SUPREME COURT RULING ON THE

MANDANAS- GARCIA PETITIONS:

WHAT IT IS, ITS IMPACT AND IMPLICATIONS
LILIBETH A. FAMACION, CESO III
Regional Director, DILG Region XIII

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 Points for Discussion

Context

Impact and Implications

Updates/ Guidelines on Devolution

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Context

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 Context

In 2013, SC consolidated petitions that:

1. Questioned the manner in which the NGAs computes the IRA

shares of LGUs; and

2. Demanded for the payment of additional unpaid IRA from

1992- 2012 claiming that the computation of the IRA then was
wrong since the inception of the LGC in 1991.
 Context

THE ISSUE:

“Whether or not the exclusion of certain national

taxes from the base amount for the computation of
the just share of the LGUs in the national taxes is
constitutional.”
 Context

SUPREME COURT RULING:

In 2018, the Supreme Court ruled that the just share of

LGUs from the national taxes is not limited to national
internal taxes collected by the Bureau of Internal Revenue
(BIR) but includes collections (customs duties) by the
Bureau of Customs.
IRA= NIRTs from BIR + custom duties from BoC
Impact and Implications

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 Context

EXPECTED INCREASE IN THE IRA OF LGUS

PHP 234.39 BILLION
27.61% MORE, 1.03% OF GDP

PROJECTED IRA IN 2022 % TO GDP (2022)

Before SC Decision PHP 848.44B 3.72%
After SC Decision PHP 1.083T 4.75%

Barangay Municipalities Cities Provinces

20% 34% 23% 23%
IMPACT OF SC RULING

More LGU services

delivered

Greater
demand for Fewer PPAs for
supervision of NGAs
LGUs

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Full Devolution will serve as a measure to mitigate
the fiscal impact of the Mandanas Ruling.
 SETTING THE CONTEXT FOR FULL DEVOLUTION

“
…from our history and from my own experience
as a local government executive, it is proven
that no administration can accelerate the pace
of development of the country unless there is a
substantial or devolution of power from the
central government to the local governments.

SEN. AQUILINO “NENE” PIMENTEL JR.

Father of the Local Government Code
THE CORE OF DECENTRALIZATION AND DEVOLUTION

Section 17 of the Local Government Code (LGC) serves as the

core of decentralization and devolution of powers to the LGUs. It
provides for the basic services and facilities devolved to LGUs.
The Local Government Code Revisited (2011)
 Basic services and facilities devolved to the LGUs include,
but are not limited to the following:

Agricultural Services Health Services Public Works and Infrastructure Telecommunication Services

Tourism Facilities, Promotion, Housing Projects for Investment Support, Industrial Social Welfare Services
and Development Provinces and Research and Development
Cities
 Impact and Implications

IRA and Income Use of 20%

Dependency
•Majority of LGUs will remain
IRA dependent
•Revenue generation activities
must be strengthened/
encouraged
Development Fund
•Source of LGUs contribution
to BUILD, BUILD, BUILD
•Shovel-ready PPAs reflected
in local plans

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 Impact and Implications

Personnel Services NGA- LGU relation

• 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 • For fiscal sustainability, the devolved
opportunity to raise their PS spending. functions must permanently be taken out
from the national agencies to empower the
• The further devolution of functions may LGU to assume them.
require expansion in the organization and
staffing of LGUs as they have to provide the • From “rowing” to “steering”
structure and human resource to undertake
the additional work.
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Updates

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 Updates

DRAFT EXECUTIVE ORDER

Directing the Full Devolution of Certain Functions of the Executive Branch to Local Governments as a Results of the
Supreme Court Ruling on the Mandanas – Garcia Cases

Capacity Development for Institutionalization of Operationalize Performance

Local Government Units Performance Standards Incentives Mechanism

SALIENT FEATURES
 Updates

Salient Provisions of the Draft EO on Full Devolution

Creation of Capacity Strengthening Development Options for Growth

Committee on Building for of Planning, of Affected NGA Equalization
Devolution LGUs Investment Communication Personnel Fund
Programming, Plan and
and Budgeting Strategy
Linkage and
M&E Systems

NGAs to submit to DBM within LGUs to prepare their respective

120 days from effectivity of the transition plans upon finalization of
EO transition plans of NGAs concerned.
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 Updates

ISSUANCE OF DILG MEMORANDUM TO SHARE COPY OF NBM 138 AND PROVIDE INITIAL
GUIDELINES FOR LGUs ON THE PREPARATION FOR THE SC IMPLEMENTATION OF THE
MANDANAS- GARCIA PETITIONS

Guidelines for LGUs:

1. Coordinate and/ or confer with line agencies of government for the delineation of expenditure assignments
and service delivery standards that shall be set across levels of government;
2. Articulate LGU capacity building needs;
3. Determine subsequent implications of LGU assumption of devolved functions and responsibilities on its
organizational structure; and
4. Proceed with caution in the availment of loans.

All LGUs are therefore advised to use the provisions of NBM 138 and the guidelines
enumerated above as they also start preparing their respective budget for FY 2022.

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 Updates

DRAFT GUIDELINES ON THE PREPARATION OF LOCAL GOVERNMENT’S DEVOLUTION

TRANSITION PLANS (DTPs)
The LCE shall oversee the preparation of the LGU DTP. The LCE may create
an ad hoc committee or organize a team responsible for the preparation
of the LGU DTP. The committee or team may include representatives from
key LGU offices that will assume the functions and services to be fully
devolved by the NGAs.

The DTPs of Provincial governments shall include their oversight and

functional support to their component cities and municipalities. Likewise,
DTPs of cities and municipalities shall include thru oversight support to
their component barangays. This is to ensure harmonization and vertical
integration of development requirements across levels of LGUs.

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Updates

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Updates

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Thank you!

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