The Negros Oriental government has yet to take a stand on the plan of the Philippine National Oil Company to channel royalty taxes to the Department of Budget and Management, instead of releasing it directly to the local government units.

Provincial treasurer Danilo Mendez said that, in the past, the PNOC directly gave the amount to the LGUs on quarterly basis, but lately, the company has informed the municipality of Valencia, where PNOC is generating geothermal energy, about the plan to course the amount through the DBM.

Mendez said the PNOC anchored its action on Art. 390 of the implementing rules and regulations of the Local Government Code.

He, however, said the new scheme might delay the release of the amount, and could adversely affect the delivery of services of the LGUs which are recipients of royalty taxes.

On the other hand, Mendez said the system could also hasten the release of the money, hence, there is a need for the province to consult it with the Provincial Attorney's Office before making any stand.

Under the Local Government Code, LGUs where geothermal energy is harnessed or utilized are entitled to a royalty tax of one percent of the gross proceeds.

Of the amount, 45 percent goes to the host municipality, 35 percent to the barangay, and 20 percent to the province.

Under the law, 80 percent of the share of the royalty must be used solely to lower the cost of electricity of the locality.*RA

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