With less IRA, some cities may lose competitiveness
By Jesus F. Llanto
Newsbreak, Researcher
Tuesday, 08 July 2008–Cities that have experienced significant cuts in their revenue shares starting this year due to the creation of new cities are likely to lose their competitiveness and, as a consequence, miss opportunities to attract investments.
This was the opinion expressed by local governance experts and local officials at the recent launch of the 2007 Philippine Cities Competitiveness Report (PCCR) of the Asian Institute of Management (AIM) in Makati City.
Source:www.davaocity.gov.ph
Done every other year, it was the fifth time that the AIM measured the business-friendliness of select cities in terms of infrastructure, cost of doing business, dynamism of the local economy, human resources and training, responsiveness of the LGUs to business needs, and quality of life.
The study classified this year 90 cities into three categories: Metro cities, or those comprising metropolitan areas in Manila, Davao, and Cebu; mid-sized cities, or non-Metro cities with population more than 200,000 residents; and small-sized cities, or those with less than 200,000 residents.
Wholesale conversion
Experts and local officials said the almost wholesale conversion of municipalities into cities in the past two years has reduced the old cities’ share in national taxes or the Internal Revenue Allotment (IRA), which is used by LGUs to finance their operation and deliver basic services.
The direct effects of less IRA on infrastructure development, and consequently on the cities’ general competitiveness, may show in the next round of surveys to be conducted by the AIM Policy Center. (abs-cbnNews.com/Newsbreak)
Mr. Llantos,
You are tackling an interesting but complicated topic with the issue of funding for cities in the Philippines. If the big cities like Metro Manila, Makati, etc. would only be relying mainly on dole-outs from the Internal Revenue, they will die, at the rate that funds are being reduced to reallocate to newly created ones. Cities should have ways of raising their own income. I would suggest that further studies be done both by government policy makers and interested private citizens like youself on who sucessful world cities do it. I’d be happy to correspond with you and provide you with scholarly materials on this matter.
Greggie
Gregoria de Jesus (Pen Name)
July 24, 2008 at 10:54 pm