INTRODUCTION

Article X of the 1987 Constitution mandates the creation of

a local government code. It was eventually enacted featuring
remarkable changes in the system of governance whereby the
central government devolves certain functions to the local
government units (LGU) namely the province, municipality, city,
and barangay. The purpose of which is enable these units to be
self-reliant and more responsive to the needs and preferences of
its communities. It leads to a more accountable decision-making
and greater innovation in how public services are delivered
within its jurisdiction (Gonzales, Eleanor M, 2000,
“Decentralization and Political Participation in the Philippines).
The formulation and enactment of the Local Government
Code of 1991 was inspired by the long years of Marcos
dictatorship. It is a complete move away from a highly
centralized form of government towards genuine autonomy for
local government units. The LGC of 1991 categorically specifies
that the State "shall provide for a system of decentralization
whereby LGUs shall be given more powers, authority,
responsibility and resources. Hence, the general principles of the
Code are put in operation through the following mechanism: (1)
devolution of five basic services from the national government's
regional offices to the local government units; (2) strengthening
of people's participation in local governance; (3) increasing
revenues for local government units through the provision of an
increased share in nationally imposed taxes; and (4)
strengthening the powers of local chief executives and councils.

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 OBJECTIVE

To be able to identify the success and benefits, the gaps

and the advantages in the creation and implementation of the
Local Government Code of 1991 by presenting some ideal and
innovative ideas applicable to other LGUs which has already
been implemented in the other LGUs while on the other hand
laid down the shortcomings and ineffective application of the
Code.

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 SUCCESS AND BENEFITS IN THE
IMPLEMENTATION OF THE LOCAL
GOVERNMENT CODE OF 1991

Sen. Aquilino Q. Pimentel, Jr., the author of the Local

Government Code says that, “It was by far one of the most
revolutionary pieces of legislation that radically transformed the
very nature of Philippine politico-administrative system at the
national and local levels. Indeed, the Local Government Code of
1991, also known as the Local Autonomy Act, set-off the process
of reinventing and redefining the discourse of local governance
in the Philippines.” (Pursuing Our Collective Struggle for Local Autonomy:
Amending the Local Government Code of 1991)

Among the basic services devolved to LGUs were

agriculture, health, social services, maintenance of public works
and highways, and environmental protection. The extent of
services devolved to them depends upon the nature of the LGU.
For instance, the barangays, which are the smallest political
subdivision of the country, were given the responsibility for
agriculture support services, maintenance of health centers and
day care centers, promotion of general hygiene, maintenance of
barangay roads, bridges and water supply, infrastructure and
barangay justice.
The municipalities and cities, on the other hand, were
given the responsibility to conduct on-site research services for
agriculture and fishery, implement community- based forestry
projects, projects on primary health care, maternal and child
care, and communicable and non-communicable disease control
services, social welfare services, solid waste disposal,

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infrastructure facilities including school buildings and municipal
roads and bridges. Provinces are required to extend agricultural
extension services, environmental protection, social welfare
services, infrastructure, low-cost housing projects, and health
services.

Sources of Funds
One of the commendable provisions of the Code is the
higher share of the LGUs from the national internal revenue
taxes and of the national wealth. Prior to the enactment of the
1991 Code, the LGU's share from the national wealth was only
about 11% but upon its effectivity, it was increase to 40%
(Philippines: Strengthening the Role and Function of Local Authorities, UN-
HABITAT, www.unhabitat.org). With this, the LGU is made to be more
capable to operate by its own through the use of the said fund in
accordance with the national programs but still respect
interdependence with the national government plans although
the LGU concerned may still be allowed to spend their funds
according to its respective priorities.
The LGU's share, as what we call it, the Internal Revenue
Allotment (IRA) is automatically released to the respective LGUs
and is not subject to any lien or holdback. (Pimentel v. Aguirre)
Portion of the IRA, (20% thereof) is statutorily allocated to the
development programs of the LGU concerned. In this case
however, implementation and monitoring has many problems
despite the numerous requirements and counter-checking before
the same shall be disbursed for such purpose.

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Additional Sources of Funds and Proper Management
In addition to the IRA, LGUs are also empowered to create
their own source of revenues in consonance with the Section 6
Article X of the Constitution. However, not all LGUs especially
the barangay are practicing this supposedly additional income
generating mechanism like local property taxes, levies, business
taxes, licenses, and other fees and charges but rather relied
purely on the revenue allotment coming from the national
government. This is because most of the chief executives
elected lack the expertise in the creative administrative and
managerial methods to supervise LGUs under their respective
territorial jurisdiction.
By and large, the Local Government Code provided much
needed powers and authority to the Local Chief Executives and
Local Sanggunian. The devolution of powers of the central
government provided them with the opportunity to chart and
better manage the direction of development for their individual
LGU. Before the implementation of the Code, the local
government units had to seek the consent of the national
government in procuring even a single nail needed for any
infrastructure project. At that time development planning was
also centralized and the LGUs could not intervene on programs
and projects implemented by the national government agencies
within their area of jurisdiction. This situation has been totally
reversed. It is now the LGUs that identify, plan, implement and
finance local projects. National government agencies are also
mandated to work in close coordination with LGUs in regard to
the implementation of their programs and projects in the area.
As examples, the provinces may now impose a tax on (a)
transfers of real property; (b) businesses of printing and
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publication [ not on news papers] (c) franchises; (d) sand and
gravel; (e) professions; (f) amusements enterprises; and (g)
delivery vans of all kinds of products.
If implemented and studied properly, revenue generating
capability of an LGU can be a huge mechanism attributable to
the success in the implementation of the Code in its ultimate aim
to make LGUs become totally self-reliant. In South Africa, they
established neighborhood committees to engage the resources
of communities in addressing economic and infrastructure
problems and government partnership with community-based
organizations for tax collection. In, Kenya, local governments
changed their system of having multiple business licenses to
having one single business permit so as to simplify their
licensing process, thus, reducing red tape in the local
government, and of course, lesser expenses for the procurement
of supplies, official receipt printing and personal services. In
these examples, the municipalities are seen to be addressing
their need for a strong local revenue source by enhancing their
abilities to access the revenue base (through creative
administrative and managerial methods) which in fact, increased
the tax collection rate average by 300 percent in 2003 (United
Nations Development Program – Philippines,
http://www.undp.org.ph).
In the Philippines, Cebu City used a computerized
assessment and appraisal procedures related to property taxes
which enabled them to track down the tax collectibles while San
Fernando Pampanga, adapted its public governance system
(PGS), which uses scorecards to measure performances and
accomplishments. The PGS is an adaptation of the Balanced
Scorecard (BSC), a measurement and management system for
businesses developed by the Harvard Business School that has
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been used by public institutions worldwide. The adoption of the
PGS has been credited for the improvement of the business
climate in the city. Since its implementation, San Fernando has
since attracted 2,200 businesses, or an average of 16 percent
annually over the past three years. Business and real property
taxes collected from these establishments have decreased the
city’s dependency on the internal revenue allotment (IRA), from
52.85 percent in 2007 to 49 percent in 2008.
Another positive feature of the Code is the power of the
LGU to legislate even the barangays. One of the good example
as pointed out by UNESCO in its analysis in relation to the
legislative power of the LGU is the City Ordinance 1344 issued by
Cebu City which creatively facilitate the development of low-cost
housing, allowing the use of a trust fund generated from the sale
of city-owned lots exclusively for shelter and its related
expenditure. The city also used its law-setting ability to increase
the participation of vendors' association in market management
which is recognized by the Revised Management Code (Matthew
Andrews and Anwar Shah, Assessing Local Government Performance in

Developing Countries).

People Empowerment
The Code also provides the legal and institutional
infrastructure for expanded participation of civil society in local
governance. More specifically, it allocates to non-governmental
organizations (NGOs) and peoples’ organizations (POs) specific
seats in Local Special Bodies (LSBs). These special bodies include
the Local Development Council, Peace and Order Council, Local
Health Board, Local School Board, Pre-bids Qualification and

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Awards Committee, People's Law Enforcement Board and other
local councils that may be created by the LGU. Because of their
ability to organize and mobilize the people, one door wide open
for NGO and PO participation in governance is in the area of
promoting local accountability and answerability, specifically
through the recall and people’s initiative provisions.
The role of people's and non-governmental organizations
are also provided in the Code intending to make them active
partners in the pursuit of local autonomy, thus, the role of NGOs
is seen as complementary, supplementary and supportive of the
efforts of local governments and the pursuit of full autonomy.
However, in some areas of the Philippines, it is not liberally
practiced as necessary as it is supposed to be. Normally, the
authority remains in the full control of the local chief executives
and the legislative power remains to the Sanggunians. If the
citizens are liberally involved in the planning and appropriation,
it guarantees effective planning, project implementation and
monitoring which puts harder on the abusing LGU officers to
misappropriate the funds into something else thereby the
corrupt practices are somehow eradicated.
In Costa Rica, a county representative championed the
development of a program giving local citizens direct authority
over discretionary funds allocated to them from higher levels of
government. These discretionary funds were traditionally used
by representatives to develop lines of patronage and clientelism
in their communities but are now channeled directly to district
councils for local allocation. The district councils have to show
evidence of direct consultation with their citizens when using the
funds. As literature suggests, the resource allocation process is
more responsive and where the communities can see works
being targeted and completed (Matthew Andrews, Anwar Shah,
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Assessing Local Government Performance in Developing
Countries).
In the Philippines, some LGUs recognizes the constitutional
and codal provisions in people empowerment (while others
retain the exclusive planning and appropriation power to the
Sangguninan), have effectively exercised the power to legislate
by creating ordinances involving its citizen to the effective
management of the local government unit it belongs. Take for
example the City of Naga which passed its "Empowerment
Ordinance" in late 1995. This unique legislation promotes active
partnership between the city government and the people in the
formulation, implementation and evaluation of government
policies through the Naga City People’s Council (NCPC). The
participatory process resulted in the formulation of a total of
thirty strategic management plans including three citywide
programs: the clean-up of the Naga River, the management of
solid waste, and the revitalization of the Naga City Hospital. It led
to the establishment of the Naga City Investment Board, a
private sector initiative with members from the Naga City
People’s Council that promotes investment and local economic
development. The Integrated Livelihood Master plan has been
adopted to harmonize national and local livelihood programs.
The Public Service Excellence Program and the Citizen’s
Guidebook of City Government Services have resulted in marked
improvements in service delivery and accountability (UN-
HABITAT, Good Policies and Enabling Legislation For Attaining
the Millennium Development Goals: a Methodology for Review
and Documentation).

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Barangay Empowerment
In addition to the LGUs achievements as far as its
legislative power is concerned is the implementation of a
government code in barangay level. It was in 2004 when the
barangay officials of Sanito in Ipil, Zamboanga Sibugay
introduced its own Sanito Barangay Government Code of 1994 to
address the influx of informal settlers, worsening peace-and-
order situation, widespread poverty, and the limited financial
capability which has been their problem since about one year
ago. It was one of the local government units' initiatives which
garnered an award for best practices given by Galing Pook
Foundation, with sponsorship from the United Nations
Development Programme and SNV Netherlands. They patterned
it after the Local Government Code but reduced to the barangay
level. The Barangay Code, which was amended in 2005, gave
Sanito the power to impose additional fees like Barangay Public
Works Development Fee, Barangay Water Development Fee, and
the Coastal Resource Development Fee. The Code also required
the collection of P30 per month as garbage collection fees and
designated retired military and police officials as members of the
barangay anti-crime units. The fees collected by the barangay
increased the local generated income to P700,000.00 per year
from a mere P49,000 before the passage of the Barangay Code.
The increase in local income has made them less dependent on
the IRA (United Nations Development Program – Philippines,

http://www.undp.org.ph).

The Local Government Code of the Philippines further

provides for a desirable organizational stucture and staffing
pattern of the LGUs that commensurate to its service
requirements and financial capability. It also provides and

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defines the powers, duties, functions and compensation of its
officers and employees (Philippines: Strengthening the Role and Function
of Local Authorities, UN-HABITAT, www.unhabitat.org). The most
commendable of these provisions is the appreciation of the
barangay officials' entitlement to salaries and wages in the form
of honorariums which was not recognized prior to the enactment
of the Code, including the power to legislate like that of the
municipal, city and the province.
Another feature of the Code is the provision giving the
Barangays to handle and resolve disputes and small cases within
its jurisdiction through the Lupon, thus, lessen the cases being
filed in the actual Courts. In addition to that, barangays now
have the power to establish and maintain a barangay health and
daycare centers.

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 GAPS IN THE IMPLEMENTATION
AND NEGATIVE IMPACTS OF THE
LOCAL GOVERNMENT CODE

Lack of Concrete Project Monitoring System and Feedback

Mechanism
What maybe the flaw in the management of the
developmental fund is the absence of provisions which “directly”
involves the citizens in the formulation and planning in the local
government units’ monumental undertakings and the authority
to assess the results of the projects intended to accomplish. In
many instances, the 20% allocation in infrastructure is, as per
records, has already been disbursed yet there is no physical
existence of the supposed project, or if there any, most often
than not, are unfinished. In the case of the Pavia Housing Project
in Iloilo, the Province suffered a P130 Million in 2003 and left
abandoned until now. It is one example of the many failures in
the implementation and monitoring of projects engaged by the
local government unit.
The Code mandates the LGU to work with the LGE in
promoting, supporting or even initiating NGOs and POs to
organize themselves and participate in local governance — but
in fact, even if these organizations cannot complete the
requirements set by the Code. In the absence of civil society
members in special local bodies, as stated in the Code, some or
all of them can be taken in to fill the positions as a way to
encourage popular participation and self-organization. The LGE
in the town did not perform these tasks. Instead, he worked to
discourage civil society participation. This is why the sometimes

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the NGO representative in the health board, for example, is not
an NGO worker, nor does she have any knowledge about why an
NGO representative is needed in the board. All of the supposed
civil society members of the local special bodies are handpicked
individuals representing nonexistent NGOs, POs, and private
sector organizations.

Inadequacy to Generate Additional Sources of Funds and

Proper Management
In addition to the IRA, LGUs are also empowered to create
their own source of revenues in consonance with the Section 6
Article X of the Constitution. However, not all LGUs especially
the barangays are practicing this supposedly additional income
generating mechanism like local property taxes, levies, business
taxes, licenses, and other fees and charges but rather relied
purely on the revenue allotment coming from the national
government. This is because most of the chief executives
elected lack the expertise in the creative administrative and
managerial methods to supervise LGUs under their respective
territorial jurisdiction.

Dependency in the Internal Revenue Allotment (IRA)

LGUs are characterized by dependency: transfers via the
IRA account for 64 percent of LGU revenues. High dependence
on transfers is a disincentive for LGU revenue mobilization. Hard
decisions on raising revenues to cover local expenditures and
justifying to the public the need to raise taxes in order to provide
public services are avoided by LGU officials. The dependence

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may also impair the development of local government capital
markets, because lending to LGUs has been made largely
because of the security given by the IRA intercept.
In a paper entitled, “Ten Years of the 1991 Local
Government Code”, presented at the National Defense College of
the Philippines (NDCP) Strategic Studies, Guadioso C. Sosmeña,
Jr. wrote, “If the national government will withhold the Internal
Revenue Allotment (IRA) for local governments, about 85% of
them will collapse and close down. This is because local
governments have a very high IRA dependency.”
LGUs are underperforming on own-source revenue
collection and administration, reducing the credibility of the local
tax system and contributing to a culture of noncompliance. At
present, own-source revenue constitutes only 36 percent of total
LGU revenues. Moreover, local revenue codes have created a
panoply of taxes, fees, and charges, many under-collected and
some simply uncollected
The failure of the LGU executives and the member of the
local legislative bodies to look into and imitate the success and
best practices of the other LGUs seemed to be incomprehensible
or maybe they just ignore it for their own personal interest.

Unessential Consideration of a Province as a Funded LGU

This is another provision in the Code where a province is
considered as an LGU having its own officers and employees and
funds. Based on various writings a province is a geographic area
that has some governance secondary to the governance of a
central state or country. In France, outside of Paris is part of the
province. A province can also be used as “merely” an

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expression to define an area. In other words, a province, acts
similar to that of a state but reduced into smaller area. In some
way, it can be considered as redundant. It is like a common
corporation that pays excessive personal services by keeping
numbers of executives like President for Operations, Vice-
President for Operations, President for Finance, Vice-President
for Finance, etc and that presidents and vice-presidents also
maintains number of paid personnel under them. Simply put, it
sets out as redundancy paying for unnecessary expenses. If only
one executive can function with lesser difference of having an
assistant, then, there is no much need in keeping two.
The present set up of the Philippine Local Government
Code in terms of the province seem to be unnecessary. The
funds provided to them should have been directly issued to the
poorer municipalities and barangays it covers for proper
appropriations of the IRA. Besides, any project it implements is
also the same concerned projects of a municipality or city where
the project is located or provided. Further, the offices of the
provincial authorities are also located in the capital town or cities
of a province, so what is the need of maintaining too many
offices as it confuses the constituents where to go. For example,
an ordinary citizen will go to the Office of the Mayor seeking for
some assistance but the employee there suggests to proceed to
the Office of the Governor as the latter has no more funds for the
need of that citizen. Once that citizen steps in the Office of the
Governor, the employee there would also advice him to proceed
to the Mayor’s Office for the same reason, and vice versa. In
other words, it confuses the people as to where to go in times of
their need. It is however okay, if, either of the offices can
automatically responds to the people’s at once. The problem of

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the “missing middle”—provinces have a very weak role in the
architecture of decentralization.
The best proof to show that the province has no much
relevance in the effective process of decentralization is the
acknowledgment of highly urbanized and independent
component cities. These two types of LGUs exist without the
need of supervision from the province it belongs. It acts on its
own without the province’s intervention. Without, the province,
does it make a common municipality or city to collapse? Most
probably, the answer is in the negative.
Although the national government has to deal in some with
more than 1,500 LGUs nationwide, the demand of keeping a
provincial offices maybe unnecessary as it can be assumed by
the Congressmen themselves in terms of representing the
province in the national arena.
Currently despite the existence of the province as the
biggest LGU in terms of jurisdiction, there is no national forum
where the key stakeholders, such as elected and appointed
officials from the national and LGU-level legislative and
executive branches can debate and decide on significant
decentralization-related issues and constraints.

LGU budgeting and resource management

Many aspects in the budget and appropriations
management remain an issue in the LGUs. Institutionalized
planning is weak in LGUs. Only 30–50 percent of LGUs have local
development councils in place. Moreover, the Regional
Development Plan (RDP) formulated by the Regional
Development Council is seldom, if ever, taken into consideration

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by the LGUs. Conversely, RDPs tend to focus solely on
interprovincial projects and ignore local development plans.
There is also “a disconnect” between national planning on the
one hand and regional or provincial planning on the other.
LGU budget formulation and execution is largely
nontransparent due to the lack of effective community
participation in local budget preparation and monitoring, poor
income estimates used by LGUs for budget formulation, and the
practice of granting additional personnel benefits out of
“savings”. In the case of the Province of Iloilo as per COA’s
findings for the year 2009, it had exceeded its personal services
limitation of 45% thereby resulting to the disallowance of the
additional year-end benefits granted to all its employees.
Personal services expenditures constitute the largest LGU
expenditure category, squeezing capital outlays and
maintenance and other operating expenditures (MOOE). The
ratio of personal services to LGU expenditure has not changed
significantly in aggregate between 1991 and 2003, but there are
variations across levels of local government: this ratio declined
for cities and increased for municipalities and provinces. Though
personal services expenditure is formally capped at 45–55
percent of total LGU resources, it is higher in reality.
Accountability and transparency in LGU procurement leave
much to be desired, despite a growing number of innovations
and examples of good practice. Administrative controls over
procurement are generally weak, and effective mechanisms to
track LGU procurement are lacking.
In an article entitled “Despite Anomalies, There are Few
Checks on Corrupt Local Officials” by Tess Bacalla, she
mentioned of a study conducted in some parts of Mindanao,
meanwhile, traced delays in one area to the ignorance of the
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requisitioning offices when it came to accomplishing the
purchase request form. Some local governments, on the other
hand, chose to pre-select the suppliers whenever they were
buying goods through canvassing. The study noted there was
also no clear delineation of functions among the procurement
personnel, not only leading to delays, but also allowing those
involved with ample discretion that could tempt them to commit
anomalies.
In addition, she further said that the study found that
unnecessary delays in many aspects of the procurement process
such as the release of payments to suppliers led to other
problems. Some suppliers, for instance, lost interest in doing
business with the local governments, thereby depriving these of
a wider choice, as well as the best possible value for the least
amount of money.

Governance and political economy

The 1991 decentralization was an attempt to
fundamentally restructure the state following a lengthy period of
centralized authoritarianism. Power was devolved from national
institutions to local ones. However, at the local level, institutions
continue to be captured by elites, especially dominant political
families that seek to perpetuate political dynasties within LGUs
and, for the more successful ones, across government levels.
The dominance of particular political “clans” has had discernible
effects on LGU performance.
The appreciation of Party List system is improperly
misused by the “tycoons” in politics which is also tolerated by
the COMELEC. Many used it as a cloak because they have

18
nowhere else to go. Some create their own suppose list as if
representing a particular group of marginalize sector but in fact,
they are not at all belong to such. The original spirit laid down
by the Constitution has already been lost. Most countries in
Europe, as well as Russia, South Africa and Israel favor some
form of party-list system because it opens up the political
process beyond one or two dominating political parties. It may
have worked in these countries but sad to say, not in the
Philippines, or if it does, it cannot be easily noticed. Maybe the
most talked about issue in the party list was when Mickey
Arroyo’s bid as representative for the supposed promotion of the
rights of tricycle drivers and security guards. It was questioned
by the many other sectors because according to them and that’s
actually the fact, that Arroyo is not at all an affiliate or member
of either of the groups --- so how can he possibly represent them
when not once in his life he never drive a tricycle for fare nor
employed as security guard!

Continuing Political Dynasty

No law has ever been practiced in society without practical
modifications or even violations. Social reality is always a
confluence of forces that constitute and constrain day to day
experiences.
Before the implementation of the Local Government Code,
the clan already controlled local politics through the use of
various strategies ranging from the extralegal (patronage,
charity, compadrazgo) to the illegal (fraud, violence and
terrorism) while cornering for itself—and for its own maintenance
—the resources of the municipal and provincial coffers. Before

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the implementation of the Code, the municipal resources (funds,
equipment) were already being used by the mayor for the
personal gain of his loyal henchmen and political allies.
The Code failed to alter this practice. In fact, the Code
exacerbated the situation as its provisions left the socioeconomic
and political fields open to further clan misuse and abuse. As it
was before, it is still the loyal henchmen and political allies who
oversee and manage the clan’s political interests in the
municipality. These political caretakers are composed mostly of
relatives of the clan’s long-time political friends who divide
among themselves the loot available in the municipality. The
best which is also the worst example of political dynasty-ism is
the Ampatuans in the province of Maguindanao where they
dominated not only the political body but also the local economy.
The family is known to own almost the huge businesses
throughout the province from pharmacy and shopping centers to
gas stations. They are also known in stockpiling weapons for
protection and as status symbol.
But before the Ampatuan’s case surfaced, local political
dynasty is so known, almost ordinary and most probably are
acceptable in every sense of the word despite the Constitutional
provision prohibiting it. The legislature which is in-charged in the
construction of the enabling law on how to implement the
prohibition of political dynasty remains to be ignoring. But
understandably, no one should expect the “wise men” of the
congress to shoot their own foot and hoofs.
It seems that the people have no choice but to accept
political dynasty even if it is prohibited by the constitution. It is
like a relief food packed inside a styrofoam with the label of the
name of politician. If you're a flood victim, to avoid starving to
death in the middle of a cold storm and flood. You have no
20
choice but to eat your pride and principle and get the donated
food by the politician.

Downside of the Three-year Term of the Elected Local

Government Officials
There is time, which is not so often, a candidate outside of
the clan wins the votes of the local electorate. But before he can
be able to fully implement changes in the LGU, he is already put
out of the service because of the three-year term of office. It is
seen as a hindrance to the institutionalization of the Local
Government Code and to building the capabilities of local
officials. This is because local elected officials do not have
enough time to plan and execute many of their programs within
a short time frame of three years. It is a common experience
that when a new set of elected officials assumes office after the
three-year term, new programs evolve and continuity is lost.
Thus, there is a need to amend the constitutional provision on
the tenure of local government officials and campaign for a
longer term, let say six years for new electionist and three years
for re-electionists. The six years for new electionist is deemed to
be proper so that recall shall be best appreciated and the tenure
of the successor is longer by three years as compare to the at
least one year in the present set up.
This is precisely why local governments were not able to
really transform obsolete structures and organizations to meet
the requirements of solving modern day problems. Efficiency and
effectiveness can be achieved when local governments adapt
private sectors strategies, techniques and technology, systems
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of management and information technology, where deemed
appropriate and tested.

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SUGGESTIONS FOR PRIORITY
ACTION

Actions are needed now. Given the mixed track record of

decentralization, it would be desirable to review the architecture
for decentralization. However, this could take time, and action is
needed now to avoid both deterioration in services as well as
limitations on funding coming from the national Government.
Below are just some of the many immediate possible
actions that could be accomplished with and without legislation,
and fairly quickly, by both national and local governments.

Actions not requiring legislation

There should have an immediate formulation of
appropriate systems as part of the Implementing Rules and
Regulations (IRR) for the project implementation and feedback
mechanism, such as the Planning and Oversight Committee and
Project Result Committee. With these, the LGE and the
Sanggunians will be made more aware of the demand for
transparency

Strengthening the Revenue Generating System in the

LGU
Own-source revenue collection could be significantly
improved through administrative actions, such as providing
incentives (a) to LGUs to increase collection of real property
tax and business tax, (b) to cities and provinces to conduct

23
the generalized revenue assessment every three years, (c)
to cities and municipalities to use minimum (presumptive)
gross sales figures to calculate the tax liability for
establishments required to pay the business tax, and (d) for
disclosure of LGU financial information and benchmarking
LGU fiscal and financial performance. Some of these are
actually being done in other LGUs all throughout the
country. To address this, there should have a continuing
study provided for the local legislative body. The national
government should provide guidelines based on the “best
practices” from other successful LGUs for implementation in
other LGUs which has the potential of doing the same in
their own locality.
We should not however, limit ourselves in the
Philippine setting but rather go beyond. Take for example
the South Africa’s and Kenya’s system in issuing business
licenses. They maintains unified issuance of receipts
covering all kinds of fees and other charges thus, limits the
printing of receipts, personal services and the accounting of
the same. With these, red tape is eliminated and
malversation of fund is harder to be committed because of
the unified receipt. If some receipt is missing, only one
person or only one department shall be held liable thus
cases can easily be resolved.

Strict Implementation and Review in the Appropriation

and Resource Management
Budgeting and resource management could be
improved by strengthening the planning and investment
appraisal and monitoring. It shall include the public’s
24
 participation in the process and keep the budget documents
open. There should have an effective personnel information
system linked to payroll to avoid ghost personnel.
In infrastructure project, the LGE concerned should
present to public through a general assembly status of
project implemented base on the by-phase accomplishment
as indicated in the approved action plan. Any irregularities
must be properly explained and the failure thereof shall lead
to disciplinary actions.

Actions requiring legislation

The system of governance must be properly reviewed
again. SECTION 521 of the Code mandates a regular review of
the Code every five years but the Congress has failed to comply.
If taken seriously, the following may help improve the system of
governance in the Philippines.

Governance and Political Review

Party List System

The “Party List” system be reviewed again as to what
level of participation they maybe allowed to participate in
the legislature. This is because if the citizen in the local
level is empowered and optimized, there is no longer a need
for sectoral representation in the Congress. Besides, in the
present situation, the party list are now being used by many
political “perverts” for their personal benefits and the funds
issued to them are also spent without the knowledge of the
suppose sector they represent.

25
The Three-Year Term
The three-year term on the local elective officials must
be increase from 3 years to 5 or six years for the new
electionist while the re-electionist remains to be 3 years.
The purpose of this is to give the new administration
sufficient time to implement the programs it proposed
during his campaign. The 5 and 6 years will also appreciate
the essence of recall as it allows longer time for the
successor, if ever, to spend extra 3 years to continue the
unserved tenure of the recalled local elective official. The
re-electionist will also be limited in 3 years to make him
think that if he fails to satisfy the expectations of his
constituent, he will have the thought of losing in the next
election.

The Province
Moreover, the “missing-middle” relevance of the
province in the decentralization is in the gray area because
if taken closely, a municipality or a city may exist without
the supposed supervision of the province. The same case
with the barangays because it may exist as well even
without a municipality or city. Actually, the province, the
municipality, a city, or a barangay can co-exist, and that is a
reality. But the question is, do they need to have
corresponding separate powers? Of course they do, but all
of them need to have funds? The municipality, city and
barangays – yes, but province, no!
26
 Take a look at the present case. There are highly
urbanized and independent component cities that do not
require the supervision of a province, and therefore, there is
no reason to believe that the ordinary or poorer municipality
or city for that matter cannot do without the province. The
officials in the province maybe retained but no more funds.
The 23% from IRA intended for the province is best directly
allocated to the poorer municipalities to enable them to
cope with the cities, besides, most projects implemented by
the province are always located in a municipality of city.
There is no such specific place like “province,” like when
one lives in Lambunao, Iloilo say, “I will go to the province.”
What province for he already is already in the province, that
is outside of the city of Iloilo. But one can say, “I will go to
the city, or municipality, or barangay,” because that can be
specifically spoken when you live within the province.
Further, the functions of the provincial officials shall
not be more than legislative, supervisory and monitoring
capacities only while the infrastructure concerns shall be a
devolved purely to municipality or city concern. With that,
the provincial officers can be able to maximize and focus on
the legislation, implementation, review and monitoring of
the municipalities and cities under its jurisdiction.

Political Dynamism
None of the suggestions for action on decentralization
are new to Philippine policy makers—but each is fraught
with complexity. The challenge is to design the technical
solutions and address the political economy challenges

27
through a consultative process, so that an appropriately
prioritized and sequenced set of actions—politically feasible,
administratively implementable, and fiscally sustainable—
can be agreed on and implemented. One of which is maybe
not so new yet so old. It’s like, it is already part of every
Filipino’s skin – the political dynamism.
The 1987 Constitution prohibits political dynasty but
no law has ever been passed to enable the said provision.
Because of this issue, almost every province in the country
is being controlled by its own political clan. One can notice
that in a province, the Congressman is the father, the
Governor is the uncle, one of municipalities is under the
mayoralty of the son, and so on. The list would not just end.
Continued practice of political patronage is the
obstacle most often cited to the implementation of
decentralization, but concrete recommendations on how this
can be checked have not been offered.
The Congress must enact a law providing for the
limitation of numbers or positions one family can have in the
local government to avoid full control of the local
government fund. It may hurt their political clan and career
but there should have no Filipino in the country to think only
of themselves but for the full development and progress of
the Philippines.

28
29
 CONCLUSION

The structural weaknesses of democracy in the Philippines

act as a binding constraint for democratic deepening under a
decentralized framework. The historical basis of state formation
has led to the establishment of a polity with the following
characteristics: competitive elections reliant on local patronage
based networks rather than program based political parties;
localities susceptible to capture because of weak civic
disciplines.
These norms underlying the polity are deeply implicated in
how decentralization was designed and how it is being
implemented. The prospects of broadening and strengthening
decentralization and local autonomy is bright as evidenced by
models of good and best practices in local governance because
decentralization has shown us that unique situations exist in
different local governments that only they know how to manage.
It has shown us that it has changed the profile of local leadership
drawing more leaders from a wider range of society. It has, in
many areas increased media vigilance and accountability
because of more active citizen participation in local governance.
For progressive groups, it thus makes the case for
rethinking local governance work beyond the ambit of
participatory planning processes and local development councils.
Empirical data also suggests that the devolution of authority and
resources has not led to a marked improvement in the delivery
of services for the poor. Various mechanisms should be
institutionalized and operationalized to improve
intergovernmental and non-governmental relations and
cooperation to provide the regional policy solutions and

30
coordinated actions to address regional issues and development
concerns. National, regional, provincial, city and municipal
development will have no impact if not informed by a
participatory barangay development and investment plans
thereby providing coherent planning, direction and action
towards improving delivery of basic and support services for
poverty reduction. The point of reference should be at the basic
political unit which is the barangay rather than at the national
level (through the province, through the municipality or city)
because it is at the barangay level where real lives are really
affected by the responsiveness or irresponsiveness of
government programs, projects and activities being
implemented. People in the communities are the ones who know
what their real needs are and the problems besetting them.
The graver political problem that underlies the problems in
service delivery for the poor is the continuing lack of
responsiveness of local governments to the needs of the
disadvantaged. This is aggravated by the framework for
intergovernmental transfers—including the IRA formula. The
Philippines' dysfunctional democracy thus requires a bipolar
therapy: strategic political action to address the structural
constraints, on one hand, and incremental political work to
contend with their technical manifestation, on the other. The
former relates to the political project of shoring up the power of
progressive forces to contest the basis of the political status quo
and the voicelessness of the disadvantaged. The latter relates to
continuing the advocacy for reforms in the electoral and
representative system as well as the necessary reforms in the
decentralization framework highlighted in this paper.

31
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