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N • Republic of the Philippines

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DEPARTMENT,OF FINANCE Roxas Boulevard Corner Pablo Ocampo, Sr. Street Manila 1004

DEPARTMENT ORDER No. ____ 28 April 2010 SUBJECT:

Prescribing the "Mass Appraisal Guidebook: A Supplement to the Manual on Real Property Appraisal and Assessment Operations (with Expanded Discussion on Valuation of Special Purpose Properties, and Plant, Machinery and Equipment)"

TO:

All Regional Directors of the Bureau of Local Government Finance, Provincial, City and Municipal Assessors and other concerned DOF agencies

WHEREAS, Section 201 of the Local Government Code of 1991 and Article 291 of its Implementing Rules and Regulations (IRR) provide that the Department of Finance (DOF) shall promulgate the necessary rules and regulations for the classification, appraisal and assessment of real property; WHEREAS, Sections 33 (1) and (2) under Title II of Executive Order No. 292, series of 1987, otherwise known as the "Administrative Code of 1987" provide that the Bureau of Local Government Finance (BLGF) shall "assist in the formulation and implementation of policies on local government revenue administration and fund management", and "exercise administrative and technical supervision and coordination over treasury and assessment operation of local governments"; WHEREAS, pursuant to the abovementioned mandate, the DOF issued Department Order No. 1-04 (October 2004) prescribing the "Manual on Real Property Appraisal and Assessment Operations", hereinafter referred to as the "Manual", for appraisal and assessment of real property by local government assessors; WHEREAS, the Philippine Government, through the DOF, the BLGF and the National Tax Research Center (NTRC), is implementing reforms in real property valuation and taxation under Component 4 of the 2nd Land Administration and Management Project (LAMP2), which aims to "improve the quality of government and private sector appraisal performance through the adoption of uniform valuation standards and a single valuation base for taxation", "pursue property taxation reforms", and "lay the foundation through education and training for the future expansion of property valuation and appraisal activities"; WHEREAS, the DOF issued Department Order No. 37-09 (September 2009) prescribing the "Philippine Valuation Standards (1st Edition) - Adoption of the IVSC Valuation Standards under Philippine Setting" to raise the quality of public and private sector valuation at par with international standards and best practices, and promote transparency and reliability of valuation for various uses, e.g., taxation, disposal of

government assets, financial reporting, secured lending, transfers of ownership, litigation, etc., among others; WHEREAS, as a result of the comprehensive simulation studies in pilot local government units (LGUs), and the extensive research and in-depth workshops with LGU appraisal experts on the subject matter, additional and new instructional materials for local appraisal are required to adapt, operationalize and comply with the PVS, and incorporate the use of modem information systems and resources to reflect national laws, policies, rules, and regulations under Philippine conditions; WHEREAS, provision of enhanced and detailed material for Chapters III and IV of said Manual, by expanding the technical discussions and contents of said chapters in the form of a guidebook, is deemed necessary to advance the real property appraisal/valuation processes, particularly in the development of the Schedule of Market Values (SMV) by the local governments for local taxation purposes, and therefore achieve the objectives of the LAMP2 project. NOW THEREFORE, the following are hereby issued: Section 1. The "Mass Appraisal Guidebook: A Supplement to the Manual on Real Property Appraisal and Assessment Operations (with Expanded Discussion on Valuation of Special Purpose Properties, and Plant, Machinery and Equipment)", hereinafter referred to as the "Guidebook", effectively expands the technical discussion of Chapters III and IV of the Manual. Section 2. The Guidebook shall be adopted by all local government assessors and other concerned agencies undertaking mass appraisal of real property for taxation purposes; Section 3. The Guidebook shall be adopted as an integral part of Local Assessment Regulations No. 1-04, the Manual, and other relevant issuances by the Department; Section 5. This Department Order supersedes all other Orders issued which are inconsistent herewith, and shall be effective immediately; Section 6. Accordingly, Regional Directors, Provincial, City and Municipal Assessors, and other concerned agencies, are hereby enjoined to properly, efficiently, and strictly implement the provisions of the Guidebook.

MARGARITO Y. TEVES Secretary