MUNICIPAL DEVELOPMENT FUND

military bases to mobilize and manage resources for local development. The Ministry of Human Settlements" Management Advisory Committee (MAC) Secretariat will implement the project. A Municipal Development Fund (MDF) will be established to finance capital and technical assistance for development projects in three cities (Angeles, Olongapo, and Baguio) and in 17 municipalities in the target area. Ten municipalities which are regional or major urban centers and have the resources and labor to potentially support diversified economies will also be targeted as pilots. Three types of projects will be financed: (1) institutional development projects such as municipal planning and tax collection for local governments; (2) construction of public infrastructure such as roads, utilities, and water supply and sewerage systems to establish an environment conducive to increased employment and investment; (3) and public enterprise projects such as markets, slaughterhouses, and hospitals to improve public services and strengthen the income base. Institutional and non-revenue-generating infrastructure projects will receive MDF grants. Public enterprise and revenue-generating infrastructure projects will be funded through MDF loans administered by the Philippine Development Bank. Since municipalities are under provincial authority, Municipal Development Coordinators will identifiy projects in conjunction with Provincial Development Staffs. Cities, which are independent of the provinces, will act through their City Planning and Development Staffs. The MAC will then chose projects based on technical and economic soundness, the locality"s ability to cover operating and maintenance costs, and the extent to which they benefit the poor. Priority will be given projects with short gestation, which generate income or employment, or in which cities will make cash/in-kind contributions.