THE total current operating income of the local government units (LGUs), mainly provinces, cities, and municipalities, rose by 19.4 percent in the first quarter of 2022 to P319.42 billion compared to the P267.55 billion reported in the same period of 2021, as a result of this year’s kick-off implementation of the Supreme Court (SC) ruling that increased their share in national tax collections.
Preliminary data gathered by the Bureau of Local Government Finance (BLGF) from the financial reports of all local treasurers for the first quarter show that their sources of revenues from external sources reached P184.45 billion or 58 percent of their total current operating income, while the share of local sources, such as the collection of local taxes and fees, amounted to P134.97 billion or 42 percent.
Under the SC ruling, LGUs get a bigger share in the collections of national taxes, with the high court stating that their internal revenue allotment (IRA) should come from 40 percent of all national taxes collected by the Bureaus of Internal Revenue (BIR) and of Customs.
Under the old system, the IRA share of LGUs came only from the taxes collected by the BIR.
The implementation of the SC ruling started this year, with the IRA renamed as the National Tax Allotment (NTA).
Thus, for the first quarter of 2022, the increase in the current operating income of LGUs, excluding the barangays, is mostly attributed to the NTA, which totaled P180.12 billion or 31-percent more than the P137.55 billion they received for the same period last year, said BLGF Executive Director Niño Raymond Alvina in his report to Finance Secretary Carlos Dominguez III.
Overall, when the barangays’ shares are included in the amount of P47.95 billion, the total NTA received by all LGUs during the period increased by 32 percent, from P172.33 billion in the first quarter of 2021 to P228.07 billion in the first quarter of 2022.
Citing preliminary data, Alvina said that LGU revenue generation showed positive signs of recovery in the first quarter of 2022, as locally sourced revenues (LSRs) reached P134.97 billion, representing an increase of 8.6 percent from P124.27 billion in the same period last year.
Last year, the total current operating income of LGUs amounted to P871.3 billion, which was 4.48 percent higher than the P833.92 billion reported in 2020.
Alvina said the increase was mostly because of the growth in the IRA, which accounted for P554.02 billion of the current operating income of LGUs. This was 7.35 percent higher than 2020’s P516.07 billion.
As of Fiscal Year 2021, the amount of available LGU funds left for operations was P263.12 billion, which represents the estimated free cash of LGUs after deducting prior year accounts payables, obligations not yet due and demandable, and obligations for projects charged to continuing appropriations, Alvina said.
Cities have the biggest available funds at P102.27 billion; followed by municipalities with P97.82 billion; and provinces, P63.13 billion.
