Towards Results-Based

Budgeting

Department of Budget and Management

7 November 2011
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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 flexibly3
PUBLIC EXPENDITURE MANAGEMENT:
KEY COMPONENTS
 Medium-Term Expenditure Framework
(MTEF, 2007)

 Organizational Performance Indicator

Framework (OPIF, 2007)

 Zero-Based Budgeting (ZBB)/ Program

Evaluation (2010)

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Evaluation is a vital
part of performance
information under
performance
budgeting.
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 Medium-Term
Expenditure
Framework (MTEF)

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 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 or7
changes in policies
 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.
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 Organizational
Performance Indicator
Framework (OPIF)

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 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
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Zero-Based Budgeting
(ZBB) Approach

(Program Evaluation)
 ZBB Objectives
1. To establish the continued relevance of program objectives
given the current developments/ directions;

2. To assess whether the program objectives/outcomes are

being achieved;

3. To ascertain alternative or more effective and efficient ways of

achieving the objectives, and ultimately;

4. To guide decision makers on whether the resources for the

program/project should continue at its present level, or be
increased, reduced or discontinued.
 ZBB Criteria
1. Possible potential leakages and inefficiencies
based on COA Reports;
2. Large magnitude of funds provided;
3. Weak performance over the past years; and
4. Critical programs of the Aquino Administration.
 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. 14
Quedancorp, OP-TFs, OP-LFPs)
 Savings from ZBB from 2010
Budget (in billions)
1. Malusog na Simula Yaman ng Bansa P 3.3
2. Kilos Asenso Support Fund 1.0
3. Kalayaan sa Barangay Project 1.0
4. General Fund Adjustments 1.0
5. Capital Subscription of NG to the BSP 4.0
Total P10.3
 Programs Reviewed for FY 2012
– ZBB Progress Report
(in billions)
1. Health Facilities Enhancement Program P 5.1
2. Cheaper Medicine Program 1.0
3. Budgetary Subsidies for State Universities 23.6
4. Higher Education Development Fund 0.5
5. Teacher Deployment Program 2.9
6. New Classroom Construction Program 14.0
7. Tech-Voc Scholarships of TESDA 0.9
8. Buying/Leasing of Election Machines 8.0
9. Agri Competitiveness Enhancement Fund -
Total P56.0
 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