Gani J. Petron Office of the Regional Treasury ARMM

A. ARMM in a Nutshell:

Created in 1989 RA No 6734 as amended by RA No. 9054 Covering the Provinces of Lanao del Sur, Maguindanao, Sulu, Basilan, Tawi-tawi, and the City of Marawi (5 Provs., 1 city, 113 muns., & 2,470 brgys.) Population of 4,120,795 (2007) and a Land area of 33,599 Sq. kms.

B. Environment/Factors: Worst poverty incidence of about 49% Unstable peace and order condition rebellion, politics, family feuds, and criminalities Injustices/oppression Non-contiguous territory Tribalism Least control of and benefit from rich natural resources

C. Devolution

1. Devolved agencies:

1.Housing and Land Use Regulatory

Board (HLURB)

2.Bureau of Southern Cultural

Communities (BSCC)

3.Dept. of Agriculture & Fisheries (DAF)

4.Department of Agrarian Reform (DAF)

5.Department of Education (DepED)

6.Dept of Science & Technology (DOST)

7.Commission on Higher Ed. (CHED)

8.Technical Education Skills Development

Authority (TESDA)

9.Department of Environment and Natural

Resources (DENR)

10.Department of Health (DOH)

11.Department of Interior and Local

Government (DILG)

12. Department of Trade and Industry

(DTI)

13. Department of Tourism (DOT)

14. Regional Board of Investment (RBOI)

15. Department of Labor and

Employment (DOLE)

16. Regional Tripartite Wage Board

(RTWB)

17. Department of Public Works and

Highways (DPWH)

18. Department of Social Welfare and

Development (DSWD)

19. Cooperative Development Authority

(CDA)

20. Department of Transportation and

Communication (DOTC)

2. Regionally created agencies: 1. Office of the Regional Governor (ORG) 2. Office of the Regional Treasurer (ORT) 3. Regional Commission of Bangsamoro Women (RCBW) CDO/BYA 4. Regional Planning and Development Office (RPDO) 5. Regional Ports and Management Authority (RPMA) 6. ARMM Development Academy (ADA) 7. Bureau of Cultural Heritage 8. Southern Philippines Development Authority ARMM (SPDA-ARMM)

3. National agencies 0perating through respective regional offices in ARMM: 1. Philippine National Police (PNP) 2. National Police Commission (NAPOLCOM) 3. Philippine Coconut Authority (PCA) 4. National Statistics Office (NSO) 5. National Authority (NFA) 6. Commission on Audit (COA) 7. Civil Service Commission (CSC) Bureau of Agricultural Statistics (BAS) 8. Commission on Human Rights (CHR)

4. National agencies with no established regional offices within

ARMM:

1. Government Service Insurance System (GSIS)

2. Social Security System (SSS),

3. National Anti Poverty Commission,

4. National Commission for the Urban Poor,

5. National Electrification Authority

6. National Food Authority

7. National Irrigation Authority,

8. National Commission of Indigenous People

9. PAG-IBIG Fund,

10. National Housing Authority,

11. Commission of Elections,

12. Department of Budget and Management,

13. Philippine Overseas and

Employment Authority,

14. Philippine Sports Commission

15. Philippine Tourism Authority

16. Department of Foreign Affairs,

17. National Economic

Development Authority

18. Central Bank and

19. National Economic and

Development Authority

D. PAPs Gap in ARMM

With National Programs (11)

DepEd, DOH, DSWD, DPWH, DAR, DA,

DENR, DILG, BFAR, CHED, DOST, TESDA

No National Programs (7)

DOLE, DOT, DTI, DOTC, CHED, CDA,

HLURB,

No Agency in ARMM (11)

LWUA, DBM, PPA, DOF, POPCOM, NEA,

NIA, NHA, NCIP, CHR, DOE

With Field Office in ARMM (7)

NAPOLCOM, PNP, NBI, CSC, COA, PCA, NSO

National Agency PAPs

PAPs implemented in ARMM

No PAPs in ARMM

23 PAPs 5 PAPs 18 PAPs

Delayed Fund Releases/ Thru RO

IX, X, XII

Fully funded in the GAA

No fund Allocation

PAPs Gap in ARMM

E. Basis of ARMM Fiscal Autonomy:

1. The Philippine Constitution provides that the Autonomous Region in Muslim Mindanao shall have the power to create sources of revenues (Par. 2, Sec. 20, Art X).

2. Fiscal Autonomy - Fiscal autonomy refers to the powers of the autonomous regional government of the Autonomous Region in Muslim Mindanao (ARMM) to create sources of revenues and budget the same for development programs, projects, and services. This fiscal autonomy is contemplated under Article IX of Republic Act No. 9045 (ARMM Organic Act) more particularly Sections 1 and 2 of Art. IX.

The fiscal power of the ARMM would sound meaningful

but is restricted under Section 3, Article IV (Powers of

Government) and Section 7, Article IX (Fiscal Autonomy)

of the Organic Act.

In reality, the 25 years or more exercise of the ARMM of

the said power proved that it is far from adequate. In fact,

the regional government is able only to generate less than

5% of its total yearly budget requirement. This means that

the region is 95% dependent to the subsidy of the national

government to keep it operating and deliver minimal basic

services.

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F. Main Sources of Incomes/ Revenues

1. Budget/Subsidies - shares from the national coffers, & funding assistance from GOP & donors

YEAR ARMM Year Budget

1991 792,812,000.00

1992 981,955,000.00

1993 1,933,613,000.00

1994 2,089,772,000.00

1995 2,484,772,000.00

1996 2,180,275,000.00

1997 2,507,870,000.00

1998 4,940,539,000.00

1999 4,370,334,000.00

2000 4,326,421,000.00

2001 4,980,574,000.00

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2002 5,073,285,000.00

2003 5,285,972,000.00

2004 5,124,665,000.00

2005 7,377,972,000.00

2006 7,224,806,000.00

2007 9,072,065,000.00

2008 8,614,259,000.00

2009 9,994,824,000.00

2010 9,848,637,000.00

2011 12,943,728,796.00

2012 12,468,623,443.00

2013 17,379,428,000.00

2014 20,525,939,000.00

2015 25,229,264,000.00

2. ARMM Tax /Revenue Share, Natural Resource Taxes -70-30% (Local Fund)

YEAR LOCAL FUND

1991 -

1992 -

1993 -

1994 97,335,025.34

1995 88,945,779.72

1996 129,555,949.00

1997 194,487,404.92

1998 191,694,997.33

1999 169,904,558.42

2000 136,071,229.77

2001 201,579,892.08

Natural resources taxes and incomes - 50-50% on strategic minerals revenues and taxes (Art XII, RA 9054)

2002 188,476,533.54

2003 387,531,770.08

2004 479,024,291.83

2005 738,854,978.23

2006 695,082,903.17

2007 615,719,947.45

2008 703,146,090.49

2009 669,894,085.83

2010 764,746,374.05

2011 737,679,122.90

2012 686,572,320.91

2013 1,254,012,881.32

2014 1,447,745,430.10

2015 (Jan-June) 977,487,116.35

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G. Other Sources of Revenues (Still to be fully tapped): 1. Incomes/revenues may include profit shares from businesses(GOCCs) and land rents from EI regimes 2. Loan proceeds - local & foreign loans including bond floating 3. Regioanl taxes (ARMM Revenue Code, Fishery Code) 4. May engage in income generating business/projects

5. May contract loans and issue treasury bills/ notes/papers 6. May forge economic agreements to generate block grants, donations,

endowments, & foreign asssistance

H. Issues: 1. Taxing powers and resources under DOF/other income

generating agencies are not devolved to ARMM 2. Non-devolution key program and projects on education,

health, agriculture, public works others 3. Collections & remittance of taxes remain in the

bureaucratic national agencies covered by numerous laws and regulations/systems (regulatory matters)

:

4. ARMM subsidies are yearly appropriated per agency by

Congress and released periodically by DBM 5. Circuitous ARMM share processes per JC-2004-1 (RDO RR RAD (BIR national) DBM (appropriated by congress) ARMM Agencies & LGUs) 6. ARMM loans & bond issuance subject to rigid national

requirements (DOF and BSP)

7. ARMM budget mainly covers personnel services & MOOE

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8. ARMM-ARG has no line authority over LGU treasurers. Only about 2 to 3% of local fund is regionally generated (MMA no. 49 mainly add-on taxes)

9. ARMM has been deprived of its tax share from large

taxpayers due to remittance system

10. Absence of Islamic Finance Institutions/products and services

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I. Some Alternatives: 1. Transfer of powers/functions, and resources with

adequate transition assistance and mechanisms 1.1 DOF BIR, BTr, & BLGF (some of needed powers/functions)

Formulate long range, medium-term and annual plans covering the governments resource mobilization efforts

Supervise, direct and control the collection of government revenues Act as custodian and manage all financial resources of the regional

Government

Formulate, institutionalize and administer fiscal and tax policies

1.2 DOTC (some of the needed powers/funcions): Integrated/comprehensive transportations and

communications policies, plans, programs, and systems

Administer and enforce laws, rules/regulations on

transportations and communications Transportations and Communications research

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1.3 DBM-MSO: Compensation and position classification power

2. Adoption of fair and practicable formula and system in

determining and releasing the just and equitable share in the national coffers

3. Lumpsum appropriation and release of the yearly

budget

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4. Simplified remittance systems by retention of revenues and tax shares

5. National government guarantee of loans and bond

issuance

6. Deal with GOCCs in terms of representation, relationship, access to programs and services, and benefits

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End of Presentation Shukran!!!