caught between imperial manila and the provincial dynases
TRANSCRIPT
CaughtbetweenimperialManilaandtheprovincialdynas8es:
CanfederalismbringmorefiscalindependencetoLGUs?
R.U.MENDOZA, J.OCAMPO AND R.RODILLAS ATENEO SCHOOL OF GOVERNMENT
Ra8onaleforDecentraliza8on
Ø 1991LocalGovernmentCodedevolvedsubstan<alspending,taxing,andborrowingpowerstolocalgovernmentunits.
Ø Governanceclosertothepeopletoincreaseefficiencyandwelfaregains.
Ø Challengetomatchresources(i.e.ownsourcerevenuesandtransfers)withexpendituresattheLGUlevel.
Source:Manasan(2004).
ASPIRATION:“Infact,realautonomy(inthesenseofsubna8onalgovernmentsbeingabletolinktheirspendingdecisionswiththeirrevenue/taxdecisions)promotesfiscalresponsibility.
REALITY:“…localautonomyhasbeenequated(byLGUsofficials)withtheindependenceofLGUsfromcentralgovernmentinterference.Assuch,LGUofficialshavefocusedonsecuringevenhigherlevelsofblockgrantsinordertoaddressthewidelyperceivedver<calfiscalimbalance.
RelatedLiterature
Ø Riseofpoli<caldynas<eswithstronglinkstopoverty.
Ø Mixedresultsfromdecentraliza<on.
Ø Perversecenter-peripherypoli<cal/fiscalrela<onship.
Whatis“imperial”aboutManila?
PHILIPPINESBECOMINGMOREDYNASTICOVERTIME?
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%MOUNTA
INPRO
VINCE
BE
NGU
ET
MAR
INDU
QUE
QUIRINO
AURO
RA
KALINGA
IFUGA
O
ZAMBA
LES
ORIEN
TALMINDO
RO
OCC
IDEN
TALMINDO
RO
LAGU
NA
NUEV
AVIZCAY
ATA
RLAC
QUEZON
ZAMBO
ANGA
SIBUGA
YPA
LAWAN
BA
TAAN
RO
MBLON
TAWI-T
AWI
ILOCO
SSU
RCA
GAYA
N
APAY
AO
ABRA
BA
SILAN
ISAB
ELA
LAUNION
CAVITE
LANAO
DELSUR
BATA
NES
NUEV
AEC
IJA
ILOCO
SNORT
EPA
NGA
SINAN
RIZA
LBU
LACA
N
PAMPA
NGA
BA
TANGA
SSU
LU
MAG
UINDA
NAO
2013DYNASTYSHARE 2016DYNASTYSHARE
Mendoza,Beja,VenidaandYap(2016)examinethelinkbetweenpovertyanddynas<es,usingacomprehensivedatabaseofpoli<caldynas<esinPhilippinelocalgovernmentcovering2000-2013;
Findsempiricalevidencethatmoredynas8escausegreaterpoverty,notablyoutsideofMetroManila.
POLITICALDYNASTIESLEADTODEEPERPOVERTY
Ak<nson,HickenandRavanilla(2015)studylegislators’alloca<onsofreconstruc<onfundstomunicipalmayorsusingdatafrom2001-2010;
Poli<calconnec<ons,especiallyclan8es,increasereconstruc<onfundsallocatedtoagivenmunicipality;
Resultssuggestthatamoreneeds-baseddisasterresponsemayrequireplacingalimitonpoli8caldiscre8oninthedisbursementofpost-disasterfunds.
CLANTIESINFLUENCEDISASTERRECONSTRUCTIONSPENDING
Ø Capuno(2013)examinedthecorrelatesofthegrowthinthenumberofci<esinthePhilippinesin2001-2010.
Ø Usingapanelofmunicipal-leveldata,popula<onpressureisfoundtobethemainfactorthatdrivescityhood.
GERRYMANDERINGFAVORSPOLITICALCLANS
LEX LOCALIS - JOURNAL OF LOCAL SELF-GOVERNMENT Vol. 11, No. 3, pp. 409 - 429, July 2013
Fiscal Transfers and Gerrymandering Under Decentralization in the Philippines
JOSEPH J. CAPUNO11
ABSTRACT While gerrymandering in developing countries is often pushed by local authorities to secure political advantages, fiscal grants systems under decentralization may also result in the same. We investigate this issue to identify the correlates of the growth in the number of cities in the Philippines in 2001-2010. Using a panel of municipal-level data, population pressure is found to be the main factor that drives cityhood. Also, the likelihood of the same ruling political family to remain in office in 2010 is found to be higher in new cities. Reforms in the country's fiscal transfer program are suggested.
KEYWORDS: • fiscal transfers • gerrymandering • decentralization • Philippines
CORRESPONDENCE ADDRESS: Joseph J. Capuno, Ph.D., Associate Professor, University of the Philippines, School of Economics, Diliman, Quezon City 1101, Philippines, email: [email protected]. DOI 10.4335/11.3.409-429(2013) ISSN 1581-5374 Print/1855-363X Online © 2013 Lex localis (Maribor, Graz, Trieste, Split) Available online at http://journal.lex-localis.info.
Ø Also,thelikelihoodofthesamerulingpoli8calfamilytoremaininofficein2010isfoundtobehigherinnewci<es.
CHASINGAFTERPORK
• PorkbarrelisnotamerefundintheBudgetbut“aseriesofdynamicprocesses”ofpoli8calinterac8onbetweenthePresidentandlocalpoli8cians(Noda2011).
• Equallydistributedresourcesforthepetprojectsoflegislators,bothdistrictrepresenta<vesandna<onallyelectedsolons(i.e.,senatorsandparty-listrepresenta<ves).NodaobservedthatwhilethePDAFanditsearlierforms“hadanamplepolicyra<onale,thefundturnedintoamerecashdispenserforthelegislators”.
• Restedonthepowerandprac<ceofthePresidenttorelease—or
withholdtherelease—ofsuchalloca8onsasawayofsecuringgreaterpoli8calinfluence.
AnalysisofLocalGovernmentFinance
Ø Evennewproposedstateswillfaceseverechallenges.
Ø Lackofdevelopmenttowardsfiscalautonomy–insteadstrongevidenceoffiscaldependence;
Internal Revenue Allotment • Formula-based block grant from National Government • 40% share in the national internal revenue taxes based on the National
Government’s collection of the third fiscal year preceding the current fiscal year
Inter-Governmental Transfers
Allocated according to type of local government:
Share of Provinces, Cities and Municipalities based on:
• Provinces - 23%;
• Cities - 23%;
• Municipalities - 34%; and
• Barangays - 20%
• Population - 50%;
• Land Area - 25%; and
• Equal sharing - 25%
Barangays: 60% Population + 40% Equal Sharing
IRADependencyRatesofProvinces
1992(of73)
1995(of77)
2000(of77)
2005(of80)
2010(of81)
2015(of81)
<50% 5 2 1 2 2 1
>50% 68 75 76 78 79 80
>90% 21 22 27 30 20 20
IRADependence,Provinces
IRADependencyRatesofCi8es
1992(of60)
1995(of65)
2000(of81)
2005(of117)
2010(of121)
2015(of144)
<50% 12 16 21 33 32 41
>50% 48 49 60 84 89 103
>90% 2 5of65 3 11 11 14
IRADependence,Cities
IRADependencyRatesofMunicipali8es
1992(of1465)
1995(of1546)
2000(of1441)
2005(of1500)
2010(of1491)
2015(of1485)
<50% 147 100 60 80 109 65
>50% 1318 1446 1381 1420 1382 1420
>90% 281 547 615 640 650 620
IRADependence,Municipalities
TheProposedFederalStates
BangsamoroCitiesPerformance
Class Province IRADependency Local/Total IFR Performance
3rdClass COTABATOCITY 81.88% 18.12% 22.96% BelowNa<onalAverage
4thClassISABELACITY 94.38% 5.58% 7.04% BelowNa<onal
Average
MARAWICITY 86.05% 0.48% 0.68% BelowNa<onalAverage
6thClass LAMITANCITY 95.01% 4.76% 6.33% BelowNa<onalAverage
StateofNorthernLuzonCitiesPerformanceIncomeClass City AverageofIRADependency AverageofIFR AverageofLocal/Total Performance
Unclassified ILAGANCITY 84.62% 16.16% 12.09% BelowNa<onalAverage
1st BAGUIOCITY 37.92% 83.63% 48.67% BelowforIFRandLocal/Total;AboveforIRADependency
SANTIAGOCITY 83.74% 29.90% 16.26% BelowNa<onalAverage
2nd DAGUPANCITY 51.19% 73.53% 48.65% AboveNa<onalAverage
URDANETACITY 46.90% 86.37% 53.10% AboveNa<onalAverage
3rd
CAUAYANCITY 69.69% 40.11% 30.31% BelowforIRADependencyandIFR;AboveforLocal/Total
LAOAGCITY 49.16% 55.50% 38.94% AboveNa<onalAverage
SANCARLOSCITY(PANGASINAN) 81.73% 27.64% 17.53% BelowNa<onalAverage
SANFERNANDOCITY(LAUNION) 60.42% 46.56% 37.28% AboveforIRADependencyand
Local/Total;BelowforIFR
TUGUEGARAOCITY 57.20% 79.02% 42.56% AboveNa<onalAverage
4th
ALAMINOSCITY 77.75% 32.50% 22.20% AboveNa<onalAverage
CANDONCITY 59.54% 29.41% 17.88% BelowforIFRandLocal/Total;AboveforIRADependency
VIGANCITY 60.66% 54.42% 34.98% AboveNa<onalAverage
5thBATACCITY 77.52% 65.53% 22.22% AboveNa<onalAverage
TABUKCITY 93.46% 11.22% 6.44% BelowNa<onalAverage
ReformChallenges
Ø Howtoboosttransferswhilealsostrengtheningincen<vestopursuefiscalautonomy?
Ø Howtoalignautonomywithaccountability?
MostProvinceshaveoutdatedpropertyvalues(andbecamemoreIRAdependentover8me)
26/09/2016, 7:40 PMOnly 28 provinces have updated basis of real property tax. | DOF – BUREAU OF LOCAL GOVERNMENT FINANCE
Page 2 of 7http://blgf.gov.ph/only-28-provinces-have-updated-basis-of-real-property-tax/
ALIGNINGAUTONOMYWITHACCOUNTABILITY• Alloca<onofintergovernmentalfiscaltransfersmaybeimprovedbyintroducing
matchinggrantstoimproveequaliza8ontransferstolocalgovernments;
• Performance-basedgrantstomo<vategreaterlocalrevenuemobiliza<on;
• Consolida<on,beqercoordina<onoflocalgovernmentac<vi<es,andresourcepoolingforbeqerlocalservicedeliveryandproduc<onofregionalpublicgoods.
• Greatertaxdecentraliza8oncoupledwithawelldesignedfiscalequaliza8onprogram;
• Clear,predictableandgraduatedfinancingmechanismstobeusedacrossdifferentLGUcondi<ons.
Source:Llanto(2012),Manasan(2004)andauthor’sviews.
Source:Author’selabora<ondrawingonLlanto(2012)andManasan(2004).
PoorGovernance BeberGovernance
BestGovernance
LowerIncome
MiddleIncome
HigherIncome
Gradua<onfromTransferstoOwn-SourceFinancing
Condi8onalTransfers/Grants
Uncondi8onal/MatchingGrants
DebtinstrumentsforLGUs;
MunicipalBondMarkets
SELECTED REFERENCES • Atkinson,HickenandRavanilla.2015.PorkandTyphoons:Theinfluenceofpoli<calconnec<ons
ondisasterresponseinthePhilippines.InBuildingInclusiveDemocraciesinASEAN,MendozaetalEds.Manila:AnvilPress.
• Capuno,JosephJ.andMariaMelodyGarciaSchustereder.2015."TheCorrelatesOfLocalGovernmentResponsivenessUnderDecentraliza<on:DoPerformanceRa<ngsMaqerInThePhilippines?".Interna'onalJournalofPublicAdministra'on38(7):521-532.
• DelaRosaReyes,Danilo.2016.“IssuesandProblemsinDecentraliza<onandLocalAutonomyinthePhilippines:APreliminaryAssessmentofImpactandChallenges”.
• LLanto,Gilberto.“TheAssignmentOfFunc<onsAndIntergovernmentalFiscalRela<onsInThePhilippinesTwentyYearsAuerDecentraliza<on".UPSchoolofEconomics.
• Manasan,Rosario2004.“LocalpublicfinanceinthePhilippines:Balancingautonomyandaccountability.”
• Mendoza,Beja,VenidaandYap.2016.“Poli<caldynas<esandpoverty:MeasurementandevidenceoflinkagesinthePhilippines.”OxfordDevelopmentStudies44(2):189-201.
• Solon,FabellaandCapuno.2009.“IsLocalDevelopmentGoodPoli<cs?LocalDevelopmentExpendituresandtheRe-Elec<onofGovernorsinthePhilippinesinthe1990s.”AsianJournalofPoli<calScience17(3):265-284.
Forfurtherdataandresearchvisit:hqp://buildinganinclusivedemocracy.org