Local government officials have taken the initiative to contribute to fiscal reforms by assuming a bigger role in spending for government projects through the Local Government Support Fund (LGSF), a key component of the national budget that provides direct financial assistance to local government units (LGUs) such as provinces, cities, municipalities, and barangays.
Established as part of fiscal decentralization efforts under the 1991 Local Government Code and subsequent reforms, the LGSF allocates funds—typically around P13 to P15 billion annually.
The fund can be used for infrastructure (e.g., farm-to-market roads, water systems), health services, capacity-building, and disaster risk reduction.
In 2025, it forms part of a broader P1-trillion allocation for LGUs, emphasizing equitable resource distribution to lagging regions.
The flood control scandal exposed systemic flaws in national infrastructure funding, particularly for flood mitigation projects totaling P545.6 billion from 2022-2025.
In the 2026 budget, the DPWH allocation for flood control projects was removed.
The Union of Local Authorities of the Philippines has petitioned the Senate to increase the 2026 budget for the LGSF to enable local government units to deliver vital, high-impact services directly to their constituents.
ULAP president Quirino Gov. Dakila Carlo “Dax” Cua appealed to the Senate on behalf of ULAP and the League of Provinces of the Philippines, League of Cities of the Philippines, League of Municipalities of the Philippines, and the Liga ng mga Barangay to level up the funding for local governments.
Cua and other league leaders visited the Senate last Tuesday.
Increasing the LGSF and expanding its scope will enable LGUs to meet increasing demand and challenges in local communities.
The Senate was also asked to spearhead the expansion of eligible projects to include education infrastructure, climate-resilient facilities, digitalization, disaster recovery programs, and livelihood support.
ULAP also asked the Senate to ensure equitable distribution, especially for low-income, disaster-vulnerable, and geographically isolated LGUs, and to introduce a Disaster Rehabilitation and Reconstruction Assistance Program for calamity-hit LGUs.
The LGSF has a track record of improving communities. It has enabled LGUs to build farm-to-market roads, water systems, health stations, bridges, and disaster-resilient facilities, and to support vulnerable groups — especially in isolated and underserved areas.
A core issue in the corruption scandal was the blatant bypassing of local government approvals, violating Sections 26 and 27 of the Local Government Code, which require LGU consultation and permits for projects affecting local areas.
Centralization, driven by national agencies, enabled corruption by allowing funds to evade local scrutiny.
Shifting more developmental funding functions to LGUs may be the Holy Grail for eradicating high-level corruption.