Philippines: IRA ruling appeal looms as DBM says 2019 budget priorities set

  • The Government will ask the Supreme Court to reconsider its ruling expanding local government units’ (LGUs) share of the national government’s revenue, saying that the 2019 budget priorities have been set.
  • Budget Secretary Benjamin E. Diokno said that the high court’s decision was “too late to insert” after President Rodrigo R. Duterte submitted to Congress on 23 Jul 18 the proposed budget approved by the Cabinet.
  • He said that the DBM has yet to formally receive a copy of the Supreme Court resolution, which was released to the media on 23 Jul 18.
  • Mr. Diokno said the DBM has insufficient time to reconfigure the 2019 budget, given the short 30-day window for the budget submission beginning with the resumption of the Congressional session on 23 Jul 18.
  • The court in its final resolution ordered the “automatic release without further action” of LGUs’ “just share” of all national government revenue, including taxes collected by the Bureau of Customs. It also ruled that the national government should implement the ruling prospectively.
  • Mr. Diokno said that complying with the ruling would mean an additional PHP160bn for LGUs in the form of Internal Revenue Allotments (IRAs) on top of about PHP600bn initially budgeted for 2019.
  • Mr. Diokno has said that had the ruling been interpreted to be retroactive from 1992, it would cost the government at least PHP1.2tr. Mr. Diokno said that the government will not implement the order until such time that the SC has responded to the motion for reconsideration.
  • Mr. Diokno said that the government will devolve some functions to LGUs, especially conditional cash transfers (CCTs), farm-to-market roads, and local health care programs, as well as the corresponding budget for these functions, doing away with the need to spend more.

External Link: