Republic of the Philippines

Bulacan State University - Graduate School

City of Malolos, Bulacan

Name: Ubaldo, Jeraldo B.

Course and Major: Master of Arts in Education major in Technology and Livelihood Education
Professor: Jaime Pulumbarit, Ph.D.
Activity: Reaction Paper on the Mandanas Ruling
Due Date: June 25, 2021

Introduction

Mandanas Ruling: Full devolution of just share funds

and responsibilities from NG to LGUs

In year 2018, Executive Order No. 138 entitled “Full Devolution of Certain Functions of
the Executive Branch to Local Governments, Creation of a Committee on Devolution, and for
other Purposes” also known as Mandanas-Garcia Ruling by the Supreme Court which has been
confirmed in year 2019 clearly states that the IRA or “Internal Revenue Allotment” are
programmed to increase by 55% in the 2022 budget, reaching 4.8% of the country’s gross
domestic product or Php 1.08 trillion compared to the 3.5% of GDP in 2021. In layman’s term,
there will be an increased of 50% in the budget allocation for each LGUs in the country plus
additional responsibilities from the National Government (NG) to the Local Government Units
(LGUs).
With this EO, if executed correctly, which entitles local governments to a just share of all
national taxes, it can help to improve basic government services like health care, agriculture,
social welfare, and local infrastructure across the Philippines and benefit the faster recovery of
our country from the disturbances of the COVID-19 pandemic. This will also help to faster
address the needs of citizens in terms of basic government services that will be handled by the
LGUs.
As the country starts to implement the Mandanas Ruling in 2022, escalating the share of
national government tax revenue relocated to local governments will address the inequality in
financial resources among LGUs. It will also help to generate more jobs in the rural area but the
importance of cooperation between the national and local governments should be fully smooth.
Because the IRA of LGUs will get bigger, no less than a 50% increase, they will be given
the functions that the national government used to have. This means that LGUs should have
better planning and execution in order to serve more citizens in their jurisdiction. With the help
and guidance of the National Government, the devolution will be successful.
In addition, with the transfer of just share funds and functions from NG to LGUs, section
12 of the EO states that affected personnel from the executive branch have an option of transfer
without reduction in pay in any units/offices within or in other department, may avail separation
incentives and retirement benefits as stated in section 13 of this EO. It only means that affected
personnel due to transfer of responsibility from NG to LGUs will not suffer.
Mandanas ruling will greatly affect the national budget but if executed properly, it will
lead to a better service to the citizens in terms of basic services in each locality. Proper fiscal
management of each LGUs will benefit its citizens and the whole country as a whole.