NextGen Day

When the full devolution of basic services and facilities from the national government is implemented, local government units (LGUs) will benefit from greater autonomy in managing resources.

Amenah Pangandaman, secretary of the Department of Budget and Management (DBM), stated in a recent radio interview that it would be advantageous to facilitate the devolution of functions to the localities because they would be given more autonomy as a result of an increase in their national tax allotment (NTA) shares.

The NTA shares of LGUs are determined by the government’s tax receipts.

“The advantage is the proper identification of projects because sila [LGUs] po’yung nakakaalam kung ano talaga ang kailangan nung kanilang mga nasasakupan (The advantage is the proper identification of projects because they [LGUs] know what their constituents’ needs are truly),” she said. “I think this will be beneficial for them.”

“We computed the overall IRA [internal revenue allotment] based on the data provided by Customs and BIR. Basically, the national government collects taxes… Doing so will enable them to determine the total IRA based on the revenue received from Customs and subsequently the BIR. Basically, the national government collects taxes; that’s where you can see what they can receive),” she continued.

According to Section 284 of Republic Act 7160, also known as the Local Government Code of 1991, the amount of an LGU’s contribution to federal taxes for a given fiscal year is determined by the amount collected in the third fiscal year before the current fiscal year.

Since actual national tax receipts in FY 2020 were confirmed by the Bureau of Internal Revenue, Bureau of Customs, and Bureau of the Treasury, Section 2.2.1 of Local Budget Memorandum (LBM) No. 85 reiterates that the entire fiscal year 2023 NTA shares of LGUs shall be based on those figures.

Pangandaman also promised local government units (LGUs) that the DBM will offer technical support and carry out oversight duties to guarantee effective budgeting and expenditure management procedures.

Pangandaman previously stated that DBM and other relevant authorities are developing methods to allow LGUs to take on their devolved responsibilities by 2027.

She asserted that local government units (LGUs) will be able to stand on their own two feet with the help of capacity building, training, and seminars.

She added that initiatives for procurement, careful planning, project identification, and implementation are also anticipated to assist LGUs in building their capacity.

In accordance with the Mandanas-Garcia decision of the Supreme Court, Executive Order (EO) No. 138, signed by former President Rodrigo Duterte on June 1, 2021, directs the full devolution of the provision of essential services and facilities to LGUs.

A draft executive order to revise EO 138 and extend the transfer of various national government services to LGUs from the prior 2024 to 2027 was provided by the DBM to President Ferdinand R. Marcos Jr. late last year.

The verdict in the Mandanas-Garcia case, which concerned the allocation of local government shares of internal revenue, was the outcome of a petition filed before the Supreme Court by Hermilando Mandanas, the governor of Batangas, and Enrique Garcia Jr., the former governor of Bataan.

The LGUs are intended to be in charge of funding and carrying out the tasks that have been devolved to them by Republic Act 7160, the Local Government Code of 1991, and other later laws, with the increased budget share.

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