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Manila Bulletin devider Business devider Mandating LGUs to allot 10% of their IRA will be a challenge

Mandating LGUs to allot 10% of their IRA will be a challenge

Published Jul 7, 2021 12:36 pm

Philippine Institute for Development Studies (PIDS) recommended against the proposal to mandate local government units (LGUs) to allot 10 percent of their internal revenue allotment (IRA) to the agriculture sector starting next year.

“ is not recommended since not all LGUs have agriculture and fisheries sectors,” said a study published by PIDS and was prepared by University of the Philippines (UP) Assistant Professor Justine D. Sicat.

“ could lead to inefficient use of resources because of the crowding out of other priorities of such LGUs,” it added.

This is in reaction to Senate Bill (SB) 1138 or the proposed Local Government Agriculture Development Act, which was filed by Senator Cynthia Villar in November 2019 and is now being pushed for anew amid the forthcoming implementation of the Mandanas-Garcia ruling.

If passed, SB 1137 will require LGUs to set aside 10 percent of their IRA from the national government for agriculture.

The Madanas-Garcia ruling, on the other hand, ordered that LGUs should get a share of all national taxes, not only those collected by the Bureau of Internal Revenue (BIR). The order will increase the IRA allotment of LGUs to P1.08 trillion.

In the study, PIDS said that while SB 1138 “rightly grounds the importance of the agricultural sector and its role in development, poverty reduction and food security”, it will result in inefficiencies when it comes to the fund disbursement among some LGUs.

“With this, because of the varied profiles and expenditure, revenue-raising, and investment programming priorities of LGUs, earmarking LGU funds for agricultural development would limit what LGUs can spend on,” it further said.

In June, food security advocacy group Tugon Kabuhayan urged LGUs to invest further in municipal fisheries and improve the capabilities of small fishermen using their respective IRA allotment.

To be specific, Tugon Kabuhayan suggested the distribution of good quality vessels to municipal fisherfolks, saying that it will help upgrade the municipal fisherfolk’s productivity.

Based on the group's estimate, the total cost to build the entire vessel with the gear is less than half a million pesos, and the cost to upgrade and rehabilitate as many 24,548 or 10 percent of the registered municipal fishing vessel in the country is around P11.046 billion to P12.28 billion.

Tugon Kabuhayan said this is money well spent considering that each boat has the potential of catching 75,000 kilos in 150 days. If sold at P25.00 per kilo, the earnings will amount to P1.87 million in the span of five months.

Related Tags

Philippine Institute for Development Studies (PIDS) agriculture Mandanas-Garcia Ruling local government units (LGUs)
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