DoF open to LGUs takeover of nat’l gov’t functions

THE FINANCE department is open to devolving some functions of the national government to local government units (LGUs) to comply with the Supreme Court ruling on internal revenue allotments (IRAs).

“We need to sit down with the LGUs and work out what programs they will implement… we will look at the proposals and then we have to ask the cabinet (to determine) how we will divide the functions,” Finance Secretary Carlos G. Dominguez III told reporters late Thursday.

Luzon Regional Development Committee Chairman Hermilando I. Mandanas, a former Batangas governor and for representative for the province’s 2nd district, proposed to devolve some of the national government’s functions to LGUs.

Mr. Mandanas, who filed the petition with the Supreme Court that led to a ruling expanding LGU entitlements to national government revenue, proposed that the implementation of conditional cash transfers, farm-tomarket roads, fertilizer subsidies, and medical equipment procurement, among others, be transferred to LGUs.

However, Mr. Dominguez said: “I don’t know if the President will agree.”

He noted that the department will wait for the final resolution from the high court before making any moves.

“The motion for reconsideration (MR) depends on what comes out... The court might say that the rulling applies 10 years from now so why will we file an MR? But we can’t afford a one-time payment. For sure we cannot afford that,” he said, referring to the possibility that the national government may have to pay arrears to LGUs dating back to the 1992 enactment of the Local Government Code.

“The key actor here is not us, the key actor here is DBM (Department of Budget and Management). They are the ones to determine who is going to be affected. If there’s money, it’s fine. Then they can allocate the budget,” Mr. Dominguez added.

He said that the Finance department estimates the total liability of the national government at between P1-1.5 trillion since 1992, the effectivity date of the Local Government Code, or Republic Act No. 7160.

The estimates are similar to those provided by Mr. Mandanas and Budget Secretary Benjamin E. Diokno.

The court expanded the definition of national government revenue to which LGUs are entitled. The national government pays out the LGU share of national revenue via IRAs.

The high court, sitting en banc, announced on July 3 that it voted 10-3 in favor of including all national taxes in the calculation of IRAs, not just those collected by the Bureau of Internal Revenue.

Mr. Dominguez also expressed doubts about some LGUs’ capacity to deliver their own programs, and noted that devolving some functions should not affect other national government projects.

“We also don’t know what functions they will take over. We cannot just give them the money and say: ‘ We’re leaving you in charge.’ I don’t think we can do that,” he said.

“This is a lot of money. It will not really starve (the government of revenue), but it will be difficult. And again, we have to make sure that the national projects, like the roads, are going to be coordinated,” he added.

Many LGUs are dependent on IRAs as their primary source of revenue, even though the law allows them to generate taxes on real property and on businesses, among other fees and charges.

“Not everybody is created equal. Some are very good. Some are not, some have political problems,” Mr. Dominguez said. —