DBM BulletinJanuary-March 2013

January-March 2013 www.dbm.gov.ph

Project to promote sound PFMsystems in LGUs launched

In support of more ef fective andaccountable public financial managementin the local government units (LGUs), afour-year European Union (EU) fundedproject dubbed as the “LGU PFM 2Project” was formally launched at theBoncodin Hall of the Department ofBudget and Management (DBM) inManila on 14 February 2013.

The Project aims to enhance the capacityof local governments to generate revenueand to allocate and spend public fundsmore effectively and efficiently. This willbe done by: (1) building the capacity ofoversight national government agenciesand their regional offices to support andprovide technical assistance to LGUson public financial management (PFM);(2) integrating and synchronizing LGUPFM systems and processes, as wellas developing electronic tools for

budgeting and financial transactions;and (3) strengthening accountability andtransparency through enhanced budgetperformance monitoring systems andtools.

To facilitate project implementation, aProject Steering Committee (PSC),chaired by the Honorable DBM SecretaryFlorencio B. Abad, with UndersecretaryMario L. Relampagos as alternate, wasset up. The PSC is composed ofrepresentatives from the Department ofthe Interior and Local Government (DILG),Department of Finance (DOF), NationalEconomic and Development Authority(NEDA), Commission on Audit (COA),and the EU.

The PSC shall be supported by a ProjectTask Force (PTF) headed by thedesignated Project Imprest

Administrator, Di rector Jul ian Ll.Pacificador, Jr., and Imprest AccountingOfficer, Assistant Secretary Janet B.Abuel. The PTF is composed of aTechnical Assistance Team (TAT), aninter-agency Project Technical WorkingGroup (PTWG) and PTF Support Staff.

Project activities at the DBM level, onthe other hand, will be implementedthrough a Project Team headed byUndersecretary Relampagos, assistedby the DBM PTWG representatives,Di rectors Ruby R. Esteban andCarmencita N. Delantar.

As a show of commitment, aMemorandum of Agreement (MOA)delineating the roles of the agenciesparticipating in the project was signedduring the project launch.

MOA Signing. A Memorandum of Agreement (MOA) among the DBM, DOF, DILG, NEDA, and COA has been signed to ensurethe implementation of the LGU PFM 2 project.

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Decision Science:A (New) Way ofSeeing and Leading

WOW in DBM!

FY 2014 budgetprep in full swing

DBM BulletinJanuary-March 20132

Government departments and entities areresponsible not only for delivering timelyand quality public service, but also forspending their budget on time and inaccordance with the cash program set bythe Development Budget CoordinationCommittee (DBCC).

In the assessment of disbursementperformance during the first quarter of2012, data show that actualdisbursements were only P394.88 billion,P45.71 billion below the DBCC Programof P440.60 billion. Eight departments weredetected to have low disbursements.

Low disbursements impact considerablyon the delivery of public service and on thecountry’s economic growth. It likewiseentails additional cost of borrowing by theBureau of the Treasury (BTr). Since weoperate on a deficit spending, the BTr hasto borrow funds from local and foreignlending institutions to release programmedfunds for which it has to pay interests.When agencies fail to use funds receivedon time, government money is just left idlein the banks.

To assist spending agencies to be ontrack with the DBCC DisbursementProgram, inter-agency AccountManagement Teams (AMTs) were createdin 2012 composed of selected DBMDirectors and staff from the OperationsGroup and members of the financialmanagement service and planning officesfrom selected departments.

These AMTs held regular meetings withspending agencies particularly those withlow disbursement levels to help themimprove their financial performance.

After months of working with thesedepartments, improvements were notedand acknowledged. On January 23 of thisyear, the DBM held an awarding ceremonyto recognize the feat of those agencieswho have shown tremendous effort toenhance their capacity to efficiently and

DBM awards gov’t agencies with best, most improved financial performance

effectively spend their budgeted fundswithin the program level.

Among the AMT-guided departments, theDepartment of Health (DOH) wasrecognized as the best performer in termsof financial performance, registering theleast deviation between the DBCCProgram as against actual disbursement;and between its Monthly Cash Programvis-à-vis its actual disbursement.

The Department of Social Welfare andDevelopment (DSWD), on the other hand,was awarded as the most improved AMT-guided department.

The Department of Health (left photo) bags the Best Performer in terms of financialperformance while the Department of Social Welfare and Development (right photo) getsthe Most Improved AMT-Guided Department award during the recognition rites for theAMT-guided agencies/departments held at the DBM Multi-Purpose Hall. DBMUndersecretary Mario L. Relampagos (extreme left) and Assistant Secretary Luz M.Cantor (extreme right) led the awarding.

Performance-InformedBudget Structure: A New

Era in PhilippineBudgeting

The DBM marks another milestone inbudgeting with the adoption of aperformance-informed budget structure inthe 2014 National Expenditure Program(NEP) which will eventually become theGeneral Appropriations Act (GAA).

The new budget structure puts ‘kwento’(story) to the ‘kwenta’ (computation) byproviding a strategic perspective for budget

see page 3

DBM off icials headed byUndersecretary Richard Moya answerquestions from the participants,composed of representatives fromgovernment agencies and civil societyorganizations, during the Forum on thePerformance-Informed BudgetStructure held on March 5, 2013.

DBM BulletinJanuary-March 2013 3

DBM Assistant Secretary Clare CattleyaG. Amador is cited as one of the “40 Under40” Filipino leaders awarded by Devex, aUS-based Development Group, last 19February 2013 at Zuellig Bldg., Sky Gardenin Makati. She is chosen from 250nominations composed of youngprofessionals, under the age of 40, fromthe public and private sectors includingthe media, civil society, and internationalaid agencies. ASec. Amador has beenrecognized for her remarkable contributionsin public service and development work.Prior to her employment in DBM, she was“founder of YTRIP, a nonprofit [organization]advocating for responsible and sustainabletourism in the Philippines. She was alsofounding chair of the Development Societyof the Ateneo de Manila University, astudent organization that harnesses theyouth’s passion and skill to help shapeand effect national development.”*

Also among the ‘40 under 40’ awardeesare Presidential Management Staff (PMS)Secretary Julia Andrea Abad, TechnicalEducation and Skills DevelopmentAuthority (TESDA) Executive DirectorEmmanuel Joel Villanueva, Co-founder ofMicroventures, Inc. Paolo Benigno Aquino

In the photo: ASec. Amador together with DevexPresident and Founder Raj Kumar and DSWDSecretary Corazon ‘Dinky’ Soliman.

COMELEC to get P4.14-Bfund boost

The Department of Budget andManagement announced the release ofP4.14 billion to the Commission onElections (COMELEC) to supportpreparatory activities for the SynchronizedNational, Local, and ARMM Elections thisyear. The release was charged againstsavings from unutilized appropriationsunder the 2012 General Appropriations Act.

“We augmented the COMELEC’s budgetto enable them to make the necessarypreparations for this year’s elections. Theadditional fund support will ensure that pre-election activ ities are accomplishedaccording to schedule and with the utmostefficiency,” Budget and ManagementSecretary Florencio B. Abad said.

Of the release, P1.54 billion will be used tocover expenses for Synchronized National andLocal Elections, while P755.08 million willsupport activities related to the purchase ofPCOS Machines, such as the development ofcollateral, software support and maintenance,and training and seminar expenses.

Other items under the release includeP100.9 million, which will be set asidefor Overseas Absentee Voting requirements.

Abad also confirmed that the P4.14 billionwill be used only for activities related to the2013 elections, and that all unused fundsunder the release will not be available forobligation at the end of the year. (PIU)

analysis, with focus on what budgetallocations will achieve instead of on howmuch is being allocated.

It also simplifies the budget structure tomake it more comprehensible and reader-friendly by presenting the budget bymajor final output (program level) insteadof by detailed line-item accounts.

National Budget Memorandum No. 117,issued on 1 March 2013, prescribes theguidelines and template on the new budgetstructure. As stated in the NBM,government departments, agencies, andoperating units are required to submit theaccomplished template on the new budgetstructure not later than April 15, 2013.

Performance . . . from p. 2

IV, Pia Bernadette Tayag of the InclusiveFinance Advocacy Staff-Bangko Sentralng Pilipinas, and journalist Kara David ofGMA7. ASec. Amador, together with theother 39 awardees, joins the ranks of pastDevex awardees such as Jared Cohen,founder and Director of Google Ideas; andRajiv Shah, USAID Administrator, amongothers.

(*Meet the 40 Under 40, 2013. Availablefrom: <manila40.devex.com>.[18 February2013].)

ASec. Amador joins the ranksof world’s top development leaders under 40

In the photo: Assistant Secretary Clare Amador (second row, 4th from left) togetherwith her fellow ‘40 Under 40’ awardees, guests, and organizers.

DBM BulletinJanuary-March 20134

With the release of the Budget Call for FY2014 and the conduct of the annual budgetfora, government agencies andinstrumentalities particularly planning andbudget offices are as busy as the GrandCentral Station to prep for the initial phaseof the budget process.

Among the new and vital initiatives beingintroduced in the 2014 budget prep are thetreatment of the General AppropriationsAct (GAA) as a budgetary releasedocument and the one-year validity ofappropriations. These wil l beimplemented to enhance predictability and

2014 budget prep in full swing

certainty in the flow of public funds as well asenable faster execution of the legislated budget.

“From an expenditure perspective, theone-year lapse period wil l helpinstitutionalize pre-procurement activitiesthe year before the budget is implemented,enabling faster budget execution amongagencies. With all departments makingthe most of their yearly allocations, wecan expect our spending performance toexceed its current trajectory, andconsequently, reinforce our economicgrowth,” Budget Secretary Florencio B.Abad said in an earlier statement.

The one-year validity of appropriations willhold for Personnel Services (PS),Maintenance and Other Operating Expenses(MOOE), and Capital Outlays (CO).

Budget Secretary Florencio B. Abad opens the BudgetForum on the 2014 Budget Preparation and 2013Budget Execution at Camp Aguinaldo in Quezon City.

BTS AssistantDirector Amanella D.Arevalo discussesthe FY 2013 BudgetExecution (FundRelease) during theBudget Forum held onJanuary 10 and 11,2013.

see page 11

The Exhibit

DBM celebrates the love monthwith a night of singing anddancingA glimpse of the Valentine festivity helda day after the Heart’s Day:

The DBM Chorale serenades the crowdwith memorable Filipino and English lovesongs.

DBM employees showcase their talenton the dance floor.

publications from government agencies.UGNAY, developed and published by theBureau of Communications Services(BCS), is intended to help the public geteasy access to government publications.As BCS Director John S. Manalili puts it,UGNAY “will be the ultimate referenceand indispensable material in responseto the needs of the people for vitalgovernment information.” It is “an efficientlocator aid for students, researchers, andthe people themselves in their search for[crucial] government information toaddress their various needs,” DirectorManalili adds.

UGNAY: Connecting with thePeople. Secretary Sonny Coloma ofthe Presidential CommunicationsOperations Office (PCOO) leads theUGNAY book launching and openingof the photo/book exhibit at theNational Library which features various

Photos show some of the featuredgovernment publications such as theDBM Bulletin and the GovernmentDirectory (photo below) in the UgnayBook Launch and Photo/Book Exhibit.

DBM BulletinJanuary-March 2013 5

The Science of Decision Making

Decision Science draws its disciplinefrom two streams of the social sciences:economics (how people should makedecisions) and psychology (how peopleactually make decisions). It is a new lenson leadership and provides science-basedinsights on decision-making – where oldmodels of thinking and even economictheories are being tested, disproved, and/or are rendered irrelevant. Taking off fromthe MAN as RATIONAL economic schoolof thought – Decision Science studieshuman behavior, emotions, and brain andchoice processes through behavioraleconomics and social psychology,neuroscience, and bio-behavioral science.

Values such as trust and integrity, andemotions such as anger and sadness,and even professional/business ethicshave been studied to assess their impacton decision-making, behavior, andleadership.

On the side of government - DecisionScience is able to help solve publicpolicy problems through a betterunderstanding of human behavior –not only of citizens but also of leaders andemployees. There are many existingexamples which prove how this newscience has helped build better publicservice delivery mechanisms and hashelped improve policies in different partsof the world. The program’s lead, Dr.Jennifer Lerner who studies the impact ofemotion and accountability in decision-making said it better herself, “Emotion isa huge driver of human behavior, and a lotof the problems that we have in the worldtoday come from non-rational humanbehavior. We have technological solutionsthat aren’t working – because of humanbehavior. We have technologies that weneed to improve national security – but

DECISION SCIENCE:A (New) Way of Seeing and Leading

By Assistant Secretary Clare Cattleya G. Amador, Chief of Staff

Decisions and decision-making, being in the domains of leadership and politics, havea huge impact on people, organizations, and society. Rising with the demands ofcomplex social problems and issues, a new way of seeing decision-making andleadership has emerged from recent developments in the social sciences and inneuroscience aimed at helping leaders and – everyone, really - lead and decideresponsively.

not the human performance to carry themout. We have energy solutions but not thepolitical will to enact them.”1

Key findings in research have been withinthe following areas: psychology of riskperception, psychology of emotions anddecision-making, and the psychology ofaccountability. As an example, Dr. Lerner’sresearch on accountability studies theimpact and effect of authority relationshipsin influencing decisions and outcomes.She and her colleagues developed a modelthat predicts when accountability willimprove judgment, when it will have noeffect on judgment, and when it will makematters only worse. This work hasimplications for the design of both publicand private institutions.”2 In the Philippinesetting, this may be a useful approachwhen designing organizational structures,processes, and systems in government –a job which falls under the mandate of the

DBM. This would also be a useful referencefor performance management design andperformance contract systems.

Interestingly enough, the United Kingdomhas activated a Behavioral Insights Team(aka The Nudge Unit) under the CabinetOffice to “find innovative ways ofencouraging, enabling, and supportingpeople to make better choices forthemselves.” It has reportedly saved theUK government about £300 million sinceits establishment in 2010 from its work onvarious services and streams in the UKgovernment, including tax payments, fraudand debt, and health services.

It does not end in public policy or even inservice design either. The Obama 2012campaign team, reportedly, also had itspool of experts from the social sciences(particularly behavioral economists andsocial psychologists) that helped designtheir campaign strategy and platform.3

The Decision Architect

A decision/choice architect, according tothe book, “Nudgec by Richard H. Thalerand Cass R. Sunstein, “has theresponsibility for organizing the context inwhich people make decisions.”4 It is theability to structure the process of decisionmaking so that it is counter-intuitive andallows the decision maker to veer fromcognitive biases/default tendencies and

Undersecretary Evelyn V. Guerrero is trulya WOW – as in Woman of Wonder!

In her almost 44 years of dedicated servicein government, 40 years of which spententirely in the Department of Budget andManagement, she has been a recipient ofvarious awards for her exemplaryperformance, some of which includeAchiever in the Field of Government-Budgetand Management given by the PSBA AlumniAssociation in 2010; Outstanding DivisionChief (1991); Outstanding AssistantDivision Chief for three (3) years given in1980, 1982, and 1983; and OutstandingTechnical Employee (1979).

WOW in DBM! A career executive, a Certified PublicAccountant (CPA), and a civil serviceprofessional eligible, Undersecretary

see page 9

see page 10

DBM Secretary Florencio ‘Butch’ Abadawards Undersecretary Evelyn V. Guerrerowith a plaque of appreciation for her almost44 years of dedicated service in DBM.

DBM BulletinJanuary-March 20136

DBM RO 8 Director Imelda C. Laceras discusses the FY 2014 Budget Framework during theBudget Forum held on January 15, 2013.

By: Juvy A. Lobedica, BMS I/PIO Designate

The Department of Budget andManagement Regional Office VIII (DBMRO VIII), headed by its Regional DirectorImelda C. Laceras, takes pride in theperformance of its roles in one of theDepartment’s mandated functions - theformulation of the national budget. Budgetpreparation for 2014 is anchored on thepol icy guidelines and proceduresstipulated under Nat ional BudgetMemorandum (NBM) No. 115.

Consistent with the said guidelines, theDBM RO VIII has undertaken the followingcrucial activities:

Regional Budget Forum. Within theschedule set in NBM No. 115, DBM ROVIII conducted the annual Regional BudgetForum for heads, budget officers andaccountants of the regional offices ofnational government agencies (NGAs),state universities and colleges (SUCs),engineering districts, schools’ divisionoffices and attached hospitals of the DOHin the region. The forum specificallytackled the guidelines and procedures inthe preparation of the 2014 budget as wellas the latest innovations in budgeting thatthe Department is introducing such as theOnline Submission of Budget Proposals(OSBP), Medium-Term Information andCommunication Technology Harmo-nization Initiative (MITHI), and UnifiedAccount Code Structure (UACS).Guidelines on the execution of the FY2013 budget were likewise discussed.

DBM-REALBO Meeting (January 16,2013). The officials of the Region EightAssociation of Local Budget Officers(REALBO) composed of seven (7) CityBudget Officers, six (6) Provincial BudgetOfficers, and seven (7) Municipal BudgetOfficers were briefed by Director Laceras,the organization’s adviser, on the need toharmonize the national and local budgetpreparation processes.

RDC-DAC Advocacy (January 17, 2013).DBM Director Imelda C. Laceras,chairperson of the Dev elopmentAdministration Committee (DAC) of theRegional Development Council (RDC),presented before the Committee Meetinglast January 17, 2013 at the NEDARegional Office VIII the salient features of

the National Budget Call, stressing on thevarious reforms that will be undertaken tofurther strengthen the link betweenplanning and budgeting. Representativesfrom the private sector in the RDC-DACopenly committed to support the advocacy

Photo shows the complete staff of DBM RO IX. Four of whom, namely Director Nilda J. Cemine(seated, 3rd from left), Chief Budget and Management Specialist Mary Rosslyn M. Cabañero(seated, 4th from left), Supervising Budget and Management Specialist Lilia M. Ledesma (2ndrow, 5th from right), and Administrative Assistant III Carmelita P. Bicaldo (4th row, extremeleft), were given loyalty awards during the Office’s 35th anniversary.

From the Regions

see page 8

DBM RO 8 spearheads FY 2014 budget prep inEastern Visayas

DBM BulletinJanuary-March 2013

The Pioneers

7DBM-NCR Celebrates its 16th Founding Anniversary

The Department of Budget andManagement-National Capital Region(DBM-NCR) celebrated its 16th FoundingAnniversary last February 1 to 4, 2013.The event was highlighted by a thanksgivingmass officiated by Rev. Father EdricBedural at the DBM Chapel and a simplebut memorable anniversary program thefollowing day at the Quezon City MemorialCircle.

The program had a “wellness” theme sinceit started with a complete AerobicsExercise which tested the stamina anddancing prowess of the employees. Somemental and physical games followedcentering on “DBM-NCR” as subject andwhich further revealed the strengths andsharpness of minds of the participants. Avideo presentation was shown whichcaptured the many achievements of theoffice in 2012. A fitting message from thepresent head - Director Ruby R. Esteban- and a good lunch capped the celebration.

Director Esteban thanked the staff fortheir continuous support, commitment anddedication to work which have contributedto the total positive developmentshappening in the Department. She alsoimpressed upon them the need tointernalize the many reforms beingundertaken particularly the focus onperformance-based results. At the end ofthe day, however, it is all a matter of “lovingand enjoying your work,” she said.

Prior to the establishment of the DBM-NCR, there was a Department of Budgetand Management-Regional CoordinationService (RCS) which catered to the needsof DBM-Regional Offices throughout thecountry.

Former Undersecretary who was thenAssistant Secretary Cynthia G. Castelheaded the RCS. She was succeeded byRoger Manuel as Officer-in-Charge andsubsequently by Mario P. Bravo who wasdesignated as RCS Director.

The move for government reforms gavebirth to the decentralization of nationalgovernment agencies (NGAs) and thedevolution of their functions to localgovernment units (LGUs). The creation

of DBM-NCR, with the RCS as its core,was the brainchild of ASec. Castel whowas head of the decentralization program.

Department Order No. 97-2 abolished theRCS and established the DBM-NCR withDirector Bravo at the helm. DBM-NCRcommenced its operations in February,1997 under the administration of the DBMCentral Office. It began performing as anindependent regional office with its ownfinance and administrative unit in April1998.

In September 1998, Director Loida S.Abellera, then Director of the Financialand Administrative Service (FAS) becamethe Director of DBM-NCR replacing DirectorBravo who transferred to and becameAssistant Secretary of another governmentagency.

Director Abellera retired on July 21, 2001.Director Ruby R. Esteban was designatedas Officer-in-Charge of the regional officeand subsequently was appointed as a full-fledged Director on July 14, 2002 whichposition she holds up to now. As of today,the DBM-NCR has a 20-strong manpowercomplement.

Throughout its sixteen years of existence,DBM-NCR can cite many outstandingaccomplishments among which are thesuccessful pilot implementation and roll-out of the Electronic Budget System;electronic updating of the PersonnelServices Itemization-Plantilla of Personnel

see page 8 The Present Staff

DBM BulletinJanuary-March 20138

(PSI-POP); Direct Release System ofPayment of Accounts Payable to DPWH,DepEd, DOH, IUs and SUCs; roll-out ofthe use of the Public FinancialManagement Assessment Tool (PFMAT),the Performance-Based Incentive Systemand the concept of the OrganizationalPerformance Indicator Framework (OPIF);and institutionalization of the CentralProcessing and Releasing Unit (CPRU)which greatly facilitated releasing,monitoring and management reportingservices. The personnel have been sentto several training programs both here andabroad which enhanced their professionalgrowth and development.

The strength of DBM-NCR undoubtedlycomes from the Divine Providence and thesteadfastness and hard work of its people.Traditionally therefore, each of itsanniversaries always began with aThanksgiving Mass. This year, it wasanother occasion to give glory back toGod for His many blessings and to ask forconstant grace, guidance and fortitude asthe Regional Office continues to assumeits role in the pursuit of public expenditureand governance reforms. (DBM-NCR)

Study Tours: It’s More Fun in DBM. BS Business Administration students of Abada College(Oriental Mindoro) seem to have enjoyed their educational tour in DBM as shown in the photo.They have been briefed by TIS Training Chief Zenaida ‘Sunny’ Rico on the DBM’s history andfunctions. From January to March of this year alone, more than 200 visitors composed of collegestudents from various schools in Luzon and foreign visitors from the Royal Kingdom of Bhutan’sMinistry of Finance have been informed on budget-related topics such as budgeting concepts,budget process, and current public expenditure reforms, among others.

Current staff of the DBM-NCR pose for a photo-op during the FY 2014 Budget Forum for NCR(above photo) and during their 16th FoundingAnniversary after the Thanksgiving Mass.

DBM-NCR . . . from p. 7

by ensuring active participation of otherCSOs in the region which are affiliatedwith their organizations.

Participation in Bottom-Up Budgeting(January 28-February 4, 2013). As theVice-Chair to the Regional PovertyReduction Action Team (RPRAT), DBMRO 8 has actively participated in a seriesof orientations and fora conducted on theFY 2014 Bottom-Up Budgeting (BUB).The BUB orientations were conducted perprovince with the presence of the LocalPoverty Reduction Action Team (LPRAT)members, basic sector representatives,civ i l society organizations, andrepresentatives f rom the nationalgovernment agencies who presented theirrespective project menu for the guidanceof the LPRAT. The orientationscommenced on January 28, 2012 at OrmocCity covering the provinces of Leyte andBiliran; and concluded on February 4,2013 for the Province of Samar. Some 115LGUs were covered in the BUB exercisein Eastern Visayas. Designated asTechnical Point Persons on technical andCSO concerns for the BUB were Ms. AleliN. Hernandez and Mrs. Josefina P.Escoto, both Chief Budget andManagement Specialists.

DBM-RO 8 . . . from p. 6 Orientations on the Online Updatingof PSIPOP (November 26, 2012-January 2013). As part of the digitizationinitiatives of the Department, the FY 2012Personnel Services Itemization andPlantilla of Personnel (PSIPOP), whichcontains a rich source of information ongovernment personnel data such asprofiles, total number of employees,organizational units, and PS budgetrequirement of employees, shall beupdated online, using the web, instead ofthe previous years’ practice of manualupdating. In line with this, DBM RO 8conducted several orientations on theonline updating of PSIPOP to ensure theaccuracy of the FY 2014 PS budget ofagencies under the Region’s jurisdiction.

To optimize use of resources, orientationsfor DepEd were done alongside with thereorientation on the preparation andappreciation of budgeting reports andduring the DepEd’s year-end assessmentand reconciliation seminar-workshopsconducted during the months of Novemberand December in 2012 and in January2013. With the region’s guidance andconstant monitoring, the Office is optimisticthat its clients will be able to update theirPSIPOPs promptly and accurately. Beinga tool used to determine the PSrequirement of the government and basisfor various management decisions,constant and accurate updating of thePSIPOP is crucial.

DBM BulletinJanuary-March 2013 9

create structures for follow-through. It isas much about physical set-ups andspaces as it is psychological. “Decisionmakers do not make choices in a vacuum,”according to The Nudge blog, “They makethem in an environment where manyfeatures – noticed and unnoticed – caninfluence their decisions.”

To illustrate, Cognitive Biases which aredefault thinking frames and patterns weuse when processing information, comeinto play when we make decisions. It iscaused and/or influenced by memories,available information, and individual likesand dislikes. It influences and may skewperspectives and decisions regardless offacts. The more aware you are of yourbiases, the higher the chances that youwould recognize and avoid them to comeup with sound, responsive, and accuratedecisions.

Examples of Cognitive Biases:

a. Confirmation Bias – when we onlyfocus on or look for confirming evidencei.e. we already have, in our mind, thedesire to believe that X is true.

b. Dilution Bias – the tendency for peopleto underutilize diagnostic informationwhen it appears in the presence ofnon-diagnostic information.

c. Sunk-Cost Bias – the tendency to notgive up a decision (a resource, aninvestment) even when the cost ofpushing through with it is higher thanthe cost of letting it go.

This perspective allows us to becomemore aware of our tendencies andinclinations; it looks at leadership as afunction of behavior, which would alsoinfluence how team building, goal setting,and problem solving would be done. Itmakes us recognize that there areunobservable factors that influencedecisions: (a) your emotional and culturalmake-up shape the way you see theworld, (b) we have mental defaults when itcomes to decision making, and (c) ouremotional responses are made outside ofconscious awareness.

The goal of “Nudge” is to show howdecision/choice architecture “can be usedto help prod people to make better choices(as judged by themselves) without forcingcertain outcomes upon anyone, aphilosophy we call libertarian paternalism.The tools highlighted are: defaults,expecting error, understanding mappings,giving feedback, structuring complexchoices, and creating incentives.”

One of the survival skills needed in today’sorganization is the capacity to learn,unlearn, and relearn. Heightened self-awareness and decision making skillswould greatly support this skill. Being aDecision Architect can help us think ofsmarter ways to frame and designresponsive policy, programs, and publicservices. Consciously building a decisioninfrastructure that takes various aspectsof human nature into consideration willprovide options for people to make better-informed decisions and actions.

Application in the PhilippineGovernment Setting

In as much as leadership, culture, andbehavior have been frequently cited asmajor influencers on how politicians andbureaucrats (and even citizens) act in thiscountry, there is very little consideration

of these factors in the spheres of policymaking and program/service design.

The Philippines being the most emotionalsociety5 in the world counts for how webehave, relate, and live. These factorsdeemed soft (albeit scientific), have notbeen taken seriously by policy makersdespite their impact on the generaldirection of public leadership andmanagement. (Admittedly, these are takeninto account during electoral campaigns.)

The Leadership Decision Making (LDM)program showed that globally, science-based approaches on decision-makingand leadership focusing on behavior andpsychology are now accepted andincluded as major considerations in publicmanagement. It has reinforced my ownadvocacy that these factors would helpcreate innov ative developmentinterventions in public service and sustainthe reforms that the Aquino administrationhas begun instituting. It affirmed a personalbelief that at the end of the day, the realroot of structural change is people: theirdecisions about their own work, their own

Fashion StyleStarter. Some 60 men and women of the DBM are treated to a FashionStyle Makeover Session to help contribute to their personality development and personalgrowth by inducing self-confidence through a positive physical self-image. This half-dayFashion StyleStarter activity, held on the first day of the love month, is the first installmentof the Department’s Alternative Learning Sessions. Ms. Joy Cortez-Dauz, an alumna ofthe School of Fashion and Arts Design Institute (SOFA) served as the resource speaker.

Decision Science . . . from p. 5

see page 10

DBM BulletinJanuary-March 201310

lives, and their own relationships and theirvalues, motivations, and commitments.

This, however, is a brave new field that isyet to be introduced to Philippine publicmanagers and decision makers. Thereare many areas in public managementwhere this approach may be applied suchas: (a) in policy making - the influence ofbehavior, cognitive biases, and culture asinputs to management and organizationalpolicies may be considered, (b) in disasterrisk management – an awareness of thecognitive biases and cultural/physical/emotional responses of people duringhours of calamities may inform andcapacitate decision makers to createbetter evacuation procedures and disastermitigation platforms, (c) improve decisionmaking processes and systems/environments so as to filter cognitive biasesto get to the core/most responsive solution,and (d) instal l awareness andaccountability mechanisms and toolswithin processes resulting from relevantstudies in international and Philippinecontexts (evidence-based behaviorresearch).

The way we live would also be the bestplatform for applying these lessons, thislevel of awareness. This poses a biggerchallenge because in the real world, weoften forget to stop, reflect, assess, andcatch ourselves whenever we arebecoming biased, irrational, or unfair,especially when emotions are involved.We also often forget about the weight ofeach decision and the weight of theresponsibility in making them. What more

when you have to confront realities andissues at a fast pace? There lies the truer,bigger test of leadership and decisionmaking – at the level of the self, the team(or family), and the organization (orcommunity).

The article is composed of sectionslifted from the Back-to-Office Reportof ASec. Amador (with modifications)from her participation in LeadershipDecision Making: OptimizingOrganizational Performance Programat the Harvard Kennedy School ofGovernment last October 28 toNovember 2, 2012.

For DBM employees interested inreading the full copy of the report(which includes program materialsi.e. “The Science of Decisions” and“How Anger Poisons DecisionMaking,” etc.), kindly email theauthor. She is very willing to sharethe materials with anyone interested.File copies have also been submittedto the TIS and AS-HRDD.

(Endnotes)1 Drexler, Madeline. “Science of Decisions at the

Kennedy School, art of decision making.”Kennedy School Bulletin, Winter 2009.

2 http://www.jenniferlerner.com accessedDecember 12, 2012.

3 Carey, Benedict. “Academic ‘Dream Team’Helped Obama’s Effort.” The New York Times,electronic edition, November 12, 2012.

4 “Nudge” was presented as a reference materialduring the lecture of Prof. Iris Bohnet on DecisionMaking in Groups, October 30, 2012.

5 2012 survey results of US-based researchgroup Gallup.

The honoree and her well-wishers. Undersecretary Guerrero is joined by her well-wishersled by DBM Secretary Butch Abad during her despedida party held on 6 February 2013.

Decision Science . . . from p. 9

Editor-in-ChiefJoy S. Almazan

Associate EditorJohn E. Lansangan

StaffArturo A. PeraterJeannie S. Ponio

Design ArtistLeonardo D. Sunga

PhotographersRoberto G. FalcesCresencio M. Verana

Circulation ManagersRosendo A. NepomucenoOrlando M. Magdaraog

AdvisersDirector Virginia L. FolloscoUndersecretary Laura B. Pascua________________________________Training and Information Service736-2772/736-2773 (telefax)

Guerrero, or “EVG” as she is fondlyaddressed to by colleagues and friends,served as the longest serving femalenational president of the Association ofGov ernment Accountants of thePhilippines (AGAP) starting 2006 until herretirement in government service this year.Among the highlights of her tenure asAGAP president were: “presiding over theassociation’s 60th Anniversary in 2010;guiding it through its steady growth;steering AGAP to the IT age; seeing itthrough a period of many changes and yetmaintaining the traditions and stabilitythat AGAP is all about.”1

EVG finished her Masters in BusinessAdministration from the PolytechnicUniversity of the Philippines and her BS inBusiness Administration f rom thePhi l ippine School of BusinessAdministration (PSBA). Before she joinedthe DBM, she worked as Clerk 1 in theDepartment of Labor and Employment,Office of the Secretary from October 1,1969 to April 17, 1972.

EVG’s extensive exposure to budgetoperations is backed by her track recordstarting as Accounting Clerk I on April 18,1972. She rose from the ranks to become aChief Accounting Specialist from 1991 to1996; Director II from 1996-1997; Director IVfrom 1997-2000; and Assistant Secretaryfor Operations from 2000-2009.

(Endnote)1 Taken from the Message from the President,

Association of Government Accountants of thePhilippines (AGAP), http://www.agap.org.ph/msg_pres.htm

W O W . . . from p. 5

DBM BulletinJanuary-March 2013 11

Issue:What is the Performance-Based Incentive System (PBIS)?

DBM Response:

The PBIS is a new system of incentives forgovernment employees being introducedper Executive Order No. 801 beginning CY2012. Under the PBIS, governmentemployees may receive these two (2)incentives: (1) the Productiv ityEnhancement Incentive (PEI), and (2) thePerformance-Based Bonus.

The PEI is the traditional annual incentivegiven across-the-board in recognition ofthe f iscal and operationalaccomplishments achieved through thecollaborative efforts of all governmentemployees across all sectors and levelsof the Philippine bureaucracy.

The PBB is a new incentive introducedthrough the PBIS to reward and encourageexemplary performance. It is a top-upbonus given to employees based on theirlevel of contribution to the accomplishmentof their department’s overall targets andcommitments. Departments who achieveat least 90 percent of their set targets(priority program targets and Major Final

Outputs); meet al l four (4) GoodGovernance requirements (namely, themandatory disclosure of budget informationon the agency website, posting of allinvitations to bid and awarded contracts inthe Philippine Government ElectronicSystem, liquidation of all cash advancesfor the year within the reglementary period,and establishment of a Citizen’s Charteror its equivalent); and submit compliancereports on or before the deadline shall bequalified for the PBB.

The delivery units of qualifying departmentsshall be ranked according to theirperformance and the personnel withinthese units shall also be ranked. Theranking of delivery units and personnelshall be based on their actual performanceat the end of the year, as measured byverifiable, observable, credible, andsustainable indicators of performance.

(Endnote)1 Directing the Adoption of a Performance-

Based Incentive System for GovernmentEmployees

Another new undertaking that is beingintroduced in the 2014 budget prepexercise is the Medium-TermInformation and CommunicationHarmonization Initiative (MITHI) whichaims to ensure the coherence of ICTprograms and projects of the Governmentand their consistency with the PhilippineDevelopment Plan 2011-2016 and the five(5) Key Result Areas (KRAs) as identifiedin President Aquino’s Social Contractwith the Filipino people. The first plenaryconference on the Government-Wide ICTPre-Budget Strategic Planning Workshopunder the MITHI was conducted lastJanuary 15 to 18 to help roll out thisinitiative.

The government will also start adoptingthe Unified Account Code Structure(UACS) in all phases of the national budgetcycle starting with the 2014 budgetformulation to harmonize the classificationof accounts for budgeting, accounting,and cash management.

Other budget reforms such as the Zero-Based Budgeting (ZBB), Bottom-UpBudgeting (BuB), Program Budgeting(PB), and the Organizational PerformanceIndicator Framework (OPIF) will still bepursued in the 2014 budget preparation toensure the efficient and effective allocationof funds.

Government agencies and instrumentalitiesare expected to submit their 2014 budgetproposals by mid-April.

A New Home for PS. Procurement Service (PS) Executive Director Estanislao C. Granados, Jr. and DBM Undersecretary Richard E. Moyacut the ribbon to officially open the new PS building in Paco, Manila. The inauguration ceremony, held on 14 February 2013, was attendedby DBM CO and RO officials as well as the founding fathers of PS.

Compensation CompendiumINBOXFrom a compilation prepared by the Organization, Position Classification, andCompensation Bureau (OPCCB)

2014 budget prep . . . from p. 4

DBM BulletinJanuary-March 201312

Service Requirement for Entitlement to Retirement Gratuityunder Republic Act (RA) No. 1616, as Amended

Issue:Whether the contractual or provisionalservices of an employee are included in thecomputation of the twenty-year (20-year)government service requirement under RANo. 16161, as amended2.

Facts:The Claimant in this case started hisgovernment service in 1976 as a contractualemployee. Later, in 1989, his appointmentbecame permanent. In 1994, he resignedfrom government service, but six (6) monthsthereafter he was re-employed by theARMM-Department of Education (DepEd).He retired on June 1, 2006 and opted toavail of the retirement package under RANo. 1616, as amended.

ARMM-DepEd approved his applicationfor retirement under RA No. 1616, asamended with a total creditable service of28.74064 years. However, the DBM deniedfunding on the ground that his governmentservice is short of the required years sincehis services as contractual and provisionalemployee were not considered incomputing his years in government service.

Ruling:Section 1 of RA No. 1616, as amended3

simply requires that an official or employeebe employed on or before May 31, 1977and with at least twenty (20) years ofgovernment service, regardless ofemployment status, the last three (3)years of which should be continuous, inorder to qualify for the retirement gratuityunder RA No. 1616, as amended.

Thus, an official or employee’s governmentservice whether it be on a permanent,provisional or contractual status shall allbe considered in the determination of the20-year government service requirementunder RA No. 1616, as amended. This isexpressly provided under Section 4(a)4 ofExecutive Order No. 966 s. 19845 andreiterated in Civil Service CommissionResolution No. 03-01026 dated January22, 2003. Moreover, the existence of agap at any time before the last three (3)years of government service is not material

for purposes of retirement under RA No.1616, as amended, subject only to theprohibition against double retirement7.

In fine, the 20-year service requirement toavail of the retirement gratuity under RANo. 1616, as amended refers to the totalityof government service rendered regardlessof employment status, with only the lastthree (3) years which is required to becontinuously served.

(Endnotes)1 An Act Further Amending Section Twelve of

Commonwealth Act Number One Hundred Eighty-Six, as Amended, By Prescribing Two OtherModes of Retirement and For Other Purposes.

2 RA No. 4968 entitled, “An Act Amending FurtherCommonwealth Act Numbered One Hundred andEighty-Six, as Amended.”

3 By Section 6 of RA 4968 entitled, “An Act AmendingFurther Commonwealth Act Numbered OneHundred and Eighty-Six, as Amended.”

4 CREDITABLE SERVICE - Subject to existing lawsand these rules, the following shall be consideredcreditable services:(a) All previous services rendered by an officer/

employee pursuant to an appointment whetherpermanent, provisional or temporary.xxx

5 Adopting a Uniform Procedure in the Implementationof Laws for Optional Retirement of Officers andEmployees of the National Government andDirecting Expeditious Payment of RetirementBenefits

6 Calo, Edmundo R. Re: Accreditation of Services;Contract of Service; Appeal.

7 The Supreme Court in the case of TiburcioChaves, Sr. vs. Auditor General Ismael Mathay(37 SCRA 776, 1971) cited the rule enunciated inBorromeo vs. GSIS (L-11011, November 23,1960) that, in the absence of an express legalexception, pension and gratuity laws should beso construed as to preclude any person fromreceiving double pension.

LS Nook Prepared by the LegalService

ETB DayDBM commemorates the EmiliaT. Boncodin Day on March 15.The day also marks the 3rd deathanniversary of the former DBMchief.

PCW clarifies issues on GADPlan and Budget formulation

The Philippine Commission on Women(PCW) clarifies in a forum, attended byalmost 300 participants from variousgov ernment agencies andinstrumentalities, some issues concerningthe formulation of the Gender andDevelopment (GAD) Plan and Budget. Itcited in particular the GAD budget which“should be appropriated within the totalbudget of the agency” and not as “anadditional or separate allocation.”

In a statement, PCW Executive DirectorEmmeline L. Verzosa stressed that“agencies need to work on the budgetgiven by DBM to fund their GAD-relatedprograms, projects, and activities. Wecannot go to DBM and ask for additionalmoney. Spending at least five (5) percentof the agency budget for GAD is notsupposed to diminish the budget intendedfor [the agency’s] regular programs andprojects, but rather influence the remaining95 percent of the budget by infusinggender perspectives in the agencyprograms, projects, and activities.”

(Philippine Commission on Women 2013, PCWpushes correct use of budget to bridge gendergaps. Available from:<http:www.pcw.gov.ph>.[20 February2013].)

“Kababaihan: Gabay saPagtahak sa Tuwid na Daan”

(Women’s Month Theme in 2013)