DOF urges LGUs: Speed up efforts to digitalize operations

MANILA, Philippines — The Department of Finance (DOF) is calling on local government units (LGUs) to fast-track their digitalization efforts in a bid to improve economic growth.

Finance Secretary Benjamin Diokno said LGUs should fast-track the digitalization of their respective bureaucracies, especially in local revenue collection.

Doing so would in turn boost overall tax effort, improve the ease of doing business, and eliminate discretion.

Diokno emphasized that building up the fiscal health of LGUs is critical to the administration’s bid for a faster and more inclusive economic growth.

“Our LGUs stand at the frontlines of national development. Now more than ever, the people will rely on LGUs as the country moves toward a sustainable recovery and inclusive growth,” Diokno said.

The Finance chief also emphasized the importance of sound local government finance as the revenue share of LGUs has increased with the implementation of the Mandanas Ruling.

The Mandanas Ruling effectively increased the amount of resources that are given to LGUs.

The ruling favored LGUs, which means that all national taxes should be included in computing the tax base in determining the allocation for LGUs.

Diokno said LGUs are now primarily responsible and accountable for the provision of basic services and facilities fully devolved to LGUs.

“With this expanded mandate, you must lead your local governments in improving revenue collection and resource mobilization to attain fiscal sustainability and genuine local autonomy,” he said.

Since the pandemic, LGUs assumed an expanded role in the delivery of public services resulting in a significant impact on the fiscal resources of many localities.

To strengthen the capacities of LGUs in the area of local treasury and assessment operations, the DOF’s Bureau of Local Government Finance is providing LGUs with capacity building and development interventions.

For one, the BLGF is conducting the Standardized Examination and Assessment for Local Treasury Service program which aims to professionalize and modernize the local government treasury service.