Where do Kapampangan Taxes Go?

Analyzing Government Statistics

In my practice in scientific software development, I have dealt with all kinds of data. Usually, these data come from the natural and hard sciences. Sometimes, however, I encounter Economic and Financial data. In my wanderings, I stumbled upon the Philippine government's Bureau of Internal Revenue regional collections. A quick look reveals how much the province of Pampanga gets the short end of the stick.

Department of Finance BUREAU OF INTERNAL REVENUE Revenue Collection by Region January to December 2019 (In Million Pesos) Pampanga - 16,468.82

This translates to around Php 6000 paid by every Kapampangan, including children and elderly. One could compare this value with the Pampanga provincial government's budget for 2020.

An ordinance authorizing the Annual Budget of Provincial Government of Pampanga for Fiscal Year 2020 in the amount of Four Billion One Hundred Forty Million Four Hudred Ninety Thousand Four Hundred Fifty One Pesos (Php 4,140,490,451.00) covering the various Expenditures for the operation of the Provincial Government For Fiscal Year 2020 and appropriating the necessary funds for the purpose.

No one needs to be an Economist or Financial Analyst to see how bad this disparity is.

Centralized Misallocations

Even worse, more than half of this budget comes from local revenues - land titles and other special taxes. Angeles City, legally independent from the province, recorded a budget of around 2 billion - again, more than half came from local sources.

Despite the intention under the Constitution and the LGC to liberate the IRA from legislative and executive manipulations, both Congress and the President have devised ways to reduce and withhold the IRA. Romeo Raymond Santos, The Internal Revenue Allotment: A Review of Legislative, Executive and Judicial Decisions, 85 PHIL. L.J. 845, 895 (2011).

The remaining portion comes from Internal Revenue Allotments (IRA) made by the Department of Budget and Management in Manila. Separate allotments go to highly urbanized cities and provincial governments. For the latter, a Provincial Development Council forms to assess which cities and municipalities receive what portion of the allotment. Cities like Mabalacat and San Fernando receive a lion's share of the allotment - the latter received more than 700 million in 2019. This arrangement effectively means that while most local government budgets come from local sources, most Kapampangan taxes go to the National Government. No one would believe that the executive departments down south would efficiently, quickly, and accurately assess the needs of Kapampangans as much as other areas. More than Federalism, independence will allow proper allocation of Kapampangan resources - whether through free enterprise or collective agreements on taxes.

Accompanying Video

Sources:

• Bureau of Local Government Finance (BLGF) - IRA Utilization https://blgf.gov.ph/wp-content/upload...
  

• BLGF - LGU Fiscal Data https://blgf.gov.ph/lgu-fiscal-data/
  

• Bureau of Internal Revenue - Regional Collection https://www.bir.gov.ph/index.php/tran...
  

• Romeo Raymond Santos, The Internal Revenue Allotment: A Review of Legislative, Executive and Judicial Decisions, 85 PHIL. L.J. 845 (2011). http://plj.upd.edu.ph/wp-content/uplo...
  

• Ordinance No. 748 of 2020 https://www.pampanga.gov.ph/index.php...
  

• City of San Fernando Local Expenditure Program https://cityofsanfernando.gov.ph/file...
  

• Budget Operations Manual for LGUs https://www.dbm.gov.ph/wp-content/upl...
  

• Philippine Statistics Authority (PSA) - Pampanga QuickStat June 2018 https://psa.gov.ph/content/pampanga-q...
  

• The "Reactionary" Libertarianism of Frank van Dun https://misesuk.org/2017/08/31/the-re...
  

• Sangil: How do they prepare the budget? https://www.sunstar.com.ph/article/18...