Bernardo M. Villegas
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Business-Academe Partnership with LGUs (Part 1)

             There are some sectors that are calling for the postponement of the devolution of certain vital governance functions from the national to the local level that is called for by the so-called Mandanas-Garcia ruling.  This was a ruling issued by the Supreme Court in 2018 mandating that the local government units (LGUs) internal allotment (IRA) should come from 40 % of all national taxes and not only from the collections of the Bureau of Internal Revenues (BIR) but also from the Bureau of Customs’ collections of import duties (which recently have been growing by leaps and bounds) and other taxes (also recently enhanced by reforms introduced by the CREATE bill).  During the last Administration, former President Duterte signed Executive Order No. 138 directing the national government to devolve to LGUs the implementation of what heretofore have been national government functions and give them a three-year transition period until 2024.  These functions refer to local infrastructure (for education, irrigation, and trade) agriculture and natural resource management, environmental services, telecommunication, peace and order, social welfare, transportation, tourism and housing services functions.

            Leading the call for postponement was local governance think tank Local Government Development Institute (LGDI) headed by Jonathan Malaya, former undersecretary of the Department of the Interior and Local Government (DILG).  Mr. Malaya asked for the extension of the transition period under EO 138 from three years to six years, or to 2027 instead of 2024.  According to Executive Director Malaya, “Based on our interactions with LGUs across the country, many are clearly not ready for full devolution.  The risk of failure is high.  We should learn from our experiences in the 1990s during the first phase of the devolution which was very challenging.  Therefore, the appropriate interventions have to be given to the LGUs.”  He recommended that the DILG’s Local Government Academy (LGA) could take the lead in capacity development interventions for the local governments to be ready to use the added resources more efficiently.  All efforts must be exerted to harmonize all the many capacity development interventions of such government agencies as the Department of Budget and Management (DBM), the National and Development Authority (NEDA), the Department of Finance (DOF), the Development Academy of the Philippines (DAP), and third-party service providers for the LGUs.        

            There are LGUs that are proactive in partnering with the private business sector such as those reported by Kyle Aristophere T.Atienza in this paper (December 12,2022).  For example, Quezon City is entering into joint ventures with private enterprises in such infrastructures as waste-to-energy facilities, energizing public building with solar power, rehabilitation of drainages and a main disposal facility and the adoption of electric vehicles. In Puerto Galera in Mindoro, the projects that will be undertaken under the PPP arrangement are the municipal waterworks system, construction of new communal irrigation for agri-tourism programs, small water impounding project, construction of artesian wells, spring development and rain-water collectors, among others.  In Baguio, Mayor Benjamin Magalong announced that a mini-hydro power plant and a waste-to-energy facility are among the City’s priority PPP projects.  In Batangas, Governor Hermilando Mandanas is eyeing an ambitious international cargo airport to service the numerous factories that have located in the industrial zones that proliferate in the province.  In Ilocos Norte, Governor Matthew Manotoc would like to identify foreign investors who can partner with the province in telecommunications to take advantage of the submarine cable that will connect Pagudpud to the U.S., a project of Amazon. This equally ambitious PPP can make Laoag a most preferred site for data centers.  These are examples of the more progressive LGUs that do not have to postpone the devolution of important functions from the national to the local levels.

            What about the less qualified and less financially endowed LGUs? Most of these LGUs are in the countryside and are the ones whom the World Bank just advised to prioritize agricultural spending.  In a recent briefing, World Bank Country Director for the Philippines Ndiame Diop encouraged LGUs to “look at farm-to-market roads, irrigation, research and development—those have been undervalued and that’s where you need sufficient funding to raise productivity.   Those areas could receive much more resources.”  World Bank Senior Agriculture Economist Anuja Kar suggested that LGUs should come out of the single commodity (rice) focus and look at a more holistic level.  He reiterated what many Filipino economists have been saying for some time, that we have not diversified enough our agricultural products.  As Kar added: “Rice hasn’t really picked up, overall, we are seeing the amount of spending going into the sector is not generating the result.”  In this area of product diversification, a significant role can be played by state colleges and universities as well some select private universities in the countryside that have agricultural or agribusiness schools to work closely with the LGUs in the implementation of product diversification strategies.  Professors and researchers in the fields of agricultural sciences, management and economics can put up think tanks that can partner with LGUs to help prepare feasibility studies for the diversification of agricultural produce in any given municipality.

            Here, let me give as example an institution I am most familiar with, i.e, the Center for Food and Agribusiness of the University of Asia and the Pacific.  Despite its being located in the City of Pasig, its research and training activities are spread out all over the country, including in regions in the island of Mindanao as well as in Northern Luzon.  The CFA has been at the forefront of food and agribusiness research since 1983.  It conducts industry, policy and strategy studies aimed at enhancing the agri-food sector’s competitiveness.  Its training programs include, not only the executives of private agribusiness enterprises but also heads of LGU units.  The CFA traces its roots to the Agribusiness Unit of the Center for Research and Communication (CRC), the forerunner of UA&P.  Started by a former World Bank agribusiness economist, Dr. Rolando Dy, CFA is one of the more established agri-food research and training institutions in the country.

            The CFA runs the Agribusiness Executives’ Program (AEP), a six-month certificate program designed to develop the managerial, analytical and strategic thinking skills of managers working in the field of agribusiness in both the private and public sectors.  It is a most effective means of upskilling, reskilling and retooling LGU heads and other executives in the field of agribusiness management.  It is the quickest way to build capacity at the LGU level in the field of agriculture.  It consists of three-day classes every month (Thursday to Saturday) for six months.  Lectures are given by leading agribusiness experts, industry practitioners and other guest lecturers in the field both of agricultural sciences and management.  It uses an action-learning approach, with emphasis on skills development and application of learnings to field-based projects and organizations.  An added value to the LGU executives is the close interaction and networking with top executives of private agribusiness enterprises which can give way in the future to Public-Private Partnerships in any of the links of the agribusiness value chain, i.e. farming, post-harvest, cold storage, logistics, food processing, retailing and up to the final consumers.  For colleges and universities in the countryside, the CFA can actually be replicated by putting together professors and researchers from the schools of agriculture, management, engineering, sciences and other related disciplines.  Those interested in the programs and projects of the Center for Food and Agribusiness can go to its website.  To be continued.