MANILA—Some 344 eligible local government units (LGUs) across the country stand to benefit from the P500-million Performance Challenge Fund this year.

Interior and Local Government Secretary Jesse Robredo said the subsidy is part of the agency’s efforts to reward high performing LGUs.

Of the P500 million, P303 million will go to 303 fourth to sixth class municipalities, P75 million to 25 fourth to sixth class cities and P112 million to 16 fourth to sixth class provinces, Robredo said. The remaining P10 million will be allocated to higher income LGUs.

The municipalities will each receive P1 million, P3 million for each city and P7 million per province, he said.

The performance fund is a financial incentive awarded to qualified LGUs to jumpstart local development initiatives aligned with the national government’s programs for the attainment of the Millennium Development Goals, tourism and local economic development, disaster risk reduction and management and solid waste management, Robredo said.

“We hope that through the PCF, we will be able to motivate LGUs to further enhance their local government systems and procedures and improve their services to their constituents,” he said.

Projects that may be bankrolled by the fund include school buildings, rural health units, water and sanitation system, local roads and bridges, slaughterhouses, flood control, reforestation, postharvest facilities, and cold storage facilities.

Under the guidelines that the Department of Interior and Local Government released recently, the DILG secretary said that each eligible LGU should provide a counterpart fund that is equal to or greater than the PCF granted by the national government to be sourced from their 20 percent development fund or from other sources.

“An LGU can receive only one PCF grant but this may be applied to as many projects as the LGU may wish to propose for cost-sharing with the national government,” he pointed out.

To qualify for the PCF, he said LGUs should pass the assessment on good housekeeping and eventually conferred with the Seal of Good Housekeeping (SGH) in key governance areas of planning, fiscal management, transparency and accountability and valuing performance management.

Upon conferment of the SGH, he said eligible LGUs should submit within 30 days a letter of intent along with other documentary requirements such as project proposal, Sanggunian resolution allocating counterpart PCF funds, and certification from the budget officer on funds allocation to their respective DILG regional offices.

As soon as the project proposal is approved, the eligible LGU will then enter into a Memorandum of Agreement with the DILG through the regional director and issued with a certificate of availability of funds, he said.

Since last year, 30 fourth to sixth class municipalities all over the country have been conferred with the SGH and availed of the PCF.