ADB OKs $26.5M loan to plug leaks in local property tax take

MANILA, Philippines — The Asian Development Bank (ADB) has greenlighted a $26.5-million loan (over P1.3 billion) so local governments in the Philippines can assess property taxes digitally.

“The Local Governance Reform Project will help local government units (LGUs) improve real property tax collection by strengthening property valuation mechanisms, introducing new digital tools for transparent and accurate reporting, and updating tax maps and property valuation assessments. It will help LGUs build a cadre of competent, professional local assessors through capacity development and knowledge partnerships,” the ADB said in a statement Monday.

The ADB said this project loan will support the Duterte administration’s comprehensive tax reform program, as a pending package in Congress was the real property valuation reform bill.

“Prior to these reforms, technical and institutional challenges had resulted in significant losses in real property tax collection by local governments. Some estimates put foregone property tax collection as high as P30 billion ($600 million) from 2004 to 2016,” the ADB said.

“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. This new project will provide the digital tools, systems, and local staff training needed to help local governments raise revenue,” ADB senior public management specialist for Southeast Asia Robert Boothe said.

This newest loan formed part of the ADB’s 2020 pipeline of policy-based program and project loans, which also included the $400-million Capital Market Generated Infrastructure Financing (Subprogram 1); $400-million Competitive and Inclusive Agriculture Development Program, (Subprogram 1); $500-million Disaster Resilience Improvement Program; $500-million Expanded Social Assistance Program; and $300-million Inclusive Finance Development Program (Subprogram 2).

For infrastructure, ADB financing scheduled for approval this year included $1.2 billion for the South Commuter Railway Project; $130 million for the Edsa Greenways Project; and $126 million for the Angat Water Transmission Improvement Project.

As for COVID-19 response, the ADB already gave its go-ahead for $2.1 billion in budgetary support financing, on top of $8 million in grant assistance as of June 4, Department of Finance (DOF) data showed.

EDV