By Louise Maureen Simeon, November 2, 2022; PhilStar Global
MANILA, Philippines — The Philippine government is seeking the assistance of a United Nations (UN) agency to help local government units (LGUs) in strengthening their financial absorptive capacity amid the implementation of the Mandanas Ruling.
In an interview, UN assistant secretary-general and United Nations Development Program (UNDP) regional director Kanni Wignaraja said government agencies are asking for assistance on the ruling that effectively increased the amount of resources that are given to LGUs.
Wignaraja was recently in the Philippines for a week-long official mission to discuss possible collaboration on development priorities toward achieving the Sustainable Development Goals by 2030.
Since UNDP started assisting the Philippines in 1965, the UN agency has put local development as one of its priority areas in the country.
“Many of the secretaries that I was able to meet put as a high priority to say look at supporting the capacity and the systems for the LGUs that are not able yet to absorb and deliver,” Wignaraja told The STAR.
The Mandanas Ruling raised internal revenue allotment (IRA) transfers to LGUs and ordered that all national taxes should be included in computing the tax base in determining the allocation for LGUs.
However, Wignaraja emphasized that LGUs across the country have different capacities, with some being strongly capable of absorbing additional money while others are having a hard time.
“In others, you’re already seeing that they were even underspending and there’s a cost to that because that should have gone to improving people’s lives,” Wignaraja said.
The increased funding comes with additional responsibilities, as powers and programs coming from the central government will now be transferred to the local level.
Unfortunately, experts have been warning that increased budget is likely to result in lower budget execution rates and fiscal imbalances unless capacity concerns are addressed.
Wignaraja argued that the approach should vary on the demography, strengths and weaknesses, and the natural and human resource assets in every LGU.
“You can’t have the same model. This is why it’s important that we are here and we are part of the journey because we have to listen carefully to different needs in different localities,” she said.
Earlier, President Marcos instructed the economic team to prepare an amendment to the executive order that was released in 2021.
A technical working group has been created consisting of the departments of Budget and Management, Finance, Interior and Local Government, and the National Economic and Development Authority.
The EO issued by former president Rodrigo Duterte specified the items that are now going to be assigned to LGUs.