DILG
DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT (DILG)
DEPARTMENT OF BUDGET AND MANAGEMENT (DBM)
Joint Memorandum Circular (JMC) No. 2017 — 1
Date: February 22, 2017
To Local Chief Executives, Members of the Local Sanggunians,
Members of the Local Finance Ccmmittees, Heads and Directors of
the Central and Regional Offices/Field Offices of the DBM and
DILG, and All Others Concerned
Subject
1.0 PURPOSES
1.1 To prescribe the updated guidelines on the appropriation and utilization
of no less than 20% of the IRA for development projects (hereinafter
referred to as 20% Development Fund [DF] for brevity), as provided
under the Local Government Code of 1991 (Republic Act [RAj No.
7160); and
1.2 To enhance transparency and accountability in the local government
units' (LGUs') utilization cf their respective 20% DFs.
2.0 GENERAL POLICIES
2.1 In accordance with Section 287 of RA No. 7160, eVery LGU shall
appropriate in its annual budget no less than twenty percent (20%) of
its annual IRA for deVelopment projects.
2.2 The 20% DF shall be utilized to finance the LGU’s priority development
projects, as embodied in its duly approved local deVelopment plans
and Annual Investment Program (AIP), which should be directly
supportive of the Philippine DeVelopment Plan and Public InVestment
Program.
2.3 All development projects to be funded under the 20% DF shall
contribute to the attainment of desirable socio-economic development
and en\/ironmentaI management outcomes of the LGU, and shall
partake the nature of investment or capital expenditures.
3.0 ALLOWABLE DEVELOPMENT PROJECTS CHARGEABLE AGAINST THE
20’/ DF
3.“. Social Development
3.1.1 Construction or rehabilitation of health centers, rural health units or
hospitals, including purchase of lot for the purpose;
3.1.2 Purchase of ambulance and medical equipment;
3.1.3 Construction or rehabilitation of local government-owned potable
water supply system;
3.1.4 Establishment or rehabilitation of Manpower Development Centers,
3.1.5 Construction or rehabilitation of evacuation centers, including
purchase of lot for the purpose;
3.1.6 Construction of Special Drug Education Centers, and Drug
Treatment/Rehabilitation Centers, including purchase of lot for the
purpose;
3.1.7 Rehabilitation of historical sites classified as such by the National
Historical Commission of the Philippines;
3.1.8 Purchase and development of land for the relocation of informal
settlers and relocation of victims of calamities;
3.1.9 Construction or rehabilitation of multi-purpose halls, including
purchase of lot for the purpose; and
3.1.10 Installation of street lighting system.
3.2 Economic Development
3.2.1 Construction or rehabilitation of communal irrigation or water
impounding system;
3.2.2 Purchase or lease of post-harvest facilities, such as farm or hand
tractor with trailer, thresher and mechanical driers;
3.2.3 Construction or rehabilitation of local roads or bridges, including
purchase of appropriate engineering equipment, such as dump
trucks, graders and pay loaders;
3.2.4 Capital expenditures related to the implementation of livelihood or
entrepreneurship/local economic development projects;
3.2.5 Development cf alternative power or energy sources, such as, but
not limited to, renewable energy power plants; and
2
3.2.6 Amortization of loans used to finance development projects cited in
this JMC, subject to the 20% debt service cap prescribed under
Section 324 (b) of RA No. 7160.
3.3 Environmental Management
3.3.1 Reforestation and urban greening;
3.3.2 Construction or rehabilitation of sanitary landfills and materials
recovery facilities;
3.3.3 Purchase of garbage trucks and other equipment for environmental
management and protection purposes;
3.3.4 Implementation of flood and erosion control projects, such as
rehabilitation and construction of drainage systems, de-silting of
rivers, and de-clogging of canals; and
3.3.5 Other environmental management projects that promote air and
water quality, as well as productivity of the coastal or freshwater
habitat, agricultural land and forest land, such as, but not limited to,
treatment of wastewater for conservation/re-use purposes, and
installation of air pollution control devices.
4.0 EXPENDITURE ITEMS NOT ALLOWED TO BE CHARGED AGAINST THE
20% DF
The following expenditure items shall not be allowed to be charged against the
20% DF or included in the appropriations for allowable development projects:
4.1 Personal Services expenditures, such as salaries, wages, overtime pay
and other personnel benefits;
4.2 Administrative expenses, such as supplies, meetings, communication,
water and electri.-ity, petroleum products, other general serVices, and the
like;
4.3 Traveling expenses, whether domestic or foreign;
4.4 Registration or participation fees in training, seminars, conferences or
conVentions;
4.5 Purchase of administrative office' furniture, fixtures, equipment or
appliances; and
4.6 Purchase, maintenance or repair of motor vehicles or motor cycles, other
than those specified in item 3.0 hereof.
50 RESPONSIBILITY OF THE LOCAL CHIEF EXECUTIVE
It is the responsibility of every local chief executive to ensure that the 20%
DF is optimally utilized to help achieve the desirable socio-economic
development and environmental outcomes of the LGU.
The utilization of the 20% DF, whether willfully or through negligence, for
any purpose other than those expressly prescribed by law or public policy
shall be subject to the sanctions provided under RA No. 7160 and other
applicable laws.
6.0 SUBMISSION OF THE AIP
All LGUs shall furnish the DILG and the DBM, through their respective
Regional Offices, copies of the approved AIP containing, among others, the
projects to be funded out of the 20% DF.
7.0 MONITORING
The DILG, through its Bureau of Local Government Supervision, shall monitor
the utilization of the 20% DF through its Local Government Performance
Management System, and maintain a database system on the 20% DF.
8.0 REPEALING CLAUSE
All issuances by the DILG or the DBM which are not consistent herewith are
hereby superseded accordingly. Any future issuance(s) of either the DBM or
the DILG in relation to the appropriation and utilization of the 20% DF shall be
made in accordance with this JMC
9.0 EFFECTIVITY
This JMC shall take effect immediately.
ISMAEL D. SUENO BENJAMIN E. DIOKNO
Secretary, DILG Secretary, DBM
