DILG Secretary proposes Performance Challenge Fund for LGUs

By Philippine Information Agency (PIA 8)
August 15, 2010

TACLOBAN CITY  –  Department of Interior and Local Governments Secretary Jesse Robredo is proposing the Performance Challenge Fund for Local Government Units (PC Fund), Leyte Board Member Roque A. Tiu informed.

Board Member Tiu said that the DILG Secretary intimated his proposal during the recently concluded orientation seminar of the members of the faculty of the Mayors Development Center, Inc. of the League of Municipalities of the Philippines.

The Performance Challenge Fund for Local Government Units (PC Fund) is an incentive fund to LGUs in the form of counterpart funding to high-impact capital investment projects in the Annual Investment Program and funded the 20% Development Fund consistent with national priorities.

It shall seek to rationalize national government inter-governmental transfers to LGUs, and encourage alignment of local development initiatives with national government development agenda and priorities.

The PC Fund shall be open to all provinces, cities and municipalities awarded with the Seal of Good Housekeeping provided that the LGU shall allocate counterpart fund to implement capital investment projects aligned with the national development agenda and priorities.

The LGUs may be targeted based on income class or alternative indicators of fiscal need like income/IRA per capita, poverty incidence, or level of LGU. Coverage will be limited by the volume of grants that are sizeable enough to be attractive to the targeted LGUs.

The PC Fund aims to recognize good governance performance particularly in the adoption of “good housekeeping” governance areas of planning, budgeting, revenue mobilization, financial management and budget execution, procurement, and resource mobilization.

It also seeks the improvements in LGU performance by linking incentives/financial grants with performing LGUs based on an established set of requirements and condition; encourages alignment local development programs with national development goals and priorities; and stimulate LGU and private sector investments in sectors prioritized by the national government.