Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

NINETEENTH CONGRESS
‘Third Regular Session

House Bill No._11390

Introduced by AKBAYAN REP. PERCIVAL CEN!

EXPLANATORY NOTE

Article XIII, Section 16 of the 1987 Constitution guarantees the right of people’s organization
to effective and reasonable participation at all levels of social, political, and economic
decision-making. In this regard, the State is mandated to facilitate the establishment of

consultation mechanisms to promote the general welfare of the nation.

‘The operationalization of participatory governance is mostly needed in the determination of
the national budget. A mechanism to include civil society organizations, people's
organizations, and local government units in the discussions regarding priority projects,
poverty reduction programs and development plans will certainly promote inclusion and

transparency in the disbursement of public funds.

This proposed legislation aims to introduce and institutionalize the “Bottom-up Budgeting”
(BuB) program. The BuB is a process that aims to achieve community empowerment by
encouraging citizens to take active roles by articulating their needs to the government and
determining what projects are responsive to their needs in local development plans. These
local development plans are then harmonized with pertinent national government agencies’

programs and budgets for implementation.

The BuB has also built-in features such as good financial management, timely
implementation, and participatory governance. These safeguards will strengthen the

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accountability of national government agencies and members of Congress to their
constituents. The BUB will make the General Appropriation Act a just and genuine

expression of the taxpayers’ will.

In view of the foregoing, the immediate passage of this bill is CD)
Sf

yy. PERCIVAL CENDANA.
AKBAYAN PARTYLIST



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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

ETEENTH CONGRESS
Third Regular Session

House Bill No._ 11390

Introduced by Akbayan Rep. Percival Cendafia

AN ACT
INSTITUTIONALIZING PEOPLE’S PARTICIPATION IN THE BUDGET
PROCESS, PARTICULARLY IN THE PLANNING AND IDENTIFICATION OF
PROGRAMS AND PROJECTS FOR POVERTY ALLEVIATION AND LOCAL
DEVELOPMENT

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

assembled:

SECTION 1. Short Title. - This Act shall be known and cited as the “Bottoms-Up
Budgeting Act.”

SEC. 2. Declaration of Policy. — In pursuit of inclusive growth and poverty reduction, it is
hereby declared the policy of the State to institutionalize transparency, accountability and
citizen’s participatory reform in governance, as a means of attaining poverty alleviation and
local development, pursuant to Sections 21 and 23, Article II of the 1987 Philippine
Constitution.

‘The Bottom-up Budgeting (BuB) program 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 and civil society organizations
particularly in local development planning and budgeting. The result of the local planning

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and budgeting is the convergence of plans and priorities by the local government units and
the civil society. These local development plans are then harmonized at the pertinent
national government agencies’ programs and budgets for implementation.

SEC. 3. Definition of Terms. — As used in this Act, the following terms shall be defined as

follows:

a. Basic Sectors — refer to the disadvantaged sectors of Philippine society, namely:
farmer-peasant, agrarian reform beneficiaries, artisanal fisherfolk, workers in the
formal sector and migrant workers, workers in the informal sector, indigenous
peoples and cultural communities, women, differently-abled persons, senior
citizens, victims of calamities and disasters, youth and students, children, and
urban poor;

b. Bottom-up Budgeting (BuB) — an approach to the preparation of agency budget
proposals, taking into consideration the development needs of cities/municipalities
as identified in their respective local poverty reduction action plans that shall be
formulated with the strong participation of basic sector organizations and other

civil society organizations;

©. Civil Society Organizations — include non-government organizations (NGOs),
People’s Organizations (POs), basic sector organizations, cooperatives, trade
unions, professional associations, faith-based organizations, media groups,
indigenous peoples movements, foundations, and other citizen’s groups which are
non-profit and are formed primarily for social and economic development to plan
and monitor government programs and projects, engage in policy discussions, and

actively participate in collaborative activities with the government;

d. Community-Based Monitoring Systems (CBMS) ~ an organized process of data
collection and processing at the local level and integration of data to local
planning, program implementation and impact monitoring. It promotes evidence-
based policymaking and program implementation while empowering communities

to participate in the process.


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Good Financial Housekeeping — is conferred to local government units that
obtained an unqualified or qualified Commission on Audit (COA) opinion and
have complied with the Full Disclosure Policy. It is a component of the Seal of
Good Local Govemnance;

Local Poverty Reduction Action Plan (LPRAP) - the local government unit (LGU)
plan which contains programs and projects collectively drawn through a
participatory process by the LGU with civil society organizations (CSOs) and other
stakeholders, and which will directly address the needs of the poor constituencies
and the marginalized sectors in the city or municipality;

Parent Leaders ~ Pantawid Pamilyang Pilipino Progam (4Ps) grantees chosen by
their co-grantees/fellow parents to lead a cluster of family-grantees. Their role and
function is to ensure the compliance to the conditionalities of the 4Ps program of
the grantees. They preside over meetings during community assemblies,
disseminate information and updates, follow-up/monitor commitment and
compliance to conditionalities on health and education, They also act as the bridge
of the community in communicating to the municipal link assigned in the area and
to other stakeholders in the municipality or city;

Poor — refers to individuals and families whose income falls below the poverty
threshold as defined by the National Statistical Coordination Board. These are
those who cannot afford to provide for their minimum basic needs of food, health,

education, housing and other essential amenities of life in a sustained manner;

Private Sector — refer to organizations of business individuals or entities such as
business chambers, and the like. It is considered a prime engine in the economy to

promote development via investment and employment;

Public Financial Management Assessment — refers to the diagnostic review of a
local government unit'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

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Public Financial Management (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 Local government Units (PFMAT for LGUs) developed by
the Department of Budget and Management (DBM);

Public Financial Management Improvement Plan — refers to the set of
programs/projects/activities (PPAs) that will be undertaken by the LGU to address
the areas in Public Financial Management (PFM) that need to be further improved
and/or sustained based on the assessment by the LGU of the different critical
dimensions of an open and orderly PFM system provided under the PFM
Assessment Tool for LGUs;

Seal of Good Local Governance (SGLG) — is the scaled up version of the Seal of
Good Housekeeping. It is a recognition given to local governments for their good
performance in the areas of a) transparency and accountability in the use of public
funds; b) preparation for disasters; c) sensitivity to the needs of the vulnerable and
marginalized sectors; d) attraction of investments and generation of employment;
e) maintain security; and f) safeguarding the environment.

SEC. 4. Empowerment Process and Bottom-up Budgeting Procedure. — The following
processes shall serve as the main components to implement the empowerment of LGUs and
Bottom-up Budgeting approach:

Social preparation. In preparation for poverty reduction planning, the
City/Municipal Local Government Operations Officer (C/MGLOO), together with
the CSOs, shall organize various capacity building activities to ensure that the
‘communities in the LGUs will have a clear understanding of how they can provide
inputs into policies and programs that affect their lives and for community

members to meaningfully participate in the local governance.

Collection of relevant economic and social data, The LGUs shall collect and
collate all relevant information, statistics, and sex-disaggregated data for poverty
reduction planning. Data will be obtained from various sources such as the
Community-Based Monitoring System (CBFMS), Field Health Service

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Information System (FHSIS), administrative records of National Government
Agencies (NGAs), and the National Household Targeting System, among others.

Conduct of LPRAP Workshop. The LGUs, through the LPRATs, shall conduct a
workshop to formulate a Local Poverty Reduction Action Plan (LPRAP) based on
relevant sex-disaggregated economic, social and climate change vulnerability data,
as well as feedback from the members of the LPRAT. The active participation of
CSOs, basic sector representatives and other non-government stakeholders must be
ensured as they shall help validate data and analysis that will be presented by the
LGU. In addition, the LGU shall invite concerned Agency Regional Offices

(AROs) of the participating national agencies and government corporations to the
workshop to provide information on the programs of their respective agencies and
to provide technical assistance in the formulation of the LPRAP. The LPRAP
shall identify the poverty reduction strategy to be undertaken by the LGU and
other stakeholders, including the national agencies. Gender mainstreaming and
climate change adaptation strategies shall also be incorporated in the planning

process.

Identification of priority poverty reduction projects. During the LPRAP
Workshop, the LPRAT shall also identify gender-responsive, results-based priority
poverty reduction projects to be funded by the LGUs and those which will be
submitted to national agencies for consideration in the next General
Appropriations Act. The identified priority projects which will be funded by the
LGUs shall later be formalized and included in the LGU in its Annual Investment
Program (AIP) and local budget.

In identifying projects to be funded by the national government, LGUs are
encouraged to identify priority poverty reduction projects which are already being
undertaken by these national goverment agencies as listed in the Menu of
Programs determined by the DBM.

However, LGUs may still include projects outside of the Menu of Programs in
their list of priority projects if these are more urgently needed by the LGUs,
subject to further determination by the DBM that such projects can be
accommodated by the national government.


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Endorsement of CSOs. The list of priority projects requires the endorsement of
CSOs from the community before it can be considered by the national government
for inclusion in the latter’s budget. As representatives of the non-government
members of the LPRAT, the NAPC identified basic sector representative or an
NGA accredited/recognized CSO leader, a Pantawid Pamilya parent leader, or an
LGU accredited CSO must sign and endorse the list of priority projects as proof of
genuine participation in identifying the priority projects.

Approval of Sanggunian. The Sanggunian must also approve the list of priority
projects before it is submitted to the national government, through the issuance of

a Sanggunian Resolution.

Submission of the List of Priority Poverty Reduction Projects. The list of priority
poverty reduction projects duly endorsed by the CSOs and approved by the
Sanggunian shall be submitted to the RPRAT through the DILG Regional Office.

Integration of the LGU projects in the budgets of participating NGAs. The
DILG Regional Office shall consolidate all submitted LPRAPs and distribute
copies to the RPRAT members. The RPRAT shall review all identified LGU
projects that have been submitted to them for funding consideration. The RPRAT
shall then submit the list of priority poverty reduction projects to the Central
Offices (CO) of participating NGAs which are being requested to fund projects
included in the priority list, National Anti-Poverty Commission (NAPC) and the
regional offices of DBM, DILG, the Department of Social Welfare and
Development (DSWD), and the offices of the concerned District Representatives.
In cases where projects are not accepted by the RPRAT and have to be replaced,
the RPRAT shall duly inform the authorized LPRAT representatives, including the
three (3) CSO LPRAT signatories.

Agency budget submission to DBM. The participating NGAs should submit their
budget proposals, which incorporate the LGU identified priority projects, to DBM.


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Consolidation and review of all LGU identified priority projects. NAPC shall
also consolidate and summarize the list of priority projects submitted by the cities
and municipalities. This will then be compared with the lists submitted by each
participating NGA to ensure that all projects submitted by LGUs have been
considered by the concerned agency and that no LGU list of priority projects
exceeds the set budget cap. Projects that have not been included in the agency
ceilings shall be elevated to the NPRAT for consideration and action. The NPRAT
must submit budgetary recommendations to DBM concerning projects that have
not been included within the budget ceilings of participating agencies.

Institutionalizing governance reforms. LGUs that have shown a good track record
in their implementation of BuB shall be provided with performance incentives. To
qualify for the performance incentives, an LGU must comply with the following

conditions:

1. Good Financial Management
i. Attain Good Financial Housekeeping;
ii. Implementation of the PFM improvement measures as contained in the
duly PEM improvement plan.
2. Timely Implementation of BuB Projects
i. Completed at least 80% of the previous year’s BuB projects by
September 30 of the current year;
ii, Completed at least 50% of the current year’s BuB projects by September
30 of the current year;
iii, Computation of the percentage shall be based on number of projects and
not the budgetary allocation;
3. Participatory Governance
i. Have not been the subject of a complaint related to the participation of
CSOs in the BuB process that has been validated by the RPRAT;
ii, Conducting regular LPRAT meetings.

Based on the criteria, the RPRAT shall determine by October each year,
which LGUs will be eligible to receive incentives such as additional budgetary
allocation on top of the initial proposed budget cap that the LPRAP may submit

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for the succeeding year, and additional projects which may not necessarily be
included in the Menu of Programs provided that it must attain outcomes in any of
the following national budget priority areas:

Basic Education;
Public Health;

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Social Protection;
d. Disaster Risk Reduction and Management; and
e. Job Generation and Livelihood.

SEC. 5. Creation of the Local Poverty Reduction Action Team (LPRAT). — The LPRAT is
hereby created to spearhead the formulation and monitoring of the LPRAP. It shall be headed
by the Local Chief Executive (LCE) of the city or municipality as Chairperson, and the CSO
representative elected by the CSO Assembly, as the Co-Chairperson. It shall be composed of
the following members:
a. Representatives from Government:
1. District Representatives;
2. Sanggunian Panlungsod/Bayan Member which is the Chairperson of the
Committee on Appropriation;
3. Liga ng Barangay President;
4. All local government department heads such as the Planning Officer, Budget
Officer, Fishery and Aquaculture Officer, Social Welfare and Development
Officer, Health Officer, Public Employment Service Office (PESO) Manager
and Tourism Officer;
5. Representatives of NGAs such as the DSWD municipal links/National
Community Driven 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 (CENRO), PESO
representatives of the Department of Labor and Employment (DOLE) and
other NGA representatives.

b. Representatives from CSOs, who must be residents of the city or municipality that
can come from the following groups:
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1. Pantawid Pamilya Parent-Leaders recognized by DSWD;
DOH organized Community Health Teams;
Parent-Teacher Associations;

CSOs accredited or recognized by any NGA;

Women’s group;

Basic sector organization;

Basic sector organization recognized by NAPC;

Other community or grassroots organizations;

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In cities/municipalities where Indigenous peoples (IPs) comprise over twenty
percent (20%) of the population, one of the elected representatives must come
from the IP sector.

c. Representative from a local business group or association.

The LPRAT shall always be composed of an equal number of government and CSO
representatives. The members of the LPRAT should also be composed of at least 30%
women. It shall identify priority projects through a consensus among its members. If

consensus cannot be reached, the decision will be made through a majority vote.

Elected officials at the national and local levels, including the barangay, their
immediate relatives up to the first degree of consanguinity or affinity, and LGU employees
are ineligible to be elected as CSO representatives.

SEC. 6. Roles and Responsibilities of the LPRAT. — The LPRAT shall:

a. Organize and facilitate the conduct of workshops for the formulation of the
LPRAP;

b. Identify poverty reduction strategies to be undertaken by the LGU and other
stakeholders based on the results of the poverty situational analysis;

c. Identify priority poverty reduction projects;

d. Identify additional projects that could serve as replacement in case any of the
submitted projects are not accepted during the RPRAT validation;

e. Monitor the projects and programs that shall be funded by the annual National
Budget;

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£. Adopt rules of procedures for the orderly and expeditious conduct of meetings and
other business of the team;
g. Perform such other acts and functions as may be necessary.

SEC. 7. Creation of the Regional Poverty Reduction Action Team (RPRAT). ~The RPRAT
is hereby created to provide support and guidance to LGUs throughout the BuB process and
make decisions on implementation issues raised at the regional level. It shall be headed by
the DILG Regional Director as Chairperson and the DBM Regional Director and NAPC
Secretariat Representative as Vice-Chairpersons. It shall be composed of the following

members:

a. Regional Directors of BuB participating agencies;

b. Designated representatives of participating agencies that do not have regional
offices;

c. All Provincial Planning and Development Coordinators (PPDCs) in the region;

d. NAPC Sectoral representatives (SR) as identified by the NAPC Office of the Vice-
Chair for the Basic Sectors who must be a resident of the region, and a Basic
Sector Council member selected from among Basic Sector Council members in the
region;

e. All the NAPC Provincial Focal Persons (PFPs) and their alternates who are elected
in the process facilitated by the NAPC and the alternate representative selected by
the PFP. This does not refer to the elected members of the basic sectors of NAPC

at the national level.

‘The DILG shall serve as the Secretariat of the RPRAT. The Secretariat shall be
composed of the DILG BuB Focal Person, the Regional coordinator and other personnel as
may be assigned by the RPRAT Chairperson.

SEC. 8. Roles and Responsibilities of the RPRAT. ~ The RPRAT shall:

a. Conduct orientation workshops for the LPRAT on the bottom-up budgeting
process,

b. Take the lead in organizing workshops and monitoring the bottom-up process;

c. Actas the resource person on the guidelines on bottom-up budgeting;


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d. Responsible in engaging the DSWD Municipal link and the Pantawid Pamilya
family leaders especially in the formulation of multi-year work and financial plans
for addressing supply side challenges;

e. Monitor the activities of the LGUs and the progress of submission of project
proposals and LPRAPs to DBM and DILG, among others;

{Ensure that the LGUs submit priority projects within their budget cap and inform
the HDPRC and NAPC of cases of non-compliance;

g. Inform the RDCs about the inclusion of programs and projects for the cities and
municipalities in the budget proposals of the participating agencies.

SEC. 9. Creation of the National Poverty Reduction Action Team (NPRAT).~ The NPRAT
is hereby created composed of senior officials of the DILG, DBM, DSWD, DOLE, NAPC,
Department of Agriculture (DA), Department of Education (DepEd), Department of Energy
(DOE), Department of Environment and Natural Resources (DENR), Department of Health
(DOH), Department of Trade and Industry (DTI), National Commission on Indigenous
Peoples (NCIP), Technical Education and Skills Development Authority (TESDA), National
Electrification Administration (NEA) and the Philippine Coconut Authority (PCA). The
DILG shall serve as its Chairperson while the DBM and NAPC shall serve as Vice-
Chairpersons. It shall serve as a coordinating body among the participating agencies where
implementation issues can be discussed and addressed.

SEC. 10. Report and Feedback Mechanism. — The process involved including experiences
and lessons learned and possible recommendations for improvement shall be properly
documented. Further, mapping of the approved project of LGUs and communities shall be
posted in the appropriate government websites and other public posting areas of the LGUs
and all participating NGAs.

A Grievance and Redress Mechanism (GRM) shall be established to address
complaints and concerns raised by any BuB stakeholder or concerned citizen relating to BuB

planning and project identification or project implementation.

SEC. 11. Implementing Rules and Regulations. — Within sixty (60) days after the effectivity
of this Act, the Department of Interior and Local Government (DILG), Department of Budget
and Management (DBM), and the National Anti-Poverty Commission (NAPC), in

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consultation with the concerned agencies and CSOs, shall promulgate the rules and
regulations necessary for the implementation of this Act.

SEC. 12. Separability Clause. — If any provision of this Act is declared unconstitutional, the
same shall not affect the validity and effectivity of the other provisions hereof.

SEC. 13. Repealing Clause. -DBM-DILG-DSWD-NAPC Joint Memorandum Circular No.
7, s. 2015 is hereby repealed. All laws, decrees, orders, issuances, rules and regulations or

parts thereof inconsistent with this Act are hereby repealed or modified accordingly.

SEC. 14. Effectivity. - This Act shall take effect fifteen (15) days after its publication in the

Official Gazette or in a newspaper of general circulation.

Approved,