DOF wants LGUs to rely more on local revenues

The Department of Finance (DOF) challenged its bureau overseeing local treasury financing and revenue administration to continue developing innovative programs to strengthen the fiscal autonomy of local government units (LGUs).

Finance Undersecretary Antonette C. Tionko said the Bureau of Local Government Finance (BLGF) should on ways to further wean LGUs off their traditional dependence on the national government for fund support.

Tionko cited many LGUs rely on the Internal Revenue Allotment (IRA) to fund 99 percent of their operations and programs, adding local revenues, on the average, only account for less than 1 percent of the country’s gross domestic product (GDP).

“There is a much needed balance here: LGUs must build their revenue base to fund their projects, and the effect on the national government’s fiscal space as a result of continued dependence of LGUs on national transfers,” Tionko said in a statement.

An attached agency of the DOF, the BGLF also has the mandate to assist LGUs in formulating policies on fund management, and programs to improve collection enforcement mechanisms and credit utilization schemes.

Tionko said the BLGF “must continuously find ways and develop new programs to improve the quality of local finance, and empower LGUs in the spirit of nation building and local autonomy.”

She assured the BLGF that the DOF is 100 percent behind the bureau’s efforts to help LGUs attain fiscal sustainability.

Recently, the Standardized Examination and Assessment for Local Treasury Service (SEAL), a three-level certification program to professionalize and provide capacity development for local treasurers, was launched by the DOF.

The Finance department is also preparing for the property valuation and taxation reforms that will form the third package III of the Duterte administration’s Comprehensive Tax Reform Program, Tionko said.

“The DOF is one with the LGUs in promoting fiscal decentralization and advancing their interests by way of strengthening foundations. That’s why the BLGF must step up its vision and directions in assisting the local governments,” Tionko said.

“After all, fiscal decentralization is not a one-size fits all approach. It will not be successful without the right intervention and support from the central government and support from the public and local constituencies,” she added.

Finance Secretary Carlos Dominguez III earlier signed a Memorandum of Agreement with the Civil Service Commission (CSC) to institutionalize the SEAL program, which will help the BLGF professionalize and modernize local treasury service.

Under Department Order No. 056-2016, the DOF has set additional standards, qualifications and benchmarks for competencies of local treasurers and assistant treasurers who are appointed by the Secretary of Finance, and are under the technical and administrative supervision of the BLGF.

The SEAL program will focus on tactical-operational competencies (Level 1), strategic-managerial competencies (Level 2), and leadingfor-innovation competencies (Level 3), to instill a culture of excellence, integrity and proficiency for modern local treasury service.

Passing the Basic Local Treasury Examination (BCLTE) will lead to Local Treasurer Eligibility (LTE), which shall be an equivalent eligibility to the second level or first grade eligibilities, such as the Career Service Professional and the eligibility granted under Republic Act No. 1080.

The BCLTE is a requirement in DOF’s SEAL Level 1 Certification for designations of local treasurers and assistant local treasurers effective June 2018. It will also have weight in the evaluation of candidates for appointment of local treasurers.

The Intermediate Local Treasury Examination (ICLTE), which will also be an annual exam, is a requirement for the DOF’s SEAL Level 2 Certification, and will be appropriate for appointment to higher positions in the local treasury service, particularly for 1st, 2nd, and 3rd class local governments.

As a promotional exam, the ICLTE may also be applicable for positions under the Financial Services in the civil service that do not require the practice of profession and are not covered by Bar/Board or Special Laws, subject to meeting all the qualification requirements of the positions.