‘IRA distribution woes to bug next administration'

MANILA, Philippines — The next president and local officials should be capable of dealing with the crunch in the expected internal revenue allotments (IRA) or budgets of local government units next year, even though they would be receiving more funds because of the Mandanas ruling, Sorsogon Gov. Francis Escudero said.

Escudero, who is eyeing a Senate seat in next year’s polls, said while the IRA that would be transferred to local government units mandated by the Supreme Court ruling would be doubled, these would not be enough to sustain LGUs due to the economic recession brought by the COVID-19 pandemic.

“The IRA is computed three years prior (devolution), so when 2023 comes, that is based on the internal revenue of the government during the year 2020, which we all know was when the economy dropped by 15 percent,” Escudero told “The Chiefs” on Cignal TV’s One News the other night.

“So when the Mandanas has elevated the IRA by the year 2022 by three percent, when 2023 comes, the IRA would be crashing by not lower than 15 to three percent based on some studies by the NEDA (National Economic and Development Authority), so the problem of the LGU and the next President is how are they going to address the needs of LGUs?” he added.

In 2018, the Supreme Court ruled that LGUs are entitled to a share of all national taxes and not just the national internal revenue taxes, which means local governments would see a dramatic rise in their budgets.

With this increase, the LGUs can take on some of the services only the national government can provide to constituents.

Escudero said if the national government is unable to train LGUs on how to spend the additional IRA they would be receiving next year, it’s possible that they would not be able to pay the salaries of tenured local government employees.

“Will the national government be able to borrow money to fill the inadequacies of the IRA? Are the LGUs being trained by the DILG (Department of the Interior and Local Government) or DBM (Department of Budget and Management) to tell them they should not spend their additional IRA in recurring expenditures because they might not be able to pay permanent employees come 2023?” he said.

“These are some of the things that presidential aspirants should be thinking about and preparing for because once they are seated, the budget call would have already been over,” he added.