Manila, April 18, 2006 AEST (ABN Newswire) - Asian Development Bank (ASX: ATB) will help the Philippine Government strengthen governance and financial management in local government units (LGUs) through a technical assistance (TA) grant of US$1.8 million.
The grant, provided in response to a request from the Philippine Government, will address three key aspects of local governance: an improved legal framework for decentralization; transparency and effectiveness in managing expenses and budget procedures; and better mobilizing of resources to provide needed services to their constituents.
"While much progress has been made in terms of decentralizing government operations over the past 14 years in the Philippines, the ambitious vision of effective and autonomous local governance has only been partly realized," says Tariq H. Niazi, an ADB Public Resource Management Specialist.
Effective governance at the local level is hampered by the weak framework for decentralization, as well as by constraints both at the local and national level. At the same time, LGUs have frequently been unable to locally raise sufficient financial resources for their needs, leading to heavy dependence on the national budget and not enough funds for essential infrastructure investment.
To achieve its objectives, the grant will support studies to improve the local government code and other related laws and regulations; activities to strengthen national agencies in their overseeing and support for LGUs; and training to boost their budgeting, expenditure management, borrowing and debt management, and taxation.
LGUs in around three provinces will be selected for participation in the project based on their prospects for accessing credit markets and commitment to improved governance, among others.
"LGUs are the frontline of government social service provision, at which more than 20% of total government spending takes place," adds Mr. Niazi. "By helping LGUs to operate more efficiently and effectively, the grant will contribute to improved local welfare without requiring additional Government transfers."
The total cost of the TA is estimated at $2,575,000. The Government will contribute the balance of $775,000 equivalent in the form of office space, staff support, and other items. The Department of Interior and Local Government is the executing agency for the TA, which will be carried out over two years beginning June 2006.
Contact
Rita Festin
Email: rfestin@adb.org
Tel:+ 632 683 1006; + 63917 8884949
Graham Dwyer
Email: gdwyer@adb.org
Tel:+632 632 5253; +632 898 3413; +63 915 741 4363
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