Due to higher internal revenue allotment (IRA) and improved local tax collections, the total current operating income of the local government units (LGUs) rose from P738.54 billion in 2019 to P825.2 billion last year, representing an increase of P86.66 billion or 12 percent.
The increase in the 2020 current operating income of provinces, cities, and municipalities is mostly attributed to the 18-percent growth in the external revenue sources of LGUs, including the IRA, which amounted to P509.65 billion, or 11 percent more than the P457.15 billion they received in 2019, the Bureau of Local Government Finance (BLGF) said.
BLGF Executive Director Niño Raymond Alvina said that although local tax collections increased in 2020 to P189.86 billion from P183.46 billion in 2019, their share in the current operating income of LGUs declined to 23 percent in 2020 from 25 percent in 2019.
The share of non-tax revenues, which amounted to P61.79 billion in 2020, also decreased to 7 percent compared to 10 percent in 2019 when collections reached P70.36 billion.
Alvina said LGUs’ dependence on external sources, comprised of IRA and other transfers to the LGUs, as a ratio of their operating income last year, has increased to 70 percent as compared to 66 percent in 2019.