Diokno: Focus on capacity building to avoid LGUs’ underspending

DOF PUSHES MEASURES TO BOOST LGU REVENUES, FISCAL SUSTAINABILITY: Finance Sec. Benjamin Diokno attends the Committee on Local Government’s organizational meeting Tuesday, August 16, 2022. Diokno briefed the Senate panel on the department’s legislative agenda aimed at ensuring the fiscal sustainability of local government units. Senate PRIB photo / Voltaire F. Domingo

MANILA, Philippines — Focus on the capacity building so that local government units (LGUs) can optimize their respective budgets and not underspend, Finance Secretary Benjamin Diokno said on Tuesday.

“I think we should focus on capacity building and also maybe help them in digitalization. So that they can maybe spend more money,” he said during the Senate committee on local government’s hearing.

Diokno’s recommendation is in line with the underspending of several LGUs, which will further receive an additional P100 billion in their budget this year due to the Mandanas-Garcia ruling.

Under the Mandanas-Garcia ruling, LGUs are responsible for all basic service delivery.

“Realistically, because we are giving LGUs more money, the problem pointed out by the World Bank — and I agree — is that many LGUs won’t be able to spend the money. It’s because of the lack of capacity,” said Diokno.

“In fact, even before the crisis, local governments already have a surplus position. They usually have a lot of surplus because they’re not able to spend their money. Now, you give them another P100 billion, what more?” he asked.

Senate committee chair Senator JV Ejercito supported proposals that aim to improve the tax collection and revenue generation of LGUs.

JPV/abc