Voices: Robbed Twice Over by Peter Laviña
March 18th, 2006 at 3:28 am (General, National Politics, Davao City, Economics)
In the year 2000, the Philippine national government withheld a portion of the internal revenue (IRA) share of the city government of Davao in the amount of P 91 million. The following year, another P 116 million was not released. That totals to a whopping P 207 million. Therefore, the local government was deprived of such a huge amount to deliver the much-needed public services to our people for over five years now.
This money is the “just share” of our city from the collection of national taxes. The national government has no right to withhold it. Both the Constitution and the Local Government Code are clear about this. The Constitution says this just share in the national taxes “shall be automatically released” to local governments. The LGC, on the other hand, said this “shall be automatically and directly released to them without need of any further action.”
In the case Alternative Center for Organizational Reforms and Development, Inc. v. Zamora, 459 SCRA 578 (2005), the Supreme Court ruled that the setting aside of a portion of the IRA by the executive or the legislative departments of government is unconstitutional.
Clearly, the national government erred in not releasing this fund to the local governments which amounted to P 20 billion in the two years. It owes the city government of Davao P 207 million. I know of a number of banks that offer to double your money in five years. This could have amounted to over P 400 million by now!
Nyet. Well, that’s wishful thinking.
The national government allegedly has no money and so it cannot pay its debt to the local governments. But in the meantime, it continues to lick the asses of foreign creditor banks by automatically appropriating debt service under the national budget. As much as 40 percent of the national budget goes to debt service payments.
But money for local governments, nyet!
So, to pay for this withheld sum, the national government is embarking on a miracle. It is called the Monetization of IRA Collectibles for Local Empowerment (MIRACLE). Under this scheme local governments have the option to get their money from government designated trustee banks at a discounted value of 70 percent or get it in seven equal annual installments over the next seven years starting next year.
Well, this looks to me like highway robbery than a miracle.
Imagine our just share of the taxes withheld from us for over five years and now they plan to release it to us at either a discount or in installment!
What a miracle! We’re being robbed twice over!
This article was originally posted in the blog of Davao City First District Councilor Peter Laviña. Laviña also submitted this for his column at the Mindanao Times.
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Major Tom said,
March 18, 2006 at 8:17 am
This kind of scheme—where the national government fails to deliver the full IRA amount—may be used by the administration to pull strings or blackmail local governments in order to seek some favor from local gov’t leaders. In fact I have heard some rumors that IRA releases are often become subject of negotiation between the releasing agency and the local gov’t concerned. Who knows what kind of bargaining goes in there..