You are here

DBM: LGUs not required to assume devolved National Government PPAs

National Government agencies cannot impose specific programs, projects, and activities for local governments to absorb come Full Devolution due to the latter’s fiscal autonomy.

This was highlighted by DBM XII Assistant Regional Director Atty. Libertine Cagang – Guanzon  during her interview at PIA XII’s Performing and Informing Program recently.

“With this devolution, of course, the local government units shall primarily be responsible for allocating funds in the implementation of the devolved services. However, in view of the fiscal autonomy of our local government units, the national government cannot impose specific amount or  programs, projects, and activities for the local government units to absorb,” Guanzon said.

This landmark ruling has also revived the intent to fully devolve the functions specified in Section 17 of the Local Government Code to LGUs.

Guanzon added, LGUs should first assess the necessity to implement these devolved services based on their baseline information and inventory of services currently being implemented prior to assuming these devolved services and functions.

“They (LGUs) have to assess what they are currently conducting and if there are similar (services) to be devolved. If they are implementing similar programs, then they don’t have to assume this devolved services and functions,” Guanzon explained.

With the implementation of the Mandanas-Garcia Ruling in 2022, LGUs are expected to have a significant increase of shares from the national taxes, which equates to additional resources and revenues. This also means a corresponding substantial reduction in the revenues or resources of the national government that can affect the level of services they provide.

Since the national government cannot impose a specific amount of programs for the LGUs to assume, it is currently formulating indicators for rating or monitoring systems to assess the LGUs’ performance of their devolved services and functions.

“It’s incentivizing the local governments who will perform their devolved services and functions,” Guanzon said.

Furthermore, with the looming challenges on NG funds, Guanzon said the following options are being considered: search for additional resources of revenues to increase the revenue on the part of the national government, increase the fiscal deficit target at around .9 percent of the GDP in 2022 and higher percentage targets in the succeeding years, and cut-down the national government’s cost on spending and devolve other programs, functions, and services to local government units to ensure the delivery of basic services.

"If we can increase the revenue, we can provide for the national government, cater the revenue allotment for the LGUs, and at the same time, maintain the expenditure program of the national government,” Guanzon said.