Budgeting Framework for LGUs:

Policy Based Budgeting

BOM, 2016 Edition

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
THE LOCAL BUDGET PROCESS

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 LOCAL BUDGETING FRAMEWORK

within our means

PARTICIPATORY invests in the right priorities
delivers measurable results

POLICY-BASED

empowers citizens
PERFORMANCE-
INFORMED

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 POLICY-BASED BUDGETING

Policy-based budgeting means that the budget is prepared with due

regard to local government policy, which, in turn, should be
harmonized with the development plans and reflected in the
investment programs.

A major indicator therefore of policy-based budgeting is when an LGU

is able to fund in its general fund budget(s) the PPAs that were
prioritized in the investment programs, which, in turn, were based on
the approved long-term development plan.

Another indicator of policy-based budgeting is orderliness in the

planning and budget processes, as demonstrated by compliance
with the Synchronized Planning and Budgeting Calendar for LGUs.

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
Legal Bases of Policy Based
Budgeting:
Each LGU shall have a comprehensive multi-sectoral development plan to
be initiated by its development council and approved by its sanggunian.
For this purpose, the development council at the provincial, city, municipal
or barangay level shall assist the corresponding sanggunian in setting the
direction of economic and social development, and coordinating
development efforts within its territorial jurisdiction (Sec 106, RA 7160)

The provincial, city and municipal development councils shall, among

others: (1) formulate long-term, medium-term and annual socio-economic
development plans and policies; and (2) formulate the medium-term and
annual public-investment programs (Sec 109, RA 7160)

Local budget, plans and goals, shall as far as practicable, be harmonized

with national development plans, goals and strategies in order to optimize
the utilization of resources and to avoid duplication in the use of fiscal and
physical resources (Sec 305h, RA 7160)

Local Budgets shall operationalize approved local development plans (Sec 305i,
RA 760
 Art. 410 Submission of Local Development Plan 6

Copy of the Local

Development Plan
and Annual
Investment Program
(prepared and
approved during the
Fiscal Year before the
calendar for budget
Local Development Council preparation)

Local Finance Committee

 POLICY-BASED BUDGETING
HARMONIZING PLANS SYNCHRONIZED PLANNING
AND POLICIES AND BUDGETING ACTIVITIES
• Identify the plans and investment LGUs should be able to observe
programs which should be prepared
• Consider policies of both executive
H S the Synchronized Planning and
Budgeting Calendar
and legislative departments

Article 410, IRR of RA No. 7160:

o AIP should be prepared and
approved before the start of the local
budget preparation phase; and
o Local budgets shall fund PPAs in the L P As soon as the AIP is approved, the
PPMPs may already be prepared.
AIP.

LINKING THE BUDGET WITH PROCUREMENT

HARMONIZED PLANS AND POLICIES PLANNING
Republic of the Philippines
DEPARTMENT OF BUDGET AND MANAGEMENT
 HARMONIZING PLANS AND POLICIES

PDPFP

Identifies strategies
and corresponding PDIP/LDIP
PPAs AIP
Prioritized PPAs matched
Annual slice of the
with financing resources
CDP PDIP/LDIP
and to be implemented
Embodies the vision, sectoral within 3-6 years
goals, objectives, development
strategies and policies within the
term of the elective officials and
the medium-term Considers
policies of the
executive and
legislative
departments

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 LINKING HARMONIZED PLANS AND POLICIES
TO THE BUDGET

Republic of the Philippines

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 SYNCHRONIZED PLANNING AND BUDGETING

Republic of the Philippines

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 SYNCHRONIZED PLANNING AND BUDGETING

Republic of the Philippines

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 SYNCHRONIZED PLANNING AND BUDGETING

Republic of the Philippines

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to Advance Animation
 SYNCHRONIZED PLANNING AND BUDGETING

Republic of the Philippines

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 SYNCHRONIZED PLANNING AND BUDGETING

Republic of the Philippines

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 ANNUAL INVESTMENT PROGRAM

o Prescribed under DBM-CCC-DILG JMC No. 2014-1 dated August 7, 2014, as amended by DBM-
CCC-DILG JMC No. 2015-1 dated July 23, 2015

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 ANNUAL INVESTMENT PROGRAM
Column 1 – AIP Reference Code

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 ANNUAL INVESTMENT PROGRAM
Column 2 – PPA Description

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 ANNUAL INVESTMENT PROGRAM
Column 2 – PPA Description

o All activities and projects are subsumed

under a specific program;
o All programs shall be under the
responsibility of a particular department /
office; and
o A program should be directly related to the
mandate of the department / office.

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 ANNUAL INVESTMENT PROGRAM

Column 3 – Implementing Department/Office

o Implementing Department/Office shall be
presented by sector

Column 4 and 5 – Implementing Schedule

o Expected start and completion dates should be
presented as bases for work plans and
procurement planning

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 ANNUAL INVESTMENT PROGRAM
Column 6 – Expected Outputs

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 ANNUAL INVESTMENT PROGRAM

Column 7 – Funding Source

o General Fund (GF) Proper
o GF – Special Account (SA) – 20% Development Fund (DF)
o GF – Local Disaster Risk Reduction and Management Fund
o Transfers from NGAs (Other than those accruing to the GF)
o Transfers from GOCCs (Other than those accruing to the GF)
o Transfers from Other LGUs
o Income of Local Economic Enterprises (for its own operations)
o Others

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 ANNUAL INVESTMENT PROGRAM

Column 8 to 11 – Estimated Cost

o Personal Services
o Maintenance and Other Operating Costs
o Capital Outlays

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
ps
 ANNUAL INVESTMENT PROGRAM

Column 12 to 14 – Amount of Climate Change PPAs

o Climate Change Adaptation – directly address impacts

or potential impacts of climate change or build resiliency
to current and future climate risks
o Climate Change Mitigation – measures to reduce
greenhouse gas emissions

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
PROCUREMENT PLANNING AND BUDGETING LINKAGE

o As soon as the AIP has been approved, Departments/Offices may

start preparing their Project Procurement Management Plans to
support the requirements/cost estimates provided in the AIP
o The PPMP shall be appended to the budget proposals of the
Departments/Offices

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 PARTICIPATORY BUDGETING

Participatory budgeting is an approach wherein citizens,

through CSOs, are allowed to take part in the process of
allocating public resources.

It offers citizens the opportunity to

contribute in the formulation of options
and in making choices that will affect how
their government acts.

Since participatory budgeting helps

promote transparency, it has the potential
of reducing government inefficiencies and
corruption.

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
m
 PARTICIPATORY BUDGETING
Rules of Engagement
TRANSPARENCY Timely access to relevant/verified information

ACCOUNTABILITY Abide by rules of engagement and fulfill commitments

INTEGRITY Adhere to moral and professional standards

PARTNERSHIP Cooperate and share responsibilities

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 PARTICIPATORY BUDGETING
Rules of Engagement
CONSULTATION
AND MUTUAL Enhance knowledge sharing and continuing dialogue
EMPOWERMENT

RESPECT FOR Understand and abide by the limitations of the

INTERNAL stakeholders with respect to the nature of information to
be disclosed and the extent of involvement based on
PROCESSES institutional/legally imposed limitations

SUSTAINABILITY Ensure continuing engagement by instituting

progressive policies and operational mechanisms

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
PERFORMANCE-INFORMED BUDGETING

“may kwento
ang bawat kwenta”

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
PERFORMANCE-INFORMED BUDGETING
PIB enables the more meaningful presentation of the budget, whereby each
government peso is aligned with performance indicators and tangible targets of
the LGU.

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
PERFORMANCE-INFORMED BUDGETING

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT count
“I hereby give and convey to you all and singular,
my estate and interests, rights, title, claim, and
advantages of and in said orange, together with
all its rind, juice, pulp, pits, and all rights and
advantage with full power to bite, cut, and
otherwise at the same time eat the same or give
the same away with and without the rind, skin,
juice, pulp, or pits, or anything herein before or
herein after or in any other deed or deeds
instruments of whatever nature or kind
whatsoever to the contrary in anywise
notwithstanding.”
Republic of the Philippines
DEPARTMENT OF BUDGET AND MANAGEMENT
 “Here is an
orange.”

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 THE LOCAL BUDGETING FRAMEWORK

THANK YOU

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT