Republic of the Philippines

City of Taguig

TAGUIG CITY UNIVERSITY

Gen. Santos Avenue, Central Bicutan, Taguig City

COURSE CONTENT
IN PA 8:
LOCAL AND REGIONAL
ADMINISTRATION

Submitted by:

DIEGO R. RELATADO III

17-00391-t
Bachelor in Public Administration

Submitted to:

PROF. FROILAN MURAO

Department of Public Administration
College of Arts and Sciences
 LOCAL
GOVERNMENT
UNDER A
DECENTRALIZED
STATE: THE CASE
OF PHILIPPINES
INTRODUCTION

The Philippines has a long history of centralism. From the colonial Spanish
regime to the recent Marcos era, the country has had a strong national government
whose powers were concentrated at the centre. Attempts to decentralize powers proved
futile during those times.
In 1986, the Aquino government adopted decentralization as the development
framework of the national government. To attain more quickly its envisioned
developmental goals and objectives, the Government decided to transfer power,
functions and responsibilities from central government to the sub-national level. In 1991,
therefore, the Local Government Code was passed by Congress. This potentially
revolutionary piece of legislation altered power relationships between the national
government and the local governments. Some basic services and functions that were
traditionally delivered and performed by the central government were transferred to
local government and it was given the power to appoint the personnel involved in the
delivery of these services. Local government was also given additional local taxation
powers and allocated a significant share from the collection of nationally imposed taxes,
to be able to maintain and sustain the delivery of such services.
Due to these devolved powers and authority, local government in the Philippines
was further given wide latitude to make vital decisions in governing their local
communities. They were enabled, and expected, to assume new and wider roles in local
governance through innovation and changes in the local structures, though with limited
resources. Most of all, they were expected to organize more intervention in the local
economy to bring about more economic development activities in the com- munity.
Within this changing context, this article will present and discuss the evolving role of
local government in the Philippines.

THE CHANGING ROLE OF LOCAL GOVERNMENT

In a highly competitive and fast-changing environment, local government in the

Philippines is challenged to search for alternatives or ways to effectively respond to the
demands and needs of the community which it serves. To be able to meet such
challenges, it becomes imperative for it to re-examine and redefine its role in light of
community interests, needs and demands. In this context, the enabling model of local
government is highly relevant.
Clark and Stewart (1994: 235; see also Osborne and Gaebler 1992) define this
enabling model in terms of ‘strengthening the capacity for self-governance within a local
community, using whatever resources and channels (internal or external) seem most
appropriate’. This definition implies that local government has to start from identifying
the needs of the community and to use its powers to meet the identified needs. This
further implies that given a range of powers and authority, local government is able to
seek ways of delivering services, to organize interventions to the local economy thereby
stimulating more economic activities in the local area and to provide the necessary
framework for more private sector participation in local developmental activities.Leach
et al. (1994) have suggested four models of such enabling authorities. These are the
traditional bureaucratic authority, the residual enabling authority, the market-oriented
enabling authority and the community-oriented enabling authority. The traditional
bureau- cratic authority emphasizes strongly the role of local government as service
provider rather than as a mechanism for community governance. This role is limited by
a low level of financial and policy autonomy. The residual enabling authority is
responsible for providing a limited set of services that cannot be delivered through the
private market or through some other mechanisms such as public corporations or
agencies. In other words, the local authority only provides those services that cannot be
provided by the market.

The primacy of the external market is also seen in the market-oriented enabler.
However, this type of enabling authority plays a more active and much stronger role in
relation to the economic development of the community. The local authority provides the
lead role in planning and co-ordinating local economic development. It provides
mechanisms and incentives to pave the way for more economic activities in the
community. In this regard, the local authority places emphasis on a long-term planning
approach to infrastructure development, which provides the necessary framework for
the effective operation of the local economy. Finally, the community- oriented enabler
views the role of local authority as that of responding and meeting the needs of the
populace through various means. What is emphasized here is the existence of
participative mechanisms whereby the citizens can play an active role in local decision-
making processes.

The above models of enabling authority suggest that local government can have
a significant degree of choice as to which direction it has to take. However, the adoption
of the market-oriented and community-oriented models presupposes a strong role for
local government. This implies that there is difficulty in moving towards the direction of a
market-oriented enabler or a community-oriented enabler if the local government is
weak, if it has either a limited range of functions/responsibilities or a low level of
autonomy in terms of finance and decision making and if a high degree of external
control is exercised by central government or authority.

Based on these models, the pre-existing role of Philippine local government is

that of the traditional bureaucratic enabling authority. It has a strong public sector
orientation and places emphasis on the delivery of goods and services. But this delivery
role is hampered by its limited range of functions and responsibilities as well as by its
limited powers and authority in terms of finance and local decision-making processes.
However, the new Local Government Code has provided for a stronger role of local
government. The devolved powers and authority have provided local government, in
theory, with a significant degree of choice in moving towards the direction of market-
oriented and community-oriented enabling authority. The reality of this move will be
explored here.
THE LEGAL FRAMEWORK FOR THE CHANGING ROLE OF LOCAL GOVERNMENT

To make local government more self-reliant, four areas of authority have been devolved
to them.

Devolution of services/functions

The Code has provided for the transfer from central government to the Local Govern-
ment Units (LGUs) of local services and functions such as agriculture, health, social
services, maintenance of public works and highways and environmental management
and protection. It has also provided for the transfer of field personnel to the LGUs who,
prior to the passage of the Code, were national government employees.

Appointment of local officials

The chief executives of local government are now empowered to appoint local officials
paid wholly or mainly from local funds. Before the implementation of the Code, the local
treasurer, assessor and budget officers, responsible for the financial planning and
management of the LGU operations, were national government appointees. The
assessor and the budget officers are now LGU appointees.

Financial matters

A significant provision pertains to the increased share for local governments of the
Internal Revenue Allotment (IRA). This has increased to 40 per cent from 20 per cent.
The rationale for this is to enable the LGUs to maintain and sustain the devolved
functions and services. LGUs are also empowered by the Code to contract loans with
financial institutions and to issue bonds to finance the construction and the imple-
mentation of projects.

People participation in governance

The Code has mandated the representation of non-governmental organizations

accredited by the LGU in local special bodies such as the local development council
and the local school and health boards. It has also provided for joint ventures and other
co-operative mechanisms between the LGU and the private sector in programmes or
projects concerned with the delivery of basic services, capability building, livelihood
projects and the development of local enterprises designed to improve productivity and
income. This is a significant structural change in the governance of communities.

EXTENT OF IMPLEMENTATION OF THE CODE

The study on the implementation of the Local Government Code conducted by the Local
Government Centre of the University of the Philippines (Legaspi 1995; Legaspi and
Santiago 1998) reveals that most of the LGUs covered by the research have not
implemented these significant provisions. This finding is validated by the results of the
further ongoing research conducted by the Associates in Rural Development, Inc. (ARD
1998/1999).

Devolution of services/functions

Most of the LGUs have indeed absorbed and implemented the devolved
services/ functions. However, this implementation has been mediated by the
development agenda of each LGU and by the perceived relevance of the service or
function to the existing community problems and needs. For instance, services or
functions relative to population and environmental management have been
implemented by some LGUs but not others – because these are not considered priority
concerns.
Some LGUs, particularly the lower income classes of municipalities, cannot fully
implement some services because of lack of financial resources to maintain and sustain
them. The ratio of the cost of maintaining and sustaining the devolved services to the
total IRA shares of LGUs ranges from 25 per cent to 68 per cent among the
municipalities (Legaspi 1995). Considering that there are other functions that have to be
performed by LGUs besides the devolved ones, this would mean a reduction in the
proportionate share income allocated to other economic development projects.

Appointment of local officials

Although the Code has provided for mandatory positions which have to be appointed by
the local chief executives, a number of them had not been appointed, such as the
positions of municipal accountant, engineer and planning and development co-
ordinator. However, other officials had been appointed to optional positions, such as the
environment and natural resources officer and co-operatives officer. The study noted
that the appointment of officials to mandatory and optional positions seems to depend
on the perceived need of the LGU for the position and the ability of the LGUs to recruit
qualified and competent personnel. There is a dearth of technically competent people at
the municipal level that undermines this development (Padilla 1992; Tapales et al.
1996).

Financial matters

The study has shown that the annual income of the sample LGUs has increased,
primarily due to their increased IRA shares. However, their annual expenditures have
also grown due to the cost of devolved services or functions. As such, a number of the
LGUs have incurred deficits in their financial operations (Legaspi 1995; Legaspi and
Santiago 1998). This suggests that the LGUs could not depend entirely on their local
taxes and fees as well as on their IRA shares from the national government. They have
to resort to other mechanisms to be able to generate financial resources for the
prosecution of economic development projects.

In the case of partnerships with the private sector, many LGUs that are rural based
have not forged agreements with the private sector because many companies are not
interested in such projects, due to the expected low rate of return of investments. Many
LGUs have also not contracted loans from financial institutions to finance the
construction of infrastructure facilities because their requirements are too stringent. One
requirement is the putting up of an equity equivalent to 15 per cent of the total loan
(Legaspi 1996). For a small municipality that has an annual income of about P10M, it
cannot afford a loan of about P20M to construct a public market. Finally, the issue of
bonds, considered to be an innovative approach, has not been tried by many LGUs.
Only a few are bold enough to experiment with such an approach.

The extent of people participation

This has been equated with NGO participation. Some LGUs have accredited a number
of NGOs and have given them memberships in the Local Development Council and
other local bodies. However, in some LGUs, the accreditation process has been made
difficult due to the imposition of stiff auditing requirements by national agencies (such
the Security and Exchange Commission). As a consequence, many NGOs have lost
interest in seeking local accreditation.

Moreover, local chief executives are wary of NGO participation in local bodies because
many leaders of NGOs in their areas were their former political opponents. Thus, the
intentions/purposes of NGO participation in local governance is subject to suspicion.
Finally, although a number of NGOs have been accredited and have representatives in
local bodies, little else has happened. No meaningful activities/plans have taken place
after conducting initial meetings.
PARTICIPATION IN
THE LOCAL LEVEL
ISSUE AND
CONCERN ABOUT
LOCAL
GOVERNMENT IN
THE PHILIPPINES
Decentralization was seen as a major mechanism that would hasten the process of
democratization and development. In fact, former President Ramos referred to the five
Ds of decentralization as deregulation, devolution, decentralization, democratization,
and development. Hence, among the fundamental attributes of decentralization is its
direct contribution to good governance by providing the context for citizen participation
in governance and bringing the Government closer to the ninety Million people, making
institutions more accountable and transparent. Based on experience over the past
decade, the following are among the major decentralization issues and concerns that
must be addressed.

Issue One. Lack of financial decentralization. During the years immediately after the
enactment of the 1991 Local Government Code, close to 65,000 personnel were
devolved. The transfer of personnel to LGUs mandated them to pay their salaries.

(i) Support the amendments to the 1992 Local Government Code that will increase IRA
shares of LGUs to enable them to cover the costs of devolved functions. Additionally,
this means looking into various modalities of restructuring the IRA sharing formula;
modifying the traditional land area-population equal sharing formula; and including other
variables, such as a poverty index, to enable more focused targeting of the transfers to
LGUs that need the money more.

(ii) Continue exploring options to generate alternative sources of revenue to finance

local development. These may range from BOT options to joint ventures with the private
sector to floating bonds. Examples of other LGUs that were successful should be
studied and lessons learned extracted.62

Issue Two. Because of the massive devolution of powers to local governments, capacity
building should be a high priority in the agenda for local governance.

(i) Training program designs for LGUs should be made with their participation. This
means that they should be intensively consulted about their training needs.

Issue Three. LGUs have become more assertive and effective in articulating their
concerns over the past 10 years. They have successfully organized themselves into
leagues at various levels, under umbrella organizations, such as the Union of Local
Authorities of the Philippines.

(i) Institutionalize and strengthen the capacities of the leagues at various levels. This
means studying various options of professionalized league staff members, looking into
the possibility of having full-time staff members paid for by LGUs, and guaranteeing the
tenure of staff members to survive regime and political changes.

(ii) Strengthen the policy analysis capabilities of league staff members, to enable them
to respond to problem-oriented issues and concerns. When the member LGUs see the
value of leagues in providing needed information and technical assistance, financial
support from LGUs in paying regular dues will follow.

Issue Four. LGUs in the Philippines have recognized the value of interlocal cooperation
and collaboration, as provided for in the code. Many have recognized that challenges
met at the local level can be met only if they cooperate or collaborate with LGUs next to
them.

(i) Encourage LGUs to enter collaborative arrangements with neighboring localities to

discuss a common purpose, such as those already mentioned. Again, this can be done
by studying and examining the experiences of others

Issue Five. LGUs have begun to increasingly enter into partnerships and collaboration
with civil society. Largely because of the code, the context for local government, civil
society, private sector, and NGO partnerships has been laid out. Examples of
successful partnerships abound, making the Philippines a leading model in government-
civil society collaboration. It is within this context that many have referred to the
Philippine experience as one that has redefined governance at the local level. The
following are some of the action points that can be considered.

(i) Governments should make efforts to work in close partnership with civil society
through their coalitions and name programs and projects that can be conducted
together. This can also include giving the responsibility to check and test the
implementation of projects to civil society.

Issue Six. The field of governance in general and local governance in particular is an
area that

has generated high interest among international development agencies operating in the
Philippines.

(i) Local governance initiatives in the country should be supported by continuing to

harness the support of international institutions. Thus, a master plan for parceling out
various aspects of capacity building for local governance may be formulated. This will
enable development partners to buy into certain aspects of the plan, minimizing overlap
in the work of other development agencies. This will also urge closer cooperation,
coordination, and complementarity among various initiatives of these international
institutions.

(ii) Regular meetings similar to the development agency forum convened in the early
1990s are good venues for linking and networking.

Issue Seven. Awards programs have been instruments in successfully disseminating

and encouraging good and best practices at the local level.
Issue Eight. Urbanization is development that should be increasingly addressed at the
local level. Estimates indicate that over 50% of the Philippine population will have lived
in urban areas by 2002. Thus, the problems of urbanization, including pollution, traffic,
and environment degradation, will have to be confronted. It must be noted though, that
consultations with LGUs have shown relatively high environmental consciousness
among them. The action points that may be considered are the following.

(i) Prepare LGUs to address increasing challenges brought about by rapid urbanization.

(ii) Examine and learn from the experiences (successes and failures) of other LGUs as
they confronted problems brought about by urbanization, including environment
degradation, pollution, congestion, and others.

Issue Nine. Globalization issues and concerns are being increasingly addressed by
LGUs. Many LGUs in the Philippines participated in international forums and were
invited to present their initiatives and innovations and have adopted the relevant
paradigm of thinking globally yet acting locally. Autonomy is processes and cannot be
fast tracked.
BEST PRACTICES
WITH AND ACROSS
LOCAL
GOVERNMENT IN
THE PHILIPPINES
BACKGROUND

In the area of of good governance, replication of good practices has been considered as
an effective strategy. It helps facilitate achieving LGU's goal of improving the delivery of
basic services as mandated by law as well as in meeting the Millenium Development
Goals (MDG), other international declarations and national directives.
The concept of replication has been adopted through the "Good Practives in Local
Governance: Facilty for Adoption and Replication" (GO-FAR) Project of DILG. It
establishes doable strategies and mechanisms that will help LGUs undertake the whole
scope of the replication process. However, sustainability of the replication process
depends greatly on the wealth of information or database on good practices available
for other interested LGUs. Emerging trends show that there are a number of LGUs that
have good practices that are good materials for replication. There is a need, therefore,
to assist enhance the capacities of these potential/model LGUs in story writing their
innovative programs/projects to supplement government's effort of institutionalizing
knowledge management and promotion of good practices for replication purposes.

One major component of the replication process under GO-FAR is documenting the
good practice. Replication can not proceed unless the good practice is well
documented. The Reference Document which is the product of documentation serves
as the basis in the preparation of the Facilitators' Guide and Generic Agenda in the
conduct of Replication Inception Workshop (a structured peer-to-peer learning process).
The reference document is very vital in the replication process as this will help the
replicating LGU understand how the project was implemented.

The conceptualization of the project "Good Practices in Local Governance: Facility for
Adaptation and Replication" (GO-FAR) is premised on the fact that there are local
innovations that are worth replicating.

WHAT IS GO-FAR?

GO-FAR is a facility designed to assist LGU's in building their capacities by providing

them the opportunity to improve local governance along the areas of development
planning, fiscal administration, accountability and service delivery through replicating
good practices that are participatory, innovative and sustainable.
GO-FAR is the first project of the DILG that serves as an intervention mechanism of the
DILG in its support to the government effort in institutionalizing good local governance
specifically in trying to address priority Local Millennium Development Goals (MDGs)
and identified local governance performance condition. Basically, it deals more on the
strategies in facilitating the actual exercise of the transfer of technology of specific good
practice where interested LGUs would want to replicate, manage knowledge and funds
for sustainable technical assistance.
 GOALS AND OBJECTIVES OF GO-FAR

The end goal of the project GO-FAR is to institutionalize nationwide the sharing and
replication of sustainable good practices in local governance to enable LGUs improve
their delivery of basic services to their constituencies.

Generally, it is designed to assist the local government units institutionalize the

replication of good practices as an avenue in achieving excellence in local governance.
Specifically, it aims to:

 Advocate the importance of replicating good practices to enable LGUs better serve their
constituencies;
 Manage knowledge on good practices to be able to sustain the provision of technical
assistance to the LGUs;
 Establish a revolving fund facility for the LGUs to access purposely for the replication of
good practices; and
 Strengthen institutional partnerships between and among the model LGUs, recipient
LGUs, institutions, academe, concerned agencies and the Civil Society Organizations
for sustained and effective replication of good practices.

1. Bindoy, Negros Oriental - Ridge to Reef (R2R) Program

2. Cagayan de Oro City - “No Vote, Ibot” No More: Ending the Political Bondage in
Resettlement Areas by Providing Security of Tenure

3. Del Carmen, Surigao del Norte - Siargao It Up! Mangrove Management and Social
Tourism Program

4. Iloilo City - Iloilo-Batiano River Development Project

5. Loboc, Bohol - Reviving the Musical Tradition and Heritage by Empowering People
through the Loboc Music Program

6. Naga City - Barangay eSkwela and Barangay Literacy Worker Program

7. Navotas City - ACHIEVE: Accessible, Holistic and Inclusive Education

8. San Nicolas, Ilocos Norte - Preserving Local Cultural Heritage

9. Tagum City, Davao del Norte - Tagumpay Works Program

10. Valenzuela City - Tayo Na Mapayapang Valenzuela: Tuloy-tuloy ang Asenso! The
Valenzuela City Comprehensive Safety and Security Program