Peoples Budget 2013 PDF

2013 Peoples Budget
Produced by the Philippine Department of Budget and Management

Some Rights Reserved under Creative Commons BY-NC-SA 3.0 License
15 March 2013
Production Team:
Usec. Laura B. Pascua
Training and Information Service
Fiscal Planning Bureau
OSEC-Public Information Unit
Information Consolidated by:

Fiscal Planning Bureau
Budget Technical Service
Budget and Management Bureaus A to G
Design:
Gianne Gaoiran, OSEC-PIU
Graphics by Flux Design Labs
Paggugol na Matuwid sa Budget ng Bayan:

Kataas-Taasang Atas ng Taumbayan
For questions, comments and suggestions, email publicinfo@dbm.gov.ph or

call 490-1000 loc. 6202 (Public Information Unit).
contents
I. 2013 Empowerment Budget
Paggugol na Matuwid: Atas ng Taumbayan 4
Summary of the 2013 Empowerment Budget 6
Principles and Strategies of the 2013 Empowerment Budget 10
Financing the Budget 18
II. Expenditure Priorities

Anti-Corruption and Transparent, Accountable and 24
Participatory Governance
Poverty Reduction and the Empowerment of the Poor 28
Rapid, Inclusive and Sustained Economic Growth 38
Just and Lasting Peace and the Rule of Law 44
Integrity of the Environment and 46
Climate Change Adaptation and Mitigation
III. Basics on Budgeting

The National Budget 52
The Budget Cycle 56
Glossary 66
section 1
2013
empowerment
budget
Paggugol na Matuwid: Atas ng Taumbayan
The people are a nations greatest wealth. Their abundant talent and skill, their unflagging sense of national
identity and cultural pride
these drive and sustain us in our campaign for genuine socio-economic progress.
The administration of President Benigno S. Aquino III recognizes the peoples inherent power and constantly
assures them that these is theirs to exercise
as they did in EDSA People Power in 1986, and again when they
supported and elected President Aquino in 2010.
The Aquino government has thus chosen to focus on the Filipino peoples crucial role as partners in shaping
the nations future. With this, the government must optimize its resources to liberate the people from the
shackles of poverty, and invest in their capabilities and welfare through meaningful social and economic
services. As expressed in his Social Contract with the Filipino People, President Aquino knows that
empowering the people as nation-builders requires transparent, accountable and participatory governance.
Moreover, the Administration has broadened its parameters in crafting the 2013 Empowerment Budget: that
is, to involve as many Filipinos as it could reach in this decision-making process. In particular, it engaged
members of civil society, peoples groups, and communities representing the countrys most marginalized and
impoverished people compelled by a shared vision of a more vibrant, vigorous Philippines, but whose voices
have gone unheard through the years. This greater openness and deeper public engagement in the budget
process stems from this realization: government cannot anymore claim to have a total mental grasp of the
realities that its people face on the ground.
In crafting the 2013 Empowerment Budget, the government has, therefore, adopted the precept Atas ng
Taumbayan. This reflects President Aquinos commitment to meet the peoples most urgent needs, as well as
bring them to the very center of the Administrations agenda for rapid, inclusive, and sustainable development
for all Filipinos.
These commitments are not out of the Presidents generosity, but in keeping with peoples sovereign will,
which they expressed resoundingly in the May 2010 Elections: for government to finally operate with only the
peoples interests in mind. In other words, kung walang corrupt, walang mahirap.
PEOPLES BUDGET 2013 7
Summary of the 2013 Empowerment Budget
The governments response to legitimate claims on exhaustible resources reflects its priorities and
values. In recognition of the right of each individual to have a voice in shaping social policies as well in the
determination of political affairs, the government based the 2013 Empowerment Budget on the results of
consultations with the people who stand to be affected by it.
Here, then, is the P2.0059-trillion National Budget for 2013 in a nutshell:
2,005.90
IN BILLION PESOS
1,816.00
1,580.02
Total Obligation Budget
1,472.98
Net of Interest Payments
1,434.15
1,314.61
1,155.51
1,672.00
1,044.83
1,482.90
947.55
867.01
825.11
1,301.02
1,178.73
1,155.28
1,042.40
887.71
734.72
647.75
606.11
598.71
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012* 2013*
*Approved GAA levels. All the rest are based on actual obligations.
What is the government budget?
A government budget is It is a tool for economic It is a tool to improve human It is also an instrument
a financial plan to pursue growth through its development by investing for good governance, as
the priority programs and allocations for infrastructure, in basic social services like implementing agencies are
projects of the government agriculture, science and education, health and social accountable for the use
and its development thrusts. technology, and other areas welfare. of their given budgets by
that will help generate delivering targeted results.
employment and increase the
countrys productivity.
8 PEOPLES BUDGET 2013

Budget by Sector
P2.006 TRILLION
34.9% P699.4 B 25.4% P509.2 B
Economic Services
Social Services
18.0% P360.4 B
17.3% P347.3 B
Debt Burden
General Public Services 4.5% P89.5 B

Defense
The biggest portion of the National Budget still goes to the social services sector. These include education,
health care, housing and other services provided by the government to raise the quality of life of the poor and the
marginalized.
The budgetary allocation for economic services has increased by an emphatic 16 percent to support the economys
expansion in an inclusive and sustained way: that is, in a way that creates meaningful jobs and improves incomes
for our people.
Meanwhile, the Budget for carrying the National Governments Debt Burden stands at 18 percent of the total
budget, down from 19.6 percent in 2012 and 22.6 percent in 2011.
The rest of the Budget will be needed to support General Public Services as well as Defense.

Budget by Expense Class
CURRENT OPERATING EXPENDITURES
Personnel Services 640.6 B (31.9%)
MOOE 312.9 B (15.6%)
Subsidies to GOCCs 42.9 B (2.%)
Allotments to LGUs 241.8 B (12.1%)
Tax Expenditure Fund 26.9 B (1.3%)
CAPITAL OUTLAYS
Infrastructure and Other COs 297.1 B (14.8%)
Equities to GOCCs 2.0 B (0.1%)
Capital Transfers to LGUs 76.3 B (3.8%)
CARP Landowners Compensation 5.0 B (0.2%)
DEBT BURDEN
Interest Payments 333.9 B (16.6%)
Net Lending 26.5 B (1.3%)
TOTAL 2,005.9 B
Personnel Services increased by 7.9 percent to P640.6 billion to support the full implementation of the Salary
Standardization Law III and the hiring of teachers, nurses and other needed public servants.
Maintenance and Other Operating Expenditures (MOOE) jumped by 17.5 percent to P313.3 billion to support
the expansion of the Administrations priority social and economic programs.
Infrastructure and Other Capital Outlays (COs) went up by 17.7 percent to P297.1 billion from P252.4 billion
in 2012 to support infrastructure projects that are necessary for transport, tourism, and agriculture industries.
Debt Burden continues to decrease due to smart financing strategies adopted by government. In particular, the
share of interest payments has decreased to 16.6 percent in 2013, from 18.3 percent in the previous year.
Subsidies and Equity for GOCCs posted a significant increase of 105.8 percent, bringing the total to P44.9
billion, due to increased allocations for infrastructure projects to be implemented by GOCCs.
LGU Shares in the National Budget also rose by 9.7 percent to P318.1 billion due to improved revenue collections
in 2010, the base year for computing the Internal Revenue Allotment (IRA) of LGUs for 2013.

Budget by Region
P129.63 B P192.08 B
The National Budget alloted for
regions increased by 27.1 percent to NCR
P979.1 billion, accounting for 48.8
percent of the total budget for 2013.
In comparison, the P770.5 billion P402.58 B
allocation for the regions in 2011 VISAYAS
was only 42.4 percent of the budget.
The budgetary allocations for P254.82 B

Visayas and Mindanao rose
significantly by 20.7 percent
and 20.3 percent, respectively.
Mindanao, in particular, has the
highest per-capita National Budget
at P10,990.
LUZON MINDANAO
CAR
P31.38 B
REGION I REGION 2
P49.54 B P44.61 B
REGION 3
P87.26 B
NCR
P129.63 B
REGION 5
P62.16B
REGION 4
P127.64 B
REGION 8
P55.38 B
REGION 6
P73.32 B
REGION 13
REGION 7 P34.29 B
P63.38 B
REGION 10
REGION 9 P47.61 B
P41.46 B REGION 11
P46.75 B
ARMM
P41.46 B REGION 12
P42.84 B

Top 10 Departments* and List of Per-Department Budget
DEPARTMENTS 1,048 B
Congress of the Philippines 10.71 B

DepEd Office of the President 2.73 B
P293.36 B Office of the Vice-President 420 M
Department of Agrarian Reform 21.43 B
Department of Agriculture 65.07 B
Department of Budget and Management 998 M
Department of Education 250.41 B
State Universities and Colleges 34.92 B
Department of Energy 4.35 B
DPWH Department of Environment and Natural Resources 23.68 B
P155.22 B Department of Finance 30.85 B
Department of Foreign Affairs 11.71 B
Department of Health 51.91 B
Department of Interior and Local Government 92.35 B
Department of Justice 10.89 B
DILG Department of Labor and Employment 8.12 B
P121.75 B Department of National Defense 80.61 B
Department of Public Works and Highways 169.33 B
Department of Science and Technology 10.09 B
Department of Social Welfare and Development 56.43 B
Department of Tourism 2.81 B
DND Department of Trade and Industry 3.74 B
P121.60 B Department of Transportation and Communications 35.75 B
National Economic and Development Authority 5.08 B
Presidential Communications Operations Office 1.31 B
Other Executive Offices 11.02 B
Autonomous Region in Muslim Mindanao 14.06 B
DA
Joint Legislative-Executive Councils 2M
P74.76 B
Judiciary 17.77 B
Civil Service Commission 993 M
Commission on Audit 8.10 B
DSWD Commission on Elections 8.42 B
P56.43 B Office of the Ombudsman 1.73 B
Commission on Human Rights 318 M
DoH
SPECIAL PURPOSE FUNDS 957.77 B
P54.18 B
Budgetary Support to Government Corporations 71.40 B
DoTC Allocations to Local Government Units 319.84 B
P37.08 B Calamity Fund 7.50 B
Contingent Fund 1B
DoF Department of Education - School Building Program 1B
P33.16 B E-Government Fund 1B
DENR International Commitments Fund 2.64 B
P23.71 B Miscellaneous Personnel Benefits Fund 69.09 B
Pension and Gratuity Fund 98.72 B
* The amounts indicated here include the respective Priority Development Assistance Fund 24.79 B
departments allocations under the MPBF, PGF, BSGC, Tax Expenditures Fund 26.90 B
and other Special Purpose Funds. Debt Service Fund - Interest Payment 333.90 B

Principles and Strategies of the 2013 Empowerment Budget
This Budget pursues empowerment by creating more opportunities for public participation in governance. It
invests significantly in the peoples capabilities by prioritizing funding for public services that provide jobs,
educate our youth, ensure a healthier citizenry, and empower each Filipino to participate in economic activity.
The Aquino Administration followed these principles in crafting the 2013 Empowerment Budget:
Accelerated Completion of Stronger Government

Priority Program Targets Accountability to Perform
Greater and Deeper

Commitment to the
Aquino Social Contract
Transparency for Faster Budget Greater Stakeholder Participation in

Execution and Clearer Results Budget Preparation and Execution

Greater and Deeper Commitment to the Aquino Social Contract
The 2013 National Budget is designed to deepen and reinforce the implementation of President Aquinos Social
Contract with the Filipino people. The Budget reflects the Presidents belief that the best way to combat poverty is
to establish and nurture a society founded on justice and fairness, compassion and mutual support, and concern
for the environment. Such a society will not have room for corruption.
The Budget focuses government resources on the five Key Result Areas of Social Contract, as defined in Executive
Order No. 43:
The Aquino Administration wants to make sure that public funds go to these priority areas. Using the Program
Budgeting Approach, the Administration defined key component programs per KRA, as well as their intended
outputs and outcomes, which should be prioritized in the allocation of funds. This new approach also helps
government improve the coordination and collaboration between its departments and agencies.
The Zero-Based Budgeting Approach has also been used to scale down funding for activities which are not
aligned with the priority programs, or which are otherwise inefficient and ineffective, and fraught with leakages.
Zero-Based Budgeting requires each agency or department to justify its entire budget every year, building from a
base of zero.

Accelerated Completion of Priority Program Targets
To speed up the pace of implementing and completing priority programs, government has to rethink existing
structural configurations in government and introduce changes accordingly.
One of these innovations is to assign the Department of Public Works and Highways (DPWH) as the
Principal Infrastructure Agency, to which all capital outlays for the construction of classrooms, rural health
facilities, hospitals, and farm-to-market roads, among others, have been transferred for implementation.
This allows Agencies to Focus on Accelerating the Delivery of their Core Mandates. Social service delivery
agencies like the Department of Education (DepEd), for example, will focus on improving literacy and cohort
survival through the implementation of its K-12 Program; and the Department of Health (DoH) on delivering its
Universal Health Care.
To speed up the implementation of infrastructure and other projects, government agencies like the DPWH have
been tasked to conduct Early Procurement: meaning, to undertake bidding, short of award, even before the
approval of the Genral Appropriations Act (GAA). This has allowed them to award contracts and start projects
on the first day of 2013. With this innovation, the DPWH, for instance, has been able to award 84 percent of all its
infrastructure projects as of 31 January 2013.
Account Management Teams (AMTs) have also been deployed to monitor the performance of agencies more
closely, to speed up the delivery of priority programs and projects, to identify and address critical implementation
bottlenecks, and to make sure that nothing crucial falls through the cracks. These AMTs have been deployed in
nine major departments:
Department of Public Works and Highways Department of Agrarian Reform
Department of Education Department of Transportation and Communications
Department of Health Department of National Defense
Department of Social Welfare and Development Department of Interior and Local Government
Department of Agriculture

Stronger Government Accountability to Perform
The Government has brought accountability to the people to a higher level, ensuring that government transactions
are done with fairness and consistency, particularly by ensuring the close linkage of plans, budgets and
performance.
With this, the Empowerment Budget of 2013 deepens the practice of Performance-Based Budgeting: where each
peso leads to concrete and measurable results. The system necessitates a close and careful look at performance
indicators to determine the results of our work, the effectiveness of our actions, and points for improvement.
Fairness is one of the pillars of the Aquino administrations reform platform. With this, it wants to make sure that
good performers are properly awarded, be they government agencies or individual employees. To move towards
this direction, the Administration is reconciling and harmonizing all disparate performance management
systems in government into a single Results-Based Performance Management System (RBPMS). Through
this, government will be able to monitor the performance of each agency and individual government worker based
on measurable results indicators and performance benchmarks.
To reward public institutions and public servants who meet or even surpass their outputs and commitments
under the Aquino Social Contract, this Budget introduces a Performance-Based Incentive System (PBIS). As
President Aquino has expressed in his 2012 State of the Nation Address, simula ngayon, magpapatupad tayo ng
sistema kung saan ang bonus ay nakabase sa pagtupad ng mga ahensiya sa kanilang mga target para sa taon. Under
the 2013 Budget, P9.97 billion has been allocated to fund the incentives under this new system.

PERFORMANCE-BASED BONUS
How can a department qualify for the PBB? Why change the current
incentive system?
Achieve at least 90% of Major Final Output (MFO) targets and
1 Priority Program targets under Key Result Areas in EO43.
MFOs of agencies are measured on the basis of how the needs of the
citizens are efficiently and effectively addressed by the products or services
With the current incentive system,
that the agency is mandated to deliver. For Example: across-the-board bonuses are given
uniformly to all civil servants.
Department of Education Department of Health
% of school leavers targets 2,800 healthworkers
compared to previous year in rural areas for 2013
Meet 2 to 3 Good Governance conditions or requirements set by the

2 AO25* Task Force annually under the performance drivers of the
Results-Based Performance Management System (RBPMS).
Service delivery by the bureaucracy can be
improved by linking personnel incentives to
the bureau or delivery units performance,
and recognizing and rewarding exemplary
Mandatory posting of budget reports performance.
(Philippine Transparency Seal).
Posting of all invitations to bid, and awarded contracts in

the Philippine Government Procurement Electronic
System (PHILGEPS). This will motivate higher performance and
greater accountability and ensure
Liquidation of all cash advances for the year within the accomplishment of commitments and
targets under the 5 Key Result Areas stated
reglementary period.
in EO 43.
Establishment of a Citizens Charter or its equivalent.

* AO25, s. 2011 | Creating an Inter-Agency Task
Force on the Harmonization of National
3
Government Performance Monitoring, Information
Submit reports on or before the deadline. and Reporting Systems
The incentive rates will be based on 2 factors:
Bureau/Unit ranking Employee performance appraisal
Best Better Good Poor

Upper 10th percentile Upper 25th percentile Upper 50th percentile Lower 15th percentile
Best P35,000 P20,000 P10,000

Upper 10th percentile
Better P25,000 P13,500 P7,000

Good P15,000 P10,000 P5,000

Below Satisfactory
Rating
No Bonus

Transparency for Faster Budget Execution and Clearer Results
The Aquino administration wishes to ensure that government resources are used for their intended purposes, with
scrupulous regard for the integrity of the process. The 2013 Budget asserts that transparency is an essential tool
not only in preventing corruption but also in enabling the delivery of fast and clear results.
The Administration sustained its policy for the Disaggregation of Lump-Sum Funds. In the past, such lump-
sum funds have not only caused delays in program and project implementation, but have also been prone to abuse
and corruption. Thus, in preparing the 2013 Budget, departments and agencies have been reminded to break down
their proposed budgets into specific programs and projects.
With the Budget containing greater detail on programs and projects, the government will be able to Shift to a
Budget-as-Release Document Regime by 2014, where the repetitive budget request and release process is
eliminated. To support this new regime, the predictability of public expenditure will be strengthened through a
new policy of One-Year Validity of Appropriations in 2013.
The government also continues to roll out Technological Innovations to speed up budget processes and make
them more transparent. For instance, the Department of Budget and Management, the Department of Finance and
the Commission on Audit are currently developing a Government Integrated Financial Management Information
System (GIFMIS), which, once completed by 2016, will improve the speed, accuracy and accountability in the
management of the government budget and finances.

A
Philippine Transparency Seal
G B
The respective heads of the agencies shall be
responsible for ensuring compliance with this section.
F C
E D
The agencys mandates and functions, names of its officials with their position and designation, and
A contact information;
Annual reports, as required under National Budget Circular Nos. 507 and 507-A dated January 31, 2007
B and June 12, 2007, respectively, for the last three (3) years;
C Their respective approved budgets and corresponding targets immediately upon approval of this Act;
Major programs and projects categorized in accordance with the five key results areas under
D E.O. No. 43, s. 2011;
E The programs/projects beneficiaries as identified in the applicable special provisions;
F Status of implementation and program/project evaluation and/or assessment reports; and
G Annual procurement plan, contracts awarded and the name of contractors/suppliers/consultants.

Greater Stakeholder Participation in Budget Preparation and Execution
The government actively sought the peoples participation in budget preparation to gain a better understanding of
their needs and requirements, and ensure that these are met.
Towards this direction, the government introduced the Bottom-Up Budgeting Approach, where 595 poor
municipalities were tapped to identify the services they needed in a consultative process with community
organizations. As a result, a total of P8.4 billion has been earmarked in the National Budget for programs and
projects defined through this unprecedented process.
Agency-Civil Society Budget Partnerships were also expanded to cover 12 departments and six government
firms.
Department of Education National Food Authority
Department of Health National Housing Authority
Department of Social Welfare and Development National Home Mortgage Finance Corporation
Department of Public Works and Highways National Irrigation Authority
Department of Agriculture National Electrification Administration
Department of Agrarian Reform Light Rail Transit Authority
Department of Transportation and Communications
Department of Tourism
Department of Environment and Natural Resources
Department of Labor and Employment
Department of Justice
Department of Interior and Local Government
Public-Private Partnerships for the Delivery of Social Services will also be tapped to speed up the
construction and maintenance of classrooms, hospitals and other human development infrastructure
requirements.

Financing the Budget
Macroeconomic Assumptions
2011 Actual 2012 Actual 2013 Projections*
-
Real GDP Growth (%)
3.9 6.6 6.0 to 7.0
Inflation Rate (%) -

4.6 3.2 3.0 to 5.0
364-Day T-bill Rate (%) -

2.4 2.0 2.0 to 4.0
Exports Growth (%)

-6.9 7.6 10.0
Imports Growth (%)

1.6 1.9 12.0
Forex Rates (Php/US$ 1) -
43.30 42.2 42 to 45
* Revised Macroeconomic and Fiscal Targets, approved by DBCC on 21 January 2013.
With the Philippines now being hailed as the best-performing economy in Southeast Asia due to the reforms
initiated by the government, observers are expecting an even better economic performance in 2013. Government
is projecting a 6- to 7-percent growth in the countrys GDP in 2013. Inflation rate is maintained at 3 to 5 percent
for 2013 up to 2014, while the peso is expected to remain stable against the dollar, keeping a 42 to 45 peso-dollar
exchange rate for the next four years.

Fiscal Program
For 2013, the national government seeks to increase its targeted revenues to 1.75 billion, which would translate to
14.7 percent of the projected GDP for the same year. Meanwhile, disbursements are also expected to increase to
almost P2.0 trillion or 16.7 percent of GDP. These support the plan to attain fiscal consolidation, as these targets
will lead to a reduced fiscal deficit of 2 percent of gross domestic product (GDP), or P238 billion, in 2013.
2011 2012 2013*

1,534.9 B | 14.8% OF GDP
1,557.7 B | 16.0% OF GDP
1,777.8 B | 17.4% OF GDP
1,983.9 | 16.7% OF GDP

1,359.9 B | 14% OF GDP
1,745.9 | 14.7% OF GDP
238.0 B | 2.0% OF GDP

242.8 B | 2.3% OF GDP
197. B | 2.0% OF GDP
DISBURSEMENT
DISBURSEMENT
DISBURSEMENT
REVENUE
REVENUE
REVENUE
DEFICIT
DEFICIT
DEFICIT

Borrowings and Debt
The national government intends to finance the projected deficit as well as maturing debts in a sustainable way,
with less exposure to foreign financial market fluctuations. The gross foreign-to-domestic borrowing mix will be
at 14:86 in 2013, from 35:65 in 2011. With this, the debt stock is seen to decrease to 48 percent of GDP, from 50.9
percent of GDP in 2011.
2011 2012 2013*
16% 14%
Domestic Borrowings
35%
65% 84% 86% Foreign Borrowings
2013*
NG Debt Stock
5,716.5 B | 48% OF GDP

2012
5,358.8 B | 49.9% OF GDP
2011
4,951.2 B | 50.9% OF GDP

section 2
expenditure
priorities
Anti-Corruption and Transparent,
Accountable and Participatory Governance
Corruption Curbed
Delivery of Public Business Environment

Services Improved Enhanced
GOOD GOVERNANCE AND ANTI-CORRUPTION
Transparency Accountability Citizen Engagement
Anti-Corruption Efforts Performance Management
Strategic objective of the Cabinet Cluster on Good Governance and Anti-Corruption Plan 2012-2016
Pillars of open government

The abuse of privileges in public office to gain personal profit inevitably leads to the rise in the incidence of
poverty and inequality. This Administration has been consistently battling corrupt practices through increased
transparency in governance. The more transparent governance is, the more people will want to participate in it,
and the more the public will hold public officials accountable.
Digitization of Financial Processes
To step up the administrations drive to curb corruption and promote transparency and accountability, P238
million is allotted to digitize financial processes in government. This fund will support the development of a
centralized payroll system for government agencies; and an integrated financial management information system,
which enables the government to effectively manage its fund allocations, maintain fiscal discipline, and deliver
services effectively.
National Payroll System | DBM P72 M

Government Integrated Financial
Management Information System (GIFMIS) | DBM P67 M
Cash and Treasury Management System | BTr P30 M
PKI, e-Serbisyo, e-Bayad and GDC | (DOTC-ICTO) P42 M
Philippine Research, Education and
Government Information Network (PREGINET) | DOST P27 M
Revenue Administration Reform
The BIR and the BOC are allotted a combined P6.5 billion to carry out programs to ensure tax compliance and
enforcement, as well as enhanced revenue collections. In addition to this amount, P6.3 billion in automatic
appropriations is allotted for tax refunds under the enhanced revenue collection program.
Integrated Tax Compliance and Enforcement Efforts | BIR P4.4 B

Enhanced Revenue Collection | BOC P2.1 B

Strengthen Institutions and Democratic Practices
The year 2013 will mark the strengthening of certain government institutions with the help of funds that will
make them more capable in giving better services to the people.
E-passport Project | DFA P1.9 B

Adjudication of Cases (Graft and Corruption) | Sandiganbayan P392 M
Witness Protection Services | DOJ P184.6 M
Local Government Capacity Building | DILG P1.7 B
Local Governance Performance Management Program | DILG P1 B
Performance-Based Incentives | NGAs, GOCCs P9.9 B
Clean and Fair Elections
Democracy can work only if elections are free, clean, and therefore credible.
Learning from numerous controversies and irregularities that marred local and
national elections in the past, the government is firm in its resolve to have free,
orderly, honest, and peaceful elections in 2013. For this, P8.4 billion has been set
aside for the Commission on Elections (COMELEC) operations before, during, and
after the elections.

Poverty Reduction and Empowerment of the Poor and Vulnerable
N TA W ID
PA
Rescue the extreme poor who are drowning
1
in poverty through social protection packages,
PA M I LY
such as the Conditional Cash Transfer (CCT).
O
PIN
LI
A
PI NG
2 Once rescued, government invests in them through:
Quality Education Public Healthcare Investments
Highest budgetary allocation: Through health insurance Investments to improve quality

not only more classrooms and coverage, more doctors, nurses of life (affordable housing,
teachers but also a better and caregivers, more accessible agrarian reform, potable water,
delivery system (e.g., K-12). healthcare facilities, etc. rural electrification, etc.)
3 To ensure that resource go directly to the poor, the government will use the
National Household Targeting System, a comprehensive inventory of
indigent households and other families in vulnerable situations.
4
Ultimate goal: give the poor better quality of life and more access to
economic opportunities. Target: reduce poverty incidence by 16% and
meet MDGs.

Poverty brings about a sense of powerlessness, which causes frustration and despair, which leads to even
more poverty. This vicious cycle has to end; thus, the government seeks to rescue the poor who are drowning
in the morass of poverty through social protection packages, such as the Conditional Cash Transfer (CCT).
But governments work doesnt stop with giving these life vests, as it should invest in capacitating them and
their children to participate meaningfully in the economy. This is done through quality basic education, public
healthcare and affordable housing.
Social Protection: Cover all indigent households under 4Ps by 2016
For 2013, government will arm the disadvantaged with increased investments in social protection, providing not
just financial assistance but also opportunities to enhance livelihood skills so they become more self-reliant, and,
in the process, gain confidence,in themselves as well as in the government.
Pantawid Pamilyang Pilipino Program (4Ps) The conditional cash transfer program provides incentives for
poor families to invest in their future, ensures that mothers and children avail of healthcare, and that children go
to school. It is a human development program that invests in the health and education of children. The monthly
cash grants of as much as P1,400 also provide immediate relief from cash flow problems. Such extra cash, received
every two months, is especially important for poor households that have irregular income. For this program to
benefit the targeted 3.8 million households, DSWD has been provided with P44.3 billion in 2013.
Under the 4Ps, indigent households receive a conditional cash transfer (CCT)
of as much as P1,400 per month, on condition that:
P1,400
Children go to school Children receive Mothers avail of

and attend at least regular immunization. maternal healthcare
85 percent of their services.
classes.

4Ps Implementation
1 A family who is registered in NHTS (i.e.,

pre-qualified) is enrolled into 4Ps.
2 The family is given a maximum monthly cash grant of P1,400, broken down into:
Health & Nutrition Grant

P1,400 P500 per household
Education Grant
P300 per child for a maximum of 3 children, for
families with children aged 6-14 enrolled in school
3 Checks are directly deposited to government depository banks, rural and other thrift banks accredited
by BSP, and other means of remittance accessible to beneficiaries. DSWD employees, CCT secretariat
members and LGU officials are not allowed to directly handle the cash grants.
BANK
P1,400
4 The grant is maintained when:
A. Health & Nutrition Grant B. Education Grant

Mothers avail of pre- and post-natal Children attend at
care starting on the 1st trimester of least 85 percent of
pregnancy; classes
Children avail of regular preventive

health check-ups and vaccines.
5 Civil society organizations, non-government organizations, people's organizations, faith-based

groups participate in the program to conduct social audit; to ensure that beneficiaries fulfill the
conditions and to monitor progress.
CSO NGO PO Church Groups
6 Supply side is ensured by:

DepEd DoH
classrooms teachers learning rural health vaccines healthcare

materials facilities workers

4Ps Budget and Beneficiaries
2007 0.05 B
6,000 Beneficiaries
2008 1.27 B
337,416 Beneficiaries
2009 6.61 B
2010 10.93 B
2011 21.19 B
2.3 M Beneficiaries
2012 39.45 B
3.1 M Beneficiaries
2013 44.26 B
3.8 M Beneficiaries

Supplemental Feeding Program Under this program, day care children are given healthy meals for 120 school
days, which is equivalent to six months. These meals are expected to provide one-third of the recommended energy
and nutrient intake needed by children. The program aims to mitigate hunger, improve the nutritional status of
children, and complement feeding programs initiated by local government units in day care centers. Parents or
guardians of the children-beneficiaries are obliged to take part in the program: they help prepare the meals and
attend parent effectiveness and home care sessions to enhance their knowledge, attitude and skills in nutrition and
food preparation. The 2013 Budget allocates P2.9 billion to benefit 1.7 million children in daycare centers.
P2.9 B 120 school days/ 1.7 M children

6 months
Social Pension for Indigent Senior Filipino Citizens provides the Philippines
indigent elderly a monthly cash assistance of P500, as mandated by Republic Act 9994,
the Expanded Senior Citizens Act of 2010. The priority beneficiaries of the Social
Pension are senior citizens 77 years old and above who are frail, sickly, and disabled;
without a regular source of income or support from any member of the family; and not
receiving other pension benefits from the government and private agencies. DSWD, the
implementing agency, shall extend this assistance to 232,868 senior citizens with P1.5
billion.
Self-Employment Assistance-Kaunlaran (SEA-K) aims to enhance the socio-

economic skills of poor families so they can establish and manage sustainable
community-based micro-credit organizations for entrepreneurial development.
Eventually, this livelihood and capability building program, implemented through local
government units, will uplift the poor but economically active to rise above the poverty
level. The 2013 Budget provides P1.5 billion for this program, which stands to benefit
128,355 families.

Kapit-Bisig Laban sa Kahirapan - Comprehensive and Integrated Delivery of Social Services (KALAHI
CIDSS) is a community-driven development program that encourages ordinary citizens to determine their own
community needs; and then plan, develop, carry out, manage, and sustain projects to fight poverty. Through this
program, they become active partners of the administration in local governance. To implement this project in
3,404 barangays, the DSWD will deploy P497 million.
3,404 barangays
potable water systems foot paths bridges roads
health facilities day-care centers classrooms

Education: Close all education resource gaps by 2013 to
support K-12 Reform Program
Empowering the poor begins with quality education. Education gives people more options and opportunities,
reduces poverty, and gives a stronger voice to those who would otherwise remain unheard. It creates a dynamic
workforce and well-informed citizenry able to compete globally, thereby paving the way to economic prosperity.
In line with this, the Aquino administration has taken bold steps in reforming the education sector as well as
in providing the resources needed to address lingering shortagesin teachers, classrooms, learning materials,
among othersthat should be closed by 2013.
293.4 B 330.2 B
Education, Culture and
Manpower Development Subsector
238.8 B 300.0 B
Department of Education
219.1 B 254.4 B
191.1 B 225.1 B
171.7 B 208.7 B
155.7 B 186.6 B
139.9 B 167.4 B
119.3 B 144.2 B
108.2 B 131.2 B
106.0 B 128.8 B
106.7 B 129.0 B
2003
2004
2005
2006
2007
2008
2009
2010
2011
*2012
*2013
*Figures for 2012 and 2013 are based on approved appropriations,

while the rest are based on actual obligations. The 2012 and 2013
b udgets for DepEd include allocations from the Miscellaneous
Personnel Benefits Fund and the School Building Fund.

1 K-12
a Structure:
Senior High School
In-depth specialization for students based on the occupation/career
they wish to take: Science and Technology, Music and Arts, Agriculture
and Fisheries, Sports, Business and Entrepreneurship.
Junior High School
Elementary
b Implementation
2012-2013 Grade 1 and Grade 7

(First batch to start
K to 12 education)

2 Addressing resource gaps in Basic Education: more and
better-trained teachers, more classrooms with complete
facilities, more and better learning materials.
Aligning tertiary and vocational education with the five

3 priority areas for economic growth and employment generation:
2017-2018 Grade 6 and Grade 12 agriculture, tourism, infrastructure, semiconductor and
(First cohort of K to 12 electronics, and BPO.
Grade 6 and Grade 12
Graduates in 2018)
Continued consultation with

stakeholders throughout the process
4 Reforms in SUCs: amalgamate SUCs into a few centers of
excellence; align curricula to be responsive to economic
growth.

Hiring of Teachers the Department of Education (DepEd) will close its teacher
supply gap by hiring 61,510 more teachers in 2013. The 2013 Budget supports this by
allocating P13.4 billion for the creation of these additional teaching positions. DepEd
will also deploy P670 million to recruit 3,500 non-teaching personnel who will provide
the necessary support to faculty.
Construction and Rehabilitation of Classrooms to close the classroom supply

gap by 2013, the DepEd, together with the Department of Public Works and Highways
(DPWH) will be deploying a total of P26.3 billion to construct or rehabilitate more than
31,000 classrooms and make other school facilities available for students.
Basic Educational Facilities P25.2 B

School Building Program | 17,638 classrooms | DPWH P14.1 B
Repair/Rehabilitation of Classrooms | 3,850 classrooms | DepEd P1.1B
Construction of Water Sanitation Facilities
| 90,461 facilities | DepEd P5.4 B
School Furniture Program | 639,185 seats | DepEd P575 M
PPP Amortization | 9,301 classrooms, 446,448 seats | DepEd P4 B
DepEd School Building Program (Regular) | 1,000 classrooms P1 B
Textbooks and Instructional Materials The 2013 Budget provides P1.5 billion
for the procurement of 31.1 million textbooks and teachers manuals that complement
classroom learning experience and enrich instructors knowledge-sharing skills.
Government Assistance for Students and Teachers for Private Education

To improve access to basic education and to help decongest public schools, the
government, through DepEd, has made P6.9 billion available to 1 million students
under the Government Assistance for Students and Teachers for Private Education
(GASTPE).
Universal Kindergarten As part of the governments Education for All campaign

to help meet the United Nations Millennium Development Goals on education, the
amount of P1.6 billion is marked off for the DepEd to implement Universalization of
Kindergarten Education to benefit 66,203 students.

Universal Healthcare: Provide health care insurance to poor households
Health is at the core of the national agenda and an important factor in achieving a strong sense of national well-
being. This is why the Aquino Administration is committed to its universal healthcare agenda: Kalusugang
Pangkalahatan. It is a commitment to provide quality and universal health care programs for more Filipinos,
keeping them healthy and better-equipped to contribute to the countrys development.
54.2 B 57.7 B
Health Subsector
Department of Health
45.8 B 50.6 B
30.8 B 40.5 B
25.3 B 31.0 B
21.3 B 23.4 B
14.7 B 18.6 B
13.6 B 18.2 B
10.7 B 16.1 B
11.1 B 14.5 B
10.5 B 13.9 B
9.9 B 12.4 B
2003
2004
2005
2006
2007
2008
2009
2010
2011
*2012
*2013
* Figures for 2012 and 2013 are based on approved

appropriations, while the rest are based on actual
obligations. The 2012 and 2013 budgets for DoH include
allocations from the Miscellaneous Personnel Benefits Fund.

Healthcare Insurance Premium Subsidies The 2013 Budget sets aside P12.6
billion to provide 5.2 million households with premium subsidies to the National
Health Insurance Program. Moreover, the additional revenues from the newly-
approved Sin Tax Reform Law (Republic Act No. 10351) can support the deployment of
P13.6 billion in Unprogrammed Appropriations for premium subsidies for an additional
5.6 million households in the informal sector.
Health Facilities Enhancement Program The Aquino Administration is

committed to close the rural health facility gap by 2013. The 2013 Budget supports the
immediate rehabilitation and construction of 2,243 rural health units and 403 district
hospitals, with a budget of P13.6 billion. This amount a 167-percent increase from the
P5.1-billion allocation for the program in 2012.
Addressing the Health-Related Millennium Development Goals (MDGs) the 2013 Budget also supports
programs to be implemented by DoH that will support the achievement of the health-related MDGs:
Doctors to the Barrios Program

| 131 doctors, 22,500 nurses, 4,379 midwives P2.8 B
Expanded Program on Immunization | 2.6 million children P1.9 B
Tuberculosis Treatment | 46,694 cases P1 B
National Pharmaceutical Policy Development
| 1,377 LGUs, 160 hospitals P1 B
Elimination of Diseases as public health threats P507 M
Infectious Diseases and emerging diseases P321 M
ARV treatment | 6,056 HIV infected people
Family Health and Responsible Parenting P2.5 B
Housing: Provide decent housing to informal settlers
The Aquino Administration addresses the continuing demand for affordable housing units in response to the
increasing population and household size, both in the urban and rural areas. A decent shelter is one of the basic
human needs, and the government is committed to providing the masses with quality and affordable shelter.
Affordability factors in low income levels, inadequate supply of desired units and limited accessibility to home
financing packages. To address these issues, the government allocates P20.8 billion for various housing programs.
Resettlement Program | 33,000 households P4.9 B

Settlements Upgrading Program | 2,973 households P128 M
Housing Resettlement | 20,000 Informal Settler-Families P10.1 B
AFP/PNP Housing Project | 20,000 families P5.6 B
Community Mortgage Program
| 30,000 poor urban households in depressed areas P1 B

Rapid, Inclusive and Sustained Economic Growth
1 Rapid, inclusive and sustained economic growth must be achieved:
IN
CL
ID
RA P
U SI V E
GDP must grow by
7 to 8 percent
Economic Growth must create
opportunities for all,
annually Growth especially the poor
SU
STA IN ED Economy salvaged
from boom-and-bust
cycle
2 Priority Areas for Economic Development and Job Generation, including:
Semiconductor and
Electronics Manufacturing
Business Process
Outsourcing
Agriculture and
Fisheries Development
Tourism
Development
General
Infrastructure
3 Critical Interventions by Government
Ensuring a stable Investment in Investing in Aligning tertiary

macro-economic infrastructure, Rice and Food and vocational
environment and including Self-Sufficiency curricula to
fair competition Public-Private priority economic
Partnerships development and
job creation
sectors

With the economy doing better than expected after the domestic economy grew by an astounding 6.6 percent in
2012, the outlook for 2013 remains positive. However, the Administration acknowledges that its main economic
challenge from 2013 to 2016 is to ensure inclusive growthto ensure that each expansion of the economy leads to
more jobs and better incomes. Economic growth has to benefit everyone, regardless of faith, income bracket, ethnic
origin, age, or physical limitation.
Transport Infrastructure
The Aquino administration takes on the challenges posed by the countrys archipelagic nature, by building more
and better roads and bridges and providing more efficient transportation to connect its many islands and its
people. Mobility is crucial to economic development: people need to get to work, and goods need to move from
farms to markets. To sustain the momentum of economic growth, the government seeks to pave all primary roads
by 2014, secondary roads by 2016, and make quicker and more reliable transportation available to the Filipino
public.
DPWH is the implementing agency for the following projects:
Asset preservation based on Highway Development

and Management (HDM-4) P22.1 B
Road Upgrading using HDM-4 P26.2 B
Routine Maintenance P4 B
Traffic Decongestion P17.3 B
National Bridges P7.8 B
Foreign-Assisted Projects P15.7 B
Automatic Appropriations -
Motor Vehicle Users Charge P13.3 B
Routine maintenance P3.3 B
Preventive Maintenance P7.2 B
Flood control P12.4 B
Public-Private Partnership Strategic Support Fund P3 B
Right-of-Way P3 B
DOTC will work on the following projects:
Central Roll-On/Roll-Off Project P800 M

Northern Integrated Bus Terminal System P400 M
Southern Integrated Bus Terminal System P800 M
Bus Rapid Transit System for Cebu City P975 M
Road Transport IT Infrastructure Program P1.3 B
Access Roads to Airports/Seaports/Transport Terminals P2 B
LRT Line 1 South Extension P3.8 B
LRT Line 2 East Extension P2 B
MRT 3 Operation and Maintenance P1.1 B
Subsidy for MRT 3 P5.1 B
Rehabilitation and strengthening of PNR Main Line South P359 M

Agriculture: Rice and Food Self-Sufficiency by 2013
Food self-sufficiency means being able to meet the countrys food consumption needs, particularly for staple
food crops, from own production instead of resorting to importation. The 2013 Budget will focus on expanding
the production and extension support and post-harvest facilities to farmers, with a focus on rice, corn, coconut
products, and fish. It will also seek to increase the number of irrigation systems and farm-to-market roads that
will support the sector.
Rice Production | 20 M metric tons | DA P7.4 B

Corn Production | 8.4 M metric tons | DA P1.5 B
Fisheries Program | 5.4 M metric tons | BFAR P3.7 B
Coconut Program | 3.13 M metric tons | PCA P1.7 B
Irrigation System
| generate 51,503 ha. service area, restore 39,750 ha.
service area, rehabilitate 102,795 ha. service area
| NEA P27.3 B
Farm-to-Market Roads | 887.5 kms. | DA, DPWH P7.1 B
Procurement of Domestic Palay | 250,000 metric tons | NFA P4.2 B
USPL 480, a soft commodity loan from the US | DA P851 M
Rice Research | Philippine Rice Research Institute P532 M
Crop Insurance | 251,762 farmers
| Philippine Crop Insurance Corporation P1.2 B
Credit Assistance | Agricultural Credit Policy Council P1 B
Comprehensive Agrarian Reform Program
The 2013 Budget pushes for the successful implementation of the Comprehensive Agrarian Reform Program
(CARP) by 2014. A truly effective agrarian reform program, to be true to its name, must fit into a broader policy
aimed at reducing poverty and establishing a favorable environment for agricultural development. Under the 2013
Budget, the acquisition and distribution of land, as well as the necessary support for CARP beneficiaries, will be
funded, as follows:
Land Aquisition and Distribution P13 B

DAR P7.1 B
DENR P608 M
DOJ P255.8 M
LBP P5 B
Agrarian Justice Delivery
174,373 agrarian cases settled | DAR P365 M
Program Beneficiaries Development P5.7 B
of which,
2,083 ARCs / 5,018 ARB organizations supported | DAR P2.3 B
1,765 ha. of irrigation service areas | NIA P150 M
119 sites / 6.654 ha. of uplands covered | DENR P150 M

Tourism Development
Tourism has contributed greatly to the growth of the economy. It enhances the countrys economic landscape and
helps in generating jobs and business opportunities for many Filipinos. To keep this momentum and to meet the
Administrations goal of ushering in 5.5 million tourist arrivals by 2013 and 10 million tourist arrivals by 2016, the
National Budget includes appropriations for:
Construction, Widening, Upgrading of Access Roads to

Declared/Strategic Tourist Destinations | DPWH P12 B
Airports, Ports, Wharves, New Airport Development
Projects, Tourism Support Services | DOTC P872 M
Branding Campaign | DOT P1 B
Machine-Readable Ready Visa | DFA P26 M
Smooth Entry of Foreign Visitors | BOC P182 M
Restoration of Heritage Sites | National Historical Commission P128 M
Rural Electrification
The Aquino administration aims to put more barangays and sitios on the grid through a P6.3-billion electrification
program. Rural electrification is undertaken with the ultimate goal of achieving socio-economic growth of
the marginalized sectors, the fisherfolk and farmers living in remote and unelectrified areas of the country.
More households in far-flung communities will then have the benefit of electric services, which will yield more
opportunities for improved quality of life, greater access to basic services and better infrastructure for rural
development.
Household Electrification Program | 7,500 households | DOE P130 M

Sitio Electrification Program | 3,676 sitios | NEA P3.8 B
Barangay Line Enhancement Program | 600 barangay lines | NEA P1.5 B
Small Power Utilities Group | 256 SPUGs | NPC P969 M

Support for MSMEs
Micro, Small, and Medium Enterprises (MSMEs) are engines of growth. Together, they make up 99.6 percent of all
registered firms in the country and employ 70 percent of the labor force. Supporting MSMEs to create more value
and job opportunities furthers national growth. To support MSMEs, P1.5 billion will be used to set up service
facilities for entrepreneurs that will speed up the process of setting up a business. One-stop shops will be set up for
business registration, licensing and export documentation, giving them better access to technology and improving
their global competitiveness. They will also be provided with sustainable market development and promotion.
Development of technological human resources will enlarge the pool of skilled men and women who can contribute
Shared Service Facility

| create 50 MSMEs, assist 750 existing MSMEs | DTI P770 M
Small Enterprise Technology Ugrading (SETUP) | DOST P500 M
Business Licensing Facilitation and Investment Promotion
| DTI, BIR, SSS, PhilHealth, Pag-IBIG, DOLE, DENR, DILG P136 M
One Town One Product (OTOP) Program | DTI P23 M
National Industry Cluster Capacity Enhancement Project (NICCEP)
| DTI P 70 M
Align Vocational and Tertiary Education to Support Priority

Industrial Development and Job Generation
to job creation and national growth. The 2013 Budget pushes for the strengthening of tertiary and technical-
vocational education to develop a globally competitive human resource pool for priority industries. The total
budget for state universities and colleges (SUCs) will increase by 44 percent to P37.1 billion in 2013, not only
to provide for the maintenance and capital outlay needs of SUCs but also to support the implementation of the
Roadmap for Higher Education Reform 2011-2016. Meanwhile, the programs of the Technical Education and
Skills Development Authority (TESDA) will receive P3.1 billion in 2013.

Just and Lasting Peace and the Rule of Law
1
Poverty is both a product of and a critical factor in armed conflict. Conflicts must be resolved through honest and
sincere peace negotiations, along with anti-poverty and economic interventions for conflict-ridden communities.
2 As the countrys national security transforms due to geopolitical concerns, and as the government moves to
resolve long-running insurgent and secessionist conflicts through political settlement, government must
strengthen the capacity of the military to protect the countrys borders.
3
The Administration intends to improve its prosecution rate, especially in cases that severely threaten or
undermine the security of the public, like drugs, human trafficking, extra-judicial killings, and human
rights violations.
4 Reforms that strengthen the judicial, law enforcement and military institutions through transparency
and accountability must be pursued.

President Aquino believes that in order to effectively promote good governance, reduce poverty and spur
economic growth, national security, justice and peace must be established.
With this, President Aquino has defined the pursuit of security, justice and peace as a priority area of his Social
Contract. This entails the negotiated political settlement of armed conflicts alongside efforts to address the
needs of the vulnerable; the protection of national security alongside the promotion of human rights; and the
strengthening of the rule of law through judiciary and enforcement reform.
Support for the Attainment of Lasting Peace and Development
With the signing of a framework peace agreement between the government of the Philippines and the Moro
Islamic Liberation Front (MILF), the government is now working toward lasting peace, stability, and development
in the community. Through the following programs, the government seeks to deliver the dividends of peace.
PAyapa at MAsaganang PamayaNAn PAMANA is the governments program and framework to peace and
development, is focused on fostering peace in areas affected by conflict as well as communities covered by existing
peace agreements. Through PAMANA, conflict-prone communities comprised of 4,943 LGUs will receive P5
billion in 2013 through the joint efforts of DILG (P1.6 billion), DA (P1.5 billion), DSWD (P1.5 billion), DAR (P208
million), DOE-NEA (P150 million), DENR (P93 million), PhilHealth (P16 million), and CHED (P2 million). The
fund will be used to stimulate infrastructure growth and socioeconomic development to attain lasting peace in the
area.
P5 B DILG | P1.6 B
DA | P1.5 B
DSWD | P1.5 B
DAR | P208 M
DOE-NEA | P150 M
DENR | P93 M
PhilHealth | P16 M
CHED | P2M

ARMM The government has set aside P14.06 billion for the Autonomous Regional Government in Muslim
Mindanao. This budget will, among others, be invested in various social services (basic education and health),
and economic services (particularly infrastructure, agriculture, and fisheries) that are needed to support the
development of the region.
Basic, Technical/Vocational
P14.06 B Education | P7.8 B
Infrastructure Program | P1.5 B
Provision of
Health Services | P839 M
Agriculture, Agrarian Reform and
Environment | P769 M
Office of the Regional
Government | P833 M
Others | P2.4 B
Modernization of Security Forces The 2013 Budget supports the upgrading of

the countrys security and defense capabilities toward a stronger and more modern
Filipino military. It provides P5 billion for the AFP Modernization Program to boost
the readiness level of the military. Meanwhile, P2 billion is earmarked for the PNP
modernization program.
Uphold the Rule of Law and Strengthen the Justice System
To strengthen the justice system, there is a need to ensure that criminals get the
punishment commensurate to their crimes, and in the shortest possible time. For
this reason, P17.8 billion is set aside to enable the Judiciary to pursue 324,434 cases
(309,721 cases with the Supreme Court; 14,928 with Court of Appeals; and 415 cases
in the Court of Tax Appeals). P2.9 billion has been marked off to fortify investigation
and prosecution services of the Department of Justice and resolve 291,550 cases. P5.8
billion has been budgeted in favor of the BJMP to improve its Jail Management and
Penology Program.

Integrity of the Environment and
Climate Change Adaptation and Mitigation
1
Implement climate change adaptation and mitigation measures,
improve planning and capacity to deal with climate change
through technology, promote renewable energy and energy
efficiency, audit compliance to environmental laws.
2 Ensure the utilization of natural resources for the equal benefit of the
present and future generations, expand and protect forest cover and
promote agro-forestry, improve water management, provide integrated
management and support services to agriculture and fisheries, distribute
lands.
3 Promote alternative and inclusive urban development plans which ensure

healthy and safe communities, long term and comprehensive urban
development plans, improve solid waste management, ensure clean water
and air, urban beautification, improve housing conditions.
4
Undertake all measures necessary to prepare
for and manage natural and man-made
disasters through disaster risk assessments,
effective monitoring systems and facilities,
improved institutional capacity for disaster
risk management and other preventive
measures.

The poor are most vulnerable to the effects of climate change. Year in and year out, natural disasters have dealt
billions of pesos in damage and claimed the lives of millions of Filipinos. This is why the Aquino Administration
treats climate change adaptation and mitigation, along with securing the integrity of the environment, as a priority
area og the Social Contract with the Filipino people.
Bolster the Resilience of Communities to Climate Change
The National Greening Program will be on its third year of implementation in 2013.
An allocation of P5.9 billion will make possible the production of 150 million seedlings
and the greening of 300,000 hectares of land. The Forest Protection Program has
an allocation of P1 billion for the protection of 4.7 million hectares of untenured
forestlands.
The Mines and Geosciences Bureau has been tasked to undertake the Geohazard
Assessment and Mapping Program with a budget amounting to P299.7 million,
to conduct an impact analysis of coastal geohazard and climate change in 548
municipalities. The National Mapping and Resource Information Authority, on the
other hand, takes charge of Unified Mapping, for which P1.5 billion has been set aside
to cover 5.4 hectares worth of aerial photography and satellite images. The National
Operational Assessment of Hazards (NOAH) is conducted by the Department of
Science and Technology, with a P500-million budget. On the other hand, three (3)
esteros are set to be rehabilitated and developed by the Pasig River Rehabilitation
Commission, with the help of a P360 million allocation.

With climate change wreaking havoc on the environment, the amount of damage
brought on by typhoons and floods has not only increased but has also become
unpredictable. Flood Control Systems need to be improved. With the amount of P554
million set aside for the construction of one (1) pumping station, the Metro Manila
Development Authority can implement this. Finally, the Department of Energy leads
the implementation of the e-Tricycle project, which seeks to replace some conventional
tricycles with e-trikes over the next four years. P3.1 billion has been allocated for
20,000 e-Trikes to participating LGUs to help reduce dependence on oil and ease air
pollution.
Preparedness for Calamities
The 2013 Budget sets aside a total of P7.5 billion for the Calamity Fund, which the
government will use for relief activities in, and the rehabilitation of, areas ravaged by
calamities.
Moreover, the 2013 Budget allocates P3.9 billion for Quick Response Funds, standby
funds that implementing agencies such as DSWD, DepEd, DPWH, DND-CD, and DA
can immediately tap for assistance to calamity victims and other disaster response
activities.
Meanwhile, P621 million is earmarked for the National Housing Authority to

implement Emergency Housing Assistance Program for Calamity Victims, with a
target of 3,357 beneficiaries.

section 3
basics
on
budgeting
The National Budget
The National Budget is the financial expression of approved government plans and programs to be supported
by government revenues. Budgeting enables the government to manage its scarce financial resources to
support priority programs and projects for promoting economic growth and providing public services. In other
words, it is in budgeting where the government puts its money where its mouth is.
INCOME, EXPENDITURES, DEFICIT
The National Budget consists of the governments as the General Appropriations Act (GAA). The GAA
estimated income and planned expenditures in a given enacts both programmed and unprogrammed general
year. appropriations.
The governments income is composed of taxes (income a.Programmed appropriations supported by

tax, value-added tax, etc.) and non-tax revenues (fees corresponding sources of revenue.
and charges, privatization proceeds, etc.)
b.Unprogrammed appropriations can only be
Meanwhile, expenditures include programs, activities, executed when the government attains a revenue
projects, purchase of goods and services, among others, windfall (i.e., above target).
that the government will spend on to achieve its socio-
economic development objectives. 2.Automatic Appropriations Under specific
laws, certain types of expenditure (e.g., debt interest
When the governments income is insufficient to payments, LGUs IRA) are automatically set or
finance expenditures, government incurs a fiscal appropriated.
deficit. In this situation, government resorts to
borrowing from domestic and foreign sources. 3.Continuing Appropriations Appropriations
previously enacted by Congress in the previous years
COVERAGE GAA and which continue to be valid. Currently,
appropriations for capital outlays and maintenance
and other operating expenditures have a validity of two
The National Budget covers the totality of the budgets
years.
of national government agencies not only those of the
Executive branch, but also of Congress, the Judiciary
and other Constitutional bodies. ANNUAL PREPARATION,
THREE-YEAR PERSPECTIVE
It also covers the budgetary support given by the
national government to local government units (LGUs), The Philippine Constitution requires the President to
in particular, the Internal Revenue Allotment (IRA); submit to Congress, within 30 days from the opening
as well as to Government-Owned or -Controlled of every regular session as the general appropriations
Corporations (GOCCs) and government financial bill, a budget of expenditures and sources of financing,
institutions (GFIs). including receipts from existing and proposed revenue
measures.
COMPONENTS
The annual preparation of the National Budget also
The National Budget for a given year is composed of the ensures that all government spending is reviewed and
following: justified anew each year. Even so, the government also
adopts a three-year perspective. This ensures that the
1.New General Appropriations Legislated by National Government remains strategic in managing
Congress and enacted by the President every fiscal year its resources.

Revenues, Disbursements and Macroeconomic Factors
Under the budget, Tax Revenues Non- Tax Revenues

expenditures
are financed Individual and corporate Fees, charges, and other
income taxes
by government collections of government
in exchange of services it
Value-Added Tax (VAT) rendered or as penalties imposed

on the sale of goods and
services
Proceeds from the
privatization of
Special Taxes such as
government assets as well as grants are
Motor Vehicle Tax,
Travel Tax and Sin Tax also non-tax revenues.
To fill in the gap, the

Automatic Programmed government borrows
Deficit Non-Tax Tax Appropriations New
Revenues Revenues Appropriations money either from foreign
sources as well as from the
REVENUE EXPENDITURE domestic capital market.
If estimated revenues are not enough
This increases the debt stock
to finance planned expenditures, the
of the national government
government incurs a fiscal deficit.
and its annual debt servicing
requirements.
With this, the budget is also affected by internal and external economic factors, such as gross domestic product (GDP) growth,
inflation, interest rates and foreign exchange.
Imports
Foreign
GDP Exchange
Inflation
Interest
Rates
National Economy
Budget
Other
Revenues
Taxes
Borrowings
Government
expenditure
In other words, a vibrant domestic economy, with more people getting employed and businesses earning more, generates
higher revenues from taxes. On the other hand, in times of economic crises or when the economy slows down, government

PUBLIC EXPENDITURE MANAGEMENT: NOT JUST PESOS BUT RESULTS
The National Budget is not only about money: more important, it should be viewed as a tool that enables
government to achieve its socio-development agenda. With this, DBM has initiated reforms towards effective
Public Expenditures Management (PEM): an approach that ensures resource allocation is results-based, and that
government is accountable for its performance.
PEM seeks to achieve the following objectives:
Government must spend within its means.

Aggregate Fiscal Discipline Resources should be used in a planned and deliberate
medium-term strategy.
Government must spend on the right priorities.

Spending should be aligned with socio-economic
Allocative Efficiency
priorities, as spelled out in the Philippine
Development Plan.
Government must ensure the best value for the

Operational Efficiency peoples money. All public goods and services must be
provided at the most reasonable cost.
PEM has three pillars
Medium-Term Expenditure Framework (MTEF) This tool helps government link policy, planning and budgeting
over the medium-term. Under this framework, DBM employs a three-year rolling budget approach. This consists of
a top-down allocation of resources based on macroeconomic projections and strategic priorities, matched against
forward estimates on the costs of agency programs, activities and projects.
Organizational Performance Indicator Framework (OPIF) This links government expenditure priorities with
desired outcomes and agency performance. Under this framework, agencies align their Major Final Outputs
(MFOs) goods and services delivered through the implementation of programs, activities, and projects with
societal goals and organizational outcomes. Performance indicators are set, monitored and counter-checked
against agency commitments and resources.
Zero-Based Budgeting Approach (ZBB) This approach involves the close review and evaluation of major ongoing
programs and projects, to determine if these are still relevant given current developments and if these meet
desired outcomes. This process provides guidance to making decisions to increase or decrease resources allocated
for these programs and projects, or if these should be continued at all.

The Budget Cycle
Start Here Budget Call Budget Priotiy Technical Budget

Dec-Jan of prior FY Framework Hearings
Apr of prior FY Apr-May of prior FY
Audit
1st sem next yr
Year-End Budget
Performance
Assessment Review Executive
1st qtr next yr
Preparation Review
Jun of prior FY
Quarterly Agency Consolidation,

Performance Review
Quarter/Semester
The Budget Validation and
Confirmation
Cycle Jun of prior FY
Budget Presentation to the

Accountability Reports These four phases of the President and Cabinet
Jun of prior FY
Monthly/Quarterly budget cycle overlap
in continuing cycles every Presidents
year. For instance, while Budget
Performance
Jul of prior FY
Targets & Outcomes the Executive implements
Jan-Feb
the budget for the current
year, it also prepares House
Accountability Deliberations
the budget for the next Aug-Oct of prior FY
fiscal year or defends
Disbursement Senate
Thru FY
it before Congress.
Deliberations
Meanwhile, the execution Sep-Nov of prior FY
and accountability
Allocation Bicameral
Thru FY
phases are implemented
Deliberations
simultaneously year-round. Nov-Dec of prior FY
Incurring
Obligations Ratification and
OBLIGATIONS Thru FY Execution Enrolment
Dec of prior FY
ABM SARO Allotment Release

Jan & thru FY Presidents
Enactment and Veto
Dec of prior FY
ARP
BED
Allotment and Cash Budget Execution Release Guidelines Legislation
Release Programming Documents and Program
Jan-Feb Jan-Feb Dec of prior FY

Stakeholder Participation in the Budget Process
When it assumed office, one of the first things that the Aquino
Administration did is to create greater spaces and formal
mechanisms for citizens participation in the budget process. From
introducing citizens engagement during the annual preparation of
the budget, it is now moving to enable citizens to engage the whole
budget cycle.
These mechanisms for participation include:
1. Budget Partnership Agreements (BPAs) between agencies

and civil society organizations (CSOs) in the preparation of the
respective agencies budget proposals. This partnership process has
since been expanded by the DBM to CSO engagement during budget
execution.
2. Bottom-Up Budgeting (BUB), introduced through the Cabinet

Cluster on Human Development and Poverty Reduction. In its
pilot run during the preparation of the 2013 Budget, 595 poor
municipalities crafted local poverty reduction plans hand-in-hand
with citizens organizations in their localities. This approach is
also being taken into the budget execution phase: so the citizen
organizations can ensure that the P8.4-billion in programs and
projects are implemented well.
3. Citizen Participatory Audit, which was launched by the

Commission on Audit together with the Department of Public
Works and Highways (DPWH) and the Affiliated Network for Social
Accountability-East Asia and the Pacific (ANSA-EAP) in November
2012. Under this project, special teams of COA and citizen auditors
will be deployed to conduct value-for-money or performance audits
of selected government programs.

BUDGET PREPARATION
This starts with the Budget Call and ends with the Presidents submission of the proposed budget to
the Congress.
1.THE BUDGET CALL.At the beginning of the budget preparation year, the
Department of Budget and Management (DBM) issues the National Budget Call
to all agencies (including state universities and colleges) and a separate Corporate
Budget Call to all GOCCs and GFIs. The Budget Call contains budget parameters
(including macroeconomic and fiscal targets and agency budget ceilings) as set
beforehand by the Development Budget Coordination Committee (DBCC); and
policy guidelines and procedures in the preparation and submission of Agency
Budget Proposals.
2.BUDGET PRIORITY FRAMEWORK. The government introduced a new process

where the Cabinet will define and agree on government priorities that should
be funded for 2014 to 2016. Along these priorities, Cabinet members will make
commitments on programs and projects that they will deliver. These decisions and
commitments are then summarized in a Budget Priority Framework that will guide
all agencies in crafting their respective Budget Proposals.
MITHI
The Medium-Term Information and Communications Technology

Harmonization Initiative (MITHI) seeks to establish a coherent
process for the planning, budgeting, implementation, monitoring
and evaluation of government information and communication
technology (ICT) projects. MITHI was initiated by the DBM, the
Department of Science and Technology (DOST) and the National
Economic and Development Authority (NEDA).

3.TECHNICAL BUDGET HEARINGS.Once the departments and agencies submit
their Agency Budget Proposals to the DBM, the latter will call Technical Budget
Hearings where the agencies defend their proposed budgets before a technical panel
of DBM, based on performance indicators on output targets and absorptive capacity.
DBM bureaus then review the agency proposals and prepare recommendations.
4.EXECUTIVE REVIEW.The recommendations are presented before an Executive

Review Board which is composed of the DBM Secretary and senior officials.
Deliberations here entail a careful prioritization of programs and corresponding
support, vis--vis the priority agenda of the national government. Implementation
issues are also discussed and resolved.
5.CONSOLIDATION, VALIDATION AND CONFIRMATION.DBM then consolidates the

recommended agency budgets and recommendations into a National Expenditure
Program and a Budget Expenditures and Sources of Financing (BESF). As part of
the consolidation process, the deliberations by the DBCC will determine the agency
and sectoral allocation of the approved total expenditure ceiling, in line with the
macroeconomic and fiscal program. Heads of major departments are invited to this
meeting.
6.PRESENTATION TO PRESIDENT AND CABINET.The proposed budget is

presented by DBM, together with the DBCC, to the President and Cabinet for
further refinements or reprioritization. After the President and Cabinet approve
the proposed National Expenditure Plan, the DBM prepares and finalizes the
budget documents to be submitted to Congress.

7.THE PRESIDENTS BUDGET.The budget preparation phase ends with the
submission of the proposed national budget to Congress. The budget proposal,
traditionally called the Presidents Budget, consists of the following documents,
which seek to help legislators and citizens analyze the contents of the proposed
budget:
Presidents Budget Message (PBM).This is where the President explains the policy framework and
priorities in the budget.
Budget of Expenditures and Sources of Financing (BESF).Mandated by the Constitution, this contains
the macroeconomic assumptions, public sector context (including overviews of LGU and GOCC financial
positions), breakdown of the expenditures and funding sources for the fiscal year and the two previous
years.
National Expenditure Program (NEP).This contains the details of spending for each department and
agency by program, activity or project, and is submitted in the form of a proposed General Appropriations
Act.
Book of Outputs.The Book of Outputs seeks to show the link between the budget and the outcomes and
outputs from government activities. It provides a detailed listing of the performance indicators and targets
of each department and agency, which should be aligned with their MFOs.
Details of Selected Programs and Projects.This contains a more detailed disaggregation of key programs,
projects and activities in the NEP, especially those in line with the national governments development plan.
Staffing Summary.This contains a summary of the staffing complement of each department and agency,
including number of positions and amounts allocated for the same.

BUDGET LEGISLATION
Alternatively called the budget authorization phase, this starts upon the House Speakers receipt of
the Presidents Budget, and ends with the Presidents approval of the General Appropriations Act.
1. HOUSE DELIBERATION.The House of Representatives, in plenary, assigns the Presidents Budget to the House
Appropriations Committee. The Committee and its Sub-Committees then schedule and conduct hearings on the
budgets of the departments and agencies and scrutinize their respective programs and projects. It then crafts the
General Appropriations Bill (GAB).
GAB
In plenary session, the GAB is sponsored, presented and defended by the Appropriations Committee and Sub-
Committee Chairmen. As in all other laws, the GAB is approved on Second and Third Reading before transmission
to the Senate. (Note: in the First Reading, the Presidents Budget is assigned to the Appropriations Committee)
2.SENATE DELIBERATIONS.As with the House process, the Senate conducts its own committee hearings
and plenary deliberations on the GAB. Budget deliberations in the Senate formally start after the House
of Representatives transmits the GAB. For expediency, however, the Senate Finance Committee and Sub-
Committees usually start hearings on the GAB even as House deliberations are ongoing.
GAB Senate
GAB
The Committee submits its proposed amendments to the GAB to plenary only after it has been formally
transmitted by the House. A Senate Version is thereafter approved on Second and Third Reading.

3.BICAMERAL DELIBERATIONS.Once both Houses of Congress have finished their deliberations, they will each
constitute a panel to the Bicameral Conference Committee. This committee will then discuss and harmonize the
conflicting provisions of the House and Senate Versions of the GAB. A Harmonized Version of the GAB is thus
produced.
4.RATIFICATION AND ENROLMENT.The Harmonized or

Bicam Version is then submitted to both Houses, which
will then vote to ratify the final GAB for submission to the
President. Once submitted to the President for his approval,
the GAB is considered enrolled.
GAB Senate
GAB
Harmonized
GAB
5.THE VETO MESSAGE. The President and DBM then

review the GAB and prepare a Veto Message, where
budget items subjected to direct veto or conditional
implementation are identified, and where general
observations are made. Under the Constitution,
the GAB is the only legislative measure where the
President can impose a line-veto (in all other cases, a
law is either approved or vetoed in full).
6.ENACTMENT.The budget legislation phase ends when the General

Appropriations Act (GAA) is signed by the President as law. Ideally,
GAA enactment should happen not later than December 31 of the GAAs fiscal year.
Otherwise, the previous years budget is reenacted in part, if the new budget is
approved not approved on time; worse, it is reenacted in full if no new budget
is approved at all.

BUDGET EXECUTION
This is where the peoples money is actually spent. As soon as the GAA is enacted, the government
can implement its priority programs and projects.
1. RELEASE GUIDELINES AND PROGRAM. The budget execution phase begins with
DBMs issuance of guidelines on the release and utilization of funds.
2. BUDGET EXECUTION DOCUMENTS (BEDS).Agencies are required to submit

their BEDs at the start of budget execution. These documents outline agency plans
and performance targets. These BEDs include the physical and financial plan,
BED monthly cash program, estimate of monthly income, and list of obligations that are
not yet due and demandable.
3. ALLOTMENT AND CASH RELEASE PROGRAMMING.To ensure that releases fit

the approved Fiscal Program, the DBM prepares an Allotment Release Program
ARP
(ARP) to set a limit for allotments issued to an agency and on the aggregate. The
ARP of each agency corresponds to the total amount of the agency-specific budget
under the GAA, as well as Automatic Appropriations. A Cash Release Program
(CRP) is also formulated alongside that to set a guide for disbursement levels for
the year and for every month and quarter.
4. ALLOTMENT RELEASE.Allotments, which authorize an agency to enter into

an obligation, are either released by DBM to all agencies comprehensively through
the Agency Budget Matrix (ABM) and individually via Special Allotment Release
Orders (SAROs).
ABM
ABM.This document disaggregates all programmed appropriations for
each agency into two main expenditure categories: not needing clearance and
SARO needing clearance. The ABM is the comprehensive allotment release document
for appropriations which do not need clearance, or those which have already been
itemized and fleshed out in the GAA.
SARO.Items identified as needing clearance are those which require the

approval of the DBM or the President, as the case may be (for instance, lump sum
funds and confidential and intelligence funds.) For such items, an agency needs
to submit a Special Budget Request to the DBM with supporting documents. Once
approved, a SARO is issued.
5.INCURRING OBLIGATIONS.In implementing programs, activities and projects,

agencies incur liabilities on behalf of the government. Obligations are liabilities
legally incurred, which the government will pay for. There are various ways that an
agency obligates: for example, when it hires staff (an obligation to pay salaries),
OBLIGATIONS receives billings for the use of utilities, or enters into a contract with an entity for
the supply of goods and services.

The GAA as Release Document
The Aquino Administration plans to design the annual General Appropriations Act (GAA)
as the comprehensive allotment release document itself. This is being pursued in order to
significantly speed up the process of releasing the Budget and implementing the programs
and projects that it funds.
This entails the disaggregation of all budget items into full detail, as well as the elimination
of all lump-sum funds, save for a few exceptions such as the Calamity Fund. In other words,
this reform significantly reduces the need for SAROs. The 2011 Budget is being envisioned
as the first Budget under this new regime.
6. CASH ALLOCATION.To authorize an agency to pay the obligations it incurs,

DBM issues a disbursement authority. Most of the time, it takes the form of a
Notice of Cash Allocation (NCA), and in special cases, the Non-Cash Availment
Authority (NCAA) and Cash Disbursement Ceiling (CDC).
NCA.This is a cash authority issued periodically by the DBM to the operating

units of agencies to cover their cash requirements. The NCA specifies the
maximum amount of cash that can be withdrawn from a government servicing
bank for the period indicated. The release of NCAs by DBM is based on an agencys
submission of its Monthly Cash Program and other required documents.
disbursement Other Disbursement Authorities.In contrast to NCAs, NCAAs are issued to

authority authorize non-cash disbursements. CDCs are meanwhile issued to departments
with overseas operations, allowing them to use income collected by their foreign
posts for their operating requirements.
7.DISBURSEMENT.This is the final step of the budget execution phase, where

government monies are actually spent. The Modified Disbursement Scheme is
mostly used, where disbursements of national government agencies chargeable
against the Treasury are made through government servicing banks, such as the
Land Bank of the Philippines.
The budget process, of course, does not end when government agencies spend
public funds: each and every peso must be accounted for to ensure that it is used
properly, contributing to the achievement of socio-economic goals.

BUDGET ACCOUNTABILITY
This phase happens alongside the budget execution phase. Through budget accountability, the
DBM monitors the efficiency of fund utilization, assesses agency performance and provides a
vital basis for reforms and new policies.
1. PERFORMANCE TARGETS AND OUTCOMES.Agencies are held accountable

not only for how they use public funds ethically, but also on how they attain
performance targets and outcomes using available resources. These performance
measures are set alongside the preparation of the national budget, and these are
indicated in the Book of Outputs. Prior to the execution of the enacted National
Budget, these performance targets are firmed up during the preparation of BEDs.
2. BUDGET ACCOUNTABILITY REPORTS (BARS).Submitted by agencies

on a monthly and quarterly basis, BARs are required reports that show how
agencies used their funds and which identify their corresponding physical
accomplishments. These include quarterly physical and financial reports
of operations; quarterly income reports, a monthly statement of allotments,
obligations and balances; and monthly report of disbursements.
3. REVIEW OF AGENCY PERFORMANCE.The DBM regularly reviews the financial

and physical performance of agencies. Actual utilization of funds and physical
accomplishments, as indicated in the agencies BARs, are evaluated against their
targets as identified via OPIF and in the agencies BEDs. Agency Performance
Reviews (APRs) are conducted quarterly or every semester, as the case may be.
An annual Budget Performance Assessment Review (BPAR) is conducted to
determine each agencys accomplishments and performance by the year-end. The
DBM regularly reports results to the President.
4.AUDIT.Auditing is not within the DBMs jurisdiction, and is instead lodged

under the Commission on Audit (COA). Nonetheless, auditing is critical in
ensuring agency accountability in the use of public funds. The DBM uses COAs
audit reports in confirming agency performance, determining budgetary levels for
agencies and addressing issues in fund usage.

Glossary of Terms
ALLOTMENT authorization issued by DBM to an APPROPRIATIONS, NEW GENERAL this is legislated

agency, through Agency Budget Matrix (ABM) or by Congress and enacted by the President every fiscal
Special Allotment Release Order (SARO), which year as the General Appropriations Act (GAA). The
allows the latter to incur obligation for specified GAA enacts both programmed and unprogrammed
amounts contained in a legislative appropriation. general appropriations. Programmed appropriations
are supported by existing resources and can be
ALLOTMENT CLASS classification of government released during the year, while unprogrammed
expenditures under the following categories: (1) appropriations are stand-by-authority, and can
Personal Services (PS); (2) Maintenance and Other be released only when revenue collections exceed
Operating Expenditures (MOOE); and (3) Capital targets.
Outlays (CO).
BOTTOM-UP PLANNING AND BUDGETING an
ALLOCATION TO LOCAL GOVERNMENT UNITS (ALGU) approach to formulating the budget proposal of
refers to the share of LGUs from the National agencies, taking into consideration the development
Governments internal revenue collections. The needs of poor cities or municipalities as identified in
shares are based on a scheme computed for each LGU their respective local poverty reduction action plans
under the Local Government Code and other special that shall be formulated with strong participation of
laws. basic sectors and civil society organizations.
APPROPRIATION an authorization made by law or BUDGET DEFICIT occurs when government
other legislative enactment, directing payment out of expenditures exceed revenues.
government funds under specified conditions or for
specific purposes. CAPITAL EXPENDITURE OR CAPITAL OUTLAYS refer
to appropriations for purchasing goods and services
APPROPRIATIONS, AUTOMATIC an authorization that add to the Governments assets including
made annually or for some other period prescribed investments in the capital stock of GOCCs and their
by law, by virtue of standing legislation which does subsidiaries and produce long-term benefits (e.g.,
not require periodic action by Congress. Examples of the acquisition of buildings, land, motor vehicles,
automatic appropriations in the national budget are equipment).
Internal Revenue Allotments (IRA) and debt service,
among others. DEBT SERVICE sum of loan repayments, interest
payments, commitment fees, and other charges on
APPROPRIATIONS, CONTINUING an authorization foreign and domestic borrowings.
to support obligations (expenditures incurred and
committed to be paid by the government) for a specific INTERNAL REVENUE ALLOTMENT (IRA) share of
purpose or project, even when these obligations are local government units (LGUs) from the National
incurred beyond the budget year. Governments total revenues.
MAINTENANCE AND OTHER OPERATING OPIF LOGICAL FRAMEWORK (LOGFRAME) a
EXPENDITURES (MOOE) refer to expenditures planning tool that provides a graphical presentation
that support the operations of government agencies, of the connections between societal and sectoral goals
including those for supplies and materials; and organizational outcomes.
transportation and travel; utilities (water, power, etc.)
and maintenance activities. PERSONNEL SERVICES provisions for salaries,
wages, and other compensation (e.g., merit, salary
MAJOR FINAL OUTPUTS (MFOS) goods and services increase, cost-of-living-allowances, honoraria, and
that a department/agency should deliver to external commutable allowances) for permanent, temporary,
clients through the implementation of programs, contractual, and casual employees of the government.
activities, and projects.
TAX REVENUES compulsory charges or levies
MEDIUM-TERM EXPENDITURE FRAMEWORK (MTEF) imposed by government on goods, services,
the governments planning and budgeting framework transactions, individuals, and entities, among others
that provides a medium-term three-year perspective (e.g., individual and corporate income taxes, value-
during budget preparation. added tax on the sale of goods and services, and
special taxes, such as the motor vehicle tax and travel
NATIONAL BUDGET a financial expression of tax).
approved government plans and programs supported
by government resources. ZERO-BASED BUDGETING (ZBB) a budgeting
approach through which major agency programs and
NON-TAX REVENUES revenues from fees, charges, projects are evaluated to determine the continued
and other government collections in exchange for relevance of program objectives vis--vis current
services rendered, penalties imposed, among others. developments/directions; assess whether program
In certain cases, non-tax revenues also include the objectives/outcomes are being achieved; ascertain
privatization of government assets. alternative or more viable ways of achieving the
objectives, and ultimately; guide decision makers
ORGANIZATIONAL PERFORMANCE INDICATOR
on whether the program/project should continue to
FRAMEWORK (OPIF) an expenditure management
be funded at its present level or if funding should be
approach that directs resources toward actual results
increased, reduced or discontinued.
and measures performance according to quality,
quantity, timeliness and cost indicators.
General Solano St., San Miguel, Malacaang, Manila
Trunkline: +632 490 1000 | Website: www.dbm.gov.ph
Visit: www.budgetngbayan.com

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2013 Peoples Budget

Produced by the Philippine Department of Budget and Management

Information Consolidated by:

Paggugol na Matuwid sa Budget ng Bayan:

For questions, comments and suggestions, email publicinfo@dbm.gov.ph or

II. Expenditure Priorities

III. Basics on Budgeting

Here, then, is the P2.0059-trillion National Budget for 2013 in a nutshell:

What is the government budget?

8 PEOPLES BUDGET 2013

General Public Services 4.5% P89.5 B

PEOPLES BUDGET 2013 9

CURRENT OPERATING EXPENDITURES

Personnel Services 640.6 B (31.9%)

MOOE 312.9 B (15.6%)

Subsidies to GOCCs 42.9 B (2.%)

Allotments to LGUs 241.8 B (12.1%)

Tax Expenditure Fund 26.9 B (1.3%)

Infrastructure and Other COs 297.1 B (14.8%)

Equities to GOCCs 2.0 B (0.1%)

Capital Transfers to LGUs 76.3 B (3.8%)

CARP Landowners Compensation 5.0 B (0.2%)

Interest Payments 333.9 B (16.6%)

Net Lending 26.5 B (1.3%)

10 PEOPLES BUDGET 2013

The budgetary allocations for P254.82 B

PEOPLES BUDGET 2013 11

Congress of the Philippines 10.71 B

12 PEOPLES BUDGET 2013

Accelerated Completion of Stronger Government

Greater and Deeper

Transparency for Faster Budget Greater Stakeholder Participation in

PEOPLES BUDGET 2013 13

14 PEOPLES BUDGET 2013

Department of Public Works and Highways Department of Agrarian Reform

Department of Education Department of Transportation and Communications

Department of Health Department of National Defense

PEOPLES BUDGET 2013 15

16 PEOPLES BUDGET 2013

Meet 2 to 3 Good Governance conditions or requirements set by the

Posting of all invitations to bid, and awarded contracts in

Establishment of a Citizens Charter or its equivalent.

The incentive rates will be based on 2 factors:

Bureau/Unit ranking Employee performance appraisal

Best Better Good Poor

Best P35,000 P20,000 P10,000

Better P25,000 P13,500 P7,000

Good P15,000 P10,000 P5,000

PEOPLES BUDGET 2013 17

18 PEOPLES BUDGET 2013

E The programs/projects beneficiaries as identified in the applicable special provisions;

F Status of implementation and program/project evaluation and/or assessment reports; and

G Annual procurement plan, contracts awarded and the name of contractors/suppliers/consultants.

PEOPLES BUDGET 2013 19

Department of Education National Food Authority

Department of Health National Housing Authority

Department of Public Works and Highways National Irrigation Authority

Department of Agriculture National Electrification Administration

Department of Agrarian Reform Light Rail Transit Authority

Department of Transportation and Communications

Department of Environment and Natural Resources

Department of Labor and Employment

Department of Interior and Local Government