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Economic Team Wants LGUs To Expand Revenue Sources, Boost Spending

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The country’s economic managers on Tuesday urged President Ferdinand R. Marcos Jr. to encourage local government units (LGUs) to expand their revenue sources and boost spending to support local and national growth.

This, as the economic team acknowledged the LGU’s crucial role in attaining a more inclusive economic growth, Finance Secretary Benjamin Diokno said in a Palace press briefing.

Diokno said Marcos, in a sectoral meeting at Malacañan Palace in Manila on Tuesday morning, was asked to intervene to address the issues concerning the LGUs.

“The LGUs continue to be dependent on the national transfer despite its broad powers to raise sources of revenue. Lagi silang nakaasa sa transfer from the national government and [meron silang] ang tawag namin ay (They always rely on the transfer from the national government and they do not have what we call) low absorptive capacity to improve the quality of public goods and services that they are supposed to deliver,” Diokno said.

“So, kumbaga sinasabi natin sa LGUs, ‘Bilis-bilisan naman ninyo ang paggastos ng pera’ (So, it’s like we’re telling the LGUs, ‘Expedite the spending of money’)… Marami silang pera pero hindi nila nagagastos (They have a lot of money but they don’t spend it),” he added.

Diokno said the LGUs’ low spending “has always been the problem,” adding that they are “in surplus position whereas the national government is in a deficit position.”

He noted that local officials tend to be “shy” when it comes to investing in some projects.

Diokno added that LGUs are not borrowing money, even if they can do so.

“So, in response, I think we are going to tap the Development Academy of the Philippines and the Local Government Academy to train people who may actually be instrumental in investing in some local government activities,” he said.

Diokno said the economic managers also recommended pursuing catch-up plans for the fourth quarter of 2024 and avoiding underspending in the first semester of 2024.

The proposal, he said, would improve budget utilization rate and address problems in program and project implementation.

“These are the measures that we want them to do. And kasama na diyan ‘yung tinatawag na (Included there is the) early procurement activity,” Diokno said. (PNA)