IRA for LGU cut off under federalism
2017 News TAGAYTAY CITY – While Bohol Governor Edgar M. Chatto and the rest of provincial governors in the country are batting for a higher Internal Revenue Allotment (IRA), considered as the bread and butter for local government operations, an expert on federalism has made it clear that under the proposed new form of government, local government units (LGUs) would no longer be receiving IRA funds, but have to stand on their own resources.
Speaking at the 21st National Press Congress in Tagaytay City, an event covered by The Bohol Tribune, former three-term Quezon City Congressman Dr. Dante Liban, president of the Philippine National Movement for Federalism (Penamfed), told publishers and editors that one of the major changes under a federalist state is the removal of IRA intended for LGUs.
LGUs in a state will have to generate and spend their own revenues, a practice that would teach them how to be independent and resourceful, Liban, who is often consulted by Pres. Duterte on federalism matters, said in a lecture here.
Duterte has vowed to step down as president even before his term ends in 2022 once the proposed federal platform of government, a flagship initiative of the former mayor Davao City even before he was elected president, is in place in the country.
Dr. Liban, who was invited by the Philippine Association of Publishers, Inc. (PAPI) to speak on the topic “Inclusive Growth Prospects for Filipinos Under a Federal Government Set-up” at the Development Academy of the Philippines (DAP) in Tagaytay City, Cavite, revealed that LGUs will have to keep more or less 80 percent of their own income (from taxes and other revenue sources) and will remit 20 percent of such income to the national federal government.
Liban expressed confidence the federal form of government will be embraced in the country during the administration of Pres. Duterte.
As this develops, the Provincial Government of Bohol had prepared a budget of P2.39 billion for its operations and projects in 2017. The City Government of Tagbilaran, on the other hand, had also planned to spend more than P900 million for its operations next year.
Under the current set-up, the 1,109 barangays of Bohol are receiving more or less P1-M IRA every year from the national government.
Depending on the number of population, bigger barangays are getting larger chunks of IRA funds compared to what smaller barangays are entitled to receive every year.
Also, under the present form of government, the 47 municipalities in Bohol, like any towns in the country, are solely dependent on IRA funds for their annual operations.
A fifth-class municipality in Bohol has a 2017 budget of more or less P50 million to P70 million, the bulk of which comes from the IRA being dished out by the national government.
Big and populous towns like Panglao, Ubay, or Inabanga will be operating with a budget of more than P100 million each next year, according to their proposed budget ordinances submitted to the Sangguniang Panlalawigan (SP).
Because of IRA windfall, every barangay kagawad is receiving a monthly honorarium (or salary). All other barangay officers, appointed or elected, are paid with a monthly salary regardless of the scope of their work. The same scenario is true for all town LGUs, on top of 13th month pay, bonuses, per diems, and many other cash incentives.
But all provincial, town and barangay officials, employees and staff will kiss these privileges “goodbye” once the Duterte administration succeeds in implementing the federal form of government, which is expected to take effect before 2019.
In his talk, Dr. Liban admitted that while it is true that that proposed federal form is untried and untested in a Philippine setting, industrialized countries like USA, Canada, Australia, and European countries have become progressive due to their adoption of a federal form of government, with slight variations from state to state.
Liban said under the federal form of government, Central Visayas will be considered as “one state,” independent of other states (regions) in terms of revenue generation and expenditure plan.
During the open forum, PAPI chairman emeritus Johnny Dayang expressed apprehensions that the proposed federal form of government might spark chaos, saying most Filipinos, even the educated ones, have no idea about federalism matters.
Dayang called on the Duterte administration to launch a massive information awareness campaign in the countryside, tapping the community press, on the pros and cons of federalism so as “to avoid regrets in the future.”
RECOUNT IRA
Bohol Gov. Edgar Chatto and his fellow leaders of provinces asked Malacañang for the Department of Budget and Management (DBM) recomputation of the 2017 internal revenue allotment (IRA).
Nationwide, many LGUs each stands to lose necessary millions based on the new formula of the Department of Budget and Management (DBM) in sharing the IRA next year amounting to P486.885 billion.
IRA allocation is the biggest single determinant of the local annual budget, Chatto said as the Bohol provincial government is eyeing a 2017 budget of P2.395 billion.
Next year’s IRA has been computed based on DBM Local Budget Memorandum (LBM) No. 74-A resulting from the adoption of the 2015 Census of Population by province, city, municipality and barangay.
The DBM earlier computed the IRA based on LBM No. 74, which considered the 2010 population census, until the new memorandum on “adjusted” IRA was issued last September on account of the 2015 census.
While there are LGUs to gain more allocations under the new memorandum, the shares of many provinces and even majority of the LGUs will decrease.
There are essential local development programs and projects and socio-economic services feared to be affected or hampered if the new computation basis is not recalled.
Bohol province and its component lone city, 47 municipalities and 1,109 barangays stand to get next year a total IRA reduced by P113.327 million.
Chatto estimated the IRA of the provincial government alone to decrease by more than P41 million, which can otherwise help a lot of essential programs, projects and services.
The same situation can happen to all other affected LGUs in the country, according to the governors during the general assembly of the League of Provinces of the Philippines (LPP).
The LPP, thus, requested Pres. Rodrigo Duterte to direct the DBM to recall LBM No. 74-A and officially use LBM No. 74 in the computation of next year’s IRA.
The request was formalized in a unanimous resolution of the LPP, which national secretary-general is Chatto, as the league also considered the president’s “heart for the LGUs.”
Having come from the ranks of the local chief executives as a former long-time mayor of Davao City, the president knows by heart the concerns and gaps in running the LGU, Chatto said.
Also during its assembly, the LPP tackled with the Department of Interior and Local Government (DILG) the details of the implementation of the conditional grant for local roads in provinces in 2017 at a total national budget of P18 billion.
Chatto said they requested to include the bridges in the said local road rehabilitation, repair and improvement grant scheme, formerly known as the KALSADA program.
LGUS URGED TO SUPPORT FEDERALISM MOVE
The Department of Interior and Local Government has urged all local government units (LGUs) in the country to embrace the thrust of federalism being fostered by the administration of President Rodrigo Duterte, according to a statement issued by DILG Secretary Ismael Sueno.
“We (people) in the DILG, we are for the shift to federalism,” Sueno said.
He said the DILG would focus on strengthening of localities to continue their pursuit of performance excellence in local governance and development under a federal system of government.
“…we have achieved a lot in terms of empowering and making local government units (LGUs) more self-reliant, we need to set our sights on further strengthening local autonomy under a federal system of government,” said Sueno.
“The response of the LGUs in the federal shift of the government is great. They are really supportive to the federal system of government because they gained more authority as they get autonomous.” he said.
For his part, Department of Budget and Management Secretary Benjamin Diokno has encouraged the LGUs to implement efforts to exercise autonomy in crafting programs and projects to be funded by their respective budget allocations.
"Local officials' budget increased and next year, it is close to half a trillion pesos. Government devotes all means of services for the development of each local government units. Due to this growing budget, we expect the LGUs to be highly-autonomous, exercise local autonomy," said Diokno.
Sueno echoed Diokno's remarks, stressing that one way to practice autonomy in the LGUs is to challenge them in the management of budget development in their respective localities.
“You cannot have real autonomy kung wala kang budget. Every year lumalaki ang budget, kaya talagang it encourages them to really autonomous. (You cannot have real autonomoy if you don't have budget. Every year, the budget increases so it encourages them (LGUs to be autonomous),” he stressed.
The DILG Secretary also said the agency is continuously disseminating information on the proposed federal shift of government to the local chief executives as well as to the common citizens.
“What we do is educate our local government units and the people for them to know what federalism is, so that paglabas ng botohan if they accept or not, the bottom line is they understand what federal system is.” He said.
He also added that DILG has formed four groups going around the country to educate the business sector, academe and the ordinary citizens. (with reports from Ven Arigo and Aira May Dizon of PNA)
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