by PROF. LEONOR MAGTOLIS BRIONES Co-Convenor Social Watch Philippines

1. BUDGET ANALYSISfor ALTERNATIVE BUDGETS and PARTICIPATORY BUDGETING: Part I by PROF. LEONOR MAGTOLIS BRIONES Co-Convenor Social Watch Philippines Presentation at “Building an Asian Community of Practice on Monitoring and Budget Analysis” 9-11 July 2007, Phnom Penh, Cambodia

2. at present, many civil society organizations already do analyses of their governments’ • budgets, especially for social development issues they are advocating, like MDGs • this is because they are aware that government commitments and promises are meaningless and can’t be implemented without proper budgetary support. • at the same time, many civil society organizations recognize that it is not sufficient to do budget analysis. • they do budget analysis with the objective of moving forward to participatory budgeting and alternative budgets

3. the objectives of this afternoon’s session are: • to analyze the budget process common to many developing countries • identify the entry points where civil society organizations can intervene and possibly participate, as well as the skills which are necessary • to analyze the cases of Porto Alegre in Brazil and the Philippines in participatory budgeting and alternative budgets • to examine specific situations in eleven Asian countries, focusing on India, Bangladesh and Cambodia; identify successful interventions in the budget processes of these countries; and • To identify further capacities and skills • which are needed

4. Limited people participation in the budget process of many developing countries • historically , the national budget is prepared by the executive with minimal participation from the people • consultation is at the discretion of the agencies and/or congress or Parliament • the budget starts as a bureaucratic exercise and ends up as a political document • as a result, the budget is more responsive to the bureaucrats’ and legislators’ perception of national priorities than what the people actually need

5. in order to participate effectively and the budget process, it is important for civil society organizations to be conversant with the different phases of the budget. • CSOs can identify possible entry points for their advocacies. Understanding the budget process

6. The budget process: an overview There are four stages in the budget process • budget preparation • budget legislation • budget implementation • budget accountability

7. Budget preparation • determining the budget priorities • The budget is the national development plan expressed in financial terms. • It is prepared on an annual basis; the trend now is towards multi-year budget. • since resources are very limited, these have to be prioritized. It is the president who determines the budget priorities

8. Budget preparation • determining the budget priorities • entry point for CSOs. They can already participate by critiquing or praising the government’s preferred budget priorities • for example, in the 2006 budget of the Philippines, the President’s priorities were reflected in “breaking the odds.” The priorities did not include three MDG goals: health; gender and the environment • for the 2007 budget, there were only three priorities: education, agriculture, and infrastructure

9. Budget preparation, cont’n…. • the role of the DBCC in the Philippines • In many countries there are mechanisms for determining the macro economic targets of the budget. In the Philippines it is the DBCC. • The Development Budget Coordination Committee (DBCC) determines the macro-economic framework of the budget • The DBCC is headed by the DBM as Chair and the members are from Dept. of Finance and its three bureaus—the Bureau of the Treasury, the Bureau of Internal Revenue and the Bureau of Customs—and the Bangko Sentral ng Pilipinas (BSP)

10. Budget preparation, cont’n…. • the role of the DBCC • The DBCC formulates the macroeconomic assumptions on exchange rates, interest rates, balance of trade, in additions to projections of GDP and GNP growth and employment rates • It also consolidates forecasts on levels of revenue, expenditures and borrowing • the DBCC also determines the sectoral allocations of the national budget • entry point for CSOs – sectoral allocations , e.g. economic viz social development; debt service viz productive expenditures, etc.

11. Budget preparation, cont’n…. • the budget call and the agency budgets • once the macro aspects of the budget are determined, the Ministry or Department of Budget issues the budget call to the agencies • the call sets the floor and ceiling for the agency budgets as well as for specific regulations on personnel services, maintenance and rating expenditures, as well as capital expenditures • entry point for CSO’s- engaging the agencies on programs and projects which should be included in the budget proposals

12. Budget preparation, cont’n…. • conduct of hearings by the DBM and integration of agency budgets by the DBM • because of the crucial role of the executive, particularly the DBM, the hearings conducted by it are even more important than that of Congress or Parliament • the final step in the budget preparation process is the integration of the budget, printing of the documents and submission to Congress or Parliament. • entry point for CSO’s-review of the documents to ensure everything is in order. In the 2007 budget, an entire section was missing. This was the set of statistical tables on financing the deficit.

13. Budget Legislation • this is the phase when the national budget is formally legislated by both houses of Congress; the President may or may not exercise veto power; deadlocks and stalemates may ensue. • entry points for CSO’s: detailed review of the documents; briefing for CSO’s and congressional partners • CSO’s determine how much is actually needed to attain social development goals like the MDGs • By comparing the finacial requirements with the actual budgetary allocations financial gaps are determined • preparation of alternative budgets by CSO and congressional budgets • presentation of alternative budgets

14. Budget Legislation, cont’n…. • participation in congressional hearings • media and communications work before and after congressional approval of budget. • working with the Parliament and the Bicameral Committee • mobilization to increase pressure

15. Budget implementation • this is the implementation phase of the budget • entry points for CSO’s: monitoring actual implementation of the budget Philippine example: CSO reaction to food for schools program. Last April 9, DepEd distributed rice to pre school children and their families even if schools were closed

16. Budget Accountability • this is the last phase of the budget process where accountabilities of the implementing agencies are established • entry points for CSO’s- utilize audit reports to demand budget accountability; example: reports on special funds, fertilizer funds; Swiss accounts of former Pres. Marcos in the Philippines, for example

17. CONCLUSION • the budget process can be utilized to increase budget allocations for MDGs and social development • the entry points provide invaluable opportunities to project CSO advocacy, engage government and communicate with the public

18. THANK YOU!!!