IMPROVING PUBLIC INFRASTRUCTURE IS KEY SPENDING AREA FOR 2017; Fiscal agencies tighten link between planning and budgeting to raise potential growth, reduce poverty

Fiscal agencies are pushing for higher infrastructure spending in 2017 in a bid to further improve public infrastructure, raise potential economic growth, and reduce poverty in the country. This will entail not only allocating more funds to build quality infrastructure, but also linking medium-term plan priorities to annual budgetary considerations.


Citing a 2016 International Monetary Fund (IMF) working paper exploring the macroeconomic effects of improving public infrastructure in the Philippines, Budget Secretary Florencio B. Abad said, “Closing the gap between planning and budgeting could lead to GDP growth rates between 9 and 11 percent within 15 years.”


“This can be done by prioritizing new programs within the respective budget ceilings of agencies that supports the strategic priorities of the country or the desired outcomes that we want to achieve over the medium term,” said Abad.


Abad added that for medium term planning to be an effective instrument for socio-economic development, it should not be independent of the annual budget process.


Officials of the Department of Budget and Management (DBM), the National Economic Development Authority (NEDA), and the Department of Finance (DOF) discussed improving the link between planning and budgeting in oversight and implementing agencies last April 1 at a forum and training session held at the Bayleaf Hotel in Manila.


The Three-Year Rolling Infrastructure Program (TRIP), the pipeline of strategic projects needed to sustain rapid economic growth, was presented during the event. The 2017-2019 projects under TRIP will be rolled out this July. These projects include basic infrastructure services and facilities linked to climate resiliency, competitiveness, agricultural sustainability, governance, security, and bridging gaps in poor, hazard-prone, and emerging growth areas.


Infrastructure expenditures now account for 5 percent of GDP, a figure considered the benchmark for infrastructure spending to sustain growth and attract investments that create jobs.


In her opening remarks, NEDA Deputy Director General Rosemarie Edillon said: “Although much improved, our current budget and planning process still needs to be simplified and straightened out. We must ask ourselves how steering further the planning process results in improving agency performance. As we impose higher standards for quality in our work, we must keep in mind how this affects our efficiency as a government.”


According to Edillon, reviewing the respective roles of agencies is important to the whole process. Highlighting that working in silos is not ideal, she also emphasized that agencies should collaborate more closely in working through the complexities of reform.


The session also included presentations on public financial management (PFM) reforms such as the Medium-term Expenditure Framework and Two-Tier Budgeting Approach, Performance-Informed Budgeting (PIB), and the Program Expenditure Classification (PREXC) Approach. These reforms consolidate and institutionalize PFM reforms to synchronize the schedule of activities in line with National Government fiscal calendar, determine and clarify the responsibilities of agencies, and establish a better system for monitoring and evaluation.


“We have made great strides in transforming the national budget; however, we always strive to make budgeting more effective, accountable, and transparent. In fact, this will benefit the bureaucracy in the long haul, because when planning and budgeting are linked, agencies will perform their mandates better. When we strongly link agency outcomes with the country’s priorities, it ensures that spending is directed to deliver services suited to our people’s needs,” the Secretary said.


“In implementing these reforms, we also want to make the bureaucracy results-oriented. When we begin with the outcomes in mind, the rigor and thoroughness we apply to the budget process will translate to more benefits for the Filipino people,” Secretary Abad added.