BUREAU OF LOCAL GOVERNMENT FINANCE

2014
ANNUAL REPORT

BLGF VISION /MISSION

__________________________________
BLGF of the Department of Finance is the focal
agency and an authority in local finance that
aims to be at the forefront of local economic
growth leading the way towards national
development

PLEDGE OF COMMITMENT
We, the Officials and Employees of the
Bureau of Local Government Finance, commit to:
Build and institutionalize a culture of Excellence,
Competence, Professionalism and Dedication to public
service. A continuing challenge for us is to ensure that
our institution has the skills, the right values and
perspective in the way of doing business;
Lead by example the observance of the ethical standards
for public servants with indubitable integrity and
spirituality that we may increase confidence of the
general public in the government system;

OUR VALUES
Integrity
Excellence

Teamwork
Accountability

Service
Commitment

Generate and promote good relationship with the

transacting public through prompt action, transparency
and utmost courtesy as enshrined in our Citizens
Charter;
Focus on our clients and practice greater sensitivity to
their priorities and services required.

The Bureau of Local Government Finance (BLGF) continuously

endeavored to pursue efforts for the attainment of its mandated goals
and objectives with the BLGF Vision, Mission and Values as guiding
principles. With lean manpower due to the implementation of the
Rationalization Plan, it was able to deliver its services effectively and
was able to sustain its excellent performance.
As a main strategic priority BLGF continued to undertake vital tasks that
aim to sustain local government revenue generation efforts and ensure
that the fiscal provisions of the Local Government Code (LGC) are
properly observed through policy measures, capacity building programs
and actual LGU field audits. New Manuals, Tools, Systems were
formulated, developed and implemented, and other reforms from the
administration/implementation of Special Projects such as the
European Union Project were mainstreamed to the LGUs to support
them in enhancing their capacities, for better treasury operations.
The approach in achieving our goals was more on leveraging our limited
funds and lean manpower, and strived to foster better collaboration
and coordination with partner agencies and stakeholders Most of the
plans and programs for the year were aimed at attaining good
governance, transparency and accountability by taking the necessary
steps towards simplified and better delivery of services, and efficient
monitoring of operations and performance across regions.

OUR GOALS FOR 2014

GOAL 1 Creating Conditions Conducive to Economic Growth
and Competitiveness
Self-sufficient Local Government Units that generate sufficient
revenues to support delivery of services and local development
GOAL 2 Good Governance and Transformational Leadership
Accountable, resilient and competent pool of practitioners
equipped with the right values and possessing leadership,
management and the appropriate technical competencies
GOAL 3 Enhanced Systems and Tools

Functional and operational systems and tools to enhance

operations monitoring and compliance reporting of LGUs
for policy development
GOAL 4 Implementation of Special Projects to Support LGUs
Capacitated local treasurers and assessors, and improved
business processes in the LGUs
GOAL 5 Strengthening of Organizational Structure, Capacity
Building and Enhancement of BLGF Business
Processes
Strengthened organizational structure, enhanced business
processes and capacitated workforce

GOAL 1

- Creating Conditions Conducive to Economic Growth

and Competitiveness

Self-sufficient Local Government Units that generate sufficient revenues to support delivery of services and local development
INCREASE THE LOCAL TAX BASE

Revenue Generation Program

CY 2014 (In Billion Pesos)
Annual Target
57.85

Actual Collection

58.3 59.22

44.86

16.66 17.36 16.9518.05

Real
Property
Tax

Business Tax

Fees and
Charges

Economic
Enterprise

Institutionalization of valuation reform

initiatives to increase real property tax bases of
LGUs:
The BLGF continues to institutionalize valuation
reform initiatives by monitoring the compliance
of LGUs with DOF-DILG Joint Memorandum
Circular No. 10-001 (October 2010) which enjoin
all concerned LGUs to revise their Schedule of
Market Values (SMV) and effect the general
revision of property assessments using the
Philippine Valuation Standards and the Mass
Appraisal Guidebook:

REVENUE GENERATION PROGRAM

The Revenue Generation Program is one of the priority
programs of the BLGF. Through this program, the BLGF
provides technical assistance to LGUs in implementing
tax collection enforcement programs and strategies
aimed at improving their performances in generating
locally sourced income.
As of 4th quarter, LGUs registered an average of 93.14%
collection efficiency (based on partial data of actual vs.
targeted collections) on all local income sources.

A total of 75 LGUs have revised their

SMVs

BLGF likewise monitors compliance of LGUs

with DOF-DILG Joint Memorandum Circular No.
10-002 (October 2010) to encourage LGUs to
impose idle land tax.

INCREASE LOCALLY SOURCED REVENUES

Consolidation & Monitoring of Idle Land

Tax Reports - 34 LGUs

Annual
Target

Actual

Collection

Collections

Efficiency

P 57.85 B

P44.86 B

76.54%

Business Tax

58.30 B

59.22 B

101.58%

Fees and Charges

16.66 B

17.36 B

104.20%

Economic Enterprise 16.95 B

18.05 B

106.49%

P139.49 B

93.14%

Real Property Tax

Total

P149.76 B

GOAL 1

- Creating Conditions Conducive to Economic Growth

and Competitiveness

Self-sufficient Local Government Units that generate sufficient revenues to support delivery of services and local
development
INCREASE LOCALLY SOURCED REVENUES

TECHNICAL ASSISTANCE
A total of 739 technical assistance, consultative
services and capability building for LGUs were
rendered covering:

LGU FINANCIAL PERFORMANCE MONITORING

LGU Financial Performance

Monitoring CY 2014
(In Billion Pesos)
Income

The updating of Local Revenue Codes

Credit financing schemes
Bond-flotation, Build-Operate-Transfer
(BOT) and other non-traditional sources
of financing
Core technical competencies

LGU DEBT MONITORING AND CREDITWORTHINESS

RATING YSTEM
The LGU Debt Monitoring System and the
Creditworthiness Rating System is used in
conjunction with the LGU Debt Service Certification
System which determines the maximum amount an
LGU can allocate for debt service. For Year 2014, a
total of 375 LGUs were issued certifications for their
borrowing and debt service capacities as a
requirement for sub-loan projects under the GFIs,
ALRF and for bond flotation.

Expenditures

Surplus

92.595

433.28
340.68

The Statement of Receipts and Expenditure Reporting

System is currently the reporting system for the
revenues and expenditures of the local government
units (LGUs). The system involves monitoring financial
performance using financial indicators that reflect how
well the LGU funds have been utilized. The electronic
Statement of Receipts and Expenditure System (eSRE),
supports the system and serves as a tool to gather
baseline data for simulation of basic and vital
information on the fiscal performance of the LGUs

Preliminary figures on the income and expenditures

of LGUs as of December 2014, indicated a total
income of P433.28 B as against expenditures of
P340.68 B. The surplus in the amount of P92.595 B
is a result of the intensive implementation of
collection strategies and close monitoring of LGU
financial performance and fund management. The
4th quarter SRE reports of the LGUs are submitted
during the 1st quarter of the succeeding year.

GOAL 2

- Good Governance and Transformational Leadership

Accountable, resilient and competent pool of practitioners equipped with the right values and possessing leadership,
management and the appropriate technical competencies
Institutionalization of Continuing
Professionalization Education (CPE) and Capacity
Building for local assessors and treasurers
BLGF as a Continuing Professional Development
(CPD) Institutional Service Provider facilitated the
formulation and accreditation of three (3) courses on
Valuation namely: Philippine Valuation Standards
(PVS), Basic Course on Mass Appraisal (BCMA)
course No. 2 and Skills Development in SMV
Updating and Conduct of General Revision. The PVS
was offered in year 2010 with a total of 10 schools
conducted. The BCMA # 2 and Skills Development in
SMV Updating and Conduct of General Revision were
offered in Year 2014, a total of 9 schools were
successfully conducted.
BLGF likewise was able to facilitate the accreditation
of its pool of resource speakers and established its
pool of facilitators. A total of fifteen (15) resource
speakers are accredited by the PRC, all of these are
licensed appraisers and experts in the field of
valuation and assessment.
The continuing conduct of CPD is aimed at improving
valuation and assessment operations in the LGUs and
to support the local assessors and appraisers in the
renewal of their Real Estate Service Act (RESA)
licenses.

Continuous reinvention of the local treasury and

assessment offices through innovative capacity
building and development/implementation of
standards
Performance Standards and Rating System
The Performance Standards and Rating System was
finalized in 2014 with the necessary Department Order DO 006.2015 signed by the Secretary of Finance for its
implementation consisting of Operational Performances
Goals (OPG) to measure the technical knowledge and
skills of treasurers and Competency Performance Goals
(CPG) to measure their Basic Universal Skills as indicators
beginning midyear of 2015.
The Performance Standards and Rating System shall set
the criteria and benchmarks for the regular performance
appraisal of local treasurers and assistant treasurers. The
system is consistent with the policies and guidelines of the
Civil Service Commission that a regular, output-oriented
and performance- based appraisal system for local
treasurers and assistant treasurers is necessary for the
effective supervision of local treasury operations of the
local government units.

Local Treasury Examination

The Local Treasury Examination is a two-track approach to
further professionalize the local treasury service. The first
track is the conduct of one-time diagnostic examination to
gauge competencies, knowledge and operational skills of
local treasurers. The second track is a special examination
intended as an additional criteria in the selection
screening process for the appointment of treasurers.
Terms of Reference for the engagement of Non Key
Experts to develop the examination has been drafted.

GOAL 2

- Good Governance and Transformational Leadership

Accountable, resilient and competent pool of practitioners equipped with the right values and possessing leadership,
management and the appropriate technical competencies
ANTI CORRUPTION PROGRAMS

Revenue and
Evaluation

Assessment

Performance

The BLGF continuously implement revenue and

assessment performance evaluation programs
in the local treasury and assessment offices to
abate occurrence of irregularities. A total of
1,212 LGUs nationwide were evaluated in Year
2014.
Continuous investigation of complaints/cases
filed against erring local treasurers was
likewise undertaken, Record shows the
following were acted upon in 2014:

LGU Fiscal Sustainability Scorecard

50 Complaints
17 resolutions
143 general administration
53 Ombudsman Order/Decisions/CSC
Decisions implemented

Appointments and Designations

Established standards are followed in the
selection of treasurers to be appointed and
designated. For Year 2014, there were 91
appointments issued by the Secretary of
Finance and attested by the Civil Service
Commission and 1,019 designation orders
issued.

The Department of Finance implemented

beginning 3rd quarter of 2013 the LGU Fiscal
Sustainability Scorecard. The Fiscal Sustainability
Scorecard rates the fiscal performance of
provinces, cities and municipalities based on set
fiscal indicators using the Statement of Receipts
and Expenditures (SRE) and other official reports
regularly submitted by local treasurers and
assessors.
The full assessment for the 80
provinces, 144 cities and 1,454 municipalities was
completed and published through newspaper and
the Iskor Ng Bayan website in December 2014.

Support to LGU Finance Operations

BLGF issued 344 rulings and opinions in Year

2014, covering local treasury operations, local
taxation, and real property appraisal and
assessment.

GOAL 3

- Enhanced Systems and Tools

Functional and operational systems and tools to enhance operations, monitoring and compliance reporting of LGUs for policy
development
Integrated Information Management Systems
(i2MS)
Improvement of systems and processes in the
BLGF is one of the major thrusts of BLGF. The
implementation and adoption of the Integrated
Information Management Systems (i2MS)
covering LGU Debt Information System ( LGU
debt monitoring),
Local Real Property
Information System, Document
Management
and Archiving System and BLGF Operations
Management System, was initiated in Year 2014
by phases.
For the efficient implementation of the system,
orientation/simulation and coaching were
conducted.
In
addition,
implementing
policies/guidelines were provided to all BLGF
offices including Memorandum Circulars for
adoption or use by all concerned offices.

Enhanced Electronic Statement of Receipts and

Expenditures (eSRE) version 2.1
The eSRE is the official reporting system for LGU
Financial Performance. The system was enhanced
from version 1 to version 2.1 . The enhanced system
provides the facility to forecast revenues and
expenditures based on a macroeconomic model and
framework; Determine financial stability of LGUs
through 19 financial indicators and the LGU Credit
Rating System which is a regular credit worthiness
tool a criterion which shall be used other than net
debt service ceiling and borrowing capacity.
A total of 1,486 trainings on the enhanced system
for municipalities nationwide were conducted to
familiarize the LGUs on the use of the system. The
enhanced system will be implemented in the first
quarter of 2015.

GOAL 4 - Implementation of Special Projects

Capacitated local treasurers and assessors, and improved business processes in the LGUs
EUROPEAN UNION (EU)
Under the European Union (EU), the LGU Public
Financial Management Project 2 (PFM2) was
implemented. The project aims to enhance the
capacity of local governments to generate revenue
and to allocate and spend public funds more
effectively and efficiently.
Expected Outputs:

Improved Revenue Generation and

Management at LGU Level through :
o Expansion and enhancement of
analytical and diagnostic tool and use
of the eSRE
o Expansion and enhancement of
existing key manuals and modules on
Resource Mobilization
o Conduct
of
Trainers'
Training
workshops on key manuals and
modules
o Implementation
of
eSRE-Based
Treasurers'
Performance
Rating
System and Set-up of Competency
Certification System
o Establishment of a
Monitoring
System on Impositions of LGUs
provided in their Local Revenue Codes

Conducted consultation workshops with stakeholders

and initial updating of the following Public Financial
Management Manuals

Technical editing on the Manual on Local

Government
Financial
Performance
Monitoring System (LGFPMS) and SRE
Analysis completed
Finalization
of
Assessment
Evaluation/Examination and Monitoring
Manual completed, accordingly exposure
workshops to regional offices and selected
LGUs were conducted.
Finalization of the Performance Standards
for Treasurer was completed and
conducted
three cluster Exposure
Workshops to local treasurers nationwide.
Development of the Manual on the
Evaluation of Local Treasury Operations
(MELTO) was completed. Exposure
workshop and simulation with regional
offices was conducted.
Update on the Local Treasury Operations
Manual (LTOM) has been reviewed by
BLGF-Technical
Working
Group.
Integration of recommendations is ongoing.
Draft Bill on the enhanced LGU
Reclassification System was presented to
DOF and filed in Congress.

GOAL 5 - Strengthening of Organizational Structure, Capacitating BLGF Employees

Strengthened organizational structure, enhanced business processes and capacitated employees
Implementation
of
Rationalization Plan

the

Approved

The approved Rationalization Plan is underway

for implementation, with the release of the
Notice
of
Organization
Staffing
and
Compensation Allocation NOSCA from the
Department of Budget and Management. The
BLGF
prepared
the
timetable
for
implementation and formulated an enhanced
process of recruitment and promotion to
effectively carry out the filling of vacant
positions.

Trainings for BLGF Employees

The BLGF recognizes the importance of trainings
as an opportunity to strengthen the knowledge
and skills of the employees. It also recognizes the
need for the employees to be well informed and
to keep their interpersonal relationship and
commitment alive to be able to achieve shared
goals.
For Year 2014, the BLGF conducted Basic Course
on Mass Appraisal Course # 2 for Local
Assessment Operations Officers, Seminar
Workshop on Administrative Discipline for Special
Investigators,
and
Human
Resources
Management Officers, Gender Analysis and GAD
Planning for selected BLGF employees and
Teambuilding for all employees .

It is important to provide a dynamic environment for all employees, thus the need to facilitate organizational re-structuring. Our goal is to develop
our work force and maintain a stimulating office environment for employees. The approved Rationalization Plan of BLGF and continuous
performance improvement through capacity building are expected to bring about our goal for more strengthened organizational environment
that will impact on our operating culture.