LOCAL government units (LGUs) and government agencies launched on Tuesday a reform roadmap to improve public financial management, particularly revenue generation and expenditure management.
Supported by the European Union (EU), the Local Government Units Public Financial Management (LGU-PFM) Reform Roadmap and Implementation Strategy has an estimated budget of P1.3 billion and contains timelines and indicators.
The roadmap is expected to be adopted by 81 provinces, 144 cities and 1,490 municipalities.
“LGU PFM refers to crucial and concrete aspects of the public life of the country. Given the high level of decentralization of the Philippines, local authorities are in the frontline of the delivery of public services and are responsible for roughly 25 percent of public spending or around P450 billion,” EU Ambassador Guy Ledoux said.
“Governors, mayors or barangay captains deploy numerous and significant initiatives and valuable efforts around the country to improve the lives of their constituencies. Yet, local governance remains subject to a number of deficiencies that have been properly identified, since this sector is considered as a priority for action of the Philippines Development Plan 2011-2016,” Ledoux said.
“When referring to local governance, we tend to mention the issues of transparency, accountability, participation, corruption, efficiency, and quality of services. Local fiscal revenues are a very powerful tool for local development, and a crucial dimension of the fiscal policy,” he said.
By strengthening their public finance management system, LGUs will be able to improve service delivery to their constituents by ensuring that there are sufficient resources for their development initiatives and that these resources are utilized in the most efficient and effective manner.
The Roadmap and Implementation Strategy was developed by the LGUs themselves, with assistance from the oversight agencies. The agencies include the Department of Budget and Management (DBM), Department of the Interior and Local Government (DILG), Department of Finance (DOF), and National Economic and Development Authority (NEDA).
“The elaboration of the Roadmap was reached through a participatory nationwide preparation process. It is the result of a thorough collaboration between the national oversight institutions and the local authorities. Nearly 900 elected and appointed officials in central and local government have been consulted, which increases the credibility and ownership of this tool,” Ledoux said.
“This bottom-up approach takes into account the views and the autonomy of the LGUs, and buy in at local and central level were built in from the beginning. In fact, the Roadmap empowers the three LGUs to customize their PFM improvement plans. One LGU might need to put more efforts in revenue generation through the updating of local revenue codes, while another LGU might have more need to work on participatory budgeting practices,” he said
“Now that the Roadmap has been elaborated, it is important to ensure its successful implementation. Capacity development and tools have been developed through the EU funded PFM Project. The projects benefits from an EU grant of P400 million under the project title ‘Support Local Government Units for more Effective and Accountable Public Finance Management,’” he added.
This support has facilitated the following actions: The setting up of 16 Regional Inter-Agency Teams; The training of 300 officers of the DBM, DILG, NEDA and BLGF, of more than 1,000 LGU officers on different tools and manuals, and of 60 oversight and regional officers; The Roll-out of the Public Financial Management Assessment Tool Software to more than 1,700 LGUs; and The training of all municipalities on the upgraded electronic Statement of Receipts and Expenditures.
The new Roadmap is expected to contribute to improved public service delivery resulting in increased private sector businesses, higher formal employment, lower poverty incidence, and better living standards for all LGU constituents.