RECTO: Duterte admin should follow Supreme Court decision, give LGUs their share in national gov't income

The first test of the administration promise that federalism will funnel more funds to grassroots is for it to immediately comply with the Supreme Court decision raising the share of local governments from national tax collections.

“The administration is being presented with the opportunity to put its money where its mouth is, in a case that will prove federalism’s model of granting the regions more money is feasible,” Senate President Pro Tempore Ralph Recto said.

“Kung hindi nila kayang pondohan ang isang desisyon na inutos mismo ng Korte Suprema, paano pa kaya ang gastos ng pederalismo na di hamak ay mas malaki?” Recto said.

He said government compliance on the Internal Revenue Allotment (IRA) case can be made through the 2019 budget, “or to avoid breaching its P3.757 billion ceiling, which is not allowed by the Constitution, a separate law or a supplemental appropriations measure can be passed by Congress.”
“Bawal kasing magpasa ng isang national budget na ang total amount ay lampas sa hinihingi ng Pangulo, kaya pwede supplemental na lang,” Recto said in explaining the supplemental appropriations route.

“Kung sa loob naman ng 2019 budget kukunin ang kinakailangang pondohan – P195 billion – ay mahihirapan namang hanapan ng puwang sa isang budget na maliit na ang elbow room for alteration,” Recto said.

“Kung may off-budget means of settling this payable, pwede rin i-explore for as long as legal and fiscally-responsible, meaning hindi uutang na malaki ang interest,” he said.

The Supreme Court on July 4 ruled that the share of LGUs from taxes paid should be sourced from “all national taxes and not only national internal revenue taxes.”

The mechanism by which the taxes are plowed back to local governments is the Internal Revenue Allotment. The latter is apportioned as follows: 23% for provinces, 23% for cities, 34% for municipalities, and 20% for barangays.

The Supreme Court ruled that in computing the share of local governments, collections made by the Bureau of Customs, and other fees collected by government agencies, must be included.

Recto said the High Court ruling on IRA case proves that public funds can be sent to the grassroots without tinkering with the Constitution, but by way of ordinary legislation, Recto said.

Recto has filed three “equal IRA share” bills, which contain other reform provisions like basing the IRA on internal revenues collected two years before, instead of the present three, and allowing the direct remittance of national wealth income, like share from mining, to host LGUs.

“Pwedeng 50-50 or hating kapatid ang national at mga lokal. Pwedeng gawing 60-40 in favor of local governments . Pwedeng taasan pa based on a new division of labor. Kung decentralized ang ilang functions which LGUs can better do at less cost, then dagdagan ang pondo nila,” Recto said.#

SOURCE:; Settling of Govt's P195 B IRA debt is federalism test case – Recto; Senate of the Philippines; Wednesday, August 8, 2018

Ralph Gonzales Recto is a Filipino politician. He served as a member of the House of Representatives representing the 4th District of Batangas from 1992 to 2001. He was then elected to the Senate, serving from 2001 to 2007.

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