By Ben O. de Vera, February 2, 2021; Philippine Daily Inquirer

https://business.inquirer.net/316885/duterte-eo-transferring-national-govt-functions-to-lgus-out-this-year

Manila, Philippines—President Rodrigo Duterte’s impending order to transfer some executive functions to local government units is expected to be issued this year ahead of an increase in LGUs’ internal revenue allotment (IRA) shares in 2022.

“We are hoping that the EO will be signed by the President within the year to prepare the national government and the LGUs for the implementation of the Supreme Court ruling on the Mandanas-Garcia cases in 2022,” said Assistant Budget Secretary Rolando U. Toledo on Tuesday (Feb. 2).

The draft EO presented by the DBM to agencies last week was aimed at fully devolving some national government functions to LGUs to adjust to the projected 27.6 percent jump in IRA to P1.8 trillion in 2022.

In an online interview on Tuesday, Budget Secretary Wendel E. Avisado said the EO will transfer expenditures on local infrastructure, agriculture, social welfare, health care and livelihood, among other sectors listed in the Local Government Code of 1991 which LGUs can implement.

The Inquirer earlier reported that the EO will have these effects:

  • Delineate the roles of the national and local governments
  • Jump start preparation of devolution transition plans
  • Establish a growth equalization fund “to address the vertical and horizontal fiscal imbalance across LGUs”
  • Creates an interagency committee on devolution to be headed by the executive secretary to monitor and evaluate implementation by 2025

It would also provide options for national government employees who may lose their jobs once more functions get transferred to LGUs.

“We will see some of the major activities of the national government getting devolved so LGUs can implement these programs, activities and projects,” Avisado said.

Avisado, who supports a shift to a federal form of government, said he was hopeful that the devolution process will lead to local autonomy and decentralization.

The Supreme Court granted in 2018 and reaffirmed a year later the petitions of Batangas Gov. Hermilando Mandanas and former Bataan Gov. Enrique Garcia Jr. to compute LGUs’ IRA based on 40 percent of collection of “all” national taxes—the Bureau of Internal Revenue’s (BIR) tax take and the Bureau of Customs’ (BOC) collections of import duties and other taxes.

Currently, LGU’s IRA comes from only two-fifths of national internal revenue taxes collected by the BIR.

As the high court ruling will be implemented in 2022, Development Budget Coordination Committee (DBCC) estimates had shown that LGUs’ 2022 IRA, coming from 2019 BIR and BOC collections, would carve a bigger chunk from the record P5.024-trillion national budget proposal for next year, instead of only P848.44 billion under the current computation.

With bigger budgets in 2022, the DBM said LGUs must “undertake necessary actions to prepare for the greater role and responsibilities they are expected to assume.”

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