Peoples Budget 2013

General Solano St., San Miguel, Malacañang, ManilaTrunkline: +632 490 1000 | Website: www.dbm.gov.ph

Visit: www.budgetngbayan.com

2013 People’s Budget

Produced by the Philippine Department of Budget and ManagementSome Rights Reserved under Creative Commons BY-NC-SA 3.0 License15 March 2013

Production Team:Usec. Laura B. PascuaTraining and Information ServiceFiscal Planning BureauOSEC-Public Information Unit

Information Consolidated by:Fiscal Planning BureauBudget Technical ServiceBudget and Management Bureaus A to G

Design:Gianne Gaoiran, OSEC-PIUGraphics by Flux Design Labs

Paggugol na Matuwid sa Budget ng Bayan:Kataas-Taasang Atas ng Taumbayan

For questions, comments and suggestions, email [email protected] orcall 490-1000 loc. 6202 (Public Information Unit).

contentsI. 2013 Empowerment Budget • Paggugol na Matuwid: Atas ng Taumbayan • Summary of the 2013 Empowerment Budget • Principles and Strategies of the 2013 Empowerment Budget • Financing the Budget

II. Expenditure Priorities • Anti-Corruption and Transparent, Accountable and Participatory Governance • Poverty Reduction and the Empowerment of the Poor • Rapid, Inclusive and Sustained Economic Growth • Just and Lasting Peace and the Rule of Law • Integrity of the Environment and Climate Change Adaptation and Mitigation

III. Basics on Budgeting • The National Budget • The Budget Cycle

Glossary

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28384446

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section 1

2013empowerment

budget

7PEOPLE’S BUDGET 2013

Paggugol na Matuwid: Atas ng Taumbayan

The people are a nation’s greatest wealth. Their abundant talent and skill, their unflagging sense of national identity and cultural pride — these drive and sustain us in our campaign for genuine socio-economic progress.

The administration of President Benigno S. Aquino III recognizes the people’s inherent power and constantly assures them that these is theirs to exercise — as they did in EDSA People Power in 1986, and again when they supported and elected President Aquino in 2010.

The Aquino government has thus chosen to focus on the Filipino people’s crucial role as partners in shaping the nation’s future. With this, the government must optimize its resources to liberate the people from the shackles of poverty, and invest in their capabilities and welfare through meaningful social and economic services. As expressed in his Social Contract with the Filipino People, President Aquino knows that empowering the people as nation-builders requires transparent, accountable and participatory governance.

Moreover, the Administration has broadened its parameters in crafting the 2013 Empowerment Budget: that is, to involve as many Filipinos as it could reach in this decision-making process. In particular, it engaged members of civil society, people’s groups, and communities representing the country’s most marginalized and impoverished — people compelled by a shared vision of a more vibrant, vigorous Philippines, but whose voices have gone unheard through the years. This greater openness and deeper public engagement in the budget process stems from this realization: government cannot anymore claim to have a total mental grasp of the realities that its people face on the ground.

In crafting the 2013 Empowerment Budget, the government has, therefore, adopted the precept Atas ng Taumbayan. This reflects President Aquino’s commitment to meet the people’s most urgent needs, as well as bring them to the very center of the Administration’s agenda for rapid, inclusive, and sustainable development for all Filipinos.

These commitments are not out of the President’s generosity, but in keeping with people’s sovereign will, which they expressed resoundingly in the May 2010 Elections: for government to finally operate with only the people’s interests in mind. In other words, kung walang corrupt, walang mahirap.

8 PEOPLE’S BUDGET 2013

Summary of the 2013 Empowerment Budget

The government’s response to legitimate claims on exhaustible resources reflects its priorities and values. In recognition of the right of each individual to have a voice in shaping social policies as well in the determination of political affairs, the government based the 2013 Empowerment Budget on the results of consultations with the people who stand to be affected by it. Here, then, is the P2.0059-trillion National Budget for 2013 in a nutshell:

A government budget is a financial plan to pursue the priority programs and

projects of the government and its development thrusts.

It is a tool for economic growth through its

allocations for infrastructure, agriculture, science and

technology, and other areas that will help generate

employment and increase the country’s productivity.

It is a tool to improve human development by investing

in basic social services like education, health and social

welfare.

It is also an instrument for good governance, as

implementing agencies are accountable for the use of their given budgets by

delivering targeted results.

What is the government budget?

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012* 2013*

825.

11

867.

01

947.

55

1,04

4.83

1,15

5.51

1,31

4.61

1,43

4.15

1,47

2.98

1,58

0.02

1,81

6.00

2,00

5.90

*Approved GAA levels. All the rest are based on actual obligations.

IN BILLION PESOS

598.

71

606.

11

647.

75

734.

72 887.

71

1,04

2.40

1,15

5.28

1,17

8.73

1,30

1.02

1,48

2.90

1,67

2.00

Total Obligation Budget

Net of Interest Payments


Budget by Sector

Social Services

Economic Services

General Public Services

Debt Burden

Defense

P2.006 TRILLION

The biggest portion of the National Budget still goes to the social services sector. These include education, health care, housing and other services provided by the government to raise the quality of life of the poor and the marginalized.

The budgetary allocation for economic services has increased by an emphatic 16 percent to support the economy’s expansion in an inclusive and sustained way: that is, in a way that creates meaningful jobs and improves incomes for our people.

Meanwhile, the Budget for carrying the National Government’s Debt Burden stands at 18 percent of the total budget, down from 19.6 percent in 2012 and 22.6 percent in 2011.

The rest of the Budget will be needed to support General Public Services as well as Defense.

34.9% P699.4 B 25.4% P509.2 B

17.3% P347.3 B

18.0% P360.4 B

4.5% P89.5 B


Budget by Expense Class

CURRENT OPERATING EXPENDITURES

Personnel Services 640.6 B (31.9%)

MOOE 312.9 B (15.6%)

Subsidies to GOCCs 42.9 B (2.%)

Allotments to LGUs 241.8 B (12.1%)

Tax Expenditure Fund 26.9 B (1.3%)

CAPITAL OUTLAYS

Infrastructure and Other COs 297.1 B (14.8%)

Equities to GOCCs 2.0 B (0.1%)

Capital Transfers to LGUs 76.3 B (3.8%)

CARP Landowners’ Compensation 5.0 B (0.2%)

DEBT BURDEN

Interest Payments 333.9 B (16.6%)

Net Lending 26.5 B (1.3%)

TOTAL 2,005.9 B

Personnel Services increased by 7.9 percent to P640.6 billion to support the full implementation of the Salary Standardization Law III and the hiring of teachers, nurses and other needed public servants.

Maintenance and Other Operating Expenditures (MOOE) jumped by 17.5 percent to P313.3 billion to support the expansion of the Administration’s priority social and economic programs.

Infrastructure and Other Capital Outlays (COs) went up by 17.7 percent to P297.1 billion — from P252.4 billion in 2012 — to support infrastructure projects that are necessary for transport, tourism, and agriculture industries.

Debt Burden continues to decrease due to smart financing strategies adopted by government. In particular, the share of interest payments has decreased to 16.6 percent in 2013, from 18.3 percent in the previous year.

Subsidies and Equity for GOCCs posted a significant increase of 105.8 percent, bringing the total to P44.9 billion, due to increased allocations for infrastructure projects to be implemented by GOCCs.

LGU Shares in the National Budget also rose by 9.7 percent to P318.1 billion due to improved revenue collections in 2010, the base year for computing the Internal Revenue Allotment (IRA) of LGUs for 2013.


Budget by Region

The National Budget alloted for regions increased by 27.1 percent to P979.1 billion, accounting for 48.8 percent of the total budget for 2013. In comparison, the P770.5 billion allocation for the regions in 2011 was only 42.4 percent of the budget.

The budgetary allocations for Visayas and Mindanao rose significantly by 20.7 percent and 20.3 percent, respectively. Mindanao, in particular, has the highest per-capita National Budget at P10,990.

CAR

REGION I REGION 2

P31.38 B

P44.61 BP49.54 B

REGION 3P87.26 B

REGION 4P127.64 B

REGION 6P73.32 B

REGION 7P63.38 B

REGION 9REGION 10

P41.46 B

ARMMP41.46 B

NCRP129.63 B

REGION 5P62.16B

REGION 8P55.38 B

REGION 13P34.29 B

REGION 11B

REGION 12P42.84 B

P47.61 B

LUZON

P402.58 B

P192.08 B

P254.82 B

VISAYAS

MINDANAO

P46.75

P129.63 BNCR


Top 10 Departments* and List of Per-Department Budget

DepEdP293.36 B

DPWHP155.22 B

DILGP121.75 B

DNDP121.60 B

DAP74.76 B

DSWDP56.43 B

DoHP54.18 B

DoTCP37.08 B

DoFP33.16 B

DENRP23.71 B

DEPARTMENTS

Congress of the PhilippinesOffice of the PresidentOffice of the Vice-PresidentDepartment of Agrarian ReformDepartment of AgricultureDepartment of Budget and ManagementDepartment of EducationState Universities and CollegesDepartment of EnergyDepartment of Environment and Natural ResourcesDepartment of FinanceDepartment of Foreign AffairsDepartment of HealthDepartment of Interior and Local GovernmentDepartment of JusticeDepartment of Labor and EmploymentDepartment of National DefenseDepartment of Public Works and HighwaysDepartment of Science and TechnologyDepartment of Social Welfare and DevelopmentDepartment of TourismDepartment of Trade and IndustryDepartment of Transportation and CommunicationsNational Economic and Development AuthorityPresidential Communications Operations OfficeOther Executive OfficesAutonomous Region in Muslim MindanaoJoint Legislative-Executive CouncilsJudiciaryCivil Service CommissionCommission on AuditCommission on ElectionsOffice of the OmbudsmanCommission on Human Rights

SPECIAL PURPOSE FUNDS

Budgetary Support to Government CorporationsAllocations to Local Government UnitsCalamity FundContingent FundDepartment of Education - School Building ProgramE-Government FundInternational Commitments FundMiscellaneous Personnel Benefits FundPension and Gratuity FundPriority Development Assistance FundTax Expenditures FundDebt Service Fund - Interest Payment

1,048 B

10.71 B2.73 B

420 M21.43 B65.07 B

998 M250.41 B

34.92 B4.35 B

23.68 B30.85 B11.71 B51.91 B

92.35 B10.89 B

8.12 B80.61 B

169.33 B10.09 B56.43 B

2.81 B3.74 B

35.75 B5.08 B1.31 B

11.02 B14.06 B

2 M17.77 B993 M8.10 B8.42 B1.73 B318 M

957.77 B

71.40 B319.84 B

7.50 B1 B1 B1 B

2.64 B69.09 B98.72 B24.79 B26.90 B

333.90 B

* The amounts indicated here include the respective

departments’ allocations under the MPBF, PGF, BSGC,

and other Special Purpose Funds.


Principles and Strategies of the 2013 Empowerment Budget

This Budget pursues empowerment by creating more opportunities for public participation in governance. It invests significantly in the people’s capabilities by prioritizing funding for public services that provide jobs, educate our youth, ensure a healthier citizenry, and empower each Filipino to participate in economic activity.

The Aquino Administration followed these principles in crafting the 2013 Empowerment Budget:

Greater and DeeperCommitment to the

Aquino Social Contract

Accelerated Completion ofPriority Program Targets

Stronger GovernmentAccountability to Perform

Transparency for Faster Budget Execution and Clearer Results

Greater Stakeholder Participation in Budget Preparation and Execution


Greater and Deeper Commitment to the Aquino Social Contract

The 2013 National Budget is designed to deepen and reinforce the implementation of President Aquino’s Social Contract with the Filipino people. The Budget reflects the President’s belief that the best way to combat poverty is to establish and nurture a society founded on justice and fairness, compassion and mutual support, and concern for the environment. Such a society will not have room for corruption.

The Budget focuses government resources on the five Key Result Areas of Social Contract, as defined in Executive Order No. 43:

The Aquino Administration wants to make sure that public funds go to these priority areas. Using the Program Budgeting Approach, the Administration defined key component programs per KRA, as well as their intended outputs and outcomes, which should be prioritized in the allocation of funds. This new approach also helps government improve the coordination and collaboration between its departments and agencies.

The Zero-Based Budgeting Approach has also been used to scale down funding for activities which are not aligned with the priority programs, or which are otherwise inefficient and ineffective, and fraught with leakages. Zero-Based Budgeting requires each agency or department to justify its entire budget every year, building from a base of zero.


Accelerated Completion of Priority Program Targets

To speed up the pace of implementing and completing priority programs, government has to rethink existing structural configurations in government and introduce changes accordingly.

One of these innovations is to assign the Department of Public Works and Highways (DPWH) as the Principal Infrastructure Agency, to which all capital outlays for the construction of classrooms, rural health facilities, hospitals, and farm-to-market roads, among others, have been transferred for implementation.

This allows Agencies to Focus on Accelerating the Delivery of their Core Mandates. Social service delivery agencies like the Department of Education (DepEd), for example, will focus on improving literacy and cohort survival through the implementation of its K-12 Program; and the Department of Health (DoH) on delivering its Universal Health Care.

To speed up the implementation of infrastructure and other projects, government agencies like the DPWH have been tasked to conduct Early Procurement: meaning, to undertake bidding, short of award, even before the approval of the Genral Appropriations Act (GAA). This has allowed them to award contracts and start projects on the first day of 2013. With this innovation, the DPWH, for instance, has been able to award 84 percent of all its infrastructure projects as of 31 January 2013.

Account Management Teams (AMTs) have also been deployed to monitor the performance of agencies more closely, to speed up the delivery of priority programs and projects, to identify and address critical implementation bottlenecks, and to make sure that nothing crucial falls through the cracks. These AMTs have been deployed in nine major departments:

Department of Public Works and Highways

Department of Education

Department of Health

Department of Social Welfare and Development

Department of Agriculture

Department of Agrarian Reform

Department of Transportation and Communications

Department of National Defense

Department of Interior and Local Government


Stronger Government Accountability to Perform

The Government has brought accountability to the people to a higher level, ensuring that government transactions are done with fairness and consistency, particularly by ensuring the close linkage of plans, budgets and performance.

With this, the Empowerment Budget of 2013 deepens the practice of Performance-Based Budgeting: where each peso leads to concrete and measurable results. The system necessitates a close and careful look at performance indicators to determine the results of our work, the effectiveness of our actions, and points for improvement.

Fairness is one of the pillars of the Aquino administration’s reform platform. With this, it wants to make sure that good performers are properly awarded, be they government agencies or individual employees. To move towards this direction, the Administration is reconciling and harmonizing all disparate performance management systems in government into a single Results-Based Performance Management System (RBPMS). Through this, government will be able to monitor the performance of each agency and individual government worker based on measurable results indicators and performance benchmarks. To reward public institutions and public servants who meet or even surpass their outputs and commitments under the Aquino Social Contract, this Budget introduces a Performance-Based Incentive System (PBIS). As President Aquino has expressed in his 2012 State of the Nation Address, “simula ngayon, magpapatupad tayo ng sistema kung saan ang bonus ay nakabase sa pagtupad ng mga ahensiya sa kanilang mga target para sa taon.” Under the 2013 Budget, P9.97 billion has been allocated to fund the incentives under this new system.


How can a department qualify for the PBB? Why change the currentincentive system?

Mandatory posting of budget reports(Philippine Transparency Seal).

Liquidation of all cash advances for the year within the reglementary period.

Establishment of a Citizen’s Charter or its equivalent.

Posting of all invitations to bid, and awarded contracts in the Philippine Government Procurement Electronic System (PHILGEPS).

With the current incentive system, across-the-board bonuses are given uniformly to all civil servants.

Service delivery by the bureaucracy can be improved by linking personnel incentives to the bureau or delivery unit’s performance, and recognizing and rewarding exemplary performance.

This will motivate higher performance and greater accountability and ensure accomplishment of commitments and targets under the 5 Key Result Areas stated in EO 43.

* AO25, s. 2011 | Creating an Inter-Agency Task Force on the Harmonization of National Government Performance Monitoring, Information and Reporting Systems

Achieve at least 90% of Major Final Output (MFO) targets andPriority Program targets under Key Result Areas in EO43.1

Meet 2 to 3 Good Governance conditions or requirements set by the AO25* Task Force annually under the performance drivers of the

Results-Based Performance Management System (RBPMS).2

MFOs of agencies are measured on the basis of how the needs of the citizens are efficiently and effectively addressed by the products or services that the agency is mandated to deliver. For Example:

3 Submit reports on or before the deadline.


% of school leaverscompared to previous year


targets 2,800 healthworkersin rural areas for 2013

The incentive rates will be based on 2 factors:

Bureau/Unit ranking Employee performance appraisal

BestUpper 10th percentile

BestUpper 10th percentile

BetterUpper 25th percentile

BetterUpper 25th percentile

GoodUpper 50th percentile

GoodUpper 50th percentile

PoorLower 15th percentile

Below Satisfactory Rating

P35,000

P25,000

P15,000

P20,000

P13,500

P10,000

P10,000

P7,000

P5,000

No Bonus

PERFORMANCE-BASED BONUS


Transparency for Faster Budget Execution and Clearer Results

The Aquino administration wishes to ensure that government resources are used for their intended purposes, with scrupulous regard for the integrity of the process. The 2013 Budget asserts that transparency is an essential tool not only in preventing corruption but also in enabling the delivery of fast and clear results. The Administration sustained its policy for the Disaggregation of Lump-Sum Funds. In the past, such lump-sum funds have not only caused delays in program and project implementation, but have also been prone to abuse and corruption. Thus, in preparing the 2013 Budget, departments and agencies have been reminded to break down their proposed budgets into specific programs and projects.

With the Budget containing greater detail on programs and projects, the government will be able to Shift to a Budget-as-Release Document Regime by 2014, where the repetitive budget request and release process is eliminated. To support this new regime, the predictability of public expenditure will be strengthened through a new policy of One-Year Validity of Appropriations in 2013.

The government also continues to roll out Technological Innovations to speed up budget processes and make them more transparent. For instance, the Department of Budget and Management, the Department of Finance and the Commission on Audit are currently developing a Government Integrated Financial Management Information System (GIFMIS), which, once completed by 2016, will improve the speed, accuracy and accountability in the management of the government budget and finances.


A

B

C

DE

F

G “The respective heads of the agencies shall be responsible for ensuring compliance with this section.

“The agency’s mandates and functions, names of its officials with their position and designation, and contact information;

“Annual reports, as required under National Budget Circular Nos. 507 and 507-A dated January 31, 2007 and June 12, 2007, respectively, for the last three (3) years;

“Their respective approved budgets and corresponding targets immediately upon approval of this Act;

“Major programs and projects categorized in accordance with the five key results areas underE.O. No. 43, s. 2011;

“The programs/projects beneficiaries as identified in the applicable special provisions;

“Status of implementation and program/project evaluation and/or assessment reports; and

“Annual procurement plan, contracts awarded and the name of contractors/suppliers/consultants.

A

B

C

D

E

F

G

Philippine Transparency Seal


Greater Stakeholder Participation in Budget Preparation and Execution

The government actively sought the people’s participation in budget preparation to gain a better understanding of their needs and requirements, and ensure that these are met. Towards this direction, the government introduced the Bottom-Up Budgeting Approach, where 595 poor municipalities were tapped to identify the services they needed in a consultative process with community organizations. As a result, a total of P8.4 billion has been earmarked in the National Budget for programs and projects defined through this unprecedented process.

Agency-Civil Society Budget Partnerships were also expanded to cover 12 departments and six government firms.



Department of Social Welfare and Development

Department of Public Works and Highways

Department of Agriculture

Department of Agrarian Reform

Department of Transportation and Communications

Department of Tourism

Department of Environment and Natural Resources

Department of Labor and Employment

Department of Justice

Department of Interior and Local Government

National Food Authority

National Housing Authority

National Home Mortgage Finance Corporation

National Irrigation Authority

National Electrification Administration

Light Rail Transit Authority

Public-Private Partnerships for the Delivery of Social Services will also be tapped to speed up the construction and maintenance of classrooms, hospitals and other human development infrastructure requirements.


Financing the Budget

Macroeconomic Assumptions

With the Philippines now being hailed as the best-performing economy in Southeast Asia due to the reforms initiated by the government, observers are expecting an even better economic performance in 2013. Government is projecting a 6- to 7-percent growth in the country’s GDP in 2013. Inflation rate is maintained at 3 to 5 percent for 2013 up to 2014, while the peso is expected to remain stable against the dollar, keeping a 42 to 45 peso-dollar exchange rate for the next four years.

2011 Actual 2012 Actual 2013 Projections*

Real GDP Growth (%)

Inflation Rate (%)

364-Day T-bill Rate (%)

Exports Growth (%)

Imports Growth (%)

Forex Rates (Php/US$ 1)

3.9

4.6

2.4

43.30

-6.9

1.6

6.6

3.2

2.0

7.6

1.9

6.0 to 7.0

3.0 to 5.0

2.0 to 4.0

10.0

12.0

42.2 42 to 45

* Revised Macroeconomic and Fiscal Targets, approved by DBCC on 21 January 2013.

-

-

-

-


Fiscal Program

For 2013, the national government seeks to increase its targeted revenues to 1.75 billion, which would translate to 14.7 percent of the projected GDP for the same year. Meanwhile, disbursements are also expected to increase to almost P2.0 trillion or 16.7 percent of GDP. These support the plan to attain fiscal consolidation, as these targets will lead to a reduced fiscal deficit of 2 percent of gross domestic product (GDP), or P238 billion, in 2013.

REVE

NUE

1,35

9.9

B | 1

4% O

F GD

P

DISB

URSE

MEN

T1,

557.

7 B

| 16.

0% O

F GD

P

DEFI

CIT

197.

B |

2.0%

OF

GDP

REVE

NUE

1,53

4.9

B | 1

4.8%

OF

GDP

DISB

URSE

MEN

T1,

777.

8 B

| 17.

4% O

F GD

P

DEFI

CIT

242.

8 B

| 2.3

% O

F GD

P

REVE

NUE

1,74

5.9

| 14.

7% O

F GD

P

DISB

URSE

MEN

T1,

983.

9 | 1

6.7%

OF

GDP

DEFI

CIT

238.

0 B

| 2.0

% O

F GD

P

2011 2012 2013*




Borrowings and Debt

The national government intends to finance the projected deficit as well as maturing debts in a sustainable way, with less exposure to foreign financial market fluctuations. The gross foreign-to-domestic borrowing mix will be at 14:86 in 2013, from 35:65 in 2011. With this, the debt stock is seen to decrease to 48 percent of GDP, from 50.9 percent of GDP in 2011.

2011

65%

35%

86%

14%

2012 2013*

Foreign Borrowings

Domestic Borrowings

20114,951.2 B | 50.9% OF GDP

20125,358.8 B | 49.9% OF GDP

2013*5,716.5 B | 48% OF GDP

NG

Deb

t Sto

ck

84%

16%

section 2

expenditurepriorities


Anti-Corruption and Transparent,Accountable and Participatory Governance

Delivery of PublicServices Improved

Corruption Curbed

Business Environment Enhanced

GOOD GOVERNANCE AND ANTI-CORRUPTION

Transparency Accountability Citizen Engagement

Anti-Corruption Efforts Performance Management

Strategic objective of the Cabinet Cluster on Good Governance and Anti-Corruption Plan 2012-2016

Pillars of open government


Digitization of Financial Processes

To step up the administration’s drive to curb corruption and promote transparency and accountability, P238 million is allotted to digitize financial processes in government. This fund will support the development of a centralized payroll system for government agencies; and an integrated financial management information system, which enables the government to effectively manage its fund allocations, maintain fiscal discipline, and deliver services effectively.

The BIR and the BOC are allotted a combined P6.5 billion to carry out programs to ensure tax compliance and enforcement, as well as enhanced revenue collections. In addition to this amount, P6.3 billion in automatic appropriations is allotted for tax refunds under the enhanced revenue collection program.

Revenue Administration Reform

• Integrated Tax Compliance and Enforcement Efforts | BIR P4.4 B• Enhanced Revenue Collection | BOC P2.1 B

• National Payroll System | DBM P72 M• Government Integrated Financial Management Information System (GIFMIS) | DBM P67 M• Cash and Treasury Management System | BTr P30 M• PKI, e-Serbisyo, e-Bayad and GDC | (DOTC-ICTO) P42 M• Philippine Research, Education and Government Information Network (PREGINET) | DOST P27 M

The abuse of privileges in public office to gain personal profit inevitably leads to the rise in the incidence of poverty and inequality. This Administration has been consistently battling corrupt practices through increased transparency in governance. The more transparent governance is, the more people will want to participate in it, and the more the public will hold public officials accountable.


The year 2013 will mark the strengthening of certain government institutions with the help of funds that will make them more capable in giving better services to the people.

Strengthen Institutions and Democratic Practices

• E-passport Project | DFA P1.9 B• Adjudication of Cases (Graft and Corruption) | Sandiganbayan P392 M• Witness Protection Services | DOJ P184.6 M• Local Government Capacity Building | DILG P1.7 B• Local Governance Performance Management Program | DILG P1 B• Performance-Based Incentives | NGAs, GOCCs P9.9 B

Clean and Fair Elections

Democracy can work only if elections are free, clean, and therefore credible. Learning from numerous controversies and irregularities that marred local and national elections in the past, the government is firm in its resolve to have free, orderly, honest, and peaceful elections in 2013. For this, P8.4 billion has been set aside for the Commission on Elections’ (COMELEC) operations before, during, and after the elections.


Poverty Reduction and Empowerment of the Poor and Vulnerable

Once rescued, government invests in them through:

3

4

2

1

To ensure that resource go directly to the poor, the government will use theNational Household Targeting System, a comprehensive inventory ofindigent households and other families in vulnerable situations.

Ultimate goal: give the poor better quality of life and more access toeconomic opportunities. Target: reduce poverty incidence by 16% andmeet MDGs.

Rescue the extreme poor who are drowningin poverty through social protection packages, such as the Conditional Cash Transfer (CCT).

PA N T A W I D PAM

ILYANG PILIP

INO

Highest budgetary allocation:not only more classrooms andteachers but also a betterdelivery system (e.g., K-12).

Through health insurancecoverage, more doctors, nursesand caregivers, more accessiblehealthcare facilities, etc.

Public Healthcare Investments

Investments to improve quality of life (affordable housing, agrarian reform, potable water, rural electrification, etc.)

Quality Education


For 2013, government will arm the disadvantaged with increased investments in social protection, providing not just financial assistance but also opportunities to enhance livelihood skills so they become more self-reliant, and, in the process, gain confidence,in themselves as well as in the government.

Pantawid Pamilyang Pilipino Program (4Ps) – The conditional cash transfer program provides incentives for poor families to invest in their future, ensures that mothers and children avail of healthcare, and that children go to school. It is a human development program that invests in the health and education of children. The monthly cash grants of as much as P1,400 also provide immediate relief from cash flow problems. Such extra cash, received every two months, is especially important for poor households that have irregular income. For this program to benefit the targeted 3.8 million households, DSWD has been provided with P44.3 billion in 2013.

Social Protection: Cover all indigent households under 4Ps by 2016

Poverty brings about a sense of powerlessness, which causes frustration and despair, which leads to even more poverty. This vicious cycle has to end; thus, the government seeks to rescue the poor who are drowning in the morass of poverty through social protection packages, such as the Conditional Cash Transfer (CCT). But government’s work doesn’t stop with giving these life vests, as it should invest in capacitating them and their children to participate meaningfully in the economy. This is done through quality basic education, public healthcare and affordable housing.

P1,400

Under the 4Ps, indigent households receive a conditional cash transfer (CCT)of as much as P1,400 per month, on condition that:

Children go to school and attend at least 85 percent of their classes.

Children receive regular immunization.

Mothers avail of maternal healthcare services.


A family who is registered in NHTS (i.e., pre-qualified) is enrolled into 4Ps. 1

Checks are directly deposited to government depository banks, rural and other thrift banks accredited by BSP, and other means of remittance accessible to beneficiaries. DSWD employees, CCT secretariatmembers and LGU officials are not allowed to directly handle the cash grants.

3

The grant is maintained when:4

The family is given a maximum monthly cash grant of P1,400, broken down into: 2

P1,400

P1,400Health & Nutrition Grant

P300 per child for a maximum of 3 children, for families with children aged 6-14 enrolled in school

Education Grant

A. Health & Nutrition GrantMothers avail of pre- and post-natal care starting on the 1st trimester of pregnancy;

Civil society organizations, non-government organizations, people's organizations, faith-based groups participate in the program to conduct social audit; to ensure that beneficiaries fulfill the conditions and to monitor progress.

5

Children avail of regular preventive health check-ups and vaccines.

B. Education Grant

DepEd DoH

Children attend at least 85 percent of classes

CSO NGO PO Church Groups

Supply side is ensured by:6

classrooms rural health facilities

vaccines healthcare workers

teachers learning materials

BANK

P500 per household

4Ps Implementation


4Ps Budget and Beneficiaries

2007

2008

2009

2010

2011

2012

2013

0.05 B

6,000 Beneficiaries

1.27 B

337,416 Beneficiaries

6.61 B


10.93 B


39.45 B

2.3 M Beneficiaries

21.19 B

3.1 M Beneficiaries

44.26 B

3.8 M Beneficiaries


Social Pension for Indigent Senior Filipino Citizens provides the Philippines’ indigent elderly a monthly cash assistance of P500, as mandated by Republic Act 9994, the Expanded Senior Citizens Act of 2010. The priority beneficiaries of the Social Pension are senior citizens 77 years old and above who are frail, sickly, and disabled; without a regular source of income or support from any member of the family; and not receiving other pension benefits from the government and private agencies. DSWD, the implementing agency, shall extend this assistance to 232,868 senior citizens with P1.5 billion.

Self-Employment Assistance-Kaunlaran (SEA-K) aims to enhance the socio-economic skills of poor families so they can establish and manage sustainable community-based micro-credit organizations for entrepreneurial development. Eventually, this livelihood and capability building program, implemented through local government units, will uplift the poor but economically active to rise above the poverty level. The 2013 Budget provides P1.5 billion for this program, which stands to benefit 128,355 families.

P2.9 B 120 school days/6 months

1.7 M children

Supplemental Feeding Program – Under this program, day care children are given healthy meals for 120 school days, which is equivalent to six months. These meals are expected to provide one-third of the recommended energy and nutrient intake needed by children. The program aims to mitigate hunger, improve the nutritional status of children, and complement feeding programs initiated by local government units in day care centers. Parents or guardians of the children-beneficiaries are obliged to take part in the program: they help prepare the meals and attend parent effectiveness and home care sessions to enhance their knowledge, attitude and skills in nutrition and food preparation. The 2013 Budget allocates P2.9 billion to benefit 1.7 million children in daycare centers.


Kapit-Bisig Laban sa Kahirapan - Comprehensive and Integrated Delivery of Social Services (KALAHI CIDSS) is a community-driven development program that encourages ordinary citizens to determine their own community needs; and then plan, develop, carry out, manage, and sustain projects to fight poverty. Through this program, they become active partners of the administration in local governance. To implement this project in 3,404 barangays, the DSWD will deploy P497 million.

3,404 barangays

potable water systems foot paths bridges roads

health facilities day-care centers classrooms


Empowering the poor begins with quality education. Education gives people more options and opportunities, reduces poverty, and gives a stronger voice to those who would otherwise remain unheard. It creates a dynamic workforce and well-informed citizenry able to compete globally, thereby paving the way to economic prosperity. In line with this, the Aquino administration has taken bold steps in reforming the education sector as well as in providing the resources needed to address lingering shortages—in teachers, classrooms, learning materials, among others—that should be closed by 2013.

Education: Close all education resource gaps by 2013 to support K-12 Reform Program

2003

2004

2005

2006

2007

2008

2009

2010

2011

*201

2

*201

3

106.

7 B

106.

0 B

108.

2 B

119.

3 B

139.

9 B

155.

7 B

171.

7 B

191.

1 B

219.

1 B 23

8.8

B 293.

4 B

129.

0 B

128.

8 B

131.

2 B

144.

2 B

167.

4 B

186.

6 B

208.

7 B

225.

1 B

254.

4 B 30

0.0

B 330.

2 B

*Figures for 2012 and 2013 are based on approved appropriations, while the rest are based on actual obligations. The 2012 and 2013

b udgets for DepEd include allocations from the Miscellaneous Personnel Benefits Fund and the School Building Fund.


Education, Culture andManpower Development Subsector


K-121

a

b

In-depth specialization for students based on the occupation/career they wish to take: Science and Technology, Music and Arts, Agriculture and Fisheries, Sports, Business and Entrepreneurship.

Structure:

Senior High School

Junior High School

Elementary

Implementation

Grade 1 and Grade 7(First batch to startK to 12 education)

Grade 2 and Grade 8

Grade 3 and Grade 9

Grade 4 and Grade 10

Continued consultation with stakeholders throughout the process

2012-2013

2013-2014

2014-2015

2015-2016

Grade 5 and Grade 112016-2017

Grade 6 and Grade 12(First cohort of K to 12Grade 6 and Grade 12 Graduates in 2018)

2017-2018

2 Addressing resource gaps in Basic Education: more and better-trained teachers, more classrooms with complete facilities, more and better learning materials.

Aligning tertiary and vocational education with the five priority areas for economic growth and employment generation:agriculture, tourism, infrastructure, semiconductor and electronics, and BPO.

3

Reforms in SUCs: amalgamate SUCs into a few centers of excellence; align curricula to be responsive to economic growth.

4


Textbooks and Instructional Materials – The 2013 Budget provides P1.5 billion for the procurement of 31.1 million textbooks and teacher’s manuals that complement classroom learning experience and enrich instructors’ knowledge-sharing skills.

Government Assistance for Students and Teachers for Private Education – To improve access to basic education and to help decongest public schools, the government, through DepEd, has made P6.9 billion available to 1 million students under the Government Assistance for Students and Teachers for Private Education (GASTPE).

Universal Kindergarten – As part of the government’s Education for All campaign to help meet the United Nation’s Millennium Development Goals on education, the amount of P1.6 billion is marked off for the DepEd to implement Universalization of Kindergarten Education to benefit 66,203 students.

Hiring of Teachers – the Department of Education (DepEd) will close its teacher supply gap by hiring 61,510 more teachers in 2013. The 2013 Budget supports this by allocating P13.4 billion for the creation of these additional teaching positions. DepEd will also deploy P670 million to recruit 3,500 non-teaching personnel who will provide the necessary support to faculty.

Construction and Rehabilitation of Classrooms – to close the classroom supply gap by 2013, the DepEd, together with the Department of Public Works and Highways (DPWH) will be deploying a total of P26.3 billion to construct or rehabilitate more than 31,000 classrooms and make other school facilities available for students.

• Basic Educational Facilities P25.2 B • School Building Program | 17,638 classrooms | DPWH P14.1 B • Repair/Rehabilitation of Classrooms | 3,850 classrooms | DepEd P1.1B • Construction of Water Sanitation Facilities | 90,461 facilities | DepEd P5.4 B • School Furniture Program | 639,185 seats | DepEd P575 M • PPP Amortization | 9,301 classrooms, 446,448 seats | DepEd P4 B• DepEd School Building Program (Regular) | 1,000 classrooms P1 B


Health is at the core of the national agenda and an important factor in achieving a strong sense of national well-being. This is why the Aquino Administration is committed to its universal healthcare agenda: Kalusugang Pangkalahatan. It is a commitment to provide quality and universal health care programs for more Filipinos, keeping them healthy and better-equipped to contribute to the country’s development.

Universal Healthcare: Provide health care insurance to poor households

2003

2004

2005

2006

2007

2008

2009

2010

2011

*201

2

*201

3

9.9

B

11.1

B

10.5

B

10.7

B

13.6

B

14.7

B 21.3

B 25.3

B

30.8

B

45.8

B

54.2

B

12.4

B

14.5

B

13.9

B

16.1

B

18.2

B

18.6

B 23.4

B 31.0

B

40.5

B

50.6

B

57.7

B


Health Subsector

* Figures for 2012 and 2013 are based on approved appropriations, while the rest are based on actual

obligations. The 2012 and 2013 budgets for DoH include allocations from the Miscellaneous Personnel Benefits Fund.


Housing: Provide decent housing to informal settlers

The Aquino Administration addresses the continuing demand for affordable housing units in response to the increasing population and household size, both in the urban and rural areas. A decent shelter is one of the basic human needs, and the government is committed to providing the masses with quality and affordable shelter. Affordability factors in low income levels, inadequate supply of desired units and limited accessibility to home financing packages. To address these issues, the government allocates P20.8 billion for various housing programs.

• Resettlement Program | 33,000 households P4.9 B• Settlements Upgrading Program | 2,973 households P128 M • Housing Resettlement | 20,000 Informal Settler-Families P10.1 B• AFP/PNP Housing Project | 20,000 families P5.6 B• Community Mortgage Program | 30,000 poor urban households in depressed areas P1 B

Health Facilities Enhancement Program – The Aquino Administration is committed to close the rural health facility gap by 2013. The 2013 Budget supports the immediate rehabilitation and construction of 2,243 rural health units and 403 district hospitals, with a budget of P13.6 billion. This amount a 167-percent increase from the P5.1-billion allocation for the program in 2012.

Healthcare Insurance Premium Subsidies – The 2013 Budget sets aside P12.6 billion to provide 5.2 million households with premium subsidies to the National Health Insurance Program. Moreover, the additional revenues from the newly-approved Sin Tax Reform Law (Republic Act No. 10351) can support the deployment of P13.6 billion in Unprogrammed Appropriations for premium subsidies for an additional 5.6 million households in the informal sector.

Addressing the Health-Related Millennium Development Goals (MDGs) – the 2013 Budget also supports programs to be implemented by DoH that will support the achievement of the health-related MDGs:

• Doctors to the Barrios Program | 131 doctors, 22,500 nurses, 4,379 midwives P2.8 B• Expanded Program on Immunization | 2.6 million children P1.9 B• Tuberculosis Treatment | 46,694 cases P1 B • National Pharmaceutical Policy Development | 1,377 LGUs, 160 hospitals P1 B• Elimination of Diseases as public health threats P507 M• Infectious Diseases and emerging diseases P321 M • ARV treatment | 6,056 HIV infected people• Family Health and Responsible Parenting P2.5 B


Rapid, Inclusive and Sustained Economic Growth

RA

PI D

I N C LUS

I VE

S U S T A I N E D

Agriculture and Fisheries Development

Economic Growth

Growth must create opportunities for all, especially the poor

Economy salvaged from boom-and-bust cycle

GDP must grow by 7 to 8 percent

annually

Rapid, inclusive and sustained economic growth must be achieved:

Priority Areas for Economic Development and Job Generation, including:

Critical Interventions by Government

Semiconductor and Electronics Manufacturing

General Infrastructure

Business Process Outsourcing

Tourism Development

Ensuring a stable macro-economic environment and fair competition

Investment in infrastructure, including Public-Private Partnerships

Investing in Rice and Food Self-Sufficiency

Aligning tertiaryand vocationalcurricula topriority economicdevelopment andjob creationsectors

1

2

3


With the economy doing better than expected after the domestic economy grew by an astounding 6.6 percent in 2012, the outlook for 2013 remains positive. However, the Administration acknowledges that its main economic challenge from 2013 to 2016 is to ensure inclusive growth—to ensure that each expansion of the economy leads to more jobs and better incomes. Economic growth has to benefit everyone, regardless of faith, income bracket, ethnic origin, age, or physical limitation.

The Aquino administration takes on the challenges posed by the country’s archipelagic nature, by building more and better roads and bridges and providing more efficient transportation to connect its many islands and its people. Mobility is crucial to economic development: people need to get to work, and goods need to move from farms to markets. To sustain the momentum of economic growth, the government seeks to pave all primary roads by 2014, secondary roads by 2016, and make quicker and more reliable transportation available to the Filipino public.

Transport Infrastructure

DPWH is the implementing agency for the following projects:

• Asset preservation based on Highway Development and Management (HDM-4) P22.1 B• Road Upgrading using HDM-4 P26.2 B• Routine Maintenance P4 B• Traffic Decongestion P17.3 B• National Bridges P7.8 B• Foreign-Assisted Projects P15.7 B • Automatic Appropriations - Motor Vehicle User’s Charge P13.3 B • Routine maintenance P3.3 B • Preventive Maintenance P7.2 B• Flood control P12.4 B• Public-Private Partnership Strategic Support Fund P3 B• Right-of-Way P3 B

DOTC will work on the following projects:

• Central Roll-On/Roll-Off Project P800 M• Northern Integrated Bus Terminal System P400 M• Southern Integrated Bus Terminal System P800 M• Bus Rapid Transit System for Cebu City P975 M• Road Transport IT Infrastructure Program P1.3 B• Access Roads to Airports/Seaports/Transport Terminals P2 B• LRT Line 1 South Extension P3.8 B• LRT Line 2 East Extension P2 B• MRT 3 Operation and Maintenance P1.1 B• Subsidy for MRT 3 P5.1 B• Rehabilitation and strengthening of PNR Main Line South P359 M


Food self-sufficiency means being able to meet the country’s food consumption needs, particularly for staple food crops, from own production instead of resorting to importation. The 2013 Budget will focus on expanding the production and extension support and post-harvest facilities to farmers, with a focus on rice, corn, coconut products, and fish. It will also seek to increase the number of irrigation systems and farm-to-market roads that will support the sector.

Agriculture: Rice and Food Self-Sufficiency by 2013

• Rice Production | 20 M metric tons | DA P7.4 B• Corn Production | 8.4 M metric tons | DA P1.5 B• Fisheries Program | 5.4 M metric tons | BFAR P3.7 B• Coconut Program | 3.13 M metric tons | PCA P1.7 B• Irrigation System | generate 51,503 ha. service area, restore 39,750 ha. service area, rehabilitate 102,795 ha. service area | NEA P27.3 B • Farm-to-Market Roads | 887.5 kms. | DA, DPWH P7.1 B• Procurement of Domestic Palay | 250,000 metric tons | NFA P4.2 B• USPL 480, a soft commodity loan from the US | DA P851 M• Rice Research | Philippine Rice Research Institute P532 M• Crop Insurance | 251,762 farmers | Philippine Crop Insurance Corporation P1.2 B• Credit Assistance | Agricultural Credit Policy Council P1 B

Comprehensive Agrarian Reform Program

The 2013 Budget pushes for the successful implementation of the Comprehensive Agrarian Reform Program (CARP) by 2014. A truly effective agrarian reform program, to be true to its name, must fit into a broader policy aimed at reducing poverty and establishing a favorable environment for agricultural development. Under the 2013 Budget, the acquisition and distribution of land, as well as the necessary support for CARP beneficiaries, will be funded, as follows:

• Land Aquisition and Distribution P13 B • DAR P7.1 B • DENR P608 M • DOJ P255.8 M • LBP P5 B • Agrarian Justice Delivery • 174,373 agrarian cases settled | DAR P365 M• Program Beneficiaries Development P5.7 B of which, • 2,083 ARCs / 5,018 ARB organizations supported | DAR P2.3 B • 1,765 ha. of irrigation service areas | NIA P150 M • 119 sites / 6.654 ha. of uplands covered | DENR P150 M


Tourism has contributed greatly to the growth of the economy. It enhances the country’s economic landscape and helps in generating jobs and business opportunities for many Filipinos. To keep this momentum and to meet the Administration’s goal of ushering in 5.5 million tourist arrivals by 2013 and 10 million tourist arrivals by 2016, the National Budget includes appropriations for:

Tourism Development

• Construction, Widening, Upgrading of Access Roads to Declared/Strategic Tourist Destinations | DPWH P12 B• Airports, Ports, Wharves, New Airport Development Projects, Tourism Support Services | DOTC P872 M• Branding Campaign | DOT P1 B• Machine-Readable Ready Visa | DFA P26 M• Smooth Entry of Foreign Visitors | BOC P182 M• Restoration of Heritage Sites | National Historical Commission P128 M

Rural Electrification

The Aquino administration aims to put more barangays and sitios on the grid through a P6.3-billion electrification program. Rural electrification is undertaken with the ultimate goal of achieving socio-economic growth of the marginalized sectors, the fisherfolk and farmers living in remote and unelectrified areas of the country. More households in far-flung communities will then have the benefit of electric services, which will yield more opportunities for improved quality of life, greater access to basic services and better infrastructure for rural development.

• Household Electrification Program | 7,500 households | DOE P130 M• Sitio Electrification Program | 3,676 sitios | NEA P3.8 B• Barangay Line Enhancement Program | 600 barangay lines | NEA P1.5 B• Small Power Utilities Group | 256 SPUGs | NPC P969 M


Micro, Small, and Medium Enterprises (MSMEs) are engines of growth. Together, they make up 99.6 percent of all registered firms in the country and employ 70 percent of the labor force. Supporting MSMEs to create more value and job opportunities furthers national growth. To support MSMEs, P1.5 billion will be used to set up service facilities for entrepreneurs that will speed up the process of setting up a business. One-stop shops will be set up for business registration, licensing and export documentation, giving them better access to technology and improving their global competitiveness. They will also be provided with sustainable market development and promotion.Development of technological human resources will enlarge the pool of skilled men and women who can contribute

Support for MSMEs

to job creation and national growth. The 2013 Budget pushes for the strengthening of tertiary and technical-vocational education to develop a globally competitive human resource pool for priority industries. The total budget for state universities and colleges (SUCs) will increase by 44 percent to P37.1 billion in 2013, not only to provide for the maintenance and capital outlay needs of SUCs but also to support the implementation of the Roadmap for Higher Education Reform 2011-2016. Meanwhile, the programs of the Technical Education and Skills Development Authority (TESDA) will receive P3.1 billion in 2013.

• Shared Service Facility | create 50 MSMEs, assist 750 existing MSMEs | DTI P770 M • Small Enterprise Technology Ugrading (SETUP) | DOST P500 M• Business Licensing Facilitation and Investment Promotion | DTI, BIR, SSS, PhilHealth, Pag-IBIG, DOLE, DENR, DILG P136 M• One Town One Product (OTOP) Program | DTI P23 M• National Industry Cluster Capacity Enhancement Project (NICCEP) | DTI P 70 M

Align Vocational and Tertiary Education to Support PriorityIndustrial Development and Job Generation


Just and Lasting Peace and the Rule of Law

Poverty is both a product of and a critical factor in armed conflict. Conflicts must be resolved through honest andsincere peace negotiations, along with anti-poverty and economic interventions for conflict-ridden communities.

As the country’s national security transforms due to geopolitical concerns, and as the government moves toresolve long-running insurgent and secessionist conflicts through political settlement, government muststrengthen the capacity of the military to protect the country’s borders.

The Administration intends to improve its prosecution rate, especially in cases that severely threaten orundermine the security of the public, like drugs, human trafficking, extra-judicial killings, and humanrights violations.

Reforms that strengthen the judicial, law enforcement and military institutions through transparencyand accountability must be pursued.

1

2

3

4


President Aquino believes that in order to effectively promote good governance, reduce poverty and spur economic growth, national security, justice and peace must be established.

With this, President Aquino has defined the pursuit of security, justice and peace as a priority area of his Social Contract. This entails the negotiated political settlement of armed conflicts alongside efforts to address the needs of the vulnerable; the protection of national security alongside the promotion of human rights; and the strengthening of the rule of law through judiciary and enforcement reform.

Support for the Attainment of Lasting Peace and Development

With the signing of a framework peace agreement between the government of the Philippines and the Moro Islamic Liberation Front (MILF), the government is now working toward lasting peace, stability, and development in the community. Through the following programs, the government seeks to deliver the dividends of peace.

PAyapa at MAsaganang PamayaNAn – PAMANA is the government’s program and framework to peace and development, is focused on fostering peace in areas affected by conflict as well as communities covered by existing peace agreements. Through PAMANA, conflict-prone communities comprised of 4,943 LGUs will receive P5 billion in 2013 through the joint efforts of DILG (P1.6 billion), DA (P1.5 billion), DSWD (P1.5 billion), DAR (P208 million), DOE-NEA (P150 million), DENR (P93 million), PhilHealth (P16 million), and CHED (P2 million). The fund will be used to stimulate infrastructure growth and socioeconomic development to attain lasting peace in the area.

P5 B DILG | P1.6 BDA | P1.5 BDSWD | P1.5 BDAR | P208 MDOE-NEA | P150 MDENR | P93 MPhilHealth | P16 MCHED | P2M


ARMM – The government has set aside P14.06 billion for the Autonomous Regional Government in Muslim Mindanao. This budget will, among others, be invested in various social services (basic education and health), and economic services (particularly infrastructure, agriculture, and fisheries) that are needed to support the development of the region.

Basic, Technical/Vocational Education | P7.8 BInfrastructure Program | P1.5 BProvision ofHealth Services | P839 MAgriculture, Agrarian Reform and Environment | P769 MOffice of the RegionalGovernment | P833 MOthers | P2.4 B

Modernization of Security Forces – The 2013 Budget supports the upgrading of the country’s security and defense capabilities toward a stronger and more modern Filipino military. It provides P5 billion for the AFP Modernization Program to boost the readiness level of the military. Meanwhile, P2 billion is earmarked for the PNP modernization program.

To strengthen the justice system, there is a need to ensure that criminals get the punishment commensurate to their crimes, and in the shortest possible time. For this reason, P17.8 billion is set aside to enable the Judiciary to pursue 324,434 cases (309,721 cases with the Supreme Court; 14,928 with Court of Appeals; and 415 cases in the Court of Tax Appeals). P2.9 billion has been marked off to fortify investigation and prosecution services of the Department of Justice and resolve 291,550 cases. P5.8 billion has been budgeted in favor of the BJMP to improve its Jail Management and Penology Program.

Uphold the Rule of Law and Strengthen the Justice System

P14.06 B


Integrity of the Environment andClimate Change Adaptation and Mitigation

Implement climate change adaptation and mitigation measures,

improve planning and capacity to deal with climate change

through technology, promote renewable energy and energy

efficiency, audit compliance to environmental laws.

1

Ensure the utilization of natural resources for the equal benefit of the

present and future generations, expand and protect forest cover and

promote agro-forestry, improve water management, provide integrated

management and support services to agriculture and fisheries, distribute

lands.

2

Promote alternative and inclusive urban development plans which ensure

healthy and safe communities, long term and comprehensive urban

development plans, improve solid waste management, ensure clean water

and air, urban beautification, improve housing conditions.

3

Undertake all measures necessary to prepare

for and manage natural and man-made

disasters through disaster risk assessments,

effective monitoring systems and facilities,

improved institutional capacity for disaster

risk management and other preventive

measures.

4


The poor are most vulnerable to the effects of climate change. Year in and year out, natural disasters have dealt billions of pesos in damage and claimed the lives of millions of Filipinos. This is why the Aquino Administration treats climate change adaptation and mitigation, along with securing the integrity of the environment, as a priority area og the Social Contract with the Filipino people.

Bolster the Resilience of Communities to Climate Change

The National Greening Program will be on its third year of implementation in 2013. An allocation of P5.9 billion will make possible the production of 150 million seedlings and the greening of 300,000 hectares of land. The Forest Protection Program has an allocation of P1 billion for the protection of 4.7 million hectares of untenured forestlands.

The Mines and Geosciences Bureau has been tasked to undertake the Geohazard Assessment and Mapping Program with a budget amounting to P299.7 million, to conduct an impact analysis of coastal geohazard and climate change in 548 municipalities. The National Mapping and Resource Information Authority, on the other hand, takes charge of Unified Mapping, for which P1.5 billion has been set aside to cover 5.4 hectares worth of aerial photography and satellite images. The National Operational Assessment of Hazards (NOAH) is conducted by the Department of Science and Technology, with a P500-million budget. On the other hand, three (3) esteros are set to be rehabilitated and developed by the Pasig River Rehabilitation Commission, with the help of a P360 million allocation.


Preparedness for Calamities

With climate change wreaking havoc on the environment, the amount of damage brought on by typhoons and floods has not only increased but has also become unpredictable. Flood Control Systems need to be improved. With the amount of P554 million set aside for the construction of one (1) pumping station, the Metro Manila Development Authority can implement this. Finally, the Department of Energy leads the implementation of the e-Tricycle project, which seeks to replace some conventional tricycles with e-trikes over the next four years. P3.1 billion has been allocated for 20,000 e-Trikes to participating LGUs to help reduce dependence on oil and ease air pollution.

The 2013 Budget sets aside a total of P7.5 billion for the Calamity Fund, which the government will use for relief activities in, and the rehabilitation of, areas ravaged by calamities.

Moreover, the 2013 Budget allocates P3.9 billion for Quick Response Funds, standby funds that implementing agencies such as DSWD, DepEd, DPWH, DND-CD, and DA can immediately tap for assistance to calamity victims and other disaster response activities.

Meanwhile, P621 million is earmarked for the National Housing Authority to implement Emergency Housing Assistance Program for Calamity Victims, with a target of 3,357 beneficiaries.

section 3

basicson

budgeting


The National Budget

The National Budget is the financial expression of approved government plans and programs to be supported by government revenues. Budgeting enables the government to manage its scarce financial resources to support priority programs and projects for promoting economic growth and providing public services. In other words, it is in budgeting where the government puts its money where its mouth is.

COVERAGE

COMPONENTS

The National Budget consists of the government’s estimated income and planned expenditures in a given year.

The government’s income is composed of taxes (income tax, value-added tax, etc.) and non-tax revenues (fees and charges, privatization proceeds, etc.)

Meanwhile, expenditures include programs, activities, projects, purchase of goods and services, among others, that the government will spend on to achieve its socio-economic development objectives.

When the government’s income is insufficient to finance expenditures, government incurs a fiscal deficit. In this situation, government resorts to borrowing from domestic and foreign sources.

The National Budget covers the totality of the budgets of national government agencies — not only those of the Executive branch, but also of Congress, the Judiciary and other Constitutional bodies.

It also covers the budgetary support given by the national government to local government units (LGUs), in particular, the Internal Revenue Allotment (IRA); as well as to Government-Owned or -Controlled Corporations (GOCCs) and government financial institutions (GFIs).

INCOME, EXPENDITURES, DEFICIT

The National Budget for a given year is composed of the following:

1. New General Appropriations – Legislated by Congress and enacted by the President every fiscal year

ANNUAL PREPARATION,THREE-YEAR PERSPECTIVE

The Philippine Constitution requires the President “to submit to Congress, within 30 days from the opening of every regular session as the general appropriations bill, a budget of expenditures and sources of financing, including receipts from existing and proposed revenue measures.”

The annual preparation of the National Budget also ensures that all government spending is reviewed and justified anew each year. Even so, the government also adopts a three-year perspective. This ensures that the National Government remains strategic in managing its resources.

as the General Appropriations Act (GAA). The GAA enacts both programmed and unprogrammed general appropriations.

a. Programmed appropriations – supported by corresponding sources of revenue.

b. Unprogrammed appropriations – can only be executed when the government attains a revenue windfall (i.e., above target).

2. Automatic Appropriations – Under specific laws, certain types of expenditure (e.g., debt interest payments, LGUs’ IRA) are automatically set or appropriated.

3. Continuing Appropriations – Appropriations previously enacted by Congress in the previous year’s GAA and which continue to be valid. Currently, appropriations for capital outlays and maintenance and other operating expenditures have a validity of two years.


With this, the budget is also affected by internal and external economic factors, such as gross domestic product (GDP) growth,

inflation, interest rates and foreign exchange.

In other words, a vibrant domestic economy, with more people getting employed and businesses earning more, generates higher revenues from taxes. On the other hand, in times of economic crises or when the economy slows down, government

Revenues, Disbursements and Macroeconomic Factors

Under the budget, expenditures are fi nanced by government

Individual and corporate income taxes

Value-Added Tax (VAT) on the sale of goods and services

If estimated revenues are not enough to fi nance planned expenditures, the

government incurs a fi scal defi cit.

To fi ll in the gap, the government borrows money either from foreign sources as well as from the domestic capital market. This increases the debt stock of the national government and its annual debt servicing requirements.

Tax Revenues Non- Tax Revenues

Motor Vehicle Tax, Travel Tax and Sin Tax

Fees, charges, and other

collections of government

in exchange of services it

rendered or as penalties imposed

Proceeds from the

privatization of

government assets as well as grants are

also non-tax revenues.

Special Taxes such as

Tax Revenues

Automatic Appropriations

Programmed New

Appropriations Non-Tax Revenues

Deficit

Government expenditure

OtherRevenues

BorrowingsTaxes

Imports

InflationGDP

Interest Rates

Foreign Exchange

REVENUE EXPENDITURE

NationalBudget

Economy


PUBLIC EXPENDITURE MANAGEMENT: NOT JUST PESOS BUT RESULTS

The National Budget is not only about money: more important, it should be viewed as a tool that enables government to achieve its socio-development agenda. With this, DBM has initiated reforms towards effective Public Expenditures Management (PEM): an approach that ensures resource allocation is results-based, and that government is accountable for its performance.

Medium-Term Expenditure Framework (MTEF) – This tool helps government link policy, planning and budgeting over the medium-term. Under this framework, DBM employs a three-year rolling budget approach. This consists of a top-down allocation of resources based on macroeconomic projections and strategic priorities, matched against forward estimates on the costs of agency programs, activities and projects.

Organizational Performance Indicator Framework (OPIF) – This links government expenditure priorities with desired outcomes and agency performance. Under this framework, agencies align their Major Final Outputs (MFOs) – goods and services delivered through the implementation of programs, activities, and projects – with societal goals and organizational outcomes. Performance indicators are set, monitored and counter-checked against agency commitments and resources.

Zero-Based Budgeting Approach (ZBB) – This approach involves the close review and evaluation of major ongoing programs and projects, to determine if these are still relevant given current developments and if these meet desired outcomes. This process provides guidance to making decisions to increase or decrease resources allocated for these programs and projects, or if these should be continued at all.

PEM seeks to achieve the following objectives:

Aggregate Fiscal Discipline

Allocative Efficiency

Operational Efficiency

Government must spend within its means. Resources should be used in a planned and deliberate medium-term strategy.

Government must spend on the right priorities. Spending should be aligned with socio-economic priorities, as spelled out in the Philippine Development Plan.

Government must ensure the best value for the people’s money. All public goods and services must be provided at the most reasonable cost.

PEM has three pillars


The BudgetCycle

Preparation

Legislation

Execution

Accountability

These four phases of thebudget cycle overlap

in continuing cycles everyyear. For instance, while

the Executive implementsthe budget for the current

year, it also preparesthe budget for the nextfiscal year or defends

it before Congress.Meanwhile, the execution

and accountabilityphases are implemented

simultaneously year-round.

BEDARP

ABM SARO

OBLIGATIONS

Start Here Budget CallDec-Jan of prior FY

Budget PriotiyFrameworkApr of prior FY

Technical BudgetHearings

Apr-May of prior FY

ExecutiveReview

Jun of prior FY

Consolidation,Validation and

ConfirmationJun of prior FY

Presentation to thePresident and Cabinet

Jun of prior FY

President’sBudget

Jul of prior FY

HouseDeliberations

Aug-Oct of prior FY

SenateDeliberations

Sep-Nov of prior FY

BicameralDeliberations

Nov-Dec of prior FY

Ratification andEnrolment

Dec of prior FY

President’sEnactment and Veto

Dec of prior FY

Release Guidelinesand ProgramDec of prior FY

Budget ExecutionDocuments

Jan-Feb

Allotment and CashRelease Programming

Jan-Feb

Allotment Release Jan & thru FY

IncurringObligations Thru FY

AllocationThru FY

DisbursementThru FY

PerformanceTargets & OutcomesJan-Feb

BudgetAccountability Reports Monthly/Quarterly

Quarterly AgencyPerformance ReviewQuarter/Semester

Year-End BudgetPerformanceAssessment Review1st qtr next yr

Audit

1st sem next yr

The Budget Cycle


Stakeholder Participation in the Budget Process

When it assumed office, one of the first things that the Aquino Administration did is to create greater spaces and formal mechanisms for citizen’s participation in the budget process. From introducing citizen’s engagement during the annual preparation of the budget, it is now moving to enable citizens to engage the whole budget cycle.

These mechanisms for participation include:

1. Budget Partnership Agreements (BPAs) between agencies and civil society organizations (CSOs) in the preparation of the respective agencies’ budget proposals. This partnership process has since been expanded by the DBM to CSO engagement during budget execution.

2. Bottom-Up Budgeting (BUB), introduced through the Cabinet Cluster on Human Development and Poverty Reduction. In its pilot run during the preparation of the 2013 Budget, 595 poor municipalities crafted local poverty reduction plans hand-in-hand with citizen’s organizations in their localities. This approach is also being taken into the budget execution phase: so the citizen organizations can ensure that the P8.4-billion in programs and projects are implemented well.

3. Citizen Participatory Audit, which was launched by the Commission on Audit together with the Department of Public Works and Highways (DPWH) and the Affiliated Network for Social Accountability-East Asia and the Pacific (ANSA-EAP) in November 2012. Under this project, special teams of COA and citizen auditors will be deployed to conduct value-for-money or performance audits of selected government programs.


This starts with the Budget Call and ends with the President’s submission of the proposed budget to the Congress.

BUDGET PREPARATION

1. THE BUDGET CALL. At the beginning of the budget preparation year, the Department of Budget and Management (DBM) issues the National Budget Call to all agencies (including state universities and colleges) and a separate Corporate Budget Call to all GOCCs and GFIs. The Budget Call contains budget parameters (including macroeconomic and fiscal targets and agency budget ceilings) as set beforehand by the Development Budget Coordination Committee (DBCC); and policy guidelines and procedures in the preparation and submission of Agency Budget Proposals.

2. BUDGET PRIORITY FRAMEWORK. The government introduced a new process where the Cabinet will define and agree on government priorities that should be funded for 2014 to 2016. Along these priorities, Cabinet members will make commitments on programs and projects that they will deliver. These decisions and commitments are then summarized in a Budget Priority Framework that will guide all agencies in crafting their respective Budget Proposals.

The Medium-Term Information and Communications Technology Harmonization Initiative (MITHI) seeks to establish a coherent process for the planning, budgeting, implementation, monitoring and evaluation of government information and communication technology (ICT) projects. MITHI was initiated by the DBM, the Department of Science and Technology (DOST) and the National Economic and Development Authority (NEDA).

MITHI


3. TECHNICAL BUDGET HEARINGS. Once the departments and agencies submit their Agency Budget Proposals to the DBM, the latter will call Technical Budget Hearings where the agencies defend their proposed budgets before a technical panel of DBM, based on performance indicators on output targets and absorptive capacity. DBM bureaus then review the agency proposals and prepare recommendations.

4. EXECUTIVE REVIEW. The recommendations are presented before an Executive Review Board which is composed of the DBM Secretary and senior officials. Deliberations here entail a careful prioritization of programs and corresponding support, vis-à-vis the priority agenda of the national government. Implementation issues are also discussed and resolved.

5. CONSOLIDATION, VALIDATION AND CONFIRMATION. DBM then consolidates the recommended agency budgets and recommendations into a National Expenditure Program and a Budget Expenditures and Sources of Financing (BESF). As part of the consolidation process, the deliberations by the DBCC will determine the agency and sectoral allocation of the approved total expenditure ceiling, in line with the macroeconomic and fiscal program. Heads of major departments are invited to this meeting.

6. PRESENTATION TO PRESIDENT AND CABINET. The proposed budget is presented by DBM, together with the DBCC, to the President and Cabinet for further refinements or reprioritization. After the President and Cabinet approve the proposed National Expenditure Plan, the DBM prepares and finalizes the budget documents to be submitted to Congress.


7. THE PRESIDENT’S BUDGET. The budget preparation phase ends with the submission of the proposed national budget to Congress. The budget proposal, traditionally called “the President’s Budget,” consists of the following documents, which seek to help legislators and citizens analyze the contents of the proposed budget:

• President’s Budget Message (PBM). This is where the President explains the policy framework and priorities in the budget.

• Budget of Expenditures and Sources of Financing (BESF). Mandated by the Constitution, this contains the macroeconomic assumptions, public sector context (including overviews of LGU and GOCC financial positions), breakdown of the expenditures and funding sources for the fiscal year and the two previous years.

• National Expenditure Program (NEP). This contains the details of spending for each department and agency by program, activity or project, and is submitted in the form of a proposed General Appropriations Act.

• Book of Outputs. The Book of Outputs seeks to show the link between the budget and the outcomes and outputs from government activities. It provides a detailed listing of the performance indicators and targets of each department and agency, which should be aligned with their MFOs.

• Details of Selected Programs and Projects. This contains a more detailed disaggregation of key programs, projects and activities in the NEP, especially those in line with the national government’s development plan.

• Staffing Summary. This contains a summary of the staffing complement of each department and agency, including number of positions and amounts allocated for the same.


Alternatively called the “budget authorization phase,” this starts upon the House Speaker’s receipt of the President’s Budget, and ends with the President’s approval of the General Appropriations Act.

BUDGET LEGISLATION

1. HOUSE DELIBERATION. The House of Representatives, in plenary, assigns the President’s Budget to the House Appropriations Committee. The Committee and its Sub-Committees then schedule and conduct hearings on the budgets of the departments and agencies and scrutinize their respective programs and projects. It then crafts the General Appropriations Bill (GAB).

In plenary session, the GAB is sponsored, presented and defended by the Appropriations Committee and Sub-Committee Chairmen. As in all other laws, the GAB is approved on Second and Third Reading before transmission to the Senate. (Note: in the First Reading, the President’s Budget is assigned to the Appropriations Committee)

2. SENATE DELIBERATIONS. As with the House process, the Senate conducts its own committee hearings and plenary deliberations on the GAB. Budget deliberations in the Senate formally start after the House of Representatives transmits the GAB. For expediency, however, the Senate Finance Committee and Sub-Committees usually start hearings on the GAB even as House deliberations are ongoing.

The Committee submits its proposed amendments to the GAB to plenary only after it has been formally transmitted by the House. A Senate Version is thereafter approved on Second and Third Reading.

GAB

GAB SenateGAB


4. RATIFICATION AND ENROLMENT. The Harmonized or “Bicam” Version is then submitted to both Houses, which will then vote to ratify the final GAB for submission to the President. Once submitted to the President for his approval, the GAB is considered enrolled.

5. THE VETO MESSAGE. The President and DBM then review the GAB and prepare a Veto Message, where budget items subjected to direct veto or conditional implementation are identified, and where general observations are made. Under the Constitution, the GAB is the only legislative measure where the President can impose a line-veto (in all other cases, a law is either approved or vetoed in full).

6. ENACTMENT. The budget legislation phase ends when the General Appropriations Act (GAA) is signed by the President as law. Ideally, enactment should happen not later than December 31 of the GAA’s fiscal year. Otherwise, the previous year’s budget is reenacted in part, if the new budget is approved not approved on time; worse, it is reenacted in full if no new budget is approved at all.

3. BICAMERAL DELIBERATIONS. Once both Houses of Congress have finished their deliberations, they will each constitute a panel to the Bicameral Conference Committee. This committee will then discuss and harmonize the conflicting provisions of the House and Senate Versions of the GAB. A Harmonized Version of the GAB is thus produced.

GAB SenateGAB

HarmonizedGAB

GAA


BUDGET EXECUTION

This is where the people’s money is actually spent. As soon as the GAA is enacted, the government can implement its priority programs and projects.

1. RELEASE GUIDELINES AND PROGRAM. The budget execution phase begins with DBM’s issuance of guidelines on the release and utilization of funds.

2. BUDGET EXECUTION DOCUMENTS (BEDS). Agencies are required to submit their BEDs at the start of budget execution. These documents outline agency plans and performance targets. These BEDs include the physical and financial plan, monthly cash program, estimate of monthly income, and list of obligations that are not yet due and demandable.

3. ALLOTMENT AND CASH RELEASE PROGRAMMING. To ensure that releases fit the approved Fiscal Program, the DBM prepares an Allotment Release Program (ARP) to set a limit for allotments issued to an agency and on the aggregate. The ARP of each agency corresponds to the total amount of the agency-specific budget under the GAA, as well as Automatic Appropriations. A Cash Release Program (CRP) is also formulated alongside that to set a guide for disbursement levels for the year and for every month and quarter.

4. ALLOTMENT RELEASE. Allotments, which authorize an agency to enter into an obligation, are either released by DBM to all agencies comprehensively through the Agency Budget Matrix (ABM) and individually via Special Allotment Release Orders (SAROs).

• ABM. This document disaggregates all programmed appropriations for each agency into two main expenditure categories: “not needing clearance” and “needing clearance.” The ABM is the comprehensive allotment release document for appropriations which do not need clearance, or those which have already been itemized and fleshed out in the GAA.

• SARO. Items identified as “needing clearance” are those which require the approval of the DBM or the President, as the case may be (for instance, lump sum funds and confidential and intelligence funds.) For such items, an agency needs to submit a Special Budget Request to the DBM with supporting documents. Once approved, a SARO is issued.

5. INCURRING OBLIGATIONS. In implementing programs, activities and projects, agencies incur liabilities on behalf of the government. Obligations are liabilities legally incurred, which the government will pay for. There are various ways that an agency “obligates:” for example, when it hires staff (an obligation to pay salaries), receives billings for the use of utilities, or enters into a contract with an entity for the supply of goods and services.

BED

ARP

ABM

SARO

OBLIGATIONS


The Aquino Administration plans to design the annual General Appropriations Act (GAA) as the comprehensive allotment release document itself. This is being pursued in order to significantly speed up the process of releasing the Budget and implementing the programs and projects that it funds.

This entails the disaggregation of all budget items into full detail, as well as the elimination of all lump-sum funds, save for a few exceptions such as the Calamity Fund. In other words, this reform significantly reduces the need for SAROs. The 2011 Budget is being envisioned as the first Budget under this new regime.

The GAA as Release Document

6. CASH ALLOCATION. To authorize an agency to pay the obligations it incurs, DBM issues a disbursement authority. Most of the time, it takes the form of a Notice of Cash Allocation (NCA), and in special cases, the Non-Cash Availment Authority (NCAA) and Cash Disbursement Ceiling (CDC).

• NCA. This is a cash authority issued periodically by the DBM to the operating units of agencies to cover their cash requirements. The NCA specifies the maximum amount of cash that can be withdrawn from a government servicing bank for the period indicated. The release of NCAs by DBM is based on an agency’s submission of its Monthly Cash Program and other required documents.

• Other Disbursement Authorities. In contrast to NCAs, NCAAs are issued to authorize non-cash disbursements. CDCs are meanwhile issued to departments with overseas operations, allowing them to use income collected by their foreign posts for their operating requirements.

7. DISBURSEMENT. This is the final step of the budget execution phase, where government monies are actually spent. The Modified Disbursement Scheme is mostly used, where disbursements of national government agencies chargeable against the Treasury are made through government servicing banks, such as the Land Bank of the Philippines.

The budget process, of course, does not end when government agencies spend public funds: each and every peso must be accounted for to ensure that it is used properly, contributing to the achievement of socio-economic goals.

disbursement authority


BUDGET ACCOUNTABILITY

This phase happens alongside the budget execution phase. Through budget accountability, the DBM monitors the efficiency of fund utilization, assesses agency performance and provides a vital basis for reforms and new policies.

1. PERFORMANCE TARGETS AND OUTCOMES. Agencies are held accountable not only for how they use public funds ethically, but also on how they attain performance targets and outcomes using available resources. These performance measures are set alongside the preparation of the national budget, and these are indicated in the Book of Outputs. Prior to the execution of the enacted National Budget, these performance targets are firmed up during the preparation of BEDs.

2. BUDGET ACCOUNTABILITY REPORTS (BARS). Submitted by agencies on a monthly and quarterly basis, BARs are required reports that show how agencies used their funds and which identify their corresponding physical accomplishments. These include quarterly physical and financial reports of operations; quarterly income reports, a monthly statement of allotments, obligations and balances; and monthly report of disbursements.

3. REVIEW OF AGENCY PERFORMANCE. The DBM regularly reviews the financial and physical performance of agencies. Actual utilization of funds and physical accomplishments, as indicated in the agencies’ BARs, are evaluated against their targets as identified via OPIF and in the agencies’ BEDs. Agency Performance Reviews (APRs) are conducted quarterly or every semester, as the case may be. An annual Budget Performance Assessment Review (BPAR) is conducted to determine each agency’s accomplishments and performance by the year-end. The DBM regularly reports results to the President.

4. AUDIT. Auditing is not within the DBM’s jurisdiction, and is instead lodged under the Commission on Audit (COA). Nonetheless, auditing is critical in ensuring agency accountability in the use of public funds. The DBM uses COA’s audit reports in confirming agency performance, determining budgetary levels for agencies and addressing issues in fund usage.

ALLOTMENT – authorization issued by DBM to an agency, through Agency Budget Matrix (ABM) or Special Allotment Release Order (SARO), which allows the latter to incur obligation for specified amounts contained in a legislative appropriation.

ALLOTMENT CLASS – classification of government expenditures under the following categories: (1) Personal Services (PS); (2) Maintenance and Other Operating Expenditures (MOOE); and (3) Capital Outlays (CO).

ALLOCATION TO LOCAL GOVERNMENT UNITS (ALGU) – refers to the share of LGUs from the National Government’s internal revenue collections. The shares are based on a scheme computed for each LGU under the Local Government Code and other special laws.

APPROPRIATION – an authorization made by law or other legislative enactment, directing payment out of government funds under specified conditions or for specific purposes.

APPROPRIATIONS, AUTOMATIC – an authorization made annually or for some other period prescribed by law, by virtue of standing legislation which does not require periodic action by Congress. Examples of automatic appropriations in the national budget are Internal Revenue Allotments (IRA) and debt service, among others.

APPROPRIATIONS, CONTINUING – an authorization to support obligations (expenditures incurred and committed to be paid by the government) for a specific purpose or project, even when these obligations are incurred beyond the budget year.

APPROPRIATIONS, NEW GENERAL – this is legislated by Congress and enacted by the President every fiscal year as the General Appropriations Act (GAA). The GAA enacts both programmed and unprogrammed general appropriations. Programmed appropriations are supported by existing resources and can be released during the year, while unprogrammed appropriations are stand-by-authority, and can be released only when revenue collections exceed targets.

BOTTOM-UP PLANNING AND BUDGETING – an approach to formulating the budget proposal of agencies, taking into consideration the development needs of poor cities or municipalities as identified in their respective local poverty reduction action plans that shall be formulated with strong participation of basic sectors and civil society organizations.

BUDGET DEFICIT – occurs when government expenditures exceed revenues.

CAPITAL EXPENDITURE OR CAPITAL OUTLAYS – refer to appropriations for purchasing goods and services that add to the Government’s assets – including investments in the capital stock of GOCCs and their subsidiaries – and produce long-term benefits (e.g., the acquisition of buildings, land, motor vehicles, equipment).

DEBT SERVICE – sum of loan repayments, interest payments, commitment fees, and other charges on foreign and domestic borrowings.

INTERNAL REVENUE ALLOTMENT (IRA) – share of local government units (LGUs) from the National Government’s total revenues.

Glossary of Terms

MAINTENANCE AND OTHER OPERATING EXPENDITURES (MOOE) – refer to expenditures that support the operations of government agencies, including those for supplies and materials; transportation and travel; utilities (water, power, etc.) and maintenance activities.

MAJOR FINAL OUTPUTS (MFOS) – goods and services that a department/agency should deliver to external clients through the implementation of programs, activities, and projects.

MEDIUM-TERM EXPENDITURE FRAMEWORK (MTEF) – the government’s planning and budgeting framework that provides a medium-term three-year perspective during budget preparation.

NATIONAL BUDGET – a financial expression of approved government plans and programs supported by government resources.

NON-TAX REVENUES – revenues from fees, charges, and other government collections in exchange for services rendered, penalties imposed, among others. In certain cases, non-tax revenues also include the privatization of government assets.

ORGANIZATIONAL PERFORMANCE INDICATOR FRAMEWORK (OPIF) – an expenditure management approach that directs resources toward actual results and measures performance according to quality, quantity, timeliness and cost indicators.

OPIF LOGICAL FRAMEWORK (LOGFRAME) – a planning tool that provides a graphical presentation of the connections between societal and sectoral goals and organizational outcomes.

PERSONNEL SERVICES – provisions for salaries, wages, and other compensation (e.g., merit, salary increase, cost-of-living-allowances, honoraria, and commutable allowances) for permanent, temporary, contractual, and casual employees of the government.

TAX REVENUES – compulsory charges or levies imposed by government on goods, services, transactions, individuals, and entities, among others (e.g., individual and corporate income taxes, value-added tax on the sale of goods and services, and special taxes, such as the motor vehicle tax and travel tax).

ZERO-BASED BUDGETING (ZBB) – a budgeting approach through which major agency programs and projects are evaluated to determine the continued relevance of program objectives vis-à-vis current developments/directions; assess whether program objectives/outcomes are being achieved; ascertain alternative or more viable ways of achieving the objectives, and ultimately; guide decision makers on whether the program/project should continue to be funded at its present level or if funding should be increased, reduced or discontinued.

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Peoples Budget 2013

Documents

Transcript of Peoples Budget 2013