University of the Philippines

OPEN UNIVERSITY

IMPACT OF EFFECTIVE LAND USE PLANNING ON THE ESTABLISHMENT OF

PUBLIC ECONOMIC ENTERPRISE IN GAINZA, CAMARINES SUR TOWARDS A
SUSTAINABLE COMMUNITY

By:
Efren Louie D. Olaño
Faculty of Management and Development Studies
P299-A: Research Methods in Planning
First Semester AY 2019-2020

7 December 2019
 INTRODUCTION

Building a self-reliant community means that its existence does not depend on

the other. It can stand on its own feet that serve its own people that maximize their

natural and human resources as well. The Local Government Code (RA 7160)

provides that the local government units (LGU) shall endeavour to be self-reliant and

shall continue exercising the powers and discharging the duties and functions vested

and devolved upon them which are aimed at local autonomy and self-reliance in all

aspect. Because of the significant increase in the number of citizens engaging in

certain economic activities, the establishment and development of a local economic

enterprise (LEE) is considered by LGU to improve economic and social situation of

the community more than to create additional sources of revenue and serve as a

business entity in itself.

According to the Department of Budget and Management (DBM), the Local

Economic Enterprise is a venture wholly or partially owned by LGUs to generate

revenue or income through sale of services and goods to meet a perceived

constituency demand. LEE may include public markets, slaughterhouses, hospitals,

public cemeteries, parking areas, sports, recreational and cultural facilities, public

utilities such as water and power supply and distribution and telecommunications,

garbage collection and disposal, and public transport and terminal services, among

others.

Gainza is part of the Province of Camarines Sur’s 2 nd District political

subdivision. Its total land area (TLA) is 1,475 (ha) or 14.75 square kilometres (km2) .
It is also composed of eight (8) barangays. Gainza’s land use is mainly for

agriculture which covers 88.60% of its total land area. The 4.18% of TLA covers the

municipality’s built up zone which includes residential, commercial and institutional

area based on the Comprehensive Land Use Plan (CLUP).

In the last three (3) years, the local government unit of Gainza had incurred

P40, 654,705.00 in 2016, P47, 211,284.00 in 2017 and P51, 048,590.00 in 2018

which comprise the total income from local and external sources. The internal

revenue allotment (IRA) of the LGU is approximately 96% -97% of its total revenue

which implies IRA dependency of the municipality. The local government unit of

Gainza had taken its leap towards the realization of this mandate by creating their

own local economic enterprise (LEE) that will create an additional source of income

aside from the national governments’ financial support to the LGUs. According to the

2015 Philippine Statistics Authority consensus, it showed the total population of

Gainza accounts to a number of 11, 262. This also revealed an average of 1.63%

annual growth rate of the municipality. Population is only one factor to consider in

development. As population increases, demand for basic services and facilities also

become higher. This increase in population allows the local government to develop

certain areas that would support its constituents and provide them their needs.

As presented in the CLUP of the Local Government Unit of Gainza, the

establishment of Public Market and PUV Terminal, Public Cemetery & Municipal

Park were among those LEEs that were included in the municipal plan. Relative to

the implementation and operation of the LEE, the LGU had acquired the lot intended

for the establishment of the municipal park and the public cemetery.
 RESEARCH METHODOLOGY

This study developed its perspective from the Social Constructivist Worldview

in a qualitative approach. In this manner, the basic understanding on this situation

will be explored through published case study to be able to appreciate the general

concept.

The researcher had used financial records of the Municipality of Gainza from

the Municipal Budget Office, Accounting Office and the Treasurer’s Office. The

researcher referred to Municipal Planning and Development Office to obtain the

Socio Economic Profile of the Gainza.

In an interview with Ms. Cristeta C. Chica, EnP, Municipal Planning and

Development Coordinator of Gainza, Camarines Sur, she shared the viability to

develop a Pubic Market and Jeepney Terminal, Municipal Park and Public Cemetery

in the central business district of Gainza. With the collaborative effort of the LGU

officials, they have introduced these projects as their local economic enterprise as

their study captures the need of these facilities. The LGU had identified Barangay

District I (Poblacion Area) to put up the Public Market and Jeepney Terminal as well

as the Public Cemetery. and Barangay District II ( Poblacion Area) as the location for

the establishment of Municipal Park. They local government has yet to realize the

proposed project but already have included it in the 10-year plan, which is the CLUP.

She explained this constraint due to lack of resources and that the local government

relies solely on the internal revenue allotment or national subsidy to LGUs. The

poblacion area offers from frontline services from the local government unit as well
as basic health services from the rural health unit. Thus, demand will become higher

if these local economic enterprises will be established in the said proposed area.

Azuelo (2016) emphasized the existing human, physical and financial

resources management of the public enterprises in Daet, Camarines Norte are

factors that affect and determine the enterprise’s state of operation. Trainings for

personnel, monitoring and supervision activities, conduct of series of inspection,

generating of updated reports of problem , intensification of tax mapping and strict

enforcement of laws and regulation are factors that were identified as weaknesses in

the operation of the public economic enterprise are factors that has to be considered

in order to improve its current status.

Case Study 1.

Del Castillo and Gayao (2010) shared Bukidnon’s experience on revenue

generation and public economic enterprise development from year 1996 to 2007.

The trends of the Internal Revenue Allotment, Real Property Tax, Local and

Business tax and other local sources were analysed. Moreover, the contribution to

generation of local revenue from the operation of the public economic enterprise was

also considered into.

There is predominance on revenue generation from the Internal Revenue

Allotment (IRA) from 1997-2007 which is covers more than 90% of its total revenue.

Real property taxes and business taxes are two main local income sources.

Economic enterprises have greatly contributed to the municipal income. In 2000,

their enterprise shared at approximately 2% to their income and in 2002 they

reached a peaked of 9.46% when they ventured in the operation of heavy equipment

but later encountered loss due to equipment’s maintenance problem. Market and

slaughterhouses operated poorly as it incurs more expenditures than income.

They found out that aside from the national government’s Internal Revenue

Allotment to municipalities, engaging in an economic enterprise developments would

also contribute to generate higher income than real property tax and local business

tax. Moreover, there are areas that need closer attention such as human resource

management and staff, improved and rationalized operation, purging of political

intrusion, and sufficient fund allocation for maintenance of equipment and others.

EXPECTED OUTPUT

Generally, the objective of this study is to gain vital information on the impact

of land use management though the establishment of local economic enterprise

towards creating a sustainable community.

Specifically, this study aims to:

1. Maximize land use through establishment of LEEs to support local operation

2. Obtain the significance of the local economic enterprise towards establishing

a sustainable community;

3. Measure contributions of the LEEs to the improvement in fiscal management;

4. Create policies that must be formulated to support and maintain the operation

of local economic enterprise; and

5. Identify measures that must be taken into consideration to prevent issues and

problem in the operation of the LEE.

References:

Azuelo, M., 2016, November 10. Operation of Public Enterprises of the Municipality
of Daet, Camarines Norte, Philippines. Retrieved from
http://www.apjmr.com/wp-content/uploads/2016/11/APJMR-2016.4.4.2.12.pdf

Del Castillo, M. R. & Gayao, R. G. (2010). A Municipality’s Experience on Revenue

Generation and Public Economic Enterprise Development. JPAIR
Multidisciplinary Research Journal, 4(1). Retrieved from
http://ejournals.ph/form/cite.php?id=7434

Department of Budget and Management (DBM). 2006. Manual on the Setting Up

and Operation of Local Economic Enterprises. Retrieved from
https://www.dbm.gov.ph/wpcontent/uploads/Issuances/2016/Local%20Bud
ge%20Circular/LBC-
111MANUAL%20ON%20THE%20SETTING%20UP%20AND%20OPERATION
%20OF%20LOCAL%20ECONOMIC%20ENTERPRISES.pdf

Section 17 of the Local Government Code of 1991

Un-Chol Kim, Chol Hwang. Building a Self-Reliant Economy and Its Great Vitality:
The Case of DPRK. International Journal of Economy,Energy and Environment.
Vol. 2, No. 1, 2017, pp. 7-12. doi: 10.11648/j.ijeee.20170201.12 Retrieved from
http://article.sciencepublishinggroup.com/html/10.11648.j.ijeee.20170201.1
2.html

Comprehensive Land Use Plan-Municipality of Gainza.(2015)