Attachment A - Draft Statement of Work.pdf

ATTACHMENT A

CITIES FOR ENHANCED GOVERNANCE AND ENGAGEMENT (CHANGE)

(Draft Statement of Work)

I. PURPOSE AND SCOPE

The Cities for Enhanced Governance and Engagement (CHANGE) activity of USAID/Philippines is a flexible and adaptive two-phased implementing mechanism that will support the priority thrust of the Government of the Philippines to support people-centered, clean and efficient governance as articulated in the 2017-2022 Philippine Development Plan1; and Intermediate Result 1.2 Public Transparency and Accountability Improved and Intermediate Results 1.4 More Responsive Local Governance of Development Objective 1: Democratic Governance Strengthened of the Mission’s Country Development Cooperation Strategy2. This activity is also consistent with and contributes to the United States Government’s Indo-Pacific Vision3. Good governance is a core pillar of the U.S. vision for a free and open Indo-Pacific, including a commitment to work with Indo-Pacific nations to promote sound, just, and responsive governance. More transparent, accountable and responsive local governance will be achieved by 1) strengthening the enabling environment for decentralization; 2) Enhancing service delivery capacity, legitimacy, transparency and accountability of participating local governments; and 3) empowering citizens by increasing their participation in and oversight of local governance processes.

CHANGE is based on the premise that collective actions and stronger partnerships between local governments and the communities that make up their constituencies will bring democratic governance closer to the people. Localities where the people have opportunities to participate in governance, to express grievances peacefully, to congregate freely and demand accountability from their government, empower citizens and produce leaders who govern in accordance with the people’s interests. Along with other interventions and adequate resources, the promotion of participatory local governance will help nurture more responsive, transparent, accountable local governments that are able to deliver basic services to the people and will build resilience to foreign influence that threatens the nation’s sovereignty.

This five-year activity is anticipated to begin in September 2020 and has a total estimated amount of $15 million. It will be implemented in two phases. Phase 1 (2020-2022) will be implemented in the eight (8) cities currently covered by USAID’s Strengthening Urban Resilience for Growth with Equity (SURGE) and complement current activities to promote the development of conditions for broad-based, inclusive and resilient economic growth. The eight

(8) cities are: Batangas, Legaspi, Puerto Princesa, Iloilo, Tagbilaran, Cagayan de Oro, Zamboanga and General Santos. Phase 2 (2022-25) will expand to additional cities that USAID will identify in conjunction with current efforts to develop a successor to its Cities Development Initiative and other programmatic considerations.

1 http://pdp.neda.gov.ph/wp-content/uploads/2017/01/PDP-2017-2022-07-20-2017.pdf 2 https://www.usaid.gov/philippines/cdcs 3 https://www.state.gov/wp-content/uploads/2019/11/Free-and-Open-Indo-Pacific-4Nov2019.pdf

II. BACKGROUND

Consistent with the constitutional mandate to provide autonomy to local governments and empower the citizenry (see Articles II, X and XIII of the 1987 Philippine Constitution), the passage of Republic Act 7160, frequently referred to as the Local Government Code (LGC) of 1991, aimed to: 1) hasten the process of development by creating the enabling conditions for economic activity, enhancing resource management, reducing wastage, and improving the delivery of basic services to the people; and 2) broadened democratic space in the Philippines by strengthening the avenues for the practice of direct and representative democracy at local levels.

It provided the operational framework for the decentralization of fiscal, administrative and political authority to sub-national units and the institutionalization of citizen participation in local governance.

In lieu of centralized decision-making in Manila, the LGC delegated authorities, functions, resources, and regulatory responsibilities in important areas to local government units (LGUs).

LGUs were made responsible for land use planning and local service and enterprises; and managing the delivery of health, agricultural extension, social welfare, local public works, and environmental services. LGUs also assumed an important role in promoting economic development and maintaining peace and order in their jurisdictions. The underlying assumption is that LGUs are best able to determine and respond to local needs.

When the law was passed, more than 70,000 personnel working for national line agencies of the government of the Philippines were transferred to LGUs. In terms of fiscal autonomy, the law transferred 40 percent of internal revenue collections from the national government to LGUs, in addition to increasing the revenue-generation authorities of the latter. Currently, the internal revenue allotments (IRA) is distributed to 82 provinces (23% of IRA), 145 cities (23%), 1,478 municipalities (34%) and 41,902 barangays (20%) based on a formula that considers both population and land area. A recent decision by the Supreme Court of the Philippines (Mandanas versus Ochoa, July 2018) will have the effect of significantly expanding the revenue base from which the IRA to LGUs are computed.4

A fundamental attribute of decentralization as implemented in the Philippines--and the focus of this activity--is its direct contribution to democratic governance. Outside of elections, the LGC provides the most compelling framework for engaging citizens in governance, bringing government closer to the people, and making institutions more accountable and transparent.

The law provides avenues for the participation of CSOs to represent citizen interests as well as mechanisms for direct citizen engagement. The different sections of the law that mandate public participation in local governance are5:

1. Partnerships between LGUs and civil society organizations (CSOs) to promote local autonomy and development (Sections 34-36 of the LGC);

2. Representation of CSOs in local special bodies:

- Local Development Councils (Sections 106-115)

4 http://www.chanrobles.com/cralaw/2018julydecisions.php?id=530 5 Click on the link for the full text of the Local Government Code of 1991, http://extwprlegs1.fao.org/docs/pdf/phi93246.pdf

- Local School Boards (Sections 98-101)

- Local Health Boards (Sections 102-105)

- Local Peace and Order Councils (Section 116)

- Prequalification Bids and Awards Committees (Section 37)

3. Sectoral representation including of women in local legislatures (Sections 446, 457, 467)

4. Youth representation (Sections 423-438)

5. Recall of elected officials (Sections 69-75)

6. Village assemblies to review performance and finances (Sections 397-398)

7. Citizen initiatives to propose, enact or amend ordinances (Sections 120-127)

8. Requirement for national agencies to conduct consultations prior to implementing projects (Sections 2c and 26-27)

By bringing government closer to citizens, decentralization allows people to participate more effectively in local affairs, including identification of community priorities. Local leaders can be held increasingly accountable for decisions that affect citizens lives thus reinforcing the people’s faith in the legitimacy of the political system.

III. STATEMENT OF THE PROBLEM

Decentralization can have unintended consequences. In spite of its tremendous potential to bring government closer to the people and in doing so increase participation, accountability, responsiveness, and local development; weak implementation frequently characterized by the inadequate devolution of political, fiscal and administrative authorities, and capacity deficits of both local authorities and citizens to take full advantage of the opportunities presented by decentralization, can lead to very different and disappointing outcomes. These include the perpetuation of local elites, deterioration of basic services, lack of scale and cohesion in the implementation of projects that cut across sub-national boundaries, and entrenchment of corruption.

After more than 28 years since it came into effect, significant advances have been made in realizing the goals of decentralization but the quality, depth and breadth of these achievements are uneven. Poor local governance can still be found in some parts of the country. Counter-resistance to democratic reforms by political elites continue and a latent pushback towards recentralization exists.

The LGC has at best only undergone sporadic review even if Section 521 of the law states that the Congress shall “undertake a mandatory review of this Code at least once every five years and as often as it may deem necessary, with the primary objective of providing a more responsive and accountable local government structure.” One exception was the 2014 assessment of the LGC led by the Department of Interior and Local Government (DILG) with the support of the Asian Development Bank which focused on fiscal decentralization and proposing amendments to address gaps6. The assessment, which involved extensive consultations with local government officials, private sector and legislators, identified many issues including: 1) overlapping and, at times, unclear assignment of functions across various levels of government; 2) unfunded mandates; 3) insufficient IRA; 4) LGU “subsidies” to national government agencies; 5)

6 http://calabarzon.dilg.gov.ph/reports-resources/328-review-of-the-1991-local-government-code inadequate and/or ineffective revenue generation capacity; 6) The inability of the IRA formula to promote “fiscal equalization in the sense of providing more resources to LGUs with lower revenue capacity relative to their needs and less to LGUs with greater revenue capacity; 7) Increasing fragmentation of sub-national political units; 8) need to ensure transparency in LGU operations for greater transparency; and 9) need to promote public financial management.

Although there are outstanding cases of good governance in a number of localities, there is unfortunately a paucity of comprehensive assessments focusing on the extent to which the implementation of decentralization has promoted democratic governance in the Philippines. In an analysis of binding constraints to intergovernmental fiscal arrangements, however, the World Bank Approach Paper on Decentralization Reforms (August 2010)7, identified the weak political and institutional environment for LGU accountability as a major concern. The paper contended that although the LGC instituted mechanisms to institutionalize citizen participation in the LGU planning and budgeting processes, primarily through special bodies such as the local development council and the local health and school boards, the functionality of these special bodies varied significantly across LGUs and the voice of non-government stakeholders in local governance is generally very weak. It added that no systematic information on LGU performance is available to allow voters to assess their local governments’ performance and use elections to reward good performers and punish laggards. The paper concluded that the weak systems for LGU accountability result in weak demand-side pressure for LGUs to function more efficiently as public service providers and as engines of economic growth.

The 2019 paper Pitfalls of Aiming to Empower the Bottom from the Top: The Case of Philippine Participatory Budgeting8 written by Joy Aceron of G-Watch for the Accountability Research Center pointed out that the stark reality in Philippine democratization and reform is the presence of interests that endeavor to stop pro-people and pro-accountability reforms. To better understand reform dynamics in the country, it is important to note that democratic measures, such as decentralization and civil society participation, face constant counter-resistance at all levels of government from political elites that are against reforms and the deepening of democracy. The Aceron paper contended, based on consultations with the Bottom Up Budgeting project management office of the DILG, that almost three decades after the LGC was passed, the minimum legal requirements for civil society representation remain unobserved in many local governments. Some of the mandated participatory bodies, including some LDCs, remain nonfunctional. She attributed this phenomenon to four factors: 1) the lack of sanctions for non-compliance with participation requirements; 2) intervention by local chief executives; 3) LGUs creating their own non-government organizations; and challenges in LGU accreditation.

Th results of the papers and assessments above converges with USAID’s experience in supporting good local governance practices in the Philippines. A rapid field appraisal of decentralization conducted in 2010 by the USAID-funded Transparent and Accountable Governance Project of The Asia Foundation9 highlighted significant advancements in the implementation of decentralization but also noted the unevenness of its application. In localities

7 http://documents.worldbank.org/curated/en/379201468295534440/Approach-Paper-on-a-World-Bank-strategy-for-supporting-decentralization-reforms 8 https://accountabilityresearch.org/publication/pitfalls-of-aiming-to-empower-the-bottom-from-the-top-the-case-of-philippine-participatory-budgeting/ 9 https://asiafoundation.org/resources/pdfs/01Synopsis.pdf where progress is slow, there appears to be a consensus about the lack of capacity on the part of both LGUs and constituents to maximize the opportunities offered by decentralization. Many elected local leaders and civil service staff did not have the institutional and administrative capacity to raise and manage revenue; consult and engage with communities; translate local preferences into prioritized programs and formulate budgets; report meaningfully and transparently; and create feedback loops. On the other hand, citizens did not necessarily know how to hold local governments accountable and demand good governance. They did not fully understand what functions different levels of government perform, what their responsibilities to government are, nor did they have any experience in using accountability mechanisms.

Finally, the playing field in both national and local arenas in the Philippines is rarely level. In addition to a supportive policy environment and the requisite capacity, political will to institute reforms and remove barriers to entry is necessary for democratization to flourish. Elite capture is a term frequently used to characterize local (and national) politics in the Philippines. Political dynasties because they enjoy name recall and access to the necessary resources, machinery and alliances have a near monopoly of major elected public positions in the country. In his article Political Dynasties in the Philippine Congress10, Dean Ronald Mendoza of the Ateneo University School of Government said that membership in a political dynasty increases an individual’s chances of being elected into office and allows the politician to constrain competition by excluding most citizens from participating in political leadership roles. To consolidate and maintain their grip on power and the benefits that come with it, it is often in the dynast’s interest to squelch initiatives that empower the citizenry.

IV. THEORY OF CHANGE

USAID’s theory of change is that local governance in the Philippines can be made more responsive if: a) the enabling environment for decentralization is strengthened; b) if the transparency, accountability and effectiveness of local governments to carry out its essential functions is enhanced; and c) if the participation of citizens, men and women, youth and adults alike, is increased.

Improved implementation of decentralization in the Philippines will help strengthen democratic governance in the country. Enabled local government institutions that are more transparent, participatory and accountable to their constituents will enhance their legitimacy and effectiveness. Citizens who have more awareness of and input into government decisions will be more empowered and have greater confidence in their government and the democratic system.

V. OBJECTIVES AND ANTICIPATED RESULTS

The goal of CHANGE is to contribute to strengthened democratic governance in the Philippines by making local governance more responsive. As stated earlier, it will be implemented in two phases:

Phase 1 (2020-2022) will be implemented in eight secondary cities of the Philippines (Batangas, Legaspi, Puerto Princesa, Iloilo, Tagbilaran, Cagayan de Oro, Zamboanga and

10 file:///C:/Users/GPorta/Downloads/DYNASTIESCONGRESSPPSR2013%20(1).pdf

General Santos) and complement the activities of USAID’s SURGE activity11. SURGE is a five-year, $47 million activity, which aims to foster the development of conditions for broad-based, inclusive and resilient economic growth for a critical mass of cities and surrounding areas outside Metro Manila, Cebu, and Davao. SURGE works with cities and adjacent areas to plan effectively, guarantee basic public services, reduce business transaction costs, promote competitiveness, support sustainable development, and reduce disaster and climate change risks while ensuring inclusive and sustainable growth.

Phase 2 (2022-25) will expand to additional cities that USAID will identify in conjunction with current efforts to develop a successor to its Cities Development Initiative and other programmatic considerations.

Implementing CHANGE will require the effective integration of LGUs and their constituents and the strengthening of the institutions of governance and management at the local level. It will require close coordination with SURGE and other USAID sectoral activities that may also be operating in the target cities.

Entry points for this activity may not be directly related to strengthening democratic governance per se but may nonetheless be a catalyst for achieving one or more of the sub-objectives below.

Policy reform work at the national and local levels, including formulation and effective implementation, are anchored on the principle of thinking and working politically. This requires a deep understanding of the political context and the application of this understanding to USAID’s work in order to maximize the results of its development investments. In addition to the excellent technical analysis done by the other sectors, the approaches inherent to the democracy, rights and governance (DRG) sector such as political economy analysis, constituency and coalition building, broad and strategic public participation, political advocacy, public financial management, and procurement reform can be applied just as appropriately to achieve health, environment and education outcomes at sub-national levels.

The effective and efficient delivery of basic services depend in large part on the capacity of local governments and the degree to which constituents can hold them accountable. Mechanisms for public participation, transparency and accountability across all USAID sectors are embedded in the Local Government Code, including the establishment of local health boards, local school boards, peace and order councils and planning and development councils. Other local mechanisms include protected area management boards and local legislative committees on gender and the youth. Supporting decentralization and good local governance, approaches central to promoting a stronger democratic system, in identified localities present tremendous potential for complementarity with other USAID activities outside of the DRG sphere.

CHANGE will seek to achieve more responsive local governance through three (3) sub-objectives, namely: 1) strengthen the enabling environment for decentralization; 2) enhance service delivery capacity, legitimacy, transparency and accountability of participating local governments; and 3) empower citizens by increasing their participation in and oversight of local governance processes.

11 https://icma.org/programs-and-projects/usaidsurge

Sub-Objective 1: Strengthen the enabling environment for decentralization

The underlying assumptions that underpin the implementation of decentralization in the Philippines is that it will hasten development by allowing sub-national government units to determine and respond to local needs; and expand democratic space by promoting citizen participation in local governance processes. Irrespective of whether the Philippines formally takes up proposals for a shift to federalism, there is a need to revisit and discuss key provisions of the LGC. Current evidence suggests that the results have been mixed with outstanding examples of successes in some cases juxtaposed with cases of inefficiencies arising from the lack of economy of scale or jurisdictional issues, non-compliance with key provisions of the law, elite capture, and corruption. While considerable analytical work has been done to look at the challenges of fiscal decentralization and the degree to which these challenges influence service delivery and development, there is a dearth of comprehensive assessments focusing on the impact of decentralization in promoting democratic governance.

CHANGE is designed to provide on-demand analytical support and strategic guidance to national and local policymakers to help ensure a stable and supportive policy framework for decentralization. This component will provide independent informed analysis of challenges and possible reforms in center-local relations and within sub-national government units that will promote both the spirit and intent of decentralization in the Philippines. One concrete example of needed analysis at this time is an in-depth assessment of the ramifications of the Supreme Court Mandanas Ruling (previously cited on page 2) which when implemented will significantly increase the IRA of LGUs but will most likely result in the passing to LGUs of more responsibilities (and financial burdens) currently being shouldered by national government agencies.

It will support the dissemination of the results of analyses and work with decentralization stakeholders, nationally or locally depending on need, to advocate reforms that will among others increase local government transparency, accountability and responsiveness, strengthen the role of citizens in local decision-making and holding government accountable. This component is also intended to serve as a launch pad to promote the replication of best practices in non-target cities through effective outreach.

The sub-activities below are enumerated for illustrative purposes only:

Provision of analytical support and technical assistance to selected executive offices and/or appropriate congressional committees to conduct reviews, stakeholder consultations, and policy formulation on decentralization by deploying short-term subject matter experts to assist with data collection, facilitating meetings and draft amendments or executive orders; supporting surveys or polling activities; and enlisting the engagement of local and international think tanks to offer recommendations;

Support for coordination and communication both within and between targeted government institutions relevant to decentralization, including congressional committees and executive offices (e.g. Department of Interior and Local Government and other departments with devolved functions);

Support for increased public awareness of, and opportunities to participate in, legislative processes or consultations related to decentralization reform; and

Provision of technical assistance to support key government entities, including the Department of Interior and Local Government (DILG), Local Government Academy, executive departments with devolved functions in developing comprehensive and coordinated strategic and change management plans if changes to the implementation of decentralization are planned. The plan could include clearly mandated roles and responsibilities for decentralization reform implementation, identified priorities, sequenced short, mid and long-term goals, realistic timeframes, and processes for public participation, in-built monitoring and evaluation mechanisms, and outreach activities to communicate success and encourage replication.

Conduct applied political economy analysis in each target city to identify entry points for the promotion of good governance practices.

Support via sub-grants to stakeholder groups (e.g. League of Cities or Union of Local Authorities of the Philippines) advocacy for good governance reforms and the replication of best practices in non-target cities

Sub-Objective 2: Enhance service delivery capacity, legitimacy, transparency and accountability of participating local governments

CHANGE is intended to complement the work of SURGE and possibly other USAID activities in the target cities by promoting and supporting practices that enhance good governance and increase the cities’ resilience to foreign influence in procurement and possibly the extraction of resources within their jurisdictions. On the supply side, it will work to support mechanisms and processes embodied in the LGC that increase transparency, accountability and citizen participation in local decision-making; address capacity gaps; reinforce the democratic processes that underpin these institutions, such as public participation through town halls, public hearings, third party oversight of local procurement, and citizen feedback mechanisms; and ensure local government openness to incorporating public inputs in decision-making and receiving citizen feedback. It will likewise address capacity gaps specific to the participating cities.

Partnerships with local governments will give them an opportunity to move from being service providers to that of bridging leaders, leaders that build trust and tap the fullest contributions of diverse stakeholders. As needed, CHANGE will work to institutionalize reforms so that they can withstand changes in administration or political leadership. USAID anticipates that CHANGE’s approach will vary from city to city depending on the result of a political economy analysis of each locality that will include information on the challenges and opportunities for promoting transparency, accountability and participation. A commitment to adopting good governance practices or reforms will be a prerequisite to the forging of partnerships with the participating cities. A competitive demand-driven process for selecting specific areas of assistance may be considered. The sub-activities below are enumerated purely for illustrative purposes only:

Support the capacity development of elected local government officials, technical staff and/or civil servants who support local government operations in the targeted areas in skills like participatory facilitation, consensus-building, coalition building, negotiation, mediation, and public outreach/communications;

Support practices that promote public sector transparency and accountability such local government initiatives to practice fiscal transparency and participatory budgeting and planning exercises at all levels;

Assist local governments to implement third-party oversight of local procurement;

Introduce and build local government buy-in for citizen feedback mechanisms such as citizen or community scorecards;

Strengthen and institutionalize mechanisms that promote public participation in governance such as the establishment or strengthening local special bodies and sectoral representation in city councils, the holding of regular public hearings, and the creation of feedback loops;

Support local government partnerships with local media organizations to bolster the upward and downward flow of information;

Support inter-council coordination (e.g. between local special bodies or local council committees);

Sponsor exchange visits to progressive localities to encourage peer learning and replication; and

Support collective actions of local governments and communities to address specific issues or improve basic service delivery through a small grants mechanism and use these activities as platforms to demonstrate and inculcate good governance practices.

Sub-Objective 3: Empower citizens by increasing their participation in and oversight of local governance processes

CHANGE will work on the demand side to increase civic engagement, and strengthen the capacity of members of the community, local CSOs, and sectoral representatives to effectively advocate reforms and take full advantage of opportunities provided by the LGC to participate in decision-making and hold their local governments accountable. Constituents can participate effectively directly or through organizations that represent them in local governance and service delivery if they have greater opportunities to influence local planning and decision-making, accountability mechanisms, mobilization and management of resources, and delivery of services through consultative and oversight mechanisms.

Outside of elections, local governance is where democracy hits the road—where the interplay of government and citizens is most tangible. USAID’s Decentralization Democratic Local Governance Handbook12 says that the ability of citizens to provide input on service priorities, standards, fees, and satisfaction gives citizens the opportunity to voice their views, hold government accountable, and take responsibility as active participants in the progress of their community. It builds a sense of empowerment and ownership that underpins democratic governance. It also provides local governments with valuable insights to inform decision-making, reduce opportunities for corruption, and builds consensus on critical community issues.

12 https://www.usaid.gov/sites/default/files/documents/2496/200saz.pdf

This sub-objective is intended to complement Sub-Objective 2 in order to maximize impact and take advantage of the natural synergies envisioned for this activity. Work for example to revitalize local special bodies could go hand-in-hand with activities to strengthen CSO understanding of local legislative and budgeting processes, and consultation and constituency building skills. The sub-activities below are enumerated purely for illustrative purposes only:

Provide capacity development support, possibly through a subgrant to credible CSO networks, to CSOs and other stakeholders in key areas to increase their capabilities for informed engagement in local governance processes;

Introduce civic education in the community to develop greater understanding of the rights, duties, and responsibilities, especially in the context of decentralization;

Introduce and build capacity to implement citizen feedback mechanisms such as citizen or community scorecards;

Promote greater understanding of local planning and budgeting processes and support citizen engagement in these activities;

Support networking, sharing of information, and coordination among CSOs and other citizen groups in the selected localities;

Support activities designed to promote or strengthen the civic participation of women, youth, and other underrepresented sectors;

Support the work of media organizations for increased and accurate reporting on local governance processes and issues of public interest; and

Support citizen-driven initiatives that address specific community issues and that are implemented in collaboration with the local governments through the use of a small grants mechanism and use these as platforms for demonstrating and cultivating good local governance practices.

VI. ILLUSTRATIVE OUTPUT AND OUTCOME INDICATORS

Illustrative Indicators under Sub-Objective 1:

1. Number of policy recommendations drafted with USG assistance to strengthen the implementation of decentralization in the Philippines;

2. Number of hearings or consultations held with USG support to inform the drafting of policies connected to the review of decentralization; and

3. Number of people reached by outreach initiatives to communicate the potential and/or successes of decentralization reforms.

4. Number of stakeholder groups provided with USG assistance to advocate reforms and/or replicate best practices.

Illustrative Indicators under Sub-Objective 2:

1. Number of sub-national units provided with technical assistance on good governance with USG support;

2. Number of local council members and staff (men and women) provided with USG-assisted training; and

3. Number of hearings or consultations held with USG support to inform decision-making at local levels.

Illustrative Indicators under Sub-Objective 3:

1. Number of CSOs and other stakeholders that received training or technical assistance with USG support;

2. Number of citizens, men and women, who participated in consultations, public hearings, town halls, and similar mechanisms intended to generate public input; and

3. Number of submissions or inputs provided by citizens to local councils or local special bodies to inform decision-making.

Consistent with the purpose of this activity and in addition to output indicators similar to those provided above, the implementer of this activity will be required to develop outcome-level indicators that can empirically demonstrate the effectiveness of the approaches described previously in strengthening democratic governance. Given the finite number of cities covered by CHANGE, the conduct of mixed-method assessments (e.g. surveys and focus group discussions) to establish a baseline and measure progress over time is feasible and should be considered as an option for demonstrating success. Examples of intended outcomes derived from the three sub-objectives above include:

Illustrative Outcome Indicators for the CHANGE activity:

1. Number of decentralization reform policies formulated with USG-assistance adopted through legislation, local ordinances, regulation, or executive order;

2. Number of governance reforms adopted as a result of USG-supported citizen feedback;

3. Dollar value of annual budgets formulated with citizen input:

4. Percentage increase in community members’ perception that their inputs were incorporated in the annual plans of the target LGUs (baseline versus project end);

5. Percentage increase in the satisfaction of constituents in the participating cities that their concerns are or have been addressed by their LGU’s activities (baseline versus project end); and

6. Number of non-target cities replicating good governance practices implemented by this activity.

VII. OTHER LOCAL GOVERNANCE INITIATIVES

Since the passage of the LGC in 1991, a variety of international donors, including USAID, have supported various aspects of good local governance. Ongoing and very recent activities of other donor partners that likely are relevant to this statement of work from the perspective of developing complementarity and avoiding duplication include the examples that follow.

The Local Governance Reform Program of the Asian Development Bank (ADB) supports inclusive and sustainable growth by increasing the capacity of local governments to provide accountable service delivery and boost local economic development. The program supports government reform priorities by a) strengthening the local governance framework; b) modernizing and professionalizing subnational public financial management; and c) improving the LGU financing and investment framework.13

The Department of Foreign Affairs and Trade (DFAT) of Australia works with the Philippine Government to implement public financial management reforms in support of practical budget and expenditure management reforms. DFAT provides human resource development assistance to support efforts to modernize and strengthen government institutions to enable more effective service delivery. Australia’s Coalitions for Change Program works to strengthen civil society capacity to engage government in constructive partnerships for policy reform.14

The European Union (EU) supports public empowerment and community engagement for good governance in order to empower civil society and communities to be engaged in local governance.15 The completed Local Government Finance and Development Project of the World Bank (WB) assisted participating LGUs to expand and upgrade their basic infrastructure, services, and facilities and in strengthening their capacities in municipal governance, investment planning, revenue generation, and project development and implementation.16

Equally important, aspects of USAID’s work in health, education, environmental management and disaster resilience require partnerships with local governments. USAID looks at the practice of good governance as both an end and as a means to an end. As mentioned previously, work that will be implemented under CHANGE is intended to complement ongoing and planned USAID activities in the health, environment and education sectors where possible and relevant. USAID strongly encourages the applicant to identify ways by which this activity will seek to assist and advance the agenda of other USAID technical sectors. For instance, interventions on public financial management and procurement reform could support the generation of additional resources for and accelerated implementation of local government priorities in education, health or social services. Support for reform coalitions that will engage with local government executives and legislative bodies could revolve around key issues like environmental management and protection. During implementation, the implementing partner will be expected to proactively reach out to other USAID implementing partners to ensure strategic and sustained coordination and collaboration, where appropriate. The website of USAID/Philippines17provides substantial information on current activities in the country.

VIII. OPERATIONAL APPROACH

This activity is designed based on the following essential operational principles:

1. Collaborating, Learning and Adapting: This activity will incorporate regular context and performance reviews to inform adaptation. Important contextual aspects include changes in the socio-political context in the participating cities. This is particularly

13 https://www.adb.org/projects/documents/phi-52173-001-rrp 14 https://dfat.gov.au/geo/philippines/development-assistance/Pages/building-stronger-institutions-for-transparent-accountable-governance-philippines.aspx 15 https://eeas.europa.eu/delegations/philippines/53297/public-empowerment-and-community-engagement-good-governance-peece-good-governance_is 16 http://documents.worldbank.org/curated/en/346301468780912355/Philippines-Local-Government-Finance-and-Development- Project 17 https://www.usaid.gov/philippines important given the highly complex dynamics of decentralization and the vested interests of various stakeholders. Plans and methods for monitoring key contextual aspects and assessing emergent program outcomes will be incorporated into the Activity Monitoring, Evaluation, and Learning Plan. Revisions to the implementation plan to mitigate risk and optimize performance will be done with the approval of the Agreement Officer Representative (AOR). Because the program will use complexity-aware monitoring and evaluation techniques (describe in more detail below) to adaptively program and inform subsequent activities, the monitoring & evaluation budget, including the ability to conduct or contract research, including surveys, should be robust.

2. Mission Consultation: Flexibility and successful learning and adaptation require regular consultation with the AOR. Key Personnel will maintain open communication channels with the Mission and the AOR.

3. Gender: While women and men live and work together in different localities of the Philippines, they do not necessarily have the same needs and opportunities to meet these needs. Due to the differences in the living conditions, responsibilities and relations between women and men they most likely experience urban life in very different ways.

Since women and girls make up approximately 50% of the population of the Philippines, local democracy, inclusiveness and sustainability can only be achieved when this share of the population has an equal say in their localities are organized and managed.

Specifically, this means that women must be involved in decision-making at all levels, so that their needs and priorities are also reflected in urban planning and design, services provision, roads and transportation, shelter, water, sanitation, solid waste management, urban environmental management, peace and security, financial management, fiscal policies, economic development and recreation as well as in politics and administration.

This also means that local governments have a major role and responsibility to enable equality and equity for all residents.

The opportunities for participation provided in the LGC together with various other pieces of legislation and executive orders such as the Magna Carta of Women and the Philippine Plan for Gender Responsive Development (1995 – 2025) have the potential to bring about transformative change. These provide platforms for women leaders to actively engage in improving women’s social and economic conditions and present an opportunity for women to move up the socio-political ladder, including running for mayor or local council seats. LGUs, including the cities covered by this activity, are mandated to integrate Gender and Development (GAD) in local planning and budgeting through specified activities, including, among others:

Developing GAD plans, which should be related to regular planning and budgeting procedures and existing plans;

Implementing GAD programs, projects and activities;

Identification of improved access conditions for women and children (i.e. health, water, education, transportation, road construction, markets, etc.);

Allocation of appropriate funds for implementation of GAD programs, projects and activities (at least 5% of the annual budget); and

Submitting annual reports evidencing compliance to the DILG.

CHANGE will examine the extent to which these and other initiatives have helped promote gender parity in the realm of public services, civic engagement, and political participation in the participating cities and integrate activities that will address gaps.

This activity will likewise ensure that women will have equal access to the interventions implemented.

4. Geographic Coverage: As previously stated, this activity will be implemented in Phase 1 in the cities of: Batangas, Legaspi, Puerto Princesa, Iloilo, Tagbilaran, Cagayan de Oro, Zamboanga and General Santos. Phase 2 (2022-25) will expand to additional cities that USAID will identify in conjunction with current efforts to develop a successor to its Cities Development Initiative and other programmatic considerations. USAID also expects that activities implemented under CHANGE will influence replication in non-target cities.

5. Partnerships with Local Organizations: Consistent with the Journey to Self-Reliance, local organizations that are conversant with the operating environment, has convening power, and are aware of socio-political considerations particular to a participating city are critical to the success and sustainability of this activity. Partnering with local organizations (e.g. through sub-grants) to implement this activity is highly encouraged.

6. Do No Harm: USAID prioritizes a “do-no-harm” approach in its work, taking precautions and using analysis to minimize unintended harm. A genuine approach to decentralization will create winners and losers based on individual, group, and societal factors, and this activity must be implemented based on continuous analysis of those factors. The implementer will work closely with USAID, as well as with local stakeholders, to avoid interventions that may create negative consequences or endanger the intended beneficiaries, host communities or implementing organizations.

7. Sustainability: USAID intends that key stakeholders adopt and replicate successful interventions. To promote sustainability, key stakeholders such as communities, local governments), national agencies, CSOs, and other entities should demonstrate buy-in.

Buy-in may include alignment of priorities, strategies, and resource sharing.

8. Experimentation and Research: Applicants are highly encouraged to build experimental and research components into their activity designs. Programmatic risks are acceptable, as long as they are data-driven and adaptive. The social entrepreneurship model of “fail fast” systems may lend inspiration to designs in which risks are taken, quickly evaluated, and then either discontinued immediately or used to inspire the next iteration of interventions. Experimentation is meant to be used as a tool to increase both flexibility and learning. USAID strongly encourages the use of complexity aware methods and is particularly interested in research regarding the policy environment and experience with decentralization to-date that informs gaps in current knowledge, as well as establishes this activity’s direct impact on improving the implementation of decentralization and good local governance practices.

IX. MONITORING AND EVALUATION

USAID/Philippines intends for the activity to be subject to rigorous monitoring and evaluation, to: a) ensure the intended results are being generated; b) inform activity management if and when course corrections may be necessary; c) ensure the interventions are targeting the right groups;

and d) capture diverse perspectives from stakeholders; and e) monitor the context. Applicants, in designing their technical approach, are especially encouraged to consider opportunities for “complexity aware monitoring,” such as Most Significant Change, Outcome Harvesting or Systems Mapping in order to among others keep activity management and USAID in general abreast of developments in the socio-political environment, particularly as it relates to the vision for democratic development and decentralization of key stakeholders.

USAID may conduct additional monitoring and evaluation through external third party contract(s). A detailed M&E design will be developed subsequent to the award and will include appropriate Standard Foreign Assistance Indicators (F indicators).

X. ADMINISTRATIVE AND LOGISTICAL SUPPORT

The implementing partner shall be responsible for all administrative support and logistics needed to fulfill the requirements of this activity. These shall include all travel arrangements, appointment scheduling, secretarial services, report preparation services, printing and other communication services. The implementing partner is expected to extend logistical support to USAID personnel as well as U.S. government visitors participating in events or meetings associated with this activity.

XI. ADAPTIVE MANAGEMENT

The implementer is expected to practice adaptive management and identify high impact but unexpected opportunities for intervention related to one or a combination of this activity’s objectives during the course of implementation. It will also be expected to provide technical assistance, upon written request from USAID, on short notice. Additional support may be required in any of the subject areas covered by this activity and may include discrete analysis of specific issues, advice upon request to parliamentary or executive bodies, specific assessments or action research, or organizational support to a significant event.