THE 20 percent Local Development Fund (LDF) is the “most abused” budget item today, Local Government Secretary Jesse Robredo told local officials at a Cebu conference.
LDFs are spent by 79 provinces. (The Supreme Court, however, reversed itself on Dinagat Island’s status. So, make that 80.) This trust fund is also vital for 122 cities, including the 16 towns on whose cityhood ambition the Court flipped, and then flopped. A reconsideration motion is pending. Add to that roster 1,512 towns.
Six out of every 10 local governments flunk the “full disclosure” criterion on tax spending. This fractures the General Appropriations Act of 2011 and the Local Government Code. Both require “full disclosure to ensure transparency and accountability,” Robredo says.
This Magsaysay awardee’s candor causes some to fume. “Does the DILG control all LGUs?” snapped Dumanjug Mayor Nelson Garcia. He is the national vice president of the League of Municipalities. The league will challenge DILG memo circular 2010-138 before the Supreme Court.
Robredo’s Dec. 7 memo lists seven “Thou shall nots” in disbursing LDF. Bohol Gov. Edgar Chatto, thus, flags a mayors’ manifesto that bucks curbs on their spending.
What is the LDF? How did this trust fund come about? And what is its track record?
“Thou shall not ration justice,” Justice Learned Hand once cautioned. Does Memo 2010-138 deny local officials equity?
Recall the 1972 UN Environment Conference in Stockholm. Delegates from 113 countries, including the Philippines, adopted an action plan that proposed a “20-20 Pact.” Governments agreed to earmark 20 percent of resources for the poorest. Such fund would address the needs of the most deprived: nutrition, health care, medicine, potable water, sanitation, primary schooling, etc.
Human development relieves grinding poverty, the Stockholm consensus stressed. Curbing disease and death rates makes human development possible. Unmet human needs usher more pre-school children in the Philippines to premature graves than in Egypt, Kenya or Tanzania, the Asian Development Bank noted.
Former Sen. Aquilino Pimental wove that 20 percent vital safety net concept into the Local Government Code. Viewpoint noted (Inquirer, 10/23/07) that politicians converted the LDF into their mini-pork barrels, as successive COA audits found.
Davao Oriental Sanggunian officials ladled P669,892 as “financial assistance”—for themselves. Dapitan doled P1 million for an “executive band.” San Carlos City allocated P110,000 for a Boy Scouts jamboree in Angeles. Northern Samar purchased seven brand-new vehicles. Cebu City Mayor Tomas Osmeña’s barangay leaders bought themselves high-powered motorcycles and handguns.
Plunder of the LDF does not stem from ignorance. Ruling after ruling underscore its “preferential option for the poorest.”
Could the LDF supplement salaries of national high school teachers? Mountain Province and Ifugao officials asked. Could it patch funding deficits in other projects?
No way, Jose, said DILG Opinion No. 5 dated Aug. 10, 1999.
That policy remains in force today. But it is honored more in the breach than in practice.
Match some of Robredo’s “Thou shalt nots” with specific cases.
Underwriting “salaries, wages or overtime pay” is verboten, the memo says. In contrast, the COA annual report on local governments has an unvarying gripe: “Regular expenses, such as salaries, wages, facilities maintenance, travel, celebration of festivities, etc. are charged to LDF.”
In 2008, for example, 102 LGUs failed to implement development projects, the COA reported. The same sordid pattern persisted into the next year. It continues today.
Thou shall not underwrite “administrative expenses such as cash gifts, bonuses, food allowances, medical assistance, uniforms, supplies, meetings, communication, water and light, petroleum products, and the like,” Robredo’s memo tells LGUs.
Fifth-class town Aloguinsan in Cebu splurged P540,000 for a live concert and a dance-breakout, the COA said. Borbon town granted P24,000 to each department head. Jagna, Bohol, fittered away P1.85 million in LDF resources for heavy equipment.
Cotabato City appropriated P55 million of its LDF for three development projects. It spent P44.3 million mostly on creating jobs, not meeting basic human needs.
“Evaluation conducted by the Audit Team Leader disclosed that majority of programs, implemented by the city government under the 20 percent (Fund) consist of augmentation of manpower requirements,” the COA said. Some 480 workers were assigned/detailed at the 27 offices of the city. That chewed up P16.3 million.
Junkets or akbay aral are out, Robredo says. “Traveling expenses, whether domestic of foreign” may not be billed to the LDF.
Neither may officials dip into the fund for “registration fees in training, seminars, conferences or conventions.”
Minglanilla officials (Cebu) burned P5.6 million from the LDF for two trips to join Palawan’s Kabunhawan festival. Lapu-Lapu City’s Association of Barangay Councils “misused” P550,000 on a Christmas party and gifts over two years and P776,500 on honoraria for 30 barangay captains.
A new Performance Challenge Fund will provide P500 million to 344 LGUs that provide counterparts from LDFs for essential projects. These range from rural health units and water and sanitation to post-harvest facilities.
Local officials stubbornly insist on having their LDF pork barrels.
“These are all honest men,” the old adage says. “But why can I not find my bag?”