TAGAYTAY CITY – Local governments should be given more access to direct loans and grants from foreign funding institutions in pursuit of their various development agenda.

This was one of the points raised by Gov. Erico B. Aumentado at the two-day Philippines Development Forum (PDF) held here last Thursday and Friday.

Aumentado, who was one of the speakers during the sessions of the PDF, scored the inequitable sharing of resources between the national and local governments.

He shared that during a meeting with representatives of the World Bank in Washington DC on December 7, 2005, he proposed that the possibility of extending concessional loans and performance grants directly to the LGUs, even without the national government’s sovereign guarantee, be studied and explored.

“Our initial discussions are focused on concessional loans, equity contributions for performance grants, and the criteria for eligibility for eligibility. We have considered good governance and sound financial housekeeping as part of the conditions,” Aumentado, who is also the national president of the League of Provinces of the Philippines and the Union of Local Authorities of the Philippines, said.

He explained that while the enactment of the Local Government Code has significantly increased the share of the LGUs in the national budget to 14%, compared to the about 2.6%, this is very much lower compared to other countries whose LGUs get as much as 60% of the national budget.

Aumentado said that notwithstanding the political unrest in Metro Manila, the LGUs continue to hold the country together, while they continue to respond to the challenge of freeing their people from the constant threats of hunger, disease and crime, and to nurture in everyone the will, the drive and the energy to dream and achieve a decent and meaningful life.

With the real threat of the Senate not being able to pass the national budget for 2006 looming, he said the LGUs stand to lose about P15.4 billion representing the increment over last year’s internal revenue allocation, access to the national government’s P5 billion counterpart to the Kilos Asenso movement and the P3 billion Barangay Kalayaan Development Fund for barangays experiencing insurgency problems.

He said a reenacted national budget does not bode well for LGUs as its effective delivery of services is linked to its financial capacity, thus the compromise of the local development goals.

“If the reenactment of the GAA persists, budgetary constraints of LGUs would hinder the adoption of programs geared towards social protection,” Aumentado emphasized.

Relative to this situation, he said that LGUs “would certainly prefer a regime of low concessional rates from foreign banks, and very low commercial rates from them. This way, LGUs can introduce more programs and projects to improve the economic and social conditions of our people.

As he invited the participants of the PDF to work with the LGUs to bring about rural progress, he called on them to “create a new framework of development cooperation from aid relationship to a more mature development partnership. Where we share goals, we hope to share resources to achieve these common objectives.” (angelica j. sanchez)