DOF orders LGU treasurers to report COVID-19 impact on local coffers
MANILA, Philippines – The Department of Finance (DOF) has ordered local treasurers to report how the COVID-19 pandemic impacted on local government units’ (LGUs) coffers so far.
Through the DOF-attached Bureau of Local Government Finance (BLGF), all provincial, city and municipal treasurers and assessors were required to upload their reports in the LGU integrated financial tools (Lift) and environment and natural resources data management tool (ENRDMT) systems for the first quarter of 2020 on or before June 30.
Submission of similar reports covering the fourth quarter of 2019 was also given a deadline of June 15 under the BLGF’s Memorandum Circular No. 11-2020 issued on May 20.
These deadlines were imposed “in accordance with the reporting mandates for all provinces, cities and municipalities under existing policies, and in order to further evaluate the fiscal capacities of LGUs relative to the COVID-19 crisis,” BLGF Executive Director Niño Raymond B. Alvina said in the memorandum circular.
“Compliance herewith shall not hinder the operations of concerned offices in undertaking COVID-19 response activities, and the community quarantine directives issued by proper authorities shall be strictly followed,” Alvina added.
The Inquirer earlier reported that the country’s 1,488 municipalities were struggling with meager and depleting budgets while they responded to COVID-19.
“The COVID-19 pandemic stretching to two months to date has grossly impacted municipal LGUs throughout the country. Our municipal mayors are weary and worried of the immediate and long-term health, economic, and social consequences of this health crisis,” League of Municipalities of the Philippines (LMP) national president Luis “Chavit” Singson told the Inquirer last week.
“With very limited human and logistical resources, local funds are also dwindling fast. Our municipal mayors have to be creatively resourceful in order to more efficiently manage the pandemic and respond to the needs of their constituents,” according to Singson, who’s currently the mayor of Narvacan town in Ilocos Sur, where he used to be provincial governor.
It did not help that the DOF had extended the payment of all local taxes, charges and fees that were due during the COVID-19 lockdown to a uniform deadline—until June 25.
“The delay in payments will affect the projected cash flow of LGUs and will require them to adjust their funding priorities for this year,” Alvina earlier told the Inquirer.
For 2020, provincial, city and municipal treasurers nationwide had been tasked to collect a total of P307.1 billion in revenues—P126.2 billion in local business taxes; P107.2 billion in real property taxes; P43.9 billion in fees and charges; and P29.8 billion in receipts from operations of LGUs’ economic enterprises.
Due to the pandemic, the BLGF was analyzing the fiscal position of LGUs and if projected 2020 collections were still attainable, Alvina had said.
To offset these delayed local tax payments, Alvina had said “LGUs will have to realign their budgets, use their savings/surplus if they have, and adopt austerity measures.”
“It’s only the local revenues that would be affected in case they will not be able to collect the remaining 50-60 percent collectibles for the second to fourth quarters. This will be felt significantly by urban LGUs that rely more on local revenues than national transfers. Borrowing is also an option, depending on LGU capacity, for urgent financing requirements,” according to Alvina.
Alvina had said “it’s a case-to-case basis for now on how our local governments are coping” with the pandemic thus far.
“It depends on the scale of their expenditure requirements due to COVID-19, and their fiscal position relative to their available funds from previous years/savings, the local disaster risk reduction and management fund (LDRRMF) and 20-percent internal revenue allotment (IRA) for 2020 that they could program for COVID-19, the Bayanihan grants they have received in April, receipts from other grants or donations if any, and other realignments they could introduce on their fiscal year 2020 budget. That’s why LGUs’ relief measures and strategies differ, and some can afford to give additional amelioration programs out of their own funds,” Alvina had noted.
Last month, the Department of Budget and Management (DBM) released P6.2 billion to the country’s 82 provinces, equivalent to one-half month of their IRA, on top of a larger P30.8 billion to 146 cities and 1,488 municipalities, equivalent to one-month IRA.
These Bayanihan grants can be used to buy personal protective equipment (PPE), testing kits, medicines and vitamins, hospital equipment and supplies, food assistance and relief goods, among other COVID-19-related expenses.
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