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A scorecard on local governance

The Department of Finance (DOF) recently published in a national broadsheet a list of 87 municipalities out of about 1,400 local government units (LGUs) that got failing marks in managing local funds for three consecutive years, from 2010 to 2012 .

The DOF graded the LGUs in the areas of revenue generation capacity, local collection growth, expenditure management, and reportorial compliance through the LGU Fiscal Sustainability Scorecard.

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According to the DOF, “the scorecard aims to institutionalize the regular publication of fiscal indicators and performance review of the LGUs in the spirit of accountability and good local financial housekeeping.” (http://iskor.nlgf.gov.ph).

Where are these municipalities?

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Of the 87 failing LGUs, 65 are in Luzon (out of 700), six in the Visayas (out of 369) and 16 in Mindanao (out of 422). There were some 1,490 municipalities in the country in 2014, according to the Department of the Interior and Local Government (DILG). The percentage of failing marks is small at less than 6 percent. It is 9.3 percent in Luzon, only 1.6 percent in the Visayas, and 3.8 percent in Mindanao.

However, almost half of the 87 failing LGUs are found in only seven provinces. In Luzon, 29 LGUs, or 45 percent, are accounted for by only four provinces—Quezon (10), Palawan (7), Isabela (6) and Masbate (6).

In Mindanao, 14 LGUs, or almost 90 percent, are contributed by three provinces —Maguindanao (7), Basilan (4), and Tawi Tawi (3).

People will wonder how these failing marks stack up against poverty indicators. There are no data on municipal level poverty incidence, but even at the provincial level, some correlations for “failing marks” with poverty incidence are revealing.

For benchmark, according to the National Statistical Coordination Board, the national poverty incidence of the population in 2012 was 25.2 percent.

In Luzon, Quezon province had an incidence of 27.5 percent, the highest among the five provinces in its region, compared to the regional (Calabarzon) figure of 10.9 percent. Masbate had the highest incidence at 51.3 percent among six provinces, compared to Bicol’s 41.1 percent.

Isabela had the second-highest incidence at 24.4 percent among five provinces, after the island province of Batanes versus the regional average of 22.1 percent.

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Palawan is a special case. It had the lowest poverty incidence (26.4 percent) among the five Mimaropa provinces, with a regional average of 29 percent. It is endowed with larger farm holdings, and tourism.

In Mindanao, the Autonomous Region of Muslim Mindanao (ARMM) had the highest poverty incidence among all regions in the country at 55.8 percent. Within ARMM, Maguindanao had the second-highest poverty incidence (63.7 percent) after Lanao del Sur (73.8 percent) among five provinces.

Basilan had the second-lowest at 41.2 percent, while Tawi Tawi had the lowest at 28.6 percent. The former has perhaps a lower poverty incidence due to a more diversified agriculture, and seaweed farming for the latter.

Palawan had pockets of problematic governance in seven out of 23 municipalities (30 percent). By contrast, Maguindanao had seven “failing” municipalities out of 36, or 19 percent; Basilan, 4 out of 11 (36 percent); and Tawi Tawi, three out of 11 (27 percent). Compare this with the national ratio of less than 6 percent.

Poverty is a complex issue. But good LGU governance can greatly help alleviate it, even in the face of scarce resources.

The high poverty in ARMM is the major cause of discontent among its highly impoverished population. But it has large swathes of idle and underutilized lands.         Poverty may not be just due to “historical” factors. It is due to unsound project selection and execution.   It is due to deficit in local governance.

Are the local officials listening?

(This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines. The author is the Vice Chair of the MAP Agribusiness and Countryside Development Committee, and the Executive Director of the Center for Food and AgriBusiness of the University of Asia & the Pacific. Feedback at <[email protected]> and < [email protected]>. For previous articles, please visit <map.org.ph>)

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