Resource information
This report reviews two facets of
decentralization currently engaging policy-makers: 1) the
sources of financing under decentralization, and, 2)
cross-cutting processes to strengthen the accountability of
resource use. It does not assess whether decentralization is
justified in the Philippines - it approaches the
arrangements as they exist, and explicitly focuses on
actions that could be feasibly completed within six to nine
months. Administrative actions in two key areas could
improve local government performance in the short term: a)
enhancing LGU - Local Government Unit - ability and capacity
to access resources, and, (b) strengthening key resource
management processes in the first instance, those relating
to planning, budgeting, procurement and financial
management. The report's recommendations stem from five
main issues: raising LGU access to credit by private
financial institutions (PFIs) requires removing bottlenecks
to PFI participation in LGU lending, and rationalizing LGU
grant policies; local government own-source revenues could
be significantly increased through LGU measures to increase
collection of real property tax and business tax, and,
national government actions to assist LGUs; local government
planning and budget management could be made more effective,
transparent and accountable through administrative measures
by local and national governments; actions to embed
transparency and accountability within LGU procurement and
financial management processes, could improve these
processes, promote effective resource use, and strengthen
LGU governance over time; and, the national government
should initiate a review of the institutional arrangements
for generating consensus among stakeholders, on managing the
decentralization process.
