Sound fiscal management across all levels of governance is key to ensuring improved performance and efficient delivery of basic services by local government units (LGUs) to their constituents.

Interior and Local Government Secretary Benhur Abalos made the remarks during the inter-agency signing of the Joint Memorandum Circular (JMC) No. 1, series of 2024, on Public Financial Management (PFM) in Quezon City.

“Effective public financial management is the backbone of our governance framework and vehicle in driving inclusive growth and sustainable development in the country,” he said.

Abalos continued that this is the reason why sound fiscal management, including the improvement of the tax regime, is outlined as one of the goals in the Philippine Development Plan (PDP) 2023-2028.

The objective is to ensure a stable macroeconomic environment.

During the signing, he was joined by the Secretaries of the member-agencies of the PFM Oversight Agencies, like the National Economic and Development Authority; the Department of Budget and Management; the Department of Finance; and the Department of Human Settlements and Urban Development, among others.

Abalos pointed out the JMC aims to strengthen the adoption of a more evidence-based approach to service delivery of LGUs, ensuring that local programs and projects to be budgeted and implemented are truly responsive to the existing situation and needs of local communities.

The joint memorandum was designed to harmonize and align the DILG, DHSUD, NEDA, DBM, and DOF’s respective PFM policies, implementing guidelines, tools, programs, and projects with key cross-cutting concerns in local governance.

“We envision a stronger partnership and convergence of efforts among all the PFM Oversight Agencies in continuously providing guidance, developing relevant systems and tools, and in building capacities of LGUs in the implementation of effective and efficient PFM in their respective localities,” Abalos stressed.

The DILG chief underscored that the department, likewise, implements efforts to uphold the practice of fiscal discipline and sustainability, and transparency and accountability in the use of public funds at the local government level

He added that the DILG’s Seal of Good Local Governance (SGLG) includes LGU Financial Administration and Sustainability, as one of the areas being assessed to foster a culture of good governance among LGUs amid the challenges in the local government landscape.