THE Department of the Interior and Local Government (DILG), Department of Budget and Management (DBM), and Department of Finance (DOF) have jointly issued new guidelines allowing local governments (LGU) to use 20 percent of their development fund (DF) for projects aimed at cushioning the impact of the energy crisis.
Under DBM-DOF-DILG Joint Memorandum Circular 1, LGUs may fund development-oriented and capital-intensive projects that support the government’s Unified Package for Livelihoods, Industry, Food, and Transport (Uplift) Framework.
Under the new policy, the construction or establishment of local oil storage facilities; expansion of renewable energy projects and smart and green grid systems; procurement of electric vehicles (EVs) for health services, uniformed services, as well as disaster risk preparedness and response operations, may now be funded wholly or partly by the LGUs’ development fund.
Projects may also include the construction and installation of solar photovoltaic systems and infrastructure, as well as other applicable energy efficiency projects recommended by the Inter-Agency Energy Efficiency and Conservation Committee.
The Uplift Framework was adopted under Executive Order 110, s. 2026, following President Marcos’ declaration of a State of National Energy Emergency. It provides a unified government response to safeguard energy stability, economic continuity, and public welfare.
The JMC supplements an earlier directive governing the appropriation and use of the 20 percent DF, giving LGUs greater flexibility to align local resources with the Uplift Framework and undertake interventions that mitigate the effects of the energy emergency.
LGUs are likewise encouraged to coordinate with relevant national government agencies to ensure that local interventions complement existing programs and provide additional support to sectors or areas not sufficiently covered by national or local initiatives.
The DILG emphasized that energy efficiency and conservation projects funded under the 20 percent DF must be integrated into local planning, investment programming, budgeting, and reporting mechanisms, including the Local Energy Efficiency and Conservation Plan.
The fund, however, cannot be used for recurring expenses such as fuel purchases, electricity and water bills, and other day-to-day administrative costs.
Through the newly issued guidelines, LGUs can mobilize local investments toward cleaner, more resilient, and energy-efficient communities while helping cushion the impact of global energy uncertainties on local economies and the delivery of essential public services.