Press Release
July 20, 2014

Luzon mayors seek speedy Congress OK
of Koko's "Bigger Pie, Bigger Slice" bill

Municipal mayors of Luzon threw their strong support behind the "Bigger Pie, Bigger Slice" bill of Senator Aquilino "Koko" Pimentel III in a Luzon Governance Declaration adopted during their just-ended annual Cluster Island Conference in Cebu City.

Mayor Ferdinand Abesamis, president of the Luzon Island Cluster, said the town mayors have urged Congress for a "speedy approval" of the measure that expands the tax base and increases the shares of local government units (LGUs) from the national taxes.

In Pimentel's Senate Bill 2045, it seeks to amend Section 284 of RA 7160 in two ways: first, by expanding the tax base from where the sharing is made between the national and local governments, and second, by giving LGUs a bigger share or slice of the expanded tax base.

The "Bigger Pie, Bigger Slice" concept seeks to replace the words "national internal revenue taxes" with the more appropriate term "national taxes."

The proposed measure will scrap the internal revenue allocations (IRAs) and replaced by shares in the national taxes (SNTs), a huge increase that would nearly double the funds automatically appropriated and released annually to LGUs.

"The IRA shares of LGUs have been well spent on local projects. No doubt the IRA has been an engine of growth in the countryside, because it was well spent," said Abesamis, president of the Luzon Island Cluster.

"Increasing the LGUs' share in the national taxes by replacing the IRA with the SNT is a major step forward. It will be money spent wisely," he added. The amendment, Abesamis said, "is long overdue after 23 years of the Local Government Code of 1991."

More than 500 Luzon mayors who met in the two-day Luzon Island Cluster Conference issued the Luzon Governance Declaration of 2014 unanimously endorsing Pimentel's pet bill that is pending approval. Complimenting Pimentel's bill is a House measure filed by Rep. Mel Senen Sarmiento of Western Samar.

The mayors said they would ask the Senate and the House of Representatives to expedite approval of the two measures.

Earlier, the League of Municipalities of the Philippines (LMP) national president Mayor Leonardo "Sandy" Javier presented Speaker Feliciano Belmonte a copy of the Declaration at the conclusion of the conference. Belmonte was one of the main speakers at the Waterfront Hotel in Cebu City.

Abesamis said he would endorse a copy of the Governance Declaration to Senate President Franklin Drilon when the Congress will open its Second Regular Session.

He said the Luzon mayors are building upon the original spirit of the Code, principally the handiwork of then Senator Aquilino "Nene" Pimentel Jr. that paved the way for the first major devolution of powers and resources to LGUs.

He described as "just and equitable, and ordained by the Constitution" the proposal to expand the tax base in determining the LGUs' shares from the national taxes. As proposed, it would include collections of the Bureau of Customs (BOC) as well as those of the Bureau of Internal Revenue (BIR).

The Luzon mayors, Abesamis said, also backed Pimentel's proposal raising from 40 percent to 50 percent the shares of LGUs from the collections of national internal revenues, including VAT (value added tax), of the BIR as well as tariffs and customs duties of the BOC.

The additional funds would make a big difference in the LGUs' capacity to expand basic services, maintain peace and order, and implement anti-poverty programs and projects designed to make growth more inclusive, create more jobs and ensure a sustainable future, Abesamis said.

Former Eastern Samar Gov. Lutz Barbo, who presented Pimentel's measure, said that, "we would not have the progress that we are seeing all around us, outside of imperial Manila" without the Local Government Code, which he described as "a product of a compromise."

"It's about time that we amend the fiscal provision of the law" in compliance with the mandate of the Constitution, said Barbo, adding local chief executives proved their worth in steering their respective localities to progress in the last two decades.

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