President Ferdinand Marcos Jr. on Tuesday said he has formed a team headed by the Department of the Interior and Local Government (DILG) to look into funding problems that are holding back greater autonomy for local governments.
Speaking during a gathering of the League of Cities of the Philippines in Malacañang, Marcos said he already had extensive discussions with Batangas Gov. Hermilando Mandanas and the late Interior Secretary Jesse Robredo on the devolution of national government functions to local governments when he was a senator.
The original concept, he said, was to use the additional internal revenue allotment (IRA) for the 4th, 5th, and 6th class provinces or local government units (LGUs) and provide assistance to provinces that operate hospitals but don’t have funds.
The remainder of the IRA would be given according to the provisions of the Local Government Code that varies depending on the LGUs, he said.
However, there were difficulties in applying the ruling to some cities, and the local chief executives were given the discretion on how to apportion the money, the President said.
“But we are still continuing to look at it [to determine] what belongs to the local government and what does not belong to the local government,” he said.
He also said some functions that have devolved to local governments were not being performed because of a lack of funds, personnel, or training.
One example is the land use plan, he said, in which several LGUs face difficulty because of the lack of money and qualified personnel. He said this is work the national government could do.
Marcos said another contentious issue is the repair of school buildings.
He said Vice President Sara Duterte, who is concurrent Education secretary, said the Department of Education has some funds for the repairs, but not enough.
“So I said why don’t we give the materials or funding to the LGU?” he said. “These things have to be worked out and funding sources must also be identified.”
The President suggested, however, that the national government could provide additional allocation to the local governments that are mandated by law to conduct school building repairs.
The Mandanas-Garcia ruling by the Supreme Court in 2018 gives LGUs a just share of all national taxes collected and not only those from the Bureau of Internal Revenue effective 2022.
LGUs get their internal revenue allotment (IRA) from 40 percent of national internal revenue taxes collected by the BIR. With the SC ruling, LGUs are projected to increase the IRA by 27.61 percent.
At the same event, Marcos encouraged LGUs to be open to public-private partnership (PPP) as a mode of financing their projects.
“I think this is the way forward, and I encourage all our local government units to be open to the possibilities of PPPs and to have private-public partnerships, especially in your areas,” he said in a meeting with members of the League of Cities of the Philippines.
Marcos said digitalization would play a big part in PPP, especially in pushing for economic recovery and digital transformation in the Philippines.
“Digitalization is going to be a very natural fit for something like PPPs,” he said.
Marcos said apart from pushing for digitalization, his administration would also put increased focus on infrastructure.
“There are plenty of opportunities, especially in infrastructure. Many of our friends from other countries, particularly ambassadors who paid a courtesy call–offered to help,” Marcos said.
The chief executive said he had received offers to fund big-ticket projects, including official development assistance (ODA) and joint ventures.
He also encouraged local chief executives to become the “driving force” to promote economic transformation.
“But even at the national level, we are encouraging it. I hope that you continue to do that and be the driving force behind our economic transformation. I have always said that some of the best talent in government is in the LGUs, in the cities, in the governors, in the mayors,” Marcos added.