Over 1,300 LGUs to receive subsidy for local development projects from P1-B Performance Challenge Fund

QUEZON CITY, July 11 (PIA) – The Department of Interior and Local Government has requested the Department of Budget and Management for the release of P1 billion to 1,365 local government units that passed the agency’s Seal of Good Housekeeping (SGH).

Local governments that passed the SGH are entitled to receive financial subsidy from the DILG’s Performance Challenge Fund (PCF). The DILG had assessed 1,590 LGUs for this year’s batch of SGH awardees.

The PCF aims to encourage local governments to put premium on transparency and accountability in governance. The funds shall be used to jumpstart and sustain local socio-economic development initiatives supportive of national government goals and priorities.

The fund also seeks to encourage convergence of local development projects with the government’s priority programs for the achievement of the Millennium Development Goals (MDGs), tourism and local economic development thru road network maintenance, and compliance to the objectives of the Philippine Disaster Risk Reduction and Management Act of 2010 and the Ecological Solid Waste Management Act of 2000.

The maximum PCF subsidy for provincial, city and municipal government unit are P7 million, P3 million and P1 million, respectively.

Government has allocated P1 billion for PCF in 2013.

In 2010, PCF was initially implemented in 4th to 6th class municipalities providing financial subsidy to 30 municipalities.

In 2011, the national government allocated P500 million, which was given to eligible LGUs belonging to the lower income class LGUs (Round 1 assessment for 4th to 6th class provinces, cities and municipalities).

For 2012, the budget allocation was P750 million, which was prioritized for the eligible higher income class LGUs (Round 2 assessment covering 1st to 3rd class provinces, cities and municipalities). However, this amount was not enough to cover 515 eligible LGUs at the time. To be able to provide the subsidy to all the second round SGH passers, an augmentation fund of P253 million was released.

Among the target recipients in 2012 were the remaining 1st to 3rd class LGUs that did not avail themselves of the PCF subsidy in 2011. The original budget allotment then, however, could only cover 468 LGUs belonging to 2nd and 3rd class provinces, cities and municipalities and 1st class municipalities, leaving 47 eligible LGUs without PCF subsidy. (PIA Newsdesk)