Palace rejects LGUs' request to advance release of "national" revenue share
Malacañang has rejected the call of the local government units to fast-track the release of their national revenue allotment share based on the recent decision of the Supreme Court.
Presidential Spokesperson Salavador Panelo said during the Cabinet meeting, which President Rodrigo Duterte presided over Wednesday night, Finance Sectetary Carlos Dominguez III discussed the possible early implementation of the Supreme Court’s decision in the case of Mandanas vs. Ochoa relative to the Internal Revenue Allotment (IRA) for local government units prior to fiscal year 2022.
"Due to the various commitments of the President to the people, such as the implementation of programs designed to combat criminality and corruption, as well as activities of the national government to promote human development and poverty reduction, to name a few, it was agreed that the adjustment of the IRA may not be feasibly effected during this Administration," he said in a statement.
He said if the government would grant the request of the League of Provinces of the Philippines, its fiscal deficit would increase.
"There will be an unmanageable fiscal deficit, while securing loans will be more expensive to the nation as the citizenry will be paying for higher rates," he said.
Panelo, also the chief presidential legal counsel, said the postponement until fiscal year 2022 of the adjustment of the IRA of local government units is in accordance with the ruling by the High Court that the expanded basis for calculating the share of local government units in the national taxes would be prospectively effective starting from the 2022 budget cycle pursuant to the doctrine of operative fact.
In its April 2019 ruling based on the motion for reconsideration that the government filed following the 2018 SC decision in Mandanas vs Ochoa, the adjusted amount for the release of the LGUs' share from the national revenue would be by 2022.
In the 2018 decision, the SC declared that the share of LGUs should not pertain only from the revenue collections of the Bureau of Internal Revenue, but based on all collections of national taxes, except those accruing to special purpose funds and special allotments for the utilization and development of the national wealth.
LPP president and Marinduque Gov. Presbitero Velasco, Jr. earlier asked Duterte for the immediate implementation of the SC decision, stressing the fact that “LGUs have already graciously conceded to the non-payment of the P1.5 trillion IRA shortfalls covering the past 28 years,” referring to the period beginning 1992, when the Local Government Code was first implemented after its passage in October 1991. Celerina Monte/DMS
