The Department of Finance (DOF) has challenged the unit overseeing local treasury financing and revenue administration to continue developing innovative programs to strengthen the fiscal autonomy of local government units (LGUs) and further wean them off their dependence on the national government for fund support.
Finance Undersecretary Antonette Tionko said the Bureau of Local Government Finance (BLGF) should remain at the forefront of efforts to promote fiscal decentralization, given that, in some cases, LGUs rely on the internal revenue allotment to fund 99 percent of their operations and programs.
According to Tionko, local revenues, on the average, only account for less than 1 percent of the country’s GDP.
“There is a much-needed balance here: LGUs must build their revenue base to fund their projects, and the effect on the national government’s fiscal space as a result of continued dependence of LGUs on national transfers,” Tionko said at the 30th anniversary of the bureau.
An attached agency to the DOF, the BGLF is mandated to assist LGUs in formulating fund-management policies and programs to improve collection-enforcement mechanisms and credit-utilization schemes.