USAID FROM THE AMERICAN PEOPLE INTERNATIONAL 
ABC+ Advancing Basic Education in the Philippines 
LCP CITIES' 
SYSTEM CAPACITY 
DEVELOPMENT 
(Cl-CAP) PROJECT 
Challenges and Opportunities in 
Financing the Education Requirements 
of Early Grade Learners 
Baseline Report I September 30, 2020 
0 
The Asia Foundation 
Published by:
ABC+ Manila Office
League of Cities of the Philippines 
LCP CITIES’ SYSTEM CAPACITY 
DEVELOPMENT (CI-CAP) PROJECT
Challenges and Opportunities in Financing the Education
Requirements of Early Grade Learners
Baseline Report | September 30, 2020
ABC+ Advancing Basic Education in the Philippines
Table of Contents 
EXECUTIVE SUMMARY ............................................................................................ 1
Objectives of Research ................................................................................. 2
Key findings ................................................................................................. 2
Key Recommendations ................................................................................. 3
INTRODUCTION ........................................................................................................ 5
Objectives and Expected Outputs .................................................................. 6
Methodology and Data Sources ..................................................................... 7
DATA FINDINGS AND ANALYSIS ............................................................................. 9
Special Education Fund Policy Challenges .................................................... 9
Advocacy Efforts to Update the SEF Guidelines 
During the Pandemic ........................................................................ 12
Advocacy Efforts to Amend the Local Government Code for 
SustainableEducation Financing ........................................................ 14
Trend in Local Education Financing ............................................................... 17
SEF Utilization Rate vis-a-vis the SEF per Capita 
of Ci-Cap Cities ................................................................................ 18
National and Regional DepEd Realigned 
Budget Allocation 2020 ..................................................................... 19
Priority SEF Expenses of Ci-Cap Pilot Cities 
in General (Pre-pandemic) ................................................................ 21
Capacities of Ci-Cap Cities ........................................................................... 24
The Local School Board “LSB”........................................................... 25
Support for DepEd’s Basic Education
–Learning Continuity Plan (BE-LCP) ................................................. 26
Varying Investments for Early Grade Learners .................................. 29
INITIAL RECOMMENDATIONS .................................................................................. 31
The Special Education Fund .......................................................................... 31
SEF Guidelines ................................................................................. 31
Amendment of the Local Government Code for 
Sustainable Education Financing ...................................................... 33
Local Education Financing ............................................................................. 35
Capitalizing on Sports Development .................................................. 35
Potential to Invest in Learning Spaces ............................................... 35
Strategic Advocacy for K to 3 expenses ............................................. 36
Capacities .................................................................................................... 36
MOVING FORWARD .................................................................................................. 37
ANNEXES ................................................................................................................. 40
Annex A - LCP Ci-Cap SEF Survey for Member Cities ..................................... 41
Annex B - Current SEF Utilization Guidelines ............................................... 46
Annex C - Addendum No. 1 to JC No. 1 S. 2017 ............................................. 58
Annex D - Addendum No. 2 to JC No. 1 S. 2017 ............................................. 61
iii LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
Acronyms
ABC+ Advancing Basic Education in the Philippines Project
BE-LCP Basic Education-Learning Continuity Plan 
Ci-Cap Cities’ System Capacity Development Project
COA Commission on Audit 
DBM Department of Budget and Management
DepEd Department of Education
DILG Department of the Interior and Local Government
EGL early grade learner
IR Intermediate results
JMC Joint Memorandum Circular
K-3 kindergarten to grade 3
League League of Cities of the Philippines
LGU Local Government Unit
LSB local school board
PHP Philippine peso
PPA programs, projects, and activities
SEL socio-emotional learning
USAID United States Agency for International Development
1 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
The Asia Foundation (TAF) is an implementing partner of RTI 
International (RTI) (with SIL LEAD, and Florida State University) in 
the United States Agency for International Development (USAID) 
supported ABC+ Advancing Basic Education in the Philippines 
project in Regions V and VI.
TAF partnered with the League of Cities of the Philippines (LCP) 
to develop this baseline study on local government engagement 
in Early Grade Learning with the aim of identifying challenges 
and opportunities in financing the education requirements of early 
grade learners. While focusing broadly on the various financing 
options that might be available to LGUs, this study applies most 
attention to the Special Education Fund (SEF). This is for two 
reasons: 1) the SEF is specifically allocated for education with 
existing structures that support collaboration between the local 
education authorities and the LGUs; 2) while empirical work looked 
at multiple options across different target regions, the SEF was 
interpreted as the most relevant and impactful fund, with few other 
options identified that could make a meaningful impact.
The baseline was gathered through online surveys, discussions, 
and review of secondary data. This diverged from the initial 
planned methodology due to the Covid-19 pandemic, which 
made any travel and in-person meeting impossible. Furthermore, 
the difficulty in mobility and internet connectivity necessitated 
workarounds to allow LCP to robustly gather information in 
informing this study.
EXECUTIVE SUMMARY 
2 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
Objectives of Research
1. Identify income streams and alternative funding sources for cities to use to 
finance teacher training and learning materials for primary school children;
2. Identify gaps and challenges in planning, financial appropriations, and 
implementation of basic education programs, projects, and activities and 
policies; and
3. Increase local stakeholders’ engagement in planning and implementing 
sustainable basic education services, programs, and policies (this is not a 
research objective, but was utilized for value for money and other considerations).
Key findings
It was anticipated that research would show that SEF funds are underutilized, to EGL 
as well as other grade levels. However, it was unanticipated that only a few LGUs 
contributed direct investment towards EGL. Most investments are distributed to basic 
education or just to all levels. Also surprising is that among Local Chief Executives 
(LCEs) there is limited understanding of why EGL is important and how it impacts 
higher education levels. More specifically, there is very limited awareness on the 
implementation of Mother Tongue Based Multilingual Education (MTB-MLE) amongst 
the LGUs. 
From the findings of this research, the top SEF expenditures are capital outlay and 
Miscellaneous and Other Operating Expenses (MOOE) including construction, sports 
activities, and utility or maintenance of schools. From the 10 local governments 
that were covered by the baseline, only 3 LGUs (Iriga City, Iloilo City and Negros 
Occidental province) have specific allocations towards EGL. These specific 
allocations are either a specific EGL program or intended for K-3 learners. Research 
indicates that the utilization rate varies from as low as 20% to 100% or even more. 
The baseline analyzes data from 2016/2017 to 2019. 
While spending remains a challenge, much of it reflects policy and guidelines related 
to SEF implementation. The LGUs covered had concerns and varying experiences 
with the Guidelines attached to the SEF - the Joint Memorandum Circular no. 1 of 
2017. The LGUs note that these Guidelines are restrictive, that they experience 
constant findings showing unallowable expenses, and note that LGU interpretation of 
3 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
the Guidelines varies per locality. With the ongoing pandemic and the requirements 
under DepEd’s Basic Education Learning Continuity Plan (BE-LCP), the SEF is now 
in even greater demand. The shift to blended learning and the need for printing and 
distribution of learning materials, internet connectivity and learning support aides 
pushed the government, DepEd, DILG and DBM, to amend the 2017 guidelines to 
adapt to the new normal of blended learning. The second addendum to the 2017 
guidelines was signed Oct 23, after research for this study was concluded.
The SEF allocation is decided upon by the Local School Board, with the Local Chief 
Executive (LCE) and the DepEd Schools Division Superintendent (SDS) or District 
Supervisor sitting as co-chairs. The baseline discovered that the frequency of LSB 
meetings varies per locality. Some LSBs meet regularly as mandated by law, and 
some meet as needed or even just yearly. In addition to variation in frequency, 
these meetings also differ qualitatively, based largely on key actors at the 
community level. There is also varying understanding of how the SEF is allocated. 
Some say that it is in the purview of the LCE. Some say that it is the DepEd SDS 
who decides on what gets allocated from the SEF. The LSB membership is indicated 
in the Local Government Code, however, not all LSBs have complete membership. 
There are also LGUs who have expanded their membership based on the needs of 
their locality, which shows positive results in inclusiveness and stakeholder buy in. 
Although the SEF is a dedicated local fund for education and is taken from the Real 
Property Tax, it is still a small amount and differs across LGUs as based on size, 
wealth, and other factors. Based on local government income, the SEF is shown to 
be less than 5% of the total, which includes local tax revenue, non-tax revenues, the 
internal revenue allotment (IRA), LGU share in national wealth, inter-LGU transfers, 
and other external grants and subsidies. The fund share also varies across local 
government levels. Cities get 100% of RPT, while provinces and municipalities 
share in the RPT. 
Key Recommendations
• SEF guidelines need to be more responsive to local needs, particularly 
the Basic Education Learning Continuity Plan (BE-LCP). Even prior to the 
pandemic, the SEF guidelines were acknowledged to be restrictive and not 
reflective of education-related requirements that local government should 
support. With New Normal blended learning implemented, requirements for 
4 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
education expanded and changed. Local governments, especially the SEF, 
are expected to complement the national government budget. These new 
requirements need to be reflected in the SEF guidelines (As of October 23, 
2020, the second addendum to the 2017 Joint Memorandum Circular no. 1
was released, which includes the BE-LCP requirements. The Leagues have 
been active in supporting and representing local government concerns with 
the three oversight agencies, DepEd, DBM and DILG. They are committed 
to monitor the implementation of this revised guidelines in the Ci-Cap areas 
and will continue to support this addendum through implementation).
• More private sector and civil society representation is needed to provide 
guidance to local government officials in the more effective planning and 
prioritization of SEF funds towards EGL. Expansion of LSBs is one avenue 
through which this could be accomplished. The Local Government Code 
has a list of members required in the LSB, however, given the changes in 
education system and needs, wider stakeholder participation is needed. 
• There is a need to diversify resources for EGL, including the SEF, General 
Fund (GF) and other local income streams. As presented in the baseline, 
EGL investments are very limited and mostly emerge from the SEF. 
However, given the current demand of blended learning and the necessary 
health and safety protocols, the SEF is not enough in itself to complement 
the national government budget. Baseline research showed minimal 
investment coming from either there or other resources, such as loans. 
There is the need to strengthen education planning between DepEd and LGUs 
through LSBs and other platforms. There is varying understanding and interpretation 
of how the LSBs plan for the use of the SEF. It was evident in the baseline that 
LGUs and DepEd differ in their understanding of their responsibilities within the 
LSB and specifically on the SEF allocation. Apart from the LSB, there are different 
platforms and mechanisms wherein the LGUs and DepEd plan independently, and 
these are not aligned with one another regarding timeline and process. 
5 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
01
The League of Cities of the Philippines (the League), in 
partnership with The Asia Foundation (the Foundation), and 
with funding from the United States Agency for International 
Development (USAID), is spearheading the Cities’ System 
Capacity Development Project (Ci-Cap) in the Bicol and Western 
Visayas Regions. This is part of USAID’s ABC+ project,1
 which is 
focusing on the following Intermediate Results (IR), which are to:
1 USAID’s Advancing Basic Education in the Philippines Project (ABC+) was launched in July 2019 
to support the efforts of DepEd to strengthen the quality of education in the Philippines. USAID and 
DepEd chose RTI International as the lead implementing body for the project’s efforts to improve 
children’s basic life skills in primary education (Kindergarten to Grade 3). Through its focus on 
systems strengthening, ABC+ is supporting the efforts of DepEd and other education stakeholders 
to address the interconnected factors that contribute to poor educational outcomes, and also to 
identify innovative and sustainable ways to address the challenges in improving children’s literacy, 
numeracy, and socio-emotional learning.
1. Improve instruction and learning delivery (IR1);
2. Improve access to quality materials (IR2); and
3. Ensure that improvements introduced by ABC+ can reach 
all schools in the target regions and be sustained (IR3)
The Ci-Cap project addresses IR3 through building and 
strengthening cities’ education system capacity and cities’ 
commitment to plan, mobilize, and manage resources to support 
improving children’s learning outcomes at the primary level. 
In addition, the project aspires to enhance cities’ capacity 
to collaborate with the Department of Education (DepEd) to 
harmonize their education programs. The following six (6) pilot 
cities are participating in the Ci-Cap project:
1. Iloilo City
2. Bacolod City
3. Iriga City
4. Legazpi City
5. Roxas City
6. Escalante City
INTRODUCTION
6 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
Local Government Units (LGUs) and other local stakeholders have been encouraged 
to collaborate in providing the necessary support and resources for primary school 
children’s educational development.
Objectives and Expected Outputs
Generally, the Ci-Cap Project aims to mobilize cities and local stakeholders in the 
selected regions to support and sustain the improvements introduced in early grade 
learning outcomes by identifying income streams and alternative funding sources to 
finance critically needed basic education programs, projects, and activities (PPAs) at 
the primary level.
The Ci-Cap Project specifically intends to:
a. Identify income streams and alternative funding sources for cities to use to 
finance teacher training and learning materials for primary school children;
b. Identify gaps and challenges in planning, financial appropriations, and 
implementation of basic education PPAs and policies; and
c. Increase local stakeholders’ engagement in planning and implementing 
sustainable basic education services, programs, and policies.
Figure 1 illustrates the strategic framework of the Ci-Cap Project. The project aims 
to: (S1) understand cities’ current approach to spending on education; (S2) address 
the policy challenges that limit spending from the Special Education Fund (SEF); 
and (S3) build cities’ capacity to allocate resources by identifying alternative income 
streams and funding sources for the primary level.
Figure 1. Strategic Framework
7 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
Methodology and Data Sources
Critical activities for each strategy in the strategic framework were identified to 
ensure that the three would lead to their desired outcomes. Both primary and 
secondary data were used to understand exactly how cities have been allocating 
resources for education, the capacities required to improve the allocation of 
resources, and how to build a supportive policy environment that will enable cities to 
carry out these functions.
As not all cities are created equal, not all cities have the same resources available. 
Thus, it is critical to understand exactly how cities spend on education, and the 
factors contributing to their behavior. In general, cities find their SEF restrictive 
and unresponsive to the needs of early grade learners. The Covid-19 pandemic 
has exacerbated the SEF’s failure to finance key educational requirements such as 
teacher training and learning materials. The cessation of face-to-face learning as a 
result of the pandemic compelled identification of new requirements that need to be 
supported by the SEF, including the delivery of learning materials and the hiring of 
para-teachers (learning facilitators or learning support aides).
Travel restrictions and strict physical distancing requirements to stop the spread 
of Covid-19 have significantly impacted the League’s ability to implement the Ci￾Cap project. This has led to modifications from the research design presented in 
the project proposal, in which project team members were supposed to travel to the 
target regions in order to conduct focus group discussions and one-on-one interviews 
with education stakeholders. As a result of the new travel and health protocols, the 
research team had to conduct most of their planned activities virtually.
To determine the gaps in education financing at the local level, the team conducted 
an in-depth review of government education policies and programs, and analysis of 
SEF reports for the six Ci-Cap pilot cities from 2017 to 2019 vis-a-vis how national 
policy decisions affected SEF spending.
A 10-item rapid assessment survey was conducted with city administrators to 
determine how their city generally allocated the SEF, and to gather administrators’ 
views on the current SEF utilization guidelines (see Annex “A”). The participants 
were expanded from the Ci-Cap pilot cities to those willing to take part in the 
survey, which is a total of 73. Secondary data were obtained from DepEd and the 
Department of Finance–Bureau of Local Government Finance, which were used to 
validate the data collected from the cities.
8 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
Policy dialogues were then organized to gather insights from oversight agencies 
about liberalization of the SEF utilization guidelines. The participants were staff from 
DepEd, the Department of Budget and Management (DBM), and the Department of 
the Interior and Local Government (DILG). These sessions were held in July and 
August 2020. Information was also drawn from the congressional hearings in which 
the League regularly participates that related to liberalization and utilization of the 
SEF.
After the Covid-19 pandemic began, the team held a dialogue with the DepEd 
Regional Offices that have jurisdiction in the Ci-Cap pilot cities. This dialog provided 
a regional overview of efforts to implement the Basic Education-Learning Continuity 
Plan (BE-LCP), as well as the corresponding educational financing implications that 
the plan will have at the local level.
To ensure the quality of the project’s key deliverables, the project team hired local 
city coordinators to gather data from the project cities and help them to better 
understand the situation at the local level. To supplement the quantitative data 
gathered for the project, the League hosted a number of deep-dive sessions with the 
Ci-Cap cities’ focal staff and coordinators that were held in August and September 
2020.
Figure 2. Deep dive sessions with Ci-Cap Cities
9 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
Special Education Fund Policy Challenges
A supportive policy enabling environment is a critical 
requirement for strategic investments to improve Kindergarten 
to Grade 3 (K–3) learning. Cities’ SEF is governed by 
Sections 100 (c) and 272 of the Local Government Code, and 
the corresponding Joint Memorandum Circulars issued by the 
oversight agencies in the national government.
SEC. 100. Meetings and Quorum; Budget.
(a) The local school board shall meet at 
least once a month or as often as may be 
necessary.
(c) The annual school board budget shall give 
priority to the following:
(1) Construction, repair, and maintenance of 
school buildings and other facilities of public 
elementary and secondary schools;
(2) Establishment and maintenance of 
extension classes, where necessary; and
(3) Sports activities at the division, district, 
municipal, and barangay levels.
02DATA FINDINGS AND 
ANALYSIS
10 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
The League has consistently argued for the liberalization of the SEF guidelines in 
order to enhance cities’ flexibility with how they spend their SEF funds. However, in 
doing so, they have encountered persistent policy challenges. This section discusses 
those policy challenges in detail and also identifies possible opportunities to improve 
the educational outcomes for K–3 learners.
A review of the data collected from the Department of Finance–Bureau of Local 
Government and Finance show that in 2018, cities were only able to use about 
60.50% of their SEF, which is a suboptimal rate. The data on poor SEF utilization 
reflect the difficulties that many cities face in using their SEF.
Figure 3. 2019 SEF Utilization Rate of Cities (Source: DOF - BLGF)
SEC 272. Application of Proceeds of the Additional One 
Percent SEF Tax - The proceeds from the additional one 
percent (1%) tax on real property accruing to the Special 
Education Fund (SEF) shall be automatically released to the 
local school boards: provided, that, in case of provinces, the 
proceeds shall be divided equally between the provincial 
and municipal school boards: provided, however, that the 
proceeds shall be allotted for the operation and maintenance 
of public schools; construction, and repair of school buildings, 
facilities, and equipment; educational research; purchase 
of books and periodicals; and sports development, as 
determined and approved by the local school board.
11 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
It should be noted that the latest comprehensively amended SEF guidelines, issued 
in 2017, is a significant improvement from the previous version issued in 1998. 
The 2017 guidelines (see Annex “B”) allow more education-related expenses to 
be charged against the SEF. Prior to the 2017 revision, these expenses were often 
rejected by the Commission on Audit (CoA). The CoA’s varying interpretations about 
which expenses could be charged to the SEF is a constant source of confusion 
for cities, and has led to conservative SEF spending in some cities. Nevertheless, 
despite the amendments to SEF policies in 2017 that expanded the list of allowable 
items, the guidelines on the utilization of the SEF are still considered too restrictive 
by most cities.
In the survey conducted by the League with its city members, the top reasons for 
their low SEF utilization were as follows:
• 76% of respondents reported that their city had expenses that could not be 
charged to the SEF
• 72% of respondents considered that the SEF guidelines were too restrictive
• 55% of respondents reported that they did not have enough leeway in using 
the SEF
Figure 4. Challenges in SEF Utilization
The common theme across the top three challenges presented in Figure 5 concerns 
cities’ ability to charge educational expenses under the existing SEF guidelines. This 
study’s survey results confirm the need to further pursue SEF liberalization to ensure 
that the fund is responsive to learners’ needs, which can vary with the local context. 
12 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
This entails continuous conversations with national oversight agencies to review and 
amend the existing Joint Circulars. Alternatively, amendments could be made to the 
Local Government Code.
As a result of the Covid-19 pandemic, immediate drastic reform of the education 
system is required in order to adapt to the new normal in time for schools’ opening 
in October 2020. As cities prepare for the coming school year, they must be able to 
fully maximize use of their SEF, which means that further liberalization of the SEF 
guidelines is all the more urgent so that they can respond to the requirements of 
DepEd’s learning continuity plan.
Advocacy Efforts to Update the SEF Guidelines During the Pandemic
The League conducted three major activities to engage the oversight agencies—
DepEd, DBM, and DILG, and facilitate amendment of the Joint Memorandum Circular 
(JMC): 
1. A webinar held on July 10, 2020 with DepEd Undersecretary, Annalyn Sevilla, 
on the key components of the Basic Education Continuity Plan (BE-LCP);
2. A policy dialogue held on August 3, 2020 with DILG on the proposed 
addendums to the JMC that were specifically on Covid-19-related items; and
3. A policy dialogue held on August 11, 2020 with DBM, DILG, and DepEd to 
achieve consensus on the amendments to the JMC.
As a result of the national government’s instruction to the LGUs to support the 
opening of classes, city mayors invited DepEd to a dialogue on July 10, 2020 to 
further clarify the role of local governments in implementing the Basic Education–
Learning Continuity Plan (BE-LCP) that is expected to guide the delivery of 
basic education during the Covid-19 pandemic. Through this webinar, DepEd 
Undersecretary, and city mayors tackled local issues regarding re￾opening classes and implementation of blended learning, which DepEd has proposed 
for the upcoming school year. 
The session provided an overview of DepEd’s BE-LCP, as well as strategies for 
funding the effective implementation of the program. Some of these strategies include 
recalibration of the agency’s budget; utilization of the SEF, in coordination with 
the LGUs; access to official development assistance; and maximization of private 
sector contributions. It was also disclosed that DepEd, DILG, and DBM are currently 
discussing proposed amendments to the 2017 Joint Circular on SEF utilization 
13 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
that would allow and facilitate local governments’ expenditures that are related to 
implementation of the BE-LCP. 
During the policy dialogue with the DILG representatives that was held on August 3, 
2020, DILG assured the League that it is very supportive of the League’s proposal 
to update the SEF guidelines to address schools’ pandemic-related needs. In this 
dialogue, city representatives articulated their challenges in preparing for school 
opening. These challenges include the mobilization of parents and the community to 
support home schooling, provision of the infrastructure needed for learning spaces, 
expansion of Internet connectivity, reproduction and distribution of learning and 
instructional materials, and K–3 learners’ difficulties to blended learning.
Two proposed addendums to the current Joint Circular on the SEF were presented 
by the DILG. As of 27 August 2020, Addendum No. 1 was released that supports 
implementation of the Republic Act 11037 or the Masustansyang Pagkain para sa 
Batang Pilipino which includes support for the National Feeding Program (see Annex 
“C”). Item 1.1. of this Joint Circular No.1, Series of 2020, benefits K–3 learners.
Addendum No. 2 that contains provisions associated with Covid-19-related expenses 
and implementation of BE-LCP, was signed in October 2020. Among others, this 
draft addendum includes the printing of learning modules, textbooks, and study 
guides; honoraria for teachers and locally-hired para-teachers; Internet connectivity 
costs; and transportation expenses related to carrying out the full implementation of 
modular learning. (see Annex “D”).
DILG also demonstrated its support for the League to lobby for Senate Bill 1579 that 
Senator Gatchalian has proposed to add a negative list in the SEF guidelines, and 
amend the Local Government Code’s positive list on SEF use.2
On August 11, 2020, high-ranking national DBM, DILG, and DepEd members met 
online with mayors and other representatives from the cities of Bacolod, Escalante, 
Roxas, Iriga, Legazpi, and Iloilo for a policy dialogue on the proposed amendments to 
the DepEd-DBM-DILG Joint Memorandum Circular (JMC) No. 1, s. 2017 (the Revised 
Guidelines on the use of the Special Education Fund (SEF) by local governments). 
The updating of the JMC marks progress for cities’ long-standing appeal to liberalize 
use of the SEF—a reform that has become urgent, given Local Government Units’ 
tremendous task in ensuring that learning will continue through implementation of 
2 Positive list presents specific items that are allowed to be spent for using the Special Education Fund. A negative list presents 
specific items that are not allowed to be spent for using the Special Education Fund.
14 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
DepEd’s BE-LCP in preparation for the upcoming ‘stay at home’ school year that was 
set to start on October 5, 2020.
At time of the August meeting, DepEd spearheaded adoption of the latest JMC 
addendum to clarify the terms for using the SEF in implementing the BE-LCP in 
response to Covid-19. Secretary of the DBM expressed his intent to 
sign the new JMC once DepEd had responded to the issues raised during the August 
meeting. The senator also emphasized the importance of maintaining the LGUs’ fiscal 
autonomy, and he called on his fellow Cabinet members to acknowledge that the SEF 
is a locally-governed fund. DILG Undersecretary, reiterated 
the DILG’s commitment to the LGUs having full autonomy in deciding how to use the 
SEF, which has been evident in the DILG’s push for including a negative list in the 
JMC addendum.
During the dialogue, Mayor the League of Cities Representative 
for Region V and Iriga City, appealed for greater financial support from the 
national government for cities that have low SEF collections because of their city’s 
classification, and main source of income. Their SEF is small, she said, and even 
if it was fully used, the city would be unable to adopt DepEd’s BE-LCP. This appeal 
for more funds was supported by the results of the League’s survey that showed 
that 60% of cities in the country need supplementary support from the national 
government so that they can finance the costs of implementing the BE-LCP. These 
cities comprise those with a low SEF collection, and those with an increase in 
learners, which will eventually negatively impact their high SEF collection.
Those attending the August dialogue expressed the need to agree on a version of the 
JMC that would be acceptable to the DILG, DBM, and DepEd as further clarification 
is needed in the JMC regarding the LGUs hiring additional teachers, preventing 
duplication of items that might be charged to both the SEF and the national budget, 
and the allowances given to nationally-hired teachers.
Advocacy efforts to Amend the Local Government Code for Sustainable 
Education Financing
In both Houses of Congress, there are two proposed amendments to the Local 
Government Code that have implications for the SEF: Senate Bill 1579 that Senator 
 has authored, with strong support from the Synergeia Foundation; and 
the Unnumbered House Bill that Congressman has proposed. 
In the Senate, both bills have been heard at the technical working group level, 
but have yet to be approved at the committee level. As of December 2020, the 
15 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
unnumbered substitute bill was pending approval at the committee level in the House 
of Representatives, and review of the bill had yet to be scheduled due to ongoing 
budget deliberations.
The diagram below shows the similarities and differences between the two pending 
bills on SEF amendments: SBN 1579, and Unnumbered House Bill.
Figure 5. Similarities and differences between SBN 1597 and the Unnumbered House Bill
The similarities between both bills include:
1. strengthening the role of the local school board;
2. allowing the use of the SEF for emergencies; and 
3. specifying a list of SEF priority expenses.
The bills also have distinct provisions. The Senate bill has provisions that expand 
the membership of the local school board, and would provide an operations manual 
to guide local school boards in local planning and budgeting. In contrast, the House 
16 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
bill includes provisions that increase the financing options available to LGUs for use 
of the SEF. The provisions of both bills would contribute to revolutionizing how cities 
use the SEF, and strengthen the role of local school boards in strategic planning and 
allocating funds in order to achieve optimal educational outcomes. As of December 
2020, no committee meetings to approve these reforms had been scheduled.
Trend in Local Education Financing
In order to identify income streams and alternative funding sources for cities to use 
in financing better education for children in primary school, this study took a closer 
look to identify general tends in cities’ behavior with respect to financing education. A 
comparative analysis was also undertaken with regard to the level of SEF collections, 
and the education items usually charged to the SEF, and allowed by the CoA.
Table 1 on the rapid assessment survey lists the 10 cities out of 73 respondents with 
the highest SEF collections. The SEF receipts from these top 10 cities range from 
U.S. Dollar (USD) 39,521,991.20 to USD 72,836.01. Cities that have the highest 
SEF collections are also in the first and special income classes. The relatively high 
assessed values for real property in these areas is a result of the high proportion of 
commercial and industrial properties that contribute to the significant SEF collection 
in these cities. It is also notable that most of these 10 cities are on the island of 
Luzon, and the top four are in the National Capital Region.
Table 1. Cities with Highest SEF Collections
CITY AMOUNT ISLAND 
GROUP CITY TYPE INCOME CLASS
1 Quezon City 1,940,994,190.43 Luzon HUC Special class
2 Pasay 1,006,875,035.29 Luzon HUC 1st class
3 Paranaque 694,415,992.79 Luzon HUC 1st class
4 Valenzuela 651,836,810.00 Luzon HUC 1st class
5 Santa Rosa 497,495,453.76 Luzon Component 1st class
6 Iloilo 443,370,273.56 Visayas HUC 1st class
17 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
CITY AMOUNT ISLAND 
GROUP CITY TYPE INCOME CLASS
7 Batangas 412,867,655.37 Luzon Component 1st class
8 Antipolo 363,415,482.24 Luzon Component 1st class
9 Cagayan De Oro 329,756,253.18 Mindanao HUC 1st class
10 Cebu 315,340,317.65 Visayas HUC 1st class
Out of the six Ci-Cap pilot cities, only Iloilo City ranked among the cities with the 
highest SEF collection—6th out of 10, with an average SEF collection of PHP 443 
million. Iloilo City also shares similar traits with the rest of the cities in the list, 
namely, it is highly urbanized, with a large number of commercial, residential, and 
industrial properties.
With respect to the SEF utilization rate, Table 2 presents the 10 cities with the highest 
SEF utilization rate, based on their average SEF collections and expenses from 2017 
to 2019. The utilization rate was computed by dividing the total declared education 
expenses of each city by its SEF receipts. The SEF utilization was categorized by the 
League through identifying the median for the data collected, and then determining 
the ranges for low (PHP 21 million, and below), average (PHP 21 million to PHP 169 
million), and high (PHP 169 million, and above) utilization.
With regard to the six Ci-Cap pilot cities, only Roxas City ranked among the top 10 
cities with the highest SEF utilization rate, placing second on the list with an average 
SEF utilization rate of 214%.
Table 2. Cities with Highest SEF Utilization Rates
CITY UTILIZATION RATE
(IN PERCENT)
SEF COLLECTION 
STATUS ISLAND GROUP
1 Lamitan 299 Low Mindanao
2 Roxas 214 Low Visayas
3 Cebu 199 High Visayas
4 Vigan 195 Low Luzon
18 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
CITY UTILIZATION RATE
(IN PERCENT)
SEF COLLECTION 
STATUS ISLAND GROUP
5 Santiago 193 Low Luzon
6 Bais 187 Low Visayas
7 Dipolog 147 Low Mindanao
8 Tayabas 134 Low Luzon
9 Ozamiz 133 Low Mindanao
10 Antipolo 133 High Luzon
SEF Utilization Rate vis-a-vis the SEF per Capita of Ci-Cap Cities
In general, Ci-Cap cities have above-average utilization rates when compared to the 
Department of Finance-Bureau of Local Government (DOF-BLGF) data. Based on 
the 2018 data collected by the BLGF, the national average for cities’ SEF utilization 
rate is 60.5%. Out of the six Ci-Cap cities, only Bacolod City registered the lowest 
utilization rate at 48.50%, which is even below the national average. Table 3 shows 
the breakdown of the Ci-Cap cities’ utilization rates. In addition to Roxas City, 
Legazpi and Iriga also registered SEF utilization rates of more than 100%.
Table 3. Ci-Cap Cities SEF Utilization Rates
CITY SEF 
AVERAGE
SEF 
CLASSIFICATION
UTILIZATION
RATE
Bacolod 279,124,945.41 High 48.50%
Escalante 35,253,169.75 Average 76.74%
Roxas 13,000,720.81 Low 242.37%
Iloilo 443,370,273.56 High 84.75%
Legazpi 54,565,926.67 Average 107.02%
Iriga 9,915,000.00 Low 98.20%
19 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
Table 4 details the SEF per capita3
 for each Ci-Cap city. The League stresses SEF 
per capita as an indicator because it shows the dynamic between SEF collections 
and the number of learners that a city needs to serve. Looking at SEF collections in 
isolation does not capture the full extent of the demand for education financing that 
confronts a city. 
Table 4. Ci-Cap Cities SEF per Capita
CITY
NUMBER OF 
LEARNERS 
(SY 2020–2021)
AVERAGE SEF 
COLLECTIONS 
(2017–2019)
SEF PER CAPITA 
Bacolod 109,867 279,124,945.41 2,540.57
Escalante 22,678 35,253,169.75 1,554.51
Roxas 30,609 13,000,720.81 424.74
Iloilo 77,920 443,370,273.56 5,690.07
Legazpi 42,718 54,565,926.67 1,277.35
Iriga 24,876 9,915,000.00 398.50
Based on this calculation, despite having the lowest utilization rate, Bacolod City, 
is among the top cities with regard to its high spending on learners (PHP 2,540.57 
per capita). Iloilo City ranks first and Escalante ranks third. In contrast, despite 
registering the highest SEF utilization rate, Roxas City has less to spend per learner 
(PHP 424 per capita). Taking this information into account is crucial for lobbying for 
greater funding for the SEF. Cities with a high utilization rate but less SEF per capita 
should be prioritized in getting a government subsidy.
National and Regional DepEd Realigned Budget Allocation 2020
In view of the changes brought about by the Covid-19 pandemic, DepEd realigned 
its existing budget allocation to be transferred funds to the regional DepEd offices to 
support the BE-LCP. Based on the data shared by DepEd during the August 13, 2020 
3 These data were computed by using cities’ average SEF collections from 2017 to 2019, and dividing that by the actual 
number of enrolled primary and secondary learners.
20 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
dialogue, Regions 5 and 6, where the Ci-Cap cities are located, had the 6th and 5th 
spots in the DepEd budget reallocation as of 7 August 2020. Nationally, the top 3 
regions that received the largest allocation from the Central Office were Regions 4A, 
3, and the National Capital Region (NCR), where the largest population in the country 
resides. Coincidentally, based on the rapid assessment survey conducted by the 
LCP in July 2020, and displayed above in Table 1, the cities in these regions had the 
highest SEF collections.
Table 5. Regional ranking of allocations from the Department of Education
REGION AMOUNT ALLOCATION RANK
I 480,561,000.00 5.37% 10
II 386,084,000.00 4.31% 14
III 849,211,000.00 9.48% 2
IV-A 1,036,139,000.00 11.57% 1
IV-B 392,469,000.00 4.38% 13
V 668,430,000.00 7.47% 6
VI 698,351,000.00 7.80% 5
VII 700,399,000.00 7.82% 4
VIII 516,750,000.00 5.77% 7
IX 439,857,000.00 4.91% 12
X 484,928,000.00 5.42% 9
XI 496,811,000.00 5.55% 8
XII 477,957,000.00 5.34% 11
XIII 357,871,000.00 4.00% 15
CAR 253,102,000.00 2.83% 16
NCR 715,122,000.00 7.99% 3
21 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
A regional dialogue was held on September 8, 2020, in which the DepEd Region 5 
Director, and DepEd Region 6 Director, shared 
information on BE-LCP’s implementation in their respective regions. These national 
allocations that were funneled through DepEd’s regional offices, increased the SEF 
per capita by PHP 307 in Bacolod City, and by PHP 505.02 in Escalante City. The 
regional allocation also made Iriga City’s learners better-off than their Roxas City 
counterparts. Still, Roxas City and Iriga City are excellent candidates for the gap 
fund/equity fund, given the high SEF utilization rate in Roxas City, and the specific 
program for early grade learners in Iriga City.
Table 5. Regional ranking of allocations from the Department of Education
CITY
REGIONAL 
OFFICES 
TRANSFERRED 
FUNDS
CI-CAP CITIES 
SEF COLLECTION 
(FROM 
SEF SURVEY)
SEF PER 
CAPITA, 
WITHOUT 
A SUBSIDY
SEF 
PER 
CAPITA
DIFFERENCE
Bacolod 33,800,188.40 279,124,945.41 2,540.57 2,848.22 307.65
Escalante 11,452,956.40 35,253,169.75 1,554.51 2,059.53 505.02
Roxas 10,405,429.90 13,000,720.81 424.74 764.68 339.94
Iloilo 24,581,955.20 443,370,273.56 5,690.07 6,005.55 315.48
Legazpi 18,315,794.00 54,565,926.67 1,277.35 1,706.11 428.76
Iriga 10,468,717.00 9,915,000.00 398.50 819.41 420.91
Priority SEF Expenses of Ci-Cap Pilot Cities in General (Pre-pandemic)
The following is a list of expenses that survey respondents indicated that the 
Commission on Audit (CoA) allowed their city to claim from the SEF:
1. Maintenance and other operating expenses (MOOE)
• Nutrition/feeding program
• Transportation needs
• Payment of utility fees
• Computer software and 
hardware
• Purchase of books and 
periodicals
• Sports development
• Educational research
22 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
2. Capital Outlay
• Repair and maintenance of school-related equipment and facilities
• Construction of school buildings and facilities
• Acquisition and registration of the land titles for school sites
• Acquisition of facilities and equipment
3. Personal Services
• Salaries/allowances for teachers
• Salaries of non-teaching personnel
• Benefits of non-teaching personnel
• Creation of contractual positions
4. Based on analysis of the SEF expenses of the six Ci-Cap pilot sites, it is 
evident that Ci-Cap cities spend most of their budget on capital outlay (53%). 
Maintenance and other operating expenses (MOOE) is a close second (46%). 
This finding is consistent with the general trend across Philippine cities that 
indicates that MOOE is one of the major items financed by the SEF.
Further scrutiny of the 
survey responses from the 
six Ci-Cap cities shows 
that half of the six pilot 
cities spent their SEF on 
capital outlay. In contrast, 
the other three cities spent 
most of their budget on 
MOOE. Table 7 shows 
a breakdown of the SEF 
expenses from each of the 
six pilot cities.
Figure 6. MOOE Expenses of Ci-Cap Cities
23 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
Table 7. Ci-Cap Cities’ SEF Priority Expense Categories
CITY MOOE ALLOCATION CAPITAL OUTLAY 
ALLOCATION
PERSONNEL 
SERVICES 
ALLOCATION
Bacolod 96,582,994.23 38,788,557.47 0.00
Escalante 10,494,114.45 16,559,564.44 0.00
Roxas 12,128,500.00 15,250,000.00 4,131,000.00
Iloilo 136,286,000.00 235,350,000.00 4,122,921.50
Legazpi 30,347,690.00 28,051,200.00 0.00
Iriga 7,116,981.88 2,619,458.04 0.00
Iloilo, Escalante, and Roxas (all of which, interestingly, are Region 6 cities) spend 
their SEF mainly on capital outlay. With its significantly higher SEF collection, Iloilo 
City spent more than half (53%) of its funds on capital outlay. However, Escalante 
City spends about 17% more on capital outlay than on MOOE, and Roxas City 
spends 50% more on capital outlay than on MOOE.
When capital outlay is 
examined, construction of 
school buildings is the top 
budget priority for the Ci-Cap 
pilot cities. This is consistent 
with the responses of most 
of the Philippine cities that 
participated in the survey.
It is noteworthy that the cities 
of Iloilo and Legazpi used their 
SEF budget for land titling. In 
contrast, Bacolod, Legazpi, 
and Iriga followed the general 
trend in spending most of their 
budget on MOOE.
Figure 7. Priority Capital Outlay Expenses
24 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
Data from four of the six pilot cities (Bacolod, Escalante, Legazpi, and Iriga) showed 
that these cities did not regularly spend SEF funds on personnel services. This 
corresponds with the overall observation the personnel services is a low SEF priority, 
in general, as only 3% of city survey respondents indicated that they spend some of 
their SEF on personnel services. Notably, the SEF Utilization Guidelines also restrict 
personnel expenses.
To better understand the Ci￾Cap cities’ allocation of MOOE 
items, the research team 
reviewed specific items. The top 
MOOE expense for all six cities 
was sports development, and 
for most cities this was the only 
MOOE expense. In Iriga City, 
the whole MOOE budget was 
spent on sports development.
Other top MOOE items in 
the six pilot cities were utility 
expenses (31% for Bacolod, 
Roxas, and Iloilo), and the 
purchase of books and 
periodicals (6%). This was 
particularly true in the case of 
Bacolod, Escalante, Iloilo, and 
Legazpi.
Capacities of Ci-Cap Cities
The Ci-Cap Project focuses on increasing and strengthening the engagement of local 
stakeholders in planning and implementing sustainable basic education services, 
programs, and policies, including strategic planning, financing, and implementing 
education programs for early grade learners.
Figure 8. Priority MOOE Expenses
25 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
The Local School Board “LSB”
Under Republic Act No. 7160, otherwise known as the Local Government Code of 
1991, the local school board (LSB) was established to allocate the SEF to meet 
the supplementary needs of learners at the local level. The Code requires an eight￾person LSB that is chaired by the city mayor, co-chaired by the schools’ division 
superintendent, and comprises the following members: the chair of the education 
committee of the Sangguniang Panlungsod (city council), the city treasurer, a 
representative of the Sangguniang Kabataan (youth council), and the elected 
presidents of the city federation of parents-teachers associations, the teachers’ 
organizations in the city, and the non-academic personnel working for public schools 
in the city (the National Employees Union).
Table 8. Composition of the Local School Board in Ci-Cap Cities
LSB 
MEMBERSHIP BACOLOD ESCALANTE ROXAS ILOILO LEGAZPI IRIGA
Local Chief 
Executive / / / / / /
Schools’ Division 
Superintendent / / / / / /
Chair of the SP 
Committee on 
Education
/ / / / / /
City Treasurer / / / / / /
Elected 
Representative of 
the SK Federation
- - / / / -
Elected President 
of the PTA 
Federation
/ / / / / /
Elected 
Representative of 
the Teachers’
Organization
/ / / / / /
26 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
LSB 
MEMBERSHIP BACOLOD ESCALANTE ROXAS ILOILO LEGAZPI IRIGA
Elected 
Representative of 
the Non-Academic 
Personnel of 
Public Schools 
(National 
Employees 
Union–NEU)
/ / / / / /
Ex-Officio 
Members / - / / / -
Secretary EA - / /4 / /
Table 8 shows that Roxas, Iloilo, and Legazpi cities were able to fill all the eight 
mandated positions. In contrast, the cities of Bacolod, Escalante, and Iriga did not 
have a representative from the SK Federation (youth council). To provide different 
perspectives in the decision-making process, some cities added ex-officio members 
from the city budget office (Roxas and Iloilo), city planning and development office 
(Iloilo), engineering office (Iloilo), and Schools’ Division Legal Office (Bacolod).
Data collection was notably easier for cities with an LSB secretary or secretariat. 
Roxas, Iriga, and Legazpi had appointed LSB secretaries, while Iloilo City created a 
secretariat solely for the LSB. In Bacolod City, the LCE has a designated executive 
assistant for education who attends to education-related concerns.
Support for DepEd’s Basic Education–Learning Continuity Plan (BE-LCP)
As learning must continue despite the pandemic, the Local Government Units and 
local stakeholders have been assessing their capacity to implement the blended 
learning modalities recommended by DepEd. Although the health and safety of the 
public are the utmost priority, the LGUs acknowledge their constitutional mandate to 
uphold the right of all citizens to quality education at all times. The LGUs can assist 
in implementing the DepEd BE-LCP in several areas. These include mobilization 
of parents and the community, expansion of Internet connectivity, reproduction and 
4 with LSB Secretariat
27 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
distribution of learning materials, and establishment of learning spaces. With limited 
resources available, the LSB must strategically allocate its resources to sustain the 
requirements of the BE-LCP.
Based on the deep-dive sessions with the six cities, this study found that all of 
these pilot sites plan to significantly invest in reproducing the modules. Careful 
scrutiny of the critical resource map and the contextualized BE-LCP shows that only 
about 37% of the modules required for the early grade learners were delivered by 
September 2020. The critical resource mapping for education investment menu was 
recommended by Dr. TAF’s strategic adviser. It can provide the LGUs 
a menu of education investments that presents critical needs, available resources 
from DepEd, and potential resource need for more sustainable, aligned and demand￾driven SEF appropriations.
Due to the limitations caused by the pandemic, face-to-face learning has been highly 
discouraged. However, some cities such as Bacolod City plan to provide a mobile 
learning hub to reach learners who live in remote areas, or have difficulty accessing 
other learning modes.
For example, Iriga City’s Northern District is a geographically isolated and 
disadvantaged area. To aid in distributing learning materials in this area, the city 
government was able to mobilize volunteers, including barangay officials and para￾teachers.
Table 9. Community Mobilization in Iriga City
SCHOOLS
DISTRIBUTION OF MODULES VIA DROP-OFF/PICK-UP POINTS (NO.)
TEACHERS BRGY. 
OFFICIALS
PARA￾TEACHERS VOLUNTEERS TOTAL
Iriga North Central 15 6 0 0 21
Antipolo ES 5 8 0 0 13
Cawayan ES 7 4 0 0 11
Cristo Rey IS 4 8 3 0 15
Niño Jesus ES 4 0 0 0 4
28 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
SCHOOLS
DISTRIBUTION OF MODULES VIA DROP-OFF/PICK-UP POINTS (NO.)
TEACHERS BRGY. 
OFFICIALS
PARA￾TEACHERS VOLUNTEERS TOTAL
Sagrada ES 8 8 0 0 16
San Andres ES 4 8 0 0 12
San Pedro ES 7 6 0 0 13
San Rafael ES 4 2 0 0 6
San Ramon ES 4 7 0 0 11
San Vicente Norte 4 4 0 0 8
Sta. Cruz Norte ES 2 4 0 0 6
Sta. Isabel ES 2 4 0 0 6
Sta. Teresita ES 7 8 0 0 15
Tubigan ES 5 7 0 0 12
TOTAL 82 84 3 0 169
Table 9 shows that Iriga City is likely to mobilize parents and community members to 
serve as learning facilitators, especially in the areas that have chosen self-learning 
modules as their primary learning modality.
Bacolod City, on the other hand, indicated in its contextualized BE-LCP that 100% of 
its early grade learners (EGL) will utilize the radio-based instruction as their learning 
modality. Considering that EGLs can learn better if they have auditory instructions 
along with their worksheets, investing in this kind of resource will be beneficial to 
them and cost-effective for the city in the long run. Other cities also see the benefit of 
radio-based instruction and TV-based instruction. The cities of Roxas and Escalante 
have plans to establish their own radio stations.
29 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
Varying Investments for Early Grade Learners
With respect to Ci-Cap cities’ investments for the benefit of EGLs, this study included 
a desk review to identify the cities’ corresponding education policies and programs. 
Notably, there is no policy that requires local government units to tag expense 
items that are specific to a certain grade level. With respect to education financing, 
cities largely base this on the traditional approach to cost-benefit analysis where 
investments are made in areas that directly benefit the largest number of learners.
Out of the six Ci-Cap cities, only Iriga City made targeted investments for EGLs.
Table 10. Iriga City’s Investments for Early Grade Learners
GOAL Ensure inclusive and equitable quality education and 
promote lifelong learning opportunities for all
OBJECTIVE To strengthen the education program and services for 
0–5 years old and K–3 levels
STRATEGY
1. Institutionalize the early grade education system
2. Implement support programs and services
3. Sustain complementary programs for teachers and 
parents
PROGRAMS/PROJECTS
1. Family and Early Child Care/ Education and 
Development Program for 0–5 years old
2. Supplemental feeding
3. Provision of learning/instruction al materials
4. Parent-Parent Effectiveness Service
5. Modular learning
6. Development and improvement of facilities
30 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
LEGISLATION
1. Appropriation ordinance for MOOE
2. Resolution institutional-izing the early grade 
education system in the City of Iriga
Table 10 shows that investment in early grade learners is one of the goals listed by 
Iriga City’s Mayor as part of her Executive and Legislative Agenda. She is personally 
committed to strengthening education programs and services for EGLs. The programs 
and projects listed above were planned and executed through a core group comprised 
of members of the LGU, City Social Welfare, and the Schools Division Office. Iriga City 
also has three ongoing projects that identify EGLs as the primary beneficiaries:
1. Family and Early Child Care;
2. Supplemental Feeding; and
3. The Parent-Parent Effectiveness Service.
Another interesting initiative is that of the City of Iloilo where despite the absence of a 
specific program or policy for early grade learners, the city established a scholarship 
program for teachers to study early childhood education at Western Visayas State 
University. While this will not benefit learners immediately, it will in the long-term by 
developing the capacity of teachers. 
31 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
The Special Education Fund
SEF Guidelines
The incidence of Covid-19 in the Philippines has posed a 
great challenge to the economy. Education is one of the 
hardest-hit sectors because the pandemic has required the 
suspension of face-to-face classes. To ensure that learning 
continues despite the pandemic, the Department of Education 
(DepEd) has responded with recalibration of its budget to 
finance implementation of the Basic Education-Learning 
Continuity Plan (BE-LCP). However, unfortunately the budget 
will not be adequate to fully cover the cost of implementing 
the BE-LCP for the whole academic year, 2020–2021.
An additional source of funding for the BE-LCP is the Special 
Education Fund (SEF) that Local Government Units (LGUs) 
have traditionally used for school-related expenses such 
as construction, maintenance, materials, and personnel 
costs. To enable the LGUs to draw on the SEF for BE￾LCP-related costs, Addendum No. 2 of Joint Circular was 
drafted. This expands the allowable SEF expenditures to 
include personal protective equipment, thermometers and 
other medical devices for testing whether students, teachers 
and other personnel have the virus; Internet connectivity; 
printing of learning modules; honoraria for teachers; and 
virus-prevention training for both teaching and non-teaching 
personnel.
03INITIAL 
RECOMMENDATIONS
32 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
When Addendum No. 2 of the Joint Circular is approved and signed by DepEd, DILG 
and DBM. it will greatly benefit K–3 learners. Research shows that these learners 
comprehend and acquire knowledge through play, repetition, and patterns—all 
of which depend on the learning materials used. In order to learn their lessons 
effectively, K–3 learners need a combination of face-to-face learning and tailored 
learning materials. With the cessation of classroom teaching, to enable students to 
interact with their teachers, online platforms must be implemented. Modular learning 
materials are also needed for students’ use at home, and these require guidance 
from trained para-teachers.
So that they can guide early grade learners effectively, the para-teachers must be 
trained on the content as well as the delivery of instruction. A Facilitator’s Guide 
must also be developed for para-teachers. Support is needed too for the parents 
of K–3 students as, unlike older students who can learn independently, younger 
students usually require help and encouragement in using learning modules. 
The draft Addendum No. 2 specifically provides for the “Payment of costs and 
expenses in connection with the acquisition, production, reproduction, and printing of 
learning materials for the learners such as, self-learning modules, textbooks, activity 
sheets, and study guides.” 5
 This provision addresses the need for additional funding 
to prepare and reproduce textbooks, study guides, and other learning materials, 
which are vital for K–3 students’ effective learning. 
As the school year for 2020–2021 will largely comprise modular, online learning, and 
TV/Radio- based instruction, Addendum No. 2 provides for instructional equipment 
such as digital storage devices, and computers, tablets, or smartphones—all of 
which are vital for the effective implementation of the BE-LCP. The addendum also 
allows for communications expenses—calls, texts, and Internet data; and payment 
of subscription fees for videoconferencing, and other remote communication tools/
applications or platforms.
Another vital inclusion in Addendum No. 2 is the transportation allowance for 
delivering modules and other learning materials to all learners, and especially to 
early grade learners.
The League also recognizes the need for additional learning spaces to accommodate 
all students, while at the same practicing effective social distancing. However, the 
establishment of community learning hubs or other designated learning spaces was 
5 Sec. 2.1.1, Addendum No.2 to Revised SEF Guidelines (JC No.1, s.2017)
33 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
not included in the addendum for expanding uses of the Special Education Fund. 
Based on this study’s dialogues with various government agencies, the costs of 
establishing these learning spaces should be shared between the Local Government 
Unit and the Department of Education. Also dialogue participants agreed that the 
learning hubs or spaces established for K–3 learners must use existing facilities 
such as barangay halls and other multi-purpose facilities. They also recognized that 
establishing these new learning facilities will be a challenge in communities that are 
categorized as Geographically Isolated and Disadvantaged Areas.
Amendment of the Local Government Code for Sustainable Education 
Financing
The League of Cities supports the following amendments to the Local Government 
Code to achieve more sustainable education financing:
1. Sec. 100 that provides a bottom-up approach in allocating resources for 
education.
2. Sec. 235 that expands the collection of the SEF to include municipalities as 
this contributes to the overall goal of improving local education financing.
3. Sections 98 and 99 that expands the functions and membership of the Local 
School Board.
4. Sec. 272 that specifies the priority expenditures of the SEF and the future￾oriented provisions on use of the SEF as collateral for a loan for education￾related capital extensive expenses such as school or learning facilities.
These proposed policies should improve education financing for K-3 learners. For 
instance, the League deems that expansion of the local school board’s membership 
and functions, and the comprehensiveness of SEF utilization, as formulated in SB 
1579, reinforces the autonomy of Local Government Units and school boards in 
setting educational priorities and establishing locally-relevant programs. Giving the 
school board greater financial capacity to carry out the expanded functions discussed 
above should contribute to prioritizing of the requirements of early grade learners.
The League’s strategic engagement and that of its partners (The Asia Foundation 
and USAID) should provide the much-needed pressure to get cities to prioritize 
investments for early grade learners. A key provision in SBN 1579 supports 
formulating policies and programs based on empirical results, and focused on 
improving the quality of major education outcomes.
34 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
Regarding the unnumbered substitute House Bill, the League supported other 
provisions that expand the authority of local school boards in financing options for 
local education. The use of the SEF as collateral for financial institution loans could 
augment fundraising for large-scale projects such as the construction of facilities 
for which the SEF might not otherwise be sufficient. This is important in relation to 
insights about the substantial allocations of several pilot cities (Escalante, Roxas 
and Iloilo) for capital expenditures, and particularly in paying for the construction of 
buildings and land titling costs. The use of the SEF as collateral may provide more 
opportunities for cities to be creative in strategically investing in long-term capital 
outlays for items that will benefit several generations of learners.
The amendments that are expected to have the most substantial impact on 
financing for K–3 learners relate to the listing of priority budget items. The League 
supported both bills’ inclusion of a list of priority items for the SEF in the Local 
Government Code that has been expanded and elaborated to cover a wider range 
of expenses This revision will help cities and their school boards in implementing 
and prioritizing education budget items. The emphasis on allocating the SEF for 
the operation and maintenance of schools, and the payment of salaries and other 
benefits for teaching and non-teaching personnel, should open opportunities for the 
strategic allocation of expenses related to K–3 learners such as para-teachers and 
learning aides.
In the amendments to Section 272 of the Local Government Code, both the House 
and Senate versions put a high premium on the use of the SEF for paying the 
salaries of locally-hired teachers and other teaching personnel, and the construction 
of school buildings. Allowing cities to hire local teachers responds to cities’ long￾standing request to be able to compensate locally-hired teachers at rates that are 
comparable to nationally-hired teachers, provided that the selection and promotion 
process is in accordance with the DepEd guidelines. Allowing Local Government 
Units to hire locally-sourced teachers realizes the objective of the SEF—that 
of allowing LGUs to augment resources in areas of identified shortage. If these 
provisions become law, they will result in major changes in the SEF’s spending on 
personnel, which would benefit K–3 learners in the long-run, given the need for 
more teachers to support both face-to-face and distance learning.
35 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
Local Education Financing
There are three key findings from the available data vis-a-vis the identification of 
resources for cities’ response to EGL needs:
1. capitalizing on the cities’ affinity for sports development;
2. identifying learning spaces as a likely K–3 investment; and
3. ensuring strategic advocacy for K–3 expenses.
Capitalizing on Sports Development
A study by the Philippine Institute of Development Studies in 2011 demonstrated 
that a substantial portion of Local Government Units’ SEF budgets (approximately 
20–50%), is used for sports and other co-curricular activities and programs of DepEd. 
Given the restriction on mass gatherings, apprehension about face-to-face classes, 
and the growing number of cases, it seems unlikely that these activities and events 
will occur during the upcoming school year. Data show that given cities’ propensity 
to allocate funds for sports development, there is some room for SEF funds to be 
re-allocated to finance expenses for primary education. Funds previously allocated 
to Palarong Pambansa and other sports-related development projects and programs 
can be strategically reallocated for teacher training and learning materials of K–3 
learners.
However, further study is required to understand cities’ prioritization of sports 
development in utilizing the SEF. Understanding Ci-Cap cities’ rationale in 
determining their priorities will help ongoing efforts to promote key investments in 
K–3 programs. In addition, timing is extremely crucial as cities realign their current 
SEF and begin to plan for the upcoming year’s budget.
Potential to Invest in Learning Spaces
As Ci-Cap cities tend to allocate a large proportion of their SEF budget for capital 
outlay items, and particularly the construction of school buildings, there is potential to 
advocate spending on alternative learning spaces. Cities that have invested in land 
titling, such as Legazpi and Iloilo, might be more open to establishing new learning 
spaces in their localities. The approach should be different, however, for cities that 
have not identified land titling as a priority expense item. Instead of advocating 
for the establishment of new learning spaces, these cities could be encouraged to 
repair or refurbish existing facilities and transform them into spaces that cater to the 
requirements of K–3 learners.
36 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
Strategic Advocacy for K to 3 Expenses
Data in this study show that there is a need for strategic advocacy to convince 
local leaders to invest in early grade learners and drive focused interventions that 
provide innovative system-wide solutions. Local school boards are key to this since 
they make decisions that suit their local needs.
Capacities
The role of the local school board is indeed vital as its multi-sectoral composition 
promotes engagement of the community and the private sector in addressing 
the specific needs of learners. Thus, broadening board’s membership and 
strengthening its capacity through learning exchanges should enable the board to 
finance and implement local education policies, programs, projects, and activities 
efficiently and effectively.
As of September 2020, the team responsible for this study was still completing the 
critical resource mapping of the Ci-Cap cities. Once completed, this mapping will 
show how the Ci-Cap cities are investing the Basic Education–Learning Continuity 
Plan (BE-LCP) expenses provided by DepEd. In most cases, the data were 
sourced from the Accounting and Budget Office of the respective school division 
office, along with minor inputs from the city. The analysis of these data will help 
the team design the project’s learning exchange activity by getting inputs from the 
Ci-Cap cities about topics that will help them with their interventions to improve 
SEF allocation and innovations in local education financing and policy-making, and 
specifically with regard to early grade learners.
Given cities’ initial submissions of information on critical resource mapping, it is 
evident that learning exchanges on the strategic allocation of limited resources, 
and the mobilization of additional resources will benefit local school board 
members. 
37 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
The Covid-19 pandemic has encouraged a shift in focus for 
strategic investments for K–3 learners in the context of the 
Basic Education-Learning Continuity Plan (BE-LCP). K–3 
learners need the combined interventions of teachers and 
parents. Hence, it is important that the proposed Addendum No. 
2 to the SEF Guidelines is implemented before the start of the 
school year in October 2020 to satisfy the significant need for 
more para-teachers; orientations for learning aids and parents; 
as well as inclusion of allowances for teachers and para￾teachers. The proposed Addendum No. 2 will enable cities, and 
particularly those with low SEF utilization, to allocate their funds 
to programs and expenditures with certain flexibility so that 
they can provide the most needed materials and modalities for 
their locality. An example of this is Iriga City, which has low SEF 
collections due to its geographical location and the agricultural 
land that predominates in the area. With this addendum, cities 
such as Iriga should be able to be more precise about where to 
allocate their limited funds.
Ideally, the proposed Addendum No. 2 will help address 
the gaps in JC 2017. However, based on consultations with 
stakeholders, it appears that major points of divergence still 
exist that include:
1. Limitations that prevent LGUs from hiring additional 
local teachers; and
2. Barriers to establishing community learning hubs and 
designated learning spaces.
04MOVING FORWARD
38 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
These items need to be resolved by the oversight agencies so that all will sign 
the new circular. The League recognizes that local chief executives want to hire 
additional teachers, especially to meet the demands of blended learning and greater 
numbers of enrollees, so the new JMC must be issued as soon as possible. To 
facilitate consensus among the three oversight agencies, DepEd, DILG and DBM, the 
more logical option is to explore the legislative route. Both bills in the Senate and the 
House of Representatives include provisions that would allow the Local Government 
Units to hire local teachers.
Considering the impact on early grade learners and the project timeline, the Ci-Cap 
Project Team should consider identifying short-term, medium-term, and long-term 
strategies in order to continue financing the resource requirements for early grade 
learners during, as well as after the end of the pandemic. With regard to short-term 
strategies, Ci-Cap cities can maximize the Bayanihan Recover As One Act provision 
that allows the use of the SEF to finance Covid-19 necessary expenses such as the 
requirements for blended learning as described in DepEd’s Basic Education Learning 
Continuity Plan (BE-LCP). This is a limited and time-sensitive window because it is 
only in effect until December 2020.
Another financing opportunity that cities could access is the equity fund proposed by 
DepEd to support the LGUs that have an SEF that is insufficient for their learners’ 
needs. The Ci-Cap Project team has a critical role to play in mapping the resources 
available in the pilot cities to justify the need for additional support from the DepEd 
equity fund. This should apply even to cities such as Roxas, Bacolod, and Iloilo that 
have high SEF collections, but also a large population of learners.
In the medium-term, the Cicap Project team can lobby for the adoption of the revised 
Joint Circular or Addendum No. 2. The Joint Circular is a more sustainable option 
than the provisions of the Bayanihan 2 Act since the circular institutionalizes the 
use of the SEF for a wider range of expenses. Based on the Senate hearing with 
Dep Ed on September 16, 2020 regarding preparations for the October 5, 2020 
school opening, the representatives of DepEd and the Department of the Interior and 
Local Government committed to issuing the new Joint Circular before schools re￾opened. The League can continue its coordination with the three oversight agencies 
and advocate for issuing the new Joint Circular in time for the opening of classes 
on October 5. Thus, there is shared optimism that the new SEF guidelines will be 
released soon.
In terms of long-term strategies beyond January 2021, the League should continue 
to advocate for institutionalization of a negative list for the SEF. This would allow 
39 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
cities substantial flexibility in deciding on the use of the SEF even after the end 
of the pandemic. The negative list would provide cities with more opportunities to 
maximize their SEF, and minimize the rejection of expenses by the Commission on 
Audit. Due to varying interpretations of the SEF guidelines, and the varying needs of 
local schools, the League should engage in ongoing dialogue with the Commission 
on Audit to inform the Local Government Units of the budgetary prohibitions, proper 
utilization of funds, and effective financing of education programs.
A more comprehensive and long-term solution is needed to ensure that the SEF is 
truly responsive to the diverse contexts and needs of cities and learners. To this end, 
it is worth considering the massive potential of SBN 1579 in elevating the role of local 
school boards as game-changers in local education. The proposed amendments 
should improve the potential of local school boards to radically boost the delivery 
of basic education services that enhance educational outcomes for learners, and 
especially for those in primary grades. This would greatly impact the empowerment 
of the LSB in planning and financing education at the local level.
The learning environment under the “new normal” of Covid-19 will change 
significantly. The landscape of child protection and child rights will not only apply 
to the physical school, but also to the cyber school, and school at home. The way 
children learn and play will also change. Cities have a critical role in making sound 
and sustainable investments to facilitate the transition to these new modalities and 
ensure that the needs of K–3 learners are acknowledged and addressed, given the 
cities’ existing realities. The cities’ perspective on education financing should also 
change and adapt to the realities of this new learning environment.
40 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
ANNEXES
41 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
ANNEX A - 
LCP CI-CAP SEF SURVEY FOR MEMBER CITIES
The League of Cities of the Philippines partnered with The Asia Foundation to strengthen 
cities' commitment to plan, mobilize, and manage resources in support of improved 
learning outcomes of children at the primary level. Relatedly, this survey seeks to analyze 
the allocation of the Special Education Fund (SEF) by cities. The collected responses will 
be used to interpret the gaps and opportunities in the existing SEF utilization towards 
advocating for national policies to liberalize the use of the SEF. 
(Please note that all responses will be kept confidential. Thank you for participating in our 
survey.) 
NAME OF Cl1Y: 
SEF AMOUNT FOR 2017 
SEF AMOUNT FOR 2018 
SEF AMOUNT FOR 2019 
1. How will you rate education among the priority issues of your city? 
1 2 D3 4 5 
2. Do you have external partnerships with organizations that support education 
expenses of the city? 
□ YES 
□ NO 
3. Do you allocate your SEF for the programs, projects, and activities of your local 
school boards (LSBs)? 
□ YES 
□ NO 
4. What amounts of your SEF are allocated for the following general budget items? 
Budget for 2018 Budget for 2019 
Maintenance and Other 
Operating Expenses 
(MOOE) 
Capital Outlay 
Personnel Services 
5. Please indicate the amount that you allocate for specific Personnel Services line 
item 
BUDGET ITEM Budget for 2018 Budget for 2019 
1 Salaries/ allowances of 
teachers 
2 Salaries of 
non-teaching 
personnel ( e.g. utility 
workers and security 
guards) 
3 Benefits of 
non-teaching 
personnel 
4 Creation of contractual 
positions 
5 Others (please specify) 
42 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
6. Please indicate the amount that you allocate for specific MOOE line item 
BUDGET ITEM Budget for 2018 Budget for 2019 
1 Nutrition/ feeding programs 
(e.g. free lunch in elementary 
and secondary schools) 
2 Transportation needs (e.g. 
fuel for school vehicles, 
transportation allowances for 
teachers and students, 
procurement of motor banca 
or other forms of service 
vehicles for school use) 
3 Payment of utility fees 
(e.g. electric and water bills) 
4 Computer software and 
hardware and other related 
equipment/ facilities 
5 Purchase of books and 
periodicals 
6 Sports development ( e.g. 
Palaro Meets, local sports 
festivals) 
7 Educational research 
8 ECCD Program 
9 Others (please specify): 
43 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
7. Please indicate the amount that you allocate for specific Capital Outlay line item 
BUDGET ITEM Budget for 2018 Budget for 2019 
1 Repair and maintenance of 
school-related equipment and 
facilities 
2 Construction of school buildings 
and facilities 
3 Acquisition and titling of school 
sites 
4 Acquisition of facilities and 
equipment (e.g. laboratory, 
technical apparatus, and 
information technology 
equipment) 
5 Others (please specify): 
44 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
8. What are your city's challenges in utilizing the SEF? 
• Guidelines for use of SEF are too restrictive 
• Some expenses cannot be funded by SEF 
• Limited SEF budget 
• Confusion in implementation of guidelines 
• LGUs are not given enough leeway to use SEF according to needs 
• Challenges in coordination with DEPED 
• Others: 
45 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
9. Will you support a policy that includes a negative list (e.g. list of disallowed 
items)? 
□ YES □ NO 
10. What are your recommendations or suggestions for improving the use of theSEF? 
D Issuance of new policy with liberal guidelines for use of SEF 
D New law governing SEF 
D Closer coordination of DEPED and LGUs re financing education 
□ Others: --------
OFFICIAL 
 RELEASE 
46 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
ANNEX B - 
CURRENT SEF UTILIZATION GUIDELINES
TO 
DEPARTMENT OF EDUCATION (DEPED) 
DEPARTMENT OF BUDGET AND MANAGEMENT (DBM) 
DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT (DILG) 
Joint Circular (JC) No. 1,s. 2017 
ALL PROVINCIAL GOVERNORS, CITY AND MUNICIPAL 
MAYORS, SCHOOLS DIVISION SUPERINTENDENTS (SOS), 
PUBLIC SCHOOL DISTRICT SUPERVISORS (PSDS) AND 
SCHOOL HEADS, MEMBERS OF THE LOCAL SCHOOL 
BOARDS (LSB), AND OTHER NATIONAL AND LOCAL 
GOVERNMENT OFFICIALS CONCERNED 
SUBJECT REVISED GUIDELINES ON THE USE OF THE SPECIAL 
EDUCATION FUND (SEF) 
1.0 Background 
Under Republic Act (RA) No. 7160 (Local Government Code [LGC] of 1991), 
a province or city, or a municipality within the Metropolitan Manila Area, may 
levy and collect an annual tax of one percent (1 %) on the assessed value of 
real property in addition to the basic real property tax. The additional 1 % tax 
on real property collected in the province is shared equally by the province 
and the municipality within its territorial jurisdiction. On the other hand, cities 
keep all of their collection . The proceeds from this special levy accrue to the 
SEF and are automatically released to the LSBs. 
' 
The SEF provides the source of funds for the supplementary annual 
budgetary needs for the operation and maintenance of public schools within 
the province, city, or municipality through an annual SEF Budget. The 
formulation, approval, and utilization of the SEF Budget are the responsibility 
of the individual LSB in each province, city or municipality. 
Previous circulars jointly issued by the DepEd, DBM, and DILG provide the 
general guidelines on the use of the SEF in implementation of RA No. 7160. 
Given the observed practices in the utilization of the SEF and current 
developments in the basic education sub-sector, particularly the K to 12 and 
early childhood care and development (ECCD) programs, there is a need to 
1
2
3
4
5
6
47 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
reiterate and refocus the policies on the use of the SEF·to better support the 
supplementary budgetary needs of.schools 1 and learning ceriters.2 
2.0 Purpose 
2.1 To update the policies and guidelines contained in previous JCs of the 
DepEd, DBM, and DILG (JC No. 1 s. 1998, JC No. 1-A s. 2000, JC No. 
1-B s. 2001 and JC No. 4 s. 2001) on the use and purpose of the SEF as 
provided under RA No. 7160 and its Implementing Rules and 
Regulations (IRR); and 
2.2 To ensure a more strategic and efficient utilization of resources for 
priority programs and projects which would complement, as well as 
reinforce, the budgeting priorities at the different levels of decision￾making. 
3.0 Legal Bases on the Use of the SEF 
3.1 Section 272 of RA No. 7160 provides that the SEF shall be allocated to 
the following: 
3.1.1 Operation and maintenance of public schools; 
3.1.2 Construction and repair of school buildings; 
3.1.3 Facilities3 and equipment; 
3.1.4 Educational research;
4 
3.1.5 Purchase of books5 and periodicals;6 and 
3.1 .6 Sports development. 
3.2 Further, Section 100 (c) of the same law provides that the annual school 
board budget shall give priority to the following: 
An educational institution, private and public undertaking educational operation with a specific age-group of 
pupi ls or students pursuing defined studies and levels, receiving instruction from teachers, usually located in 
a building or group of buildings in a particular physical or cyber site. Source: /RR for RA No. 9155 (Governance 
of Basic Education Act). 
Refers to a physical space to house learning resources and facilities of a learning program for out-of-school 
youth and adults. It is a venue for face-to-face learning activities and other learning opportunities for 
community development and improvement of the people's quality of life. This may also be referred to as 
" Community Learning Center" authorized or recognized by the DepEd. Source: /RR for RA No. 10533 
(Enhanced Basic Education Act of 2013}. 
All physical properties of a school, consisting of the grounds, buildings and the various facilities within the 
school grounds and inside the school buildings, i.e., school sites, school buildings, school furniture and 
equipment. 
A variety of research methods, which seeks to evaluate/investigate different aspects of education including, 
but not limited to, student learning, teaching methods, teacher training, and classroom dynamics and 
behavioral patterns in pupils/students, teachers, and other stakeholders in schools. 
A printed non-periodical publication of at least forty-eight (48) pages, exclusive of cover pages, published in 
the country and made available to the public. 
Published work that appears in a new edition on a regular schedule, such as, but not limited to, newspapers, 
magazines, newsletters, literary journals or learned journals, or yearbooks. 
48 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
3.3.1 Construction, repair, and maintenance of school .buildings and 
other facilities of public elementary and secondary schools; 
3.3.2 Establishment and maintenance of extension classes where 
necessary; and 
3.3.3 Sports activities at the division, district, municipal, and barangay 
levels. 
3.4 Section 7 (b) of RA No. 10410, otherwise known as the "Early Years Act 
of 2013", provides that LGUs shall include allocations from their SEF for 
the ECCD Program. 
4.0 Allowable Expenses Chargeable Against the SEF 
4.1 In all instances, the allocation for the following expenditure items 
chargeable against the SEF shall be net of the budgetary provision 
for the same or related item(s) in the budget for the DepEd and the 
ECCD Council , and that which may be funded out of the Special 
Purpose Funds : 
4.1.1 Operation and maintenance of public schools: 
4.1 .1.1 Payment of compensation/allowances of teachers locally￾hired in elementary and secondary schools identified to 
have shortages per the teacher deployment analysis of 
DepEd; the rates of compensation/allowances shall be 
determined by the LSB based on funds available, but not 
to exceed the salary schedule being implemented by the 
local government unit (LGU) concerned: Provided, that 
for the purpose of hiring teachers chargeable against the 
SEF, the LSB in each province, city or municipality shall 
utilize the list found in the Registry of Qualified Applicants 
(RQA)7; 
4.1.1.2 Payment of salaries/wages of utility workers and security 
guards hired in public elementary and secondary schools 
which have not been provided such position in the DepEd 
budget; and 
4.1.1.3 Payment of expenses pertaining to the operation of 
schools, which may include utilities and communication 
expenses. 
7 Official list of applicants who obtained an overall score of seventy (70) points and above based on the 
criteria set and as a result of the evaluation and selection processes of the DepEd 
49 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
4.1.2 Construction and repair of school buildings: 
4.1.2.1 Construction, repair and maintenance of school buildings 
and other facil ities for public elementary and secondary 
schools, which are deemed to have shortage of 
classrooms or of other facilities, as the case may be, per 
DepEd classroom deployment analysis, subject to 
existing standards/specifications set by DepEd and/or 
Department of Public Works and Highways; furthermore, 
this item shall be given priority in the SEF Budget; and 
4.1.2.2 Acquisition and titling of school sites. 
4.1.3 Facilities and equipment: 
4.1.3.1 Acquisition of laboratory, technical and similar apparatus, 
and information technology equipment and corollary 
supporting services (e.g. internet connection , 
maintenance, etc.), subject to the prevailing requirements 
and specifications set by the DepEd. 
4.1.4 Educational research: 
4.1.4.1 Educational research other than the research subject 
areas funded in the DepEd budget, subject to the 
prevailing policies and guidelines of the DepEd. 
4.1.5 Purchase of books and periodicals: 
4.1 .5.1 Purchase of library books and periodicals for the libraries 
of the different elementary and secondary schools in the 
province, city, and municipality, and purchase of 
instructional materials, workbooks and textbooks needed 
by public elementary and secondary schools, subject to 
the prevailing policies and guidelines of the DepEd. 
4.1.6 Sports development: 
4.1.6.1 Expenses for school sports activities at the national, 
regional, division, district, municipal and barangay levels, 
as well as for other DepEd related activities, subject to 
the prevailing requirements and specifications set by the 
DepEd. 
50 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
4.1 .7 Funding for the ECCD Program, particularly for the following 
purposes: 
4.1 .7.1 Direct services related to the implementation of the 
ECCD program, such as salaries/allowances of locally￾hired Child Development Teachers and/or Day Care 
Workers, etc.; 
4.1.7.2 Organization and support of parent cooperatives to 
establish community-based ECCD programs; 
4.1.7.3 Provision of counterpart funds for the continuing 
professional development of ECCD public service 
providers; 
4.1.7.4 Provision of facilities for the conduct of the ECCD 
Program; and 
4.1.7.5 Payment of expenses pertaining to the operations of 
National Child Development Centers, including, but not 
limited to, utilities (i.e. electricity and water expenses) and 
communication (i.e. telephone expenses). 
5.0 Planning and Budgeting for the SEF 
5.1 The LSB shall formulate a three-year program indicating strategic 
prioritization policies in the allocation of the SEF to schools taking into 
consideration equitable sharing, priority needs and such factors as 
enrollment ratio, distance of the schools, performance, drop-out rate, and 
location of schools, as well as the goals and objectives of the LGU's 
Comprehensive Development Plan (CDP), and the expenditures, 
programs, projects and activities in the LGU's Local Development 
Investment Program (LDIP) prior to the formulation and preparation of its 
Annual Budget for the incoming year. It is understood that the DepEd 
representative to the LSB shall be responsible for coordinating 
municipal/city school plans with that of the province and ensuring that the 
School Improvement Plan (SIP) and the Division Education Development 
Plan (DEDP) are formulated collaboratively with the stakeholders in the 
community. 
5.2 The LSB in each province, city, or municipality shall be responsible for 
the preparation and approval of the annual budgetary requirements of 
the public schools based on the DepEd-approved SIP and DEDP in the 
implementation of ECCD Program, kindergarten , elementary and 
secondary, formal and non-formal education programs, chargeable to 
their respective SEFs. 
51 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
5.2.1 All expenditure items to be included in the SEF Budget shall be 
among those provided under Section 4.0 hereof and contained in 
the approved SIP and DEDP. 
5.2.2 The SEF Budget shall be presented by program, activity and 
project (P/A/P), by allotment class and per school using SEF 
Budget Preparation Form No. 1 (Annex A). 
5.2.3 The provincial SEF Budget shall, as much as possible, fill the 
funding gap in the needs of all the public schools covered by the 
province. 
5.2.4 The corollary budget allocation shall be complementary to the 
budget of the national programs. 
5.3 The LSB shall consider the following in the preparation of the SEF 
Budget: 
5.3.1 Recommendation of the DepEd PSDS and SDS as well as the 
priorities indicated in the SIPs and DEDPs vis-a-vis the information 
from the DepEd Regional Office (RO) on the allocation of each 
school from the National Budget for the current year and the 
ensuing year as contained in the National Expenditure Program; 
5.3.2 The report of the school heads on the state of education at the 
start of every school year, which will provide an annual progress 
report on the SIP and cover, among others, the basic education 
performance indicators and audited financial reports of his/her 
school, including funds it received during the previous school year 
from national, local, and community-based sources, as well as the 
disposition of these funds; and 
5.3.3 The relevant expenditures, P/A/Ps of the current LDIP and Annual 
Investment Program of the LGU . 
5.4 The approval of the SEF Budget shall be through an LSB Resolution , 
signed by the Chair and Co-Chair and majority of all its members, 
pursuant to Section 100 (b) of RA No. 7160. 
5.5 The preparation and approval of the SEF Budget for the ensuing year 
shall be guided by the following schedule of activities: 
Activities 
Submit a report covering the 
period January 1 to December 31 
of the preceding year to the LSB 
and DepEd Central Office (CO) 
containing the following 
information: 
1. Amount of resources 
allocated to the individual 
schools from the annual 
appropriations of the national 
government (DepEd budget, 
allocation from the SPFs, 
and from other items); 
2. Results of analysis of 
teacher shortage or teacher : 
student ratio by school; 
3. Schedule of construction of 
classroom by school from all 
sources / funds ; and 
4. Indicators of school 
performance including 
National Achievement Test 
(NAT) results and drop-out 
rates. 
Submission to the LSB of the 
certified statement containing the 
following: 
1. actual SEF Income for the 
immediately preceding fiscal 
year; 
2. actual SEF income for the 
first two quarters of the 
current year; 
3. the estimated SEF income 
for the last two quarters of 
the current year; and 
4. the annual estimates for the 
ensuing year. 
Formulate and issue budget 
prioritization policies and tentative 
budget ceilings per 
municipality/city/province thru a 
Budget Call 
Person/s 
Responsible 
DepEd SDS 
Local Treasurer 
and Local 
Accountant 
LSB 
lndica'tive Timelines 
Not later than March 
31 of the current year 
Not later than July 15 
of the current year 
Not later than July 31 
of the current year 
52 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
. . 
Activities 
Submission by elementary and 
secondary schools of requests for 
funding for the ensuing budget 
year to the DepEd PSDS (for 
municipal school boards) or the 
SOS concerned (for city school 
boards). 
Consultation / Discussion / 
Hearing with schools concerned 
and other stakeholders; 
Consolidation of budget requests 
from all schools in the LGU (city / 
municipality) for the ensuing 
budget year. 
Review and approval of the SEF 
Budget by for the ensuing year 
through an LSB Resolution 
approved by the majority of all 
LSB members. 
Submission of the following to the 
Provincial LSB: 
1. Consolidated approved 
municipal/city SEF Budgets; 
and 
2. List of proposals not funded 
in the municipal/city SEF 
Budgets 
Review of proposals not funded in 
the approved SEF Budget of the 
City/Municipality taking into 
consideration the priorities 
contained in the DEDP. 
Approval of the Provincial SEF 
Budget by Province through an 
LSB Resolution approved by the 
majority of all LSB members. 
Person/s 
Responsible 
Heads of 
elementary 
(including 
kindergarten) and 
secondary schools 
DepEd PSDS and 
sos
Indicative Timelines 
Not later than August 
31 of the current year 
September 1 to 
September 30 of the 
current year 
Municipal/City LSB Not later than October 
31 of the current year 
(Earlier approval of 
SEF Budget for 
municipalities will allow 
Provincial LSBs to 
consider augmentation 
to municipalities in the 
review of the provincial 
SEF Budget) 
DepEd SOS
Provincial LSB 
Not later than seven (7) 
days after the approval 
of the SEF Budget 
Not later than 
November 30 of the 
current year 
53 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
Submission of approved SEF DepEd SOS Not later than 
Budgets to DepEd Central Office December 31 of the 
current year 
Activities and Documents 
Furnish the Local Budget Officer, 
the Local Accountant, and the 
Local Treasurer a copy of the SEF 
Budget as basis for disbursement 
or certification of availability of 
funds and for recording purposes 
Submit quarterly and annual 
reports using the SEF Budget 
Accountability Form No. 1 (Annex 
B) on SEF utilization, as prepared 
by the Local Accountant, to the 
DepEd CO, through appropriate 
channels, copy furnished the local 
sanggunian concerned and 
Regional Offices of the DBM and 
DILG. 
The appropriate DepEd offices 
shall prepare the consolidated 
provincial and regional reports. 
Post the utilization report of the 
SEF Budget in the website of the 
LGU and/or in at least three (3) 
conspicuous public places for 
transparency and accountability in 
compliance with the Full 
Disclosure Policy of the DILG 
Person/s 
Responsible 
LSB 
LSB 
DepEd 
representative in the 
LSB 
LSB 
Indicative Timelines 
Not later than seven 
(7) days after the 
approval of the SEF 
Budget 
For quarterly reports, 
not later than the 20th 
day after the end of 
the quarter and for 
annual reports, not 
later than the 15th 
day of February of 
the following year 
Pertinent deadline 
consistent with the 
Full Disclosure Policy 
of the DILG 
54 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
6.0 Monitoring, Transparency and Accountability in the Allocation and 
Utilization of the SEF 
6.1 To promote and enhance transparency and accountability in the 
allocation and utilization of the SEF, the parties concerned shall comply 
with the following : 
6.2 It is understood that the utilization and disbursement of the SEF shall be 
in accordance with existing budgeting, accounting, and auditing rules 
and regulations. 
Secretary 
55 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
6.3 Procurement charged to SEF shall follow the rules and procedures under 
RA No. 9184 (Government Procurement Reform Act), its IRR and 
Government Procurement Policy Board guidelines. 
7.0 Issues for Resolution 
Interpretation of the provisions in this JC, including cases not covered herein 
shall be referred to the DepEd - Central Office for final resolution by the 
DepEd, DBM and DILG. 
8.0 Separability Clause 
If, for any reason, any part or provision of this JC is declared invalid or 
unconstitutional, any part or provision not affected thereby shall remain in full 
force and effect. 
9.0 Repealing Clause 
All circulars on SEF that are not consistent with this JC are hereby repealed 
or amended accordingly. 
10.0 Effectivity 
This JC shall take effect immediately upon publication. 
Secretary 
Department of Education Department of Budget and Management 
Secretary 
Department of the Interior and Local Government 
 
January 19, 2017 
Maintenance 
Rank Program/Project/ Activity* Personal and Other Ca pital Total Services Operating Outlays 
Ex penses 
Total Expenditures for BY llX XXX XXX XXX 
Balance/Deficit XXX 
56 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
Annex A 
SEF Budget Preparation Form No. 1 
INCOME AND EXPENDITURE ESTIMATES FOR FY -- Provincial/City/Municipal School Board of 
Province/City/Municipality 
(In P000) 
Esti mated Income for Budget Year XXX 
Additional One Percent ( 1 %) Tax on Real Property .... . . ...................... XXX 
Add: Previous Years Unexpended Balances 
(including Continuing Appropriation) . ............. . ... ..... . . .. ... .. XXX 
TOTAL XXX 
Less: Continuing Appropriation XXX 
Net Amount Available for Appropriation XXX 
Proposed Ex penditures for Budget Year 
Maintenance 
Rank Program/Project/ Activity* Personal and Other Ca pital Total Services Operating Outlays 
Ex penses 
Total Expenditures for BY XXX XXX XXX XXX 
Balance/Deficit XXX 
Prepared by: 
Division Superintendent/Supervisor 
Co-Chairman, LSB 
SEF Budget Authorization Form No. 01 
57 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
SEF Budget Accountability Form No. 1 
REPORT of SEF UTILIZATION 
For the Quarter Ending _ 
Province/City/Municipality _____ _ 
Receipt from SEF p __ _ 
Less DISBURSEMENTS (broken down by expense class and 
by obj ect of expenditures) 
Personal Services 
Maintenance and Other Operating Expenses 
Capital Outlays 
Financial Expenses 
Sub-total 
Balance p 
Prepared by: 
Local Accountant 
Approved by : 
LCE, Chairman, LSB 
Annex B 
OFFICIAL RELEASED 
SIGNATURE 
 
DATE 08-28-2022 
TIME 3:40 PM 
58 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
ANNEX C - 
ADDENDUM NO. 1TO JC NO. 1 S. 2017
To 
DEPARTMENT OF EDUCATION (DepEd) 
DEPARTMENT OF BUDGET AND MANAGEMENT (DBM) 
DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT (DILG) 
Joint Circular (JC) No. 1, s. 2020 
Date: 2 7 AUG 2020 
All Provincial Governors, City and Municipal Mayors, School 
Division Superintendents, Public School District Supervisors and 
School Heads, Members of the Local School Boards, and Other 
National and Local Government Officials Concerned 
Subject ADDENDUM TO DepEd-DBM-DILG JC No. 1, s. 2017 
DATED JANUARY 19, 2017, ENTITLED, "REVISED 
GUIDELINES ON THE USE OF THE SPECIAL EDUCATION 
FUND (SEF)" 
1.0 In view of the passage of the Masustansyang Pagkain Para sa Batang Pilipino 
Act (Republic Act [RA] No. 11037), and to amplify the policies on the use of the 
SEF to better support the supplementary budgetary needs of schools and 
learning centers, the following expenses shall likewise be allowed to be charged 
against the SEF, in addition to those already authorized under 
DepEd-DBM-DILG JC No. 1, s. 2017, as may be determined and approved by 
the Local School Board (LSB): 
1.1 Funding for the implementation of the National Feeding Program for 
undernourished children in public day care, kindergarten and elementary 
schools, particularly for the following purposes: 
1.1.1 Supplemental Feeding Program for Day Care Children; 
1.1.2 School-Based Feeding Program; 
1.1.3 Milk Feeding Program; 
1.1.4 Micronutrient Supplements; 
1. 1.5 Health Examination, Vaccination, and Deworming; 
1.1.6 Gulayan sa Paaralarr, 
1.1.7 Water, Sanitation, and Hygiene (WASH); and 
1. 1.8 Integrated Nutrition Education, Behavioral Transformation, and 
Social Mobilization. 
59 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
1.2 Operations and maintenance of public schools 
1.2.1 Payment of compensation/allowances of locally-hired dentists 
and/or dental aide positions to serve in public elementary and 
secondary schools; Provided, that the rates of compensation shall 
be determined by the LSB based on funds available, but not to 
exceed the salary schedule being implemented by the local 
government unit concerned; Provided further, that the grant of 
Magna Carta benefits to said personnel shall be subject to the 
provisions of DBM-Department of Health (DOH) JC No. 1, s. 2012, 
as amended by DBM-DOH JC No. 1, s. 2016; Provided finally, that 
for the purpose of hiring dentists and/or dental aides positions 
chargeable against the SEF, the LSB in each province, city and 
municipality shall strictly comply with the existing Civil Service 
laws, rules and regulations; 
1.2.2 Payment of expenses pertaining to the operation of schools, 
which may include, but not limited to, utilities, communication 
expenses, scouting activities (jamboree, camping, hiking, outdoor 
activities, scout trainings, and instructional drills/exercises) of the 
Boy Scouts of the Philippines and the Girl Scouts of the 
Philippines, programs to promote campus journalism, 
Parents-Teachers Association activities, Student Council 
Government Activities, and other extra-curricular activities that 
promote leadership and values as may be provided under the 
corresponding DepEd issuances. Such expenses may be included 
in the Maintenance and Other Operating Expenses allocation of 
schools; 
1.2.3 Payment of dental supplies and other related expenses pertaining 
to the operation of dental facilities in public elementary and 
secondary schools; and 
1.2.4 Establishment of dental facilities and acquisition of apparatus 
and/or equipment, subject to the prevailing requirements and 
specifications set by the DepEd, in consultation with the DOH. 
2.0 Interpretation of the provisions of this JC shall be referred to the DepEd, DBM, 
and DILG for joint resolution. 
3.0 All other provisions of DepEd-DBM-DILG JC No. 1, s. 2017 that are not 
inconsistent with this JC shall remain in full force and effect. 
4.0 If, for any reason, any part or provision of this JC is declared invalid or 
unconstitutional, the other parts or provisions not affected thereby shall 
remain in full force and effect. 
60 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
5.0 This JC shall take effect after fifteen (15) days from the completion of its 
publication in the Official Gazette or in a newspaper of general circulation. 
Secretary, DepEd Secretary, DBM 
Officer-ln-Charge 
AUG 27 2020 
OFFICAL RELEASER
 
JOINT CIRCULAR NO. 2, S. 2020
DEPARTMENT OF EDUCATION (DEPED)
DEPARTMENT OF BUDGET AND MANAGEMENT (DBM)
DEPARTMENT OF INTERIOR AND LOCAL GOVERNMENT (DILG)
61 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
ANNEX D - 
ADDENDUM NO. 2 TO JC NO. 1 S. 2017
TO 
SUBJECT 
1.0 Rationale 
ALL PROVINCIAL GOVERNORS, CITY AND MUNICIPAL 
MAYORS, SCHOOLS DIVISION SUPERINTENDENTS (SDS), 
PUBLIC SCHOOL DISTRICT SUPERVISORS (PSDS) AND 
SCHOOL HEADS, MEMBERS OF THE LOCAL SCHOOL 
BOARDS (LSB), AND OTHER NATIONAL AND LOCAL 
GOVERNMENT OFFICIALS CONCERNED 
ADDENDUM NO. 2 [CLARIFICATION TO DepEd￾DBM-DILG JOINT CIRCULAR No. 1, series of 2017 
DATED JANUARY 19, 2017, ENTITLED, "REVISED 
GUIDELINES ON THE USE OF THE SPECIAL 
EDUCATION FUND (SEF)"] 
Relative to the Coronavirus Disease 2019 (COVID-19) outbreak, the Office of the 
President has issued Presidential Proclamation No. 922, s. 2020 declaring a state 
of public health emergency throughout the Philippines. In response to the public · 
health emergency, the Department of Education (DepEd) developed the Basic 
Education Learning Continuity Plan (BE-LCP) titled ''Learning Opportunities Shall 
be Available: The Basic Education Leaming Continuity Plan in the Time of COVID￾19"for ttie guidance of all DepEd offices and schools for School Year (SY) 2020-
2021. 
The BE-LCP was presented to and adopted by the IATF under its Resolution No. 
34, dated May 8, 2020. In his Address to the Nation last May 28, 2020, the 
President gave his full support to DepEd's position to continue providing safe 
learning opportunities in the time of COVID-19 through blended/distance 
learning modalities. 
The BE-LCP requires resources for its effective implementation. The most 
commonly identified needs for blended/distance learning include: production of 
self-learning instructional materials (print, non-print - audio/video/web); 
computer and other ICT equipment; smartphones; internet connectivity; 
personal protective gear or equipment; training of teachers, principals and 
parents; water and sanitation facilities; and hygiene or cleaning paraphernalia. 
62 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
Given the resource gap from DepEd's budget, the Special Education Fund (SEF) 
can provide the much-needed budget augmentation for the BE-LCP. 
Even without amending Section 272 of Republic Act No. 7160, the 
aforementioned items or expenditures may be considered as allowed 
expenditures under the SEF. However, many local government units are 
requesting that such items be clearly covered as allowed expenditures under 
DepEd-DBM-DILG Joint Circular (JC) No. 1, s. 2017 (JC No. 1). Hence, this 
addendum to said JC No. 1, s. 2017. 
2.0 Clarification on Item 4.0 of JC No. 1, s. 2017 enumerating the allowable 
expenses chargeable against the SEF 
Accordingly, the following expenditures are hereby clarified as allowed to be 
charged against the SEF, net of whatever DepEd may provide for similar 
expenses through its own budget and subject to the provisions of item 5.0 of 
DepEd-DBM-DILG JC No. 1, s. 2017 dated January 19, 2017. 
2.1 Operation and maintenance of public schools 
2.1.1 
2.1.2 
2.1.3 
2.1.4 
2.1.5 
2.1.6 
2.1.7 
Payment of costs and expenses in connection with the acquisition, 
production, reproduction, and printing of learning materials for the 
learners such as, self-learning modules, textbooks, activity sheets, and 
study guides/manuals approved by DepEd; 
Purchase of external storage devices (compact disc/digital 
versatile disc, USB storage, and hard drive); 
Communication expenses such as, but not limited to, landline 
phone for communication, load (call, text, and data) for mobile 
phone communication and Wi-Fi connection; 
Payment of subscription fee for videoconferencing or remote 
communication tools/applications or platforms; 
Payment of honoraria and allowances of locally-hired personnel, 
trained and qualified tutors or learning facilitators; 
Training/webinars for teaching and non-teaching personnel, 
school leaders, parents, learning facilitators, and community 
education volunteers; and 
Payment of cost and expenses in the distribution and retrieval of 
learning materials for the learners such as, but not hm1ted to, 
transportation expenses of DepEd personnel and expenses in the 
distribution on the retrieval of self-learning modules, and 
shipment, delivery, and courier services. 
63 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
2.1.8 Health and sanitation expenses: 
2.1.8.1 personal protective equipment such .as, but not 
limited to, facemasks, face shields, hand gloves, 
surgical caps, hats, eye goggles, and hazmat suits; 
2. 1.8.2 medical devices such as, but not limited to, 
thermal/temperature scanners, and digital 
thermometers; 
2.1.8.3· vaccines, vitamins and minerals; and food 
supplements; 
2.1.8.4 hand sanitizers, alcohol, disinfectants, anti￾bacterial or germicidal soaps, deaning equipment, 
bleach, foot bath; and 
2.1.8.5 psychosocial first aid, mental and physical 
examination or check-up for teaching and non￾teaching personnel and learners, and medical 
doctors' consultation. 
2.2 Construction and repair of school buildings: 
2.2.1 Installation of health areas or facilities such as, but not limited 
to, school dinics and wash areas. -
2.3 Facilities and equipment: 
2.3.1 Personal computer, laptop computer, tablet, notebook, and 
smartphone; 
2.3.2 Printer, scanner, photocopying machine, and other printing or 
photocopying equipment and their consumables; 
2.3.3 Television set, antenna/cable satellite connection, radio with 
AM/FM channel, two-way radio for remote/off the grid areas; 
and 
2.3.4 Primary and secondary batteries, car battery, and solar panel. 
3.0 Issues for Resolution 
Interpretation of the provisions in this JC, induding matters not covered herein, 
shall be referred to the DepEd Central Office, for final resolution by DepEd, 
DBM, and DILG. 
Secretary 
Department of Budget and Management
64 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT
4.0 Separability Clause 
If any provision of this JC is declared invalid or unconstitutional, the other 
provisions not thereby affected shall remain valid and subsisting. 
5.0 Repealing Clause 
All provisions of existing circulars and other issuances inconsistent with this JC 
are hereby modified/repealed accordingly. 
6.0 Effectivity Clause 
This JC shall take effect immediately upon publication in the Official Gazette. 
Secretary 
Department of Education 
Secretary tv 
Department of the Interior and Local Government 
october 23, 2020 
65 LCP CITIES’ SYSTEM CAPACITY DEVELOPMENT (CI-CAP) PROJECT