Decentralization and Economic Development in the Philippines



Edited by Joseph Y. Lim, Katsumi Nozawa
Published in 1992

Introduction / Joseph Y. Lim, Katsumi Nozawa

Chapter I

The Macro Aspect and the Political Economy of Decentralization / Joseph Y. Lim

1. Introduction
2. Why We Inherited a Centralized Bureaucracy
3. The Drawbacks of Overcentralization
4. The Goals of Decentralization
5. The Local Government Code
 5-1. The Extent of Devolution
 5-2. Some Questions Concerning the Devolution Process
  5-2-1. The Lack of Buildup of Local Capabilities Prior to Devolution
  5-2-2. National-Local Interlinkage
  5-2-3. The Macro-Micro Linkage
  5-2-4. The IRA Allotment
 5-3. The Capabilities of the Local Units
 5-4. Decentralization and Power Play
6. Summary and Conclusion
7. References
Chapter II

Public Policy and Decentralization for Regional Development with Poverty Alleviation / Wilfredo G. Nuqui

1. Introduction
2. Regional Growth and Poverty Incidence Trends
3. Government Intervention for Regional Development
4. Evolution of Regional Planning Efforts
 4-1. Limited Regional Development Planning up to 1971
 4-2. Organization of the Bureaucratic Framework, 1972-76
 4-3. Comprehensive Regional Development Planning, 1977-82
 4-4. Politicized Regional Development Planning, 1983-present
5. Recent Regional Development Initiatives
 5-1. Institutional and Procedural Arrangements
 5-2. priority Development Strategies and Programs
  5-2-1. Countryside Agro-Industrial Development Strategy (CAIDs)
  5-2-2. The Strategy for Sustainable Development (SSD)
  5-2-3. Comprehensive Agrarian Reform Program (CARP)
  5-2-4. Medium-Term Public Investment Program (MTPIP)
  5-2-5. Poverty Alleviation Programs
6. The Local Government Code
7. Conclusion
8. References
Chapter III

Decentralization and the Financial Sector / Mario B. Lamberte

1. Introduction
2. LGU's Access to the Financial Markets
3. Monetary, Banking and Credit Policies
 3-1. Pre-Liberalization Period
 3-2. Financial Liberalization Period
4. Regional Resource Mobilization and Allocation
 4-1. Regional Banking Offices and Resources
 4-2. Deposit Mobilization
 4-3. Factors Affection Deposits
 4-4. Lending Operations of Banks
5. Concluding Remarks
6. References
Chapter IV

Fiscal Decentralilzation and the Local Government Code of 1991 / Rosario G. Manasan

1. Introduction
2. Internal Revenue Allotment (IRA)
 2-1. Share of IRA in National Internal Revenue Taxes
  2-1-1. Provisions
  2-1-2. Implications
 2-2. Allocation Ratios to Different Levels of LGUs
  2-2-1. Provisions
  2-2-2. Implications
 2-3. Distribution Formula to Specific LGUs
  2-3-1. Provisions
  2-3-2. Implications
3. Real Property Taxation (RPT)
 3-1. Basic RPT Rates and the Sharing Formula
  3-1-1. Provisions
  3-1-2. Implications
 3-2. Assessment Levels
  3-2-1. Provisions
  3-2-2. Implications
 3-3. Additional 1% Tax for the Special Education Fund (SEF)
  3-3-1. Provisions
  3-3-2. Implications
4. License and Business Tax (LBT)
 4-1. Provisions
 4-2. Implications
5. Other Taxes, Charges and Fees
 5-1. Provisions
 5-2. Implications
6. A Summing Up
7. References
Chapter V
1. Introduction
2. Dispersal of Industries and Regional Development
 2-1. Need for Regional Industrial Development
  2-1-1. Population and Poverty Incidence
  2-1-2. Economic Development Indicators
 2-2. investment Incentives Scheme
  2-2-1. Nature of Incentives
  2-2-2. Less Developed Areas
  2-2-3. Minimal Effect of Incentives on Dispersal
 2-3. Credit and Financial Incentive Scheme
 2-4. Zoning Regulations
3. Establishment of Industrial Estates
 3-1. Export Processing Zones
  3-1-1. Regular Export Processing Zones
  3-1-2. Special Export Processing Zones
 3-2. Regional Industrial Center Program
  3-2-1. Brief History
  3-2-2. Preferred Industries
  3-2-3. PIC Site Selection
  3-2-3. Land Conversion / Land Aquisition / Relocation Problems
4. Decentralization of Government Services
 4-1. Decentralization Under the Marcos Regime
 4-2. Decentralization Under the Aquino Administration
 4-3. The 1991 Local Government Code and Regional Industrial Development
  4-3-1. LGU Bond and Regional Development
  4-3-2. Decentralization of the BO1 Services
  4-3-3. Decentralization of Other DTI Services
5. Conclusions and Recommendations
6. References
7. Annexes
Chapter VI

Government Decentralization: Opportunity and Dangers for Agricultural Development / Ramon L. Clarete

1. Introduction
2. Aspects of the Local Government Code Pertinent to Agriculture
 2-1. Financial Resources
 2-2. Regulatory Powers
3. Public Investments and Growth in Agriculture
4. Transactions Costs and Public Infrastructure Investments
 4-1. Market Transactions Costs
 4-2. Public Investment Allocation
5. Effects of Alternative Investment Allocation Schemes
 5-1. Overall Welfare Impact
 5-2. Effect on Agriculture: A Preliminary Empirical Evidence
6. Possible Benefits and Problems of Decentralization
 6-1. Decentralization as a Corrective Mechanism
 6-2. Lower Information Costs and More Efficient Government Intervention
 6-3. Rent Seeking
 6-4. Lack of Technical Expertise
 6-5. Interregional Spillovers
7. References
Chapter VII.

Decentralization, Participatory Development and the Role of Non-Government Organizations / Leonor M. Briones

1. Introduction
2. Concepts of Participation, Decentralization and Non-Government Organizations
 2-1. Participation
 2-2. Decentralization
 2-3. What are NGOs?
  2-3-1. From Grassroots Concern to Public Policy
  2-3-2. People's Organizations (POs) and NGOs
  2-3-3. What Organizations are not NGOs?
3. Participatory Development: The Philippine Experience
 3-1. The Fifties and Sixties: Focus on the Barrio
 3-2. The Marcos Years: Lip Service to Participation
 3-3. The Aquino Years: Constitutional Support for Participation
4. Decentralization: Participation and Bureaucracy
 4-1. Decentralization, Marcos Style
 4-2. Decentralization under Aquino
 4-3. Some Reservations: Decentralization and Privatization
5. The Lost Decade of the Eighties and the NGO Phenomenon
 5-1. Factors Which led to the Proliferation of NGOs
 5-2. Recent Developments on NGOs
 5-3. From Community Development to Advocacy
6. The Aquino Administration and Non-Government
 6-1. Formal Policy Support for NGOs under Aquino
 6-2. Constraints to NGO Participation under the Aquino Administration
  6-2-1. IMF-Initiated Economic Stabilization Programs
  6-2-2. Failure to Institute Genuine Agrarian Reforms
  6-2-3. Return of Traditional Politics and Traditional Politicians
  6-2-4. Further Entrenchment of Monopoly Control and the Economy
  6-2-5. Resurgence of Graft and Corruption
  6-2-6. Problems at the Field or Operational Level
7. The LGC and Implications for Decentralization and Participatory Development
 7-1. Opportunities and Problems for LGU-NGO Partnership under the LGC
8. Concluding Comments
9. References
10. Annex A - Covenant on Philippine Development
  Annex B - On Government-MGO Collaboration