NTA cut could affect health services, stall salary increase

By Joseph B.A. Marzan

Iloilo City Mayor Jerry Treñas is worried that cuts to the 2023 National Tax Allocation (NTA) will affect the city government’s health mandates, as well as the increase in employee’s pay and living allowances for national government employees.

As the Mandanas ruling goes into a hard swing next year after this year’s soft launch, the procurement and administration of medicines and vaccines worth P92 million would be devolved to the city from the Department of Health (DOH).

But with the difficulty posed by lower NTA shares, Treñas in his regular press conference expressed foreseeing that the city will have a difficult time implementing this mandate.

“We had been told that the DOH would no longer buy medicines and vaccines worth P92 million, and we are already short, so we would have to find ways to survive in the next years,” the mayor said.

Likewise, regular employees of the Iloilo City government cannot expect a pay raise in the first half of 2023, as the proposed budget for next year will implement the fourth tranche of Republic Act No. 11466 (Salary Standardization Law of 2019 or SSL 5) in July 2023.

Section 11 of Republic Act No. 10466 provides that the fourth tranche should be implemented on January 1, 2023 but gives a window to Local Government Units (LGUs) for a period of not less than 4 years, depending on their financial capabilities.

The cost-of-living allowances for officials and employees of national government agencies, which also forms part of the 2023 local budget, was also reduced significantly.

“I hope that all employees could understand that we could not implement the SSL 5 4^th tranche effective [January 1, 2023] because we have many needs to chase after. I understand that many want it to be implemented, but as of now we aren’t able to,” Treñas said.

The city government’s proposed budget for 2023 is at P2.9 billion, which the mayor says he would submit by Monday afternoon.

As to infrastructure projects, he said that they would not likely be affected since local funding for these projects had already been allocated in previous years’ budgets.

The mayor said that he also foresees the NTA for 2024 to remain lower than pre-pandemic years, as it is based on tax collections for 2021, when restrictions continued to be enforced.

“We will only go back to the 2022 [NTA] levels [probably] in 2025,” the mayor surmised.

Treñas had that the city foresees a P200-million cut to the NTA for 2023, as it is based on tax collections by the Bureau of Internal Revenue in 2020, the year the coronavirus disease 2019 (COVID-19) pandemic erupted.

The Mandanas-Garcia ruling resulted from a 2013 petition filed by Batangas Governor Hermilando Mandanas and former Bataan governor Enrique Garcia Jr., together with other local elective officials, before the Supreme Court on the local government units’ (LGUs) shares of the internal revenue allotment (IRA).

Mandanas and Garcia were then members of the 15th Congress of the House of Representatives.

The Supreme Court affirmed the ruling in 2018, giving the LGUs a just share on all national taxes collected, not only from the Bureau of Internal Revenue effective 2022, resulting in more funds to LGUs.

But the ruling also fully transferred or devolved the delivery of basic services from the national government to LGUs.