1. C OORDINATION C OMMITTEE ON D ECENTRALIZATION (CCD) POLICY UPDATES As of 9 th CCD Meeting held last July 18, 2011

2. A DVISORY TO LGU ON THE D ECREASE ON IRA FOR 2012 Background The internal revenue allotments (IRA) in 2012 (and also 2013 and possibly 2014) will fall by 4.8% in nominal term or more than 10 % in real terms due to the significant decline in internal revenue collection in 2009 (by more than 1.4 percentage points of GDP relative to 2008). This significant decline will likely to affect the fiscal position of many poor local government units, which rely heavily on the IRA for their spending needs and may have impact on local development.

3. DBM L OCAL B UDGET M EMORANDUM (LBM) N O.65, DATED J UNE 27, 2011 LGUs are informed on that IRA for 2012 P273.310B which is P13.635B or 4.8% lower than the FY 2011 IRA level LGUs are encouraged to align their PPAs to the following priority areas under EO 43 dated May 13, 2011: Anti-corruption, Accountable and Participatory Governance Poverty Reduction and Empowerment of the Poor and Vulnerable Rapid, inclusive and Sustained Economic Growth Just and Lasting Peace and the Rule of Law Integrity of the Environment and Climate Change Adaptation and Mitigation

4. IRA Computation for 2012 took into consideration the following: FY 2007 NSO Census of Population per Proclamation Order No.."1489 dated April 16, 2008. Continued adoption of the FY 2001 Master list of Land Area submitted by the Department of Environment and Natural Resources- Land Management Bureau pursuant to the Oversight Committee on Devolution Resolution No.1, s.2005 dated September 12, 2005. Abolition of the Dinagat Islands as a province pending the issuance of an entry of judgment by the Supreme Court (SC) in G.R. No. 180050 dated April12, 201 Reversion of the sixteen (16) cities to Municipalities pending the issuance of an entry of judgment by the Supreme Court in the consolidated cases in G.R. Nos. 176951, 177499 and 17805 DBM L OCAL B UDGET M EMORANDUM (LBM) N O.65, DATED J UNE 27, 2011

5. A PPROPRIATION AND U TILIZATION OF 20% OF IRA FOR D EVELOPMENT P ROJECTS Background Section 287 of the Local Government Code, which provides that each LGU should appropriate in its annual budget no less than 20% of its Internal Revenue Allotment (IRA) specifically for development projects DILG-DBM JMC is meant to inform and enlighten the public and local officials on the proper use of their 20% development funds derived from their IRA DILG-DBM JMC is in response to reports we received from COA on the misuse of the 20% development funds for LGUs DILG-DBM JMC get not very positive reaction from Cavite Mayor Strike Revilla, the president of the League of Municipalities of the Philippines

6. A PPROPRIATION AND UTILIZATION OF 20% OF IRA FOR D EVELOPMENT P ROJECTS Revision in the policy include following amendments: Inclusion of the definition of development projects ; General Policies in the use of the 20% of the IRA for development projects along 3 sectors/areas: social development, economic development and environmental management. Inclusion of a catch all phrase for the projects allowed to be funded in each of the sector

7. A PPROPRIATION AND U TILIZATION OF S PECIAL E DUCATION F UND (SEF) Background SEF Guidelines was issued to address the dire state of basic education, and the need to ensure that all sources of financing for the sector are used efficiently and effectively to improve education outcomes

8. A PPROPRIATION AND U TILIZATION OF S PECIAL E DUCATION F UND (SEF) In the revised guidelines, the DepEd seeks inclusion of the following to be allowed to be under SEF: Payment of salaries/ wages and other authorized allowances of school teachers hired in connection with the conduct of extension classes and those assigned to public elementary and secondary schools Payment of salaries/ wages of utility workers and security guards which are deemed necessary for the proper functioning of public elementary and secondary schools subject to DBM staffing standards; School-based feeding program in schools with high incidence of malnutrition.