DBM WB Webinar on the Institutional Framework for the Implementation of the Supreme Court Ruling on the Mandanas Garcia Petitio

1. DBM-WB Webinar on the Institutional Framework for
the Implementation of the Supreme
Court Ruling on the Mandanas-Garcia Petition

2. OUTLINE OF
PRESENTATION Internal Revenue Allotment (IRA) and the Supreme Court (SC)
Ruling on the Mandanas Case
1
2
Full Devolution as Measure to Mitigate Impact of SC Ruling
on the Mandanas Case (Executive Order on Full Devolution)

3. IRAAND THE SC RULING ON THE
MANDANAS CASE

4. 4
IRA AND THE SC RULING ON THE MANDANAS CASE
• Local government units (LGUs) shall have
a just share, as determined by law, in the
national taxes which shall be
automatically released to them
• Forty percent (40%) of the share in the
national internal revenue taxes (NIRT)
based on the collection of the third fiscal
year preceding the current fiscal year will
be given to LGUs
INTERNAL REVENUE ALLOTMENT (IRA)
National
Government
60%
Internal
Revenue
Allotment
40%
NATIONAL INTERNAL REVENUE
TAXES

5. 5
IRA AND THE SC RULING ON THE MANDANAS CASE
IRA COMPUTATION
[1] There are only 81 Provinces, but the Metro Manila Development Authority
receives IRA like that of a Province.
LEVEL OF LGU NO. OF LGUs
%
ALLOCATION
Provinces 821 23%
Cities 146 23%
Municipalities 1,488 34%
Barangays 41,931 20%
Total 43,647 100%

6. 6
IRA AND THE SC RULING ON THE MANDANAS CASE
• The distribution of the shares of
individual provinces, cities and
municipalities (PCM) is based on
the following formula:
IRA COMPUTATION (PCM)

7. 7
IRA AND THE SC RULING ON THE MANDANAS CASE
IRA COMPUTATION (BARANGAYS)
P 80,000
for each barangay with a
population of not less than one
hundred (100) inhabitants
60%
40%
Population Equal Sharing

8. 8
IRA AND THE SC RULING ON THE MANDANAS CASE
• The Supreme Court (SC) ruled that the just share of LGUs from the national taxes is
not limited to “national internal revenue taxes” collected by the Bureau of Internal
Revenue (BIR) but includes collections (customs duties) by the Bureau of Customs
(BOC).
SUPREME COURT (SC) RULING ON THE MANDANAS CASE
NIRT
IRA
NG
NATIONAL TAXES
60%
40%
AFTER MANDANAS RULING
(NATIONAL TAXES)
National government IRA

9. 9
IRA AND THE SC RULING OF THE MANDANAS CASE
EXPECTED INCREASE IN THE IRA OF LGUs (FY 2022)
*Based on the 07 March 2020 computation of DOF
**Based on DBCC AdRef meeting on July 28, 2020
Projected IRA in 2022 % to GDP (2022)**
Before SC decision PhP848.44 B 3.72%
After SC decision PhP1.083 T 4.75%
PhP 234.39 B
(27.61% more, 1.03% of GDP) *

10. 10
IRA AND THE SC RULING OF THE MANDANAS CASE
PROGRAM ALLOCATION FOR IRA, 2019-2022
575.52
648.92
695.49
1,082.73
0
200
400
600
800
1000
1200
2019 2020 2021 2022
Billions
55.7%

11. 11
LGU
Income
Class
2022 IRA
SHARE (w/o
Mandanas)
2022 IRA SHARE
(w/ Mandanas)
% Increase
NOMINAL
INCREASE
Province A 1st
3.59 B 4.401 B 27.61% 814 M
City B 1st
(HUC) 1.740 B 2.134 B 27.61% 394 M
Municipality C 1st
826 M 1.014 B 27.61% 187.62 M
IRA AND THE SC RULING OF THE MANDANAS CASE
SAMPLE LGUs

12. 12
• The SC, in its Resolution dated April 10, 2019, maintained its Decision as regards
the prospective application of the adjusted shares of LGUs.
• Further, the SC in its Notice of Resolution dated October 8, 2019, explained that
the 2019 Budget can no longer include the changes brought about by the July 3,
2018 Decision, neither can the same amounts be considered in drawing up the
2020 and 2021 budget because their budget cycles have already commenced.
CAN LGUs RECEIVE THE ADJUSTED IRA IMMEDIATELY?
IRA AND THE SC RULING OF THE MANDANAS CASE

13. FULL DEVOLUTION AS MEASURE TO
MITIGATE IMPACT OF SC RULING OF
THE MANDANAS CASE

14. 14
FULL DEVOLUTION AS MEASURE TO MITIGATE IMPACT
OF SC RULING OF THE MANDANAS CASE
• Sec. 17 of the LGC mandated the
devolution of several functions to
LGUs.
• However, many national agencies
continues to implement these
functions
• For fiscal sustainability, the devolved
functions must permanently be
taken out from the national agencies
to empower the LGU to assume them
Adapted from Powers and Devolved Services of Local Government Units (LGUs) by Dr. Maria Ela Atienza (Professor and Chair), Asst.
Prof. Jan Robert Go (Assistant Professor), and Herby Jireh Esmeralda (Research Assistant). Retrieved from
https://halalan.up.edu.ph/powers-and-devolved-services-of-local-government-units-lgus/
IRA
shares
NG fiscal
resources

15. TOTAL AMOUNT OF PAPS WITH LOCAL PROJECTS FOR REVIEW, PER
NGA (IN THOUSANDS)
Agency FY 2019 GAA FY 2020 GAA (TOTAL AMOUNT TO BE DEVOLVED)
DA 14,980,641 18,048,636
DAR 643,564 664,311
DENR 312,582 218,097
DepEd 30,973,016 27,551,678
DILG 152,289 70,262
DOH 37,864,278 15,854,721
DOLE 860,839 851,503
DOST 1,405,644 1,443,985
DOT - 35,076
DOTr 1,361,000 133,320
DPWH 67,868,021 168,768,735
DSWD 12,279,598 18,237,351
DTI 1,121,207 1,979,050
GOCC 8,892,668 9,539,997
LGSF 32,730,124 28,852,461
OEO-SPDA - 33,257
TOTAL 211,445,471 292,282,440

16. 16
EXECUTIVE ORDER DIRECTING THE FULL DEVOLUTION OF CERTAIN
FUNCTIONS OF THE EXECUTIVE BRANCH TO LOCAL GOVERNMENTS
SALIENT FEATURES
*
Delineation
of NG and
LGU Roles
Preparation of
Devolution
Transition Plans
Options for
Affected NGA
Personnel
Capacity
Building
for LGUs
Strengthening of
Planning, Investment
Programming, and
Budgeting Linkage
and M&E Systems
16

17. 17
EXECUTIVE ORDER DIRECTING THE FULL DEVOLUTION OF CERTAIN
FUNCTIONS OF THE EXECUTIVE BRANCH TO LOCAL GOVERNMENTS
SALIENT FEATURES
*
Delineation
of NG and
LGU Roles
Preparation of
Devolution
Transition Plans
Options for
Affected NGA
Personnel
Capacity
Building
for LGUs
Strengthening of
Planning, Investment
Programming, and
Budgeting Linkage
and M&E Systems
17

18. 18
EXECUTIVE ORDER DIRECTING THE FULL DEVOLUTION OF CERTAIN
FUNCTIONS OF THE EXECUTIVE BRANCH TO LOCAL GOVERNMENTS
SALIENT FEATURES
*
Delineation
of NG and
LGU Roles
Preparation of
Devolution
Transition Plans
Options for
Affected NGA
Personnel
Capacity
Building
for LGUs
Strengthening of
Planning, Investment
Programming, and
Budgeting Linkage
and M&E Systems
18

19. 19
EXECUTIVE ORDER DIRECTING THE FULL DEVOLUTION OF CERTAIN
FUNCTIONS OF THE EXECUTIVE BRANCH TO LOCAL GOVERNMENTS
SALIENT FEATURES
*
Delineation
of NG and
LGU Roles
Preparation of
Devolution
Transition Plans
Options for
Affected NGA
Personnel
Capacity
Building
for LGUs
Strengthening of
Planning, Investment
Programming, and
Budgeting Linkage
and M&E Systems
19

20. 20
EXECUTIVE ORDER DIRECTING THE FULL DEVOLUTION OF CERTAIN
FUNCTIONS OF THE EXECUTIVE BRANCH TO LOCAL GOVERNMENTS
SALIENT FEATURES
*
Delineation
of NG and
LGU Roles
Preparation of
Devolution
Transition Plans
Options for
Affected NGA
Personnel
Capacity
Building
for LGUs
Strengthening of
Planning, Investment
Programming, and
Budgeting Linkage
and M&E Systems
20

21. THANK YOU