MANILA, PHILIPPINES (29 June 2020) — The Asian Development Bank (ADB) has approved a $26.5 million loan to help local government units (LGUs) across the Philippines boost revenue by adopting new digital tools for local real property tax valuation and collection.
The Local Governance Reform Project will help LGUs improve real property tax collection by strengthening property valuation mechanisms, introducing new digital tools for transparent and accurate reporting, and updating tax maps and property valuation assessments. It will help LGUs build a cadre of competent, professional local assessors through capacity development and knowledge partnerships.
“Local governments play a critical role in poverty reduction. Mobilizing local revenue in an efficient, equitable, and transparent manner is vital to local governments’ goal of delivering accessible, quality public services,” said ADB Senior Public Management Specialist for Southeast Asia Robert Boothe. “This new project will provide the digital tools, systems, and local staff training needed to help local governments raise revenue.”
The revenue reforms supported by the project are part of the government’s Comprehensive National Tax Reform Program. Prior to these reforms, technical and institutional challenges had resulted in significant losses in real property tax collection by local governments. Some estimates put forgone property tax collection as high as 30 billion pesos ($600 million) from 2004–2016.
Since 2006, ADB has supported the Philippines’ efforts to improve efficiency, accountability, and transparency in local governments’ financial management and service delivery. In 2019, ADB approved a $300 million policy-based loan for the Local Governance Reform Program, which aims at helping the government create a legal and institutional framework for local revenue mobilization. The new project will support the implementation of these policy reforms at the national and local levels.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.