of the Local Government Code, “at least 80 percent of the proceeds derived from the development and utilization of hydrothermal, geothermal, and other sources of energy shall be applied solely to lower the cost of electricity in the LGU where a source of energy is located.”

“The restriction has not only limited the efficient use of the resource but may have led to non-priority projects aimed at lowering the cost of electricity if only to utilize the funds,” Sen. Sonny Angara, who sponsored the bill, said in a statement.

The senator had pushed for the LGUs to be allowed to tap the proceeds of these energy sources to fund what they consider as critical projects or activities they’ve prioritized in their medium-term investment and annual investment programs.

Lifting the said proviso, according to Angara, will allow the LGU, through its council, to have full control over how their share from the national wealth will be spent.

“Adhikain ng panukalang ito ang ganap na buhayin ang ‘fiscal autonomy’ na iginagawad ng Local Government Code sa mga LGU, particular ang mga may hydrothermal, geothermal at ibang sources of energy,” Angara said.

(The goal of this measure is to fully implement fiscal autonomy, as provided for in the Local Government Code, to LGUs, particulary those who have hydrothermal, geothermala and other energy sources.)

“Ano nga naman ang saysay ng pagbukod ng hati mula sa pambansang yaman o national wealth para sa mga LGUs kung hindi nila matutukoy kung papaano ito gagamitin at gagastusin?” he added.

(What is the use of sharing the national wealth to LGUs if they won’t have a say on how the funds are spent?) /ee