Ppbs 2011

Notas do Editor

1. PPBS IS AN INTEGRATED MANAGEMENT SYSTEM THAT PLACES EMPHASIS ON THE USE OF ANALYSIS FOR PROGRAM DECISION MAKING…THE PURPOSE OF PPBS IS TO PROVIDE MANAGEMENT WITH A BETTER ANALYTICAL BASIS FOR MAKING PROGRAM DECISIONS, AND FOR PUTTING SUCH DECISIONS INTO OPERATION THROUGH AN INTEGRATION OF THE PLANNING, PROGRAMMING, AND BUDGETING FUNCTIONS.
2. THE TERM MANAGEMENT IS USED HERE IN ITS BROADEST SENSE; IT IS USED IN THE CONTEXT OF AN ORGANIZATION’S OVERALL MANAGEMENT AND ADMINISTRATION. PROGRAM DECISION MAKING IS A FUNDAMENTAL FUNCTION OF MANAGEMENT. IT INVOLVES MAKING BASIC CHOICES AS TO THE DIRECTION OF AN ORGANIZATION’S EFFORT AND ALLOCATING RESOURCES ACCORDINGLY.
3. AS A FUNCTION OF MANAGEMENT, PROGRAM DECISION DEFINES THE OBJECTIVES OF THE ORGANIZATION, THEN DECIDING ON THE MEASURES THAT WILL BE TAKEN IN PURSUIT OF THOSE GOALS, AND FINALLY PUTTING THE SELECTED COURSES OF ACTION INTO EFFECT.
4. PPBS IS CONCERNED PRIMARILY WITH MAJOR DECISION-MAKING PROCESSES. ITS CONCENTRATION IS ON THE MANAGEMENT FUNCTIONS THAT PRECEDE ACTUAL OPERATIONS.
5. AN ORGANIZATION CAN BE VIEWED IN A SIMPLIFIED WAY AS CARRYING OUT ITS FUNCTIONS THROUGH THE FIVE BASIC AND SEQUENTIAL PHASES: PLANNING, PROGRAMMING,BUDGETING, OPERATIONS, AND EVALUATION. AS ITS NAME INDICATES, PPBS IS CONCERNED WITH THE FIRST THREE OF THESE PHASES. EACH OF THESE PHASES, CONSISTS OF A DISTINCT BUT RELATED FUNCTION IN THE OVERALL CONDUCT OF THE ORGANIZATION’S AFFAIRS.
6. PLANNING IS AN ANALYTICAL ACTIVITY CARRIED OUT TO AID IN THE SELECTION OF AN ORGANIZATION’S OBJECTIVES AND THEN TO EXAMINE COURSES OF ACTION THAT COULD BE TAKEN IN THE PURSUIT OF OBJECTIVES. PLANNING, IN EFFECT, POSES THE QUESTION AS TO WHETHER SOME PARTICULAR COURSE OF ACTION WOULD CONTRIBUTE MORE TO THE ATTAINMENT OF THE ORGANIZATION’S GOAL THAN ITS VARIOUS ALTERNATIVES.
7. PROGRAMMING IS THE FUNCTION THAT CONVERTS PLANS INTO A SPECIFIC ACTION SCHEDULE FOR THE ORGANIZATION. PROGRAMMING CONSISTS OF DEVELOPING DETAILED RESOURCE REQUIREMENTS AND THE ACTIONS NEEDED TO IMPLEMENT PLANS.
8. BUDGETING IS THE ACTIVITY CONCERNED WITH THE PREPARATION AND JUSTIFICATION OF THE ORGANIZATION’S ANNUAL BUDGET. THE FUNCTION OF BUDGETING IS TO SECURE SUFFICIENT FUNDS TO PUT THE PROGRAM INTO OPERATION.
9. OPERATIONS CONSIST OF THE ACTUAL CARRYING OUT OF THE ORGANIZATION’S PROGRAM. PREPARING FOR OPERATIONS IS THE OBJECT OF ALL OF GTHE OTHER PHASES
10. EVALUATION IS THE FUNCTION THAT EVALUATES THE WORTH OF OPERATING PROGRAMS. THROUGH PROGRAM EVALUATION THE WORTH OF PROGRAMS IN ATTAINING GOALS IS MEASURED AND APPRAISED. THE RESULTS OF EVALUATIONS ARE USED TO MODIFY CURRENT OPERATIONS, IF INDICATED, OR IN PLANNING FUTURE PROGRAMS..
11. A MAJOR OBJECTIVE OF THE PPBS IS TO UNIFY THE PLANNING, PROGRMAMING, AND BUDGETING FUNCTIONS. PLANNING, WHICH IS CONDUCTED THROUGH ANALYSIS AND RESEARCH, BECOMES IN PPBS A PART OF THE PROGRAM FORMULATION PROCESS. PLANNING RESEARCH TO SELECT PARTICULAR COURSES OF ACTION PROVIDES THE BASIS FOR THE ORGANIZATION’S OVERALL PROGRAM. ALSO, THE ANNUAL BUDGET IS DERIVED DIRECTLY FROM THE ORGANIZATION’S APPROVED PROGRAM AND FINANCIAL PLAN. PLANNING, PROGRAMMING AND BUDGETING, ALTHOUGH EACH EXERCISING SPECIALIZED FUNCTIONS, BECOME SEPARATE PHASES OF A SINGLE EFFORT, WHICH IS TO SET THE COURSE FOR THE ORGANIZATION.
12. UNDER THE PPBS, AUTONOMY IN PLANNING, PROGRAMMING OR BUDGETING IS MEANT TO BE MINIMIZED. PROCEDURES AND WORK FLOWS ESTABLISHED UNDER THE SYSTEM PRESCRIBE DIRECT LINKS AMONG THESE BASIC ORGANIZATIONAL FUNCTIONS. INCREASED CONCENTRATION THROUGH RESEARCH IS PLACED ON THE FUNCTION OF SELECTING COURSES OF ACTION FOR THE ORGANIZATION. THE PROCEDURAL ASPECTS OF PPBS PROVIDE THAT THE RESULTS OF THE PLANNING ACTIVITY SERVE AS THE BASIS FOR THE PREPARATION OF THE ORGANIZATION’S OVERALL PROGRAM. THE PROGRAM THEREFORE IS DERIVED DIRECTLY FROM THE RESULTS OF THE PLANNING ACTIVITY, AND PREPARATION OF THE BUDGET BEING DERIVED FROM THE PROGRAM IS LIKEWISE NOT AN INDEPENDENT ACTIVITY.
13. IT IS DIFFICULT TO REACH GENERAL AGREEMENT ON A DEFINITION OF PPBS. THIS IS PRIMARILY BECAUSE PPBS HAS A NUMBER OF DISTINCT FEATURES OR ELEMENTS, EACH OF WHICH RECEIVE DIFFERENT DEGREES OF EMPHASIS DEPENDING UPON THE PARTICULAR CONTEXT. THE PPBS IS CONSTITUTED BASICALLY OF FIVE (5) ELEMENTS. AS FOLLOWS: ….DIFFERENCES EXPRESSED AS TO THE DEFINITION OF PPBS USUALLY COME ABOUT BY AN EMPHASIS BEING PLACED ON ONE OF THESE ELEMENTS WHILE IGNORING OR MINIMIZING THE IMPORTANCE OF THE OTHERS…ALL THE ELEMENTS --- THE PROGRAM STRUCTURE, THE PROGRAM DOCUMENT, THE DECISION-MAKING PROCESS, THE ANALYTICAL APPROACH AND SUPPORTING INFORMATION --- ARE IMPORTANT…..THE MOST EFFECTIVE PPBS SYSTEM INCLUDES ALL FIVE ELEMENTS BECAUSE THEY ARE INTERRELATED AND MUTUALLY SUPPORTIVE…..PROGRAM STRUCTURE RELATES TO THE DECISION-MAKING PROCESS….ALSO, ISSUES FOR ANALYSIS ARE FORMULATED IN A WAY THAT REFERS TO THE PROGRAM CLASSIFICATION….LIKEWISE, THE USE OF ANLAYSIS IS MADE A PART OF THE ORGANIZATION’S DECISION-MAKING PROCEDURES. THE INFORMATION SYSTEM SUPPORTS ALL OF THE OTHER ELEMENTS. IN SUM, THE PARTS OF THE PPBS ARE RELATED IN AN INTERLOCKING WAY IN ORDER TO ENHANCE THE TOTAL EFFECTIVENESS OF THE SYSTEM.
14. ALTHOUGH THE ELEMENTS ARE INTERRELATED IT IS STILL POSSIBLE TO ADOPT INDIVIDUAL ELEMENTS OF PPBS IN AN ORGANIZATION….THE USE OF ANALYSIS IN DECISION MAKING, FOR EXAMPLE, COULD BE ADOPTED WITH GOOD EFFECT WITHOUT THE OTHER ELEMENTS. ..LIKEWISE, A PROGRAM DEPICTING A SET OF ORGANIZATIONAL GOALS AND LINES OF ACTION OVER AN EXTENDED TIME PERIOD WOULD BE BENEFICIAL….BUT THE FULL BENEFITS OF THE USE OF ANALYSIS OR THE PROGRAM STRUCTURE WOULD NOT BE REALIZED WITHOUT THE OTHER ELEMENTS.
15. A CLASSIFICATION OF THE COURSES OF ACTION OPEN TO AN ORGANIZATION FOR ATTAINING ITS OBJECTIVES IS A PROGRAM STRUCTURE… THIS CLASSIFICATION IN PRORAM TERMS IS DESIGNED TO SERVE THE NEEDS OF DECISION-MAKING AND FOR ALLOCATING THE RESOURCES AVAILABLE TO THE ORGANIZATION… PROGRAM DATA IN TERMS OF BENEFITS AND RESOURCE ALLOCATIONS IN THE ORGANIZATION’S MULTI-YEAR PROGRAM AND FINANCIAL PLAN SHOULD BE DISPLAYED ACCORDING TO THE PROGRAM STRUCTURE. THE STRUCTURE ALSO SERVES AS A FRAMEWORK FOR PREPARING PROGRAM MEMORANDA WHICH JUSTIFY PROPOSED PROGRAMS.
16. THE PROGRAM STRUCTURE REPRESENTS A WAY OF LOOKING AT AN ORGANIZATION’S EFFORTS THAT IS SUITED TO THE NEEDS OF PROGRAM ANALYSIS AND PROGRAM DECISION-MAKING….ONE OF THE MAJOR FEATURES OF THE PROGRAM STRUCTURE IS ITS INDENTIFICATION OF MAJOR AGENCY OBJECTIVES WITH THE COURSES OF ACTION SELECTED TO ACHIEVE THOSE OBJECTIVES…. THIS FEATURE SERVES TO RAISE SOME VERY BASIC MANAGEMENT QUESTIONS AS TO WHAT THE AGENCY IS TRYING TO ACHIEVE, AND WHAT MEASURES ARE BEING TAKEN TO ATTAIN THOSE OBJECTIVES. A PROGRAM STRUCTURED BY OBJECTIVES KEEPS AGENCY GOALS IN THE FOREFRONT IN ORDER TO GUIDE PROGRAM ANALYSIS AND MANAGEMENT DELIBERATIONS.
17. ORGANIZATIONAL OBJECTIVES OR GOALS MUST, FOR THE PURPOSES OF PPBS, BE DEFINED WITH SUFFICIENT PRECISION TO PERMIT THEIR ALIGNMENT WITH THE COURSES OF ACTION THAT DIRECTLY CONTRIBUTE TO THEIR ACHIEVEMENT. THE STRUCTURE PROVIDES THAT DIRECT LINKS BE ESTABLISHED BETWEEN GOALS AND THE MEANS FOR THEIR ACHIEVEMENT. GOALS DEFINITIONS THEREFORE MUST BE USEFUL IN AN OPERATIONAL SENSE. THEY MUST PROVIDE SUFFICIENTLY PRECISE GUIDANCE TO CONSIDER ALTERNATIVE COURSES OF ACTION.
18. THE WORD “FUND” IN GOVERNMENT HAS TAKEN SEVERAL MEANINGS OR CONNOTATIONS…. IT IS SOMETIMES USED TO REFER TO AS AN APPROPRIATION WHICH IS A LEGISLATIVE AUTHORIZATION TO SPEND AN ALLOTMENT WHICH IS AN AUTHORIZATION BY THE DEPARTMENT OF BUDGET AND MANAGEMENT(DBM) TO OBLIGATE, OR AS ACTUAL CASH AVAILABLE
19. ARTICILE VI , SECTION 29 OF THE PHILIPPINE CONSTITUTION SETS THE BASIC RULE FOR THE USE OF GOVERNMENT FUNDS…THE AFOREQUOTED PROVISION OF THE CONSTITUTION ALSO ESTABLISHES THE NEED FOR ALL GOVERNMENT ENTITIES TO UNDERGO THE BUDGETING PROCESS TO SECURE FUNDS FOR USE IN CARRYING OUT THEIR MANDATED FUNCTIONS, PROGRAMS AND ACTIVITIES.
20. FUNDS FOR THE USE OF THE GOVERNMENT ENTITIES ARE APPROPRIATED OR AUTHORIZED FOLLOWING A PROCESS WITH THE FIVE MAJOR STEPS….1. INDIVIDUAL AGENCIES PREPARE THEIR ESTIMATES OF EXPENDITURES OR PROPOSED BUDGETS FOR THE SUCCEEDING YEAR AND SUBMIT THESE ESTIMATES OR PROPOSALS CONTAINED IN REQUIRED BUDGET FORMS TO THE DBM FOLLOWING BASELINE FIGURES, GUIDELINES AND TIMETABLE EARLIER SET; (2) AGENCIES JUSTIFY DETAILS OF THEIR PROPOSED BUDGETS BEFORE DBM TECHNICAL REVIEW PANELS; (3) DBM REVIEWS AND CONSOLIDATES PROPOSED BUDGETS OF ALL AGENCIES FOR INCLUSION IN THE PRESIDENT’S PROPOSED BUDGET FOR SUBMISSION TO CONGRESS; (4) AGENCIES EXPLAIN THE DETAILS OF THEIR PROPOSED BUDGETS IN SEPARATE HEARINGS CALLED BY THE HOUSE OF REPRESENTATIVES AND THE SENATE FOR INCLUSION IN THE GENERAL APPROPRIATION BILL; AND (5) THE PRESIDENT SIGNS THE GENERAL APPROPRIATION BILL INTO LAW OR WHAT IS KNOWN AS THE GENERAL APPROPRIATIONS ACT (GAA)
21. IN GENERAL, A GOVERNMENT BUDGET IS THE FINANCIAL PLAN OF A GOVERNMENT FOR A GIVEN PERIOD, USUALLY FOR A FISCAL YEAR, WHICH SHOWS WHAT ITS RESOURCES ARE, AND HOW THEY WILL BE GENERATED AND USED OVER THE FISCAL PERIOD. THE BUDGET IS THE GOVERNMENT’S KEY INSTRUMENT FOR PROMOTING ITS SOCIO-ECONOMIC OBJECTIVES.
22. THE GOVERNMENT BUDGET ALSO REFERS TO THE INCOME, EXPENDITURES AND SOURCES OF BORROWINGS OF THE NATIONAL GOVERNMENT THAT ARE USED TO ACHIEVE NATIONAL OBJECTIVES, STRATEGIES, AND PROGRAMS.
23. THE NATIONAL GOVERNMENT BUDGET, ALSO KNOWN SIMPLY AS THE BUDGET RFERS TO THE TOTALITY OF THE BUDGETS OF VARIOUS DEPARTMENTS OF THE NATIONAL GOVERNMENT INCLUDING THE NATIONAL GOVERNMENT SUPPORT TO LOCAL GOVERNMENT UNITS (LGUs) AND GOVERNMENT OWNED AND CONTROLLED CORPORATIONS (GOCCs). IT IS WHAT THE NATIONAL GOVERNMENT PLANS TO SPEND FOR ITS PROGRAMS AND PROJECTS, AND THE SOURCES OF WHAT IT PROJECTS TO HAVE AS FUNDS, EITHER FROM REFENUES OR FROM BORROWINGS WITH WHICH TO FINANCE SUCH EXPENDITURES.
24. THE NATIONAL BUDGET IS ALLOCATED FOR THE IMPLEMENTATION OF VARIOUS GOVERNMENT PROGRAMS AND PROJECTS, THE OPERATION OF GOVERNMENT OFFICES, PAYMENT OF SALARIES OF GOVERNMENT EMPLOYEES, AND PAYMENT OF PUBLIC DEBTS. THESE EXPENDITURES ARE CLASSIFIED BY EXPENSE CLASS, SECTOR AND IMPLEMENTING NIT OF GOVERNMENT.
25. THE PREPARATION OF THE GOVERNMENT’S BUDGET EVERY YEAR IS IN ACCORDANCE WITH THE PROVISION OF THE CONSTITUTION WHICH REQUIRES THE PRESIDENT TO SUBMIT A BUDGET OF EXPENDITURE AND SOURCES OF FINANCING WITHIN 30 DAYS FROM THE OPENING OF EVERY REGULAR SESSION OF CONGRESS. THE YEARLY PREPARATION OF THE BUDGET IS ALSO IN CONSONANCE WITH THE PRINCIPLE WHICH REQUIRES ALL GOVERNMENT SPENDINGS TO BE JUSTIFIED ANEW EACH YEAR. THIS PRINCIPLE ENSURES THAT GOVERNMENT ENTITIES CONTINUOUSLY EVALUATE AND REVIEW THE ALLOCATION OF RESOURCES TO PROJECT/ACTIVITIES FOR COST EFFICIENCY AND EFFECTIVENESS
26. THE SOURCES OF APPROPRIATION S OF THE ANNUAL BUDGET ARE: 1) NEW GENERAL APPROPRIATIONS LEGISLATED BY CONGRESS FOR EVERY BUDGET YEAR UNDER THE GAA; AND 2) EXISTING APPROPRIATIONS PREVIOUSLY AUTHORIZED BY CONGRESS. UNDER THE CONSTITUTION, ARTICLE VI SECTION 29, NO MONEY CAN BE WITHDRAWN FROM THE TREASURY EXCEPT IN PURSUANCE OF AN APPROPRIATION MADE BY LAW
27. EXISTING OR CONTINUING APPROPRIATIONS ARE THOSE WHICH HAVE BEEN PREVIOUSLY ENACTED BY CONGRESS AND WHICH CONTINUE TO REMAIN VALID AS AN APPROPRIATION AUTHORITY FOR THE EXPENDITURE OF PUBLIC FUNDS.
28. CONTINUING APPROPRIATIONS REFER TO APPROPRIATIONS AVAILABLE TO SUPPORT OBLIGATIONS FOR A SPECIFIED PURPOSE OR PROJECT, SUCH AS MULTI-YEAR CPNSTRUCTION PROJECTS WHICH REQUIRE THE INCURRENCE OF OBLIGATIONS EVEN BEYOND THE BUDGET YEAR. EXAMPLES: EXISTING LAWS SUCH AS R.A. 8150 OTHERWISE KNOWN AS THE PUBLIC WORKS ACT OF 1995; R.A. 6657 & 8532 WHICH SETS FUNDS SPECIFICALLY FOR THE AGRARIAN REFORM PROGRAM (ARP). CURRENTLY, APPROPRIATIONS FOR CAPITAL OUTLAYS AND MAINTENANCE AND OTHER OPERATING EXPENSES ARE CONSIDERED AS CONTINUING APPROPRIATIONS BUT ONLY FOR A PERIOD OF TWO (2) YEARS.
29. AUTOMATIC APPROPRIATIONS REFER TO APPROPRIATIONS PROGRAMMED ANNUALLY OR FOR SOME OTHER PERIOD PRESCRIBED BY LAW BY VIRTUE OF OUTSTANDING LEGISLATION WHICH DOES NOT REQUIRE PERIODIC ACTION BY CONGRESS. FALLING UNDER THIS CATEGORY ARE EXPENDITURES AUTHORIZED UNDER PD 1967, RA 4860 AND RA 660 AS AMENDED, FOR SERVICING OF DOMESTIC AND FOREIGN DEBTS. COMMONWEALTH ACT 186 AND RA 660; FOR THE RETIREMENT AND INSURANCE PREMIUMS OF GOVERNMENT EMPLOYEES, PD 1177 AND EO 292, FOR NET LENDING TO GOVERNMENT CORPORATIONS AND PD 1234 FOR VARIOUS SPECIAL ACCOUNTS AND FUNDS.
30. ONLY PROGRAMMED APPROPRIATIONS ARE SUPPORTED BY CORRESPONDING RESOURCES, THAT IS, THEY ALREADY HAVE DEFINITE DUNDING SOURCES AND ARE READILY IMPLEMENTABLE….UNPROGRAMMED APPROPRIATIONS ARE NOT YET SUPPORTED BY CORRESPONDING RESOURCES AND ARE NEVERTHELESS INCLUDED BY CONGRESS IN THE GENERAL APPRIATIONS ACT (GAA)… THESE ARE CALLED STANDBY APPROPRIATIONS WHICH AUTHORIZE ADDITIONAL AGENCY EXPENDITURES FOR PRIORITY PROGRAMS AND PROJECTS IN EXCESS OF THE ORIGINAL BUDGET ONLY BUT ONLY WHEN REVENUE COLLECTIONS EXCEED THE RESOURCE TARGETS ASSUMED IN THE BUDGET OR WHEN ADDITIONAL FOREIGN PROJECT LOAN PROCEEDS ARE REALIZED.
31. THE “ONE-FUND” CONCEPT IS THE POLICY ENCIATED THROUGH PRESIDENTIAL DECREE 1177 WHICH REQUIRES THA ALL INCOME AND REVENUES OF THE GOVERNMENT MUST ACCRUE TO THE GENERAL FUND AND THUS CAN BE FREEELY ALLOCATED TO FUND PROGRAMS AND PROJECTS OF GOVERNMENT AS PRIORITIZED.
32. THE “ONE-FUND” CONCEPT IS A FISCAL MANAGEMENT POLICY REQUITRING THAT AS MUCH AS POSSIBLE, ALL REVENUES AND OTHER RECEIPTS OF THE GOVERNMENT MUST ENTER THE GENERAL FUND AND THEIR UTILIZATION AND DISBURSEMENT SUBJECT TO THE BUDGETING PROCESS. THE ONE FUND CONCEPT IS SIGNIFICANT IN THAT IT SERVES AS AN AVENUE THROUGH WHICH FISCAL AUTHORITIES MAY PROPERLY ALLOCATE SCARCE GOVERNMENT RESOURCES IN ACCORDANCE WITH THE PRIOIRITIES IN THE OVER-ALL PROGRAM OF ECONOMIC DEVELOPMENT. IT LIKEWISE PROVIDES A MECHANISM TO CONTROL DRAWDOWNS ON POOLED REOSURCES. REGULARLY, THE LEVEL OF FUNDS DISBURSED ARE MONITORED AGAINST THE LEVEL OF REVENUES GENERATED. THIS WAY, WE ARE ABLE TO STICK TO THE TARGETED LEVEL OF DISBURSEMENT FOR A GIVEN PERIOD AND AVOID INCURRING A DEFICIT. IT ALSO ALERTS US OF POSSIBLE REVENUE SHORTFALLS.
33. IN THE CONTEXT OF GOVERNMENT BUDGETING, A BUDGET IS SAID TO BE BALANCED WHEN REVENUES MATCH EXPENDITURES OR DISBURSEMENTS. WHEN EXPENDITURES EXCEED REVENUES, THE GOVERNMENT INCURS A DEFICIT WHICH MAY RESULT IN THE FOLLOWING SITUATIONS : THE GOVERNMENT BORROWS MONEY EITHER FROM FOREIGN SOURCES OR FROM THE DOMESTIC CAPITAL MARKET WHICH INCREASES THE DEBT STOCK OF THE NATIONAL GOVERNMENT (NG) AND ITS DEBT SERVICING REQUIREMENTS; THE GOVERNMENT BORROWS MONEY FROM THE BANGKO SENTRAL NG PILIPINAS; OR THE GOVERNMENT WITHDRAWS FRUNDS FROM ITS CASH BALANCES IN THE TREASURY
34. HISTORICALLY, NATIONAL GOVERNMENT EXPENDITURES HAVE ALWAYS EXCEEDED TOTAL REVENUES RESULTING IN ANNUAL BUDGET DEFICITS. THUS, THE NATIONAL GOVERNMENT HAD TO RESORT TO BORROWINGS TO COVER THE SAID DEFICITS WHICH RESULTED IN BALLOONING FOREIGN AND DOMESTIC DEBTS. HOWEVER, IN 1994 THE GOVERNMENT BROKE THE DEFICIT TREND BY POSTING A BUDGET SURPLUS OF P 16BILLION THROUGH AN AGGRESSIVE PRIVATIZATION AND REVENUE GENERATION PROGRAM AND A PRUDENT EXPENDITURE PROGRAM. SINCE THEN, THE GOVERNMENT HAS BEEN EXERTING EFFORTS TO MAINTAIN THE SURPLUS BUDGET POLICY.
35. THE SURPLUS BUDGET POLICY IS IMPORTANT TO ENCOURAGE ECONOMIC GROWTH. THE LESS THE GOVERNMENT BORROW FROM THE PUBLIC, THE LESSER THE PRESSURE ON INTEREST AND INFLATION RATES, AND MORE FUNDS ARE MADE AVAILABLE IN THE FINANCIAL MARKET. SUCH FUNDS MAY BE USED BY BUSINESSMEN TO BUIOLD FACTORIES, HIRE WORKERS, BUY EQUIPMENT AND OPEN MORE EMPLOYMENT OPPORTUNITIES. BY KEEPING MORE FUNDS IN THE HANDS OF THE PRIVATE SECTOR RATHER THAN COMPETING FOR CREDIT, THE GOVERNMENT HELPS MAKE FINANCING AVAILABLE FOR FAMILIES WHO WANT TO OWN HOMES, BUY CARS OR SUPPORT THEIR CHILDREN’S EDUCATION.
36. THE GOVERNMENT ALSO NEEDS TO GENERATE A BUDGET SURPLUS TO REPAY THE HUGE DEBT IT HAS ACCUMULATED OVER THE YEARS. THE REDUCTION OF THE NATIONAL BUDGET DEBT WILL CORRESPONDINGLY LESSEN GOVERNMENT’S REQUIREMENTS FOR INTEREST AND PRINCIPAL PAYMENTS. THIS BECOMES IMPORTANT PARTICULARLY DURING PERIODS OF RISING INTEREST RATES AND UNSTABLE EXCHANGE RATES
37. TOTAL RESOURCE BUDGETING IS A CONCEPT ADOPTED BY THE PRESENT BUDGETING SYSTEM WHICH REQUIRES THE PREPARATION OF THE NATIONAL GOVERNMENT WITHIN THE FRAMEWORK OF THE TOTAL IMPACT OF AKLL GOVERNMENT ENTITIES ON THE NATIONAL ECONOMY. UNDER THIS CONCEPT, THE N.G. BUDGET IS CONSIDERED AS ONLY ONE COMPONENT OF THE ENTIRE PUBLIC SECTOR RESOURCES. GOCCs AND LGUs ARE ALSO CONSIDERED AS SUBSTANTIAL CONTRIBUTORS TO TOTAL PUBLIC RESOURCES. GOCCs AND LGUs ARE THEREFORE REQUIRED TO PREPARE THEIR BUDGET CONSISTENT IN FORM AND TIMING WITH THAT OF THE N.G. TO FACILITATE COMPREHENSIVE EVALUATION OF THE OVERALL BUDGET. IN TOTAL RESOURCE BUDGETING, THE ENERGIES AND CAPABILITIES OF ALL PUBLIC ENTITIES ARE HARNESSED IN DRAWING UP THE OPTIMAL PACKAGE OF GOODS AND SERVICES THAT CAN BE SUSTAINED BY AVAILABLE RESOURCES.
38. THE CPSFP REFERS TO THE NET DEFICIT OR SUPRLUS CALCULATED AFTER SUMMING-UP THE BUDGET BALANCES OF ALL GOVERNMENT ENTITIES, NAMELY THE NATIONAL GOVERNMENT, THE NON-FINANCIAL GOVERNMENT CORPORATIONS (USUALLY INCLUDES ONLY THE 14 MAJOR GOCCs) GFIs, LGUs, THE SOCIAL SECURITY INSTITUTIONS, OPSF, BSP, CENTRAL BANK-BOARD OF LIQUIDATORS.THROUGH CPSFP, THE GOVERNMENT IS ABLE TO ASSURE ITSELF THAT ALL PUBLIC RESOURCES ARE MOBILIZED AND USED IN MAGNITUDES THAT ARE CONSISTENT WITH OVERALL MACROECONOMIC TARGETS AND THE GOVERNMENT’S ECONOMIC PRIORITIES