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DBM releases P1 B for LGU subsidiesSeptember 13, 2013

THE DEPARTMENT of Budget and Management has released P1 billion to the Interior department for financial subsidies for qualified local government units (LGUs), the DBM said in a statement yesterday.

The allotment will support the Performance Challenge Fund (PCF), a financial subsidy program that recognizes and rewards LGUs for projects that contribute to the improved delivery of public services and better governance, the DBM said.

“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,” DBM Secretary Florencio B. Abad was quoted as saying in the statement.

“At the same time, PCF-supported programs should also promote governance reforms that enhance transparency, accountability, and openness in the way our LGUs work,” Mr. Abad said.

The release, according to the DBM, is already the total allocation set for the PCF under the 2013 budget.

Under the program, the government can subsidize up to P7 million for each province, P3 million for each city, and P1 million for every municipality, with priority given to less financially able LGUs.

The PCF can subsidize major projects under a particular LGU. The fund may also be tapped as counterpart funding for foreign-assisted projects under LGUs or those pursued by LGUs with private sector organizations, and can likewise serve as co-financing for a local government’s joint projects with other LGUs.

“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,” the DBM said.

“Projects that address climate change management and disaster preparedness are also qualified for the PCF,” it added.

Mr. Abad said that another requirement is the Seal of Good Housekeeping, which the Interior department confers to local governments “that have shown great progress in instituting governance reforms, particularly with respect to transparency, accountability, planning, fiscal management, and performance monitoring.”

Currently, 1,365 LGUs out of the 1,590 assessed by Interior department have gained the Seal of Good Housekeeping.

“If we want to institutionalize reforms, we need to take a close look at how government is performing at the local level. Do our local governments effectively address the needs of their constituents? Are we able to provide public goods and services with utmost efficiency? Do our governance reforms produce real, direct, and long-term benefits for our communities?”, the DBM chief said. -- Bettina Faye V. Roc


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