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Benjamin E. Diokno's Budget Secretary said the national government can not afford to give local governments a much-bigger share of national tax collections that will be required by the Supreme Court decision By Elijah Joseph C. Tubayan
Reporter
THE GOVERNMENT'S fiscal position may be at risk from the Supreme Court (SC) ruling that local governments Bureau of Internal Revenue (BIR), Budget Secretary Benjamin "Ben" E. Diokno said on Wednesday.
Mr. Diokno said the national government will be in favor of reconsideration through the Office of the Solicitor General (SolGen), as he can not afford to comply with the ruling.
"As of now, hindi pa namin nantatanggap 'yung (we have not received a copy of the) decision," Mr Diokno said in a panel discussion at the second Pre-State of the Nation Address Forum in Manila.
"We do not know how much the damage sa national government. There are P1.2 trillion to about P6 trillion. ' Yun' yung (that is the estimated) effect niya sa gobyerno (on the government), "said the head of the Department of Budget and Management (DBM).
"So" yun yung ipapa-apela namin his (we will ask the) SolGen to (file an appeal to) reverse the decision. Hindi natin kaya 'yun ganong kalaki .
He told reporters afterwards that complying with the high court's ruling double national government's budget deficit "" Definitely may (there will be an) effect his (on) deficiency, to an equivalent of six percent of gross domestic product (GDP) aabot 'yung deficiency namin ng mg has six percent. Ang tawag dun unmanageable public sector deficit. So hindi kaya . "
Although local governments will have more income to funds their projects, Mr. Diokno said global debt watchers may take away the country's investment-grade credit rating – making it harder for the government it was more likely that it was a P8-trillion infrastructure development program until 2022.
" Babagsak yung credit rating natin . International confidence will go down. We'll have to cut 'Build, Build, Build', he said.
The Budget chief as described in his essay on "Speculation" (19659005) His figures compared to the "P498.85 trillion or so close to P500 trillion" due local governments for 1992-2012 that was estimated by Batangas Governor Hermilando I. Mandanas, who raised the issue to the high court in January 2012 as legislative representative of the province's second district.
Republic Act No. 7160, or the Local Government Code of 1991, provides for internal revenue allotments (IRAs) for local governments amounting to 40% of "national internal revenue taxes based on the third fiscal year preceding the current fiscal year ".
IRAs are a key source of local government funding, although development planners and economists have taken over such units to task for being too interconnected on such doleouts and lulling them to c
Economists interviewed yesterday were divided on the ruling, with one arguing that many local government units (LGUs) have a poor track record In 1965, the authors said they were in the best position to identify and implement projects they need for development.
"They have not shown the capacity to spend resources productively. That's why I am very skeptical about federalism because "Raul V. Fabella, a retired professor of the University of the Philippines School of Economics, said in a phone interview, adding that carrying out The Supreme Court decision "will be successful or slow down the national government program."
Describing the ruling as a "bad move," Mr. Fabella explained that "development of the countryside is dependent on infrastructure spending."
" You think LGUs with more money will spend it on your infrastructure? I doubt it, "he said.
" I think they'll spend it on frivolous things. More resources in the hands of Ben Diokno is probably more conducive to regional development than otherwise. "
" The country needs arterial infrastructure which needs huge fiscal resources. Diffusing and dissipating resources is wrong-headed. More basketball courts will not do, "Mr. Fabella said.
But Bernardo M. Villegas, an economist and one of the founders of the University of Asia and the Pacific, said separately in an e-mail:" I agree with the decision. "
" This can make federalization completely unnecessary. Under the Local Government Code … LGU heads can partner with the private sector Build Build Build, such as roads, railways, airports, seaports, government centers, public markets, school buildings, etc., "Mr. Villegas said.
"I know of a very competent and able governors who can implement these PPPs (public-private partnerships) more effectively and quickly than the national government agencies," he explained.
"The IRA that goes to the LGUs can be used as a counterpart for these PPPs. The national government can only delegate some of the public works and other expenses to the LGUs. By devolving part of these projects to the LGU, the national government does not have to increase its deficit as Secretary Diokno maintains. "
Mr. Fabella, however, said that many local government projects are not bankable compared to those of the national government,
Department of Budget and Management data show P522.75 trillion worth of IRAs to 43,607 LGUs this year, 7.37% more than last year's P486.89 billion.
RA 7160 also requires local governments to spend more than 20% of their IRA on social development projects.
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