Budget Reform under the Aquino Administration

Secretary Florencio B. Abad, DBM

Expenditure Performance So Far

Is Underspending Over?

NG Expenditures, As of July 2012

TOTAL P832.3B

Y-O-Y 15.1%

NG Expenditures, Y-O-Y

NG Expenditures, As of June 2012

TOTAL P795.4B

Y-O-Y 13.8%

Disbursements by Expense Class, As of June 2012

Personal Services P255.3B MOOE P115.2B

8.2%

41.4% 13.7%

Current Oper. Exp. P695.4B Allotment to LGUS

P109.3B
Interest Payments P150.0B Tax Expenditure P17.3B

Subsidy P12.2B

Y-O-Y 4.8% 10.7%

11.5% 16.8%

Disbursements by Expense Class, As of June 2012

Infra & Other CO P88.5B

66.1%

Capital Outlays Equity P0.9B P124.3B

Cap. Transfers to LGUs P35.0B

37.0%
6.4%

Y-O-Y 675.9%

Net Lending P11.7B

Y-O-Y 5.2%

Public Expenditure Management

Objectives of Effective Public Expenditure

Fiscal Discipline: Spending Within Means

Allocative Efficiency: Right Priorities

Effective Operations: Spending with Impact

Accelerating Delivery, Deepening Reform

The Empowerment Budget of 2013

Empowerment Budget of 2013

P2.006 T
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Budget by Sector, FY 2012-2013

Economic Services 439.0 (24.2%)

2012

Social Services 613.4 (33.8%)

Economic Services 511.1 (25.5%)

2013

Social Services 698.8 (34.8%)

Debt Service 333.1 (18.3%)

Net Lending 23.0 (1.3%)

General Services 320.3 (17.6%)

Defense 87.2 (4.8%)

Debt Service 333.9 (16.6%)

Net Lending 26.5 (1.3%)

Defense 89.7 General (4.5%) Services 346.1 (17.3%)

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Budget by Expense Class, FY 2012-2013

Levels (Php Billion) Percent Share Growth Rate PARTICULARS 2012 2013 2012 2013 2012-2013 Program Proposed Program Proposed CURRENT OPERATING EXPENDITURES 1,464.7 1,599.5 80.7 79.7 9.2 Personal Services MOOE Subsidy Allotment to LGUs Interest Payments Tax Expenditure Fund CAPITAL OUTLAYS Infra. and Other CO Equity Capital Transfers to LGUs CARP LO Compensation NET LENDING TOTAL M emo Items: Capital Outlays Add: Infra Subsidy for GOCCs Total Adjusted Capital Outlays 328.3 11.0 339.3 380.0 29.8 409.8 18.1 0.6 18.7 18.9 1.5 20.4 15.7 172.0 20.8 593.5 266.6 19.7 218.6 333.1 33.0 328.3 252.4 2.1 71.3 2.5 23.0 1,816.0 641.3 313.3 42.3 241.8 333.9 26.9 380.0 296.7 2.0 76.3 5.0 26.5 2,006.0 32.7 14.7 1.1 12.0 18.3 1.8 18.1 13.9 0.1 3.9 0.1 1.3 100.0 32.0 15.6 2.1 12.1 16.6 1.3 18.9 14.8 0.1 3.8 0.2 1.3 100.0 8.1 17.5 114.3 10.6 0.2 (18.6) 15.7 17.5 (2.7) 6.9 100.0 15.2 10.5

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Top Ten Departments, FY 2012-2013

Particulars DepEd (incl. MPBF and SBP) DPWH (incl. PSEPF and BSGC ) DND (incl. MPBF and PGF) DILG (incl. MPBF and PGF) DA (incl. PSEPF and BSGC ) DOH (incl. MPBF, PSEPF and BSGC ) DSWD DOTC (incl. MPBF, PGF, PSEPF and BSGC ) DOF (incl. MPBF and BSGC ) DENR (incl. MPBF and PGF)
Notes: 1/ Gross of School Building Program transferred to DPWH 2/ Net of School Building Program transferred from DepEd 3/ The corporate funds of DOTC attached corporations (MIAA, MCIAA, CIAC and CAAP) amounts to P2.6B in 2013 (Php Billion)

2012 Program Level Rank 238.8 126.4 108.1 99.8 61.4 45.8 48.8 34.7 23.6 17.5 1 2 3 4 5 7 6 8 9 10

(Php Billions)

2013 Proposed Level Rank 292.7 152.9 121.6 121.1 74.1 56.8 56.2 37.1 33.2 23.7
1/ 2/

3/

1 2 3 4 5 6 7 8 9 10

Legend: MPBF- Miscellaneous Personnel Benefits Fund SBP - School Building Program PGF - Pension and Gratuity Fund PSEPF - Priority Social and Economic Projects Fund BSGC - Budgetary Support to Government Corporations

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Core Principles of the 2013 Budget

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Greater Focus on the Social Contract

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Greater Focus on the Social Contract

Introduction of Program Budgeting
Sustained Use of Zero-Based Budgeting

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Completion of Priority Program Targets

DPWH as Principal Infrastructure Agency
Line Agencies to Focus on Core Mandates and Accelerated Delivery of Targets Start Pre-bidding Process after the NEP Submission Closer Performance Monitoring

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Stronger Accountability to Perform

Performance-Based Budgeting
Harmonization of All Performance Management Systems in Government Performance-Based Incentives

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Fiscal Transparency = Clear Results

Disaggregation of Agency Lump Sum Funds
Shift to One-Year Validity of MOOE & CO Appropriations in 2013 in Preparation for Budget-as-Release Document Regime by 2014

Technological Innovations for Speedier and More Transparent Processes

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Greater Stakeholder Participation

Introduction of Bottom-Up Budgeting
Expanded Agency-CSO Partnerships Public-Private Partnerships for Social Service Delivery

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Public Financial Management Reform Roadmap 2011-2016

PFM reforms support Aquino Administration priorities

Kung walang corrupt, walang mahirap 5 Priority Areas
Anti-corruption/ Transparent, Accountable & Participatory Governance Poverty Reduction & Empowerment of the Poor Rapid, Equitable& Sustained Economic Growth Just, Inclusive & Lasting Peace & the Rule of Law Integrity of the Environment/ Climate Change Mitigation & Adaptation

Societal Goal

Inclusive Growth and Poverty Reduction

Sector Goal

Good Governance

Fiscal Discipline

PFM Goal

Improve efficiency, accountability and transparency of public fund use to ensure direct, immediate and substantial delivery of public services specially to the poor.

Outputs and Results

PFM REFORMS ROADMAP

Outputs

Results Based Budgeting

Treasury Single Account

GIFMIS Real Time Financial Information

Better Mgt of Contingent Contingent Liabilities Liabilities

Major Strategies

1. Build up Credibility of PFM

2. Review Fund Release Procedures

3. Capacity Building for Congress and CSOs

4. Improve Treasury Cash Management Operations

5. Develop & Implement GIFMIS

Opening Wider Spaces for Stakeholder Participation

The Private Sector & Budgeting

Private Sector as a Key Budget Stakeholder

Governments Partner in Service Delivery
Supplies goods and services Public-Private Partnerships

Affected by Macroeconomic and Fiscal Policies and Actions by Government Robust Source of Technical and Professional Expertise, Good Practices and Innovations Co-Advocate of Reform

Entry Points for Private Sector Participation

Participatory Macro & Fiscal Risk Assessments PPPs for Social Service Infrastructure Partnerships for Public Administration & Service Delivery Improvement Monitoring of Public Procurement Participation in Budget Performance Reviews Industry-Specific Engagements

Budget Reform under the Aquino Administration

Secretary Florencio B. Abad, DBM