SPEECH OF SENATE PRESIDENT PRO-TEMPORE RALPH G. RECTO
League of Municipalities of the Philippines
Marriot Hotel, Manila
February 10, 2016

1. Bigger IRA, Higher LGU Share

Equal sharing in a bigger pie. LGU share from internal revenues should be increased from the present 40% to 50%. Likewise, there must be 50-50 split on the gross collection from “national wealth” income.

2. Include VAT Collections on Oil in IRA

VAT on gasoline and diesel paid by motorists, or by farmers for their tractor fuel, is not included in the IRA share of LGUs. As a result, local governments are deprived billions of pesos as legitimate share of what is clearly internal revenue.

3. Flexibility in the Bottom-Up Budgeting (BUB) Projects

LGUs must be given more leeway in selecting BUB projects. They must be allowed to name projects based on their development plans and the actual needs of their people. An LGU should have the discretion to identify 40% of the BUB allotment. The rest it can fill pursuant to the national government menu.

4. National Government Must Observe Police -to-Population Ratio

Police deployment in LGUs must follow at all times the standing cop-to-people ratio. If the prevailing national ratio is 1:600 based on PNP personnel strength, then such must reflect on the ground. Filling the unfilled positions in PNP alone would translate to an additional new 16 policemen per town.

5. Sustain National Government (NG) Support in Upgrading Local Health Facilities

Limited LGU funds simply cannot fund the modernization of locally-run and -funded public health clinics and hospitals. NG equity on their operations from manpower to resources must be sustained. The LGUs deserve these as their dividends from the sin taxes their constituents pay.

6. Rationalize DBM Power to Review of Local Budgets

For lesser interference from Manila, the review function of the DBM on the budgets of provinces, cities and towns should be lifted if they have consistently complied with the standards of public expenditure management. Recipients of the good fiscal housekeeping should be rewarded with reasonable autonomy. After all, COA still retains oversight.

7. LGUs as Implementing Agencies of National Government Projects

Underspending can be cured if LGUs will be designated as implementors or contractors of NG infrastructure projects. NG should joint venture with LGUs in order to accelerate completion of public works projects within the capacity of LGUs to construct. This will also hasten project identification.

8. Raise Personal Services (PS) Ceiling to Accommodate Salary Standardization Law (SSL) IV for LGU Employees

Equal pay for equal work. Sixth-class towns can only implement 65 percent of the amount prescribed by the SSL. Even if the LGU can afford to implement a higher percentage, they are restricted from fully complying with the law. LGUs should be allowed to increase pay higher than what is prescribed for their income class.

9. Subsidies for LGU Implementation of Solid Waste Management Act

Most LGUs cannot afford their own garbage collection, waste treatment, and disposal facilities. As a health issue, it is imperative for the national government to provide subsidies under the General Appropriations Act in helping LGUs implement provisions of RA 9003.

10. Automatic Release of LGU Share in IRA and National Wealth

LGUs have long grappled with the challenge of expediting the release of their IRA and national wealth share. A mechanism to solve this problem should be developed by the national agencies concerned working closely with LGUs. One scheme that can be pursued is the retention and remittance to the LGUs of the national wealth collections in their jurisdiction.

11. Strengthen Public Financial Management (PFM) in LGUs

National government must provide the training and other support needed by LGUs for them to exercise greater responsibility in financial management. The PFM must focus on areas where a specific LGU needs improvement whether in revenue generation, accounting, procurement or auditing.

12. Meaningful Coordination between LGUs and NGs Implementing Devolved Functions

Agencies with large budgetary footprint but minimal presence in the grassroots, like DoH and DA, should treat LGUs as full partners in implementing their projects and not as mere recipients of programs dictated from above.

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