What is Performance Challenge Fund?

PCF is an incentive given to high performing local government units (LGUs) in the country.It is granted as an incentive to support high-impact local development projects in the Annual Investment Program (AIP) and funded out of the 20% Local Development Fund consistent with national goals and priorities. It seeks to rationalize national government intergovernmental transfers to LGUs, and encourage alignment of local development initiatives with national government development agenda and priorities.

What are the eligible projects for PCF?

Projects must be implemented and completed within one year from the date of receipt of the PCF check and Notice to Implement (NTI) by concerned Recipient LGUs. The PCF subsidy shall be used for projects supportive of the Philippine Development Plan (PDP) 2017-2022 such as those:

  • Attainment of MDGs/Sustainable Development Goals: (e.g. school buildings, rural health unit’s/health centres, birthing or lying-in facilities, water and sanitation, and housing and settlements, Rehabilitation Centre, Patrol Cars);
  • Stimulating Local Economic Development (e.g. core local roads and bridges, access roads, irrigation systems, post-harvest facilities, cold storage facilities, ports and wharves and other economic structures and growth enhancement projects like market, slaughter house, etc.
  • Preparing for Disaster and Adapting to Climate Change (e.g. flood control, reforestations, storm drainage, dikes, seawall and related flood protection measures and slope protection, evacuation centres, rainwater collection facility, early warning system/devices and rescue equipment)
  • Promoting Environmental Protection (e.g. sanitary landfill, material recovery facilities, sewerage system)
  • Furthering Transparency and Accountability (e.g. website development)

Who are qualified to access the PCF?

  1. The PC Fund is open to all provinces,  cities and municipalities that passed the “Seal of Good Housekeeping (SGH)”  focused on :
    • Sound Fiscal Management  highlighting  the absence of adverse COA Opinion on LGU financial statements; and
    • Transparent and Accountability Governance putting value on the Full Disclosure Policy.
  2. LGUs that were recipient of previous year’s PCF (e.g. 2010) shall be eligible to the current year’s PCF if they :
    • Passed the Seal of Good Housekeeping
    • Have completed the previous year’s PCF-supported  projects; and
    • Have submitted to the concerned DILG Regional Office corresponding Project Completion Report and the Report of Disbursement verified by COA Field Office

What is the Maximum Amount PCF Subsidy and the Counterpart Sharing Scheme?

“50-50” counterpart sharing scheme between the National Government PCF and the eligible LGU shall be applied. The PCF subsidy shall match the investment of eligible LGU up to a maximum amount based on the LGU level. The maximum subsidy for a province is P7M;  city—P3M ; and for a municipality—P 1M.

What are the requirements to access to PCF?

  1. The PCF with the LGU counterpart may be used as:
    • subsidy for big projects of LGUs;
    • counterpart funds for foreign-assisted projects of the LGUs,
    • co-financing for joint projects with other LGUs, and
    • counterpart for projects of the LGUs with the private sector in the context of public private partnership in establishing more economic activities.
  2. The utilization of PCF shall be governed by the existing policies on the appropriations and utilization of 20% development component of the Annual Internal Revenue Allotment  (IRA) of LGUs.

What are the requirements to access the PCF?

  • A letter of Intent and Local Sanggunian Resolution that authorizes the Local Chief Executive to enter into MOA with the DILG;
  • A Memorandum of Agreement (MOA) signed between DILG Regional Director and the Local Government Unit (LGU);
  • Certified true copy of the Annual Investment Program (AIP) or Local Development Investment Program (LDIP) or Provincial Development Investment Program (PDIP) Provincial (page indicating the proposed project) by the Secretary to the Sanggunian; and
  • Government Bank Certification that states the LGU has an existing Trust Fund

What are the guidelines issued to guide the implementation of PCF?

  • MC 2016-167 dated Nov. 23, 2016 re: Guidelines for the release of the 2016 Performance Challenge Fund (PCF)
  • MC 2016-153 dated Oct. 28, 2016 re: Guidelines for the release of the 2016 Performance Challenge Fund (PCF)
  • MC 2015-111 dated Sept. 28, 2015 re: Operational Guidelines on the Implementation of 2015 Performance Challenge Fund (PCF)
  • MC 2015-78 dated July 22, 2015 re: Guidelines for the Release of the 2015 Performance Challenge Fundand
  • MC 2015-37 dated April 7, 2015 re: Eligible Beneficiaries of the 2014 Performance Challenge Fund
  • MC 2012-148 dated Dec. 19, 2013 re: Guidelines in the Implementation of the CY 2013 Performance Challenge Fund (PCF)
  • MC 2012-68 dated April 13, 2012 re: Implementing Guidelines in the availment of 2012 Performance Challenge Fund (PCF)
  • MC 2012-68dated April 13, 2012 re: Implementing Guidelines in the availment of 2012 Performance Challenge Fund (PCF)
  • MC 2011-170 dated Nov. 16, 2011 re: Revised guidelines on the Implementation of Performance Challenge Fund in view of the temporary suspension and rationalization of the national government-local government unit cost-sharing policy
  • MC 2011-162 dated Nov. 8, 2011 re: Supplemental Guidelines in the Implementation of 2011 Performance Challenge Fund (PCF) to support the Gawad Pamana ng Lahi Award
  • MC 2011-123 dated August 31, 2011 re: Supplemental Guidelines in accessing the 2011 Performance Challenge Fund (PCF)
  • MEMO No. 2010-003 dated Oct. 29, 2010 re: Supplemental Guidelines for the 2010 Pilot Implementation of the Performance Challenge Fund Grant

How many PCF Projects per Category?

LGU Projects are under five categories or pillars as follows: 891 Millennium Development Goal (MDG) projects, 1,441 Local Economic Development (LED) projects, 131 Ecological Solid Waste Management (ESWM) projects, 324 Disaster Risk Reduction and Management (DRRM)/ Climate Change Adaptation (CCA) projects and 3 projects under Transparency and Accountability.

What are the monitoring and evaluation schemes of PCF?

Progress Monitoring

  • The LGU shall submit a Monthly Progress Accomplishment Report within five (5) days after the end of ensuing month using the Statement of Work Accomplished (SWA) and Statement of Receipts and Disbursement (SORD)to the Regional Office thru channel.

Conduct of Monitoring Visits

  • The DILG Regional Team shall conduct quarterly monitoring visits. The National PCF Management Team shall conduct spot-checks and validation.

Data Uploading on the PCF Website

  • To fast track submission of PCF Project Accomplishment Reports of recipient LGUs, the Cluster Leaders (CLs) and PCF Provincial Focal Person shall upload the status of LGU project implementation on a monthly basis (not later than the 5th day of the ensuing month) directly at the PCF website.

Reporting of Completed Projects

  • To fast track submission of PCF Project Accomplishment Reports of recipient LGUs, the Cluster Leaders (CLs) and PCF Provincial Focal Person shall upload the status of LGU project implementation on a monthly basis (not later than the 5th day of the ensuing month) directly at the PCF website.

Data Uploading on the PCF Website

  • Within 10 calendar days of project completion, the LGUs shall submit the copy of their Project Completion Reports (PCRs) (Annex K) to the DILG Regional Office thru channels.

Reportorial Requirements under the General Appropriations Act (GAA)

  • Based on the GAA, BLGD shall update the following: Department of Budget and Management (DBM), House of Representatives, and the Senate with quarterly reports that note financial and physical accomplishments of PCF. The same report shall also be posted on the DILG website as compliance to such reportorial requirements, hence, submission of reports by the LGU recipients thru channels and up-to-date encoding of DILG Field Officers in the PCF website is necessary.