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The BSC-Powered Grassroots Governance Movement in the Philippines: A Progress Report

How have you adapted the six stages of the Execution Premium Process (Develop the Strategy, Translate the Strategy, Align the Organization, Plan Operations, Monitor and Learn, and Test and Adapt) to Philippine circumstances?

An interview with Jesus P. Estanislao, Chairman, Institute for Solidarity in Asia Throughout the world, governments at all levels are adopting the Balanced Scorecard system to clarify social, economic, and political goals and to improve governance. In the Philippines, this effort has been boldly undertaken by a consortium of leaders from across key sectors, led by the nation’s former finance minister (under President Corazon Aquino). In the March–April 2010 BSR, Jesus P. Estanislao described the grand vision spearheaded by his Institute for Solidarity in Asia (ISA)—Philippines 2030—and the Balanced Scorecard–based public governance system (PGS) the institute is helping implement, bottom up and top down, across all key sectors of Philippine society—from city governments to schools, from the military to national government agencies. In this interview Dr. Estanislao offers an update on the program’s recent progress , important challenges, and key developments. What’s the state of the public governance system (PGS) initiative as of March 2011 (press time)? Before the new administration took office at the end of June 2010, the outgoing administration made sure that six national government agencies (NGAs) would be initiated into the PGS: the Department of Education, Department of Health, Department of Public Works and Highways, Department of Transport and Communications, Bureau of Internal Revenue, and the Philippine National Police. These agencies have posted their “performance scorecard” on their respective websites, indicating the yearly targets they’ve committed to. Since last June, four additional NGAs joined the PGS program: the Department of Social Welfare and Development, the Civil Service Commission, the Philippine Army, and the Development Academy of the Philippines, a national government

institution and Institute for Solidarity in Asia (ISA) partner in advancing the PGS that provides special technical training and consulting to national government officials and agencies. ISA forged a similar partnership agreement with the League of Cities of the Philippines and with the Department of Interior and Local Government, through which ISA can extend its advocacy framework to all the provinces and municipalities of the Philippines. Based on the agencies’ commitment to good governance, the Millennium Challenge Corporation, a U.S. private-public sector partnership chaired by the U.S. Secretary of State, awarded a grant to the Philippine government in September 2010.1

We compressed the six stages into four, and at this relatively early point in the program’s history, the emphasis is on the developmental and implementational phases. We’ve combined strategy formulation and translation into what we call “the initiation stage.” This stage requires the NGA or local government unit (LGU) to come up with a governance charter (core values, mission and vision), a strategy map (or road map), and performance scorecards (with initiatives, measures, and targets). In the second phase, “compliance,” the entity cascades the initiation governance documents down to departments and smaller operating units, which create their own “transformational” performance scorecards, so called because they focus on radical improvements in internal processes and service for constituents. Rather than a 5% or 10% improvement in efficiency, we ask them to develop initiatives that will cause a sea change in the manner in which they do things. Thus, for procurement, we encourage them to use the wide-open space of the Internet to post bidding requests for everything from big-ticket items to aspirins and pencils, rather than nip at the edge of current practices. The third phase, “proficiency,” calls for formally establishing an Office of Strategy Management (OSM). Here, members of the technical working group—five or so senior officials from the given NGA or LGU charged with advancing PGS adoption—gain professional education and credentials in the specific field of

1 T he Philippines qualified for this grant in part because of ISA’s work with several national government agencies. The grant agreement was signed in the presence of Philippine president Benigno Aquino in September 2010 during his visit to Washington, D.C.

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the PGS. They attend boot camps, learn from others, and begin connecting operational processes to the strategic demands of the strategy map. The OSM oversees the cascading of BSCs down to the individual level. In the fourth and last phase, “institutionalization,” the entity harmonizes and aligns all major operational processes (e.g., HR, budgeting, systems development) in accordance with the strategy map. Through such alignment, transformational results have to be shown and documented. The NGA or LGU implements a continuing program to promote a governance culture.

Which individual entities have made the most progress? Two cities—Iloilo and San Fernando, Pampanga—have achieved “institutionalized” status, and for their accomplishments also won entry into the Palladium Balanced Scorecard Hall of Fame (Iloilo in 2009, San Fernando in 2010). Each city is focusing on raising the quality of its internal processes to ISO certification standards, bringing the PGS down to the level of its constituent barangays,2 and bringing into the PGS the nearest municipalities so that the individual local government units of a metro area can better coordinate their respective good-governance programs. The National Electrification Administration, a government agency, achieved “institutionalized” status last September. And the newly initiated Philippine Army and the Department of Social Welfare and Development are now the most advanced in the cascading process.

What difficulties do government organizations face that impede progress? The change of administration last year caused initial disruption that slowed progress. The newly appointed agency heads had to be briefed on a whole slew of issues. Naturally, they had to focus on “fighting fires.” Only after a few months

iloilo city

city of san fernando, pampanga

national electrification administration

BSC Hall of Fame, 2009 PGS Institutionalized, 2009

BSC Hall of Fame, 2010 PGS Institutionalized, 2009

PGS Institutionalized, 2010

• Number of business process outsourcing (BPO) locators grew from zero (2005) to 12 (2008)

• Families below poverty line decreased from 10% (2005) to 3% (2009)

• Percentage of rural households connected to a capable electric cooperative increased from 72% (2006) to 83% (2009)

• Number of families with local healthcare coverage increased from 5,523 (2005) to 25,705 (2008) • Local income increased from Php 825M (2005) to Php 1.2B (2008) • Processing time of business permits dropped from seven days (2005) to one day (2008)

• Number of new businesses with capitalization of more than Php 5M increased from 21 (2005) to 66 (2009) • Local income doubled from Php 480M (2005) to Php 841M (2009) • Processing time of business permits dropped from two weeks (2005) to two hours (2009)

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• Income grew from Php 23M (2006) to Php 56M (2009) • Response time decreased from 68 hours (2006) to 42 hours (2009)

FIGURE 1: BREAKTHROUGH PERFORMANCE A sampling of breakthrough results from two local government units (Iloilo City and San Fernando, Pampanga) and a national government agency (the National Electrification Administration) that have achieved the most progress thus far among all the entities committed to Philippines 2030.

could they come on board and think about the longer term, through proper strategy formulation and execution. Another difficulty is caused by our bottom-up approach. Although we have found this approach to be effective in the Philippines, it requires dealing with each NGA and LGU on a case-by-case basis. Enrollment in the PGS program is therefore almost totally contingent on the agency or LGU head’s availability to meet with us, to understand and commit to the program, and to follow through. This availability problem is being addressed gradually through our partnership agreements, but it will take more time to make them work—easily three years. In addition, some NGAs and LGUs have difficulty obtaining funding for the PGS program because their resources are often allocated to other priorities. The greatest constraint they face, however, is the general lack of understanding of the need to formulate and execute strategy. For many agency and LGU heads,

2B  arangays are the smallest political units in the Philippines. Every city is made up of several barangays.

• Percentage of highperforming electric cooperatives (Category A+ and A) grew from 61% (2006) to 75% (2009)

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the PGS is for the long term, and unless a crisis strikes that would force them to think of the long term, they tend to focus on short-term operational issues.

How aware would you say the average citizen is about Philippines 2030 and the PGS initiative? There is general awareness of the need for an anticorruption, good governance program. Almost everyone talks about such a need, including the media, which harps on it daily. For most citizens, however, Philippines 2030 is too long term, too visionary. Their main concern is the here and now. But this doesn’t mean that Philippines 2030 is not of serious importance to the average citizen. Each time an opportunity arises for ordinary citizens to think about the long term, they applaud the thrust of Philippines 2030. The average citizen seems to appreciate the gains the PGS has brought to their daily life. In open, democratic voting, with all the imperfections of Philippine elections,

city mayors with a performance record earned through the PGS have no trouble getting reelected. This is not true of everyone, but certainly of a significant majority, who claim that without the PGS they would have had difficulty getting the citizens’ nod for another term.

In your BSR article, you noted that the Philippines struggled with a longstanding corruption problem. Has the PGS effort helped local and regional governments make a dent in corruption? Corruption has been systemic and endemic in the Philippines. Take the Armed Forces of the Philippines (AFP). It is clear from current testimonies given to the Senate and House of Representatives that from 2001 to 2006, corrupt practices prevailed. The same testimonies show that through various reforms, several of which came through the PGS, those corrupt practices have already been stopped. Moreover, the top generals and admirals of the AFP can say, without batting an eyelash, that the current AFP is well on its way to becoming a truly professional military branch. In those cities that have used the PGS for five years, the governance reform program—mainly through the PGS—has dramatically cut down graft and corruption, according to citizen surveys. The bottom-up approach of PGS makes progress in anticorruption and good governance programs happen one city at a time, one national government agency at a time. Progress is slow, but this is a more realistic approach to combatting the problem, considering how endemic and systemic the problem of graft and corruption had become.

It’s often said that leadership is key, particularly in sustaining people’s motivation and commitment to the process. How does ISA foster leadership among those running PGS programs? ISA has been fortunate: the LGU heads with whom we have been working for four or five years now are performance

oriented. Those that have a performance track record are invited to become Fellows of ISA. ISA puts a premium on the NGA technical working groups. Each group works closely with ISA to meet the PGS requirements. We hold boot camps and Learning Institutes—workshops on specific topics designed to help participants share lessons from other PGS users in the Philippines and abroad. ISA has been able to build a cadre of committed, increasingly competent PGS practitioners. Through a group called the Associates of ISA, the most committed practitioners network with each other and offer mutual support.

advisers. The navy is also inviting city mayors with a performance track record to share their experience through its Leadership Forum. The boot camps and the Public Governance Forum remain the main venues for mutual sharing of good governance practices. All members of the technical working groups from throughout the NGAs and LGUs are invited to attend the public presentations. Jesus P. Estanislao, a former finance minister of the Philippines (1990–1992), is a leader in the corporate and national governance movement in the Philippines and throughout East Asia. He founded the Institute for Solidarity in Asia (www. and the Institute of Corporate Directors in Manila (

What forums and channels does ISA or any individual entities hold to share knowledge? Every March and September, ISA stages a Public Governance Forum. It’s an opportunity for NGAs and LGUs to report to the general public on the progress they’ve made in adopting the PGS. They inform public authorities on the anticorruption and good governance program, from the bottom up, that ISA advocates and that its partners are implementing. NGAs and LGUs also share best practices.

To learn more See Estanislao’s article, “A Bottom-Up Approach to National Governance,” BSR March–April 2010 (Reprint #B1003A). For more on the use of strategy maps and the Balanced Scorecard system to set societal goals and advance good governance in government, see: “Strategic Agendas: A New Tool for Economic and Social Development,” BSR September– October 2007 (Reprint #B0709B) “Brazilian Industry Association Shapes National Agenda—With the BSC,” BSR July– August 2006 (Reprint #B0607B)

ISA gives awards to those NGAs and LGUs that are making important progress in their PGS journey. For the technical working staff, ISA holds a boot camp, which is an occasion for ISA to collect the new perspectives and adaptations of the Balanced Scorecard based on the actual experiences of selected NGAs and LGUs.

“Promoting Economic Development: Strategic Agendas in Action,” BSR November–December 2007 (Reprint #B0711D) And consult the BSR Index (available free at for more articles on the subject, including case studies. Look under “Nonprofit/Public Sector Organizations.”

How much interaction is there among the different sectors as they develop their PGS?

Continue the dialogue Are you implementing a scorecard-based management approach in your government organization?

We encourage members of each technical working group to observe the work being done by other NGAs or LGUs. For instance, the Philippine Navy invited representatives of the Philippine Army to observe how the navy’s multisectoral coalition works through its board of

If so, what obstacles and challenges do you face? Or are you just curious about the grassroots governance movement that’s afoot in the Philippines and governments around the world? Talk with Dr. Estanislao and Chris Zaens of the Institute for Solidarity in Asia, and XPC members, at www.

Reprint #B1105B

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The BSC Powered Grassroots Governance Movement in the Philippines: A Progress Report  
The BSC Powered Grassroots Governance Movement in the Philippines: A Progress Report  

The Palladium Group's Balanced Scorecard Report (BSR) sits down with ISA chairman Dr. Jesus Estanislao to discuss the latest developments in...