VISION AND MISSION

Honest and effective governance—truly transparent, disciplined and

serving the interest of the country and its people — is our vision for the
Philippine Public Financial Management (PFM) System.

A sound public financial management system helps government decision

makers—both oversight agencies and spending agencies—in performing
their functions do their jobs effectively, efficiently and economically. It helps
them to channel funds to where they are intended and will do the greatest
good and sends off signals when deviations occur. Most importantly, it
helps to inform citizens where public funds are actually being spent.

Mission and Goals

The Commission on Audit (COA), the Department of Budget and

Management (DBM) and the Department of Finance (DOF) including the
Bureau of the Treasury (BTr) are collectively committed to promote fiscal
responsibility and good governance through transparency and
accountability in financial transactions in the Philippine government. At the
core of this mission is the need to put in place a government integrated
financial management information system that will provide reliable and
accurate information to support operational budgeting, cash programming
and management, timely financial reports and effective enforcement of
financial accountability rules and procedures.

The group’s mission is in support of the Philippine governance reform

agenda. As stated in the draft Philippine Development Plan (PDP) for 2011
to 2016, the overall goal for reforming governance is as follows:

“Effective and honest governance will be promoted and practiced through

four key strategies: (1) ensure effective, efficient, transparent, accountable
and economical delivery of public service; (2) curb corruption; (3)
strengthen the rule of law; and, (4) enhance citizens’ access to information
and participation in governance.”

In January 2010, a Memorandum of Agreement among COA, DBM and

DOF led to the establishment of an interagency steering committee called
the GIFMIS Committee to oversee, coordinate and develop the integration
and harmonization of the government’s financial management information
systems.

The PFM reform program seeks to clarify, simplify, improve and harmonize the financial
management processes and information systems of the public sector and, as necessary, reengineer
and integrate the relevant systems in the COA, DBM, DOF and implementing agencies. The desired
result is that the national government is able to perform its functions of maintaining fiscal discipline,
fund allocation efficiency and operational efficiency for effective delivery of public services.

By 2015, it is envisioned that the core GIFMIS and a Treasury Single Account will be functioning to
provide decision makers with the following benefits:

1. Real-time on-line monitoring and control of obligations and their direct links to cash
disbursements for more effective financial control and accountability;
2. Consolidated financial management reporting requirements, using harmonized classification
of budgetary, treasury and accounting accounts with standardized definitions for fiscal
terminologies, as follows:
o Budgetary accounts – appropriations, allotments, obligations and expenditures
o Treasury accounts – cash flow statement of the National Treasury
o General ledger accounts – assets, liabilities, equity, income and expenses
o A single treasury account that provides BTr a more effective way of cash management,
a more economical system for cash disbursements, and enables it to reconcile bank
balances and remove revenue and expenditure floats;
o A predictable and streamlined allotment and cash release programs throughout the year
to support the operations of implementing agencies based on reliable cash forecasting
and programming by DBM and the BTr;
o Regular in-year reports on the status of budget execution, and timely year-end audit
reports of agency financial and physical operations which will be used in the budget
preparation process, the Congressional debate on agency budgets and performance,
and the public’s participation in the budget process; and,
o Systematic recording and reporting of all liabilities of government entities including
guaranteed and contingent liabilities to enable national government to manage its
financial exposure.
MANILA, Philippines (UPDATED) – The Philippine government is now
operating on a reenacted budget, after lawmakers failed to pass the 2019
national budget on time.

Pending the enactment of the 2019 P3.757-trillion national budget, the

Department of Budget and Management (DBM) issued guidelines on how
the government will operate in the coming months.

Senators, who received the 2019 General Appropriations Bill (GAB) late,

said they expected the budget to be passed by February. (READ: Budget
deadlock: Who's to blame?)

This means the government will have to use the same amount of funds
provided under the P3.767-trillion 2018 budget for the first quarter of 2019.

It also means new government projects would have to be delayed and

some key services will be affected until the new budget act is signed.

What will be affected?

To cushion the impact of the delayed passage a new budget, the 1987
Constitution has safeguards that allow the government to operate on a
budget which was enacted the previous year, until Congress passes the
GAB.

In other countries such as the United States, the non-passage of the

national budget for the coming year could lead to a government shutdown,
as what is happening now. Because of this situation, US government
employees are not receiving salaries from their respective agencies.

As Philippine officials expect the budget to be passed in the first quarter of

2019, the DBM issued Budget Circular 2019-01 giving agencies the power
to spend up to 25% of their 2018 budget allocations.

The DBM said the agencies may not spend more than the amount specified
in the proposed budget for projects and operations in the first quarter of
2019.

MANILA, Philippines – A proposed shift in budgeting systems that would

improve the delivery of services could happen in 2019.
But the House of Representatives suspended deliberations on the 2019
national budget, in what seemed to be a "clash" between the executive and
the legislative branches.

Lawmakers are opposed to the shift to cash-based budgeting, arguing that

huge cuts will be implemented should they pass the proposed expenditure
program.

However, the Department of Budget and Management (DBM) maintained

that the shift would "force the agencies" to speed up completion of projects
and actually utilize their funds within the year.

So what's the fuss about the issue? Here's what you need to know:

What is cash-based budgeting?

A cash-based budgeting system limits contractual obligations and

disbursing payments to goods delivered and services rendered within the
fiscal year.

This means implementing agencies need to complete their contracts by the

end of 2019, regardless of possible delays. Projects that are "not
implementation-ready" will be removed from the proposed budget.

In other words, the system promotes fiscal discipline and better planning
among agencies in spending or using their resources.

Under the system, an extended payment period of 3 months after the fiscal
year would be provided to give more time for government agencies to make
their payments.

If a certain project has an implementation period that goes beyond 12

months, they may apply for a multi-year obligation authority before entering
into a contract.

The implementing agency is required to show the schedule of annual cash

requirements for a multi-year project.

How is it different from an obligation-based budget?

For the longest time, agencies' budgets have followed two-year, obligation-
based budgeting, which disburses payments as obligations or
commitments that may not necessarily be delivered within the same year.

Budget Secretary Benjamin Diokno said that the problem with this set-up is
that agencies tend to enter into contracts before the year ends – just so
they can commit to projects – even if they will not be completed within the
same year.

The Department of Budget and Management (DBM), in partnership with

Globe Telecom and FreeBalance, Inc., announces today the
implementation of a secure and reliable modern financial management
information system to achieve better transparency, accountability, and
efficiency among national government agencies.

The new Budget and Treasury Management System (BTMS) is an

integrated and fully-automated platform for a sustainable Government
Resource Planning (GRP) solution that is extensible, flexible and adaptable
to reforms as well as suits a wide range of public financial requirements.  

BTMS was piloted in DBM and the Bureau of Treasury (BTr) as both
oversight and spending agencies while the Commission on Audit will have
special access to support auditing functions. The system will be rolled out
to all national government agencies within the next year.

“With the implementation of BTMS, we will revolutionize the way we do

things and will further improve our ability to deliver public service. The
effective use of modern technology will strengthen our fiscal responsibility
as it would allow us to keep an eye on the government financial status real
time.  We also believe that an improved and harmonized government
financial process will provide more reliable and timely financial information
leading to sound policy decision-making for executives, managers and staff
in the line and oversight agencies,” said Budget and Management
Secretary Benjamin Diokno.
Albert de Larrazabal, Globe Chief Commercial Officer, on the other hand
said:  “As a company committed to helping the Philippines become a digital
nation, we are happy to be part of the government’s journey towards digital
transformation.  Through our information and communications technology
arm, Globe Business, we will continue to explore ways on how
organizations can best use ICT to promote process efficiencies and
enhance delivery of services.”

The BTMS project was awarded to the joint venture of Globe through its
subsidiary, Innove Communications, and FreeBalance, Inc., a Canadian
developer of software solutions for public financial management. For the
project, Globe provided the infrastructure while FreeBalance developed the
software based on globally-accepted solutions but configured and
customized for the Philippine government.

Manuel Schiappa Pietra, President and CEO of FreeBalance, also

encouraged the government to capitalize on the optimal value of BTMS.
“Tapping the full features of BTMS, under the FreeBalance GRP platform,
will help the government ensure a more responsive, transparent and
accountable public expenditure management system. Dare I say that it will
support improvement to PEFA assessment scorecards, reinforce the
performance-informed budgeting, and drive for macroeconomic
management,” he said.
BTMS supports DBM in the maintenance and complete trail of budget
appropriations and balances for each national agency as well as supports
high-level aggregation of processes relating to the collection, handling, and
usage of cash resources undertaken by the Bureau of Treasury.
  
For years, the government has been dealing with processing financial
transactions manually while fiscal agencies utilize numerous stand-alone
systems to generate financial information.  This situation resulted in lack of
budget credibility, lack of funding predictability, weak cash management
system, and absence of a common budgetary and accounting
classification, according to the 2016 Public Expenditure and Financial
Accountability (PEFA) Assessment.
 

The World Bank, meanwhile, noted that the country’s public financial
management would be more efficient with the existence of an integrated
financial management system that will provide a more accurate view of the
government’s financial performance and management of public funds.