Professional Documents
Culture Documents
The Local Government Code also allows the President to interfere in local fiscal matters,
provided that certain requisites are met: (1) an unmanaged public sector deficit of the national
government; (2) consultations with the presiding officers of the Senate and the House of
Representatives and the presidents of the various local leagues; (3) the corresponding
recommendation of the secretaries of the Department of Finance, Interior and Local Government,
and Budget and Management; and (4) any adjustment in the allotment shall in no case be less
than 30% of the collection of national internal revenue taxes of the third fiscal year preceding the
current one.
Section 4 of AO 372 cannot be upheld. A basic feature of local fiscal autonomy is the automatic
release of the shares of LGUs in the national internal revenue. This is mandated by the
Constitution and the Local Government Code. Section 4 which orders the withholding of 10% of
the LGUs IRA clearly contravenes the Constitution and the law.