Department of Budget and Management

The DBM seal shows a sea lion holding a balance and a quill to symbolize
the DBM’s major responsibility of ensuring a judicious allocation of
resources among sectors and programs of government. The 13
rays represent the Department and its major services at
the time the seal was conceptualized.

The national colors in the Philippine flag are reflected

in the red, blue, and yellow fields, with the three stars
representing the main geographical islands of the archipelago –
Luzon, Visayas, Mindanao. The figure ‘1936’ represents the year
when the DBM was born as the Budget Commission.

Legal Basis

l Executive Order 25 (April 25, 1936) created a Budget Commission under the Office of the
President.

l Executive Order 292 (July 25, 1987), Administrative Code of 1987, elevated the Budget
Commission into the Department of Budget and Management.

l Executive Order 95 (April 28, 1999) modified the DBM’s organizational structure, functions,
nomenclature and operational processes.

Mandate

The Department of Budget and Management (DBM) formulates and implements the National
Budget to support national socio-economic plans and objectives. It is responsible for the efficient
and sound utilization of government funds and revenues to achieve growth and the country’s
development objectives. It oversees the implementation of the Salary Standardization Law, and
staffing and organizational changes.
Central to responsible governing is responsible budgeting. The government is committed to fiscal
discipline and restraint as our counterpart in the burden of increasing revenues. The international
community, including investors and bankers, will view the budget passage as a positive indicator
that the Philippines is turning itself around. - PGMA, February 28, 2005
LOGICAL FRAMEWORK (DBM)

Societal Goal Poverty Alleviation

Sectoral Goals
Fiscal Strength Anti-Corruption Bureacratic Reforms

Organizational
Outcomes
Improved Improved Strengthened EnhancedAccountability
Operational Allocative Fiscal andIncreased
Efficiency Efficiency Responsibility Transparency in the
of NGAs and Discipline Public Sector

1 2 3 4 5
Staffing, Compensation T e c h n i c a l
& Organizational Expenditure Policies Fiscal & Budget BudgetAuthority &
A s s i s t a n c e
Standards, Guidelines, & Guidelines Programs Cash Requirements Rendered to NGAs,
MFOs Procedures, Systems
Formulated, Submitted to Released to NGAs, GOCCs, LGUs in
Developed; Plans &
Proposals Reviewed & Disseminated, & President/ GOCCs & LGUs and Budget &
Approved, and
Monitored Congress Monitored (APR) Management,
Compliance Monitored Procurement Reforms
P/A/Ps
Legal and legislative Budget information Legal and legislative
Legal and legislative Legal and legislative
liaison service liaison service system services and liaison service
liaison service maintenance
Budget information Public information/ Budget information system Public information/
relations and training services and maintenance Regional operations relations and training
system services and services Public information/
and coordination
service services
maintenance Regional operations relations and training Conduct of studies/ Regional operations and
Conduct of continuing and coordination services research and coordination service
studies on overall service Regional operations and formulation of fiscal Conduct of continuing
structure of Conduct of studies/ coordination service plan, budgeting
research and studies on over all structure
Conduct of studies/research framework, indicative
government formulation of fiscal and formulation of fiscal annual budget ceiling, of government bureaucracy
bureaucracy plan, budgeting plan, budgeting framework, sectoral compositions Formulation of policies and
Formulation of policies framework, indicative indicative annual budget & macro cash program development of standards
and development of annual budget ceiling, ceiling, sectoral Conduct of studies on and guidelines on
sectoral compositions compositions & macro cash government-wide IT- organization, staffing,
standards and & macro cash program based budgetary system
program compensation and position
guidelines on Conduct of studies on Formulation of policies and Development of
standards/guidelines classification and
organization, staffing, government-wide IT- development of standards
based budgetary system for budget preparation, equipment requirements
compensation and and guidelines on execution and
Development of organization, staffing, Conduct of studies on
position classification accountability, government-wide IT-based
and equipment standards/guidelines compensation and position including management
for budget preparation, classification and of the annual budget budgetary system
Evaluation/ execution and equipment preparation process Development of standards/
recommendation of accountability, Development of standards/ Evaluate, recommend guidelines for budget
funding, organization, including management guidelines for budget funding, organization, preparation, execution and
staffing and of the annual budget preparation, execution and staffing and accountability, including
preparation process accountability including compensation
compensation Evaluation/ requirements of management of the annual
management of the annual
requirements of recommendation of budget process national government budget preparation process
national government funding, organization, Evaluate, recommend agencies; monitoring Evaluate, recommend
agencies; staffing and funding, organization, of fund utilization and funding, organization,
compensation staffing and compensation assessment of staffing and compensation
Monitoring of fund performance
utilization and requirements of requirements of national Regional operations requirements of national
national government government agencies; Budget improvement government agencies;
assessment of agency agencies; monitoring of fund
performance Monitoring of fund project monitoring of fund
utilization and assessment utilization and assessment
Regional operations utilization and of performance
assessment of agency of performance
Regional operations
performance Regional operations
SECTOR GOALS

Fiscal Strength - Achieve a balanced budget for the national government by 2008 in order to
achieve a surplus in the consolidated public sector financial position by 2009 and bring down
public debt to manageable levels.

Anti-Corruption - Reduce the prevalence of corruption in government to save funds and channel
them to more productive purposes, lower cost of doing business, and raise credibility.

Bureaucratic Reforms - Strengthen the institutional capacity of government to improve service

delivery and to build a more effective, ethical and accountable bureaucracy.

ORGANIZATION OUTCOMES

Improved Operational Efficiency of National Government Agencies

Operational efficiency is being able to achieve effectiveness and efficiency. “Doing more with less”
DBM programs under this include the OPIF, to focus agency activities, and procurement reforms.

To improve public service delivery, a government-wide reorganization or restructuring is being

undertaken to eliminate redundancies, overlaps, and duplications in government operation. The
elimination of redundancies will allow government to focus resources on vital functions while the
elimination of overlaps/duplications will improve government systems and procedures. Both
contribute to make government more effective. An appropriately compensated bureaucracy, on
the other hand, with its efficient/effective and productive manpower, will ensure an equally efficient,
effective and productive service delivery of public goods.

It means “Doing things right at reasonable cost”.

Improved Allocative Efficiency

“Focusing on the right things”.

Given the limited financial resources of government, allocation among the various competing demands
should take into consideration strategic priorities and desired outcomes. This will ensure that
budget allocation will focus on areas that can provide the greatest impact and will benefit the
greatest number.

Contributing programs to this outcome is the OPIF and the MTEF to a certain extent because of
the focusing they do with Forward Estimate and Paper on Budget Strategy.

Strengthened Fiscal Responsibility and Discipline

“Living within one’s means”.

Total budget level should be set depending on the estimated revenues and a sustainable level of
budget deficit. Agency budget ceilings are fixed to be hard, ceilings based on the requirements of
approved programs and projects, including priorities contained in the Medium Term Philippine
Investments Plan (MTPIP).

Enhanced Accountability and Increased Transparency in the Public Sector

The reporting of outputs that agencies are expected to deliver as their contribution to the ultimate
objective of government is expected to result in agencies becoming more accountable and responsible
for the use of resources allocated to them. This is also true for the publication of expenditure
allocations.

The passage of the Government Procurement Reform Act, redefining the procedures in government
purchasing to make it more transparent and competitive and the involvement of all stakeholders,
such as civil society groups and the private sector, in the various phases of budgeting, will also
increase transparency in government transactions.

MAJOR FINAL OUTPUTS

1. Staffing, Compensation and Organizational Standards, Guidelines, Procedures,

Systems Developed; Plans and Proposals Reviewed and Approved; and Compliance
Monitored

As part of its management services function, the Department of Budget and Management
formulates policies and develops standards and systems relative to staffing, compensation,
and organization of national government agencies. These policies, standards, and systems
serve as the bases in evaluating agency requests and in monitoring compliance with what has
been approved.

2. Expenditure Policies and Guidelines Formulated, Disseminated, and Monitored

Considering limited government resources, expenditure policies and guidelines ensure that
programs/projects supportive of the government’s development and reform agenda are given
funding priority, and that the provisions of law on mandatory expenses are considered.
Compliance with such policies and guidelines is monitored.

3. Fiscal and Budget Programs Submitted to President/Congress

The DBM prepares and consolidates (for the President’s consideration)the annual budget
proposal, which consists of the National Expenditure Program (NEP), the Budget of
Expenditures and Sources of Financing (BESF), Details of Selected Programs and Projects
(DSPP), and the Staffing Summary. These documents are submitted to Congress within the
timeframe set by the Constitution.
4. Budget Authority and Cash Requirements Released to NGAs, GOCCs & LGUs and
Monitored (APR)

The Department of Budget and Management issues release documents (ABMs, SAROs,
MYOAs) to authorize agencies to enter into contract/obligation (NCAs, CDCs, NCAAs)
and enable them to pay/liquidate said obligation. It monitors and evaluates agency
accomplishment vis-a-vis its targets, and the utilization and raising (if applicable) of funds to
determine if said funds have been used for the purpose for which they have been authorized.

5. Technical Assistance Rendered to NGAS, GOCCs, LGUs in Budget and Management

and Procurement Reforms

An integral part of DBM’s functions is the provision of technical assistance to its clientele in the
implementation and execution of various policies, standards, systems and guidelines issued;
resource allocation, management and utilization, including the implementation of the Government
Procurement Reform Act and its IRR. The technical assistance may take the form of seminars,
training, briefings, orientations, and similar activities.

Performance Measures and Targets

Major Final Outputs (MFOs) Performance Indicators (PIs) Targets*

MFO 1
Staffing, Compensation and Organizational No. of policies, standards, procedures, 100%
Standards, Guidelines, Procedures, Systems guidelines issued over those developed
Developed; Plans and Proposals Reviewed No. of plans & proposals acted upon 100%
and Approved; and Compliance Monitored over number of proposals received
MFO 2
Expenditure Policies and Guidelines No. of policies, standards, procedures, 100%
Formulated, Disseminated, and Monitored systems issued over those developed
MFO 3
Fiscal and Budget Programs Submitted to Compliance with Constitutional deadline 30 days after
President/Congress opening
Adherence of the proposed budget to of Congress
DBCC-approved policies 100%
MFO 4
Budget Authority and Cash Requirements Percentage of adherence of actual 100%
Released to NGAs, GOCCs and LGUs and releases with budget programs approved
Monitored (APR) by DBCC in terms of allotment and cash
allocation
Adherence to set time standards for 100%
budget releases
Approval of COB of GOCCs according 100%
to set standards
Approval of LGU budget according to 100%
set standards
Review of NGAs’ performance in 100% of
accordance with prescribed guidelines depts/agencies
MFO 5
Technical Assistance Rendered to NGAs, Technical assistance rendered as requested
GOCCs, LGUs in Budget and Management Training programs conducted 10
and Procurement Reforms
* Targets are set at 100% given the need to establish initial benchmarks of performance
FY 2007 OPIF-Based Budget

For FY 2007, the Department of Budget and Management is provided a total budget of
P721,766,000, broken down into:

l Personal Services P265,570,000

l MOOE 168,653,000
l Capital Outlays 264,778,000
----------------
Sub-total P699,001,000
RLIP 22,765,000
----------------
T O TAL P721,766,000
===========

The total budget of P721,766,000 is distributed among the five (5) approved MFOs as shown
below:

FY 2007 Budget by Major Final Output (MFO)

Particulars PS MOOE CO TOTAL %

MFO 1
Staffing, Compensation and P44,369,000 P18,043,000 P5,444,000 P67,856,000 9.4
Organizational Standards, Guidelines,
Procedures, Systems Developed; Plans
and Proposals Reviewed & Approved;
and Compliance Monitored

MFO 2
Expenditure Policies and 26,060,000 14,818,000 5,336,000 46,214,000 6.4
Guidelines Formulated, Disseminated,
and Monitored

MFO 3
Fiscal & Budget Programs 53,012,000 26,827,000 7,172,000 87,011,000 12.1
Submitted to President/Congress

MFO 4
Budget Authority & Cash 104,844,000 83,032,000 239,406,000 427,282,000 59.2
RequirementsMonitored/Released
to NGAs, GOCCs and LGUs

MFO 5
Technical Assistance Rendered 60,050,000 25,933,000 7,420,000 93,403,000 100.00
to NGAs, GOCCs, LGUs in Budget and
Management & Procurement Reforms

T O TA L P288,335,000 P168,653,000 P264,778,000 P721,766,000 100.0

% Share 40.0 23.4 36.7 100%
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