The Mandanas-Garcia Ruling mandates the expansion of the income base for the computation of the national tax allocation (NTA) for local government units (LGUs) to include not only internal revenue collections but also customs collections. This assures LGUs with an additional 24% revenue share, aside from the 13.9% increase due to the increase in internal revenue collections. The figures look attractive especially for NTA-dependent LGUs like the barangays.
But how does this really look like in its first year’s implementation? Will the amount be enough to cover the devolved functions and services that the barangays need to deliver by virtue of the Executive Order No. 138?
To answer these questions, I look into Northern Samar as a focus province. Northern Samar is one of the provinces in the Philippines known for reducing poverty incidence from 51.8% in 2015 to 25.1% in the first semester of 2021. As a result, the province was stricken off the list of the top 20 poorest provinces in the country.

Northern Samar has readily available barangay-level national tax allocations data for fiscal years 2021 and 2022, making a pre- and during-the Mandanas-Garcia Ruling comparison possible.
Continue reading “The effect of the Mandanas-Garcia ruling: A Northern Samar case study”