Devolution plan won’t include infra projects—DBM

The Department of Budget and Management (DBM) said that the implementation of big-ticket infrastructure projects should remain under the national government despite the Mandanas ruling.

Budget Secretary Amenah F. Pangadaman said in an interview with reporters that the national government is currently in the process of reviewing the spending items to be transferred to local government units (LGUs).

But as early as now, Pangandaman signaled that flagship infrastructure projects of the Marcos administration would not be handled by the local executives.

“Infrastructure projects and big-ticket items should still be with the national government,” Pangandaman said.

LGUs are known for their rampant understanding. In June 2021, the World Bank flagged that the transfer of some national government’s responsibilities to local executives may hamper the delivery of basic services to the public.

“The Mandanas ruling in effect increased the amount of resources that are given to LGUs, local government units. So they, they have more money now than before as a result of that,” Finance Secretary Benjamin E. Diokno said.

“Right now we are reviewing what spending items that should be assigned to LGUs. So we are in close coordination with, of course the leagues of cities, provinces, etc. And of course the secretary of local governments,” Diokno said.

Pangandaman said that DBM may present this week the result of the review before President Marcos, Diokno, the Department of the Interior and Local Government, and the National Economic and Development Authority.

She also said the implementation of the devolution will be in phases.

“We'll come up with a menu, and a transition plan. Our devolution will be in phases because I think the LGUs cannot implement,” the budget chief believes.

In November 2021, former Finance Secretary Carlos G. Dominguez III warned that the implementation of Mandanas ruling may likely drag down the country’s economic recovery by around three percent due to less efficient spending by LGUs.

“Based on our estimates, the implementation of the Supreme Court’s 2018 ruling will yield lower economic growth because local governments spend less efficiently,” Dominguez said in a statement.

To recall, the High Tribunal had ruled in 2018 that the LGUs’ “just share” of revenues includes all national government taxes, and not limited only to Bureau of Internal Revenue collections.

The SC decision effectively raised the base for computing LGU’s share or National Tax Allotment (NTA)—formerly known as the Internal Revenue Allotment (IRA)—on national government taxes.