QuestionsQuestions (EXECUTIVE ORDER NO. 138)
EO No. 138 cites (1) Section 6, Article X of the Constitution on the just share of LGUs in national taxes automatically released; (2) Section 4 and related provisions on the President’s general supervision over local governments (Article X); and (3) Section 17, Article VII on the President’s control of executive departments and faithful execution of laws.
It relies on Mandanas’ holding that all national tax collections (except special purpose funds and special allotments for utilization/development of national wealth) should form the base for the LGUs’ just share. It also notes the prospective character and aligns timing with RA 7160 Section 284 such that adjusted national tax allocations start in FY 2022.
The National Government commits to decentralization to (i) develop LGU capabilities to deliver basic social services and critical facilities, increase productivity/employment, and promote local economic growth, and (ii) ensure accountability, competence, professionalism, transparency through institutional systems and strengthened local capacities.
They must review mandates and align with decentralization principles: the NG sets national policy, strategy, and service standards, and supports/oversees/supervises LGUs; functions are assigned based on benefit spillovers/economies of scale/redistributive role; the NG collaborates with LGUs through Leagues for an institutional development program; and ambiguities in LGU powers should be resolved in favor of devolution.
Devolution is the act by which the NG, as allowed by existing laws, confers power and authority to LGUs to perform specific functions and responsibilities. EO anchors this definition to Section 17(e) of RA 7160.
EO states that functions/services/facilities fully devolved from the NG to LGUs no later than the end of FY 2024 include those under Section 17 of RA 7160 and other existing laws that subsequently devolve functions of the NG to LGUs.
They are funded from the share of LGUs in national tax proceeds and other local revenues. Local chief executives must ensure funds/resources available are first allocated for the provision of devolved basic services/facilities before other purposes, consistent with budgeting and auditing laws.
A DTP is a plan by a national government department/agency (and its attached GOCCs covered by the department) and by LGUs that clarifies devolved functions by LGU level, standards, phasing, capacity development strategy, monitoring framework, and organizational effectiveness to assume “steering functions.” NGAs and LGUs must prepare their respective DTPs.
DTPs are submitted by NGAs to DBM within 120 days from EO effectivity for evaluation and approval. (The EO states this expressly in Section 5.)
Chair: Secretary of DBM; Co-Chair: Secretary of DILG; Members: Socioeconomic Planning Secretary (NEDA), Secretary of DOF, Executive Secretary, and Presidents of the Leagues of Provinces, Cities and Municipalities, Liga ng mga Barangay, and Union of Local Authorities of the Philippines. DBM provides secretariat services.
Examples include: (1) oversee/monitor administrative and fiscal decentralization goals; (2) evaluate and monitor DTP implementation and initiate actions for compliance; (3) resolve issues/concerns arising in implementation; (4) ensure elimination of regulatory/fiscal controls on automatic release of LGU shares unless warranted by law; (5) adopt mechanisms for continuous service delivery during transition; (6) issue rules/regulations within 30 days; (7) submit annual reports to the Office of the President; (8) ensure convergence of government efforts and call upon relevant agencies to fulfill functions.
GEF is proposed by ComDev to Congress to address marginalization, unequal development, high poverty incidence, and disparities in LGU fiscal capacities. DBM includes it in the National Expenditure Program starting FY 2022 to fund programs/projects/activities of poor, disadvantaged, and lagging LGUs to enable full and efficient implementation of devolved functions; allocation should be equitable, performance-based, and time-bound.
DILG oversees capacity development interventions for local governments, develops mechanisms for efficient resource use, harmonizes interventions across DBM, NEDA, DOF, other NGAs, DAP, and third parties, and uses Local Governance Resource Centers as convergence platforms. It also helps institutionalize performance standards and performance incentive mechanisms under the Seal of Good Local Governance.
The EO strengthens vertical and horizontal linkages in development planning and budgeting, requiring Regional Development Councils to set regional strategic direction and align land use/local development plans with national and regional plans. It calls for results-based M&E systems in DILG, DBM, DOF, and other NGAs to evaluate whether LGUs assumed devolved functions effectively, supporting transparency and evidence-based decisions.
Subject to civil service laws/rules: (a) apply for transfer to other units/offices within the same department/agency/GOCC without pay reduction; (b) apply for transfer to other departments/agencies/GOCCs in the Executive Branch without pay reduction; or (c) avail retirement/separation benefits and—subject to LGU discretion—apply to vacant LGU positions, treated as new entry to civil service and subject to LGU compensation systems.
Separation incentives are based on length of service, expressed as fractions/multiples of actual monthly basic salary per year of government service (with specific rates for service ranges). A minimum of five (5) years of government service is required; only service up to age 59 (and fractions) is counted for computing incentives.
Affected personnel with permanent appointments who retired/separated due to devolution are prohibited from reemployment in any Executive Branch agency for five (5) years, except teaching and medical staff in educational institutions and hospitals. Reemployment within the prohibited period triggers refund of separation incentives on a pro-rated basis. The prohibition does not apply to other branches or to local governments, though LGU rehiring is subject to prevailing compensation systems.
Section 18 directs that any conflict should be resolved or construed liberally in favor of an interpretation that prevents impediments in the delivery of public services by both NGAs and LGUs.
Section 17 states that EO No. 138 and related guidelines/transition initiatives shall not suspend or exempt any government office or personnel from compliance with RA No. 11032 (Ease of Doing Business and Efficient Government Service Delivery Act of 2018).