Senate OKs bill lifting restrictions on LGUs' use of proceeds from energy

A proposal lifting the restriction on the local government units' (LGUs) use of proceeds from development and utilization of energy sources, effectively increasing their funds, was approved in the Senate on third and final reading Monday.

Senate Bill No. 1789 introduced by Sen. Sonny Angara sought an amendment in the provisions of RA 7160 or the Local Government Code of 1991 enhancing the use of national wealth for the developmental purposes of the LGUs.

Section 294 of the Local Government Code states that "at least 80 percent of the proceeds derived from the development and utilization of hydrothermal, geothermal and other sources of energy shall be applied solely to lower the cost of electricity in the LGU where a source of energy is located."

"The restriction has not only limited the efficient use of the resource but may have led to non-priority projects aimed at lowering the cost of electricity if only to utilize the funds," the senator, also sponsor of the bill, said.

Angara pushed to have the proceeds from such collections tapped by LGUs to fund what they consider as critical projects, activities identified and prioritized in their medium-term investment program and annual investment program.

In moving for the lifting of the said proviso, Angara said this will allow the LGU, through its council or Sanggunian, to have full control over how their share from the national wealth will be spent.

"Adhikain ng panukalang ito ang ganap na buhayin ang 'fiscal autonomy' na iginagawad ng Local Government Code sa mga LGU, particular ang mga may hydrothermal, geothermal at ibang sources of energy. Ano nga naman ang saysay ng pagbukod ng hati mula sa pambansang yaman o national wealth para sa mga LGUs kung hindi nila matutukoy kung papaano ito gagamitin at gagastusin?" he pointed out.