This is the story of the Seal of Good Local Governance (SGLG), which is one of the key Philippine commitments to the Open Government Partnership.
An unveiling journey for increased local government performance
SGLG is a product of learnings from its predecessors. All the iterations of the performance measures in the Philippines have been built on a key principle: that behavioral and institutional change in local governance can be facilitated through incremental and purposive measurements and incentives on the level of performance of local governments.
The Local Government Code of 1991 devolved key functions to local governments, such as health, social services, and agriculture, and decentralized other service delivery functions. This was a significant change from how local governments operated prior to the passage of the law. Prior to 1991, if a municipal hall had a broken window, it would have to request funds for repairs all the way up to the central government. However, following passage of the law, not all local governments were prepared to fully deliver the new powers and responsibilities that were accorded to them.
Hence, in the 1990s, after the Local Government Code was passed, the Department of Interior and Local Government (DILG), with the support of international partners and national champions, poured in capacity development support to local governments, both on the leadership and institutional levels. The capacity development interventions were then complemented by the Local Governance Performance Measurement Systems in the 2000s, which began to measure the administrative capacity of the local governments. This meant assessing if the local governments convened their councils, performed activities according to financial and reporting schedules, and implemented basic processes for planning and service delivery that had been outlined in the law.
The game changer, however, happened in 2010, when DILG launched the Seal of Good Housekeeping, which measured financial transparency and instituted public reporting of budget and expenditure of local governments. Good Housekeeping meant that local governments passed the reporting guidelines of the Commission of Audit, and declared their financial reports online and in conspicuous places in communities according to the Full Disclosure Policy. This was where the Open Government Partnership principles of transparency and citizen engagement came into the picture, as it was no easy task for local governments to report all their budgets and expenditures to the public. But the local governments quickly delivered. In 2012, 1372 local governments (or close to 84%) passed the Good Housekeeping standards, which triggered DILG and partners such as us in the Union of Local Authorities of the Philippines (ULAP), to come together and decide to up the game.
Hence in 2014, the Seal of Good Local Governance (SGLG) was launched, and was included as a Philippine OGP Commitment in the 2nd National Action Plan. The SGLG is the most challenging iteration of the performance measurements to date. In order to pass the SGLG, each local government must pass the “3+1” principle – all three of the “core” components, and one from the “essential” components. These components are more reflective of the service delivery functions of local governments according to the Code and other complementary laws.
The core components are:
- Good Financial Housekeeping (which is a continuation of the 2010 performance measurement),
- Disaster Preparedness; and,
- Social Protection.
Meanwhile, the essential components are:
- Business friendliness and competitiveness;
- Peace and Order; and,
- Environmental Management.
The results of first round of evaluations reflected the increased level of difficulty of SGLG. While the Good Housekeeping component passers increased to 91.71% (1537 local governments), the overall passers of SGLG was only at 15.16% (254 local governments). There are insightful stories to tell:
- There were local government officials that realized only then that the standards for access ramps for persons with disabilities (as an indicator of the Social Protection component) were not sufficient. It was not enough that there was an access ramp; it had to have levels of inclination, and support railings in each side.
- There were local governments that had to level up their disaster preparedness plans and procedures, which had to include systems for early warning and evacuation alert, search and rescue, relief operations, and medical services. This meant local governments had to increase their capacity to understand Disaster Risk Reduction and Management in a deeper, strategic level.
- There were local governments that had to re-evaluate and reinvigorate the representation of sectors in its local decision bodies, to give voices to persons with disabilities, fisher folk, urban poor, workers in formal, informal, and migrant sectors, children and youth, and senior citizens, among others.
Despite the low passing rate, DILG, ULAP, and the SGLG partners kept the course. Information dissemination continued. Capacity-building support for local governments continued. And the commitment and grit in implementing SGLG are showing increasing results. In the recent 2016 round of assessment, 306 local governments – 41 provinces, 48 cities, and 209 municipalities – already passed the SGLG. The clear goal is to have increased number of SGLG passers through the years.
Because local governments have autonomy over their plans and budgets (or at least more autonomy compared to the powers of subnational governments in other countries), national government cannot in essence impose to local governments what they should do. But SGLG is emerging as the mitigating variable. SGLG functions not just as a measure to clearly indicate where the non-performing local governments are, but also a guide to local governments on how to perform better.
Coupling performance with incentives
SGLG raises the standards of performance of local governments, and does not come without due rewards. Passing the overall Seal means that a well-performing local government becomes eligible to receive more national government funding, such as grants from the Performance Challenge Fund. For 2016 passers, allocations are at 4 million Philippine pesos ($80,000 USD) per province, and 3 million pesos per city and municipality. Meanwhile, achieving the Good Housekeeping component means that the local government can be allowed to take bank loans, and access more national government funding such as that from the Bottom-Up Budgeting program (which is to be replaced by the Assistance to Disadvantaged Municipalities program in 2017). The financial incentives for local government passers matter, especially since most local governments are still highly dependent on their Internal Revenue Allotment, which is the automatic share of local government budgets from the national budget, and are not fully able to generate local income to sustain basic administrative and service delivery functions.
But it is not just about the funds. The increased awareness of local government officials about the technicalities of service delivery laws was an added value by itself. The real magic of the more difficult standards was the prestige and the “peer pressure” that came with passing the SGLG. Local governments put up big tarpaulins announcing their SGLG win in their localities, as a testament to their performance. Governors and mayors would check on each other if each had their Seals; else, be pressured to “not get left behind” – a race to the top for local government performance.
Targeting higher development results
Moving forward, the SGLG is again taking another form to now reflect the Sustainable Development Goals, through the Local TARGET (Transforming Accountable and Responsive Government through Empowerment and Teamwork) program. This is a concrete response to upgrade the standards of local government performance to reflect global goals such as those in the areas of clean water, energy, and sanitation; inclusive and equitable education; good health and well-being; disaster resilience; business and investment promotion; peaceful, orderly, and just communities; and clean and liveable environments. It is also within the plan to continue the capacity-building and engagement with local governments to hopefully increase the number of passers in the performance measurements over the next years.
The story of local government performance is still unfurling. And the stakes, with all our hopes, are high. Local governments are at the front lines of service delivery in our archipelagic country of 102 million – and the strength of the country as a whole is only as good as the strength and performance of its smallest government units.