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HEADS OF DEPARTMENTS (DA, DAR, DENR, DEPED, DOH, DOLE AND DOE) AND HEADS OF PHILHEALTH AND NEA, ALL MAYORS AND MEMBERS OF THE SANGGUNIAN OF FOCUS CITIES AND MUNICIPALITIES, AND ALL OTHERS CONCERNED

POLICY GUIDELINES AND PROCEDURES IN THE IMPLEMENTATION OF BOTTOM-UP PLANNING AND BUDGETING FOR THE FY 2013 BUDGET PREPARATION

National government agencies and other stakeholders shall pursue the Millennium Developmental Goal of reducing poverty from 26.5% in 2009 to 16.6% by 2015. This is likewise reflected in the Philippine Development Plan for 2011-2016.

As a strategy, the Human Development and Poverty Reduction Cluster (HDPRC) and the Good Governance and Anti Corruption Cluster (GGAC) organized under Executive Order No. 43, s. 2011, together with the Department of Budget and Management (DBM) and the Department of the Interior and Local Government (DILG) shall pilot the bottom-up approach to planning and budgeting. This shall ensure the inclusion of the funding requirements for the development needs of at least 300 of the 609 selected focus local government units (LGUs) identified and approved by the HDPRC in the budget proposals of participating national government agencies. This initiative will make the planning and budgeting processes of both local and national governments more participatory through the genuine involvement of grassroots organizations and communities. It shall also strengthen the convergence of the delivery of national services in the community.

To provide the policy guidelines, processes, responsibilities and timelines to guide the participating agencies and selected focus LGUs in the bottom-up planning and budgeting approach to be applied in the preparation of the FY 2013 Budget.

This circular shall cover the following participating agencies:

•

For Rural Development
Department of Agrarian Reform
Department of Agriculture
Department of Energy (including
National Electrification
Administration)
Department pf Environment and
Natural Resources

•

For Social Protection
Department of Education
Department of Health (including
Philippine Health Insurance
Corporation)
Department of the Interior and
Local Government
Department of Labor and
Employment
Department of Social Welfare and
Development

•

For Coordination and Oversight
Department of Budget and Management
Department of the Interior and
Local Government
National Anti-Poverty
Commission Human Development and Poverty
Reduction Cluster
Good Governance and
Anti-Corruption Cluster

•

Beneficiaries

At least 300 of the 609 selected focus cities and municipalities as identified and approved by the Human Development and Poverty Reduction Cluster (see Annex A).

4.1

Bottom-Up Planning and Budgeting an approach to formulating the budget proposal of agencies, taking into consideration the development needs of poor cities/municipalities as identified in their respective local poverty reduction action plans that shall be formulated with strong participation of basic sectors and civil society organizations.

4.2

Comprehensive Development Plan (CDP)- the multi-sectoral medium term plan formulated at the city/municipal level, which embodies the vision, sectoral goals, objectives, development strategies and policies of the LGU. It also contains the corresponding Programs, Activities and Projects (PAPs) which serve as primary inputs to investment programming and subsequent budgeting and implementation of projects for the growth and development of the local government territory.

4.3

Local Poverty Reduction Action Plan (LPRAP) - the LGU plan which contains programs and projects collectively drawn through a participatory process by the LGU with Civil Society Organizations (CSOs) and other stakeholders, and which will directly address the needs of the poor constituencies and the marginalized sectors in the LGU.

4.4

The Expanded Local Poverty Reduction Action Team (LPRAT) - the group, chaired by the Local Chief Executive (LCE) and composed of CSO and government representatives, shall spearhead the formulation and monitoring of the LPRAP. CSO members shall be composed of NAPC identified Basic Sectors representatives, a Pantawid Pamilya Parent-Leader, a leader from a DOH organized Community-Health Team, leaders of CSOs accredited by LGUs, leaders of CSOs accredited or recognized by NAPC, DSWD, DBM, DILG and other national government agencies, and a private sector representative. Members from government shall be composed of the Sangguniang Lungsod/Bayan Chairperson on Appropriation, heads of local agencies such as the Planning Officer, Budget Officer, Agriculture Officer, Social Welfare and Development Officer, Health Officer, DSWD Municipal Links, and the DILG City/Municipal Local Government Operations Officer.

4.5

Poor - refers to individuals and families whose income fall below the poverty threshold as defined by the National Statistical Coordination Board. These are those who cannot afford to provide for their minimum basic needs of food, health, education, housing and other essential amenities of life in a sustained manner.

4.6

Parent Leaders - Pantawid Pamilyang Pilipino Program (4Ps) grantees chosen by their co-grantees/fellow parents to lead a cluster of family-grantees. Their role and function is to ensure the compliance to the conditionalities of the 4Ps program by the grantees. They preside over meetings during community assemblies; disseminate information and updates, follow-up/monitor commitment, and compliance to conditionalities on health and education. They also act as the bridge of the community in communicating to the municipality link assigned in the area and to other stakeholders in the municipality or city.

4.7

Basic Sectors - refer to the disadvantaged sectors of Philippinesociety, namely: farmer-peasant, agrarian reform beneficiaries, artisanal fisherfolk, workers in the formal sector and migrant workers, workers in the informal sector, indigenous peoples and cultural communities, women, differently-abled persons, senior citizens, victims of calamities and disasters, youth and students, children and urban poor.

4.8

Civil Society Organizations (CSOs) - Include non-government organizations (NGOs), Peoples Organizations (POs), cooperatives, trade unions, professional associations, faith-based organizations, media groups, indigenous peoples movements, foundations, and other citizen's groups formed primarily for social and economic development to plan and monitor government programs and projects, engage in policy discussions, and actively participate in collaborative activities with the government.

4.9

Private Sector - refer to organizations of business individuals or entities such as business chambers, and the like. It is considered a prime engine in the economy to promote development via investment and employment.

4.10

Community-Based Monitoring Systems (CBMS) - an organized process of data collection and processing at the local level and integration of data to local planning, program implementation and impact monitoring. It promotes evidence-based policy making and program implementation while empowering communities to participate in the process.

The following processes shall serve as the main components to implement the empowerment of poor LGUs and bottom-up planning and budgeting approach

5.1

Social preparation. In preparation for poverty reduction planning, CSOs and/or HDPRC member agencies shall organize various capacity building activities to ensure that the communities in the focus LGUs will have a clear understanding of how they can provide inputs into policies and programs that affect their lives and for community members to meaningfully participate in the local governance. They may also conduct their own community consultations and workshops as part of this preparation.

5.2

Collection of relevant economic and social data. The focus LGUs shall collect and collate all relevant information, statistics, and sex-disaggregated data for poverty reduction planning. Data will be obtained from various sources such as the Community-Based Monitoring System (CBMS), Field Health Service Information System (FHSIS), administrative records of National Government Agencies (NGAs), and the National Household Targeting System, among others.

5.3

Conduct of LPRAP Workshop. The focus LGUs, through the expanded LPRATs shall conduct a workshop to formulate a Local Poverty Reduction Action Plan (LPRAP) based on relevant sex-disaggregated economic, social, and climate change vulnerability data, as well as feedback from the members of the expanded LPRAT as defined by Section 4.4. The active participation of CSOs, basic sector representatives and other non-government stakeholders must be ensured as they shall help validate data and analysis that will be presented by the LGU. In addition, the LGU shall invite concerned Agency Regional Offices (AROs) of the participating national agencies and government corporations to the workshop to provide information on the programs of their respective agencies and to provide technical assistance in the formulation of the LPRAP. The LPRAP shall identify the poverty reduction strategy to be undertaken by the LGU and other stakeholders, including the national agencies. Gender mainstreaming and climate change adaptation strategies and shall also be incorporated in the planning process.

5.4

Identification of priority poverty reduction projects. During the LPRAP Workshop, the expanded LPRAT shall also identify gender-responsive results-based priority poverty reduction projects to be funded by the LGUs and those which will be submitted to national agencies for consideration in their 2013 budget. The identified priority projects which will be funded by the LGUs shall later be formalized and included by the LGU in its Annual Investment Program and local budget. Projects for consideration of national agencies shall be listed using the List of Priority Poverty Reduction Projects format hereto attached (Annex B).

5.4.1

In Identifying projects to be funded by national government, LGUs are encouraged to identify priority poverty reduction projects which are already being undertaken by these national government agencies as listed in the Menu of Programs (See Annex C).

5.4.2

However, LGUs may still include projects outside of the Menu of Programs in their list of priority projects if these are more urgently needed by the LGUs, subject however to further determination by the Human Development and Poverty Reduction Cluster and DBM that such projects can be accommodated by the national government.

5.4.3

Funding to be requested from the national government for all projects listed in the Menu of Programs by an LGU shall not exceed the cap set for each city or municipality as indicated in Annex A.

5.4.4

Lists of priority projects which exceed the cap set for the LGU will no longer be entertained by the participating national government agencies (NGAs) and the HDPRC.

5.5

Endorsement of CSOs. The list of priority projects requires the endorsement of CSOs from the community before it can be considered by the national government for inclusion in the latter's  budget.  As representatives of the non-government members of the LPRAT, the NAPC identified basic sector representative or an NGA accredited/recognized CSO leader, a Pantawid Pamilya parent leader, or an LGU accredited CSO must sign and endorse the list of priority projects (Annex B) as proof of genuine participation in identifying the priority projects.

5.6

Approval of Sanggunian. The Sanggunian must also approve the list of priority projects before it is submitted to the national government, through the issuance of a Sanggunian Resolution using the prescribed format (Annex D).

5.7

Submission of the List of Priority Poverty Reduction Projects. The list of priority poverty reduction projects duly endorsed by the CSOs and approved by the Sanggunian shall be submitted to the following offices by April 10, 2012:

•

Central Offices (COs) of participating NGAs which are being requested to fund projects included in the priority list;

•

National Anti-Poverty Commission as the HDPRC Secretariat; and

•

The Regional Offices of DBM, DILG and DSWD

The submission to these agencies should include:

•

Cover letter signed by the city/ municipal mayor;

•

Copy of Sanggunian Resolution approving the List of Priority Poverty Reduction Projects (See Annex D for the prescribed format); and,

•

List of Priority Projects, using the attached format (Annex B).

Printed and electronic copies of these documents should be submitted to the national government agencies and the regional offices mentioned above. The mailing and e-mail addresses of the national government offices may be found in Annex E.

5.8

Integration of the LGU projects in the budgets of participating NGAs.  The concerned  NGAs shall review all identified LGU projects that have been submitted to them for funding consideration.  The agency shall then incorporate these into their budget ceilings.  Each participating  NGA  shall  then submit to NAPC and DBM the list of LGU  identified  projects that have  been  included  into their 'within ceiling' budget proposals and their 'above the ceiling' budget proposal.  The agency should clearly specify the reason for not accommodating  LGU identified projects in their budget ceiling.

5.9

Agency budget submission to DBM. The 9 participating NGAs, PhilHealth and NEA should submit their budget proposals, which incorporate the LGU identified priority projects, to DBM by April 30, 2012. This extends the deadline given in NBM 112 (FY 2013 Budget Call) for the specified participating NGAs and GOCCs. The participating agencies should also properly tag the list of priority projects as provided for under NBM 112.

5.10

Consolidation and review of all LGU identified priority projects. NAPC, as the HDPRC Secretariat, shall also consolidate and summarize the list of priority projects submitted by the focus cities and municipalities. This will then be compared with the lists submitted by each participating NGA to ensure that all projects submitted by LGUs have been considered by the concerned agency and that no LGU list of priority projects exceeds the set budget cap. Projects that have not been included in the agency ceilings shall be elevated to the HDPRC for consideration and action. The HDPRC must submit budgetary recommendations to DBM concerning projects that have not been included within the budget ceilings of participating agencies by May 7, 2012.

5.11

Institutionalizing governance reforms. As a condition for the release of funds for the identified priority poverty reduction projects, LGUs must:

•

Be a recipient of the DILG's Seal of Good Housekeeping

•

Undergo the DBM assessment of its Public Financial Management (PFM) system including the preparation and implementation by the LGU of its PFM Improvement Plan.

6.1

Earmarking of funds for poverty projects in the focus cities and municipalities. Participating agencies shall give priority to the funding of priority poverty reduction projects of the targeted cities and municipalities in the allocation of the department's budget ceilings. At least 10% of the budgets for programs and projects included in the Menu for Programs (See Annex C) shall be set-aside at the Central Office for the purpose of funding these projects:

6.2

Project proposals which are not accommodation within the ceilings of participating NGAs shall be elevated for resolution HDPR Cluster.

6.3

Highly-urbanized cities (HUCs) are required to provide at least 30% counterpart funds for each identified priority projects.

6.4

Budget proposals from the participating agencies shall include allocations for the focus cities and municipalities within their programs and previous lump sum allocations. The respective Secretary or Agency Head shall be responsible for ensuring strict compliance with this requirement. Otherwise, the DBM shall unilaterally introduce revisions in the agency budget proposal so that it conforms with the foregoing requirements.

7.1.1

Organize the LPRAT, the composition of which is stated in the definition of terms. The Local Chief Executive shall be the Chairperson of the LPRAT and shall be accountable for ensuring that only project proposals included in the LPRAT will be conveyed to the NGAs and HDPRC for support;

7.1.2

Make available information and data sets about unmet needs and corresponding Annual Investment Programs and existing work and financial plans that already begin to address these unmet needs;

7.1.3

Identify difficulties encountered by the LGU in its effort to reach remote barangays, respond to demands of basic sector groups and scale-up essential services, particularly those implied by core local poverty indicators of the CBMS and supply-side gaps relevant to the Pantawid Pamilya and Universal Health Care for discussion and possible remedy during the LPRAT workshop; and

7.1.4

Ensure the conduct of LPRAP workshop with strong CSO and basic sector participation, and craft and submit the fist of priority poverty reduction projects to all the concerned offices as specified in Section 5.7;

7.1.5

Comply with the requirements of the DILG's Seal of Good Housekeeping before the end of 2012; and

7.1.6

Participate in the required DBM assessment of the LGU's Public Financial Management (PFM) system, including the preparation and implementation of the LGU PFM Improvement Plan.

7.2.1

Organize and facilitate the conduct of a 3-day workshop for the formulation of the LFRAP and the identification of priority poverty reduction projects.

7.2.1.1

Cities and municipalities with CDP based on recent CBMS data (2009 or newer) may revisit the CDP and cull out anti-poverty programs that fall under the Menu of Programs (see Annex C).

7.2.1.2

Agrarian Reform Communities, Makamasang Tugon, and Mindanao Rural Development Program 2 cities and municipalities may revisit their unfunded sectoral plans and prioritize the programs, activities and projects that respond to the needs of the poor and the sectors and those that cuts across barangays.

7.2.1.3

Other focus cities and municipalities shall conduct a full LPRAP workshop based on rapid appraisal or validation of existing local data to produce an evidence-based LPRAP.

7.2.2

Prepare list of priority poverty reduction projects for 2013 based on the LPRAP and using the simplified proposal form (Annex B).

The Sangguniang Bayan/ Panlungsod shall review and approve List of Priority Reduction Projects to be submitted to national agencies and those for prioritization in the Annual Investment Program of LGUs. These should pass a Sanggunian Resolution using the prescribed form (see Annex D).

7.4.1

Capacitate the communities, to include the use of poverty-relevant databases, as they participate in the local planning and budgeting processes;

7.4.2

Facilitate their own meetings, community consultations and workshops in preparation for the LPRAP workshop;

7.4.3

Actively participate in the formulation of LPRAP and identification of the priority poverty reduction projects; and

7.4.4

Through the representatives identified in Section 5.5, endorse the LPRAP and list of priority poverty reduction projects for approval of the Sangguniang Bayan/ Panlungsod.

7.5.1

Conduct orientation workshops for the LPRAT of focus municipalities/cities on the bottom-up budgeting process, particularly workshops that lead to the translation of unmet needs into project concepts. The orientation workshops should include the discussion of concepts, processes, and the official formation of LPRAT, action planning for LPRAP formulation and tools for LPRAP;

7.5.2

Take the lead in organizing the Workshop and monitoring the bottom-up process;

7.5.3

Act as the resource person on the guidelines on bottom-up budgeting(DBM);

7.5.4

Be responsible in engaging the DSWD Municipal Link and the Pantawid Pamilya family leaders, especially in the formulation of multi-year work and financial plans for addressing supply side challenges. Lead in documenting and disseminating the experience from the early budget discussions between Makamasang Tugon LGUs and the relevant agencies (DSWD);

7.5.5

Provide guidance in the use of additional evidence from CBMS, FHSIS and the Pantawid Pamilya Compliance Verification System to more precisely identify and locate PAPs that would ensure achievement of service-level agreements in its Provincial Investment Plans for Health and its program for Geographically Isolated and Disadvantaged Areas (DOH).

7.5.6

Monitor the activities of the LGUs and the progress of submission of project proposals and LPRAPs (DBM ahd DILG);

7.5.7

Ensure that the LGUs submit priority projects within their budget cap and inform the HDPRC and NAPC of cases of noncompliance (DBM);

7.5.8

Inform the RDCs about the inclusion of programs and projects for the focus cities and municipalities in the budget proposals of the participating agencies.

7.6.1

Provide technical assistance (for planning) in the formulation of the LPRAP of LGUs/ communities that are supportive of the sectoral outcomes to ensure alignment on national thrusts; and

7.6.2

Ensure the participation of their planning and budget officers (at the minimum) in the LPRAP workshops to provide guidance to the LGUs and CSOs in the determination of the nature and cost of the project proposals to be requested from the NGAs, which may include multi-year project proposals.

7.7.1

Lead the conduct of regional orientation for the regional poverty reduction teams on the formulation of LPRAPs;

7.7.2

Ensure the LGU identified projects are given due consideration in the formulation of the 2013 national government budget (DBM and HDPRC);

7.7.3

Provide feedback to all LGUs which submitted their list of priority projects (HDPRC through NAPC);

7.7.4

Ensure that documentation of the process involved including experiences and lessons learned and possible recommendations/ suggestions for improvement shall be done by an independent entity (HDPRC through DSWD and NAPC); and

7.7.5

Set-up a web-based monitoring system which will track the implementation of the funded projects. This system shall allow for online reporting by LGUs and implementing agencies as well as submission of feedback from CSOs and other stakeholders (HDPRC).

7.8.1

Designate Agency Central Office focal persons that will formulate the agency development plan and budget strategy for 2013 and communicate the same to the agency regional offices, bureaus and attached agencies and GOCCs, including the CSOs;

7.8.2

Set-aside or earmark at least 10% of the budgets of programs and projects included in the Menu of Programs (Annex C) to fund the projects proposals of the focus cities/municipalities within the department's indicative ceiling;

7.8.3

Review and evaluate the list of priority projects submitted by the LGUs and incorporate these into their proposed 2013 budget using funds that have been earmarked for this purpose. In case of deficiency, the department may reallocate and adjust the indicative ceiling distributed to its bureaus, regions and attached agencies to accommodate the priority needs of the LGUs;

7.8.4

Include and identify in its above the ceiling budget, LGU identified projects which cannot be incorporated within the agency budget ceiling;

7.8.5

Submit to DBM and HDPRC (through NAPC) the list of projects which have been incorporated   within   the ceiling and those above the ceiling budget proposal of the agency for 2013 by April 30, 2012;

7.8.6

Elevate to the HDPR Cluster project proposals which were not accommodated by participating agencies in their budget ceiling for appropriate action; and

7.8.7

Submit to DBM, the department's budget proposal for FY 2013 which includes the project proposals from the focus cities/municipalities by April 30, 2012. In filling-up BP201-ABC of NBM 112 (FY 2013 National Budget Call). LGU project proposal shall be tagged as "9" to facilitate tracking and monitoring, as shown in the example.

PAPs			Key Program	Amounts
B.1.b Farm to Market Roads			3
	Region 1			XXXXXXXX
		Regular		xxxxxxxxx
		Bottom-up	9	xxxxxxxxx

7.9.1

7.9.2

7.9.3

7.9.4

7.9.5

8.1

Mapping of the approved project of LGUs/communities shall be posted in the NAPC website.

8.2

Documentation of the process involved including experiences and lessons learned and possible recommendations/suggestions for improvement shall be done by an independent entity to be contracted.

Participating agencies and LGUs are enjoined to adhere to the bottom-up budget preparation calendar as specified in the table below.

Procedure	Date
1. Conduct of LPRAP Workshops by Expanded LPRATs	Feb. 16 - March 16, 2012
2. Endorsement of CSO representatives and Approval of the LPRAP and list of priority poverty reduction project by the Local Sanggunian	March 19-30,2012
3. Submission of the 2013 project proposals and multi-year LRAP to concerned NGAs and HDPR by LGUs	April 10, 2012
4. Submission of LGU identified projects accommodated within the agency ceiling and those above the ceiling to DBM and NAPC/HDPRC	April 30, 2012
5. Submission of proposed agency budgets for FY 2013 to DBM by participating agencies	April 30,2012
6. Submission of recommendations for projects not included within the agency budget ceiling to DBM by HDPRC	May 7,2012

(Sgd.) CORAZON JULIANO-SOLIMAN
Secretary, DSWD

(Sgd.) JOSE ELISEO M. ROCAM0RA
Lead Convenor, NAPC

(Sgd.) FLORENCIO B. ABAD
Secretary, DBM

(Sgd.) JESSE M. ROBREDO
Secretary, DILG