World Bank urges results-based funding for Philippines' P58 billion LGU program

The World Bank highlighted the potential of the P58 billion Local Government Support Fund to drive regional growth, but warned it could become a vehicle for political patronage if not reformed. Makiko Watanabe suggested shifting to results-based financing, rewarding LGUs that deliver tangible outcomes and encouraging inter-LGU investments in areas like transportation, digital networks, and disaster resilience. Zafer Mustafaoğlu emphasized the need for transparent, timely project execution and consideration of neighboring LGUs' economic potential.

Senate finance committee chair JV Ejercito questioned the fund's distribution criteria, urging safeguards, while Senate President Sherwin Gatchalian stressed transparency for good governance. The World Bank report also noted that only about 30% of council-endorsed proposals secure funding, and many LGUs struggle to spend existing resources, leaving large cash reserves unused. Its main recommendation is to move toward corridor-based development that aligns national and local plans.