MANILA, Philippines — Senator Leila de Lima is seeking an additional budget for local government units (LGUs) by realigning the Metropolitan Manila Development Authority’s (MMDA) share in the Internal Revenue Allotment (IRA).
Under Senate Bill No. 1897, de Lima said that the 1987 Constitution vested LGUs with the power to generate their own revenues through local taxes, fees, and revenues. She added that LGUs were also guaranteed a “just share” in national taxes.
However, De Lima said that legislators had limited the internal revenue allotment (IRA) of LGUs to national internal revenue taxes, which was later challenged in the Supreme Court.
The Supreme Court then ruled that the “just share” of LGUs shall be sourced from “all national taxes and not only national internal revenue taxes, thus LGUs are expected to receive their adjusted IRA by 2022.
“This victory for LGUs cannot be fully enjoyed because a review of status quo implementation of the IRA would reveal that even the Metropolitan Manila Development Authority (MMDA) get a slice in the limited pie – thus significantly reducing the share of each LGU from the scarce resources available,” De Lima said in the bill’s explanatory note.
“This bill proposes the MMDA’s share of the IRA be removed from its Charter in order to guarantee that LGUs shall receive their equitable share of national taxes,” she added.
De Lima said that excising the IRA from MMDA’s funding “is well within reason” since it still has other sources of revenue on top of the annual budget appropriation it is receiving.
“It can be gleaned from the foregoing that the MMDA seems to have been receiving its share of the IRA, which should be reserved exclusively in the LGUs by virtue of the devolution under the Constitution,” De Lima said.
“Granting the MMDA with an IRA diminishes the constitutionally guaranteed right of LGUs of their just share of national taxes, and undermines the principles of equity and local autonomy espoused by political decentralization and enshrined in the 1987 Constitution,” the senator added.
Further, De Lima said that MMDA’s funds should be confined to appropriations, similar to other administrative agencies in the government.
“This is not to undermine the contributions of the MMDA in managing the National Capital Region. It is respectfully submitted that the funds that MMDA requires to effectively carry out their mandate must be duly appropriated,” De Lima said.
“However, to award this agency with its own share of IRA would be to perpetuate a legal anomaly that should be duly corrected by legislation,” she added.