Fuente: © World Bank
http://www.worldbank.org

Local Government Can Improve Philippine Infrastructure

/noticias.info/ Local government units (LGUs) are the Philippines' best bet to improve infrastructure and service delivery, but the national government must help LGUs raise revenue and access other funding sources to realize this potential, a joint Asian Development Bank (ADB) -World Bank study showed Tuesday, reports Dow Jones.

"The national government can provide financial incentives and technical assistance to LGUs to improve their performance," said World Bank Country Director Joachim von Amsberg at the launch of the report "Decentralization in the Philippines: Strengthening Local Government Financing and Resources Management in the Short Term." "The local government can increase their own resource mobilization, improve their planning and budgeting process, and further strengthen transparency and public participation," Amsberg said.

The report said a key to improve LGUs' access to credit is to remove bottlenecks to lending by private financial institutions; develop a municipal bond market; encourage private equity investment; and develop a credit rating system for LGUs. Shamshad Akhtar, Director General at the ADB's South East Asia Regional Department, said inevitably, the national government will have to provide "credit enhancements" to ensure LGUs' access to private funding for various projects.

The Philippines has set up the LGU Guarantee Corp. to guarantee local government debt issues. So far, LGUGC has guaranteed six bond floats totaling PHP1.35 billion. The ADB-WB report said the bond issuance is still small compared to the outstanding LGU portfolio of the Land Bank of the Philippines, a government financial institution that is the primary source of LGU financing. "Bond issuance hasn't picked up for a variety of reasons such as the lack of appreciation and understanding of local governments of this alternative financing mechanism, and the information asymmetry between potential issuers and potential bond investors," the report said. notas_de_prensa_archivo