2000 INTERNAL REVENUE ALLOTMENT UPDATE
Dennis S. Lopez
(continued)

Hopes and Expectations

The fervent hope of all the stakeholders is for the certainty of the just share of LGUs in the national taxes known as the IRA in the next year to come. Examining the assurances and promises of the national government, there is less to expect with regard to a favorable resolution of the IRA issue.

During the 2000 Budget deliberation the LGUs were made to believe that Congress will restore the P30 Billion IRA "unprogrammed fund," if E.O. 189 and E.O. 190 were issued. In the approved budget only P20 Billion was restored, leaving the P10 Billion as "unprogrammed fund."

The P10 Billion "unprogrammed fund" will be released by April 2000 as promised by DBM Secretary Diokno. The President instructed Sec. Diokno to release P2.5 Billion or 25% of the P10 Billion. It is not clear if the succeeding releases will be on a quarterly basis.

The release of the 20% Development Fund will be released to the LGUs if they comply with E.O. 189 but when DBM issued LBC 70, the LGUs were required to accomplish Form 1 to show the breakdown the AIPs quarter cash requirements, further delaying the releases.

On the creation of new cities and provinces, the President assured the local officials that he would extend the moratorium on the new LGUs. The President released P5 million for the plebiscite to divide the province of Mindoro Oriental.

Last of the known promises, the President assured the local officials that beginning Calendar Year 2001, the IRA would be automatically appropriated similar to the debt service. Congress has yet to agree on the President's proposal.

On the possible abolition of the LGSEF, the Leagues have lost the ascendancy to advocate for its abolition. As part of the OCD, the Leagues of Provinces, Cities, Municipalities and the Liga ng mga Barangay are parties to the OCD Resolution No. 99-002 "RESOLUTION REQUESTING HIS EXCELLENCY PRESIDENT JOSEPH EJERCITO ESTRADA TO APPROVE THE INCLUSION OF THE LOCAL GOVERNMENT SERVICE EQUALIZATION FUND (LGSEF) IN THE CY 2000 GENERAL APPROPRIATIONS BILL IN THE AMOUNT OF AT LEAST PHP 5 BILLION AND TO DIRECT THE DBM TO ENSURE INCLUSION." This Resolution was approved last June 16, 1999. Although in the said resolution there is a clause, which states that "RESOLVED FURTHER, that for CY 2000 and succeeding years, said budget appropriations for the LGSEF shall be sourced out side the IRA shares of the LGUs," similar to the 1999 experience, the 2000 LGSEF was carved out again from the IRA. The original intention of the LGSEF is to provide funds for those LGUs having financial difficulties in delivering devolved services. With the LGSEF taken from the IRA, the LGUs are made to haggle among themselves for their rightful share, when the LGUs know very well that is theirs in the first place.