Philippine Development Forum Working Group on Decentralization and Local Government

1. Philippine Development Forum Working Group on Decentralization and Local Government PDF-WORKING GROUP ON DECENTRALIZATION AND LOCAL GOVERNMENT

2. Working Group on Economic & Fiscal Reforms Working Group on Mindanao Working Group on Growth & Investment Climate Working Group on MDGs and Social Progress Working Group on Sustainable Rural Development Working Group on Infrastructure Working Group on Governance & Anti-Corruption Working Group on Decentralization & Local Government Each WG facilitates wide consultations across a broad range of stakeholders on these specific themes; each is led by a Government agency as lead convener with a development partner as co-lead convener.

3. Development Agenda per Thematic Areas Harmonize capacity building programs for LGUs and other key institutions to improve capacity of LGUs in core governance functions CAPACITY BUILDING LOCAL GOVERNMENT FINANCE Accelerate revenue mobilization, improve expenditure management and increase access to financing by LGUs for better service delivery and growth promotion PERFORMANCE BENCHMARKING Increase use of local governmentperformance measurement systems to benchmark performance and create incentives for better performance Improve decentralization policy framework reflected in updated legal and institutional arrangements to strengthen local governance POLICY REFORMS ON DEVOLUTION PDF-WORKING GROUP ON DECENTRALIZATION AND LOCAL GOVERNMENT

4. PDF WG-DLG Major Accomplishments

5. Theme : Capacity BuildingHarmonized capacity building programs for LGUs and other key institutions to strengthen capacity in core governance functions. • Harmonized and integrated capacity building initiatives of the national agencies, the leagues of LGUs, and the private sector through the Newly Elected Officials (NEO) Orientation Program • 2 rounds of NEO Orientation Program (2007 & 2010) • 2nd round supported by DIALOG Fund • Integrated multi-agency initiatives to harmonize core LGU operations on planning, investment programming, revenue administration, and budgeting through t Joint Memorandum Circular No. 1 of 2007 and its roll-out at the local level • Harmonized policies among oversight agencies (NEDA, DOF, DBM) • improved coordination among oversight agencies with development partners, and LGU Leagues

6. Theme: Local Government FinanceAccelerated revenue mobilization, improved expenditure management, and increased access to finance for better service delivery and growth promotion. Accelerated revenue mobilization • Policy on automatic appropriation of the IRA • Simplification of procedures for the release of LGU shares in national wealth • Mining (DBM-DILG-DENR JMC 2009-1) • Mineral reservations (DBM-DILG-DENR JMC 2010-1) • Tobacco excise tax (DBM-DILG-DENR JMC 2009-1A) • Franchise tax (DOF-DBM JMC 2008-1) • Enabling information sharing between BIR and LGUs (Executive Order 646) • Clarification on SITUS of tax on banks and other financial institutions(DOF FC No. 2-07) • Issuance of Philippine Valuation Standards on RPT in conformity with the international standards (DOF DO 37-09) • Reminder to LGUs on Updating of Schedule of Market Value (SMV) (DILG-DOF JMC No. 2010-001 ) and imposing of an additional ad valorem tax on Idle Lands (DILG-DOF JMC 2010-002)

7. Theme: Local Government FinanceAccelerated revenue mobilization, improved expenditure management, and increased access to finance for better service delivery and growth promotion. Increased access to financing • Adoption of LGU Financing Framework and NG-LGU Cost Sharing policy (DOF DO 40-09) • Implementation of the Financing Policy Framework for LGUs by Identifying New Source of Funding for 1st Tier LGUs thru (EO 809 ) –which allows 1st tier LGUs to secure loans from Multilateral Financing Institutions (WB, IFC, ADB) without sub-sovereign guarantee Improved expenditure management • Harmonization/integration of reporting system for financial, fiscal and budgetary requirements from LGUs by NG Oversight Agencies (DOF-DBM JC No. 2, s. 2008)

8. Theme: Local Government FinanceAccelerated revenue mobilization, improved expenditure management, and increased access to finance for better service delivery and growth promotion. Increased local investments • Joint Memorandum Circular No. 01, Series of 2010 (Guidelines in Implementing the Standards in Processing Business Permits and Licenses in all Cities and Municipalities) • Joint DILG-DTI Department Administrative Order No. 10-07, Series of 2010 (Guidelines in Implementing the Nationwide Up-scaling of Reforms in Processing Business Permits and Licenses in all Cities and Municipalities in the Philippines) • Streamlining BPLS entails • Using Unified form (1-form) • Reduce steps (5 steps ) • Reduce processing time (5 days for business renewals and 10 days for new business registration) • Reduce no of signatories (5 signatories)

9. Theme: Performance BenchmarkingIncreased utilization of local government performance measurement systems to benchmark performance and create incentives for better service delivery. • Refinement and restructuring system software of DILG’s Local Government Performance Management System (LGPMS) • Integration of DOF’s Local Government Fiscal Monitoring System (LGFPMS) with LGPMS • Development of Performance Based Incentive Policy which was adopted by DBCC in February 2009 – PBIP is an incentive framework to rationalize national government fiscal transfers to LGUs towards improving LGU performance in governance and service delivery

10. Theme: Policy Reforms on DevolutionImproved decentralization policy framework through updated legal and institutional arrangements to strengthen local governance • Proposed amendments to the Local Government Code with respect to IRA, taxation, and fiscal matters endorsed by LGU Leagues and DILG to Congress • Studies completed with policy recommendations on improving local government financial management (under consultation with concerned agencies): • Utilization of the Special Education Fund (SEF) • Improving financial management of local economic enterprises • Maximizing the exercise of corporate powers of LGUs • Streamlining procedures on the release of shares of national wealth • Improving LGU access to and monitoring of ODA • Dealing with surpluses and deficits in LGUs • LGU personal services expenditure policy

11. Cross-Cutting Theme:Strengthened alignment, coordination, and harmonization of development partner and national government support for decentralization. • Creation of Sub-Working Group on Inter-Local Cooperation provides a forum for knowledge sharing, coordination of actions, identification and discussion of policy issues specifically relating to inter-local cooperation mechanisms among LGUs • Organization of the Coordinating Committee on Decentralization (CCD) led to common positions and recommendations of NGAs and LGU Leagues • Establishment of Decentralization and Local Government (DIALOG) Trust Fund synchronizes delivery of PDF WG-DLG priority agenda • Partnerships with WG on Growth and Investment to form Sub-Working Group on Local Investment Reform (LIR) to promote local growth and investment

12. Benefits and other Outcomes • Strengthened coordination among development partners • Promoted common positions and recommendations among NGAs and LGU Leagues • Complementation of efforts among donors and government • Greater alignment of ODA to the government’s reform agenda

13. Thematic Areas to Development Agenda CAPACITY BUILDING IMPROVING FISCAL CAPACITY FOR LOCAL DEVELOPMENT LOCAL GOVERNMENT FINANCE PROMOTING GOOD LOCAL GOVERNANCE PERFORMANCE BENCHMARKING ACCELERATING LOCAL ECONOMIC AND SUSTAINABLE DEVELOPMENT POLICY REFORMS ON DEVOLUTION PDF-WORKING GROUP ON DECENTRALIZATION AND LOCAL GOVERNMENT