THE Department of Finance (DOF) has yet to study closely the Supreme Court (SC) ruling providing local government units (LGUs) with their “just share” of national government revenue, but ultimately, the agency pointed out, it’s still President Duterte who will have the final say on the matter.
Finance Secretary Carlos G. Dominguez III told financial reporters that the DOF has yet to receive a copy of the SC ruling, which this early is seen to have grave fiscal impact, as certain political leaders are already demanding that the national
government give LGUs their “back pay”—estimated by one governor to breach a trillion pesos—in order to comply with the High Court decision. “We still don’t have a copy of the SC ruling. We haven’t seen a thing, we just heard it through announcements,” Dominguez said. Under the SC ruling, LGUs should get bigger internal revenue allotments (IRAs), with funds coming not only from internal revenue taxes but from other government agencies, as well.
In earlier reports, Batangas City Gov. Hermilando I. Mandanas, pointed out that the SC ruling should be implemented retroactively, adding that total liabilities to LGUs have reached about P1.5 trillion from the period starting 1992 to 2018.
Under Republic Act (RA) 7160 or the Local Government Code, LGUs should receive a 40-percent share of taxes collected by the Bureau of Internal Revenue (BIR).
Mandanas said the unallocated shares from previous years can be paid in tranches over 10 to 20 years, with the method of paying the liabilities still up to the SC’s final decision.
Dominguez explained, however, that a retroactive scheme for providing the “just share” of national government revenues to LGUs cannot be done under a one-time payment system.
“This is speculation, between P1- trillion to P1.5-trillion debt if it’s retroactive. But we don’t know the decision; they [the SC] can say you work it out, but certainly we can’t afford a one-time payment. For sure, we cannot afford that,” he added. One option of the national government is to file a motion for reconsideration with the Office of the Solicitor General, Dominguez said, but reiterated that the appropriate action will be taken once the SC ruling has been studied.