Law Summary

Introduction

Executive Order No. 189, issued on December 21, 1999, mandates all Local Government Units (LGUs) in the Philippines to submit their respective Annual Investment Plans (AIPs) to the Department of Budget and Management (DBM). This directive is in line with the provisions of the Local Government Code of 1991, emphasizing the allocation and utilization of the 20% Development Fund for development projects.

Use of the 20% Development Fund

• Legal Principle: The Internal Revenue Allotment (IRA) allocated to LGUs must be appropriated for specific developmental purposes as outlined in the Executive Order.
• Key Definitions:
  • 20% Development Fund: The portion of the IRA set aside by LGUs for development projects.
• Requirements:
  • Funds must be used for sectoral programs, projects, and activities that align with the national development agenda.
• Priority Areas:
  • Solid waste management (including equipment purchase)
  • Construction and maintenance of health facilities
  • Resettlement initiatives for squatters
  • Support for food security and agricultural programs
  • Infrastructure development (roads, bridges, water systems)
• Important Details:
  • Funds must be used solely for the purposes for which they were allocated.

Submission of the Annual Investment Plan

• Legal Principle: LGUs are required to submit their AIPs to ensure proper planning and allocation of the 20% Development Fund.
• Requirements:
  • Each LGU must approve its AIP through its Local Development Council.
  • AIPs must be submitted to the appropriate DBM regional office.
• Timeframe:
  • Annual AIPs are due by January 31 of each year.
  • For the year 2000, the deadline is extended to March 31, 2000.
• Content of the AIP:
  • Must detail specific programs, projects, activities, and their corresponding costs.

Direct Release of the 20% Development Fund

• Legal Principle: The DBM is responsible for the direct release of the 20% Development Fund based on the approved AIPs.
• Requirements:
  • Release of funds will follow a schedule based on the AIP.
  • Initial fund mobilization and progress billing schemes may be adopted.

Implementing Guidelines

• Legal Principle: The DBM is tasked with creating guidelines for the implementation of the Executive Order.
• Requirements:
  • Guidelines are to be developed in consultation with local government leagues.
  • DBM may prescribe forms necessary for compliance.

Review of the Project List

• Legal Principle: Regular assessment of projects funded by the 20% Development Fund is mandated.
• Requirements:
  • The Development Budget Coordinating Committee (DBCC) will conduct a semiannual review of eligible projects.
  • A report and recommendations will be submitted to the Office of the President.

Effectivity

• Legal Principle: The Executive Order takes immediate effect, enforcing compliance from the specified date.
• Effective Date: January 1, 2000.

Key Takeaways

• All LGUs must prepare and submit AIPs detailing the use of the 20% Development Fund.
• Specific priorities for fund usage include infrastructure, health, and agricultural initiatives.
• The DBM will oversee the release of funds based on the approved AIPs, ensuring proper allocation and utilization.
• Regular reviews will ensure accountability and effectiveness in implementing development projects funded by the 20% Development Fund.