By Beatrice M. Laforga, Reporter

LOCAL GOVERNMENT UNITS (LGUs) appear on track to collect up to P241 billion by year end, after exceeding the full-year collection target of P193 billion as of end-September.

Niño Raymond B. Alvina, executive director of the Bureau of Local Government Finance, told BusinessWorld that local treasurers, provinces, cities and municipalities collected P205.71 billion in the first nine months of the year, surpassing the already downgraded P193.04-billion target for the entire 2020 by 7%.

The nine-month tally was also 2% bigger than the P201.69 billion collected in the same period last year, he said.

“Given this development and with the easing of restriction on business activities, we are projecting the full year 2020 collections to possibly reach P241.39B, if the trend from third quarter collections continue,” Mr. Alvina said in a text message last week.

Economic managers earlier slashed the target collections of LGUs by 37% from the initial goal of P307 billion due to the recession caused by the coronavirus pandemic.

Local governments allowed the deferred payment of taxes, fees and other charges in light of the pandemic-induced disruptions to business activities and to provide relief to affected sectors.

Mr. Alvina said LGUs were still able to report year-on-year growth since the local taxes collected for the current year are based on the prior year’s assessment or in 2019.

At the height of strict lockdown, however, LGUs saw tax collections fall by 2% to P159.15 billion in the second quarter from P162.24 billion a year ago.

“[The third quarter] collection performance of LGUs picked up as many of them adopted relief measures for taxpayers, especially on interests and penalties, and managed to innovate and use alternative payment and collection schemes,” Mr. Alvina said.

“As for FY2021 target, we are revising our P144.89-billion projections issued in August 2020 to account for the Q2 and Q3 actual performance of LGUs,” Mr. Alvina added.

The National Government extended P37 billion, one-time Bayanihan grants to LGUs, P30.8 billion to cities and municipalities and P6.2 billion to provinces, as financial support amid the pandemic.

The amount is equivalent to one month of their internal revenue allotment, or their share of the national taxes, for cities and municipalities and half a month’s worth for the provinces.

State-run banks Land Bank of the Philippines and the Development Bank of the Philippines also launched low interest rate and subsidized interest rate loan programs for LGUs.

Finance Secretary Carlos G. Dominguez III earlier told LGUs to maximize their borrowing capacity to fund recovery measures and allow local economies to bounce back faster.