Iloilo mayors urge DBM: Drop 75% development fund rule

ILOILO CITY — Municipal mayors in Iloilo are asking the Department of Budget and Management (DBM) to reconsider a new requirement that could disqualify local government employees from receiving their 2026 Collective Negotiation Agreement (CNA) incentives due to delays in infrastructure projects.

In a position paper, the League of Municipalities of the Philippines (LMP) Iloilo Chapter opposed the mandate requiring local government units to hit a 75-percent obligation rate on their 20-percent Development Fund to qualify for the incentive.

The mayors argued that the condition unfairly penalizes municipal employees for project bottlenecks beyond their control, citing failed biddings, procurement delays, right-of-way issues, contractor shortages, regulatory hurdles and natural disasters.

LMP-Iloilo stressed that the development fund and the CNA incentive serve entirely separate functions and should be evaluated independently. While the development fund finances capital projects, the CNA incentive rewards personnel for productivity, operational efficiency, and cost-saving measures.

“The two performance dimensions should be assessed independently,” the position paper stated, adding that workers who meet their performance targets should not forfeit their incentives due to external project delays.