Leyte Rep. Richard Gomez has sought a House probe on the “misalignment” in the National Tax Allotments (NTAs) of local government units and the funding requirements for full devolution of specific national public services.
“Mahalagang busisiin ng Kongreso ang isyung ito nang sa ganun ay mabigyang linaw ng national government kung saan kukunin ng ating mga local leaders ang pondo para sa pagsalo ng ibang serbisyong pang-nasyonal (It is important for Congress to closely look into this issue so that the national government could clarify where the local leaders will get funds for other national services),” he said in a statement on Tuesday, Nov. 29.
The lawmaker noted the funds that LGUs receive from national taxes were not enough for full devolution under Executive Order No. 138 and Republic Act 7160.
As such, he filed House Resolution (HR) 599, which prodded the chamber to carry out an inquiry on the alleged misalignment.
In filing the resolution, Gomez said that “the calculation of (the) NTA, as mandated (under) RA 7160, is not aligned with the costing of devolved functions” under RA 7160 and EO 138, which was issued on June 1, 2021 following the Supreme Court’s Mandanas-Garcia decision.
The SC in 2019 ruled in favor of Gov. Hermilando Mandanas and Gov. Enrique Garcia Jr. and granted substantial, additional, and proportional increases in the local government’s national tax allotments.
EO 138, issued by former president Rodrigo Duterte in June 2021, provides for the full devolution of certain functions of the executive branch of the government– including implementation of local infrastructure projects–to LGUs in line with the High Court’s Mandanas-Garcia ruling.
“The increase in national tax allotment for LGUs, as a result of the Mandanas-Garcia ruling, is not guaranteed to fully cover all devolved functions” under EO 138 and RA 7160, Gomez asserted.
He called on his colleagues in the House of Representatives to echo his call for President Ferdinand “Bongbong” Marcos Jr. to repeal EO 138.
“I am appealing to President Marcos to nullify EO 138 as Congress and the Executive thresh out the various issues that have cropped up related to the implementation of the full devolution of services,” he said.
“Ayusin po muna natin ang lahat ng usapin at saka po natin pag-usapan uli ang (Let us fix first all the issues and then we discuss again the) full devolution,” Gomez added.
In a separate proposed bill, the lawmaker said: “This representation maintains that we have not yet attained the optimal conditions for full devolution. Much as it seems that additional, yet proportional NTAs for each LGU would solve the budget gaps in each LGU, it is not as simple as that. At the onset of the full devolution process, various issues have arisen that signal a fiscal crisis among LGUs, especially in the next two years.”
To address the funding issues related to fully devolving national functions to LGUs, Gomez filed House Bill (HB) No. 6414 which calls for the creation of a fund that would provide gap financing for LGUs that have incurred deficits in the years leading to full devolution.
The proposed “Local Government Units Full Devolution Gap Financing Fund (the Fund)” is aimed at servicing all LGUs regardless of income brackets.
Aside from providing gap financing, his bill proposes the conversion of the Growth Equity Fund, which was created under EO 138, as initial funding component for the Fund.
Under the measure, the LGUs with budget surpluses will be allowed to invest in the Fund as capital for soft loans to LGUs in deficits, thus giving LGUs “an opportunity to help one another.”