Topic Outline

I. Nature & Scope

II. Legal Basis for Local Fiscal Administration
III. Financial Performance
a. Province of Laguna
b. City of Calamba
c. Municipality of Santa Cruz
d. Municipality of Pagsanjan
 • Fiscal Administration
- is the act of managing incoming and
outgoing monetary transactions and budgets for
governments, educational institutions, non-profit
organizations, and other public service entities.

Source: Handbook of Local Fiscal Administration in the Philippines, Alicia B.

Celestino, Norberto G. Malvar, Romulo R. Zipagan, Sr., December 1998
 I. Nature & Scope
LOCAL FISCAL ADMINISTRATION
 Refers to systems, structures, processes, officials, and personnel and the
policy environment governing intergovernmental, and inter-local fiscal
relations,
affecting among others:
the giving & receipt of allotments and grants from the National
Government (NG) to local government units (LGUs);
 allotment sharing between LGUs;
sharing of taxing powers between the national government (NG) and
LGUs, and among LGUs;
 policy on tax rates and structures;
Source: Handbook of Local Fiscal Administration in the Philippines,
Alicia B. Celestino, Norberto G. Malvar, Romulo R. Zipagan, Sr.,
December 1998
 revenue and expenditure planning;
revenue utilization & expenditure allocation; monitoring & approval
budgets, tax ordinances & other fiscal measures;
 policy on borrowing and borrowing instruments; and
 Appointment & supervision of local fiscal officers. (Cuaresma &
Ilago)

Source: Handbook of Local Fiscal Administration in the Philippines, Alicia B.

Celestino, Norberto G. Malvar, Romulo R. Zipagan, Sr., December 1998
  This broad definition comprehends 5 major elements as the scope of LFA.
These are:
 Systems
 Structures;
 Processes;
 Official/personnel; and
 Policy environment governing inter-governmental and inter-local fiscal
relations.

• In public administration, Local Fiscal Administration is commonly

referred to as the formulation, implementation, and evaluation
of local fiscal policies by local governments.
Source: Handbook of Local Fiscal Administration in the Philippines, Alicia B. Celestino, Norberto
G. Malvar, Romulo R. Zipagan, Sr., December 1998
 Local Government Finances
• Fiscal relations between national and local government centre on the
following major areas of fiscal administration ;
 Allotment of internal revenue shares;
 Shares of local governments in national wealth exploitation;
 Shares of earnings of government agencies or government-owned or
controlled corporations engaged in the utilization & development of
national wealth
 Local government borrowing; and
 Review of local government budgets.

Source: Local Fiscal Administration, Jocelyn C. Cuaresma and

Simeon A. Ilago
Aspects of Local Fiscal Administration
1. The fiscal relations between the national government and its
agencies, on the one hand, and the LGUs on the other, which we
may call vertical financial relations. This is also referred to in the
literature as central-local fiscal relations, with the Internal
Revenue Allotments at its core; and
2. The fiscal relations among LGUs themselves, which may be
referred to as the inter-local fiscal relations.

Source: Local Fiscal Administration, Jocelyn C. Cuaresma and

Simeon A. Ilago
Scope
The definitions of local fiscal administration enumerated the
areas covered. However, it is helpful to specify once more
the scope of the field according to their functional
categories, which fall into the main traditional divisions of:
A. Revenue Generations:
• All aspects of local taxation;
• Borrowing and its management;
• Operation of public enterprises;
• Revenue enhancement measures;
• Revenue planning, forecasting and accounting;
Source: Local Fiscal Administration, Jocelyn C. Cuaresma and Simeon A. Ilago
Scope
B. Revenue Allocation and Utilization
• Budgeting system & process, including the linkage of planning
and budgeting, expenditure planning, expenditure allocation
and expenditure monitoring;
• Accounting and auditing of expenditures;
C. Other Aspects
• Property and supply management;
• Internal control which cuts across all fiscal functions; and
• Other related matters, like the central grant and allotment
system, organization for local fiscal administration, and
computerization of fiscal operations/systems.
Source: Local Fiscal Administration, Jocelyn C. Cuaresma and Simeon A. Ilago
 II. Legal Basis for Local Fiscal Administration
1987 Philippine Constitution
Section 2, Article X
“The territorial & political subdivisions shall enjoy local Autonomy”

Source: The 1987 Constitution, Rex Bookstore 2001 Edition, Philippines

 Number of Provinces, Cities, and Municipalities by Region
(As of June 30, 2022)

Source: https://dilg.gov.ph/PDF_File/factsfigures
 2022 INTERNAL REVENUE ALLOTMENT

Source: DBM-Local Budget Memorandum No. 82-A

2023 INTERNAL REVENUE ALLOTMENT

Source: DBM-Local Budget Memorandum No. 85-B

 LOCAL GOVERNMENT CODE OF 1991
Section 289. Share in the Proceeds from the Development and Utilization of the National
Wealth.

 The Local Government Code provides that local government shall have an equitable share in
the proceeds derived from the utilization and development of national wealth within their
respective areas and sharing these with the inhabitants by way of direct benefits.

Section 290. Amount of Share of Local Government Units.

 Local government units shall, in addition to the internal revenue allotment, have a share of
forty percent (40%) of the gross collection derived by the national government from the
preceding fiscal year from mining taxes, royalties, forestry and fishery charges, and such
other taxes, fees, or charges, including related surcharges, interests, or fines, and from its
share in any co-production, joint venture or production sharing agreement in the utilization
and development of the national wealth within their territorial jurisdiction.

Source: www.officialgazette.gov.ph
 LOCAL GOVERNMENT CODE OF 1991
Section 291. Share of the Local Governments from any Government
Agency or Government-Owned or -Controlled Corporation.
 Local government units shall have a share based on the preceding fiscal year
from the proceeds derived by any government agency or government-owned
or -controlled corporation engaged in the utilization and development of the
national wealth based on the following formula whichever will produce a
higher share for the local government unit:
(a) One percent (1%) of the gross sales or receipts of the preceding
calendar year; or
(b) Forty percent (40%) of the mining taxes, royalties, forestry
and fishery charges and such other taxes, fees or charges,
including related surcharges, interests, or fines the
government agency or government-owned or - controlled
corporation would have paid if it were not otherwise exempt.

Source: www.officialgazette.gov.ph
 Powers in Pursuance of Local Fiscal Administration
1. General Welfare Clause (Sec. 16, RA 7160)
– Every local government unit shall exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers necessary, appropriate, or
incidental for its efficient and effective governance, and those which are
essential to the promotion of the general welfare. Within their respective
territorial jurisdictions, local government units shall ensure and support, among
other things, the preservation and enrichment of culture, promote health and
safety, enhance the right of the people to a balanced ecology, encourage and
support the development of appropriate and self-reliant scientific and
technological capabilities, improve public morals, enhance economic prosperity
and social justice, promote full employment among their residents, maintain
peace and order, and preserve the comfort and convenience of their
inhabitants.
Source: www.officialgazette.gov.ph
 Powers in Pursuance of Local Fiscal Administration
2. Power to Generate and Apply Resources (Sec. 18, RA 7160)
– Local government units shall have the power and authority to
establish an organization that shall be responsible for the efficient and
effective implementation of their development plans, program
objectives and priorities; to create their own sources of revenues and to
levy taxes, fees, and charges which shall accrue exclusively for their use
and disposition and which shall be retained by them; to have a just
share in national taxes which shall be automatically and directly
released to them without need of any further action; to have an
equitable share in the proceeds from the utilization and development of
the national wealth and resources within their respective territorial
jurisdictions including sharing the same with the inhabitants by way of
direct benefits; …
Source: www.officialgazette.gov.ph
Continuation…
2. Power to Generate and Apply Resources (Sec. 18, RA 7160)

…to acquire, develop, lease, encumber, alienate, or

otherwise dispose of real or personal property held by
them in their proprietary capacity and to apply their
resources and assets for productive, developmental, or
welfare purposes, in the exercise or furtherance of their
governmental or proprietary powers and functions and
thereby ensure their development into self-reliant
communities and active participants in the attainment of
national goals.
 Powers in Pursuance of Local Fiscal Administration
3. Reclassification of Lands (Sec. 16, RA 7160)
–(a) A city or municipality may, through an ordinance passed by the sanggunian after
conducting public hearings for the purpose, authorize the reclassification of
agricultural lands and provide for the manner of their utilization or disposition in the
following cases:

(1)when the land ceases to be economically feasible and sound for

agricultural purposes as determined by the Department of
Agriculture or

(2 )where the land shall have substantially greater economic value

for residential, commercial, or industrial purposes, as
determined by the sanggunian concerned:

Source: www.officialgazette.gov.ph
Powers in Pursuance of Local Fiscal Administration
Provided, That such reclassification shall be limited to the following percentage of the
total agricultural land area at the time of the passage of the ordinance:

(1) For highly urbanized and independent component cities,

fifteen percent (15%);
(2)For component cities and first to the third class municipalities,
ten percent (10%);and
(3) For fourth to sixth class municipalities, five percent (5%):
Provided,

further, that agricultural lands distributed to agrarian reform beneficiaries

pursuant to
R.A. No. 6657 otherwise known as “The Comprehensive Agrarian Reform Law”, shall
not be affected by the said reclassification and the conversion of such lands into
Source: www.officialgazette.gov.ph
other purposes shall be governed by Section 65 of said Act.
 Powers in Pursuance of Local Fiscal Administration

4. Closure and opening of roads (Sec. 21, RA 7160)

1. – A local government unit may, pursuant to an ordinance,

permanently or temporarily close or open any local road, alley,
park, or square falling within its jurisdiction: Provided, however,
that in case of permanent closure, such ordinance must be
approved by at least two-thirds (2/3) of all the members of the
sanggunian, and when necessary, an adequate substitute for the
public facility that is subject to closure is provided.

Source: www.officialgazette.gov.ph
 Powers in Pursuance of Local Fiscal Administration
5. Corporate Powers (Sec. 22, RA 7160)

–(a) Every local government unit, as a corporation, shall have the

following powers:
(1) To have continuous succession in its corporate name;
(2) To sue and be sued;
(3) To have and use a corporate seal;
(4) To acquire and convey real or personal property;

Source: www.officialgazette.gov.ph
 Powers in Pursuance of Local Fiscal Administration
6. Authority to negotiate and secure grants (Sec. 23, RA 7160)

– Local chief executives may, upon authority of the sanggunian, negotiate and
secure financial grants or donations in kind, in support of the basic services or
facilities enumerated under Section 17 hereof, from local and foreign assistance
agencies without necessity of securing clearance or approval therefor from any
department, agency, or office of the National Government or from any higher
local government unit: Provided, That projects financed by such grants or
assistance with national security implications shall be approved by the national
agency concerned: Provided, further, That when such national agency fails to
act on the request for approval within thirty (30) days from receipt thereof, the
same shall be deemed approved.
Source: www.officialgazette.gov.ph
 Powers in Pursuance of Local Fiscal Administration

7. Liability for damages (Sec. 24, RA 7160)

– Local government units and their officials are not
exempt from liability for death or injury to persons or damage to
property.

Source: www.officialgazette.gov.ph
 Other Laws and Government Issuances
Local fiscal administration is also governed by laws and issuances from the national agencies that
exercise supervisory power over local government units. Such agencies are the following:
a. Department of Finance (DOF)
- The DOF maintains the Bureau of Local Government
Finance (BLGF) which is the unit primarily involved in local
financial administration.
- Provides technical assistance and training for local
governments on local finance.
- It administers credit facilities such as the Municipal
Development Fund, and prepares guidelines and standards
on matters related to taxation, credit financing, and
imposition of various fees and charges.
- It also exercises technical supervision on local assessment
and treasury operations, and performs monitoring and
evaluation of financial performance.
Other Laws and Government Issuances
b. Department of Budget and Management (DBM)
- The DBM is primarily responsible for
disseminating information on Internal
Allotment (IRA) allocation and the local
Revenue
government’s share from the
utilization
development of national wealth. and
- The Department releases the share of internal
revenue allotment directly to the provinces,
cities, municipalities and barangays.
Other Laws and Government Issuances
c. Commission on Audit (COA)
- The COA is primarily responsible for the accountability
phase of the local budget process.
- The Commission maintains the Local
Government Audit(LGAO), through
Office which it implements
auditing rules and regulations in local government
units.
- The Commission also settles accounts and fixes the
liability of accountable officers, as well as determines
whether fiscal responsibility has been properly and
effectively discharged by the local chief executives.
Other Laws and Government Issuances

d. Department of Interior and Local Government (DILG)

- The DILG, upon which the supervisory power of the President is
reposed, at times issues guidelines which are fiscal-related
e. Office of the President (OP)
- The President of the Philippines has general
supervisory power over the local government units, as
provided by Section 4 of the 1987 Constitution. As
such, the OP still issues from time to time executive
and administrative orders that affect local government
units.
 EXECUTIVE ORDER NO. 249 S. 1987
CLASSIFICATION OF PROVINCES/CITIES
CLASS AVERAGE ANNUAL INCOME
First Thirty million pesos or more
Second Twenty million pesos or more but less than thirty million pesos
Third Fifteen Million Pesos or more but less than twenty million pesos
Fourth Ten million pesos or more but less than fifteen million pesos
Fifth Five million pesos or more but less than ten million pesos
Sixth Less than five million pesos
* * Except Manila and Quezon City

Source: www.officialgazette.gov.ph
 EXECUTIVE ORDER NO. 249 S. 1987
CLASSIFICATION OF MUNICIPALITIES
CLASS AVERAGE ANNUAL INCOME
First Fifteen million pesos or more
Second Ten million pesos or more but less than fifteen million pesos
Third Five Million Pesos or more but less than ten million pesos
Fourth Three million pesos or more but less than five million pesos
Fifth One million pesos or more but less than ten million pesos
Sixth Less than one million pesos

Source: www.officialgazette.gov.ph
Laguna
• The Province of Laguna, is located in the
CALABARZON region in Luzon, southeast of
Metro Manila, south of the Province of Rizal,
west of Quezon, north of Batangas and east of
Cavite. Laguna hugs the southern shores of
Laguna de Bay, the largest lake in the country
and covers a total area of 1,917.85 km. The
Province of Laguna, which was formerly called
La Laguna and La Provincia de la Laguna de Bay,
was named after Laguna de Bay, the body of
water that forms its northern boundary. It is
composed of six cities, 24 municipalities and
674 barangays divided into six congressional
districts.
Laguna
• Laguna is notable as the birthplace of José Rizal, the
country's de facto national hero. It has numerous
natural and cultural attractions such as Pagsanjan
Falls, the University of the Philippines Los Baños and
the University of the Philippines Open University in
Los Baños, the hot spring resorts of Calamba on the
slopes of Mount Makiling, Pila historic town plaza,
Taytay Falls in Majayjay, the wood carvings and
papier-mâché created by the people of Paete, the
annual Sampaguita Festival in San Pedro, the turumba
of Pakil, the tsinelas footwear from Liliw, the Pandan
Festival of Luisiana, the Seven Lakes of San Pablo, and
the Nagcarlan Underground Cemetery in Nagcarlan.
 FINANCIAL PERFORMANCE
2021 2020 Increase /
(Decrease)

Revenue P 355,770,545.45
P 4,673,146,345.01 P 4,317,375,799.56
Expenses 98,446,642.18
3,287,886,843.54 3,189,440,201.36
Net: 308,753,951.76
Transfers, Assistance (369,775,447.23) (61,021,495.47)
and Subsidy
Surplus (Deficit) P (51,430,048.49)
1,015,484,054.24 1,066,914,102.73

Source: 2021 COA Annual Audit Report

CITY OF CALAMBA
The City of Calamba is a 1st class component city
in the province of Laguna, created by virtue of
Republic Act (RA) No. 9024 on March 5, 2001 and
confirmed by a plebiscite on April 21, 2001 as a full-
fledged City. It is situated 50 kilometers (km) south
of Manila, 37 km west of Santa Cruz, Laguna, 31
km north of San Pablo, Laguna and 23.6 km east of
Tagaytay. With a total land area of 14,480 hectares,
the City is politically subdivided into 54 barangays
with total estimated households of 95.003.

The City also takes pride in being the birthplace of the Philippine National Hero, Dr. Jose P.
Rizal. Born and raised in Calamba, he was great pride and inspiration to the City and being
honored in Buhayani Festival, dubbed as “Buhay ng Bayan, Buhay ng Bayani” celebrated
every 19th day of June, his actual date of birth.
 FINANCIAL PERFORMANCE
2021 2020 Increase /
(Decrease)

Revenue P 4,983,981,042.31 P 4,600,969,592.08 P 383,011,450.23

Expenses 476,231,675.24
4,516,279,175.88 4,040,047,500.64
Net: (124,732,625.94) (20,028,187.05) 104,704,438.89
Transfers, Assistance
and Subsidy
Net Other Non- 1,771,850.26
Operating Income (Loss) 3,414,134.88 1,642,284.62
Surplus (Deficit) P 346,383,375.37 P 542,536,189.01 P (196,152,813.64)

Source: 2021 COA Annual Audit Report

 REVENU
Individual and Corporation
E
Property

Tax Revenue

Goods and Services

Other Taxes

Source: www.coa.gov.ph
 REVENU
E
Permits & Licenses

Service Income Certificate Fees

Processing Fees

Source: www.coa.gov.ph
 REVENU
E
School Fees

Business Income Rent/Lease

Other Business Income

Source: www.coa.gov.ph
MUNICIPALITY OF SANTA CRUZ
The Municipality of Santa Cruz is the capital town of
the Province of Laguna. It is classified as a first class
Municipality and is composed of 26 Barangays.
According to the 2020 census, it has a total population
of 123,574 people.

The capital town of Laguna is considered as the service

and commercial center on the eastern part of the
province. It is also known for its Kesong Puti Festival
held to further promote the various food products that
took significant participation in the development of the
Municipality’s culinary history, as well as the cultural
uniqueness and industrial prowess of Santa Cruz.
 FINANCIAL PERFORMANCE
2021 2020 Increase /
(Decrease)

Revenue 398,500,824.44 P 24,641,824.21

423,142,648.65
Expenses 11,890,250.56
420,220,766.67 408,330,516.11
Net: (2,664,646.60) 21,449,430.11 (24,114,076.71)
Transfers, Assistance
and Subsidy
Surplus (Deficit) P 257,235.38 P 11,619,738.44 P (11,362,503.06)

Source: 2021 COA Annual Audit Report

 REVENU
Individual and Corporation
E
Property

Tax Revenue

Goods and Services

Other Taxes

Source: www.coa.gov.ph
 REVENU
E
Permits & Licenses

Service Income Certificate Fees

Processing Fees

Source: www.coa.gov.ph
 REVENU
E
Rent

Business Income Receipts from various operations

Other Business Income

Source: www.coa.gov.ph
MUNICIPALITY OF PAGSANJAN
Pagsanjan is among the oldest settlements in Laguna, being
one of the prominent trading posts of Chinese merchants in
the province of Laguna upon the coming of the Spaniards
at the turn of the 16th century. Following its cessation as a
barrio of Lumban in 1668 to become an independent civil
entity, it evolved into a bustling community to eventually
become the capital town of the province until 1858.

Tourism essentially breathes life to Pagsanjan. Its heart is

Pagsanjan Falls – a magnificent 97-meter waterfall situated
about 4.8 kilometers from the town via the upstream of
Bumbungan River. Since the first published account of a
traveler named Joseph Earle Stevens about the falls in his
book in 1894, Pagsanjan became synonymous to
adventure.
 FINANCIAL PERFORMANCE
2021 2020 Increase /
(Decrease)

Revenue 201,316,059.96
168,867,020.28 P (32,449,039.68)
Expenses
160,002,143.88 162,729,680.61 (2,727,536.73)
Net:
Transfers, Assistance 21,833,935.76 (776,886.37)
22,610,822.13
and Subsidy
Surplus (Deficit)
P 30,698,812.16 P 37,809,492.98 P (7,110,680.82)

Source: 2021 COA Annual Audit Report

 REVENU
Individual and Corporation
E
Property

Tax Revenue

Goods and Services

Other Taxes

Source: www.coa.gov.ph
 REVENU
E
Permits & Licenses

Service Income Certificate Fees

Processing Fees

Source: www.coa.gov.ph
 REVENU
E
Rent

Business Income Receipts from various operations

Other Business Income

Source: www.coa.gov.ph
References:
1. Handbook of Local Fiscal Administration in the Philippines, Alicia B.
Celestino, Norberto G. Malvar, Romulo R. Zipagan, Sr., December 1998
2. The 1987 Constitution, Rex Bookstore 2001 Edition, Philippines
3. The Local Government Code of 1991, Rex Bookstore 2001 Edition,
Philippines
4. Local Fiscal Administration, Jocelyn C. Cuaresma and Simeon A. Ilago
5. DBM Memorandums and Issuances
6. COA Annual Audit Reports and Issuances
Suppose one of you wants to build a tower. Won’t you first sit down and estimate
the cost to see if you have enough money to complete it? For if you lay the
foundation and are not able to finish it, everyone who sees it will ridicule you,
saying, “This person began to build and wasn’t able to finish.”

Luke 14:28-30