SEVENTEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES )

Second Regular Session ) 48 MAY 31 Al2 39

SENATE
$.B.No.__1843

(In Substitution of S.B. No. 1656)

Prepared and submitted jointly by the Committees on Local Goverment and
Finance, with Senators Angara and Legarda as authors.

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 |
GENERAL PROVISIONS

SECTION 1. Short Title. — This Act shall be known as “The Seal of Good Local
Governance Act of 2018 or The SGLG Act of 2018”.

‘SEC. 2. Declaration of Policy. — It is hereby the declared policy of the State to
recognize the good performance of Local Government Units (LGUs) 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, encourage
outcome-based performance and to reward local governments for their effort in
pursuing the general welfare of their constituency and in enforcing existing laws.



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SEC. 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 LGUs and is a continuing commitment for LGUs to continually

Progress and improve its performance in the following areas (the “Criteria”):

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Uphold the practice of transparency and accountability in the use of
public funds;

. Organize, set-up and sustain health programs that would strengthen

and benefit its constituents;

. Prepare for challenges brought about by unpredictable natural

calamities;

|. Demonstrate the readiness to help and sensitivity to the needs of

vulnerable and marginalized sectors of society;

. Institute education reforms and programs to improve the quality of

education in the country;
Encourage investment and employment;

. Protect constituents from threats to life and damage to property; and,

h. Safeguard and protect the integrity of the environment through

adaptive social responsibility.

SEC. 4. Institutional Mechanism; Implementing Agency. — There is hereby
established a Council of Good Local Governance (the “Council’), which shall be
composed of the following:

a. Department of the Interior and Local Government (DILG);

b. Department of Budget and Management (DBM);

c. Department of Finance (DOF);

d. National Economic Development Authority (NEDA);

e. Representative from the Union of Local Authorities of the
Philippines (ULAP); and
Representative from Civil Society Organizations (CSOs).

The Council shalll act as an advisory body to ensure the proper implementation of

the SGLG.



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Every year, the Council shall, if necessary, review and/or revise the criteria
consistent with long-term development plans of the national government. The
development of these indicators should reflect outcomes that are performance-
based, encouraging outputs that reflect concrete benefits to the community in terms
of policy, rules, regulation, behaviour and skill competencies, knowledge or attitude.

For education, the development of the indicators should be based on outcomes
that demonstrate positive changes in the behavior and performance of children as
evidence of their equal access to quality education.

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, in consultation
and coordination with partner agencies or sectors, be responsible for assessment
and evaluation of each LGU relative to their compliance with the Criteria, and
recommend to the Council whether an LGU qualifies to be conferred or awarded the
SGLG.

SEC. 5. Criteria. — For the purpose of this Act, the areas in the Criteria shall be
understood and interpreted as follows:

1. GOOD FISCAL OR FINANCIAL ADMINISTRATION OR FINANCIAL
SUSTAINABILITY - 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, (b) full, strict, and
exacting compliance with the Full Disclosure Policy (FDP) of Local
Budget and Finances, Bids and Public Offerings, and (c) posting of



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financial documents required to be posted in the FDP Portal in the local
government's website.

. 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.

. DISASTER PREPAREDNESS - 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 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)
providing access for PWDs, senior citizens and pregnant women in
frontline services, (c) enhancing mobility for PWDs in public
infrastructures like local government centers and hospitals in
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accordance with the Accessibility Law, (d) mandatory representation of
indigenous people in compliance with the Indigenous Peoples Rights
Act of 1997, (e) compliance with the mandatory representation in the
sanggunian with representative accorded with regular privileges and
emoluments of a sanggunian member, (f) the presence of at least one
accredited LGU-managed residential care facility for the vuinerable
sectors, and (g) representation from NGOs in the local development
council consistent with the pertinent provisions of the Local
Government Code.

. PROGRAMS FOR SUSTAINABLE EDUCATION - This refers to the

initiatives of an LGU to institute education reforms and programs for
the purpose of improving the quality of education in the country.
Indicators include but are not limited to the (a) increased participation
rate of students, (b) decreased number of drop-outs as well as out-of-
school youths, (c) increase in cohort survival rates, (d) increase in
achievement scores as measured by National Tests or Assessment
Tools, and (e) establishment of child development centers, support to
‘special education and the alternative learning system.

. BUSINESS FRIENDLINESS AND COMPETITIVENESS - 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



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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 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.

. ENVIRONMENTAL MANAGEMENT- 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.

. TOURISM, CULTURE AND ARTS — This refers to an LGU's ability to

Promote and protect local heritage and culture, or local legacy, in terms
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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, (e) 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;

Provided, that, the Council shall determine the criteria applicable to barangays
aimed at enhancing the delivery of basic services and facilities as provided under
Republic Act No. 7160, otherwise known as the “Local Government Code of 1991.”

‘SEC. 6. Requisites to Qualify for SGLG — An LGU, which, according to the
assessment of the DILG, complies, qualifies, and passes all assessment areas as
Provided in Section 5 of this Act, subject to the approval of the DILG, shall be
conferred and awarded the SGLG and granted the Corresponding incentive as
provided under Section 9 of this Act.

SEC. 7. 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.

SEC. 8. Implementing Rules and Regulations. - The Council 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.

SEC. 9. 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
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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 Council established under Section 4 of this Act shall have the authority to
determine the monetary incentives for LGUs based on the number of awardees. It
shall also 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.

SEC. 10. Use and Limitations on Expenditures. - Payouts from the SGLG
Fund shall be governed by the policies governing the utilization of the 20% of the
Annual IRA for local development projects, the Annual Investment Program (AIP)
and the Local Development Investment Program (LDIP).

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;

¢. 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;

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

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



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g. Asa loan guarantee.

SEC. 11. Technical Assistance for Capacity-Building. The DILG shall release
the governance assessment report which shall, in part, identify the local governance
gaps to the respective LGUs. The respective national agencies shall provide
technical assistance for capacity-building to the identified gaps of the LGUs which
have not qualified for the award of the SGLG.

SEC. 12 Management and Administration of the SGLG Fund. - The SGLG
Fund established under Section 9 of this Act shall be managed and administered by
the DILG upon advice 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.

SEC. 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.

SEC. 14. Funding. - The activities and operational expenses, other than the
incentive payouts, related to the implementation of this Act shall be initially funded
from the DILG’s Performance Challenge Fund. Thereafter, the DILG shall include in
its annual budget to be incorporated in the GAA such sums for the continued
implementation of this Act.

SEC. 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



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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.

SEC. 16. Retroactivity Clause. — This Act shall have retroactive effect insofar as
it does not prejudice or impair vested or acquired rights.

SEC. 17. Repealing Clause. — All laws, presidential decrees, executive orders,
ules 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.

SEC. 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.

SEC. 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,