‘… in the wake of the looming global recession, high inflation, business difficulties and lack of jobs, local government units should be given enough leeway on how to spend their funds for projects that they truly need.’
INCOMING provincial governors and city/town mayors who will start serving their constituents will have the added bonus of working with more sources of local revenues. The windfall will come from the national government, with President Duterte’s executive order directing the Department of Budget and Management (DBM) to respect and implement the Supreme Court’s 2018 ruling in the long-running Mandanas-Garcia case filed by Batangas Gov. Hermilando Mandanas.
The landmark decision affirms that the Internal Revenue Allotment (IRA) of local government units should come from all national taxes, as mandated by the Local Government Code, and not from just the taxes collected by the Bureau of Internal Revenue (BIR) within the LGU jurisdictions as is the usual practice.
The decision, in effect, should give the LGUs bigger IRA shares from the national revenue pie. The Philippine Councilors League (PCL) estimates that the IRA base will surge to P354 billion in 2022, P382 billion in 2023, P420 billion in 2024, and P466 billion in 2025.
In pursuance of the SC decision, President Duterte signed Executive Order 138 in June 2021, transferring a number of basic services to LGUs by 2024. With this, the government is shifting programs and projects, worth an estimated P234.4 billion, to local government units.
Sen. Francis N. Tolentino, chairman of the Senate local governments committee, has said that the incoming DBM officials should help local officials rationalize spending of the revenue windfall coming from the Mandanas ruling. Tolentino noted that the outgoing DBM leadership has given LGUs guidelines on how to spend the money, which does not sit well with some governors and mayors.
Tolentino said in the wake of the looming global recession, high inflation, business difficulties and lack of jobs, local government units should be given enough leeway on how to spend their funds for projects that they truly need.
The senator said the budget department must offer LGUs funded allocations that can respond to the present needs and demands of the society considering that the purchasing power of ordinary Filipinos has been severely weakened over the past two years. Towns and cities may lessen the impact of inflation by ensuring the country’s food security through construction of additional warehouses, milling stations, and cold storage facilities for local farmers and fisherfolk, he proposed.
During these hard times, a reminder for both the DBM and LGUs to judiciously spend the money is in order.
