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Republic ofthe Philippines

DEPARTMENT OF THEINTERIOR AND LOCAL GOVERNMENT
A. Francisco Gold Condo. H,Edsa cor. Mapagmahal SL,Diliman. Quezon City

MEMORANDUM CIRCULAR October 16, 2008

N° _200o-154

TO ALL PROVINCIAL GOVERNORS, CITY/MUNICIPAL MAYORS,

LOCAL DEVELOPMENT COUNCIL MEMBERS,LOCAL FINANCE
COMMITTEE MEMBERS, DILG REGIONAL AND PROVINCIAL
DIRECTORS AND ALL OTHERS CONCERNED
SUBJECT RECONCILIATION OF FIVE (5) DEVELOPMENT SECTORS IN
THE COMPREHENSIVE DEVELOPMENT PLAN AND THREE (3)
SECTORAL CLASSIFICATIONS WITH THE ANNUAL
INVESTMENTPROGRAM(AIP)

On March 8, 2007, the DILG signed Joint Memorandum Circular No. 001, s. 2007 with the
Department of Budget and Management (DBM), Department of Finance (DOF) and National
Economic Development Authority (NEDA), harmonizing local planning, investment
programming, fiscal and financial management. Joint Memorandum Circular No. 001, S. 2007
facilitated the harmonization of procedures, guides and capacity building programs on core LGU
operations.
Under this joint policy, the investment program serves as the link between plan and budget, thus,
putting into effect Section 305 i, which provides that: “local budgets shall operationalize
approved local development plans.”
Further, the Annual Investment Program (AIP), as the annual slice of the Local Development
Investment Program(LDIP)has also been defined according to the following purposes:
For planning and investment programming, it is the annual slice of the LDIP,
referring to the indicative yearly expenditure requirements of LGU programs,
projects and activities(PPAs)to be integrated into the annual budget.

For budgeting, it constitutes the total resource requirements for the budget year,
including the detailed annual allocation for each PPA in the annual slice ofthe LDIP
and the regular operational budget items broken down into Personnel Services,
Maintenance and Other Operating Expenses and Capital Outlay.
This Memorandum Circular is issued to guide all concerned in the reconciliation of five
development sectors (institutional, infrastructure, economic, environmental and natural resources
and social) provided in the Enhanced Guide to CDP Preparation and the three sectors (general
public services, economic services and social services) reflected in the Updated Budget
Operations Manual(UBOM)and AIP Summary Form as annexed to the JMC. For purposes of
planning LGUs may follow the sectoral groupings of the CDP. For purposes of investment
programming, the LGUs follow the AIP Summary Form. For sectors that need to be reconciled,
LGUs may refer to this Memorandum Circular and funnel in the appropriate sectors from
planning to investment programming purposes.

The sectoral groupings have been provided in Local Budget Memorandum(LBM)No. 57 dated
July 11, 2008 entitled “FY 2008 Final Internal Revenue Allotment (IRA) and Other Related
Budget Preparation Matters.”

The Offices, as stipulated in this Circular vary from LGU to LGU. The intent of this policy is to
identify the functional objective of appropriating budget to implement programs and projects as
prioritized in the local development plans.
Below is the reconciliation ofthe DILG and DBM sectoral groupings.
Reconcilication ofDILG Development Sectors and DBM Sectoral Classification
GUIDE TO GDPPREPARATION REVISED BUDGET OPERATIONS MANUAL
(DILG) (DBM)
AIP Sectoral Classification
5 Development Sectors 3 Sectors(General Services, Office
Economic Services, Social
Services)_
1. Institutional Development
1.1 Organization and Management General Services Administrative
1.2 Fiscal Management General Services Treasury
1.3 Legislative Output General Services Legislative
1.4 LGU-NGO-PO linkages General Services Executive
2. Infrastructure Development
2.1 Economic Support
Irrigation systems Economic Services Agriculture
Power generation(mini-hydro) Economic Services Engineering
Roads, bridges, ports Economic Services Engineering
Flood controland drainage Economic Services Engineering
Telecommunications Economic Services Engineering
2.2 Social Support
Hospitals Social Services Health Services
Schools Social Services Education and
Manpower Services
Waterworks and Sewerage Economic Services Engineering
Public socialized housing Social Services Housing and
Community
Development
Facilities for aged,infirmed Social Services Social Welfare
disadvantaged Services

3. Economic Development
3.1 Primary Sector
Agricultural crops
Livestock
Fisheries(inland, brackish, marine) Economic Services
Forestry
3.2 Secondary Sector
Mining and quarrying
Manufacturing
Construction
Electricity
3.3 Tertiary Sector
Wholesale and retail trade
Transportation and communication Economic Services
Finance,insurance andrelated
activities
Real Estate
Personaland community services
Tourism
Economic Services Agriculture
Economic Services Agriculture
Agriculture
Economic Services Environment and
Natural Resources
Economic Services Natural Resources
Economic Services Operation of
Economic Enterprises
Economic Services Engineering
Economic Services Engineering
Economic Services Market
Administration
Treasury
Economic Services Treasury
Economic Services Business Permit and
Licenses
General Services Public Affairs and
Information Service
Economic Services Tourism and Cultural
Affairs
'!

GUIDE TO CDP REVISED BUDGETOPERATIONS MANUAL

PREPARATION (DBM)
(DILG)
5 Development Sectors 3 Sectors(General Services. Office
Economic Services, Social
Services)_
4. Environmental and Natural
Resources
4.1 Lands Economic Services Environment and Natural
Resources
Landsofthe public domain Economic Services Environment and Natural
Resources
Private and alienable and Economic Services Environment and Natural
disposable lands Resources
Ancestral domain Economic Services Environment and Natural
Resources
4.2 Forest Lands Economic Services Environment and Natural
Resources
Protection forests Economic Services Environment and Natural
! Resources
Production forests Economic Services Environment and Natural
Resources
i 4.3 Mineral Lands Economic Services Environment and Natural
Resources
Metallic mineral lands Economic Services Environment and Natural
Resources
Non-metallic mineral lands Economic Services Environment and Natural
Resources
4.4 Parks, wildlife and other Economic Services Parks Development and
reservations Administration
4.5 Water resources Economic Services Environment and Natural
Resources
Fresh water(ground surface) Economic Services Environment and Natural
Resources
Marine waters Economic Services Environment and Natural
Resources
4.6 Air quality Economic Services Environment and Natural
Resources
4.7 Waste management Economic Services Environmental Protection
and Waste Mgt_
Solid waste Economic Services Environmental Protection
and Waste Mgt
Liquid waste Economic Services Environmental Protection
and Waste Mgt
Toxic and hazardous Economic Services Environmental Protection
and Waste Mgt
5. Soda!Development
5.1 Social services and status Social Services Social Services
of well-being Development
Education, culture, Social Services Education and Manpower
recreation Services
Welfare Social Services Social Services
Development
Housing Social Services Housing and Urban
Renewal Authority
Protective services Social Services Social Services
Development
5.2 Gender equity concerns Social Services Social Services
Development

For the guidance ofall concerned.

Republic Of the Philippines
\ DEPARTMENT OF THE INTERIOR
L,-L AND LOCALGOVERNMENT
RONALDO V.PUNO IN REPLYING, PlS CITE:

Secretary Jfj(/ SILG08-002474

Folder; ROLLOUT MATERIALS

Memo on Harmonization ofDBM,DILG Sectors 2.doc