Many developing countries have devolvedthe responsibility for education services to localgovernments in an effort to improve educational quality andmake public spending more efficient. Advocates ofdecentralization have argued that bringing decision-makingcloser to schools makes public policy more responsive tolocal needs, strengthens accountability, and fostersinnovation. In some countries, decentralization has gonefurther in that schools have been given responsibility fordeveloping their own improvement plans and a degree ofautonomy over the use of their resources. The purpose ofthis policy note is to assess the financing of basiceducation services by local governments in the Philippines.Using data that the PETS-QSDS team has carefully collectedfrom a nationally representative sample of elementary andhigh schools, it explores the magnitude of the funding thatlocal governments are giving to schools and assesses thesystems that govern the use of local government funds in theeducation sector. The policy note shows that localgovernments’ contribution to overall public educationfunding is small and highly inequitable. It also shows thatthe systems used to allocate and manage these funds are weakand that greater transparency and accountability over theseresources is urgently needed.
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