On Local Governance and Economic Development: Economic

Transformation of Naga City under Jesse Robredo

Faculty Marked Assignment no. 2

PM 251 (Local Government and Regional Administration)

Submitted to:

Prof. Juvy Lizette M.

Gervacio
Faculty-in-Charge

Submitted by:

Marvie Ness G. Dela Rama

2014-75243

University of the Philippines Open University

Faculty of Management and Development

Studies

Master of Public Management

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CERTIFICATION AGAINST INTELLECTUAL FRAUD AND DISHONESTY

I hereby declare, upon my honor, that what I have written in this FMA/Final
Exam are the products of my own personal intellect and I have made the
proper attribution of sources and references. In the event that it is established
by competent authorities that what I have written in this FMA/Final Exam had
been obtained by me through fraudulent use of ideas or information belonging
to other persons, I will accept the corresponding penalty or sanction
corresponding to such dishonest conduct.

MARVIE NESS G. DELA RAMA _______________ December 3, 2021

On Local Governance and Economic Development: Economic

Transformation of Naga City under Jesse Robredo

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I. Introduction: Decentralization and Local Economic Development
The passing of Republic Act 7160 or the Local Government Code of
1991 resulted to the devolution of authority, responsibilities, and resources
from the national government to local government units (Tapales, 1992). This
decentralization effort is specifically anchored on the principle of subsidiarity
which then argues that problems in the community are best identified and
addressed by the local governments since they are closer to the people and
thus, they are more familiar about the needs and preferences of their
constituents (Oates, 1999, as cited in Saito, 2008, p.2). In this sense, the
local governments, with their direct interactions with the people, best
understand their residents and their plights and thus, they are also the most
proper candidate in addressing public concerns. This idea was further
supported by World Bank (2004, p. 2) when it stated that “local development
depends upon agency and action at the local level rooted in the commitment
by local actors to assume responsibility for improving their own well-being”.
Considering the significant role of local governments in local
development, it is then necessary to assess the existing best practices of local
government units especially in terms of economic development. In this
particular case study, the city of Naga under the administration of the then
Mayor Jesse M. Robredo will be discussed and assessed. The socio-
economic characteristics of the city will be first presented as well as its socio-
economic challenges especially during the period before Robredo became the
city mayor. Next, the mechanisms and strategies that were employed by Naga
to address these challenges will be discussed and enumerated. Lastly, the
study will analyze how Naga facilitated local economic development under the
governance of Robredo. Specifically, the strategies undertaken by Naga
during the term of Robredo will be expounded in accordance with the idea of
good governance. By doing this, best LGU practices such as that of Naga
City can be emulated and mainstreamed in other local governments and
economic development in the national level can be then fostered through
effective local governance.
II. Naga City: The Queen City of Bicol
The city of Naga is located at the center of the province of Camarines
Sur and the Bicol Region with a total land area of 8,448 or 84.46 sq kms

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making it known as the “Queen City of Bicol” (City Government of Naga,
2017; Gilbert, 2011). It is considered as landlocked due to its lack of access to
the sea as well as to other natural resources placing the city in a
disadvantaged position especially in economic terms (Gilbert, 2011). Being
the historical, religious, and educational center of the Bicol Region, Naga City
is also considered be the heart of Bicol. To further showcase how Naga City
came to be the center of the region, its characteristics will be discussed
especially in terms of its socio-economic situation.

A. History and Religion

Aside from being the Queen City of Bicol, Naga City is also known as
the Pilgrim City due to the presence of Lady Peñafrancia, the largest Marian
pilgrimage in Asia and the patroness of Bicol Region (City Government of
Naga, 2017). The city is also the center of religion in Bicol with it housing the
Metropolitan Cathedral, the center of the Catholic Archdiocese of Caceres
(Kawanaka, 2002). Additionally, it is one of the oldest cities in the country with
it being founded in 1576 or eleven years after the arrival of Miguel Lopez de
Legazpi in Cebu and being already established as the center of administration
and religion during the Spanish rule.

B. Population Size and Distribution

In 2000, the total population of Naga City amounted to 137, 810 which
is estimated to be 8.5 percent and 19.5 percent higher than its population in
1995 and 1990 respectively (Lleno, n.d.). In terms of population growth
however, the annual growth rate of Naga declined from 1.94 percent in the
period of 1990-1995 to 1.65 percent in the 1995-2000 period. In 1995, 75.1
percent of land area in Naga City are classified as agricultural and 24.9
percent as residential and commercial (Kawanaka, 2002). Despite the large
portion of Naga being agricultural, about 90 percent of its population still
reside in the residential and commercial areas.

C. Urban Poor Population

According to Kawanaka (2002), the total population of urban poor in
Naga City amounted to 5,500 households in 1989 or about 25 percent of the

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city’s total population. More than this however, about 11, 000 families claimed
that they needed assistance from the city government which then accounted
to more that 40 percent of the population of Naga.

D. Trade and Industry

Naga City is considered to be the center of trade not only in the
province of Camarines Sur but also in the entire Bicol Region (Kawanaka,
2002). In fact, the main industry in the city is commerce specifically in
wholesale and retail trading. As of 1993, the total number of business
establishments that are involved in wholesale and retail trading amounted to
2,279 or about 66.9 percent of the total business establishments in the city.
With regards to the financial sector, the city only has 18 banks and 22 other
financial institutions in 1988 but it later increased to 33 and 65 establishments
in 1996 respectively.

III. Contextualizing Naga City before Robredo

With the understanding of socio-economic characteristics of Naga City,
the major concerns and challenges of the city will now be elaborated
specifically during the period before Robredo was elected as the city mayor.
In this section, the political, social, and economic context that was faced by
Robredo when he assumed office will be detailed out in order to fully grasp
the significance of his reforms and strategies.

A. Political Challenges
Similar with the practices of other local governments in the Philippines,
Naga City was also once characterized by political patronages and
clientelism. Provided with fiscal and regulatory powers such as the granting of
permits and licenses, politicians used their position to collect bribes and dole
out gifts in order to stay in power (Scharff, 2011). Bribes collected from illegal
activities such as gambling and nude shows also gave them other sources of
political money. In fact, the city hall before Robredo was full of political
appointees and that public projects and programs are based on political
allegiances (Robredo, 2000). In addition to this, Robredo was only
considered as a minority mayor with him winning only 24% of the total votes

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and defeating his opponent by a margin of less than 1,000 votes. This
resulted to the difficulty of pushing for his development agenda considering
that the majority of the city council members were part of the opposition.

B. Social Challenges
Naga City before the period of Robredo was characterized by the
proliferation of illegal gambling activities and lewd shows that were
uncontrolled and seemingly tolerated by the local police and authority
(Robredo, 2000; Scharff, 2011). As a matter of fact, nude shows were staged
at 15 locations in Naga in 1988 while three million pesos or about seventy
thousand US dollars a day were used on betting through jueteng (Scharff,
2011). In a way, illegal gambling worsened the socio-economic status of the
masses at that time since most families wagered large portion of their income
in the hopes of breaking free from poverty. Likewise, the inaction on the part
of authorities was due to the huge number of kickbacks they received from the
gambling lords and nude show operators. Added to this gambling problem is
the increasing crime rate and growth rate of urban poor population (Robredo,
2020).

C. Economic Challenges
Before Robredo, the local economy of Naga City is not really looking
well as compared to its current status as an urbanized business center in the
Bicol region. According to Robredo (2020), Naga City was demoted before
from a first-class to a third-class city by the Department of Finance and its
budget deficit amounted to almost one million pesos in 1988 brought by the
overspending of the local government. In addition, its central business district
was already overcrowded that it no longer attracted potential investors.
Economic activity and employment generation are also slow with the low
business confidence in the city. As for locally-sourced revenue, the city limited
its tax base to the 2,000 registered business establishments in the locality
resulting to poor tax collection.
IV. Socio-Economic Transformation Under the Robredo Administration
The transformational leadership of former City Mayor Jesse Robredo
coupled with his vision of good governance led to the dramatic development

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of Naga city from being a third-class city in 1988 into a first-class urban center
in 1990 (Espinosa-Robles, 1999, as cited in Puatu, 2012). To better illustrate
this, the governance model will be explained in connection with the economic
strategies and reforms initiated by Robredo.

A. Inducing Economic Growth through Governance Model

Gilbert (2011) introduced the governance model as the primary
mechanism of Robredo in inducing local economic development in Naga.
According to him, the model is anchored on the concept of having strong
institutions through three key elements: progressive development, functional
partnerships, and people participation. The progressive perspective is
centered on the notion of facilitating growth with equity by encouraging all
sectors of society in realizing their role in local development. In this
arrangement, the local government took up the roles of leadership and
mobilization. On the other hand, functional partnership emphasizes the
importance of engaging with civil society in addressing local issues and
concerns since the government alone cannot address all the needs and
problems of various groups in the locality. Lastly, people participation
forwards the important role of individuals and the community in the decision-
making process and is anchored on the idea of community ownership and
stakeholdership in order to facilitate long-term sustainability of government
projects and programs.

B. Establishing Accountability and Public Trust

In order to facilitate inclusive economic growth during his term,
Robredo relied heavily on gaining the trust of his constituency through the
employment of good governance concepts such as accountability,
transparency, and civic participation. He slowly gained public confidence
through his strong adherence to his principles. In fact, Robredo even severed
ties with his uncle, the then Governor of Camarines Sur, when he refused to
appoint his uncle’s former classmate as the city’s new chief of police (RMAF,
2000, as cited in Puatu, 2012). As asserted by one of the Naga City
coordinators, the charisma of Robredo is based on his principles and not on
his personal charm (Isaac & Aceron, 2007, as cited in Puatu, 2012). Aside

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from this, Robredo is also known for being humble and approachable in the
sense that anyone can enter his office without any necessary appointments
(Puatu, 2012). Furthermore, he initiated accountability and transparency
measures through the creation of Naga City People’s Council (NCPC) which
is composed of almost one hundred non-governmental organizations (NGOs),
citizens, business people, and other civil society associations (Gilbert, 2011;
Santos, 2015). The council is not only involved during consultations but also
during policy-making, project implementation, and project monitoring and
evaluation (Gilbert, 2011). NCPC promotes people participation and
representation in all city government bodies through direct observation,
voting, and introduction of legislation (Santos, 2015). Aside from this, the city
has its own website (i.e., www.naga.gov.ph) which practically provides all
details regarding the operations of the city. The city’s citizen charter as well as
its annual budget and allocations are also posted in the website which then
makes public information more accessible to the residents of Naga.

C. Economic Interventions Through Partnerships and People Participation

The stagnant economy and congested city of Naga were some of the
major challenges Robredo has to face after he assumed office. To effectively
address these concerns and foster economic development, partnerships with
the private sector were forged and strengthened under the leadership of
Robredo.
One project of the Robredo administration is the formulation of Urban
Transport and Traffic Management Plan through continued consultations with
the private sector on how to effectively reorganize traffic flow while ensuring
the minimum negative short-term impacts on all stakeholders (Gilbert, 2011).
With this setup, the terminals within the Central Business District (CBD) were
relocated resulting to increased pedestrian circulation and economic activity at
the peripheries of the CBD. Overall, the implementation of the plan led to the
easing of traffic flow at the center, expansion of Naga commercial area, and
making the business center orderly and livable again. This initiative however
is not without its own struggles and difficulties. According to Robredo (2020),
the city government had to go through 18 court cases filed by terminal
operators who are deeply affected by the relocation.

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 Naga City also launched the Naga Local Initiatives for Economic
Activities and Partnerships (LEAPS) program which aimed at tapping outside
resources in implementing economic projects (Robredo, 2000). Under
LEAPS, the local government of Naga partnered with the private sector in
constructing and operating satellite markets in strategic areas at the
peripheries of CBD. This then eventually led to the creation of satellite district
markets and smaller community markets in partnership with barangays, which
in turn further contributed to the increased economic activity in the area.
In response to the large urban poor population in the city, Robredo
spearheaded the Naga Kaantabay sa Kauswagan program which effectively
addressed the problems with squatters and slum dwellers in the area. In this
program, a tripartite approach was done by the city government involving the
national government agencies, urban poor associations with the guidance of
NGOs, and private landowners. That is, the NGOs were given the role of
community organizing, the national agencies provided the resources for the
construction of houses, and the local government provided the lot by
negotiating with the landowners.
In terms of closing the budget deficit of the city, Robredo, with his
participatory approach to governance, consulted with the Naga’s Chamber of
Commerce regarding the common practice of business owners in
underdeclaring their sales resulting to lower business taxes (Scharff, 2011).
When this effort failed, he resorted to confronting and compromising with
literally every business owner in the city who complained about the increase
in his or her business tax. The increase in their taxes was estimated by the
city government through its investigation and rough computation of the sales
of a particular business.

V. Conclusion: Economic Development Through Good Governance

Local governments are believed to be the primary actors in fostering
local economic development. In order to determine the necessary strategies
for local economic development, the best practices of Naga City under the
leadership of former Mayor Jesse Robredo were discussed and assessed in
relation to the governance model. To elaborate, the practices of partnerships,
people participation, and progressive development were employed by

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Robredo in order to gain public trust and successfully implement his economic
reforms in the city. That is, one major factor that contributed to the economic
success of Naga is Robredo’s unique brand of leadership and his practices of
good governance. As evident in the discussions above, Naga City relied
heavily on its partnership with the private sector in realizing its economic
plans and strategies especially in terms of funding and technical expertise. To
conclude, the local leader and his or her brand of governance plays a huge
role in promoting local economic development especially in the Philippines. In
order to implement radical reforms in the local government, a strong political
will from the local leader is necessary.

Reference List

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City Government of Naga. (2017). Ecological profile of the city of Naga
(Volume III). City Planning and Development Office, City Government
of Naga. https://naga.gov.ph/wp
content/uploads/2017/09/Ecological-Profile-2016-30-Draft.pdf
Gilbert, B. (2011). Fostering local economic transformation through
community engagement: Naga city’s collaboration with its civil society
and businesses. Federation of Canadian Municipalities – Municipal
Partners for Economic Development Program.
Kawanaka, T. (2002). Power in a Philippine city. Institute of Developing
Economies, Japan External Trade Organization.
http://hdl.handle.net/2344/00010641 Robredo, J. (2000, May 3).
City strategy and governance: the Naga city experience [Paper
presentation]. East Asia Urban and City Management Course,
Singapore.
Lleno, L. (n.d.). Naga city: a profile. Ateneo de Naga University. https://
external.adnu.edu.ph/Centers/SSRC3/profiles/nagaprofile.htm
Puatu, A.K. (2012). Community capacity building and local government
leadership: describing transformational leadership practices in
Naga city, the Philippines. In K. Miyoshi, Y. Okabe, & C.L. Banyai
(Eds.), Community Capacity and Rural Development (pp. 18-41).
Kyushu International Center, Japan International Cooperation Agency
and Ritsumeikan Asia Pacific University.
https://www.apu.ac.jp/rcaps/uploads/fckeditor/publications/journal/RJ
PS_V28_Ana.pdf
Robredo, J. (2000, May 3). City strategy and governance: the Naga city
experience [Paper presentation]. East Asia Urban and City
Management Course, Singapore.
http://www1.worldbank.org/publicsector/politicaleconomy/November3
eminar/NagaCityExperience.PDF
Saito F. (2008). Decentralization and local governance: introduction and
overview. In F. Saito (Eds.), Foundations for Local Governance (pp.
1-24). Physica-Verlag HD. https://doi.org/10.1007/978-3-7908-2006
5_1
Santos, R. (2015). Participatory budgeting and the Philippines: a cursory
survey of selected participatory budgeting experiences the Philippines.
National College of Public Administration and Governance.
https://www.oidp.net/docs/repo/doc632.pdf

Scharff, M. (2011). Building trust and promoting accountability: Jesse

Robredo and Naga City, Philippines, 1988-1998. Innovations for
Successful Societies, Princeton University.

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 https://successfulsocieties.princeton.edu/sites/successfulsocieties/file
Policy_Note_ID158.pdf
Tapales, P. (1992). Devolution and Empowerment: LGC 1991 and Local
Autonomy in the Philippines. Philippine Journal of Public
Administration, XXXVI (2), 101-114. https://pssc.org.ph/wp
content/pssc archives/Philippine%20Journal%20of%20Public
%20Administration/19 2/Num%202/07_Devolution%20and
%20Empowerment.pdf
http://www1.worldbank.org/publicsector/politicaleconomy/November3
eminar/NagaCityExperience.PDF
World Bank. (2004, June 16-18). Local development discussion paper [Paper
presentation]. International Conference on Local Development,
Washington, DC.
http://web.worldbank.org/archive/website00681/WEB/PDF/LDDPFINA
PDF
FCM In FCM International
CASE STUDY
Municipal Partners for Economic
Development Program
www.fcm.ca
FOSTERING LOCAL ECONOMIC
TRANSFORMATION THROUGH
COMMUNITY ENGAGEMENT
Municipal Partners for Economic
Development Program
www.fcm.ca

FOSTERING LOCAL ECONOMIC

TRANSFORMATION THROUGH

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