PPG Chapter On Local Governments in The Philippines

An Introduction
Noel M. Morada
Teresa S. Encarnacion Tadem

UNIVERSITY OF THE PHILIPPINES DILIMAN
Published by the
Department of Political Science,
College of Social Sciences and Philosophy,
University of the Philippines
Diliman, Quezon City
In collaboration with the

Philippine Commission on Higher Education (CHED)
Copyright 2006 by the authors and the Department of Political Science
All rights reserved.

No copies can be made in part or in whole
without prior written permission from the publisher.
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Copyeditors: Jocelyn de Jesus and Nestor De Guzman
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Cover Design: Dezh David
ISBN 971-93450-1-2
Printed in the Philippines by COR ASIA, Inc.

Local Governmentsand Devolution in the Philippines
Maria Ela L. Atienzd
What is happening in the Philippines in terms of devolution through the 19 91 Local Government
Code is therefore not just an isolated event unique to the post-EDSA revolution in a group of
islands called the Philippines. What is happening here is indicative of, part ef, both a leader cf and a
participant in, a vast global shift in governance.
- Kenneth H. Ellison2
Learning Objectives
At the end of this chapter, the student should be able to:

1. Define decentralization, distinguish its different forms, and relate it with
democratization.
2. Trace the evolution of local governments in the Philippines and appreciate
the dynamics of centralizing and decentralizing trends throughout history.
3. Appreciate and assess the major changes brought about by the 1991
Local Government Code (LGC) on local governments and central-local
relations
4. Describe the current local government system.
5. Assess the impacts, challenges, and problems brought about by
1. Most of this chapter are
devolution on Philippine politics. revised and abridged versions of
parts of chapters 1 and 2 of the
author's unpublished doctoral
dissertation, "The Politics of
Health Devolution in the
Philippines with Emphasis on
Experiences of Municipalities in a
ocal government is the lowest level of elected territorial organization
L
Devolved Set-up" (submitted to
the Graduate School of
within a state, whether federal or unitary. Broadly, local governments International Cooperation
Studies, Kobe University, Japan,
have a twofold task: to provide local public services such as garbage June 20, 2003).
collection, health services, etc., and to implement national welfare policies. 2. "Emerging Styles of Gover-
nance: A Global Context,"
However, their role has evolved since the 1980s with the trend toward involving Philippine Journal of Public
Administration 42, nos. 1 and 2
communities more and more, particularly in local policy making." In addition, (January-April 1998): 2.
3. Rod Hague and Martin
in many unitary systems, including that of the Philippines, the trend is to Harrop, Comparative Government
, 5th
and Politics: An Introduction
decentralize responsibility to the lower levels of government. Hence there is edition, (Hampshire and New
York: Palgrave, 2001), 211-13.
renewed interest in local governments worldwide.
m
Philippine Politics and Governance: An Introduction
Decentralization and Democratization

A large part of the twentieth century was dominated by worldwide trends
in centralization of power and resources. Centralization was the model for
development in many parts of the world. But since the micl-1980s, there has
been an increasing shift toward or revival of interest in decentralization. This
shift can be seen not only among governments around the world but also in
academic interest and programs of international donor agencies. However,
decentralization means different things to different people, and there are a variety
of motivations behind attempts to decentralize. Thus definitions are in order
before proceeding with the discussion. Following Rondinelli and Cheema,
decentralization is defined quite broadly as "the transfer of planning, decision
making, or administrative authority from the central government to its field
organizations, local governments, or nongovernment[al) organizations." Different
forms of decentralization can be distinguished primarily in terms of the extent
of authority transferred and the amount of autonomy the decentralized
organizations achieved in carrying out their tasks.
While devolution and deconcentration are the most-known forms, there
are actually four major forms of decentralization.5 First, deconcentration involves
the redistribution of administrative responsibilities only within the central
government. This can be clone in different ways, namely 1) the shifting of
workload from a central government ministry or agency headquarters to its
own field staff located in offices outside the national capital; 2) through field
administration that not only shifts workload but also transfers some decision-
making discretion to field staff, such as making routine decisions and adjusting
the implementation of central directives to local conditions, but within guidelines
set by the central ministry; and 3) local administration, in which all subordinate
levels of government within a country are agents of central authority, usually
the executive branch.
A second form is delegation to semi-autonomous or parastatal organizations.
Decision making and management authority for specific functions is delegated
to organizations that are not under the direct control of central government
ministries. Examples are public corporations, regional planning and area
development authorities, multipurpose and single-purpose functional authorities,
and special project implementation units. Often, these organizations to which
development functions are delegated have semi-independent authority to perform
4. Dennis A. Rondinelli and G.
Shabbir Cheema, "Implementing their responsibilities and may not even be located within the regular government
Decentralization Policies: An
lntroduction," in Decentralization
structure. This form of decentralization is definitely more extensive than
and Development: Policy administrative deconcentration.
Implementation in Developing
Countries, ed. Cheema and A third form is devolution of functions and authority. This form seeks to
Rondinelli (Beverly Hills, London,
and New Delhi: Sage create or strengthen independent levels or units of government. Through
Publications, 1983), 18.
5. lbid., 18-25. devolution, the central government relinquishes certain functions or creates
Chapter 16: Local Governments and Devolution in the Philippines
new units of government that are outside its control. In its purest form, devolution
has certain fundamental characteristics. First, local government units (LG Us) are
autonomous, independent, and clearly perceived as separate levels of government
over which central authorities exercise little or no direct control. Second, the
LGUs have clear and legally recognized geographical boundaries within which
they exercise authority and perform public functions. Third, LG Us have corporate
status and the power to secure resources to perform their functions. Fourth,
devolution implies "the need to 'develop local governments as institutions'-in
the sense that they are perceived by local citizens as organizations providing
services that satisfy their needs-and as government units over which they
have some influence." Finally, this is an arrangement in which there are reciprocal,
mutually beneficial, and coordinate relationships between central and local
governments; that is, the LGU has the ability to interact reciprocally with other
units in the system of government of which it is part.6 However, while these
characteristics of devolution may be valid from a theoretical or even legal
perspective, actual requirements in most developing countries are less stringent.
Devolution is usually seen as a form of decentralization in which LGUs are
given primary responsibility for some functions over which the central
government often retains some supervisory powers and in which it may play an
important financial role. However, even if most of the theoretical conditions for
devolution are met, central governments often attempt to make LGUs act
consistently with national development policies and plans in performing their
functions, with certain formal or informal controls often maintained to accomplish
this goal. Despite such limitations, for development purposes, the capacity of
LGUs to carry out programs and projects effectively and through reciprocal
relationships with other organizations may be more important than "their legal
status as independent units.'?
Fourth, there is the transfer of functions from government to nongovernment
institutions. Some planning and administrative responsibility or public functions
are transferred from government to voluntary, private, or nongovernment
institutions. In some cases, government may transfer to "parallel organizations"
the right to license, regulate, or supervise their members in performing functions
that were previously controlled by government. In other cases, government can
shift responsibility for producing goods or supplying services to private
organizations, a process often called privatization. This type of decentralization
may be akin to the concept of debureaucratization, that is, allowing decisions
to be made through political processes involving larger numbers of political
interests, rather than having the decisions made exclusively or primarily by
government through legislation, executive decree, or administrative regulation.
Even though these forms of decentralization differ in their characteristics
and implications, they are not mutually exclusive. In reality, all governments, 6. Ibid., 22.
even the highly centralized ones, have experimented with some combination 7. Ibid., 23-24.
of these forms of decentralized planning, decision making, and administration

before the 1980s. Thus, the interest in decentralization in the 1980s is not new
in itself. However, previous interest looked at decentralization from a
predominantly public administration or management standpoint.
There is also relative agreement since the 1980s that there are mixed motives
and causes of the shift to decentralization worldwide, with the shift primarily
politically driven.8 The commonly cited reasons are democratization, increasing
efficiency and economic growth, improving supply and delivery of local services,
vested interests of national politicians, preservation of national political systems
in the face of-growing local demands, and general failure of centrist experiments.
8. The varying reasons for the
However, there is disagreement on whether other events or processes can be
shift to decentralization are considered crucial factors, e.g., globalization, ethnic conflict, and such. The
discussed rn the following
literature: Philippines, as will be seen later, is part of this worldwide decentralization
Richard C. Crook and James
Manor, Democracy and trend.
Decentralisation in South Asia
and West Africa (Cambridge: What is new since the 1980s is the increased links between decentralization
Cambridge University Press,
1998), 1. and the process of democratization, another major phenomenon that gained
Bill Dillinger, "Decentralization,
Politics and Public Services," in
unprecedented momentum in the latter part of the twentieth century. Diverse
Decentralizing Infrastructure:
Advantages and Limitations, ed.
country case studies have highlighted the relationship between decentralization
Antonio Estache, World Bank and democratization. Decentralization and democratization tend to reinforce
Discussion Paper No. 290
(Washington, DC: The World each other; decentralization is a factor in increasing democratization while
Bank, 1995), 5.
James Manor, The Political successful decentralization can only take place with democratic processes. As
Economy of Democratic
Decentralization (Washington, Crook and Manor explained, perhaps because of the "fall" of Communism, the
DC: The World Bank, 1999), 26-
52. potential contributions of decentralization to the enhancement of participation,
Remy Prud'homme, On the
Dangers of Decentralization, good governance, and democratization have received most emphasis now,
Policy Research Working Paper
No. 1252 (Washington, DC: The pushing the more long-standing concern with its role in economic development
World Bank's Transportation,
Water and Urban Development
into second place." Meanwhile, Burns, Hambleton, and Hogget emphasize that
Department, February 1994). sound local government system requires a combination of good management
Mark Turner, ed., Centre!-
Local Relations in Asie-Pecitic: and democratic accountability.'? Their argument is that decentralization offers
Convergence or Divergence?
(Hampshire and London/New an attractive alternative to market models because potentially, it can provide
York: Macmillan Press Ltd.ISL
Martin's Press, lnc., 1999), 2-4. responsive, quality services, as well as a range of possibilities for strengthening
9. Crook and Manor, Demo-
cracy and Decentralisation in citizen involvement in the governing process.
South Asia and West Africa, 2.
10. Danny Burns, Robin
Hambleton, and Paul Hogge!, The
II
Politics of Decentralisation:
Revitalising
(Hampshire
Local Democracy
and London: From the Precolonial Barangay to the
Macmillan Press Ltd, 1994).
11. See for instance David 1991 Local Government Code: The Evolution of
Timberman, A Changeless Land:
Continuity and Change
Philippine Politics (Makati and
in PhilippineLocal Governments and Central-Local Relations
Singapore: Bookmark, Inc. and
Institute of Southeast Asian A common assumption is that the current decentralization process in the
Studies, 1991), 227; Alex
Brilliantes, "Decentralized Demo- Philippines is a complete break from an overly centralized past." However, this
cratic Governance under the
Local Government Code," perspective is simplistic because it loses sight of the country's localized past
Philippine Journal of Public
Administration 42, nos. 1 and 2 and the deep tensions between central and local relations since formal central
(January-April 1998): 60.
institutions were established. Rood points out two problems in characterizing
the Philippines prior to the 1991 LGC solely as overcentralized." First, localism
is a well-known characteristic of Philippine politics. The center relies on local
political strongmen who may in turn disregard administrative guidelines coming
from the center. Second, there have been numerous shifts during Philippine
history in the relative emphasis given to decentralization or centralization. In
addition, Hutchcroft criticizes the "overcentralized" view of scholars of Philippine
public administration because they tend to concentrate far more attention to
formal structures of authority than on informal networks of power. 13 Indeed,
looking at the history of central-local relations of the country, it can be seen
that decentralization and the accompanying notion of local autonomy are not a
new phenomenon. In fact, before the coming of the Spaniards in the sixteenth
century, almost everything was localized. Of course, the formal centralized system
introduced by the Spaniards afterward would have a lasting impact on the
evolution of local governments in the Philippines. But despite the centralizing
trends, decentralization has always come in the debates both within and outside
the structures of power. It must also be pointed out that there are contradictions
within historical periods that are usually characterized as formally centralized in
character. This is hardly surprising for a country of thousands of islands. Thus,
the so-called landmark LGC of 1991, while indeed trailblazing in a number of
respects, is not an abrupt break from the past but a result of a long struggle for
decentralization and local autonomy.
Before the coming of Arab traders, scholars, and missionaries in the south
in the early part of the fourteenth century and the arrival of the Spaniards in the
second half of the sixteenth century, everything was local. The ancestors of the
Filipinos established an indigenous and autonomous political institution known
as the barangay, which was composed of some thirty to one hundred households.
Some of these small-scale political units were clustered together, but most of
them "had not attained a level of political organization above and beyond the
kinship principle."!' But in some areas of the archipelago, the barangay later
established confederations, such as the Islamic sultanates in Sulu and
Maguindanao, which possessed more complex political organizations and more
12. Steven Rood, "An Assess-
sophisticated economies. ment of the State of Knowledge
Concerning Decentralized Gover-
The Spanish colonizers then introduced a centralized system with the Spanish nance under the Philippines' 1991
governor-general as the supreme authority in all local matters. They retained Local Government Code," Philip-
pine Journal of Public Adminis-
the indigenous barangay (renamed as barrio) as basic administrative units but tration 42, nos. 1 & 2 (January-
April 1998): 60.
added other tiers of local governments: the pueblos (municipalities), cabildos 13. Paul D. Hutchcroft,
"Colonial Masters, National
(cities), and provincias (provinces). The Spanish governor-general was the Politicos, and Provincial Lords:
Central Authority and Local
supreme authority in all local matters, with the subnational officials acting as Autonomy in the American
Philippines, 1900-1913," Journal
his agents and appointed by central authorities. Only toward the end of the of Asian Studies 59, no. 2 (May
2000): 278 and fn. 3.
Spanish regime was there any attempt to allow local discretion in the governance 14. Onofre D. Corpuz, The
Roots of the Filipino Nation,
of local affairs. The Maura Law of 1893 sought reforms in the local government volume 1 (Quezon City: Aklahi
system by granting greater local autonomy to towns and provinces in Luzon Foundation, 1989), 38.
and Visayas and by allowing local citizens to select some of their officials.
However, these reforms did not have time to make much impact because the
Philippine Revolution shortly followed in 1898.
According to Tapales, the Spanish period had impacts on the development
of local governments in the Philippines." First, indigenous activities were
supplanted by putting in place an alien system of local government. Second, a
high degree of centralization in the capital of Manila in Luzon came to characterize
national-local relations for another century after the end of Spanish colonization.
Understandably, it was not realistic for a colonial power to have autonomous
local units as .features of its consolidated administrative setup. But despite the
centralized character of the formal structures of this period, contradictions also
existed. For instance, in reality, authority was divided between the Spanish
15. Proserpina Domingo officials concentrated in "imperial Manila" and priests scattered throughout the
Tapales, "History and Evolution of
Philippine Local Government and archipelago. Thus, several other rather ironic impacts of the period can be
Administration," in Local
Government in the Philippines: A added. Third, the divide-and-rule policy of Spanish colonizers, their concentration
Book of Readings, volume 1,
edited by Tapales, Jocelyn C. of all political activities in Manila and the ensuing neglect of the other regions
Cuaresma, and Wilhelmina L.
Caba (Diliman, Quezon City: outside Manila, and the curtailment of many elements of internal trade
University of the Philippines
Center for Local and Regional
strengthened regionalism and the other regions' contempt for the center, 16 which
Governance and National College
of Public Administration, 1998),
remain strong until today. Fourth, at the end of Spanish rule, there were still
125. areas in the Philippines that considered themselves not part of the emerging
16. Perhaps a clear example
of this regionalism is the province nation at all. This was because the Spaniards were unsuccessful in consolidating
of Cebu in the Visayas. Despite
being a secondary priority of the all the islands under their control. It was only in the mid-nineteenth century
Spanish and later American
colonial administrations, Cebu that the colonial government was extended to include the mountainous interior
has grown significantly with the
help of its strategic location, of Luzon, and footholds in Mindanao with the virtual elimination of the
cultural and ethnic vitality, and the
rise of several prominent Chinese Maguindanao sultanate. However, the Spaniards were unable to assert control
mestizo political and economic
families. Today, Cebu is an
in the Sulu archipelago.17 And finally, the Spanish period left a local elite that
economic power compared to
other provinces in the country.
would continue to play important roles in the decades ahead. All European
This led to a Cebuano sentiment
of self-sufficiency and pride in its
colonial administrations in Southeast Asia required cooperation from strategic
achievements, despite the indigenous groups. This system depended on "patron and client links between
political powers being centralized
in Manila. In recent years, several layers of local chiefs whose segmented polities ultimately gave them a
Cebuanos have challenged
national p olicie s such as the certain standing that was recognized by the local populations."!" Thus, the datu
national language, which they
criticize as based on the language or barangay headmen in the Philippines were incorporated into the Spanish
of the center (Tagalog). Some
Cebuano leaders have time and colonial regime. They were dependent upon Spanish patronage and support
again proposed federalism for the
country.
but they also exercised considerable powers in their local areas. They were
17. For an elaboration of this,
see- Nicholas Tarling, "The
responsible for tax collection, law and order, and public works. Increasingly,
Establishment of the Colonial
Regimes," in The Cambridge
powerful landed elites or caciques (generally of mestizo heritage) emerged in
History of Southeast Asia, volume the provinces. At the same time, the colonial administration also indirectly helped
3, (From c. 1800 to the 1930s),
ed. Tarling (Cambridge: Cam- in the development of the ilustrado class who were at the forefront of nationalist
bridge University Press, 1999),
21-24. revolts and eventually, the Philippine Revolution of 1898.
18. Carol A. Trocki, "Political
Structures in the Nineteenth and Then, the Malolos Constitution, the framework of the Philippine revolutionary
Early Twentieth Centuries," in The
Cambridge History of Southeast
government, provided for the creation of municipal and provincial assemblies,
Asia, ed. Tarling, 84. autonomous local units, and popular and direct elections. But despite this legal
support for local autonomy, the revolutionary government had to actually curtail
local democracy. In a sense, this was justified by the precarious times when
forging national unity in a f1edgling nation was so essential. However, any plan
in the future to expand autonomy for local governments was curtailed by the
entry of a new colonizer.
The American colonial period (1900-1935) saw the promulgation of a number
of policies recognizing local autonomy. The system began with an emphasis on
local self-government with the aim of building democracy from below. So,
municipal and then provincial elections were first introduced before national
elections. However, American administrators discovered that Filipino elites who
came to fill posts in municipal governments "were regularly 'mishandling public
funds' by voting all available revenue to pay for their own salaries."!" Concerned
with inefficiency and corruption in local governance, Americans tinkered with
the liberal democratic system they introduced by moving toward centralization
to prevent the "evils" of unrestricted and still "untutored" Filipino rule. For
instance, the people in the provinces and municipalities elected their own officials
and local units enacted ordinances, but the ultimate control of these actions
was lodged in Manila. Under the Americans, Manila became not only the political
center but the economic and cultural center as well. This was consistent with
the Americans' objective of first subjugating the Philippines and probably, the
practicality of co-opting the ruling elites in the political structures already put in
place by the Spaniards."
But centrifugal and traditional forces were still at work. While the United
States attempted to institute a new system, it ended up preserving much of the
informal power structure and in ruling through the ilustrado and cacique classes.
Like their Spanish predecessors and other colonial regimes in Southeast Asia,
American administrators allowed the cooperative elements of the Filipino elite
an increasingly larger role in government for expediency purposes.21 But in the
process, they turned a blind eye on the local elite who "enriched themselves at
the expense of the peasants and increased their traditional power within the
local communities."22 In addition, despite efforts to centralize, key Manila bureaus
often lacked the capacity to supervise effectively. The bureaucracy created by
the Americans was largely weak. Thus, American colonial rule actually further 19. Ibid., 92.
20. Tapales, "History and
reinforced the decentralized nature of the Philippines "by concentrating far less Evolution of Philippine Local
Government and Administrat ion,"
on the creation of a central bureaucracy than on the introduction of representative 126.
21. The Americans were also
institutions," including a national legislature that expanded opportunities for cutting the costs of administration
as well as trying to pacify those
the expression of local interests.23 In the end, the ilustrado class not only took involved in the "Philippine
Insurrection," as they would prefer
control of government at all levels as the Filipinization of the government was calling what Filipinos label as the
"Philippine Revolution."
completed, but through the electoral process, also organized themselves to 22. Trocki, "Political Structures
in the Nineteenth and Early
protect their class interests on a national basis. But unlike its Spanish predecessor, Twentieth Centuries," 91.
the American colonial government was more successful in penetrating the Muslim 23. Hutchcroft, "Colonial
Masters, National Politicos, and
areas in Mindanao initially through bloody military campaigns and thereby Provincial Lords," 289, 292.
incorporated these areas under the centralized structure. This would fuel further
Muslim resistance and resentment against the predominantly Christian center.
This resistance would find different venues of expression ranging from peaceful
protests against central policies to armed calls for secession that would continue
up to the present clay.
During the 1934-1935 Constitutional Convention, emerging Filipino leaders
were grouped into two camps: those who favor stronger local governments,
and those who consider state control more important than local governments.24
The second group won. Thus, the 1935 Constitution had no separate article on
local governments, in contrast with the two succeeding constitutions of the
Philippines. In addition, the 1935 Constitution formally created a very powerful
Philippine president. Thus, the trend during the Commonwealth period, the
transitional government before the granting of independence, was centralization.
Aside from the state-control bias of the 1935 Constitution, some writers also
attribute the centralization trend to the strong leadership style of President Manuel
Quezon.25 Quezon believed that under a unitary system, the national chief
executive should control all local offices. The result was that central supervision
rapidly increased and was personally exercised by the president to a degree
previously unheard of. However, as Hutchcroft noted, Quezon was primarily
concerned with centralizing control over patronage resources. Thus, he achieved
great success in establishing central-local relations aimed at electoral objectives
rather than promoting administrative effectiveness.26
Formal centralization continued during the briefJapanese occupation 0942-
1945). As in the case of the Spanish and American colonization of the Philippines
and especially since there was a world war going on, an even greater degree of
central control was imposed on local governments by the occupying power
through a national government where Filipinos collaborators, still from the
same local elites that cooperated with the Americans, held positions.
From the granting of formal independence in 1946 until 1972, the general
trend had been toward decentralization. Until 1950, national executive
departments made all administrative appointments at the provincial and municipal
levels. However, they were generally made in consultation with the local political
elite. A number of laws passed by Congress gave greater autonomy to local
24. Tapales, "History and
governments through the grant of additional powers or the lessening of national
Evolution of Philippine Local control on local affairs. Significant legislative enactments include the Local
Government and Administration,"
12 . Autonomy Act (Republic Act RA 2264), the Barrio Charter (RA 2370, later amended
25. Raul P. de Guzman, Mila
A. Reforma, and Elena M. by RA 3590), and the Decentralization Act of 1967 (RA 5185). The Supreme
Panganiban, 'The Evolution of
Local Governments in the Court also contributed to the cause of local autonomy by moving away from a
Philippines," in Local Govern-
ments in the Philippines, ed. liberal to a narrower interpretation of constitutional power of the president to
Tapales, Cuaresma, and Cabo,
108-9. supervise local governments. The decentralization trend culminated in the
26. Hutchcrof1, "Colonial Mas-
ters, National Politicos, and inclusion of a separate article on local government in the draft of the new
Provincial Lords," 299.
constitution and the draft Integrated Reorganization Plan (IRP). The draft
constitution contained provisions guaranteeing local government autonomy, local

power to create their own sources of revenue and to levy taxes, greater citizens'
participation, and enactment of a local government code, among others. The
draft IRP, meanwhile, strengthened the regions. But under the draft law, LGUs
were still supervised through the Office of the President and the various
departments.
In the meantime, as far as the traditional Filipino elites were concerned,
they survived the transition to formal independence in 1946. Trocki observes
that like their counterparts in Malaya, Cambodia, and Laos but unlike Dutch
Java, the Filipino elite "followed the path from traditional leadership to colonial
ally to post-independence elite, staying on top while the world changed beneath
them.":" Thus, the post-independence period of decentralization generally
enhanced the roles of local elites.
Furthermore, central-local relations in the Philippines before the declaration
of martial law in 1972 differed from other developing Asian countries that were
characterized by the widespread phenomenon of tight central control at the
time. According to Friedman, this difference sprang from the country's colonial
heritage and reflected formal, structural alternatives, albeit unaccompanied by
new conceptions of government.28 Before the 1970s, the Philippines already
had constitutionally differentiated provincial governments and a variety of elected
governing bodies and officials at the city, municipal, and barrio levels. Friedman
continued that while financial resources needed for governing were always
lacking, "a complicated and politically influenced system of grants'?" made the
Philippine local government system more autonomous than in other Asian 27. Trocki, "Political Structures
in the Nineteenth and Early
countries. While this type of system generated its own benefits as well as Twentieth Centuries," 89.
28. Harry J. Friedman,
problems, "the potential for continued development" that is not discernible "Decentralized Development in
Asia: Local Political Alternatives,"
everywhere in Asia existed in the Philippines." in Decentralization and
Ironically, among the early outputs of Ferdinand Marcos's martial law were Development: Policy Implemen-
tation in Developing Countries,
the ratification of the draft constitution with the whole article on local ed. Cheema and Rondinelli, 39.
29. Friedman probably had in
governments by the infamous barangay-" or "citizens' assemblies" and the mind the pork barrel system
wherein representatives in
translation of the IRP into law and executive order. Aside from these legal Congress disburse money to their
constituent local areas and the
supports for decentralization, there were also other instances of decentralization patron-client system wherein local
strongmen and officials can
during formal Mania! Law (1972-1981). These were the creation of administrative access resources from the center
and use these as they see fit.
regions, with regional offices of different ministries as well as regional 30. Friedman, "Decentralized
development councils to enhance regional planning. The integrated area Development in Asia," 39.
31. From 1972 onwards, the
development approach was also adopted." However, the abovementioned barrios were renamed after their
predecessors' original name.
decentralization measures were more directed toward administrative 32. de Guzman, Refonma, and
Panganiban, "The Evolution of
deconcentration or delegation of authority to the field offices of line agencies Local Governments in the
Philippines," 114.
that were mere extensions of the central government, rather than toward the 33. Gabriel U. Iglesias,
"Political and Administrative
formal strengthening of LGUs. It has also been argued that the reorganization Issues in Reglona! Planning and
Development," Philippine Jouma/
plan has decentralized responsibilities to regions but without severing their of Public Administration 21, nos.
3 and 4 (1977): 324-34.
dependence on central aurhortties." Rigorous supervision procedures
accompanied delegation of power for planning and implementation. The result

was that local administrations lacked confidence in pursuing new programs
and ideas. Or even if they had the competence to do so, they hesitated to take
the initiative.
Thus, despite numerous and frequent changes in local government as well
as the rhetoric of increasing self-government, the national-local government
relations during Martial Law were clearly toward greater political centralization.
Notwithstanding the guarantee of local autonomy in the 1973 Constitution, there
were specific manifestations of increasing central control over local affairs and
decreasing powers, functions, and responsibilities of local governments. These
centralizing trends were; the executive's exercise of legislative power, including
the power to create, merge, or abolish local governments, as a result of the
abolition of Congress; the extent and scope of presidential power over local
officials, including the power to remove and appoint local officials; and the
central direction in the planning and implementation of development programs
and projects, among others." Moreover, illustrations of attempts to control local
activities from the center include the early use of barangays to ratify martial law
institutions and the constant reorganization of local structures by presidential
decrees. All these plus the increased powers Marcos gave the military made for
an unprecedented centralized system, in other words, a dictatorship.
Following the formal lifting of martial law in 1981, a Local Government
Code was enacted in 1983 pursuant to the 1973 Constitution. Among the
significant provisions of the Code were; the principle of liberal interpretation of
local government powers (favoring LG Us in the event of conflicting interpretations
of powers of local and national governments); the retention of the innovations
introduced during Martial Law; clear definition of the role and functions of the
LGUs and the degree of supervision by the central agencies; emphasis on the
role of regional offices as the point of contact between the national and local
governments; and a system of recall of local officials. But despite the important
features of the Code, there were several negative trends that worked against
decentralization.35 Obviously, Marcos would not relinquish control to LGUs.
First, the Department of Local Government and Community Development was
34. de Guzman, Reforma, and
Panganiban, "The Evolution of
renamed the Ministry of Local Government, and a separate and powerful Ministry
Local Governments in the
Philippines."
of Human Settlements under First Lady Imelda Marcos eroded many of the
35. Romeo B. Ocampo and functions of the first department/ministry. Second, regional institutions had served
Panganiban, "The Philippine
Local Government Sy.stem: to protect a stronger national presence in local areas, although they might have
History, Politics and Finance," in
Local Government in the also provided a channel of access from the periphery to the center. Third, the
Philippines, ed. Tapales,
Cuaresma, and Caba, 143; and police were removed from municipal control and centralized under a national
Tapales, "History and Evolution of
Philippine Local Government and structure. This centralization of police function was meant to reduce the power
Administration," 132.
36. Turner, "Philippines: From of local mayors who previously appointed police personnel and who often
Centralism to Localism," in
Central-Local Relations in Asia-
used them as private armies.36 And fourth, the administration's political party,
Pacific, ed. Turner, 108. the Kilusang Bagong Lipunan (KBL), was the single source of political patronage,
enabling Marcos to bring into line provincial strongmen and local chief executives.
The command that national ministries and agencies continued to have over the
bulk of the government's financial, technical, and human resources also backed
up centralism.
After the 1986 EDSA People Power Revolution toppled the Marcos
dictatorship, the Philippine government headed by Corazon Aquino renewed
its commitment to greater decentralization as a means of attaining its development
goals and objectives. This was expressed in the goals of the new administration's
development program ("The Policy Agenda for People Oriented Development").
The program stated that the role and structure of government would be guided
by the key organizational principles of decentralization, among others. The
administration's commitment to achieving greater decentralization was further
reinforced by the extensive provisions on local autonomy in the 1987 Constitution.
Article 2 (Declaration of Principles and State Policies), Section 25, says: "The
State shall ensure the autonomy of local governments." There is also a separate
article on local government (Article 10) that is more extensive than its counterpart
in the 1973 Constitution. Article 10 has the following very important provisions:
1. Creation of autonomous regions in Muslim Mindanao and the

Cordillera.
2. Granting to LG Us the power to create their own sources of revenue
and to levy taxes, fees, and charges.
3. Providing local governments with a just share of the national taxes
which shall be automatically released to them.
4. Entitling local governments to an equitable share in the proceeds
of the utilization and development of the national wealth within
their respective areas.
5. Providing for regional development councils or other similar bodies
composed of local government officials, regional heads of
departments and other government offices, and representatives from
NGOs within the region for purposes of administrative
decentralization to strengthen the autonomy of the units thereon
and to accelerate the economic and social growth and development
of the units in the region.
The provisions of the 1987 Constitution would serve as the legal precedent
for the enactment in 1989 of two laws creating autonomous regions in Muslim
Mindanao and the Cordilleras. Then, in 1991, after almost five years of debate
in Congress, the Local Government Code or RA 7160 was enacted. This law is
by far the most focused on devolution and democratic decentralization in the
country. It is also considered the most important piece of legislation to emerge
from the Aquino administration.
The 1991 LGC is a product of both external and internal factors, although
internal factors play a stronger role in terms of the actual contents of the legal
basis as well as the dynamics of its implementation." Decentralization has been
carried out not solely for the traditional public administration arguments but,
more important, in light of its democratic dirii<e"n-sions and other political
considerations. There are mixed motives and a conjuncture of political factors
in he decision to undertake decentralization. First, there are practical and
administrative reasons. For decades and peaking with Marcos's dictatorship, a
formal centralized structure failed to deliver services. This failure is especially
relevant in a diverse archipelago of thousands of islands. In addition, overly
centralized formal mechanisms limited prospects for development in the
countryside.
Second, the Philippines undertook decentralization after the overthrow of
Marcos for idealistic reasons. President Aquino, civil-society groups, various
leagues of local governments, and some national legislators genuinely felt that
decentralization and local autonomy were more than administrative innovations.
They were tools toward achieving democratization and vice versa. The Code
was meant to be the centerpiece of a government that came into power by
overthrowing a dictatorship.
Finally, political leaders also have personal reasons for undertaking
decentralization. Obviously, traditional local politicians saw the new benefits
37. Maria E!a l. Atienza, "The
Politics of Health Devolution in the they would reap from devolution. More important, subject to the new
Philippines: Experiences of
Municipalities in a Devolved Set- constitution's imposition of term limits, members of the House of Representatives
up," Philippine Political Science
Journal 25, no. 48 (2004): 28-30. were motivated by a desire to assume local government positions in the future
38. This is the central
argument developed by Kent
in an environment where significant powers and finances have been devolved
Eaton in "Fiscal
in Developing
Decentralization
Democracies
to LGUs.38 In terms of the timing of the Code's approval, many legislators were
What's at Stake for Legislators?" also motivated by a desire to get reelected or get elected to higher positions in
(unpublished paper presented at
the Yale Colloquium on Decen- the coming elections. Thus, hasty approval of the decentralization law, after not
tralization and Development,
Yale, October 8, 1999). paying attention to it for a few years since its introduction in 1987, without
39. In order to prevent local
executives to use their enhanced careful deliberation was seen as a way of gaining significant support and votes.
powers to build independent
support networks that would But House legislators, as natural competitors of local politicians, also inserted
challenge 1egi5lators' interests,
legislators inserted the following
provisions that still made LGUs and local politicians dependent on favors and
in the Code: 1) the requirement
for the Commission on Audit to
patronage assistance that the former can dispense." In particular, the skewed
review and audit the fiscal
accounts of the LGUs; 2) strong
distribution of the internal revenue allotment reflects the reality that governors
mechanisms to recall local are a more common threat to House legislators than other local executives.
officials, including treasurers and
auditors appointed by local chief There are also several environmental factors that facilitated decentralization.
executives; and 3) the need for
LGUs to absorb and pay the First, while Philippine government had formally been structured as centralized
salaries of all government
employees devolved from the and control of resources was mostly disbursed from the center, local governments
national government, including
those that owe their jobs to historically, as shown previously, had been strong and autonomous. They
national legislators in the 1992
elections. See Eaton, "Fiscal gradually gained formal administrative powers until 1972. Unlike most of their
Decentralization in Developing
Democracies," 17-18, for more
Southeast Asian counterparts, Philippine LGUs have a long history of
details. institutionalization and development. Second, there is a legal enabling environment
for decentralization through the 1987 Constitution. Finally, the international

environment since the 1980s, as mentioned earlier, is favorable to decentralization.
In particular, donor agencies in the Philippines, like the US Agency for International
Development (USAID), have emphasized and supported democratic
decentralization, local governance, and people's participation since the 1980s.
II The Locol Government System ond Changes

Brought obout by the 1991 Locol Government Code
The most significant boost to the current local government system is the
enactment of the 1991 LGC or RA 7160, which devolves significant powers to
LGUs. Turner stressed that the devolution experiment in the Philippines is
particularly noteworthy "because it marks a break with the traditions of
centralization that have generally characterized South-East Asia."40 The Code
contains five features that set it apart from previous decentralization attempts in
the country, thereby earning for itself comments of being revolutionary or radical
in character. First, the Code devolves or transfers the responsibility for the
delivery of various aspects of basic services to local governments. The most
significant devolved services include health, agriculture, environment and natural
resources, social services, and public works funded by local funds. Some services
in the area of education, tourism, telecommunications services, housing projects,
among others, were also devolved. (See table l for details.) Second, the Code
transfers certain regulatory and licensing powers to local governments. These 40. Mark Turner, "Conclusion:
Learning from the Case-Studies,"
include reclassification of agricultural lands, enforcement of environmental laws, in Central-Local Relations in Asia-
Pacific: Convergence or Diver-
inspection of food products and quarantine, enforcement of the National Building gence? ed. Turner, 237.
41. The formula for the
Code, operation of tricycles (a small-scale public transport), processing and horizontal distribution of these
resources to individual provinces,
approval of subdivision plans, and establishment of cockpits and holding of cities, and municipalities is
calculated on the basis of 50
cockfights. Third, it increases the financial resources available to LGUs by percent for population, 25 percent
equal share to all, and 25 percent
broadening their taxing powers, providing them with a specific share from the by land area. Each barangay with
at least one hundred inhabitants
national wealth exploited in their area (e.g., mining, fishery, and forestry), and shall receive a minimum of
increasing their automatic share from national taxes, i.e., the internal revenue PhPB0,000 per year chargeable
against barangay shares from
allotment (IRA) shares, from a low 11 percent to as much as 40 percent. Of the IRA. However, it must also be
mentioned that the 1991 LGC
IRA automatically transferred to LGUs, 20 percent goes to the barangay, 34 mandates that the President may
adjust the IRA of LGUs if the
percent to municipalities, 23 percent to cities, and 23 percent to the provinces.41 following are met: 1) in case the
national government incurs an
The Code also increases the elbowroom for LGUs to generate revenues from unmanageable public sector
deficit; 2) upon recommendation
local fees and charges. (See table 2 for available sources of revenues for LG Us.) of the Secretaries of Finance,
Interior and Local Government,
Fourth, it lays down the policy framework for the direct involvement of civil and Budget and Management; 3)
after consultation with the
society, most especially nongovernment organizations (NGOs) and people's presiding officers of both Houses
organizations (POs), in the process of local governance-in other words, some of Congress and the presidents of
LGU leagues; and 4) the allotment
degree of debureaucratization. More specifically, this is clone through the shall not be less than 30 percent
of BIR gross collections of the
following: third preceding fiscal year.
1. Sectoral representation in local legislative councils, in particular

representing women, workers, and other sectors as determined by
the specific sanggunian.
2. Allocation of specific seats for NGO and PO representatives in local
special bodies like the local development council, the local health
board, and the local school board.
3. Participation in political exercises like plebiscite, referendum, and
recall.
4. Involvement in the planning and implementation of development
programs.
Table 1.
Devolved Services, Facilities, and Powers to Local Government Units
Based on the 1991 Local Government Code
Basic Services and Facilities Devolved . Agricultural extension and on-site research
.. (DA)
Community-based forestry projects (DENR)
Field health and hospital services and other
. tertiary health services (DOH)

Public works and infrastructure projects
.. funded out of local funds (DPWH)

School building program (DECS)
. Social welfare services (DSWD)

Tourism facilities and tourism promotion
. and development (DOT)

Telecommunication services for provinces
.. and cities (DOTC)

Housing projects for provinces and cities
Other services, e.g., investment support,
industrial research and development
Regulatory Powers Devolved .. Reclassification of agricultural lands (DAR)
.. Enforcement of environmental laws (DENR)

Inspection of food products (NMIC-DA)
. Quarantine (DOH)
Enforcement of the National Building Code
.. (DPWH)
Operation of tricycles (L TFRB-DOTC)
Processing and approval of subdivision
. plans (HLURB)
Establishment of cockpits and holding of
cockfights (PGC)
Enhanced
Corporate
Governmental
Powers
and . Full autonomy in the exercise of proprietary
rights and management of economic
. enterprises
Authority to secure domestic or foreign
grants without need of national government
.. approval
Cooperative undertakings among LGUs
Exemption from payment of customs duties
. for imported heavy equipment

Authority to extend loans to other LGUs and
to provide assistance to calamity-stricken
LG Us
Table 2.
Sources of Revenues of Local Government Units
Accordingto the 1991 Local Government Code
Locally Generated Externally Sourced
..
Business Tax and Other Local Taxes
Higher ceilings for tax rates
Graduated fixed rates; percentage
Share in BIR Collections
Allotment)
(Internal Revenue
tax for gross receipts exceeding Share in Proceeds from National Wealth
. specific levels
Tax on income of banks and other Loans, Credits, Bonds, and BOT and
. financial institutions
Tax on forest products and forest
B-T Schemes
.. concessions
Tax on mines and mineral products
Expanded coverage of situs (location)
Grants (Domestic and Foreign)
of tax rule (plantations and project
. offices)
Authority of LGUs to adjust tax rates
once every five years but not to
exceed 1 O percent of rates prescribed
. in the Code
LGU authority to grant tax exemption
. privileges
Withdrawal of local tax exemption
privileges of GOCCs
.
Real Property Tax
Reduction of assessment levels on land
(residential) and buildings (residential,
.. agricultural, and commercial)

Higher ceilings for real property tax rates
Sanggunian to fix assessment levels
Income from Economic Enterprises
Fees and Charges
These openings for civil society are meant to promote not only popular
participation but also local accountability and transparency. Finally, the Code
encourages LGUs to be more entrepreneurial by providing them with
opportunities to enter into joint ventures with the private sector, engage in
built-operate-transfer (BOT) arrangements, float bonds, obtain loans from local
private institutions, and the like. All of these are within the context of encouraging
LG Us to be more "business-like" and competitive in their operations. In a sense,
the Code encourages them to be less reliant on the national government and
instead generate their own resources. Of course, the Philippine president still
has the authority to exercise general supervision over LGUs. this authority is
delegated to the Department of the Interior and Local Governments (DILG), the
successor of the pre-Martial Law Department of Local Government and
Community Development.
Currently, at the local government level, the country has the following
levels: provinces, cities, municipalities, and the village-level barangays (see figure
1). In the case of cities, however, certain higher-income cities are autonomous
and classified as highly urbanized/chartered cities, while the rest are component
cities that, like municipalities, are under provincial supervision. Each local
government level has an elected set of chief executive and members of a
legislative body called sanggunian as well as a bureaucracy. As of 2002, local
governments consist of79 provinces, 114 cities, 1,496 municipalities, and 41,945
barangays. (The requirements for the creation of various local governments are
shown in table 3.) For planning purposes, the country is divided into sixteen
regions, each with a Regional Development Coordinating Council composed of
provincial governors, city mayors, and representatives from different national
government agencies and the private sector. These regions include the
Autonomous Region in Muslim Mindanao (ARMM), the Cordillera Administrative
Region (CAR), and the National Capital Region (NCR). To date, the ARMMis the
only regional government in the country, with its own set of popularly elected
executive and legislative officials.
Figure 1.
The Structure of Local Governments in the Philippines
National
Government
Province Highly Urbanized

City
Component
Municipality
City
Barungay Barungay Barang.iy
Table 3.
Criteria for Local Government Unit Creation
According to the 1991 Local Government Code
LGU Income Population Land Area
Barangay 2,000/
5,000 for Metro Manila
and other Metropolitan
Political Subdivisions)
Municipality P 2.5 M 25,000 50 sq. km.
City P 20 M 150,000 100 sq. km.
Highly Urbanized City P 50 M 200,000
Province P 20 M 250,000 2,000 sq. km.
- Devolution's Impacts, Issues, and Challenges

If one subscribes to the more traditional view of local politics and governance,
then, one will conclude that the LGC, by giving more power to local officials,
might be counterproductive. Traditional politicians would merely perpetuate
their hold on power instead of encouraging democratic decision making and
participatory development. Looking at the present crop of local leaders, it is
true that traditional politicians have not certainly disappeared. But on the other
hand, social and economic changes since the 1970s, such as economic growth
outside Manila, urbanization, increased media penetration, rapid growth of the
middle class, changes in sources of electoral financing, and spread of global
awareness, seem to have challenged the hold of traditional local elites. In addition,
democratization and the progress made by civil society lend a counterweight to
traditional Philippine politics.
Based on different sources of empirical data, Rood concludes that
decentralization, or more specifically devolution, is contributing to democracy
in the country. This is based on three indicators of democracy at the local level:
public opinion, electoral outcomes, and popular participation.42 First, based on
survey data on how citizens view their local governments, respondents in
nationwide surveys show that they are more satisfied with provincial, city, and
municipal governments than they are with the national government. It is
significant that citizens feel more able to influence these lower levels of
government. Second, based on the 1992 and 1995 local elections, winners
typically won with less than half of the vote. This is due to votes being split
among so many candidates, which is part of the trend toward more candidates
for each office, which is in turn due to a larger pool of middle-class citizens.
Also in 1995, less than one-third of the governors reached their constitutionally
prescribed maximum of three terms, and fully two-fifths were elected to their
first term." With respect to the disadvantaged sectors like women arid indigenous
peoples, the results in relation to democracy are mixed. Women are better
represented at lower levels of government, but rarely do they form more than
one-fourth of elected officials. Indigenous peoples, meanwhile, are well
represented in areas where they form a majority of residents, such as in the
Cordillera. But in areas swamped by in-migrants like those in Mindanao, the
indigenous people's representation is low. As mentioned, the LGC provided for
sectoral representation in the local councils. However, such representation has
been postponed in the absence of a law from Congress specifying the proper 42. Rood, "Decentralization,
Democracy, and Development." in
mode of selection. Interestingly, the regularly elected local officials supported The Philippines: New Directions in
Domestic Policy and Foreign
such postponement. Third, in the area of people's participation in local Relations, ed. David G.
governance, the Rapid Field Appraisals (RFAs) undertaken since 1992 by the Timberman (New York and
Singapore: Asia Society and
Local Development Assistance Project (LDAP) and the Governance and Local Institute of Southeast Asian
Studies, 1998), 127-30.
Democracy (GOLD) Project of the USAID found that in the early stages of LGC 43. Ibid., 127-28.
implementation, there had been minimal interference in the accreditation of

NGOs and in the selection of representatives of local special bodies. As time
went on, local governments fulfilled the Code to the letter with respect to local
special bodies, but there are doubts as to whether this was leading to genuine
democracy." Local development councils tend to be large and unwieldy, difficult
to convene, and hard to manage for meaningful results. But other studies point
to evidence of effective citizens' participation in different policy areas. While
not true for all LGUs all over the country, decentralization has encouraged
citizens' participation in local governance. For instance, Naga City passed a
people empowerment ordinance to institutionalize people's participation as a
result of a very strong NGO/PO community in the city.45 Thus, while the specific
mandates of the Code are not fully operational, there are indications that the
LGC has increased democracy at the local level. In a number of localities, the
Code is influential in producing a mindset that encourages participation.
In the area of development, while the Philippines still falls short in terms of
nationwide development, particularly since the late 1990s, there is anecdotal
evidence suggesting that decentralization helped in some way the process of
development." Budd observed that in some provinces, decentralization merely
meant "a new circle of political and economic elites plundering the local
government for their particularistic interests" and "doling out contracts to their
friends and relatives."? But he also noted that decentralization has also introduced
a new dynamic into Philippine political economy.48 This is because in some
areas, new leaders have been elected and have attempted to promote
development in their regions. Some of them even have degrees in Economics
44. lbid., 130.
45. Takeshi Kawanaka
or Management and are willing to work with civil-society groups. Decentralization
documented the case of Naga
City in his book Power in a
and globalization combined also unleashed a strong impetus for change. Side!
Philippine City(Chiba: Institute for argues that foreign multinational and aid agencies place pressure on local officials
Developing Economies and Japan
External Trade Organization, not to engage in "business as usual." This is because while infusion of new
2002). He shows how Jesse
Robredo, a young MBA holder capital into localities means profits for elected officials, officials are also led to
who became mayor of Naga City
and considered as one of the best cede some of the freedoms they enjoyed in the past. 49 In the past, a governor or
and progressive Philippine
mayors at pr.esent, combined his/her cohorts can secure the contract for the provincial road but need not
good governance and political
machinery to maintain a firm
complete its construction. But today, "the road must be built more or less to
political base within both middle
and poor classes.
specifications to handle the flow of traffic and to entice investors to expand
46. Rood, "Decentralization,
Democracy, and Development,"
their factory operations, golf course developments, and residential subdivisions
130-33. in the province.'?" Otherwise, investments will move to neighboring provinces
47. Eric N. Budd, "Political
Economy of Developmental and with better roads and government services. Thus, decentralization and
Patrimonial States: A Case Study
of the Philippines and Indonesia," globalization, as concomitant trends, have made at least some localities and
Philippine Political Science
Journal 21, no. 44 (2000): 21. their local officials more competitive, and there is now stronger pressure to
48. Ibid., 21.
49. John Sidel, "Take the perform.
Money and Run? Personality
Politics in the Post-Marcos Era," In response to the Code and the limits of financial assistance from the
Public Policy 2, no. 3 (July-
September 1998): 33.
national government, the promotion of economic activity is a growing concern
50. Ibid., 33. of some local governments. Major cities and a number of municipalities and
provinces are now engaged in systematic investment promotion. A small but

growing number of local governments are also beginning to avail themselves of
other forms of nontraditional financing, like bond flotation, loans, and BOT
mechanisms. This means that some LGUs have become entrepreneurial as the
Code mandates. A trailblazing and innovative LGU project in this respect is the
rebuilding of the Mandaluyong City public market in Metro Manila through the
BOT scheme. This successful BOT scheme in constructing public markets has
been imitated successfully by San Jose in Antique and Dingras in Ilocos Sur.
Victorias in Negros Occidental and Legaspi City in Albay have used bond-
floatation schemes in constructing public housing. The city of Munoz in Nueva
Ecija completed its own equipment pool by simply asking national government
agencies to transfer their unused and dilapidated heavy equipment to the LGU.
Now, the city has its equipment pool rented by neighboring LGUs. These are
just some examples of local government innovations since the passage of the
1991 LGC. The RFAs have also found that local governments now spend more
on social and economic services than did national agencies before the passage
of the LGC. However, there are no concrete data on the effect of this increased
expenditure. There are cases of local governments, including leaders and
communities, taking their responsibilities seriously, particularly in agriculture,
environment, health, and systematic planning. But unfortunately, some agencies
of the national government, notably NEDA, the Commission on Audit, the Civil
Service Commission, and the Department of Finance, still do not seem to fully
subscribe to the changed setup.51
In the area of governance and public administration, local governments are
becoming sources of innovations and defenders of decentralization. For one,
the computer revolution itself has brought opportunities for LGUs to improve
governance at the local level. A prime example here is the province of Bulacan,
which is attempting to bring about a "paperless bureaucracy" in its overall
attempt to reinvent the operations and process of local governments by harnessing
the potentials of information and computer technology. The organizations of
LGUs are also becoming more assertive. This is evidenced by the organization
of various leagues and alliances ranging from the Union of Local Authorities of 51 . 9th Rapid Field Appraisal
(RFA): Synopsis of Findings
the Philippines (ULAP), the consolidation of various LGU groupings, to the (Makati: Governance and Local
more specific League of Provinces, League of Cities, and League of Municipalities. Democracy [GOLD] Project,
December 1999).
Local officials at various levels have also organized themselves into their own 52. Brilliantes, "Philippines:
Sustaining the Gains of
leagues, such as the League of Governors, Vice Governors' League, Philippine Decentralization ," in Oecen-
tralization and Power Shift: An
Councilors' League, and the National Movement of Young Legislators. Thus, Imperative for Good Governance
(A Sourcebook on Decen-
reliance upon traditional governmental mechanisms to advocate local concerns, tralization Experiences in Asia),
volume 1, ed. Brilliantes and Nora
in this case through the DILG, has become much less.52 These LGU-based G. Cuachon (Diliman, Quezon
City: University of the Philippines
organizations have proposed major amendments to the Code, including reforming National College of Public
Administration and Governance's
the IRA distribution to make it more equitable; they are at the forefront of Center for Local and Regional
resisting unfunded mandates from Congress that tend to distort development Governance, 2002), 159.
efforts, and have also entered into strategic alliances with like-minded sectors
of civil society, including NGOs and POs. To defend the gains of decentralization,
these leagues are also funding policy studies to back up their position.
Furthermore, decentralization has also encouraged LGUs to cooperate among
each other and enter into intergovernment cooperative schemes to address
common concerns. These are mostly in the area of ecological management, but
intergovernment cooperation is also growing in the health field, particularly in
hospital referral and medicine procurement. In addition, some provinces are
taking seriously the Regional Development Councils in which they are members.
On the other hand, the NGO community is now mobilizing to defend the
gains of democracy that the Code represented, and they are interested in getting
facts to back up their position. For instance, the Caucus of Development NGO
Networks (CODE-NGO) has commissioned a research in 1996 to review cases
of nongovernment participation in local governance and to assess the 1991
LGC.53 Since 1996, CODE-NGO has also conducted national and regional
dialogues aimed at reviewing NGO experiences under the LGC and at the same
time coming up with strategies to increase popular participation in local
governance.54 There is also an effort on the part of the NGO-PO Working Group
on the Local Government Code spearheaded by the Institute of Politics and
Governance (IPG) not only to document case studies but also to draw up a bill
amending the Code in order to solve certain problems identified by the
nongovernment community.
However, major problems and challenges remain.55 First, while the Philippines
has a vibrant civil society and media nationally, their local presence is uneven.
In many parts of the country, for instance, the number of NGOs is still insufficient
to fill available places on local special bodies or even to meet the more traditional
demand for NGO partners for "pork barrel" programs originating from Congress.
Successful partnerships between LGUs and NGOs/POs have only been
5:1. This study refers to Alberto
C. Agra, "Literature Review of established in some areas, predominantly those with strong NGO-PO networks
Selected Case Studies and
Documents on Popular Partici- and where ex-NGO or political activists occupy or have occupied important
pation in Local Governance and
Administration" (typescript report local government positions. Local media, for their part, are mostly owned by
for CODE-NGO, Makati, April
1996).
prominent families in specific localities. Independent local media groups are
54. CODE-NGO, "Toward
Greater and Effective Popular
also small and sometimes threatened by powerful local interests. These issues
Participation in Local Gover- are important because a strong civil society and effective mass media at. both
nance: A Policy Dialogue"
(unpublished proceedings, local and national levels are necessary to participate in decision making and
CODE-NGO, June 1996).
55. Brillantes, "Decentralized enforce accountability. But since the overall picture is still mixed, the
Democratic Governance Under
the Local Government Code," 51. institutionalization of grassroots participation at the local level is still far off.
Hutchcroft, "Sustaining Poli-
tical and Economic Reform: The Second, while there is increasing trend toward more democratic and effective
Challenges Ahead," in The
Philippines: New Directions in local government, some parts of the country are still governed by traditional
Domestic Policy and Foreign
Relations, ed. Timberman, 39-42.
politicians who use patronage and coercion. These are also supported by a
Rood, "Decentralization,
culture that tolerates such "old-style" politics and is marked by the absence of
133-34. strong civil-society groups. Some of the democratic aspects of the Code like
recall, initiative, and referendum can also be exploited by local elites who disagree
with the incumbent officials. More important, some local officials misspend the
LG Us' resources at the expense of basic services like health and social services.
The IRA, for instance, is relatively unburdened by earmarking and other
expenditure constraints. Of course, LG Us are required to spend at least 20 percent
of the IRA on "development projects," to use a further 5 percent for disaster
relief efforts, and to spend not more than 45 to 55 percent (depending on the
LGU revenue class) of their regular income on personnel. But these minimal
requirements still actually leave significant latitude to LGUs in expenditure
decisions.
Third, even nontraditional and well-intentioned local officials may not be
able to do a lot at once. This is because some areas are simply too small or too
poor to have surplus resources to invest. This differentiation is inevitable. In
some areas also, local governments are faced with bureaucratic inertia, with
local government employees inexperienced with the new tasks assigned to
them joined by employees from devolved national agencies inexperienced in
working in a local environment.t" There also seems to be a disincentive in
terms of using the new tax powers granted by the Code as introduction of a
new tax is both unpopular and complicated.
Fourth, it has now become obvious that there is unequal distribution of
financial resources, particularly the IRA. The current skewed distribution
formula among various levels of local governments resulted in cities gaining
a windfall while municipalities and provinces, which bear 92.5 percent of
all devolved services, find it harder to cover the cost of devolution. In
particular, municipalities are having more financial difficulties compared to
provinces and cities. This is despite the fact that the IRA shares of LGUs
have significantly increased the financial resources of many local
governments, with the IRA constituting a bulk of the budgets of most of the
lower class municipalities. Many LG Us have been unable to afford the salaries
of the national personnel devolved to them, particularly for the health sector
whose salaries are based on the Magna Carta for Health Workers. In addition,
the IRA, as a fund transfer from the national government, is also vulnerable
to national constraints and changing priorities. The Ramos administration
cut the IRA by 5 percent due to the Asian financial crisis. The Estrada
administration also added to the financial problem by cutting the IRA by 10
percent in the name of the Local Government Stabilization and Equalization
Fund, again as a response to the Asian financial crisis. This was done despite
massive protests of LGU personnel headed by local chief executives
themselves. Upon assuming office in 2001, President Gloria Macapagal-Arroyo
said that she supports the original automatic release of the IRA to the LG Us.
However, the fiscal crisis and the resulting belt-tightening policy have also 56. Rood, "Decentralization,
forced the administration to cut the IRA of LG Us. 133.
A related issue in terms of inequitable distribution of finances is that in spite

of devolution, there is "creeping recentralization" of government finance through
the years, that is, national government institutions still continue to dominate in
the allocation of resources. To be more specific, while certain responsibilities
have already been transferred to LGUs, budgetary allocations of devolved national
government agencies have actually continued to increase despite significant
decline in their responsibilities and functions, especially during the initial years
of devolution. This can be attributed to the "augmentation funds" inserted by
national legislators. In addition, according to the League of Provinces, the
countryside development funds and congressional initiatives as well as insertions
of many individual members of Congress are actually higher than the budgets
of entire provinces.57 Tables presented by Brillantes show evidence of how the
IRA shares of LG Us increased from 1991 to 1997 but still comprised less than 15
percent of the total national budget and how budgets of national government
agencies affected by the LGC, excluding the Department of Public Works and
Highways, increased even after devolution." Thus, even with the passage of the
LGC, national budgeting continues to be inefficient by still favoring national
agencies despite devolution of substantial responsibilities, personnel, and facilities
to LGUs.
Fifth, and obviously, personnel problems persist. In the first few years of
implementation of the Code, about seventy thousand national employees were
devolved to LGUs. Devolved employees feared a reduction in career
opportunities, non-insulation from local politics, and lower local government
salary levels than those of central agencies. From the LGUs' perspective,
meanwhile, they were reluctant to absorb former central agency officials due to
ineptness, incompetence, and duplication.59 Protected higher salary rates of
devolved personnel, especially health workers, could also be a source of
demoralization for existing local government employees. In fact, health workers
who were the largest sector devolved to LGUs were able to lobby the two
Houses of Congress to pass a health recentralization bill shortly after the passage
of the LGC due to demoralization and other personnel problems as a result of
devolution. But President Ramos vetoed the bill in 1995. Today, complaints
from devolved personnel are not as strong as during the early years of
decentralization. However, these personnel issues need to -be resolved,
particularly since there are still complaints about particular LGUs that support
loyalty and political favoritism over merit.
Thus, more than ten years since the enactment of the LGC, gains have been
57. Brillantes, 'Philippines,'' achieved but there are also important problems. The full potential of the 1991
157.
58. See Brillantes, "Decan- LGC will only be realized and the current decentralization experiment will indeed
tralized Democratic Governance
under the Local Government
be considered revolutionary if the challenges are adequately met not only by
Code," 54, 56. various levels of government but by nongovernment sectors as well. More
59. Turner, "The Philippines,"
118. specifically, some of the problems and issues surrounding the implementation
of the LGC have resulted in different drafts for amending specific provisions of
the Code coming from different sectors. The goal of most of these proposed
amendments is to increase the effectiveness of the Code. But as of this writing,
there have yet to be concrete amendments passed by Congress.
Ill Conclusion
While the 1991 LGC is not the first decentralization law in the country, it is
the most radical in terms of the extent of powers, responsibilities, resources,
and personnel decentralized to the LGUs. The decentralization reform as a
result of the 1991 LGC has also affected the behavior of LG Us, officials, NGOs,
POs, national government, and national politicians. There are cases in which
decentralization has triggered more participatory and development-oriented
LG Us, even those historically known as bastions of traditional politics. Different
sectors, particularly various local officials and the nongovernment sector, have
also slowly but gradually adjusted to the demands of the Code. However, not
all LGUs all over the Philippines have become more democratic or more
developed as a result of decentralization. Some national government officials
and agencies still have centralist tendencies that prevent meaningful
decentralization. But in only a little more than a decade, it can be argued that
there are some significant changes, particularly as seen in local cases that are
meeting the challenges of devolution.
Several trends contribute to a more optimistic future for decentralization in
the Philippines: a favorable international environment, a vibrant civil society
that defends the gains of democracy and pushes for more genuine democracy,
increasing participation of a larger number of citizens in both national and local
politics, changing social and economic conditions, a growing pool of trained
and competent local officials and personnel, and the exemplary LGUs that met
the challenges of decentralization head-on and made significant progress despite
constraints. Yet, the impediments are not negligible: the continued survival of
traditional politics as well as uninformed and unorganized citizenry in some
areas; incompetent and unmotivated local personnel in a number of areas; the
uneven performance of the formal democratic institutions; the more democratic
innovations of the Code-such as the local special bodies, sectoral representation,
recall, initiative, etc.-that have not yet achieved their full democratic potentials;
continued poverty and inequality; glitches in the Code itself that have become
evident in its implementation; and efforts on the part of national politicians to
distort fiscal and budgetary processes for their own benefit and at the expense
of LG Us.
The current decentralization experiment is only a little more than a decade
old. It will take more years or decades to actually come up with a more systematic
assessment of how it has changed Philippine politics. Building the capacities of
LG Us, the national government, NGOs, POs, and citizens in general to meet the
demands of decentralization is a long-term process. Yet, what is obvious at this
point is that subtle changes as a result of decentralization are already being
noticed and that decentralization, barring any radical change in Philippine politics,
is here to stay. While big problems and challenges remain, improvements and
good cases must be examined.
Guide Questions
1. Define decentralization. What are the different types of decentralization?

How is decentralization related to democratization?
2. Would you describe national-local relations from the Spanish period to
the Aquino administration prior to the enactment of the 1991 Local
Government Code as highly centralized? Explain your answer.
3. What are the major changes brought about by the 1991 Local Government
Code?
4. Describe briefly the levels of local governments in the Philippines.
5. What are the major impacts, challenges, and problems brought about by
devolution?
Glossary
Autonomy - literally self-rule; arrangements for self-government of a territory or
region within a nation-state with degree of autonomy depending on the
range of powers devolved and functions decentralized.
Decentralization - the transfer of planning, decision making, or administrative
authority from the central government to its field organizations, local
governments, or nongovernment organizations.
Deconcentration - administrative decentralization; involves the redistribution of
administrative responsibilities only within the central government,
primarily through its field offices.
Delegation - a form of decentralization where decision making and management
authority for specific functions is delegated to organizations that are not
under the direct control of central government ministries.
Democratization - the advance of democratic reform, implying, in particular, the
granting of basic freedoms and the widening of popular participation
and electoral choice.
Devolution - political decentralization; transfer of powers from the national
government to local government units.
Chapter I 6: Local Governments and Devolution in the Philippines
Governance - broader than the term "government"; although still without a

settled or agreed definition, refers in its widest sense to the various ways
through which social life is coordinated. Government can thus be seen
as one of the institutions involved in governance.
Local democracy - a principle that embodies both the idea of local autonomy
and the goal of popular responsiveness.
Local government - the lowest level of elected territorial organization within the
state; where the day-to-day activity of politics and government gets done.
RA 7160 - the 1991 Local Government Code that transformed fundamentally
central-local relations and probably the most radical law to elate that
strengthens the powers of local governments but also increases the latter's
responsibilities and encourages the participation of communities and
organizations in local governance.
Unitary government - where sovereignty lies exclusively with the central
government. Subnational authorities, whether regional or local, may make
policy as well as implement it but they do so by permission of the center.
II Further Reading
Atienza, Maria Ela L. "The Politics of Health Devolution in the Philippines:
Experiences of Municipalities in a Devolved Set-up." Philippine Political
Science journal 25, no. 48 (2004): 25-54.
Brillantes, Alex B. "Philippines: Sustaining the Gains of Decentralization." In
Decentralization and Power Shift: An Imperativefor Good Governance
(A Sourcebook on Decentralization Experiences in Asia), volume 1,
edited by Alex B. Brillantes and Nora G. Cuachon, 151~63. Diliman,
Quezon City: University of the Philippines National College of Public
Administration and Governance's Center for Local and Regional
Governance, 2002.
de Guzman, Raul P., Mila A. Reforma, and Elena M. Panganiban. "The Evolution
of Local Governments in the Philippines." In Local Governments in the
Philippines: A Book of Readings, volume 1, edited by Tapales, Jocelyn
C. Cuaresma, and Wilhelmina L. Cabo, 103-20. Diliman, Quezon City:
University of the Philippines Center for Local and Regional Governance
and National College of Public Administration, 1998.
Hutchcroft, Paul D. "Colonial Masters, National Politicos, and Provincial Lords:
Central Authority and Local Autonomy in the American Philippines,
1900-1913." journal of Asian Studies 59, no. 2 (May 2000): 277-306.
Philippines. The Local Government Code. Republic Act No. 7160. 1991.
Rood, Steven. "Decentralization, Democracy, and Development." In The

Philippines. New Directions in Domestic Policy and Foreign Relations,
edited by David G. Timberman, 111-35. New York and Singapore: Asia
Society and Institute of Southeast Asian Studies, 1998.
Tapales, Proserpina Domingo. "History and Evolution of Philippine Local
Government and Administration." In Local Government in the
Philippines: A Book of Readings, volume 1, edited by Tapales, Jocelyn
C. Cuaresma, and Wilhelmina L. Cabo, 121-36. Diliman, Quezon City:
University of the Philippines Center for Local and Regional Governance
andNational College of Public Administration, 1998.

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An Introduction

In collaboration with the

Copyright 2006 by the authors and the Department of Political Science

All rights reserved.

Editorial Consultant:Laura L. Samson

Printed in the Philippines by COR ASIA, Inc.

At the end of this chapter, the student should be able to:

Decentralization and Democratization

of these forms of decentralized planning, decision making, and administration

constitution contained provisions guaranteeing local government autonomy, local

accompanied delegation of power for planning and implementation. The result

1. Creation of autonomous regions in Muslim Mindanao and the

for decentralization through the 1987 Constitution. Finally, the international

II The Locol Government System ond Changes

1. Sectoral representation in local legislative councils, in particular

. tertiary health services (DOH)

.. funded out of local funds (DPWH)

. Social welfare services (DSWD)

. and development (DOT)

.. and cities (DOTC)

Regulatory Powers Devolved .. Reclassification of agricultural lands (DAR)

.. Enforcement of environmental laws (DENR)

. for imported heavy equipment

Locally Generated Externally Sourced

of tax rule (plantations and project

.. agricultural, and commercial)

Fees and Charges

Province Highly Urbanized

Barungay Barungay Barang.iy

LGU Income Population Land Area

- Devolution's Impacts, Issues, and Challenges

implementation, there had been minimal interference in the accreditation of

provinces are now engaged in systematic investment promotion. A small but

A related issue in terms of inequitable distribution of finances is that in spite

1. Define decentralization. What are the different types of decentralization?

Governance - broader than the term "government"; although still without a

Rood, Steven. "Decentralization, Democracy, and Development." In The

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