Climate Factsheets | July 2022

LOCAL CLIMATE FINANCE WINDOWS

Financing local government resilience

The country’s vulnerability to climate change necessitates sustained action through policy and
governance, institutional reforms, research and development, knowledge and capacity building,
planning and programming, and implementation and monitoring and evaluation. Central to these
efforts is finance. The Climate Change Act of 2009, as amended, recognizes local government units
as frontline agencies in the formulation, planning, and implementation of local climate change action
plans in their respective areas that are consistent with the provisions of the Local Government Code
and aligned to the National Climate Change Action Plan (among other national development
priorities). Prioritizing investments that are aligned with local climate action plans are crucial in
shaping resilience outcomes in the future.

Key Facts and Figures

6
local government projects funded through 39% increase in local government share
the People’s Survival Fund from the national tax allotment in 2022

LGU Statutory Requirement for Budgets

20% allocation for development projects related to

Development Fund social development, economic development, and
environmental management

5% annual appropriation for organization- and client-

Gender and Development focused efforts that address gender issues that affect
the welfare of women and men
Not less than 5% allocation to support disaster risk
Local Disaster Risk management activities such as preparedness
Reduction and Management trainings, response and rescue equipment, supplies,
post-disaster activities, and premiums

Senior Citizens, Persons with 1% allocation for senior citizens and PWDs’ welfare
and development, and 1% allocation for the
Disability, and Children protection of children
 Climate Factsheets | July 2022

Mandanas Ruling: Greater Local Autonomy and Resource

In 2018, the Supreme Court granted the Mandanas-Garcia petition, declaring as unconstitutional the
phrase “internal revenue” appearing in the Local Government Code. The SC rules that the
determination of just share of LGUs should not be based solely on national internal revenue taxes but
on all national taxes.

The impact of the SC decision significantly increased the tax base on which the share of the LGUs is
computed, and thus, strengthened fiscal decentralization.

Projected fiscal and budgetary impact to local governments

LGU % Allocation 2021 IRA in PhP 2022 NTA in PhP Percent Increase
(GAA 2021) (DBM LBM 82)
Provinces 23% 159,963,332,270 220,589,487,500 37.89%
Cities 23% 149,251,886,580 220,579,487,500 37.89%
Municipalities 34% 236,467,534,660 326,074,025,000 37.89%
Barangays 20% 139,098,549,800 191,808,250,000 37.89%
Total 695,492,749,000 959,041,250,000 37.89%

Domestic Financing Windows for CC-DRR Measures

Standby fund allocated for national government

Quick Response Fund agencies that can be extended to LGUs through quick
disbursement pre- and post-disaster

Disaster Management Managed by the DOF’s Municipal Development

Finance Office, a loan financing window that can be
Assistance Fund accessed by LGUs for disaster management programs

Enacted through Republic Act 10174, an annual

People’s Survival Fund allocation PhP 1 Billion intended for local government
climate adaptation projects

People’s Survival Fund Projects

Lanuza, Surigao del Sur
Disaster Risk Reduction and Management Del Carmen, Surigao del Norte
Response as Coping Mechanism to Resiliency Climate Field School (2016)
(2016)

San Francisco, Cebu Gerona, Tarlac

Building Resilience through Community-based Promoting resiliency and Climate-Informed Gerona
Ecological Farming (2017) (2017)

Sarangani
Kitcharao, Agusan del Norte
Saub Watershed Ecosystem Rehabilitation and
Establishment and Sustainable Management of River
Flood Risk Reduction for Increased Resilience
Ecosystem in Kitcharao (2018)s
to Climate Change and Natural Hazards (2018)