February 7, 2023

CAR LGUs MUST BE READY FOR MANDANAS RULING

One of the long serving senators in the country made a good point when he said in one plenary session of the Senate that implementation of the Mandanas doctrine could impact on the already scarce resources of the national government as more funds are expected to be allotted to local government units beginning 2022.
The Mandanas ruling states the computation of the share of LGUs from the national government in the form of internal revenue allotment should not be limited to national internal revenue taxes collected by the Bureau of Internal Revenue but from all other sources of income such as tariff and customs duties, value-added taxes collected in the Bangsamoro Autonomous Region in Muslim Mindanao, national taxes collected in the BARMM, national taxes collected from the exploitation and development of national wealth, excise taxes from locally manufactured Virginia-type cigarettes and other tobacco products, national taxes collected under VAT on sale of goods or properties, VAT on sale of services and use or lease of properties, tax on persons exempt from VAT, and franchise taxes.
This means that by 2022, LGU budgets will increase tremendously owing to the increase in allotments from the national government plus revenue from local taxes.
If properly implemented, the Manda-nas ruling can help achieve the long-aspired devolution of national government functions to the LGUs and development in the countryside.
It has been 30 years since the enactment of the Local Government Code yet many LGUs remain dependent on financial support from the national government since locally-generated revenue is not enough to sustain the operation of LGUs.
With more autonomy given to LGUs, the prospect is bright especially to third to sixth-class municipalities, which, under the tier of priorities in the old setup has often been set aside.
More funds relegated to LGUs could also mean improvement of government services as municipal and provincial officials are more familiar with what the community truly needs.
We hope that as LGUs transition into a decentralized setup, the practice of having to “beg” or “lobby” in national government agencies, Cordillera legislators, or even the highest official of the land to channel funds in their localities will end.
It’s time LGUs be given the full reins in steering the path of development in their communities with minimal intervention from the national government but still with oversight functions to ensure that there is proper planning of projects, finances are judiciously spent, and accountability remains.
With the Department of Budget and Management and the Department of the Interior and Local Government’s creation of devolution committees in every regional line agency and LGUs to prepare for the eventual transfer of national government functions, we hope to see less adverse findings from the DBM or the Commission on Audit regarding how public funds are spent.
Based on the assessment of the World Bank, the decentralization of some government functions could greatly benefit communities as there are more resour-ces at the disposal of LGUs but there is also a downside especially if LGUs are not fully prepared in handling devolved functions.
Capacity building therefore is a crucial step to ensure that when LGUs are handed bigger responsibilities, they will be able to cope while at the same time disposing their regular duties before the Mandanas ruling.
Concerned agencies had two years to prepare LGUs for the transition. Next year will be a crucial year as local officials are expected to set recovery plans from the Covid-19 pandemic amidst the campaign season.
With the Mandanas ruling, the burden of bringing the long-aspired for peace and development in the communities is now with the LGUs. We hope they will not fail us.