DOF vows to support LGUs in devolution efforts

The Department of Finance (DOF) assured that it will continue with its efforts to help local government units (LGUs) in fully taking over government functions and services.

In a statement, the DOF said there will be a study on operationalizing full devolution, which will help delineate the functions and services to be retained by the national government and those to be devolved to LGUs.

According to the DOF, the study would contain data, information, insights, and suggestions on how to effectively implement devolution.

At a recent meeting with the International Monetary Fund, the DOF updated the Washington-based institution on the progress of the devolution plan for LGUs.

Subsequently, the DOF said that the IMF recognized the necessity of enhancing capacity building in LGUs in response to the fiscal decentralization process mandated by the Supreme Court’s Mandanas-Garcia ruling.

To recall, President Marcos in March 2023 directed government agencies to review Executive Order No. 138 for potential revisions and to identify which national government functions should be transferred to LGUs following the Mandanas ruling.

Under EO 138, which was issued by former President Duterte, the devolution of select national government functions to LGUs is scheduled to implement gradually, beginning in 2022.

By 2024, LGUs should have assumed full responsibility for local infrastructure, agriculture, social welfare, healthcare, livelihood, and other sectors outlined in the Local Government Code.

Nevertheless, given the current status of devolution in the country, uncertainties have emerged regarding how LGUs will manage to fully take on all devolved functions and whether the provided devolution transition period is adequate.

In a meeting held at the Malacañang last week, President Marcos ordered national government agencies (NGAs) to conduct an analysis on the operationalization of the full devolution initiative and come up with the list of functions that should be devolved to LGUs.

President Marcos cited the need to first define and determine the priority core functions and services that should be devolved to the LGUs.

The funding and schedule of implementation of the functions and services (based on LGU capacity and in accordance with minimum standards set by NGAs) shall be determined after coming with the definition and after determining the functions and services of the LGUs.

“Should the LGUs lack the funds to implement the functions and services, the National Government should have a program to assist them,” said the minutes of the meeting held on Dec. 21.

President Marcos ordered the National Economic and Development Authority to conduct a sensitivity analysis on the most that the government can gain from its investments, which include the functions and services to be performed by the LGUs.

The NEDA is also tasked to recommend ways to better implement a phased-in devolution, including its timeline based on LGU capacity, which is in addition to the ongoing study on the determinants of functions and services that should performed by the NG and devolved to LGUs.

President Marcos ordered the NEDA to complete the study and submit it to the Office of the President by end of February 2024.

The President also ordered the Department of Interior and Local Government (DILG), in collaboration with the Union of Local Authorities of the Philippines, to come up with a list of basic functions and services that the LGUs should be performing based on their Devolution Transition Plans, and of the national government.

The DILG is given until January 2024 to present to the President the list by January 2024, or a month earlier than the analysis report of the NEDA. — Chino S. Leyco