The Bureau of Local Government Finance (BLGF) of the Department of Finance (DOF) is mandated toassist in the formulation and implementation of policies on local government revenue administrationand treasury and assessment operations. BLGF sits as a member of the PH-EITI TWG. A key concern that has been raised by local governments and communities hosting mining operations is the lack of comprehensive and disaggregated data on how much is due them as their share from the utilization of the country’s natural wealth. In response, the MSG has recommended improving reporting systems of local governments, and BLGF, in partnership with PH-EITI and DILG’s Philippine Poverty-Environment Initiative (PPEI), has taken action by developing the Environment and Natural Resources Data Management Tool (ENRDMT).
5 Ongoing Recommendations
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Recommendation Completion[insert text here]
Relevance to PH-EITI Objectives[insert text here]
DetailsPH-EITI Focal Person
Designation Office Contact Details |
Ongoing Recommendations
01. incorporate benchmarking/indexing capabilities in the enrdmt
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Full Recommendation
Enhance further the ENRDMT by incorporating benchmarking/indexing capabilities. The tool should be able to indicate how long it took for LGU shares to be released from the time the same was paid by the mining company. Benchmarking will give stakeholders a better appreciation of the speed and direction of improvements from the reforms PH-EITI has proposed/implemented. Background Problem and Effects Causes Relevant to PH-EITI Objectives Governance Systems and Sustainable Development Milestones [insert text here] |
Agency Updates
Currently, the ENRDMT system can provide the following items:
There is a continuous enhancement of the system and it can/will be made to automatically compute the time lag between when the national collecting agency received the payment from the extractive company and the date the LGU shares from that payment were released to the concerned LGUs. This ageing exercise can show comparisons across years and also benchmark against the time period stipulated in the 1991 LGC and various JMCs on the release of LGU shares from national wealth. In addition, the system can be enhanced to capture other dates of interest (e.g. the time periodforwhich the payment was made to the national collecting agency) Self-Assessed Status of Progress Significant Progress |
02. Devise a mechanism to present LGU expenditures of their share in national wealtH
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Full Recommendation
Devise a mechanism to present LGU expenditures of their share in national wealth. Background Problem and Effects Causes Relevant to PH-EITI Objectives Governance Systems and Sustainable Development Milestones [insert text here] |
Agency Updates
The mechanism that will allow the LGUs to report their expenditures funded by their shares in national wealth has already been identified in studies conducted under the Philippines Poverty Environment Initiative (PPEI). This is the creation of a Special Account in the General Fund (SAGF) in which LGUs would lodge their shares from National Wealth. There is already a draft Joint Memorandum Circular (JMC) by DBM, DOE, DENR, DILG and DOF on the Enhanced Guidelines and Procedures on the release of the shares of the LGUs in the proceeds from the development and utilization of the National Wealth. The draft JMC is expected to be issued before the end of 2018. It contains a provision whereby LGUs are to create a SAGF through the passage of a local ordinance. Funds in the SAGF may only be used for programs and projects consistent with Section 294 of the 1991 LGC. After the JMC has been issued, the ENRDMT will be enhanced so that LGUs can report what these programs and projects are. The major categories are development and livelihood projects and lowering the cost of electricity. The Nature of Expenses currently in the ENRDMT includes the following:
These can be used as sub-categories under development and livelihood projects, with the addition of Environment and Disaster Risk Management. Self-Assessed Status of Progress Significant Progress |
03. Conduct a study on tracking the national government/LGU spending of LGU SHARES FROM NATIONAL WEALTH
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Full Recommendation
Conduct a study on tracking the national government/LGU spending of extractive industry revenue, especially those earmarked for specific purposes. Background Problem and Effects Causes Relevant to PH-EITI Objectives Governance Systems and Sustainable Development Milestones [insert text here] |
Agency Updates
The direct payments of extractive companies to LGUs (e.g. local taxes) go to the General Fund of the LGUs and they basically have the autonomy to use these funds as they see fit. Expenditure tagging has been looked into in earlier studies including one under PPEI. Since that time, there has been growing awareness of the need for measures to combat climate change. Another study based on the earlier ones might be able to come up with more actionable results. Self-Assessed Status of Progress Significant Progress |
04. ESTABLISH SUBSIDIARY LEDGER FOR SHARE IN NATIONAL WEALTH AND TRUST FUND TO AVOID CO-MINGLING WITH THE GENERAL FUND
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Full Recommendation
It was recommended to have separate subsidiary ledger for Share in national wealth and trust fund for proper segregation and utilization to avoid co-mingling of the general fund and shares from national wealth. Background Problem and Effects Causes Relevant to PH-EITI Objectives Governance Systems and Sustainable Development Milestones [insert text here] |
Agency Updates
The draft JMC already indicates a separate subsidiary ledger for recording the share in national wealth and trust fund. Once issued, the BLGF shall issue a procedural guidelines for the treasurers. Self-Assessed Status of Progress Significant Progress |
05. issue policy guidelines on the reporting of real property tax remittances
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Full Recommendation
LGUs could explore the possibility of automating the certification of the amount of Share in national wealth to properly account the aforementioned and expedite the reporting process. Background Problem and Effects Causes Relevant to PH-EITI Objectives Governance Systems and Sustainable Development Milestones [insert text here] |
Agency Updates
As of the current version of the ENRDMT, there is no existing facility or module that automatically provide for a certification of the amount of share in national wealth to properly account the aforementioned and expedite the reporting process. This can be included in the future enhancement of the system. Self-Assessed Status of Progress Significant Progress |
Accomplished Recommendations
01. Issue policy guidelines on the reporting of real property tax remittances
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Full Recommendation
BLGF should issue policy guidelines on the reporting of real property tax remittances, including the need to disaggregate the amount to ensure accurate identification of collections. Background Problem and Effects Causes Relevant to PH-EITI Objectives Governance Systems and Sustainable Development Milestones [insert text here] |
Agency Updates
The policy issuance on the reporting of Real Property Tax Remittances can be found in the Local Treasury Operations Manual (LTOM). Self-Assessed Status of Progress |