DBM reminds LGUs to use subsidies on priority projects

CEBU, Philippines - The Department of Budget and Management (DBM) said financial subsidies allotted for local government units (LGUs) should only be spent to support priority projects and programs and cover deficiencies in internal revenue allotments (IRAs).

The DBM said in a new issuance, Local Budget Circular 107, the local government support fund (LGSF) shall be used for financial subsidy to LGUs.

The fund, according to the Budget department, should not be used to pay salaries including honoraria, allowances and bonuses of LGU workers.

The DBM circular said the 2015 national budget has allotted about P3.13 billion for LGSF which should be used for Bottom-up Budgeting (BuB) projects and other priority projects of LGUs and to cover deficiencies in IRA shares of LGUs.

This year's LGSF includes P200-million financial assistance for LGU projects, P2.8 billion for BuB projects and P100 million to cover IRA share deficiencies.

"The request for financial assistance shall be submitted by the local chief executive to the DBM, supported by a list of programs/projects to be implemented and Sanggunian Resolution endorsing the said request and list," the DBM said.

Projects covered by the P200-million financial assistance include health and social services for indigent people; security; and public infrastructure projects such local roads and bridges, flood control, water supply system, public markets and police, jail and fire stations.

LGU recipients of the subsidy are mandated to prepare quarterly reports on the use of fund and the status of implemented projects.

As to the IRA adjustments, the Budget agency said the amount should not exceed P100 million, noting that adjustments requiring more than the set amount can only be recognized and implemented in the succeeding year.

The Philippines has a total of 1634 LGUs which include cities and municipalities. — Carlo S. Lorenciana (FREEMAN)