76% of Eastern Visayas LGUs upgrade income classification

TACLOBAN CITY (PIA) — Seventy-six percent of local government units (LGUs) in Eastern Visayas have upgraded their income classification based on the general income reclassification by the Bureau of Local Government and Finance 8 (BLGF-8) that took effect this January 1, 2025.

BLGF-8’s income reclassification is pursuant to Republic Act (RA) No. 11964, otherwise known as the Automatic Income Classification of Local Government Units Act. 

LGUs that have, so far, upgraded their classification include four provinces, three cities, and 106 municipalities in the region. 

More than 23 percent of the LGUs, on the other hand, have remained in their income classification. These LGUs include four provinces, four cities, and 29 municipalities. One municipality, however, was downgraded one class lower. 

In the latest Kapihan sa PIA Eastern Visayas, BLGF-8 revealed the LGUs are being classified through their locally sourced revenue (LSR), which are tax revenues from real property tax, business and other local taxes; and non-tax receipts from fees and charges, government business operations such as enterprises and others miscellaneous income. 

BLGF-8 Financial Analyst Rosauro Espejo said the bulk of the local collections are being sourced from business fees pointing to a “good business environment” and a positive economic activity among many of the LGUs.  

However, Espejo said the BLGF is encouraging the LGUs to strengthen their revenue mobilization capacities through real property tax. 

“Unlike businesses that come and go, real properties are already there, existing and offer a progressive source of revenue for our LGUs. The LGUs must intensify its real property tax collection to help improve the government’s revenue generation capacity,” Espejo said. 

The BLGF, in addition to helping to develop and carry out policies pertaining to LGU revenue administration and fund management, also provides administrative and technical oversight over the treasury and assessment activities of LGUs. 

Republic Act 11964, which was signed into law by President Ferdinand R. Marcos Jr. on October 26, 2023, helps the Department of Finance (DOF) boost LGU revenues, ensuring fiscal sustainability of local governments. 

The LGU income classification will serve as the basis for the identification of administrative and statutory aids, financial grants, and other forms of assistance to LGUs; the determination of LGU capability to undertake development programs and projects; the total annual supplemental appropriation for personal services of an LGU; and the compensation adjustment for LGU personnel, pursuant to Republic Act 11466, or the Salary Standardization Law of 2019. (ACR/PIA Leyte)

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