LOOKING AT THE ORGANIZATION

AND FINANCIAL MANAGEMENT OF LOCAL GOVERNMENT

By
Priam Gabriel D. Salidaga

The concept of Local governance is not alien to the Filipino people.

As a matter of fact, the passage of Local Government Code of 1991
(Republic Act 7160) is an act of going back to their historical roots.

Historical accounts show that the ancient governments in the

Philippines were community-based, thus decentralized. Laws always came
only from one man, the Datu, sometimes upon the consultation with the
Councils of Elders.

That is why, there is no wonder when a latest survey reveals that

Filipinos put their trust more to their local officials than the President of the
Republic. By nature, Filipinos are so used to a decentralized government in
which the exercise of executive, legislative, and judicial power is within
their reach, equating the concept of an organization to a pre-Spanish
“Barangay” or a “Barrio”.

With that glimpse of the Filipinos’ frame of mind, it is quite safe to

suppose that the local government of today as an autonomous organization,
and as mandated by the Constitution has brought dynamism to the
bureaucracy. The devolution of powers and services has brought advantages
to the Filipino people as it simplifies government transactions. The basic
services on agriculture, health, social welfare, maintenance of public works
and highways, and environmental protection, are readily availed by the
Filipino people as they do not need to undergo the ascending order of
governmental power to be implemented. Legislation and execution of laws
in the form of ordinances are now undertaken even at the barangay level.
Hence, there is an efficient mobilization of resources to provide needed
services to the constituents.

However, this concept of autonomy as stated in the Constitution is

mixed with contradictions. One contradiction is the apparent overlapping of
authorities and responsibilities among the three-tiered structures of local
government--- provincial/chartered city, municipal, and barangay level.
There are instances when the provincial governments intervene with the
affairs of the municipalities, and the municipalities with the barangays.

The other contradiction is between the concept of autonomy and the

imposed accountability of the local government to the national government.
As the Constitution mandates that the states “shall ensure the autonomy of
local government”, it also requires the Office of the President to exercise
supervision over local government. So how can an organization be
autonomous when it is still under the regulation of other body or
organization?

But the biggest problems constantly faced by local government is not

primarily on its organizational structure but in the aspect of financial
management--- the inadequacy of locally-raised funds thereby leading to
heavy dependence on the national budget, and the lack of transparency and
effectiveness in managing expenses and budget procedures.

Even if Article 10 of the Constitution grants each local government

unit the power to create its own sources of revenue and to levy taxes, in
reality, they are hard to do. Politicians are afraid to exercise such power as it
possibly alienates voters in the coming elections, considering that most
Filipinos have negative attitude towards taxation.

For every local government unit to reach its full potential as intended
by the 1991 Local Government Code, it must have the political will in
finding ways to improve its financial management, specifically in the area of
internal auditing, budgeting, expenditure management, borrowing and debt
management, and most of all, taxation.

On the other hand, the national government must support or even

spearhead programs to improve local government code and other related
laws and regulations, and to train the local government officials and officers
about efficient and effective governance.

All these undertakings will certainly contribute to the utmost welfare

of the local constituency without requiring additional transfer of funds from
the national government.