Local government units (LGUs) should improve their competitiveness to attract more investments and to develop their local economy, local officials and private sector representatives said in a LGU summit held Wednesday in Makati City.

Speaking at the 2008 Local Government Code Anniversary Conference, government officials and private sector representatives said improving the competitiveness at the local level and developing a strong local economy can help the country cope with the effects of the global economic slowdown.

“Harnessing LGU competitiveness is important in mitigating the effects of economic crisis,” said Interior and Local Government Secretary Ronaldo Puno in a statement read by DILG undersecretary Austere Panadero.

Puno said the 17 years of the implementation of the Local Government Code has enabled the LGUs to increase their contribution to the national economy. “The Local Government Code (LGC) is instrumental in raising the local economic development and the growth of cities.”

The LGC, which was enacted 17 years ago, devolves some functions from the national government, like taxation, registration of business to local government units—provinces , cities, municipalities and barangays.

Puno said the LGC spurred development in the regions, which grew by an average of 5.2 percent from 2002-2006. The growth in the regions, he added, can be attributed to the growth of express processing zones and freeport zones and the concentration of activities in areas outside Metro Manila like Southern Tagalog and Central Luzon.

Set a clear vision

LGUs should have a clear vision to be more competitive, said Bohol vice governor Cesar Tomas Lopez. “You cannot be competitive if you do not know what you want to be.”

Federico Macaranas, executive director of the Asian Institute of Management Policy Center, said local governments must first know their strengths, weaknesses, opportunities and threats before they set a vision or a development plan.

“Competitiveness is about the potential to grow faster in the medium to long term and is attributed to the capacity to convert assets to resources,” Macaranas said.

Meanwhile, Puno said LGUs should find a brand for their locality whenever they are crafting their marketing strategy.

Lopez said local officials should set aside politics and build on the gains of the previous administration. “We should continue programs of the past administrations that are working.”

Financial cure

Quezon City Mayor Feliciano Belmonte Jr said to be more competitive, it is important to solve the financial problem of an LGU by improving revenue generation.

Belmonte said that although they met opposition from the business sector when they raised the business taxes in the city, the businessmen eventually became supportive of the move. The increase in business taxes in the city, Belmonte added, doubled the amount of business tax collected by the city.

Belmonte said Quezon City used to have a P3.7 billion budget when he assumed the post of city mayor. The budget, he said, already included the city’s share on the national taxes or the Internal Revenue Allotment (IRA). Belmonte said after seven years their budget has now reached to P7.4 billion.

Sunshine industries

LGUs are also encouraged to focus on attracting investments in sunrise industries in the country like agribusiness, mining, business process outsourcing and tourism.

“We must focus efforts on industry sectors of global scale and where we have a capacity to be star player,” said Ambassador Cesar Bautista, co-chair of the National Competitiveness Council (NCC). “We cannot be a jack-of-all-trades and a master of none.

Baustista said there is a need to replicate all the best practices of local government units because it can create a critical mass of local governments that can help the country to achieve medium and long term goals.

LGUs, Bautista added, should reduce bureaucratic processes and wastage and ensure peace and order, availability of infrastructure and reliable service to attract more investments. (abs-cbnNEWS.com/Newsbreak)

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