Less IRA Forcing Mindanao Cities to Cut Down on Services, Workers
Budgets for education, health, peace and order to be reduced by as much as 40 percent
By Jesus Llanto
City governments in Mindanao are set to cut down on basic services and contractual employees to cope with the unexpected decrease in their Internal Revenue Allotment (IRA) share this year.Cities nationwide were expecting huge increases in their IRA this year, and thus programmed their expenditures based on those amounts. However, the national government–upon Congress’s initiative and the President’s approval–created 16 cities in 2007 that didn’t meet the requirements set by law. This slashed the old cities’ expected IRA increase by tens of millions each.Earlier, existing cities launched a series of protest actions by threatening to halt operations or withholding tax remittances and government insurance payments. Six of the 16 municipalities that gained cityhood status in 2007 are from Mindanao, and most of them missed not just one but two of the requirements for conversion–locallly generated income (from fees and taxes collected) and population size. Under the Local Government Code, a municipality or cluster of barangays can be converted into a city if it has a minimum local income of P100 million, a population of 150,000 inhabitants, and a contiguous territory of 100 square kilometers. The League of Cities in the Philippines (LCP) has questioned the conversion of the 16 cities before the Supreme Court as soon as the laws creating them were passed last year. However, since the tribunal had not decided on the case, plebiscites were conducted and affirmed the conversion of those cities.Surigao City Mayor Alfonso Casurra, executive vice president of the LCP, said they are planning to reduce spending for basic services like education, health, and peace and order by as much as 40 percent.“It’s our way of making up with the cut,” said Casurra, who added that they could not make adjustments with the budget for personnel services or employees salaries because it is already fixed.
In 2007, the IRA accounted for 84 percent of Surigao City’s total tax revenue. It’s expected IRA increase for 2008 has been reduced by P31 million.
In Caraga region, where Surigao City is located, three new cities have been created.
For its part, Panabo City plans to reorganize and lay off at least 100 contractual workers from various offices. Panabo, whose 2007 IRA share accounted for 87 percent of its total tax revenue, will see its original IRA increase of P48 million reduced to just P8 million.
“We cannot provide the budget for personnel services of all departments,” Panabo City Mayor Jose Silvosa said.
Silvosa added that if the city is not going to reduce its workforce, they would be forced to cut their spending for basic services. He said that their budget for this year was computed using income estimates and the expected IRA increases.
Other cities in Mindanao are also facing huge IRA share cuts. Highly urbanized cities, like Davao and Zamboanga, will have IRA cuts of P194.5 million and P114.97 million, respectively. Iligan City will be facing a P68.83-million cut, and Butuan, P68.1 million. The six Mindanao cities whose cityhood are being challenged by LCP are Cabadbaran in Agusan del Norte, Bayugan in Agusan del Sur, Tandag in Surigao del Sur, Mati in Davao Oriental, Lamitan in Basilan, and El Salvador in Misamis Oriental.
Casurra said some of the towns converted last year become a city even if they did not achieve first-class income status as municipalities. Mati and El Salvador were third-class municipalities before the conversion, while Cabadbaran and Tandag were second-class municipalities.
The league is also opposing House Bill 24 filed by Rep. Dulce Ann Hofer (2nd District, Zamboanga Sibugay). The bill seeks to automatically convert into cities 27 capital towns—14 in Luzon, 9 in Mindanao, and 5 in the Visayas—of provinces with no existing cities even if they do not meet the income requirement.
Among the Mindanao capital towns included in Hofer’s bill are Mambajao in Camiguin, Nabunturan in Compostela Valley, San Jose in Dinagat Islands, Shariff Aguak in Maguindanao, Alabel in Saranggani, Datu Odin Sinsuat in Shariff Kabunsuan, Jolo in Sulu, Bongao in Tawi-Tawi, and Hofer’s bailiwick—Ipil in Zamboanga Sibugay.
Most of these Mindanao capital towns earn less than the minimum P100 million required for cityhood. Mambajao, Jolo, and Bongao are third-class municipalities with annual incomes ranging from P30 million to P40 million. San Jose, the capital of the newly created province of Dinagat Islands, is a fourth-class city with an average annual income of P20 million to P30 million.
Casurra said that existing cities are not against the conversion of towns into cities as long as they meet the requirements. “We are only against creation of cities by exemption.”
Casurra added that if Hofer’s bill is passed, they are afraid that other lawmakers will file similar bills to accelerate conversion of cities. “What will prevent from making other exemptions?”
Editor’s Note: This story is part of the Mindanao Online Reporting Project funded by the Australian Embassy.
