Philippines: Support to Local Government Revenue Generation and Land Administration Reforms

Sovereign Project | 43205-012

Summary

The Technical Assistance is included in ADB's Country Operations Business Plan 2010-2012 under the title Support to POlicy Development on Decentralization and Local Governance.

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Project Name Support to Local Government Revenue Generation and Land Administration Reforms
Project Number 43205-012
Country Philippines
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 7809-PHI: Support to Local Government Revenue Generation and Land Administration Reforms
Japan Fund for Poverty Reduction US$ 1.50 million
TA 7809-PHI: Support to Local Government Revenue Generation and Land Administration Reforms (Supplementary)
Technical Assistance Special Fund US$ 750,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Partnerships
Sector / Subsector

Public sector management - Decentralization - Public expenditure and fiscal management

Gender Equity and Mainstreaming No gender elements
Description
Project Rationale and Linkage to Country/Regional Strategy The Technical Assistance is included in ADB's Country Operations Business Plan 2010-2012 under the title Support to POlicy Development on Decentralization and Local Governance.
Impact The TA will expand the delivery of economic and social services in participating LGUs.
Project Outcome
Description of Outcome Participating LGUs use improved land management and administration systems, including property valuation and taxation innovations, to generate increased local government revenues
Progress Toward Outcome

REGALA 2 covers 14 local government units (LGUs): 4 mature LGUs from REGALA 1 (Bayawan City, Legazpi City, Tayabas City, and San Carlos City); 6 upscaled LGUs from REGALA 1 (Ligao City, Alaminos City, San Jose de Buenavista, the Provincial Government of Ilocos Norte (PGIN), and the municipalities of Piddig and San Nicolas under the province of Ilocos Norte); and 4 new municipal LGUs under the province of Ilocos Norte (Sarrat, Solsona, Marcos and Pagudpud).

All participating LGUs under REGALA 1 reported yearly increases in real property taxes (RPT) and business taxes (BT) from 2011 to 2013: (i) average of 10% RPT increase, and 5% BT increase among mature LGUs (Cities of Bayawan, Legazpi, Tayabas and San Carlos); and (ii) average of 26.09% RPT increase, and 29.45% BT increase among upscaled LGUs (Ligao City, San Jose de Buenavista, Alaminos City, Municipalities of Piddig and San Nicolas in Ilocos Norte). The increases resulted from the use of computerized land information system (installed and/or enhanced under REGALA 1) which facilitated the identification of new real property units (RPU) and tax delinquencies, improved management of tax records, and reduced discretionary tax assessment and RPT/BT computation. In January 2015, San Carlos City collected P10.22 million in real property taxes (29% higher than the collection in January 2014). This is partly due to the updating of property values which took effect in January 2015.

The cities of Bayawan, Legazpi, San Carlos and Tayabas expanded the utility of Geographic Information System (GIS)-based land information system to generate thematic maps in aid of the LGUs'' socio-economic planning.

San Carlos City, Alaminos City, Ligao City, San Jose de Buenavista, Piddig and San Nicolas continue using computerized land information system to operate an online Business Permit and Licensing System (BPLS).

Implementation Progress
Description of Project Outputs

Output 1: Participating LGU and partner national LAM agencies collaborate actively,effectiely and efficiently in the delivery of improved LAM services to the public. This entails the selection of LGUs, settig upt of an inter-agency LAM Steering Committee to provide policy and program directions and implementation oversight. This will ensure complementation across agencies and information sharing. This also includes human resources development/management, LAM policy development and advocacy on governance of LAM revenues and expenditures and the extablishment of LAM Services Office cum One-Stop-Shop to improve delivery of services to the various stakeholders.

Output 2: Unified land information systems are established and operating in participating LGUs and partner LAM agencies

Output 3: Property valuation policies and practices are updated in mature participating LGUs

(note: revenue generation due to change in SMV would likely occur after May 2013 elections)

Output 4: Zoning plans and comprehensive land use plans (CLUPs) are revised with stakeholder participation (note, only for mature and/or upscaled participating LGUs)

Output 5: Land tenure status of participating LGUs is assessed and appropriate land tenure improvement and financing strategies and plans are prepared

Status of Implementation Progress (Outputs, Activities, and Issues)

OUTPUT 1: The National Steering Committee (NSC), an inter-agency committee formed by REGALA, continues to play an important role in providing policy/program directions and necessary strategic support to REGALA 2. In June 2014, the NSC approved the inclusion of the municipalities of Sarrat, Solsona, Marcos and Pagudpud under the province of Ilocos Norte to expand REGALA''s provincial model.

Local Steering Committees (LSCs) have been set up as well in all participating LGUs to facilitate information-sharing and data access. REGALA assisted Bayawan City in preparing a one-stop shop (OSS) concept paper, as well as trained LGU staff in preparing the OSS manual of operations. REGALA 2 will strengthen and sustain existing LSCs, including the LSC of PGIN to cover the 4 new LGUs. In January 2015, the LSC of Legazpi City reorganized and expanded its membership to include representatives from the Housing and Land Use Regulatory Board, the Department of Interior and Local Government, and the Bureau of Internal Revenue.

OUTPUT 2: Unified land information system using GIS and Enhanced Tax Revenue Assessment and Collection System (ETRACS) have been installed in all mature and upscaled LGUs with varied degrees of operation: the mature LGUs are maintaining the system and building up the digital cadastral database, while the upscaled LGUs are building up the GIS and ETRACS databases. The 4 new LGUs have completed basic ETRACS users' training, as well as basic and advanced GIS trainings. GIS data build-up is underway, while ETRACS procurement packages are being rebidded. The TA is discussing with PGIN other options to ensure the rollout of the IT systems within the limited timeframe of REGALA 2.

OUTPUT 3: The City and Provincial Councils of 3 mature LGUs (Legazpi City, Tayabas City, and San Carlos City) have respectively approved the schedule of market values (SMVs) which were revised through REGALA 1. The City Council of Bayawan is reviewing the revised SMV. San Carlos City completed the general revision of assessments and property classification (GR), and has commenced the collection of real property taxes in January 2015 using the updated property values. GR and tax mapping are underway in the other 3 mature LGUs.

Capacity development activities are ongoing in 3 upscaled LGUs (Ligao City, Alaminos, and PGIN) to support the updating of property values. Ligao City has completed a basic course on mass appraisal, as well as a training on tax compliance study. REGALA 2 is mentoring the Offices of Planning, Assessor and Treasurer of Alaminos City on how to effectively present and generate strong buy-in on the revised SMV from the Local Chief Executive, and the City Council. Through its own initiative, PGIN has approved the province's revised SMV. REGALA 2 will assist PGIN in the imposition of judicial and administrative remedies for delinquent real properties, where justified.

REGALA 2 drafted a capacity development plan for the Bureau of Local Government Finance (BLGF) as reference for the institution''s future directions and project conceptualization. Given limited resources, REGALA 2 will focus on developing the competencies of BLGF central and regional staff on revenue generation, property valuation reforms, and the implications of the Local Government Code on real property taxes.

OUTPUT 4: REGALA 1 assisted 3 mature LGUs ( Bayawan City, Tayabas City, and San Carlos City) in preparing disaster risk-sensitive Comprehensive Land Use Plans (CLUPs), and Comprehensive Development Plans (CDPs). The CLUP and CDP of San Carlos City were approved by the City and Provincial Councils. The City Council of Bayawan; and the Provincial Council, and Provincial Land Use Committee of Tayabas are respectively reviewing their CLUP and CDP. REGALA 2 has reviewed, and will support the updating of the CLUP of Ligao City. A visioning workshop was also facilitated by REGALA 2 for Alaminos City.

REGALA 1 assisted Legazpi City in developing Disaster Risk Reduction and Management (DRRM) Plan, and Climate Change Adaption (CCA) Plan, including the establishment of institutional arrangements to implement these plans. These plans were approved by the City Council, and are now ready for implementation. Bayawan City, Tayabas City, and San Carlos City are in various stages of preparing their DRRM/CCA Plans.

All 4 mature LGUs are in the process of drafting the terms of reference for developing the area master plan for preferred new urban forms. An area master plan is prepared based on the approved CLUP, hence, only the mature LGUs will be assisted by REGALA 2.

OUTPUT 5: Legazpi City, San Carlos City, and the municipalities of Piddig and San Nicolas completed their respective land tenure improvement studies. Due to the national and local election, Alaminos City postponed the Land Tenure Improvement Planning (LTIP) workshop. Tayabas did not pursue LTIP; instead a land tenure issues matrix was drafted. Limited TA support will be extended under REGALA Phase 2.

Geographical Location 10 LGUs will be identified in selection process.
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation

1. National Steering Committee (NSC) consisting of representatives from national LAM agencies (DENR, LRA, BLGF, DILG) and leagues of cities, municipalities and provinces are convened regularly to update stakeholders on project progress and consult them on program directions. Fourteen participating LGUs were selected with NSC concurrence. REGALA also formed Local Steering Committees (LSCs), consisting of representatives of local LAM agencies, to facilitate information-sharing and data access.

2. Participation of LGU-grantees in all stages of project implementation is maximized. Knowledge-sharing and mentoring between mature and new LGUs is embedded in the project design.

3. DRRM/CCA-sensitive CLUPs were formulated with the participation of sectoral committees formed by the project.

4. Various knowledge events have been organized to share knowledge on the project''s design, progress, good practices and emerging lessons learned.

5. Project results have been communicated to BLGF and the Department of Finance (DOF). The DOF Secretary responded positively by requesting ADB for further assistance to roll out REGALA's good practices and positive results.

Business Opportunities
Consulting Services

Consulting Firm via Single Source Selection Method

The team will consist of a project management team (positions A-G) and a technical team (J-K) organized and managed by the consulting firm. The Project/Grant Management Team shall be composed of one (1) project director, four (4) core staff and 2 administrative and finance assistants. The technical team will be composed of four (4) core technical staff with different specialization.

Listed below are the spefici positions for the Project/Grant Management Team members:

A. Project Director (international, 4 person-months)

B. Grant Manager (national, 24 person-month)

C-E. Program Officer/Knowledge Specialist Specialist (3) (national, 24 person-months)

F. Senior Administration Officer (national, 24 person-months)

G. Finance Officer (national, 24 person-months)

H. Geographic Information System Specialist (national, 5 person-months)

I. Property Valuation and Taxation (national, 5 person-months)

J. Monitoring and Evaluation/External Evaluation (national, 2 person-months)

K. Land Management and Investment Planning (national, 6 person-months)

Responsible ADB Officer Joven Z. Balbosa
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Philippines Country Office
Executing Agencies
Bureau of Local Government FinanceMinistry of Finance
7th Floor, Palacio del Gobernador Bldg.
Intramuros, Manila
Timetable
Concept Clearance 21 Sep 2010
Fact Finding 15 Sep 2010 to 29 Sep 2010
MRM -
Approval 19 May 2011
Last Review Mission -
PDS Creation Date 14 Oct 2010
Last PDS Update 31 Mar 2015

TA 7809-PHI

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
19 May 2011 17 Jun 2011 17 Jun 2011 30 Jun 2013 30 Sep 2015 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
750,000.00 1,500,000.00 100,000.00 0.00 0.00 0.00 2,350,000.00 19 May 2011 1,721,064.02

Safeguard Documents

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Evaluation Documents

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