INTERGOVERNMENTAL

FISCAL RELATIONS
GROUP 2 – PUBLIC FISCAL ADMINISTRATION
FISCAL PERFORMANCE OF LOCAL
GOVERNMENT IN THE PHILIPPINES
LGU Financial Performance
LGU Financial Performance
Local Government Budget Process
BUDGET PREPARATION

 Budget preparation is the first phase of the local

budget process. It involves cost estimation per
PPA, preparation of budget proposals, executive
review of budget proposals, and preparation of
the LEP and the Budget Message. This phase starts
with the issuance of the Budget Call, and ends
with submission of the Executive Budget to the
Sanggunian on or before October 16 of each year.
BUDGET PREPARATION
BUDGET PREPARATION
BUDGET AUTHORIZATION

 Budget Authorization is the second phase in the

local budget process. This phase starts from the
time the Sanggunian receives the Local
Expenditure Program (LEP) submitted by the LCE,
and ends with the enactment of the Appropriation
Ordinance and approval thereof by the LCE.
BUDGET AUTHORIZATION
BUDGET REVIEW

 Budget Review is the third phase in the local

budget process. Its primary purpose is to
determine whether the Appropriation Ordinance
has complied with the budgetary requirements
and general limitations set forth in the Local
Government Code of 1991, as well as provisions of
other applicable laws. It starts from the time the
reviewing authority receives the Appropriation
Ordinance for review and ends with the issuance
of the review action.
BUDGET REVIEW
BUDGET EXECUTION

 This phase involves release and actual

disbursement of funds for the identified functions
– Work and Financial Plan and Request for
Allotment. The execution of the budget in
accordance with existing rules, laws and
regulations is the fourth phase of the budget
process in local governments.
BUDGET EXECUTION
BUDGET ACCOUNTABILITY

 Budget accountability is the last and final phase

of the budget process. Budget Accountability, in
simple terms, is accounting for the budget. It
involves the use of a management control
techniques to assist in tracking receipts of
income/revenues and controlling expenditures.
The five (5) phases of the budget is incomplete
without accountability.
BUDGET ACCOUNTABILITY
FISCAL PROBLEMS OF THE LGU AS A RESULT
OF THE IMPLEMENTATION OF THE 1991
LOCAL GOVERBMENT CODE (RA 7160)
1. Many Local Governments Continue to be
Dependent on their Shares of the Internal
Revenue Allotment
To reduce IRA dependency, the LGUs need to
have higher locally sourced revenue by:
 Updating the Local Revenue Codes
 Revision of Schedules of Market Values of
Real Properties
FISCAL PROBLEMS OF THE LGU AS A RESULT
OF THE IMPLEMENTATION OF THE 1991
LOCAL GOVERBMENT CODE (RA 7160)
2. The Problem of Tax Assignment
 There should be an amendment that will
consider giving LGUs greater discretion in
setting tax rates by raising the maximum
allowable tax rates.
 There is also a need to improve the tax
administration machinery of local
governments
FISCAL PROBLEMS OF THE LGU AS A RESULT
OF THE IMPLEMENTATION OF THE 1991
LOCAL GOVERBMENT CODE (RA 7160)
3. LGUs Fail to Implement or Complete
Projects
 Increase efforts to have higher collections
 Conduct quarterly meeting to monitor the
implementation of proposed projects
 There should be good governance in the
local government by equipping the leaders
to properly implement the projects