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Proposed bill on IRA a disadvantage for non-agricultural LGUs, think tank

The country's leading think tank has given a thumbs up to the proposal by local government entities (LGUs) to allocate 10 percent of their internal revenue allocation (IRA) to agriculture when the Garcia-Mandanas ruling is completed next year.  The Philippine Institute for Development Studies (PIDS) said the proposal, submitted under Senate Proposal 1138, could reduce the efficiency of non-agricultural LGUs, adding that it would limit LGU's spending on industries that they would like to prioritize.

The Philippine Institute for Development Studies says the proposed measure to allocate internal revenue to local government units could be a disadvantage for most LGUs that have less agricultural land like those located in urban areas. File photo

MANILA, Philippines – The country’s leading think tank has thumbs up on the proposal by local government entities (LGUs) to allocate 10 percent of their internal revenue allocation (IRA) to agriculture when the Garcia-Mandanas ruling is completed next year.

The Philippine Institute for Development Studies (PIDS) said the proposal, submitted under Senate Proposal 1138, could reduce the efficiency of non-agricultural LGUs, adding that it would limit LGU’s spending on industries that they would like to prioritize.

“[B]due to the different profiles and expenses, revenue collection and priorities for investing in programming LGUs, earmarking LGU funds for agricultural development would limit what LGUs can spend on. The inefficiency would be more pronounced for LGUs that do not have an agricultural sector like those that are urban, ”said PIDS.

Based on the country’s latest census report, about 51 percent of the population lives in urban areas from 2015. Considered highly urbanized regions were the National Capital Region, Calabarzon, Davao, Central Luzon and the Soccsksargen.

Under the Mandanas-Garcia decision, LGUs would be entitled to a share of all national taxes, thereby transferring the functions of several government agencies.

Estimates showed that LGUs may receive P986.44 billion next year against this year’s allocation of P649 billion.

Industry groups, legislators as well as the Ministry of Agriculture have asked for commitments from LGUs to prioritize their agricultural industries to ensure that food safety will not be equated once the decision is implemented.

Despite the think tank’s reservations about the bill, it emphasized that the measure “justifies the importance of the agricultural sector and its role in development, poverty reduction and food security.”

It also stressed that there is no one-size-fits-all framework for LGUs, as different rural communities also have different opportunities, needs and even ambitions.

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