DOF urges inclusion of fiscal sustainability in DILG’s local government rating system

MANILA, Philippines - The Department of Finance (DOF) has urged the inclusion of the fiscal sustainability rating under the Department of Interior and Local Government’s (DILG) assessment for the grant of its Seal of Good Local Governance.

In a statement, the DOF said local government units (LGUs) should also be evaluated by the DILG by the way they rake in revenues and the way they spend such.

“In assessing the ‘good financial housekeeping’ criterion for an LGU, the DOF has called on the DILG to consider the results of the annual LGU Fiscal Sustainability Scorecard and the settlement of all trust liabilities and obligations, as part of the full disclosure policy,” the DOF said.

The Seal of Good Local Governance is given by the DILG to LGUs as long as they satisfy the three core criteria of good financial housekeeping, disaster preparedness, and social protection.

LGUs are also required to get satisfactory remarks on one of the following: business friendliness and competitiveness, environment management, and peace and order.

The DOF said it recently conducted its own performance review of LGUs through the LGU Fiscal Sustainability Scorecard, done by its Fiscal Intelligence Unit and the Bureau of Local Government Finance.

“Such an assessment monitors revenue generation capacity, local collection growth, expenditure management, updating of the schedule of market values, and reportorial compliance of treasurers and assessors with the DOF and BLGF,” the DOF said.

The scorecard is one of the department’s reform initiatives meant to utilize data to boost performance and explore other opportunities in local fiscal management.

The DOF said it has reviewed the performance of at least 80 provinces and 121 cities for fiscal years 2009 to 2012.

The DOF added it “finished the processing of more than 1,400 municipalities and newly created cities with approved Statement of Receipts and Expenditures (SRE) reports.”