Local government units (LGUs) will be richer next year (hopefully), thanks to last week’s Supreme Court ruling clarifying the method of sharing taxes between the national government and LGUs.
According to the Supreme Court, the internal revenue allotments (IRA) should be based on “national taxes” and not just “national internal revenue taxes.”
By expanding the source of the allotment, LGUs would now be able to get a cut from franchise fees and Customs duties which the government heretofore did not share with them.
Exactly by how much that would increase LGU coffers remains to be seen.
Sen. Ralph Recto estimates that using the SC-approved formula, LGUs would have been entitled to R644 billion in 2018 versus R522.7 billion under the current formula.
One of the petitioners in the case, former congressman, now Batangas Gov. Hermilando Mandanas, told the Supreme Court that over a ten-year period, from 1992 to 2012, LGUs have been unjustly deprived of around R500 billion by using the wrong sharing formula.
The other petitioner was the late Bataan Rep. Enrique “Tet” Garcia.
Under the Local Government Code, the national wealth is shared 60-40 between the national government and the LGUs. Last week’s ruling laid down the correct basis for computing the share of LGUs.
The Department of Finance is not too happy about the decision and is expected to appeal it.
Meanwhile, proponents of federalism used the decision to bolster claims that under federalism, the regional governments (as opposed to the federal government) would get a better deal.
Federalists are dangling a proposed 80 percent share for the regional governments while the national government will retain only 20 percent.
Well and good, counter the traditionalists or those opposed to federalism.
If that is the case, we can still achieve the same result by simply amending the Local Government Code.
Just reversing the present sharing to 40-60 in favor of local governments would make many LGUs feel more empowered. And we don’t even have to amend the constitution, traditionalists contend.
What’s ahead at the SoNA?
This early, I am betting that President Rody will devote a good part of his SoNA to plug for federalism.
He is expected to formally receive today the recommendations of the Consultative Committee (ConCom) which provides a detailed roadmap towards federalism, Philippine style.
With the likes of former Chief Justice Reynato Puno, former Senate President Aquilino Pimentel, former SC Associate Justice Eduardo Nachura, and Fr. Ranhillo Aquino steering the 19-member ConCom, one can be sure that that the best-suited and best possible configuration for a federal government for the Philippine would be on the plate.
But what is needed from hereon is a massive information campaign down to the grassroots on what federalism is all about.
A recent survey showed that two out of three Filipinos oppose a shift from the present unitary government to a federal government. A shift a new form of government will not solve the country’s woes, respondents said.
Indeed, the government machinery needs to work double time to help change the current popular mindset.
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-Atty. Ignacio R. Bunye