REVIEW OF FULL DEVOLUTION. President Ferdinand R. Marcos Jr. on Feb. 22, 2023 bares that the national government is “very serious” in studying the full devolution of certain functions of the Executive branch to the local government units (LGUs). Marcos made the pronouncement during the general assembly of the League of Municipalities of the Philippines at the Manila Hotel. (Photo from PCO Facebook page)
MANILA – As a former local chief executive, President Ferdinand R. Marcos Jr. deeply understands the paramount role that local government units (LGUs) play in driving national development. This firsthand experience has shaped his unwavering commitment to fostering a more united and empowered network of LGUs.
Effective and good governance begins at the grassroots. It is key to happy and content citizens. Being at the frontline of governance, LGUs can effect positive change, drive sustainable development and create inclusive growth.
As they are closest to the governed, LGUs know best the needs of the local communities. The national government and LGUs must work closely together to come up with effective policies, programs and strategies, optimize the use of government resources, and address the nation’s rising challenges.
President Marcos stands firmly behind strengthening local autonomy, enhancing capacities and promoting collaboration to ensure that every community across the nation thrives and contributes to a stronger, more resilient “Bagong Pilipinas.”
Bigger share of national taxes
In 2018, Batangas Governor Hermilando Mandanas and former Bataan governor Enrique Garcia Jr. petitioned the Supreme Court, questioning the constitutionality of Section 284 of the Local Government Code (LGC), which limited the LGU share of government money to “internal revenue taxes.”
They argued that all national taxes must be included in the computation of the LGU share.
In 2019, the Supreme Court ruled that the phrase “internal revenue taxes” was unconstitutional since the 1987 Constitution intended the LGU share to come from “national taxes.” The ruling changed the basis of the computation of the LGU share to include customs duties, significantly raising the total amount distributed among LGUs. What used to be Internal Revenue Allotment or IRA is now National Taxes Allotment or NTA.
With more money at their disposal, LGUs now have a greater capacity to fully implement national-government functions devolved to them under the LGC, also boosting their capability to enhance basic services and improve the living conditions of their constituents.
The Department of the Interior and Local Government (DILG) said the ruling will “help address the long-standing problem of duplication of functions and financing between the national government and the local government units.”
To carry out the Supreme Court’s ruling, the President issued Executive Order No. 138 for the Full Devolution of Certain Functions of the Executive Branch to Local Governments, Creation of a Committee on Devolution, and related purposes.
EO No. 138 states that national taxes except “those accruing to special-purpose funds and special allotments for the utilization and development of the national wealth, should be included in the computation of the base of just share of LGUs.” Implementation of the Mandanas ruling became fully effective in 2022.
The EO also clearly delineated the roles of the national government and LGU through the creation of a Committee on Devolution and the preparation of Devolution Transition Plans (DTPs) by both parties. The plan contains the roles, functions and services to be devolved to the LGUs, standards of delivery, strategies and framework for monitoring and assessment. A Growth Equity Fund was established to address marginalization, unequal development, high poverty incidence and disparities in the net fiscal capacities of LGUs. Mechanisms were set up for capacity building of LGUs; strengthening their planning, investment programming, and budgeting linkage; monitoring and evaluation systems; and dealing with affected personnel of the national government.
A digitally empowered government
At the onset of his administration, President Marcos clearly articulated his goal of enhancing service delivery and streamlining administrative operations through the adoption of e-governance platforms.
A cornerstone of the DILG’s digital-transformation strategy is the implementation of the Electronic Local Government Unit (eLGU) system. This digital platform is all about the automation of government transactions, enabling citizens to access services such as real-property tax payments, business permit applications and license renewals online.
As of early 2024, 60 percent of LGUs have adopted automated systems, with 921 of 1,634 cities and municipalities utilizing the eLGU platform. The eLGU system is a vital component of the Gov.PH Super App, a groundbreaking digital initiative by the Department of Information and Communications Technology (DICT).
This integration meant the collaborative efforts between national agencies and LGUs to create a unified digital ecosystem for government services — on a single platform — covering a wide range of functions to include business permits, community tax, property tax, civil registry, among other services.
Through the Ease of Doing Business (EODB) Program, the DILG has significantly contributed to improving the business-friendliness and competitiveness of LGUs by streamlining administrative processes and fostering digital transformation. This initiative supports the Marcos administration’s broader agenda of creating a digitally empowered government to boost economic growth and combat corruption. A pivotal aspect of the EODB Program is ensuring LGUs comply with national standards for business and construction-related permits.
As of July 2024, 1,488 cities and municipalities across the country have achieved compliance with the Business Permits and Licensing System (BPLS) standards. This signifies a monumental step in simplifying and expediting the issuance of business permits, a cornerstone of promoting a robust local business environment.
The DILG’s continuous efforts have also extended to streamlining telecommunications-related permits, with 9,183 permits and licenses for telecommunication towers approved in 672 cities and municipalities. These approvals are vital to expanding digital infrastructure and enhancing connectivity nationwide, a critical requirement for fostering a competitive digital economy.
This nationwide adoption reflects the growing recognition among LGUs of the transformative potential of e-governance tools in improving service delivery, transparency, and efficiency.
Collaboration is a must
Early on in his administration, President Marcos stressed that collaboration between the LGUs and the national government was a must to tackle the challenges the nation faced.
“And that’s why it is extremely important that the local government and the national government work very, very closely so that we maximize all our efforts to alleviate the problems that our people face – the rising cost of food, fuel,” he said during a courtesy call of local officials in Malacañang.
He noted that LGUs guide the national government to make sure that Filipinos at the grassroots feel the results of government programs.
The Mandanas ruling makes sure that the national government and LGUs adopt a comprehensive approach to identifying and reviewing the functions that must be devolved.
In his 2023 State of the Nation Address (SONA), the President reported the steps being taken for the full devolution of NG functions to LGUs required under the LGC.
“We will give effect to the mandate of the Constitution and the Local Government Code, as clarified by the Supreme Court very soon. Almost all the required Devolution Transition Plans of the LGUs are done. To fully prepare them for optimal devolution, the necessary technical and financial assistance is being extended to our local governments,” he said.
He also instructed the DILG and the National Economic Development Authority (NEDA) “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 the local government units (LGUs)” in collaboration with the Union of Local Authorities of the Philippines.
The DILG said it has adopted an inclusive approach “to fully empower LGUs for optimal devolution through capacity-building interventions, incentives and recognition, and continued technical assistance” so they could provide excellent and quality service delivery to their constituents.
Optimal devolution status
The President has announced that the government is “working on ways to make devolution both workable and equitable” through amendments to EO No. 138 to establish clearer parameters on the functions, services, and facilities to be devolved.
The President said he found the formula for dividing funding according to the services the national government is responsible for and the services that belong to the local governments.
“In that way, we are able to satisfy the needs as best as we can for both the national government and most importantly for the local government, s the Mandanas ruling really directs itself towards the improvement in the local-government situation,” he added.
According to the DILG, almost all provinces, cities and municipalities have submitted their DTPs, which will serve as their guide in the transition phase. The department also conducted various capacity-development initiatives to improve evidence-based local-development planning; local public financial management; adherence to standards on local infrastructure governance reforms; and streamlining regulatory processes, among other areas of governance. (PNA)
