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Department of Budget and Management

Republic of the Philippines
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Produced by the Philippine Department of Budget and Management (DBM)
September 2014
All rights reserved.
To ensure that this publication is widely accessible, the DBM highly encourages the
reproduction, copying, printing, and/or dissemination of this publication or its parts
thereof as long as such acts are exclusively for personal and non-commercial use and
with proper acknowledgment of the DBM as source, unless otherwise stated in the
publication (e.g., information from other non-government sources).
Users are restricted from reselling and/or creating derivative works or other uses for
commercial purposes without the express written consent of the DBM. While users
are free and welcome to reproduce and redistribute this publication or parts thereof
for non-commercial use, they must do so in a way that does not suggest that the
DBM endorses the user or its use. The DBM shall exercise any and all legal remedies
available in case of violation of any of the foregoing restrictions.
PRODUCTION TEAM:
Office of the Secretary
Training and Information Service
Fiscal Planning Bureau
Budget Technical Service
OVERALL EDITING:
Katherine Jimenez
DESIGN AND LAYOUT:
Dan Matutina
INFORMATION FROM:
Budget and Management Bureaus A, B, C, D, E, F, and G
Office of the Chief Information Officer
Public Financial Management PMO
ADVISERS:
Undersecretary Laura B. Pascua
Assistant Secretary Clare G. Amador
For inquiries, request for copies, and other information, comments, and suggestions,
and email publicinfo@dbm.gov.ph
2015 PEOPLES PROPOSED BUDGET
3
The management of public funds has drastically changed since 2010. Process-wise,
leakages have been plugged in the planning and execution of the budget, enabling
the faster implementation of government programs. At the same time, budget
prioritization has been strengthened further as the Aquino Administration adapts to
the challenges faced by the nation.
These challenges have made a historic impact on the people, but they have also
provided a perfect opportunity for governance.
The challenges of last year helped the DBM redefine its role in governance. The
mobilization of public resources for disaster response motivated us to tighten our
priorities further. The anger of the people over the alleged misuse of funds pushed us
to strive harder to ensure each peso is rightfully allocated and utilized.
Behind the challenges we faced is an opportunity. The spark behind the rage
deepened the interest of the people in the way public funds are used. The DBM sees
this as an opportunity to bring the budget process closer to the people and to open
avenues for citizen engagement.
This is what the 2015 Peoples Proposed Budget is all about. Since 2011, the DBM has
been producing publications like this to enhance transparency and accountability
by giving citizens a tool to understand the budget in the simplest way possible. This
publication summarizes the governments plan in its pursuit of inclusive development.
Take time to understand our budget and how the government will ensure no one is left
behind. Review what has been committed and what will be committed. Get involved
in good governance. Makialam sa Budget ng Bayan.
FOREWORD
Florencio Butch Abad
SECRETARY OF BUDGET AND MANAGEMENT
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TABLE OF CONTENTS
A Budget for Inclusive and Sustained Development 7
Overview of the 2015 Proposed Budget 10
By Sector 11
By Region 12
By Expense Class 13
Top 10 Executive Departments 14
By Department and Special Purpose Funds 15
Financing the 2015 Expenditure Plan 17
Expenditure Priorities 19
Social Protection and Social Services 22
Economic Expansion and Job Generation 29
Climate Change Adaptation and Mitigation 40
Just and Lasting Peace and the Rule of Law 44
Good Governance and Anti-Corruption 48
Aquino Budget Reform Agenda 52
Glossary of Frequently-Used Budgeting Terms 58
6
7
Papalapit na po talaga tayo sa minimithi
nating kinabukasan, kung saan naghahari
ang katarungan, at tunay pong walang
maiiwan. Ito ang resulta ng reporma, at ito
ang ipinaglalaban natin, at patuloy pang
ipinaglalaban: hindi ang pagpapanatili ng
nakasanayan, kundi ang pagbabago ng
sistema para makinabang ang lahat.
Today, the Philippines continues to move forward towards
lasting change.
Since the Aquino Administration assumed office, the country
has achieved unprecedented feats: robust economic growth,
second only to China in Asia; investment-grade credit ratings;
improved competitiveness rankings and the newfound
confidence by the investing public on the Philippines; the
enactment of difficult yet necessary reform measures, such
as the Sin Tax Reform Law and the Reproductive Health Act;
and the signing of the Comprehensive Agreement on the
Bangsamoro (CAB) with the Moro Islamic Liberation Front
(MILF); among others.
All of these achievements were due to the people themselves
A Budget for Inclusive and
Sustained Development
President Benigno S. Aquino III,
FIFTH STATE OF THE NATION ADDRESS
THE PROPOSED
NATIONAL BUDGET
FOR 2015
8
2015 Budget: Key Features and Reforms
This proposed Budgeta 15.1-percent increase over the 2014
Budget, and equivalent to 18.4 percent of gross domestic
product (GDP)enables the government to expand its
investments for inclusive growth. Beyond merely increasing
the Budget per se, the Aquino Administration also intensified
the focus of public spending on social and economic services,
which now take up a total of 64 percent of the 2015 Budget,
from just 45.3 percent in 2005.
This Budget supports further economic expansion.
This proposed Budget prioritizes programs and projects that
support the creation of more job and livelihood opportunities
and invest in the peoples ability to participate in the economy.
Through the Budget Priorities Framework that guided
the crafting of this proposed expenditure plan for 2015,
departments and agencies prioritized the following (for more
information, please see page 20):
It focuses on the imperatives of
inclusive development.
because they chose not to let the status quo prevail, instead
they chose to embark with the government on a challenging yet
unrelenting quest for reform. As President Aquino said, Kayo
ang gumawa ng pagbabago.
As the Philippines moves forward into a new path of
prosperity, two major challenges need to be addressed. First,
the remarkable economic growth must translate into real and
tangible benefits for the people, especially the poor. So far,
poverty incidence has been reduced to 24.9 percent of Filipinos
in the first semester of 2013, from 27.9 percent and 28.6
percent in the same period of 2012 and 2009, respectively.
These only show that the governments interventions
have been effective in reducing poverty, but these must be
intensified to achieve inclusive and sustained development.
Second, the governance reforms so far introduced by the
Aquino Administration need to be sustained, intensified, and
made irreversible. Budget reforms, in particular, need to be
deepened to ensure that each government peso spent makes
an impact in the long term. The public clamor to hold those
who misused the Priority Development Assistance Fund
(PDAF) in the past accountable, along with their increased
demand for a greater voice and vote over how their taxes are
spent, only emphasizes the need to further transform the
Philippine budgeting system. After all, good governance
especially in the way the government allocates and spends
public fundsis a necessary foundation for inclusive
development.
The P2.606-trillion National Budget proposed for 2015 provides
the government with the tools to face these challenges. It
was crafted around the idea that no one, especially the poor
and vulnerable, should be left behind. It also supports the
governments bid to install lasting and irreversible reforms in
public institutions.
Accelerate poverty reduction by expanding key
social protection and social services
Manage climate risks and build back better the
communities ravaged by disasters
Sustain economic expansion and facilitate the
creation of more jobs
Establish an enabling environment of lasting peace
and the rule of law, and of good governance
9
Through the Performance-Informed
Budgeting (PIB) approach that began
last year, the National Budget now
includes not only the financial allocations
but also the performance targets of
each government agency. The Aquino
Administration took this reform to
a higher level: the 2015 Budget now
includes indicators on outcomesnot
only the targeted services that agencies
must deliver but also the targeted results
of such services.
This Budget sustains reforms that enable
the government to spend and to deliver
services in a prompt manner. These
While spending on social and economic
development priorities must increase,
the government commits to keep within
its means. With this, the 2015 Budget
keeps the fiscal deficit to 2 percent
of GDP, and seeks to reduce the debt
stock to 45.6 percent by 2015 from
52.4 percent in 2010. These goals will
be achieved through reforms to plug
revenue collection leakages and improve
debt management.
This Budget seeks to leave no region,
province, or community behind. Through
the Budget Priorities Framework,
departments and agencies were tasked
to prioritize the 44 poorest and most
vulnerable provinces and to tailor-fit
interventions according to their specific
needs (for more information, see page 21):
This Budget seeks to further deepen
transparency and citizens engagement
in the governments financial affairs. For
instance, the Grassroots Participatory
Budgeting Process was expanded to
cover 1,590 cities and municipalities,
It increases the peoples voice in
the use of their taxes.
It increases governments
accountability for the results of
public spending.
It supports the rapid and efective
delivery of public services.
It enhances the health of the
governments fnances.
It prioritizes the needs of poor and
vulnerable localities.
Provinces with high
poverty magnitude
Provinces with high
poverty incidence
Provinces that are most
vulnerable to shocks and
disasters
from 595 cities and municipalities when
it was first rolled out. The expanded
process resulted in P20.9 billion in
locally-developed projects incorporated
in the 2015 Budget, from only P8.4 billion
in the 2013 Budget.
include the General Appropriations Act
(GAA)-as-Release Document policy,
which de-clogs the process of releasing
budgets to agencies, and the One-Year
Validity of Appropriations, which
encourages agencies to utilize their
budgets as early as possible. This Budget
also clarifies the Definition and Use
of Savings and Augmentation to fast
track the use of public funds to deliver
services.
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The 2015 Proposed
National Budget:
P2.606 trillion
The proposed Budget for 2015 is 15.1 percent higher than
the 2014 GAA. Net of interest payments, the proposed
Budget will increase by a faster rate of 16.9 percent
year-on-year. The total proposed Budget is 18.4 percent
of gross domestic product (GDP), higher than the 17.7
percent of GDP in 2014.
The National Budget shows the estimation of government
revenues and expenses for pursuing programs and projects
based on its economic growth and human development thrusts.
It serves as an instrument for good governance because
agencies, through their respective budgets, are accountable for
delivering measurable results.
2005 2007 2009 2011 2013 2015
Proposed
2006 2008 2010 2012 2014
Adjusted
1
Composed of the DBM as chair, the Department of Finance (DOF),
the National Economic Development Authority, and the Office of
the President as members, and the Bangko Sentral ng Pilipinas as
resource agency
How is the Budget crafted and approved?
1. Agencies craft their proposed budgets using
budget parameters set by the Department
of Budget and Management (DBM) and the
Development Budget Coordinating Committee
1
.
2. The DBM reviews and consolidates the agencies
budgets into the proposed National Budget and
presents it to the President and the Cabinet for
approval.
3. Upon approval, the proposed National Budget
becomes the National Expenditure Program (NEP).
The President submits the NEP to Congress.
4. Congress reviews the NEP, holds public hearings,
effects changes, and approves the NEP. The
President then signs it into the GAA.
5. Throughout the above processes, citizens are
informed and involved.
Total Obligation Budget
Total Budget Less Debt Burden
1
% Growth Rate
OVERVIEW OF THE 2015 BUDGET
646.04
734.60
13.7%
877.96
19.5%
1,028.00
17.1%
1,150.22
11.9%
947.55
1,044.83
10.3%
1,155.51
10.6%
1,314.61
13.8%
1,434.15
9.1%
1,169.48
1.7%
1,472.98
2.7%
1,298.97
9.7%
1,488.76
16.0%
1,658.32
11.4%
2,206.64
16.9%
1,887.03
13.8%
1,580.02
7.3%
1,828.98
15.8%
1,998.98
9.3%
2,606.00
15.1%
2,264.63
13.3%
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Social Services will receive the
highest share of the budget to
realize the Administrations
commitment toward prosperity
for all. Thus, P37 in every
P100equivalent to P967.9
billionwill be allocated
for social services, such as
education, healthcare, housing,
social welfare, employment,
and other social protection
programs. The budget for
social services has increased
by 15 percent compared with
the 2014 budget.
Interest Payments
Net Lending
General Public Services
Defense Social Services
P372.9 B 14.3%
P26.5 B 1.0%
P423.1 B 16.2%
P115.5 B 4.4% P967.9 B 37.1%
Economic Services will be
allocated P700.2 billion to
support the countrys high
economic growth trajectory.
Services that fund agriculture,
transport infrastructure,
tourism, and other economic
services will receive 26.9
percent of the budget. The
budget for economic services
has increased by 18.1 percent
from P593.1 billion in 2014.
General Public Services
ensure sound fiscal
management, strong
foreign affairs, and efficient
lawmaking, among others.
This sector will receive 16.2
percent of the budget, which
has increased by 16.7 percent
from the P362.6 billion budget
in 2014.
Defense spending will be
at P115.5 billion to ensure
the security reforms and
modernization of the armed
forces. This sector has the
highest year-on-year growth
increase at 29 percent from
P89.5 billion in 2014.
Debt Burden spending will
have a lower share of the total
budget in 2015, from 15.6
percent of the total budget
in 2014 to 14.3 percent.
The government will spend
P399.4 billion to pay interest
payments on the national
governments domestic
and foreign debt as well as
net lending to government
corporations for debts
guaranteed by the national
government.
THE PROPOSED BUDGET BY SECTOR
Economic Services
P700.2 B 26.9%
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Of the proposed 2015 Budget, 55.2
percent or P1.438 trillion will be allocated
for distribution to the regions
2
.
2
With the implementation of the Unified Account Code
Structure, the breakdown of the Budget by region is
computed based on the location of the implementing
units, not necessarily the location where programs and
projects will be implemented.
THE PROPOSED BUDGET BY REGION
NCR
REGION IX
REGION I
P 404,667,806
P 52,482,847
P 61,006,486
REGION II
REGION III
CARAGA
REGION V
REGION XI
P 50,080,747
P 114,466,360
P 42,220,056
P 74,425,861
P 54,235,331
REGION IV A
REGION IV B
REGION VI
REGION XII
ARMM
REGION X
REGION VII
REGION VIII
P 111,780,209
P 45,994,324
P 85,574,450
P 52,716,181
P 49,954,969
P 61,859,880
P 74,103,846
P 69,425,746
CAR
P 33,127,533
Luzon 490.9
Visayas 229.1
Mindanao
TOTAL
313.5
Non-Regionalized Budget 1,167.9
Nationwide 671.5
Central Office 496.3
2,606.0
The Budget by Region (in P billions)
Regionalized Budget 1,438.1
NCR 404.7
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THE PROPOSED BUDGET BY EXPENSE CLASS
Infrastructure and other
Capital Outlays are
expenditures for roads,
bridges, airports, and other
similar capital goods.
Infrastructure spending,
estimated at P506.4 billion.
Debt Servicing-Interest
Payments will receive a lower
share of the total budget in
2015. The budget will allocate
P372.9 billion for interest
payments. This allocation
is 14.3 percent of the 2015
Budget, from 15.6 percent in
2014.
Maintenance and Other
Operating Expenditures or
MOOE are outlays for the
purchase of goods and services
(e.g., supplies, maintenance,
utilities, and professional
services) that are needed for
the regular operations and
program implementation of the
government. MOOE spending
will be at P432.6 billion or 16.6
percent of the Budget.
CURRENT OPERATING EXPENSES 1,965.9 75.4
Personnel Services 761.7 29.2
MOOE 432.6 16.6
Subsidy 61.3 2.4
Allotment to LGUs 311.9 12.0
Interest Payments 372.9 14.3
Tax Expenditure Fund 25.5 1.0
CAPITAL OUTLAYS 613.6 23.5
Infra. and Other CO 506.4 19.4
Equity 1.4 0.1
Capital Transfers to LGUs 105.9 4.1
NET LENDING 26.5 1.0
Total 2,606.0 100.00
PARTICULARS 2015 Levels (Proposed) % Share
The Budget by Region (in P billions)
Budgetary Support to
Government-Owned or
-Controlled Corporations or
GOCCs includes subsidies
for GOCC operations, equity
infusion, and net lending
to advance the payment
of national government-
guaranteed debts of GOCCs.
Total budgetary support to
GOCCs in 2015 will amount
to P89.2 billion, an increase
of 23.5 percent over the 2014
allocation.
Personnel Services are
expenses for salaries, wages,
and other compensation
of permanent, temporary,
contractual, and casual
employees of the government.
The 2015 Budget will allocate
29.2 percent for the payment
of government personnel.
Allocations for Local
Government Units or LGUs
represent the Internal Revenue
Allotment and other legally
mandated shares in national
revenues and capital transfers.
For 2015, a total of 371.1 billion
will be allocated to LGUs,
including capital transfers.
14
Department of
Education
1
Department of
National Defense
3
Department of
Social Welfare and
Development
4
Department of
Agriculture
5
Department of
Environment and
Natural Resources
3
P 365.1 B
P 144.0 B
P 109.0 B
P 88.9 B
P 21.3 B
17.9 %
30.7 %
11.1 %
11.0 %
6
1
3
5
7
9
TOP 10 EXECUTIVE DEPARTMENTS
These 10 departments of the
executive branch have the largest
budgetary allocations to support
the delivery of crucial programs and
projects for inclusive development.
16.9 %
Department of Public
Works and Highways
2
Department of Interior
and Local Government
3
Department of Health
2, 4
Department of
Transportation and
Communications
2, 4
Department of Science
and Technology
4
P 300.5 B
P 141.4 B
P 102.2 B
P 59.0 B
P 19.4 B
36.7 %
12.6 %
20.9 %
47.7 %
2
4
6
8
10
3.9 %
Notes:
The figures indicated here are the all-in budgets of
these agencies: their agency-specific budgets plus
allocations from the following special purpose funds:
1
Inclusive of School Building Program and transfers
from MPBF
2
Inclusive of budgetary support to attached
corporations
3
Inclusive of transfers from MPBF and PGF
4
Inclusive of transfers from MPBF
5
Inclusive of budgetary support to attached
corporations and budgetary support to NFA, PCA, FPA,
and NIA
6
The reduction is due to DENRs lower PS requirements
because of completed rationalization program, and
lower requirements for cadastral survey and geo-hazard
mapping activities
Allocations for Constitutional Offices Other Notable Allocations
P 20.3 B P 46.4 B
P 26.7 B
P 11.1 B
P 16.9 B
P 8.2 B
4.9 % 14.4 %
30.1 %
0.2 %
487.1 %
3.1 %
The Judiciary State
Universities
and Colleges
Autonomous
Region for
Muslim
Mindanao
Congress
(House and
Senate)
Commission
on Elections
Commission
on Audit
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COMPOSITION OF THE
PROPOSED NATIONAL BUDGET
The 2015 National Expenditure Program of P2.606 trillion
is composed of P1.740 trillion in programmed new general
appropriations being proposed to Congress for approval, and
P866.2 billion in automatic appropriations already authorized
by a standing law. Programmed new general appropriations are
further broken down into P1.361 trillion for departments and
agencies and P378.6 billion for Special Purpose Funds.
Programmed New General Appropriations 1,740
Departments and Agencies 1,361
Special Purpose Funds 61.3
Automatic Appropriations 866
Total 2,606.0
IN BILLION PESOS 2015
Disaggregated SPFs 330.5
Budgetary Support to
Government Corporations
61.3
Allocations to LGUs (MMDA) 2.0
E-Government Fund 1.0
International Commitments Fund 7.4
Miscellaneous Personnel Benefits Fund 118.1
Pension and Gratuity Fund 140.6
Lump-Sum SPFs 48.1
National Disaster Risk Reduction and
Management Fund
14.0
Contingent Fund 2.0
Rehabilitation and Reconstruction Program 1.0
Allocations to LGUs (Special Shares, etc.) 31.1
Special Purpose Funds 378.6
IN BILLION PESOS 2015
These are called programmed appropriations as these
are supported by projected revenues from existing sources
identified by the Executive in the Budget of Expenditures
and Sources of Financing (BESF) that it submits annually
to Congress in line with the Constitution (see page 17-18 on
Financing the Proposed Budget).
SPFs are items in the National Budget allocated for a
specific purpose. They are usually lump sums in nature
because recipient departments only identify the specific
programs and projects during the budget execution.
They are released to agencies after conditions have been
complied with.
What are SPFs?
assistance to government-owned or controlled corporations
(GOCCs) in the form of subsidies for the GOCCs operations
and for the implementation of key programs and projects, as
well as equity infusion. The National Expenditure Program
details the specic GOCCs and the programs and projects to be
funded, with accompanying performance indicators.
supports governments commitments to international
organizations, such as membership contributions (e.g. United
Nations, Open Government Partnership) and the hosting of
international conferences.
Budgetary Support to Government Corporations
DISAGGREGATED SPFS
for the implementation of strategic Information and
Communications Technology projects that enhance
transparency, accountability, and efficiency in the government.
Mechanism to access this fund can be found in Joint
Memorandum Circular 2012-01.
E-Government Fund
International Commitments Fund
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subsidy for local government units (LGUs) corresponding
to their legal shares in national revenue collections, such as
tobacco excise taxes. This fund also includes the agency budget
of the Metropolitan Manila Development Authority, amounting
to almost P2 billion.
For interest payments that the national government incurs from
foreign and domestic borrowings.
For the share of the national government in the premium
payments to the Government Service Insurance System (GSIS),
for the life insurance and retirement benefits of government
employees.
Advances by the national government for the servicing of
government guaranteed corporate debt during the year, net
of repayments on such advances. Includes loans outlays or
proceeds from program loans re-lent to GOCCs.
for responding to natural calamities, epidemics, crises resulting
from armed conicts, and other catastrophes. Releases may
only be made upon recommendation of the National Disaster
Risk Reduction and Management Council (NDRRMC) and the
approval of the President. This fund also covers the Peoples
Survival Fund (P1 billion).
for requirements of new or urgent projects and activities that
need to be implemented during the year. All releases require
the Presidents prior approval.
Allocation to LGUs Debt Service-Interest Payments
Retirement and Life Insurance Premiums
Net Lending
This represents the 40 percent share of LGUs from national
internal revenue taxes, as mandated by the Local Government
Code.
Internal Revenue Allotment
National Disaster Risk Reduction and
Management fund
Contingent fund
covers the governments program to rehabilitate calamity-
afflicted areas and ensures resilience of these areas to
withstand future calamities.
Rehabilitation and Reconstruction Program
for personnel-related expenditures, including provisions for
lling up authorized positions and for creating new positions,
such as teachers and uniformed personnel.
Miscellaneous Personnel Benefts Fund
covers (a) pensions of police, military, and other uniformed
personnel, and (b) retirement and terminal leave benets,
separation benets and incentives, and monetization of leave
credits of government employees who are retiring.
Pension and Gratuity Fund
DISAGGREGATED SPFS
Automatic Appropriations are authorizations made by
law or other legislative enactment directing payment
out of government funds under specific conditions and
purposes. Unlike new general appropriations, which are
submitted annually to Congress for approval, these do
not require periodic action from the legislative branch.
For 2015, a total of P866.2 billion will be allocated for
automatic appropriations.
Automatic Appropriations
Internal Revenue Allotment 398.9 B
Debt Service-Interest Payments 372.9 B
Retirement and Life Insurance Premiums 30.1 B
Net Lending 26.5 B
Grant Proceeds 141 M
Tax Expenditure Fund 25.5 B
Special Accounts in the General Fund 21.2 B
Pension of Ex-Presidents and their Wives 331,000 M
AUTOMATIC APPROPRIATIONS 2015
17
Non-repayable transfers received from foreign entities (e.g.
foreign governments, multilateral organizations, etc.) given for
particular projects or programs, or for general budget support.
Covers subsidies given to agencies, GOCCs, and LGUs in lieu
of actual payment of taxes and customs duties. This fund does
not involve actual cash disbursements.
A fund whereby proceeds of specific revenue measures and
grants earmarked by law for specific priority projects are
recorded.
For the pension of former presidents and their spouses at the
end of their incumbency, as mandated by RA No. 5059 and EO
No. 145.
Grant Proceeds
Tax Expenditure Fund
Special Accounts in the General Fund
Pension of Ex-Presidents and Wives
For 2015, a total of P123.1 billion in unprogrammed
appropriations is being proposed. Because this is a standby
fund, this is not included in the computation of the total
Budget: thus, the P2.606 trillion proposed Budget for 2015
does not include the proposed amount for unprogrammed
appropriations.
Windfall Revenues come from:
Excess revenue collections from any non-tax revenue
source
New revenue sources not originally considered in the
BESF
Loan proceeds from newly-approved loans for foreign-
assisted projects
The National Expenditure Plan submitted for the
approval of Congress also includes unprogrammed
appropriations. Unlike programmed appropriations,
unprogrammed or standby appropriations can only be
used when there are windfall revenues in excess of the
governments revenue program for the year as reflected
in the BESF.
Unprogrammed Appropriations
Budgetary Support to Government
Corporations
5.1
Support to Forign Assisted Projects 3.1
Support for Infrastructure Projects and Social
Programs
20.0
AFP Modernization Program 10.0
Risk Managaement Program 30.0
General Fund Adjustments, including ARMM
share
1.0
Equity value buy-out of the MRT 53.9
Total 123.1
IN BILLION PESOS 2015
18
The expected GDP growth of 6.5 to 7.5 percent for 2014 will provide the impetus for the Philippine economy to post
a 7.0 to 8.0 percent growth in 2015 and a 7.5 to 8.5 percent growth toward 2016. The Aquino Administration remains
confident in reaching this goal, as the countrys GDP grew by an outstanding 7.2 percent in 2013, even with the impact
of Super Typhoon Yolanda. Drivers of growth for fiscal year 2015 include new investments, the resurgence of the
manufacturing sector, a buoyant international and domestic tourism, stronger exports, and improved external trade
conditions.
The 364-day T-bill Rate refers to the benchmark interest
rate on Treasury Bills issued by the national government to
generate funds. An increase in the rate will raise government
revenues due to taxes on interest income; however, it also
increases the government debt burden because of additional
requirements for interest payments.
The Foreign Exchange Rate refers to the rate at which
the Philippine Peso is exchanged for another currency, more
commonly with the US Dollar. Any change in the ForEx rate
correspondingly changes the Peso cost of expenditures paid
in US Dollars, most notably foreign debt payments, interest
payments, and revenue collection, through higher customs tariff.
GDP Growth Rate refers to the growth of the domestic
economy, as adjusted for inflation. It can affect government
revenues: higher GDP generally results in a larger tax base and
higher revenue collections domestically.
Inflation Rate is the increase in the price of goods and
services. It affects revenues: higher inflation means higher
prices of taxable products. The inflation rate is also a
benchmark for possible increases in the government agencies
expenditures resulting from higher cost requirements.
FINANCING THE
2015 PROPOSED BUDGET
Macroeconomic Assumptions
2010 2011 2012 2013 2014
Adjusted
2015
Proposed
2010
45.11
2011
43.30
2014
Adjusted
42.0-45.0
2015
Proposed
42.0-45.0
2012
42.25
2013
42.45
2010
4.3
2011
2.4
2012
2.0
2013
0.7
2014
Adjusted
1.5-4.0
2014
Proposed
2.0-4.0
3.7
7.2
7.5
8.0
7.0
6.5
3.9
4.6
3.2
3.0
5.0
4.0
2.0
3.0
7.6
6.8
GDP Growth
Rate
Inflation Rate
19
283.7
2.0%
of GDP
The government seeks to sustain a manageable deficit
level equivalent to 2 percent of GDP, or P283.7 billion.
This enables the government to spend within its means
while increasing investments on priority programs and
projects. To achieve this, reforms to increase revenues
and improve debt management are being pursued.
Macroeconomic Assumptions
3
2011 to 2013 are actual figures.
4
Programmed
5
Estimated Program per National Budget Memorandum 119
1,522.4
1,777.8
2,284.3
1,880.2
2,662.6
1,557.7
242.8
2.3%
of GDP
266.2
2.0%
of GDP
1,207.9
1,359.9
1,716.1
2,337.3
2010
2012
2014
2011
2013
2015
FISCAL PERFORMANCE (in Billion Pesos)
Revenue
Disbursement
Deficit
197.7
2.0%
of GDP
164.1
1.4%
of GDP
1,534.9
2,018.1
314.5
3.5%
of GDP
20
21
EXPENDITURE
PRIORITIES
Since it assumed office in 2010, the Aquino
Administration has been reshaping government budget
priorities to support inclusive development. This 2015
Proposed Budget invests in the countrys greatest
resourcethe peoplenot only by allocating more
resources into priority social and economic programs
but also by ensuring that government interventions are
tailor-fitted to the specific needs of the poorest and most
vulnerable localities.
22
The 2015 Proposed Budget seeks to focus limited government resources
on providing adequate and well-targeted social protection and basic social
services to the people, especially the poor and vulnerable. The Budget also
aims to facilitate the development of key industries that create more jobs and
livelihood opportunities.
In crafting the 2015 Proposed
Budget, departments and agencies
were tasked to prioritize the 44
poorest and most vulnerable
provinces and to tailor-fit programs
and service delivery strategies
according to their needs.
Priority Programs Geographic Focus Areas
This Proposed Budget seeks to reduce
poverty incidence to 16 percent as
part of the Millennium Development
Goals (MDGs) by expanding key social
protection and social services, such as
universal healthcare, education, and
socialized housing.
These are provinces where great
economic opportunities are abundant
but cannot be accessed by the
poor. Aside from creating more job
opportunities in these areas, we will also
connect their growth centers to areas
that are lagging behind. Certainly, we
will invest in capacitating their people to
co-create wealth.
These are smaller, less-populated, and
oftentimes remote areas that have been
disconnected from growth opportunities.
As we ensure adequate social safety
nets in these provinces, we will unlock
the employment generation potential of
sectors such as tourism and agriculture.
We will also invest in infrastructure
projects that not only create jobs for
locals but also connect these areas to
markets more efficiently.
The earthquake that shook Central
Visayas and Super Typhoon Yolanda
that hit late last year taught us a painful
lessonour people can slide into deeper
poverty when calamity strikes. Bold
steps will be taken to protect the 28
provinces most vulnerable to climate
hazards. As we rebuild these disaster-
devastated areas, we will redevelop
or resettle communities located
in vulnerable areas, diversify their
sources of income, and undertake the
necessary actions to climate-proof these
communities.
This Proposed Budget aims to sustain
the countrys robust economic
performance and create more jobs
by investing in strategic transport
infrastructure, bolstering agricultural
productivity, reviving the manufacturing
sector, and maximizing the tourism
sector.
Social Protection and
Social Services
Provinces with
high poverty magnitude
Provinces with
high poverty incidence
Provinces with high vulnerability
to shocks and disasters
Economic Expansion and
Job Generation
This Proposed Budget seeks to
manage disaster risks by investing
in a countrywide climate change
adaptation and risk resiliency program.
The Proposed Budget is also aimed at
building back better the communities
ravaged by recent calamities
by bolstering rehabilitation and
reconstruction efforts.
Climate Change and
Disaster Risk Reduction
Underlying all these programs is the
need to establish an environment of
peace and the rule of law as well as
of good governance. The 2015 Budget
sustains government policies and
investments in achieving such goals.
Enabling Environment for
Inclusive Development
23
LIST OF PROVINCES:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
Ilocos Norte
Ilocos Sur
Pangasinan
Abra
Apayao
Benguet
Cagayan
Isabela
Nueva Viscaya
Quirino
Aurora
Pampanga
Zambales
Cavite
Laguna
Quezon
Rizal
Albay
Camarines Sur
Catanduanes
Masbate
Antique
Iloilo
Negros Occidental
Bohol
Cebu
Eastern Samar
Leyte
Northern Samar
Southern Leyte
Zamboanga del Norte
Zamboanga del Sur
Zamboanga Sibugay
Camiguin
Davao del Sur
North Cotabato
Saranggani
Agusan del Sur
Dinagat Islands
Surigao del Norte
Surigao del Sur
Lanao del Sur
Maguindanao
Sulu
High Poverty Incidence High Poverty Incidence + Disaster Risk
High Poverty Magnitude High Poverty Magnitude + Disaster Risk
High Disaster Risk
1
4
2
6
14
12
3
13
9
15
44
17
10 11
16
22
31
19
23
24
33 32 42
43
20
25
18
21
27
38
40
39
41
35
29
28
30
34
36
37
26
5 7
8
24
The Aquino Administration continues to invest in the countrys greatest resourceits people. Thus, the 2015 Budget
prioritizes social protection and basic social services that substantially reduce poverty incidence and empower the
poor to be productive.
For Poverty Reduction and Human Development, the Aquino Administration will prioritize investments that help us meet our MDG
of reducing poverty incidence to 16 percent by 2015 while sustaining equal opportunities for all.
SOCIAL PROTECTION AND
SOCIAL SERVICES
Social Protection
An amount of P17.5 billion will fund the
KALAHI-CIDSS National Community-
Driven Development Project of the
DSWD. This project seeks to empower
communities in accessing services and
participating in local planning, budgeting,
and implementation. The proposed
allocation for 2015 will support 6,735
community projects that cater to 1.5
million poor households.
Community-Driven Development
The Conditional Cash Transfer (CCT) program is designed to address chronic poverty
and meet the countrys MDGs. The Aquino Administration will increase the programs
budget to P64.7 billion in 2015 from P62.6 billion in 2014.
The Regular CCT Program will have P59.8 billion to continue supporting 4.3 million
poor families. Of these covered families, the Department of Social Welfare and
Development (DSWD) commits to lift 2 million from survival to subsistence, and
300,000 from subsistence to self-sufficiency. This budget for the Regular CCT
program will also be used to support 509,366 children aged 15 to 18 years old as they
complete high school.
Under the Modified CCT Program, itinerants, homeless street families, and indigenous
people shall be eligible for cash grants, provided that they comply with certain
education and health conditions. The Modified CCT Program will receive P4.95 billion
to provide 126,963 families with education and healthcare grants, as well as other
assistance packages which may include cash-for-work, livelihood assistance, rent
subsidy, and transportation assistance.
Pantawid Pamilyang Pilipino Program
To help provide a sustainable income
for families who graduate from the CCT
program, P4.9 billion will be allotted
to the Sustainable Livelihood Program
to cover 265,175 family beneficiaries
with micro-enterprise development and
another 113,647 households under the
employment facilitation through capacity
development.
Sustainable Livelihood Program
A budget of P4.8 billion will be allocated
to the provision of a monthly social
pension of P500 to 739,609 indigent
senior citizens aged 71 years and above.
This proposed amount is 53.2 percent
higher than the current years allocation.
Social Pensions for Indigent
Senior Citizens
25
A total of P40.3 billion for the Pantawid Pamilyang Pilipino Program and other social protection programs
1
will be
focused on the 44 poorest and most vulnerable provinces.
FOCUS GEOGRAPHIC AREAS:
SOCIAL PROTECTION
1
These are the Supplemental Feeding Program,
Social Pensions for Indigent Senior Citizens, and the
Sustainable Livelihood Program. The amount is net of
administrative costs and other related expenses at the
central office.
2
Source: National Statistical Coordination Board (2012)
MILLIONS OF PESOS
2001 - 2500
1501 - 2000
1001 - 1500
501 - 1000
0 - 500
Maguindanao is among the poorest
provinces, with a poverty incidence of
63.7 percent in 2012
2
. In this war-torn
province whose communities have
been deprived of access to economic
opportunities, the government will invest
a total of P2.57 billion for social safety
nets, including:
Conditional cash transfers (4Ps) to
187,493 households
Supplemental feeding for 31,702
children
Social pensions for 9,055 indigent
senior citizens
Microenterprise support for 8,672
families
Employment facilitation for 3,717
families
Maguindanao
Featured Province:
26
Through the Universal Healthcare
Program, the Aquino Administration
seeks to increase health insurance
coverage, improve accessibility
to healthcare facilities, and help
achieve health-related MDGs.
To reduce out-of-pocket health expenses
of the poor, P37.2 billion will be allotted
to cover the health insurance benefits of
15.4 million indigent families identified
by the National Household Targeting
System for Poverty Reduction and 51,901
families under different government
special programs, including the Payapa
at Masaganang Pamayanan (PAMANA)
Program (19,901 families) and the
Sajahatra Bangsamoro Program (32,000
families). The approval of the Sin Tax
Reform Law in 2013 has increased
available resources for health services
needed by marginalized Filipinos,
enabling the government to support the
healthcare insurance coverage of half of
the Philippine population.
The government continues to invest in
programs aimed at meeting the countrys
MDGs to improve child and maternal
healthcare and reduce public health
diseases.
To deploy additional healthcare
professionals to communities, P4.3
billion will support the hiring of the
following health professionals: 398
doctors, 12,540 nurses, 5,749 midwives,
and 480 dentists.
A budget of P13.1 billion will be allocated
to rehabilitate and upgrade 1,242
barangay health stations, 587 rural
health units or city health centers,
128 LGU hospitals, 19 hospitals of the
Department of Health (DOH), and 11
treatment and rehabilitation centers to
improve the health care delivery system.
Health Insurance
Premium Subsidies
Addressing
Health-Related MDGs
Doctors to the Barrios and Rural
Health Practice Program
Health Facilities Enhancement
Program
Family Planning and
Responsible Parenting
Micronutrient
Supplementation
Program for 4.4 million
children aged 5 years
and below.
Provision of family
planning commodities
to 2.7 million women,
and family planning
services to LGUs.
Deployment of 30,407
Community Health
Teams to provide
information and
services to 5.2 million
households that are
vulnerable to illnesses.
Treatment of Public
Health Diseases for the
treatment of malaria,
schistosomiasis, filariasis,
and other public health
diseases.
P3.3 B
TB Control Program
to provide treatment to
252,913 new adult TB
cases.
P1.1 B
P788 M
Universal Healthcare
27
A total of P30.5 billion for various public healthcare
3
programs will be focused on the 44 poorest and most vulnerable
provinces.
FOCUS GEOGRAPHIC AREAS:
PUBLIC HEALTH
Featured Province:
1
This amount represents the sum of the 2015 proposed
allocations for healthcare insurance premium subsidies,
the Health Facilities Enhancement Program, the Doctors
to the Barrios and Rural Health Practice Program,
Family Health and Responsible Parenting, Disease
Prevention and Control, Access to Potable Water (DILG-
SALINTUBIG program), and public health allocations
under the ARMM. This amount is net of administrative
costs and other related expenses at the central office.
2
Source: National Household Targeting System for
Poverty Reduction (DSWD)
While Cebu is among the most
prosperous provinces in the country, it
has among the highest number of poor
families at 151,425 in 2012
4
. Among
the priority provinces, Cebu will get
the highest allocation of P1.8 billion for
public healthcare. Among others, this
budget will be used to:
Subsidize the health insurance
premiums of more than half a million
residents,
Construct 122 barangay health stations,
and build or improve other healthcare
facilities,
Deploy 543 healthcare workers,
including 422 nurses, and
Construct 6 potable water facilities.
MILLIONS OF PESOS
1601 - 2000
1201 - 1600
801 - 1200
401 - 800
0 - 400
Cebu
28
To support the K to 12 Program, P52.9
billion will cover the construction of
31,728 classrooms, 13,586 water and
sanitation facilities, and 455 technical
vocational laboratories; the repair of
9,500 classrooms; and the procurement
of 1.3 million seats.
In line with the continuing modernization
of the education system, P8.5 billion
will be allocated to the procurement of
24,028 ICT Packages.
The Aquino Administration will also
invest P9.97 billion in the hiring of
new teachers by opening 39,066 new
teaching positions and 1,500 non-
teaching positions.
For 2015, P3.5 billion will be allocated
to purchase and distribute 70.5 million
textbooks and instructional materials to
all schools nationwide. This proposed
amount is more than double the current
years allocation of P1.7 billion.
The DepEd will continue implementing
the GASTPE with a budget of P8.4
billion to benefit 1,082,798 grantees.
This program aids deserving students in
accessing basic education while helping
decongest public schools.
In 2015, P2.0 billion will be provided to
support 1 million out-of-school youths
under the Abot-Alam Program.
Basic Educational Facilities
DepEd Computerization
Hiring of Teachers
Textbook and
Instructional Materials
Government Assistance to
Students and Teachers in
Private Education
Abot-Alam Program
The Aquino Administration remains
committed to increase investments
in improving access to quality
education. To support the successful
implementation of the K to 12
Program, the 2015 proposed budget
for the Department of Education
(DepEd) of P365.1 billion is 18.0
percent higher than its budget for
this year.
Basic Education
29
A total of P15.2 billion for various basic education programs
5
will be focused on the 44 poorest and most vulnerable
provinces.
FOCUS GEOGRAPHIC AREAS:
BASIC EDUCATION
5
This amount represents the sum of 2015 allocations
for Basic Educational Facilities, the provision of
textbooks and other instructional materials, the DepEd
Computerization Program, GASTPE, the Abot-Alam
Program, and allocations under the ARMM. This amount
is net of administrative costs and other related expenses
at the central office.
Lanao Del Sur has the highest poverty
incidence rate at 73.8 percent of the
population. Clearly, there is a need to
improve the future of children in Lanao Del
Sur. This is why the 2015 Budget allocates
P959 million to this province for the:
Construction of 575 classrooms and
purchase of 25,875 school furniture
Purchase and distribution of 846,898
textbooks and instructional materials
Provision of 287 ICT packages and
connection of 171 schools to the
internet
Scholarships for 3,574 students and
teachers under GASTPE
Coverage of 16,750 out-of-school
youths under the Abot Alam Program
MILLIONS OF PESOS
801 - 1000
601 - 800
401 - 600
201 - 400
0 - 200
Lanao del Sur
Featured Province:
30
Housing for the Vulnerable Housing for Uniformed Personnel
to the Socialized Housing and Finance
Corporation (SHFC) and National
Housing Authority (NHA) to relocate at
least 15,862 families in danger zones to
safer areas
The 2015 Budget proposes P100 million
for the NHA to provide housing for 341
families of the uniformed personnel of
the Armed Forces of the Philippines
(AFP), Philippine National Police
(PNP), Bureau of Jail Management and
Penology, and Bureau of Corrections.
to NHA to provide emergency housing
assistance to 26,426 victims of
calamities
to NHA to relocate 7,215 families to
better communities
to SHFC to assist 16,500 families in
acquiring their own homes
to the Department of Interior and Local
Government to provide 472 informal
settler families with housing units
and 26,367 beneficiaries with rental
assistance
P7.3 B
P736 M
P577 M
P1.0 B
P1.2 B
In 2015, P11.0 billion will be
earmarked to enable poor and
vulnerable families, as well as
dedicated military and other
uniformed personnel, to afford
decent homes.
Socialized Housing
31
To create more employment and livelihood opportunities for all, the Aquino Administration must sustain the rapid
growth of our economy while reducing poverty. However, growth alone is not enough; employment-generating
industries such as agriculture, manufacturing, and tourism must be revitalized.
ECONOMIC EXPANSION
AND INCLUSIVE GROWTH
To meet the benchmark infrastructure spending level of 5.0 percent of GDP by 2016, the Aquino Administration will increase the
infrastructure budget by 27.1 percent to P562.4 billion, or equivalent to 4.0 percent of GDP.
Infrastructure Program
The Transport Infrastructure Program seeks to expand the economy by connecting lagging towns to growth centers, link farms
and products to markets, and help bring more jobs and livelihood to people throughout the country. The 2015 Proposed Budget
provides P227.6 billion for the Transport Infrastructure Program.
Transport Infrastructure
Road Transport
A total of P195.1 billion is being proposed mostly to improve the
network of national roads and bridges throughout the country.
Of this amount, 174.6 billion will be used by the Department
of Public Works and Highways (DPWH) for its National Roads
and Bridges Program, aimed at paving 97 percent of all national
arterial and secondary roads and making 99.5 percent of
national bridges permanent by 2015.
Meanwhile, the Department of Transportation and
Communications (DOTC) is provided with P7.02 billion to
build integrated road transport systems around Metro Manila,
decongest the metropolis, and promote road safety.
DPWH National Roads and Bridges
Pave 2,231 kilometers of national roads
Make 5,231 lineal meters of temporary bridges
permanent
DOTC Projects
P2.1 billion for Road Transport IT Infrastructure
P1.18 billion for Integrated Transport System - South
P750 million for Integrated Transport System - North
P1.3 billion for Cebu Bus Rapid Transit
P174.5 B
P7.0 B
Total Infrastructure Outlays (in PhP billions)
2010
1.8% of GDP
2013
2.7% of GDP
2011
1.8% of GDP
2014
3.4% of GDP
2009
2.2% of GDP
2012
2.0% of GDP
2015
4.0% of GDP
180.1
165.0
175.4
215.7
306.9
442.3
562.3
32
Rail Transport
A total of P16.9 billion is being proposed to improve railway
systems and address the needs of the riding public. Key
projects include the following:
Rehabilitation of LRT Lines 1 and 2 P2.8 B
LRT Line 1 South Extension P4.7 B
LRT Line 2 East Extension P2.4 B
LRT Line 2 West Extension P200 M
MRT 3 transport subsidy P4.7 B
MRT 3 infrastructure outlays P804 M
PNR repair, restoration, and rehabilitation P747 M
Air Transport
The DOTC will be provided with P13.3 billiona 45.8-percent
increase from the 2014 allocationfor air transport
development. Key airport projects include the following:
Bicol International Airport Development Project P1.6 B
Puerto Princesa Airport Development Project P1.6 B
Clark Airport P1.2 B
Busuanga Airport P1.0 B
General Santos Airport P959 M
Kalibo Airport P950 M
Iloilo International Airport P791 M
Maritime Transport
The proposed P5.16 billion budget of the DOTC for maritime
transportation supports not only the construction and
rehabilitation of seaports but also the improvement of maritime
safety. Key projects include the following:
Construction, development, repair, and rehabilitation of
40 seaports
P1.5 B
Philippine Coast Guard for patrol vessels P1.9 B
Ozamiz Airport P695 M
Calbayog Airport P678 M
Camarines Sur (Naga) Airport P670 M
Ninoy Aquino International Airport-Capacity
Expansion and Maximization
P592 M
33
More than 34 percent, or 9.4 billion, of a total P27.5 billion allocated for various transport infrastructure development
programs
6
, will be focused on the 44 poorest and most vulnerable provinces in 2015.
FOCUS GEOGRAPHIC AREAS:
TRANSPORT INFRASTRUCTURE
6
This amount represents the sum of 2015 allocations
for air transport and maritime transport. The amount
unfortunately does not yet include allocations for
roads and bridges under DPWH as the province-level
breakdown was not yet available as of press time. This
amount is net of administrative costs and other related
expenses at the central office.
MILLIONS OF PESOS
2001 - 2500
1501 - 2000
1001 - 1500
501 - 1000
0 - 500
A province of promise and prosperity,
Surigao del Norte is also among the
provinces most vulnerable to climate
change. A total of P2.12 billion will be
allocated to optimize the provinces
economic potential through world-class
infrastructure, including the construction
and rehabilitation of the Siargao and
Surigao airports, as well as the seaports
in Dinagat, San Benito, and Pilar.
Surigao del Norte
Featured Province:
34
The Agricultural Development Program seeks to make the agriculture and fisheries sector more competitive and
productive, and to empower farmers, fisherfolk, and other stakeholders to improve their incomes. Under the 2015
Budget, the Agriculture Development Program will receive a total of P84.4 billion, which includes the following
investments.
Agricultural Development
Agriculture Commodity Support Agriculture Infrastructure
A total of 21.7 billion will be invested in
the various programs of the Department
of Agriculture (DA) to promote a more
diversified, intensive, high-value, and
market-oriented crop and livestock
production.
To improve productivity, reduce costs
and improve access of farms to markets,
the 2015 Budget will invest in the
following agriculture infrastructure:
for the Rice Program to enable the
production of 20.09 million metric tons
of rice per hectare through production
support, research and development, and
the provision of postharvest facilities to
1,701 farmer groups.
for Fishery Infrastructure, which
includes P756 million for the
construction of fish landing in 252 sites
and P534 million for the establishment
of 26 municipal fish ports.
for the Corn Program to fast track the
production of 2.75 million metric tons
of white corn, 6.27 million metric tons
of yellow corn, and 3.28 million metric
tons of cassava.
for the Livestock and Poultry Program,
to bolster the production of livestock,
including 2.1 million metric tons of hogs
and 1.72 million metric tons of chicken.
This budget will help rural economies by
developing enterprises and increasing
farmers income while aiming for global
competitiveness.
for the High-Value Crops Program, to
support agricultural diversification and
to promote the production of high-value
crops, especially in the poorest areas.
This amount shall be used to provide
the facilities and equipment needed
to produce 2.6 million metric tons of
pineapples, 865,910 metric tons of
mangoes, and 9.17 million metric tons of
bananas, among other high-value crops.
for the Fisheries Program, which
the Bureau of Fisheries and Aquatic
Resources (BFAR) will use to support the
production of 2.51 million metric tons of
fish and other aquatic produce through
resource conservation measures, thereby
intensifying fishery resource protection
and law enforcement, investment on
people, and research and technology.
P7 B
P1.29 B
P2.3 B
P1.53 B
P2.2 B
P4.6 B
for the Coconut Program of the
Philippine Coconut Authority, which
will be used to help produce 2.81million
metric tons of coconuts and copra and
uplift the well-being of coconut farmers.
This budget will cover the construction
P4.1 B
for Irrigation, which will be used by the
National Irrigation Authority to cover
20,650 hectares and restore of 23,200
hectares of service areas.
P25.98 B
for the construction of 1,616 kilometers
of Farm-to-Market Roads that connect
farmers, markets, and consumers.
P14.5 B
of farm-to-market roads, the planting
and replanting of coconut trees, the
development of coconut agro-industrial
hubs, and the eradication and control of
pests.
35
A total of 17.1 billion is allocated for various programs
7
to boost agricultural productivity and farmers incomes in the
44 poorest and most vulnerable provinces.
FOCUS GEOGRAPHIC AREAS:
AGRICULTURE DEVELOPMENT
7
This amount represents the sum of 2015 allocations
for production support services, market development
services, extension support, education and training
services, research and development, irrigation, farm-
to-market roads, and agriculture allocations under the
ARMM. This amount is net of administrative costs and
other related expenses at the central office.
MILLIONS OF PESOS
1201 - 1500
901 - 1200
601 - 900
301 - 600
0 - 300
Isabela is the second top palay producer
in the country, and accounts for half
of the Cagayan Valley regions palay
production. However, the livelihood of
farmers in this province are threatened
by the onslaught of typhoons and other
calamities. For 2015, P1.12 billion will
be invested in boosting the agriculture
sector of Isabela, including:
Irrigation services for 98,952 hecatares
27 agri-based enterprises supported
by the Small Enterprise Technology
Upgrading Program
Isabela
Featured Province:
36
In terms of development, some areas are still literally left in the dark. The 2015 proposed budget will provide P2.1
billion for the Rural Electrification Program to provide far-flung communities a brighter future. Key programs include
the following:
Rural electrifcation
National Electrification Authority (NEA)
Sitio Electrification Program
NEA Barangay Line
Enhancement Program
2,308 sitios P 1.5 B 111 barangays P 400 M 25,000 households P 115.9 M
Sitio Electrification, Barangay Line Enhancement and Solar Electrification
under the PAMANA Program
DOE to electrify households in off-grid
areas using renewable energy systems
P 103 M 5,400 households P 84.7 M
Of this total amount, P1.2 billion or 56.9 percent will be focused on the 44 poorest and most disaster-prone provinces. For instance,
only 56 percent of Masbate is reportedly energized. Thus, P104 million will be used to bring electricity to enhance the power
connection of 23 barangays and bring electricity to 30 sitios in the said province.
Department of Energys (DOE)
National Intensification of Household
Electrification Program
37
The resurgence of the manufacturing sector has significantly contributed to the countrys robust GDP growth in
recent years. To bolster the sectors expansion and job generation capacity, the 2015 Budget provides a total of
P240.0 billion for the Manufacturing Resurgence Program.
Of this total amount, 95 percent will be used for transport infrastructure improvement to reduce the cost of transporting products
(see Transport Infrastructure Program, page 29). The remainder will support various programs to support industries, including:
Manufacturing Resurgence
P874 million for the Department of Trade and Industry (DTI)
to boost the development and the employment generation
potential of 100,084 micro, small, and medium-scale
enterprises (MSMEs).
P662 million for the Department of Science and Technology
(DOST) Small Enterprise Technology Upgrading Program
(SETUP) to provide support to 1,984 firms and help generate
14,710 jobs.
P194 million for the upgrading and development of industry
development plans and policies.
P132 million for the various research and development projects
of the DOST- Philippine Council for Industry, Energy, and
Emerging Technology Research and Development (PCIEERD).
38
Tourism remains a strong backbone of our economy. For 2015, the government seeks to attract 8.2 million
international visitors and 51.7 million domestic travelers, employ 6.3 million workers, and increase the industrys
productivity to a 7.8-percent share of GDP.
Tourism Development
To expand the accessibility of tourism destinations to foreign
and domestic travelers, the DPWH and the DOTC will continue
to improve transportation facilities and linkages through
various tourism access roads as well as air and maritime
transport facilities (as included in the Transport Infrastructure
Program, page 29):
To promote the Philippines as a prime tourism destination, P3.6
billion will be earmarked for the tourism promotion efforts of
the Department of Tourism and the Tourism Promotions Board.
Tourism Infrastructure Tourism Promotions
for the DPWH to construct, widen, and upgrade 966.1
kilometers of access roads and 1,228 lineal meters of bridges to
airports, seaports, and declared tourist destinations.
P20.0 B
for the modernization and expansion of airports, including the
Ninoy Aquino International Airport Terminal 1 rehabilitation
project.
P9.94 B
for the improvement of maritime transport facilities.
P275 M
39
Many poor provinces have a vast untapped tourism potential that the government seeks to unlock in 2015. Thus, P6.1
billion for various tourism development programs
8
will be invested in the 44 poorest and most vulnerable provinces.
FOCUS GEOGRAPHIC AREAS:
TOURISM DEVELOPMENT
8
This amount represents the sum of 2015 allocations
for air and maritime transport (note: also included
in transport infrastructure program) and ecotourism
development. Unfortunately, this amount does not
yet include allocations for access roads to tourism
destinations under DPWH as the per-province
breakdown was not yet available as of press time. This
amount is net of administrative costs and other related
expenses at the central office.
MILLIONS OF PESOS
2001 - 2500
1501 - 2000
1001 - 1500
501 - 1000
0 - 500
A province often visited by typhoons and
other natural calamities, Albay has great
potential for tourism with its Mayon
Volcano and other superb natural tourist
attractions. Thus, P1.6 billion will be
invested in Albay to build a new airport
in Daraga and build seaports in Batan
and Rapu-Rapu.
Albay
Featured Province:
40
To support the development of a quality workforce suited for the needs of priority industries, the 2015 Proposed
Budget will invest in the provision of technical, vocational, and tertiary education for poor and deserving students.
Developing a Quality Workforce
Technical and Vocational Education Scholarships in Tertiary Education
Modernizing State Universities and Colleges
The 2015 Budget will invest in various scholarship programs
of the Technical Education and Skills Development Authority
(TESDA) to help students achieve gainful employment:
A total of P7.9 Billion will be allocated to fund various forms
of scholarships, grants and financial assistance for deserving
students who aspire to earn a college degree:
As the Aquino Administration continues to modernize the
public higher education system, the 2015 Budget provides State
Universities and Colleges (SUCs) a total of P43.3 billion, 13.8
percent higher than the 2014 allocation.
Training-for-Work Scholarship Program
to benefit 210,526 enrollees in business process
outsourcing, semiconductor and electronics,
tourism, automotive, and general infrastructure.
Study Grant for Poverty Alleviation of SUCs
1

to benefit 40,453 Pantawid Pamilyang Pilipino
Program beneficiaries.
Special Training for Employment Program
(STEP)
to assist 40,248 beneficiaries
Students Financial Assistance Programs of the
Commission on Higher Education (CHED)
to benefit 54,208 students with scholarships,
grants-in-aid, student loans, and other forms of
financial support.
Tulong Dunong Scholarship Program
2
to assist persons with disabilities, solo parents,
and members of cultural minority group.
Department of Science and Technology
(DOST)
to benefit 18,479 science and technology
scholars.
P2.5 B
P543 M P763 M
P2.5 B
P2.2 B
1
Included in the P43.3-billion total budgetary outlay for SUCs
2
Of this amount, 1.5 billion will be under CHED and P988 million will be under SUCs
(this is part of the total P43.3-billion outlay for SUCs)
P2.0 B
41
The aftermath of Super Typhoon Yolanda has taught the government to shift gear from a reactive approach focused
on disaster rehabilitation and recovery to a proactive approach rooted on prevention and preparedness. The 2015
Budget will support this preventive approach along with activities that aim to fully harmonize climate change
adaptation and mitigation (CCAM) efforts with Disaster Risk Reduction Management actions and interventions.
CLIMATE CHANGE
ADAPTATION AND MITIGATION
Build Back Better is the National
Governments strategy to rebuild and
rehabilitate the communities devastated
by Super Typhoon Yolanda in 2013. To
bankroll rehabilitation efforts, a total of
P121.35 billion
3
was provided under the
2014 Budget, while Congress passed a
P14.6-billion Supplemental Budget in
2013.
For 2015, a total of P21.5 billion is
proposed to support government efforts
to respond to calamities and rebuild
communities affected by disasters:
P14 billion
National Disaster Risk Reduction and
Management Fund
(formerly Calamity Fund)
P6.5 billion
for Quick Response Funds lodged under
the budgets of key agencies
4

Of this amount, P1 billion will be
allocated to the Peoples Survival Fund
P1 billion
for the Rehabilitation and
Reconstruction Fund
5
Build Back Better
3
This includes P20 billion for the Rehabilitation and Reconstruction Program, P13 billion for the National Disaster Risk
Reduction and Management Fund, P4.5 billion for Quick Response Funds under key agencies, and P83.5 billion under
the Unprogrammed Fund for reconstruction, disaster relief and mitigation, and the Peoples Survival Fund.
4
DA, DepEd, DOH, DND, DPWH, DSWD, DOTC, and NIA
5
This special purpose fund was retained in the 2015 Budget, but with a smaller amount, to enable the government
to augment funds for rehabilitation and reconstruction efforts when warranted by conditions. Of the P20-billion fund
for2014, only P5 billion has so far been released. The remaining P15 billion will be used to frontload recovery and
rehabilitation needs for 2015.
42
To strengthen the countrys
resilience to climate risks, the
Aquino Administration will focus
on strengthening the natural
ecosystems of the country and the
adaptive capacity of government
institutions and communities.
Risk Resiliency Program
To help mitigate flooding in the 18 major
river basins and in the areas below sea
level, the DPWH will intensify its flood
control and drainage projects through its
budget of P44.84 billion.
The 2015 Budget invests in various
programs that enable the government
to better manage air and water pollution
and solid wastes:
To enable the government to better
manage geohazards, the 2015 Budget
will invest in the following mapping and
geohazards assessment activities:
To improve carbon sequestration and
reduce downstream flooding and
soil erosion in the country, P7 billion
will be allocated to the National
Greening Program of the Department
of Environment and Natural Resources
(DENR). This budget shall cover
300,000 hectares with 222 million
seedlings under this program.
Flood Control Infrastructure
Environmental Management
Mapping and Geohazards
Assessment
National Greening Program
P398 million for the
Unified Mapping Project
of NAMRIA, to produce
1,500 image maps that
cover 360,000 hectares,
including 18 river basins.
This mapping project
will provide up-to-date
geospatial information for
zoning and development
to prevent property
damage and reduce
deaths during natural
disasters.
P17 million for the
Philippine Institute
of Volcanology and
Seismology to upgrade its
warning systems through
the installation of 240
intensity meters and 19
tsunami wave detectors,
among others.
P1.15 million for
the Project NOAH
(Nationwide Operational
Assessment of Hazards)
of the DOST to generate
3D image hazard maps
through Light Detection
and Ranging (LiDAR)
technology.
P89 million for the
National Geohazards
Assessment Program
to enable the DENR
Mines and Geosciences
Bureau to update its
data and assess local
vulnerabilities in 70 cities
and municipalities and
166 coastal communities.
Air Quality Program P139 M
Clean Water Program-Adopt
an Estero Program
P99 M
Ecological Solid Waste
Management Program
P86 M
43
A total of P3.2 billion for the National Greening Program will be invested in the 40 poorest and most vulnerable
provinces. Of this amount, P2.1 billion will be focused on the 29 provinces most vulnerable to climate shocks and
disasters.
FOCUS GEOGRAPHIC AREAS:
NATIONAL GREENING PROGRAM
9
Source: National Household Targeting System for
Poverty Reduction, 2012
MILLIONS OF PESOS
281 - 350
211 - 280
141 - 210
71 - 140
0 - 70
Quezon is among the provinces most
frequented by typhoons each year,
and has a very high number of poor
households at 122,139
9
. The government
will invest P199 million in planting 9.8
million tree seedlings across 8,588
hectares of land, in maintaining and
protecting 29,810 of forest land, and
in hiring and deploying 87 extension
officers.
Quezon
Featured Province:
44
For inclusive growth to thrive and prosper, an environment of social stability must be established. Thus, the 2015
Proposed Budget invests in an enabling environment of just and lasting peace, security, and the prevalence of the rule
of law.
JUST AND LASTING PEACE
AND THE RULE OF LAW
Since the beginning, the Aquino Administration has been sowing the seeds of lasting peace and development through the peaceful
settlement of armed conflicts and the provision of services in communities made vulnerable by violence.
Peace and Development
Supporting the Bangsamoro
Peace Agreement
With the signing of the Comprehensive
Agreement on the Bangsamoro (CAB)
and in anticipation of the approval of
the Bangsamoro Basic Law, an initial
amount of P2.7 billion is proposed for
the implementation of various socio-
economic programs to support the peace
agreement with the MILF:
In addition, P228 million will be allocated
to the establishment of various offices
and units required for CAB Annex on
Normalization.
Auxiliary social services for
PWD combatants
Agri-enterprise support program
Sustainable livelihood program
Agricultural development
support: small water
impounding projects, farm-to-
market roads, farm inputs and
machineries, etc.
Cash-for-work and
Cash-for-training
Construction and renovation of
community-based infrastructure
P950 million for various social
services (DSWD):
P231 million for livelihood
development and literacy programs
(DepEd)
P50 million for health insurance
(DOH-PHIC)
P16 million for scholarship programs
(CHED)
P880 million for agriculture support
(DA)
P335 million for technical vocational
training (TESDA)
45
PAMANA
The Aquino Administration continues to implement PAMANA to foster peace and development throughout the country. For 2015,
the program will receive a budget of P7.3 billion to support the delivery of various programs in conflict-torn areas:
for community
infrastructure and
support
for community
infrastructure and
support
for electrification
projects
DILG
DSWD
DOE & NEA
P3.1 B
for road
construction
for support to
indigenous peoples
for reforestation
DPWH NCIP
DENR
P519 M P62 M
for health insurance
premiums
for study grants
PHIC
CHED
P48 M
P9 M
P200 M P760 M
P100 M
for community-
driven development
DA & ARMM
P2.5 B
46
The proposed Budget for
2015 supports the Aquino
Administrations bid to improve the
capability of law enforcement and
defense forces to promote the rule of
law and defend national security.
Modernizing Law
Enforcement and
Territorial Defense
Public Order and Safety
Armed Forces Modernization
The government has the responsibility
to ensure the safety of its citizens. For
one, the PNP commits to limit crime
incidence to 37.11 percent and meet a
crime solution efficiency rating of 29.99
percent. To support its modernization
efforts, the PNP will be given a budget
of P2 billion to purchase 5 gunboats, 2
fixed-wing aircraft, and 13,330 firearms.
The AFP commits to protect the sovereignty of the country and support the
normalization of 17 provinces by ensuring the coverage of 33 percent of the air
domain and 18 percent of the maritime domain. To purchase additional military
equipment, P20.0 billion will be allocated to the AFP Modernization Program.
The Bureau of Fire Protection (BFP)
commits to limit fire incidents to one
per 10,000 population and casualties to
one per 200,000 population. The BFP
will be provided a budget of P 8 billion to
strengthen its firefighting and emergency
response through the construction of
110 fire stations and purchase of 116 fire
trucks, among others.
33%
18%
5
2
13,330
20 B
47
Justice delayed is justice denied.
Although common, this notion
must now be changed. As such, the
government will ensure the speedy
delivery of justice, regardless of
ones status in society.
Strengthening Delivery
of Justice
Resolution of Cases
Witness Protection
Legal Services for Indigents
The Supreme Court of the Philippines
and the Lower Courts will be given a
total budget of P18.1 billion, of which will
be utilized by the high court in achieving
a turnover of 416,466 cases
in 2015.
To ensure the integrity of testimonies in
court, the Witness Protection Program
of the Department of Justice will receive
P190.7 million to support 680 witnesses.
Meanwhile, the Public Attorneys Office
will be given a budget of P1.9 billion for
the provision of legal services to indigent
citizens in 751,896 cases.
48
Good governance has been the core of the Aquino Administration since it assumed office in 2010. Participation,
transparency, and accountability in the public financial and auditing processes; assisting our local government in
capacity development; and providing rapid and efficient public service delivery are just some of the steps in ensuring
that no one is left behind in the road to inclusive development.
GOOD GOVERNANCE AND
ANTI-CORRUPTION
Anti-corruption Frontline Service Delivery
To fight the incidence of corruption,
the Office of the Ombudsman will be
allotted P543 million for its continued
efforts to investigate anomalies and
strengthen the integrity of our public
institutions. A total of 18,913 complaints
and grievances will be acted upon.
Meanwhile, the Sandiganbayan will
receive a budget of P295 million to be
spent on the adjudication of 3,796 graft
and corruption cases, 418 of which will
be disposed by the end of 2015.
Department of Foreign Affairs will be
allocated P10.0 billion for its consular
services, including the processing of 3.2
million E-passports.
Of the P1.1 billion allocation for NBI,
P193 million will be set aside for the
processing of 5.5 million NBI clearances
for 2015.
Business Regulation
The 2015 Budget sustains the
governments efforts to simplify business
transactions in the country. The Business
Permits and Licensing System of the
Department of Trade and Industry (DTI)
will be allocated P9 million to increase
the number of LGUs compliant with BPLS
to 1,500.
Meanwhile, the Philippine Business
Registry (PBR) will be allocated P5.9
million to establish a centralized
business registration database. The PBR
was initiated by the Department of Trade
and Industry, Securities and Exchange
Commission, Bureau of Internal Revenue
(BIR), Home Development Mutual Fund,
Philippine Health Insurance Corp, and
Social Security System.
49
LGU Capacity Development Clean and Fair Elections
The LGU Capacity Development
Program of the DILG aims to improve
local governance and provide additional
support for the implementation of
relevant projects. This program also
creates a link among other LGUs and
key stakeholders, such as civil society
organizations (CSOs).
The 2015 Budget will support the
preparations for the 2015 and 2016
Elections. A total of P11.4 B will be
allotted for the acquisition of 41,800
Precinct Computerized Optical Scan
machines and for the augmentation of
the existing 80,000 units as per the
recommendation of the COMELEC
Advisory Council. This amount will
also cover 116,000 units of biometric
technology and other additional
hardware. In addition, P1.1 billion will be
set aside for the Sangguniang Kabataan
elections in 2015.
For 2015, the LGU Capacity
Development Program of the DILG will
be allotted P3.1 billion. This will support
the implementation of the Seal for Good
Housekeeping, the Local Government
Performance Management System,
and the Performance Challenge Fund,
which incentivize LGUs that exhibit good
performance.
50
As the Aquino Administration
embarks on a new journey toward
inclusive development, it will
continue the proper management
of public finances to ensure a
transparent and accountable
administration.
Public Financial Management
(PFM)
Revenue Administration
Auditing Services
PFM Reform Program
The DOF, through the BIR and Bureau
of Customs (BOC), will continue
implementing revenue administration
reforms to ensure that right revenues
are collected, and to bring tax evaders,
smugglers, and their collaborators in the
bureaucracy to justice.
To ensure the accountability of
government finances, the Commission
on Audit (COA) will be provided
P2.6 billion for its government auditing
services. This budget will enable the
commission to conduct financial,
compliance, and other audits in 23,973
agencies; special audits in 25 agencies;
and fraud audits in 25 agencies.
The COA will receive P5.9 million to
implement the Citizens Participatory
Audit program, an internationally-
awarded reform that promotes citizens
participation in the conduct of public
audit.
Initiated by the DBM, together with
the DOF, Bureau of Treasury, and COA,
the PFM Reform Program consists of
major reforms that seek to ensure the
transparent, efficient, and accountable
management of government finances
P179.6 million for the DOFs
public sector financial resources
management services. This includes
the implementation of the Revenue
Integrity Protection Service, which will
investigate 72 personnel in 2015.
P5.6 billion for the BIRs tax collection
services. This, among others, will help
in reaching a target revenue of P1.7
trillion, and support the Run After Tax
Evaders program, where 36 cases will
be filed in 2015.
P1.7 billion for the BOCs collection of
duties and taxes.This, among others,
will support the BOCs target revenue
collection of P456 billion, and ongoing
organizational reforms, including the
intensification of the Run After The
Smugglers campaign.
(see page 52 for a comprehensive
discussion on budget reforms).
Under the 2015 Budget, P229.3
million will be provided for the
Government Integrated Financial
Management Information System
(GIFMIS), a centralized database for
all financial transactions. Moreover,
P726.6 million will be provided for the
Treasury Single Account, a system that
enables government to improve cash
management.
51
The Aquino Administrations Budget
reform agenda began with the
introduction of zero-based budgeting
(ZBB) to curb spending on inefficient
and ineffective programs, and to ensure
the proper allocation of scarce resources.
Since it assumed office, the Aquino
Administration has been instituting
various reforms to ensure that each
peso is spent within the governments
means, on the right priorities, and
with measurable results. As it plugged
leakages, improved the efficiency
of public spending, and boosted the
effectiveness of service delivery,
the Administration also enshrined
the empowerment of citizens at the
heart of public finance by promoting
transparency and citizens engagement.
The Aquino Administrations pursuit
of budget reforms in its first years in
office enabled the country to achieve
unprecedented feats.
Spending within our means
Spending on the right priorities
The Aquino Administrations doggedness in pursuing fiscal consolidationthat is,
to keep governments finances in a stable condition and to reduce the governments
indebtednesshas paid off. Bold reforms in tax administration, the aggressive
campaign against tax evaders and smugglers, and strategic debt management
enabled the government to keep its fiscal deficit to 2 percent of GDP, and to reduce
the debt stock to 49.2 percent in 2013 from 52.4 percent in 2010.
The Aquino Administration has dramatically reshaped the allocation of the Budget to
support its Social Contract with the Filipino People. In 2004, the debt burden ate up
the lions share of national government expenditures at almost 30.8 percent while the
shares of the social and economic service sectors only reached 28.9 percent and 19.4
percent, respectively. In 2014, the debt burden dwindled to a measly 16.7 percent of
the Budget; while social and economic services were boosted to 37.2 percent and 26.2
percent.
The revived stability of the governments finances earned the renewed trust and
confidence of the investing public, as demonstrated by the investment-grade credit
ratings that the Philippines has recently obtained from top credit ratings agencies.
Ang Budget po ang
pinakamalinaw na
pagsasabuhay ng ating
tuwid na landas.
President Benigno S. Aquino III,
FIFTH STATE OF THE NATION ADDRESS
THE AQUINO BUDGET TRANSFORMATION AGENDA:
BUILDING ON GAINS AND SUSTAINING THE MOMENTUM
2005
62.7
2009
52.5
2013
47.0
2007 2011
49.3
2015
45.6
2006
58.1
2010 2014
46.1
2008
53.6
2012
51.9
58.0
51.7
2005
4.5
3.1
5.3
2009
5.1
5.1
5.0
3.5
2013
6.2
4.5
2.9
2007 2011
5.6
3.8
3.1
2015
6.8
4.9
2.8
2006
4.5
3.5
4.9
2010 2014
6.6
4.6
2.9
2008
4.8
4.8
4.7
3.7
2012
5.6
4.6
3.2
4.6
4.3
4.3
4.0
4.6
4.2
3.4
Outstanding Debt (as % of GDP)
Social Services (as % of GDP)
Economic Services (as % of GDP)
Debt Burden (as % of GDP)
52
Spending with measurable results
With the Aquino Administrations efforts
to ensure that each peso is spent in
a timely manner and with maximum
impact, the Philippine economy grew
by an outstanding 7.2 percent in 2013,
among the fastest in Asia. Governments
spending priorities are also finally
making a dent on poverty incidence,
which declined from 28.6 percent in the
first semester of 2009, to 24.9 percent in
the same period of 2013.
Empowerment through fscal
transparency and participation
Since the beginning, the Aquino
Administration has sought to empower
citizens in the way public funds are used.
For one, it introduced unprecedented
reforms to improve the publics access
to budget information. It introduced
policies, such as the Transparency
Seal, to require government agencies
to disclose key budget information
on their websites. It also leveraged
technology to make more budget data
available to citizens (such as through
the Open Government Data project). It
also published the Peoples Budget to
make technical budget information more
understandable to ordinary citizens.
Grassroots Participatory Budgeting
process, which gives communities and
local CSOs a direct voice in the allocation
of the budget (see page 57). Through the
COA, the government also introduced
the Citizens Participatory Audit.
Through various reform interventions to
plug leakages and streamline processes,
the government has been able to ensure
the fast and efficient execution of the
Budget: the disaggregation lump sum
funds into as much detail as possible;
the Disbursement Acceleration
The current Administration has
consistently given premium to programs
and projects for inclusive development:
key social protection and social services
for poverty reduction; as well as
economic services, particularly higher
spending on infrastructure. Major
reforms enabled the government to
tighten the prioritization of public funds,
such as the ZBB to eliminate programs
and projects that are inefficient,
ineffective, and fraught with leakages;
the Budget Priorities Framework to guide
departments in aligning their budget
proposals along program priorities and
geographic focus areas; and Program
Budgeting to improve the collaboration
of agencies along priority programs.
At this point in our reform
struggle, we acknowledge
the need to not only stay on
course but to also further
deepen our reforms towards
their irreversibility,
Secretary Florencio B. Abad
Program to mobilize funds for fast-
moving and high-impact programs and
projects; innovations to fast-track the
procurement process; and the adoption
of the GAA-as-Release Document
policy (see page 56). The Administration
also sought to strengthen performance
management systems so that each
peso spent leads to real, tangible,
and measurable results. Through the
Performance Informed Budgeting, the
Budget now clearly links allocations with
performance targets (see page 55).
2011
3.6
2012
6.8
2013
7.2
GDP Growth
It also introduced mechanisms that
enable citizens to participate in the
process of budgeting. For one, it
introduced the process of formal
Budget Partnership Agreements
between agencies and CSOs in the
crafting of agency budget proposals
as well as in the monitoring of budget
implementation. It also initiated the
Thus, on the back of these early
victories, the Aquino Administration
is intensifying the pursuit of game-
changing reforms to strengthen the
budget process and, most especially, to
put the citizen at its center.
53
PFM REFORM PROGRAM
The PFM Reform Program was developed to ensure the effective delivery of public
services through the improved efficiency, transparency, and accountability in the
use of public funds. Implemented through a strategic partnership of the COA, the
DBM, and the DOF, the program is composed of major reforms that clarify, simplify,
and harmonize the governments financial management processes and information
systems.
Since President Aquino signed Executive Order No. 55 in 2011 adopting the PFM
Reform Program, significant progress has been achieved in implementing its major
components:
A single language for all
government accounts
Putting our fnances under one roof
Unifed Account Code Structure
Treasury Single Account
The different and disjointed
account code systems used in the
past complicated the tracking and
reconciliation of information on
government finances: it was as if
government accountants spoke different
languages, not able to understand each
other.

As the first major reform introduced
under the PFM Reform Program, the
UACS is a government-wide harmonized
and single budgetary, treasury and
accounting classification system. It
seeks to harmonize all government
financial processesfrom budgeting and
cash management, to accounting and
auditby prescribing a single accounts
classification system: a common
language, so to speak.

The UACS simplifies the collection,
aggregation, consolidation, and
reporting of financial transactions across
government. It enables the oversight
agenciesCoA, DBM, and DoFto
The excessive number of bank accounts
of the government complicated the
monitoring of cash resources. As a
consequence, the government had to
borrow more than what it actually needs,
even if it had cash-in-bank that can
be used to fund the delivery of urgent
services.
share a common set of information and,
thus, avoid unnecessary duplications
in the reports that these require from
the agencies. It also facilitates the
management of financial reporting for
decision making.

The UACS was adopted for the first
time in formulating and implementing
the 2014 Budget preparation and is
now being implemented by all National
Government Agencies for budget
execution and accounting. It serves
as the necessary backbone of other
PFM reforms, such as the TSA and the
GIFMIS.
54
The core of PFM Reform
Government Integrated Financial
Management Information System
The TSA was introduced as a unified
structure of government bank accounts,
under the management of the DOF-
Bureau of the Treasury (BTr) and the
Bangko Sentral ng Pilipinas. The TSA will
enable the government to consolidate
its cash resources on a daily basis,
provide timely and accurate reports on
bank balances and funds movement,
and thus improve the management of
cash resources and debt. It will promote
transparency and accountability
by enhancing the clarity of income
and disbursements as well as the
management and accounting of funds.
The government could save much, much
more. For one, the TSA is expected to
provide the government with a clearer,
accurate, and real-time view of its
current cash positionenabling it to
reduce its borrowing costs that had
arisen from perceived cash shortages.
The TSA Reporting and Monitoring
System, managed by the Land Bank of
the Philippines, has started operations
beginning January 2014.
Ultimately, the PFM Reform
Program seeks to transition the
Philippine government from the
manual, fragmented, and inefficient
way of handling public finances,
to an automated, integrated, and
streamlined system that enables greater
transparency in government and greater
responsiveness to citizens needs.
As the centerpiece of the PFM Reform
Program, the GIFMIS is an integrated IT
solution that can collect and organize
financial information in a centralized
database. In essence, it is envisioned as
a one-stop shop of government financial
information throughout the PFM process:
budget preparation, management and
execution, accounting, and financial
reporting.
Together with the UACS, the TSA, and
other PFM Reforms, the GIFMIS will
provide the government with accurate
and real-time financial information,
enabling better analyses and better
policy decisions. It is expected to
eliminate redundant data and reporting
requirements, reduce administrative
costs and introduce better controls,
and make government finances more
transparent and accountable.
The Budget Preparation module of
GIFMIS is set to be rolled-out by 2015,
the complete GIFMIS solution is set
to be rolled out by 2016 for the use of
oversight and pilot spending agencies,
and the roll-out of GIFMIS for all other
Other PFM Reforms
Accounting and
Auditing Standards
Harmonization of
Financial Reports
Performance-Informed
Budgeting
Comprehensive Human
Resource Information
System
Management of
Contingent Liabilities
Change Management and
Capacity Building
agencies to be completed by 2018. After
the completion of the conceptual design
and technical specifications of GIFMIS
in 2013, the bidding for the development
of GIFMIS is in its final stages, with the
contract expected to be awarded in
2014.
55
OUTCOME-BASED PIB
Each peso spent by government must lead to real, tangible,
and measurable results. Thus, the Aquino Administration thus
took a bold move to transform the annual National Budget,
so it conveys a clear story linking budgetary outlays with the
targeted outputs to be delivered by government and, ultimately,
the desired socio-economic development outcomes.
Through the Performance-Informed Budgeting (PIB) the
governments committed performance targets are now
presented alongside the financial allocations. In rolling out
the PIB, the government built on earlier reforms, most notably
the Organizational Performance Indicator Framework, and
painstakingly reviewed the performance metrics of each
department and agency.
The government first adopted the PIB in formulating the 2014
Budget, which shows the performance indicators and targets
against the Major Final Outputs (MFOs), or the tangible goods
and services that government agencies commit to deliver
to their external clients. In formulating the 2015 Budget, the
Administration took a step further: Aside from the MFO-
based indicators, the indicators and targets on organizational
outcomesthe results or impacts of the agencies delivery
of goods and servicesare now indicated in the Budget. For
example: see infographic.
This move, which strengthen the intricate link among budgets,
outputs, and results, increases accountability for the use
of public funds. It enables not only the Executive but also
Congress and the public to better evaluate the performance of
departments and agencies and scrutinize budget performance.
Department of Social Welfare and Development
EXAMPLE
Organizational Outcome:
Improve the well-being of poor families
of Pantawid
Pamilya families
uplifted from
survival to
subsistence
of Pantawid
Pamilya families
uplifted from
subsistence to
self-sufficiency
50% 6%
Major Final Output:
Social Protection Services
Pantawid Pamilyang
Pilipino Program
Sustainable
Livelihood Program
Proposed Budget:
Pantawid Pamilyang
Pilipino Program
P64.7 B
Sustainable
Livelihood Program
P4.94 B
4.3 M families
served under
Regular CCT
126,963 families
served under
Extended CCT
265, 175 families
served under
micro-enterprise
employment
113, 647 families
facilitated for
employment
56
FASTER AND MORE EFFICIENT
BUDGET EXECUTION
Since the beginning of its term, the
Aquino Administration has exerted
efforts to remove loopholes and
bottlenecks in public spending, to
streamline the process of releasing funds
as well as implementing programs and
projects, and to make accounting of
the use of funds more streamlined and
accurate.
Consistent with the PFM Reform
Program, the Aquino Administration
rolled out major reforms to ensure the
fast and efficient implementation of the
Budget, including:
GAA-as-Release Document
Procurement Innovations
Through this policy, which was adopted
beginning with the 2014 Budget, the
approved General Appropriations Act
(GAA) already serves as the allotment
release document. This means that the
budgets of departments and agencies
except for items included in the negative
listare already considered released
to them when the GAA takes effect.
As early as day one of the fiscal year,
departments and agencies can already
Delays in the implementation of
programs and projects arise from the
process of procurement. To ensure the
timely procurement of programs and
projects, the government has introduced
the following innovations:
Instructing agencies to bid out their
projects before the GAA is passed, so
that contracts can be awarded as soon
as the GAA takes effect.
Strengthening agencies Bids and
Awards Committees and procurement
units.
Outsourcing pre-construction activities
like detailed engineering and design.
Defnition and Use of Savings and
Augmentation
The 2015 proposed Budget clarifies
the definition and use of savings and
augmentation in light of the government
policy to push agencies to spend their
budgets or to lose it. For one, it allows
the declaration of savings by the end of
the first semester, rather than towards
the end of the year, to give sufficient
time for the execution of augmented
programs and projects.
One-Year Validity of Appropriations
This helps fast-track the implementation
of programs and projects. To illustrate,
the 2015 Budget assigns a one-year
lifespan to all appropriations. This policy
encourages agencies to utilize their
allocated funds as early as possible
rather than carry them over to the next
fiscal year. It also makes the accounting
of the use of funds more straightforward
and transparent.
obligate their budgetsto enter into
contracts and roll-out programs and
projectswithout waiting for the release
of allotments (such as Agency Budget
Matrices and Special Allotment Release
Orders).
Early Bidding
Prior Fiscal Year
Budget is Enacted
December of Prior
Fiscal Year
GAA-as-Release
Document
Allotments Released
to Agencies on the 1st
Working Day of Fiscal
Year
Implementation of
Augmented Programs
and Projects
Remainder of Fiscal Year
Budget Utilized
Within the Fiscal Year
Contracts Awarded
As early as January
Early Implementation of
Programs & Projects
Within First Semester of
Fiscal Year
Savings Realized and
Used to Augment
Programs & Projects
After the End of the First
Semester
57
GRASSROOTS PARTICIPATORY
BUDGETING
The Aquino Administration introduced the Grassroots
Participatory Budgeting Process to give citizens a direct voice
in how the annual Budget is shaped and implemented. Piloted
in 2012 during the crafting of the 2013 National Budget, this
mechanism enables community organizations and local CSOs
to engage LGUs in the development of local poverty reduction
projects to be funded under the National Budget.
From its pilot implementation in 2012 which involved 595
cities and municipalities and resulted in P8.0 billion worth of
locally-determined poverty reduction programs and projects
integrated into the 2013 Budget, the Aquino Administration
has gradually expanded the Grassroots Participatory Budgeting
Process in crafting the 2015 Proposed Budget. The participation
of grassroots organizations in 1,590 cities and municipalities
is now covered and has resulted in a larger allocation of P20.9
billion.
Aside from empowering grassroots communities, the
Grassroots Participatory Budgeting Process seeks to make the
national government more responsive to local needs. It also
pushes for better local governance, as the participation of LGUs
in the program is contingent on their accomplishment of good
governance conditions, such as attaining the Seal of Good
Local Governance and improvement of their Public Financial
Management Systems.
ALLOCATIONS FOR GPB IN 2015 in millions
DA - various agriculture support projects 4,283
DENR - national greening program 324
DepEd - school facilities and furniture,
alternative learning, others
1,494
DILG - potable water supply, LGU capacity
development, others
5,753
DOE - household electrification 85
DOH - health facilities, rural health workers,
family health, disease control, others
1,473
DOLE - special program for employment of
students
444
DOT - tourism industry training, planning,
and product development
348
DSWD - social protection, sustainable
livelihood, community-driven development
2,717
DTI - industry clustering, microenterprise,
one town one product, others
614
NEA - sitio electrification, barangay line
enhancement
102
NIA - communal irrigation systems 179
TESDA - livelihood skills trainings 296
LGUs - integrated community food
production, local roads, roads
2,789
58
GLOSSARY OF FREQUENTLY-USED
BUDGETING TERMS
ALLOTMENT
DEBT SERVICE
ALLOTMENT CLASS
APPROPRIATION BUDGET DEFICIT
MAJOR FINAL OUTPUTS (MFOS)
REVENUES
Personnel Services
Appropriations, Automatic
Non-Tax Revenues
Tax Revenues
Appropriations, Programmed
Appropriations, Unprogrammed
Appropriations, New General
Appropriations, Continuing
Financial Expenditures
Maintenance and Other Operating
Expenditures (MOOE)
Capital Expenditure or
Capital Outlays (CO)
an authorization issued by DBM to
an agency that allows the latter to
incur obligation for specified amounts
contained in a legislative appropriation
A financial status in which government
expenditures exceed revenues
The sum of loan repayments, interest
payments, commitment fees, and
other charges on foreign and domestic
borrowings
Classification of government
expenditures:
An authorization made by law or other
legislative enactment, directing payment
out of government funds under specified
conditions or for specific purposes
Goods and services that a department/
agency should deliver to external
clients through the implementation of
programs, activities, and projects
Projected cash inflows like collections
from taxes, fees, and charges imposed
by government agencies, as well as
proceeds from grants
For salaries and other compensation
(e.g., salary increases, allowances,
honoraria) for permanent, temporary,
contractual, and casual employees of
the government; as well as retirement
benefits (e.g. terminal leave, retirement
gratuity)
Made annually or for a period as
prescribed by law, by virtue of a standing
legislation that does not require periodic
action by Congress
Fees, charges, and other government
collections in exchange for services
rendered and penalties imposed, among
others
Compulsory charges or levies imposed
by government on goods, services,
transactions, individuals, and entities,
among others (e.g., income tax, value-
added tax, and special taxes such as the
motor vehicle tax).
Appropriations in the GAA that are
supported by existing resources and can
be released during the year
Appropriations in the GAA that can only
be utilized when revenue collections
exceed targets, when new revenue
sources arise, or when loans are
approved for foreign-assisted projects
Legislated by Congress and enacted by
the President every fiscal year, such as
the General Appropriations Act (GAA)
Supports obligations (expenditures
incurred and committed to be paid by
the government) for a specific purpose
or project, even when these obligations
are incurred beyond the budget year
A new allotment class for management
supervision or trusteeship fees, interest
expenses, bank charges, and other
financial charges
Those that support the operations
of government agencies, including
those for supplies and materials;
transportation and travel; utilities and
other maintenance activities
For purchase of goods and services
that add to the governments assets,
including infrastructure outlays,
purchase of vehicles, and investments
in the capital stock of government
corporations
With the GAA-as-Release Document, the
enacted Budget itself serves as the allotment
release for all budget items except those
contained in a negative list, which require
the fulfillment of conditions and the eventual
issuance of a Special Allotment Release Order
(SARO).
These MFOs have corresponding performance
indicators according to quality, quantity, and
timeliness.
Examples of automatic appropriations in
the national budget are Internal Revenue
Allotments and debt service, among others.
In certain cases, non-tax revenues also include
the privatization of government assets.
The GAA enacts both programmed and
unprogrammed appropriations.
For definitions of more budgeting terms,
please download http://www.dbm.gov.
ph/wp-content/uploads/BESF/BESF2014/
GLOSSARY.pdf.
59
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