The Municipal Development Fund Office conducted an awarding ceremony for the Performance Based Grant Incentive for Local Governments under the Second Agrarian Reform Communities Project last 18 March 2016 at the Bureau of the Treasury, Ayuntamiento Building, Manila.

The Performance Based Incentive for Local Governments is a joint collaborative effort between the Municipal Development Fund Office-Department of Finance (MDFO-DOF) and Department of Agrarian Reform (DAR) under the Second Agrarian Reform Communities Project (ARCP II). While the ARCP II is being funded by the Asian Development Bank (ADB), the Performance Incentive is sourced from the Government of the Philippines (GOP) amounting to P1.12 billion.

It covers 17 Local Governments from Regions V and VIII covered namely: Municipalities of Baao, Garchitorena, and Tigaon, Province of Camarines Sur; Municipalities of Bulan, Casiguran, Castilla, Juban, and Matnog, Province of Sorsogon; Municipality of Salcedo, Province of Eastern Samar; Municipalities of Alang-Alang, Calubian, Kananga, San Isidro, and Villaba, Province of Leyte; and Calbiga, Daram, and Villareal, Province of Samar.

The ARCP II is one of the Official Development Assistance (ODA) projects using the Performance Based Incentive Policy (PBIP). This PBIP serves as a framework that would guide performance based initiatives and rationalizes intergovernmental fiscal transfers in the Philippines as approved by the Development Budget and Coordinating Committee (DBCC) on 20 February 2009. The PBIP aims to leverage efforts of reform-minded LGUs to National Government incentives. The NG expects to recoup the financial incentives that would be provided to these LGUs through a more efficient service delivery of LGUs to their constituents thereby avoiding costs borne out of inefficiency.

As of 17 March 2016, the MDFO-Policy Governing Board (PGB) has already committed a total of P929.31 million for 122 Local Governments for Capital and Capacity Development Grants. Out of the 122 LGUs, 113 are recipients of Capital Grant in which 18 have already been awarded with plaque of recognitions in different occasions.

The event is one of a series of ceremonies that will be conducted to cover the remaining 78 PBGS-ARCP II Capital Grant beneficiaries.