LGFI POLICY WATCH NO. 2| July 2026 

Executive Order No. 103, s. 2025: Strengthening LGU Capacities Towards Full Devolution 

The Office of the President has issued Executive Order No. 103, s. 2025, amending Executive Order No. 138, s. 2021 to extend the transition period for the full implementation of the devolution of certain functions of the Executive Branch to Local Government Units (LGUs) until Fiscal Year 2028. More importantly, the issuance reinforces the Government’s commitment to ensuring that LGUs are adequately prepared to fully assume their devolved functions and responsibilities under the Local Government Code of 1991 (Republic Act No. 7160). 

The Executive Order recognizes that fiscal decentralization goes beyond increasing the National Tax Allotment (NTA). It requires LGUs to continuously strengthen their institutional, technical, administrative, and financial capacities to effectively deliver the basic services and facilities entrusted to them under the Local Government Code. 

Recognizing this, EO No. 103 directs several National Government Agencies to continue and intensify their capacity development initiatives in support of LGUs. These include, among others: 

  • Department of the Interior and Local Government (DILG) – strengthening local governance and institutional development; 
  • Department of Budget and Management (DBM) – enhancing local planning, budgeting, expenditure management, and public financial management; 
  • Department of Finance (DOF), through the Bureau of Local Government Finance (BLGF) – building capacities on local revenue generation, resource mobilization, treasury, assessment, and fiscal sustainability; 
  • National Economic and Development Authority (now Department of Economy, Planning, and Development or DepDev) – supporting local development planning and policy alignment; and 
  • Other National Government Agencies that continue to provide technical assistance within their respective sectors to ensure the successful implementation of devolution. 

📄 A copy of Executive Order No. 103, s. 2025 is available through this post. We encourage all LGU officials and personnel to read about the issuance and better understand its implications for local governance, fiscal management, and institutional development. 

E.O No. 103 – https://www.officialgazette.gov.ph/downloads/2025/10oct/20251106-EO-103-FRM.pdf 

 

 

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