Stop using IRA to fund borrowings, LGUs told

Isabela Rep. Giorgidi Aggabao INQUIRER FILE PHOTO

MANILA, Philippines—Provinces, cities and towns should stop using their internal revenue allotment (IRA) or their share of state taxes to fuel their borrowing sprees.

Deputy Speaker and Isabela Rep. Giorgidi Aggabao has filed a bill warning against the local government units’ (LGUs) use of their IRA as loan collateral, which he claimed has hampered their operations and buried them in unnecessary debt.

“The practice of using the IRA as collateral for loan obligations effectively ties up a portion of the IRA, thus negating the very purpose of the allotment. There results a mismatch in funds to support the costs of mandated functions, thereby resulting in delayed payment of salaries and wages, operating expenses and accommodation of arrears,” said Aggabao.

Aggabao said his proposal would ensure that the IRAs would be adequate to cover the expenditure functions assigned to the LGUs under Republic Act No. 7160 or the Local Government Code of 1991. Gil C. Cabacungan