'Pag maganda ang puno
maganda ang bunga

News & Articles

Next Challenge for LGUs to Optimize Corporate Authority-Puno

Bookmark and Share
 

Interior and Local Government Secretary Ronnie Puno has said that the “next frontier” that local government units (LGUs) should explore  and master is the realm of their corporate authority to generate more funds for their development programs by way of setting up enterprises and operating them like private corporations. 

Puno said allowing LGUs to operate enterprises like  corporations will enable them to earn profits, which they can use to bankroll development projects for the benefit of their respectve constituencies.

Local autonomy should proceed to a higher plane, he said, by allowing LGUs to get a share of the earnings from public enterprises that they have helped  build for the national government—and are now maintaining and operating—such as public markets and airports, to help them tap additional sources of financing other than their share of the Internal Revenue Allotments (IRA). 

Giving LGUs a share of the profits from these enterprises instead of reverting all revenues back to the national treasury, will encourage local chief executives to build and operate other vital infrastructure, such as cold storage facilities and rice mills, he said.

“I think that the next frontier (for LGUs)  is going to be the era of corporate authority so that they will be able to put up enterprises and operate them as corporations,” said Puno in various public forums during his provincial trips. “We have to redefine and reinvent the local government sector to be in tune with what they have become, which are very independent institutions, very capable institutions.”  

He added that, “LGUs should likewise be given a substantial voice in the decision-making process for development projects selected by the national government on their behalf, by giving them official representation in national agencies and offices that oversee countryside development and other local  concerns.” 

Puno recalled that he had given up his seat at the board of the National Economic and Development Authority (NEDA) in favor of a representative from the Union of Local Authorities of the Philippines (ULAP)—the umbrella group of all organizations of elective local executives from the provincial to barangay levels—to help ensure that big-ticket projects being approved by the national government truly dovetail with the needs of the localities where these high-impact plans are supposed to be implemented or built. 

“There can be no genuine autonomy if local executives remain out of the loop in the decision-making process of the national government,” he said, “especially when it concerns the selection of development projects in their respective localities.” 

Puno said LGUs should also have a bigger say on how funds are spent for national projects of which they are supposed to be the lead implementors in their localities.

He said his proposal for the LGUs’ meatier role in the national decision-making process will help avert potential mismatches between what development projects are approved by the national government purportedly on behalf of LGUs and what these local governments actually need in their provinces, cities or municipalities.