EL SALVADOR City stands to lose P120 million a year after the Supreme Court ruled its conversion was unconstitutional.

Mayor Emelita Almirante said they have been receiving P13 million a month when their Internal Revenue Allocation increased after they became a city on June 27, 2007 (not 2005 as earlier reported).

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She said they used to receive only P3 million a month when El Salvador was still a third-class municipality.

With a fatter budget, Almirante said they were able to buy their own heavy equipment, concretized the roads in the poblacion area, and put up street lights.

"How can we maintain all of these if our IRA will be slashed," Almirante told Sun.Star Cagayan de Oro.

Last Tuesday, the Supreme Court ruled that the conversion of El Salvador and 16 other new cities nationwide as "unconstitutional."

Almirante and local officials said the Supreme Court ruling was “unfair and discriminatory."

“We have complied the requirements and went through the proper process. Nadelantar lang tungod adtong kay Erap (Edsa II) pero napasa na to before that time. Selfish pud kaayo sila (League of Cities of the Philippines),” Almirante said.

Almirante said there was a Department of Justice decision that supports the conversion of their town. They held a plebiscite last June 27, 2007.

“Nagcharter day na mi adtong June, kalain ba sad nga bawion lang kalit. Daghan na mi’g nagasto, like the installation of streetlights along the highway from Barangay Molugan to Barangay Sinaloc. Kun ma revert mi unsaon namo pagmaintain ana, bisag sa kuryente lang. Mahimo nang white elephant nga project,” Almirante said.

In the one-year it has been a city, Almirante said, they were able to buy their own heavy equipment and paved their roads. After they received their first IRA as a city, Almirante claimed they have done so much for the improvement of their city.

“Before when we were still a municipality our IRA was P37 million annually but when we became a city we received P146 million allotment. Daghan na kaayo mi’g mabuhat ana para sa ikalambo sa syudad. Nakatilaw na mi pagka syudadùngano bawi-on pa man. Adtong nag apply sila (older cities) for cityhood, miagi man sila ani,” Almirante said.

Almirante added: “Adtong una nahimo nang syudad ang Cagayan de Oro, tartanilya pa ang major public vehicles. I know because my father (Pedro Salvador Baculio then congressman) was the one that filed the bill for the cityhood of Cagayan de Oro.”

Almirante said although they have yet to receive an official copy of the high court ruling, she has already instructed her Local Finance Committee to go to Manila to confer with their legal counsels to file a motion for reconsideration before the Supreme Court.

Not yet final

Reacting to the SC decision stripping El Salvador of its cityhood status, Misamis Oriental Governor Oscar Moreno pointed out that LCP has been opposing the creation of new cities because this would drastically reduce their share in the Internal Revenue Allotment.

The IRA, equivalent to 40 percent of the revenue collected by the Bureau of Internal Revenue (BIR) for the third preceding fiscal year, is divided among provinces (23 percent), cities (23 percent), towns (34 percent) and villages or barangays (20 percent).

The 23 percent of the IRA allocated to cities is currently divided among 118 existing cities. Thirteen municipalities, including El Salvador, were recently granted cityhood status which would have brought the total number of cities to 131 hence, the LCP opposition.

But Moreno said he understands why towns clamor to be transformed into cities. Moreno said there are 15 locally imposable taxes of which provinces can impose eight. Towns can impose seven of these types of taxes while cities can get to enforce all 15.

Also one of the reasons why the LCP petitioned for the reversion of the said cities is because, Gov. Moreno said, at the start of each year the Department of Budget and Management (DBM) scalps a portion from the IRA to help new cities. Although this will affect the province, Moreno said he still favors El Salvador to retain its city hood.

“It’s like a family, kun naay mulambo nga membro sa imong pamilya, nganong moreklamo man ka,” Gov. Moreno pointed out.

Moreno, however, said there is still hope that the SC ruling stripping El Salvador of its cityhood will be reversed as the decision is not yet final and executory which means El Salvador can still file a motion for reconsideration.

Moreno pointed out that seven Supreme Court Justices are set to retire next year and there is a big chance that the issue will get carried over to the next roster of Supreme Court justices. Moreno noted that the vote on the decision on cityhood laws used by El Salvador and the other municipalities to gain their present status was close (6-5).

Of the SC Justices that concurred with the decision penned by Justice Antonio Carpio, two are set to retire next year, namely Senior Associate Justice Leonardo Quisumbing and Associate Justice Ma. Alicia Austria-Martinez. How the seven new Supreme Court Justices will vote on the issue is anybody’s guess, Moreno said.

IRA obsolete

For his part, City Treasurer Elmer Pacuribot, Chair of the Local Finance Committee, told Sun.Star Cagayan de Oro that there is a loop hole in the formula for the sharing of the IRA calling it “downright unfair” as the IRA is pooled from revenues of local government units.

Citing Presidential Decree (PD) 231, Pacuribot claims that the Local Government Code is just a copy of the said decree dating back from the Marcos era and is therefore obsolete.

“Ang IRA dili na gikan sa national, gi-pool na from LGUs. Ang loop hole anaa sa shares nga nagadenpende kaayo sa land area ug population. Dawbi, mapihig mi ani sa Claveria, mas dako ilang IRA. Unsay na-contribute anang Claveria sa IRA,ö Pacuribot argued.

Pacuribot further argues that the host city should retain at least 10 percent of the excise tax that the national government has been taking from the Asia Brewery Incorporated (ABI) since it is the city’s resources that the company has been exploiting.

“Wala koy labot, bisan tawagon pa ang syudad nga baryo, pero hatagan miÆg bahin anang excise tax. Nganong sa Ilocos (Tobacco Tax) nabuhat man sa ila nga pareha ra man nang æsin taxesÆ kay brewery man ning sa amo,” Pacuribot said.

Pacuribot added: “Ang klaro ani nga petition sa LCP kay crab mentality. Dili man ma-reduce ilang share kay duna ma’y regular increase sa IRA every year. Sa ato pa, nakuhaan lang ang increase sa ilang share.”

With this current mess, Pacuribot told this paper that it might be better if the country change into a federal system so that the bigger chunk of revenue will go to the LGU that generated it.

“Mas may pa nga magsupport ta kay Pimentel (Aquilino) nga magfederal system kay bali ang sharing 70-30. Tan-awon nato kinsay gutmon nga gagmay’ng syudad ana,” Pacuribot said.

Apathetic view

“Nasyudad na ba diay?”

Thus, was Virgina Macapayag, 48 years old, who owns a barbershop in the city’s public market for 11 years, sarcastic reply when asked how she felt now that the city might be reverted back to being a municipality.

“Naa baya pud pag-increase sa mga customer diri. Ara-arang na baya. Sayang pud kong mabalik mi pagka munisipyo,” Macapayag told Sun.Star Cagayan de Oro.

Presentacion Oco, owner of a stall in the said market felt no clear change in their business transactions now that their town has been a converted to a city.

“Mao ra man gihapon. Wala’y increase sa business tax, mao ra pud cedula among gabayran. Wala langùmingaw pa man gudùdili pa angay gyud nga isyudad ni,” Oco said adding: “Kung walay iro maglayog diri sa merkado dili gyud mabibo. Dili pa unta karon.”

Fe Ladelfa, a businesswoman since 1994, said that for their town to really be a city there should be at least one big store because ever since she has still to travel to Cagayan de Oro to purchase supplies for her dress shop.

“Wala man, mingaw gihapon. Unsaon man nga wala ma’y tao. Adtong una, nagkarenderia ko pero miundang ko kay sige kapan-os akong niluto kay wala’y customer pirmi dayon gamay ra gud mi karenderia diri,” Ladelfa said.

Ladelfa said it’s hard to find even hook and eye, garter or a certain color of thread in their city.

“Sa Cagayan pa man gihapon ko mangompra. Bisan pa’g liboton nimo ni run wala kay Makita baligya isag dagom sa makina,” Ladelfa said.

(November 21, 2008 issue)