The Curious Cases of Philippine Civil Society and Decentralization 169 While many LGUs have failed to generate income due to the dismal level of economic development of their localities, there is some evidence to support the claim that the unconditional IRA grants has led to complacency on the part of LGU leaders as they are not compelled to generate additional resources and can just limit spending to what they draw as their IRA share. Manasan found out that LGUs do not tend to fully utilize the tax powers assigned to them with many provinces and cities revising the schedule of the market values of real property in their jurisdiction only once since 1991. (Manasan 2009) Another explanation that could be offered for the low proportion of locally sourced income is the flypaper effect, or simply the phenomenon where literally, “money sticks where it hits.” (BLGF 2008). In a study, the Bureau of Local Government Finance (BLGF 2008) notes that while there has been no significant reduction in the revenue effort of local managers, higher revenue efforts shown by first- and second-class provinces relative to lower-class provinces indicate varying flypaper effects. As such, the poorer provinces (or by extension, cities and municipalities) appear to be more satisfied with the legally mandated central government dole-out. This is not to say that lower income class LGUs do not have a revenue base. With almost all LGUs covering a significant area, specifically a fixed taxable asset that is land, LGUs have been found to be remiss in enforcing a specific tax, the idle land tax. Based on statistics cited by the DOF and DILG, only 5 of the 80 provinces and 8 of the 121 cities have imposed the idle land tax.21 In a recent study, the La Liga Policy Institute cited estimates that anywhere from 1 to 94% of agricultural lands in the country are idle (La Liga Policy Institute 2011). Given the expanse of idle agricultural lands, this can extend to close to 10 million hectares. Thus, the Institute proposed that the LGC provision allowing LGUs to impose tax on such idle lands be implemented, a proposal that has already elicited support from the Department of Finance (DOF) and the

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