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A Department of Budget and Management (DBM) official stated on Saturday that the research on the transfer of some executive branch responsibilities to local governments is anticipated to be released in two months.

In a news forum in Quezon City, DBM Director John Aries Macaspac stated, “Last week, the President directed the NEDA (National Economic and Development Authority) to further study the implementation of this full devolution taking into account the overall capacities of the local government units (LGUs) and to look at the specific functions and services that should be retained by the national government.”

According to their technical and financial capabilities, these are essentially the ones that local government units cannot actually implement. Macaspac continued, “We will also identify those that could already be implemented by local governments.”

Following the study’s conclusion, DBM will offer the Chief Executive the appropriate policy recommendations “to issue and to serve as guidance of the local governments and the national government agencies in the implementation of the full devolution effort.”

According to Macaspac, the DBM along with its partner agencies, particularly the Department of the Interior and Local Government (DILG), will also issue the pertinent implementing guidelines for the purpose. The necessary policy guidelines will also be issued, or likely an amendment to Executive Order (EO) 138.

The full, efficient, and successful implementation of the government’s entire devolution endeavor will be carried out, he added, “and the local government units, as well as the national government agencies concerned, will be duly informed, capacitated, and, well, they will be informed of these policy directives.”

The government is implementing its entire devolution effort, according to Macaspac, in order to soften or lessen the financial impact of the Supreme Court’s (SC) decision in the Mandanas-Garcia case.

The SC’s decision in the Mandanas-Garcia case was effectively implemented with the help of EO 138, s. 2021, which was also issued to enhance local government autonomy and empowerment.

It also calls for the establishment of a Committee on Devolution to oversee the EO’s execution. It directs the full devolution of several executive branch duties to the LGUs.

Devolution’s foundation

The Supreme Court declared in 2018 that local government units (LGUs) are entitled to a fair share of all federal taxes, including those collected by the Bureau of Internal Revenue and other taxing authorities.

The Mandanas decision requires the federal government to increase LGUs’ participation in tax collection.

However, LGUs are tasked with running social services including agriculture, connectivity, and health within their respective spheres of influence.

The decision is the outcome of two distinct petitions submitted by the former governor of Bataan, Enrique Garcia Jr., and the governor of Batangas, Hermilando Mandanas, asking for an adjustment to the Internal Revenue Allotment of LGUs to take into account national taxes.

According to Macaspac, the full devolution was ordered to be fully implemented through the EO 138 issued by former President Rodrigo Duterte in 2021. It is made congruent with the Local Government Code of 1991.

“So, starting last year, when the Mandanas-Garcia decision began to be implemented, and lasting until 2024, we initially prescribed three years for the execution of the full devolution. But the President gave the oversight agencies, namely the DBM, the DILG, the DOF (Department of Finance), and the NEDA, instructions to study this full devolution effort due to the noted lack of technical and financial capacity of the local government units and taking into consideration the significant reduction in the year 2023 national tax allotment shares, he said.

While the study is ongoing, according to Macaspac, the national government will continue to support local governments as needed. In particular, it will continue to support LGUs financially through the local government support fund and other programs offered by various national government agencies.

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