Full devolution in 2022: Good or bad dose to LGUs?


DEVOLUTION ALSO called political decentralization involves the transfer of power and authority from the national government to local government units (LGUs) which are defined in the 1987 Constitution as the territorial and political subdivisions of the state. I remember vividly how my UP professor in Masters in Public Management, the late Dr. Mario Reinoso, described it as “DEVILUTION”.

The Supreme Court granted in 2018 and reaffirmed in 2019 the petitions of Batangas Gov. Hermilando Mandanas and former Bataan Gov. Enrique Garcia Jr., under which LGUs’ IRA (Internal Revenue Allotment) would come from 40 percent of collections of all national taxes—the Bureau of Internal Revenue’s (BIR) tax take plus the Bureau of Customs’ (BOC) collections of import duties and other taxes. At present, LGU’s IRA only came from two-fifths of national internal revenue taxes collected by the BIR.

As the high court ruling would be implemented next year, the Development Budget Coordination Committee estimates had shown LGUs’ 2022 IRA sourced from 2019 BIR and BOC collections would climb by 27.61 percent to P1.083 trillion or 4.75 percent of gross domestic product, instead of only P848.44 billion or 3.72 percent of GDP under the current computation. With the Mandanas ruling in full swing, the DBM estimates showed that first-class income provinces would have an increase of about P814 million in their IRA to P4.4 billion next year; highly urbanized cities, up by P394 million to P2.13 billion, and first-class municipalities, up by P187.62 million to P1.01 billion. As the bigger IRA would carve a bigger chunk from the record P5.02-trillion national budget proposal for 2022, the Department of Budget and Management (DBM) said the functions to be devolved “must permanently be taken out from national agencies to empower LGUs to assume them.”

The 2022 budget call document cited that Section 17 of the Local Government Code of 1991 also allowed devolution of local infrastructure (for education like school buildings; irrigation and trade); agriculture; environmental services such as forestry, pollution control, and small scale mining laws, modernization of tax collection services, health services like hospitals, inter-municipal telecommunications services; buildings, parks, sports facilities and jails; roads, bridges and drainage systems and industry research and tourism development; peace and order, employment facilitation, social welfare, transportation, tourism, livelihood programs, and housing services; and amid the raging pandemic the national government steps in to ensure that national coffers won’t bleed as much next year by transferring more public functions to local government units (LGUs) while they enjoy a bigger share of tax collections starting 2022.

On the other hand, labor leaders opined that there is an imminent mass lay-off of government employees and possible impacts due to the full devolution of functions of the executive branch to the local government.  The full devolution is viewed as a corrective measure borne by the decrease of share of the national government from the national tax collections but will otherwise cause more problem than it intends to solve because the full devolution will result to thousands of government employees from the affected national government agencies being laid-off and deprived of fruitful means of livelihood in times of economic slowdown caused by the COVID-19 pandemic.

In section 8 of the executive order provides that personnel hired on a permanent basis and with appointment attested by the Civil Service Commission (CSC) who may be affected by the devolution of the functions of the executive branch shall have the options to : a) Transfer to other units within the agency; b) Transfer to other agencies within the executive branch; and c) Retire or be separated from the service and be given preference to vacant positions in LGUs.  Government employees that will avail Section 8 of the EO provides that their reemployment shall be considered as new entry to the civil service and will have  a salary according to the Salary Standardization Law (SSL 5) which implies a diminution in rank and salary due to the provisions of the said law where salaries are lower for lower income class LGUs and subject to certain budget restrictions due to the “personnel services limitation” contained in the Local Government Code of 1991. Moreover, under Sections 9 and 10 of the EO, the positions of the transferred government workers within the departments/agencies and to other  departments/agencies will be coterminous with the incumbent, to be abolished once vacated.  Affected government employees that will retire/separated from the service will be prohibited from reemployment in any executive branch for a period of five years except as teaching and medical staff in educational institutions and hospitals respectively. However, there is no provision under the EO for affected casual, contractual government employees as well as job order and contract of service personnel to transfer to other offices/units within the departments/agencies and or to other departments / agencies.  Affected personnel can only apply for vacant positions in the LGU after the permanent employees.

The national government agencies are yet to make a comprehensive study on the impacts of devolution in the government services and programs and must find a solution that does not create more problems in re-allocating the necessary funds to the LGUs.  While the LGUs must admittedly have the appropriately legal share from the collections of national taxes that will be used for the services and programs for the benefit of the people, this must not necessarily cause massive economic displacement of thousands of public servants who deliver these services and programs.

In the midst of economic slowdown marked by increased inflation, bankruptcy of many micro, small and medium enterprises (MSMEs), high unemployment incidents, diminishing purchasing power of consumers, causing mass lay-off of government employees will only cause negative impact not only on the delivery of basic services and programs for the people, especially those who are in the far-flung areas, but aggravate the already faltering national economy and worsen the poverty situation in the country even further.

The Confederation for Unity, Recognition and Advancement of Government Employees (COURAGE) and the Makabayan Blocs (BAYAN-MUNA, ACT TEACHERS, GABRIELA AND KABATAAN Party-Lists) are calling for the suspension of the planned implementation of full devolution in 2022.