Well-performig LGUs get P1-B subsidy

MANILA, Philippines - The Department of Budget and Management (DBM) is turning over P1 billion to the Department of the Interior and Local Government (DILG) to cover the payment of financial subsidies for well-performing local government unit beneficiaries.

According to the DBM, the money will be used to support the Performance Challenge Fund (PCF), a financial subsidy program that recognizes and rewards the improved delivery of public services and better governance among local government units (LGUs).

The amount, which is the total allocation set for the PCF for this year, can subsidize up to P7 million for each province, P3 million for each city, and P1 million for every municipality, with priority given to the less fortunate LGUs.

“The Aquino administration started the PCF to encourage LGUs to improve the way they deliver goods and services to their constituents, primarily through the alignment of their local projects with the administration’s own socio-economic development priorities,” Budget Secretary Florencio Abad said.

Abad said PCF-supported programs should also promote governance reforms that enhance transparency, accountability, and openness in the way LGUs work.

LGU projects that qualify for PCF subsidies include those that will help the country attain its Millennium Development Goals, as well as initiatives that will facilitate economic development in each LGU. Projects that address climate change management and disaster preparedness are also qualified for the PCF.

At the local level, the PCF may be used as subsidies for major projects under a particular LGU. It can also be tapped as counterpart funding for foreign-assisted projects under LGUs and may also serve as co-financing for a local government’s joint projects with other LGUs.

Abad said the PCF can also act as counterpart funding for projects that an LGU may undertake jointly with the private sector.

According to Abad, a crucial requirement for determining an LGU’s eligibility to the PCF is its ability to secure the seal of good housekeeping. The DILG confers this to local governments that have shown great progress in instituting governance reforms, particularly with respect to transparency, accountability, planning, fiscal management, and performance monitoring.