Title: Decentralisation programme
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Lead executing agency: National Economic and Development Authority (NEDA), Department of the Interior and Local Government (DILG)
Overall term: 2005 to 2012
In 1991 the Philippines initiated a structured process of decentralisation, involving the delegation of specific powers from the national government to the local authorities. Today, this process is still ongoing and in many cases the mandates and responsibilities of the various actors have become unclear or overlap. At the same time, the authorities do not have sufficient financial resources or personnel, and private industry and civil society are not adequately involved in the national restructuring effort. Therefore, the national and local authorities are still failing to respond to the needs of their citizens.
Governance has improved at national and local levels and, together with enhanced participatory development practices, is addressing the real needs of the people.
Working with its partner agencies as well as the local government units (LGUs) of the Visayan Islands and Mindanao, GIZ is promoting the harmonisation and streamlining of processes operating within and between the local governments.
The Decentralisation programme consists of three components:
- Political decentralisation promotes participatory planning processes, for example in land-use planning, development planning and sectoral planning. The new processes are demand-oriented, conflict-sensitive and responsive to gender-issues. This is intended to establish a solid basis for budgeting by the local governments.
- Fiscal decentralisation aims to enhance the capacity of the LGUs to collect taxes. This is being achieved through the adoption of basic rules promoting equitable, adequate and transparent tax administration at the national level. This is to be facilitated at the local level by a computerised tax system that ensures the transparency, accuracy and uniformity of tax assessment and collection practices.
- The capacity development component is working to create networks of capacity development providers for local governments. These networks will draw systematically on lessons learned to communicate successful and innovative planning and budgeting models, as well as conflict- and gender-sensitive approaches, in order to improve the decentralisation process.
With its flexible mix of policy and technical advice, the project can adapt to the constantly changing political and economic conditions.
Results achieved so far
Using the good practices promoted by the GIZ Decentralisation programme and other development partners, in July 2010 the national government began streamlining the business permit and licensing systems (BPLS) conducted by local governments. This countrywide streamlining process was led by the DILG and the Department for Trade and Industry (DTI). Members of a newly created capacity development network consisting of the two national government agencies, academic institutions and the local business and permit licensing officers, have participated in a training of trainers course. As a result, around 450 new trainers were prepared for the 2010 roll out of the BPLS reforms in 108 targeted LGUs.
Together, the computerisation of property tax assessment and payment, and the streamlining of BPLS have significantly reduced processing times and have cut down the amount of red tape involved. Local revenue generated from business permits and regulatory fees increased by up to 70% from 2006 to 2009. Moreover, in the province of La Union, the computerised tax administration system (iTAX) brought greater efficiency and transparency, and helped raise the amount of collected property taxes by 86% between 2008 and 2009, from PHP 71.1 million to PHP 132.5 million.
The national government agencies (the DILG, NEDA, Department of Budget and Management, Department of Finance, and the Housing and Land Use Regulatory Board) and the local governments (represented by the leagues of provinces, of cities, and of municipalities) have improved their dialogue and cooperation. They have now accelerated their efforts to draft and adopt statutory regulations on participatory local planning.