February 18, 2000 NEWS RELEASE

The fight for genuine local autonomy is far from over.

Thus declared officials of the 1.2 million-strong Union of Local Authorities of the Philippines (ULAP) led by Laguna Gov. Joey Lina two days after their struggle for the full restoration of the internal revenue allotment (IRA) of local government units was dealt a severe blow when the 2000 national budget was signed into law with a P15 billion IRA cut.

Lina said ranking ULAP leaders are set to discuss on Feb.23 their next course of action in the wake of a promise made by President Estrada that the full P121 billion IRA, including the P10 billion in unprogrammed funds, will be released this year.

Lina said President Estrada gave the assurance in the presence of ranking local officials in a Malacanang meeting last Feb. 10 wherein Budget Secretary Benjamin Diokno also declared that for next year, the LGUs’ IRA will not be made part of the General Appropriations Bill but instead automatically released to LGUs as mandated in the Constitution and based on the 1991 Local Government Code allocating to LGUs a 40 percent share in revenue collections.

In the light of these new developments, a prolonged debate is expected among local officials on whether or not to take their fight for the LGUs’ rightful IRA share all the way to the Supreme Court, ULAP information director Angel Tugado said.

Despite the non-veto of the IRA cut, most ULAP leaders continue to rely on President Estrada's assurance that he has the power to still release the full IRA based on the LG Code, Tugado said.

ULAP leaders feel they have achieved victory, though partially, in their battle for the LGUs' rightful IRA share considering that the enormous IRA cut earlier proposed was reduced significantly, he added.

"Even as we thank President Estrada for reducing the IRA cut (pegged last December at a staggering P30 billion plus another P5 billion also taken from the IRA and set aside for an equalization fund) it is unfortunate that Congress preferred to ignore the pleas of LGUs especially the 5^th and 6^th class provinces, cities, and municipalities that rely mostly on the IRA," Lina said.

Despite the partial victory, however, outspoken local officials remain unsatisfied. "We will not take this (IRA cut) sitting down. This is an infringement on the principles of local autonomy. Our rightful share from internal revenue taxes is protected by the Constitution," they said as they warned anew that the delivery of basic services transferred from national agencies to LGUs will be hampered if the full IRA is not released.

Invited to the Feb. 23 meeting at the Hyatt Regency Hotel in Pasay City are all officers of the eleven original leagues of local officials belonging to the ULAP confederation including all 78 provincial governors who are also expected to tackle the legality of twin executive orders which some claim violate the principle of local autonomy.

The issuance of the twin orders--EO 189 directing all LGUs to submit to the Department of Budget and Management their respective annual investment plan and EO 190 requiring DBM to directly remit contributions and other remittances of LGUs to government agencies, financial institutions and corporations--was a condition set when Malacanang sought to restore the IRA cut last December and averted a four-day nationwide LGU work stoppage.

Some local officials believe the twin EOs violate provisions of the Local Government Code as it imposes restrictions on the use of the IRA by LGUs.

In the earlier Malacanang meeting, Diokno also said that by April this year, the basis for computation of the 2000 IRA will be the total amount of P121 billion as originally appropriated, Lina said.

He added that according to Diokno, the P2 billion representing the second tranche of the Local Government Service Equalization Fund will be released to all provinces, cities, and municipalities before this month ends.

The IRA controversy has earlier led to the creation of a legal committee headed by Cebu Gov. Pablo Garcia to prepare a case that may be filed before the Supreme Court opposing the IRA cut which local officials have described as "unconstitutional, illegal, and discriminatory."

For inquiries, call Sandy Paredes or Mr. Angel Tugado at 7171810; 7181812; 7184351; 09179247960