This report examines the fiscal decentralisation experience in Philippines. Since 1991, the central government has devolved significant spending, taxing, and borrowing powers to local governments. This paper discusses fiscal decentralization in the Philippines. It reviews the tax regimes in view of the vertical and horizontal fiscal gaps. Local governments receive intergovernmental fiscal transfer or block grants called the ‘internal revenue allotment’ based on a formula that has population, land size and equal sharing as criteria. In contrast, performance-based grants seem to open pathways for instilling greater accountability on the part of local governments. To make financing more accessible and competitive to local governments, it demonstrates the need to pursue further reforms in credit markets.

Other titles in Global Urban Economic dialogue series:

• Community Land Trusts 2012
• Economic Development and Housing Markets in Hong Kong and Singapore 2011
• Economic Role of Cities 2011
• Fiscal Decentralisation in Japan 2012
• Fiscal Decentralisation in Philippines 2011
• Gender and Economic Development 2011
• Impact of Global Financial Crisis on Housing Finance 2011
• Infrastructure for Poverty Reduction and Economic Development in Africa 2011
• Microfinance, Poverty Reduction and Millennium Development Goals 2011
• Organisation, Management and Evaluation of Housing Cooperatives in Kenya 2010
• Public-Private Partnership in Housing and Urban Development 2011
• The Sub Prime Crisis: The Crisis of Over-Spending 2011