PHILIPPINES

The Philippines is a unitary republic with a presidential regime, according to the 1987 Constitution. The president, who acts both as the head of state and the head of government, is elected by universal suffrage for a six-year term and may run two consecutive terms. The legislative power is vested in a bicameral congress which comprises the Senate and the House of Representatives. The Senate is composed of 24 members, elected directly by universal suffrage; half of the seats are renewed every three years and each senator serves a six-year term. The House of Representatives is composed of 305 members, of which 245 are elected by territorial jurisdiction via universal direct suffrage, and the remaining 60 are elected via a parallel party-list representation system. Judiciary power is held by the Supreme Court, and three levels of lower courts, which are established through law by the Congress of the Philippines.

Decentralisation in the Philippines results from a long-standing process. Local governance is mentioned in the 1987 Constitution (Article X) and embodied in the Local Government Code (LGC), adopted via the Republic Act No. 7160 in 1991. The LGC establishes a four-tiered system of local government and makes provisions for the basic structure, roles and responsibilities of local governments in the country. It expanded the scope of powers and functions of local government units. Nevertheless, the fiscal autonomy of subnational governments remains weak, with the exception of some highly urbanised cities, particularly Metro Manila.

The Department of Interior and Local Government (DILG), within the Ministry of Interior, is in charge of overseeing local governments, and a number of other national agencies are mandated by laws and regulations to coordinate and monitor local performance in service delivery. These include the Department of Finance, the Department of Budget and Management, the National Economic and Development Authority (NEDA), as well as the Commission on Audit and the Civil Service Commission. In addition, there are numerous national associations of subnational governments in the Philippines (e.g. League of Cities of the Philippines, League of Municipalities, etc.), gathered under the umbrella organisation “Union of Local Authorities of the Philippines” (ULAP), which promotes the interests of subnational governments and endorsement of the Local Government Code.

Local and Regional Development Councils have been established at subnational levels of government to handle regional development policies. In most regions, the Regional Development Councils and Local Development Councils are formed by regional, provincial, municipal and city-level elected officials and administrative officers as well as representatives from civil society and the private sector. They are in charge of coordinating the formulation, implementation and follow-up of regional and local development plans. In the National Capital Region (NCR) of Metro Manila, the Metropolitan Manila Development Authority (MMDA) is the agency directly in charge of regional development, in coordination with the NEDA and the mayors of the cities and municipalities included in the region.

The current decentralisation debate revolves around the transformation of the Philippines from a unitary into a federal country. In 2016, a process was initiated to set up a consultative committee responsible for drafting a new Constitution that would make the Philippines a federal country, in order to give more autonomy to the special regions (see below), among other objectives. The draft Constitution was supported by the House of Representatives and presented to the president in 2018, but the project was later abandoned in 2019.

TERRITORIAL ORGANISATION
MUNICIPAL LEVEL	INTERMEDIATE LEVEL	PROVINCIAL LEVEL	TOTAL NUMBER OF SNGs (2022)
42 046 Villages	146 Cities and 1 488 Municipalities	82 Provinces
Average municipal size: 2 606 inh.
42 046	1 634	82	43 762

OVERALL DESCRIPTION: According to the 1987 Constitution, subnational government in the Philippines is four-tiered and composed of provinces, cities, municipalities, and barangays (villages). Subnational governments at each level are endowed with elected executives and assemblies. The country is also composed of 7 107 islands. Each of the three levels of subnational governments is self-governing, and since the adoption of the Republic Act No. 7166 in 1991, elections for national and local officials are synchronized. Subnational government elections are to take place every three years, corresponding to midterm elections.

PROVINCIAL LEVEL: The country is divided into 82 provinces at the upper tier of subnational government. The Latest change includes the ratification of Republic Act (RA) No. 11550 which, as of September 2022, divided the province of Maguindanao into two provinces, namely: Maguindanao Del Norte and Maguindanao Del Sur.

Each province is led by an elected governor and an elected provincial council. According to the constitution, they shall ensure that the acts of their component cities and municipalities are within their prescribed powers and functions. Local legislative power is exercised by Provincial Boards (Sangguniang Panlalawigan).

The country is also structured into 17 statistical/planning regions, composed of 13 ordinary regions plus four special regions: The Cordillera Administrative Region, the Bangsamoro Autonomous Region of Muslim Mindanao (ARMM), the Negros Island Region, and the National Capital Region. The Bangsamoro Organic Law (Republic Act No. 11054), passed by referendum in January 2019, gave rise to the Bangsamoro Autonomous Region of Muslim Mindanao, replacing the Autonomous Region of Muslim Mindanao. The Act provided a new legislative framework for the region and further political autonomy from the national government. The BARMM is the only region with an elected government. Three regions have more than 10 million inhabitants (Calabarzon, the National Capital Region (NCR) and Central Luzon). At the other end of the spectrum, the Cordillera Administrative Region and Caraga are the less populous, with 1.8 million and 2.8 million inhabitants respectively. The GDP per capita in the wealthiest region, the NCR, is 7.6 times higher than that of the ARMM.

INTERMEDIATE LEVEL: The intermediate level is composed of cities and municipalities and villages. For both cities and municipalities, the executive power is held by an elected mayor. The legislative power is vested in elected local legislative bodies, called respectively the Sangguniang Panlungsod for the cities and the Sangguniang bayan for the municipalities.

The distinction between cities and municipalities is based on the land area, number of inhabitants and financial resources. The largest entities are cities, which are further categorized into three sub-categories: Highly-Urbanized Cities (33); Independent Component Cities (5); and Component Cities (108). The first two categories of cities are outside provincial jurisdiction and oversight, due to their large capacities. The threshold to distinguish between Cities and Municipalities is set at 100 000 inhabitants or a land area above 100 square kilometres, and at least PHP 400 million per year in local revenue for the last two consecutive years. On the other hand, the minimum requirement for a municipality are: 25 000 inhabitants and a land area of 50 square kilometres, and at least PHP 2.5 million in average annual income for the last two consecutive years.

MUNICIPAL LEVEL: Villages, or barangays, are the lowest level of local government. Barangays are headed by an elected official – Barangay Chairperson – and an elected village council (Sangguniang Barangay). The barangays are sub-divisions of cities and municipalities and can be assimilated to neighbourhoods.

Over the past few years, the number of municipalities and barangays has risen steadily, although the process has recently slowed down. New barangays can be created by decree, and as a result of the fragmentation of a former one.

HORIZONTAL COOPERATION: The 1987 Constitution (Article X, Section 13) mentions that “local government units may group themselves, consolidate or coordinate their efforts, services, and resources for purposes commonly beneficial to them in accordance with law”. Provinces, cities and municipalities, as well as barangays, may establish Memoranda of Agreement to coordinate service delivery and cooperate with their respective assets. In particular, recent legislation (Ecological Solid Waste Management Act of 2000) promotes the establishment of Provincial Solid Waste Management Board to facilitate inter-municipal cooperation in the waste management sector. Since then, the number of inter-municipal agreement has increased slowly.

Moreover, Local Development Councils are mandatory by law (see above). They are composed of local government representatives of the different tiers of government within the jurisdiction, allowing for vertical coordination in policy formulation, long and middle-term development plans and public investments.

Local government’s competences, powers and resources are defined in the 1991 Local Government Code, which establishes that local government units shall exercise their powers as corporate entities to promote general welfare and provide citizens with basic services and facilities. Cities and municipalities are the local governments endowed with the majority of public service provision competences and authority. These include welfare programs, waste management, construction of municipal and infrastructure facilities and transportation, among others. Provinces are in charge of building infrastructure funded with provincial funds, upgrading tax collection mechanisms and enabling inter-municipal cooperation. In the National Capital Region (NCR), the national agency called the Metropolitan Manila Development Authority holds several planning, monitoring and coordination functions and exerts regulatory and supervisory authority over the delivery of metro-wide services. These tasks, however, do not interfere with the exercise of competences by lower local government units. Finally, barangays’ responsibilities include agricultural support and maintenance of health centres and infrastructure.

Main responsibility sectors and sub-sectors
SECTORS AND SUB-SECTORS	Provincial level	Intermediate level	Municipal level
1. General public services (administration)	Public buildings and facilities	Civil Registry; Public buildings and facilities,	Maintenance of Local justice facilities (Katarungang Pambarangay)
2. Public order and safety	Provincial firefighting services; Traffic signs and regulation	Traffic control; Community Police	Public order maintenance (assist city and municipal authorities).
3. Economic affairs / transports	Provincial roads; urban transit systems; Employment services; Support to local enterprises and entrepreneurship; Agriculture and rural development; Regional tourism	Local roads; Park spaces; Urban transit; School transport; Local tourism; Local markets	Agricultural support services; Maintenance of barangay roads and bridges; Support satellite of public market.
4. Environment protection	Natural preservation; Soil and groundwater protection; Climate protection; Sewerage.	Parks and green areas; Waste management and sanitation ; Street cleaning; Natural preservation	Support in beautification, solid waste collection and disposal
5. Housing and community amenities	Construction/renovation of housing; Housing management	Construction/renovation of housing; Water supply ; Public lighting; Urban and land-use planning; Urbanism	Maintenance of water supply systems.
6. Health	Regional hospitals with Emergency Medical Systems	Primary healthcare (medical centres); Preventive healthcare	Barangay health services and day care centres; Hygiene and sanitation.
7. Culture & Recreation	Regional museums; Cultural heritage	Sports; Libraries; Local museums	Maintenance of reading; Sports facilities.
8. Education	Secondary education	Pre-primary and primary education with school district
9. Social Welfare	Elderly; Disabled individuals (benefits and services)	Social care for children and youth; Support services for families

Scope of fiscal data: Provinces, cities and municipalities.

Other

Medium

Medium

GENERAL INTRODUCTION: The Constitution and the Local Government Code of 1991 establish the legal grounds for subnational governments’ fiscal autonomy, and the General Appropriation Act sets the composition of the General Budget at the central government level. Subnational governments have the authority to impose and raise local taxes such as real property and local business taxes, and to collect user fees to finance their spending. However, most subnational governments – particularly at the lower level – rely almost exclusively on mechanisms of fiscal transfers from the central government, primarily via the Internal Revenue Allotment (IRA), now referred to as the National Tax Allotment (NTA) which represent up to 98% of subnational revenue for some individual local governments.

The low level of subnational government own-source revenue is at odds with the large number of responsibilities they have, which leads to under-utilisation of funds and the impossibility for most subnational governments to fulfil their mandates, especially regarding infrastructure investment. As a result, several subnational government mandates are executed by national agencies. In 2018, in an effort to increase subnational government resources and local autonomy, the Supreme Court passed the Mandanas-Garcia ruling (effective in 2022, for a transition period until 2024). The ruling introduced changes in the NTA to increase the share of subnational revenue on one hand, and on the other hand clarified the devolution of responsibilities for public services to subnational governments, corresponding to the devolution of these new resources.

In 2021, a Budget Modernisation Bill was sent for examination to parliament. It aims to streamline the management of public resources, to introduce a Budget Priorities Framework (to ensure that the national budget is allocated towards clear national priorities, in particular for infrastructure), and to enhance accountability, transparency and people’s participation, in particular through participatory budgeting.

Subnational government expenditure by economic classification
2020	Dollars PPP / inhabitant	% GDP	% general government	% subnational government
Total expenditure	400	4.8%	15.7%	100%
Inc. current expenditure	359	4.3%	16.5%	89.7%
Compensation of employees	104	1.2%	15.7%	26.0%
Intermediate consumption	144	1.7%	25.5%	36.1%
Social expenditure	108	1.3%	35.7%	27.0%
Subsidies and current transfers	-	-	-	-
Financial charges	2	0.0%	1.4%	0.6%
Others	0	0.0%	0.0%	0.0%
Incl. capital expenditure	41	0.5%	11.1%	10.3%
Capital transfers	-	-	-	-
Direct investment (or GFCF)	41	0.5%	11.1%	10.3%

EXPENDITURE: Total subnational government expenditure accounted for 15.7% of general government total expenditure and 4.8% of GDP in 2020 (compared with 36.6% and 17.1%, respectively, on average in OECD countries). The biggest share of subnational government expenditure is held by cities (44%) and municipalities (37%), followed by the provinces (20%). Local government expenditure in 2020 was mainly directed at covering current expenditure, of which more than one third went to intermediate consumption, and the remaining shared to staff expenditure and social expenditure.

DIRECT INVESTMENT: Subnational government investment in the Philippines is relatively low, accounting for 10.3% of total subnational government expenditure and 0.5% of GDP in 2020 (compared with 11.3% and 1.9%, respectively, on average in OECD countries). Its share in total public investment (11.1%) is particularly low as compared with the OECD average (54.6% in 2020).

By law, specifically Section 287 of the Local Government Code, all subnational governments are required to allocate at least 20% of the received NTA (main transfer from the central government) for the development of social or economic projects. The Annual Investment Program (AIP) of each subnational government must be aligned with the approved Local Development Investment Program (LDIP). The current national infrastructure programme, “Build! Build! Build!”, which amounted to around PHP 9 trillion from 2016 to 2022, intends to devolve subnational governments a greater role in infrastructure development and maintenance. It contains a list of priority projects (road networks, flood control systems, hospitals and health centres, school buildings, housing, etc) identified by the NEDA Board Committee on Infrastructure (INFRACOM) and the Investment Coordination Committee (ICC)

Between 2012 and 2016, a new, more inclusive and participatory approach to public investment decision-making was experimented through the Bottom-up Budgeting (BuP) system, to tackle poverty reduction by enhancing investment throughout the country. The system aimed to take further into account the inputs and needs identified by subnational governments during the national governments’ budget drafting, as identified in their respective Local Poverty Reduction Action Plan (LPRAP). The BuB system was dropped in 2016, to be replaced by the Assistance to Disadvantaged Municipalities (ADM) Programme.

Subnational governments at all levels can finance investment projects through Public-Private Partnerships. In this regard, the Municipal Development Fund has, since 2019, a dedicated PPP Fund to assist subnational governments finance PPP projects in specific sectors, including social and environmental projects and solid waste management facilities. As of December 2020, the total number of PPP projects stood at 234, half of them being implemented by subnational governments.

Subnational government expenditure by functional classification
2020	Dollars PPP / inhabitant	% GDP	% general government	% subnational government
Total expenditure by economic function	-	-	-	-
1. General public services	200	2.4%	-	60.7%
2. Defence	0	0.0%	-	0.0%
3. Security and public order	0	0.0%	-	0.0%
4. Economic affairs/transports	53	0.6%	-	16.0%
5. Environmental protection	0	0.0%	-	0.0%
6. Housing and community amenities	0	0.0%	-	0.0%
7. Health	0	0.0%	-	0.0%
8. Recreation, culture and religion	0	0.0%	-	0.0%
9. Education	0	0.0%	-	0.0%
10. Social protection	77	0.9%	-	23.3%

General public services is the main area of subnational government spending, accounting for approximately 61% of total subnational public spending in 2020. Around 23% of subnational government expenditure goes to so-called social services which encompass, based on the national classification, health expenditure, social protection, education and housing. About 16% of subnational government expenditure is allocated to economic services. Provinces, cities and municipalities have various spending patterns. For instance, excluding general public services, provinces spend the most of their expenditure on health (25%), whereas cities and municipalities tend to spend more of their budget on economic services and social protection. Economic affairs include agricultural support services, natural resources and environmental management, tourism, trade, and communications, among others, which are for a significant part under the realm of provincial and city-level decentralised functions.

Subnational government revenue by category
2020	Dollars PPP / inhabitant	% GDP	% general government	% subnational government
Total revenue	406	4.8%	19.4%	100%
Tax revenue	89	1.1%	7.1%	22.0%
Grants and subsidies	272	3.2%	-	67.0%
Tariffs and fees	29	0.4%	-	7.2%
Income from assets	3	0.0%	-	0.7%
Other revenues	13	0.2%	-	3.1%

OVERALL DESCRIPTION: In 2020, subnational government revenue represented 4.8% of GDP and 19.4% of total public revenue (compared with 17.1% and 36.6% on average in OECD countries). Section V of the Constitution provides local governments with the powers to create their own sources of revenues and to levy taxes, fees and other charges. Subnational government revenue is composed of tax revenue, tariffs and fees (both encompassed under the term “locally-sourced revenue” in the national nomenclature), transfers from the central government, and interest income.

Overall, most subnational government revenue comes from fiscal transfers from the central government under the National Tax Allotment (NTA) mechanism, as established by section 238 of the Local Government Code and amended in the 2022 General Appropriation Act. Although the barangays, at the sub-municipal level, are not included in the quantitative table above, they also perceive revenue from a local tax on business, several minor fees, and a share of the Internal Revenue Allotment.

TAX REVENUE: Subnational government tax revenue is considered as a component of so-called “locally-sourced revenue”, based on the LGC Book II (titles I and II). It corresponds to 1.1% of GDP and only 7.1% of total public tax revenue (compared with 7.2% and 32.3% respectively in OECD countries on average in 2020). Local taxes are collected at the local level. Cities are the local government unit with the highest capacity to collect revenue (51% of their revenue). Tax rates are set under the LGC, and subnational governments may adjust tax rates up to 10%, once every 5 years.

The main source of local tax revenue for local authorities is the business tax (CIT) levied on business activity (accounting for 58% of subnational government tax revenue and 12.8% of subnational government revenue). It is levied mainly by cities (84% of total tax receipts in 2020) and municipalities.

The second main local tax is the property tax, levied by provinces, cities and municipalities on land and real estate. Overall, the property tax accounted for 37% of subnational government tax revenue 0.4% of GDP in 2020 (compared with 1.0% of GDP on average in OECD countries). The property tax base is set by subnational governments through the Schedule of Market Values, which must be revaluated once every 3 years. At the local level, assessors are responsible for submitting information (Quarterly Reports on Real Property Assessments) on the assessed value of real properties within local jurisdictions, according to the property classification in place. The assessor transmits information using the local government Integrated Financial Tools system. However, the current valuation process led to local disparities in property valuation, affecting the tax revenue performance. To address this challenge, the central government is planning to recentralise the approval of the schedule of market values by local government units back to the secretary of Finance, by the passing of the Philippines’ Real Property Valuation and Assessment Reform Act (House Bill No. 4664). Initiated in 2019, the Bill is still pending approval by the Senate as of early 2022. In addition, the central government is currently considering other property-related tax reform proposals, including the introduction of a national betterment levy.

An additional levy on real property tax is collected to feed the Special Education Fund in respective subnational governments. However, according to the Department of Finance, in 2019, 57% of provinces and 87% of cities had outdated market valuations, with wide gaps with regards to taxing and collection capacity. In addition, subnational governments can collect an Idle Land Tax, an optional additional levy on vacant lands.

There are a few other local taxes such as tax on delivery trucks, the community tax, or the professional tax.

OTHER REVENUE: The LGC makes specific provisions regarding the other revenue-raising powers of subnational governments, including a list of user charges and fees to be collected by each level of government. Administrative fees and charges include a number of regulatory fees (market place selling fees, building permit fees, visitor fees and exploitation fees), and user charges (on police clearance, health certificates, garbage fees, toll fees, etc).

Property income, on the other hand, consists of property leasing and sales, as well as of income from municipal companies and public utilities.

Subnational government fiscal rules and debt
2020	Dollars PPP / inh.	% GDP	% general government debt	% SNG debt	% SNG financial debt
Total outstanding debt (consolidated?)	53	0.6%	1.2%	100.0%	-
Financial debt	53	0.6%	-	100.0%	100.0%
Currency and deposits	0	-	-	0.0%	0.0%
Bonds / debt securities	0	-	-	0.2%	0.2%
Loans	53	-	-	99.9%	99.9%
Insurance pensions	0	-	-	0.0%	-
Other accounts payable	0	-	-	0.0%	-

FISCAL RULES: The LGC lays out budget rules and specific regulations which are enforced under the supervision of the Department of Finance, through the Bureau of Local Government Finance, to minimise the risks associated with subnational government debt. As specified in the Republic Act No. 7160, Local Development Councils are required to submit their approved local development plan and annual investment program to the local finance committee, prior to the budget preparation, in accordance with applicable laws. The local finance committee must use the plan to ensure that projects proposed for local funding are included in the budget. Additionally, the local government must endeavour to have a balanced budget in each fiscal year of operation.

DEBT: According to Title IV of the Local Government Code (LGC), subnational governments may borrow to finance local infrastructure and other socioeconomic development projects (“Golden Rule”), in accordance with the provisions of the local development plan and the public investment programme. However, proposed projects to be financed through borrowing must have been approved, part of the Approved Annual Investment Plan.

According to Section 324(b) of the LGC, debt ceiling for subnational governments is set at 20% of subnational revenue. Subnational governments can access short, medium and long-term loans from a large variety of government bank and lending institutions, the main ones being the Land Bank of Philippines (48% of loans to subnational governments in 2020) and the Development Bank of the Philippines (35%), using real estate or other securities as collateral. Subnational governments can also borrow from the Municipal Development Fund. All local governments need, prior to borrowing, certification from the Net Debt Service Ceiling and Borrowing Capacity to the Department of Finance. According to Section 296 of the LGC, all local government units are also authorized to issue bonds and other obligations, subject to the rules and regulations of the Philippines’ Central Bank and the Securities and Exchange Commission.

In 2020, subnational government debt accounted for 0.6% of the GDP and 1.2% of total public debt (compared with 27.9% and 20.2% respectively on average in OECD countries). The subnational government debt is quasi-exclusively composed of loans, although subnational bonds represent a very small share of subnational government debt.

TERRITORIAL MANAGEMENT OF THE CRISIS: On March 2020, the president of the Philippines declared a state of public health emergency, following the first officially reported case of local transmission of COVID-19. Subsequently, the central government issued a National Action Plan (NAP) Against COVID-19 which provided guidelines on how to manage the crisis across the country. It has been implemented by the COVID-19 Inter-agency Task Force (IATF) for the management of emerging infectious diseases resolutions. The IATF is chaired by the Department of Health, and gathers close to 20 central government departments and offices, to enhance cross-sector collaboration and provide adequate response to assess, monitor, contain, control, and prevent the spread of infectious disease epidemics in the country. To be able to respond to more localised issues and concerns, Regional and Local Task Forces were also set up in each region. Based on the degree of severity of the pandemic, various types of quarantine measures were applied across the territory. In particular, the regions of Metro Manila, Central Luzon and Calabarzon concentrated most of the COVID-19 infections, which led decision-makers to impose specific restrictions in these area, and to prioritise them for the vaccination rollout strategy.

Given that health responsibilities are shared in the Philippines between central and subnational governments, the national government’s Philippines Program for Recovery with Equity and Solidarity promoted a coordinated, whole-of-government approach, allocated objectives and responsibilities for the various government agencies and institutions.

EMERGENCY MEASURES TO COPE WITH THE CRISIS AT THE DIFFERENT LEVELS OF GOVERNMENT: Among the four pillars of the central government’s socioeconomic strategy against COVID-19, pillar II is dedicated to emergency support for vulnerable households, small business employees through assistance programmes and wage subsidies. The passing of the “Bayanihan to Heal as One” Act allowed the government to boost public spending on social protection and subsidies for more vulnerable households. Most of the grants to local governments were used to buy personal protective equipment, testing kits, medicines and vitamins, hospital equipment and supplies, food assistance, and relief goods, among other COVID-19-related expenses.

The central government took several temporary measures to support subnational governments throughout the crisis, including a one-time grant to subnational governments amounting to a month’s worth of NTA for cities and municipalities, and to a half month’s worth for provincial governments, in 2020. In addition, measures taken prior to the pandemic to increase the share of the NTA allocated to subnational governments helped subnational government to maintain their level of revenue throughout the pandemic. In 2022, the central government announced the distribution of a supplementary fund of PHP 10 billion, the Growth Equity Fund (GEF), dedicated to cover the funding requirements of the poorest, most disadvantaged and lagging subnational governments.

IMPACTS OF THE CRISIS ON SUBNATIONAL GOVERNMENT FINANCE: Subnational government’s own revenue was hit by the pandemic, in particular following the lockdown that was implemented in March 2020, which led to a decrease in user charges and fees from permits and licenses, tourism and businesses. Local tax revenue, on the other hand, performed relatively well during the first months of the pandemic, especially in rich provinces, cities and municipalities where the economy was benefitting from economic growth prior to the pandemic. Similarly, the total share of the National Tax Allotment (NTA) allocated to subnational governments, whose calculation is based on total public tax revenue from the third preceding fiscal year, increased by 38% in 2022 compared with 2021. However, it is expected that both local tax revenue and the share of the NTA will decrease starting in 2023, due to a decrease in total public tax revenue following the pandemic-induced economic slowdown.

On the expenditure side, subnational governments had to deal with increased expenditure in general public services, health and, more particularly, social welfare. In addition, subnational governments had to face increased extraordinary expenditures this same year due to natural disasters (typhoon). A special fund, the National Disaster Risk Reduction Fund (NDRRMF) was set up to provide subnational governments with financial aid to recover from the disasters.

To manage the impact of the crisis on their finances, subnational governments utilised their reserve funds and unexpended cash balances, which were transferred to the General Fund, and relied on the sale of property and other assets, while they did not significantly increase their borrowing.

ECONOMIC AND SOCIAL STIMULUS PLANS: The Philippines 2022 National Budget focuses on building resilience amidst the pandemic, sustaining momentum towards recovery, and continuing the legacy of infrastructure development. Amounting to PHP 5.024 trillion, equivalent to 23.3% of GDP and larger by 11.5% than the 2021 budget, the 2022 budget also put a strong emphasis on digitalisation and the development of ITC infrastructure throughout the country.

Regarding regional development, the Regional Development Councils have been tasked with elaborating Regional Recovery Programs (RRP) from COVID-19. The RRP should outline the different challenges that a given region had to face during the quarantine period; the region’s recovery framework and strategic action plan; and proposed programs, projects, and activities to effectively recover economically and socially. The RRPs are aimed to complement the Regional Development Plans for 2017-2022, in order to ensure that the current development efforts are well sustained despite the pandemic.