The Asian Development Bank (ADB) has approved a loan of 250 million USD for the Philippines to boost the financing system of local government units (LGUs) in the country, local media reported.
The Manila-based lender said in a statement on Feb. 13 that the reform programme will receive parallel co-financing of 150 million USD from the French Agency for Development.
The ADB said, the money will be used mainly to fund a government-led, comprehensive review of the Local Government Code, enacted in 1991, to boost municipal revenues and assist local economic development and job creation.
The Philippines has taken significant steps to improve the financing system of Local Government Units (LGUs) and to foster transparent and accountable local governance practices.
Reforms should help raise revenues and therefore improve services, Juan Luis Gomez, ADB Southeast Asia senior public management specialist said.
However, the ADB said, despite these efforts, weak local tax bases and flaws in the design of transfers make it hard for poorer local governments to deliver the services their constituencies require. As a result, regional disparities in living standards remain wide.
This, it said, could be efficiently addressed with a review of the Local Government Code.
The reform programme include performance-based mechanisms such as the Performance Challenge Fund, which ties greater access to funding to performance, and the "Bottom-up-Budget," which can improve budget transparency and alignment of national and local development priorities.
The ADB noted that the LGUs represent close to 17 percent of total government expenditures and play a critical role in the provision of basic services like health, education, or housing and community development.-VNA
The Manila-based lender said in a statement on Feb. 13 that the reform programme will receive parallel co-financing of 150 million USD from the French Agency for Development.
The ADB said, the money will be used mainly to fund a government-led, comprehensive review of the Local Government Code, enacted in 1991, to boost municipal revenues and assist local economic development and job creation.
The Philippines has taken significant steps to improve the financing system of Local Government Units (LGUs) and to foster transparent and accountable local governance practices.
Reforms should help raise revenues and therefore improve services, Juan Luis Gomez, ADB Southeast Asia senior public management specialist said.
However, the ADB said, despite these efforts, weak local tax bases and flaws in the design of transfers make it hard for poorer local governments to deliver the services their constituencies require. As a result, regional disparities in living standards remain wide.
This, it said, could be efficiently addressed with a review of the Local Government Code.
The reform programme include performance-based mechanisms such as the Performance Challenge Fund, which ties greater access to funding to performance, and the "Bottom-up-Budget," which can improve budget transparency and alignment of national and local development priorities.
The ADB noted that the LGUs represent close to 17 percent of total government expenditures and play a critical role in the provision of basic services like health, education, or housing and community development.-VNA
