2. Good morning !

3. PAGBA bago budget traditions budget structure new

4. PERFORMANCE-INFORMED BUDGETING For FY 2014 Adoption

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

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

7. 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 PhilGEPS

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

9. What is a Performance-Informed Budgeting?

10. 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.

11. 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)

12. Why Shift to Performance- Informed Budgeting ?

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

14. 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)

15. 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)

16. PERFORMANCE - INFORMED BUDGET 2014

17. 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)

18. 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 Features Performance-Informed Budget (IMF, TA, 2013)

19. IMF TEMPLATE

20. IMF Proposed Budget Structure

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

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

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

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

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

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

27. Cont.. DBM Modifications IMF Template Presentation in th e budget docs: –PAPs under the MFOs –Details by Object of Expenditure –Details of Staffing Resources Presentation of a 5-year Expenditure Program (2012-2016) in the NEP DBM Template - Projects and Activites to be presented in separate Volume - Details by Object of Expenditure to be reflected in the BESF -Staffing Summary maintained as a separate document 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)

28. DBM TEMPLATE

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

30. DBM- Modified Budget Structure Template SECTION 1: EXPENDITURE PROGRAM (in pesos) No. / Code GASS / STO/ OPERATIONS /PROJECTS 2012 Actual 2013 Current 2014 Proposed 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

31. DBM- Modified Budget Structure Template STAFFING SUMMARY TOTAL STAFFING201220132014 Total Number of Authorized Positions Total Number of Filled Positions

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

33. SECTION 2: EXPENDITURE PROGRAM BY CENTRAL/REGIONAL ALLOCATION (in pesos) DBM- Modified Budget Structure Template REGION PSMOOECOTOTAL Central Office Regional Allocation (net of CO): NCR Region I Region II Cordillera Administrative Region Region III Region IV-A Region IV-B Region V Region VI Region VII Region VIII Region IX Region X Region XI Region XII Region XIII ARMM TOTAL AGENCY BUDGET

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

35. DBM-Modified Budget Structure Template KEY STRATEGIES FOR 2014 MFO / PIs 2014 Targets 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 SECTION 4: PERFORMANCE INFORMATION

36. Considerations on the New Budget Structure

37. Considerations on the New Budget Structure (cont.)

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