IRA Share Distribution - the tale of six cities (Part 3)

A particular issue which has become part of the history of our legal jurisprudence in this country
actually stemmed from the very particular concept of resource allocation spelled out in the Local
Government Code. Last Thursday, we wrote that out of the total internal revenue of the country, 40
percent is set aside for the local governments. The IRA is divided among the four LGU classes as
follows: provinces - 23 percent; cities - 23 percent; municipalities - 34 percent; and barangays - 20
percent. The share of each LGU class is then divided among the LGUs in the class.

Among the four classes of LGUs, the cities and municipalities are the closest to each other. Actually,
except for the code-provided criteria in defining cities and municipalities, there seems to be no clear
distinguishing features between them. Some municipalities are actually more city-like than some
cities. Except for the population, land area, and income criteria, cities are the same as municipalities.
But look at how the IRA share are distributed to each class and to the LGUs in each class.

Under the LGC, cities get 23 percent of the pie while municipalities get 34 percent.The latter seem to
get 50 percent more than the former. But realize that originally, there were only less than a hundred
cities and more than a thousand municipalities. So, on a per square meter, or per capita basis, cities
get tremendously more than municipalities. No problem with provinces and barangays, they are a
league of their own, and very few barangays aim to secede from their original cities municipalities
and become separate LGUs. There's also no strong incentive for a city or municipality or a group of
LGUs to create new provinces, except to maximize IRA shares or increase the number of political
positions. But municipalities want to become cities!

This is just a side-issue of the entire resource allocation policy, but it highlights the need for a fuller
understanding of the existing policy/policies and how government needs to improve the same in the
light of the need to balance national development goals and interests with local concerns and the
need for equitable and inclusive growth. The Local Government Code is one of the best pieces of
legislation in the country but it's far from perfect, and needs to be understood better because issues
arise due to misinterpretations. Worse, the gems of development-related concepts in it are often
drowned by emotional self-interests.