Finance Undersecretary Antonette Tionko; BLGF Executive Director Nino Alvina; Treasurers of our local government units, private stakeholders and our friends in the media.
The devolution of power to local governments becomes meaningful when communities are empowered to finance themselves. The treasurers of the local governments play a key role here.
For this reason, the Department of Finance has put emphasis on building the competencies of the treasurers of local governments through the Standardized Examination and Assessment for Local Treasury Service or the SEAL Program. This initiative professionalizes and modernizes the local government treasury service.
Apart from bridging whatever skills gap there may be, the program also helps insulate the appointment and designation of treasurers of local governments from politicization. This ensures the cultivation of a meritocracy and inhibits the transfer, detail or reassignment of duly appointed local government treasury officials without due cause.
The competency certifications for appointing Treasurers and Assistant Treasurers of local governments help us ensure a continuing build-up of capacity. Since the start of this professionalization program, 4,116 in total have passed the Basic Competency level. Seventy-five of them will take their oaths today. Among the total, 441 have moved up and passed the Intermediate Competency level, of which two of the passers will be sworn in today.
On the average, almost 50 percent of the treasurers of local governments appointed by the Department of Finance have Basic Competency level certification. Slowly but surely, we are building a strong cadre of treasurers capable of undertaking financial management of local governments. Improved revenue generation for local governments will make devolution a more meaningful process for our communities.
The national government is also bent on increasing tax collections as local government funds are mainly sourced from the Internal Revenue Allotment. Enacted packages of the comprehensive tax reform program, such as the TRAIN law and the two sin tax measures, have been successful in providing robust revenue streams for the government.
Fixing the tax system will not only let us raise more revenues. It will also allow us to implement reforms in tax administration and strengthen our financial system.
Some of the tax reform packages that are crucial to closing the loopholes in our existing laws and regulations are yet to be passed by Congress. The Department of Finance, together with the Bangko Sentral, have been jointly pushing for the amendments of our Anti-Money Laundering and Bank Secrecy Laws. These formidable tools will strengthen our ability to fight tax evasion and other financial crimes.
Recently, we have detected the unrestricted influx of millions of dollars worth of foreign currency. An investigation is underway to determine the sources and destinations of these foreign banknotes flagrantly stashed in suitcases and brought into the country. There is, of course, a large possibility that those who bring in these large sums of cash intend to launder them here in the Philippines. There is an even worse possibility that the money in question could be used by international criminal syndicates or terrorist networks.
It is also very likely that the bulk foreign currencies are coming through our financial system through other channels, not only through the ports. They do this because they can. Our laws have no teeth to investigate and prosecute these activities effectively. We don’t have enough tools to know where all this money is going, without being hamstrung by stringent bank secrecy laws.
Our Anti-Money Laundering Act or AMLA, meanwhile, remains a weak tool against money laundering and other unlawful activities. Tax evasion and other financial wrongdoings are not among the predicate crimes listed under the law that would allow the Anti-Money Laundering Council or AMLC, to examine bank accounts after securing a court order. This leaves us powerless in going after tax evaders and other criminals using funds for other illegal activities.
The Department of Finance has been calling attention to these loopholes for years. In 2016, the DOF has proposed a bold reform to Congress to penetrate the wall of confidentiality used to conceal ill-gotten money by lifting the bank secrecy rules for suspected criminal cases, however, our legislators decided to table it for later discussion. We tried proposing it again through the tax amnesty bill. We passed the Tax Amnesty Bill on February 14 of last year but the President rightfully vetoed the grant of a general tax amnesty due to the lack of provisions on lifting the veil of bank secrecy. Offering a general amnesty must come with the ability to verify whether those who availed of it are not repeating the same violations when evidence points to the likelihood that they are doing so.
Now more than ever, we are ready to work with the legislature to advocate again for congressional approval of this crucial measure. We will likewise support the swift passage into law of the amendments to the AMLA to ensure that the Philippines will not be used as a money-laundering site for the proceeds of any unlawful activity.
While waiting for these crucial measures to be enacted, we are continuously working with other government agencies and the AMLC by utilizing currently available tools to curb tax evasion and other questionable activities, such as the unrestricted influx of foreign currency into the country.
While we are busy plugging the loopholes of our financial system, I am happy that in the area of local government finance, we can rely on the BLGF to effectively carry out its mandate of empowering local government units to attain fiscal sustainability.
The Bureau has been awarded with an ISO 9001:2015 certification for the quality of its processes in issuing the Certificate of Net Debt Service Ceiling and Borrowing Capacity. In line with the objectives of the Ease of Doing Business Act, the Bureau has streamlined the certification process, reducing documentary requirements from 12 to 4. It has also strengthened the evaluation procedures through the continuous monitoring of LGU borrowing using electronic channels.
The ISO Certification is a statement of the Bureau’s service excellence in providing technical assistance and undertaking oversight functions to local government units to guide them towards fiscal sustainability.
I congratulate the hardworking men and women of the BLGF for this achievement. I trust you will continue with the exemplary work you have put in towards building financially capable local government units.
I also congratulate the local treasurers of local governments taking their oaths today. You are the real front-liners in ensuring grassroots development through effective economic investments made by our local governments.
Thank you and good day.