Finance Secretary Benjamin Diokno said the national government will closely coordinate with the local government units (LGUs) to fulfill the goal of President Ferdinand “Bongbong” Marcos Jr. of increasing production in the agriculture sector, while continuing to import rice and other staple food products as an immediate measure to keep prices reasonable and affordable for consumers.
Diokno said LGUs now have the financial capability to help boost food production following the implementation starting this year of the Supreme Court (SC) ruling that increased their share in the national tax collections.
In the Mandanas-Garcia petition on the internal revenue allotment (IRA) of LGUs, the SC ruled that the share of the local governments should come from 40 percent of all national taxes collected by both the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC).
“Under the current setup, the agriculture extension work is the responsibility of the local governments. So maybe, [there has to be] coordination with the local governments, which incidentally have a lot more money now because of the Mandanas ruling. So there will be, maybe, a friendly competition among the local governments to boost [the production of] agricultural products,” Diokno said in a recent television interview.
The IRA share of LGUs came only from the taxes collected by the BIR under the old system. With the implementation of the SC ruling, the IRA was renamed as the National Tax Allotment (NTA).
A report by the Bureau of Local Government Finance (BLGF) to the DOF during the previous administration showed that the total current operating income of LGUs rose by 19.4 percent in the first quarter of 2022 alone to P319.42 billion from P267.55 billion in the same quarter last year.
The BLGF attributed this increase to the implementation starting this year of the SC ruling on the Mandanas-Garcia case.
While the demand for certain food products exceeds supply, Diokno said the government will continue to import them.
“Increasing agricultural production and importation will go hand in hand in ensuring the stability of the supply and prices of food,” Diokno added.
President Marcos, who has decided to head the Department of Agriculture (DA) at this time, recently announced that the government will continue its policy of importation as a price stabilization measure while quickly proceeding with plans to increase production and efficiency in the agriculture sector.