Woe to the cities all over the country. With the latest decision of a flipped flopping Supreme Court on its third reversals of its decisions, the petition of 16 towns for cityhood is almost certain.
The downside here is that the present 122-strong members’ League of Cities of the Philippines would see a reduction of their share of their Internal Revenue Allotments from the national government.
Cities like Alaminos, Urdaneta, San Carlos, and Dagupan would lose tens of millions of national funding a year that mostly comes from the share in the Value Added Tax .
But the hardest to be hit among them would be Dagupan City.
Poor Dagupan, her hands are not only tied with her critical City Council that is bent to reduce her P568 Million 2011 budget. But the piggy backing of the 16 towns outside the P100 million requirements in the annual local income for cityhood would surely deprive her (Dagupan) by more than P20 million lost share in the IRA annually.
Here's what an exasperated Alaminos City Mayor Nani Braganza told me when I asked him about the bid of these 16 towns:
He deplored the bid for cityhood of these "nuisance" towns which skirted the requirement of P100 million annual local tax income that should be earned for two successive years before they qualify for cityhood.
He added that this requirement is on top of the other two qualifications of land area of 100 square kilometres and a population of 150,000 or more.
“We said we worked hard to be qualified as city. But the 16 new cities were approved by the Congress and Senate which we are questioning. For the record, we are not against the conversation of becoming a city,” he stressed.
The bid of the 16 towns caused uproar among the LCP because it would gnaw their IRA share from the national government.
(The article hereunder is a pull-over from my 2009 column Perspectives in northernwatchonline.net)
What is the benefit if a town is converted into city?
The benefit is financial.
The town will be getting an average of seven folds of its shares from the Internal Revenue Allotment (IRA) given by the national government. IRA is the 40 percent tax out of the 100 percent tax collected by the government through its Bureau of Internal Revenue (BIR), Bureau of Customs (BoC), and other governmental sources.
Take for example San Carlos City . Last year it collected P 55-60 million from its local revenue.
But why can Mayor Ayoy Resuello afford to give the 14th month pay of his more than 500 city employee’s last yuletide?
Because he got P323 million a year shares from the national government.
And this manna increases as long as government fights corruption and slippage worth P35 billion a year at the BIR and BoC particularly.
But why Mayor Ayoy is angry nowadays?
Because the Supreme Court have resurrected the dead Motion of Reconsideration of the 16 towns who want to be a city despite some of them earning only less than P 20 million of local tax collection annually against the amended requirement of not less than P100 million a year local tax collection
With the inclusion of these new cities, each of the 120 members of the League of Cities of the Philippines (LCP) would lose an average of P 4-5 million a month.
Ayoy said that last 2008 his city lost P22 million IRA in just six months after a division of the Supreme Court upheld the petition of the 16 towns. He added that for this year, his city would lose around P40 million.
“Paano naman ang mga existing na ciudad at mga projects na nakala-an sa aming mga barangays?” he angrily posed.
Dagupan City Mayor Al Fernandez said it was a big surprise for the high court to reverse its final decision of the 16 towns not to be a city.
He said the LCP, which he steered for three years, will file a Motion for Reconsideration for this decision.
He said Dagupan lost P17 million in 2008 after the division of the Supreme Court upheld the petition of the said towns.