DBM queried on authority to stall devolution to LGUs – BusinessWorld

A SENIOR LEGISLATOR has questioned the Department of Budget and Management’s (DBM) authority to allow delays to the devolution of National Government functions to local government units (LGUs).

Senator Francis N. Tolentino said the delays being contemplated deprive some LGUs of the full benefits of the Supreme Court’s (SC) Mandanas ruling, which expanded LGUs’ share of the National Government’s tax collections starting in 2022. In response to the expanded funding, the National Government plans to shed some of its functions for transfer to LGUs.

Mr. Tolentino, who chairs the Senate’s local government committee, was speaking at a hearing Wednesday of the Development Budget Coordination Committee (DBCC).

He cited DBM Circular No. 2, which permits National Government agencies to retain budgets of National Government functions due to be devolved, if they make a determination that it is unfeasible to transfer such functions to fourth and fifth class LGUs by 2022.

“You gave yourself the discretion to deviate from the Supreme Court’s decision, as well as to deny the full benefits of the Mandanas Ruling to the LGUs if you consider that as not feasible,” Mr. Tolentino said. He added that if this continues, “the Mandanas ruling will only be implemented on a granular basis and limited to the discretion of the (National Government agencies).”

Under the Local Government Code of 1991, LGUs receive 40% of all national taxes via the Internal Revenue Allotment (IRA). Payouts for a given year are reckoned based on collections from three years prior.

Before the Mandanas ruling, the National Government had interpreted the code to mean that it was obliged to share only “internal revenue” collections with LGUs. The SC ruled that the IRA must also include collections from Customs.

During the DBCC hearing, Mr. Tolentino also said that LGUs were not properly consulted on the National Government’s devolution plans.

He said DBM has indicated that it plans to “re-calibrate, assess, and monitor” current guidelines for the implementation of the Mandanas ruling, contrary to the court’s intent. “Those terminologies are inconsistent and nowhere to be found in the said SC decision,” said Mr. Tolentino in a statement.

He also said flagged as inefficient and wasteful what Acting Budget Secretary Tina Rose Marie L. Canda calls the “scrap-and-build” policy, under which national agencies replicate positions that have been devolved.

He said the logic of the Mandanas ruling generates savings from abolished positions, and that creating new jobs in the national agencies runs counter to the ruling’s intent.

“I’m a firm believer that the national economy will be led by the LGUs, post-COVID-19,” said Mr. Tolentino, adding that the DBM seems to be unwilling to let go of the reins.

Ms. Canda replied that the department will honor the autonomy of local governments, and that it is seeking to ensure a smooth devolution process, including ensuring local responsibility for budgets. Its timetable for the full transition is three years, she said. — Alyssa Nicole O. Tan