MODULE I Self-Test

1. This strategy has greatly improved the delivery of basic services special for the people living far
from the municipality, in line with this, the citizen will no longer have to travel the distance to
avail the basic services. For example, people can now get their vaccination thru barangay clinic.
2. There are many possible reasons why our government cannot maximize the use of their taxing
power to improve the lives of the people. Corruption and Inadequate legislation, the
government does relatively little to meaningful action in reducing poverty, dealing with rapid
population growth, and raising standards of living. Poor planning and implementation of public
goods, infrastructure and property rights inhibit the economic growth in all sectors.
In my own opinion, the first thing to do is to have proper discipline starting with
ourselves. People should also support the government projects. Another sensible solution to
improve the life of Filipinos is to stop the corruption system not only in the government but also
in the private sectors.
3. During this Pandemic, our LGU is experiencing financial problem, the main reason for this is that
our tourism is closed which is one of the main sources of income in our municipality. The
backout of possible investors also have a big impact on the economy.
Here are the possible sources of income in our LGU:
 Internal Revenue Allocation
 Economic Development Projects
 Livelihood Projects (Livestock Dispersal)
 Promotion and Development of Organic Fertilizer
 Provision of Skills training on Farming & Livestock Raising
 Enhancement of Agricultural Production
 Taxes for Government Services
 Exporting of Goods
 Preservation of Historical Places for tourism

Decentralization helps alleviate the bottlenecks in decision making that are often caused by
central government planning, control of important economic and social activities. This can help cut
complex bureaucratic procedures and it can increase government officials' sensitivity to local conditions
and needs. Moreover, decentralization can help national government ministries reach larger numbers of
local areas with services, allow greater political representation for diverse political, ethnic, religious, and
cultural groups in decision-making, and relieve top managers in central ministries of routine tasks to
concentrate on policy but it may not always be efficient, especially for standardized routine, network-
based services. It can result in the loss of economies of scale and control over scarce financial resources
by the central government. Weak administrative or technical capacity at local levels may result in
services being delivered less efficiently and effectively in some areas of the country. Administrative
responsibilities may be transferred to local levels without adequate financial resources and make
equitable distribution or provision of services more difficult. Decentralization can sometimes make
coordination of national policies more complex and may allow functions to be captured by local elites.
Also, distrust between public and private sectors may undermine cooperation at the local level.
 In my own opinion, we can continue using the Decentralization policy with proper allocation of
funds needed for municipalities, but it will need a thorough analysis, must weigh, and decide on what is
important in treating various issues. Decentralization will be effective if the government officials are
knowledgeable and capable of handling difficult situations with effective decision making.

4. Payment of taxes ay ok para sa akin. kasi naibabalik din sa atin ito ng gobyerno in the form of
essential services para sa tao gaya ng pagbili ng mga bakuna, sahod ng mga pulis / sundalo
galing sa taxes natin yon at iba pang economic benefits gaya ng mga pag construct ng mga
daan, tulay etc. – Joseph Raymond Natividad.
If the taxes are being put to good use and beneficial to my constituents, I will continue
the implementation of project and services, moreover I will prioritize and improve the projects
which are more impactful to the livelihood of my people.
5. Project title:
“3 R’s Project”
Project Proponent:
This project is headed by Zone 4 Barangay Hall
Project Rational:
This project promotes cleanliness and awareness about 3 R’s (Reuse, Reduce, Recycle)
Project Objective:
- To expose people of barangay in different environmental activity
- To promote the awareness of the people to recycle
- To reduce solid waste
- To raise fund and support the barangay projects

Project description:

This project will be accomplished thru the help of our barangay officials and the support
of all people in Zone 4. Each household should collect all their cans and bottles and put it on the
designated recycling area. Every Week, the barangay officials should designate a person to collect all the
cans and bottle from the recycling area and sell it to the Junk Shop to create a revenue to support the
upcoming barangay projects. It will also help reducing our solid waste and practicing discipline for our
environment.
MODULE II Self-Test

1.
a. TAXATION
 Increasing the revenue for all government/public expenditure is the primary objective of
taxation. Public expenditures grow as fast as the national product, taxes, as the main
vehicle of government finance, should produce revenues that grow correspondingly.

b. COLLECTION OF CHARGE
 It can consider alternatives for increased taxation, particularly in developing countries
like the Philippines which cannot rely on more taxes having no strong tax base to collect
from to generate more revenue and to ensure the sustainability of providing quality
services.

Two main objectives are:

 Efficient resource management – to downsize the government’s spending and yet

maintain its obligation of providing efficient services to the public
 Cost recovery principle, to relieve the government of its funding burden

c. IMPOSITION OF FEES
 Cost recovery is the primary objective of imposing of fees. Hence the rate of fees and
charges must be rational and should at least be able to recover the operating expenses
incurred in rendering the service.
2.
A. The annual regular revenue of Bantay for the fiscal year of 2016 was ₱145,487,137.92.
(https://www.philatlas.com/)
 Annual Regular Income = Locally Sourced Revenue + Internal Revenue Allotment (IRA) Current Year + Other
Shares from National Tax Collection
 Locally Sourced Revenue = Real Property Tax (General Fund) + Tax on Business + Other Taxes + Regulatory
Fees + Service/User Charges + Receipts from Economic Enterprises

Top 3 source of revenue in Bantay Municipality

a. Tax on Business- Tax Revenue
b. Real Property Tax- Tax Revenue
c. Receipts from Economic Enterprises- Non- Tax Revenue

The top 1 stable source of financing is business taxes collection. Second is Real Property
Tax, while they have no taxing powers over real properties, municipalities are entitled to get
a share of RPT collections from their provincial government. The receipts from economic
enterprises are the main source of LGU’s non-tax revenues. These include slaughterhouse
and corrals, markets, health services, rental of facilities, and mineral lands, among others.

B. One major administrative problem today for many councils is their inability to collect fully
the revenues due to them. In most councils there are huge gaps between reported and
 projected revenues. We conclude that this is due to: (1) poor administrative capacity to
assess the revenue base; (2) poor administrative capacity to enforce the taxes; (3) explicit
and intentional tax evasion and resistance from taxpayers; (4) corruption, including
embezzlement of revenues; (5) external pressure on the local finance department to provide
optimistic projections; and (6) political pressure on the local tax administration to relax on
revenue collection. In this setting, fundamental issues to be addressed in the context of local
government fiscal reforms are to redesign the current revenue structure and to strengthen
financial management. Moreover, measures are required to enhance taxpayers’ compliance
and to improve the accountability of tax collectors and councilors.

C. There is undoubtedly room for further improved financial management in most local
authorities as well as improved coordination between the different levels of government.
Here are some strategies that we can do to improve the process of collection of revenue and
enforcement:
 Assisting municipalities and the responsible Ministries in the development of a shared
strategy to improve both revenue collection and the delivery of services.  
 Improved revenue collection procedures necessary to become a good (local) tax administration,
including modernizations such as indexing of property values, zonal approach, e-bill delivery, e-
payments, and improved enforcement.
 Develop and implement a sustainable and spending funding cycle in which municipalities are
transparent on how revenues will be spent.
 Development and implementation of easy to use, easy to implement, billing and collection
software to facilitate effective revenue management and decrease the risks of leakages and
fraud.
 Improved mass- and inter-personal communication with citizens; Citizen’s involvement in
funding and spending cycle to priorities services.
 Management support in all phases to ensure sustainability after the project had finished.

3. Municipal governments must increase revenues from existing sources as well as create new revenue
streams. Elected officials have four primary revenue sources (Service fees, Fine for violation, Charge
or taxes, and Asset monetization), each containing multiple levers. The challenge is identifying and
prioritizing the opportunities that will have the greatest impact and are relatively feasible. This can
be accomplished through moves that won’t adversely affect public opinion or a city’s
competitiveness in attracting businesses and economic development.
Before cities can begin to optimize their revenues, they must first compile an inventory of
existing revenue streams.
Four Interventions can help Cities or Municipalities to increase revenue.
I. Charge more
a. Market Price- Increase pricing based on benchmarks associate cost to serve wherever is
applicable.
 b. Differentiated level- Revise price- model leveraging differentiating factors specific to
each revenue lever category. Example of differentiating factors: size, location, validity
period.
c. Fees for convenience – Increase pricing by providing faster processing time or higher-
quality service.
II. Increase number of transactions
 Increase quantity of service offerings or asset monetization.
 Increase surveillance or inspection for selected fine sources to maximize detection of
violations.
III. Improve collection
 Optimize collection and audit process to increase collection rate and minimize
leakage.
IV. Introduce new revenue leaver
 Introduce new service fees, fines, and charges.

Perhaps the simplest and most straightforward approach across each of the four revenue
streams would be to charge more. Municipalities could increase service fees (such as those on parking
and construction permits) as well as fines, taxes, and the cost of accessing city assets (such as beaches).
To guide price hikes, cities could use benchmarks to determine the acceptable range. This intervention is
typically most applicable to service fees—specifically, utility services such as water, sewage, or
electricity. As an alternative to benchmarking, cities could also determine the cost of services and then
establish a cost-plus pricing model to generate additional revenues.

4. Central Grant and Allotment System and IRA are somewhat synonymous because they both finance
the LGU.
To overcome the undesirable effect, the behavior of LGU’s with respect to CGAS and IRA should
be determined. One popular approached in the literature is to determine the existence of a
flypaper effect (This means a lower effect, in absolute terms, on efficiency scores of grants than
that one caused by income variation.  The difference in the effect of transfers on tax collection
efficiency compared to the standard effect of transfers on spending.) concept was developed by
Okun and is generally seen to mean that money sticks where it hits. In that case the re-
evaluation of current local policies needs to be done, not only those pertaining to CGAS and IRA
but also other related provisions of LGU.
What we can also do is to request from the LGU to provide several projects that can help
generate additional revenue before they use the share from CGAS and IRA. The LGU should then
submit a quarterly or semi-annual report of the status of every project implemented. It can also
help if we improve or modernize the process of Audit by adapting to our fast-changing society.

5. Yes, I am in favor of the horizontal criteria in determining the IRA share because this way there is an
equal distribution in proportion to the criteria. The Population, Land Area and Equal Share are useful
in determining the IRA share for LGU.
6.

Municipality Internal Revenue Allotment (IRA) share

CRITERIA WEIGHT MUNICIPALITIES

POPULATION 50% ₱ 118,233,767,330.00
LAND AREA 25% ₱ 59,116,883,665.00
EQUAL SHARE 25% ₱ 59,116,883,665.00
TOTAL 100% ₱ 236,467,534,660.00

POPULATION CRITERIA
BANTAY- 37,118 populations (2020 Census)
ILOCOS SUR- 706,009 populations (2020 Census)
=.05257
.05257 x ₱ 118,233,767,330.00 (horizontal allocation for municipalities using the population
criteria)
= ₱ 6,215,549,148.5381

LAND AREA CRITERIA

BANTAY- 76.60 km2 source(https://www.philatlas.com/)
ILOCOS SUR- 2596 km2
= .02950
.02950 x ₱ 59,116,883,665 (horizontal allocation for municipalities using the land area criteria)
= ₱ 1,743,948,068.1175

EQUAL SHARE
BANTAY- 1 municipality
ILOCOS SUR- 32 municipalities
= .031
.031 x ₱ 1,832,623,393.65 (horizontal allocation for municipalities using the land area criteria)
= ₱ 1,832,623,393.65
 Total IRA Share of Municipality of Bantay

POPULATION CRITERIA - ₱ 6,215,549,148.5381

LAND AREA CRITERIA - ₱ 1,743,948,068.1175
EQUAL SHARE - ₱ 1,832,623,393.65
+

Total IRA Share - ₱ 9,792,120,610.3056

7. All the issue stated, if I were the Local Chief Executive, first thing I will do is to investigate and gather
information about the issues or problems that my current administration is facing, after that once I
have gathered enough data about the issue, I will conduct a formal meeting and discuss with the
party involved and resolve matters. Organizing a seminars or trainings for my
subordinates/colleagues will help remind them in what we need to do as a public servant. I can tell
that the possible causes for all the stated issues are lack of knowledge, communication, motivation,
and support from the Executive branch. Proper Trainings, communication, planning and delegation
of tasks shall be the most effective and efficient way of resolving said issues.