ADB-backed project to help LGUs boost revenues, build fiscal resilience

Finance Secretary Carlos Dominguez III said Tuesday an Asian Development Bank (ADB)-funded project designed to boost the revenue-raising capacity of local government units (LGUs) will help the Philippines continuously build its fiscal resilience as it undertakes its program for economic recovery from the prolonged COVID-19 pandemic.

Dominguez said the Local Governance Reform Project (LGRP) supported by the ADB is both a “timely and much-needed” initiative as LGUs are at the frontline of serving vulnerable communities and the “catalysts for building a new economy,” especially during these challenging times.

“At both national and local levels, we need to optimize our revenue generation powers and improve tax administration to raise necessary funds for our COVID-19 response efforts and economic recovery program. Even as we stretch resources to stimulate the economy, we must continuously build up our fiscal resilience,” said Dominguez at the first meeting of the Interagency Governing Board (IGB) for the LGRP held virtually via Zoom.

Among those present at the Tuesday meeting were National Economic and Development Authority (NEDA) Secretary Karl Kendrick Chua; Department of Budget and Management (DBM) Secretary Wendel Avisado; Department of Finance (DOF) Undersecretary Antonette Tionko; Department of Information and Communications Technology (DICT) Undersecretary Jose Arturo De Castro; and ADB Director Jose Antonio Tan.

Dominguez, who chairs the IGB, said the project will help boost the revenue collection capacity of LGUs via the adoption of new digital tools and improvement of institutional development and policy support for property tax valuation and collection.

He said the LGRP is in line with the Duterte administration’s goal of empowering LGUs and strengthening their local resource mobilization and public financial management.

The DOF-chaired IGB was created through Administrative Order (AO) No. 40 issued by President Duterte on April 27, 2021.

This Board is tasked to implement the LGRP in partnership with the ADB, provide policy direction and exercise oversight functions over the project.

Dominguez said the IGB will play a lead role in strengthening the country’s local governance framework, ensure the attainment of the LGRP’s major outputs within its implementation timetable, and monitor the compliance of executing agencies and other stakeholders.

“The undertaking we embark on today moves forward the process of devolution envisioned in the Local Government Code of 1991,” he said.

Dominguez said the IGB’s inaugural meeting will focus on identifying the LGRP’s key deliverables for this year, along with discussing the contents of AO 40, determining the status of the project, and deciding on the appointment of official representatives to the body.

“I trust that everyone in this room will be up to the task of assisting our local government units in providing efficient, transparent, and accountable services in their respective communities. All these efforts will help boost our economic recovery and reduce poverty in the countryside,” Dominguez said.

“To the ADB and the Philippine public, I assure you that the measures that we will be undertaking through the Local Governance Reform Project will be fully functional and irreversible,” he added.

Under AO 40, the DOF-attached Bureau of Local Government Finance (BLGF) will serve as the executing agency of the LGRP, with several key government agencies as implementing partners, such as the NEDA, DBM, DILG, DICT and the Bureau of Internal Revenue (BIR).

The IGB will have Undersecretary Tionko of the DOF-Revenue Operations Group (ROG) as alternate chairperson.

Its members are composed of officials from the NEDA, DILG, DICT, BLGF and BIR; one representative each from the League of Provinces of the Philippines (LPP), League of Cities of the Philippines (LCP) and League of Municipalities of the Philippines (LMP); a representative from a non-government organization (NGO), which may be a women’s organization; and a representative from the private sector.

The loan agreement for the US$26.53 million project was signed between the Philippines and ADB in July last year.

According to the ADB, the LGRP’s key objective is to help LGUs improve real property tax collection by strengthening property valuation mechanisms, introducing new digital tools for transparent and accurate reporting, and updating tax maps and property valuation assessments.

The project will also help LGUs build “a cadre of competent, professional local assessors through capacity development and knowledge partnerships,” the ADB said in approving the LGRP loan last year.

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