Using his Constitutional power of general supervision over all local government units, President Ferdinand R. Marcos Jr. issued Executive Order No. 41 (which took effect on Sept. 28, 2023), ordering local governments to suspend the collection of so-called pass-through fees on national roads to ensure the efficient movement of goods and produce across the country. The directive is intended to remove one of the extra logistical costs incurred by agricultural producers, truckers, manufacturing companies, and other stakeholders that is ultimately passed on to consumers in the form of higher food prices. The DILG, together with DTI, DoTr, DPWH, DoF and ARTA were tasked to collate all LGU ordinances and ensure that these ordinances are consistent with the Local Government Code (LGC) within 30 days from effectivity of EO 41. Administrative sanctions will be imposed against public officials who fail to comply. This is one of the concrete steps taken by the Marcos administration to reduce the inflation rate on food commodities for the benefit of the public.

EO 41 s.2023 reminds LGUs that their power of local taxation is restricted by Section 133(e) and (l), LGC.

Section 133(e), LGC is derived from Section 5(j) of PD 231 which in turn was derived from Section 2287 of the Revised Administrative Code of 1917. The rationale for the restriction is to maintain the free flow of commerce in the country by blocking extra-logistics costs resulting from local taxation that are inflationary and prejudicial to the consuming public (DOF Provincial Circular unnumbered dated April 17, 1947). In addition, DILG also urged local chief executives to observe DILG MC 2008-112 that provides truck ban exemption for trucks and delivery vans carrying rice and other perishable items such as fish, vegetables, dairy and poultry products and frozen meat products, animal feeds and export goods ( Ursal, Philippine Law on Local Government Taxation p.49,50 ©2010).

The Supreme Court has consistently smacked down LGU ordinances that were inconsistent with the law, among them: Wise & Co v City of Manila, April 25,1958; Saldana v City of Iloilo, Sept 27,1957; Panaligan et.al v City of Tacloban, Sept 27,1957; Zamboanga Copra Procurement Corp v City of Zamboanga, July 30,1960.

Section 133 (l) prohibits LGUs from collecting taxes, fees or charges for the registration of motor vehicles and for the issuance of all kinds of licenses or permits for the driving thereof, except tricycles. LGUs have no authority to impose certain requirements in addition to those provided in the law implemented by the Land Transportation Office, as a condition precedent to the use of motor vehicles within its territorial limits. LGUs have no power nor competence to determine the roadworthiness of motor vehicles. (Vega v Mun. Board of Iloilo, May 12, 1954).

It is unfortunate that the DILG has been mediocre in making LGUs comply with the letter and spirit of EO 41 s 2023 that is intended to contain inflation. In a recent news report, United Broilers Raisers Association Inc. (Ubra) President Elias Jose Inciong said that restrictive regulations from some LGUs still persist today despite measures from the national government to promote the ease of doing business by suspending pass-through fees. He said that Ubra members have encountered trouble with quarantine policies in the transportation of live animals such as day-old chicks in Nueva Ecija. Inciong said that the requirements are not standard and varies per LGU, and obtaining a veterinary certificate is a tedious one even without an avian flu outbreak. The LGUs also limit the volume of goods that could be transported per trip forcing truckers to split the delivery into multiple trips, causing delays in the flow of goods and additional fuel and manpower costs.

While the President is serious in reducing inflation for the sake of the poor, LGU officials aggravate inflation in their desire to raise revenues. DILG should cast aside political considerations and not spare erring LGU officials from administrative sanctions for failing to heed EO 41 s. 2023. The DILG should instruct its people to ask the courts to declare null and void LGU Ordinances promulgated by Provinces, Cities, and Municipalities that are inconsistent with Section 133 e and (l), LGC and file charges against Sanggunian members and the local chief executive who approved it for their gross ignorance of the law.