Sen. Chiz Escudero yesterday said he is in favor of reviewing the rates allotted to local government units in their share of the Internal Revenue Allotment, because the proportions under the Local Government Code may not be responsive to the needs of the changing times, a press release from his office said.

“We should remember that Republic Act 7160 or the Local Government Code was enacted in 1992 and the formula for the respective shares of provinces, cities, municipalities and barangays remain the same up to date. It is time we revisit this and make the proportions more responsive to the needs of LGUs,” Escudero said.

Under RA 7160, the proportions of LGUs in the IRA are: provinces, 23 percent; cities, 23 percent; municipalities, 34 percent; and barangays, 20 percent. Further, the respective shares of these LGUs will be determined by the following: population, 50 percent; land area, 25 percent; and equal share, 25 percent.

Escudero said that although he does not espouse a specific formula for the proportions of the IRA between LGUs, he said that the sharing ratios should be based on the needs of particular localities.

“Do the rates still apply? Perhaps it would be better to focus on who needs more and who needs less from the national government,” he said.

The Philippines is currently composed of 81 provinces, 136 cities, 1,495 municipalities.

Escudero also said he is in favor of increasing the share of LGUs in the IRA under the national budget from 40 percent to 50 percent.

Escudero also said the 10 percent increase in the IRA can also be distributed to LGUs that are efficient in using the funds in developing their respective areas as an incentive, the press release also said.*

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