Millenium Development Goals Fund (MDGF)


Q: What is the MDG fund?

          It is a locally-funded project jointly implemented by OPDS/DILG and the Municipal Development Fund Office (MDFO)/DOF, with DILG responsible for capacity development, particularly on project preparation, implementation and operation and maintenance,  and MDFO for Fund administration of the P500 M made available by MDFO from its Second Generation Fund (SGF) for relending to interested and eligible LGUs.  The MDG Fund finances projects supportive of the  attainment of Millennium Development Goals 1 – 7 such as those on  water, sanitation, health, education and other socio-economic projects.

Q: What LGUs are eligible for this financing?

          These are

  1. 4th-6th class municipalities
  2. all  provinces regardless of income class, borrowing for their 4th-6th class municipalities

Q:  How can an LGU avail  of this financing?

          The Local Chief Executive writes a Letter of Intent to the Director, Office of Project Development Services, DILG or to the Executive Director, Municipal Development Fund Office, DOF.  The Letter of Intent is accompanied by a brief description of the project.  If the LGU and the project are both eligible for financing, the LGU is advised to submit documents for the issuance of a Certificate of  Borrowing Capacity by the Bureau of  Local Government Finance (DOF), and a Sanggunian  Bayan resolution authorizing the Local Chief Executive to enter into relevant agreements relative to the project.  Pro-forma of the SB Resolution is provided by MDGF

A feasibility study (FS) is submitted to MDFO for evaluation.  The FS may be prepared by the LGU,  may hire a consultant, or it may request technical assistance from the DILG. If found feasible by MDFO, the project is approved for financing under the MDG Fund

Q:  What are the projects eligible for financing under the Fund?

         Projects that clearly contribute to the attainment of any or all of  Millennium Development Goals 1-7 and included in the LGU Local Development Plans, such as those on health, poverty-reduction, water, sanitation, education and other socio-economic projects. Examples include but are not limited to:

  1. Livelihood programs/projects such as cottage industries, handicraft industries, livestock production, etc., including construction of livelihood centers/support facilitiesConstruction/rehabilitation/improvement of
    •   water supply systems
    • access roads such as farm-to-market roads, footbridges
    • public auction markets
    • health care centers
    • day-care centers/pre-school institutions
    • RHUs/lying-in clinics which may include equipment and supplies
    • municipal/barangay wharves/ports
  2. Construction/provision of  women’s resource centers and livelihood centers. Procurement of various seedlings and other farm equipment and other farm implements
  3. Procurement of heavy equipment for SWM, road construction/ maintenance. Establishment of HIV/AIDS and STD counseling and surveillance center/desk. Construction/installation of solar driers, multi-purpose pavement, post-harvest facilities, food processing, rice and corn mills, warehouses.

Q: What  are the loan terms and conditions of MDG Fund?

          MDGF has three (3) financing packages:

Package 1

Softer support / Light equipment e.g. procurement of light equipment, goods, seed capital for livelihood and similar items 
       Interest rate :  7.5% per annum, fixed
       Repayment Period : 5 years inclusive of 1 year grace period on principal

Package 2

Heavy equipment e.g. procurement of heavy equipment such as farm tractors, garbage trucks, dump trucks, pay loaders

Interest rate   : 7.5% per annum, fixed
            Repayment period : 10 years inclusive of 3 years grace period on principal

Package 3

Civil Works/Infrastructure such as construction and rehabilitation of educational facilities, health-related facilities, water supply facilities and similar items                                                    

                        Interest rate : 8.0% per annum, fixed
                        Repayment period : 15 years inclusive of 3 years grace period on principal  


Department of the Interior and Local Government Regional Office I

Aguila Road,
Barangay Sevilla
San Fernando City,
La Union

(072) 888-21-08
(072) 700-27-01