Philippine Local Government Officials Perceptions of Decentralization and Its Effects on

Local Governments’ Administrative Capabilities

By Buenafe F. Alinio

Bachelor of Arts, March 10, 1974, Saint Paul College of Ilocos Sur,
Vigan City, Philippines
Master in Public Administration, Nov. 17, 1989, University of Northern Philippines,
Vigan City, Philippines
Diploma in Advance Studies in Training and Development in the Public Sector,
July 4, 1994, Institute for Development Policy and Development,
University of Manchester, United Kingdom
Bachelor of Laws, March 21, 1997, Don Mariano Marcos Memorial State University,
San Fernando City, Philippines

A Dissertation submitted to

The Faculty of
The Trachtenberg School of Public Policy and Public Administration
of The George Washington University
in partial fulfillment of the requirements
for the degree of Doctor of Philosophy

May 18, 2008

Dissertation directed by

Michael M. Harmon
Professor of Public Policy and Public Administration
 UMI Number: 3297128

UMI Microform 3297128

Copyright 2008 by ProQuest Information and Learning Company.
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The Trachtenberg School of Public Policy and Public Administration of The George

Washington University certify that Buenafe F. Alinio has passed the Final Examination

for the degree of Doctor of Philosophy as of March 14, 2008. This is the final and

approved form for the dissertation.

Philippine Local Government Officials’ Perceptions of Decentralization and its Effects

on Local Governments’ Administrative Capabilities

Buenafe F. Alinio

Dissertation Research Committee:

Michael M. Harmon, Professor of Public Policy and Public

Administration, Dissertation Director

James Edwin Kee, Professor of Public Policy and Public Administration,

Committee Member

A. Rani Parker, President, Business-Community Synergies, Committee

Member

ii
© Copyright 2008 by Buenafe F. Alinio
All rights reserved

iii
 Dedication

The author wishes to dedicate this work to her loving parents. Her father, Prospero

Alinio, Sr. and her mother, Leonor Fama Alinio, had they been alive today, would have

been very proud of her accomplishments.

iv
 Acknowledgements

Doing this dissertation had been an extreme challenge. A variety of problems seemingly

insurmountable was confronted early on and into the process. The temptation to quit was

strong, but the reward of completion was an inspiration beckoning at the horizon.

Nothing could have been more difficult than writing the dissertation to its completion that

the need for the heart and soul be put into it. And it has been done!

I can never be more grateful to the guidance of Dr. Michael M. Harmon, the Chair

of my Dissertation Committee and my Academic Adviser, whose extreme patience and

incessant encouragement helped me through the difficulties of doing this research and in

getting through the PhD program. The two other members of my Dissertation

Committee, Dr. James Edwin Kee and Dr. Rani Parker had been especially supportive

and helpful in providing significant inputs to enhance this dissertation.

The Ford Foundation’s International Fellowships Program provided me the

opportunity to pursue a doctorate degree. With it, I realized the dream of coming full

circle in my academic life. I thank the IFP/IIE officials and staff in New York, Executive

Director Joan Dassin, Director Mary Zurbuchen, Tammy Langan, and Danielle Marino;

and the IFP-Philippines Program Officers Dr. Virginia A. Miralao and Mrs. Ma. Luisa

Fernan, International Partner Criselda Doble, Program Staff Nerissa Samac and Isagani

Lachica, for the tremendous support they had shown all the way.

I thank also the Local Chief Executives of the different provinces, which were

sites of my research, namely: Governor Ferdinand “Bongbong” R. Marcos (Ilocos Norte),

Governor Luis “Chavit” C. Singson (Ilocos Sur), Governor Victor C. Ortega (La Union),

and Governor Victor F. Agbayani (Pangasinan), for allowing me to conduct the research

v
in their provinces with access to their records and the participation of their appointive

local officials. To the appointive local officials – department heads – who have

graciously shared precious time from their busy schedules to accommodate my request

for interviews, my heartfelt appreciation.

I also wish to acknowledge the support extended to me by the different Human

Resource Management Officers – Mrs. Fe Siazon of Ilocos Norte, Mrs. Perlita Rigunay

of Ilocos Sur, Mrs. Maria Teresa Gonzales of La Union, and Mrs. Delia Madriaga of

Pangasinan – who assisted me set-up the schedules of interview and obtain necessary

records from concerned departments. From the start of the 2-week schedule in the

provinces, they have been there to help me meet my targets.

There are also friends who, in no small measure, have lent support to the

completion of my dissertation. I thank former CSC-Pangasinan Director Norma M.

Liwanag; Mrs. Lilia Carino; the staff of the Civil Service Commission Provincial Offices

in the sites of this study; the staff of the HRM Offices of the four provinces; and all

others whom I may have failed to mention.

Dr. Marie Rose Q. Rabang and Dr. Ferdinand Lamarca of the University of

Northern Philippines deserve my utmost appreciation for their help in making sense of

what I was writing.

My siblings Editha Alinio, Natividad Alinio-Mutuc, and Prospero Alinio, Jr.; and

my nieces, Alexis and Natalie Mutuc, and Charmaine Alinio, had constantly showed their

belief in my capacity to achieve what I set my mind to. Thank you all for everything.

Above all, I offer praise and thanksgiving to the one great source of wisdom and

strength, the Lord Almighty!

vi
 Abstract of Dissertation

Philippine Local Government Officials’ Perceptions of Decentralization and its Effects

on Local Governments’ Administrative Capabilities

During the past several decades, studies of decentralization of government have

increased, expanding in scope and depth from single-country assessments to comparative

nation-state studies, and from generalized societal implications to specific functional

areas. Philippine decentralization studies were not far behind, especially when

decentralization was implemented with the passage of Republic Act 7160, otherwise

known as the Local Government Code of 1991. Earlier studies, however, focused on

decentralization benefits and advantages from an overall societal perspective rather than

in terms of its effects on day-to-day administrative.

This study examined the local appointive officials’ perceptions on the four

dimensions of administrative capability – leadership, organizational structure, financial

resources, and personnel – considered as important factors to a meaningful

decentralization initiative. The perceptions of the appointive officials as decentralization

implementers highlight the effects of decentralization on these four dimensions.

The strengths of the local governments’ administrative capabilities revealed in the

study include (1) the strengthening of the manpower complement of the local

governments, (2) the increased participation of various non-government sector as

governance partners, (3) the enhancement of local-national relations, and (4) the

enhancement of service delivery through the adoption of new technologies into the

management systems and procedures of the provincial governments.

vii
 Identified as the chief weaknesses of the local governments’ administrative

capabilities were:

a. Leadership-related weaknesses. The respondents expressed the need for more

effective leadership in harnessing the contributions of other sectors in order to achieve

decentralization’s objectives. They also expressed the need to stimulate greater

participation by organizational subordinates in order to achieve those objectives.

b. Organization structure-related weaknesses. Clearer definition and

identification of functions and responsibilities between local governments and national

agencies are required in order to address the problem of duplication of services.

Likewise, the devolution of personnel from the national government created the need for

a more thorough analysis of functions in order to achieve the proper alignment of

positions in the provincial organizational structure. Personnel equipped with the

expertise need to be fitted to positions where such expertise is appropriate.

c. Financial resources-related weaknesses. Provincial governments lack the

capacity to generate own-sources revenues (OSRs) needed to cope with their expanded

functions. The LGUs have not vigorously pursued those opportunities offered by the

Local Government Code to increase their financial capacity. Respondents said that many

local elective officials lacked the political will to enact new ordinances or implement

existing ordinances to improve revenue generation and collection of the provincial

governments.

d) Personnel-related weaknesses. The Human Resource Management (HRM)

units of the provincial governments are simply subordinate offices attached to other line

departments. The extent of these units’ authority and responsibility thus needs to be

viii
redefined and expanded. The HRM units’ personnel also need appropriate knowledge,

skills, and attitudes in order to revitalize the management of human resources in the

provinces. The mechanisms for selection, appointment, placement, promotion, and

training of employees are not adequate. Systems for monitoring employee performance,

work attitude and behavior, as well as discipline are weak, if not absent altogether.

This study has revealed several successes and problems associated with the

implementation of decentralization in the Philippines, but it does not provide a complete

picture. Both the national government and the local government units can realize the

benefits of decentralization by increasing the understanding by LGU officials, employees,

and local constituencies of the Local Government Code’s purposes. The national

government should provide much-needed resources to support the LGUs’ efforts to

improve their administrative capabilities. The LGUs, for their part, need to do a better

job in educating their constituencies and taking greater advantage of the mechanisms

currently provided by the LGC to spur local development.

ix
 TABLE OF CONTENTS

Dedication …………………………………………………………………….. iv

Acknowledgements …………………………………………………………… v

Abstract of Dissertation ………………………………………………………. vii

Table of Contents ……………………………………………………………... x

List of Figures ………………………………………………………................ xiv

List of Tables …………………………………………………………………. xvi

Chapter 1. Introduction ……………………………………………………….. 1

Overview ……………………………………………………………… 1

Decentralization’s benefits and disadvantages ……………….. 2

The Philippine decentralization experience …………………… 4

Background of the Study ……………………………………............... 10

Purpose of the Study ………………………………………………….. 13

The Research Problem ………………………………………………… 14

Significance of the Study ……………………………………………… 15

A Guide to the Chapters ……………………………………………….. 18

Chapter 2. A Review of Literature on Decentralization and

Administrative Capability ……………………………………… 19

The Concept of Decentralization ………………………………………. 19

Core Dimensions of Decentralization …………………………. 21

Dimensions of Decentralization in the Philippines ……………. 24

The Choice of Decentralization Form …………………………. 25

The Dimensions of Administrative Capability ………………………… 27

x
 Leadership – the first dimension of administrative

capability ……………………………………………….. 27

Organizational Structure – the second dimension of

administrative capability ……………………………….. 32

Financial Resources – the third dimension of

administrative capability ………………………………. 40

Personnel – the fourth dimension of administrative

capability …………………………………….................. 45

Chapter 3. The Methodology of the Study ……………………………………. 48

The Research Framework ………………………………………………. 48

Research Methodology …………………………………………………. 49

Limitations of the Study ………………………………………………… 55

Chapter 4. Study Findings and Analysis ……………………………………… 59

Views on the Philippine Decentralization Experience ………………….. 59

Overall impression on the implementation of decentralization …. 60

Benefits to local government units ………………………………. 63

Principal problems LGUs faced and continue to face …………… 65

Respondents’ perception of decentralization ……………………. 68

Effects of Decentralization on the LGUs’ Administrative Capabilities … 69

Areas of Leadership Challenge ....................…………………………….. 70

Influencing effective and efficient delivery of basic services……. 70

Expanding public participation ………………………………….. 71

Creating an environment for subordinate responsiveness ……… 75

xi
 Implications of decentralization on the leadership challenge ….. 77

Effects of Decentralization on Organizational Structure ………............. 78

The problem of duality of service ……………………………… 78

Organizational differentiation ………………………………….. 80

Factors influencing organizational structure …………………… 86

Implications of the effects of decentralization on organizational

structure ………………………………………………… 97

Effects of decentralization on financial resources ……………………... 101

Changes in the taxing powers of LGUs ………………………… 101

The LGUs sources of revenue and access to other sources ……. 104

Other issues and continuing concerns in fiscal matters ………… 109

Implications of the effects of decentralization on the LGUs’

financial resources ……………………………………... 110

Effects of decentralization on personnel ………………………………. 113

Structure for personnel management …………………………… 113

Mechanisms for personnel management ……………………….. 113

Problems faced in personnel management ……………………… 115

Implications of decentralization on personnel ………………….. 116

Strengthening administrative capability for decentralization …………... 118

Some Suggestions to strengthen administrative capability …………….. 119

Chapter 5. Conclusions and Recommendations ………………………………. 120

Summary of findings …………………………………………………… 120

Conclusions ……………………………………………………………. 125

xii
 Recommendations ……………………………………………………... 132

Recommendations for the perceived weaknesses ……………… 132

Areas for future research ………………………………………. 137

A final note ……………………………………………………………. 139

References ……………………………………………………………………... 140

Appendices …………………………………………………………………….. 151

xiii
 List of Figures

Figures 1. Human Resource Strategies in Decentralization (Adopted from Joaquin,

2002, p. 246) …………………………………………………………………… 45

Figure 2. Framework of the Research …………………………………………………. 42

Figure 3. Data Analysis Spiral (Adopted from Creswell, 1998, p. 143) ………………. 54

Figure 4. Organizational Structure of the Provincial Governments …………............... 81

Figure 5. Organizational Chart, Provincial Government “A” …………………………157

Figure 6. Organizational Chart, Provincial Government “B” …………………………158

Figure 7. Organizational Chart, Provincial Government “C” …………………………159

Figure 8. Organizational Chart, Provincial Government “D” …………………………160

Figure 9. Organizational Chart, Provincial Treasurer’s Office, Province “A” ………..161

Figure 10. Organizational Chart, Provincial Treasurer’s Office, Province “B” ……….162

Figure 11.Organizational Chart, Provincial Treasurer’s Office, Province “C” ………..163

Figure 14. Organizational Chart, Provincial Treasurer’s Office, Province “D” ……….164

Figure 13. Organizational Chart, Provincial Veterinary Office, Province “A” ………..165

Figure 14. Organizational Chart, Provincial Veterinary Office, Province “B” ………..166

Figure 15. Organizational Chart, Provincial Veterinary Office, Province “C” ………..167

Figure 16. Organizational Chart, Provincial Veterinary Office, Province “D” ………..168

Figure 17. Organizational Chart, Provincial Planning and Development Office,

Provincial Government “A” ……………………………………………………169

Figure 18. Organizational Chart, Provincial Planning and Development Office,

Provincial Government “B” ……………………………………………………170

Figure 19. Organizational Chart, Provincial Planning and Development Office,

xiv
 Provincial Government “C” ……………………………………………………171

Figure 20. Organizational Chart, Provincial Planning and Development Office,

Provincial Government “D” ……………………………………………………172

Figure 21. Organizational Chart, Provincial Accountant’s Office, Provincial

Government “A” ……………………………………………………………….173

Figure 22. Organizational Chart, Provincial Accountant’s Office, Provincial

Government “B” ……………………………………………………………….174

Figure 23. Organizational Chart, Provincial Accountant’s Office, Provincial

Government “C” ……………………………………………………………….175

Figure 24. Organizational Chart, Provincial Accountant’s Office, Provincial

Government “D” ……………………………………………………………….176

xv
 List of Tables

Table 1. Appointive Local Government Positions…………………………………….. 36

Table 2. Scope of Taxation in the Local Governments ……………………………….. 39

Table 3. Distribution of Proceeds from Real Property Taxation ……………………... 40

Table 4. Personnel Complement Per Province Before and After Devolution ………... 88

Table 5. Total Personnel Complement as of 2006 ……………………………………. 89

Table 6. Comparative Report of Revenue and Receipts …………………………….. 105

Table 7. Internal Revenue Allocation, Provincial Share, 1992 – 2006 ……………… 107

Table 8. Provincial Share in Republic Act 7171, 1994 – 2006 ……………………… 108

Table 9. Report of Revenue and Receipts – General Fund, Province “A” ……………177

Table 10. Report of Revenue and Receipts – General Fund, Province “B” …………. 187

Table 11. Report of Revenue and Receipts – General Fund, Province “C” …………. 197

Table 12. Report of Revenue and Receipts – General Fund, Province “D” …………. 202

xvi
 Chapter 1. Introduction

Overview

Decentralization, which is generally defined as the transfer of power, authority

and resources from a central government to lower-level governments, has become the

major trend in governance in many countries over the past several decades (Bardhan,

2002). This trend is a result of pressures from poor governmental performance,

urbanization, democratic transition, shifts in international donor strategies, and societal

demands (Hutchcroft, 2001). The Sourcebook on Decentralization in Asia (2002) adds to

the list of pressures the factors identified by the Asian Development Bank (ADB) as

influencing the shift to decentralization. These include globalization creating

opportunities for governance participation; economic and social changes like

liberalization, privatization and market reforms; and change in donors’ perception on

participation concerning governance. The World Bank 1997 World Development Report

also contributes to the list of pressures the factors of technological and political changes

in response to local demands.

Countries implementing decentralization have mixed expectations and fears as the

SDC Team (SDC Guide to Decentralization, 2001) writes. Countries expect

decentralization to break up obsolete political structures and that with strong political will

to support it, decentralization can succeed. But as the SDC Team notes, political will is

“missing at the center.” There is an expectation that the democratic structure is

strengthened with the political participation of the people. However, this is not so in

actuality because of the lack of political structures in the community that would foster

participation in decision-making. There is also the expectation that with decentralization,

1
the local needs and priorities will be better reflected and governmental response would be

more efficient. In actuality, however, “there is an imbalance between the decentralization

of responsibilities and the decentralization of resources” (pp. 9-13).

The SDC Team suggests that appropriate responses can be established to reap the

benefits of decentralization. These responses can come in the form of strong political

support from the national government to strengthen the local structure, local mechanisms

to encourage maximum participation from the community that would foster the

empowerment objective of decentralization, and a reinforced local political structure with

the will to curb the problems of corruption and patronage.

Decentralization’s advantages are many. But the claims of disadvantages are also

worth noting.

Decentralization’s benefits and disadvantages. Wolman (1990) cites three

perspectives on the values of decentralization, namely: from an economic or efficiency

perspective, from a governance perspective, and from a political or distributive

perspective. From an efficiency perspective, decentralization allows local governments

greater leeway in determining local needs and preferences of their constituents thereby

making decision-making more effective in terms of the utilization of resources. From a

governance perspective, decentralization promotes greater responsiveness among policy

makers in addressing the needs and concerns of their constituents. Decentralization

allows for greater citizen participation, which can result in more robust policy initiatives,

more effective exercise of democracy, healthier and more productive national-local

interaction, and greater accountability of elected officials. From a political or distributive

perspective, a decentralized arrangement can better address the interests of the poor, the

2
minorities, the labor sector and others similarly situated. Gonzales (2002) affirms that

the increasing participation of civil society and other stakeholders such as community

organizations; religious, ethnic, women’s and youth groups; professional associations;

and donor agencies in the business of government give rise to closer partnership and

networking. The stakeholders’ active participation in governance makes them guardians

of the people, monitoring efficiency, effectiveness and accountability of local

governments.

In addition to these values, the Sourcebook on Decentralization in Asia (2002)

cites the following as resulting from decentralization: 1) increased sensitivity of

government towards local conditions and greater participation from all sectors of society

in the identification and implementation of programs and projects; 2) simplified complex

bureaucratic processes enhancing the efficiency and effectiveness of government and

inspiring the development of more creative, innovative and responsive programs; and 3)

better control of public programs at the local level with more political stability and

national unity. Hope (2000) also enumerates other advantages of decentralization such as

higher quality services provision; more managerial autonomy because of reduced central

administrative control; increased human and technological resources to meet performance

targets; empowered citizenry actively participating in decision-making, and development

planning and management; and reduced overload and congestion in the channels of

communication within the central government machinery.

While decentralization has benefits along the political, social and economic

dimensions, its implementation is beset by problems. Kulipossa (2004), citing Rondinelli

(1990), Smoke and Lewis (1996), and Manor (2001), list these problems, including 1)

3
weakness in the institutional capacity of the local level related to poorly qualified

personnel and implementing strategies, 2) central and local government conflict because

of fiscal restrictions, 3) lack of coordination among central government institutions, 4)

lack of accountability and autonomy, 5) poor incentives for local and central government

performance, and 6) poorly informed intervention by donor agencies. Kulipossa believes,

however, that if certain conditions exist in a country, the benefits of decentralization can

still be enjoyed. He identifies these conditions as 1) strong legal framework, 2) political

will, 3) substantial resources, 4) a high degree of local capacity, 5) a well-developed civil

society and a free press, 6) a well-established multi-party system with long experience

with democracy, and 7) high adult literacy.

The Philippine decentralization experiences. The Philippines has joined the move

toward greater decentralization with the enactment of Republic Act 7160, otherwise

known as the Local Government Code (LGC) of 1991. The LGC paved the way for the

transformation of the highly centralized government to a decentralized one with the

transfer of significant power, authority, and resources from the national government to

the local government units. This landmark legislation opened the gateway for “direct

participation of the people,” as noted by former President Corazon C. Aquino, under

whose watch the LGC was enacted (Message in printed copy of the LGC). The LGC

provided “a blueprint for the development of the country” to realize the vision of “people

empowerment,” according to former President Fidel V. Ramos during whose watch the

LGC was implemented (quoted in Bunye, 1998).

Decentralization in the country has a long history. As early as 1898, the structure

for local autonomy was constituted in the municipalities whose members of the

4
legislative bodies were chosen indirectly by the people and in the provinces whose

members of the legislative bodies were elected by municipal captains. This

decentralization is considered, however, more structural than substantial in the transfer of

power and authority (De Guzman & Reforma, 1993). The colonization of the country by

the Americans in the early 1900s diminished whatever gains initially achieved. By the

time the country gained its independence in 1946, the government was already a “highly

centralized unitary system” (p.36). It was only in 1959 when the first legislation,

Republic Act No. 2264 (called An Act Amending the Laws Governing Local

Governments by Increasing their Autonomy and Reorganizing Provincial Governments)

was passed, allowing more substantial taxation powers for local governance. That year,

too, Republic Act 2379 (or the Barrio Charter Act) transformed the barrios or villages

into quasi-municipal corporations with legislative and taxing powers. Further, Republic

Act 5159 (also known as the 1967 Decentralization Act) strengthened local autonomy

with the “devolution of certain political powers and administrative functions … including

the power to create positions and appoint certain provincial and city officials” (De

Guzman and Reforma, 1993, p. 37).

Efforts to pursue decentralization stopped in 1972 when then President Ferdinand

E. Marcos declared the country under the state of Martial Law. Prior to Martial Law,

however, the Integrated Reorganization Plan (IRP) of 1970 was implemented to establish

a regional system that would strengthen the central and local relations. The IRP

mandated the establishment of regional offices of the national line departments, the

organization of regional development councils to ensure the coordination of development

plans, and the inclusion of local government units in the regional development councils to

5
ensure local government participation in development planning and implementation. The

regional system, however, is not a political tier of government but merely an

administrative mechanism to facilitate the delivery of basic services to the grassroots.

The system still exists today; the regional offices of national line agencies whose services

have not been decentralized continue to deliver their services, and field offices of

decentralized agencies continue to perform certain aspects of their functions.

The passage of Republic Act 7160 or the Local Government Code of 1991 after

the collapse of the Marcos regime in 1986 dismantled the “decades-old problem of an

over-centralized politico-administrative system” of the Philippines (Brillantes, 2002,

p.131). The law ended the long-entrenched stifling structure and started the realization

of the constitutionally mandated and long-aspired-for autonomy in local governance. The

Code is revolutionary (Tapales, 1998), providing for a structure that allows greater citizen

participation (Langran, 2002). In the East Asian Region, the Philippine decentralization

initiative has become a model for other developing countries (Carino, 2000). Nolledo

(1992) stresses the importance of a truly authentic decentralization as a shared

responsibility, enabling peoples’ access to the policy- and decision-making process,

ending their passivity and eventually making them truly self reliant.

The changes brought about by the LGC to the local government units of the

Philippines can be summarized as follows (Alinio, undated):

1. The devolution of responsibility for the delivery of basic services provided

under Section 17 of the LGC in the areas of health (field health and hospital services, and

other tertiary services), social services (social welfare services), environment

(community-based forestry projects), agriculture (agricultural extension and on-site

6
research), public works (funded locally), education (school building program), tourism

(facilities, promotion and development), telecommunications services and housing

projects (for provinces and cities), and other services as investment support

2. The devolution of responsibility for the enforcement of certain regulatory

powers that include a) the reclassification of agricultural lands, b) the enforcement of

environmental law, c) the inspection of food products and quarantine, d) the enforcement

of national building code, e) the operation of tricycles, f) the processing and approval of

subdivision plans, and g) the establishment of cockpits and holding of cockfights.

3. The enlargement of the local bureaucracy because of devolution. The

devolution of basic services mentioned in #1 resulted to the transfer of functions and

responsibilities and the corresponding resources and personnel from four national

agencies considered among the largest agencies of the government, namely the

Departments of Health, Agriculture, Social Welfare and Development, and Environment

and Natural Resources. The personnel from the national government devolved to the

local governments in 1993 totaled 70,498 (Tapales, Padilla & Joaquin, 1996).

4. The grant of authority to implement organizational reforms. Consistent with

the devolution of national agencies personnel to local government units, LGUs are

empowered to determine their own organization structure and staffing pattern according

to their needs and financial capacities. Four sections of the Code provide this authority.

Section 3(b) provides for the establishment a dynamic organizational structure and

operating mechanisms to meet the priority needs and service requirements of

communities. Section 18 grants power and authority to LGUs to establish an

organization that would ensure efficient and effective implementation of plans, programs,

7
and priorities. Section 76 allows LGUs to design and implement their own organizational

structure and staffing pattern in accordance with their service requirements and financial

capability subject to Civil Service Commission standards and guidelines. Section 77

places the responsibility for human resources and development to the local chief

executives.

5. An enhanced authority to increase financial capacity. Section 18 grants power

and authority to LGUs to generate and apply resources through the creation of their own

sources of revenue, the automatic and direct release of their share in national taxes, and

their share in the proceeds from utilization and development of national wealth and

resources in their respective jurisdictions. The LGC also provides the authority to LGUs

to revise their old systems and institute reforms to increase the efficiency of their

operations.

6. The provision of legal and institutional infrastructure for expanded participation

of civil society in local governance allow for alternative forms of service delivery. Three

(3) sections of the LGC allow the LGUs to enter into joint ventures with the private

sector and other institutions to improve service delivery.

7. The institution of mechanisms for popular participation. Special bodies are

created to enhance the management of the local government units as follows: the Local

Pre-Qualification Bids and Awards Committee (LPBAC), the Local Technical

Committee to assist the LPBAC, the Local School Board, the Local Health Board, the

Local Development Council, the Peace and Order Council, and the Autonomous Special

Economic Zones.

8
 8. Decentralizing accountability in LGUs. The LGC allowed a more responsive

and accountable local government structure when it instituted the mechanisms for recall,

initiative, and referendum; and when it allowed periodic consultations with appropriate

non-government organizations (NGOs) and people’s organizations (POs) and other

sectors before any project or program is implemented.

Implementing decentralization in the Philippines is no mean feat. The political,

social, organizational, and economic make-up of a three-tiered local government structure

– provincial, municipal/city, and barangay – is as diverse as the extent of its political

subdivisions, and its cultural, demographic and ethnic orientations. The country is

politically subdivided into 79 provinces, 98 cities, 1,496 municipalities, and 40,141

barangays as of September 2006.1 Provinces and municipalities are classified either as

first, second, third, fourth, fifth, or sixth class according to the criteria of land area,

population and revenue.2 Municipalities and component cities are under the jurisdiction

of the provinces, while cities classified as highly urbanized are considered at par with the

provinces. Barangays, the smallest units of the local government, are under the

jurisdiction of the cities and municipalities in which they are located.3

This study examines the decentralization experience of the Philippines. It is not

an assessment of the extent of its implementation; nor is it intended to show whether

decentralization has been a success or a failure. It is not intended to test the validity of

certain assumptions on decentralization’s influence on democracy, citizen participation or

empowerment. Rather, it hopes to highlight the perceptions of implementers of

1
Obtained from Philippine Standard Geographic Code (PSGC) Interactive, National Statistics and Census
Bureau, retrieved on 01/24/07 at www.nscb.gov.ph/activestats/psgc/listprov.asp
2
ibid
3
ibid.

9
decentralization – officials of the local governments themselves who are at the forefront

in the implementation of decentralization – in order to create greater appreciation of what

decentralization is likely to create in the local governments. It also hopes to advance

possible new strategies of making decentralization more visible, acceptable, and

appreciated by the local governments’ constituents and other stakeholders.

Background of the Study

Decentralization studies have increased over the years and have expanded in

scope from single-country studies to comparative nation-state studies. They have also

increased in the depth of their analyses from cross-regional assessments to municipal

government assessments, and from generalized societal implications to specific

functional areas of different sectors (Gomez, 2003). In Gomez’s view, the assessment of

the effectiveness of decentralization has spanned a diverse array of subjects including

studies done on the political logic of decentralization; the economic, political, and policy-

making consequences of decentralization; the institutional and bureaucratic obstacles

limiting the effectiveness of decentralization.

Ziblatt and O’Dwyer (2003) studied sixty-eight countries testing the relationship

between decentralization and two indicators of quality governance namely efficiency and

effectiveness. They found no substantial impact produced by decentralization on

underdeveloped economies, but found a substantial influence on wealthier countries.

Falleti (2004) also examined the consequences of decentralization in transferring power

to different levels of government in four Latin American countries: Columbia, Brazil,

Mexico, and Argentina. She found that the impact of power distribution among levels of

government varies from one country to another even if the reforms implemented are

10
apparently similar. Kelleher & Yackee (2004) evaluated the influence of devolution on

perceived and actual policy outcomes in the USA using 100 counties of North Carolina.

Testing the assumption that devolution of power to lower level governments “allows

public policy choices to be delegated to officials who are more in tune with local norms

and values and thus better able to solve policy problems,” they found that devolution

does matter in terms of the effectiveness of policy making, but in terms of the actual

impact on policy outcomes, their study revealed mixed results (p. 254).

Studies were likewise undertaken in the Philippines to determine whether the

objective of empowering local governments has been achieved after the implementation

of the Local Government Code (LGC) of 1991. Rood (1998) writes about these

studies undertaken through a series of “Rapid Field Appraisals”4 from 1992 to 1996. The

appraisals monitored the progress of the actual implementation of decentralization for the

timely information of decision makers. The year 1992, Rood states, was characterized by

a “wait and see” attitude among local officials. The implementation of decentralization

took off only in 1993 when the personnel of the national government agencies were

slowly absorbed in the local government structure as the functions, responsibilities, and

resources from the national agencies were being devolved. At the same time, the Internal

Revenue Allotments (IRA) from the national government was distributed to support the

cost of devolution. The local governments began to stabilize in 1994 with the IRA

transfers becoming “more predictable and automatically released” (p. 6). By 1995, local

governments began to pick up momentum for innovation and action and showed changes

by 1996 in spearheading developmental projects in coordination with non-governmental

4
Note 9 in Rood’s (1998) article “Decentralization, Democracy, and Development” cited in the
Bibliography

11
organizations (NGOs). Rood noted a shift in management practice from a dole-out/hand-

out mentality to more program/project-oriented mentality as well as greater assertiveness

of local governments through the League of Provinces, the League of Cities, and the

League of Municipalities.

Rood (1998), however, notes some doubts on whether the local governments and

even national governments are able to handle the complex process of devolution. He

posits that for local governments to succeed in advancing democracy and development in

the country there must be a (1) trusted process of selecting local officials, (2) “vital civil

society” and “energetic media” participation in decision-making, (3) adequate resources

to invest in development efforts, (4) healthy relationship between local organic personnel

and national devolved personnel, and (5) higher degree of coordination among

stakeholders in the consideration of development efforts.

While Smoke (2005) acknowledges that the Philippine decentralization initiative

has the “strongest history of democratic decentralization” in the East Asia region (p. 26),

White and Smoke (2005) also note the weakening of service delivery because of the lack

of incentives and human resource capacity to support the process of decentralization.

They recommend the design of intergovernmental reform systems that include

management and accountability systems to address the problem of weakening service

delivery.

Philippine decentralization experts perceive the same problems identified above.

In response, Padilla (1992) recommends the design of appropriate organizational

structure, the development and establishment of a personnel system that determines

manpower needs and competence required for a successful implementation of

12
decentralization, and the adoption of more systematic and effective operational

procedures. De Guzman and Reforma (1993) also call for a greater effort on the part of

the national government to increase the administrative capability of local governments

identifying structure, personnel, financial resources, and leadership as the dimensions of

administrative capability that need further development.

Joaquin (2002) cites the findings in the 1998 World Development Report that

local governments may not have been adequately prepared, particularly administratively,

to undertake the delivery of basic services. The report indicates skill deficit in poorer

areas, the inadequate knowledge of planning, programming, and budgeting, and the lack

of political will.

The foregoing raises the question of whether the decentralization undertaken in

the Philippines has achieved the goals contemplated by the LGC or whether the

Philippine decentralization experience is a case of the country having “tried to ‘do too

much too quickly’” as Smoke observed (Smoke, 2002, p. 37). Or has decentralization

been pursued largely for political reasons, with economic reasons “secondary, if not

marginal” as observed in the case of Indonesia and the Philippines (Campos and

Hellman, 2005, p.237)?

Purpose of the Study

Most of the decentralization studies undertaken in the Philippines focus on the

benefits and advantages from an overall societal perspective rather than in terms of its

administrative aspects. Levi (1996) terms these researches “society-centered” and

comments on the lack of research focusing on other important actors, notably those in

government. There is little information on how local government actors – officials and

13
employees – react to the implementation of decentralization and how they perceive the

effects of decentralization on local governments, specifically on their administrative

capability. Administrative capability is an important factor to a meaningful

decentralization initiative. It is thus necessary for implementers – the decentralization

actors – to have greater understanding and better appreciation of these administrative

requirements – leadership, organizational structure, financial resources, and personnel.

This study, therefore, aims to fill in this gap in the literature on local government

decentralization. The perception of officials and employees of the local governments and

their experiences and insights could provide a realistic and holistic context of

decentralization in the local government. A study of the implementers’ perceptions may

either confirm or validate the assumptions on decentralization or generate theories that

are applicable to the Philippines and to other countries with similar conditions.

The Research Problem

This study explores the perceptions of appointive local government officials on

decentralization and its effects on administrative capability. Specifically, the study

analyzes how appointive local government officials at the provincial level view and

experience decentralization as practiced in the Philippine local government units (LGUs).

It looks into the advantages and disadvantages of decentralization and how it has affected

the administrative capability of the provincial governments. The primary and subsidiary

research questions are:

1. What do appointive local government officials perceive as the effects of

decentralization on LGUs’ administrative capability?

14
 a. What leadership challenges did appointive local officials face in the

implementation of decentralization?

b. In what ways has decentralization affected the LGUs’ organizational

structure?

c. How has decentralization affected the financial resources of LGUs to

implement the devolved functions?

d. How has decentralization affected the LGUs’ personnel resources?

Significance of the Study

This study is expected to generate information and inferences that are useful in

the following ways:

1. Providing a conceptual understanding of decentralization, leading to better

responses by local government officials to the decentralization efforts and therefore

achieving its objectives. Decentralization is one answer to the clamor for local

development. Bringing decisions to the grassroots level has increased government’s

sensitivity to local conditions and generated greater participation in program

identification and implementation from all sectors of society. The increased level of

participation of actors outside government has also changed the governance experience in

the local governments. Development need not be the responsibility of government alone;

it is instead a shared partnership with other sectors in society. For development to be

more meaningful, the stakeholders must participate in determining what is truly important

and necessary in realizing their aspirations.

2. Generating proposals or recommendations for improving local government

units’ administrative capability to implement decentralization. Marshall and Rossman

15
(1995) state that one of the many challenges to qualitative research is whether it is able to

bring about new knowledge that will be helpful in influencing both policy and practice.

This study hopes to advance knowledge on how to increase local governments’

administrative capability towards more effective decentralization in the Philippines.

While qualitative research is based on perceptions and suffers by virtue of its

“subjectivity and its susceptibility to informal influence,” Inkson, et al (1967) argue that

from a qualitative research perspective, perceptions are important especially when they

concern the “formal situation” of organizations (p. 37). Also, as Mason (2002) points

out, one of the strengths of qualitative research lies in its ability to generate insights about

complex situations making analysis more holistic than merely “charting surface patterns,

trends and correlations” (p. 4).

3. Creating better understanding of the effects of changes in administrative

capability on local governments’ capacity to implement decentralization. This study

contributes to the initiative of the Philippine Government to revise the Local Government

Code of 1991. White and Smoke (2005) note that past attempts had “borne little fruit” (p.

8). A recent order directing the Department of Interior and Local Government (DILG) to

conduct a strategic review on decentralization and devolution was issued by Philippine

President Gloria Macapagal-Arroyo under Executive Order No. 444. The review would

cover the extent of the devolution of powers and transfers of assets, resources and

personnel to the LGUs.5 This present study, which focuses on the local governments’

administrative capability, responds directly to the concerns covered by the projected

5
Taken from a news item dated Sept. 14, 2005, DILG, DBM, LG Leagues tie up in conduct of strat review
on decentralization and devolution, from the DILG website. Retrieved at http://www.dilg.gov.ph on Oct. 2,
2005.

16
strategic review. Insights from this study may also inform future studies conducted by

other developing countries undertaking decentralization.

4. Explaining some implications of public administration and management theory

for organizational change. Decentralization in the Philippines has resulted in significant

changes in the local governments. Local government roles have expanded and

consequently public expectations for governmental efficiency and effectiveness have

become greater. Those charged with satisfying these expectations must recognize the

need to forge effective relationships not only with local government personnel, but also

with other units of government as well as non-governmental actors and organizations.

The issue now is whether decentralization has changed the perspectives of appointive

local government officials with respect to its administrative capabilities. As Armenakis,

et al (2001) suggest, “paradigm change is the ultimate goal of all change efforts – people

have to think differently about the organization and their role in it” (p.631). With the

data gathered on the dimensions of administrative capability – specifically, leadership,

organizational structure, financial resources, and personnel – local government officials

could be guided in effecting the desired changes towards the effective implementation of

decentralization.

A Guide to the Chapters

This dissertation examines the perceptions of local government appointive

officials on decentralization and its effects on the local governments’ administrative

capability in terms of leadership, organizational structure, financial resources, and

personnel. Chapter 1 has discussed the rationale for this research by summarizing the

decentralization experience in the Philippines.

17
 Chapter 2 reviews the literature on decentralization and the dimensions of

administrative capability identified earlier upon which the analysis will be made.

Chapter 3 presents the methodology used in conducting the study. It identifies the

site of the study, the respondents of the study, the data collection instruments and the

tools for data analysis.

Chapter 4 presents the findings generated from the interviews conducted and from

the various government documents examined as secondary sources of data. Individually,

the effects of decentralization on the four dimensions of administrative capability –

leadership, organizational structure, financial resources, and personnel, as perceived by

the respondents will be discussed.

Finally, Chapter 5 summarizes the study, presents the recommendations for

improving the administrative capability of local government units, and discusses

theoretical implications on the study of public administration, management, and

organizations.

18
 Chapter 2. A Review of Literature on Decentralization and Administrative Capability

The Concept of Decentralization

The concept of decentralization has been defined in different ways, creating

ambiguity and confusion in understanding its meaning and essence. This confusion,

Schneider (2003) states, results from various researches’ conflating decentralization with

other concepts with different meanings. In Fesler’s (1965) view, the confusion

surrounding decentralization can be attributed to three problems, namely (1) the use of

language dichotomizing centralization and decentralization, thus presenting conflicting

positions about the concept, (2) the weakness in the indices used to measure

decentralization, and (3) differentiating the degrees of decentralization occurring in a

single country at a given time.

Generally, decentralization is discussed with reference to the relationship between

national governments and local governments. De Guzman and Padilla (1992) discuss

decentralization in terms of the dispersal or allocation of authority and responsibility or

powers and functions where national agencies share responsibility or authority to lower

level agencies. Fleurke and Willemse (2004) consider decentralization a very significant

factor in the attainment of local autonomy. They contend that the more decentralization

is implemented, the higher is the extent of local autonomy. Local autonomy, however, is

defined in several ways, often referring to the capacity of a nation, a state, or local

government to administer and run its own affairs. Goldsmith (1995) uses the terms “self-

governing and independence” and Berman (u.d.) uses “local home-rule” to highlight the

roles played by local officials in an elective political system.

19
 Decentralization is also discussed in relation to local governance. Hope (2000)

states that decentralization in local governments provides for a new way of looking at

local governments not merely as extensions of the central government but also as

bureaucratic structures equipped with their own powers and functions. Local governance

not only refers to the formal structures and activities of government but also includes

other mechanisms, systems, and institutions by which the goals of government may be

realized. John (2001) cites what Rhodes (1997) typifies as network-type structures of

decision-making which are “self-organizing, inter-organizational networks characterized

by interdependence, recourse exchange, rules of the game and significant autonomy of

the state” (p.9). In a decentralized arrangement, a political structure such as the local

government also seeks the same objectives of flexibility, coordination, participation,

interdependence, and collective action among other sectors.

Ocampo (1992) contends that decentralization and local autonomy may be better

understood against the opposite tendency of centralization. Centralization is defined as

the concentration of authority, responsibility, and ability in a central government, which

may share such authority, responsibility and ability with local units as implementers of

central decisions. In a highly centralized system, seldom is autonomy exercised by local

units. Ocampo (1992) states that decentralization may require a certain degree of

centralization and the two processes – centralization and decentralization – would have to

be balanced in some optimal combination.

Porter and Olsen (1976) affirm that a balance between centralization and

decentralization may provide governments with sound arguments that support policies

and programs of decentralization. They view both centralization and decentralization as

20
having values of their own: promoting participation, access and responsiveness for the

latter; and efficiency, professionalism and use of advanced or expensive technology for

the former. Kulipossa, (2004), drawing from the works of Fesler (1965) and Wolman

(1990), also views centralization and decentralization as processes that represent a

“continuum, not a dichotomy.” The challenge for all governments, he states, is “to strike

a balance between centralization and decentralization tendencies that satisfies the needs

and aspirations of both central and local governments” (p. 772).

Decentralization, however, is better understood along its three core dimensions of

administrative, fiscal, and political (Ziblatt and O’Dwyer, 2003). A fourth dimension,

economic decentralization, also surfaces in other materials on decentralization and is

differentiated from fiscal decentralization (Sourcebook on Asian Decentralization, 2002;

Furniss, 1974).

These core dimensions are often referred to also as forms of decentralization.

Core dimensions of decentralization. Discussing the core dimensions of

decentralization individually leads one to think that they are distinct and separable.

Indeed, as Schneider (2003) states, the dimensions of decentralization are treated as

“distinct and separable” in each of the theories of fiscal federalism, public administration,

and political science. However, while these dimensions are “substantially different,” they

are interrelated in their causes and effects.

The following paragraphs explain the core dimensions of decentralization – fiscal,

administrative, and political.

a. Fiscal decentralization. Fiscal decentralization refers to the transfer of funds

from a central entity to a lower or non-central entity. But more than the actual transfer of

21
financial resources, fiscal decentralization implies a transfer of power and authority to

generate resources for programs, projects and initiatives (Schneider, 2003) and the

transfer of authority to decide on expenditures (Sourcebook on Asian Decentralization,

2002). It also refers to the set of policy reforms given to subnational governments to

address the revenue issues (Falleti, 2004).

In the case of the Philippines, decentralization allows local government units

substantial power in managing their fiscal resources. The transfer of power to local

governments to create their own sources of revenue provides appropriate incentives to

support local revenue generation and resource allocation at the local level (Manasan,

1995).

b. Administrative decentralization. Administrative decentralization refers to the

transfer and redistribution of responsibility and authority to exercise decisions on

planning, financing and managing of transferred programs (Schneider, 2003). It is also

characterized as a process of policy transfer for subnational governments to administer

and deliver social services (Falleti, 2004). The implementation of administrative

decentralization can be accomplished through either deconcentration or delegation

(Sourcebook on Asian Decentralization, 2002), or devolution (Schneider, 2003).

Deconcentration involves the dispersal of authority to decide on the management

and financing of responsibilities given by the central agency. Deconcentration only shifts

responsibility from central-level to the lower-level offices, with the central government

retaining supervision over transferred responsibilities. In Schneider’s (2003) terms, what

changes is only the “spatial and geographical distribution of authority, but does not

significantly change the autonomy of the entity that receives the authority” (p. 38).

22
 Delegation affords a slightly greater degree of autonomy, yet lower-level

governments also remain accountable to the central government. Porter and Olsen (1976)

state that this delegated authority may be taken back or modified by the delegating

authority at its own will.

Devolution is accorded the greatest level of autonomy compared to the two other

categories of administrative decentralization. It takes on a political shade, where local

governments in which powers and authorities are transferred need to have elected

officials in both the executive and legislative branches, with the latter empowered to pass

laws and ordinances. Local governments are also equipped with specific taxing powers

over a defined jurisdiction (Sourcebook, 2002).

In Porter and Olsen’s (1976) view, administrative decentralization focusing more

on the subtleties of functional and professional responses to shared responsibilities can be

prone to the problem of “horizontal integration,” that is, the coordination of activities of

several agencies within the same geographical area. This is distinguished from political

decentralization, which suffers from the problem of “vertical integration,” that is, the

difficulty of marshalling the resources and expertise of bureaus and agencies.

c. Political decentralization. Political decentralization is defined as the transfer

to a subnational body or quasi-autonomous local government the authority for decision-

making, finance and management of decentralized activities. Political decentralization

requires changes in laws, a strong legislature, duly created local political units, effective

interest groups participating in the affairs of government, and legal geographical

boundaries within which public functions are performed (Sourcebook on Asian

Decentralization, 2003, citing WB Decentralization Thematic Team). Representation in

23
more common terms refers to political decentralization. Representation could take the

form of participation of civil societies, non-government organizations, interest groups;

the exercise of the right of suffrage; or in such systems where public interests are directly

negotiated with the state bureaucracy (Schneider, 2003).

d. Economic decentralization. Economic decentralization, also called market

decentralization, refers to the transfer of certain governmental functions to the private

sector as in the case of privatization and deregulation (Sourcebook on Asian

Decentralization, 2002). Privatization is carried out through contracting activities for the

delivery of basic services, or divestment of government interests through build-operate-

transfer schemes. Deregulation eases out the control of government on certain

monopolies and allows private enterprises to engage in previously government-run public

services by removing some of the legal constraints. Economic decentralization promotes

non-government sectors’ participation in functions, which used to be the domain of

government (Sourcebook on Asian Decentralization, 2002).

Dimensions of decentralization in the Philippine context. Brillantes (2002)

identifies the core dimensions of decentralization that are implemented in the Philippines

as deconcentration, devolution, and debureaucratization.

Deconcentration is essentially administrative decentralization. It involves the

transfer of functions from a central office to a lower administrative unit, with the central

government retaining final and substantive authority. Devolution, which involves the

transfer of power and authority to local political units having their own elected local

executives and elected legislative bodies that pass laws and ordinances, is political in

nature. These local government units have geographically defined jurisdictions and are

24
granted the power to enact laws or to exact specific taxes. Debureaucratization entails

the transfer of authority and responsibility to non-governmental entities as in

privatization and deregulation and is thus economic in nature. The term devolution is

used in the more general context of decentralization in the Philippines – whether political,

economic or administrative.

The choice of decentralization form. Each of the forms of decentralization has its

strengths and limitations. Porter and Olsen (1976) contend that the values to be achieved

will be affected by whichever form is chosen for implementation. They claim that

political decentralization may heighten the ability of local governments to respond to

local demands and may widen the opportunity for citizen participation, yet they concede

that political decentralization may also reduce the effectiveness of the delivery of desired

services. As a consequence, the confidence in government’s ability to carry out

government activities may decrease. In contrast, if administrative decentralization is

implemented, it is possible for local governments to respond to both national and local

needs with the integration of professional expertise across levels while allowing for

necessary adjustments in local implementation. Porter and Olsen (1975) caution,

however, that with the lack of a mechanism to foster integration, the localization of

implementation may result in national or central governments’ becoming less responsive

to local officials and running programs in a “politically irresponsible manner” (p. 75).

Likewise, a choice of one dimension may be affected in alternative ways by

another dimension. Schneider (2003) states that local governments can either implement

greater administrative decentralization (depending on the extent of fiscal

decentralization), or less administrative decentralization (if central governments impose

25
bureaucratic or regulatory controls to counteract the release of resources to local

governments). Falleti (2004) claims that the type of decentralization implemented would

depend on the type of authority delegated in the set of policy reforms transferred –

administrative, fiscal, or political policies. But while Schneider (2003) speaks of the

three categories as distinct and separate, Falleti explains the transfer of responsibilities,

resources and authority in decentralization as a process in which one category of

decentralization can happen first with the two others following. This is Falleti’s (2004)

sequential theory of decentralization, where the pattern of decentralization is likely

dictated by the prevailing jurisdictional interest – national or subnational. The sequence

implies that in the stages of implementation the “first round of decentralization”

determines the order of reform to follow. If subnational interests are at the core of the

first round of decentralization, local or subnational leaders will find themselves with

better political capacities and power to influence the results of the decentralization

process. Fiscal decentralization is likely to follow political decentralization with

administrative decentralization coming last. This pattern denotes a shifting of power

creating a greater degree of autonomy for subnational officials. However, if the interests

of the national level form the core in the initial process of decentralization, the sequence

is likely reversed, with administrative decentralization coming first, fiscal

decentralization second and political decentralization last. This reversed sequence, Falleti

states, points to the national executive “seek[ing] to divest itself of expenditure

responsibilities first and foremost” and would consider whether to transfer or not the

resources necessary to carry out the responsibilities, or to retain political authority (p.5).

26
 Whether the decentralization experience of the Philippines reflects a sequence of

the core dimensions as presented by Falleti or is more appropriately characterized by the

dimensions treated as distinct and separable by Schneider will be determined in

subsequent chapters.

The Dimensions of Administrative Capability

What, then, are the necessary ingredients of a successful and meaningful

decentralization initiative? Any satisfactory answer requires an assessment of resources

needed by lower- level governments. De Guzman and Reforma (1993) identify four such

requirements as dimensions of administrative capability: (1) leadership, (2) structure, (3)

financial resources, and (4) personnel.

Leadership – the first dimension of administrative capability. De Guzman and

Reforma (1993) define leadership, in the context of decentralization, as the ability not

only to deliver services efficiently and effectively with scarce resources, but also to

expand public interest in programs locally administered and to obtain financial and

technical support from other sources. Leadership, however, defies such a straightforward

definition. Fleishman, et al (1991), for example, claim that the current literature includes

about “65 different classification systems” of leadership. Leadership may be construed in

several ways. Northouse (2004), citing Bass (1990), refer to leadership as, variously, a

group process, a combination of special traits or characteristics, an act or behavior, a

power relationship, and an instrument of goal attainment.

As a group process, leadership centers on the role of the leader in facilitating

group change and in representing “the will” of the group. As a combination of special

traits and characteristics, leadership implies that attributes of personality influence others

27
to respond and do what needs to be done. Leadership as an act or behavior refers more to

what the leader actually does to steer the followers to follow. As a power relationship,

leadership distinguishes the leader’s role in influencing follower behavior and in using

that influence to achieve common goals. As an instrument to achieve goals, leadership is

seen in the way the leader shapes the direction of the group through “vision setting, role

modeling, and individualized attention” (Northouse, 2004, p. 2). Leadership, from a

capability or skills perspective, emphasizes the need to have the appropriate knowledge

and skills to carry out effectively the leadership role.

Leadership is also viewed in the context of management. The expectation of goal

achievement requires that the leader not only provide the direction for followers but also

to create the conditions under which goals can be achieved. This expectation, according

to Fairholm (1998), implies that the leader’s role is one of managing people and

resources. Management is thus a part of leadership but that leadership encompasses a

broader perspective. Citing Kotter (1990), Behn (1998) points out three activities in

which leadership and management is exercised, but which require different ways in

which to accomplish them. The three key activities – “deciding what needs to be done,

creating networks of people and relationships that can accomplish an agenda, and then

trying to ensure that those people actually do the job” – are implemented by managers,

while leaders implement them by creating a motivating and inspiring environment in

which these activities are accomplished (p. 212).

Effective decentralization, it would appear, requires a balance between managing

and leading. The view of leadership as focusing on the formal structures of authority,

responsibility and prescription of management functions must also include a

28
consideration of informal norms, symbols, rules, beliefs, and values that influence

organizational processes and outcomes (Prachett and Wingfield, 1996).

Leadership theories and models have evolved over the years from the more

traditional top-down relationship between leaders and followers to more contemporary

views emphasizing those personal qualities and behaviors that influence the leader’s

effectiveness. In more recent years, studies have highlighted the ethical challenges to

leadership.

Researches supporting the idea that leadership effectiveness can be achieved by

prescribing desired behavior from the leader are represented in the studies of Blake and

Mouton, and Hersey and Blanchard, to name only a few (Barrow, 1977). These

researches identified variables by which to measure leadership effectiveness. Blake and

Mouton’s managerial grid is popular for determining whether a leader’s focus is chiefly

on task variables or on relationship variables. Hersey and Blanchard’s Life Cycle Theory

of Leadership assumes that a leader’s effectiveness changes as the subordinate’s level of

maturity changes. The leader becomes more considerate and the leader’s focus on task

decreases as the subordinate demonstrates an increased level of maturity.

The ethical dimension of leadership also surfaced in more recent times due to

highly publicized corporate scandals. The leader’s position, being one of power and

influence, is susceptible to the challenge of maintaining the standards of ethics and

morality not only for himself/herself, but also in consideration of the effects of his/her

actions and behaviors upon others. As Johnson (2005) has said, “ethics is the heart of

leadership … [w]hen we assume the benefits of leadership, we also assume ethical

burdens” (p. 4). Leaders find themselves in relationships that require them to be

29
constantly aware that the position of power and influence carries with it consequences

that can be both rewarding and damaging. O’Toole (1995) credits the leadership style of

four USA Presidents whom he referred to as “The Rushmoreans,” for the way in which

they carried the cloak of their office. While they, themselves, were faulted in several

ways, O’Toole recalls, “they listened to others, encouraged dissenting opinions among

their closest advisers, granted ample authority to their subordinates, and led by example

rather than power, manipulation, or coercion” (p.21).

Organizational structure – the second dimension of administrative capability.

The need to restudy organizational structure as a dimension of administrative capability

in local governments of the Philippines is emphasized by Padilla (1992). He examines

three aspects of this second dimension of administrative capability, namely: the problem

of duality of government service, organizational differentiation, and the contextual

factors influencing organizational structure.

a. The problem of duality of government services. De Guzman and Reforma

(1993) define the problem of duality of government service as the simultaneous

performance of the same functions by both national government field offices and local

government entities. Under the structure created by devolution, national agencies whose

functions have been devolved to local government units were allowed to maintain field

offices. The personnel not devolved to the local governments continued to perform

functions that duplicated those already being performed by the local government units.

De Guzman and Reforma (1993) state, “This duplication appears to be endemic in most

agencies; there are field personnel of the different national agencies operating side by

side with those of the various local government units” (p. 59). This is observed, likewise,

30
by White and Smoke (2005), who note the ambiguity in the distribution of functions

across levels of government created by the presence of clauses in the LGC that allow

both national and local governments to initiate devolved activities. Ponce (1994)

recommends that national agencies play a supportive role in facilitating the work of local

governments.

A review of the provisions of the LGC shows the different functions that seem to

create the problem of duality of government services. These are the functions devolved

from Department of Agriculture (DA), Department of Environment and Natural

Resources (DENR), Department of Health (DOH), and Department of Social Welfare and

Development (DSWD). In the case of infrastructure, both a Provincial Engineer’s Office

(PEO) and a District Office of the Department of Public Works and Highways (DPWH)

exist in the provinces, the latter sometimes operating two or more district offices,

depending on the number of congressional districts the province has. While the local

government units perform the functions as mandated by devolution, they are directed,

likewise, to implement national policies (Padilla, 1992). Padilla notes that “This

relationship of the local government offices with the national departments sometimes

poses some difficulty to the former in adopting certain internal management and

procedural reforms, especially when those reforms need clearance, if not approval, by the

central government departments” (p. 183). The problem of duality of government service

can be traced from the long-entrenched central control embedded in the political set-up of

the Philippines delimiting the powers that may be exercised by local governments (Cabo,

1998).

31
 The decentralization law that was passed in 1991, Republic Act 7160, restructured

the local governments and gave the responsibility for the development of sound

organizational structures in the local governments to the local chief executives. The law

provides for positions considered as mandatory, and those, which can be created

optionally. The reorganization of the LGUs to implement the mandate of the LGC was

guided by agencies such as the Department of Interior and Local Government (DILG),

the Civil Service Commission (CSC) and the Department of Budget and Management

(DBM). The DILG provided guidelines on the LGU organizational design and staffing

pattern. The CSC oversaw the implementation of personnel policies and standards for the

hiring and placement of personnel. The DBM provided guidelines on position

classification, occupational groupings and salary standards.

b. Differentiation in organizational structure. Sajo, Santiago, and Joaquin

(1998) define structure as “the framework or arrangement that links the different parts of

the local government organization [and] guides the roles of different members of the

organization” (p. 9). Ranson, Hinings, and Greenwood (1980), likewise, refer to

structure as constituting various activities and processes, roles and procedures. They use

the term “framework of the organization” to refer to the pattern of interaction that occurs

in the organization. Early researches on organization structure sprang from Weber’s

theory of bureaucracy in which organizations were referred to as “network[s] of authority

distribution” (Bittner, 1965, p. 243). To function efficiently, in Weber’s view,

bureaucracies must be characterized by an organizational structure that has six attributes,

namely: a well-defined hierarchy of authority, division of labor based on functional

specialization, rules pertaining to rights and duties of positions, procedures for dealing

32
with work situations, impersonality of interpersonal relations, and employee selection,

and promotion on the basis of technical competence (Reimann, 1974, p. 693).

Researches on organizational structures conducted by the Aston team in the 1960s

identified the primary dimensions of organizational structure, namely, specialization,

standardization, formalization, centralization, configuration, and flexibility (Pugh,

Hickson, Hinings, and Turner, 1968). Blau’s (1972) formal theory of organizational

differentiation considers several dimensions constituting structure – spatial, occupational,

hierarchical, and functional. In later years, Hsu, Marsh, and Mannari (1983) explored the

dimensions of organizational structure in Japan focusing on the relationship of

organizational context, organizational complexity, and bureaucratic controls. Although

these researches used differing methodological approaches, Hinings, Pugh, Hickson, and

Turner (1967) consider the concept as developed by Weber “impervious to [other]

research findings, remaining as something inviolate” (p.65).

The primary dimensions of organizational structure defined by Pugh et al (1968)

are discussed individually as follows:

1) Specialization: the distribution of tasks among positions in an organization

with someone assigned to perform the specific activities (Hinings et al, 1968; Pugh et al,

1968). Sajo et al (1998) consider specialization as the performance of a job repeatedly,

with task design and job design each determined by the different activities related to a

task.

2) Standardization: the extent to which procedures are explicitly defined. In

Reimann’s (1974) study, standardization was referred to as “functional specificity,”

denoting the extent to which highly specialized requirements are spelled out in formal job

33
descriptions for various functions. Pugh, Hickson, Hinings, MacDonald, Turner, and

Lupton (1963) consider two aspects of standardization: standardization of procedures and

standardization of roles. The former refers to operating procedures for decision-seeking,

decision-making, information conveying, and decision implementation. The latter refers

to the definition of roles and qualifications, performance measurement and reward

system, and identification of titles for the office and symbols of role status.

3) Formalization: official rules and procedures (Pugh et al, 1968). Formalization

also refers to the extent of documentation used in decision-making (Sujitparapitaya,

2000). In Reimann’s (1974) terms, formalization can refer to the extent of role

definition contained in various formal documents, such as “information booklets,

organization charts, job descriptions, policy manuals and the like” (p. 697).

4) Centralization: the locus of authority for decisions in the organizational, which

distinguishes the extent of authority located at each level. Pugh et al (1963) consider

several factors affecting centralization, as follows: 1) the location of authority within the

structure, 2) rules promulgated limiting discretion of subordinates, 3) review procedures

and control systems thoroughness and frequency, and 4) legitimate availability of

relevant information.

5) Configuration: the “‘shape’ of the role structure” through organizational roles

and functions are assigned. The organizational chart also shows the span of control

exercised in each level of the hierarchy (vertical arrangement) and the workflow of

activities (horizontal arrangement).

34
 6) Flexibility: how much formalized standards and procedures can be subject to

change at certain points in time. Flexibility also refers to the ability and willingness of

the organization to respond to environmental changes.

Blau and Schoenherr (1970) identify two aspects of organizational differentiation

– vertical and horizontal. Vertical differentiation refers to hierarchical levels and

horizontal differentiation refers to functional divisions in organizations.

In the Philippines, the Local Government Code of 1991 prescribes mandatory

offices in the local governments and provides leeway for the creation of optional offices

as shown in Table 1 below. The Local Government Code effectively reorganized the

local governments and required levels of positions and functions of divisions, sections

and units of the different offices to be defined. How much differentiation resulted from

the reorganization of the local governments’ organizational structure is described in later

chapters.

c. Factors influencing the context of organizational structure. Further studies

focus on the contextual factors influencing organizational structure. Context refers to a

“setting within which structure is developed” (Pugh, Hickson, Hinings, and Turner, 1969,

p. 91). The “setting” includes origin and history, ownership and control, size,

technology, location, resources and dependence (Pugh et al, 1969). For the purpose of

this dissertation, only the factors of size, technology, organizational charter and

interdependence will be treated.

1) Size. Blau (1970) says that increases in organizational size generate

increases in organizational differentiation, but at a decelerating rate. Size

differentiates the structure four ways: spatial, occupational, hierarchical, and

35
 Table 1. Appointive Local Government Positions
(Source: Title V, LGC of 1991)

Mandatory Positions Remarks*

Secretary to the Sanggunian Common to provinces, cities, and municipalities
Treasurer Common to provinces, cities, and municipalities
Assessor Common to provinces, cities, and municipalities
Accountant Common to provinces, cities, and municipalities
Budget Officer Common to provinces, cities, and municipalities
Planning and Development Coordinator Common to provinces, cities, and municipalities
Engineer Common to provinces, cities, and municipalities
Health Officer Common to provinces, cities, and municipalities
Civil Registrar For cities and municipalities
Administrator Common to provinces and cities
Legal Officer Common to provinces and cities
Agriculturist For provinces
Social Welfare and Development Officer Common to provinces and cities
Veterinarian Common to provinces and cities
General Services Officer Common to provinces and cities

Optional Positions
Assistant Treasurer Applies to provinces, cities, and municipalities
Assistant Assessor Applies to provinces, cities, and municipalities
Administrator Optional for municipalities
Legal Officer Optional for municipalities
Agriculturist Optional for cities and municipalities
Social Welfare and Development Officer Optional for municipalities
Environment and Natural Resources Officer Optional for provinces, cities, and municipalities
Architect Optional for provinces, cities, and municipalities
Information Officer Optional for provinces, cities, and municipalities
Cooperative Officer Optional for provinces and cities
Population Officer Optional in the LGUs; if existing before the Code,
may be maintained by provinces and cities
Within 5 years from Code's effectivity, after
Which position shall be rendered optional

* Proper level of LGU appended before position title - i.e. Provincial Treasurer, etc.

functional. Spatial differentiation is characterized by expansion into branches or

offices. Occupational differentiation shows the grouping of positions that divides

36
the concerns of the organization. Hierarchical differentiation denotes the number

of levels in organizational hierarchy. Functional differentiation shows the number

of divisions existing in the organization.

Size, in Blau’s study, refers to the organization’s number of employees.

Kimberly (1976), however, notes that size may also refer to the organization’s

physical capacity, the number of personnel available, the number of

organizational inputs and outputs, and its available discretionary resources.

2) Technology. Technology is defined as techniques needed in order to

provide goods and services (Pugh et al, 1963, 1969). Similarly, Hickson, Pugh,

and Pheysey (1969) consider technology as encompassing three concepts:

operations, materials, and knowledge. Operations technology refers to the series

or sequence of activities that make up a work flow to produce an output or result,

and consists of four sub-concepts, which include 1) the automation of equipment,

2) the rigidity of the workflow sequence, 3) the specificity of evaluation of

operations, and 4) the continuity of the units of throughput. Materials technology

refers to objects, in whatever state, that are used in the performance of an action

while knowledge technology refers to the characteristics of logic or analytic

process used by the individual in the sequence of the workflow.

Harvey (1968) states that the importance of organizational technology as it

relates to organizational structure has not been widely researched. In a study of

43 industrial organizations, he described the potential use of technology as an

investigative tool on a number of “organizational processes, including those of

decision-making and patterns of inter-organizational conflict.” (p. 247).

37
 3) Organizational charter. This variable helps to explain differences of

goals, roles, and procedures in an organization. It explains why an organization

exists and what it hopes to achieve or provide for its customers or clients. In

LGUS, the charter is usually referred to as the statement of Vision, Mission,

Goals, and Objectives.

4) Interdependence. This variable relates to the relationships within the

organization’s internal structure and with the organization’s social environment –

other institutions and stakeholders.

Financial resources – the third administrative capability dimension. The

financial aspect of administrative capability is a crucial requirement for the achievement

of devolution or decentralization objectives (De Guzman and Reforma, 1993). The

World Bank Report (Soriano, Steffensen, Makayan and Nisperos, 2005) underscores the

need for a well-functioning financial system for the decentralized arrangement of

governance in the Philippines.

Book II of the Local Government Code (LGC) of 1991 specifies the taxing power

as well as the principles and procedures governing fiscal administration in Philippine

local governments. There are two major sources of revenue for local government units

(LGUs).

a. Revenue from own sources. The Code transferred substantial power to local

governments to create their own sources of revenue and levy taxes, fees and charges that

shall accrue exclusively to them (Sec. 129, Chapter 1, Title I of Book II of the LGC).

The levy of taxes, fees, and charges and the taxable subjects are differentiated according

to the levels of local government – province, city, and municipality. Compared to

38
provinces and municipalities, the cities have greater taxing power. The provinces appear

to be at a disadvantage as the proceeds of collection of the printing and publication taxes

as well as those of the amusement tax are shared with lower LGUs, as shown in Table 2.

Table 2. Scope of Taxation in Local Governments

(from Book II of the LGC of 1991)
Provinces Cities Municipalities
Tax on transfer of real May levy the taxes, fees, Tax on business involving:
property ownership and charges which the - manufacture of liquor,
Tax on business of printing province and municipality distilled spirits, & wine
and publication May impose - wholesale, distribution,
Franchise tax May levy rates exceeding & dealership in any
Tax on sand, gravel and the minimum allowed for article of commerce
other quarry resources* provinces and municipali- - export, manufacture,
Professional tax ties by not more than milling, production,
Amusement tax** 50% except the rates of wholesale, distribution,
Annual fixed tax for every professional and amuse- dealership or retail of
Delivery truck or van ment taxes essential commodities
Of manufacturers or Reasonable fees and - retailing
producers, wholesalers, charges for services - contracting
dealers, or retailers in Rendered - banks and other
certain products Public utilities charges financial institutions
Reasonable fees and - peddling of any
Charges for services merchandise
Rendered - others not specified in
Public utilities charges the previous listing
_______________ Fees and charges on
* Distribution of Proceeds: business and occupation
Fees for sealing &
30% - Province licensing
30% - Component City of weights & measures
or Municipality Fishery rentals, fees &
40% - Barangay where charges
extracted Reasonable fees & charges
** Proceeds equally
shared for services rendered
by Provinces and Public utilities charges
Municipalities where Tool fees and charges for
amusement places are systems funded and
located constructed in the LGU
jurisdiction

39
 Even in the sharing of proceeds from real property taxation, the cities are given a

greater share than the provinces and municipalities (see Section 271, Chapter 7, Title II of

Book II of the LGC of 1991 and illustrated in Table 3).

Table 3. Distribution of Proceeds from Real Property Taxation

(from Article 271, Chap. 7, Title II, Book II of the LGC of 1991)

In the Case of Provinces In the Case of Cities In the Case of the MMA*

1. Province – 35% accrues 1. City – 70% accrues to 1. Metropolitan Manila

To the general fund The general fund Authority – 35% accrues
2. Municipality - 40% accrues 2. Component Barangays - to the general fund
To the municipality 30% which shall be 2. Municipality – 35%
where the property distributed as follows: accrues to the munici-
Is located a. 50% to barangay where pality where property is
3. Barangay – 25% accrues Property is located Located
To the barangay where b. 50% accrue equally 3. Barangays – 30% distribu-
The property is to all component ted among component
Located barangays of the city barangays of the munici-
pality as follows:
a. 50% accrues to the
barangay where
property is located
b. 50% accrues equally
to all component
barangays of the
Municipality

______________
* MMA – Metropolitan
Manila Area

Cuaresma and Ilago (1996, citing Bird, 1995:2) note that “the inadequacy of own-

source revenue to finance basic and devolved functions, [and thus] render the LGUs

dependent on transfers from the national government.”

b. Intergovernmental fiscal transfers. The intergovernmental fiscal transfers

(IGFTs) become the other source of revenue to build up local government units’ financial

40
resources. The core of the IGFT is the Internal Revenue Allotment (IRA), which is the

share of revenues given to local government units from those that are collected by the

national government. While the LGU share in the IRA has been increasing over the past

several years, Manasan (1995) warns that LGUs need to exercise more initiative in

revenue generation and encourages the LGUs to maximize the opportunities offered by

the Code.

The IRA is a contentious issue owing to uncertainties in its implementation. As a

“block grant,” Manasan (1995) states, its use for other spending priorities of the LGUs

cannot be discounted. The funding for the devolved functions is, therefore, not

guaranteed. Manasan also points out that the IRA diminishes LGU initiative to improve

revenue efforts as the “higher IRA will substitute” local initiatives (p. 1). Guevara (u.d.)

agrees:

There is no incentive system that can push LGUs towards greater

utilization of their taxing powers. The grant system does not have any fiscal
stimulation effect on any level of local government. Instead, LGUs substitute the
IRA for revenues, which should have been raised locally. (p. 8)

The other sources of IGFT funds include:

(1) proceeds from the development and utilization of the national wealth within

their respective areas provided for in Sections 289 & 291, Chapter 2, Title III of Book II

of the LGC of 1991

(2) grants and inter-local loans generated through donations directly sourced out

by the local government unit, or sought in its behalf by the national government through

the National Economic and Development Authority (NEDA).

(3) revenue from calamity funds

(4) revenue generated through the flotation of bonds.

41
 (5) other forms of vertical sharing of revenues, national loans and assistance to

LGUs.

In what state, then, is the fiscal administration of the Philippines? Guevara (u.d.),

who was former Undersecretary of the Department of Finance of the Philippines, makes a

very strong statement on the state of fiscal decentralization in the Philippines. She

declares:

Is it realistic to expect fiscal freedom for LGUs after devolution? It

would not be fair to think so since the Local Government Code hardly altered
policies on local finance. The framework that supports the fiscal provisions of the
Code is of martial law vintage. The taxing powers that LGUs enjoy are those that
they have been enjoying since 1973. The tax bases have remained the same.
Additional powers such as the imposition of a village tax on small retailers are
nominal. The Code also weakened the fiscal capacity of LGUs through
provisions that: 1) withdrew the power of municipal governments to impose the
real property tax; 2) increased the level of exemption of residential buildings from
the land tax; and, 3) provided local legislative assemblies with the power to
approve assessed values of real properties. The latter could be chiefly responsible
for the inability of LGUs to revalue real properties regularly to reflect current
market values. (p.8)

Padilla (1992) shares the same observation, stating that while local governments

have been given powers to create their own sources of revenue and are also authorized to

tap from identified sources, “the central government has retained the major levies and tax

sources, relinquishing the relatively less productive ones to the local units” (p. 55).

Personnel – the fourth dimension of administrative capability. The devolution of

services, personnel, and resources to the local governments of the Philippines brought

about problems related to personnel management. Two important dimensions of the

personnel issue include:

a. The organization of the personnel management function. Sajo et al (1998)

observe the lack of an appropriate organizational structure for implementing the human

42
resource management functions in the LGUs. Despite provisions in the LGC

strengthening human resource management in the LGUs, HRM is not a mandatory

function (Joaquin, 2002). There is no provision that would create the HRM Officer

position as mandatory in any of the levels of LGUs. At best, a unit under the office of the

local chief executive takes care of the routine personnel functions of selection and

appointment, leave and other benefits management, but the workforce planning, training

and development are not required. In some local governments, HRM positions have been

created in the office of the Provincial Administrator or the City or Municipal

Administrator as the case may be. Before devolution, the HRM function was performed

by either a staff at the Office of the Mayor or the Governor or by the Municipal or

Provincial Treasurer, himself. Very little, therefore, could be said of HRM innovations in

the local governments (Tapales, Padilla, and Joaquin, 1996). The old practice persists

and in some localities, political patronage still influences the selection and hiring

processes. Progression in the organizational structure and hierarchy is hampered by a

weak system of promotion (Joaquin, 2002).

b. Systematic Human Resource Management. Personnel management continues

to be a concern not only of local governments but also of organizations in general.

Wright and Rudolph (1994) observe, “The traditional ‘personnel’ function has evolved

into a strategically important organizational component and a growing body of scholarly

and professional literature has emerged” (p. 27). Factors related to workplace and

workforce changes, emerging support systems, changing labor relations, and changing

emphasis on organizational performance have influenced the shift of perspective on the

organization’s personnel management functions.

43
 Personnel management is now referred to as human resource management, or

HRM, a term Wright and Rudolph (1994) acknowledge as having no definitive meaning.

They cite some authors who regard HRM as “a patchwork quilt concept stitched

together” (citing Keenoy), a “bundle of overlapping notions (citing Brewster and

Bournois, 1991), or “nothing more than a change in terminology, a temporary fad, heavy

on theory, but little reflected in practice” (citing Kamoche, 1991). Nonetheless, Brewster

and Bournois and Kamoche distinguish the new from the old personnel management as

“soft HRM” and “hard HRM.” The “soft” side highlights the personnel resources as

having creativity, commitment and skill that can generate real competitive advantage,

while the “hard” side emphasizes the significance of personnel resources as instruments

necessary to achieve organizational goals.

Wright and Rudolph (1994) pose the question: should local governments buy the

new HRM thinking? They acknowledge that change has somehow crept into the

mainstream of local governments and that local governments are adjusting to the need to

restructure personnel policies, procedures and practices. However, they also note the

presence of “pockets of resistance” towards “the development of a more significant HRM

function” (Wright and Rudolph, 1994, p. 39). They argue that this resistance is a

fundamental characteristic of local governments, making them unlikely to be at the

forefront in instituting HRM practices.

On the Philippine side, Joaquin (2002) notes that LGUs were unprepared to

embrace the new HRM perspective. She states, “HRM in that sense is quite new to the

vocabularies of LGUs” and that after several years of devolution LGUs are “still [only]

beginning to appreciate various human resource challenges they are facing” (p. 240). She

44
presents a schematic diagram that aligns HR strategies to the objectives of

decentralization (p.246).

Developing Skills and

Attitudes in the LGU Measuring
Performance
Benchmarking

Designing and
Providing
Capacity Proper HR Strategies in Improving
Building targeting Decentralization capacity
Interventions

Role of External Partners and

NGOs in building LG
capacity Developing Skills in
the Community
Figure 1. HR Strategies in Decentralization
(Adopted from Joaquin, 2002, p. 246)

Joaquin (2002) says that human resource development and management strategies

are central to the attainment of decentralization objectives.

First, new skills and attitudes need to be developed for performing managerial and

technical functions more effectively. Local governments are known for corrupt practices

perpetuated not only through nepotism, but also through “rent-seeking practices, plain

theft, and lack of accountability to local elected officials” (p. 251).

Second, capacity-building interventions, either lacking or delivered late, have not

been a high priority for those national agencies whose services have been downsized by

the transfer personnel and resources to local government units.

45
 While the sharing of expertise by devolved employees in the course of the day-to-

day operations can contribute to capacity building, Joaquin (2002) states that this cannot

substitute for a “well-funded, systematic training and development backed by national

policy” (p. 253).

Third, a host of capacity-building interventions had been provided by donor

agencies like the United States Agency for International Development, the World Bank,

the UN Fund for Population, the Australian Agency for International Development, the

United Nations Development Program, and consulting groups from countries such as

Germany and Canada. Participation from local non-government organizations in the

areas of community development, leadership formation, electoral management, coastal

resources management, and planning has been growing.

Fourth, performance indicators need to be developed for assessing organizational

and human resource performance. Several attempts had been made to devise a system to

assess organizational performance. The first was the Checklist for Performance

Monitoring and Reporting System developed by the Department of Interior and Local

Government’s (DILG). Others attempts focused on performance in the areas of financial

utilization, social welfare services, data-base development, and public-private sector

partnership. As for human resource performance, evaluation systems have been

developed in compliance with Civil Service Commission directives.

Finally, there is need to develop the capacities of people outside government to

enhance their participation in the affairs of government. Since basic services are directed

towards society in general and communities in particular, decentralization can have a

wider impact with people participation.

46
 The foregoing discussion highlights the importance of institutionalized strategies,

mechanisms, procedures, and policies to address the many challenges of implementing

decentralization in the Philippines. Along with these requirements is the basic need for a

strong political will to ensure that these requirements will be met.

47
 Chapter 3. The Methodology of the Study

The Research Framework

This study assumes that successful decentralization can be achieved with adequate

administrative capability among local government units (LGUs) and that the

requirements of administrative capability can be identified by examining the subjective

experience, or perceptions, of local government appointive officials who are at the

forefront of its implementation. Why the perceptions of those officials matter was raised

in earlier chapters, which noted that research on how decentralization actors see and

experience their roles in decentralization are largely absent in existing literature.

As Mason (2002) contends, qualitative research opens up different ways by which

the world can be better understood through an exploration of the experiences of research

participants. While qualitative researches have been criticized owing to biases in the

reporting of participants’ subjective experience, focusing on such experience has also

considerable benefit, as in the present study, of enabling an in-depth examination of the

perceptions of the LGU appointive officials concerning what makes decentralization

work or not work. Specifically, the present study should: 1) better awareness of the

administrative capabilities needed for its success; and 2) alternative means for responding

to the challenges confronting its implementation.

The framework for this research, therefore, is presented in Figure 2.

48
 Figure 2. Framework of the Research

Conceptual Model

Conceptualizing
Decentralization
Exploring Administrative
Capability Dimensions
Operational Model
Defining/identifying
Administrative
Capability Dimensions’
Strengths and
Weaknesses
Successful Implementation of
Decentralization in Philippine Local
Governments (LGUs)
Addressing Issues on
• duality problem,
• organizational
differentiation and
• contextual factors in
Local
Appointive organizational
structure
Officials
Perceptions • HRD in LGUs
• Financial resources
• Leadership among local
managers

Research Methodology

Data Sources and Methods of Collection. Merriam (2002) identifies three basic

sources of data: interviews, observations and documents. For this study, interviews have

provided the primary method of data collection, with appointive local government

officials comprising the primary source of data. A semi-structured interview protocol

was developed and used for that purpose and is attached as Appendix A. Documents

maintained by the organization were also used as secondary sources of data.

Selection of Research Locations. The diverse and extensive nature of the

Philippine local government composition – a three-tiered structure composed of 79

provinces, 98 cities, 1,496 municipalities, and 40,141 barangays – posed serious

49
challenges in choosing the research sites. In selecting the sites for the study, therefore,

Glesne’s (1999) “purposeful sampling” strategy, using “homogenous sampling” (p. 29,

citing Patton, 1990, 196), was employed. Homogenous sampling considers common

identifiable characteristics as criteria for selecting subgroups to study. Four provinces

with common characteristics were then chosen: Ilocos Norte, Ilocos Sur, La Union, and

Pangasinan. These provinces have the following common characteristics: (1) all belong

to the same administrative region; (2) all are categorized as first-class provinces; and (3)

their regional location, Region I, is one of only two regions (the other located in a highly

urbanized area) among the 16 regions having all its provinces categorized as first-class

provinces.

The question arises as to the choice of the provincial governments as sites of this

study over the other levels of local government such as the municipal, the city, or the

barangay governments. This question is tied to the issue of validity of this research. In

responding to this question, it is important to consider the provisions of the Local

Government Code (LGC) of 1991 that distinguish these four levels of local government

units. The provincial government is characterized as “a political and corporate unit of

government” and serves as “a dynamic mechanism for developmental processes and

effective governance of local governments within its territorial jurisdiction” (Sec. 459,

Chapter 1, Title IV, Book III of the LGC, p. 209). A cluster of municipalities or

municipalities and component cities constitute a provincial government. The city

government and the municipal government perform the similar role of being “general-

purpose government[s] for coordination and delivery of basic, regular, and different

services and effective governance of the inhabitants within [their] territorial

50
jurisdiction[s]” (Sec. 448, Chapter I, Title III, Book III of LGC, p. 190 and Sec. 440,

Chapter I, Title II, Book III of the LGC, p. 172), respectively. Both are composed of

groups of barangays, although the barangays in the cities are more urbanized and

developed than those in the municipalities. The barangay government is the “basic

political unit” serving as “the primary planning and implementing unit of government

policies, plans, programs, projects, and activities …” (Sec. 384, Chapter I, Title I, Book

III of the LGC, p. 149).

The role of provincial governments in relation to the lower level governments is

clear. The responsibility for promoting development in all levels is placed principally in

the provincial government. It is thus significant to understand how administratively

capable the provincial governments are in spurring development not only at their own

level, but also at the lower levels of local governments. In addition, the provincial

governments have a strategic location enabling them to link the lower level governments

and the national government, including the offices of the Congress. While the

responsibility of the lower levels as direct implementers of basic services and

development initiatives would be reason enough for studying them, it is difficult to

determine a common denominator among the lower local governments because they are

so different from one another.

Selection of Research Participants. The key personnel in the provincial

governments whose positions are mandatory under the Local Government Code were

chosen as interview participants. These include the Secretary to the Sanggunian

Panlalawigan, the Provincial Administrator, the Provincial Planning and Development

Coordinator, the Provincial Treasurer, the Provincial Assessor, the Provincial Health

51
Officer, the Provincial Budget Officer, the Provincial Social Welfare Officer, the

Provincial Engineer, the Provincial Accountant, the Provincial Agriculturist, the

Provincial Legal Office, the Provincial Veterinarian, and the Provincial General Services

Officer. As department heads, each of these officials is at the forefront in implementing

the decentralized functions. The Human Resource Management Officer (HRMO) was

selected as the 15th interviewee in each province because, although this position is not

mandatory under the LGC, it is nevertheless highly important in managing the LGUs’

human resources.

There are other department heads excluded from the targeted respondents. They

are those occupying positions whose creation was optional under the LGC. These

department heads were excluded because not all the provincial sites have created the

optional positions allowed under the LGC. The selection of the department heads

occupying the mandatory positions of the provincial governments allows for easier

comparison of perceptions and thus facilitates the creation of themes and categories in the

analysis of data gathered.

The number of targeted interviewees totaled 60, but only 56 interviewees were

reached. In the Province of Ilocos Sur, there were only 13 interviewees. There is no

Provincial Legal Officer, as the position is currently unfilled and the Provincial

Administrator has been unavailable during the entire two-week schedule of the province.

In the Province of La Union, there were 14 interviewees. Unavailable was the Provincial

Agriculturist who is on a year’s leave pursuing a master’s degree. In the Province of

Pangasinan, there were also 14 interviewees for the province has no Provincial Legal

Officer. Only in Ilocos Norte was the full complement interviewed. All interviewees

52
were highly cooperative and more than willing to make adjustments in their work

schedules in order to participate. Department Heads whose offices held documents

needed in the study also readily provided access to their records.

Data collection. In setting up for the interviews, letters were sent to the

Provincial Governors of the study sites inviting participation of the identified department

heads. Attached to the letter was a form that allowed the department heads to choose the

date and time for their interviews. A copy of the letter is attached in Appendix B-1. The

dates for the interviews in each province were as follows:

1. Province “A” – September 18 – 29, 2006

2. Province “C” – October 2 – 13, 2006

3. Province “D” – October 16 – 27, 2006

4. Province “B” – November 6 – 17, 2006.

Each interview sessions lasted approximately an hour to an hour and 30 minutes. In

between interview sessions, the researcher examined secondary data sources, including

official reports of various departments and offices.

Data Analysis. Coffey and Atkinson (1996) caution researchers not to think of

data analysis as coming only after the collection of data. They suggest that data analysis

should be a “part of an overall methodological approach,” considering possible patterns

and themes that could guide the presentation of data and findings (p. 11). Mason (2002)

also emphasizes the importance of recognizing and reading data before an approach to

data analysis is chosen.

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 Creswell (1998) presents a useful way to analyze data in qualitative research,

called the “Data Analysis Spiral,” which is depicted in the following diagram:

Procedures Account

Representing, Visualizing

Describing, Classifying,
Interpreting

Reading, Memoing

Data Managing

Data Collection (Text, Images)

Figure 3. Data Analysis Spiral

(Adopted from Creswell, 1998, p. 143)

Creswell (1998) explains that the researcher begins with the data gathered from

texts or images and goes through an analytic spiral that will end in an account or a

narrative of the phenomenon investigated. Throughout this process, the researcher refers

to notes and interview transcripts, sorting the information as he goes, making preliminary

summaries that could be validated by interviewees. The researcher also looks for patterns

in words commonly used by interviewees and adopts categories or codes that will be used

later to develop the framework of the narrative.

The categorical indexing technique of Mason (2002) was especially helpful in this

study. The dimensions of administrative capability identified earlier in the interviews

guided the broad categories to group subsequent interview data on local government

officials’ perceptions of the effects of decentralization on local governments’

54
administrative capability. The documents provided by various offices were used in

analyzing the dimensions of leadership, organizational structure, financial resources, and

personnel. When needed in order to revalidate or verify information that interviewees

initially provided, a second visit was made.

Coffey and Atkinson (1996) warn that indexing, coding, or categorizing the data

are merely preliminaries to analysis itself, noting that “the important analytic work lies in

establishing and thinking about [the] linkages” (p. 27). Making sense of the patterns and

themes in the data in order to portray a phenomenon coherently is the primary aim of

qualitative research. Such research, that is, generates a clearer understanding of theories

bearing on decentralization in local government and of the administrative capabilities

required for its achievement.

The volume of raw data was very large owing to the total number, 56, of

interviewees. The challenge of sifting through these data was considerable. A matrix

was set up to see how the data for each province can be compared in order to decide

whether their presentation would be disaggregated by province. It was apparent that the

commonality of perceptions across the provinces was strong, although they were not

always expressed in similar terms. This led me to present the findings as they are

structured in the paper, describing only a particular provincial experience where it was

appropriate.

Limitations of the Study

Establishing the validity in research involving respondents’ perceptions can be

considerable. Because of the subjectivity of the interviewee responses and of the

researcher herself, this challenge needs to be addressed.

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 The threats to validity arise in three areas namely, construct validity, internal

validity, and external validity. Construct validity is tied to the accuracy of measurement;

that is, how the concepts as herein studied were framed so as to accurately portray the

observable manifestations of the interviewees’ responses. Internal validity in this study

refers to whether the perceptions can be offered as valid or alternative explanations for

the state of the local governments’ administrative capability. External validity relates to

the issue of generalizability or applicability of the results to groups that are beyond the

groups studied.

The threat to construct validity. It should be noted that the information shared by

respondents is highly subjective inasmuch as they are asked about their experiences in the

implementation of decentralization in the Philippines. Their attitudes concerning

decentralization and the various dimensions of administrative capability may, therefore,

be subject to varying interpretations influenced by factors such as their unique personal

knowledge of the subject and knowledge uniquely influenced by their immediate

environment.

To guard against misinterpretation of the concepts used, the interview

questionnaire was tested on several individuals who were not part of the research process,

including two practitioners in the public service (national level) occupying comparable

positions with the target interviewees, two retired public officials who are also of

comparable rank, and two members of the local university. The intent was to determine

whether the questions can be easily understood and that the concepts used are not open to

dubious interpretation. In the interview process, participants were encouraged to

respond in general contexts, looking at the totality of the local governments’ experiences

56
in the implementation of decentralization, avoiding as much as possible the reference to

specific experiences of their departments. The use of records or documents mitigated the

threat to construct validity.

The threat to internal validity. The perceptual nature of this research limits its

predictive value; that is, it is not likely that the findings can be used to derive a

conclusion that the level or extent of administrative capability is related to the extent and

effectiveness of decentralization implementation in the Philippines. The threat to internal

validity in this research is not very significant in this research as it was not the intent of

the study to examine the success or failure of the decentralization initiative in the

country. It was not the intent of the research to determine the actual administrative

capability among the provincial governments studied or to conclude that decentralization

was or was not successful because of their present administrative capabilities.

The threat to external validity. Are the findings in this study generalizable to

other local governments in the Philippines? Specifically, beyond the first class provinces,

would the findings be generalizable among lower class provinces (2nd, 3rd, or 4th class) or

even to other levels of local governments (municipalities, cities, or barangays) also

classified differently? The answer to these questions is neither easy nor straightforward.

As earlier pointed out, the local governments are diverse in classification and their

characteristics can be complicated by differing social, cultural and ethnic factors. It is not

known whether the department heads of other classes of provinces or other levels of local

governments share similar perceptions concerning the implementation of

decentralization. If, however, I venture an assumption on the generalizability of these

findings among lower levels of LGUs in the Regions where the provinces subject of this

57
study are located, the findings are likely to be generalizable among the lower levels of

LGUs, given the similarities in their cultural, ethnic, and political orientations. This

assumption is drawn from my long years of experience in the public service in this

region, during which I interacted on a continuing basis with officials in city, municipal,

and provincial governments.

To conclude this chapter, I should note that the research is more exploratory and

descriptive than evaluative. It was not intended to determine the success or failure of

decentralization initiative in the Philippines. The findings as will later on be presented

are neither complete nor conclusive, but it provide a perspective that can be the

springboard for further research.

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 Chapter 4. Study Findings and Analysis

This chapter presents the perceptions of the local government units’ appointive

officials on decentralization and the administrative capability required in implementing it.

The first section deals with how local appointive officials viewed and experienced the

decentralization in the Philippines, particularly its benefits and disadvantages to the

LGUs. The second section discusses the perceptions regarding the primary research

question: What do appointive local government officials perceive as the effects of

decentralization on the LGUs’ administrative capability? Subsequent discussions deal

with their perceptions on the following subsidiary research questions:

a. What leadership challenges did appointive local government officials face in

the implementation of decentralization?

b. How has decentralization affected the LGUs’ organizational structure?

c. How has decentralization affected the financial resources of LGUs to

implement the devolved functions?

d. How has decentralization affected the LGUs’ personnel resources?

The third section briefly presents what the respondents regard as the

administrative capability dimension needing the most improvement or strengthening and

some of their suggestions for their improvement. The perceptions were not disaggregated

by province, but were grouped and presented in appropriate categories, with the analysis

or interpretation of the perceptions following at the end of each section.

Views on the Philippine Decentralization Experience

The local appointive officials view the decentralization as having benefited the

local government units to a certain extent. However, its implementation has posed some

59
challenges to the LGUs’ administrative capability. Their experiences concerning the

benefits and problems encountered in the course of implementation are presented in this

section.

Overall impression on the implementation of decentralization. Three distinct

impressions can be deduced from the responses:

a. Pace and extent of implementation. Fifteen years after the passage of the Local

Government Code of 1991, some respondents claimed that the rate of implementing the

decentralization is slow, while some others claimed that decentralization has already been

fully implemented. The following echo some of those sentiments:

Decentralization or devolution of basic services to include health has been

implemented for more than 10 years already; however, to some extent it is not yet
fully implemented by the LGUs because of financial constraints and because of
some LGUs’ inadequate understanding of the law.

Decentralization is not as genuine as was perceived when it was being

conceptualized.

Decentralization as implemented by the LGUs is in its initial stage.

Program/project identification is under the control of the local level/end user.
However, the implementation and success of such programs are dependent on the
release of funds from RA 7171 or the IRA.

The concept of decentralization is good because it will benefit the

marginalized citizens of the society. But my impression is that it was not totally
implemented down to the grassroots level because of the lack of personnel to
deliver the services.

Other respondents said that the implementation has been satisfactory. For

example, one respondent stated, “So far, the implementation is okay. Responsibilities are

given to heads and employees who identify and make conditions more appropriate at the

local level.”

60
 Still others indicated that because their compliance is legally mandated, the LGUs

have no alternative to implementing the law. As one respondent stated,

“Decentralization/devolution is mandatory as embodied by RA 7160. LGUs, including

the province have no other option than to filly implement it as mandated although most

LGUs were really hard up in implementing it because of financial requirements.” In the

same vein, another states, “the LGU has to implement it because the law is already

there.” On the extreme, a respondent indicated, “Decentralization is hardly felt in the

LGUs. Control from the national government exists with only little addition to the

original local code.”

b. Extent of effectiveness. Some respondents said decentralization has not been as

effective as it was supposed to be. Consider the following responses:

To a certain extent, the implementation is effective; national programs

cascade to local governments, complementary with national government.

Decentralization was not effective. Resources were lacking to cope with

devolved functions and responsibilities; complete support should be given to
operations of departments.

Others respondents also said that decentralization has strengthened democracy

and created significant opportunities for self-governance. As one puts it,

“Decentralization is commendable, that is, it has given the chance to LGUs to manage

their own resources.” Another respondent emphasizes, “Decentralization has been

unquestionably effective considering the vast powers which were originally exercised by

the national government but have now been vested to the local governments.” One

respondent considers decentralization’s effectiveness as “a workable policy in the long

term … if autonomy is sustainable.”

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 The respondents, however, listed three conditions for the effective

implementation of decentralization: (1) resources are adequate for the devolved functions

and responsibilities, (2) local chief executives are committed to the mandates of the law,

and (3) other sectors support the operations of the implementing departments.

c. Impact on LGUs. Respondents perceived decentralization as an effective

strategy of the national government to fast-track the development of the countrysides.

Consequently, decentralization generates visibility of government, particularly in areas

where previously the government’s presence was hardly felt and development was

elusive. Decentralization thus empowers LGUs to be self-reliant, making department

heads and employees more responsive to the needs of their constituents. On the contrary,

some respondents perceived that decentralization is hardly noticed by officials in the

LGUs and that firm control is still exerted by the national government. Although most of

the respondents said that devolution has stabilized over the years, the traditional

perspective on national-local relations still persists. For example, in the health services,

this sentiment still lingers, according to one official:

After a considerable length of time since RA 7160 or the Local

Government Code of 1991 has been in force, LGUs should have now been fully
implementing all the functions and attached responsibilities devolved to them by
the national government …. However, most key officials/ department heads of
majority of the LGUs, including the provincial government, have not yet fully
internalized the essence and purpose of the decentralization law, particularly in
the area of health care/services. Support for health programs, projects and
activities is still wanting. They still depend on or expect the Department of
Health (DOH) for funding support for the implementation of health programs and
services. Up to this point, other department heads of the LGUs still refer to the
Provincial Health Office (PHO) as DOH and the health staff as DOH personnel.

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 As they implement decentralization, respondents state that the local government

units continue to make adjustments with regard to capability build-up, resource

mobilization and generation, and functional interfacing.

Benefits to local government units. The department heads identified three major

benefits to the LGUs from decentralization:

a. Empowerment. Thirty one (31) of the 56 respondents or about 55% consider

the transfer of power, authority, resources, and responsibilities to the local governments

as empowering them to chart their own destinies. Some of those perceptions are as

follows:

Decentralization has been implemented in accordance with the intent of

the LGC, that is, to empower LGUs and make them more responsible in running
the affairs of the localities.

RA 7160 empowered the LGUs to attain their fullest development as self-

reliant communities making them effective partners in the attainment of national
goals.

Decentralization is an energizing paradigm for empowerment in the local

governments. There is ownership of initiatives and decisions in decentralization.

Empowerment created a sense of accountability among local government officials

directly responsible for implementing programs and projects.

b. Strengthening of local governance. Governing at the local level developed

partnership between LGUs and other sectors. In this regard, two respondents noted that:

Decentralization created new opportunities for not only the government

but also its clienteles.

Decentralization has given LGUs more powers, authority, responsibilities

and resources, and civil society has broadened its participation in political,
economic and social activities …

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 Also other respondents alleged that decentralization created a more responsive

executive-legislative relationship, allowing for a more transparent exercise of checks and

balances. As one puts it, “There is an increased transparency in local governance allowed

by decentralization. Likewise, it is claimed that bureaucratic red tape has been reduced

with decisions now made at the lower organizational levels, and that “there is closer

coordination between the devolved agencies and the local officials in the implementation

of projects beneficial to the citizenry.

c. Improvement of service delivery. Accessibility to basic services has increased

with their devolution with a more extensive range of services in the disposition of the

LGUs. Some of the expressed sentiments on the matter are as follows:

The devolution of personnel . . . made a great leap to the attainment of a

better public service delivery through functions focused on departments’ specific
areas.

The concept of devolution is good because it benefited the marginalized

citizens of the society.

Delivery of public services is easier and faster with transactions facilitated

by lesser tiers of decision.

LGUs became more responsive in addressing local priority needs, unlike

earlier when we had to wait for national instructions. Gradually, local programs
are being institutionalized.

In terms of service delivery, LGUs were made more aware of the actual
needs and requirements of their constituents.

Although some respondents doubt that services actually reached the grassroots

level, others claim that service delivery at the local level is maximized with the additional

manpower and expertise provided by the devolved personnel from the national

government. As one respondent states, “With fewer levels of decisions, there is more

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flexibility in targeting programs and projects. Shortened processes thus facilitate service

delivery.

Sustaining the benefits remains an important issue. According to one respondent,

“On the short-term, the benefits of decentralization are not captured; decentralization

would be most applicable if the Local Chief Executive is able to sustain the impact of the

set-up.” The benefits are perceived to be coterminous with the Local Chief Executive

(LCE), whose term of office is only three years. If an LCE is not reelected for another

term, then all his/her initiatives might be discontinued.

Principal problems LGUs faced and continue to face. The problems LGUs faced

in implementing decentralization are grouped as follows:

a. Financial problems. Forty respondents or about 71% of the

respondents considered the financial requirements of devolution as the greatest

problem that LGUs faced in implementing decentralization. The increased

volume of work and number of personnel required adjustments in the LGUs’

programs of expenditures in order to address the salary requirements for the

mandatory department head positions created as well as the financial obligations

for the transferred benefits due the devolved personnel. Among the perceptions

expressed to indicate this problem are as follows:

The financial aspect of devolution proved to be one of the biggest

problems faced at the initial stage of implementation, especially the
financing of benefits of devolved personnel. The biggest percentage of the
funds for provincial operations had been used for devolved personnel –
other personnel of the LGUs had been deprived of other benefits.

There were more instances when positions were devolved to the

LGUs but the budget thereof was retained by the national government . . .

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 Foremost among the problems encountered during the initial
implementation of the Code is insufficiency of funds to finance adequately
the devolved functions.

Due to the abrupt increase of personnel, the financial obligation of

the LGU increased greatly. The cost of devolved functions as included in
the IRA is far lower that the actual financial requirement of
implementation.

Funds were insufficient to finance the operation of the devolved

offices. The increase in the IRA allocated to these offices was not enough
for the operational budgetary requirements. Hence, LGU resources
allocated to meet their own operations had been shared with the devolved
agencies’ operations and finances.

LGUs could hardly cope with the financial requirements for the
devolved personnel. Most LGUs exceeded the allowable limit for
personal services (salaries and benefits).

b. Political issues. Respondents indicated the LGUs’ lack of preparedness to

implement the decentralization law as a problem. Initially, the LGUs were afraid of the

changes and the corresponding increase in the scope of responsibility that came with

devolution. Some respondents perceived that the lack of preparedness was due to the

resistance of the traditional elective officials to implement decentralization. Also, they

had the problem of interpreting correctly the LGC. Another issue that has affected the

implementation of decentralization is the existence of provisions in the LGC that restrict

or tend to restrict the effective management of the LGUs. An example is the LGC

provision that imposes a salary ceiling, thereby hindering the hiring of additional and

more competent personnel. These perceptions are captured in the following responses:

There is an inconsistency of national and local policy – strong national

policy initiatives, weak enforcement of local initiatives because of differences in
LGUs’ classifications. It is easier for the national government to advocate
decentralization, but no mechanism exists for leveling off performance in the
implementation of decentralization in the local level.

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 LGUs are still at the mercy of Malacanang (the Presidential
Residence/Office) … with the continuing administrative supervision of some
national agencies of local governments’ implementation of nationally initiated
projects.

c. Capability issues. In terms of manpower preparedness, the respondents

indicate several areas of the lack of personnel preparedness as follows:

1) inadequate management tools among key players in corporate governance;

2) lack of properly trained personnel to undertake managerial and technical work

since training programs that would prepare personnel are not available, and

3) lack of preparedness in terms of resource generation and management skills.

d. Personnel concerns. The problems perceived by respondents in this area

include:

1) the integration of devolved personnel in the LGU structure, especially

when the same position title already existed in the LGU;

2) professional jealousy between devolved personnel and the LGU

organic personnel;

3) prejudice perceived by national employees in the cutting of benefits

and privileges they used to enjoy in their original employment; and

4) the threat felt by organic personnel by the presence of devolved

personnel who would compete with them for jobs in personnel movements in the

provincial organization.

Most of these problems have been addressed as the LGUs implement

decentralization, but financial inadequacy, political backsliding, and occasional personnel

irritants continue. Also, the dependence of the LGUs on the Internal Revenue Allocation

(IRA) and the Tobacco Excise Tax (RA 7171) persists.

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 Respondents’ perceptions of decentralization. Respondents typically understand

decentralization as devolution. Devolution involves the transfer of responsibility to

implement the services of national government agencies, with corresponding transfer of

personnel and resources to the local government units as mandated by the LGC.

Respondents’ perceptions do not distinguish whether the implemented decentralization is

administrative, fiscal, or political. There is also no pattern to indicate whose interest

prevailed – national or local – in the implementation of decentralization.

Based from the respondents’ perceptions, decentralization can be characterized as

follows:

a. A strategy for development. The transfer of power, authority, responsibility and

resources to the LGUs allows the exercise of autonomy in the formulation,

implementation, monitoring, and evaluation of plans, programs, and projects. The

apparent independence from central control along these aspects creates an empowering

environment in which decision makers (elective or appointive officials in their respective

capacities) can initiate and implement plans and be accountable to their constituents. As

one respondent puts it, “Decentralization is an effective strategy of national government

to fast-track development of the countryside with LGUs planning and financing their own

priority projects which they themselves identified. It has allowed LGUs to develop and

implement their own funding and revenue sources.”

b. A governance set-up. Decentralization is perceived as an acceptable

governance set-up that allows LGUs to be more creative, more responsive, and more

accountable to their constituents. As one respondent puts it, “the partnership established

between the local government units, the national government agencies, the non-

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government organizations, and the communities is enhanced by devolution. The

expanded participation of all these sectors is seen as a new way to run the government.

c. Equivalent to local autonomy. To the respondents, autonomy means complete

detachment from central control. They perceive that the empowerment provided by

decentralization allows the LGUs to be free to achieve their own goals of development.

One respondent terms it “more independence,” while another describes it as “self-

governance.” Still another characterizes the autonomy allowed by decentralization as

“transforming the LGUs into self-reliant communities.”

The respondents believed that LGU officials and employees lacked adequate

understanding of the intent of the decentralization and that the LGUs were not prepared

for decentralization. They recognize that the problems continue to haunt the LGUs as

decentralization is implemented. They believe, however, that because of the lack of

initiative to institute strategies to address them, surmounting the problems will be

difficult.

In several ways, the implementation of decentralization affected the

administrative capability of local governments. There were challenges to the leadership

of local officials in carrying out decentralization, to the organizational structure in

meeting the demands of expanded functions, to the financial resources in sustaining the

additional functions and in managing the personnel.

Effects of Decentralization on the LGUs’ Administrative Capability

In commenting on the effects of decentralization, the respondents discussed the

four administrative capability dimensions identified in the subsidiary research questions.

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Question # 1 – What leadership challenges did appointive local officials face in the

implementation of decentralization?

Areas of leadership challenge.

The respondents perceived three categories of leadership challenges: (1)

influencing effective and efficient delivery of basic services, (2) expanding public

participation in locally administered programs, and (3) creating an environment that

cultivates subordinates’ responsiveness and commitment.

Influencing effective and efficient delivery of basic services. Respondents

expressed the following leadership requirements for an effective and efficient service

delivery:

a) Possession of desirable traits. Integrity, loyalty and efficiency are among the

most desirable traits identified by the respondents that heads of departments must

possess. In addition, they also indicate the need for selflessness, honesty, determination

and tenacity, resourcefulness, prudence and frugality in spending, decisiveness, and

flexibility, and most importantly intelligence. As one respondent puts it, “Leadership is

service and he who comes to lead must be willing and able to serve, and must display the

kind of courage, determination, and tenacity to overcome obstacles.”

b) Special skills. The respondents identified three types of skills as necessary:

managerial, technical, and administrative skills. Managerial skills include maximizing

both human and non-human resources, harnessing employee potential through work

distribution, sound fiscal management, and conceptualizing and proposing new programs

and projects. Making LGUs operate as teams beyond the ordinary requirement of the job

is an additional need. With respect to technical skills, the respondents identified planning

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and prioritization of work, generating timely results, thrashing out problems and issues,

linking and coordinating with other departments, and conducting regular monitoring and

evaluation. As for administrative skills, the respondents mentioned ensuring adequate

materials for day-to-day operations and maintaining a pleasant work environment.

c) Other leadership requirements. Leaders must be forward-looking and able to

project the future of the local government units. One respondent expresses this point as

follows: “We need leaders who are visionary, competent, selfless, responsible, honest,

and accountable and have the will to do what is necessary and urgent in terms of sound

policies and decisions in the delivery of basic services to the provincial populace.” Other

respondents call for:

(1) “spirituality” among department heads,

(2) department heads to be “role models” to their subordinates in both

work attitude and behavior,

(3) department heads to be able to integrate employees’ values into LGU-

organizational values.

(4) ability to stand on one’s principles.

(5) department heads as “dreamers” who possess a sense of foresight and

positive approach to work.

Expanding public participation in local government programs and in sourcing of

technical and financial support. The respondents suggested ways to expand public

participation in governance:

a) Spearheading outreach activities to generate citizen awareness of programs

and projects of the local government. Outreach activities provide opportunities for

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constituents to experience the presence of the government in their midst. The

respondents said that they can generate greater awareness among local people and inspire

support for locally administered projects if they coordinate activities with other sectors

and national agencies stationed in the provinces.

Two examples of outreach activities are cited in Province “C,” namely:

“Operation: Rang-ay ti Barangay” (Operation: Progress of Communities) and the

“Governor’s Cabinet.” The provincial government schedules a one-day visit to the

communities called “Operation: Rang-ay ti Barangay” to conduct medical/dental

missions, information education, referrals and consultations. A cluster of adjacent

barangays are gathered to avail of the services brought by the departments heads of the

province, the members of the media, the private sector partners and non-government

organizations. Other national agencies stationed at the province also participate in the

activity. The other activity, called “Governor’s Cabinet,” is a monthly consultation

conducted between the elective officials and the department heads, who report on their

accomplishments; present problems, issues and concerns; and submit for discussion

alternatives or proposals to address the issues and problems.

Province “B” has its weekly radio program called “Province B Hotline.”

Department heads take turns in hosting the 30-minute program discussing the province’s

plans and programs, departments’ accomplishments, and other developments obtaining in

the province. Listeners are encouraged to participate by phoning in their questions,

comments or suggestions on the subject of discussion. According to the respondents

from the province, the program has been running for a number of years now.

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 b) Institutionalizing mechanisms for the participation of other sectors. The

conduct of public hearings and regular consultations are suggested mechanisms. The

conduct of public hearings, dialogues, meetings, and consultations is intended to

inculcate in the consciousness of the people the idea that the government cares about their

welfare. As one respondent puts it, “Involve the people in planning through the conduct

of public hearings and encourage their active participation in the development councils.”

Another respondent puts it differently by calling for “counter-sharing of manpower and

resources, for example, with the farmer-clients.” Outlining a suggestion in greater detail,

one respondent says:

Open the planning process to subordinates by revealing the real intents

and motives of programs and projects. Adopt a people-based monitoring and
evaluation of projects implemented. Advocate for transparency in the budgeting
process and develop the capacity to absorb community criticism.

c) “Marketing” the LGUs. Some respondents said that the involvement of the

people in local government activities can be obtained if department heads are more

aggressive in communicating their programs and projects in the localities in which they

serve. For example, one respondent state, “campaign, disseminate, advertise, reach out,

and make available the comprehensive relevant information possible from your

department so that all concerned can make decisions on alternatives to take.” Another

respondent suggests, “develop good public relations; coordinate and tap the NGOs in the

implementation of your programs.”

d) Developing expertise in the preparation of project proposals and feasibility

studies. Several respondents urged that department heads expand their involvement in

sourcing out technical and financial support from other sectors. Donor institutions

73
usually extend financial and technical support to LGUs who can convince a donor that a

project is feasible.

Province “C” created a resource mobilization team composed of department heads

– the Accountant, the Treasurer, the Budget Officer, the Planning Coordinator, and the

Provincial Engineer – to prepare project proposals and feasibility studies, to oversee

implementation of special projects, and undertake resource tracking.

In Province “D,” a provincial library was established with funds from the

Community Development Fund (CDF) of one member of the Senate.

e) Partnering, establishing linkages, and collaborating with NGOs and other

institutions with good planning, good timing, right information, right contact persons and

maximum use of mass communication. The department heads believe that they can

cultivate a good working relationship with other sectors by developing collaboration with

sectors outside government that can generate information on possible sources of technical

and financial support. Some respondents note the weakness in the utilization of the LGC-

institutionalized special bodies that include as members representatives from non-

government sectors. Despite the constitution of the special bodies, they perceive the

participation as “very nil and symbolic,” falling short of expectations. Some contend that

although these special bodies are organized, “they are not operational.” The apparent

failure to maximize the participation of the special bodies is attributed to the weakness of

the LGUs’ structure and leadership. The strong political culture that characterizes the

provinces, which were sites of this study, is also said to be hindering NGOs participation

and limiting their ability to act as instruments for checks and balances in the local

74
governments. Some respondents claim that NGOs would act in deference to incumbent

political leaders.

There are, however, notable partnerships with other sectors. In Province “B,” for

example, through a Memorandum of Understanding/Agreement (MOU/MOA) with

NGOs and the private sector, the Diabetic Clinic and the Animal Bite Center and Rabies

Control have been established at the Provincial Hospital and satellite Animal Bite Centers

at the District Hospitals. Likewise, in this province the NGOs are federated into what is

called the “League of Civil Societies” and serve to localize service delivery particularly

in socio –economic trades. In Province “C”, the NGOs are involved in medical missions

providing not only manpower but also medicines. In this province, the Provincial Social

Welfare and Development Office (PSWDO) have organized a Provincial Council for

Disabled Persons and Senior Citizens, and the Provincial Planning and Development

Office (PPDO) organized the Market Vendors Association and the Tricycle Drivers

Association.

Creating an environment for subordinate responsiveness. In addressing this

challenge, the respondents specified the following leadership requirements:

a) Self-knowledge and knowledge of subordinates. Some department heads state

that they must recognize their own strengths and weaknesses in order to understand their

subordinates better. To them it is necessary to understand the capabilities of employees,

to allow them opportunities to make decisions, and to understand how their personal

circumstances affect their work behaviors in order to develop a healthy work

environment. As one puts it, “A department head must be able to ‘walk her/his talk’.”

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 b) Adequate knowledge and appropriate skills. Department heads must have a

broad knowledge of their departments and appropriate skills to inspire commitment and

responsiveness from subordinates. One such skill needed is effective communication

skills, which are considered to be the foundation of successful management. Another is

being open to suggestions and recommendations in order to encourage transparency in

work operations, promote a positive work attitude, and create a framework for

collaboration and cooperation. Department heads should also be able to foster individual

development through appropriate opportunities for training and reward effective

subordinate performance. The following response captures the perceptions articulated

above: “A department head, strategically positioned between top management and the

staff, needs to consider the integration of individual subordinates’ objectives and goals to

the attainment of organizational goals and objectives.”

c) Other support mechanisms – Employees need a work environment that

includes adequate lighting and ventilation, incentives and fringe benefits, physical fitness

programs, and social activities. “There is a need,”one respondent state, “for a lively work

place, a conducive work environment that has adequate facilities for lighting and

ventilation.” Another recommends provision of appropriate activities, like social

gatherings involving even members of families, that “foster camaraderie, support,

cooperation, and understanding” among all employees.

d) Vision for the future. For some respondents, department heads must consider

their jobs beyond the present requirements based on an assessment of their environments.

Consistent with what Northouse (2004) states, a leader must shape the direction of the

76
group through vision-setting, role modeling and individualized attention. One respondent

puts it this way:

A department head looks to the future. He/she ensures that his/her team
achieves its task and satisfies the customers. His/her focus is no longer just
individual productivity and performance, but in meeting organizational goals with
the desired standards. His/her goal is developing a winning department.

Implications of the leadership challenge.

Department heads adhere to a traditional concept of leadership, namely, that they

should be able to plan and implement their programs and activities. The respondents

recognize, however, that delivering effective and efficient service requires their

subordinates’ committed participation. The devolution of services to the local

governments also requires the participation of all sectors in Philippine society, including

the exploration of a variety of sources of financial and technical support. The

respondents suggested that LGUs undertake partnering, establishing linkages, and

collaborative activities with other sectors, particularly with currently inactive special

bodies created under the LGC.

Respondents said that leaders should encourage subordinates to support local

initiatives. A few examples of their perceived progressive leadership practices that can

make the provincial governments more dynamic include developing communication

channels, encouraging suggestions, giving recognition when it is due, and promoting

individual development.

Question # 2 –How has decentralization affected the LGUs’ organizational structure?

The respondents perceived three areas in which decentralization affected the

provincial governments’ organizational structure. Decentralization created the problem

of duality of service, a problem resulting from the simultaneous performance of the same

77
functions by both national government field offices and local government units. In

addition, the reorganization of the provincial structure also affected the hierarchical and

functional arrangements of departments. The devolution of functions and personnel also

affected the size, technology, organizational charter, and interdependence in the province.

Effects of decentralization on organizational structure

The problem of duality of service. Some respondents indicated that duality of

service was a problem, while others did not. Respondents who claimed that duality of

service does not exist use the term “complementation” and/or “augmentation” in referring

to instances in which national agencies in the province perform functions similar to those

performed by the provincial offices. They reasoned that provincial offices of national

agencies do not perform activities devolved to the provincial level, but only implement

national projects channeled through the provinces, thus complementing the provincial

initiatives. Some of the responses that echoed this perception include:

Under the devolved set-up, there are national government agencies in the
province, which have local counterparts, like the Department of Tourism. The
devolved employees, however, do not perform similar functions. Instead, they
augment the workforce of the province and thus complement the duties and
responsibilities of the personnel at the local level, thereby improving the needed
services of the provincial populace.

It is not necessarily an overlap. It is more of complementation of

service delivery. Provincial offices do not program projects and activities that are
part of the devolved functions but merely implement national projects when they
are channeled to the province.

Those who claimed the existence of duality of service in the provincial

governments cite examples in the sectors of health, agriculture, and public works. The

Provincial Health Office (PHO), for example, is involved in the implementation of

national programs such as malaria, leprosy, and tuberculosis control. Likewise, both the

78
PHO and the Provincial Health Team of the Center for Health Development render

technical assistance to Rural Health Units (RHUs). In such instances, the RHUs

complain of confusion regarding supervision and in the submission of reports. In the area

of agriculture, the Office of the Provincial Agriculturist (OPAg) conducts information

education. There are also national government agencies conducting information

education, like the Philippine Rice Research Institute (PRRI), the Agricultural Training

Institute (ATI), and the Bureau of Post-Harvest Research and Extension (BPHRE). In

infrastructure projects utilizing the Congressional Development Fund (CDF), both the

Provincial Engineer’s Office (PEO) and the Department of Public Works and Highways

(DPWH) are involved in the construction of highways.

The respondents opined that the problem of duality of service can be avoided if

not eliminated through (1) a concrete definition and identification of functions and

jurisdictional areas of agencies concerned, (2) proper coordination and close consultation

of the four levels of implementation – national, provincial, municipal, and barangay

levels – and (3) rationalization of the organizational structure of the LGUs. They also

suggested amending the LGC and certain policies of some departments of the national

government. An area suggested for review in the LGC is the scope of the mandates for

each level (provincial, city, or municipal) of local government giving due consideration

to their classifications (either as First Class or lower such as Sixth Class). One

respondent even suggested the adoption of a federal governmental set-up as an alternative

to the present presidential set-up in the Philippines.

In obtaining funds authorized in the annual General Appropriations Act for

various activities in the LGUs, some respondents say LGUs often encounter problems

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such as the following: (1) the stringent requirements imposed by the Department of

Budget and Management (DBM), (2) the lack of coordination between the national

agency and the LGU for low-priority projects, and (3) the lack of objective project

identification, implementing strategies and evaluating/allocating tools. They do not

discount, however, that fact that delays in the release of funds can be partly blamed on

the failure of the LGUs to make the requests.

Organizational differentiation. The organizational structure of the LGUs

underwent changes as a result of the devolution of functions from the national

government. In the provincial government set-up, three mandatory offices were created:

the Provincial Accountant’s Office (PAO), the General Services Office (GSO), and the

Provincial Veterinarian Office (PVO). All four provinces covered in this study created

these departments.

The PAO and the GSO were previously the Accounting Division and the Supply

and Property Management Division, respectively, of the Provincial Treasurer’s Office

(PTO). The PVO was one of the service divisions of the Office of the Provincial

Agriculturist (OPAg).

The other offices in the old provincial government set-up were reorganized and

elevated to the level of departments, with the heads of these offices appointed as

department heads. The passage of the LGC effected the localization of the Provincial

Budget Office (PBO), previously attached to the Department of Budget and Management

(DBM). In consonance with the LGC mandate, the structure of each provincial

government would resemble the diagram in Figure 4. All four provinces reflect this

hierarchical arrangement but vary in the way they designate staff and line functions.

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Figures 5 to 8 (Appendices C, D, E, and F) shows the organizational charts of the four

provinces.

The scope of the devolved functions and the responsibilities of the provinces are

the same regardless of the classification of the province. All of the four provinces studied

are first-class provinces, but their organizational structures are not similar as can be seen

in Figures 9 – 24 (Appendices G1 – J4).

Figure 4. Organizational Structure of the

Provincial Governments

Provincial Governor ----- Sangguniang Panlalawigan

Provincial Vice-Governor

Dept. Dept. Dept. Dept. Dept. Dept.

* * * * * * * * * * * *

* Functional Divisions

Decentralization has had both positive and negative effects on the functional

arrangements of the various provincial departments.

a. Positive effects

1) Higher degree of specialization. The response of one Provincial

Treasurer captures this result:

The concern is now focused on collection of revenue. The transfer of the

bookkeeping and accountability maintenance to the Provincial
Accountant’s Office and the supply and property management to the

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 General Services Office resulted in a smaller area of supervision and
provided check and balance that is healthy for provincial operations.

With areas of concerns properly defined, respondents felt that departments

became better organized, ensuring a smoother process of program and project

implementation. As one respondent stated, “in the performance of functions, each

department became more responsible in the delivery of its own services focusing

on specific areas and concerns.” In the same light, another respondent expressed,

“it permits a higher degree of specialization making it easier to fill positions and

providing better technical supervision to subordinates.”

2) Better management and internal control. The reorganization of the

structure of some offices created better internal control with clearer delineation of

management tasks. “Greater internal control,” one respondent expressed,

“resulted to more transparency in the performance of functions.” Some

respondents believe there is now power-sharing and better coordination among

concerned departments. However, they note some problems are present in the

functional and hierarchical arrangement of offices resulting from the process of

reorganization.

3) Rationalized organizational set-up. The transfer of the delivery of

certain basic services from the national government to the LGUs made the latter

rethink the presence of certain offices in the provincial government. For example,

Province “D” abolished the Provincial Youth and Development Office (PYDO).

The existence of a Provincial Social Welfare and Development Office (PSWDO),

whose programs include services for the youth and the elderly, made the PYDO

unnecessary.

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 b. Some drawbacks. Changes in the organizational set-up resulted in the

following drawbacks:

1) Disintegrated health care delivery system. The preventive and curative

aspects of the health care system were divided between the Municipal Health

Office and the Provincial Health Office. Public health services (preventive

aspect) became the responsibilities of the municipalities, while the responsibility

for hospital administration (curative aspect) went to the provinces. As one

Provincial Health Officer stated,

Functions of monitoring and management of public health

programs are no longer funded due to the transfer of public health
programs to the Municipal Health Offices (MHOs). The province is
burdened with the operation and maintenance of the devolved provincial
hospital and district hospitals, including the Medicare Hospitals.

One Provincial Health Officer suggests a strategy to retain the holistic

nature of the health care system. He suggested the creation of clusters of

municipalities to constitute supervisory jurisdictions of the Provincial Health

Offices. He calls these “Inter-local health zones.” The Rural Health Units

(RHUs) and Municipal Health Offices (MHOs) in these clusters of municipalities

can coordinate their programs to include both aspects of the health care system.

The PHO can maximize financial and technical support in the process. Another

suggests the “creation of a provincial convergence technical working group which

must meet regularly to plan, implement, monitor together, share resources to a

convergence area” in order to attain better coordination. One other operational

problem that confronted the provinces in the area of health services involves the

procurement of supplies for the hospitals. A Provincial Health Officer contends:

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 The pre-devolution set-up was more decentralized than the
present. Before devolution, district hospitals had more autonomy in the
allocation and procurement of needed drugs, supplies, and equipment,
including the implementation of infrastructure projects. The process was
much faster as signatories are already in the hospital and there are fewer
paper requirements to prepare.

2) Inadequate expertise. Certain provincial offices suffer from

inadequate expertise to address the devolved functions. For example, the

Provincial Veterinary Office (PVO) in Province “B” has the Provincial

Veterinarian as the only licensed Doctor of Veterinary Medicine. The Provincial

Veterinarian must render services to the municipalities because the Veterinary

Office is not mandatory among municipal governments. The Provincial

Veterinarian states, “we are really undermanned, with only 17 personnel to serve

the needs of a province as big as ours.” Another department head notes that the

transfer of functions was not commensurate with the transfer of personnel.

Likewise, the manpower to implement the enhanced real property

taxation, which is one of the major sources of revenue for the LGUs is inadequate

at the Provincial Assessor’s Office. As one Provincial Assessor puts it,

The personnel complement is not enough to undertake the

assessment functions, including records management of real properties,
not to mention the assistance extended to Municipal Assessors in the
assessment and valuation of real properties in the municipalities.

3) Functional and hierarchical problems. The problems discussed herein

are drawn from office records, particularly those drawn from organizational charts

provided by the Human Resource Management units, attached here as Appendices

G1 – J4. Revealed are some functional and hierarchical arrangement problems in

the different offices of the provinces:

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 a) Functional arrangement problems. The position titles

distinguish the functions performed by individual personnel. However,

the changes made by the Department of Budget and Management (DBM)

Circular No. 2004-3 on the position titles in the administrative services

group make it difficult to distinguish the functions performed by several

personnel. For example, in the Office of the Provincial Treasurer of

Province “B,” the re-titling of Records Officer III and Supply Officer III

positions to Administrative Officer III gives the impression that both

incumbents are performing the same set of functions. In actuality,

however, they are not because one would be performing functions related

to records management, while the other would be performing functions

related to supply management. In Province “D,” the Management and

Audit Analyst IV and the Administrative Officer IV positions became

Supervising Administrative Officers. One of them is assigned as chief of

the Management and Audit Division and the other as Chief of the

Administrative Division. In all the departments, positions performing

administrative related functions became Administrative Aide (the lowest

level) up to the Chief Administrative Officer (highest level) positions

pursuant to the DBM circular.

A problem in the placement or assignment of position in the

organization chart is also noted. For example, three Agricultural

Technologist positions exist in the Provincial Planning and Development

Office (PPDO) in Province “B,” which could be properly assigned to the

85
 Office of the Provincial Agriculturist. In this same office, a Planning

Officer II is assigned at the Economic Enterprise Division and an

Economist II is assigned in the Plans and Programs Division. A similar

case exists in Province “D” where there are three Project Development

Officers (PDOs) in the Provincial Planning and Development Office

(PPDO) and assigned to three different divisions: the Research and

Statistics Division, the Administrative and Finance Division, and the Plans

and Programs Division. In certain offices in the different provinces, the

problem on the functional configuration of positions is also experienced.

b) Hierarchical arrangement problems. The provincial mandates

prescribed by the LGC are the same. However, the service divisions of

the departments or offices are not the same in actual operation. For

example, the Provincial Planning and Development Office (PPDO) in

Province “C” have five (5) service divisions, while there are either three or

four in the other provinces. In another case, two Administrative Officer

IV positions in Province “B” are identified as head of the same division,

creating confusion about the source of authority for decisions. A similar

situation exists in the Office of the Provincial Engineer in Province “D,”

with three Assistant Provincial Engineers.

Factors influencing organizational structure. Decentralization affected the

context of the provincial governments’ structure in terms of size, technology,

organizational charter, and interdependence.

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 a) Size. Table 4 shows that the personnel complement increased

dramatically after devolution as follows:

LGU Increase

Province “A” - 45%

Province “B” - 57.7%

Province “C” - 47.8%

Province “D” - 61.7%

The number reflected in Table 4 refers only to the regular, itemized

positions under the Plantilla of Personnel for each of the provinces. This does not

include non-itemized positions filled up on contractual or casual basis attested by

the Civil Service Commission (CSC). Workers are also hired on a “job order”

basis to undertake piece-meal work as the need arises. Appropriations for salaries

and benefits for the itemized positions form part of the regular budget indicated as

“personal services.” Salaries and benefits of contractual, casual, or job order

personnel are charged to funds for special programs or projects for which these

personnel are hired.

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 Table 4. Personnel Complement Per Province
Before and After Devolution
Province
Offices A B C D
BD AD BD AD BD AD BD AD

1. Office of the Governor 20 20 3 3 139 54 60 60

2. Office of the Vice Governor and the
Sangguniang Panlalawigan Office**** 74 74 22 22 16 53 32 39
3. Office of the Provincial Administrator 3 3 28 28 +++ +++ +++ +++
4. Office of the Provincial Planning and
Development Coordinator 9 9 19 19 14 15 32 32
5. Office of the Provincial Budget
Officer 7 8 9 10 8 9 15 15
6. Office of the Provincial Treasurer 23 23 46 27 57 41 47 47
7. Office of the Provincial Assessor 14 14 19 19 32 32 52 52
8. Office of the Provincial Accountant** 13 20 - 17 - 20 - 55
9. Office of the Provincial Engineer 119 119 118 69 144 134 210 161
10. Office of the Provincial Legal Office 2 2 - 2 2 2 5 5
11. Office of the Provincial Health
Officer*** 7 391 40 493 90 458 109 1140
12. Office of the Provincial Agriculturist 14 103 40 77 33 106 95 213
13. Office of the Provincial Veterinarian* - 25 - 19 - 21 - 23
13. Office of the Provincial Social
Welfare and Development Officer* - 8 - 8 - 6 - 10
14. Office of the Provincial Information 16 - 16 8 8
Officer*
15. Office of the Provincial General
Services Officer** 161 161 - 117 - 55 90 90
16. Office of the Provincial Warden + 22 42 +++ +++ +++ +++
17. Office of the Provincial Librarian+ 5 5 +++ +++ +++ +++
18. Population Commission++ 5 5 4 +++ +++ 11
19. Environment & Natural Resources
Office - 8 - 9 - 1 - 13
20. Provincial Prosecutor's Office 1 1 4 4 0 0 0 0
Total 587 1077 399 943 539 1032 755 1974
Legend:
* - Created under RA 7160
** - Created under RA 7160 from the Office of the Treasurer
*** - Includes Personnel from District Hospitals (Dist Hosp were devolved to Provinces)
**** - Includes elective officials (Vice Governor and Provincial Board Members)
+ - Abolished under RA 7160, transferred to GSO after devolution
++ Abolished under RA 7160, transferred to PSWDO after devolution
+++ - Included in the Office of the Provincial Governor
BD – Before Devolution
AD – After Devolution
- - Non-existent before devolution

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 Table 5 shows the total number of personnel per province as of June,

2006, as provided by the provincial Human Resource Management Officers

(HRMOs). Province “D” is the biggest of these provinces, with 45 municipalities

and 3 component cities. Province “B” comes next, with 32 municipalities and

two component cities. Provinces “A” and “C” are comparable, with the former

having 21 municipalities and 1 component city and the latter, with 20

municipalities and 1 component city.

Table 5. Total Personnel Complement as of 2006

Province Number of Personnel

Regular Casual Contractual Job Orders Total

"A" 822 216 1,038

"B" 889 403 1,292
"C" 1,035 354 1.389
"D" 1,968 1,190 121 3,279

The respondents were asked how the increase resulting from the

devolution of national government agencies affected the administrative capability

of the province. They mentioned the following:

(1) Effect of organizational size on leadership. Devolution posed

the challenge of integrating the devolved employees to the LGU culture

and environment. The LGU culture, characterized as highly politicized, is

distinguished from that of the national agencies as less politicized, and

implementing to a reasonable degree the merit and fitness principle.

National employees, hence, initially resisted their devolution to the LGUs.

Believing that they are better qualified than the LGU organic personnel

89
are, they nurtured the idea that the LGU did not have the environment for

professional development. The supervision and monitoring of personnel

performance became more difficult.

As can be seen in Table 4, the number of personnel to supervise

increased along with the volume of work. As one respondent puts it, “the

responsibility became bigger and harder to handle, supervise and monitor

… Departments were given greater responsibility in terms of service

delivery and management of bigger personnel complement.”

In the health sector, for example, the number of personnel

supervised by a Provincial Health Officer increased tremendously with the

devolved responsibility of supervising district hospitals. Province “D”

health personnel increased to 1,140 after devolution from only 109

personnel prior to devolution. The supervision of district hospitals

becomes difficult because of their geographical location in the various

municipalities of the provinces. In the Provincial Agriculturist’s Office,

despite the separation of the veterinary services from its area of

responsibility, the number of employees transferred from the national

office of the Department of Agriculture (DA) is still very substantial.

(2) Effect of size on organizational structure. The increase in the

number of personnel and the broader functions to be performed resulted in

a bigger organization to manage. However, the technical expertise

brought by the National Government Agency (NGA) personnel improved

the provincial government’s human resources and enhanced the

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accessibility of basic services. Some respondents note, though, that the

new organizational structure is not ideal because of the failure to create

plantilla positions needed to implement the devolved functions, confusion

in personnel placement and utilization, and constraints imposed by

budgetary rules.

(3) Effect of size on financial resources. Funding of salaries,

benefits, and other emoluments has increased with the increase in the size

of the LGUs. The non-transfer of the full cost of devolution created

financial problems. A majority of the respondents share this perception on

the effect of the increase in provincial personnel complement to their

financial resources. Several of the responses are as follows:

Devolved personnel doubled that of existing LGU staff

requiring the alignment of funds to support personnel expenditures.

LGU finances were overstrained. Fifty two percent of the

budget goes to personal services

Some benefits were removed like the regular traveling

expenses rendering employees less mobile in their field/extension
services.

While the additional personnel bolstered the manpower

capability of the province, more money was also required to
finance salaries and benefits of devolved personnel.

Resources were used in fixed investments such as salaries

and benefits. Maintaining this became a problem and required the
prioritization of programs with the meager local resources.

(4) Effect of organizational size on personnel. A majority of the

respondents agree that the “transfer of expertise bolstered” the

administrative capability of the provinces with the devolution of

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 technically prepared personnel. However, initial personnel problems

were experienced in their placement and utilization. One HRM Officer

comments, “The placement of personnel required that both devolved

personnel and organic personnel qualifications should match the

requirements of the existing and newly created positions in the LGUs.”

Another HRM Officer contends, “there was initial confusion in the

placement of personnel for maximum utilization.” This is because in

instances where devolved positions already existed in the LGUs, the

devolved personnel had to be fitted in other positions where their

qualifications are appropriate.

In matters of promotion, both organic personnel and devolved

personnel perceived fewer chances for promotion. Organic personnel

faced the challenge of competing with personnel with better qualifications

while devolved personnel perceived the threat of political influence, for

example, in the practice of promotion by “MBA” (may backer ako – a

colloquial expression translated as “I have a backer”) in the LGUs.

b) Technology. The respondents indicated the need for LGUs to upgrade

their systems and procedures in order to respond to new demands of devolution.

The following are the initiatives undertaken and the problems experienced in their

implementation:

(1) Initiatives in response to technological requirements:

(a) Improvement of systems and procedures. Provinces “B,” “C,”

and “D” established offices to take care of their management information

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services. Province “A” is developing the Geographic Information

System/Geographic Positioning Research System (GIS/GPRS) that will

link the provincial government to the municipal governments and will

initially provide finance-related information. In Provinces “C” and “D”, a

local area network (LAN) is set up to link the financial offices with one

another. Two major activities of the LGUs that are required by the

national government are now electronically accomplished. These are the

electronic National Government Accounting System (e-NGAS) and the

electronic procurement (e-Procurement) of supplies and materials.

The provinces undertook almost similar initiatives in the

computerization of their records, which upgraded and modernized records

keeping. The respondents identify the records that are computerized

which include those related to (1) real properties, through the Real

Property Tax Assessment System (RPTAS) to facilitate tax collection and

to provide information to clients, (2) records of employment, and (3)

payrolls and reports. In the Sangguniang Panlalawigan Office of Province

“B,” the computerization of resolutions from year 2000 onward was

initiated under the Legislative Tracking Program. Province “A” has also

started a legislative tracking system. In Province “C,” the codification of

ordinances from year 1948 onward is on going.

In the engineering area, infrastructure programs and plans of work

are now being prepared through computer-aided drafting and design

(CADD) machines in Provinces “B” and “D.”

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 (b) New equipment obtained. New computers were purchased for

the computerization of records in the provinces. Province C installed a

biometric scanner to monitor employee attendance and punctuality.

Province “B” obtained a CT scan, a dialysis machine, and water analysis

machine from foreign donors and installed them in the Provincial

Hospital. Provinces “B” and “D” purchased their Computerized

Architectural Drafting and Design (CADD) machines.

(c) Retraining of personnel. The provinces expanded the conduct

of training programs for customer sensitivity, values reorientation, and

computer literacy to enable them to respond to the demands of devolution.

The technical training programs conducted include those for the CADD,

the high-technology equipment in the hospital, the e-NGAS and e-

Procurement programs. The Geographic Information system/Geographic

Positioning Research System (GIS/GPRS) training is yet to be conducted.

2) Problems related to technological requirements. The respondents

mention the following problems faced in implementing the technological

requirements of their decentralized arrangement that affects the sustainability of

LGU initiatives:

(a) Lack of interest or reluctance –

Some employees and even department heads are reluctant to avail

of new technologies because of the lack of knowledge to operate these
technologies.

Some department heads have not been particularly interested in the

access of information through the computers and the web.

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 There are no strategic plans to provide for sustainability,
continuity, and transferability of new technologies.

(b) Lack of expertise – A majority of the respondents indicate that

lack of technical expertise is a problem. More often, computers are used

for routine word processing and databases are not regularly updated and

the use of softwares is not maximized due to the lack of skilled personnel

to implement computer-based activities of the provinces.

(c) Inadequate finances – Some programs remain at the initial

stages of implementation because of the lack of funds to support their

completion. The revenues of the LGU are insufficient to finance training

programs to enhance technical expertise, to purchase equipment for

computer based-activities, or to hire additional personnel. Respondents

say that technologies require bigger budgets not only for their purchase,

but also for operating and maintaining. As one puts it, “the cost of

mobilization is high – for installation, employee training, or a new man for

the job.”

(d)) Political problem – Though some respondents say that elective

officials are supportive of the idea, others are not as enthusiastic. One

concern that can be linked as a political problem is the presence of

restricting provisions either in the LGC or in oversight national agencies

like the DBM.

c) Organizational charter. The respondents were queried about two

organizational tools: the Vision, Mission Statement and the handbook of

operating procedures of the provinces:

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 (1) Vision/Mission statement. The respondents all said that the

provinces have statements of vision, mission, goals and objectives

(VMGO). In Provinces “C” and “D,” the VMGO statements were

formulated through a workshop participated in by all department heads,

elective officials, and other stakeholders. Province “B,” sought the

assistance of organizational consultants like the Development Academy of

the Philippines (DAP) and the Asian Institute of Management (AIM) in

formulating its VMGO. In Province “A,” the Provincial Governor did a

one-on-one consultation with department heads at the beginning of his

term, revisiting the VMGO during budget hearings

(2) Handbook of operating procedures. Each department of the

provinces has their individual set of operating procedures. Not one

province, however, has consolidated these into a provincial handbook.

d) Interdependence. The perceptions of the respondents on the

relationship among departments in the provinces are the following:

(1) Inter-department coordination. The respondents recognize the

need for close coordination between and among the departments in the

provinces. As expressed by one respondent, “Every department of the

province needs to be in complete coordination with one another in order to

synchronize the implementation of programs and projects.” This is

echoed by another, who states that “Departments, in several ways,

influence one another in the achievement of the goals of the province.”

Another respondent puts it in stronger terms by saying,

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 An organization is supposed to be a unified group. Good
planning and good management is required. Policies should be
consistent, appropriate, and responsible and should reflect the
expected nature of an office, which is, being governed by laws and
not the whims and caprices of department heads.

The coordination of department heads needs strengthening

through mutual consultation on a regular basis since the activities of

departments affect each other. Some respondents observe that meetings

and consultations are far from regular. Respondents in one province offer

this coordinating suggestion: Implementing departments – the Office of

the Provincial Agriculturists (OPAg), Provincial Veterinary Office (PVO),

Provincial Engineer Office (PEO), Provincial Health Office (PHO), and

Provincial Social Welfare and Development Office (PSWDO) – should

closely coordinate with each other. In much the same way, they keep

close coordination with the support departments – the Provincial Budget

Office(PBO), Provincial Accountant’s Office (PAO), and Provincial

Treasurer’s Office (PTO) – of the province.

Implications of the effects of decentralization on organizational structure.

The LGUs are given the authority to determine the structure they deem fit to carry

out their mandated functions. In order for them to absorb the devolved national

government functions and personnel, the reorganization of the structure of the provincial

governments became necessary. As seen in the organizational charts of the provinces,

their structures are relatively flat, with only two layers of supervision, one running from

the department head, and the other from the division chief. The reorganization, however,

created problems affecting the functional and hierarchical arrangements of the different

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departments. These situations do not conform to the structural dimensions of

specialization, functional configuration, standardization, and centralization defined in the

Aston (1968) studies. The reclassification of positions to position titles appropriate for

the functions performed were initiated to solve one of the functional arrangement

problems. However, this failed due to constraints posed by Department of Budget and

Management (DBM) and Civil Service Commission (CSC) rules and regulations.

The changes in the organizational structure of the provinces yielded positive

results. The creation of new departments, for example, from the existing departments of

the province resulted to greater focus on specific areas of concern and better management

and internal control. There was some improvement in the coordination and transparency

of transactions, although greater coordination is still desired.

Some perceived drawbacks of the new structure should also be noted. For

example, the transfer of hospital supervision from the Department of Health (DOH) to the

Provincial Health Office (PHO) and public health services to the Municipal Health

Offices (MHO) resulted in a perceived disintegration of the health care delivery system.

The lack the expertise in the MHOs to deliver public health services is another problem.

This is especially true in lower classes of municipalities such as 6th Class municipalities

where no licensed medical practitioners are willing to take the lowly paid Municipal

Health Officer (MHO) position.

Some respondents claim that the duality problem exists, while the others say that

duplication, in the strictest sense, does not exist. Rather, the lack of proper definition of

areas of responsibilities of national agencies and LGUs causes the perception of

duplication. This is especially true when the funding for a project is from a national

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source like the Congressional Development Fund (CDF) and both the provincial

government and a national agency are involved in the implementation.

The implementation of decentralization also affected the provincial governments’

organizational size, technological requirements, visions and missions, and

interdependence of offices as follows:

a) Size. Provincial governments grew larger with the increases in the number of

personnel. But whether the larger size of the provincial governments has promoted

organizational differentiation, as Blau (1970) contends, cannot be known without also

knowing how differentiated the structure of the provinces were prior to devolution. The

aspects of organizational size noted by Kimberly (1976) – physical capacity, number of

personnel available, number of organizational inputs and outputs, and available

discretionary resources – may provide a better understanding of the significance of size in

this study.

Each of the departments can accommodate the number of personnel assigned

them, even though the physical structures of the offices vary in appearance. Here, one

may see a reflection of the leadership style of the department head. An observation, for

example, is noted on how differently the offices of the Provincial Engineers of the four

provinces appeared. The Provincial Engineer of Province “D,” particularly, considered

working space, lighting and ventilation in the layout of their office. The cleanliness and

orderliness of the office shows concern for subordinates and the “open door” policy

adopted encourages subordinates to seek out the department head’s knowledge and

expertise.

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 The proper use of personnel and resources, rather than their mere availability,

are the key issues in determining provincial governments’ effectiveness. As Table 5

indicates, new personnel were hired in addition to existing personnel funded by regular

appropriations. The LGUs are slowly adapting to technological changes, but they are still

limited in their ability to use sophisticated equipment because many personnel are not

properly trained. Whether the provinces’ financial resources are large enough to improve

the outcome of programs and projects cannot be determined without considering other

factors.

b) Technology. According to Pugh et al (1969), technology refers to “patterns of

operations and the equipment” used. Department operations have been improved by the

introduction of new systems and procedures. Retraining personnel improves the

technical expertise needed to make service delivery more efficient and effective.

c) Organizational charter. Changes in provincial governments’ structure can help

achieve their missions and goals through the appropriate placement of personnel and

clarification of their roles. Likewise, handbooks of operating procedures can help to

formalize those structures. Written operating procedures are currently found only in a

few departments. Not one province, however, has fully consolidated its written rules and

procedures.

d) Interdependence. Decentralization requires closer coordination both among

departments and between departments and other sectors in the provinces.

Question # 3 – How has decentralization affected the financial resources of LGUs to

implement the devolved functions?

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Effects of decentralization on financial resources.

The LGC changed the taxing powers of the local governments and specified

revenue sources to support local government expenditures.

Changes in the taxing powers of LGUs. A majority of the respondents said that

the changes in the LGUs taxing powers have produced positive effects. However, some

said that the provincial governments were disadvantaged by those changes.

1) Positive effects of changes in LGU taxing powers.

a) Broader coverage and greater flexibility – As most respondents claim,

the taxing power of the provinces has been enhanced and expanded. The

provinces were given more independence in exercising their taxing powers.

Representative of this perception are responses articulated such as:

The provincial governments have been given the power and

authority to approve, assess, and collect real property taxes within its
territorial jurisdiction.

The implementation of RA 7160 has enhanced the taxing power of

the provincial government since the LGC now provides that LGUs can
create their own sources of revenue and to levy taxes, fees and charges
that shall accrue solely for their use.

The Code has clearly specified provisions relative to revenue

raising powers of LGUs and prescribe possible ways by which they could
exercise their autonomy in terms of taxation.

The Code allowed the LGUs to engage in economic enterprises,

such as, the operation of hospitals, which can generate revenue to bolster
the provincial budget.

b) Upgrading of provincial classification. The broader taxing power and

the higher share in internal revenue allocations (IRA) increased the annual income

of the provinces, making them qualify for reclassification under the provisions of

the Department of Finance – Bureau of Local Government Finance (DOF-BLGF)

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Department Order No. 20-05. The four provinces are now upgraded as first-class

provinces.

c) Strengthening the LGUs. The provisions of the LGC allowing LGUs to

identify their own sources of revenue made the provinces more creative in

generating additional revenue. As one respondent states, “Since the LGUs are

given greater flexibility and discretion to determine the coverage of taxes, the

provincial government can generate proposals for other tax measures.” In this

respect, Province “C” exercised more creative than the other provinces through its

development of economic enterprises. For example, the province strengthened its

provincial hospital by establishing it as a corporation with a governing board

composed of local officials and representatives of other sectors in the province. It

operates as a corporation and the only financial infusion from the provincial

government is the fund for personnel salaries and benefits. The revenue

generated by the hospital supports the hospital’s maintenance and operating

expenditures. This practice is being examined for replication by other provinces.

Another example of the economic enterprises developed by Province “C”

is the operation of the “Botika” or drugstore within the hospital that sells

medicines at lower prices than those prevailing in the market. This encourages

the people to buy medicine from the hospital, thereby increasing provincial

revenue. The increase in revenue in turn helps fund the health insurance of

indigent families. LGUs are encouraged by the Philippine Health Insurance

Corporation (PHIC) to enroll indigent families under the “Indigent Sector

Component of the National Health Insurance.” As of August 31, 2006, Province

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“C” has already enrolled 13,804 people, supporting 100% of the cost of insurance

for 1,914 indigent members, while sharing 50% with the municipalities for

insuring the other 11,890 indigent members. According to the Provincial

Treasurer, the province has already paid P3,317,880.00 to the PHIC for insurance

premiums.

2) Disadvantages of the changes in the taxing power.

a) Decrease in shares due to the specification of taxing jurisdiction. The

LGC specified the areas in which provinces, cities, municipalities, and barangays

can raise taxes and defined the rates of share that accrues to each level. The

retention by the cities of 100% of taxes they collect deprived the provinces of

remittances, which they shared before devolution. Likewise, the share from real

property taxation earmarked for the barangays also reduced the annual income of

the provinces. As one puts it, “A lot has been lost at the provincial level because

of the changes in jurisdiction and rates of sharing. The provision of shares for the

barangays resulted in a diminished share for the provinces in certain revenues

collected.”

b) Collection inefficiencies. In some areas, collection of revenues is

inefficient and ineffective. One example is the collection of taxes for quarrying

which is the jurisdiction of the provinces. There is no proper monitoring of the

transport of quarrying products because of the lack of checkpoints set up by the

province and the lack of personnel to staff the checkpoints. Municipalities cannot

control or monitor their movements because taxation for quarrying products is not

in their jurisdiction.

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 The LGUs’ sources of revenue and access to other sources. The three categories

of sources of revenue for the province are the own-sources revenues (OSRs), the share

from Internal Revenue Allocation (IRA), and the non-IRA sources.

1) Revenue from own-sources. The LGC defined the areas in which

LGUs can collect taxes. The taxes collected in these areas are known as own-

sources revenues. The increase in revenue generation from own-sources is

minimal in all four provinces. As can be seen in Table 6, the total revenue and

receipts from OSRs is very small and is augmented substantially by the share

from the IRA and the Tobacco Excise Tax. Although assessment of real

properties has been intensified, tax collection and remittance did not increase as

expected. Tax ordinances need to be enacted in order to bolster the revenue

generation of LGUs from own-sources. As one respondent reported, “The

income-generating proficiency of the LGUs reveals the actual status of the

decentralization process.” The sources of revenue for the province are limited.

Tables 9 – 12 (Appendices K-1 - N) reflect the state of the revenue and receipts of

the provinces. These tables show that despite the various non-tax sources of

revenues, the income generated locally does not substantially impact the total

revenue of provinces. Unless LGUs are able to identify and explore other

sources, revenue generation from OSRs will remain minimal.

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 Table 6. Comparative Total Revenue and Receipts*
Provinces "A," "B," "C," and "D"
Year 1991 – 2005

Year Province "A" Province "B" Province "C" Province "D"**

1991 27,575,096.55
25,962,643.00
1992 52,205,973.20 49,103,623.55
49,965,391.00 46,982,516.00
1993 92,534,502.47 94,157,388.12 88,087,601.24
83,411,499.31 88,876,368.00 75,969,918.00
1994 148,648,883.31 765,738,629.86 134,919,500.24
136,634,082.00 143,595,280.00 117,264,483.00
1995 177,586,665.41 430,525,163.23 152,324,264.84
162,700,504.00 326,000,890.00 129,853,702.49
1996 175,400,410.72 352,726,538.43 206,414,326.04
151,865,332.46 332,350,981.00 183,278,755.00
1997 221,531,537.48 346,681,948.77 266,404,019.20
197,930,330.94 329,526,615.80 226,237,520.00
1998 258,773,329.79 664,805,472.80 282,749,441.14
231,767,56.50 647,631,953.30 257,168,225.00
1999 452,904,260.21 263,370,972.59 328,393,726.86
411,314,116.00 252,161,318.00 284,407,432.00
2000 362,284,991.97 310,736,358.95 319,806,978.98
300,926,073.00 293,083,079.00 270,063,920.00
2001 351,394,294.17 502,295,261.77 404,689,322.80
290,459,849.27 493,124,310.00 361,491,019.00
2002 369,956,204.19 417,564,120.53 367,027,536.96
327,513,113.00 407,402,671.09 332,160,309.40
2003 522,889,120.87 703,151,888.30 563,659,096.55
456,535,822.00 690,889,013.83 336,778,617.00
2004 426,888,377.52 827,272,715.46 474,608,991.06 1,022,103,460.70
377,087,437.07 812,748,020.00 336,825,973.00 921,583,993.00
2005 541,004,137.71 462,189,146.63 708,627,049.68 1,129,125,532.65
486,953,430.30 444,006,295.00 361,825,332.00 993,273,230.00
* The first line indicates the total annual revenue. The second line reflects the IRA share
and the Tobacco Excise Tax Share.
** Only two years' report was made available. The report was prepared in the format
adopted under the New Government Accounting System prescribed by the
Commission on Audit (COA).

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 2) Share from the Internal Revenue Allocation (IRA). The national

government gives back to the LGUs a share from taxes collected by the Bureau of

Internal Revenue (BIR) in the form of Internal Revenue Allocation (IRA). Table

7 presents the data obtained from the Office of the Provincial Budget and the

Office of the Provincial Treasurer showing the shares of the provinces in the IRA

from 1992 to 2006. The IRA share has increased through the years. Most

respondents admit that “the dependence on the IRA is still very high because it

remains as the major source of income for the provinces,” and that without the

IRA “the local taxes collected would not be enough to finance all the devolved

functions.”

However, some respondents think that the LGUs should already collect

the taxes on the sources identified for BIR collection, which constitute the source

of the IRA. They rationalize that since the taxes collected here are also local

money, the LGUs should automatically have possession of these taxes for their

expenditures. As one puts it, “it is a legal share of the LGUs from taxes collected

by the national government in our local jurisdiction.” While it is said that the

LGUs’ dependence on the IRA discourages the LGUs’ from increasing revenue

from their own sources, some respondents also believe that the IRA share is a

mandated obligation of the national government to the LGUs. Hence, they are

legally entitled to receive their IRA share. But one suggests, “there should be a

system of balancing taxation from own sources and the sharing from internal

revenues.”

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 Table 7. Internal Revenue Allotment (IRA)
Provincial Share: 1992 – 2006 in Pesos

Provincial Governments
Year “A” “B” “C” “D”
1992 46,066,295.00 49,965,391.00 46,982,516.00 119,919,446.00

1993 83,411,499.31 88,876,368.00 75,969,918.00 232,224,584.91

1994 124,187,082.00 131,148,280.00 117,264,483.00 356,728,205.00

1995 136,898,909.00 144,017,796.00 129,853,702.49 362,074,299.00

1996 147,304,009.46 154,105,475.00 139,780,002.00 391,232,347.00

1997 185,838,597.94 205,320,218.80 182,639,211.00 507,499,258.00

1998 198,727,156.50 215,464,950.30 195,385,725.00 490,334,782.00

1999 235,059,116.00 252,161,318.00 234,979,388.00 617,276,403.00

2000 276,600,445.00 293,083,079.00 270,063,920.00 712,138,454.00

2001 286,785,126.00 277,796,758.00 264,412,814.00 699,111,127.00

2002 327,513,113.00 259,186,743.09 322,160,309.40 971,439,679.83

2003 352,028,351.00 371,074,141.00 336,778,617.00 930,825,553.00

2004 342,702,400.00 361,748,020.00 336,825,973.00 921,583,993.00

2005 368,279,662.00 387,336,056.00 361,825,332.00 993,273,230.00

2006 402,615,897.00 421,512,739.00 395,023,358.00 1,070,774,425.00

3) Non-IRA sources. LGUs can access other sources of funds such as

bonds and borrowings. The four provinces do not normally raise revenues by

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 floating bonds or by borrowings. Only Provinces “A” and “C” resorted to

borrowing to finance their special infrastructure projects. Another source is the

President of the Philippines’ calamity funds, where LGUs can request assistance

in times of natural disasters.

Shares from the national government also come from the excise tax in

accordance with RA 7171 for the three tobacco-producing provinces (Provinces

“A”, “B”, and “C”) and income from the operation of the power corporations and

dams in Province “D.” Table 8 shows the provincial share from the tobacco

excise tax.

Table 8. Provincial Shares in RA 7171

1994 – 2006 (in Pesos)

Provincial Government
Year “A” “B” “C”

1994 12,447,000.00 627,000,000.00

1995 25,801,595.00 281,983,094.00
1996 4,561,323.00 178,245,506.00 43,498,753.00
1997 12,091,733.00 129,206,397.00 43,598,309.00
1998 33,040,000.00 432,167,000.00 61,783,000.00
1999 176,255,000.00 49,428,044.00
2000 24,325,628.00
2001 3,674,723.27 215,327,552.00 97,078,205.00
2002 148,215,928.00 10,000,000.00
2003 104,507,471.00 319,814,872.83
2004 34,385,037.07 451,000,000.00
2005 118,673,868.30 56,670,239.00
2006 118,064,793.00

Total 549,763,378.64 2,737,782,631.83 305,386,311.00

The volume of tobacco production determines the provincial share on the

tobacco excise tax. Province “B,” the biggest tobacco-producing province among

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 the three provinces, has the biggest share. (Province “D” was not able to provide

information on their share from the operation of power corporations and dams.)

Other issues and continuing concerns in fiscal matters. The following concerns

also surfaced during the interview:

a) Budgeting. Some respondents from Province “B” raised an issue regarding the

budgeting process, which they said was not ideal because each office is simply assigned a

budget. “Budget hearings,” hence, amount to the statement: “Here’s your budget.”

Department heads do not have the opportunity to justify their funding proposals for

expenditure items. In the three other provinces, however, the budgeting process is not a

problem.

b) Constraints from the national government. The Budget Operations Manual for

LGUs prescribed by the Department of Budget and Management (DBM) echoes national

policies, which have confused the LGUs in their efforts to manage the budget process and

control their resources. In addition, the suggested structure for the Provincial Treasurer’s

Office (PTO) cannot be staffed either because of financial constraints or because the

LGUs have already exceeded their budgetary limits for personnel expenses.

c) Political will. Political will is needed in order to implement newly legislated

tax ordinances and to update existing ordinances. Provinces have difficulty collecting

amusement taxes because amusement establishment owners are sometimes the political

leaders themselves. The regular updating of the Revenue Code also suffers from the

inaction of the legislative arm of the province. In one province, for example, a

respondent stated, “the proposed tax measure was frozen. The last revision was in 1996.”

The tax measure in contention is the updating of the revenue code that would raise the

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taxable rate of real properties. The legislators allegedly shun passing the measure

because they have interests to protect. Records of the provinces show that the revenue

ordinances had not been updated in consonance with the provisions of Section 219,

Chapter 1, Title 2, Book II of the LGC. Province “A” updated its Revenue Ordinance

only in 2001 with the second revision expected in 2008. Province “B” updated its

Revenue Ordinance in 1993, after the LGC took effect in 1991 with subsequent update in

2003 and the expected update in 2008. In Province “C”, two updates were made on the

Revenue Ordinance and these were in 1993 and 1996. Province “D” also did two

updates. The first was in 1998 and the second one was in 2006.

d) Inefficiency of collection. Efforts at collection fail because of the

government’s passive attitude towards tax evaders and its leniency in meting out penal

sanctions. As one respondent state, “part of the problem is the government’s passive

attitude on tax evaders and the not-so-strict implementation of penalties.” Also,

collection enforcement suffers from the lack of personnel well-versed in local taxation,

and the lack of appropriate facilities for collecting taxes. Respondents from the financial

group cry out for the “lack of funds to purchase needed facilities in the field to facilitate

identification and aid in collection.” They claim that efforts for revenue generation

should be strengthened with appropriate local policies.

Implications of the effects of decentralization on LGUs’ financial resources.

The effect of decentralization is greatest with respect to financial resources.

Respondents mentioned salary disparities, curtailed benefits, impeded mobility, and

unimplemented programs as the primary victims of inadequate financial resources. It

appears, however, that the department heads have not understood the extent to which the

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LGUs have been empowered to increase their fiscal capacities. Department heads, even

those in the financial group (Assessor’s Office, Budget Office, Accountant’s Office), had

very limited information about the changes to the provinces’ financial resources and their

taxing power. Generally speaking, however, decentralization has improved the

provincial governments’ financial viability.

1. The changes in the LGUs’ taxing power. The respondents perceived a broader

coverage afforded by the Code and a greater flexibility for LGUs to determine sources of

revenue. However, they also perceived a weakness of the LGUs to take full advantage of

the Code. As noted earlier, they have failed to explore own-sources of revenue because

the IRA share substitutes for deficiencies in collecting own-sources revenues. This

confirms the findings of Cuaresma and Ilago (1996), who noted the inadequacy of own-

source revenue to finance basic and devolved functions, thereby making the LGUs

dependent on transfers from the national government. The core of the national transfers

is the Internal Revenue Allotment (IRA). Undeniably, Manasan’s fear in 1995 is still true

today, namely, that the IRA would reduce LGU initiative to improve their own revenue

efforts. The problems of improving revenue generation from own sources should be

addressed with initiatives that are more vigorous. Provinces should develop a more

conscientious system of collecting taxes to respond to the problem of inefficiency in tax

collection.

The reclassification of the provinces to first-class provinces may not necessarily

reflect the respondents’ claim of progress. Since province reclassification is based on

income levels, it is not known if the provinces could meet the income requirement for

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reclassification if provincial income is determined largely by revenues raised from own

sources.

2. Other revenue sources and accessing them. Decentralization allowed LGUs to

determine their own sources of revenue by providing them the authority to enact revenue

codes. However, the authority for the implementing arms (Assessor’s and Treasurer’s

Offices) has not been extended because of the provinces’ inability to pass necessary

legislation to support those changes. The respondents, particularly those in the affected

offices, emphasized the need for political will to support measures that would strengthen

their revenue raising capacity.

As for the IRA as a source of revenue, the rates of share shown in Table 7 have

increased except for 2001, 2002, and 2004. The claim that the tax sources constituting

the IRA should be collected by the LGUs and that the taxes collected automatically

accrue to the local coffers will probably not be acted upon.

LGUs, likewise, lose the incentive to expand their OSRs because they get a

substantial share from RA 7171 or the Tobacco Excise Tax, as shown in Table 8.

Province “D,” however, is not a recipient of the Tobacco Excise Tax, but is still able to

satisfy all its expenditure requirements. As the Provincial Treasurer of Province “D”

says, the province excels in revenue collection, making it among the top ten provinces in

the country in revenue generation.

Question # 4 – How has decentralization affected the LGUs’ personnel resources?

The perceptions of department heads on this dimension of administrative

capability were focused on three areas, namely: the structure for personnel management

in the province; the mechanisms for implementing personnel management functions such

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as employee selection, promotion, evaluation, and training; and problems faced and

initiatives to solve them.

Effects of decentralization on personnel.

Because of the highly political nature of local government administration,

personnel management is a sensitive subject in the provinces, particularly with regard to

personnel hiring, promotion, and training. The respondents were therefore especially

cautious in responding to the questions raised on this dimension of administrative

capability. The limited responses were obtained in the three (3) areas as follows:

Structure for personnel management. A human resource management (HRM)

unit exists in all the provinces, but not one of the provincial HRM units is the equivalent

of a department. The unit, headed by a Human Resource Management Officer (HRMO),

is responsible for the following functions: appointments and promotion, performance

evaluation, personnel records management, employee welfare and benefits, and training

and development. Either the unit is attached directly to the Office of the Governor or it

exists as a division under the Office of the Provincial Administrator. According to the

respondents, the operation of the HRM unit met the requirements of decentralization,

although much is desired for creativity in motivating people to excel. As some observe,

the HRM units are both “very reactive and concerned only with routine functions” or

“their operations are exclusively influenced by existing civil service regulations.”

Mechanisms for personnel management. The mechanisms related to personnel

management are in place in the four provinces.

1. Selection and hiring. The respondents said the selection and hiring of

personnel conform to Civil Service Commission (CSC) rules and regulations.

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However, this process does not always work inasmuch as political influence more

often determines who is appointed. As one respondent states, “selection and

hiring is underpinned by political influence, the remnants of the centralized set-

up, and the guarantee of security of tenure delays cleaning up of the ranks of

employees.” Others echo this by saying, “There is no incentive to get the best”

and “there is so much politicking that even long-time volunteers get sidelined for

appointment when vacancies arise.” The provinces have not used selection

procedures other than those prescribed by the CSC rules and regulations, except

in Province “C,” which developed testing instruments for different levels of

positions. This province purchased testing kits and aptitude tests to ensure an

objective selection of persons for appointment.

2. Promotion from the ranks. A majority of the respondents was silent on

the topic of promotion, but they made non-verbal signals indicating the lack of

objectivity in promotion. Some responses characterized the process of promotion

as poor, that “most of the time the process is not followed and what prevails is

‘palakasan’ (spoils system) or ‘whom you know’,” and the “discretion of the

appointing authority prevails.” While there is a clear rule regarding promotion

within the ranks of the different departments of the province, the respondents

believe that the use of the merit promotion plan has not been the prevalent

practice. Reasonable exceptions are, however, practiced in certain situations.

3. Mobility in the organization. The respondents’ understanding of

mobility is vague. Some referred to mobility as travels outside official station for

field work. A number of department heads, however, referred to reassignments,

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transfers, or details to other offices as examples of personnel movements within

the organizational set-up. They describe these movements as opportunities for the

personnel to enhance their capabilities on the different operational aspects of the

provincial offices.

4. Opportunities for training and development. The HRD function is said

to be “not responsive to local needs inasmuch as training needs assessment is not

fully utilized.” Training programs are not consciously developed or consistent

with identified needs. Not one among the four provinces could show an annual

Training and Development Program for all levels of personnel. More often,

training programs used by the personnel were provided by national agencies such

as the Civil Service Commission (CSC) and other national line agencies such as

the Department of Budget and Management (DBM), the Commission on

Audit(COA), and the Government Service Insurance System (GSIS) for specific

work-related concerns.

Problems faced in personnel management.

1. Political interference – The influence of politics is very strong in

personnel management, especially in appointments and promotion. The

Personnel Selection Board (PSB) is supposed to respond to this problem, but

since the PSB is also composed of elective officials as members (with the

Governor serving as chair), the problem persists.

2. Funds for training and development – Provision for training in the

annual budget is very minimal if not altogether absent.

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 3. Filling of vacancies and creation of positions – Respondents expressed

the need to fill the vacancies resulting from the reorganization of the LGUs and to

create additional positions to carry out their mandates.

Implications of the effects of decentralization on personnel

The importance of personnel as a dimension of administrative capability required

to implement decentralization appears to have been widely overlooked. This sustains the

findings of Sajo et al, in 1998, on the lack of an appropriate organizational structure for

implementing the human resource management functions in the LGUs. Indeed, the

traditional view on personnel management lamentably persists in the LGUs; that is,

personnel management focuses chiefly on the achievement of organizational goals, but

neglects what Brewster and Bournois (1991) and Kamoche (1991) describe as creativity,

commitment, and skill needed for generating real and lasting organizational change.

The more pressing issues involve the need to improve the mechanisms to support

efficient and effective management of human resources, including procedures for hiring

and selection, promotion from the ranks, mobility, and opportunities for training and

development.

Devolution may well have had no substantial impact. While mechanisms for

personnel management currently exist, they are not used. Strengthening HR management

in the LGUs would require the proper definition of the authority and responsibility of

each unit, encouraging HRM personnel to be more progressive in their outlook, and

providing the necessary resources to implement HRD programs.

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Strengthening Administrative Capability for Decentralization

This section summarizes respondents’ perceptions about the dimensions needing

greatest improvement and their suggestions for improving them.

1. Leadership. Leadership anchors local governance. When leadership is

improved, the improvement of the other dimensions will follow. Because local

governments exist in order to deliver basic services to their constituents, local authorities

are expected to lead efficiently and effectively. Leadership improvement is needed for

both the elective and appointive officials of the LGU. Because employees emulate their

leaders, leaders must themselves perform at high levels.

2. Organizational structure. Organizational structure provides the framework for

carrying out the mandates of decentralization. Provincial organizational structures need

to be adequately staffed with technically trained personnel in order to perform their

expanded functions. The existing plantilla positions appear inadequate to meet this

demand. Likewise, the present set-up need to be studied in order to identify areas in

which problems having to do with functional and hierarchical arrangements of positions

still exist. The expertise of existing personnel can be maximized when positions are

properly aligned and functions are properly clarified.

3. Financial capability. Without adequate resources, the LGUs cannot deliver the

basic services and development activities assigned to them, with the result that important

directives by department and office heads remain unimplemented. With adequate

financial resources, LGUs can achieve several things. One would be the improvement of

basic services delivery by hiring more technically prepared personnel. In addition,

provinces can program leadership development activities for their department heads and

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lower supervisors and install new systems and procedures that facilitate work operations.

At the same time, the personnel can enjoy the benefit of improved working condition.

4. Personnel management. Improving the attitudes, behaviors, and expertise of

the personnel as the “backbone of the organization” will result in better service. One

respondent explained, “Elective officials may come and go, but the employees are here to

stay. A weak, incompetent and unruly pool of personnel will result in a rotten

organization.” The personnel management mechanisms must be improved to ensure the

merit and fitness of people in the government.

Some suggestions to strengthen administrative capability.

1. Improving leadership. An effective leader should have a strong political will to

implement the laws, rules, ordinances, and measures. There should also be a continuing

capability-building initiative to guide the departments in formulating their visions and

missions. Likewise, on their initiative, good leaders must show support to other

departments.

2. Improving organizational structure. Provinces need to re-evaluate their

existing organizational structures to rationalize existing positions and correct imbalances

in their hierarchical arrangements. Also needed are additional plantilla positions for the

departments in order to meet their mandates, maintain a continuous flow of information,

and strengthen linkages among agencies.

3. Improving financial capability. Generating new revenues by enacting and

implementing ordinances can improve provincial financial capability and lessen the

LGUs’ dependence on the IRA. Implementing intensive tax campaigns and monitoring

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tax collection should be pursued, along with streamlining the personnel complement in

order to generate needed funds.

4. Improving personnel. An intensive capability-building program for LGU

personnel can help the province pursue its decentralization objectives. LGUs should

allocate sufficient funding for employee development, as well as improve their

procedures for hiring, promotion, and other personnel initiatives.

The foregoing discussions summarized the perceptions of the department heads

on the four (4) dimensions of administrative capability examined in this study –

leadership, organizational structure, financial resources, and personnel. The strengths

and weaknesses of these dimensions, summarized in the next chapter, provide the

backdrop upon which the study’s conclusions are drawn. The next chapter also presents

the recommendations of the study and areas for future research.

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 Chapter 5. Conclusions and Recommendations

This chapter summarizes the strengths and weaknesses of the provincial

governments’ administrative capabilities to implement decentralization. In the light of

the findings, conclusions are drawn and recommendations are advanced to address the

perceived weaknesses. The recommendations include some areas for future research on

decentralization.

Summary of Findings

This study examined the perceptions of appointive officials in four Philippine

provinces on the effects of decentralization on local governments’ administrative

capability. The summary of findings is presented with respect to the strengths and

weaknesses of the LGUs’ administrative capabilities.

1. Perceived strengths. The following are the strengths of the LGUs in the

implementation of decentralization:

a. Increased personnel. The devolution of national government personnel

to the provincial government added to the existing manpower in the LGUs. The

devolved personnel, who are believed to be better equipped with knowledge and

expertise, are a potent force in influencing provincial development.

b. Governance. The Local Government Code (LGC) encourages stronger

intersectoral participation through the creation of special bodies that involve non-

government sectors in various aspects of government operations.

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 c. Enhanced national-local governments relations. The perception of

“complementarity” and “augmentation” can enhance the relationship between the

national government agencies and the local government units.

d. Improved technology, systems and procedures. Technology is slowly

being adapted to the management systems and procedures of the provincial

governments. This has facilitated the enhanced delivery of basic services by the

LGUs.

2. Perceived weaknesses. The perceived weaknesses in the implementation of

decentralization and the administrative capabilities of the LGUs include the following:

a. LGUs’ lack of adequate understanding of the decentralization law. The

respondents view decentralization in the context of the devolution mandated by

Republic Act 7160, the Local Government Code of 1991, which effectively

transferred power, authority, responsibility, and resources to the local government

units. However, the LGUs’ lack of understanding of the decentralization law’s

intent and of the requirements to achieve its objectives repeatedly surfaced in

several areas of this research. When stakeholders are fully aware of

decentralization’s objectives, they are more likely to participate more effectively

in the planning, implementation, monitoring and evaluation of local development

projects and services.

b. Low level of involvement of departments. The respondents expressed the

need for leadership in harnessing the potential contribution of other sectors to

achieve the objectives of decentralization. Although public awareness and

participation can be heightened in several ways, the extent of department heads’

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involvement in these activities is highly variable. The four provinces do not exert

the same effort in expanding the participation of other sectors. Special bodies

created under the LGC are inactive and potential sources of support for

development projects are not adequately identified.

c. The need for support mechanisms. The respondents indicated the need

to create mechanisms conducive for subordinate participation. Such mechanisms

include open communication channels, rewards and recognition, individual

development opportunities, and a supportive, cooperative, and trusting

environment. In addition is the need for department heads to be models of

commitment in implementing the mandates of decentralization.

d. The need for clearer definition and identification of functions and

responsibilities. The impression of duplication of functions and responsibilities

continues with the involvement of the LGUs in the local implementation of

national programs. The supervision by the national agencies of projects in the

LGUs, and the requirement by the former for the submission of reports by the

LGUs confound the problem of duality of services. This produces weak

coordination among departments in the provincial governments, and between

provincial departments and other sectors. In addition, because of the

reclassification of position titles in the administrative group required by the

Department of Budget and Management Circular, positions with administrative

functions adopted common titles, creating difficulty in distinguishing individual

functions performed.

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 e. The need to clarify hierarchical relationships among provincial

departments. The reorganization of the provincial governments in order to

implement the devolved functions and responsibilities resulted in greater role

specification and specialization. Departments became better organized to

implement programs and projects, allowing for greater internal control. However,

because of the reclassification of positions, more than one position can be

identified as division head. The ultimate source of decision-making authority is

often obscure.

f. The need for proper utilization and maximization of personnel expertise.

Devolution transferred personnel with expertise to implement the devolved

functions. However, there is need for a more thorough analysis of functions in

order to achieve the proper alignment of positions in the provincial organizational

structure. Personnel equipped with the expertise need to be fitted to positions

where such expertise is appropriate in order to maximize the effectiveness of the

increased manpower of the LGUs.

g. Inadequate technical expertise to implement technology-based

programs and projects. In order to meet their added responsibilities, the

provincial governments are trying to keep abreast of technological advancements

by purchasing equipment to upgrade their systems and procedures. Existing

personnel, however, need retraining in order to use these technologies effectively.

h. Absence of handbook on operating procedures. The LGC requires local

governments to formulate a comprehensive multi-sectoral development plan

geared towards the attainment of the LGUs’

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vision/mission/goals/objectives(VMGO) statement. However, the LGUs

currently lack even a basic handbook containing the VMGO statements and the

operating procedures. Such a handbook could create greater awareness among

stakeholders on the important aspects of provincial and department operations.

i. Weak revenue generating capacity of the provinces. Provincial

governments lack the capacity to generate own-sources revenues (OSRs) needed

to cope with their expanded functions. Although the LGC provided opportunities

for LGUs to harness local resources, the LGUs have not vigorously pursued those

opportunities because of their overdependence on the Internal Revenue Allocation

(IRA). The IRA is used as the main source of revenue, compensating for their

deficient OSRs. Respondents said that many local elective officials lacked the

political will to enact new ordinances to improve revenue generation and

collection.

j. Weak personnel management. The personnel dimension of

administrative capability in the provincial governments is weak. The extent of

authority and responsibility of the Human Resource Management unit needs

redefining. The HRM units’ personnel also need appropriate knowledge, skills,

and attitudes in order to revitalize the management of human resources in the

provinces. The mechanisms for selection, appointment, placement, promotion,

and training of employees are not adequate. Systems for monitoring employee

performance, work attitude and behavior, as well as discipline are weak, if not

absent altogether.

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Conclusion

This study affirms that the concept of decentralization is far from straightforward.

As most experts on the subject rightly note, it is instead multi-faceted. This study also

affirms that the administrative capabilities of the local government units are vital in

determining decentralization’s success. The appointive local officials have identified the

strengths that can sustain the LGUs’ implementation of decentralization and the

weaknesses that need to be addressed. Based on the findings, the following conclusions,

discussed in the light of the decentralization literature, are drawn:

1. The concept of decentralization. In the Philippine context, decentralization

integrates administrative, financial, and political dimensions. All three dimensions, as

Ziblatt and O’Dwyer (2003) and Schneider (2003) note, need to be implemented

simultaneously rather than sequentially. This integrative characteristic of

decentralization (also referred to as devolution) is at odds with Falleti’s (2004) sequential

theory of decentralization in which the implementation of one dimension ideally precedes

the other two.

The Philippine decentralization is referred to as devolution. The Local

Government Code devolved power, authority, and responsibility encompassing all three

dimensions from the national government to the local government units. The reference to

decentralization as devolution appears to be inconsistent with Schneider’s (2003) use of

devolution to describe administrative decentralization. Schneider, that is, uses devolution

to describe the administrative, though not necessarily the political and financial, effects of

transferred authority on the degree of autonomy exercised by lower governments.

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 2. The benefits of decentralization.

a) The LGUs can maximize the benefits of decentralization only when both

national and local governments satisfy the conditions required for its implementation.

This is consistent with Kulipossa’s (2004) contention that decentralization can succeed

“only when complementary policies and national or local conditions are in place”

(p.768). The respondents widely reported that the LGUs lack the administrative

capability to undertake such an overwhelming transfer of power, authority, resources, and

responsibilities provided by the Local Government Code (LGC). And, the support

provided by the national government – financially, administratively, and politically – has

been extremely inadequate. The national government needs to provide substantially more

support to local government units on all three of these dimensions, especially to those

units having lower income classifications such as the third-, fourth-, fifth-, or sixth-class

LGUs.

b) The devolved responsibility for delivering basic services brings government

closer to the grassroots. While this is a positive feature of decentralization, the capacity

of local government units to implement the mandates of the LGC has been overlooked.

With the scope of mandates uniform for all LGUs regardless of their income

classification, lower-income LGUs (lower than first class) will be hard-pressed to

implement their devolved functions. Even the first-class provinces studied here

encountered serious difficulties in carrying out their devolved functions.

3. The problem of political will in implementing decentralization. The lack of

political will among elective officials to implement the mandates of the LGC is especially

evident in the local government administration of the four provinces studied. Those

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provinces, all of which are situated in a region (Region I) whose political culture is

characterized by traditional politics maintained by political dynasties through the

decades, share the same problem of lack of political will among elective officials. This is

especially evident in the financial aspect of local governance in which ordinances

upgrading revenue generation measures either have not been passed or existing measures

have not been implemented. Without adequate funding appointive officials face

problems in successfully implementing their plans and projects.

In these local government units, politics is the domain of elective officials, while

administration is the domain of the appointed department heads and their subordinates.

The LGC provides numerous opportunities by which the elective officials can be more

development-focused and politically responsive. However, the final decision for program

planning, implementation, and funding still rests with elective officials and their political

agendas.

4. Importance of administrative capabilities for decentralization. LGUs can

implement decentralization more effectively if they are equipped with adequate and

appropriate administrative capabilities. The dimensions of administrative capability –

namely, leadership, organizational structure, financial resources, and personnel – all need

strengthening. The LGUs continue to have difficulty in meeting their financial

obligations to personnel who have been assigned responsibility for the newly devolved

functions. Although the LGC allows greater opportunities for the local government units

to explore possible sources of new revenues, LGUs still lack the means to generate and

collect them. Furthermore, the LGUs lack: (1) sufficient leadership and managerial

competencies, (2) the necessary organizational structure and technology, and (3)

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adequately trained personnel to plan and implement programs and projects effectively

and efficiently in order to achieve the benefits promised by devolution.

5. Leadership requirements for decentralization. The appointive officials’

perception of what leadership entails closely matches Fairholm’s (1998) concept of

leadership as managing people and resources. That role requires that managers not only

have substantive knowledge and job-related skills but also the capacity to provide

direction and guidance to their subordinates (also Behn, 1998). Many of the department

heads interviewed recognize the need for better leadership by recommending the creation

of more open communication channels, rewards and incentives systems, individual

development opportunities, and a supportive, cooperative, and trusting environment. The

appointive officials’ perception of the leadership requirements of their jobs thus go

beyond the formal structures of authority and responsibility to include, following Prachett

and Wingfield (1996), new informal norms, symbols, beliefs and values.

In the four provinces studied, department heads perceive that their influence on

their subordinates is strong. They believe subordinates pattern their behaviors after their

leaders’ behaviors. Necessarily, elective and appointive officials must serve as models of

positive behaviors and responsiveness. Effective implementation of decentralization

depends largely on the values that elective and appointive officials bring to their jobs.

But, which values should elective and appointive officials bring to their jobs in order to

implement decentralization effectively? Should they be chiefly the values of neutrality

(non-partisan commitment to service), advocacy (continuing pursuit for change and

development), and/or responsibility (responsiveness to public welfare and concerns),

which Mouritzen and Svara (2002) regard as crucial for top-level organizational leaders?

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 6. LGUs’ organizational structure for decentralization. Three conclusions are

drawn on organizational structure as a dimension of administrative capability. They are:

a) Duality of service. The problem of duality of service remains despite

the widespread perception that national agencies still perform many functions that

have been supposedly devolved to the local governments. The implementation of

national projects by local governments continues to create the impression of

duality of service. Also, there appears to be duplication when national agencies

support devolved functions implemented by local offices that are merely optional

under the Local Government Code, such as those providing environmental

protection services.

b) Functional and hierarchical arrangements of departments. The local

governments were reorganized in order to provide an organizational structure

responsive to the mandates of the Local Government Code. Included in these

reorganizations were the creation of several new mandatory and optional offices

and positions.

The reorganization strengthened the provincial governments’ structures by

clarifying the areas of responsibilities of each department and defining the

specialized functions of each position within it. The mandates of each department

were more specifically defined allowing better focus and concentration on key

areas and concern. The reorganization also avoided the overload of functions in

one department as was the case, for example, in the previous structure of the

Provincial Treasurer’s Office, which managed the revenue generation, collection,

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and disbursement of funds; supply, property, and records management; and even

occasional personnel management functions.

While the organizational structure of the provinces appears to have been

strengthened by reorganization, the respondents noted weaknesses in the new

structure. For example, the placement of positions in some offices created

problems in identifying the sources of decisional authority. Proper alignment of

positions is required in order to clarify the new organizations’ lines of authority.

c) Technology for decentralization. The provincial governments now see

the importance of adopting new technologies. The computerization of records,

the installation of management information systems, and the establishment of

connections among offices through the local area networks (LAN) have been

adopted in order to facilitate work performance. These technologies, however,

need to be sustained by trained personnel and adequate equipment. If provincial

governments can enhance their technological capacities, they may be able to

harness what Harvey (1968) considers to be technology’s chief practical benefit,

namely, as a tool for investigating problems concerning “organizational

processes, including those of decision-making and patterns of inter-organizational

conflict” (p. 247).

d) Coordination and collaboration of stakeholders. The relationship of

the LGUs with other decentralization stakeholders in the provinces requires

strengthening. The opportunities for collaboration are present in the special

bodies created by the LGC. However, coordination with these bodies has not yet

yielded positive contributions to the provinces’ development. As representatives

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 of the provincial governments, department heads need to be knowledgeable not

only about their own jobs but also skillful in cultivating collaboration among

various stakeholders.

7. The fiscal administration of LGUs. The examination of the financial resources

dimension of provincial governments’ administrative capabilities revealed the difficulties

encountered by LGUs in generating funds to support devolved programs and projects. It

also confirmed the LGUs’ dependence on national government transfers, particularly as

Cuaresma and Ilago (1996, citing Bird, 1995) note, those from the Internal Revenue

Allocation. The LGUs’ have been largely ineffective in exploring revenue sources other

than those specifically identified in the LGC. This has been accompanied by a lack of

political will among elective officials to implement revenue measures. As Manasan

(1995) warned, LGUs need to exercise more initiative in revenue generation and to

capitalize upon the opportunities provided by the Code.

The findings also revealed the need to strengthen the other aspects of local fiscal

administration such as budgeting processes, expenditure management, and supply and

property management. While budget preparation was not a focus of the study, serious

weaknesses in that process surfaced.

8. Personnel management in the provinces. The readiness of LGUs to adopt new

Human Resources Management (HRM) practices is uncertain. The provincial HRM units

are generally weak. As Joaquin (2002) asserts, human resource management strategies

need strengthening. Improving personnel management practices, generally, all requires

greater political will and support. Local government units can adopt progressive HRM

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practices only if the local chief executives are responsive to the personnel management

requirements of the Local Government Code.

Recommendations

Based on the preceding analysis, the following recommendations are proposed:

1. Recommendations for the perceived weaknesses.

a. Leadership-related weaknesses

1) Provincial department heads need to encourage the participation of

other sectors in the new special bodies created under the LGC. As the Vice-

Chairman of the Local Health Board, for example, the Provincial Health Officer

can influence various health-related undertakings. The Provincial Treasurer, who

is also a member of the Local School Board, can assist in developing provincial

education-related plans and projects. The Provincial Planning and Development

Coordinator can assist the Local Development Council in formulating

development plans.

Other departments whose heads are not involved in the above-mentioned

special bodies can also initiate the formation of special bodies for other basic

LGU services such as agriculture, social welfare and development, or

infrastructure development. As of the present, Bids and Awards Committees in

the provinces have been created (despite their non-inclusion in the LGC) to help

safeguard transactions in contract negotiations. In these committees, various the

non-government sectors participate as observers.

Department heads should promote collaborative relationships with other

departments and greater participation from other sectors in order to achieve

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greater horizontal integration among program implementers. For example, the

mandates of the Offices of the Provincial Agriculturist, Provincial Social Welfare

and Development Officer, and Provincial Veterinarian provide many

opportunities for developing partnerships with other sectors. The Provincial

Agriculturist should assist farmers, fishermen, and local entrepreneurs by

providing information about technologies arising from recent agricultural

research. The Provincial Social Development Officer’s coordinative role with

government agencies and non-government organizations is specifically prescribed

in Section 483(b)(3)(vi). The role of the PSDO is to protect needy,

disadvantaged, underprivileged or impoverished groups or individuals. Likewise,

the Provincial Veterinarian’s role is to protect public health, which requires

collaboration with other sectors both within and outside of the provincial

government.

2) Department heads must provide a supportive and motivating

environment by strengthening the communication channels, rewards and

incentives programs, and individual development opportunities for subordinates.

LGUs do not conduct regular meetings or consultations, either between the

department heads and the local chief executives or between the department heads

and their subordinates. Listening to one another is important in building a

supportive, cooperative, and trusting environment. Rewards and recognitions

bolster the morale of subordinates. The provision of development opportunities

through formal means such as training programs and scholarships and through

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informal means such as delegation, mentoring, or developing understudies can

create a supportive environment.

b. Organizational structure-related weaknesses

1) The LGUs and national agencies whose basic mandates were devolved

to the LGUs must clarify individual areas of concern to solve the “duality of

service” problem.

2) To clarify the functional configuration problem resulting from the

implementation of DBM Circular 2004-3, differences in functions performed

among positions similarly titled should be indicated in parenthesis following the

position title; e.g., Administrative Officer III (Records Officer). This

presentation not only clarifies the functional specialization of the position but also

the level of authority in the organization’s hierarchy. This would also facilitate

the determination of qualification requirements in personnel actions.

3) The LGUs should review their organizational structures and realign

positions to the offices where they are appropriate in order to maximize the use of

incumbents’ expertise. Adjustments are also needed in certain offices in order to

clarify the source of authority for decisions. Likewise, the relationship needs to

be clarified between the department heads and the Provincial Administrator where

the latter is placed at a rung higher than the other department heads. The LGC

indicates that the heads of the different offices (including the Office of the

Provincial Administrator), whether mandatory or optional in nature, are all at the

department head level.

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 4) Department heads should be more aggressive in defining job

requirements, monitoring employee progress on the job, and evaluating individual

performance. Department heads should devise strategies to harness employees’

creativity and innovativeness, and minimize their idling or doing other things on

the job.

5) LGUs must provide adequate opportunities and resources for employee

development, especially for those employees who need high levels of technical

expertise to carry out their jobs.

6) Wider dissemination of the provinces’ vision/mission/goals and

objectives can increase stakeholders’ awareness of all of the provincial

governments’ plans to respond to the mandates of decentralization. By more

openly displaying their VMGOs, department heads can educate both their

personnel and their clients about their departments’ missions and priorities.

c. Financial resources-related weaknesses.

1) The Sangguniang Panlalawigan (Provincial councils) must have the

political will to pass legislation allowed by the LGC for updating revenue

ordinances and to empower the Chief Executives to implement ordinances already

legislated. Likewise, the local Chief Executives must have the political will to

implement sanctions where failure to generate revenues results from tax evasion

or avoidance.

2) LGUs should undertake more vigorous tax information campaigns to

impress upon constituents their responsibility to pay their taxes in order to sustain

public services. Tax campaigns should not be limited to provincial taxation, but

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should include areas where LGUs obtain shares in the Internal Revenue

Allocations (IRA). As the collecting arm of the province, the Provincial

Treasurer’s Office should devise strategies to facilitate the payment of taxes. In

addition, the Chief Executive can temporarily assign personnel from other

departments during the peak of the taxation season to ameliorate personnel

shortages.

3) LGUs should exercise creativity in generating sources of revenue

outside those identified in the LGC and otherwise be more entrepreneurial in

finding additional sources of revenue. The other provinces should explore

approaches similar to those used in Province “C,” which strengthened its taxation

capacity through the economic enterprises in the province. Province “C” has been

successful in converting its provincial hospital into a corporation jointly run by

the provincial government and non-government sectors. The provincial hospital

is now generating revenue to support its operating expenditures.

d. Personnel-related weaknesses:

The personnel management units of the four provinces are at present more

rubber-stamp functionaries than progressive participants in the decentralization

processes. Despite the Local Government Code’s institutionalizing the human

resource development concerns of the LGUs, HRM units typically remain as

simply subordinate offices attached to other line departments in the provinces.

The on-going Congressional review of the Local Government Code should

consider elevating the HRM units to the status of other LGU line departments and

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 their authority to carry out various personnel management functions should be

clearly defined.

Also, the LGUs should provide for the continuing development of the

HRM personnel by equipping them with appropriate knowledge and skills for

implementing their expanded functions. Likewise, a responsive staff

development program should be adopted for all the personnel of the LGUs.

2. Areas for future research. This study was conducted in four first-class

provinces. Respondents’ perceptions revealed that administrative capability is important

for LGUs in order to realize the objectives of decentralization. Certain strengths and

weaknesses in the dimensions of administrative capability are noted and

recommendations are forwarded. This study did not determine the extent to which LGUs

are or are not in fact administratively capable with respect to the core dimensions of

leadership, organizational structure, financial resources, and personnel. It also did not

explore whether the implementation of decentralization was a success or a failure.

The research did reveal, however, significant difficulties experienced by first-

class provinces of the Philippines in implementing decentralization. Further research to

determine the extent to which these LGUs can achieve the objectives of decentralization

needs to be undertaken. Such research might also reveal how the LGUs measure up to

standards established by decentralization-monitoring agencies such as the Department of

Interior and Local Government (DILG), the Bureau of Local Government Finance of the

Department of Finance (BLGF-DOF), and the National Economic and Development

Authority (NEDA). The gaps identified could suggest policy alternatives to aid local

governments in realizing the advantages initially promised by decentralization.

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 Research, similar to the present study, among lower-classification provinces or

other levels of local governments (municipalities, cities, and barangays) in other

geographical locations (other than Region I) may provide better information from which

to generalize about the importance of administrative capabilities for LGUs. Infusing

these other variables into the research framework can generate a more complete picture

of the LGUs’ experience in implementing decentralization. The number of provinces

(four), classification (first class), and geographical location (Region I) in this present

research limit the generalizability of its conclusions and recommendations. The

participation of elective officials in a parallel study would provide perceptions from a

different angle. Such perceptions of the elected officials responsible and accountable for

the LGUs might reveal needed policy changes with respect to national-local relations and

local and intersectoral relations. In addition, such findings may indicate whether the

national government needs to modify the extent and scope of devolution to each level of

local government.

Studies using variables other than administrative capability, such as

organizational culture, administrative and management practices, and other

organizational approaches, may provide insights into the strategies or mechanisms

needed to implement decentralization successfully.

Research studies, other than those of a chiefly perceptual nature, could explore

such concerns as:

a. The extent to which LGUs possess the administrative capabilities to implement

decentralization. The financial capability of LGUs, the strengths and weaknesses of their

LGUs organizational structures, the problems of personnel administration, and the

138
weaknesses in leadership practices could reveal alternative policies and practices

concerning decentralization.

b. Fifteen years after the passage of the LGC and the implementation of

decentralization, can the success of the Philippine decentralization initiative be

determined? The dimensions of administrative capability – leadership, organizational

structure, financial resources, and personnel – can be used in determining the

effectiveness of decentralization as a strategy for development, as a governance structure,

and as an avenue for self-governance. Findings may indicate the extent to which

decentralization has been responsive to such general objectives of Philippine society as

economic development, political stability, or socio-civic development.

A final note

This study has revealed several successes and problems associated with the

implementation of decentralization in the Philippines, but it does not provide a complete

picture. Both the national government and the local government units can harness the

benefits of decentralization by increasing the understanding by LGU officials, employees,

and local constituencies of the Local Government Code’s purposes. On the one hand, the

national government should provide much-needed resources to support the LGUs’ efforts

to improve their administrative capabilities. On the other hand, the LGUs must exercise

greater initiative to educate their constituencies and take greater advantage of the

mechanisms currently provided by the LGC to spur local development.

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150
 Appendix A

Philippine Local Government Officials’ Perceptions of Decentralization

and its Effects on Local Governments’ Administrative Capability

Interview Guide

I. Contextualizing Decentralization in the Philippines

1. What is your overall impression of how decentralization has thus far been
implemented by the Philippine local governments?
2. What are the chief benefits of decentralization to your governmental unit?

3. What are the principal problems that you have experienced during its
implementation?

II. Exploring the dimensions of administrative capability

1. The Philippine decentralization law, RA 7160, is considered landmark legislation,

having given substantial power, authority, and resources to local government
units. We know that RA 7160 also transferred significant responsibilities to
LGUs. Given these responsibilities, what administrative capabilities need to be
possessed by LGUs in order to achieve a meaningful and successful
decentralization?

2. Four dimensions of administrative capability have been identified in the Philippine

literature on decentralization.

A. Leadership

1) What leadership requirements should decentralization actors, particularly

department heads, possess in order to influence efficient and effective
delivery of services under conditions of scarce resources?

2) In what ways can decentralization actors, particularly department heads,

expand public participation in locally administered programs?

3) In what ways can department heads help the LGUs, in this particular case,
the province, obtain financial and technical support from other sources?

4) What is required from a department head in order to create an environment

in which subordinates are motivated to implement local initiatives?

151
B. Structure

b.1 The Problem of Duality of Service

1) Do national government agencies perform similar functions to those

performed by the LGUs under the devolved set-up? What are some
examples?

2) The Local Government Code provides that funding for various

activities may be taken from national agencies’ funds appropriated in
the annual general appropriations act. What problems, if any, do the
LGUs confront as a result of this?
3) In what ways can the problem of duality of service be avoided if not
entirely eliminated?

b.2 Organizational Differentiation

1) How have the functional arrangements of the various departments in

your province been affected by decentralization?

2) What actions are necessary to improve coordination and control in

implementing the decentralized functions?

b.3 Factors Influencing the context of organization

b.3.1 Size:

1) A significant number of personnel from national government

agencies were devolved to the provinces. How have these
transfers affected your province’s administrative capability?

b.3.2 Technology:

1) What technologies, new or existing, were needed to implement

decentralization effectively?

2) Is your province equipped with these technologies?

3) What problems related to technological requirements did

decentralization create for your provincial government? In what
ways have or can these problems be solved?

b.3.3 Organizational Charter:

1) Does your province have a statement of vision, mission, goals and

objectives? If so, how was this developed? If no such statement
currently exists, should the province formulate one?

152
 2) Does the province have a handbook of operating procedures?

b.3.4 Interdependence:
1) How much coordination is needed between your department and
other departments in the province in order to carry out the
decentralized functions?

2) How would you characterize the interaction between and among

departments in your province, and between the province and
other sectors, both governmental and nongovernmental?

C. Financial Resources

c.1 Changes in taxing power

1) How has the taxing power of your provincial government been affected
by the implementation of RA 7160?

2) Has the revenue generating capacity of the province been improved as

a result of decentralization?

3) A 2005 World Bank Report contends says that LGUs are “dependent
on the IRA for an average of 69% of their total revenues and 73% of
their expenditures.” How has your unit’s dependence on the IRA
affected your ability to implement the decentralized functions?

4) What other issues continue to concern the LGUs, particularly the

provinces, as they implement the new taxation measures?

c.2 Accessing other sources of funding

Other funds are available to LGUs from several sources, such as

loans/borrowings, calamity funds, inter-local transfers, shared taxes
from other laws, and revenues from bonds.

1) To what extent has your province used these other funding sources?

2) How are the funds from these sources used in order to implement
the devolved functions?

D. Personnel

1) Does your province have a personnel management unit that addresses

human resource management concerns?

2) How adequate are current mechanisms and procedures for:

153
 a. hiring and retaining competent and qualified employees to implement
the decentralized functions;
b. permitting mobility within the provincial government’s organizational
structure;
c. promoting people within the ranks of the different departments in the
province; and
d. promoting human resource development and training opportunities?

4) What problems does the province face in the areas identified above and
how are these problems being addressed?

III. Strengthening Administrative Capability

1. On the whole, which of the four dimensions of administrative capability—

leadership, organizational structure, financial resources, and personnel—do you
consider as needing the most improvement?

2. In what specific ways could these be improved or strengthened?

154
Sample Letter to Provincial Governors Appendix B-1

August 1, 2006

HON. ______________________
Provincial Governor
Province of _________________
Provincial Capitol Building
___________________________

Dear Gov. ____________:

This is in connection with the research study entitled “Philippine Local Government Officials
Perceptions of Decentralization and its Effects on Local Governments’ Administrative
Capability” being undertaken by Miss Buenafe F. Alinio of Vigan City, Ilocos Sur,
Philippines. The study aims to contribute to decentralization theory by investigating the
requirements of administrative capability for local governments units (LGUs) to make the
implementation of decentralization meaningful and successful. The dimensions of
administrative capability defined in Philippine literature on decentralization which are subject
of the study include structure, personnel, financial resources, and leadership.

Miss Alinio is currently a student in the School of Public Policy and Public Administration of
The George Washington University here in Washington, DC, where she is pursuing the
degree of Doctor of Philosophy. The research study mentioned above is her dissertation
study, the final requirement to advance her candidacy in the program.

As her Academic Adviser and the Chairman of her Dissertation Committee, may I endorse
Miss Alinio’s study to be undertaken in your provincial government. She seeks participation,
as interviewees, of department heads of the mandatory positions in the province as her
primary source of data; and review of documents, as may be deemed necessary, as the
secondary source of data.

The dissertation study has passed the preliminary requirements for dissertation research and
has complied with the requirements of the University’s Institutional Review Board (IRB), the
body that oversees research involving human subjects. She is tentatively targeting the
second week of September, 2006 to begin her research. We would appreciate very much if
the department heads listed in the attached sheet would agree to indicate their preferred dates
and times for Miss Alinio’s visit.

Your support of Miss Alinio’s study will be greatly appreciated.

Very truly yours,

DR. MICHAEL M. HARMON

Academic Adviser and
Chair, Dissertation Committee

Encl.: a/s

155
Attachment to Permission Letter Appendix B-2

Province of _______________
Proposed Dates of Visit: ______________

Preferred Date Preferred Time

Department Heads of Of
Interview Interview

1. Provincial Administrator
2. Secretary to the Sangguniang Panlalawigan
3. Provincial Planning and Development
Coordinator
4. Provincial Treasurer
5. Provincial Assessor
6. Provincial Health Officer
7. Provincial Budget Officer
8. Provincial Social Welfare Officer
9. Provincial Engineer
10. Provincial Accountant
11. Provincial Agriculturist
12. Provincial Legal Officer
13. Provincial Veterinarian
14. General Services Officer
15. Human Resource Management Officer*

* Position may not be department head but included for the role the HRMO plays in the
province's human resource management

156
157
158
 Appendix E

Figure 7. Organizational Chart

Provincial Government “C”

Office of the
GOVERNOR
Office of the
VICE-GOVERNOR
Office of the
PROVINCIAL SANGGUNIANG
ADMINISTRATOR PANLALAWIGAN OFFICE

Office of the PROVINCIAL

PROVINCIAL BUDGET
HRMD JAIL
ACCOUNTANT OFFICE

MISD PSG Office of the PROVINCIAL

PROVINCIAL GEN. SERVICES
TREASURER OFFICE
PESO Nutrition
Office of the PROVINCIAL
PROVINCIAL LEGAL
ENGINEER OFFICE

Office of the Office of the Office of the

PROVINCIAL PROVINCIAL PROVINCIAL
HEALTH OFFICER AGRICULTURIST VETERINARIAN

Office of the PROVINCIAL

LUMC NLUMCH PROVINCIAL INFORMATION
ASSESSOR OFFICE
RDH BDH
Office of the Office of the
POPULATION PROV’L SOCIAL
NDH CMCH
COMMISSION WELFARE &
DEVELOPMENT

PROVINCIAL PLANNING &

DEVELOPMENT OFFICE

159
160
 Appendix G-1

Figure 9. Organizational Chart of the

Office of the Provincial Treasurer
Provincial Government A

PROVINCIAL TREASURER
22 MUNICIPAL
TREASURERS
ASSISTANT PROVINCIAL TREASURER

ADMIN. LOCAL TREASURY LOCAL REVENUE CASH

DIVISION OPERATIONS DIV. COLLECTION DIV. DIVISION

Collection Enforcement Cashier

Unit Unit IV

LRCO LTOO LRCO LTOO Cashier

IV IV IV IV III

Cashier
LTOO II
General III LRCO
Records Services III
Section Cashier
Unit II
LTOO II
Records Security
Officer II Guard II LTOO II
(2) LRCO Cashier
LTOO II I I
Clerk I
Driver I LTOO II
Clerk I Disbursing
U.W. II Officer II
Laborer
Clerk Clerk Clerk Cash
II II II Clerk I

Casual
Casuals
(6)

161
 Appendix G-2

Figure 10. Organizational Chart of the

Office of the Provincial Treasurer
Provincial Government “B”

PROVINCIAL
TREASURER TREASURY
OPERATIONS
REVIEW DIVISION

ASST. PROVINCIAL ASST. PROVINCIAL

TREASURER FOR TREASURER FOR
ADMINISTRATION OPERATIONS

ADMIN. CASH CASH TREASURY REVENUE

DIVISION DIVISION RECEIPTS SUPERVISION COLLECTION
DIVISION DIVISION DIVISION
AO V SUPVG. LTOO IV LRCO III
AO
AO III LTOO III LRCO I
AO V
AO III LTOO I RCC I
AO III
AO II Admin Aide III
AO I
Admin
Aide VI Admin Admin Aide III
Aide VI
Admin
Aide IV Admin
Aide IV
Admin
Aide IV

Admin
Aide III

Admin
Aide II MUNICIPAL
TREASURERS (32)
AO – Administrative Officer
LTOO – Local Treasury Operations Officer
LRCO – Local Revenue Collection Officer
RCC – Revenue Collection Clerk

162
 Appendix G-3

163
 Appendix G-4

Figure 12. Organizational Chart of the

Provincial Treasurer’s Office
Provincial Government “D”

PROVINCIAL TREASURER

ASSISTANT PROVINCIAL ASSISTANT PROVINCIAL

TREASURER FOR TREASURER FOR
ADMINISTRATION OPERATIONS

CASH DIVISION FIELD OPERATIONS DIVISION

Supvg. Administrative Officer
Administrative Officer V (4)
Administrative Officer I (2)
Administrative Assistant II
Administrative Aide VI (3)
Administrative Aide IV (2)
Security Guard I (3)
Administrative Aide I
Loc. Treasury Oprt’ns Officer IV
Loc. Treasury Oprt’ns Officer III
Accountant III
Loc. Treasury Oprt’ns Officer II(2)
Loc. Treasury Oprt’ns Officer I (3)
Computer Programmer I
Administrative Aide III (3)
Administrative Aide I

ACCOUNTING DIVISION LAND TAX DIVISION

Administrative Assistant II
Administrative Aide II (2)
RECORDS & CLERICAL DIVSION
Supvg. Administrative Officer
Administrative Aide VI
Administrative Aide IV (5)
Administrative Aide III
Administrative Aide I (2)
Loc. Rev. Collection Officer IV
Loc. Rev. Collection Officer III (3)
Loc. Rev. Collection Officer II
Loc. Rev. Collection Officer I
Revenue Collection Clerk II (2)
Administrative Aide IV
Administrative Aide IV (3)
Administrative Aide

MUNICIPAL TREASURERS

164
 Appendix H-1

165
 Appendix H-2

Figure 14. Organizational Chart of the

Provincial Veterinary Office
Provincial Government “B”

PROVINCIAL VETERINARIAN

ADMIN.
SERVICES
DIVISION

Admin. Officer*

ANIMAL ANIMAL Supply Officer*

PRODUCTION HEALTH
DIVISION DIVISION
Records Officer*
Agriculturist II Agriculturist II
Admin. Aide IV

Admin. Aide III

BREEDING LIVESTOCK ANIMAL DISEASE REGULATORY

SERVICES DEVELOPMENT PREV. & CONTROL SECTION
SECTION SECTION SECTION

Agri’l Center Agricultural Agriculturist II Market

Chief I Technician II* Specialist I
Livestock
Agricultural Agricultural Inspector Agricultural
Technician II* Technician I* Technologist
Livestock
Agricultural Farm Worker I Inspector Agricultural
Technician I Technician I
Farm Worker I

Contractual
Workers (7)

166
 Appendix H-3

Figure 15. Organizational Chart of the

Provincial Veterinary Office
Provincial Government “C”

PROVINCIAL VETERINARIAN

ADMINISTRATIVE LIVESTOCK VETERINARY

DIVISION SERVICES DIVISION SERVICES DIVISION

Administrative Agricultural Center Veterinarian II

Officer V* Chief*
Veterinarian I*
Administrative Supervising
Officer IV Agriculturist* Veterinarian I

Administrative Agriculturist II Laborer

Aide IV
Agriculturist II
Laborer I*
Agriculturist I
Laborer I*

AGOO BREEDING LA UNION BREEDING

STATION STATION

Agricultural Center Agricultural Center

Chief* Chief *

Farm Foreman Agriculturist I

Farm Foreman* Farm Foreman

Farm Worker II Farm Worker II *

Farm Worker II* Farm Worker I (2)

Farm Worker I (4)

* Vacant

167
 Appendix H-4

Figure 16. Organizational Chart of the

Provincial Veterinary Office
Provincial Government “D”

PROVINCIAL VETERINARIAN

VETERINARY SERVICES ADMINISTRATIVE

& QUARANTINE SERVICES
DIVISION
Administrative
Veterinarian II (5) Officer III
Veterinarian I (3) Planning Officer II
Livestock Inspector III (3)
Livestock Inspector II (2)
Farm Worker II

LIVESTOCK PRODUCTION
SERVICES

Agricultural Center
Chief II
Veterinarian II
Agricultural Technician II (2)
Agricultural Technician I
Farm Foreman (2)
Farm Worker II (2)
Farm Worker I (9)
Administrative Assistant II

168
 Appendix I-1

Figure 17. Organizational Chart

Provincial Planning and Development Office
Provincial Government “A”

PROVINCIAL PLANNING &

DEVELOPMENT
COORDINATOR

INFORMATION & ADMINISTRATIVE,

COMMUNICATION CLERICAL, & UTILITY
TECHNOLOGY SERVICES DIVISION
DIVISION
Clerk II
Information Technology
Officer II Driver I

Utility Worker II

Casual

PLANNING, PROJECT RESEARCH, MONITORING,

DEVELOPMENT AND EVALUATION AND
MANAGEMENT DIVISION STATISTICS DIVISION

Project Development
Officer IV Economist III

Project Development Project Evaluation

Officer III Officer III

Planning Officer III Statistician II

Planning Officer I Draftsman III

169
 Appendix I-2

Figure 18. Organizational Chart of the

Provincial Planning and Development Office
Provincial Government “B”

PROVINCIAL PLANNING &

DEVELOPMENT COORDINATOR

ADMIN.
DIVISION
Admin Officer I

Admin Aide II
Admin Aide II

PLANS AND RESEARCH & SPECIAL LOCAL

PROGRAMS EVALUATION PROJECTS ECONOMIC
DIVISION DIVISION DIVISION ENTERPRISE
DIVISION

Planning Prog. Eval. Prog. Dev’t. Prog. Dev’t.

Officer III Officer III Officer IV Officer III

Economist II Prog. Eval. Prog. Dev’t. Planning

Officer II Officer II Officer II
Planning
Officer I Prog. Eval. Prog. Dev’t.
Officer I Officer I
Agricultural
Technologist Agricultural Agricultural
Technologist Technologist

170
 Appendix I-3

Figure 19. Organizational Chart of the

Provincial Planning and Development Office
Provincial Government “C”

PROVINCIAL PLANNING &

DEVELOPMENT OFFICE
Prov’l Planning & Dev’t Coordinator

Asst. Prov’l Planning & Dev’t

Coordinator
ADMINISTRATIVE
DIVISION

Admin. Officer V
Admin. Officer IV
Admin. Assistant III
Admin. Aide VI
Admin. Aide III (2)
Admin. Aide II
Laborer I (3)

PLANS & RESEARCH, SPECIAL COMMUNITY

PROGRAMS EVALUATION, PROJECTS AFFAIRS
DIVISION & STATISTICS DIVISION DIVISION
DIVISION
Planning Project Dev’t Community
Officer IV* Project Evaluation Officer IV* Affairs Officer IV
Planning Officer IV* Project Dev’t Community
Officer III Project Evaluation Officer III Affairs Officer II
Community
Planning Officer III Project Dev’t
Project Evaluation Affairs Officer I
Officer II* Officer II Community
Planning Officer II* Project Dev’t
Project Evaluation Affairs Asst. I (2)
Officer I Officer I* Administrative
Draftsman III Officer I Economist
Statistician III Aide III
II*
Statistician II
* Vacant Statistician I*
Economic * Vacant
Researcher*

* Vacant

171
 Appendix I-4

Figure 20. Organizational Chart of the

Provincial Planning and Development Office
Provincial Government “D”

PROVINCIAL PLANNING &

DEVELOPMENT COORDINATOR

ADMINISTRATIVE RESEARCH AND PLANNING AND

SECTION (14) STATISTICS PROGRAMMING
SECTION SECTION

Project Development Project Development Project Development

Officer II Officer II (2) Officer IV
Administrative
Officer II Statistician II Project Development
Officer III (3)
Administrative Draftsman III
Aide VI (2) Project Development
Statistician Aide Officer II (6)
Administrative
Aide IV (6) Project Development
Officer I (3)
Administrative
Aide II (3)

172
 Appendix J-1

Figure 21. Organizational Chart of the

Provincial Accountant’s Office
Provincial Government “A”

PROVINCIAL
ACCOUNTANT

ACCOUNTANT IV

BOOKKEEPING RECORDS PROCESSING

Accountant II
Accountant I

Senior Bookkeeper Senior

Bookkeeper (3) (4) Bookkeeper

Bookkeeper (4) Bookkeeper (4)

Accounting Accounting
Clerk II (2) Casual (2) Clerk II (3)

Casual (2) Casual

Utility Worker I

173
 Appendix J-2

Figure 22. Organizational Chart of the

Provincial Accountant’s Office
Provincial Government “B”

PROVINCIAL
ACCOUNTANT

ADMINISTRATIVE RECORDS & BOOKKEEPING

DIVISION PROCESSING DIVISION
DIVISION

Administrative Administrative Accountant IV

Officer IV (2) Officer V

Administrative Administrative Administrative

Assistant II (2) Officer III (2) Officer IV

Administrative Administrative Administrative

Aide II Officer I (2) Officer II

Administrative Administrative Administrative

Aide I Aide I Aide IV

174
 Appendix J-3

Figure 23. Organizational Chart of the

Provincial Accountant’s Office
Provincial Government “C”

PROVINCIAL
ACCOUNTANT

ACCOUNTABILITY ADMINISTRATIVE INTERNAL

DIVISION DIVISION CONTROL DIVISION

Accountant IV Administrative Supvg. Administrative

Officer V Officer
Accountant IIII
Administrative Administrative
Assistant. III Officer V
Accountant II
Administrative Administrative Officer
Accountant I Aide III IV

LABORER (2)

Admin. Admin. Admin. Accountant

Asst. III Asst. III Officer II I

Admin.
Aide VI* Admin. Admin.
Officer II Asst. III
Admin.
Aide IV* Admin.
Asst. III
Laborer
Admin.
Aide VI

Laborer

* Vacant

175
 Appendix J-4

Figure 24. Organizational Chart of the

Provincial Accountant’s Office
Provincial Government “D”

PROVINCIAL ACCOUNTANT

MANAGEMENT & AUDIT ACCOUNTING

DIVISION DIVISION

Supvg. Administrative Officer Accountant IV

Administrative Office V
Administrative Officer IV
Administrative Officer II
Engineer II (2)
Administrative Aide VI
Administrative Aide I (2)
Accountant III
Accountant II
Accountant I
Administrative Assistant III (2)
Administrative Assistant II (6)
Administrative Aide VI (10)
Administrative Aide IV (2)
Administrative Aide III
Administrative Aide I (2)

ADMINISTRATIVE
DIVISION
Supvg. Administrative Officer
Computer Programmer III
Computer Operator III
Administrative Officer III
Administrative Aide IV (2)
Administrative Aide I (2)

176
 Appendix K – 1
Table 9. Report of Revenue and Receipts - General Fund (in Pesos)
Provincial Government "A"
Year 1993 - 2005 (page 1)

REVENUE SOURCE 1993 1994 1995

I. TAX REVENUE
a. Property Taxes 2,818,372.04 3,545,750.87 4,279,825.41
Real Property Tax – Current 1,795,151.61 2,395,919.60 2,818,193.82
Real Property Tax – Preceding 546,152.12 577,542.76 828,662.01
Real Property Tax – Penalty 321,565 367,457.66 374,115.08
Real Property Tax – Transfer 155,503.16 204,830.85 258,854.50
b. Taxes on Goods and Services 151,788.75 12,587,156.68 25,986,263.03
Taxes on delivery trucks and vans 25,870.00 47,690.00 89,189.50
Share on Tobacco Excise Tax - 12,447,000.00 25,801,595.00
Tax on Peddlers - - 210.00
Occupation Tax 85,918.75 89,846.60 93,958.55
Franchise Tax 40,000.00 2,620.08 1,309.98
c. Other Taxes 83,623,365.84 124,405,183.39 137,262,004.80
Mining Tax - - 420.00
Local Government Share on Internal
Revenue Collections 83,411,499.31 124,187,082.00 136,898,909.00
Miscellaneous Tax - Amusement Tax 54,514.75 51,074.34 74,492.28
Miscellaneous Tax - Sand & Gravel 153,284.78 162,387.05 286,305.52
Others - Immigration Tax 4,067.00 4,640.00 1,878.00
d. Fines and Penalties on Tax Rev. 2,747.58 6,907.76 289,908.26
Taxes on goods and services 2,747.58 6,907.76 289,908.26
TOTAL TAX REVENUE 86,596,274.21 140,544,998.70 167,818,001.50
II. OPERATING AND MISC. REV.
a. Government Services 3,329,483.30 4,517,219.25 5,082,641.48
Registration - 50.00 512.50
Inspection Fees 3,301.75 37,430.50 37,546.28
Certification or Secretary's Fees 99,303.28 86,784.22 88,873.52
Building Permit Fees 3,948.95 26,185.74 37,227.45
Governor's Permit Fee 743,783.86 1,039,168.91 1,405,005.73
Occupancy Permit Fee - 3,010.00 680.00
Hospital Fees 2,440,664.26 3,214,433.83 3,368,165.80
Permit Fee for Bangus Fry 38,481.20 110,156.05 75,630.20
Miscellaneous - Bid Proposal - - 69,000.00

177
 Appendix K - 2

Table 9. Report of Revenue and Receipts - General Fund (in Pesos)

Provincial Government "A"
Year 1993 - 2005 (page 2)

REVENUE SOURCE 1993 1994 1995

II. OPERATING AND
MISCELLANEOUS REVENUE .
. . . Continued from page 1.
b. Government Business Operation 2,366,648.94 3,384,344.05 4,398,482.32
Rentals 372,321.80 530,030.80 503,225.48
Sale of Plants and other Farm
Products - 12,250.00 235,812.20
Income from INWD (2%) in
lieu Share 217,862.44 412,843.10 618,236.57
Receipts from Rizal Park 390,942.00 543,505.40 708,780.90
Interest on Time Deposits 1,385,522.70 1,885,714.75 1,973,427.17
Insurance - - 359,000.00
c. Income from Public Enterprises - - 35,224.19
Interest on Loans - - 9,479.53
Repayment of Loans - - 25,744.66
Dividends on Stocks of Private
Enterprises - - -
Dividends on Treasury Notes/Bills - - -
d. Miscellaneous Income 242,096.02 202,321.31 252,315.92
Misc. - Sale of Waste Materials - - 57,948.12
Misc. Income – Miscellaneous 242,096.02 202,321.31 194,367.80
TOTAL OPERATING AND
MISCELLANEOUS REVENUE 5,938,228.26 8,103,884.61 9,768,663.91
III. GRANTS AND AIDS
Grants and Aids from other
Levels of Government - - -
GRAND TOTALS 92,534,502.47 148,648,883.31 177,586,665.41

178
 Appendix K-3

Table 9. Report of Revenue and Receipts - General Fund (in Pesos)

Provincial Government "A"
Year 1993 - 2005 (page 3)

REVENUE SOURCE 1996 1997 1998

I. TAX REVENUE
a. Property Taxes 4,608,653.44 4,922,642.86 6,457,020.09
Real Property Tax – Current 2,821,966.01 3,203,442.60 3,864,978.45
Real Property Tax – Preceding 905,545.10 690,818.80 1,292,347.23
Real Property Tax – Penalty 497,408.13 471,872.66 603,617.26
Real Property Tax – Transfer 383,734.20 556,508.80 696,077.15
b. Taxes on Goods and Services 4,808,243.51 12,311,002.87 33,348,164.91
Taxes on delivery trucks and vans 130,870.00 102,586.83 33,040,000.00
Share on Tobacco Excise Tax 4,561,323.00 12,091,733.00 136,382.95
Tax on Peddlers 500.00 850.00 -
Occupation Tax 111,590.36 88,747.70 118,009.63
Franchise Tax 3,960.15 27,085.34 53,772.33
c. Other Taxes 147,528,367.03 186,188,920.16 199,136,337.60
Mining Tax - 230.00 -
Share on Internal Revenue
Collections 147,304,009 185,838,597.94 198,727,156.49
Misc. Tax - Amusement Tax 105,872.17 156,272.22 122,122.98
Misc. Tax - Sand & Gravel 117,569.40 193,355.00 286,648.13
Others - Immigration Tax 916.00 465.00 410.00
d. Fines and Penalties on Tax Rev. 70,681.58 281,451.13 168,981.80
Taxes on goods and services 70,681.58 281,451.13 168,981.80
TOTAL TAX REVENUE 157,015,945.56 203,704,017.02 239,110,504.40
II. OPERATING AND MISCELLANEOUS
REVENUE
a. Government Services 6,196,317.80 7,126,273.73 9,733,841.53
Registration 2,212.50 7,070.00 1,125.00
Inspection Fees 52,058.60 82,608.03 54,690.15
Certification or Secretary's Fees 133,095.32 147,653.15 148,291.57
Building Permit Fees 4,976.85 14,164.70 60,741.74
Governor's Permit Fee 1,483,592.37 2,228,978.24 2,199,661.59
Occupancy Permit Fee 27,268.45 8,997.95 1,220.20
Hospital Fees 4,403,332.71 4,519,804.46 7,041,036.28
Permit Fee for Bangus Fry 54,881.00 74,397.20 205,775.00
Miscellaneous - Bid Proposal 34,900.00 42,600.00 21,300.00

179
 Appendix K-4

Table 9. Report of Revenue and Receipts - General Fund (in Pesos)

Provincial Government "A"
Year 1993 - 2005 (page 4)

REVENUE SOURCE 1996 1997 1998

II. OPERATING AND MISCELLANEOUS
REVENUE . . . Continued from page 3.
b. Government Business Operations 7,693,837.40 9,967,761.80 9,507,905.38
Rentals 1,036,815.12 1,519,310.80 1,408,653.56
Sale of Plants and other Farm
Products 55,560.00 42,560.31 138,284.50
Income from INWD (2%) in lieu
Share 827,354.62 865,361.34 -
Receipts from Rizal Park 847,758.00 958,163.48 911,049.00
Interest on Time Deposits 4,926,349.66 6,582,365.87 7,049,918.32
Insurance - -
c. Income from Public Enterprises 109,362.07 1,900.00 -
Interest on Loans 27,110.50 - -
Repayment of Loans 64,260.00 1,900.00 -
Dividends on Stocks of Private
Enterprises 1,416.96 - -
Dividends on Treasury Notes/Bills 16,574.61 - -
d. Miscellaneous Income 818,497.89 731,584.93 19,662,825.39
Miscellaneous - Sale of Waste
Materials 1,136.80 - 255.00
Miscellaneous Income – Misc. 817,361.09 731,584.93 420,823.48
TOTAL OPERATING AND
MISCELLANEOUS REVENUE 14,818,015.16 17,827,520.46 19,662,825.39
III. GRANTS AND AIDS
Grants and Aids 3,566,450.00 -
From Other Levels of Government 3,566,450.00 - -
GRAND TOTALS 175,400,410.72 221,531,537.48 258,773,329.79

180
 Appendix K-5

Table 9. Report of Revenue and Receipts - General Fund (in Pesos)

Provincial Government "A"
Year 1993 – 2005 (page 5)

REVENUE SOURCE 1999 2000 2001

I. TAX REVENUE
a. Property Taxes 6,475,913.69 7,902,929.78 7,721,118.00
Real Property Tax – Current 4,031,791.13 4,931,526.13 5,057,226.92
Real Property Tax – Preceding 1,038,172.74 1,337,828.88 1,366,739.70
Real Property Tax - Penalty 659,276.95 757,895.44 773,290.04
Real Property Tax - Transfer 746,672.87 875,679.33 523,932.04
b. Taxes on Goods and Services 176,560,493.12 24,906,071.24 4,068,853.85
Share on Tobacco Excise Tax 176,255,628.00 24,325,628.00 3,674,723.27
Taxes on delivery trucks and vans 157,485.00 217,395.00 234,225.00
Tax on Peddlers - 275.00 -
Occupation Tax 124,189.00 132,180.00 135,045.00
Franchise Tax 23,191.12 230,593.24 24,860.55
c. Other Taxes 240,198,943.85 292,345,042.11 309,500,597.71
Mining Tax - -
Local Government Share on IRA 235,059,116.00 277,723,997.00 286,785,126.00
Miscellaneous - Amusement Tax 65,218.59 102,204.13 76,293.05
Miscellaneous - Sand and Gravel 332,821.26 591,845.98 912,039.66
Others - Immigration Tax 345.00 - -
Loc. Gov't Service Equalization Fund - 5,926,995.00 21,727,139.00
d. Fines & Penalties on Tax Revenues 87,353.34 90,522.20 95,335.36
Taxes on Goods and Services 87,353.34 90,522.20 95,335.36
TOTAL TAX REVENUE 423,322,704.00 325,244,565.33 321,385,904.92
II. OPERATING & MISCELLANEOUS REVENUE
a. Government Services 13,469,486.39 20,392,033.52 18,839,801.26
Registration 1,350.50 4,800.00 1,112.50
Inspection Fees 67,131.28 126,618.33 92,331.05
Certification or Secretary's Fees 144,663.50 205,749.03 199,089.59
Building Permit Fees 17,176.05 47,679.15 33,038.85
Governor's Permit Fee 2,109,305.07 2,101,236.99 2,169,398.28
Occupancy Permit Fee 8,186.25 24,130.60 29,861.24
Hospital Fees 10,811,622.74 17,353,620.42 15,933,259.25
Permit Fee for Bangus Fry 246,761.00 376,999.00 234,024.00
Miscellaneous - Bid Proposal 63,290.00 151,200.00 147,786.50

181
 Appendix K-6

Table 9. Report of Revenue and Receipts - General Fund (in Pesos)

Provincial Government "A"
Year 1993 – 2005 (page 6)

PARTICULARS 1999 2000 2001

II. OPERATING AND MISCELLANEOUS REVENUE
. . . Continued.
b. Government Business Operations 15,677,753.00 16,041,228.27 10,761,419.44
Rentals 1,554,189.00 1,724,667.60 1,511,340.68
Sale of Plant and Other Farm Products 123,946.50 152,177.00 139,257.00
Income from INWD (2%) in Lieu Share - 119,335.28 -
Receipts from Rizal Park 818,344.77 803,835.80 806,800.80
Interest on Time Deposits 13,181,282.73 13,241,212.59 8,304,020.96
c. Income from Public Enterprises 2,075.35 2,558.36 58,200.00
Interest on Loans 1,750.00 1,500.00 8,200.00
Dividends on Private Enterprises
Stocks 325.35 1,058.36 -
Dividend on Treasury Notes/Bills - - -
Miscellaneous - repayment of loans - - 50,000.00
d. Miscellaneous Income 432,241.47 604,606.49 347,968.55
Sale of Waste Materials/Real Property - 273,200.00 -
Miscellaneous 432,241.47 331,406.49 347,968.55
TOTAL OPERATING AND
MISCELLANEOUS REVENUE 29,581,556.21 37,040,426.64 30,008,389.25
III. GRANTS AND AIDS
Grants and Aids from Other Levels of
Government - - -
G R A N D T O T A L 452,904,260.21 362,284,991.97 351,394,294.17

182
 Appendix K-7

Table 9. Report of Income and Expenses - General Fund (in Pesos)

Provincial Government "A"
Year 1993 - 2005 (page 7)

PARTICULARS 2002 2003 2004

REVENUE/INCOME
General Income 4,328,625.59 8,111,333.59 8,627,049.54
Interest Income 4,015,287.44 3,831,196.62 4,813,924.75
Miscellaneous Operating and Service
Income 310,298.15 4,111,673.30 3,738,797.37
Fine and Penalties - Gov't Services and
Business Operations 250.00 164,943.67 62,177.42
Income from Grants and Donations 2,790.00 3,520.00 12,150.00
Property Taxes 10,535,055.94 9,070,088.54 10,385,216.73
Real Property Tax 9,439,262.62 8,107,319.35 9,566,312.58
Property Transfer Tax 1,095,793.32 962,769.19 738,290.40
Special Assessment Tax - - 80,613.75
Taxes on Goods and Services 399,656.27 723,214.22 1,113,583.41
Franchise Tax 22,837.23 24,710.37 18,795.16
Professional Tax 119,794.41 171,878.85 149,880.00
Tax on delivery vans and trucks 257,024.63 526,625.00 944,908.25
Other Taxes 328,282,843.23 458,045,816.90 378,229,721.53
Share from Internal Revenue Collection 327,513,113.00 352,028,351.00 342,702,400.00
Share from Tobacco Excise Tax - 104,507,471.00 34,385,037.07
Amusement Tax 38,472.25 199,266.50 145,580.41
Sand and Gravel 663,014.03 1,119,689.34 755,158.70
Printing and Publication - - -
Fines and Penalties - Tax Revenues 68,243.95 191,039.06 241,545.35
Other Specific Income 26,410,023.16 36,926,288.80 28,634,810.31
Registration Fees 83,423.00 31,975.00 31,365.00
Hospital Fees 16,917,638.84 14,145,964.41 12,786,035.49
Medical, Dental and Laboratory Fees 1,980,273.50 6,315,370.31 6,454,387.91
Library Fees 34,075.00 28,350.00 21,035.00
Inspection Fees 849,901.68 1,132,135.31 1,149,653.50
Permit Fees 1,866,715.24 2,192,352.96 2,234,404.81
Clearance/Certification Fees 638,599.75 821,319.24 587,379.90

183
 Appendix K-8

Table 9. Report of Income and Expenses - General Fund (in Pesos)

Provincial Government "A"
Year 1993 - 2005 (page 8)

PARTICULARS 2002 2003 2004

Other Specific Income. . . (continued
from page 7.)
Receipt from Lease of Properties 2,250,482.17 2,185,563.76 2,531,768.20
Landing, Parking Fees 160,350.00 150,000.00 112,000.00
Other Specific income of the LGUs 1,501,077.42 843,037.67 2,670,487.50
Fines and Penalties - other Specific
Income 127,486.56 9,080,220.14 54,289.00
TOTAL REVENUE/INCOME 369,956,204.19 522,889,120.87 426,888,377.52
TOTAL EXPENSES 328,644,174.62 373,012,897.93 394,559,674.20
Personal Services 202,674,126.66 221,194,277.63 211,924,725.86
Maintenance and Other Operating
Expenses 125,970,047.96 151,818,430.30 182,633,177.34
Financial Expenses - 190.00 1,771.00
OPERATING INCOME 41,312,029.57 149,876,222.94 32,328,703.32
Less: Bank Charges 2,720.00 - -
Other Financial Charges 25,730.85 - -
Subsidies to LGUs 36,006.75 - -
NET INCOME 41,247,571.97 149,876.222.94 32,328,703.32

184
 Appendix K-9

Table 9. Report of Income and Expenses - General Fund (in Pesos)

Provincial Government "A"
Year 1993 - 2005 (page 9)

PARTICULARS 2005
REVENUE/INCOME
General Income 5,719,602.79
- Interest Income 4,589,694.28
- Miscellaneous Operating and Service
Income 488,576.19
- Fine and Penalties - Gov't Services and
Business Operations 73,093.86
- Income from Grants and Donations 568,238.46
Property Taxes 13,726,082.62
- Real Property Tax 12,782,481.65
- Property Transfer Tax 943,600.97
- Special Assessment Tax -
Taxes on Goods and Services 2,463,027.53
- Franchise Tax 1,524,748.95
- Professional Tax 192,828.58
- Tax on delivery vans and trucks 745,450.00
Other Taxes 488,527,847.89
- Share from Internal Revenue Collection 368,279,662.00
- Share from Tobacco Excise Tax 118,673,868.30
- Amusement Tax 226,898.61
- Sand and Gravel 1,148,507.51
- Printing and Publication 3,000.00
- Fines and Penalties - Tax Revenues 195,911.47
Other Specific Income 25,725,724.82
- Registration Fees 47,618.81
- Hospital Fees 12,574,398.50
- Medical, Dental and Laboratory Fees 8,678,421.86
- Library Fees 27,209.00
- Inspection Fees 1,066,176.69
- Permit Fees 2,909,578.46
- Clearance/Certification Fees 422,321.50

185
 Appendix K-10

Table 9. Report of Income and Expenses - General Fund (in pesos)

Provincial Government "A"
Year 1993 - 2005 (page 10)

PARTICULARS 2005
Other Specific Income. . (cont. from p.9) 4,841,852.06
- Receipt from Lease of Properties 1,962,666.85
- Landing, Parking Fees -
- Other Specific income of the LGUs 2,807,387.23
- Fines and Penalties - other Specific Income 71,797.98
TOTAL REVENUE/INCOME 541,004,137.71
TOTAL EXPENSES 449,142,103.57
Personal Services 215,316,637.71
Maintenance and Other Operating Expenses 233,821,817.86
Financial Expenses 3,648.00
OPERATING INCOME 51,862,034.14
Less: Bank Charges -
Other Financial Charges -
Subsidies to LGUs -
NET INCOME 51,862,034.14

186
 Appendix L-1

Table 10. Report of Revenue and Receipts - General Fund (in Pesos)
Provincial Government "B"
Year 1991-205 (page 1)

REVENUE SOURCE 1991 1992 1993

I. TAX REVENUE
Real Property Tax - Current Year 1,331,247.49 1,316,522.72 1,506,593.24
Real Property Tax - Previous Year 315,465.50 357,770.68 441,971.27
Real Property Tax - Penalties 152,334.16 178,011.19 238,335.19
Transfer Fees 99,755.18 94,163.29 193,290.16
Taxes on delivery trucks and vans 14,859.00 26,920.02 12,600.00
Peddler's Tax 855.00 3,510.00 1,080.00
Printing and Publication - 80.00 11,652.42
Amusement 37,865.42 42,697.80 78,885.92
Sand and Gravel 19,619.36 7,499.30 28,328.45
Occupation Tax 34,183.51 69,320.06 70,626.81
Fixed Tax - - 19,000.00
Franchise Tax - 1,200.00 2,005.00
Immigration Tax 2,319.75 2,330.75 2,093.20
Residence Tax 570,821 110,065.48 87,923.86
Internal Revenue Allotment 25,962,643 49,965,391.00 88,876,368.00
Other taxes-Misc. Excise Tax - - -
TOTAL TAX REVENUE 27,209,866 51,817,631.61 91,570,753.52
II. OPERATING AND
MISCELLANEOUS REVENUE
Registration Fee 16,610.00 15,085.00 23,415.00
Survey and Cadastral Fees 481.00 615.00 -
Inspection Fees 605.00 - -
Secretary's Fees 38,378.00 47,048.90 52,774.00
Medical and Dental Fees 51,221.00 48,478.00 1,551,296.83
Tuition Fees 155,798.40 172,244.00 141,994.00
Interest - Time Deposit - - 537,485.77
Rentals - - -

187
 Appendix L-2

Table 10. Report of Revenue and Receipts - General Fund (in Pesos)
Provincial Government "B"
Year 1991-205 (page 2)

REVENUE SOURCE 1991 1992 1993

II. OPERATING AND MISCELLANEOUS
REVENUE . . . Continued from page 1.
Library and Affiliation Fees 76,114.00 71,730.00 81,985.00
Transcript of Records 2,615.00 637.50 865.00
Athletic Fee 10,288.00 9,470.00 9,305.00
Barangay Scholar 10.00 - -
Miscellaneous 8,002.00 17,376.50 183,834.70
Sale of Waste Materials - - -
Miscellaneous – Surcharge 6,204.15 4,976.19 4,544.30
Penalty – Quarry - - -
TOTAL OPERATING AND
MISCELLANEOUS REVENUE 367,221.55 388,400.59 2,588,627.60
III. GRANTS
Grants and Aids - 101,933.00 -
GRAND TOTAL 27,575,096.55 52,205,973.20 94,157,388.12

188
 Appendix L-3

Table 10. Report of Revenue and Receipts - General Fund (in Pesos)
Provincial Government "B"
Year 1991-205 (page 3)

REVENUE SOURCE 1994 1995 1996

I. TAX REVENUE
Real Property Tax - Current Year 2,520,827.95 2,719,901.56 3,018,982.63
Real Property Tax - Previous Year 424,264.44 543,804.24 745,476.72
Real Property Tax - Penalties 257,989.56 297,567.58 446,148.72
Transfer Fees 356,818.25 322,581.41 452,276.39
Taxes on delivery trucks and vans 59,850.00 115,450.00 132,800.00
Peddler's Tax 24,626.82 - 6,500.00
Printing and Publication 11,257.50 - -
Amusement 56,277.68 63,520.40 75,430.29
Sand and Gravel 81,659.08 360,421.00 438,050.42
Occupation Tax 83,829.00 92,906.04 139,834.50
Fixed Tax - - -
Franchise Tax 2,860.00 6,450.00 5,800.00
Immigration Tax 3,949.00 1,671.00 3,039.50
Residence Tax 85,057.7 - -
Internal Revenue Allotment Share 131,148,280.00 144,017,796.00 154,105,475.00
Other Taxes - Misc. Excise Tax 627,000,000.00 281,983,094.00 178,245,506.00
TOTAL TAX REVENUE 759,511,661.33 430,525,163.23 337,815,320.17
II. OPERATING AND
MISCELLANEOUS REVENUE
Registration Fee 10,920.60 8,540.00 10,170.00
Survey and Cadastral Fees - - -
Inspection Fees - - -
Secretary's Fees 52,585.90 63,246.50 58,521.50
Medical and Dental Fees 3,514,966.79 2,716,599.80 2,827,771.21
Tuition Fees 106,681.60 144,689.50 159,367.00
Interest - Time Deposit 2,340,918.02 2,098,340.70 11,273,229.93
Rentals - - -
Library and Affiliation Fees 48,520.00 40,378.00 26,515

189
 Appendix L-4
Table 10. Report of Revenue and Receipts - General Fund (in Pesos)
Provincial Government "B"
Year 1991-205 (page 4)

REVENUE SOURCE 1994 1995 1996

II. OPERATING AND
MISCELLANEOUS REVENUE . . .
continued from page 3.
Transcript of Records 1,585.00 1,485.00 2,070.00
Athletic Fee 5,730.00 5,385.00 6,330.00
Barangay Scholar - - -
Miscellaneous 138,948.20 648,849.51 439,616.61
Sale of Waste Materials - - 105,000.00
Miscellaneous - Surcharge 6,112.42 3,779.92 2,627.01
Penalty – Quarry - - -
TOTAL OPERATING &
MISCELLANEOUS REVENUE 6,226,968.53 5,731,293.93 14,911,218.26
III. GRANTS
Grants and Aids - - -
GRAND TOTAL 765,738,629.86 430,525,163.23 352,726,538.43

190
 Appendix L-5

Table 10. Report on Revenue and Receipts - General Fund (in Pesos)
Provincial Government "B"
Year 1991-2005 (page 5)

REVENUE SOURCE 1997 1998 1999

I. TAX REVENUE
Real Property Tax - Current Year 2,994,198.74 3,482,086.04 3,018,982.63
Real Property Tax - Previous Year 780,849.37 785,419.56 745,476.72
Real Property Tax - Penalties 472,345.58 458,268.52 446,148.72
Transfer Fees 537,309.23 613,634.93 452,276.39
Taxes on delivery trucks and vans 147,550.00 131,500.00 132,800.00
Peddler's Tax - 20,750.00 6,500.00
Printing and Publication - - -
Amusement 70,485.78 60,685.18 75,430.29
Sand and Gravel 265,920.22 415,832.50 438,050.42
Occupation Tax 171,742.60 162,969.17 139,834.50
Fixed Tax - - -
Franchise Tax 9,386.79 - 5,800.00
Immigration Tax 1,959.00 - 3,039.50
Residence Tax - - -
Internal Revenue Allotment Share 205,320,218.80 215,464,950.30 154,105,475.00
Other Taxes - Misc. Excise Tax 129,206,397.00 432,167,000.00 178,245,506.00
TOTAL TAX REVENUE 339,978,363.11 653,763,096.20 337,815,320.17
II. OPERATING AND
MISCELLANEOUS REVENUE
Registration Fee 12,463.00 9,565.00 13,911.00
Survey and Cadastral Fees - - -
Inspection Fees - - -
Secretary's Fees 51,502.80 44,902.50 53,293.00
Medical and Dental Fees 2,545,883.20 1,900,795.75 2,176,263.76
Tuition Fees 193,892.00 187,184.50 193,462.00
Interest – Time Deposit 3,737,719.94 7,474,946.40 404,335.72
Rentals - 9,300.00 169,000.00
Library and Affiliation Fees 25,922.50 18,748.00 19,884.00

191
 Appendix L-6

Table 10. Report on Revenue and Receipts - General Fund (in Pesos)
Provincial Government "B"
Year 1991-2005 (page 6)

REVENUE SOURCE 1997 1998 1999

II. OPERATING AND
MISCELLANEOUS REVENUE . . .
continued from page 5.
Transcript of Records 1,775.00 280.00 1,350.00
Athletic Fee 6,500.00 5,500.00 7,025.00
Barangay Scholar - - -
Miscellaneous 302,927.22 1,264,838.70 548,348.35
Sale of Waste Materials 5,000.00 117,000.00 -
Miscellaneous - Surcharge - 9,595.75 5,129.97
Penalty – Quarry - - -
TOTAL OPERATING AND
MISCELLANEOUS REVENUE 6,883,585.66 11,042,376.60 3,592,002.80
III. GRANTS
Grants and Aids - -
GRAND TOTAL 346,681,948.77 664,805,472.80 263,370,972.59

192
 Appendix L-7

Table 10. Report on Revenue and Receipts - General Fund (in Pesos)
Provincial Government "B"
Year 1991-2005 (page 7)

REVENUE SOURCE 2000 2001 2002

I. TAX REVENUE
Real Property Tax - Current Year 4,059,769.43 3,275,044.68 3,693,504.04
Real Property Tax - Previous Year 1,245,246.33 907,301.72 -
Real Property Tax – Penalties 672,737.74 520,047.59 433,002.81
Transfer Fees 897,834.06 784,085.15 721,214.37
Taxes on delivery trucks and vans 198,170.80 155,050.00 1,500.00
Peddler's Tax 50.00 - -
Printing and Publication 2,800.00 - -
Amusement 126,950.24 182,299.00 -
Sand and Gravel 775,571.20 249,525.00 887,611.50
Occupation Tax 159,573.00 155,675.00 136,750.00
Fixed Tax - - -
Franchise Tax - - -
Immigration Tax 295.00 2,473.00 -
Residence Tax - - -
Internal Revenue Allotment Share 293,083,079.00 277,796,758.00 259,186,743.09
Other Taxes - Misc. Excise Tax - 215,327,552.00 148,215,928.00
TOTAL TAX REVENUE 301,221,731.80 499,355,811.14 413,276,253.81
II. OPERATING AND
MISCELLANEOUS REVENUE
Registration Fee 13,130.00 15,295.00 28,025.00
Survey and Cadastral Fees - - -
Inspection Fees - - -
Secretary's Fees 56,881.00 59,791.70 60,488.00
Medical and Dental Fees 3,197,892.15 3,153,489.37 3,706,531.72
Tuition Fees 227,782.00 237,520.00 385,915.00
Interest - Time Deposit 5,451,231.69 2,931,966.53 -
Rentals 74,500.00 29,000.00 -
Library and Affiliation Fees 22,280.00 31,720.00 83,037
Transcript of Records 455.00 250.00 -
Athletic Fee 7,170.00 7,569.00 23,870.00
Barangay Scholar - - -

193
 Appendix L-8

Table 10. Report on Revenue and Receipts - General Fund (in Pesos)
Provincial Government "B"
Year 1991-2005 (page 8)

REVENUE SOURCE 2000 2001 2002

II. OPERATING AND
MISCELLANEOUS REVENUE . . .
continued from page 7.
Miscellaneous 356,897.18 422,646.49 -
Sale of Waste Materials - - -
Miscellaneous - Surcharge 52,535.57 37,583.04 -
Penalty – Quarry 54,327.56 12,869.50
TOTAL OPERATING AND
MISCELLANEOUS REVEVENUE 9,514,627.15 6,939,450.63 4,287,866.72
III. GRANTS
Grants and Aids - -
GRAND TOTAL 310,736,358.95 502,295,261.77 417,564,120.53

194
 Appendix L-9

Table 10. Report of Revenue and Receipts - General Fund (in Pesos)
Provincial Government "B"
Year 1991-2005 (page 9)

REVENUE SOURCE 2003 2004 2005

I. TAX REVENUE
Real Property Tax - Current Year 3,983,642.11 3,625,805.31 5,523,839.88
Real Property Tax - Previous Year - - -
Real Property Tax - Penalties - - -
Transfer Fees 498,304.07 611,340.53 506,827.40
Taxes on delivery trucks and vans 208,805.00 266,700.00 248,582.00
Printing and Publication 400.00 - -
Amusement - - -
Sand and Gravel 504,529.97 - 103,824.00
Occupation Tax 127,100.00 1,547,431.50 622,922.53
Fixed Tax - 103,068.00 106,350.00
Franchise Tax - - -
Immigration Tax 80.00 - -
Residence Tax - - 80.00
Internal Revenue Allotment 371,074,141 361,748,020.00 387,336,056.00
Other taxes-Misc. Excise Tax 319,814,872.83 451,000,000.00 56,670,239.00
TOTAL TAX REVENUE 696,211,395 818,902,365.34 451,118,640.81
II. OPERATING AND
MISCELLANEOUS REVENUE
Registration Fee 31,575.00 52,285.00 41,430.00
Secretary's Fees 156,389.00 162,530.30 194,438.00
Medical and Dental Fees 4,378,527.99 2,519,488.40 6,038,477.40
Tuition Fees 220,910.00 635,535.00 777,047.00
Interest – Time Deposit 1,003,780.77 2,840,208.10 1,814,955.71
Rentals 27,000.00 158,750.00 449,500.00
Library and Affiliation Fees 396,848.00 155,847.55 127,480.00
Transcript of Records 20,355.00 18,600.00 27,430.00
Athletic Fee 27,525.00 32,250.00 39,360.00
Barangay Scholar - 806,081.97 226,936.32
Miscellaneous 179,309.00 - -

195
 Appendix L-10

Table 10. Report of Revenue and Receipts - General Fund (in Pesos)
Provincial Government "B"
Year 1991-2005 (page 10)

REVENUE SOURCE 2003 2004 2005

II. OPERATING AND
MISCELLANEOUS REVENUE . .
. continued from page 9.
Sale of Waste Materials - 14,950.00 -
Miscellaneous - Surcharge - 720,952.19 898,815.14
Penalty – Quarry - 173,000.00 144,734.00
Fines and Penalties - Local Taxes 369,373.54 79,872.61 40,420.43
Permit Fees 128,900.00 - 249,481.82
TOTAL OPERATING AND
MISCELLANEOUS REVENUE 6,942,496.30 8,370,351.12 11,070,505.82
III. GRANTS
Grants and Aids - -
GRAND TOTAL 703,151,888.30 827,272,715.46 462,189,146.63

196
 Appendix M-1

Table 11. Report of Revenue and Receipts - General Fund (in Pesos)
Provincial Government "C"
Year 1992 - 2005 (Page 1)

INCOME SOURCES 1992 1993 1994

I. REVENUE SOURCES
a. Property Taxes 3,410,281.57 3,440,883.83 5,895,133.47
b. Property Transfer Tax 364,387.42 1,355,534.44 1,480,815.57
c. Taxes on Goods and Services 239,182.46 1,434,841.89 1,388.936.42
Taxes on delivery trucks and vans 121,935.00 448,909.87 572,570.50
Printing and Publication 16,062.36 26,383.38 14,740.58
Professional Tax 101,185.10 222,011.00 257,127.00
Franchise Tax - 737,537.64 544,498.34
d. Other Taxes 49,075,908.33 77,826,713.36 119,113,841.98
Immigration Tax 12,612.40 31,795.00 57,184.50
Amusements 1,904,067.73 1,226,430.61 1,335,029.64
Sand and Gravel 176,712.20 598,569.75 457,144.84
Internal Revenue Collections Share 46,982,516.00 75,969,918.00 117,264,483.00
LG Service Equalization Fund - - -
Share on Tobacco Excise Tax - - -
Excises on Domestic Articles -
II. OPERATING AND MISC. REV.
a. Government Services 172,937.01 1,962,775.67 5,407,660.22
Survey and Cadastral Fees 58.01 31.51 -
Inspection Fees 55 50 -
Certification on Secretary's Fees 171,624.00 119,408.50 186,524.50
Hospital Fees - 1,840,385.66 5,219,535.72
L.U. Medical Center Hospital Fees - - -
Excavation Fees 1,200.00 2,900.00 1,600
b. Government Business Operations 4,076,204.59 1,836,852.05 1,575,852.05
Rentals 171,976.50 217,400.00 291,025.00
Sale of Plants & Other Farm Products - 16,870.33 -
Insurance Fiduciary Bond Premiums - - -
Interests 2,971,836.18 1,474,958.90 1,113,269.44
Miscellaneous 932,391.91 127,622.82 171,345.78
III. CAPITAL REVENUE
Sale of Fixed/Scrap Assets 26,000.00 220,000.00 -
IV. GRANTS AND AIDS
From other levels of government 977,904.63 - 1,446,196.95
GRAND TOTAL 49,103,623.55 88,087,601.24 134,919,500.24

197
 Appendix M-2
Table 11. Report of Revenue and Receipts - General Fund (in Pesos)
Provincial Government "C"
Year 1992 - 2005 (Page 2)

INCOME SOURCES 1995 1996 1997

I. REVENUE SOURCES
a. Property Taxes 7,661,612.69 8,190,466.50 9,092,306.24
b. Property Transfer Tax 1,974,494.13 1,938,009.29 1,985,561.93
c. Taxes on Goods and Services 1,952,928.32 1,496,850.52 1,792,306.32
Taxes on delivery trucks and vans 559,732.75 526,099.50 719,075.00
Printing and Publication 29,485.09 29,854.07 14,275.18
Professional Tax 253,583.05 264,330.00 285,750.25
Franchise Tax 1,110,127.43 676,566.95 773,205.89
d. Other Taxes 131,302,082.65 184,587,018.66 228,681,209.18
Immigration Tax 47,320.00 4,412.50 3,462.00
Amusements 1,401,060.16 1,303,851.16 1,385,151.83
Sand and Gravel - - 1,055,075.35
Internal Revenue Collections Share 129,853,702.49 139,780,002.00 182,639,211.00
LG Service Equalization Fund - -
Share on Tobacco Excise Tax - 43,498,753.00 43,598,309.00
Excises on Domestic Articles 54,522.690.00
II. OPERATING & MISC. REV.
a. Government Services 6,026,237.15 6,033,179.38 6,614,364.81
Survey and Cadastral Fees 50.19 205.2 -
Inspection Fees - - 250
Certification on Secretary's Fees 291,533.45 360,060.00 586,237.72
Hospital Fees 5,734,153.51 5,672,914.18 6,025,377.09
L.U. Medical Center Hospital Fees - - -
Excavation Fees 500 - 500
b. Government Business Operations 3,274,659.90 4,166,801.69 2,378,270.72
Rentals 342,500.00 570,280.00 382,650.00
Sale of Plants & Other Farm Prod. 62,320.00 92,990.00 28,645.44
Insurance Fiduciary Bond Premium - - -
Interests 2,752,946.71 3,375,074.41 1,770,965.58
Miscellaneous 116,893.19 128,457.28 196,009.70
III. CAPITAL REVENUE
Sale of Fixed/Scrap Assets 132,250.00 2,000.00 110,000.00
IV. GRANTS AND AIDS
From other levels of government - - 15,750,000.00
GRAND TOTAL 152,324,264.84 206,414,326.04 266,404,019.20

198
 Appendix M-3
Table 11. Report of Revenue and Receipts - General Fund (in Pesos)
Provincial Government "C"
Year 1992 - 2005 (Page 3)

INCOME SOURCES 1998 1999 2000

I. REVENUE SOURCES
a. Property Taxes 9,687,325.66 7,712,953.26 9,577,785.45
b. Property Transfer Tax 2,101,425.21 1,075,530.03 1,075,530.03
c. Taxes on Goods and Services 1,994,580.90 23,905,296.29 23,905,296.29
Taxes on delivery trucks and vans 666,230.00 590,150.00 590,150.00
Printing and Publication 31,510.69 12,322.35 12,322.35
Professional Tax 258,996.50 168,962.00 168,962.00
Franchise Tax 1,037,843.71 23,133,861.94 23,133,861.94
d. Other Taxes 259,670,154.32 286,403,992.23 272,060,480.23
Immigration Tax 3,160.00 240.00 240.00
Amusements 1,048,886.30 201,066.33 201,066.33
Sand and Gravel 1,449,383.02 1,795,493.90 1,795,493.90
Internal Revenue Allotment Share 195,385,725.00 234,979,388.00 270,063,920.00
Local Gov't Serv. Equalization Fund - - -
Share on the Tobacco Excise Tax 61,783,000.00 49,428,044.00 -
Excises on Domestic Articles - - -
II. OPERATING & MISCELLANEOUS REVENUE
a. Government Services 6,777,693.06 7,686,229.85 9,196,588.01
Survey and Cadastral Fees - 31.00 -
Inspection Fees 250.00 9,400.00 3,050.00
Certification on Secretary's Fees 512,802.35 355,823.05 455,039.25
Hospital Fees 6,264,140.71 7,320,975.80 8,738,498.76
L.U. Medical Center Hospital Fees - - -
Excavation Fees 500.00 - -
b. Government Business Operations 2,146,261.99 3,103,962.49 3,990,398.97
Rentals 699,371.75 875,029.00 933.962.81
Sale of Plants & Other Farm Products 2,500.00 125,646.75 73,946.25
Insurance Fiduciary Bond Premiums - - -
Interests 1,232,820.65 1,776,112.01 2,707,246.86
Miscellaneous 211,569.59 317,174.72 275,243.05
III. CAPITAL REVENUE
Sale of Fixed/Scrap Assets 372,000.00 - -
IV. GRANTS AND AIDS
From other levels of government - 9,000,000.00 3,000.000.00
GRAND TOTAL 282,749,441.14 328,393,726.86 319,806,978.98

199
 Appendix M-4
Table 11. Report on Revenue and Receipts - General Fund (in Pesos)
Provincial Government "C"
Year 1992 - 2005 (page 4)

INCOME SOURCES 2001 2002 2003

I. REVENUE SOURCES
a. Property Taxes 8,427,064.30 8,967,830.49 8,453,000.53
b. Property Transfer Tax 1,234,755.14 1,184,351.12 1,664,158.66
c. Taxes on Goods and Services 2,803,312.29 1,147,984.38 1,227,117.65
Taxes on delivery trucks and vans 463,105.00 475,095.20 537,639.00
Printing and Publication 3,065.00 13,173.02 4,922.90
Professional Tax 178,060.13 184,197.70 228,701.82
Franchise Tax 2,159,082.16 475,518.46 455,853.93
d. Other Taxes 361,810,784.29 334,071,853.40 477,410,955.25
Immigration Tax 265.00 - 250.00
Amusements 319,765.29 290,840.77 320,613.18
Share from LOTTO Draw - 25,369.16
Sand and Gravel 264,412,814.00 1,620,703.23 1,608,129.17
Internal Revenue Allotment Share 322,160,309.40 336,778,617.00
Local Gov't Serv. Equalization Fund - -
Share on Tobacco Excise Tax 10,000,000.00 -
Excises on Domestic Articles 97,078,205.00 - 138,678,226.74
Fines and Penalties -
II. OPERATING & MISC. REV.
a. Government Services 10,127,873.50 18,453,406.42 32,736,608.69
Survey and Cadastral Fees 74.76 - -
Inspection Fees - 400.00 -
Certification on Secretary's Fees 484,896.73 463,641.28 422,322.68
Hospital Fees & Other Hosp. Services 9,642,902.01 6,573,401.17 16,611,360.05
L.U. Medical Center Hospital Fees - 11,311,155.74 15,692,125.96
b. Government Business Operations 5,240,533.28 3,153,111.15 4,801,710.81
Rentals 852,397.67 726,147.44 1,550,891.00
Sale of Plants & Other Farm Products 63,262.75 - -
Insurance Fiduciary Bond Premiums 2,956,187.57 - -
Interests 1,091,636.73 1,833,907.89 560,091.52
Miscellaneous 262,548.56 593,055.82 1,820,200.00
III. CAPITAL REVENUE
Sale of Fixed/Scrap Assets 45,000.00 - -
IV. GRANTS AND AIDS
From other levels of government 15,000,000.00 49,000.00 37,365,544.96
GRAND TOTAL 404,689,322.80 367,027,536.96 563,659,096.55

200
 Appendix M-5
Table 11. Report on Revenue and Receipts - General Fund (in Pesos)
Provincial Government "C"
Year 1992 - 2005 (page 5)

INCOME SOURCES 2004 2005

I. REVENUE SOURCES
a. Property Taxes 9,754,758.83 15,029,493.92
b. Property Transfer Tax 2,034,453.38 2,605,290.41
c. Taxes on Goods and Services 959,032.76 884,579.49
Taxes on delivery trucks and vans 517,416.48 488,425.00
Printing and Publication 4,394.85 13,046.54
Professional Tax 252,269.50 288,334.00
Franchise Tax 184,951.93 99,825.45
d. Other Taxes 405,457,249.99 661,692,288.19
Immigration Tax - 45.00
Amusements 286,713.17 251,538.12
Share from LOTTO Draw 55,741.78 35,538.54
Sand and Gravel 1,509,061.42 1,316,452.04
Internal Revenue Allotment Share 336,825,973.00 361,825,332.00
Local Gov't Service Equalization Fund 638,076.62 -
Share on Tobacco Excise Tax - 149,037,548.00
Excises on Domestic Articles 66,141,684.00 149,037,548.00
Fines and Penalties 188,331.49
II. OPERATING AND MISCELLANEOUS REVENUE
a. Government Services 47,629,591.17 17,827,573.31
Survey and Cadastral Fees - -
Inspection Fees 1,800.00 -
Certification on Secretary's Fees 368,000.00 348,945.00
Hospital Fees & Other Hosp. Services 25,893,489.37 8,356,248.77
L.U. Medical Center Hospital Fees 21,366,301.80 9,122,379.54
b. Government Business Operations 8,562,158.38 10,587,824.36
Rentals 3,002,101.32 2,597,955.66
Sale of Plants & Other Farm Products - 74,783.00
Insurance Fiduciary Bond Premiums - -
Interests 3,844,898.36 6,303,527.40
Miscellaneous 1,525,831.73 1,611,558.30
III. CAPITAL REVENUE
Sale of Fixed/Scrap Assets 211,746.55 -
IV. GRANTS AND AIDS
From other levels of government - -
GRAND TOTAL 474,608,991.06 708,627,049.68

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 Appendix N

Table 12. Statement of Income and Expenditures (in Pesos)

General Fund
Provincial Government "D"
Year 2004-2005

PARTICULARS 2004 2005

INCOME
I. Tax Revenue 50,137,427.03 85,459,149.82
Real Property Tax 36,791,546.00 73,036,092.88
Tax on Business 7,180,604.19 6,528,768.76
Other Taxes 6,265,276.84 5,894,288.18
II. Non-Tax Revenues 50,223,283.67 67,392,442.83
Regulatory Fees 100,940.00 60,950.00
Services/User Charges 309,453.15 520,967.57
Receipts from Economic Enterprises 3,643,205.04 3,504,461.10
Toll Fees - -
Other Receipts 46,169,685.48 63,306,064.15
III. Share from National Tax Collection
(Internal Revenue Allocation) 921,583,993.00 976,273,940.00
IV. Extraordinary Receipts/Grants/Aids -
V. Loans and Borrowings - -
VI. Inter-Local Transfers - -
TOTAL INCOME/RECEIPTS 1,022,103,460.70 1,129,125,532.65

EXPENDITURES
General Public Services 251,147,643.92 269,387,667.08
Department of Education 34,983,255.62 41,795,293.18
Health, Nutrition and Population Control 225,613,474.12 217,607,834.82
Labor and Employment 2,283,376.04 2,293,773.68
Housing and Community Development 119,675,403.63 149,941,345.77
Social Security/Social Services and Welfare 11,699,083.27 13,288,151.15
Economic Services 192,690,788.40 204,258,371.74
Debt Service 104,324,620.95 63,811,760.32
Other Purposes 1,998,320.21 4,625,268.70
TOTAL EXPENDITURES 944,415,966.16 967,009,466.44
EXCESS (DEFICIT) OF INCOME/
RECEIPTS OVER EXPENDITURES 77,687,494.54 162,116,066.21

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