DILG chief vows support for local govt’s amid tax share cuts

By Joseph B.A. Marzan

Department of the Interior and Local Government (DILG) Secretary Benjamin Abalos Jr. on Thursday vowed that they will actively support local government units (LGUs) as they struggle to implement newly devolved functions with lesser tax shares.

Abalos visited Iloilo City on Thursday to meet with police and LGU leaders in various functions, as well as with the regional offices of the Department of Social Welfare and Development (DSWD) and the Department of Health (DOH).

The meetings with the DSWD and DOH offices were in relation to devolved functions as an effect of the Supreme Court’s 2018 Mandanas-Garcia ruling.

While the ruling increased the shares of LGUs from national taxes, it also devolved or transferred to local governments key services previously dispensed by national government agencies, particularly in health, social services, and the environment.

Abalos admitted that they were a bit doubtful as to the capacity of LGUs and barangays in implementing the ruling, which increased the National Tax Allocation (NTA) since last year.

For 2023, the ruling is expected to be fully implemented, with some functions of national government agencies transferred to LGUs, including the construction and maintenance of school buildings, and the construction and management of some tertiary-level hospitals, among others.

The main struggle in this implementation, Abalos said, was the coronavirus disease 2019 (COVID-19) pandemic which hit the whole country in 2020, which is also the basis year for the 2023 budget.

With the economy almost grinding to a halt in the past two years, the national government suffered lower revenues which also affected the NTA shares of LGUs that must now deliver additional services.

“There’s a different reality on the ground, and what’s sad about this is that we just came from a pandemic. Your computation of the [NTA] should be from the previous [3] years, and the previous [3] years is the pandemic year, so they might have a windfall [in 2022], but this year it decreased,” Abalos said during a press conference.

“We are going to anticipate the slashes [in the NTA], and it goes without saying that the national government is also affected [because] the Mandanas [ruling] also [effectively] slashed the national budget because it was devolved to the LGU. We have to harmonize, and that is now the role of the DILG,” he added.

To streamline their assistance to the LGUs, DILG clustered them into “quadrants” based on their fiscal capacity and performance:

–       High Capacity-High Performance;

–       High Capacity-Low Performance;

–       Low Capacity-High Performance; and

–       Low Capacity-Low Performance.

Abalos said the meetings with the DILG regional director and DSWD and DOH were to identify LGUs that had greater capacity, or which needed more help.

“[With] these four quadrants, you could now have your interventions. We will list them. What is important is that we must always be in touch with each and every governor and mayor (sic) to make sure that is to be continuity of services here,” he said.

He added that President Ferdinand Marcos Jr. expressed special concern for the LGUs, recalling the latter’s tenure as Ilocos Norte governor.

Abalos was Marcos’s campaign manager in the 2022 elections.

He said that they are “greatly observing” the impact of the devolved funding and functions on the health services sector of the LGUs.

“We’re here for whatever it is to cushion the impact and to be ready for it. That’s why we’re going around. There are areas that are a bit more difficult and it’s important to go about it gradually, and the Local Government Code provides that we cannot do it all at once, especially now that the [NTA] has [decreased],” he said.