Alvarez v. Guingona, Jr. 252 SCRA 695 Facts : Senator Heherson Alvarez, et. al.

filed a petition for prohibition with prayer TRO and preliminary prohibitory injunction assailing R. A. 7720, Said R. A. provides for a conversion of the municipality of Santiago, Isabela into a City. Alvarez said the municipality of Santiago failed to meet the requirement of Sec. 450 of the LGC that, for a municipality to become a component city, it must have an annual income of P20M. The reason is that in the computation of the average annual income, the Internal Revenue Allotments (IRA) should have been deducted from the total income. Instead, the IRAs were added to the total income. Held : Alvarez is wrong. IRAs are the local government units rightful share to the national taxes. Section 450(c) of the LGC provides that the average annual income shall include the income accruing to the general fund, exclusive of special funds, transfers, and any recurring income. IRAs are a regular, recurring source of income; they are not special funding transfers since Sec. 17(g) of the LGC gives a technical description for the IRA for purposes of the LGC