DBM sets how P11.3-B aid can be used by poor LGUs
The Department of Budget and Management (DBM) has released the guidelines on the use of the P11.3-billion financial assistance for disadvantaged local government units (LGUs).
The allotment appears in the 2026 national budget as the Local Government Support Fund-Growth Equity Fund (LGSF-GEF).
Established in 2021 and amended in 2025, the GEF seeks to address unequal development and disparities in the fiscal capacities of LGUs. The beneficiaries mostly fall under the 4th and 5th income classes.
In light of the heightened scrutiny of infrastructure spending following the flood control corruption scandal, the DBM reiterated that LGUs must comply with all requirements for implementing infrastructure projects under the 2026 General Appropriations Act.
Broken down by allocation, the P11.3-billion fund will provide P100 million to Batanes province, P75 million each to nine cities, P30 million each to 274 municipalities, and P3.9 million each to 591 barangays across the country.
The nine cities are Vigan in Ilocos Sur; Palayan and Muñoz in Nueva Ecija; Cavite City; La Carlota and Victorias in Negros Occidental; Canlaon in Negros Oriental; Bogo in Cebu, and El Salvador in Misamis Oriental.
Previous guidelines on the use of the LGSF-GEF were applied to the 2023 budget, which also allocated P1 billion.
Of that amount, P900 million, or 90 percent, was equally divided among beneficiary municipalities, while the remaining P100 million, or 10 percent, went to barangays.
Projects allowed
This year’s funding represents a significant increase from the P1 billion provided in the 2025 national budget and forms part of the record-high P57.87 billion allotted to the LGSF this year.
However, under Local Budget Circular No. 166 dated Feb. 6, 2026, the DBM said a recipient LGU can implement a maximum of two projects, They can be in the form of roads, school buildings, water supply and sanitation systems, health stations, electrification programs, or food security initiatives.
Under the previous guidelines, the eligible projects are limited to water supply systems.
Each project also comes with corresponding requirements. But in all cases, LGUs must include the installation of a rainwater collection system.
