Public Financial Management: Regulatory Fees and Charges and Local Economic Enterprises

regulatory fees and charges and local economic enterprises
Among the common and allowable fees and charges collected by LGUs are the following: business
permit/mayor’s permit fee; barangay clearance; permit to extract sand, gravel, and other quarries resources;
fees for sealing and licensing of weights and measures; fishery rentals, fees, and charges; fees on commercial
breeding of fighting cocks, cockfighting and cockpit; fees of places of recreation which charge admission fees;
fees on billboards, signboards, neon signs and outdoor advertisements;
LGU CREDIT FINANCING
LGUs interested in applying for loans from lending institutions to finance proposed projects are required to secure
Certificate of Net Debt Service Ceiling and Borrowing Capacity (CNDSCBC) from the BLGF.
The Bureau of Local Government Finance and some of the country’s big banks signed a Memorandum of
Agreement to bolster credit financing of local government units through exchange and sharing of information. This
will not only hasten the preparatory and planning stage of loan application, but also produce a more relevant and
responsive purposes for the loans.
All provinces, cities, municipalities, and barangays may avail of this service but does not guarantee approval of loan
nor facilitation of loan release.
For NCR LGUs, applications must be lodged to BLGF Central Office. For other LGUs, applications shall be submitted
to their respective BLGF Regional Office.
Public Financial Management

What is Public Financial Management?
A public financial management (PFM) system is a set of rules and institutions, policies, and processes that
govern the use of public funds across all sectors, from revenue collection to monitoring of public expenditures.
PFM policies vary by country and can cover issues related to tax law, budget management, debt management,
subsidies, and state-owned enterprises. A well-functioning PFM system is critical to ensuring accountability and
efficiency in the use of public financial resources, while a weak PFM system can result in significant wastage of
scarce resources (Figure 1). PFM is particularly relevant to health financing, as most resources for health tend to
come from public budgets. In particular, PFM systems influence how much funding is available and allocated to
health, the effectiveness of spending on health, and the level of flexibility in use of health funds
There are three main steps in the budget cycle, a central component of every PFM system: budget formulation,
budget execution, and budget monitoring. The budget planning process usually involves collecting estimates
from all ministries and departments on the financial resources required to carry out their objectives, prioritizing
those needs, and then allocating funds across different areas based on prioritized needs and the budget ceiling,
which is usually set by the ministry of finance. Once a level of funding is confirmed, ministries and departments
receive funding in the following fiscal year to pay public or private providers for goods and services. Budget
monitoring ensures that ministries and other entities comply with laws and regulations, including filing financial
reports and audits and ensuring that correct financial controls are in place.
In the health sector, budget formulation and execution are ideally aimed at improving equity and access to high-
quality services for priority health areas, geographies, and populations. If the PFM system, which manages the
collection and flow of public funds, is not aligned with the health financing system, which raises
revenue, pools funds, and purchases goods and services specifically for health - health funds may not be
optimally used. For example, PFM policies may restrict whom the government can contract with to provide
health services, limiting the ability of the government to reach certain underserved populations. Or
a decentralized PFM system may be a barrier to instituting a health insurance scheme that pools funds at the
national level, which could perpetuate fragmentation in the health sector.

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regulatory fees and charges and local economic enterprises

LGU CREDIT FINANCING

Public Financial Management

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