Econ 151, ppt, Sir Mesina, CAS-UPM

1. Development of Philippine Fiscal Policy

3. Definition of Concepts

4. Definition of Public Policy: - generally the principled guide to action taken by the administrative or executive branches of the state with regard to issues in a manner consistent with law and institutional customs.

5. Public Policy (Continued): - a system of courses of action, regulatory measures, laws and funding priorities promulgated by a governmental entity or its representatives.

6. Fiscal Policy : - a government policy with regard to its resource generation and spending activities.

7. Fiscal Consolidation: - a determined effort to bring down the budget deficit.

9. DOF Mandate

11. Two Major Fiscal Agencies: The Department of Finance (DOF) is responsible for the preparation of the annual and medium-term revenue program of the government . The Department of Budget and Management (DBM) manages the expenditures side.

12. The Fiscal Accounts

17. 2012 NG Fiscal Program 17 In Billion Pesos 2010 2011 2012 Growth Rate Actual Program Program (2012/2011) Total Revenues % of GDP 1,207.9 13.4% 1,411.3 14.2% 1,568.5 14.2% 11.1% Tax Revenues % of GDP 1,093.6 12.1% 1,273.2 12.8% 1,445.5 13.1% 13.5% BIR BOC Other Offices 822.6 259.2 11.8 940.0 320.0 13.2 1,066.1 365.1 14.2 13.4% 14.1% 7.6% Non-Tax Revenues % of GDP 114.3 1.3% 138.1 1.4% 123.0 1.1% -10.9% BTr Income Fees and Charges Privatization Grants 54.3 58.6 0.9 0.4 70.0 62.1 6.0 0.0 51.8 69.3 2.0 0.0 -26.0% 11.6% -66.7% Expenditure 1,522.4 1,711.3 1,854.5 8.4% Surplus / (Deficit) % of GDP (314.4) -3.5% (300.0) -3.0% (286.0) -2.6% -4.7%

18. Consolidated Public Sector Financial Position In Billion Pesos 2010 Actual 2011 Program 2012 Program Growth Rate (2012/2011) Total Surplus/(Deficit) % of GDP (362.8) -4.0% (241.4) -2.6% (234.0) -2.1% -3.1% NG (314.5) (300.0) (286.0) -4.7% CB Restructuring (7.7) (6.1) (6.1) -0.2% 14 MNFGCs (71.0) (42.0) (28.0) -33.3% SSIs 39.3 39.2 30.9 -21.2% BSP (63.7) 1.0 1.0 0.0% GFIs 7.9 11.2 11.6 3.5% LGUs 33.5 36.9 40.3 9.2% Adjustments 13.3 18.4 2.4 -87.1%

19. Consolidated Public Sector Financial Position % of GDP Program Program P Billion -2.6

20. NG Outstanding Debt P Billion % of GDP Actual Jan-Apr Program Program … will decrease to 50.2% of GDP 50.2 50.9 5,053.4 Sovereign Credit Ratings: MOODY’S: Upgraded to Ba2 (June 15, 2011) FITCH: Upgraded to BB+ (June 23, 2011) S&P: Upgraded to BB (November 12, 2010)

21. NG Financing Program Actual Jan-May Program Program ..increasingly focus more on domestic sources

22. Reform and Advocacy Agenda

25. The Budget Cycle

27. Budget Cycle Budget Preparation Budget Accountability Budget Execution Budget Legislation

28. Allocation by Sector, 2008-2010 (In billion pesos)

29. Role of the Private Sector

31. Thank you…

32. Development of Philippine FiscalPolicy By RICARDO P. TOQUERO Fiscal Policy and Planning Office DEPARTMENT OF FINANCE Manila A presentation for UNIVERSITY OF THE PHILIPPINES mANILA August 3, 2011