01/09/2026
READ | LGUs can now tap 20% dev’t fund for energy projects under new policy
Local government units (LGUs) can now use their 20% Development Fund (DF) for projects aimed at cushioning the impact of the country’s energy crisis, under new guidelines jointly issued by the Department of the Interior and Local Government (DILG), Department of Budget and Management (DBM), and Department of Finance (DOF).
The new policy allows LGUs to use their Development Fund for the construction and/or establishment of local oil storage facilities; expansion of renewable energy projects and smart and green grid systems; and procurement of electric vehicles (EVs) for health services, uniformed services, and disaster risk preparedness and response operations.
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.
Under DBM-DOF-DILG Joint Memorandum Circular No. 1 dated August 4, 2026, LGUs may fund development-oriented and capital-intensive projects that support the government’s Unified Package for Livelihoods, Industry, Food, and Transport (UPLIFT) Framework.
The UPLIFT Framework was adopted under Executive Order (EO) No. 110, s. 2026, following President Ferdinand R. Marcos Jr.’s 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% 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% 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.
