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    Financing Philippine Local Government

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    Jaycee Tuala
    The document discusses local fiscal administration in the Philippines. It defines key fiscal terms and describes the principles and processes of local budgeting. The main agencies responsible for fiscal functions include Congress, the Department of Finance, the Budget Department, the Commission on Audit, the National Economic Development Authority, and the Bangko Sentral ng Pilipinas. They are tasked with revenue generation, fund management, budget preparation and oversight, and monetary policy. The Local Government Code of 1991 also established mechanisms for allocating internal revenue to local governments.

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    Financing Philippine Local Government

    Uploaded by

    Jaycee Tuala
    123 views37 pages
    The document discusses local fiscal administration in the Philippines. It defines key fiscal terms and describes the principles and processes of local budgeting. The main agencies responsible for fiscal functions include Congress, the Department of Finance, the Budget Department, the Commission on Audit, the National Economic Development Authority, and the Bangko Sentral ng Pilipinas. They are tasked with revenue generation, fund management, budget preparation and oversight, and monetary policy. The Local Government Code of 1991 also established mechanisms for allocating internal revenue to local governments.

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    finance budget of local government in the philippines

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    The document discusses local fiscal administration in the Philippines. It defines key fiscal terms and describes the principles and processes of local budgeting. The main agencies responsible for fiscal functions include Congress, the Department of Finance, the Budget Department, the Commission on Audit, the National Economic Development Authority, and the Bangko Sentral ng Pilipinas. They are tasked with revenue generation, fund management, budget preparation and oversight, and monetary policy. The Local Government Code of 1991 also established mechanisms for allocating internal revenue to local governments.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    123 views37 pages

    Financing Philippine Local Government

    Uploaded by

    Jaycee Tuala
    The document discusses local fiscal administration in the Philippines. It defines key fiscal terms and describes the principles and processes of local budgeting. The main agencies responsible for fiscal functions include Congress, the Department of Finance, the Budget Department, the Commission on Audit, the National Economic Development Authority, and the Bangko Sentral ng Pilipinas. They are tasked with revenue generation, fund management, budget preparation and oversight, and monetary policy. The Local Government Code of 1991 also established mechanisms for allocating internal revenue to local governments.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 37

    FINANCING PHILIPPINE

    LOCAL GOVERNMENT;
    (LOCAL FISCAL ADMINISTRATION)
    PRESENTED BY:
    MS. JUDY ANN C. GASPAR
    WHAT IS FISCAL?
     Fiscal
    derives from the Latin word “FISCUS”
    meaning BASKET or TREASURY.
     Itconcerned to public revenues (Taxation),
    public spending, debt and finance.
     Monetary relates to money on how it supplied
    and circulates in an economy.
    WHAT IS LOCAL FISCAL
    ADMINISTRATION?
    Refers to systems, structures,
    processes, officials, personnel and the
    policy environment governing
    intergovernmental, and inter-local
    fiscal relations.
     the giving & receipt of allotments and grants from the
    National Government (NG) to local government units
    (LGUs)
     allotment sharing between LGUs
     sharing of taxing powers between the national
    government (NG) and among LGUs
     policy on tax rates and structures
     revenue and expenditure planning
     revenue utilization & expenditure allocation
    monitoring & approval budgets, tax ordinances &
    other fiscal measures
    FUNDAMENTAL PRINCIPLES OF LOCAL
    FISCAL ADMINISTRATION
     No money shall be paid out of local treasury without
    an appropriation ordinance or law
     Local Government funds & monies shall be spent solely
    for public purposes
     Local revenue generated only from sources authorized
    by law or ordinance, & collection must be
    acknowledged properly
     Monies officially received in any capacity or occasion
    shall be accounted as local funds, unless otherwise
    provided by law
    FUNDAMENTAL PRINCIPLES OF LOCAL
    FISCAL ADMINISTRATION
     Trust funds in local treasury shall not be paid out except in
    fulfillment of purpose for which trust was created or funds
    received
     Accountable officers must be properly bonded
     LGs shall formulate sound financial plans, & local budgets
    shall be based on functions, activities, & projects, in terms
    of expected results
     Budget plans shall be harmonized with national
    development plans, goals & strategies to optimize resource
    utilization & avoid duplication in use of fiscal & physical
    resources
     Budgets shall operationalize approved local
    development plans
     LGUs shall ensure budgets incorporate
    requirements of component units equitably
     National planning shall be based on local
    planning to ensure consideration of local
    needs & aspirations
     LGUs shall endeavor to have a balanced
    budget in each fiscal year
    PHILIPPINE BUDGETARY PROCESS

    1. Budget 2. Budget 3. Budget


    Preparation Authorization Review

    4. Budget 5. Budget
    Execution Accountability
    BUDGET BILL TO COMMITTEES

    PRILIMINARY ACTIONS
    INTRODUCTION OF BILLS
    TYPE OF LEGISLATION
    BILL REFERRALS
    IN COMMITTEE
    COMMITTEE REPORTS
    CALENDARING FOR FLOOR DEBATES
    LOCAL GOVERNMENT CODE OF 1991

    The Local Government Code (LGC) of 1991 introduced


    a paradigm shift in relations between the national
    government and local government units by declaring it
    the policy of the State "that the territorial and
    political subdivisions of the State shall enjoy genuine
    and meaningful local autonomy to enable them to
    attain their fullest development as self-reliant
    communities and make them more effective partners
    in the attainment of national goals.
    INTERNAL REVENUE ALLOTMENT (IRA)

     Internal revenue allotment is the annual share


    of local governments out of the proceeds from
    national revenue taxes.
     It is estimated at forty percent (40%) of the
    actual collections of national internal revenue
    taxes during the third fiscal year preceding the
    current year (Section 284 of RA No. 7160)
    SECTION 285. Allocation to Local Government
    Units
    The share of local government units in the
    internal revenue allotment shall be allocated in
    the following manner:

     (a) Provinces – Twenty-three percent (23%)


     (b) Cities – Twenty-three percent (23%)
     (c) Municipalities – Thirty-four percent (34%)
     (d) Barangays – Twenty percent (20%).
    PROVIDED:
    that the share of each province, city and
    municipality shall be determined on the basis of
    the following formula:
     (a) Population – Fifty percent (50%)
     (b) Land Area – Twenty-five percent (25%)
     (c) Equal Sharing – Twenty-five percent (25%).
     The share of each LGU shall be released, without need
    of any further action, directly to the provincial, city,
    municipal or barangay treasurer, as the case may be, on
    a quarterly basis within five days after the end of each
    quarter, and which shall not be imposed by the National
    Government for whatever purpose (Sec. 286 Automatic
    Release of Shares)

     Each local government unit shall appropriate in its


    annual budget no less than twenty percent (20%) of its
    annual internal revenue allotment for development
    plans of local government units shall be furnished by the
    DILG (Sec. 287 Local Development Projects)
    SOURCES OF INCOME OF LGUS

    LGUs are given authority to levy their own taxes, fees and
    other sources of revenues, consistent with the basic policies in
    the Code.
     Local taxes includes real property tax; the business of
    printing and publication; sand, gravel and other quarry
    resources; delivery trucks of manufacturers and dealers; and
    the franchise tax, professional tax, amusement tax.
     Non-tax revenues are generated from the operation of
    economic enterprises, namely: market and slaughterhouses,
    waterworks, bus terminal, cemetery and gymnasium or
    sports center.
    BUDGETARY LIMITATIONS (SEC. 325)

     No salary rate higher than maximum fixed for


    position
     No appropriations for salary increase of officials &
    employees
     Abolition & creation of positions must be in
    accordance with Code & Civil Service law, rules &
    regulations
     Occupied plantilla positions
    (career) must be covered by
    adequate appropriations
    No reclassification of positions
    except when position is vacant
    THANK YOU SO
    MUCH 
    THE PRINCIPAL
    AGENCIES TASKED
    WITH FISCAL
    FUNCTIONS:
    1. CONGRESS (LOWER HOUSE)

     responsible for revenue and expenditure


    policies.
     Aside from having its concurrence on every bill in
    order to be passed for the President’s signature
    to become a law, the House of Representatives
    has the power to impeach certain officials, and
    all money bills must originate from the lower
    house
     1.1 (HOUSE OF REPRESENTATIVES OFFICIALS)
     is the fourth highest official in the Philippines
    government.
     Signs all acts, resolutions, memorials, writs, warrants
    and subpoenas issued by or upon order of the House
     1.2 (DEPUTY SPEAKERS)
     Assumes the duties and powers of the Speaker when he
    is absent or incapacitated.
     1.3 (MAJORITY LEADER)
     The Majority Leader is elected in a party caucus of the
    majority ruling party. His primary function, aside from being
    the spokesman of the majority party, is to direct the
    deliberations on the floor.
     1.4 (MINORITY LEADER)
     The Minority Leader is the acknowledged spokesman of the
    minority party in the House.
     1.5 (SECRETARY GENERAL)
     Notes all questions of order together with the decisions
    thereon;
     Completes the printing and distribution of the Records of the
    House;
     Acts as the custodian of the property and records of the House
    and all other government property in its premises;
     1.6 (SERGEANT-AT-ARMS)
     Enforces House Rules;
     Protects the lives of Officers and Members of the House, its
    personnel and guests as well as properties found therein.
    2. DEPARTMENT OF FINANCE

     Revenue generation and collection


     Fund custody
     Disbursements
     Keeping of accounts
    2.1 (BUREAU OF INTERNAL REVENUE)

     Comprehend the assessment and collection of all national


    internal revenue taxes, fees and charges and the
    enforcement of all forfeitures, penalties, and fines
    connected therewith.
    2.2

     The prevention and suppression of smuggling and


    other frauds upon the customs
    2.3 (BUREAU OF THE TREASURY)

    Mandate (Under executive order no. 449)


     assist in the formulation of policies in borrowing,
    investment and capital market development
     Assist in the preparation of by the government
    agencies concerned of an annual program for
    revenue and expenditure targets, borrowing levels
    and cash balances of the national government
    3.

     Accountable for carrying out the president’s responsibility


    of preparing the budget
     Formulate and implement the national budget and
    ensuring the efficient and sound utilization of government
    resources to achieve the country’s development
    objectives
    4. COMMISSION ON AUDIT

     Conducts fund and performance audit to see it that


    expenditures are in accordance with the appropriation law
    approved.
     Promulgate accounting and auditing rules and regulations
    including those for the prevention and disallowance of
    irregular, unnecessary, excessive, extravagant or
    unconscionable expenditures, or uses of government funds
    and properties
    5. NATIONAL ECONOMIC AND
    DEVELOPMENT AUTHORITY
     Provides high-level advice to policymakers in congress
    and executive branch
     Review, evaluation, and monitoring of infrastructure
    projects identified under the comprehensive and
    integrated infrastructure program (CIIP) consistent with
    the government’s thrust of increasing investment spending
    for the growing demand on quality infrastructure facilities
    6. BANGKO SENTRAL NG PILIPINAS
     Provides policy directions in the areas of money, banking
    and credit. It supervises operations of banks and exercises
    regulatory powers over non-bank financial.
     Formulates and implements monetary policy aimed at
    influencing money supply consistent with its primary
    objective to maintain price stability
     The BSP has the exclusive power to issue the national
    currency. All notes and coins issued by the BSP are fully
    guaranteed by the Government and are considered legal
    tender for all private and public debts.
    7. EXTERNAL FORCES
    A. International Monetary Fund
     Ensure the stability of the international monetary
    system
     Provide loans to member countries experiencing
    actual or potential balance of payments problems
     Seeks to build on synergies between the technical
    assistance and training to maximize their
    effectiveness
    B.

     Strengthenspublic financial management,


    improves fiscal transparency and financial
    accountability, and supports greater citizen
    demand for government accountability
    C. ASIAN DEVELOPMENT BANK

     ADB aims to focus support in the areas of sustainable and


    climate resilient infrastructure, good governance and
    finance, employment and education, and regional
    integration.
     ADB is one of the country’s largest sources of official
    development assistance, with average annual lending of
    $745 million in the past 10 years.
    THANK YOU SO
    MUCH 
    FISCAL CONTROL MECHANISMS

    Prevent misappropriation of funds requires


    review and approval by the administrative
    official of the line or operating agency, of all
    requests for money releases and budgetary
    allotments, vouchers and similar papers before
    payments are made so that expenditures are in
    accordance with policy and law and not
    irregular,
    REPUBLIC ACT NO 7160 SEC. 354.
    ADMINISTRATIVE ISSUANCES; BUDGET
    OPERATIONS MANUAL.
     the secretary of budget and management jointly
    with the chairman of the commission on audit
    shall, within one (1) year from the effectivity of
    this code, promulgate a budget operations manual
    for local government units to improve and
    systematize methods, techniques, and procedures
    employed in budget preparation, authorization,
    execution, and accountability.

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