ADB OKs $26.5 million loan for Philippines

MANILA, Philippines — The Asian Development Bank (ADB) has approved a new $26.5 million loan for the Philippines to enable its local government units (LGUs) to boost revenues by adopting digital tools for real property tax valuation and collection.

The Manila-based multilateral yesterday said that the Local Governance Reform Project would help LGUs nationwide to improve real property tax collection by strengthening property valuation mechanisms, introducing new digital tools for transparent and accurate reporting, and updating tax maps and property valuation assessments.

Through the program, capacity development and knowledge partnerships will be carried out to help LGUs build teams of competent and professional local assessors.

“Local governments play a critical role in poverty reduction. Mobilizing local revenue in an efficient, equitable, and transparent manner is vital to local governments’ goal of delivering accessible, quality public services,” said Robert Boothe, ADB senior public management specialist for Southeast Asia.

“This new project will provide the digital tools, systems, and local staff training needed to help local governments raise revenue.”

The revenue reforms supported by the project are part of the government’s Comprehensive National Tax Reform Program.

Prior to these reforms, technical and institutional challenges had resulted in significant losses in real property tax collection by local governments.

Some estimates put forgone property tax collection as high as P30 billion ($600 million) from 2004 up to 2016.

Since 2006, ADB has supported the Philippines’ efforts to improve efficiency, accountability, and transparency in the financial management and service delivery of local government units.

In 2019, ADB approved a $300 million policy-based loan for the Local Governance Reform Program, aimed at helping the government create a legal and institutional framework for local revenue mobilization.

The new project will support the implementation of these policy reforms at the national and local levels.