LGU collections improve in Q3

MANILA, Philippines — Local government units (LGUs) showed improvements in their fiscal performance, collecting P204.09 billion in revenues in the first nine months of 2019, the Department of FInance (DOF) reported yesterday.

Citing the latest data from the Bureau of Local Government Finance (BLGF), the DOF said revenues generated by LGUs as of end-September last year rose by 12 percent to P204.09 billion from P182.27 billion  in the same period of 2018.

This is likewise equivalent to 84 percent of the BLGF’s third quarter target of P238.01 billion, according to the DOF.

About P152.15 billion of total local revenues came in the form of tax collections, which is 12 percent up from the P135.56 billion taxes collected during the same nine-month period the previous year.

This accounted for 28 percent of the revenue source of LGUs as of the third quarter.

Meanwhile, non-tax revenues of LGUs also grew by 11 percent to P51.94 billion from P46.7 billion a year ago. The DOF said this accounted for nine percent of the total revenue source of LGUs.

External sources, such as the internal revenue allotment (IRA) share of LGUs, contributed to 63 percent of the total revenues of LGUs in the first nine months of the year. IRAs amounted to P348.79 billion during the period.

While the DOF cited the improvement in local tax collections, it also noted the low efficiency rate of LGUs in the collection of real property taxes.

Real property tax collections of LGUs amounted to P57.03 billion in the first nine months of 2019, accounting for only 68 percent of the P83.76 billion target for the period. Nevertheless, this was still an improvement from the 58 percent collection efficiency rate in 2018.

The DOF said this underscored the need to pass Package 3 of the Comprehensive Tax Reform Program, which aims to institute reforms in the country’s land valuation system.

The package, as outlined in House Bill No. 4664, was approved on third and final reading in the House of Representatives last November and was already transmitted to the Senate.

For 2020, the BLGF’s is targeting P307.08 billion in local revenues,  P54.19 billion of which will come from the provincial governments, P213.71 billion from cities and P39.21 billion from municipalities.