IN THE KNOW: The Supreme Court’s Mandanas ruling

In 2013, Batangas Gov. Hermilando Mandanas and former Bataan Gov. Enrique Garcia Jr. questioned the manner in which the internal revenue allotment (IRA) of local government units (LGUs) was being computed.

In a petition, they asked the Supreme Court to compel the national government to compute the IRA based on all taxes collected.

Granting the petition in July 2018 and reaffirming it the following year, the tribunal ruled that the IRA should come from 40 percent of all national taxes collected by the Bureau of Internal Revenue (BIR) and the Bureau of Customs. Under the old system, the allotment came only from the taxes collected by the BIR.

With the SC ruling, the Department of Budget and Management (DBM) estimated that first-class provinces would have an increase of about P814 million in their IRA, raising it to P4.4 billion next year; highly urbanized cities, up by P394 million to P2.13 billion, and first-class municipalities, up by P187.62 million to P1.01 billion.

With the bigger IRA expected to eat up a big chunk of the P5.024-trillion national budget for 2022, the DBM said the various national government functions that are scheduled to be devolved to local governments “must permanently be taken out from national agencies to empower LGUs to assume them.” These functions include health services, local infrastructure, revenue mobilization, employment facilitation, social welfare, housing, natural resources management and agricultural services.

Sources: Inquirer Archives, constitutionalreform.gov.ph