OGP Summit 2016 Local Governance Discussions by Union of Local Authorities of the Philippines

UNION OF LOCAL AUTHORITIES OF THE PHILIPPINES, Inc. Unit 2803 Summit One Tower 530 Shaw Boulevard, Mandaluyong City Tel. nos.: 718-1812, 717-1810, 534-6787 Telefax: 534-6789 Email: ulapnatsec@gmail.com Website: www.ulap.net.ph Facebook: www.facebook.com/ulap.net.ph

3RD OPEN GOVERNMENT PARTNERSHIP NATIONAL SUMMIT: LOCAL GOVERNMENT DISCUSSIONS1 MARCH 3-4, 2016; DUSIT THANI MANILA Narrative Report

I. OVERVIEW The Union of Local Authorities of the Philippines (ULAP), in partnership with the Philippine Open Government Partnership (PHL-OGP) Steering Committee2 and Development Alternatives, Inc. – United States Agency for International Development (DAI-USAID), conducted the Open Government Partnership (OGP) National Summit 2016 with the theme: “Pursuing the Local Governance Reform Agenda in Open Government Partnership: A Public Dialogue of Stakeholders for Feedback, Inputs, and Commitments for the Philippine-OGP Third Action Plan (2015-2017)”, on March 3-4, 2016 at the Dusit Thani Manila Hotel. The Summit brought together approximately 200 reform and development partners from the national and local government, civil society organizations, business groups, and academic institutions, with the aim of broadening the reach of OGP and deepening the commitments, links, and work on local coalitions towards achieving open government reforms. This documentation specifically focuses on the local governance discussions within the National Summit.3 This report is developed for reference of local governments for information regarding the OGP commitments already being implemented through programs like the Bottom-up Budgeting, Seal of Good Local Governance, and Extractive Industries Transparency Initiative, as well as, partnerships already established to promote open government reforms. Furthermore, the report aims to guide local governments on how they can help sustain these reforms and partnerships in light of the forthcoming May 2016 elections.

A full summit report is available through the PHL-OGP Steering Committee Secretariat under the Department of Budget and Management. This report is prepared by the Union of Local Authorities of the Philippines (ULAP) and released on March 25, 2016 to focus on the local governance discussions and ways forward. 1

For questions or clarifications on this report, kindly contact the ULAP Secretariat through Executive Director Czarina Medina-Guce at ulapnatsec@gmail.com, (02) 5346787, 5346789. The OGP Steering Committee is composed of the International Center for Innovation, Transformation and Excellence in Governance (INCITEGov), the Union of Local Authorities of the Philippines (ULAP), the De La Salle University-Jesse M. Robredo Institute for Governance (DLSU-JRIG), in partnership with the Department of Budget and Management (DBM). 2

As per the National Summit program, breakout discussions were organized to cater to civil society organizations (CSO) and local government topics. Particularly, the civil society participants used the breakout time for consensus-building and elections of their representatives to the PHL-OGP Steering Committee. While the CSO activities were ongoing, the local government discussions were facilitated by ULAP. 3

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THE OPEN GOVERNMENT PARTNERSHIP The Open Government Partnership (OGP) is an international initiative launched in 2011 to provide an international platform for domestic reformers committed towards making their governments more open, accountable and responsive to citizens. The Philippines is one of the nine founding members of OGP and one of the 65 participating countries to the initiative to date. In all of these countries, government and civil society are working together to develop and implement open government reforms. 4 Currently, the Philippines is implementing the OGP Third Country Action Plan (2015-2017)5, which is the first Country Action Plan in the OGP international committee that is “co-created” – meaning, that for each commitment, national government agencies, and representatives/networks of local governments and civil society all have concrete indicators and measures pursued. The Philippine Third OGP Country Action Plan shows that the commitments are not just national government-led, but shared in principle and implementation by relevant sectors in promoting open governance. Among the twelve (12) OGP commitments in the current action plan, the following have clear local governance dimensions: Table 1. Philippine OGP Country Action Plan Commitments with Local Governance Dimensions Commitment Program [2] Sustain transparency in local Full Disclosure Policy government plans and budget [4] Attain EITI compliance Philippine Extractive Industries Transparency Initiative [6] Strengthen community participation in Bottom-Up Budgeting local planning and budgeting [8] Enhance performance benchmarks for Seal of Good Local Governance local governance [10] Improve local government Business Competitiveness Index competitiveness Given the OGP engagement framework, public dialogues and consultations are needed to strengthen the inclusive processes aimed to generate feedback, inputs, and concrete commitments from and among various stakeholders including government, civil society, and other sectors. These activities are vital to the achievement of the indicators of the plan. In addition, strengthening the local governance dimension is a concrete follow-through to the OGP Global Summit in Mexico City held in November 2015 wherein an emergent agenda was identified to build OGP 4

http://www.opengovpartnership.org/

The full Philippine Third Country Action Plan can be accessed at http://www.opengovpartnership.org/sites/default/files/PHILIPPINE%20OPEN%20GOVERNMENT%20PARTNERSHIP%20NATIONAL%20ACTION%20PLAN%2 02015-2017.pdf 5

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in subnational governments. This means the development of local government champions who will perform across the commitments, and even propose their own OGP Local Action Plans. The international OGP Secretariat is currently working on networks of subnational government champions for capacitybuilding and lessons sharing sessions. Moreover, localization of OGP commitments has been identified as one of the central discussions of the #ParaSaBayan advocacy of the Union of Local Authorities of the Philippines (ULAP). One of the key tracks of the advocacy specifically aims to strengthen the implementation of the OGP principles of inclusive governance, transparency, and accountability in subnational/local level. The advocacy, with the banner #ParaSaBayan: Pagtataguyod ng Makabuluhang Adhikain ng Pamamahalang Lokal, aims to pursue a local government agenda in line with the celebration of the Local Government Code’s 25 th anniversary in October 2016.

II. TALAKAYAN SESSION

During the event, ULAP facilitated the first plenary Talakayan, “Strengthening Local Governance through OGP: Learnings, Commitment and Ways Forward”. ULAP Executive Director Czarina Medina-Guce moderated the discussion with Atty. Teodoro Jose Matta of Palawan, Mayor Lourdes Panganiban of Andaganan, Isabela, and Mayor Maria Angela Garcia of Dinalupihan, Bataan as panelists. During the discussions, panelists

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were asked about their experiences, lessons learned, and policy inputs on the Seal of Good Local Government (SGLG), Bottom-up Budgeting (BuB), and Extractive Industries Transparency Initiative (EITI). The panelists shared that the projects empowered local government units (LGUs) in terms of access to financial resources; thus, augment the needs of services delivery and giving more capability to the LGUs in terms of delivery of basic services. These projects also increased transparency and accountability through the increase of LGU compliance to full disclosure, public finance management, and COA audit. Lastly, the projects improved LGU-CSO partnerships and CSO engagement in local governance. Seeing the gains from the OGP commitments, the discussion then veered toward the need to sustain the advances already made, in the face of pending transitions to the political landscape this coming 2016 elections. The table below provides the suggested actions the panelists discussed. Table 2. Key Discussion Points in LGU Talakayan Session Suggested Actions Key Discussion Points Consensus-building Sustainability of commitments and action plans can be done through properly among LGUs informing Local Chief Executives (LCEs) and Legislative Officers (LOs) of the impact and importance of OGP for better transition (outreach to LCEs, LOs). This means more outreach activities to gather the buy-in of LGU officials to support OGP as a whole, and not just the commitments that are directly benefiting and implemented through LGUs. Institutionalization of There should be a mandated standard of data gathering across the different Data Generation National Government Agencies (NGAs) to prevent discrepancies in data gathered. One of the key suggested action points for this is the eventual data integration of National Household Targeting System (NHTS) and Community-based Monitoring System (CBMS).

Reform in the fiscal policies affecting capacity of LGUs

Relevant thereto, the information gathered can be used for evidenced-based policy making both in the national and local level. There is suggestion on reforming the Internal Revenue Allotment (IRA) of LGUs to have a more empowered fiscal autonomy and enact reforms on the Tax Code, especially regarding the situs of taxation that will greatly affect the share of LGUs in the national wealth. This is in line of building on the fiscal capacity of LGUs to provide social services. The BuB program in particular enabled low-income and IRAdependent LGUs to provide social services given performance according to governance and technical requirements. However, the BuB program may be discontinued by succeeding national administrations, and the more sustainable action that the panelists suggest is to review the fiscal policies and incentives in place that would allow the gains from the BuB experience to be mainstreamed for empowerment of local governments and their community partners.

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Suggested Actions Framework for Stakeholder Participation

Impact Assessment

Key Discussion Points The LGUs suggested for the creation of a better legal framework where CSOs, marginalized sectors (Indigenous Peoples, etc.), and private sector can actually participate in an official level or a more expanded capacity in local governance. One concrete way that it is projected as a policy is to reflect the processes and insights generated from the BuB-implementation experience of the Local Poverty Reduction Action Teams (LPRATs) in the work of the Local Development Councils (LDCs). The LGUs suggested the conduct of impact assessment of the OGP commitments, especially for policy insights for local governments. In other words, evaluation process for plans, programs, and projects should not only focus on the utilization of finances as a measurement, but also the concrete outcomes made as a result.

III. BREAKOUT SESSIONS

Break-out discussion sessions for LGUs on Bottom-up Budgeting, Seal of Good Local Governance and Full Disclosure Policy, Business Competitiveness Index, and Extractive Industries were also facilitated by ULAP. The theme for the sessions was agenda-setting and consensus-building prior and after elections. OGP National Summit 2016: Local Governance Discussions Narrative Report Page 5 of 9

The sessions aim to enhance and strengthen performance benchmarks for local governance, full disclosure policy, business competitiveness, and transparency and accountability in extractive industries.

A. Bottom-up Budgeting, Full Disclosure Policy, and Seal of Good Local Governance The speakers for the break-out session for Bottom-up Budgeting and the Seal of Good Local Governance were Councilor Antonio Villamor from San Remegio, Cebu, Richard Villacorte from the Department of Interior and Local Government - Project Management Office (DILG-PMO), Melanie Quiton from the Department of Interior and Local Government - Bureau of Local Government Supervision (DILG-BLGS), Mayor Maria Angela Garcia from Dinalupihan, Bataan, and Mayor Lourdes Panganiban from Andaganan, Isabela.

The sessions started with the sharing the various gains LGUs attained from each of the projects. The discussions highlighted the increased resource mobilization that the projects generated for the LGUs augment the needs of services delivery and giving more capability to the LGUs in terms of delivery of basic services. These projects also increased transparency and accountability of state actors and stakeholders involved. Lastly, the projects provided social development programs for constituents at the local level. Despite the gains of these OGP Commitments, there were still issues and challenges that remain to be resolved. Among the challenges raised in relation to SGLG is the discrepancy in data between the national and local levels. Participants also pointed out that existing SGLG indicators have limited focus. The indicators are not sufficiently responsive to the contextual differences of different LGUs, and some sectoral concerns6 are not represented. To address these, representatives from DILG shared that improvements on the BuB and the SGLG shall be made in the coming years, and eventually shall be linked with the UN Sustainable Development There was discussion on the Social Protection framework of the SGLG and how the current set of indicators are not representative of many sectoral concerns. This in particular was discussed under the persons-with-disability (PWD)-related indicators, since in the 2015 indicator set, the only measurement for PWD services was the required ramps for the mobility-challenged subgroup. 6

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Goals (SDGs) for 2016-2030. DILG is starting to implement the LGU Scorecard, otherwise known as â&#x20AC;&#x153;Local TARGET (Transcending Accountable and Responsive Governance through Empowerment and Teamwork),â&#x20AC;? which aims to document baseline data for governance and development aligned with the SDGs. The Scorecard will be helpful to LGUs in meeting future performance-oriented standards of the SGLG and utilizing the data to respond to local anti-poverty interventions through BuB projects. In relation to BuB, the absorption capacity of national agencies to implement a large number of projects using BuB way was raised. Participants agreed that there was a need to re-assess and re-do policies pertaining to transfer of funds to LGUs, SGLG, and Commission on Audit (COA) audit findings, guidelines, among others. There is also a need to re-think and redo policies and regulations as pertaining to CSO partnerships and capacity development, so that both LGUs and CSOs would have levelled capacities to jointly work on the public fiscal management, transparency, and accountability dimensions of the programs. Some suggestions to resolve these challenges were to draft a manual of the BuB process to help simplify it for those involved, provide continuous technical assistance for LGUs, localize capacity development, and strengthen CSO capacity development and involvement in the BuB process. Moving forward, there is a need to re-align comprehensive local development plans based from CSO feedback on priority projects and make quantitative and qualitative assessment of programs related to BuB.

B. Business Competitiveness Index, and Extractive Industries Transparency Initiative

The speakers for break-out session for Business Competitiveness Index and Extractive Industries Transparency Initiative were Director Elsa B. Agustin from the Department of Finance, John Pontillas from Palawan Council for Sustainable Development, Atty. Luis Katibayan from the Department of Trade and Industry, and Executive Director Ruel Oliver of Naga City. OGP National Summit 2016: Local Governance Discussions Narrative Report Page 7 of 9

With regard to EITI, it was shared that taxes/funds collected from mining companies are not maximized to develop the communities where the extractive industries are. Most of the taxes/funds collected, if not all, are remitted to where these companies have their principal office registered, which are usually located in highly-developed cities. Participants agreed that there is a need for more access to information, especially on the collection of taxes, local government share in these taxes. This includes making the information submitted to national from reports of mining companies and LGUs trickle down to the local level. It was shared by the Department of Finance (DOF) representative that a bill in Congress to institutionalize EITI is already being drafted by the TWG for Reform of the Mining Fiscal Regime. ULAP committed to engage the Multi-stakeholder Group further on the bill. To ensure sustainability, participants agreed that EITI processes should be localized, like how it was done in Compostela Valley and South Cotabato. Reform in the payment of taxes from extractive industries directly to host community, not principal place of business, must also be continually advocated. Lastly, Bantay Kitaâ&#x20AC;&#x2122;s proposed CSO coalition on EITI must be inclusive to encourage more involvement from CSOs, marginalized groups (especially indigenous peoples communities), and private sector alike. Lastly, for business competitiveness, challenges that were identified were the need for parallel efforts on business friendliness at the national level and how to mitigate the voluntary nature of the Cities/Municipalities Competitiveness Index (CMCI), wherein not all LGUs voluntarily commit themselves to be assessed for business competitiveness. Even the issue on food security was also discussed since most of the projects are focusing on business competitiveness, extractive industries, etc. and not on agriculture development. As a possible solution to mitigating the voluntary component of the commitment of LGUs in the CMCI assessment, representative from National Competitiveness Council (NCC) shared that the agency will not cease to encourage LGUs to participate in CMCI. The NCC then said that they will ask the assistance of ULAP, DILG, and other NGAs to endorse the index further to the LGUs. Moving forward, there is a need to make the business competitiveness assessment inclusive, such that it should not ignore the marginalized sectors (i.e. IPs, farmers, etc.). Furthermore, institutionalization of CMCI would make it more sustainable. This includes expansion of citizen participation and engagement of other stakeholders, as well as, strengthening for meaningful participation.

IV. MOVING FORWARD The Open Government Partnership National Summit was able to bring together reform and development partners from different sector, and identified directions for the deepening of commitments, linkages, and further initiatives towards achieving open government reforms. Moreover, the OGP was able to create and encourage meaningful engagements among different stakeholders, especially given the transition in the national and local political environment. On the part of ULAP, localization of OGP commitments has been identified as one of the central discussions of the #ParaSaBayan advocacy. One of the key tracks of the #ParaSaBayan advocacy specifically aims to

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strengthen the implementation of the OGP principles of inclusive governance, transparency, and accountability in subnational/local level. Through this advocacy, agenda and policy directions aligned with the OGP principles and commitments would hopefully be sustained despite the challenge of sustaining reforms already made in light of the forthcoming May 2016 Elections. On the part of LGUs, increasing the familiarity of all local government officials on OGP and the committed projects is still an ongoing process. Despite the OGP now serving as a “brand” that LGUs can identify with when it comes to implementing transparency and accountability projects, the sustainability of the reforms needs to be addressed. There is a need to encourage more local OGP champions to ensure that the gains from the OGP commitments would still be continued, in the face of pending transitions to the political landscape this coming 2016 elections. Therefore, outreach to more LGUs in promoting further OGP principles and commitments is crucial. On the part of the CSOs and other partners, the collaboration of active civil society organizations and communities with their local governments, identifying priority local projects together, which was operationalized through different programs and projects that are part of OGP commitments, such as Bottom-up Budgeting and Citizen Participatory Audit, has been instrumental in linking government and their citizens in the budget planning process, and in responding to the needs of the locality. Therefore, citizen engagement in local governance must be further encouraged, deepening the meaningful engagements already started through the OGP. On the part of the OGP Secretariat, it is challenged to continually engage the national government (given upcoming leadership transitions) on agenda and policy directions on institutionalizing and sustaining the achievements of the country with OGP – in support of the local governments, CSOs, academe, private sector and other stakeholders involved in the attainment of the commitments.

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