Voters, beware of EO#138 1

EO#138 or why voters must choose better local officials in 2022

Michael Henry Yusingco, LL.M

Posted at Nov 06 2021 08:18 AM

The Supreme Court in Mandanas vs Ochoa increased the portion of the national coffers dedicated to local government units (LGUs). Article X, Section 6 of the 1987 Constitution mandates that, “Local government units shall have a just share, as determined by law, in the national taxes which shall be automatically released to them.”

This development means a substantial rise in the Internal Revenue Allotment (IRA) prescribed by the Local Government Code of 1991 (LGC) which will take effect in 2022. Beginning next year, the IRA of each LGU (including barangays) will be significantly more than what they have been receiving these past years.

It is tempting to be simply overjoyed with the Mandanas decision given the fact that most LGUs are highly dependent on the IRA for their operations. A study on the IRA dependence rates of LGUs undertaken by the Ateneo School of Government found that a majority of provinces, cities, and municipalities depend on the IRA for more than 50% of their budgets. And a significant number of these LGUs rely on IRA for more than 90% of their local budgets.

However, this increase in the IRA also meant a decrease in the amount of funds that can be used by the central government. Prompting the administration of President Rodrigo Duterte to revisit the administrative decentralization prescribed by the LGC with the issuance of Executive Order No. 138 – Full Devolution of Certain Functions of the Executive Branch to Local Governments, Creation of a Committee on Devolution, and for Other Purposes.

Mandanas expanded the IRA of LGUs, while EO#138 extended the scope of their responsibilities. And since its issuance, the entire government bureaucracy has been busy laying the foundation for “full devolution” which is scheduled to commence when the Mandanas increase kicks in next year. Every Filipino will be impacted by this massive reform effort and hence, must understand how this process works. A good start would be to internalize Section 2 of EO#138: 

“Section 2. Guiding Principles. Consistent with Sections 3 and 17 of RA No. 7160, all department secretaries and agency heads concerned shall, in pursuit of the full devolution of functions to the LGUs, conduct a functional and organizational review of their respective mandates guided by the following principles:

a. The role of the NG is to set the national policy, development strategy, and service delivery standards, and to assist, oversee and supervise the LGUs, complementary to the stronger implementing role that the LGUs shall assume by reason of devolution;

b. The devolution of the provision of basic services and facilities to the LGUs and the determination of the functional assignments between and among the different levels of government shall be guided by the following: 

i. Public services with little or no benefit spillover are best administered and financed by lower level governments, while public services with significant inter-jurisdictional externalities or benefit and cost spillovers are best assigned to higher levels of government; 

ii. The provision of public goods and services that involve economies of scale is best assigned to higher levels of government; and 

iii. Functions related to the redistributive role of government should be best assigned to the NG; 

c. The NG, in close collaboration with the LGUs through their respective Leagues, shall formulate and pursue an institutional development program to support the LGUs in order to strengthen their capacities and capabilities to fully assume the devolved functions based on RA No. 7160 and other relevant laws; and 

d. Except as otherwise provided in this Order, any ambiguity as to the interpretation of a power granted to an LGU shall be resolved and interpreted in favor of devolution.”

EO#138 clearly aims to fundamentally reconfigure the way the government works. The first point to make here is that the transferring of programs and duties from the national government to LGUs will definitely affect each and every public official elected in 2022. Hence, it only makes sense to require candidates to guarantee that their proposed policies and plans are consistent with the devolution process outlined in EO#138.

For instance, simply promising to utilize huge urban hubs like Cebu City as centers for regional development will not be believable at all if it is not accompanied by an explanation as to how it plays out in the context of EO#138. Promises made by candidates, most specially those relating to economic reforms, must include an account as to its congruence with the devolution process prescribed by EO#138. Otherwise, voters should treat both the candidates and their campaign pronouncements with a healthy dose of skepticism.

Moreover, voters must also realize that more discernment is needed when voting for local officials given the profound impact of EO#138 on local governance. Clearly, the success of “full devolution” depends heavily on the quality of local leadership. The increase in IRA will be for nothing if incompetent people are elected to lead LGUs. At the minimum, voters must make sure that candidates at the local level truly comprehend the demands of EO #138.

Finally, EO#138 requires that the development goals of the national government and local governments are well-aligned. In the long term, a collaborative ethos between the two tiers of government needs to evolve. Hence, one vital question that voters must pose to all the presidentiables is, who will they appoint to head the Department of Interior and Local Government and the Department of Budget and Management in case they win in 2022? These two posts are vital because they co-chair the Committee on Devolution, the body tasked by EO#138 to oversee and monitor the implementation of the devolution process.

The reality is the devolution process outlined in EO#138 can only achieve the desired outcome if central government officials and local chief executives demonstrate the willingness to cooperate and coordinate. Therefore, voters must determine now who are the political leaders likely to adopt this governance mindset. And then, flat out reject those who cannot. 

(The author is a policy analyst and constitutionalist, and a senior research fellow of the Ateneo Policy Center and the Institute for Autonomy and Governance.)


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Disclaimer: The views in this blog are those of the blogger and do not necessarily reflect the views of ABS-CBN Corp.