CHAPTER 6: Reengineering Local Governments and NGOs Towards Good Governance

Local Governments
- Established or organized consistent with the principles of decentralization.
- Legal authorities constituted by laws providing services, with the rights and necessary organization to
regulate their own affairs.
- Recognized as general purpose units created by the national government.

They exist for the following reasons:

 Local officials know best the needs and interests of local population.
 Local governments come to exist as administrative convenience to the State.
 Effective partners of the central or national government in harnessing not only community development
and growth but also national development and growth.
 Local governance boosts the civil morale of the population.
 Local governments provide a clear understanding of the relationship between the desired project
objectives and resources available to implement them.

Characteristics of Local Government:

o Local governments are defined territorial boundaries with political and administrative jurisdictions.
o Local governments are non-sovereign communities with subordinate status, governments which are
below the national government.
o Local governments have authority and power to undertake public activities.
o Local governments are continuing organizations with population of more or less numerous.
o Local governments are municipal corporations.

In the Philippines, local governments are territorial subdivisions of the state:

a. Provinces c. Municipalities
b. Cities d. Barangays

A distant provision of the law, provides for the creation of regional governments namely:
a. Cordillera Administrative Region
b. Autonomous Region of Muslim Mindanao

Two (2) levels of Government

1. Upper Level (National/Central)
o The sovereign state or the “government of the whole country”.

2. Local Level (Community)

o Basic units of local governments, those performing services for the people who live together in a
community.

Federal States
- There is a central government, but the constitution has granted a certain degree of sovereignty to
subnational governments.

Unitary States
- The central government has supreme power.
- The supervision over local governments is done by the national government, as there is no intervening layer
of government between the sovereign nation and the local units.
International Union of Local Authorities (IULA)
- Observes the obvious resemblance between the structures of local government in neighboring countries,
classified local government systems in terms of geography and culture, including language, religion,
governmental traditions, and philosophy and closely related history.

Classifications of countries, according to IULA:

a. East Asia Group
 Philippines, Thailand, Japan
b. Anglo Saxon Group
 United States, Australia, Union of South Africa, UK, Canada
c. Eastern European Group
 Former USSR, Poland, Bulgaria, Former Yugoslavia
d. South Asia and East Africa Group
 India, Sri Lanka, Malaysia, Sudan, Burma, Ethiopia
e. South Europe Group
 France, Italy, Greece, Spain, Portugal
f. Central and Northwest Europe Group
 Germany, Austria, Switzerland, The Netherlands, Belgium, Luxembourg
g. West Asia and East Africa Group
 All Islamic countries, mostly Arab and Arab influenced states.

Local Government Code of 1991 (RA 7160)

- Legal instrument that strengthened the spirit of democracy and attain the highest possible level of
development at the local levels in the Philippines.
- LGUs have the power to create their own sources of revenues and to levy taxes, fees, and charges, subject to
such guidelines.

The Master Plan for the sustainable implementation of this Code:

1. Phase One or the Change-Over Phase (1992-1993)
 Concerns the transfer to LGUs of devolved functions, with the corresponding assets and
personnel.

2. Phase Two or the Transitional Phase (1994-1996)

 The national government agencies (NGAs) and the LGUs shall institutionalize their
adjustments to the decentralized schemes introduced by the Code.

3. Phase Three or the Stabilization Phase (1997 onwards)

 LGUs would have built adequate capacities in managing local affairs, and the NGAs would
provide constant support and technical assistance to LGUs.

Three (3) Ways in which political powers form the Central Government can be dispersed to Local
Governments:

1. Decentralization
- Dispersal of political or administrative powers from National Government.

2. Devolution
- Transfer of political powers and responsibilities from the Central/National Government.

3. De-concentration
- Transfer of administrative powers and functions to provincial or field offices from the Central
Government.
Department of Interior and Local Government (DILG)
- Acts as the coordinating and central body in overseeing that their functions and powers are properly
discharged according to the mandates of the Code.

NATIONAL AND LOCAL GOVERNMENT RELATIONSHIP

Two (2) models that depict the relationship between National and Local Government:
1. Fused Model
- Central and local governments combine to form a single sphere of public authority.

2. Dual Model
- Local governments retain freestanding status setting their own internal organization and employ staff on
their own condition of service.

LOCAL AUTONOMY IN THE PHILIPPINES

Local Autonomy
- The ability of local units for self-government in varying tiers of local governments in a state.
- Level of independence granted to local governments to administer freely their own local affairs with the view
to address the needs of the people and to promote the welfare of the constituency.

Local Governments do not possess inherent natural powers, but they only derive authority, powers, and
responsibilities from a higher-level government.

TIERS OF LOCAL GOVERNANCE IN THE PHILIPPINES

Article X of the 1987 Constitution

- Provides the creation of local governments.

Local governments in the Philippines are subdivided on smaller categories:

a. Provinces
o Comprised of a group of municipalities and component cities.
o Coordinates national development process through effective integration of programs and projects of
all its sub-localities.
o There are about 79 provinces in the Philippines.

b. Cities
o Created and governed by RA 7160.
o Serves as a general-purpose government for the coordination and delivery of all basic, regular, and
direct services within its jurisdiction.
o There are about 120 cities (component and highly urbanized) in the Philippines.

Component City
- A part of the province in which it is geographically located and is under its administrative supervision.

Highly Urbanized City

- Independent of the province in which it is geographically located in.
 c. Municipalities
o Consists of a number of barangays and serves primarily as a general-purpose government for the
coordination and delivery of basic, regular, and direct services within its jurisdiction.
o There are about 1,497 municipalities in the Philippines.

d. Barangays
o Basic political unit of government.
o Serves as the primary planning and implementing unit of government programs, projects, and
activities, and as a forum in which the collective views of the people in the community may be
crystallized and considered.
o There are approximately 43,000 (or a little less) barangays in the Philippines.

PHILIPPINE LOCAL GOVERNMENT HISTORY AND SOME ISSUES

Local Government traces its roots in the tradition of centralization from the Spanish Period (1565-1898) to the
American Period (1898-1948).

Two-fold Purpose of Decentralization:

1. Deconcentration of national government operations from Manila to field offices in the administrative
regions, cities, and provinces.
2. Devolution or transfer of powers and functions of the national government to the local governments.

The first local autonomy act was Republic Act 2264, “An Act Amending the Laws Governing Local Governments
by Increasing Their Autonomy and Reorganizing Provincial Governments.

- It vested greater fiscal planning, and regulatory powers among the city and municipal governments.
- Granted authority to provincial, city, and municipal governments the authority to undertake and carry
out any public projects which the local government itself finances.

SOME Landmark Legislations in Devolution:

a. Local Autonomy Act of 1959
b. The Barrio Charter of 1959
o Recognized local Autonomy in the Philippines.
o Principal Author: Raul Manglapus
 He argued and defended that barrios were to become quasi-municipal corporations exercising
autonomy through their taxing powers.

c. Decentralization Act of 1967

d. Local Government Code of 1983
e. Local Government Code of 1991

Enhancement of Powers and Responsibilities of LGUs

All the local government units exercise the following general functions and powers:
1. Efficient Service Delivery
2. Management of the environment
3. Economic development
4. Poverty alleviation
 RA 7160 provides that local government as a corporation shall have the following powers:

- To have continuous succession of its corporate name.

- To sue and be sued.
- To have and use a corporate seal.
- To acquire and convey real property or personal property.
- To enter contracts.
- To exercise such other functions and powers as granted by local government, subject to limitations
provided by the Local Government Code.

EXPANDED ECONOMIC POWERS OF LGUS:

1. Power to levy taxes:
o One of the most important political powers of LGUS’s is the authority to levy taxes and increase
them without prior approval of the Department of Finance.

2. Tax exemption privileges:

o Under RA 7160, LGU’s are now exempt from the payment of import duties and taxes for heavy
equipment or machineries, which shall be used for infrastructure projects, as well as garbage trucks
and other similar equipment.

3. Improve budgeting system:

o LGU’s can formulate and implement local development priorities and projects without securing the
initial approval of the Department of Local and Government (DILG).

4. Direct sourcing of funds:

o Local chief executives, upon the authority of the concerned Sanggunian or local council, may
negotiate and secure grants or donations in kind from local and foreign assistance agencies without
the approval and special education funds and statutory contributions.

5. Debt relief:
o Debts are written off as follows: a) unremitted contributions to the integrated national public funds;
b) un-remitted national government shares of taxes, charges, and fees collected by local governments;
and c) special education funds and statutory contributions.

6. Organizational charges:
o To make the bureaucracy truly efficient and accountable to the people, some organizational positions
are recognized or created. (Local School Board and Local Health Board).

7. Credit and other forms of financing:

o Liberal use of credit financing in support of local infrastructure and other socioeconomic
development projects.

8. Developing partnership:
o In providing public services or utilities, LGU’s can encourage public-private networking.

REVENUE AND TAXING POWERS OF LGUs

The Constitution grants fiscal autonomy to LGU’s in creating their own sources of revenues and to levy
taxes, and to impose fees and charges within their immediate territorial jurisdiction, subject to the limitation
determined by Congress.
 Some sources of PROVINCIAL TAX GENERATION in the Philippines:
 Real Property Tax
 Tax on transfer of real property ownership; 10-15 % of the property assessment
 Tax on business of printing and publication, no less than 1% but no more than 10%
 Franchise tax: percentage based on total gross income.
 Sand ang gravel tax; computed on cubic meters of sand and gravel collected based on the tax level
authorized in the tax ordinance.
 Professional tax; 5-15%
 Amusement tax on admission; 3%
 Annual fix tax per delivery truck or van of manufacturers or producers of or dealers in certain products.
A rate varies on the regulations of the local government concerned.

Some sources of MUNICIPAL TAX GENERATION in the Philippines:

 Tax on Business; based on the volume of the business of the applicant.
 Fees and charges; will be fixed by the local council or the city which may have the power to levy a rate.
 Fishery rental or fees and charges; stipulated in Local Tax Code and municipalities and coastal areas.
 Fees for sealing and licensing of weights and measures; dependent on the tax code of the local
governments concerned.
 Community tax; computed on the individual income of the citizens.

Some sources of CITY FINANCING in the Philippines:

 The city may levy and collect taxes, fees and other impositions that the province or municipality may
levy and collect. There is not much variation with the taxing powers of the provinces and municipalities,
except that the rates in cities are much higher than those of the provinces or municipalities.

Some sources of TAX COLLECTION OF BARANGAYS in the Philippines:

 Taxes and fees; Like the power to tax in the province, cities, and municipalities the taxing power of
barangays are also defined in the Local Government Code. However, barangay collect simple taxes like
fees in the issuance of personal identification; barangay share is 15% of the Total Real Property
collection in cities that can also tax livestock such as cockfighting.
 Service charges, Barangays may impose and collect fees on service rendered by an agency as part of the
regulatory powers of the barangay government.
 Contributions, Barangays likewise are empowered to receive contributions from the private sector,
financial institutions, and the like.

LOCAL GOVERNANCE INNOVATIONS FOR GOOD GOVERNANCE

 Local economic development

 Improving the quality and delivery of social services
 Transparency and accountability
 Environmental governance
 Disaster preparedness
 Conflict management
NGOs, POs, AND VOLUNTARY GROUPS FOR GOOD GOVERNANCE

Nongovernmental Organizations (NGOs)

- Fiscalizers of the government policies, programs, and even leaders in powers.
- They assumed a role as oppositionists to Marcos’s dictatorship ang cronyism.
- They form part of the civil society aiming to change policy direction, acting as lobbying groups, and
viewed as better alternatives to government in control of Administrations.

Types of NGOs in the Philippines:

a. Non-Political Groups
 Develop an interest in providing services to localities not reached by the government and to
sectors where services were inadequate.
b. Politically- oriented NGOs
 They were most visible in the early 1970s when they opposed the oppressive policies of the
dictator. Those in the extreme left engaged in armed struggle and fought the military who
attempted to subvert their politization efforts.

People’s Organizations (POs)

- Generally composed of disadvantaged individuals and work to advance their member’s material or social
well- being.
- Based on DSWD, People’s organizations refer to a bona fide association of citizens, which
demonstrated capacity to promote public interest, and with identifiable leadership, membership, and
structures.

FRAMEWORK OF GOOD GOVERNANCE

1. Accountability
o Making public officials answerable for government behavior and responsive to the entity which
they derive authority.

2. Participation
o Enhancing people’s access to and influence on public policy processes.

3. Predictability
o The existence of laws, regulations, and policies to regulate society and the fair and
consistent application of these laws.

4. Transparency
o The availability of information to the general public and clear government rules,
regulations, decisions.

For Local Governments to became enablers they must adopt appropriate policies and must consider
them within the context of their capabilities, such as:

1. Laying Down Policy: A strategic sense of key policy issues facing local communities and their
changing needs.

2. Searching for an Effective Mechanism: Determining the most effective response to changes and
more pressing needs.

3. Regulating standards and Monitoring Performance: Setting standards and monitoring

performance of the private sector providing services to the people.
4. Developing Partnership: Local public organizations can collaborate in tandem with the private sector by
offering competitive advantages such as lower cost of doing business, better access to markets, and a skilled
labor force.

5. Implementing Regulatory Framework: Influencing interpreting and implementing the regulatory

framework. The establishment of commercial centers by the private sector is an aspect of “enabling and
facilitating” to generate manpower force, increase household income, and ensure that the corresponding
taxes are paid.