Catbalogan City: Project-based PPAs for DTP

With the Mandanas Ruling implementation, local government units (LGUs) are expecting additional functions and services that necessitate a corresponding increase in human resources. The Catbalogan City LGU of Samar Province, however, forecasts that because of the COVID-19 pandemic, its national tax allocation (NTA) will decrease starting in the fiscal year 2023. If the LGU will create new positions and hire regular staff, there might be a problem in the future due to personnel service limitations. Under the Local Government Code of 1991 (Republic Act 7160), LGUs are only allowed a maximum of 55% budget for personnel services. If the LGU also hire personnel and terminate them later, the city officials may also be given sanctions for unfair labor practice.

To address this dilemma, the Catbalogan City LGU decided to make its devolution transition plan (DTP) as project-based centric. This will allow the city government to perform its functions and deliver the necessary services without fear of any legal ramifications that may be triggered by the possible decline in NTA come 2023.

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