168 Chasing the Wind: Assessing Philippine Democracy Additionally, Guevara notes the grant system under the LGC “cannot be expected to be an equalizer. It has even introduced perverse incentives for LGUs to split themselves or to convert into cities to receive additional IRA.” In fact, from the time that the LGC was passed, new provinces, municipalities and barangays have been created, and more municipalities have been converted into cities.18 Going back to Guevara's observation about tax bases, this point is noteworthy as it surfaces a possible reason for one post-decentralization reality, of LGUs that remain dependent on IRA as the primary source of their income. As Manasan (2009) also points out, the LGC confines the amount of resources that could be generated as it seriously limits their power to set tax rates, with floors and ceilings defined for every tax that the local government units could collect.19 Working with available data on income and expenditures from 2001 to 200820, one would quickly see that provinces, cities and municipalities have yet to generate a significant proportion of their income from local sources, with provinces and municipalities generating an annual average of 12%, while cities drew an average of 32% of their income from their own localities. See Fig.6 (Provinces); Fig.7 (Cities); and Fig.8 (Municipalities).