Orientation on the Growth Equity Fund (GEF)

Session 1 : Overview of the

GEF under the LGSF
 PART 1

A. BACKGROUND
B. LEGAL BASES
C. CRITERIA ON DETERMINATION OF
BENEFICIARY LGUS
D. ALLOCATION CRITERIA
BACKGROUND
EFFECT OF THE MANDANAS CASE RULING ON NATIONAL TAXES
SHARING
Before Mandanas Ruling

SUPREME COURT
RULING ON THE
MANDANAS CASE
The Supreme Court ruled that the
just share of LGUs from the
national taxes is not limited to
“national internal revenue taxes”
collected by the Bureau of Internal
Revenue but includes collections
After Mandanas Ruling
(customs duties) by the Bureau of *26.7%
Customs and other collecting increase
agencies. 40%
40% IRA
IRA

internal revenue 60%

taxes NG
 FEATURES OF EXECUTIVE ORDER NO. 138

Delineation Preparation of Creation of the Establishment of

of the NG and the Devolution Committee on the Growth Equity
LGU Roles Transition Plans Devolution Fund
LEGAL BASES OF THE
LGSF-GEF
 LEGAL BASES OF THE LGSF-GEF

01 FY 2022 General Appropriations Act (GAA) - RA 11639

02 Local Government Code of 1991 - RA 7160

03 Executive Order (EO) NO. 138, s. 2021

01
SPECIAL PROVISION (SP) No. 4 of GAA FY 2022 - RA11639

FY 2022 GAA
President’s Veto
Message
P 1.25 B In a similar vein, ALGU-LGSF, Special
Provision No. 4, "Growth Equity Fund,"
Volume I-B, page 749, shall be executed
in accordance with the guidelines to be
issued by the Department of Budget
Allocated for implementation of Coordination Committee, pursuant to
priority projects in identified poor, Executive Order (EO) No. 138, s. 2021,..”
disadvantaged, and lagging LGUs
 02
SECTION 17 OF LOCAL GOVERNMENT CODE of 1991 - RA 7160
The LGU shall assume the devolved function in the delivery of basic
services and facilities as provided for in Section 17 of Local
Government of 1991.
03
EO NO. 138, S. 2021
Section 8 of EO No. 138, s. 2021 and Section 40 of its IRR:
• A GEF shall be established to address issues on marginalization,
unequal development, high poverty incidence, and disparities in the net
fiscal capacities of LGUs.
Section 41 of IRR of EO No. 138, s. 2021:
• The GEF shall be released to the LGUs in accordance with the
guidelines to be issued by the Development Budget Coordination
Committee;
CRITERIA ON DETERMINATION OF
BENEFICIARY LGUS
(LBC 146, S. 2022)
 CRITERIA TO DETERMINE BENEFICIARY LGUS

A. PROVINCES, CITIES, AND MUNICIPALITIES

Income Bracket Poverty Incidence Per Capita FY 2022 NTA

Deflated the FYs 2017-2020 income to the 2018 Full Year Official Poverty Statistics Ration of the National Tax Allotment for the
FYs 2004-2007 income of the LGUs and 2018 Municipal and City Level FY 2022 and the 2020 POPCEN of the PSA
Poverty Estimates of the PSA

Note: Excluding BARMM LGUs

 PROVINCES, CITIES, AND MUNICIPALITIES

First Filter
LGU Level Income Bracket
Provinces Bracket 4
No. of Eligible Beneficiaries
Cities Bracket 4 No. of
Municipalities Bracket 4 to 5 LGU Level
LGUs
Second Filter Provinces 3
Cities 7
PER Municipalities 150
POVERTY BENEFICIARY
CAPITA
INCIDENCE LGUs
NTA

At least 10% poorest and disadvantaged munis

 CRITERIA TO DETERMINE BENEFICIARY LGUS

B. BARANGAYS

First Filter Second Filter

270
Barangays as
GIDA and INCOME Eligible
Per Capita FY 2022 NTA
BRACKET Beneficiaries
10% with lowest Per Capita NTA
Geographically Isolated and Disadvantaged Areas
(GIDA) barangays located in Municipalities under 4
and 5 Income Brackets

Note: Excluding BARMM LGUs

ALLOCATION CRITERIA
(LBC 146, S. 2022)
 ALLOCATION DISTRIBUTION

Provinces Cities Municipalities Barangays

ALLOCATION
LEVEL OF LGU % ALLOCATION
10% (PhP)
Prov
10% Provinces 10% 125 Million
Cities
Cities 10% 125 Million
10%
Brgys Municipalities 70% 875 Million
70%
Munis GIDA Barangays 10% 125 Million
Total 100% PhP 1.25 B
 ALLOCATION CRITERIA

A.Provinces, Cities, and Municipalities

● Fifty percent (50%) based on poverty incidence as provided in the 2018 Full Year Official
Poverty Statistics and 2018 Municipal and City Level Poverty Estimates of the PSA; and
● Fifty percent (50%) based on per capita FY 2022 NTA shares of provinces, cities, and
municipalities.

B.Barangays
● The individual allocation shall be computed based on their respective per capita FY
2022 NTA shares
 RANGES OF ALLOCATION

Allocation (PhP)
No of
LGU Level Income Bracket
LGUs
Min Max

Provinces Bracket 4 3 11,185,920 58,000,370

Cities Bracket 4 7 10,723,550 28,955,860

Municipalities Bracket 4 to 5 150 2,713,470 9,200,590

GIDA From Municipalities belonging

270 320,370 560,560
Barangays to Bracket 4 to 5
 PART 2

A.Release of Allocations
B.Utilization of Allocations
C.Fund Management
(Treatment of the Shares of LGUs)
RELEASE OF ALLOCATIONS
(LBC 146, S. 2022)
 RELEASE OF THE ALLOCATIONS

LGUs are strongly enjoined to

Automatic and comply with the prescribed
direct release to guidelines and policies
the Beneficiary
e.g. technical requirements:
LGUs For Infra:
■ Proof of no right of way/land ownership issue/s;
■ Certification that the project/s is/are not located in “no-build zones
or critical geo-hazard areas” from MGB and/or Phivolcs, whichever
is applicable;
■ Proof of application all of required permits and clearances;
■ Approved DED
For Non-Infra:
➢Project Profile/Brief
➢ATP (vehicle)
 FUND RELEASE

1 SARO 4 NADAI

2 ANCAI
LGU shall record the fund as
TRUST FUND for the specific
purpose for which the fund was
received and shall be made available
for disbursement for the purpose
3 ADA specified until 31 December 2023

AGSB

Note: The release of allocation is the same with previous LGSF e.g AM, SA pursuant to Joint
Circular No. 4 dated 4 January 2016 issued by DBM and DOF
UTILIZATION OF ALLOCATIONS
(LBC 146, S. 2022)
 UTILIZATION OF ALLOCATIONS

Exclusively used by beneficiary LGUs to

01 gradually enable them to fully and efficiently
implement their devolved functions and
services pursuant to Sec. 17 of RA 7160

Priority projects and programs to be funded shall be included

02 in the approved Devolution Transition Plans (DTPs).
The DTP should have be:
● consistent with JMC NO. 2021-1 (DILG-DBM)
● approved by the respective Sanggunian on or before the
issuance LBC 146, s. 2022, and
● confirmed by the DILG.
 UTILIZATION OF ALLOCATIONS

Priority projects and programs to be funded shall be included in the

03 approved LDIP and AIP.
Identification of priority to be funded shall be determined in a public
consultations through CSOs.
(Optimize utilization and to avoid double-funding)
04 Higher beneficiary LGUs shall prioritize in the utilization of their
respective allocation to their non-beneficiary component LGUs

05 Beneficiary lower LGUs shall coordinate with higher beneficiary

LGUs in the identification of programs and projects.
 UTILIZATION OF ALLOCATIONS

Whenever necessary, the The beneficiary LGUs shall provide

06 beneficiary LGUs shall seek 07 counterpart funds if the
technical assistance from the NGAs program/project cost exceed the
concerned in the Implementation of GEF allocation
programs and projects

For infrastructure projects Disbursement and utilization of funds

08 implementation, the beneficiary
09 shall be subject to pertinent provision
LGU shall observe and comply of RA No. 9184 and its IRR, and any
with Section 28 (Implementation relevant policies issued by the
of Infra projects) and 29 GPPB, as well as the applicable
(Installation of Rainwater budgeting, accounting, and auditing
Collection System) of General rules and regulations.
Provision of FY 2022 GAA
 UTILIZATION OF ALLOCATIONS

PROHIBITION ON THE UTILIZATION

❏ Payment of Personnel Services Expenditure

❏ Administrative Expense
❏ Travelling Expenses
❏ Registration Fees and Other Similar Expenses
❏ Purchase, Maintenance or Repair of Administrative Office Furniture, Fixtures,
Equipment or Appliances
❏ Purchase, Maintenance or Repair of Motor Vehicles for Administrative Purpose
❏ Other PPAs and Expense not related to the implementation of devolved functions
and services pursuant to Section 17 of RA 7160.
FUND MANAGEMENT
(Treatment of the Shares of LGUs)

(LBC 146, S. 2022)

 FUND MANAGEMENT
(TREATMENT OF THE SHARES OF LGUs)

The FY 2022 LGSF-GEF shall be recorded as a trust fund by the beneficiary LGUs
and shall be made available for disbursement until December 31, 2023

After the end of the validity period, any unreleased appropriations shall lapse, while
undisbursed funds shall revert to the National Treasury, particularly to the
unappropriated surplus of the General Fund.
2022 GAA General Provision, Sec. 68 Cash Budgeting:
xxx, construction of infrastructure projects, delivery of goods and services, inspection and payment shall be made not later than
December 31, 2023.
After the end of the validity period, xxx, while unexpended or undisbursed funds shall revert to the unappropriated surplus
of the General Fund xxx and shall not thereafter be available for expenditure except by subsequent legislative enactment.
xxx obligated but not actually used, utilized, expended or disbursed to pay for completed construction, goods delivered,
and services rendered, inspected and accepted as of December 31, 2023, shall revert to the unappropriated surplus of the
General Fund.
 FUND MANAGEMENT
(TREATMENT OF THE SHARES OF LGUs)

PROJECT IMPLEMENTATION SCHEDULE

LBC 146 Certificate of End of Fund
NADAI
issuance issuance
Completion (CoC) Validity 3 months
(7-Jul-22) issuance (31-Dec-23) (recommended)

PRE-IMPLEMENTATION PHASE IMPLEMENTATION PHASE Payment Reversion of

Processing undisbursed
NTP Final Billing fund to BTR
Issued Paid

Pre-implementation and Post Implementation &

Project Implementation Sustainability
Project Identification, Survey, DED
prep, Procurement and Construction

* Processing of payment at least one (1) month before lapse of fund validity. Thus, it is recommended that the
contract duration as well as project completion must be on or before 30 Nov 2023 to provide window in the
processing of final payment.
 PART 3

A. Monitoring and Evaluation

B. Posting and Reporting Requirements
C. Responsibility and Accountability
MONITORING AND EVALUATION
(LBC 146, S. 2022)
 MONITORING AND EVALUATION

• The DILG shall be responsible for the monitoring and evaluation of

actual project implementation of LGUs pursuant to SP No. 3 of DILG-
OSEC FY 2022 GAA;
• DBM shall provide the DILG with a list of releases from the FY 2022
LGSF-GEF for monitoring and evaluation purposes;
• Beneficiary LGUs shall comply with the guidelines* that may be issued
by the DILG for the monitoring and evaluation of the actual
implementation of projects, including the submission of the necessary
plans/documents that may be required by the DILG relative to the
project design/preparation

*Omnibus Guidelines issued by DILG shall be the

governing policy in the conduct of M & E of LGSF funded
programs and projects
MONITORING AND EVALUATION

SALIENT FEATURES OF THE OMNIBUS M & E GUIDELINES

● SubayBAYAN Portal - the official monitoring platform of the DILG

for the LGSF funded projects. LGUs shall be required to enroll and
regularly update (on a monthly basis) the project details as well as
the physical and financial status of implementation, including
MOVs, which shall be approved and vetted by the DILG. The
beneficiary LGUs shall enroll the project/program in the
SubayBAYAN within 15 days upon receipt of NADAI.
● Risk-Based Monitoring and Evaluation Framework - includes
the Management Action Process and the Warning System
MONITORING AND EVALUATION
WARNING SYSTEM
 MONITORING AND EVALUATION

SALIENT FEATURES OF OMNIBUS M & E GUIDELINES

● QAAR Tool - this shall be used during the conduct of actual field monitoring by the DILG and
LGU. The RO shall monitor the utilization and submission of the accomplished QAAR Tool of
LGUs.

● Rapid Subproject Sustainability Assessment (RSSA) - this shall be conducted by LGUs to

validate the functionality and operability of the completed facilities one (1) year after
completion
RESPONSIBILITY AND
ACCOUNTABILITY OF
BENEFICIARY LGUs
(LBC 146, S. 2022)
 RESPONSIBILITY AND
RESPONSIBILITY AND ACCOUNTABILITY
ACCOUNTABILITY
Disbursement and Utilization

• Government Procurement Act Implementation of

(RA 9184) programs and projects, and
• 2016 Revised IRR & policies issued proper utilization and
by the GPPB disbursement of the LGSF-
z
• Applicable budgeting, accounting, GEF shall rest upon the
auditing rules and regulations LCE and other local
officials concerned of the
recipient LGU.
 RESPONSIBILITIES OF BENEFICIARY LGUs

✔ Ensure functionality of LPMC

✔ Ensure project implementation in ✔Prepare and submit Project Completion

The beneficiary LGUs shall:
accordance and compliance with the Report within 30 days CDs after issuance
national standards, policies, and of CoC.
issuances on design, plan, and
specifications.

✔ Issue Notice of Defects/defeciencies

to the contractor for the observations,
findings, and recommendations ✔ Capture geo-tagged photos of the project
stiputed in the aid memoire to be included in quarterly status report
per GAA and upload the same to the
Subaybayan portal.
✔ Enroll and update status of the
projects in Subaybayan, within 15
days upon receipt of NADAI.
 RESPONSIBILITIES OF BENEFICIARY LGUs
Implementation of Nationally Funded Projects under GAA FY 2022 (Sec. 94, GP).

Pursuant to Section 17(c) of R.A. No. 7160, the National Government

Agencies, XXX, may designate LGUs as implementing agencies for
public works and infrastructure projects and other programs, services and
facilities, XXX, subject to the following:
The beneficiary LGUs:
A. The LGU has the capability to implement the foregoing by administration or
contract and in accordance with the design, plan, specifications, and such other
standards and policies of the National Government;

B. The LGU-recipient shall commit to fund the cost of maintenance and repairs
thereof; and

C. The amounts appropriated to LGUs shall be released during the fiscal year to be
deposited in a trust fund and shall be made available for disbursement for the
purpose specified until 31 December 2023
 RESPONSIBILITIES OF BENEFICIARY LGUs
Section 3 of Appendix 1 of the IRR of RA 9184
(Updated as of March 31, 2021)

Implementation of
Nationally Funded Projects
The LGU has the
capability to implement
the proposed project/s
and/or program/s, either
“by administration”
 RESPONSIBILITIES OF BENEFICIARY LGUs

Section 3 of Appendix 1 of the IRR of RA 9184

(Updated as of March 31, 2021)
Implementation of
Nationally Funded Projects
The LGU has the
capability to implement
the proposed project/s
and/or program/s, “by
administration”
 POSTING AND REPORTORIAL REQUIREMENTS

The beneficiary LGUs shall:

✔ Prepare Quarterly Reports on fund utilization and status of
program/project implementation using Annex E of LBC 146

✔ Be consistent with the Full Disclosure Policy of the DILG, post the
same reports in at least three (3) conspicuous public places in the
locality and on the LGU’s website within twenty (20) calendar days
from the end of each quarter

✔Send written notice to the Secretary of the DBM, Secretary of DILG,

Speaker of the House of Representatives, President of the Senate of
the Philippines, and the Chairpersons of the House Committee on
Appropriations and Senate Committee on Finance upon posting of
reports on the LGU’s website. The date of notice to said agencies
shall be considered the date of compliance with the requirement.
 POSTING AND REPORTORIAL REQUIREMENTS
The beneficiary LGUs shall:

✔ Comply with posting requirements prescribed under RA No. 9184

and its 2016 Revised IRR, and all relevant policies issued by the
GPPB

Section 37.1.6
“The BAC, through the Secretariat, shall post, within three (3) calendar days from its
issuance, the Notice of Award in the PhilGEPS, the website of the Procuring Entity, if
any, and any conspicuous place in the premises of the Procuring Entity.”

Section 37.4.2
“The Procuring Entity, through the BAC Secretariat, shall post a copy of the Notice
to Proceed and the approved contract in the PhilGEPS and the website of the
Procuring Entity, if any, within fifteen (15) calendar days from the issuance of the
Notice to Proceed.”

Section 54.3
“In all instances of alternative methods of procurement, the BAC, through the
Secretariat, shall post, for information purposes, the notice of award, contract or
purchase order, including notice to proceed if necessary, in the PhilGEPS website, the
website of the Procuring Entity concerned, if available, and at any conspicuous place
reserved for this purpose in the premises of the Procuring Entity, except for contracts
with ABC of Fifty Thousand Pesos (₱50,000.00) and below.”