Authority of the City Government of Valenzuela to Receive IRAs of Barangay Canumay

May 30, 2012 DILG LEGAL OPINION NO. 036-12 Mayor Sherwin Gatchalian Lungsod ng Valenzuela Dear Mayor Gatchalian : This has reference to your letter dated 20 April 2012 asking the Department's legal opinion on this issue and we quote: "Is the City Government of Valenzuela authorized to receive said (Internal Revenue) allotment (of Barangay Canumay) and should the same be reverted to the city as part of its general fund?" IEAacT Per your letter, you represented that in November 2012, the Sangguniang Panlungsod of Valenzuela City passed an Ordinance dividing Barangay Canumay into Barangay Canumay West and Barangay Canumay East. Said Ordinance was ratified on 03 March 2012 by the majority of the constituents of Barangay Canumay. Hence, you are now asking our legal opinion regarding the Internal Revenue Allotment (IRA) of Barangay Canumay, specifically on whether the City Government of Valenzuela is authorized to receive the IRA of Barangay Canumay and should the same be reverted to the city as part of its general fund. Your query was prompted by the last part of Section 285 of the Local Government Code of 1991 (RA 7160) which states and we quote: "...Provided, finally, That the financial requirements of barangays created by local government units after the effectivity of this Code shall be the responsibility of the local government unit concerned." Before we answer your query, let it be noted the phrase "local government unit concerned" in the aforequoted provision of Section 285 of the Local Government Code of 1991 was interpreted by this Department (DILG Opinion No. 34, series of 2004) and the Department of Budget and Management (Memorandum for DBM RO XI dated 29 October 1997 in the case of Barangay Poblacion Dos of Bansalan, Davao del Sur) as the "local government unit which through an ordinance officially created the particular barangay". Thus, in the case at hand, the City Government of Valenzuela, as the local government unit which created Barangay Canumay East and Barangay Canumay West, shall shoulder the financial requirements of these two (2) barangays. EIDTAa Coming now to your query, as already mentioned, the Ordinance which divided Barangay Canumay and thus created Barangay Canumay East and Barangay Canumay West, was ratified by the majority of the constituents of Barangay Canumay on 03 March 2012. On this date of ratification, it can be reasonably presumed that the DBM has already computed the IRA allotted for Barangay Canumay (the original barangay ) for the fiscal year 2012. Such being the case, we are of the view that the IRA allotted for the original barangay (Barangay Canumay) for FY 2012 should still be automatically released to it in accordance with Section 286 of the Local Government Code of 1991, not to the City Government of Valenzuela. The original barangay (Barangay Canumay) shall thereafter make the necessary allocation between the two (2) newly created barangays ,Barangay Canumay East and Barangay Canumay West, with the end view that the basic services in both barangays will be delivered. We are of the further view that it is improper to say that the "IRA allocated for Barangay Canumay" will be received by and reverted to the City Government of Valenzuela since the words "received" and "reversion" both imply that the funds under consideration are owned or at least allocated to the City Government. While Barangay Canumay is within the territorial jurisdiction of Valenzuela City and that the latter LGU created the former and will thus shoulder the financial requirements of these two (2) barangays ,such responsibility of Valenzuela City to shoulder the financial requirements of the two (2) barangays shall commence on Fiscal Year 2013 .The financial requirements of Barangays Canumay East and West for FY 2012 shall still be shouldered by the IRA allocated for the original barangay which is Barangay Canumay. We hope we have guided you accordingly. Very truly yours, (SGD.) JESUS B. DOQUE IV Director III