Vice presidential candidate Davao City Mayor Sara Duterte-Carpio has underscored the need for income reclassification among local government units (LGUs) to strengthen the economic performance and operational capacities of towns across the country.
“I support the call for income reclassification, a current and accurate classification of income status will help LGUs strive from a position of physical strength,'' Duterte-Carpio said in her speech during the League of Municipalities of the Philippines 2022 general assembly Tuesday night, March 1.
Attending the event were the fellow local executives of Duterte-Carpio, with whom she feels a strong affinity to.
The presidential daughter, who chairs the Lakas-Christian Muslim Democrats (CMD) party, said LGUs will be in a more advantageous position “in the determination of financial capability for projects, applications and grants" following the proposed income reclassification.
"As the economic portfolio of municipalities improve, your towns will be more viable to investments paving the way for the rise of industries and employment opportunities. Stronger municipalities lead to stronger provinces, stronger provinces lead to a stronger Philippines,” she explained.
She also said there is a need to institutionalize equitable access to just share of the national wealth as provided for by the 1987 Constitution especially now that this year, the national tax allotment of LGUs has increased with the implementation of the Mandanas ruling.
The Supreme Court (SC) decision on the Mandanas case specifies that the just share of LGUs, also known as Internal Revenue Allotment (IRA), must be computed based on all national taxes, and not just from National Internal Revenue Taxes (NIRT).
The 2019 ruling is projected to increase the IRA by 27.61 percent. President Duterte also issued Executive Order (EO) No. 138, which directs the full devolution or transfer of certain executive branch functions to LGUs.
Before the SC decision, the allocation of the IRA was: 27 percent to provinces, 22 percent to cities, 41 percent to municipalities, and 10 percent to barangays. Meanwhile, individual LGUs received more share on the basis of population (70 percent), land area (20 percent) and equal sharing (10 percent).
Despite the Mandanas ruling, Duterte-Carpio lamented that many LGUs are still in a disadvantageous situation “for geographic or other reasons...including those (towns) ravaged (by) calamities”.
To stress her point, she said that may LGUs stricken by typhoon "Odette" last December have yet to fully recover. "In fact it will take years for them to rebuild their municipalities. Therefore no municipality or city regardless of classification should be excluded from continued national government assistance when the need arises,” Duterte said.