SYNOPSIS OF FINDINGS SIXTH RAPID FIELD APPRAISAL OF

SYNOPSIS OF FINDINGS

SIXTH

RAPID FIELD APPRAISAL OF DECENTRALIZATION

Governance and Local Democracy Project Project No. 492-0471

Prepared by the Associates in Rural Development, Inc. Under Contract No. 492-0471-C-00-5089-00

With USAID/Philippines

31 July 1996

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The GOLD Project 6th Rapid Field Appraisal of Decentralization was made possible through support provided by the U.S. Agency for International Development (USAID) under the terms of Contract No. 492-0471-C-00-5089-00. The opinions expressed herein are those of the author and do not necessarily reflect the views of USAID.

TABLE OF CONTENTS

EXECUTIVE SUMMARY liii

BACKGROUND 1

THE 6TH RFA: MEGA TRENDS 2

1111 LOCAL REVENUE and RESOURCE MOBILIZATION 3

DELIVERY OF BASIC SERVICES 6

1111 PARTICIPATION 12

INTERGOVERNMENTAL RELATIONS and LEGISLATIVE ACTIVITY 14

SPECIAL NOTES

~ 1. THE AUTONOMOUS REGION OF MUSLIM MINDANAO 17 2. THE NATIONAL GOVERNMENT AGENCIES 18

RECOMMENDATIONS 19

ANNEX: ON METHOD 21

ENDNOTES 22

EXECUTIVE SUMMARY

BACKGROUND

Rapid Field Appraisals of Decentralization (RFAs) have been undertaken six times since the implementation of the 1991 Local Government Code. A team of consultants, knowledgeable of the regions, accomplishes RFAs by interviewing local officials, national government agency personnel, and persons from the private sector and non-government organizations. They bring written reports to Manila, and participate in a two-day seminar to draw together their findings and observations. The results are discussed in a public presentation, and this "Synopsis" is the result.

MEGA TRENDS

The 6th RFA featured a remarkable similarity of findings within topics, across regions, and among levels and types of LGUs. These "megatrends" are:

0 Diffusion of The Decentralization Process a significant diffusion of the decentralization process to lower levels of L.GUs and to a wider arena of impact.

0 Deepening of Decentralized Operations and Innovations--a conspicuous deepening of decentralized operations and innovations.

0 Shift in LGU Management Emphasis-an appreciable shift in LGU management emphasis from internal operations and general services, toward external operations, development management and service delivery.

0 Growing Militancy for Greater Local Autonomy--a growing militancy for better performance and greater autonomy.

SPECIFIC TRENDS AND CONSTRAINTS

Underlying the megatrends are trends and constraints in a number of topical areas:

Local Revenue and Resource Mobilization

0 While the IRA remains the main source of revenue for all levels and types of LGUs, there is a continued trend towards more creative and expansive methods of revenue generation and resource management.

0 LGUs at all levels have become much more aggressive in their efforts to sharpen fiscal management.

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Executive Summary~ 6th Rapid Field Appraisal of Decentralfzatlon

0 Two particular constraints were noted under this topic:

• calculating and allocating LGUs' share of the national wealth from natural resources extracted within their jurisdiction remains problematic.

• the system for assessing and collecting real property tax is excessively complex, such that efforts to improve performance by conventional methods cannot overcome the system's inherent shortcomings.

Delivery of Basic Services

0 Basic service delivery is progressively becoming more integrated with local operations, more focused on local priorities, and more efficient in terms of both services and costs.

0 There is a two-part trend in the area of financing of devolved services:

• There is greater revenue support for devolved services, and

• LGUs are more willing to look at issues such as privatization, fee for service, codelivery of services and other innovations as a means to cover costs.

,o More creative support service modes are being invented and developed as a result of decentralization.

0 Where devolved personnel oppose devolution, they do so because of concerns about career security and advancement, not because they feel that LGUs are incapable of delivering services.

0 LGUs note the constraint that "LGUs have the people, but NGAs still have the money."

Participation

0 The NGO accreditation process seems to be substantially complete; both NGOs and government officials now focus on how the participation mechanisms actually work.

0 A parallel trend is that some special bodies appear to be more effective than others so that there is a trend toward differentiation in effectiveness associated with the mission of particular special bodies.

0 In many areas, ad hoc mechanisms of participation are growing and are more influential than mandated mechanisms.

Intergovernmental Relations

0 LGU to LGU collaborations at all levels are becoming much more comrnon as local officials seek ways to deliver services and address issues that cannot be successfully accomplished without greater cooperation among jurisdictions.

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Exec'utlve Summary. 6th Rapid Field Appraisal of Decentralization

0 Positive gains in local-national intergovernmental relations are being reported in most regions.

0 Another trend is that the relationship between devolved NGA personnel and organic LGU staff is perc!:lived to be improving and generally harmonious.

Legislative Activity

0 There is general agreement in all regions that the legislative branch is both more independent and more capable of correlating legislation to a commonly agreed development agenda.

0 In addition, executive-legislative relations are improving toward a complementary of function based on an outward focus on development need, rather than an inward focus on political expedient.

MAJOR RECOMMENDATIONS

1. The Oversight Committee, in conjunction with NEDA and DBM, should continue to work on the mechanisms required for assessing and allocating shares of national wealth to LGUs.

2. The problem of non-functioning Local Special Bodies snould be addressed by developing methods and techniques to help these groups function and: by appointing secretariats to help manage their activities.

3. The Leagues of Provinces, of. Cities, of Municipalities, and the Liga ng mga Barangay should undertake a sustained and organized effort to lobby for:

• correction of the IRA formula;

• reduction in unfunded mandates;

• transparency and accountability in the budget process of NGAs which have devolved substantial functions to LGUs; and

• Congressional review of function versus funding as it pertains to the rapid rise of devolved agency budgets.

4. Radically rectify the real property tax system with a view toward simplification, transparency and enforcement of uniform tax obligations. LGUs should be given wide latitude to experiment with new methods while keeping DOF informed of such efforts.

5. Amend the provisions in the Local Government Code classifying positions as mandatory or optional, and leave this decision to LGUs to determine in light of local needs and priorities.

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SYNOPSIS OF FINDINGS

SIXTH RAPID FIELD APPRAISAL OF DECENTRALIZATION

BACKGROUND

The Governance and Local Democracy Project (GOLD)1 has undertaken this sixth in the series of Rapid Field Appraisals (RFAs). The RFA approach was pioneered under the USAIDassisted Local Development Assistance Program (LDAP). Four appraisals were undertaken during LDAP's 1991-1994 project life and one additional appraisal was accomplished under the GOLD project. • Rapid Field Appraisals have played a unique role in monitoring decentralization reforms in the Philippines. The Implementation Teams for both LDAP and GOLD have been specifically tasked with tracking tf\e pace and direction of the government's decentralization agenda. This. effort provides timely feedback on the policy, administrative, and political adjustments needed to keep the decentralization process responsive to the vision and goals set forth in the Constitution and its subsequent enabling legislation.

Among all Rapid Field Appraisals, the Sixth RFA is the most extensive. All regions except Region VIII were appraised.2 The Autonomous Region of Muslim Mindanao was included for the first time. National Government Agencies were also contacted in order to get a sense of their perspectives as they participate in the decentralization process.3

Rapid Field Appraisals have always been chiefly concerned with the actual experience of decentralized governance at the local level. Consultants familiar with a region undertake a rapid qualitative study based on interviews with local government officials, national government agency personnel, and respondents from the private sector and · non-government · organizations. The results of the regional studies are then brought together in a synthesis seminar, . on the basis of which this Synopsis is prepared.4

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Summarizing Past RFAs

July 1992 saw local government officials adopting a "wait and see" attitude.

January 1993 found local government officials beginning to move forward on Code implementation, with national government agencies responding.

September 1993 had problems in the devolution of personnel being solved, and the Internal Revenue Allotment system beginning to function.

June 1994 demonstrated increased momentum on the part of LGUs as they reaped fruits of experimentation.

June 1995 found increased local resource · mobilization, and improved service delivery. However, National Government agencies, had not pro-actively filled new roles after devolution was accomplished.

Synopsis of Findings- 6th Rapid Field Appraisal of Decentralization

The 6TH RFA: MEGA TRENDS

The 6th Rapid Field Appraisal featured a remarkable similarity of consultants' findings within topics, across regions and among the same levels and types of LGUs. To capture this similarity, the concept of "megatrends" is being introduced in this 6th RFA, as follows:

' Diffusion of The Decentralization Process-a significant diffusion of the decentralization process to lower levels of LGUs and to a wider arena of impact.

Creative and determined exercise of greater authorities, powers and responsibilities is rapidly diffusing beyond the more "sophisticated" LGUs to all levels and classes of local governments. There is also diffusion beyond the executive and department head levels to legislators, staff, non-governmental sectors and the citizenry. There is, in other words, a prevailing sense that decentralized governance is beginning to be woven into the fabric of civil society. LGUs, NGOs, the private for-profrt sector and citizens in general appear to have a much greater appreciation that decentralization has thrust much of the opportunity and responsibility for local development back to local levels.

Deepening of Decentralized Operations and Innovations-a conspicuous deepening of decentralized operations and innovations.

:rhis megatrend means that LGUs' efforts to take charge of delivering basic .services are no longer tentative. Local officials and devolved personnel have the feeling that decentralization is "settling in" and "becoming localized". Across a wide spectrum of regions and types of LGUs there is a sense that decentralization and local autonomy are "here to stay" or "a way of life". Most importantly, most local respondents clearly prefer a decentralized system of managing

.focal development to a centralized one.

Shift ir) LGU Management Emphasis-an appreciable shift in LGU management emphasis from internal operations and general services, toward external operations, development management and service delivery.

Many LGUs are creatively struggling with profound changes in the nature and purpose of their operations. They are devising organizational and operational solutions to help these changes happen and are, in the process, becoming more adept at finding creative, focused solutions to local problems. They are not deferential to the patterns set by central government. Local governments are innovating a variety of solutions to very complex problems, in spite of justifiable concerns over inequities in the distribution of financial resources.

Growing Militancy for Greater Local Autonomy-a growing militancy for better performance and greater autonomy.

After four years of Code implementation, LGUs have gained some experience in the exercise of devolved functions. They have, as a consequence, seen "inside" the operations of a wide variety of services including hospitals, rural health units, agricultural extension offices, agricultural research and technical services, social welfare services, environmental management and policy. Previously, the authority and management for these had been virtually monopolized by central agencies. While LGUs know that they have much to learn, they

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have also been disappointed to discover the limitations of the systems and personnel that they inherited. Thus, there is a growing militancy to oblaifi better performance by overhauling outdated systems and moribund programs. At the same time, there is a desire to get even greater powers so as to address issues that are still not fully under their control, such as environmental management.

The foregoing megatrends provide a broad sense of where the decentralization process is moving at the moment. ·Below, topical areas are ex~mined in more detail and specific trends and constraints for each are provided.

LOCAL REVENUE and RESOURCE MOBILIZATION

Overview

Past RFAs have tracked the impact of the Internal Revenue Allotment (IRA) on LGU finances. Despite ongoing disputes over the true costs of devolved functions and the formula for distribution of national revenues, LGUs are now automatically receiving their IRA share. As a result, there . are currently substantial alterations in the management of local government throughout the archipelago.

While many local executives habitually complain that the IRA is insufficient to finance the true costs of devolution and should be increased, in no case have any RFAs ever found that local officials would prefer to return to the pre,Code dependency on national allocation of resources to local government. The 6th RFA is no different, but also goes beyond the previous RFAs in observing that local executives are now more militant in their desire for greater fiscal devolution. There is a remarkable clarity on the part of local officials, staff, NGO representatives and eveR devolved personnel that the devolution of financial resources and authority for their expenditure is of the utmostimportance to long-term development.

It can be stated categorically that LGUs are widely cognizant of, and serious about, the challenges of generating more local revenue to supplement the basic resources provided by the IRA. Several trends bear witness to this shift in perspective.

Trends

First, while the IRA remains the main source of revenue for all levels and types of LGUs, there is a continued trend towards more creative and expansive methods of revenue generation and resource management.

The IRA's proportion to total tax and non"tax revenues is taking different shape according to LGU type. While most regions reported that the IRA percentage share in total revenues has remained relatively constant since the lastRFA, a number of cities and provinces report a slight decline in the.IRA's share of..total revenue since 1993. This suggests that LGUs are improving local revenue generation, albeit slowly. In the few regions in which consultants had access to reliable comparative data, the trend over the last five years has been a rather steady rise in locio!lly-generated revenues. This rise did not, of course,· keep pace with the ascent of IRA share to its current level of 40% of internal revenue collections.

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Synopsis of Findings· 6th Rapid Field Appraisal of Decentralization

Since the IRA percentage share of total revenues has not significantly increased, and in some instances has decreased, LGUs are doing · more than just maintaining the status quo to generate revenues from non-IRA sources. There are many examples of how specific LGUs have improved local revenue mobilization. These factors, combined with the effects of other trends, suggest that local revenue generation is a priority among local governments, and that the notion that LGUs "are satisfied with only the IRA" will not prevail over the long term. In most regions LGUs report that revenues from local sources (e.g., real property tax, local taxes, licensing and fees, etc.) have been steadily increasing, although not dramatically. LGUs are more willing to exert their revenue generating powers and are now implementing revised and updated revenue schedules that were passed in the early years of the Code. In many instances local tax codes were revised as far back as 1992193, but implemented more recently. New revenue-generating measures are widespread, with every region reporting many creative efforts to both improve collections and tap new revenue sources.·

A second general trend is that LGUs at a// levels have become much more aggressive in their efforts to sharpen fiscal management. There is widespread dissatisfaction with the administrative and management systems inherited from pre-Code days in which much of LGU management was focused on meeting regulatory requirements promulgated by national agencies. LGUs now have greater flexibility and this is showing a positive impact on fiscal management. Changing attitudes toward the role of LGUs in service delivery are showing a related effect in that LGUs are increasingly charging fees for services and scrutinizing the budgets of various operations.

While tax and non-tax revenues are improving, there remains for many LGUs the major challenge of financing larger scale infrastructure and ambitious socio-economic development projects. A number of features of LGUs' response to this challenge were noted:

• There is definitely a rise in loans being taken from government finance institutions (GFis). These institutions are aggressively marketing their products to LGUs. LGUs are swiftly responding, most frequently taking loans to finance public buildings, markets, infrastructure rehabilitation and heavy equipment to construct and maintain roads. However, loans tend to be in the "small" to "medium" range (e.g., 2.5 to 25 million pesos). It was noted that both GFis and LGUs are reluctant to move into very large loans. Government-sponsored loans are also extraordinarily expensive. Some LGUs are reported to be paying over 20% interest; hardly a rate which could be construed to be beneficial to LGUs.

• A further illustration of improved revenue management is a significant increase in LGUs demonstrating that they can finance and manage construction projects more cheaply than can national government agencies. Per kilometer costs of roads and per square meter construction of school or public buildings are routinely 25%-30% less expensive than those done by national government.

• There is no significant trend toward credit finance schemes such as bond flotation or joint ventures with the private sector, but there is a much greater awareness that such approaches are needed. Notably, many LGUs appear to be considering Build-OperateTransfer (BOT) and Build-Operate-Own (BOO) offerings for a wide variety of projects--from public markets, to roads, to health services-but few of these have been moved into the

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feasibility study stage, let alone the bidding stage. Thus, while BOT schemes seem to be much discussed, they are still rarely actualized. ''i

Local Officials. had mixed views about the use of congressional Countrywide Development Funds (CDF). On the one hand, LGUs still tap this resource as much as possible, especially to augment funds that they have themselves raised for various projects (almost invariably, high profile infrastructure and/or livelihood projects). On .the other hand, there appears a growing awareness among LGUs that the CDF is a mixed blessing, should not be relied upon in the long term, and in some respects undermines local initiative and rationalized development programming.

Constraints

Two major problems constrain local governments' access to and management of increased revenues.

First, calculating and allocating LGUs' share of the national wealth from natural resources extracted within their jurisdiction remains problematic. While a small positive trend was observed-that some LGUs appear to be getting some share sometimes-overall, the local executives and others are uniformly critical of national government's handling of this issue. There is near-unanimous agreement that shares in national wealth is unpredictable and unreliable. LGUs feel that the bureaucracy has been singularly unresponsive to requests to address this problem. LGUs believe that this revenue source can add considerably to LGU coffers, potentially running into the millions of pesos in some LGUs, so it is a significant consideration.

Indeed, the vast majority of eligible LGUs receive no share and have no reliable means of accessing their share of national wealth. Many LGUs report that the Department of Budget and Management (DBM) requires them to calculate their own shares despite the fact that LGUs neither collect, nor administer the funds generated from this source. The Department of Environment and Natural Resources (DENR) and DBM are believe to hold the data needed to accomplish such calculations .. LGUs report that such data is shared reluctantly or not at all, and that in any event the mechanics of obtaining shares in national wealth are not clear. Even where aggressive LGUs have attempted to comply with this peculiar requirement--that they derive their own share estimate--neither DBM nor DENR have any reliable way to verify the LGUs' claims, so funds are not forthcoming because of bureaucratic disagreements over the correct amount. Among LGUs which have potentially large revenues from this source there is the widespread and somewhat conspiratorial belief that DBM and DENR are intentionally keeping the funds from local government by bureaucratic design. This problem has persisted since the early RFAs and has shown no sign of being resolved.

A second constraint is that the system for assessing and collecting real property tax is excessively complex, such that efforts to improve performance by conventional methods cannot overcome the system's inherent shortconlings .. Despite .various. efforts on the part of LGUs to increase collections through tax campaigns and the like, for the vast majority of LGUs real property tax is, at best, marginally productive and, at worst, a negative drain on meager resources. Expenses frequently exceed collections and contrived targets tend to disguise poor performance.

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Synopsis of Findings~ 6th Rapid Field Appraisal of Decentralization

Currently, LGUs are intent on determining ways to· improve collections, and many of their efforts are successful within the limited scope for improvement that the current system allows. Many local executives are aware of the serious flaws in the system and are becoming more assertive in exercising control and direction over assessors and treasurers who have heretofore had little local accountability.

DELIVERY OF BASIC SERVICES

Overview

As past RFAs have highlighted, the transition from a top-down, centralized service delivery system to an area-based, decentralized mode of operation will likely take many years before it is fully operational. In many respects, the essence of local autonomy is found in the .qevolution to local governments of basic services such as health, agricultural extension and sociai welfare. Managing these functions cannot be learned overnight and is not made easier by the resistance of central agencies to aggressively implement the Code, a conspicuous observation of every previous RFA. Deeply ingrained habits of dependency and command-control prevail for many of the devolved personnel and local officials alike. There is also a disparity betWeen where the personnel are and where the money is. Nonetheless, despite these hurdles the decentralization and devolution of basic services are working. The challenge of local service .delivery is tapping,.,the very best creativity of people across the nation and there is every evidence that delivery cean and will be effective over the long term.

Three broad observations applicable to all devolved services are apparent:

1. Basic service delivery is progressively becoming more integrated with local operations, more focused on local priorities, and more efficient in terms of both services and costs. LGUs continue to demonstrate increased competence and innovation in managing service delivery. They have begun to institutionalize functions within administrative and staffing designs. Respondents generally assert increasing localization of devolved staff, .. l;l kind of "settling in" or "permanency" that has not previously been observed. The effect on' delivery of basic services has been favorable, and facilities and services are improving, p(iiticularly in higher income LGUs. Frequently cited were examples of faster action, tailoring of services to local needs and wider latitude and authority given to technical personnel.

2. There is a two-part trend in the area of financing of devolved services. There is greater revenue support for devolved services. There are numerous instances of LGUs increasing the budgets of a particular function in order either to improve it or to emphasize it in the context of a larger development plan. While this sometimes means a reduction in another service, it is nonetheless evident that LGUs are making and acting on choices regarding what services are most important to their constituents.

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The second part of the trend· in financing services concerns the enduring question of how financing of service delivery should be accomplished. LGUs appear much more willing to took at issues such as privatization, fee for service, co-delivery of services and other innovations as a means to cover costs. This trend may have a profound influence on both the character and long~term sustainability of services. While national agencies have

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SynopSis of Findings-: 6th Rapid Field Appraisal of Decentrallzatlo~

historically focused on higher-order technical innovations driven by the availability of external funding, LGUs terid to be much more costiconscious. As a result, LGUs are more focused on what services are essential and desired by their constituents.

3. Both local executives and devolved personnel frequently observe that more creative support service modes are being discovered and developed as a result of decentralization. In many instances, devolved personnel attested to the improvements in their ability to develop and pursue more relevant projects because they were closer to the decision making and could define activities in relation to local need. This is especially true of health and social welfare personnel, although some agricultural personnel also found themselves in more innovative modes. LGUs are showing a heightened awareness of the role of basic services and they are seeking a greater role in defining how those services are tailored.

Lastly, an emerging trend found in the last several RFAs was firmly confirmed by the 6th RFA: where devolved persomief oppose devolution, they do so because of concerns about career security and advancement, not because they believe that LGUs are incapable of delivering services.

Trends and Constraints

On Health

Local resources allocated for health remain substantial and there appears to be no diminution in the willingness of LGUs to allocate funds for health services or to take on the health mandate. Richer LGUs are definitely showing leadership in delivering health services and, overall, services are improving, despite grumbling by devolved health workers. The sense that health service delivery systems are beginning to "settle in" is widely observed, a welcome new trend that replaces previous RFA observations that major personnel and financial dysfunctions distracted the process of localization.

There is significant improvement in timely procurement of medicines and supplies. This has been a major and near universal problem noted in past RFAs. Local government officials emphasize that various constraints arising from outdated Commission on Audit (COA) regulations and poor local procurement management dangerously slowed the purchase of medicines and supplies. Local executives were universally perturbed with the common predevolution situation of expired medicines which they attribute to clumsy, centralized management and graft. The situation has significantly improved in all regions, although it is not completely solved. Medicines are being purchased on a more timely basis and when purchased, they are not near or past their expiration date. Perhaps it is important to observe that the pre-Code "expired medicines" phenomenon is so frequently noted at local levels that its demis.e has in some localities become symbolic of why decentralization works!

Funding shortfalls endure as a major concern. As a result, both local executives and. health workers have mixed feelings aboutwhether.to.retain.health.services. However,. it is commonly observed that if inequities in the IRA were rectified and the costs of devolved functions were suitably funded, there would be minimal pressure from local governments to return health services to central government. These pressures, which appear to be abating, are attributable to the problem of equitable funding and how inequities affect service delivery; very little

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SynopsiS of Findings- 6th Rapid Field Appraisal of Decentralization

appears to arise from a sense that the services cannot be managed properly by local authorities.

This is an important observation which should help clarity the debate about whether health services can be adequately accomplished under a devolved system. Neither devolved nor elected personnel generally believe that health services are delivered better by a centralized set-up, and many agree that there is potential for better delivery with a decentralized arrangement. The issue is proper restructuring of resources available to LGUs so that they are adequate to pay for health costs. This problem is a deficiency in the Code and one for which local governments cannot be faulted. There is widespread support for Congressional bills that would allocate the cost of devolved functions to LGUs prior to disbursement of the IRA.

Hospital operations are improving, but not drainatical/y so. In a number of locales the problems associated with decentralization have actually spurred greater creativity in hospital o!),~rations. Notably, devolved personnel are reporting that for the first time they are required plail'and cost out their budgets, something they were not required to do with any realistic rigor under the old system. Better cash management, fee for service, graduated fee structures, reduction in purchases of unneeded medicines, and other changes are being applied to help LGUs shoulder the cost of hospital care. Through constant negotiations among actors in the purchasing process, the number of signatories required has been reduced by one third to one half in many areas. Private sector participation is also increasing.

Rural Health Units are stable, but the

· LGU Initiatives to improve health care

Nueva Vizcaya established a separate procurement office to facilitate processing and delivery of medicines and supplies

Santiago City has enlisted the support of private doctors to treat certain classes of indigents.

Tuguegarao built a 20 bed hospital with a combination of local funds and private donations.

lower class LGUs are much harder .. pressed to maintain health standards. Health standards have always been problematic' in these LGUs and there is little evidence that returning services to centralized control will alter what respondents see as an endemic problem of remote and less wealthy rural areas. The NGO community has also become more important in assuring quality health care at the municipal level, especially in far-flung areas.

On Agriculture

Past RFAs have reported trends in the agricultural sector that were mixed, tending toward what might be termed "uninspired" change. Pre-Code delivery of agricultural extension services was viewed by locals as too generic, poorly managed and not adaptable to local realities. It became evident in early RFAs that devolved agricultural personnel were having great difficulty figuring out what to do when challenged to come up with priority programs for their LGUs. It appears that this service, perhaps more than any other, has been so highly centralized over the years that its staff is extremely unaccustomed to independent operations such as the kind associated

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Synopsis of Findings ~ 6th Rapid Field Appraisal of Decentralization

with decentralization. As a consequence, the performance of devolved extension personnel has not generally been meeting the expectations of loc,al executives.

There is, however, a positive new trend. The 6th RFA suggests that delivery of devolved agricultural services is improving and the orientation of devolved agricultural personnel has been slowly, but perceptibly, shifting from national to locally driven priorities.

With respect to the agricultural services themselves; while there remains excessive reliance on nationally initiated programs, there is nonetheless an increase in adjusting these programs to local needs. There are examples in all regions and LGU levels of new multi-sectoral planning groups being organized with the express objective of bettering agricultural performance. LGU planning for resource allocations is incorporating agricultural priorities · and attempting to harness and redirect funds still available from the Department of Agriculture (DA). Where local agricultural sector goals are clearly defined, LGUs are providing resources and/or counter~part funding. Local executives frequently express a keen desire to accelerate agricultural . . productivity and considerable frustration in ascertaining how to do so given the orientation of devolved personnel. In short, we have a process of a slow and somewhat painful adjustment of an agricultural extension delivery system which has not been accustomed to innovation, autonomy and strong accountability.

The most remarkable trend that has been observed is the growing positive outlook on devolution among agricultural personnel. Extension agents are being given more leeway to adjust programs to local circumstance. Programs are more "area specific", rather than prepackaged. Pre-implementation needs assessments, which focus more on need than· on promulgating technological advances, are frequent.

With greater supervision from local executives comes greater interest on the part of those executives. This is in tum leading to more priority given to agriculture in terms of funding, transport and communications. Another notable result of devolution is that agricultural officers have more ·time for field work because they have been largely released from what most considered to be excessive and unproductive reporl-writing duties. There is a significant upsurge in motivation among agricultural-personnel where there are supportive local executives with the means and intention to improve agricultural productivity.

LGUs frequently cite the DA, along with the Department of Health (DOH), as examples of one of the most glaring problem with devolution, namely: "LGUs have the people, but NGAs still have the money." Local officials are keenly aware that DA has continued to increase its budget dramatically since the devolution of most of its field personnel.

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More importantly, local officials are perplexed that DA continues to conceptualize, fund and implement national agricultural extensionbased programs, seemingly without cognizance of the fact that extension is now the responsibility of local government. At the very least, LGUs point to the obvious irony of DA "hiring back" its own personnel from LGUs to run what is essentially the kind of prepackaged, centrally-managed and centrallyfunded program that the Local Government Code sought to halt.

On Social Welfare

The devolution of social welfare services has been in most respects the "success story" of decentralization as reported in previous RFAs.


Gintong Ani: DA-LGU Partnership?

Most frequently cited as a program conceptualized for LGUs by the DA is the "Gintong Ani" Program, an agricultural production program with admirable goals (which LGUs tend to support). But many local officials also feel that the effect of this program has been to restrict the impetus for local initiative towards agricultural development. It is considered by some as a dangerous precedent: it pushes a national program at the expense of local resources and tends to treat LGUs as junior partners which are "assigned" responsibilities by the DA.

The Department of Social Welfare and Development (DSWD) willingly and aggressively managed the devolution of its personnel. DSWD personnel were typically well respected by local executives and readily absorbed into local organizational structures. Overall, the change.over process has gone well. Services continue to be delivered without too many difficulties. This trend holds true for the 6th RFA.

Within the context of this very positive overall trend, three emerging trends were striking:

1. Social welfare is receiving increased financial support from LGUs due to greater understanding of the needs of beneficiaries resulting from closer supeNisory and planning support from chief executives. In virtually all regions it was reported that funds for social services are easier to access. The planning/budgeting process is niore transparent. Social welfare officers have, in many instances, been upgraded and LGUs have created functional offices with additional staff. LGUs are now cognizant of the necessity of maintainfiig stable social welfare support structures and are funding efforts to achieve these.

2. The combination of more rapid access to funds and quick decision-making, coupled with more targeted inteNentions, is widely reported to have improved the impact of social welfare programs. LGUs have tended to follow the same set of programs and projects as were present prior to devolution, but that these are more effective in that they enjoy rapid response and multi-sectoral support. It is also notable that many LGUs report that they continue to receive regular technical and even financial assistance from DSWD and that the central agency has adjusted well to "putting the LGU in charge•. DSWD is providing monitoring and feedback to their devolved personnel which is in turn used in the planning/budgeting process to the overall advantage of social services.

3. LGUs are expanding their social seNice "nets" to add programs co-financed and supported by NGO and private sector institutions with particular capabilities in addressing sectoral or special needs. Activities that were previously seen to be sector-oriented, such as supply of potable water, are now viewed as multi-sectoral efforts driven by social welfare values. Thus, in addition to the standard services for indigents, pre-school children, youth and the

10 ID GOVERNANCE AND LOCAL DEMOCRACY PROJECT /GOLD

Synopsis of Findings • 6th Rapid Field Appraisal of Decentralization

elderly, LGUs are innovating with programs co-funded and co-managed by the social welfare personnel and NGOs.

Three relatively minor constraints to what appears to be a steadily improving situation were observed. First, there continue to be overlaps and gaps in the social services sector which need to be rationalized by means of a development agenda, rather than by means of just responding to circumstance. Second, lower class municipalities tend to have greater numbers of indigent clients as a portion of their population, so funds are stretched to the limit. Third, political considerations adversely intrude on social welfare issues. The extension of services to one group is seen as partisan favoritism and the rejection of ineligible clients is sometimes countermanded by executives seeking to do political favors.

On Environment

Environmental. management appears to offer-the greatest new challenge to LGUs. In past RFAs environmental management issues were typified as important, but not acute, concerns of LGUs. It is now observed that several trends appear to be driving environmental management issues to the forefront of LGU interests.

First, there is considerable and rapidly growing anxiety in all levels and types of LGUs that environmental management challenges cannot be adequately addressed by DENR. This is driven by an acute understanding of the critical levels of natural resource degradation in their respective areas. This understanding often results from NGOs, media and the church aggressively exposing local and national environmental problems. The 6th RFA found this increased environmental awareness to be a rapidly accelerating positive trend in most LGUs.

Second, there is what may aptly be described as a kind of militancy on the part of LGUs to exercise greater authority over environmental problems. In the past, LGUs tended to view environmental management as the sole concern and prerogative of DENR. Now, major environmental disasters, such as the Ormoc tragedy or the Marinduque mining incident, are viewed by many LGUs as events that could easily happen in their own communities unless they themselves do something about the.situation .. -

Third, while LGUs remain technically unsophisticated with respect to many environmental management oracffces, they are increasingly sophisticated with respect to environmental management IJS}iicy. There is, for instance, near universal dissatisfaction with the conflicting goals and bureaucratization of environmental policy. LGUs, especially provinces, are becoming more adept at analyzing policies in terms of their relevance to local realities and the likelihood that policies can achieve desired goals. For instance, LGUs are particularly critical of the manner in which DENR has proclaimed watersheds under the NIPAS (National Integrated Protected Area System) without due consultation with LGUs and citizens resident in those areas. LGUs recognize that the de facto access to such areas negates the effect ofthe policy while simultaneously limiting their ability to exercise either control or community solutions.

Lastly, throughout the nation there is a rapid rise in ad hoc, multi-sectoral groups whose objective is to focus on some aspect of environmental management. Earlier cited as a "megatrend" is the tendency of LGUs to set up ad hoc bodies to address issues which cannot apparently be addressed through formal channels and established local special bodies. This is nowhere more evident than in the environmental area. One trend associated with the rise of

i\l) GOVERNANCE AND LOCAL DEMOCRACY PROJECT /GOLD 11


such groups is the increasing pressure exerted on DENR to "give way" to local management of specific environmental problems. Such management is most frequently by NGO-LGU partnerships with DENR representation, but not DENR control. This phenomenon reflects increasing militancy at the local level and a general unwillingness to relinquish total control over environmental management to a central agency with considerable internal problems and insufficient staff at the local level.

General Observations on Services

In addition to the above observations on specific services, certain key findings relevant to all services are observed:

• Local officials, staff and even NGO representatives are increasingly questioning the unchecked rise in the budgets of agencies which have devolved significant functipns and personnel to local government. Respondents noted that over the last four years" tHere has been a steady swelling of the budgets of devolved agencies even though they in principle no longer manage significant portions of field operations. LGUs feel that some agencies have gotten away with devolving functions and major personnel costs while continuing to receive budgetary allocations from Congress as if they were still in charge of delivering the very services that were devolved. This emerging issue was emphasized as going beyond the problem of the cost of devolved functions to renew critical questions about "imperial Manila's" apparent inability to absorb the profound implications of a truly decentralized approach to development and governance.

• There is considerable confusion over the difference and relationship between employee dissatisfaction and poor service delivery. Dissatisfaction with devolution on the part of devolved personnel tends to be based on issues of salary, career development and other terms of employment, not on the problems in service delivery. Each successive RFA has seen a steady decrease in the complaints of devolved personnel that LGUs cannot technically manage the service and an increase in the sense that services are becoming more relevant to local needs under a decentralized system. Likewise, local executives fret over their ability to pay the costs, not over their ability to manage the functions devolved to them. In view of this, it is absolutely essential that observers and critics of decentralization understand the implications of this simple, nearly universal observation: at the local level most people appear to believe that LGUs can deliver more relevant services if the funding is adequate.

PARTICIPATION

Earlier appraisals have identified a positive trend toward more participation in local governance. These assessments centered on the general trend toward more NGOs being accredited and subsequently incorporated into special bodies. Likewise, there were broad trends reported suggesting less interference by executives in NGO representation and in working with NGOs in general. While there were localities in which focal executives and NGOs Have difficulties working together, this occurs much less frequently than conventional wisdom would have it-there has been much less of the "trad-pof" behavior than many expected. These trends continue with several important additional factors.

12 .t\l) GOVERNANCE AND LOCAL DEMOC~cY PROJEcr/GQLQ

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...


First, the NGO accreditation process seems to be substantially complete and both NGOs and government officials focus on,,how the participation 17Je.9hanisms actually work. Most local special bodies have been constituted with at least minimum, and often greater, percentage of NGO representation incorporated into their structure. Consultants report little "new" activity in the area of NGOs seeking or LGUs accrediting multi-sectoral representatives. Meanwhile, LGUs and NGOs equally object to the poor performance of Local Special Bodies, especially Local Development Councils. Curiously enough, both sectors object for the same reason: neither feel that LDCs are a very effective way to plan the development agenda and coordinate strategic priorities. Yet neither suggestthat citizens' participation should be abolished.

Second, a parallel trend is that some special bodies appear to be more effective than others so that there is a trend toward differentiation in effectiveness associated with the mission of particular special bodies. Local Peace and Order Councils, Pre-qualification Bids and Awards Committees, Local School Boards and Local Health Boards all tend to be more effective than Local Development Councils. Still, there appear to be no uniform performance standards and likewise, no driving aspiration that all LSBs be uniformly active--much depends on local circumstance. This trend may even be taken to be a consequence of decentralization itself, inasmuch as local priorities are being extended over the Code's somewhat generic formula for enabling multi-sectoral participation.

Third, in many areas, ad hoc mechanisms of participation are growing and more influential than mandated mechanisms. Various innovative means of participation are functioning effectively to compliment government operations. There is a significant growth in creative, alternative mechanisms of participation; this may well be the most important continuing trend in public participation that has emerged over the last one to two years. Some mechanisms are innovations of LGUs while others are devised by the NGO community with the knowledge and full support of local authorities. The single common denominator is that non-mandated groups are organized around substantive issues, have a specific mission and enjoy committed engagement by all participating sectors. Relating this trend to the considerable unhappiness with some mandated special bodies (especially LDCs), it seems that the absence of clear mission and focused purpose constrict

Ad Hoc Participatory Venues

Cebu Uniting for Sustainable Water which brings together all sectors for discussion and action on this pressing concern

Kaugmaran (Development) Foundation was organized in Zamboanga Norte to assist in local governance and helping the people

A Council on Boarding Houses for Students and Transients in Iloilo City

people's participation in mandated special bodies. On the other hand, the identification of common issues and common interests drive the growth of non-mandated bodies. This trend bears observation during upcoming RFAs.

AD GOVERNANCE ANO LOCAL DEMOCRACY PROJECT /GOLD 13

Synopsis of Findings· 6th Rapid Field Appraisal of Decentralfzatlon

INTERGOVERNMENTAL RELATIONS and LEGISLATIVE ACTIVITY

Overview

There is evidence that intergovernmental relations - heretofore an area of relatively uninspired performance - is now beginning to improve. This is especially true for local-to-local intergovernmental relations and within this grouping, more markedly true of municipal-tomunicipal and municipal-to-provincial relations. Innovative memoranda of agreements and collaborative programs are found more frequently at these levels than at the local-to-national level.

Relations between local and national government agencies are also improving in a number of regions, but this is almost invariably a function of enlightened field personnel and aggressive LGU negotiation, rather than a function of systemic agency policy and performance if\c:7ntives.

Local- Local Intergovernmental Relations


LGU to LGU collaborations at all levels are becoming much more common as local officials seek ways to deliver•seNices and address issues that cannot be successfully accomplished •Without greater cooperation among jurisdictions.

·There are notable examples throughout the country of both formal and informal arrangements ·to address key issues. There is a wide range of activities emerging under local-to-local agreements, such as:

• community-based, LGU-directed environmental protection and natural resource management projects. There is a distinct upsurge in local government units joining together to try to exert some influence over environmental management issues, often in· spite of bureaucratic entanglements with DENR; ·'"

• investment promotion and information data-gathering activities;

• resolution of boundary disputes, enforcement of illegal fishing and cattle rustling controls;

• joint tax mapping and tax collection campaigns;

• integrated water supply projects and solid waste disposal systems;

• development of the rough equivalent of "regional councils" to address cross-jurisdictional concerns, especially urban growth problems;

• establishment of primary hospitals and schools to serve multiple jurisdictions,

• metro/provincial cooperation in planning road networks and communications up-grading projects;

14 1\{) GOVERNANCE AND LOCAL DEMOC~CY PROJECT /GOLD

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Synopsis ·of Findings· 6th Rapid Field Appraisal of Decentralization

• use of MOAs, MOUs, joint covenants, position papers, intergovernmental executive committees and other mechanisms to guide and/or formalize agreements. Notably, there appears to be a slight but discernible increase in the participation of NGAs as signatories to such agreements.

Few constraints to this emerging trend are evident. We expect to see rapid growth in intergovernmental agreements of all types as LGUs become more cognizant of the compounding effect of joint undertakings and more adept at exerting influence over national policies implemented at the local level.

Local - National Intergovernmental Relations


Positive gainsin local-national intergovernmental relations are being reported in most regions. The appraisal would, with caution, posit that there is a trend toward greater cooperation and collaboration between LGUs and regional offices of NGAs. This is an emerging trend that has not been evident in previous RFAs. Various LGUs now perceive NGA regional offices as more supportive of local initiatives and respectful of local authorities. This is especially evident in provinces where local executives have taken the initiative of defining a role for NGAs in the scheme of local development strategies. Where LGUs simply passively await the involvement of NGAs they tend to find that NGAs continue to press their own programs without consulting LGUs.

This shift is being provoked by two factors. The first is simple necessity. Despite many lingering habits, devolution has become such a permanent fixture on the local scene that there is greater incentive for all parties to seek better working relations than b protect the status quo. A gradual shift in the attitudes of local NGA representatives and parallel movement on the part of LGUs is apparent. NGAs are finding greater incentives to work with LGUs, rather than to entrench to traditional positions of •command-and-control." LGUs appear to be more actively taking the lead role in defining innovative ways to co-opt NGAs into collaborative efforts, particularly as a means to augment resources or fill technical needs without which they cannot expect project success.

Second, devolved national agencies are in the somewhat awkward position of having funding for projects that have little hope of success without LGU cooperation. In some instances, NGA projects require active and sustained collaboration with LGUs because it is the local government which now controls the field personnel needed to deliver national programs (e.g., the DA's Gintong Ani program). Putting aside for the moment the question of whether such collaboration is based on the right approach, it is nonetheless true that circumstances are beginning to force collaboration where previously there was little or none.

Another trend is that the relationship between devolved NGA personnel and organic LGU staff is perceived to be improving and generally harmoniOIJS. This is .despite the lingering .problems with differential pay scales and the difficulties some LGUs encounter in paying extra amounts presumably due devolved workers. All staff appear to be able to set aside pay issues when it comes to work performance.

iR) GOVERNANCE AND LoCAL DEMOCRACY PROJECT/GOLD 15

Synopsis of Findings~ 6th Rapid Field Appraisal of Decentralization

There is little discernible change in the local officials' view of central offices of NGAs (as distinct from regional/local NGA staff). Most regions report that there is lingering resentment and pessimism about NGAs because:

• NGAs continue to set increased budgets for field and extension work even though they have devolved the personnel to accomplish these projects.· LGUs feel that "the NGAs have continued to hold onto the money, but we have \h!il people and the responsibility." LGUs find the NGA argument that their funds have de~reased to be disingenuous, since this is true only for personal services and not for programs and projects, which in some cases have nearly doubled since the implementation of the Code (e.g., DOH);

• NGAs continue to devise programs at the national level for implementation at the local level without consultation or knowledge of local needs and priorities;

• NGAs are not "transparent" with their programming and frequently do not accomplish even the simplest level of consultation with local authorities in the identification, design and implementation of projects within their jurisdictions (thus the clamor for some sort of "penalty• for NGAs that do not consult);

• As a consequence of budget constraints, LGUs tend to feel that they must still "fall in line" with NGA programs even though such programs are in pursuit of NGA targets and have little flexibility to address local concerns.

Legislative Activity

There is general agreement in all regions that the local legislative branch is both more independent and more capable of correlating legislation to a commonly agreed development agenda. The appointment of Vice Governors and Vice Mayors as presiding officers of Sanggunians, and the relatively greater emphasis placed in the Code on legislative involvement, has raised expectations of Sanggunian members about their roles and responsibilities. The Code's requirements for active legislation on a wide variety of issues -from real property valuations to investment codes to tax ordinances -- have increased the Sangunnians' sense of having a legitimate role in defining decentralized governance and setting up institutional mechanisms in support of local priorities.

A second trend is that executive-legislative relations are improving toward a complementary of function based on an outward focus on development need, rather than an inward focus on political expedient. Legislators, even when they are from parties different from their executives, tend to have a "developmental" view of the roles of the executive and legislative branches; thus there is greater attention to a development agenda, rather than on a political one.

16 At) GOVERNANCE AND LOCAL DEMOCRACY PROJECT /GOLD

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SPECIAL NOTES:

1. THE AUTONOMOUS R~GION OF MUSLIM MI~DANAO

Since this is the first RFA to examine decentralization in the context of the Autonomous Region of Muslim Mindanao (ARMM), the report for that region is being highlighted.

The Local GoVernment Code of 1991 (RA 7160) was enacted just a year after organization of the ARMM. Republic Act 7160 included all local government units in ARMM until such time that an ARMM Local Government Code could be enacted by the autonomous government. This was accomplished inApril1993 with the passage of Muslim Mindanao Autonomy Act No. 25, popularly known as the local Government Code of Muslim Mindanao.

While the . 1 !!~_1_t,ocaL_ Government. .Code . aimed to bring power and authority to local governm~nts (i.e., provinces, municipalities and barangays), the Organic Act tended to concentrate, and thus centralize, power in the Region. Hence, in some respects the creation of ARMM has diminished decentralization to provinces and municipalities because the regional government tends to view itself as a "higher form of local government•. Operationally, the Regional Government and its Regional Government Agencies (RGAs) maintain direct control and supervision of devolved functions in ARMM.

The Local Government Code of ARMM was adopted nearly verbatim from RA 7160, with the addition of appropriate references to ARMM. Notably, however, the Declaration of Policy (Section 1) ensured that the prerogatives of the Region were adequately protected and that any devolution of regional power would only occur consistent with the Organic Act.

The following are key features noted in ARMM.5

• Local revenue generation is poor and exceptionally few LGUs, mainly capital towns, raise more than 5% of their income from non-IRA sources; ·

• There is virtually no LGU obtaining-a share of national wealth and there is a general lack of awareness that such an opportunity even exists;

• The Regional Government assumed responsibility for devolved services, those services have not improved and many have deteriorated, and the Regional Government does not have a clear procedure for accounting and fund allocations to Regional Government Agencies;

• The Department of Agriculture's extension services and programs were deemed most dispensable, and local consensus is that farmers get their information from each other, traders or the private sector rather than ARMM agricultural extension agents;

• Local Special Bodies are generally non-functioning or only so in compliance with the law; • There are several intergovernmental alliances that show promise for sustained coordination

of initiatives on particular topics (i.e., Metropolitan Jolo, Tawi-Tawi Alliance of Local Authorities and the Central Mindanao Peace and Development Council).

At) GoVERNANCE ANo LoCAt. DEMOCRACY PROJECT/GOLD 17

SynopsiS of Findings. 6th Rapid Field Appraisal of Decentralization

2. THE NATIONAL GOVERNMENT AGENCIES

As did the 5th RFA, the 6th RFA includes an examination of the plans and initiatives of National Government Agencies with respect to decentralization tinder the 1991 Local Government Code.

Responding to the concern with health funding which repeatedly surfaces at the local level {as evidenced in earlier sections of this report), it was noted that the DOH continues to address this problem in several ways. Support is expressed for the congressional bills which would deduct the cost of devolved functions before distributing IRA shares. There is a (diminishing) Assistance to Local Government Units in the General Appropriations Act. The DOH releases through its regional offices funds to help pay other benefits (such as RATA) to devolved health workers. The Department continues to implement the Comprehensive Health .Care Agreement (CHCA) initiative, in which LGU needs are blended with national priorities, and funds'from both parties pooled. A second initiative is a Joint Circular with COA, DOF, and DILG'rto solve problems of funding requirements of hospitals through an expansion of the fund allotment system. This circular was approved by the Oversight Committee in 1996.

Another agency which had its functions devolved is the DA. The major initiative of the DA is the Gintong Ani program which is viewed as the model for partnership between an LGU and the DA. Production targets (taken from Medium-Term Agricultural Development Plan projects) are to be set by the DA ·.in consultation with LGUs, and transportation allowances and other .incentives will be provided by the DA to local government agricultural personnel. While the DA regards this program as a model, earlier sections of this report mentioned that local officials tend to regard Gintong Ani as restricting local initiatives towards agricultural development.

The devolution of services of the DSWD is often cited in Rapid Field Appraisals as a "success story." At the national level, officials claim to be faithful to the objectives of their post-devolution plan, and to be reconfiguring the Department's role to become a servicer of service providers (i.e., the LGUs). The major problem cited by the Department is the difficulty of feedback reporting from the devolved workers, over whom the Department no longer has control. Still, the DSWD believes that local governments support devolved programs, especially ~programs with high political visibility such as day care centers, supplemental feeding, and livelihood projects.

The DENR, for its part, has moved to shore up local implementation of forestry projects by proposing a memorandum agreement (jointly with the DILG). This proposal would require LGUs to appoint or designate Environment and Natural Resource Officers, and to organize Environment and Natural Resource Councils. This initiative is in response to the perceived low priority afforded forest management by LGUs, and would share with the DILG power to supervise LGUs in the implementation of the devolved environmental functions. Such bodies, however, would not remedy the situation about which LGUs are complaining, where LGUs have the responsibility on paper for some environmental matters, but their actions are subject to control by the DENR.

The Department of Budget and Management has issued DBM Circular 8-96 on the processing of LGU claims to their share in the national wealth, but LGUs are still insisting that more needs to be done on this subject. The Department of Interior and Local Government issued DILG

18 A{) GOVERNANCE AND LOCAL DEMOCRACY PROJECT /GOLD


Circular 216 in late 1995, setting up policies and guidelines on LGUs' use of the 20% Development Fund. LGUs complain that this directive is an infringement of their autonomy.

The Constitutional Commissions--Civil Service and AUditJ"are both developing policies that try to respond to the new situation represented by the Local Government Code. The Civil Service Commission is moving to pilot a system where LGUs have the full power to issue appointments, with the CSC. limited to post-evaluation. The Commission on .Audit is revising the Local Government Auditing Manual, and expects to have this task completed within six months.

RECOMMENDATIONS

In the early years of Code implementation there were a relatively large number of highly targeted recommendations which. needed. actions. from .. y;arious levels of government. As implementation has progressed and as LGU performance improves, critical recommendations are more difficult to pinpoint. Certain problems appear to persist despite regular calls over the last five years for their resolution. Thus, for the 6th RFA we have sought to isolate basic recommendations that may be most important at this juncture. They are:

1. Mechanism for Shares in National Wealth-The provision of shares in national wealth remains uneven and problematic. The Oversight Committee, in conjunction with NEDA and DBM, should continue to work on the mechanisms required for assessing and allocating shares of national wealth to LGUs. The system should be transparent and well publicized to all LGUs.

2. Techniques for Managing Local Special Bodies--The problem of non-functioning Local Special Bodies can be addressed by developing methods and techniques to help these groups function and by appointing Secretariats to help manage their activities. We accordingly recommend that:

• the Leagues of Local Government, take aggressive action to experiment with and disseminate. techniques for managing LSBs, such as Local Development Councils;

• The 5-year review of the code consider amending the Code to modify the composition of Local Development Councils which are too large. Specifically, allow representational participation by barangays in cities and for municipalities in Provinces.

3. League Advocacy--The Leagues should undertake a sustained and organized effort to lobby for:

• correction of the IRA formula. It is now indisputably evident that the current formula for allocation of the IRA Is prejudicial to certain levels and types of LGUs and does not account for the considerable variation in responsibilities among LGUs. Congress should pass . pending legislation that calls for deducting and allocating the costs of devolved functions prior to disbursing the IRA by formula;

• reduction in unfunded mandates and a consultation process for such mandates;

IR) GOVERNANCE AND LOCAL DEMOCRACY PROJECT/GOLD 19

Synopsis of Findings • 6th Rapid Field Appraisal of Decentralization

• transparency and accountability in the budget process of NGAs which have devolved substantial functions to LGUs;

• Congressional review of function versus funding as it pertains to the rapid rise of devolved agency budgets.

4. Real Property Tax System Cost-Effectiveness-Radically rectify the real property tax system with a view toward simplification, transparency and enforcement of uniform tax obligations. LGUs should be given wide latitude to experiment with new methods, of course keeping DOF informed of such efforts.

5. Mandatory Positions-Amend the provisions in the local government code classifying positions as mandatory or optional, and leave this decision to LGUs to determine in light of local needs and priorities;

20 i\l.) GOVERNANCE AND LOCAL DEMOCRACY PROJECT /GOLD


ANNEX: ON METHOD

Rapid Field Appraisals have always focused on the local perspective. This RFA is no exception. We choose consultants who are knowledgeable about their regions. The consultants are asked to observe, investigate and report on local opinions and experiences of the decentralization process. Regional reports are then discussed at a two-day seminar (for the 6th RFA, 15-16 May), which discussions form the basis for the overall "Synthesis."

The RFA approach typically yields very different information than do evaluations that rely on reports to central government from field representatives, or studies which portray local reality by interpreting what should be happening as a result of policies and administrative promulgations emanating from the center.

Topical Areas

Past appraisals have addressed a wide variety of topics which seemed most important at a given point in the decentralization process. Choice of topics have been largely dependent on the most conspicuous and critical dynamics of the moment. Yet all RFAs have in various ways looked at certain consistent themes such as local finance, local service delivery and participation of the NGO sector.

For the 6th RFA we reviewed all past RFAs and then derived the following five topical areas which maintain continuity as well as take cognizance of emerging themes:

1. Local Revenue and Resource Mobilization 2. Local Government Service Delivery 3. Participation 4. Inter-Governmental Relations 5. Local Legislative Activity

The last two -- inter-governmental relations and local legislative activity -- represent areas of emerging importance. Local service delivery as usual received focus and attention; consultants looked at agriculture, environment, health, social welfare, education and other services. Also examined were participation in Local Special Bodies (LSBs) in relation to planning and service delivery issues.

Trends Analysis Approach

The 6th RFA again uses the trends analysis approach. Trends analysis differs from conventional problem analysis in two ways. First, trends analysis seeks to understand and describe what is happening in the dynamic process of decentralization, rather than undertaking a critique based on the premise that decentralization should hypothetically be at a certain point.

Second, while not averse to acknowledging and recording problematic issues, trends analysis is essentially concerned with identifying positive trends as a means to describe in what manner decentralization is moving towards its objective of better governance based on local exercise of greater powers, authorities and responsibilities.

AU GovERNANCE AND LOCAL DEMOCRACY PROJECT /GOLD 21

Synopsis of Findings ~ 6th Rapid Field Appraisal of Decentralization

Thirdly, trends analysis also identifies constraints and link these to the positive processes. In this manner, recommendations are more precisely aimed at those actions which will hasten the forward movement of the process.

List of Consultants

This Synopsis of Findings was prepared by Kenneth H. Ellison, Chief of Party, and Steven Rood, Policy Specialist, on the basis of the 6th Rapid Field Appraisal seminar and individual appraisal papers submitted by the following consultants:

Consultant

Agnes Grace A. Cargamento Carmencita Cochingco Arellano A. Colongon, Jr. Christine M. ldquival Anthony Charlemagne C. Yu Wilfredo Olano Ruth D. Gerochi May Elizabeth Segura-Ybanez Emmanuel Astillero Annabelle G. Cajita Napoleon D. Amoyen Nelia Bonita B. Agbon Emil P. Bolongaita, Jr. Jose T. Deles, Jr. Romualdo B. Gaffud

ENDNOTES

Region

Region I Region II Cordillera Administrative Region Region Ill Region IV Region V Region VI Region VII Region IX Region X Region XI Region XII Caraga Autonomous Region of Muslim Mindanao National Government Agencies

1 The Governance and Local Democracy Project (GOLD), assisted by the United States Agency for International Development, is currently providing support to the Government of the Philippines for its decentralization reforms. This represents a continuing partnership between the two governments to institutionalize the democratic reforms under the post-Marcos Constitution of 1986 and dramatically restructure the character of governance in the Philippines from a centralized to a decentralized system 2 The omission of Region VIII was not intended. At the last minute the contractor was unable to locate a suitable consultant with available time to undertake the Region VIII 6th RFA in the schedule allotted. 3 The 5th Rapid Field Appraisal also included an assessment of National Government Agency experience with devolution and decentralization. 4 More details on Rapid Field Appaisal methodology can be found in the Annex. 5 The report, entitled "An Assessment of Local Governments in the Autonomous Region in Muslim Mindanao (ARMM)', by Jose T. Deles, Jr. is available on request from ARD, Inc. The consultant's report on ARMM is very informative. Those who are interested in this area are encouraged to review that document.

22 1\.U GOVERNANCE AND LOCAL DEMOCRACY PROJECT /GOLD

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Documents

SYNOPSIS OF FINDINGS SIXTH RAPID FIELD APPRAISAL OF