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Municipalities struggle with meager funds amid COVID-19 pandemic

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As municipalities are not as resource-rich—especially with taxpayers’ money—unlike their city counterparts, the COVID-19 crisis is pushing the country’s 1,488 towns to…
As municipalities are not as resource-rich—especially with taxpayers’ money—unlike their city counterparts, the COVID-19 crisis is pushing the country’s 1,488 towns to the limit.
“The COVID-19 pandemic stretching to two months to date has grossly impacted municipal LGUs [local government units] throughout the country. Our municipal mayors are weary and worried of the immediate and long-term health, economic, and social consequences of this health crisis,” League of Municipalities of the Philippines (LMP) national president Luis “Chavit” Singson told the Inquirer.
“With very limited human and logistical resources, local funds are also dwindling fast. Our municipal mayors have to be creatively resourceful in order to more efficiently manage the pandemic and respond to the needs of their constituents,” added Singson, who is currently the mayor of Narvacan town in Ilocos Sur, where he used to be provincial governor.
“When President Duterte placed the whole country under the state of a health emergency, municipalities were authorized to utilize our calamity funds equivalent to 5 percent of our respective internal revenue allotment (IRA) for the year,” Singson said, referring to LGUs’ share from national internal revenue tax collections.
This year’s total IRA shares based on the Bureau of Internal Revenue’s (BIR) actual collection of national internal revenue taxes in 2017 reached P648.9 billion across 43,618 LGUs, including provinces, cities, municipalities, and barangays.
For 2020, the Department of Budget and Management (DBM) had allotted P220.6 billion in IRA to municipalities.
“We must understand that not all municipalities are similarly situated. First- to third-class municipalities are a little off in terms of IRA share and local revenues. However, fourth- to sixth-class municipalities are purely IRA-dependent. They have very meager local incomes and their IRA shares are lower,” Singson said.
The Philippine Statistics Authority (PSA) defined first-class municipalities with an average annual income of P55 million or more; second class, P45-54 million; third class, P35-44 million; fourth class, P25-34 million; fifth class, P15-24 million; and sixth class, below P15 million.
“For example, a sixth-class municipality with a P60-million annual IRA has only P3 million for calamity fund that can be utilized for disaster response. But considering that the municipality is IRA-dependent, that municipality has only about P1 million available funds—as of April—for the medical needs and relief packs of the locality. Imagine if this municipality has 2,000 households, then the mayor can only allot P500 per household for the past two months,” Singson explained.
As such, Singson welcomed the so-called “Bayanihan” grants released by the DBM to provinces, cities, and municipalities as additional funding for their respective local COVID-19 response initiatives.

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