Based on the preliminary estimate made by its local finance committee, the city government’s budget for year 2023 will decrease by around P200 to P300 million, which means, from P1.4 or P1.5 billion in previous years, Naga’s annual budget for the coming year is expected to drop to P1.2 billion.

At present, the 2023 budget is going through a governance process by which each department or office of the city government is mandated to present its proposed annual budget before the concerned stakeholders and representatives from the Naga City People’s Council (NCPC), a non-government organization promoting people’s participation, accountability and transparency in governance.

After the public presentation that began to reel off on September 27 until October 7, the budget proposals will be submitted by the NCPC to the City Budget Office wherein they will be consolidated into an executive budget before it will be forwarded to the Sangguniang Panlungsod for deliberation and enactment.

The budget slash happened due to the decrease in the National Tax Allocation (NTA) share received by the LGU from the national government. According to Mendoza, head of the City Budget Office, the reduction in NTA shares is felt by every local government unit (LGU) nationwide.

He said that the decrease in the NTA is brought about by the economic decline during the pandemic years of 2020 and 2021, the period on which the computation of 2023 NTA shares for the LGUs is based as reference years.

He said such situation will give the city government a hard time to support the financing of its various projects and services which is likely to be aggravated with the implementation of the Mandanas ruling this year, which mandates the transfer of many national government functions to the LGUs.

The ruling is a result of two separate petitions filed by Batangas Governor Hermilando Mandanas and former Bataan Governor Enrique Garcia Jr. before the Supreme Court requesting the basis of computation of the Internal Revenue Allotment (IRA) of LGUs be adjusted to include national taxes like that of the Bureau of Customs.

The Supreme Court ruled that the Internal Revenue Allotment (IRA), now called the National Tax Allocation (NTA), given to local government units must be sourced from all national taxes and not only from national internal revenue taxes collected by the Bureau of Internal Revenue (BIR) as defined in the 1987 Constitution.

The long list of the national government functions to be devolved include the construction of school buildings, farm-to-market roads, operation plan for rabies elimination, production support services, agricultural machinery equipment and facilities, and the construction of health centers, as well as the provision of various types of medical equipment;

The functions of the national government for crops, seedling establishments, seedling funds, seedling nursery, and provision of planting materials; for livestock, prevention and control of animal diseases, breeding stations, and credit financing; for fisheries, fingerling dispersals, agricultural extension and demonstration farms; and for infrastructure and irrigation, communal irrigation, spring development, among others.

However, there will still be a transition of the devolution of the functions of the national government agencies within the next three years like the Department of Agriculture.

Mendoza bared that there are propositions from concerned government agencies and LGUs to delay or defer the full implementation of the planned devolution considering the economic shutdown that gravely affected the tax collection drive by both the local and national governments.