Unlike before the 1991 Local Government Code (R.A. 7160), local government units (LGUs) nowadays have an automatic budget allocation called the internal revenue allotment popularly known as IRA. According to Section 285 of the LGC, the share of each LGU on the IRA is determined by the following formula:
a. Population – Fifty percent (50%);
b. Land Area – Twenty-five percent (25%); and
c. Equal sharing – Twenty-five percent (25%)
Between fiscal years (FYs) 2001 and 2008, Bicol provinces have noted an increasing share of IRA the highest of which is consistently displayed by the province of Camarines Sur. This is not surprising because ever since, Camarines Sur not only has the largest population but it also has the largest land area among the six provinces in the Bicol Region. Albay ranks second followed by Masbate, Sorsogon, Camarines Norte and Catanduanes.
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The September 27, 2008 editorial of the Philippine Daily Inquirer entitled “Plugging the Leak” gave us an insight on some of the realities surrounding the budget process of the country. It implied that while the “power of the purse” remains with the Congress, the “power over the contents of the purse”, the way and how much should be spent where, still remains with the President.
The editorial postulates that the problems affecting the budget process can be minimized or even eradicated if the Congress will provide conditions for budget spending such as ‘disallowing the use of “savings” for rankly political purposes’. But while this idea is legally feasible, the innovations made by the present administration in controlling the whole budget process from planning to execution has made the existing laws obsolete and even inutile particularly on the aspect of checks and balances.
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