Rufo Mendoza, Ph.D.

June 2007

INSTITUTIONAL MAPPING AND ANALYSIS OF ORGANIZATIONS

EFFORTS, INITIATIVES AND ASSISTANCE TO LOCAL FINANCIAL

PLANNING AND MANAGEMENT

DISCLAIMER

“The views expressed in this report are strictly those of the authors and do not necessarily reflect those of the United States Agency for International Development (USAID) and the Ateneo de Manila University”.

Abstract This project report discusses various forms of support provided to local government units (LGUs) in local financial planning and management (LFPM). It aims to provide an inventory and a consolidated report of organizations or institutions that support the progress of financial planning and management in LGUs. The principal findings of this study are firstly, LFPM institutional assistance at the local level is limited. Secondly, national government agencies and international finance institutions provide financial, technical and policy assistance while academic institutions, nongovernment organizations and to a certain extent the LGUs themselves focused on technical assistance. Finally, LFPM assistance impresses upon local chief executives the relationship between local government fiscal performance and managerial enhancement.

TABLE OF CONTENTS

Page List of Tables

iv

List of Figures v List of Appendix Tables v List of Appendices v Acronyms and Abbreviations vi Preface and Acknowledgments ix 1. Introduction

1

2. Rationale for The Study

1

3. Research Framework and Methodology

3

4. Types and Nature of LFPM Assistance

6

5. Areas of LFPM Assistance

16

Revenue Generation 16 Government Accounting 21 Internal Auditing 21 Local Government Budgeting 22 Local Economic Development 22 Local Development Planning 24 Procurement Process 25 6. Specific Assistance by Donors in LFPM

27

Donor Activity in the Philippines 27 A. Asian Development Bank 27 B. Asia Foundation and Transparent Accountable Governance 28 C. Australian Agency for International Development 29 D. Canadian International Development Agency 31 E. Japan 32 F. New Zealand Aid for International Development 33 G. United States Agency for International Development 33 H. The World Bank 33

Training Programs and Courses in LFPM Offered by Local Institutions

42

A. Ateneo School of Government 35 B. Asian Institute of Management 36 C. Development Academy of the Philippines 36 D. Local Government Academy 37 E. Institute of Development Management and Governance, UP Los Baños 38 F. Local Governance Training and Resource Institutes Philippine Network 38

ii

7. Institutional Arrangements

40

Methods of Tapping LGU Beneficiaries 40 Forms of Working Arrangements 40 Provision of LFPM Support as Mandate 43 Interest for Partnership with EPRA 44

8. Facilitating Factors in LFPM

45

Objectives of Support 45 Political Feasibility 46 Staff Behavior 47 Institutional Processes 48 Participatory Approach 49 Financial Accountability 50 Financial Transparency 50

9. Description of Constraints in LFPM Assistance

53

Common Areas of Confusion 53 Difficulties 54 Not Difficulties 55

10. Gaps and Overlaps in LFPM

59

Mismatch of LFPM Assistance with Current Demands in Local Governments 59 Competing or Conflicting Roles of Government Institutions 60 Weak Coordination Among NGOs to Consolidate and Direct their Assistance to LGUs

60

Loose Internal LGU Financial Management 61 IRA-Related Issues 62 Grey Areas in Local Development Planning 63 11. Summary of Findings

64

Limited LFPM Institutional Assistance at the Local Level 64 Role Differentiation Not Meeting Current Needs 64 Fiscal Performance and Managerial Enhancement 64 Matching of Assistance with Current Demands 66 Harmonization of Functions among Government Institutions 67 Enhancing the Functioning of Networks 68 Strengthening the Internal Financial Management of LGUs 68 References

72

Appendix Table

73

Appendices

75

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LIST OF TABLES

TABLE TITLE PAGE

1 Process Flow of Discussion of LFPM Assistance 6 2 Types, Description, Areas of LFPM, and Nature of Assistance 7 3 Gawad Galing Pook Applicants and Awardees by Categories 9 4 Sources of LGU Revenues 14 5 Types and Nature of Assistance by Groups of Providers 15 6 LGUs with Bond Issuance 18 7 LGUs with BOT Projects 20 8 Areas of LFPM and Assistance Provided in Each Area 26 9 List of LFPM and LFPM-Related Courses and Providers 39 10 Number of Organizations with Mandate to Provide Support in LFPM 43 11 Number of Organizations with Interest for EPRA Partnership 44 12 Seven Facilitating Factors in LFPM 45 13 Percentage Scores of the Objectives of Support 46 14 Percentage Scores on Political Feasibility 47 15 Percentage Scores on Staff Behavior 48 16 Percentage Scores on Institutional Processes 49 17 Percentage Scores on Participatory Approach 50 18 Percentage Scores on Financial Accountability 51 19 Percentage Scores on Financial Transparency 52 20 Assessment of Funding Limitations 54 21 Scarcity of Individual Competence 55 22 Assessment of Linkaging Activities 56 23 Assessment of Information Dissemination 56 24 Assessment of Interest of Local Officials 57 25 Assessment of Political Interference 57 26 Assessment of Policy Conflict 58 27 Assessment of Geographical Dispersion of LGU Beneficiaries 58 28 Least Provided LFPM Assistance 59 29 Gaps and Overlaps in LFPM Assistance 61 30 Some Potential Policy Action Arenas for EPRA 70

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LIST OF FIGURES

FIGURE TITLE PAGE

1 Operational Framework for the Institutional Mapping of Support Systems to LFPM and Institutional Analysis

3

2 Outputs from Support to LFPMS 42 3 LFPM Assistance Map 65 4 Competency-Based Education Framework for Oversight Function in

Academic Institutions

67

LIST OF APENDIX TABLES

APPENDIX TABLE

TITLE PAGE

1 Inventory Count of Support in LFPM 73 2 Inventory of Support (In Percentage) 74

LIST OF APPENDICES

APPENDIX TITLE PAGE

A List of Respondents 75 B Selected List of Books, Researches, and Studies on Local Financial

Planning and Management 79

C Survey Questionnaire 85

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ACRONYMS AND ABBREVIATIONS ADB Asian Development Bank ADMU Ateneo de Manila University AGIA Association of Government Internal Auditors AIM Asian Institute of Management ALRF Assessment Loan Revolving Fund APP Annual Procurement Plan ARMM Autonomous Region of Muslim Mindanao ASF Andres Soriano Foundation ASG Ateneo School of Government AusAID Australian Agency for International Development BLGD Bureau of Local Government Development BLGF Bureau of Local Government Finance BLGS Bureau of Local Government Supervision BOT Build-Operate-Transfer BTEP Business Tax Enhancement Program CBETA Competency-Based Education, Training, Assessment, and Accreditation CBO Community-based Organizations CBRM Community-Based Resource Management CCPSP Coordinating Council for Private Sector Participation CD Community Development CDD community-driven development CDS City Development Strategies CHED Commission on Higher Education CIDA Canadian International Development Agency CLRG Center for Local and Regional Governance CLUP Comprehensive Land Use Plan COA Commission on Audit CREMDEC Cebu City Resource Management and Development Center CSO Civil Society Organization CSC Civil Service Commission DA Department of Agriculture DAP Development Academy of the Philippines DAR Department of Agrarian Reform DBM Department of Budget and Management DBP Development Bank of the Philippines DILG Department of Interior and Local Government DLSU De La Salle University DOF Department of Finance DSWD Department of Social Welfare and Development DTI Department of Trade and Industry EPRA Economic Policy and Reform Advocacy Program GFIs Government Financial Institutions GIS Geographic Information System GOCCs Government Owned and Controlled Corporations GOP Government of the Philippines GPRA Government Procurement Reform Act HRD human resources development IDMG-UPLB Institute of Development Management and Governance, University of the Philippines

Los Banos IEC Information, Education and Communication IFIs International Financial Institutions ILO International Labor Organization IPD Institute of Politics and Development

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IRA Internal Revenue Allotment IT information technology JBIC Japan Bank for International Cooperation JFLFI Julio and Florentina Ledesma Foundation, Inc. JICA Japan International Cooperation Agency JSDF Japan Social Development Fund KALAHI Kapit-Bisig Laban sa Kahirapan LBP Land Bank of the Philippines LCE Local Chief Executive LCP League of Cities of the Philippines LDC Local Development Council LFPM Local Financial Planning and Management LGA Local Government Academy LGC Local Government Code LGSP Local Government Support Program LGSPA Local Government Support Program in ARMM LGU Local Government Units LGUGC LGU Guarantee Corporation LLDA Laguna Lake Development Authority LOGOFIND Local Government Finance and Development Project LoGoTRI-PhilNet Local Governance Training and Resource Institutes Philippine Network MDF Municipal Development Fund MDFO Municipal Development Fund Office MNLF Moro National Liberation Front MOA Memorandum of Agreement MST Multi-stakeholder Team NATCCO National Confederation of Cooperatives NCPAG-UPD National College of Public Administration and Governance, University of the Philippines

Diliman NDCC National Disaster Coordinating Council NEDA National Economic and Development Authority NGA National Government Agency NGAS National Government Accounting System NGOs Non-Government Organizations NZAID New Zealand’s International Aid and Development Agency OCOV One Cluster, One Vision for Local Government ODA Official Development Assistance PACAP Philippines-Australia Community Assistance Program PAGBA Philippine Association of Government Budget Administrators PAHRDF Philippines-Australia Human Resource Development Facility PALS Philippines-Australia Local Sustainability PASTT Philippines-Australia Short-Term Training Facility PATSARRD Philippines-Australia Technical Support for Agrarian Reform and Rural Development PBSP Philippine Business for Social Progress PDF project development facility PICPA Philippine Institute of Certified Public Accountants PNB Philippine National Bank PO Peoples Organisations PSEEAP Public Service Excellence, Ethics and Accountability Program PSLP Asia Public Sector Linkages Program PTTAF Policy, Training and Technical Assistance Facility PVB Philippine Veterans Bank RA Republic Act RPT Real Property Tax SEC Securities and Exchange Commission TA Technical Assistance

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TAG Transparent Accountable Governance UNDP United Nations Development Programme UP University of the Philippines UPOU University of the Philippines Open University UPSURP UP School of Urban and Regional Planning USAID United States Agency for International Development WB World Bank WDDp Water District Development Project WWF Worldwide Wildlife Foundation

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PREFACE AND ACKNOWLEDGMENTS This final report on the project “Institutional Mapping and Analysis of Organizations’ Efforts, Initiatives, and Assistance to Local Financial Planning and Management (LFPM)” identifies and describes the various support provided to the LGUs in the form of efforts, initiatives, and assistance in LFPM. The project aims to provide an inventory and a consolidated report on organizations or institutions that support the progress of financial planning and management in LGUs.

This is the first time that the theme of local financial planning and management has been mapped and reported. The results will provide the Economic Policy and Reform Advocacy (EPRA) program a significant opportunity to gain a general understanding of and explore possible solutions to LFPM directly from institutional providers and beneficiaries. Thus, the study also determines the most important needs as well as constraints and challenges in LFPM that can, in the long run, help LGUs manage their LFPM effectively and efficiently. The project commenced in late January 2006. The preparatory work and data gathering for a national inventory of institutions started on the second week of February and ended in March 2006. This study is the collective efforts of individuals who have shared their ideas and time. The project gratefully acknowledges EPRA and its Executive Director, Dr. Cielito Habito, for believing in the research study and for extending the necessary expert guidance to the project. Ms. Deanna Lijauco, Ms. Gmelina Guiang, and the rest of the EPRA staff provided practical inputs and overall management support for the project. Mr. Austere Panadero, Assistant Secretary of the DILG provided constructive suggestions. The Leagues of Cities of the Philippines and its president, Mayor Jerry Trenas endorsed the survey and Executive Director Atty. Gil Cruz and Ms. Hazel Biniza facilitated the survey through his assistance. Mr. Norberto Malvar and Ms. Pamela Quizon of the BLGF shared their invaluable insights on the current situation of local finance. Dean Corazon Abansi of De La Salle Lipa shared insightful comments on the survey checklists. Mr. Gorgonio R. Virrey, Ms. Carla Gonzales-Jimena and Ricardo G. Buraga provided administrative assistance and Dr. Serlie Barroga-Jamias helped in editing the report.

Finally, the respondents—staff and officials of national government agencies, local government units (LGUs), NGOs, international donors, and academic institutions—who provided vital contributions as active participants and inspirations. This Institutional Mapping Report would hopefully assist LGUs and institutions to take actions where LFPM assistance is needed most.

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1. INTRODUCTION

1.1 The Local Government Code (LGC) of 1991 (Republic Act No. 7160) has changed many features of Philippine local governance. The Code enables the local government units (LGUs) to exercise their power to create and broaden their own sources of revenue and claim their right to a just share in national taxes. It also gives the LGUs the power to levy taxes, fees or charges that would accrue exclusively for their use and disposition. Thus, LGUs no longer confine themselves with the traditional sources of revenues; they are also engaged in credit financing, bond floatation, and other non-traditional schemes to enable them to finance local development programs and projects. More importantly, they can avail of credit facilities from both public and private financial institutions to finance infrastructure and other socio-economic development projects. This fiscal decentralization afforded to LGUs has made sound local financial planning and management (LFPM) very important in Philippine local governments. 1.2 Following the grant of autonomy to LGUs, some organizations have opened opportunities for LGUs to improve their capacity to raise revenues and to spend money for effective governance and delivery of important basic services to their constituents. The national government, in particular, has provided facilities to enhance the capacity of local governments in planning and managing their financial resources. International organizations and funding agencies have provided funding sources not only to strengthen the management capacity but also to realize the development goals of the LGUs. Both public and private financial institutions have offered options to finance local development initiatives. The non-government organizations (NGOs) have also re-focused their strategies to enhance participatory local governance among many LGUs. Furthermore, academic institutions have continued to support the LGUs in discovering new technologies and in disseminating knowledge. 2. RATIONALE FOR THE STUDY 2.1 Years after the enactment of the Code in 1991, the idea of complete autonomy for LGUs has yet to be fully realized. The LGUs have not fully exercised their inherent fiscal powers as autonomous governments. Indeed, it is generally believed that the local governments have not explored the available financial packages within their reach. Currently, less than 10 percent of all the 1,696 LGUs exercise their new financing mandate (Amatong, 2005). Only 21 or 1.24 percent of all LGUs have issued bonds (BLGF, 2005) and only 15 or 0.88 percent have build-operate-transfer (BOT) projects (BOT Center, 2005). The Galing Pook Foundation (2006) has documented only 8 (4.8%) of 171 awardees that are finance-related. Given the multitude of support mechanisms and policies of the organizations involved in the development of financial planning and management, it is necessary to conduct an institutional study that will determine the status of support provided by the various organizations. 2.2 The general powers and attributes of LGUs in the Philippines are found in Chapter 2 of the LGC of 1991 which explicitly described the political and corporate nature of LGUs. Section 14 states that “when a new local government unit is created, its corporate existence shall commence upon the election and qualification of its chief executive and a majority of the members of the sanggunian.” This is further reinforced by Section 15 which states “every local government unit is a body politic and corporate endowed with powers to be exercised by it in conformity with law. As such, it shall exercise powers as a political subdivision of the national government and as a corporate entity representing the inhabitants of its territory.” LFPM is broadly classified under the corporate functions and powers of the LGUs. Since

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the enactment of the Code in 1991, however, the corporate functioning seems to be the weakest link in the financial management chain of the LGU. 2.3 This study consists of an institutional mapping of on-going support to LFPM and an institutional analysis of selected LGUs through a case documentation of innovative LFPM practices that harness inter-local cooperation. The institutional mapping identifies and describes the various forms of support—efforts, initiatives, and assistance—provided to LGUs; these terms are used interchangeably in this study. Institutions cover all forms of organizations: government and non-government organizations, international finance institutions, and academic institutions. The mapping is divided into two phases: (1) inventory and consolidation of organizations or institutions, and (2) interpretation of data to determine the following: organizational relevance, importance and impact on the Economic Policy and Reform Advocacy (EPRA) Project; difficulties and constraints; facilitating factors; and gaps and overlaps. 2.4 The institutional analysis also has two phases: (1) selection of LGUs, and (2) analysis of selected LGUs. The latter assesses the extent of involvement and participation of the LGUs’ Local Finance Committees and Local Development Councils in the planning and budget management processes, in the authorization procedures, and in the leadership patterns in the planning process. The second phase evaluates processes that underlie the LGUs’ LFPM practices and their openness to partner with the EPRA Project. 2.5 The baseline information generated will assist the EPRA Project and its multi-stakeholders team (MST) in identifying priority action arenas and in exploring partnerships with other players engaged in LFPM. The study can also provide various institutions some bases for strategic thinking and policy directions which may redound to the best interest of the LGUs and the communities. The study is the first comprehensive initiative on LFPM mapping in the Philippines, thus the information will constitute the principal database in LFPM assistance to the country. 2.6 Basically, the study was constrained by the lack of comprehensive and available baseline information to establish LFPM assistance. Updated directories of institutions in local governance and development were also hard to find, hence forcing the researchers to exert extra effort in identifying the respondent institutions. Further, there were really no specific persons in the LGUs who can claim direct LFPM responsibilities. 2.7 Because only a few institutions were fully engaged in LFPM, the study made an inventory of institutions covering sector-specific programs and projects with thrust in local governance. This way, the study was approached in both contexts: (a) with LFPM as the main field of service of the institutions, and (b) with LFPM as a component of programs and projects. 2.8 Theoretically, the study reflects a commitment to serious institutional and managerial improvements (Frederickson, 1999) with particular focus on implementation and achievement of results not only on policy and planning but on the involvement of some stakeholders in both planning and implementation (Clark, 1996)). The study is current and fits into the needs of those engaged in research in contemporary governance practices.

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3. RESEARCH FRAMEWORK AND METHODOLOGY

Research Framework 3.1 The study was carried out in project phases following the operational framework in Figure 1.

Figure 1. Operational Framework for the Institutional Mapping of Support Systems to LFPM and Institutional Analysis

3.2 Preparatory Phase: This phase covered a co-development of expectations with EPRA Project. The key tasks in this phase included the development of needs and expectations and an agreement on project objectives, measurable expectations, methodology, work plan and timetable. 3.3 Phase 1: This phase involved identifying and contacting the various public and private entities working with LGUs in LFPM. The institutions were sampled from a list initially prepared by the researchers except for a complete enumeration of cities and provincial LGUs. The institutions contacted included the following:

Number of Organizations Response Surveyed Responded Rate GROUP 1 International Finance Institutions (IFI) 5 5 100 Non-government Organizations (NGOs) 220 20 9.09 Academic Institutions 35 17 48.57

COMPONENT A INSTITUTIONAL MAPPING

COMPONENT B INSTITUTIONAL ANALYSIS

Phase 1 Phase 2 Phase 3 Phase 4

Selection of LGUs

• Selection criteria

• Selection process

LGU Analysis • LFPM process • Involvement and

participation • Authorization

procedures • Leadership patterns • Practices • Partnership potential

Inventory of Organizations/

Institutions • International

financial institutions

• Non-government

• Academic institutions

• Government

Interpretation of Data

• Roles and relevance of organizations

• Difficulties and constraints

• Facilitating factors

• Gaps and overlaps

4

Sub-total 260 42 16.15 GROUP 2 National Government Agencies (NGAs) 19 18 94.74

Government Owned and Controlled Corp. (GOCCs) 3 3 100.00

Sub-total 22 21 95.45 GROUP 3 Provinces 79 14 17.72 Cities 112 34 30.36 Municipalities 142 12 8.45 Sub-total 333 62 18.02 GRAND TOTAL 615 123 20.00

3.4 An inventory of organizations and institutions that provided assistance in LFPM was then produced. Majority of data on the international finance institutions’ (IFIs) assistance were gathered through secondary information as these assistance fell under country assistance programs. 3.5 The 11-page checklist type of survey focused on two areas: (1) purely financial planning and management, and (2) financial planning and management-related initiatives. The survey questionnaires were sent to key informants via postage and electronic mail. The response rate was 20 percent. 3.6 The major reason given by the LGUs for not returning the survey questionnaires was that they did not have any assistance programs for other LGUs except for those in their respective barangays. The NGOs, on the other hand, whose programs/projects were sector-specific, did not have direct LFPM assistance, but the assistance naturally followed in project implementation. Majority of the sent emails bounced back, indicating that NGO directories were not updated. Thus, the survey was followed-up through telephone calls or by physically going to each of the concerned offices. 3.7 The key informants for Group 1 were mostly directors (32.43%) and executive directors (13.52%). Group 2 composed mostly of auditors (45%) and directors (22.7%). Group 3 composed of local financial and administration teams, mostly planning and development officers (45.0%). 3.8 Phase 2. In this phase, results of the study were interpreted and analyzed to extract meanings that would be helpful to EPRA in developing its policy reform agenda and strategic approaches. The role(s) of the different organizations and institutions in the development of financial planning and management in LGUs were identified. The strength of support extended by organizations and institutions to LGUs in terms of relevance, importance, and impact were assessed. Problems faced by the organizations and institutions in terms of difficulties and constraints were appraised. Facilitating factors of the organizations and institutions in the provision of support were identified. Gaps and overlaps in the initiatives, efforts, and assistance to LFPM were also determined. LFPM lessons for the future of local governments were likewise drawn. 3.9 Phase 3 and Phase 4. These phases involved the (a) development of a set of criteria to select LGUs for case studies, and (b) analysis of LGUs with innovative and locally-harnessed practices. The

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theme of all the case studies was “Inter-LGU Collaboration in Local Financial Planning and Management.”

3.10 There were three variations of the theme:

Case 1: A city and three municipalities (in Luzon) Case 2: A province and three municipalities (in the Visayas-Mindanao areas); and Case 3: A metropolitan city and barangays

3.11 The cases focused on the practices of the LGUs in collaborating with other LGUs in LFPM. In addition, the case studies involved an in-depth institutional analysis of the selected LGUs based on the following:

a. Extent of involvement and participation of the Local Finance Committee and Local

Development Council in the planning and budget management processes; b. Authorization procedures and leadership patterns (factors that determined the ascent to

and maintenance of the position of power and the leaders’ relationship with their followers, network of influence, and access to political power above the barangay level) in the planning process;

c. Evaluation of factors which underlie practices in LFPM and in budget formulation and

execution, such as the information rules, information routines, incentive structures, and level of transparency and accountability; and

d. Openness or willingness of selected LGUs to partner with the Ateneo-EPRA Project.

Process Flow of Discussion 3.12 This report has four major parts – types and nature of assistance; institutional arrangements; facilitating factors and constraints; and policy directions for the EPRA Project (Table 1). The study proceeded with the general problem question: “What is the status of assistance provided by institutions to the development of LFPM in the Philippines?” In so doing, the types of assistance provided to LGUs and their concomitant nature were inventoried or mapped. The report revolved around the seven identified areas of LFPM, categorized as (a) purely financial planning and management areas, and (b) financial planning and management-related areas. These form Part I of the report. 3.13 Part II discusses the institutional arrangements including the identification of methods of tapping the LGU beneficiaries, working arrangements of institutions with LGUs including the terms and conditions of support provided, provision of LFPM support as a mandate, and interest for partnership with the EPRA Project. The benefits derived from the assistance as well as the satisfaction of work relationships are also documented. 3.14 Part III presents the facilitating factors like objectives of support, political feasibility, staff behavior, financial accountability and transparency, and the approaches used in the assistance. The constraints in LFPM assistance are described in terms of common areas of confusion and difficulties. Also discussed are the major gaps and overlaps in LFPM assistance.

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3.15 Part IV discusses the policy options for EPRA and the identification of proposed interventions in addressing the gaps identified in Part III. A set of action arenas was developed for EPRA and its MST together with the summary of findings.

Table 1. Process Flow of Discussion of LFPM Assistance

Part I. Types and Nature of Assistance Part II. Institutional Arrangements List all types of assistance provided to

the LGUs. Describe the nature of assistance. Identify the areas of LFPM where

assistance is provided.

Identify the methods of tapping LGU beneficiaries

Identify the institutional arrangements in LFPM assistance.

Determine whether provision of support is an organizational mandate.

Assess the interest for partnership with EPRA.

Identify the benefits derived from LFPM assistance.

Part III. Facilitating Factors and Constraints

Part IV. Policy Directions for EPRA

Determine the facilitating factors in LFPM assistance.

Identify the difficulties in LFPM assistance.

Identify major gaps and overlaps in LFPM.

Suggest policy options for the EPRA’s MST.

4. TYPES AND NATURE OF LFPM ASSISTANCE 4.1 This section reports the assistance of various institutions to the LGUs. The institutions were classified into groups as follows:

• Group 1: IFIs, NGOs, and academic institutions • Group 2: National government agencies (NGAs) and government owned and controlled

corporations (GOCCs)

• Group 3: LGUs (provinces, cities, and municipalities)

4.2 Altogether, the study covered around 123 institutions broken down into Group 1 (42), Group 2 (21), and Group 3 (62). Making an inventory of institutions directly engaged with LGUs on LFPM proved to be difficult because majority of these institutions were involved with LGUs on sector-specific interventions. These interventions were project or program-based in traditional development areas of health, education, agriculture and rural development, environment, and others. LFPM was a consequential management function of these projects/programs. 4.3 The type of LFPM assistance was three-fold: financial assistance, technical assistance, and policy assistance. Financial assistance refers to direct financial assistance and credit financing either through

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loans or grants. Technical assistance refers to the deployment of experts, capacity building, and non-cash support. Policy assistance refers to assistance in developing the regulatory framework and policy directions in LFPM. This definition of LFPM assistance builds upon the initial description of financial management assistance to LGUs as provided by the Local Government Support Program of the Canadian International Development Authority (LGSP-CIDA) where assistance falls only into two categories: financial assistance and technical assistance (LGSP, 2004). 4.4 The nature of assistance was classified as program/project assistance, financial assistance, equipment/facility donation, awards system, policy support, networking/linkaging, planning support, capacity building support, and research studies/surveys. Thus, LFPM covers more than the commonly conceived notion or perception of solely financial assistance. 4.5 To better map the assistance being provided by institutions to LGUs, the study considered the following as the “general areas of LFPM”: (a) purely financial planning and management areas; (i) revenue generation, (ii) accounting, and (iii) budgeting; and (b) financial planning and management-related areas: (i) internal auditing, (ii) local economic development, (iii) local development planning, and (iv) procurement process. Table 2 provides the types, description, and nature of assistance and the areas of LFPM.

Table 2. Types, Description, Areas of LFPM, and Nature of Assistance

Types Description Nature of Assistance Areas of LFPM Financial Assistance

• Direct financial

assistance • Credit financing

(loans)

Technical Assistance

• Deployment of experts • Capacity building • Non-cash support (e.g.,

infrastructure) • Accessing grants and

financial assistance

Policy Assistance

• Regulatory framework • Policy directions

• Program/project • Financial assistance • Equipment/facility

donation • Awards system • Policy support • Networking/ linkaging • Planning support • Capacity building

support • Research

studies/surveys

• Revenue generation • Accounting • Budgeting • Internal auditing • Local economic

development • Local development

planning • Procurement process

4.6 The assistance provided by the three groups of institutions can be summarized as financial assistance, technical assistance, and policy assistance. IFIs provide a complete package of all three types of assistance. Their framework of assistance can be classified as donor assistance and this assistance can be considered as sector-specific interventions under infrastructure development, agriculture and rural development, basic social services, environmental management, good governance, and regional development. Financial assistance is delivered through loans and borrowings by projects. Generally, financial assistance has a technical assistance component.

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4.7 There are very specific assistance initiatives of IFIs under LFPM like (a) the World Bank’s Islands of Good Governance, Local Government Finance and Development Project (LOGOFIND), and Re-Engineering Program under the Department of Budget and Management (DBM); (b) the Asian Development Bank’s (ADB) technical assistance (TA) on strengthening local government finance and budgeting; and (c) the Siquijor Integrated Rural Development Program (SIRMAP) of the German Development Cooperation. SIRMAP emphasizes local economic development and administrative simplification of procedures/ operations as routes for both community development and management capability building. SIRMAP focuses on harnessing interlocal cooperation of doing things together to maximize local capacities and resources. 4.8 The United States Agency for International Development (USAID) assists Philippine institutions in undertaking programs to improve efficiency, transparency and accountability. USAID’s programs seek to achieve improved performance of selected government institutions. Through its Livelihood Enhancement and Peace (LEAP) Program (and LEAP's predecessor programs), USAID has assisted, or is assisting, some 21,000 former Moro National Liberation Front (MNLF) combatants to become commercial producers of corn, rice or seaweed. It has also provided consultants for the BOT to enhance LGUs alternative sourcing of funds. ADB, however, has significantly targeted local financial management as its intervention focus in many of its technical assistance. 4.9 There seems to be a consensus among donors to promote equitable sharing of the benefits of economic growth, reduce poverty at a faster pace, and enhance the self-reliance and service delivery capacity of local governments. Direct LFPM assistance falls under the good governance framework and becomes secondary to other frameworks. 4.10 In the NGOs’ group, results showed that barely half of the NGO respondents actively extended their operations to assist LGUs in LFPM for two reasons. First, specific programs and projects of NGOs were found to have only circumstantial level of assistance to LGUs as one of the former’s beneficiaries. Second, the most frequent NGO/CBO tasks have been community mobilization and capacity building outside LFPM. In other words, LGUs are just one of the target beneficiaries of NGOs. Further, the services of NGOs are mostly outside of LFPM. 4.11 It is generally believed, however, that the increased involvement of NGOs in capacity building has increased the LGU’s demands upon them for their capacity and expertise development. Most respondents cited capacity building, more than any other kind of assistance, as the form of support given by the NGOs to LGUs. 4.12 NGOs’ support to the LGUs was seen as an indirect result of their day-to-day operations. Only two of the NGOs inventoried – the Julio and Florentina Ledesma Foundation, Inc. (JFLFI) and the Cebu City Resource Management and Development Center (CREMDEC) – had specific programs to increase the LGUs’ revenue generation through real property taxation and business permits and licenses. Most of the respondents that supported revenue generation, such as the Center for Community Transformation, the Andres Soriano Foundation, and the National Confederation of Cooperatives (NATCCO), were involved in providing policy support, strategic planning, and capacity building - common assistance provided by NGOs to the LGUs. Institutions such as the Worldwide Wildlife Foundation (WWF) Philippines have supported LGUs in revenue generation through the User Fee System program that it has been implementing in dive sites across the country. 4.13 Since these NGOs’ projects aimed to promote sustainable economic and rural growth through poverty reduction and equity programs, the NGOs would consequently be directly involved with the local

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governments. CREMDEC was involved in both financial accounting and reporting, in assisting with the establishment of the new government accounting system through awards systems, and in providing technical assistance and capacity building programs. Its operation was highly tied with Cebu City’s local development initiatives, which included accounting and transparency programs. 4.14 Since the inception of the Gawad Galing Pook Innovations and Excellence in Local Governance Awards, a total of 1,592 applications have accepted from the LGUs (Table 3). Of these, 171 (10.7%) have been awarded as models of exemplary and innovative local governance practices in the Philippines. It is noteworthy that of the 128 entries in local administration and management, only 15 got awards, eight of which (or 4.6% of the total awardees) were finance-related. Also, local administration and management (where LFPM belongs as a category) was ranked only 7th in exemplary practices. 4.15 Among the LGUs awarded in finance-related initiatives were (a) Cebu City’s tax computerization project (1994); (b) Binangonan, Rizal’s increased tax collection (1995); (c) Tagaytay City’s financial engineering (1998); (d) San Fernando City, Pampanga’s tax mapping to break financial barriers (2000); (e) Muntinlupa City’s real property tax computerization and administration project (2000); (f) Nueva Vizcaya’s reformed the real property tax system (2002); (g) Cabuyao City’s streamlined business permit process through the one-stop-shop (2002); and (h) Quezon City’s improved revenue collection and spending (2003). 4.16 LFPM is also classified under the enterprise and livelihood development award. Seventeen (6.4%) of 266 LGU applicants have been given this award. Despite the recognition given to the two LFPM areas – financial management and enterprise/livelihood development – however, these have not created as much impact as initiatives in environmental protection and welfare services. This reflects that priorities given by LGUs to LFPM initiatives have not merited recognition by award giving bodies or worse, may not have created enough impact to merit recognition. Nonetheless, this shows that LFPM is a rich area for engaging the assistance of LGUs.

Table 3. Gawad Galing Pook Applicants and Awardees by Categories Program Categories Number of

Applicants Number of Awardees

Rank

Environmental Protection 322 42 1 Enterprise and Livelihood Development 266 17 4 Health and Nutrition 240 16 5 Welfare Services 174 21 2 Agriculture 155 18 3 Local Administration and Management 128 15 7 Service Delivery 89 Education 78 8 9 Protective Services 75 16 6 Housing program 65 Integrated Area Development 10 8 Infrastructure Services 8 10 Total 1592 171

Source: Galing Pook Foundation, 2006 4.17 The LGUs’ need for LFPM assistance is an area which NGOs are indirectly supporting as part of their local development efforts. Due to the importance given to NGOs, their efforts in all activities that

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they are spearheading must be coordinated. The ADB, for instance, has recognized the capabilities of NGOs in their development programs. In a 1999 study1, ADB stated that since 1990, 25 percent of all ADB projects have had some form of NGO/community based organizations’ (CBO) involvement, and in 1998, more than US$2 billion (49% of all ADB projects) incorporated NGO/CBO activities. 4.18 The academe’s main contribution in LFPM is technical assistance, especially in capacity building and deployment of experts. Notable is the emergence of curricular programs in governance for LGUs in various schools. Among these are the Ateneo de Manila University through the Ateneo School of Government; the University of the Philippines (UP) Diliman though the National College of Public Administration and Governance (NCPAG); the UP Los Baños through the Institute of Development Management and Governance (IDMG); the UP Open University (UPOU); the De La Salle University through the Institute of Governance; and the Development Academy of the Philippines (DAP). 4.19 The Ateneo School of Government offers the Master in Public Management, major in Local Governance, now a customized off-campus program to specific LGUs. The pilot program of this type started in 2005 in the City of Calapan where local officials and employees enjoyed a scholarship grant of the city government. The NCPAG of UP Diliman has a long-standing executive education program for Local Chief Executives. The NCPAG and UPOU have a collaborative offering - the Master in Public Management via distance education. The IDMG of the College of Public Affairs of UP Los Baños offers a Masters degree in Public Affairs, major in Local Governance and Development. The degree’s enrollees alone comprise 10 percent of the total graduate students in UP Los Baños. This program offers fiscal management in LGUs as a major course. Meanwhile, assistance to LGUs comes in the form of on-call individual deployment of faculty experts and occasional institutional researches with academic partners here and abroad. The Certificate in Barangay Administration Program of the UP Open University also emanated from IDMG. The DAP has a Master in Public Management (MPM), major in Local Governance Management, with Local Fiscal Management and Resource Mobilization as a major course. 4.20 Local governance programs have likewise emerged in other universities in the provinces. The University of San Agustin in Iloilo City has a Resource Center for Public Management and Governance providing support to LGUs. The Resource Center was established specifically to support the university’s extension work, thus, in effect, institutionalizing the latter’s efforts to build the LGUs’ capability. The Mindanao Center for Local Governance of the Mindanao State University assists LGUs, mostly barangays of Lanao Sur and LGSP partner LGUs, on capacity building. Specifically, the center conducts local development planning seminars and researches on business permits and licenses. However, majority of LFPM assistance outside Metro Manila can be classified as seminars and trainings only. 4.21 The NGAs exercise their regulatory mandates and extend their activities to LGUs. The Bureau of Local Government Finance (BLGF) of the Department of Finance (DOF), the Department of Interior and Local Government (DILG), the Commission on Audit (COA), and the National Economic and Development Authority (NEDA) lead the government agencies in providing support to LFPM. The most common forms of BLGF assistance are in real property taxation (RPT) especially in tax mapping, revisions of the Real Property Tax Administration (RPTA), databasing of RPTs, and information support. 4.22 The DILG has the Local Government Academy (LGA) as its primary training arm. The LGA was created as a national training institution that would coordinate, synchronize, rationalize, and deliver training programs for local governments. One category in LGA’s training program is Fiscal Management, which includes two major courses: (a) Professionalizing Local Fiscal Managers: A Key to Greater Local Fiscal Autonomy, and (b) Seminar/Workshop on Resource Mobilization and Updating the Local Revenue Code. In practice, there are other departments in the DILG that cater to the training of LGUs. However,

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the LGA has one of the most expansive training programs in LFPM. The COA likewise has its own training unit that caters to both its own pool of state auditors and to officials and employees of LGUs. It also provides customized training programs, particularly on updates in the New Government Accounting System (NGAS) to certain LGUs or clusters of LGUs. 4.23 Also worth noting is the monitoring and evaluation nature of assistance provided by the NGAs. This study, however, reflected a ‘diminished role’ of NGAs as monitors of the decentralized modes of LGU operations. 4.24 Key assistance can be understood by examining the mandates of each government institution. The Land Bank of the Philippines (LBP), for example, provides a wide range of institutional credit as part of its LGU institutional strengthening program. Its lending program to LGUs includes financing for local infrastructure and other socio-economic development projects in accordance with approved local development plans and investments programs. The bank requires the LGU a counterpart of 25 percent of total project cost. The loans are payable in five years. Similarly, the LBP’s Water District Development Project provides participant LGUs investments on sewerage and sanitation based on the local residents’ wishes and willingness to pay. The bank cost-shares 90 percent while the LGUs provide the remaining 10 percent.

4.25 There are institutional arrangements in co-managing the loans. For example, the LGU appoints a point person to coordinate with the LBP Project Management Office. The LBP also has a Support Credit Program for low-cost housing, health, water systems, flood control and sanitation, and forestry and waste disposal projects with a maximum loanable amount of Php3.0 million. The program is supported by the Japan Bank for International Cooperation (JBIC). Another assistance program is the LBP-LGU Cooperative Strengthening Partnership program, which aims to strengthen capabilities in operations management and sustainability of cooperatives in the LGUs’ locale. This program is a technical assistance program of the LBP funded by LGUs with the LBP providing the necessary information, education and communication (IEC) materials. It is generally recognized that credit financing from government financial institutions (GFIs) is the most popular form of external financing among LGUs.

4.26 To date, the most active GFI in LGU lending is the LBP, with reportedly around Php18 billion in LGU loan portfolio as of yearend of 2001. Privatized former GFI Philippine National Bank (PNB) has released an aggregate of Php6.828 billion to LGUs from 1996 to 2001, while the Development Bank of the Philippines (DBP) had an outstanding LGU portfolio of Php4.659 billion as of the end of February 2002. The Philippine Veterans Bank (PVB), a new player in the LGU market, has so far lent Php677 million to LGUs from 1999 to 2001. 4.27 GFIs were limited to providing direct financial assistance. It was the BLGF that provided the policy and regulatory directions for financial management in local governments. The BLGF played a catalytic role in the effective and sustainable management of fiscal and financial resources of LGUs, transforming them into self-reliant communities. The major services of the BLGF were the following:

• Evaluating and processing of appointment and designation of local treasurers; acting on administrative cases filed against the treasurers;

• Providing technical assistance in the review and updating of local revenue codes; • Rendering opinions and rulings, and issuing circulars and guidelines on local assessment and

treasury operations;

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• Providing financial assistance in the form of soft loan to LGUs for the conduct of (a) general

revision, (b) RPTA project, and (c) business tax enhancement program; • Conducting seminar-workshop on resource mobilization; and • Issuing certificates on the borrowing and debt service capacity of LGUs.

4.28 The increasing demands on the LGUs coupled with bureaucratic challenges have been forcing the BLGF to effectively function based on its mandates. It was also noted that LGUs were not knowledgeable on how to avail of the various service facilities of the BLGF. In fact, a major technical assistance of ADB is the strengthening of the local financial planning and budgeting among LGUs. Such assistance also addresses the functioning of BLGF and helps in developing its capacities beyond being just a processor of appointments for local treasurers as perceived by the LGUs.

4.29 Another model currently being used is the fund conduit and project management model through the Municipal Development Fund Office (MDFO). Here, the MDFO serves as a fund conduit for multilateral loans such as the Community-based Resource Management Program (CBRMP) and the LOGOFIND project of the World Bank. The facility, called LOGOFIND, has funding support from the World Bank and targets mainly the lower income class LGUs (3rd to 6th income classes). Between 1995 and 2001, the MDFO released Php1.959 billion in loans to LGUs. As to government support, national government allotments to LGUs by type of funds were the following: Municipal Development Fund, Countrywide Industrialization Fund, Local Government Empowerment Fund, Local Officials Insurance Premium Fund, UF-Municipal Development Fund, UF-Support for Foreign-Assisted Projects, Special Financial Assistance to LGUs, Foreign-Assisted Projects Support Fund, and Poverty Alleviation Fund. The total amount allocated to these funds varies from year to year depending on the General Appropriations Act. The MDFO is being considered as a GOCC in the future. 4.30 The decentralization of fiscal responsibilities also gave rise to intergovernmental fiscal transfers. The LGUs receive financial assistance from the national government in the form of revenue sharing through the Internal Revenue Allotment (IRA). Tobacco-producing LGUs share from the tobacco excise taxes as provided for in Republic Act 7171 and Memorandum Order No. 61. National governments also provide grant mechanisms like the Local Empowerment Fund, the DepEd School Building program, the President’s Bridge program, the President’s Social Assistance Fund and the Philippine Development Assistance Fund, commonly referred to as pork barrel. These grants are usually provided to assist LGUs in their special expenditures during calamities and emergencies and to mobilize LGUs towards national government priorities. An example is the assistance provided by the National Disaster Coordinating Council (NDCC) under the Department of National Defense (DND) during calamities and emergencies. These grants are administered by various national government agencies. 4.31 National budget transfers to LGUs consumed 22.5 percent of the national government’s annual revenue collections. At the same time, only 32.6 percent of LGU expenditures were financed by local revenues (Capuno, 2002). For a large percentage of LGUs, the share of own revenues was considerably lower. This growing gap between LGU expenditures and generated revenues is being filled by expanding transfers from the national budget through the IRA. Support in revenue generation was dominant in real property taxation and business permits and licenses and obscure in build-operate-transfer (BOT) schemes and municipal bond floatation. This clearly indicates that organizations and institutions provide support in the traditional areas of revenue sourcing. Non-traditional areas are yet to be explored by those providing assistance to LGUs.

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4.32 Alternative revenue generation sourcing like municipal bonds and BOT schemes are relegated only to project development and policy support. A noticeable absence of assistance in this area from the academe is noted. The long history of centralization is still seen in the traditional modes of revenue sourcing. The results confirm previous studies that local development projects are largely financed through four mechanisms: (a) directly by government/commercial financing institutions; (b) through the line departments using the LGUs’ own budget/shares (IRA); (c) borrowings from international financing institutions by the national government; and (d) co-financing by LGUs and NGOs. 4.33 The LGUs’ LFPM assistance to other LGUs was in both policy and technical assistance. Policy assistance refers to building up a regulatory framework (e.g., tax collection policies and revenue codes). Direct technical assistance through grants and donations is provided by higher levels of LGUs to their own barangays. Most LFPM assistance to barangays was in information support on revenue enhancement, which the barangays were currently engaged in. Activities for LFPM assistance provided by LGUs to other LGUs included: (a) enactment of municipal/city/barangay ordinances pertaining to local taxation and revenue code; (b) assessment of real property and analysis of revenue collection; (c) scholarship grants; (d) financial grants and other donations to LGUs; (e) seminar and information support on revenue enhancement; (f) active participation in leagues; and (g) establishment of one-stop shop processing centers and their replicates in different areas. 4.34 Inter-LGU LFPM assistance was noted to be high among the LGUs as part of the performance of their mandate for municipality/city to barangay operation. Other forms of assistance were capacity-building through networking and linkaging using study tours and exchanges. Twenty five percent (25%) of the LGUs provided financial assistance to other LGUs for study tours. Further, trainings were conducted to facilitate local policy directions. Majority of the assistance was in the form of “big brother” type where richer LGUs assisted other LGUs especially in times of emergency. For example, the Cebu provincial government donated Php2 million to the Oriental Mindoro provincial government to assist flood victims in late 2005 (The Governor Newsletter, 2006). Another was a city-province model where Quezon City donated Php5.3 million to the province of Southern Leyte for victims of a landslide (Philippine Star, 2006).

4.35 Table 4 provides a summary of the sources of LGU revenues. Most of the LGUs relied on national government grants/shares with alternative revenue sources (commercial credit, bonds, BOT, etc.) being maximized only by higher income LGUs. Alternative sourcing of revenue is a growth area in LFPM.

4.36 Results of this survey showed a higher response rate from respondents of cities at 30.36 percent (34 of 112 cities) than from municipalities at 8.45 percent (12 of 142). This can be attributed to the revenue capacity or stronger position of cities – income-wise - to assist in LFPM compared to municipalities. Inter-local cooperation and assistance were also emphasized in cities. These results confirm the recent documentation and study of best practices by the DOF which concluded that:

“Fourteen years hence, the situation is both inspiring and disturbing. It is inspiring because a number of LGUs have exercised the initiatives in revenue generation using their new taxing power which funded vital development projects that have brought progress to their provinces and municipalities. What is disturbing is that only a small minority of local governments has taken advantage of the new financing options made available to them. Specifically, of 1,696 LGUs (79 provinces, 114 cities and 1,503 municipalities), less than 10% exercised their new financing mandate. The provincial and the city governments appear

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to be more active in pursuing joint venture agreements and bond issuance compared to municipalities.” (Amatong, 2005)

Table 4. Sources of LGU Revenues LGUs NG

and GFI

Credit

NG Grants/ Shares

BOT Bond Flota- Tion

Donor Assist-

ance (TA)

Commer- cial Credit

Co-financed by LGU

and NGO Majority of LGUs

• •

High Income LGUs

• • • •

Middle Income LGUs

• •

Lower Income LGUs

• • •

Source: Modification of Tan, Roberto, 2004. Global Trends in Financing Sub-National Government and Para-Statal Entities: The Philippine Experience

4.37 In summary, the technical and policy assistance were the two most dominant types of LFPM assistance by institutions. Appendix Table 2 shows that 30.73 percent of the respondent organizations were engaged in capacity building while 18.21 percent provided policy support. The other nature of support included (a) planning support (17.24%); (b) networking and linkaging (15.50%); (c) program/project type (13.88%); (d) research, studies, and surveys (12.03%); (e) financial assistance (10.08%); (g) equipment or facility donation (4.93%); and (h) award system (3.69%).

4.38 Capability building was performed primarily by international funding agencies, NGOs, and academic institutions with varying roles in the provision of support. International funding agencies usually provided funds for capacity building while some NGOs and academic institutions packaged and conducted training programs and study missions. On the other hand, the NGAs provided resource persons on various subject matters as part also of their advocacy to encourage adherence to certain national rules and regulations. Among LGUs, capability building support mostly followed a vertical flow, that is, a higher level of local government assisted a lower level local government. This was best exemplified by provinces helping the municipalities, and the cities and municipalities assisting the barangays. Capability building included training and seminars, study missions, and exchange or twinning arrangements.

4.39 Policy support involved (a) provision of policy agenda and direction, (b) preparation of guidelines, (c) clarification of issues, and (d) initiatives to entice implementation of policies. This was done primarily through the issuance of orders, memoranda, and circulars. Provision of policy agenda and direction was distinct among international funding agencies. Meanwhile, the provision of guidelines, clarification of issues, and monitoring of policy implementation were done by the national government agencies, particularly the DOF through the BLGF, Department of Budget and Management (DBM), DILG, and the COA.

4.40 For the areas of LFPM, Appendix Table 2 shows that the organizations provided assistance primarily in local development planning (23.49%), budgeting (15.81%), local economic development

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(15.54%), and accounting (13.85%). They assisted least in (a) revenue generation (10.93%); and (b) internal auditing (9.94%). The details of assistance in each area of LFPM are discussed in the succeeding parts of this report. 4.41 Table 5 shows the types and nature of assistance by groups of providers. The three groups

generally provided three types of assistance (financial, technical, and policy), except for the NGOs and academic institutions (which belonged to Group 1) which provided only technical assistance. Further, each group of organizations provided a distinctive nature of assistance.

Table 5. Types and Nature of Assistance by Groups of Providers

Groups Types of Assistance Nature of Assistance Program/Project Loans Policy-based Loans Technical Assistance Grants/Loans Infrastructure Support Technical Cooperation Program Commodity Assistance Emergencies’ Assistance Advisory Services Development Studies Trainings/scholarships

Group 1 International Financial Institutions (Multilateral/Bilateral)

Financial Assistance Technical Assistance Policy Assistance

Support to civil society organizations (CSOs) Training/Capacity Building Dispatch of Experts Community Organization and Mobilization

NGOs Technical Assistance

Sector-specific Development Interventions Curricular Programs in Local Governance Short-term Courses Policy Support Deployment of Experts

Academic Institutions Technical Assistance

Project Feasibility Studies

Lending Program to LGUs LGU Credit Support Technology Promotions

Group 2 GOCC (LBP, DBP, PVB)

LGU-Cooperative Strengthening Partnership Internal Revenue Allotment Shares in National Wealth

National Government (Revenue Shares)

Tobacco Excise Tax Calamity Fund President’s Bridge Program DepEd School Building Program

National Government (Grants)

Financial Assistance Technical Assistance Policy Assistance

Local Government Empowerment Fund Interlocal Cooperation Group 3

LGUs Financial Assistance Technical Assistance Policy Assistance

Calamity Assistance

5. AREAS OF LFPM

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Revenue Generation 5.1 This part details the assistance given to LGUs by the different groups of organizations in four sub-areas of revenue generation: real property taxation, business permits and licenses, bond floatation, and BOT scheme. 5.2 Real Property Taxation. For the three groups of respondents, assistance to LGUs in RPT was primarily in the form of capacity building and policy support. International funding agencies and some NGOs provided both financial and technical assistance necessary to train officials, employees, and constituents of local governments. These were usually in the aspects of RPT assessment and valuation and in the computerization of the RPT system. Educational institutions served as the training arms of international funding agencies and NGOs; at the same time, they offered their own developed training programs. Some NGOs also provided training programs. 5.3 Among the national government agencies that provided training programs in RPT, the most prominent were the DOF’s BLGF and the DILG. Their support ranged from the offering and conduct of their own developed training programs to the provision of resource persons, and the contracting out of trainings to other private institutions like universities and NGOs with track records in training. In the policy aspect of RPT, the BLGF provided primary support. It issued Local Finance Circulars, RPT opinions and rulings, and assessment regulations. The DBM issued local budget circulars covering a wide range of subjects in LFPM, including RPT.

5.4 The BLGF has the RPTA Project, a countrywide project with funding assistance from the World Bank. The RPTA Project has the following objectives: (a) to support efforts on LGU resource mobilization through the improvement of RPT collection; (b) to enhance administration of foreign-assisted projects; and (c) to develop a model in tax administration for replication in other LGUs. The five components of the RPTA Project are as follows: (a) tax mapping—identifying real property units, establishing property boundaries, determining actual use of properties, and discovering undeclared properties; (b) records conversion and management—conversion of tax mapping information to individual property records with the necessary classification, and appraisal and assessment of real properties. Also included are the preparation of collective assessment rolls as well as the installation and maintenance of a basic system in records management in the local assessment office; (c) tax collection enforcement—review and revision of existing procedures in collection recording, accounting, and disposition of RPTs, both for collectible and delinquent accounts; (d) data computerization—establishment and operationalization of a computer-assisted database for RPTA, including the familiarization/training of key personnel, encoding and validation of data, acquisition and installation of standard RPTA system, generation of reports, and preparation of complementary manual of procedures; and (e) geographic information system (GIS)—digitization of all tax maps with the inclusion of necessary information on every piece of land at the Treasurer’s and Assessor’s Offices and the possibility of linkages with other offices. This system is being used as an aid for ocular inspection, verification of the location of properties by owners, generation of vicinity maps, identification of overlapping in properties, and identification of duplicate assessment of real properties.

5.5 Business Permits and Licenses. The support to LGUs in business permits and licenses (BPL) was also in capacity building and policy. The training on BPL was on the revision or updating of the local revenue tax code that was focused primarily on taxing business establishments. Capacity building on BPL also involved system design or improvement in procedures, processing time, and documentary requirements in applying for local business licenses. Establishment of a one-stop shop had also been a

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primary subject of discussions in local study missions where a group of local officials observe the practices of LGUs which have established one-stop shops.

5.6 One entity that focused on the BPL system was The Asia Foundation. The foundation has helped enhance the BPL system of several cities in Mindanao. It also worked on “Making Cities Work” to enhance the investment climate and business-enabling environment of LGUs. The BLGF implements the Business Tax Enhancement Program (BETP) aimed to provide medium-term financing and technical support to LGUs for the implementation of programs and activities that will accelerate the growth of local revenue from business taxes. The primordial objective of the BETP is to promote local autonomy and self-reliance by (a) increasing locally sourced revenues and reducing dependency on IRA; (b) accelerating growth of local business tax collections; (c) training of LGUs’ qualified personnel in examining books of accounts of businesses to determine gross receipts; (d) introduction of innovative practices to enlist the cooperation of businesses taxpayers; (e) training of LGUs on the “presumptive income level” in estimating business gross receipts and on the referral to income tax returns for the same purpose; and (f) improving overall LGU management systems in business tax collections. 5.7 The BETP has four components: (a) business tax mapping—identifying the business, establishing business location, determining business nature or type, and discovering undeclared business; (b) records conversion and management—conversion of business mapping information to individual business records, classification, estimation of capitalization or value, preparation of business records, and installation and maintenance of basic management system in business records in the Local Business Tax Office; (c) tax collection and enforcement—review and revision of existing procedures on the collection, recording, accounting, and disposition of business taxes; and (d) data computerization—establishment and operationalization of a computer-assisted database, including the familiarization or training of key personnel, encoding and validation of data, acquisition and installation of standard system, generation of reports, and preparation of complementary manual of procedures. 5.8 Bond Floatation. The LGC of 1991 empowered the LGUs to engage in new modes of financing other than the traditional real property and business taxation. These new modes, which used to be employed by NGAs and GOCCs, included issuance of bonds, establishment and operation of local enterprises, and joint venture arrangements like the BOT scheme. The bond floatation and the BOT were the two popular and common alternatives for sourcing funds to finance projects that the LGUs were engaged in. Caloocan City had the highest recorded bond floated at Php 620 million. 5.9 The DOF (2005) reported that less than 10 percent of the 1,696 LGUs in the Philippines have exercised their new financing mandate (Table 6). Only 21 have issued bonds; 17 have BOT projects that are either completed, under concession, awarded, or in the process of bidding; and 164 have availed of loan packages. These are clear indications that support in bond floatation was primarily in capacity building and research. In addition, the bond floatation of LGUs included guarantee as provided by three entities: the Housing Guarantee Corporation, LGU Guarantee Corporation (LGUCC), and Philippine Veterans Bank (PVB).

Table 6 LGUs with Bond Issuance Bond Name Area Term

(Years) Project Amount (Million Pesos)

1 Victorias Mabuhay Bonds Negros Occidental 2 8 2 Legazpi Suerte Bonds Albay 3 26 3 Claveria Housing Bonds Misamis Oriental 3 20

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4 Puerto Princesa Housing Bonds Palawan 3 20 5 Sto. Domingo Housing Bonds Nueva Ecija NA 10 6 Urdaneta City Municipal Bonds Pangasinan 5 25 7 Boracay-Aklan Provincial Bonds Aklan 7 40 8 Puerto Princesa Green Bonds Palawan 7 320 9 Caloocan Katipunan Bonds Caloocan City 7 620 10 Tagaytay City Tourism Bonds Tagaytay City 7 220 11 Iloilo City Bonds Iloilo City 3 130 12 Daraga Municipal Bonds Albay 7 75 13 Bayambang Aliguas Bonds Pangasinan 7 42 14 Leyte Liberation Bonds Series A Leyte 7 430 15 San Juan Pinaglabanan Bonds San Juan, Metro Manila 7 390 16 Carmona Bonds Cavite 7 200 17 Pasay Kaunlaran Bonds Pasay City 7 500 18 Imus Bonds Series A Cavite 7 74 19 Calatagan Municipal Bonds Batangas 7 35 20 Aksyon Padayon Bonds Masbate City 7 160 21 Onward Tacloban Bonds Tacloban City 7 315

Source: Bureau of Local Government Finance, DOF 5.10 The LGUCC was established by the Development Bank of the Philippines (DBP) and the Bank Association of the Philippines to enhance the flow of commercial funds to the LGUs. The LGUCC provided a guarantee on loans and credits granted to LGUs by commercial funding sources and on municipal blond floatation. The specific objectives of the LGUCC are to: (a) expand the LGUs’ borrowing capacity and credit availability; (b) reduce LGUs’ financing costs; (c) improve LGUs’ operating and financial flexibility; (d) reduce credit and other perceived risks of lenders; and (e) contribute to the development of the local capital market by creating a market for a variety of credit instruments. 5.11 Build-Operate-Transfer (BOT) Scheme. The BOT arrangement has its basis in Section 302 of the LGC which states that “LGUs may enter into contracts with any duly pre-qualified individual contractor for the financing, construction, operation, and maintenance of any financially-viable infrastructure facility, under the build-operate-transfer agreement subject to applicable provisions of RA 6957 as amended by RA 7718” (or the BOT Law). In a BOT scheme, a private company or consortium is given the right to build and operate a facility previously provided for by the government. Concession period is agreed upon, after which the facility is transferred to the LGU. The BOT Center, an agency of the Department of Trade and Industry (DTI) is mandated by the BOT Law to coordinate and monitor BOT projects and guide government agencies and LGUs in the preparation and development of BOT projects. Its main role is to identify financial, technical, institutional, and contractual solutions to help government agencies make BOT projects work. 5.12 One earlier study on the sources of funds for LGUs was “LGU Financing: Present Sources, Availability and Terms” prepared by Gavino (1998) of the BOT Center. The paper presented a compilation and assessment of the sources of financing and showed the constraints faced by LGUs in accessing private capital. It recommended, among others, that the BOT Center should expand its provision of technical assistance and other forms of private sector participation in LGU financing.

5.13 The BOT Center’s two core competencies are project development and project monitoring. In project development, it offers both technical and financial assistance to implementing agencies and

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LGUs. In project monitoring, it is involved even after the project’s successful tender and award. Specifically, the BOT Center is concerned with the following:

• Technical assistance—pre-screening of projects for possible financing, review of technical assumptions, market assessment, and provision of legal advice.

• Financial assistance- in the form of the Project Development Facility which is a loan facility

that can be availed of to finance pre-investment studies and to tender document preparation including the provision of assistance during the bidding process up to contract award.

• Marketing activities—promotion of the Private Sector Participation Program and projects to

potential investors and project stakeholders through on-line promotions and publications. • Policy review and formulation - conducted in coordination with implementing agencies and

oversight agencies to create a policy environment that responds to private sector concerns and ensures the protection of consumers and the public in general.

• Capacity-building - enhancing the skills of LGUs in determining emerging opportunities and

in shepherding projects through the preparation and approval process. 5.14 From Table 7, the construction of public markets and of commercial centers was the popular BOT projects entered into by the LGUs. Seven of the 17 projects were public markets. The schemes usually entered into by the LGUs were characterized by the participation of the private sector as the major sponsor of the project. LGUs preferred this scheme because the private sector assumed certain risks which had been traditionally borne by the public while the project had not yet been transferred to the LGUs. These risks included financing, design, construction and operating risks. This is the reason why only two of the 17 BOT projects were joint ventures between the LGU and the private sector. 5.15 The World Bank places the transfer of knowledge for development and the building of human and institutional capacity at par with the transfer of financial resources and the building of physical capacity. It has assisted the Government of the Philippines (GOP) in (a) establishing a revolving fund - the Municipal Development Fund (MDF) - to provide LGUs with direct access to long-term financing; (b) created an institutional capacity to assist local governments in project preparation and implementation; (c) strengthened local technical and financial capacity for project implementation and service management by creating a Municipal Training Program (MTP); and (d) improved the fiscal performance of local government by enhancing the RPTA system. The Bank also helped develop a policy framework for local government financing that encourages stronger LGUs to access market-based credit; provided public funding and capacity building through the MDF; and targeted funding for poorer LGUs and social and environmental projects. This policy framework is currently being implemented through the LOGOFIND which was approved by the Bank in March 1999. 5.16 The LOGOFIND Project expands and upgrades the basic infrastructure, services, and facilities of participating LGUs and strengthens their capabilities in municipal governance, investment planning, revenue generation, and project development and implementation. It has four components. The LGU sub-projects component strengthens, repairs, and improves basic infrastructure, social services, and environmental facilities. The second component provides training and capacity-building to LGUs in sub-project development and implementation; municipal planning, finance, and management; improvement of training modules and delivery mechanisms; and piloting of new programs, including distance learning, LGU twinning, and collaboration with LGUs, NGOs, and the private sector. The third component

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supports LGU resources mobilization and monitoring of the RPTA program; new initiatives to improve credit worthiness and revenue generation; and the development and implementation of systems to improve the monitoring of LGUs’ fiscal performance. The fourth component supports the reorganization and strengthening of the MDFO. As of 2005, about 305 LGUs have availed of the LOGOFIND. In Mindanao, Lanao del Norte had the highest number of municipalities and cities availing of the LOGOFIND at 11, followed by Lanao with 10 and Surigao del Sur with 9. In the Visayas, Negros had the highest availing provinces with 24 LGUs, followed by Aklan with 10. In Luzon, Laguna had 10 availing municipalities and cities followed by Camarines Sur with 9.

Table 7. LGUs with BOT Projects Project Name Area Scheme Estimated Cost

(Million US$) A

Completed Concession

1 Talisay City Hall Project Talisay City, Negros Occ.

BT 4

B

Under Concession (Operational)

2 Bohol Provincial Electrical System Province of Bohol JV 14.4 3 Bohol Water Supply System Province of Bohol JV 5 4 Malabon Digital Infrastructure Project Malabon City BTO 0.5 5 Mandaluyong Marketplace Mandaluyong City DOT/BT 23 6 Dapitan Public Market Quezon City BOT 1.3 7 Carmen Public Market Cagayan de Oro City BOT 2.4 8 Cogon Public Market Cagayan de Oro City BT/BOT 4 C

Awarded

9 Binirayan Administrative and Commercial Center

Province of Antique BOT 3.8

10 Bocaue Public Market and Commercial Center

Bocaue, Bulacan BOT 5.8

11 Tarlac Public Market Tarlac City BOT 3.6 12 Roxas City Boulevard Commercial

Center Roxas City, Isabela BOT 1

13 Slaughterhouse Cagayan de Oro City BOT 3 14 Matnog Integrated Bus Terminal Matnog, Sorsogon BOT 4.4 D

Pre-Award (Bidding Stage)

15 Koronadal City ICT Koronadal City BOT 0.5 16 PUD Modernization PSP/BOT Olongapo City CAO 3.6 17 Davao del Norte Integrated Water

Resource Development Davao del Norte BOT 76.4

Source: BOT Center and BLGF, DOF Government Accounting 5.17 Assistance in accounting specifically on the promulgation and implementation of the New Government Accounting System (NGAS) is primarily provided by COA. This is in accordance with its

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mandate to promulgate accounting rules and regulations pursuant to Article IX-D, Section 2 of the 1987 Constitution. 5.18 The age of power computers, globalization, interconnectivity, and demand for real-time information and more analytical reports prompted the COA to adopt the NGAS. COA Circular No. 2002-005 prescribed the Manual on the New Government Accounting System for LGUs to replace the old government’s accounting system which was conceptualized in the late 1940s and early 1950s. The three main objectives of the NGAS are to (a) simplify government accounting, (b) conform to international accounting standards, and (c) generate periodic and relevant financial reports for better monitoring of performance.

5.19 Among the features of the NGAs are the use of (a) modified accrual basis of accounting, (b) three-digit standard chart of accounts, (c) responsibility accounting, (d) two-money column trial balance of balances, (e) asset method in recording purchases, (f) depreciation accounting, and (g) reversing original entries to correct accounts in the same year. In its effort to promote the use of the NGAS, the COA is bent on conducting seminars and updating its guidelines. The use of the electronic version of the NGAS (eNGAs) and the adoption of the international accounting standards in the government are two of the most significant projects of COA in the pipeline. 5.20 Through the assistance of World Bank, the COA also engaged in a project on LGU Financial Management and Audit aimed primarily to strengthen the LGUs’ financial management and auditing skills especially among poorer LGUs where financial management is weak. The two components of this project were (1) strengthening the financial management of poor LGUs by promoting the development of adequate controls within the local financial management system, and (2) strengthening the audit system of LGUs with the complementary capacity building programs. Internal Auditing

5.21 There are recent developments in the field of internal auditing that will affect the LGUs, most significant of which is a US$300,000 grant for the Strengthening of Internal Audit Units for Effective Procurement Monitoring and Enforcement. The grant, funded by the Institutional Development Fund (IDF) of the World Bank, will support Internal Audit Units of government agencies to perform their functions in conformity with international standards for the professional practice of internal auditing. A key result expected is the establishment of adequate internal controls particularly in the procurement process, thus lowering opportunities for corruption. The strengthening of Internal Audit Units is one of the major activities in the Government’s National Integrity Development Action Plan crafted during the Presidential Anti-Corruption Workshop held last December 2004.

5.22 The Presidential Anti-Graft Commission, the agency tasked by President Gloria Macapagal-Arroyo to strengthen internal audit operations in the bureaucracy, ensures that the grant will fund the following activities:

• Quality assessment of the internal audit function in selected agencies and development of a quality assurance program for internal audit units;

• Development of an internal audit manual with appropriate focus on procurement review and monitoring;

• Development of a national training program for internal auditors;

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• Development of an effective and efficient procurement records management and monitoring system for national agencies; and

• Strengthening of the role of the Presidential Anti-Graft Commission as the oversight agency in monitoring the performance of internal audit service units.

5.23 Two recent pronouncements significantly affect the practice of internal auditing in the Philippine government today. These are the (a) Administrative Order (AO) No. 70, issued by the President on April 14, 2003, and the (b) Budget Circular No. 2004-4, issued by the DBM on March 22, 2004. AO No. 70 orders all heads of government offices, agencies, government-owned and/or controlled corporations, including government financial institutions, state universities and colleges, and LGUs to organize an Internal Audit Service (IAS) in their respective offices. It also prescribes the conduct of audit in conformity with the International Standards in the Professional Practice of Internal Auditing and the strict observance of the Code of Ethics promulgated by the Association of Government Internal Auditor (AGIA) in the Philippines. It also encourages the AGIA to ensure that all audit works in all government agencies are conducted in conformity with the standards of the internal audit profession. Budget Circular No. 2004-4 provides guidelines on the organization and staffing of internal auditing units in all government offices and agencies mentioned in AO No. 70. Local Government Budgeting 5.24 Two important sources of budgeting guidelines in the Philippines are the (1) the Budget Operations Manual for LGUs prepared in 1994 by the DBM and the COA, and (2) the Local Government Budgeting Manual prepared solely by DBM. The latter covers budgeting procedures for provinces, cities, and municipalities, including the five phases in budgeting: preparation, authorization, review, execution, and accountability. The manual also presents the fundamental principles and the roles and functions of the officers and officials involved in local government budgeting.

5.25 One of the local budgeting principles emphasized in the manual is that local government budgets should operationalize the approved local development plans—a clear indication of the significant link between local planning and budgeting as two separate but related functions. The plan specifies the programs, projects, and activities which should be supported by the funds being budgeted for the period. 5.26 Clearly, the role of DBM is one of oversight. It has the primary role of issuing local budget circulars, administering the government compensation and position classification plan, and allocating the IRA among LGUs. It also takes charge of the Municipal Development Fund and the Local Government Empowerment Fund. Local Economic Development.

5.27 Local economic development assistance being provided to LGUs revolves around four areas: (a) project feasibility studies, (b) establishment of local economic enterprises, (c) project management and financing, and (d) financial packaging. The establishment of local economic enterprise in the locality was the predominant type of assistance. In terms of the nature of assistance, capability building, actual project development, and policy making support for local entrepreneurs were the most prevalent. Capacity building in local economic development entailed training of local officials and employees to develop strategies and systems that will strengthen the business enabling environment necessary to promote the competitiveness of firms and create opportunities for new businesses.

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5.28 Among the national government agencies assisting in the local enterprise development, the DTI and its attached agencies take the lead. The Board of Investment of DTI provides the annual investment priorities plan which identifies the priority investment areas and the preferred activities that guide the LGUs in choosing the areas and sectors to develop. The Bureau of Small and Medium Business Development helps LGUs complying with various aspects of the enabling laws on Magna Carta for Small Entreprises (R.A. No. 6977) and its amendments (R.A. No. 8289) so that small and medium enterprises (SMEs) are promoted and developed in the countryside. The provincial offices of DTI also assists in the dissemination of laws related to investments such as the Omnibus Investment Code of the Philippines (E.O. 226), Foreign Investment Act of 1991 (R.A. 7042), Special Economic Zone Act of 1995 (R.A. No. 7916), Barangay Micro Business Enterprises Act of 2002 (R.A. No. 9178), and special laws on specific areas such as Subic, Clark, etc.

5.29 The NEDA published a Reference Manual on Project Development and Evaluation in 2005 which guides the local governments in the development of both income-generating projects and social services. GOCCs, like the DBP and LBP, also provide LGUs specific packages of assistance in local economic development. The ASIA Foundation and the United States Agency for International Development (USAID) spearhead the conduct of investment code writeshop and studies on business permits and licenses systems. Few years back, the German International Development Cooperation established a national trainers’ training for local enterprise development with key actors coming from the academe. The Philippines-Canada Local Government Support Program (LGSP) produced in 2003 resource books on Service Delivery with Impact detailing certain concerns related to solid waste management, water and sanitation, coastal resource management, health, shelter provision, and local agricultural development which can be sources of project ideas and methods of putting up economic enterprises.

5.30 The DILG also provides policy directions through issuances of memorandum circulars. The national pronouncement on job creation was translated into a local economic transformation program for LGUs by the DILG through MC 2002-48. This circular provides for the philosophy of job creation, the modernization of agriculture, and the transformation of local leaders into entrepreneurial development managers. Further, it gives local officials the concrete manifestations of their corporate role and responsibilities as the local chief executives. The NGOs’ programs are geared towards economic enterprises development, provision of limited financial assistance, and capacity building activities that strengthen cooperatives and other CBOs in their target municipalities. These programs reflect their organizational character, having been formed from communitarian roots. The academe offers courses in project development and management both as degree programs and as a module in short-term training programs. Most notable among the institutions offering the course is the Ateneo School of Government which provides coaching in the packaging of project proposals and feasibility studies after the training of local officials.

5.31 Among the local economic development initiatives of the IFIs was the Small and Medium Enterprise Development for Sustainable Employment Program (SMEDSEP), a technical cooperation project between the Republic of the Philippines, through the DTI and the Technical Education and Skills Development Authority (TESDA) and the Federal Republic of Germany. This program is an innovative intervention for enabling and shaping the business environment through the development of entrepreneurial potential and the stimulation of competition. A component of the SMEDSEP is the Local and Regional Economic Development (LRED) approach, being piloted in selected LGUs in Leyte Province where local stakeholders are provided with the methodology and training. The LRED also assists LGUs in developing and implementing action plans.

Local Development Planning.

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5.32 All the three groups of respondents provided assistance in local development planning. This was manifested to a large extent in capacity building and actual planning support. Local development planning was a highly coordinated LFPM assistance with the LGUs. Assistance takes the nature of coaching in the preparation of the annual integrated plan which forms the basis for appropriation of finances and the local appropriation ordinance. The integration of trainings for the community to develop their own programs for economic development was another nature of assistance. Generally, local development planning was associated with issues of urban planning and zoning, environmental protection, and solid waste management.

5.33 The national government through the NEDA takes the lead in setting directions in development planning. The DILG also takes the lead in rationalizing the planning system through its Rationalized Planning System Project (RPS). The RPS advocates a rationalized planning system as compliance to the LGC of 1991 and aims to limit the LGUs’ number of plans only to the comprehensive land use plan (CLUP) and the comprehensive development plan (CDP). The beauty of the RPS is the advocacy for NGAs to harmonize or dovetail national planning with local priorities and to avoid confusion at the LGU level.

5.34 Also the program One Cluster, One Vision for Local Development (OCOV) of the DILG with the House of Representatives encourages the formal organization of contiguous/geographically adjacent municipalities within the province with common needs, interests, potentials, and willingness to pool their available resources for purposes commonly beneficial to them — to meet major development requirements. OCOV is a project that aims to assist develop contiguous LGUs into growth point centers that address common needs and interests, improve service delivery; and spur socio-economic development of the area. The Millennium Development Goals (MDG), which consist of strategies to fight poverty, ensure human development, and build prosperity for the greatest number of Filipino people, anchors all development efforts in the country, including the LGUs. The UNDP also sets the tone in localizing the MDG at the local government level. The Philippines-Australian Community Assistance Program (PACAP) provides extensive assistance since its inception in 1986, having supported 1,200 activities benefiting about 600,000 people through partnerships with more than 500 NGOs. 5.35 The academic institutions’ curricular programs have local development planning as one of the core courses. The UP School of Urban and Regional Planning (UPSURP) leads in the provision of capability building in the following aspects of urban growth management: urban redevelopment, metro-area development planning, open space planning and management, housing, zoning preparation and administration, land use planning, infrastructure and utilities planning, site planning, transport planning, and planning tolls and techniques, including participatory planning techniques. Its special course on Urban and Regional Planning aims to introduce a model for local planning and development that will integrate planning in the overall governance function. In this way, the UPSURP hopes to contribute to the national effort to localize the MDG. The School also publishes the Philippine Planning Journal which showcases articles related to urban, regional, environment, transport, and land use planning in the Philippine context. 5.36 One of the most significant interventions in local development planning is the technical assistance from ADB on Strengthening Provincial and Local Planning and Expenditures Management currently implemented by NEDA. The technical assistance has four interrelated components: (a) enhancing cooperation and collaboration of national agencies and LGUs to consolidate the planning-budgeting-investing linkages; (b) preparing new planning, budgeting and investment guidelines; (c) capacity-

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building training for governors and city mayors, and planning, budgeting and treasury officers at the local levels; and (d) enhancing local expenditure management, revenue collection, and project evaluation. 5.37 The World Bank also granted US$467,100 from the Cities Alliance Trust Fund for the project entitled “City Development Strategies (CDS) in the Philippines: An Enabling Platform for Good Governance and Improving Service Delivery” of the League of Cities of the Philippines (LCP). The project aims to enhance the strategic planning, governance, and resource mobilization capabilities of the cities to contribute to economic growth and urban poverty reduction. The grant, which is co-sponsored by the Japan Embassy and the Japan International Cooperation Agency (JICA) will finance three key areas as follows: (a) consolidating and expanding previous CDS with improved methodology through setting up a well-defined structure, with corresponding benchmarks, result indicators, and a learning program; (b) facilitating LGU access to a broader range of financing options, enhancing the Capital Investment Planning approach into a more comprehensive financing framework; and (c) institutionalizing CDS by integrating it into the national planning process and providing operational support to LCP to promote and implement the redesigned CDS. 5.38 The Philippines-Canada Local Government Support Program published in 2004 a series of knowledge tools on “Reclaiming Public Life through Local Special Bodies.” The sourcebooks on enhancing participation in local governance tackle the nature and modes of strengthening local special bodies like the local development council, local health board, peace and order council, local school board, and bids and awards committee which provide important inputs in local development planning. 5.39 The Helvetas Philippines Governance Office contributes to the promotion of participatory governance especially in local development planning and of the involvement of civil society groups in the whole project cycle among LGUs. Procurement Process 5.40 The mapping revealed a small extent of LFPM assistance to the LGUs in the area of procurement. The nature of assistance was limited to capacity building and provision of planning support. While the provision of planning support assisted the LGUs in the development of the mandatory Annual Procurement Plan (APP), other procurement processes like having a standard interpretation of procurement regulations remained untouched assistance. Part of the birth pains of the new law on procurement, the Government Procurement Reform Act (GPRA) of 2003 (RA 9184) are the ‘how to’ of implementing the consolidated laws and regulations of procurement. This is actually the key feature of the GPRA. Considering that physical infrastructure continues to be a high priority expenditure of the LGUs, procurement is a major LFPM assistance. 5.41 Interventions of institutions, especially academic institutions and NGOs, created a built-in pressure for accountability among the LGUs. These included the G-Watch project of the Ateneo School of Government (ASG) and the Transparent and Accountable Governance (TAG) project of the USAID that were focused on building awareness on the costs of corruption and on increasing transparency and accountability in government transaction. These activities increased the opportunities for NGOs and civil society to become effective partners of the LGUs. 5.42 Table 8 provides the summary of LFPM assistance. Through the study, the following has been identified:

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• Group 1 organizations, except the IFIs, were engaged in capacity building in all areas of LFPM;

• Group 2 provided policy assistance in all areas of LFPM except in local economic development where financial assistance was provided. Occasional capacity building was noted in accounting, budgeting, local development planning, and procurement. Noticeable was the lack of capacity building in revenue generation, particularly in non-traditional revenue sources, and internal auditing;

• Group 3 was engaged in all activities of LFPM but capacity building was dominant because of the assistance extended to the barangays under their jurisdiction.

5.43 As stated earlier, the IFIs provision of support followed a different modality. Most of the assistance were channeled through a particular NGA or GOCC, which, in turn, implemented the further delivery of assistance.

Table 8. Areas of LFPM and Assistance Provided in Each Area LFPM Assistance Academe and

NGOs NGAs and

GOCCs LGUs

Revenue Generation Real Property Taxation

Capacity building

Policy Support

Capacity Building Policy Support Networking

Business Permits and Licenses Capacity building Policy Support Policy Support Networking

BOT Schemes Capacity building Policy Support Planning Support

Policy Support Research Studies

Bonds Policy Support Policy Support Project Development

Accounting Financial Accounting and Reporting

Capacity Building

Policy Support Capacity Building

Capacity Building Policy Support Project Development

Expenditure Management Research Studies Capacity Building Capacity Building Policy Support

Assistance for the NGAS Capacity Building Policy Support Capacity Building Policy Support

Budgeting Capacity Building Capacity Building Capacity Building Planning

Internal Auditing Capacity Building Policy Support Capacity Building Policy Support

Local Economic Development Project Feasibility Studies

Capacity Building Capacity Building Financial Assistance

Research Studies Project Development Financial Assistance

Establishing Local Economic Enterprise

Capacity Building Capacity Building Capacity Building Policy Support Financial Assistance Networking

Project Management and Financing

Capacity Building Financial Assistance Capacity Building

Capacity Building Planning Financial Assistance

Local Development Planning Capacity Building Capacity Building Capacity Building Networking Project Development

Procurement Capacity Building Policy Support Capacity Building

Capacity Building Planning

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Policy Support Note: Excluding international financial institutions

6. SPECIFIC ASSISTANCE BY DONORS IN LFPM 6.1. This section of the report presents the specific assistance of two major players in LFPM: (a) international donor agencies; and (b) local academic and training institutions. The internal donor agencies presented below include (a) Asia Foundation; (b) Asian Development Bank; (c) Australian Agency for International Development; (d) Canadian International Development Agency; (e) Japan; (f) New Zealand Assistance for International Development; (g) United States Agency for International Development; and (h) the World Bank. The local academic institutions whose programs and courses are described include the (a) Ateneo School of Government; (b) Asian Institute of Management; (c) Development Academy of the Philippines; (d) Local Government Academy; (e) Institute of Development and Management of UP Los Baños; and (f) LogoTRI-PhilNet. Donor Activities in the Philippines 6.2 International aid agencies have a sizeable presence in the Philippines and donor interest remains high. The Philippines has more than 20 sources of official development assistance (ODA). In 2003, donor pledges amounted to US$2 billion, of which an estimated US$540 million was grant aid. Japan is the largest donor (50% of total donor commitments), followed by the ADB (25%) and the World Bank (21%). Australia is a medium-sized donor in the Philippines and is among the top five bilateral grant aid donors along with the United States, Japan, Germany, and Canada. The NEDA coordinates and reviews the ODA.

A. Asian Development Bank 6.3 The Philippines became a member of the ADB in 1966. As of 30 June 2000, 150 loans had been made to the Philippines totaling $7,549 million. ADB has also provided TA for 268 projects totaling $113 million by 30 June 2000. Among the relevant loan and technical assistance projects were the following:

Loan 1858: Nonbank Financial Governance Program ($75 million: 2001–2003). The program’s key pillars were (i) strengthening the governance and enforcement capacity of the regulators, Bangko Sentral ng Pilipinas and the Securities and Exchange Commission (SEC); (ii) introducing more transparency in the market; and (iii) encouraging equal enforcement of rules and regulations.

Loan 1363: Capital Market Development Program ($150 million: 1995). The project’s objectives were to support financial and corporate governance reforms, particularly the development of capital market institutions with a view to enhancing transparency and predictability in the marketplace. TA 31656-02: Strengthening Public Finance and Planning of LGUs–II ($0.100 million: 2002). This technical assistance assisted the government to conduct more detailed analysis of its budget processing and project-monitoring mechanism.

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TA No. 3310: Capacity Building for Procurement ($0.400 million: 2000). This project strengthened institutions with procurement responsibilities.

TA No. 3245: Nonbank Financial Sector Development ($2.0 million: 2000–2001). Among other things, this TA focused on reorganizing and strengthening the SEC.

6.4 Capacity Building in LGU Financing. The objective of the TA was to strengthen the in-house capabilities of the Land Bank of the Philippines to undertake the financing of LGU infrastructure projects, particularly where the private sector was involved. The assistance was to improve the credit-rating system by incorporating governance criteria; providing training on private sector modalities; developing new credit products and enhancements that would catalyze private finance; and preparing the format for a possible future credit line from ADB. Training activities involved other GFIs and interested groups. Support for cooperation between the Coordinating Council for Private Sector Participation (CCPSP) and the Land Bank of the Philippines was also included.

6.5 Technical Assistance for the Local Government Finance and Budget Reform Project. The TA has two components. Component A provides an analytical overview and detailed studies of key issues that will help DOF and BLGF design and implement reform in LGU finance and budget processes. These studies identify factors in the legal, policy, and institutional frameworks that impede LGUs’ ability to function as autonomous and self-supporting units and propose remedies and concrete action plans to overcome these problems. Component B enhances the capacity of national government agencies, particularly BLGF, to provide LGUs with services to improve their finances and create and maintain LGU financial performance databases that will strengthen LGU credit markets. The TA enhances the skills, tools, and work programs of BLGF at its main office in Manila and in its regional offices, by conducting training and other capacity development activities; designing information systems; and developing policy-supporting mechanisms needed to enhance the bureau’s services. 6.6 LGU Infrastructure Development Facility Project. The Government is pursuing an LGU financing framework that expands financing sources for LGU-level infrastructure needs. Under this framework, revenue-generating infrastructure projects, particularly those sponsored by the more credit worthy LGUs should be opened to the private sector thereby freeing up traditional infrastructure funding for less credit worthy LGUs and projects with primarily social and environmental objectives. 6.7 Local Government Financing and Budget Reform. This will contribute to the sustainability of fiscal consolidation by supporting improved LGU delivery of essential services even within a tightening overall fiscal envelope. The investment climate at the local level would be improved by (a) empowering LGUs to drive their own development agenda and ensure public service delivery, (b) improving LGU access to credit and other non-traditional sources of finance, and (c) providing LGUs with the ability to increase and improve their capital spending for the provision of essential infrastructure. Finally, it will support sector efficiency by encouraging genuine devolution as envisaged under the LGC; by establishing more transparent and accountable LGU financial and administrative management systems; by promoting more coordinated and participatory development planning; and by enhancing the predictability of resource flows. B. Asia Foundation and Transparent Accountable Governance 6.8 Countering Corruption: Transparent Accountable Governance (TAG), 1999- 2007. The TAG Project is implemented by the Asia Foundation with a US$10.5 million grant from the USAID from

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September 1999 to 2007. TAG aims to build civil society and private sector constituencies for counter-corruption from an agenda targeting economic growth and poverty reduction. TAG focused initially on agencies of the national government. The project now extends to the city and municipal level in Mindanao through the promotion of accountability and transparency in governance. TAG works with 16 cities, representing 60 percent of the cities in Mindanao. 6.9 The Asia Foundation Supports Local Development Planning in Maguindanao. The Project’s engagement is with 76 municipalities in Autonomous Region of Muslim Mindanao (ARMM) and neighboring conflict-affected areas. Reforms are targeted to enable city governments to restructure services to improve efficiency, decrease the costs of doing business, and encourage investments. A Mindanao Mayors’ Meeting was held in April 2005 where mayors drafted a covenant that committed them to the development and implementation of the TAG Action Plans.

6.10 Public Service Excellence, Ethics and Accountability Program (PSEEAP). This aims to establish the values of public service excellence, ethics, and accountability. The program is composed of six modules that run from six to eight months: service vision and values, service audit, service improvements, celebrating accomplishments, basic customer service skills, and public service and accountability. The workshops are facilitated by university-based foundations and NGOs to elicit the participation of local government employees in improving transparency in operations and the quality of service delivery. A parallel program of the Philippines Civil Service Commission (CSC) is the Mamamayan Muna Program, now on in its 11th year of implementation. According to CSC Chair Karina C. David, the program has “modestly achieved its primary goal of improving public service in the bureaucracy and of providing the public with a redress mechanism for grievances against ill-mannered and erring civil servants”. 6.11 Local Development Planning and Budgeting. From 2002 to 2005, the Asia Foundation provided technical assistance to 57 municipalities and 583 barangays in Mindanao on development planning and budgeting. The program involved capacity building through team building, group facilitation methods, data gathering and analysis, and formulation of plans and budgets. It culminated in the development of barangay and municipal development plans. To date, the project has trained about 360 workshop facilitators.

6.12 Building Capacities of the Muslim Leagues. The Foundation provides institutional funding and technical assistance for the setting up of a secretariat that will support staff and capacity building of the Muslim League of Cities, Municipalities and Communities of the Philippines. The Program provides a two-day orientation on the ethics and accountability program, conducts study tour and cross visits, produces a newsletter, and develops a web-based database system. There are also two to five days workshops on resource mobilization, networking, and technical writing. Outside Mindanao are two projects, namely the eGovernance Initiatives and Public Governance Scorecard Strategy. In the former, one to two day workshops are provided to orient local chief executives and other information technology champions in the Visayas on how to get started on eGovernance and on how to outsource systems development. In the latter, selected city administrators and heads of people’s councils are trained to initiate and pursue a public governance improvement program. The cities that participate in the PSG project are San Fernando, Calbayog, Tagbiliran, Naga, Samal, Surigao, Marikina, Iloilo, and Cebu.

C. Australian Agency for International Development

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6.13 Most of the Australian Government's activities in the Philippines include components aimed at encouraging and assisting good governance, but Australia also funds projects that strengthen institutions and improve accountability. One major activity underway at present, which Australia is financing jointly with the ADB, is the "Philippines Regional Municipal Development Project" aimed at improving the ability of local government to provide, operate, and maintain essential infrastructure and basic services. The ultimate goal of the project is to improve the living conditions, public health, and urban environment of the seven participating cities of Bacolod, General Santos, Iligan, Legaspi, Lucena, Puerto Princesa and Tagbilaran. In addition, a major initiative on good governance has been developed in 1998 between the Philippine and Australian Governments. The initiative includes technical assistance to strengthen the ability of national and local public-sector and civil institutions to develop and implement effective policies in the economic, political and administrative spheres. Australia is also providing support for the Southern Philippines Council for Peace and Development established by the Philippine Government to lead and coordinate peace and development efforts in the country's south. The Australian Government also supports non-government aid agencies active in the Special Zone of Peace and Development in southern Philippines and in the ARMM. 6.14 Technical Assistance to Physical Planning (TAPP). The project assisted through technical and training assistance 77 provincial land use committees to refine and improve the processes and outputs of physical planning and land use decisions. 6.15 Philippines-Australia Governance Facility (PAGF). This was intended to provide responsive and effective support for governance at the national, regional and local levels. The community development (CD) program was carried out in Camarines Sur, Agusan del Sur, Albay, Camarines Sur, Northern Samar, Misamis Oriental, Naga City, and Gingoog City. The project developed a Manual on Local Development Administration Performance and an Operations Manual on Developmental Legislation. The facility also supported the Local Development Watch Project of the Bureau of Local Government Supervision (BLGS); the design of the LGU credit rating system and database; and the computerized management and monitoring system.

6.16 The Philippines-Australia Technical Support for Agrarian Reform and Rural Development (PATSARRD), 2003-2006. It assisted the Department of Agrarian Reform and LGUs in involving farmer beneficiaries into the development planning processes. It was carried out in Agusan del Sur, Bohol, Northern Samar, Surigao del Norte, Misamis Occidental, and Aklan with an Australian grant of A$10.0 million.

6.17 Philippines-Australia Local Sustainability Program (PALS), 2004-2009. The PALS 1 was undertaken with an Australian grant of A$12.0 million from 1999 to 2004. It piloted an integrated approach to community-based development in six municipalities in Misamis Occidental. The project has been extended in May 2004. PALS 2 includes the remaining eight municipalities in the province. The program aims to build the capacity of the LGUs to better plan, implement, and manage sustainable activities to improve the livelihood of the rural poor. The strengthening activities during the first years focused on preparatory reviews and assessments of provincial and municipal development plans. Modules and databases were developed on formulating barangay development plans and barangay profiles, conducting household surveys, and assessing of coastal resources. Based in Misamis Occidental Province (Region X) in Mindanao, the program assists both communities and LGUs to plan and manage activities that improve the livelihoods of the rural poor. 6.18 Philippines- Australia Human Resource Development Facility (PAHRDF), 2004-2009. This aims to achieve sustainable and equitable development in the Philippines by providing long-term

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scholarships and short-term specialized training to improve governance and management of key public and private institutions. The focus of the program is on economic governance; rural development; and security and stability with special emphasis on Southern Philippines, specifically Bohol, Northern Samar, Misamis Occidental, Agusan del Sur, and Surigao del Norte.

6.19 Philippines Australia Short Term Training Facility (PASTT). This provides short-targeted training and human resource development (HRD) support to partner-agencies and key personnel. The PASTT activities concentrate in southern Philippines particularly Mindanao. 6.20 Philippines-Australia Community Assistance Program (PACAP). This began in 1986 with the aim of strengthening civil society and reducing poverty. An independent review of PACAP in late 2003 led to a redesign of the program, with new management arrangements. The new PACAP continues to support community-initiated, sustainable poverty alleviation programs and activities. It also assists capacity-building initiatives of NGOs, peoples’ organizations (POs) and LGUs to provide services that meet community needs. PACAP focuses mainly in southern Philippines, particularly in the provinces of Agusan del Sur, Surigao del Norte, Misamis Occidental, Bohol, and Northern Samar. 6.21 Asia Public Sector Linkages Program (PSLP). This aims to improve public sector capacity for governance and management for nationally determined development outcomes in selected partner Asian countries. It aims to transfer capacity building skills and expertise from Australian federal, state and territory government departments and agencies --as well as universities--to public sector counterpart institutions in partner countries, and to support the strengthening of sustainable development-focused public sector bilateral and regional linkages. D. Canadian International Development Agency 6.22 The Philippine-Canada Local Government Support Program (LGSP), 2000-2006. This is a capacity development program funded by the Canadian International Development Agency (CIDA). It is geared towards promoting efficient, responsible, transparent, and accountable governance in targeted regions in Western Visayas and Mindanao. LGSP implements initiatives and projects to enhance the capacities of LGUs and civil society organizations in partnership with Local Resource Partners in the areas of local government management, service delivery, resource generation and mobilization, and participatory governance. Phase I of LGSP was instituted from 1991 to 1999 with a C$22.4 million grant. The work continues until August 2006 under the Phase II with a C$34.8 million grant. Phase I and II supported 205 LGUs consisting of 175 municipalities, 11 cities, and 18 provinces across Mindanao and Western Visayas. Since December 2004, LGSP has focused on sustaining and institutionalizing results at the national level with DILG and the LGU leagues, particularly related to local planning, policy development, replication of exemplary practices, institutionalizing LGPMS, DILG local resource centers, and DILG organizational development. In 2005, LGSP II was granted an 18-month extension to focus on sustaining the gains of LGSP through various project activities, aimed at strengthening the enabling environment for local governance.

6.23 The Philippine-Canada LGSP in ARMM, 2005-2010. This is a C$18.0 million grant that supports capacity development for all 105 LGUs in the ARMM, selected departments of the Autonomous Regional Government, and LGU leagues from 2005 to 2010. It collaborates closely with the World Bank’s ARMM Fund Project and builds on the capacity building frameworks, methodologies, and lessons learned from LGSP. The Program aims to enhance local government leadership and management, service delivery, resource generation and management, participatory governance, and peace building.

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6.24 The Federation of Canadian Municipalities’ Municipal Development Program (MDP), 2002- 2007. This is a program of the Institute of Public Administration of Canada that aims to increase the capacity of municipal governments to address local issues around social development, environmental sustainability, and economic well-being; improve the policy and management environment in which municipalities operate; and strengthen the regional and multilateral networks that support municipalities. MDP’s program in the Philippines, with a funding of C$300,000, supports partnerships between the Province of Bohol and Portage La Prairie to implement a strategic planning project in four pilot municipalities. The pilot projects aim to improve the municipals’ capacity for corporate planning and budgeting. 6.25 Canada Philippines Partnerships Project for Good Urban Governance, 1994- 2006. Through this C$1.6M project, the Canadian Urban Institute supports decentralization and empowerment of communities in Western Visayas. Assistance began in 1994 and the current three-year program will end in 2006. The Metropolitan Iloilo Initiative through the Metro Iloilo Development Council assists five local governments to pursue inter-municipal cooperation, regional planning, growth management, and improvements to regional service delivery.

6.26 Public Sector Capacity Building for Governance and Social Development Program. In the Philippines, this program partners with the Government of the Province of Manitoba and the LGA to strengthen the capacity of selected local officials and functionaries of the provinces of Samar and Benguet, provincial officers of the LGU leagues, and officials of the DILG Region VIII and the Cordillera Autonomous Region. 6.27 Policy, Training and Technical Assistance Facility (PTTAF) Phase II. Building on Phase I, the PTTAF II is a facility through which the Philippine government can draw upon Canadian experiences and capabilities in public sector development. The project targets both the policy level (formulation and regulation of policy) and the operational level (public management and administration). Sub-project activities funded through the facility focus on transparent systems, risk management, regulatory capacity, and court management. Cutting across all activities is the use of appropriate information technology solutions to enhance transparency, accountability, efficiency, and effectiveness in the work of national government agencies. E. Japan 6.28 JSDF Project on Developing Capacities for Pro-Poor Budgeting and Local Government Accountability for Poverty Reduction Project. This project has been approved for grant funding under the Japan Social Development Fund facility. It aims to contribute to reducing poverty at the local government level by increasing participation of the poor and other citizens in tracking poverty incidence, and in making local government budgets and expenditures more transparent and accountable. The project has a grant of US$ 718,269 and will be administered by the World Bank. The Caucus of Development NGO Networks is the grant’s implementing agency. 6.29 Japan Bank for International Cooperation. Japan is the largest donor to the Philippines. It provides official development loans through the Japan Bank for International Cooperation (JBIC) and grants and technical assistance through the Japan International Cooperation Agency (JICA). Japan’s country strategy for official development assistance emphasizes: (i) strengthened economic infrastructure, especially in power, transport, and industry; (ii) poverty reduction and regional development by

33

promoting rural development and improving basic social services; (iii) environmental conservation and disaster management; and (iv) human resource development. While Japan does not directly support financial management and governance activities, it provides indirect support through Japan-based education and training on financial management and public management. 6.30 Local Governments for Better Public Service Delivery. These projects are expected to respond to the needs of local residents and promote their participation in development. Projects in the package that cover administrative support to LGUs include Metro Iligan Regional Infrastructure Development Project, Fisheries Resources Management Project, and Southern Mindanao Integrated Coastal Zone Management Projects. 6.31 Local Government Units Support Credit Program. This will provide low-interest and medium- and long-term fund to LGUs with medium or high credibility, through a policy-based directed credit program with the Land Bank of the Philippines as a conduit GFI. In this way, the Program intends to reasonably diversify the fund sources of LGUs in addition to inducing their self-help effort, meeting their urgent investment needs, and support their implementation of national priority policies in environment, health and housing, until the tax base is firmly established and the fiscal position of national and local governments become sound. The Program will be implemented in close coordination with a country-focused training program for LGUs' officials in the Philippines initiated in FY 1997 by the JICA. On the other hand, the Program will consider the financing of sub-projects, feasibility study of which was prepared through assistance from CIDA. F. New Zealand Aid for International Development (NZAID)

6.32 New Zealand Development Cooperation Programme. The thematic objective of New Zealand on governance supports activities which seek to enhance the quality and sustainability of governance. Of particular emphasis are public sector reform at the national level, devolution, and local government capacity building. NZAID seeks to support two long-term interventions: one on an accountable cash grant with the DBM, and the other on LGU management training in the CARAGA Region in Mindanao.

6.33 Peace and Development Activities in Mindanao. Support will be provided to the GOP/UN multi-donor programme for western and central Mindanao and for the proposed Multi-Donor Trust Fund. NZAID currently supports the Tawi-tawi Community-Based Enterprise Development Assistance Project (Year 1 of a planned three-year program). A capacity building program on project management is currently being implemented by Ateneo School of Government (ASG) with NZAID. G. United States Agency for International Development (USAID) 6.34 Improving the Government Procurement System. This activity supports a government-wide effort to comprehensively reform the rules and procedures governing public procurement. The overall objective is to improve the efficiency, speed, and transparency using a broad-based approach. The USAID project Accelerating Growth, Investment, and Liberalization with Equity provided approximately US$14 million in a comprehensive, multi-sector assistance package.

6.35 Strengthening Local Government Finance. Assistance is being provided to the Congressional Committee on Local Government and the DOF in strengthening the financial structure of LGUs and in legally enabling appropriate amendments to the LGC.

34

6.36 Institutionalizing the Budget Dialogue Group. This activity supports the DBM in its efforts to increase the participatory nature of the national budgeting process.

6.37 Piloting a Budget Management Information System. The DBM is being assisted to develop a new budgeting management information system that responds to the need for transparency and participation in the overall budgeting process. H. The World Bank 6.38 The World Bank's assistance is primarily for tax administration, financial market development, and supervision of financial institutions. In 1998, World Bank approved a Banking System Reform Project 205, which aims to strengthen banking sector regulation and supervision and to develop a resolution framework for troubled banks. 6.39 Local Government Finance and Development Project (LOGOFIND), 1999–2006. This us$100 million project assists participating LGUs to expand and upgrade their basic infrastructure services and facilities and to strengthen their capacities in municipal governance, investment planning, revenue generation, and project development and implementation. It also enhances capabilities at the national level to provide technical support and long-term financing to local governments through the Municipal Development Fund. A project of the DOF through the Municipal Development Fund Office and funded by the World Bank, the LOGOFIND provides long-term financing and technical support to LGUs for the implementation of local development projects. The main target beneficiaries of the LOGOFIND are the low-income LGUs, (i.e., 3rd to 6th income class provinces, cities and municipalities). However 1st and 2nd income class LGUs may also access LOGOFIND assistance, on a case-to-case basis, and specifically for social and environmental sub-projects that would improve sanitation, environment, and quality of life of the urban poor.

• LOGOFIND Sub-loans and Sub-grants for LGU Sub-Projects. This assistance aims to

finance expansion, rehabilitation, and improvement of basic infrastructure and social and environmental services as well as facilities, including equipment and consultancy services.

• LOGOFIND Technical Assistance for LGU Training and Capacity Building. This aims

to upgrade and enhance the technical as well as technological capacities of the LGUs in development planning, municipal finance and revenue enhancement, project management, and social and environmental assessment, among others.

• LOGOFIND Technical Assistance for LGU Resource Mobilization. This aims to

improve and enhance real property tax administration, revenue generation and credit worthiness of LGUs.

6.40 Philippines Water District Development Project (WDDP), 1999. This project financed investments to support the national government’s effort to improve sectoral capacity to deliver basic water supply and sanitation services to consumers. Eligible borrowers included 1st to 3rd class LGUs outside of Metro Manila. 6.41 Philippines Community-Based Resource Management (CBRM). The main objective of the project is to reduce rural poverty and environmental degradation through support for locally generated

35

and implemented natural resource management projects. The LGU sub-project investments has a total of US$54.3 million that would provide eligible LGUs with a mix of grants and loans to finance community-based resource management projects on a demand-driven basis.

6.42 Philippines ARMM Social Fund Projects. The goals of the project are to reduce poverty and to provide support mechanisms for the promotion of peace in the conflict-affected areas of the ARMM. Part of the project’s objective is to improve local governance and institutional capacities focusing on improved transparency and accountability in the allocation and management of public resources by participating communities, LGUs, and the ARMM regional government. The project has US$8.80 million that supports project management, institutional strengthening, and enhanced governance.

6.43 Diversified Farm Income and Market Development Project. The project has macro and micro interventions. At the macro level is the strengthening of the institutional capacity of the Department of Agriculture (DA) through improved systems for planning, enforcements, and support for market development. At the micro level, support is given to focus areas within the framework of devolution: Region 10 (Bukidnon and Central highlands of Mindanao); Region 7 (Cebu and Negros Oriental); Region 6 (Panay Island) and CAR. DA investments in rural roads and other infrastructure are also strengthened by sharpening the selection, approval, and implementation criteria to ensure that market-oriented investments are supported primarily through LGUs and producer groups. 6.44 Philippines Kapit-Bisig Laban sa Kahirapan (KALAHI) CIDSS. The KALAHI-CIDSS is a community-driven development project that aims to empower communities through their enhanced participation in community projects that reduce poverty. Within six years, the project aims to cover 25 percent of the poorest municipalities in the poorest 42 (out of 79) provinces of the Philippines, equivalent to more than 4,000 villages in 182 municipalities. It strengthens community participation in local governance and develops local capacity to design, implement, and manage development activities. The project is implemented by the Department of Social Welfare and Development with the World Bank providing financial support. The total project cost is US$182.4 million: US$100 million from the World Bank; US$31.4 million from the national Government; and US$51 million as cash or in-kind contributions from villagers and their local governments.

6.45 Laguna de Bay Institutional Strengthening and Community Participation, 2003-2009. This project assists the Laguna Lake Development Authority (LLDA), LGUs, and other stakeholders improve the environmental quality of the Laguna de Bay watershed. The project has two components: (1) support for demand-driven investments that will improve the watershed environmental quality, and (2) capacity building for LLDA, LGUs River Councils, and watershed stakeholders on environmental, social, technical, and financial and managerial aspects of watershed management. Training Programs and Degree Courses in LFPM Offered by Local Institutions A. Ateneo School of Government 6.46 Master in Public Management, major in Local Governance. This program is a 39-unit masteral degree program for future leaders of the country. It has two categories: Customized Program for officials and employees who are studying as scholars of a particular organization or institution; and Public Offering for working professionals who wish to study part-time. Courses in local governance include the following: Modern Management in Local Governance, Local Government Finance, Local Legislation, Local Planning and Development, and Local Investment and Enterprise Development. The primary goal

36

of the program is to develop a new breed of public leaders and managers who are visionaries in orientation, strategic and analytical, technically proficient, politically astute, practical, and ethical. 6.47 Project Development and Management Training Program for LGUs. This program provides an introduction to the whole project cycle and covers the various aspects of project design specifically market analysis, technical aspects, management and organization, environmental concerns, financial analysis, and socio-economic analysis. LGUs are coached on how to design actual local government projects. 6.48 Competency-Based Capacity Building Program for LGUs. The Ateneo School of Government is conducting a training program entitled “Competency-based Capability Building Program for LGUs”. The first batch of 15 participants from the CARAGA Region was trained in capability building, specifically in Project Development and Management. The project is funded by the NZAID. 6.49 Philippine Governance Forum. This is a joint project of the ASG with the Ateneo Center for Social Policy and Public Affairs funded by the United Nations Development Program. It aims to promote greater understanding and operationalization of good governance in the country through various initiatives intended to enlighten the public on parameters, policies, practices, and strategies that would bring about greater transparency and accountability of government. B. Asian Institute of Management 6.50 Program Course on Bridging Leadership. This is a three-day training that uses a new approach called "bridging leadership." The bridge leader serves as the catalyst that bridges, connects, and harnesses the interactions among different sectors, thereby focusing globalization on sustainable human development. It is designed for middle- and top-level managers from the government, NGOs, development organizations, and donor agencies. 6.51 Program for Development Managers. This is an intensive course designed to prepare generalist managers for greater responsibilities and more complex management objectives in the development context. 6.52 Project Planning, Development and Management. The revised course offering provides a comprehensive exposure and training on the tools of project analysis and management required by practitioners. It is designed to develop the operational skills needed in each phase of the project cycle, as well as the strategic skills required to integrate and package projects into effective and sustainable programs. It builds on basic concepts and techniques in marketing, finance, economics, social analysis, environmental analysis, and institutional analysis. 6.53 Project and Procurement Management Course in partnership with the International Labor Organization (ILO). The course aims to broaden and deepen the participant’s ability to design projects and enhance his/her knowledge and skills in the procurement of goods and services for the successful implementation of projects. C. Development Academy of the Philippines (DAP) 6.54 Formulating Strategic Options for LGU Revenue Generation and Resource Mobilization. The course provides an understanding of the concepts and principles of good fiscal governance. It teaches the five-step model for LGU revenue generation and resource mobilization. The course covers important

37

concepts and principles of good fiscal governance; traditional and non-traditional practices of revenue generation and resource mobilization; strategies for revenue generation and resource mobilization; and indicators for efficient local fiscal administration.

6.55 Fund Sourcing Seminar. The course explores funding options and sources for projects. Local chief executives and local government staff involved in project development learn the requirements, packages of assistance, and financing programs of foreign funding institutions for LGUs. Topics include legal framework for LGU financing, alternative funding schemes for local development, and information on other financing institutions. 6.56 Enterprise Development Course for Micro-Projects at the Local Level. The course addresses the need to develop capabilities at the local level in planning and managing local enterprises. Particularly, it assists local institutions involved in coordinating small enterprise activities as well as existing and potential entrepreneurs in identifying appropriate micro-projects. Modules include the role of small business enterprise in national development, small enterprise identification, and business project formulation. 6.57 Master in Public Management. The DAP currently offers the Master in Public Management (MPM), a regular offering and the MPM major in Local Governance Management. These programs are distinctly oriented to the requirements of building strong theoretical foundations for the public sector manager. The programs aim to validate these requirements in concrete forms through case studies, fieldwork, and other practical applications. 6.58 Training Courses - Graduate School of Public and Development Management. The training courses offered include (a) Philippine Quality Award; (b) Productivity and Quality for the Academe; (c) Productivity and Quality for LGUs; and (d) Development Program for Productivity Champions.

D. Local Government Academy 6.59 Leadership and Organizational Development includes the following courses: Municipal Capability Building Plan Formulation Workshop to Raise the Level of Organizational Effectiveness; Streamlining Regulatory System: An Anti-Red Tape Seminar Workshop for Local Chief Executives and Functionaries; Workshop to Raise the Level of Organizational Effectiveness; and Executive Course for Enhanced Leadership. 6.60 Planning For Local Development has the following courses: Strategic Planning Seminar Workshop Training on Mapping and Land Use; Executive and Legislative Agenda for Local Governance and Development; Local Prosperity Promotion Planning Training Program; Jumpstarting Local Development: Managing the First Steps: A Course for Newly Elected Local Officials; and Looking Forward to Better Governance: A Continuing Competency Building Course for Re-elected Local Officials. 6.61 The courses under the Development and Management of Projects are as follows: Project Development; Orientation Conference on the Implementation and Management of Projects; Training on Contract Management and Project Procurement Procedures; Seminar-Workshop on World Bank Procurement Procedures; Seminar Workshop on Project Appraisal; Project Post Evaluation Concepts and Procedures; and Project Evaluation.

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6.62 Urban Management has the following courses: Training on Urban Management for LGUs; Mainstreaming the Informal Sector; and Institutional Capacity Building on Public-Private Partnership for LGUs: The Financial and Legal Perspectives. 6.63 Courses on Resource Mobilization and Generation include: Bond Floatation and Other Credit Financing Schemes Under Public-Private Partnership; Seminar/Workshop on Resource Mobilization and Updating the Local Revenue Code; and Local Government Resource Mobilization and Financial Management Analysis. 6.64 The Municipal Enterprise Development and Management has the following courses: Seminar/Workshop on Public Market Administration; Seminar/Workshop on Slaughterhouse Management; and Seminar/Workshop on Bus Terminal Management 6.65 The regular training programs and the corresponding courses are as follows: (1) Local Prosperity Promotion Program—Training on Project Development and Management; Training Course on Feasibility Study; and Executive and Legislative Agenda for Local Governance and Development; (2) Fiscal Management—Professionalizing Local Fiscal Managers: A Key to Greater Local Fiscal Autonomy; and Seminar/Workshop on Resource Mobilization and Updating the Local Revenue Code; (3) Barangay Governance and Development Program—Excellence in Barangay Governance: Capacitating Barangay Officials (4) Urban Management—Institutional Capacity Building Program on Public-Private Partnership for LGUs in the Philippines: The Financial and Legal Perspectives; and Orientation Course on Spatial Planning and Decision Support System for LGUs. E. Institute of Development Management and Governance, UP Los Baños 6.66 Master in Public Affairs. This program offered by UP Los Baños has five areas of specialization: Agrarian and Urban Development Studies, Cooperative Management, Education Management, Local Governance and Development, and Strategic Planning and Public Advocacy. The program aims to educate both current as well as future professionals in key positions of both government and non-government institutions to make them better decision makers, leaders, planners, and program implementers. It provides a strong foundation for graduates to have a better appreciation of issues and capability in dealing with these issues emerging in the process of development and local governance. 6.67 Master of Management major in Development Management. The program has two courses related to LFPM: Fiscal Administration in Development and Management Accounting and Control. 6.68 The Innovative Governance Forum. The forum is an annual event focusing on harnessing innovative practices for sound development and good local governance. It was conceived to address the improvement of the delivery of public service in areas of national concern. F. Local Governance Training and Resource Institutes - Philippine Network (LoGoTRI-PhilNet). 6.69 This is a non-stock, non-profit national association that acts as a catalyst of change for local governments’ institutional development by providing relevant programs and services to empower the participation of the civil society and the private sector for good governance. Major academic institutions are also part of this network like the DAP, Ateneo, NCPAG, De La Salle University (DLSU), and others. The training program offerings of the network are oftentimes the training offerings of the academic institutions.

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6.69 Table 9 is the summary of LFPM trainings and related curricular programs offered by local institutions.

Table 9. List of LFPM and LFPM-Related Courses and Providers AREAS OF

LFPM TITLE/NATURE OF TRAINING TRAINING PROVIDER

Formulating Strategic Options for LGU Revenue Generation and Resource Mobilization

DAP

Resource Generation and Mobilization (Bond Floatation and Other Credit Financing Schemes), Updating Local Revenue Code, Local Government Resource Mobilization and Financial Management Analysis

LGA

Revenue Generation

Resource Generation/Mobilization CLRG-UP Diliman, BLGF, LGSP-CIDA

Accounting Accounting seminars and trainings COA, AGIA, PICPA

Internal Auditing

Seminars and trainings COA, AGIA, PICAP

Budgeting Seminars and trainings

LGA, COA, DBM, USA RCPMG, CLRG-UP Diliman

Enterprise Development Course for Micro-Projects at the Local Level Enterprise Development

DAP SEED/ CREMDEC

Public Enterprise System USA RCPMG Municipal Enterprise Development and Management LGA, ASG

Local Economic Development

Local Prosperity Promotion Program (LPP) LGA Project Planning, Development and Management AIM Project implementation, monitoring and evaluation, LOGFRAME, community mobilization project

ASG

Barangay Governance and Development Program

Local Development Planning

Planning for Local Development

LGA Project and Procurement Management Course AIM with ILO Procurement programs ADMU, DLSU,

PMMAP Procurement seminars ADB, AGIA, PICPA

Procurement

Philippine Governance Forum ADMU Master in Public Management MPM major in Local Governance Management

DAP

Master in Public Affairs, major in Local Governance and Development Master in Management Development Management

IDMG-UPLB

Certificate and degree programs in Public Administration

NCPAG-UP Diliman

Certificate and degree program in Governance DLSU Institute of Governance

Certificate in Barangay Administration UP Open University Master in Public Management, major in Local Governance

ASG

Curricular Programs

Course on Bridging Leadership Masters Program in Development Management

AIM

7. INSTITUTIONAL ARRANGEMENTS Methods of Tapping LGU Beneficiaries

7.1 This section describes the institutional arrangements in supporting the LGUs in local finance. The three groups of respondents provided support to LGUs based primarily on the initiatives of the local government officials themselves. Majority of the assistance providers based their grant of support on the LGUs’ formal request for assistance. This involved the submission of a written request from the local

40

chief executive (LCE) indicating the need for certain types of support. The request was more often accompanied by a proposal containing the need to be addressed by the LGU including the target time frame, responsible office and cooperating offices, and expected outputs.

7.2 Moreover, LGUs may avail of support through informal means. Local officials may express their desire for support through dialogues, attendance to meetings, and participation in public fora. They may also make an informal request by visiting the organizations providing support. In some instance, some LGUs directly submitted proposals to funding agencies. Donors and providers of assistance preferred that the initiative came from the LGUs themselves, as such implied a higher level of ownership and support for a possible program.

7.3 The second mode of tapping LGU partner-beneficiaries was the referral of other organizations, agencies or offices. The referral came primarily from some LGUs that had knowledge about the needs of other LGUs. Referrals were also made by NGOs, NGAs, and private organizations.

7.4 Support providers also extended previous partnerships. Because of fruitful relationships in the past resulting to mutual benefits, the same partnership undertakings may be repeated or extended. Common membership of both the support providers and the LGU beneficiaries in the same organization can become the basis of a partnership that entails provision of support in LFPM. Partnership can also be expanded especially if the undertaking has provisions for replication.

7.5 The two least commonly used modes of seeking LGUs as partner-beneficiaries were (a) identification or selection by donor-providers themselves, and (b) search through public announcement. Donor-providers usually selected LGUs that have been their partners in the past, although there may be new or different arrangements, such as selections based on some predetermined criteria. When public announcement was used, the donors generally resorted to internet posting and sending of messages to those in the mailing list. Announcements in newsletters and advertisements in radio and television were used only by Group 1 and Group 3 respondents. Advertisements in newspapers and printed materials were used only by Group 3 respondents (LGUs). The other mode which was not identified by the respondents but is currently practiced is when the NGAs propose for a project to donor agencies with LGUs as one of the recipients of the grant. If the assistance is a loan, the LGUs are most commonly identified based on the need or problem being addressed by the project proposed.

Forms of Working Arrangements

7.6 There were generally formal working arrangements in the provision of support to LGUs primarily through a Memorandum of Agreement and Memorandum of Understanding. The secondary forms of arrangements were contracts and program documents in the case of technical and financial cooperations. The terms and conditions for donors in the order of priority were (a) provision of technical assistance or expert services, (b) monitoring and evaluation, (c) compliance to agreed terms of reference, (d) conduct of baseline survey before collaboration or assistance is made, (e) impact assessment, and (f) timely release of funds.

7.7 For the LGU beneficiary, the prioritized terms and conditions were (a) counterpart funds or resources, (b) proposed area of collaboration within the priority areas, (c) delivery of agreed objectives or expected outputs of collaboration, (d) demonstration of readiness or passing a readiness assessment, (e) submission of technical reports of collaboration, (f) submission of financial reports, and (g) acceptance of structural adjustments that are packaged with the assistance. The cost of support varied according to the

41

groups of organizations. There were three major costs involved: direct cash outlay, facilities and equipment, and non-cash expenses. 7.8 The support provided to the LGUs produced tangible outputs, which subsequently generated tangible and intangible assets and developed the LGUs’ skills and capabilities. All of these ensued certain benefits to the LGUs as organizations and enhanced their awareness for large-scale local community participation (Figure 2). The specific outputs of the LGUs were (a) trainings, seminars, and workshops attended, (b) plans formulated, (c) programs and projects designed, (d) policies formulated, analyzed, and passed, (e) systems, procedures, and protocols established, and (f) study, research, and survey results generated. Regarded as secondary outputs were (a) study sites visited and (b) modern equipment and facilities secured. 7.9 Majority of the support provided to LGUs also generated assets. These were primarily in the form of (a) trained human resources, (b) improved systems, procedures, and protocols, (c) additional institutional linkages or networks, and (d) enhanced LGU service facilities. Other resources generated, though of minimal magnitude, included: (a) additional funds, (b) equipment, (c) more supplies, and (d) intellectual properties. 7.10 Almost all (92.3%) of the organizations giving support also developed or improved certain specific skills and capabilities. Majority of them gained skills and capabilities in (a) project management, (b) project development, (c) monitoring and evaluation, (d) policy formulation, development, and analysis, (e) planning, (f) budgeting, and (g) income generation. On the other hand, a small number of respondents gained skills and capabilities in (a) financial planning, (b) conduct of studies, researches, and surveys, (c) financial analysis, (d) use of information, communication, and technology (ICT) equipment, (e) financial management, and (f) feasibility studies. 7.11 The benefits derived by the LGUs were (a) improved quality of LGU projects in areas other than LFPM, (b) improved observance of transparency and accountability principles, (c) enhanced organizational efficiency and effectiveness, (d) improved public perception and participation, and (e) increased LGUs visibility to the public. The least benefit considered by the respondent organizations was increased public investments. 7.12 More than three-fourths (76.92%) of the respondent organizations believed that the support extended to LGUs created an awareness for large-scale local community participation. In other words, through the support extended to the LGUs, the local officials were able to reach a larger number of their constituents, which enhanced the latter’s awareness that they needed to participate in local government initiatives. This fact is supported by the (a) improved turnout rate of LGU-initiated activities, (b) increased LGU revenue collection, and (c) higher impact assessment results.

OUTPUTS

Primary • Training, seminars and

workshops attended • Plans formulated • Programs and projects

designed • Policies formulated, analyzed,

and passed • Systems, procedures, and

protocols established • Study, research, and survey

results generated Secondary • Study sites visited • Modern equipment and

facilities provided

ASSETS GENERATED Primary • Trained human resources • Improved systems,

procedures, and protocols • Additional institutional

linkages or networks • Enhanced LGU service

facilities Secondary • Additional funds • Equipment • Additional supplies • Intellectual properties

SKILLS AND CAPABILITIES DEVELOPED

Primary • Project management • Project development • Monitoring and evaluation • Policy formulation,

development, and analysis • Planning skills • Budgeting • Income generation

capability Secondary • Financial planning • Conduct of studies,

researches, and surveys • Financial analysis • Use of ICT equipment • Financial management • Feasibility studies

BENEFITS Primary • Improved quality of LGU

projects in other areas • Improved transparency and

accountability • Enhanced organizational

efficiency and effectiveness • Improved public perception

and participation • Increased visibility to public Secondary • Increased public investments

AWARENESS FOR LARGE-SCALE LOCAL COMMUNITY

PARTICIPATION • Improved turnout rate of LGU-

initiated activities • Increased LGU revenue

collection • Higher impact assessment

results

Figure 2. Outputs from Support in LFPM

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43

7.13 The organizations expressed satisfaction with the quality of their working relationship with the LGUs. Majority (87.18%) gave an affirmative response for satisfaction. The satisfaction for LGUs pertained to their relationship with a lower level of local government to whom they provided support. Almost all (96.67%) of the respondents expressed the highest level of satisfaction to the question “Are you satisfied with the quality of your work relationship with the LGU?” Their reasons for satisfaction in order of significance were as follows: (a) the relationship provided mutual benefits to collaborating parties, (b) there were no serious problems encountered, (c) the relationship was flexible and allowed room for necessary adjustments without much difficulty, and (d) the working relationship was ideal, can meet expectations, and can produce the deliverables. A relatively small percentage of respondents believed that the relationship was independent of political agenda.

7.14 The major reasons of those who were dissatisfied with the working relationship with the LGUs were (a) the relationship was being associated with the LGU’s political agenda, (b) the existing working relationship was problematic and there were gaps in various aspects, and (c) the working relationship cannot always deliver what it is supposed to deliver. A perceived association with the political agenda often led to biased judgment on existing working relationships, making even the simplest transaction very slow and problematic.

Provision of LFPM Support as Mandate 7.15 Majority (64.23%) of the respondent organizations regarded their organizations as having mandates to provide support in LFPM to LGUs (Table 10). However, the kind of mandate and the extent of support differed among the groups.

Table 10. Number of Organizations with Mandate to Provide Support in LFPM GROUP 1 GROUP 2 GROUP 3 TOTAL Frequency % Frequency % Frequency % Frequency %

With mandates

23

58.97

14

63.64

42

67.74

79

64.23

No mandates

16

41.03

8

36.36

20

32.26

44

35.77

Total

39

100

22

100

62

100

123

100

7.16 Less than half (41.03%) of the Group 1 respondents, particularly the NGOs, said that they had an indirect mandate to help LGUs in LFPM since their support for the latter was just incidental in accomplishing their primary mandates. Their primary operations actually revolved around other fields like micro and small enterprise development, environmental protection, integrated area development, participatory governance, and extension programs. However, their programs/ projects in these areas had financial components which entailed them to deal with LGUs on matters related to LFPM. Thus, the extent of support for LFPM may be said to be rather limited because this was incidental to their primary mandates. They cannot engage in full LFPM support especially if it is outside the realms of their major operations. 7.17 The percentage of Group 2 respondents (NGAs and GOCCs) who reported that they had mandates to support LFPM was relatively higher (63.64%). This is because government agencies have the Constitution, republic acts, presidential decrees, and executive orders as legal bases to support LGUs. Thus, the mandate can be categorized as direct support to LGUs. Nonetheless, for these government agencies, LFPM was just one of the many services they covered. It was also evident that the government agencies had LFPM area-specific mandates. For example, the GFIs were concerned specifically with credit financing; COA was primarily involved in accounting and auditing; DBM was focused on budgeting and procurement; and NEDA was geared towards development planning, and so on. 7.18 For Group 3 respondents (LGUs), it was quite disconcerting that 35.77 percent of the respondents did not consider LFPM assistance as part of their mandates. The Constitution and the LGC are supposedly the primary sources of mandates for inter-LGU support system. Others had local issuances like ordinances that should rationalize their support to other LGUs in specified LFPM areas. Still, others had

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the local chief executive’s agenda or leadership discretion as the primary basis for claiming a mandate for LFPM assistance. Interest for Partnership with EPRA 7.19 Almost all (86.18%) of the organizations surveyed expressed their interest to enter into partnership with the Economic Policy and Reform Advocacy (EPRA) program. Such interest was higher in Group 1 (94.87%) and Group 3 (90.32%) than in government agencies (59.09%) as shown in Table 11.

Table 11. Number of Organizations Interested in the EPRA Partnership

GROUP 1 GROUP 2 GROUP 3 TOTAL Frequency % Frequency % Frequency % Frequency %

With Interest

37

94.87

13

59.09

56

90.32

106

86.18

No Interest

2

5.13

9

40.91

6

9.68

17

13.82

Total

39

100

22

100

62

100

123

100

7.20 Among Group 1 respondents, the types of arrangement with the EPRA can be through (a) collaborative research; (b) joint capacity building activities; (c) joint program or project implementation; (d) serving as a regional conduit or regional extension partner of EPRA; (e) expertise sharing in various services like livelihood development, peace and development, and regional planning; and (f) serving as client-beneficiary of EPRA in institution building. 7.21 Among government agencies, the types of arrangement were through (a) information sharing; (b) serving as EPRA’s local resource person; (c) partnership in policies to further improve the LGUs; and (d) provision of financial assistance to EPRA LGU-clients. 7.22 LGUs were willing to enter into partnership with the EPRA through various arrangements but prioritized as follows: (a) capacity building packages for LGUs specifically trainings on LFPM-specific areas (e.g., innovative revenue-generation, local economic development, and project feasibility studies); (b) enhancement of LGU capacity in policy formulation/development and analysis; (c) making LGUs as subjects of EPRA researches; (d) enhancement of the research competencies of LGUs both at the individual and organization levels; (e) development of investment centers and business promotion; and (f) equipment facility donation.

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8. FACILITATING FACTORS IN LFPM 8.1 Seven factors that facilitated the successful conduct of support in LFPM were identified by the respondents. The percentage of responses was translated into verbal interpretation. The equivalent extent of contribution of the facilitating factors was as follows:

Verbal Interpretation Extent of Contribution as Facilitating Factor

0-19.99 Poor Not at all 20-39.99 Fair Small extent 40-59.99 Satisfactory Moderate extent 60-79.99 Very Satisfactory Large extent 80-100 Excellent Great deal

8.2 Of the seven factors facilitating LFPM, the staff behavior was cited by 80.20 percent of the respondent organizations surveyed. Its verbal interpretation of “excellent” implies that it was significant to a “great deal” in the attainment of the desired results from LFPM support (Table 12). The other factors that helped to a “large extent” were objectives of support (75.73%), political stability (64.44%), institutional processes (64.27%), and participatory approach (62.91%). Financial transparency (57.78%) and financial accountability (57.09%) also facilitated to a “moderate extent” the LFPM support to LGUs.

Table 12. Seven Facilitating Factors in LFPM

Facilitating Factors % Verbal Interpretation

Extent of Contribution

Rank

Objectives of support 75.73 VS LE 2 Political feasibility 64.44 VS LE 3 Staff behavior 80.20 E GD 1 Institutional processes 64.27 VS LE 4 Participatory approach 62.91 VS LE 5 Financial accountability 57.09 S ME 7 Financial transparency 57.78 S ME 6

Legend: 0-19.99 (Poor/Not at All); 20-39.99 (Fair/Small Extent); 40-59.99 (Satisfactory/Moderate Extent); 60-79.99 (Very Satisfactory/Large Extent): 80-100 (Excellent/Great Deal); VS (Very satisfactory), S (satisfactory), E (Excellent).

Objectives of Support

8.3 Majority (75.73%) of the respondents believed that the clarity of objectives, familiarity with the objectives, involvement of both parties in a partnership, and the translation of objectives to operation plans all fostered the successful provision of LFPM assistance to LGUs (Table 13). The clarity of objectives was observed to be in place by 77.78 percent of the organizations surveyed. In effect, it indicated that there was a “very satisfactory” level in the clarity of objectives in the provision of assistance to LGUs. The clarity of objectives as well as the LGU’s knowledge, awareness and familiarity with these objectives may have contributed to a large extent in the successful provision of support for LFPM.

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8.4 The objectives for support must also be understood by the LGU clients. This factor was cited by 76.92 percent of the LGUs indicating a “very satisfactory” compliance. A common understanding of the objectives between the partners was cited by 75.21 percent of the respondents. A total of 75.21 percent of the respondents also said that their objectives defined the stakeholders’ involvement. This implied that the three factors contributed to a “large extent” in the LFPM support for LGUs because these provided a conducive situation for the active participation of partners and stakeholders.

8.5 Majority (73.5%) of the respondents also believed that the objectives of support were translated to operational plans, indicating a “very satisfactory” performance among the organizations surveyed. It is important that the objectives can be translated and interpreted in concrete directions and actions to ensure active participation of leaders and stakeholders.

Table 13. Percentage Scores on Objectives of Support

Objectives of Support %

Verbal Interpretation

Extent of Contribution

Rank

Does your support to the local government have clear objectives?

77.78

Very Satisfactory

Large Extent 1

Are the objectives of your support known by the local government?

76.92

Very Satisfactory

Large Extent 2

Are the objectives of both institutions clear and specific on both sides?

75.21

Very Satisfactory

Large Extent 3.5

Do your objectives define the local stakeholders' involvement?

75.21

Very Satisfactory

Large Extent 3.5

Are your objectives of support translated to operational plans?

73.50

Very Satisfactory

Large Extent 5

Total

75.73

Very Satisfactory

Large Extent

Legend: 0-19.99 (Poor/Not at All); 20-39.99 (Fair/Small Extent); 40-59.99 (Satisfactory/Moderate Extent); 60-79.99 (Very Satisfactory/Large Extent): 80-100 (Excellent/Great Deal)

Political Feasibility 8.6 Political feasibility deals with the degree of power that the leaders have in deciding whether to continue the support or not. In other words, it is of primary importance that once a support is established and is found to be beneficial, a decision about its commitment and sustainability should be firm. Likewise, the community’s satisfaction with the support mechanism reinforces the positive outlook of the leaders and enhances the support’s sustainability. 8.7 The study revealed that political feasibility existed for 64.44 percent of the respondents, indicating a “very satisfactory” support landscape for LFPM. As such, this factor facilitated the success of LFPM support to LGUs to a “large extent” (Table 14). The aspects of political stability determined to be contributory were alignment of support with the LGU’s vision and mission (74.36%); adequate room for the organization leaders to decide the pursuance of support (69.23%); prioritization of the provision of support by the organizational leadership (64.96%); and consideration of community satisfaction in the mechanisms used to deliver the support (61.54%). The existence of a long-term strategy for local government support was considered to be facilitating factor to a “moderate extent” by 52.14% percent of

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the respondents. The “very satisfactory” assistance manifested has some bearing on the multitude of assistance provided to LGUs since the 1991 decentralization. Local government leadership was generally satisfied with the support landscape it was receiving specially support with direct financial assistance. This also points to the fact that LGUs are performing their mandates with the assistance of institutions.

Table 14. Percentage Scores on Political Feasibility

Political Feasibility %

Verbal Interpretation

Extent of Contribution

Rank

Is there a long-term strategy for local government support?

52.14

Satisfactory Moderate Extent

5

Is the provision of support a priority of your organizational leadership?

64.96

Very Satisfactory

Large Extent

3

Are the plans and programs of support in line with the LGUs’ vision and mission?

74.36

Very Satisfactory

Large Extent

1

In general, is the community satisfied with the mechanisms used to deliver the support to the LGUs?

61.54

Very Satisfactory

Large Extent

4

Is there enough room on the part of your leaders to decide the pursuance of support to the LGUs?

69.23

Very Satisfactory

Large Extent

2

Total

64.44

Very Satisfactory

Large Extent

Legend: 0-19.99 (Poor/Not all); 20-39.99 (Fair/Small Extent); 40-59.99 (Satisfactory/Moderate Extent); 60-79.99 (Very Satisfactory/Large Extent): 80-100 (Excellent/Great Deal)

Staff Behavior

8.8 The quality of staff is manifested in both the character traits and behavior of the employees who are directly involved in the provision of support to LGUs. Table 15 shows that 80.20 percent of the respondent organizations said their staff had this quality. Three distinct traits of the staff were rated “excellent” or contributory to a “great deal” in the success of LFPM assistance. These were friendliness and approachability to the LGU client-partners (83.76%); rapport with the client (83.76%); and willingness to provide as much assistance as possible (81.2%). This result confirms the findings in many collaborative undertakings that the soft skills and affective qualities of staff are indeed prerequisites for more harmonious working relationships. Benefits from the technical expertise of staff are maximized when shared in an atmosphere of genuine friendship and desire to help.

8.9 The behaviors that helped accomplish tasks were the following: allowing the client-partners to provide inputs or suggestions to the programs or projects (79.49%); providing quick responses to client-partners in need (77.78%); and exhibiting expertise on the job (75.21%). The survey showed that the staff in LGUs (96.67%) were generally rated to be better in meeting the requirements for LFPM assistance than the staff in the national government and GOCCs (84.17%), and international funding agencies, NGOs, and academic institutions (80.63%).

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Table 15. Percentage Scores on Staff Behavior

Staff Behavior %

Verbal Interpretation

Extent of Contribution

Rank

Are your staff friendly and approachable to the LGU client-partners?

83.76

Excellent

Great Deal

1.5

Are your staff willing to provide as much assistance to the LGU client-partners?

81.2

Excellent

Great Deal

3

Do your staff exhibit expertise on the job?

75.21

Very Satisfactory

Large Extent

6

Do your staff provide quick responses to your LGU client-partners in need?

77.78

Very Satisfactory

Large Extent

5

Do your staff allow the LGU client-partners to provide inputs or suggestions to the programs/projects?

79.49

Very Satisfactory

Large Extent

4

In general, has rapport been developed between your staff and the LGU client?

83.76

Excellent

Great Deal

1.5

Total 80.2 Excellent Great Deal

Legend: 0-19.99 (Poor/Not all); 20-39.99 (Fair/Small Extent); 40-59.99 (Satisfactory/Moderate Extent); 60-79.99 (Very Satisfactory/Large Extent): 80-100 (Excellent/Great Deal)

8.10 On the other hand, these results also confirm that soft skills seemed to be prioritized in favor of the technical competencies needed to excel in the job. The job description of the local finance committee requires much more than soft skills. For example, in the duties and responsibilities of the local finance committee, the treasurer advises the LCE on ‘the disposition of local government funds’ (Title 5, Article 2: Section 470 of LGC of 1991); the accountant ‘apprises the sanggunian and other LGU offcials on the financial condition and operations of the LGUs’ (Title 5, Article 4: Section 474 of LGC of 1991); the budget officer ‘reviews and consolidates the budget proposals of the different departments of the LGUs and assists the LCEs as the case maybe’ (Title 5, Article 4: Section 475 of LGC of 1991); and the planning and development coordinator ‘analyzes the income and expenditure patterns and formulates and recommends fiscal plans and policies for consideration of the local finance committee’ (Title 5, Article 6: Section 476 of LGC of 1991). These identified major responsibilities of the members of the local finance committee often are not performed creating what the LOGOFIND termed as the ‘vacuum’ in local governance or to certain extent missing out on the most in demand need of the LGUs (i.e. to generate resources). Likewise, a shift in the perception of operational orientation, skills and processes, and commitment to the required internal competency changes is needed.

Institutional Processes 8.11 Various aspects of institutional processes were noted to be proper and in order by 64.27 percent of the respondent organizations (Table 16). This factor was rated to be “very satisfactory” and the quality of institutional processes facilitated to a “large extent” the success in FPM initiatives. Clear and orderly institutional processes allow the activities to progress with the fewest unintended setbacks and the least

49

possible imposition of social costs. The aspects of institutional processes that were regarded as favorable to a “large extent” were availability of procedures and guidelines in the implementation of plans and programs (67.52%); existence of mechanisms using the local councils or board (66.67%); adequacy of mechanisms for review, evaluation, and implementation of plans and programs (65.81%); and presence of a coordinating body that manages the support program (62.39%). These factors point to clear institutional arrangements and planning processes that enabled the activities to be interrelated and interconnected towards the attainment of program objectives. Efficient programming was rated to be in place to a “moderate extent” by 58.97 percent of the respondents.

Table 16. Percentage Scores on Institutional Processes

Institutional Processes %

Verbal Interpretation

Extent of Contribution

Rank

Is there a coordinating body that manages the support program to the LGU?

62.39

Very Satisfactory

Large Extent

4

Are there procedures and guidelines to facilitate the implementation of plans and programs with the LGU?

67.52

Very Satisfactory

Large Extent

1

Does the support allow for mechanisms that make use of established local councils or board?

66.67

Very Satisfactory

Large Extent

2

Are there mechanism for review, evaluation, and improvement of plans and programs?

65.81

Very Satisfactory

Large Extent

3

Do you achieve your client-partners’ goals because of efficient programming?

58.97

Satisfactory Moderate Extent

5

Total

64.27

Very Satisfactory

Large Extent

Legend: 0-19.99 (Poor/Not all); 20-39.99 (Fair/Small Extent); 40-59.99 (Satisfactory/Moderate Extent); 60-79.99 (Very Satisfactory/Large Extent): 80-100 (Excellent/Great Deal)

Participatory Approach 8.12 Participatory approach was noted to be practiced by 62.91 percent of the respondent organizations, indicating a “very satisfactory” compliance to the participatory approach (Table 17). This also showed that participation was alive among the support-providers of LFPM to LGUs. Indeed, participation among the partner-beneficiaries is very important. Four aspects were regarded as facilitating factors to a “large extent”, namely: involving the LGU clients in the identification and prioritization of focus of support (67.52%); determining operating policies with client-partners (64.1%); involving client-partners in monitoring the status of support (64.1%); and conducting regular meetings and consultations with client-partners (60.68%). These factors highlighted the importance of intensive consultations with client-partners from planning to monitoring and evaluation as well as the benefits from consensus-building and collegial decision-making. 8.13 Rated “satisfactory” was the formulation of procedures with maximum inputs from the client-partners, which was practiced by 58.12 percent of the respondent-organizations. One interpretation of the

50

data from the results, is that participatory approach of LGU client partners happens as a consequence of the sector-specific interventions they implement with partners LGUs and not necessarily in direct relation to LFPM.

Table 17. Percentage Scores on Participatory Approach

Participatory Approach %

Verbal Interpretation

Extent of Contribution

Rank

Are your policies on program operations determined with your LGU client-partners?

64.1

Very Satisfactory

Large Extent

2.5

Are your procedures carefully formulated with maximum inputs from the LGU client-partners?

58.12

Satisfactory

Moderate Extent

5

Do you involve the LGU clients in the identification and prioritization of focus of support?

67.52

Very Satisfactory

Large Extent

1

Do you conduct regular meetings and consultations with the LGU client-partners?

60.68

Very Satisfactory

Large Extent

4

Do you involve the LGU clients in the monitoring of the status of your support?

64.10

Very Satisfactory

Large Extent

2.5

Total

62.91

Very Satisfactory

Large Extent

Legend: 0-19.99 (Poor/Not all); 20-39.99 (Fair/Small Extent); 40-59.99 (Satisfactory/Moderate Extent); 60-79.99 (Very Satisfactory/Large Extent): 80-100 (Excellent/Great Deal)

Financial Accountability 8.14 More than half (57.09%) of the respondent organizations valued the principle of financial accountability and had in place the necessary mechanisms (Table 18). This reflected a “satisfactory” adherence to this principle of good governance. Three aspects of financial accountability with “very satisfactory” measures in place were: implementing management practices resulting in the best possible value from public funds (66.67%); giving financial management advice to LGUs (61.54%); and requiring LGUs to formally account for any financial obligation (60.68%). 8.15 Two “satisfactory” aspects of financial accountability were knowing how well the LGUs perform financial management responsibilities (50.43%); and providing measures to mitigate risks of theft, fraud, or misuse of funds or properties (46.15%). These results show the general improvements needed by the LGUs in LFPM—the need for competency-based standards by which to assess performance of the local finance committee and the need for enhancement of managerial control systems of the LGUs. The conflict arises in the execution of the accounting and internal control systems as performed by one functionary in the person of the accountant. Financial Transparency

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8.16 Together with accountability, transparency in financial operations is also of paramount importance in managing organizations. Financial transparency was observed by 57.78 percent of the organizations surveyed, indicating a “satisfactory” situation in managing their financial affairs (Table 19). This factor influenced to a “moderate extent” the outcome of initiatives among organizations providing assistance to LGUs.

8.17 Two aspects of financial transparency that were rated “very satisfactory” by the respondents were clear communication of financial management roles, objectives, and policies (64.10%); and tracking financial status in the entire duration of support (61.54%).

8.18 The aspects that were rated “satisfactory” were generation of financial information that is easily combined with operational data for managing the LGU (56.41%); provision of updated information on financial status to the LGU client-partners (55.56%); and use of information technology to improve the efficiency of managing the LGUs’ financial resources (51.28%).

Table 18. Percentage Scores on Financial Accountability

Financial Accountability %

Verbal Interpretation

Extent of Contribution

Rank

Do your management practices result in getting the best possible value from public funds?

66.67

Very Satisfactory

Large Extent

1

Do you require the LGU to formally account for any financial obligations through management contracts, accountability accord or similar managerial agreements?

60.68

Very

Satisfactory

Large Extent

3

Do you give financial management advice that helps the LGU make better decisions?

61.54

Very Satisfactory

Large Extent

2

Do you know how well the LGU is doing in financial management responsibilities?

50.43

Satisfactory

Moderate Extent

4

Do you have provisions in case of theft, fraud or misuse of funds or property on the part of the LGU?

46.15

Satisfactory

Moderate Extent

5

Total

57.09

Satisfactory

Moderate Extent

Legend: 0-19.99 (Poor/Not all); 20-39.99 (Fair/Small Extent); 40-59.99 (Satisfactory/Moderate Extent); 60-79.99 (Very Satisfactory/Large Extent): 80-100 (Excellent/Great Deal)

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Table 19. Percentage Scores on Financial Transparency

Financial Transparency %

Verbal Interpretation

Extent of Contribution

Rank

Do you clearly communicate financial management roles, objectives and policies as they apply to the LGU?

64.1

Very Satisfactory

Large Extent

1

Do you generate financial information that is easily combined with operational data for use in managing the LGU?

56.41

Satisfactory

Moderate Extent

3

Do you make use of information technology for improving the efficiency in managing the LGU’s financial resources?

51.28

Satisfactory

Moderate Extent

5

Do you provide updated information on financial status to the LGU client-partners?

55.56

Satisfactory

Moderate Extent

4

Are there mechanisms to track financial status during the entire duration of your support?

61.54

Very Satisfactory

Large Extent

2

Total

57.78

Satisfactory

Moderate Extent

Legend: 0-19.99 (Poor/Not all); 20-39.99 (Fair/Small Extent); 40-59.99 (Satisfactory/Moderate Extent); 60-79.99 (Very Satisfactory/Large Extent): 80-100 (Excellent/Great Deal)

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9. DESCRIPTION OF CONSTRAINTS IN LFPM ASSISTANCE 9.1 This section of the report discusses the common areas of confusion and difficulties faced by institutions in providing LFPM assistance. It also reports on the least provided assistance by institutions to LGUs. Common Areas of Confusion 9.2 The three groups of respondents identified certain issues, gaps, and areas of confusion that were common to them, such as: (a) dependency of LGUs in financial assistance from other entities like NGAs and NGOs; (b) lack of awareness or appreciation of LGUs on the value of counter-parting; (c) risks involved in the change of local administration; and (d) effects of some cultural practices in the management of funds. 9.3 Dependence of LGUs on financial assistance was evident when they became partners of other entities. There was always an expectation that funds will flow to the local government and this influenced the extent of cooperation and participation of the local officials. Aside from the IRA coming from the national government, LGUs also expected funds as components of projects and fund releases from congressmen and senators. Indeed, the LGUs’ degree of dependency increased over time instead of lessening as they should have developed their own ways of raising funds. 9.4 LGUs were also hesitant and very slow in providing counterparts (e.g., cash, materials, labor, space) for projects which indicated their lack for regard on the concept of counter-parting and reflected their dole-out mentality. This fact was emphasized by NGOs and GFIs that provided credit facilities for LGUs that were supposed to have their own equity. 9.5 Changes in administration also modified the focus of local governance and shifted priorities in programs and projects. The risk was high when the administration changed at the height of implementation of a program or project, which in turn resulted to a high degree of uncertainty among the implementors and beneficiaries. New officials generally had other agenda that were different from those included in previously approved plans resulting in a wide range of inconsistencies. 9.6 Both the NGAs and the LGUs cited certain cultural practices that impinged upon the management of finances of the LGUs as an area of confusion. The uniqueness of the Maranao culture was cited as an example. 9.7 Other gaps which the Group 1 respondents identified were the need for a clearer definition and requirements of real participation of local communities in the affairs of local governance especially in resource allocation; lack of capacity of LGUs to reform or update the local tax systems, including the local tax code; absence of post-training follow up or feedback mechanisms; difficulty of conducting computer-based training because of lack of computers among LGUs; and overlaps on certain functions of the DILG and DOF. 9.8 Among NGAs and GOCCs, the gaps included lack of competence of LGUs in debt management and enterprise development and management; and lack of complementation of programs and areas of jurisdiction among those providing support to local governments.

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9.9 LGU respondents identified the high degree of politicking in the management of financial affairs among themselves as an issue. For instance, funding of barangay projects by the cities was a matter of political affiliation of the barangay chair with the city officials. Political misunderstanding among leaders also adversely affected financial management. There was too much informality in managing finances when political relationship was given importance. Furthermore, the cities and municipalities expressed concerns about barangay officials who were confined in the sphere of politics in running the affairs of the government. 9.10 LGUs also regarded different interpretations of national policies and executive issuances by the officials of national agencies as an area of confusion. This was particularly true in the case of the COA where auditors differed in the interpretation of rules and in the conduct of audit. There were situations when certain practices were allowed by some auditors but disallowed by another auditor of the same state auditing body. Difficulties 9.11 The respondents were asked to assess eight factors that can hinder their delivery of services and thus become a problem to them. Two of the factors were determined to be constraints: (a) funding limitations; and (b) scarcity of individual competence in the organizations. 9.12 Funding Limitations. There were varying perceptions about the adequacy, availability, and provision of financial resources in the respective organizations surveyed (Table 20). Majority (52.87%) considered funding as a constraint in terms of adequacy (64.29%) and availability (63.75%). However, 67.12 percent of the respondents revealed that their organizations used their financial resources for the purposes for which these were allotted. Whether a relationship exists between the purpose for which the funds are allocated and the adequacy of these funds to generate the expected outputs is yet to be determined. 9.13 A large percentage of the respondents were also worried about the use of funds for the intended purpose (32.88%) and about provisions for future financial requirements (48.05%). These figures should be considered because these imply that many of the respondent organizations assessed such funding limitations to possible affect their service delivery in LFPM support.

Table 20. Assessment of Funding Limitations

YES NO Funding Limitations Freq. % Freq. %

Financial resources are adequate to meet current objectives in the field of LFPM.

30

35.71

54

64.29

Financial resources are immediately available when needed.

29

36.25

51

63.75

There are provisions for future financial requirements in LFPM.

40

51.95

37

48.05

Financial resources are used for the purpose for which they were allotted.

49

67.12

24

32.88

Total

148

47.13

166

52.87

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9.14 Scarcity of Individual Competence. Over half of the respondents (51.05%) believed that there was a scarcity of knowledge, competence and skills among suppliers and users of support (Table 21). Generally, there was a shortage of knowledge and skills among people in the organization providing the support (60.49%) and those in the LGUs who were receiving the support (70.59%). However, there was a general belief that there was competency development of both the support providers (66.67%) and the LGU beneficiaries (60.24%). This development support was integrated as a major component in the total support package.

Table 21. Scarcity of Individual Competence

YES NO Individual Competence Freq. % Freq. %

There is scarcity of knowledge or skills among people in the organization that constrain the management of support in the area of LFPM.

49

60.49

32

39.51There is absence or lack of technical knowledge among LGUs in areas related to the provision of support.

60

70.59

25

29.41

There is lack of competency development for the staff in the organization.

28

33.33

56

66.67

There is lack of competency development for the staff of client LGUs in areas related to the support provided.

33

39.76

50

60.24

Total

170

51.05

163

48.95

Not Difficulties 9.15 Six other factors that were not assessed as constraints by the respondents were the following: (a) linkaging activities; (b) information dissemination; (c) interest of LGU officials; (d) political interference; (e) policy conflict; and (f) geographical dispersion of LGU beneficiaries. 9.16 Linkaging Activities. All aspects of linkaging activities were rated positively by 68.90 percent of the respondents which means these were not considered as problems or constraints in the provision of support (Table 22). There were efforts for linkaging activities initiated by organizations (80%) and these were properly undertaken (77.65%). Linkages were also embedded in the long-term plan of the organization (71.76%). Because there was support for linkages, there was also freedom to engage in linkaging activities that provided mutual benefits (55%). 9.17 Information Dissemination. Majority (71.39%) of the respondents believed that all aspects of information dissemination were properly attended to by their respective organizations (Table 23). It was generally believed that there were effectives means of information dissemination in bringing the message across (78.48%) and information was properly disseminated to the target audience (72.29%). Adequate and effective mechanisms or systems were also in place as believed by 67.90 percent of the respondents, thus creating a wider reach of the target audience as perceived by 67.07 percent of the respondents. 9.18 Information dissemination was important in developing broad support for local finance programs. There must be an effective process through which information is imparted to the stakeholders to increase their awareness, understanding, and appreciation of local finance support programs.

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Table 22. Assessment of Linkaging Activities

YES NO Linkaging Activities Freq. % Freq. %

There are efforts for linkaging activities that are initiated in the organization.

68

80.00

17

20.00

Linkages are embedded in the long-term plan of the organization.

61

71.76

24

28.24

Linkages with various entities are properly undertaken when necessary.

66

77.65

19

22.35

Linkaging activities are provided with adequate support. 49 59.04 34 40.96There is freedom to engage in linkages that provide mutual benefits.

44

55.00

36

45.00

Total

288

68.90

130

31.10

Table 23. Assessment of Information Dissemination

YES NO Information Dissemination

Freq. % Freq. % Information regarding the support is properly disseminated to target audience.

60

72.29

23

27.71

There are adequate mechanisms or systems of information dissemination.

55

67.90

26

32.10

The means of information dissemination are effective in bringing about the message.

62

78.48

17

21.52

There is adequate reach of the target audience in the area of information dissemination.

55

67.07

27

32.93

Total

232

71.39

93

28.61

9.19 Interest of Local Officials. Majority (76.36%) of the respondents believed that local officials were interested in LFPM support (Table 24). They were genuinely interested in availing of the support (79.55%), have openly signified their interest (79.27%), and were willing to undergo the whole process (79.01%) of availing the support. A great percentage (67.09%) of the respondents believed that LFPM was the primary interest of local officials. 9.20 Political Interference. Political interference, while existing in most organizations, was not a constraint as revealed by 60.46 percent of the organizations surveyed (Table 25). Coordinating with political personalities was not deemed to be detrimental in the accomplishment of organizational objectives by 66.67 percent of the respondents. A large proportion of the respondents also did not find the organization’s mandates to be influenced by the political affiliation of its leaders (63.64%) and the accomplishment of tasks was also not affected by political interference (59.77%). Further, over half

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(51.72%) of the respondents said that they did not encounter interference from political figures or personalities.

Table 24. Assessment of Interest of Local Officials

YES NO Interest of Local Officials Freq. % Freq. %

Local government officials are genuinely interested in availing the support provided by the organization.

70

79.55

18

20.45

LFPM is the primary interest of LGU officials. 53 67.09 26 32.91LGU officials openly signify their interest to avail of the support provided by the organization.

65

79.27

17

20.73

LGU officials are willing to undergo the whole process of availing the support.

64

79.01

17

20.99

Total

252

76.36

78

23.64

Table 25. Assessment of Political Interference

YES NO Political Interference Freq. % Freq. %

Mandates are influenced by certain political affiliation. 32 36.36 56 63.64Interference from political figures or personalities is encountered.

42

48.28

45

51.72

Coordinating with political personalities other than the LGU official was found detrimental to the accomplishment of objectives.

29

33.33

58

66.67Accomplishments of tasks has been affected by political interference.

35

40.23

52

59.77

Total

138

39.54

211

60.46

9.21 Policy Conflict. Policy conflict was generally viewed to exist but not to the extent of becoming a constraint, as revealed by 63.60 percent of the respondents (Table 26). Majority (70%) of the respondents did not encounter conflicts in their organizational policies that affected their work performance and 69.74 percent said that there were national policies that conflicted with their support for LFPM. Many of the respondents (61.25%) also saw no conflicts in operating policies that affect their activities. However, half of the respondents believed that conflicts in policies remained unclarified while another half said these conflicts were clarified. 9.22 Geographical Dispersion of LGU Beneficiaries. While some support providers (54.02%) preferred to support certain LGUs in a geographic area, geographic dispersion was not considered to be a problem by 57.14 percent of the respondents. Concerned donors considered geographic preference as a way to balance development. Despite limitations in infrastructure and logistics, more than half of support

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providers (51.85%) did not encounter problems on having widely dispersed clients. Further, many respondents (58.54%) believed that geographic dispersion of LGU clients did not adversely affect their service delivery.

Table 26. Assessment of Policy Conflict

YES NO Policy Conflict Freq. % Freq. %

There are national policies in conflict with the rendition of support in the field of LFPM.

23

30.26

53

69.74

Conflicts in the organizational policies that affect the performance of the work are encountered.

24

30.00

56

70.00

There are conflicts in operating policies that affect the activities.

31

38.75

49

61.25

Conflicts in policies remain unclarified. 29 50.00 29 50.00

Total

107

36.40

187

63.60

Table 27. Assessment of Geographical Dispersion of LGU Beneficiaries

YES NO Geographical Dispersion of LGU Beneficiaries Freq. % Freq. %

There is geographic preference in the selection of client LGUs.

47 54.02 40 45.98

Geographical dispersion among LGU clients is considered as a problem.

36 42.86 48 57.14

Geographical dispersion of LGU clients adversely affect the delivery of the service.

34 41.46 48 58.54

LGU clients encounter problems with geographic location insofar as support is concerned.

39 48.15 42 51.85

Total

156 46.71 178 53.29

10. GAPS AND OVERLAPS IN LFPM This section identifies the gaps and overlaps and the services least provided in LFPM.

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Mismatch of LFPM Assistance with Current Demands in Local Governments 10.1 The mismatch of LFPM assistance has been observed in four aspects: (a) concentration of support on certain areas of LFPM; (b) capacity building focus versus current needs of local officials; (c) concentration of support in larger LGUs; and (d) provision of sector-specific interventions. 10.2 The survey showed that the assistance to LGUs was concentrated on certain areas such as the traditional revenue generation, local development planning, and local enterprise development. Such concentration also reflects that services in certain areas are least provided. Table 28 summarizes the specific areas where institutions provided least assistance to LGUs. These were as follows: (a) alternative sourcing of income through innovative means and investment management for revenue generation; (b) expenditure management for accounting; (c) research studies that will enhance the supply capacities to fulfill the demands of constituents for budgeting; (d) compliance to managerial control systems and research studies for internal auditing; and (e) implementation of the newly enacted procurement acts. The awards systems benchmarking the LGUs’ effective practices covering important areas of LFPM was also inadequate.

Table 28. Least Provided LFPM Assistance

Areas of LFPM Specific Concerns 1. Revenue Generation

• Bonds • BOT Mechanisms • Sourcing of Credit/Financing • Investment Management

2.Accounting

• Expenditure Management • Award System

3.Budgeting

• Research Studies • Award System

4.Internal Auditing • Managerial Control Systems • Research Studies • Award System

5. Procurement

• New Procurement Law • Award System

10.3 Almost all the institutions were clearly engaged in capacity building in LFPM. However, majority of the assistance provided did not match the current demands of LGUs specifically in the provision of trainings on alternative revenue generation strategies, local debt borrowing, expenditure management, and procurement process. Further, it was not clear if the capacity building programs provided in LFPM had standards corresponding to the public sector. Given the multitude of trainings that the LGUs have to undergo for other sector-specific concerns, there was a greater need for capacity building and institutional provisions to provide the needed assistance in LFPM. So far, there have been no efforts made to establish standards of both individual and institutional competencies in LFPM. 10.4 The assistance in LFPM was concentrated in the larger LGUs. On the contrary, municipalities were in greater need of more LFPM assistance than the cities and provinces. Institutional constraints such as asymmetric information, ease of direct borrowing instead of alternative sourcing like bonds, and heavy

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documentations and dealings with investors are forcing small municipalities to depend on IRA and other grant and credit financing from the government. 10.5 LFPM assistance has become a consequence of other sector-specific development interventions rather than a direct assistance intervention of institutions. As a result, the focus of intervention has been geared toward the development of certain sectors and not on the fundamental requirements and significant components of local finance. Consequently, the sustainability of practices in financial management has not been ensured. While the responsibilities of the local finance members have been embedded in the LGC, there is a need to strengthen the generation of funds other than simply the recording and documentation of grants receipts and the facilitation of credit financing. Competing or Conflicting Roles of Government Institutions 10.6 Following the principle of decentralization, the national agencies should provide a catalytic role in the LGUs effective and sustainable management of fiscal and financial resources. Hence, it is of utmost importance to determine (a) the LFPM roles that LGUs have to play under decentralized modes of operation, and (b) the NGAs roles to meet the decentralized modes of operation. While the BLGF is the DOF’s arm that is directly responsible over the fiscal and financial affairs of local government, there exists still a MDFO, also under the DOF, which is the fund conduit of foreign-assisted projects. On the other hand, the DILG through the Bureau of Local Government and Development (BLGF), also has a Local Fiscal and Resource Development Division. 10.7 The management functions of these three offices needs to be clarified. Each office is supposedly a policy and regulatory body that will assist local government in revenue administration and fund management. The LGUs, however, are now beginning to feel an important gap in harmonizing LFPM especially in their perception of their mandates, thus creating confusion especially among small municipalities. The issue is what mechanisms have been established to coordinate LFPM activities among levels of national governments and how effective are these mechanisms. While the LGUs are well versed in the provisions of the LGC of 1991, the “how-to” aspects of revenue generation and fiscal accountabilities have not been detailed in the assistance provided. In effect, LGUs have created new mechanisms to circumvent complying with rules and regulations on revenue generation and fiscal accountabilities.

10.8 A case in point was the emergence of the IRA intercept in the MDFO as a result of minimum compliance to reporting among LGUs. Another inconsistency was in the promotion of projects on tax systems. For instance, the BLGF assisted LGUs in developing and implementing RPTA projects. At the same time, the National Tax Research Center also promoted a tax system that ensured a fair distribution of the tax burden among the Filipino taxpayers. International donors are also beginning to see the need to improve harmonization. The ADB TA on Local Institutional Strengthening of Budgeting and Planning focuses on the BLGF as the target institution for enhancement.

Weak Coordination Among NGOS to Consolidate and Direct their Assistance to LGUS 10.9 Certain NGOs like the ASF and the JFLFI have expressed that they were not aware of any other organization that support LGUs on financial planning and management. This raises a question of how aware they really are of other organizations performing similar functions that may overlap with theirs. While Table 29 shows a relatively lower percentage of NGOs that expressed the existence of gaps and overlaps, the fact remains that many affairs of the NGOs are not properly coordinated.

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10.10 Results showed that although the NGO respondents had existing operational networks, they still had limited knowledge about their networks’ operations. This leads to a need for some level of coordination among the NGOs to consolidate and direct their efforts in development. Experiences have shown that NGOs tended to participate through their networks, allowing them to engage in a full range of simultaneous functions. NGO networks are of two basic types: (a) associations (having formal relationships), and (b) coalitions built around common issues or agenda. Although networks are set up for different concerns, activities tend to be similar – mutual support, resources and expertise sharing, joint advocacy, lobbying and negotiations, and information sharing. With the respondents’ conflicting answers and limited knowledge on the operations of similar organizations, the organizations may not really know about the gaps and overlaps as well as the assistance that they provide. Hence, thee may be instances when they cannot or do not act upon certain problems or issues.

Table 29. Gaps And Overlaps In LFPM Assistance

HEIs & NGOs (N=33)

NGAs (N=20)

LGUs (N=52) RESPONSE

No. % No. % No. % Yes 9 27.27 2 10.00 20 38.46 No 24 72.73 18 90.00 31 59.62 NAP/No response 0 0.00 0 0.00 1 1.92 Total 33 100.00 20 100.00 52 100.00

Loose Internal LGU Financial Management 10.11 There was apparent looseness in the internal management of the LGUs’ financial resources. First, there was an apparent gap in the coordination of local financial management. In a corporate structure, there is a Controller or a Chief Finance Officer who integrates and coordinates functional departments doing financial tasks. In LGUs, the three members of the local finance committee together with the local accountant comprised the local finance departments. Each has separate functions but nobody coordinates and integrates the many activities and information for efficient and effective management. The local administrator who is expected to oversee all the departments is tied up with other functions, thus local financial management is usually left to the head of each separate local finance department. Indeed, the span of control of the local chief executive and local administrator is so wide that other functions have to be sacrificed. 10.12 Second, the mandate for LGUs to create an internal audit department separate from accounting is problematic because of the conflict with the LGC’s provisions that internal audit is a function of the local accountant. Internal auditing is gaining more and more recognition as an important tool for improving organizational performance. In many countries, both public and private sectors advance internal audit as a profession, process, and body of knowledge. The Philippines is one such country having put in place the policy framework mainstreaming internal audit in government operations. However, at the local level, confusion has emerged among the LGUs as a result of conflicting policy pronouncements by the national government (Mendoza and Javier, 2006). The Office of the President issued Memorandum Circular No.

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891 reiterating strict compliance of all government agencies to AO No. 70 and Budget Circular No. 2004-4. However, full compliance to these policies, particularly at the local level, seems a formidable challenge for LGUs since these are inconsistent with the LGC of 1991, which states that the accountant in a LGU “shall take charge of both the accounting and internal audit services of the LGU concerned.” 10.13 Third, there were observed internal-external audit overlaps in local government. The demarcation line that divided the functions of internal auditing from external auditing was unclear. For instance, while COA, being the external auditor, has mandates to audit the revenue cycle in LGUs, it cannot (because of manpower limitations) and does not examine every transaction. On the other hand, the current practice of internal audit in LGUs does not cover revenue audit. As a result, a large number of revenue-generating and collecting activities remain unchecked especially in field operations (e.g. public market where fees are collected). Thus, the complementary roles of internal and external auditing can actually create overlaps that lead into a situation where certain auditable activities remain unchecked. 10.14 Furthermore, the current practice among LGUs disregards the audit of revenue-generating departments. Examination of accounts focused on the expenditure side. While the local administration is bent on generating revenues, it also has to look into the lost revenue as a result of the lack of mechanisms for audit or examination. Indeed, government money is also lost because of the failure to audit revenue-generating units in the LGUs, particularly the collecting officers. There are a number of instances when money is reported to have been lost even before it reaches the government’s coffer. 10.15 Fourth, the often-neglected aspect of expenditure management is capital expenditure budgeting. LGUs generally incur two types of expenditures: the revenue expenditures and capital expenditures. Revenue expenditures are those that are charged directly as expense against the revenue at the time the expenditure is incurred. Maintenance and operating expenses and personal services are revenue expenditures. On the other hand, capital expenditures are those that provide long-term benefits and therefore should be expensed over a number of periods. It has been the practice of most LGUs to include the details of the revenue expenditures in the annual budget adhering to the concept of transparency and full disclosure. However, capital expenditures are usually presented in lump sum amount and without the benefit of a cost-benefit (or more technically called capital expenditure) analysis. As a result, many capital expenditures do not provide the necessary value in spite of the material amount of investment. Thus, the concept of capital expenditure budgeting should be enhanced in the LGUs as a mandate of the local budget officer. 10.16 Finally, fiscal autonomy in expenditure management especially under the LCE’s discretion of spending for development plans has a wide range of implications to good local governance. Without major sourcing of revenues, the LGUs are encouraged to circumvent the imposition of a cap on the personal services expenditures in the IRA. Contract employment chargeable against operating expenses (Ursal, 2005) is commonplace. In a sense, local expenditures and budget management become politically expedient rather than instruments for creating and distributing wealth. IRA-Related Issues 10.17 While the corporate functioning of local governments through revenue generation is left behind, the IRA is a hotly contested issue in local circles. While the IRA is a LGU share, there is a tendency to

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treat it as revenue itself. Such tendency discourages further generation of additional revenues for the LGU to fulfill its function as a corporate entity as mandated in the LGC. 10.18 The other issue related to IRA is the fiscal risk that the LGU experiences vis-à-vis the tenure of the LCE. Most credit and loans of LGUs are considered long-term local debts usually financed through the IRA. These can create fiscal risks that should be considered as an LFPM growth area of assistance. Again, credit financing to fund operational and developmental interventions creates long-term risks for both the LGU and the national government, as it can be a contingent liability similar to the GOCCs’ heavy borrowing with the national government as guarantor. The slow evolution over the last decade of local financing creates vulnerability of the local government that is very conducive to excessive political maneuverings. Thus, monitoring and inventory of local debts/borrowings movements is deemed a priority. 10.19 It has now become too obvious that the current efforts, assistance, and initiatives are not sufficient to meet the growing demands for revenue sourcing at the LGU level. The IRA’s current formula especially in its allocative efficiency by governance tiers must be re-analyzed. Grey Areas in Local Development Planning 10.20 The study showed that respondent organizations assisted in local development planning. How LGUs conducted local development planning, however, is the question. Local development plans appeared elegant and compliant with the requirements of people participation. However, the respondents revealed that some of the LGUs consulted people only at some point in the planning process—usually when plans were almost complete. Others also observed the total disregard of local officials for popular consultations. What indeed is people participation in the planning process remains a grey area that should be clarified, defined, and operationalized. 10.21 LGUs expressed confusion on the preparation of the Comprehensive Land Use Plan and the Comprehensive Development Plan, hence, their failure to comply with these mandates. As a result, most of those who were able to meet the requirements have sought the assistance of external consultants with the local officials providing only the inputs and the directions. The actual process of planning has not been felt by the people. One grey area that complicates this matter is the large number of plans that should be prepared for the various sectors as mandated by several government agencies. For instance, on matters of comprehensive land use and comprehensive development plan, three agencies are involved: the NEDA, Housing Land and Use Regulatory Board, and the DILG. Since the local development officers prepare numerous sectoral plans that differ in principles, format, and requirements there is a need to simplify and harmonize the local planning framework. The OCOV project of the DILG together with the House of Representatives leads to the right direction.

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11. SUMMARY OF FINDINGS 11.1 The principal findings of this study were as follows: (a) LFPM institutional assistance at the local level was limited; (b) NGAs and IFIs were directly providing all three forms of LFPM assistance while academic institutions, NGOs, and to a certain extent the LGUs, focused on technical assistance; and (c) LFPM assistance provided LCEs with the major responsibility that local government fiscal performance is related with managerial enhancement. Limited LFPM Institutional Assistance at the Local Level 11.2 Assistance to LGUs in LFPM was limited to capacity building and policy support. In terms of areas, the assistance was limited to traditional revenue sourcing and local development planning. The LGU respondents have expressed needs not provided by the current institutional support systems. This was specially manifested in alternative sourcing of revenues, managerial control systems, procurement processes, and local economic enterprises that harness inter-local cooperation other than credit sourcing. Role Differentiation Not Meeting Current Needs 11.3 NGAs and IFIs were directly providing all three forms of LFPM assistance. Academic institutions, NGOs, and to a certain extent the LGUs, were focused on technical assistance (i.e., capacity building). While this may be considered as role differentiation, current LFPM supply did not exactly meet current demands. Capacity building has often focused on training and participatory workshops for LGU officials. With the rapid turnover of elective and appointive officials, however, a vacuum was created as key experienced staff (who have been trained) were replaced/dislodged. There were many staff who needed capacity building in LFPM. Right now, the LGUs are highly dependent on the IRA, donor assistance, and government-sourced credit financing and national grants because these are the most convenient ways of accessing funds for development or operational purposes. Academic institutions and NGOs can redirect their focus on these capacity building needs of LGUs. There is a compelling need to evolve organizational competencies as well as individual competencies for LFPM at this point to ensure effective LGU functioning. Fiscal Performance and Managerial Enhancement 11.4 LFPM assistance provided LCEs with the major responsibility that local government fiscal performance is related with managerial enhancement. The LFPM assistance of various institutions to LGUs has provided wider responsibilities for local executives. In general, LFPM assistance has improved understanding of transparency and accountability and organizational efficiency. However, it has not increased local public investments. This situation highlights the need for a hand-in-hand development/evolution of both political and corporate functioning of LCEs as a mandate of the LGC of 1991.

11.5 Figure 3 summarizes the LFPM assistance in Philippine local governments.

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A. Financial Assistance International Institutions Direct financing Lending Credit Capacity building NGAs Regulation Fund conduit Project Management

B. Technical Assistance Academic Institutions Capacity building Deployment of experts NGOs Capacity building Mobilization LGUs Inter-LGU cooperation Contributions/Donations C. Policy Assistance NGAs Regulation Policy environment NGOs Capacity building

Figure 3. LFPM Assistance Map

LGUs

NGOs Acad

NGAs

International Institutions

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11.6 Lessons for the Future. The study came up with the following lessons for the future: (1) matching of assistance with current demands; (2) harmonization of functions among government institutions; (3) enhancing the functioning of networks; and (4) strengthening the internal financial management of LGUs. Matching of Assistance with Current Demands 11.7 On the issue of concentration of support on certain areas of LFPM, it is necessary to disperse the effort in other innovative assistance and to demand-driven areas in order to broaden the financial performance impacts. Assistance in revenue generation as an LGU priority and enhancement of individual competencies of the local finance committee is wanting.

11.8 On the issue of capability building focus versus the needs of local officials, there is a need to make an inventory of NGO-led / academe-led capacity building programs and to customize these based on the competencies needed by LGUs. First, competency standards should be developed initially for officials and employees belonging to the Local Finance Committee. Clearly, there is a need to ascertain the standards of LFPM competencies, including modalities of content delivery, among the local finance committees. Many of the local finance committee members have acquired their competencies either through on-the-job experience, trainings, and various career development programs and paths. Developing a competency-based education, training, assessment and accreditation (CBETA) similar to the Career Executive Service Official (CESO) model of the Civil Service Commission is a step in the right direction. Together with representatives of professional organizations binding the local finance committee like the Philippine Institute of Certified Public Accountants (PICPA) and the Association of Government Internal Auditors (AGIA) for accountants, the Philippine Association for Government Budget Administrators (PAGBA) for budget officers, the Philippine Association of Local Assessors and Treasurers for local treasurers, and the League of Planning and Development Coordinators of the Philippines for planning and development coordinators, these stakeholders plus local finance experts, representatives from the academe, the CSC and EPRA can be assembled to develop a system of LFPM competencies and government accreditation. Further, the local finance committee by the nature of their jobs can not be away for long periods of time for continuing education and training. Considering the geographical distances among potential trainees and the huge amount required for training, there is a need for alternative learning modalities. 11.9 A possible course of action in this area is ascertaining the standards of LFPM competencies among the local finance committees. So far, none of the institutions in the Philippines have done this. This can be a future research agenda or theme. These standards should be the basis of conducting future trainings and seminars. Thus, the trend should be to use the “Competency-Based Education and Training” in LFPM, not the traditional type of training modalities. 11.10 Programs of academic institutions offering degree programs in local governance must be assessed. The interest of an increasing number of academic institutions in local governance as a degree program reveals the need to put in place the necessary oversight on the part of the national government. Thus, an ad-hoc consultative inter-agency body to look into the quality of program offerings including the issue of responsiveness to market needs and adherence to the principles of good governance may be created and recommended to the Commission on Higher Education (CHED). Towards this end, a more comprehensive framework shown below is proposed.

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Figure 4. Competency-Based Education Framework for Oversight Function in Academic

Institutions

11.11 To resolve the issue of concentration of support for larger LGUs, the provision of support should be refocused where there is a greater need—in the municipalities. The LFPM component of local economic development and investments management and other revenue generation mechanisms are the currently expressed needs of LGUs. However, majority of the institutions evidently built their assistance on broad traditional scopes of revenue generation leaving out the innovative options. LFPM assistance should be intensified specially in poor municipalities.

11.12 As for sector-specific interventions, a very desirable strategy is to design an LFPM enhancement program that will harness a broad range of multi-stakeholders and institutions to build a consolidated LFPM capacity for local finance managers. Such a strategy will build or develop a program for long-term capacitation of LGUs in LFPM. Once a competency standard for LFPM has been established, design of an EPRA-initiated common pool/basket of resources for an integrated LFPM capacity building and delivery initiatives can be pursued. The programs of the BLGF, BLGD, MDFO, and other GFIs can also be integrated for a standard LFPM capacity building program for the local finance committee. The most important lesson learned is that LFPM should be a direct assistance intervention rather than the consequence of other sector-specific development interventions.

Harmonization of Functions Among Government Institutions 11.13 Policies can be directed towards a more reform-oriented practice where fiscal performance is felt by majority of the LGU clients and constituencies. Preventive policy measures starting from an inventory of local debts and movements can be developed basically to avoid fiscal risks created by heavy borrowings. Local debts or borrowings to finance operational projects are not sustainable in the long-term. LGUs should be self-reliant with viable revenue generation programs. Local economic enterprise development, while a major development agenda of the LGUs, is still the most pressing and urgent concern even by the LGUs themselves.

CONDUCT STUDY

Identify and

establish competency

standards in local governance education

(including local financial

management)

INTER-AGENCY CONSULTATIVE

BODY

Create a body to look into the

current situation of education in the

area of local governance

PROPOSE FRAMEWORK

AND DEVELOP MODELS

PRESCRIBE RULES AND

MONITORING SYSTEM

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11.14 A review of the delineation of functions between and among the following government offices, BLGF, BLGD, and MDFO is recommended with maximization of resources as the objective of assessment. Likewise, it is recommended that EPRA studies the idea of a common pool/basket of resources in LFPM interventions among the GFIs for allocative efficiencies and scale of interventions. A research team can undertake an assessment and recommend possible options for maximized financial and human resource use. This will ensure harmonization of governmental assistance in LFPM. The effort of IFIs to harmonize capacity building programs for LGUs is a good start. Enhancing the Functioning of Networks 11.15 Networking can increasingly become a primary means and vehicle for NGOs to mainstream their alternative approaches, to scale-up their activities, and to implement varying degrees of mutual accountability and self-regulation. If these are realized and integrated in their operations, then their members’ active involvement and commitment in follow-up actions as well as their complementation rather than duplication of activities, are assured. An LFPM coordinative council or network that can coordinate and consolidate the efforts of NGOs and influence government institutions for maximized resource use and integration of LFPM assistance can be established. The council or network would play an important role in scaling-up initiatives and in information dissemination that would identify gaps and overlaps in the operation of various organizations. One major take-off activity for mobilization is the procurement dialogue. Strengthening the Internal Financial Management of LGUs

11.16 On addressing the gap in local financial management, it is proposed that the Chief Financial Officer in an LGU should be determined first, and then to facilitate the legislative actions or executive issuances necessary for the creation of the position. This is corollary to the corporate functioning of the LGUs as mandated in the LGC. 11.17 There is a need to review/study possible amendments to the LGC of 1991, such as the inclusion of accountants in the local finance committee in addition to the current membership of the local planning and development officer, local budget officer, and local treasurer as provided in Sec. 316 of the LGC. The functions of the accountant include the generation of financial reports which contain abundant information that can be used in planning and decision-making. 11.18 Clarification should also be made on the inconsistencies of Administrative Order (AO) No. 70 issued by the President on April 14, 2003 and Budget Circular No. 2004-4 issued by the DBM on March 22, 2004. Both order all government offices, agencies, GOCCs, state universities and colleges, and LGUs to organize an Internal Audit Service (IAS) in their respective offices vis-à-vis the LGC of 1991 specifically Article IV, Section 474, which states that the accountant “shall take charge of both the accounting and internal audit services of the LGU concerned.” 11.19 The complementation of the internal audit being performed by the local employees and the external audit conducted by the COA state auditors should be clarified. Executive issuances may be made after delineating the scope of functions of each type of audit.

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11.20 A system should be designed to provide capital expenditure budgeting equal importance as operational budgeting. Capital expenditure evaluation techniques should be applied in incurring capital expenditures. 11.21 The concept of responsibility accounting can very well fit in the issue of expenditure management to provide effective controllership among LGUs. Responsibility accounting links authority and control. Local department heads plan for their areas of responsibility and exert control over these plans by making decisions and evaluating results. A responsibility accounting system brings discipline to planning and control tasks. 11.22 The application of responsibility accounting in LGUs should lead to the adoption of an even more useful system of activity-based accounting. An important objective of local government management is to trace as many costs as possible directly to the activities that caused these to be incurred. The activity-based accounting is vital to management’s objective of eliminating non-value added costs. There are costs of activities that can be eliminated without deterioration in the quality of service delivery and LGU performance. 11.23 The current trend is for the more capable LGUs to engage in computerized systems to assess and collect real property and business taxes. Such trend signals the need for the national government to establish some standards or models that can guide LGUs in determining the optimum cost of investment and the desired components of the system. 11.24 The procurement process through the new Government Procurement Reform Act (GPRA), which was approved in 2003, has many processes which cannot be supported by the resources of many low-income LGUs. Foremost among these is the compulsory website posting of bid invitations, and accessing of the government’s electronic procurement portal system. While this may ensure transparency for government agencies like the LGUs, it has direct implications for suppliers. Many small- and medium-scale suppliers of goods and services have expressed apprehension over the system as favoring big corporations that corner most government contracts. Also, the cap on construction by the administration constricts the LGU from further generating employment using local constituents for labor and equipment. While this can be disadvantageous to the LGUs in the short-run, it may provide an opportune time to devise ways for inter-local cooperation in procurement. Inter-local cooperation will not only ensure transparency but also enable LGUs to get their money’s worth from legitimate and accredited suppliers. Further, it will force the LGUs to use their development planning skills for procurement through the annual procurement plan (APP). Recommended is the institutionalization of a procurement dialogue through a national procurement summit to discuss the complexities of the GPRA and to harness inter-local cooperation and simplification of the procurement process. 11.25 Table 30 shows some of the policy action arenas for EPRA.

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Table 30. Some Potential Policy Action Arenas for EPRA

Action Arenas Possible Partners EPRA Action Classification

A. Matching of Assistance with LGU Demands 1. Disperse efforts in other innovative and demand-

driven areas of assistance. 2. Conduct inventory of NGO-led/academe-led

capacity building programs. a. Assess LFPM academic programs; LFPM

should be a direct assistance intervention rather than the consequence of sector-specific interventions.

b. Design and develop a long-term capacity building enhancement program in LFPM.

3. Ascertain standards and competencies in LFPM

among the local finance committees through a competency-based education, training, assessment and accreditation (CBETA).

ASG, UP, DAP, DLSU and selected NGOs PICPA, AGIA, PAGBA, BLGF, BLGD, CHED, EPRA and selected representatives of academic institutions

Standard modular intervention Legislative Study and/or CSC Executive Issuance

B. Harmonization of Functions of Some Government Agencies

1. Review delineation of management functions

among the BLGF, MDFO, and BLGD; initiate a common pool/basket of resources for integrated LFPM initiatives.

BLGF, MDFO, BLGD, DOF, ASG, EPRA and selected NGO and LGU representatives

Creation of Ad-hoc harmonization committee to study GFI functions with DOF as lead agency

C. Coordinative Mechanisms for NGO LFPM Networking

1. Establish an LFPM network among NGOs engaged

in local governance; study establishment of a coordinative council on LFPM among NGOs.

CREMDEC, IPD

Mobilization and establishment of a formal network on LFPM

D. Internal Financial Planning and Management 1. Study the designation of a Chief Financial Officer

in LGUs. 2. Lobby for the inclusion of accountants in the

membership of the local finance committee.

AGIA, COA, PICPA, DBM, ASG

Legislative actions

Publication on LGU Internal Audit Guidelines

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3. Lobby amendments to the LGC of 1991 vis-à-vis A.O. No. 70.

4. Review functions of internal audit against COA

functions. 5. Conduct study and determine usefulness of the

following management control system: capital expenditure budgeting, responsibility accounting, and activity-based costing.

6. Establish standards in the adoption of computerized

systems to serve as guides to local officials. 7. Institutionalize procurement dialogue through a

National LGU Procurement Summit.

Publication on Management Control Systems for LGUs Mobilize GPRA Dialogue

E. IRA-Related Actions 1. Study and propose IRA reformulation measures. 2. Conduct an inventory of local debts/borrowing

movements of the LGUs. 3. Study and propose preventive measures to avoid

fiscal risks vis-à-vis LCE’s tenure.

Selected NGOs and academic institutions and leagues of local governments

Legislative actions

F. Local Development Planning 1. Study, develop, and propose framework to

operationalize real people participation. 2. Study, develop, and propose framework for

harmonized and simplified local development planning.

DILG-RPS Project Management Team and EPRA

Consultations with local development planning stakeholders

72

REFERENCES Amatong, Juanita D. 2005. Local Government Fiscal and Financial Management, Best Practices. Manila,

Philippines: Department of Finance. Asian Development Bank. 1999. Special Evaluation Study of the Role of Non-government Organizations

and Community-based Organizations in an ADB Project. Manila, Philippines: ADB. Capuno, J. Joseph. 2002. Philippine Country Paper in Paul Smoke and Yun-Hwan Kim (Eds).

Intergovernmental Fiscal Transfers in Asia: Current Practice and Challenges for the Future. Manila, Philippines: ADB.

Celestino, Alicia B., Norberto G. Malvar and Romulo R. Zipagan, Sr. 1998. Handbook of Local Fiscal

Administration in the Philippines. Manila, Philippines: Local Government Center, University of the Philippines and German Foundation for International Development.

Commission on Audit. Manual on the New Government Accounting System. Manila, Philippines: COA. Cuaresma, Jocelyn C. and Simeon A. Ilago. 1996. Local Fiscal Administration in the Philippines. Manila,

Philippines: Local Government Center, University of the Philippines and German Foundation for International Development.

Department of Budget and Management. Local Government Budgeting Manual. Manila, Philippines:

DBM. Gavino, Carlos B. 1998. LGU Financing: Present Sources, Availability and Terms. Manila, Philippines:

Coordinating Council of the Philippine Assistance Program, BOT Center. Mendoza, Rufo R. and Aser B. Javier. 2006. State of Compliance and Implementation of National

Internal Audit Mandates by Local Government Units in the Philippines. Manila, Philippines: Association of Internal Government Auditors.

Padilla, Perfecto L. 1998. Increasing the Financial Capacity of Local Governments in Strengthening

Local Government Administration and Accelerating Local Development. Manila, Philippines: Local Government Center, University of the Philippines and The Asia Foundation.

Tan, Roberto, 2004. Global Trends in Financing Sub-National Government and Para-Statal Entities: The

Philippine Experience. Ursal, Sofronio B. 2005. Government Procurement Reform Act: Local Challenges and Opportunities in

Klaus Preschle and Gaudioso C. Sosmeña. Local Government Issues and Policy Challenges. Manila, Philippines: LOGODEF and Konrad Adenauer Stiftung.

Ursal, Sofronio B. 1992. Local Government Taxation. Manila, Philippines: Mary Jo Educational Supply.

APPENDIX TABLE 1. INVENTORY COUNT OF SUPPORT IN LFPM

1 2 3 4 5 6 7 8 9Prog/Proj FinAss EquipFacil Award Policy Network Plan CapBuild Research Total

1 Revenue Generation1 Real property taxation 27 20 11 10 39 33 26 43 21 2302 Business permits and licenses 18 11 8 6 38 29 21 35 16 1823 Build-operate-transfer scheme 4 3 3 2 10 3 3 10 8 464 Municipal bonds 3 1 0 0 6 1 3 5 7 26

Sub-total 52 35 22 18 93 66 53 93 52 484

2 Accounting5 Financial accounting and reporting 18 11 9 4 25 18 20 50 17 1726 Expenditure management 14 10 6 4 24 22 22 48 14 1647 Assistance for the NGAs 8 8 4 6 19 14 15 38 12 124

Sub-total 40 29 19 14 68 54 57 136 43 460

3 8 Budgeting 18 16 7 6 24 19 26 46 13 175

4 9 Internal Auditing 9 6 5 3 21 12 13 32 9 110

5 Local Economic Development10 Project feasibility studies 24 15 6 2 16 20 24 39 13 15911 Local economic enterprise establishment 29 23 9 7 26 26 27 34 19 20012 Project management and financing 25 24 6 5 17 21 30 46 16 19013 Financial packaging 15 13 4 5 14 20 21 30 17 139

Sub-total 93 75 25 19 73 87 102 149 65 688

6 14 Local Development Planning 28 16 6 4 32 33 43 66 32 260

7 15 Procurement Process 16 9 7 4 25 15 24 45 8 153

GRAND TOTAL 256 186 91 68 336 286 318 567 222 2330

APPENDIX TABLE 2. INVENTORY OF SUPPORT (IN PERCENTAGE)

1 2 3 4 5 6 7 8 9Prog/Proj FinAss EquipFacil Award Policy Network Plan CapBuild Research Total

1 Revenue Generation1 Real property taxation 21.95 16.26 8.94 8.13 31.71 26.83 21.14 34.96 17.07 20.782 Business permits and licenses 14.63 8.94 6.50 4.88 30.89 23.58 17.07 28.46 13.01 16.443 Build-operate-transfer scheme 3.25 2.44 2.44 1.63 8.13 2.44 2.44 8.13 6.50 4.164 Municipal bonds 2.44 0.81 0.00 0.00 4.88 0.81 2.44 4.07 5.69 2.35

Sub-total 10.57 7.11 4.47 3.66 18.90 13.41 10.77 18.90 10.57 10.93

2 Accounting5 Financial accounting and reporting 14.63 8.94 7.32 3.25 20.33 14.63 16.26 40.65 13.82 15.546 Expenditure management 11.38 8.13 4.88 3.25 19.51 17.89 17.89 39.02 11.38 14.817 Assistance for the NGAs 6.50 6.50 3.25 4.88 15.45 11.38 12.20 30.89 9.76 11.20

Sub-total 10.84 7.86 5.15 3.79 18.43 14.63 15.45 36.86 11.65 13.85

3 8 Budgeting 14.63 13.01 5.69 4.88 19.51 15.45 21.14 37.40 10.57 15.81

4 9 Internal Auditing 7.32 4.88 4.07 2.44 17.07 9.76 10.57 26.02 7.32 9.94

5 Local Economic Development10 Project feasibility studies 19.51 12.20 4.88 1.63 13.01 16.26 19.51 31.71 10.57 14.3611 Local economic enterprise establishment 23.58 18.70 7.32 5.69 21.14 21.14 21.95 27.64 15.45 18.0712 Project management and financing 20.33 19.51 4.88 4.07 13.82 17.07 24.39 37.40 13.01 17.1613 Financial packaging 12.20 10.57 3.25 4.07 11.38 16.26 17.07 24.39 13.82 12.56

Sub-total 18.90 15.24 5.08 3.86 14.84 17.68 20.73 30.28 13.21 15.54

6 14 Local Development Planning 22.76 13.01 4.88 3.25 26.02 26.83 34.96 53.66 26.02 23.49

7 15 Procurement Process 13.01 7.32 5.69 3.25 20.33 12.20 19.51 36.59 6.50 13.82

Grand Total 13.88 10.08 4.93 3.69 18.21 15.50 17.24 30.73 12.03 14.03

Legend: 0-19.99 Not at all

20-39.99 Small Extent40-59.99 Moderate Extent60-79.99 Large Extent80-100 Great Deal

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APPENDIX ALIST OF RESPONDENTS

INTERNATIONAL FINANCIAL INSTITUTIONSInstitutions Address Respondent Position

1 German Development Cooperation PDCP Bank Center, Rufino St., Makati City Mayro Heowiz Program Manager2 Local Government Support Program-Phil/Canada 1508 Jollibee Plaza, Ortigas Center, Pasig City Evelyn C. Jiz National Program Coordinator3 Philippine Development Assistance Programme Brgy. Laging Handa, Quezon City Jerry E. Pacturan Executive Director4 Philippine-Australian Community Assistance Program Prestige Tower, Ortigas Center, Pasig City Rodolfo Cesar R. Villanuev Area Manager5 SEARCA College, Laguna Dr. Arsenio M. Balisacan Director

NONGOVERNMENT ORGANIZATIONSOrganizations Address Respondent Position

1 Andres Soriano Foundation Asai Hangar Andrew Ave., Pasay City Mario S. Ocampo Asst. Operations Manager2 Association of Government Internal Auditors New Manila, Quezon City Salvador Las Secretariat Assistant3 Ateneo Social Science Research Center4 Cebu City Resource Mgt & Dev't Center Sister Cities Drive, Cebu City Belinda K. Navascues Executive Director5 Center for Community Transformation Ruth S. Callanta President6 Free LAVA, Inc. San Juan Luna cor. Zamora Sts., Cebu City Antonio C. Auditor Executive Director7 Institute for Environmental Conservation & Research8 Jaime V. Ongpin Foundation, Inc. Sofia de Veyra St., Quezon Hill, Baguio City Ma. Rosario R. Lopez Executive Director9 Julio & Florentina Ledesma Foundation, Inc. Cebu Ave., San Carlos City, Negros Occidental Dr. Billy T. Tusalem Executive Director

10 KALAHI-CIDSS: KKB 4th Floor, DSWD, IBP Road, Quezon City Camilo G. Gudmalin National Project Manager11 Kalimudan Foundation, Inc. Biaba Damag, Marawi City Amenodin T. Cali Executive Director12 Mindanao Rural Development Project St. Anthony Village, Mamay Road, Lanang, Davao City Consolacion G. Gasacao Program Accountant13 Misamis University Community Extension Prog. H. T. Feliciano St., Ozamis City Grace V. Villanueva Director14 National Confederation of Cooperatives 227 J. P. Rizal St., Project 4, Quezon City Emelina M. Santos Manager15 PhilDHRRA 59 C. Salvador St., Loyola Heights, Quezon City Jesus Vicente C. Garganer National Coordinator16 Philippine Business for Social Progress Real cor. Magallanes St., Intramuros, Manila Ma. Nilda U. Loresto Program Officer17 Small Economic Enterprises Development, Inc. J.M. Escriva Drive, Ortigas Center, Pasig City Anita L. Ambrosio General Manager18 Tanggol Kalikasan CRM Building III, 106 Kamias, Quezo City Asis G. Perez Executive Director19 UP Population Institute 3rd Floor, Palma Hall, UP Diliman, Quezon City Normita T. Galban University Researcher20 WWW-Philippines 65 Mindanao Ave., Quezon City Edgardo E. Tongson VP for Programmes

ACADEMIC INSTITUTIONSInstitutions Address Respondent Position

1 Ateneo Center for Community Services Ateneo de Manila University, Loyola Heights, Quezon City Norlie H. Quesada Associate Director2 Bukidnon State College Malaybalay City, Bukidnon Mercedes Gloria D. Ramos Program Director3 Camarines Norte State College Pasig, Daet, Camarines Norte Rusty G. Abanto Planning Director4 Cebu Normal University Zosima A. Panarez Director for Research & Dev't.5 Center for Local Governance Ateneo de Naga University, Naga City Malu C. Barillano Director6 Development Academy of the Philippines Ortigas Center, Pasig City Julie D. Paran Director7 Holy Name University Tagbilaran City, Bohol Josefina T. Cemine Research Associate

8 Institute of Development Mgt. & Governance UP Los Banos, College, Laguna Dr. Aser B. Javier Director9 La Salle Institute of Governance Estrada St., Malate, Manila Dr. Francisco Magno Executive Director

10 Mindanao Center for Local Governance, Inc. Mindanao State University, Marawi City Nabihah Noni Lao President11 Southern Baptist College Alvin Lynn P. Bergante Executive Vice President12 Southern Christian College Midsayap, Cotabato Dr. Romulo M. Garcesa VP for Finance13 Southern Luzon Polytechnic College Lucban, Quezon Milo O. Placino Vice President14 University of Northern Philippines Vigan City, Ilocos Sur Norma A. Esguerra Director for Planning15 University of San Agustin Gen. Luna St., Iloilo City Jigger S. Latoza Director16 University of the Philippines Open University Los Banos, Laguna Dr. Melinda F. Lumanta Vice-Chancellor17 West Visayas State University Luna St., La Paz, Iloilo City Lourdes C. Aranador President

NATIONAL GOVERNMENT AGENCIES/GOVERNMENT OWNED AND CONTROLLED CORPORATIONSAgencies Address Respondent Position

1 Bureau of Local Government Development DILG Central Office, EDSA, Diliman, Quezon City Manuel Q. Gotis Director IV2 Bureau of Local Government Finance BSP Complex, Roxas Blvd., Manila Norberto G. Malvar OIC-Deputy Executive Director3 Commission on Audit-Caloocan City A. Mabini St., Caloocan City Renato B. Salvador Supervising Auditor4 Commission on Audit-City of Manila City of Manila Chito R. Ramirez Supervising Auditor5 Commission on Audit-Las Pinas City Pamplona III, Las Pinas City Marilou L. Carag Supervising Auditor6 Commission on Audit-Makati City Makati City Gabriel J. Espina Supervising Auditor7 Commission on Audit-Malabon City San Agustin, Malabon City Atenie F. Padilla Supervising Auditor8 Commission on Audit-Mandaluyong City Mandaluyong City Lucila B. Africa State Auditor V9 Commission on Audit-Marikina City Barangay Sta. Elena, Marikina City Nestor F. De la Rosa City Auditor

10 Commission on Audit-Muntinlupa City National Road, Muntinlupa City Maxima A. Aquino Supervising Auditor11 Commission on Audit-Paranaque City Paranaque City Rosa A. De la Cruz State Auditor V12 Commission on Audit-Pateros Municipal Audit Office, Pateros, Metro Manila Delia R. Asi State Auditor IV13 Commission on Audit-Quezon City Commonwealth Ave., Quezon City Eduardo F. Hayog State Auditor V14 Department of Budget and Manager Gen. Solano St., San Miguel, Manila Carmencita N. Delantar Director IV15 Development Bank of the Philippines Sen. Gil J. Puyat Ave., Makati City Anita C. Salayon Asst. Vice President16 DILG-Mindanao Basic Urban Services Sector Project DILG Central Office, EDSA, Diliman, Quezon City Rolyn Zambales OIC-Assistant Director17 Land Bank of the Philippines M. H. del Pilar cor. Dr. Quintos Drive, Malate, Manila Melinda C. Cruz Asst. Department Manager18 Land Bank of the Philippines-Field Office19 Local Government Academy Agustin I Bldg., Emerald Ave., Ortigas Center, Pasig City20 National Economic and Development Authority Jose Maria Escriva Drive, Ortigas Center, Pasig City Susan Rachel G. Jose Director III21 Philippine Institute for Development Studies Makati City Mari-Len R. Macasaquit Supervising Research Specialist

CITIES

1 Angeles Irish C. Calaguas Executive Assistant IV2 Bayawan (Oriental Negros) Jenilyn B. Norico3 Cabancalan (Negros Occidental) Jesse A. Tanmoya City Planning and Development Coordinator4 Calamba (Laguna)5 Calbayog (Samar) Hon. Mel Senen S. Sarmiento City Mayor6 Dagupan Romeo C. Rosario City Planning and Development Coordinator7 Dipolog Romeo C. Reyes City Administrator8 Dumaguete Josephine M. Antonio City Planning and Development Coordinator9 Iligan Gil R. Balondo City Planning and Development Coordinator

10 Isabela (Basilan) Edgardo C. Halasan City Planning and Development Coordinator11 Island Garden City of Samal Hon. Rogelio P. Antalan City Mayor12 Ligao Hon. Linda P. Gonzales City Mayor13 Lucena Leonora D. Papa Special Asst. for Social and Dev't Services14 Makati Merlina G. Panganiban City Urban Development Officer15 Masbate Rowena R. Tuason City Planning and Development Coordinator16 Muntinlupa Allan A. Cachuela City Planning and Development Coordinator17 Pasay Corazon A. Ramos Asst. Supervising Auditor18 Passi Milrose D. Lusaya Management and Audit Analyst III19 Puerto Princesa George G. Vasquez Asst. City Planning and Development Coordinator20 San Carlos City (Pangasinan) Elma D. Garcia Asst. City Planning and Development Coordinator21 San Fernando (La Union) Rudy P. Ducusin City Planning and Development Coordinator22 San Fernando (Pampanga) Sonia P. Soto City Administrator23 San Jose del Monte (Bulacan) Ana D. Sucgang City Budget Officer24 San Pablo (Laguna)25 Santiago (Isabela) Benedict B. Panganiban City Planning and Development Coordinator26 Silay Gregorio G. Legarde City Government Asst. Department Head27 Sipalay (Negros Occidental) Leo S. Agbas City Local Government Dev't Officer28 Tacloban Edgardo E. Macion ICO-City Treasurer29 Tagbilaran Eduardo C. Macalandag City Planning and Development Coordinator30 Tagum Reynaldo G. Cadelina City Planning and Development Coordinator31 Toledo Amador B. Cavan Executive Assistant I32 Trece Martires Alberto Ararao City Planning and Development Coordinator33 Valencia (Bukidnon) Hon. Jose M. Galario, Jr. City Mayor34 Zamboanga Hon. Celso L. Lobregat City Mayor

PROVINCES

1 Abra Ma. Victoria V. Alogoc Provincial Treasurer2 Agusan del Sur Deanna P. Fudalan Provincial Planning and Development Coordinator3 Aklan Rex Victor B. Consemino Provincial Government Asst. Department Head4 Albay Macario M. Pavia Provincial Planning and Development Coordinator5 Batangas Romulo A. Atienza Provincial Planning and Development Coordinator6 Bulacan Arlene G. Pascual Provincial Planning and Development Coordinator7 Capiz Antonio T. Arbis/Antonio V. Asis Provincial Budget Officer/OIC-PPDC8 Davao del Sur Abel A. Guinares Provincial Treasurer9 Kalinga Norma Frances U. Damina Provincial Planning and Development Coordinator

10 La Union Mauro A. Libatique, Jr. Provincial Planning and Development Coordinator11 Misamis Oriental Hon. Oscar S. Moreno Governor12 Mountain Province Lily Rose T. Kollin Provincial Planning and Development Coordinator13 Sarangani Fredo P. Bagino Provincial Administrator14 Sultan Kudarat Romeo B. Zaragoza Provincial Planning and Development Coordinator

MUNICIPALITIES

1 Bacarra, Ilocos Norte Clemente S. Galiza Executive Secretary2 Bangued, Abra Isabelo B. Belisario Municipal Treasurer3 Concepcion, Tarlac Hon. Noel L. Villanueva Municipal Mayor4 La Trinidad, Benguet Nympha N. Lacson Municipal Accountant5 Larena, Siquijor Rito B. Abapo Municipal Planning and Development Coordinator6 Loon, Bohol Rogelio P. Ganados Municipal Planning and Development Coordinator7 Manolo Fortich, Bukidnon Hon. Socorro O. Acosta Municipal Mayor8 Naawan, Misamis Oriental Salvador Almune Municipal Planning and Development Coordinator9 Pila, Laguna Jose P. Matienzo, Jr. Municipal Planning and Development Coordinator

10 San Miguel, Zamboanga del Sur Panfilo Sebilo Jr. Municipal Planning and Development Coordinator11 Sibulan, Negros Oriental Cornelia C. Lozaga Municipal Budget Officer12 Tudela, Cebu Emer O. Labauo Municipal Planning and Development Coordinator

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APPENDIX BLIST OF RESPONDENTS

INTERNATIONAL FINANCIAL INSTITUTIONSInstitutions Address Respondent Position

1 German Development Cooperation PDCP Bank Center, Rufino St., Makati City Mayro Heowiz Program Manager2 Local Government Support Program-Phil/Canada 1508 Jollibee Plaza, Ortigas Center, Pasig City Evelyn C. Jiz National Program Coordinator3 Philippine Development Assistance Programme Brgy. Laging Handa, Quezon City Jerry E. Pacturan Executive Director4 Philippine-Australian Community Assistance Program Prestige Tower, Ortigas Center, Pasig City Rodolfo Cesar R. Villanuev Area Manager5 SEARCA College, Laguna Dr. Arsenio M. Balisacan Director

NONGOVERNMENT ORGANIZATIONSOrganizations Address Respondent Position

1 Andres Soriano Foundation Asai Hangar Andrew Ave., Pasay City Mario S. Ocampo Asst. Operations Manager2 Association of Government Internal Auditors New Manila, Quezon City Salvador Las Secretariat Assistant3 Ateneo Social Science Research Center4 Cebu City Resource Mgt & Dev't Center Sister Cities Drive, Cebu City Belinda K. Navascues Executive Director5 Center for Community Transformation Ruth S. Callanta President6 Free LAVA, Inc. San Juan Luna cor. Zamora Sts., Cebu City Antonio C. Auditor Executive Director7 Institute for Environmental Conservation & Research8 Jaime V. Ongpin Foundation, Inc. Sofia de Veyra St., Quezon Hill, Baguio City Ma. Rosario R. Lopez Executive Director9 Julio & Florentina Ledesma Foundation, Inc. Cebu Ave., San Carlos City, Negros Occidental Dr. Billy T. Tusalem Executive Director

10 KALAHI-CIDSS: KKB 4th Floor, DSWD, IBP Road, Quezon City Camilo G. Gudmalin National Project Manager11 Kalimudan Foundation, Inc. Biaba Damag, Marawi City Amenodin T. Cali Executive Director12 Mindanao Rural Development Project St. Anthony Village, Mamay Road, Lanang, Davao City Consolacion G. Gasacao Program Accountant13 Misamis University Community Extension Prog. H. T. Feliciano St., Ozamis City Grace V. Villanueva Director14 National Confederation of Cooperatives 227 J. P. Rizal St., Project 4, Quezon City Emelina M. Santos Manager15 PhilDHRRA 59 C. Salvador St., Loyola Heights, Quezon City Jesus Vicente C. Garganer National Coordinator16 Philippine Business for Social Progress Real cor. Magallanes St., Intramuros, Manila Ma. Nilda U. Loresto Program Officer17 Small Economic Enterprises Development, Inc. J.M. Escriva Drive, Ortigas Center, Pasig City Anita L. Ambrosio General Manager18 Tanggol Kalikasan CRM Building III, 106 Kamias, Quezo City Asis G. Perez Executive Director19 UP Population Institute 3rd Floor, Palma Hall, UP Diliman, Quezon City Normita T. Galban University Researcher20 WWW-Philippines 65 Mindanao Ave., Quezon City Edgardo E. Tongson VP for Programmes

ACADEMIC INSTITUTIONSInstitutions Address Respondent Position

1 Ateneo Center for Community Services Ateneo de Manila University, Loyola Heights, Quezon City Norlie H. Quesada Associate Director2 Bukidnon State College Malaybalay City, Bukidnon Mercedes Gloria D. Ramos Program Director3 Camarines Norte State College Pasig, Daet, Camarines Norte Rusty G. Abanto Planning Director4 Cebu Normal University Zosima A. Panarez Director for Research & Dev't.5 Center for Local Governance Ateneo de Naga University, Naga City Malu C. Barillano Director6 Development Academy of the Philippines Ortigas Center, Pasig City Julie D. Paran Director7 Holy Name University Tagbilaran City, Bohol Josefina T. Cemine Research Associate

8 Institute of Development Mgt. & Governance UP Los Banos, College, Laguna Dr. Aser B. Javier Director9 La Salle Institute of Governance Estrada St., Malate, Manila Dr. Francisco Magno Executive Director

10 Mindanao Center for Local Governance, Inc. Mindanao State University, Marawi City Nabihah Noni Lao President11 Southern Baptist College Alvin Lynn P. Bergante Executive Vice President12 Southern Christian College Midsayap, Cotabato Dr. Romulo M. Garcesa VP for Finance13 Southern Luzon Polytechnic College Lucban, Quezon Milo O. Placino Vice President14 University of Northern Philippines Vigan City, Ilocos Sur Norma A. Esguerra Director for Planning15 University of San Agustin Gen. Luna St., Iloilo City Jigger S. Latoza Director16 University of the Philippines Open University Los Banos, Laguna Dr. Melinda F. Lumanta Vice-Chancellor17 West Visayas State University Luna St., La Paz, Iloilo City Lourdes C. Aranador President

NATIONAL GOVERNMENT AGENCIES/GOVERNMENT OWNED AND CONTROLLED CORPORATIONSAgencies Address Respondent Position

1 Bureau of Local Government Development DILG Central Office, EDSA, Diliman, Quezon City Manuel Q. Gotis Director IV2 Bureau of Local Government Finance BSP Complex, Roxas Blvd., Manila Norberto G. Malvar OIC-Deputy Executive Director3 Commission on Audit-Caloocan City A. Mabini St., Caloocan City Renato B. Salvador Supervising Auditor4 Commission on Audit-City of Manila City of Manila Chito R. Ramirez Supervising Auditor5 Commission on Audit-Las Pinas City Pamplona III, Las Pinas City Marilou L. Carag Supervising Auditor6 Commission on Audit-Makati City Makati City Gabriel J. Espina Supervising Auditor7 Commission on Audit-Malabon City San Agustin, Malabon City Atenie F. Padilla Supervising Auditor8 Commission on Audit-Mandaluyong City Mandaluyong City Lucila B. Africa State Auditor V9 Commission on Audit-Marikina City Barangay Sta. Elena, Marikina City Nestor F. De la Rosa City Auditor

10 Commission on Audit-Muntinlupa City National Road, Muntinlupa City Maxima A. Aquino Supervising Auditor11 Commission on Audit-Paranaque City Paranaque City Rosa A. De la Cruz State Auditor V12 Commission on Audit-Pateros Municipal Audit Office, Pateros, Metro Manila Delia R. Asi State Auditor IV13 Commission on Audit-Quezon City Commonwealth Ave., Quezon City Eduardo F. Hayog State Auditor V14 Department of Budget and Manager Gen. Solano St., San Miguel, Manila Carmencita N. Delantar Director IV15 Development Bank of the Philippines Sen. Gil J. Puyat Ave., Makati City Anita C. Salayon Asst. Vice President16 DILG-Mindanao Basic Urban Services Sector Project DILG Central Office, EDSA, Diliman, Quezon City Rolyn Zambales OIC-Assistant Director17 Land Bank of the Philippines M. H. del Pilar cor. Dr. Quintos Drive, Malate, Manila Melinda C. Cruz Asst. Department Manager18 Land Bank of the Philippines-Field Office19 Local Government Academy Agustin I Bldg., Emerald Ave., Ortigas Center, Pasig City20 National Economic and Development Authority Jose Maria Escriva Drive, Ortigas Center, Pasig City Susan Rachel G. Jose Director III21 Philippine Institute for Development Studies Makati City Mari-Len R. Macasaquit Supervising Research Specialist

CITIES

1 Angeles Irish C. Calaguas Executive Assistant IV2 Bayawan (Oriental Negros) Jenilyn B. Norico3 Cabancalan (Negros Occidental) Jesse A. Tanmoya City Planning and Development Coordinator4 Calamba (Laguna)5 Calbayog (Samar) Hon. Mel Senen S. Sarmiento City Mayor6 Dagupan Romeo C. Rosario City Planning and Development Coordinator7 Dipolog Romeo C. Reyes City Administrator8 Dumaguete Josephine M. Antonio City Planning and Development Coordinator9 Iligan Gil R. Balondo City Planning and Development Coordinator

10 Isabela (Basilan) Edgardo C. Halasan City Planning and Development Coordinator11 Island Garden City of Samal Hon. Rogelio P. Antalan City Mayor12 Ligao Hon. Linda P. Gonzales City Mayor13 Lucena Leonora D. Papa Special Asst. for Social and Dev't Services14 Makati Merlina G. Panganiban City Urban Development Officer15 Masbate Rowena R. Tuason City Planning and Development Coordinator16 Muntinlupa Allan A. Cachuela City Planning and Development Coordinator17 Pasay Corazon A. Ramos Asst. Supervising Auditor18 Passi Milrose D. Lusaya Management and Audit Analyst III19 Puerto Princesa George G. Vasquez Asst. City Planning and Development Coordinator20 San Carlos City (Pangasinan) Elma D. Garcia Asst. City Planning and Development Coordinator21 San Fernando (La Union) Rudy P. Ducusin City Planning and Development Coordinator22 San Fernando (Pampanga) Sonia P. Soto City Administrator23 San Jose del Monte (Bulacan) Ana D. Sucgang City Budget Officer24 San Pablo (Laguna)25 Santiago (Isabela) Benedict B. Panganiban City Planning and Development Coordinator26 Silay Gregorio G. Legarde City Government Asst. Department Head27 Sipalay (Negros Occidental) Leo S. Agbas City Local Government Dev't Officer28 Tacloban Edgardo E. Macion ICO-City Treasurer29 Tagbilaran Eduardo C. Macalandag City Planning and Development Coordinator30 Tagum Reynaldo G. Cadelina City Planning and Development Coordinator31 Toledo Amador B. Cavan Executive Assistant I32 Trece Martires Alberto Ararao City Planning and Development Coordinator33 Valencia (Bukidnon) Hon. Jose M. Galario, Jr. City Mayor

34 Zamboanga Hon. Celso L. Lobregat City Mayor

PROVINCES

1 Abra Ma. Victoria V. Alogoc Provincial Treasurer2 Agusan del Sur Deanna P. Fudalan Provincial Planning and Development Coordinator3 Aklan Rex Victor B. Consemino Provincial Government Asst. Department Head4 Albay Macario M. Pavia Provincial Planning and Development Coordinator5 Batangas Romulo A. Atienza Provincial Planning and Development Coordinator6 Bulacan Arlene G. Pascual Provincial Planning and Development Coordinator7 Capiz Antonio T. Arbis/Antonio V. Asis Provincial Budget Officer/OIC-PPDC8 Davao del Sur Abel A. Guinares Provincial Treasurer9 Kalinga Norma Frances U. Damina Provincial Planning and Development Coordinator

10 La Union Mauro A. Libatique, Jr. Provincial Planning and Development Coordinator11 Misamis Oriental Hon. Oscar S. Moreno Governor12 Mountain Province Lily Rose T. Kollin Provincial Planning and Development Coordinator13 Sarangani Fredo P. Bagino Provincial Administrator14 Sultan Kudarat Romeo B. Zaragoza Provincial Planning and Development Coordinator

MUNICIPALITIES

1 Bacarra, Ilocos Norte Clemente S. Galiza Executive Secretary2 Bangued, Abra Isabelo B. Belisario Municipal Treasurer3 Concepcion, Tarlac Hon. Noel L. Villanueva Municipal Mayor4 La Trinidad, Benguet Nympha N. Lacson Municipal Accountant5 Larena, Siquijor Rito B. Abapo Municipal Planning and Development Coordinator6 Loon, Bohol Rogelio P. Ganados Municipal Planning and Development Coordinator7 Manolo Fortich, Bukidnon Hon. Socorro O. Acosta Municipal Mayor8 Naawan, Misamis Oriental Salvador Almune Municipal Planning and Development Coordinator9 Pila, Laguna Jose P. Matienzo, Jr. Municipal Planning and Development Coordinator

10 San Miguel, Zamboanga del Sur Panfilo Sebilo Jr. Municipal Planning and Development Coordinator11 Sibulan, Negros Oriental Cornelia C. Lozaga Municipal Budget Officer12 Tudela, Cebu Emer O. Labauo Municipal Planning and Development Coordinator

85

APPENDIX C

INSTITUTIONAL MAPPING AND ANALYSIS OF ORGANIZATIONS’ EFFORTS, INITIATIVES, AND ASSISTANCE TO LOCAL FINANCIAL PLANNING AND MANAGEMENT

FOR KEY INFORMANTS’ USE Please fill the information below before answering the survey questions. Please write legibly in ink.

1. Date of survey (dd/mm/yyyy): ______________________________________________ 2. Name of Respondent’s Organization: _______________________________________

_____________________________________________________________________

3. Address of Respondent’s Organization: ______________________________________ ______________________________________________________________________

4. Respondent’s Name (last, first, middle initial) __________________________________ 5. Respondent’s Job Title: ___________________________________________________ 6. Respondent’s Contact Information:

6.1. Telephone No.:_____________________________________________________ 6.2. Fax No.: __________________________________________________________ 6.3. Mobile/Cell phone No.: _______________________________________________ 6.4. E-mail:____________________________________________________________ 6.5. Others: ___________________________________________________________

7. Interviewer’s Name (last, first, middle initial): __________________________________

86

PART I – DESCRIPTION OF SUPPORT IN THE FIELD OF LFPM

1. Areas of Support. In what areas does your organization provide support to LGUs? Please check the corresponding space and provide some details. In the type or nature of support column, please encircle all choices that apply:

1 2 3 4

Program/project Financial assistance Equipment/facility donation Awards system

5 6

7

Policy support Networking/ linkaging Planning support

8

9 10

Capacity building support/ training/seminars Research studies/surveys Others (please specify)

AREAS OF SUPPORT Please check here

No. of years providing

support in this area

Please describe the type or nature of support in the area*

A Revenue Generation 1. Real property taxation

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 |

10 __________________________

2. Business permits and licenses

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 __________________________

3. Build-operate-transfer scheme

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 __________________________

4. Municipal bonds

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 __________________________

5. Others, please specify_________

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 __________________________

B Accounting 1. Financial accounting and

reporting 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 |

10 __________________________

2. Expenditure management

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 __________________________

3. Assistance for the New Government Accounting System

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 __________________________

4. Others, please specify _________

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 __________________________

C

Budgeting 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 __________________________

D

Internal Auditing 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 __________________________

E Capacity Building in LFPM 1. Training in LFPM

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 |

10 __________________________

2. Study Tours

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 __________________________

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3. Exchanges (sister city, twinning, etc.)

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 __________________________

4. Others, please specify ________

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 __________________________

F Local Economic Development 1. Project feasibility studies

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 |

10 __________________________

2. Establishing local economic enterprises

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 __________________________

3. Project management and financing

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 __________________________

4. Financial packaging

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 __________________________

5. Others, please specify _________

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 __________________________

G Local Development Planning

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 __________________________

H Procurement Process

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 __________________________

I Research and Advocacy

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 __________________________

2. Is the provision of support to LGUs in the field of LFPM within your organizational mandate?

Yes No If yes, please state the mandate: _____________________________________________________ ______________________________________________________________________________________________________________________________________________________________

3. What are the specific activities involved in the provision of support?

Program / project design Program / project management Capacity building needs analysis Training / seminars / workshops Awarding of cash and other incentives Facilitation of LGU activities

Study tours Survey / research studies Participatory workshops Monitoring and evaluation Others pls. specify _________________

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4. How do you tap the LGUs as partner/beneficiary?

Pls. check Please give details Referral of other organizations/ agencies/officials

LGU NGO National Government Agency Private Organization Others, pls. specify

Your own identification process

Directory Search Internet Search In-house database search / mailing list Third party database search / mailing list Selected from previous partners Others, please specify

Your own search through public announcement

Placing newspaper and print ads Placing newsletter announcement Internet posting Sending message to mailing list Placing radio ads Placing television ads Others, pls. specify

LGU own initiative Proposal submission Formal request for assistance Informal request for assistance (during an important

meeting, etc) Others, pls. specify

Extension of other previous partnership

Previous partnership undertakings Membership in same organization / association Others, pls. specify

Others, pls. specify

5. Are there any formal working arrangements with the LGU?

Yes

No

If yes, in what form?

Memorandum of Agreement Memorandum of Understanding Contract

Technical Cooperation Program Financial Cooperation Program Others, please specify _____________

6. What are the terms, conditions or obligations of support to the LGU partner/beneficiary?

On your part On LGU’s part Timely release of funds Conduct of baseline survey (before collaboration /

assistance) Provision of technical assistance / expert services Monitoring and evaluation Impact assessment Compliance to agreed terms of reference Others _____________________________

Must first demonstrate readiness / or must pass readiness assessment

Proposed area of collaboration / program / project must be within the priority areas

Counterpart funds / resources Accept “structural adjustments” packaged with

the assistance Delivery of agreed objectives / expected outputs

of collaboration Should submit technical reports on collaboration Should submit financial reports on collaboration Others____________________________

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7. What is the cost of provision of support to the LGU partner/beneficiary in terms of

Direct cash outlay ______________ Facilities and equipment ______________ Noncash expenses ______________ Others ______________ Total ______________

8. Are there assets generated by the LGU as a result of the partnership/assistance?

Yes No If yes, what are these assets?

Equipment Enhanced LGU service facilities Additional supplies Additional funds Trained human resources

Improved systems / procedures / protocols

Intellectual properties Additional institutional linkages /

networks Others, please specify _____________

9. Were there specific skills and capabilities developed or improved for LGU staff as a result of

the support?

Yes

No

If yes, what are the these skills and capabilities?

Project development Project management Financial analysis Financial planning Managerial finance Budgeting Conduct of surveys / studies / research Feasibility analysis

Income generation capability Monitoring and evaluation Use of ICT equipment Planning skills Policy formulation / development /

analysis skills Others, pls. specify

_______________________________ 10. Has your support/partnership created awareness for large scale local community

participation or support?

Yes No If yes, cite proof, cases or instances to support your claim.

Improved turnout rate at LGU initiated activities Increased LGU revenue collection Survey / impact assessment results Others: _______________________________

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11. What are the specific outputs resulting from your support/partnership?

Trainings / seminars / workshops conducted

Trained LGU staff Study / research / survey results Study sites visited Plans formulated Programs / projects designed

Plans formulated Policies formulated / analyzed / passed Systems / procedures / protocols

established Modern equipment / facilities Others:

____________________________

12. What do you think are the other benefits derived by the LGU from your support/ partnership?

Improvement in quality of LGU projects in other areas aside from financial planning and management Improved transparency / accountability Improved public perception / participation Organizational efficiency / effectiveness Increased private investments Increased visibility to public

13. How many LGUs have you supported?

No. of LGUs supported

Please give details

Provinces Cities Municipalities Barangays

14. Are you satisfied with the quality of your work relationship with the LGU?

Yes No If yes, why?

So far, no serious problems have been encountered Such working relationship is ideal and can deliver what it is supposed to deliver Provides mutual benefit to collaborating parties Relationship is flexible and allows room for necessary adjustments without much trouble Independent of any political agenda Others: ____________________________________________________________________________

___________________________________________________________________________________

If no, why?

Existing working relationship is problematic / gaps are present in various aspects Working relationship cannot always deliver what it is supposed to deliver Only the LGU benefits Relationship is rigid and does not allow adjustments anytime during period of collaboration Relationship is being associated with political agenda of LGU Others: _____________________________________________________________________________

___________________________________________________________________________________

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15. Do you know other organizations that support the LGUs on financial planning and management?

Yes No

If yes, please enumerate. __________________________________________________________ ______________________________________________________________________________________________________________________________________________________________

16. What are the activities of the organizations which you have identified?

program/project development and implementation

financial assistance equipment / facility donation awards system policy support networking / linkaging

planning support capacity building support /training /

seminars/workshop research studies / surveys Others (please specify)

____________________________

17. Is your organization open to the possibility of having partnership or other forms of linkages

with the Ateneo EPRA Project?

Yes No If yes, what do you think is the best type of arrangement between you and Ateneo EPRA Project? __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

18. Are there gaps and overlaps that exist insofar as activities, roles and support to LGU other

than your organization?

Yes No

If yes, what are they? _____________________________________________________________ _____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

19. What are the common areas of confusion experienced in the course of implementing your

support program? _______________________________________________________________________________ ______________________________________________________________________________________________________________________________________________________________

20. Are there other important issues on LFPM support to LGUs that have not been discussed in

this questionnaire? Please enumerate. _______________________________________________________________________________

______________________________________________________________________________________________________________________________________________________________

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PART II - SUPPORT LANDSCAPE

Please answer the following questions in the light of your provision of support to LGUs in the field of Local Financial Planning and Management.

A. Facilitating Factors.

FACILITATING FACTORS

Yes No If No, do you

consider it a problem?

Remarks

A OBJECTIVES OF SUPPORT 1 Does your support of the local

government have clear objectives?

2 Are the objectives of your support known by the local government?

3 Are the objectives of both institutions clear and specific on both sides?

4 Do your objectives define the local stakeholders’ involvement?

5 Are your objectives of support translated to operational plans?

B POLITICAL FEASIBILITY 1 Is there a long-term strategy for local

government support?

2 Is the provision of support a priority of your organizational leadership?

3 Are the plans and programs of support in line with the LGU’s vision and mission?

4 In general, is the community satisfied with the mechanisms used to deliver the support to the LGU?

5 Is there enough room on the part of your leaders to decide the pursuance of support to LGUs?

C STAFF BEHAVIOR 1 Are you staff friendly and approachable to

the LGU client-partners?

2 Are your staff willing to provide as much assistance to the LGU client-partners?

3 Do your staff exhibit expertise on the job? 4 Do your staff provide quick responses to

your LGU client-partners in need?

5 Do your staff allow the LGU client-partners to provide inputs or suggestions to the programs/projects?

6 In general, has rapport been developed between your staff and the LGU client?

D PROGRAM PROCESS 1 Is there a coordinating body that manages

the support program to the LGU?

2 Are there procedures and guidelines to facilitate the implementation of plans and programs with the LGU?

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3 Does the support allow for mechanisms that make use of established local councils or boards?

4 Are there mechanisms for review, evaluation and improvement of plans and programs?

5 Do you achieve your client-partners goals because of efficient programming?

E PARTICIPATORY APPROACH 1 Are your policies on program operations

determined with your LGU client-partners?

2 Are your procedures carefully formulated with maximum inputs from the LGU client-partners?

3 Do you involve the LGU-clients in the identification and prioritization of the focus of support?

4 Do you conduct regular meetings and consultations with the LGU client-partners?

5 Do you involve the LGU client-partners in monitoring of the status of your support?

F FINANCIAL ACCOUNTABILITY 1 Do your management practices result in

getting the best possible value from public funds?

2 Do you require the LGU to formally account for any financial obligations through management contracts, accountability accord or similar managerial agreements?

3 Do you give financial management advice that helps the local government make better decisions?

4 Do you know how well the LGU is doing in terms of financial management responsibilities?

5 Do you have provisions in case of theft, fraud or misuse of funds or property on the part of the LGU?

G FINANCIAL TRANSPARENCY 1 Do you clearly communicate financial

management roles, objectives and policies as they apply to the LGU?

2 Do you generate financial information that is easily combined with operational data for use in managing the LGU?

3 Do you make use of information technology for improving efficiency in managing LGU financial resources?

4 Do you provide updated information on financial status to the LGU client-

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partners? 5 Are there mechanics to track financial

status during the entire duration of your support?

B. Difficulties and Constraints

DIFFICULTIES AND CONSTRAINTS Yes No Comments A FUNDING LIMITATIONS 1 Are your financial resources adequate to

meet your current objectives in the field of LFPM?

2 Are your financial resources immediately available when needed?

3 Are there provisions for future financial requirements in LFPM?

4 Are financial resources allotted for LFPM use for the purpose for which they were intended?

B LINKAGING BARRIERS 1 Are there efforts for linkaging activities

that are initiated by your organization?

2 Are linkages embedded in the long-term plan of your organization?

3 Are linkages with various entities properly undertaken when necessary?

4 Are linkaging activities provided with adequate financial support?

5 Are there barriers that hinder beneficial linkages?

C POLITICAL INTERFERENCE 1 Are your mandates influenced by certain

political affiliation?

2 Do you encounter interference from political figures or personalities?

3 Do you find coordinating with political personalities (politicians) other than the LGU officials contributory to the accomplishment of your objectives?

4 Has the accomplishment of your tasks been affected by political interference?

D POLICY CONFLICT 1 Are there national policies that are in

conflict with your rendition of support in the field of LFPM?

2 Do you encounter conflicts in your organizational policies that affect the performance of your work?

3 Do you have conflicts in operating policies that affect your activities?

4 Are conflicts in policies in general immediately clarified?

E COMPETENCE AVAILABILITY

1 Is there scarcity of knowledge or skills among people in your organization that constrain the management of your support in the area of LFPM?

2 Do you have competency development for the staff in your organization?

3 Do you encounter absence or lack of technical knowledge among LGUs in areas related to your provision of support?

4 Do you have competency development for the staff of your client LGUs in the areas related to the support you provide?

F GEOGRAPHICAL DISPERSION OF LGU BENEFICIARIES 1 Do you have geographic preference in the

selection of client LGUs?

2 Do you consider geographical dispersion among LGU clients as a problem?

3 Is geographical dispersion of LGU clients adversely affecting the delivery of your service?

4 Are your LGU clients encountering problems with their geographic location insofar as your support is concerned?

G INFORMATION DISSEMINATION 1 Is information regarding your support

properly disseminated to the target audience?

2 Are there adequate mechanisms or systems of information dissemination?

3 Are the means of information dissemination effective in bringing about the message?

4 Do you have adequate reach of your target audience for information dissemination?

H INTEREST OF LOCAL GOVERNMENT OFFICIALS 1 Are local government officials genuinely

interested in availing of the support provided by your organization?

2 Is LFPM the primary interest of LGU officials?

3 Did the LGU officials openly signify their interest to avail of the support provided by your organization?

4 Are LGU officials willing to undergo the whole process of availing the support?

Thank you!

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