Carlos G. Dominguez
Secretary of Finance
Governor Dakila Carlo Cua of the Province of Quirino; Mayor Oscar Malapitan of the City of Caloocan; Ms. Cecilia Borromeo, Presidentof the Land Bank of the Philippines; Mr. Emmanuel Herbosa, President of the Development Bank of the Philippines; Mr. Renato Claravall, President of the Philippine Veterans Bank; Mr. Niño Alvina, Executive Director of the Bureau of Local Government Finance; local government officials; and distinguished guests: good morning.
First of all, let me congratulate the Bureau of Local Government Finance on its 33rd founding anniversary. I also commend the BLGF for organizing a series of learning sessions aimed at improving local fiscal management and empowering our local government units.
Our LGUs play a key role in revitalizing our economy that has been battered by the pandemic. The BLGF is at the forefront of helping the LGUs build financial literacy and revenue generating capacities. These efforts will help ensure that local economies are able to recover quickly from the COVID-19 crisis.
I trust that this webinar will prove helpful to the LGUs that want to expand their borrowing capacities and make meaningful economic investments in their communities.
The local governments were tasked to man the frontlines of our battle against this invisible enemy. Our LGUs became the vehicles through which we delivered emergency assistance to our marginalized communities. As our anti-COVID efforts evolved, local governments were tasked to be the principal enforcers of quarantine measures.
The local governments did not fail us. We were all unprepared to undertake new and heightened responsibilities in our COVID-19 response efforts. Despite this harsh reality, many LGUs performed beyond expectations. The effects of this pandemic would have been more severe had our local governments and health system not stood resilient. The national government is grateful for all your efforts.
The LGUs are vital in the difficult task of rebuilding our economy. Closer to the ground, they are best positioned to help revive our enterprises hardest hit by the pandemic. They can help pump prime the national economy through local public investments.
I highly encourage the LGUs to make the best use of their borrowing capacity to bolster recovery programs. Under Bayanihan Two, additional capital has been infused into our government banks to provide wholesale financing to rural banks and microfinance institutions so that they can expand lending to small enterprises.
The Land Bank of the Philippines and the Development Bank of the Philippines are allocated one billion pesos each for interest subsidies for new and existing loans secured by the LGUs. Funds from the Municipal Development Fund Office under Land Bank will be also transformed into a more effective and efficient LGU lending intermediary.
In addition to these credit facilities, the LGUs can deploy innovative solutions to maximize the use of their available funds. One way is for the LGUs to enter into an agreement with the Philippine Guarantee Corporation to secure the loans they provide. The LGUs can also team up with Land Bank and the DBP to provide interest subsidies for borrowers in their respective communities.
On the part of the Department of Finance, the BLGF sped up the process of issuing the certificates on net debt service ceiling and borrowing capacity to the LGUs. The overall process of application, evaluation, and issuance of certificates is now being done electronically. We will also continue to provide training programs that aim to raise the competencies of local government treasurers.
The devolution of services to LGUs highlights the direct contributions of local government finance toward mobilizing resources, bridging financing gaps, and investing for local economic development. The DOF stands ready to help LGUs become better equipped to perform these fiscal functions.
At both national and local levels, we need to optimize our revenue generation powers and improve tax administration. I urge the LGUs to adopt digital technologies for a more responsive governance and efficient delivery of frontline services.
I also encourage the LGUs to manifest to Congress the urgency of enacting the 2021 National Budget, CREATE, FIST, and the GUIDE bills within the year. I thank the LGUs that have already expressed their support for these urgent measures.
Be assured that the national government will continue to work with local governments to keep their constituents healthy and their local economies functioning and growing.
Together, let us build back a better economy that our people deserve.
Thank you.
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