Two decades on, Local Gov’t Code to get thorough review

MANILA, Philippines – Twenty-two years after it was enacted, the Local Government Code will finally undergo a comprehensive review and possible major amendments – something that lawmakers failed to do despite a provision that mandates an evaluation of the Code every 5 years.

The review, to be led by government, will be made possible through a $250-million loan approved by the board of directors of the Asian Development Bank (ADB) on Thursday, February 13. The reform program will receive parallel financing of $150 million from the Agence Française de Developpement.

The ADB loan is intended to study changes to the Code that will enable local government units (LGUs) to increase its local sources of income, and therefore have more funds for basic services and job creation.

As old as the Local Government Code have been 3 complaints of LGUs: 

• their share in the internal revenue collection of the national government, at 40%, is not enough
• the responsibilities and personnel of national agencies were devolved but not the funds
• Congress has passed a number of laws that require LGUs to implement additional programs and deliver additional services without the corresponding funding

When these concerns are addresse, LGUs will have wider leeway to plan and deliver services to their constituents.

“The Philippines has taken significant steps to improve the financing system of LGUs and to foster transparent and accountable local governance practices. Reforms should help raise revenues and therefore improve services,” Juan Luis Gomez, senior public management specialist at the ADB’s Southeast Asia Department, said in a media release.

These efforts are not enough, however, since local tax bases remain “weak” and there are still “flaws in the design of transfers” that make it hard especially for poorer local governments to perform well, the ADB said. 

The review program will then study amendments that will “[tie] greater access to funding to performance,” “[align] national and local development priorities,” and “improve local financial management systems.”

In 2004, a Newsbreak report explained how politics and the enormous challenge of a one-sweep revision had stalled Code reforms. Local government leagues had succeeded in having piecemeal amendments, but these were on minor provisions. 

Nothing has changed a decade later. This initiative President Benigno Aquino III government is, in a way, an attempt to accomplish what 3 presidents before him have failed to do – push an omnibus review of the so-called bible of local governance.

The Code was signed on Oct 10, 1991, by then President Corazon Aquino, mother of the current president. Proponents had to push and lobby hard for 5 years – practically the entire term of Aquino – before Congress passed it. – Miriam Grace A. Go/Rappler.com