DIRECTING ALL LOCAL GOVERNMENT UNITS TO SUBMIT TO THE DEPARTMENT OF BUDGET AND MANAGEMENT THEIR RESPECTIVE ANNUAL INVESTMENT PLAN

WHEREAS, Local Government Units ( LGUs) are mandated to appropriate
in its annual budget no less than twenty percent (20%) of its annual
internal revenue allotment for development projects with copies of their
respective Development Plans to be furnished the Department of the
Interior and Local Government, pursuant to Section 287 of R.A. No. 7160,
the Local Government Code of 1991, as implemented by Article 384 of its
Implementing Rules and Regulations;

WHEREAS, while the Local Government Code empowers local authorities
to manage their internal affairs consistent with devolution and local
autonomy, it should be emphasized that part of the responsibility of the
national government is to help ensure that public funds, particularly
the 20% Development Fund, shall be appropriated and disbursed only for
the very purpose or purposes for which such Fund was established; and

WHEREAS, it has been observed that most LGUs , if not all, do not
submit an Annual Investment Plan (Local Development Plan) as required
under the Local Government Code of 1991.

NOW, THEREFORE, I, JOSEPH EJERCITO ESTRADA, President of the Republic
of the Philippines, by virtue of the powers vested in me by law and the
Constitution, do hereby order the following:

SECTION 1. Use of the 20% Development Fund . —
The Internal Revenue Allotment (IRA) share of local government units
equivalent to twenty percent (20%) set aside for development projects
shall be used for specific sectoral programs, projects and activities in
furtherance of the development agenda of the government. Accordingly,
priority consideration shall be given to the following areas:

a.  Solid waste management which may include purchase of related
equipment, trucks and compactors, as well as purchase of land for
sanitary landfill purposes;

b.  Purchase of lots for hospitals, health centers, day care centers
and similar facilities which may include construction, repair and/or
maintenance of such facilities;

c.  Purchase of lot for resettlement of squatters, including construction of housing units and facilities;

d.  Activities in support of the Food Security Program, and the
Livestock Dispersal, Fisheries Development and Fish Culture Farming
Programs;

e.  Initiatives in support of Cooperative Development;

f.   Construction, maintenance and/or repair of post-harvest facilities, irrigation and other agricultural production systems;

g.  Construction, maintenance and/or repair of local roads and bridges;

h.  Construction, maintenance and/or repair of water and sewerage system, as well as, power and communication facilities; and

i.   Construction, maintenance and/or repair of public buildings
which may include purchase of equipment necessary in the implementation
of infrastructure undertakings.

SECTION 2. Submission of the Annual Investment Plan.
— All local government units shall submit their respective Annual
Investment Plan (Development Plan) as approved by their Local
Development Council, to the appropriate regional office of the
Department of Budget and Management, not later than January 31st of each
year; provided, however, that the submission of this Annual Investment
Plan for the year 2000 shall be not later than March 31, 2000. More
specifically, said Annual Investment Plan shall contain specific
programs, projects and activities, as aforementioned, the corresponding
project cost including the necessary fund flows to approximate the
reasonable timing in the release of funds.

SECTION 3. Direct Release of the Internal Revenue Allotment Representing the 20% Development Fund. —
The DBM Regional Office shall release the twenty percent (20%)
Development Fund of the LGU on the basis of programs, projects, and
activities embodied in the Annual Investment Plan direct to the LGU
concerned considering the appropriate schedule for the release of funds.
When appropriate, the initial release for mobilization and the
subsequent progress billing scheme may be adopted for the purpose.

SECTION 4. Implementing Guidelines . — The
Department of Budget and Management, in consultation with all the
Leagues of the local government units, shall formulate the necessary
guidelines for the effective implementation of this Order and may
prescribe appropriate forms for the purpose.

SECTION 5. Review of the Project List to Implement the 20% Development Fund.
— The Development Budget Coordinating Committee (DBCC) shall conduct a
semestral review of the list of eligible projects and shall provide the
Office of the President with a report and recommendation on the
effective implementation thereof.

SECTION 6. Effectivity . — This Executive Order shall take effect on January 1, 2000.

Adopted: 21 Dec. 1999

By the President:

(SGD.) RONALDO B. ZAMORA
           Executive Secretary