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Local Government Finance in the Philippines. Milwida M. Guevara Synergeia www.synergeia.org.ph. The Philippines. 2,100 islands 76.5 million people in 2000; 2.4 per cent growth annually (88.7 million by July 2007) 38 percent urban estimated to increase to 82 percent in 2020.

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Local government finance in the philippines l.jpg

Local Government Finance in the Philippines

Milwida M. Guevara

Synergeia

www.synergeia.org.ph


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The Philippines

  • 2,100 islands

  • 76.5 million people

    in 2000; 2.4 per cent growth annually (88.7 million by July 2007)

  • 38 percent urban estimated to increase to 82 percent in 2020



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Who does what?

  • Provinces: Hospital and tertiary health services; Low cost housing; telecommunications; Infra from local funds; social welfare services

  • Municipalities: Primary health care; school building; solid waste disposal; cultural centers, parks, tourism facilities

  • Barangay (Village) : health center, day care, solid waste collection, reading center

  • Cities: All of the above


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Vertical Fiscal Imbalance

LGU revenues do not match their expenditures.



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The Road to a Robust Local Finance

  • Definition of Minimum standards for public services, e.g. P10,000 per elementary student

  • Grant system that equalizes needs and resources

  • Productive, flat and simple to administer local taxes

  • Systems and processes that promote tax compliance and transparency


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Out of the Box Strategies—Policy framework that supports:

  • Public-private sector partnerships

  • Development of a credit market

    * Special Purpose Vehicles

    * Bond financing

    * Credit rating for LGUs

    * Local Government Guarantee Corporation

    * Municipal/City Banks?

  • Municipal Development fund for less capable LGUs