THE Department of Budget and Management (DBM) has already released P428.62 billion in internal revenue allotment (IRA) to local government units (LGUs) for this year. Budget Secretary Florencio B. Abad said he expects the increase in the IRA will also redound to increases in expenditures for infrastructure and social services in the countryside. Abad added these functions have already been devolved to LGUs and will “allow the government to spread development and reduce poverty throughout the country.”
“On top of the CCT [conditional cash transfer], PhilHealth [Philippine Health Insurance Corp.], and the innovative Bottom-up Budgeting projects, the increase in IRA can only mean more capacity for LGUs to provide social services and local infrastructure projects for local communities,” Abad said in a statement. The IRA is a 10-percent increase from last year’s IRA share of LGUs in the total national government revenues. According to Abad, the current IRA is also more than 60 percent more if compared to the IRA level in 2010, which was only P265.8 billion.
According to the Local Government Code (LGC) of 1991, LGUs shall have a 40-percent share from the taxes collected by the national government during the third fiscal year preceding the current year. This IRA should be automatically released to the LGUs. This is divided among 43,593 LGUs consisting of barangays, municipalities, cities and provinces throughout the country. Abad claims the DBM policy is even better than the policy mandated under the LGC, which mandates that releases be done on a quarterly basis. He based his claim on the DBM’s policy to automatically and comprehensively release the IRA of LGUs at the start of every year, without any conditions or actions required from such LGUs.
Abad also attributed the increase in IRA to more efficient tax collection during the Aquino administration. For the period of January to November 2015, total revenues of the government amounted to P1.945 trillion, according to the Department of Finance (DOF).
Meanwhile, President Aquino said his successor should continue the increases in the budgets for the CCT program, which is another antipoverty program of the national government expected to provide instant assistance to poor Filipinos while giving them incentives to send their children to schools.
At a conference on January 13, Mr. Aquino said the budget for the CCT program increased from P10 billion in 2010 to P62 billion last year. He said the program proved to be effective “in bringing about transformation in the lives of the poorest Filipinos with just a little push from the government.”
From 786,000 households who were beneficiaries of the CCT program, close to 4.4 million Filipino families received the monthly stipends as of last year. For this year, the budget for the CCT program is P62.7 billion to cover 4.6 million households. Mr. Aquino said he hopes the next administration would continue the CCT program. He took note of the policy on using the CCT as an incentive for families to send their children to school that he claims will eventually wean them away from the government’s dole out program as those children graduate high school and become productive citizens.
“One of the key expansions to the CCT program involved covering households with children in high school, based on the finding that those who graduate from high school earn 40 percent more than those who merely attained some elementary education,” Mr. Aquino said. “These same students who are able to attain a higher level of education thanks to the CCT, one day, through their contributions to the economy and through the taxes they remit, will help further break the cycle of poverty, and keep the engines of inclusiveness engaged at full throttle,” the President added.
“In short: through the CCT and other meaningful interventions, we are spurring a virtuous cycle, where empowered Filipinos in turn become the keys through which their fellowmen are likewise empowered.” Mr. Aquino said the latest round of assessments conducted by the National Household Targeting System of the CCT program indicates that almost 1.55 million CCT families, or over 7.7 million, have been lifted out of poverty.
“Given such a development, our National Economic and Development Authority projects the sustained reduction in our poverty incidence in terms of population: from what used to be 26.3 percent in 2009, to anywhere between 18 to 20 percent for 2016,” Mr. Aquino said at the conference organized by the Asian Development Bank.