This paper assesses the challenges posed by Executive Order 138 (EO 138) in devolving functions from national government agencies (NGAs) to Local Government Units (LGUs) in the Philippines. Emphasizing the need for a paradigm shift in perceiving LGUs as crucial partners in nation-building, this study presents data-driven evidence of the fiscal inadequacy of LGUs in assuming additional responsibilities. Such inadequacies are reflected in the data pertaining to the average increase due to the Mandana-Garcia Ruling per level of LGU, the increase in spending by LGUs following the downloading of additional funds, and the variation in fund balances across LGUs. Proposing a service delivery-focused approach, this study advocates identifying “universal” services to be delivered by LGUs and “targeted” services based on local needs. A mathematical framework is suggested to determine LGU financial capability, emphasizing the subsidiarity and decentralization principles. This paper calls for the issuance of an Executive Order focusing on this shift in perspective and repealing EO 138, s. 2021, and the formulation of a National Strategic Framework for Local Government Empowerment.
Ralfhee Blake Barrios (Sat,) studied this question.