Balay Mindanaw Foundation, Inc.

Kaangayan, Kalambuan, Kalinaw ... sa Mindanaw, sa Pilipinas, sa Kalibutan

A Position Paper Presented to the Local Government Units, National Government Agencies and Policy Makers during the BTTAG Policy Forum 21 January 2011, Marco Hotel, Cagayan de Oro City, Philippines

I. Introduction

While the Philippines is gaining new momentum in peace, development and growth, poverty, marginalization, and poor governance are still prevalent. Good governance as one of the solutions has to be effective and efficient. The newly elected President Benigno C. Aquino III and his Administration bring fresh mandate of good and genuine governance in the country. He has articulated his strong support to transparent accountable governance, community-based peace building, sustainable development, and equitable growth in the countryside.

The Transparent Accountable Governance Program of The Asia Foundation, with support from the United States Agency for International Development, in partnership with the Mindanao Coalition of Development NGOs (MINCODE) through the Balay Mindanaw Foundation Inc. (BMFI), initiated the Budget Tracking for Transparent Accountable Governance (BTTAG) initiative as part of its good governance modeling. BTTAG’s aim is to increase the transparency and accountability in the local budget process of 20 Mindanao local governments, and to improve Civil Society Organizations’ (CSO) access to local government fiscal information, especially the budget, by journeying with the Local Government Units (LGU)in budget tracking.

Local budgeting assumes that LGU conducts regular assessment as part of local budgeting. This includes the following: formulation and regular review of local peace and development plans including the Millennium Development Goals (MDG) status in the LGUs, conduct of the Local Government Performance and Management System (LGPMS) and System on Competency Assessment for Local Governments (SCALOG), review of preceding income statement from the Department of Budget and Management (DBM), and the consideration of the electoral platform of the local elected officials.

Local budgeting then passes through three major phases of activities. First is the Budget Formulation. In times where there are newly installed elected officials, the Executive and Legislative Agenda Formulation precede budgeting. It normally starts with Budget Call of the Local Chief Executive, authorization, and ends with the budget reviewed by the appropriate higher office. Second is the Budget Execution that starts with the Budget Request from the requesting office and ends in the Liquidation of the expense. Third is the Budget Accounting. This covers the regular financial accounting and analysis of all the disbursement and expenditures of the LGU in one fiscal year. 

BTTAG’s implementation started in July of 2010. The CSO partners have formally engaged with the LGUs on local budgeting covering phase one or budget formulation.

II. Budget Tracking Situation

A. Executive and Legislative Agenda Formulation

The twenty LGUs of the BTTAG areas have formulated their Executive and Legislative Agenda. This gave the newly elected officials and the local bureaucracy of the local government time to review the local peace and development plan that includes the MDG status, familiarize with the political agenda/platform of the newly elected officials, know the result of the LGPMS and SCALOG, and know how much is the financial ceiling of the LGU as declared by DBM.

Considering that BTTAG CSOs during that time still have to secure accreditation following DILG-coordinated Local Sanggunian accreditation and Local Special Bodies selection processes, they were not involved in this LEDAC planning. Mindanao Coalition of Development NGO Networks (MINCODE) and the Coalition of Social Development Organization – South Cotabato (CSDO-SC) are still awaiting the approval of their application for accreditation to the local sanggunian.

The Local Sanggunian had to facilitate the approval of the applications in order for the CSOs to be able to participate in the selection for CSOs in local special bodies.

One critical factor during this phase of the local budget process is the capability and capacity of the Local Planning and Development Officer in leading the comprehensive assessment and planning of the LGUs.

B. Budget Call

The Local Chief Executive issues a memorandum calling all Departments Heads to formulate the next fiscal year’s budget.

BTTAG CSO partners knew that the call had been issued by inquiring from the LGU focal persons. They did not receive any written communication about the budget call.

C. Budget Submission and Finalization of the Executive Budget

LGU Department heads held meetings with their staff and personnel. They discussed their 2011 plans and budgets. They reviewed their past year’s budget, and identified new programs and projects.  For some budget items, they just set and computed certain percentage increase for the next year’s amount. They then submitted their budgets to the budget officer for initial review and consolidation.

Executive Sessions with the Local Chief Executive, and sometimes with the presence of the Local Council, were conducted. These sessions finalize the Executive budget..

Institute of Primary Health Care – Davao Medical School Foundation (IPHC-DMSF) in Panabo City and Katilingbanong Pamahandi sa mindanaw Foundation Inc. (KPMFI) in the Province of Misamis Oriental were able to attend department level planning and budgeting meetings. They also attended the Executive Budget Sessions with the Local Chief Executives of their respective LGUs.

All the remaining CSO partners were made to wait until the Executive budget was formally completed by the Office of the Mayor. They were then given copies of the executive budget.

D. Budget Authorization

Majority of the Local Sanggunians were able to pass a new budget ordinance for fiscal year 2011. The Local Sanggunians are generally open to the presence of the CSOs in their sessions. CSOs in the Cities of Ozamiz, Digos, Oroquieta, and General Santos, and in the Provinces of Misamis Oriental and Saranggani were able to participate in the Local Sanggunian Committee Hearing. The CSOs in Davao, Butuan, Ozamiz, Digos, Misamis Oriental, and Panabo LGUs were able to attend the Sanggunian’s second reading session.

The Province of Maguindanao failed to enact a new budget ordinance. They reenacted their 2010 budget. The Province of Misamis Oriental is awaiting the Local Chief Executive’s action on the submitted budget ordinance from the Sangguniang Panglalawigan.

In cases where old budgets were reenacted, CSOs had to study what roles should they play to contribute to the passage of the local budget ordinance. 

E. Review of the 2011 Budget Ordinance

The 90 days provision of the law for the reviewing higher office is sufficient.

In the City of Dipolog, it was observed that there was a delay in the approval of the review. It affected the performance of the city due to the delay of implementation of its major programs and projects.

F. Participation of civil society organizations in local budget process

The Philippine Constitution and the Local Government Code of 1991 recognize the right of the citizens to participate in the development process. One mechanism is the membership of non-government organizations in Local Development Councils. CSO representatives can participate in the deliberations of the plans, budgets, and concerns of the local government.  They can participate in prioritizing programs and projects that respond to the needs of the people. However the Code offers limited venues for CSO participation in the local budget process.  

BTTAG CSOs that engaged the LGUs were able to participate in the local budget process because of the Project. However, a rough start was encountered in Iligan, Marawi, El Salvador, and Maguindanao because of the LGU’s initial hesitations to fully engage with the CSOs.  

The city governments of Pagadian, Tacurong, and Tagum deferred their participation in BTTAG. However, the project continued to be implemented in Tacurong and Pagadian because of the commitment of Notre Dame of Tacurong – Community Extension Service (NDT-CES), and Xavier Agricultural Extension Service (XAES)  to promote transparency in all local government undertakings.

The Provincial Government of Maguindanao on the other hand, conducted for the first time an orientation-workshop on strengthening partnership with civil society organization.The 8-point development agenda of the Governor was promoted, a CSO desk has been created, and the focal persons from CSO and LGU were designated. They are awaiting appointment from the Governor.

G. Capacity and capability of CSOs on budget tracking

BTTAG CSO partners face three major challenges. First is the challenge to understand and familiarize themselves with the local budget process. Second is the challenge of participating substantially and effectively. Third is the challenge of building or sustaining relationships with and within the local bureaucracy.

BTTAG has opened the gateway for CSOs to journey with the LGUs. They have undertaken necessary protocols and have been engaged in the local budget process. Conflicts in the schedule of activities, the lack of endorsement and prior approval from the local chief executives, and negative attitudes of some local officials hindered CSOs’ meaningful engagement with the LGUs   

H. LGUS AND JOINT MEMORANDUM CIRCULAR

A Joint Memorandum Circular No. 1, Series of 2007was formulated by DILG, NEDA, DBM and DoF to provide guidelines in local planning, investment programming, revenue administration, budgeting and expenditure management. With the mandate to harmonize the whole process, this joint memorandum was addressed to all Provincial Governors, City and Municipal Mayors, Punong Barangays, Members of the Sanggunian, Local Development Councils, and the Local Finance Committees.

However, the implementation of the memorandum is not yet fully realized. Closer coordination with the local government officials, CSOs, and the national line agencies would enhance its intent, and the implementation of the BTTAG complements it.

IV. POLICY RECOMMENDATION

1.  DILG to issue a Memorandum Circular to LGUs enjoining them to strengthen citizen participation in Local Development Councils (at least 25% of the LDC members), and in local sectoral bodies (Local School Boards, Local Health Boards, Local Disaster Risk Reduction Management Councils, Solid Waste Management Councils, etc.) 

2.  Amend the Local Government Code by putting a provision that  includes a representative from the CSO/PS to sit as member of the Local Finance Committee. 

3.  DILG, DBM, NEDA, and COA to issue memorandum circulars or directives to all their respective  field offices to collaborate and assist private and civil society organizations in promoting transparency and accountability in the local budget process.

4.  DBM, COA, NEDA, DSWD, and other NGAs together with CSOs/PS to establish an effective planning and budgeting, monitoring and accountability mechanism to monitor the implementation of the Joint Memo Circular No. 1 Series of 2007: Harmonization Local Planning, Investment Programming, Revenue Administration, Budgeting and Expenditure Management. Include awards and sanctions.

5.  NEDA to enhance the capacity of Local Planning and Development Officers to facilitate the conduct of local peace and development planning and budgeting to ensure participation and quality of output.

6.   DILG to fully implement MC 2010-83 on Full Disclosure Policy.

7.  DILG to study the review provision of the local budgets by higher appropriate offices in light of partisan political interests involved in the process.