GMA orders DBM to seek funds to address IRA cut

President Arroyo has instructed the Department of Budget and Management (DBM) to look for funds to augment the internal revenue allotment (IRA) of cities, according to Mandaluyong Mayor Benhur Abalos.

House Bill 24 of Zamboanga Sibugay Rep. Ann Hofer aims to amend the Local Government Code to grant automatic cityhood to provincial capitals of provinces without cities.

City mayors fear that their IRAs would be drastically reduced to finance the operations of new cities.

Abalos, League of Cities of the Philippines president, said he and other city mayors have discussed with Budget Secretary Rolando Andaya Jr. the possibility of easing the guidelines of the Kilos Asenso fund under this year’s proposed P1.227-trillion national budget so the cities could use the funds for some of their requirements.

However, it would all depend on Congress which is still working on the proposed budget at the bicameral conference committee level, he added.

Mrs. Arroyo also vowed to certify as urgent a bill seeking to suspend the creation of new cities, Abalos said.

City mayors in Luzon, Visayas and Mindanao have joined the protest against a bill at the House of Representatives seeking to convert 27 provincial capital towns into cities without going through the strict requirements of the Local Government Code.

The mayors of the cities of San Fernando in La Union, Ormoc in Leyte, Zamboanga, and Cotabato and city employees wore black armbands during flag-raising ceremonies at city hall, and flew the Philippine flag at half-mast to protest Hofer’s bill.

The black armbands in Zamboanga City bore the slogan “Devolve el IRA (Return the IRA).”

In San Fernando City, La Union, Mayor Pablo Ortega said the “undue conversion” of several towns into cities caused his city P23 million in IRA share this year.

“This cut in our budget has affected various projects and services of the city government,” he said.

Ortega said the existing cities are now suffering the consequence of a decreased IRA. Instead of getting 14.3 percent additional IRA for 2008, the cities will only get 4.7 percent.

“This substantial reduction will adversely affect the delivery of basic services,” he said.

In Ormoc City in Leyte, Mayor Eric Codilla said the conversion of towns into cities without meeting the law’s requirements has resulted in the IRA of the 120 existing cities being reduced by P4 billion.

“This means that the cities get a measly increase in IRA despite their growing needs,” he said.

“This deplorable effect of the reduced increase of IRA for cities is deeply felt by Puerto Princesa City in Palawan. Instead of receiving P146 million as IRA, it will only receive P1.7 million, a significant loss of P144 million.”

Codilla said what Congress should realize is that local governments are also supporting national agencies in their jurisdictions.

“How many classrooms could be built, renovated and beautified by the P52 million slashed from the IRA?” he asked.

“How many patrol cars the city could give to the local PNP from that reduction of IRA? If the supports to the DepEd and the PNP would not be sustained, chances are the problem would go back to the local governments. When the enrollment of students increases, the problem of lack of classrooms would emerge.”

Codilla said when classrooms are not conducive to studies there is a big possibility that students will drop out.

In Zamboanga City, Mayor Celso Lobregat said his city is set to lose P115 million in its IRA share.

“It will greatly affect the delivery of services, including implementation of infrastructure projects,” he said.

Lobregat said Zamboanga City is the third hardest hit by the IRA reduction at P114.971 million.

He said Zamboanga City was supposed to receive P1.166 billion in IRA share this year, but that it was reduced to P1.051 billion after the conversion of the 16 municipalities.

Under the Local Government Code, before a municipality could be converted into a city, it must generate an income of P100 million and have the required population, he added.

In Cotabato City, Mayor Muslimin Sema said Hofer’s bill, if passed into law, would cause a backlash on the city’s delivery of basic services.

The DBM had informed them that instead of receiving P40.5 million IRA this year, the city government would only get P10.5 million, he added.

Sema said the national government told them the amount deducted from the IRA of cities will be distributed to newly created cities.

“We need an immediate moratorium in the creation of new towns and cities if the money to sustain them would be taken from the IRA of old cities and provinces,” he said.

In Kidapawan City, the local government has started to impose measures to cushion the adverse effect to governance of the P37 million cut in its IRA.

More than P70 million of “royalty taxes” collected by Kidapawan City from the Mt. Apo Geothermal Plant are remitted to the national coffers, Mayor Rodulfo Gantuangco said.

In Malabon, Mayor Canuto Oreta said if Hofer’s bill is passed by Congress, the city will only get a six percent increase in IRA share. – Marvin Sy,  Roel Pareño, John Unson, Roberto Dejon, Jun Elias, Manny Galvez, Jerry Botial