Chapter 6: The State of Revenue Generation in Cities - LGRC DILG 10

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Percentage of the Internal Revenue Allotment to Total Annual Income. Dependency onNG can be observed from among the various levels of LGUs especially in terms of theIRA shares in their annual revenues. It appears that most LGUs have become dependentfrom NG for their source of income. Even cities tend to be reliant from NG when itcomes to their incomes. About 68% of the cities had low productivity levels in terms ofpercentage of IRA to their respective total annual income (see Figure 6.15). Such can betranslated to 38 and 40 cities having low and very low productivity levels, respectively.Only 15% of cities were able to attain productivity levels higher than the benchmark.On the average, about 70% of thetotal annual income of cities camefrom IRA while the rest was derivedfrom other sources (see Figure 6.16).This was a manifestation of theimportance of the IRA in theoperations of city governments. Thedelay in the release of the IRAresults is a substantial setback to thedelivery of basic social services andto the development of the cities ingeneral.Cities in the MSR were moredependent on NG because 79.54%of their total annual income for 2004was IRA (see Figure 6.17). On theother hand, cities in the NLAQ,MLUB, and CP had 62% to 71% oftheir total annual incomes derivedfrom IRA. Cities in the MLUB seemhad less dependency on NGconsidering their IRA at 62.20% only.The performances of the cities had toreach the desirable level because oftheir low productivity level. Thenational average performance level in2004 was only 2.06, which wasconsiderably lower than thebenchmark 3.00 (see Figure 6.18).The cities in the NLAQ performedthe best with an average of 2.45.Figure 6.15 Performance Levels of 115 Cities RegardingPercentages of Internal Revenue Allotments to Total AnnualIncome, PY 200440(35%)5(4%)38(33%)13(11%)Very High High Medium Low Very Low19(17%)Figure 6.16 Average Percentage Distribution of TotalAnnual Income By Source, PY 200430%IRAOther Income70%38 THE STATE OF REVENUE GENERATION IN CITIES
Figure 6.17 Percentages of Internal Revenue Allotments to Total Annual Income of 115 Cities in theSuper Regions, PY 2004908079.54Percent7070.1170.316063.7262.2050NationalAv erageNorthernLuzonAgribusinessQuadrangleMetro LuzonUrbanBeltw ayCentralPhilippinesMindanaoSuper RegionSuper RegionsMeanwhile, the cities in the MLUB came close second with 2.31. The cities in the MSR,on the other hand, had very low productivity, having an average numerical performancelevel of only 1.63.Figure 6.18 Average Performance Levels of 115 Cities in the Super Regions Regarding the Percentages ofInternal Revenue Allotments to Total Annual Income, PY 20045Average Performance Levels43210NationalAv erage2.452.062.312.031.63Northern Metro Luzon Central MindanaoLuzon Urban Philippines Super RegionAgribusiness Beltw ayQuadrangleSuper RegionsIn sum, the cities have yet to free themselves from being dependent on NG consideringthat a significant slice of their total income still dominated by IRA. The factor of highpopulation in the urban areas may be put forward by some as the reason behind the highIRA share of the cities. This, however, does not explain in absolute terms thesignificantly high share of IRA to the total income of cities vis-à-vis the opportunities andpowers that the LGC has provided them in terms of generating locally sourced revenues.STATE OF CITIES OF THE PHILIPPINES 39Administrative Capacities, Productivity and Development Conditions
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Chapter 6: The State of Revenue Generation in Cities - LGRC DILG 10

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