CITY OF SAN FERNANDO – Of all the municipalities in the province of Pampanga today, Mabalacat could be the fastest developing town in terms of investments and income. It is a first class municipality that covers about 90 percent of Clark Freeport Zone’s (CFZ) total land area. The municipal government likewise enjoys huge opportunities brought by the booming sunshine industries within the perimeter of the Subic-Clark-Tarlac expressway (SCTEx).
The gateway of Pampanga in the north and only less than a hundred kilometers from Metro Manila, Mabalacat indeed has the best strategic location as far as business and investments is concerned.
From post exchange (PX) goods from the former Clark Air Base’s (now CFZ) commissary to small and medium industries like Trust International Paper Corp. (TIPCO) matched with highly skilled workers who now serve as the backbone of CFZ’s manpower, Mabalacat has no other way but to grow and transform into a city.
It was in 1995 when the incumbent chief executive, Mayor Marino “Boking” Morales started the campaign to convert Mabalacat into a component city like the City of San Fernando.
“Our call for the cityhood of Mabalacat started early but we were always a few requisites short. But we are not losing hope. Today, more than ever, Mabalacat has the capability to comply with the requirements of the law. So our dream of making Mabalacat a city will soon be realized,” Morales said in a recent interview.
But counting the years from 1995, the Mabalaquenos’ dream has long been prolonged. Is it true that Mabalacat can make this happen soon?
When Morales started his campaign for the cityhood, the required average annual income for a municipality to be converted into a city was only P20 million for two consecutive years. This is the basic and most important requisite provided for by Republic Act no. 7160 or the Local Government Code of 1991.
Today, however, Mabalacat is facing a tougher battle after the 11th Congress amended Section 450 of the RA 7160. Instead of P20 million average annual income, the law now states that to qualify for conversion, the municipality shall have “a locally generated average annual income of at least One Hundred Million (P100 M) for the last two consecutive years, based on 2000 constant price as certified by the Department of Finance (DOF) national office.” This amendment is provided for under Republic Act 9009.
Aside from the income other requirements include compliance on population or land area and several other documents demanded by the Congress.
According to Morales, Mabalacat has already complied with the 150,000 inhabitant-requirement. In a certification issued by the National Statistics Office (NSO) national office dated April 28, 2008, Mabalacat’s population as of August 2007 was already recorded at 203,307.
There is no more need to comply with the land area because the law states that either the population or the land area would suffice as one of the major requirements. Among other documents needed, there should be approval of the conversion from the Sangguniang Bayan and Sangguniang Panlalawigan of Pampanga.
In February 2008, the provincial board has already approved Mabalacat’s proposed conversion through Resolution No. 1093. It was a small victory for Morales after years of soliciting the support of the provincial government.
“We were more than happy to accept the resolution. The time that it was passed, I was really ecstatic. We were getting nearer and nearer to our goal,” Morales recalled.
Other requirements which Mabalacat has already complied are the socio-economic profile and master development plan, land use plan or zoning ordinance, certification of the local water utilities administration, certification of the local engineer as to the facilities, plan, and site for sewerage, garbage and waste disposal and certification of the municipal treasurer as to the amount available for the conduct of a plebiscite, if chargeable top local funds.
So what impedes the realization of Mabalacat’s cityhood?
BIR CONNECTION
Going back, the most crucial requisite for a conversion is the average annual income of P100 million for two consecutive years. Has the municipality of Mabalacat already reached the required income?
“Yes,” Morales promptly said, “but we are having a problem with the Bureau of Internal Revenue (BIR) because it did not release our 2007 shares from the Clark Freeport Zone’s tax on gross income earned (GIE) by locators.”
Republic Act 9400, an act amending Republic Act 7277 or the Bases Conversion and Development Act (BCDA), which was passed by the 13th Congress last March 20, 2007 states that 2 percent of the taxes collected from business enterprises’ GIE at the Clark Freeport Zone shall be remitted to the “treasurer’s office of the municipality or city where they are located.”
And given this provision of the law, Morales said that as per records, Mabalacat (which covers about 90 % of CFZ’s land area) has total GIE shares of P93 million from Clark Freeport Zone locators for the year 2007.
Unfortunately, the Mabalacat GIE shares in 2007 were remitted to the Bureau of Internal Revenue (BIR) instead of the municipal treasurer. This is because it was only in February 13, 2008 when the Department of Finance released the Implementing Rules and Regulations (IRR) for Republic Act 9400.
This is the primary concern of Morales. He said that their local income in Mabalacat for 2007 was recorded at about P60 million excluding the P93 million GIE shares from CFZ.
“We cannot get any certification from the DOF unless the BIR releases our GIE shares which they collected in 2007. If we will add the P93 million GIE shares and P60 million local incomes from permits, licenses, service and business income, we will have an estimated P153 million annual income for 2007 alone,” Morales said.
And for the year 2008, the mayor said Mabalacat has a total local income of P235.9 million. Out of this total collection, P146.8 million came from the CFZ GIE shares for 2008. The 2008 GIE shares were already directly remitted to the municipal treasurer.
“So technically, we already surpassed the average P100 million requisite for two consecutive years of 2007 and 2008. The only stumbling block is the actual release of the P93 million from the BIR that is supposed to be transferred to the municipal coffers and be certified by the DOF as part of our local income for 2007,” Morales said.
The mayor added that they already discussed this to the BIR. Meanwhile, the Sangguniang Bayan passed a resolution in September 2008 urging the BIR to remit the said P93 million generated from the CFZ locators’ taxes in 2007.
“The BIR told us that they have yet to collate and compute our shares. They claim that the IRR was only released in February 2008 from the DOF. But we maintain our position that our GIE shares should have been remitted to us in 2007 because RA 9400, the amended version of RA 7227, was actually approved as early as March 2007. The effectivity clause clearly states that the law shall take effect within 15 days after it was published. There is no clause stating that it shall take effect only after the IRR was released.
“So we demand from BIR to remit our GIE shares for 2007 in the soonest possible time because these are rightful shares of the municipality of Mabalacat,” the mayor said.
Fortunately enough for Morales, the municipality has the legal advantage to collect its shares from BIR. The only question is how soon BIR would act on this.
The gateway of Pampanga in the north and only less than a hundred kilometers from Metro Manila, Mabalacat indeed has the best strategic location as far as business and investments is concerned.
From post exchange (PX) goods from the former Clark Air Base’s (now CFZ) commissary to small and medium industries like Trust International Paper Corp. (TIPCO) matched with highly skilled workers who now serve as the backbone of CFZ’s manpower, Mabalacat has no other way but to grow and transform into a city.
It was in 1995 when the incumbent chief executive, Mayor Marino “Boking” Morales started the campaign to convert Mabalacat into a component city like the City of San Fernando.
“Our call for the cityhood of Mabalacat started early but we were always a few requisites short. But we are not losing hope. Today, more than ever, Mabalacat has the capability to comply with the requirements of the law. So our dream of making Mabalacat a city will soon be realized,” Morales said in a recent interview.
But counting the years from 1995, the Mabalaquenos’ dream has long been prolonged. Is it true that Mabalacat can make this happen soon?
When Morales started his campaign for the cityhood, the required average annual income for a municipality to be converted into a city was only P20 million for two consecutive years. This is the basic and most important requisite provided for by Republic Act no. 7160 or the Local Government Code of 1991.
Today, however, Mabalacat is facing a tougher battle after the 11th Congress amended Section 450 of the RA 7160. Instead of P20 million average annual income, the law now states that to qualify for conversion, the municipality shall have “a locally generated average annual income of at least One Hundred Million (P100 M) for the last two consecutive years, based on 2000 constant price as certified by the Department of Finance (DOF) national office.” This amendment is provided for under Republic Act 9009.
Aside from the income other requirements include compliance on population or land area and several other documents demanded by the Congress.
According to Morales, Mabalacat has already complied with the 150,000 inhabitant-requirement. In a certification issued by the National Statistics Office (NSO) national office dated April 28, 2008, Mabalacat’s population as of August 2007 was already recorded at 203,307.
There is no more need to comply with the land area because the law states that either the population or the land area would suffice as one of the major requirements. Among other documents needed, there should be approval of the conversion from the Sangguniang Bayan and Sangguniang Panlalawigan of Pampanga.
In February 2008, the provincial board has already approved Mabalacat’s proposed conversion through Resolution No. 1093. It was a small victory for Morales after years of soliciting the support of the provincial government.
“We were more than happy to accept the resolution. The time that it was passed, I was really ecstatic. We were getting nearer and nearer to our goal,” Morales recalled.
Other requirements which Mabalacat has already complied are the socio-economic profile and master development plan, land use plan or zoning ordinance, certification of the local water utilities administration, certification of the local engineer as to the facilities, plan, and site for sewerage, garbage and waste disposal and certification of the municipal treasurer as to the amount available for the conduct of a plebiscite, if chargeable top local funds.
So what impedes the realization of Mabalacat’s cityhood?
BIR CONNECTION
Going back, the most crucial requisite for a conversion is the average annual income of P100 million for two consecutive years. Has the municipality of Mabalacat already reached the required income?
“Yes,” Morales promptly said, “but we are having a problem with the Bureau of Internal Revenue (BIR) because it did not release our 2007 shares from the Clark Freeport Zone’s tax on gross income earned (GIE) by locators.”
Republic Act 9400, an act amending Republic Act 7277 or the Bases Conversion and Development Act (BCDA), which was passed by the 13th Congress last March 20, 2007 states that 2 percent of the taxes collected from business enterprises’ GIE at the Clark Freeport Zone shall be remitted to the “treasurer’s office of the municipality or city where they are located.”
And given this provision of the law, Morales said that as per records, Mabalacat (which covers about 90 % of CFZ’s land area) has total GIE shares of P93 million from Clark Freeport Zone locators for the year 2007.
Unfortunately, the Mabalacat GIE shares in 2007 were remitted to the Bureau of Internal Revenue (BIR) instead of the municipal treasurer. This is because it was only in February 13, 2008 when the Department of Finance released the Implementing Rules and Regulations (IRR) for Republic Act 9400.
This is the primary concern of Morales. He said that their local income in Mabalacat for 2007 was recorded at about P60 million excluding the P93 million GIE shares from CFZ.
“We cannot get any certification from the DOF unless the BIR releases our GIE shares which they collected in 2007. If we will add the P93 million GIE shares and P60 million local incomes from permits, licenses, service and business income, we will have an estimated P153 million annual income for 2007 alone,” Morales said.
And for the year 2008, the mayor said Mabalacat has a total local income of P235.9 million. Out of this total collection, P146.8 million came from the CFZ GIE shares for 2008. The 2008 GIE shares were already directly remitted to the municipal treasurer.
“So technically, we already surpassed the average P100 million requisite for two consecutive years of 2007 and 2008. The only stumbling block is the actual release of the P93 million from the BIR that is supposed to be transferred to the municipal coffers and be certified by the DOF as part of our local income for 2007,” Morales said.
The mayor added that they already discussed this to the BIR. Meanwhile, the Sangguniang Bayan passed a resolution in September 2008 urging the BIR to remit the said P93 million generated from the CFZ locators’ taxes in 2007.
“The BIR told us that they have yet to collate and compute our shares. They claim that the IRR was only released in February 2008 from the DOF. But we maintain our position that our GIE shares should have been remitted to us in 2007 because RA 9400, the amended version of RA 7227, was actually approved as early as March 2007. The effectivity clause clearly states that the law shall take effect within 15 days after it was published. There is no clause stating that it shall take effect only after the IRR was released.
“So we demand from BIR to remit our GIE shares for 2007 in the soonest possible time because these are rightful shares of the municipality of Mabalacat,” the mayor said.
Fortunately enough for Morales, the municipality has the legal advantage to collect its shares from BIR. The only question is how soon BIR would act on this.
