Budget Framework

FY2004 Budget Forum7-9 May 2003

Department of Budget and Management

Fiscal Planning Bureau 2

Outline of Presentation

Medium Term Fiscal Program

Proposed 2004 Budget

Medium Term Fiscal Program

Proposed 2004 Budget

Fiscal Planning Bureau 3

Medium Term Fiscal Program

Fiscal Planning Bureau 4

GDP Growth6.3

5.46.15.7

6.05.85.35.8

5.34.94.2

0

1

2

3

4

5

6

7

2003 2004 2005 2006 2007 2008 2009

MTPDP

Revised

Inflation Rate

5.0 5.0 5.0 5.0

3.53.53.53.54.04.5

5.0

0

1

2

3

4

5

6

7

2003 2004 2005 2006 2007 2008 2009

MTPDPRevised

Revised Macroeconomic Targets

* Estimates of GDP growth rates (low-end) and inflation rates (mid-point) were based on DBCC-approved levels.

Fiscal Planning Bureau 5

-2.3

-0.9-0.4

0

-4.7-4.2

-3.6

-2.9

-2.1

-1.2

-0.2

-5

-4

-3

-2

-1

0

2003 2004 2005 2006 2007 2008 2009

MTPDP Revised

NG deficit(as % of GDP)

Fiscal Planning Bureau 6

Medium term Fiscal Program(as % of GDP)

Revenues 13.5 13.5 13.6 13.9 14.1 14.2 14.4 13.9

Disbursements 18.2 17.7 17.2 16.8 16.4 15.5 14.6 16.6

Deficit (4.7) (4.2) (3.6) (2.9) (2.1) (1.2) (0.2) (2.7)

2007 2008 2009 Ave.Particulars 2004 2005 20062003

Conservative projections No legislative measures; only existing

administrative measures

Fiscal Planning Bureau 7

Revenue and Tax Effort(% of GDP)

Revenue Effort, Medium Term vs. Revised

17.617.016.516.4

14.414.214.113.913.613.513.5

0

5

10

15

20

2003 2004 2005 2006 2007 2008 2009

MTPDP

Revised

Tax Effort, Plan vs. Revised

16.716.115.515.1

13.413.213.012.912.612.412.3 11.110.810.610.49.8 10.1 10.2

0

5

10

15

20

2003 2004 2005 2006 2007 2008 2009

MTPDPRevisedBIR tax effort

Fiscal Planning Bureau 8

Non-Tax Revenues(percent distribution)

0%

20%

40%

60%

80%

100%

2003 2004 2005 2006 2007 2008 2009

Others Fees and Charges Privatization

• Less dependence on privatization; P1 B in 2003-04, P0.5 B in 2005-09

Fiscal Planning Bureau 9

Expenditure by recipient entity(percent distribution)

0%

20%

40%

60%

80%

100%

2003 2004 2005 2006 2007 2008 2009

NGAs GOCCs LGUs Creditors, NL and CL

Average growth rate: %NGAs (0.04)GOCCs (5.2)LGUs 8.8Creditors 5.8

Fiscal Planning Bureau 10

Implications

only ongoing projects could be accommodated until 2009

no new projects until 2009 change in project duration need to review/rationalize all PAPs to free

up resources to accommodate new projects

Fiscal Planning Bureau 11

Review of all existing programs for restructuring/ streamlining

Imposition of a moratorium on the approval of all projects both locally funded and foreign assisted, unless savings are derived elsewhere

Rationalization of the cash management system through the Electronic Linkage Project

Measures like additional privatization proceeds shall be used to retire debt

Legislation of the debt cap and fiscal responsibility bills

Review of all existing programs for restructuring/ streamlining

Imposition of a moratorium on the approval of all projects both locally funded and foreign assisted, unless savings are derived elsewhere

Rationalization of the cash management system through the Electronic Linkage Project

Measures like additional privatization proceeds shall be used to retire debt

Legislation of the debt cap and fiscal responsibility bills

Expenditure Measures

Fiscal Planning Bureau 12

Proposed 2004 Budget

Fiscal Planning Bureau 13

Particulars 2003 2004

Revenues 584.1 634.2Disbursements 786.1 832.0Deficit (202.0) (197.8)

Percent of GDPRevenues 13.5 13.5Disbursements 18.2 17.7Deficit (4.7) (4.2)

Fiscal Position, 2003-2004(in billion pesos)

Fiscal Planning Bureau 14

Size of the Budget

P804.0 B P830.3 B 3.3%

2003Proposed

2004% Inc/Dec2003-2004

2003 2004 Inc/Dec

IRA 141.0 152.4 11.4

IP 223.2 268.6 45.4

Others* 439.8 409.3 (30.5)

*includes NG agencies

In billion pesos

Fiscal Planning Bureau 15

Policy Framework Debt reduction strategy Focus resources on the realization of the SONA

commitments and supporting the eight-point program of the government

Pursuit of public sector reforms --procurement reforms, public sector institutional strengthening

Implementation of the OPIF and SEER to enhance results orientation and improve service delivery

Debt reduction strategy Focus resources on the realization of the SONA

commitments and supporting the eight-point program of the government

Pursuit of public sector reforms --procurement reforms, public sector institutional strengthening

Implementation of the OPIF and SEER to enhance results orientation and improve service delivery

Fiscal Planning Bureau 16

Thank you . . .

Budget Framework