AT least P130 billion could be freed up from local government units’ (LGU) budgets to help them address the growing fallout from the coronavirus disease 2019 (COVID-19) after the National Government allowed them to use their development funds.

This, after some officials of LGUs expressed concern that their funds meant to respond to the pandemic might be depleted soon.

LGUs can now use 20% of their annual Internal Revenue Allotment (IRA) on COVID-19-related expenses according to Joint Memorandum Circular (JMC) No. 2020-001 issued by the Departments of Budget and Management (DBM) and Interior and Local Government (DILG).

Out of the P4.1-trillion spending plan for this year, LGUs were automatically allotted P648.921 billion in IRA, or their share in government revenues equivalent to 40% of national taxes collected three years before the current fiscal year. From their share, which is computed based on land area, population and type of LGU, local governments must allocate at least 20% for development projects or P129.784 billion in total for 2020.

DBM confirmed that P130 billion is the minimum amount LGUs should have allocated for their development fund this year.

It is up to the LGUs how much they are willing to use from the fund to finance their efforts against COVID-19, Budget Secretary Wendel E. Avisado said in a mobile phone message

Initially, this share could only be used for priority development projects under LGU’s approved local development plans and annual investment plan, which are programmed for socioeconomic and environmental development.

The coverage was expanded through the JMC dated March 27 to include COVID-19-related expenses, including the purchase of personal protective equipment, testing kits, medicines, vitamins, hospital tools and supplies, disinfectants, sprayers and other disinfecting supplies and equipment.

The fund can also be used on food, transportation and other expenses of health workers and other personnel involved in COVID-19 response, as well as on relief goods for affected families, construction of additional buildings to house the patients and those being monitored, mobile testing laboratories and temporary shelters for homeless and training of personnel for emergency response, among others.

“It is the responsibility of every local chief executive to ensure that the leeway and flexibility afforded on the utilization of the 20% development fund be optimally utilized for the benefit and welfare of constituent communities supporting measures and initiatives to provide basic needs of affected individuals and arrest the spread of COVID-19,” the circular posted yesterday.

But according to the circular, the funds should not be used for personnel service expenditures such as salaries, overtime pay and other benefits, for administrative and travel expenses, registration and participation fees for trainings and seminars, payment for furniture, equipment and appliances of administrative offices, as well as to buy or repair vehicles.

It said using the development fund for disallowed purposes, “whether wilfully or through negligence…shall be subject to the sanctions” under related laws.

DILG Undersecretary Jonathan E. Malaya first announced this move at a televised briefing on Saturday after the circular was signed by DILG Secretary Eduardo M. Año and DBM’s Mr. Avisado.

Mr. Malaya said there were reports that some mayors were worried that their quick response funds would get depleted soon.

LGUs were already given the go signal to use the P16-billion calamity fund to respond to the pandemic when the whole country was placed under a state of national calamity for six months.

The government rolled out an initial P27.1-billion economic funding package to help distressed sectors, while Republic Act No. 11469 or the “Bayanihan to Heal as One Act” signed last week allows the government to realign as much as P275 billion from the national budget and make off-budget outlays for COVID-19 relief measures. — Beatrice M. Laforga