| Speech
of Governor Edgar R. Lara
Province of Cagayan North
Vice President for Luzon, League of Provinces of the Philippines
Working
Group on Decentralization and Local Government
Philippine Development Forum
15 March 2006
GOOD GOVERNANCE and GROWTH
I.
Local Governance
The institution of local autonomy under the Local Government
Code of 1991 seeks to inspire a socio-political and economic
development that is people-centered and people-led. It was
meant to make the lives of our people easier. Since its enactment
fourteen (14) years ago, we have become active participants
and witnesses to dramatic breakthroughs that continue to energize
our local communities and improve the quality of life in the
countryside.
The consultation-workshop of the Philippine Development Forum
on local autonomy has been a great venue to consolidate our
gains since the passage of the Code, and establish a new benchmark
to serve our people better. The Forum has provided tools that
remind our local government units (LGUs) where to focus their
respective interventions, and articulate the many concerns
that LGUs have to confront to improve the delivery of basic
services.
Because of rules of engagement that this Forum has adopted
we now have a stronger feel of the public pulse, and we were
able to validate common advocacies.
II.
Governance for Growth
More than ever before, the relationship between governance
and growth is emerging as the basis of all political leadership.
People, here and elsewhere, now measure the performance of
any government by the quality of life they enjoy and the confidence
they feel in knowing that human development is certain.
Rightly or wrongly, the complex connection between economic
growth, employment, poverty and social development is left
to the government to unravel. If it fails to make that connection
and pave the road to progress, it needs to reassess its performance
and change its strategic plans.
Local governments are not exempted from the standards that
should show a clear connection between their initiatives,
and the state of the people’s economic and social conditions.
Today, local governance is not only about basic service delivery.
Local governance is now largely about ensuring that our people
are able to earn a livelihood and contribute to the development
of their families and communities.
Sustainable economic growth that brings improvements in the
standard of living to its constituents is now a fundamental
responsibility of every LGU. If an LGU cannot provide growth
opportunities to its people, it must revisit its development
plans, and re-evaluate the course of its program implementation.
III. Partners for Progress
The different consultation workshops have been conscious of
these demands from our people that now know their rights under
the law, and what they deserve under a progressive nation.
We should continue to provide the framework and the benchmarks
for both the national and local governments to facilitate
delivery of basic social services and ensure economic development
nationwide. We also have to strengthen the working relationship
between the national and local governments which have the
same constituents.
We are happy to underscore the partnership with the national
government, especially the Executive Department. But we have
to work with Congress in a close, albeit indirect manner.
Having the exclusive prerogative of enacting the general appropriation
law, Congress affects the operation of LGUs in many ways.
IV. The Proposed 2006 GAA
There is now a real threat that the proposed budget for 2006
may not be passed by Congress. LGUs will stand to lose at
least P20 Billion representing increment in the internal revenue
allotment (IRA) if the 2005 General Appropriation Act is deemed
reenacted. LGUs will also stand to lose the P5 Billion allocation
as the counterpart funding of the national government for
the Kilos Asenso Movement.
If you recall, we launch this national movement last year
to harness the power of convergence and the bayanihan spirit
of the Filipino to accelerate growth and reduce poverty in
the countryside.
The movement intends to build a potent venue where national
and local officials can converge to adopt a cohesive action
in achieving national unity and prosperity at the grassroots
level. As front-liners in the delivery of basic, the movement
recognizes that local governments have the power to spur and
take action to move our country towards a stronger and more
prosperous nation.
With Kilos Asenso, we can establish a dynamic network of institutions
that will champion local autonomy, enhance the delivery of
basic social services, and spread the fruits of progress to
the people. If the 2005 GAA is deemed reenacted we may not
get this counterpart funding.
We may also lose the proposed Barangay Kalayaan Development
Fund amounting to P 3 Billion extend assistance to LGUs experiencing
insurgency problems, and help them stamp out the growth of
the insurgency in their respective areas.
V.
IRA Issues
We wish to underscore this development because the delivery
of basic services is inextricably linked to our financial
capacity. If IRA or part thereof, is not release pursuant
to law, our development goals will be compromised at the local
level. If the re-enactment of the GAA persists, budgetary
constraints of LGUs would hinder the adoption of programs
geared towards social protection.
Thus, the first order of the day if for everyone to lobby
before Congress to pass the proposed 2006 national budget
so as not to disrupt the delivery of basic social services
to our people in the countryside.
We made already made a long and a collective campaign for
the release of withheld IRA share since 2000. Fortunately,
the President has already issued Executive Order (EO) No.
494 dated 18 January 2006 which seeks to release the unprogrammed
internal revenue allotment (IRA) in 2000 and 2001 amounting
to P17.5 Billion to local government units (LGUs).
The Executive Order mandates that the DOF, DBM and DILG shall
take necessary steps to ensure that the LGUs get their respective
share of the unpaid IRA on installment basis for a period
of seven (7) years starting 2007 up to 2013, or ensure that
interested LGUs may avail in advance their respective shares
through a monetization program.
The IRA monetization program (IMP) is a scheme which will
give LGUs the option to collect in advance from trustee banks
their respective shares in the unreleased IRA at a discounted
value, net of interest and other charges from the said banks.
Earlier on November 8, 2005, the DOJ through Secretary Raul
Gonzales already agreed with “the contention that the
P17.5 Billion IRA, representing the unpaid portion of the
IRA for the years 2000 and 2001, should be released to LGUs
without need of any further or new appropriation(s).”
Since then, we have obtained the commitment that henceforth
no future impositions on the IRA would be made, and the IRA
would be automatically appropriated in accordance with the
Code.
It has been almost a three (3) months since we are operating
under the 2005 GAA. There is great cause to be concerned,
and to lobby with our Representatives and Senators to pass
the new GAA. The failure of Congress to pass the new budget
will prejudice the delivery of basic services in the countryside.
VI. Word Bank Financial Assistance
While we are on fundamental issues of funding, we are happy
to report that we are working in earnest for an arrangement
with World Bank to extend financial assistance to LGUs without
requiring national government guarantee.
We have already met with representatives of World Bank in
New York to study and explore the possibility of extending
loan package directly to LGUs. The World Bank is now opening
windows primarily for LGUs.
It appears that World Bank has learned that Philippines LGUs
have the power and the capacity to make significant interventions
for human development, and at the same time ensure financial
viability.
Our initial discussions were focused on loan and equity contribution
and the criteria for eligibility. We have considered good
governance as part of the requirement. We are also considering
sound financial housekeeping as part of the conditions.
If all LGUs can comply readily with these reasonable requirements,
we can introduce more programs and projects to improve the
economic and social conditions of our people.
VII. Local Finance Administration
With all this possible support, we welcome the efforts to
design innovative schemes to increase assistance to LGUs and
make us more effective. The various suggestions culled from
the consultation workshops are commendable. In fact the League
of Provinces has passed a resolution last February 15 to validate
and support several policy recommendations affecting local
finance administration.
With these recommendations, we can focus on food security,
access to potable water, quality education, improved health
services, shelter, our people’s security and well-being,
social equity, and environmental sustainability.
We can continue the task of building the physical and social
infrastructures that would create an environment conducive
to growth opportunities and financial investments. Physical
infrastructures would facilitate the movement of people and
products, while social infrastructures would prepare our people
to actively participate in economic activities.
We can also improve the incentive environment in agriculture
sector, and pursue a greater trade and investment relations
with the outside world. We can pump-prime local communities
to increase productivity of businesses and people who create
the nation’s wealth.
Our LGUs are already engaged in upgrading the human and capital
resources, but we have to harness unity of action to bring
about the best results. Continuing dialogues and multi-sectoral
consultations, and implementing devolved powers and functions
are effective means to include all stakeholders to pursue
shared national goals and commitments.
VIII.
Force for Change
The continuing consultation workshops have basically outlined
the challenges and other priorities for action that have to
be incorporated in our advocacies and local development plans.
They are quiet ambitious and can be attained if we cut them
into manageable tasks. If our resources and efforts were concentrated
towards realizing a set of clearly articulated goals then
we would definitely improve our people’s condition.
The different presentations in this Forum clearly seek to
engender a policy environment within the national government
and LGUs. This policy environment would surely enable us to
adopt administrative changes in a more systematic and comprehensive
approach.
For fourteen (14) years now, we have constantly and continuously
advocated for codal amendments and policies to improve local
governance and administration. The presentations and discussions
in our consultation workshops have given us a clearer picture
of these initiatives.
The Forum has also given us a new impetus to continue our
task to build upon our gains and break new grounds to serve
our people better.
Maraming Salamat at Mabuhay Kayong Lahat!
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