LOCAL government units (LGUs) are now on the hook for the construction of 36 new ports and docks in the wake of devolution, the Department of Budget and Management (DBM) said, in noting the absence of such funding in the 2023 budget.
“Per Section 17 B item 8 of the Local Government Code of the Philippines, and pursuant to the Mandanas-Garcia Case Ruling, the construction of local ports has already been devolved to the LGUs,” Budget Undersecretary Goddes Hope O. Libiran told reporters in response to queries.
The National Government shed billions of pesos worth of functions performed by its agencies in response to the Supreme Court’s Mandanas-Garcia ruling, which expanded the 40% share granted to LGUs from National Government revenue.
Before the ruling, LGUs were entitled to a 40% share of “internal revenue,” which the National Government previously interpreted as 40% of the collections of the Bureau of Internal Revenue.
The Supreme Court struck down this interpretation in ruling that LGUs are actually entitled to 40% of all national taxes, expanding the pot available to LGUs and causing the National Government to pass on responsibility for some of its operations to the subnational level.
“We note that the following basic services and facilities related to transportation and ports are devolved to the LGUs under Section 17 of the Local Government Code of 1991 (Republic Act No. 7160): infrastructure facilities including traffic signals and road signs and similar facilities; adequate transportation facilities; fish ports; and infrastructure facilities intended primarily to service the needs of the residents of the municipality including, but not limited to fish ports, among others.”
Undersecretary for Maritime Elmer Francisco U. Sarmiento of the Department of Transportation (DoTr) said that the DBM disapproved P800 million worth of proposed funding for the development of seaports.
“The DoTr has this proposal to construct 36 ports (next year). Unfortunately, it was not approved by the DBM. We also have foreign-assisted projects to improve capacity, especially the upgrade of assets of the Philippine Coast Guard, but they were rejected as well by the DBM,” Mr. Sarmiento said during a briefing for the 2022 National Maritime Week on Monday.
“The plenary debates in Congress and Senate are upcoming. We are still fighting for additional budget for maritime. I think the problem we are facing right now is fiscal space. Given the limited resources, our government is prioritizing expenditures,” he added.
Meanwhile, Ms. Libiran also listed other devolved functions, based on the submitted devolution transition plans of the DoTr, the Department of Agriculture, and the Department of Public Works and Highways.
These include the development of locally-funded social and tourism ports; the operation of municipal fish ports or for projects that cut across two or more barangays; and the construction or improvement of access roads leading to airports or seaports.
During a Senate Finance Committee hearing last week, Budget Secretary Amenah F. Pangandaman said President Ferdinand R. Marcos, Jr. ordered her department to prepare amendments to Executive Order (EO) 138, the devolution plan issued by the Duterte administration in response to the Supreme Court ruling.
“We have a draft already and, I think in two weeks’ time, we will convene with the LGUs,” she said.
The ruling raised the LGU allocation from National Government taxes to P959 billion this year, up 37.89%.
EO 138 set the completion of the devolution timetable to the end of 2024.
By 2024, the National Government is estimated to have shifted programs and projects worth P234.4 billion to LGUs. — Diego Gabriel C. Robles