THE Asian Development Bank (ADB) has extended a new loan to help local governments digitize their local property tax valuation and collection.
In a statement, the ADB said the $26.5-million loan will finance the Local Governance Reform Project (LGRP), which aims to adopt digital tools for transparent and accurate reporting of real property tax collection.
The loan will also be used to update tax maps and property valuation assessments, as well as boost the knowledge of local assessors through capacity development efforts.
“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 ADB Senior Public Management Specialist for Southeast Asia Robert Boothe. “This new project will provide the digital tools, systems and local staff training needed to help local governments raise revenue.”
The project also supports the Comprehensive National Tax Reform Program (CTRP). Prior to the reform, it was estimated that local governments lost P30 billion or $600 million in property tax collections between 2004 and 2016.
This is not the first loan to be extended for the LGRP. In 2019 the ADB approved a $300-million policy-based loan for the program to help 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.
The ADB said that since 2006, it has supported the Philippines’ efforts to improve efficiency, accountability and transparency in local governments’ financial management and service delivery.
With the new loan, the Philippines has secured a total of over $2.6 billion in ADB loans. This includes loans obtained to finance coronavirus 2019 (Covid-19)-related responses. Even prior to this new loan, the Philippines has already exceeded its record borrowing of $2.5 billion in 2019.
Earlier, the ADB said its lending to the Philippines is planned to reach a record high of $3.3 billion this year, with about half supporting the government’s infrastructure program.
This will likely include priority projects such as the South Commuter Railway, the Edsa Greenways Pedestrian Walkways, and the Angat Water Transmission Aqueduct 7, as well as initiatives to boost social protection, sustainable tourism, and capital market development.