This presentation was made by Myrna Chua, Philippines, at the 14th OECD-Asian Senior Budget Officials Meeting held in Bangkok, Thailand, on 13-14 December 2018

1. 14th OECD-Asian Senior Budget Officials Annual Meeting
December 13-14, 2018
Infrastructure Development and
Budget Management
1
Assistant Secretary Myrna S. Chua
Department of Budget and Management

2. I. The Philippines’ “Build, Build, Build”
Program
a) Updates
b) Measures to Expedite Implementation of
Major Infrastructure Projects
II. Budget Reform Program
2
Outline

3. 3
The Philippines’
“Build, Build, Build”
Program

4. 4
The Philippines’
“Build, Build, Build” Program
Source: Department of Budget and Management
Infrastructure Spending Program, Annual Cash-Based Appropriations*
*Shift to the first annual cash-based budget in 2019. Under this system, all government programs and projects budgeted
for the fiscal year should be implemented, delivered, inspected and accepted until the end of the fiscal year and settled
within the fiscal year up to the 3-month period following the end of the fiscal year. Transition period for 2019 where
infrastructure programs will be implemented for 18 months.

5. 5
The Philippines’
“Build, Build, Build” Program
Source: Department of Budget and Management
Infrastructure and Other Capital Disbursements
Program
(PHP bn)
Actual
(PHP bn)
Variance
(PHP bn)
Percent
FY 2017 549.4 568.8 19.4 3.5
Jan - Sep
2018
532.6 570.8 38.2 7.2
• Construction sector contributed around 468,000 additional
jobs based from April 2018 Labor Force Survey.

6. Underspending in past years (2014-2016)
due to structural weaknesses within
government agencies:
a) Poor planning and project design
b) Procurement difficulties such as bidding
failures
c) Bottlenecks in project implementation due to
securing clearances/permits, right-of-way
problems
6
Past Years’ Disbursement
Performance

7. 7
Source: Department of Budget and Management
Improved Budget Utilization
National Government Disbursement Performance
Program
(PHP bn)
Actual
(PHP bn)
Variance
(PHP bn)
Underspending
(%)
FY 2014 2,284.3 1,981.6 (302.7) 13.3
FY 2015 2,558.9 2,230.6 (328.3) 12.8
FY 2016 2,645.6 2,549.3 (96.3) 3.6
FY 2017 2,909.0 2,823.8 (85.2) 2.9
Jan – Sep
2018
2,427.2 2,489.7 62.6 (2.6)

8. 8
Expediting Implementation of Major
Infrastructure Projects
Project
Facilitation,
Monitoring, and
Innovation
(PFMI) Task
Force
Overseeing the efficient and timely
processing, implementation, and
completion of the 75 Infrastructure
Flagship Projects.

9. 9
Expediting Implementation of Major
Infrastructure Projects
ADB IPIF
Loan
Addressing key constraints to project
planning, design, and implementation, and
accelerate progress in infrastructure
delivery through supporting the
Department of Public Works and Highways
(DPWH) and the Department of
Transportation (DOTr).

10. 10
Expediting Implementation of Major
Infrastructure Projects
Tapping
More
Funding
Options
 Tapping more funding options to implement
the Infrastructure Program through PPP and
ODA.
 Accepting Unsolicited Proposals, subject to
Swiss challenge
 Adopting hybrid-PPP
 Establishment of Risk Management Fund

11. 11
Budget
Reform
Program

12. 12
Budget Reform Program
Objective of the BRP
Supporting the expansionary fiscal policy of government
Fully execute the Budget to deliver goods and services that
promote Growth and reduce Poverty
Medium-term Goals:
1. Economic Growth of 7-8% per year
2. Poverty Reduction from 21.6% to 14% by 2022
Infrastructure Spending Social Sector Spending
5.4% of GDP in 2017 8.5% of GDP in 2017
7.0% of GDP in 2022 9.2% of GDP in 2022
P8.4 Trillion in 6 years P10.33 Trillion in 6 years

13. 13
Budget Reform Program
Source: Department of Budget and Management
Annual Cash-Based Budgeting

14. Republic of the Philippines
Department of Budget and Management
Effects of a Cash-Based Budget
1. Planning will be improved and done earlier
2. More pre-work (e.g. feasibility studies, detailed
engineering designs) will be done ahead of time
3. Only implementation-ready projects will be included in
the budget
4. Increase in Early Procurement activities before the start
of the fiscal year
5. Majority of contracts will be awarded on the First Quarter
of the fiscal year
A cash—based budget shall increase the efficiency
of gov’t operations
14

15. Republic of the Philippines
Department of Budget and Management
Effects of a Cash-Based Budget
6. Pre-implementation issues such as Right of Way
Acquisition and Resettlement components shall be
settled before civil works construction
7. Better and tighter contract management
8. Faster processing of payments
9. Contractual obligations shall be honored
A cash—based budget shall increase the efficiency
of gov’t operations
15

16. 16
Status of Budget Reforms
Open
Government
Partnership
Philippines is one of eight founding countries of the OGP
Promote transparency, empower citizens, fight corruption and
harness technologies to strengthen governance
Status:
Philippines is now on its 4th OGP National Action Plan
implementation cycle. Effort is to spread citizen
participation at the subnational level and enhance the
ability of CSOs to identify and monitor projects for
budgetary funding.
Budget
Modernization
Bill
 In 2017, government shifted to one-year validity of
appropriations to address underspending
 By 2019, shift to an annual cash-based budget will be
implemented
Status:
Budget Modernization Bill has already been approved in
Lower House and pending plenary debate in Senate.
Target is to pass it next year.

17. 14th OECD-Asian Senior Budget Officials Annual Meeting
December 13-14, 2018
Infrastructure Development and
Budget Management
17
Assistant Secretary Myrna S. Chua
Department of Budget and Management