AN EXTRA P4 billion has been set aside to pay for the 40-percent share of local government units in the annual income derived by the National Treasury from the harvest of mineral deposits and energy reserves in their areas, a lawmaker said on Saturday.
“The new money is provided for in the P3.767-trillion budget for 2018, and will be handed out mainly to the LGUs of provinces, cities, municipalities and barangays that abound in metallic and coal mining activities that generate earnings for the national government,” said Makati City Rep. Luis Campos Jr., a deputy minority leader.
“The fresh funding is on top of the regular internal revenue allotments due the beneficiary LGUs,” Campos said.
Over the last five years, Campos said LGUs received an annual average of P3.4 billion as their combined cut of the proceeds “from the utilization and development of the national wealth within their jurisdictions,” as required by law and the 1987 Constitution.
The budget itself does not specify the recipient LGUs and their corresponding allocations, as these are still subject to verification of actual collections and remittances, Campos said.
However, based on Department of Budget and Management records, Campos said LGUs in Western Visayas and Caraga took the largest portions of national government income from coal and metallic mining activities, respectively in 2016.
Campos said LGUs in Western Visayas received P1.81 billion last year, mainly because Semirara Mining and Power Corp. runs the country’s largest coal mine in an island that forms part of the Municipality of Caluya in Antique.
LGUs in Caraga, which hosts several mining projects that produce nickel and other mineral commodities, received P100.5 million last year, the opposition lawmaker said.
Under the Local Government Code of 1991, LGUs are entitled to 40 percent of the gross earnings from “mining taxes, royalties from mineral reservations, forestry charges, and fees and revenues collected from energy resources.”
Under the law, once the LGUs receive their shares, they have to appropriate the funds to finance local development and livelihood projects.
However, in the case of LGUs that obtain their shares from the extraction of hydrothermal, geothermal and other energy assets, they have to spend at least 80 percent of the money solely to reduce the cost of electricity in the areas that supplied the resources.