LGPF: Welcome Remarks

ULAP Statement

"Ours is a system of laws and not of men"

WE, the officers and members of the various Leagues of local officials throughout the country under the Union of Local Authorities of the Philippines (ULAP), who represent the 42,000 barangays, 1,452 municipalities, 83 cities and 78 Provinces, are appealing to all our national leaders, especially the Senators and Congressmen to RESTORE the Php 35.445 Billion cut from the share of local government units (LGUs).

To the framers of our national laws, we appeal to them to please observe and respect the Constitutional provision and its implementing law on the share of local governments from the national internal revenue taxes and its possible adjustments in case of an unmanageable public sector deficit.

Article X, Sec. 6 of the 1987 Constitution states:

"Local Government Units shall have a just share, as determined by law, in the national taxes which shall be automatically released to them."

Based on Secs. 284 and 286 of R. A. No. 7160, the P 121.778 billion IRA share of local government units for the year 2000, which represents 40% of the national internal revenue taxes collected in CY 1997 shall be released to each local government unit without any "lien or holdback that may be imposed by the National Government for whatever purpose" and "in no case shall the allotment be less than 30% of the collection of national internal revenue taxes of the third fiscal year preceding the current fiscal year".

LGUs ARE NOT . . .

... greedy and are not asking for the entire P 121.778 billion on January 1, 2000 as claimed by Sen. John Osmena. The amount will be divided equally into 12 months in 12 tranches;

... remiss in our duty in collecting real property taxes contrary to the claimed of Sen. Osmena as can be gleaned from statistics prepared by the BLGF, Department of Finance (DOF) that since 1991, LGUs have a yearly average of 107% collection efficiency rate in RPTA against targets set by DOF;

... lazy as alleged by Sen. Osmena as LGUs have been delivering the basic services to our people already devolved to LGUs since 1991. LGUs are vital partners of the national government in local and national development.

WHAT WE ARE ASKING FOR IS . . .

... for Congress to follow the proper procedure mandated under existing laws which they themselves passed. What we are clamoring, therefore, is the retention of the P 121.778 billion in the "programmed" account and not to transfer the P 30.445 billion to the "unprogrammed" account. Clearly, the transfer of the amount is a "holdback" which directly contravenes Sec. 286 of the Local Government Code (R.A. 7160). Obviously, "unprogrammed" funds are tantamount to a clear and outright cut. Why only penalize the LGUs when the functions and responsibilities of most National Government Agencies have been devolved or transferred to LGUs?

In a Department of Justice Ruling No. 151, s. 1992 signed by then Secretary Franklin Drilon in 1992, the latter opined that "the earmarking of five percent (5%) of the CY 1993 IRA in the amount of P 4.9 M to be used for the "augmentation scheme" as conceptualized by the Special Provision in effect reduced the IRA shares of LGUs, and therefore, violative of Sections 284 and 285 of the Local Government Code".

If indeed there shall be an "unmanageable public sector deficit", Sec. 284 of R.A. 7160 also provides for a mechanism, as follows:

"In the event that the national government incurs an unmanageable public sector deficit, the President of the Philippines is hereby authorized, upon recommendation of the Secretary of Finance, Secretary of the Interior and Local Government, and Secretary of Budget and Management, and subject to consultation with the presiding officers of both Houses of Congress and the Presidents of the Liga, to make the necessary adjustments in the internal revenue allotment of LGUs."

If Congress will insist on the P 30 B cut, and an additional P 5 billion cut from the LGUs' IRA for the Local Government Service Equalization Fund (LGSEF), then only P 86.333 billion will be left for the LGUs' IRA. In ffect, by January, 2000, all LGUs nationwide will each receive their monthly IRA less by 29.1% . Said amount is even 6% lower than our IRA share this year and represents only 28.35% of the national internal revenue collections for 1997.

THIS P 35.445 BILLION IRA REDUCTION is ...

... UNCONSTITUTIONAL AND ILLEGAL as it is a clear violation of Sec. 6 of the 1987 Constitution and SecS. 284, 285 and 286 of the R.A. 7160 otherwise known as the 1991 Local Government Code

... DISCRIMINATORY as it is the most disruptive in government's operations since this will definitely disrupt the delivery of basic services throughout the country, specially in the 5th and 6th class LGUs.

... ARBITRARY as this will mean that LGUs cannot possibly comply with the 10% mandatory salary increase for its government workers beginning January 2000 which may even result to mass layoffs at the local government units' level.

OUR CALL ...

ANG IRA AY PARA SA MASA, 'WAG BAWASAN

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