LGPF: Welcome Remarks

Some Important Points for Discussion and Further Study Regarding the IRA
(Based on Data Presented by Dennis Lopez of the Philippine Business for Social Progress GOLD Project)

Computing for the IRA Share

Computing for individual shares of LGUs

a) Land Area

Land Area of LGU
----------------------- x [(Total IRA - Cost of Devolution Fund) x 23%] x 25%
Total Land Area of
All LGUs at that Level

b) Population

Population of LGU
----------------------- x [(Total IRA - Cost of Devolution Fund ) x 50%
Total Population of
All LGU at that Level

c) Equal Sharing

[(Total IRA - Cost of Devolution Fund) x 23%] x 25%
Total LGU at that Level

· Computing for the IRA Base

(As an example we will use computations for CY 1999 with a 1996 base year)

What we should notice here is the disparity in the computation of the base from which the 40% IRA is taken. The DBM reduced the base by some 15 billion pesos. This reduction in the base from which the IRA is computed results in substantial cuts to the share of LGUs.

Comparative Computation of LGUs' IRA Share

Based on the computation from the previous table, these will be the shares of LGUs in the IRA share based on the BIR 1996 collection of Php 259,706.163 B.

Notice that there are significant reductions from the DBM computation based on the reduction of the base of the IRA.

Other sources of cuts to the IRA and how much they amounted to in this budget

a) Local Government Empowerment Fund = Php 1,860,000
b) Metro Manila Development Authority = Php 26,029,000
c) Municipal Development Fund = Php 1,345,397,000
d) Palarong Pambansa = Php 130,000,000
e) Local Government Service Eualization Fund = Php 5,000,000,000

Special Provisions on the IRA that amount to reductions

Special Provision No. 1

Php 5 Billion of the IRA is to be set aside for the Local Government Service Equalization Fund (a special fund to be released by the Oversight Committee on Devolution which is meant to fill gaps in the IRA distribution)

Special Provision No. 2

50% of the increment of IRA shall be devoted for food security projects in highly urbanized cities to alleviate the urban poor and resettled squatters;

No amount of the increment shall be used to increase personnel plantilla and upgrading of compensation/allowances;

IRA shall not be used for training, seminars and study tours of LGU officials and employees