URBAN PLANNING INURBAN PLANNING IN
PHILIPPINE DEVELOPMENTPHILIPPINE DEVELOPMENT
SETTINGSETTING
Topic:Topic:
EXTERNAL SOURC...
Funding Sources for the LocalFunding Sources for the Local
Government UnitsGovernment Units
The enactment of the Local Gov...
Financing alternatives for LGU’sFinancing alternatives for LGU’s
A. InternalA. Internal
1. Tax revenues1. Tax revenues
a. ...
C. BorrowingsC. Borrowings
1. Direct Loans1. Direct Loans
a. MDFO (Municipal Developmenta. MDFO (Municipal Development
Fun...
External Sources of RevenueExternal Sources of Revenue
1. Internal Revenue Allotment1. Internal Revenue Allotment
Philippi...
2. Shares of Local Government Units2. Shares of Local Government Units
in the National Wealthin the National Wealth
LGUs s...
Share of the Local Governments from anyShare of the Local Governments from any
Government Agency or -Owned andGovernment A...
(b) Forty percent (40%) of the mining taxes,(b) Forty percent (40%) of the mining taxes,
royalties, forestry and fishery c...
Credit FinancingCredit Financing
As a general policy, any local governmentAs a general policy, any local government
unit m...
Sec 297. LGUs may contract loans, credits, andSec 297. LGUs may contract loans, credits, and
other forms of indebtedness w...
An LGU may secure from any governmentAn LGU may secure from any government
bank and lending institution short, mediumbank ...
 SEC. 298. SEC. 298. Deferred-Payment and otherDeferred-Payment and other
Financial Schemes.Financial Schemes. - Provinci...
Sec. 299. Sec. 299. Bonds and Other Long-TermBonds and Other Long-Term
Securities.Securities.  
Subject to the rules and r...
SEC. 300. SEC. 300. Inter-Local GovernmentInter-Local Government
Loans, Grants, and SubsidiesLoans, Grants, and Subsidies
...
SEC. 301. SEC. 301. Loans from Funds Secured by theLoans from Funds Secured by the
National Government from Foreign Source...
Proceeds from such loans shall accrueProceeds from such loans shall accrue
directly to the local governmentdirectly to the...
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Urban planning in Philippine development setting

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Urban planning in Philippine development setting, local revenues

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Urban planning in Philippine development setting

  1. 1. URBAN PLANNING INURBAN PLANNING IN PHILIPPINE DEVELOPMENTPHILIPPINE DEVELOPMENT SETTINGSETTING Topic:Topic: EXTERNAL SOURCES OFEXTERNAL SOURCES OF LOCAL REVENUELOCAL REVENUE Jeannifer B. VillanuevaJeannifer B. Villanueva 11-MPMG-01111-MPMG-011 Dean C. LaurenteDean C. Laurente
  2. 2. Funding Sources for the LocalFunding Sources for the Local Government UnitsGovernment Units The enactment of the Local GovernmentThe enactment of the Local Government Code in 1991 broadened the authority ofCode in 1991 broadened the authority of Local Government Units (LGUs) to utilizeLocal Government Units (LGUs) to utilize available and potential sources of revenueavailable and potential sources of revenue and strengthen their fiscal position toand strengthen their fiscal position to enable them to provide adequate servicesenable them to provide adequate services to their constituents.to their constituents. Local government revenues are derivedLocal government revenues are derived from two major sources: local, or internal,from two major sources: local, or internal, and external.and external.
  3. 3. Financing alternatives for LGU’sFinancing alternatives for LGU’s A. InternalA. Internal 1. Tax revenues1. Tax revenues a. RPTa. RPT b. Business Taxb. Business Tax 2. Non Tax Revenues2. Non Tax Revenues a. Receipts from Economic Enterprisesa. Receipts from Economic Enterprises b. Fees and Chargesb. Fees and Charges B. ExternalB. External 1. Internal Revenue Allotment (IRA)1. Internal Revenue Allotment (IRA) 2. Share in National Wealth2. Share in National Wealth 3. Local/ Foreign grants and Aid3. Local/ Foreign grants and Aid
  4. 4. C. BorrowingsC. Borrowings 1. Direct Loans1. Direct Loans a. MDFO (Municipal Developmenta. MDFO (Municipal Development Fund Office)Fund Office) b. GFI’s (Govt Financial Institutions)b. GFI’s (Govt Financial Institutions) c. PFI’s (Private Financialc. PFI’s (Private Financial Institutions)Institutions) 2. Bond Issuance2. Bond Issuance D.D. Private Sector Tie UpPrivate Sector Tie Up 1. Build-Operate-Transfer Schemes1. Build-Operate-Transfer Schemes
  5. 5. External Sources of RevenueExternal Sources of Revenue 1. Internal Revenue Allotment1. Internal Revenue Allotment Philippine Constitution provides that localPhilippine Constitution provides that local governments shall be entitled to a just share ingovernments shall be entitled to a just share in national taxes (Sec 6, Art VI). At present, localnational taxes (Sec 6, Art VI). At present, local governments are entitled to 40% of internalgovernments are entitled to 40% of internal revenue taxes (Sec 284 Local Government Code)revenue taxes (Sec 284 Local Government Code) of 3 years ago. Of the current 40%, all provincesof 3 years ago. Of the current 40%, all provinces and all cities are entitled to 23% each; alland all cities are entitled to 23% each; all municipalities, 34%, and all barangays, 20%. Formunicipalities, 34%, and all barangays, 20%. For particular local government units, the sharing isparticular local government units, the sharing is determined by applying this formula: 50% baseddetermined by applying this formula: 50% based on population, 25% on land area, and 25% onon population, 25% on land area, and 25% on equal sharing (Sec 285 Local Government Code).equal sharing (Sec 285 Local Government Code).
  6. 6. 2. Shares of Local Government Units2. Shares of Local Government Units in the National Wealthin the National Wealth LGUs shall have equitable share in proceeds derivedLGUs shall have equitable share in proceeds derived from utilization and development of national wealthfrom utilization and development of national wealth within their respective areas, including sharing thewithin their respective areas, including sharing the same with inhabitants by way of direct benefits (Secsame with inhabitants by way of direct benefits (Sec 289 LGC). Sharing is forty percent (40%) of gross289 LGC). Sharing is forty percent (40%) of gross collection derived by national government from thecollection derived by national government from the preceding fiscal year from mining taxes, royalties,preceding fiscal year from mining taxes, royalties, forestry and fishery charges, and such other taxes,forestry and fishery charges, and such other taxes, fees, or charges, including related surcharges,fees, or charges, including related surcharges, interests, or fines, and from its share in any co-interests, or fines, and from its share in any co- production, joint venture or production sharingproduction, joint venture or production sharing agreement in utilization and development of theagreement in utilization and development of the national wealth within their territorial jurisdictionnational wealth within their territorial jurisdiction (Sec. 290 LGC).(Sec. 290 LGC).
  7. 7. Share of the Local Governments from anyShare of the Local Governments from any Government Agency or -Owned andGovernment Agency or -Owned and -Controlled Corporation-Controlled Corporation In Sec. 291, Local government units shall have aIn Sec. 291, Local government units shall have a share based on the preceding fiscal year fromshare based on the preceding fiscal year from the proceeds derived by any governmentthe proceeds derived by any government agency or government-owned or -controlledagency or government-owned or -controlled corporation engaged in the utilization andcorporation engaged in the utilization and development of the national wealth based on thedevelopment of the national wealth based on the following formula whichever will produce afollowing formula whichever will produce a higher share for the local government unit:higher share for the local government unit: (a) One percent (1%) of the gross sales or receipts(a) One percent (1%) of the gross sales or receipts of the preceding calendar year; orof the preceding calendar year; or
  8. 8. (b) Forty percent (40%) of the mining taxes,(b) Forty percent (40%) of the mining taxes, royalties, forestry and fishery charges and suchroyalties, forestry and fishery charges and such other taxes, fees or charges, including relatedother taxes, fees or charges, including related surcharges, interests, or fines the governmentsurcharges, interests, or fines the government agency or government -owned or -controlledagency or government -owned or -controlled corporation would have paid if it were notcorporation would have paid if it were not otherwise exempt.otherwise exempt. The share shall be distributed in the followingThe share shall be distributed in the following manner:manner: province -20%, Component municipality / city -45;province -20%, Component municipality / city -45; and barangay -35%.and barangay -35%.
  9. 9. Credit FinancingCredit Financing As a general policy, any local governmentAs a general policy, any local government unit may create indebtedness, and avail ofunit may create indebtedness, and avail of credit facilities to finance localcredit facilities to finance local infrastructure and other socio-economicinfrastructure and other socio-economic development projects in accordance withdevelopment projects in accordance with the approved local development plan andthe approved local development plan and public investment program. A localpublic investment program. A local government unit may also avail of creditgovernment unit may also avail of credit lines from government or private bankslines from government or private banks and lending institutions for the purpose ofand lending institutions for the purpose of stabilizing local finances. (Section 296)stabilizing local finances. (Section 296)
  10. 10. Sec 297. LGUs may contract loans, credits, andSec 297. LGUs may contract loans, credits, and other forms of indebtedness w/ any governmentother forms of indebtedness w/ any government or domestic private bank and other lendingor domestic private bank and other lending institutions to finance the construction,institutions to finance the construction, installation, improvement, expansion, operation,installation, improvement, expansion, operation, or maintenance of public facilities, infrastructureor maintenance of public facilities, infrastructure facilities, housing projects, the acquisition of realfacilities, housing projects, the acquisition of real property, and the implementation of other capitalproperty, and the implementation of other capital investment projects, subject to terms andinvestment projects, subject to terms and conditions as may be agreed upon by LGU andconditions as may be agreed upon by LGU and the lender. Proceeds from such transactionsthe lender. Proceeds from such transactions shall accrue directly to the LGU concerned.shall accrue directly to the LGU concerned.
  11. 11. An LGU may secure from any governmentAn LGU may secure from any government bank and lending institution short, mediumbank and lending institution short, medium and long-term loans and advances againstand long-term loans and advances against security of real estate or other acceptablesecurity of real estate or other acceptable assets for establishment, development, orassets for establishment, development, or expansion of agricultural, industrial,expansion of agricultural, industrial, commercial, house financing projects,commercial, house financing projects, livelihood projects, and other economiclivelihood projects, and other economic enterprises.enterprises. Government financial and other lendingGovernment financial and other lending institutions are authorized to grant loans,institutions are authorized to grant loans, credits, and other forms of indebtednesscredits, and other forms of indebtedness out of their loanable funds to LGUs forout of their loanable funds to LGUs for purposes specified above.purposes specified above.
  12. 12.  SEC. 298. SEC. 298. Deferred-Payment and otherDeferred-Payment and other Financial Schemes.Financial Schemes. - Provincial, city and - Provincial, city and municipal governments may likewisemunicipal governments may likewise acquire property, plant, machinery,acquire property, plant, machinery, equipment, and such necessaryequipment, and such necessary accessories under a supplier's credit,accessories under a supplier's credit, deferred payment plan, or other financialdeferred payment plan, or other financial scheme.scheme.
  13. 13. Sec. 299. Sec. 299. Bonds and Other Long-TermBonds and Other Long-Term Securities.Securities.   Subject to the rules and regulations of the CentralSubject to the rules and regulations of the Central Bank and Securities and Exchange Commission,Bank and Securities and Exchange Commission, provinces, cities, and municipalities are herebyprovinces, cities, and municipalities are hereby authorized to issue bonds, debentures, securities,authorized to issue bonds, debentures, securities, collaterals, notes and other obligations to financecollaterals, notes and other obligations to finance self-liquidating, income-producing development orself-liquidating, income-producing development or livelihood projects pursuant to the prioritieslivelihood projects pursuant to the priorities established in the approved local development planestablished in the approved local development plan or the public investment program. The or the public investment program. The sangguniansanggunian concerned shall, through an ordinance approved byconcerned shall, through an ordinance approved by a majority of all its members, declare and state thea majority of all its members, declare and state the terms and conditions of the bonds and the purposeterms and conditions of the bonds and the purpose for which proposed indebtedness is to be incurred.for which proposed indebtedness is to be incurred.
  14. 14. SEC. 300. SEC. 300. Inter-Local GovernmentInter-Local Government Loans, Grants, and SubsidiesLoans, Grants, and Subsidies Provinces, cities and municipalities may, uponProvinces, cities and municipalities may, upon approval of the majority of all members ofapproval of the majority of all members of the the sangguniansanggunian concerned and in amounts not concerned and in amounts not exceeding their surplus funds, extend loans,exceeding their surplus funds, extend loans, grants, or subsidies to other local governmentgrants, or subsidies to other local government units under such terms and conditions as mayunits under such terms and conditions as may be agreed upon by the contracting parties. Localbe agreed upon by the contracting parties. Local government units may, upon approval of theirgovernment units may, upon approval of their respective respective sangguniansanggunian, jointly or severally, jointly or severally contract loans, credits, and other forms ofcontract loans, credits, and other forms of indebtedness for purposes mutually beneficial toindebtedness for purposes mutually beneficial to
  15. 15. SEC. 301. SEC. 301. Loans from Funds Secured by theLoans from Funds Secured by the National Government from Foreign SourcesNational Government from Foreign Sources The President, or his duly authorized representative,The President, or his duly authorized representative, may, through any government financial or othermay, through any government financial or other lending institution, relend to any province, city,lending institution, relend to any province, city, municipality, or barangay, the proceeds of loansmunicipality, or barangay, the proceeds of loans contracted with foreign financial institutions or othercontracted with foreign financial institutions or other international funding agencies for the purpose ofinternational funding agencies for the purpose of financing construction, installation, improvement,financing construction, installation, improvement, expansion, operation, or maintenance of publicexpansion, operation, or maintenance of public utilities and facilities, infrastructure facilities, orutilities and facilities, infrastructure facilities, or housing projects, acquisition of real property, andhousing projects, acquisition of real property, and implementation of other capital investment projects,implementation of other capital investment projects, subject to terms and conditions as may be agreedsubject to terms and conditions as may be agreed upon by the President and LGU.upon by the President and LGU.
  16. 16. Proceeds from such loans shall accrueProceeds from such loans shall accrue directly to the local governmentdirectly to the local government concerned.concerned. (b) The President may likewise authorize the(b) The President may likewise authorize the relending to local government units therelending to local government units the proceeds of grants secured from foreignproceeds of grants secured from foreign sources, subject to the provisions ofsources, subject to the provisions of existing laws and the applicable grantexisting laws and the applicable grant agreementsagreements

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