Thursday, April 11, 2013

Investing In Local Economic Development (LED): Competitive Cities On The Rise *

(2nd of four parts)

* A paper presented by San Fernando City Mayor Oscar S. Rodriguez, to the Plenary Session, 38th Philippine Business Conference, Philippine Chamber of Commerce and Industry on October 9, 2012 held in Manila Hotel, Manila.

At the League of Cities of the Philippines, we recognize the fact that because one of every two Filipinos residing in the Philippines now live in cities, the challenges that confront us are enormous. The development demands in terms of infrastructure and services are often higher than what can be addressed by city governments.

Water District Experience
Still, I can also point to recent successes achieved by many cities around the nation toward improving living conditions. For example, Iloilo City has seen steady moderate growth that helped transform the fishing community into a thriving commercial center in the region, including a service sector that now contributes to more than 82 percent of the city’s economic output. 

In Balanga City, Bataan, the local government has set in motion a program to transform the former fishing community into a “world class university town where education plays a vital role” by 2020 under a newly adopted Comprehensive Land Use Plan that makes creative use of the city’s favorable location in the province. 

In Pangasinan province, Dagupan, which recently was named as one of the most competitive cities outside Metro Manila, continue to grow, stimulating expansion in nearby Alaminos, where a new international airport is now being built. 

There are many other examples of cities around the country gaining from progress trigerred by a surge in activities in tourism, local industries, and services. Unmistakably, the growth in these areas is being driven by astute and forward-looking investors like you.

In most of these success cases, such as the City of San Fernando, these gains may actually be sustainable with the kind of governance mechanisms that have been put in place. 


Reforms that paved the way for sustainable growth in San Fernando were set in motion in 2004 after I introduced a system of shared responsibility in governance that was centered on the Performance Governance System (PGS), a management know how patterned after the Harvard-developed Balance Score Card technology. 

In the beginning, the system was perceived as a highly technical tool that requires the mastery of superior management skills that are applicable only to the corporate world. Thus, there was reluctance and cynicism among traditional politicians. 

More specifically, the new governance system I had put in place was looked at with hesitancy because it required City Hall units and individual employees to always examine themselves and their performances from a set of four perspectives: Constituency, Organization, Finance and Infrastructure (COFI).

I worked hard and relentlessly and in the end there was general acceptance of the PGS system and the multi stakeholder group which had an influence on the general directions for the city that the elected officials are taking.

Under this principle of shared responsibility, I invited the private sector, the community, the village sector and civil society groups to the Multi-Sectoral Governance Council (MSGC) where they could all have a hand in managing the affairs of the city. 

The MSGC includes representatives from the business, transport, education, health, telecom, agriculture, religious, women and youth sectors – all of them having a stake in promoting and advancing our common interests. 

To attain our vision of becoming a global gateway and habitat for human excellence in 2020 and 2030, respectively, we in San Fernando challenged ourselves and our fellow stakeholders to become less dependent on the National Government coffers, by expanding our local revenue base and private sector partnerships. 

As a result, we have reduced our dependency on national government budget allotment from 53 percent to 46 percent while local revenues increased by 142 percent, from merely 203 million pesos in 2005 to 491 million peso in 2011. In 2011, we mobilized a total of 2 billion pesos in public infrastructure investments from partners. 

With better qualified and committed government employees, we invested in infrastructure support and quality management systems to achieve ISO-certification in our frontline services. Mediocrity in government service is now, we believe, a thing of the past in our city. 


As a result of the improved services, the number of all registered businesses in San Fernando increased to 7,779 in 2011, an increase of 3.4 percent from the total of 7,524 businesses in 2010. Compared to 2005, when the PGS system was started, the 2011 total represents an increase of 33.4 percent. 

This increase in the number of businesses operating in San Fernando City has also resulted in a steady rise in jobs created – 4,181 new jobs in 2011, up from 3,574 in 2010 and 3,058 in 2009.  (to be continued next issue) /MP

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