Hoping the funds will not be used for the 2022 polls, some critics can only cross their fingers as the Asian Development Bank (ADB) recently approved a $400-million (₱20 billion) loan to the Philippines to help improve local governments’ capacity to deliver public services and generate revenue.
MANILA — In a statement, the ADB said the funding will support the second phase of the Local Governance Reform program for local government units (LGUs) to modernize their public financial management.
“Much is expected from LGUs, especially now, as they are at the forefront of public service delivery during the COVID-19 pandemic,” says ADB public finance economist for Southeast Asia Aekapol Chongvilaivan.
The program was implemented in anticipation of the devolution of functions to LGUs from the National Government in response to the Supreme Court’s Mandanas ruling, which increased the share of LGUs of national taxes starting 2022.
LGUs are set to receive ₱1.116 trillion from the national budget next year and implement programs and projects that were devolved to them by the National Government.
The ADB further said that the scope of financing for local development has also been expanded to include public–private partnership projects.
“The reform program will help ensure local governments have the capacity and adequate resources to quickly respond to the basic needs of local communities at critical times like this,” Chongvilaivan said.
But critics think otherwise, saying that the funds could only be used to prop up the images of the incumbent administration, especially those who are running for the 2022 local and national elections.
The ADB issued a $26.5-million loan last year to support the reform of the real property tax system for LGUs, and a $300-million loan in 2019 to help the Government create a legal and institutional framework for LGU revenue. (JD/JuanManila)