LOCAL

GOVERNMENT
ACADEMY
CHANGING mindsets.
INFLUENCING behavior.

SESSION 3
The Barangay Budget

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 LOCAL
GOVERNMENT
ACADEMY
CHANGING mindsets.
INFLUENCING behavior.

TOPICS

1. Legal basis for the Barangay budget Process (an Overview

of relevant laws and regulations)
2. What is the Barangay Budget Process?
3. Understanding Budget Cycle from planning to
implementation
4. Guide to Budget Preparation process
5. Roles and responsibilities of the Barangay officials and
budget committee.

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OBJECTIVES
• To make participants be aware of the Legal Framework and illustrate the legal foundations
and requirements that govern the barangay budget process, including the relevant laws,
regulations, and guidelines.
• To be able to explain the stages of the Budget Process and delineate the different stages of
the barangay budget cycle, from budget preparation and approval to execution and
monitoring, and understand the significance of each stage.
• To analyze revenue generation i.e., to examine the sources of revenue for barangays,
including internal and external sources, and understand the mechanisms for revenue
collection and generation.
• To Explore Budget Allocation and how budgets are made, including the prioritization of
projects and programs, and understand the criteria and considerations that guide these
decisions.

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LET’S DO THIS!

The approval of the Barangay budget process is done by

the members of the Sangguniang Barangay Members.

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LET’S DO THIS!

The Local Government Code places great emphasis on

accountability and transparency in budget execution. It
outlines mechanisms for accountability, reporting, and
auditing.

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LET’S DO THIS!

The Barangay budget plan is prepared solely by the

Punong Barangay.

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LET’S DO THIS!

Barangay consultation is done once the Barangay

Development and Budget Planning is approved by the
Punong Barangay and Sangguiang Barangay Members.

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LET’S DO THIS!

Budgeting involves four (4) distinct processes or

phases : What are these?

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ACADEMY
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What is the significance
of preparing a
INFLUENCING behavior.

barangay budget?

A well-prepared barangay budget

serves as basis for:

• Planning and policy adoption

• Program and project
implementation
• Financial control
• Management information

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BUDGET
PREPARATION

BUDGET CYCLE
BUDGET

The budget process is a cycle that BUDGET LEGISLATION OR

ACCOUNTABILITY AUTHORIZATION
BUDGET
consists of the following phases: CYCLE

• Budget Preparation BUDGET

EXECUTION
BUDGET REVIEW

• Budget Legislation Or
Authorization
• Budget Review
• Budget Execution And
• Budget Accountability.

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Topic 1
Legal Basis of the Barangay
Budget Process

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From the Local Government Code:

Sections 329-334 (Barangay Budget) of the Local Government Code of 1991

(RA No. 7160) provide the basis for the collection, safekeeping and use of
barangay funds. The aforesaid provisions govern the preparation, effectivity,
and review of the barangay budget, including the financial procedures that the
barangay shall observe. This comprehensive legislation sets forth the
framework for local government units, including barangays, and defines the
processes and requirements for budgeting at the barangay level. Here are the
key legal provisions related to the Barangay Budget Process within the Local
Government Code.

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From the DILG:

DILG Memorandum Circular No. 2013-39: This memorandum

circular provides guidelines for the conduct of barangay budget
hearings and public consultations, emphasizing the participation of
the community in the budget process.

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From the DILG:

DILG Memorandum Circular No. 2018-43: This circular provides

guidelines on the submission and review of the Barangay
Development Plan and Budget, stressing the importance of adhering
to the Barangay Development Plan and consulting the community
during budget preparation.

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From the DILG:

DILG Memorandum Circular No. 2020-084: This circular provides

guidance on conducting barangay budget hearings in compliance
with the requirements of the Local Government Code and promotes
the involvement of civil society organizations in the budget process.

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From the DBM:

LOCAL BUDGET MEMORANDUM No. 87 dated June 9, 2023:

INDICATIVE FY 2024 NATIONAL TAX ALLOTMENT (NTA)
SHARES OF LOCAL GOVERNMENT UNITS (LGUs) AND
GUIDELINES ON THE PREPARATION OF THE FY 2024
ANNUAL BUDGETS OF LGUs

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From the DBM & DILG:

Joint Memorandum Circular (JMC) No. 1 , s. 2019

Date: January 23, 2019: GUIDELINES ON THE APPROPRIATION,
RELEASE, PLANNING AND BUDGETING PROCESS FOR THE SK
FUNDS

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Topic 2
The Barangay Budget Process

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The Barangay Budget Process

Nature Description Governing Laws

This process is guided
A series of activities
by legal provisions,
and steps of official An instrument for
primarily outlined in
plans. Manage budget effective management
the Local Government
allocated for of the development of
Code of 1991
barangay’s operations the barangay.
(Republic Act No.
and projects.
7160).

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BPP Promotes the following:

Preparation of the Preparation of the Budget by the Punong Barangay

budget by the
Punong Barangay

Legislative Action by the Sangguniang Barangay

Legislative action
Management
by the
reporting by the
Sangguniang
Punong Barangay Budget Review by the Sangguniang Bayan/
Barangay
Panlungsod

Execution of the Budget by the Punong Barangay

Budget review by
Execution of the
the Sangguniang
budget by the
Bayan/ Management reporting by the Punong Barangay
Punong Barangay
Panglungsod

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The Barangay Budget Process is designed to ensure that the

budget is formulated and executed in a transparent, accountable,
and participatory manner, with the aim of addressing the needs and
priorities of the community. It is an essential part of local governance
in the Philippines, fostering community development and
empowering barangay residents to have a say in how local
resources are allocated.

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Barangay Development Plan (BDP) Preparation is the process that begins with the formulation of the
Barangay Development Plan (BDP). The BDP is a comprehensive plan that outlines the development
priorities, projects, and programs of the barangay for a specific period (usually three years). It serves
as the basis for the budget.

Barangay Budget Preparation is based on the BDP, the barangay officials, particularly the Punong
barangay and the Sangguniang Barangay members, work on preparing the budget. The budget
must be detailed, itemized, and include estimates of expected revenues and expenditures.

Public Consultation and Participation is required to conduct public hearings to allow community
members to provide feedback, ask questions, and express their views on the proposed budget. Public
participation is a crucial part of the budgeting process.

After taking into account public input and making necessary adjustments, the Sangguniang
Barangay reviews and approves the budget. They have the authority to amend the proposed
budget to align it with the Barangay Development Plan.

The submission of the budget to the Department of the Interior and Local Government (DILG) once
approved by the Sangguniang Barangay. The budget is submitted to the Local Government
Operation Officer (LGOO) of the Department of the Interior and Local Government (DILG) for review
and endorsement.

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Programs/
Barangay Barangay
Projects
Development Budget
Implementation
Planning Preparation Monitoring &
Evaluation

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The final step involves presenting the budget for approval to the members of the
barangay assembly. The barangay budget is considered approved once it receives the
majority vote of the assembly members present during the assembly meeting.

Budget execution is the implementation after the approval. The barangay treasurer is responsible
for executing the budget, ensuring that funds are allocated and expended in accordance with the
budgeted figures and purposes. The budget execution covers various operations and projects such
as infrastructure development, social services, environmental protection, and administrative costs.

The monitoring and reporting of the budget execution includes checking the use of funds and
preparing regular financial reports. The barangay is encouraged to establish mechanisms for
monitoring and reporting to ensure transparency and accountability.

Government agencies and local oversight bodies may review and audit the financial
transactions to ensure compliance with legal and financial regulations.

To promote transparency, the approved budget must be posted in conspicuous areas

within the barangay and published in local newspapers to make it accessible to the
public.

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DEPARTMENT OF BUDGET AND MANAGEMENT (DBM):

• Budget Operations Manual for Local Government Units (BLGF-DOF-DBM-

DILG Joint Memorandum Circular No. 1-2015): This manual provides
comprehensive guidelines for budget preparation, execution, and reporting,
including specific instructions for barangays.

• Guidelines on the Preparations of the Local Government Units (LGU) Annual

Budget (DBM Circular Letter No. 2016-3): This circular provides guidance on
the preparation of annual budgets, emphasizing the importance of aligning the
budget with the Local Development Plan and other legal requirements.

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DEPARTMENT OF BUDGET AND MANAGEMENT (DBM):

• Guidelines on the Issuance of SARO (Special Allotment Release Order) for

Local Government Units (DBM Circular Letter No. 2016-3): This circular
outlines the process of obtaining SAROs, which are essential for the release
of funds for various programs and projects, including those at the barangay
level.

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Roles of the Barangay Treasurer, Secretary, Punong Barangay

and Sangguniang Members in the Barangay Budget Process:
• Punong Barangay: The barangay captain is responsible for convening and
presiding over meetings of the barangay council, and for implementing the
barangay budget (Section 401, Local Government Code of 1991).

• Barangay Treasurer: The barangay treasurer is responsible for preparing the

budget proposal, disbursing funds to various departments and programs, and
monitoring and evaluating budget execution (Section 112, Local Government
Code of 1991).

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Roles of the Barangay Treasurer, Secretary, Punong Barangay

and Sangguniang Members in the Barangay Budget Process:
• Barangay Secretary: The barangay secretary is responsible for preparing all
the barangay's official records, including the report on budget implementation
(Section 399, Local Government Code of 1991).

• Barangay Sanggunian Members: The barangay council members are

responsible for reviewing and approving the budget proposal, and for
monitoring and evaluating budget execution (Section 109, Local Government
Code of 1991).

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The budget preparation process is not easy. However, it is necessary that

individuals who are part of the barangay governance are competent to handle
the job. The following are additional suggestions for the barangay during this
part;

• Start early: The Local Government Code states that the barangay budget
must be submitted to the DILG on or before April 15 of each year (Section
109, Local Government Code of 1991). Therefore, it is important to start
preparing the barangay budget early. This will give you enough time to gather
inputs from the community, develop a comprehensive budget proposal, and
get the budget approved by the barangay council and the DILG.

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• Be realistic: When developing the budget proposal, be realistic about the

barangay's resources and commitments. Don't overspend or make unrealistic
promises (Section 107, Local Government Code of 1991).

• Be transparent: The Local Government Code states that the barangay

budget must be made available to the public for inspection and review
(Section 108, Local Government Code of 1991). Therefore, it is important to
publish the barangay budget on the barangay website and in other public
places. This will help to ensure that the budget process is transparent and that
the community is aware of how their money is being spent.

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• Be accountable: The Local Government Code states that the barangay

government is accountable to the public for the implementation of the budget
(Section 114, Local Government Code of 1991). Therefore, it is important to
report back to the community on how the budget was implemented and the
results of budget programs and projects. This will help to ensure that the
barangay government is accountable to the public for its budget decisions.

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 LOCAL
GOVERNMENT
ACADEMY
CHANGING mindsets.
INFLUENCING behavior.

SESSION 3
The Barangay Budget

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