Role of LGUs in the Delivery of
Quality Basic Education
Department of the Interior and Local Government
Outline of Presentation
 Role of LGUs on Basic Education
 Special Education Fund
 Legal Basis for Utilization
 Current Practice on Allocation of SEF
 Local Special Bodies
 Functions and Composition
 Challenges and Recommendations
 Reform SEF and LSBs to support education
 Increase SEF collection via updating SMV
Context: why good education matters
Educational attainment of HH head and poverty
incidence, 2006
Poverty
incidence
No education
Some elementary
Elementary graduate
Some high school
High school graduate
Some college
College graduate
ALL HHs
53.9
43.3
35.3
29.5
17.2
8.1
1.6
26.9
Contribution
to total # of
poor HHs
5.7
36.3
25.4
13.9
14.4
3.7
0.6
100.0
• Educational attainment of household head is important determinant of poverty status of
HH.
• Poverty incidence is found to be higher among households with household head with
lower educational attainment.
Role of LGUs in Basic Education
 Basic public education – still largely responsibility of central
government, delivered through DepEd
 With devolution policy, providing for basic education is shared
with LGUs.
 Basic services and facilities assigned to LGUs include school buildings
and other facilities for public elementary and secondary schools (LGC,
Sec. 17)
 LGUs provide supplementary finance for public basic education thru SEF
which are the proceeds of 1% additional tax on real property (LGC,
Sec. 235)
LGUs have the means to contribute to the improvement of basic education
outcomes through more efficient and effective use of the Special
Education Fund (SEF).
Special Education Fund
(SEF)
Special Education Fund (SEF)
OVERVIEW/LEGAL FRAMEWORK
(LGC Section 235 and Sec 272)
 SEF are proceeds from the additional one (1%) on the assessed
value of real property tax which shall be in addition to the basic
real property tax impost by provinces or cities, or a municipality
within Metropolitan Manila Area (MMA).
 SEF shall be automatically released to the local school boards:
Provided, that, in case of provinces, the proceeds shall be
divided equally between the provincial and municipal school
board.
 SEF income has been growing through the years, with increasing
RPT assessments and a more aggressive tax collection by LGU.
Utilization of SEF
 LGC (LGC Secs 100 and 272) prioritized SEF for
(1) construction, repair & maintenance of school buildings and facilities;
(2) extension classes;
(3) educational research;
(4) books and periodicals; and
(5) sports development activities from barangay to national levels.
 Joint circulars of DepEd, DBM and DILG expanded list to include salaries of
teachers and non-teaching personnel; IT resources; citizen development and other
co-curricular activities.
SEF: reliable source of funding for basic education
Table 7. SEF Income and Expenditures, 2001-2007 (in million pesos)
2001
2002
2003
2004
2005
2006
2007
SEF Income
Province
Cities
Municipalities
8,451
1,440
5,516
1,495
9,537
1,658
5,875
2,005
11,002
1,707
7,104
2,191
10,693
1,702
6,824
2,167
12,352
2,038
7,887
2,427
13,167
2,100
8,691
2,376
14,153
2,287
9,620
2,246
SEF Expenditures
Province
Cities
Municipalities
7,774
1,456
4,953
1,365
7,395
1,377
4,411
1,607
8,826
1,510
5,397
1,920
8,854
1,554
5,384
1,916
10,265
2,010
6,155
2,100
12,249
1,646
8,424
2,179
12,063
1,669
8,511
1,883
11,022
1,990
7,016
2,016
7,838
1,515
4,744
1,580
10,068
2,062
5,807
2,198
10,311
1,956
6,219
2,136
11,067
2,047
6,679
2,340
13,226
2,180
8,722
2,324
13,816
2,175
9,182
2,459
100,393
105,923
108,074
107,941
109,182
122,718
145,860
Total LGU Educ Expd
Province
Cities
Municipalities
DepEd Expd incl. SBP
SEF expd as % of
Gen Gov educ expd
7.0
6.5
7.5
7.5
8.5
9.0
7.6
SEF expd as % of
total DepEd expd
7.7
7.0
8.2
8.2
9.4
10.0
8.3
SEF expd as % of
DepEd non-PS expd
61.0
86.4
83.9
73.9
85.5
80.6
41.0
SEF expd as % of
DepEd MOOE
85.7
135.0
142.3
120.1
121.7
139.7
70.7
Source: Study of Manasan and Castel, 2010)
 SEF income grew from PhP 8.5 B in 2001 to PhP 14.2 B in 2007
SEF expenditure increased from PhP 7.8 B in 2001 to PhP 12.1 B in 2007
Equal to 7%-10% of total DepEd spending
Equal to 6%-9% of total General Spending on Education
Total LGU Expenditure on Education is P11B in 2011 to P 14B in 2007
Wide disparity in SEF resources across LGUs of
different income classes
Just as wide disparities in local income, there are substantial disparities in per pupil SEF
spending across different income classes. To wit , per student spending of NCR cities is
almost 3 times as 5th income class cities.
This occurs primarily because the more urbanized LGUs tend to have larger RPT base as
a result of the higher property values in these LGUs compared to less urbanized LGUs.
Median SEF spending per pupil in municipalities and cities
CY 2006
Municipal
Income Class
Median SEF of
Cties
City
Income Class
Median SEF
1st
143
NCR cities
1938
2nd
87
1st (non-NCR)
669
3rd
68
2nd-3rd
453
4th
59
4th
371
5th
45
5th
249
Source: Study of Manasan and Castel, 2010)
SEF Expenditure
 In the aggregate, SEF expenditures per student in 2007 is significantly higher that
the DedEp allocation for school level MOOE. In particular, if one assumes that
all SEF are expenditures are spent on school level MOOE and if SEF are
distributed across LGUs in direct proportion to enrollment, their per student ratio
would be P 692 which is 3.4 x the DepEd allocation for school level MOOE.
SEF Expenditure per student vs. DepEd School-level MOOE per student
SY 2007-2008
DepEd School Level MOOE per
Student
Aggregate SEF expenditure per
Student
Elementary level
Secondary level
regular curriculum
tech-voc-curriculum
Aggregate SEF expenditure per
student
P 692
- P 207
- P 500
- P 700
Source: Study of Manasan and Castel, 2010)
Current Practice on Allocation of SEF
In the aggregate,
• almost half of the SEF is spent on MOOE
• 27-29% for PS and
• 23-30% to CO.
Budget Share of PS, MOOE, and CO in SEF expenditures,
CY 2006-2008
CY Year
PS
MOOE
CO
2006
26.6
43.3
29.6
2007
29.1
48.4
22.5
2008
28.7
48.8
22.5
Source: Study of Manasan and Castel, 2010)
2010 study on how to improve the SEF
(Manasan, Castel)
FINDINGS
1. Excessive emphasis on hiring locally funded teachers vis-à-vis low priority for
school building construction
2. Unclear interpretation of LGC as to the “operation and maintenance of schools”
3. Mismatch between actual school-level needs and LGU spending priorities for
SEF
4. Need to clarify “sports activities” in light of transfer of DEpEd functions related
to sports competition to the Philippine Sports Commission under RA 9155
Local School Boards
(LSBs)
Local School Boards
(one of the Local Special Bodies)
 Local Special Bodies
 Councils, committees or the like created to perform definite functions on the
LGUs. There are five of such bodies, namely,
 Local Development Councils (LDC)
 Local Prequalification, bids, and awards committees (LPBAC)
 Local School Boards (LSB)
 Local Health Boards (LHB)
 Local Peace and Order Council (LPOC)
 There shall be established in every province, city, or municipality a
provincial, city, or municipal school board
 The LSB is the body primarily responsible for the allocating the share of
the LGU in the Special Education Fund (SEF).
Functions of the Local Special Bodies
Local Development
Council
• Assist the Sanggunian in setting the direction of economic
and social development and coordinate development
efforts
Local Health Boards
• Advisory to the Sanggunian on health matters
• Propose budgetary allocation for health facilities and
services
Local School Boards
• Advisory to the Sanggunian on education matters
• Responsible for allocating the share of LGUs in the SEF
Local Peace and
Order Council
Local Prequalification,
Bids and Awards
Committee
• Responsible for proposing programs for peace, order and
public safety in localities
• Responsible for prequalification of contractors, bidding,
evaluation of bods and recommendation of awards of
projects
Activities and Budget of LSBs
(LGC Sec. 100)
 Meet at least once a month or as often as may be necessary.
 Local chief executive concerned, as a matter of protocol, shall be given
preference to preside the over the meeting.
 Division superintendent, city superintendent or district supervisor, as the case
may be, shall prepare the budget of the school board concerned. Such budget
shall be supported by programs, projects, and activities of the school board for
the ensuing fiscal year.
 The affirmative vote of the majority of all the members shall be necessary to
approve the budget.
Challenges and
Recommendations
Challenges
 Need for greater alignment of the SEF with the programs and priorities of
national government. Information on the allocation from the national
budget have to be communicated to LGUs to ensure the SEF is used to
advance programs for basic education.
 Need for clearer statements as to allowable expenditures chargeable to SEF
expenditures under SEF particularly expenditures are included under
“expenditures for operation and maintenance of public schools” as per Sec.
272 of LGC
 Need for clearer assignment of expenditure responsibility – DepEd vs.
provincial LSB vs. municipal/ city LSB
 Need to strengthen link between LSB/ SEF utilization and implementation of
Kto12
 Information sharing between DepEd (not just at Division and District Office
level but also Central Office level) and LSBs
 Need for better coordination between provincial LSBs and municipal LSBs
 How does LSB relate to School Governance Council?
Proposed Recommendations
Improve SEF utilization guidelines prescribed in LGC
Avoid expenditure overlaps by clarifying well who should spend for
what--DepEd or LGUs e.g. textbooks
Increase equity in education spending by providing more to LGUs
with low real property tax base
Proposed Recommendations
Improve revenue collection for SEF. SEF grows when RPT collections
improve
•
The efficiency of LGUs in collecting real property taxes improved significantly
between 2007 and 2012.
RPT collection efficiency (collections as a proportion of collectible amount), 2006-2012
Provinces (w/ munis)
Cities
All LGUs
2006
68.6
89.9
82.2
2007
52.8
95.1
73.1
2008
58.9
78.3
71.5
2009
68.9
70.5
70.2
2010
64.8
82.4
76.4
2011
74.3
79.2
77.6
2012
77.9
85.9
83.3
Challenges
PROBLEM: real property values are not being updated
Age of real property
values
over 10 years
6 - 10 years
5 years or less
TOTAL
Provinces
Cities
Number
%
Number
%
19
23.8
58
40.3
28
35.0
46
31.9
33
41.3
40
27.8
80
100.0
144
100.0
Outdated Valuation
Political Difficulty
Many LGUs have NOT regularly updated
their schedule of market values—the basis
for computing the RPT—resulting in lowerthan-expected collections.
Sanggunian members, who must approve the new
market values, are reluctant to enact the relevant
ordinance due to its political backlash.
Proposed Recommendations
 Transfer the mandate to approve the schedule of
market values (SMV) for real property from the
Sanggunian to the Department of Finance
 LGUs to retain autonomy in setting assessment levels
and tax rates for real property
Thank you