D E PA RT M E N T O F F I N A N C E

BUREAU OF LOCAL GOVERNMENT FINANCE

Basic Orientation for NEO

First 100 Days

Module 3: Problem Solving and Solution

Seeking on Key Governance Challenges
Appreciate Fiscal Management
Jose Arnold M. Tan Ph.D.
OIC-Deputy Executive Director for Operations
Bureau of Local Government Finance
Department of Finance

www.blgf.gov.ph

Development: It depends on whose hands its in.

A basketball in my hands is worth $20.
A basketball in Michel Jordans hands is worth $33M
It depends on whose hands its in.

A rod in my hands will keep away a wild animal.

A rod in Moses hand can part the mighty sea.
It depends on whose hands its in.

A sling shot in my hands is a kids toy.

A sling shot in Davids hand is a mighty weapon.
It depends on whose hands its in.

Development: It depends on whose hands its in.

2 fish and 5 loaves of bread in my hands is a couple of sandwiches

2 fish and 5 loaves of bread in Gods hands will feed thousands

It depends on whose hands its in.

Nails in my hand might produce a birdhouse
Nails in Jesus hands is the salvation of the world
It depends on whose hands its in.

DEVELOPMENT... It is in your hands

What will you do with it?

Development Issues

The LGC was enacted to transform LGUs

into self-reliant communities and active
partners in nation-building by giving them
more powers, authority, responsibilities and
resources

Decentralization hopes to achieve the

economic development at the regional and
local levels, as the local chief executives are
given more freedom in carrying out their own
programs that are suitable to the conditions in
their respective areas.

Development Issues

Local development is the

development as a nation.

key

to

our

The LGU is the primer mover of local

development.

Development is not an
accident!!!

Development Issues
Development results from DISCIPLINED execution of a clear vision.

building commitment
political will
Sufficient
Resources

good
governance
etc.
transparency

Development Issues

Resources must be:

Located (sourced)
Allocated
Used

Development and its reward are NOT FREE.

Definition of Local Fiscal Management

Local Fiscal Management/Administration pertains to the

rational, effective and efficient conduct of the fiscal
functions and operations of LGUs
which embrace the systems,
structures, processes and human
resources involved in revenue
generation, revenue allocation and
utilization.

Major Actors on Local Fiscal Management

Planning Officer

Local Treasurers and

Assessors

Revenue
Generation

Planning

Local
Fiscal
Mngt

Recording
&
Accounting

Budgeting

Accountant

Budget
Officer

Roles of Elected Officials in Revenue Generation

Roles of Local Chief Executives
Initiate and maximize the generation of resources and revenues,
and apply the same to the implementation of development plans,
program activities and priorities. (Sec 444(b)(3))
Ensure that all taxes and other revenues of the LGUs are collected,
and that LGU funds are applied in accordance with law or ordinance
to the payment of expenses and settlement of obligations of the
LGU.

Roles of Sanggunian
Impose Tax, fees and charges to generate revenue
Enact an ordinance for the approval of the LGUs annual budget.

Legal Framework of LGU Revenue Generation

Constitution
(Article X, Section 5)

Local Govt
Code

Local
Ordinances

Understanding LGU Financial Condition

Internal Sources

External Sources

Taxes, Fees and Charges

Income from Local Enterprises

Central Transfers
Loans and other forms of credit
Private Sector Partnership

LGU Funds

Understanding LGU Financial Condition

Revenue Profile of All Municipalities (FY 2014)

2%

11%
9%

Tax Revenue

Non-Tax Revenue
78%

Internal Revenue Allotment

Others

Understanding LGU Financial Condition

Distribution of Expenditures of All Municipalities (FY 2014

General Public Services

0%

14%

43%
23%

14%

Housing and Community

Development
Social Services and Social Welfare

6%

0%

Education, Culture and Sports/

Manpower Development
Health, Nutrition and Population
Control
Labor and Employment

0%

0%

Economic Services

Major Revenue Problems

Outdated local
tax code
High dependency
rate on IRA

Insufficient
utilization of
available external
resources

Underassessment of
local business tax

Under-utilization
of real property
tax bases

Poor operation
and management
of economic
Enterprises

Major
Revenue
Problems
Facing LGUs

Poor planning
and budgeting

What must be done?

To respond to these challenges, the LGUs...

Must establish an accountable, efficient and
organizational structure and operating mechanisms.

dynamic

Must enhance the quality of local leadership.

Should have greater access to financial resources to meet the
priority needs and service requirements of their respective
communities.

Roles of Local Officials in Revenue Generation

Local Chief Executive
and Permits
Licensing
Executive
Direction & Control
Licensing and Permits

Local Sanggunian
Licensing
and Permits
Tax Authority
Enabling ordinance, rules & policies

Local Finance Committee

Licensing and Permits

Income projections
Recommendations on tax/ revenue
measures
Income From Local Sources
Licensing and Permits

Tax Revenue

Non-Tax Revenue

Local Treasurer

Local Assessor

Licensing and Permits

Licensing and Permits

Appraisal and assessment of real

property for taxation purposes

Collection of all local taxes, fees and charges

Tax information
Examination of books of accounts
Inspections
Collection by enforcement of remedies

Other Local Officials

Next

Exit

Prev

One day, a little mouse living on

a farm, spied the farmer and his
wife opening a package. He was
aghast to discover that the
package contained, not food,
but a mouse trap. The mouse
ran to the farmyard warning
everyone.
There is a mousetrap in the
house, there is a mouse trap in
the house!

Next

Exit

Prev

The chicken raised his head

and exclaimed, Mr. Mouse,
I can tell you this trap is a
grave concern to you, but it
has no consequence to me
and I cannot be bothered
with it

Next

Exit

Prev

The mouse turned to the

pig... I am so very sorry
Mr. Mouse, but the trap is
no concern of mine either.

The mouse then turned to

the bull... Sounds like you
have a problem Mr. Mouse,
but not one that concerns
me.

Next

Exit

Prev

The mouse returned to the

house, dejected that no one
would help him or was
concerned about his
dilemma.
He knew he had to face the
trap on his own.

Next

Exit

That night the sound of a

trap catching its prey was
heard throughout the
house.
The farmers wife rushed
to see what was caught. In
the darkness she could not
see that it was a
venomous snake whose
tail the trap had caught.
The snake bit the farmers
wife

Prev

Next

Exit

Prev

The wife caught a bad

fever and the farmer knew
the best way to treat a
fever was with chicken
soup.
He took his hatchet to the
farmyard to get the soups
main ingredient.

Next

Exit

Prev

The wife got sicker, and

friends visited her round
the clock.
The farmer had to feed the,
so he butchered the pig.

Next

Exit

Prev

The farmers wife got

worse and died. So many
friends and family came to
her funeral that he had to
slaughter the bull to feed
them all

Next

Exit

Prev

So the next time we hear

that one of our team-mates
is facing a problem and
think it does not concern or
affect us, let us remember
this:
When anyone of our team
members is in trouble...
WE ARE ALL AT RISK.

Next

www.blgf.go