This project, formerly “one Cluster, One vision (OCOV) for local Development Project” is a continuing effort of the Department which concretized the Constitutional and Codal Provisions on inter-local cooperation by pooling resources and local capabilities to deliver services, as well as, address common issues, challenges and problems  that go beyond administrative and political boundaries of LGUs.

It is carried out though formal organization of LGU alliances/ cluster and providing assistance in building their capacities on integrated area planning, project development and implementation, human resource development, enterprises and entrepreneurship development,  tourism development, etc, in cooperation with concerned agencies and development partners.

Regional Office Commitments:

  • Advocate clustering concept to LGUs
  • Assist BLGD in providing TA on:
    • Formal organization of clusters
    • Formulation of cluster plan/development of Cluster Tourism Plan
    • Product development, packaging and marketing
  • Monitor project implementation of LGU Cluster
Performance Indicators Performance Targets
No. of organized cluster LGUs/alliance

Each region with at least one organized cluster LGUs/Alliance

LED4LGUs is an innovative program designed to provide local government units (LGUs) with a solid understanding of the principles and decision tools of LED to assess their local economic opportunities, develop and implement their LED initiatives that will create an enabling environment for retaining businesses and attract investment. As a result, it will create jobs and alleviate poverty in the community.

The project is organized to develop and enhance the capacities of LGU officials and functionaries to generate strategic options and develop unique and unconventional approaches towards improving productivity of their locality. It is carried out by the local Government Academy (LGA) with technical assistance provided by the Local Government Support Program-Local Economic Development (LGSP-LED).

Regional Office Commitments:

  • Conduct Training to Target LGUs on:
    • Entrepreneurial LGU management towards Sustainable LED
    • Development of LED strategy
    • Formulation of Business Plan with financing option
  • Formulation of Local Incentives & Investment Code
Performance Indicators Target

No. of LGUs provided with training have produced the following outputs:

  • LED Action Plan
  • LED Strategy (with financing options)
  • Business Plan
  • Local Incentives & Investment Code

50 LGUs



LGSP-LED is an 8-year collaborative project of the Governments of Canada and the Philippines that will support DILG and other relevant national agencies in creating enabling conditions for decentralization and improving policies, laws, programs and operations to enhance local governance and economic development. The goal of the Project is to foster efficient, responsive, transparent and accountable governance at all levels. Its purpose is to reduce poverty by strengthening local governance and supporting sustainable local economic development (LED). The Program operates both at the national and local levels, providing a better enabling environment for LGUs and improved prospects for local economic development in various communities.


The focus of LGSP-LED assistance is to improve the capacity of the selected LGUs to create and maintain an environment that sustains more value creation for its enterprises and greater prosperity for its people. Sustainable local economic development dictates that the LGU makes efficient use of its natural resources, minimizing adverse effects brought about by undirected growth. The important contribution of the Project is ensuring that LGUs have the prerequisite enabling environment in pushing its businesses and residents oriented towards pro-poor, gender responsive and environmentally sound local economic development.

Phase 1 - Working with Competitive LGUs. This Phase which would cover the initial 15 months (2008-2010), will focus on strengthening the LED programming and partnership arrangements of selected four (4) eligible LGU alliances. These are LGUs that have begun the LED process and would need assistance for further LED support and implementation.

The lessons learned and experience gained during this Phase will serve to guide the succeeding phases of LGSP-LED implementation. It is also intended to inform CIDA and DILG on whether the LGUs should continue into the longer term phase and/or attract more LGUs into the Project.

Phase 2 - Working with LGUs in a State of Readiness for LED
. This Phase is anticipated to run for the following subsequent three (3) years (2010-2013), and will work with eight (8) LGUs, that have demonstrated commitment to pursue a transparent and accountable process of LED and possess the technical, managerial, and financial capacity to accomplish the development goals of the LGU. Separate selection guidelines will be established based on lessons learned in Phase 1.

Phase 3 - Complementation and Leveraging Donor Resources for LGU LED Sustainability.
Phase 3 will run for another three (3) years (2013-2016) and may involve expanding coverage of LGSP-LED programming by DILG to other LGUs through complementation and leveraging with other donors and financial institutions. In this stage, LGUs are able to secure complementary investment support and funding assistance for their LED initiatives.

The project Provides financing for 4th to 6th class municipalities for the implementation of their MDG projects, cognizant of the funding constraints of lower-income LGUs in meaningfully attaining their own MDG targets. MDGF is a separate lending facility initiated by the Department of Finance (DOF) though its Millennium Development Fund Office (MDFO) and DILG to help low income LGUs fast track the attainment of the MDG at the local level.

It aims to catalyze LGU initiatives to rapidly address their social development program focusing on poverty, hunger, disease, illiteracy, environmental degradation, slum upgrade, and gender discrimination. It likewise assists LGUs in expanding and upgrading their social infrastructures to provide more quality MDG-supportive services to their constituents.

The project  has two(2) components, namely Investment Support and Institutional Capacity-Building. Investment Support refers to the provision of capital investment requirements of the proposed projects and financed from the 500M second Generation Fund (SGF) being administered by MDFO-DOF that will cover the cost for civil work, procurement of equipment/goods and other services on credit basis based on the Net Borrowing Capacity (NBC) of the LGU. Institutional Capacity Building refers to the provision of technical assistance to eligible LGUs that will enhance their capacity to implement and sustain their projects.

In helping out these LGUs, the project contributes to the empowerment of low-income LGUs to plan, implement and manage their development projects, and at the same time provides impetus for these LGUs to be competitive and business-friendly as their capacities are developed to spur economic development in their areas.

Regional Office Commitments:

  • Prepare project profile for credit financing

Performance Indicators


  • No. of LGUs provided with capacity building assistance in project development, implementation, management and sustainability


  • No of LGUs with feasibility study reviewed/evaluated and endorsed to MDFO for funding


  • No. of approved LGU MDG-Fund subprojects implemented and completed



The project aims to Streamline the business permits and licensing system (BPLS in the Philippines in as many LGUs as possible in an Effort to attract investors that will lead to increased local revenues. It involves the development of policies and guidelines that standardize the streamlining of BPLS in cities and Municipalities in accordance with the service standards which the national government has set consistent with Republic Act NO. 9485, otherwise known as the Anti-red Tape Act of 2007.The Streamlining Includes Process reengineering, automation or computerization, customer relations and institutionalization of the system. The project  is in partnership with the Department of Trade and Industry (DTI). A total of 480 LGUs have been targeted under the project under DILG-DTI MOA.

Standards on BPLS streamlining:

  • Adoption of the BPLS Unified Form
  • Reduction in the number of signatories (maximum of 5)
  • Limit in the number of steps in applying/Processing business permits and licenses (maximum of 5)
  • Reduction in processing time (new applications:maximum of 10 days; renewal:maximum of 5 days)

Regional Office Commitment

  • Provide technical assistance to target LGUs
  • Monitor and evaluate LGUs with streamlined BPLS
  • Document BLPS good practices
Performance Indicators Targets
Completion of BPLS reforms All remaining MCC-targeted LGUs, LGUs in tourism zones, plus 15 ARMM LGUs
NO. of target LGUs Adopting BPLS reforms All target LGUs
Monitoring and evaluation report prepared and submitted M&E reports prepared and submitted within the prescribed period
BPLS good practices documented for popularization BPLS good practices documented and disseminated