THE NATIONAL Government is hoping local government units (LGUs) will channel their expanded budgets into raising agricultural output, Finance Secretary Benjamin E. Diokno said.
Mr. Diokno said in an interview with ANC on Wednesday that LGUs “incidentally have a lot more money now because of the Mandanas ruling,” referring to a Supreme Court (SC) decision that ordered the National Government to make bigger transfers to local governments.
In effect, “there will be a friendly competition among LGUs to boost agricultural products,” Mr. Diokno added.
The Supreme Court’s Mandanas-Garcia ruling granted LGUs a larger share of the national taxes after the SC liberally interpreted the Local Government Code in the LGUs’ favor. The Code requires that any doubt in interpretation must be resolved in favor of more decentralization.
The National Government’s old interpretation of the Code was that LGUs were entitled to 40% of the National Government’s “internal revenue,” which is reflected in the old name of the fund transfers from the National Government to LGUs, the “Internal Revenue Allotment (IRA).”
The Supreme Court ruled that LGUs are entitled to a share of all national taxes, including customs duties, and not just the collections generated by the Bureau of Internal Revenue (BIR). As a result, the IRA is now known as the National Tax Allotment (NTA).
Mr. Diokno added that the policy of importing food to address domestic shortages would continue even after the president said the government would exert greater effort in boosting rice and corn production.
“We will continue to import if demand exceeds supply… for our food requirements and that’s to keep the prices reasonable and affordable for ordinary people.”
“Simultaneously, we plan to increase production, to increase efficiency and planting more — that’s why (President Ferdinand R. Marcos, Jr.) accepted the Agriculture post; he wants to focus on production and he will do that through more sustained productive activity and increasing productivity in the sector.”
Inflation accelerated to 6.1% year on year in June, exceeding the Bangko Sentral ng Pilipinas’ (BSP) 2-4% target for a third straight month. In May, inflation was 5.4%. The year-earlier level was 3.7%.
Food accounts for about 39% of the CPI basket, giving food prices an outsized impact on the movement of the indicator. Food tends to command a bigger share of household budgets in poor countries.
Mr. Diokno described Philippine agriculture as a laggard.
“Industry has been growing, services have been growing but the agriculture sector has been in and out of recession,” he said.
Even if “there’s a budget for the Department of Agriculture, that should not be equated to how much the economy will need to increase agricultural production,” he said.
“As you know, the government is not doing agriculture; it’s the private sector.”
Mr. Diokno also said Mr. Marcos would look into each of the individual subsectors in agriculture — crops, rice, corn, high-value crops and fish.
In June, Mr. Marcos appointed himself Agriculture secretary to address the severe problems facing the farm sector. — Diego Gabriel C. Robles