Philippines : Local Government Finance and Fiscal Decentralization Reform Program

Sovereign Project | 44253-012

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 Details

  • Project Officer
    Schuster, Stephen R.
    Southeast Asia Department
    Request for information
  • Country/Economy
  • Modality
  • Sector
    • Public sector management
Project Name Local Government Finance and Fiscal Decentralization Reform Program
Project Number 44253-012
Country / Economy Philippines
Project Status Closed
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 Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Sector / Subsector

Public sector management / Decentralization - Public administration

Gender 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 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).



Project Outcome
Description of Outcome


Progress Toward Outcome
Implementation Progress
Description of Project Outputs


Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nation-wide
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation

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.

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 Schuster, Stephen R.
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SERD
Executing Agencies
Department of Interior and Local Government
Concept Clearance 10 Jun 2013
Fact Finding 18 Apr 2013 to 21 May 2013
Approval 10 Jun 2013
Last Review Mission -
Last PDS Update 02 Apr 2018

TA 8390-PHI

Approval Signing Date Effectivity Date Closing
Original Revised Actual
10 Jun 2013 17 Dec 2013 17 Dec 2013 30 Jun 2015 30 Dec 2017 23 Mar 2018
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 17 Jun 2022 770,249.01

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

None currently available.

Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.

The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.


Tender Title Type Status Posting Date Deadline
Junior Consultant (Project Assistant) Individual - Consulting Closed

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.