Question & AnswerQ&A (PRESIDENTIAL DECREE NO. 144)
The main purpose of Presidential Decree No. 144 is to revise the present system of national internal revenue allotments to local governments in order to establish a more equitable system of distribution, introduce developmental concepts, and improve administrative efficiency.
Twenty percent (20%) of the collections from national internal revenue taxes, not otherwise accruing to special funds and special accounts in the general fund, shall accrue to local governments.
The 20% allotment is distributed as follows: 30% to provinces, 45% to municipalities, and 25% to cities.
The share of each local government unit is determined based on the following formula: 70% based on population, 20% based on land area, and 10% on equal sharing.
During fiscal years 1974, 1975, and 1976, the annual allotment of any local government shall not increase by more than 15% nor decrease by more than 50% of its actual allotment during the fiscal year 1970-71.
The Barrio Development Fund is created from the ten percent shares of the barrios in real estate tax collections under Republic Act No. 3590 and annual contributions from each province, city, and municipality not exceeding P500 per barrio. It is used solely for community development projects.
The Provincial Treasurer is the custodian of the Barrio Development Fund and maintains a special account. Releases of the fund are made through the Municipal Treasurer who is responsible for proper disbursement and accounting.
Each province, city, and municipality must appropriate no less than 20% of its annual allotment for development projects.
The development plans of local government units are subject to the approval of the Secretary of Local Government and Community Development.
An additional Local Government Fund is created, comprising 5% of the collections from national internal revenue taxes. This fund may be released by the President as financial aid to local governments or projects.
This revised allotment system took effect on July 1, 1973.
All laws or parts of laws inconsistent with Presidential Decree No. 144 are revoked or modified accordingly.