Introduction: In 1991 the Philippines Government introduced a major devolution of national government services, which included the first wave of health sector reform, through the introduction of the Local Government Code of 1991. The Code devolved basic services for agriculture extension, forest management, health services, barangay (township) roads and social welfare to Local Government Units. In 1992, the Philippines Government devolved the management and delivery of health services from the National Department of Health to locally elected provincial, city and municipal governments.
Aim: The aim of this review is to (i) Provide a background to the introduction of devolution to the health system in the Philippines and to (ii) describe the impact of devolution on the structure and functioning of the health system in defined locations.
Method: International literature was reviewed on the subjects of decentralization. Rapid appraisals of health management systems were conducted in both provinces. Additional data were accessed from the rural health information system and previous consultant reports.
Results: Subsequent to the introduction of devolution, quality and coverage of health services declined in some locations, particularly in rural and remote areas. It was found that in 1992-1997, system effects included a breakdown in management systems between levels of government, declining utilization particularly in the hospital sector, poor staff morale, a decline in maintenance of infrastructure and under financing of operational costs of services.
Conclusion: The aim of decentralization is to widen decision-making space of middle level managers, enhance resource allocations from central to peripheral areas and to improve the efficiency and effectiveness of health services management. The findings of the historical review of devolution in the Philippines reveals some consistencies with the international literature, which describe some negative effects of decentralization, and provide a rationale for the Philippines in undertaking a second wave of reform in order to 'make devolution work'.