IT was a grey afternoon in the western Mindanao town of Molave, Zamboanga del Sur but the mood in the street was festive with schoolchildren anad residents moving to the rhythm of a marching band.
The reason for the excitement was the ceremonial turn-over of the town’s Welcome Arch and a street lighting system. The moment Mayor Ireneo Glepa switched on the lights a resounding cheer went up from the community.
Dati madilim masyado, may mga snatsing at nabbangga na motor, pero ngayon hindi na [It used to be so dark, and there would be petty thefts and motorcycle accidents, but no longer],” said Reylen Balus, a barangay health worker.
The new arch and street lights, however, are much more than civic infrastructure projects: they are the fruit of two years of collaboration between the Molave municipal government and the townspeople in meeting the challenge of increasing local revenue streams.
The mayor thanked Molave’s taxpayers “for paying their taxes promptly, and for all their cooperation in attaining this project.”
Under the Local Government Code of the Philippines, all local government units (LGUs) are entitled to Internal Revenue Allotments (IRA) (share of revenues from national government) to fund infrastructure, livelihood and health projects. However, almost all LGUs need additional revenues to improve the delivery of services to their communities.
Molave, with a population of 45,000, is one of a dozen Mindanao municipalities that are using local revenue streams, allowed under the Local Government Code of 1991, to generate more public funds with which to provide better services to their constituents.
These municipalities are also committed to their participation in the Revenue Enhancement and Progress (REAP) Project of the U.S. Agency for International Development (USAID).
REAP is implemented by USAID’s Growth with Equity in Mindanao (GEM) Program, under the oversight of the Mindanao Development Authority (MinDA).
Under REAP, local governments commit to increase their own-source revenue collection by 30 to 50 percent over a five-year collection average, and are provided with technical assistance by USAID to help them improve their collections.
To date, the seven Mindanao municipalities participating in REAP have reported year-on-year revenue increases averaging 42 percent, with two municipalities reporting increases of 120 percent or higher.
The success of these communities is proof that local governments need not rely solely on their IRAs, and can implement successful programs to increase their incomes from local sources.
For the year 2009, Molave increased local revenue collection by 44 percent over its collection target.
The improvement in revenue was due largely to the municipal government’s intensified collection of fees from businesses and real property taxes, as well as other fees and charges.
