Philippine Local Government Forum

09 October 2020 | via Microsoft Teams

Preparation for the Implementation

of Full Devolution in FY 2022

Marivel C. Sacendoncillo, CESO III

Undersecretary for Local Government
Department of the Interior and Local Government
Increase in IRA Levels

IRA Levels
FY 2016-2020 (Actual), FY 2021- Positive impact to
2022 (Projected)
Php 234.39 Billion
LGUs: projected FY
2022 IRA amounting
(27.61% more, 1.03% of GDP)
to P234.39 B (an
(IN MILLION PESOS)

1,500,000.00 increase of 27.61%)

1,000,000.00
500,000.00 Negative fiscal
IRA

- impact on the
national government’s
disposable cash for
FY 2022
Projected IRA in 2022 (before SC decision) Php 848.44 B
Projected IRA in 2022 (after SC decision) Php 1.083 T
*Based on the preliminary computation of DOF
IRA Allocation
% 2020 2022 2022
LGU No. of LGUs
Allocation IRA (GAA 2020) w/o SC with SC
Provinces 82 23% 149,251,886,580.00 195,141,200,000.00 249,090,000,000.00
Cities 146 23% 149,251,886,580.00 195,141,200,000.00 249,090,000,000.00
Municipalities 1,488 34% 220,633,223,640.00 288,469,600,000.00 368,220,000,000.00
Barangays 41,931 20% 129,784,249,200.00 169,688,000,000.00 216,600,000,000.00
648,921,246,000.00 848,440,000,000 1,083,000,000,000.00

FY 2022 PROJECT IRA

Barang
FY 2020 IRA
Barang ays
Provinc
Provinc es
ays es 20% 23%
20% 23%

Municip Cities Cities

23% Municip
alities 23%
alities
34%
34%
Statutory Requirement in Budget Appropriation

LGC Sec 287: Each LGU shall appropriate in its annual budget no less than
20% Development Fund
20% of its annual IRA for development projects
(20% of IRA for local
DILG-DBM JMC No. 2017-01: 20% DF shall partake the nature of investment
development)
or capital expenditures
45-55% Cap for Personal LGC: 45% for 1st-3rd class provinces, cities, and municipalities
Services 55% for 4th-6th class provinces, cities, and municipalities
RA 9710: The Magna Carta for Women – At least 5% of annual budget for
5% GAD
GAD related activities
RA 10121: Philippine DRRM Act of 2010 – No less than 5% of annual budget to
5% LDRRMF
support DRRM activities
RA 9344: Juvenile Justice and Welfare Act – At least 1% annual IRA for uses
1% Children
by the LCPC
Some GAA: Set aside 1% of government agency budget for SC and PWD
Other PWD and SC
(practice continued by some LGUs)
Offices with PPAs that may be devolved to LGUs
Agency NGAs PPAs on devolved functions FY 2020
DA Production facilities, coastal resource mgt, small scale irrigation, 18,048,616
rabies control
DAR Support to ARBOs 664,311
DepEd School building program 27,551,678
DENR Land surveys, clean water regulation 218,097
DILG LGSF, Resettlement governance 70,262
DOH ECCD/F100days, rehabilitation centers, rabies control 15,854,721
DOLE LST, TST, apprenticeship/internship, public employment service 851,503
DOST 1,443,905
DPWH Construction/maintenance of road, flood mitigation and various infra 168,768,735
DSWD Feeding, SLP, Assistance to PWD, street children 18,237,351
DTI MSME, OTOP, Negosyo Ctr, SSF, Natl and Regl Trade Fairs 1,979,050
GOCC 9,539,997
LGSF 28,852,461
OEO-SPDA 33,257
Total 292,282,440
Delineation of Functions
Selective/Calibrated Decentralization per Service Area

Shared Functions Delegated Functions

Those which should be broken
down into more specific
competencies (e.g. health,
Those for which exclusive
agriculture, infrastructure) in which
the national government is
responsibility for service
responsible for some of the provision is assigned to LGUs
competencies and LGUs are
responsible for other competencies

NGA
Province Delegated
City/Municipality Shared
Delegated
Barangay Delegated
20% Development Fund

Intention of 20% DF is to enable LGUs to better address the constantly evolving

development needs of their constituents.

Operationally in the 20% DF guidelines:

• priority development projects in the AIP and LDIP in the nature of investment and
capital expenditures/capital outlays

2022 20% DF 2022 20% DF

Level of LGU Increase
w/o SC w/ SC
Provinces 39,028,240,000.00 49,818,000,000.00 10,789,760,000.00
Cities 39,028,240,000.00 49,818,000,000.00 10,789,760,000.00
Municipalities 57,693,920,000.00 73,644,000,000.00 15,950,080,000.00
Barangays 33,937,600,000.00 43,320,000,000.00 9,382,400,000.00
Personal Services
Personal Services Cap/Limit
• With the increase in the IRA allocation of LGUs, the base amount for computing the
45% (1st-3rd class) / 55% (4th-6th class) cap on PS will likewise increase, thus
giving LGUs the opportunity to raise their PS spending.
• Several laws assigning new functions and mandating new positions:
 Local Statistician – RA 11315: CBMS Act
 Local Population Officers – EO 12, S. 2017: Attaining and Sustaining “Zero Unmet Need for
Modern Family Planning”
 LDRRMO – RA 10121: Philippine Disaster Risk Reduction and Management Act of 2010
 Youth Development Office – RA 10742: Sangguniang Kabataan Reform Act of 2015
 Local Cooperative Office – RA 11364: Cooperative Development Authority Charter of 2019
 Local Emergency Call Centers – EO 56, S. 2018: Emergency 911 Hotline
 Business Permit and Licensing Office – RA 11032: EODB-EGSD Act of 2018
 Tourism Officer – RA 9593: The Tourism Act of 2009
• The further devolution of functions may require expansion in the organization and
staffing of LGUs as they have to provide the structure and manpower to undertake
the additional work.
Personal Services
Salary Schedule by Income Class of LGUs
• The different percentages of the salary schedule per income class of LGU is
enforced to ensure that expenditure for salaries is affordable and sustainable. However,
the income classification of LGUs has not been updated since 2008.

• Some LGUs clamor for waiver of PS cap to enable them to implement salary
increase. Other financially capable LGUs clamor that they be allowed to adopt the salary
schedule of the higher income class.
Percentage of the Salary Schedule
For Provinces/Cities For Municipalities
Special Cities 100%
1st Class 100% 90%
2nd Class 95% 85%
3rd Class 90% 80%
4th Class 85% 75%
5th Class 80% 70%
6th Class 75% 65%
Challenges and Implications of the Supreme Court
Ruling
More LGU services delivered
Fiscal
Before SC ruling performance gaps are attributed to lack
1 of resources, such as an argument for underperformance
Policy should be treated with less merit
efficiency
and Fewer PPAs for NGAs
effectiveness • NGA PPAs that encompass LGU roles and service
2 delivery functions will be removed and devolved to
LGU capacity LGUs
to manage • NGAs expected to perform less implementation and
additional more oversight functions
resources
Greater demand for supervision of LGUs
3 • Expanded oversight role of NGAs
Accountabilit • Exercise of oversight responsibilities of provinces, cities,
y and municipalities over their respective component
LGUs
Preparatory Activities among Oversight Agencies

• Inventory of potential sources of funds to address the anticipated IRA increase were
identified from NGAs PPAs
• Formulated the Full Devolution Roadmap (initial)
• Formulated a draft Executive Order by DBM with DILG, DOF, and NEDA in consultation
with LGUs thru the various LGUs Leagues (LPP, LCP, LMP)
• Coordination efforts done through various activities:
• Technical consultations with policy experts
• Round-table discussions with development partners
• Inter-agency workshops led by the DBM and DILG
• Dialogue with select members from the House of Representatives
• Consultations with LGUs for the Finalization of the EO led by DBM
DILG Responsibilities in the EO

Strengthening
Planning,
Preparation of Options for
Delineation of NG Capacity Building Investment
Devolution Affected NGA
and LGU Roles for LGUs Programming,
Transitions Plans Personnel
Budgeting Linkage
and M&E Systems

• Through LGA, oversee

provision of needed
• Inventory of services capdev interventions • Include PFM in the
and functions (shared • Prepare Devolution to LGUs capdev of LGUs • With DBM and CSC,
and delegated) Transition Plan (FY • Develop other capdev • Update JMC 2016 and develop and issue
• Define standards for 2020-2021) strategies and other recalibrate the SLPBC guidelines for the
the delivery of • Evaluate transition appropriate • Provide for results- options that affected
devolved services plans of LGUs and mechanisms based M&E systems NGA personnel may
• Setting up of LGU provide necessary TA • Facilitate • Develop performance want to avail
Readiness Criteria institutionalization of incentive mechanisms
performance
standards
Preparatory Activities Internal to DILG
• Survey to DILG Regional/Field Offices (DILG) – Assessment of DILG and LGU
Readiness (PS)
• Internal consultation on the transition roadmap (PS, BLGD, SLGP)
• DILG Core Team on Full Devolution composed of DILG Bureaus and Services, and
select DILG ROs (CAR, NCR, Region VI, Region X) in January 2020
• Conduct of Orientation to DILG RDs and Planning and Budget Officers in Subic in
February-March 2019
• Roundtable Discussion: Citizens Participation in the Post-Mandanas Scenario with
Government and Non-Government Partners in December 2019
• Roundtable Discussion on the Implementation of the Supreme Court Ruling (DILG)
in August 2020
• Conduct of studies on devolution policy related reforms thru the support of ADB led by
BLGD
• Development of CapDev plans for LGUs led by the LGA
In what areas should we focus for the transition?
|1| |3| |5| |7|
COVID19 Results-based Review of LGUs’ Observance of the
organizational structure,
Recovery & Risk performance hierarchy of
competencies &
Management management, monitoring absorptive capacity accountability in the
and evaluation supervision of LGUs

|2| |4| |6|

DILG’s increased Linkage of NG-LGU Tailor-fit and needs-
oversight functions across plans for the based capdev
all areas of governance transition interventions to LGUs
What LGU capacities need to be strengthened?
|1| Local |3| Monitoring &
Evaluation |5| Community Mobilization
Development
Planning

|2| Public Financial Management |4| Project Management |6| Revenue Generation
What kind of interventions should we provide to LGUs?

Capacity development

Strategies for stronger linkages and coordination

with other agencies and LGUs

Advocacy and awareness on the SC Ruling

How should we strengthen our own people and Department to
cope with these new roles and challenges?

RIGHT-SIZING/
ORGANIZATIONAL &
FUNCTIONAL STRUCTURE
.

PERSONNEL COMPETENCIES

INTERNAL POLICIES, SYSTEMS,

STANDARDS, PROCESSES
& PROTOCOLS

SYSTEM ARRANGEMENTS
WITH OTHER STAKEHOLDERS
(CSOS, OTHER NGAS)

• Submission of transition plans of NGAs
• Implementation of Communications Plan
• Development of framework for monitoring
assessment of devolved functions
• Strengthening capacities of NGAs on
monitoring and coaching functions
• Capacity building activities for LGUs
through DAP, LGA, and BLGF
• Formulation of EO on Full
Devolution
• Inventory of sources of funds and
review of functions/services to be
devolved
• Policy Studies with Development 2019
Partner
• Consultation with concerned
NGAs with PPAS for devolution
202 • Actual devolution functions
2 currently still being
implemented by NGAs
• Monitoring of the devolution
process and establishment of
202 LGU scorecards
1
• Issuance of EO on Full Devolution
 Definition of standards for devolved functions
2020 and services
 Formulation of strategy for capacity
development of LGUs
 Development of transition plans and OEP
• Policy Development based on studies
• Development of Strategic Communication Plan
 Stakeholders’ engagement/consultations
 Consultation meetings with different levels of
LGUs
 Conduct of Regional and Community
Awareness Campaign
• Policy revival of NG-LGU Cost Sharing Scheme
• Strengthening of planning-budgeting linkage