In the Philippines, the journey towards results-based budgeting started as early as 1973. However, it was only in recent years that we were able to make headway in making the budget a truly performance-informed budget (PIB), where funding allocations are linked to performance measurements and goals.
Starting with the “new face” of the 2014 budget, Philippines’ budgets have included both financial and non-financial information, as opposed to previous budgets, which focused on numbers—financial data. The General Appropriations Act (GAA), as our national budget is called after it is enacted by Congress, now includes performance information on what agencies will deliver given the budget allocated to them. These agency commitments also have corresponding performance indicators against which the agency performance can be measured. In this way, agencies are made accountable for the delivery of their major final outputs (MFOs) or goods and services they deliver. The MFOs are based on the core mandates of the agencies. This new budgeting approach shifted the focus of agencies from inputs to outputs.
To further enhance performance-informed budgeting, the 2015 budget included additional information on organizational outcomes that the agencies are trying to achieve. So for the first time, our budget included both output and outcome information that helps measure the efficiency and effectiveness of agency programs, activities and projects.
We also reward good performance among our public sector employees through our Performance-based Incentive System (PBIS), which links bonuses to the achievement of performance measures in agency budgets. The PBIS includes a two-step ranking system: first a ranking of the units/offices within the organization and then a ranking of individuals within the units/offices concerned.
The movement toward performance-informed budgeting in the Philippines, like other governmental reforms we are currently implementing, faces challenges that have to be addressed to enable us to institute a genuine and straightforward performance budgeting system. The two most significant challenges include: 1) the need for further improvement in the quality and integrity of existing performance indicators; and 2) the need to strengthen the evaluation and reporting of agencies’ actual performance against their targets. Further improvements on these critical aspects, particularly in the area of monitoring and evaluation, could go a long way toward improving government outcomes in our country.
I was pleased to share insights on our experience in this area at the recent Evidence Works 2016 global forum in London. The gathering of like-minded people to discuss and share their experiences was a triumph for the participating governments and other institutions moving toward the use of evidence in policy and decision-making. The unselfish sharing by participants of what is being done in respective countries from around the world made the event a truly global and collaborative effort. There was a natural flow of information throughout the sessions and everybody was glued to what the panelists, facilitators, and contributors had to say. The forum also allowed participants to make connections that will facilitate an ongoing flow of information around the globe.
The event made a lasting impression on everyone who attended, especially those who have the influence to make a difference in the direction of policy and decision-making in their respective countries. For my part, I look forward to taking the lessons learned at the forum and working to implement many of those ideas in the Philippines.