The Bureau of Local Government Finance (BLGF) reported an increase in the 2020 current operating income in provinces, cities, and municipalities, that is mostly attributed to an increase in the external revenue sources of local government units (LGUs).
“The total current operating income of LGUs rose from ₱738.54 billion in 2019 to ₱825.2 billion in 2020, representing an increase of ₱86.66 billion or 12%, as a result of their higher internal revenue allotment (IRA) and improved local tax collections,” according to a media release on Tuesday (July 20).
An 18% growth in the external revenue sources of LGUs, including the IRA of ₱509.65 billion, led the said increase in 2020.
BLGF Executive Director Niño Raymond Alvina said that although local tax collections increased in 2020 to ₱189.86 billion from ₱183.46 billion in 2019, their share in the current operating income of LGUs declined to 23% in 2020 from 25% in 2019.
The share of non-tax revenues also decreased to 7% compared to 10% in 2019.
“In aggregate terms, LGUs’ dependence on external sources in Fiscal Year (FY) 2020 reached 70%… On IRA dependence, provinces showed the highest dependency ratio at 78%, followed by municipalities (74%), and cities (42%) in FY 2020,” Alvina said.
Besides the IRA, the other external revenue sources of LGUs are other transfers from the national government (NG), which amounted to ₱63.9 billion in 2020.
The National Capital Region (NCR) posted the highest locally sourced revenue (LSR) collections – 42% of the total LSR of all LGUs.
Aside from the NCR, only Eastern Visayas (VIII), Zamboanga Peninsula (IX), Northern Mindanao (X), Davao Region (XI), Soccsksargen (XII), and Caraga (XIII) posted positive growth rates in LSR collections, while mostly all other regions in Luzon and the Visayas registered declines, Alvina said.
For 2021, the BLGF is actively monitoring the LGUs’ quarterly fiscal performance as it expects lower revenues this year, since the local taxes will be based on the gross receipts of business establishments in 2020 when the COVID-19 pandemic started. (DOF) / CF – rir
