experience of the philippines local government...
TRANSCRIPT
LocalGovernmentNaturalResourceRevenueManagement
andNationalBenefitSharing
NIÑORAYMONDB.ALVINABureauofLocalGovernmentFinanceDepartmentofFinancePhilippines
EXPERIENCE OF THE PHILIPPINES
LegalFrameworkThe1987Constitutionguaranteestheequitabledistributionofopportunities,incomeandwealth.Specifically,itmandatesthat:LGUsshallbeentitledtoanequitableshareintheproceedsoftheutilizationanddevelopmentoftheNationalWealthwithintheirrespectiveareas,inthemannerprovidedbylaw,includingsharingthesamewiththeinhabitantsbywayofdirectbenefits.
The1991LocalGovernmentCode(LGC)alsoprovidesforthe:“equitableshareofLGUsandlocalcommunitiesintheproceedsfromutilizationofnationalwealthbasedonaprescribedformula.”
PhilippineSub-NationalNaturalResourceRevenues
Theyhosttheminingsites,oil,andgasfields,andprincipalofficesofextractiveindustries.Theyreceiverevenuesfromextractiveindustries(throughdirectorindirectpayments).Theyshouldbeconsultedonanyprojectsthatimpactontheenvironmentandecologicalbalanceofcommunities,includingtheextractionofnaturalresources.
Localgovernmentsplayanimportantroleinsubnationalimplementationoftransparencyinitiativesonnaturalresourcerevenues:
• CollectionbasedonNationalLaws• CollectionbasedonLocalTaxCodes
DirectPayments
• SharesfromNationalWealth• InternalRevenueAllotment
IndirectPayments
HowmuchdidGovernmentCollect?Frommining,oilandgassectors
BasedontheEITI2015Report(using2013revenuedata)
LocalgovernmentsreporteddecliningsharesfromnationalwealthinFY2014,butrevenuespickedupin2015
621.10
65.20
964.56
327.35
148.10
899.04
108.00
279.35
1,217.80
0
200
400
600
800
1000
1200
1400
Provinces Cities Municipalities
SharesofLocalGovernmentsfromNationalWealth
(FYs2013-2015),inPhpM
2013 2014 2015
23%
11% 67%
AverageDistributionofSharesReceivedbyLocalGovernments
(FYs2013-2015)
Provinces Cities Municipalities
In2015,around200LGUshavereportedrevenuesfromOtherSharesfromNationalWealthestimatedatPhp1.605B
Others/EnergyResourcesProduction11.05% Forestry
Charges0.17%
MineralReservations
4.99%
MiningTaxes66.62%
UtilizationOfHydrothermal,GeothermalAndOtherSourcesOfEnergy17.17%
Nationalwealthpertaintoallnaturalresourcessituatedwithin
thePhilippineterritorialjurisdictionincludinglandsof
publicdomain,waters,minerals,coal,
petroleum,mineraloils,potentialenergyforces,gasandoildeposits,forestproducts,
wildlife,floraandfauna,fisheryandaquaticresources,andall
quarryproducts.
40%ofgrosscollectionfromminingtaxes,royalties,forestryandfisherycharges,andsuchothertaxes,fees,includinginterests,orfines,andfromitsshareinanyco-production,jointventureorproductionsharingagreementwithintheirterritorialjurisdiction.
Distributingtheshares…
Ifthenaturalresourcesarelocatedinmunicipalityor
componentcity:
Barangay,35%
Province,20%
ComponentCity/
Municipality,45%
Ifthenaturalresourcesarelocatedinhighlyurbanized
orindependentcity:
Barangay,35%
City,65%
Ifthenaturalresourcesarelocatedin2ormore
provinces,in2ormorecomponentcitiesor
municipalities,2ormorehighlyurbanizedor
independentcomponentcitiesorin2ormore
barangays
LandArea,30%
Population,70%
GoalsofRevenue/WealthSharing1. Compensateforthenegativeimpactsofuseand
exploitationofthenaturalresources;
2. Mitigateconflictsrelatedtorights/ownership/use;
3. Supportthecostofdevolvedpublicservicefunctionstobedeliveredbythelocalgovernments;and
4. Helpaddressdisparitiesindevelopment,poverty,andincomeofLGUs.
HowmuchdotheseSharesfromNationalWealthconstitutetheOperatingIncomeofLocalGovernments
2012Sharefrom
NationalWealthAnnualRegular
Income Ratio
Province 453.99 43,086.33 1.05%Cities 181.54 21,585.92 0.84%
Municipalities 1,050.57 15,500.06 6.78%Total 1,686.09 80,172.31 2.10%
2013Sharefrom
NationalWealthAnnualRegular
Income Ratio
Province 658.16 49,843.57 1.32%Cities 171.85 28,553.55 0.60%
Municipalities 1,114.16 16,350.07 6.81%Total 1,944.16 94,747.18 2.05%
2014Sharefrom
NationalWealthAnnualRegular
Income Ratio
Province 461.06 54,764.75 0.84%Cities 122.89 37,305.63 0.33%
Municipalities 934.52 19,117.32 4.89%Total 1,518.47 111,187.70 1.37%
0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00%
2012 2013 2014
DecliningtrendasIRAissignificantlyincreasingannually
Province Cities Municipalities Total
Challenges
Aneedformoretransparencyandaccountabilityintheextractiveindustriesandothersharesfromnationalwealth
Lackoforconflictinginformationontaxespaidandbenefitsreceivedbycommunitiesfromextractiveindustries
Delays,variancesinthereceiptsofrevenuesharesoflocalgovernments
LGUcollectionfromlocaltaxes,feesandothercharges;
Receiptofsharesfromnationalwealthasportionofcollectionsfromextractiveindustries;
ExpendituresofLGUsonthereceiptsfromothersharesfromnationalwealth;and
Monetaryandnon-monetarybenefitsreceivedbyLGUsfromsuchproceeds
Informationgaps,keychallenges
WiththesupportofPPEI,incoordinationwiththePH-EITI,theEnvironmentandNaturalResourcesDataManagement(ENRDMT)wasdeveloped.
ü Disclosure on receipts relating to shares in national wealth;
ü Segregation of receipts attributed to LGU code and those considered ‘sub-national payments’;
ü Enumeration of LGU expenses funded by industry collections; and
ü Enumerations of grants and donations received.
ENRDMTnowamandatoryreportingrequirementofDOFforlocaltreasurers
“It’s high time for local treasurers to
properly account for what the extractive and related sectors contribute to local
economies, and how the local communities benefit from them and from the utilization of
their natural resources.”
Carlos G. Dominguez IIISecretary of Finance
ü Online,web-basedfeaturesmakesreportingtime-boundandefficient,anddataconsolidationwillbeeasierandmoretimely
üAvailabilityofdatawillprovidecriticalsupporttosteerinvestmentdecisions,policydevelopmentandbudgetpriorities:abilitytoproperlyestimate/projectallocationsofrevenuesharesfromthenationalwealth
ü ProvidesinformationonhowLGUsspendtheirsharesfromnationalwealthandifexpenditureswereproperlyusedbasedontheactualpurposeasmandatedbylaws
üAbilitytotrackexpendituresandsectoralpriorities
Benefitsofthetool…
Movingforward…1. Bynextyear,theBLGFwouldhaveprocessedthegranular
reportsof200localgovernmentsreportingtheirdataundertheENDRMTstartingwithFY2015-FY2016reports.Thereafter,thereportswillberegularlyprovidedtoallstakeholders.
2. GovernmentiscurrentlyaddressingthroughlegislationandexecutivemechanismsonproposalsfordirectremittancetoLGUsoftheir40%sharefromnationaltaxes