Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS

Second Regular Session

House Bill No.__ 6338

Introduced by Representative Jose Enrique S. Garcia II

EXPLANATORY NOTE

‘The Seal of Good Local Governance, first introduced in 2014 was a way
of assessing Local Government Units (LGUs) on whether they attain
minimum government standards. As a means of providing incentives for
LGUs, they must receive the seal before receiving a grant from the
Performance Challenge Fund. Local Government Units that receive the seal
are provided with a performance-based grant which they can then use to
supplement funding for local development projects.

While the grant may not be that big, they go a long way in extending
assistance for development projects, especially for low-income municipalities
and cities that have inadequate funds to provide services and projects that
have been devolved to them by the national government. These LGUs often
have to rely on their provincial governments or district representatives in
Congress to provide supplemental funding for their local projects.

The Seal and the Performance Challenge Fund have had notable
benefits — increasing transparency in local government budgets and plans by
incentivizing compliance with the Full Disclosure Policy, instilling prudence
and discipline in local fund management, and providing an initial benchmark
for good local governance by identifying concrete assessment criteria. They
have also, through the new funds available, augmented local government
resources for development projects.

With this in mind, it is important to institutionalize a program that
advances the primacy of performance, accountability, transparency, and
participation, and recognizes LGUs with good performance in financial
administration, disaster preparedness, social protection, peace and order,
business friendliness and competitiveness, and environmental management.

The capabilities of local government units will be enhanced and
strengthened by providing them with opportunities and recognizing their
accomplishments in actively taking a role in pre-designated core and essential
areas of development. Earmarking and revitalizing the mechanisms of


accountability and transparency of local government units to their respective
constituents shall be strengthened in while undertaking projects and program
that will reinvigorate the quality of local leadership, responsiveness, and
delivery of much needed services and programs.

This Act is envisioned to fortify the LGUs to be more responsive,
maverick, and pro-active in their service delivery, performance, local policy
and programs, to be better partners in nation building and keeping abreast
with the global challenges of active social leadership and responsibility.

The passage of this bill is earnestly and sincerely sought.

UE S. GARCIA III
istrict, Bataan


Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City
SEVENTEENTH CONGRESS
Second Regular Session

6338

House Bill No.

Introduced by Representative Jose Enrique S. Garcia III

AN ACT ESTABLISHING AND INSTITUTIONALIZING

THE SEAL OF GOOD LOCAL GOVERNANCE FOR LOCAL GOVERNMENT

UNITS, AND ALLOCATING FOR THIS PURPOSE THE SEAL OF GOOD
LOCAL GOVERNANCE FUND

Be it enacted by the Senate and House of Representatives of the Philippines

in Congress assembled:

CHAPTER I
GENERAL PROVISIONS

SECTION 1. SHORT TITLE — This Act shall be known as “THE SEAL OF
GOOD LOCAL GOVERNANCE ACT OF 2017 or THE SGLG ACT OF
2017”

SECTION 2. DECLARATION OF POLICY. - It is hereby the declared
policy of the State to recognize the good performance of provincial, city and
municipal governments in transparency and accountability in the use of public
funds, organization of health programs, preparedness for challenges posed by
disasters, sensitivity to the needs of vulnerable and marginalized sectors of
society, investment and employment promotion, protection of constituency
from threats to life and damage to property, and safeguarding the integrity of
the environment. In such recognition, the State hopes to encourage all local
governments to take on greater challenges, and to reward local governments
for their effort in pursuing the general welfare of their constituency and in
enforcing existing laws.

SECTION 3. THE SEAL OF GOOD LOCAL GOVERNANCE. - THE
SEAL OF GOOD LOCAL GOVERNANCE PROGRAM (SGLG) is an
award, incentive, honor and recognition based program for all local
government units (LGUs), except barangays, and is a continuing commitment
for LGUs to continually progress and improve its performance in the following
areas (the “Criteria”):


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a. Uphold the practice of transparency and accountability in the use of
public funds;
b. Organize and set-up health programs that would strengthen and
benefit its constituents;
c. Prepare for challenges brought about by unpredictable natural
calamities;
d. Demonstrate the readiness to help and sensitivity to the needs of
vulnerable and marginalized sectors of society;
. Encourage investment and employment;
Protect constituents from threats to life and damage to property;
and,
g. Safeguard and protect the integrity of the environment through
adaptive social responsibility.

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Every three (3) years after the effectivity of this Act, the Department of the
Interior and Local Government (DILG), upon recommendation of its Bureau
of Local Government Development and Bureau of Local Government
Supervision, shall, if necessary, recommend to Congress the expansion of the
Criteria; Provided that, such additional areas shall be in line with the long-
term development plan of the National Government.

For the avoidance of doubt, the Criteria shall be interpreted in accordance
with Sections 6 and 8 of this Act.

SECTION 4. SCOPE OF APPLICATION. The SGLG shall cover all LGUs,
except for Barangays.

SECTION 5. INSTITUTIONAL MECHANISM; IMPLEMENTING
AGENCY — There is hereby established a Council of Good Local Governance
(the “Council”), which shall be composed of the Secretaries of the following,
entities:

. Department of the Interior and Local Government (DILG);
. Department of Budget and Management (DBM);
Department of Finance (DOF); and

|. National Economic Development Authority (NEDA)

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The Council shall act as an advisory body to ensure the proper
implementation of the SGLG.

The Secretary of the DILG shall act as Chairperson of the Council. The
appropriate office of the DILG, as the latter may designate, shall serve as the
Secretariat of the Council.

The DILG shall be the implementing agency of this Act. It shall, through its
relevant bureaus and offices, be responsible for evaluating each LGU relative
to their compliance with the Criteria, and determining whether an LGU
qualifies with the minimum requirements to be conferred or awarded the
SGLG. The vetting of the SGLG recipients shall be the responsibility of the
DILG.


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The DILG may, from time to time, call on any other concerned agencies or
sectors, as it may deem necessary, to assist in carrying out its responsibilities
under this Act.

SECTION 6. CRITERIA —For the purpose of this Act, the areas in the
Criteria shall be understood and interpreted as follows:

lL CORE AREAS OF CONCERN AND INDISPENSABLE AREAS

OF CONSIDERATON.

1. GOOD FISCAL or FINANCIAL ADMINISTRATION. — This
refers to the condition where an LGU maintains, preserves and
mandatorily upholds the practice of accountability and
transparency by adhering to the generally accepted and recognized
accounting and auditing standards. Indicators include but are not
limited to (a) the issuance of an unqualified or qualified opinion on
the financial statements of an LGU by the Commission on Audit
(COA) in the immediately preceding year, and (b) full, strict, and
exacting compliance with the Full Disclosure Policy of Local Budget
and Finances, Bids and Public Offerings.

2. HEALTH COMPLIANCE and RESPONSIVENESS - This
refers to the condition where an LGU provides concrete and hands-
on action that elevates the status, awareness, preparedness, and
responsiveness in delivering its health services. Indicators include
but are not limited to (a) the implementation of practical
information dissemination and education measures, (b) the
implementation of training and/or schooling measures, (c) building
the efficiency, competency and skill of concerned personnel to
comply with international health standards and responsiveness,
and (d) ensuring the operational preparedness, readiness and
vigilance via the availability and accessibility of the necessary tools,
medical and health equipment and machinery, supplies and such
other resources and technology intended for health and medical
purposes.

3. DISASTER MANAGEMENT, PREPAREDNESS AND
TIMELINESS - This refers to an LGU’s preparedness for any
disaster, or natural or man-made calamity, by taking proactive
actions and building capacity to provide remedial action when
needed. Indicators include but are not limited to (a) being an
awardee of the National Gawad KALASAG for Best Local Disaster
Risk Reduction and Management Council, (b) having structures,
plans and systems in place for disaster preparedness, such as the
creation and mobilization of local Disaster Risk Reduction
Management (DRRM) Council and DRRM Office, (c) the
availability of a Provincial Development and Physical Framework
Plan/Comprehensive Land Use Plan, DRRM Plan, Contingency
Plan, and Local Climate Change Action Plan, (d) the availability of
working early warning and evacuation alert systems, evacuation
centers, standard operating procedures in the event of disaster or

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calamity, emergency transportation facilities, relief operation
equipment and tools, medical services, registration and security.

.. SOCIAL PROTECTION, AND SENSITIVITY PROGRAM —

This refers to an LGU’s sensitivity and responsiveness to the needs
of its constituents particularly those belonging to the vulnerable or
disadvantaged sectors, such as but not limited to, women, children,
indigenous people, elderly, and persons with disability (PWD).
Indicators include but are not limited to (a) providing access to
justice, particularly in cases of violence against women and
children, (b) access to quality public health facilities certified by
PhilHealth, (c) support to basic education particularly alignment of
the Local School Board (LSB) Plan with the School Improvement
Program certified by the Department of Education-representative
in the LSB, (d) providing access for PWDs, senior citizens and
pregnant women in frontline services, (e) enhancing mobility for
PWDs in public infrastructures like local government centers and
hospitals in accordance with the Accessibility Law, (f) mandatory
representation of indigenous people in compliance with the
Indigenous Peoples Rights Act of 1997, (g) compliance with the
mandatory representation in the sanggunian with representative
accorded with regular privileges and emoluments of a sanggunian
member, (h) the presence of at least one accredited LGU-managed
residential care facility for the vulnerable sectors, and (i)
representation from NGOs in the local development council
consistent with the pertinent provisions of the Local Government
Code.

Il. | ESSENTIAL AREAS OF CONSIDERATON.

L

LOCAL BUSINESS SOCIABILITY AND VIABILITY. This
refers to an LGU’s unconventional initiative in encouraging local
investment, together with local business enterprises and the
working sector, through the adoption of policies, programs,
systems, structures and/or local legislation in order to support and
promote a business climate conducive to sustainable business
growth. Indicators include but are not limited to (a) having a
simplified business processing and licensing system, (b) tracking of
economic data of the locality and the sharing of the same with
investors, (c) having a designated local economic investment
promotion officer or its equivalent, (d) an updated Citizen’s Charter,
(e) an updated Local Investment Incentive Code, and (f) good
performance in business promotion as a result of Business-
Friendliness or Competitiveness Assessment by the Philippine
Chamber of Commerce and Industry or the National
Competitiveness Council.

SAFETY, PEACE AND ORDER. This refers to a condition where
an LGU establishes and demonstrates good and respectable
performance in terms of maintaining peace and order in the
community with the implementation of activities, programs and
policies, and the appropriate provision of support mechanisms to

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ensure the safety and protection of its constituencies from
unnecessary threats to life, security and property. Indicators include
but are not limited to (a) adopting a Local Anti-Criminality Action
Plan or Peace and Order and Public Safety Plan, (b) providing
logistical or financial support to the local police, (c) convening the
local Peace and Order Council, (d) establishing a functional local
Anti-Drug Abuse Council, and (e) establishing and implementing a
community-oriented policing mechanism.

3. ENVIRONMENTAL PROGRESSIVE MANAGEMENT AND
PROTECTION. This refers to an LGU’s initiative that consistently
and significantly preserves and protects the integrity of the
environment. Indicators include but are not limited to (a) advancing
local policy and programs of action on Environmental Impact
‘Assessment, (b) promoting social awareness and social
responsibility programs, (c) managing and maintaining ecological
balance within their territorial jurisdiction, (d) complying with at
least the minimum standards set by the provisions of the Ecological
Solid Waste Management Act of 2000, (e) establishing a material
recovery facility or an existing partnership with an entity with
facilities that may be used for such purpose, (f) having access to a
sanitary landfill or alternative technology, (g) maintaining an
organized local Solid Waste Management Board, and (h) instituting
policies, programs, systems, structures and/or local legislation in
order to support and promote environmental protection in all levels
of human transaction.

4. LOCAL TOURISM/HERITAGE DEVELOPMENT and
ADVANCEMENT. This refers to an LGU’s ability to promote and
protect local heritage and culture, or local legacy, in terms of
preserving the cultural, historical and indigenous significance of the
community, marketing the characteristics which the LGU is known
or recognized for, and attracting foreign and local visitors and
tourists to the locality. Indicators include but are not limited to (a)
the presence of a Local Tourism Officer or designated officer, (b) the
establishment of a Tourist Information and Assistance Center, (c)
the establishment of a tracking system of tourism data, (d) the
presence of a local council for the promotion of culture and the arts,
(c) the approval and implementation of a budget appropriated for
the conservation and preservation of cultural property, and (f)
existence of an updated cultural property inventory in the LGU.

SECTION 7. REQUISITES TO QUALIFY FOR SGLG; The "4 Plus 1"
DOCTRINE. - An LGU covered by this Act, which, according to the
assessment of the DILG, complies, qualifies, and passes all four core
assessment areas as provided in Section 6(1) of this Act, and also complies,
qualifies, and passes at least one essential assessment area as provided in
Section 6(II), subject to the approval of the DILG, shall be conferred and
awarded the SGLG and granted the corresponding incentive as provided
under Section 10 of this Act.


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Section 8. RULES OF INTERPRETATION — In order to ensure the
prestige of the SGLG, in the interpretation of the provisions of this Act, all
definitions of the areas of the Criteria and all issuances and rules and
regulations issued pursuant to this Act shall be strictly construed against
LGUs. It shall be the burden of an LGU to show that it qualifies for the SGLG.

SECTION 9. IMPLEMENTING RULES AND REGULATIONS — The
Secretary of the DILG shall formulate and promulgate the rules and
regulations to implement the provisions of this Act within ninety (90) days
from the effectivity of this Act.

SECTION 10. THE SGLG INCENTIVE FUND -~ There is hereby created a
special account under the General Fund called “SGLG Fund” with an initial
allocation of One Billion Pesos (P1,000,000,000.00). The Fund shall be
utilized only to pay out the incentives granted to LGUs which qualify for the
SGLG.

‘The incentives to be awarded to each LGU conferred with the SGLG shall be
capped as follows:

a. Provinces — Seven Million Pesos (P7,000,000.00);
b. Cities — Five Million Pesos (P5,000,000.00); and
c. Municipalities — Three Million Pesos (P3,000,000.00).

The Council established under Section 5 of this Act shall have the authority to
re-evaluate and increase the amount of SGLG incentive to be awarded to
LGUs; Provided That, such re-evaluation and increase shall not be done more
often than every three (3) years after the effectivity of this Act; Provided
further That, the increase shall be subject to the sufficiency of the Fund at the
time the increment is implemented.

SECTION 11. LIMITATIONS ON EXPENDITURES ~ Payouts from the
SGLG Fund to LGUs shall not be used for programs that duplicate or overlap
with programs and projects that are already being implemented and funded
by the National Government. In the same manner, the fund may not serve as a
counterpart fund by LGUs to support projects identified and primarily
implemented by the National Government.

Payouts from the SGLG Fund shall not also be used for any of the following:

a. Financing micro credits and loans;

b. Travel expenses, whether domestic or foreign, Except when the
purpose is to effect the purposes of this Act;

c. Administrative expenses of the LGU including but not limited to
cash gifts, bonuses, food allowances, staff uniforms, communication
bills, utilities, transportation costs and the like;

d. Purchase, maintenance or repair of any motor vehicles or
motorcycles not directly used for the SGLG undertaking;

e. Salaries, wages, emoluments, per diems or overtime pay of
employees;

f. Construction, repair, or refurnishing of administrative offices; and

g. Asa loan guarantee.


Furthermore, the guidelines and limitations on the utilization of the annual
Internal Revenue Allotment shall govern; insofar as practicable, the use of
payouts from the SGLG Fund.

SECTION 12. MANAGEMENT AND ADMINISTRATION OF THE
SGLG FUND - The SGLG Fund established under Section 10 of this Act shall
be managed and administered by the DILG upon advise of the Council.
Appropriation to replenish the amount paid out from the Fund during the
year and/or to augment the Fund shall be proposed by and included in the
budget of the DILG under the General Appropriations Act (GAA) for the
ensuing year.

SECTION 13. GUARANTEE OF LOCAL GOVERNMENT AUTONOMY
— The autonomy of local government units shall be respected at all times.
Nothing in this Act shall be interpreted as limiting the autonomy of local
governments.

SECTION 14. FUNDING. — The DILG shall include in its annual budget to
be incorporated in the GAA such amount necessary to cover the expenditures,
other than the incentive payouts, to be incurred in carrying out the
implementation of this Act.

SECTION 15. JOINT CONGRESSIONAL OVERSIGHT COMMITTEE.
— A Joint Congressional Oversight Committee (the “Oversight Committee”),
shall be constituted in accordance with the provisions of this Act. The
Oversight Committee shall be composed of the respective Chairpersons of the
Committees on Local Government of the Senate and of the House of
Representatives serving as co-Chairpersons, the Chairperson of the
Committees on Ways and Means of the Senate and of the House of
Representatives serving as co-Vice Chairpersons, and three (3) additional
members from each House to be designated by the Senate President and the
Speaker of the House of Representatives, respectively. The Oversight
Committee shall monitor and ensure the proper implementation of this Act.

Five (5) years following the effectivity of this Act, or as the need may
necessitate, the Oversight Committee shall conduct an evaluation of the
impact of this Act on the performance of LGUs for purposes of determining
the need for the continuation of the SGLG program or any remedial
legislation.

SECTION 16. RETROACTIVITY CLAUSE. - This Act shall have
retroactive effect insofar as it does not prejudice or impair vested or acquired

rights.

SECTION 17. REPEALING CLAUSE - All laws, presidential decrees,
executive orders, rules and regulations or parts thereof which are inconsistent
with the provisions of this Act are hereby repealed or modified accordingly.

Further, all LGUs previously conferred with the SGLG under previous rules
and regulations prior to the effectivity of this Act shall remain qualified as
recipients of SGLG under this Act.


CeId ANVEwnNH

SECTION 18. SEPARABILITY CLAUSE — Should any part or provision of
this Act be held unconstitutional or invalid, all other provisions hereof which
are not affected thereby shall continue to be in full force and effect.

SECTION 19. EFFECTIVITY. - This Act shall take effect after fifteen (15)
days following its complete publication in the Official Gazette or in two (2)
newspapers of general circulation whichever is earlier.

Approved