EO 103: Extending the Devolution Transition Period
Legal question
What is the devolution transition period, and why was it extended again?
Applicable laws and rules to discuss
- Executive Order No. 103, extending the devolution transition period
- Executive Order No. 138 (s. 2021), the original devolution transition framework
- The Mandanas-Garcia Supreme Court ruling and the Local Government Code (RA 7160)
Why this matters
After the Supreme Court's Mandanas-Garcia ruling increased LGUs' share of national taxes, EO 138 set a multi-year transition for national agencies to devolve certain basic services (health, social welfare, agriculture extension, and more) to LGUs, matched by the funding increase. Many LGUs, especially smaller municipalities, needed more time to build capacity to absorb these functions.
The new deadlines
The transition period for full implementation of devolution is extended until FY 2028. The Order sets a split timetable: cities must fully implement the devolved functions and services by no later than FY 2027, while the general deadline runs to FY 2028. It also rewrites EO 138's policy and guiding-principle sections rather than merely moving a date.
A new funding mechanism replaces the GEF
During the transition, a fiscal equalization grant scheme is to be created in lieu of the Growth Equity Fund, to help LGUs deliver a standardized quality of basic services, subject to further study. The amended guiding principles also spell out how functions should be assigned: services with little benefit spillover go to lower-level governments, those involving economies of scale or multiple LGUs go higher, and redistributive functions stay with the national government.
Who this affects
LGU budget officers, national agency regional offices co-managing devolved functions, and civil society groups monitoring devolved health and social services should track the Committee on Devolution's review and the joint DBM-DILG issuances implementing the extended timeline.
Practical discussion points
LGU officials can ask PHLaw.AI what functions are currently devolved versus still nationally administered, and what capacity-building support is available during the extended transition.
Ask PHLaw.AI
Try: "What executive branch functions are being devolved to LGUs under Executive Order No. 138 as extended by EO 103?"