By Keisha B. Ta-asan, February 13, 2023; Business World
The Department of Budget and Management (DBM) said the P28.9-billion Local Government Support Fund will be deployed for capacity-building projects ahead of the imminent devolution of National Government (NG) services.
“We will formulate capacity-building training, and seminars for our LGUs (local government units) to help them — so that by the time we have full devolution, they can stand on their own feet,” Budget Secretary Amenah F. Pangandaman said.
The LGUs will be aided in operations about to be shed by the National Government, such as procurement, project planning and identification, and implementation, she added.
“The Department of Finance’s Bureau of Local Government Finance may also provide guidance on how LGUs may use their budgets,” she said.
LGUs are to be given more responsibility for operating services formerly undertaken by the National Government after receiving a larger share of National Government revenue. The DBM has said that LGUs’ share of NG revenue this year amounts to P820.3 billion, representing 40% of the NG’s revenue three years prior.
The Supreme Court, in its Mandanas ruling, had determined that LGUs are entitled to a 40% share of all NG revenue. Before the ruling, the NG interpreted the Local Government Code narrowly, disbursing 40% of “internal revenue” to the provinces, cities, municipalities, and barangays, effectively defining the pool of funds to be allocated as the collections of the Bureau of Internal Revenue. Before the Mandanas ruling, this payout was known as the “Internal Revenue Allotment” (IRA).
The Mandanas ruling resulted in the renaming of the IRA to the National Tax Allocation, reflecting the LGUs’ entitlement to 40% of all NG revenue, including the collections of the Bureau of Customs, among others.
Of the other parties to be tapped for capacity-building, Ms. Pangandaman added: “We are also partnered with the Department of Interior and Local Government (DILG) and the Development Academy of the Philippines. There are a lot of groups and departments that will help and hopefully, before 2027, we are able to capacitate (the LGUs).”
In January, the DBM’s National Budget Call for the 2024 spending plan highlighted the importance of funding capacity-building programs for LGUs.
The 2024 budget call signaled encouragement for regional programs to bring disadvantaged and laggard LGUs to a position where they can handle devolution.
“The DBM is here to provide guidance to LGUs who are planning their respective projects. We also have the Philippine Development Plan, (which) we’re hoping (LGUs) will follow” to align their projects with national priorities, Ms. Pangandaman said.
Late in his term, former President Rodrigo R. Duterte signed Executive Order No. 138, transferring some basic services to LGUs by 2024 in response to the larger share of NG revenue going to LGUs.
In November, the DBM delayed the devolution of some NG functions to 2027 from 2024.