Financing Philippine Local

Governments
Presented by:
Berlin I Allan
 OVERVIEW

• Local Fiscal Administration

a. Supervising Authority
b. Fiscal Officers
• Budgeting and Fiscal Management
a. Local budgeting Process
b. Budgeting Problems and Issues
LOCAL GOVERNMENTS’
FISCAL STRUCTURE
• Fund Structure
• Major Sources of Revenues
1. National Allotment and Aid
a. Regular Allotment
b. Revenue from National Aid fund
2. Local Levies
a. Real Property Tax
b. Taxes, Fees and charges authorized
under PD 231
• Other Sources of Revenues
Local Fiscal Administration
A. Supervising Authority
As provide under PD 477, the Ministry of Finance shall
exercise general supervisions over the financial affairs of
the local governments. It performs the ff functions:
a. Formulates and executes fiscal policies that will
promote the financial stability and growth of local
governments;
b. Provides the local governments with policy
guidelines in the preparation and adoption of sound
financial plans and reviews the local budgets in order to
enhance the maximum utilization of local funds and
resources.
c. Adopts and enforces the necessary measures that
will improve local treasury operations and foster effective
financial management at the local levels and;
d. Ensures the proper use, custody and safe
B. Fiscal Officers
The officials in charge of the
collection and disbursement of the
local governments are the provincial
or city treasurer, the administration
deputies, municipal or municipal
district treasurers and the assistant
municipal district treasurers. The
following are the specific
responsibilities of these officials:
1. Provincial City Treasurer- the chief
financial officer of the local
government. He is appointed by the
president upon the
recommendation of the Minister of
Finance
2. Sub-Provincial Treasurer- performs
duties and functions that are
designed to him by the Provincial
Treasurer in accordance with the
laws and regulations.
3. Assistant Provincial or City Treasurer-
assists the provincial or city treasurer and
performs such other duties as the latter
may assign to him. He has the authority to
administer oaths concerning notices and
notifications to those delinquent in the
payment of the real property tax.
4. Administrative Deputy
5. Assistant Municipal or Municipal District
Treasurer- assists the municipal district
treasurer and performs such other duties
as the latter may assign to him.
BUDGET AND FISCAL
MANAGEMENT
(a). Preparation.
The head of the offices and the treasurers of the local
governments submit to the local executive their
expenditures proposals and budget proposals, respectively,
Using these as hases, the Chief Executive prepares the
budget for the ensuing fiscal year setting forth the following
.
1. estimates all income certified collectibles by the
treasurer concerned ; and
2. the total appropriation covering.
a. the current operating expenditures, and
b. capital outlays.
(b) Legislation
On or before the end of the fiscal year, the
local board or council approves through the
enactment of an appropriation ordinance the
annual budget for each type of funds that goes to
the local government units for the ensuing fiscal
year on the basis of the statement of the certified
estimated income and budget proposals
submitted by the local chief executive.
In case of cities, the budget enacted by the
local board or council required the approval of the
majority of the members thereof.
The Summary of the board or council
furnishes the local treasuries with atleast 3 copies
of the approved appropriation ordinance within
10 days after its approval. In case of provinces or
cities, the local auditor is also furnished with the
copies.
(c) Effectivity
The approved annual budget takes
effect at the beginning of the fiscal year,
On the other hand , the supplemental
budget takes effect upon its approval or
on the date set for its effectivity.
(d) Changes in budget and Failure to
Enact an Annual Budget
Changes in annual budget should be
made within the fiscal year by way of
supplemental budget which should be
enacted in the same manner as the
annual budget but not more than once a
month, except for additional supplemental
budgets in case of emergency.
(e) Budgetary Requirements
The budget of provinces, cites and municipalities for
any fiscal years are required to comply with the following
specifications :
a. The aggregate amount appropriated shall not
exceed the estimated income certified collected by the
local treasurer

b. Full provisions shall be made for all statutory and

contractual obligations of the local government concerned
;
c. Twenty per cent of the national internal revenue
allotment accruing to the general fund of the local
government shall be appropriated for developing projects
or activities;
d. Aids to legally constituted barrios shall be provided
in amount not exceeding P 500.00 per barrio; and
e Two percent of the estimated revenue from the
regular sources shall be set up as a yearly unappropriated
reserved to cover unforeseen. expenditures arising from
the occurence of natural calamities or financial dislocation
on account thereof.
(g) Duration of Appropriations
Appropriations for ordinary
administrative purposes terminates within
fiscal year and all unexpected balances
reverts to 30th of June of each year to
become unappropriated account by way of
special budget.
(h) Barrio Budget
Prepared by the barangay captains and
is submitted to the barrio council for
approval, not later than May 16 of the year.
If approved by the council through
appropriations ordinance, it takes into
effect at the beginning of the fiscal year.
(i) Disbursement of Appropriations for
Development Projects
Appropriations for development
projects funded from 20% of the
annual internal revenue allotment of
the local government and from the
barrio development fund is restricted
in the sense that they could be
disbursed only after the corresponding
work programs are reviewed by the
Minister of Local Government.
A. Budgeting Problems and Issues
(a) Fund Transfer
(b) Supplemental Budgeting
(c) Capital Budgeting
(d) Budget Reviews and Financial
Control