‘Bottom-up’ budget hinges on LGU compliance

MANILA, Philippines–The administration has given local government units (LGUs) only this month to comply with good governance standards before the provincial officials undertake projects funded under the “bottom-up” budgeting scheme.

Specifically, the local governments must abide by the good financial housekeeping component of the seal of good local governance fiscal year 2014 assessment. They must also submit public financial management improvement plans or initiate its implementation, according to Joint Memorandum Circular No. 6 issued on Feb. 27 by the Department of Budget and Management (DBM), Department of the Interior and Local Government, Department of Social Welfare and Development, and National Anti-Poverty Commission (NAPC).

If a city or municipality cannot comply with the conditions, the fund will go to the provincial government covering the LGU. In turn, the provincial authority must conform to the good financial housekeeping conditions before the local poverty reduction action team transfers the project funding to the provincial government.

But if the province was found to be non-compliant as well, the relevant government agency will have to implement the project instead.

This year, projects covered by the Local Government Support Fund under the bottom-up budgeting initiative include infrastructure work, such as the construction of access roads, and capacity building projects, as well as integrated community food production programs.

The LGUs must submit an endorsement from the NAPC prior to the release of funds for integrated community food production projects, according to the circular.

“LGUs shall be accountable for ensuring that the design and costing of these projects are within standard and do not exceed the cost of similar projects being implemented by [national government agencies] in the same locality, and that government procurement, budgeting, accounting and auditing rules and regulations are observed,” the circular read.

The bottom-up budgeting approach engages grassroots communities, basic sector organizations and civil society when allocating resources under the national budget so that the LGUs’ development needs could be taken into consideration.

According to the circular, bottom-up budgeting increases “citizens’ access to local service delivery through a demand-driven budget planning process” while it strengthens “government accountability in local public service provision.”

Budget Secretary Florencio B. Abad had said that bottom-up budgeting in the country was a “landmark reform,” noting that the Philippines was the very first to implement participatory budgeting at the national level.