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Manila Bulletin devider Business devider DBM assures higher IRAs by 2022

DBM assures higher IRAs by 2022

Published Apr 30, 2021 12:00 pm

The Department of Budget and Management (DBM) assured that it will implement next year the Supreme Court ruling transferring more funds to local government units (LGUs), which the Asian Development (ADB) warned could disrupt public spending.


Budget Secretary Wendel E. Avisado said they already drafted an executive order (EO) devolving some national government functions to LGUs beginning in 2022 to match the latter’s bigger share of tax revenues.

Budget Secretary Wendel E. Avisado (Photo credit: https://www.dbm.gov.ph)

Starting next year, the national government will increase by 28 percent, or P239 billion, the internal revenue allotments (IRA) of LGUs. This is in compliance with the high court ruling expanding the share of LGUs in national revenue.

Avisado said the proposed EO on the devolution of functions has been submitted last January and is now with President Duterte awaiting his signature.

“This executive order, as proposed, will clarify the delineation of the national government and local government roles and responsibilities,” the budget chief said.


In addition, the draft EO provides guidelines for the preparation of the devolution transition plans as well as the mechanics for the proposed growth equity fund, among many others, Avisado said.

“We are assured that the proposed executive order will be signed in due time,” the official said.

Meanwhile, the ADB flagged the increased budget share and responsibilities of LGUs as “another risk” to the country’s economic recovery from the impact of the coronavirus pandemic.

The Manila-based multilateral institutions said the devolution of functions could cause “possible disruption to government programs.”


ADB noted that there will be a transition period during the devolution process, which could delay the implementation of local infrastructure projects, such as school buildings and social protection programs.

“The concern is that transitioning these functions may temporarily disrupt the implementation of public programs,” the bank said. “Transition plans being prepared by the government will be crucial to facilitate the devolution and delineation of functions.”


IRAs are the main source of revenue for many LGUs. Under the Local Government Code, 40 percent of the national government’s internal revenue three years preceding the current fiscal year, should automatically be earmarked to LGUs.

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ADB LUGs Budget Secretary Wendel E. Avisado IRAs DBM
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