Kicking off their protest against the ‘unconstitutional’ conversion of towns into cities Monday, current cities say they will first exhaust opportunities for dialogues.

The organization of the country’s 136 cities is considering drastic forms of protest if the national government will allow the conversion of 43 municipalities that have not met the income requirement for cityhood but will eat into the existing cities’ share in the internal revenue allotment (IRA).

(For a list of the IRA share of LGUs from 1992 to 2007, visit the database on Newsbreak’s Governance and Democracy website here)

Among the possible moves discussed by members of the League of Cities of the Philippines (LCP), Newsbreak learned, are the non-remittance of the city governments’ payments to the Bureau of Internal Revenue (BIR) and the Government Service Insurance System (GSIS), and, if push comes to shove, shutting down city hall operations nationwide.

“We will hold on to the money as long as possible,” said one city mayor, explaining the idea of withholding remittances to the BIR and GSIS.

“Matira matibay” between the national and local governments, said another mayor, when we asked how long they intended to stop work at city halls, if and when they reach that point.

The number of city government employees nationwide and the total amount of their income taxes and GSIS dues were not readily available. But being centers of economic activities, cities are presumed to employ workers than municipalities do. Fifty-five percent of the population is in urban centers, the league says.

The league says the creation of these too many cities will considerably lessen the expected IRA of existing cities this year, and thus prevent them from efficiently planning their operations and projects.

Mandaluyong City Mayor Benhur Abalos, president of the League of Cities, likened this development to an employee suddenly being told that his salary will decrease. “If you’re receiving P20,000 a month, you budget your rent, food, etcetera, based on that a month. What will you do if your boss suddenly tells you, ‘I’m giving you only P12,000 from hereon’?”

In an interview with Newsbreak, Abalos didn’t confirm the moves being considered by some of his colleagues, and stressed that the league will exhaust all opportunities for dialogues with Congress and Malacañang before member-cities resort to anything drastic. He warned, however, that if standards for the conversion of municipalities into cities will not be fixed and strictly implemented, the Philippines might have “extinct cities… in 10 years.”

Newsbreak talked to several officials of the league on the eve of their protest kickoff, which, in the meantime, will call for the raising of the flag at half mast every Monday (local government units and national government agencies hold flag ceremonies only on Mondays) and the wearing of black arm bands by city hall employees.

Late Sunday evening, the league cancelled its plan (which it announced in a newspaper advertisement on Saturday) for the reading every Monday of a manifesto of “indignation and protest” against the granting of cityhood to unqualified municipalities during the flag ceremonies. Without a unanimously approved draft, the city mayors will just explain the IRA-cityhood issue to city employees in the manner they deem best.

The LCP is protesting the conversion last year of 16—originally 18—municipalities into cities without meeting the requirement for the minimum locally generated income of at least P100 million a year. The league questioned the conversions in three separate filings with the Supreme Court in March, May, and June. A consolidated complaint was filed in September, asking the court to issue an injunction on the increases in the IRA shares of the new cities.

The cityhood bills of the 18 towns were filed by their respective congressmen and approved by Malacañang, which, under President Arroyo since 2001, has approved the creation of the most number of local government units (LGUs). Forty cities have so far been created in Arroyo’s watch, prompting her critics to interpret such move as a form of political accommodation. (Click here to read “GMA Creating Too Many LGUs.”)

Of the 18 towns, two eventually met the minimum income requirement: San Juan and Navotas, both in Metro Manila. The 16 others have approved in plebiscites the cityhood acts, and are already included in the division of the IRA of cities this year.

The case with SC isn’t rendered moot and academic, however. If the tribunal decides to nullify the conversion of the 16 cities, the city-rate IRA they got in January and will be getting in succeeding months will be reverted to the old number of cities.

The LCP is also lobbying against House Bill 24, which Zamboanga Sibugay Rep. Dulce Ann Hofer (Kampi-LDP, 2nd district) filed last July. The bill seeks to automatically convert into cities the capital towns of 27 provinces where there are no existing cities. (Click here for the list of provinces and their capital cities and towns.) And because these towns are earning less than P100 million annually, Hofer wants them exempted from this requirement.

Most of the capital towns covered by Hofer’s bill are third class, or those earning only P30 million to P40 million a year; first class, earning P50 million or more; and fourth class, earning P20 million to P30 million. Among these capital towns is Ipil of Zamboanga Sibugay, where Hofer’s father is governor and who’s reportedly grooming her (the congresswoman) to be his successor in 2010. (Click here for the list of capital towns and the factors that affect their current IRA.)

Section 450 of the Local Government Code requires that for a municipality or a cluster of barangays to be converted into a city, it has to have an average annual income of at least P20 million, and any of the following: a contiguous territory of at least 100 square kilometers or a population of at least 150,000 inhabitants. Republic Act 9009 amended this provision and raised the minimum income requirement to P100 million.

In full page newspaper advertisements and in press conferences the past days, the LCP pointed out that despite the “growing needs” of cities to cater to both residents and transients, they will be getting too little IRA increases if more cities are created.

Abalos cited the case of Puerto Princesa, which expected an IRA increase of P146.1 million this year but which is receiving only P1.7 million because the 16 cities created last year, and which they are questioning before the Supreme Court, have eaten into the cities’ collective IRA.

Davao City was expected a P263.5-million increase in IRA, but will be getting only P69 million for the same reason. Zamboanga City’s P150.84 million will be cut to P35.87 million; Santiago City’s, P84.5 million to P2.71 million; Iligan’s, P85.19 million to P16.36 million; Butuan’s, P83.29 million to P15.12 million; and Calbayog’s P72.42 million to P6.58 million.

The considerable drop in the expected IRA increase for 2008 was caused only by the conversion of the 16 cities, Abalos pointed out. “How much more [decreases] if the 27 municipalities [in the Hofer bill] are converted?”

A study by the Department of the Interior and Local Government estimated that when a town is converted into a city, its IRA is usually tripled. An old city, on the other hand, loses a third of its IRA when a new city is formed.

Hofer have told reporters that she wants the capital towns to be granted cityhood so they will have “more autonomy and taxation powers,” and thus be able to meet the demands of “their role as the commercial, political, and socio-cultural centers in their respective provinces.”

Abalos, although commending Hofer’s reason for the proposal, said the desire to help capital towns “shouldn’t be romanticized.” There are other ways to help these municipalities, he said, like lobbying with various national government agencies for infrastructure, educational, and health projects.

If the pattern continues of existing cities being made to deliver the same basic services to a growing population with less funding, then “it will lead to the extinction of cities…in 10 years,” Abalos told Newsbreak. “When will the bleeding stop?”

Over the weekend, league officers were alarmed by news that Hofer’s bill had been approved by the House committee on local government and will be submitted to the plenary when Congress opens this week. The league was not consulted nor called to any committee hearing on HB 24, Abalos. Newsbreak could not immediately confirm the reported committee approval.

Abalos said league officers will go to Congress to ask that HB 24, if indeed it had been approved, be remanded to the committee. Then, he said, the league will “show them the numbers” to prove that creating more cities without regard for the standards set by law will not be feasible.

Of the 56 members of the committee, 29 are former local officials (including the chairman, Rep. George Arnaiz, former governor of Negros Oriental), 12 of whom are from cities whose expected IRA will be lessened if the Hofer bill is enacted. Eight of the committee members represent provinces whose capital towns will benefit from the Hofer bill. (Click here for the backgrounds of the members of the House committee on local government.)

One league official, who requested not to be named, said the existing cities are determined to show that they are a force to reckon with. He recalled that one reason former Surigao del Sur Rep. Prospero Pichay lost in the 2007 senatorial elections was because he pushed the creation of the 16 cities despite the league’s protest. The city mayors didn’t support his senatorial bid.

—With research assistance by Jesus Llanto

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