Philippines : Local Government Finance and Fiscal Decentralization Reform Program

Public sector management / Decentralization - Public administration

The related Local Government Finance and Fiscal Decentralization Reform Program (the Program) improved service delivery in the Philippines by increasing the efficiency and transparency of local governance and financial management systems. The program stressed the reform linkages between local economic development and transparent and participatory governance. The programmatic approach was utilized to provide needed flexibility to translate structural reforms into measurable policy actions.

This project preparatory technical assistance (TA) provided 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 included 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. Specifically, the TA promoted fiscal sustainability by strengthening local revenue frameworks. It funded (i) an assessment of the impact of national tax incentives on local government revenues and economic growth; and (ii) the development of a financing framework for LGU alliances that assists joint service delivery. The TA also contributed to the strengthening of local public financial management systems by assisting the development of financial sustainability procedures for LGUs. Lastly, the TA assisted with 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 which improved the reliability of data collected from LGUs, as well as 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).

tbd

tbd

tbd

The TA closed in 30 December 2017. Total disbursed amount is $770,249 as of 2 Apr 2018. CTL have been requested to close the TA account after all pending payments to suppliers forwarded for processing have been processed.

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. The three rounds of regional consultations held in the last quarter of 2014 (in Cebu, Davao, and Manila) were attended by around 400 LGU chief executives, local council members, and other local officials. Further dissemination of the results of the review is expected in 2015, in particular to the Congress committess and other relevant stakeholders. The private sector stakeholders who were consulted as part of the current effort to review the LGC include representatives from the Philippine Chamber of Commerce and Industry, Filipino Chinese Chamber of Commerce, Joint Foreign Chamber of Commerce of the Philippines, Makati Business Club, National Competitiveness Council, Bankers Association of the Philippines, Tax Management Association of the Philippines, and the BPO sector.

In addition, the Local Governance Performance Management Systems (LGPMS) has been upgraded. The primary objective of this upgrade is to produce all the performance information required by the Seal of Good Local Governance (SGLG) as basis for granting the annual award to best performing local government units (LGUs) throughout the country. Workshops were conducted to raise awareness and to increase the level of understanding of the DILG-BLGS staff on best practices, or essential elements, of an effective LGPMS. Additional workshops were conducted to confirm the validity of the assessment findings of the review of the proposed enhanced LGPMS framework and performance measures.

The TA closing date was extended to 30 December 2017 to provide time to complete the ongoing activities under the TA. First, a firm has been engaged to develop an e-learning system to disseminate the harmonized planning and budgeting systems to the local government units. In addition, a nationwide consultation for the review of the local government code is scheduled in October 2017. Findings of this national consultation will then be presented to the concerned government office as well as congress.