January 19, 2021

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Philippine Local Government Units urged to adopt digital tools to improve services, revenue generation

Local Government Units (LGUs) have been called up to embrace the switch to digital technologies to vastly improve their delivery of frontline services and generate more revenues under the New Economy in the post-pandemic era.

Finance Secretary Carlos Dominguez III urged local executives start working with the national government in preparing for the seamless transfer of the additional devolved functions, services and facilities that they would have to assume (beginning 2022) with the implementation of the Supreme Court (SC) ruling on the far higher revenue allotment (IRA) share of LGUs.

Under the high court’s Mandanas doctrine, the IRA share of LGUs should come from all national taxes, as mandated under the 1991 Local Government Code, and not from just the taxes collected by the Bureau of Internal Revenue (BIR) within the respective jurisdictions of LGUs.

This expanded revenue coverage means the IRA share of LGUs should also include other taxes such as those collected by the Bureau of Customs (BOC). This sizable IRA increase for LGUs will let them pump-prime their respective local economies in the New Economy.

Technologies adopted should include processing of business registrations and the collection of local taxes. Investments in information technology will not only make for more responsive governance but it will also improve revenue generation of LGUs.

The national economy, after all, is the sum of all local economies. LGUs are at the frontline of serving vulnerable communities; they are also catalysts for building a new economy while the nation does it can to address the global health emergency.

“As we anticipate a new economy in the post-pandemic era, we strongly encourage our LGUs to adopt digital technologies to efficiently deliver frontline services,” said Dominguez in a webinar hosted by the Union of Local Government Authorities of the Philippines (ULAP).

ULAP organised the online dialogue with the Departments of Finance (DOF) and of Interior and Local Government (DILG) to tackle the recovery of local economies from the devastation wrought by the COVID-19 pandemic.

Under the Bayanihan to Recover as One Act (Bayanihan 2), Dominguez said LGUs can continue to count on several streams of support to restart their respective local economies and rescue businesses.

Dominguez said the national government is working closely with the Congress to swiftly pass several legislative imperatives vital to the country’s recovery from the pandemic. Both the BLGF and the Philippine Tax Academy (PTA) are also preparing online learning modules for local government treasurers and assessors.

Dominguez further said the government’s economic recovery strategy remains anchored on sustaining the ‘Build, Build, Build’ program, which covers infrastructure projects outside Metro Manila to immediately create jobs, encourage investments and increase economic activity outside the national capital region.

OpenGov Asia recently reported on the Philippine Department of Finance taking the lead in shielding GFIs and other agencies from cyber threats. A collaborative solution will be designed to shield respective systems from potential cybersecurity threats along with other possible risks and data breaches in the digital landscape.

National cyber resilience is of key importance as the world has become intensely dependent on e-markets, online trade, banking, remote working and the new normal which is becoming increasingly virtual.