Sibugay lawmaker pushes for IRA rationalization

In a press conference held at the Cogon Palace beside the provincial capitol last Friday, Rep. Dulce Ann Hofer of the second congressional district here said “at present, the IRA of each local government is determined by ‘the rule of the thumb’ in the absence of a formula.”
The “rule of the thumb”, she explained, simply means that there is no scientific formula on how to determine how much a local government gets as IRA share. The IRA is the tax share of local government units, which get 40 centavos of every peso in tax collected by the government.
According to Hofer, the issue on how the IRA should be computed arose after the protest staged by the League of Cities of the Philippines (LCP) led by its president, Benhur Abalos, Jr. against the passage of House Bill No. 24.
Authored by Hofer, HB 24 seeks to exempt all capital towns of the country from the income requirement to become cities.
City governments across the country launched a nationwide protest against the creation of new cities that do no meet income requirements. At least 90 percent of the local government units, under the 120-strong League of Cities in the Philippines, flew their flags at half-mast and their employees wore black arm bands to dramatize their opposition to HB 24. The bill seeks to amend Republic Act 9009 and the Local Government Code by exempting the capital towns of provinces from the income requirements of cityhood.
Under the Local Government Code, a town should have a locally generated income of at least P100 million annually before it could be classified into a city. It should either have a land area of at least 100 square kilometers or a population of 150,000.
The LCP is opposing the creation of new cities that do no meet income requirements because of the resulting decrease in their share of the Internal Revenue Allotment (IRA).
“The good thing about this HB 24 is that it brought out the thing about IRA,” Hofer told the media.
Because of the cities’ opposition to her bill, according to Hofer, the question on how the IRA is computed was brought into focus.
Speaking in mixed English and the local language, Hofer clarified that the LCP’s protest was not about HB 24 but because of the reduction of their IRA increase this year after 16 towns were converted to cities last year.

In 2007, 16 towns were converted into cities, which resulted in an average decrease of IRA share per city by P32 million.

The LCP members were supposed to receive a total of P6 billion in IRA in 2008 but will be getting only P4.7 billion, or some P1.3 billion less than expected, because of the additional 16 cities.
Existing cities suffer an average drop of P2 million each in their IRA share for every new city that is created.
“Kita ra’y nabuthan (We were just a scapegoat.),” Hofer clarified.
She called on critics of the proposed law on to look at the bigger picture of economic development for the countryside.
“The Local Government Code was designed for natural migration of a municipality to a city with an increased IRA to jumpstart development,” Hofer said.
She believes countryside development will be spurred by the conversion of capital towns in city-less provinces.
At least 28 capital towns would be qualified to become cities if House Bill 24 were passed. The creation of 28 new cities, the LCP claimed, will result in a reduction of the IRA share of cities by P56 million each.
Hofer, however, countered that if there are 28 provinces with no cities, according to Hofer, her bill won't automatically transform all of them into cities and bite into the IRA share of existing cities considerably.
To the contrary, Hofer said, her bill would make the new cities less dependent on the IRA.
"Eventually, some of these cities will grow to be IRA-independent in the same way as some highly urbanized cities are now no longer totally dependent on their IRA," Hofer stressed.
"It's the larger picture we need to see, that the already established cities will gain from such an arrangement. And I bring this up because in the long run, House Bill No. 24, will transform these capital towns to effective catalysts for development in their respective provinces," she said. (Antonio M. Manaytay/MindaNews contributor)