The Department of Budget Management (DBM) has allocated around PHP962.2 billion for the local government units (LGUs) nationwide in 2023 to boost their capabilities and enable them to fast-track the delivery of their basic services.

The 2023 budget plan for LGUs represents around 18.3 percent of the proposed PHP5.268-trillion national budget for next year, the DBM said in a press statement on Wednesday.

The DBM said around PHP820.27 of the PHP962.2 billion would be used for the National Tax Allotment (NTA) shares of LGUs, in accordance with the Mandanas-Garcia Supreme Court (SC) ruling.

Under the SC ruling, LGUs get a bigger share in the collections of national taxes, as their internal revenue allotment (IRA) should come from 40 percent of all national taxes collected by the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC).

The IRA share of LGUs, based on the old system, came only from the taxes collected by the BIR.

The implementation of the SC ruling began this year, with the IRA renamed as NTA.

On the other hand, about PHP28.88 billion would be allocated as LGUs’ Local Government Support Fund (LGSF) for 2023, higher by PHP10.91 billion from the PHP17.97 billion appropriated in 2022, the DBM said.

The PHP28.88-billion LGSF, the DBM said, consists of PHP13.88 billion for the provision of the Growth Equity Fund as financial assistance to the identified poor, disadvantaged, and lagging LGUs; PHP5 billion worth of cash aid for all level LGUs, except for those in the Bangsamoro region; and PHP10.00 billion for the Support to Barangay Development Program (SBDP).

Budget Secretary Amenah Pangandaman acknowledged the LGUs’ role in achieving inclusive and sustainable economic prosperity in the country.

“With a total allocation of PHP962.2 billion for LGUs, we aim to strengthen our efforts in capacitating and empowering them to autonomously deliver essential services to their constituents,” Pangandaman said during the Senate briefing on the proposed 2023 national budget.

Pangandaman said the assistance to LGUs would ensure the implementation of programs and projects for the agriculture sector; information and communications technology systems and infrastructure development; construction and rehabilitation of public spaces; and disaster response, rehabilitation, and recovery.

“Despite the limited fiscal space, we tried to increase some of the budget allocations for LGUs,” she said, adding that the economic transformation agenda will be realized with the help of the local governments.

On Tuesday, Local Government Secretary Benhur Abalos Jr. urged the 430 beneficiary LGUs to utilize the PHP1.25-billion support fund to help them carry out devolved functions and services, particularly on projects that are most beneficial and responsive to their constituents. (PNA)