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As Above So Below: The State of Philippine Political Debate

April 26, 2010

Da Pinoy is currently focused on the national elections as if the national elections are the only path to economic development. While it is true that having a strong advocate in the central government is important. Certainly, a President can instruct Cabinet secretaries to increase efficiency. But the national executive can only do so much, given scarce government resources.

For those who are wanting to see more changes in the local scene, the choice of Mayor/Governor and Congressman will have more impact than one’s choice of President.

The local citizenry still has to deal with the local incumbent no matter who wins at the national level – Is it up to the task?

After all the counting is done and the last candidate has been declared one gets to the business of actually running government. Guess who will be running the show in city hall? Guess who will be releasing the pork barrel? Yup, it will be the local executives and legislators – the mayor, vice mayor, governor, councilors.

In turn, who controls the local executives? The more jaded observers will most likely say, the local oligarchs/warlords who in turn are allied with the national oligarchs – bata ni  (Cojuangco, Aquino, Enrile, Estrada, Villar – insert name of national big shot here).

On another note – what’s the point in electing an “honest” candidate at the national level when at the local level, you are still electing as candidates for Mayor, Vice Mayor, Congressman, Councilors – people who are known to be loose with the public coffers. Surely, you can’t directly assign blame to a national candidate if your choice of local executives and legislators is uninspired and absolutely brainless.

Why is it that we submit the national candidate to extreme scrutiny – yet, the local candidates seems to be exempt from such scrutiny, except for the usual mistresses, the extra mansions, and the occasional political rub-out.

Philippine Local Politics is Intellectually Bankrupt

At the non-presidential level, I would say that the debate has been anything but substantive (WTF – the Presidential level has nothing of substance, too).

The local candidates merely parrot the line of the national candidates they support. Thus, it is very common to see local candidates who mouth platitudes. Case in point – I know of a candidate for congress who comes from the same high school I come from. I have nothing against the person, she is smart, a do-gooder, honest, hard worker BUT when I read her slogans – I sh*t you not, I can’t help but BARF – no offence my friend, (if you are reading this)  – Nonetheless, I am STILL campaigning for you.

For example this slogan – WHAT IS THERE TO CHANGE IN DAVAO CITY – IT ALREADY IS THE BEST. I was just so tempted to call her and give her an earful and say – WTF are you talking about? People are being shot in broad daylight by motorcycle riding gunmen!!!  Guilty or not guilty, these people deserve their day in court. There seems to be some aura of smugness about “the Davao solution” to crime. Come to think of it – it’s the easier way, but it’s not the decent and ethical way.

On this aspect alone, Davao can improve by upgrading the investigative capabilities of any law enforcement officer assigned to Davao in order to have airtight cases which have lesser changes of being let off due to a technicality. It can also increase in workforce retraining so that idle laborers have more opportunities for making a legit income. The city can also invest in preemptive measures such as a center for street urchins – instead of having a caliber 45 bullet lodged between their heads.

I presume she was appealing to the lowest common denominator – and pandering to the masses. After all, if she can’t be a strong man, she might as well drown you in niceties to get the vote. On the flipside, voters enjoy the attention being given to them because election is the only time the politicians actually make an effort to reach out and relate to the voters.

The issues however are relegated to the sidelines. There is much to improve in Davao City. For example:

  1. The flooding of Davao’s streets after a brief thunderstorm;
  2. The antiquated 1950s sewage systems in a 2010 world;
  3. The congested roads – we can’t keep on turning two lane roads into one way strips, we have to start building new roads,
  4. Decongest the central business district and open up new urban centers;
  5. New tourist-friendly sea ports;
  6. New modes of transportation – sea taxis;
  7. More public parks and recreation centers outside the central business district;
  8. Online Licenses/Permitting/Registration
  9. E-governance – Publishing of bids; disbursement of funds and pork barrel by councilors, congressman, and mayor/vice-mayor.

But then, discussing these topics is too tiring, pa-cute na lang, mas enjoy. So we go for the enjoy, guess what – it’s now 2010 and we’re thinking like it was still the 50s, what do you think will Davao look like? Exactly – 1950s infrastructure, with 21st century wear and tear – not good.

And that’s just for the Philippines most livable city (according to Newsweek). Can you just imagine what the inefficiencies are like in other areas who have not even made the effort?

Imagine this, 1,527 contiguous municipalities – all thinking of pacute-cute – and nothing about development. How does that translate to national development? Exactly – zilch, nada.

The Current LGU-NCR Sytem of Patronage

There are two types of LGUs in the Philippines today – the peak performers, the average and the laggards. The average and the laggards are the cities that have yet to deliver a higher quality of life to its citizens.

Traditonally, the various mayors and governors had to kiss ass just to get allocations from the national government (often referred to as NCR, imperial Manila even). For a time, Cabinet secretaries were like demi gods. But all that changed after the passing of Devolution the 1991 Local Government Code:

The 1987 Constitution provided for autonomy in local areas. This was followed by a cabinet-developed strategy in 1990 laying out a four-pronged program for decentralization, including a legislative foundation, pilot projects in 14 provinces to improve the capacity of LGUs, and bloc grants to support implementation (UNDP 1993). Then in 1991, a Local Government Code was introduced that moved a number of central government functions down to the Philippines’ more than 43,000 LGUs (78 provinces, 83 cities, 1,527 municipalities, and 41,351 barangays [villages or local administrative units]) so that they could better respond to the particular needs of their areas.

The 1991 Local Government Code

The 1991 Local Government Code (the Code) was based on the 1987 constitutional provision that ensured the autonomy of local governments. It had five main features:

  • It moved to LGUs the responsibility for various services that were earlier managed by the national government.
  • These included health; social welfare services; environment (partially devolved: forest management,protected areas and wildlife, environmental management, mines and geosciences, land management, and community-based forestry); agriculture (extension, on-site research, and community irrigation); locally-funded public works; education (the school building program); tourism; telecommunications and housing projects for the provinces and cities; and other services, such as investment support.
  • It moved to the LGUs the responsibility for the enforcement of certain regulatory powers, such as the reclassification of agricultural lands, environmental laws, the inspection of food products and quarantine, the national building code, and the processing and approval of subdivision plans.
  • It provided for the participation of civil society in local governance by allocating seats to NGOs and people’s organizations in key local bodies.
  • It increased the financial resources available to LGUs by broadening their powers of taxation, providing them with a specific share of the revenues generated in their area from natural resources (e.g., mining, fisheries, and forestry) and increasing their share of national taxes (the Internal Revenue Allotments, or IRAs) from 11 percent to as much as 40 percent. The Code also enhanced the ability of local governments to generate revenues from local fees and charges.
  • Finally, it laid a foundation for the development of more entrepreneurship by local governments. To encourage more businesslike and competitive behavior, it allowed local governments to enter into build-operate-transfer arrangements with the private sector, to float bonds, and to obtain loans from local private institutions

With the passing of the LGC, LGU executives now had more ability to shape their communities. The question was whether the LGU executives were up to the task. Better yet, where the citizens sophisticated enough to elect executives with proven ability? Obviously not all cities had constituents with smarts, but for those cities whose citizens were smart enough to recognize and good executives had things going well for them.

Thus, after the LGC, larger cities like Davao, Cebu, Makati, and Subic began taking on the nature of city-states. Mayors were like little Presidents. In fact, mayors had more capacity to effect change locally than any Senator or Congressman. The passing of the LGC however, is not license to lose sight of national goals. In a recent study on The Evolving Roles of the State, Private and Local Actors, the ADB had this to say

  • Full participation of local governments, political leaders, and civil society is needed at all stages in carrying out decentralization policies. Local representatives know best the potentials and problems of their areas. A capable and well-functioning local government will only result from a fully participatory process that involves all stakeholders. This includes the public and private sectors, civic organizations, and NGOs. Democratization will obviously be complementary to decentralization by contributing to greater participation, accountability, and transparency by all concerned.
  • Adequate financial resources are needed. The decentralization experience in both the Philippines and Indonesia shows the process being undermined by lack of funding. But central governments simply do not have the funds or capacity to satisfy all needs. To raise additional resources, local governments must have the autonomy to tax and to mobilize the involvement of the private sector. They will also need freedom to borrow and to privatize, as in the Philippines and to a limited extent in Indonesia. Creative approaches must be sought to develop local public-private partnerships and to exploit opportunities for coproduction between concerned stakeholders.
  • Adequate capacity must be built up, and this takes time. While more capacity often exists at the local government level than is given credence by donors, local governments and institutions still need extensive support as they learn how to take on devolved functions. For this, the provision of appropriate training for relocated and existing local government staff is essential. Capacity will vary among local governments, so tailored approaches are also needed.
  • Decentralization is not an alternative to central authority. A measure of each is needed. Iin any society, some functions—macroeconomic management, national finances, and the judiciary system (rules and many property rights)—need to be controlled at the central level, while others can be better performed locally.
    Although little comprehensive evidence exists, the scattered examples presented above suggest that decentralization may be associated with a decline in the quality, accessibility, and—among regions—the equity of rural services for agricultural research, irrigation, education, and health care.
    Inasmuch as the central Government will still be collecting most of the taxes in the country, it should pay close attention to this issue and design the revenue share-out to correct the inequality that would otherwise occur. In addition, the regulation of essential goods and services (regardless of how they are financed and provisioned) constitutes one of the comparative advantages of central Government.
  • The difficulty of ensuring accountability also constitutes an important caveat about devolution. Devolution may appear to bring government “closer to the people,” but it does not automatically follow that it will be more responsive. As is widely realized now, for governments to function well from the point of view of the people being ruled, there must be a vibrant civil society. And this must be mobilized not just to push through the devolution program, but also to keep an eye on the local government units whethey are up and running. There are too many local governments (and not only in developing countries) that are venal and corrupt.
  • Finally, greater intergovernmental coordination is desirable. Local governments are likely to experience many common problems in adjusting to decentralization. In the Philippines the various leagues of LGUs and local government officials are providing useful forums to review and articulate responses to the shared problems.

To conclude, some degree of decentralization is now an almost inevitable process in most developing countries as a result of the economic and social changes of the last two decades. The growing complexity of rural development dictates the need for more participatory governance. Nonetheless, the dangers of uncontrolled decentralization are real. Too many local governments borrowing funds indiscriminately or coming under the sway of particular groups can easily destabilize a national Government in any country. Thus, decentralization needs to move forward with caution.

Pinoys already have the tools – They just don’t know how to use it.

Given the overall policy framework of the LGC, any local community has the capacity to create the conditions for the expansion of its prosperity. However, just because the policy framework was created does not mean that this will automatically translate to growth. To a certain extent – we already have the tools, limited perhaps but functioning. We have the regulatory framework. too – though it needs lots of tweaking and working on.

Examples – The Local Government Code, Loans and Bonds

For example the Local Government Code allows LGUs to contract loans to develop facilities such as the Davao sports center. The Mindanao Examiner wrote

“The only government sporting center around is the now obsolete Davao City Recreation Center, originally named Almendras Gymnasium. It was built during the pre-martial law time of Davao’s only senator, Alejandro Almendras.

Then Mayor Benjamin de Guzman attempted to build the modern Artica Sports Dome in 2000, but it was mothballed by Mayor Rodrigo Duterte upon his return to City Hall in 2001.

To date, Davao City has been left behind by other localities hosting modern sporting arenas. The neighboring Panabo City, whose income is less than 20-percent of Davao City’s close to P4-billion annual take, long built its modern sporting center.

The DurianPost blog also had this to say:

MOTHBALLED P300 PROJECT RISES FROM THE DEAD

By ROGER M. BALANZA

Will the Artica Sports Center—the unfinished P300 million city government project mothballed Mayor Rodrigo Duterte for being a ‘monument of corruption’—rise from the dead?

Former Davao City mayor Benjamin de Guzman—under whose administration the edifice at the outskirt barangay of Langub—hopes so, if he wins the race for the vice mayorship in 2010.

Partnering with Speaker Prospero Nograles, the standard bearer of the Lakas/Kampi/CMD, de Guzman is hoping to redeem his political stock with a crack at the post he held in 1995. A former ally of Duterte, de Guzman won as mayor in 1998 but was trashed by Duterte in the 2001 elections.
“Davao is suffering today with the disrepute of being a “billionaire city” without a decent sporting facility “but who knows it may end up with not just one but two world-class sports domes” local media reports quoted de Guzman as saying.

Nograles, who will be facing up with Vice Mayor Sara Duterte in the mayoral race, is playing up the city’s lack of a sports center as a propaganda spin in an apparent slap at the Duterte administration reported focus on sports.

He has set aside funds for a sports center to be built at the University of the Philippines campus and to be completed before the May elections.
De Guzman, according to the reports, has said that the prospects of having two domes is likely, stressing there is no legal impediment to the resumption of the Artica Sports Dome project that he initiated. De Guzman said Artica could complement the P100-million Nograles Sports Dome currently being built at the University of Southeastern Philippines (USEP) in Bo. Obrero.

Mayor Duterte, who would be running in the Firsr District congressional race against lawyer Karlo Nograles, son of the Speaker, during the 2001 electoral campaign had used the Artica Dome—tagging it as a “monument of corruption” of the de Guzman administration.

The unfinished Artica was at the center of jokes that the comebacking Mayor Duterte delivered in his verbal harangue against de Guzman, alleging corruption in speeches back-dropped by a large streamer showing the edifice and fat goats feeding on tall grasses at the foreground. Duterte said only goats benefitted from de Guzman’s wanton waste of public money.

As soon as he was back at City Hall after the 2001 polls, he had the construction of the sports center stopped, with about P150 million of the P300 million loan from the Land Bank taken out for the project.

The Artica Dome further became a butt of jokes when some quarters suggested it be completed and converted into a crematorium and mausoleum as the city’s public cemeteries become overcrowded.

A city councilor also had suggested earlier that Davao City could land in the Book of Guinness if it converts the sports center into the “world’s biggest cockpit.”

Now de Guzman is hoping the edifice would be a monument of his political redemption.

In the reports, De Guzman said it is the “legal and moral obligation” of the city government to utilize the 12,000-seater Artica Sports Dome.

De Guzman also brushed aside claims that there was irregularity in his sporting dome project. “The present city government already paid the P150-million bank loan transacted to build the Artica Dome,” De Guzman noted. “If there was any irregularity, why did they pay for it?”

Just because the LGU is allowed to go into a loan does not mean it has to. A better alternative would have been to use municipal bonds. Although I concede that this is new territory for Philippine LGUs. The National government though has been very active in issuing bonds.

Municipal bonds

A municipal bond is a bond issued by a city or other local government, or their agencies. Potential issuers of municipal bonds include cities, counties, redevelopment agencies, special-purpose districts, school districts, public utility districts, publicly owned airports and seaports, and any other governmental entity (or group of governments) below the state level. Municipal bonds may be general obligations of the issuer or secured by specified revenues. Interest income received by holders of municipal bonds is often exempt  from the federal income tax and from the income tax of the state in which they are issued, although municipal bonds issued for certain purposes may not be tax exempt.

Municipal bonds are issued by states, cities, and counties, (the municipal issuer) to raise funds. The methods and traces of issuing debt are governed by an extensive system of laws and regulations, which vary by state. Bonds bear interest at either a fixed or variable rate of interest, which can be subject to a cap known as the maximum legal limit. If a bond measure is proposed in a local county election, a Tax Rate Statement may be provided to voters, detailing best estimates of the tax rate required to levy and fund the bond.

The issuer of a municipal bond receives a cash payment at the time of issuance in exchange for a promise to repay the investors who provide the cash payment (the bond holder) over time. Repayment periods can be as short as a few months (although this is rare) to 20, 30, or 40 years, or even longer.

The issuer typically uses proceeds from a bond sale to pay for capital projects or for other purposes it cannot or does not desire to pay for immediately with funds on hand. Tax regulations governing municipal bonds generally require all money raised by a bond sale to be spent on one-time capital projects within three to five years of issuance.[1] Certain exceptions permit the issuance of bonds to fund other items, including ongoing operations and maintenance expenses, the purchase of single-family and multi-family mortgages, and the funding of student loans, among many other things.

Because of the special tax-exempt status of most municipal bonds, investors usually accept lower interest payments than on other types of borrowing (assuming comparable risk). This makes the issuance of bonds an attractive source of financing to many municipal entities, as the borrowing rate available in the open market is frequently lower than what is available through other borrowing channels.

Municipal bonds are one of several ways states, cities and counties can issue debt. Other mechanisms include certificates of participation and lease-buyback agreements. While these methods of borrowing differ in legal structure, they are similar to the municipal bonds described in this article.

source: Wikipedia, accessed 04/26/2010

A study on “Accelerating Municipal Bond Market Development in Emerging Economies: An Assessment of Strategies and Progress” by James Leigland Senior Urban Policy Advisor Regional Housing & Urban Development Office for East Asia,United States Agency for International Development, Jakarta, Indonesia had the following observations.

The Philippine bond market is also dominated by national government issues, particularly Treasury Bonds and Notes, with maturities now ranging up to seven years. Bonds are also sold by government banks and other government-owned corporations. Some blue-chip private companies have issued bonds, but most of the private sector relies for financing on banks or the stock market. Only a few municipal issuers have sold bonds, the best known of which are the Cebu Equity-Bond Units, sold in 1991 by the Provincial Government of Cebu. The bonds, with two-year maturities, were backed by a pledge of repayment from a joint public-private consortium that paid off the principal with equity shares in the corporation.6 After the passage of the Local Government Code in 1991, local governments were given greater discretion in arranging their own bond deals. However other than some housing-related mortgage bonds sold with guarantees by a central government housing corporation, and an issue prepared but not sold by Naga City, municipal bond activity has been virtually non-existent

The Oligarch/Political Dynasty  Challenge From Top to BottomThe Lesser Evil or the Greater Good

A few things stand out about the Davao elections:

  1. Duterte Father and Daughter tandem is running against Nograles Father and son tandem.
  2. Former Mayor, Rody is running for vice-mayor.
  3. Former Vice-Mayor, Sarah is running for Mayor.
  4. Former Congressman and House Speaker Nogie aka “The Wonder Kid” (makes you wonder what he’s up to next?) is running for Mayor.
  5. Nogie’s Son – Karlo is running for Congressman.
  6. Davaoeños are divided between Rody and Nogie – as if there is no one else capable of leadership among Davao City’s 2 million citizens.

I am sure that this same scene is repeated in other towns in the Philippines. In Tarlac, supposedly, all elective positions are held by persons surnamed Aquino.
Having lived and worked in Davao for the most part of my life, I feel quite embarassed that for the strides that Davao has made as a cosmopolitan city – political dynasties are still very much weaved into the fabric of Davao Society.

Just looking at the names of candidates for councilor reads like a roll call of the city’s old timer families. If the Aquinos, Roxas, Osmeñas, Enriles, Estradas are dominating the national scence – I am willing to bet my last buck that their local counterparts (Ayala, Nograles, Duterte, del Rosario, Chongbian, Magsaysay, Dimaporo, Roa, etc) are doing just the same – whether in Davao, Cebu, Makati, Aparri, or Tawi-Tawi.

On one hand you can have an effective executive with a baggage of human rights and corruption allegations VERSUS a brown nosing weasel whose only loyalty is to himself. One can’t hepl but get into thinking – ok, I know they are all SOB’s – which SOB is mine?

A lot of things are still missing – our sheer inability to distinguish the goat from the sheep, getting good people into positions of authority, and remaining vigilant to ensure that the candidates of choice remain on point.

In fairness, Da Pinoy has been vigilant – although, not on the things that do matter.

Tama na ang pa-cute, let’s get down to the business of community development and empowerment.

This is going to be another six looonnnnggg years.

From → Government

4 Comments
  1. I’m glad you brought this up, this is a really overlooked aspect of the elections, and the one that will affect people more immediately and more tangibly than whoever gets elected to the higher offices.

    I remember during Ondoy, everybody consoled themselves by hopping on GMA and Gibo Teodoro and even Dick Gordon, but they’re not the ones who are responsible for poor waste management or totally senseless building regulation.

  2. Duterte was more interested in 500 million unaudited intelligence funds more than the city’s infrastracture.

    Our town mayor was accused the same way as Gordon was accused in Subic, ‘Mr. Chairman’.

    The tagum city mayor was all good from the outside, the town was transformed into a city and becoming well-organized town never before seen the history of local politics. He won I think best mayor of the Philippines.

    But accusations howled against him a la Gordon that he has an asking price for each new business asking for permit. He’s been accused also of earning hefty amount from the construction materials he’s getting from somewhere.

    I have no problem believing the accusations myself with some indirect business associated with infrastracture.

    But the fact remains, ‘our mayor was first an agent of change, a corrupt second”.

    The only doable thing for local today is to follow that model – “transform the city, take some while doing it.”

  3. You know, we really need to increase the wages of elective officials – so that we can attract the best talent.

    Also, we should provide for performance-based compensation – so that executives and rank and file can legally receive extra compensation for good performance. We should start looking at the “reward” side of good behavior in order to counteract the penalties for “bad” behavior.

  4. GabbyD permalink

    thats interesting about municipal bonds. i wonder why they dont take on debt….

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