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LGUs urged to practice good governance

The Development Bank of the Philippines (DBP) is encouraging local government units (LGUs) to adhere to sound governance practices and establish financial credibility in order to get better access to the bank’s various financing facilities.

DBP president and chief executive officer Reynaldo G. David said the bank puts premium on LGUs that have viable development projects, produce quality cash flows and efficiently run as a result of good governance.

“It pays to embark on sound governance. Beyond establishing and enhancing the credibility and integrity of our institutions, good governance opens up windows of opportunities. It facilitates access to financing, technical and other needed interventions for us to deliver concrete results vis-à-vis our given mandate,” David said during a recent public governance forum organized by the Institute of Solidarity in Asia.

David added that DBP has P47.6 billion in available funds that can support the various development thrusts of LGUs which adhere to the ethical standards and good corporate values of fairness, accountability and transparency in their own operations. “We’re looking for the right projects and we’re looking for the right LGU-partners,” he noted.

David stressed that the bank specifically focuses on assisting projects in education, health care, infrastructure and environmental protection. Among the select local government units that DBP is partnering with are the city government of Cabanatuan for the construction of public school buildings; municipality of Malasiqui, Pangasinan for the expansion of its public market and implementation of a solid waste management program; and the provincial government of Camarines Sur for tourism development.

He also reported that the Monetization of Internal Revenue Allotment Collectibles for Local Empowerment 2 or MIRACLE 2 program, where DBP is the issue manager, has monetized IRA differential of almost P7.7 billion covering two tranches.

David also said the bank is encouraging LGUs to tap the LGU bond market in supporting their development projects. “This approach gives LGUs the same advantage as a loan and is not constrained by the IRA level. This also gives the added benefit of contributing to the development of the domestic capital markets and promoting long-term domestic savings.” DBP was tapped as underwriter in the issuance of the P140-million Butuan Balanghay Bonds, which financed the construction of the first phase of a one-stop government center in Butuan City.

David also highlighted how good governance has worked for DBP, which has earned local and international recognitions and posted robust financial growth due to its sound corporate governance practices.

“With good governance, it’s always a win-win situation for any organization. Suffice it to say, if good governance worked for DBP then there’s definitely no room for any doubts on the many opportunities it can bring especially to LGUs,” David ended.

Source: Philstar