Geothermal tax share to be used for Leyte’s school building program

By PMRC Leyte
June 10, 2009

TACLOBAN CITY  –  With the Philippine National Oil Company reportedly set to pay its royalty tax share amounting to more or less P450 million to local government units in Leyte soon, Gov. Carlos Jericho Petilla said, the province is going to devise a school building program where its provincial share would go.

Gov. Petilla said for several years now, they have been urging the geothermal company to pay their royalty taxes to the province, the host municipality and barangay and has even taken matters to the court to determine how much is really owed to the respective local government units.

Under Section 294 of Republic Act 7160 or the Local Government Code of 1991, provides that 45 percent of the royalties from the exploitation of natural resources should go to towns, 35 percent to barangays and 35 percent to the province.

Should the payment of these royalty shares go through in the latter part of the year, the governor disclosed the province would utilize the tax share in a school building program that would address the classrooms problem of many public elementary and high schools in the province.

“The plan is to devise a school building program where those that would be prioritized are schools lacking in classrooms then those that are badly needing of repairs,” Gov. Petilla said.

It can be recalled that in the last visit of President Gloria Macapagal-Arroyo to the province during the latter’s hosting of the Palarong Pambansa 2009, the President announced that the royalty shares of the local government units where the sources of the geothermal power generation have been determined and will soon be released.

The Department of Budget and Management has computed royalty tax shares which will be released to the host local government units after President Arroyo earlier ordered the DBM together with the Department of Energy (DoE), Department of Finance (DoF) and the Department of Interior and Local Government to work on the computation of the royalty shares and have these released at the soonest possible time to the LGUs that play host to the country’s geothermal power plants.

The province of Leyte will reportedly receive P4,101,338 for 2007 and P17,616,006.80 for the year 2008.

The municipality of Kananga will receive the royalty tax share of P6,280,921 for the year 2007 and P26,173,490.40 for 2008 while Ormoc City will receive P2,947,090 and P13,462,524 for 2007 and 2008 respectively.