DOF dares bureau to strengthen LGU fiscal autonomy

MANILA - The Department of Finance (DOF) has 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) and further wean them off their traditional dependence on the national government (NG) for fund support.

DOF Undersecretary Antonette Tionko said the Bureau of Local Government Finance (BLGF) should remain at the forefront of NG efforts to promote fiscal decentralization, given that in some cases, LGUs rely on the Internal Revenue Allotment (IRA) to fund 99 percent of their operations and programs.

Tionko said 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 at the recent 30th anniversary celebration of the Bureau.

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, which is why, among others, 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 recently.

The DOF 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. PR