Phl gets P400-M grant from EU for LGUs

MANILA, Philippines - The Philippines obtained a P400 million grant from the European Union to partly fund a P1.3 billion program aimed at helping local government units generate revenue and spend public funds efficiently.

The government unveiled Tuesday the Local Government Units Public Financial Management reform roadmap which covers 81 provinces, 144 cities and 1,490 municipalities.

EU Ambassador Guy Ledoux said LGUs will be able to improve service delivery to their constituents by ensuring that there are sufficient resources for their development initiatives and that these resources are utilized in the most efficient and effective manner.

The project will assist the Department of Budget and Management, the Department of Finance/Bureau of Local Government Finance, Department of Interior and Local Government and possibly the Commission on Audit and the National Economic Development Authority.

Ledoux said the roadmap was a result of a thorough collaboration between the national oversight institutions and the local authorities with nearly 900 elected officials consulted.

The roadmap is seen to provide LGUs with strategic directions to strengthen their PFM system towards improved revenue generation and expenditure management.

Given the high level of decentralization of the Philippines, local authorities are in the frontline of the delivery of public services and are responsible for about 25 percent of public spending or around P450 billion.

In order to properly monitor the financial performance of LGUs, the government has drawn up guidelines on the use of modified Statement of Receipts and Expenditures (SREs).

Under the joint circular issued by the Department of Finance and the Department of Budget and Management, the SRE would serve as the official financial monitoring and reporting system for all local treasury offices in the provinces, cities and municipalities.

“LGU financial reports must be consistent, comparable, and reliable across oversight agencies. We are working closely with DBM to achieve greater transparency and accountability in the local finance sector.

This is to improve planning, budgeting, and promote administrative efficiency in local finance,” Finance Secretary Cesar Purisima said.

“By streamlining the reporting format, we’ve successfully developed an updated classification system to facilitate the uniform treatment of accounts. The fact that we’ve harmonized LGU financial reports also helps local treasurers, budget officers, and accountants work with greater efficiency and accuracy,” Purisima said.

Since 2008, the DBM had been using the SRE to determine the LGU budget of expenditures and sources of financing, which details the LGU expenditure program covering the actual obligations for the past year, the actual and estimated expenditures for the current year, and the proposed budget program for the coming year.

Under the new circular, the SRE report to be submitted by LGUs to the DBM will cover a three-year period which will be accomplished by the local treasurers for the actual year, and the accountants and budget officers for the current and proposed budget years.

 The joint circular also delineates the roles and responsibilities of the DBM and the DOF-BLGF, including their respective central and regional offices, and the LGU officials in the preparation of the SRE reports.

 In 2013, the DOF started analyzing and publishing the fiscal performance of the LGUs through the LGU Tax Watch and the Iskor ng ’yong Bayan website based on official reports submitted by local treasurers.