DAP presents study on measuring productivity of local revenue generation at LGEMC forum

The Development Academy of the Philippines (DAP) presented the results of a study on measuring the productivity of local revenue generation at the Local Government Executives and Managers Class’ 2nd Local Government Practitioners’ Learning Forum, held on July 13 in Bagac, Bataan.

Engr. Jose Arnold M. Tan, PhD, former deputy executive director of the Bureau of Local Government Finance (BLGF), led the presentation, emphasizing the importance of measuring productivity in local revenue generation. This initiative, aligned with the Philippine Development Plan 2023-2028, underscores the commitment to improving governance and bureaucratic effectiveness.

Some 17 local government units (LGUs)—including six provinces, six cities, and five municipalities—participated in the study, providing a comprehensive overview of local revenue generation at the subnational level of the Philippine public sector.

The study aimed to estimate the productivity of selected LGUs from 2013 to 2022 by analyzing trends in revenue and expenditure, constructing productivity indices, and identifying factors influencing productivity. It sought to answer the question: How productive are LGUs in delivering public services, particularly through local revenue generation?

The proposed public-sector productivity (PSP) measurement framework was employed, generating Total Factor Productivity (TFP) and Partial Total Factor Productivity (PTFP) to assess the revenue generation productivity of LGUs. The framework considers the total revenue (excluding external sources) and total actual expenditures. Data was sourced from the Electronic Statement of Receipts and Expenditures (eSRE) collected by the BLGF from 2013 to 2022. Only the expenditures of offices involved in revenue-generating activities are included. Values were deflated to 2013 prices using GDP data from the Philippine Statistics Authority to ensure accuracy in comparing values over time.

The results provided a detailed view of trends in revenue and expenditure, productivity indices, and the impact of changes in output and input indices on productivity. The study highlighted the revenue and expenditure profiles of participating LGUs, offering valuable insights into local government performance regarding revenue generation.

The majority of the participating LGUs exhibited a pattern where they generated more outputs while utilizing relatively the same level of inputs, resulting in productive performance within the observed period. Several factors were identified as significant contributors to productivity, including legislative and policy interventions, enhanced revenue-generating activities, and adaptive responses during the pandemic. Initiatives such as the Seal of Good Local Governance (SGLG), the Performance Challenge Fund (PCF), and streamlined business permit processes boosted productivity.

The challenges faced by LGUs, particularly during the pandemic, were also recognized. A reduced number of personnel and lower collections impacted productivity, but adaptive measures such as expanding payment methods and building digital platforms helped mitigate these effects.

Based on the findings, the study recommended collaboration with the BLGF to streamline data collection and adopt the PSP measurement framework across LGUs. It also proposed regular updates to local revenue ordinances and comprehensive annual assessments of revenue operations to optimize human resources utilization and enhance performance. Implementing these recommendations can be vital to optimizing resource use, improving service delivery, and validating agency performance.

This article is originally posted on: https://dap.edu.ph/dap-presents-study-on-measuring-productivity-of-local-revenue-generation-at-lgemc-forum/