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Towards Results-Based Budgeting

Towards Results-Based Budgeting. Department of Budget and Management 7 November 2011. 2. PUBLIC EXPENDITURE MANAGEMENT: FOCUS ON RESULTS. Uses Budget as instrument for ensuring desired results: fiscal discipline, strategic allocation of resources,

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Towards Results-Based Budgeting

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  1. Towards Results-Based Budgeting Department of Budget and Management 7 November 2011

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  3. PUBLIC EXPENDITURE MANAGEMENT:FOCUS ON RESULTS Uses Budget as instrument for ensuring desired results: fiscal discipline, strategic allocation of resources, efficient government operations Gives priority to expenditures oriented towards achieving desired outcomes for the country Places emphasis on monitoring and evaluating performance, with external participation by stakeholders Recognizes managers cannot be held accountable for results unless empowered to allocate resources flexibly 3

  4. Medium-Term Expenditure Framework (MTEF, 2007) Organizational Performance Indicator Framework (OPIF, 2007) Zero-Based Budgeting (ZBB)/ Program Evaluation (2010) PUBLIC EXPENDITURE MANAGEMENT: KEY COMPONENTS 4

  5. Evaluation is a vital part of performance information under performance budgeting. 5

  6. Medium-Term Expenditure Framework (MTEF) 6

  7. MTEF DEFINED A three-year rolling budgeting approach that sets out Government’s expenditure plans within an available resource ceiling. • A tool for linking policy, planning & budgeting over the medium-term for fiscal discipline and strategic resource allocation; • It consists of a top-down resource allocation and a bottom-up estimation of the medium-term costs of existing policies or PAPs in order to determine fiscal space; • Involves rolling over of ongoing programs to provide predictability while allowing the incorporation new or changes in policies 7

  8. WHAT HAVE WE DONE UNDER MTEF? Kept budget deficits manageable at 1% in 2006 to 3.5% in 2010; Restructured the budget towards more funds for non debt expenditures, specially infrastructure outlays; Increased focus on results by affording predictability of policy and funding so that agencies can plan ahead and programs can be sustained; Provided line agencies with increased autonomy over program choice, thereby increasing incentives for efficient and effective use of funds. 8

  9. Organizational Performance Indicator Framework (OPIF) 9

  10. OPIF: Two Dimensions Accountability Framework showing Major Final Outputs (MFOs) are produced and by whom. OPIF book submitted to Congress in support of proposed budget. Performance Framework for performance information used in the budget process, in the rationalization program and in shaping a performance based compensation system 10

  11. Zero-Based Budgeting (ZBB) Approach (Program Evaluation)

  12. ZBB Objectives • To establish the continued relevance of program objectives given the current developments/ directions; • To assess whether the program objectives/outcomes are being achieved; • To ascertain alternative or more effective and efficient ways of achieving the objectives, and ultimately; • To guide decision makers on whether the resources for the program/project should continue at its present level, or be increased, reduced or discontinued.

  13. ZBB Criteria • Possible potential leakages and inefficiencies based on COA Reports; • Large magnitude of funds provided; • Weak performance over the past years; and • Critical programs of the Aquino Administration.

  14. ZBB Results for 2011 Budget Termination/cut of programs no longer delivering outcomes (e.g., Food for School Program, Agricultural Input Subsidies, Kalayaan Barangay Program); Need to hold funding for some programs pending removal of bottlenecks in project implementation and procurement (e.g., DepEd Critical Inputs, TESDA Scholarship); Expansion of well performing programs to alleviate/mitigate critical gaps (e.g., CCT, ESC, NHIP); Need to pursue difficult GOCC reforms (e.g., NFA, LRTA, MRT); Tightening use of lump sum funds according to master plans and government priority needs (e.g., PDAF, FMRs, Irrigation Lump sums); and Possible deactivation of agencies and GOCCs (e.g. Quedancorp, OP-TFs, OP-LFPs) 14

  15. Savings from ZBB from 2010 Budget (in billions) • Malusog na Simula Yaman ng Bansa P 3.3 • Kilos Asenso Support Fund 1.0 • Kalayaan sa Barangay Project 1.0 • General Fund Adjustments 1.0 • Capital Subscription of NG to the BSP 4.0 Total P10.3

  16. Programs Reviewed for FY 2012 – ZBB Progress Report(in billions) • Health Facilities Enhancement Program P 5.1 • Cheaper Medicine Program 1.0 • Budgetary Subsidies for State Universities 23.6 4. Higher Education Development Fund 0.5 • Teacher Deployment Program 2.9 • New Classroom Construction Program 14.0 • Tech-Voc Scholarships of TESDA 0.9 • Buying/Leasing of Election Machines 8.0 • Agri Competitiveness Enhancement Fund - Total P56.0

  17. Thank you Department of Budget and Management 2nd Flr. DBM Bldg. II, General Solano St. San Miguel, Manila 1005 Philippines 17 www.dbm.gov.ph

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