Working Towards Building a Green Economy and Sustainable Local Communities


Completion of the systems review of the budgeting and release process of ENR revenues from national level down to LGUs


Some of the strongest links between poverty and environment are the industries extracting the natural resources, such as mining, oil and gas, geothermal and hydropower plants. Although natural resources in the Philippines have been identified nationally as an important growth driver and the country is 5th most mineral-rich in the world, this sector has yet to contribute significantly to economic growth and human development.

The Local Government Code of 1991 or the Republic Act 7160 mandates that 40% of the revenues from the National Wealth belong to local government units (LGUs). However, the release of the LGUs’ share from the national government is often delayed and/or not the full amount due to the LGU. This deprives the LGUs with much needed funds for local development.

The problems on timing and the uncertainty regarding the amounts to be received adversely affected the delivery of services especially with respect to projects alleviating poverty. Even though the national and local governments are well aware of the requirements and processes in laws and policies attendant to the collection, distribution and utilization of shares from national wealth, the problem is on the full implementation of some provisions of the policies. The clamor of the LGU is clear, to respect their rightful share, with timely and well-informed amounts of fund transfer so that these can be incorporated into their annual budgets and investment plans, and effectively implement development projects.

The Philippines Poverty-Environment Initiative (PPEI) led the conduct of a systems review of the entire budgeting and release process from the national level down to the local levels of government. The entire process of estimating government revenues from natural resources to actual receipt of the funds to disbursement and recording to public dissemination of relevant financial statements was analyzed.

The main objective of this study is to recommend and encourage reforms in the policy environment for the sharing of revenues from natural resources between the national government (NG) and LGUs and for their utilization to focus on poverty alleviation and environmental protection programs. This involves proposals to amend laws, modify operational policies, and improve regulatory aspects and governance processes of the NG and LGUs to identify pragmatic solutions to the problems of downloading delays and uncertain amounts. This also involves the development of information systems that will facilitate the timely and transparent release of the revenues from ENR to the host LGUs.

The following reports and activities were accomplished under this Study. The first four outputs can be classified under Systems Development. The next three outputs are geared towards Effecting Policy Reforms while the last two outputs can be used to advocate for legislative actions.  

Systems Development

  1. Documentation of Implementation of DBM-DOF-DENR-DILG Joint Circulars 2009-1 and 2010-1
  2. Proposed Revisions to Joint Circulars 2009-1 and 2010-1 and Strategies to Implement New Circulars including Designation of One Agency to Oversee Implementation
  3. Proposed Framework to Further Speed Up Release of LGU Shares in the proceeds from  National Wealth (NW) and Lobbying/Advocacy Strategies
  4. Proposed Improvements in the Electronic Statement of Receipts and Expenditures  (eSREs) of LGUs

Effecting Policy Reforms

  1. Assessment of Possible Linkages of PPEI to the Wealth Accounting and Valuation of Ecosystem Services (WAVES) Project and Strategies for their Convergence
  2. Linkages of PPEI to the Agenda of the Philippine Council for Sustainable Development (PCSD) and the Mining Industry Coordinating Council (MICC)
  3. Review of Laws and Policy Issuances on Small-Scale Mining to improve collection of taxes from small-scale miners

Advocating for Legislative Actions

  1. Proposed Amendments to the Local Government Code of 1991
  2. Proposed Amendments to the Electric Power Industry Reform Act (EPIRA) and Renewable Energy (RE) Act to increase the share of LGUs in the proceeds from NW

With the said proposed reforms, local governments and communities would enjoy the full benefits from the utilization and extraction of natural resources for an inclusive, sustained and broad-based local economic development.