LGU PFM Reform Roadmap

What is the PFM Reform Roadmap?

A strategic guide on what LGUs want to do and achieve with their PFM in the immediate, medium and long term periods to attain their desired end-state (vision) complemented by a well-designed action program that details the activities and timeframe on how and when they could reach their PFM goal and vision.



Why develop the PFM Reform Roadmap?


Need for a single and comprehensive guide to address weak PFM
  • Lack of fiscal sustainability
  • Inadequate accountability mechanisms
  • Weak coordination among oversight agencies (OAs) and between OAs and LGUs

Uses of the reform roadmap


Provide LGUs with strategic directions to strengthen their PFM system towards improved revenue generation and expenditure management


Assist the OAs to strengthen their coordination in better supporting PFM reforms identified, designed and being implemented by the LGUs


Guide Development Partners in identifying possible entry points for financial support and other interventions


What is PFMAT?

What is PFMAT?

PFMAT stands for the Public Financial Management Assessment Tool. The PFMAT for LGUs is a self-assessment, evidence-based instrument which describes the characteristics of an open and orderly PFM system.

The tool describes the characteristics of a good PFM system, identifies performance indicators to gauge how the LGU is actually doing in a particular area of PFM, and identifies the sources of information which will help the LGUs establish their compliance with graduated levels of performance. This will help the LGUs identify the strengths and weaknesses in their PFM system as bases for improvement measures. (DBM Local Budget Circular No. 2012-101, October 12, 2012)

To facilitate the PFM assessment undertaken by the LGUs using the PFMAT, a software version of the tool has been developed under the auspices of the European Commission (EC) Grant for PFM Reforms.

The software has been further enhanced as part of the institutionalization of the PFMAT and PFMIP under the European Union (EU) funded project, “Support to the Local Government Units for More Effective and Accountable Public Financial Management.”

The enhancements to the software include a Data Management Module which would facilitate the analysis of the results of the assessments undertaken by the LGUs at the regional and national levels.



Value of the PFMAT for LGUs

The results of the PFM assessments using the PFMAT can:

  • Help the LGUs determine the strengths and weaknesses in their PFM systems, and provide bases for the adoption and implementation of improvement measures; (see sample PFM Improvement Plan)
  • Provide baseline information on the state of LGU PFM and serve as bases for benchmarking with other LGUs;
  • Encourage the development and replication of best practices in PFM; and
  • Serve as bases/criteria for inter-governmental transfers.


Critical Dimensions of Performance of a Good PFM System

Given the seven (7) key elements of the PFM system, the framework identifies the critical dimensions of performance of an open and orderly PFM system, as follows:

01Policy Based Budgeting  The LGU prepares its budget with due regard to government policy.

02Comprehensiveness and Transparency  contains indicators that measure if budget information provide a complete picture of revenue forecasts, prior, current and budget years’ expenditures, and the expected outputs. They also measure whether fiscal and budget information are accessible to the public.

03Credibility of the Budget  contains indicators that measure whether or not the budget is realistic and is implemented as intended.

04Predictability and Control in Budget Execution  The LGU prepares its budget with due regard to government policy.

05Accounting, Recording and Reporting  contains indicators that measure whether or not adequate records and information are produced, maintained, and disseminated for purposes of decision-making, control, management, and reporting on operations.

06Internal and External Audit  contains indicators that examine the arrangements for scrutiny of public finances and follow-up by the LCE and/or the Local Sanggunian.

07Citizens’ Participation  contains indicators that measure the extent by which the LGU encourages concerned citizens organized as Civil Society Organizations (CSOs) become partners of the LGU in the formulation, monitoring, evaluation and improvement of the local budget.





About the LGU PFM 2 Project

This project is funded by the European Union with a grant of eight(8) million Euro and is implemented by the Government of the Philippines. Under the name, "Support to the Local Government Units for more Effective and Accountable Public Finance Management", otherwise known as the LGU PFM 2 Project.


The overall objective of the project of which this contract will be a part is to contribute to the achievement of the MDGs and poverty reduction in the Philippines, in line with the 2011-2016 Philippine Development Plan, through improved public finance management resulting in improved delivery of basic services by local governments.


The purpose of this contract is to support the Government at national and regional level to enhance capacity of local governments to generate revenue and to allocate and spend public funds more effectively and efficiently.

Expected Results

The Project will assist the Department of Budget and Management, the Department of Finance/Bureau of Local Government Finance, Department of Interior and Local Government and potentially the Commission on Audit and the National Economic Development Authority to achieve the following results:

Component 1

Improved institutional capacities of the oversight bodies at national level

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Morbi porta, massa ut pulvinar lacinia, nisi felis dictum elit, sed pulvinar odio metus hendrerit ligula. Curabitur vitae ex non felis imperdiet finibus vitae id nisi. Duis pellentesque, justo vel convallis placerat, risus erat rutrum erat, ac bibendum nunc dolor vel risus. Morbi aliquam urna risus, nec laoreet neque molestie id. In condimentum egestas lorem, ut varius dui rhoncus in. Mauris vestibulum risus in arcu pellentesque interdum. Quisque finibus tempor egestas.

Component 2

LGU PFM policy agenda and action plan developed

Quisque non cursus velit. Vivamus congue magna vitae arcu dapibus vestibulum. In tincidunt neque lorem, ac placerat mauris aliquam sit amet. Pellentesque habitant morbi tristique senectus et netus et malesuada fames ac turpis egestas. Morbi egestas laoreet erat, non consectetur sapien auctor non. Proin rhoncus fermentum tincidunt. Integer dapibus quis lorem ac euismod. Aliquam erat volutpat. Aenean vel vestibulum velit. Aenean ante tortor, blandit quis vestibulum ut, viverra non tellus. Ut mattis ante vel sem vehicula, eget luctus est varius. Suspendisse mollis nulla sed venenatis scelerisque. Suspendisse potenti. Duis ligula magna, ultrices ac lacus a, ornare vestibulum odio. Sed nec nisi dictum, vestibulum ligula ac, viverra sapien. Donec libero metus, ultrices vel fermentum posuere, elementum ut massa.

Component 3

Strengthened capacity of the Regional Offices

Mauris lacinia mauris purus, vel pharetra mi hendrerit a. Quisque accumsan sed arcu et condimentum. Nunc vestibulum et lacus vitae scelerisque. Maecenas arcu enim, vehicula in lobortis et, tempus sed ex. Morbi malesuada blandit sollicitudin. Vestibulum condimentum pretium sem, non malesuada erat commodo id. Proin egestas egestas mollis. Cras ligula ipsum, tincidunt a metus in, convallis tempus enim. Fusce rhoncus lectus ligula, vel pharetra ligula molestie nec. Aliquam rutrum ultrices velit, eget pulvinar justo tempor lobortis. Vivamus tempus efficitur tellus, at tristique eros interdum non. Nulla semper augue at risus tristique, non laoreet arcu ornare. Aliquam finibus, ipsum et facilisis sollicitudin, nunc augue aliquam est, elementum cursus est urna eget lacus. Morbi vel mollis lacus. Fusce a placerat diam.

Component 4

Improved revenue generation and management at LGU level

Donec ac ullamcorper diam. Aliquam magna nisi, efficitur eleifend metus quis, pharetra rhoncus dolor. Integer mi massa, tincidunt ut malesuada maximus, lobortis non lectus. Ut malesuada purus et neque iaculis tincidunt. Duis pulvinar quis enim nec fringilla. Morbi tincidunt mattis erat quis ornare. Sed porttitor est ac justo feugiat, eu ultrices nisl sagittis. Ut elit leo, facilisis rutrum vehicula in, dignissim vitae lectus. Donec vestibulum ex sem, ac iaculis urna porttitor ut. Mauris semper magna eu metus fringilla, quis vehicula eros pulvinar. Ut sit amet dui non leo tempor fermentum sit amet quis nunc.

Component 5

Improved budget, planning and execution

Donec pretium consequat commodo. Donec euismod eros eu ipsum suscipit fermentum. Nunc a fringilla metus. Pellentesque at convallis nisl. Aliquam consequat sit amet nulla eu lobortis. Nam eget eleifend tortor. Curabitur mattis hendrerit ultricies. Cras at dapibus leo. Aliquam a sodales ante, quis semper nisl. Suspendisse tempus dictum interdum. Nullam dignissim, tortor non fermentum maximus, ipsum erat pellentesque neque, vitae aliquet mauris augue eget tellus. Aliquam erat volutpat. Nulla lacinia leo velit.

Component 6

Strengthened Internal Control Systems/Internal Audit Services at LGU level

Etiam sit amet sollicitudin libero. Aenean vestibulum tempor lacus non pulvinar. Cras sit amet dui neque. In non purus in magna dignissim pretium. Morbi aliquet risus ac posuere ultrices. Suspendisse ultrices purus a justo efficitur viverra. Ut eu ante tincidunt, suscipit neque vel, commodo nulla. Fusce elementum semper mattis. Morbi vel magna at enim egestas congue ultricies id felis. Morbi et metus placerat, mollis dolor eleifend, laoreet dolor. Donec tristique sapien ut libero gravida suscipit.

Component 7

Localized procurement reforms

Proin vitae semper risus, sed sodales justo. Interdum et malesuada fames ac ante ipsum primis in faucibus. Ut sit amet erat sed diam posuere consectetur imperdiet id elit. Nulla cursus sem vel nibh hendrerit, id rutrum eros gravida. Suspendisse sed auctor lacus. Vestibulum risus metus, posuere sit amet erat ut, rhoncus dictum leo. Sed fermentum orci quis velit luctus blandit. In molestie libero vitae nisl efficitur feugiat. Nam in odio id ligula luctus commodo. Mauris aliquet eu lectus ac vestibulum. Etiam aliquet et mauris ac rutrum.

Component 8

Strengthened budget monitoring and evaluation at LGU level

Donec efficitur interdum mauris ac commodo. In vitae scelerisque est, non feugiat neque. Sed condimentum in ex sit amet rhoncus. Aenean suscipit tristique mi ac posuere. Suspendisse quis elit vitae velit mollis tempus eu at urna. Aenean maximus massa id mauris scelerisque rutrum. Phasellus pretium magna a purus ullamcorper tincidunt. Vivamus vestibulum, urna id egestas cursus, orci tellus fermentum nulla, a laoreet nisl nisl id orci. Etiam tincidunt porta varius. Etiam vehicula pellentesque faucibus.

Component 9

Enhanced effectiveness of LGU performance monitoring systems

Suspendisse mollis egestas purus, ut elementum urna viverra in. Vestibulum luctus tempor augue sit amet molestie. Nulla neque felis, fringilla vitae urna in, aliquam finibus nibh. Vivamus ut varius nunc, sit amet feugiat leo. Fusce non rutrum magna. Aenean pharetra urna quis scelerisque mollis. Suspendisse venenatis sapien vel lacus scelerisque gravida. Vestibulum euismod porta velit eu ornare. Sed euismod sit amet diam non tempor. Fusce molestie elit non placerat placerat.

Component 10

Financial management leadership developed at LGU level

Cras cursus, quam ut tempus tempor, diam erat rhoncus tellus, id finibus arcu nisi a magna. Integer imperdiet elementum erat a molestie. Pellentesque habitant morbi tristique senectus et netus et malesuada fames ac turpis egestas. Vestibulum rhoncus bibendum neque ac iaculis. Aenean vestibulum euismod lectus vitae vestibulum. Nullam placerat, quam ac bibendum scelerisque, turpis mi pharetra turpis, congue viverra dui elit et nisl. Donec at consectetur felis, eu dignissim massa. Cras purus diam, facilisis in sem in, auctor ornare diam. Donec cursus luctus malesuada.

project results