“There are several options for financing LGU programs and projects.”
Director Milagros A. Rimando of NEDA-CAR, who served as resource person on “Fund Sourcing for Development Programs”, explained these options during the Orientation-Workshop on the Preparation of Executive Legislative Agenda (ELA) and Capacity Development (CAPDEV) held at the Crown Legacy, Baguio City last August 30, 2013.
The workshop was sponsored by Department of Interior and Local Government. Participants were municipal mayors, members of the Sangguniang Bayan and municipal department heads of the province of Abra.
The ELA and CAPDEV are integrated development plans of the executive and legislative branches of LGUs.
Rimando told participants that priority LGU projects can be funded from sources outside of the Internal Revenue Allotment (IRA).
These funding options include National Government Assistance (NGA), Official Development Assistance (ODA), and Public Private Partnership (PPP), she explained.
The national government provides assistance to LGUs on priority programs and projects such as Tourism Roads through the Department of Tourism; and the commodity programs through the Department of Agriculture.
The ODA can be loans or grants provided by foreign institutions. The European Union (EU) for example provides loans/grants on issues of the environment; poverty alleviation and rural development; and trade and industry. Korea on the other hand, provides funding support to agriculture development, infrastructure support and water-resource development; and New Zealand provide support on rural development, governance, education and private sector participation.
The PPP means an LGU and a private sector entity will enter into an agreement that allows greater role by the latter in delivering public infrastructure projects.
Rimando advised the workshop participants that when accessing these financing options, “LGUs must show commitment by taking advance actions”, she said. For example, the LGUs should already undertake activities, like checking possible sites for slaughter house before they negotiate with donors. These activities give the donors reasonable confidence that the LGUs are committed and that the projects are likely to succeed.
by Shah Balaw-ing