When the Supreme Court’s decision favoring the petition of Batangas Governor Hermilando Mandanas and former Bataan Governor Enrique Garcia was made public in 2019, the Filipino people believed that a conclusive blow had been struck for the fiscal autonomy of the local government units (LGUs) of this country. They thought that thenceforth the LGUs – the over 80 provinces and over 120 cities – would be receiving from the Treasury a national tax allotment (NTA) representing a full 40 percent of total national government revenues.
However, this apparently is not the case, as one of the LGU organizations, the League of Cities of the Philippines (LCP) stated recently. LCP indicated that a review of its NTA experience showed that LGUs have been receiving 32 percent to 34 percent of total national revenues. In a meeting with LGU officials in January, the Department of Finance (DOF) attributed the shortfall to special allotments and special-purpose funds (SPFs) for “important national obligations provided for by law”. DOF enumerated 40 special allotments and legally obligated SPFs.
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The department that is mandated by law to supervise the LGUs, the Department of the Interior and Local Government (DILG), should give the forthcoming ULAP petition its full support.
LCP is stoning the propriety of 20 of the 40 deductions. “(A) significant majority of the deductions should not be considered special purpose funds because they do not adhere to the Constitutional guidelines on fund consolidation and reversion,” LCP acting president Joy Belmonte has said.
Elaborating, Mayor Belmonte said: “Specifically six of the deductions fail to satisfy the requisite that these funds should serve a specific purpose and 19 Quezon City’s mayor added: “LGUs will never enjoy the full 40 percent of the national tax base because of the deduction of the SPFs.”
The institutions that can definitely put this matter to rest is the institution that ruled on the Mandanas-Garcia petition, to wit, the Supreme Court.
The Union of Local Authorities of the Philippines (ULAP), of which LCP is a member, indicated that it would file with the Supreme Court a petition seeking clarification as to whether SPFs should be deducted (from total national government revenues) prior to the deduction of the NTA, in accordance with the spirit and intent of the law, with the LGUs receiving the full 40 percent of national taxes.
It is inappropriate for a Cabinet department to be a co-petitioner against another Cabinet department, but the department that is mandated by law to supervise the LGUs, the Department of the Interior and Local Government (DILG), should give the forthcoming ULAP petition its full support.
A victorious ULAP petition will give this country’s provinces and cities the fiscal strength and operational stability that they need and deserve. (llagasjessa@yahoo.com)