The Senate committee on local government, chaired by Senator Sonny Angara, has called for a consultative meeting last week among key stakeholders and experts to conduct a comprehensive review of the Local Government Code.
“More than 26 years have passed since Congress enacted the Code. Its review is long-overdue. It is now imperative to institute reforms so it can truly fulfill its main objective which is to equally distribute growth in the country through autonomy grounded on decentralized and devolved public functions,” Angara said.
The Local Government Code or Republic Act 7160 was signed into law in 1991 to decentralize governance and allow autonomy for local government units (LGUs).
Section 521 of the Code states that the Congress shall “undertake a mandatory review of this Code at lease once every five years and as often as it may deem necessary, with the primary objective of providing a more responsive and accountable local government structure.”
The Senate local government committee has identified the Code’s key areas of reform. These include: a) devolved services, b) standards of creation of LGUs, c) revenue sharing and taxing powers, d) balance of power, e) term of office of local officials, and f) autonomous regions.
Senator Risa Hontiveros, vice chairperson of the committee, stressed that the intent of the review is really to strengthen local governments, and enhance their autonomy and decentralization.
Of the identified areas of reform, the Union of Local Authorities of the Philippines (ULAP) pressed the Senate committee to prioritize the increase in the revenue share of LGUs. They also want to simplify the formula for the computation of LGU share.
At present, 40 percent of the national internal revenue is allocated to LGUs. LGUs are also given taxing powers in order for them to generate more revenues.
Angara, however, lamented that more than half, or up to 62 percent, of economic activity in the country is still concentrated in NCR (36%), CALABARZON (17%), and Central Luzon (9%), while the rest of the country accounts for the remainder.
“Ours is a grossly unequal economy, and that inequality can be drawn along geographic lines,” he added.
To address this, the Philippine Institute for Development Studies proposed the creation of the equalization fund to help the poorer LGUs.
“Nauunawaan po natin ang pangangailangan ng mga lokalidad para sa tama at patas na alokasyon sa kita ng gobyerno. Atin pong nilalayon ngayon na maging sapat ang alokasyon para sa lahat ng LGUs upang matulungan silang umunlad at umahon sa kahirapan,” the senator said.
Angara said the committee aims to complete the review within a six-month period to come up with clear-cut reforms.