MANILA, Philippines–Makati and San Juan, two of the country’s richest cities, have been tagged the best-performing local government units (LGUs) by fiscal authorities, who noted local officials’ efforts to fund projects out of their own respective pockets.
Unfortunately, most cities, which have more power to impose local taxes, continue to rely on state coffers. The country’s 144 cities on average get to generate only 30 percent of their respective revenues. To cover the rest of their expenditures requirements, most LGUs turn to the national government.
The Department of Finance (DOF) on Wednesday issued a new call to action to mayors with a new tax watch ad that brings to light the failure of cities to fund projects for their own citizens.
“When LGUs collect low revenues, they fail to maximize their own revenue generation capacity to spend on basic services for their people,” the new ad read.
The Binays of Makati were tagged the best performers. Makati’s local government revenue collections accounted for 92.6 percent of all its income last year, the tax watch showed. Makati was the top “mature” city, referring to LGUs that have been cities for more than 10 years.
Among the “young” cities, San Juan stood out in terms of local revenue collections. Three quarters, or 76 percent, of its income last year came from local collections.
Makati is host to the country’s main central business district, while San Juan shares the Ortigas business district with Quezon City and Mandaluyong.
Vice President Jejomar Binay’s son and namesake Jejomar Jr. sits as mayor of Makati, a city his father ran for two decades. Guia Gomez, the mother of incumbent Sen. Joseph Victor “JV” Ejercito, replaced her son as San Juan’s mayor in 2010. Ejercito is the son of convicted plunderer former President and now Manila Mayor Joseph Ejercito Estrada.
The DOF’s Bureau of Local Government Finance said cities should be able to collect their own revenues than towns.
“But most cities with more than 10 years of cityhood still rely less on their locally sourced income,” the ad said.
Guihulngan was the worst performer among young cities with just 3.1 percent of its income sourced from local taxes. Sipalay, where 3.5 percent of city hall’s income came from local taxes, was the worst among mature cities.