a. Internal Revenue
Allotment
Section 6, Article
VI of the Philippine Constitution provides that local governments shall
be entitled to a just share in national taxes. At present, local governments
are entitled to 40% of internal revenue taxes (Section 284 of the Local
Government Code). Of the current 40%, all provinces and all cities are
entitled to 23% each; all municipalities, 34%, and all barangays, 20%.
For particular local government units, the sharing is determined by applying
this formula: 50% based on population, 25% on land area, and 25% on equal
sharing (Section 285 of the Local Government Code).
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b. Share in Fishery
Charges
Local government
units shall, in addition to the internal revenue allotment, have a share
of 40% of the gross collection derived by the national government from
the preceding fiscal year from fishery charges (Section 290 and 291 of
the Local Government Code).
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c. Grants and
Donations
Section 23 of the
Local Government Code states that the "local chief executive may,
upon authority of the Sanggunian, negotiate and secure financial grants
or donations in kind, in support of the basic services or facilities enumerated
under Section 17 hereof, from local and foreign assistance agencies without
necessity of securing clearance or approval therefore from any department,
agency or office of the national government or from any higher local government
unit." Grants may be sourced from local and foreign sources to support
water resource utilization and conservation projects and enforcement of
fishery laws in municipal waters, including the conservation of mangroves
(Section 17b21 of the Local Government Code). Sources of these funds are,
however, only recently being developed and are not available to all LGUs.
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d. Domestic Loans
Section 297 of the Local Government Code provides that a local government
unit may contract loans, credits and other forms of indebtedness with
any government or domestic private bank and other lending institution
to finance the construction, installation, improvement, expansion, operation
or maintenance of public facilities, infrastructure facilities, and the
implementation of other capital investment projects. Thus, domestic loans
may be contracted by municipalities for infrastructure facilities and
capital investment projects necessary in the management of coastal resources.
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e. Credit Financing
Schemes
a. Bond flotation
- Section 299 of the Local Government Code authorizes municipalities
to issue bonds, debentures, securities, collateral notes, and other
obligations to finance self-liquidating, income-producing development
or livelihood projects pursuant to the priorities established in the
approved local development plan or the public investment program. LGUs
may avail of this scheme to finance self-liquidating, income-producing
development or livelihood projects on CRM. These projects must be incorporated
in the municipal development plan and public investment program.
b. Public infrastructure
projects by the private sector - Section 302 of the Local Government
Code permits municipalities to enter into contracts with any duly prequalified
individual contractor, for the financing, construction, operation and
maintenance of any financially viable infrastructure facilities, under
the build-operate-transfer agreement, including infrastructure facilities
needed for the effective management of coastal resources
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f. Income from
Development Enterprises and Inter-LGU Cooperation
a. Development
enterprises - Local governments may incorporate development enterprises.
These corporations (where income from investments may be derived) may
be created to assume projects and programs on the management of coastal
resources. These enterprises may be referred to as quasi-municipal corporation
or those corporations created by local governments for a specific governmental
or proprietary purpose. Even if there is no law specifically authorizing
local governments to incorporate enterprises, local governments may
still do so pursuant to their broad revenue-raising powers.
b. Inter-LGU cooperation
- LGUs may, through appropriate ordinances, group themselves, consolidate
or coordinate their efforts, services and resources for purposes commonly
beneficial to them (Section 33 of the Local Government Code). In support
of such undertakings, the LGUs involved may, upon approval by the Sanggunian
concerned after a public hearing conducted for the purpose, contribute
funds, real estate, equipment and other kinds of property and appoint
or assign personnel under such terms and conditions as may be agreed
upon by the participating local units through Memoranda of Agreement.
Income may be derived from such undertakings. Participating or contracting
municipalities may undertake joint projects on CRM and derive income
from such projects.
Such undertakings may be recognized by the State or the President, which
may legally entitle LGUs to some form of national support. In the case
of the Metro Naga Development Council, for example, an executive order
was issued by then President Fidel Ramos recognizing the Council. As
a consequence of this recognition, national funds were transferred to
finance the Council's projects. From a quasi-municipal corporation,
Metro Naga was transformed to a quasi-corporation (created by the State
to perform a governmental purpose).
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g.
Revenue Generation from Water Use Zones
Local governments
may apply taxes, fees or other charges for the use of municipal waters.
These include:
a. Fees for
registration of municipal fishers
b. Fees for license to fish
c. Fees for license to operate municipal fishing boats
d. Fees for license for municipal fishing gears
e. Fees for the management, utilization and exploitation of coastal
resources, including marine sanctuary entrance fees, dive fees, etc.
f. Fines imposed on violators of fisheries and related laws
g. Fishery charges such as rentals for mariculture
h. Taxes on income derived from sustainable use of resources in the
multiple use zones - As in land use zones, municipal water use plans
must be developed identifying zones for strict protection (no take
zones), sustainable use (limited harvest), and multiple use zones.
An appropriate system of taxes, fees and other charges must be developed
depending on the use designated from each zone. The
Philippine Fisheries Code of 1998 provides that fees for fishery
activity in municipal waters should be determined by the LGU in consultation
with the Fisheries and Aquatic Resources Management Councils (FARMCs).
Primary uses of municipal waters that may serve as a source of revenue
for CRM programs of the LGU may include fishing, mariculture and tourism.
The FARMCs may also recommend the appropriate license fees to be imposed.
Generally, the computation of fees is based on the cost of administering
the procedure and the cost of conducting surveillance to ensure compliance.
Taxes are computed according to the formula prescribed by the Local
Government Code. Subsistence fishers (those earning Php50,000 and
below or the poverty line defined by the National Economic and Development
Authority, <link to www.neda.gov.ph> whichever is higher) are
tax-exempt.
Rentals should be computed based not only on the socio-political context
in which the fishery is operating, but also on the total rent generated
and the profitability of the fishery. In considering the relative
proportion of rent which accrues to the LGU and that which is retained
by operators of fishery as profit, an important consideration is to
ensure that the fishery remains sufficiently profitable for the operators
to encourage reinvestment of profits when required.
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