Iloilo City extends 40% real property tax discount to 2028

By Rjay Zuriaga Castor

Amid mounting clamor over hefty real property tax obligations, the Iloilo City Council unanimously passed an ordinance on Wednesday extending the 40% discount on real property tax payments until 2028.

The measure extends the existing tax relief, originally set to expire in 2026, allowing property owners to continue paying only 60% of their assessed RPT for an additional two years.

Councilor Nene Dela Llana, vice chairperson of the Committee on Ways and Means, noted that while the City Budget Office opposed the extension, the city government would retain the 40% discount, warning that going beyond that would “cripple” the city’s finances.

He also stressed that a 40% discount is considered acceptable by various entities, including the Commission on Audit and the University of the Philippines.

Dela Llana assured that the extension would not affect basic services, including those funded by the Special Education Fund.

RPT collections are distributed with one-third allocated to the SEF for public schools, while the remaining two-thirds are divided between the barangay (30%) and the local government’s general fund (70%).

The Committee on Ways and Means said in its report that the proposed ordinance is legally sound, advantageous to the city, and aligned with the core objectives of inclusive growth and sustainable development.

“[The proposed ordinance] warrants due recognition as it ensures that the city can provide its mandatory and obligatory services to its people but at the same time recognize the burden that the power of taxation imposes on citizens,” the report read.

During a committee hearing on Aug. 22, City Treasurer Jinny Hermano explained that while reduced RPT rates cut into the city’s collections, the adjustment was necessary due to two factors: the Supreme Court’s Mandanas ruling and a 2023 COA memorandum that flagged the city for not maximizing its revenues.

Hermano also stressed the role of the SEF in addressing classroom shortages and other educational needs.

City Budget Officer Viminale Capulso warned that any further reduction in the RPT rate would hurt the city’s ability to provide essential services such as medicine procurement and garbage collection.

She added that while the city manages its resources efficiently through strict collection measures and public-private partnerships, reducing the tax rate beyond the current 40% would not be beneficial.