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(AFP)--The Asian Development Bank will provide a $300 million loan to the Philippines to help local government units raise revenue to support basic services, the Manila-based bank said Tuesday.

The loan will be granted in the first stage of the programme which would also include a further $800 million grant from a Japanese-funded facility managed by the bank, an ADB statement said.

"It contributes to increased efficiency and effectiveness in the delivery of basic public services by increasing resources and funding options for local government units," said ADB public sector management specialist Tariq Niazi.

A 1991 law gave the provincial, municipal and city governments the main responsibility of delivering basic health, education and infrastructure services, functions previously handled by the national government.

However, local government has trouble fulfilling the mandate effectively due to funding constraints, incompetence and corruption, the bank said.

source: http://www.nasdaq.com/aspxcontent