Good morning PAGBA bago new budget traditions new

Good morning !

PAGBA bago new budget traditions new budget structure

PERFORMANCE-INFORMED BUDGETING For FY 2014 Adoption

OUTLINE o What is a Performance-Informed Budgeting? o Why shift to Performance-Informed Budgeting? v current Org’l. Performance Indicator Framework (OPIF) v major features of the new budget template o IMF Template o DBM Template o Considerations of the DBM Template

DBM as a Driver of Reforms New Budget Directions New Budget Traditions

BUDGET REFORMS – Restoring Public Trust • Re-introduction of the Zero Based Budgeting (ZBB) • Mandatory Fiscal Transparency • Faster and Efficient Budget Execution • Early Procurement • Account Management Teams (AMTs) • DPWH as principal infra agency • Tighter Performance Management • OPIF • Results-based Performance Mgt. System • Performance-based Incentives • Leveraging Technology thru GIFMIS and Phil. GEPS

Budget Traditions OLD NEW • Re-enactment of the previous • Early enactment of the GAA by Congress year’s GAA • Preponderance of lump-sum funds in the budget • Disaggregation of lump-sum funds in the budget • 2 years validity of appropriations • 1 year validity of appropriations (2013) • Several release documents • GAA as release document (2014) • New Face of the Budget or

What is a Performance-Informed Budgeting?

IMF TECHNICAL ASSISTANCE ON “STRENGTHENING PERFORMANCE BUDGETING” February 7 – 20, 2013 § to advise DBM on developing a performance oriented and improved budget structure to make it more comprehensible and reader friendly.

Performance-Informed Budgeting “ A set of integrated processes that aims to improve the efficiency and effectiveness of public expenditure by linking the funding to the results, making systematic use of performance information, although not solely, in resource allocation and management” (IMF, TA. 2013)

Why Shift to Performance. Informed Budgeting ?

Present Scenario OPIF Major Final Outputs/ Indicators General Appropriations Act (GAA)

OPIF Strength and Weakness • OPIF is a building block to performance budgeting, but has limits. • The strength of OPIF over the past budgeting system is also its weakness: its performance information is solely output focused, lacks outcome information thus preventing analysis on the effectiveness of the programs. • Output focus provides ease in establishing accountability but might displace goals of departments and their intended impact on the wider society (IMF, TA, 2013)

OPIF Strength and Weakness (cont. ) • It could only focus on easy measurable outputs, but cross-cutting issues could be ignored • Or worse, output-alone focus may lead to perverse incentives to program managers • Lacks clarity between concepts of MFO, program and activity (IMF, TA, 2013)

2014

Features Performance-Informed Budget • It should integrate both strategic planning and performance information: • Program allocations linked to outputs and outcomes measures • Department/agency mandates, vision, mission, objectives and sector outcomes (MTPDP/KRAs) are presented (IMF, TA, 2013)

Features Performance-Informed Budget • Simpler presentation: • appropriations are at the program level • Allows agency greater flexibility in budget utilization, realignment • Improves budget predictability: • two out years FEs will be shown (IMF, TA, 2013)

IMF TEMPLATE

IMF Proposed Budget Structure Sec. 1 Strategic Objectives Sec 2 Program Expenditures 2012 -2016 Vision Strategic Management Administration PS, MOOE, CO (Domestic, FAPs) Mission Programs Key Result Areas PDP Sector Outcome PS, MOOE, CO (Domestic, FAPs) Total Budgetary Allocation COE & CO (Domestic, FAPs) Sec. 3 Staffing Resources Total Agency Staff Sec. 4 Key Performance Indicators 2012 -2016 Key Tasks for 2014 Key Performance Indicators Output Indicators Program Outputs Key Performance Indicators Outcome Indicators -Agency Oucome -Program Outcome

IMF Proposed Budget Structure Sec 1 - STRATEGIC OBJECTIVES VISION: MISSION: KRA: PDP SECTOR OUTCOME:

Sec. 2 - Program Expenditure No. Program(MFO) 2012 Actual Exp 2013 Approved Budget 2013 Revised Estimate 001 Strategic Management Administration 01 • PS 02 • MOOE 03 • Capital-Domestic 04 • Foreign Assisted Projects 002 Program A etc. 01 • PS 02 • MOOE 03 • Capital-Domestic 04 • Foreign Assisted Projects TOTAL BUDGET ALLOCATION /CEILING • COE • Capital - Domestic • Capital - Donor 2014 Budget Estimates 2015 Forward Estimates 2016 Forward Estimates

Sec. 3 - STAFFING RESOURCES (Funded Positions) TOTAL AGENCY STAFF Sec. 4 - PROGRAM PERFORMANCE INFORMATION KEY TASKS FOR 2014: KEY PERFORMANCE INDICATORS OUTPUT INDICATORS Program A Indicator 1 Indicator n Program B etc. Indicator 1 Indicator n 2012 2013 2014 Actual Estimate Planned 2015 Target 2016 Target

KEY PERFORMANCE INDICATORS OUTCOME INDICATORS Agency Outcomes • Indicator 1 • Indicator n Program Outcomes Program A • Indicator 1 • Indicator n Program B etc. • Indicator 1 • Indicator n 2012 Actual 2013 Estimate 2014 Planned 2015 Target 2016 Target

National Budget Memorandum 117 dated March 1, 2013 Adoption of the Performance-Informed Budget Structure for the NEP/GAA

Modifications: Limit disruptions, without sacrificing information IMF Template • Translation of ‘Programs’ as defined by the IMF to MFOs DBM Template • Use MFOs instead of ‘Programs’ – MFO transitioning into program statements • Treatment of GASS/STO and Projects (locally funded/FAPs) – Strategic Management Admin. - GASS ) - STO ) maintain the present (SMA instead of GASS & STO) – Projects were allocated across • Specific Projects are presented in the Programs (not shown) template • By Allotment Class / Object • Add Financial Expenses as 4 th expenditure classification (if applicable)

Cont. . DBM Modifications IMF Template DBM Template • Presentation in the budget docs: – PAPs under the MFOs - Projects and Activites to be presented in separate Volume – Details by Object of Expenditure - Details by Object of Expenditure to be reflected in the BESF - Staffing Summary maintained as a separate document – Details of Staffing Resources • Presentation of a 5 -year Expenditure Program (2012 -2016) in the NEP • Presentation of a 3 -year Expenditure Program (2012 -2014) in the NEP, excluding the following: – CY 2013 Revised Estimate – 2 out years for FEs (2015 & 2016) • Expenditure Program (2014 only)

DBM TEMPLATE

DBM- Modified Budget Structure Template (NAME OF DEPARTMENT) (NAME OF AGENCY) STRATEGIC OBJECTIVES MANDATE VISION: MISSION: KEY RESULTS AREAS SECTOR OUTCOME: ORGANIZATIONAL OUTCOME: (source document – Agency Charter) (source document – Citizen’s Charter) (source document – Agency Charter) (source document – EO 43) (Updated PDP statement, if available or updated OPIF Logframe)

DBM- Modified Budget Structure Template SECTION 1: EXPENDITURE PROGRAM (in pesos) No. / Code GASS / STO/ OPERATIONS /PROJECTS General Administration and Support PS MOOE CO Support to Operations PS MOOE CO Operations /1 PS MOOE CO Projects /2 PS MOOE CO TOTAL AGENCY BUDGET PS MOOE CO 2012 Actual 2013 Current 2014 Proposed

DBM- Modified Budget Structure Template STAFFING SUMMARY TOTAL STAFFING Total Number of Authorized Positions Total Number of Filled Positions 2012 2013 2014

DBM- Modified Budget Structure Template SECTION 1: EXPENDITURE PROGRAM OPERATIONS BY MFO (please specify) /1 PROPOSED 2014 PS MOOE CO TOTAL MFO 1 MFO 2 MFO 3 MFO 4 PROJECTS PROPOSED 2014 (specify the name of projects) /2 Locally-Funded Foreign-Assisted PS MOOE CO TOTAL

DBM- Modified Budget Structure Template SECTION 2: EXPENDITURE PROGRAM BY CENTRAL/REGIONAL ALLOCATION (in pesos) REGION Central Office Regional Allocation (net of CO): NCR Region II Cordillera Administrative Region III Region IV-A Region IV-B Region VIII Region IX Region XIII ARMM TOTAL AGENCY BUDGET PS MOOE CO TOTAL

DBM – Modified Budget Structure Template SECTION 3: SPECIAL PROVISIONS SP No. 1 SP No. 2 SP No. 3 (other SPs)

DBM-Modified Budget Structure Template SECTION 4: PERFORMANCE INFORMATION KEY STRATEGIES FOR 2014 MFO / PIs MFO 1: Performance Indicator No. 1 Performance Indicator No. 2 Performance Indicator No. 3 MFO 2 Performance Indicator No. 1 Performance Indicator No. 2 Performance Indicator No. 3 MFO 3 Performance Indicator No. 1 Performance Indicator No. 2 Performance Indicator No. 3 2014 Targets

Considerations on the New Budget Structure Complies with existing Constitutional Provision as to form and content • By sllotment class • By department/ agency • By Operating Unit Accommodates 3 -year latest MFO configuration • 2012 to 2013 use of existing MFOs (not yet restructured) • 2014 use of restructured MFOs Configures the GAA as budget release document. Fund release guidelines shall provide the conditions and limitations as to degree of flexibility

Considerations on the New Budget Structure (cont. ) 1 st initial pages of the NEP/ GAA • Overview of the Budget Structure • General Provisions Special Provisions Separate Volume of the NEP/GAA • All SAGFs • Comparison of Appro. & Obligations (2012 -2014) • Use of Income • Details of Expenditures by Programs/Activities, 2014 • Expenditure Program by Operating Unit. 2014

Dir. Cita P. Mahinay BTS, DBM PAGBA - April 5, 2013