LOCAL GOVERNMENT CODE The local government code provides for the creation of the Sangguniang Kabtaan (SK)

in Sec. 423:
SEC. 423. Creation and Election. - (a) There shall be in every barangay a sangguniang kabataan to be composed of a chairman, seven (7) members, a secretary, and a treasurer, (b) A sangguniang kabataan official who, during his term of office, shall have passed the age of twenty-one (21) years shall be allowed to serve the remaining portion of the term for which he was elected.

The SK is the governing body of the youth assembly in every baranggay, elected by the assembly under the supervision of the COMELEC. The powers and functions of the SK are enumerated in sec. 426. The SK draws its funds from the general fund of the baranggay. It receives 10% of the general fund as provided for in Sec 329.
SEC. 329. Barangay Funds. - Unless otherwise provided in this Title, all the income of the barangay from whatever source shall accrue to its general fund and shall, at the option of the barangay concerned, be kept as trust fund in the custody of the city or municipal treasurer or be deposited in a bank, preferably government-owned, situated in or nearest to its area of jurisdiction. Such funds shall be disbursed in accordance with the provisions of this Title. Ten percent (10%) of the general fund of the barangay shall be set aside for the sangguniang kabataan.

It can hold fund-raising activities (Sec. 426c) and it can receive contributions. (Sec. 433b)
SEC. 426. Powers and Functions of the Sangguniang Kabataan. The sangguniang kabataan shall: (c) Hold fund-raising activities, the proceeds of which shall be taxexempt and shall accrue to the general fund of the sangguniang kabataan: Provided, however, That in the appropriation thereof, the specific purpose for which such activity has been held shall be first satisfied; SEC. 433. Sangguniang Kabataan Treasurer. - The sangguniang kabataan treasurer shall: (b) Collect and receive contributions, monies, materials, and all other resources intended for the sangguniang kabataan and katipunan ng kabataan;

The Department of Budget Management published the following facts and guideline in relation to the SK budget for its allocation and proper utilization. 1
1

http://www.dbm.gov.ph/dbm_publications/primer_on_brgy/b4.htm

What are the mandatory obligations that should be provided in the barangay annual budget? The barangay annual budget must include the following: Appropriations for development projects of not less than 20% of the total IRA of the barangay for the budget year (Development Fund); Appropriations for Sangguniang Kabataan (SK) programs, projects and activities equivalent to 10% of the general fund of the barangay for the budget year (SK Fund); Appropriations for unforeseen expenditures arising from the occurrence of calamities at 5% of regular income for the budget year (Calamity Fund); and Provision for the delivery of basic services pursuant to Section 17 of RA No. 7160, and effective local governance.

How is the 10% Sangguniang Kabataan (SK) Fund utilized? As a requisite for the use of the SK fund, the SK shall develop a plan or a work program (or a purchase order) which reflects the projects that they intend to fund for the year. The plan or work program must be approved by the majority members of the Sangguniang Barangay. Should unexpended balances of SK fund be reverted to the general fund at the end of the year? The 10% SK fund is a statutory obligation that can be considered a trust fund. Therefore, any unexpended balances shall form part of the beginning balance of the succeeding fiscal year but only to be added to the 10% share of the SK for the next year. Can the SK purchase mobile phones for their official use? Yes, if it can be justified as very necessary for SK operations. It is strongly recommended, however, that guidelines regarding the payment of bills be formulated since it is very difficult to determine whether the calls are official or not. How does the SK utilize funds generated from fund raising activities? Any amount generated by the SK from fund raising and similar activities may be disbursed by them with the proper guidance of the Sangguniang Barangay but without need of its formal approval.