REVISITING THE BOTTOM-UP BUDGETING PROCESS IN THE PHILIPPINES:

ISSUES, FINDINGS AND RECOMMENDATIONS

Rachael Reyes-Moralde, Ronnel Ubungen and Kenneth L. Armas

Nueva Ecija University of Science and Technology
sir.kennetharmas@gmail.com/rachaelmoralde@gmail.com

ABSTRACT

The Bottom-up Budgeting (BuB) approach was set up to help the Philippines attain its
Millennium Development Goals of inclusive growth and poverty reduction, all while promoting
good governance at the local level. This is done by increasing citizens’ access to local service
delivery via demand-driven budget planning process. The Province of Nueva Ecija is one of
the provinces in Region 3 which benefitted from BuB starting FY 2014 to 2016. The May
2016 national election resulted to major reforms in the priority programs of the current
administration which bring about the transition from BuB to Assistance to Disadvantaged
Municipalities (ADM) Program.

In the hope of gaining lessons from the experiences in the BuB program, the researchers
revisited the program implementation in the 1st district of Nueva Ecija. The findings and lessons
of the BuB implementation from FY 2014-2016 in selected municipalities (Cuyapo, Aliaga,
Sto. Domingo, Quezon and Nampicuan), will serve as a basis and an effective tool in enhancing
ADM Program as the current Grassroots Participatory Planning Process being utilized by the
Duterte Administration.

The study aimed to provide the policy maker with an analysis of the trends observed
in BuB implementation which will be used as a basis to enhance ADM Program. The researchers
employed descriptive-qualitative method of research particularly in assessing the policies and
processes of BUB and ADM Program.
To further promote a participative and transparent good local governance, there is a need to
expand the participation of Civil Society Organizations (CSOs) in Local Development
Council and enhance their technical capacities in the pursuit of a more responsive and
empowered ADM Program.

Keywords: Bottom-Up Budgeting, Budgeting Process, Philippine Government, Public Fiscal

Administration

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I. INTRODUCTION

Poverty has always been a socio-economic issue in the Philippines and that local
government units are at the forefront in the fight against poverty. Their capacity to respond to this
problem is strengthened by the implementation of RA 7160 (Moralde, 2009).

Most local government units in the Philippines have gained awareness of their poverty
situation and are beginning to understand how to relate their choice of solutions to the nature and
their understanding of their development needs. These LGUs are engaging in solutions to their
development needs. There is a realization and increase appreciation of the link between poverty
issues and development planning and budgeting at the barangay level. ( Ilago and Lopos,2006).
Ilago and Lopos (2006) continued by saying that government budgets represent the hard evidence
of public policy, as they define the matching of public money with what are considered as
priorities and preferences of the public.

It is not uncommon among countries to engage in policy making during adversity, (Dror,
Y. 1998). In pursuit of attaining the Philippine Development Plan's goal of inclusive growth and
poverty reduction, and promoting good governance at the local level, the Human Development
and Poverty Reduction Cluster (HDPRC) implemented the Bottom-up Budgeting program.
It seeks to increase citizens' access to local service delivery through a demand-driven budget
planning process and to strengthen government accountability in local public service provision.
The BuB Oversight Agencies include Department of Budget and Management (DBM),
Department of the Interior and Local Government (DILG), Department of Social Welfare and
Development (DSWD), National Anti-Poverty Commission (NAPC) and National Economic
Development Authority (NEDA). They were tasked to ensure the smooth implementation of
priority poverty reduction projects as identified at the city/municipal level through the BuB
participatory planning and budgeting process. Also, they were responsible for setting policies
and overseeing the over-all program implementation starting from the planning phase up
to the monitoring and evaluation phase.

The BuB process is one of the major reform initiatives of the Aquino administration. It
makes national government budgeting process more responsive to local needs and it opens
another avenue for people’s participation in local planning and budgeting and for generating
demand and incentives for good governance at the local level. It is an approach to the
preparation of national government’s budget proposals which includes the development needs of
LGUs as identified in their respective Local Poverty Reduction Action Plan (LPRAP). LPRAP
refers to the plan formulated by the LGU with the strong participation of CSOs which contains
programs and projects which will directly address the needs of the poor constituencies and the
marginalized sectors of the society.

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 The BUB approach is guided by three (3) principles: convergence, participation, and
empowerment. It aims to achieve community empowerment by encouraging citizens to take active
roles in the community by articulating their needs to the government and determining what projects
are responsive to their needs. The process will also stimulate partnership between Local
Government Unit (LGU) and CSO in local development planning and budgeting. The result
of all the local planning and budgeting is the convergence of plans and priorities as projects
are harmonized at the national level by NGAs in their programs and budget for implementation.
The process of participatory budgeting was also initiated and adopted in Brazil and its positive
impact was noticed in terms of improvement in the accessibility and quality of various public
welfare amenities (Bhatnagar,D.,Rathore, A., Torres, M and Kanungo, P. Nov. 2002).

The Province of Nueva Ecija is one of the provinces in Region 3 which benefitted from
BuB starting FY 2014 to 2016. According to Secretary Abad of DBM, the province received Php
217,431,217.04 in 2014, Php 343,079,384.17 in 2015 and Php 422,097,624.64 in
2016. This budget was used to fund 112 projects in 2014, 174 projects in 2015 and 193 projects in
2016 in the entire province. With this substantial amount of money, President Aquino
emphasized that the agenda of inclusive development through good governance could only be
realized by empowering citizens in governance. As he articulated in his Budget Message for
fiscal year 2013, empowerment “means recognizing their power over their own government. It
means giving them back that power, and, together with them, shaping the destiny of our nation
(Aquino, 2012). This policy statement of President Aquino was further articulated through
subsequent issuances like the DBM-DILG-DSWD-NAPC Joint Memorandum Circular No 2,
Series of 2012, December 19, 2012 stipulating the guidelines for the implementation and
monitoring of bottom-up budgeting projects in FY 2013. Par 2, of said memo circular states that
“....this shall ensure the inclusion of the funding requirements for the development needs of
poorest/focus cities and municipalities in the budget proposals of participating agencies. This
initiative will also make the planning and budgeting process of both local and national
governments more participatory through the genuine involvement of grassroots organizations and
communities, strengthening the convergence of the delivery of national services in the
community”.

The Traditional Planning Process

It has been the practice in the past that the General Appropriations Act (GAA) was crafted
using top-bottom approach with government officials at the national level deciding where public
funds should go. (Manuel, G.2015). The LDCs then were required to formulate Public
Investment Programs (PIPs) as provided by Title Six, Section 109 of Republic Act 7160 or the
Local Government Code of 1991. These plans are then submitted to Regional Development
Councils for consideration in the NGAs' budgets. However, in such a system, the PIPs often arrive

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too late to be integrated in the national budget, most often arriving in July when the President
already submitted the General Appropriations Act to Congress by June.

Despite more than two decades of implementation of R.A. 7160, LGUs still face various
challenges in the exercise of devolved service delivery functions related to health, education,
environment, livelihood, agriculture, and infrastructure. Foremost among these is the raising of
sufficient funds for local development. However, Ilago and Lopos (2006) noted that some
barangays have began to reform their development plans to reflect more results of their poverty
incidence monitoring surveys. Some have decided to allocate their scarce funds for identified
projects or to source support from the municipal government as well as outside.

Consistent with the general policy to provide a “catch-up mechanism” that will assist LGUs
in increasing citizen’s access to basic facilities in their respective areas of jurisdiction,
BuB Program has been implemented to provide an allocation that will allow LGUs to identify
projects that will be funded by the national government. Cognizant of the need to provide further
support to LGUs to enable them to fully carry out functions devolved to them while at the same
time, building their capacity towards genuine fiscal autonomy, national government has scaled up
its efforts to ensure meaningful devolution through BuB. The program is meant to empower
our grassroots communities and their respective local governments by allowing LGUs to directly
implement projects instead of coursing them through the agencies. This also strengthens the link
of accountability between the LGUs and their constituents. Public participation gives people
from the margins of society a voice to influence budgeting and governance in general,
making these more responsive to their needs; enhances good governance practices as it
makes budgeting more transparent and accountable; and, ultimately, improves the
effectiveness of the delivery of services. (Thindwa, 2004). The fight against Martial Law and
the restoration of democracy in 1986 brought about the broadening of civil society, and a
constitutional recognition of the importance of their participation in governance (Magno,
2015). In addition, the government enacted key laws, such as the Local Government Code and
the Government Procurement Reform Act, which established participation of CSOs in various
governance areas. These include restoration of the formal democratic forms, structures, and
processes. NGO involvement in development processes has increased dramatically in the
Philippines. (Brillantes, A.1998. On the other hand, Korten, 1990 as cited by Brillantes, 1998,
emphasized that step by step, we have moved to a recognition that government, business, voluntary
organizations all have essential roles in development (including) people’s organizations.

Transition from BuB to Assistance to Disadvantaged Municipalities Program

The transition from Aquino to Duterte Administration in June 2016 resulted to major
reforms in the priority programs and national thrust. The BuB appear to have been
restructured in the 2017 DILG budget proposal which is called Assistance to

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Disadvantaged Municipalities (ADM) Program. ADM seeks to equitably assist
municipalities in the delivery of basic services by providing financial subsidy for the
implementation of their priority programs and projects. The program aims to contribute to the full
attainment of empowered, responsible and responsive LGUs by becoming more able partners in
national development. Moreover, it is designed as an equalization program that will address
financial and infrastructure gaps in municipal governments. The projects eligible for ADM
includes the eight (8) basic infrastructure that are most needed in municipalities – Local Access
Road, Potable Water System Project, Evacuation Center and Disaster Risk Reduction Related
Equipment, Small Water Impounding Project, Sanitation and Health Facilities, Local Bridges,
Rain Water Catchment Facility and Municipal Drug Rehabilitation Facility.

In view of the given scenario, there is a need to evaluate and analyze the BuB
implementation from FY 2014-2016 in selected municipalities from the 1st District of
Nueva Ecija which will serve as a basis and an effective tool in enhancing ADM Program as the
current Grassroots Participatory Planning Process being utilized by the Duterte Administration.

OBJECTIVES OF THE STUDY

Toward gaining an initial, in-depth qualitative study of the BUB process, the study aims
to provide the policy maker with an analysis of the trends observed in BuB implementation
which will be used as a basis for an enhanced Grassroots Participatory Planning Process.

Specifically, it aims to examine how the key steps in the planning and prioritization of
projects under BuB cycle are implemented on the ground in terms of extent of participation
of CSOs and to provide insights on areas for further improvement or enhancement of
guidelines/policy for the subsequent implementation of projects under ADM Program. In this
sense, the study is focused on the process rather than on the outcomes of the BUB. Moreover,
it seeks to:
st
1. Review the implementation of the BuB and ADM in five (5) municipalities in the 1
District of Nueva Ecija;
2. Determine the effectiveness of the BuB implementation in terms of process and
policies
3. Determine the best practice and challenges encountered in the implementation
of BuB; and
4. Present recommendations based on the learnings derived from BuB process to
further improve the implementation of ADM.

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CONCEPTUAL FRAMEWORK

Figure 1 shows the framework employed by the researchers in the conduct of study. The
implementation of BuB FY 2014-2016 projects and ADM FY 2017 projects and their processes
will be evaluated, assessed and compared to come up with the enhanced Grassroots
Participatory Planning Process in the succeeding years of implementation. The inputs
considered were the number and type of projects implemented and the amount of BUB
funds generated. The process entails the assessment of the policies and processes of
implementation of BUB and ADM Program. Moreover, best practices, challenges and
constraints being encountered during the implementation phase will be given emphasis to further
develop and enhance the process of implementation of ADM in the coming years.

Figure 1: Conceptual Paradigm

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II. METHODOLOGY

The researchers employed descriptive-qualitative method of research particularly in

assessing the policies and processes of BUB and ADM Program. A process review and
comparative analysis were also employed in this study. The data are primarily qualitative and
analysis is highly descriptive. The process of BUB and ADM implementation were assessed by
comparing the LGUs’ implementation process with the guidelines set by appropriate authority.
To examine the effectiveness of the LGU in its implementation, physical status as well as the
financial status of projects were the primary focus. Moreover, the LGU’s best practices,
challenges and constraints encountered in the implementation of BuB and ADM were given an
emphasis.

SAMPLE AND SAMPLING DESIGN

Five (5) LGUs were selected representing each income classes (1st, 2nd, 3rd, 4th and 5th)
from the 1st Congressional District of Nueva Ecija. The said district was purposively
selected as the location of this study since this is the only district among the four (4) Congressional
District in Nueva Ecija that all LGUs are all classified as municipalities. Other districts
have one (1) or two (2) LGUs that are categorized as city/cities. The LGUs selected per class
are shown in Table 1.

Table 1. Selected LGUs from 1st District of

Nueva Ecija according to Income Class

LGU Income Class Municipalities

1st Cuyapo
2nd Aliaga
3rd Santo Domingo
4th Quezon
5th Nampicuan

METHOD OF DATA COLLECTION

The researchers administered questionnaires to Municipal Local Government Operations

Officers (MLGOOs) assigned in the identified LGUs. The primary data were about the budget
received from NGAs, physical and financial status of projects, and the type of projects
implemented under BuB FY 2014-2016 and ADM FY 2017. Secondary data were gathered from
different records and from existing Joint Memorandum Circulars (JMCs) to provide additional
support for the needed information.
Moreover, Focus Group Discussion (FGD) were conducted to those who were involved
in the project implementation. The researchers had an interview with CSOs to identify the extent
of their involvement in the whole process of implementation of BuB and ADM.

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III. RESULTS AND DISCUSSION

The implementation of BuB FY 2014-2016 projects and ADM FY 2017 projects and their
processes were evaluated, assessed and compared to the provision of the JMCs to come up with
the enhanced Grassroots Participatory Planning Process.

Understanding the Implementation Process of Bottom-up Budgeting

As cited by Manasan (May 2016), BuB was introduced with the issuance of DBM-DILG-
DSWD-NAPC Joint Memorandum Circular (JMC) No 1 in March 2012 in time for the preparation
of the 2013 National Expenditure Program. The BuB aims to make planning and budgeting
processes at the national and local level more participatory through the genuine involvement of
grassroots organizations and communities. The BuB process was designed to have various
components to ensure that there is sufficient data and technical assistance to guarantee anti-poverty
projects proposed are genuinely responsive to the poverty situation of the marginalized sector of
community. It was also designed to involve the CSOs of a locality in the planning of effective
programs because they will be able to articulate the reality of poverty in the localities and identify
their needs to alleviate poverty in multiple dimensions. Each step was designed to ensure that there
is sufficient data input, genuine participation, and communal reflection on possible solutions
to their poverty.

Figure 2. Process Flow of Bottom-Up Budgeting

Figure 2 shows the process flow of BuB from planning process to monitoring and
evaluation of projects. DILG and NAPC were the lead agencies assigned in organizing the
implementation scheme at the local level. In the implementation of BuB, the process entails the
following steps:

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1. Preparation for Planning and Budgeting

Beginning with the preparation of the proposed budget of the ensuing year, the process required
the conduct of city or municipal CSO Assemblies to be facilitated by the DILG and NAPC. The
schedule of the CSO Assembly should be announced and properly disseminated. The Assemblies
included an orientation on the role of CSOs in local governance and the rationale and
process of the BuB; the election of LPRAT representatives; a poverty situation analyses,
among others.

2. Identification of Poverty Reduction Programs

• The LPRAT is assembled to spearhead the formulation of the LPRAP.

• Specific poverty reduction strategies should be undertaken, targeting issues such as hunger,
job generation, climate change and provision of basic social services.
• The LPRAT shall also identify priority poverty reduction projects that reflect the
community's needs and demands through a vote among its members. CSO
representatives to the LPRAT should be equal to the number of government
representatives. To promote gender sensitivity, 40% of total membership must be
composed of women.

Composition of LPRATs

Chairperson: Local Chief Executive

Co-Chairperson: CSO Representative elected by the CSO Assembly Members
Members:
a. Government Sector Representatives - from the LGUs and NGAs
• Sangguniang Panlungsod/Bayan Member who is the Chairperson of the
• Committee on Appropriation;
• Liga ng Barangay President;
• All local government department heads such as the Planning Officer, Budget
Officer, Fishery and Agriculture Officer, Social Welfare and Development Officer,
Health Officer, Public Employment Service Office (PESO) Manager and Tourism
Officer;
• Representatives of NGAs such as the DSWD municipal links/National Community
Driven Development Program area coordinators, the DILG City/Municipal Local
Government Operations Officer (C/MLGOO), the Schools District Supervisor,
Agrarian Reform Officer, DTI field officer, City/Municipal Environment and
Natural Resource Management Officer (C/MENRO), PESO representatives of
DOLE and all other NGA representatives

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 b. CSO Representatives (who are residents of the city or municipality and must not be
elected officials or their immediate relatives and LGU employees)
o Pantawid Pamilya Parent-Leaders recognized by DSWD;
o DOH organized Community Health Teams;
o Parent-Teacher Associations;
o CSOs accredited by LGUs;
o CSOs accredited or recognized by any NGA;
o Women's group;
o Basic sector organization and those who are recognized by NAPC;
o Other community or grassroots organizations;
o In LGUs where Indigenous Peoples (IPs) comprise over 20% of the population, one
of the elected representatives must come from the IP sector;
o Representative from the business sector.

3. Submission of Proposed Programs and Projects

The LPRAP must first be signed by at least three CSO members of the LPRAT before it
may be considered for funding in the National Budget. These plans are submitted to the local
Sanggunian for adoption. The LPRAT shall discuss and identify major causes of poverty in the
area and specify how these can be addressed. It shall also identify priority poverty reduction
projects through a consensus among its members. If consensus cannot be reached, the decision
will be made through a majority vote. Essentially, during the LPRAP workshop the long list of
poverty reduction projects is first drawn up from proposals coming from the ranks of the CSOs
and the LGU. After some discussion and negotiation, the LPRAT then arrives at a prioritized list
of projects for BuB funding that will be submitted by the LPRAT to the Regional Poverty
Reduction Action Team (RPRAT) for checking and validation.

4. Project Integration in the Budget of NGAs

The respective RPRATs and the National Poverty Reduction Action Team (NPRAT)
review and approve the proposed programs and projects. Once approved, these projects may
be funded in the Budget and will be included in the General Appropriations Act of the
succeeding year. The BuB projects shall be ensured to be not duplicating similar projects of the
concerned agency.

5. Provision of Counter-Part Funding from LGUs

LGUs are also required to provide counterpart funds for the implementation of the project
in their Annual Investment Program (AIP), as follows:

• Highly Urbanized Cities: 30% of project

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 • All other cities: 20%,
• 1st to 3rd class municipalities: 15%,
• 4th to 6th class municipalities: 5%

6. Project Implementation and Execution

LGU that meet the following requirements can implement a BuB project:
 Seal of Good Housekeeping (SGH) recipient. It is conferred to LGUs that obtained
an unqualified or qualified opinion from the Commission on Audit and have
complied with the Full Disclosure Policy. It is a component of the Seal of Good
Local Governance of DILG.
 LGU has made significant progress in its Public Financial Management (PFM).
This refers to the diagnostic review of LGU's existing structure, policies, systems
and procedures for generating and managing its financial resources. It is
conducted to determine the extent to which the LGU is able to establish and
operationalize an open and orderly PFM system in the LGU using as criteria the
critical dimensions of an open and orderly PFM system provided under the PFM
Assessment Tool for LGUs developed by the DBM.

 LGU has technical capacity to implement the project.

 LGU has no unliquidated cash advances.
 If an LGU is ineligible to implement BuB project, the project will be implemented
by the concerned NGA.
 While waiting for the release of funds, concerned LGUs have to prepare initial
documents including feasibility studies, program of works and cost estimates. Once
submitted, a memorandum of agreement between the DILG and the LGU has to be
signed prior to the release of funds.
 CSOs and citizens continue to be engaged during the implementation of BuB
projects.
 CSO members of the LPRAT can observe the procurement of BuB projects.
 Quarterly LPRAT meetings about the progress of BuB projects are conducted.
 Reports on the progress and status of all BuB programs and projects are submitted
and posted online at OpenBuB.gov.ph.

7. Project Monitoring and Evaluation

 A group composed of LGU and CSO representatives visit BuB project sites
for monitoring.
 The LGU shall conduct consultation with the CSOs regarding the status of the BuB
 projects being implemented.
 CSOs are expected to submit their analysis and evaluation to the NGA concerned
regarding the issues related to the project execution.
 The NGA and the CSOs may publish final evaluation reports to achieve greater
transparency

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Projects Implemented under BUB

Table 2 summarized the number of projects implemented by identified LGUs in District 1

while the amount of funds downloaded to LGUs is shown in Table 3. Before the BuB Program
was introduced, LGUs utilized the 20% Development Fund from their Internal Revenue
Allotment (IRA) to finance their development projects. Funding allocations from the BuB
program to all concerned LGUs helped a lot in financing priority development projects of LGUs,
thus, contributed to the over-all poverty alleviation.

Table 2. Number of Projects implemented under BuB

YEAR
LGU
2014 2015 2016 Total
Cuyapo 2 4 6 12
Aliaga 3 5 9 17
Sto. Domingo 5 8 7 20
Quezon 6 5 9 20
Nampicuan 0 6 9 15
TOTAL 16 28 40 84

Sto. Domingo and Quezon have the most number of BuB projects implemented from 2014-
2016, both having 20 priority projects. They received funds from NGAs amounting to Php
40,250,000.00 and Php 37,818,500.00, respectively. Cuyapo has the least with 12 projects
amounting to Php 29,000,000.00.
Generally, there is an increasing trend in the number of projects implemented and the
amount received per GAA from 2014-2016.However, it does not imply that the higher the number
of projects implemented would mean a higher amount of funds received from NGAs (Table 2 and
3). Some LGUs focus on few projects with high amount resulting to higher impact than many
projects having small amount with low impact.

Table 3. Amount of Projects implemented under BuB

YEAR
LGU
2014 2015 2016 TOTAL
Cuyapo 2,000,000.00 12,000,000.00 15,000,000.00 29,000,000.00
Aliaga 10,000,000.00 9,500,000.00 12,000,000.00 31,500,000.00
Sto. Domingo 12,750,000.00 12,500,000.00 15,000,000.00 40,250,000.00
Quezon 13,300,000.00 11,518,500.00 13,000,000.00 37,818,500.00
Nampicuan - 8,500,000.00 15,000,000.00 23,500,000.00
TOTAL 38,050,000.00 54,018,500.00 70,000,000.00 162,068,500.00

The number of projects implemented per NGAs reflect the priority needs of the
beneficiaries (Table 4). Most of the projects identified in the LPRAP were enrolled under Local

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Government Support Fund or LGSF (24 projects). These projects were implemented
by the concerned LGUs since the funds were directly downloaded to them from the DBM. They
are responsible for the overall implementation of the projects. Priority Projects being implemented
under LGSF are: Local Access Roads, Potable Water Supply System, Evacuation Center, among
others. The agriculture-related projects (17 projects) displayed the needs of the local farmers
for facilities and machineries to cultivate agriculture products since Nueva Ecija is considered
as the Rice Granary of the Philippines.

Table 4. Number of Projects implemented under different NGAs

BUB PROJECTS
LGU
DILG DA DepEd DSWD DTI LGSF NAPC TESDA DOH DOLE Total

Cuyapo 2 3 1 - - 6 - - - - 12

Aliaga 3 2 - 2 1 7 1 1 - - 17
Sto.
Domingo 3 4 2 3 - 4 - - 2 2 20

Quezon 5 7 - 5 - 2 - - 2 - 21

Nampicuan - 1 - 2 3 5 - 1 3 - 15

TOTAL 13 17 3 12 4 24 1 2 7 2 85

Status of BuB Projects

Table 5 reflects the status of projects (completed, on-going, and dropped) being
implemented from FY 2014-2016. The DILG, as the oversight agency, monitored the
implementation process and the physical status of projects. The DILG Inspection Team and the
LPRAT conducted regular project monitoring and site validation of BuB projects. This activity is
an effective tool to thresh out issues and concerns of the stakeholders in the municipal level
pertaining to the implementation of the projects particularly the critical/problematic projects.
This is also a way of providing technical assistance to the LGUs and serve as a means in
improving the coordination and working-relationship between the LGUs and Inspection
Team. Through their combined efforts, project completions are being delivered and attained.

Table 5. Status of Projects Implemented in Selected LGUs

Cuyapo Aliaga Sto. Domingo Quezon Nampicuan
Status 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20
14 15 16 14 15 16 14 15 16 14 15 16 14 15 16

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 Compl
eted 2 4 6 2 4 9 5 8 7 6 5 9 0 6 9
On-
going 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Droppe
d 1 0 0 1 4 1 0 0 0 0 1 1 0 2 0
TOTAL 3 4 6 3 8 10 5 8 7 6 6 10 0 8 9

All BuB Projects from FY 2014-2016 are completed. However, some of the projects were
considered dropped or unimplemented due to some reasons:
• Unavailability of funds to implement the BuB projects particularly in the case of DOH
and DepEd.
• Unavailability and/or lacking capacity of LGUs to prepare needed Detailed
Engineering Design, Certifications, Program of Works, and other documentary
requirements to implement the projects caused delayed Implementation of projects and
dropping/cancellation of projects to some LGUs.
• Election ban during the second quarter of 2016 that led to delayed project
procurement and implementation.

Table 6. Implementation Constraints and Recommendations

in the Implementation of BuB Projects
Problems/Constraints Recommendation
Political dynamics and changes in the Downloading of funds should be done on
LGU administration due to the 2016 lump-sum basis rather than on installment
National Elections caused delays on the basis with an additional documents submission
project implementation of some LGUs due to each time.
changes in political priorities and later resulted
to dropping/cancellation of some
projects.
Inconsistent/Different list of documentary Adjust on documentary standards to the basic
requirements of other NGAs that also led to and minimum requirements. There should be a
confusion and delayed project consistent and standardized of documentary
implementation requirements of NGAs in the implementation
of projects.
Poor coordination among NGAs, CSOs and Strenghten the collaboration of NGA, LGU
LGUs in the planning process of the priority and LPRAT not only during the planning
projects that resulted to duplication of projects process but also during the project
among agencies and insufficient project fund implementation, monitoring and funds
allocation particularly under NEDA, DOE, liquidation.
DepEd, DENR, and DA.

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 Problem on sustainability of the projects NGAs should assist the LGUs to formulate
after turn-over due to limited funds of the sustainability and maintenance plan to make
recipients the projects useful and operational for a longer
term of existence.

In the initiative and sponsorship of the RPRAT member agencies, the series of provincial
summits and consultative meetings were conducted to serve as a venue for the oversight agencies
and LPRATs to interface and present the overall status of BuB project implementation and come
up with issues resolution and realistic timeline for the completion of BuB projects. Through
this activity, implementation constraints, issues and concerns were clarified including the lacking
documents, the causes of delayed projects, and the submission of liquidation reports. Moreover,
recommendations to further improve its implementation were raised during the said activities.

Figure 3: Implementation Process of Assistance to Disadvantaged Municipalities Program

Figure 3 shows the process flow of ADM. The municipalities will receive the
assistance from DBM once they were conferred with the Seal of Good Financial
Housekeeping from DILG and completed both the assessment and adoption of measures on Public
Financial Management as prescribed by the DBM. The amount to be released to LGUs shall be
recorded as a Trust Fund to be utilize for the implementation of the project in accordance with
existing government budgeting, procurement, accounting auditing laws, rules and regulations.
All expenses incurred in the conduct of preliminary activities and other administrative cost
in the supervision of the project during implementation shall be shouldered by the LGU
as their counterpart. The Municipal Accountant shall recognize the completed project as asset
of the LGU in accordance with existing accounting rules and regulations. Funds which cannot be
used for the specific purpose for which the funds were released shall immediately be remitted to
the Bureau of Treasury by the LGU concerned.

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Preparation and Submission of Documentary Requirements

Upon the receipt of funds, the LGU shall submit the duly notarized LCE Certification
stating that all documentary requirements have been prepared in accordance with the national
government standards and all bidding documents have been completed and the LGU is ready to
proceed with publication of the Invitation To Bid/Advertisement. Moreover, sub-project
implementation schedule indicating the procurement and implementation timelines shall
also be submitted to the DILG.

Procurement by the Municipality

All project procurement shall be through competitive bidding, in strict compliance with the
provisions of RA No. 9184 (Government Procurement Reform Act) and its 2016
Revised IRR and Guidelines. All projects must be included in the Annual Procurement Plan (APP)
of the municipality. Upon submission of the required Notarized Certifications, the LGU shall
proceed with procurement, as indicated in the certification and implementation schedule.
The DILG and other entities may be invited to observe particularly during pre-bid conference
and/or bid opening. A duly accredited CSO representative who is a signatory to the
municipality’s list of priority projects shall be invited to sit as observer in the Bids and Awards
Committee (BAC), which will undertake the procurement activities for the implementation of
ADM projects

Project Execution

The LGU shall be accountable for the overall implementation of the projects. The LGU shall
ensure that the design, plans, specifications and construction of projects are in accordance with the
National Government standards and within the range of costs and project duration of similar
projects being implemented by NGA in the same locality. They shall ensure that quality control
and assurance are observed, quality tests are conducted and construction logbook is maintained at
the project site, and made it available to DILG during visits and/or as may be requested.

Table 7. Number of Projects Implemented under ADM

LGU ADM Projects F.Y. 2017

Cuyapo 9
Aliaga 6
Sto. Domingo 2
Quezon 1
Nampicuan 5
TOTAL 23

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 In 2017, the Municipality of Cuyapo received the largest amount among five (5) LGUs to
implement their nine (9) local access road projects from ADM. Quezon implemented only
one (1) project which is the construction of Potable Water System project amounting to Php
14,235,000.00 (Table 6 and 7).

Table 8. Amount of Projects implemented under ADM

LGU ADM Projects F.Y. 2017

Cuyapo 15870000
Aliaga 15567000
Sto. Domingo 15265000
Quezon 14235000
Nampicuan 14556000
TOTAL 75493000

In Nueva Ecija, the DBM downloaded a total amount of Php 417,718,000.00 to fund 91
projects of the 27 municipalities in FY 2017. On its first year of implementation, ADM program
was recognized for its accomplishments in its aim to contribute to the empowerment of
LGUs and in making them more responsible and responsive to the needs of the people.
LGUs were made accountable in the overall implementation of their ADM-funded projects. They
ensured that the design, plans, specifications and construction of projects are in accordance
with the national government standards and within the range of costs and project duration of
similar projects being implemented by NGA in the same locality.

Table 9. Types of Projects Implemented under ADM

Small
Local Potable Water
LGU Total
Access Water Evacuation Impounding
Roads System Center System
Cuyapo 9 0 0 0 9
Aliaga 5 1 0 0 6
Sto. Domingo 2 0 0 0 2
Quezon 0 1 0 0 1
Nampicuan 5 0 0 0 5
TOTAL 21 2 0 0 23

Table 8 reflects the types of projects being implemented under ADM FY 2017. Most of
the LGUs identified local access road as their priority projects to improve the condition and

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quality of road in the LGU. Moreover, the infrastructure project’s main purpose is to support
the poverty reduction program of the municipalities particularly by providing access to farmers
in marketing their farm produced eventually increasing productivity. It also aims to increase
agricultural production and upgrade substandard gravel road for safe and economical access that
is supportive to other basic services.

Table 10. Status of ADM Projects

Sto.
STATUS Cuyapo Aliaga Domingo Quezon Nampicuan
Completed 9 6 2 1 5
On-going 0 0 0 0 0
Dropped 0 0 0 0 0
TOTAL 9 6 2 1 5

All of the projects under ADM were all successfully implemented (Table 9). The concerned
municipality is the primary responsible for ensuring the quality of works, and implementing the
project in accordance with the approved design, plans and specifications. There is no
on-going or unimplemented projects under ADM. The Municipality of Quezon concentrated
all of its fund to only one (1) project which is the Potable Water System. Water is essential in
every aspect of human life. However, the local water district has not yet expanded its operations
in far flung areas that is why there is shortage in potable drinking water. In addition, since the
residents usually source out their drinking water from deep well with risks of acquiring
water-borne diseases like diarrhea, cholera, skin diseases and hepatitis. Hence, ADM Project is
beneficial to the community.

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Comparative Analysis of BuB and ADM

While both the BUB and ADM approaches have their respective strengths and
weaknesses, Table 10 presents the comparative analysis of the two approaches with emphasis
on specific areas of their differences.

Table 11. Comparative Analysis of the BUB and ADM

Particulars
Coverage
Project Identification
Project Modification and
Location
Project Qualifications
Bottom-Up Budgeting Assistance to
Disadvantaged
Municipalities
All cities and municipalities All municipalities
Projects identified by LPRAT Projects culled out from the
(50% CSO and 50% LGU LDIP, CDP, CLUP or any
Officials) and included in the available LGU Sectoral Plans.
LPRAP
The proponent LGU may Not allowed. Project
submit a revised design, specification (Name of Project
specification, location and and corresponding amount)
other details proposed in the indicated in the Notice of
LPRAP and project brief Authority to Debit Account
through LPRAT letter Issued (NADAI) from DBM
justifying such changes signed must be followed.
by the LCE and 3 CSOs
signatories to DILG-Regional
Office
In order for a project to be Limited to eight (8) projects as
qualified, it must meet the specified in the menu of
following requirements: projects:
 Provision of Basic  Local access roads,
Social Services and  Potable water system
attainment of the project,
Sustainable  Evacuation center and
Development Goals, disaster risk reduction
including proverty related equipment,
reduction;  Small water
 Hunger Mitigation and impounding project,
Elimination;  Sanitation and health
 Job Generation and facilities,
Inclusive Local  Local bridges,

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 Economic  Rain water catchment
Development; facility,
 Climate Change  Municipal drug
Adaptation/Mitigation rehabilitation facility.
and Disaster
Preparedness; and
 Budge request from
NGA shall not be less
than Php 500,000 per
project.
Allocation Standard allocation per LGU The budget cap of each
(Php 12.5 M for 2015 and Php covered municipality is
15 M for 2016) plus LGU determined by the following
counterpart: factors:
 Highly Urbanized  Equal share of each
cities: 30% of project covered municipality
 All other cities: 20% from the total ADM
 1st to 3rd class allocation
municipalities: 15%  Per capita share of the
 4th to 6th class municipality;
municipalities: 5%  Years-based share
computed from
No counterpart funding, no previous national
release of BuB projects. government allocation
to the municipality;
and
 Share for good
performance as
determined by the
DILG, in consultation
with the DBM and
duly accredited CSOs.
Fund Release Funds from DBM are Funds from DBM thru
downloaded to DILG Bureau of Treasury are
Regional Office. Then, it directly downloaded to
obligates the fund upon eligible municipalities upon
MOA signing and releases LGU compliance of the
the 1st tranche to LGUs (80% set of Governance
of total project amount). The Conditions
remaining 20% will be

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Eligible LGUs to Receive the
Funds
Compliance to Governance
Conditions
Memorandum of Agreement
released when the
LGU
liquidates the 80% fund.
The budget for BuB Projects The municipalities will
will only be released if the receive the assistance once
following conditions are being they receive the GFH mark
from DILG and completed
met: Attainment of Good
both the assessment and
Financial Housekeeping adoption of measures on
(component of Seal of Good public financial management
Local Governance) as prescribed by the DBM.
Compliance with the
Public Financial
Management Improvement
Program (PFMIP) of DBM
If City/Municipality is If the Municipality failed to
non- compliant, NGA comply with the Governance
concerned or the Provincial Conditions until specified
time, the project will be
Government (PG) may
cancelled
implement the project
provided that the PG passed
the Governance Conditions
(GFH
and PFM).
Signed MOA between DILG MOA between DILG and
and LGU upon submission LGU is not required
of required docs

Detailed Engineering LGU must submit Only a notarized LCE

Design/Program of Works DED/POW after MOA signing Certification, certifying that
and Approval and must be reviewed and DED/POW and bidding
approved by DILG before the docs are prepared in
LGU can proceed with accordance with
procurement process National Government
Standards within 60 days
upon LGU receipt of the fund.
LGU may proceed with
the procurement process
upon submission of the
certification.
Booking-up as an LGU asset Not included in the guidelines The Municipal Accountant
of the completed projects shall recognize the completed

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 project as asset in accordance
with existing
accounting rules and
regulations
DILG may conduct site visits Part of the LCE certification
and field validation to further that the project is feasible to
assess the feasibility of the implement e.g. water source
proposed subprojects has been validated by the
Municipal Engineer and has
been found to be:
a. Feasible for supplying
water to the intended
beneficiaries; and
b. Potable for drinking
or engineering
mitigation measures
have been included in
the design to make the
water potable.

Mode of Implementation  By administration  By contract through

 By contract competitive bidding
 By contract for design and  By administration only
build infrastructure after 2 failed bidding and
 Implementation by Partner failed negotiated
Agency procurement
Responsible for LGU and DILG are LGU is responsible for
Implementation responsible for the implementation. DILG for
implementation monitoring.

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CONCLUSION

Bottom-up budgeting is an interesting process due to the promise of better

accountability and delivery of social services for the marginalized sector. The process as defined
is an innovative antipoverty, budgeting and planning tool. It allows both for people’s
participation in development planning and also encourages the development of local fiscal
autonomy through systematic planning. Toward this end, the process provides guidance toward
realizing the goals of systematic and cooperative planning so that local
projects responsive to the poverty situation can be factored into the budgets of national government
agencies.
The BuB Program provides additional funds allowing the LGU to finance and
implement more projects than can be accommodated from its own resources. It also
increases participation in local governance. Under ADM, CSOs are involved in local
planning through their membership in the Local Development Council. However, CSOs are
usually outnumbered in the LDC because they only account for 25% of the LDC and their role in
the LDC is limited to approving a plan that has been prepared oftentimes by LGU officials with
little consultation and involvement from CSOs. In contrast, in the BUB, CSOs involvement is 50%
of the total membership and empowerment of CSOs is fostered through the role given to them
in the identification of poverty alleviation projects, implementation of identified projects and
monitoring of its implementation. (Manasan,
2015).

By allowing the LGU to have direct contact with more CSOs and to be more aware of the
problems and concerns of the latter at the grassroots level, the BuB process better enables LGUs
to get information directly from the marginalized sectors whose urgent needs and concerns are
typically not considered and addressed in regular LGU planning and budgeting processes. By
giving the CSOs the opportunity to identify projects that will improve their lives, CSOs’ sense of
self-worth is enhanced, thereby, empowering them. The BUB process has also encouraged the
basic sectors to organize themselves, and to become more active especially that they have
gained a better understanding of the process – that BUB will allow them to present their needs
to the government and, more importantly, have the chance to participate in local development
planning.
The Bottom-up Budgeting scheme could be considered to be ultimately compatible with
principles laid down in the country's constitution. Article II, Section 9 of the 1987
Constitution expresses the desire of the state to “promote a just and dynamic social order” that
will ensure prosperity and free people from poverty through policies that provide adequate
social services. Section 21 advocates rural development and Section 23 mandates the state
to encourage non-governmental, community-based, or sectoral organizations that promote the
welfare of the nation. In addition, Article X, Section 14 provides powers for the creation of

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regional development councils for the purpose of decentralization and acceleration of economic
and social growth and development.
There are two aspects of participatory and good local governance that the BuB is trying to
realize as it was envisioned in the Local Government Code of 1991—fiscal autonomy and
people’s participation. Coming from the understanding that the people of the localities can
determine and plan better their own development projects, the BuB has made the provision for
the LGUs to insert projects they deem development and anti- poverty priorities into the
budgets of national government agencies. The other aspect of the BuB system is its
establishment of a system where an empowered citizenry can participate in local planning
and budgeting processes. This is a primary concern of the Local Government Code. It seems to
presume that if the local governments want to be able to effectively address the most
fundamental development needs of their poorest populations, there must be a mechanism
by which its citizenry, especially the most marginalized, are able to provide relevant input to
the process because they know well their own situation and because they have to realize that they
are stakeholders of the projects to be implemented. (Manasan, 2015).

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