1 st PAGBA Quarterly Meeting and Seminar Public Financial Management Reforms

1. 1st PAGBA Quarterly Meeting and Seminar Public Financial Management Reforms Towards Inclusive Development Secretary Florencio B. Abad Department of Budget and Management

2. Objectives of Effective PEM PUBLIC EXPENDITURE MANAGEMENT FISCAL DISCIPLINE ALLOCATIVE EFFICIENCY OPERATIONAL EFFICIENCY “SPENDING WITHIN MEANS” “SPENDING ON THE RIGHT PRIORITIES” “SPENDING W/ MEASURABLE RESULTS” Schick (1998) and author’s interpretations

3. 2010-2012: Restoring Public Trust

4. Opening Salvo: Zero-Based Budgeting “Anganumangpagbabago ay magmumula sapagsiguronatinnamagwawakasnaangpagigingmaluho at pagwawaldas.”

5. Commitment to Fiscal Consolidation

6. Tighter Alignment with Priorities • 2010: Zero-Based Budgeting • 2011: Alignment of Budget with 5 Social Contract KRAs • Transparent, Accountable & Participatory Governance • Poverty Reduction and Empowerment of the Poor • Rapid, Inclusive and Sustained Economic Growth • Just and Lasting Peace and Rule of Law • Integrity of the Environment and Climate Change Adaptation and Mitigation • 2012: Program Budgeting Approach

7. Delivering the Dividends of Reform Increased Share of Social, Econ Services Source of Basic Data: DBM

8. Delivering the Dividends of Reform Meaningful Social Services • Pantawid Pamilyang Pilipino • Expansion to cover 4.6M by 2015 • Supplants dependency ties w/ traditional patrons • Closing the Gaps in Human Investments • Supporting K-12 Basic Education Reform by closing teacher, classroom, textbook gap • Supporting Universal Healthcare by covering Q1&Q2 in NHIP & closing rural health unit gap

9. Faster Budget Execution • 2010: Disaggregation of Lump Sum Funds • 2011: Procurement Innovations (Early Procurement & Expansion of PhilGEPS) • 2012: Account Management Teams • 2013: One-Year Validity of Appropriations

10. Performance Budgeting • 2011: Review of Organizational Performance Indicator Framework • 2011: Started Work on Results-Based Performance Management System • 2012: Performance-Based Incentive System and Performance-Based Bonuses

11. Fiscal Transparency and Participation • 2010: Government-CSO Principles of Constructive Engagement • 2011: Mandatory Disclosure Provisions (2012: Transparency Seal) • 2011: NGA-CSO Budget Partnerships • 2011: Use of Technology for Transparency (PDAF webpage, BudgetNgBayan.Com, etc.) • 2012: Bottom-Up Budgeting

12. Leveraging Technology • Government Integrated Financial Management Information System • Philippine Government Electronic Procurement System • Government Manpower Information System and National Payroll System • Cashless Purchase Cards

13. PH: “Newest Aspiring Tiger” Inquirer Front Page

14. Challenge for 2013-2016: Inclusive Development

15. Wealth & Power in the Hands of a Few

16. PFM Reform in Support of Inclusive Growth • Fiscal Discipline: sustain trajectory of fiscal consolidation, 2% deficit-to-GDP by 2013 • Allocative Efficiency: put horse before cart through Budget Priority Framework • Operational Efficiency: new face of budget: • Budget as Release Document • Performance-Informed Budget • Deeper Fiscal Transparency & Participation

17. PAGBA as Key Advocate of Reform

18. 1st PAGBA Quarterly Meeting and Seminar Public Financial Management Reforms Towards Inclusive Development Secretary Florencio B. Abad Department of Budget and Management