VICE MAYOR'S LEAGUE OF THE PHILS. 15TH NATIONAL CONVENTION (2004)
By Gary B. Teves
LANDBANK President and CEO
Vice Mayors' League of the Philippines
15 th National Convention Century Park Hotel, Manila 16 March 2005
To all the officers and members of the Vice Mayors' League of the Philippines led by outgoing president Luis Bustamante, incoming VMLP officers led by newly-elected president Jess Cruz, distinguished local officials from all over the country, friends and guests, good afternoon.
It's an honor for me to speak at this convention. Though I am now a banker by profession, I have always treasured the several years I've spent in public service as congressman of the third district of Negros Oriental.
Now, as the head of a service and development-oriented financial institution like LANDBANK, I also derive fulfillment from working with all of you to support the national government's development goals. Together, we work to provide credit and support services to the poorest sectors of society, helping build viable and enterprising communities all over the country.
Later in my presentation, I will be sharing with you some of the assistance and financial programs we currently offer to LGUs. I will end by making some suggestions for LGUs to consider so that they can become even more effective partners of the national government in realizing its 10-point priority development agenda.
Role of LGUs in local development
Since the enactment of the Local Government Code in 1991, delivering basic services to people has effectively become the responsibility of local government units. As such, LGUs' financial resources have been increased, allowing you to pursue your own development projects, as well as manage local fiscal and personnel administration.
However, given the wide scope of your responsibilities, the Internal Revenue Allotment or IRA has been unable to cover all your costs, as I'm sure many of you have experienced firsthand. Consequently, many LGUs have tried to find alternative ways of generating revenues and mobilizing resources. Among these are pursuing partnerships with the private sector, exploring build-operate-transfer modalities, floated bonds and privatization.
LBP support to LGUs
Realizing their challenge, LANDBANK has been helping the LGU sector by extending timely and appropriate credit support.
At present, we are the largest source of development financing for LGUs. For last year, our loans to LGUs have P19.9 billion, growing steadily from the P11.9 billion we lent in 2000. This loan assistance has benefited more than 600 LGUs nationwide. LGUs in the Visayas received the largest share at P7 billion, followed by LGUs in North and Central Luzon with P3.6 billion.
Of the P19.9 billion extended to LGUs, P11.5 billion was used to fund agri-infrastructure projects. These include, among others, the construction of farm-to-market roads, irrigation systems, public markets and transport and commodity terminals.
Examples of our support for LGUs include the P990 million loan we extended to Davao City. This financed various projects, such as the rehabilitation and concreting of two farm-to-market roads, urban drainage and flood control projects, and the city's shelter and urban land reform program.
Another P100 million loan to the provincial government of Cotabato helped establish an asphalt plant to start development of the 27-hectare Provincial Economic and Industrial Zone in Barrio Pag-asa, M'lang Cotabato.
Through these loans, we help the national government realize its goal of empowerment at the local levels, accelerating and decentralizing progress across the country. The various entrepreneurial activities we funded have not only helped stimulate local economies, but also provided employment for many - in support of President Gloria Macapagal-Arroyo's 10-point agenda.
Foreign-funded LGU programs
On top of our regular lending programs, LANDBANK also implements three special credit facilities funded by multi-lateral and bilateral agencies for LGUs. When evaluating LGU loan proposals for these facilities, LANDBANK considers the project's feasibility, its impact on the community and the LGU's net borrowing capacity. Let me go through these programs briefly:
First, the Water District Development Project-a US$36 million credit facility from the World Bank. This project funds investments in sewerage, sanitation, drainage and wastewater treatment infrastructure, as well as environmental and sanitation investment programs.
Second-the Local Government Units Support Credit Program. This is a US$53 million facility funded by the Japan Bank for International Cooperation. Health, water system, flood control, sanitation and forestry are some of the eligible projects under this program. Interested LGUs can borrow a minimum of P5 million, payable in three to 15 years.
Third, we have the Mindanao Basic Urban Services Sector project, funded by the ADB. This facility aims to improve the quality of life in Mindanao by providing, upgrading and rehabilitating basic municipal infrastructure and services, as well as strengthening the institutional capabilities of LGUs in the region. Eligible projects include the construction of local roads and bridges, sanitation, drainage and flood control, solid waste management, water supply, public market and bus terminals.
We encourage you to take advantage of these credit facilities, so that together, we can undertake projects that have a significant and positive impact on your communities.
Challenges to LGUs
In light of the economic challenges the national government currently faces, LGUs must now shoulder the responsibility for building stronger and more self-reliant communities. To that end, I will leave the Vice Mayors' League of the Philippines with four suggestions to help you achieve your development goals:
First, commit to self-improvement by developing a uniform set of performance standards across LGU offices. This should emphasize implementing good governance at all levels.
Second, explore and maximize the potential of information and computer technology or ICT. Using ICT to run bureaucracies is steadily becoming the norm. We should aspire to keep up with this trend if we want to achieve true management and operational efficiency.
Third, invest in training and capability programs for your people. We need strong staffers who can ably represent us at negotiations or networking events and know how to interact sincerely and effectively with our constituents.
And fourth, spread best practices. Let's take advantage of events like this and other activities, such as Lakbay Aral, to learn from each other's experiences and insights.
The late John F. Kennedy once said, "Few will have the greatness to bend history itself, but each of us can work to change a small portion of events, and in the total of all those acts will be written the history of this generation."
Let's continue working to serve our respective communities and uplift the lives of our constituents. The sum of all our joint efforts will be a stronger national economy, improved prospects for our fellow Filipinos and the fulfillment we derive from leaving an enduring legacy of true service. Thank you and good day.