The signing of Executive Order (EO) No. 138 by President Rodrigo R. Duterte on June 1, 2021 signaled the full devolution of basic services and facilities from the national government to local government units (LGUs) starting next year (2022), including the increased share of LGUs in all national taxes and revenues.  

With EO 138, the long-cherished goal of LGUs to finally implement the full devolution of powers and resources mandated by the 1991 Local Government Code will happen under this administration.  Under full devolution, many good things are coming our LGUs’ way and the public in general starting next year,” said DILG Secretary Eduardo M. Año. 

He also said the EO will ensure that the policy of decentralization as stated in the 1987 Constitution and the 1991 Local Government Code or Republic Act No. 7160, as well as the increase in just share in national taxes for LGUs as provided for in the Mandanas-Garcia ruling of the Supreme Court, will be implemented properly.  

Aangat ang ‘Lakas ng Lokal’ sa tulong ng ‘Dagdag na Pondo’ na magdudulot ng ‘Angat Serbisyo’ para sa mga mamamayan,” Año also said.   

In Mandanas, et al. versus Executive Secretary et al. case, the Supreme Court held that all collections of national taxes, except those accumulating 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 the just share of the LGUs.

The Local Government Code believes that LGUs could better address the needs of their constituents and can therefore deliver better services. However, full devolution never happened because the needed funds to implement full devolution were never fully transferred to the LGUs. 

   
Secretary Año said that E0 138 will provide a more responsive and accountable local government structure instituted through a system of decentralization whereby LGUs shall be given more powers, authority, responsibilities, and the corresponding financial resources.


Provinces, cities, and 1st to 3rd class municipalities who have more capacity will enjoy more autonomy in managing their resources.  The DILG will then focus and assist 4th to 6th class municipalities so they will be better equipped to carry out the additional functions and services devolved to them,” he said.


According to Año, a Committee on Devolution (ComDev) will also be created to oversee and monitor the implementation of administrative and fiscal decentralization goals of the EO, resolve issues and concerns that may arise in the implementation of the EO, ensure the elimination of any regulatory or fiscal controls on the automatic release of LGU shares and adopt mechanisms to ensure the continuous delivery of public services by the national government agencies and LGUs, among others.


The DILG secretary will serve as Co-chairperson of the ComDev together with the Secretary of the Department of Budget and Management (DBM).  Among the committee members are the Socioeconomic Planning Secretary, the Secretary of Finance, the Executive Secretary, and the Presidents of the Leagues of Provinces, Cities and Municipalities of the Philippines, the Liga ng mga Barangay ng Pilipinas, and the Union of Local Authorities of the Philippines.

 
Under EO 138, a Growth Equity Fund (GEF) shall also be proposed to Congress which will cover the funding requirements of the projects of poor, disadvantaged, and lagging LGUs to enable them to implement the functions and services devolves to them.

For its part, POPCOM has already established a Devolution Transition Plan (DTP) Task Force Co-Chaired by POPCOM IV-A Regional Director, Angelito S. Obcena, while Ms. Marilyn F. Ogaya, Officer In-Charge, led the formulation of its DTP and has conducted orientations on localization/full devolution for several of its LGU partners like the provinces of Cavite, Laguna and Rizal, as well as for the Cities of Biñan, Cabuyao, San Pablo, Sta. Rosa, and Calamba.  

The region will continue to orient other LGUs for them to be prepared in the transition period of the full devolution not later than FY 2024.  Upon approval of the DTP of POPCOM, this will be shared/disseminated to the LGUs as reference in the preparation of their own DTPs.