Fiscal Ad Space

Pres. Aquino's Platform and Policy Pronouncement on Budget and Management

2010-07-28T10:24:00.014+08:00

The new President's Platform of Government has been translated into specific policy pronouncement for each major agency of the bureaucracy. Here's the one for the DBM:

OVERARCHING GOAL:

In line with the principle of zero-based budgeting, the DBM Organizational Performance Indicator Framework (OPIF) will be linked with the Civil Service Commission (CSC) Performance Management system-Office Performance Evaluation System (PMS-OPES). The qualitative and quantitative measures of agency performance as well as compliance with findings of the Commission on Audit (COA) shall determine succeeding budget allocations.

1.Create a program plan for a zero-based budgeting for all national government agencies.
2.Determine the present state of the budget to see how much of the FY 2010 GAA is left.
3.Ensure that all employees and officials of the department will have their Statement of Assets, Liabilities and Net Worth (SALN) available and accessible to the public.
4.Ensure that government agencies and offices will be streamlined to have clear-cut and distinct mandates in order to spur greater efficiency and accountability.
5.Work with the CSC to ensure that performances of government agencies and civil servants will be evaluated rationally and systematically through an effective and measurable performance management system to be approved by the CSC.
6.Ensure that qualification standards will be strictly followed, and at least half of the positions of Undersecretaries and Assistant Secretaries will be filled with honest and competent career civil servants to ensure continuity and sustainability of effective policies and programs.
7.Work with government agencies to organize, package and disseminate all budgets to the media regularly and posted in the internet for public consumption.
8.Ensure transparency in budget processes through an open information system and formation flow by:
• Posting details of all lump sum disbursements in the DBM web site
• Immediately formulating a self-imposed set of conditions for the release of appropriations charged against “unprogrammed” funds so as to eliminate abuse
9.Create a Presidential Select Committee to provide oversight over all lump sum disbursements (PDAF), contingency, calamity, AFMA, intelligence and confidential funds). This Committee should be composed of bi-partisan members of the legislature, the private sector and civil society members who shall be bound by an Oath of Confidentiality.
10.Regularly package and disseminate information on agency budgets, bidding and procurement documents and SLANs of senior government officials, to ensure transparency and accountability.
11.Ensure that the Department of Budget and Management is streamlined and rationalized to have clear-cut and distinct mandates and that qualification standards, especially on eligibility, will be strictly followed.
12.Work with the CSC to ensure that performance of government agencies and civil servants will be evaluated rationally and systematically through an effective and measurable performance management system to be approved by the CSC.

P-Noy's Platform of Government

2010-07-17T22:42:00.006+08:00

It's been quite sometime since my last post. The assumption of Benigno Aquino III as the country's 15th President has renewed my enthusiasm to update this site. The government's official web site (www.gov.ph) is under reconstruction so the new president's platform of government is not yet known to many Filipinos.

So for a start, here's an excerpt:

The Vision for the Philippines:

A country with…

1. A re-awakened sense of right and wrong, through the living examples of our highest leaders;

2. An organized and widely-shared rapid expansion of our economy through a government
dedicated to honing and mobilizing our people’s skills and energies as well as the
responsible harnessing of our natural resources;

3. A collective belief that doing the right thing does not only make sense morally, but translates into economic value as well;

4. Public institutions rebuilt on the strong solidarity of our society and its communities.

Our Mission:

We will start to make these changes first in ourselves---by doing the right things, by giving value to excellence and integrity and rejecting mediocrity and dishonesty, and by giving priority to others over ourselves.

We will make these changes across many aspects of our national life.

A Commitment to Transformational Leadership:

1. From a President who tolerates corruption .. > to a President who is the nation’s first and most determined fighter of corruption.

2. From a government that merely conjures economic growth statistics that our people know to be unreal .. > to a government that prioritizes jobs that empower the people and provide them with opportunities to rise above poverty.

3. From relegating education to just one of many concerns .. > to making education the central strategy for investing in our people, reducing poverty and building national competitiveness.

4. From treating health as just another area for political patronage .. > to recognizing the advancement and protection of public health, which includes responsible parenthood, as key measures of good governance.

5. From justice that money and connections can buy .. > to a truly impartial system of institutions that deliver equal justice to rich or poor.

Economy

6. From government policies influenced by well-connected private interests .. > to a leadership that executes all the laws of the land with impartiality and decisiveness.

7. From treating the rural economy as just a source of problems, > to recognizing farms and rural enterprises as vital to achieving food security and more equitable economic growth, worthy of re-investment for sustained productivity.

8. From government anti-poverty programs that instill a dole-out mentality .. > to well-considered programs that build capacity and create opportunity among the poor and the marginalized in the country.

9. From a government that dampens private initiative and enterprise .. > to a government that creates conditions conducive to the growth and competitiveness of private businesses, big, medium and small.

10. From a government that treats its people as an export commodity and a means to earn foreign exchange, disregarding the social cost to Filipino families .. > to a government that creates jobs at home, so that working abroad will be a choice rather than a necessity; and when its citizens do choose to become OFWs, their welfare and protection will still be the government’s priority.

Government Service

11. From Presidential appointees chosen mainly out of political accommodation .. > to discerning selection based on integrity, competence and performance in serving the public good.

12. From demoralized but dedicated civil servants, military and police personnel destined for failure and frustration due to inadequate operational support .. > to professional, motivated and energized bureaucracies with adequate means to perform their public service missions.

Gender Equality

13. From a lack of concern for gender disparities and shortfalls, > to the promotion of equal gender opportunity in all spheres of public policies and programs.

Peace & Order

14. From a disjointed, short-sighted Mindanao policy that merely reacts to events and incidents .. > to one that seeks a broadly-supported just peace and will redress decades of neglect of the Moro and other peoples of Mindanao.

Environment

15. From allowing environmental blight to spoil our cities, where both the rich and the poor bear with congestion and urban decay .. > to planning alternative, inclusive urban developments where people of varying income levels are integrated in productive, healthy and safe communities.

16. From a government obsessed with exploiting the country for immediate gains to the detriment of its environment .. > to a government that will encourage sustainable use of resources to benefit the present and future generations.

This platform is a commitment to change that Filipinos can depend on. With trust in their leaders, everyone can work and build a greater future together.

Must-read updates!

2009-11-09T22:31:00.006+08:00

In my post last Oct 10th (Waived items in the 2010 NEP), I mentioned that three (3) PS costs were retained as waived items from the 45%-55% PS limitation. My source of information was the 2010 National Expenditures Program (NEP), otherwise known as the President's Budget, particularly, Section 87, General Provisions which was posted in the DBM Central Office web site. The printed hard copy of the same document, however, revealed that their are two (2) other PS costs added as waived items. These are: (a) retirement gratuity and terminal leave benefits of retiring LGU personnel; and (b) in the case of barangays, the Year-end Bonus of mandatory barangay officials up to P1,000 for the Punong Barangay and P600 each for the Kagawad, Barangay Secretary and Treasurer.

Before they went on recess last October, the House of Representatives approved on second reading the 2010 Budget (General Appropriations Bill). The waived items mentioned were carried in the House approval. It is expected that when the Senate resumes session today, November 9th, the budget bill will be among those that the body will tackle.

Revision of 20% Development Fund usage. In the next few weeks, a joint circular will be issued by the DILG and DBM revising Joint Circular No. 2005-1, prescribing the guidelines on the utilization of 20% Internal Revenue Allotment for development projects.

The revised guidelines will be issued in response to the requests of LGUs stricken by the recent calamities. In particular, projects related to disaster response, mitigation and preparedness will be added as among those that can be funded by the 20% Development Fund. These include: construction or rehabilitation of evacuation or relocation centers; purchase or repair of area-wide calamity-related alarm or warning system; purchase or repair of calamity-related rescue operations equipment; construction or rehabilitation of local roads and bridges; and purchase of dump trucks, graders and pay loaders.

The joint circular was drafted by the DILG, and in our coordination meeting today, the regional directors were asked to come up with the DBM comments and suggestions.

P 12 B Calamity Fund: The tale of two versions.

2009-10-26T20:10:00.004+08:00

When Congress resumes session on November 9th, the Bicameral Conference Committee will try to reconcile the House and the Senate versions of Joint Resolution No. 48, setting aside P12 B to augment the already depleted Calamity Fund of the national government.

House version. The P 12 B will be sourced from the Unprogrammed Fund. Said Fund is among the Special Purpose Funds in the yearly GAA. DBM releases the money once the Bureau of Treasury certifies that the revenue back up has been collected. With the collection of our main collecting agencies, the BIR and BoC on a downtrend, that money is illusory. Thus, the House authorized the President to resort to borrowings. This means too that the money is not readily available because the government will have to look for investors for its blond flotation or schedule a series of treasury bill auctions.

Senate version. On the other hand, the Senate identifies the government's share from the Malampaya natural gas project as the funding source for the calamity fund augmentation. It is not clear though if the money is already available that is, the government share from the natural gas extraction has already been sold and the proceeds deposited in the National Treasury.

Time is of the essence considering that more relief operations are needed and massive rehabilitation efforts have yet to be started in areas affected by the typhoons "Ondoy", "Pepeng" and the previous typhoon "Frank".

Waived items in the 2010 NEP.

2009-10-10T14:35:00.006+08:00

When Joint Resolution No. 4 (JR 4) was signed and the corresponding SSL 3 1st tranche guidelines (Executive Order No. 811) was issued by the President, the apprehension of many LGUs that they cannot implement the first tranche became a reality.

Position papers were prepared and submitted to Congress appealing to our legislators to amend Section 7 of JR No. 4 which provides that the determination by the local sanggunian of the salaries and wages of local government personnel shall be subject to the PS limitation prescribed under Section 325(a)of RA 7160. One such position paper was prepared by the Iloilo MBOs Association (IMBOA) which was adopted by the Iloilo League of Municipalities, and later on by the LMP Visayas. Nothing's been heard about Congress' response to the position paper.

What's closer to reality? It seems Congress is not keen on amending that disputed section of JR 4. We suggested that another tack may be employed by LGUs - which is to lobby to their respective Congressmen for the retention of Section 88, General Provisions of the 2009 General Appropriations Act (GAA). The said section enumerates the PS items that can be waived from the 45%-55% PS limitation, among them, the continued implementation of SSL.

The 2010 Budget submitted by the President is being deliberated upon by both Houses of Congress. As gleaned from the said budget (2010 National Expenditure Program), particularly, the last paragraph of Section 87 of the General Provisions - only three (3) PS costs are proposed to be waived from the PS limitation, namely:

- PS costs of mandatory positions specified in RA 7160;
- PS of NG personnel devolved to LGUs, and
- PS of hospital services transferred to new cities from the provinces

The other PS costs which used to be part of the waived items were deleted. These include: continued implementation of SSL; terminal leave; monetization of leave credits; magna carta benefits of PHWs; and honoraria and cash gift of barangay officials.

I am positive it's never too late to mount a concerted effort of lobbying with our legislators. Every LGU from Aparri to Jolo should contribute to the effort. Otherwise, LGU personnel, especially those employed in lower class LGUs will be left out in the cold.

Implementing the 1st Tranche of SSL 3 for LGUs.

2009-10-10T13:42:00.004+08:00

I was supposed to post this story right after the issuance of the circular but the series of trainings on the roll-out of the revised IRR of the GPRA starting the third week of September, and the Executive Forum on the implementation of Internal Audit System for EC pilot provinces - have kept me pretty occupied.

Better late then never. Local Budget Circular No. 2009-92 has already been issued to implement the first tranche of SSL 3 for LGUs starting January 1, 2010. LGUs have been waiting for this and the timing of its issuance coincided with the finalization of local annual budgets. By this time, LGUs may already have decided whether or not to include in their annual budgets the funds to implement the first tranche.

This will now dispel any speculation that the much-awaited circular will ease the restrictions imposed by the mother SSL 3 issuance, JR No. 4. Not quite. LBC 2009-92 cannot amend the basic issuance. And so, the restrictions stay. LGUs can implement the first tranche if (a) they have not exceeded the PS limitation prescribed under Section 325(a) of RA 7160; (b) the implementation is confined to the modified salary schedule corresponding to their economic classification; and (c) subject to availability of funds.

LBC 2009-92, aside from prescribing a separate modified salary schedules for each class of LGUs (Annexes "A1" to "A8")- also spelled out the guidelines on the implementation of reallocated classes positions like Nurses, teachers, medical officers.

PERA and AdCom now combined per JR 4.

2009-08-24T12:54:00.003+08:00

The DBM has recently issued Budget Circular No. 2009-3, prescribing the revised Rules and Regulations on the Grant of Personnel Economic Relief Allowance (PERA).

BC 2009-3 was issued to implement certain provisions of the Congress Joint Resolution No. 4 (SSL 3), particularly, on the categorization of compensation and other benefits authorized for government personnel, now termed as Total Compensation Framework (TCF). Under the TCF's enumeration of "Standard Allowance and Benefits", the PERA of P500 per month and the Additional Compensation (AdCom) of P1,500 per month are now combined as simply PERA. In effect, the PERA that government are entitled to is P2,000 per month.

BC 2009-3 is the second of a series of issuances that DBM has issued so far to implement JR 4.

Bayanihan spirit: The Sibalom way

2009-07-31T14:56:00.001+08:00

I took this video in July 2008, a few weeks after the onslaught of Typhoon Frank. Barangay officials of the 76 barangays of Sibalom, Antique took turns in piling up sand bags along the bank of Sibalom river that served as temporary break water.

One year hence, it seems the rehabilitation of Sibalom river has not yet become a priority in the immediate rehabilitation works of the government. An inquiry from the DPWH revealed that the Sibalom project is in the list of the P5.876 B "Bangon Panay" project or the so-called Paglaum Fund. The money is be sourced from the proceeds of the Simplified Net Income Taxation System (SNITS) bill pending with the Senate Ways and Means Committee chaired by Sen. Lacson.

Meanwhile, Sibalom residents with the help of municipal and barangays officials have to fend for themselves, mustering their own resources to mitigate the damage every time the water level rises along the river bank.

I hope the President get to visit the area soon just as she did last Monday here in Iloilo where she ordered the release of an additional P100 M to augment the initial P481 M for the rehabilitation efforts in Panay.

Still on the National government's debt to GSIS.

2009-07-02T13:47:00.006+08:00

This is an addendum to my post yesterday regarding the debt that the DepEd owes the GSIS representing arrears in premium on the insurance coverage of teachers and other personnel.

Practically, the entire bureaucracy including LGUs have incurred prior years' obligation with the GSIS since 1997. How did these obligations came about? In the case of national government agencies (I'll make a post on the case of LGUs later)- that "utang" was attributed to the 2.5% increase in the national government share in the premium rate from 9.5% to 12.5% starting July 1997 to December 1998. The premium deficiency was not paid because the appropriations in the GAA during the said period for the Retirement and Life Insurance Premium (RLIP) of state employees were computed at the rate of 9.5% only.

The reconciliation as to the actual amount of deficiency went on for several years. When the figures were finally established, the mode of settlement became another issue. The first option was for the DOF to issue a fixed rate treasury bond in favor of the GSIS. A MOA to that effect was executed between the DOF and DBM representing the national government, and the GSIS. For undisclosed reasons, the settlement did not push through. The second option which also did not materialize was for the national government to turn over to the GSIS a governmnent-owned property in exchange for the writing off of the debt. On the third settlement attempt, Congress agreed to appropriate the amount of P3,299,791,000 as part of the supplemental appropriation for 2006 through RA 9358 (the national government then was operating on a reenacted budget).

Joint Memorandum Circular No. 2007-1 signed by GSIS President Winston Garcia and DBM Secretary Rolando Andaya, Jr., was issued to implement the said appropriation. In gist, the joint circular prescribes that:

1) The DBM shall release the appropriated amount of P3,299,791,000 to the GSIS as payment of the deficiency in government share on the premium contribution from July 1997 to December 1998. The GSIS shall apply said payment on the principal amount only, not on any interest that it has imposed thereon;

2) The DBM shall post in its website the amount of increase in RLIP per agency as computed by the GSIS;

3) The GSIS shall post to the individual account of the GSIS retirees and members the said payment. Any interest imposed by the GSIS shall not be charged against the retiree/member but shall be subject to separate discussion by the DBM and GSIS;

4) The GSIS shall pay the members the amount pertaining to the adjustment in retirement benefits and basic monthly pension as well as refund the full amount deducted from the active members whose matured policies and salary/policy loans were reduced.

The issue of the settlement of the RLIP deficiency (principal amount) should be put to rest, that is, if the GSIS has fully complied with its commitment as drawn in the joint circular. But the matter of the interest imposed by the GSIS that it insists should be paid by the national government, is left hanging as negotiation between the former and the DBM has not been finalized yet.

Since this is a government to government negotiation, why can't the GSIS condone the said interest charges? The HDMF (PagIBIG) has resorted to this time and again.

Thinking aloud, but disturb: the DepEd debt to GSIS.

2009-07-01T14:45:00.005+08:00

The perenial problem on the unremitted GSIS premium contributions of DepEd has again resurfaced. Inquirer.net ran this story on this debt which already balloned per GSIS estimates, to P21.3 B. Said debt consisted of unpaid insurance premiums of P7.39 B and corresponding interest charges of P13.9 billion for the period July 1997 to December 2007.

DepEd has refuted the claim saying that the figures were incorrect. And so the impasse remains to the detriment of DepEd personnel most specially, the teachers who have consequently bore the brunt of deductions from their salary loans including those who have already retired, in which case, the proceeds of their retirement benefits have likewise been emasculated.

The story did not mention whether there was partial settlement of the disputed debt. But I supposed this was in part paid off (at least insofar as the unpaid premiums are concerned) by the P3.299 B which the DBM has remitted to the GSIS in 2007. As can be recalled, in year 2006, Congress appropriated through a supplemental budget (RA 9358), the said amount to cover the deficiency in premium contributions (principal only) from July 1991 to December 1998. The penalties (interests and surcharges) will be settled separately between the DBM and the GSIS.

Update on EO 366

2009-06-29T15:12:00.003+08:00

As of June, 2009 the DBM has approved the Rationalization Plans (RPs) of 54 agencies consisting of seven (7) department-level entities; 18 attached agencies; 15 executive offices; and 14 GOCCs. The seven (7) departments with approved RPs are CSC (among the first to implement in 2006), Office of the President, Office of the Vice President, DOLE, DOST DOT, and DBM (RP approved on May 8th).

The RPs of eight (8) departments with complete submission namely: DAR, DepEd, DOH, DND, DPWH, DTI, NEDA, OPS - are still under evaluation. In addition six (6) other departments: DA, DENR, DOF, DOJ, DILG and DOTC have partially submitted their respective RPs. DFA, DOE and DSWD are not required to submit their RPs as these departments have already implemented their own rationalization programs prior to EO 366.

The long-awaited SSL3 - NOW NA!

2009-06-23T15:32:00.009+08:00

The President, before leaving for an official visit to Japan on June 17th, signed two (2) very important issuances: Joint Resolution No. 4 and Executive Order No. 811. Both issuances dwell on the same subject matter - the Modified Compensation and Position Classification System commonly referred to as SSL 3.

Joint Resolution No. 4 is the the duly enacted harmonized version (after having gone through the Congressional bicameral conference committee) of Joint Resolution No. 36 of the House of Representatives and Joint Resolution No. 26 of the Senate. EO No. 811, on the other hand, implements the first tranche of the rounds of salary increases authorized under JR No. 4.

Four-gives starting July 1st for NG personnel. This means national government personnel are already assured of the first tranche of their pay hike starting July 1st this year. EO 811 has prescribed a salary schedule for this. The salary differential is computed: adjusted salary rate in the modified salary schedule (same grade, same step) minus salary rate as of June 30, 2009 divided by 4.

Why January 1, 2010 for LGU personnel? The sponsorship speech of Senator Angara on the Senate version of the joint resolution revealed that local officials themselves lobbied before Congress for the deferment of the implementation of SSL 3 to January 1st of 2010.

The details of how EO 811 will be implemented shall be spelled out by the DBM in the corresponding budget circulars.

SSL 3 in the offing.

2009-06-08T15:22:00.010+08:00

Congress has finally completed the finishing touches on the Modified Compensation and Position Classification System or SSL 3, shortly before its scheduled recess on June 5th.

The salary standardization measure officially known as Joint Resolution No. 36, was passed by the House of Representatives on May 21st. The same measure was passed by the Senate on May 28th with a few but significant revisions. After which the bicameral conference committee met to harmonize both versions of the Joint Resolution. The bicameral conference committee report by June 3rd.

Here are some of the most important features of the Joint Resolution:

Title - "JOINT RESOLUTION AUTHORIZING THE PRESIDENT OF THE PHILIPPINES TO MODIFY THE COMPENSATION AND POSITION CLASSIFICATION SYSTEM IN THE GOVERNMENT AND TO IMPLEMENT THE SAME INITIALLY EFFECTIVE JULY 1, 2009, AND FOR OTHER PURPOSES". The word "AUTHORIZING" was inserted in lieu of "URGING" as originally proposed, the reason being that the power to prescribed a standardized compensation scheme is vested with Congress but is being delegated to the President.

Salary Schedule - The 33 salary grade system is maintained with the same eight (8) steps per salary grade (SG-1 is just the same, allocated to Utility Worker 1 and SG-33 being assigned to the President). From the original proposal of P8,000 monthly minimum rate, JR 36 increases said minimum rate to P9,000 per month.

Effectivity - For the national government, GOCCs and GFIs, the salary increase takes effect July 1, 2009. For LGUs, the effectivity is moved to January 1, 2010. This is surprisingly different from the DBM proposal as contained in the draft joint resolution which is July 1st.

Mode of Implementation - For the national government, the implementation of the salary difference (present rate of the incumbent vis-a-vis the adjusted rate in the same step and salary grade in the revised salary schedule) shall be spread equally in four (4) years. In the case of GOCCs, GFIs and LGUs, the same computation of salary differential shall be applied except that the implementation period shall be dependent on their finances but should at least be carried out in four (4) years. This means that GOCC, GFI and LGU personnel would be able to receive in full their salary increase beyond the four- year period as their finances warrant and that the salary differentials may vary from year to year.

Total Compensation Framework - The joint resolution classifies the compensation received by government personnel into four (4) categories namely: Basic Pay including Step Increments, Standard Allowances and Benefits, Specific-Purpose Allowances and Benefits and Incentives.

No diminution in pay - The joint resolution guarantees that there will be no diminution in benefits being received and those yet to be received by government personnel. Some benefits however, such as hazard pay, need to be rationalized.

Reinvention of some benefits - The step increment due to meritorious performance shall be revived but the Productivity Incentive Bonus (PIB) will be done away with. In the same manner, the "Extra Cash Gift" or "Performance Bonus" shall be replaced by "performance Enhancement Incentive". The CNA incentive is retained but this will no longer be charged against savings. As introduced by Sen. Mar Roxas, the funds needed to pay CNA Incentive shall be provided for in the yearly budget.

Bad news for LGUs - As initiated in the House of Representatives and concurred by the Senate, the salaries of LGU personnel shall be determined by their respective Sanggunians, and if their finances warrant, salary or wage increase may be granted subject to the personal services limitation prescribed in the 1991 Local Government Code.

UBOM 2008 Edition Roll-out

2009-05-13T21:46:00.002+08:00

The Department of Budget and Management Regional Office VI in coordination with the Association of Local Budget Officers (ALBO VI) is conducting a series of Seminar-Workshop on the roll-out of the Updated Budget Operations Manual (UBOM) for LGUs.

The seminar-workshop is being conducted for municipalities by province. A similar training will be conducted separately for provinces and cities combined. Invited to participate are members of the Local Finance Committee (LFC), Accountants, Sanggunian members and department heads. Schedule of the seminar-workshop are as follows:

- Iloilo municipalities -- May 6-8
- Negros Occ. municipalities -- May 12-14
- Aklan and Capiz municipalities -- May 19-21
- Antique and Guimaras municipalities -- May 26-28
- Provinces and cities -- June 3-5

Invited participants may coordinate with the DBM Regional Office VI or the Provincial Budget Office, Province of Iloilo for further information.

Reflections for the Lenten season.

2009-04-08T14:15:00.003+08:00

The Lenten season marks a forty day period. It begins on Ash Wednesday and ends on Good Friday for Protestants while Catholics end the season on the Thursday before Easter.

Lent is the season of fasting, self-denial, Christian growth, penitence, conversion, and simplicity. Lent, which comes from the Teutonic (Germanic) word for springtime, can be viewed as a spiritual spring cleaning: a time for taking spiritual inventory and then cleaning out those things which hinder our corporate and personal relationships with Jesus Christ and our service to him.

eHow.com has come up with a few suggestions that Christians like us can do to observe the lenten season. Just click this link.

Signed on Friday the 13th, to take effect April fool's . .

2009-04-02T16:07:00.002+08:00

The heading is borrowed from my co-employee, Edge. It refers to the General Appropriations Act (GAA) for 2009 or RA 9524. It was signed by the President on April 13th, Friday and by operation of the law, takes effect on April 1st.

The DBM has already issued National Budget Circular No. 519, prescribing the guidelines on the releases of funds appropriated in the new GAA. As usual, this would entail first, the preparation of Agency Budget Matrix (ABM) disaggregating the agency appropriations into "This Release", "Not Needing Clearance" "Needing Clearance", etc. Upon receipt of the approved ABM, the agency concerned will have to prepare their respective Cash Program.

The Buzz for LGUs

2009-04-02T15:31:00.001+08:00

Here are some of the latest development affecting LGUs:

- The Supreme Court has recently affirmed its earlier decision declaring as unconstitutional the conversion of 16 municipalities into cities. This would mean that this unfortunate 16 will revert as municipalities, giving up their IRA shares as cities. For the existing cities, this is a long awaited welcome news as they stand to reap a windfall in terms of IRA adjustment. For the municipalities, this SC final decision is a sad reality for they will be giving up part of their IRA shares in favor of the 16 which will soon be back in the fold.

- The DBM is set to release the financial assistance (FA) to LGUs whose IRA shares last year suffered a reduction due to he adoption of the 2007 Census of Population. Said FA shall be charged against the Kilos Asenso Support Fund. A total of Php 1.4 B has been set aside for the purpose corresponding to two (2) months share. Per DBM's policy guidelines, LGUs with computed share of less than Php 100T will receive the amount without need of further request. Those with Php 100 T or more will have to accomplish a prescribed form (KA Form No. 1) which will then be submitted to DBM as basis for the release. For Region VI, provinces, cities and municipalities will received a total of Php 113.248 M.

Implications of the Reclassification of LGUs

2009-02-16T11:27:00.009+08:00

Since the Memorandum Circulars of the Bureau of Local Government Finance (BLGF) on the new reclassification of local government units were circulated, I received a number of queries on how such reclassification would affect the present status of concerned LGUs.

As a backgrounder, the BLGF has issued a series of MCs reclassifying LGUs on the basis of their average income from 2004 to 2007. Said reclassification is done every four (4) years pursuant to Executive Order No. 249 authorizing the Department of Finance (DOF) to review the income ranges of LGUs that serve as basis for their income classification. Said task has been delegated to the BLGF, an operating bureau under the DOF tasked to supervise LGUs, particularly their treasury and real property tax assessment. To carry out the reclassification, the BLGF prescribes an income bracket by class (1st class to 6th class), for each level of LGUs (provinces, cities and municipalities). For example, a province with an average annual income for the last four years of P450 M or more is classified as 1st class.

How LGUs in Region VI fared. All the six (6) provinces in the region retained their present classification that is, Capiz, Iloilo and Negros as 1st class; Aklan and Antique as 2nd class; and Guimaras, 4th class. Seven (7) of the 16 cities were affected. Himamaylan moved up to 3rd class along with Escalante at 4th class; cities (5) were downgraded - San Carlos as 2nd class; Sagay, 3rd class; and Passi, Talisay and Victorias down to 4th class. the remaining nine (9) cities retained their respective income class: Bacolod, Iloilo and Kabankalan at 1st class; Bago and Cadiz, 2nd class; Roxas and Silay, 3rd class; and La Carlota as well as Sipalay as 4th class. The region now boasts of 19 1st class municipalities; 17 as 2nd class; 26 as 3rd class; 37 as 4th class; and eight (8) others as 5th class. There are no 6th class municipalities in Region VI anymore.

Effects of reclassification. One Municipal Mayor called us up relaying his apprehension that since his municipality was downgraded from 3rd to 4th class, the IRA share will correspondingly be reduced. Not true. The reclassification of the LGU whether to a higher or lower class does not affect the IRA computation. There is no direct correlation between the two. The IRA computation is based on a different set of formula as provided for in the 1991 Local Government Code (RA 7160): 50% based on population; 25% based on land area and 25% equal sharing. A higher IRA though may result in a higher reclassification of the particular LGU in the future.

Still another Mayor informed us that he refuses to accept the new classification of his municipality from 4th class to 3rd class arguing that it does not in any way translate into a better financial position (meaning increase in IRA or monetary reward). The municipality he reasoned out, stands to lose as it has to set aside additional funds to implement a higher salary schedule for the employees in accordance with the salary standardization law; and a higher representation and transportation allowances (RATA) for the officials, from the mayor himself down to assistant department heads.

So what's the beef? The mayor's allegation though short sighted is true. But a point is missed here. While there may be no immediate financial rewards for LGUs that were reclassified to a higher bracket, this periodic round of classification serves as a psychic reward or recognition for the LGU's efforts and capability to improve their financial condition. In the long run, it can trigger more economic activities in the locality ( business expansion, new investment, etc.) because of business confidence conferred upon the LGU that eventually may result in bigger tax collection (business permits, real property taxes, etc.).

Errata on the 2007 Census of Population

2009-02-02T14:01:00.002+08:00

The National Statistics Office (NSO) has submitted to the Office of the President last December, 2008, the corrected 2007 Population count. If approved by the President, the revised population count of the Philippines will be brought to 88,572,996 from the originally proclaimed figure of 88,574,614 - or a reduction of 1,618.

The correction was due to the errata in the population count of the province of Pampanga; two (2) municipalities in Maguindanao; one (1) barangay in Kalookan City; and nine (9) barangays in the provinces of Nueva Ecija, Bulacan, Albay, Cebu, Leyte, Davao del sur, Sultan Kudarat and Compostela Valley.

Since the corrected population figure involves only an adjustment of 1,618, this will minimally affect the computation of the Internal Revenue Allotment (IRA) of LGUs across the country.

HAPPY NEW YEAR!

2009-01-08T09:32:00.003+08:00

If we go by the Chinese astrology, year 2009 happens to be the "Year of the Ox". Everyone has his own expectation for the new year. Lots of predictions and analysis have made about what's going to happen in this "Year of the Ox", more so that we are in the midst of a global financial crisis.

Here's an interesting analysis about this year that may realistically apply to us bureaucrats: This year will no doubt bear fruit, but the motto is: "No work, no pay!" Time waits for no man; if we are too lazy to sow then we can blame no one if we have nothing to reap. We will find a great many things requiring our attention, and the list of what needs to be done will seem endless. The Spartan influence of the Ox will be a constantly cracking whip over our heads. Better to apply oneself diligently than waste time arguing with the authorities. They will prevail, as the year of the Ox favors discipline.

Most conflicts this year will arise more from a lack of communication and refusal to give in on small technicalities than anything else. But hang on and be patient. Everything will be sorted out and we will be rewarded for our efforts--so long as we remember to do things the conventional way. This is no time for tricky shortcuts.

Details about this analysis can be viewed from this site.

HAPPY NEW YEAR to all Fiscal Ad spacers!

fiscaladspace

2008-12-17T14:11:00.001+08:00

True Meaning of Christmas

From: anion,
8 hours ago

True Meaning of Christmas

View SlideShare presentation or Upload your own. (tags: peace joy)

May you find this Christmas inner peace...Wishing You a Blessed Christmas...

SlideShare Link

A Christmas Message

2008-12-17T13:56:00.003+08:00

We are in the midst of a global financial crisis and every nation, the Philippines included, is pre-occupied in putting fiscal stimulus packages to mitigate the impact of the crisis. But this should not dampen our enthusiasm to celebrate Christmas. Maybe not as merry as before but certainly a Blessed one. To all Fiscal Ad Spacers, A Blessed Christmas and a Hopefully Prosperous New Year!

Guidelines on Extra Cash Gift for LGUs

2008-12-15T08:25:00.006+08:00

For LGUs which have not yet secured a copy of Local Budget Memorandum No. 58 on the grant of extra cash gift/additional benefits, here's a scanned copy of the issuance. To download, right click the image and save in your desktop. A clear copy can be downloaded from this site

Merry Christmas!

ALBO 6 hold 2008 Year-end Seminar in Capiz

2008-11-27T13:24:00.005+08:00

The Association of Local Budget Officers in Region VI (ALBO VI) will hold its traditional year-end conference-seminar on December 3-5, 2008 in San Antonio Resort, Baybay, Roxas City, Capiz. Hosting this year's culminating activity which coincides with the province "Halaran Festival", is the Capiz Municipal Budget Officers' Association (CAMBO).

DBM's Asst. Secretary Eduardo P. Opida will deliver the keynote address during the Opening Program in the afternoon of December 3. Asec. Opida will also provide the participants comprising of local budget officers and their staff from the different LGUs of Region VI - an update on the 2009 Internal Revenue Allotment (IRA), the proposed Modified Compensation and Position Classification or SSL 3, and other budget policies and issuances. Other topics to be discussed are: "Public Accountability", "Anti-Red Tape Law", and "GPRA Updates". Details of the Program can be viewed from this site.

LGUs' IRA for April and onwards at the same level as in the 1st quarter.

2008-04-17T14:49:00.004+08:00

The DBM has issued Local Budget Memorandum No. 56 informing LGUs that pending presidential proclamation of the 2007 population census, and the submission by the DENR of the updated consolidated master list of land area, the Internal Revenue Allotment (IRA) of LGUs will be computed based on the existing official data namely, the 2000 population census and the 2001 land area.

Thus, LGUs will expect no adjustment in the IRA shares to be released for the month of April and thereafter.

As of this writing however, the President has issued Proclamation No. 1489, proclaiming as official the results of the 2007 Census of Population which placed the total population of the Philippines as of August 1, 2007 at 88,574,614.

With this development, the DBM may have to recompute the IRA figure based on the latest official population count of each and every province, city, municipality and barangay.

Additional benefits/Extra Cash Gift for LGUs

2007-12-19T14:06:00.000+08:00

The long wait is over. The DBM has just issued Local Budget Memorandum No. 54 authorizing the grant of additional benefits cum extra cash gift to LGU personnel. The LBM does not specify minimum or maximum amount but that it is charged to savings and subject to PS cap.

Sorry, folks our site is down so I have to post the LBM here. Just right click the image below and save in your PC or download a copy from the DBM CO site. Merry Christmas!

Guidelines on Performance bonus

2007-12-17T14:21:00.000+08:00

For the benefit of the NGAs, a copy of Budget Circular No. 2007-4, the Guidelines on the Grant of P10,000 Performance Bonus (PerB) can be downloaded here.

Sex and politics do not make Filipinos happy!

2007-10-10T13:52:00.000+08:00

The National Statistical Coordination Board (NSCB) has recently unveiled the results of the Philippines Happiness Index (HPI). The NSCB study is a local version of the Happy Planet Index launched in 2006 by the New Economics Foundation based in Great Britain where the Philippines ranked 17th among 178 countries surveyed.

The local HPI as published in the NSCB website qualifies that "In the formulation of the Philippine Happiness Index (PHI), we were guided by the following premises: economic progress and happiness are not synonymous, Philippine progress should capture the happiness of the (individual) Filipinos, the PHI should not be normative and the PHI should recognize individual differences in terms of the sources or domains of happiness and the importance attached to each domain.

Here goes the statistics. The study ranks Family with an index of 88.46; followed by friends (83.57); religious/spiritual work (79.81); love life (79.37); and health (78.02) - as the top five sources or domain of happiness of Filipinos. Surprisingly sex life only ranks 7th with an index of 72.57, while politics is at the bottom with 25.49. Is this proof that people are fed up with politicians?

Other findings. The study also showed that (a) pinoys are happier with domains within their control; (b) six (6) out of ten (10) believe that progress is synonymous with happiness; (c) women are happier than men; and (d) happiness rises with income.

Announcing the good news: 2nd Quarter GDP at 7.5%

2007-08-31T14:25:00.000+08:00

It's in every major daily's (Aug. 31st) frontpage. Philippine Daily Inquirer: "Surprise! 7.5% growth". Manila Bulletin: "GDP grows 7.5% in 2nd quarter, highest in 20 years". Business Mirror: "GDP surges to 7.5% in 2nd qtr". Business World has a more modest yet prospective headline: "RP on track to meeting growth goal".

The National Statistical Coordination Board (NSCB) attributed the unprecedented growth to "continued favorable economic conditions such as stable interest rates and strong peso, resilient agriculture sector, vibrant industry and services sectors, plus election-related spending and intensified infrastructure investments". The just-released figure is a full 2% over the 2006 2nd quarter GDP (5.5%).

What the skeptics say. Private think tank IBON Foundation particularly singled out the "sustainable election-related expenses by both candidates and the government as the major contributor to the surge of the 2nd quarter GDP. IBON estimates that some P30 B to P50 B were spent by candidates during the May elections while P 51.4 B was spent by the government during the first semester allegedly in support of administration candidates.

I agree with IBON that the P30 B-P50 B the candidates spent during the election period have contributed to the increase in GDP, but the sweeping generalization that the P51.4 B first semester government spending was election-related to favor administration-backed candidates is not at all true.

For one, the government was operating on a 2005 re-enacted budget for the whole year of 2006. While spending for the 1st quarter of 2007 was based on the same re-enacted budget, this was augmented by the P46.9 B supplemented budget (RA 9358), which was mostly unloaded during the said quarter. The 2007 GAA took effect April 2007 and fund releases were correspondingly adjusted during the second quarter based on the new expenditure program, hence a higher government spending.

13 municipalities set to join ranks of cities.

2007-08-10T15:04:00.000+08:00

Official information from the National Statistical Cooordination Board (NSCB) revealed that 13 of the more than 20 municipalities which have applied for cityhood and approved by the 13th Congress have completed the ratification process in a plebiscite as of June 30, 2007.

The ascension of these 13 municipalities to cityhood will increase the number of cities to 131 from 118, and consequently, bring down the number of municipalities from 1,510 to 1,497. The 13 new cities include: two (2) from NCR - San Juan and Navotas; NCR; two (2) from Northern Luzon - Tabuk, Kalinga and Batac, Ilocos Norte; four (4) from the Visayas - Bogo, Cebu; Baybay, Leyte; Catbalogan, Western Samar; and Borongan, Eastern Samar; and five (5) from Mindanao - El Salvador, Misamis Oriental; Mati, Davao Oriental; Lamitan Basilan; Bayugan, Agusan del Sur; Tandag, Surigao del Sur.

The old cities have reason to be wary and apprehensive about the addition of the lucky 13 to their ranks as the latter will partake of the 23% IRA alloted to cities pursuant to Section 284 of the 1991 Local Government Code - making their projected IRA adjustment smaller. On the other hand, the remaining 1,497 municipalities stand to benefit from this conversion in terms of increased IRA share since the newly converted cities will leave behind their respective IRA shares to the ranks of the municipailties.

On the macro perspective, conversion of municipalities to cities can be viewed as mechanism of redistributing or reallocating and democratizing government resources so that more funds are chanelled for service delivery and infrastructure facilities to the countrysides. On the average, the IRA shares of these new cities comes fiscal year 2008, would amount to more than a hundred million pesos each.

LGUs can't auction government properties to collect tax delinquency.

2007-08-09T10:48:00.000+08:00

Here's a recent landmark decision by the Supreme Court affecting local government units' power of taxation.

Facts of the case. The Iloilo City government through the City Treasurer, attempted to sell at public auction the properties of the Iloilo Fishing Port Complex (IFPC) in order to collect the latter's unpaid real property tax amounting to Php 5.07 million. The Philippine Fisheries Development Authority (PFDA) under which the IFPC belongs, questioned the move and filed a case before the lower court - until it finally reached the Supreme Court.

The ruling. The Supreme Court ruled in favor of the PFDA stating that "the Authority should be classified as an instrumentality of the National Government which is liable to pay taxes only with respect to the portions of the property, the beneficial use of which were vested in private entities". In other words, the high court affirmed that subject property is taxable and the IFPC is liable to pay the tax. BUT . . . "Notwithstanding said tax delinquency on the leased portions of the IFPC, the latter or any part thereof, being a property of public domain cannot be sold at public auction". This means that the city government has to resort to other means to collect the tax obligation other than the sale at public auction.

Population Census important in allocation of govenment resources.

2007-08-03T15:39:00.000+08:00

On August 1st, the National Statistics Office (NSO) commenced the Census of Population.

About 37,000 trained census-takers are being employed to conduct the house-to-house survey nationwide to make a complete count of the population. This will last for about 25 days and will cover 41,944 barangays thorughout the country.

The nationwide survey is the 12th to be undertaken since 1903, and will cover will cover all people living in the Philippines, including overseas Filipino workers and foreigners who intend to stay within one year.

Among the important uses of such census for the government is the accurate and timely formulation of policies, preparation of plans and programs concerning population such as the number of schools to be built, the number of teachers, number of policemen to be deployed, and number of public health workers needed in a province, city or municipality and even barangay.

For LGUs, the outcome of the census is vital as this will be the basis for (a) the allocation of the Internal Revenue Allotment (IRA) for fiscal year 2008; (b) creation of new LGUs; and (c) conversion of some LGUs to a higher level (i.e. from municicpality to city) - pursuant to the 1991 Local Government Code.

So we advise all LGUs to assist the NSO census takers in this undertaking.

Updates on the Rationalization program per EO 366.

2007-07-23T13:05:00.000+08:00

Here's a status of compliance to Executive Order No. 366, or the government's rationalization program as culled from the June 2007 report of the OPIB (Organization and Productivity Improvement Bureau).

A total of 81 government entities comprising of 19 department/department level offices, 29 OEOs/other agencies, and 33 GOCCs have submitted their respective Rationalization Plans (RPs) to the DBM. This account for 72% of those covered by the rationalization program.

Of the 81 submitted RPs, 18 have already been approved. This include the Offices of the President and Vice President, CSC, CESB, NECDCC/CWC, HUDCC, NCRFW, NCMB, NHI, NM, PHILRACOM, PCSD, LWUA, NHMFC, NTA, PDA, PIDS, and TLRC. The implementation of these approved RPs entails the abolition of 2,584 positions translating into a P352.4 Million savings in personal services.

The Philippines' Open Budget Index rating

2007-07-20T14:36:00.000+08:00

On October 18, 2006 civil society organizations from 59 countries around the world introduced the Open Budget Index OBI). The OBI, a project of the Internation Budget Project (IBP) is the first survey instrument used to rate countries on how open their budget books are to their citizens. It is intended to provide citizens, legislators, and civil society advocates with the comprehensive and practical information needed to gauge a government’s commitment to budget transparency and accountability.

The Open Budget Index 2006 was calculated by the IBP based on detailed questionnaires completed by local experts in 59 participating countries from every continent. The Index assesses the availability of key budget documents, the quantity of information they provide, and the timeliness of their dissemination to citizens in order to provide reliable information on each country’s commitment to open budgeting.

The results of that survey showed that only six (6) of the 159 countries — France, New Zealand, Slovenia, South Africa, the United Kingdom, and the United States — provide the extensive budget information necessary for government accountability.

The Philippines, with a rating of 51%, belong to the group of 32 countries which failed to make public all of the seven key budget reports they produce. These governments produce this information for their own internal use or for international donors, but do not make it available to their citizens.

More of this on my next post.

Silay Airport_runway

2007-07-20T14:24:00.001+08:00

Runway of the New Bacolod-Silay Airport

Inaugurating the other airport of international standards

2007-07-20T13:12:00.000+08:00

The New Bacolod-Silay Airport, the second airport of international standards built in Region VI is almost complete and ready for operation. But political leaders in Negros Occidental are at odds on the date of the airports formal inauguration and opening.

In last Friday's (July 13th) Central Philippines Projects Meeting in the new airport, the President repeatedly asked the elected officials who were around about their preferred date but no consensus was ever reached. The new Mayor of Silay City, Mayor Montelibano, would like to open the airport on that same day. Cong. Puentebella of Bacolod City proposed that the airport should not be opened until after the proposed additional 500 meters runway extension is implemented. Other local officials wanted the facility opened as soon as the access road and by-pass road leading to the airport are completed. The President jokingly quipped that the opening may as well be in 2010, the scheduled completion of the rest of the project components.

I remembered a few years back when the construction of the airport was being planned out, Negros officials were at odds where to construct the facility. Now that it is completed and operational, they are again at odds when to open it.

Meanwhile that the formal opening of the new airport is not yet decided upon, government is spending a lot of money for electricity and daily upkeep of the facility. And soon the government will start paying off part of the Php 756.671 Million borrowed from JBIC to construct the airport.

How do you solve a problem like the Iloilo Airport?

2007-06-28T15:07:00.000+08:00

As a member of the Regional Project Monitoring Committee (RPMC), I take pride in having participated in several problem solving sessions during the construction of the New Iloilo Airport (NIA). The litany of problems are quite enormous - from the relocation of affected families, quarry sources, and right of way, which unduly setback the construction timetable to revision of scope of work and unprecedented price escalation.

Touted as the most modern and sophisticated airport in the country outside of Metro Manila, the NIA is only 15 days in operation as of this post but the problem of maintaining the new edifice, other facilities and grounds of this 188 hectare complex seems insurmountable.

ATO estimates that the monthly cost of the airport's upkeep would run to Php 10 M. The electricity alone with the sophisticated equipment in operation would cost between Php 2.3 M to Php 2.7 M per month. ATO Iloilo's budget for 2007 does not yet include the additional requirement for the new airport. It's MOOE is at the level of the maintenance cost of the old airport in Mandurriao. To add to its woes, no new personnel has been added to its work force as the staffing pattern will depend on the approval of the agency's rationalization plan pursuant to EO 366.

Big boost . . , Part 2

2007-06-22T09:18:00.000+08:00

This is a continuation of my post yesterday (June 21st) on the implementation of the 10% salary adjustment effective July 1st. Here we will clarify and amplify some of the salient provisions of NBC 511 and LBC 86.

Basis of computation - the 10% adjustment shall be based on the basic monthly salary of incumbents as of June 30, 2007, inclusive of transition allowance. No adjustment shall be made on PERA, AdCom and RATA. But the year-end bonus, RLIP, PAG-IBIG, PHILHEALTH, and ECIP shall be correspondingly adjusted. Those receiving transition allowance, meaning that their basic salaries have exceeded the salary pertaining to the 8th step of the salary grade allocation of their position, are no longer entitled to the 10% adjustment but they will be allowed to receive such excess.

Funding source - the amount needed to implement the 10% adjustment of NG civilian personnel including the increase in subsistence and hazard pay of uniformed personnel shall be charged against the appropriate funds (Miscellaneous Personnel Benefits Fund/Compensation Adjustment Fund). The requirement for adjustment of non-permanent employees shall be taken from the lump-sum appropriation for salaries/wages of concerned NGAs. GOOCs, GFIs and LGUs shall defray the cost of implementing the salary adjustment out of their respective funds. If funds are insufficient, these entities may partially implement the said adjustment provided these shall be uniform and proportionate for all their personnel.

Specific for LGUs:

Adoption of Salary Schedule - in implementing EO 611, LGUs shall adopt the Salary Schedule (SS) prescribed under LBC 86 (Annexes "A1" to "A8") corresponding to their economic classification. Pursuant to RA 6758 (the original SSL), the salary levels of LGU personnel are pegged to a certain percentage of the national salary schedule depending on the income class of the LGU as categorized by the DOF/BLGF. Thus, the salary schedule of a first class province or city is equivalent to that of NGAs, while a second class one is 90% of the national SS. The SS of a 6th class municipality is only 65% of the national SS.
However, an earlier DBM issuance has given LGUs the flexibility to adopt the SS of their mother LGU, which means that a 5th class municipality can adopt the SS of its mother province provided it has the funds and has not exceeded the personal services limitation (45%-55%) prescribed under Section 325 of the 1991 Local Government Code.

Adopting a higher Salary Schedule - LGUs which have implemented the salary schedule of a higher income class LGU (i.e. the SS of a mother province), can adopt the revised SS pertaining to that of the higher income LGU. If funds are nor enough, the said LGU may opt to revert to the SS of its own income class.

PS cap waiver - the PS cost to implement the adjustment if the LGU is implementing the SS corresponding to its income class is exempt (or waived?) from the personal services limitation. However, the PS differential as a result of the adoption of the higher SS is subject to the said limitation.

Applicability to Barangays - the honoraria of barangay officials and employees maybe adjusted accordingly by adopting the new SS being implemented by the mother city or municipality. Under LBC 63 circa 1996, the maximum honoraria of Punong Barangays were pegged at the 1st step of Salary Grade 14 in the SS of the mother city or municipality, while that of the Sangguniang Barangay members, Treasurer and Secretary at the 1st step of Salary Grade 10. The said adjustment is exempt from the PS cap (55% limitation) prescribed under Section 331(b) of the 1991 Local Government Code. This exemption is still subject to clarification as this seems to contradict with Section 85, General Provisions of the 2007 General Appropriations Act, which provides that only the minimum honoraria (Php 1,000 for the Punong Barangay and Php 600 for the other officials) are waived from the PS cap.

A big boost to the morale of government personnel!

2007-06-21T14:37:00.000+08:00

Looks like the long awaited salary adjustment will become a reality comes July 1st. The DBM has issued last June 18th, two (2) circulars to implement Executive Order No. 611, authorizing the grant of ten percent (10%) salary adjustment to government personnel as well as the adjustment in subsistence allowance and hazard pay of uniformed personnel.

Here's the gist of the two implementing circulars:

National Budget Circular No. 511 - applicable to National Government Personnel and covers the following compensation adjustment:

- 10% Salary Adjustment for Civilian Government Personnel whether permanent, contractual, casual, appointive or elective, on full-time or part-time basis. The adjustment shall be computed at 10% (rounded off) based on the incumbent personnel's basic pay as of June 30, 2007. To facilitate computation, the DBM has prescribed a new salary schedule. Those covered are personnel of National Government Agencies (NGAs), Government-owned and Controlled Corporations (GOCCs), and Government Financial Institutions (GFIs). For NGAs, the funding requirement shall be sourced from the 2007 General Appropriations Act, and the initial release shall cover the period July to September. For GOOCs and GFIs, the amount needed shall come from their own respective corporate funds.

- Subsistence Allowance and Hazard pay of military and uniformed personnel of the AFP, PNP, BFP, BJMP, Coast Guard, and NAMRIA. For subsistence allowance, the adjustment shall be from Php 60 to Php 90 per day while hazard pay will be increased from Php 120 to Php 240 per month.

Local Budget Circular No. 86 - Applicable to personnel of local government units including local elective officials. The DBM has prescribed separate salary schedules for each economic class of LGUs and the adjustment of each incumbent personnel shall correspond to the designated salary step in the salary grade allocation of their position as of June 20, 2007.

The last time that government personnel had their salary increase was five years ago in July 2001, and the this adjustment comes next month will certainly be a big boost to their already sagging morale.

1st Quarter GDP strongest ever in 17 years!

2007-06-01T14:52:00.000+08:00

The President while on state visit in Australia Thursday revealed that our Gross Domestic Product (GDP) grew by an unprecedented 6.9% for the first quarter of 2007.

This level of growth was the strongest in over 17 years. The biggest quarterly economic growth we had experienced before was in 1989 when GDP was recorded at 7.4%. This reported economic figure puts the Philippines as the third best performer in Asia behind China (11.1%)and Vietnam (7.7%). What attribute to this remarkable growth performance? Economic officials cited the following: sustained gains in the country's fiscal position where we incurred a lower-than-targeted deficit in 2006 (from Php125 B to Php 64 B) - leading to a resurgence of investors confidence; more foreign direct investments (FDIs) pushing the stock market to a 80-year high; low inflation; strong peso as a result of FDIs, increased OFW remittances, and business process outsourcing (BPO) revenues; brisk exports despite the strong peso. Of course, not to be overlooked is increased consumer spending due to OFW remittances and election spending.

Barring all other unforeseen negative factors it seems that the 6.1%-6.7% full year GDP target for 2007 is unreachable.

Corruption in public procurement . .

2007-05-09T15:35:00.000+08:00

While surfing the internet on my leisure time, I came across this Handbook on Curbing Corruption in Public Procurement, a publication of Transparency International.

Fiscal administration practitioners and government procurement officials may find this publication interesting. Here's an excerpt:

"An avoidable misuse and abuse of public funds results from corruption. Corruption in public contracting leads to a distortion of fair competition, the waste of scare resources and the neglect of basic needs, perpetuating poverty. Massive market inefficiencies can also arise from corruption and, in the extreme, lead to the destruction of development opportunities. If corruption in public contracting is not contained, it will grow. It is estimated that systemic corruption can add 20-25% to the costs of government procurement, and frequently results in inferior quality goods and services and unnecessary purchases."

Zeroing on the Philippines, Jose Luis Syquia, formerly Executive Director of the GPPB Support Office, cited an SWS survey in 2003 that 30%-50% of government funds are wasted due to corrupt practices in procurement of books, vehicles and equipment, and infrastructure projects. By his conservative estimate, this translates to roughly Php 21 B potential leakage in government funds.

Leave Benefits of Barangay Officials a waived item!

2007-05-04T09:39:00.000+08:00

The long wait is over for barangay officials. The DBM has issued Local Budget Circular No. 85, prescribing the supplemental rules and regulations on the leave benefits of barangay officials.

Said circular was issued to ease the restrictions provided in the original guidelines - Joint Circular No. 2004-1 issued by the DBM and CSC in March 2004. The joint circular which implements Section 81 of the 1991 Local Government Code on the leave privileges of barangay officials, specifically provides that the leave credits earned by barangay officials shall be cumulated up to one year only and shall be commuted yearly (Section 3.2); that payment of said leave benefits shall be subject to the 55% limitations on personal services; and that the leave credits earned for the particular year shall be paid in full within the first quarter of the immediately succeeding fiscal year (Section 6).

With the said restrictions, many barangay officials have not availed of their monetized leave credits mainly because their barangays have either exceeded the 55% PS cap and or cannot meet the prescribed payment deadline (March 31st of the following year) for lack of funds.

LBC 85 seeks to resolve this predicament by requiring instead that leave credits "earned in a particular year may be monetized within the immediately succeeding fiscal year" (Section 2.0); and that said benefits is waived from the PS limitation pursuant to Item viii of Section 85, General Provisions of RA No. 9401.

While some of the contentious issues surrounding the implementation of the leave privileges of barangay officials still remain unresolved, LBC 85 will enable barangay officials to eventually received their leave benefits.

Clarification on fund releases during election ban.

2007-04-17T10:28:00.000+08:00

Here's a clarification from the DBM's Legal and Legislative Service (LLS) on fund releases for the duration of the election ban.

As a general rule, releases, disbursement or expenditures of public funds for public works, social works and housing-related projects are prohibited beginning March 30, 2007 until May 14, 2007, except when these are specifically exempted by the COMELEC.

For the DBM in particular, the COMELEC has imposed on injunction per its Resolution No. 7785, enjoining the former not to release nor authorize the release of any appropriation that may directly or indirectly be used in violation of the prohibitions contained in the Omnibus Election Code. An exception to this is when the SARO or NCA is issued for generic purposes like the IRA or congressional allocations in which the DBM has no way of determining if the activities to be carried out by the agency or LGU fall under any of the prohibitions.

On matters of procurement, the GPPB has issued Resolution No. 01-2007 prescribing the guidelines on the procurement activities that can be carried out during the election ban. Details of this guidelines can be viewed here.

Saving mother earth from global warming.

2007-04-11T08:43:00.000+08:00

Let me deviate from my usual subject matter this time to make this post about global warming. It certainly is a hot topic nowadays and shows no sign of cooling down. Almost every major international magazines and dailies have run stories and reports about the perils of global warming and what we, the planet's inhabitants can do to abate its carastrophic eventualities.

Time Magazine's March 29th cover story features the "Global Warming Survival Guide", and lists down 51 Things We can Do to Save the Environment.

Here's an alarming report from National Geographic: "There is little doubt that the planet is warming. Over the last century the average temperature has climbed about 1 degree Fahrenheit (0.6 of a degree Celsius) around the world. Rising temperatures have a dramatic impact on Arctic ice, which serves as a kind of "air conditioner" at the top of the world. Since 1978 Arctic sea ice area has shrunk by some 9 percent per decade, and thinned as well".

Not to be outdone, today's issue (April 11th) of the Philippine Daily Inquirer features Greenpeace's "laundry list of easy-to-do practices to help in the global effort to stop global warming" - ranging from buying local products so that we can reduce imports, and in the process, lessen the use of fuels, to resorting to walking, running or biking instead of using motor vehicles.

According to Greenpeace, in the latest assessment report of the Inter-Governmental Panel on Climate Change, many of the worst effects of global warming were "not locked into the future'' and that humans could adapt to future global warming threats by reducing greenhouse gas emissions.

So it's never too late. If we heed the advice of scientists and environmentalists now, we can still save mother earth.

Reflection for the Lenten season.

2007-04-04T15:05:00.000+08:00

Prayer, fasting and almsgiving (the works of mercy) remain the classic Lenten practices. But are we really serious about carrying out these practices? According to Jesus, the Pharisee who prayed at the front of the Temple wasn’t really praying (see Luke 18:9-14). His “prayer” was more about praising himself than about being open to God’s grace.

The more we live in the truth about God, ourselves and others, the more genuine will our prayer, fasting and works of mercy be, the more they will represent who we truly are before God. That is the path to true freedom. Sin is always a counterfeit freedom.

We don’t have to wait until we see God face-to-face to arrive at that truth and to know deep down that God loves us profoundly and invites us to share in divine life forever.

Fiscaladspace joins everyone in the observance of the lenten season. Happy Easter!

EO 611: an exercise of Presidential prerogative!

2007-03-26T11:06:00.000+08:00

This is an addendum to my post of March 19th on the impending 10% pay hike of government workers. I stated (quoting a Senate press release) that by March 23rd whether or not the President signs the bill authorizing the salary increase - it will just the same, become a law. Indeed, on March 23rd, all the major dailies carried a news item that the 10% salary increase was approved by the President.

Just to straighten things out. The President did not sign the bill into a law. Instead, she issued Executive Order No. 611 on March 14th, ten days earlier than the statutory deadline of March 23rd. In todays news from the Senate, re-electionist Senator Ralph Recto, the principal author of the bill noted that the EO is a "carbon copy" of the Congress-approved bill that was sent to Malacanang on February 22nd. In effect, with EO 611, the bill granting the same benefits to government workers was effectively vetoed.

Is the President justified in jumping the gun on the Senate and the House? A closer look at the bill shows that it contains a provision repealing PD 1597 of the Marcos era, giving Presidents the authority to grant allowances. If she had approved the Congress version of the pay hike, that flexibility to give government employees additional benefits in the future would have been lost.

Anyway, as Senator Recto puts its: "The President can take the credit for as long as the government workers can have the cash".

10% salary increase to become law by March 23rd?

2007-03-19T14:53:00.000+08:00

I've been trying to track down the proposed bill granting government workers a 10% salary increase since Congress adjourned for the May elections, and a March 15th press release from the Senate is the closest and the latest I got so far.

Here it is: the bill was transmitted to Malacanang on February 22nd. Under the Constitution, the President is given 30 days to act on the bill otherwise, it will lapse into law. Of course, the President would not allow the bill to become a law without her signature. In December last year, she made a pronouncement that the pay hike of government workers be given priority. As a matter of fact, a news item in the government portal lists the pay hike bill is one of those lined for signature of the President either on March 23rd or 24th.

It's almost certain that state workers including those in LGUs and GOCCs are assured of a windfall comes July 2007, the effectivity of the increase. We have yet to see though how the increase will eventually be implemented - whether it's exactly a 10% or a P1,000 a month increase. If we go by the appropriations cover of P10.3 billion, it's almost the same amount required to implement the P1,000 AdCom increase last year. Let's cross our finger.

11th PHILLBO National Convention slated April 11-13

2007-03-14T09:05:00.000+08:00

The Philippine League of Local Budget Officers (PHILLBO) will hold its annual convention on April 11-13 at Island Cove Resort & Leisure Park in Kawit, Cavite.

Dubbed as the mother of all conventions-seminars for all local budget officers and their staff, this year's annual gathering carries the theme: "Local Budgeting in the Attainment of Millennium Development Goals". The following topics are lined up for this 3-day convention: "Millennium Development Goals", "Wage Bill", "Updates on IRA and Hazard Pay of Health Workers", Executive, Legislative Agenda as an Approach to Planning", and "Updates on Procurement Law".

Aside from Local Budget Officers and their staff, Accountants, Treasurers, Planning and Development Coordinators, and Sanggunian members are also invited.

In behalf of PHILLBO under the leadership of Roderick M. Millano, MBO of Pilar, Sorsogon, I encourage LGU personnel whose functions are related to fiscal administration to be part of this annual convention.

The BSP's Domestic Roadshow

2007-03-06T15:33:00.000+08:00

Last Monday, March 5th, I had the opportunity to attend the Philippine Economic Briefing or the so-called Domestic Roadshow sponsored by the Bangko Sentral ng Pilipinas (BSP).

In addition to being a participant, I also served as panelist along with the RDs/ARDs of other regional offices but we have not responded to any issues and concerns raised by the participants from the private sector, mostly from the banking industry as the resource speakers/presentors took up the cudgels.

Among the speakers was our own Secretary, Rolando "Nonoy" Andaya. The others are his co-members/representative of the Economic Team: Secretary Teves of the DOF, Secretary Favila of DTI, Usec Ocampo of DOE, Director Amador of BSP, and Director Valero of NEDA Region VI.

The speakers took turns in presenting the state of the Philippine economy for the year ended 2006, the fiscal and monetary policies being pushed to sustain the economic momentum, and where we are headed in the medium term. More on this in the next post.

Fiscal deficit is down for fourth straight year!

2007-02-26T15:30:00.000+08:00

Our economic managers have reason to rejoice with the national government’s fiscal deficit falling to P62.2 billion in 2006, way below the P125 billion original target and the P80 billion revised official estimate. As a ratio to GDP, the fiscal shortfall dipped to 1.0% from 2.7% in 2005. Many factors were attributed to the realization of this positive performance, among them, the fact that we operated on a re-enacted budget in 2006 which substantially curb government spending due to a lower expenditure program. This is the fourth straight year that the national government has managed to reduce the deficit.

To complete the fiscal performance: national government revenues reached P978.7 billion in 2006, up 19.9% from P816.2 billion in 2005 and 4.6% higher than the P974.1 billion target. Revenues raised by the Bureau of Customs, Bureau of the Treasury, and other offices rose above targets to P198.2 billion, P73.9 billion, and 54.8 billion, respectively, from P154.6 billion, P70.6 billion, and P48.3 billion, also respectively. However, the Bureau of Internal Revenue, which collects two-thirds of all revenues, raised only P651.9 billion, 23.4% short of its P675.4 billion target, but higher over a year ago by P109.2 billion. The BOC easily met its target because of increased fuel imports. On the other hand, the BIR fell short of its goal due to lower tax collection on interest income arising from lower interest rates and the lower volume of government securities offered.

On the other hand, public spending rose to P1.04 trillion, below the P1.1 trillion ceiling, but above last year’s P962.9 billion. Local government units received P174.7 billion from the national government, when its programmed ceiling was only P134.1 billion. Interest payments on government debt amounted to P310.1 billion only, below the P340.0 billion program, due to lower domestic interest rates and a strong peso-dollar rate.

With this favorable fiscal situation, there is enough optimism that that the target deficit can be held down to P63.0 billion in 2007, and en route to a balanced budget by 2008.

Happy Valentine's Day from Fiscaladspace!

2007-02-14T09:43:00.000+08:00

This is irrelevant to the subject matter that's been filling this Blog. But since everyone's heart and mind are filled with celebrating this special occasion, I might as well join the fray.

Most of us simply see Valentine's Day as a chance to show our loved one's how much we care with a bunch of flowers, an expensive gift, a heart shaped chocolate or a special message of love. I started mine this morning with a card and a couple of hand picked chocolate for my wife. But the day itself has a lot more sinister origin.

Valentine's Day originated from St. Valentine, a Roman who was martyred for refusing to give up Christianity. He died February 14, 269 A.D., the same day that being devoted to "love lotteries". Legend also says that St. Valentine left a farewell note for the jailer's daughter, who had become his friend, and signed it "From your Valentine".

Just to add more spice, birthdayalaram.com has posted this Valentine's trivia:

- Teachers will receive the most Valentine's Day cards, followed by children, mothers, wives, and then, sweethearts.
- More than 50% of cards are sold the week of the holiday, with the largest and most elaborate Valentine cards sold 48 hours before February 14.
- 70% of those celebrating the holiday give a card, followed by a telephone call (49%), gift (48%), special dinner (37%), candy (33%) restaurant meal (30%), and flowers (19%).

Interesting huh, here's some Valentine's superstitions: To be awoken by a kiss on Valentine's Day is considered lucky. Seeing different animals on Valentine's Day can result in different ways; seeing a goldfinch, you will marry a millionaire; seeing a robin you will marry a crime fighter; seeing a dove, you will have a happy peaceful marriage. (Maybe it's a good day to go to the zoo!)

HAPPY VALENTINE'S!

The waiting is over: DBM to pay deficiency in GSIS premiums.

2007-02-14T08:16:00.000+08:00

The bureaucratic volleyball between the DBM and GSIS on how to resolve the issue of unremitted government share in premium of national government employees from July 1997 to December 1998 may be over.

To recall, the national government owed the GSIS a sizeable amount corresponding to the deficiency in the government share on the premiums contributions of national government employees from July 1997 to December 1998. Such deficiency was due to the increase in contributions from 9.5% to 12% as mandated in the GSIS Act. After a series of reconciliation, the deficiency was finally established and negotiations between the two agencies went on for quite sometime.

The first option to settle the obligation was for the Bureau of the Treasury to issue a fixed rate treasury bond redeemable over a period of six years. Despite the MOA executed between the GSIS, DOF and DBM during Isidro Camacho's stint with the DOF, the agreed settlement never pushed through. The second option was the "debt-to-equity" swap in which national government-owned land be turned over to the GSIS as payment of the "utang". But this never materialize as well. The third and more practical option was for GSIS to request for an appropriation cover equivalent to the reconciled unpaid premiums.

Finally, in October last year, Congress passed a supplemental appropriations (RA 9358) setting aside among others, the amount of Php 3,299,791,000 to cover payment of said deficiencies. Last month this year, the DBM and the GSIS issued Joint Memorandum Circular No. 2007-1 implementing the said supplemental appropriation.

The joint circular prescribes that the DBM shall release to GSIS the appropriated amount and post in its website the amount to be paid broken down by agency or office.

Here are the other salient provisions of the joint circular:

- the amount paid the GSIS shall cover only the principal; the interest due thereon shall be resolved separately by the DBM and GSIS;
- NGA personnel who already availed of retirement benefits from the time GSIS began deducting increase premiums shalll be entitled to corresponding benefits;
- deductions made by GSIS and applied as payment of premium deficiency shall be refunded to the employees.

Ensuring transparency in the 2007 Budget

2007-02-06T14:53:00.000+08:00

The scheduled signing by the President of the 2007 General Appropriations Act has not been set yet, hopefully before the end of February. I bet it's going to be on February 14th, and expectedly in a more solemn ceremony. The Chief Executive has not done this for the past two years since we have been operating on a re-enacted budget.

Sans the approval yet, certain innovations on the 2007 GAA are being publicized - among them the insertion of a special provision that mandates full disclosure of the use of public funds by each and every government agency, allowing the public careful scrutiny of government funds, including the way pork barrel funds are spent. Senator Franklin Drilon, Chair of the Senate Finance committee who is credited for this innovation said that with this provision, "any citizen can now insist on their constitutional right to know".

I will dwell on the salient features of the 2007 GAA once it is enacted into law.

And the Winners are . . .

2007-02-06T13:17:00.000+08:00

The Regional Awards Committee (RAC) composed of the DILG (Chair), Philippine Councilors League (PCL), DBM, DA, and DSWD has just completed its validation of the regional nominees to the Local Legislative Awards for Region VI.

The winners in each of the four (4) categories are: Bacolod City for highly urbanized cities; San Carlos City in Negros Occidental for component cities; San Jose de Buenavista in Antique for the 1st-3rd class municipalities; and Mina, Iloilo for the 4th- 6th class municipalities. The said LGUs will be officially honored and given cash awards during the PCL Assembly this February. The regional winners will be Region VI nominees to the national awards in March. This early, the RAC is very optimistic that San Carlos City with its IT-enabled legislative processes and tracking will make it as among the national winners.

The Legislative Awards is in its maiden search and an initiative of the DILG and the PCL to give due recognition to the best practices promoted by the Sanggunians of provinces, cities and municipalities.

RP ranks 6th in gender equality.

2007-01-30T11:43:00.000+08:00

Here's an encouraging report taken from the December issue of the DBM Bulletin. In a survey conducted by the World Economic Forum (WEF) of 115 countries worldwide, the Philippines came out number 6 and the only Asian country on the top 10 - that have managed to achieve equality between the sexes.

Not surprisingly, Scandinavian countries topped the gender equality survey with Sweden at the number 1 spot followed by Norway, Finland and Iceland. Germany, another European country is at fifth place while powerful countries like Great Britain and the United States rank ninth and 22nd, respectively. On the other hand, two countries with biggest gender gaps are Yemen and Saudi Arabia.

The survey measured the countries using four categories: economic, educational, political and health. On the average, according to the WEF, the countries surveyed had closed about 90 percent of the gender gap in education and health, but only 50 percent in economic participation and opportunity, and 15 percent in political empowerment. Sweden, the topnotcher is the only country that has managed to close the overall gender gap by more than 80 percent.

IRA is no longer erratic, part 2

2007-01-09T15:12:00.000+08:00

This is an addendum to my earlier post about the Internal Revenue Allotment of LGUs in which I wrote that with the passage of RA 9358 (Supplemental Budget for FY 2006), the IRA is treated as automatic appropriation, which means that even without the current national budget (GAA), the IRA will be computed and released to LGUs at the level that they are entitled to pursuant to the Local Government Code.

History repeats itself and we are starting the year with a reenacted budget - but not the IRA. The DBM has just released a computation of the LGUs' IRA based on the level of Php 183.938 B which is the figure reflected in the 2007 National Expenditures Program - equivalent to 40% of the national internal revenue collections of the third preceding fiscal year.

Thus the IRA releases starting January will now be made on the said computation and the LGUs are assured of the windfall.

Regional "BOMB" Trainors Training slated January 15-18

2007-01-08T14:36:00.000+08:00

The DBMRO VI Trainors Team will conduct the Regional Trainors and Facilitators Training on the roll-out of the Budget Operations Manual for Barangays (BOMB) on January 15-16 and 17-18. Venue is at the Punta Villa Resort.

These series of two-day trainings will be participated by the City/Municipal Finance Committees members (Budget Officers, Treasurers and Planning and Development Coordinators) and Accountants. Pursuant to Local Budget Circular No. 82, the regional trainors and facilitators will assist the DBM Team in the conduct of simultaneous trainings and workshops for barangays officials right after the October 2007 barangay elections.

Reenacting the Reenacted in the Year of the Pig!

2007-01-02T15:02:00.000+08:00

Today, January 2nd is the start of official working hours in the bureaucracy for fiscal year 2007. I don't know much about chinese astrology but year 2007 is universally considered as the "Year of the Fire Boar or Pig" (Ding Hai in Chinese)which according to Feng Shui experts, is characterized by clashing elements, fire and water that could mean conflict and even illness.

I don't mean to paint an unrosy picture at this start of the year - I'm no Madam Auring or Paul Ng - but we already experience the so-called clashing of the elements in the bureaucracy with Congress not coming to terms on whose preferences would prevail over the national budget even before the Year of the Pig unfolds. Thus we commence the fiscal year with a reenacted budget so as not to disrupt government operations and delivery of essential services.

The DBM has issued towards the last working day of December 2006, a guideline on the releases of funds for January 2007. Sad to say, we are again reverting to piece meal releases instead of the much desired comprehensive one that marks the so-called predictability of funding.

The releases are computed at one twelfth (1/12) of the total Personal Services excluding Productivity Incentive Benefits, Clothing Allowance, Year-end Benefits, and lump sums for creation of positions - based on the level of the agencies' budget in the 2007 National Expenditure Program (NEP). Maintenance and Other Operating Expenses are likewise computed at one-twelfth (1/12) of the agencies' budget level in the NEP. For retirement benefits, the DBM will continue to process and release the funds as submitted. In the case of the Internal Revenue Allotment (IRA) of LGUs, the January requirements shall be computed on the 2006 Reenacted Budget. We anticipate LGUs to howl on the amounts to be released as it has been widely publicized that with the passage of the 2006 supplemental budget last October, the IRA is now treated as automatic appropriation.

We expect that this reversion to the 2006 reenacted level of the IRA is just temporary and that the release of the LGUs share to the level that they should be receiving pursuant to the Local Government Code will be made in due time.

Phase 1 of GCCA in the offing?

2006-12-28T12:03:00.000+08:00

"PGMA to prioritize pay hike of government workers next year". This is the banner headline posted in the Philippine Government portal, gov.ph. The news feature further states that the President would "send the proposed measure to Congress as soon as the legislators return from their holiday furlough".

This is quite a bit confusing considering that a bill, H.B. 5918, has already been filed with the House of Representatives. I made a post on this last Dec. 14th. It seems Malacanang will deviate from the original version of the proposed pay hike which is the product of a study conducted by both the CSC and DBM, and will resort instead to a 10% across-the-board increase.

What prompted Malacanang to propose an alternative pay hike proposal? Time is of the essence. Congress will resume session about 2nd week of January and may last for probably only a month. Considering the many pending pieces of legislation on its calendar, among them, the 2007 national budget - there's not enough time to act on the proposed GCCA. So Malacanang is proposing an easier-to-pass version that is more acceptable to rank-and-file employees. Anyway, the proposed across-the-board increase can just be treated as initial implementation of the omnibus compensation package.

I'll keep everyone posted.

Old habits don't die!

2006-12-22T14:27:00.000+08:00

It seems Congress is at it again: promising one thing and doing another. As early as November, the respective Chair of the Appropriations and Finance Committees of the House and Senate were exuding with confidence that the Php 1.126-T 2007 national budget will be passed before the christmas recess.

What the House and Senate have done so far was to pass the budget measure with their separate versions and toss it to the bicameral conference committee to reconcile the differences. But today, December 22nd is the last day of the session before the legislators adjourn for a month long christmas break and the budget has not gone past the bicameral conference committee. The latest deliberation of committee members turned out to be deadlock on certain expenditure items like the DepEd's Php4-B Food for School Program which the Senate wants realign to hiring of more teachers.

So the specter of operating on a re-enacted budget comes January 2007 is again looming, and while both Chairmen, Senator Drilon for the Senate and Cong. Salceda for the House, remain hopeful that the budget will be ratified when Congress resumes session in January 2007 - the scepticism that this year's experience of the government operating on a re-enacted for the whole year will again be repeated.

The GCCA: Seeking to address distortions and inequality in pay?

2006-12-14T13:29:00.000+08:00

I have been receiving inquiries lately by e-mails, text messages and phone calls on the status of SSL 3. For the record, SSL 3 refers to the Proposed Government Compensation and Classification Act or GCCA. The proposed salary measure is with the House of Representative and denominated as House Bill No. 5918. It was introduced by Congressmen Joey Salceda and Francis Nepomuceno. Latest information about the GCCA can be obtained from the House website and that the House Appropriations Committee has formed a technical working composed of the committee members, CSC, DBM and COA to "study the merit of a key reform measure aimed at providing a new salary structure for government employees to narrow the disparity in salaries of civil service workers and those in the private sector".

The draft GCCA can be downloaded from the CSC website. But for the sake of those who have not gotten a copy or have not read the bill, here's a summary of my presentation during the December 5th Year-end Seminar of Local Budget Officers:

Omnibus Job Classification and Compensation system (OJCCS). This is the heart of the GCCA which shall jointly be formulated by the CSC and DBM. The OJCCS shall:

- promote internal equity among government employees, taking into consideration the principle of "equal pay for work of equal value"; and that differences in pay are subject to compensable factors;

- give due regard to external equity by considering prevailing market rates for work in medium sized private enterprises; pay rates are modest in keeping with fiscal realities;

- use performance as basis for merit increases, promotions, and incentives;

- easy to administer and responsive to current challenges; simple denomination of jobs; and subject to periodic review.

This is going to be on installment basis, so please bear with me.

LBOs' Year-end Seminar was a success!

2006-12-08T15:43:00.000+08:00

I congratulate the Iloilo MBOs Association for successfully hosting this year's year end seminar. Thus far, it is the biggest in term of participants - about 210, some coming from the accounting and treasury groups.

On the technical side, the participants were able to take a second look on how to prepare the local budget matrix, cash program, and performance evaluation. They also had the opportunity to resolve with COA certain issues related to their role in obligation and disbursements. It was unfortunate that Secretary Andaya was not able to come. He was supposed to join the President for a cabinet meeeting and consultation here in Iloilo City. But the Secretary's no-show did not dampen the enthusiasm of the participants. I had to pitch in to give them a glimpse of what the proposed Government Compensation and Classification System is all about.

The presentation of each provincial association during the fellowship night was a revelation and a show-off of hidden talents. But the Iloilo MBOs' version of Kris Aquino's "Deal or No Deal" hosted by Ramie Madero of Pavia stole the whole show. Everybody had a hearty laugh.

Budgeting: A Tool for Reforms

2006-12-08T11:57:00.000+08:00

Last Saturday (Dec. 2nd), I had the rare opportunity to speak before the class on the masteral program of the Ateneo School of Government. The students all 24 of them are officials and employees of Iloilo City, three of whom are Sangguniang Panlungsod members - Kagawads Jed Mabilog, Ely Estante and Armand Parcon.

The class was mainly handled by my former Boss, retired Usec. Cynthia Castel. My topic was about "Budgeting as Tool for Reforms". I began my presentation with brief and practical descriptions of what budgeting is. That it is a document containing words and figures with price tags attached; a prediction linking financial resources and human behavior. Usually, there is a tendency on the part of department heads to "satisfice" (to borrow the term popularized by Aaron Wildavsky), meaning "satisfy and suffice" that is, if they can't get all the funding that they want, they must as well get all that they can.

Budgeting is also contract between the local chief executive, sanggunian and local finance committee on one hand; and the department heads on the other. The former promise to produce the money to finance the planned expenditures under specified conditions, and the latter commit to implement the programs and projects or deliver the services to the public. I also underscored the reality that budgeting is at the heart of the political process, and that it records the struggle between the executive branch and local legislature over control of funds, over whose preferences will prevail. While this seems to be a democratic form of check and balance as enunciated in the Local Government Code, its effect if no agreement is reached between both branches of government, is detrimental undermining socio-economic development at the local level. Of course this situation does not only happen in LGUs. We have, in the past several years, witnessed this impasse between the Executive branch and Congress, eventually leading to a re-enacted budget, underspending and under delivery of basic services.

The challenge that I posed to the students is how they would reconcile the kind of budgeting that we are pushing (basically, performance budgeting) with political budgeting. The extent to which performance based budgeting will succeed in LGUs would depend on whether or not politicians care about outcomes and outputs. More of my lecture will be posted next time.

December 4-6 is ALBO 6 Year-end Seminar

2006-12-03T14:53:00.000+08:00

Tomorrow (December 4th) is the start of a 3-day year-end seminar of the Association of Local Budget Officers in Region VI. Venue is at the newly refurbished Coral Ballroom of Punta Villa Resort, Iloilo City.

Day 1 of this culminating seminar will be devoted to the refresher on the new allotment system to be implemented starting January, 2007. A coaching-workshop on the preparation of the local budget matrix and allotment release order will be conducted by the DBM RO 6 staff. A follow through session on the preparation of cash program and cash flow analysis will also be part of the technical session.

On the 2nd day, a review of the mechanics of the performance evaluation system to be undertaken by the local finance committee of each LGU; and the updates on COA rules are the two main topics. In the afternoon, we are expecting that Secretary Andaya will join the LBOs right after the cabinet meeting here in the city - for a dialogue and update on the proposed Government Compensation and Classification Act (GCCA) as well as the Internal Revenue Allotment. In the evening, the LBOs will hold their traditional fellowship night and christmas party. Each provincial association is expected to render a christmas number, and the LBO retirees for the year will be honored.

Activities for the 3rd day will be abbreviated as most participants, as usual, is in a hurry to go home. But the year-end affair will not be complete without the association meeting in a general assembly to discuss their concerns and plan out for the year ahead.

IMBOA, the host association promises that this 3-day seminar will be more memorable and fulfilling than the previous ones.

CSC Forum, the final cut

2006-11-23T15:07:00.000+08:00

Sounds like a movie sequel but it is not. This final installment of my presentation was intended to prick or tickle the imagination and creativity of personnel involved in the operation of LOEs on how to enhance the revenue generating capacities of their enterprises.

Funding sources. There are only two main sources that LOEs can operate on namely, their own internally-generated income from user fees or charges like rental of stalls, market tickets, sale of medicines, occupancy fees for patients, etc.; and subsidy or advances from the General Fund. Normally, the latter constitutes the biggest source of operational fund. Guimaras Provincial Hospital for example, is heavily dependent on this subsidy, constituting 79% of its operating budget. LGUs can also request financial assistance from their legislator's Priority Development Assistance Fund (PDAF) or other special purpose funds in the GAA. The capitation fund from PhilHealth can also be a potential source to augment the operational needs of hospitals. Loans from GFIs or DOF's LOGOFIND can likewise be resorted to. Aklan has tapped the LOGOFIND to finance the construction of its multi-storey hospital building. Bond flotation similar to the one initially done for the Caticlan and Boracay Jetty Port can also be replicated by other LGUs. Build-Operate-Transfer scheme and its variants as well as Lease-to-Own scheme can be a potential funding sources for capital expenditures.

Tax exemption as a Subsidy. I emphasized the fact that LGU owned enterprises are tax exempt. If these were operating as private entities, these could have been paying real property taxes and the mayor's permit and related fees, ergo, this privilege if monetized is a form of LGU subsidy.

Policy Considerations. There is a need for LGUs to take a closer look that their existing fiscal policies related to LOEs. For example, there should be a cap or conditionality on subsidy, grants or advances by limiting the utilization to deficit financing (loan payment), and meeting the cost of development projects or capital expenditures. There should likewise be policy on how much rate of return should be remitted to the General Fund once LOEs' operation is stabilized.

This complete my four-part series on LOEs. Hope my readership will find worthwhile this sharing of information.

CSC Forum, Part 3

2006-11-20T13:09:00.000+08:00

This is not related to the topic but as a proud Pinoy, I can't help but join the euphoria of Sunday's abbreviated demolition of Eric Morales by our compatriot Manny Pacquio. So swift and precise as a surgeon was Manny's 3rd round victory that even put to shame Madam Auring's prediction that the bout was going to last 12 rounds with Manny eventually winning by a KO. Seems like Manny taught Morales a moral lesson: "A punch speaks louder than a boast".

Now back to the highlights of my presentation in that CSC forum. I emphasized that restructuring existing economic enterprises seems to be a more viable option for LGUs. By restructuring, I meant transferring and or consolidating existing enterprises under a separate organization unit - either as department, division or section under the local chief executive branch. Some desireable outcomes that can be derived from this shift are:

Shift fiscal responsibility - income generated is first applied to operation of LOEs, and funding gaps will come in the form of subsidies or advances from the General Fund to be explicitly justified.

Pinpoint accountability - financial results of operation can easily be ascertained since transactions are not co-mingled with the General fund.

Unburden the General Fund - in the long run, more funds can be channeled for other services since the General Fund is freed from
provision for large subsidies.

Provide solution to PS limitation - a big portion of the PS cost will be transferred from the General Fund to the LOE's budget.

I'll save the best for last . . . Part 4 is coming soon!

The CSC Forum, part 2

2006-11-16T15:15:00.000+08:00

I'm okay now, the voice is back to normal thanks to Vir's (MBO of Duenas and our procurement training facilitator) advice to take a tablespoon of oregano juice extracted from fresh leaves. Tastes awful but it works!

As promised, here's the gist of my presentation on the funding source and fund utilization of LGU economic enterprise.

What it is. I first made a pitch about my own perception that treating all enterprises as economic is a misnomer because they are not there to earn money for the LGU but primarily, to deliver a service or provide a facility for the people. I prefer to call them LGU-owned Enterprises or LOEs.

What can be considered as LOEs? They can be classified into: (1) Economic Enterprises in the sense that they are created to improve production and delivery of basic goods and services for a specific market or client group. These include public markets, slaugtherhouses, sports complex, cemeteries and even hospitals; (2) Public Utilities that provide basic need or service to the general public that cannot be adequately provided by the private sector - Examples: waterworks, garbage collection, public transport, passenger terminal, and ports.

Features that characterizes LOEs. Just the more important ones: (a) a business with social objectives, combining entrepreneural skills with strong social purpose; (b) possessing a corporate culture, subject to public service administration and financial controls but operates outwardly in commercial manner; (c) separate unit in the bureaucracy; (d) have comparative advantage in the market with almost monopoly status; (e) heavily subsidized, a considerable consumer of public funds; (f) profits if any, are re-invested for improvement of facilities and operation.

Sorry, this has got to go on piece-meal. I'll post the rest next time.

CSC Forum overstretched my vocal chords!

2006-11-15T12:59:00.000+08:00

Yesterday (Nov. 14th) I was privileged to be one of the speakers and panelists of the forum: "Challenges in the Effective Administration of Local Economic Enterprises" sponsored by the Civil Service Commission. It was quite a fruitful one but too taxing for me as I have to shuttle from Punta Villa Resort where I made an almost three hours- presentation on Module 1 of the Generic Procurement Manuals before the 200 plus participants of our last batch of procurement training - to Grand Hotel, the venue of the forum. I had only about an hour's rest between two engagements. That must have aggravated my already strained vocal chords, hence, the consequence of a hoarse voice and occasional outburst of dry cough. No regrets, anyway.

My talk was about funding sources and allocation of funds for economic enterprises owned by LGUs. Details of which will be posted next time I get enough time to write. Meanwhile, I need to be back to Punta Villa for a lecture on Alternative Modes of Procurement for Goods.

Civil society's alternative budget - will govt. bite?

2006-11-13T12:07:00.001+08:00

Non government organizations spearheaded by former National Treasurer Leonor Briones of Social Watch Philippines are pushing for an alternative budget in lieu of the Php 1.13 T President's 2007 budget already approved by the House of Representatives and now under scrutiny by the Senate.

How does civil society's alternative budget differ with the one that government prepared particularly the DBM? In a nutshell, the civil society version merely proposes for a realignment of some Php 22.7 Billion out of the President's budget with corresponding 50% cut in Intelligence and Confidential expenses, and status quo level on the funding for Philhealth Indigents Subsidy and School Feeding Program.

The realigned funds (I'm using the term realigned from a layman's view, although technically, no realignment can yet be made since the budget is not yet approved) according to Professor Briones, shall be used "to augment appropriations for MDGs-related activities under critical sectors like education, health, agriculture and environment".

Beneficiaries of this alternative proposal are DepEd by P6.3 billion for new teaching and non teaching positions, school buildings, alternative learning system, teachers training, school’s MOOE; CHED (P882 million for scholarship; DOH by P8.5 billion for primary health care, child survival, reproductive health,etc.; Agriculture (P3.7 billion)to fund irrigation, water-resources development, farmers training, farm-to-market roads and post harvest; among others.

My own gut feel: I'm inclined to support this NGO-led initiative not just for tranparency and participatory purposes, but also for this government to provide more focus on its spending towards addressing the Millennium Development Goals (MDG). Latest survey (my post of Oct. 17th) shows that we are lagging behind in several MDG indeces.

Will the government bite? Probably a compromise can be made considering that the Senate may support the proposal. Otherwise, we are heading for another impasse and may end up with another re-enacted budget.

A gold credit card holder . . .

2006-11-10T12:50:00.000+08:00

It's not the usual credit card like Visa or Mastercard. It's World Bank's latest ribbon pinned in the breast of the country's economic performance. "The Philippines is joining the ranks of gold credit card holder", declares Joachim von Amsberg, World Bank's country representative.

And what prompted the World Bank to confer this distinction? Mr. von Amsberg attributes this to the country's fiscal outturns and government's commitment to achieve its consolidation on target. Basically this is the same consideration that credit rating agencies like Standard and Poor, Fitch and Moody's used in upgrading our standing from negative to stable. So what else is new?

This is the catch: With this good fiscal performance, World Bank will commit more loans to the already credit-saddled Philippines. Business Mirror, in today's (Nov. 10th) issue reports that a fresh loan is in the offing from World Bank to the tune of 250 M US Dollar. That's 12.29 B in Philippine pesos using today's exchange rate of Php 49.95 to the US dollar. The advantage of the said loan is that it is not a tied loan, not much conditionality except to provide for GOP counterpart - that is, the government can use the proceeds for any purposes it may deem and free of the usual compliance to certain policy reform or structural adjustment.

2.5 per cent on a scale of 0 to 10!

2006-11-08T10:43:00.000+08:00

The stat does not refer to the growth of our GNP nor GDP. It's the Philippines' rating on the corruption perception index (CPI) recently released by Transparency International.

To go on further, the country ranked 121st in the 2006 CPI among 163 countries worldwide - sharing the same rank with Russia, Rwanda Nepal, the Honduras, Swaliland, Benin, Gambia and Guyana. Is this something to worry about? Definitely, yes! Looking at historical records, in the 2005 survey, we ranked 117 and in 2004, the country is at number 102. Meaning we have gone down four notches this year compared to 2005, and (my golly!) 19 notches reckoned to 2004.

It seems, despite all the governance reforms put in place so far, no positive impact has been felt to combat corruption and rent-seeking activities in the bureaucracy. In the words of Senator Drilon, Senate Finance Committee Chair: "the perception index of Transparency International indicated that we are not improving at all. In fact, we are deteriorating".

This Blog is shown in Technocrati

2006-11-06T09:54:00.000+08:00

To increase visibility and readership, I've added this Blog over Technocrati:

What's so special about Moody's rating?

2006-11-04T15:02:00.000+08:00

It's all over in the major dailies! Business World reports: "Moody's lifts RP outlook to stable from negative". Business Mirror's headlines reads: "Moody's tag on RP credit now "stable". Not to be outdone, Inquirer, the country's most widely circulated newspaper posts in its Nation-Headlines: "RP credit outlook gets upgrade". But the most flattering of all the news on the credit upgrade is the one posted over the gov.ph website: "Moody's upgrade a vote of confidence for govt. economic reforms - PGMA".

To borrow a line from the rock opera, Jesus Christ superstar: "what's the buzz, tell me what's happening, what's the buzz". For one, the U.S-based Moody's Investor Service, a global debt watchdog is considered the most pessimistic about the Philippines among credit rating outfits - which includes the likes of Standard & Poor's and Fitch. The last two agencies have upgraded their ratings on the Philippines earlier this year to stable ("BB-" and "BB", respectively).

Thus, Moody's "B1" rating is some sort of a vindication or as the President puts it, a vote of confidence. It's positive effect on the economy can be summed up: (a) expected to boost financial market's confidence on Philippine stocks; (b) result in lower borrowing cost for both government and private companies; (c) strengthen the peso even more.

Why the upgrade? In a statement from Singapore, Moody's Vice President Mr. Thomas Bryne said "Based on fiscal performance through the first three quarters of 2006, it seems likely that the government will readily meet its deficit reduction target for the year as a whole".

The Moody's report also cited certain challenges that the country is confronted with, thus: "the economic necessity of trying to lure investors by way of putting up infrastructure would place additional pressures on the government's budget"; the Philippine remains highly indebted compared with other countries; and political will and strong support form Congress are necessary to sustain recent accomplishment.

Will the credit rating further improve? Moody's prescribes that "there needs to be a continued significant deficit reduction and decreased reliance on external financing by the public sector".

A Country of employers, less a country of jobseekers!

2006-11-02T15:37:00.000+08:00

That is the desired end result of House Bill 5486, authored by Rep. Lorna Silverio (third District, Bulacan) which the House of Representatives recently approved on third and final reading. The said Bill, according to the author seeks to "enhance the human and intellectual capital of the government and its employees and to make sure that every employee will be self-reliant and more productive even after their stints in the government service". It assures that even retiring employees and those retired will extended assistance should they decide to engage in business after their government service. Just hope the bill gets enacted into law in time for the implementation of rationalization plans of national agencies.

Entrepreneurship among government employees is nothing new actually. In every agency or local government unit we witness a prevalence of employees (even teachers) who double as sales agent of insurance companies, housing subdivisions, memorial parks, Time Life, Tupperware, etc., or as reseller of signature women's undies and perfumes, jewelries, longganisa, tapa and other consumables or food items. There also are employees cooperatives, credit unions and even "paluwagans" in most offices. Some highly successful like the ones in Tubungan, Iloilo and the Province of Negros Occidental.

I haven't entirely read the bill, but on surface, it merely legalizes these already existing entrepreneural activities in government offices and might encourage a hoard of other employees to follow suit - in the process, jeopardizing delivery of services to the general public and "crowd out" the private individuals or entities already engaged in similar business dealings.

To be released in 2 tranches . . .

2006-11-02T10:49:00.000+08:00

I'm referring to the IRA differential of LGUs . Central Office has finally issued a directive on the manner of releasing the differential based on the P14.843 B IRA supplemental budget. The Memorandum, dated 31 October 2006 directs DBM ROs to (1) compute the 80%-20% IRA shares; (2) issue the corresponding NCAs for November and December; (3) release/deposit the funding checks to the account of the respective provinces, cities, municipalities and barangays on the following dates:

November shares (50% of the differential): 80% on November 10; 20% on November 27
December shares: (remaining 50%) : full on December 12

We hope this will dispel any negative speculation that the release of IRA differential will be withheld up to next year.

Our Mission: Plant a "BOMB"!

2006-10-30T12:33:00.000+08:00

Sorry for the four-day hiatus. I've just been back from a three-day trainers' training in Cebu City, the other "Queen City of the South" (Iloilo City is the other and the original) - along with four other staff: Edge, Eme, Liane and Lynnie. Of course, we're not the only participants. Our counterparts in Regions 7 and 8 as well those from the five ROs in Mindanao were also around.

The 3-day sojourn in Cebu was, according to Secretary (Nonoy) Andaya, who joined us on the second day - about training us to "plant a BOMB". Don't get me wrong (or the Secretary). The "BOMB" is the acronym for Budget Operations Manual for Barangays, one of the DBM's most recent publication done primarily through the intiative of DBM RO IV-B's Director Lando Garcia. Designed to be simple, easy-to-understand, and user-friendly, this new Manual will be rolled-out to the barangays comes year 2008 - in time for the new set of barangay officials, assuming the elections will go on as scheduled.

It seeks to, in the Secretary's own words, "demolish old planning concept" by prescribing clear guidelines on how to connect development plan to the budget; and "obliterate bad budgeting practices" by supplanting it instead with a policy-driven, performance-based and participative budgeting.

Quite a tall order and sounds like we're really serious in reforming budget management down to the basic unit of our governance. But will it work for the barangays? That will be our formidable task - us DBM trainers. But we're not alone in this endeavor. Our other attendant task is to train regional trainers in every city and municipality composed of local finance committee members (budget officer, planning and development coordinator, treasurer) and accountants. We're expected to carry out the regional training by January next year.

There were several other revelations the Secretary mentioned during our dialogue with him. I'll post this in the days to come. Abangan . . .

IRA is no longer erratic . . .

2006-10-25T13:39:00.000+08:00

To fast track the implementation of R.A. 9358, the P46.4 B supplemental budget (to take effect 15 days after publication), the DBM has recently released the final computation of the Internal Revenue Allotment (IRA) of LGUs. The final figure adjusts the share of LGUs based on the P166.466 B total IRA.

The final computation sent to us via email shows the share of LGUs (including barangays) in Region VI amounting to P14.373 B, the third highest among the regions nationwide. Here's a synopsis of the computation: Negros Occ. has joined the billionaire's row and the only one in the region with a share of P1.057 B, at second place is Iloilo province with P805.849 M followed by Capiz, P431.309 M; Antique - P371.811 M; Aklan - P337.673 M; and Guimaras - P183.174 M. Among cities, Bacolod has the biggest share with P426.723 M. Kabankalan moves to second place at P386.638 M dislodging Iloilo which slid to third with a share of P359.427 M.

For municipalities, Cauayan in southern Negros tops the list with a share of P88.051 M followed by its northern counterpart, Calatrava at P 74.702 M and Hinigaran also in Negros Occ. at third spot formP59.351 M. Among 42 municipalities in Ioilo, Lambunao is on top with P56.029 M while Oton, the most populous town at second place with P51.720 M. In Aklan, the Ati-atihan country, the capital town of Kalibo has the biggest share with P49.378 M; Ibajay is far second at P39.901 M. In the Binirayan province of Antique, Sibalom (where one can find "rafflesia", the world's biggest flower) - ranks number one with P47.708 M; its neighbor, San Remigio is at second place with P43.026 M and San Jose, the capital town is surprisingly at third place at P40.146 M.

Moving on to Capiz, the sea food capital of the Philippines (guess what, I'm also doubling as a tourist promoter), Tapaz, a sometimes hard-to-reach town is numero uno with a share of P58.362 M and at far second is its neighbor, Jamindan with P47.538 M. In the oil-spilled province of Guimaras, Buenavista is on top among five municipalities with a share of P40.533 M, while the second biggest share goes to Jordan, the capital town for P33.668 M.

I won't dwell on the barangays as there are about 4,046 of them. The details of the computation will soon be posted at the regional office web site: www.dbmro6.org.

I almost forgot, with the passage of RA 9358, LGUs are assured of their final shares regardless of whether or not there is an approved GAA. Section 4 of the said law provides that the IRA is now treated as automatic appropriation. I'll discuss this on my subsequent post.

Expecting the expected, but how soon . . .

2006-10-23T10:31:00.000+08:00

When do we get our IRA differentials? This is the stereo-type question I repeatedly receive from LGUs either on phone calls, physical contact, text messages or even on e-mails. Sounds like the waiting may soon be over. Reliable source - although not yet official (no Memo yet received from CO), points to the likelihood that 50% of the IRA differential of P 14.8 B, which is the amount appropriated in the recently approved P46-4 B supplemental budget - will be released in November following the usual 80%-20% scheme. The remaining 50% will be released in December. It looks like LGUs are heading for a windfall in the next two remaining months of the year. Hence, they should be able to finance gaps in service delivery; implement more infra projects; and grant those unimplemented employees' benefits.

For the ordinary employees the IRA windfall would mean implementation of the P1,ooo AdCom which should have taken effect January 1st, and perhaps, a bigger extra cash gift by year-end.

Just to assure that the programmed release of IRA differential is not a rumor, here are a few text messages I've received over the weekend: "gud AM Gov. supplemental budget, manner of release, 50% Nov. as ff. 80% - 1st week, 4th week 20%; remaining balance one tym release, n dec. FYI". Here's the response from CO: "Ur info r correct as to amt n sched of release adv merry xmas". Will keep you posted through this blog.

Big Business' "must-have" Resolutions . .

2006-10-20T14:34:00.000+08:00

In response to World Bank's synthesis of the Philippine economy (my post of 10/19), the Philippine Business Council (PBC) will present to the President during the closing of the 32nd PBC annual meeting - three (3) sets of resolutions. PCCI President Donald Dee categorize the resolutions into "must have"; "nice to have" and "wish we could have".

The resolutions were focussed on infrastructure development, tax and reducing the cost of doing business. Under the "must haves", businessmen identified 20 priority concerns, mostly infrastructures. Let's dwell on this:

transparency in procurement of infrastructure projects through open and competitive bidding (thought GPRA is already in place);
on energy - reducing the cost of electricity by reducing EVAT on fuel from 12% to 5% and transmission cost by 30%; repeal of Electric Power Industry Reform Act;
on airports - extending the "open sky policy" to other airports of the country, in the process, declaring airports like Subic-Clark, Laoag, Puerto Princesa, Davao, Cebu, Laguindingan and our own in Iloilo as open for international routes and as regional hubs;
on seaports - privatization and modernization of North Harbor; fasttracking bidding of Batangas International port;
on roads and highways - DPWH to enter into MOA with private proponents of toll road projects; resolution of road-right of way problems;
on water - fasttracking of passage of bill strengthening the Water Resources Board;
on agriculture - intensifying hybrid rice and corn program; giving preferential sugar tariff rates for producers and exporters;
on taxation - retention of incentives to all export-oriented enterprises including income tax holidays, etc;
on good governance - DOF to fast track implementation of the Lateral Attrition Law and streamlining of Customs Systems and procedures to facilitate trade; DTI to streamline procedures and reduce charges for business licenses.

There are several others that may warrant disclosure in this post but will reserve these next time. My fervent hope is for the national leadership to heed this business call. This is the only country we have. We live and die here - so let's go for it!

Are we heading for economic take-off?

2006-10-19T10:29:00.000+08:00

World Bank says it's possible by 2010 . . but government should heed this prescription: "restore the country's international credibility by sending a strong policy signal" that will improve the climate for business and investments. Mr. von Armsberg, World Bank country representive urged the government to follow the rule of law, enforce contracts, pursue deregulation, and reduce transaction costs and red tape.

As it stands now, the Philippines is at the tail end (buntot) behind its ASEAN neighbors in attracting foreign direct investments (FDI). Of the $37.14 B FDI that went to Southeast Asia, last year, the Philippines garnered only a measly $1.13 B, Vietnam took $2 B, while Thailand and Malaysia $4 B each. The oftenly repeated litany of investment constraints attributing to this measly performance are: macroeconomic instability, corruption, poor electricity, high tax rates, uncertain regulatory policies, crime, and stringent labor laws.

To top it all, here's some mind-boggling yet real statistics: our average GDP annual growth is a little over 1% between 1966 to 2004, while the rest of East Asia was at nearly 6%. Our economic growth is fuelled mainly by OFW remittances and household consumption rather than by investment and productivity. We are Asia's second most active issuer of sovereign debt after Japan. Wow! "Blessed are the young for they shall inherit the national debt." We ranked number 83 in Human Development Index (HDI) with a score of .753. The World Competitiveness Yearbook ranks us 61st in the provision for basic infrastructures; 57th in Education; and 53rd in health services - out of 61 countries. Need to know more? The 2006 World Economic Forum report places the Philippines 77th in terms of competitiveness, while the International Finance Corporation put us 126th out of 175 countries in being business friendly. Singapore is No. 1, Malaysia and Thailand - 18th and 25th, respectively.

Let's not be carried away by negativism and desperation. Our consolation - we still retain the distinction as the texting capital of the world with an average of 1-B SMS a day. We have 28-M mobile phone subscribers, 96% of which use prepaid cards. Most recently, the Britain-based New Economic Foundation places us as the 17th "Happiest country" in the world.

An alarming reality!

2006-10-17T11:21:00.000+08:00

The latest ADB-UN joint report on the 2006 Millennium Development Goals (MDG) progress in Asia and the Pacific showed that our dear old "Pinas" is miserably lagging behind other countries. The said report lumped the Philippines along with such third world countries as Bangladesh, Indonesia, Mongolia, Myanmar, Pakistan and Papua New Guinea as having failed to progress with respect to a number of MDG targets.

Specifically, the report disclosed that the Philippines is "regressing" in terms of reducing the number of underweight children, raising the proportion of primary pupils reaching Grade Five, and in targets for forest cover, carbon emissions and access to clean water in urban areas.

On the other hand, the report also revealed that the country "is on track to cutting the number of people living on $1 a day and increasing the net enrolment ratio in primary education. It is also expected to meet the goals on HIV prevalence and on proportion of population with access to an improved sanitation in urban and rural areas." Goals on the primary completion rate; ratio of girls to boys in primary, secondary and tertiary education, and the under-five and infant mortality rate, among others, have already been met.

The GMA administration seeks to reverse this regression. Just yesterday, October 16th, the President led the launching of the "Panata Laban sa Kahirapan" (Stand Against Poverty) which concretizes the country's determination to fight poverty to keep up with its commitment with the MDG goals. But this "show of force" is a mere lip service that will mean nothing unless it is translated into increased government spending for basic services like health and education. Statistics show that the Philippines is committing a small portion of its GDP for these basic services, way below the norms or standards prescribed by international funding institutions like the World Bank.

Grameen Bank: Economics that works at the grass roots level

2006-10-16T08:37:00.000+08:00

Congratulations to Professor Muhammad Yunus of Bangladesh for winning the Nobel Peace prize. Yunus, an economics professor is the founder of Grameen Bank (GB). He set up the Bank in 1976 as a pilot project to provide access for poor Bangladeshis. It specializes in giving out collateral-free small loans to landless, rural people to help them become self-employed. Its credit policy is based mainly on mutual trust, accountability, participation and creativity.

As posted in the Bank's website: www.grameen-info.org/bank, GB has to date, 6.61 million borrowers, 97 percent of whom are women. With 2,226 branches, GB provides services in 71,371 villages, covering more than 100 percent of the total villages in Bangladesh. Not only that, GB's operational concept has since been copied in more than 40 countries - including the Philippines. Iloilo-based "Taytay sa Kauswagan" is patterned after GB.

Prof. Yunus' microcredit program presented the world with an effective alternative to alleviate poverty - a novel economic theory that "works at the grass roots level", and is now a regular feature of economic textbooks used in many universities. Yunus was likewise conferred a similar award in 1984, by the Ramon Magsaysay Award Foundation, commonly referred to as Asia's Nobel.

Fulfilling its commitment to the Filipino people . .

2006-10-13T14:56:00.000+08:00

After almost two weeks of marathon plenary debates, the House of Representatives has approved on third and final reading the Php1.126 trillion national budget for 2007. The money measure was done at 4:43 am, Friday, October the 13th - sounds quite a bad omen the way we Filipinos believe (hope not!) with an affirmative vote of 198, seven against and no abstention.

"Approving the spending measure is a fulfillment of our contract with our constituents who have sent us here", this was Speaker de Venecia's declaratory note shortly after the approval of the budget.

The top five departments which stand to receive the largest slice of the budget are:

Department of Education - P132.9-billion
Department of Public Works and Highways - P73.6-billion
Department of Interior and Local Government - P51.1-billion
Department of National Defense - P49.5-billion
Department of Agriculture, inclusive of its Agricultural and Fisheries Modernization Program component - P18.5-billion

The House-approved budget will then go to the Senate to undergo the same process. As budget t practitioners who are involved in the releases and implementation of the budget, it is our ardent hope that the 2007 budget will not suffer the same fate as that of the 2006.

Goodbye Nang Alma . . .

2006-10-12T13:02:00.000+08:00

DBM RO 6 staff and the LBOs of Region VI mourn the demise of Mrs. Alma Lee, retired Municipal Budget of Duenas, Iloilo. She passed away last Monday, October 9th of a lingering illness at age 68. Her remains lie in state at Funeraria Somo, Iloilo City. She will be brought to her hometown in Duenas, Iloilo on Friday, October 13th. Interment will be on Sunday, October 15th.

Nang Alma as she is fondly called was a mother figure to us - always there when you need her, very thoughtful and generous - always making sure that you had your lunch or merienda whenever she's around. She will surely be missed! We're pretty sure that the generations to come while praying over her grave, will grant her tears of love and gratitude and not of better reproach. To the Lee Family, our sincere condolences!

How VAT helped the Philippine economy?

2006-10-12T08:45:00.000+08:00

Despite the much publicized opposition, rallies and invectives hurled against the implementation of the expanded Value Added Tax (from 10% to 12%), here's some positive and encouraging observations from the CIA factbook: "the implementation of the expanded Value Added Tax (VAT) in November 2005 boosted confidence in the government's fiscal capacity and helped to strengthen the peso, which gained 5.7 percent year-on-year, making it East Asia's best performing currency in 2005. Investors and credit rating institutions will continue to look for effective implementation of the new VAT and continued improvement in the government's overall fiscal capacity in the coming year".

A Welcome Note

2006-10-11T15:43:00.000+08:00

This Blog is intended for public servants particularly those involved in fiscal administration - revenue regeneration, expenditure allocation, credit financing, accounting and auditing, and procurement. Feel free to contribute your posts here.