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ADB okays $300-M loan to help LGU improve services

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By Chino S. Leyco

The Asian Development Bank (ADB) has approved a policy-based loan to help local government units (LGUs) in delivering high-quality and accountable services, boost economic development, as well as reduce poverty.

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In a statement, the Manila-based multilateral institution said yesterday that it approved a $300 million loan under the ADB’s local governance reform program (LGRP) aiming to empower and equipping LGUs to meet the needs of their citizens.

The LGRP is also aimed at ensuring LGUs can deliver services aligned with local preferences, improve their capacity to raise their own revenue, and lower the cost of doing business for the private sector.

Jose Antonio Tan III, ADB’s Southeast Asia Regional department director, said the bank supports the government’s goal of creating a high-trust society, where citizens have confidence in the capacity of local government institutions.

If citizens believe their LGUs can deliver services to communities and provide a simpler business environment for private enterprises, Tan said it will lead to more jobs and strengthen the local economy.

The Philippines is a relatively decentralized nation, especially when compared with its neighbors in Southeast Asia.

ADB has partnered with the government since 2006 on a program of major reforms to ensure decentralization results in inclusive growth, quality service delivery, and better economic opportunities for a rapidly growing population.

As part of more recent efforts to empower LGUs, the government has embarked on reforms to strengthen the legal framework for local service delivery to clarify roles and responsibilities, distribute shared taxes more fairly, and improve the ability of local governments to partner and coordinate on delivering key services.

“The ADB program under LGRP is helping the government provide LGUs with the tools and skills necessary to deliver high-quality public services in an accountable and cost-effective manner,” Robert Boothe, ADB Public Management Specialist for Southeast Asia said.

In 2017, the government institutionalized a three-tier competency scheme and certification program m to ensure local treasury officers are equipped with the necessary skills and competencies to manage local resources.

The government also developed and implemented an online LGU client rating system for business permit application and releasing to enhance citizen feedback on LGU performance and service delivery.

Such measures are helping to raise the country’s overall attractiveness for private sector investment.

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