Transparency in Local Government – The Story So Far 

By Atty. Rachelle Padre-Isip

WHILE SECRETARY JESSE ROBREDO has tragically passed, his legacy at the Department of the Interior and Local Government (DILG) lives on through his campaign to open up local government funds to public inspection.

His brand of leadership was best characterized by the Full Disclosure Policy (FDP) he promoted at the DILG.

Under this policy laid out in the department’s Memorandum Circular (MC) No. 2010-83 and MC No. 2012-141, provinces, cities and municipalities in the Philippines are obliged to inform their communities on how public funds are spent.

The policy itself is nothing new given the 1987 Constitution gives the people the right to be informed on matters of public concern. And this right was written into law as part of the Local Government Code of 1991. Section 352 of it requires local government to post summaries of all revenues collected and funds received including the appropriations and disbursements of such funds during the preceding fiscal year. This must be done within 30 days of the end of each fiscal year in at least three publicly accessible and conspicuous places in the Local Government Unit (LGU) area concerned.

And yet as has so often been the case here in the Philippines, the law was never properly enforced until Robredo came into office when he brought the same transparent and accountable ideals he held as mayor of Naga City. Under his two circulars, LGUs are ordered to display the following documents and transactions:

1. Annual Budget of the current calendar year
2. Quarterly Statement of Cash Flows
3. Statement of Receipts and Expenditures of the previous calendar year
4. Trust Fund (Philippine Development Assistance Fund) Utilization
5. Special Education Fund (SEF) Utilization
6. 20% Component of the Internal Revenue Allotment (IRA) Utilization
7. Gender and Development Fund Utilization
8. Statement of Debt Services
9. Annual Procurement Plan or Procurement List
10. Items to Bid
11. Bid Results on Civil Works, Goods and Services
12. Abstract of Bids as Calculated
13. SEF income and Expenditures Estimates
14. Supplementary procurement plan, if any
15. Report of Local Disaster Risk Reduction and Management Fund Utilization

The DILG defined conspicuous places as including the provincial capitol, city hall, municipal hall, barangay hall, and government-owned facilities to include, but not limited to, social centers, gymnasium, auditorium, manpower development centers, training centers, transport terminal, public market, public school, health station and hospital.

A few months after DILG MC No. 2010-83 was released, the Commission on Audit (COA) came out with an Internal Memorandum dated 8 October 2010, urging concerned COA officials and auditors to monitor management’s compliance with DILG MC No. 2010-83. Any deviation or non-compliance is to be the subject of an Audit Observation Memorandum and would eventually form part of the Annual Audit Report or Management Letter, if necessary.

While the FDP is generally touted as one of the most important tools implemented by the DILG to promote transparency and accountability in local government, not all public officials received it favorably.

Camarines Sur Governor Luis Raymond Villafuerte, Jr for one filed a petition with the Supreme Court seeking its nullification alleging the circulars to be unconstitutional for encroaching on the legislative powers of Congress and violating the principles of local autonomy and fiscal autonomy enshrined.

Villafuerte and the Province of Camarines Sur, in their 27-page petition with G.R. No. 195390 filed on February 18, 2011, said the policy and two other DILG memorandum circulars (No. 2010-138, on the Use of the 20 percent Component of the Annual Internal Revenue Allotment Shares; and No. 2011-08, on Strict Adherence to Section 90 of Republic Act No. 10147, General Appropriations Act, Fiscal Year 2011) are against local autonomy as enshrined in the 1987 Philippine Constitution and the Local Government Code.

CANA sought Villafuerte for comment. He said in a text message: “We are not against full disclosure. In fact, check our website. Bicol DILG commends us for our transparency and full disclosure of our budget. We questioned the manner it was done and processed.”

In a follow-up text message, the former governor said: “Kindly take note that we filed the case against DILG Secretary Robredo in his capacity as DILG secretary…We are questioning the policy in the spirit of local autonomy.”

Villafuerte further said: “We filed it quietly with no media because it is the policy we are questioning, not the person. We hope this case is not sensationalized. We will give you all the information in the spirit of transparency and good governance. We just hope that you will not be used for politics or are not being used for politics.”

The Court has yet to resolve the case at the time of writing.

The following figures indicate how many LGUs have complied with the FDP between 2010 and 2012 according to the DILG’s own research:


Source: DILG

In an interview with the Citizen Action Network for Accountability (CANA), Attorney Maria Rhodora Flores, Chief of the Local Administration Division of the Bureau of Local Government Supervision (BLGS), a unit under the DILG which monitors FDP compliance, explained that they have categorized compliance by LGUs into full, partial, and no compliance.

Full compliance means posting and publication of all the 15 required documents; partial compliance, of at least one of the required documents; and full non-compliance. As of the 4th quarter of 2012, the following data showed the number of provinces, cities, and municipalities that fall under Full Compliance, Partial Compliance or Full Non-Compliance, as designated by the BLGS:

 Regional Performance Profile, 4TH Quarter 2012 (excluding ARMM) 

Source: DILG

Manuel Gotis, officer-in-charge of BLGS told CANA that financial incentives for LGUs that are awarded the Seal of Good Housekeeping by the DILG have helped with the compliance campaign. Only LGUs displaying sound financial management measured through the absence of any adverse COA opinion and their compliance with the FDP are eligible for the extra funding the Seal of Good Housekeeping provides them.

And yet while the DILG generally considers the FDP implemented by Robredo a success, the department laments the fact that there remain a significant number of LGUs which are only partially compliant or even fully non-compliant. Kristen Aragon of the BLGS told CANA that this may be due to these provinces, cities or municipalities not having staff with sufficient understanding of their obligations under the law.

It has also been noted that while DILG MC No. 2011-08 imposes sanctions for non-compliance with the FDP such as suspension or removal from office of the elective local official for gross negligence or dereliction of duty pursuant to Sec. 60 of the LGC, the DILG has not yet sanctioned any local official for non-compliance with the FDP. The only action which the DILG has taken so far is to send “show cause” letters to the local executives concerned to explain or else face sanctions for such non-compliance, according to news reports.

Flores of the BLGS sought to try and justify the reasons for such leniency by arguing that the DILG does not want to take “an adversarial stance” since this might not “benefit” the LGU. Instead, the DILG seeks to enforce the FDP by providing incentives like the Seal of Good Housekeeping and the Performance Challenge Fund.

Robredo’s replacement as DILG chief, Mar Roxas, has expressed a commitment to continue with the FDP policy and has reached out to the Kaya Natin! Movement for Good Governance and Ethical Leadership – a group co-founded by Robredo, to say he wanted to work with those civil society groups engaged in monitoring LGU compliance. And so far he appears to be making good on that promise with the launch of the Full Disclosure Policy portal on the DILG website which was launched in November last year. The portal makes it significantly easier for LGUs, especially those without a website of their own, to post the required documents.

And yet, as recognized by the designers and the World Bank which helped set it up, it still remains a long way from being user-friendly and seems much more aimed at LGUs wishing to upload their data than members of the public who want to access and understand it.

Valenzuela Mayor Sherwin Gatchalian who was at the launch of the site late last year noted that the information in the FDP portal was full of technical jargon and hard for anybody without a financial or accounting background to understand.

As part of the DILG’s response, Flores told CANA that they plan to provide short summaries and explanations for the figures and data presented. And in pursuit of greater openness and understanding, the World Bank set up its own capacity building program entitled “Building on the Full Disclosure Policy: Strengthening Citizen Demand for Local Governance”  in an effort to provide people with enough knowledge to get them to understand local budgeting issues. The program has been conducted in various regions across the country.

There is no doubt that there has been a radical change in the mindset of senior staff at the DILG with regard to opening up the mystery that has long been local government finances – and yet while the FDP and the FDP portal are critical steps in the right direction, neither financial inducements to LGUs or even greater transparency by themselves will prove enough.

Indeed, as the FDP presently demonstrates, transparency by itself is not enough if ordinary people do not know what to make of the data presented. The Supreme Court could also play its part in rejecting any attempt by politicians to roll the clock back. Citizen Action Network for Accountability

(The author is a University Legal Counsel at the University of the Philippines.)