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STRATEGIC LOCAL ECONOMIC DEVELOPMENT

:
A Guide for Local Governments

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STRATEGIC LOCAL ECONOMIC DEVELOPMENT:
A Guide for Local Governments
Copyright © 2009 Local Governance Support Program in ARMM
(LGSPA)
All rights reserved.
The Local Governance Support Program in ARMM (LGSPA) encourages the use, translation, adaptation and copying
of this material for noncommercial use, with appropriate credit given to LGSPA.
Although reasonable care has been taken in the preparation of this manual, neither the publisher nor contributor,
nor writer can accept any liability for any consequences arising from the use thereof or from any information
contained herein.
ISBN 978-971-94065-9-4
Printed and bound in Davao City, Philippines
Published by:
Local Governance Support Program in ARMM (LGSPA)
Unit 72 Landco Corporate Centre
J.P. Laurel Avenue, Bajada
8000 Davao City, Philippines
Tel. No. 63 2 227 7980-81
www.lgspa.org.ph
This project was undertaken with the financial support of the Government of Canada provided through the Canadian
International Development Agency (CIDA).
Te c h n i c a l Te a m
Photography
Bobby Timonera
cover photo, pages 13, 21, 75

Technical Advisor
Emma Barbara Remitio

Technical Review Team
Myn Garcia
Mags Z. Maglana
Rizal Barandino
Edgar Catalan
Sef Carandang

Editorial and Creative Direction
Myn Garcia

Technical Coordination
Maya Vandenbroeck

Cover Design and Layout
Tata Lao

Writers
Chona Balagat
Anami Canag

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STRATEGIC LOCAL ECONOMIC DEVELOPMENT:
A Guide for Local Governments

Rizal Barandino
page 91

STRATEGIC LOCAL ECONOMIC DEVELOPMENT:
A Guide for Local Governments

STRATEGIC LOCAL ECONOMIC DEVELOPMENT:
A Guide for Local Governments

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6 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments .

Contents 13 2 3 4 5 7 13 Foreword Acknowledgments Preface Acronyms Introduction Chapter 1: Understanding the Local Economy How a Local Economy Works The Fundamental Components of the Local Economy 21 Chapter 2: Integrating LED in Local Government Processes When does an LGU do the Strategic LED Process? The Five-Stage Strategic LED Process Stage I: Organizing the LED Effort Stage 2: Doing the Local Economy and Competitiveness Assessment (LECA) Stage 3: Formulating the LED Strategy Stage 4: Implementing the LED Strategy Stage 5: Reviewing the LED Strategy 21 75 Chapter 3: LED in Practice Tugaya. Leyte: Setting the LED Direction through Participatory Economic Planning Bohol Province: LED through Investment Promotion and Good Governance 75 91 91 98 100 102 Chapter 4: Lessons Learned Reference List Annex A. Camarines Sur: Good Governance as Catalyst of Economic Growth Baybay. Lanao del Sur: Culture as an Engine of Local Economic Development Wao Lanao del Sur: Pursuing Food Security and Environmental Sustainability through the LED Process Upi. Data for Local Economy Profiling STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 5 . Maguindanao: Developing the Entrepreneurial LGU through the LED Process Tuguegarao City. The LGU Mandates and Related Laws on LED Annex B. Cagayan: Enhancing the Business Enabling Environment for Community-Based Enterprises Naga City.

We trust that this publication will motivate and inspire more LGUs to embark on a meaningful. The LGU experiences featured in the publication are good examples of how local leadership can steer economic progress through participatory. transparent and accountable governance. This publication serves not only as an eye opener but also as a guide for LGUs to understand and integrate local economic development processes and mechanisms into local government functions. community stakeholders and government agency interaction as a critical element in achieving local economic development. Each one has a role to play in the local economic development process. One important insight is that local economic development can happen in any type or class of LGU. Our congratulations to the LGSPA for coming out with this relevant and most useful knowledge resource! SAJID S. This Guide also highlights the importance of LGU. plans and programs. Strategic Local Economic Development: A Guide for Local Governments emboldens us to strengthen further our efforts in integrating the LED process within the DTI-ARMM’s mandate.Foreword Assalamo Alaikum Warahmatullahi Wabarakatuho! Today many local governments are already looking beyond planning and the delivery of social welfare services as priorities. especially to agencies such as the DTI-ARMM. DRUZ ALI Regional Secretary Department of Trade and Industry-ARMM (DTI-ARMM) 2 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . deliberate and strategic LED process. The transformation of communities from being recipients of services to becoming active participants in economic development is gaining ground and wider acceptance among LGUs. Strategic Local Economic Development: A Guide for Local Governments is a very timely publication considering the growing clamor for local governments to take active part in promoting local economic development both as a goal and as a program in local governance. LGUs are now findings ways of undertaking programs and improving capacities that would enable constituents to take part in promoting and implementing initiatives that spur local economic development. The publication is also inspiring coming as it is from the experiences of local governments in the Autonomous Region in Muslim Mindanao (ARMM). The steps provided in this Guide are not only useful to LGUs but also to other stakeholders.

Datu Odin Sinsuat. Wao and Tugaya in Lanao del Sur. Lamitan in Basilan. Jim Hassan. Rizal Barandino. Maglana. and Jolo in Sulu. The Local Governance Support Program in ARMM thanks: The local economic development stakeholders of the municipalities of Upi. Sef Carandang and Tata Lao -. Myn Garcia. Emma Barbara Remitio. Maya Vandenbroeck.who passionately saw through the development and completion of this Guide LGSPA managers and staff who contributed in many ways to promoting local economic development and to producing this knowledge product STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 3 . Mags Z.Chona Balagat. whose experience in facilitating local economic development in their respective areas inspired the writing of this Guide LGSPA Program Officers Jaime Dumarpa.Acknowledgements This publication was made possible through the dedication and collective efforts of individuals and teams who willingly shared their ideas and valuable time in conceptualizing and developing this Guide. Anami Canag. Edgar Catalan. Fatima Darwissa Yussah and Assistant Manager Cecile Isubal for providing technical assistance to their respective LGUs in undertaking the LED process The DTI-ARMM LED coach team headed by ASec Maritess Maguindra for continuing the support to LGUs and for integrating the LED process in their agency’s programs The technical team of this publication -. Bongao in TawiTawi. Sultan Kudarat and Parang in Maguindanao. Veronica Quinday.

Local Governance Support Program in ARMM (LGSPA) 4 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . In the context of the ARMM. the work of LGSPA has produced a wealth of knowledge that contributes to the further evolution of the framework and strategies in local economic development promotion that were initially pursued in the second phase of the Local Government Support Program (LGSP II). themes that are equally important to LGUs and citizens. With Strategic Local Economic Development: A Guide for Local Governments. It emphasizes the industry approach. This Guide hopes to fill in knowledge gaps in boosting the capacities of local governments to engage stakeholders and players of local economic development. government agencies and the Local Governance Support Program in ARMM (LGSPA) in promoting local economic development in the Autonomous Region in Muslim Mindanao. In this connection.Preface Strategic Local Economic Development: A Guide for Local Governments is the embodiment of the collective experience of local government units. the experience underscores the importance of integrated. private stakeholders and local government units in maximizing opportunities for local economic development. the LGSPA experience highlights the importance of participation. the electronic file of the Local Economic Development: Stimulating Growth and Improving Quality of Life publication of LGSP II has been included as a companion CD to this material. transparency and accountability as very important elements in local government-facilitated economic development. promotes entrepreneurship for wealth and job creation and recommends more robust ways of assessing competitiveness and crafting LED strategies. The Guide includes LED experiences in ARMM through the work of LGSPA and of other areas in the Philippines. It also links LED to gender equality and poverty reduction. LGSPA hopes to have shown that local economic development can be implemented in the context of promoting good governance and that good governance is vital to local economic development. collaborative and purposive undertakings among economic agencies. Despite difficulties and conditions that were inimical to durable economic development and peace. Strategic Local Economic Development: A Guide for Local Governments is based on the field application by LGSPA of existing local economic development (LED) general processes and guidelines. Using the tenets of good governance as anchors.

Acronyms ABC ADB AI AIP ARD-GOLD Association of Barangay Captains Asian Development Bank Artificial Insemination Annual Investment Plan Associates in Rural Development – Governance and Local Democracy ARMM Autonomous Region in Muslim Mindanao ATI Agricultural Training Institute BDC Business Development Center BEMO Bohol Environmental Management Office BEPO Bohol Employment and Placement Office BIPC Bohol Investment Promotion Center BIPP Bohol Investment Promotion Program BIR Bureau of Internal Revenue BLECS Bohol Law Enforcement Communication System BOL Build-Operate-Lease BOO Build-Operate-Own BOT Build-Operate-Transfer BPRMO Bohol Poverty Reduction and Management Office CALABARZON Cavite. Communication International Labor Organization Investment Promotion Advisory Group Internal Revenue Allotment Information Technology Konrad Adenauer Stiftung Local Chief Executive Local Development Council Local Development Investment Program Local Development Indicator System Local Economy and Competitiveness Assessment Local Economic Development Local Governance Performance Management System Local Government Support Program Phase 2 Local Governance Support Program in the Autonomous Region in Muslim Mindanao Local Government Unit Local and Regional Economic Development Local Resource Inventory and Assessment Monitoring and Evaluation Mindanao Economic Development Council Metro Naga Development Council Municipal Planning and Development Coordinator Micro. Batangas. Laguna. Quezon Economic Zone CDP Comprehensive Development Plan CDS City Development Strategy CLUP Comprehensive Land Use Plan CMU Central Mindanao University CSO Civil Society Organization DA Department of Agriculture DAR Department of Agrarian Reform DENR Department of Environment and Natural Resources DepEd Department of Education DILG Department of the Interior and Local Government DOH Department of Health DOLE Department of Labor and Employment DOST Department of Science and Technology DOT Department of Tourism DPWH Department of Public Works and Highways DSWD DTI ELA EO e-TRACS EU FARMC GAD GFI GTZ HVCC IEC ILO IPAG IRA IT KAS LCE LDC LDIP LDIS LECA LED LGPMS LGSP II LGSPA LGU LRED LRIA M&E MEDCo MNDC MPDC MSME Department of Social Welfare and Development Department of Trade and Industry Executive-Legislative Agenda Executive Order Electronic Tax and Revenue Assessment and Collection System European Union Fisheries and Aquatic Resources Management Council Gender and Development Government Financing Institutions German Technical Cooperation High Value Commercial Crops Information. Education. Small and Medium-Scale Enterprise STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 5 . Rizal.

Iligan Institute of Technology Medium Term Development Plan National Commission for Culture and the Arts National Capital Region National Electrification Administration National Economic Development Authority Non-Government Organization National Irrigation Administration National Statistics Office One Barangay One Livelihood Official Development Assistance Organisation for Economic Co-operation and Development Overseas Filipino Workers One Town One Product Philippines-Australia Human Resource Development Facility Provincial Assessor’s Office Panglao Bohol International Airport Philippine Center for Agricultural Research on Rural Development Philippine Center for Entrepreneurship Philippine Carabao Center Public Economic Enterprise Public Employment Service Office Provincial Government Media Affairs Presidential Management Office People’s Organization Public–Private Partnerships Private Sector Participation Panglao Tourism Economic Zone STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments QUEDANCOR Quedan and Rural Credit Guarantee Corporation RA Republic Act SB Sangguniang Bayan SCALOG System on Competency Assessment for Local Governments SDC Swiss Agency for Development Cooperation SEC Security and Exchange Commission SEZ Special Economic Zone SMART Specific. Time-bound SME Small and Medium Enterprise SMEDC Small and Medium Enterprise Development Council SP Sangguniang Panlalawigan SWOT Strengths. Opportunities and Threats TCTLDC Tuguegarao City Technology and Livelihood Development Center TESDA Technical Education and Skills Development Authority TOP Technology of Participation TWG Technical Working Group UNCDF United Nations Capital Development Fund UNESCO United Nations Educational. Small and Medium-Scale Enterprise Mindanao State University . Achievable. Measurable. Weaknesses. Relevant.MPDC MSME MSU-IIT MTDP NCCA NCR NEA NEDA NGO NIA NSO OBOL ODA OECD OFWs OTOP PAHRDF PAssO PBIA PCARRD PCE PCC PEE PESO PGMA PMS PO PPP PSP PTEZ 6 Municipal Planning and Development Coordinator Micro. Scientific and Cultural Organization UN-HABITAT United Nations Human Settlements Programme UNIDO United Nations Industrial Development Organization UNWTO United Nations World Tourism Organization USAID United States Agency for International Development WB World Bank WFO World Food Organization .

evaluation and policymaking systems of an LGU. The LGUs have a critical role to play as agents of economic development in their respective communities. It describes the LGU-facilitated LED process as part of the economic sector development function and integrated in the planning. LGU support to LED for the most part has been ad hoc and limited to one-off ‘livelihood’ projects that have proven to be unsustainable and often counterproductive in attaining the overarching goal of poverty reduction.Developing and Implementing Local Economic Development Strategies and Action Plans. With the decentralization of certain powers and functions brought about by the Local Government Code of 1991. offers a new perspective on the LED process in three ways based on the experience of the LGSPA: 1. and the Making Local Economic Development Strategies: A Trainer’s Manual. Strategic Local Economic Development: A Guide for Local Governments is intended to provide practical steps and tools on the application of the LED process in Local Government Units (LGUs). This Guide. Local Economic Development: Stimulating Growth and Improving Quality of Life. but more importantly as promoters of local economic development or LED. 2.Introduction It is at the local level that the greatest potentials for spurring development — for promoting investments. especially in the rural areas. markets and other potential partners. The LGU-facilitated strategic LED process described in this Guide follows the five-stage strategic planning process proposed in two excellent references published by the World Bank: the Local Economic Development: A Primer . These procedures are based on the experiences of the Local Governance Support Program in ARMM (LGSPA). It is for this reason that LGUs are now viewed not just as providers of public goods and basic social services. They also have limited capacity and technology to manage or link with other resource institutions. the role of local government units (LGUs) in development have also expanded. However. It gives emphasis to value chain and industry-based LED strategy formulation. the Local Government Support Program (LGSP) II and other pioneering LED-related interventions in the Philippines. This knowledge product is a companion piece to the 2003 LGSP resource book. implementation. Among the pressing concerns of the LGUs are limited economic activities. they are faced with the problem of limited local funds to finance economic projects and related activities. monitoring. creating jobs and boosting demand – exist. and STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 7 . Since most LGUs belong to the 3rd to 5th income classes. however.

innovations and good practices of selected LGUs in the Philippines including those of Wao and Tugaya in Lanao del Sur. LED initiatives of the provincial government of Bohol. which are municipalities covered by the LGSPA. Chapter 2 – Integrating LED in Local Government Processes translates the concepts and principles of LED into concrete actions by presenting step by step procedures and tools in planning and implementing the LED Strategy. Chapter 1 – Understanding the Local Economy shows how the flow of money coming in. The specific steps. and leaving a community impacts the economic development and wealth creation in the locality. Having an appreciation of the concepts and merits of undertaking the LED process is necessary before proceeding to its specific steps and methodologies. principles. infrastructure. namely: 1) Organizing the LED Effort. 3) Formulating the LED strategy. which are also practical and relevant to any LGU in the Philippines wishing to undertake a systematic and participatory process of formulating a LED strategy. technology. medium and enterprise development. the city government of Tuguegarao in Cagayan. performance management. and 5) Reviewing the LED Strategy. It demonstrates the use of small. nature. goals. circulating.3. This chapter discusses the five-stage Strategic LED process. This chapter also discusses the five fundamental components of the local economy (labor. The Guide has five major parts: x x x x x Introduction Chapter 1 – Understanding the Local Economy Chapter 2 – Integrating LED in Local Government Processes Chapter 3 – LED in Practice Chapter 4 – Lessons Learned The Introduction gives a synopsis of the fundamentals of LED – rationale. and poverty-sensitive and gender-responsive strategies in the implementation of the LED plan. tools and examples under each stage are mostly drawn from the LGSPA experience in the ARMM. and Upi in Maguindanao. 4) Implementing the LED Strategy. the city government of Naga 8 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . Chapter 3 – LED in Practice is a compendium of LED experiences. stakeholders and their roles and responsibilities – which are expounded in the LED: Stimulating Growth and Improving Quality of Life resource book. legal framework. 2) Doing the Local Economy and Competitiveness Assessment or the LECA. financial capital and leadership) and some of the issues related to these components that LGUs may have to deal with in the LED process.

cities and provinces singly or collectively.). As a result. employment generation and quality of life for all (Adapted from the World Bank definition). economic development is a process and the practice of increasing the rate of wealth creation by mobilizing human. there are links to the regional. Chapter 4 – Lessons Learned documents the learning gained from the LGSP II and LGSPA LED projects. Although the focus is local. and it is territorial (or area-based) in its approach. n. adopt or modify based on local conditions. 2003). The Economic in local economic development drives home the importance of identifying and seizing business opportunities. municipalities. LED offers an alternative approach that aims to fill in the gaps of the previous initiatives. as well as factors that facilitate or hinder the LED process. micro or large). These include strategies that work or do not. work collectively with the result that there are improved conditions for economic growth. private sector and civil society) within localities. Local economic development (LED) is the process by which actors (governments.in Camarines Sur and the municipal government of Baybay in Leyte are also featured. Countless economic policies and strategies have been initiated in the past by the national government to address poverty and equitable growth but more focus was given on larger enterprises. national and international levels. and natural resources to generate more marketable goods and services whereby the economic developer influences the process for the benefit of the whole community (McSweeney. urban and urbanizing communities and centralized planning that overlooked the indispensable role of the LGUs. organizational. supporting entrepreneurial initiatives (whether formal or informal. rural economy where most Filipinos are living and working remained sluggish resulting to increased poverty incidence and poorer quality of life (LGSP. STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 9 . the prime movers or driving forces are economic stakeholders in barangays.d. Useful insights can be drawn from the different approaches and strategies resorted to by these LGUs in stimulating economic growth in their respective areas of responsibility. facilitating market access and creating a climate conducive to investment and business activity. What is Local Economic Development? Essentially. financial. physical. The term Local in the definition signifies that LED involves building the economic strength of a local area by optimizing local resources and capacities. These lessons are presented so that other LGUs can gain some ideas on which approaches to avoid.

generate jobs. Goals and Principles of LED The goals of LED are to create wealth. Second. drawing power and authority from existing statutes. to urban and rural dwellers. Among these laws is the Local Government Code of 1991 (RA 7160) which has given the 10 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . reduce poverty and improve the quality of life in the locality. the private sector is the acknowledged engine of employment and growth and as such. Sustainable development is at the heart of LED which means satisfying the needs of the present generation without sacrificing the future of succeeding ones (LGSP. To sustain economic growth. however. Third. priorities and programs into regional and national plans (with direction from the bottom going up) and citizen participation and consensus building among stakeholders. ultimately. business and civil society) have a stake and a role in LED. 2003). LED is a multi-stakeholder partnership. The LGU Mandates and Related Laws on LED Some LGUs have already started economic programs and activities. First. to the rich and poor. These laws and mandates are fully discussed in LED: Stimulating Growth and Improving Quality of Life. LGUs must be conscious of its “enabler” role. which is setting the right environment for the local economy to grow. The quality and direction of growth is as important as its quantity and size. good economy thrives when there is transparent and accountable governance – a practice that should permeate the political and economic structures in the community. politico-administrative and cultural aspects. increase incomes and. local resources may be transformed to marketable goods for the current population but it must be continuously regenerated so as not to deprive the future generation of the same resources. it does not only cover the economic dimension but also includes social. and to all ethnic and religious groups. Finally. Those who are affected and can affect the economic growth in the locality (such as government. LED enables and promotes the coordination and optimization of scarce resources available in an area. the integration of LED plans. LED operates on several principles. LED promotes equitable and sustainable economic growth.The term Development emphasizes that LED is holistic. The LGU may. Equitable means opportunities to wealth creation are open to both men and women of working-age. prudently decide to provide certain services in situations where there are insufficient private or voluntary sector providers of such services or when cartels control the prices of certain commodities in the locality.

engaging it is important in spreading ownership of the community’s economic development strategies. provides incentives. provision of social and environmental services. it has to carry out regular functions that have bearing on the success of LED. RA 8425 or the Social Reform and Poverty Alleviation Act also mandates LGUs through the Local Development Councils (LDCs) to formulate.LGUs more power and authority to accelerate local economic development and improve the quality of life in their communities.). regulatory functions. As provider. resources or assets that would render LED effective and successful in attaining its targets. STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 11 . it sees to it that the infrastructure and subsidy requirements of existing and potential industries are in place.d. and works for the stability of peace and order. W. it ensures the economic players’ access to information and advisory services.. public safety and cultural heritage activities. marketing and public relations. These are further bolstered by the laws on the development of Small and MediumScale Enterprises (SMEs) such as the Magna Carta for Small Enterprises (RA 6977). management of public economic enterprises (PEE) and the provision of physical facilities. procurement of goods and services. investment and enterprise promotion. They bring with them different levels of knowledge and expertise. alter and direct the condition of their local economy. The economic quality of life of the residents and the success of businesses many times are directly affected by the policies and leadership of those who have the influence and power to create a climate conducive to economic growth (Fruth. storage and dissemination. implement. As enabler or facilitator. The LGU takes the role of provider. In addition. monitor and evaluate poverty reduction programs in their respective jurisdictions. The LED Stakeholders. perspectives. formulates relevant and supportive policies and regulations. planning and budgeting. their Roles and Responsibilities The LED process calls for the collective efforts of local stakeholders to spur economic growth. which are consistent with the poverty reduction strategy of the national government. n. enabler or facilitator of local economic development. Actions of community and government leaders can change. and. namely: policy making and taxation. No matter how small the role of a stakeholder is. The Department of the Interior and Local Government (DILG) has also issued memorandum circulars to the local governments pertinent to the pursuit of local economic growth and poverty reduction. See Annex A for a complete list of LGU mandates and related laws on LED. information collection. An Act Providing Assistance to Women Entrepreneurs (RA 7882) and the Omnibus Investment Code (EO 226). Kalakalan 20 (RA 6810).

Small and medium-scale enterprises are employment generators. product development. technical and financial competencies. financing and creation of an LGU brand. Cooperatives (producers. must be weighed carefully and the extent of LGU intervention must be clearly qualified considering its limited resources and array of social concerns other than infrastructure and economic projects. small. social protection measures such as health insurance. This option. 12 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . the largest taxpayers. craft and professional associations and local guilds play a crucial role in setting and enforcing quality standards. take risks. and promoters of frugality. and entrepreneurship. developing and enforcing standards. users of the latest technologies. self and mutual help. trainers. medium and large-scale enterprises. and emergency loans. and providers of talents and services for business institutions. providers of credit assistance. mortuary packages. however. The private or business sector is represented by micro. developers and promoters of new technologies. fishers).The LGU may also take on the role of service provider in situations where there are insufficient private or voluntary sector providers or when the capacities of these service providers are inadequate. Micro enterprises represent the informal economy and though not a significant generator of employment. National government agencies assist the LGU in the organization. marketing. helping in fund sourcing. Organized business groups like chambers of commerce. they are considered incubators of bigger enterprises and fallback mechanism in times of economic crisis. tricycle drivers) and agriculture sector (farmers. trust. planning. service delivery. Educational institutions are providers of knowledge. industry associations. advocating LED among the stakeholders. represent the grassroots’ sentiments. they are tasked to scan and seize opportunities. consumers) and microfinance institutions serve as depositories of community savings. Civil social organizations (CSOs) such as non-government organizations (NGOs) and people’s organizations (POs) from the informal sector (vendors. develop markets and create economic value. business development. and providing information and other market and resource linkages. implementation and evaluation of the LED strategy by providing technical assistance. and sources of managerial. needs and views making them excellent collaborators in planning. discipline. community organizing and mobilization and in monitoring and evaluation of projects thereby promoting transparency and accountability. credit. upgrading human and technological resources. With their role as engine for local employment and growth.

infrastructure. technology. financial capital and leadership) and some of the issues related to these components that LGUs may have to deal with in the LED process. and leaving a community impacts the economic development and wealth creation in the locality. circulating. This chapter also discusses the five fundamental components of the local economy (labor.Chapter Understanding the Local Economy shows how the flow of money coming in. STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 13 1 .

cities or municipalities to attain a vibrant local economy. interest income. these come from social security. As used in this Guide. Also referred to as captured monies. it is circulated through spending on local goods and services. foundations. thus. the leaks in the economy come in the form of crop production inputs. The inflow and outflow of money in a local economy can be illustrated using the “leaking barrel” of wealth model. Money also flows out of the community in several ways: when local business firms and their employees buy their needs from outside sources. revenue allotments and grants from national governmental agencies. In the example. retirement payments. the local economy refers to the geographic area within a political unit which could be a province. and agricultural products sold to buyers and consumers outside the locality. second. family member remittances. city or municipality. to better understand the context in which the LED process operates. The example in Figure 1 shows that the money coming into a municipality’s local economy largely come from tourists and visitors.). when estate settlements are bequeathed to heirs living in other areas. cooperatives and investors and remittances from family members working outside the community (Darling. when there is inefficient use of local assets such as land. pay their taxes and social security to national governmental offices. n. W. buildings and human skills and talents or when local investments do not pay off. How a Local Economy Works A local economy is a geographic area where people predominantly live and work and also earn and spend (Fruth. the LGU’s Internal Revenue Allotment (IRA). Money flows into the local economy in two ways: first. grants and investments from official development assistance (ODA). from the earned monies when products are sold to an outside customer (exported) and when people work out-of-town. rent and dividend from outside investments. construction materials and labor that come from outside 14 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . and through investments on education of children who eventually leave the area for better opportunities elsewhere. However. Some are spent locally. When money pours in. when local residents invest their money in businesses outside the locality.. from the unearned monies from outside sources to the local government and to community citizens.d. generating more jobs and employment as goods and services are consumed. when local households buy goods and services out-of-town. NGOs. it is important to have an appreciation of how the local economy works and the factors that determine economic growth. 1991).Understanding the Local Economy The Introduction provided a brief background on LED concepts and principles and underscored the importance of mobilizing local people and organizations in provinces. The leaks in the barrel represent the money or income leaving the economy.

) STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 15 .) Construction Materials = P Construction Labor Printing & Publishing Services Source: Adapted from McSweeney (n. n. wealth will not multiply within the local economy. it enters the barrel where it is mixed and blended.d.) but when nothing is done to “plug the leaks” or slow down the rate of money flowing out. etc.d. LGU expenditures outside the municipality.Understanding the Local Economy sources. Figure 1. Seeds. going from person to person. and. It is impossible to seal a community’s economic boundaries completely (Schmidt & Myles. As money is imported into the community. Example of Money Flow in a Local Economy Economic Generators Tourist & Visitors Agri-aqua Production = P Internal Revenue Allotment (P73 M) = P = P Remittances of family members working outside the municipality = P MUNICIPALITY’S LOCAL ECONOMY = P Local Residents Shopping in other Cities = P = P Leakage Out of the Municipality = P LGU Expenditures outside the Municipality = P Crop Production Inputs (Fertilizers. printing and publishing services that are absent in the municipality. business to business. local residents shopping in other cities. creating local employment and wealth.

healthy. the LGU can help educated. weaknesses. This suggests that population growth is higher than the production growth. technology. among female and male youths and those with higher education (LGSPA. proactive. The human resource is the means for social and material progress and at the same time the end or object of development. health and education services. Investments on education. By providing these facilities and services. roads and electricity have positive effects on the locality’s manpower. and training opportunities. infrastructure and leadership components. 2007). Factors affecting labor productivity in the local economy include housing.” the quality of human capital is still below par making it difficult for job seekers to meet the required qualifications. skills availability. & Philippine Center for Enterpreneurship (PCE). 2007). opportunities and threats) in each of the component can be pinpointed and later addressed accordingly during the LED strategy formulation. A productive labor force requires continuing enhancement of human capital. creative. as a factor of production. The service sector has been absorbing an increasing number of workers. and skilled male and female workers meet the labor requirements of businesses 16 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . which is indicated by the average per capita income of the working age population and improved purchasing power of individuals. security. particularly women (LGSPA.Understanding the Local Economy Fundamental Components of the Local Economy Local economic growth is determined by the interplay of the economy’s labor. Some of the problems besetting the labor sector of our local communities are the high unemployment rate in the rural area. Labor Labor. In terms of gender equality.d. financial capital. n. pertains to the community’s most precious and abundant resource – its workforce. more women are now joining the workforce and a significant number are occupying management level positions. problem-solving and communication skills. These are the factors that must be analyzed during the LED process particularly in the Local Economy and Competitiveness Assessment (LECA) so that specific issues (strengths. health and basic infrastructure like water. Habito. Although there are masses of people who can provide “raw labor. The Philippines is the 2nd highest in percentage of entrepreneurially active females (among 42 countries) (Madarang.). Economic development is concerned with the equitable distribution of real income. The quality of labor is becoming more important than the cost of labor. The current demand gives preference to a broader set of skills such as better analytical. skills training.

Technical Education and Skills Development Authority (TESDA). timeliness and convenience has become more important to the investors and the consuming public. Public investment in infrastructure leads to increased return on investment for business. Generating local business investments and jobs to absorb the community’s unemployed is another challenge to the LGU. Technology and Livelihood Development Center (TLDC) as well as corporations that are willing to provide technical assistance on product development to small businesses as part of their corporate social responsibility. Examples of research and technology development institutions are the Agricultural Training Institute (ATI).Understanding the Local Economy in or outside the locality. and health care facilities. training and research centers. telecommunications. roads. Technological advances impact the local economy by changing the nature of products and production techniques and improving productivity so that the economy remains competitive. Department of Science and Technology (DOST). Industry and business have become so knowledge-driven that the cost of products. Some innovative and proactive LGUs have tapped the private sector for infrastructure development and management through such schemes as Build-Operate-Transfer (BOT). particularly in the rural areas. LGUs can harness the expertise of institutions and individuals by eliciting their participation in local economic development planning and implementation. The development of a new technique is an invention and its application to production is called innovation. and Build-Operate-Lease (BOL). higher productivity and a boost in private sector investment. Philippine Center for Agricultural Research on Rural Development (PCARRD). schools. are driven by investments on knowledge or research rather than by actual production costs. The infrastructure needs of business have changed in recent years. The absence or lack of infrastructure. public transportation. universities and colleges. Technology Technology generally refers to better techniques or methods of production (Fajardo. Build-OperateOwn (BOO). LGUs who have aggressively sought assistance. is due to the fact that most LGUs are cash-strapped. Infrastructure Infrastructures are large-scale public systems. networked and demonstrated exemplary governance practices have attracted foreign funding agencies to finance the STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 17 . Given their limited resources to conduct research and development. The quality of service in terms of dependability. services and facilities that are necessary for economic activities. including power and water supplies. particularly those requiring advanced technology. 1985).

Capital may also pour in from investors outside of the locality. Financial Capital Financial capital fuels businesses. there are infrastructure projects that have turned into white elephants or have benefited only a few because investment decisions were not based on sound economic analysis and financial planning. An example of this is a seaweed processing plant lying idle because of inadequate working capital. The second type of financial capital is equity which is money invested without interest. by and large.d. In return for his or her investment. The lack of financial capital is the hindering factor most frequently cited by micro. banks. foreign-assisted projects. There are two types of financial capital and both are required at different stages of business growth. small and mediumscale enterprise owners. serves only as a temporary remedy and seldom results to sustained economic activity. foundations and other development institutions in response to this issue is the shelling out of small livelihood grants or loans. The first type is debt which is the lending or loaning of money with interest. It involves a higher risk since it is unsecured by assets. It involves minimal risk to the lender because it is being secured by requiring collateral from the business or its owner. without sufficient support to other aspects of the business like production and marketing. Unfortunately. which can be maximized by the LGU through investorfriendly policies.Understanding the Local Economy establishment of local infrastructures. These unutilized or underutilized facilities present another leak in the community’s barrel of wealth and could be prevented through careful analysis and planning that is being espoused in the LED process. pensions and insurances). Financial capital may be generated from various internal and external sources including the LGU (with its IRA and local revenues). retirement fees. the investor acquires shares of ownership and sometimes is involved in the management of the business (McSweeney. It requires regular payments of the loan principal and the interest. n. The usual measure being adopted by LGUs. NGOs/foundations. property rentals. government financing institutions. These are the local government or political 18 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . local businesses/industries and family savings (from remittances of family members. Leadership The leadership triangle in Figure 2 shows that there are three economic development interests that must cooperate for a successful local economic development. national government agencies. microfinance institutions. cooperatives. This one-off intervention.).

The business community leadership is represented by the industry players. the business community leadership. the Small and Medium Enterprise Development Council (SMEDC) and the Chamber of Commerce. Figure 2. economic agencies. if any.d. Department of Trade and Industry (DTI) specialists. provides or facilitates economic development incentives and programs. create opportunities and conditions to speed up the rate of wealth creation and facilitate the exploitation of these opportunities. develops and manages human and financial resources and provides basic infrastructure.Understanding the Local Economy leadership. n. They take the lead in creating wealth by generating marketable goods and services.d. feasibility studies) such as LED and business consultants. Professional leadership are those that provide technical assistance (on small and medium enterprises. These lead entities minimize barriers to growth.) STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 19 . business planning. and other organizations with economic development mandates. and the professional leadership (McSweeney.). The potential roles of government. academic institutions. business and professional sectors in LED planning and implementation are further discussed in Chapter 2. Economic Development Leadership BUSINESS LEADERSHIP LOCAL GOVERNMENT LEADERSHIP Successful Local Economic Development PROFESSIONAL LEADERSHIP Source: McSweeney (n. Local government regulates the environment.

20 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments .

STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 21 2 . and 5) Reviewing the LED strategy. 4) Implementing the LED strategy. This chapter discusses the fivestage Strategic LED Process. 2) Doing the Local Economy and Competitiveness Assessment or the LECA.Chapter Integrating LED in Local Government Processes translates the concepts and principles of LED into concrete actions by presenting step by step procedures and tools in planning and implementing the LED strategy. 3) Formulating the LED strategy. namely: 1) Organizing the LED Effort.

circulating in and leaving a locality. deliberate and founded on sound analyses. 2008) The previous chapter discussed how the local economy works from a perspective of money flowing into. These factors and the strategies to create wealth are some of the issues that can be addressed within the LED process. infrastructure. It must be recognized though that the “leaking barrel of wealth” model and the components of economic growth as described in Chapter 1 may only be a partial representation of the economic reality in a specific locality. What critical issues in the locality’s labor force. The generic processes. actors and resources. and leadership. In this chapter. The components of the local economy presented in Chapter 1 provide the bases for analysis and strategy formulation during the LED process. It also presented the major components that affect the productive capacity of a local economy: labor force. financial capital. It should be a process that is purposeful. technology.” – (Kebede. technology and other components should be addressed and how? One of the most important insights gained from the LGSP and LGSPA LED initiatives is that the success and sustainability of LED rest on a participatory.Integrating LED in Local Government Processes “For a LED initiative to be successful it has to be clearly defined around economically functional space. strategic and planned approach. other factors that impact a community or locality may unfold and will have to be considered in the formulation of the LED strategy. Leadership is key to bring together shared vision. Undertaking a strategic planning process is 22 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . and should be locally owned and championed. approaches and tools have to be adapted and contextualized. the concepts and principles of LED are translated into concrete actions in an LGUfacilitated LED process. In the course of undertaking the LED process.

however. namely. This is because LED approaches are wide-ranging and different for each LGU.Integrating LED in Local Government Processes necessary to guide local leaders and implementers in identifying and carrying out the best alternatives to an LGU-facilitated LED. However. the Local Development Investment Program (LDIP). The LED Strategic Plan should serve as the economic sector plan integral to the bigger local development plans of the LGU. ELA or the Provincial Physical Framework Development Plan. Also. objectives. may also be done at any other time as long as the LGU is ready to pursue LED. social. is both a vehicle to implement and an instrument to concretize the economic sector plan of the LGU. 2008). infrastructure. projects and activities relevant to five development sectors. The LED process. which involves a participatory process of formulating and implementing a LED Strategic Plan between the LGU and stakeholders. the basic factors to consider in implementing and monitoring the LED strategy are incorporated in this chapter. goals. it would be ideal if the LED strategy formulation is done in conjunction with the preparation of the CDP. When does an LGU do the Strategic LED Process? LGUs in the Philippines are mandated to prepare two major plans – the Comprehensive Land Use Plan (CLUP) and the Comprehensive Development Plan (CDP). environmental and institutional. LGUs operationalize these plans with an organized mechanisms and instruments including the term-based Executive and Legislative Agenda (ELA). Thus. These plans and strategies are all products of an integrated and iterative process that include economic sector planning (LGSPA. programs. The strategic LED process. and the Annual Investment Plan (AIP). depending on local conditions. economic. examples of actual LED strategies and how these were implemented by LGUs are provided throughout this Guide. The LED Strategic Plan is the landmark document in the LED process. The CDP. STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 23 . set out the vision. The CLUP is a long-term plan that outlines strategies for managing the local territory in terms of its physical land use. This Guide is not designed to prescribe implementation activities for specific LED programs and projects. on the other hand. It should tie to and build on the LGU’s overall vision and goals as articulated in the CDP and ELA.

Integrating LED in Local Government Processes The Five-Stage Strategic LED Process There are five stages in the LED Process. which contains the economic vision. as follows: THE FIVE-STAGE STRATEGIC LED PROCESS Stage 1: Organizing the LED Effort Stage 2: Doing the Local Economy and Competitiveness Assessment (LECA) Stage 3: Formulating the LED Strategy Stage 4: Implementing the LED Strategy Stage 5: Reviewing the LED Strategy Stage 1: Organizing the LED Effort The main activity here is organizing institutional arrangements and stakeholder involvement to successfully develop and implement a LED strategy. skills. Stage 2: Doing the Local Economy and Competitiveness Assessment (LECA) This entails gathering and analyzing available quantitative and qualitative data on the sources. A LED stakeholders group is also created as a multistakeholder mechanism that will ensure the active participation of the community from planning to implementation to monitoring and evaluation. Stage 3: Formulating the LED Strategy At this stage. structures and trends in production and employment. and other resources to help identify the strategic direction for the local economy as well as potential programs and projects. 24 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . the LGU LED team together with the LED stakeholders group develops the LED Strategic Plan. an LGU LED team is created to provide leadership and establish systems and structures in undertaking the LED process. At this stage. goals and objectives as well as specific strategies in the form of programs and projects.

Integrating LED in Local Government Processes Stage 4: Implementing the LED Strategy LED program and project implementers from the LGU and other stakeholders carry out the LED strategy guided by the LED Strategic Plan. Stage 5: Reviewing the LED Strategy This involves monitoring and evaluation (M & E) activities and reviewing and enhancing the LED Strategy based on the M & E results and on changing local conditions. Stage 1: Organizing the LED Effort This marks the beginning of a collaborative undertaking wherein the LGU and community stakeholders agree on pursuing LED as an end result and as a process. The principle of participatory governance should be appreciated and demonstrated by the LGU as early as Stage 1 in order to gain public support and credibility. The primary goal of Stage 1 is for the LGU to organize institutional arrangements and stakeholder involvement in LED planning and implementation. The following sections discuss in detail how the LED process is carried out and integrated in LGU functions and activities. city or municipal-wide undertaking. organizing the LED effort may be divided into four steps: Stage 1: ORGANIZING THE LED EFFORT Step 1: Identify and establish the LGU LED Team Step 2: Establish and maintain active involvement of LGU political leaders in the LED Process Step 3: Develop a LED Stakeholders Group Step 4: Identify other tiers of government (provincial/ regional/ national) to work with STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 25 . and individual project action plans. the LED activity becomes a province. Following the general guide outlined in the World Bank documents. the overall LED implementation strategy. By engaging and organizing stakeholders at the outset.

should have knowledge and skills of the following: ‡6RFLRHFRQRPLF DQG HQYLURQPHQW GHYHORSPHQW FRQFHSWV SULQFLSOHV DQG UHDOLWLHV LQ WKH community ‡$JULFXOWXUDO LQGXVWULDO DQG VHUYLFH VHFWRU GHYHORSPHQW FRQFHSWV SULQFLSOHV DQG UHDOLWLHV LQ WKH locality 26 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . business and non-government sector. The LED process requires multi-disciplinary and multi-faceted activities. The leadership of the mayor facilitates and moves the implementation of activities faster. it is important to have a good mix of relevant technical staff and elected officials in the LGU LED team who can influence and build partnerships with other stakeholders and resource institutions.Integrating LED in Local Government Processes Step 1: Identify & establish the LGU LED Team The LGU LED team is composed of LGU officials and staff that shall take the lead in initiating and facilitating the LED process. The members of the LED team should have the background. It is not only concerned with managing the technical side of the process but also in getting ‘buy-in’ from political leaders. The LGU LED team and the departments that will be involved in the process. as well as between governmental and non-governmental lines. The LCE in particular should provide a visible leadership of the team to bring in the legitimacy. credibility and commitment of all the sectors involved in the process. The LGU LED team is expected to provide the leadership of and establish the structures and systems in the whole LED process. In the LGSPA experience. have a key role in terms of pushing legislation and approving budget appropriation in relation to LED. The Sangguniang members. the relevant and related government agencies. Thus. It should be a multi-disciplinary team that can work across LGU departmental lines. one thing common among successful LED cases is the Mayor himself/herself taking primary responsibility for LED as the Team Leader. at the minimum. The following considerations are important in the LED team composition: Involvement and leadership of the LCE and the Legislative Council. skills and the attitude to push forward and champion the process. on the other hand. Panglunsod or Panlalawigan). A very important consideration in the formation of the team is the degree of participation and involvement of the LCE and the members of the local legislative council (Sangguniang Bayan. Multi-disciplinary.

Integrating LED in Local Government Processes ‡3DUWQHUVKLSEXLOGLQJDQGQHWZRUNLQJ ‡*URXSSURFHVVHVDQGG\QDPLFV HJ´YHVWHGLQWHUHVWVµSROLWLFDOOLQNDJHVDQG´WXUIµSURWHFWLRQ.

ELA and other LGU plans. the economic sector planning committee can serve as the initial core members of the LGU LED team. can facilitate the integration of the LED Strategy into the CDP. Tourism is also a significant source of income of the municipality. project management. Sample composition of the LED Team SUGGESTED COMPOSITION OF THE LGU LED TEAM Who? Local Chief Executive/Mayor Municipal Planning and Development Coordinator Municipal Agriculture Officer Municipal Treasurer Municipal Assessor Municipal Budget Officer Chairperson of the Legislative Council Committee on Agriculture Chairperson of the Legislative Council Committee on Finance Municipal Tourism Officer Municipal Local Government Operations Officer Why? Can provide leadership and political influence in the formulation and establishment of structures and systems LED planning is integral in municipal planning. financial management and fund-raising ‡2UJDQL]DWLRQDODQGFDSDFLW\GHYHORSPHQWIUDPHZRUNDQGGHVLJQ ‡)DFLOLWDWLRQWUDLQLQJDQGFRPPXQLFDWLRQV For LGUs that have completed the CDP-ELA. Can recommend policies in support of local economic development Can push for the appropriation of budget necessary for LED implementation. can facilitate the implementation of tourism programs and projects Can help champion the LED process and guide team regarding LGU mandates In establishing the LGU LED team. Can provide information on the valuation of land and resources in the locality Can provide information on the budget available for the LED activities. Table 1. can facilitate implementation of agri-based LED programs and projects Can provide information on the LGU resources that will be available for the process. Most of the municipality’s economic activities are agri-based. ‡0DQDJHPHQW FRQFHSWV DQG VNLOOV VXFK DV WHDPEXLOGLQJ SUREOHPVROYLQJ DQG GHFLVLRQPDNLQJ processes. concepts and objectives STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 27 . This can be expanded based on the requirements of the LED process. it is important to level off on the task and responsibilities of the team. The following activities and decisions are therefore critical in establishing a coherent team: a) Conduct orientation and preparatory meetings to level off on LED process.

It can also facilitate the discussion with the members of the Local Development Council (LDC) as the secretariat of the council. innovation. which is an aspiration and mandate inherent in all local governments The following decision makers and department heads are relevant and must be present. The team should fully understand and recognize LED as: x A strategy for wealth creation. in behalf of the LCE. the Planning and Development Coordinator can facilitate the technical and day-to-day LED process. the DA’s Agriculture Officer. bottom-up planning. in the team orientation: x x x x x x x x x x x x LCE (Mayor or Governor) Vice Mayor or Vice Governor Planning and Development Coordinator Treasurer Budget Officer Agriculture Officer Tourism Officer Administrator Assessor Chairpersons of the Committees on Economic Development. alleviation of poverty and improved quality of life. DTI technical staff Other department heads that the LGU sees fit It is important that the decision makers understand their individual and collective role in facilitating the LED process. where applicable.Integrating LED in Local Government Processes Orientation meetings should provide guidance on the LGU LED team on the overall objective. and. x A process that promotes self-help. and sustainable development incorporating environmental. private and civil x x society sector collaboration. empowerment. social and cultural responsibility with economic development A potential contributor to the LGU’s future revenue growth A purposeful and planned approach to pursuing economic transformation. Agriculture. scope and concepts of the LED process. ultimately. job and income generation. the Planning Coordinator. public. together with the Treasurer and Budget Officer are the core members of the Local Finance Committee (LFC) which is the body task with determining LGU finances and budget ceilings and therefore plays very important role in ensuring that LED projects 28 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . For instance. and Finance and Appropriation of the local Sangguniang Government agencies’ staff working with in the LGU like the DILG’s Local Government Operations Officer (LGOOs). On the other hand.

While the LCE can exercise overall leadership. After such working arrangements are agreed upon.Integrating LED in Local Government Processes and activities are prioritize and allocated resources. STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 29 . the LCE then issues an executive order creating the LGU LED team and defining its composition and functions.g. The LGU can tap LED experts coming from the government (i. the LGU LED team has to agree on is its own terms of reference.e. in the course of the LED process. exhibits leadership qualities and develops a reputation of getting things done becomes the de facto Assistant Team Leader. Table 2 gives an example of the decisions made by an LGU regarding the specific roles of the LGU LED team. DTI). The LGU LED team members and their functions and activities at each stage of the LED process should also be specified in a terms of reference so that there is a clear delineation of responsibilities and accountabilities. the private sector (e. a member of the LED team who. As mentioned. In the LGSPA experience. this task is normally delegated to the Municipal Planning and Development Coordinator (MPDC). The team has also to agree on the operational guidelines of the whole LED process. or entrepreneurs) or the academe to assist in the orientation and the orientation and initial preparations for the LED process. Sometimes. the main objectives of the LGU LED team are to provide leadership in the LED process and establish the structures and systems in the formulation and implementation of the LED Plan. b) Agree on the terms of reference for the LGU LED Team In the course of team meetings and consultations. business groups. local consultants. the functional and day-to-day project management and coordination work can be delegated to a key office.. or the Municipal Administrator or another senior officer who has the LCE’s confidence..

Example of LGU LED Team Roles and Scope of Work FUNCTIONS OF THE LGU LED TEAM ‡ )DFLOLWDWHWKHGLDJQRVLVDQGDVVHVVPHQWRIWKHORFDOHFRQRP\LQFOXGLQJGDWDJDWKHULQJSURILOLQJ analyzing/assessing the economy ‡ )DFLOLWDWHWKHIRUPXODWLRQRIWKH/('6WUDWHJLF3ODQ ‡ )DFLOLWDWHWKHOHJLWLPL]DWLRQRIWKH/('6WUDWHJLF3ODQ ‡ 3URYLGHWKHSROLWLFDOOHDGHUVKLSLQWKHLPSOHPHQWDWLRQRIWKH/('6WUDWHJLF3ODQ ‡ 2UJDQL]HWKH/('VWDNHKROGHUVJURXSDQGFRRUGLQDWHWKHLUDFWLYLWLHV ‡ 6HUYHDVWKH7HFKQLFDO:RUNLQJ*URXS LIQRVWUXFWXUHVDUHRUJDQL]HG\HW.Integrating LED in Local Government Processes Table 2.

LQWKHLPSOHPHQWDWLRQ of the LED Plan ACTIVITIES OF THE LGU LED TEAM IN THE LED STAGES Stage 1: 2UJDQL]LQJWKH/('(IIRUW   ‡ 6WDNHKROGHUDQDO\VLVDQGRUJDQL]LQJRIWKH/('VWDNHKROGHUVJURXS ‡ 2UJDQL]HDWHFKQLFDOZRUNLQJJURXS 7:*.

DQGRWKHUUHTXLUHGFRPPLWWHHV structures and systems ‡ .GHQWLI\RWKHUWLHUVRIJRYHUQPHQWWRZRUNZLWK Stage 2: 'RLQJWKH/RFDO(FRQRP\ DQG&RPSHWLWLYHQHVV $VVHVVPHQW /(&$.

 ‡ /RFDOHFRQRPLFGDWDDQGLQIRUPDWLRQJDWKHULQJZLWK/('VWDNHKROGHUV ‡ /RFDOHFRQRP\SURILOLQJZLWK/('VWDNHKROGHUV ‡ /RFDOHFRQRP\DVVHVVPHQWDQGDQDO\VLVZLWK/('VWDNHKROGHUV Stage 3: )RUPXODWLQJWKH/('6WUDWHJ\ ‡ )DFLOLWDWHVWUDWHJ\IRUPXODWLRQ  ‡ . STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments .PSOHPHQWLQJWKH /('6WUDWHJ\ Stage 5: 5HYLHZLQJWKH/('6WUDWHJ\ 30 ‡ &RRUGLQDWHWKHLPSOHPHQWDWLRQRIWKH/('6WUDWHJLF3ODQ ‡ &UHDWH7HFKQLFDO:RUNLQJ*URXSV3URMHFW.QFROODERUDWLRQZLWKWKH/('VWDNHKROGHUVJURXSGHYHORSWKH/(' Strategic Plan Stage 4: .PSOHPHQWDWLRQ7HDPVRUDGKRF committees to implement the programs and projects ‡ )DFLOLWDWHWKHHYDOXDWLRQDQGUHYLHZRIWKH/('VWUDWHJ\WRJHWKHUZLWKWKH  LED stakeholders group.

The consistent participation and interest of the LGU political leaders are important from the planning to the executing stages of the LED process.Integrating LED in Local Government Processes c) Determine the appropriate budget for the LED Strategy formulation A key decision that the LGU LED team has to agree is the budget required for the LED process. meals. The LGU LED team should agree on the involvement of the political leaders in the entire LED process and not just on the membership in the team. The budget for LED organizing up to planning may include cost of materials. The political leaders need to ensure that the LED process and strategy are incorporated or adopted in the formal development plans of the LGU such as the CDP and ELA. The LGU LED team should have enough resources for meetings. the strong and visible support from the leaders is important and imperative in the LED process from planning up to the execution of the economic development strategy. coordination. In the LED project of LGSPA. Situated in this department. which in turn can help guarantee coordination with other LGU departments. transportation. the activities of the LED team can be coordinated by the office of the Mayor (or Governor) especially if the LCE is the designated leader of the LED team. In the course of the LED process and particularly in the execution of the LED strategy. the LGU LED team was usually lodged in the Mayor’s Office. data collection and workshops. Establishing the LED team in the office of the LCE has the advantage of ‘visibility’ and political weight. communication. d) Determine where the LGU LED Team will be established in the LGU In the initial stages of the LED process. The LGU leaders also need to assure that the LED process and strategy are included in the long term and annual investment programs of the STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 31 . The political leaders as managers and as esteemed community leaders should champion the process within the LGU and among the community stakeholders. printing. Step 2: Establish and maintain active participation and involvement of LGU political leaders As already emphasized. LED is likely to have a higher profile and exhibit more of a policy and facilitation focus. as well as the cost of LED experts that may be tapped by the LGU. the LGU eventually have to decide to organize mechanisms to support the implementation of the LED plan including the possible formalizing of the LED team as an economic coordinating or support group in the LGU.

LED stakeholders vary across LGUs. evaluation and reporting system and performance management system that would include participation from stakeholders and relevant special bodies that would become a basis for economic plan improvement and policy development c) Ensuring that the LED process and strategy are given due importance and priority in the LGU annual budget process Step 3: Develop a LED Stakeholders Group With the LGU LED team formally organized. it can now move on to the heart of LED process .the identification and involvement of the community-based stakeholders group. the LGU LED team also needs to identify stakeholders from the public sector (including the appropriate regional and provincial line agencies). b) Establishing monitoring. 32 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments .g. organizations or groups in the public. and the Association of Barangay Captains in the LED planning and implementation mechanisms. private sector economic stakeholders largely come from producers (e. These are individuals and organizations who: a) have a stake in LED issues. 2006). b) might benefit or be affected negatively by the LED process. farmers and farmer groups) and traders including cooperatives. and it is therefore appropriate to include these levels of government into the strategic planning process when necessary (Swinburn et al.Integrating LED in Local Government Processes LGU. National. relevant Local Special Bodies.. the labor sector. c) should be included because of their formal position. businesses. regional and provincial levels of governments have a key role to play in facilitating an environment that is conducive to local economic development. Other areas where participation of political leaders may be concretized in the LED process are by: a) Involving the Local Development Councils.. The critical question that the LGU LED team needs to answer is who are its economic development stakeholders? Who is the private sector in the locality? Aside from the private business sector. Normally in low-income and generally rural/urbanizing areas. d) should be included because they control resources or e) have the power to block LED implementation. and the community and civil society organizations. The World Bank’s LED Trainer’s Manual defines stakeholders as individuals. private and non-profit sectors that have an interest in strategizing and implementing LED programs and projects.

It is also important to add that stakeholders identified should be those that have offices or area of operations located in the city/municipality if it is a city/municipal LED process or located in the province if it is a provincial LED process. state colleges and universities. Table 3. government financing institutions such as Land Bank of the Philippines.. provincial government.QVWLWXWLRQVRIUHVHDUFKDQGKLJKHU  OHDUQLQJVXFKDVSXEOLFVFKRROVDQG  VWDWHXQLYHUVLWLHV ‡ 3XEOLFXWLOLWLHV ‡ *RYHUQPHQWILQDQFLDOLQVWLWXWLRQV    ‡0LFURVPDOODQGPHGLXPVFDOH entrepreneurs ‡/DUJHFRUSRUDWLRQV ‡&RRSHUDWLYHV IDUPHUVDQG fisherfolks associations ‡%DQNVSDZQVKRSVDQGRWKHU  SULYDWHILQDQFLDOLQVWLWXWLRQV ‡5LFHDQGFRUQPLOOHUV ‡&KDPEHUVRI&RPPHUFH ‡3URIHVVLRQDODVVRFLDWLRQV ‡1HZVPHGLD ‡7UDQVSRUWDVVRFLDWLRQV ‡0DUNHWYHQGRUVDVVRFLDWLRQV ‡3ULYDWHXWLOLWLHV ‡3ULYDWHHGXFDWLRQHVWDEOLVKPHQWV Community and CSOs ‡ &LYLOVRFLHW\RUJDQL]DWLRQV o People’s organizations    ZKHWKHURUQRWUHJLVWHUHG. Department of Science and Technology. the following agencies and offices in the Autonomous Regional Government (ARG) were included as stakeholders in the LGU LED process: Department of Trade and IndustryARMM (DTI-ARMM). The list is not meant to be exhaustive. Examples of Stakeholders in the LED Process Public Sector Business and Labor ‡ /RFDOJRYHUQPHQWLQFOXGLQJWHFKQLFDO departments. chambers of commerce. Department of Agriculture and Fisheries (DAF-ARMM) and attached agencies like the Philippine Carabao Center (PCC).g.   R2IILFHRIWKH0D\RURU*RYHUQRU   R/HJLVODWLYH&RXQFLO&RPPLWWHHVRQ Agriculture. Table 3 provides a list of potential stakeholders in the LED process in a locality. e. business councils. and Finance   R3ODQQLQJDQG'HYHORSPHQW2IILFH   R$JULFXOWXUH2IILFH ‡ 3URYLQFLDOGLVWULFWUHJLRQDORUQDWLRQDO  JRYHUQPHQWGHSDUWPHQWRUDJHQF\ ‡ . Infrastructure.Integrating LED in Local Government Processes In the context of the ARMM.

An example of this analysis is illustrated in Table 4. This type of analysis is useful in identifying key stakeholders that will compose the LED stakeholders group. STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 33 .   R1RQJRYHUQPHQWRUJDQL]DWLRQV o Women’s associations ‡ $JULFXOWXUHDQG)LVKHULHV  &RXQFLO ‡ )LVKHULHVDQG$TXDWLF5HVRXUFHV  0DQDJHPHQW&RXQFLO  &RPPXQLW\OHDGHUV  Engaging the stakeholders’ group will involve two key tasks: a. role and contribution in the LED process. Conduct Stakeholders Analysis After a long list of stakeholders is drawn up. the LGU LED team analyzes each identified stakeholder in terms of their interests.

The LED stakeholders group should be engaged throughout the five stages of the LED process and become the core of a permanent public-private partnership to manage the implementation of the LED Strategic Plan. 34 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . The LED stakeholders group serves as a forum for eliciting inputs from industry and civil society perspectives. and pooling resources for LED implementation. building networks and linkages. discussing and resolving economic issues. productivity enhancement Important Strategic planning program/ project implementation Rubber Budders Association Business opportunity. poverty alleviation in rural areas Essential Partner in implementation Vendors Association Expansion of client base Essential Strategic planning program/ project implementation Farmers’ Cooperative Business opportunity.Integrating LED in Local Government Processes Table 4. and pooling resources for LED implementation. market expansion. The LED stakeholders group should be engaged throughout the five stages of the LED process and become the core of a permanent public-private partnership to manage the implementation of the LED Strategic Plan. Orient and level off with the LED Stakeholders Group The LED stakeholders group serves as a forum for eliciting inputs from industry and civil society perspectives. skills development Important Program/project implementation Electric Cooperative Expansion of client base Important Program/project implementation Philippine National Police Mandated to protect the people and maintenance of peace and order Minor Provide protective services b. production and market expansion Important Program/project implementation Women’s Federation Business opportunity. Example of Stakeholders Analysis for Partnership Stakeholder Description of Interest in LED Partnership Assessment Key Potential Role in the LED Process Barangay Government Units LED impact area. building networks and linkages. discussing and resolving economic issues.

evolves into a formal organization by virtue of a Legislative Council resolution. functions and composition as illustrated in Table 5 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 35 . an advisory committee or any other variation. The provincial. Like the LGU LED team. a task force. Whether or not the stakeholders group should be subsumed in any existing multi-sectoral body is a decision that rests with the LGU and other stakeholders. A secretariat of about three to five people from the LGU and (in the case of Tugaya) the private sector was also formed to provide administrative and support services including documentation. It can take the form of a coordinative council. A minimum of 20 and a maximum of about 35 members would be a good size. communications. record-keeping. the LED stakeholders group should also draw up a ‘terms of reference’ as to their objectives. n. The LED stakeholders group may start out as an ad-hoc advisory body created through an executive order and. In the LGU-facilitated LED cases in LGSPA. arranging meetings and keeping the Mayor abreast with LED activities.).d. in the course of LED implementation. but small enough to carry on meaningful discussions and reach consensus (USAID LED Ukraine. which is mandated by DILG Memorandum Circular 2002-107. may also be looked into as a possible organization to function as the stakeholders group.Integrating LED in Local Government Processes The LED stakeholders group must be large enough to ensure representation of all major groups in the community. city or municipal Small and Medium Enterprise Development Council (SMEDC). For example. the Provincial LED stakeholders group in the province of Sulu is the Sulu Kahawa Sug Task Force. the Mayor also headed the LED stakeholders group.

Integrating LED in Local Government Processes Table 5. strategy formulation and implementation Barangay Public Employment Service Office (PESO) Coordinators Association LED is directed towards employment generation Can help out in LECA Functions of the LED Stakeholders Group ‡ &UHDWHSXEOLFDZDUHQHVVRIWKH/('SURFHVVDQGWKHQHHGIRUFRPPXQLW\LQSXWDQGVXSSRUW ‡ . strategy formulation and implementation Can help out in LECA.Chinese Chamber of Commerce Can help out in LECA.QYLWHRWKHUVWRSDUWLFLSDWHLQYDULRXVVWDJHVRIWKHSURFHVVWREURDGHQDZDUHQHVVDQGFRPPLWPHQW ‡ 3URYLGHLQSXWVLQWKHJDWKHULQJLQWHUSUHWDWLRQDQGDQDO\VLVRIWKH/(&$ ‡ $FWLYHO\SDUWLFLSDWHLQWKH/('VWUDWHJ\IRUPXODWLRQDQGLQWKHLQWKH7HFKQLFDO:RUNLQJ*URXSV ‡ &RQWULEXWHLQWKHLPSOHPHQWDWLRQRIWKH/('VWUDWHJ\HLWKHULQDGYRFDF\DFWXDOLQYHVWPHQWWHFKQLFDODVVLVWDQFH ‡ /LDLVHZLWKSURYLQFLDOUHJLRQDODQGQDWLRQDOHFRQRPLFDJHQFLHVDQGRWKHULQVWLWXWLRQVZLWKHFRQRPLF development mandate to ensure that local priorities are known to them and supported by them ‡ $GYRFDWHDQGZRUNIRUVWUHQJWKHQLQJWKHFDSDFLWLHVRIWKHPHPEHUVRIWKH/('VWDNHKROGHUVJURXS Activities of the LED Stakeholders Group in the LED Stages Stage 1: Organizing the LED Effort  ‡3DUWLFLSDWHLQSODQQLQJWKHDFWLYLWLHV for the LED stages Stage 2: Doing the Local Economy and Competitiveness Assessment (LECA)  ‡8QGHUWDNH/(&$  ‡3URYLGHGDWDRQWKHHFRQRP\  ‡3URYLGHWHFKQLFDODVVLVWDQFHLQWKHDQDO\VLV Stage 3: Formulating the LED Strategy  ‡3URYLGHWHFKQLFDODVVLVWDQFHLQ strategy formulation  ‡3URYLGHLQIRUPDWLRQDQGVNLOOVLQ value chain analysis 36 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments Stage 4: Implementing the LED Strategy  ‡6WHHUWKHLPSOHPHQWDWLRQRIWKH/('VWUDWHJ\  ‡3URYLGHUHVRXUFHV KXPDQWHFKQRORJ\ financial) and technical assistance on required training and capacity building interventions  ‡&RQGXFWOLQNDJLQJDQGQHWZRUNLQJ Stage 5: Reviewing the LED Strategy  ‡5HYLHZDQGHYDOXDWH/('VWUDWHJ\ implementation . Example of LED Stakeholders Group Composition and Scope of Work Composition of the LED Stakeholders Group Who? Why? Rural Bank Can provide information on the economy and participate in LED strategy implementation Electric Cooperative Colleges Can help out in LECA and strategy formulation Can provide human resource development intervention and technical assistance Market Vendors Association Filipino .

community. Primary Sector . poverty reduction strategies and gender sensitivity promotion. ‡ (FRQRPLF²7KLVLQFOXGHVGDWDRQSURGXFWLRQQXPEHURIILUPVDQGHPSOR\PHQWLQHDFKRIWKH three industry sectors (primary. the following activities are listed under each sector: i. A detailed assessment of the basic components of economic development is also conducted particularly in relation to job creation. insurance. Tertiary Sector . and. social and personal services 37 . livestock. the LECA is a valuable process in the LGU specifically in the economic sector planning and in identifying the industry sector that would contribute to the wealth creation program of the LGU. finance. presence of institutions providing education.Agriculture. The LECA is anchored on the value chain and industry competitive assessment. and. secondary. transportation.Integrating LED in Local Government Processes Stage 2: Doing the Local Economy and Competitiveness Assessment (LECA) A good Local Economy and Competitiveness Assessment (LECA) is the foundation of a solid LED strategy. construction iii. inputs and tools used in LGSPA’s LGU capacity-building project on facilitating LED. training and research services. In the context of the LGSPA experience. electricity. fishery and forestry ii. and. Secondary Sector . highest educational attainment.Mining and quarrying. STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 1 According to the Philippine Standard Industry Classification. contents and organization of Stage 2 in this Guide are largely based on the design. manufacturing. real estate and business services. gas and water. storage and communication. tertiary1 ) of the economy.Wholesale and retail trade. The steps. The whole LECA process can be done in six sub-steps namely: Stage 2: Doing the LECA Step 1: Collect and assess local economic data Step 2: Conduct Local Resource Inventory and Assessment Step 3: Conduct a SWOT Analysis of the local economy Step 4: Conduct Value Chain Analysis Step 5: Identify priority industries Step 6: Document the LECA Step 1: Collect and assess local economic data The data needed for the local economy profiling are categorized into the following: ‡ 'HPRJUDSKLF²7KLVLQFOXGHVGDWDRQ/*8SRSXODWLRQVL]HJURZWKGHQVLW\DJHGLVWULEXWLRQ labor and employment.

Integrating LED in Local Government Processes
‡ %XVLQHVVHQDEOLQJHQYLURQPHQW²7KLVLQFOXGHGDWDRQWKHDYDLODELOLW\RIEXVLQHVVHQDEOLQJDQG
support systems in the LGU taxation and business registration system, bureaucratic procedures,
and business and investment promotion services. This also includes an assessment of the local
government capacity to carry out local economic development functions based on LGU income,
assets, capacity of the structures, skills of key LGU officials on LED planning and implementation,
and existence of approved development plans.
‡ ,QIUDVWUXFWXUH²7KLVLQFOXGHVGDWDRQWKHDYDLODELOLW\DQGFRQGLWLRQRIXWLOLWLHVURDGWUDQVSRUW
modalities, telecommunication, land and real estate development, and agriculture development
infrastructure.
‡ 3URYLQFLDO UHJLRQDO DQG QDWLRQDO HFRQRPLF IDFWRUV WKDW LPSDFW WKH ORFDO HFRQRP\ VXFK DV
provincial, regional, and national programs and policies and global trends.
The full list data requirement for the economic profiling is attached in Annex B of this Guide. The LGU
LED team and the LED stakeholders group should identify sources and plan where to collect the data
required for the local economy profiling.
Data Sources
A broad range of approaches can be used to obtain information for the profiling such as desk-based
research, questionnaires and surveys (e.g., local business enabling environment and business attitude
surveys), structured/unstructured key informant interviews and focus group discussions. The LGU
should choose the approach that is the most doable given the availability of data and time and cost
considerations.
One excellent source of information is the Socio-Economic Profile (SEP) and the Ecological Profile (EP)
updated by the LGU in the formulation of the CDP-ELA. Updating the SEP and EP during the LED
process reinforces the importance of socio-economic data and thus, contributes to the enhancement and
development of the LGU’s economic database and sectoral plans.
Among the specific data sources are the National Statistics Office for official statistics on population and
demographics. For the economic data, sources include the DTI, DA, NEDA, area-based offices such as
the MEDCo (in Mindanao) and other similar agencies, and the provincial government.
For the business enabling environment, the information on this can be generated from the LGU personnel
and the LED stakeholders group through a focus group discussion or survey. LGU self-assessment of
the LGPMS is also an important source particularly for the indicators under the Economic Governance
38

STRATEGIC LOCAL ECONOMIC DEVELOPMENT:
A Guide for Local Governments

Integrating LED in Local Government Processes
performance area of the system.
The following information, which are the result of the analysis of the economic data as discussed in the
Guide to Comprehensive Development Plan (CDP) for the Local Government Unit (DILG, 2008), can
also be used as reference for LGUs that have already undertaken these kinds of economic analysis during
CDP formulation:
x
x
x
x
x
x

Food self-sufficiency or security
Level of urbanization or the percentage of the population engaged in non-agricultural activities.
Structural shift or changes in the relative share of each sector (primary, secondary and tertiary)
to the total economy over time.
The locality’s industry or sector specialization using the location quotient (L.Q.), which is an
indicator of the relative importance of an area in terms of selected industry types or sectors.
Linked economic activities in terms of production backward and forward linkages as well as
trade and services linkages.
The inflow and outflow of money into the local economy using the money flow theory (like the
“leaking barrel” model shown in Chapter 1).

Results of performance and competitive assessments are also important sources of information that
the LGU can utilize. This includes information generated from the Local Governance Performance
Management System (LGPMS)2 and other systems such as the Competitive Assessment Program (used
mostly by cities), Balance Scorecard and others.
Understanding the data
The collected data are then organized according to Local Economy Profile outline. For data to be
meaningful, these have to be interpreted and presented in context. For example, if the volume of corn
production in a municipality is 100 tons annually, how does this compare against other crops in the area,
against corn production in other municipalities or against the provincial or regional performance?
In assessing the local economy, it is necessary to compare, contrast and evaluate local data with the
larger area of which the LGU is a part: nation, region and province. Understanding the community’s
relative competitiveness requires a comparison with other municipalities or communities located nearby,
perhaps within the same metropolitan area or region, or adjacent to the community. It is important to
evaluate local indicators and trends, and compare them with national data to determine differences and
commonalities. This can provide important information on the competitiveness of an LGU at a national
level. A local economy assessment also requires comparisons of trends over time. (World Bank & Cities
of Change, n.d.).
STRATEGIC LOCAL ECONOMIC DEVELOPMENT:
A Guide for Local Governments

2 The LGPMS is a web-based
database system of an LGU selfassessment tool that enables
provincial, city and municipal
governments to monitor and
evaluate their performance
in five performance areas/
sectors, namely, governance,
administration, social services,
economic development and
environmental
management,
at three levels of results:
input, output and outcome
levels (LGSPA, 2008). LGUs
are required by the DILG to
collect data and assess their
performance against these
LGPMS measures.

39

Integrating LED in Local Government Processes

Step 2: Conduct Local Resource Inventory and Assessment
The Local Resource Inventory and Assessment (LRIA) is used to determine the major economic resources
in the area and to assess the potential contribution of each resource to local economic development. The
LRIA forms the basis for value chain analysis and priority industry selection. Some of the data needed for
this step can be obtained from the data generated in Step 1.
In the LRIA, as illustrated in Table 5, the LED stakeholders group determines the:
a)

Major land, sea and forest resources in the area under the three economic sectors: primary, secondary
and tertiary.
b) Location and size of each resource in terms of area covered and value and volume of production.
c) Existing local economic activities with regards to each resource
d) Forward and backward linkages of these industries/economic activities, including linkages outside
of the local economy. Production, trade and services linkages identified in the CDP formulation
can be used as a reference for this. Industry players and industry studies can also provide more
information.
e) Opportunities for development including regional, provincial, national programs and policies that
provide financial, technical, development services in support to the development of the resource
such as official development assistance and national agencies’ program assistance relevant to the
resource. These can be gleaned from the “Provincial, Regional, and International Factors” section of
the Local Economy Profile. Opportunities can also include potential markets for each resource.
Table 6. Example of Template for Local Resource Inventory and Assessment
Sector/Resource

Location and Size

Activities Done
in the Locality

Forward and Backward
Linkages

Opportunities for
Development

Land Resources
Example:
Agriculture Sector
Corn

20 barangays
18,268 hectares 67%
of agricultural land

Corn farming
Corn shelling

Volume:
36,000 tons/year
Value:
PhP468 million/year

Forward:
Milling
Trading
Warehousing
Backward:
Seedling production
Pesticide production
Fertilizer production
Machinery fabrication

Sea/Aquamarine Resources
Forest and Mineral Resources

40

STRATEGIC LOCAL ECONOMIC DEVELOPMENT:
A Guide for Local Governments

DA subsidizes seeds and
provides technical
and marketing
assistance

Issues identified in the SWOT inform the crafting of the vision. The SWOT Analysis is most useful in defining the focus of the LED Strategic Plan. environmental. Source: Adopted from World Bank & Cities of Change LED Trainer’s Manual STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 41 . Weaknesses are local obstacles or constraints to a thriving economy: these can be social. maximize strengths. which can be used in doing a SWOT analysis of the local economy. legal. physical. based on the five fundamental components of the economy discussed in Chapter 1. Table 7 gives specific parameters. take advantage of opportunities and overcome or reduce the influence of threats. 2007). financial or regulatory constraints. information and perceptions on the local economy from a standpoint of overall competitiveness (Cities Alliance. Strengths are local assets or factors that give the area an advantage and make it attractive for investment. Threats are unfavorable trends or developments external to the economy that can lead to a decline in competitive advantage. A community’s competitive position is a function of internal (strengths and weaknesses) and external (opportunities and threats) factors. The Local Economic Profile and the result of the LRIA are important sources of information for this exercise. growth and development. goals and objectives and designing of programs and projects that eliminate or minimize the weaknesses. Opportunities are external factors that make it easier to develop a competitive advantage. Internal factors are attributes of the locality and are within the influence of the LGU while external factors refer to trends and conditions of the external environment that are beyond the LGU’s control.Integrating LED in Local Government Processes Step 3: Conduct a SWOT Analysis of the Local Economy Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis is conducted by the LGU LED team together with the LED stakeholders group to integrate and summarize data.

Integrating LED in Local Government Processes Table 7. Example of a Template for SWOT Analysis of the Local Economy FACTOR INTERNAL ANALYSIS STRENGTHS WEAKNESSES Labor Market Skills Wage Rates Availability Financial Capital Private capital Public capital Access to Markets Proximity or distance to market centers Proximity to suppliers Transportation Access to major highways Access to airports Access to ports Access to trains Sites and facilities Number of sites and size Infrastructure Utilities Telecommunications Number of existing structures Knowledge Resources Research/Development facilities Industry or trade Association Education and Training Colleges or universities Higher technical training Vocational skills training Business services and Technical Support Business Climate Government responsiveness (including capacity to carry out LED functions) Taxes Regulations and controls Cooperation/assistance with private sector Quality of Life Cost of living Culture and recreation Public services (including peace and order) Attractiveness of city Natural resources Source: Adopted from World Bank & Cities of Change LED Trainer’s Manual 42 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments EXTERNAL ANALYSIS OPPORTUNITIES THREATS .

2007). and interrelationships. roles. The basic objectives of the value chain analysis are to: x Identify market channels. the LRIA. forward and backward linkages. A value chain can be defined as all the firms within a subsector or industry that buy and sell from each other in order to supply a particular set of products or services to final consumers (Lusby & Panlibuton. suppliers. which is a tool in mapping industry structure (how industry participants interact to bring products to the market) and assessing industry-specific competitiveness. presence of MSMEs. their number. Each of the resources is subjected to a value chain analysis. The result of the SWOT analysis is also important information in the value chain analysis. and a range of market actors in between. and participation of women) that can be analyzed using the value chain: STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 43 .Integrating LED in Local Government Processes Step 4: Conduct Value Chain Analysis The LED stakeholders group then selects as much as the top ten resources of the LGU in terms of value or volume of production as determined in Step 2. including the number of women industry players x Identify constraints (weaknesses and threats) that are holding back growth and competitiveness of local firms participating in the value chain x Pinpoint priority areas for reform within the environment in which these industries or firms operate x Identify the strengths of the industry and opportunities for stimulating wealth creation and alleviating poverty in the local economy Table 8 describes the industry competitiveness factors (market demand. market trends and market potentials within the value chain x Identify the primary actors in the value chain. reach. It shows the relationships and linkages among buyers.

Integrating LED in Local Government Processes Table 8: Examples of Factors to Consider in a Value Chain Analysis FACTOR DESCRIPTION Market Demand    ‡ 2SLQLRQVDQGGDWDIURPNH\LQIRUPDQWVRQPDUNHWWUHQGVDQGLQGXVWU\FRPSHWLWLYHQHVV ‡ .QIRUPDWLRQIURPH[LVWLQJVWDWLVWLFVVWXGLHV ‡ ([DPSOHVRIEXVLQHVVHVWKDWKDYHSUREOHPVPHHWLQJGHPDQG ‡ &RPSDULVRQVZLWKLQWKHUHJLRQ EDVHGRQRSLQLRQVIURPNH\LQIRUPDQWVRIPDUNHWLQIRUPDWLRQ.

 Reach  ‡ (VWLPDWHRIWKHQXPEHURIHQWHUSULVHVIRUHDFKW\SHRIILUPLQWKHYDOXHFKDLQ LQSXWVXSSOLHUV  producers. wholesalers. etc.) ‡ $YHUDJHILUPVL]HIRUWKHGLIIHUHQWW\SHVRIYDOXHFKDLQILUPVLQWHUPVRIFDSLWDOL]DWLRQDQGQXPEHURI employees/employed ‡ $YHUDJHVDODU\ZDJHVIRUHPSOR\HHVLQGLIIHUHQWW\SHVRIYDOXHFKDLQILUPV Significant Presence of MSMEs in the rural areas* ‡ (VWLPDWH LQDIHZJHRJUDSKLF]RQHV.

RIWKHQXPEHURI060(V DWDOOOHYHOVRIWKHVXEVHFWRU.

The determination of forward and backward linkages that is done in the LRIA provides the starting point for the value chain analysis.WKDW exist outside of urban areas ‡ 'HVFULSWLRQRIWKHW\SHRIHQWHUSULVHVLQWKHYDOXHFKDLQWKDWRSHUDWHRXWVLGHRIWKHPDMRUXUEDQ areas  Significance of ‡ 'HVFULSWLRQRIWKHGLIIHUHQWNLQGRIWUDQVDFWLRQVWKDWWDNHSODFHDPRQJORFDOPDUNHWDFWRUVLQWKH Forward and value chain Backward Linkages ‡ *HQHUDOGHVFULSWLRQRIWKHYROXPHDQGQXPEHURIWKHVHWUDQVDFWLRQVEHWZHHQDJLYHQQXPEHURI among Local firms Market Actors Participation of Women ‡ 1XPEHURIZRPHQZKRDUHVHOIHPSOR\HGRZQEXVLQHVVHVRUZRUNDVHPSOR\HHVLQWKHYDOXHFKDLQ (should include participation at all levels of the value chain) *In this example. These can be found in government agencies. A value chain map presents. 2007). or statistics that provide information on the targeted value chain. in graphical form. and with implementing organizations. all the major actors in a targeted value chain as illustrated in Figure 3. It is also important to identify “key informants” who are particularly knowledgeable about the value chain as a whole (Lusby & Panlibuton. The value chain analysis activity can bring together producers. reports. A good starting point for conducting any analysis is to access existing studies. government agencies and other stakeholders in the different segments of the value chain to jointly seek solutions to overcome key impediments that affect the performance of the chain (The World Bank Group. emphasis is given to the rural area it being the target of poverty reduction goals. They can include members of the LED stakeholders group. 2007). with donors. 44 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments .

The criteria for selection can include availability of resources (human. demand conditions. number of supplier industries. physical. capital and knowledge resources. Using a tool such as this will allow the LED stakeholders group to identify – in a systematic way – industries or products which have a competitive advantage that it would like to develop and promote (similar to the One Town One Product concept). Lanao Sur Livestock and Poultry Industry Study. and infrastructure). number of local players STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 45 . However. Step 5: Identify priority industries Priority industry selection is important so that the LGU can maximize the use of its limited resources and give focus to local industries which have the greatest potential of pushing local economic development. 2007. Table 8 shows a tool that can be used for industry prioritization.Integrating LED in Local Government Processes Figure 3. the LGU may opt to skip this industry ranking and prioritization process if there are obviously only a few. say one to three. industries in the locality that can have a substantial and widereaching impact on the economy. Value Chain Map: Dairy Subsector D O M E S T I C M A R K E T SUPPORT INDUSTRIES INFRA SUPPORT UTILITIES Water. Power & Communication FINANCING HR DEVELOPMENT RESEARCH AND DEVELOPMENT ANIMAL WASTE AND UTILIZATION Source: Wao.

etc. Requires relatively modest or unsophisticated private & social investment or easiest to develop or address as it is supported by ODA and government programs 20 Notes: a Most factors are based on Michael Porter’s Model for Industry Analysis. Infrastructure 7 7 2 4 B. with 3 as the highest score. Demand Conditionsc F. 46 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments Industry Scoreb Weighted Score (Score x Weight) . number of forward and backward linkages. quality and user cost of infrastructure available that affects the industry 5 1. and relative ease in promoting and developing the industry. It can also include other criteria that reflect the priorities of the LGU such as potential for employment generation. Human resources Weight (%) 25 Availability of human resources (in terms of quantity and skills) Location.) 15 D. Number of Players in the Industry Based on the number of MSMEs (at all levels of the subsector) that exists in rural areas. Number of forward and backward linkages Based on the volume and number of transactions that take place among domestic market actors in the value chain 10 2. Knowledge resources 5. land and other physical resources necessary to compete in the industry Amount and cost of capital available to the industry The stock of scientific. producers. c Refer to results of the value chain analysis as illustrated in Table 7. Conditions of Factors of Production 1. wholesalers. technical. Size of local demand 2. Physical resources 3.Integrating LED in Local Government Processes operating in the industry. Industries with the highest weighted scores are the priority industries. 15 E. Number of independent buyers Based on opinions & data from key informants on market trends & value chain competitiveness & information from existing statistics/studies. b Each industry is assigned a score per criterion ranging from 1 to 3. Sample Criteria Used in Priority Industry Selection Factors/Criteriaa Description/Remarks A. accessibility and cost of water. Capital resources 4. and market knowledge on the industry The type. quality. 15 C. participation of women or environmental conservation. Number of Related and Supporting /Supplier Industries (Indicated by the number of activities that are located locally) Based on the number of enterprises for each type of firm in the value chain (input suppliers. Table 9. abundance.

4 Threats 3.2 Weakness 2. SWOT Analysis of the Local Economy 2.4 Profile and Value Chain Analysis of Industry D 4.2 Profile and Value Chain Analysis of Industry B 4. Local Economy Profile 1.1 Strengths 2. Box 1: Example of a Local Economy and Competitive Assessment Report Outline I. List of Industries. Local Economy and Competitiveness Assessment A. Business Environment 4. Regional. Economic Profile 3.1 Profile and Value Chain Analysis of Industry A 4. Demographic 2.2 Sea/Aquamarine Resources 1.1 Land Resources 1. Provincial.3 Opportunities 2. Introduction (Location and Background of the LGU) II. Top 5 Industries that the Locality has Competitive Advantage 4.5 Profile and Value Chain Analysis of Industry E STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 47 . Ranked in Order of Competitiveness 4. Infrastructure 5. Competitiveness Assessment 1. Box 1 gives an example of a LECA Report outline.3 Forest and Mineral Resources 2. International Factors B. Local Resource Inventory and Assessment (LRIA) 1.3 Profile and Value Chain Analysis of Industry C 4.Integrating LED in Local Government Processes Step 6: Document the LECA The LGU LED team then puts together and packages the LECA Report and presents the final output to the LED stakeholders group for validation before the strategy formulation workshops begin.

2006). The LED Strategic Plan has following key elements: vision. goals. objectives..Integrating LED in Local Government Processes Stage 3: Formulating the LED Strategy At this stage. programs and projects. In devising this strategy. it is important that LED stakeholders are able to relate strategy formulation to issues identified in Stage 2. the LGU LED team together with the LED stakeholders group develops the LED Strategic Plan in order to set out the economic future of the locality and to address the issues identified in the LECA. As in the comprehensive development planning. Here are some guide questions that can be posed to stakeholders to trigger analysis and provide a clearer context and basis for vision setting and strategy formulation: a) 48 What critical gaps and issues or weaknesses and threats identified in the LECA need to be STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . practitioners in local government and principal stakeholder groups will need to balance local economic development with environmental and social needs (Swinburn et al. Stage 3 can be divided into eight major steps: Stage 3: FORMULATING THE LED STRATEGY Step 1: Identify critical issues from the LECA Step 2: Create a Vision Step 3: Develop Goals Step 4: Develop Objectives and Performance Indicators Step 5: Develop Programs Step 6: Select Projects Step 7: Mainstreaming Gender Responsiveness and Sensitivity to Poverty in LED Strategy Formulation Step 8: Document the LED Strategic Plan and Integrate in LGU Plans and Processes Step 1: Identify critical issues from the LECA Prior to the “Visioning” workshop. the intent is to achieve an integrated approach to local economic development strategic planning.

Goals are much more descriptive and concrete than a vision statement. In general.g. vision statements should be: a) understood and shared by members of the community. STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 49 . Stakeholders are first asked to give concise statements about their “dreams for the economic future of the community. 2006). indigenous people) and must be given special attention? Step 2: Create a Vision In a workshop.” They can draw ideas and inspiration from the critical issues identified in Step 1 in composing a vision statement. Step 3: Develop Goals Goals point to specific outcomes that the community seeks to achieve.. b) broad enough to allow a diverse variety of local perspectives to be encompassed within them. c) inspiring and uplifting to everyone involved. recognizing the municipality’s competitive position in arts and culture-based industries. In Tugaya. Good practice indicates that in selecting goals. the LED stakeholders group dialogue and agree on a vision of the preferred economic future of the community. n.).. as showcased by its metal and wood craft industry.Integrating LED in Local Government Processes b) c) d) e) addressed? What strengths and opportunities can the LED strategy seek to build on? What conclusions can be made about the competitive position of the locality? What can be realistically achieved in the timeframe of the LED strategy? What groups in the community are perceived to be disadvantaged (e. the LED stakeholders group came up with this LED vision “A prosperous and productive Tugaya that is the center of Maranao Arts and Culture in the Philippines. a manageable number is usually no more than six (Swinburn et al. and should be directly related to the findings from the LECA including the key issues arising from Step 1.d. and d) easy to communicate (Nagy & Fawcett. rural poor.” The LGU’s overall vision as articulated in the CDP and ELA can also be reviewed and reframed to reflect economic aspects and aspirations of the locality.

Of the PhP500 million annual value of corn production. Example of Goal Statements and their Link to LED Issues Goal Link to LED Issues from the LECA To be the leading producer of cattle. Table 10. The specific key result areas will be the gaps and critical issues identified in the SWOT Analysis c) Robust .reflects the voices of all people who are involved and the greatest needs and highest economic priorities of the municipality e) Concise The set of goals can include statements that are industry-specific as well as goals that impact and cut across all economic activities such as “improved local business investment climate. Having industry-based goals.” What is important is that these goals reflect the LGU priorities and addresses the major LED issues. however.Integrating LED in Local Government Processes Table 10 illustrates how goal statements are linked to LED issues.it leaves open a variety of possible means d) Inclusive . provide focus or a clear sense of purpose to the LGU and these normally become the 50 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments .QDGHTXDWH SRZHU VXSSO\  LQGLYLGXDO JHQHUDWRUV LQ  EDUDQJD\V are being used whenever electricity from the provincial electric cooperative is not available ‡$GHTXDWHSRZHUVXSSO\LVQHFHVVDU\LQRUGHUWRLQFUHDVHSURGXFWLYLW\DQGTXDOLW\RI metalcraft and woodcraft production Each goal statement should have the following characteristics: a) Clear regarding what is to be done and why – it should be based on the LECA and flow directly from the vision formulated in Step 1 b) Outcome oriented – represents specific key result areas on which the LED strategy will focus to achieve the vision. proximity to market centers outside of municipality through well paved roads ‡/LYHVWRFNLQGXVWU\LVQXPEHULQWKH/(&$LQGXVWU\FRPSHWLWLYHQHVVUDQNLQJ To be the halal organic fertilizer capital in the region ‡9DOXHFKDLQDQDO\VLVIHUWLOL]HUVVHHGVDQGSHVWLFLGHVDFFRXQWHGIRURIWKHYDOXH of local corn production. PhP400 million were draining out of the local economy because farmers were buying inputs from outside sources ‡ /RFDO RUJDQLF IHUWLOL]HU SURGXFWLRQ ZLOO UHGXFH FRVW RI LQSXWV LQ FURS SURGXFWLRQ provide income opportunities and protect the environment To develop an efficient municipal power supply system ‡:HDNQHVV . carabao and goats in the region ‡6WUHQJWKV YDVW ODQG UHVRXUFHV IRU IRUDJH DQG SDVWXUH GHYHORSPHQW DQG DEXQGDQW supply of crops and agricultural by-products for feedstuffs ‡ 2SSRUWXQLWLHV SUR[LPLW\ WR VHYHUDO UHVHDUFK DQG WUDLQLQJ FHQWHUV RQ OLYHVWRFN production.

indicators should be: x valid . or from indicators used with other projects. etc. local economic development performance indicators available in the Local Governance Performance Management System (LGPMS) of the DILG can be used as a guide in framing performance indicators.indicators should be disaggregated by sex x sensitive . For example. They serve as performance standards and targets for each goal identified in Step 3. Step 4: Develop Objectives and Performance Indicators Objectives are even more specific. Qualitative indicators are more difficult to measure.. For example: “To increase corn production by 10% by 2010. To measure progress toward the achievement of goals and objectives. a clear and structured set of key performance indicators should be developed.they should not be overly complex and burdensome to the project partners x build on what exists .it should be possible to collect and analyze the data fairly quickly x in-line with local capabilities/resources . measurable. They focus on aspects such as the quality of a result or an individual’s attitude towards a new service (Swinburn et al. percentages. Performance indicators can be both quantitative and qualitative. STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 51 . In developing objectives.conclusions based on the indicators should be the same if measured by different people x gender sensitive . realistic. Quantitative indicators will include numbers.the information/learning should be well worth the time and money it costs to collect the data x timely . percentage changes.they are valid in the eyes of the key participatory M&E stakeholders and should actually measure what they set out to measure x reliable .” Objectives should be specific. As suggested in the World Bank LED Primer.Integrating LED in Local Government Processes bases and motivation in the development and improvement of the various enterprise-related programs and services of the local government. and time bound (SMART).indicators should not ‘reinvent the wheel’ and should draw on existing local data collection activities.they should be sensitive enough to measure important changes in the situation being observed x cost-effective . it is important to clearly describe the markers or benchmarks that would help the community assess where it is now (baseline or pre-intervention) and where it will be if the initiative were successful (objectives). 2006). attainable. where possible.

barriers (including financial.e. These targets should be linked to the highlights of the LECA. living conditions c) Those who can contribute and how they can be reached or involved in the effort. individuals. experience.i. In developing programs and projects. goals and objectives. environmental hazards. social approval. particularly in the SWOT and value chain analyses. organizations and sectors. Project champions may come from local government.g. i.e. cultural norms and practices. policies. research or educational institution) (Swinburn et al. It is a good practice to undertake programs and projects where clear champions are committed to being involved in leading them. physical. social status. They could be the economic players of the priority industries or of areas that have been adjudged as economic strengths of the locality or opportunities. exploit opportunities or mitigate threats identified in the LECA..Integrating LED in Local Government Processes Step 5: Develop Programs Having completed the LECA and determined the vision. those who may be in a position to contribute to the initiative or commit to leading it. cognitive or physical abilities. Identify agents of change or LED champions. and communication). the private sector. community or other sectors (e. 2006). b) The personal and environmental factors to be addressed by the initiative x Personal factors can include: knowledge.. gender. Programs and projects should seek to build on strengths. the LED stakeholders group will need to decide on the key programs that will become the core of its LED strategy. A program is a package of interrelated projects. and/or broader systems.. 52 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . skills. education and training. age x Environmental factors can include: social support. available resources and services. identify: a) Those participants/beneficiaries that are to be targeted at each different level . beliefs. groups. minimize weaknesses.

STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 53 . x. x. 2. the LGPMS economic development indicators. 1. Recommended Approach to LED Program Development Chapter 4 of the first LGSP resource book on LED presents some of the programs that can be adopted by the LGU to facilitate LED. Matrix for Strategy Formulation LEVELS & LIST OF TARGET PARTICIPANTS/BENEFICIARIES (1) POTENTIAL CHAMPIONS (4) A.Integrating LED in Local Government Processes The results of the above scoping can be rendered as part of a matrix for strategy formulation as presented in table 11. Broader Systems 1. Table 11. 2. Groups & Organizations 1. Sectors 1. program and project selection must be limited according to the needs and resources of the LGU and must be consistent with the LED vision. 1. goals and objectives. the SME Development Framework. 2. x. Individuals 1. x. 2. x. D. A comprehensive list of program options is also discussed in detail in the World Bank LED Primer. x. clearly. x. C. x. 2. 2. B. However. and Integrating Gender Equality and Poverty Reduction in LED. 2. Although there are other several recommendations in various LED and enterprise development resources and literature. 2. 1. some already existing frameworks or theories related to economic development are highlighted in this Guide. 1. namely the Money Flow or “Leaking Barrel” theory.

For each service area governance performance indicators have been identified. come up with an integrated plan.Integrating LED in Local Government Processes which can aid the LGU in ensuring that issues affecting all components of the local economy (discussed in Chapter 1) are taken into account in the formulation of programs and projects and. Using LGPMS Indicators to Review LGU Performance in LED There are also indicators set out in the LGPMS wherein the economic development sector is divided into two “service areas”. ultimately. Business and Industry Promotion. Hence. Those LGPMS economic development indicators that have not been addressed or require further strengthening and which are directly linked to the priority industries need to be among the programs that the LGU should focus on. poverty incidence. 54 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . namely 1) Agriculture and Fisheries Development and 2) Entrepreneurship. Among the outcome indicators in LGPMS that needs to be addressed include unemployment and underemployment rates. a. A set of procedures is recommended to help LGUs come up with LED programs that are coherent and have added value. it is helpful to check LGU performance in the indicators shown in Table 12 and to verify gaps or areas that need to be improved. They exemplify standard LGU inputs and outputs that directly concern local economic development. income per capita and family income.

 9 Rehabilitation or construction of fishery related infrastructure  9 Credit facilitation services  9 Production support services  9 Research and development services  9 Market development services  9 Other alternative and innovative assistance to fisherfolks SERVICE AREA: ENTREPRENEURSHIP. enterprises and industries.Integrating LED in Local Government Processes Table 12. e. presents in detail how the LGPMS can be used in both strategy formulation and monitoring and evaluation. e.  9 Rehabilitation or construction of irrigation system for irrigated or irrigable areas..g. STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 55 .  9 Credit facilitation services  9 Production support services  9 Research and development services  9 Market development services  9 Other alternative and innovative assistance to farmers Making the Fisheries and Aquatic Resources Management Council (FARMC) functional Infrastructure support for fishery development.g. LGPMS Economic Governance Performance Indicators SERVICE AREA: AGRICULTURE AND FISHERIES DEVELOPMENT Infrastructure support for agriculture development.  9 Improving business application and processing time  9 A local government-supported administrative body that is responsible in the promotion of business and industry in the LGU  9 Provision of tax incentive  9 Assistance in product labeling especially for small and medium enterprises  9 Training of business-employed personnel or private sector employees  9 Maintenance of industrial peace  9 Support to job fairs Source: LGPMS Manual The Manual on the Local Planning Process: Formulating CDP and ELA for ARMM.g.. another LGSPA knowledge product... machines or facilities  9 Rehabilitation or construction of feeder roads or farm-to-market roads Local government agricultural extension and on-site research services or facilities. BUSINESS AND INDUSTRY PROMOTION Promoting a business-friendly environment and promoting businesses.g. e.  9 Provision of post-harvest equipment. e.

as well as the presence of adequate infrastructure and an environment conducive to business. the level of prosperity is high (Darling. money flows in and out of the local economy like water flowing in and out a barrel. LED planners should give emphasis to programs that would help grow the level of wealth in the locality and that have a direct bearing on the results of the LECA – those that would optimize local strengths and available opportunities and develop the priority industries. 1991) that the LED planners can consider in formulating programs and projects: To increase inflows: x Selling more goods and services to outside customers (export) x Accessing resources from ODA programs. It suggests the following economic strategies (Darling. Using the Money Flow or the “Leaking Barrel” Theory As shown in Chapter 1. higher government agencies and other external organizations To slow down outflows and create more wealth locally: x Providing locally those goods or services currently being purchased outside the area. government units and other producing and consuming entities participating in the local economy. This creates new businesses in the locality and will entail improving linkages between local buyers and sellers Encouraging people to invest their savings locally. the availability of resources such as investment capital.Integrating LED in Local Government Processes b. 56 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . (For example: producing organic fertilizer locally in order to reduce dependence on inorganic fertilizers from outside sources). When these are functioning at full capacity. However. Local firms will respond to changes in internal and external markets. This keeps the money circulating in the economy and adds to the productive capacity of the local economy Improving the community’s quality of life. This theory can help LGUs analyze how to increase wealth in the local economy and how to reduce income leakage. their ability to react to changes in markets will depend upon the condition of the fundamental components of the economy within the locality. This idea is x x x called import substitution. The water level in the barrel will rise and fall and represents the level of wealth or prosperity in the community. 1991). which is important not only to retain and attract residents but also outside investors Putting the inefficiently utilized local resource to work more productively The level of wealth is not only dependent on the volume of money inflows and outflows but also on the productive capacity of all firms. households. skilled workers. that is. and the know-how to produce at costs that are competitive.

Using the SME Development Framework One of the most effective ways of facilitating wealth and job creation is to develop LED programs and projects that improve the local business enabling environment and support the development of micro. The Philippines’ SME Development Plan 20042010 prescribes integrated efforts to strengthen and stimulate the SME (includes “micro-enterprises”) sector so it can contribute significantly to the country’s development.000 10 – 99 Medium Enterprise 15.000.Integrating LED in Local Government Processes c.000. small and medium sized businesses3 (Swinburn et al.000.000.000 – or less 1–9 Small Enterprises 3.001 – 15.001 – 100.000. 2006). CATEGORY VALUE OF TOTAL ASSETS IN PhP NUMBER OF EMPLOYEES Micro-enterprises 3.000 100 – 199 7KHVHHQWHUSULVHVPD\IDOOXQGHUDQ\LQGXVWU\FODVVL¿FDWLRQ HJPDQXIDFWXULQJDJULFXOWXUHVHUYLFH..

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finance. markets and policy support. In January 2003. Table 13 shows a list of possible interventions to enhance the business and investment environment. access to finance. and productivity and efficiency of SMEs that can be incorporated in the LED Strategic Plan. the SMED Council categorized the SME sector into: STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 57 . access to markets. 3Philippine SMEs are categorized based on assets (excluding land) and number of employees. technology. LED planners should look at programs that would meet the requirements of the priority industries in terms of materials.

Examples of SME Development Strategies SME OBJECTIVES AND STRATEGIES Strategies to enhance the Business and Investment Enabling Environment. the team and stakeholders would have come up with a long list of programs that must be systematically trimmed down to a set of focused.Integrating LED in Local Government Processes Table 13..g. LED Assistance Unit. from applying the leaking barrel theory. Business Development Center. e... Zoning Ordinance..g.g. e... and from utilizing the SME development framework The short-listing process can be aided by verifying the links of and matching the programs to: x The identified Goals and Objectives and Performance Indicators 58 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments .g.  9 Streamlining of business regulatory requirements (e.g.  9 Business development and extension services  9 Entrepreneurship training  9 Skills training to improve productivity or provide livelihood opportunities  9 Systems and structures to assist local industry productivity and product quality enhancement  9 Infrastructures that enhance productivity and product quality Rationalizing the Priority Programs At this point in the LED strategy formulation. e. coherent and integrated initiatives. CLUP)  9 Organizing of structures supporting local SMEs (e.  9 Local SME financing programs  9 Encouraging the setting up of rural banks  9 Partnering with national line agencies regarding financing programs like the Multi-livestock Development Loan Program  9 Systems and structures to assist SMEs in accessing financing programs like the One Town One Product of the DTI Strategies to enhance Access to Market. e. one-stop licensing and business registration office)  9 Promotion of ordinances/ policies supporting local SMEs (e. The long list of program would have come from reviewing LGU performance in the LGPMS economic development service area.g.g.  9 SME market information support  9 Facilitating partnership/ linkages with suppliers and buyers  9 Systems and structures to assist SMEs link with programs that enhance access to market  9 Infrastructures that enhance access to market Strategies to enhance Access to Production. Technology and Livelihood Development Center) Strategies to enhance Access to Finance..

D. x. Groups & Organizations 1. STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 59 . 2. 1.Integrating LED in Local Government Processes x Strengths and Opportunities of the LECA particularly the priority industries so that they could be optimized x Weaknesses and Threats to the local economy and its competitiveness. x. 2. enterprises and industries). x. 2. and those that are “strategic” and can not (yet) be taken on by the private sector. Sectors 1. x. programs that are “public” in nature and can not be taken on by other levels of government. C. 2. particularly to the priority industries in order to mitigate/manage them x The target participants/beneficiaries and the relevant personal and environmental factors that need to be addressed The planners can also begin to brainstorm on which government agency to involve as well as the potential champions from the private sector. B. 2. 2. x. and promoting a business-friendly environment and promoting businesses. 2. In relation to role definition. academe or civil society organizations that could be mobilized (refer to Table 14) mindful that further particularization and finalization would occur as the programs are translated into projects. Table 14. Individuals 1. x. local government agricultural extension and on-site research services or facilities making the FARMC functional. Brainstorm Matrix on LED Program Development LEVELS & LIST OF TARGET PARTICIPANTS/BENEFICIARIES (1) PRIORITY STRATEGIES (2) RESPONSIBLE GOV’T OFFICE (3) POTENTIAL CHAMPIONS (4) A. x. 1. 2. Broader Systems 1. the programs that are considered as part of LGU mandates are those that are linked to LGPMS (infrastructure support for agricultural development. 1. 1. x.

The potential impact to a target sector. LGUs are often interested in comparing the benefits of a project proposal in terms of generating new jobs. 2006). Lanao del Sur. such as women.. business plan preparation and tailored monitoring and evaluation program (Swinburn et al. design review. feasibility studies. creating new enterprises. Table 15 shows the LED Vision to Projects Matrix formulated by the LED stakeholders group of the municipality of Wao. may also be a factor.. 60 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . objectives and priorities that were agreed by the LED stakeholders group. Complex projects with larger resource and longer timeframe requirements will need to go through a more rigorous selection process and should include an initial viability assessment. and value-for-money (Swinburn et al. improving income. Including ‘early-win’ projects that will achieve visible and tangible impact in the short-term will be fundamental to the overall LED strategy development process in ensuring the continued support of the different stakeholders. increasing revenue.Integrating LED in Local Government Processes Step 6: Select Projects Within each program area. Each proposed project should also be assessed as to whether it meets the broader LED goals. the next step is to propose and select projects on the basis of clear criteria. 2006).

In certain conditions.1 To Increase corn production by 10% per year Wao Corn Industry Development Program ‡ 2UJDQLF)HUWLOL]HU3URGXFWLRQ  Project ‡ 6HHGV3URGXFWLRQ3URMHFW ‡ . businesses or institutions.1 To establish one organic fertilizer processing plant by year 2010 Wao Commercial Organic Fertilizer Industry Program ‡ &RPSRVWLQJ3URMHFWXQGHU  the Solid Waste Management Program ‡ 2UJDQLF)HUWLOL]HU5DZ  Materials Production Training Project ‡ 2UJDQLF)HUWLOL]HU3ODQW3URMHFW   Source: Wao LED Strategic Plan Again.  Technicians ‡ *RDW'DLU\0RGXOH3URMHFW 2.1 To increase number of livestock and poultry producers by 10% each year Wao Livestock and Poultry Industry Development Program ‡ /LYHVWRFNDQGSRXOWU\LQGXVWU\ enterprise profiling project ‡ 6WXG\7RXU ‡ 7UDLQLQJRI9LOODJHEDVHG$. To develop organic fancy rice production in order to conserve Wao’s land resources 3. the LGU STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 61 . Lanao del Sur VISION Food Security and Environmental Sustainability GOALS OBJECTIVES PROGRAMS PROJECTS 1.1 To increase organic rice production by 10% in 2010 Organic Rice Production Development Program ‡ 2UJDQLF)DQF\5LFH3URGXFWLRQ project 4. To develop the Wao livestock and poultry production in order to provide additional income source to farmers 1. To increase Wao corn productivity in order to increase income of corn farmers 2. To develop highvalue commercial crops production in order to provide additional income and promote diversified farming in the municipality 5. linkages.1 To develop 2.Integrating LED in Local Government Processes Table 15. This way the potential roles and contributions of the LGU and of relevant individual stakeholders.QWHJUDWHG3HVW0DQDJHPHQW  Farmers Field School Project 3.1To increase rubber production area by 20% in 2010 Rubber Industry Development Program ‡ 5XEEHU1XUVHU\3URMHFW 5. training and other types of assistance without necessarily infusing any equity capital to a business. To develop Wao’s rubber industry in order to increase forest cover and income of farmers 4.000 hectares planted to HVCC by 2010 Wao HVCC Production Program ‡ +9&&%DJVDNDQ&HQWHU Project ‡ +9&&6HHGOLQJV1XUVHU\ Development Project 6. Some projects may require private sector investments with the local government providing enterprise organizing. LED Vision to Projects Matrix of the Municipality of Wao. To develop organic fertilizer production in order to provide farm inputs that conserve Wao’s land resources and provide income opportunities for the women sector. in project implementation can be ascertained early on. 6. it is important that the LED stakeholders are involved in project selection.

Integrating LED in Local Government Processes may also opt to set up a public economic enterprise in order to provide the intended product or service itself. Still other projects may be developed as public-private sector joint ventures. This approach is practical especially if the LGU LED team and the stakeholders consider the LGUs limited resources and also to maximize the roles of the stakeholders in the LED Strategic Plan.I. which will be discussed in the next chapter. city/municipal or barangay) or for identifying projects which can be better done by the private sector. Sifting Projects for Ownership PROJECT NATIONAL Province ‡ 2UJDQLF)HUWLOL]HU Production Project x x x  x ‡ 6HHGV3URGXFWLRQ3URMHFW x ‡ . Technicians LOCAL GOVERNMENT Municipal Barangay x x x x x .QWHJUDWHG3HVW0DQDJHPHQW Farmers Field School Project ‡ +9&&%DJVDNDQ&HQWHU Project x x x ‡ &RPSRVWLQJ3URMHFWXQGHU the Solid Waste Management Program x STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments x x x ‡ +9&&6HHGOLQJV1XUVHU\ Development Project ‡ 2UJDQLF)HUWLOL]HU3ODQW Project 62 PRIVATE x ‡ /LYHVWRFNDQGSRXOWU\ industry/ enterprise profiling project ‡ 7UDLQLQJRI9LOODJHEDVHG A. The LGSPA’s Manual on the Local Planning Process: Formulating CDP and ELA for ARMM provides a tool (Table 16) for sifting projects to define possible ownership and for guiding the LGU LED team in integrating projects to higher level plans. or for categorizing projects according to administrative responsibility (provincial. Table 16. The roles of the LGU and stakeholders should be set out in the individual project action plan.

However.5 months old are owned by women. Hence. only 44% are owned by women (Madarang et al. Box 2. gender discrimination and health-related concerns. only a small percentage of them are able to continue their business because of conflicts with family time or child-rearing. n. The LGU may use the GAD budget to allocate additional resources for such programs and services. Although the initiative to set up an enterprise usually comes from women. of the businesses that are more than 42 months old. Gender Equality Checklist for LED Strategy Formulation 9 Do the LED policies. 2007).. etc. 2009.QIRUPDWLRQ 9 Will women workers be protected from gender-based violence and other labor law violations? 9 Will the informal sector producers and workers be able to avail of support mechanisms (such as social protection. child-minding centers. Box 2 shows a checklist that the LGU can use to assess whether gender equality is integrated in the LED Strategy.Integrating LED in Local Government Processes Step 7: Mainstreaming Gender Responsiveness and Sensitivity to Poverty in LED Strategy Formulation In the Philippines. about 69% of businesses that are 3.) that empower women? 9 Do skills trainings and product-related services delivered to women avoid gender stereotyping? 9 Are issues and concerns that impact on women’s ability to access productive resources or to become economically empowered addressed?   ‡5HODWLRQVEHWZHHQZRPHQDQGWKHLUSDUWQHUV   ‡3HUVRQDOHPSRZHUPHQWLHEXLOGLQJVHOIHVWHHP   ‡(TXLW\FRQFHUQVLHH[FOXVLRQGXHWRUHOLJLRQHWKQLFLW\   ‡5HSURGXFWLYHFRQFHUQV   ‡:RPHQ·VRYHUDOOODFNRISROLWLFDOHPSRZHUPHQWZKLFKDIIHFWWKHLUGHFLVLRQPDNLQJ 9 Do the strategies pay special attention to the needs of rural women and indigenous women? Source: LGSPA. STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 63 . issues with the husband.).d. the LED Strategic Plan should include programs and projects that create an enabling environment for women entrepreneurs and that provide business development services in support of women (LGSPA. programs and services support women’s equal access to productive resources for enter prise development?   ‡0DUNHWVORFDODQGJOREDOPDUNHWV   ‡5DZPDWHULDOV   ‡7HFKQRORJ\   ‡&DSLWDO   ‡7UDLQLQJVNLOOVWUDLQLQJPDQDJHPHQWWUDLQLQJ   ‡%XVLQHVVVHUYLFHV   ‡.

low? x Will the benefits of the program or project be felt immediately. and peace and order? x Will the impact on each of the basic needs or poverty dimensions be direct or indirect? x What is the anticipated degree of impact of the program or project on each basic need: high. the planning team should also be able to make the links between 64 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . The following are some guide questions on assessing a program or project’s sensitivity to the needs of the poor: x Will the program or project benefit a large number of poor families? x Will the program or project empower these families to meet the minimum basic needs of income. employment. water and sanitation. shelter. the State of Local Governance Reports (SLGR). in the medium-term or the long term? Priority should be given to programs and projects with more direct. Annual Reports and the LCEs State of the Municipality/City/ Province Address (SOMA/SOCA/SOPA) In integrating the LED Strategic Plan. a higher degree and wider-reaching impact on the ability of the community to meet its basic needs. medium. the LED strategy should be able contribute to poverty alleviation targets and positively impact the most vulnerable sectors of the population. Step 8: Document the LED Strategic Plan and Integrate in LGU Plans and Processes At this point.Integrating LED in Local Government Processes Also. nutrition. the LGU LED team has five important tasks: a) Put together the LED Strategic Plan according to an outline agreed upon by stakeholders(see Box 3 for an example of the LED Strategic Plan Outline) b) Plan for strategy presentation to and approval by the Local Development Council and Legislative Council c) Integrate the LED Strategic Plan in the CDP and ELA d) Prioritize the programs and projects identified in the LED plan in the LGUs 3-year Local Development Investment Program (LDIP) and the Annual Investment Plan. basic education. and e) Incorporate the LED plan and accomplishments in the LGU annual processes including the preparation of the department or unit-level operations plans and budgets. health.

Local Industry Competitiveness Ranking Matrix STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 65 . The LED Stakeholders Group II. Competitiveness Assessment 1. Hard Infrastructure 5. Regional. Box 3. Economic 3. Demographic Data and Information Tables B. LED Strategic Plan A. and National Factors B. Local Economy and Competitive Assessment A. Business Environment 4. Strengths. Local Resource Inventory and Assessment 2. Goals. Vision. Weaknesses. LED Strategies (Programs and Projects) IV. Example of a LED Strategic Plan Outline LOCAL ECONOMIC DEVELOPMENT STRATEGIC PLAN OUTLINE Executive Summary I. Rationale/ LGU Background B. Annexes A. Demographic 2. and Threats of the Local Economy 3. The LGU LED Team C. Local Economy Profile 1. Opportunities.Integrating LED in Local Government Processes the clearly entrepreneurial or economic strategies in the LED Strategic Plan and the other strategies contained in the CDP and ELA that would impact on the local economy in the overall. Introduction A. Profile and Value Chain Analysis of Industries that the Locality Has Competitive Advantage III. Objectives and Performance Indicators B. Some examples are social service and environmental management strategies that would shape the human capital and ecological and natural resources in the locality in the medium to long-term. Provincial.

2006). human resource. institutional and procedural implications. as follows: a) b) c) d) Who takes responsibility for each program or project? What are the targets in terms of outputs and timing? What steps need to be taken to achieve the targets? What will the reporting structures and communication strategy consist of and how will they be put into effect? e) What are the performance monitoring and evaluation systems and processes? f) What are the budgetary and human resource requirements for the sustained delivery of the project or program? 66 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . Stage 4 can be broken down into five steps: Stage 4: IMPLEMENTING THE LED STRATEGY Step 1: Prepare an Overall LED Implementation Strategy Step 2: Prepare Individual Project Action Plans Step 3: Build Institutional Frameworks for LED Implementation. Swinburn et al. It is thus the point of integration of all LED programs and projects (Swinburn et al. This is also to take advantage of the momentum created in the preceding stages.. implementation should be carried out immediately after the LED Strategic Plan is completed.Integrating LED in Local Government Processes Stage 4: Implementing the LED Strategy For the LED process to gain credibility and for the LGU and other LED stakeholders to demonstrate their commitment to this endeavor. The overall implementation strategy lays out the budgetary. which in turn is driven by individual project action plans. (2006) enumerates the key issues in implementing the LED Strategic Plan. Monitoring and Sustainability Step 4: Build Linkages with other Tiers of Government Step 5: Carry Out Tasks in Project Action Plans Step 1: Prepare an Overall LED Implementation Strategy The execution of the LED Plan is driven by a broad implementation strategy.

4. including internal implications of the procedures and processes of the LGU? h) What new departmental and staff coordination will be necessary to fulfill the project? i) What are the new skills required for the implementation of programs and projects? (This is similar to the LGU’s Capacity Development Plan for ELA Implementation) Step 2: Prepare Individual Project Action Plans After program and project selection has been completed. organizations and sectors. the source of funding. is a very important body in the LGU as it is in charge of setting up of the level of annual expenditures and ceilings including that of the LED priority projects. 2. Activity Timeframe per Activity Outputs per Activity Cost per Activity The individual action plans can then be discussed by the LGU LED team and select members of the stakeholders group with the Local Finance Committee (LFC) for prioritization in the LGUs Annual Investment Plan and for linking the actions plans to LGU budget. groups. Table 17. and the timeframe. 3. the possible stakeholders and their respective roles or contributions. the project manager. 2. 3. 4. Stakeholders: Contributions to the Project: 1. The LFC. 3. the expected results.Integrating LED in Local Government Processes g) What are the institutional implications of the LED programs and projects. the target sector. Project Manager: Source(s) of Funding: 1. and/ 1. together with the Local Development Council (LDC). Example of a Project Action Planning Template Project Title: LED Program Title: Short Description of the Project (Project components and major activities): Expected Results (Objectives): Target individuals. 4. it would be STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 67 . outputs and costs of each activity. it is necessary to detail the actions that need to be undertaken to implement each project. or broader systems: 2. Table 17 shows an example of a project action plan template that can be used to organize project components and activities. In making the case for LED programs and projects and seeking local government funding.

The same can also be done when accessing external fund sources. The BDC has a dedicated manager and staff to take the lead in the execution of the LED strategy and provide business development and assistance services. may be formalized through a Legislative Council resolution or a separate LED Assistance Unit may be created through a local ordinance. which started off as ad hoc structures in Stage 1. indicate how this structure will be established.e. Identify the three main reasons why this is the most favorable solution for the LGU. The cooperatives manage common service facilities (kiln dryer and metal foundry) for its metal-craft 68 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . The LGU LED team and LED stakeholders group. For example. the LGU needs to study the organizational needs for implementing the LED Strategic Plan. committees or technical working groups consisting of members from the LGU LED team and the LED stakeholders group.Integrating LED in Local Government Processes helpful for the LGU LED team to present to the Local Finance Council. identify which committees. Monitoring and Sustainability As the LED process moves from planning to implementation. In Upi.. task forces or teams should participate in project implementation. Based on the LED strategy. In Tugaya. The BDC reports to the LGU LED team. and the resources available for implementation. The following considerations can guide the LGU on its decision-making in this regard: a) Propose an organizational ‘home’ and structure for LED implementation. the LGU passed a municipal ordinance creating a Business Development Center (i. the LDC and the Legislative Council a cost-benefit analysis. the LGU should analyze requirements for an effective LED implementation. the LGU LED team headed by the Mayor may still continue to coordinate strategy implementation but with project management duties delegated to the respective project implementation teams. programs and projects. c) For the chosen home and structure. which in turn reports to the LED stakeholders group in regular monthly or quarterly meetings. Step 3: Build Institutional Frameworks for LED Implementation. showing how the economic benefits outweigh the investment and operating costs. b) Based on the LED project action plans. This is to ensure that the structure will remain even beyond the term of the current LCE. Indicate the potential obstacles or problems that are likely to need resolving in establishing and funding this organizational structure. primary cooperatives were organized to support the LGU implement the LED strategy. as a separate unit dedicated to facilitate LED programs and projects). how it will be funded and what the reporting structure will be.

In Upi. What should their respective role be in the management and coordination of the project? Depending on the nature of the project. They can engage the business sector and secure support from higher-level government agencies. and make the case for LED resource allocation (Swinburn et al. that is partly owned by the LGU and some private investors. operate and manage a Halal organic fertilizer production enterprise as part of Upi’s LED Strategy implementation. The LED team. in coordination with the legislative council. a SEC-registered company. technical assistance or even invest in an industry or enterprise being proposed in the LED plan. provincial or barangay governments). regional and national levels is necessary STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 69 . the active participation of the business sector in the LED stakeholders group led to the establishment of the Upi Agricultural Ventures Corporation. also need to ensure that technical and legislative coordination and complementation are establish for programs and projects that requires support at all levels (e.g. Building linkages with other tiers of government at the provincial. Estimate the likely budget for undertaking this. 2006). f) Organize the necessary policy. The LGU LED team and technical staff. together with the LCE and other elected officials.Integrating LED in Local Government Processes and woodcraft industries as separate business enterprises. three plantilla positions were created including that of the Business Manager. In Wao. identified as one of the projects in the LGU’s LED plan... e) Determine which partner organizations or institutions are crucial to achieving successful project implementation. legislative and administrative support mechanisms needed to implement the LED Strategic Plan. regional. The corporation will own. the private sector may be called on to provide logistical support. d) Establish a group profile of the types of individuals that will comprise the key staff. should ensure that required legislations are included in the Legislative Agenda of the Council. In the case of Upi’s Business Development Center. and identify the types of skills that these staff will need. the setting up of a rubber nursery. was also taken on by private investors. Step 4: Build Linkages with Other Tiers of Government The LED process also entails not only working with other local organizations but also with other tiers of government as discussed in Stage 1 and shown in Figure 4. Four additional personnel from other LGU departments were detailed to the office. The political leaders can use their influence to initiate and build multi-level partnerships and networks to support the LED process.

and progress reporting 70 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . It is not necessary that the project manager has a high level of expertise. has forged a MOA with the Mindanao State University-Iligan Institute of Technology (MSU-IIT) whereby the latter will provide technical assistance on the setting up and operations of a wood kiln dryer and metal foundry for a period of five years e) Regular project monitoring and evaluation is conducted through meetings. he or she has to have a reasonable understanding of the technical needs of the project. site inspections. Provincial Offices of DTI. Political sensitivity. DA. make sure that: a) A Project Manager is designated for each project. Industry Association. Links with Other Tiers of Government National Level National Government Agencies and Attached Agencies such as DTI. and accessing external technical and financial resources.Integrating LED in Local Government Processes in planning for specific economic projects. leadership and ability to handle stress are other skills normally required of the project manager b) Members of the TWGs. The LGU of Tugaya. DA L O C A L L E V E L Step 5: Carry Out Tasks in Project Action Plans In carrying out the Project Action Plans. DA. QUEDANCOR Regional Level Regional Office of Agencies such as DTI. Chamber of Commerce. Lanao del Sur. Project Implementation Teams or committees have a clear grasp of their respective roles and responsibilities in the project implementation c) A Business Plan is prepared for each enterprise development project d) A memorandum of agreement (MOA) is forged with any institution the LGU wants to partner with during project implementation. for example. regional and national programs are available for industry sectors that the LGU deems as their most competitive? If livestock development is a priority. what provincial. For example. formulating implementation strategies. DOST Provincial Level SMEDC. However. what agencies have mandates related to livestock development? Figure 4.

infrastructure. All these systems will give decision-makers the tools they need to adjust the strategy in response to dynamic local conditions (Swinburn. 2006). Evaluation is the periodic assessment of a LED project’s relevance. efficiency. outcomes (and where possible impact).. and services by project beneficiaries (Swinburn et al.Integrating LED in Local Government Processes Stage 5: Reviewing the LED Strategy Although the LED strategy is usually written for a five to 10-year period. it should be quickly reviewed each year in case it needs to be adjusted in response to dynamic local economic conditions. and impact (both planned and unplanned) in relation to stated objectives. The implementation of the LED strategy should go through a more rigorous annual assessment. 2006). systems should be in place to monitor the progress of every project. ‘Process evaluations’ focus on the implementation of programs or projects. This review should make use of established monitoring and evaluation indicators of the local economy and resources available for the strategy effort. Process evaluation is concerned with how a program can be improved while outcome evaluation is concerned with whether the program actually works. Alongside the review of the entire strategy. STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 71 . This stage can be broken down into two steps: Stage 5: REVIEWING THE LED STRATEGY Step 1: Implement an M & E Strategy Step 2: Revise the LED Strategy according to M & E Results Step 1: Implement an M & E Strategy Monitoring is the continuous assessment of the LED strategy and/or project implementation in relation to agreed schedules. It is not something set in stone.. performance. and of the use of inputs. Evaluations can be divided into two categories. The review needs to cover not just inputs. but the implementation processes. including levels of participation. while ‘outcome evaluations’ focus on program results. 2006). Process evaluations overlap with monitoring activities and both are concerned with project or program implementation (Swinburn et al. 2006). outputs. but a dynamic instrument that should be changed as local conditions change (Swinburn.

objectives and outputs developed in Stage 3 b) Data source to assess performance vis-à-vis target c) Collection methods to gather data on each indicator d) Frequency at which measurements will be made e) Responsibility centers for monitoring progress towards each result It can also include the frequency of reporting the M&E results and to whom. competitive assessments programs and others. Information on significant LED outputs or outcomes may also be disseminated to the general public through the LCE’s State of the Municipality/ City/Province Address (SOMA/SOCA/SOPA). the following are the key elements of an M & E strategy: a) Performance indicators and targets to measure progress towards the achievement of goals. Performance indicators as laid out Stage 3 particularly in the step on “Objectives and Performance Indicators” will be a major component of the LED Implementation M&E system. impact assessments can be assigned to the Local Planning and Development Office together with the appropriate sectoral committee of the LDC. the System on Competency Assessment for Local Governments (SCALOG). The M&E system should also include existing performance self-assessment systems that would help enhance the LGUs capacity to implement the LED strategy. to the State of Local Governance Report. The LDCs Project Monitoring Committee (PMC) can also be tapped for monitoring of LED projects funded by the LGU development funds. consequently.Integrating LED in Local Government Processes Monitoring and evaluation (M&E) is a very important management tool in the LED implementation. ODA and national funds. 72 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . For instance. The LED M&E system should also build on and utilize existing monitoring and evaluation mechanisms in the LGU. As described in the LGSPA Manual on the Local Planning Process. LED impact assessments should also be done and should coincide with the other outcome assessments in the LGU like the LGPMS development assessments which is done every three years. These can also be fed into the annual LGPMS database and. For example. Input and output tracking are also important regular activity of the LED M&E system along with process assessments. This includes the LGPMS. M&E results can be reported back to the LED stakeholders group during monthly or quarterly meetings as well as to the Local Development Council.

what can be done? Are performance indicators being met? If not. The World Bank LED Primer recommends that the following issues should be taken into account when revising the LED strategy: x x x x x x x x x Is the SWOT analysis still valid or have circumstances changed? Is more information available and have key issues changed as a result? Should changes be made to the vision.Integrating LED in Local Government Processes Step 2: Revise the LED Strategy according to M&E Results The LED Strategic Plan can then be reviewed and enhanced periodically based on the results of the M&E to ensure that it continues to be relevant and responsive to current conditions. goals or objectives to reflect changing circumstances? Are projects achieving the expected results? If not. why not? What changes need to be made? Should the indicators be changed? Should there be more action on projects? Should the projects be changed? STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 73 .

74 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments .

Chapter LED in Practice is a compendium of LED experiences. Useful insights can be drawn from the different approaches and strategies resorted to by these LGUs in stimulating economic growth in their respective areas of responsibility. innovations and good practices of selected LGUs in the Philippines including those of Wao and Tugaya in Lanao del Sur. STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 75 3 . which are municipalities covered by the LGSPA. and Upi in Maguindanao. LED initiatives of the provincial government of Bohol the city government of Tuguegarao in Cagayan. the city government of Naga in Camarines Sur and the municipal government of Baybay in Leyte are also featured.

The last four stories feature local governments in other regions that also pursued economic development initiatives through a strategic planning and participatory development process with assistance from other development or foreign-funded programs. as showcased by its metal and wood craft industry”. identified the following as the town’s most competitive industries: handloom weaving. Baor Producers Cooperative. As contained in the plan. with a population of 20. the LGU LED Team. brass wares. Tugaya is largely unknown in the country as the source of Maranao brasswares. Tugaya has earned an NCCA (National Commission for Culture and the Arts) nomination to the United Nations Educational. The whole town is virtually a workshop and a “museum” of Maranao arts and crafts – all intricately and painstakingly done using traditional tools and methods and indigenous decorative designs. Despite this recognition. It also turned out that Tugaya was the first LGU to visit the NCCA. hand-carved wooden chests (baor) and furniture which are being sold in native crafts and furniture stores. the LGU envisions a “prosperous and productive Tugaya that is the center of Maranao Arts and Culture in the Philippines. In fact. Tugaya. Loom Weaving Association and the Pandiaranao Womens’ Association). iron works. Lanao Del Sur: Culture as an Engine of Local Economic Development Tugaya is a small municipality along the western shore of Lake Lanao in the Province of Lanao del Sur. The first three cases follow the experiences of three LGUs in the ARMM in the formulation of their LED strategies. Scientific and Cultural Organization (UNESCO) World Heritage List. these success stories will motivate and inspire more LGUs and LED practitioners to advocate LED both as a process and as a goal of good local governance. Hopefully. their achievements to date (just one year into the implementation of their LED plans) and the major factors that facilitated the LED process. due to its cultural value that is fostered by the distinctive artistry and skills of its people. through the LGSPA’s LGU capacity-building project on facilitating LED. Tugaya completed its LED Strategic Plan.000 hectares. The industry that fuels its economy is its age-old arts and crafts that have been preserved and handed down through generations. Formulating and Implementing the LED Strategy In 2006.000 and a land area of a little over 4. handlooms. wood carving. The commission was so impressed by Tugaya’s initiative that it offered to provide technical and financial assistance for a “cultural mapping” to support its nomination as a World Heritage 76 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . This opened more opportunities in terms of networking and market and production expansion. In its Local Economic and Competitiveness Assessment (LECA). In 2007. and goldsmithing. together with the private sector and other LED stakeholders (including representatives from the Tugaya Brassware Producers Association.LED in Practice This chapter presents some notable practices and positive results that were engendered in the application of the LED process by selected LGUs. LGSPA organized a study tour for the Tugaya LED team and private sector representatives to LGUs in Luzon known for their metal and wood crafts.

and a blacksmithing facility in order to improve productivity and product quality. Towards the end of the LED project. the LGU was focused mainly on expanding the market of its handicrafts. particularly in the retail market. b) enhancing productivity and product quality through new but appropriate technologies that keep cultural integrity intact. and. sites that use traditional equipment and methods will still be preserved. setting up. Of late. conserve and protect all places. restaurants and interior decorators. academic institutions and metal and woodcraft organizations was also formed by the LGU to conduct the cultural mapping. e) creating a business and investment enabling environment including the provision of infrastructure and power and water utilities required by the industry. the research and documentation of the Maranao tradition and culture in the municipality. d) building LGU brand recognition and breaking into new and institutional markets such as hotels. A multi-disciplinary committee composed of representatives from POs. However.e. Two more benchmarking tours were conducted to observe the design and operations of such facilities in Mindanao. The handicrafts cooperative.LED in Practice Site. The LGU LED team then enhanced the wood and metal crafts industry development plan incorporating the learnings and knowledge gained from the study tour. will set up a microfinance facility and a consumer store. i. and operations and maintenance of the said facilities.Iligan Institute of Technology (MSU-IIT) also reached a Memorandum of Agreement whereby MSU-IIT shall provide technical assistance in the design. structures. STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 77 . as mandated by the municipal ordinance. particularly its metal and woodcraft industry. including: a) ensuring a sustainable supply of raw materials through environmentally sound utilization of resources and production methods. Prior to the LGSPA LED project. In 2008. The LGU and the Mindanao State University . LGSPA assisted the LGU organize the artisans and craftsmen into three cooperatives. c) accessing or facilitating access to financial resources such as the OTOP. The wood and metal craft cooperatives will operate their respective common service facilities as a business. It also passed a municipal resolution declaring metal and wood craft as its priority product under the “One Town One Product” (OTOP) program of the Department of Trade and Industry. composed mainly of women weavers. relics and the like that are part of the heritage of Tugaya. the LGU realized that the development of the industry required an integrated approach addressing all aspects of an enterprise.. a melting furnace. the LED stakeholders group developed a business plan for its metal and woodcrafts industry and is in the process of establishing a multi-purpose wood kiln dryer. After undergoing the LECA and LED strategy formulation. the LGU passed a municipal ordinance to preserve. and undertake bulk buying of raw materials.

With the continued collaboration in the implementation of the LED strategy. the LED process has brought together community members from different clans and of different political colors (as evidenced by the profile of the LGU LED team. private sector. organic rice production. (See Table 12 in Chapter 2 for a summary of the Wao LED strategy). fostering a sense of belonging.LED in Practice Factors that Facilitated the LED Process The LED process by no means had a smooth start in Tugaya and only began to resonate to participants when arts and culture. Formulating and Implementing the LED Strategy In 2007. With this recognition. stakeholders group and PO members). Moreover. goat and dairy production. Lanao del Sur: Pursuing Food Security and Environmental Sustainability through the LED Process The municipality of Wao is one of the 37 municipalities of the province of Lanao del Sur and geographically the farthest from the seat of the provincial government in Marawi City. The arts have been instrumental in facilitating social cohesion. was identified as the town’s main economic driver. Livestock industry development was first on the LGU’s LED implementation agenda. and rubber tree farming. academe and other government agencies. rice and corn seeds production. the LGU hopes to position the municipality as a cultural tourism destination and attract more support and investments for the preservation and promotion of its arts and crafts. with technical assistance from the LGSPA. the nomination to the World Heritage List produced a renewed sense of purpose to the LGU. in which all of them had a common stake. the arts and crafts have truly built community identity and pride in Tugaya. The participants also began to appreciate the process more when inputs and discussions were translated or done in the Maranao language. 2005).Iligan City route. The LGU LED team of Wao along with teams from two other LGUs in the ARMM went on a study tour organized by the 78 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . Tugaya will be an excellent testament that culture-based industries can also provide a strong impetus to achieving local economic development and peace. due to a shared interest and passion for their art. and preserving collective memory (Creative City Network of Canada. the Wao LED stakeholders completed the LGU LED strategy that articulates their vision of food security and environmental sustainability and their industry priorities: upgrading and increasing the local herd of cattle and carabao. It has already received an award for “Culture-friendly Local Government” from the Office of the President. Despite a long history of clan feuding and political rivalries. Wao. organic fertilizer production. bringing tourism to unlikely places. In fact. which is 325 kilometers away via the Bukidnon .Cagayan de Oro City .

The LGU’s goat dairy production is envisioned to supply fresh milk to the LGU’s feeding program.LED in Practice LGSPA to LGU-managed livestock production centers and relevant government institutions in Mindanao. and. job creation. Wao sent seven technicians to the PCC-CMU for a month-long training on Artificial Insemination (AI) for large ruminants. staffing and management group of the goat farm has already been drawn-up. a supplemental budget for the operations of the goat production public economic enterprise has already been approved by the Sangguniang Bayan. as well as create an alternative source of income to livestock farmers.Region X in Cagayan de Oro City. The LGSPA organized a study tour for the team to visit organic fertilizer producers in Mindanao and gain more knowledge about production and marketing. The partnership between LGU and PCC-CMU for the implementation of the Wao Livestock Industry Development Program was formalized through a Memorandum of Agreement. goat production enterprise and rubber production. a rubber nursery has been established and is being managed by the private sector. As for rubber production. To illustrate. Technical Working Groups composed of members of the LGU LED team and the LED stakeholders group are now finalizing business plans for the organic fertilizer production enterprise. the LGU is conducting IEC activities and working with the newly trained village-level technicians to promote the use of AI in large ruminants. Goat housing facilities have already been set-up. and gender equality (since women are actively involved in vermicomposting). Wao was able to enhance its LED strategy. The organic fertilizer enterprise will make use of compost from the LGU’s materials recovery facility that has equipment to convert the biodegradable component of collected municipal wastes into compost. As a result. Factors that Facilitated the LED Process The integration of crosscutting themes. The LGU is studying two options as to the enterprise organization: a public economic enterprise or a corporation wherein the LGU will own 40% to 60% of the stock while the rest will be private investments. and secure technical support from the Philippine Carabao Center (PCC) at the Central Mindanao University (CMU) in Bukidnon and from the livestock division of the Department of Agriculture . the proposed organic fertilizer production ties with the LGU’s concerns for solid waste management. The enterprise will also be working closely with the people’s organizations and households in several barangays that have already been taught vermicomposting by the Helen Keller Foundation. In addition. It will buy vermicast from these households as feedstock to the organic fertilizer production. is evident in Wao LGU’s priority programs and advances the principles of sustainable development. an order for 25 upgraded does and one Anglo-Nubian buck has already been booked with the CMU. Goat raising and milk processing also provide STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 79 . The PCC-CMU has also provided the LGU with AI equipment while the LGU has set aside budget for liquid nitrogen and AI supplies. gender equality and environmental sustainability. refine its livestock industry action plan. Meanwhile. an initiative to address the high rate of malnutrition in the locality. particularly poverty reduction. land conservation.

A community of “tri-people”.00. Rubber tree production. is spearheading the organic fertilizer project ‡ 7KH9LFH0D\RUDQGWKH&KDLUSHUVRQRI6%&RPPLWWHHRQ$JULFXOWXUHDUHDFWLYH/('FKDPSLRQV Thus. a 3rd class municipality. Culturally. is one of the more progressive municipalities in the province of Maguindanao in ARMM. Employment and business shares a small percentage. 000. It has a total land area of 74. the area has 25. The momentum of the LED process was only disrupted once and this was around the time of the local elections when a change in administration resulted in the shuffling of technical personnel from one department to another. is not only a source of income but can be used for reforestation purposes. Upi promotes its tri-people approach to traditions through celebrations like the Meguyaya Festival. the Wao LGU has been able to keep the LED strategy implementation moving due to several factors: ‡ 6\VWHPVIRUSDUWLFLSDWRU\JRYHUQDQFHDUHLQSODFHIURPWKHEDUDQJD\WRWKHPXQLFLSDOOHYHO ‡ 3UR[LPLW\ WR DQG FRQWLQXHG SDUWQHUVKLSEXLOGLQJ ZLWK UHVRXUFH LQVWLWXWLRQV UHOHYDQW WR LGHQWLILHG priority industries such as the PCC. Maguindanao: Developing the Entrepreneurial LGU through the LED Process Upi. on the other hand.724 hectares) production. on the other hand. and DA Region X ‡ 6XVWDLQHG FROODERUDWLRQ ZLWK SULYDWH VHFWRU EDQNV DFDGHPH 32V &62V IURP WKH SODQQLQJ WR implementation stage ‡ $GHGLFDWHG/*8/('7HDPDQGFUHDWLRQRIWHFKQLFDOZRUNLQJJURXSVIRUWKHFURSVOLYHVWRFNDQG organic fertilizer projects. Based on its municipal agricultural profile. Native handicrafts such as bags. decors made of rattan and bamboo craft are available and can be customized upon request.LED in Practice business opportunities for women. CMU.295 hectares with 24. The Municipal Agriculture Office personnel in charge of crops and livestock head the TWGs for the first two concerns.650. baskets.268 hectares) and upland rice (6. local funds for the LED projects are easily accessed Upi. But despite the many local industry development action plans simultaneously getting off the ground. Upi is predominantly populated by Tedurays (44%). the native inhabitant of the place. Economically. followed by the Maguindanaons (27%) and the Ilonggos and other settlers (17%). the municipality is known for its corn (18. It has a population is at 51. 350 hectares devoted to Forest area.000 farmers with an average annual income of P50. The Municipal Environment and Natural Resources Office. 80 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments .

The business sector has invested PhP200. Of the PhP500 million annual value of corn production in Upi. The LGU then saw an opportunity for import substitution. business investment and environment. high-value commercial crops. The Upi LGU in partnership with the business sector has created the Upi Agricultural Ventures Corporation. a unit under the Mayor’s Office. seeds. The LED stakeholders group identified cereals. ecotourism and livestock as the municipality’s most competitive industries. the BDC is working on establishing a one-stop office for business registration in partnership with the DTI Maguindanao Provincial Office and organizing farmer-entrepreneurs. LGSPA assisted Upi in the formulation of the BDC operations manual and strengthened its capacity in mainstreaming gender equality in the BDC services and the LED programs and projects. and reduction in crop production cost in setting up a Halal organic fertilizer enterprise.LED in Practice Formulating and Implementing the LED Strategy The LED program of the municipality of Upi. As of writing. operate and manage the organic fertilizer enterprise. rubber. While doing the value chain analysis of Upi’s corn industry. This enterprise eventually became a top priority in the LED strategy implementation. the LGU created a Business Development Center (BDC). and pesticides accounted for 80% of the cost of local corn production. The group then undertook a series of planning workshops and study tours to enhance the strategic plan and fine-tune individual project action plans. In 2007. the Upi LED stakeholders’ group agreed that the BDC functions would encompass the strategies for SME development (See Stage 4 of the LED Process). to provide business development support services to entrepreneurs. This was followed up by LGSPA in 2008 with technical support for the implementation of the Upi LED Strategic Plan. the LED stakeholders group discovered that fertilizers. the LGU is negotiating with the Land Bank of the Philippines to establish the first ever banking services in the municipality. a SEC-registered company. In addition. that will own.000 to the corporation while the LGU has put up PhP2 million for the licensing fee of a particular organic fertilizer brand. and c) enhancing their capacity to support and assist local SMEs. facilitating access of Upi SMEs to finance and market. including the Upi Women’s Federation. and providing support services to enhance productivity including improvement of production of Upi SMEs. systems and operations plan in 2009. b) building their knowledge and skills in identifying priority industries or economic sectors. This particular assistance was aimed at a) deepening the Upi LED team and the Upi stakeholders group’s appreciation of the LED process and of the Upi LED program. PhP400 million was draining out of the local economy because farmers were buying these inputs from outside sources. job creation. especially in these priority sectors. It is also developing its tourism potential through the Tourism Council to STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 81 . Maguindanao started in 2005 during LGSP II. During a review of the BDC structure. as LGU partners in developing the ginger and other high value commercial crops production and the organic fertilizer raw material production. namely.

Decision Analysis. The CDS is a participatory planning process that is a combination of learnings derived from the CDS process developed by the World Bank and the Local Environmental Planning and Management Program. One Livelihood (OBOL) Program. then Mayor Randoph S.lcp. leadership and analytical skills.htm). the LGU’s judicious use of funds. c) Assist the local authorities outline their financing and investment strategies. The objectives of the CDS are to: a) Guide the city’s direction for economic development with the aim of creating more employment opportunities.LED in Practice promote spelunking. the local chief Executive in Upi took primary responsibility for LED planning and implementation. and d) Build local capacity for more effective urban management. Other helpful factors include the active participation of the private sector through the LED stakeholders group. Factors that Facilitated the LED Process Like other successful LED cases. which is based on the Sustainable Cities Approach of UNDP. One Product Movement of the Oita Prefecture STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . Tuguegarao City. First and foremost is the realization of the city as an economic space. formulating the City Vision. cities have adopted a new approach to managing their cities. Guided by Mayor Ramon Piang’s drive. These include the Technology of Participation (TOP). strategies and actions. Priority Identification. He said that CDS has taught the LGU to involve all stakeholders in developing their urban indicators. waterfalls. It is one of the cities included in Phase 2 of the City Development Strategy4 (CDS) Program in the Philippines in 2002. Cagayan: Enhancing the Business Enabling Environment for Community-Based Enterprises Tuguegarao City is the capital of the Province of Cagayan and the center of the Cagayan Valley Region. and its strong linkages with higher levels of government. 4In the annual Cities Alliance Public Policy Forum in 2007. Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis. located in Northeast Philippines. b) Develop a consensus building process to establish the city’s priorities. Consensusbuilding. Strategy Formulation. Forecasting and Capital Investment Planning. One of the LED programs adopted by Tuguegarao under its CDS is the One Barangay. Ting of Tuguegarao shared that several tools were used in formulating their CDS.org. which was inspired by the One Village.” (Retrieved from http:// www. 82 Strategies Employed In a speech given in a 2004 CDS Conference in Hanoi Vietnam. the League of Cities of the Philippines (LCP) Secretary General Mayor Mel Senen Sarmiento of Calbayog City said that “Through the CDS.ph/04142008_ PhilCities. the LGU was able to make significant investments in the LED program in a short period of time. Cities are identifying their competitive advantages and maximizing these in promoting local economic development. deciding on the best mix of resources and reviewing their efforts together. and other outdoor challenge activities. agreeing on strategies and priority projects.

the carabao milk candy and chocomilk of Namabbalan and the cacao choco balls of Capatan. The number of households living below the poverty threshold has decreased from 11. and metal craft in Larion Bajo. DOLE and the private sector. Isang Suklay. boost the local economy. In 2003. Tuguegarao City also launched a “Kasanayan sa Hanapbuhay” (Apprenticeship and Learnership Program).416 households in 2000 to 5. n. among others. an employment generation strategy in cooperation with TESDA. The program is aimed at enabling barangays to successfully operate economic activities.121 households in 2003 (Ting.ph.tuguegaraocity. organic fertilizer production in Cataggaman Nuevo. Hanapbuhay. the LGU also launched the Tuguegarao City Technology and Livelihood Development Center (TCTLDC). Results Achieved In his 2004 speech. techno-demos and seminar-workshops including the highly successful livelihood-training-workshop “Isang Gunting. Business counseling and capability building x Marketing Services (market linkages. http://www. STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 83 . It offers the following services to the public: x Technical Assistance (on-site trainings. the city government has successfully facilitated the establishment and operations of community-based enterprises in 21 out of its 49 barangays. Thirty firms registered and successfully completed the training of 244 apprentices/learners. The most popular products include the roasted peanuts of Pallua.d. The wide-ranging OBOL enterprises featured in the Tuguegarao City government website. and create products that shall become their respective trademarks. As of 2004. It is tasked to provide the needed technology and networks to transform Tuguegaraoeños into self-reliant and globally competitive entrepreneurs. trade fairs. under the OBOL program.” Market linkages and promotions for the Padday na Ybanag products were also strengthened through participation in local and national trade fairs. events marketing) x Financing Assistance (micro/project lending and venture capital) In 2005. provide gainful employment. Mayor Randolph Ting said that the CDS has dramatically improved the implementation of the LGU’s Poverty Reduction Agenda and Local Economic Development program. the TCTLDC conducted a total of 20 trainings. a knowledge and skills center in the countryside (Tuguegarao LGU. include swine fattening in Libag Sur. which is a favorite centuries-old family recipe. post training services and techno forum) x Business/Livelihood Technology Trainings (project development and packaging. 2004).).LED in Practice of Japan.gov. DTI.

It also published the Naga Citizen’s Charter that provides 84 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . and empowering the private sector. Camarines Sur: Good Governance as Catalyst of Economic Growth Naga City is located in the province of Camarines Sur. is a mechanism that allows complementation of limited resources and pooling of investment potentials and comparative advantages to ensure balanced growth and sustainable development in the Metro Naga region. In the early 1980’s. comprising of Naga City and 14 towns of Camarines Sur. This situation turned around when then 29 year-old Jesse Robredo was elected as city mayor in the 1988 election (Mangahas.The city government encouraged private sector partnerships by improving cost-efficiency in the construction of public works.516 as of 2007 (NSO Census) and a land area of 8. It has a total population of 160. not on patronage. Its exemplary governance practices evolved over time through the following initiatives (Mangahas. practicing transparency in its operations. Naga City was not a desirable place to live in as gambling and other vices proliferated. and implementing other confidence-building measures. Strategies Employed Naga’s achievements were not realized overnight. Improved Local Government Capability – Personnel hiring and staffing is based on aptitude and competence. 2006): Economic Governance . Institutionalized Participatory and Inclusive Governance – The city government organized and authorized a People’s Council (composed of accredited NGOs) to sit in every legislative committee and local special body through Ordinance 95-092. Bicol region (Region V) and is 450 kilometers southeast of the National Capital Region (NCR). Formation of the Metro Naga Development Council (MNDC) or Metro Naga – The Council.The city government propelled economic activities by instituting and nurturing strong partnerships with organized sectors. A Productivity Improvement Program and a Merit and Promotion Board were established to encourage innovation and productivity improvement. taking the lead in strategic planning.LED in Practice Naga City. encouraging people’s participation.448 hectares. 2006). Partnerships with the Private Sector . the city government was spending more than its resources and the quality of life was not getting any better. The city government of Naga served as a competent and willing regional development catalyst by spearheading the formation of an economic region out of disparate political units in the province.

policies and activities. long-term and views the city as an economic space whose sustainability also depends on conditions beyond its geographic environment.1999). need-focused.).). one of four most improved cities in Asia (Asiaweek. Growth-oriented and equity-building strategies were particularly employed to forge and nurture city government and private sector partnership (Naga LGU.2%. an average family income that is 126% and 42% higher than the national and regional averages. Results Achieved As a result. Local Policies and Initiatives . The most notable of which are being one of the Philippines’ most livable cities (Interface Newsmagazine). Naga boasts of a dynamic economy made evident by its 6. Financing Development – Development projects were financed from bank borrowings. To date. It accounts for 21% of total investments in the Bicol region. These are service delivery mechanisms that fulfill the promise of development for all. and regional awards. and a lower poverty incidence of 29% compared to 50% of the region.gov. Growth-oriented strategies promote economic development and expand investment opportunities while equity-building strategies ensure that the poor benefit from the fruits of development. STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 85 .LED in Practice step-by-step procedures for availing its 150 frontline services and has set up a website (www. The Investment Promotions and Action Center implements the investment Board’s objectives.5 million in 1988 to about $6. n. The Naga Governance Model has been tested and fine-tuned over the years and rests on three key elements. facilitates joint venture projects with local and external investors. functional partnerships and people participation. national. the city government income rose from $0. and having one of the Top 10 Best Practices worldwide (Dubai International Award. 1998). lower unemployment rate of 5.By virtue of Ordinance No. particularly the poorest sectors of society. namely: progressive development perspective. and provides assistance to investors. grants and local revenues (which account for over 40% of the city’s total income). markets Metro Naga as an investment site. the city government grants incentives to investors in preferred industries to generate jobs and promote balanced growth. It has garnered more then 100 international. a model local government unit and a center for innovation in local governance (Naga LGU. 97-114. n. mixed publicprivate financing. Naga City is now one of the country’s brightest economic spots. Economic Planning and Analysis – The Mayor transformed the planning process into one that is participatory.0 million in 2001.d.naga.d.5% average annual growth rate. ph) that updates citizens on the city’s finances.

LED in Practice
Baybay, Leyte: Setting the LED Direction through Participatory Economic
Planning5
Baybay is one of the 41 towns of Leyte Province. It has 92 barangays with a total land area of 46,050
hectares, making it the largest town in Eastern Visayas (Region VIII). Based on the 2007 NSO census,
Baybay registered a total population of 102,526. It is home to the world renowned Visayas State
University (VSU), the biggest agricultural school in the Philippines. It is an agricultural community with a
high potential for agro-industries. Specialty Pulp Manufacturing, the largest abaca pulp mill in Asia, two
coconut mills and a big activated carbon plant are some of Baybay’s
industry locators.
Strategies Employed
The local government unit (LGU) of Baybay believed that huge resources are required for local economic
projects to be successful. This mindset plus the traditional practice of implementing projects from a list
prepared and prioritized by department heads characterized the development outlook of the LGU prior to
the Department of Trade and Industry (DTI) and German Technical Cooperation (GTZ) interventions.
In 2005, consultation workshops were held to build a consensus on the economic issues, local needs
and doable strategies that would stimulate economic growth in the municipality. The participatory
planning process of the Local and Regional Economic Development (LRED) approach was introduced
to the participants who came from both public and private sectors. Emphasis on building private-public
partnerships, motivation and engagement of the stakeholders, encouraging learning and creativity, shifting
ways of thinking, building local ownership and securing “buy-in” of key stakeholders to actively cooperate
for a common economic good were emphasized.
This initiative was made possible through the Small and Medium Enterprise Development for Sustainable
Employment Program (SMEDSEP), a development cooperation project between the Republic of the
Philippines and the Federal Republic of Germany that aims to improve the Business and Investment
Climate for Small and Medium Enterprises (SMEs) in the Philippines, especially in the Visayas. SMEDSEP
is implemented in partnership with the DTI at the national, regional and provincial levels and the GTZ on
behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).
5This account is largely based
on the Small and Medium
Enterprise
Development
for Sustainable Employment
Program’s
(SMEDSEP)
success story on Baybay
written by Ria Adapon (n.d.).

86

The participatory planning process was appreciated by the participants representing stakeholders from
the private sector, community residents, local partner NGOs and the local government. As a result, a
strong sense of ownership of the Local Economic Development (LED) Action Plan of Baybay emerged
and motivated the stakeholders group into action.
STRATEGIC LOCAL ECONOMIC DEVELOPMENT:
A Guide for Local Governments

LED in Practice
The LGU ensured the smooth implementation of the LED Action Plan by having four representatives
from the public and private sectors trained and coached by GTZ SMEDSEP and DTI on specific tools for
planning, implementation, monitoring and assessing the progress of the Action Plan and communicating
its results not only within the municipality but also to other areas in the Eastern Visayas Region. These
facilitators guided the local stakeholders in the LRED process with DTI and GTZ providing coaching
support. Mayor Jose Carlos Cari and Councilor Vic Veloso championed the process and their active
involvement facilitated the realization of the plan. Mayor Cari advocated the LRED in Knowledge Sharing
Fora and in Sensitizing Workshops in the Eastern Visayas. The LGU and private sector representatives
jointly monitored the progress of the Action Plan every month. The progress meetings, most often
attended by the Mayor, discussed key milestones, issues and next steps.
The LED Action Plan focused on tourism and investment promotion as its priority development areas.
The LGU reactivated the Tourism and Investment Council which established the Tourism and Investment
Promotion Office (TIPO). The position of Tourism and Investment Officer (TIO) was created and was
tasked to operate the TIPO. The TIO also acted as the LGU’s focal person for the LRED initiatives closely
coordinating with the GTZ and the regional office of the Department of Tourism.
Results Achieved
Consequently, Baybay was recognized for its effectiveness in tourism and investment promotion through
its promotion materials, participation in outbound investment and benchmarking missions to Malaysia and
Singapore, and active participation to Tourism Fairs outside the Leyte Province. Better coordination with
the regional Department of Tourism (DOT) has likewise resulted to the inclusion of Baybay in the region’s
promotional materials, activities and in the Tourism Map of Eastern Visayas.
The Baybay Tourism and Investment Promotion Office has also aggressively promoted the municipality as
a location for business and a tourist destination in its website and has established links directly with hotels
and tourism operators in the Visayas. Since 2005, approximately PhP 125 million was invested in Baybay,
a clear demonstration that Baybay has improved its business climate and institutional environment. As a
result, the Philippine Chamber of Commerce and Industry’s Most Business Friendly LGU Award Program
cited LGU Baybay in 2006 for its efficient Investment Promotion.
While the LGU recognizes the quick wins, specifically in the areas of Tourism and Investment Promotion, it
has further taken the following steps in 2007 to sustain the gains: integrating the short term LRED Action
Plan to its Comprehensive Development Plan and applying the participatory planning approach of LRED
in all planning activities. The LGU is also committed to institutionalize the planning approach through
iterative capacity building, allocation of financial resources to sustain LRED initiatives and creation of
monitoring mechanisms.
STRATEGIC LOCAL ECONOMIC DEVELOPMENT:
A Guide for Local Governments

87

LED in Practice
Bohol: Local Economic Development (LED) through Investments Promotion and
Good Governance
Bohol is the tenth largest island in the country, located between the islands of Cebu and Leyte (Gawad
Galing Pook, 2001). It has a population of 1,230,110 (2007 NSO Census) and a land area of 4,117 square
kilometers. It consists of 47 municipalities and one city.
Bohol was one of the provinces that experienced severe unemployment and massive out-migration
due to lack of countryside opportunities. This led to a low population growth rate (average of 0.89%
yearly) (Gawad Galing Pook, 2001), underinvestment and brain drain. Then Governor Rene Relampagos
initiated the Bohol Investment Promotion Program (BIPP) to promote Bohol as an investment and
tourist destination; to encourage business and finance projects; involve citizens in policy formulation
on investment promotion; and establish and maintain an information base to aid policy formulation and
technical assistance.
Strategies Employed
A brief account of BIPC’s humble beginnings was documented by Gawad Galing Pook (2001), as
follows:
1. Public Consultation -The provincial government with the assistance of the ARD-GOLD of the
USAID conducted a series of consultation-workshops from October 1995 to December 1996 using the
Technology of Participation. These were participated in by provincial and municipal officials, selected
national agencies, NGOs and private sector. Participants were clustered by municipalities based on the
grouping of the League of Municipalities. Determining the province’s preferred growth focus, the strategic
public and private investments and project requirements per growth focus were done. A Technical
Working Group (TWG) was created to define the direction of the province, followed by the formation
of the multi-sectoral Bohol Investment Promotion Advisory Group (IPAG) which took on the functions
identified by the TWG. The consultations identified three drivers of economic growth: eco-cultural
tourism, agro-industrialization and light manufacturing.
2. Creation of the Bohol Investment Promotion Center - The program capacitated the technical
support group called Bohol Investment Promotion team on investment promotion through cross-visits,
formal orientations on special skills, production of promotion collaterals and project packaging. The
provincial government provided office space, equipment and materials amounting to PhP1.4 million.
A series of Industry Assessment Workshops on the agro-industrial sector were also conducted that led
to the identification of nine priority agricultural sub-sectors. The Bohol Investment Promotion Team was
88

STRATEGIC LOCAL ECONOMIC DEVELOPMENT:
A Guide for Local Governments

Peace and Development Program in 2005. In October 1998. which is tasked to facilitate the immediate setting up of investors’ projects. Incumbent Governor Erico Aumentado was awarded a KAS Medal of Excellence for piloting Bohol’s phenomenal growth and sustained development (Blanco. Arts and Eco-cultural Tourism Development in 2002. the Bohol Coastal Law Enforcement Council in 2003. 2008a). Adoption of the Bohol Investment Code – The Sangguniang Panlalawigan adopted the Investment Code that serves as a guide in the granting of fiscal and non-fiscal incentives. study and promotion missions to CALABARZON. 2005). Gawad Galing Pook has been consistently giving out awards from 2000 to 2005 to the Provincial Government of Bohol for its programs. Financing the Program – The Bohol Investment Promotion Program was financed by the Provincial Government from various sources. Included in Gawad Galing Pook’s Top Ten Programs in the country were Bohol’s Cultural Renaissance: Towards Synergy of Heritage. In 2008. ODA. Bohol has hugely attracted both public and private investors in the country and abroad. United States and Osaka. it was cited by the Konrad Adenauer Stiftung (KAS) for its excellence in governance and sustainable development. the 20 poorest provinces in the country. BIPC was created through an Executive Order by the Provincial Governor.. Bohol has been a recipient of various awards and citations for its exemplary performance in poverty reduction and economic growth. 5. Bohol has successfully extricated itself from “Club 20”. investment exhibits. and management. 3. and. The BIPC embarked on promotion activities such as materials production for the investors. Creation of a Livelihood Promotion Unit – In March 2000. Laguna. Cavite. It was formally established on February 1999 by virtue of a Sangguniang Panlalawigan ordinance.LED in Practice replaced by the Bohol Investment Promotion Center (BIPC). participation in travel marts. Bohol Ecotourism Development Program in 2004 (Gawad Galing Pook. It cited as Trailblazing Programs Bohol’s Investment Promotion Program Providing Barangay Livestock Assistance for Income Generation and Sustainable Livelihood in 2000 and the Poverty Reduction. Results Achieved After 13 years of persistent participatory and transparent home-grown initiatives. 4. infrastructuresupport organizations. national STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 89 . Japan to gain more insights on promotion and marketing.e. government agencies and private sector. a Livelihood Unit was created under the BIPC to respond to the needs of existing and would-be small entrepreneurs. operation. BIPC also developed a website to provide access to international information-seekers. i.

China.government funding. DSWD and DOST. UNWTO. Likewise. WB. Austria. bridges. Funding for hard infrastructure such as roads. school buildings among others has been sourced out. and. irrigation. PAHRDF. the governments of South Korea. EU. NGOs and foundations. human resource development and other soft infrastructure are being provided by foreign-funded programs and international agencies like the ADB. job placements. and grants from foundations or NGOs have been pouring in to finance and stimulate Bohol’s economic drivers. Bulgaria. national agencies like the PMS. 90 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . DA. USAID. DAR. DPWH. GTZ. international airport. DOH. private sector investments. WFO. DTI. NIA. technical assistance. NEA. mini hydro-electric plant. DepEd.

These include strategies that work or do not. These lessons are presented so that other LGUs can gain some ideas on which approaches to avoid. adopt or modify based on local conditions.Chapter Lessons Learned documents the learning gained from the LGSP II and LGSPA LED projects. as well as factors that facilitate or hinder the LED process. STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 91 4 .

A new initiative requires champions and new structures for implementation. whether a municipality. especially where there is chronic inability to meet basic needs. Among LGSPA92 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . One way this can be concretely done is to make the links to economic and poverty data from the LECA. with its anticipated impact on the poorer and larger segment of the population. Any LGU can undertake the LED process. the business sector. and all tiers of government. as long as it is interested and willing to pursue local economic development following the principles and procedures presented in this Guide. 2. makes for good political platform. reducing poverty by embarking on the LED process appeals to government and ordinary citizens alike. The prospect of community wealth creation is the major ‘selling point’ that has motivated LGUs and stakeholders to buy into and commit to the LED Process. There are no other requirements or criteria that an LGU should meet in order to begin the LED process or to qualify for technical assistance from any program. These are the themes that resonate to all stakeholders – the poor and the vulnerable sector. Championing this initiative primarily rests with the local chief executive (LCE) who holds the greatest influence and authority among the local actors. ultimately. Some local leaders also recognize that a successful LGU-facilitated LED.Lessons Learned This chapter presents some insights drawn from the LGSP II and LGSPA LED experiences. One of the immediate objectives of LED is to marshal the stakeholders and gain their acceptance and cooperation to undertake the LED process. sustainable development and other good governance principles to be able to gain the attention and cooperation of LGUs and other stakeholders. learning institutions. and regardless of income classification. In all communities. 1. 3. civil society organizations. creating wealth and. It is thus important that individuals and organizations advocating the LED process should be able to communicate its connection to wealth creation. These LED experiences offer the following lessons that will hopefully prove invaluable in enhancing approaches and strategies in advocating and facilitating the LED process. empowerment. the LGPMS and sectoral plans such as the Local Poverty Reduction Action Plan. The LED process can be done in or by any LGU. It includes the factors that contribute to or hinder the successful implementation of the LED process as well as the strategies that were found effective and those that were not. the proposition of generating jobs. institution or individual that provide capacity-building interventions to LGUs on LED. city or province.

organized and systematic strategic planning. The foundation of a good LED program is a sound participatory planning process. LED success and sustainability rests on a strategic and planned approach. “Examples of LGU Behavior Models in LED”. than they do existing but inactive local bodies that were mostly created simply to comply with a national law. STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 93 . LED champions may also come from the private sector and the community. Undertaking the Local Economic Competitiveness Assessment (LECA) or Stage 2 of the LED process is critical to be able to formulate LED strategies that are appropriate to the conditions and responsive to the issues in the locality. As shown in Figure 5. It is also essential to get the cooperation of members of the legislature so that ordinances and resolutions toward a favorable business climate can be passed and fund allocation for LED programs and project can be facilitated. LED stakeholders are able to come up with informed and resolute decisions through a deliberate. such as the LED stakeholders group. 4. It is also important to note that the municipal LGUs in LGSPA areas appreciated and recognized structures formed through participatory analysis and planning processes. the ones that have made significant strides in LED are those with LCEs that have bought into and shown commitment to the LED process. a sustainable and purposeful LED program or project is characterized by a high concern for both system (orderliness) and risk. These structures provide the foundation for more formal and long-term collaboration – to include public-private enterprise partnerships – among representatives of the three economic leaderships (Figure 2) in carrying out LED programs and projects. step-by-step planning but more so by an iterative process of “self-discovery” and “searching and learning” consisting of both flexible planning and entrepreneurial risk-taking. the greater the likelihood of success in achieving the LED goals.Lessons Learned assisted LGUs. The more advocates. Recent studies also show that an area’s competitive advantage is determined not so much by one-shot. A wellplanned LED stems from a highly systematic approach and an enthusiasm for innovation. Developing systems and structures for LED implementation begins with the organization of the LGU LED team and the LED stakeholders group.

Lessons Learned Figure 5. Examples of LGU Behavior Models in LED Examples of LGU Behavior Models in LED HIGH Concern for System TRADITIONAL LED ‡/LYHOLKRRGGHYHORSPHQW" ‡0RVW3((" PURPOSEFUL/ SUSTAINABLE LED ‡3ODQQHG/(' CRISIS LED OPPORTUNISTIC LED ‡&UHGLWUHWDLO PLFURILQDQFH.

natural. In fact. between housing options.g. They prevent problems before they emerge.. They redefine their clients as customers and offer them choices. into the community.g." ‡6RPH363333SURMHFWV" ‡6RPHDJURLQGXVWULDO]RQHV" LOW Concern for Risk HIGH *Adapted from the LGSP II PEE Behavior Models 5. Economic interventions should be customized according to the conditions unique to each target community. Such LGUs promote competition between service providers. 94 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . between schools. They are driven by their goals – their missions – not by their rules and regulations. LED programs proved to be successful in LGUs that are entrepreneurial and innovative. volume of production and area covered). Each locality is unique and LGUs are themselves entrepreneurial and innovative. and other factors. between training programs. one of the lessons from LED initiatives has been that duplication of initiatives is rarely successful. e. access to support facilities and markets. financial and human resource factors peculiar to each LGU. technologies used. focusing not on inputs but on outcomes. They measure the performance of their agencies. LED strategies should take into consideration the physical. rather than simply offering solutions afterward.. They prefer market mechanisms to bureaucratic mechanisms. They empower citizens by pushing control out of the bureaucracy. Although two localities may have the same leading industries or resources. There is not one exclusive approach for LGUs to facilitate LED. these industries may differ in scale (e.

Social programs on health. LED gains credibility when planned initiatives are immediately carried out. All activities of the LGU influence the local economy. Any LGU committed to LED must put in practice the principles of participation. Pursuing and sustaining LED then becomes high on the agenda not only of the LGU but of all LED stakeholders. And they do not simply focus on providing public services. 7. For example. responsiveness. identifying organic fertilizer production as a LED priority in Wao provided direction to the solid waste management program of the LGU. Infrastructure development facilitates production and marketing of goods. On the STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 95 . LED gives focus and direction to other programs of the local government. however. equity. Prioritizing the metal craft and woodcraft industry in Tugaya led to the development of programs for biomass fuel production (for kiln drying and firing purposes) and support infrastructure and underscored the need for sustainable forest management. resources and networks is critical in successfully pushing economic growth. equity. For the LED process to be inclusive and participatory. private. it is necessary to immediately move to the implementation of priority LED projects in order that the momentum and the energy created from the previous LED stages can be carried over into implementation. not simply spending it. education and welfare as well as gender and development services impact the productive capacity of the labor sector. It also ensures the responsiveness of strategies. programs and projects to the needs and core competitiveness of the community.Lessons Learned They put their energies into earning money. provides the various LGU programs a clear basis and focus. responsiveness. They decentralize authority and embrace participatory management. but also on catalyzing all sectors (public. 8. The convergence of the stakeholders’ ideas. and also for the LED process and its implementers to gain the trust and confidence of stakeholders and the larger community. accountability and transparency throughout the LED process. the LGU must seek the broad representation of the economic sector stakeholders to ensure that economic development strategies capture the interests and have the approval of everyone concerned. Concrete results early in the strategy execution will ensure continued support and participation from local and external development partners. 1992). After strategy formulation. Environmental projects protect and improve the locality’s natural resource base that is necessary for sustainable economic activities. accountability and transparency. 6. Having a LED strategy. and voluntary) into action (Osborne & Gaebler. The benefits of LED can be effectively reaped when the partnership between the local government and the community translates into concrete and day-to-day actions the principles of participation.

The LED process can serve as the springboard for women’s economic empowerment. making available economic sector information to the general public and clarifying government economic rules. For instance. which promotes mutual trust among stakeholders. Economic interventions can go to waste due to unorganized and uncoordinated implementation. based on the LGSPA experience LGUs need technical assistance in determining their comparative advantage and in formulating strategies to harness this (tools. Analyzing LED strategies through the gender lens promotes women’s economic empowerment Women play an important role in community building and local economic development. specific LED technical expert maybe required to ensure the accomplishment of the activity. This phenomenon should be one of the concerns to be addressed within the LED process. an entrepreneurial mindset. In undertaking the activities in the LED process. information requirements. Transparency mechanisms include regular LED program or project performance (including financial) reporting to LED stakeholders and the Local Development Council. privileges. regulations. as much as possible. more women-owned enterprises fold prematurely. Accountability should also be established for every deliverable in the LED process in order to get things done right. Equity is crystallized when economic gains. new models). As cited in Chapter 2. This entails instituting mechanisms for information-sharing. LED experts 96 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . There is a need to ensure that the LED process is supported and that key outputs are achieved. 10. Economic growth should not only be characterized by increasing total earnings in the local economy (such as growth in the “Gross Community Product”) but also by a narrowing of the income gap between the rich and the poor.Lessons Learned contrary. replicable practices. 9. That is why the roles. on time and within budget. duties and responsibilities of the stakeholders group. economic strategies that are left to the hands of a privileged and influential few promote elitism and often fail. No less important among these principles is transparency. although more women than men have the propensity to start a business venture. and participatory decision-making and monitoring. LGU LED team and TWGs should be clearly defined from the very start but modifications and innovations can be done later or when necessary. Gender equality should be analyzed in the LECA and espoused and integrated in LED strategic plans. rights and responsibilities are. equitably distributed. and decisions. community feedback mechanisms.

including agricultural. ensuring an entrepreneurial and value chain-oriented approach. STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 97 . Appropriate technical support is also needed in guiding the LGUs in various approaches in implementing the LED Plan (start-up versus scaling up.g. consulting firms or even entrepreneurs). DTI).. and from the academe.Lessons Learned may come from government agencies (e. if direct service provider. opting for a strategic response: enabling or facilitative.g. from the private sector (e. with a clear exit strategy).

). Local economic development: a snapshot of capacity building needs and lessons. actionforenterprise. F. D.November). Retrieved from http://www. Department of the Interior and Local Government.org/ awardees/2005/2005_ace01_bohol.smedsep. W. Retrieved from http://www. Unpublished document.pdf Madarang. Retrieved from http://www.ph/ downloads/october-november. (2005) Making the Case for Culture . The official publication of the Provincial Government of Bohol. (2009). [Powerpoint Slides]. Philippines: National Book Store. Value Chain Program Design: Promoting Market-Based Solutions for MSME and Industry Competitiveness. Unpublished document. (pp.ph/downloads/october-november. 295-299).) The Flow of Money and Its Impact on Local Economies. KAS cites Bohol for Excellence. pp. 4. (2007). Philippines (2008).d.pdf Blanco.ph/Download/SS%20LRED%20 v3%2027Nov07. Vancouver.pdf Darling. J.pdf Fajardo. The Philippines. Retrieved from http://www.ca/makingthe-case/building-comm-identity-pride. Lusby. I. 8. Economic Development (Revised Edition).d. F. 10. 80.) Success Stories: Managing the Promotion of Capacities for Sustainable Development.dilg. Experiences & Insights on Facilitating Sustainable Local Economic Development: Lessons from LGSP & LGSPA [PowerPoint slides]. (n.pdf Local Governance Support Program in ARMM (LGSPA). Kansas State University Agricultural Experiment Station and Cooperative Extension Service. The Capitol News.bohol. . Navotas City. & Philippine Center for Enterpreneurship (PCE). (2007). (1991.pdf. R.org/doc/ resources/cds/ved-80-eng. October .org/ governmentaffairs/growth/fruth_report.gov. adb. J.Reference List Adapon. Villes en développement. (2008).. Kanaley (Eds. In B. (n. Retrieved from http://www. Guide to Comprehensive Development Plan (CDP) Preparation. Retrieved from http://creativecity. & Panlibuton.pdf Creative City Network of Canada.citiesalliance. Guv assures no casualty in Capitol reengineering. R. The official publication of the Provincial Government of Bohol. (n.d.d.pdf.htm Kebede. Roberts & T. 98 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments Gawad Galing Pook (2005). C. Manila. (1990). G. pdf Blanco. J. May). Retrieved from http://www.naiop.Building Community Identity And Pride.. Urbanization and Sustainability in Asia: Case Studies of Good Practice. Understanding Your Community’s Economy. Local Governance Support Program in ARMM (LGSPA). Philippines: Author. Inc. S. Manual on the Local Planning Process for ARMM.) Strategic Economic Planning & Economic Development.gov. (n. L-775.The Philippine Report (2006-2007) [PowerPoint slides]. H. (2008). Province of Bohol Award for Continuing Excellence. Mangahas. Fruth. Philippines: Asian Development Bank. (2008a. The Capitol News. 5 (1). Retrieved from http://www. Local Governance Support Program in ARMM (LGSPA). Jr.November).org/Documents/Books/Urbanization-Sustainability/ urbanization-sustainability. McSweeney. Mainstreaming Gender Equality in Enterprise Development Initiatives of ARMM LGUs [PowerPoint slides]. V.) Global Entrepreneurship Monitor (GEM) . Community Development Series. BC: Author. S. Gawad Galing Pook (2001). (2006). (2008b. 5 (1). p. Kaban Galing: The Philippine Case Bank on Innovation and Exemplary Practices in Local Governance.gov.org/paper07.galingpook. 3: Transforming the Local Economy. Volume No. E.bohol. Retrieved from http://www. F. October . Habito. J. Retrieved from http://www.ph/ attachments/0000/1349/CDP_GUIDE_-_Updated. H.

org/doc/ resources/led/full-led-guide. Strategies. Manila. Mississippi State University.d. Schmidt.naga. & Murphy.com/eng/tools/index. Livelihood Development. (2003).d.). Retrieved from http://www. An Overview of Strategic Planning or “VMOSA” (Vision.org/ INTLED/423069-1099670772921/20738133/led_primer.pdf Philippines-Canada Local Government Support Program (LGSP).) LED Toolkit. A. Retrieved from http://siteresources.E. Paper presented at Cities Development Strategies Conference From Vision to Growth to Poverty Reduction. Vietnam. (1992). (n.citiesalliance. Objectives. Reinventing Government: How the Entrepreneurial Spirit is Transforming the Public Sector.pdf Ting.worldbank. Mission. G. Reading. (2006).d. Retrieved from http://www.. Local Economic Development: Stimulating Growth and Improving Quality of Life.nsf/AttachmentsByTitle/MovingTowardCo mpetitiveness/$FILE/Value+Chain+Manual. and Gaebler. J.ph Swinburn.).). Retrieved from http://www.ifc.worldbank. The Cities Alliance.tuguegaraocity. S. Strategies for Moving CDS to Scale. D. G. Goga. November). Retrieved from http://www. pdf World Bank & Cities of Change Initiative. Understanding Your Community’s Economy.ku. & Myles. Retrieved from http://www. S. Moving Toward Competitiveness: A Value Chain Approach.edu/en/ tablecontents/sub_section_main_1085. Philippines: Author.d.com/pubs/publications/p1646. Hanoi.) Naga: Innovations and Best Practices.html Swinburn.C. (2006). (2004. Local Economic Development LED Quick Reference. Addison-Wesley.htm Tuguegarao LGU (n. org/events/2004/2004-cds-hanoi/hanoi-web/files/ Session%203/S3-02-Randolph%20Ting%20docEN.gov. T. R.htm Osborne. Understanding Your Local Economy: A Resource Guide for Cities. 2009 from http://ctb.worldbank. Local Economic Development: A Primer .tangram-studio. (2007).gov. D.org/urban/local/ toolkit/pages/home.htm The World Bank Group (2007).d. (n.).: Author. Retrieved from http://www. F. Making Local Economic Development Strategies: A Trainer’s Manual. (n. Washington.. Retrieved June 9. Retrieved from http:// site50.citiesalliance.Developing and Implementing Local Economic Development Strategies and Action Plans. org/ifcext/fias. J. & Fawcett.pdf STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 99 . Retrieved from http://msucares.ph Nagy. Retrieved from http://www.F. (n.d. and Action Plans).org/ urban/led United States Agency for International Development (USAID) LED Ukraine.Reference List Naga LGU (n.

‡6(& %.” and other municipal ‡ SEC. 16 “Every local government unit shall exercise its powers… which are essential to the promotion of the general welfare. local government units shall… promote full employment among their residents…” ‡ SEC. regulation and supervision of business concessions. the security services for such facilities. 17 (B)(2)(XI) “Tourism facilities and other tourist attractions. including the acquisition of equipment.ANNEX A The LGU Mandates and Related Laws on LED 1. 17 (B)(2)(IX) “Public markets. The following provisions are the most relevant to LED: ‡SEC. slaughterhouses enterprises. Local Government Code Republic Act 7160 or the Local Government Code has given the local government units (LGUs) more power and authority to accelerate local economic development and improve the quality of life in our communities. Within their respective jurisdictions.

.

.

Laws on the Development of Small and Medium Enterprises (SMES) ‡0$*1$&$57$)2560$//(17(535. peace and order. monitor and evaluate poverty reduction programs in their respective jurisdictions. The Social Reform and Poverty Alleviation Act RA 8425 or the Social Reform and Poverty Alleviation Act stipulates that it is the declared policy of the State “to adopt an area-based. diversity agriculture.” ‡6(& “A local government unit may… provide assistance… to such people’s and non-governmental organizations. for economic. “Investment support services.” 100 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments ‡6(& “Functions of Local Development Councils. spur rural industrialization… and enhance the economic and social well-being of the people. participation in governance. water and environmental sanitation. and family care and psycho-social integrity.” It mandates LGUs through the Local Development Councils (LDCs) to formulate. food and nutrition. socially-oriented projects to be implemented within its territorial jurisdiction. implement. 3. sectoral and focused intervention to poverty alleviation wherein every poor Filipino family shall be empowered to meet its minimum basic needs of health.6(6 5$. shelter and decent housing. consistent with the poverty reduction strategy of the national government.” 2. education and functional literacy. income security. including access to credit financing” ‡6(& “Local government units may enter into joint ventures and such other cooperative arrangements with people’s and nongovernmental organizations to… develop local enterprise… to improve productivity and income.

respectively.$/$1 5$. to set aside at least 6% and 2%. To address the problem of access to financing. 2007.$/$. of their total loan portfolio for SME credit for a period of 10 years from August 12. ‡. The law requires the creation of the Small and Medium Enterprise Development Council (SMEDC) so that there is close coordination between government institutions involved in SME development and the private sector for coherence in both policy thrusts and implementation of action programs. 1997 to August 9. whether public or private. the Magna Carta requires all lending institutions.

Assistance is provided to countryside barangay and business enterprises through minimum regulation. and provision of financing and other government services and assistance. .

QLWLDO $UHDV IRU $FWLRQ LQ WKH Implementation of Programs on Poverty Reduction and Local Economic Transformation ‡7+(201.%86.67$1&( 72 :20(1 ENTREPRENEURS (R. 7882) Government financial institutions are mandated to provide financial assistance to non-government organizations engaged in developing women entrepreneurs engaged in manufacturing.19(670(17&2'( (2. service and trading businesses ‡ 0& 12  .1* $66.'. processing.A.‡ $1 $&7 3529.

Review and Approval of Comprehensive and Land Use Plans (CLUPS)/ZONING ORDINANCES (ZOs) of Municipalities./* 0&  5H Implementation of Republic Act 9003. Highly Urbanized Cities and Provinces 4. additional deduction from taxable income for labor expense. DBM and NCRFW when pursuing LED: (For a detailed description. SMEs that are engaged in the priority areas of the investment priorities plan are entitled to the standard incentives under the code such as income tax holiday for 4-6 years. Otherwise Known as the Ecological Solid Waste Management Act of 2000 ‡ 0& 12  $GGHQGXP WR '. Otherwise Known as the Ecological Solid Waste Management Act Of 2000 ‡0&12./* 0&  5H Implementation of Republic Act 9003.17 0(025$1'80 '. refer to the LGSP Resource Book. ‡ 0& 12  *XLGHOLQHV 3UHVFULELQJ 7LPH 3HULRGV RQ the Adoption. exemption from contractor’s tax. and access to bonded manufacturing warehouses. Additional incentives are given to SMEs that locate in less developed areas. ‡0&12/RFDO(FRQRPLF7UDQVIRUPDWLRQ3URJUDP for Local Governments ‡ 0& 12  2UJDQL]DWLRQ DQGRU 6WUHQJWKHQLQJ RI Local Small and Medium Enterprise Development Councils (SMEDCS) ‡ 0& 12  . tax and duty free importation of capital equipment. One-Product Movement ‡0&12*XLGHOLQHVRQ3RYHUW\5HGXFWLRQ3URJUDP for Local Governments ‡0&12'HVLJQDWLRQRI/RFDO3RYHUW\5HGXFWLRQ Program Action Officers and the Functions of the LPRAO ‡ 0& 12  &UHDWLRQ RI /RFDO &XOWXUH DQG WKH $UWV Council ‡0&12. unrestricted use of consigned equipment. Component Cities.QYHQWRU\RIDOO6ROLG:DVWH'LVSRVDO Facilities and Sites in LGUs ‡ -2./* '%0 1&5):.PSOHPHQWDWLRQ RI WKH /*8&OXVWHU Development Approach Project (LGU-CLAP) as a Strategy in the Adoption of One Village. Local Economic Development: Stimulating Growth and Improving Quality of Life). 9003 Otherwise Known as the Ecological Solid Waste Management Act 2000 The LGUs can also draw authority from the following DILG Memorandum Circulars and the Joint Memorandum of DILG.QYHQWRU\RI/*87RXULVP&XOWXUHDQGWKH Arts Councils ‡ 0& 12  $GGHQGXP WR '. DILG Memorandum Circulars (MC) on LED ‡ 0& 12  6ROLG :DVWH 0DQDJHPHQW 3URJUDP Implementation of Republic Act No. SMEs that are registered with the Board of Investments (BOI) may avail of technical and other support services provided by the agency.

 CIRCULAR NO. 2001-01: Guidelines for Integrating Gender and Development (GAD) in the Local Planning and Budgeting System through the Formulation of GAD Plans ‡0&12&UHDWLRQRI/RFDO&RXQFLOIRU:RPHQ STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 101 .

ANNEX B Data for Local Economy Profiling 1.1     Population ‡ 3RSXODWLRQ6L]H &RPSDUHZRWKHUPXQLFLSDOLWLHVLQWKHSURYLQFHDQGLQWKHUHJLRQ. Demographic     1.

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65 above 1.3 Education and Training  ‡ &ROOHJHVRUWHUWLDU\HGXFDWLRQHVWDEOLVKPHQWVE\W\SHDQGQXPEHUVDWWHQGLQJ . This is contained in all Socio-economic Profiles of LGUs and NSO Population Surveys. This is contained in all Socio-economic or Ecological Profiles of LGUs and NSO Population Surveys     1.2 Labor and Employment Use the ‘Table: Household Population 15-65 Years Old by Employment Status and Sex’ to show data and information on Labor and Employment.0-14 yrs old .  ‡ 1XPEHURIWUDLQLQJFHQWHUVDQGUHVHDUFKLQVWLWXWLRQVLQWKHORFDOLW\  ‡ 5HJXODUWUDLQLQJSURJUDPVFRQGXFWHG HJ7(6'$WUDLQLQJV.15-64 . .QFOXGHYRFDWLRQDODQGWHFKQLFDO schools)  ‡ (GXFDWLRQDODWWDLQPHQWOHYHOVE\QXPEHUVDQGW\SHV8VHWKH¶7DEOH3RSXODWLRQ<HDUV2OGDQG2YHU%\+LJKHVW Educational Attainment Completed and Sex’.

Primary Sector (Agriculture) 102       a. sugarcane. rubber tree. corn. rice. e. coconut. 2. etc.. Crops (other than fruits and vegetables.g. Economic Profile 2.1.)  ‡ 3URGXFWLRQ²KHFWDUHVSODQWHGWRWRWDOPXQLFLSDODUHDWRWRWDODJULFXOWXUDOODQGORFDWLRQ EDUDQJD\V. cassava. coffee.

and cassava. Important for staple food crops like rice.  ‡ 1XPEHURIIDUPHUVILUPVHQJDJHGLQWKHSURGXFWLRQ STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments . corn. average yield per hectare (Compare with provincial or regional figures from the Department of Agriculture Bureau of Agricultural Statistics)  ‡ 3HU&DSLWD&RQVXPSWLRQ²8VHDYHUDJHSURYLQFLDOSHUFDSLWDFRQVXPSWLRQDQGFRPSDUHLWZLWKUHJLRQDODQG national.  average yearly volume and value of production (Compare with other municipalities in the province and in the region).

Fruits and Vegetables  ‡ 3URGXFWLRQ²KHFWDUHVSODQWHGWRWRWDOPXQLFLSDODUHDWRWRWDODJULFXOWXUDOODQGORFDWLRQ EDUDQJD\V.                      b.

 ‡ 1XPEHURIIDUPHUVILUPVHQJDJHGLQWKHSURGXFWLRQ c. Aquaculture and Fisheries  ‡ 3URGXFWLRQFDWFK²KHFWDUHVFRYHUHGWRWRWDOSRWHQWLDODUHDORFDWLRQ EDUDQJD\V.  average yearly volume and value of production (Compare with other municipalities in the province and in the region). average yield per hectare (Compare with provincial or regional figures from the Department of Agriculture Bureau of Agricultural Statistics)  ‡ 3HU&DSLWD&RQVXPSWLRQIRUVHOHFWHGFURSV²8VHDYHUDJHSURYLQFLDOSHUFDSLWDFRQVXPSWLRQDQGFRPSDUHLW with regional and national.

DYHUDJH\HDUO\YROXPH and value of fish catch. and National).  ‡ 1XPEHURIIDUPHUVILVKHUVILUPVHQJDJHGLQWKHSURGXFWLRQ d.  ‡ 3HU&DSLWD&RQVXPSWLRQIRUVHOHFWHGVSHFLHV²XVHDYHUDJH3URYLQFLDO3HU&DSLWD&RQVXPSWLRQDQGFRPSDUHLW with Regional. Livestock and Poultry  ‡ +HUGLQYHQWRU\E\W\SHRIOLYHVWRFN FDWWOHFDUDEDRVZLQHDQGJRDWV. (Compare with other municipalities in the province and in the region).

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106 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments .

STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments 107 .

108 STRATEGIC LOCAL ECONOMIC DEVELOPMENT: A Guide for Local Governments .