LGUs Face Billions of Pesos Slashed Budget Next Year

By Mortz C. Ortigoza

Local government units (LGUs) in the provinces, cities, towns, and villages will suffer a reduced budget of tens if not hundreds of millions of pesos on their national tax allotment (NAT).

NAT’s precursor is the internal revenue allotment as provided by law that funnel a huge chunk of funds in most of the LGUs in the Philippines.

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“Ang province (of Pangasinan) baba ng almost P900 million province P4 billion noon,” said by newly elected Manaoag Mayor Jeremy Agerico Rosario by comparing the P4 billion budget of Pangasinan this year and her impending slash budget next year.

Before his mayoral mandate started in June 30 this year, Rosario was a seasoned provincial legislature of the forty-four towns and three cities LGUs of Pangasinan.

If the appropriation budget of P4 billion would be reenacted next year by the administration of Pangasinan Governor Ramon Guico, III, the same NAT this year could not be given by the national government next year.

The Local Government Code of the Philippines cited that the LGUs shall have a share in the national internal revenue taxes based on the collection of the third fiscal year preceding the current fiscal year as follows:… (c) On the third year and thereafter, forty percent (40%).

According to the Department of Budget and Management, due to the drop in tax revenues collected by the government in 2020 at the onset of the Corona Virus Disease - 19 pandemic local governments’ share in the proposed 2023 national budget will be reduced to P820.3 billion,
A local budget memorandum issued by the DBM said  that LGUs share from all tax collections in 2020, which was the basis of their 2023 national tax allotment (NTA), included P665.8 billion from the Bureau of Internal Revenue’s (BIR) tax take two years ago; P154.4 billion from the Bureau of Customs’ collections of import duties and other taxes, and; P32.6 million in national taxes collected by other agencies.

When divided to all local government units, the country’s 82 provinces will have an NTA share of P188.7 billion, which they will divide among themselves; the 146 cities, also P188.7 billion; the 1,488 municipalities, P278.9 billion; notwithstanding the P164.1 billion to be subdivided among the 41,935 villages or barangays nationwide.

Next year’s NTA will be below the record P959.04 billion in this year’s P5.02-trillion national budget—the first annual appropriation that implemented the Supreme Court’s Mandanas-Garcia ruling. LGUs’ 2022 NTA was based on all tax collections in 2019.

Binmaley Mayor Pete Merrera deplored to this writer that its present P350 million appropriation budget will be reduced by P44 million next year.

The P350 million budget of the 33 barangays’ LGU is one of the highest budgeted town among the first class municipalities in the province.

“Baba kami ng P40 million for 2023 budget,” the mayor of the pilgrims’ first class town Manaoag cited.

Rosario said that presently his burgeoning town has a budget of P268 million.