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Sen. Pimentel's Letter | Supreme Court Decision | Article in the Phil. Daily Inquirer

RAMOS ORDER ILLEGAL

SC bars IRA cut by Palace

By Rocky Nazareno
as reprinted from the Philippine Daily Inquirer, Thursday, July 20, 2000

The Supreme Court has barred Malacañang from withholding five percent of the Internal Revenue Allotment of local government units.

In an en banc decision, the High Court upheld a petition filed by Sen. Aquilino Pimentel who had questioned the legality of Administrative Order No. 372 during the Ramos administration which ordered an embargo of 10 percent from the IRA of LGUs.

AO 372 was issued by then President Fidel Ramos on Dec. 27, 1997 to cushion the impact of the Asian financial crisis on the local economy.

Under the Estrada administration, the same practice was continued with the issuance of AO 43 which provided that five percent be withheld from the IRA.

The Supreme Court barred successors of original respondents former Executive Secretary Alexander Aguirre and Budget and Management Secretary Emilia Boncodin from enforcing AO 372.

As such, even the current Executive Secretary Ronaldo Zamora and DBM Secretary Benjamin Diokno are likewise covered by the prohibition.

"The Constitution vests the President with the power of super vision, not control, over LGUs," said the High Tribunal.

The Court said that while the President may "issue advisories and seek their cooperation in solving economic difficulties, he cannot prevent them from performing their tasks and using available resources to achieve their goals."

The SC acknowledged that while the President had the authority to adjust the IRA of LGUs in case of "unmanageable public sector deficit," this should be done after consulting with "presiding officers of both Houses of Congress and, more importantly, with the presidents of leagues of local governments."

"(There is a) need for interaction between the national government and LGUs at the planning level in order to ensure that local development plans ... hew to national policies and standards," the Court underscored.

According to the High Court, there was no such consultation before AO 372 was passed which was the reason why Pimentel and former Bulacan Gov. Roberto Pagdanganan, who was then the president of the League of Provinces of the Philippines and chair of the League of Leagues of Local Governments, filed their respective petitions with the Supreme Court.

More news information at the website of the Supreme Court of the Philippines