December 7, 1999 NEWS RELEASE

The 1.2 million-strong Union of Local Authorities of the Philippines (ULAP), the confederation of all local officials nationwide, today warned of disastrous consequences in the delivery of basic services to the people as a result of the Senate finance committee’s recommendation to cut by about P30 billion the internal revenue allotment (IRA) share of local government units.

ULAP president and Laguna Gov. Joey Lina said the proposed cut is not only a "disaster" to LGUs nationwide but is a "gross violation of the 1991 Local Government Code which specifically establishes the computation of the IRA share of LGUs based on internal revenue tax collections.

"We are shocked and terribly disappointed," Lina said as he urged senators to "take a long, hard look at the disastrous implications of the P30 billion cut."

Health services and the food security program will definitely bog down if the recommended IRA cut is maintained, Lina said even as appealed to the Senate leadership to restore the IRA share due the LGUs.

Lina said that up to 80 percent of all LGUs nationwide are dheavily dependent on the IRA in the implementation of services devolved from the national government including agricultural, health, social welfare and environmental protection.

Describing the recommended cut as "whimsical", Lina said there is absolutely no justification why half of the total cut in the year 2000 national budget will be taken from the share of LGUs.

"Why are LGUs being made to suffer in their capability to provide needed services?" Lina lamented as he stressed that the country’s local officials are in the frontline in dealing with the people.

Lina said ULAP officials representing all local executives from governors down to barangays will be meeting on Thursday to map out moves to urge the Senate to restore the P30 billion cut.  

President Estrada will veto any reduction in the P121.778 billion internal revenue allocation (IRA) for local government units (LGUs) in the year 2000 national budget now pending in the Senate.

The veto assurance was made before some 35 governors during the first-ever "Governors’ Hour with the President" monthly forum organized by League of Provinces of the Philippines (LPP) president and Laguna Gov. Joey Lina that coincided with the close of the twin summit on housing and manpower development late last week.

"I will line veto any IRA reduction from the share of LGUs," President Estrada said to the delight of the governors gathered at the Laguna provincial capitol who sought his help on a number of priority issues affecting their respective provinces and LGUs as a whole.

The President’s assurance to the governors was made amid reports that some senators were poised to slash the House-approved P651 billion year 2000 national budget by as much as P50 billion.

Lina, who also heads the confederation of all 1.2 million local officials nationwide known as the Union of Local Authorities of the Philippines, said local legislative councils or Sanggunians all over the country have already firmed up their year 2000 local budget programs.

Such local budget programs were based on LGUs’ share contained in the proposal Malacanang submitted to the Lower House and which reflected the Budget Department’s move not to deduct some P14.34 billion it deducted in 1999 from actual national tax collections prior to computation of the IRA, thereby resulting in a 26 percent increase of LGUs’ IRA.

Last-minute insertions and reductions in the 1999 national budget during the bicameral deliberations late last year resulted in substantial decreases from expected IRA funds which led to chaos and confusion among LGUs whose Sanggunians have already finalized budget proposals and earmarked funds for development programs based on their IRA share.

Local officials vehemently opposed to any decrease of the IRA share for LGUs have warned that such decrease would not only violate the 1991 Local Government Code which spelled out the basis for LGUs’ IRA but also cause increased hardships for cash-strapped LGUs already burdened by devolved services.

"The financially-beleaguered 5^th and 6^th class provinces, cities, and municipalities would be dealt a serious blow in the pursuit of various development programs for the people as a result of any reductions in their IRA share," they said.