Gomez warns of 'budget crisis' in local government units

RG Cruz, ABS-CBN News

Posted at Nov 28 2022 10:00 PM

Leyte 4th District Rep. Richard Gomez has warned of a looming budget crisis in local government units in the next 2 years due to the full devolution of some government services and functions from the national government.

"We must address the upcoming crisis in LGU funds, as the total NTA (National Tax Allotment or the share of local government units in national taxes) is expected to drastically decline in both 2023 and 2024," Gomez said in a privilege speech during the plenary session of the House of Representatives Monday.

“Kailangan bigyan natin ng pansin ang nagbabadyang budget crisis ngayong 2023 at 2024. Pababayaan ba nating bumagsak ang ating mga LGU? Akong galing sa LGU, hindi ko kayang talikuran, hindi ko kayang ipikit na lang ang mga mata habang alam kong puwede pa nating iwasan ito,“ Gomez also said.

Gomez explained that the Supreme Court ruling on devolution only resulted in substantial proportional added budgets to LGUS which are still not sufficient enough for full devolution because of insufficiency of funds and misalignment of available funds.

“Nevertheless, the lack or availability of fund is just one piece of the puzzle. The other critical part of this is the alignment between funds available and funds needed. Ang ibig sabihin nito—ay ang ating pamamaraan sa paglatag ng mga LGU budget ay hindi naka hanay sa mga gastos ng mga proyektong i-de-devolve sa bawat LGU. There is no direct corelation between how we derive the IRA or NTA that LGUs receive and the cost of devolved functions,” Gomez said.

He said local government units are always short on funds because the allotment of funds is not done with consideration of the costs of the devolved programs.

“Ang nangyayari tuloy, maraming programs na walang funding, hindi na lang na-iimplement," Gomez added.

“To summarize my exposition: As long as we are burdened with systematic misalignment in LGU’s budgets and cost of devolved programs, we will not be 100% ready for full devolution of programs. Ang dagdag budget na dulot ng Mandanas-Garcia Ruling ay hindi sapat para agad-agad tayong mag full devolution of programs. Kailangan pa rin ng tulong ang mga LGUs natin,“ he said.

Gomez has filed a House Resolution, calling on the Committee on Local Government to create an inquiry in aid of legislation to design an NTA allocation system that reflects an alignment between (a) the NTA that LGUs would receive and (b) their funding requirements, especially those of devolved programs.

“Ang gusto ko sanang mangyari, ay matupad ang mga hangarin ng ating National Government at LGUs. Gusto ko lang makita na bawat Pilipino ay mabigyan ng nararapat na serbisyo. This can only happen if there is a 1:1 (one is to one) peso for peso correspondence between additional NTA that each LGU receive and the COST of devolved programs. Kung hindi-- palaging kapos ang LGUs natin," Gomez explained.

He noted that national government agencies and local government units have started the process of full devolution, which is expected to be completed in 2024.

“NGAs have begun scaling back on funding that they provide to LGUs for certain functions. Nevertheless, the process is experiencing delays; for example, as of this week, the DBM website has posted only 2 approved Devolution Transition Plans- those of the DOH and the Commission on Population Development (CPD). LGUs have reportedly submitted their DTPs as well, but their approvals are not expected in the very near future. With these actions in play, it is difficult to retract from EO 138," he said.

Gomez also filed a bill seeking to extend the coverage and purpose of the Growth Equity Fund (GEF) to extend the coverage and purpose of the GEF to all LGUs in the forthcoming two years, to help alleviate the major reduction in NTAs. The bill will require for its own implementing rules and regulations, which will be a collaboration among the DBM, DILG and NGAs.

The GEF is a mechanism to help LGUs in the 4th and 5th income brackets bridge the funding gaps through the process of full devolution.