.

Download this Article| Discussion | Contact Us |Back to Policy Page |Home

 

Discussions

Following are the important points for discussion from the open forum. Here Ms. Sandra Paredes of the Union of Local Authorities of the Philippines joined the panel of speakers to respond to question and comments posed mostly by the PO/NGO representatives.

Comment from the Audience: I think it is good that the issue of the IRA came up. More than anything else, the IRA issue is a wake-up call for local government units vis-a-vis the use of the IRA. The experience of people on the use of the IRA has not also been encouraging. For the record, civil society support for the restoration and even the increase of the IRA is really a qualified support, because civil society also believes in the strengthening of autonomy, democratization and decentralization as institutions. The support of civil society is dependent, all the way, on the proper use of the IRA, which is an issue that still needs to be addressed by local governments.

Ms. Sandy Paredes of the Union of Local Authorities of the Philippines: I think civil society response should not focus solely on the use of the IRA but on the use of public money in general - the pork barrel of Congress, on the budget coming from national government. But at the same time we should remain vigilant against cuts in the IRA since this is a matter of legality. The IRA share is a distinct formula incorporated in the law that should be followed, and Congress through the General Appropriations Act cannot merely amend this law. Whether the IRA is judiciously spent or not by local governments is another matter altogether. Of course, local government officials guilty of misusing the IRA should be made accountable, but this is an issue separate from cutting or reducing the IRA.

Comment from the Audience: Rumor has it that the IRA cut is related to the administration's attempt to amend the Constitution through its proposed Constitutional Correction and Development (CONCORD). People wonder if the President's assurance to release local governments' rightful share of the IRA in April has strings attached to it.

Ms. Paredes: None whatsoever. Dialogues with the President did not touch on the CONCORD but rather on the legal provisions surrounding the IRA issue. ULAP only cited to the President the unconstitutionality of cutting the IRA and how this is supported by the Local Government Code of 1991 and subsequent legal opinions.

Comment from the Audience: The whole IRA issue has seen the President acting as final arbiter to settle the debate. What is worrying for some is how this intervention by national government in the person of the President may define and limit the space of local autonomy. This concern is all the more pressing in the light of the present system where horse-trading is a regular and accepted occurrence. This is also one cause that civil society has taken up: how to relay the message to national government that centralization as a mode of governance no longer applies.

Comment from the Audience: I would like to describe the experience of the informal sector who are not deeply familiar with the technicalities of the IRA issue. People from the sectors feel that the IRA, whether released automatically and in full or not, does not have an impact on their lives. The IRA is commonly perceived as merely being taken advantage of by local officials - in the barangay, municipal and provincial levels. The people are not part, and are not interested, in the debate. And this may be the valid reason for the lukewarm response of the sectors to the issue of the IRA. Although the sectors recognize and sympathize with the legal aspect of the issue, they do not see the IRA funds as being used to better their situation. Secondly, IRA support from the sectors is not evident since the sectors are not encouraged to join avenues of dialogue and participation such as local special bodies. The sectors are not given space to voice out their concerns and to mobilize participation on issues like the IRA cut. This second concern may serve as a challenge to local governments to encourage participation from the sectors.

Ms. Paredes: It is unfortunate that this is the general sentiment of the sectors. That is why we at the Leagues see the IRA issue as an opportunity for local officials, with the help of civil society organizations, to inform the public of the IRA and the benefits that can be availed through it. It is important to know what the IRA is all about because the IRA is the just share of everyone, regardless of political affiliation.

Comment from the Audience: Is the IRA's automatic appropriation something that needs to be legislated?

Ms. Paredes: Actually the phrase applied to the IRA is 'automatic release' - this is a constitutional provision stating that LGUs shall have a just share on national taxes as determined by law, and this mandate is echoed by the Local Government Code of 1991. The Local Government Code determines the just sharing of the IRA among LGUs from the national taxes. The provision goes on to say that the IRA shall be automatically released. Thus there is enough legal basis to pursue the argument that the IRA should, in practice, be released automatically. If the automatic appropriation of the debt service, whose legal basis rests on a special law, is stringently observed and followed, the more that the automatic appropriation and release of the IRA should be upheld, since this is mandated by the Local Government Code and the Constitution itself. However, that the IRA at some instances was not released automatically is something that has not been questioned formally. Only in 1999 when an amount of P 5 billion was deducted from the IRA to constitute the Local Government Service Equalization Fund did local officials and the Leagues question the practice of reducing the IRA. A similar incident also happened in 1993, when a portion of the IRA was set-aside for the Cost of Devolved Functions (CODEF) Fund. But in the end, local officials agreed to let the matter go since local governments remained the target beneficiaries of both funds. At the present instance however, local officials are now resolute in filing a case to the Supreme Court regarding the unconstitutional reduction and earmarking of the IRA in order that this may not happen again in future annual budget deliberations by Congress.

Atty. Marlon Manuel: To answer the question more directly, there is no need for any declaration regarding the automatic and release of the IRA because the law is clear on the sharing formula for the IRA. The Constitution mandated Congress to determine the just share of LGUs, and this determination was done in the Local Government Code of 1991. With this determination of the just share of the IRA, release of the fund should be automatic.

Atty. Dante Gatmaytan: It is at this point important to inject a sense of urgency regarding the IRA issue. Firstly, the battle for the IRA in this present year is not over since we have yet to see what the budget looks like. In the span of time between now and the official release of the General Appropriations, legal moves and counter-moves from actors involved in the debate can determine the final figures of the budget, actors like Senator Osmena, Senator Santiago, etc. Secondly, we should be aware that the other recourse of Congress with respect to the IRA issue is to amend the Local Government Code, possibly to the extent of cutting the just IRA share of 40% to even 5%. In the light of such developments and possibilities, civil society should remain vigilant in ensuring that the just IRA share is automatically released for every fiscal year.

Atty. Manuel: In addition to the last point raised, although Congress can indeed amend the Local Government Code, it is easier for Congress to effectively reduce the IRA through the yearly General Appropriations Act. The budget deliberation that Congress undertakes every year provides sufficient cover for Congress to cut the IRA, at this particular instance by transferring a certain amount of the IRA to a different budget item. But this item is in fact unprogrammed, subject to the condition of meeting revenue targets. But if these revenue targets are not met, monies under the unprogrammed fund may not be released, and thus this constitutes a cut to the IRA. In contrast, an attempt by Congress to amend the just share of local governments in the Local Government Code would be more difficult since this would be a blatant act reducing the powers of local governments, thus painting Congress in a bad light.

Comment from the Audience: The Constitution and the Local Government Code articulate clearly that the IRA should be automatically released. But is it possible to arrange the IRA in the way that the debt service is automatically appropriated meaning not subject to budget deliberations? Secondly, we should be made aware that the debate on the IRA is not only a legal but also a political concern. Our panel of lawyers have explained exhaustibly the legal side of the matter, emphasizing the unlawful reduction and delay on the release of the IRA. But politically, it is also interesting to explore how local officials and the Leagues could emerge as major actors to influence the process and outcome of the budget and more specifically, to prevent the IRA from being reduced or withheld.

Ms. Paredes: The legal aspect of the IRA is amply defended by constitutional mandates and provisions guaranteeing local autonomy; the task facing us now would be to remain watchful and vigilant. But it is true that local officials playing major roles in influencing the budget is a challenge at present. It is unfortunate that in all the hearings in Congress and the Senate, the Leagues were not invited to ably represent the LGUs. The Leagues were not consulted or given the proper forum to voice out their concerns and sentiments. It was only when the Leagues conducted a show of protest that the rightful portion of P 30 billion initially removed from the IRA was restored. In the light of such difficulty for local governments to have a voice in the budget deliberations, we at the Leagues are counting on civil society for support in this struggle. What has been put to question by the IRA issue is the integrity of Congress in upholding the autonomy of local government. This becomes glaring in view of the fact that in contrast to the cut in the IRA, the budget of several national line agencies were increased. To illustrate, the budget of the Department of Public Works and Highways was increased by P 8.9 billion, the House of Representatives by P 14.7 million, the Office of the Vice-President by P 4.6 million, the Department of Science and Technology by P 576,000, even budgetary support to government corporations was increased to P 369.6 million. Now what is the justification of Congress in increasing the budget of these line agencies in sacrifice of the IRA when it comes to compensating for a public sector deficit?

 

Back to Top