Palace sticks to SC ruling: No higher IRA for LGUs before 2022

MANILA, Philippines — Higher internal revenue allotment (IRA) for local government units (LGUs) would not be implemented earlier than 2022, Malacañang said Thursday.

Presidential spokesperson Salvador Panelo said the government would suffer from “unmanageable fiscal deficit” if it were to implement the Supreme Court’s ruling in the Mandanas vs. Ochoa case earlier than 2022.

Panelo said the issue was discussed during Wednesday’s Cabinet meeting after Finance Secretary Carlos Dominguez discussed the possible early implementation of the ruling.

“Due to the various commitments of the President to the people, such as the implementation of programs designed to combat criminality and corruption, as well as activities of the national government to promote human development and poverty reduction, to name a few, it was agreed that the adjustment of the IRA may not be feasibly effected during this administration,” Panelo said in a statement. 

Panelo said “there will be an unmanageable fiscal deficit” if the ruling on higher IRA is implemented, adding that “securing loans will be more expensive to the nation as the citizenry will be paying for higher rates.”

“This postponement until fiscal year 2022 of the adjustment of the IRA of LGUs is in accordance with the ruling by the High Court that the expanded basis for calculating the share of local government units in the national taxes will be prospectively effective starting from the 2022 budget cycle pursuant to the doctrine of operative fact,” he added.

The Supreme Court in April this year denied the government’s motion for reconsideration on the original ruling on the IRA entitlement of LGUs.

The original ruling stated that the LGU’s entitlement to IRAs included all government taxes and not just those generated from internal revenue. 

Marinduque Gov. Presbitero J. Velasco, Jr., President of the League of Provinces of the Philippines (LPP) earlier urged President to implement the SC decision “soonest.” /je