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Consensus Statement of the Local Governance Budget Forum


Petition for Certiorari Prohibition and Mandamus with Application for Temporary Restraining Order

On the Local Governmant Service Equalization Fund (Speech delivered by former Asst. Secretary Antonio E. Nery, August 8, 2000 in SULU Hotel)

 

 

On the Local Government Service Equalization Fund

Speech delivered by Former Asst. Executive Secretary Antonio E. Nery, August 8, 2000 in Sulo Hotel


PRELIMINARIES


Distinguished officers and members of the Local Governance Policy Forum, my co-advocates, guests, ladies and gentlemen, good morning!

I am more than pleased for the opportunity given to me by the Local Governance Policy Forum to address you in this gathering-one that I think is very timely and providential. Your bid to fully to understand the issue at hand with regards to local fiscal autonomy is a challenge that I share with you.

Today, it is my hope that I maybe able to share with you some thoughts on the relevant issues and concerns for discussion in this forum and relay to you the thinking and current directions of the OCD with regards to the LGSEF.


I. UPDATES AND RECENT DEVELOPMENTS ON THE LOCAL SERVICE EQUALIZATION FUND (LGSEF)


Let me start by updating this forum about the Local Government Service Equalization Fund (LGSEF) and
the recent development in its implementation.

The LGSEF is a nationwide program established in 1998 pursuant to executive Order No. 48. Its operating framework emanates from the spirit of the Local Governance Code of 1991 that seeks to ensure that the dual goals of autonomy and effective governance are achieved.

The LGSEF is a response to the continuing and persistent calls for support of government units (LGUs) all over the country. It is designed to address the financial shortfalls of LGUs in the performance of devolved functions and responsibilities as well as the delivery of basic services at the local levels. It intends to respond to the needs for additional funding of the 78 provinces, 85 cities, 1,525 municipalities, and 41,940 barangays all over the country.

At the onset, the priority beneficiaries if the LGSEF were defined to unclude the followinf LGUs:

Ø Those are exceptionally burdened with devolved facilities without matching grants;

Ø Those that are affected with disparity in terns of the cost of devolved functions and services and the incremental IRA accruing to the LGUs upon the application of the across-the-board IRA formula;

Ø Those that have limited capacity to raise sufficient revenues or additional source of funds due to the nature of their environs and state of development, to cover the total actual costs of devolved functions and services;

Ø Those that are calamity-stricken; and;

Ø Those that do not have adequate capacity to match the counterpart funding requirement needed in accessing other fund sources that will support the implementation of devolved programs, projects and activities in their localities.

For two years now, a 5.0 Billion fund has been earmarked under the General Appropriations Act (GAA) of CY 1999 and CY 2000. In both instances, the pertinent provisions of the GAA stipulate that the LGSEF financial support shall be released directly to the LGUs in accordance with the implementing rules and regulations, including such mechanism and guidelines for the equitable allocation and distribution of said amount among LGUs as maybe prescribed by the Oversight Committee on Devolution (OCD).

For the information of everyone, the OCD was constituted pursuant to Book IV, Title III, Section 533 (b) of RA 7160. It is currently composed of DILG Secretary Alfredo Lim, DBM Secretary Benjamin Diokno, DOF Secretary Jose T. Prado, Chairman of the Senate Committee on Local Government Senator Aquilino Pimentel, Senator Tessie Aquino-Oreta, Senator Vicente Sotto, Chairman of the House of Representatives Committee on Local Government Cong. Romeo Candazo, Cong. Rodolfo Albano, Cong. Victor Sumulong, President of the League of Provinces Governor Joey Lina, President of the League of Cities Mayor Alipio Fernandez, President of the League of Municipalities Mayor Jinggoy Estrada, and President of the Liga ng mga Barangay Brgy., Captain James Martin Lim, withExecutive Secretary Ronaldo Zamora, as Chairman.

The OCD, as a collegial body of key stakeholders in local governanace, oversees and manages the LGSEF including the funds allocation schemes to the LGUs, with the endorsement from the major leagues of LGUs, namely: League of Provinces, League of Cities, League of Municipalities and Liga ng mga Barangay. Said guidelines are submitted to the President for confirmation and issuance of appropriate directives to concerned agencies.

A Technical Work Group (TWG), composed of OCD members and /or technical representatives, assists the OCD in coordinating the technical and policy development thrusts of the LGSEF. It is also tasked to undertake the initial screening and selection of eligible LGUs' projects and make the necessary recommendations to the OCD for the approval of said projects to be funded under the LGSEF.

A Secretariat technical and administrative support services to the OCD and its Technical Work Group (TWG). It serves as the information and coordination center of the OCD.

At this juncture, let me present to you the status report of the implementation of the LGSEF.

 

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