374 Public Administration in Southeast Asia
There are three major areas that need to be strengthened in order to make fiscal decentralization work better. First, the fiscal structure of the national government should pursue fiscal discipline or spending within our means, optimal and appropriate revenue assignments and expenditure responsibilities between central and sub-national government levels, and a good intergovernmental fiscal transfers system. Second, political institutions and the larger political system of the country where decentralization operates should be considered in establishing systems of accountability. The behavior of national and sub-national officials affects the utilization of fiscal resources for developmental functions—which jeopardizes the desired development goals and policy objectives. Third, fiscal decentralization policy should be able to promote market-preserving local institutions and the development of an optimal economic system both at the national and sub-national levels. There has to be mutual reinforcements between the markets and the fiscal decentralization policy, thereby enhancing the performance of the private and public sectors (Tiu Sonco 2008).
It is within this context that the following may be considered for further research: (1) establish measures on the impact of decentralization vis-à-vis various performance indicators including economic development, fiscal effects, distribution and poverty reduction, service delivery and revenue generation, and governance; (2) given the existing revenue assignments, LGUs should be able to approximate or estimate their revenue earning capacity; (3) mapping and policy options on the appropriate intergovernmental fiscal transfers in the Philippines; and (4) attaining a market preserving fiscal decentralization policy and operationalizing inclusive growth at the local government level.
18.5 Conclusions and the Way Forward
Indeed, decentralization is like a double-edged sword: when correctly implemented and given the proper policy and capacity mix at the national and sub-national levels, it has the potential to be a very powerful tool to effect good governance and a potent poverty reduction strategy; however, if not used properly, it can exacerbate inequalities across local governments and regions, and even lead to fragmentation of the state (Brillantes 2004).13
On the one hand, there are perceived policy design flaws of the LGC. On the other hand, its implementation has shown progress and desirable results. Policy change and continuing capacity building are necessary to strengthen and deepen decentralization.
Partisan politics has affected the implementation process of the decentralization policy in the Philippines. For instance, the strong familial ties and strong political clans of the Filipinos threaten the degree of democratization, electoral participation, and political accountability at the local government level.
Strengthening the local bureaucracy would go beyond the competences of LCEs. It is one area that has been left on the back burner; but, if appropriately addressed, it would create significant and long-term gains in making local governments become responsive and accountable institutions. Professionalizing the local bureaucracy requires establishing the competency needs of civil servants at the local level, their career path and development in the local bureaucracy.
13Brillantes’, Innovations and Excellence in Local Governance and other papers articulate the gains of the Code. The Center for Local and Regional Governance (CLRG) and Center for Policy and Executive Development (CPED) of UP-NCPAG likewise continue to build the capacities of local governments to attain better governance, development results, and local fiscal sustainability in the Philippines, among other things; it has likewise been documenting some best and leading practices on local governance for replication by others—inside and outside the Philippines.
©2011 by Taylor and Francis Group, LLC
Decentralization and Local Governance in the Philippines 375
In developing countries, central governments still hold a greater capacity to raise revenue and equitably redistribute the countries fiscal resource. In the Philippines, efforts to improve the capacities of local government to attain fiscal sustainability—updating of real property values and revenue codes, computerization, and other innovations—should be coupled with a new policy design of the intergovernmental fiscal transfers system that promotes distribution equity and offers incentives for revenue collection efficiency, and avoid dependency of LGUs on the IRA.
The many issues and challenges noted above certainly require attention by decentralization advocates and stakeholders in the Philippines. A comprehensive capacity building program would respond to capacity problems of the central and local governments in decentralization. Key institutions should be able to prioritize policy decisions and the issuance of the appropriate policy instruments. Should policy change be warranted, i.e., amendment to the LGC of 1991, oversight agencies may have to step up their involvement and pursue a common policy agenda. A policy design team from within the executive department with support from serious policy studies and the academe would be able to pursue and shepherd the political process of policy change. Perhaps it can reconcile and balance the competing interests of the various stakeholders, including the leagues of local governments, interest groups from the civil society, central and local government officials, and the legislators.
The process of decentralization in the Philippines has been a long and arduous task. There have been many victories and there have been many challenges as well. One thing is sure, decentralization is an irreversible process and it is here to stay.
References
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Balisacan, A. and Hill, H. (eds). Dynamics of Regional Development: The Philippines in East Asia. Great Britain: Edward Elgar, 2007.
Brillantes, A. “Decentralized Democratic Governance Under the Local Government Code: A Governmental Perspective.” Philippine Journal of Public Administration (Vol. No. 42, I and II), 1998: 38–57.
———.Innovations and Excellence in Local Governance: Undestanding Local Governments in the Philippines.
Quezon City: UP National College of Public Administration and Governance, 2003.
———.Decentralization Imperatives: Lessons from Some Asian Countries. GSICS Working Paper Series, Kobe: Graduate School of International Cooperation Studies, Kobe University, 2004.
Brillantes, A, and Moscare, D. “Decentralization and Federalism in the Philippines: Lessons from Global Community.” Discussion Paper presented at the International Conference of the East Weste Center, Kuala Lumpur, 2002.
Brillantes, A, Llanto, G., Alm, J. and Sosmena, G. An In-Depth and Comprehensive Study on Decentralization.
Commissioned Study by the Department of the Interior and Local Government and the Asian Development Bank, Quezon City: Forthcoming, 2009.
Brillantes, A., Remigio, O. and Tumanut, M. Devolved Agricultural Extension Services in the Philippines: Trials and Triumphs. Quezon City: Center for Local and Regional Governance, 2007.
Capuno, J., Garcia, M. Sardalla, J. and Villamil, L. “The Development Payoff of Good Governance: Emerging Results of a Social Experiment in Two Philippine Provinces.” International Society for Third-Sector Research. http://www.istr.org/conferences/capetown/volume/capuno.pdf (accessed February 20, 2009).
Capuno, J.J. and Garca, M.M. “Can information about local government performance induce civic participation? Evidence from the Philippines.” UP School of Economics Discussion Papers, 2008: 36.
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de Dios, E. “Local Politics and Local Economy.” In The Dynamics of Regional Development: The Philippines in East Asia, by Balisacan, A. and Hill, H. (eds), 157–203. Cheltenham: Edward Elgar, 2007.
Diokno, B. “Decentralization in the Philippines After Ten Years: What Have We Learned? What have I learned?” U.P. School of Economics Discussion Paper No. 2003–08, University of the Philippines, Quezon, 2003.
———. “Economic and Fiscal Policy Determinants of Public Deficit: The Philippine Case.” U.P. School of Economics Discussion Paper No. 2007-02, University of the Philippines, Quezon, 2007.
Fritzen, S. and Ong, P. “Decentralization in Developing Countries.” In Encyclopedia of Public Administration and Public Policy, Second Edition, by Rabin J. and Aaron Wachhaus, T. (eds). Vol. 1, Issue 1, Arpil 2008. 498–503.
Gatmaytan, D. “Cost and Effect: The Impact and Irony of the Internal Revenue Allotment.” Philippine Law Journal, 2004: 630–79.
Guevara, M. “Decentralization and Economic Development: The Philippine Experience.” Hitotsubashi Journal of Economics, 2000: 97–109.
Ilago, S. “Local Government Transformation: Glimpses from the Local Finance Literature under the 1991 Local Government Code.” Philippine Journal of Public Administration, Vol. XLI, Nos. 1–4, 1997: 228–38.
———. “Decentralization in the Philippines: Preliminary Review of Policy Design and 15 Years of Implementation.” Institute for Comparative Studies in Local Governance Decentralization in East and Southeast Asia. Tokyo: National Graduate Institute for Policy Studies, 2007. 128–136.
Manasan, R.G. Intergovernmental Fiscal Relation, Fiscal Federalism and Economic Development in the Philippines.
Working Paper Series No. 92–04. Manila: Philippine Institute for Development Studies, 1992.
———.Local Public Finance in the Philippines: Balancing Autonomy and Accountability. PIDS Working Paper, Makati: Philippines Institute for Development Studies, 2004, 41.
———.IRA Design Issues and Challenges. PIDS Working Paper, Makati: Philippine Institute of Development
Studies, 2007.
Manasan, R., and Villanueva, E. Gems in LGU Fiscal Management: a Compilation of Good Practices. PIDS Discussion Paper Series No. 2006-16, Makati: Philippine Institute of Development Studies, 2006.
Miral, R. From Decentralization to Government Accountability and E ciency: Reflections on Swiss Fiscal Federalism and Directions for Philippine Decentralization. Research Grant Report, Institute of Federalism and Center for Local and Regional Governace, University of Fribourg and University of the Philippines, Quezon City: Forthcoming, 2009.
———. “Public Sector Governance and Decentralization in the Philippines.” In Local Governance Under Stress: Fiscal Retrenchment and Expanding Public Demands on Government, Nakamura, A. (ed.). 47–70. Tokyo: EROPA Local Government Center, 2009.
Prud’homme, R. “The Dangers of Decentralization.” The World Bank Research Observer, Vol. 10, No. 2 (The World Bank), 1995: 201–20.
Smoke, P. “Fiscal Decentralization Policy in Developing Coutries: Bridging Theory and Reality.” In Public Sector Reform in Development Countries: Challenges to Improve Services, by Bangura, Y. and Larbi, G. (eds). New York: Palgrave, MacMillan, 2006. 195–227.
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Tiu Sonco, J. The Promises of Decentralization in the Philippines: Dangers, Issues and Challenges. Paper prepared for a class seminar at Kobe University, Kobe, unpublished, 2008, 13.
———. Challenges in Designing the Appropriate Internal Revenue Allotment of the Philippines: Normative, Politico-Institutional and Administrative. MA thesis, Kobe University, 2009.
© 2011 by Taylor and Francis Group, LLC
Annexes
Annex 18.1 Devolved Services by LGU Level
|
Province |
City |
Municipality |
Barangay |
|
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|
|
|
|
|
Agriculture |
• Agricultural extension and |
• All services and facilities |
• On-site research and |
• Agricultural support |
|
|
on-site research (prevention |
of the province and |
agricultural extension |
services (distribution |
|
|
of animal pests and diseases, |
municipality plus, |
services (livestock dispersal |
system and farm |
Decentralization |
|
artificial insemination |
support for education, |
and seedling materials for |
operation) |
|
|
|
||||
|
centers, assistance to |
police, fire services and |
aquaculture, cooperative |
|
|
|
organizational assistance to |
facilities |
development, inter-barangay |
|
|
|
cooperatives) |
|
irrigation system) |
|
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|
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|
Environment |
• Law enforcement: |
|
• Implementation of |
• Sanitation services |
|
|
community-based forestry, |
|
community-based forestry |
and solid waste |
|
|
pollution control, small-scale |
|
projects |
collection |
and |
|
mining |
|
• Management of communal |
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Local |
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|
forests (less than 50 km2) |
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• Solid waste disposal system |
|
Governance |
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Health |
• Management of hospitals |
|
child care, disease control, |
centers |
|
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• Field health services and |
• Maintenance of |
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||
|
and tertiary health services |
|
hospital services (primary |
barangay health |
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health care, maternal and |
centers and day care |
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purchase of medicines) |
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in |
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the |
Social Welfare |
• Programs for rebel returnees |
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• Programs and projects for |
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• Low-cost housing and mass |
|
vagrants, beggars, drug |
|
Philippines |
|
and evacuees |
|
youth, women, elderly, |
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• Population development |
|
disabled |
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services |
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• Rehabilitation programs for |
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dwellings |
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abuse victims, etc. |
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• Investment support services |
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377 |
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(access to credit financing) |
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(continued) |
|
© 2011 by Taylor and Francis Group, LLC
Annex 18.1 (continued) Devolved Services by LGU Level
|
Province |
City |
Municipality |
Barangay |
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Education |
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• Building of schools (public |
• Putting up |
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elementary and secondary |
information and |
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facilities) |
reading center |
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• Maintenance of public |
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library |
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Public Works |
• Locally funded projects |
|
• Locally funded public works |
• Facilities like |
|
(provincial roads, inter- |
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and infrastructure projects |
multi-purpose halls, |
|
municipal waterworks, |
|
(local roads, clinics, |
plaza, and sports |
|
reclamation projects, |
|
communal irrigation, small |
center |
|
irrigation systems, drainage |
|
water pounds and water |
• Maintenance of |
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and sewerage, etc.) |
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supply systems, fish ports, |
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barangay roads, |
||
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drainage and sewerage, |
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bridges, and water |
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traffic signals, etc.) |
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supply systems |
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• Satellite or public |
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market, if viable |
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Tourism |
• Promotion programs |
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• Provision of facilities and |
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Promotion |
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equipment acquisition |
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Administration |
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• Maintenance of |
of Justice |
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Katarungang |
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Pambarangay |
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Source: Adapted from Ilago, S., Decentralization in East and Southeast Asia, Institute for Comparative Studies in Local Governance, Tokyo, 2007.
Asia Southeast in Administration Public 378
© 2011 by Taylor and Francis Group, LLC
Annex 18.2 An Assessment of the Progress of Decentralization
Area |
Description |
Positive |
Negative |
|
|
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|
Devolved |
Mixed results, modest |
On health: |
|
services |
gains in devolved |
• Improved efficiency in the procurement of |
• Mismatch between revenue and health |
|
services |
||
|
medicines and supplies |
expenditure requirements |
|
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||
|
|
• A more flexible orientation on basic health |
• Difficulty to maintain quality of service in |
|
|
programs |
poorer areas |
|
|
• Innovative mechanisms for revenue |
|
|
|
generation |
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• Integrated and area focused planning |
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On agriculture: |
|
|
|
• Increased cooperation between LGUs, the |
• Weak linkage between the Department of |
|
|
private sector and non-governmental |
Agriculture and the local governments |
|
|
organizations in extension, i.e., farm systems |
• Unclear personnel requirements |
|
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|
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• Adopted partnership models involving |
• Lack of financing prioritization by LGUs |
|
|
municipalities, NGAs, academic institutions, |
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and private organization, i.e., for improved |
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coordination, information sharing, |
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consolidation of produce, etc. |
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On social welfare services: |
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• Most successful among devolved services due |
• Limited funding at the municipal level |
|
|
to careful devolution of personnel, funding, |
• Low priority of social services in some |
|
|
opportunities for access to external funds, |
|
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local governments |
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|
|
preparedness of personnel, and demands for |
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|
|
• Lack of technical support in the delivery of |
|
|
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social services at the local level |
|
|
|
social services from other government |
|
|
|
• More efficient and effective delivery by |
|
|
|
agencies |
|
|
|
reducing bureaucratic procedures |
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(continued) |
379 Philippines the in Governance Local and Decentralization
© 2011 by Taylor and Francis Group, LLC
Annex 18.2 (continued) An Assessment of the Progress of Decentralization
Area |
Description |
Positive |
Negative |
|
|
|
|
People |
Improved context and |
• Increased participation in the formal |
• Inability to meet the 25% requirement for |
participation |
initiative for |
processes of local government through the |
NGO participation by the LGC |
|
participation in local |
special bodies in local development council: |
• Marginal inputs of local civil society |
|
governance, but token |
55% of provinces; 67% of municipalities; and |
|
|
organizations |
||
|
participation in some |
63% of cities |
|
|
|
||
|
areas of local |
• Greater and “embedding” citizen participation |
|
|
governance |
|
|
|
in better led LGUs, e.g., Naga City |
|
|
|
|
|
|
|
|
|
|
Development |
Sectoral planning has |
• A comprehensive land use plan and a |
• Disconnect of sectoral plans between |
planning |
not been fused with |
comprehensive development as requirements |
national and LGUs |
|
local planning |
for effective resource management and |
• Need assessment for effectiveness of local |
|
|
programming |
|
|
|
planning |
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|
|
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|
Local finance |
Improving conditions |
• Automatic release of IRA transfers |
• Broad-based taxes remain collected by the |
|
for local finance, but |
• Increased innovations in resource |
central government |
|
policy design flaws |
|
|
|
mobilization and generation |
• Policy restrictions in setting local tax rates |
|
|
need correction |
||
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• Inability to increase tax rates due to |
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political risks |
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• Mismatch between taxing and expenditure |
|
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responsibilities, e.g., provinces have low |
|
|
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taxing powers and IRA transfers relative to |
|
|
|
their expenditure responsibilities |
|
|
|
|
Political |
Policy implementation |
• Received firm support from the president, |
• Tendency of the president to misuse |
process |
did not escape the |
especially during the time of Presidents |
authority over local governments and the |
|
political process, but |
Aquino (preventing authoritarianism) and |
purse to ensure “political survival” and |
|
firm policy support |
Fidel Ramos (vetoed attempts to recentralize |
maintain legitimacy in offices |
|
shores up |
health services) |
|
|
decentralization |
|
|
|
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|
Source: Summary based on Ilago (2007) with additional inputs.
Asia Southeast in Administration Public 380
© 2011 by Taylor and Francis Group, LLC