Republic of the Philippines

DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT

DILG-NAPOLCOM Center, EDSA corner Quezon Avenue, West Triangle, Quezon City
http://www.dilg.gov.ph

MEMORANDUM
CIRCULAR NO.

TO: ALL PROVINCIAL GOVERNORS, CITY MAYORS,

MUNICIPAL MAYORS, PRESIDING OFFICERS AND
MEMBERS OF THE SANGGUNIAN, DILG REGIONAL,
PROVINCIAL AND CITY DIRECTORS, CITY AND
MUNICIPAL LOCAL GOVERNMENT OPERATIONS
OFFICERS, AND OTHERS CONCERNED

SUBJECT: GUIDELINES TO AID IN ENSURING THE TIMELY

APPROVAL OF LOCAL GOVERNMENT
APPROPRIATIONS ORDINANCE

1. Background

1.1 Section 318 of Republic Act (R.A) No. 7160 or the Local
Government Code (LGC) of 1991 mandates all the Local Chief
Executive (LCE) in preparation of the budget that upon receipt
of the statements of income and expenditures, the LCE shall
prepare the executive budget and submit the same to the
concerned sanggunian not later than the sixteenth (16th) of
October of the current fiscal year.

1.2 Section 319 of the LGC, for legislative authorization of the

budget, the Local Sanggunian concerned shall enact the
ordinance of the local government unit’s (LGUs) annual
budget before the end of the current fiscal year.

1.3 DILG Memorandum Circular (MC) Nos. 2021-109 and 2022-

004 were issued to provide guidance to LGUs on the timely
submission, and enactment of their annual budget and
prevent situations wherein LGUs will operate on a re-enacted
budget.

1.4 The LGUs are reminded in DILG MC No. 2020-109 that failure
to submit the executive budget, and to enact the ordinance
within the prescribed period may result to the filing of
administrative charges against the local government officials.
2. Purposes

2.1 To provide guidelines to help ensure the adoption, and

monitoring of the annual LGU budget ordinances; and

2.2 To establish a mediation mechanism that shall help in the

resolution of issues and concerns relating to the preparation
and adoption of the LGU budget ordinance.

3. Scope/Coverage

3.1 All Provincial Governors, Vice Governors, City Mayors,

Municipal Mayors, Vice Mayors, and members of the Local
Sanggunian, DILG Regional, Provincial and City Directors,
City and Municipal Local Government Operations Officers,
and others concerned

4. Policy Content and Guidelines

4.1 Roles and Responsibilities

4.1.1 The Local Government Units (LGUs)

4.1.1.1 The Local Chief Executives (LCE) shall prepare and

submit the executive budget to the Local Sanggunian
concerned not later than the 16th of October of the
current fiscal year in accordance to Section 318 of
the Local Government Code of 1991 (LGC).

4.1.1.2 Pursuant to Section 319 of the LGC, the Local

Sanggunian concerned shall enact the budget
ordinance for the LGU before the end of the fiscal
year based on the income, and expenditures
submitted by the LCE.

4.1.1.3 In the event of gridlocks in the passage of the budget

ordinance, any interested party (executive, and/or
legislative) in the LGU may seek the assistance of the
Mediation Committee, through its Secretariat, to

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 provide for a venue, and facilitate the amicable
settlement of the issue causing such gridlock.

4.1.1.4 The LGUs are likewise advised to coordinate with the

C/M LGOOs to seek assistance to comply with the
necessary process and timelines for budget
appropriation.

4.2 Roles of the different DILG Offices

4.2.1 Legal and Legislative Liaison Service (LLLS):

4.2.1.1 The Legal and Legislative Liaison Service shall study

all Mediation Committee resolutions, and
recommend to the Secretary the next steps to be
taken with regard to the same.; and

4.2.1.2 The LLLS shall provide all necessary legal support to

the Mediation Committee, and shall ensure the
participation of its representative to the proceedings
when their presence is specifically sought by the
Committee, through its Secretariat.

4.2.2 The Bureau of Local Government Supervision:

4.2.2.1 Serve as the Chair of the Mediation Committee;

4.2.2.2 Provide secretariat support to the Committee;

4.2.2.3 Draft the internal operational guidelines of the

Committee, and the Secretariat.; and

4.2.2.4 Track and consolidate the following reports submitted

by the DILG – Regional Offices:

a) Status of LGU executive budget submission;

b) Approved local budget ordinances; and

c) Actions taken by LGUs pursuant to the

agreements during mediation proceedings, and/or
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 responses/replies to any order or directive from
the Department, and the Committee.

4.2.3 The DILG Regional Offices (ROs)

4.2.3.1 The ROs concerned shall monitor the status of

submission of the executive budget, and enactment
of the budget ordinance of LGUs within their
respective areas of jurisdiction.

4.2.3.2 ROs shall submit monthly monitoring reports under

item 4.2.2.4 (a to c), following the template
accessible through the link:
http://tinyurl.com/LGUBudgetMonitoring to the
Bureau of Local Government Supervision, Attention:
Local Government Relations Division (LGRD), every
5th day of the month.

4.2.4 DILG Field Offices

4.2.4.1 The concerned Provincial Directors, City Directors,

and/or City/ Municipal Local Government Operations
Officers (C/MLGOOs) are directed to provide
necessary assistance to the LGUs in the preparation
of their annual budget, and shall ensure that LGUs
comply with their roles, and responsibilities
particularly in the preparation and enactment of local
budget ordinance within the prescribed timeline.

4.2.4.2 The C/M LGOOs shall take the necessary action in

assisting LGUs in resolving any issues and concerns
that hinder or delay the appropriation of annual
budget, especially if such involves institutional
capacity, mechanisms, and systems of the local
government.

4.3 Institution of a Mediation Committee

4.3.1 A Mediation Committee is hereby instituted to be headed

by the Director of the Bureau of Local Government
Supervision of the Department with the following members:
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 4.3.1.1 One (1) duly designated member of the Union of
Local Authorities of the Philippines;

4.3.1.2 Concerned DILG Regional/Field Offices having

territorial jurisdiction over the LGU whose case is
under mediation, particularly, the following:

4.3.1.2.1 Regional Director of the DILG;

4.3.1.2.2 Provincial Director of the DILG;

4.3.1.2.3 City Director, or City/Municipal Local

Government Operations Officer of the DILG;

4.3.1.2.4 Additional one (1) member from the DILG –

RO; and

4.3.1.2.5 The Local Government Relations Division of

the Bureau of Local Government Supervision
shall act as the Secretariat of the Committee
which shall be charged with the responsibility
to facilitate the operations of the Committee.

4.4 Mediation Process

4.4.1 The Mediation Committee Secretariat, upon receipt of a

request from an interested LGU party, shall, within fifteen
(15) days, schedule the mediation proceeding.

4.4.1.1 The secretariat shall ensure the attendance and

participation of all concerned LGU parties, and
concerned special members of the committee during
the scheduled proceedings;

4.4.1.2 Failure of any party to appear, and participate,

without just cause, shall be treated as failure of the
mediation process.

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 4.4.1.3 In case of valid causes communicated to the
Secretariat at least five (5) working days prior to the
scheduled proceeding, proceeding maybe
rescheduled, within fifteen (15) calendar days from
the original schedule. No proceeding maybe
rescheduled more than once. Determination as to the
validity of cause shall be subject to the sound
discretion of the Committee through its Chair, and the
Secretariat.

4.4.2 Mediation proceedings shall not take more than one (1) day
to discuss and thresh out the issue. In case there is a need
for the submission of additional information, subject to the
discretion of the members of the Committee voting
unanimously, parties maybe required to submit
memoranda/memorandum containing additional
information requested, within a reasonable amount of time.

4.4.2.1 Memoranda shall be submitted to the secretariat

through email address: dilg.blgslgrd@gmail.com
wherein the same shall be processed, and analyzed
for the drafting of a briefer to the concerned members
of the Committee.

4.4.3 Fifteen (15) calendar days after the failure or the conduct
of the mediation proceeding, receipt of the last
memoranda, or failure to submit the last memorandum, the
Committee shall issue a resolution stating whether the
issue has been resolved through an agreement of the
parties, can not be resolved within the Committee level,
and needs Court intervention, and/or there is a need to
investigate, through the DILG LLLS, the necessity to file
administrative cases against erring officials.

4.4.3.1 The Resolution of the Committee shall contain all the

relevant facts which led to the proceedings, the
agreements reached, and/or failure of the
proceedings, the recommendations of the
Committee, and the rationale behind such
recommendation.

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 4.4.3.2 The Resolution shall be signed by all members that
participated in the proceedings, and shall be
submitted to the Office of the Secretary, through the
Office of the Undersecretary for Local Government,
and the Legal and Legislative Liaison Service.

5. Dissemination

5.1 All DILG Regional Directors are hereby directed to cause the
widest dissemination of this Memorandum Circular within their
respective areas of jurisdiction.

6. Penalties

6.1 LGU officials who fail to comply with the provision of this
Memorandum Circular may be penalized in accordance to
existing laws and policies.
6.2 The DILG Regional Offices, through their Legal Offices, shall
submit to the LLLS, copy furnished the BLGS, all reports
relative to monitored, and/or confirmed violations of LGUs of
any provisions of these guidelines.

7. Repealing Clause

7.1 All DILG orders, issuance, and/or parts thereof inconsistent

herewith are hereby superseded, repealed and/or modified
accordingly.

8. Effectivity

8.1 This Memorandum Circular shall take effect immediately.

9. Approving Authority

ATTY. BENJAMIN C. ABALOS JR.

Secretary

1. Feedback

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1.1 For related queries, kindly contact the Department of Interior
and Local Government – Bureau of Local Government
Supervision at Tel Nos. (02) 8876-3454 loc. 4203 or 4205 at
email address at dilg.blgslgrd@gmail.com