PROCEDURES IN THE REVIEW OF BARANGAY

BUDGET BY THE SANGGUNIAN CONCERNED

1. Within Ten (10) Days From Its Approval, Copies Of
The Barangay Ordinance Authorizing The Annual
Appropriations Shall Be Furnished The Sangguniang
Panlungsod Or The Sangguniang Bayan, Through The
City/Municipality Budget Officer, As The Case May
Be.
2. The Sanggunian concerned shall review the
barangay appropriation ordinance to ensure
compliance thereof with all the budgetary and
limitations provided under RA 7160 and it’s
implementing rules regulations.
What are the budgetary requirements
and limitations for barangay budget?
Mandatory Expenses:
 1. 20% of IRA for development
projects
 2. 10% of General Fund for SK
3. 5% of Regular income of the Barangay for
Calamity
 4. Other Statutory
 a. 5% of the regular income of the barangay for
Expenses
Gender
b. 1% Issues
of the regular income f the barangay for Senior
Citizen

 d. 2% of Real Property Tax Collection of next
C. 1% of the regular income for PWD
preceding year shall be for Discretionary Expenses of
the Punong Barangay.
 e. 20% of the regular income for debt servicing.
 f. 55% of Regular Income of next preceding year
shall be the PS cap limitation.
PS CAP FORMULA
PS CAP FORMULA = 55% X REGULAR INCOME OF NEXT PRECEDING YEAR
FOR EXAMPLE:
REGULAR INCOME IS :
BUDGET YEAR 2017 . . . . . .. P 1,OOO.000.00
PRECEDING YEAR 2016. . . 900,000.00
NEXT PRECEDING YEAR . . 700,000.00
PS CAP FORMULA
• FOR PURPOSES OF COMPUTING THE PS CAP DURING THE PREPARATION OF THE BUDGET FOR CY 2017,
THE NEXT PRECEEDING YEAR IS USED AS THE BASIS (2015) THEREFORE, P 700,000.00 X 55% IS
385,000.00. THIS MEANS THEAT THE PS COST IN BUDGET YEAR 2017 SHOULD NOT EXCEED P 385,000. IF
THE COST ALREADY EXCEEDS THE PS CAP THEN THERE SHOULD BE A DELIBERATE POLICY TO CUT DOWN
ON PS COST, LIKE NON HIRING OF ADDITIONAL PERSONNEL, NON ADJUSTMENT OF HONORARIA RATES OR
CASH GIFT ETC. HOWEVER, IF PS COST FOR THE BUDGET YEAR IS LESS THAN THE PS CAP THEN AN
INCREASE OF HONORARIA IS ALLOWED AND CLEARLY STATED IN THE APPROPRIATION ORDINCE FOR AS
LONG AS IT WILL FOLLOW THE LOCAL BUDGET CIRCULAR NO. 63 DATED OCTOBER 22, 1996 GUIDELINE.
POINTS TO REMEMBER IN THE INCREASE OF
HONORARIA.

• THE POLICY OF UNIFORM APPLICATION OF THE AMOUNT OF PERCENTAGE OF ADJUSTMENT SHALL BE

FOLLOWED.
• ADJUSTED HONORARIA SHALL NOT EXCEED SALARY GRADE 14 AND 10 OF THE SALARY SCHEDULE
ADOPTED BY THE MUNICIPALITY FOR THE PUNONG BARANGAY AND OTHER BARANGAY OFFICIAL.
HOW TO COMPUTE THE INCREASE OF
HONORARIA

• IF THE BARANGAY BARANGAY BUDGET IS NOT ENOUGH TO PAY FOR THE ALLOWABLE SALARY RATES, HOW
WILL THE SALARY INCREASE BE APPLIED PROPORTIONATELY AND UNIFORMLY.
• IF FOR EXAMPLE, A BARANGAY BELONGING TO A SECOND CLASS MUNICIPALITY HAS A BUDGET OF OF
ONLY P 50,000.00.
HOW TO COMPUTE THE INCREASE OF HONORARIA.

PRESENT POSITION SALARY GRADETE PRESENT RATE MAXIMUM RATE DIFFERENCE PERCENT APPLIED NEW RATE

1996 2000

PUNONG BRGY 14 6,582.00 10,411.00 3,829.00 139.69% 5,348.73

8 KAGAWADS 10 5,412.00 8,247.00 22,680.00 139,69 31,681.69

SECRETARY 10 5,412.00 8,247.00 2,835.00 139.69 3,960.81

TREAS. 10 5,412.00 8,247.00 2,835.00 139.69 3, 960.81

DAY CARE WORKER 1 6 4,482.00 6,311.00 2,018.00 139.69 2,818.94

BRGY HEALTH AIDE 4 4,293.00 5,411.00 1,118.00 139.69 1,561.73

UTILITY WORKER 1 3,740.00 4,217.00 477.00 139.69 666.32

COMPUTATION : AMOUNT AVAILABLE = 50,000.00 = 139.69 ======== ======

AMOUNT NEEDED 35,792.00 35,792.00 49,999.03

3. If within sixty (60) days after receipt of the
barangay appropriation ordinance, the Sanggunian
concerned takes no action thereon, said ordinance
shall continue to be in full force and effect.
4. Within the established reglamentary period, the
Sanggunian Panlungsod or Sanggunian Bayan
concerned shall return the barangay ordinance, thru
the City / Municipal Budget Officer, to the Punong
Barangay with the advice of action thereon in a form
of a resolution or letter of review for proper and
appropriated adjustments and corrections.
5. Upon receipt of the review action on the budget,
the barangay treasurer or the city of municipal
treasurer who has custody of the barangay funds shall
not make further disbursements from any items of
appropriation declared inoperative, disallowed or
reduced. (Sec.333, RA 7160 and Art. 242, IRR)
 BUDGET DOCUMENTS AND SIGNATORIES
NEEDED FOR THE REVIEW
For Annual Budget
Documents Signatories
1. Transmittal Letter Barangay Secretary

2. Endorsement Letter Local Budget Officer

3. Appropriation Ordinance Barangay Secretary/Punong

Barangay
 Documents
4. AIP/Resolution Approving the 20 %
Economic Development Fund
5. Actual Income and Expenditure for
past year
6. Actual and Estimated Income and
Expenditures for current year
7. Income Expenditures Estimate for
Budget Year
8. Actual and Estimated Output
9. Certified Statement of Income
10. SK Resolution Approving the SK
Budget
Signatories
Barangay Secretary/Punong
Barangay
Barangay Treasurer/Local
Accountant/Punong Barangay
Barangay Treasurer/Local
Accountant/Punong Barangay
Barangay Treasurer/Local
Accountant/Punong Barangay
Barangay Secretary/Punong
Barangay
Barangay Treasurer/Local
Accountant/Punong Barangay
SK Secretary/SK President
For Supplemental Budget
Documents Signatories
1. Transmittal Letter Barangay Secretary
2. Endorsement Letter Local Budget Officer
3. Appropriation Ordinance Barangay Secretary/Punong
Barangay
SALIENT POINTS ON (LOCAL BUDGET CIRCULAR NO. 63- )
POSITION CLASSIFICATION AND COMPENSATION OF
BARANGAY OFFICIALS AND PERSONNEL
The compensation of barangay officials may be
increased from minimum prescribed under the
LGC subject to the following conditions.

 1. The adjusted rate shall not exceed the minimum basic

salary positions allocated to the barangay officials and
employees salary grades in the city or municipality where the
barangay is located.
2. The compensation rate shall be in accordance with the
salary schedule being implemented by the city or
municipality where the barangay is located.
 3. The increase shall be charged against the
barangay funds.
 4. The increase shall be made proportionately and
uniform for all levels of officials concerned.

5. The increase shall be subject to the general limitation

on personal services expenditures
prescribed under RA No. 7160.
pOSITION oTHER tHAN tHOSE oF tHE mANDATORY oFFICIALS
wHICH mAY bE cREATED iN tHE bARANGAY sHALL bE
cOMPENSATED, sUBJECT tO tHE fOLLOWING cONDITIONS;
 1. The compensation may be in the form of salary or
honorarium or salary/honorarium rates shall not exceed the
minimum of the salary allocation of the following indicated
positions: POSITIONS SALARY GRADE
Utility Worker 1
Clerk I 3
Accounting Clerk I 4
Barangay Health Aid 4
Revenue Collection Clerk I 5
Day Care Worker I 6
Administrative Assistant 8
 2. The compensation rate shall be in accordance with the
salary schedule to be implemented by the city or
municipality where the barangay is located.

3. The compensation rate shall not equal or exceed the

rate paid to the barangay official.

4. The positions created shall be classified in

accordance with RA 6758.
5. Barangay tanods, and Members of Lupong
Tagapamayapa may be granted honorarium, allowances
or other emoluments provided the total amounts shall
not exceed the minimum salary grade for SG-1
6. The funds necessary for the increase in
compensation shall be charged against the
barangay funds.
7. The personal services requirements shall be
subject to the general limitation prescribed under
RA 7160.
Compensation rates approved and granted
by the respective Sanggunians of LGU at
higher rates before the issuance of this circular
may continue to be received by the
concerned barangay official. However, such
higher rates shall be coterminous with the
present incumbent of the position.
 RULE TO REMEMBER…

•THE SANGGUNIANG BARANGAY, NOT THE PUNONG

BARANGAY, HAS THE POWER TO CREATE BARANGAY
POSITIONS.
 LEGAL BASIS
• UNDERSECTION 387, THE SANGGUNIANG BARANGAY HAS THE
SOLE PREROGATIVE OF DECIDING WHETHER OR NOT CREATE
NEW BARANGAY POSITIONS (DILG OPINION 30 S. 2012)

• CREATION IS BY WAY OF ORDINANCE.

 LEGAL BASIS
• UNDERSECTION 387, THE SANGGUNIANG BARANGAY MAY
CREATE “SUCH OTHER POSITIONS OR OFFICES” IN
ACCORDANCE WITH THE NEEDS OF PUBLIC SERVICE.

• THE CREATION IS SUBJECT TO THE PS LIMITATIONS UNDER THE

LOCAL GOVERNMENT CODE.
 RULE TO REMEMBER

• SANGGUNIANG BARANGAY NEED NOT CREATE BARANGAY POSITIONS

CREATED BY THE LOCAL GOVERNMENT CODE OR NATIONAL LAW.

• (PUNONG BARANGAY, BARANGAY KAGAWADS, TREAUSURER, SECRETARY,

TANOD)
 RULE TO REMEMBER
• SANGGUNIANG BARANGAY NEED NOT CREATE THE POSITION OF
INDIGENOUS PEOPLES MANDATORY REPRESENTATIVE TO THE
SANGGUNIANG BARANGAY.

• THE POSITION IS ALREADY CREATED BY RA 8371, A NATIONAL LAW.

 RULE TO REMEMBER
• SANGGUNIANG BARANGAY HAS THE POWER TO CREATE OTHER
OFFICES BY WAY OF AN ORDINANCE SUCH AS THE POSITION OF
BRK, BNS, BHW, BARANGAY CLERK, ETC.

• THE CREATION IS BY WAY OF A BARANGAY ORDINANCE AND

NOT BY RESOLUTION.
 PUBLIC OFFICE

• PUBLICOFFICE IS “THE RIGHT, AUTHORITY, AND

DULY CREATED AND CONFERRED BY LAW…
(APARRI VS. COURT OF APPEALS, 127 SCRA 231)
QUALIFICATIONS FOR THE
POSITION
SUCH POWER TO CREATE BARANGAY POSITIONS INCLUDES
THE RIGHT TO PRESCRIBE THE QUALIFICATION
STANDARDS OF THE POSITIONS TO BE CREATED AND THE
DUTIES, POWERS AND FUNCTIONS OF THE INCUMBENT (DO 53 S.
2007; DO 43 S. 2008 CITING SEC. 396 OF THE LGC).
QUALIFICATIONS FOR THE
POSITION
• THE QUALIFICATIONS, DUTIES, AND FUNCTIONS OF
ALL OTHER BARANGAY OFFICIALS… SHALL BE
GOVERNED… BY BARANGAY ORDINANCES (SECTION 396,
LGC).
 PAHINUMDUM

• DILINATO MALIKAYAN NA ANG NAANDAN ANG

BASEHAN SA PAGPADAGAN SA ATONG OFFICE,.
PAHINUMDUM

DILI PUD NATO IKALIMOD NA WALAY PROBLEMA

KUNG ANG NAANDAN PAREHO SA BALAOD. APAN DILI
TANAN NGA NAANDAN NAGASUBAY SA PAMALAOD.
PAHINUMDUM
• KUNG ADUNA KITAY NATUN-AN KARON UG ANG
ATONG MGA NAANDAN SUKWAHI SA BALAOD, ATONG
USBON ANG NAANDAN UG DILI ANG BALAOD.
PAHINUMDUM
KUNG SA MAKADUGAY NA PANAHON WALAY
NAGREKLAMO KAY NAANDAN MAN KUNOHAY, DILI NA
NATO HULATON ANG PANAHON NGA MAREKLAMO TA
O MAKASUHAN TA.
PAHINUMDUM

• KAY KUNG KITA MAKASUHAN, DILI TA

MAKAINGON NGA WALA TA KABALO NA NAA
DIAY ING-ANA NGA BALAOD KAY…
PAHINUMDUM

IGNORANCE OF THE LAW

EXCUSES NO ONE.
THANK YOU