The third and final column on the Bangsamorro Basic law focuses on its Fiscal autonomy, Economy and Patrimony, Rehabilitation, the Plebiscite process and the Transition authority.
Q: What is the goal of the article on Fiscal Autonomy?
A: Its main objective is to make the Bangsamoro Government fiscally autonomous (Article XII, Section 1). The funding mechanisms employed in this law will allow the Bangsamoro Government to become self-sufficient and to eventually no longer need funding from the National Government to provide for the needs of its constituents.
Q: What taxing powers are to be devolved to the Bangsamoro Government?
A: Apart from the taxes that were granted previously to the ARMM, the
Bangsamoro Government can now impose and collect four national taxes – Capital Gains Tax, Donor’s Tax, Estate Tax, and Documentary Stamp Taxes provided that all the taxable elements are within the Bangsamoro (Article XII, Section 9).
Q: Will the Bangsamoro Government get a share in the taxes that will continue to be levied by the National Government?
A: Yes. As for national taxes, fees, and charges collected by the National Government within the Bangsamoro, 75 percent shall be shared with the Bangsamoro and its constituent local government units. The ARMM currently gets a 70 percent share (Article XII, Section 10).
These national taxes include income taxes, VAT, and other percentage taxes; but exclude tariff and customs duties.
Q: Who will conduct tax administration within the Bangsamoro?
A: The Bangsamoro Government may create its own tax office to collect taxes in the Bangsamoro (Article XII, Section 11).
The National Government will assist the Bangsamoro Government in the matters of tax administration and fiscal management. This assistance shall include capacity building and training programs in accordance with a needs assessment and capacity building plan developed by the Bangsamoro Government in consultation with the National Government (Article XII, Section 4)
Q: What is the Annual Block Grant (ABG)?
A: The ABG refers to the automatic appropriation that will be released regularly to the Bangsamoro Government (Article XII, Section 17).
Q: How much is the ABG?
A: For the budget year immediately following the year the draft Basic Law takes effect, the amount of the ABG shall be equivalent to 4 percent of the net national internal revenue collection of the BIR, less the internal revenue allotment of local government units.
The ABG may however be adjusted if there occurs (a) a change in the total land area of the Bangsamoro (e.g. if not all the LGUs mentioned in the law and the FAB vote to be part of the Bangsamoro); and (b) unmanageable fiscal deficit – in which case the ABG may be decreased (Article XII, Section 16).
Q: Will the Bangsamoro Government receive other amounts from the National Government?
A: Yes, the Bangsamoro Government will receive additional funds that would subsidize expenditures for development projects and infrastructure projects in the first years of the Bangsamoro (Article XII, Section 21). A Special Development Fund (SDF) will also be established for the rehabilitation of the region (Article XIV). The Bangsamoro Transition Authority (BTA) will also receive an initial funding to enable it to organize the bureaucracy, hire personnel, and exercise its functions (Article XVI, Section 13).
Q: Are the amounts appropriated for the Bangsamoro excessive?
A: The funding support to the Bangsamoro Government (i.e., the ABG, the SDF, the subsidies, the BTA funding) is what the National Government deems sufficient and necessary considering (i) the amounts received from the National Government by other similarly-situated regions such as Regions VIII and XII (the regions with the second and third highest poverty incidence in its populations); (ii) the amounts currently being received by the ARMM Government; and (iii) the need for the Bangsamoro region to catch up with the rest of the country.
Q: What are the Bangsamoro Government’s other sources of revenue?
A: The other revenue sources are:
(a) Loans, whether foreign or domestic, which the Bangsamoro Government is authorized to contract (Article XII, Section 22 A);
(b) Bangsamoro Government bills, bonds, notes, debentures, etc. (Article XII, Section 22 B);
(c) Overseas Development Assistance (Article XII, Section 23);
(d) Grants and donations (Article XII, Section 24);
(e) Share in the GOCCs operating in the Bangamoro. The share shall be determined through the intergovernmental relations mechanism (Article XII, Section 31);
(f) Share in the government revenues derived from the exploration, development, and utilization of natural resources (Article XII, Section 32)
(i) Non-metallic – 100 percent
(ii) Metallic – 75 percent
(iii) Fossil fuels and uranium – 50 percent;
To ensure that the local communities are not deprived of their share, the Basic Law mandates that the Bangsamoro Government enact a law that will provide the necessary details for the required shares of the local government units and the affected indigenous peoples.
The draft Basic Law also provides that revenues from the (a) additional taxes beyond those already devolved to the ARMM; and (b) the exploration, development, and utilization of natural resources shall be deducted from the ABG. Thus, eventually, when the Bangsamoro Government is able to increase its revenue collection such that it is equivalent to or more than the ABG, the National Government will no longer provide any funding to the Bangsamoro Government (Article XII, Section 19).
Q: Will there be a mechanism to settle any issues/disagreements between the Bangsamoro and National Governments as to financial matters?
A: To settle any issue as to taxes and other financial matters, an Intergovernmental Fiscal Policy Board shall be created where the relevant agencies of the Bangsamoro Government and the National Government will be represented including the Department of Finance (Article XII, Section 35).
Q: How do we ensure that Bangsamoro revenues will be used judiciously?
A:The Bangsamoro Parliament shall enact an appropriations act to determine how the ABG, other budgetary transfers, and government revenues of the Bangsamoro shall be appropriated. In addition, the Bangsamoro auditing office and the Commission on Audit are expected to exercise their auditing responsibilities.
Economy and Patrimony
Q: What is the scope of the Bangsamoro Government’s powers over natural, energy, and mining resources?
A:The Bangsamoro Government’s authority over the exploration, development, and utilization of resources include:
First, the Bangsamoro Government shall have the power to declare nature reserves, aquatic parks, forests, watershed reservations, and protected areas in the Bangsamoro. Protected areas that are currently under the management of the National Government shall be transferred to the Bangsamoro Government within a period not exceeding two (2) years (Article XIII, Sections 8, 9).
Second, the Bangsamoro Government shall have exclusive powers to regulate, manage, and protect inland waters in the Bangsamoro (Article XIII, Sections 22).
Third, the National and Bangsamoro Governments shall jointly explore, develop, and utilize fossil fuels and uranium in the Bangsamoro (Article XIII, Section 10).
Fourth, the entry into Financial and Technical Assistance Agreements over mineral resources in the Bangsamoro by the President shall be upon the recommendation of the Bangsamoro Government (Article XIII, Section 14).
Q: What is the scope of the Bangsamoro Government’s power over trade and industry?
A: The Bangsamoro Government shall have the following powers over trade and industry: it shall promote a domestic trade preference for goods produced and materials sourced in the Bangsamoro; it may participate in trade missions and fairs in other countries; and it may conduct barter trade and counter-trade with ASEAN countries (Article XIII, Sections 24, 25).
Q: Can the Bangsamoro Government establish economic zones, industrial estates, and free ports in the Bangsamoro?
A: Yes, the Bangsamoro Government shall have the authority to do this. The Bangsamoro Government may extend the same fiscal incentives to locators in its economic zones/industrial estates/free ports, as those in areas outside the Bangsamoro (Article XIII, Section 26).
Q: What are the Zones of Joint Cooperation? Is it part of the Bangsamoro territory?
A: No, the Zones are not part of the Bangsamoro Territory. It shall be located in the Sulu Sea and the Moro Gulf, and is created for, among others, the protection of traditional fishing grounds and the exploration, development, and utilization of non-living resources therein. The Zones shall be regulated by a Joint Body composed of officials from the National and Bangsamoro Governments, as well as representatives from adjoining/adjacent local government units (Article XIII, Sections 18 to 20).
Q: Why is a separate article on Rehabilitation and Development necessary?
A: Article XIV recognizes that the current ARMM region (which forms part of the core territory of the Bangsamoro) is the poorest region in the country. Thus, to enable the region to catch up with the rest of the country, the National Government pledges funding support for rehabilitation, reconstruction, and development programs of the Bangsamoro Government. The Special Development Fund (SDF) will be set up for these purposes, and shall be in an amount of P17 billion, with P7 billion allocated for the first year from the enactment of the law, and the balance to be paid out in equal installments of P2 billion over the course of five years.
Q: Where will the plebiscite for the creation of the Bangsamoro be conducted?
A: The plebiscite for the creation of the Bangsamoro shall be conducted in (a) the present geographical area of the Autonomous Region in Muslim Mindanao; (b) the Municipalities of Baloi, Munai, Nunungan, Pantar, Tagoloan and Tangkal in the province of Lanao del Norte and all other barangays in the Municipalities of Kabacan, Carmen, Aleosan, Pigkawayan, Pikit and Midsayap that voted for inclusion in the ARMM during the 2001 plebiscite; (c) the cities of Cotabato and Isabela; and (d) all other contiguous areas where there is a resolution of the local government unit or a petition of at least 10 percent of the registered voters in the area asking for their inclusion at least two months prior to the conduct of the ratification of the Basic Law.
Q: After the creation of the Bangsamoro, can an interested local government unit still join the region?
A: After the creation of the Bangsamoro, any contiguous local government unit or geographic area outside the Bangsamoro may, by a verified petition filed by at least 10 perdent of its registered voters, ask for its inclusion in the Bangsamoro and for the conduct of a plebiscite for that purpose.
Bangsamoro Transition Authority
Q: What will happen in the period between the ratification of the draft Basic Law in a plebiscite and the assumption into office of the elected members of the Bangsamoro Parliament?
A: The Bangsamoro Transition Authority (BTA) shall serve as the interim government of the Bangsamoro during this period, and shall exercise executive and legislative functions for this purpose (Article XVI, Sections 2 and 3).
The BTA shall operate in accordance with the Basic Law and a Transition Plan to be crafted by them. The interim Chief Minister shall prepare and submit a Transition Plan within sixty days from ratification of the Basic Law for approval by the rest of the BTA. Subsequently, the BTA shall act on or approve the Transition Plan within ten days from submission. The Transition Plan will be implemented within fifteen days from the approval by the BTA.
Q: Under the draft Basic Law, the President is authorized to appoint all 50 members of the BTA. Who will the members be?
A: The Moro Islamic Liberation Front shall lead the BTA. At the same time, there are several safeguards to ensure that the BTA composition is representative and inclusive. The draft Basic Law expressly mandates that non-Moro IPs/ICCs, women, settler communities, and other sectors shall be represented in the BTA. Further, the process of appointment allows for the submission of nominations to the Office of the President (Article XVI, Section 2).
Q: What will happen to ARMM employees and other employees of national government agencies whose functions will now be devolved to the Bangsamoro Government?
A: All employees affected by the gradual phase-out of the ARMM and regional offices of national government agencies may be absorbed, transferred, or separated from service. Separation pay and other benefits required to be paid under law shall be paid to these affected employees by the National Government (Article XVI, Sections 9, 10).
With specific regard to ARMM Government employees, appointive officials of the ARMM Government shall continue to exercise their functions during the phase-out. The absorption or re-hiring of ARMM Government employees shall be in accordance with a placement and hiring process established by the BTA (Article XVI, Section 9).