LGUs Can Now Use 20% Development Fund for Energy Projects Amid National Energy Emergency
IPIL, Zamboanga Sibugay — Local government units (LGUs) across the country may now tap their 20% Development Fund (DF) for energy-related development projects under new national guidelines, a policy that could be particularly relevant in Zamboanga Sibugay, where rising electricity costs, power reliability and calls for greater transparency in the local electric cooperative have become pressing public concerns.
The Department of the Interior and Local Government (DILG), Department of Budget and Management (DBM), and Department of Finance (DOF) issued Joint Memorandum Circular No. 2026-01 on August 4, 2026, expanding the allowable use of the 20% DF for development-oriented and capital-intensive projects that support the government's Unified Package for Livelihoods, Industry, Food and Transport (UPLIFT) Framework.
The policy forms part of the government's response to the State of National Energy Emergency declared by President Ferdinand R. Marcos Jr. and gives LGUs greater flexibility to undertake local interventions intended to strengthen energy security, improve efficiency and cushion communities from the effects of energy price and supply shocks.
Under the new guidelines, LGUs may use the 20% DF for the construction or establishment of local oil storage facilities, expansion of renewable-energy projects, smart and green grid systems, and the acquisition of electric vehicles for qualified health services, uniformed services and disaster risk reduction and management operations.
The fund may also be used for the construction and installation of solar photovoltaic systems and related infrastructure, as well as other qualified energy-efficiency and conservation projects recommended by the Inter-Agency Energy Efficiency and Conservation Committee.
For local governments, the policy potentially opens another avenue to address energy concerns through long-term investments rather than relying solely on short-term measures whenever electricity or fuel costs increase.
The new policy takes on added relevance in Zamboanga Sibugay, where concerns involving ZAMSURECO II have recently intensified among member-consumer-owners.
The cooperative's service area covers Zamboanga Sibugay, making the cost and reliability of electricity a matter that directly affects households, businesses, farmers, government offices and public institutions throughout the province.
The issue has already reached local legislative bodies.
The YES to ZAMSURECO II Transparency movement recently brought its Position Paper and Manifesto before the Sangguniang Bayan of Ipil, raising concerns involving electricity rates, billing practices, meter reading, service delivery, transparency and consumer participation.
The group subsequently presented its Position Paper before the Sangguniang Panlalawigan of Zamboanga Sibugay, where the concerns were referred to the Provincial Board's Committee on Energy for appropriate review and consideration.
The campaign has emphasized that the demand for transparency is not necessarily a call to oppose the cooperative, but a call for member-consumer-owners to better understand the factors affecting their electricity bills and to have meaningful participation in matters that directly affect them.
The concerns come as electricity costs remain a significant burden for consumers and businesses, while the national government continues to implement measures intended to protect the stability of the country's energy supply amid global market uncertainties.
The Energy Regulatory Commission has also undertaken measures in response to the energy emergency, including requiring distribution utilities experiencing significant increases in generation costs to submit detailed reports supporting their rate adjustments.
ZAMSURECO II, meanwhile, remains involved in regulatory proceedings before the ERC, including matters involving its power supply arrangements.
Against this backdrop, the new 20% DF guidelines raise an important question for LGUs in Zamboanga Sibugay and elsewhere: Can local governments do more to reduce their dependence on conventional energy and make public services more resilient?
Under the new policy, LGUs may explore solar photovoltaic installations for government buildings and other qualified public facilities, particularly those where uninterrupted electricity is important to the delivery of essential services.
They may also consider qualified renewable-energy projects, smart and green grid systems, electric vehicles for specified government functions and other energy-efficiency measures that could reduce consumption and improve the resilience of government operations.
For a province such as Zamboanga Sibugay, where communities are spread across different municipalities, investments in renewable and decentralized energy solutions could potentially form part of broader disaster preparedness and public-service continuity planning.
Such initiatives, however, would not replace the responsibilities of the electric cooperative or the regulatory authority of the ERC. Rather, they could complement existing electricity infrastructure by allowing LGUs to strengthen the energy resilience of facilities and services within their jurisdiction.
The new policy does not authorize LGUs to simply use the 20% DF to pay their regular electricity or fuel expenses.
The guidelines specifically distinguish development-oriented and capital-intensive projects from recurring operational expenditures. The 20% DF cannot be used for recurring expenses such as fuel purchases, electricity and water bills and other day-to-day administrative costs.
Energy-efficiency and conservation projects funded through the Development Fund must also be integrated into the LGU's local planning, investment programming, budgeting and reporting systems, including its Local Energy Efficiency and Conservation Plan.
LGUs are likewise encouraged to coordinate with relevant national government agencies to ensure that local projects complement existing national programs and address gaps that may not be sufficiently covered by other interventions.
For Zamboanga Sibugay, the new policy comes at a time when the affordability and reliability of electricity are already subjects of public discussion.
The ongoing ZAMSURECO II transparency campaign has brought electricity-related concerns into the public and legislative conversation, while the cooperative's regulatory matters continue to be addressed through the appropriate national agencies.
The new Development Fund guidelines provide a separate but potentially complementary avenue for local governments to invest in energy infrastructure and efficiency projects that could help reduce their own energy vulnerability and strengthen essential public services.
It may also encourage LGUs to look beyond simply responding to high electricity and fuel costs and instead consider longer-term investments in renewable energy, energy efficiency and resilient infrastructure.
For local governments, the opportunity is therefore not simply about having another source of funding. It is about determining whether local development resources can be strategically invested in projects that will help communities withstand energy-price shocks, protect essential services and gradually move toward cleaner and more sustainable sources of power.
And in a province where consumers are increasingly asking questions about electricity costs, service and accountability, the new policy may also prompt a broader conversation about what role local governments can play in building a more affordable, resilient and sustainable energy future for Zamboanga Sibugay.
