Press Release
July 27, 2006

APPROVAL OF 2006 NATL BUDGET STILL BEST OPTION, MOST ADVANTAGEOUS TO LOCAL GOVT UNITS

Senate Minority Leader Aquilino Nene Q. Pimentel, Jr. (PDP-Laban) today urged the Senate not to give up on the passage of the 2006 national budget in order not to prejudice government agencies which are entitled to substantial increases in their appropriations to meet actual needs.

Pimentel said that local government units would be the biggest casualties if the new budget is dumped because they stand to lose P15 billion more in Internal Revenue Allotment (IRA).

The 2006 budget bill allocates P166 billion for the share of LGUs from the share of national taxes compared to only P151 billion last year. The IRA is automatically released to the recipient LGUs in accordance with the Local Government Code.

Pimentel, however, said the Senate should stand by its decision to scrap the P5 billion Kilos Asenso and P3 billion Kalayaan Barangay funds which are intended for selected provinces, cities, municipalities and barangay at the discretion of President Gloria Macapagal-Arroyo.

The Kilos Asenso and Kalayaan Barangay funds are an antediluvian throwback to the situation before the passage of the Local Government Code because it puts a lot more money P8 billion into the hands of the President to be disbursed as she pleases, he said.

According to the minority leader, Bohol Governor Enrico Aumentado, president of the Union of Local Authorities of the Philippines (ULAP), conveyed to him the position of local government executives for the approval of the 2006 national budget, amounting to more than P1 trillion but restoring the Kilos Asenso and Kalayaan Barangay funds.

He said Aumentado believes that the two lump sum items will be a boon to local government units.

But even if the Kilos Asenso and Kalayaan Barangay funds are eliminated, they will have more if the new budget is approved because of the additional P15 billion IRA, Pimentel said.

He said that not all the LGUs will benefit from the Kilos Asenso and Kalayaan Barangay funds and it will be up to the Presidents discretion to choose the beneficiaries of these funds.

And that is contrary to the letter and spirit of the Local Government Code which says there should be equal treatment of the local governments by the central government, the lone senator from Mindanao said.

He said the Senate junked the Kilos Asenso and Kalayaan Funds upon seeing that it would be used by the President to reward local executives who are willing to follow her wishes blindly especially now that she is facing another impeachment case.

As such, these funds are destructive of the letter and spirit of the Local Government which intends to free them from being pawns of Malacañang , Pimentel said.

They are plain and simple patronage funds that are meant to boost the Presidents buying power over local officials willing to be bought.

Pimentel said the approval of the 2006 national budget will render unnecessary the enactment of a supplemental budget that the Palace plans to submit to Congress.

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