DEPARTMENT OF BUDGET

AND MANAGEMENT

Legal Basis

z Executive Order No. 25 (April 25, 1936) created a Budget Commission under the Office of the President.
z Presidential Decree No. 1405 (June 11, 1978) converted the Budget Commission into the Ministry of the
Budget (renamed in 1981 to Office of Budget and Management) and gave its head the rank and status
of a member of the Cabinet.
z Executive Order No. 292 (July 25, 1987), the Revised Administrative Code of 1987, elevated the Office
of Budget and Management into the Department of Budget and Management (DBM).
z Executive Order No. 95 (April 28, 1999) modified the DBM’s organizational structure, functions,
nomenclature, and operational processes.

Mandate

The Department of Budget and Management (DBM) formulates and implements the National Budget to
support national socio-economic plans and objectives and ensures the efficient and sound utilization of
government funds and revenues. It establishes and administers a unified government compensation and
position classification system.

57
LOGICAL FRAMEWORK (DBM)

Societal Goal
Economic Growth Towards Poverty Reduction

Sectoral Goals
Fiscal Strength Good Governance
Organizational
Outcomes

Fiscal Discipline Effective Resource Allocation Efficient Government Operation

MFOs
Budget Performance Monitoring
Agency Budget Budget Release
and Management and Evaluation
and Management Services Services
Policy Services Services

P/A/Ps
z Conduct fiscal policy z Implement annual and Monitor and analyze
research, budget z Manage/administer z
medium-term the expenditure the financial and
planning and expenditure program physical performance
programming and program at agency
at agency level level of agencies
provide technical
secretariat services to z Prepare government
z Prepare the annual Issue fund release
the DBCC z budget performance
national budget documents
z Formulate policies, reports for the
standards, guidelines President, DBCC, and
z Provide technical
on systems and other stakeholders
advice to NGAs/
procedures improve- GOCCs/ LGUs on z Assess the
ments, internal control public expenditure implementation of
systems, cost reduction and organizational policies, standards,
measures, asset management reforms guidelines on public
management, financial and productivity expenditure and
and management improvement organizational
accountability measures management reforms
framework and other
z Assess the
productivity-related Evaluate
z
implementation of policies,
measures organization, staffing, standards, guidelines on
z Formulate policies, compensation and productivity improvement
standards, guidelines position classification and compensation,
on budget operations, proposals staffing and position
and on organization,
classification
staffing and compen-
sation; maintain a z Assess the
unified compensation implementation of GOCC
and position classifica- governance and
tion system for NGAs/ performance
GOCCs/ LGUs requirements

58
 PERFORMANCE MEASURES AND TARGETS
(Amounts in Thousand Pesos)
FY 2007 FY 2008 FY 2009
Particulars
Actual/Amount Target/Amount Target/Amount
MFO 1
Budget and Management Policy S ervices 96,572 124,353 117,603
Forward Estimates (FEs)
FEs regularly updated FEs reformulated Semi-annual1 Annual1
1
once
New project proposals considered in FE updates Initial Project Appraisal Project Appraisal
Guidelines used in FE Guidelines finalized
updating and used in FE
updating
Forward estimation computerized Diagnostic study for FE computerization
FE computerized started
System completed

Paper on Budget Strategy

Recommendations on strategic priority expenditures 100% Acceptance Rate 2 90% Acceptance Rate 2 90% Acceptance Rate 2
and policies under the Paper on Budget Strategy
(PBS) accepted by the Executive Technical Board
(ETB) of the Development Budget Coordination
Committee (DBCC)

Systems and productivity improvement policies,

standards and guidelines
National Guidelines on Internal 100% Adoption NGICS rolled out
3
Control Systems (NGICS) Rate in 2 areas each in
4 pilot
departments
Government Quality Management 100% completed
Systems Standards (GQMSS) and accepted by
3
resource persons
Organization, staffing, position classification 12 issuances 5 issuances 20 issuances
4

and compensation policies, standards and guidelines

Proposed Salary Standardization Part 3 (SSL3) Bill Moved to FY Submitted to IRR drafted
5 rd
2008 Congress by 3
Quarter
Standards and guidelines on the grant of staffing Issued by 2
nd

flexibility to agencies Semester (Moved

to FY 2010) 6

1
FEs reformulated instead of updated. Semi-annual target for FY 2008 awaiting operational automated FE system which is being developed.
2
100%/80% target. All recommendations accepted by the ETB-DBCC under an iterative consultative process. FY 2008 target raised from 80%
to 90% due to high FY 2007 performance.
3
Completed and accepted by resource persons from agencies which have implemented/are implementing ISO-QMS. Propagation of GQMSS
assumed by DAP as lead agency for capacity building.
4
Higher numerical target due to anticipated impact of SSL3 subject to Congressional enactment by FY 2008. Target issuances include (1) EO
Implementing SSL3; (2) 3 IRRs on SSL3; (3) 4 Revised Indices of Occupational Services, Occupational Groups, Classes and Salary Grades
for NGAs, GOCCs, Local Water Districts, and LGUs; (4) Issuance on Salary Grade Definitions; (5) Issuance on Class Summaries; and (6)
10 Issuances on Allowances, Benefits and Incentives.
5
Deferred to FY 2008 to allow ample time for deliberation and approval by the 14th Congress. Draft bill completed.
6
Conditional to full institutionalization of OPIF and upgrading of the Government Manpower Information System (GMIS)

59
Bud get op erations stan dards an d g uid elines 8 8 issuances 7 3 1 issuan ces 8 11 issua nces at
le ast9
N GAs/GOC C s stand ards and guidelin es 8 3 issuances 10 2 2 issuan ces 10 5 issuan ce s a t least10
LGU stand ards and guide lin es 5 issu ances 9 issu ances 6 issuan ce s11

IR R and gu ide lin es required u nde r the GAA 10 IR R /g uid elines

drafted /issu ed 12

MFO 2 1 89,0 30 235 ,180 227 ,12 0

Ag en c y B u d g et a n d M an a g em en t S ervice s

Bud get do cumen ts: (1) N ation al Ex pen diture Pro gram 5 documents su bmitted 6 documen ts su bmitted 5 d ocu me nts submitte d
(N EP)/Preside nt's Bu dge t; (2) B udge t o f Ex p end itu re w ithin 30 day s from w ithin 30 day s from w ith in 30 d ay s fro m
an d Sou rce s o f F inancin g (BESF ); (3) Orga nization al o pening of C o ngress o pen ing of C o ngress ope nin g of C ong ress
Performance In dicator F ramew ork (OPIF ) Book;
(4) Staffin g Summary ; (5 ) Preside nt's Bu dge t M essag e 1 OPIF Book 1 OPIF Bo ok
(PBM ); and (6) D eta ils of Progra ms an d Projects of submitte d w ithin su bmitted w ith in
Selected Age ncies the y ear 1 w ee k a fte r
bud get su bmission

T rainin g o n pu blic e x pe nditure and organ izationa l 3 trainin g cond ucted 1 9 tra ining 14 trainin gs
mana gemen t reforms con ducted co ndu cted
N GAs including GOC C s 3 trainin g cond ucted 8 training cond ucted 8 train ing s con ducted
LGU s 1 1 tra ining 6 train ing s
con ducted 13 co ndu cted 13

T echn ical assista nce to age ncies to implement reforms

OPIF -based budg et of d epa rtments a nd a gen cies Implementation in OPIF - Imp lemen tation in all Imple me nta tion in a ll
to su ppo rt bu dget prop osal rea dy a gen cies: 20 d epa rtments, a ttached dep artmen ts, attache d
d epartme nts a nd 3 0 a gen cies and OEOs age ncies, OEOs, F AAs
OEOs and SU C s

Procurement R efo rms tra ining

R A 9184 and its IR R 8 3% of LGU s; 1 22 train ing fo r
Phil. Bidding D ocumen ts 8 9% of LGU s; p rov ince s, citie s
R A 9184 and PBD s 3 0% of N GAs; a nd mun icipa lities
Ge neric Procuremen t M anu als 4 8% of LGU s
3 % of N GAs
R ationa lizatio n Pla n (R Ps) 14 1 0 de partme nt R emain ing 8
R Ps app rov ed 14 dep artmen t R Ps
app rov ed 14
9 or 32 % of agen cy 1 2 ag ency R Ps R emain ing 2
R Ps app ro v ed 15 a pprov ed 15 age ncy R Ps
app rov ed 15
3 su bmitted GOC C 3 GOC C R Ps 20 re ma ining
R Ps app ro v ed 16 a pprov ed 16 su bmitted GOC C
R Ps a pprov ed 16
7
88/29 target issuances, including 83/22 CLs, NBCs, BCs, JMCs, JCs, CCLs, CBMs, and BEGs for NGAs and GOCCs and 5/7 for LGUs.
8
54/31 target issuances including 49/20 for NGAs and 2 for GOCCs and 5/9 for LGUs.
9
Target covers at least 4 NGAs, 1 GOCC and 6 for LGUs, including (1) Budget Call for NGAs; (2) FY 2010 Budget Call for GOCCs; (3) NCL on
the Submission of New Spending Proposals; (4) BEGs; and (5) OPIF Manual, 1st Ed.
10
83/22 target for FY 2007 and 42/22 target for FY 2008 for NGAs and GOCCs. FY 2009 target confined to at least 4 major annual issuances: (1) Budget
Call for NGAs; (2) NCL on the Submission of New Spending Proposals; (3) Budget Call for GOCCs; (4) One major BEGs; and (5) OPIF Manual.
11
Target includes: (1) Updated Budget Operations Manual for Barangays; (2) Inputs to the Revision of the LGC; (3) LBMs; (4) Guidelines and
Procedures for the Release of LGU Special Shares from Burley Tobacco, Mini-Hydro, National Wealth and Other Prior Shares; (5) PS
Expenditure Policy for LGUs; and (6) Manual for the Financial Management of Local Economic Enterprises (LEEs).
12
10/32 IRRs/guidelines. Target confined to those within the full control of DBM. (1) Use of Income; (2) Use of Excess Income; (3) Restrictions on the
Use of Government Funds; (4) Fiscal Discipline Measure in Government Operation; (5) Year-End Bonus and Cash Gift; (6) Honoraria; (7) Quarters
Allowance; (8) Hazard Pay; (9) Institutional Strengthening and Productivity Improvement in Agency Organization and Operations and Implementation
of Reorganization Mandated by Law; and (10) Service Contracts. Others will be prepared in partnership with other agencies.
13
FYs 2008 targets include 7 training by ROCS including 4 cluster training on LMC No. 1 S2007 and 3 cluster training on the Revised Updated Budget Operations
Manual (RBOM). FY 2009 targets include 2 training by ROCS. FY 2009: (1) Roll-out Training on the RBOM; and (2) Training on the Operations of LEEs. List
is net training conducted by the ROs related to the advocacy of public expenditure and organizational management reforms at the LGU level.
14
Initial overall target: 20 departments net of those exempted from the Government Rationalization Program (GRP): 2 or 10% in FY 2006; 12
or 60% in FY 2007; 6 or 30% in FY 2008. Adjusted FY 2008 target will be 10 or 50% department RPs approved. FY 2009 target represents
40% based on emerging FY 2008 scenario.
15
Initial overall targets: 28 OEOs/Other Agencies net of those exempted from the GRP: 1 or 4% in 2005, 4 or 14% in 2006, 20 or 71% in 2007 and
3 or 11% in 2008. FY 2008 target will most likely be 12 or 43%.
16
Initial overall targets: 60 GOCCs net of those exempted from the GRP, 9 or 15% in FY 2006, 22 or 37% in FY 2007, 29 or 48% in FY 2008.
Adjustments: 32 submitted RPs out of 62 GOCCs, 7 or 7% approved from FY 2004-2006, including 3 prior to EO No. 66; 3 or 9% in FY 2007,
3 or 9% in 2008. FY 2009 target represents the remaining 20 submitted RPs.
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 T ech nical a dv ice o n bu dg e t, org a nizatio n, sta ffing
an d comp e nsa tion for N G As, G O C C s a n d LG U s

Q u eries a n d req ue sts 9 5% ra te o f 1 00 % rate of 1 00 % rate of

d isp osition 17 d isp osition 17 d isp osition
Bu dg e t co nsu lta tion s/fo ru m 1 00 % o f 1 00 % of 3 ma jo r
re qu ire me nt re qu ireme n t co nsu ltatio n fo ra
co nd ucted 18
C o rpo rate O p era tin g B ud g et (C O B ) re v ie w 8 0% of C O Bs w ith 1 00 % of C O B s w ith 1 00 % of C O B s w ith
complete do cume n ta tion co mplete co mple te
re v iew e d w ith in 9 0 da y sd ocu me ntatio n d ocu me ntatio n
from da te re ceiv e d re v ie w ed w ith in 9 0 re v ie w ed w ith in 9 0
d ay s from da te d ay s from da te
re ceiv e d re ceiv e d
LG U b ud ge t rev iew 1 00 % o f b ud ge ts 1 00 % of b ud g ets 1 00 % of b ud g ets
sub mitted re v ie w ed su bmitte d re v ie w e d su bmitte d r ev ie w e d
w ith in 9 0 da y s fro m d ate w ith in 9 0 da y s fro m w ith in 9 0 d ay s fro m
re ce iv e d d ate rece iv e d d ate re ce iv e d

MFO 3
B u d g et R elea se S e rv ic es 1 32 ,5 26 1 65 ,5 1 6 2 67 ,2 84
F un d rele ase p rog rams
C a sh R e lea se P ro gra m (C R P) 1 00 % p ro gra m 1 00 % pro g ram C R P issu e d 1 0
a dh ere n ce a dh e ren ce d ay s b efor e start
o f qu ar te r
F un d rele ase d ocu men ts
N G As in clu ding G O C C s Issu ed w ith in 1 0 da y s Issu ed w ith in 1 0 d ay s N C A issu e d w ithin 10
b efore start o f pe rio d b efor e start o f pe riod d ay s a fter issu an ce o f
cov e red 19 co v e red 19 CRP
LG U s Issu ed w ith in 1 0 da y s of Issu ed w ith in 1 0 d ay s Issu ed w ith in 1 0 d ay s
the p eriod co v e re d 20 o f th e pe rio d cov e red o f th e pe rio d cov e red

MFO 4
P erfo rm an ce M o n ito rin g a n d Ev alu atio n S e rvic e s
1 00 ,4 48 1 37 ,4 3 4 1 17 ,9 22
B ud g et Pe rfo rma nce R e p ort M o nthly Bu dg e t
P erforman ce R ep ort
su bmitte d w ithin 30
d ay s o f refere n ce
mo n th 0 % -5 %
v aria nce o f re lea ses
to AR P /G AA

O P IF -ba sed a ge ncy p erfo rman ce 1 00 % o f a ge ncy 1 00 % of O P IF -re a dy 1 00 % of a ge n cie s

re v ie w co nd ucted cov e rag e ba sed o n a ge n cie s21
AP R
A ge n cy P erforman ce R atin g Sy ste m/ AP EX sy stem/ Impleme n ta tion
G u ide line s g uide lin e p ilote d 22
formu la ted 22
O P IF -ba sed b ud ge t p rep ara tio n an d ex ecu tio n fo rms S imp lifie d/
a n d r ep ortin g sy stems D e v elop ed
TO TAL 5 18 ,5 76 6 62 ,4 8 3 7 29 ,9 29
NOTE: The amounts are exclusive of the following: FY 2007 Payment of GSIS Retirement and Life Insurance Premiums (employer share-
P294,196,062 and employees share-P265,126,288, inclusive of arrearages of P45,358,993) for the Autonomous Region in Muslim Mindanao
(ARMM) remitted directly by the DBM to the GSIS per GSIS-ARMM-DBM MOA dated March 4, 2004 and for prior years deficiency of
P68,669,669 (AFP-PNP GSIS deficiency, 1996-1998-P484,969,639.41, Barangay Insurance Premium, 1996-1999-P111,700,028 and AFP-
PNP PHIC deficiency-P85,000,000; FY 2008) and FY2008-FY2009-Construction of DBM Building for P187M and P120M, respectively.

17
95/100% disposition rate due to incomplete submissions. Not considered as a target in FY 2009 since demand driven
18
Major consultation fora to facilitate monitoring (1) Budget Forum for NGAs; (2) Budget Forum for GOCCs; (3) Agency Forum for MTEF/OPIF
Reforms; (4) Technical Budget Hearings; and (5) Agency Performance Reviews
19
Applies to Allotment Authorities (AAs), Notice of Cash Allocation (NCA), Non-Cash Availment Authority (NCAA), Cash Disbursement
20
Pursuant to the reglamentary period stipulated by the Local Government Code.
21
Agencies without OPIF will be reviewed based on their APRs.
22
DAP was commissioned by DBM to undertake the review of pilot agencies using APEX.
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 FY 2009 MFO BUDGET

By MFO/By Expense Class

Particulars PS MOOE CO TOTAL %S HARE
MFO 1
Budget and Management Policy Services 68,052 34,019 15,532 117,603 16.11%
MFO 2
Agency Budget and Management Services
127,674 75,859 23,587 227,120 31.12%
MFO 3
Budget Release Services 83,276 130,304 53,704 267,284 36.61%
MFO 4
Performance Monitoring and Evaluation Services 68,934 34,105 14,883 117,922 16.16%
TOTAL 347,936 274,287 107,706 729,929 100.00%
%S hare 47.67% 37.58% 14.75% 100.00%

By MFO
(Total Budget = P729,929,000)

MFO 4 MFO 1
16.16% 16.11%

MFO 2
MFO3 31.12%
36.61%

By Expense Class
(Total Budget = P729,929,000)

CO
14.75%
PS
47.67%

MOOE
37.58%

MFO 1: Budget and Management Policy Services include (1) the formulation of development budgeting and fiscal resource budgeting
policies, (2) development of budget and organizational management policies, standards, guidelines and systems and procedures,
and (3) aggregate and sectoral budget planning, including the formulation of agency budget ceilings.
MFO 2: Agency Budget and Management Services include (1) agency budget planning and advice; (2) budget preparation and approval;
and (3) implementation of budget and organizational management policies, standards, guidelines and systems and procedures.
MFO 3: Budget Release Services include budget programming and execution.
MFO 4: Performance Monitoring and Evaluation Services include (1) budget tracking and control, (2) monitoring and evaluation of physical
and financial performance of agencies, (3) monitoring and assessment of organizational effectiveness, and (4) monitoring of
macroeconomic and fiscal developments as they impact on expenditures.

62