Gov’t adopts new system in budget setting

The Department of Budget and Management has ordered agencies to align planning for their respective 2018 budget proposals with the new system that will shift focus from the individual agencies’ performance to specific programs and strategies across agencies.

“The proposed national budget, starting in fiscal year 2018 onwards, will also adopt a budget structure based on a program expenditure classification (PREXC). Recurring activities and projects, that contribute to a common particular organizational objective or outcome shall be grouped into a program under that outcome. The PREXC will replace major final outputs as the means of structuring the national budget,” Budget Secretary Benjamin E. Diokno said in National Budget Circular No. 569 issued on Feb. 8.

“This is being done to better articulate in the agency budget the programs and strategies being employed by the agency to achieve its organizational outcomes. The shift from the focus on agency outputs to programs or strategies provides a better handle in assessing agency performance and tradeoffs. More so, that performance information is provided for each program, revising the agency-wide approach under the organizational performance indicator framework,” Diokno explained.

For 2018, the government will pitch a record P3.84-trillion national budget, up 14.6 percent from the P3.35-trillion budget for this year, the Cabinet-level, interagency Development Budget Coordination Committee (DBCC) said in a report last December.

The proposed 2018 budget will represent 21.6 percent of the gross domestic product (GDP), according to the DBCC.

“A reform that the public can look forward to is what we call the Program Expenditure Classification or PREXC,” Diokno said.

To be implemented in 2018, the reform restructures the agencies’ budgets “to group all recurring activities and projects under appropriate programs or key strategies,” Diokno said last week.

“Likewise, performance targets will be set at the level of programs. This will be a departure from the status quo where funds are assigned at the level of agencies or major final outputs,” Diokno added. “With this impending budget structure, we will be able to clearly see and monitor where public funds are going and how they contribute to national development.”

In 2015, then Budget Secretary Florencio B. Abad announced the plan to implement PREXC this year.

Diokno said the Duterte administration “will not tolerate underspending,’ such that the government “will exert all effort to prevent it from happening again.”

He said he had estimated underspending of the previous administration to have hit about P1 trillion. He arrived at that amount by comparing the authorized appropriations with actual expenditures from 2011 to 2016. —BEN O. DE VERA