Fiscal transfers to local government units (LGUs) could double next year through programs that provide incentives for improved performance, the Budget department said on Friday.
In particular, allocations for Bottom-up Budgeting (BUB) and the Konkreto at Ayos na Lansangan at Daan Tungo sa Pangkalahatang Kaunlaran or KALSADA program will likely rise given initiatives to improve LGU governance.
This year, a total of P24.7 billion has been allocated for 14,325 BUB projects. For KALSADA, a road rehabilitation program being implemented in 73 provinces, P6.5 billion has been set aside in the 2016 national budget.
“Funding for a BUB project could increase up to P40 million. The allocation for KALSADA could increase to P30 billion or up to P40 billion,” Budget Secretary Florencio Abad said in a statement.
This means that allocations for both programs could reach up to P80 billion in 2017 from the P31.2 billion total this year.
Abad said meaningful devolution was being institutionalized as the release of funds under BUB and KALSADA was conditional on LGU compliance with good governance standards.
These conditions include securing the Local Government department’s Seal of Good Financial Housekeeping and submission of Local Public Financial Management Assessment Reports to the Budget department.
“This is not about giving LGUs substantial amounts of funds. This is about strengthening the capacity of LGUs to implement projects and improving governance at the local level,” Abad said.
“The good governance criteria of BUB and KALSADA are making this possible,” he claimed.
Abad also said that increasing the funds for BUB and KALSADA would be vital in sustaining the economy’s growth momentum.
“To meet the growth target for 2016, the government is making sure that infrastructure projects will be implemented on time. This includes the completion of all construction and upgrading of national roads and bridges, which will improve road transport, spur trade and tourism development as well as the construction of needed facilities such as health centers, classrooms, water and sanitation and power supply facilities,” he said.
“By enabling LGUs to provide basic social services, improve disaster preparedness and build local roads, we will make them better partners in sustaining the growth momentum.”