Many developing countries have devolved the responsibility for education services to local governments in an effort to improve educational quality and make public spending more efficient. Advocates of decentralization have argued that bringing decision-making closer to schools makes public policy more responsive to local needs, strengthens accountability, and fosters innovation. In some countries, decentralization has gone further in that schools have been given responsibility for developing their own improvement plans and a degree of autonomy over the use of their resources. The purpose of this policy note is to assess the financing of basic education services by local governments in the Philippines. Using data that the PETS-QSDS team has carefully collected from a nationally representative sample of elementary and high schools, it explores the magnitude of the funding that local governments are giving to schools and assesses the systems that govern the use of local government funds in the education sector. The policy note shows that local governments' contribution to overall public education funding is small and highly inequitable. It also shows that the systems used to allocate and manage these funds are weak and that greater transparency and accountability over these resources is urgently needed.