LGUs lack financing to pursue development programs - World Bank

MANILA, Philippines - Majority of the local government units (LGUs) suffer from limited financial resources to pursue development programs and projects, the World Bank (WB) said on its latest portfolio review for the Philippines.

For those that were able to tap financial support domestically or through official development assistance (ODA), the WB noted that lack of coordination between government agencies and LGUs “tend to fragment development planning among neighboring LGUs and in most cases result to each LGU pursuing strategies that needlessly compete with its neighbors.”

The multilateral financial institution said of its 27 active projects in the Philippines as of 2008, 10 support LGUs and communities either through financing, capacity building and technical assistance.

These projects represent $458 million, or a third of its total commitments.

The WB said government should create clusters of LGUs to make them more capable of accessing financing for big projects such as wastewater treatment facilities and sanitary landfill.

“A provincial development strategy could help address key issues in governance, capacity, and coordination and provides an integrated and comprehensive approach to local governance,” WB acting country director Maryse Gautier said in a statement.

Gautier said the provincial development strategy should build on the planning guidelines by the National Economic and Development Authority (NEDA) for the preparation of the provincial physical framework plan as well as DILG’s rationalized planning system (RPS).

For example, 13 LGUs formed the Metro Naga Development Council to share resources and promote Naga City as an investment hub. Bigger and working together, clusters can then access financing programs like that of the Laguna Lake Development Authority for building common landfills. Also, the Department of Health has formed health zones where groups of LGUs share a common catchment area and administration costs.

Among the recommendations discussed also include innovative ways to improve access by LGUs to capacity building, good governance and institutional strengthening programs.

NEDA director for project monitoring Roderick Planta after the review disclosed that government is adopting measures like speeding up project approvals, procurement and relocation in assisted LGUs.

He said the government has decided to frontload 60 percent to 80 percent of its 2009 budget during the first half of the year, as agreed upon under the government’s Economic Resiliency Plan (ERP). – Ted P. Torres