Philippines Development Forum
SHARING RESPONSIBILITY IN
SUSTAINING ECONOMIC HARVEST
Fiscal Sector: Expenditure Accounts
Secretary Rolando G. Andaya, Jr
Department of Budget and Management
March 8, 2007
Presentation Outline
2007 Fiscal Program
Setting the Foundations/Directions
for the 2008 Budget
Expected Results
2007 Fiscal Program
Policy Framework for 2007
Goal:
Working
towards
sustainable
budget by putting funds in the right
place at the right time, managing
resource allocation effectively, and
ensuring
our
desired
results
through increased capability and
accountability
2007 Fiscal Program




Fiscal Program, 2005-2007
Deficit of P63 B or
0.97% of GDP
Revenue estimate
that is
conservative,
consistent to the
developments in
the economy
Shift from inputbased to outputbased expenditures
approach
Election will not
result in breached
spending limits
Particulars
2005
Actual
2006
Actual
2007
Levels in PB
Revenues
816.2
978.8
1,118.8
Disbursements
962.9
1,040.9
1,181.8
(146.8)
(62.2)
(63.0)
947.6
1,053.3
1,136.6*
Revenues
15.1
16.3
16.9
Disbursements
17.8
17.3
17.9
Deficit
Obligation Budget
(2.7)
17.5
(1.0)
17.5
(0.95)
17.2
Deficit
Obligation Budget
As percent of GDP
* Includes P10B provision for Salary Adjustment
Focus on infrastructure and education …
Sectoral Allocation of the 2007 Budget
Percent Dist’n
Levels in PB
Particulars
2005
GAA 2007*
2005
Growth (%)
2007
2005 vs
2007
Economic Services
157.9
237.0
19.4
21.0
50.1
Social Services
254.3
309.3
28.9
27.5
21.6
44.2
53.6
4.9
4.8
21.3
General Public
Services
141.9
188.4
16.0
16.7
32.8
IP/Net Lending
320.3
337.8
30.7
30.0
5.5
TOTAL
918.6
1,126.1
100.0
100.0
22.6
Defense
* Net of the P10.3 billion provision for Salary Adjustment
Increase in all expense classes
Budget Level by Expense Class, 2005 and 2007
Particulars
Levels (P billions)
2005
2007
Increase/(Decrease)
Amount Percent
Percent Share
2005
2007
Total Budget
918.6
1,126.1
207.5
22.6
100.0
100.0
Personal Services
MOOE
Capital Outlays
Internal Revenue Allotment
Interest Payments
289.2
86.6
77.7
151.6
313.4
335.4
146.3
142.4
183.9
318.2
46.1
59.6
64.6
32.3
4.8
16.0
68.8
83.2
21.3
1.5
31.5
9.4
8.5
16.5
34.1
29.8
13.0
12.6
16.3
28.3
• Increases in departments are made possible due to lower
share of interest payments in the total budget (32% or P340B
in 2006 and 28% or P318B in 2007)—first in 8 years
• Nominally, first in 12 years
Higher infrastructure spending trend…
Particulars
Levels in PB
2005
2007
Inc./(Dec.)
Amount Percent
Roads and Bridges
Airports/Air Navigational Facilities
School Building Program
Irrigation
Electrification
Other Infrastructure
31.3
1.3
3.2
5.3
0.05
15.4
43.7
8.2
5.9
7.4
0.6
26.5
12.4
6.9
2.7
2.1
0.6
11.1
39.4
532.0
84.2
38.8
1,092.3
72.1
TOTAL
56.6
92.3
35.7
63.1
1.0
1.4
Percent of GDP
SONA Commitments:
Infrastructure Spending for Super Regions
(in billion pesos)
Particulars
North Luzon Agribusiness Quadrangle (NLAQ)
Luzon Urban Beltway (LUB)
Central Philippines Super Regions
Mindanao Agribusiness Region
TOTAL
* Releases
2006 *
2007
Inc/(Dec)
Amount Percent
0.27
0.04
2.31
1.46
0.67
1.72
9.04
4.81
0.40
1.68
6.73
3.35
146.8
3,904.7
291.5
229.5
4.1
16.2
12.2
297.6
Educational Programs (1)
(in million pesos)
Increase/(Decrease)
Particulars
2005
2007
Level
Percent
School MOOE
2,811
5,474
2,663
94.7
School building Program
2,000
5,373
3,373
168.7
636
2,064
1,428
224.5
3,717
3,717
377
1,110
733
194.4
HR Training and Development
79
940
861
1,089.9
Pre School Program
23
600
577
2,508.7
Computerization Program
75
280
205
273.3
Textbooks
Creation of teaching and non-teaching
positions
-
Repair and Maintenance of school
buildings and educational facilities
Educational Programs (2)
(in million pesos)
Increase/(Decrease)
Particulars
2005
2007
Level
Percent
Department of Education
GASTPE
1,829
3,140
1,311
71.7
200
200
-
-
53
73
20
37.7
375
441
66
17.6
304
341
37
12.2
61
70
9
14.8
TESDA
PESFA
NCIP
NCIP-EAP
CHED
DOST
SEI
PSHS
Health and Other Social Services
Programs
(in million pesos)
Inc./(Dec.)
Particulars
2005
2007
Level
Percent
NHIP - coverage of indigent sector
750
3,500
2,750
366.7
Expanded program on immunization
317
467
150
47.3
60
354
294
490.0
Establishment of new rehabilitation centers
138
238
100
72.5
KALAHI CIDSS
778
1,226
448
57.6
2,500
3,382
882
35.3
Construction/completion of hospital buildings
Housing
Training for Work Project
-
202
202
-
Technical Education and Skills Development Proj.
356
466
110
30.9
NG FAPs Budget by Department/SPF
FY 2005 and2007
(in billion pesos)
Particulars
2005
Program
%
Share
2007
Program
%
Share
Departments
28.2
76.3
38.3
78.9
DPWH
DOTC
DepEd
DENR
DSWD
DOLE
Others
20.0
2.2
2.2
0.6
1.1
0.6
1.5
54.1
5.8
6.0
1.7
3.0
1.7
4.0
25.3
6.8
1.1
0.7
1.2
0.8
2.4
52.1
13.9
2.2
1.4
2.5
1.7
5.0
8.7
23.7
10.2
21.1
8.2
4.5
3.7
0.6
22.2
12.1
10.1
1.5
9.2
6.6
2.6
1.0
19.0
13.6
5.4
2.1
36.9
100.0
48.5
100.0
Special Purpose Funds
AFMA
DA
DAR/ARF
ALGU
Total
NG FAPs Budget by Donor
FY 2005 and 2007
(in billion pesos)
Particulars
Japan
2005
Percent
2007
Percent
Program Share Program Share
19.1
51.8
32.0
65.9
ADB
4.5
12.2
4.6
9.4
WB
6.6
17.9
6.6
13.6
Others
6.7
18.2
5.4
11.0
TOTAL
36.9
100.0
48.5
100.0
Top Five (5) Departments, 2005
and 2007
Particulars
Levels
(P billions)
2005
DepEd
(incl. SBP)
2007
112 137.3
Increase/
(Decrease)
Amt
%
Rank
2005
2007
25.3
22.6
1
1
DPWH
49.5
79.5
30.0
60.6
2
2
DND (incl.
AFP Mod.)
46.2
49.5
3.3
7.1
3
4
DILG
43.9
51.6
7.7
17.5
4
3
DA (incl.
AFMA)
14.3
24.2
9.9
69.2
6
5
Setting the
Foundations/Directions
for the 2008 Budget
Making the Medium-Term Expenditure
Framework (MTEF) Irreversible
 Introduced in 2007 Budget and being
strengthened for 2008 budget preparation
 Adoption of improved guidelines and templates
for Forward Estimates (FEs)
 Briefing of spending agencies on MTEF and FEs
 Adding more depth to the Paper on Budget
Strategy for presentation to Cabinet
 Enhancing harmonization of planning and
budgeting
 Enhancing the FY 2008 Budget Call
Cascading and Embedding the
Organizational Performance Indicator
Framework (OPIF) in the 2008 Budget
 Cascading the OPIF to bureaus and attached
agencies of the 20 pilot departments, and
introduction to OEOs
 Development of departments-wide log frames
and Performance Indicators (PIs)
 Costing og Major Final Outputs (MFOs) to
mainstream OPIF in budget
 Intensive capability building on OPIF
methodologies
 Streamlining of fund releasing to support agency
operational targets
 Strengthening internal control systems
Expected Results
Expected Results
 Accelerated
reduction of 2007
deficit from the planned 2 %
of GDP to 0.9 %
 More productive government
expenditures, particularly in
infra and social services
 Balanced budget by 2008
Thank you