Philippines, ADB ink $26.5-M Local Governance Reform Project loan

The Philippines inked a $26.5-million Asian Development Bank (ADB) loan which would finance the reforms needed to improve local property valuation and tax collection.

In a statement on Sunday, the Department of Finance (DOF) said the agreement was formally signed on July 1, for the Local Governance Reform Project (LGRP).

It was signed by Finance Secretary Carlos Dominguez III, and ADB Philippines Country Director Kelly Bird.

"This financial assistance from the ADB for the LGRP will help LGUs close the digital divide in their respective localities as they pursue property valuation and tax reforms to generate more revenues, in step with President Duterte's goal to modernize Philippine taxation and spell greater fiscal autonomy for our local governments," said Dominguez.

According to the DOF, the LFRP aims to improve the capability of LGUs in assessing and appraising property values to allow them to raise more revenues from real property taxes.

It targets to digitize the property valuation database and information system, and improve the capacity of the Bureau of Local Government Finance (BLGF).

The BLFG, an attached agency of the DOF, is tasked to assist in the formulation and implementation of policies on LGU revenue administration and fund management.

With the additional resources, the BLGF is expected to have more administrative supervision and oversight functions over the treasury and assessment operations of LGUs.

The LGRP has a total project cost of $29.8 million or around P1.56 billion, of which the $26.5 billion will be funded by the ADB and the remaining amount by the Philippine government.

The loan carriers a 28-year maturity period, inclusive of a nine-year grace period.

The ADB last week said loans to the Philippines are expected to reach a record-high $4.207 billion this year, with the lion's share going to efforts against the coronavirus disease 2019. — DVM, GMA News