By Diego Gabriel C. Robles, October 5, 2022; Business World

THE National Government said the functions it will immediately devolve to local government units (LGUs) are local infrastructure projects, basic healthcare, social welfare, and agricultural extension.

The so-called “small-ticket” items to be shed by the National Government point to a prioritization of activities to be handed over to LGUs rather than a full-scale devolution by 2024, which was the timetable set by the previous administration, amid concerns over whether LGUs are properly equipped to take responsibility for such functions.

The Committee on Devolution (ComDev), which is overseeing the process, said a technical working group has been formed to study extending the transfer period for more intricate functions.

“The devolved functions are… core expenditure responsibilities, and that is where the functions must be devolved,” Finance Secretary Benjamin E. Diokno was quoted as saying in a statement.

The ComDev met on Monday to discuss the implementation of the Supreme Court’s Mandanas-Garcia ruling, including amendments to Executive Order (EO) No. 138, issued by the previous administration, which set the devolution timeline.

Under EO No. 138, functions currently performed by the National Government that enjoy funding of P234.4 billion should be fully devolved to LGUs by 2024.

Before the ComDev meeting, the Department of Budget and Management (DBM) had called for a deferral of the transfer of infrastructure and other “big-ticket” items to LGUs, because they require specialized expertise. It proposed a devolution period for such items of 2025-2027.

“Devolution should be contingent on the LGU, development priorities, capacity, and availability of resources. Devolution should be transitioned based on magnitude, technical requirement, and nature of programs, projects and activities,” Interior and Local Government Secretary Benjamin Abalos, Jr. was quoted as saying.

“Moving forward, we will continue to strengthen coordination and extend necessary assistance to empower our LGUs in accordance with the Local Government Code and the Mandanas-Garcia ruling,” added Budget Secretary and Committee Chair Amenah F. Pangandaman. “We believe that effective devolution will be achieved if our LGUs are fully capacitated, both technically and financially.”

Also on the agenda during Monday’s meeting were updates on the submission and evaluation of Devolution Transition Plans (DTPs), as well as a review of the functions, services, and programs, activities and projects for full devolution.

“This is another crucial step towards our goal of pursuing full devolution and our manifestation of collective efforts towards fulfilling the marching order of the President to get this moving,” said Ms. Pangandaman. “So far, we continue to set important things in motion with the updates on the submission and evaluation of the National Government Agency (NGA) DTPs.”

At the time of the meeting, the DBM had received 18 out of 20 expected DTPs. Those of the Department of Health and the Commission on Population and Development (POPCOM) have been approved.

National Economic and Development Authority (NEDA) Secretary and POPCOM Board Chairman Arsenio M. Balisacan reiterated the overriding goal of achieving equity in the devolution process.

“An important contribution of the proposed amendment is the clarification and the guiding principles that might clear certain instances… so we can ensure that everyone, regardless of their place of residence, has equal opportunity for equal economic or social opportunities,” Mr. Balisacan said.

“With the Mandanas ruling now in effect, NEDA will work to improve national, regional, and local coordination, and we will need to strengthen our efforts at the subnational level,” he added in a Senate committee hearing on Wednesday. “This entails supporting the implementation of the devolution policy, strengthening activities, and providing support to LGUs in development planning.”

The Mandanas ruling granted LGUs a larger share of the national taxes by expanding their 40% cut of “internal revenue,” narrowly interpreted by previous governments to mean the collections of the Bureau of Internal Revenue, to also include revenue from Customs duties and other National Government collections.

As a result of the ruling, LGU allocations rose 37.89% to P959 billion in 2022, with the LGUs’ take based on National Government collections from three years prior. However, because government revenue took a hit from the pandemic in 2020, the allotment for next year is estimated to fall 14.47% to P820 billion.

“The ComDev agreed to form a technical working group to consider the inputs of the LGU leagues and convene after two weeks to approve the draft amendatory EO,” according to a statement issued by the DBM.

“The secretariat will continue to engage with the stakeholders in the next two weeks to finalize the draft for presentation to the President.”

The ComDev is composed of the DBM, NEDA, the Departments of Finance and Interior and Local Government, the Executive Secretary, the League of Provinces, Cities, and Municipalities of the Philippines, the Liga ng mga Barangay sa Pilipinas, and the Union of Local Authorities of the Philippines.