Updated guidelines out on LGU fund allocations

MANILA, Philippines - The Department of Budget and Management (DBM) and Department of Interior and Local Government (DILG) have jointly issued updated guidelines to ensure that 20 percent of local government units (LGUs) annual internal revenue allotments (IRA) are used for development projects.

Budget Secretary Benjamin Diokno and Local Government Secretary Ismael Sueno signed joint memorandum circular (JMC) 2017-1 prescribing the updated guidelines on the appropriation and utilization of LGUs development funds, which come from 20 percent of their IRA.

This is pursuant to Section 287 of Republic Act 7160 or the Local Government Code of 1991, which states that: “each (LGU) shall appropriate in its annual budget no less than 20 percent of its annual (IRA) for development projects.”

The DBM and DILG said the new guidelines seek to enhance the transparency and accountability of the LGUs in the utilization of their respective 20 percent development funds.

Under the circular, the LGUs’ priority development projects should be reflected in their approved local development plans and annual investment program (AIP), which should be directly supportive of the Philippine Development Plan and the Public Investment Program.

The circular also prescribed the allowable projects that can be funded through the 20 percent development fund, which are divided into three categories — social development, economic development and environmental management projects.

Social development projects include the construction and rehabilitation of health centers, hospitals, potable water supply system, evacuation centers, drug education and rehabilitation centers, multipurpose halls; purchase of medical equipments; rehabilitation of historical sites; and installation of street lighting system, among others.

Economic development projects, meanwhile, include the construction or rehabilitation of communal irrigation or water impounding system, and roads and bridges; purchase of post-harvest facilities; implementation of livelihood programs; and development of alternative energy sources, among others.

Lastly, environmental management projects include reforestation and urban greening, construction and rehabilitation of sanitary landfills and materials recovery facilities, purchase of garbage trucks and the implementation of flood control projects, and other environmental management projects.

On the other hand, the 20 percent development funds cannot be used to pay personnel salaries and benefits; administrative expenses, traveling expenses; participation in trainings, seminars, or conventions; and the purchase of office equipment and furnitures, and motor vehicles.

“It is the responsibility of every local chief executive to ensure that the 20 percent (development fund) is optimally utilized to help achieve the desirable socio-economic development and environmental outcomes of the LGU,” the circular stated.