Revenue Generation - FISCAL DECENTRALIZATION AND REVENUE...

FISCAL DECENTRALIZATION
AND REVENUE MOBILIZATION:
CASE OF OLONGAPO
CITY, PHILIPPINES
by
VANDANA SAREEN
B.P., Physical Planning
School of Planning & Architecture, New Delhi,
1997
Department of Urban Studies and Planning in Partial Fulfillment of the
Requirements for the Degree of
Masters in City Planning
at the
Massachusetts Institute of Technology
June 2000
© 2000Vandana Sareen. All rights reserved.
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The author hereby grants to MIT permission to reproduce and to distribute publicly paper
and electronic copies of this thesis document in whole or in part.
Signature of Author
Department of Urban Studies
and Planning
May 5, 2000
Certified by
Associate Professor Paul Smoke
Thesis Supervisor
Accepted by
Associate Professor Paul Smoke
Chair, MCP Program
Department
of Urban Studies and Planning
Submitted
to the

FISCAL DECENTRALIZATION AND REVENUE MOBILIZATION:
CASE OF OLONGAPO CITY, PHILIPPINES
by
Vandana Sareen
Submitted to the Department
of Urban Studies and
Planning on May 12, 2000 in Partial Fulfillment of
the
Requirements for the Degree of Master in City Planning
ABSTRACT
This study examines problems encountered in revenue
mobilization by the Local
Government of Olongapo City under the Philippines fiscal decentralization
policy. It
documents the revenue generation
processes in Olongapo City, analyses the various
administrative and procedural roadblocks faced in generating
revenue from major local
sources, and recommends steps that can be taken to increase local revenues. It concludes
that revenue reform and performance
at the local level is highly dependent on local
administrative, technical and managerial capacity. Developing local
capacity in these
areas is critical for effective
implementation of the broader decentralized fiscal system.
Thesis Advisor: Paul Smoke
Title: Associate
Professor of the Practice of Development and Planning

4

ACKOWLEGEMENTS
My research
was made possible by the generous support of MIT and the World Bank.
I
am grateful to Prof. Paul Smoke and Aniruddha Das
Gupta for conceiving of this project.
I am
also grateful to Toru Hashimoto at World Bank office in Manila for overseeing the
work in the Philippines. I would also like to thank
Paul Smoke, my thesis advisor, for his
sturdy support,
encouragement, very clear and patient feedback and assisting with
the
editing; Jennifer Davis, my reader for
her comments and suggestions.
I also owe a great
deal of gratitude to Mayor Kate Gordon for her invitation to work with
Olongapo City Government;
Attorney Ferdinand Ariosteranos and Elizabeth Simpa-
Zavalla for their insight and hospitality, Cecelia and Lynette for providing
me with a
wealth of information on Olongapo. I would also like to thank the City officials: Oscar
Augustine, Anselmo Santos, Dennis Martinez,
Dante Ramos and Attorney Bargado for
devoting their time and making available the data and information for
the study. I am
grateful to a number of people in the City Council, the central agencies,
and the CDS
consultants