2.  Legal Basis of Plan-Budget Linkage
 Harmonizing Plans with the Budget
oDevelopment Plan for Provinces and
Highly-Urbanized Cities
oDevelopment Plan for Cities and
Municipalities
oLocal Development Investment
Program
o Annual Investment Program
• Key Players
• Flow Chart
 Policy Guides on a Plan-Budget Linkage
 Synchronizing the Plan-Budget Calendar

3. LEGAL BASIS
There are four basic principles provided in the
Local Code of 1991:
1. Local budget plans and goals shall, as far as practicable, be harmonized with
national development plans, goals and strategies in order to optimize the
utilization of resources and to avoid duplication in the use of fiscal and physical
resources (Section 305 h);
2. Local budgets shall operationalize approved local development plans
(Section 305 i);
3. Local governments shall formulate sound financial plans. The local budgets
shall be based on functions, projects and activities in terms of expected results
(Section 305 g);
4. Budgets of LGUs shall include a brief description of the functions, projects
and activities for the ensuing fiscal year; expected results for each function,
project and activity; and the nature of work to be performed, including the
objects of expenditure for each function, project and activity (Section 317b 3).

4. HARMONIZING PLANS WITH THE
BUDGET
 DBM-NEDA-DILG-DOF JMC No. 1, Series of 2007
dated 08 March 2007
 common direction in the implementation and
achievement of local endeavors
 strengthen the interface and complementation
between LGUs, national government agencies
(NGAs), among all LGUs in all levels
(vertically and horizontally), and funding
institutions and donor agencies
 achieving efficiency and effectiveness in the
allocation of resources

5. The Plan-Budget Link
Model
PLAN
PDPFP/CDP
LDIP
DEVELOPMENT
PLANNING
(6-15 Years)
(3-6 Years)
INVESTMENT
PROGRAMMING
LINK
BUDGET
AIP
ANNUAL BUDGET
AND
SUPPLEMENTAL
BUDGET
(1 Year)
BUDGETING
( 1 Year)

6. Development Plan for Provinces and
Highly-Urbanized Cities
 Provincial Development
Framework Plan (PDPFP)
and
Physical
 a six-year plan that merges the
traditionally separate provincial physical
framework
plan
and
provincial
development plan
 contains the long-term vision of the

7. Development Plan for Cities and
Municipalities
 Comprehensive Development Plan (CDP)
 multi-sectoral plan formulated at the
city/municipal level embodying the vision,
sectoral
goals,
objectives
development
strategies, and policies
 contains corresponding PPAs which serve as
primary inputs to investment programming and
subsequent budgeting and implementation of
projects

8. Local Development Investment
Program
 a programming document
 shall be prepare when the PDPFP for
provinces
and
CDP
for
cities
and
municipalities already approved
 Investment programming covers 3 to 6
years
six-year rolling program at the provincial
level which coincides with the time frame

9. Annual Investment Program
.
 another document to be submitted by the LDC
to the LFC as mandated under Article 410 of the
IRR of R.A. No. 7160
 prepared and approved during the fiscal year
before budget preparation (basis for the
preparation of Annual and Supplemental
Budgets)
 refers to the annual slice of the LDIP which
constitutes the total resource requirements for
all PPAs
• annual capital expenditure
• regular operating requirements of the

10. PLAN
BUDGET
ANNUAL
INVESTMENT
PROGRAM

11. Key Players
Local Development Council
LCE
LPDC
Sanggunian
Budget Officer
NGOs, Civil Society
Groups and Other
Stakeholders

12. Flow Chart
Aligns Development
Plan/ELA (PDPFP/CDP)
with Current Development
Issues
LCE Presents AIP to LDC
for Deliberation
Updates AIP to consider
new and unimplemented
PPAs
Prepares Draft AIP and
present to LCE for Review
Determines Annual
Resource Requirements of
Priority Development
Projects from LDIP Funded
from 20% of IRA, General
Fund and Other Sources
Funds
Determines Resource
Requirements of PPAs for
Basic Services Delivery
and Administrative/
Legislative Services
LDC Deliberates
on/Endorses AIP to Local
Sanggunian
Approves AIP for the
Budget Year

13. Policy Guides on a Plan-Budget
Linkage
Development planning
 shall not be limited to projects and activities to be funded by the 20%
Development Fund
 in general, medium-term and for provinces, covers a six-year period rolling plan
Annual/ supplemental budgets
shall be dedicated to sustainable human development
Local elective officials
 shall develop the capacity to mobilize resources and
sustainability
 to develop the capabilities of their people in the long-term
ensure
program
Local budgets
 shall be policy-driven and performance - based. Policy formulation shall include:
•Explicit policy directions to eliminate poverty and unemployment;
•Policies on how the budget shall be financed in the medium-term and how it is
shall be allocated among priority PPAs in the short-term

14. Synchronizing the Plan-Budget
Calendar
Jan 1 - 15
LCE issues Executive Order directing the updating of
the LDIP & the AIP
Jan 16 - 31
Review of all objectives and policies
Feb. 1 - 15
Feb. 16 - 28
• Objective setting / Strategy formulation
• Policy revision/ formulation
• Prioritization of PPAs
• Consolidation of revised objectives, strategies &
prioritized PPAs
• Input review results in AIP forms
• Multi-stakeholder consultation on draft AIP

15. March 1-15
March 16-30
April 1- 30
• Match investment requirements with available
resources.
• Revise draft AIP if resources are inadequate;
formulate needed policies
• Finalize AIP for endorsement to Sanggunian
• Sanggunian deliberates
LFC elevates to higher LGU/ NGRO AIP – identified
projects that cannot be financed by the concerned
lower LGU.
Higher LDC deliberates on projects proposed by
lower LGU for funding.

16. May 1- June 15
June 16-30
LFC prepares profiles of PPAs to be funded from the
General Fund of the LGU
•
•
•
LCE issues “Budget Call” based on AIP (done after
the initial IRA share is released by DBM)
LFC finalizes spending ceiling by sector/ office
LFC conducts workshop / forum on the Budget
Call
July 1-Aug. 15
Department Heads prepare & submit budget
proposals
Aug. 16–Sept. 15
LFC conducts technical budget hearings on
proposals submitted by Department Heads

17. Sept. 16 - 30
Oct. 1 - 15
LFC consolidates budget proposals into a Local
Expenditure Program (LEP) and prepares the Budget
of Expenditure and Sources of Financing (BESF)
LCE prepares Budget message & submits the same
to the Sanggunian with the Executive Budget
consisting of the LEP & BESF.

18. THE PLAN-BUDGET CYCLE
DEVELOPMENT
PLANNING
(6-15 years)
INVESTMENT
PROGRAMMING
(3-5 years)
BUDGET
ACCOUNTABILITY
BUDGET
YEAR
CURRENT
YEAR
(Jan.- June)
(Jan.- Dec.)
AIP
(1 year)
BUDGET
EXECUTION
CURRENT
YEAR
(July- Dec.)
BUDGET REVIEW
BUDGET
PREPARATION

19. THANK YOU