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DBM chief says LGUs to exercise stronger autonomy with full devolution

Budget Secretary Amenah Pangandaman on Wednesday said local government units (LGUs) will see a stronger exercise of autonomy upon the full implementation of full devolution of certain national government functions to them given the increase in their national tax allotment (NTA) shares.

Executive Order 138, issued by then President Rodrigo Duterte in June 2021, provided guidelines on the full devolution of certain functions of the executive branch to LGUs.

The EO was released to implement the July 2018 Supreme Court ruling widening the base of the LGUs’ share in taxes or the so-called Mandanas Ruling, which stemmed from the petition filed by then Batangas Representative Hermilando Mandanas.

With increased share in taxes, Pangandaman said LGUs will enjoy autonomy in the identification and implementation of programs, projects, and activities to be funded from their respective financial resources such as the NTA.

“Ang advantage po ay 'yung proper identification ng mga proyekto because sila [LGUs] po 'yung nakakaalam kung ano talaga ang kailangan nung kanilang mga nasasakupan, so I think this will be beneficial for them,” the Budget chief said.

(The advantage is the proper identification of projects because they are the ones who know which programs they need for their constituents, so I think this will be beneficial for them.)

The SC’s Mandanas ruling widened the base of LGUs’ shares in the country’s taxes, which now includes the income from tax collections by the Bureau of Customs that were allegedly excluded from what the LGUs previously received.

The NTA shares of LGUs are based on the tax collections of the national government.

The ruling is consistent with Section 284 of Republic Act No. 7160, or the Local Government Code of 1991, the amount of LGU shares in the national taxes for a given fiscal year is based on the collection of the third fiscal year preceding the current fiscal year.

Consequently, Section 2.2.1 of Local Budget Memorandum (LBM) No. 85 reiterates that the total Fiscal Year 2023 NTA shares of LGUs shall be based on the actual collections of national taxes in FY 2020, as certified by the BIR, BOC, and Bureau of the Treasury.

The Budget chief underscored that the DBM will provide technical assistance to, and will perform oversight functions over, the LGUs to ensure proper budgeting and expenditure management practices.

Pangandaman earlier said the DBM is seeking to extend the process of devolution of national government services to the local government units (LGUs) to 2025.

“The basic concept of the amendment is to extend the devolution to at least 2025 so that we can still capacitate those LGUs that are not able to come up with projects that they think will help their municipality or their town,” the Budget chief said in a Commission on Appointments hearing in September last year.—AOL, GMA Integrated News