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Fiscal Tranfers, Centrally-Provided Local Public Services and Fiscal Balance: Exploring Alternative Transfer Formulas

Author

Listed:
  • Joseph J. Capuno

    (School of Economics, University of the Philippines Diliman)

  • Thelma C. Manuel

    (National Economic Development Authority)

  • Ma. Bella T. Salvador

    (National Economic Development Authority)

Abstract

A conceptual framework is developed and used to estimate the Internal Revenue Allotment (IRA), other central fiscal transfers and the funds for local public services directly provided by national government agencies in the Philippines. The estimates show that the total central resource transfers to local government of their constituencies have been increasing during the period 1995-99. The bulk of these transfer was the centrally-provided local public services, whose allocation however may have aggravated the fiscal imbalances across local government units. However, improvements in the fiscal imbalances achieved solely through an adjustment in the current IRA formula would be minimal or very costly to either some local government units or to the national government. The results therefore suggest a more consistent allocation of the IRA and other fiscal transfers and, possibly, the further devolution of the centrally-provided local public services.

Suggested Citation

  • Joseph J. Capuno & Thelma C. Manuel & Ma. Bella T. Salvador, 2002. "Fiscal Tranfers, Centrally-Provided Local Public Services and Fiscal Balance: Exploring Alternative Transfer Formulas," UP School of Economics Discussion Papers 200204, University of the Philippines School of Economics.
    • Handle: RePEc:phs:dpaper:200204
    as

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    File URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/103/96
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    References listed on IDEAS

    as
    1. Manasan, Rosario G., 1997. "Local Government Financing of Social Service Sectors in a Decentralized Regime: Special Focus on Provincial Governments in 1993," Discussion Papers DP 1997-04, Philippine Institute for Development Studies.
    2. Ruperto P. Alonzo, 1997. "Channeling Resources to Local Development Concerns: Issues and Options," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 34(2), pages 111-142, December.
    3. Joseph J. Capuno, 1999. "Some Inferences from the Distribution of the Devolved Health Services," UP School of Economics Discussion Papers 199909, University of the Philippines School of Economics.
    4. Mercado, Ruben G., 1999. "Regional Budget Determination and Allocation: A Policy Revisit," Discussion Papers DP 1999-29, Philippine Institute for Development Studies.
    Full references (including those not matched with items on IDEAS)

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