Local Fiscal Administration

The information contained in this article were based on the Comprehensive Land Use Plan (CLUP) of Rosario, Batangas for the planning period 2000-2010 and were current in 1999 except in places where updates were duly noted.

STATUS OF THE FINANCIAL RESOURCES of the municipality shows its capability to undertake development programs and projects enumerated in the sectoral plans.

Revenue
The Municipality has total recorded revenue of P 49,397,802.49 by year 1999. Sources of revenue include tax revenue and aids and allotments. The biggest share contribution is the aids and allotment source, specially, BIR allotments which contribute about 72 percent of the total revenue. Tax revenue and non-tax revenue each contributes 12 percent and 16 percent respectively to the total.

Tax revenues include real property tax and local taxes. Real property taxes, which are imposed on lands and buildings or improvements thereon, constitute only about 5 percent of the total income.

Local taxes include municipal business, franchise, occupation, immigration, community, amusement, and miscellaneous taxes on sand and gravel, weights and measures and penalties on taxes of goods and services. Actual receipts from these taxes constitute 7 percent of the total revenue.

Of these taxes, the biggest earner is the municipal business taxes which are big paid by commercial establishments, business and trading enterprises in the municipality. This is followed by the community tax which is the residence certificate being required for most of the personal and official transactions of the people.

Franchise and amusement taxes also contributed considerably to the tax revenue of the municipality. This is one of the positive impacts of recreational establishments in the municipality.

Non-tax revenue on the one hand, include earnings and other incomes derived from government business operations, operating and service income and other miscellaneous income. These are fees being charged for services availed of by the people.

These are classified by LGU as operation and miscellaneous revenue which include: inspection fees, secretary’s fees, building permit, registration of large cattle, marriage, burial permit, police clearance, court clearance, occupancy permit, garbage fees and storage fees.

Receipts from operations such as market, slaughterhouse and cemetery also form part of this non-tax revenue. Interest income is also included.

Of these fees and receipts, the biggest earner is market operations, which is about 30 percent of the total non-tax revenue. Thus market operations is a major income earner in the municipality.

The secretary’s fees follow this, which are about 27 percent of the total non-tax revenue. These consist of fees derived from various certifications and affidavits big earned by the municipal government.

Interest income, building and permit fees, inspection fees, operating service income, receipts in slaughter all contributed considerably to the total non-revenue source, respectively in that order. The least contributor is a storage fee.

Other incomes consist of miscellaneous fees and penalties, miscellaneous others and miscellaneous income. Income derived from these constitutes about 77 percent of the total revenue and about 5 percent of the total non-tax revenues.

The BIR allotment or Internal Revenue Allotment (IRA) is classified under aids and allotment source. This is an amount granted to the municipality by the National Government as support fund for the local government’s operations. These are fixed amount determined by law and are allocated permanently for each local government unit by the national government.

In effect the municipality in earning P 13,739,798.49 from its taxation and operations activities. It is in these aspects that the municipal government can devise ways and means to increase income or revenue.

Collection efficiency must be considered. Report of Revenue and Receipts of General Fund Code 101 as of December 1999, showed that aside from BIR Allotments, the estimated income from taxation is P9, 031,000.00. Actual income turned out to be only P6, 080,420.49, which is about 33 percent less that the estimated income. Efforts on tax collection must be stepped up so as to increase income and for the municipal government to be able to implement and finance projects enumerated in the plan.

In terms of non-tax revenue, efficient management of market operations, slaughterhouse and increase volume of business in these operations will also generate more income for the municipality. Secretary’s fees, inspection and building and permit fees can also be increased to support municipal government’s financial resources.

Expenditures
The total recorded expenditures of the municipality in 1999 is P 43,693,911.18. Object of expenditures includes general government, public welfare and internal safety, economic development, operating of economic enterprise and other charges.

General government expenditure constitutes about 48 percent of the total expenditures. It is the biggest spender among the expenditure object. Public welfare and internal safety expenditures follow this, which are about 30 percent of the total. Expenditure for economic development is about 17 percent. Operation of economic enterprises cost the municipal government about 5 percent of the total expenditures.

General Government expenditures include expenses incurred in the discharge general administration and government finance of the government. These are expenses for personal services, maintenance and other operating expenses and capital outlays of municipal offices categorized under General Public Services.

Offices/Services sub categorized under general administration are executive services for both Office of the Mayor and Sangguniang Bayan; Administrative services (Office of the Municipal Administrator); Human Resource Management (Personnel); Planning and Development Coordinator (MPDC) and Civil Registry (Local Civil Registrar).

Offices and services relating to financial resources are sub-categorized under government finance. These are budget office (Budget Officer), accounting services (Municipal Accountant), treasury (Municipal Treasurer) services and assessment of real property (Municipal Assessor).

Among these offices, the office of the Sangguniang Bayan is the biggest spender, with their expenditure of the chamber constitutes about 37 percent of the total expenditures for general administration, 26 percent of the total expenditures for general government and 13 percent of the total expenditures. This is logical in view of the number of the members of the Sangguniang Bayan and their need for additional inputs on laws and legislation they enact and pass.

The Office of the Mayor spent about 13 percent of the total general administration expenditures, 9 percent of the expenditures for general government and 4 percent of the total expenditures.

Of the government finance office, the treasury services incurred the biggest expenses which is about 40 percent of the total government finance expenses, 11 percent of the total general government expenses and 5 percent of the total expenditures. Assessment of real property, followed with about 28 percent of the total government finance expenditures.

Public welfare and internal safety expenditure include expenditures incurred in the performance of adjudication, protective services and social improvement functions of government. The expenditure comprises of personal service and maintenance and operating expense and capital outlays of offices discharging the function.

For adjudication which include prosecution services rendered by the Fiscal and administration of justice by the local municipal courts, the expenditure incurred constitute only about 0.55 percent of the total expenditures for public welfare and internal safety and 0.16 percent of the total expenditures.

Protective services being performed by the Philippine National Police (PNP) and fire protection services, expenditure constitute 1.14 percent of the total public welfare and internal safety expenditure and 0.34 percent of the total expenditures.

Social improvement consists of expenditure for education, health, housing and community development and social welfare service. Expenditures for these services constitute 98 percent of the total expenditure for public welfare and internal safety and 30 percent of the total expenditure.

Economic development expenditures include expenses incurred in the delivery of agricultural services and development projects and engineering services and maintenance.

Operation of economic enterprise, though consider as economic, was taken separately consist of expenditures incurred in the operation of market, slaughterhouse and cemeteries.

With a population of 82,115, per capita expenditure is P 532.00.

Expenditure By Function
The General Funds Code 101 aside from being categorized by object of expenditures are still sub-categorized by nature of expenditure by object and also coded such as personnel services (Code 100); Maintenance and other operating expenses (Code 200) and capital outlay (Code 300).

Status of Appropriation, Allotments and Expenditures (SAAE) for the General Fund for the period ending December 31, 1999 showed that the total allocated funds is 54,431,989.88. The Report of Revenue and Receipts for the same fund as of the same period shows that the total actual revenue realized is only P 49,397,802.49.

Thus only 90 percent of the allotments are realized as revenue. Of these figures personnel services constitute 52.52 percent; maintenance and other operating expenses, 46.25 percent and capital outlay, 1.23 percent.

Expenditures on the other hand for the same period is P 43,693,911.18 which is only 88.45 percent of the total income/revenue and 80.27 percent of the total allotments. Personnel services, maintenance and operating expenses and capital outlay constitute 58.12 percent; 41.45 percent and 43 percent respectively of the total expenditures.

Considering, the percentage share of said expenditures relative to allotments, actual income and expenditures, these expenditures by function have a corresponding share in the balance of saving realized in 1999 amount to P5, 703,891,33.

The percentage share of personnel service, maintenance and other operating expenses and capital outlay to the total balance or surplus in 1999 is 9.60 percent; 83.03 percent and 7.37 percent respectively.

Maintenance and other operating expenses has the biggest share in the surplus. The municipal government has exercised too much prudence in the performance of their functions, that monies intended as support for maintenance and operations had been saved.

The 20 % Development Fund
Total allotted 20 percent development fund for 1999 is P 7,062,982.80. Of these amount P 6,009,046.15 are expended to different development programs, projects and offices of the municipal government. A balance of P 1,053,936.58 is realized for said year.

Among the programs and projects funded from said fund are real property tax administration, purchase, construction and improvements of government facilities, Human and Ecological Security (HES)-Social Reform Agenda (SRA)-Minimum Basic Needs Approach (MBN) programs, miscellaneous other social welfare service, development administration, SK programs and agricultural development project.

Purchase, construction and improvement of government facilities under General Public Services has the biggest share of LDF expenditures. These constitute about 54 percent of the total LDF expenditure. Agricultural development projects followed with 18 percent of the total LDF expenditures.

Service Expenditure Percentage (SEP)
There is a noted efficiency in the current fiscal management of financial resources in the municipality considering that expenditures for direct public services are higher than those of general government administration expenses.

Direct public services are those expenditures spent for public welfare and internal safety, economic development and operation of economic enterprises. The Service Expenditure Percentage (SEP) is 51 percent with direct public services expenditure totaling to P 22,489,047.62 and general government administration expenditures summing up to P 21,204,863.56.

Data from 1995 to 1999 showed that service expenditure percentage or (SEP) was on a decreasing trend relative to income and expenditures from 1996 to 1998. The percentage, however, increased slightly in 1999. Though, savings were realized annually within the period, income and expenditures tends to favor expenses for general administration or General Public Services an identified in the Statements of Appropriation, Allotments and Expenditures (SAAE) reported for those years.

In 1995, total expenditures as against income was 95.83 percent with a surplus income of 4.17 percent. Expenditures by Object, for the same year showed that general public services which consist of the different administrative offices of the municipal government constitute about 49.43 percent of the total income and 51.58 percent of the total expenditures for that year.

Expenses for direct public service consisting of education, culture, sports and manpower development, health, housing and community development, social welfare services and economic services. SEP then is of acceptable percentage relative to income and lesser in terms of total expenditures.

From 1996 to 1998 SEP are much lower relative to both income and expenditures. SEP relative to income is at its lowest in 1997 at 44.64 percent and relative to total expenditure in 1996 at 35.68 percent. The decreasing trend continued until 1998.

In 1999, efficiency discerned as SEP increased relative to both income and expenditure. SEP relative to income is 56.62 percent and to expenditures is about 51 percent. Per capita direct service expenditure is about P 273.87 considering the total population of 82,115.

These showed that the municipal government had exerted efforts to attain efficiency in financial administration. Likewise, the municipal government had implemented and spends for programs and projects that redound to the welfare and service of its population.

Savings Revenue And Expenditures Patterns
Records of revenue and expenditures for the last five years from 1995 to 1999 consistently showed a surplus of revenues as against expenditures. Spending looks so efficient that some amounts are still left at the end of the year. The RRR reports for 1999 for instance showed actual income of P49, 397,802.49 and SAAE for the same year reported an actual expenditure of P43, 693,911.18, therefore there is a balance of P 5,703,891.31, in favor of income. This surplus figure increases as income and expenditure amounts increased.

Revenue from 1995 to 1999 shows an increasing trend averaging about 20 percent per year. The biggest percentage increase is between 1996 and 1997 that is about 31 percent. The lowest is between 1997 and 1998 that is only 10 percent. From 1998 to 1999, the computed percentage increase is 26 percent.

In terms of expenditure, the same increasing trend is obvious. Percentage increase, however, is lesser compared to increase in income. Expenditures trend average to about 15 percent per year. There is no recorded increase in expenditures in 1996. There is even a 6 percent increase or about 6 percent less than 1995 expenditure. The biggest recorded percentage in expenditures is between 1996 and 1997 that is 58 percent. In 1997 and 1998, the percentage increase is 5 percent. From 1998 to 1999 the computed percentage increase in expenditure is 18 percent.
Increases in savings are also noted. Savings or surplus of the year preceding are being carried over to the year proceeding and thus form part of current year’s appropriations. Thus, savings or surplus will be considered horizontally in relation to revenue.

The biggest surplus or savings realized was in 1996, which total to P5, 216,053.17 and is about 19 percent of the total revenue. In 1999, the surplus is about 11.54 percent of the total revenue. The least surplus was recorded in 1997, which is less than a million only and constitutes about 1.31 percent of the revenue. It can be noted that in 1997 where there is a high percentage increase in both income and expenditure, there is the least surplus realized.

On the average, for the last five years that is 1995 – 1999 expenditures are about 92 percent of revenue with surplus also averaging at 8 percent annually.


Reference
Municipal Land Use Committee and the Office of the Municipal Planning and Development Coordinator (June 2000), Comprehensive Land Use Plan of Rosario, Batangas for Planning Period: 2000-2010, Municipality of Rosario, Batangas, Philippines