Good morning to everyone. Magandang umaga po sa ating lahat.

In the past several months, a single story dominated both print and broadcast news. One story-the preparation of the national budget for the year 2000-galvanized various sectors of society even as it put the future of government, both national and local, in doubt.

The stories recorded tensions resulting from the reported plan of the Senate to slash the internal revenue allotments of local government (IRA) units by billions of pesos.

The response from our local officials was swift and harsh. Fearing a breakdown in local government operations, local officials called the planned budget cut illegal and unconstitutional. Local officials staged demonstrations and threatened to stop work to dramatize their protest. There were plans to derail the re-election bids of some members of the Senate. In the background were persistent rumblings about the plan to challenge the budget cut in the Supreme Court.

Unfazed, Congress produced an appropriations bill that did more than slash the internal revenue allotments. It included limitations on the use of funds, and provisions requiring consultation with and the concurrence of Congress prior to the implementation of local projects. The bill also contained restrictions on the use of the development fund of local government units.

On 16 February 2000, the President vetoed these controversial provisions causing another furor, this time from members of Congress who thought the veto was unconstitutional.

In light of all these developments, many questions surfaced:

What is the Internal Revenue Allotment? Was Congress' decision to cut the IRA in accordance with law? Were the conditions requiring inserted by Congress legal or constitutional? Was the President's veto constitutional? How would the reduction of the IRA affect the delivery of basic services at the local government level? How should civil society respond to these developments?

The Local Governance Policy Forum - a network of non-government organizations working on governance issues decided to hold a forum on the internal revenue allotment.

We conceived this forum as one way to answer the basic questions raised in the last few weeks. We hope to facilitate the presentation of various points of view to situate the debate about the internal revenue allotment within the context of local autonomy and participatory democracy. We hope that the discussion will prevent another tumultuous debate when subsequent budgets are prepared.

In short, we hope that it will clarify not only the basic questions but allow all stakeholders-local officials, civil society groups and the people themselves-to prepare for what could be an annual battle for an important component of local autonomy.

We thank you all for coming this morning, and we look forward to a fruitful discussion.

Once again, good morning.

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