Introduction

This paper will analyze the reasons behind the reorganization and devolution of various
Philippine government departments, namely: he Department of Housing and Urban
Development (DHUD), Department of Information and Communications Technology (DICT), and
the Department of Tourism (DOT). The Department of Agriculture and Food Engineering will be
excluded from the analysis, but will include history of agriculture in this paper . Before we can
discuss the rationale of reorganization and devolution of these departments, the proper
definition of reorganization and devolution must initially be discussed first , so as not to be
confused with more common terms, such as privatization and deregulation.
Privatization and devolution have strongly similar definitions wherein power and
ownership of a firm or institution is transferred to another entity. The main difference between
the two terms is that the former situation gives the power from a government entity to the private
sector, while the latter gives the power from central government to the local government (World
Bank, n.d.). Privatization is usually done for the firm to be more efficient and produce quality
goods and services. Devolution occurs when the central governments actions are too broad for
a specific region, hence the responsibility is given to the local government that knows the needs
of its area of jurisdiction better.
Reorganization and deregulation are fairly similar in that new entities are formed , but
starkly contrast each other with the former being the result of the addition of two previously
existing entities while the latter is when a new firm is put into position after the removal of the

previously in charge government institution. Deregulation is done to increase the markets

competitiveness.
A. Review of related literature
There are a myriad of literature pertaining to the cause and effects of reorganization and
devolution separately as well as simultaneously, albeit mostly being Western literature with little
to no context applicable to a developing nation such as the Philippines . There are welldocumented reorganization and devolution suggestion papers -- on both the private and public
sector levels -- that can be examined for a candid perspective on the matter.
However, documents regarding the historic context of the assigned departments is
severely lacking. Apart from the historical background of each department displayed on the
respective official websites as obligated by the Transparency Act , there are almost no in-depth
economical, historical, nor political academic texts of the Philippine governments departments.
A paper by Richard Chackerian (1996) from Florida State University analyzed the
causes and effects of reorganization from American State Governments data in the vast
expanse of time from 1900-1985. The methods of this work was econometric in nature , and
shied away from descriptive statistics and data that revealed superficial answers such as state
governments answering to certain public whims instead of others . The conclusion to this
statistical study reveals that reorganization was more prone to occur after long-wave economic
declines to answer for rising short-term issues, with no profound long-term effects, which may
explain why another reorganization is likely to be around the corner.

A fairly recent journal entry by one Charlie Jeffery (2006) descriptively examined
devolution and its effects on local governments in the United Kingdom. Unlike Chackerians
paper that discussed the economic causes and effects of a particular structural change ,
Jefferys work is more political in nature as it delves into the relationships and trust issues
between local governments in the United Kingdom brought up by devolution . His conclusion
reveals that clearly, different qualities of trust and relationships exist between devolved and
local governments in the United Kingdom , occasionally getting in the way of post-devolution
decision making despite the commitment of full engagement. Any sense of common general
interest and goals are nonexistent in debates on the introduction of ERAs in England.
Research by Ray Hudson (2006) tackled the question whether a regions devolution led
to regional economic success. Once again the data this study utilized is European in nature ,
specifically the north-east region of England. Hudsons method is to critically analyze the
regions historic concepts of power, governmentality, political and social construction, among a
plethora of other facts and figures before jumping to contemporary issues on devolution and
economic success. His conclusion questions the efficiency of devolution to a regions economic
growth. Followed by further questions such as who exactly is the main beneficiary in the region ,
and the extent of devolution in transferring power to the local governments.

B. Analytical framework
The study on the departments included in this paper are discussed and identified
individually in the following parts, and only examined collectively in the identification of key

issues, factors, implications of the reorganization and devolution processes undergone by the
said departments, and the summary at the conclusion of the paper . Most of the arguments in
this research were anchored on the available Philippine resources on the internet , and were
heavily influenced and based on news and information concerning the government of the
country, which may reflect the culture in the Philippines. Other specifications are as follows:
1. Reorganization and devolution were defined and explained, coupled with supporting and
existing literature on these concepts.
2. Central questions were identified and served as the foundation of the study regarding the
respective departments.
3. The government bodies were assessed with regards to their backgrounds and histories , and
their roles as government institutions.
4. The reasons and factors that allowed for the reorganization and devolution of the departments
were pinpointed and expounded on.
5. Key issues attached to the reorganization and devolution processes were determined and
related to the current situation of the Philippines, along with the implications of the said issues.

C. Research questions
By researching, we hope to answer the following questions:
1. What are the histories underlying in the fields of agriculture, housing and urban development,
information and communication technology, and tourism in the Philippines?
2. What are the DHUD, DICT, and DOT? What roles have they played as government bodies?
Why is there a proposition to reorganize and devolve these departments? How will the
reorganization and devolution of the departments be executed , and what changes will take
place?

3. What is the implication of the said reorganization and devolution of DHUD, DICT, and DOT
regarding the country?

Background and history

A. Agriculture
The agricultural sector is important to the Philippine economy; providing for the food
needs of the population and the raw material requirement of industry , creating jobs and wealth,
and generating foreign exchange (Catelo & Pabuayon , 2013). Agriculture continues to be the
principal source of the countrys income, employment, and livelihood of the rural sector (David ,
1995). As of 2013, this sector in the Philippines employs almost half of the Filipino labor force .
Furthermore, it also makes up for 33% of the total land , higher than settlements, housing, and
industrial areas (Moog, 2005). In spite of how large the total employment share of agriculture is ,
its share in the economy is roughly around 10-15% only.
Habito and Briones (2005) discussed about the trends that occurred in Philippine
agriculture, in terms of production and productivity, as well as policies, and challenges imposed
on the said sector. With regards to production and productivity, labor productivity experienced
erratic and declining growth from the 1980s to 1990s . Balisacan (as cited in Habito and Briones ,
2005) poverty incidence in agriculture reached 46 percent in 2000. Employment in the
agriculture sector was static and motionless , starting from the 90s. Land productivity, on the
other hand, focused on the production of rice , corn, sugarcane, and added coconut, banana,
pineapple, and mango later on. The modernization of the agriculture sector from 1960-1980
5

were driven by the yields of export crops such as banana , pineapple, coffee, and other fruits
and vegetables contributed to agricultural growth. Marginal productivity of the Philippines was
stable until the 1970s then experienced a drastic decline due to deceleration in total factor
production (TFP) growth -- this also caused the agriculture sector to be stagnant . In terms of
agricultural competitiveness, the Philippines was lagging compared to its neighboring countries.
The incompetencies of the sector were explained by Habito and Briones (2005) as brought
about by policy inadequacies. Changes in the policies regarding prices, as well as trade
contributed to the deficiencies of the agriculture sector in the country . Also, the authors
mentioned about lack of investments in agriculture , and flaws and weaknesses of institutions
and governance also affected the development of the sector. They emphasized on the need to
improve and modernize Philippine agriculture for it to be able to be competitive , as well as work
at its optimal level.
B. Housing and urban development
Local communities have been lobbying for housing and urban development since the era
of Aguinaldo. As small groups of common citizens, their vying for urban development merely
forms a small platform with little to no power . The foundation of a housing department would
allow these small platforms requests to be answered . However, it would not be until decades
later when historical evidence of a housing department can be found.
Socialized housing can be traced as far back as July 1938, by the order of the Philippine
Commonwealth President Manuel Quezon. By October 14, 1938, a housing department was
officially founded that went by the name the Philippine Homesite Corporation (PHC) . The

chairman appointed to the PHC board was Alejandro Roces Sr. This was the first housing
agency of its kind in the nation , before eventually becoming a subsidiary of the National
Development Company (NDC). The PHC was partnered with the NDC six years after the
foundation of the PHC. Two years after, the two agencies were merged to become the Peoples
Homesite and Housing Corporation (PHHC). Six housing related agencies were formed to
respond to the distinct shelter requirements the community needed in the years that followed .
Namely, these are:

The Presidential Assistant on Housing and Resettlement (PAHRA)

Tondo Foreshore Development Authority (TFDA)
Central Institute for Training and Relocating Urban Squatters (CITRUS)
Presidential Committee on Urban and Resettlement (PRECHUR)
Sapang Palay Development Committee (SPDC)
Inter-Agency Task Force to Undertake the Relocation of Families

By the year 1975, the housing and urban development efforts of the nation were
streamlined into the National Housing Agency (NHA) which is in operation up until present day
(Felipe, 2011). The NHA is currently one of the key housing agencies of the Housing and Urban
Development Coordinating Council (HUDCC).

C. Information and communication technologies.

Information and Communications Technology or ICT can be defined as the diverse set
of technological tools and resources used to communicate , and to create, disseminate, store,
and manage information. (Blurton 1999) ICT enables people to innovate ways to access
information by providing means to communicate, collaborate, and compute. ICT in general is
7

still yet to be understood properly as to what it is and its functions for the country . Nevertheless,
the government has done its efforts in establishing institutions for the development of ICT in the
country. According to a press release, Sen. Grace Poe stated that "The Philippines remains one
of the few countries that still do not have a separate ICT ministry . We don't have an integrated
e-governance facility that would provide the frontline services of all government agencies ."
(Poe: Use ICT, January 10, 2016) Consistent with her advocacy, Sen. Poe suggests that the
creation of a separate department solely for ICT matters can play a central role in the socioeconomic development of the country.
The Information and Communications Technology Office (ICTO) of the Department of
Science and Technology (DST) was created under the Executive Order 47 (series of 2011) . It is
the lead implementing agency of the government in all ICT- related efforts with special focus on
areas of industry development, policy, infrastructure development, research and development,
capacity building of the public sector, and the administration of the E-Government Fund.
According to an article published by the ICTO website, one of the earliest efforts was the
establishment of The Information Technology and E-Commerce Council (ITECC) in July 12,
2000, serving as the highest policy making body on ICT . (What is EGF n.d.) In April 23 2003,
the ITECC proposed the creation of the The E-Government Fund (EGF). The EGF was created
as an alternative funding source for ICT projects in the government. According to an article
published by the ICTO, the EGF has three main objectives, which include:

Institutionalization of a facility / mechanism that would provide full funding

support for mission-critical government ICT projects;

Ensure successful completion of high-impact ICT projects that would

jumpstart the development and implementation of e-Government throughout the country;

and

Facilitation of professional evaluation, selection and monitoring practices

for ICT projects that would result in more effective and/or efficient cross-agency
interfaces
Initially, the ITECC proposed that by setting aside 5% of the mandatory cuts on
maintenance and other operating expenses (MOOE) and capital outlays (CO) from the
proposed 2003 national budget. However, only 2% of the CO and MOOE of each government
agency was allocated for e-government projects which amounted to approximately four billion
pesos.
On July 20 2004, the ITECC was abolished under the Executive Order No. 334 and was
reorganized and renamed as the Information and Communications Technology Office (ICTO)
and transferred to the Department of Science and Technology (DOST . The ICTOs purpose was
to Formulate the Government Information Systems Plan and administer the E-Governance
Fund.
On December 27 2013, further developments on the EGF was a budget increase by
allocating an additional approximately one and a half billion pesos from just one billion pesos
under the mandate of Republic Act (RA) 10633. The budget increase is suggested to further
develop ICT projects in in public financial management, basic and higher education, health,
justice, peace and order, transport, land use, open government/ open data, climate change and
citizen frontline delivery services.

D. Tourism
Tourism is considered as a vital factor that influences economic growth , and has been a
primary drive for sustained development for the Philippines. Pilapil-Anasco and Lizada (2014)
discusses and explains the history and evolution of the tourism industry in the country in a
paper. Four main periods in the history of the country were identified which served as the major
divisions of the analysis of Philippine tourism of the paper . The aforementioned periods were
namely, 1) pre-martial law era; 2) martial law era; 3) post-martial law era; and 4) 21st century
era. The earliest record of Philippine tourist arrivals were in 1960 and this exhibited an upward
trend since then until the present. The increase and decrease in tourist arrivals were in line with
the growth and political instability of the economy, thus tourism was identified as a key factor
that strongly influenced the changes that happened in the business cycle of the country.
Pre-martial law was in the aftermath of the World War II , and tourist arrivals continued to
grow and flourish despite the damages incurred from the war. The Philippine Tourist and Travel
Association (PTTA) was formed in 1950 to address and accommodate the influx of tourists in
the country. The association was geared towards improving tourist experience , as well as
generating foreign currency and employment. As tourism continued to contribute largely to the
growth of the economy, the national government institutionalized and formalized the PTTA in
1952 through the issuance and approval of the Republic Act No. 710. The Board of Travel and
Tourist Industry (BTTI) was created in 1956 to aid the PTTA in its endeavors . The government
continued supporting the efforts of the private sector and this generated more tourist arrivals -- it
was estimated that the number was 51,000 in 1960 and reached 144,000 in 1971. Gross
domestic product of the country also relentlessly rose. The main caveat that was faced for
10

tourism in this period was the lack of facilities and developed infrastructures to support and aid
tourism efforts.
Foreign tourist arrivals unceasingly increase even in the 1970s until 1980 -- the estimate
was from 166,000 in 1972 to 1,008,000 in 1980. The Department of Commerce and and
Industry was reorganized as the Department of Trade and Tourism and formally , in 1973, the
Department of Tourism (DOT) was institutionalized and was delegated as the primary body that
handles tourism-related concerns for the Philippines , by virtue of the Presidential Decree No .
189. Together with the DOT, the Philippine Tourism Authority (PTA), and the Philippine
Convention Bureau (PCB), along with other government and non-government organizations
were established in order to promote and improve Philippine tourism . Due to the assassination
of Benigno Aquino Sr. in this period, as well as other factors that contributed to political
instability deeply affected the condition of the economy, including the tourism sector -- tourist
arrivals were dropping drastically; an estimate of 1,008,000 in 1980 turned to 782,000 in 1986.
Before the People Power and the removal of Ferdinand Marcos in office, the DOT was reformed
and reorganized once again in order to address the complications at that time, by virtue of the
Executive Order No. 120 signed on January 1986.
The efforts of the DOT were reinforced in the 1987 Philippine Constitution , which helped
it develop and attain sustainable tourism experience in the country even in the post-martial law
era. The number of arrivals started to increase again in the latter part of the 1980s . Despite the
electricity problem that emerged in this time , the government endlessly pushed for the stability
and efficiency of the DOT. The Philippine Tourism Master Plan (TMP) was created and was
mandated for other institutions to abide with this blueprint -- this allowed another short hike in
11

tourist arrivals in 1992 and was later affected by the Asian Financial Crisis . Ecotourism was also
developed in this period and was an integral part that constitutes tourism in the country.
The 21st century era focused on the promotion of ecotourism in the Philippines , and
improved quality of goods and services provided by the travel agencies, tourist destinations,
and other tourism-related bodies in the nation, which also aided in the achievement of its set
goals.The Tourism Act of 2009 (Republic Act No. 9593) stated that tourism was declared by the
Philippine government as an indispensable factor that fuels significant changes for the
improvement of the country. According to Lagman (2008), the World Tourism Organization
reported that 8.8% of the Philippines GNP was contributed by Philippine tourism. Moreover, the
2001-2004 Medium Term Philippine Development Plan (MTPDP)

and the Millennium

Development Goals of the Philippine Development Plan for 2011-2016 highlight on tourism as a
key body that promotes inclusive growth. In 2010, tourist arrivals started to heighten once more .
Henderson (2011) explains that there are major limitations faced by the country in terms of
improving

tourism

--

such

as

political

turmoil,

infrastructure,

weather,

transport,

accommodations, marketing, and others -- and these may hamper investment and development
of the sector. Still, at present, the DOT continues to strongly advocate for its campaign Its
more fun in the Philippines, and works to maintain its title of being a main factor that
contributes to the inclusive growth of the Philippines.

Agenda and Factors Involved In The Reorganization and Devolution Processes

A. Department of Housing and Urban Development (DHUD)

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The Housing and Urban Development Coordinating Council (HUDCC) was

created by then President Corazon C. Aquino by virtue of Executive Order No . 90 dated
17 December 1986. The EO, which also abolished the Ministry of Human Settlements,
placed HUDCC under the direct supervision of the Office of the President to serve as the
highest policy making body for housing and coordinate the activities of the key housing
agencies to ensure the accomplishment of the Government Shelter Program.
On 25 May 1989 and May 28, 2001, Executive Order No. 357 and Executive
Order No. 20 were issued respectively, to strengthen HUDCC into department level
organization by conferring it with the power to exercise overall administrative supervision
over the key housing agencies; set and ensure the attainment of targets and objectives
for the housing sector; review the organization, programs and projects of the key
housing agencies; decentralize its operations and enlist the assistance of the
Department of Budget and Management (DBM) in securing continuing funding support to
the National Shelter program.
In 1992, the Urban Development and Housing Act (RA 7279) mandated the
HUDCC to direct the formulation of a National Urban Development and Housing
Framework in coordination with the Local Government Units and other public and private
sector agencies; design of a system for the registration qualified socialized housing
beneficiaries and inventory of land suitable for socialized housing; and provide , through
its attached housing agencies, the LGUs with support for the preparation of town and
land use plans, data for forward planning and investment programming , and assistance
in obtaining funds and other resources for housing and urban development.

13

From 1986 to present, there are several executive and legislative issuances
including the three laws mentioned above, that provide or authorize HUDCC with
specific functions and/or require it to undertake certain tasks related to housing and
urban development. These legal and legislative fiats assigned duties and responsibilities
to HUDCC that are related to its original mandate as the lead agency in housing and
urban development (n.d.). Since the problem on housing has been pressing on our
economy for the past years, Chamber of Real Estate and Builders' Associations or
CREBA strongly vied for the creation of the Department of Housing and Urban
Development (DHUD) (Gorayeb, 2015). A senate bill introduced by senator Ferdinand
Bongbong Marcos, which was filed on July 3, 2013, explained the roles and functions
of the DHUD when it was established . Marcos (2013) proposed and explained that the
current housing and urban development council, HUDCC, tasks were to be passed onto
the DHUD along with the planning and regulatory functions of the Housing and Land Use
Regulatory Board (HLURB).
Nowadays as the Housing and Urban Development Coordinating Council
(HUDCC) its mission and vision are verbatim: As the highest policy making and
coordinating body on housing and urban development, HUDCC shall facilitate access to
a variety of housing options that are decent, affordable and responsive to the diverse
and changing needs of homeless and underprivileged Filipino families and Decent and
affordable housing opportunities and sustainable human settlements for families
belonging to the lowest income strata of our society with HUDCC providing overall
direction for its promotion respectively. HUDCC is located at BDO Plaza, Paseo Roxas,
Makati City, Metro Manila.

14

The council's composition (spearheaded by the HUDCC chairman) is as follows:

Key housing agencies: National Housing Authority (NHA), National Home Mortgage Finance
Corporation (NHMFC), Social Housing Finance Corporation (SHFC), Home Guaranty

Corporation (HGC), and Housing and Land Use Regulatory Board (HLURB)
Key finance agencies: Home Development Mutual Fund (HDMF or Pag-IBIG Fund), Social

Security System (SSS), and Government Service Insurance System (GSIS);

Support agencies: National Economic and Development Authority (NEDA), Department of
Finance (DOF), Department of Budget and Management (DBM) , Department of Public Works
and Highways (DPWH), Development Bank of the Philippines (DBP), Metro Manila

Development Authority (MMDA), and Presidential Management Staff (PMS)

Two representatives from the private sector representing any of the following groups:
developers, bankers, contractors, professionals, and low-income beneficiaries. At present, the
private sector is represented by the following real estate developers engaged in low-cost
housing with extensive experience in real estate development: Mr . Jesus Atencio and Mr. G
iovanni Olivares.

B. Department of Information and Communications Technology (DICT)

The Department of Information and Communications Technology (DICT) is still
going through the process of being created; it is the youngest department discussed in
this paper. Recent development on the progress was on June 21 2015 when the senate
was able to pass a bill for the creation of the DICT . However, it has not been signed by
the current president Noynoy Aquino due to several issues concerning the matter . At
present, Information and Communications Technology (ICT) matters are being handled

15

under the Information and Communications Technology Office (ICTO), which is under
the Scientific and Technological services of the Department of Science and Technology
(DOST). Despite efforts being made by passing bills since as early as 2004 , there still
seems to be more work to be done for the pushing of the DICT.
Efforts of pushing the creation of DICT started in 2004. During the 13th Congress,
two bills were passed by the Senate , S.B. No. 1749 and S.B. 1795, both filed by Sen.
Magsaysay Jr. Both bills contain the same intentions , which was to push for the
reorganization of the DOTC into two separate departments, the Department of
Transportation and DICT. However, both bills ended up pending with the Committees on
the Science and Technology and on Civil Service and Government Reorganization
Finance by the end of the congress. The following year, on the 14th Congress, two
Senate bills were filed, which were S.B. No. 920 by Sen. Legarda, and S.B. No. 2546
by Sen. Ejercito-Estrada, Se. Angara and Se. Legarda. Both the bills contained the
same provisions as the aforementioned bills . Then on the 15th congress, four bills were
passed, which were S.B. No. 1352, S.B. No. 1040, S.B. No. 178 and S.B. No. 50. All
four bills contained the same intentions, which was to push for the reorganization of the
DOTC.
Current progress on the creation of DICT was last June 2015 where the
Philippine Senate passed its third and final reading of the bill pushing the creation of
DICT. According to a press release , a bill seeking the creation of a new government
agency which would focus on the development of the country's growing information and
communications technology (ICT) sector. (Senate passes bill creating DICT 2015)
16

Senate President Ralph G. Recto being the chair of the Senate Committee on Science
and Technology and sponsor of the Senate Bill 2686 mentioned that this bill aims to
promote digital literacy and ICT expertise. The bill was approved on October 2015 by the
Congress. Despite its approval, president Aquino is against the bill since he believes that
creating the DICT would only overlap some functions of the current agencies and thus
be redundant.

C. Department of Tourism (DOT)

The Department of Tourism was formally established on May 11, 1973 by virtue
of the Presidential Decree No. 189, which was arranged by the Ministry of Tourism
(MOT). Before its formation, tourism in the country was represented by the Philippine
Tourist and Travel Association (PTTA) which took effect in 1952 through the Republic Act
No. 710. The PTTA was originally a private enterprise , and not a government institution.
In 1956, the PTTA was coupled with a body that served as its policy-formulating
component -- the Board of Travel and Tourist Industry (BTTI). Along with the creation of
the DOT in 1973, the Philippine Tourism Authority was organized in order to serve as its
constituent in promoting progress for infrastructure , and in 1976 the Philippine
Convention Bureau was formed to take charge of marketing operations for the the
department. On January 30, 1987, the Ministry of Tourism issued a reorganization act
for structural and functional reformation of the department . The Republic Act No. 7160,
issued on October 10, 1991 and included in the Local Government Code of 1991 , stated

17

that certain functions of the DOT were devolutionized and passed to local government
units.
The vision of the Department of Tourism includes: 1) provision of easier access
to travel locations and destinations; 2) improvement of tourism goods and services in
terms of price and quality; 3) raising awareness and advertisement of tourism to Filipino
citizens; and 4) attainment of acknowledgment and recognition of tourism as a significant
driver of socio-economic development in the Philippines . On the other hand, the three
main missions (and mandate) of the DOT are to increase the influx of foreign currency in
the country, as well as to create jobs and contribute to employment; to proliferate the
benefits brought about by tourism to a larger portion of the countrys population with the
aid of the public and private sectors; and to provide quality service to local and foreign
customers through safety, convenience and recreation.
There are five main sectors that are responsible for the operations of the DOT . These
are the Office of the Secretary, Tourism Promotions Sector, Tourism Services and Regional
Offices Sector, Planning and Product Development and Coordination, and the Internal Services
Sector. Their respective functions are presented in the following table:

Sector

Office of the Secretary

Function

Leader of overall operations; oversees all

18

processes and actions undergone by the

department
Creates policies, programs, plans, rules
and regulations
Scrutinizes the Tourism Master Plan and
makes the final judgment
Adviser to the president regarding tourism
issues and concerns

Tourism Promotions Sector

Promotes the Philippines as a local and

international tourist destination
Marketing and promotions
Supervisor of international operations of
field offices

Tourism Services and Regional Offices

In-charge of quality service for tourists

Accreditor and inspector of tourist

Sector
establishments abiding with international
norms, rules and regulations
Supervisor of regional bodies for tourism

Planning, and Product Development and

Creates the Tourism Master Plan, along

Coordination

with relative programs, and monitors its

execution and implementation
Plans for new products and investment
options for the improvement of tourist
locations and facilities

Internal Services Sector

Manages and supervises over the internal

19

sectors in the department, such as human

resources, general services, financial and
budgetary operations, and others

Key issues and implications

The reorganization and devolution of the DHUD, DICT, and DOT are targeted to improve
the quality of goods and services at the local level and thus increase economic growth and
stability. As mandated in the Local Government Code of 1991 , the shift of power over certain
processes to the local level will ensure that the necessary and corresponding needs of each
area will be addressed more efficiently by the respective local government units (LGUs) .
However, contrary to the promising goals and objectives of the devolution and reorganization
processes, there were more problems that arose after the implementation of these procedures .
Chanco (2011) argued that local government units often complain about having inadequate
financial resources for the implementation of certain projects and improvements in specific
areas, but he added that the lack of revenue was not the only main problem that was attached
with the localized operations. The author explained that there was an absence of experienced
and knowledgeable workers to work for each of the devolved units in all localities , and the
delivery of services were degrading throughout the course of operations . He strongly advocated
for quality training first before the government continued with devolution. An example cited by
Chanco was that of the case of the Department of Tourism wherein the evaluation and

20

classification of hotels raised issues -- A hotel which merits a five star rating in Bohol will
probably merit a two star in Manila and no star internationally.
Budd (2000) also argues that decentralization in some provinces meant that officials
reinforce corruption and nepotism -- that they will use the power that they gain over a certain
area, only to use it to their advantage and personal interests , and pass these onto friends and
relatives for them to benefit most from the resources . Gonzales (1997) statement in his paper
confirms the incapacities entailed at the local level -- he said that LGUs still lacked human ,
technical, and financial capacity, despite the accomplishments of the said local units. Moreover,
he explained that a trend of recentralization was occurring , and inherently erased local
autonomy. This shows that the implementation of decentralization and reorganization has lost
its essence, ultimately.
A big implication that can be derived from the establishments of the said departments ,
along with other localized bodies in the country, gives rise to another question: Is
decentralization and reorganization the key to attaining a better status of the economy? There
are certainly advantages and disadvantages attached with devolution and reorganization, as
mandated in the Local Government Code of 1991, and other decentralization laws and policies
of the government, but the implementation of all these policies boils down to the efficiency and
applicability of these laws in the Philippines . Political instability was mentioned as a major issue
in almost all sectors discussed in this paper , and it cannot be denied that the Philippines
continues to experience political turmoil, and that this ultimately influences the structure and the
functions executed by the different bodies that represent the government, such as those of the
DAFE, DHUD, DICT, DOT, and others. Issues such as graft and corruption, plunder, deepening

21

incidence of poverty and increasing unemployment -- these will remain evident . But in the
advent of issues experienced by the Philippine economy, the reliability, productivity, and
efficiency should be brought about by government institutions to fundamentally explain the
economic capability of the Philippines, yet these remain to be in question.

Conclusion and summary

The institutions themselves as departments of the government are fairly young; having
only existed in a matter of a handful of decades , although there have been generations of
agencies that performed identical functions in the past . The reorganization and devolution of the
departments throughout the years are attempts to form a sustainable structure that can perform
their duties properly. These actions are mostly undertaken once complaints against the
standard operations of the departments regarding the insufficiency to meet demands have
become highly vocal; reorganization and devolution are not done by the departments out of
initiative nor long-run outlooks at the future of the department and the growing needs of the
economy. The reorganization and devolution themselves are not smooth successful operations
seeing as how there are still issues left to be desired . This shortcoming urges the departments
to reorganize and devolve even further. The paper has effectively answered the research
question regarding the background, vision and mission, and current activities of the
departments, as well as the history of the fields their operations take place in such as
agriculture and housing.

22

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