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- 1. SALIENT FEATURES OF EXECUTIVE ORDER NO. 138 ON FULL DEVOLUTION USEC. MARLO L. IRINGAN Undersecretary for Local Government 19 May 2021
- 2. EXECUTIVE ORDER ON FULL DEVOLUTION OF CERTAIN FUNCTIONS OF THE EXECUTIVE BRANK TO LOCAL GOVERNMENTS, CREATION OF A COMMITTEE ON DEVOLUTION, AND FOR OTHER PURPOSES SALIENT FEATURES Delineation of NGAand LGU Roles Preparation of Devolution Transition Plans Establishment of Growth Equity Fund Creation of Committee on Devolution
- 3. SALIENT FEATURES Capacity Building for LGUs StrengtheningofPlanning, InvestmentProgramming, andBudgetingLinkageand M&ESystems Development of Communications Plan and Strategy Options for Affected NGA Personnel EXECUTIVE ORDER ON FULL DEVOLUTION OF CERTAIN FUNCTIONS OF THE EXECUTIVE BRANK TO LOCAL GOVERNMENTS, CREATION OF A COMMITTEE ON DEVOLUTION, AND FOR OTHER PURPOSES
- 4. FUNCTIONS, SERVICES, AND FACILITIES FOR FULL DEVOLUTION • Covers all LGUs and all departments, agencies, and instrumentalities of the Executive Branch with devolved functions to LGUs • Functions,basic servicesand facilities based on Section 17 of the Local Government Code and other pertinent laws
- 5. PREPARATION OF FULL DEVOLUTION TRANSITION PLANS NGA Devolution Transition Plan Identification of devolved functions and services and phasing of or strategy for devolution Definition of service delivery standards Capacity development strategy for LGUs LGU Devolution Transition Plan LGUs to prepare their DTPs in close coordination with pertinent NGAs The DTPshall not be approved by the NGAs
- 6. ESTABLISHMENT OF GROWTH EQUITY FUND A Growth Equity Fund shall be established starting FY 2022 to address problem of marginalization, unequal development, and high poverty incidence across different LGUs.
- 7. CREATION OF COMMITTEE ON DEVOLUTION • To be composed of the following members: • SecretaryofBudgetandManagement,asChairperson; • SecretaryoftheInteriorandLocalGovernmentasCo-Chairperson; • SecretariesofFinanceandSocioeconomicPlanning; • Executive Secretary;and • PresidentsoftheLeaguesofProvinces/Cities/Municipalities ofthePhilippines,LigangmgaBarangaysa Pilipinas,andUnionofLocalAuthoritiesofthePhilippines, asmembers • To monitor and evaluate the status of the implementation of devolution transition plans, compel compliance and impose sanctions against non-performing NGAs and LGUs, and provide recommendations based on annual assessments
- 8. CAPACITY DEVELOPMENT FOR LGUs • Capacity DevelopmentAgenda of LGUs shall be formulated based on the DILG-LGAassessment framework and guided by the strategies identified by the NGAs, local development thrusts, and performance goals and objectives Shall harmonize and oversee provision of needed capacity developmentinterventions Shallstrengthencapabilitiesof localchiefexecutives Shallconductprogramsregarding revenuegenerationandfiscal management
- 9. Strengthening of Planning, Investment Programming, and Budgeting Linkage and M&E Systems • Vertical and horizontal linkages across different levels of government in development planning, investment programming and budgeting to be strengthened, and areas of convergence to be identified • Results-based monitoring and evaluation systems shall likewise be in place and strengthened to ensure purposive conduct of evaluations in the performance and delivery of devolved functions and services
- 10. DEVELOPMENT OF COMMUNICATIONS PLAN AND STRATEGY • The NG shall lead in the development of a strong communications plan and strategies to convey to the general public the delineation of functionsbetweentheNGAsandLGUs. • NGAs shall designate focal officials and personnel to participate in this communicationseffort. National Government • The LGUs are encouraged to formulate their respective communications plans and strategies to effectively carry out the devolution efforts. Local GovernmentUnits
- 11. OPTIONS FOR AFFECTED PERSONNEL Transfer toother units within the agency Transfertootheragencies withintheExecutive Branch Retireorseparatefromthe service,andmaybegiven preferencetovacantpositions inLGUs
- 12. 2019 2020 2021 2022 • Consultations with NGAs concerned Preparation of devolution transition plans Definition of service standards for devolved functions and services Formulation of capacity development strategies for the LGUs • Development of strategic communications plan Stakeholders’ engagements/consultations Consultation meetings with different levels of LGUs Conduct of regional and community awareness campaign • Strengthening of planning-budgeting linkage • Refinement of EO on full devolution • Formulation of EO on full devolution • Inventory of sources of funds and review of functions/services to be devolved • Commissioning of policy studies with development partners • Initial consultation with NGAs with PPAs for discontinuance • Issuance of EO No. 138 • Submission of transition plans of NGAs and LGUs • Implementation of communications plan • Development of framework for performance assessment of devolved functions • Strengthening capacities of NGAs on monitoring and coaching functions • Capacity development activities for LGUs through LGA, DAP, BLGF, and NGAs concerned • Implementation of the SC ruling and the devolution of functions • Monitoring of the devolution process Full Devolution Road Map
- 13. LGU PERFORMANCE (P) LGU CAPACITY (C) ENABLE EVOLVE ENGAGE ENERGIZE QUADRANT 2 • Low C, High P LGUs QUADRANT 1 • High C, High P LGUs QUADRANT 3 • Low C, Low P LGUs QUADRANT 4 • High C, Low P LGUs Q1: EVOLVE LGUs with high capacity and high performance into sources of good practice and innovation, and exemplars of local governance under full devolution Q2: ENABLE LGUs with low capacity to unlock capacity issues to seize in full the promises of full devolution and reinforce performance as a result of targeted CapDev solutions Q3: ENGAGE LGUs with low capacity and Low Performance to catch up with other LGUs, and provide them with targeted CapDev solutions Q4: ENERGIZE LGUs with high capacity to translate this into high performance in the context of full devolution through targeted CapDev solutions LGU PERFORMANCE – CAPACITY QUADRANTS
- 14. LGU PERFORMANCE – CAPACITY QUADRANTS Foundational - Planning, investment programming, budgeting, implementation, M&E Enabling -resilience, peace and security, connectivity, area-wide concerns, international commitments Developmental- capacities to achieve specific sectoral priorities based on devolved functions LGU PERFORMANCE (P) LGU CAPACITY (C) QUADRANT 2 • Low C, High P LGUs QUADRANT 1 • High C, High P LGUs QUADRANT 3 • Low C, Low P LGUs QUADRANT 4 • High C, Low P LGUs D F D E F E D E F F D E PRIORITY 2 PRIORITY 4 PRIORITY 1 PRIORITY 3 D E F
- 15. DILG POLICY GUIDANCE TO LGUS DILG Memo Advisory to LGUs (19 February 2021) 1. Apprised on the priorities in DBM NBM No. 138 • NGA to shift from “rowing to steering”; prioritize cap building; limit subsidies to local income, GIDA and poverty stricken LGUs • LGU to be mainly responsible for devolved function under LGC of 1991 2. Advised to: • Coordinate and/or confer with line agencies of government for the delineation of expenditure assignments and service delivery standards; • Articulate LGU capacity building needs; • Determine implications on its organizational structure and staff competency; • Proceed with caution in the availment of loans
- 16. COMPONENTS OF THE LGU DEVOLUTION TRANSITION PLANS Inventory of existing services vs devolved functions Organizational effectiveness proposal Local revenue forecast and resource mobilization strategy Strategy to meet service delivery standards, and contributions to PDP outcomes
Editor's Notes
- The Supreme Court’s final ruling on the Mandanas-Garcia petitions clarifies the basis for the computation of local government unit (LGU) shares. It states that LGUs have a share in the national taxes and not just from internal revenue. It, therefore, strengthens fiscal decentralization. The Ruling is in line with the declared policy of the State on decentralization and promotes the principles of subsidiarity espoused by the Local Government Code of 1991 (LGC). The ruling is another milestone in our nation’s continuing journey towards genuine local autonomy and empowerment. Beginning 2022, LGUs will have more fiscal resources to provide better services to their constituents. Moving forward, the public can expect better services from their local governments – responsive to their needs. National government can assume more steering function and focus on macro and strategic priorities to address the country’s persisting development issues. However, the Supreme Court Ruling will require the updating of LGU organizational capacity and human resource competency to be able to effectively carry out their roles and responsibilities given the additional fiscal capacity. The ruling will also necessitate strengthened coordination between national government and local governments to ensure systematic alignment and harmonization of national and local priorities. Executive Order No. 138 Full Devolution of Certain Functions of the Executive Brank to Local Governments, Creation of a Committee on Devolution, and for Other Purposes was issued on 01 June 2021. The EO is intended to serve as a necessary mechanism as the government prepares for the full implementation on the Supreme Court Ruling on the Mandanas-Garcia Cases starting FY 2022 to ensure fiscal sustainability, continual provision of basic services, further strengthen and affirm the autonomy of LGUs as provided for in the Constitution and the LGC, and put an end to the long-standing problem of duplication of responsibilities between the National Government and LGUs.
- The draft EO has the following salient features: Delineation of the roles of the National Government and LGUs to address the issue of duplication of services and to maximize resources. Preparation of NGA and LGU Devolution Transition Plans (DTPs) as part of the implementation of the Supreme Court Ruling. Establishment of the Growth Equity Fund to address issues on marginalization, unequal development, high poverty incidence, and disparities in the net fiscal capacities of LGUs. Creation of the Committee on Devolution (ComDev) to oversee the implementation of the provisions of the EO.
- Provision of capacity building for LGUs. Highlighting the need to strengthen planning, investment programming, and budgeting linkage as well as Monitoring and Evaluation (M&E) systems and tools. Development of the appropriate communications plan and strategy to disseminate the goals and objectives of full devolution; and Available options to personnel of the National Government who may be affected by the transition.
- The EO covers all LGUs, as well as all departments, agencies, and instrumentalities of the Executive Branch with devolved functions to LGUs. We would like to emphasize that the draft EO provides for the full devolution of functions, services, and facilities from the NG to LGUs based on the LGC and other pertinent laws passed after the Code. It is emphasized that there are no new and/or additional functions that will be devolved to LGUs.
- To ensure the smooth implementation of the transition to full devolution, the EO provides for NGAs to prepare their respective DTPs. NGA DTPs shall be submitted to the DBM for evaluation and approval within 120 days after the effectivity of the EO. Among others, NGA DTPs shall include the following: Identification of agency PPAs that will be affected by the full devolution of functions and services, strategy for full devolution, and phasing. The devolved functions and services and the corresponding LGU level – whether it is the province, the city, or municipality to which they should be devolved based on the LGC and other pertinent laws. The phasing or strategy of devolution transition activities to LGUs concerned shall consider growth strategies, resources, and capacities based on the concerned NGA’s experience and assessment. The definition of standards for the delivery of devolved services such as minimum costs, scope, quality of services, as well as the organizational setup and minimum manpower complement recommended for LGUs by the NGA so that LGUs can undertake the devolved functions and services. The capacity development strategy for NGAs and for LGUs. For NGAs to effectively and efficiently perform their steering as well as monitoring and evaluation functions; and for LGUs to enable them to absorb and managed the devolved functions and services. The framework for monitoring and performance assessment of LGUs, including the grant of incentives and possible imposition of sanctions provided by pertinent laws. Finally, the organizational effectiveness proposal to include the modifications in the organizational structure, staffing complement, and resource allocations of the departments and agencies to strengthen their capacity in assuming steering functions. The DTPs aim to guide NGAs, especially for the FY 2022 national budgeting cycle, taking into consideration the shifts under the full devolution effort. On the other hand, LGUs shall likewise prepare their own DTPs in close coordination with pertinent NGAs, especially with regards to the devolved functions and services critical to them and their constituents. LGU DTPs shall be used as guides by the LGUs themselves, the NGAs concerned, and oversight agencies like the DBM and the DILG to monitor and assess performance. DTPs of LGUs shall also be used by NGAs to assess the technical and capacity development needs of LGUs needed to perform their roles and responsibilities and deliver services and functions expected from them. The guidelines for the preparation of NGA and LGU DTPs shall be issued through supplemental guidelines by the DBM and the DILG.
- Also, part of the proposed EO is the establishment of the Growth Equity Fund, starting FY 2022, to address issues on marginalization, unequal development, high poverty incidence, and disparities in the net fiscal capacities of LGUs. The GEF amount shall be included by the DBM in the National Expenditure Program (NEP) starting FY 2022 to cover funding requirements of programs, projects, and activities of poor, disadvantaged, and lagging LGUs to gradually enable the full and efficient implementation of the devolved functions and services pursuant to pertinent laws. The GEF shall be released to LGUs in accordance with the implementing rules and regulations to be prescribed by the Development Budget Coordinating Committee (DBCC). The Fund shall be subjected to mechanisms and guidelines for the equitable, performance-based, and time-bound allocation and distribution of resources to LGUs. Technical discussions between the DBM and DILG for the development of guidelines for the release of GEF to LGUs is still ongoing.
- The ComDev shall be constituted to oversee the implementation of the EO, monitor and evaluate the status of the implementation of the NGA and LGU DTPs, compel compliance and impose sanctions against non-performing NGAs and LGUs as may be allowed under relevant laws, and come up with recommendations based on annual assessments and advocate for good practices. The ComDev shall be composed of the DBM Secretary as Chair, DILG Secretary as Co-Chair, Secretaries of DOF and NEDA, Executive Secretary, together with the Presidents of the League of Provinces of Philippines (LPP), League of Cities of the Philippines (LCP), League of Municipalities of the Philippines (LMP), Liga ng mga Barangay (LnB), and Union of Local Authorities of the Philippines (ULAP). The LGUs should be able to take on a more active role in drafting the implementing rules and regulations of the draft EO through the ComDev.
- In view of the devolution of certain functions from NGAs, LGUs shall formulate their Capacity Development Agenda based on the assessment framework and guidelines to be issued by the DILG-Local Government Academy (LGA) and guided by the strategy for capacity development of the LGUs contained in the NGA DTPs, local development thrusts, and performance goals and objectives. The DILG, through LGA, shall institute mechanisms to harmonize all capacity development interventions to ensure efficient allocation of resources that will be allocated for the purpose. The Development Academy of the Philippines (DAP) shall strengthen capacities of Local Chief Executives (LCEs). The DOF-BLGF shall conduct capacity development programs relative to revenue generation and fiscal management. Further, under the proposed EO, the DILG is directed to develop other capacity development strategies, facilitate institutionalization of performance standards, and develop performance incentive mechanisms under the Seal of Good Local Governance (SGLG) to promote excellence in local governance under the devolution set-up. To ensure continuity in the efficient and effective service delivery, capacity development interventions shall be offered preferably to career or permanent local government personnel as a means of institutional strengthening.
- The vertical and horizontal linkages across different levels of government in development planning, investment programming, and budgeting shall be strengthened to align national, regional, and local priorities. This can be done thru improved coordination, synchronization and joint execution of programs and projects. The role of Regional Development Councils (RDCs), which set the strategic direction for faster development of the regions especially in the lagging areas and facilitate alignment of the local development and the land use plans with the goals, objectives, and targets in the Philippine Development Plan (PDP) and the respective regional development plans, is being highlighted. The RDCs and the regional development plans and investment programs can serve as platforms for convergence as well as vertical and horizontal alignment, thus making concrete LGU contributions to regional and national priorities. DILG, DBM, DOF, and NEDA circulars shall be updated and the Synchronized Local Planning and Budge Calendar (SLPBC) shall be recalibrated accordingly. Results-based M&E systems shall be put in place and strengthened to ensure the purposive conduct of evaluations by NGAs to guarantee that LGUs have assumed the devolved functions and services effectively in support of good governance, transparency, accountability, and evidence-based decision making.
- The EO likewise provides for the development of a strong communications plan and strategy to effectively convey to the public as well as other stakeholders the delineation of functions between NGAs and LGUs. For this purpose, the NGAs, both the oversight and affected agencies shall designate focal persons and personnel to participate in this communications effort. Meanwhile, LGUs are encouraged to formulate their respective communications plans and strategies to effectively carry out the devolution efforts.
- Lastly, the EO provides options for NGA personnel hired on a permanent basis who may be affected by the full devolution of functions of the executive branch: Transfer to other units/offices within the department/agency/GOCC concerned without reduction in pay Transfer to other departments/agencies/GOCCs in the Executive Branch without reduction in pay; or Avail of the retirement benefits and separation incentives as provided under Section 13 of the Order and be given preference should they apply to vacant positions in concerned LGUs performing those devolved functions, provided that their reemployment shall be considered as new entry to the civil service and that they shall be subject to the compensation system of the LGU concerned. It should be emphasized that there should be no involuntary separation, termination, or layoff of permanent personnel of NGAs affected by the devolution. Likewise, this full devolution transition effort will not involve the automatic transfer of National Government personnel to LGUs. Affected personnel with permanent appointment who would opt to retire or separate from the service shall be given the option to avail of retirement benefits under existing laws, if qualified. On the other hand, for the contractual personnel in the departments/agencies who were hired for the implementation of the devolved functions, the DBM is setting up a mechanism to identify those who are willing to be absorbed by the LGUs and to provide the LGUs with this list so that LGUs can take advantage from the experiences and technical expertise of these personnel. The DBM and DILG, in coordination with the CSC, shall develop and issue the guidelines, as may be necessary, to ensure the fair, orderly, and transparent implementation of this provision in the EO.
- This slide shows the roadmap of the government’s full devolution transition effort. Since 2019, the National Government has been preparing for this transition effort to provide the necessary instruments and measures to support both the national and local governments. In 2019, the IATWG started the drafting of the EO on Full Devolution; did an inventory of source of funds and review the functions and services to be devolved, commissioned policy studies with the support of development partners, and conducted initial consultations with concerned NGAs with PPAs for discontinuance. In 2020, the IATWG conducted a series of consultations with concerned NGAs for the preparation of DTPs, development of service delivery standards for devolved functions and services, and identification of capacity development strategies and interventions for LGUs. In the same year, the National Government started the development of the communications plan and strategy for the implementation of the Supreme Court Ruling and revisiting planning, investment programming, and budgeting systems and tools to further strengthen horizontal and vertical linkages of plans and budgets. The proposed EO was further refined and enhanced considering the inputs and comments gathered during the consultations. As provided in the EO, NGAs and LGUs are expected to submit their respective transition plans based on the guidelines to be issued by DILG and DBM. It is also expected that the communications plan as well as the roll out of LGU capacity development activities for LGUs will be implemented this year through the LGA, DAP, DOF-BLGF, and concerned NGAs. In 2022, the Supreme Court ruling will be implemented, and effective M&E systems will be put in place by the National Government to monitor the devolution transition process.
- Further in this presentation, the framework for reckoning capacity requirements and providing capacity support will be tackled. It has been pointed out in several consultation sessions with stakeholders the varying capacities of LGUs to fully assume the devolved functions and services. In line with this, the Department proposes the adoption of the LGU Performance-Capacity Quadrants to classify LGUs according to levels of capacity and performance using SGLG results as proxy indicators. This will help define the transition approaches will respond to the distinct need of the LGU vis-a vis the requirements of full devolution. The DILG Regional Offices, through the Local Governance Regional Resources Centers (LGRRCs), will help determine which LGUs belong under each of the four quadrants. Quadrant 1: High Capacity, High Performance LGUs – “Evolve” LGUs with high capacity and high performance into sources of good practice and innovation, and exemplars of local governance under full devolution. Quadrant 2: Low Capacity, High Performance LGUs – “Enable” LGUs with low capacity to unlock capacity issues to seize in full the promises of full devolution and reinforce performance because of targeted capacity development solutions. Quadrant 3: Low Capacity, Low Performance LGUs – “Engage” LGUs with low capacity and low performance to catch up with other LGUs and provide them with targeted capacity development solutions. Quadrant 4: High Capacity, Low Performance LGUs – “Energize” LGUs with high capacity to translate this into high performance in the context of full devolution through targeted capacity development solutions.
- Using the capacity-performance profile of LGUs developed though the analysis of the LGU Capacity Development Agenda and performance, LGUs targeted for capacity development will be prioritized according to the following categorization of capacity development interventions: foundational, enabling, and developmental. Priority 1: Engage LGUs with Low Capacity, Low Performance. LGUs under this category shall be prioritized with a mix of foundational, enabling, and developmental capacity development solutions. This shall allow LGUs to catch up with others under full devolution. Priority 2: Enable LGUs with Low Capacity, High Performance. LGUs under this category shall be prioritized with foundational and enabling capacity development solutions. Developmental interventions may be provided only when needed. The menu of interventions is expected to unlock capacity issues to seize the promises of full devolution. Priority 3: Energize LGUs with High Capacity, Low Performance. LGUs under this category shall be prioritized with enabling and developmental capacity development solutions by addressing performance constraints beyond issues of capacity. Priority 4. Evolve LGUs with High Capacity, High Performance. LGUs under this category shall be sources of good practice and innovations, and exemplars of local governance under full devolution.
- On 19 February 2021, the DILG issued an advisory apprising LGU officials and functionaries on the preparatory activities being conducted by the Department as well as other NGAs relative to the implementation of the Supreme Court ruling as well as the salient provisions of the National Budget Memorandum (NBM) No. 138 to keep them abreast of the initiatives that will help them prepare for the transition to full devolution. LGUs are advised to: Coordinate and/or confer with line agencies of government for the delineation of expenditure assignments and service delivery standards Articulate LGU capacity building needs Determine implications on its organizational structure and staff competency; and Proceed with caution in the availment of loans.
- The DILG is in the process of formulating the guidelines for LGUs in the preparation of their respective DTPs. Said guidelines will provide for the necessary processes and measures that LGUs can use to fully assume the devolved functions as provided under the LGC and other pertinent laws in light of the Supreme Court Ruling. A series of discussions and fora conducted by the Department initially yielded the components that LGU DTPs shall contain. This may include but are not limited to the following: Inventory of LGU functions, services, and facilities in relation to the NGA DTPs. Organizational Effectiveness Proposal (OEP): Organizational Structure and Staffing Capacity Development Agenda to guide capacity development interventions of NGAs; and, Strategy to meet service delivery standards and contributions to the Philippine Development Plan (PDP) outcomes. The proposed LGU DTP guidelines will also be vetted with LGU Leagues and the concerned NGAs for comments. Once said guidelines is finalized, the Department will accordingly inform all LGUs with an official issuance which shall be disseminated through our DILG Regional and Field Offices.
- Thank you and have a good day.