President Marcos: PH gov’t refining rollout of Mandanas-Garcia ruling on tax revenues

President Ferdinand Marcos Jr. said the Philippine government is currently refining the implementing rules and regulations (IRR) of the Mandanas-Garcia ruling to ensure a more effective rollout of the expanded tax revenue allocations for local government units (LGUs).

The Mandanas-Garcia ruling, issued by the Supreme Court in 2018, broadened the basis for computing LGUs’ share in national taxes, effectively increasing their funding. However, the decision also transfers certain national government functions to LGUs, requiring them to take on greater responsibilities in delivering public services.

The President clarified that the administration is working to delineate responsibilities between national agencies and LGUs.

"Right now, we are still having to modify, amend, and go through the IRR of the way the ruling is going to be applied,” Marcos said.

Programs that are national in scope will remain under national oversight while local functions are being clearly defined.

Although the increased share was technically applied in previous years, its full impact was delayed by low revenue collections during the pandemic.

“What we have done, we have come to the conclusion that the way to delineate functions between national and local is that those that belong to a program that is national in nature will be attended to by national,” the Chief Executive noted.

Marcos pointed out that while the policy expanding LGUs’ share—commonly referred to as the Internal Revenue Allotment (IRA)—had already been put in place in previous years, its impact was not immediately felt due to low revenue collections during the COVID-19 pandemic.

“Although technically applied na ‘yung IRA share na increase ng local government, wala naman naramdaman dahil wala naman masyadong koleksyon noong 2020. But as the years go on, you will begin to see that,” the Chief Executive said.

However, LGUs are expected to see a more significant increase in funding as collections stabilize.

Additionally, the administration is simplifying accounting and auditing processes to address concerns raised by local officials.

This transition requires LGUs to take on greater responsibilities in public service delivery as their funding base expands under the Supreme Court's 2018 ruling.