Policy Declaration
- The National Government (NG) embraces decentralization to develop LGU capacities.
- Objectives include enhancing local service delivery, economic growth, accountability, professionalism, and transparency.
Guiding Principles of Devolution
- NG sets policies, strategies, and standards; LGUs implement and manage services.
- Functions are assigned based on benefits and scale:
- Services with local benefits to lower-level LGUs.
- Services with broader externalities and economies of scale to higher levels.
- Redistributive functions remain with NG.
- Institutional development for LGU capacity to assume devolved functions.
- Ambiguities favor LGU devolution.
Scope and Coverage
- Applies to all LGUs, NG departments, agencies, and instrumentalities related to devolved functions under RA No. 7160.
Full Devolution of Functions by FY 2024
- Complete transfer of functions, services, and facilities identified under Section 17 of RA No. 7160 and related laws.
- LGUs hold primary responsibility and accountability.
- Funding sourced from LGUs’ share of national taxes and local revenues.
- Proper allocation of funds to devolved services is mandatory.
Preparation and Implementation of Devolution Transition Plans (DTPs)
- NGAs and LGUs must prepare DTPs following DBM and DILG guidelines.
- One DTP per department covering attached agencies and GOCCs.
- Contents include functional clarifications, standards, capacity building, monitoring framework, and organizational changes.
- Submission deadline: within 120 days from Order effectivity.
Creation and Composition of Committee on Devolution (ComDev)
- ComDev chaired by DBM Secretary, co-chaired by DILG Secretary.
- Includes NEDA, DOF, Executive Secretary, and LGU league presidents.
- Members appoint senior officials as permanent representatives.
- DBM provides secretariat services.
Roles and Functions of ComDev
- Oversee, monitor, and enforce administrative and fiscal decentralization.
- Evaluate DTP implementation and address arising issues.
- Remove regulatory and fiscal controls hindering automatic LGU tax share release.
- Ensure continuous public service delivery during transition.
- Develop and implement a communication strategy.
- Issue implementing rules within 30 days and annual progress reports.
Establishment of Growth Equity Fund (GEF)
- Proposed fund to address marginalization and fiscal disparities among LGUs.
- Incorporated in the National Expenditure Program from FY 2022.
- Funding support for programs in poor and disadvantaged LGUs.
- Distribution based on equitable, performance-based, and time-bound guidelines.
Capacity Development for LGUs
- Led by DILG’s Local Government Academy (LGA).
- Harmonizes capacity building efforts across NGAs and service providers.
- Incorporates public financial management and performance standards.
- Encourages career personnel participation for institutional strengthening.
LGUs’ Roles and Responsibilities
- Prepare their own DTPs coordinating with NGAs.
- Develop Capacity Development Agenda aligned with national and local goals.
- Formulate communication plans complementing ComDev strategies.
- Local policies must align with NG standards and guidelines.
Strengthening Planning and Monitoring Systems
- Enhance vertical and horizontal coordination in planning, budgeting, and evaluation.
- Regional Development Councils to align local plans with national development goals.
- Provincial governments to oversee inter-local service provision and projects.
- Update circulars and synchronize planning and budgeting calendars.
- Implement results-based monitoring and evaluation systems.
Personnel Options and Transition
- Permanent personnel affected by devolution may:
- Transfer within or across NG agencies without pay reduction.
- Avail retirement/separation benefits and apply for LGU positions.
- Transfers of medical/allied personnel to DOH-supervised hospitals allowed.
- Guidelines to ensure fair, orderly implementation to be issued by DBM and DILG.
Retirement and Separation Benefits
- Eligible personnel may avail statutory retirement benefits plus separation incentives based on length of service.
- Separation incentives range from half to one and a quarter month’s salary per year of service.
- Minimum 5 years of service required; service after age 59 excluded.
- Portability schemes apply for retirement benefit compliance.
- GSIS to pay retirement gratuities; refund of retirement premiums excluded.
Additional Benefits for Retired/Separated Personnel
- Refund of Pag-IBIG contributions.
- Commutation of unused leave credits per civil service rules.
Prohibition on Rehiring Affected Personnel
- Five-year ban on reemployment in Executive Branch agencies, except teaching and medical roles.
- Violation requires refund of separation incentives on a pro-rated basis.
- Ban does not apply to other government branches or LGUs.
- Reemployed personnel in LGUs subject to local compensation systems.
- Consultancy engagements governed by relevant ethics laws.
Funding and Budgetary Provisions
- First-year implementation funded from existing NGA appropriations and GOCC corporate funds.
- Subsequent funding included in agency budget proposals.
- NG provides funds for separation incentives in agencies; GOCCs fund their own.
- NG assistance may be provided for GOCC funding shortfalls.
Continuity and Compliance
- Devolution efforts shall not suspend compliance with the Ease of Doing Business and government service laws.
Interpretation, Separability, and Repeal
- Conflicts resolved liberally to avoid service delivery impediments.
- Invalid provisions do not affect remaining order parts.
- Repeals conflicting prior executive orders and related issuances.
Effectivity
- Order takes effect immediately upon publication.