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December 14, 2000

TO      :      All Regional Directors, Auditors of Local Government Units (LGUs), and All Others concerned.

SUBJECT      :      Clarificatory Guidelines on the Application of the 55% Limitation on Personal Services Relative to the Implementation of Honorarium Adjustment Provided for Under Local Budget Circular (LBC) No. 63 of the Department of Budget and Management.

Quoted hereunder is the full text of the letter dated 06 November, 2000 of Secretary Benjamin E. Diokno of the Department of Budget and Management to the COA Chairman:

Republic of the Philippines
Malacaņang, Manila

06 November, 2000

The Honorable
The Chairman
Commission on Audit
Constitution Hills, Diliman
Quezon City


This pertains to your letter dated September 27, 1999 requesting clarification on the application of the 55% limitation on personal services relative to the implementation of honorarium adjustment provided for under Local Budget Circular (LBC) No. 63. The Commission observes that Section 3.1 of the said Circular appears to be contradictory to Section 5.3.1 thereof.

Sec. 3.1 of LBC 63 provides that the honorarium rates of barangay officials can be adjusted at the minimum or 1st step of SG-14 (punong barangay) and SG-10 (other mandatory barangay officials) subject to availability of funds and the general personal services (ps) limitations. On the other hand, Section 5.3.1 provides that the 55% limitation shall be waived in favor of the enforcement of the minimum honoraria and the authorized adjustments. While the above-cited provisions appears contradictory, these two provisions actually complement each other.