CAMARINES Sur Rep. LRay Villafuerte on Sunday expressed belief that ample devolved funds plus adequate capacity-building training for local executives and their staff will spell the seamless full devolution of certain powers to local governments, as envisaged by the Supreme Court (SC) in its landmark 2018 ruling on the Mandanas-Garcia case about a bigger national revenue share for the fiscal and administrative autonomy of localities.

“For the government to guarantee the seamless full devolution of certain powers to LGUs (local government units) on the watch of President Marcos—in sync with the SC’s landmark 2018 ruling on the Mandanas-Garcia case—we need to steer clear of the omissions in the 1992 implementation of the Local Government Code (LGC) that messed up the transition to greater political and fiscal autonomy for our local governments,” Villafuerte, a three-term CamSur governor before his first election to the House of Representatives, said.

Villafuerte, now president of the National Unity Party (NUP), lauded the plan of Mr. Marcos to issue by yearend an executive order (EO) on even greater local autonomy, which the President aspires to remain true to the spirit and intent of the SC’s Mandanas-Garcia ruling on increasing the share of LGUs from national tax collections.

But the former governor added that “the government needs to eschew the pitfalls in our flawed 1992 experience in local autonomy and decentralization by providing ample funds to LGUs, and adequate capacity-building programs for provincial, city and municipal executives and their staff, to spell the seamless takeover by our localities of certain major programs and projects now being handled by the NG (national government).”

He said such adequate resources and manpower training for all local governments are a must, in light of the disparate absorptive capacities of provinces, cities and municipalities, which means not all LGUs will be ready and prepared to absorb NG tasks and functions, in case the President makes good on his plan to issue by December an EO that will apply the SC’s Mandanas-Garcia ruling possibly beginning next year.

Villafuerte is hoping that the President’s planned EO on greater local autonomy would entail “a calibrated approach cognizant of the diverse or dissimilar capacities of first- to sixth-class provinces, cities and municipalities to carry out NG tasks set for delegation to them.”

He is proposing a calibrated or staggered decentralization of NG functions to LGUs, if not the further deferment altogether of some of these tasks, particularly for local governments with relatively lower incomes and weaker absorptive capacities, to completely take over the additional tasks from the central government as early as 2024.

The former CamSur governor pointed out that President Marcos himself had said that a “one-size-fits-all” approach to full devolution wouldn’t work, “given that not all LGUs are capable of carrying out at the same time the functions that are supposed to be devolved to them under the Local Government Code, and in support of the Mandanas-Garcia ruling.”

“We are hopeful that President Marcos’ concern about the distinct administrative, fiscal and technical capability of each and every LGU to absorb and carry out public services now handled by the NG would be at front and center of the would-be EO on full devolution of certain powers now wielded by the central government,” Villafuerte said.

“The hoped-for recognition under the President’s proposed EO of such disparate absorptive capacities of first- to sixth-class LGUs would ensure the smooth transition of tasks or powers to them—and ensure a more harmonious coordination and partnership between Malacañang and local governments in the delivery most especially of frontline services to our people and the pursuit of the Marcos administration’s medium-term development agenda,” he added.

This SC ruling in 2018 on greater autonomy and more resources for LGUs was based on the separate petitions by Governor Hermilando Mandanas and the late Bataan Gov. and Rep. Enrique Garcia Jr. asking the High Tribunal to compute the annual 40% Internal Revenue Allotment (IRA) share of LGUs not based merely on Bureau of Internal Revenue (BIR) collections but to also include other national taxes collected, such as those by the Bureau of Customs (BOC).

Following the High Tribunal’s ruling, the IRA was renamed the National Tax Allotment (NTA), in light of the expanded computation of the 40%-share of LGUs.

In separate engagements recently with the League of Provinces of the Philippines (LPP) and the Provincial Board Members League of the Philippines (PBMLP), the President tackled the devolution of more powers to LGUs as a result of the 2018 Mandanas-Garcia ruling, and how he had suspended the implementation of EO 138 by a year to give more time to local governments to prepare for the devolution of certain powers, and for Malacañang to review and assess which national functions should actually be turned over to them by the NG.

Then-President Duterte issued EO 138 in 2021 with the goal for the government to execute the Mandanas-Garcia ruling in 2024 or earlier.

However, President Marcos had put EO 138 on hold and ordered the Palace’s Commission on Devolution (ComDev) to study a delayed timeline for turning over certain NG tasks to LGUs.

Villafuerte welcomed the assurance by the President of greater assistance to LGUs, including the provision of more funds and training programs for local governments to help them carry out the would-be devolved tasks, as full devolution requires them to take care of operating social services like agriculture, health and connectivity in their respective localities.

“Although I agree with Budget Secretary Mena Pangandaman that about 450 fifth- and sixth-class municipalities, for instance, will have difficulty absorbing the would-be devolved tasks without assistance from Malacañang,” he said, “I believe that even first- and second-class provinces, cities and municipalities as well will find it extremely hard to do justice to the delivery of additional functions, especially when it comes to big-ticket or high-impact programs whose implementation are to be delegated to them following the Mandanas-Garcia ruling.”

“Hence, President Marcos’ assurance of financial support for enhancing the absorptive capacities of LGUs, particularly municipalities, is something that local elective officials certainly highly appreciate,” he added.

President Marcos told the LPP in its annual meeting that, “We gave ourselves until the end of the year 2023—until the end of this year. And I will sign another executive order putting into place all—and defining very clearly which of the services, which of the functions belong to the local government and which belong to the national government.”

Villafuerte said the President certainly knows how difficult full devolution will be for local officials, despite the additional funding for LGUs from the new NTA system, considering that he had, at one time or another, served as vice governor, governor and congressman of Ilocos Norte.

Based on an initial assessment, Secretary Pangandaman said at a Palace briefing that about 450 fourth- to sixth-class LGUs with relatively lower incomes are not likely capable of carrying out national projects, as some advanced and developed local governments have enough manpower and funding while others lack those resources. “There are LGUs that we know that are really lagging po. Hindi po nila kayang i-implement iyong mga projects kasi kulang ang kanilang technical expertise and capacity to implement those projects,” she said.

Villafuerte explained that in keeping with the devolution and decentralization mandate of the 1987 Constitution, the Congress wrote Republic Act (RA) 7160 or the Local Government Code of 1991 that devolved the following year the NG’s health and agriculture functions to the LGUs.

In health, the maintenance of barangay health centers was devolved to barangays; the implementation of primary health, maternal and child care along with the purchase of medical supplies and equipment, among others, were assigned to municipalities and cities; and hospitals and tertiary health services were turned over to provinces.

However, the implementation of such tasks by the LGUs hit a snag because, as pointed out in a Philippine Institute for Development Studies (PIDS) study by director Janet Cuenca of the Bureau of Trade and Industrial Policy Research (BTIPR), there was a mismatch between the amount of IRA or devolved funds to local governments and the total cost of devolved funds (CODEF).

In the initial implementation of devolution, this PIDS study bared that although 46,080 of the 78,080 health personnel of the Department of Health (DOH) along with 595 hospitals and 12,580 health centers were turned over to LGUs, the devolved budget totaled P4.215 billion as against the P6.012 billion intended to fund national programs that was retained by the agency.

This PIDS study concluded that many LGUs were not ready for devolution, because on top of the low fiscal capacity of the local governments, the managerial capability of the local executives was not considered, as there were no capacity-building programs for them and their local health personnel before decentralization was implemented in 1992.

The subsequent underfinancing of health services led to their deterioration, according to the PIDS study by Cuenca, as manifested in “understaffing, low utilization rates, un-maintained infrastructure and un-repaired or un-replaced equipment.”

In a separate study, former National Economic and Development Authority (NEDA) undersecretary Joseph Capuno and former dean Orville Solon of the University of the Philippines (UP) School of Economics dean said the disparity in financial status between cities, on one hand, and provinces and municipalities, on the other, resulted to “inequities in decentralization” of health services, as the combined tax revenues of cities, in 1993, was 5 times as much as that of provinces and 20 times more than that of municipalities.

“Cities, which are far richer than the provinces and municipalities, got the biggest share of the IRA and the least of the devolved functions. Notwithstanding these biases in the decentralization policy, the prevailing incentive structure embedded in a decentralized setting also bears on the decision of LGUs to allocate resources on health services,” Capuno and Solon said.

As for agriculture, the LGUs inherited the general agriculture extension services of the Bureau of Agriculture Extension (BAEx), which was subsequently replaced by the Agriculture Training Institute (ATI).

Villafuerte said that in a paper, ATI director Asterio Saliot pointed to the lack of an institutional system of financial transfer for agricultural extension.

“When the BAEx was abolished, the central government lost a mechanism of working with the devolved agricultural extension service. On the other hand, the LGU, the devolved agricultural extension does not have an organizational set-up for the agricultural extension through which assistance in extension can be achieved,” Saliot said.

The national agenda was not shared as a joint agenda of the LGUs and the decentralized government, Saliot observed, saying that, “When the extension components of the funds are directly administered by the DA agencies instead of coursing it through the LGU, it causes field operation disruption instead of improving and strengthening the extension work.”

Asterio noted that the Local Government Code failed to provide mechanisms for the central government to direct assistance or augment services assigned to the LGUs.

Moreover, he said, the Fisheries Code of 1998 (RA 8550) had empowered the DA, through its Bureau of Fisheries and Aquatic Resources (BFAR), to develop cost effective, practical and efficient extension services on a sustained basis to municipal fishers in underdeveloped areas.

“This is in contradiction to the Local Government Code, which provided that direct extension delivery services for farmers and fishermen is the responsibility of LGUs,” Asterio said.