Prospects on Prospective Application MANDANAS’ MANDAMUS PART 4

#IRAitamaNaSa2019!

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The big question mark now is when will the Mandanas-Garcia case be implemented?  The LGU Leagues’ prospects or views on its prospective application differ from that of the National Government’s opinion.

By definition, prospective application is the implementation of a new policy after the date of the policy change or at least from the date of commencement of the statute. The change is not applied to prior periods.  Hence, IRA, now termed as National Tax Allotment (NTA), will henceforth be based on all national tax collections three years prior.

It is only when the SC’s decision becomes final and executory will the IRA be adjusted, except on the valid issue ULAP and LPP raised with the DBM on the illegal deductions of the Cost of Devolved Personal Services or CODEPS from the total IRA when it should be given in addition to the total IRA annually.  If it hands down its final decision within 2018, then under Sec. 89 of RA 109641, the reckoning year is the “subsequent fiscal year” or 2019.  This is the LGUs’ clamor!  But given the delays, if settled within 2019, then LGUs should expect an increased share by 2020 at the very least! 

Although the OSG also asked the SC that their decision “should be clarified to mean that the LGUs will begin receiving the adjusted IRA in 2022” i.e. 2019 as the base year for the adjusted IRA for 2022.  OSG merely cited circumstances, like strict observance of the budget cycle, NGAs performing devolved functions, and that the 2019 NEP had already been submitted to Congress. But as to the legal basis for its deferred implementation by 2022, none were provided.  Why? Because there are none!

It must be recalled that the LGCode was passed by Congress during the last quarter of the year.  Similarly, DBM had already submitted its proposed NEP budget for 1992 to Congress in adherence to its budget schedule.  Nonetheless, the LGUs’ IRA share was immediately given by the Aquino administration in the “subsequent year”, i.e. 1992, using 1989 as the base year pursuant to Sec. 284 of RA 76102

Hence, given this precedent, the “base year” against which the IRA is computed is irrelevant since this was not the phrase declared unconstitutional, but rather merely the revenue base, i.e. the phrase “internal revenues” was declared null and void, and that henceforth, LGUs’ NTA should be based on all national taxes to strictly conform with Section 6, Article X of the 1987 Constitution.

In fact, several executive issuances3 were signed by Aquino in the ensuing year.  And still, Congress revised its approved 1992 budget to conform to the LGUs’ IRA share as stipulated in the LGCode retroactive January 1, 1992. Portions of the budget allocations of devolved NGAs were thus partially transferred to LGUs by Congress.  Hence, it has been done before! strict adherence and compliance to existing laws cannot be ignored!


1RA 10964 or GAA FY 2018, SECTION 89.  INTERNAL REVENUE ALLOTMENT OF LGUs.  x x x 
“All valid adjustments, changes, modifications, or alterations in any of the factors affecting the computation of IRA that occurred or happened, including final and executory court decisions made effective, during the current fiscal year, shall only be considered and implemented by the DBM IN THE SUBSEQUENT FISCAL YEAR from receipt by the DBM of the notice of said change.” (underscoring supplied)
2TITLE III.  SHARES OF LOCAL GOVERNMENT UNITS IN THE PROCEEDS OF NATIONAL TAXES, CHAPTER I.  Allotment of Internal Revenue, “Section 284. Allotment of Internal Revenue Taxes. - Local government units shall have a share in the national internal revenue taxes based on the collection of the THIRD FISCAL YEAR PRECEDING THE CURRENT FISCAL YEAR as follows:  (a) On the first year of the effectivity of this Code, thirty percent (30%);  (b) On the second year, thirty-five percent (35%); and(c) On the third year and thereafter, forty percent (40%).  x x x (underscoring supplied)
3Executive Issuances signed by former President Cory Aquino to implement the Code:

  • Executive Order No. 503, signed on January 22, 1992, entitled:
    “PROVIDING FOR THE RULES AND REGULATIONS IMPLEMENTING THE TRANSFER OF PERSONNEL AND ASSETS, LIABILITIES AND RECORDS OF NATIONAL GOVERNMENT AGENCIES WHOSE FUNCTIONS ARE TO BE DEVOLVED TO THE LOCAL GOVERNMENT UNITS AND FOR OTHER RELATED PURPOSES.”
  • Administrative Order No. 270, signed on February 21, 1992, entitled,
    “PRESCRIBING THE IMPLEMENTING RULES AND REGULATIONS OF THE LOCAL GOVERNMENT CODE OF 1991.”
  • Executive Order No. 507, signed on February 24, 1992, entitled: 
    “DIRECTING THE TRANSFER OF FISCAL YEAR 1992 APPROPRIATIONS FOR DEVOLVED SERVICES AND FACILITIES OF CONCERNED NATIONAL GOVERNMENT DEPARTMENTS AND AGENCIES TO THE INTERNAL REVENUE ALLOTMENT, ENJOINING LOCAL GOVERNMENT UNITS TO REVISE THEIR 1992 ANNUAL BUDGETS ACCORDINGLY AND INSTRUCTING THE SECRETARY OF BUDGET AND MANAGEMENT TO ISSUE THE RULES AND REGULATIONS TO BE OBSERVED FOR THE PURPOSE, ALL PURSUANT TO THE PROVISIONS OF THE LOCAL GOVERNMENT CODE OF 1992.”
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Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TheLOBBYiST.
About the Author
Sandra Tablan Paredes is presently the Executive Director of the League of Provinces of the Philippines (LPP) since October, 2016 although she previously served LPP as Director from 1997 to 2004 Sandy helped organize ULAP in 1998 with former Governor Joey Lina and advocated for the LGUs' rightful IRA share, among other league advocacies, programs and projects to help local officials ensure local and fiscal autonomy and good governance. Recently served as concurrent interim Executive Director of ULAP from Jan-March 31, 2017. You can email her at This email address is being protected from spambots. You need JavaScript enabled to view it.
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