MANILA – If implemented correctly, the Mandanas Ruling, which entitles local governments to a share of all national taxes, can help improve government services across the Philippines and help the country recover faster from the disruptions of the pandemic, the World Bank said on Thursday.
The World Bank said the Ruling, which increases the internal revenue allotment (IRA) of LGUs by 55 percent in the 2022 budget, has the potential to improve government services across the country while ensuring a more stable and inclusive recovery from the health crisis.
LGUs will get P1.08 trillion or 4.8 percent of the country’s gross domestic product compared to 3.5 percent of GDP in 2021, in next year’s budget.
But if not rolled out correctly, the Ruling also has negative implications.
"If implementation is not rolled out effectively, it could result in worsening gap in service delivery which is especially costly in the midst of a historic recession in a health crisis," said World Bank economist Kevin Cruz.
Cruz explained the national and local government units need to review their division of labor.
"The authorities need to ensure that the development goals of the national government and local governments are well-aligned, and that service delivery gaps are minimized, particularly during this unprecedented crisis."
The World Bank also urged the national government to improve the capacity of LGUs while enhancing their transparency and accountability.
Other recommendations for managing the transition due to the Mandanas Ruling include channeling the LGUs’ budgets to the pandemic response.
Albay Representative Joey Salceda said the ruling could help generate more jobs in the countryside, but stressed the importance of collaboration between the national and local governments.
"In the current scheme, we need to fortify the regional development councils because it is the most immediate instrument, mechanism that is already existing that could guide decentralization, provide some sort of oversight and some sort of convergence between national and local (governments)," Salceda said.
Francisco Magno, Senior Fellow and Founding Director of the Jesse M. Robredo Institute of Governance, meanwhile, said the further decentralization of government services should help the country achieve its Sustainable Development Goals by 2030.
"I would say, success would mean attainment of significant progress and the attainment of localized SDG targets as well as the Philippine Development Plan," Magno explained. "Success would mean stronger mechanisms of voice and participation, public participation in planning, budgeting, monitoring, and auditing."
Among the services that could get a boost from the Mandanas Ruling are healthcare, social welfare, agriculture, and local infrastructure.
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