The Asian Development Bank (ADB) will help local governments in improving their capacity to provide high-quality public services, especially during the coronavirus disease (COVID-19) pandemic.
In a statement, the Manila-based multilateral institution said Friday, Aug.27, that it has approved a $400 million policy-based loan to the Philippines for local government units (LGUs).
Aekapol Chongvilaivan, ADB Public Finance Economist for Southeast Asia said much is expected from LGUs, especially now, as they are at the forefront of public service delivery amid the COVID-19 pandemic.
“The reform program will help ensure local governments have the capacity and adequate resources to quickly respond to the basic needs of local communities at critical times like this,” he added.
Under the new program, ADB supports reforms to move national government functions to LGUs based on the 1991 Local Government Code.
Another reform will increase revenue allocations to LGUs under a 2019 Supreme Court ruling, which clarified the scope of LGUs’ share of national taxes.
Earlier, President Duterte signed Executive Order No. 138 that facilitates the full devolution of basic services and facilities from the national government to LGUs, in compliance with the Mandanas-Garcia ruling of the Supreme Court.
The Bureau of Local Government Finance has set up a property valuation office and a committee will oversee the progress of real property tax reforms. The scope of financing for local development now includes local public–private partnership projects.
The new program builds on ADB’s support since 2006 to help the Philippines boost efficiency, accountability, and transparency in local governments’ financial management and service delivery.