BUDGET WOES | Escudero warns challenges for LGUs next year over insufficient funds

October 28, 2021 , 10:47 AM

By Beatrice Puente

(October 28, 2021) – Presidential candidates must offer possible solutions in resolving the budget constraints faced by local government units (LGUs) due to the limited revenues they can spend for social services, senatorial aspirant and Sorsogon Gov. Chiz Escudero said on Wednesday.

Escudero estimates that the internal revenue allotment (IRA) for provinces, cities, and municipalities won’t be enough to cover funds for devolved functions. He added that the battered economy due to the COVID-19 crisis would inevitably affect the total amount LGUs can get from the government.

“Papaano niya (susunod na pangulo) tutugunan ‘yung pangangailangan ng LGU roon?” asked Escudero on One News’ The Chiefs. “Pinasa na ng devolution executive order ni Pangulong (Rodrigo) Duterte ang napakaraming functions. Babawiin ba ulit ‘yun pagbaba ng IRA?”

Last June, Duterte pushed for the full devolution of basic services to LGUs through Executive Order 138, citing the expected “substantial increase” in the IRA. It was based on the Mandanas ruling of the Supreme Court.

In 2018, the high court ruled that the “just share” of taxes provided to LGUs should come from the total national taxes instead of internal revenue taxes alone. The Malacañang said this would increase the budget of LGUs by as much as 50% which would allow them to deliver more functions.

Duterte’s order stated that the IRA can be determined based on the total collections three years before the current fiscal year, citing the Mandanas ruling and the Local Government Code of 1991. It further specified that the adjusted tax collections would take effect starting 2022.

Escudero said LGUs would take the hit by 2023 since the country’s tax collections slumped last year due to the COVID-19 pandemic. He said the total devolved services could cost P1.3 trillion while the expected IRA would only roughly be around P655 billion, posing a large discrepancy.

“Ito at ilang mga bagay ang dapat pinag-iisipan at pinaghahandaan ng sino mang tumatakbo bilang pangulo. Dahil pag-upo niya, tapos na ang budget call,” said Escudero. “Paano siya maghahanap ng humigit-kumulang P600 billion sa national budget para punuan ‘yung pagkukulang sa IRA ng LGU?”

If he makes a Senate comeback, Escudero said he will help resolve these issues to properly assist LGUs. He also vows to closely look into the crafting and spending of the national budget since it could be “an instrument of growth.”

Escudero also questioned why some government agencies still need to approve how LGUs spend their funds when local officials are in a “much better position” to determine what their residents need.

“Malayong mas alam ng isang mayor or governor kung anong kailangan at dapat gawin sa kanyang lugar kaysa sa sino mang secretary, gaano man siya kagaling … na ni hindi man lang tumatayo o dumudungaw sa bintana niya para makita ;yung kalagayan namin mula sa malalayong lugar,” stressed Escudero.

(PM)

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