Did budget dep't withhold LGU funds in 2013?

MANILA, Philippines – Members of the opposition claim the Aquino government, through the budget department, withheld in 2013 the P302.8 billion pesos in Internal Revenue Allotment, or the share of local government unit (LGUs) in the national tax collection. 

Vice President Jejomar Binay, in his speech on Tuesday, June 23, alleged that certain officials are behind the move to deny LGUs their IRA. (READ: Binay: I resigned to protest 'crooked, failed' gov't)

Hindi nila pinananagot ang mga opisyal na pumigil sa pagpapalabas ng 2013 Internal Revenue Allotment ng mga pamahalaang lokal, samantalang alam nila na karamihan sa ating mga bayan at barangay ay umaasa lang sa IRA,” Binay said in his speech.

(Despite knowing that the barangays and towns greatly depend on the IRA to survive, they do not hold accountable the officials who prevented the release of the 2013 IRA to local government units.)

Like Binay, Senate committee on local government chairman Ferdinand “Bongbong” Marcos Jr, protests the same issue, saying the government “failed to release” the amount.

But did the Department of Budget and Management (DBM) really do so?

COA: DBM violated constitution

Rappler looked at the 2013 Commission on Audit report published on its website.

The 2013 COA report, released in May, revealed that although DBM released the questionable P302.8 billion IRA in 2013, it did so in violation of the law.

The COA says the amount was not released automatically, in violation of the 1987 Constitution.

The 2013 COA report states, "The IRA shares for CY [Calendar Year] 2013 of the LGUs in the national taxes amounting to P302,806,286,459.00 were not automatically released to LGUs but maintained under DBM Administered Funds (Fund 103) in violation of Section 6, Article X, General Provisions of the 1987 Philippine Constitution."

Section 6, Article X, General Provisions of the 1987 Constitution states that: "Local government units shall have a just share, as determined by law, in the national taxes which shall be automatically released to them."

In the same report, DBM defended its action, citing an executive order that, simply put, authorizes it to release IRAs on its own terms.

"The administration and release by the DBM of the share of LGUs in the national taxes is anchored in Section 10 (2), Chapter 4, Title XVII of Executive Order No. 292, which provides in part that 'the Local Government Budget Bureau shall recommend and effect the release of National Assistance for Local Government Units (NALGU) funds xxx.' The maintenance of the DBM Fund 103 for release to LGUs is necessary to segregate the funds intended to LGUs with that of the funds for its regular operations," DBM said.

The COA, however, sided with the Constitution. It is, after all, the supreme law of the land.

“There is no legal provision mandating that DBM shall administer the LGUs' share in the national taxes. What is clearly expressed in the Constitution and GAAs is that these funds shall be automatically appropriated for and released to the LGUs,” COA said in its 2013 report.

COA then advised DBM to “study the possibility of directly releasing IRA to LGUs and for the LGUs to maintain separate books of accounts and submit Financial Accountability Reports (FARs) so that their expenses can be included in the overall expenditures in the national government.”

DBM: We committed no violation

In a text message to Rappler, Budget Secretary Florencio Abad maintained “there was no violation of automatic release,” saying they did so on January 10, 2013.

By automatic release, Abad meant there were “no conditions and no acts were required from LGUs” before the release of funds.

Abad believes the opposition “has been misleading the public about this issue.” 

The secretary further said DBM “did better than what the Local Government Code mandates, which requires release ‘on a quarterly basis.’”

“Instead, we released comprehensively or 100%. If we in fact withheld the IRA in 2013, you would have heard protests from LGUs all over the country,” Abad said. – Rappler.com 


Camille Elemia

Camille Elemia is Rappler's lead reporter for media, disinformation, and democracy. She won an ILO award in 2017. She received the prestigious Fulbright-Hubert Humphrey fellowship in 2019, allowing her to further study media and politics in the US. Email camille.elemia@rappler.com