President Marcos has extended the transition period for the full devolution of certain executive branch roles to local governments until 2028, citing their differing capabilities, circumstances and priorities. Under Executive Order 103 issued on November 6, provinces and municipalities will gradually shift to full devolution by 2028, while cities will fully implement devolved functions by 2027.
President Ferdinand Marcos Jr. issued Executive Order 103 on November 6 to amend Executive Order 138 from 2021, which set the full devolution of functions, services and facilities from the national government to local government units (LGUs) no later than the end of fiscal year 2024. The original order was signed by then President Rodrigo Duterte to support the efficient implementation of the Supreme Court's decision in the Mandanas-Garcia case and strengthen LGU autonomy.
The Supreme Court's ruling in the Mandanas-Garcia case stated that all collections of national taxes, except those accruing to special purpose funds and special allotments for the use and development of national wealth, should be included in the computation of the just share of local governments. The new EO provides more time for LGUs to enhance their financial, technical and administrative capacities to deliver devolved services under the Mandanas-Garcia ruling and the Local Government Code of 1991.
The order acknowledges that devolved functions, services and facilities from the national government may not be fully absorbed or implemented uniformly across all LGUs within the transition period due to "varying financial, technical and administrative capacities of LGUs, along with their unique circumstances, needs and priorities."
"Recognizing the scale and capacity requirements associated with the devolved functions, services and facilities vis-a-vis the differing capabilities of LGUs, it is essential to provide sufficient time for a smooth transition towards full devolution, thereby ensuring the effective and efficient delivery of these functions, services and facilities by LGUs," EO 103 signed by Executive Secretary Lucas Bersamin read.
With full devolution, the national government can assume more strategic and steering functions to address persistent development issues. Priority is given to assisting fourth to fifth income class LGUs and other poor, lagging and disadvantaged ones, particularly in geographically isolated areas and those with high poverty incidence.
All LGUs are covered except those in the Bangsamoro Autonomous Region in Muslim Mindanao. National government agencies are tasked to organize devolution transition committees within 15 days from effectivity, prepare transition plans in consultation with LGUs, and submit them to the Department of Budget and Management within 90 days. This includes crafting a long-term capacity development strategy and a fiscal equalization grant scheme after the transition to help LGUs provide standardized basic services.