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PIA Press Release
2008/01/22

PGMA assures cities of P3-B "Kilos-Asenso" assistance under 2008 budget

Manila (22 January) -- President Gloria Macapagal-Arroyo assured yesterday the 120 members of the League of Cities of the Philippines (LCP) that the P3-billion "Kilos-Asenso" fund in the 2008 budget shall be used to help out old cities whose Internal Revenue Allotments (IRAs) will be greatly reduced by the conversion of 16 municipalities into cities last year.

The LCP membership, led by Mandaluyong City Mayor Benjamin C. Abalos Jr., trooped to Malacanang yesterday afternoon to present a letter to the Chief Executive to "express our continuing support to the President and "to take part in your (President Arroyo's) efforts to steer the country towards long-term economic stability and sustainable development."

At the same time, the city mayors' league also appealed to President Arroyo "to cushion the impact of such conversion through the Amelioration Fund she promised on March 21, 2006 or through some other means."

The President, together with Department of Budget and Management (DBM) Secretary Rolando Andaya Jr., met with the LCP officials at the Heroes' Hall of Malacanang just before she proceeded to her scheduled school visit in Muntinlupa City.

The 16 new cities - whose conversion the MLP had earlier questioned before the Supreme Court - will eat into the expected IRA increases of the LCP members, said LCP president Abalos.

The LCP had also pleaded with the President to "restrain DBM from further releasing the additional IRA of these newly converted cities and instead set aside the funds in escrow until the High Court resolves the case."

"Malaki ang mawawala sa amin," explained Mayor Abalos, who revealed that the organization had so far filed four cases with the Supreme Court last year questioning the conversion of municipalities which, he said, did not meet the minimum income and population requirements mandated by the Local Government Code (LGC) to become cities.

For a municipality or town to graduate to cityhood, it must have the following three minimum requirements: P100 million in locally-generated funds; 150,000 in population; and 100 square kilometers in land area.

The LCP members were supposed to receive a total of P6 billion additional IRA this year but, because of the 16 new cities, will be getting only P4.7 billion, or some P1.3 billion less than expected.

The LCP said the most affected city based on actual amount is Davao City whose expected 2008 IRA increase is P263.6 million, but which will only receive P69.5 million in additional IRA, or a difference of P194 million.

On the other hand, Baguio City Mayor Reinaldo Bautista said the summer capital - an education center with a big transient population of students and workers - will "lose" P45 million in supposed IRA increase this year.

The Fiscal Year (FY) 2008 IRA Share is based on the total amount of P210.7 billion IRA for 2008; the 2000 National Census of Population; and the 2001 Land Area.

The LCP filed its first case with the Supreme Court on March 27, 2007 after six towns were converted into cities by Congress through their respective congressmen. Almost two months later on May 4, 2007, another case was filed questioning the conversion of six new towns.

The third case was filed on June 14, 2007 following the conversion of three towns; while a consolidated case was filed on Sept. 28, 2007 after Naga town in Cebu was turned into a city.

The LCP also called for the "review of the cityhood law to ensure a rational basis for cityhood which takes into consideration the critical role of cities as engines of growth of the country."

Budget Secretary Andaya said it was agreed upon during the meeting that the LCP shall lobby with Congress to pass the 2008 budget with the Amelioration ("Kilos-Asenso") Fund intact. (OPS) [top]

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