Déjà vu on devolution

It feels like 1992 all over again. Back then, the Local Government Code (LGC) of 1991 (Republic Act 7160) had just become law, and its implementation “shook the bureaucracy to the core,” as former Local Government Academy chief Dr. Alex Brillantes Jr. described it in a recent forum. Now, he sees the impending implementation of the Supreme Court ruling that made the name of Batangas Governor Dodo Mandanas a household word once again shaking the bureaucracy to the core.

The LGC was meant to move us away from an overly centralized, top-down mode of governance to one where local government units (LGUs) take responsibility in addressing problems they are best placed to solve. Brillantes recalls how even the regulation of tricycles was done by the national government, but the LGC put it, along with other similar regulatory functions, where it rightly belongs. On balance, it was a positive reform that promoted strong leadership at the local level, improved LGUs’ access to financial resources, spurred stronger inter-local government partnerships, and widened the participation and engagement of civil society institutions.

But there were drawbacks. The responsibilities to be offloaded to the LGUs proved far more than the incremental funds from the internal revenue allotments (IRA) could support. The LGUs’ capacities to take on devolved mandates in health, agriculture, social welfare, and environmental services, among others, were weak or non-existent. Allocation of the IRA across various levels of LGUs was lopsided in favor of cities, especially in Metro Manila, spurring a mad rush for cityhood, now numbering 144 from only 60 pre-LGC. Need or performance was not a basis for allocation, leading to perceived inequities that worsened gaps across LGUs. Corporate and tax powers of LGUs were also seen to be unclear and inadequate, leading to their overdependence on the IRA, as against locally generated revenues.

One can expect that these flaws would have triggered major amendments on the law in nearly three decades of its implementation. Yet that has not happened. Not that no one tried. But for one reason or another, our lawmakers decided to keep the LGC intact, even as it became unresponsive to changing demands.

Then came Governor Mandanas (a congressman at the time), who in 2012 questioned the basis for calculation of the amount of the aggregate IRA before the Supreme Court—and won. In effect, the so-called “Mandanas ruling” has compelled the national government to dramatically increase the amount of IRA going to the LGUs. Estimates by the Department of Finance reportedly place the increment at some P234 billion, raising it to P1.08 from what would have been just P848 billion. The additional “windfall” from the national government to the LGUs has raised all sorts of expectations among the latter, and great apprehensions in the former—in a seeming repeat of 1992.

In a recent discussion among members of the Galing Pook Foundation—which has sought out and awarded good practices among LGUs since the early 1990s—several key concerns were raised. For one, given that the earlier LGC implementation failed to download enough funds to the LGUs to fulfill all the functions also downloaded to them then (“unfunded mandates”), the so-called windfall is really no windfall at all but merely a correction. And yet many seem to be of the notion that LGUs can now do even so much more, to the point that national government agencies (NGAs) are threatening to offload even more substantial work and staff to them than they could realistically handle.

The reality is that notwithstanding the LGC, NGAs persisted in a centralized, top-down mode of management, and continued with national programs and procurements that force-fed template solutions to address widely divergent requirements. Rather than take matters into their own hands, now is the time for them to truly work with, and work through, the provincial LGUs, who can in turn coordinate the lower levels of governance. Meanwhile, the reduced budgets of the NGAs are best spent for steering, and especially for capacitating, provincial LGUs to do their job. LGUs should finally be allowed to do the rowing.

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