- Key Facts
- Board of Governors
- Board of Directors
- Departments and Offices
- Policies and Strategies
- Annual Meetings
- Independent Evaluation
- Public Sector (Sovereign) Financing
- Private Sector (Nonsovereign) Financing
- Funds and Resources
- Asian Development Fund
- ASEAN Infrastructure Fund
- Investor Information[日本語]
- Business Opportunities
- Consulting Services
- ADB-Japan Scholarship Program
- News & Events
- Data & Research
- Industry and Trade
- Information and Communication Technology
- Public Sector Management
- Social Protection
- Capacity Development
- Climate Change
- Environmental Sustainability
- Gender and Development
- Poverty Reduction
- Private Sector Development
- Regional Cooperation and Integration
- Social Development
- Urban Development
- Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA)
- Central Asia Regional Economic Cooperation (CAREC)
- Greater Mekong Subregion (GMS)
- Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT)
- South Asia Subregional Economic Cooperation (SASEC)
- European Representative Office
- Japanese Representative Office [日本語]
- North American Representative Office
- Pacific Liaison and Coordination Office
- Pacific Subregional Office
Countries with Operations
- China, People's Republic of [中文]
- Cook Islands
- Indonesia [Bahasa Indonesia]
- Kyrgyz Republic
- Lao PDR
- Marshall Islands
- Micronesia, Federated States of
- Papua New Guinea
ADB to Assist Review of Philippines' Local Government Code
Reforms should help raise municipal revenues, which should in turn help local governments to improve the provision of basic services.
MANILA, PHILIPPINES – For the first time since its enactment in 1991, the Philippines’ Local Government Code will undergo a government-led, comprehensive review designed to boost municipal revenues streams for the provision of better basic services and to assist local economic development and job creation.
The review is the centerpiece of a $250 million loan approved today by the Board of Directors of the Asian Development Bank (ADB) in support of local government finance and fiscal decentralization reforms in Philippines.
“The Philippines has taken significant steps to improve the financing system of Local Government Units (LGUs) and to foster transparent and accountable local governance practices. Reforms should help raise revenues and therefore improve services,” said Juan Luis Gomez, Senior Public Management Specialist at the ADB’s Southeast Asia Department.
Despite these efforts, weak local tax bases and flaws in the design of transfers make it hard for poorer local governments to deliver the services their constituencies require. As a result, regional disparities in living standards remain wide. This could be efficiently addressed with a review of the Local Government Code.
LGUs represent close to 17% of total government expenditures and play a critical role in the provision of basic services like health, education, or housing and community development. The reforms include performance-based mechanisms such as the Performance Challenge Fund, which ties greater access to funding to performance, and the “Bottom-up-Budget,” which can improve budget transparency and alignment of national and local development priorities.
Program reforms will also continue implementation of accountability mechanisms, such as the Full Disclosure Policy or the Citizen’s Satisfaction Index. Lastly, the program supports the government’s efforts to improve local financial management systems.
The reform program will receive parallel cofinancing of $150 million from the Agence Française de Developpement.