Guidelines Relating to 20% Development Fund

EO No. 189
December 21,
1999
LBC No. 70
March 14, 2000
COA Memo 2000109
October 6, 2000
Joint DILG and
DBM Memo
Circular No. 1, s.
2005
September 20,
2005
DILG Memo
Circular No. 2010138
December 2,
2010
Joint DILG and
DBM Memo
Circular No. 20111
April 13, 2011

Directing all LGUs to submit to the DBM their respective Annual Investment
Plan (AIP)
Submission of Annual Investment Plan Funded Out of the Development Fund
Equivalent to 20% of Internal Revenue Allotment (IRA)
Clarificatory Guidelines Relative to the Utilization of the 20% Development
Fund Pursuant to EO No. 189 as Implemented by LBC No. 70.
- Quoting letter dated August 23, 2000 of DBM Sec. Benjamin E. Diokno
to COA Chairman Gangan
Guidelines on the Appropriation and Utilization of the 20% of the Annual
Internal Revenue Allotment (IRA ) for Development Projects

Use of the 20% Component of the Annual Internal Revenue Allotment Shares
(and prohibited charges)

Amending DILG-DBM Joint Memorandum Circular No. 1, dated

September 20, 2005, Entitled, Guidelines on the
Appropriation and Utilization of the 20% of the Annual
Internal Revenue Allotment (IRA ) for Development Projects
and DILG Memorandum Circular No. 2010-138 dated
December 2, 2010, entitled Use of the 20% Component of
the Annual Internal Revenue Allotment Shares

20% Development Fund

The 20% Development Fund constitutes twenty percent (20%) of the
annual Internal Revenue Allotment (IRA) shares of every local government unit
concerned for development projects. It is a statutory item of appropriation.
Provisions of Section 287 of the Local Government Code is crystal clear on the
matter, thus:
Sec. 287. Local Development Projects. Each local government unit shall
appropriate in its annual budget no less than twenty (20%) of its annual internal revenue
allotment for development projects. Copies of the development plans of local government
units shall be furnished by the Department of Interior and Local Government.

Please be guided by the DILG-DBM Joint Memorandum Circular No. 1, s.

2011 dated April 13, 2011, and DILG MC 2010-138 on the use of the 20%
Development Fund:

DILG Issuances amended or supplemented by DILG Memo Circular 2010-138

dated 12/2/2010:
1. Memorandum Circular No. 95-155 dated Sept. 22, 1995 Submission of
Financial reports on the utilization of the 20% Development Fund and
Annual Investment Programs to the COA
2. Memorandum Circular No. 95-216 dated December 15, 1995 Policies and
Guidelines on the Utilization of the 20% Development Fund and Related
Matters
3. Memorandum Circular No. 99-66 dated April 23, 1999 Reiterating or
Further Amending, the Provisions of MC No. 95-216 dated Dec. 14, 1995,
as amended
4. Memorandum Circular No. 2000-97 dated August 1, 2000 Financing AntiIllegal Drug Activities
5. Joint Memorandum Circular No. 1, s. 2005, dated September 20. 2005
Guidelines on the Appropriation and Utilization of the 20% of the Annual
IRA for Development Projects

Utilization of 20% Development Fund:

1. Under EO 189
a. Solid waste management which may include purchase of related
equipment, trucks and compactors, as well as purchase of land for
sanitary landfill purposes;
b. Purchase of lots for hospitals, health centers, day care centers and
similar facilities which may include construction, repair and/or
maintenance of such facilities;
c. Purchase of lot for resettlement of squatters, including construction of
housing units and facilities;
d. Activities in support of the Food Security Program, and the Livestock
Dispersal, Fisheries Development and Fish Culture Farming Programs;
e. Initiatives in support of Cooperative Development;
f.

Construction, maintenance and/or repair of post-harvest facilities,

irrigation and other agricultural production systems;

g. Construction, maintenance and/or repair local roads and bridges;

h. Construction, maintenance and/or repair of water and sewerage
system, as well as, power and communication facilities; and
i.

Construction, maintenance and/or repair of public buildings which may

include purchase of equipment necessary in the implementation of
infrastructure undertakings.

2. Under LBC No. 70

a. Solid waste management which may include purchase of

related equipment, trucks and compactors, as well as
purchase of land for sanitary landfill purposes;

b. Purchase of lots for hospitals, health centers, day care

centers and similar facilities including the construction,
repair and/or maintenance off such facilities;

c. Purchase of lot for resettlement of squatters, including

construction of housing units and facilities;

d. Activities in support of the Food Security Program, and the

Livestock Dispersal, Fisheries Development and Fish Culture
Farming Programs;

e. Initiatives in support of cooperative development;

f.

Construction, maintenance and/or repair of post-harvest

facilities, irrigation and other agricultural production
systems;

g. Construction, maintenance and/or repair of local roads and

bridges;

h. Construction, maintenance and/or repair of water and

sewerage systems, as well as, power and communication
facilities;

i.

Construction, maintenance and/or repair of public buildings

which may include purchase of equipment necessary in the
implementation of infrastructure undertakings; and

j.

Other infrastructure or capital outlay projects supportive of

the annual component of the development plan of the LGU
concerned, e.g., flood projects;

k. Payments of loans covering goods and services in

connection with projects herein listed, subject to budgeting
and accounting rules and regulations.
3. Under COA Memo No. 2000-109
May be considered eligible for funding from the 20% DF:
a. Technical activities in the preparation of the Comprehensive
Land Use Plan, i.e. tax mapping, project profiling and related
tasks which are considered supportive of the annual component
of the development plan of LGUs;
b. Environmental management program which is a component of
the waste management project specified under item "a" of
Section 2.2 of LBC No. 70;
c. Purchase of garbage trucks and heavy equipment which is also
part of the waste management program;
d. Purchase of farm equipment and maintenance of farm to
market roads which are activities in support of the Food
Security Program, Livestock Dispersal, Fisheries Development,
Fish Culture, Farming Programs and other agricultural
production systems;
e. Human ecological activities which are linked, integrated and
supportive of cooperative development; and
f.

Other infrastructure or capital outlay projects supportive of the

annual component of the development plan of the LGU
concerned.

4. Under Joint Memo Circular No. 1, s. 2005

Social Development
a. Establishment or rehabilitation of Productivity Enhancement
Center for out-of-school youths, women, minors, displaced
facilities, indigenous people, differently-abled persons and
older persons
b. Establishment or rehabilitation of Manpower Development
Center
c. Construction or rehabilitation of health centers, rural health
unit or hospital, and purchase of medical equipment
d. Construction or rehabilitation of a local government-owned
potable water supply system
e. Installation of street lighting system
f. Preservation of cultural/historical sites
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g. Other programs or projects of similar nature

Economic Development
a. Implementation of a livelihood/entrepreneurship
development program or project
b. Construction/rehabilitation of a communal irrigation or water
impounding system and purchase of post harvest facilities
such as farm or hand tractor with trailer, thresher,
mechanical drier and the like
c. Construction/rehabilitation of farm-to-market roads
d. Construction/rehabilitation of local roads or bridges
e. Other programs or projects of similar nature
Environmental Management
a. Construction/rehabilitation of sanitary landfill or controlled
dumpsite and purchase of a garbage truck or related
equipment
b. Community reforestration or urban greening projects
c. Flood control programs or projects such as de-clogging of
canals or de-silting of rivers
d. Other environmental management programs or projects that
promote air and water quality, as well as productivity of
coastal or freshwater habitat, agricultural land and forest
land
5. Under Joint Memo Circular No. 2011-1 dated April 13, 2011
Social Development
a. Construction or rehabilitation of health centers, rural health
units or hospitals, and purchase of medical equipments
b. Construction or rehabilitation of local government-owned
potable water supply system
c. Establishment or rehabilitation of Manpower Development
Center
d. Construction or rehabilitation of evacuation centers
e. Purchase or repair of area-wide calamity related alarm or
warning system
f. Rehabilitation of cultural/historical sites
g. Purchase or repair of appropriate calamity-related rescue
operations equipment such as inflatable boats, breathing
apparatus, extraction tools, safe line rescue ropes, fire
extinguishers, chainsaws, two (2) way handheld radios and
the like
h. Purchase and development of land for the relocation of
informal settlers and relocation of victims of calamities
i. Construction or rehabilitation of facilities such as multi6

j.

purpose hall intended to cater out-of-school youths, women,

senior citizens, minors, displaced families, indigenous
people and differently-abled persons, and
Installation and maintenance of street lighting system
except payment of electric bills

Economic Development
a. Construction or rehabilitation of communal irrigation or
water impounding system and purchase of post-harvest
facilities such as farm or hand tractor with trailer, thresher
and mechanical driers
b. Construction or rehabilitation of local roads or bridges and
purchase of appropriate engineering equipment such as
dump trucks, graders, and pay loaders
c. Capital expenditures related to the implementation of
livelihood or entrepreneurship/local economic development
projects, and
d. Amortization of loans used to finance development projects
cited in this Joint Circular, subject to the 20% debt service
cap.
Environmental Management
a. Reforestration and urban greening
b. Construction or rehabilitation of sanitary landfills, material
recovery facilities and purchase of garbage trucks and
related equipment
c. Implementation of flood and erosion control projects such as
rehabilitation and construction of drainage systems, desilting of rivers, de-clogging of canals, and
d. Other environmental management projects that promote air
and water quality, as well as productivity of the coastal or
freshwater habitat, agricultural land and forest land.

Items/Expenditures that cannot be charged to or paid out of 20%

Development Fund (not related to/connected with the implementation of
development programs, projects, activities):
1. Items for personal services (JMC No. 1, s. 2005 dated Sept. 20, 2005 and
Joint Memo Circular No. 2011-1 dated April 13, 2011)
2. Under DILG Memo Circular No. 2010-138 dated December 2, 2010:
a. Administrative expenses such as cash gifts, bonuses, food
allowance, medical assistance, uniforms, supplies, meetings,
communication, water and light, petroleum products, and the like
b. Salaries, wages or overtime pay
c. Travelling expenses, whether domestic or foreign
d. Registration or participation fees in training, seminars, conferences
or conventions
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e. Construction, repair or refinishing of administrative offices

f. Purchase of administrative office furniture, fixtures, equipment or
appliances; and
g. Purchase, maintenance or repair of motor vehicles or motorcycles,
except ambulances
3. Payment of electric bills (Item 3.1.10 of JMC No. 2011-1 dtd. 4/13/2011)
4. Per JMC No. 2011-1 (similar to a to g of DILG Memo Circular No. 2010-138,
but letter g however excludes the words except ambulances ):
a.

b.
c.
d.
e.
f.
g.

Administrative expenses such as cash gifts, bonuses, food

allowance, medical assistance, uniforms, supplies, meetings,
communication, water and light, petroleum products, and the like
Salaries, wages or overtime pay
Travelling expenses, whether domestic or foreign
Registration or participation fees in training, seminars, conferences
or conventions
Construction, repair or refinishing of administrative offices
Purchase of administrative office furniture, fixtures, equipment or
appliances; and
Purchase, maintenance or repair of motor vehicles or motorcycles.

LAM
11/30/11