Republic of the Philippines

WESTERN PHILIPPINES UNIVERSITY

The Impacts of Poor Revenue Generation on the Development of Local

Government Areas in the Philippines

A Term Paper for the Subject

PA-201 Theory and Practices of Public Administration
 INTRODUCTION

Background of the Study

All countries aspire to become a country where people will be able to have sustainable

development. In today’s modern day, it is vital that a country like the Philippines adhere and

compete to global industrialization. One way to be competitive is to attract international

investors which will create jobs for its countrymen and help elevate the standard of living of

each Filipinos. An open communication is one key among the many to particularly know what

the general public needs. This communication is made easier because of the Local

Government Units (LGUs).

Section 15 of Republic Act 7160, otherwise known as the Local Government Code, defines

a local government unit as a body politic and corporate endowed with powers to be exercised

by it in conformity with law. As such, it performs dual functions, governmental and

proprietary. Governmental functions are those that concern the health, safety and the

advancement of the public good or welfare as affecting the public generally. Proprietary

functions are those that seek to obtain special corporate benefits or earn pecuniary profit and

intended for private advantage and benefit. When exercising governmental powers and

performing governmental duties, an LGU is an agency of the national government. When

engaged in corporate activities, it acts as an agent of the community in the administration of

local affairs. (https://bataspinoy.wordpress.com/2011/04/05/definition-and-functions-of-lgu/)

Table 1.1 Regional Summary Number of Provinces, Cities, Municipalities and Barangays,

by Region as of September 30, 2018

Source: dilg.gov.ph/facts-and-figures

In order to make progress and development in the country, the Philippines has to make

an income to fund its projects such as infrastructure, education, health and more. Here in the

Philippines, it’s been making its revenue mostly through the taxes paid by its citizens. The

Bureau of Internal Revenue (BIR) is the government bureau seeing through that taxes are

being paid and collected. It is important that these revenues are collected because it will be

the means of the government to run the country.

Local government revenues are derived from two major sources: local and external.

Revenue sourced locally include those coming from property taxes, business taxes and other

locally imposed taxes as well as non-tax revenues from operating and miscellaneous income

and capital revenues. On the other hand, external sources include shares from the internal

revenue allotment (IRA), shares from the proceeds derived from development and utilization

of national wealth, other are from the national taxes provided special laws, grants and aids.

(NTRC Tax Research journal vol XX6)

Table 1. Taxing Powers / Internal Sources of LGU Revenues

Source: Revised from the Module prepared by: Dr. Jocelyn C. Cuaresma, PhD Presented by: Faith I. Bacon,
LOCAL REVENUE GENERATION, Orientation Training on People’s Public Finance: Empowering Citizens in
Asserting Rights to Public Finance

Figure 1.1 Current Revenue Account Composition (in billion pesos)

Source: COA, 2017 Financial Report

This figure shows that IRA is the top source revenue for LGUs CY 2017.
Though there are numbers of options where the local government units may be able to

earn for itself in order to build a sustainable, adequate place for its constituents, it seems that

here in the Philippines there are still so many Filipinos who does not know about the
importance of paying taxes as well as cooperating with the local government units regarding

its revenue generation.

In addition, if there are so many options for the local government units to generate

revenues, why does poor local revenue generation is still present? This research aims to unveil

the impacts of poor revenue generation of local government units in the development of local

government areas.

Statement of the Problem

This research aims the following:

1. Identify the Local Government Units having less than 50% generated revenue.

2. List down what will be the impacts of poor revenue generation of the local

government units in the development of local government areas.

Objectives of the Study

a) To provide additional information in terms of revenue generation of LGUs

b) To help people be aware on the importance of high local revenue generation

c) To identify the impacts on the development if a local government unit has poor

revenue generation

Significance of the study

Information is vital in today’s society. Many are emerged with the information technology

that there are instances that people especially youngsters forgets to participate in government

issues. Hopefully, this research will be able to help out and be a simple eye-opener for those

interested especially in terms of local revenue generation.

Definition of Terms

COA – Commission on Audit

DILG – Department of Interior and Local Government

DOF – Department of Finance

IRA – Internal Revenue Allotment

Revenue - could be defined as the funds generated by the government to finance its

activities. In other words revenue is the total fund generated by to meet their

expenditure for a fiscal year. This refers also to the grand total of money of

income received from the source of which expenses are incurred. Revenue could

be internal or external revenue.

Generation- the process of sourcing revenue for the local government in carryout their aim

and objectives.

Tax – a mandatory financial charge or some other type of levy imposed upon a

taxpayer by a governmental organization in order to fund various public

expenditures.

Development- the process by which people create and recreate themselves and their life

circumstances to realize higher levels of civilization in accordance with their own

choice and values.

REVIEW OF RELATED LITERATURE

Local government is faced with varieties of difficulties to source adequate revenue from

federal government, state government and internally generated revenue; such problems are

cogwheel to the smooth running of local government administration. Thus, the objective of

the research was to analyze the extent to which revenue generation had affected the
development of the selected local Governments. The researcher used both primary and

secondary methods of data collection to generate the needed data. The data obtained through

secondary data were analyzed using simple least square regression method (spss version17).

The following were some of the findings which included the following; there is a significant

relationship between revenue generated and developmental effort of government, poor

development of the areas, lack of basic social amenities to the rural people and lack of revenue

to maintain the existing infrastructures. The researcher therefore recommended that the local

government should provide basic amenities of high quality. By doing so, the people’s interest

would be geared towards giving their maximum support to the local government which would

lead to the development of the rural area. (Revenue Generation: It’s Impact on Government

Developmental Effort (A Study of Selected Local Council in Kogi

East Senatorial District), Kogi State University, Anyigba Kogi State, Nigeria by Edogbanya,

Adejoh & Mr. Ja’afaru G. Sule, Year 2013)

Every local jurisdiction has its unique economic, social and physical characteristics and

its historical tradition which are better understood by its people. Thus, the Local

Government Areas are created to provide the services which the Federal and State

Governments cannot easily undertake due to their remoteness from the local communities.

Therefore, the concept of local government is to bring governance closer to the people at the

grassroots, with the aim of caring for the socio-economic and development needs of local

populace. Over the years, it has been observed that massive rural-urban migration and over

congestion are heating up lives in the cities. Others have contended that Local Governments

are docile in terms of aggressive revenue collection to augment allocations from the

federation account which they get on monthly basis. Yet, others hinged Local Governments’

abysmal revenue generation on dishonesty on the part of council revenue collectors, who, in

most cases, misappropriate collections made on behalf of the council. In the face of these

charges or allegations, it has become pertinent to investigate why Local Governments in the

country have poor revenue generation efforts. The thrust of this paper therefore is to find

lasting solutions to the financial problems hindering local governments in Nigeria, most

especially strategies to ameliorate the over-dependence on Federal Government allocation for

the up-keep of the Local Government. The paper also recommends amongst others, that any

official who divert local government funds to their personal purse should be punished in

accordance with the law of the land, use of council staff for revenue collections should be

encouraged and stop using agents who are not council staff. The paper concludes that

undoubtedly, for Local Governments to be able to perform these functions creditably, they

need sufficient funds. (AFRREV IJAH an International Journal of Arts and Humanities Bahir

Dar, Ethiopia Vol. 2 (3), S/No 7, July, 2013: 192-209)

Revenue generation is the nucleus and the path to modern development. Thus, this study

assessed the effect of internal revenue generation on infrastructural development. The

research methodology entailed the use of survey research design and purposive sampling

method to select respondents from Lagos State Inland Revenue Office. Questionnaires and

statistical data were instruments used for the study. Descriptive and inferential statistics were

the statistical tool used for the analysis. The descriptive statistics involves the use of simple

percentages while the inferential statistics involved the use of Spearman’s Rank, which is to

show the direction of relationship between variables in the study and to show the scale for the

data that is interval. Two hypotheses were formulated and the Spearman’s rank correlation

analysis was used to test the relationship between internally generated revenue and

infrastructural development. The result showed that there is a positive relationship between

internally generated revenue and infrastructural development. The study also revealed the

various methods of generating internal revenue, which are the enforcement of tax personnel,

contribution, and creating awareness to the public. The findings of the study however show

that revenue administration agencies need to be reviewed to generate more revenue in the

country. (The Effect of Internal Revenue Generation on Infrastructural Development. A study

of Lagos State Internal Revenue

Service by Adesoji Adetunji Adenugba (MR) and Chike Faith Ogechi, Vol. 3 (2) May 2013)

Revenue Sources

1. Local Sources

a) Revenues from Taxes

 b) Non-tax revenues

c) Fees and charges

d) Income of local enterprises

Local Taxes: (CTC) Other Fees & Charges/ Service income

• Real property tax (RPT) Clearance & certification fees

• Business tax – Mayor’s permit Garbage fees

and Inspection fees

• Community tax certificate
a.k.a. Cedula Toll & terminal fees

• Franchise tax

• Occupation tax

Non-tax Revenues/ Permits Income of Local Enterprises/Business

Licenses Income:

• Fees on weights and measures Income from markets, slaughterhouses, etc.

Rent income
• Motor vehicle user’s charge
Tuition fees
• Permit fees
Sales revenue
• Registration fees

2. External Sources

a) Share from National Tax Collection (IRA)

b) Share from GOCCs (PAGCOR & PCSO)

c) Other Share from National Tax Collection

• Share from Ecozone

• Share from EVAT

• Share from National Wealth

d) Extraordinary receipts

• Grants & Donations

• Other Subsidy Income

 e) Inter-Local Transfers

• Subsidy from LGUS

• Subsidy from Other Funds

f) Capital/Investment Receipts

• Gain on Sale of Assets

• Gain on Investments

g) National Government Agencies

• Regular PPAs

• Bottom-up-Budgeting (BuB) / Assistance to Municipalities and Cities

Source: Revised from the Module prepared by: Dr. Jocelyn C. Cuaresma, PhD Presented by: Faith I. Bacon,
LOCAL REVENUE GENERATION, Orientation Training on People’s Public Finance: Empowering Citizens in
Asserting Rights to Public Finance
 METHODOLOGY

Secondary source data will be used in this term paper. It will be comprised of researched data

from the internet, journals, books and other related researches on the similar subject. This

term paper will be a qualitative research. The researcher will collect, analyse and interpret

the data though collation of information from different references. This term paper will use

graphs and other visuals to show the results of the research. Most data will be collected from

the Department of Finance, Department of Local and interior Government, Commission on

Audit and other reliable websites of the government.

 RESULTS AND DISCUSSION

Table 4.1 shows the breakdown of revenue generation.

Particulars PROVINCE CITY TOTAL

MUNICIPALITY
LOCAL SOURCES (4+8)
26,933.53 133,778.12 37,781.35 198,493.00
TAX REVENUE (5+6+7)
11,418.70 109,646.65 21,065.13 142,130.48
Real Property Tax
9,012.30 41,484.51 9,289.12 59,785.92

Tax on Business
1,390.98 62,001.79 10,905.54 74,298.31

Other Taxes
1,015.42 6,160.35 870.48 8,046.25

NON-TAX REVENUE
(9+10+11+12) 15,514.82 24,131.48 16,716.21 56,362.52
Regulatory Fees (Permit and
Licenses) 313.93 7,783.64 3,976.31 12,073.88

Service/User Charges (Service

Income) 7,774.30 3,137.44 16,559.11
5,647.36
Receipts from Economic
Enterprises (Business Income) 5,850.88 8,456.87 8,095.98 22,403.73

Other Receipts (Other General

Income) 1,575.71 2,243.61 1,506.48 5,325.80

EXTERNAL SOURCES
(14+15+16+17) 115,276.22 111,078.43 171,340.49 397,695.13
Internal Revenue Allotment
110,860.65 105,904.36 164,065.47 380,830.48

Other Shares from National Tax

Collections 706.34 4,581.88 4,654.55 9,942.77

Inter-Local Transfer
1,733.25 384.74 901.43 3,019.43

Extraordinary
Receipts/Grants/Donations/Aids 1,975.98 207.44 1,719.03 3,902.46

TOTAL REVENUE (3+13)

142,209.74 244,856.55 209,121.83 596,188.13
PERCENTAGE (LOCAL 19% 55% 18% 33%
SOURCES/TOTAL REVENUE)

Source: Department of Finance, Bureau of Local Government Finance, Statement of Receipts and
Expenditures (SRE) FY 2017
 The table shows that in 2017 only the cities were able to generate local revenue that is

more than 50%. The other local governments were still able to generate local revenues but in

its total revenue, most of it are from the external sources specifically from the Internal

Revenue Allotment (IRA)

Figure 4.1 Province Revenue Generation

PROVINCE

19%

LOCAL SOURCES
EXTERNAL SOURCES

81%

The figure shows that the large percentage of generated revenue of provinces is from the

external sources such as IRA, other shares from national tax collections, inter-local transfer

and extraordinary receipts/grants donation aids.

Table 4. 2 shows the breakdown of revenue generation from each provinces
STATEMENT OF RECEIPTS AND EXPENDITURES

FY 2017 (PRELIMINARY)

Coverage: By Province

In Million Pesos

LGU NAME TOTAL LOCAL LOCAL SOURCES EXTERNAL SOURCES TOTAL REVENUE PERCENTAGE(Local
SOURCES TAX REVENUE NON-TAX REVENUE sources/total revenue)
TOTAL EXTERNAL
SOURCES
TOTAL TAX REVENUE NON-TAX REVENUE

GRAND TOTAL 26,933.53 11,418.70 15,514.82 115,276.22 142,209.74 19%

CORDILLERA ADMINISTRATIVE REGION -
ABRA 115.60 18.87 96.73 1,410.88 1,526.48 8%
APAYAO 67.07 20.86 46.21 823.30 890.37 8%
BENGUET 334.86 100.44 234.42 930.63 1,265.49 26%
IFUGAO 131.79 26.70 105.09 731.39 863.18 15%
KALINGA 207.80 10.32 197.48 793.68 1,001.48 21%
MOUNTAIN PROVINCE 102.99 31.19 71.80 653.85 756.84 14%

TOTAL 960.12 208.38 751.73 5,343.73 6,303.85 15%

-
REGION I -

ILOCOS NORTE 287.70 176.49 111.20 1,090.30 1,378.00 21%

ILOCOS SUR 500.36 55.49 444.87 1,098.87 1,599.23 31%
LA UNION 492.09 159.44 332.65 1,058.81 1,550.90 32%
PANGASINAN 906.42 343.91 562.50 2,963.40 3,869.82 23%

TOTAL 2,186.56 735.33 1,451.22 6,211.39 8,397.94 26%

-
REGION II -

BATANES 14.64 4.52 10.12 378.13 392.77 4%

CAGAYAN 248.52 143.74 104.78 2,019.50 2,268.02 11%
ISABELA 439.33 137.60 301.73 3,014.69 3,454.02 13%
NUEVA VIZCAYA 282.34 82.39 199.96 1,167.55 1,449.89 19%
QUIRINO 233.64 16.80 216.84 796.66 1,030.29 23%

TOTAL 1,218.46 385.04 833.42 7,376.52 8,594.99 14%

-
REGION III -

AURORA 71.87 33.28 38.59 769.99 841.85 9%

BATAAN 1,430.22 1,296.81 133.41 1,126.97 2,557.19 56%
BULACAN 1,629.74 1,026.23 603.51 2,982.81 4,612.56 35%
NUEVA ECIJA 443.62 206.20 237.42 2,394.68 2,838.30 16%
PAMPANGA 934.93 446.73 488.21 2,118.71 3,053.64 31%
TARLAC 292.14 114.26 177.88 1,578.36 1,870.51 16%
ZAMBALES 300.56 244.80 55.75 1,355.66 1,656.22 18%

TOTAL 5,103.08 3,368.32 1,734.77 12,327.18 17,430.27 29%

-
REGION IV-A -

BATANGAS 1,118.39 945.05 173.34 2,568.88 3,687.27 30%

CAVITE 834.12 717.84 116.29 3,123.74 3,957.86 21%
LAGUNA 515.06 270.63 244.43 2,726.57 3,241.63 16%
QUEZON 640.15 268.40 371.75 2,476.29 3,116.43 21%
RIZAL 1,363.96 851.61 512.35 2,497.85 3,861.81 35%

TOTAL 4,471.68 3,053.53 1,418.15 13,393.32 17,865.00 25%

-
REGION IV-B -

MARINDUQUE 40.32 12.90 27.41 604.56 644.88 6%

OCCIDENTAL MINDORO 95.98 56.27 39.70 1,207.19 1,303.17 7%
ORIENTAL MINDORO 190.44 91.41 99.03 1,360.93 1,551.37 12%
PALAWAN 238.80 135.73 103.06 2,271.91 2,510.70 10%
ROMBLON 118.01 24.46 93.55 707.22 825.23 14%

TOTAL 683.54 320.78 362.76 6,151.81 6,835.35 10%

-
REGION V -

ALBAY 236.45 117.37 119.09 1,523.49 1,759.94 13%

CAMARINES NORTE 218.37 44.00 174.37 973.32 1,191.69 18%
CAMARINES SUR 188.21 79.97 108.24 2,074.53 2,262.74 8%
CATANDUANES 132.74 18.78 113.97 695.81 828.56 16%
MASBATE 99.98 79.30 20.68 1,378.78 1,478.77 7%
SORSOGON 265.66 31.29 234.37 1,121.89 1,387.55 19%

TOTAL 1,141.42 370.71 770.71 7,767.83 8,909.25 13%

-
REGION VI -

AKLAN 618.13 148.52 469.61 933.25 1,551.39 40%

ANTIQUE 191.64 59.17 132.47 1,185.19 1,376.83 14%
CAPIZ 380.88 30.09 350.79 1,142.92 1,523.80 25%
GUIMARAS 108.30 34.52 73.78 541.63 649.93 17%
ILOILO 956.85 198.49 758.35 2,193.24 3,150.09 30%
NEGROS OCCIDENTAL 416.58 173.56 243.03 4,092.93 4,509.52 9%

TOTAL 2,672.39 644.36 2,028.03 10,089.17 12,761.56 21%

-
REGION VII -

BOHOL 354.21 139.74 214.47 1,717.53 2,071.74 17%

CEBU 721.54 278.01 443.53 2,917.25 3,638.79 20%
NEGROS ORIENTAL 348.03 80.64 267.39 1,819.29 2,167.32 16%
SIQUIJOR 61.86 11.30 50.56 451.88 513.74 12%

TOTAL 1,485.64 509.69 975.95 6,905.94 8,391.58 18%

-
REGION VIII -

BILIRAN 119.76 9.46 110.30 526.01 645.77 19%

EASTERN SAMAR 62.00 11.95 50.05 1,334.56 1,396.56 4%
LEYTE 571.06 82.37 488.68 1,986.20 2,557.25 22%
NORTHERN SAMAR 155.77 28.99 126.78 1,161.45 1,317.22 12%
SOUTHERN LEYTE 372.40 22.89 349.51 823.06 1,195.46 31%
WESTERN SAMAR (SAMAR) 31.49 14.80 16.68 1,439.40 1,470.89 2%

TOTAL 1,312.47 170.47 1,142.00 7,270.68 8,583.15 15%

-
REGION IX -

ZAMBOANGA DEL NORTE 208.45 52.59 155.85 1,728.63 1,937.08 11%

ZAMBOANGA DEL SUR 305.39 73.31 232.08 1,790.55 2,095.95 15%
ZAMBOANGA SIBUGAY 94.85 26.10 68.75 1,108.72 1,203.57 8%

TOTAL 608.69 152.00 456.69 4,627.91 5,236.60 12%

-
REGION X -

BUKIDNON 888.05 117.45 770.60 2,260.15 3,148.20 28%

CAMIGUIN 39.70 7.93 31.77 430.38 470.08 8%
LANAO DEL NORTE 259.96 40.53 219.43 1,111.22 1,371.18 19%
MISAMIS OCCIDENTAL 228.64 23.75 204.89 1,094.81 1,323.44 17%
MISAMIS ORIENTAL 339.98 211.48 128.49 1,256.39 1,596.37 21%

TOTAL 1,756.33 401.14 1,355.18 6,152.95 7,909.28 22%

-
REGION XI -

COMPOSTELA VALLEY 359.07 73.49 285.59 1,315.68 1,674.75 21%

DAVAO DEL NORTE 236.95 82.67 154.27 1,357.75 1,594.70 15%
DAVAO DEL SUR 193.39 121.67 71.72 1,005.49 1,198.87 16%
DAVAO OCCIDENTAL 59.51 23.67 35.84 735.14 794.65 7%
DAVAO ORIENTAL 131.07 20.34 110.74 1,240.29 1,371.36 10%

TOTAL 979.99 321.83 658.15 5,654.34 6,634.33 15%

-
REGION XII -

NORTH COTABATO 374.59 98.88 275.71 2,100.92 2,475.51 15%

SARANGANI 41.95 24.43 17.52 1,049.86 1,091.82 4%
SOUTH COTABATO 500.38 137.31 363.07 1,346.77 1,847.15 27%
SULTAN KUDARAT 471.34 42.65 428.69 1,376.12 1,847.46 26%

TOTAL 1,388.27 303.28 1,085.00 5,873.67 7,261.94 19%

-
REGION XIII (CARAGA) -

AGUSAN DEL NORTE 152.73 20.73 132.00 856.67 1,009.40 15%

AGUSAN DEL SUR 279.89 73.35 206.54 1,707.10 1,986.99 14%
DINAGAT ISLANDS 23.33 15.79 7.54 516.73 540.07 4%
SURIGAO DEL NORTE 399.37 312.03 87.34 963.22 1,362.60 29%
SURIGAO DEL SUR 53.52 37.23 16.28 1,209.32 1,262.84 4%

TOTAL 908.85 459.14 449.71 5,253.04 6,161.89 15%

-
ARMM -

BASILAN 13.33 1.35 11.98 881.62 894.96 1%

SULU 11.36 10.46 0.90 1,891.85 1,903.22 1%
TAWI-TAWI 29.84 1.74 28.10 1,154.03 1,183.87 3%

LANAO DEL SUR MAGUINDANAO - - - - - 0.16%

1.51 1.14 0.37 949.21 950.72
TOTAL 56.05 14.69 41.36 4,876.72 4,932.77 1%

Data as of April 30, 2018

No FY 2017 Preliminary data submitted

From the information gathered from Department of Finance, Bureau of Local

Government Finance, Statement of Receipts and Expenditures (SRE) FY 2017, the province

that has the poorest local revenue generation is the province of Maguindanao with 0.16% or

an equivalent of 1.51 M generated local revenue.

Figure 4.2 City Revenue Generation

CITY

45% LOCAL SOURCES

55% EXTERNAL SOURCES

Figure 4.2 shows the percentage of overall city revenue generation. As shown 55% of its

revenue is from the local sources such as tax and non-tax-revenue. This figure shows the

effectiveness of the city tax collection.

Table 4. 3 shows the breakdown of revenue generation of each city.

STATEMENT OF RECEIPTS AND EXPENDITURES

FY 2017 (PRELIMINARY)

Coverage: By City

In Million Pesos

LGU NAME CURRENT OPERATING INCOME

LOCAL SOURCES

EXTERNAL SOURCES

TOTAL LOCAL TAX REVENUE NON-TAX REVENUE TOTAL REVENUE PERCENTAGE(Local

SOURCES sources/total revenue)
TOTAL EXTERNAL
TOTAL TAX REVENUE NON-TAX REVENUE SOURCES

GRAND TOTAL 133,778.12 109,646.65 24,131.48 111,078.43 244,856.55 55%

NATIONAL CAPITAL REGION -
CALOOCAN CITY 3,232.04 2,644.94 587.11 2,397.13 5,629.18 57%
LAS PINAS CITY 1,707.44 1,416.38 291.06 1,032.81 2,740.25 62%
MAKATI CITY 13,690.25 12,592.79 1,097.46 1,349.10 15,039.35 91%
MALABON CITY 806.86 606.60 200.26 730.40 1,537.25 52%
MANDALUYONG CITY 3,900.54 3,580.44 320.11 778.02 4,678.56 83%
MANILA CITY 10,429.25 9,085.30 1,343.96 2,851.98 13,281.24 79%
MARIKINA CITY 1,592.52 1,124.41 468.10 832.73 2,425.25 66%

MUNTINLUPA CITY - - - - -
NAVOTAS CITY 637.24 383.79 253.45 560.69 1,197.93

PARANAQUE CITY 4,206.58 3,712.28 494.30 1,135.93 5,342.51 79%

PASAY CITY 3,838.34 3,443.71 394.63 999.58 4,837.92 79%
PASIG CITY 8,745.31 7,209.98 1,535.33 1,403.60 10,148.90 86%
QUEZON CITY 15,161.08 13,420.18 1,740.90 4,818.68 19,979.75 76%

SAN JUAN CITY - - - - - 79%

TAGUIG CITY 6,590.85 5,714.39 876.46 1,757.36 8,348.20
VALENZUELA CITY 2,560.32 2,245.12 315.20 1,085.62 3,645.94 70%

TOTAL 77,098.61 67,180.30 9,918.31 21,733.63 98,832.24 78%

-
CORDILLERA ADMINISTRATIVE REGION -

BAGUIO CITY - - - - - 7%
TABUK CITY 61.47 27.23 34.24 839.16 900.63
TOTAL 61.47 27.23 34.24 839.16 900.63 7%
-
REGION I -

BATAC CITY 112.06 54.37 57.69 425.79 537.85 21%

LAOAG CITY 318.66 145.50 173.17 471.79 790.46 40%
CANDON CITY 118.35 55.93 62.42 349.22 467.57 25%
VIGAN CITY 165.22 68.37 96.85 311.32 476.54 35%
SAN FERNANDO (LA UNION) CITY 265.63 183.16 82.48 460.03 725.66 37%
ALAMINOS CITY 133.10 59.69 73.41 430.28 563.38 24%
DAGUPAN CITY 427.50 276.48 151.03 515.82 943.32 45%
SAN CARLOS (PANGASINAN) CITY 130.08 68.10 61.98 570.63 700.71 19%
URDANETA CITY 436.17 128.58 307.59 443.75 879.92 50%

TOTAL 2,106.79 1,040.18 1,066.61 3,978.62 6,085.41 35%

-
REGION II -

TUGUEGARAO CITY 351.86 219.46 132.41 504.47 856.34 41%

CAUAYAN CITY 249.67 203.73 45.94 617.03 866.70 29%
ILAGAN CITY 138.74 57.71 81.04 1,220.45 1,359.19 10%
SANTIAGO CITY 270.29 198.67 71.62 1,238.58 1,508.87 18%

TOTAL 1,010.57 679.57 331.01 3,580.52 4,591.10 22%

-
REGION III -

BALANGA CITY 312.79 207.11 105.67 404.30 717.08 44%

MALOLOS CITY 433.14 377.14 56.00 587.34 1,020.49 42%
MEYCAUAYAN CITY 790.97 634.64 156.33 503.11 1,294.08 61%
SAN JOSE DEL MONTE CITY 604.26 430.72 173.53 1,052.54 1,656.79 36%
CABANATUAN CITY 649.64 567.20 82.44 812.86 1,462.50 44%

GAPAN CITY - - - - -
PALAYAN CITY 28.48 19.29 9.19 320.27 348.75

SAN JOSE CITY 212.94 138.69 74.26 516.36 729.30 29%

SCIENCE CITY OF MUNOZ 76.10 50.54 25.56 421.18 497.28 15%
ANGELES CITY 1,163.51 899.18 264.33 859.21 2,022.72 58%
MABALACAT CITY 229.36 166.88 62.48 1,083.38 1,312.73 17%
SAN FERNANDO (PAMPANGA) CITY 856.84 728.23 128.60 657.38 1,514.22 57%

TARLAC CITY - - - - - 48%

OLONGAPO CITY 677.34 258.47 418.87 727.90 1,405.23
TOTAL 6,035.36 4,478.10 1,557.26 7,945.83 13,981.18 43%
-
REGION IV-A -

BATANGAS CITY 1,559.05 1,361.26 197.79 892.53 2,451.58 64%

LIPA CITY 788.80 599.92 188.88 892.02 1,680.81 47%
TANAUAN CITY 881.31 789.76 91.56 538.30 1,419.61 62%
BACOOR CITY 862.97 661.50 201.47 1,020.83 1,883.80 46%
CAVITE CITY - - - - -

DASMARINAS CITY - - - - -

GENERAL TRIAS 1,024.48 926.51 97.97 694.60 1,719.08 60%

IMUS CITY 773.82 591.35 182.47 861.99 1,635.81 47%
TAGAYTAY CITY 811.33 512.18 299.15 347.66 1,158.99 70%
TRECE MARTIRES CITY 276.92 214.78 62.14 429.74 706.66 39%
BINAN CITY 1,093.79 959.41 134.38 1,166.77 2,260.56 48%
CABUYAO CITY 1,073.33 1,013.57 59.76 739.94 1,813.27 59%
CALAMBA CITY 2,460.54 2,296.75 163.79 1,481.64 3,942.18 62%
SAN PABLO CITY 433.14 285.18 147.96 697.20 1,130.35 38%
SAN PEDRO CITY 558.71 449.38 109.33 654.52 1,213.23 46%
SANTA ROSA CITY 2,598.30 2,470.16 128.14 828.11 3,426.41 76%
LUCENA CITY 517.38 424.49 92.89 612.14 1,129.52 46%
TAYABAS CITY 79.77 49.45 30.32 491.52 571.28 14%
ANTIPOLO CITY 1,367.19 1,131.16 236.03 1,458.14 2,825.32 48%

TOTAL 17,160.82 14,736.81 2,424.01 13,807.63 30,968.45 55%

-
REGION IV-B -

CALAPAN CITY 164.40 107.29 57.11 552.87 717.27 23%

PUERTO PRINCESA CITY 685.43 414.16 271.27 2,219.20 2,904.63 24%

TOTAL 849.83 521.45 328.38 2,772.07 3,621.90 23%

-
REGION V -

LEGAZPI CITY 444.50 356.09 88.41 577.27 1,021.77 44%

LIGAO CITY 77.85 37.48 40.38 546.72 624.57 12%
TABACO CITY 88.66 44.88 43.77 458.85 547.51 16%
IRIGA CITY 90.86 52.38 38.48 442.58 533.44 17%
NAGA CITY(CAMARINES SUR) 657.64 447.02 210.63 524.91 1,182.55 56%
MASBATE CITY 99.74 58.15 41.60 455.85 555.59 18%
SORSOGON CITY 121.87 93.62 28.25 623.83 745.70 16%

TOTAL 1,581.13 1,089.62 491.51 3,630.01 5,211.13 30%

REGION VI
-

ROXAS CITY
232.39 155.34 77.05 485.45 717.84

ILOILO CITY 68%

1,809.94 1,591.01 218.93 859.93 2,669.87
PASSI CITY 17%
97.92 59.08 38.83 479.50 577.42
BACOLOD CITY 54%
1,332.53 1,164.43 168.11 1,115.47 2,448.00
BAGO CITY 13%
112.74 47.50 65.24 723.61 836.34
CADIZ CITY 12%
106.41 83.47 22.94 791.35 897.77
ESCALANTE CITY 11%
55.32 34.45 20.87 456.45 511.77
HIMAMAYLAN CITY 4%
24.58 16.03 8.55 598.98 623.56
KABANKALAN CITY 10%
105.79 64.03 41.76 934.28 1,040.07
LA CARLOTA CITY 34%
195.04 160.65 34.39 375.92 570.95
SAGAY CITY 14%
103.29 42.85 60.44 642.08 745.36
SAN CARLOS (NEGROS OCC.) CITY 32%
333.15 122.47 210.69 693.48 1,026.63
SILAY CITY 20%
132.05 95.56 36.49 515.58 647.63
SIPALAY CITY 5%
26.35 13.81 12.53 555.09 581.43
TALISAY (NEGROS OCC.) CITY 24%
154.13 127.34 26.79 475.35 629.47
VICTORIAS CITY 19%
93.36 54.70 38.66 407.05 500.41
TOTAL 33%
4,914.97 3,832.70 1,082.27 10,109.57 15,024.55

REGION VII
-

TAGBILARAN CITY 50%

372.81 259.18 113.63 367.56 740.37
BOGO CITY 17%
74.58 34.78 39.80 374.01 448.59
CARCAR CITY 18%
96.69 70.30 26.39 438.15 534.84
CEBU CITY
3,696.14 2,538.27 1,157.87 1,854.20 5,550.34

DANAO CITY
175.17 90.17 85.00 478.80 653.96

LAPU-LAPU CITY 62%

1,316.33 1,155.12 161.22 791.83 2,108.16
MANDAUE CITY 64%
1,304.82 1,016.90 287.91 735.23 2,040.05
NAGA CITY (CEBU) 55%
523.97 462.98 61.00 422.01 945.98
TALISAY CITY (CEBU)
316.33 238.00 78.34 536.93 853.26

TOLEDO CITY 48%

550.00 459.62 90.38 593.50 1,143.51
BAIS CITY 15%
89.91 67.36 22.55 521.24 611.15
BAYAWAN CITY (TULONG) 33%
421.19 38.49 382.70 847.38 1,268.57
CANLAON CITY 8%
33.42 11.73 21.69 386.43 419.85
DUMAGUETE CITY 43%
317.71 234.25 83.47 423.86 741.57
GUIHULNGAN CITY 5%
31.04 8.65 22.39 629.16 660.20
TANJAY CITY 8%
42.36 23.24 19.12 497.81 540.16
TOTAL 49%
9,362.47 6,709.02 2,653.45 9,898.09 19,260.56

REGION VIII
-

BORONGAN CITY 6%
41.99 22.40 19.59 622.86 664.86
BAYBAY CITY 11%
86.67 39.54 47.13 670.30 756.98
ORMOC CITY 28%
355.88 225.10 130.78 933.79 1,289.67
TACLOBAN CITY 39%
436.16 272.74 163.42 684.05 1,120.21
MAASIN CITY 17%
94.79 49.44 45.34 468.53 563.32
CALBAYOG CITY 9%
103.39 69.91 33.48 1,067.82 1,171.21
CATBALOGAN CITY 13%
76.79 48.23 28.57 528.82 605.61
TOTAL 19%
1,195.68 727.37 468.31 4,976.17 6,171.85

-
REGION IX
-

ISABELA CITY (BASILAN) 6%

31.28 18.32 12.96 506.07 537.35
DAPITAN CITY 6%
38.28 19.64 18.64 582.85 621.13
DIPOLOG CITY 33%
299.15 82.85 216.30 597.30 896.45
PAGADIAN CITY 27%
275.90 144.01 131.89 737.80 1,013.70
ZAMBOANGA CITY 26%
834.48 595.22 239.26 2,379.17 3,213.65
TOTAL 24%
1,479.10 860.05 619.05 4,803.18 6,282.28

REGION X
-

MALAYBALAY CITY 12%

146.29 84.50 61.79 1,117.19 1,263.48
VALENCIA CITY 18%
201.11 113.12 87.99 886.21 1,087.31
ILIGAN CITY 34%
644.25 378.73 265.52 1,253.18 1,897.43
OROQUIETA CITY 13%
68.96 38.98 29.98 462.29 531.25
OZAMIS CITY 34%
261.96 169.07 92.89 509.71 771.67
TANGUB CITY 14%
12.96 3.39 9.56 82.77 95.73
CAGAYAN DE ORO CITY 53%
1,748.64 1,450.46 298.18 1,535.69 3,284.34
EL SALVADOR CITY 17%
67.98 51.84 16.14 323.84 391.81
GINGOOG CITY 15%
130.65 97.80 32.85 762.34 892.99
TOTAL 32%
3,282.80 2,387.91 894.89 6,933.22 10,216.02

REGION XI
-

ISLAND GARDEN CITY OF SAMAL 16%

107.15 57.95 49.21 549.23 656.39
PANABO CITY 33%
322.38 203.59 118.79 642.06 964.44
TAGUM CITY 49%
672.67 411.58 261.09 686.97 1,359.64
DAVAO CITY 46%
3,515.68 2,886.08 629.60 4,175.74 7,691.42
DIGOS CITY 26%
225.16 124.68 100.48 628.01 853.17
MATI CITY 10%
89.72 54.05 35.67 846.82 936.54
TOTAL 40%
4,932.76 3,737.93 1,194.83 7,528.83 12,461.59

REGION XII
-

COTABATO CITY 20%

177.61 126.88 50.73 723.29 900.90
KIDAPAWAN CITY 24%
197.59 124.24 73.35 641.66 839.25
GENERAL SANTOS CITY 40%
914.90 536.73 378.18 1,356.09 2,270.99
KORONDAL CITY 27%
240.44 190.84 49.60 665.05 905.50
TACURONG CITY 22%
121.75 60.34 61.42 435.91 557.66
TOTAL 30%
1,652.30 1,039.02 613.28 3,821.99 5,474.30

REGION XIII (CARAGA)

-

BUTUAN CITY 30%

560.12 347.78 212.34 1,287.85 1,847.97
CABADBARAN CITY 10%
55.15 24.07 31.08 512.38 567.52
BAYUGAN CITY 9%
81.25 44.21 37.04 820.10 901.35
SURIGAO CITY 25%
191.76 103.93 87.82 590.27 782.03
BISLIG CITY 11%
71.03 29.48 41.55 556.52 627.55
TANDAG CITY 12%
67.30 39.78 27.52 477.13 544.44
TOTAL 19%
1,026.61 589.25 437.35 4,244.25 5,270.85
 -

ARMM
-

LAMITAN CITY 5%
26.87 10.14 16.73 475.63 502.50
MARAWI CITY - -
- - -

TOTAL 5%
26.87 10.14 16.73 475.63 502.50

Data as of April 30, 2018

No FY 2017 Preliminary data submitted

From the information gathered from Department of Finance, Bureau of Local

Government Finance, Statement of Receipts and Expenditures (SRE) FY 2017, the city that

has the poorest local revenue generation is the City of Himamaylan with 4% or an equivalent

of 24.58 M generated local revenue.

Figure 4.3 Municipality Revenue Generation

MUNICIPALITY

18%

LOCAL SOURCES
EXTERNAL SOURCES

82%

Figure 3.3 shows that in overall revenue generation of municipalities, the largest

percentage of its revenue is from the external sources. This shows that at some point revenue

generation in municipalities are poor.

Table 4.4 shows the breakdown of revenue generation of some municipality.
LANAO DEL SUR
-
BACOLOD-KALAWI 0.36%
(BACOLOD GRANDE) 0.45 0.36 0.08 124.40 124.84
BALABAGAN
- -
BALINDONG (WATU) 0.35%
0.37 0.22 0.15 108.05 108.42
BAYANG 0.03%
0.02 0.02 - 75.18 75.20
BINIDAYAN 0.19%
0.16 0.09 0.07 84.20 84.36
BUADIPOSO-BUNTONG 0.61%
0.49 0.36 0.12 79.54 80.02
BUBONG 0.20%
0.35 0.32 0.03 170.70 171.05
BUMBARAN 1.06%
1.30 0.94 0.36 121.71 123.01
BUTIG 0.33%
0.33 0.25 0.08 99.71 100.05
CALANOGAS 0.71%
0.43 0.35 0.08 60.40 60.84
DITSAAN-RAMAIN 0.29%
0.32 0.21 0.11 110.15 110.46
GANASSI 0.25%
0.24 0.13 0.11 96.34 96.58
KAPAI 0.22%
0.24 0.19 0.05 108.29 108.54
KAPATAGAN 0.40%
0.35 0.29 0.07 88.40 88.76
LUMBA-BAYABAO 0.19%
(MAGUING) 0.31 0.26 0.05 165.88 166.19
LUMBACA-UNAYAN 0.20%
0.09 0.06 0.03 43.41 43.50
LUMBATAN 0.49%
0.35 0.27 0.08 71.04 71.39
LUMBAYANAGUE 0.03%
0.02 0.00 0.02 91.43 91.46
MADALUM 0.33%
0.42 0.36 0.06 128.07 128.49
MADAMBA 0.20%
0.17 0.12 0.04 82.93 83.09
MAGUING 0.29%
0.42 0.30 0.12 146.14 146.57
MALABANG 0.74%
0.86 0.62 0.24 115.46 116.32
MARANTAO 0.06%
0.09 0.08 0.01 153.52 153.61
MAROGONG 0.41%
0.36 0.13 0.23 88.03 88.39
MASIU 0.13%
0.10 0.10 0.01 76.33 76.43
MULONDO 0.21%
0.24 0.21 0.03 114.23 114.47
PAGAYAWAN 0.17%
(TATARIKAN) 0.13 0.11 0.02 75.64 75.77
PIAGAPO 0.41%
0.41 0.29 0.12 99.15 99.56
PICONG (SULTAN 0.14%
GUMANDER) 0.13 0.10 0.03 88.53 88.66
POONA BAYABAO (GATA) 0.19%
0.18 0.12 0.06 96.40 96.58
PUALAS 0.18%
0.14 0.10 0.04 78.57 78.71
SAGUIARAN 1.89%
1.94 1.82 0.12 100.58 102.52
TAGOLOAN II 0.19%
0.17 0.10 0.07 92.76 92.94
TAMPARAN 0.26%
0.22 0.19 0.04 86.61 86.83
TARAKA 0.78%
0.80 0.72 0.08 101.63 102.43
TUBARAN 0.12%
0.13 0.11 0.02 107.55 107.68
 TUGAYA 0.06%
0.05 0.04 0.01 81.55 81.59
WAO 9.15%
16.14 5.84 10.30 160.31 176.45
TOTAL 0.75%
28.90 15.78 13.12 3,822.93 3,851.83

This table shows the poorest revenue generator. The Municipality of Bayang has the

lowest local revenue generated with only 0.03% in its total revenue in 2017 or an equivalent

of 0.02 M. ( Note: For more detailed table of municipal revenue generation please visit the

website of the Department of Finance, Bureau of Local Government Finance, Statement of

Receipts and Expenditures (SRE) FY 2017)

With all the information gathered and described, it does supported our claim that there is

a problem when it comes to local revenue generation. Having a poor local revenue generation

entails that the LGU may not be able to become independent on its own since it is not making

its own revenue rather it is dependent on the external sources of revenue mostly from IRA

provided by the national government. With this information, development may also be slow

in local government areas. Impacts will be discussed and analyse from the information

gathered existing researches.

1. Hinder public education

Poor revenue collections by local government units (LGUs) hinder the state’s ability to

deliver quality public education with long-term negative consequences for the nation’s

economic competitiveness. According to the latest advertisement of the Department of

Finance’s Tax Watch campaign, seven in every 10 provinces collect low revenues, resulting in

lower contribution to local school districts. Lower funding means that public schools have to

scale back the educational services they provide to cover the gap. Public schools could either

reduce the overall number of their teachers and other employees or forego refurbishment or

expansion plans.

(https://www.philstar.com/nation/2014/07/04/1342069/lgus-poor-revenue-collections-hi

nder-public-education-dof)
2. Poor access to clean water for the people in the local government area and a not well-

equipped health centre in the community.

One of the roles of the state is to protect the vulnerable. It is important that the LGU will

be able to provide the basic needs of its constituents to build a place where its people could

live a sustainable life. Supposedly, by having a good stand in terms of local revenue

generation, LGU would be able to secure its constituents access to potable water and a well-

equipped health center. It is not new to us that there are cases where people tend to go from

hospital to hospital because of lack of heath equipment.

3. Unstable electricity in the community.

Electricity is a major contributor to a nation’s economic development. It is the wheel that

drives most aspects of everyday life in the society. Electricity is so important to the economic

development of every nation because it brings investment opportunities for the country. In a

country with a fair share of electricity, investors come in because the cost of production in

such a country is minimal compared to where there is no electricity.

(https://www.quora.com/Why-is-electricity-so-important-for-a-countrys-economic-develo

pment)

4. Good infrastructure

This will increase the number of people and business that will be paying tax and that will

definitely increase the revenue generation because more people will be paying tax, if the

government can provide good infrastructure for the local government, there will be more

business and people will see reasons to pay tax. (A Study of Selected Local Council in Kogi

East Senatorial District), Kogi State University, Anyigba Kogi State, Nigeria by Edogbanya,

Adejoh & Mr. Ja’afaru G. Sule, Year 2013)

Once goods are produced, they need to be transported to the ports and airports for

transportation to other states and countries. This means that excellent roads are needed to

transport the goods or otherwise, they would be delayed leading to economic and reputational
losses. Indeed, if a manufacturer produces goods quickly but is unable to transport them to

the destination as fast as they can, then there is no point in making the

goods in an efficient manner in the first place.

(https://www.managementstudyguide.com/importance-of-infrastructure-in-a-nations-dev

elopment.htm)
 SUMMARY, CONCLUSION, AND RECOMMENDATION

Summary

As presented in the 2017 data, provinces and municipalities in overall, large percentage

of its revenue generation comes from the external source such as IRA, other shares from

national tax collections, inter-local transfer and extraordinary receipts/grants donation aids.

Although there are number of options to actually raise its local revenue generation it is

perhaps challenging to the local government officials hence it resulted for them to depend

mostly on the funds provided by the national government. The researcher therefore concludes

that as per the data presented, LGU-Province was able to generate 19% of its total revenue

from local sources, LGU-cities made a good advancement towards good revenue generation

with 55% of its total revenue and LGU-Municipality generated 18% of its total revenue from

local sources. With the collated information from journals, other researches and such, it was

some impacts of local revenue generation to the development of local government areas were

also identified. Poor revenue generation may affect the education, access of people to potable

water and good health system, access to stable electricity and also to good infrastructures.

Conclusion

High local revenue generation is important to since it secure and protects the general

public from having an unsustainable environment. There are also impacts that will affect

the general public if poor revenue generation of local government units continues. It will

cause delay to the development of local government areas and it will also affect the

standard of living of its constituents.

Recommendations

The researcher would like to recommend the following:

1. Further study may be conducted to enhance this term paper. Other researcher may use

survey or questionnaires to fully get the opinion of the general public.

2. Other researcher may be able to conduct a study about the challeneges in local revenue

generation.
 BIBLIOGRAPHY
Online Sources https://bataspinoy.wordpress.com/2011/04/05/definition-and-functions-

of-lgu/ dilg.gov.ph/facts-and-figures

https://www.philstar.com/nation/2014/07/04/1342069/lgus-poor-revenue-collections-hin
der-public-education-dof

https://www.quora.com/Why-is-electricity-so-important-for-a-countrys-economic-develop
ment

https://www.managementstudyguide.com/importance-of-infrastructure-in-a-nations-devel
opment.htm

Journal
NTRC Tax Research journal vol XX6. Revenue Performance of Local Government Units CYs
2003-2007

Other similar researches

Edogbanya, Adejoh & Mr. Ja’afaru G. Sule. 2013. A Study of Selected Local Council in Kogi
East Senatorial District, Kogi State University, Anyigba Kogi State, Nigeria

AFRREV IJAH. July, 2013. An International Journal of Arts and Humanities Vol. 2 (3), S/No
7, Bahir Dar, Ethiopia

Adesoji Adetunji Adenugba (MR) and Chike Faith Ogechi. May 2013. The Effect of Internal
Revenue Generation on Infrastructural Development. A study of Lagos State Internal
Revenue Service by, Vol. 3

Websites:

Department of Finance, Bureau of Local Government Finance, Statement of Receipts and

Expenditures (SRE) FY 2017

COA, 2017 Financial Report

Presentations
Revised from the Module prepared by: Dr. Jocelyn C. Cuaresma, PhD Presented by: Faith I.
Bacon. October 11, 2018. LOCAL REVENUE GENERATION, Orientation Training on
People’s Public Finance: Empowering Citizens in Asserting Rights to Public Finance..
Aborlan, Palawan