National Government may cut workforce in 2022

by Beatrice M. Laforga, BusinessWorld, 3 Feb 2021

DEPARTMENTS under the National Government may have to reduce their workforce when some projects will be devolved to local government units (LGUs) starting next year, the Budget chief said

In a webinar on Tuesday, Budget Secretary Wendel E. Avisado said some agencies at the national level may have to be downsized, merged, or even be abolished as several projects will be devolved to LGUs in 2022 to comply with the Supreme Court (SC) ruling on the Mandanas case.

The Department of Budget and Management is currently drafting an Executive Order (EO) detailing the devolution of certain functions of the Executive Branch to local governments starting in 2022.

Economic managers expect the Supreme Court’s ruling on the Mandanas-Garcia petition to cost the National Government P234.4 billion or equivalent to 0.92% of gross domestic product (GDP) once it takes effect in 2022.

The ruling clarified that the Internal Revenue Allotment (IRA) share of LGUs should be coming from all national taxes collected and not just from the Bureau of Internal Revenue (BIR).

Mr. Avisado said affected agencies will have to reduce their workforce by next year because of the limited budget for the National Government.

“We have proposed an EO on this and it has been submitted to various agencies. And we will be presenting this to the President in light of the Mandanas decision and for the government to look into its current workforce and what should be done, in light of the fact that there’s not much resources going to be available at the national level next year as before,” he said.

The downsizing of the government agencies is part of the Executive Branch’s plan to comply with the SC ruling, Mr. Avisado said. He added it could also boost the local autonomy of LGUs and help with the decentralization efforts.

Mr. Avisado estimated the IRA share of LGUs will increase by 20% on average by next year.

According to the National Budget Memorandum No. 138 dated Jan. 6, some of the functions of the Executive Branch that will be fully devolved to local governments include: agriculture; local infrastructure services such as school buildings and other facilities; environmental services such as forestry, pollution control, and the implementation of small-scale mining laws; modernization of tax collection services; health services like hospitals; inter-municipal telecommunications services; buildings, parks, sports facilities and jails; roads, bridges and drainage systems and industry research and tourism development.

Other projects that could be transferred to the LGUs are low-cost housing projects, irrigation systems, social protection programs and other livelihood programs.

The Development Budget Coordination Committee (DBCC) earlier said it is looking to shift the implementation of various programs, activities and projects worth P404.5 billion to LGUs.

“The government really needs to look into the current personnel structure and organizational structure and the number of workforce needed for the government to continue to operate at the national level,” said Mr. Avisado. —