President Ferdinand Marcos Jr. recently signed into law a critical measure granting him the authority to reorganize and streamline executive branch agencies over the next five years. This government rightsizing law aims to improve efficiency by reducing redundant positions and saving billions in public funds.
Known as Republic Act No. 12231 or the Government Optimization Act, the law took effect 15 days after its publication on August 19. The four-word keyphrase “government rightsizing law” is central to this reform, which was prioritized by the Legislative-Executive Development Advisory Council and highlighted by President Marcos in his 2022 State of the Nation Address.
Empowering the President for Agency Streamlining
The government rightsizing law empowers the President to strengthen, merge, or abolish agencies and functions considered redundant or misaligned. It also allows the phasing out of programs better handled by the private sector or local government units, while safeguarding civil servants’ welfare.
A newly formed Committee on Optimizing the Executive Branch (COEB), chaired by the Executive Secretary and co-chaired by the Budget Secretary, will recommend agency creations or deactivations. Other members include the secretary of Economy, Planning and Development, Civil Service Commission chair, Anti-Red Tape Authority director-general, and a government employee representative.
Scope and Duration of the Government Rightsizing Law
The law covers all executive branch entities, including departments, bureaus, and government-owned or -controlled corporations not governed by the GOCC Governance Act. However, teaching-related roles and uniformed personnel are exempt. Other branches such as the legislature, judiciary, constitutional commissions, and local government units may opt to optimize their offices voluntarily.
The authority granted to the President under this law lasts five years. Government workers affected by the rightsizing program will receive retirement benefits and separation incentives, ensuring protection during the transition.
Goals and Oversight of the Reform
The government rightsizing law seeks to boost effectiveness, efficiency, equity, and ethical accountability in government operations. It aims to eliminate redundant roles and simplify rules, processes, and systems while maintaining civil servants’ welfare.
A joint congressional oversight committee will monitor and evaluate the law’s implementation. Additionally, the Department of Budget and Management (DBM) will commission an independent impact assessment three years after the program’s completion to measure its results.
Projected Savings and Enhanced Capacity
According to sources, the law will streamline agencies through regularization, mergers, restructuring, abolitions, or transfers. This approach is expected to generate substantial budget savings, which the government plans to allocate to priority sectors such as infrastructure, health, agriculture, and social services.
Furthermore, rightsizing will improve the government’s institutional capacity, enabling better service delivery and more efficient resource use.
Addressing Vacant Positions and Historical Context
Budget Secretary Amenah Pangandaman noted that the rightsizing program addresses the persistent issue of unfilled government positions by fixing and reclassifying roles across agencies. Currently, the executive branch comprises 186 agencies, including 26 departments, 130 attached agencies, and 30 offices under the Office of the President.
Staffing data shows that out of over two million permanent government positions, approximately 8.4 percent remain unfilled. The last rationalization program, conducted from 2004 to 2013, cost the government PHP 6.6 billion in retirement and separation benefits but saved PHP 4.3 billion in personnel expenses. This program resulted in a 20.8 percent reduction in authorized regular positions.
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