TO:	The Secretary of Public Highways The Secretary of Finance The Secretary of Local Government and Community
		Development
	The Acting Commissioner of the Budget All Heads of Local Government Units

WHEREAS, the proper maintenance of the country's highways and roads is essential to national economic development;

WHEREAS, it is necessary to adopt a more efficient system of allocating and releasing funds to improve and accelerate the execution of the road maintenance program;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, hereby direct the following:

1. Local government units are authorized to spend local funds for road and bridge maintenance prior to the release of National Government aid:  PROVIDED, That such expenditures are duly certified to and reported to the Department of Finance and the Department of Public Highways.
2. The national aid for local roads maintenance shall be understood to cover the maintenance of local bridges on local roads.
3. Local government units shall use the approved EMK as basis for funds programming for the local counterpart in local roads maintenance.  For this purpose, the Department of Finance in coordination with the Department of Public Highways, shall notify at the appropriate time, local governments of the EMK figure they should use for the incoming budget year.
4. The Department of Public Highways may release in the first quarter of the calendar year the full national government contribution to local road maintenance pertaining to the Quarter, even pending the certification as to the appropriation of local counterpart funds by the Treasurer of the local government unit concerned.
5. The Department of Finance shall monitor actual expenditures of local government units for local road maintenance, which shall be made the basis for releases of national roads and bridge maintenance aid by the Department of Public Highways subsequent to the first quarter release
6. Local government units which are financially distressed and which cannot establish all or part of the local counterpart fund for the maintenance of local roads may, upon certification by the Department of Finance to this effect, be entitled to the full release of the national aid for local road maintenance.  For this purpose, the Department of Finance shall prepare annually a list of depressed local government units which are unable to establish local counterpart maintenance funds, which list shall be reviewed periodically and certified by the Secretary of Finance and made the basis for the release of the national aid for maintenance of local roads.
7. The Department of Public Highways shall establish a mechanism for independently monitoring physical performance on the maintenance of provincial and city roads.
8. The Department of Local Government and Community Development and the various Provincial Governments shall establish a mechanism for independently monitoring physical accomplishments in the maintenance of municipal and barangay  roads:  PROVIDED, that barangay roads in cities shall be monitored by City Engineers.
9. The findings of the District, Provincial and City Engineers in items Nos. 7 and 8, above, with respect to compliance by local governments with approved physical standards of  maintenance and with   the utilization of local counterpart maintenance funds, shall determine the rate of release of national aid funds for maintenance of local roads, following such rules and regulations as shall be jointly promulgated by the Department of Public Highways, Department of Local Government and Community Development and the Department of Finance.
10. The Commission on Audit shall review the cost estimates for the various types of roads, with the aim of reducing the existing cost per equivalent maintenance kilometer (EMK).
11. The Budget  Commission  shall review the over-all requirements for road maintenance and transfer from Projects 4.1 and 4.2 of the DPH budget under P.D. No. 1050, to the highway maintenance fund, such amounts as may be necessary to cover any deficiency in national and local roads maintenance funds.
12. All heads of local governments shall extend full support and assistance to National Government authorities concerned in carrying out the directives under this Letter of Instructions.
13. This Letter of Instructions shall take effect immediately.

Done in the City of Manila, this 22nd day of March, in the year of Our Lord, nineteen hundred and seventy-seven.