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Local Government Finance in the Philippines

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

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  1. Local Government Finance in the Philippines Milwida M. Guevara Synergeia www.synergeia.org.ph

  2. 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

  3. Our Local Governments

  4. 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

  5. Vertical Fiscal Imbalance LGU revenues do not match their expenditures.

  6. Financial Dependence of LGUs on Central Government

  7. 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

  8. 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

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