It is generally believed that Balungao was officially founded in the year 1815. The town was still a part of Cuyapo, Nueva Ecija but, considering its geographical location, it was segregated from the township of Cuyapo, Nueva Ecija in the later part of the 18th century. Shortly after the revolution, it was annexed to the Municipality of Rosales and it was then named “Panaclaban”. However, by virtue of a Spanish Royal Family Decree, Balungao became an independent town.
The town of Balungao got its unique name from a young widowed, beautiful lass. People were fascinated by her beauty and soon named her “BALUN-UGAW” in the native dialect, meaning “young widower”. So the place became famous on the tongues of many – whenever one goes to this place, they would call it “BALUNGAO”, derived from the word “BALUN-UGAW”.