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Local Fiscal Administration: Ilago)
Local Fiscal Administration: Ilago)
Definition
• the giving and receipt of allotments and grants from the National
Government (NG) to local government units (LGUs);
• allotment sharing between LGUs;
• sharing of taxing powers between the national government (NG)
and LGUs, and among LGUs;
• policy on tax rates and structure;
• revenue and expenditure planning;
• revenue utilization and expenditure allocation; monitoring and
approval budgets, tax ordinances and other fiscal measures;
• policy on borrowing and borrowing instruments; and
• Appointment and supervision of local fiscal officers. (Cuaresma and
Ilago)
• Systems;
• Structures;
• Processes;
• Official/personnel; and
• Policy environment governing inter-governmental and inter-local
fiscal relations.
Among others, these fiscal policies set the framework and procedures on
local revenue generation that includes property tax administration, revenue
ordinance codification as well as the operations of local economic
enterprises.
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Aspects of local fiscal administration
The major aspects of local fiscal administration are the fiscal relations
between the national government and local governments, and among the
local government units, to wit:
1. The fiscal relations between the national government and its agencies,
on the one hand, and the LGUs on the other, which we may call vertical
financial relations. This is also referred to in the literature as central-
local fiscal relations, with the Internal Revenue Allotments at its core;
and
Scope
a. Revenue Generations
c. Other Aspects
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II. LEGAL BASIS FOR LOCAL FISCAL ADMINISTRATION
1. Constitutional Provisions
Political subdivisions
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Province - The largest unit in the political structure of the
Philippines. It consists, in varying numbers, of municipalities and, in
some cases, of component cities. Its functions and duties in relation
to its component cities and municipalities are generally coordinative
and supervisory.
Did you know that the number of cities has more than doubled in
over thirty years?
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Table 1. Number of Provinces, Cities and Municipalities by
Island Group as of December 2020
Some cities act independently from any province and are self-
governing as referred to in the Constitution and in the 1991 Local
Government Code of the Philippines:
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As of December 22, 2009 there are 137 cities in the Philippines.
Thirty-eight cities (38) are independent: thirty-three (33) are
classified as "highly urbanized" and five (5) as "independent
component;" the rest are component cities of the provinces in which
they are geographically located.
Population
Population Area density
City Province Region 2007 (km²) (km²)
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Olongapo Zambales Region 03 227,270 185.00 1228.49
Zamboanga City Zamboanga del Sur Region 09 774,407 1,414.70 547.4
Autonomous Regions
The President can only interfere in the affairs and activities of a local
government unit if he finds that the latter had acted contrary to law.
This is the scope of the President’s supervisory powers over local
government units. Hence, the President or any of his alter egos,
cannot interfere in the local affairs as long as the concerned local
government unit acts within the parameters of the law and the
Constitution. Any directive, therefore, by the President or any of his
alter egos seeking to alter the wisdom of a law-conforming
judgement on local affairs of a local government unit is a patent
nullity, because it violates the principles of local autonomy (Judge
Dadole vs. Commission on Audit).
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the people through a referendum. Political jurisdictions are governed
with full administrative autonomy. However, the national government
still exerts influence and regulatory of national government
subsidies. National government under certain circumstances
likewise guarantees loan application of local governments and
regulates the issuance of local government bonds.
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share will be based on the 2006 collection. Of the total local taxes,
the LGUs will have 40%, while the national government gets the
balance.
By population 50 %
By land area 25 %
By equal sharing 25 %
Over the years, the total IRA allocation to all LGUs has grown and is
currently less than 20% of the total national budget.
TOTAL
BUDGET PERCENTAGE
YEAR AMOUNT (in billion pesos)
(in billion SHARE
pesos)
1992 20.30 295.20 6.88
1993 36.12 331.70 10.89
1994 46.13 369.00 12.50
1995 52.04 372.10 13.99
1996 56.59 445.10 12.71
1997 71.04 491.80 14.44
1998 80.99 537.40 15.07
1999 96.78 593.60 16.03
2000 111.77 651.00 17.17
2001 111.77 669.88 16.69
2002 134.42 780.80 17.22
2003 141.00 804.0 17.54
2004 141.00 861.6 16.36
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2005 151.60 907.6 16.70
2006 166.0 907.6 18.29
Source: Department of Budget and Management
c. Elective Officials
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The following is the breakdown of elective officials and the
minimum age requirement:
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As a matter of principle, higher legislative entities have the power to
create, divide, merge, abolish, or substantially alter boundaries of any
lower-level LGU through a law or by an ordinance, all subject to
approval by a majority of the votes cast in a plebiscite to be conducted
by the Commission on Elections (COMELEC) in the local government
unit or units directly affected.
The Local Government Code has also set requisites for creating local
government units based on verifiable indicators of viability and
projected capacity to provide services. A summary can be found in the
table below:
Municipality
50 square
25,000
two (2) consecutive years • ARMM Regional
kilometers based on 1991 constant Assembly
a prices
n
• Congress
d
• ARMM Regional
Assembly
m 5,000 (Metro • Sangguniang
Manila and Panlalawigan, with
e highly-urbanized recommendation
Barangay None None
r cities) from the concerned
2,000 (rest of Sangguniang
g the country) Bayan(s) required
e • Sangguniang
r Panlungsod
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requirements prescribed in this Code: Provided, further, That the
income classification of the original local government unit or units shall
not fall below its current income classification prior to such division. The
income classification of local government units shall be updated within
six (6) months from the effectivity of this Code to reflect the changes in
their financial position resulting from the increased revenues as
provided herein.
Place illustration/sample
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2. Power to Generate and Apply Resources [Sec. 18, RA 7160] -
Local government units shall have the power and authority to
establish an organization that shall
be responsible for the efficient and effective implementation of their
development plans, program objectives and priorities; to create their
own sources of revenue and to levy taxes, fees, and charges which
shall accrue exclusively for their use and disposition and which shall
be retained by
them; to have a just share in national taxes which shall be
automatically and directly released to them without need of any
further action; to have an equitable share in the proceeds from the
utilization and development of the national wealth and resources
within their respective territorial jurisdictions including sharing the
same with the inhabitants by way of direct benefits; to acquire,
develop, lease, encumber, alienate, or otherwise dispose of real or
personal property held by them in their proprietary capacity and to
apply their resources and assets for productive, developmental, or
welfare purposes, in the exercise or furtherance of their
governmental or proprietary powers and functions and thereby
ensure their development into self-reliant communities and active
participants in the attainment of national goals.
Place illustration/sample
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Numbered Sixty-six hundred fifty-seven (R.A. No. 6657),
otherwise known as "The Comprehensive Agrarian Reform
Law", shall not be affected by the said reclassification and the
conversion of such lands into other purposes shall be
governed by Section 65 of said Act.
Place illustration/sample
Place illustration/sample
Place illustration/sample
Municipal Liability
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Section 24 provides that:
Local government units and their officials are not exempt from
liability for death or injury to persons or damage to property.
As such, the local government units is liable in damages for death or
injuries suffered by reason of the defective condition of roads,
bridges, streets, public buildings and other public works. In fact, in
the case of City of Manila vs. Teotico, the city of Manila was held
liable for damages when a person feel into an open manhole in the
streets of the city.
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implements auditing rules and regulations in local government
units. The Commission also “settles accounts and fixes the
liability of accountable officers, as well as determines whether
fiscal responsibility has been properly and effectively
discharged by the local chief executives.
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The primary principle of devolution and decentralization is very clear
– to unburden the national government of responsibilities of
attending to the basic needs of the people by shifting the
responsibilities down to the LGUs where such needs can best be
carried out,
With the rise in the share of LGUs in the internal revenue allotment
(from 11% to a maximum of 40%), proceeds from the utilization of
natural resources, as well as other income-enhancing powers,
decentralized development may prove to be the real tool in
actualizing national development.
Once local governments are clothed with fiscal autonomy and this
autonomy is used effectively and responsibly, development from
below would not be impossible to realize. What is left to be done
are the following:
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Bibliography:
➢ The Local Government Code of 1991, Rex Bookstore 2001 Edition, Philippines
➢ Wikipedia
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