1. Expenditure and Strategic Allocation of Resources
Romulo E. M. Miral, Jr.
6 June 2017

2. Phil Credit Rating: Investment Grade Summary of current credit views
strengths
weaknesses
Robust economic growth amidst macroeconomic stability, anchored by well-managed inflation
Strong external payments position
Stable and resilient banking system
Low revenue mobilization relative to investment-grade peers
High, albeit declining, foreign currency government debt
Low per-capita incomes

5. Asian Development Bank (2007)
Asian Development Bank (2007). Philippines: Critical Development Constraints

6. Policy is medium term, Budget is short term
Allocative efficiency: The numbers tell the story …

7. Fiscal Planning and Reporting

8. MTEF DEFINED
A three-year rolling budgeting approach that sets out Government’s expenditure plans within an available resource ceiling.
A tool for linking policy, planning & budgeting over the medium-term for fiscal discipline and strategic resource allocation;
It consists of a top-down resource allocation and a bottom-up estimation of the medium-term costs of existing policies or PAPs in order to determine fiscal space;
Involves rolling over of ongoing programs to provide predictability while allowing the incorporation new or changes in policies

9. WHAT HAVE WE DONE UNDER MTEF?
Kept budget deficits manageable at 1% in 2006 to 3.5% in 2010;
Restructured the budget towards more funds for non debt expenditures, specially infrastructure outlays;
Increased focus on results by affording predictability of policy and funding so that agencies can plan ahead and programs can be sustained;
Provided line agencies with increased autonomy over program choice, thereby increasing incentives for efficient and effective use of funds.
SECRETARY EMILIA T. BONCODIN
Department of Budget and Management
February 5, 2004

10. MTEF
“While its principal focus is to promote allocative efficiency, an MTEF necessarily instills aggregate fiscal discipline and enhances operational efficiency.”
Jose Edgardo Campos and Laura Walker, ADB

11. Medium Term Fiscal Position

12. Two-tiered budget preparation system
Baseline agency budget – all expenditures on on-going programs
Budget ceiling – can be set at total domestic revenues plus sustainable level of borrowing
Above the baseline budget (Fiscal space) – expenditures on all new programs
Jose Edgardo Campos and Laura Walker, ADB

13. Critical Tools Economic Assumptions and Revenue Forecasts
Policy/Program Cost Estimates
Plan and Budget Linkage

14. Thank you.