Bonanza for local governments
Starting in 2022, the governors and mayors will have more resources for their utilization considering that the bonanza of funds arising from a 2018 Supreme Court case will be made available to the local government units. I refer to Supreme Court case GR 199802 that were filed way back in 2012 by then Congressman (currently Batangas governor) Hermilando Mandanas and then Bataan Congressman Enrique Garcia.
Second of a series
The anti-covid-19 vaccines have finally arrived. For the local government executives, their task on hand has just began. They would have to be ready to address the many challenges of preparing for the logistical and financial requirements for the vaccination of their constituents. For the financial aspect, how can the provinces and cities fund the billions of pesos required for the acquisition of the vaccine? For the immediate requirements, they would have to rely on their savings or the assistance coming from the national government and other supporters.
But starting in 2022, the governors and mayors will have more resources for their utilization considering that the bonanza of funds arising from a 2018 Supreme Court case will be made available to the local government units. I refer to Supreme Court case GR 199802 that were filed way back in 2012 by then Congressman (currently Batangas governor) Hermilando Mandanas and then Bataan Congressman Enrique Garcia. In their petition to the High Court, the two alleged that the basis and method on sharing of the internal revenue allotments by the national government to the local governments were wrong from the onset and much lower than the amounts legally due the LGUS.
I know personally the two individuals, having engaged with them in the past, including Mr. Garcia who was a co-worker in the Bureau of Internal Revenue sometime in the early 1980s, and Mr. Mandanas, who I met and interacted with when I was the BIR Commissioner and Professional Regulatory Board of Accountancy Chairman in the past decade. Belatedly, I got to know that Mr. Mandanas is a graduate of the Masters in Business Administration Program of the UP Virata School of Business, the school of which I am the present dean. Even back then, I already knew the competence and drive of the two individuals to achieve milestones. So, it is not surprising that the Supreme Court affirmed most of the positions of the two that are now landmark cases on fiscal management and local government autonomy.
Thanks to these two gentlemen, they were able to convince the Supreme Court on the validity of their position, when the court issued its decision affirming the inclusion of all internal revenue taxes on the method for determining the IRAS of the local governments. As a result, the basis of the IRA determination has substantially increased, translating into higher allotments of local government shares.
This bonanza saga continues. The actual grant of the increased share begins only in 2022. There are twists and turns that may still arise moving forward.
To be continued
Joel L. Tan-torres is the Dean of the University of the Philippines Virata School of Business. Previously, he was the Commissioner of the Bureau of Internal Revenue, the chairman of the Professional Regulatory Board of Accountancy and partner of Reyes Tacandong & Co. and the Sycip Gorres and Velayo & Co. He is a Certified Public Accountant who garnered No. 1 in the CPA Board Examination of May 1979.
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