MANILA, Philippines — President Ferdinand Marcos Jr. has been requested by his finance chief to encourage local government units (LGU) to spend more.
In a Palace briefing on Tuesday, Finance Secretary Benjamin Diokno said that LGU underspending is a domestic risk, meaning that while the local government has money, it is not spending it.
“We also requested the President to encourage local government units to expand its revenue sources and boost spending to support local and national growth,” said Diokno.
Asked why LGUs are not spending, Diokno pointed to the shorter terms of local executives.
“That’s always been the problem. Ever since I can remember, the LGUs have been in a surplus position, whereas the national government has been in a deficit position. And in our time, I think one of the reasons is that the LGUs by nature or LGU officials by nature are kind of shy to invest in some projects,” he said in a mix of English and Filipino.
Diokno explained that while LGUs can borrow money for projects, they tend not to do so, as planning could already take years.
“You spend one year preparing your feasibility study, et cetera, tapos ipe-present mo iyon sa bangko, year two, so tatakbo naman siya ng reelection wala pa siyang napapakita, pero may utang siya. So, mga baka ganoong isyu,” said Diokno.
(They spend one year preparing the feasibility study, et cetera, and present it to the bank in year two, so they will run in the reelection with nothing to show for it, but they have debt. So, that could be the issue.)
The Finance secretary also cited problems in hiring qualified people to do work.
“I think we are going to tap the Development Academy on the Philippines and the Local Government Academy to train people who may actually be instrumental in investing in some local government activities,” said Diokno.
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