LGUs urged to raise more revenues, improve fiscal transparency

The Department of Finance (DOF) has released in its Iskor ng ‘Yong Bayan website (http://iskor.blgf.gov.ph) the fiscal sustainability scorecards of 1,477 municipalities, including newly created cities, in the Philippines from FY2009 to FY2012 to urge local governments to boost local revenue generation.

Finance Secretary Cesar V. Purisima is enjoining local governments to fully enforce the collection of local taxes and other impositions so they could improve their fiscal positions to fund the increasing demand for basic services for the people, without relying solely on national allocations.

“We are closely monitoring the LGUs through their local treasurers and assessors. We want to drive LGU revenue generation performance knowing full well that optimized capacity means having more funds to serve their constituents,” emphasized Secretary Purisima.

Secretary Purisima added that in the spirit of good fiscal governance, local governments need to update now their decades-old local revenue codes and schedules of market values as basis for their taxes, fees, and other charges.

The DOF noted that even first class municipalities still lag in optimizing their own local revenue sources, despite having better leverage in mobilizing revenues as they are either capital towns, centers of local commerce and trade, have higher urbanization, or are generally progressive than others,

Of 286 first class municipalities with reports, 116 municipalities, or around 40%, remain dependent on national government revenues. This dependence is partly because 199 municipalities, or 70%, have poor collections from real property taxes, making up less than 15% of their respective local incomes, a fact that the accompanying Tax Watch ad underscored. On the average, only 57% of collectible real property taxes are realized by provinces and cities.

In addition, the non-compliance of 60 out of 81 provinces, or around 75%, in regularly updating their schedules of market values as basis for imposing the real property tax and special education fund, contributed to the poor performance of municipalities.

Building on the earlier publication of the performance of provinces and cities in April this year, the data release of the DOF, through its Fiscal Intelligence Unit (FIU), and Bureau of Local Government Finance (BLGF), aims to further engage citizens in accessing information on local finance based on the reports submitted by local treasurers and in holding LGU officials accountable.

The DOF also noted that the local treasurers in 230 municipalities, 59 of which are first class municipalities, did submit the Statement of Receipts and Expenditures report in 2012 as of the time of evaluation.

The Secretary of Finance is expecting the BLGF to start imposing sanctions by early 2015 on local treasurers who fail to report on the Statement of Receipts and Expenditures, and for those who submit false or erroneous reports.

The LGU Fiscal Sustainability Scorecard will be a regular fiscal and financial management performance assessment for all LGUs in the areas of local revenue generation capacity, local collection growth, expenditure management, updating of Schedule of Market Values, and reportorial compliance of treasurers and assessors with the DOF and BLGF.