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87
The 4th
International Conference on Magsaysay Awardees:
Good Governance and Transformative Leadership in Asia, 31 May 2016
Governance Matters: Decentralization, Democratization for
Development, Mandaluyong City Philippines Experience
Hon. Benjamin C. Abalos Jr., Mayor, City Government of Mandaluyong, President of the
League of Cities of the Philippines and Union of Local Authorities of the Philippines .
Abstract
Historically, the Philippines has a centralized form of government under a democratic
system. Decentralization efforts were initiated during the Martial Law period in the
70s but these were focused on the administrative aspect of governance until the
passage of the Local Government Code in 1991. In the 25 years since the passage of
the local government code of 1991 (RA 7160), it can be argued that the local
government units have been able to adapt to their expanded devolve powers. There
are elected local chief executives who have exemplified excellence in the use of their
powers and become model leaders of the rest of the world.
Decentralization continuous to play an important role in governance, it also helps
address democracy giving the local government autonomy and building their
capability and capacity in generating local revenues and therefore contributes to
development.
Decentralization is important, as remarked by former Sen. Aquilino Q. Pimentel Jr. as
it brought the government closer to the people. With decentralized system, the local
government unit are empowered to modernized and develop their community. It
becomes really effective once accompanied by serious attempts to change the existing
structures of power, improved the opportunities for participation and engage the
disadvantage in the political process. Fundamentally, it is a process of making
governance at the local level more responsive to the needs of the large majority of the
population.
This paper will explore on the good practices of Mandaluyong City, a highly
urbanized city in the heart of Metro Manila that experiences the positive gains of
decentralization and democratization. It will look at the innovative programs and
projects intended to achieve development. The City took pride in the success of the
programs which prompted the Department of the Interior and Local Government
(DILG) to award Mandaluyong with the Seal of Good Local Governance in 2015
covering the areas of Good Financial Housekeeping; Social Protection; Disaster
Preparedness; Business - friendliness and Competitiveness; Environmental
Management; and Peace and Order. Another pride of Mandaluyong is when it
received the United Nations Award for Public Service for its innovative project for
children with special needs, aptly called Project TEACH (Therapy, Education and
Assimilation of Children with Handicap).
Keywords: Local Government Code/ Decentralization/ Democratization/ Development/ Devolution/ Philippines
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Introduction
For more than two decades, decentralization has been the dominant trend in
central-local relations in Asia. The starting point was the 1991 Local Government
Code in the Philippines that followed “people power” democratization. This
legislation introduced significant political decentralization into a country that had
undergone considerable centralization under the authoritarian regime. Functions were
transferred to provincial, city and municipal administrations. The Philippines
provided both a model and inspiration to other countries in Asia where centralization
had been the dominant themes across the continent.
Decentralization is defined by United Nations Development Program ( UNDP ) as
“ the restructuring or reorganization of authority so that there is a system of
co-responsibility between institutions of governance at the central, regional and local
levels according to the principle of subsidiarity, thus increasing the overall quality
and effectiveness of the system of governance, while increasing the authority and
capacities of sub-national at all levels”.
Decentralization and Democratization
Decentralization is a strategy used by the government towards democratizing the
political system and accelerating the attainment of sustainable development (Morda,
2006) for the reason that it will promote or allow fuller participation of the citizens in
government affairs and will give the local governments and communities a more
active role in the economic, social and political development (De Guzman, 1993).
Government further assures that through decentralization “development would be
more responsive to the needs of the people and would create opportunities in the
regions, promote employment and economic activities and economic activities and
strengthen people’s participation in the affairs of the government (Ibid.)..Different
forms of decentralization can be distinguished primarily in terms of the extent of
authority transferred and the amount of autonomy. Decentralization may take the form
of devolution and deconcentration.
Deconcentration involves the “redistribution of administrative responsibilities only
with the central government (Morada, 2006). It is not a transfer of power from the
central government but merely to “delegate such powers and responsibilities to the
hierarchical levels, primarily to facilitate the administration of national programs and
services, and this approach is otherwise referred to as administrative decentralization
(De Guzman, 1993). Administrative decentralization can take effect without the
necessity of legislation but with the issuance of an executive administrative order
although the local units now have responsibilities bestowed to them, they are still
supervised and controlled the central government, therefore, all transactions cannot be
done unless approved by the central government.
Devolution on the other hand, “seek to create or strengthen independent levels or units of
government through giving them certain functions or create units of government that are
outside its control” (De Guzman, 1993). It is also called as “political decentralization and
involves the transfer of power, responsibility and resources for the performance of certain
functions from the national to the local government” (Ibid.)
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The 4th
International Conference on Magsaysay Awardees:
Good Governance and Transformative Leadership in Asia, 31 May 2016
Local Government Code
In 1991, a Local Government Code was enacted in the Philippines. It was by far the
most radical and far-reaching policy that addressed the decades-old problem of an
overcentralized politico-administrative system, where the most significant political
and administrative decisions were made in Manila. The promulgation of the Code was
in accordance to a provision in the 1987 Constitution that declares that “the state shall
ensure the autonomy of local governments.”
The enactment of the Code was welcomed by most sectors of society. It finally
transferred to the local government units the responsibility for the delivery of basic
services, including appropriate personnel, assets, equipment, programs and projects.
The following are the major features of the Code:
(a) It devolves to local governments units the responsibility for the delivery of
various aspects of basic services that earlier were the responsibility of the
national government. These basic services include the following: health; social
services; environment; telecommunications services and housing projects.
(b) The Code also provides the legal and institutional infrastructure for expanded
participation of civil society in local governance. More specifically, it allocates to
non-governmental organizations (NGO) and people’s organizations (POs) specific
seats in local special bodies. These special bodies include the local development
council, the local health board, and the local school board. Because of their ability
to organize and mobilize the people, one door-wide open for NGO and PO
participation in governance are in the areas of promoting local accountability and
answerability, specifically through the recall and people’s initiative provisions.
(c) The Code increases the financial resources available to local government units by
broadening their taxing powers; providing them with a specific share from the
national wealth exploited in their area (e.g. Mining, fishery and forestry charges)
and increasing their share from the national taxes, internal revenue allotment (IRA)
from previously low at 11% to as much as 40%. The Code also increases the elbow
room of local governments to generate revenues from local fees and charges.
(d) Finally, the Code lays the foundation for the development and evolution of more
entrepreneurial oriented local governments. For instance, it provides the
foundations for local governments to enter in build-operate-transfer (BOT)
arrangements with the private sector, float bonds, obtain loans from local private
institutions, etc. “all within the context of encouraging them to be “more
business-like” and competitive in their operations in contradistinction to
“traditional”government norms and operations.
(Source: Local Government in the Philippines: Book of Readings)
Local Government System in the Philippines
Local government may be defined as a political subdivision of the state endowed with
authority to manage local affairs and vested with a political power to tax. The
Philippines is a unitary state consisting of 81 provinces, 1,489 municipalities, 145
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Good Governance and Transformative Leadership in Asia, 31 May 2016
cities and 42,036 villages (barangays) as political subdivisions. The first tier in the
local government hierarchy or at the subnational level is the province; at the next
lower level are the municipality and the city, and the lowest tier is represented by the
barangay or village which directly interacts with the grassroots- people in the
community. A province, city or municipal government is structured somewhat like the
national government in that: it has a local legislative branch, the Local Council,
whose members are directly elected by the electorate in the province, city, or
municipality, as the case may be, and which is responsible for the above-stated
passage of ordinances and resolutions; and, it has the local executive, represented by
the provincial governor, city of municipal mayor, as the case may be, who also
directly elected by the voting population of the locality and who is responsible for
executing local legislation and administering public services at the local level. The
barangay or village is the smallest local government unit and is headed by the village
chief who is elected with the village councilors. The Village chief enforces all laws
and ordinances applicable to his or her constituencies. Village are also public
corporations and therefore can be sue and be sued in court, enter into contracts,
acquire and hold all kinds of property, and exercise such power or perform such acts
as provided by law.
Sources of Income and Revenue
Local governments have common sources of revenue and income as well as
respective revenue raising powers. They are empowered to derive income and revenue
from: local taxation; rentals and charges for the use of public property and resources
within local jurisdictions; earnings from local public enterprises and utilities; permits
and licenses issued for establishments and operation within local boundaries; charges
and fees for local government services and activities. They are also entitled to:
stipulated shares from internal revenue collections or collections of national taxes and
shares from the proceeds of the utilization, exploitation, and development of the
national wealth (natural resources, mines, and mineral within their jurisdictional
areas.
Structure of Local Governments in the Philippines
National
Govern
ment
Municipalities Component
Cities
Villages Villages Villages
Provinces Highly Urbanized Cities and
Independent Component
Cities
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Good Governance and Transformative Leadership in Asia, 31 May 2016
Figure 1 Map of ASEAN Countries
Source: http://i395.photobucket.com/albums/pp40/ssa_admin/FASA/south_east_asia_maprevised.jpg
Figure 2 Map of National Capital Region
source: Google Maps
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The 4th
International Conference on Magsaysay Awardees:
Good Governance and Transformative Leadership in Asia, 31 May 2016
Local Governance in Mandaluyong City: An Overview
Historical Account and the Present Political Context
There are different stories on the origin of the ancient name “Mandaluyong”. One
claimed that the Spaniards named the placed Mandaluyong based on the report of
what a navigator named Acapulo saw that the rolling hills were frequently lashed at
by daluyong (“big waves from the sea”). This seems to give credence to traditional
stories before the coming of the Spaniards that giant waves from the sea lashed at the
adjoining hills of the vast lowland, referred to as “Salpukan ng Alon”. Father Felix
dela Huerta, observed that the rolling topography of this land resembled giant waves
of the sea. Hence, natives replying to the questio of strangers as to what the place was
called, used to answer Mandaluyong, later hispanized by Spansih writers into
Mandaluyong by affixing the “n” to the first syllable.
In the 1800, Mandaluyong was first known as a barrio of Sta. Ana de Sapa which was
part of te District of Paco, Province of Tondo. Named San Felipe Neri by the
Spaniards in honor of the Patron Saint of Rome, it was separated civility from Santa
Ana de Sapa in 1841.
During the American regime in 1900’s San Felipe Neri was raised to a first class
municipality with five (5) barrios, namely, Poblacion, Barangka, Hagdang Bato,
Namayan and Hulo. Under Presidential Act No. 942, it was consolidated with the
municipality of San Juan del Monte and became the seat of government. For several
months in 1904, San Felipe Neri became the capital of the province of Rizal. San
Felipe Neri was separated from San Juan and became an independent municipality on
March 27, 1907. It was renamed the Municipality of Mandaluyong by virtue of House
Bill No.3836 which was authored and sponsored by Assemblyman Pedro Magsalin,
then the Representatives of the District of Rizal.
During World War II, Mandaluyong lost many of her people, among them were
Catholic priests and civilians. Destruction was felt all over, but with the timely arrival
of the American Liberation Forces on February 9. 1945, the municipality was saved
from further damages. That day became a red calendar day for Mandaluyong marking
its liberation from Japanese imperial forces by the Americans.
In the 60’s, Mandaluyong became a component municipality of Metropolitan Manila.
Together with other component cities and municipalities, it has undergone significant
physical and economic transformation. From a forestal town to a progressive
municipality. Mandaluyong is now a highly urbanized city known to host most of the
country’s best companies and corporations, shopping malls and hotels which are
certainly world class in status.
Mandaluyong and the municipality of San Juan used to be represented in Congress by
a single Congressman. As it entered a cityhood in 1994, Mandalyong became a lone
district with its own Representatives in Congress.
Mandaluyong have come a long way from being a forested rolling hill to a bustling
city of vibrant economic activities. In 2003, Mandaluyong was named the new tiger
city of Metro Manila, among other accomplishments.
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Profile
Mandaluyong is a city that lies at the heart of Metropolitan Manila in the Republic of
the Philippines. Mandaluyong’s remarkable rate of development since the early 80’s
established the city as one of the most progressive economic centers in the country.
Notable institutions and establishments in the city include the main headquarters of
Asian Development Bank, Super Mall (SM) Megamall, Shangrila Plaza, San Miguel
Corporation. Mandaluyong has a projected population of 339,769 at nighttime and 1.4
million at daytime. It has a land area of 1,127 hectares.
Decentralization and Economic Growth
The implementation of the Standard Business Registration Procedure (SBRP) in
Mandaluyong had immensely contributed to the steady increase in the yearly
collection performance from the business sector. What used to take 3 days and 27
steps to register a business has been streamlined to only 15 minutes and 4 main steps
thereby encouraging more entrepreneurs and business owners to put up and open new
businesses in the city. Not only that this resulted in the dramatic increase in the
collection of tax payments for the month of January but also in the increase of
businesses in the city.
The conducive business atmosphere in the City with its perfect location and fast
Business Processing System has attracted giant corporations in the country to transfer
their head offices to the City of Mandaluyong, the likes of notable giant corporations
SM Group, San Miguel, United Laboratories, Asian Development Bank, Banco de
Oro, among others.
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International Conference on Magsaysay Awardees:
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Remarkable Business Tax Collection for January alone
The flourishing business climate in the city is very steadily evident that even for
January alone of the year 2016, payments for business taxes have reached the 900
million mark (P913,578,789.92) for the first time with an increase of 25% or 182
million compared to January of last year. The figure has more than doubled since
2007 with P285,197,223.31 collection or 221% increase from January 2007 to January
2016.
With all these developments, the city’s income from the Business Sector alone had
shown constant increase through the years. Income from business operations reached
more than 1.66 billion at the close of 2015, registering an increase of more than 206
million or 14.19% from last year’s 1.46 billion.
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There is also a noted steady increase in city revenues collection. In 2014, city
revenues totaled 2.91 billion (P2,914,993,522.95) and increased to 3.53 billion
(P3,534,679,016.79) at the close of 2015. This is an increase of more than 619 million
or 21.25% from collections in taxes, permits and licenses fee, service and other
general income.
Business Awards and Citations
Local Government Luminary 2015 in recognition of being a Partner for Progress
that promotes sustainable developments awarded by Meralco on March 8, 2016
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International Conference on Magsaysay Awardees:
Good Governance and Transformative Leadership in Asia, 31 May 2016
One of Top 5 Performing Local Government Units in the NCR awarded by the
Department of the Interior and Local Government on October 2013
Most Business Friendly City in the Philippines--because of the untiring pursuit of
excellence, Mandaluyong City was named and awarded as the Philippines’ Most
Business Friendly City for 2013 (Highly Urbanized City Category), awarded by
the Philippine Chamber of Commerce and Industry (PCCI), a respectable group
of businessmen in the country
Ranked 2nd
Best City in Metro Manila based on the City’s Performance on
Locally Generated income published in The Philippine Star on April 6, 2013 by
the Bureau of Local Government Finance- Department of Finance. Mandaluyong
City was recognized because of its ability and competence in Creating Own
Revenues.
Top 3 Performing Cities Based on Locally Generated Revenues - 2015 List of
Cities with Locally-sourced Revenues published in the Philippine Daily Inquirer
dated January 13, 2016 by the Department of Finance-Bureau of Local
Government Finance
Top 13 Competitiveness Index 2014 (Cities Ranking) cited by the National
Competitive Council
Decentralization and Health
The City Government of Mandaluyong ensures that all children are well-taken cared of as
early as from the time the mother gets pregnant. Literally and figuratively speaking, the
mother and the babies inside her womb enjoy intensified health and nutrition programs.
Programs such as Breastfeeding patrol, Mothers’ class, Task Force Young Mothers,
Empowerment and Reaffirmation of Parental Abilities (ERPAT) and making nutrition as a
priority program of the city.
Rapid improvements in Health and Nutrition maybe ascribed to specific, deliberate
health-nutrition related intervention and to change in the underlying social, economic, and
health environment. In the early 90’s the city had little progress until recently, and the
start of an improved trend coincided with increase in the number of health activities of the
city.
Decentralization and Environmental Protection
Although Mandaluyong City has been doing well in the business front, they believe
that sustainable development can occur if they are focused on addressing concern for
the environment. The City Government wanted Mandaluyong to be a progressive city
with clear air and healthy environment leading toward a more ecologically-sound
community of empowered Mandaleños through constituent-responsive leadership.
The City introduced the City Green Initiatives like the promotion of pro-
environmental projects like the use of electric tricycles which are zero - emission
vehicles. These e-trikes are availed through the grant from the Asian Development
Bank. This ensures a more environment- friendly surrounding, protecting the health &
general well-being of everyone, particularly the children. There is also an underpass
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solar powered LED lighting project. In the face of climate change, the City
Government has taken the lead in partnership with the International Finance
Corporation (IFC) to set the framework for future structures and skycrapers in the
City. Green Architectures will rise in that City that utilize only renewable resources.
The project will focus on performance in the following areas of energy efficiency,
water efficiency, materials and waste management, site sustainability and indoor
environmental quality. There is also the creation of Green space or park development.
Decentralization and Infrastructure
a) The City Government converted a dirty, congested public cemetery into an
environment-friendly and income generating facility. The cemetery is now known
as Garden of Life Park and it is a “one-stop-shop”, a project that entailed a 4-C
approach - i.e. cemetery, columbarium, crematorium, and chapel rolled into one.
By transforming the cemetery into a park, the LGU also dispelled the nation that a
cemetery is an eerie place. It has practically become an eco-tourism facility, with
visitors coming from Laos, PDR, Korea, Australia and many others.
b) Mandaluyong City entered to a partnership with the private sector through
Build-Operate-Transfer (BOT) mode and has now constructed a public market
that has approached world-class standards. In 1990, the public market in
Mandaluyong burned down leaving the then municipality with no center of
commerce and the prospect of reduced revenues. Then Mayor Benjamin S. Abalos
reconstructed the public market through the Build-Operate-Transfer (BOT)
scheme with the Macro Fund Builders, the concept of which was new in BOT law
at that time. This is a pioneering effort that was both exciting and challenging.
Decentralization and Social Services
a) The local government of Mandaluyong City spearheaded the conceptualization
and implementation of Project Therapy, Education and Assimilation of
Children with Handicap (TEACH). This is a community-based program that
directly benefits youth with disabilities residing in depressed areas. By providing
children with special needs they can access to a network of free medical,
rehabilitative, educational and related services. Project TEACH helps enable
them to become integrated and productive members of society. The direct
beneficiaries of this project are children with developmental conditions such as
Intellectual Deficiency, Cerebral Palsy, Autism, and Down Syndrome
b) Code of Parental Responsibility
Ordinance 538, otherwise known as the Code of Parental Responsibility was
enacted on March 2014. The ordinance underscores the duties and responsibilities
of parents/guardians to their children as well as children with disability and
provides for penalties consequent to failure to perform their parental obligations.
Issues and Concerns
In pursuit of genuine democratization, there must be a good communication between
the National and Local Governments. The difficulty lies in the poor linkages among
the different levels of government. National institutions (executive and legislative)
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still continue to dominate the allocation of financial resources in the politico-
administrative system. The IRA still constitutes a bulk of the budgets of most of the
lower class municipalities. The experience of Mandaluyong has shown that the IRA
has been unable to cover the cost of devolution. Many local governments have been
unable to cover for the salaries of national government personnel devolved to them.
This has been particularly true for the health sector where local governments have
been required to pay the upgraded salaries of devolved health workers. There is a need
to reform the financial decentralization. This includes the need to re-study the formula
for the internal revenue allotment. For instance, there have been proposals to include
the performance of local governments as a criterion in allocating their IRA.
At present, democratization policies of the government are implementers based on the
transfer of functions but not the transfer of power. The fact remains that central
government still retains huge bureaucracies that execute government policies and
programs.
The imperatives of globalization and the response of local public institutions.
Globalization here is manifested mostly in the continued growth of international trade
between and among sovereign nations. How ready are local government units to
response to the challenge of ASEAN?
The role of Information, Communication and Technology (ICT). In this age of
Technology, local government units must harness their capacities in management and
development operations, e.g., payroll, issuance of permits and licenses, taxation etc.
the challenge is a paperless bureaucracy.
The term of office of local chief executives is only three years. Once a newly elected
assumed office, the tendency is not to continue the good programs and projects of the
past administration.
Lessons Learned
(1) The transfer of power to the local level unburdened the central government and
allowed it to concentrate on national issues. The Local Chief Executives, on the
other hand, are able to immediately attend to the needs of the communities
because they do not have to wait for the go signal of the national. The set-up
encourages the local chief executives to be innovative, creative and dynamic to
respond to the needs of their constituents.
(2) Broad participation is needed for the decentralization process to be successful.
Private sector should be recognized as a critical partner in the process. In
Mandaluyong, there is an active partnership with Mandaluyong Chamber of
Commerce, Filipino-Chinese Chamber of Commerce and Mandaluyong-Muslim
Chamber of Commerce. There is also participation of civil society in local
governance. Over the years, various consultations have been conducted by the
NGO community. Decentralization can facilitate empowerment and encourage
creative local solutions.
(3) There can be no genuine local autonomy without fiscal autonomy. Fortunately, in
the experience of Mandaluyong City under a decentralized set-up there is an
adaptive financial resource to match the basic services rendered to communities.
Mandaluyong looks for alternative ways of doing things to generate revenues and
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mobilize resources at the local level. They have entered into partnership with the
business sector. One best example is Built-Operate-Transfer scheme. The first city
in the Philippines to implement this law.
(4) A key factor that will facilitate the success of decentralization is the political will
as manifested by a vision for excellent public service and leadership commitment.
(5) The experience of other local government units are replete with innovations.
ASEAN countries need to share their good practices and learn from each other
success stories. International Conferences served as a venue to learn and update
themselves with reform in public administration and governance.
(6) Improvement in the quality of life which includes citizen empowerment,
promoting public interest especially for the marginalized sector of the community,
and sensitivity to gender roles.
Conclusion
Decentralization, Democratization and Development are concepts that are related to
each other. Decentralization is seen as a process involving the transfer of power,
functions and resources from the centre to local authority in an attempt to bring the
government “closer to the people”. In the process, ordinary citizens acquired a voice
in certain decisions what affects them. Hence, this is the fundamental challenge to
democracy. In the growing decentralization and democratization, the new mantra now
is development and this reaches to the different actors of governance the state, civil
society (NGOs) and private sector.
Looking back, 25 years of decentralization and democratization had been useful in the
city of Mandaluyong. The incumbent Mayor took full advantage of the opportunities
opened up in the Local Government Code. Development is evident in the increase of
investment of the city. During the watch of the present administration, the City
transformed from a sleepy town to a progressive one now called “Tiger City.”
Factors that contributed to the success of decentralization is due to a number of
factors. One is the political will and leadership commitment to serve. Second is the
strong partnership with the civil society and private sector. Lastly, changing the
mindsets of the people and empowering them to make governance works.
Mandaluyong’s Good Practices paved the way for the local and international
recognition. The city experience brings so much pride to the people of Mandaluyong
as the chief executive is always invited to international conferences for an exchange
of experiences in developing integrated urban solutions, building economies,
engaging communities and providing high quality of life.
Fruits of Decentralization and Democratization in Mandaluyong City:
United Nations Award for Public Service 2015
Regional winner in the Most Child Friendly City 2015
Seal of Good Local Governance 2015
Guinness World Records Title Holder, Largest Zumba in one location 2015
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Galing Pook Award, Back to Back for Project TEACH and Cemetery (Garden
of Life)
Grand Slam Winner: Green Banner Award for 3 Consecutive Years
(2010-2012) for innovative Health and Nutrition Program
CROWN AWARD: Excellence in Nutrition Program Implementation 2015
Best in the Philippines: Manpower Training School and Program 2103
Given the success of its implementation, it is hope that it can sustain the different
programs and projects that will lead to development even with the changes in
administration.
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The 4th
International Conference on Magsaysay Awardees:
Good Governance and Transformative Leadership in Asia, 31 May 2016