世界银行-菲律宾农业公共支出审查：特别关注Mandanas裁决对农业食品系统的影响（英）

PublicDisclosureAuthorizedPublicDisclosureAuthorizedPublicDisclosureAuthorizedPublicDisclosureAuthorized

AgriculturePublicExpendituresReview:

WithaspecialfocusontheimplicationsoftheMandanasRulingfortheagri-foodsystem

Philippines

FEBRUARY16,2023

Co-fundedbytheEuropeanUnion

Co-fundedbythe

EuropeanUnion

Philippines

AgriculturePublicExpendituresReview:

WithaspecialfocusontheimplicationsoftheMandanasRulingfortheagri-foodsystem

FEBRUARY16.2023

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1

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Acknowledgments

2

Thisreportwasproducedbyamulti-sectoralteamfromtheWorldBankGroup,ledbyEliWeissandAnujaKar,withtheleadco-authorsJohnNash,NoraOliveros,andRoehlBriones.ThestudyteamalsoincludedKevinCruz,MariaTheresaQuinones,MioTakada,JockAnderson,andPaulaBeatriceMacandog.ThereportwaspreparedundertheoverallguidanceofDinaUmali-Deininger,NdiameDiop,AchimFock,andMadhuRaghunath.KatrinaBrandon,MeganMayzelleandLindsayHartley-Backhouseeditedthereport,andMildrenPenalesprovidedadministrativeandlogisticalsupport.

WethankthepeerreviewersSergiyZorya,RichardRecord,IrinaKlytchnikova,andClarissaCrisostomoDavidandDavidLloricoLloritofortheirveryusefulguidance.WealsothanktheDepartmentofAgriculture(DA)andtheDepartmentofBudgetandManagement(DBM)fortheirexcellentcollaborationandinputtothestudy.WeespeciallythanktheDAOfficeofPolicyandPlanning,theDAOfficeforSpecialConcernsanditsBureauofAgricultureandFisheriesEngineering,andtheDAOfficeofRegionalFieldOperationsfortheirextensivecontributions.Wewouldalsoliketoexpressourappreciationtoallthelocalgovernmentunits(LGUs),focalpoints,andstaffofthevariousagenciesforcontributingtothiswork,andotherstakeholdersfromthepublicandprivatesectorandacademiafortheirconstructiveengagementandinputs.ThisdocumentwasproducedwiththefinancialassistanceoftheEuropeanUnion.TheviewsexpressedhereincaninnowaybetakentoreflecttheofficialopinionoftheEuropeanUnion.

CurrencyEquivalent

ExchangerateeffectiveasofJune8,2022

Currencyunit

=PhilippinePeso(₱)

US$1.00

=52.96

AcronymsandAbbreviations

3

A&F

AgricultureandFisheries

ACEF

AgriculturalCompetitivenessEnhancementFund

ACPC

AgriculturalCreditPolicyCouncil

AFMA

AgricultureandFisheriesModernizationAct

AgPer

AgricultureSectorPublicExpenditureReview

AgGDP

Agriculturalgrossdomesticproduct

AMCFP

Agro-IndustryModernizationCreditandFinancingProgram

ASF

Africanswinefever

BARMM

BangsamoroAutonomousRegioninMuslimMindanao

BFAR

BureauofFisheriesandAquaticResources

CAR

CordilleraAutonomousRegion

CARP

ComprehensiveAgrarianReformProgram

CLUPs

ComprehensiveLand-usePlans

CSA

Climate-smartagriculture

DA

DepartmentofAgriculture

DAR

DepartmentofAgrarianReform

DILG

DepartmentoftheInteriorandLocalGovernment

DTP

Devolutiontransitionplan

F2C2

FarmandFisheriesClusteringandConsolidationProgram

FMRs

Farm-to-marketroads

GAA

GeneralAppropriationsAct

GDP

Grossdomesticproduct

GHGs

Greenhousegases

GOCCs

Government-ownedandcontrolledcorporations

GVA

Grossvalueadded

HLURB

HousingandLandUseRegulatoryBoard

IFPRI

InternationalFoodPolicyResearchInstitute

IRR

ImplementingRulesandRegulationspolicy

LGC

LocalGovernmentCode

LGUs

Localgovernmentunits

M&E

Monitoringandevaluation

MFD

MaximizingFinanceforDevelopment

NCR

NationalCapitalRegion

NFA

NationalFoodAuthority

NIA

NationalIrrigationAdministration

NMIS

TheNationalMeatInspectionService

4

NTA

NationalTaxAllocation

O&M

Operationsandmaintenance

ODA

OneDAAgenda

OECD

OrganizationforEconomicCo-operationandDevelopment

OSEC

OfficeoftheSecretary

₱

PhilippinePeso

PCAF

PhilippineCouncilforAgricultureandFisheries

PCC

PhilippineCompetitionCommission

PDP

PhilippineDevelopmentPlan

PFA

PhilippineFranchiseAssociation

PFM

Publicfinancialmanagement

PFIDA

FiberIndustryDevelopmentAuthority

PFMAT

Publicfinancialmanagementassessmenttool

PhilRice

PhilippineRiceResearchInstitute

PSA

PhilippineStatisticsAuthority

R&D

Researchanddevelopment

RA11203

RiceLiberalizationAct

RBM/RBMS

Results-basedmanagement/Results-basedmanagementsystem

RCEF

RiceCompetitivenessEnhancementFund

RFUs

Regionalfieldunits

RSSP

RiceSelf-SufficiencyProgram

SAFDZs

StrategicAgricultureandFisheriesDevelopmentZones

SGLG

SealofGoodLocalGovernance

Contents

5

ACRONYMSANDABBREVIATIONS

3

LISTOFTABLES

6

LISTOFFIGURES

6

1.INTRODUCTION

18

CONTEXTANDRATIONALE

18

UNDERLYINGSTRATEGIES

21

2.ASSESSMENTOFSECTORALPERFORMANCEANDSTRATEGICORIENTATION

23

ECONOMICPERFORMANCEOFTHEOVERALLAGRICULTURALSECTOR

23

THEPOLICYANDINSTITUTIONALFRAMEWORK:DECENTRALIZATION

28

3.LEVELS,COMPOSITION,ANDSOURCESOFPUBLICEXPENDITURESONAGRICULTURE

33

NATIONALGOVERNMENT

33

LOCALGOVERNMENT

40

REGIONALDISTRIBUTION

43

DABUDGETFRAMEWORK

49

DEVOLUTION2022—2024,RESULTINGFROMTHEMANDANASRULING

50

4.DISTRIBUTIONALIMPACT

63

DISTRIBUTIONASACRITERIONFOREVALUATINGAGRICULTURALPUBLICEXPENDITURE

63

REGIONALALLOCATION

64

5.CONCLUSIONSANDRECOMMENDATIONS

69

CHALLENGE1:CHANGINGTHESTRATEGICFOCUSTOBETTERALIGNEXPENDITURESWITHTHENEWTHINKING

70

CHALLENGE2:IMPROVINGTHELOWEFFECTIVENESSOFCURRENTSPENDINGANDPROVIDINGTHEBASISFORAHIGHER

BUDGETALLOCATIONFORAGRICULTURE

76

CHALLENGE3:DEALINGWITHPUBLICEXPENDITUREISSUESARISINGFROMDEVOLUTION

81

APPENDIXA:ABRIEFHISTORYOFEARLIERAGRICULTURALSERVICEDECENTRALIZATIONEFFORTS

86

APPENDIXB:CALCULATINGTHEPROPORTIONOFGOVERNMENTBUDGETDEVOTEDTOAGRICULTURE

88

APPENDIXC:THEIMPORTANCEOFTHEPOLICYENVIRONMENT

90

APPENDIXD:DEVOLUTIONCASESTUDY

93

6

ListofTables

TABLE1.1GROWTHRATESOFAGRICULTURALGVABYSUBSECTOR,2001–2021(%)IN2018

19

TABLE2.1GROWTHRATESOFAGRICULTURALGVABYSUBSECTOR,2001–2021(%),IN2018PRICES

24

TABLE2.2POVERTYINCIDENCEAMONGFARMERSANDFISHERFOLK,BYREGION,2015AND2018

24

TABLE2.3MAGNITUDEOFPOVERTYAMONGFARMERSANDFISHERFOLK,BYREGION,2015AND2018

25

TABLE2.4THEDAAGENDAKEYSTRATEGIES

31

TABLE3.1SELECTEDAGRICULTURECOMMODITYSELF-SUFFICIENCYRATIO,2015–2018

34

TABLE3.2TOTALDABUDGETBYFUNDINGOFFICE2015–2019,IN₱MILLIONS

36

TABLE3.3ALLOCATIONTOTHECOMMODITYBANNERPROGRAMS,2015–2019,IN₱MILLIONS

37

TABLE3.4NATIONALRICEPROGRAM(INPUTSUBSIDY)2015–2019,IN₱MILLIONS

38

TABLE3.5OSECBUDGETBYPROGRAMS,PROJECTS,ANDSERVICES,IN₱MILLIONS

38

TABLE3.6FINANCIALPERFORMANCE,2019–2021,IN₱MILLIONS

40

TABLE3.7GOVERNMENTALLOCATIONSFORAGRICULTURETOLGUS,BYLGULEVEL,IN₱BILLIONS

40

TABLE3.8LGUEXPENDITUREALLOCATIONBYSECTOR,2015–2019,IN₱MILLIONS

42

TABLE3.9DISTRIBUTIONOFDAEXPENDITUREALLOCATEDTOREGIONSOUTSIDETHENCR

44

TABLE3.10MAGNITUDEOFPOORFARMERSANDFISHERFOLK,2015AND2018,INTHOUSANDS

45

TABLE3.11REGIONALDAEXPENDITUREASAPROPORTIONOFAGRICULTURALGVA,INCURRENTPRICES(%)

46

TABLE3.12COMPARISONOFREGIONALRANKINGBASEDONDIFFERENTAGRICULTURALINDICATORS,2018

48

TABLE3.13MULTIAGENCYAFMACOMPONENTS

49

TABLE3.14TOTALA&FAPPROPRIATIONS,2015–2019,IN₱MILLIONS

50

TABLE3.15THEDEVOLVEDANDPOST-DEVOLVEDFUNCTIONSANDSERVICESOFTHEDA

51

TABLE3.16DAOSECAPPROPRIATIONS,2021–2022,IN₱

52

TABLE3.17NATIONALTAXALLOCATION,2020–2022,IN₱MILLIONS

54

TABLE4.1REGIONALDAEXPENDITUREASAPROPORTIONOFAGRICULTURALGVA,INCURRENTPRICES(%)

64

TABLE4.2COMPARISONOFREGIONALRANKINGBASEDONDIFFERENTAGRICULTURALINDICATORS,2018

67

TABLE5.1DAALLOCATIONFORTHEBANNERCOMMODITYPROGRAMS

72

ListofFigures

FIGURE2.1POVERTYANDMALNUTRITIONINDICATORS,BYREGION(%)

26

FIGURE2.2POLICYFRAMEWORK

29

FIGURE3.1DAAPPROPRIATIONLEVELSIN₱BILLIONS,ANDASARATIOTOAGRICULTURALGVA(%)

34

FIGURE3.2ALLOCATIONOFNATIONALGOVERNMENTEXPENDITURESFORAGRICULTUREANDAGRARIANREFORM,2020–

2022,IN₱BILLIONS

35

FIGURE3.3DISTRIBUTIONOFAGRICULTURALGVABYREGION,2018PRICES(%)

45

FIGURE3.4RATIOOFDAREGIONALEXPENDITURESHARESTOPOVERTYSHARES,2018

47

FIGURE4.1DISTRIBUTIONOFCROPFARMERSBYISLANDGROUP(%)

65

FIGURE4.2THERATIOOFDAREGIONALALLOCATIONSHARESTOPOVERTYSHARES,2018

66

FIGURE5.1ACTUALINTENSITYRATIOSANDATTAINABLEINVESTMENTTARGETS

74

FIGURE5.2AGRICULTUREORIENTATIONINDEX(AOI)FORGOVERNMENTEXPENDITURES

77

7

Abstract

TherecentpositivepolicydirectionsembodiedintheNewThinkingandOneDAagendahavenotyetfullytranslatedintoashiftinpublicexpenditurepatternsinthePhilippineagriculturesector.Oneresultisthatagriculturalgrowthremainslow,andpovertyinruralareas,wherefarmingremainsthemainsourceofincome,hasstayedhigh.Underinvestmentinpublicgoodsinagriculture,vitalforinclusivegrowth,alsodrivesthelackofgrowth.Thecontinuedbiassupportingriceproductionhascomeattheexpenseofotheragriculturalproducts.ThesituationcouldworsenwiththeongoingdevolutionresultingfromtheMandanasRulingoftheSupremeCourtunlesstheshiftintheagriculturebudgetfromcentralgovernmenttolocalgovernmentunits(LGUs)accompaniesclearchangesinexpenditurepolicies.TotakefulladvantageoftheopportunitiesarisingfromthenewstrategicdirectionsandtodevolvemoreresponsibilitiestoLGUs,agriculturalpublicexpenditurepoliciesmustdealwithchallengesinthreedimensions.

FirstisthechallengeofaligningexpenditureswiththeambitionoftheNewThinking.Thereisaneedtotransitionawayfrompreviousandcurrentspendingpatternsfocusedonincreasingself-sufficiencythroughcommodity-basedbannerprograms,especiallyrice,towardsinvestmentsinimprovingtheoverallresilience,competitiveness,inclusiveness,andsustainabilityoftheagriculturesector.Therearethreewaystoachievesuchimprovementsby(a)shiftingfromasingle-commodityandproduction-basedapproachtoamoreholisticandarea-basedplanningapproach;(b)focusingmoreonprogramsthatfundpublicgoodsthatarecurrentlyunder-funded,suchasresearch,agricultureextensionandinnovationsystems,marketinformationsystems,infrastructure,biosecuritysystemsandprogramssupportingclimatesmartagriculture(CSA);(c)providingmoreemphasistoprogramsintendedtoovercomebarrierstocollectiveactionandeconomiesofscale.

Thesecondchallengeisimprovingthecurrentlyloweffectivenessofpublicspending,whichisonefactorbehindtherelativelylowagriculturalshareinthegovernment’soverallbudget.Improvingeffectivenesswillrequirecorrectingtheproblemsthatleadtolowbudgetdisbursementratesandtheinstitutionalandproceduralshortcomingsthatimpedethegovernment’sabilitytomonitorandevaluateoutcomesandmakeevidence-baseddecisions.Itwillalsorequireimportantchangesinhowthegovernmentsupportsfarmers.Therelianceonsupportinstrumentsthatareinefficienttoolsforimprovingfarmers’competitivenessandproductivityneedstochange,particularlygovernmentprovisionofsubsidizedfertilizer,machinery,andotherinputs.Duringthetransitionperiodofthericeliberalization,whensupporttoaffectedricefarmersisneeded,thegovernmentcouldimplementashort-terme-voucherssystem.Suchasystemwouldgrowtheprivatesectorininputmarketsandgivefarmersmoreflexibilityinmanagingtheirproductiondecisionscomparedtothecurrentsubsidies.Inthemediumtolongterm,thegovernmentcouldconsideranevenmoreefficientmechanismanddecouplesupportpayments,whichdonotdependonthetypesofcommoditiesorinputs.

ThethirdchallengeissuccessfullyimplementingthefinancialandfunctionaldevolutionresultingfromtheMandanasRuling.Inthe1990s,theefforttodevolveagriculturalservicesdidnotgosmoothlyandwaslargelyreversed.Toavoidasimilarfatewiththecurrenteffortandfullyrealizethistransfer’spotentialbenefits,thegovernmentmustcarefullyconsiderwhichfunctionstotransferandwhatcapacitybuildingwillbenecessaryforLGUstocarryoutnewlytransferredresponsibilitiessuccessfully.Therewillalsoneedtobesomemechanisminplacetoensurethatspendingdecisionsatthelocallevelalignwiththenationalinterestandstrategies.

ExecutiveSummary

ExecutiveSummary

8

Background

Recentagriculturalpolicychangesbythegovernment—includingtheOneDAAgendapursuedbytheDepartmentofAgriculture(DA)basedontheNewThinkingforAgricultureintroducedin2019—arepositivedevelopmentsthathavethepotentialtoreversetheagriculturesector’srecentstagnantperformance.Thesepolicieshavethepotentialtotransformthesectorifproperlyoperationalized,implyingspendingdecisionsmustfullyandeffectivelyreflectthem,whichuntilnowhasnotbeenthecase.TheRiceLiberalizationAct(RA11203),whichabolishedthelong-standingprotectivequantitativerestrictionsonriceimports,andreplacingitwithasignificanttariff,isindicativeofthetruespiritofthisstrategicshift.

TheMandanasRulingcouldbetransformationalforlocalservicedeliveryifmanagedproperly.ThefavorableSupremeCourtrulingontheMandanasappealrequiresthecentralgovernmenttoincreasetheInternalRevenueAllotment(IRA)—theshareofgovernmenttaxrevenuegoingtothelocalgovernmentunits(LGUs)—startingin2022.TheIRAwillincreasebynearly37.9percentannually,thoughtransferswilllikelydeclineinsubsequentyears.SinceitwillsharemorerevenuewiththeLGUs,thecentralgovernmentintendstodevolvemoreresponsibilityforadministeringandfundingprojectsandprograms.Thoughsuchdevolutionpresentsanopportunitytomakeservicedeliverymoreclient-drivenandimproveaccountability,thereremainsignificantrisksifitisnotwellmanaged.

ThisPhilippinesAgricultureSectorPublicExpenditureReview(AgPER)aimsto(a)helpthegovernmentevaluatethedirectionofspendingpoliciesundertheNewThinkingstrategyand(b)considerthebestwayforwardindevolvingagriculturalservicestoLGUsasaresultoftheSupremeCourt’sMandanas

Ruling.

MainFindings

Levelandcompositionofspendingonagricultureatthecentrallevel

Theoverallbudgetshareallocatedtoagriculturebeganasteadydeclinein2016.By2020,itwaslowerthanmostcomparatorcountriesrelativetothesizeofagricultureintheeconomy.Thisreviewconcludesthatagriculturehasfaredpoorlyinthepoliticalmeleeofbudgetallocation,atleastpartlyduetotheperceptionthatthespendingofagriculturalfundswasineffective.Ofcourse,theDAproposestoraisethebudgetarypriorityaccordedtothesectorinthNationalAgricultureandFisheriesModernizationandIndustrializationPlan(NAFMIP)2021-2030.Demonstratingthatthebudgetdevotedtoagriculturedeliversmoreimpactperdollarwouldsupportthiseffort.

TheDepartmentofAgriculture(DA)receivedthelargestshare—over50percent—ofthetotalagriculturalbudgetin2021–22andisthefocusofthisreview,givenitsdominantshareoftheagriculturalpublicexpenditure.Otheragenciesreceivingsignificantsupportincludethegovernment-ownedandcontrolledcorporations(GOCCs),ledbytheNationalIrrigationAdministration(NIA)andNationalFoodAuthority(NFA),andtheDepartmentofAgrarianReform(DAR).

9

WithintheDA,theOfficeoftheSecretary(OSEC)receivesanaverageof81percentoftheDA’sbudget,withcapitalinvestmentsrepresentingaround16percentoftheOSECbudget.Theseinvestmentsconsistofprojectsfundedfromdomesticsourcesandforeignborrowingsorgrants.Locallyfundedprojectsareshort-andlong-terminitiativescraftedoridentifiedbytheDA,mainlyservingselectedLGUs.Someoftheseprojectshavelastedlessthanayear,whileothersbecamepermanentfeaturesintheDAbudget.Foreign-fundedprojectsareinvestmentsrequiringhugecapitalandlongerimplementationperiods.

ThisreviewidentifieshowspendingpatternshaveevolvedandexamineswhethertheyalignwiththeDA’scurrentstrategicdirectionsandobjectivesandtheirefficacy.Animportantobjectiveunderpinningpastagriculturalspendingpolicywasachievinghighself-sufficiencyinfoodproducts,especiallyrice,throughthesinglecommoditybannerprograms,andbudgetdecisionsreflectedthis.

ThebudgetallocationpatternisinconsistentwiththeNewThinking,yetitdoesnotappearthatitisbeingreallocated.Forthebannerprogramsoverall,thebudgetallocationsfor2021and2022weremorethan50percenthigherthanfor2019and2020.Inthe2022budget,thebannerprogramsaccountedforabout38percentoftheDA’sbudget,comparedto27percentin2020.Mostofthiswasahugeincreaseinthericebudget.However,evenaftersubtractingoutthericeallocation,thebannerprograms’budgetincreasedby23percentfrom2020to2022,from₱8.7billionto₱10.7billion,indicatingthereorientationofspendingprioritieshasnotyetbegun.

DAspendingtosupportriceproduction—includingsubsidies,infrastructure,andagriculturalservicesspecificallyaimedatpalayproduction—isextremelyhighbyanystandard.Whilericeaccountsforonlyaround20percentoftheagriculturalsector’sproductionvalue,riceproductionspendingamountedto57percentofthebudgetforbannerprogramsoraround22percentoftheDA’stotalbudgetin2022.SupportforriceextendsbeyondtheDAbudgetandtheNationalRiceProgram.Itincludesirrigationdevelopmentinrice-growingareas,apaddyprocurementprogramundertheNFA,theRiceCompetitivenessEnhancementFund(RCEF),andriceresearchthroughPhilRice.Riceproducershavealsobenefitedfromhightariffbarriersprotectingthemfromimportcompetition.However,thisischangingwiththericetariffication,whicheliminatedquantitativerestrictionsonriceimportswhileleavingatariffof35percentforimportedricefromASEANcountriesandahighertariffforotherimports.

Suchexpenditurehasbeenmanifestlyineffectiveinraisingriceproductivity.ThePhilippineslagsbehindregionalneighborsandcomparablecountries,withrelativelystagnantyieldgrowthsincethemid-2000s.Wemustaskwhythispublicexpenditurehasnothadalargerimpact.First,asexperiencehasdemonstratedthroughouttheworld,inputsubsidiesareaninefficientwaytoraiseproductivity.Inaddition,fertilizerdistributionproceduresinteractwiththebudgetingsysteminproblematicways.Budgetssometimessufferdelays,whilein-kinddistributionmeansthegovernmentmustbeinvolvedincomplicatedbiddingprocedureswithopportunitiesforslippageormistakesatseveralsteps.Auditsindicatethat(a)somefarmersdonotreceivethefertilizerstheyareregisteredtoget,(b)deliveryistoolate,therebyhinderingfarmers’abilitytofollowgoodmanagementpracticesinfertilizerapplication,and(c)theproductsdelivereddonotmeetfarmers’needsandaresometimesdefective.Thewaysubsidiesaredistributedalsocrowdsoutprivatesectorinvestmentinupstreamactivities.Furthermore,althoughsubsidiesraisebeneficiaries’incomes,theydosoregressivelysincelargerfarmerswhousemoreinputsreceivemoresubsidiesthansmallercounterparts.

10

LevelandcompositionofLGUspendingonagriculture

FinancialincentivesforqualifiedLGUsthatmeetthecriteriaforgoodgovernancearemadeavailableinthenationalbudgetandmanagedbytheDepartmentoftheInteriorandLocalGovernment(DILG).TheincentivesallowLGUstofinancebig-ticketprojectstheycannotaccommodateundertheirrespectivebudgets.ReportsindicatethatsomeLGUswereawardedincentivesseveraltimes,whileothers,particularlythelower-incomeLGUs,couldnotmeetthecriteria.

TheagriculturalallocationforLGUsincreasedovertimeinnominaltermsbutnotasashareofLGUallocation.Accordingtothemostrecentdata,LGUspendingonagriculturein2018wasonly₱8.5billion,afiguredwarfedbywhattheDAreceives.Overthesameperiod,agriculture’sshareintheoverallLGUappropriationfromthecentralgovernmentshrankfrom2.1percentofthetotalin2012to1.5percentin

2018.

TheDevolutionTransitionPlan(DTP)developedbytheDAtocomplywithExecutiveOrder(EO)138didnotspecifytheservicesfordevolutionbutreiteratedthosedevolvedunderthe1991LocalGovernmentCode(LGC).Theseserviceswereallocatedatotalbudgetof₱37.1billionin2020.WhilethisapproximatesthebudgetthatLGUsshouldallocatetomaintaincurrentserviceactivitylevels,therearevalidreasonstodoubtthatLGUswillallocatethisspendinglevel.Noclearmechanismsexisttoensurethattheywill.

AstheDAmovesforwardwithfine-tuningandoperationalizingitsDTP,itwillneedtocopewithmanyissues,asdidothercountriessuchasGhana,China,andVietnamwhentheydecentralizedservicedelivery.AreasthatneedtobeaddressedfortheprocessinthePhilippinesinclude:

a)NeedforimprovingcoordinationbetweentheDAandLGUsinplanninganddeliveringbasicservices.1

b)Improvingresults-basedmonitoring,evaluation,andreportingsystemattheLGUlevel.Thelackofproperresults-basedmonitoring,evaluationsystemsattheLGUlevelremainsaconcern.2

c)EnhancingfinancialandskilledworkforcecapacityforeffectiveexpenditureplanningandmanagementinmanyLGUs,especiallyinthelowerincomecategories.Theabilitytofollowbudgetrules,managefinances,orevenassesstheirowncapabilityforfinancialmanagementusingthePublicFinancialManagementAssessmentTool(PFMAT)isoftenmissing.

d)ThefocusLGUsgivetohigh-visibilityexpenditureswithanimmediatepoliticalpayoff,meaningthatruralandagriculturalprojectstendtogetshort-changed.Thisfocusonhighvisibilityseeminglyoccu