In 1999, the Philippines Department of Health, with support from USAID and technical assistance from Management Sciences for Health (MSH), implemented the matching grants program (MGP) as a component of the local government performance program. The MGP aims to improve the capability of municipalities and component cities to expand service delivery, and to achieve significant increases in rates of fully immunized children, vitamin A supplementation, tetanus toxoid immunization for women, as well as in the use of family planning methods, especially modern methods. Upon the request of the USAID Mission, the Frontiers in Reproductive Health program worked closely with MSH to conduct an evaluation of the MGP. This report briefly summarizes the results of the evaluations as a springboard for discussing program and policy issues. Specifically, this analysis attempts to draw out the program and policy implications of the findings from the MGP process and impact evaluations. While questions of sustainability and cost-effectiveness remain, this evaluation uncovered a number of important findings to guide future MGP implementation. The report notes that local government units appear to have identified mechanisms for outsourcing and mobilizing other community resources for this program, including the support of NGOs and other private sectors