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Budget Reform under theAquino Administration

Secretary Florencio B. Abad, DBM

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Is Underspending Over?

Expenditure Performance So Far

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NG Expenditures, As of July 2012

TOTALP832.3B Y-O-Y

15.1%

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NG Expenditures, Y-O-Y

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NG Expenditures, As of June 2012

TOTALP795.4B Y-O-Y

13.8%

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Disbursements by Expense Class, As of June 2012

Personal ServicesP255.3B

Interest PaymentsP150.0B

Allotment to LGUSP109.3B

MOOEP115.2B

Tax Expenditure

P17.3B

SubsidyP12.2B

8.2%

41.4%

11.5%

16.8%

13.7%

4.8%

Current Oper. Exp.P695.4B Y-O-Y

10.7%

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Infra & Other COP88.5B

Cap. Transfers to LGUsP35.0B

EquityP0.9B

66.1%

675.9%

6.4%

Capital OutlaysP124.3B Y-O-Y37.0%

Disbursements by Expense Class, As of June 2012

Net LendingP11.7B

Y-O-Y5.2%

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Fiscal Discipline:Spending Within Means

Allocative Efficiency:Right Priorities

Effective Operations:Spending with Impact

Public Expenditure Management

Objectives of EffectivePublic Expenditure

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The Empowerment Budget of 2013

Accelerating Delivery, Deepening Reform

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Empowerment Budget of 2013

10

P2.006 T

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Budget by Sector, FY 2012-2013

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EconomicServices

439.0(24.2%)

SocialServices

613.4(33.8%)

Defense87.2

(4.8%)GeneralServices

320.3(17.6%)

NetLending

23.0(1.3%)

DebtService333.1

(18.3%)

2012

EconomicServices

511.1

(25.5%)

SocialServices

698.8(34.8%)

Defense89.7

(4.5%)GeneralServices

346.1(17.3%)

NetLending

26.5(1.3%)

DebtService 333.9

(16.6%)

2013

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Budget by Expense Class, FY 2012-2013

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2012 2013 2012 2013Program Proposed Program ProposedCURRENT OPERATING EXPENDITUR 1,464.7 1,599.5 80.7 79.7 9.2

Personal Services 593.5 641.3 32.7 32.0 8.1 MOOE 266.6 313.3 14.7 15.6 17.5 Subsidy 19.7 42.3 1.1 2.1 114.3 Allotment to LGUs 218.6 241.8 12.0 12.1 10.6 Interest Payments 333.1 333.9 18.3 16.6 0.2

Tax Expenditure Fund 33.0 26.9 1.8 1.3 (18.6)

CAPITAL OUTLAYS 328.3 380.0 18.1 18.9 15.7

Infra. and Other CO 252.4 296.7 13.9 14.8 17.5 Equity 2.1 2.0 0.1 0.1 (2.7) Capital Transfers to LGUs 71.3 76.3 3.9 3.8 6.9 CARP LO Compensation 2.5 5.0 0.1 0.2 100.0

NET LENDING 23.0 26.5 1.3 1.3 15.2 TOTAL 1,816.0 2,006.0 100.0 100.0 10.5

Memo Items:

Capital Outlays 328.3 380.0 18.1 18.9 15.7

Add: Infra Subsidy for GOCCs 11.0 29.8 0.6 1.5 172.0

Total Adjusted Capital Outlays 339.3 409.8 18.7 20.4 20.8

Percent Share

PARTICULARS

Levels (Php Billion) Growth Rate

2012-2013

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Top Ten Departments, FY 2012-2013

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Level(Php Billion)

DepEd (incl. MPBF and SBP) 238.8 1 292.7 1/ 1DPWH (incl. PSEPF and BSGC ) 126.4 2 152.9 2/ 2DND (incl. MPBF and PGF) 108.1 3 121.6 3DILG (incl. MPBF and PGF) 99.8 4 121.1 4DA (incl. PSEPF and BSGC ) 61.4 5 74.1 5DOH (incl. MPBF, PSEPF and BSGC ) 45.8 7 56.8 6DSWD 48.8 6 56.2 7DOTC (incl. MPBF, PGF, PSEPF and BSGC ) 34.7 8 37.1 3/ 8DOF (incl. MPBF and BSGC ) 23.6 9 33.2 9

DENR (incl. MPBF and PGF) 17.5 10 23.7 10Notes: Legend: 1/ Gross of School Building Program transferred to DPWH MPBF- Miscellaneous Personnel Benefits Fund 2/ Net of School Building Program transferred from DepEd SBP - School Building Program 3/ The corporate funds of DOTC attached corporations PGF - Pension and Gratuity Fund

(MIAA, MCIAA, CIAC and CAAP) amounts to P2.6B in 2013 PSEPF - Priority Social and Economic Projects Fund BSGC - Budgetary Support to Government Corporations

Particulars2012 Program 2013 Proposed

Rank Level Rank(Php Billions)

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Core Principles of the 2013 Budget

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Greater Focus on the Social Contract

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Introduction of Program Budgeting

Sustained Use of Zero-Based Budgeting

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Greater Focus on the Social Contract

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Completion of Priority Program Targets

DPWH as Principal Infrastructure Agency

Line Agencies to Focus on Core Mandates and

Accelerated Delivery of Targets

Start Pre-bidding Process after the NEPSubmission

Closer Performance Monitoring

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Stronger Accountability to Perform

Performance-Based Budgeting

Harmonization of All Performance Management

Systems in Government

Performance-Based Incentives

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Fiscal Transparency = Clear Results

Disaggregation of Agency Lump Sum Funds

Shift to One-Year Validity of MOOE & CO

Appropriations in 2013 in Preparation forBudget-as-Release Document Regime by 2014

Technological Innovations for Speedier and More

Transparent Processes

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Greater Stakeholder Participation

Introduction of Bottom-Up Budgeting

Expanded Agency-CSO Partnerships

Public-Private Partnerships for Social ServiceDelivery

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Public Financial Management

Reform Roadmap 2011-2016

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PFM reforms supportAquino Administration priorities

Good Governance

PFM Goal

Societal Goal

5 Priority

Areas

Sector Goal Fiscal Discipline

Inclusive Growth and Poverty Reduction

Kung walang corrupt, walang mahirap

Anti-corruption/ Transparent,

Accountable &Participatory Governance

Poverty Reduction &Empowerment of the Poor

Rapid,Equitable&Sustained EconomicGrowth

Just,Inclusive &LastingPeace & theRule of Law

Integrity of theEnvironment/ Climate ChangeMitigation &

Adaptation

Improve efficiency, accountability and transparency of public funduse to ensure direct, immediate and substantial delivery of public

services specially to the poor.

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Outputs and Results

Outputs

MajorStrategies

TreasurySingle

Account

GIFMIS RealTime

FinancialInformation

1. Build upCredibility

of PFM

2. ReviewFund

ReleaseProcedures

3. CapacityBuilding for

Congressand CSOs

4. ImproveTreasury CashManagement

Operations

5. Develop&

ImplementGIFMIS

ContingentLiabilities

Better Mgt of Contingent

Liabilities

ResultsBased

Budgeting

PFM REFORMS ROADMAP

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The Private Sector & Budgeting

Opening Wider Spaces for Stakeholder Participation

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Private Sector as a Key Budget Stakeholder

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

Affected by Macroeconomic and FiscalPolicies and Actions by Government

Robust Source of Technical and ProfessionalExpertise, Good Practices and Innovations

Co-Advocate of Reform

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Entry Points for Private Sector Participation

Participatory Macro & Fiscal Risk Assessments PPPs for Social Service Infrastructure

Partnerships for Public Administration &Service Delivery Improvement Monitoring of Public Procurement

Participation in Budget Performance Reviews Industry-Specific Engagements

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Budget Reform under theAquino Administration

Secretary Florencio B. Abad, DBM