Philippines: Local Government Finance and Fiscal Decentralization Reform Program

Sovereign Project | 44253-012

Summary

The proposed Local Government Finance and Fiscal Decentralization Reform Program (the Program) aims to improve service delivery in the Philippines by increasing the efficiency and transparency of local governance and financial management systems.

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Project Name Local Government Finance and Fiscal Decentralization Reform Program
Project Number 44253-012
Country Philippines
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8390-PHI: Local Government Finance and Fiscal Decentralization Reform Program
Technical Assistance Special Fund US$ 1.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Knowledge solutions
Sector / Subsector

Public sector management - Decentralization - Public administration

Gender Equity and Mainstreaming Some gender elements
Description The proposed Local Government Finance and Fiscal Decentralization Reform Program (the Program) aims to improve service delivery in the Philippines by increasing the efficiency and transparency of local governance and financial management systems.
Project Rationale and Linkage to Country/Regional Strategy

The proposed Local Government Finance and Fiscal Decentralization Reform Program (the Program) aims to improve service delivery in the Philippines by increasing the efficiency and transparency of local governance and financial management systems. The program stresses the reform linkages between local economic development and transparent and participatory governance. The programmatic approach will provide the flexibility needed to translate structural reforms into measurable policy actions. The proposed program's problem tree is in Appendix 2, while the design and monitoring framework is in Appendix 3.

The proposed project preparatory technical assistance (TA) will provide the required technical and logistical resources to assist the government-led review of the LGC. Considering the interconnected nature of the main elements of the system of intergovernmental fiscal relations, the LGC review needs to include assessments and policy recommendations with respect to the structure of the system, including expenditure and revenue assignments, the system of fiscal transfers and LGU borrowing powers.

The proposed project preparatory TA will promote fiscal sustainability by strengthening local revenue frameworks. It includes support for the (i) assessment of the impact of national tax incentives on local government revenues and economic growth; and (ii) development of a financing framework for LGU alliances that assists joint service delivery. The TA will also contribute to the strengthening of local public financial management systems by assisting the development of financial sustainability procedures for LGUs.

Lastly, the TA will assist the implementation of good local governance procedures by providing (i) assistance for re-engineering the local government performance measurement system to align it with the government seals of good governance system, to improve the reliability of data collected from LGUs, and to improve the analytical value of the reports produced through the system; and (ii) support to capacity development for comprehensive development planning, and in particular harmonization of the different planning processes linked to national and local programs (e.g., the bottom-up budget initiative and comprehensive land use plans).

Impact tbd
Project Outcome
Description of Outcome tbd
Progress Toward Outcome
Implementation Progress
Description of Project Outputs tbd
Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation The review of the Local Government Code under this project has included extensive consultations with civil society organizations, business sector, academe, leagues of local governments and many other stakeholders. Three rounds of regional consultations were held in the last quarter of 2015, and further dissemination of the results of the review is expected in 2015, in particular to the Congress committess and other relevant stakeholders.
Business Opportunities
Consulting Services TA will be provided through a mix of individual consultants and a firm selected through fixed-budget selection, indicatively including 11 person-months of international consultant inputs, and 42 person-months of national consultant inputs.
Responsible ADB Officer Juan Gomez Reino
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SERD
Executing Agencies
Department of Interior and Local Government4th Floor, A. Francisco Gold Condominium
II, EDSA cor. Mapagmahal St.,
Diliman, Quezon City, Philippines
Timetable
Concept Clearance 10 Jun 2013
Fact Finding 18 Apr 2013 to 21 May 2013
MRM -
Approval 10 Jun 2013
Last Review Mission -
Last PDS Update 27 Mar 2015

TA 8390-PHI

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
10 Jun 2013 17 Dec 2013 17 Dec 2013 30 Jun 2015 30 Jun 2016 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,000,000.00 0.00 0.00 0.00 0.00 0.00 1,000,000.00 10 Jun 2013 321,604.01

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Safeguard Documents

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