t OFFICIAL

# RELEASE
Central buds Mks
REPUBLIC OF THE PHILIPPINES
DEPARTMENT OF BUDGET AND MANAGEMENT
BONCODIN HALL, GENERAL SOLANO STREET, SAN MIGUEL, MANILA

LOCAL BUDGET MEMORANDUM NO. 74 - A

To LOCAL CHIEF EXECUTIVES, MEMBERS OF THE LOCAL

SANGGUNIAN, LOCAL BUDGET OFFICERS, LOCAL
TREASURERS, LOCAL PLANNING AND DEVELOPMENT
COORDINATORS, LOCAL ACCOUNTANTS, AND ALL OTHERS
CONCERNED

Subject ADJUSTED FY 2017 INTERNAL REVENUE ALLOTMENT AND

ADDITIONAL GUIDELINES ON THE PREPARATION OF THE
FY 2017 ANNUAL BUDGETS OF LOCAL GOVERNMENT UNITS

1.0 PURPOSES

1.1 To inform the local government units (LGUs) of their adjusted Internal Revenue
Allotment (IRA) shares for FY 2017 resulting from the adoption of the 2015
Census of Population by Province, City, Municipality, and Barangay, as
approved under Proclamation No. 1269 dated May 19, 2016;1 and

1.2 To prescribe additional guidelines on the preparation of the FY 2017 annual

budgets of LGUs.

2.0 ADJUSTMENT IN THE COMPUTATION AND ALLOCATION OF THE IRA

SHARES OF LGUs FOR FY 2017

2.1 Section 285 of Republic Act (RA) No. 71602 provides, among others, that the
share of each province, city and municipality shall be based on the following
formula: population (50%), land area (25%), and equal sharing (25%).

2.2 By virtue of Proclamation No. 1269 dated May 19, 2016, the 2015 Census of
Population by Province, City, Municipality, and Barangay has been declared
official for all purposes.

2.3 Since the IRA shares of LGUs for FY 2017 under Local Budget Memorandum
(LBM) No. 74 dated June 15, 2016 were computed based on the 2010 Census
of Population approved under Proclamation No. 362 dated March 30, 2012,
there is a need to adjust the computation and allocation of the IRA shares of
LGUs for FY 2017.

2.4 Moreover, the decision of the Sangguniang Panlalawigan of Quezon in the

boundary dispute between the Municipalities of Panukulan and Burdeos, both
of the Province of Quezon, over Barangay Rizal has been upheld pursuant to
the final and executory court decisions in: (i) Civil Case No. 03-0614-M
docketed as Municipality of Burdeos, Province of Quezon, Represented by

Declaring as Official the 2015 Population of the Philippines by Province, City/Municipality, and
Barangay, based on the 2015 Census of Population Conducted by the Philippine Statistics
Authority
2 The Local Government Code of 1991
 Municipal Mayor Jose M. Ayuso vs. Municipality of Panukulan, Province of
Quezon, Represented by Municipal Mayor Herminio A. Penamente; and (ii)
Municipality of Burdeos vs. Province of Quezon, G.R. No. 203213, November
21, 2012. Thus, there is likewise a need to adjust the FY 2017 IRA shares of
the Municipalities of Panukulan and Burdeos, consistent with Section 93,
General Provisions of the FY 2016 General Appropriations Act (RA No. 10717),
that, "All valid adjustments, changes, modifications, or alterations in any of the
factors affecting the computation of the IRA that occurred or happened,
including final and executory court decisions made effective, during the
current fiscal year, shall only be considered and implemented by the DBM
in the subsequent fiscal year from receipt by the DBM of the notice of
said change." (emphasis ours)

2.5 Accordingly, the IRA shares of LGUs for FY 2017 shall be adjusted consistent
with the foregoing. The details by region and by level of LGU are reflected in
Annex A hereof and the LGUs shall be notified of their adjusted individual IRA
allocation by the Department of Budget and Management (DBM) Regional
Offices.

3.0 ADDITIONAL GUIDELINES IN THE PREPARATION OF THE FY 2017 ANNUAL

BUDGETS OF LGUs

3.1 The FY 2017 Annual Budgets of LGUs shall be prepared in accordance with
the procedures and schedules prescribed under RA No. 7160 using the Local
Budget Preparation (LBP) forms. Instructions were added in each of the
following LBP forms for easy reference and proper accomplishment:

3.1.1 LBP Form No. 1 - Budget of Expenditures and Sources of Financing

(Annex B)

3.1.2 LBP Form No. 2- Programmed Appropriation and Obligation by Object

of Expenditure (Annex C)

3.1.3 LBP Form No. 2A - Programmed Appropriation and Obligation for

Special Purpose Appropriations (Annex D)

3.1.4 LBP Form No. 3 - Personnel Schedule (Annex E)

3.1.5 LBP Form No. 4 - Mandate, Vision/Mission, Major Final Output,

Performance Indicators and Targets (Annex F)

3.1.6 LBP Form No. 5 - Statement of Indebtedness (Annex G)

3.1.7 LBP Form No. 6 - Statement of Statutory and Contractual Obligations

and Budgetary Requirements (Annex H)

3.1.8 LBP Form No. 7 - Statement of Fund Allocation by Sector (Annex I)

3.2 In line with the current Administration's priority to eradicate the problem of
illegal drugs in the country, LGUs are hereby enjoined to comply with the
pertinent provisions of RA No. 9165,3 including its Implementing Rules and
Regulations, to wit:

3 Comprehensive Dangerous Drugs Act

 "SECTION 51. Local Government Units' Assistance. — The
LGUs shall appropriate a substantial portion of their respective
annual budgets to assist in or enhance the enforcement of the
Act giving priority to preventive or educational programs and
the rehabilitation or treatment of drug dependents.

(a) Consistent with the principles of local autonomy, the local

sanggunians shall appropriate substantial funds from their
annual budgets to be utilized in assisting or enhancing the
enforcement of the Act, giving priority to educational
programs on drug abuse prevention and control and
rehabilitation and treatment of drug dependents, such
amount to be determined by the sanggunian concerned
based on the perceived need of the locality."

Specifically, LGUs are encouraged to provide funds in their annual budgets

for the : (i) conduct of barangay clearing operations, including rehabilitation
and after care of drug users in coordination with the Department of Health
and the Department of Social Welfare and Development; (ii) establishment
of Special Drug Education Centers; and (iii) strengthening of the criminal
justice system, among others.

3.3 Consistent with the pertinent provisions of Philippine Commission on Women-

Department of the Interior and Local Government-DBM-National Economic
and Development Authority Joint Memorandum Circular (JMC) No. 2016-01
dated January 12, 2016,4 LGUs are enjoined to prepare their respective
Gender and Development (GAD) Plans and Budgets, and to have these
reviewed and endorsed by the appropriate office identified in the said JMC.
Accordingly, Item 2.2.10 of LBM No. 74 is hereby amended to read as
follows:

"2.2.10 Together with the Annual Budget, LGUs shall prepare and
submit their respective Local Disaster Risk Reduction
Management Plans, Local Climate Change Action Plans,
and DILG - endorsed Gender and Development Plan and
Budget."

4.0 All other provisions of LBM No. 74 that are not affected by the provisions of this
LBM shall remain in full force and effect.

5.0 Please be guided accordingly.

C
September 9, 2016
BENJAMIN E. DIOKNO
Secretary

DepanmentofBudget
and Management

4 Amendments to PCW-DILG-DBM-NEDA JMC No. 2013-01: Guidelines on the Localization of the

Magna Carta of Women
CY 2017 IRA OF LGUs
Annex A
(In P0.00)

REGION PROVINCES CITIES MUNICIPALITIES BARANGAYS GRAND TOTAL

NATIONAL CAPITAL REGION 382,730,428.00 21,175,869,790.00 121,992,871.00 8,575,720,633.00 30,256,313,722.00

CORDILLERA ADMINISTRATIVE REGION 4,779,320,055.00 1,539,513,245.00 6,470,087,590.00 2,081,388,745.00 14,870,309,635.00
REGIONAL OFFICE NO. I 6,199,467,106.00 3,756,693,458.00 10,575,842,254.00 5,944,209,915.00 26,476,212,733.00
REGIONAL OFFICE NO. II 6,726,153,636.00 3,563,447,869.00 10,430,459,953.00 4,148,874,773.00 24,868,936,231.00
REGIONAL OFFICE NO. III 11,908,760,638.00 8,610,453,630.00 16,912,630,997.00 9,182,423,681.00 46,614,268,946.00
REGIONAL OFFICE NO. IV.A 13,336,865,159.00 13,775,480,671.00 16,632,155,972.00 11,824,780,475.00 55,569,282,277.00
REGIONAL OFFICE NO. IV.B 6,051,679,844.00 2,771,131,241.00 9,283,767,773.00 3,047,438,068.00 21,154,016,926.00
REGIONAL OFFICE NO. V 7,736,953,334.00 3,582,023,615.00 12,045,563,614.00 6,565,357,032.00 29,929,897,595.00
REGIONAL OFFICE NO. VI 8,628,382,775.00 9,986,960,802.00 12,277,146,050.00 8,092,571,900.00 38,985,061,527.00
REGIONAL OFFICE NO. VII 6,888,925,703.00 9,577,729,160.00 10,893,071,016.00 7,007,022,973.00 34,366,748,852.00
REGIONAL OFFICE NO. VIII 7,005,357,030.00 4,932,683,465.00 11,403,078,448.00 6,703,570,036.00 30,044,688,979.00
REGIONAL OFFICE NO. IX inc. ARMM 7,169,139,321.00 5,210,269,393.00 10,949,890,563.00 5,508,966,309.00 28,838,265,586.00
REGIONAL OFFICE NO. X 6,016,473,763.00 7,074,937,397.00 8,584,329,339.00 4,523,724,491.00 26,199,464,990.00
REGIONAL OFFICE NO. XI 5,577,544,492.00 7,491,749,768.00 6,770,701,039.00 3,771,433,035.00 23,611,428,334.00
REGIONAL OFFICE NO. XII inc. ARMM 9,758,621,565.00 4,304,737,989.00 15,626,330,866.00 6,415,797,200.00 36,105,487,620.00
REGIONAL OFFICE NO. XIII 5,173,095,329.00 4,171,847,889.00 6,961,235,919.00 2,688,441,910.00 18,994,621,047.00

GRAND TOTAL 113,339,470,178.00 111,525,529,382.00 165,938,284,264.00 96,081,721,176.00 486,885,005,000.00

LB.P form No.1 Annex B

BUDGET OF EXPENDITURES AND SOURCES OF FINANCING

LGU:

GENERAL FUND

Current Year Appropriation

Particulars Income Past Year
Account Code Budget Year
Classification (Actual) First Semester Second Semester (Proposed)
(Actual) Total
(Estimate)
1 2 3 4 5 5 7 8
I. Beginning Cash Balance
II. Receipts
A. Local Sources
1. Tax Revenue
Real Property Tax (RPT)
I. Basic RPT
IL Special Education Fund
Business Tax
C. Other Local Tax
Total Tax Revenue
2. Non-Tax Revenue
Regulatory Fees
Service/ User Charges
Receipts from Economic Enterprise
Other Receipts
Total Non-Tax Revenue
Total Local Sources
B. External Sources
1. Internal Revenue Allotment
2. Share from GOCCs (PAGCOR and PCSO)
3. Other Shares from National Tax Collection
Share from Ecozone
Share from EVAT
Share from National Wealth
Share from Tobacco Excise Tax
4. Inter-Local Transfer
5. Extraordinary Receipts/Grants/Donations/Aids
Total External Sources
C. Non-Income Receipts
1. Capital Investment Receipts
Proceeds from Sale of Assets
Proceeds from Sale of Debt Securities of Other Entities
Collection of Loans Receivable
Total Capital Investment Receipts
2. Receipts from Loans and Borrowings
Acquisition of Loans
Issuance of Bonds
Total Receipts from Borrowings and Loans
Total Non-Income Receipts
Total Receipts
III. Expenditures
Personal Services
Salaries and Wages
Salaries and Wages - Regular
Other Compensation
Personal Economic Relief Allowance (PERA)
Personnel Benefit Contributions
Other Personnel Benefits

atl
 Maintenance and, Other Operating Expenses
Traveling Expenses
Training and Scholarship Expenses
Supplies and Materials Expenses
Utility Expenses
Communication Expenses
Awards/Rewards Expenses
Survey, Research, Exploration and Development Expenses
Demolition/Relocation and Desilting/Dredging Expenses
Generation, Transmission and Distribution Expenses
Confidential, Intelligence and Extraordinary Expenses
Professional Services
General Services
Repairs and Maintenance
Financial Assistance / Subsidy
Financial Expenses
Capital Outlays
Investment Property
Land and Buildings
Property, Plant and Equipment
Land
Land Improvements
Biological Assets
Intangible Assets
Special Purpose Appropriations (SPAs)
Appropriation for Development Programs/Projects (20% Development Fund)
Appropriation for Local Disaster Risk Reduction and Management (LDRRM)
Programs/Projects (5% LDRRM Fund)
Appropriations for Debt Service
Advances/Loans to Local Economic Enterprises/Public Utilities
Aid to barangays
Other Authorized SPAs
Total Expenditures
IV. Ending Balance

We hereby certify that the information presented above are true and correct. We further certify that the foregoing estimated receipts are reasonably projected as collectible for the Budget Year.

Local Treasurer Local Budget Local Planning Local Accountant

Officer Development
Officer

Approved:

Local Chief Executive

INSTRUCTIONS '

Column 1 — Indicate the receipts by major source. The beginning cash balance shall be net of amounts earmarked for specific purposes (e.g., continuing appropriations, 20% Development Fund).

Column 2— Indicate the account code for each itemized receipt using the Revised Chart of Accounts for LGUs, as prescribed under Commission on Audit Circular No. 2015-009 dated December 1, 2015.

Column 3— Classify the income into regular (R) or non-regular (NR).

Column 4- Indicate the past year's actual receipts and expenditures. The past year's and the first two quarters of the current year's actual receipts and expenditures shall be jointly certified by the Local Treasurer and the Local Accountant,

Columns 5 and 6 — Indicate current year's estimated receipts and expenditures, as follows:
First semester — actual receipts and expenditures jointly certified by the Local Treasurer and the Local Accountant.
Second semester — estimated receipts and expenditures prepared by the Local Budget Officer.

Column 7 — Indicate the totals of the amounts under Columns Sand 6.

Column 8— Indicate the proposed amount of receipts and expenditures for the budget year.

Notes:
Prepare the same form for each local economic enterprise/public utility.
Based on the Bureau of Local Government Finance Memorandum Circular No. 16-2015 dated June 19, 2015 re Local Public Financial Management (PFM)
Tools for the Electronic Statement of Receipts and Expenditures (which include the Guidebook for the New Local Government Financial Performance
Monitoring System), regular revenues refer to taxes, fees and receipts actually realized, including the IRA and other shares provided for in Sections 284, 290
and 291 of RA No. 7160, but exclusive of non-recurring receipts such as national aids, grants, financial assistance, loan proceeds, sales of assets,
miscellaneous income/receipts and other similar receipts.

IrAi
 LBP Form No. 2 Annex C

PROGRAMMED APPROPRIATION AND OBLIGATION BY OBJECT OF EXPENDITURE

LGU:
Office:

Current Year (Estimate)

Object of Expenditure Past Year Budget Year
Account Code First Semester Second Semester
(Actual) Total (Proposed)
(Actual) (Estimate)
.1 2 3 4 5 0 7

Personal Services
Salaries and Wages
Salaries and Wages - Regular
Other Compensation
Personal Economic Relief Allowance (PERA)
Personnel Benefit Contributions
Other Personnel Benefits
Maintenance and Other Operating Expenses
Traveling Expenses
Training and Scholarship Expenses
Supplies and Materials Expenses
Utility Expenses
Communication Expenses
Awards/Rewards Expenses
Survey, Research Exploration and Development Expenses
Demolition/Relocation and Desilting/Dredging Expenses
Generation, Transmission and Distribution Expenses
Confidential, Intelligence and Extraordinary Expenses
Professional Services
General Services
Repairs and Maintenance
Financial Assistance / Subsidy
Financial Expenses
Capital Outlays
Investment Property
Land and Buildings
Property, Plant and Equipment
Land I
Land Improvements
Biological Assets
Intangible Assets
Total Appropriations

Prepared: Reviewed: Approved:

Department Head Local Budget Officer Local Chief Executive
INSTRUCTIONS

This form is intended to reflect the following:

Column 1 — Indicate the applicable Objects of Expenditures. Indicate under Financial Expenditures whether the amounts represent bank charges, interest expense, commitment charges, documentary stamp expense
and other financial charges, losses incurred relative to foreign exchange transactions and debt service subsidy to GOCCs consistent with NGAs.

Column 2 — Indicate account code using the Revised Chart of Accounts for LGUs, as prescribed under Commission on Audit Circular No. 2015-009 dated December 1, 2015.

Column 3 — Indicate the actual expenditures incurred in the Past Year.

Columns 4 and 5 — Indicate current year's expenditures, as follows:

First semester — actual expenditures as certified by the Local Accountant.
Second semester — estimated expenditures prepared by the Department Head
The totals of this column for all Departments/Offices should tally with the amount of Expenditures per Columns 5 and 6 of LBP Form No. 1.

Column 6 — Indicate the totals of the amounts under Columns 5 and 6.

Column 7 — Indicate the proposed expenditures for the budget year.

Note: The Local Budget Officer shall prepare a summary for all offices using LBP Form No. 1.

/-tii
LBP Form No. 2a Annex D

Programmed Appropriation and Obligation for Special Purpose Appropriations

LGU:

AIP Reference Code Sector Current Year Budget Year

Program/Project/Activity Past Year (Actual)
Actual Estimate (Proposed)
1 2 3 4 5 6 7

Prepared: Reviewed: Approved:

Department Head Local Budget Officer Local Chief Executive

This form is intended to reflect the details of Special Purpose Appropriations lodged under each Department/Office.

f"-q!
LBP Form No. 3 Annex E

Personnel Schedule CY
LOU:

Item Number Current Year Authorized Budget Year Proposed

Position Title Name of Incumbent Rate/Annum Rate/Annum Increase /
Old New SG/Step Amount Decrease
SG / Step Amount
1 2 3 4 5 6 7 8 9

Prepared: Reviewed: Approved:

Department Head Human Resource Management Officer Local Chief Executive

INSTRUCTIONS

Columns 1 and 2— Indicate the old and new item numbers of the plantilla position.

Columns 3 and 4 — Indicate the position title and the name of the incumbent occupying each position. If the position is unfilled, indicate the word "vacant" under column 4. If the position is proposed
for abolition, place the position title inside a bracket. If the position is proposed for reclassification, place the previous position title in a bracket and indicate the proposed position title below it.

Column 5 and 6— Indicate the current salary grade/step and corresponding rate per annum of each position. Include as a footnote the compensation law/circular being implemented. For the initial
implementation of changes, attach a copy of the Position Allocation List.

Column 7 & 8 — Indicate the salary grade/step and corresponding rate per annum of each position proposed for the budget year.

Column 9 — Indicate the difference between the old and the new rates of compensation per annum for the budget year.

Notes:
Prepare the same form for each local economic enterprise/public utility.
Separate plantilla using the same format shall be prepared for Casual Employees whose salaries are chargeable against Personal Services Appropriation.
Only funded vacant positions shall be included in the plantilla. All unfunded vacant positions shall be removed/deleted from the plantilla.
LBP Form No. 4 Annex F

Mandate, Vision/Mission, Major Final Output, Performance Indicators and Targets CY

LGU:
Mandate
Vision
Mission
Organizational Outcome

Program/Project/Activity Performance / Output

AIP Reference Code Major Final Output Target for the Budget Proposed Budget for the Budget Year
Description Indicator Year
1 PS MOOE CO Total
2 3 4 5 6 7 8 9

Prepared: Reviewed: Local Finance Committee

Department Head Local Planning and Development Coordinator Local Budget Officer Local Treasurer

Approved:

Local Chief Executive

INSTRUCTIONS

Mandate: Quote the provision of the LGC on the mandate of the Department/Office.
Vision: Indicate the future role of the department/office in the LGU's development.
Mission: Indicate the significant role of the department/office in attaining the vision.
Organizational Outcome: The specific short-term benefits to clients and the community as a result of the LGU's delivery of Major Final Outputs as defined in the
organization's results framework.

Column 1-Indicate the PPA reference code reflected in the AIP corresponding to each PPA.

Column 2- Indicate a concise description of the work to be done under a particular sector to achieve specific objectives.

Column 3- Indicate the good or service that a department/agency Is mandated to deliver to external clients through the Implementation of PPAs.

Column 4- Indicate the means for measuring the quantity, quality and timeliness of service delivery to the clients.

Column 5- Indicate the target for the budget year in terms of the performance indicator expressed In quantity, quality and timeliness.

Columns 6,7,8 & 9— Indicate the proposed budget for the PPA, broken down by expense class - Personal Services (PS), Maintenance and Other Operating Expenses (MOOE) and Capital Outlay (CO),
Including Special Purpose Appropriations attributed to and implemented by the Department/Office.

Note: This Form shall be prepared by the Department Head, reviewed by the Local Planning and Development Officer, for the targets and the Local Budget Officer,
for the proposed budget and approved by the Local Chief Executive.
 Annex G
LBP Form No. 5

Statement of Indebtedness
LGU:

Date Principal Previous Payments Made Amount Due

Creditor Term Purpose Balance of the
Contracted Amount (Budget Year)
Principal Interest Principal
Total Principal Interest Total
1 2 3 4 5 6 7 8 9 10 11 12

Certified Correct: Noted by:

Local Accountant Local Chief Executive

INSTRUCTIONS

This form is intended to reflect the following:

Column 1 — Full name of creditors with their corresponding addresses under each fund/special account and under each office.

Column 2— Date when the obligation is incurred.

Column 3— Period (months/years) within which to pay the loan.

Column 4— Principal amount of the loan.

Column 5 — Purpose of the loan incurred.

Columns 6, 7 & 8 — Total payments prior to budget year, including payments within the current year.

Columns 9, 10 & 11 — Amounts due and budgeted for the budget year.

Column 12 — Balance of the principal after deducting previous payments and amount due for the budget year (Columns 6-11).

Note: Prepare the same form for each local economic enterprise/public utility.

.fr
 Annex H
LBP Form No. 6
Statement of Statutory and Contractual Obligations and Budgetary Requirements CV
LGU:

Description Amounts
1 2

Statutory and Contractual Obligations

1.1 5% MMDA Contribution for LGUs in NCR only (R.A. No. 7924)
1.2 Retirement Gratuity
1.3 Terminal Leave Benefits
1.4 Debt Service
1.5 Employees Compensation Insurance Premiums
1.6 PhilHealth Contributions
1.7 Pag-IBIG Contribution
1.8 Retirement and Life Insurance Premiums
Budgetary Requirements
2.1 20% of IRA for Development Fund
2.2 5% Local Disaster Risk Reduction and Management
2.3 Financial Assistance to Barangays (Php 1,000.00 minimum aid)
TOTAL

Certified Correct:

Local Budget Officer Local Treasurer Local Planning and

Development Coordinator

Approved:

Local Chief Executive

This form presents the statutory and contractual obligations, and budgetary requirements.

Prepare the same form for each local economic enterprise/public utility.
 Annex I
LBP Form No. 7
Statement of Fund Allocation by Sector CY
LGU:

Particulars General Public

Account Code Social Services Economic Services Other Services Total
Services
1 2 3 4 5 6 7

TOTAL APPROPRIATIONS

Certified Correct: Approved:

Local Budget Officer Local Accountant Local Chief Executive

INSTRUCTIONS

The Statement of Fund Allocation is a summary of appropriations covering the proposed expenditures of the budget year.

Indicate all allocations by sector/service, inclusive of lump-sum appropriations for 5% Disaster Risk Reduction Management Fund, 20% Development Fund, Aid to Barangays
and Financial Expenses.

Column 2- Indicate account code using the Revised Chart of Accounts for LGUs, as prescribed under Commission on Audit Circular No. 2015-009 dated December 1,2015.

Columns 3-6 - The classification of PPAs that should fall within a sector shall follow these guidelines:

Column 3: Public Service Sector - All PAPs that provide planning, financial, administrative, legal and legislative services to the front-line services of the LGUs shall be
categorized within this sector.

Column 4: Economic Services Sector - All PAPs directed towards promoting growth in the economy, using all factors in production, like increasing productivity in agriculture
and all other industries, generating employment and other livelihood projects, shall fall within this sector.

Column 5: Social Services Sector - All PAPs that promote the well-being and general welfare of constituents or people like education, health, public safety,
and protection of the marginalized and disadvantaged members of the society, shall be classified within this sector.

Column 6: Other Services - PAPs that cannot be categorized In any of the sectors identified above

Note: Prepare the same form for each local economic enterprise/public utility.