What happens to LGUs in proposed charter?

IT seems indeed that local government units – provinces, cities, municipalities, and barangays – could be at a disadvantage, considering that the final draft of the proposed federal constitution crafted by the Consultative Committee is silent on many issues affecting LGUs that comprise the federated regions.

Foremost among the issues is the sharing of revenues and taxes – the lifeblood of LGUs if they are to effectively fulfill their primary functions of governance and delivery of services to the people. A review of the draft charter would inevitably lead to these questions: What exactly is the role of LGUs in the collection of taxes, licenses, and fees? How shall collected taxes and duties be appropriated among LGUs in the federated regions?

Section 2, Article 13 of the draft charter reads: “The Federated Regions shall have the power to levy and collect the following taxes, licenses and fees: (a) Real Property Tax; (b) Estate Tax; (c) Donor’s Tax; (d) Documentary Stamp Tax; (e) Professional Tax; (f) Franchise Tax; (g) Games and Amusement Tax; (h) Environmental Tax, Pollution Tax, and similar taxes; (i) Road Users Tax; (j) Vehicle Registration Fees; (k) transport Franchise Fees; and (l) Local taxes and other taxes which may be granted by federal law.” The draft constitution is then silent on the specific role of LGUs pertaining to this particular power of federated regions.

The apparent omission in the draft charter becomes conspicuous when compared to the 1987 Constitution that has a provision (Section 5, Article 10) which states: “Each local government unit shall have the power to create its own sources of revenues and to levy taxes, fees, and charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic policy of local autonomy. Such taxes, fees, and charges shall accrue exclusively to the local governments.”

And unlike the draft charter, the 1987 Constitution has a specific provision (Section 3, Article 10) for a “local government code which shall provide for a more responsive and accountable local government structure instituted through a system of decentralization… allocate among the different local government units their powers, responsibilities, and resources, and provide for… all other matters relating to the organization and operation of the local units.”

That particular provision has led to the enactment of the 1991 Local Government Code (LGC) which greatly benefits and strengthens LGUs, especially with its Section 16 that authorizes local officials to use their vast powers in undertaking activities “essential to the promotion of the general welfare.”

This general welfare clause mandates LGUs to “enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants.”

Having helped in the drafting of the LGC when I was a senator, and having served as Metro Manila governor, Laguna governor, and DILG secretary, I can honestly say that utilizing the general welfare clause to its fullest extent can open up limitless possibilities for LGUs that endeavor to be self-reliant.

LGUs are clearly tasked by law to reduce joblessness and promote livelihood activities that will enhance economic prosperity in communities. In line with this, LGUs can plan and pursue their own local development programs on job creation, tourism enhancement, and various agro-industrial and infrastructure projects.

With billions in internal revenue allotment (IRA) now going to the country’s 81 provinces, 145 cities, 1,489 municipalities, and 42,036 barangays, LGUs have substantial financial resources to tackle local problems. Apart from their IRA share, LGUs as a whole get billions more from local sources like real property taxes, business permits, or from their share in the use and development of national wealth that include mining taxes, royalties, forestry and fishery charges, among others.

And there are many LGUs that are not entirely dependent on the IRA and are able to generate substantial funds through local taxes and the exercise of its regulatory functions. For LGUs constantly striving for excellence, the possibilities are indeed limitless. They can pursue innovative ways to be efficient economic managers that utilize funds prudently, reduce joblessness, and promote livelihood activities to enhance economic prosperity in communities.

But with the draft charter silent on the role of LGUs within the federated regions, and with no specific provision for a local government code, can LGUs striving for excellence still have limitless possibilities? Or will LGUs be hampered by the executive powers vested in the regional governor? The nagging question is this: How come the power and functions of the Federated Regions and the nature of the Regional Executive Power were given special focus in the draft charter while that of LGUs were left out?

If empowering local governments is indeed the key to achieving nationwide development through decentralized governance in a federal system, it is beyond dispute that the draft charter ought to have given emphasis on crucial aspects pertaining to LGUs which can greatly help in the pursuit of federalism.