The Bureau of Local Government Finance (BLGF) has set the local revenue collection targets of all provincial, city, and municipal treasurers at Php223.90 Billion for Fiscal Year (FY) 2021.
Due to the Covid-19 pandemic and the slowdown in business operations in FY2020, which is the base year for assessments of most local taxes for FY2021, the initial revenue target is 30 percent lower than the original medium-term program of Php321.60 Billion.
The initial aggregate collection performance target of local treasurers will come from cities at Php165.20 Billion, Php 32.23 Billion from provinces, and Php26.47 Billion from municipalities.
By type of imposition, Php 97.75 Billion or 44 percent of the local revenue target will come from local business tax (LBT) and other taxes, Php 76.03 Billion or 34 percent from real property tax (RPT) and special education fund, Php29.76 Billion or 13 percent from regulatory fees and user charges, and Php20.35 Billion or 9 percent from receipts from operations of local economic enterprise.
By source, nearly half of the own-source revenues will come from National Capital Region (NCR) at Php102.07 Billion (46 percent), followed by Region IV-A and Region III, with Php 34.14 Billion (15 percent) and Php19.89 Billion (9 percent), respectively.
The regional breakdown and sources of the FY2021 local collection target are provided, as follows:
|Region||Real Property Tax||Local Business Tax and Other Tax||Regulatory Fees and User Charges||Receipts from Economic Enterprise||Total Local Revenue Target|
|Region XIII (CARAGA)||0.55||0.95||0.71||0.64||2.86|
*in Php Billion
In setting the adjusted performance targets for local treasurers in FY2020 and FY2021, the BLGF considered the effects of the Covid-19 crisis on the revenue generation capacities of the LGUs, and used the National Government’s economic projections due to the pandemic.
In FY2020, the programmed revenue target of Php307.08 Billion for local treasurers was adjusted by the BLGF to Php193.04 Billion, and LGUs managed to surpass this target in Q3 FY2020, with the easing of community quarantine guidelines, resumption of business operations, the extension of payment deadlines, and adoption of online and alternative payment facilities, among others.
Revenues of LGUs for FY2021 are projected to be 7 percent or Php17.49 Billion lower than estimated full-year FY2020 collections of Php241.39 Billion.
The annual setting of revenue targets is part of the administrative and technical supervision of the Department of Finance (DOF), through the BLGF, over local treasurers, in line with the Philippine Development Plan (PDP) 2017-2022 and DOF Department Order No. 006.2015.
The BLGF has already issued the initial targets for provincial, city, and municipal treasurers through the 15 BLGF Regional Offices, and local treasurers are given until 28 February 2021 to request for adjustment in revenue targets as a result of new local legislation adjusting the rates of taxes, fees, and charges, closure of businesses, windfall collections from the previous year that cannot be collected anymore in the current year, reassessment of properties due to calamities, tax relief programs, among others, subject to validation by the BLGF.
As the country’s economy further recover from the impact of the Covid-19 crisis, the BLGF will update the final performance commitments of local treasurers by second half of the year.