FISCAL DECENTRALIZATION IN THE PHILIPPINES: BRIDGING POLICY AND PRACTICE UNDER THE MANDANAS-GARCIA RULING

Eduardo Andaya; Jeffrey Mata; Romeo Inasoria

doi:10.14456/apsr.2026.2

Authors

Eduardo Junio ANDAYA Graduate School of Public Administration, Bulacan State University, Philippines; College of Public Administration and Governance, Pamantasan ng Lungsod ng Valenzuela, Philippines
Jeffrey MATA Graduate School of Public Administration, Bulacan State University, Philippines
Romeo INASORIA Graduate School of Public Administration, Bulacan State University, Philippines

DOI:

https://doi.org/10.14456/apsr.2026.2

Keywords:

Fiscal Decentralization, Local Governance, Mandanas-Garcia Ruling, Policy-Practice Gap, Philippine Public Administration

Abstract

The Mandanas-Garcia Ruling represents a landmark transformation in the Philippine fiscal decentralization framework, substantially expanding the National Tax Allotment for Local Government Units (LGUs). This scoping review systematically synthesizes academic and grey literature published between 2021 and 2025 to meticulously evaluate the ruling’s implementation and its multifaceted impacts on local governance. Adhering to PRISMA guidelines, an in-depth analysis of ten selected studies reveals a critical policy and practice gap. While LGUs fundamentally benefit from significantly increased fiscal resources, deeply entrenched systemic barriers severely hinder optimal public service delivery. The primary challenges identified include an inherently inequitable tax distribution formula that ignores poverty incidence, a pervasive lack of administrative readiness among local personnel, and inadequate intergovernmental coordination. Consequently, the theoretical ideals of fiscal federalism remain unfulfilled, leading to low absorptive capacity and hindered operational outcomes. To successfully bridge this critical implementation gap, the present study strongly recommends urgent legislative reforms to establish a far more equitable fiscal transfer system, alongside sustained capacity-building programs and a robust centralized monitoring framework.

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