Decentralization and Local Governance in the Philippines: The 1991 Code, Slides of Political studies

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DECENTRALIZATION

AND LOCAL

GOVERNANCE

1991 Local Government Code of the Philippines: An Overview

• (^) One of the fundamental state policies enshrined in the 1987 Philippine Constitution is

the autonomy of local government units. (Art. II, Sec. 25). In this regard, the

Constitution mandated Congress to “enact a local government code which shall

provide for a more responsive and accountable local government structure

instituted through a system of decentralization with effective mechanisms of recall,

initiative, and referendum, allocate among the different local government units

their powers, responsibilities, and resources, and provide for the qualifications,

election, appointment and removal, term, salaries, powers and functions and duties

of local officials, and all other matters relating to the organization and operation of

the local units.” (Art. X, sec. 1)

• (^) Pursuant to the mandate given by the Constitution, Congress enacted Republic Act

No. 7160, otherwise known as the Local Government Code of 1991. The Code is

divided into four books and covers the following:

The Code replaced Batas Pambansa Blg. 337 , which is the old local government code.

The Local Government Code of 1991 has given impetus not only to the local government itself,

but the rest of the stakeholders in governance. Decentralization as a framework of governance

serves as a tool in building the capacities of both government and non-government actors in

engaging each in managing societal affairs. Decentralization has provided a democratized space

where Local Government Units (LGU’s - Provinces, Cities, Municipalities and Barangays) are able

to transform themselves into self-reliant communities and be more independent in managing

their own affairs.

In the name of democratic governance, national government may guide local governments and

provide policies and technical expertise but they must recognize that in the principle of

subsidiarity, the decentralized entity - the LGU, is the nearest to the people.

LGU’s, in order to work smoothly with the national government, should align their development

plans along with the national government’s policies but focus more on what development needs

are to be met in their community. Thus, the central/national government and the LGUs should

not look at each other as competitors in service delivery but as active partners in governing.

Decentralization Decentralization refers to the transfer of powers from central government to local levels in a political-administrative and territorial hierarchy. This process allows the participation of the people and the local government. Decentralization hands over political, financial and administrative authority from central to local governments, so that the government can facilitate and guarantee better public services for the people. Decentralization strengthens the principle of transparency and accountability. The principle of accountability works best at local level, devolution of power makes government more accountable for the implementation of its tasks.  (^) Decentralization also increases the level of citizen participation in making major decisions and directly affecting the community.

Impact of Political Decentralization:

It empowered Local Leaders to take greater control over their region’s destinies.

Local Leaders, citizens and other stakeholders are given more freedom in determining

their development paths. Political Decentralization delegated some powers from the

central authority to the local authorities, who are much familiar with the cultural,

social and economic aspects of their respective regions. The main objective is for the

provinces, cities and municipalities to use their financial resources more efficiently,

generate additional resources and tap alternative resources.

2. Fiscal Decentralization

The Medium Term Philippine Development Plan 2004-2010 (MTPDP)

• specifies the need to maintain fiscal discipline in government spending. It

outlines several measures to ensure that fiscal strength is achieved. It calls for a

strengthening of the revenue generation effort of the LGUs.

-Law changes are likely be required to give effect to the fiscal devolution, to

authorize the transfer of revenue and to authorize local decision making and revenue

raising.

Indicators of Fiscal Decentralization: A. The dependency of the cooperating LGUs on national funds is reduced by generating additional Funds. B. Improved fiscal systems, especially just taxation for a measurable and transparent improvement of tax revenues; and C. The participating institutions (LGUs, selected government departments) on national, regional and municipal level present coordinated, harmonized and gender-sensitive development plans and budgets are properly implemented. Impact of Fiscal Decentralization: Fiscal Decentralization improved financial management including qualification of participants in areas of financial management, strengthening cooperation on different levels, promoting exchange of experiences, formulating strategies for an improved integration of the business sector and civil society in social and economic programs. A large part of the operations of the fiscal decentralization focused on the optimization of administrative processes and the standardization of the application of the law for local taxes with the help of information technology. Also known as the DE bureaucratization - Involves the harnessing of the private sector and non-governmental organizations in the delivery of services through various modalities including contracting out, private-public partnership and joint ventures. Focus: Training staff members of partner organizations - promoting collaboration among the participating Institutions- monitoring the development of the programs and projects being implemented - clarify roles and responsibilities of government institutions - national and local - enable efficient and effective interaction among government, private sector and civil society

3. Institutional Decentralization

Devolved Basic Services:

On Health and Social Services Include the Implementation of:

1.Programs and projects on primary health care, maternal and child care, and communicable and

non-communicable disease control services;

2.Health services which access to secondary and tertiary health services;

3.Purchase of medicines, medical supplies, and equipment needed to carry out the services;

4.Social welfare services which include programs and projects on child and youth welfare,

family and community welfare, women’s welfare, welfare of the elderly and disabled persons;

On Environmental Management:

1.Solid waste disposal system;

2.Services or facilities related to general hygiene and sanitation;

3.Implementation of community-based forestry projects which include integrated social forestry

programs and similar projects;

4.Management and control of communal forests;

On Agriculture: 1.Inter -Barangay irrigation system; 2.Water and soil resource utilization and conservation projects; 3.Enforcement of fishery laws in municipal waters including the conservation of mangroves; On Infrastructure: 1.Maintenance and Rehabilitation of the following: A. roads and bridges B. school buildings and other facilities for public elementary and secondary schools C. clinics, health centers and other health facility D. small water impounding projects E. fish ports; artesian wells, spring development, rainwater collectors and water supply systems F. seawalls, dikes, drainage and sewerage, and flood control G. traffic signals and road signs and similar facilities.

Powers, Duties, Functions and Compensation (Sec. 447. of LGC of 1991) Organizational Structure and Staffing Pattern Every local government unit shall design and implement its own organizational structure and staffing pattern taking into consideration its service requirements and financial capability, subject to the minimum standards and guidelines prescribed by the Civil Service Commission.

1. The Sanggunian Bayan , as the legislative body of the municipality, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the municipality and its inhabitants pursuant to section 16 of this Code and in the proper exercise of the corporate powers of the municipality as provided for under section 22 of this Code, and shall: (i) Review all ordinances approved by the Sangguniang Barangay and executive orders issued by the Punong Barangay to determine whether these are within the scope of the prescribed powers of the sanggunian and of the Punong Barangay; (ii) Subject to the provisions of this Code and pertinent laws, determine the powers and duties of officials and employees of the municipality; (iii) Determine the positions and the salaries, wages, allowances and other emoluments and benefits of officials and employees paid wholly or mainly from municipal funds and provide for expenditures necessary for the proper conduct of programs, projects, services, and activities of the municipal government;

2. It increased the share of the local government units in the share in the internal revenue taxes as well as taxes in the utilization and development of national wealth; Article X, Section 6 of the 1987 Philippine Constitution Local government units shall have a just share, as determined by law, in the national taxes which shall be automatically released to them. Allotment of Internal Revenue Taxes (Section 284 of the LGC of 1991) Local government units shall have a share in the national internal revenue taxes based on the collection of the third fiscal year preceding the current fiscal year as follows: A. On the first year of the effectivity of this Code, thirty percent (30%); B. On the second year, thirty-five percent (35%); and C. On the third year and thereafter, forty percent (40%).

Provided, further, that the share of each Barangay with a population of not less than one hundred (100) inhabitants shall not be less than Eighty thousand pesos (P=80,000.00) per annum chargeable against the twenty percent (20%) share of the Barangay from the internal revenue allotment, and the balance to be allocated on the basis of the following formula: A. On the first year of the effectivity of this Code: 1. Population - Forty percent (40%); and 2. Equal Sharing - Sixty percent (60%); B. On the second year: 1. Population - Fifty percent (50%); and 2. Equal Sharing - Fifty percent (50%); C. On the third year and thereafter: 1. Population - Sixty percent (60%); and 2. Equal Sharing - Forty percent (40%) Provided, finally, that the fiscal requirements of barangays created by local government units after the effectivity of this Code shall be the responsibility of the local government unit concerned.

Amount of Share of Local Government Units (Section 290 of the LGC of 1991) Local government units shall, in addition to the internal revenue allotment, have a share of forty percent (40%) of the gross collection derived by the national government from the preceding fiscal year from mining taxes, royalties, forestry and fishery charges, and such other taxes, fees, or charges, including related surcharges, interests, or fines, and from its share in any co-production, joint venture or production sharing agreement in the utilization and development of the national wealth within their territorial jurisdiction. Sources of Revenue 1.National Government 2.Internal Revenue Allotment 3.Share from taxes, fees and charges collected from the development and utilization of national wealth 4.Other grants and Subsidies 5.Debt Relief Program Locally Generated 6.Real Property Taxes 7.Business Taxes 8.Other Local Taxes 9.Regulatory Fees 10.Operation of Local Economic Enterprises 11.Tolls and Users Charges.

Linkages with People's and Non-Governmental Organizations (Section 35 of the LGC of 1991) Local government units may enter into joint ventures and such other cooperative arrangements with people's and nongovernmental organizations to engage in the delivery of certain basic services, capability-building and livelihood projects, and to develop local enterprises designed to improve productivity and income, diversify agriculture, spur rural industrialization, promote ecological balance, and enhance the economic and social well-being of the people. Credit Financing: The Issues/ Concerns

1. The inadequacy of the internal revenue shares of the local government units to meet the budgetary requirements of the devolved function, programs and projects
2. The continued lack of budgetary support from the national government for the full implementation of devolved tertiary health services
3. The interference of national government in personnel and fiscal management of eth local government units
4. The need to further broaden the tax base of the local government units
5. The need to devolve more power functions and programs.

References: https://www.sciencedirect.com/science/article/pii/S https://www.peoplehum.com/glossary/decentralisation