The Philippines and the Asian Development Bank signed an agreement for a $26.5-million loan to improve the capacity of local government units across the country to raise revenues by instituting reforms in local property valuation and tax collection.
Finance Secretary Carlos Dominguez III signed the loan for the Local Governance Reform Project on behalf of the Philippine government. ADB country director for the Philippines Kelly Bird signed on behalf of the multilateral lending institution.
Dominguez thanked the ADB for continuing assistance to the government’s efforts to improve the financial management and revenue-generating capabilities of LGUs which the institution has been supporting since 2006.
“This financial assistance from the ADB for the LGRP will help LGUs close the digital divide in their respective localities as they pursue property valuation and tax reforms to generate more revenues, in step with President Duterte’s goal to modernize Philippine taxation and spell greater fiscal autonomy for our local governments,” Dominguez said.
Dominguez said the LGRP aimed to improve the capability of LGUs in assessing and appraising property values to enable them to raise more revenues from real property taxes.
Among the goals of the project is the use of digital technology to implement a property valuation database and information system.
The LGRP is also expected to improve the capacity of the Bureau of Local Government Finance in exercising administrative supervision and oversight functions over the treasury and assessment operations of LGUs.
The BLGF, an attached agency of the Department of Finance, is tasked to assist in the formulation and implementation of policies on LGU revenue administration and fund management.
Professionalizing the ranks of licensed property appraisers and assessors and aligning local property valuation benchmarks to international standards are also among the expected outputs of the project.
The total project cost of the LGRP is $29.8 million, of which $26.5 million will be funded by the ADB and the remaining amount to be financed by the government.
The ADB loan for the project, which is expected to be effective this month, carries a 28-year maturity period, inclusive of a nine-year grace period.
The ADB approved a $300-million policy-based loan for the LGRP last year.
