GIZ Vo1I ntegrated LGU Planning Compendium

7/28/2019 GIZ Vo1I ntegrated LGU Planning Compendium

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1


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Message:

The signing of the Joint Memorandum Circular (JMC) No. 1 Series of 2007 proved to bethe landmark policy in the synchronization and harmonization of the core LGUoperations. As a result, the JMC triggered the issuance of several updated manualsfrom the four signatory agencies, Department of the Interior and Local Government(DILG), National Economic and Development Authority (NEDA), Department of Finance(DOF) and Department of Budget and Management (DBM). Furthermore the fouragencies have strengthened the coordination with the Housing and Land UseRegulatory Board (HLURB) completing the membership of the JMC composite team.

As advocates of decentralization and devolution, the GTZ-Decentralization Program(DP) respects the autonomy of the LGUs. With the JMC in place, the oversight agencies

themselves can only prescribe what tools can be used in implementing the core LGUoperations. Hence, the DP looked into each of the tools to help and make it easilyavailable for the LGUs as well as decentralization practitioners. This Compendiumoutlines the basic elements in each of the core LGU operations. These are the:

Activities, Required Outputs, Suggested Approaches/Tools and the Reference Manuals.With this publication, the LGUs can choose what tool best suites them.

The Compendium is a five (5) volume document cross-referencing to the various tools

on the core LGU operations. Volume 1: Integrated Guide summarizes the general stepsof the core LGU operations. On the other hand the detailed explanations anddescriptions can be found on the succeeding volumes: Volume 2: Planning Tools and

Approaches, Volume 3: Investment Programming Tools and Approaches, Volume 4:


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TABLE OF CONTENTS

I. Local Planning 7

A.Required Planning Documents 7B.Suggested Planning Structure and Organizational Activities 8

C.Basic Planning Steps 12D.Plan Formats 23E.Planning Calendar per JMC 25

II. Investment Programming 26

A. Required Documents for Local Investment Programming 26B. Suggested Institutional Structure for the Preparation

of the Investment Program and Organizational Activities 26C. Basic Steps in Investment Programming 28D. Suggested Format of Local Investment Plans 33E. Calendar of Activities on Investment Programming 34

III. Revenue Administration and Resource Mobilization 34

A. Required Outputs and Documents 34B. Suggested Institutional Structure for the Preparation ofthe Required Outputs and Documents on Revenue Administration 35

C. Basic Processes in the Preparation of theR i d O t t d D t 36


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List of Tables, Figures and Annexes

List of Tables

1 Required Planning Outputs and Guides2 Suggested Approaches and Tools in Organizing Planning Teams3 Suggested Approaches and Tools in Assessing the Planning Environment4 Suggested Approaches and Tools in Setting Goals, Targets and Objectives

5 Suggested Approaches and Tools in the Formulation of Strategies and Policies

6 Suggested Approaches and Tools in the Identification of Programs, Projects andActivities7 Suggested Approaches and Tools in Setting the Legislative Agenda8 Suggested Approaches and Tools in Public Consultations Prior to Plan Approval9 Suggested Approaches and Tools in Plan Implementation10 Suggested Approaches and Tools in Monitoring and Evaluating Plan

Implementation11 Proposed Schedule of Planning Activities per JMC

12 Required Outputs in Investment Programming and Guides13 Suggested Approaches and Tools in Establishing Investment Programming Policies14 Suggested Approaches and Tools in the Initial Identification and Screening of Projects15 Suggested Approaches and Tools in Ranking Programs, Projects and Activities16 Suggested Approaches and Tools in Conducting the Financial Analysis of Projects17 Required Outputs in Investment Programming and Guides18 Proposed Schedule of Activities Related to Investment Programming per JMC19 Major Outputs Related to Revenue Administration and Resource Mobilization

20 Suggested Approaches and Tools in Financial Planning and Resource Mobilization21 Suggested Approaches and Tools in Preparing the Statement of Receipt and

Expenditures22 Suggested Approaches and Tools in Revenue Forecasting23 Key Players in the Budget Process


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5 Responsibilities of Key Players in The Budget Process From R.A. 7160

ACRONYMS

AMPS Assessment Matrix of Project SustainabilityADB Asian Development BankAIP Annual Investment ProgramARO Allotment Release OrderBLGF Bureau of Local Government Finance

CBMS Community-Based Monitoring SystemCDP Comprehensive Development PlanCDS City Development StrategyCFA Cash Flow AnalysisCLUP Comprehensive Land Use PlanDBM RO Department of Budget and Management Regional OfficeDILG Department of the Interior and Local GovernmentDFPPT Detailed Financial and Physical Performance TargetsDOF Department of Finance

ELA Executive and Legislative AgendaEO Executive Order GFI Government Financial InstitutionHLURB Housing and Land Use Regulatory BoardJMC Joint Memorandum Circular No. 001 on Local Planning, Investment

Programming, Revenue Administration, Budgeting and Expenditure ManagementLBA Local Budget AuthorizationLBAc Local Budget Accountability

LBE Local Budget ExecutionLBM Local Budget MatrixLBP Local Budget PreparationLBPE Local Budget Performance EvaluationLBR Local B dget Re ie


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NEDA National Economic and Development AuthorityNGAS New Government Accounting System

OPIF Organizational Performance Indicator FrameworkPDC Provincial Development CouncilPDIP Provincial Development Investment Plan/ProgramPDPFP Provincial Development and Physical Framework PlanPEM Public Expenditure ManagementPLPEM Provincial/Local Planning and Expenditure ManagementPLUC Provincial Land Use CommitteePOPDEV Population and DevelopmentPPAs Program/ Project/ ActivityPPDC Provincial Planning Development CoordinatorPPMP Project Procurement Management PlanPPFP Provincial Physical Framework PlanPRR Performance Review ReportRAAO Registry of Appropriations, Allotments and ObligationsRAAOCO Registry of Appropriations, Allotments and Obligations Capital OutlaysRAAOFE Registry of Appropriations, Allotment and Obligations Financial ExpensesRAAOMO Registry of Appropriations, Allotments and Obligations Maintenance & Other

Operating ExpensesRAAOPS Registry of Appropriations, Allotments and Obligations Personal ServicesRBOM Revised Budget Operations ManualRPS Rationalized Planning System/Rationalized Local Planning

System of the PhilippinesRRMC Revised Revenue Mobilization CoursebookSCFF Statement of Cash Flow ForecastSFPPT Summary of Financial and Physical Performance TargetsSRE Statement of Receipts and ExpendituresSWOT Strengths-Weaknesses-Opportunities-ThreatsTOWS Total Overall Weighted ScoreUNDP United Nations Development ProgramZO Zoning Ordinance


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I. LOCAL PLANNING

The preparation of medium and long-term development strategies provides localgovernment units (LGUs) with an objective basis for making decisions that enable them toprioritize their immediate needs more rationally and accurately in the face of challenges ofemerging urban development.

A. Required Planning Documents

Plan documents take on many forms at the local level. The Local GovernmentCode mandates LGUs to prepare two (2) major plans a land use plan and acomprehensive plan. In addition, the Department of the Interior and Local Government(DILG) has promoted the preparation of term-based plans the ExecutiveLegislative

Agenda (ELA). Several manuals have been prepared to guide the LGUs in thepreparation of these plan documents. Table 1 summarizes the different planningdocuments required at the local level and the guides that have been prepared to assistthe LGUs.

1. Land Use or Physical Plans

1.1 Physical Framework Plan

In the case of provinces, the land use plan may take on two forms: (1) theProvincial Physical Framework Plan (PPFP) required by the Housing and LandUse Regulatory Board (HLURB); and/or (2) the Provincial Development andPhysical Framework Plan (PDPFP), which is a recent document being endorsed

by the National Economic and Development Authority. The latter is a merger ofthe traditionally separate Provincial Development Plan and the PPFP. Themerger is aimed at eliminating overlaps in the separate planning outputs andaddresses the spatial-sectoral, and medium-term and long-term disconnect that


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been advocating the preparation of the Comprehensive Development Plan (CDP) at thecity and municipal levels.1 To date, some cities have been preparing a City Development

Strategy (CDS) Report which may be considered a comprehensive plan.2

Anothercomprehensive development plan is the Executive-Legislative Agenda (ELA) which isclassified more as a term-based plan but whose coverage may be liken to the usualcomprehensive plan except that the time period is shorter (i.e. three years) compared tothe usual six-year comprehensive plan.

B. Suggested Planning Structure and Organizational Activities

In all of the planning guidelines, the planning process always starts with theorganization of the planning team. In the preparation of any plan, the suggestedcomposition of the planning team, the initial organizational activities and the legaldocuments needed to start the planning process are almost the same (refer to Table 4).The common features are described below:

1.The Composition of the Planning Team:

The planning structure is usually composed of the following:

1.1The Local Chief Executiv e

Plans to be effective should get the support of the Local Chief Executive(LCE) which provides the overall direction and motivation for the preparation ofany plan in the locality, be it in the province, city or municipalities. The LCE actsas Chair of the Local Development Council.

1.2The Local Development Councils

The Provincial, City and Municipal Development Councils are tasked withoverseeing the overall planning process, providing policy direction together withth L l Chi f E ti d i ti th S i i tti th di ti f


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Table 1. Required Planning Outputs and Guides

Type of Plan/ Local GovernmentUnits

Major Output:Development Plans

Time Period Covered Planning Guide

A. Land Use or Physical Plans

1. ProvincesProvincial PhysicalFramework Plan (PPFP)

10 years Guidelines for theFormulation of theProvincial PhysicalFramework Plan(PLPEM) (HLURB;

1991)Provincial Development& Physical FrameworkPlan (PDPFP)

Six years (or two 3-yearpolitical terms of theGovernor); physicalframework may extendbeyond the 6-yearmedium term plan

Guidelines onProvincial /LocalPlanning &ExpenditureManagement(ADB/NEDA;2007)

2. Cities/ Municipalities Comprehensive LandUse Plan (CLUP)-turned

Zoning Ordinance

10 years to be reviewedevery 3 years; 30

years3

, with updatingevery 9-10 years, orideally during censusyears

CLUP Guidebook:Guide to CDP

Preparation(HLURB; 2006)

B. Comprehensive Plans

1. Provinces Provincial Development& Physical FrameworkPlan (PDPFP)

Six years (or two 3-yearpolitical terms of theGovernor)

Guidelines onProvincial /LocalPlanning &ExpenditureManagement

(ADB/NEDA;2007)

2. Cities/ Municipalities ComprehensiveDevelopment Plan (CDP)

3-6 years Enhanced Guideto CDPP ti


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Figure 1. Typical Planning Structure4

1.4Local Planning and Development Coordinators/Offices

The provincial, city and municipal offices usually act as the technicalsecretariat to any planning activity in the respective LGUs. As such, theyorganize the meetings of the Local Development Councils, prepare the technicalinputs to the meetings, undertake the necessary researches and studies which

id i t t th l i d th i l t ti f th

Local

SanggunianLocal Chief

Executive

Local Development

Council

Local Planning

Development

Office

Other LGU

Departments

Sectoral, Functional

Committees and TechnicalWorking Groups


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Based on past experiences, successful planning usually would have thefollowing ingredients: (1) the participation of the local chief executive; (2) the buy-

in of the different sectors and stakeholders because of the highly consultative andparticipatory process adopted in the preparation of the plan; and (3) the technicalsupport provided by the planning and development office.

Once the planning team has been named, the LGU needs to: (1) preparethe work plan including the timing of the activities; (2) assess the resourcesneeded to prepare the plan and the sourcing of the funds; (3) organize theplanning teams and all the technical working groups and/or sector committees;(4) preparing the legal documents (e.g. Executive Order, resolution of theSanngunian) on the conduct of the plan; (5) public dissemination of the planningactivities.

The different manuals have been quite useful in providing the tools forassisting the LGUs prepare for the plan activities. Some of these tools aresummarized in Table 2.

Table 2. Suggested Approaches and Tools in Organizing Planning Teams

Activities Outputs SuggestedApproaches/ Tools

Reference Manuals

1. Analysis of Existingplans

Decision on the formand content of plan to beprepared/updated

Status of Plan Charts CDP (pp. 25 - 26)

2. Planning Committeecomposition

Members of thePlanning Team

Suggested membersof the Team

CDP Guide (p.19);

CDS Toolkit (p.2-3);PPFP Guide (pp.8-10);CLUP Guide (p.17-18)

3. Identification ofStakeholders

Stakeholders to beconsulted named

Tools in IdentifyingStakeholders

CLUP (p. 25); CDP

( )


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C. Basic Planning Steps

All of the guides for local planning include the processes for preparing localplans. The processes for preparing land use plans and comprehensive plans are listeddown in Tables 3 and 4, respectively. At a glance, it is obvious that there are common orbasic planning steps which are followed as part of the planning process.7 Theseprocesses can be divided into three major parts: (1) the preparation of the plandocument; (2) the approval of the plan; and (3) plan implementation and monitoring.

1. Preparation of the Plan Document

1.1 Information Base Generation and Situation Analysis/Assessment ofPlanning Environment8

This stage basically answers the question, 'Where are we right now?' It isboth analytical and diagnostic, geared towards identifying issues, potentials andfuture development needs and spatial requirements of the community.

The situation analysis has to start with the generation of the data orinformation for assessing the planning environment. Some of the manualsidentify detailed data sets which the LGU may gather to start the analysis. Dataand information gathered at this stage goes into a profile or characterization ofthe planning area which could provide a diagnosis of the state of the LGU.However, the analysis would depend primarily on the availability of localstatistics. The suggested data sets in some of the manuals are listed in Appendix1.1.

There are two methods for assessing the planning environment, thetechnical and participatory methods. Technical assessment is based on factualdata derived from surveys official publications and records of the LGU


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Table 3. Suggested Approaches and Tools in Assessing the PlanningEnvironment


Reference Manuals

1. Data Generation Data or statisticalcompendium and maps

Sources of data andindicators:oCommunity-Based

Monitoring System(CBMS);oLocal Development

Indicator System (LDIS);oMinimum Basic Needs

(MBN) SurveyoCross-sectoral and

special concernsFinancial Profile

List of DataRequirements

Preparation of BaseMapsDensity Categories forDensity MapsSlope Categories

Slope Criteria for Land

Suitability Maps

CDP (pp. C-E)

CDP (pp.65-67), RPS(pp.75-80)

CDS (p.2-7)

CDP (pp. H - N)

CDS (pp.2-8 to 2-10)

CLUP (pp.41-42),PLPEM Vol 2 (p.26),CDP (pp. 45-59;A-C;)PPFP Guidelines

(pp.13; 124-133)

CLUP (p.40)

PLPEM Vol 2(p. 47)

PLPEM Vol 2(p. 55)

PLPEM Vol 2

(p. 60)

2. Analysis of thePlanning Environment

Technical Analysis ofthe Environment

2.0 General ToolsProblem Analysis CDP (p.67)


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Factors InfluencingCompetitiveness and

EfficiencyLocal ServiceStandardsCore Indicators forPopulation andDevelopment (PopDev)Planning at the LocalLevelPoverty Indicators

Measures of Poverty

Poverty Profiling andAnalysisCauses of Poverty

Policy Responses toPoverty AlleviationLocal PolicyFramework for PovertyReduction

PLPEM Vol 2 (p.73)

PLPEM Vol 2 (pp.88-90)PLPEM Vol 2 (pp.143-155)

PLPEM Vol 2 (p.148)

PLPEM Vol 2 (pp.149-154)CDS (pp.7-26 7-27)

PLPEM Vol 2 (pp.155-156)PLPEM Vol 2 (pp.156-157)PLPEM Vol 2 (pp.157-

158)

2.2 Analysis of theecological conditionsand land use balance

Ecological profile

Demand-supply

balancing activities forland use planning

2.2 Land UseDemand-SupplyBalancing Process Tools

Methods of Land UseSurvey, Pace Factor

and Frontage DistanceMigration Analysis

Urban Rural Analysis

RPS (pp.99-105),CLUP (pp.47-48, 94-97,104-105), PLPEM Vol 2(p.97-99)CLUP (pp.52-53)

PLPEM Vol 2(p. 120)

PLPEM Vol 2


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development issues sectors within the LGU Sources of DegradationDevelopment Issues

Participatory IssueIdentificationPublic Consultations

PLPEM Vol 2 (pp.

104-105)CDS (p.7-25)

CDS (p.2-11)

Suggested approaches and tools are described in detail in Chapter 2 of Volume II

(pp. 19 - 79 )

1.2 Formulation/Revisiting of Vision and Setting of Goals, Objectives and

Targets

Upon assessment of the local planning environment, the communityforms a collective long-term vision for the locality through a consensus by allstakeholders, derived from an analysis of the community's competitiveadvantages.

A vision is a desired state of the LGU and its people. It is thestakeholders shared image of the LGUs future. It describes what the LGU wantsto become or where it wants to go and answers the question, How do you seeyour LGU in the future?

Because a vision covers a fairly long time horizon, it is appropriatelyformed alongside preparations for land use plans. The vision provided by landuse plans must be adopted by the CDP and other short-term plans to contributeto its eventual realization. Moreover, the local vision should not deviate from,but rather, be a local variation of the very aspiration of the national government

so that LGUs, as political and territorial subdivisions, will be able to attain theirfullest development as self-reliant communities and become effective partners inthe attainment of national goals (Sec. 2, a. RA 7160).


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needs and priorities.11

In particular, once the sectoral objective and targets are formulated tosupport the vision, the identification of policy responses becomes clear-cut anduncomplicated. Policies can take the form of (a) regulatory measures orlegislation; (b) programs, projects, activities (PPAs); and (c) services or non-projects. Regulatory measures are the types of output that get included in thelegislative agenda of the Sanggunian, while PPAs and services serve as inputs tothe local development investment program. Each of these will be described inthe succeeding stages.12

This step in CLUP preparation involves characterizing alternative spatialstrategies, and selecting and detailing the preferred strategy that will serve asbasis in formulating the LGU's policy framework for socioeconomic developmentand land use planning.

Table 4. Suggested Approaches and Tools in Setting Goals, Targets andObjectives


Reference Manuals

1. Goal Setting Vision or Goals for theLGU set

1.1 GeneralDescription and

comparison of goals,objectives,strategies, programsand projects

Characteristics of agood vision withsample visionstatement and

PLPEM Vol 2 (pp.106-107)

CDS (p.3-2), CDP(pp.40; 42-45), RPS(pp.90-98)


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Approaches and tools are described in detail in Chapter 3 of Volume II ( pp. 80-

88)

1.4 Determining Programs, Projects and Activities (PPAs)

The LGU identifies specific programs, projects and activities that need tobe implemented under each strategy identified in the previous phase. This list willserve as inputs to the investment programming process that will produce theLocal Development Investment Plan (LDIP) for cities/municipalities and theProvincial Development Investment Program (PDIP) for provinces, which are thebases for determining the level of public investments needed to be appropriatedfor in the LGUs annual budget.13

Programs are sets of projects that translate strategies to specific actionplans. Some strategies may involve only one project in which case a programmay be unnecessary. Each strategy may require more than one program.Programs may involve several sectors although the sectoral focus should beclear. Sometimes synonymous with project, it may cover a period of three (3) to

six (6) years.14

Table 5. Suggested Approaches and Tools in the Formulation of Strategies andPolicies


Reference Manuals

1. Identification of

strategies

Strategies for sectors

identified

1.1 Technical

ApproachesFishbone analysis

Flowchart

F Fi ld A l i

CDP (p.59); CDS (p.7-16)

CDS (p.7-17)CDS ( 7 17 7 18)


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Structure MapsMatrix of ProposedLand and Water Uses

113), CLUP (pp.98-100)

CLUP (pp.77-78)CLUP (p.106)

2. Evaluation, Selectionand Ranking ofStrategies

Prioritized set of strategies

2.1 Evaluation andSelection of PreferredStrategy

Cost-Benefit Analysis(CBA) and Social CBA

Planning BalanceSheet

Goal-AchievementMatrix

Checklist of Criteria

2.2 Ranking ofStrategies

Simple ranking

Pairwise ranking

RPS (pp.113-114),CLUP (pp.83-86)

RPS (pp.114-115)

RPS (pp.115-116)

PPFP (pp.83-84s)

CDS (pp.4-3,4-4)CDS (p.7-24)

3. Identification ofPrograms and Projectsfor each strategy

PPAs, services andlegislations for eachstrategy identified

Suggested PresentationFormats

Sample Table linkingprograms and projects,services and legislationsto strategies

Summary Matrix ofStrategies and PPAs

Executive SummaryMatrix Template

CDP (p.84); RPS

(p.154)

PLPEM Vol. 2 (p.113)

CDS (p.4-4)

Approaches and tools are described in detail in Chapter 4 of Volume II (pp.88-107)


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Table 6. Suggested Approaches and Tools in the Identification of Programs,Projects and Activities


Reference Manuals

1. Identification of PPAs PPAs corresponding toeach strategiesidentified

Action planningflowcharts

Activity NetworkDiagram

Affinity DiagramProject identificationsourcesGantt ChartsTypes of investments

CDS (pp.5-1, 5-2)

CDS (p.7-11)

CDS (p.7-11)JMC (pp.71-72)

CDS (p.7-19)RPS (pp.32-33)

2. Conduct ofConsultations in theIdentification of Projects

City ConsultationMethodMini-Consultation

CDS (p.7-12)

CDS (p.6-6)

Approaches and tools are described in detail in Chapter 5 of Volume II (pp. 106-108)

1.5. Drawing up of Legislative Requirements and Preparing the Legislative AgendaRPS Chapter 6, p.151;CDP Chapter III, Part 4 , pp.121-128

The legislative requirements of the development plan are the priority legislations thatneed to be enacted by the Sanggunian to support development priorities of the LGU in

the medium- and long-term. These may include new legislation as well as amendmentsand updates to existing legislation that have been identified as part of the strategicregulatory measures to address issues and concerns determined in the previousphase.15


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legislative requirements

Executive-LegislativeAgenda

Sample matrix formatof the ELA

RPS (p.151); RevisedRevenue MoblizationCoursebook, Module VII(p.30)

Approaches and tools are described in detail in Chapter 6 of Volume II (pp. 110-111)

2. Consolidation, Presentation and Approval of Plans

This stage involves consolidating all the outputs generated from the previousstages, updating the LCE, LDC and other key stakeholders with respect to proposedstrategies and PPAs, updating Plan drafts, and conducting public consultations/hearingson the draft development and land use plans. Inputs from public consultations shall beconsidered for incorporation into the final draft of these plans. The format of the plan willbe discussed later.

The next step involves submission of the draft plans to the local Sanggunian forapproval. In the case of CLUPs, the Land Use Plan and draft Zoning Ordinance withappropriate revisions according to the public hearings conducted, are submitted to theSanggunian. The draft CLUP is further subjected to mandatory review and subsequentapproval by authorized bodies. The appropriate review bodies for corresponding CLUPsare the following: (a) Sangguniang Panlalawigan and the Provincial Land UseCommittee (PLUC) for component cities and municipalities; (b) Housing and Land UseRegulatory Board (HLURB) and PLUC for highly-urbanized cities and independentcomponent cities; and (c) the Metro Manila Development Authority (MMDA) and HLURB

for Metro Manila Cities and Municipalities.

An issue that has been raised and which has been clarified by the concernedoversight agencies is whether the PDPFP, which fuses together the comprehensive de-


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InterviewsFlow Chart of Public

Hearings for CLUP andZO

CLUP (p.130)

Presentation of the Planto Sanggunian

Approved CDP, CDSand PDPFP and a duly-enacted ZoningOrdinance withprescribed maps,Sanggunian resolutions

CLUP Step 8 onDrafting theZoning Ordinance

CLUP (pp.114-123)

The tools are described in detail in Chapter 7 of Volume II (pp. 1121-113)

3. Plan Implementation and Monitoring

3.1 Plan Implementation

This stage requires the establishment of detailed operational plans andinstitutional mechanisms for the implementation of the mandated plans. For thispurpose, the Local Government Code (LGC) allows great flexibility for LGUs to

design and implement its own organizational structure and staffing pattern takinginto consideration the vision, mission, goals and objectives contained in their landuse and development plans. LGU creativity in governance or in making use ofLGU authority levers as employed by successful cities and municipalities is keyto successful plan implementation. An effective way to harness resources at thisstage is to establish partnerships and cooperation arrangements with LGUstakeholders.

3.2 Plan Monitoring and Evaluation (M & E)

Monitoring and evaluation is an essential management tool instituted tomeasure progress as plan implementation proceeds - providing a flow ofi f ti th t ll i t dj t t t b d t th [CDS


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Suggested tools are described in detail in Chapter 8 of Volume II (pp.114-118)

As part of a continuous and cyclical planning process, monitoring and evaluation(M&E) serves as a link between two planning cycles.16 Its principal aim is to buildthe planning database for the successor plans as it produces new informationfrom the assessment of impacts of plans, programs and projects asimplemented, the effects of regulatory measures as enforced, and the outcomesof developments in the area that had not come under the control or influence ofthe local planning system. This means M&E also determines changes attributednot just to planned, but to unplanned developments as well. These changes are

manifested in the following: (a) social and economic well-being of inhabitants; (b)quantity and quality of the physical environment; and (c) institutional capabilitiesfor local governance. 17 In this manner, plan M&E functions as a measure of LGUperformance providing indications on how future efforts might be improved

Specifically, monitoring isa continuous process of data collection and analysisto check whether a project is running according to plan and to make adjustmentsif required. It is an evaluative study directed to the short term. On the other hand,

evaluation isa systematic process of collecting and analyzing information aboutthe activities and results of a project in order to determine the projects relevanceand/or to make decisions to improve its efficiency and effectiveness.18 For thispurpose, monitoring can provide quantitative and qualitative data that can serveas inputs to evaluation.19

The frequency of Plan M&E should be synchronized with various planning cycles:annually, for purposes of the AIP and the budget cycle; once every three yearsfor the revision of the short-term CDP and ELA; and longer cycles for the six-year

medium-term CDP and long term CDP and CLUP revisions. Ideally, everycensus year, which happens after a lapse of nine to ten years, should be markedout for conducting comprehensive data collection to update the ecologicalprofiles statistical compendiums and thematic maps for longer-term plans 20


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Core indicators forgender-responsivepopulation anddevelopment (POPDEV)planning at the locallevelM & E strategytemplateAnnual or End-of-Term

Accomplishment ReporttemplateCommunity-based

monitoring system

CLUP (p.188)

CDP (p.137, 140)

CDP (pp.138-139)

CDP (pp.136-137)

2. Monitoring of ProjectImplementation

Status report of projectimplementation

ProjectImplementationMonitoringSystem/Scheme

CLUP (pp.183-184)

3. Monitoring of landuse plans

Updated ecologicalprofile

Quality of LifeAssessment

Land Use Changes

CLUP (pp.31-35), CDP(pp. 69-70), RPS (p.145)CLUP (p.183)

4. Conduct ofconsultations formonitoring andevaluation of planimplementation

Schedule of consultations andpeople feedback onplan implementation

Schedule ofconducting plan M&EsParticipatory decision-making processRegular feedbackmechanisms (e.g.suggestion box)

RPS (pp. 200-202)

CDS (pp.5-12 to 5-14)

CDP (pp.134-135);

Suggested tools are described in detail in Chapter 9 of Volume II (pp. 118-132).

D.Plan Formats
http://links/RPS%20145.dochttp://links/RPS%20145.dochttp://links/Vol2%20117-130.dochttp://links/RPS%20145.dochttp://links/RPS%20145.dochttp://links/Vol2%20117-130.doc


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2.Background information on the LGU22

This section provides basic information on the LGU which may consist of (1) briefhistory; (2) location; (3) land area and political subdivisions; (4) demographic profile; (5)physical resources; (6) economy of the LGU; (7) infrastructure; (8) environment; (9) landuse and physical framework.

3.Vision/statement Statement

This section articulates the aspiration of the LGU as formulated by the localgovernment in consultation with its constituents. The presentation of the vision issometimes complemented with the general strategies to attain the vision, which isseparate from the more detailed sector strategies.

4.Development Issues/problems23

This section is the outcome of the analysis of the present planning environmentwhich compares the present situation, the where we are and the vision or where wewant to go. Some manuals reserve a separate chapter on a discussion of these issues,

together with the emerging general goals and objectives of the LGUs. The discussionusually covers cross-sector or special issues/problems.

5.Sector chapters

All of the plans have sector chapters which usually contains the following: (a)goals, (b) objectives; (c) targets; (d) strategies; (e) plans, programs and activities; and (f)proposed legislative measures. Some manuals recommend that project profiles beincluded as an annex to the development plan.

The manuals also recommend common broad sector classifications as follows:(a) economic; (b) social; (c) infrastructure; (d) environment and natural resources; (e)institutional or development administration It is the sub sectors where coverage of plans


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E. Planning Calendar per JMC

In general, comprehensive development plans are medium-term plans, whichmay cover three to six years, though in general CDPs are known to cover six years tocoincide with the term of the President. However, there are comprehensive plans, whichhave longer time periods (e.g. those prepared using the CDS for cities). The LGUs mayopt to adopt their own time frame, though for consistency, it is best that the time framesof development plans (except for the physical plans) at the national, regional and local

levels should be the same to facilitate vertical integration. There is an opportunity forsynchronizing the coverage of plans in 2010, if the government will require the updatingand/or new plans to start in 2010.

In relation to the process of plan preparation, the JMC was precisely formulatedand signed to synchronize the planning budgeting calendars. Specifically for thepreparation of comprehensive plans, the activities should conform to the followingschedule:

Table 11. Proposed Schedule of Planning Activities per JMC

Activity Period Covered Outputs

A. Normal Year

1. Setting guidelines for datagathering by the ProvincialPlanning DevelopmentCommittee (PPDC)

1st week of January Guidelines for data gathering

2. Updating of planning andbudgeting database (socio-

i h i l

January March Updated planning and budgetingdatabase


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2. Formulation of developmentvision, goals, strategies,objectives/targets andidentification of PPAs

Whole month of July Vision, goals, strategies,objectives/targets andidentification of PPAs

3. Harmonization andcomplementation of vision, goalsand strategic directions betweenand among provinces andcomponent cities andmunicipalities

July Harmonized vision, goals andstrategic directions

4. Approval of the PPFP andCDP

July Approved PPFP and CDP

II. INVESTMENT PROGRAMMING

Investment programming in the context of the LGUs planning and development function

involves generating the programs and projects derived from the detailed elaboration of the localland use and development plans. This is expected to modify, guide, direct, control or otherwiseelicit the desired private sector response in order to accelerate local economic development,raise the level of socio-cultural well-being, improve the standard of public services, utilities andinfrastructures, and, on the whole, attain the desired urban form as reflected in the LGU's landuse plan and the general welfare goals in its local development plan.24

A.Required Documents for Local Investment Programming

The main outputs of investment programming are the Local DevelopmentInvestment Program (LDIP) for cities and municipalities and the Provincial DevelopmentInvestment Program (PDIP) for provinces which are the principal instruments for


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1.1.PDIP Committee

This committee will be responsible in laying out policies, directions, andthe action plan that will guide the preparation of the PDIP. Working with a technic-al secretariat, the PDIP Committee will be responsible for the actual preparationof the PDIP. This committee may be composed of the following members:

a.Executive Committee of the Provincial Development Council (PDC);

b.Provincial Finance Committee, which can be expanded by constituting a PDIP Finance Sub-committee. The PDIP Finance Subcommittee should be composed of the PFC plus the Chair-

man of the Committee on Appropriations of the Sangguniang Panlalawigan, the Provincial As-sessor, the Provincial Accountant, and the representative from the banking sector. As part of thePDIP Committee, the group will be responsible for coming up with multi-year revenue and ex-penditure forecasts, assessing the development investment financing capacity of the province,and developing appropriate financing strategies for consideration by the PDIP Committee; andc.Other local officials and other members of the PDC who can provide substantive inputs toPDIP formulation

1.2. PDIP Technical Secretariat

The secretariat shall provide technical and administrative support to theCommittee. It is recommended that the Provincial Planning and DevelopmentOffice staff take on this role.

1.1. PDIP Coordinator

Responsible for coordinating and monitoring the PDIP process on behalfof the committee.


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Provinces/Cities/Municipalities

Annual InvestmentProgram

One year (annualslice of theLDIP/PDIP

Guidelines onProvincial /LocalPlanning &ExpenditureManagement(ADB/NEDA; 2007)

Enhanced Guide toCDP Preparation(DILG; 2008)

The CityDevelopmentStrategy Toolkit

(League of Cities)

C. Basic Steps in Investment Programming

2.Pre- LDIP Activities

1.1 Establish Investment Programming Policies

Investment policies that will guide the whole PDIP process will beestablished by the local investment programming committee. Key issues toresolve include the methods of financing and criteria for prioritization. Thesepolicies must be developed within the overall planning, financial, institutional andlegal framework governing the operations of LGUs.25

. 1. 2 Develop and Define the Prioritization Approach

The LGU's investment programming committee sets out the evaluationprocess and prioritization criteria which, in general, should be consistent with thegoals and objectives in the local development plan and the investmentprogramming policies established in Step 1 1 above 26


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2. Establishinginvestmentprogramming policies

Investmentprogramming policies

1.Types of Investments2.Types of FiscalRegulatory Devices

RPS (pp.32-33)PLPEM Vol3 or CDP

2. Developing theprioritization approach

Tools to be used inprioritization of projects

1.Checklist of PossibleCriteria2.Criteria forDetermining Level ofUrgency3.Must or Want Criteria4.Guide Questions forScrenning PPAs &

MFOs

CDS (p.5-5)

PS (p.176); CDP(p.95)

CDS (pp.5-6, 5-7)PLPEM Vol 4 (p.49)

Suggested approaches and tools are described in detail in Chapter 1 of Volume III.

2. Preparation of the LDIP

2.1 Identification of PPAs (from local development plans)27

This stage consolidates and conducts an initial screening of the list ofprograms and projects found in the local development plans. This requiressoliciting and compiling project ideas or proposals from plans, sectoralcommittees and other sources, consolidating these by sector, initially screeningfor repetitive or redundant proposals and removing these from the list, as well asfor conflict, compatibility or complementarity of projects, prioritizing programs andprojects according to level of urgency and preparing project briefs.28 Projectstaken from other sources should at least be consistent with plan objectives. 29

2.2 Produce a Ranked List of Programs and Projects30

In this step, total investment requirements of plan-proposed PPAs are


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Investment Schedule32

The annual investment requirement estimated in Stage 2.4 is matchedwith the initial annual investment capacity (funding capability) estimated in Stage2.5. The matching process is an iterative or repetitive process. Each iterationinvolves adjustments in the investment requirement side or in the fundingcapability side or in both. If the initial funding capability estimated in Step 2.5fails to match the total investment requirements generated in Step 4, theLDIP/PDIP Committee will have to (a) re-examine the project list generated inStep 4 to consider scaling down, phasing, or deferring projects, with the objectiveof reducing project cost for the appropriate year(s) in which the deficit(s) occur;

and/or (b) relax the investment budget constraint by raising additional localrevenues, borrowing capital funds and/or re-allocating funds from the operatingbudget to the investment budget.33 A second round of matching then takes place,and the iterative process goes on until total annual funding requirements matchtotal annual funding capacity. On reaching such a balance, the LDIP/PDIPfinancing plan and investment schedule is finalized and inputted to the draftLDIP/PDIP.34

In financial planning for the LDIP/PDIP, the local invesstment programmingcommittee will investigate the financing options and the fiscal feasibility offunding the various project requests considering the following: (a) alternativefunding sources, (b) revenue mobilization, (c) the process of formulating thefinancing plan, (d) resource mobilization tools, and (e) credit financing.

Table 14. Suggested Approaches and Tools in the Initial Identificationand Screening of Projects

Activities Outputs Suggested Approaches/Tools

Reference Manuals

1 Identification of List of projects to be 1 Capital Inventory and PLPEM Vol 3 (p 89-


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2. Screening of Projects First level evaluation ofprojects found in thedevelopment plan andadditional or newprojects

1. Assessment Matrix ofProject Sustainability(AMPS).2. Conflict-Compatibility-Complementarity

Assessment3. Checklist of ProjectJustification Information4. Initial Project Screening

CLUP (pp.178-179)

RPS (pp.175, 188);CDP (pp.93-94)

PLPEM Vol 3(pp.38, 42)RPS (pp.174-175);CDP (p.93)

3. Initial prioritization ofprojects

Prioritized list of projectsfrom step 2 above

presented in appropriateforms (e.g. project briefs)

Formalization Process

Documentation of ProjectProposals (LDIP/PDIPProject Proposal Form,Equipment Request Form,Project Brief, Random List ofprojects

PLPEM Vol 3(pp.37-38)

PLPEM Vol 3(pp.37-41), RPS(pp.143, 174, 187);CDP (pp. 95-96);CLUP (p.180)

4. Review of ProjectProposals

Preliminary list ofprojects screened on thebasis of technical and

socio-political criteria

Checklist of ProjectJustification Information

Review Checklist for

Project Proposals

PLPEM Vol 3,pp.38, 42)PLPEM Vol 3.

p. 42

Suggested approaches and tools are described in detail in Chapter 2 of VolumeIII.

Table 15. Suggested Approaches and Tools in Ranking Programs, Projects and Activities

Activities Outputs Suggested

Approaches/ Tools

Reference Manuals

Ranking of Projects Ranked PPAs with costestimates

Analytic HierarchyProcess

Decision Analysis.


CDS (pp 5-5 to 5-7)
http://links/CDP%2095-96.dochttp://links/CLUP%20(p.180).dochttp://links/CDP%2095-96.dochttp://links/CLUP%20(p.180).doc


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deliberates and then legally adopts the LDIP/PDIP. The current-year slice of theLDIP/PDIP or the Annual Investment Program (AIP) is then submitted for consideration

in the annual Executive Budget/Provincial Budget. The local investment programmingcommittee shall endorse the AIP to the local budget officer for the budget preparationand for determining the annual budgetary allocations for PPAs vis--vis allocations forother purposes.

The adoption of the LDIP/PDIP by the local Sanggunian is not a bindingcommitment to fund programs beyond the first year, hence, the succeeding years sliceswill be subjected to review and updating during the annual pre-budget period.

Table 16. Suggested Approaches and Tools in Conducting the FinancialAnalysis of Projects


Reference Manuals

1. Undertake FinancialAnalysis

Revenue andexpenditure projections,

Financial analyses ofprojects,

Financial andeconomic studies ofprojects (optional)

Project proposals

1. Financial CapacityAnalysis2. Financial Planning

Model3. Revenue MobilizationConsiderations3.1. BenchmarkingIndicators3.2 RevenueMobilization Tools3.3 Conditions forSubsidy Provision

4. Scoring Method forDetermining Subsidy

CDS and RPS35

PLPEM Vol 3 (pp.92-

94)

PLPEM Vol 3 (p.96)


PLPEM Vol 3 (p.98)

PLPEM Vol 3 (p.99)


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Instrument

2. Preparation of theLDIP documents

- Final list of PPAs-LDIP/PDIP FinancingPlan-Investment Schedule

1. Summary Tables (w/formats)

A. Investment ProgramProject SummaryB. Investment BudgetSummaryC. Revenue SummaryD. AIP Summary.2. PED Guidelines


PLPEM Vol 5 onProject Evaluation and

Development (PED)

Suggested approaches and tools are described in detail in Chapter 5 of VolumeIII.

4. LDIP Implementation

4.1 Identification of Areas for Complementation of PPAs and Updating the

Investment Plan

After legally adopting the PDIP and in accordance with investmentprogramming guidelines, areas for complementation of PPAs between theprovince and its component cities and municipalities should be identified to comeup with PPAs that can be jointly implemented by the province and its componentLGUs.

The LDIP/PDIP is updated annually to reflect changing field and financing

conditions, and to include new project requests arising fromchanges/adjustments in the local development plans. Each year the LGU shouldreview, revise, and extend the LDIP/PDIP for another year so that it alwaysencompasses the same three year period As part of its project M&E function


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D. Suggested Format of Local Investment Plans

The information requirements for programs, projects and activities to bepresented in the AIP shall be placed in the prescribed AIP Summary Form withthe following categories37: AIP Reference Code, Program/Project/ActivityDescription, Implementing Agency/Office, Schedule of Implementation, ExpectedOutput, Source of Fund and Estimated Cost.

E. Calendar of Activities on Investment Programming

Table 18: Proposed Schedule of Activities Related to InvestmentProgramming per JMC

Activity Period Covered Outputs

A. Election Year: LDIPPreparation

1. Identification of areas forcomplementation of PPAsbetween and among provincesand their component cities andmunicipalities

June to July 1-31 Joint programs and projects

2. Prioritization of PPAs June to July 1-31 Prioritized PPAs

3. Matching of PPAs withavailable financing resourcesand determination of additional

revenue sources to finance thePPAs

LDIP, revenue generationmeasures

4 Approval of the LDIP Approved LDIP


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mobilize resources would provide policy-makers with information on level of the LGUs resourceenvelope and the extent of intervention it needs to undertake to expand the resource pie and

thereby fund its prioritized PPAs.

A. Required Outputs and Documents

The Local Finance Committee (LFC) is charged under the 1991 LGC with thesetting of the level of the annual expenditures and the ceilings of spending foreconomic, social, and general services based on the approved local development plans(Section. 316, c). As such, they should undertake the required financial plandevelopment in close coordination with the Local Development Council (LDC) for

consideration and approval of the Sanggunian. But financial planning starts withresource mobilization, which is a basic information for budgeting. Hence, the overisgtagencies have taken the initiative to update/prepare manuals to assist the LGUs in beingto tap its authority under the LGC to raise revenues.

Table 19 summarizes the basic outputs which the LGUs are required to prepareas part of its financial planning and management responsibilities.

Table 19. Major Outputs Related to Revenue Administration and Resource Mobilization

Major Outputs for all LGULevels

Time Period Covered Guide

Resource MobilizationStrategies

Multi-year Revised Revenue MobilizationCoursebook (RRMC) Draft Manual,Volume 1 (Modules I-IV) and Volume2 (Modules V-XI)

Revenue Forecast At least one fiscal year; can

be multi-year

RRMC Draft Manual, Volume 1

(Modules I-IV) and Volume 2(Modules V-XI), PLPEM Volume 4:Tools and Techniques on Budgetingand Expenditure Management


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civil society. 38

C. Basic Processes in the Preparation of the Required Outputs andDocuments

1. Resource Mobilization

Resource mobilization is a process whereby LGUs exercise their powers togenerate resources for their programs, projects and activities that aim to create social,

political and economic benefits for their constituents.39 It is a means of exhaustingpotential sources of assistance to finance a project or activity. Revenues that could bemobilized can come from internal or external sources. Effective internal resourcemobilization is usually a requisite of external resource mobilization as funding agenciesaward support based on good track record of the proponent. This realization isimportant as the implementation of PPAs identified in the LDIP/PDIP requires morefunds than what are normally available from regular revenue sources, suggesting theadoption of bold non-conventional approaches to fiscal management. This include,

among others, raising more revenues by improving collection efficiency in certain itemswhere the LGU tends to under-perform, keeping strict and judicious watch onexpenditures, tapping hitherto unutilized revenue raising powers such as imposingspecial levies on real property, and exploring the feasibility of applying the variousmodes of credit financing as enumerated in the LGC.

Table 20. Suggested Approaches and Tools in Financial Planning and ResourceMobilization


Reference Manuals


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1. Determine generalpolicies/principles re:resource mobilization

Policies/principles forlocal resourcemobilization

Dual Nature of LGUs

Resource MobilizationStrategiesWho Benefits andWho Pays Principle(with Figure)Service DeliveryOptions and Criteria indetermining these

optionsFive Steps forEffective LGU RevenueGeneration andResource MobilizationStrategy

Strategic Plan toManage the Fiscal Gap

Distinct Classes ofPotential RevenueSourcesLGU ResourceStructureKey Features of theLocal Tax StructureCriteria of a GoodRevenue StructureFundamental

Principles in LocalTaxationCentral Grants

Revised ResourceMobilizationCoursebook (RRMC)Module I (p.7, 22-23)RRMC Module I (pp.8-9)RRMC Module X(pp.3-4)

RRMC Module X (pp.4-5)RRMC Module XI

(pp.1-6)

RRMC Module XI(pp.6-7)JMC (p.83)40

RRMC Module I (p.28)

RRMC Module II(pp.17-19)RRMC Module II(pp.5-7)RRMC Module II(pp.8-9)RRMC Module I

(pp.13-20)

RRMC Module II(pp.2-3)


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10. Presumptive IncomeLevel Technique (withBox and Table)11. Civil Remedies forCollection of Revenues

RRMC Mod IV (pp.50-61)

RRMC Mod IV (pp.63-67)

Non-tax Revenues Revenue enhancementmeasures for fees andcharges, rates forcharges

1.Coverage of LGUImpositions on Feesand Charges2.Regulatory Fees

Other Regulatory FeesRestructuring Mayor'sPermit FeesService and UserChargesSetting Rates forCharges3.Charges/Receiptsfrom Local Economic

Enterprises (LEEs)RevenueEnhancement Measuresfor Fees and Chargesfrom LEEs

RRMC Mod V (p.2)

RRMC Mod V (pp.1-5)

RRMC Mod V (p.5)RRMC Mod V (pp.13-15)RRMC Mod V (pp.10-12)RRMC Mod V (pp.11-12)RRMC Mod VI (pp.1-3)

RRMC Mod VI (pp. 9-12, 14-15)

3. Other FinancingOptions

Credit Financing

Credit finance program;financing options andpayment schemes

1.Financing Schemes

Factors toConsider inWeighing Short-Term Over Term-Financing

Payment Schemes

RRMC Mod VIII (pp.4-5)RRMC Mod VIII (pp.5-6)

RRMC Mod VIII (p 6)


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for LGU Debt2.Authorization Processfor New Borrowings,

General Principles3.The Cost of Debt,General Principles

Financing Rate

4.The Risks of Debt,General Principles5.Evaluating Debt

Proposals, GeneralPrinciples

RRMC Mod IX (pp.5-7)

RRMC Mod IX (pp.7-8)

RRMC Mod IX (pp.9-11)RRMC Mod IX (p.11)

RRMC Mod IX (p.13)

Suggested approaches and tools are described in Chapter 1 of Volume IV.

2. Preparation of the Statement of Receipt and Expenditure (SRE)

Aside from resource mobilization and revenue generation efforts, the LGUs

should have realistic and real-time revenue/income data to ensure delivery of qualityservice. This can be achieved through the use of the Statement of Receipt andExpenditures (SRE) System that can generate real-time accurate data and analysis thatLGUs can use in planning, budgeting and decision-making.41

The SRE presents the income and expenditures for the General Fund, the SpecialEducation Fund and the sum of both funds. The data presented in the SRE are sub-totals of the major caption of various account classifications from its main source

documents, namely: (a) Statement of Receipt Sources; and the (b) Statement ofExpenditures. The SRE is divided into three major segments: (a) current operatingsegment; (b) non-operating receipts and expenditures and (c) fund balance segments.


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Financial analysis is the foundation of all interventions to improve local government

financial management. The use of quantitative data in problem solving and in decisionmaking provides a clear view of current conditions and/or problems and suggestsalternatives in addressing them. Applications of financial analysis in local financialmanagement include identifying underused revenue sources, projecting income andexpenditure trends, assessing debt carrying capacity, evaluating the impact of ratechanges in local fees and licenses; and improving cost efficiency of local services.

3.1 Revenue Forecasting

Target-setting and projections are critical tools in LGU fiscal management,especially in the field of revenue generation. Through use of various target-settingtools, the LGUs can perform forecasting exercises and evaluate their ownrevenue targets. Adjustments can be made by the Local Treasurer based on hisexpert opinion considering the LGU's performance record, and appreciation ofextraordinary circumstances. These forecasts at the LGU level will again be

subjected to further 'negotiations' with the Regional Offices of the DOF-BLGF.The regional 'negotiated' annual revenue forecast will then be reconciled with therevenue targets by the BLGF Central Office using the BLGF Model. This processaims to reconcile the central office's top-to-bottom, with the local Treasurer'sbottom-up, forecasting perspective.42

3.2 Estimating the Fiscal Gap

Local Governments constantly have to face the dilemma of never having enough

to finance the financial requirements for delivering basic services and facilities andpursuing their developmental goals. One step towards the solution of thisdilemma is to be able to estimate the fiscal gap as an aid in identifying theappropriate financing option available to the LGUs


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1.6 Trend analysis

2. Suggested Forecasting

ToolsProjecting Revenue andExpenditure Levels

Formulating Multi-YearRevenue Estimates

Guide questions forevaluating targets

RRMC Mod VII (pp.4,12)

CDP (pp.107-108);RPS (pp.190-192)

PLPEM Vol 4 (38-46)

RBOM (pp.104-105)

2. Conduct financialanalysis and estimatethe Fiscal Gap

Financial analysis andfiscal gap estimates

1. Financial CapacityAnalysis1.2 Historical Analyses ofRevenues as ProjectionBase1.2 Historical Analyses ofExpenditures and Debt asProjection Bases1.3 Establishing

Structural RelationshipsBetween Financial andDevelopment Variables1.4 Alternative GrowthScenarios1.5 New InvestmentFinancial Capacity2. PerformanceIndicators2.1 Functions of

Performance Indicators2.2 BLGF FiscalPerformance Indicators

RPS (pp.178-179);CDP (p. 103)CDP (pp.103-106);RPS (pp.179-180; 192)

CDP (p.106)

CDP (pp.108-109)

CDP (pp.109-110);RPS (p.192)RRMC Mod VII (p.21)

SRE (pp.17-24);

RRMC Mod VII (pp.21-27)

RRMC Mod I (pp.15-


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January of every fiscal year43

IV. BUDGETING AND EXPENDITURE MANAGEMENT

The local budget is the LGU's principal instrument for implementing the programs,projects, and activities (PPAs) identified in the local development plans and prioritized in thelocal investment programs. This reflects the plan-investment program-budget linkage necessaryfor the local budget to become an effective instrument for implementing LGU plans andpolicies.44

The budget process in LGUs consists of five phases that form part of a continuingprocess or cycle: budget preparation, authorization, review, execution and accountability. Thisprocess is reinforced by the adoption of the principles of Public Expenditure Management(PEM) Framework of fiscal discipline, allocative efficiency and operational efficiency. The PEMfosters the plan-budget connection in three ways: installing a multi-year perspective inbudgeting, adopting a top-down approach, and promoting a greater performance-orientation inthe budget process.45

A. Required Outputs and Guides

Major Outputs for all LGU Levels Time Period Covered Guide

Annual or Supplemental Budget, BudgetMessage, Local Expenditure Program(LEP), Budget of Expenditures &Sources of Financing (BESF), Local

Budget Matrix (LBM), Local BudgetPreparation Forms, Local Budget

Authorization Forms, Local BudgetReview Forms Local Budget Execution

One fiscal year Revised Budget OperationsManual, PLPEM Volume 4


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Table 23. Key Players in the Budget Process

BudgetPreparation

BudgetAuthorization

Budget Review BudgetExecution

BudgetAccountability

Local ChiefExecutive




Sanggunian SangguniangPanlalawigan

Vice Governor/Vice Mayor

Secretary to theSanggunian

Secretary to theSanggunian

Local Finance

Committee:

Committee on

Appropriations/Finance

Local Finance

Committee

(a) LocalTreasurer

Local Treasurer Local Treasurer

(b) Local BudgetOfficer

Local BudgetOfficer

Local BudgetOfficer

(c) LocalAccountant

Local Accountant Local Accountant

(d) Local

Planning andDevelopmentCoordinator

Local Finance

Committee

Provincial Finance

Committee

Local Planning

and DevelopmentCoordinator

Local Planning and

DevelopmentCoordinator

Heads ofDepartment orOffices

Heads ofDepartment orOffices

Department ofBudget andManagementRegional Offices

Department Head Heads ofDepartment orOffices

2. Organizational Activities

The Revised Budget Operations Manual introduces the user to thegeneral guidelines and concepts of good governance as advocated by the United


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before October 16 of each year. It begins with a clear definition of the amount ofresources that are likely to be available (i.e, the resource envelope) and focuses on theallocation of these resources in a manner that is consistent with the objectives andstrategic priorities of the LGU. At the same time, the budget formulation processprovides the framework against which the implementation of PPAs delineated in thebudget will be measured.47

Prior to the issuance of the budget call, the Local Finance Committee (LFC) should havecome up with estimates of LGU income. With these income estimates and with theprioritized list of projects found in the LDIP/PDIP/AIP, the LFC then finalizes thespending ceilings of the different sectors/offices.48

Table 24. Suggested Approaches and Tools in Budget Preparation


Reference Manuals

1. Issue the budget call Budget Call Budget Forum RBOM (p.55)

2. Prepare and submitbudget proposals. Budget proposalsshowing target outputsand estimated costs forthe budget year, ProjectProcurementManagement Plan

Analyzing LGUIncome Trend andCompositionAnalyzing LGUExpenditure Trend andCompositionFormulating Multi-YearRevenue EstimatesSetting ExpenditureCeilingsApproaches forCosting Regular

ActivitiesDefining Performance



PLPEM Vol 4 (pp.38-46)PLPEM Vol 4 (pp.56-60)RBOM (pp.105-109)

PLPEM Vol 4 (pp 47


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Budget received by the LocalSanggunian

Suggested approaches and tools are described in detail in Chapter 1 of VolumeV (pp. 5-39)

1. 1 Issue the Budget Call

The Local Chief Executive (LCE) issues the local Budget Call, usually anytime betweenJune 15-30 to mark the beginning of the budget preparation period. The Budget Call

contains the general objectives, specific sectoral objectives, policy decisions, strategiesand prioritized PPAs by sector/office as reflected in the AIP. It also provides specificguidelines on the preparation of individual budget proposals that pertain to theexpenditure ceiling by office/sector, allocation scheme by major final output (MFO) andPPA, budget calendar and budget preparation forms, and other administrativeguidelines.

1.2 Prepare and submit budget proposals to the LBO

The heads of departments and offices in the LGU submit to the LBO their proposals forinclusion in the executive budget. In making their proposals, they will need to considertwo factors: (a) the specific objectives or target outputs for the budget year which shouldconsider the MFOs and performance indicators for all PPAs of a particulardepartment/office; and (b) estimates of current operating and capital outlay costs whichshould be within budgetary ceilings.

Guided by the expected results and cost estimates in the approved AIP, a ProjectProcurement Management Plan (PPMP) is also prepared simultaneously with the budgetproposal. The PPMP provides details on the mode and schedule of procurement,technical description and specifications of the goods equipment and civil works to be


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The budget message is addressed to the Local Sanggunian and the general public ofthe LGU. It is a brief yet comprehensive presentation of the proposed executive budget,including the basis and justification for the policy decisions.

The LEP consists of (1) income estimates for immediate past year, current year andbudget year estimates; (2) the expenditure program for a three-year period broken downby program/activity/project, and by other classifications; (3) Special Purpose

Appropriations, at the option of the LCE, provided in compliance with the LGC; (4)General Provisions; and (5) a Summary of the Fiscal Year New Appropriations.

The BESF is a detailed and graphical presentation of the expenditure program of an

LGU covering actual obligations for the past year, actual and estimated expenditures forthe current year, and the proposed budget program for the ensuing year. The sources offinancing the expenditure program for the budget year are also disclosed to show howthe past, current, and proposed budget are financed by the LGU.

1.5 Submit Executive Budget to the Sanggunian

On or before October 16 of the current year, the LCE must submit the executivebudget to the Local Sanggunian (as failure would subject him to sanctions).

To expedite the approval of the budget, the LCE may certify that the proposedmeasure is urgent. In response, the Sanggunian shall consider the budget as a prioritymeasure.

Three budget documents are prepared for the annual budget. However, when the LCEsubmits a supplemental budget to the Sanggunian for legislative approval, the LEP andBESF may not be required; instead the funding source must be identified additional

realized income, or new revenue measure, or, in times of calamity, realignment ofappropriation.


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Budget AuthorizationForm No.1A and No.1B(Checklist of on

Documentary andSignature Requirementsfor the ExecutiveBudget), revenue andexpenditure programtables

RequirementsChecklist ofCompliance with

General LimitationsBudget SummaryTable

Budget Review Matrixfor BudgetaryRequirementsBudget Review Matrixfor Budgetary

LimitationsLocal Budget

Authorization Form(LBAF) No.1A andNo.1B (Forms)


PLPEM Vol 4 (pp.67,98-99)

PLPEM Vol 4 (p.67)

PLPEM Vol 4 (p.68)

RBOM (pp.115, 131-132)

2. Deliberate on thebudget

Budget hearings,budget deliberations,budget review matricesfor budgetary

requirements andlimitations

Guide Questions forDeliberations

RBOM (pp.119-120)

3. Authorize the annualbudget

AppropriationOrdinance,Supplemental

Appropriations51or Re-enacted budget if LocalSanggunian fails toauthorize the proposedbudget

- -

4. Approve theAppropriation Ordinance

Approved AppropriationOrdinance52 for CurrentOperating Expendituresand Capital Outlays

- -


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2.2 Deliberate on the Budget

After the LCE has presented the highlights, thrusts and priorities incorporated inthe Executive Budget and the local Committee on Appropriations submits its report andrecommendations to the Sanggunian, the budget shall be open for discussion anddebate. The discussion or debate may start on October 16, at the option of theSanggunian or its Committee on Appropriations. This process will be open to the publicand would help ensure that the policies and PPAs arrived at by the LDC are incorporatedin the budget. The Sanggunian is tasked to see to it that the Executive Budget is

development and results-oriented, poverty-focused and promotes economic growth.55

2.3 Authorize the Annual Budget

On or before the end of the current year, that is, before the beginning of the fiscal yearand after the budget deliberation, the Sanggunian authorizes the annual budget throughan Appropriation Ordinance.

If the Sanggunian fails to enact the Appropriation Ordinance after 90 days from thebeginning of the fiscal year, the Appropriation Ordinance of the preceding year shall bedeemed reenacted and shall remain in force until a new ordinance is passed. Noordinance authorizing supplemental appropriations can be passed in place of annualappropriations.56

2.4 Approve the Appropriation Ordinance

The Appropriation Ordinance enacted by the Sanggunian shall be presented to the LCEwho must sign if he approves of it. Otherwise, he will veto the ordinance (totally orpartially) and, with his objections in writing, return it to the Sanggunian within 15 days inthe case of a province and 10 days in the case of a city/municipality The Sanggunian


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Appropriation Ordinance for review and ends with the issuance of the review action.

The DBM reviews the Appropriations Ordinances of provinces, highly urbanized cities,independent component cities and municipalities within the Metropolitan Manila Areaand the Sangguniang Panlalawigan reviews the Appropriations Ordinances ofcomponent cities and municipalities. Copies of the approved Appropriation Ordinanceshould be received by the reviewing authorities within three days after approval by theLGUs' local Sanggunian. The review should be done within 90 days from receipt ofcopies of these ordinances.

Table 26. Suggested Approaches and Tools in Budget Review


Reference Manuals

1. Check theAppropriation Ordinanceand supportingdocuments

Checked budgetdocuments(AppropriationOrdinance andsupporting documents)

Checklists onDocumentary andSignature Requirements

RBOM (p.149)

2. Review theAppropriation Ordinance

Reviewed AppropriationOrdinance

Checklist ofCompliance withBudgetaryRequirementsChecklist ofCompliance withGeneral Limitations



3. Issue the reviewaction

Review action in theform of a letter from the

DBM RO or aSanggunian resolution59,stamp of review

Table Recapitulatingthe Findings and

Possible Action (LocalBudget Review FormNo. 2)

RBOM (p.160)


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as well as for consistency with the AIP and ELA.

3.4 Issue the Review Action

The review action shall be in the form of a letter from the DBM RO, while that from theSanggunian Panlalawigan shall be in the form of a Resolution. The stamp or review ofthese bodies shall be affixed on every page of the reviewed ordinance and duly signedby review authorities. The review action may be any of the following: declaration thatthe Appropriation Ordinance is operative in toto or subject to conditions; or inoperative inpart or in its entirety; or an imposition to reduce or increase an item of appropriation.The review action does not supplant the act of the Sanggunian when it passes the

Appropriation Ordinance. Failure of the reviewing agency or body to take action withinthe reglementary period of review shall have same effect as if the AppropriationOrdinance has been reviewed.

Phase 4: Budget Execution

This involves the release and actual disbursement of funds appropriated and alloted forspecific functions and activities in the Appropriations Ordinance. A critical aspect of thisphase is the collection of funds, such that disbursements do not exceed appropriations.While seemingly a separate activity, the collection and/or receipt of revenues areconsidered an integral part of budget execution.

Table 27. Suggested Approaches and Tools in Budget Execution


Reference Manuals

1 R l ll A h i i i L l B d M i PLPEM V l 4 (71 72


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Forecasts

Suggested approaches and tools are described in detail in Chapter 4 of VolumeV (pp. 52-65).

4.1 Record the approved budget in the appropriate registries

On the first business day of the fiscal year, the Local Budget Officer will record the entireannual budget of the LGU in the Registry of Appropriations, Allotments and Obligations(RAAO). Separate registries shall be maintained for the four classes of expenditures per

responsibility center: Registry of Appropriations, Allotments and Obligations CapitalOutlays (RAAOCO); Registry of Appropriations, Allotments and Obligations Maintenance& Other Operating Expenses (RAAOMO); Registry of Appropriations, Allotments andObligations Personal Services (RAAOPS); and Registry of Appropriations, Allotment andObligations Financial Expenses (RAAOFE).

The system of recording in the registries shall follow the New Government AccountingSystem (NGAS) prescribed by the Commission on Audit.

4.2 Release the allotments

The LCE issues the authorization to incur obligations through the allotment system usingthe Local Budget Matrix (LBM) and the Allotment Release Order (ARO) as releasedocuments. Under this system, obligations may be incurred as long as they are withinthe allotment ceiling and need not be supported by cash in the meantime.

The LBM is the yearly overall financial plan of the LGU. It is equivalent to the approvedAppropriations Ordinance disaggregated into components or categories. This is issuedto each department/office to serve as a comprehensive authority to disburse. The LBMalso provides a device for the imposition of reserves non release of unprogrammed


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position, liquidity and solvency.60

The System of Cash Programming through the use of a periodic Statement of CashFlows and Cash Flow Analysis ensures that allotments are safely covered by cash andthat cash is available when it is needed to pay obligations. Moreover, it provides thefollowing vital information to keep decision-making on track: over-collection or under-collection of taxes and other revenues, over-spending, savings in expenditures, and idlecash.

The Summary Financial and Physical Performance Targets (SFPPT) reflects thebudget allocation for the budget year and the targeted performance indicators under

each major final output (MFO) and PPA. These targets are based on historical data ofactual output of regular activities considering their average growth and the peculiarrequirements of certain PPAs. The targets are prepared for the entire calendar year foreach department to serve as basis in comparing actual level of accomplishment for thepreceding year and knowing the available resources for the budget year. This shall besupported with a Detailed Financial and Physical Performance Targets (DFPPT) whichpresents the quarterly breakdown of the Financial Allocation that would be needed toaccomplish a specific level of target for each PPA for a particular quarter. Inaccomplishing the SFPPT and DFPPT, Department/Office Heads with the assistance oftheir staff, should focus on the core functions of their department/office and on thedelivery of high impact activities at reasonable costs and qualities.

4.4 Obligate and disburse funds for the implementation of Programs/Project/Activities

All disbursements and obligations must be made in accordance with the AppropriationOrdinance. Consistent with the Modified Accrual System being implemented under theNational Government Accounting System (NGAS), obligations shall be taken up in the

registries as they are incurred. Accordingly, expenditures and obligations incurred duringthe fiscal year shall be taken up in the accounts of the year.


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The provision of corrective actions to negative deviations in both the financial andphysical performances is necessary in the execution of the budget during the fiscal year.The objective is to ensure that planned targets are achieved within the year and withinavailable resources.

Phase 5: Budget Accountability

Budget accountability encompasses the recording and reporting of estimated and actualincome and expenditures as well as the monitoring and evaluation of the physical and

financial performance of the LGU relative to the accomplishment of its programs,projects and activities as funded in the budget. Basically, it is the evaluation of theLGUs performance in the execution of its budget.

The results of the monitoring and evaluation process will enable the officials concernedto redirect or plan their next moves not only during the remaining period of budgetexecution but also during the planning/programming and budget preparation phases.

Table 28. Suggested Approaches and Tools in Budget Accountability


Reference Manuals

1. Performancemonitoring

Accountability reportsusing Local Budget

Accountability Forms

OrganizationalPerformance IndicatorFramework (OPIF)Best Practice in LocalBudget Accountability

PLPEM Vol 4 (p.82)

PLPEM Vol 4 (p.82)

2. Performance

evaluation

Performance Review

Report and LocalBudget PerformanceEvaluation Forms

Weights

Scoring System (withunlabeled Table)Total Overall WeightedScore (TOWS) (with

RBOM (pp.202-203)

RBOM (pp.202-203)RBOM (p.204)


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of performance in attaining the goals and objectives the LGU had set.61 This stage shallinvolve monitoring (a) revenue/income collections; (b) appropriations, allotments andobligations; and (c) physical outputs and accomplishments using prescribed forms.62

5.2 Conduct a performance evaluation63

The LGC tasks the LFC to conduct a mid year or semi-annual review and generalexamination of cost and accomplishments against performance standards applied inundertaking development projects. [UBOM]

Performance review and evaluation involves the (a) evaluation of physical, financial and

income performance using as bases the local budget accountability reports, andaccomplishing several prescribed forms; and the (b) evaluation of LGU performanceusing weights and a scoring system. The final product is a Performance Review Reportwhich should be concise and brief and should include a descriptive discussion of theoffice/department and the overall LGU performance. [UBOM]

Submission of these evaluation reports to the LCE should be on or before August 31 ofthe current year and February 28 of the next year. The LFC shall further report theevaluation results to the local Sanggunian, oversight agencies, NGOs and otherobservers, and post this in publicly accessible places and in the LGU website (ifexisting). [UBOM]

D. Format

All forms required for submission throughout the budget process are provided inVolume 5. The forms comprise the following major groupings corresponding to the five

budget phases:

Phase 1: Budget and Expenditure Financing (BESF), Local Budget PreparationForms (LBP Forms) and Supplemental Budget Preparation Forms


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year

Submission to LCE of detailed 3-year statement of income and

expenditures

On or before the 5th day ofJuly

Certified Statement of Incomeand Expenditures

Preparation and submission ofbudget proposals

Budget Proposals

Conduct of technical budgethearings on budget proposalssubmitted by Department Heads

July 16 to August 31 Reviewed budget proposals

Submission to the PunongBarangay of the estimated Incomeand Expenditure fir the ensuing

fiscal year

On or before the 15th ofSeptember

Certified Statement of Incomeand Expenditure

Consolidation of Budget Proposalsinto the Local Expenditure Program(LEP) and preparation of theBudget of Expenditures andSources of Financing (BESF)

September 16 to 30 LEP and BESF

Preparation of the Budget Messageand Submission of ExecutiveBudget to the Sanggunian

Not later than October 16 Budget Message and ExecutiveBudget

Enactment of the Annual Budget ofthe ensuing fiscal year by theSanggunian concerned

October 17 onwards Enacted Annual Budget

Submission of the Annual orSupplemental Budgets ofProvinces, Cities and Municipalitiesto appropriate reviewing authority

Within three (3) days fromthe approval by the LCE ofthe Annual or SupplementalBudgets

Annual or Supplemental Budgetsubmitted for review

Within ten (10) days from theapproval by the Punong Barangayof the Annual or SupplementalBudgets of Barangays

Submission of the Annual orSupplemental Budgets forReview

Annual or Supplemental Budgetsubmitted for review

Within sixty (60) days from receiptof the submitted Annual or

Review of the Annual orSupplemental Budgets of

Reviewed Annual orSupplemental Budgets of


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References

Budget Operations Manual for Local Government Units (An Updated Version of the June 2005Edition), April 2008

City Development Strategies (CDS) Toolkit

CLUP Guidebook

Guide for the Preparation of Comprehensive Development Plans (CDP)

Guidelines for the Formulation of the Provincial Physical Framework Plan (PPFP Guide),September 1991

Harmonization of Local Planning, Investment Programming, Revenue Administration, Budgetingand Expenditure Management, Joint Memorandum Circular (JMC) No. 001, Series of 2007(JMC)

Joint Course on Local Development Strategy and Capital Investment Programming & Budgeting(LDS-CIP)

Rationalized Local Planning System of the Philippines

Provincial Development & Physical Framework Plan, Volume 2. Guidelines on Provincial/LocalPlanning and Expenditure Management (PLPEM)

Manual for Statement of Receipts & Expenditures System

Provincial Development & Physical Framework Plan, Volume 3. Guidelines on InvestmentProgramming and Revenue Generation


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Annex 1. Comparison of Planning Steps in the Preparation of Land Use Plans

Provincial Physical FrameworkPlan64

Comprehensive Land Use Plan65 Provincial Development andPhysical Framework Plan66

1.Data Collection and Assembly2.Analysis of Data3.Setting of Goals and Objectives4.Generation of Spatial

Development Strategies5.Evaluation, Selection of

Development Strategy6.Formulation of the Physical Plan7.Review, Adoption and Approval

Process8.Implementation and Monitoring

1.Getting Organized2.Identification of Stakeholders3.Setting the Vision4.Analyzing the Situation5.Setting the Goals andObjectives

6.Establishing the DevelopmentThrusts and Spatial Strategies7.Preparing the land Use Plan(Details of PreferredDevelopment Strategy)8.Drafting the ZoningOrdinance9.Public Hearing for the DraftCLUP Zoning Ordinance (ZO)10.Reviewing, Adopting and

Approving the CLUP and ZO11.Implementing the CLUP andZO

12.Monitoring, Reviewing andEvaluating the CLUP and ZO

Stages:1. Visioning2a. Situation Analysis:

Organization, Data, InitialAnalysis

2b. Situation Analysis: PlanEnvironment

3a. Formulation of DevelopmentGoals, Objectives/Targets,Strategies and PPAs

3b. Draft PDPFP4. Sanggunian Approval


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Annex 2. Comparison of Planning Steps in the Preparation of Comprehensive Plans

PDPFP67 PPFP68 CDP69 CDS1 CDS2 ELA70

Step 1. VisioningStep 2a. Situation

Analysis:Organization, Data,Initial AnalysisStep 2b. Situation

Analysis: PlanEnvironment

Step 3a.Formulation ofDevelopment Goals,Objectives, Targets,Strategies and PPAsStep 3b. DraftPDPFPStep 4.Sanggunian

Approval

1.Data Collectionand Assembly2.Analysis of Data3.Setting of Goalsand Objectives4.Generation ofSpatialDevelopment

Strategies5.Evaluation andSelection ofDevelopmentStrategy6.Formulation ofthe Physical Plan7.Review, Adoptionand ApprovalProcess

8.Implementationand Monitoring

Stage 1: Generatingthe PlanningDatabaseStage 2: Vision,Goal Setting/Revalidation/RevisionStage 3:

Preparation of theMulti-YearComprehensiveDevelopment PlanStage 4:Preparation of theLocal DevelopmentInvestment ProgramStage 5: PlanImplementation

Phase 1:Where are wenow?Phase 2:Where wouldwe like to be?Phase 3: Whatissues do we

need toaddress?Phase 4: Whatactions must weneed to take toget there?

1.Data Collectionand Analysis2.Benchmarking3.Sharing aCommon Vision4.IdentifyingStrengths,Weaknesses,

Opportunities andThreats (SWOT)5.Creating the

Action Plan andIdentifying theFinancing for thePlan

Step 1: Planning to PlanStep 2: Prioritizing IssuesStep 3: Consulting withStakeholdersStep 4: Defining/Revisitingthe LGU Vision and MissionStep 5: Formulating theGoals and Objectives

Step 6: PrioritizingPrograms and CapacityDevelopment NeedsStep 7: DeterminingLegislative RequirementsStep 8: BuildingCommitmentStep 9: SecuringEndorsement and ApprovalStep 10: Moving ELA into

ActionStep 11: Popularizing theELAStep 12: Managing andSustaining ELAImplementation


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Annex 3 . Comparison of Plan Formats/Chapters in Land Use Plans

Provincial Physical Framework

Plan

Comprehensive Land Use Plan Provincial Development and

Physical Framework PlanTEXT FORMATI.Formal elementsII.Substantive Elements

A.IntroductionB.SWOT Analysis

Provincial PhysicalCharacteristic

Provincial Population

Socio-EconomicCharacteristics

Settlement Patterns

Land Sue

EnvironmentalConcerns

City-Municipal LandUse plans

Administrative and

Financial; StructureA.Presentation of thePhysical FrameworkPlan

Goals and Objectives ofthe Province

AlternativeDevelopmentStrategies

Evaluation andSelection of PreferredStrategy

The Framework Plan

VOLUME 1PRELIMINARY PAGES

Resolution Adopting the CLUPand enacting the ZoningOrdinance

Foreword

Acknowledgment

Table of Contents

List of MapsList of Figures

List of TablesBRIEF PROFILE OF

CITY/MUNICIPALITY

Brief history

Human Resource

Physical Features

Physical/InfrastructureResources (Inventory of Mapsand Tables )

The Economic StructureCOMPREHENSIVE LAND USE

PLAN

Vision/Mission

Goals, Objectives

, Strategies