January 24, 2000 NEWS RELEASE

The 1.2 million-strong Union of Local Authorities of the Philippines (ULAP) yesterday issued a final appeal to all senators and congressmen not to cut the internal revenue allotment of local government units and to seriously consider its effects on financially-beleaguered LGUs delivering frontline services to the people.

In a letter to all legislators who are expected to ratify soon the bicameral committee report which slashed by P10 billion the IRA of LGUs for this year, ULAP officials led by Laguna Gov. Jose Lina Jr. asked them "to take a long hard look at the pertinent provisions of the 1987 Constitution and of the 1991 Local Government Code before ratifying the General Appropriations Bill."

In the same letter, ULAP lamented that Congress never invited local officials or their leagues in any public hearings on the budget and thus were not given the opportunity to present their official position, views and comments on the IRA cut.

"Had we been given the chance, perhaps the honorable legislators would have better appreciated our legal arguments relative to the unconstitutionality of transferring P10 billion of our IRA from the 'programmed' to the 'unprogrammed' and placing P5 billion of our IRA to the Local Government Service Equalization Fund," the letter continued.

Stressing that the IRA cut is "unconstitutional" local officials pointed to Article 10, Section 6 of the 1987 Constitution which states that LGUs "shall have a just share, as determined by law, in the national taxes which shall be automatically released to them."

They also cited Sections 284 and 286 of the 1991 Local Government Code stating that the IRA shall be released to each LGU "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 percent of the collection of national internal revenue taxes of the third fiscal year preceding the current fiscal year."

Local executives lamented that major governmental functions including health and agriculture, but not the corresponding funds, have been transferred from national agencies to LGUs resulting in heavier financial burden on LGUs for much-needed services for the poor.

"Most national government agencies have been devolving functions and personnel salaries and allowances while continuing to receive budgetary allocations from Congress as if they were still in charge of delivering the very services that were devolved to LGUs," ULAP officials said.

They also pointed out a provision in the Local Government Code stating that regional offices of national agencies or offices whose functions are devolved to LGUs shall be phased out within a year from the approval of the Code in 1991.

"Why is it that these regional offices have not been phased out to lessen the need for national agencies to have huge budgets for services that have already been devolved to LGUs?" local officials asked as they expressed disgust over why these agencies’ budgets continue to increase over the years.

They cited four national government agencies—Departments of Health, Agriculture, Social Welfare and Development, Environment and Natural Resources—with a combined total of about 70,512 devolved personnel whose salaries are being paid for by provinces, cities, and municipalities.

"Ironically, the budgets of these national agencies have continued to increase despite the devolution of their services to the LGUs," they said.

The local executives also warned that LGUs would not be able to grant the 10 percent salary hike promised by President Estrada for all government employees starting this year and could even resort to mass layoffs as a result of the IRA cut.