1.

0 Local Development Investment Programming

The Local Development Investment Program (LDIP) is an official document that links
the local development plans, or the Comprehensive Land Use Plan (CLUP) and
Comprehensive Development Plan (CDP), to the actual annual investment budget of
the Local Government Unit in order to translate the plans into actual programs.

The LDIP shall contain the list of prioritized Programs, Projects and Activities (PPAs),
which were derived from the CLUP and CDP, matched with available financial
resources that are to be implemented annually within a three- to six-year period.

This program seeks to allocate a portion of the annual budget of the Municipality of
Camiling, as well as soliciting loans and grants and/or partnering with private sectors
for the implementation of priority projects.

This LDIP covers the period from the Year 2011 up to the Year 2016.

1.1. The Local Development Investment Programming Process

The preparations for this final document have three components: (1) Preparing the
project list; (2) Financial analysis and projections; and (3) fiscal programming and
management.

1.1.1. Preparing the Final Project List

The team came up with a list of strategies and PPAs that were evaluated on the
basis of their potential contribution to the realization of the Municipality’s vision and
sectoral goals. Indicative budgets were also indicated for each project activity.

Due to limited budget, prioritization resulted in targeting projects that should be

immediately implemented to increase the human development index of the
population and further achieve the goals set by the different sectors.

1.1.2. Financial Analysis and Projections

For the Municipality of Camiling, the funds available for public investments are the
funds not allotted for Personnel Services, Office Maintenance and Operations, Debt
Services, and Mandatory Reserves and Other Statutory Obligations.

1.1.3. Fiscal Management

The projected funds of Camiling and the funds available for public investments are
found to be limited. The municipality should either prioritize limited projects and/or
adopt several options or a combination of external funding sources.

Additional funding may be sourced by:

a. Improving collection of revenue sources;

b. Cutting on non-essential expenditures; and
c. Updating and enacting local tax codes

There is also opportunity for the Municipality to tap:

a. Private companies with available funding or grants and/or entering into joint
venture agreements, also known as Public-Private partnerships; and
 b. Partnership with National Government Agencies (NGAs) and other sectors for
funding and implementation.

1.2. The LDIP and Annual Budgeting

The LDIP simplifies the determination of PPAs to be funded through the annual
budget. A yearly batch of PPAs is listed, as well as the estimated cost per project.
This is also called as the Annual Investment Plan of the Municipality for the next six
year. However, this document and indicative AIP has to be validated by the Municipal
Planning and Development and Local Finance Committees and the Sangguniang
Bayan.

The list of PPAs (attached as appendix to this document) may also be reviewed and
recalibrated for future investment programming. The LGU is also given the
opportunity to take other options to enable to invest in bigger projects.

2.0 Selection and Prioritization of PPAs

2.1 Random List of Selected PPAs

Listed in this chapter are the PPAs classified according to sectoral themes. This
listing of programs and projects were prepared based on sectoral goals and
objectives. The team carefully studied all PPAs considering repetitive and redundant
projects or those may have irrational indicative cost estimated.

The final list of PPAs was then prepared. (See Appendix A)

2.1.1 Social Development Sector

 Medical Supplies, Equipment and Facilities Enhancement Program
 Establishment of two (2) Municipal Cemeteries
 Educators Empowerment Program
 Physical and School Site Development Program
 College Grants and Scholarship Program
 Self-Employment Assistance Program
 Social Welfare Program and Services
 Social Welfare Personnel Enhancement Program
 Emergency Management Program
 Culture and Arts Promotion Development Program
 Capability Enhancement Program
 House Financing Packages Program

2.1.2 Environmental Management Sector

 Land Resources Conservation, Management and Protection Program
 Water Resources Management Program
 Pollution Control Program
 Ecological Solid Waste Management Program

2.1.3 Economic Development Sector

 Agricultural Land Protection and Conservation Program
 Training on Lowland Rice and Vegetable Production
 Intensive Small Farms Systems
 Repair/Upgrade of Slaughterhouse
  Soil Analysis
 Formation and Sustainability of Farmers’ Cooperatives
 Promotion of a Business-Friendly Market
 Market Development
 Promotion of Culture and Historical Sites

2.1.4 Land Use and Infrastructure Development Sector

 Power Service Expansion Program
 Installation and Maintenance of Street Lights
 Water Service Expansion Program
 Supply, Fabrication and Installation of House Numbers
 Expansion of Telecommunication Facilities Program
 Postal Services Improvement Program
 Irrigation Services Expansion Program
 Drainage and Sewerage Master Plan
 Flood Control Program
 Transport Development Program

2.1.5 Institutional Development Sector

 Organization Improvement Program
 Comprehensive Capacity Building Program
 Tax Database Management
 Management Information System
 Transaction Monitoring and Management Program

2.2 Ranked List of PPAs

After screening through ranking based on the contribution of the project to the
different sectors and targets, the PPAs were ranked according to the top priorities for
the 2011-2015 LDIP. See Appendix B for the List of PPAs according to ranking.

While Table 2.1 shows the top three programs for each sector as per the ranking and
prioritization.

Table 3.1 Top three programs pre sector

Social Welfare Program and Services

Medical Supplies, Equipment and Facilities

Social Development Sector
Enhancement Program

Establishment of two (2) Municipal Cemeteries

Ecological Solid Waste Management Program

Environmental Management Land Resources Conservation, Management,

Sector and Protection Program

Pollution Control Program

Promotion of a Business-Friendly Market

Economic Development Sector
Intensive Small Farm Systems
 Market Development

Irrigation Services Expansion Program

Land Use and Infrastructure
Transportation Development Program
Development Sector
Flood Control Program

Organization Improvement Program

Institutional Development
Tax Database Management
Sector
Comprehensive Capacity Building Program

3.0 Analysis of Local Fiscal Capability

3.1 Past Revenue Performance

a. Patterns and Extent of Revenue Generation. The major revenue comes from
external sources. For the period 2005-2008, the municipality was 71% IRA-
dependent, while 4% of income comes from tax revenues.

As for total local income collection, it generated PhP22. 5 million for the period 2005-
2008 (Table 3.1). Local income fluctuated in the four year period due to increase in
capital outlay especially in year 2008.

Average growth rate is at 11%. This is relatively low compared to the annual increase
in internal revenue allotment.

Table 3.1 Local Income and Growth Rate, 2005-2008 (in pesos)
Year Local Income Growth Rate
2005 7, 558, 381.60
2006 3, 585, 996.75 -52%
2007 9, 543, 622.65 166%
2008 1, 817, 039.73 -81%
Average 5, 626, 260.15 11%

b. Collection Efficiency. Collection from Real Property Tax (RPT) from 2005-2008
totaled PhP 6.3 million. Table 3.2 shows that the municipality has an average
collection efficiency rate of 121%. The municipality has prioritized revenue as
additional income. However, a more efficient and effective tax mapping and
assessment system will allow the municipality to compute a closer estimate to
income from RPT and further improve the municipality’s budget estimate and
collection efficiency.

Table 3.2 Total RPT Collection, Estimated Collectible and Collection Efficiency
Performance Rate, 2005-2008 (in pesos)

Year Total RPT Estimated Difference Collection

Collection Collectible Efficiency
 2005 1, 484, 262.26 1, 300, 000.00 184, 262.26 141%
2006 1, 572, 996.70 1, 390, 000.00 182, 996.70 131%
2007 1, 544, 942.26 1, 455, 000.00 89, 942.26 106%
2008 1, 676, 656.62 1, 515, 000.00 161, 636.62 106%
Average 1, 569, 714.46 1, 415, 000.00 154, 709.46 121%

c. Self-Reliance. The self-reliance index of Camiling has increased by minimal

decimal points from 2005 to 2008 reports. The increasing trend in self-reliance level
is attributed to the high local income of Camiling despite the increase in IRA
allotment that the municipality received.

Figure 3.3 Self Reliance Index of Camiling (2005-2008)

d. Internal Revenue Allotment Dependence. For the period 2004-2008, IRA

dependence of the municipality is decreasing from 72.5% in 2005 to 71.81% in 2008
(Figure 1.2.4), while there is only minimal decrease in percentage. For that period,
the average percentage share of IRA in total revenue is 72.29%.

Figure 3.4 IRA Dependence Index of Camiling (2005-2008)

e. Outstanding Loans

In June 2010, International Funding Institution World Bank granted a loan to the
Municipality of Camiling, through Land Bank of the Philippines in Concepcion, Tarlac
amounting to PhP 105, 000, 000 payable in fifteen years, with a fixed interest rate of
9%.

The loan project was allotted for the construction of the new public market in the
poblacion. The counterpart of the LGU for the project amounted to PhP 15, 000, 000.

f. Personnel Service Expenditure vis-à-vis Annual Income.

Table 3.5 Total Annual Income and Total PS, 2005-2008 (in pesos)

% Share % Share of
of Total Total
PS Income of PS Actual Income of
Year Total Income
Appropriation Next Obligation Next
Preceding Preceding
Year Year
200 74, 723, 324.20 35, 260, 32, 072,
5 646.66 975.99
200 81, 645, 801.70 39, 912, 52% 36, 963, 49%
6 314.95 358.15
200 90, 158, 069.64 41, 959, 51% 39, 732, 48%
7 694.30 583.40
200 104, 358, 45, 927, 51% 42, 836, 47%
8 675.98 674.95 849.74

The PS expenses did not necessarily exceed the budget limit for Personnel Services
of not more that 45% of the actual budget. The data above includes actual expenses
for government plantilla positions, including salary of job orders and casuals that are
taken from economic enterprises and MOOE.
 g. Expenditure by Function

For the period 2005-2008, Camiling has had an average annual increase by 16%. As
presented in Table 3.6, General Services’ expenditure increases by 18% annually,
while Social Services expense increased by 19%, Economic Services by 7% and an
increase of 18% annually for other remaining services.

Table 3.6 Total Expenditure per Sector, 2005-2008 (in pesos)

Year Average
Sectors Growth
2005 2006 2007 2008 Rate (%)
General
31,850,319.05 37,645,148.38 36,807,531.48 51,673,326.62 18%
Services
Social
15,668,350.53 17,084,319.48 16,719,115.48 25,158,923.12 19%
Services
Economic
9,993,099.44 10,191,921.64 12,219,536.79 12,123,740.08 7%
Services
Other
9,524,265.90 13,009,507.77 14,739,355.56 15,532,270.88 18%
Purpose
Total 67,036,034.92 77,930,897.27 80,485,539.31 104,488,260.70 16%

3.2 Comparison of Income and Expenditure

From 2005-2008, the Municipality’s income generally increased while its total
expenditure also increased by various percentages. In the year 2008, data showed a
deficit in the total income and actual total expenditure by PhP 129,584.72. The total
income however has increased by a mean annual growth rate by 12% in four years.

Table 3.7 Total Income and Total Expenditure, 2005-2008 (in pesos)
Annual Annual
Total
Year Total Income Growth Growth Surplus/(Deficit)
Expenditure
Rate Rate
2005 74, 723, 324.20 67,036,034.92 7,687,289.28
2006 81, 645, 801.70 10% 77,930,897.27 16.25% 4,714,904.43
2007 90, 158, 069.64 15% 80,485,539.31 3% 9,672,530.33
2008 104, 358, 675.98 11% 104,488,260.70 30% (129,584.72)
Average 87,721,467.88 12% 82,485,183.05 16.5% 21,945,139.32

3.3 Projected Income and Expenditures

In the computation of the projected income and expenditures, the team utilized the
trend forecasting method. The basis for this computation of projected income and
expenditure of the LGU using this method is the Municipality’s past revenue and
expenditure performance for the period 2005-2008. The trending method presents
that external income from Internal Revenue Allotment (IRA) will have an annual
increase of 11%.

3.3.1 Projected Income

The income projections for 2011-2016 range from PhP 140 million to PhP 200 million
with receipts from economic revenues posing to be the local government’s biggest
source of local revenues.

Table 3.8 Projected Income Using Trend Forecasting (in Php), 2011-2016
Increase from
Year Projected Income
Previous Year
2011 141,343,390.75 11.8%
2012 153,671,629.00 9%
2013 165,999,867.26 8%
2014 178,328,105.51 7%
2015 190,656,343.77 7%
2016 202,984,582.03 6%
Average 172,163,986.39 8.1%

Internal Revenue Allotment (IRA) was projected to increase by 11.45%. It is to

increase from PhP 75 million in 2008 to PhP 100 million and Php 141 million in 2011
and 2016, respectively.

Table 3.9 Projected IRA Using Trend Forecasting (in Php), 2011-2016
Increase from
Year Projected IRA
Previous Year
2011 100,691,725.89 10%
2012 109,275,053.53 9%
2013 117,858,381.16 8%
2014 126,441,708.79 7%
2015 135,025,036.42 7%
2016 143,608,364.05 6%
Average 122,150,044.97 7.8%

Locally-generated income is expected to increase to Php 59 million in 2016, from the

year 2008’s PhP 23 million.

Table 3.10 Projected Local Income Using Trend Forecasting (in Php), 2011-2016
Increase from
Year Projected Income
Previous Year
2011 40,651,664.86 10.1%
 2012 44,396,575.47 9.2%
2013 48,141,486.10 8%
2014 51,886,396.72 8%
2015 55,631,307.35 7%
2016 59,376,217.98 7%
Average 50,013,941.41 8%

3.3.2 Projected Expenditure

Using the Trend Forecasting Method has shown the big increase in the expenditure
of the Municipality of Camiling that exceeds its projected income. Table 3.1.10
presents the Projected Expenditure of the municipality by applying trend forecasting
method but limiting the annual increase in budget for Capital Outlay and MOOE.

Table 3.11 Projected Local Expenditure Using Trend Forecasting (in Php), 2011-
2016
Total Capital Debt
Year PS MOOE
Expenditure Outlay Services
2011 40,651,664.86 54,265,721.25 58,448,661.95 18,099,461.67 16,159,015.00
2012 44,396,575.47 58,075,345.09 62,944,712.87 19,491,727.95 15,507,914.83
2013 48,141,486.10 61,884,968.92 67,440,763.79 20,883,994.23 14,811,592.97
2014 51,886,396.72 65,694,592.76 71,936,814.70 22,276,260.51 14,137,881.96
2015 55,631,307.35 69,504,216.60 76,432,865.62 23,668,526.79 13,464,170.94
2016 59,376,217.98 73,313,840.44 80,928,916.54 25,060,793.08 12,805,687.64
Average 50,013,941.41 63,789,780.84 69,688,789.25 21,580,127.37 14,481,043.89

3.4.1 1st Approach: Projected Funds Available for Investment Programming

Using Trend Forecasting Method

Table 3.12 presents the Projection of future fiscal balance that can be made available
for the roll out of priority PPAs for year 2011-2015. Data shows that there may be
deficit in the actual budget when the expenditures is not limited and continues to
exceed the projected budget available for the LGU.
 Table 3.12 Projection of Future Fiscal Balance Using Trend Forecasting
(in Php), 2011-2016
Particulars 2011 2012 2013 2014 2015 2016

Projected
141,343,390.75 153,671,629.00 165,999,867.26 178,328,105.51 190,656,343.77 202,984,582.03
Income
LESS
Projected PS,
MOOE, Capital 146,972,859.87 156,019,700.74 165,021,319.91 174,045,549.93 183,069,779.95 192,109,237.70
Outlay, Debt
Services

Funds
Available for (5,629,469.12) (2,348,071.74) 978,547.35 4,282,555.58 7,586,563.82 10,875,344.33
Investment
3.4.2 2nd Approach: 20% of the LGU IRA allotted for development projects

This second approach is based on Section 287 of the Local Government Code,
which provides that each local government unit shall appropriate in its annual budget
no less than 20% of its annual IRA for development projects. If this is to be so, an
annual average of PhP 24.4 million or a total of Php 146.5 million (for the six years)
can be made available to be invested in local development programs and projects.

Table 3.13 Projection of Future Fiscal Balance 2 (in Php), 2011-2016

Year Projected IRA 20%
2011 100,691,725.89 20,138,345.18
2012 109,275,053.53 21,855,010.71
2013 117,858,381.16 23,571,676.23
2014 126,441,708.79 25,288,341.76
2015 135,025,036.42 27,005,007.28
2016 143,608,364.05 28,721,672.81
Average 122,150,044.97 24,430,009

4.0 Indicative Six-Year Investment Program

4.1 Investment Programming and Budgeting

The ranking based on the GAM results is the primary consideration in the proposed
schedule and phasing of the PPA implementation. The proposed PPA
implementation schedule and phasing guided the preparation of the investment
program for the Municipality.

Two investment programs were prepared for the Municipality: a) First Investment
Program that assumes that 100% of the funding requirement will be provided by the
Municipality (See Appendix C); and b) Second Investment Program (See Appendix
D) prepared wherein alternative sources of funds were identified in accordance with
the principles of public investment programming.

4.2 Matching of Fund Requirements with Projected Funds Available

The total funding for the identified PPAs will amount to Php 748.5 million. This is
relatively high compared to the maximum projected investment fund of Php 146.5
million. As expected there will definitely a deficit in the investment fund to be made
available in either of the scenarios.

4.3 Investment Program 2 (All-in, Alternative Budget Source)

Of the Php 740 million total funding requirements of all the PPAs identified for
implementation during the LDIP period, Php 380 million was identified feasible for
funding sponsorship or fund sharing. Hence, the investment-funding requirement for
the municipality is trimmed down to Php 360 million.
Table 4.1 Total Project Cost, Project Cost to be Funded by Alternative Budget Source, Project Cost to be Funded by Camiling
(in millions) Php, 2011-2016
Particulars 2011 2012 2013 2014 2015 2016 Total Average
Total Project Cost 63.55 247.65 147.36 115.99 79. 01 83.36 737.6 122.9
Portion of Total Project Cost
Identified to be sourced from
33.13 127.04 75.9 59.92 41.27 43.38 380.64 63.44
alternative sources or fund-sharing
agreement
Portion of Total Project Cost to be
30.42 120.61 71.46 56.72 37.74 39.98 356.9 59.49
funded by Camiling

Meanwhile, Table 4.2 presents the project cost for the identified top three PPAs per sector.

Table 4.2 Total Project Cost of Prioritized PPAs (in millions) Php, 2011-2016
Particulars 2011 2012 2013 2014 2015 2016
Social Development Sector 4.15 15.95 12.08 7.48 3.52 2.07
Environmental Management Sector .1 33.1 3.8 3.2 1.9 2.2
Economic Development Sector 0 2.5 1.3 1.9 1.2 1.8
Land Use and Infrastructure Development Sector 9.75 21.05 21.05 9.95 9.95 8.95
Institutional Development Sector 2.9 8.7 3.1 3.3 3.1 3.1
TOTAL 16.9 81.3 41.33 25.83 16.57 18.12
Available Development Fund 20.14 21.86 23.57 25.29 27.00 28.72
There may be a way for the Local Finance Committee (LFC) to identify other projects
where a funding arrangement may be proposed either with private entities or National
Government Agencies, i.e. DENR, DA, DSWD, etc.

In order to fully implement the proposed projects with high indicative budgets, it is
very important to note the amount of budget that could cover for projects should be
provided by the municipality. The local government offices also should take into
consideration the proposed projects and contribute funds assigned from respective
office for its implementations.

On the other hand, it is also necessary for the Municipality to strengthen its linkages
in different sectors and look for possible alternative sources of funding to ensure
support to the proposed PPAs. However, the LGU should also consider limiting its
loans as it is currently paying amortization for the PhP 105 million worth of loan for
the Public Market.

4.4 Finalization of the LDIP

The LFC should validate the financial projections and recommend which changes are
to be made that will actually present a best scenario for the LGUs fiscal
management. It is also to validate the proposed budget and alternative sources of
funding before the LDIP is to be finalized and implemented.

4.5 Beyond LDIP Period

Since the CDP and CLUP have six and ten-year planning period, respectively, the
projected local investment fund requirements were also computed as follows based
on the continued implementation of programs and projects. This also considers the
spill-over of its implementation.

Table 4.2 Investment Fund Requirements

(in millions) Php, 2016-2020
Particulars 2017 2018 2019 2020 Total Average
Total Project Cost 24.69 24.35 26.12 25.77 100.93 25.23
Portion of Total Project
Cost Identified to be
sourced from alternative 8.1 8.2 9.3 9.4 35 8.75
sources or fund-sharing
agreement
Portion of Total Project
Cost to be funded by 16.59 16.14 16.82 16.37 65.93 16.48
Camiling

Annual investment stream per project is included in Annex C and D.

5.0 Recommendations

For the achievement of the goals and targets set by the Municipality of Camiling as
presented in the CLUP and CDP, it is recommended that the offices concerned,
especially the MPDO and LCF to conduct the following:

1. Immediate review and update of revenue projections by the local finance

committee for fine-tuning of financial projections;
2. Review/evaluation of projects carried over from 2010 AIP and LDIP;

3. Regular updating of the proposed LDIP to identify additional projects and

revisions necessary for the development targets;

4. Adoption of a planning calendar by the Local Finance Committee and

MPDO to make this exercise more responsive to the needs of the
municipality; and

5. Improvement of the fiscal management of the Municipality through

updated real property taxes, and increased collection efficiency.