South Asia Regional Forum on Mainstreaming
Managing for Development Results (MfDR)
Colombo, Sri Lanka
October 13-14, 2009
Introduction of Results-Based Budgeting
(RBB) and Best Practices
in the Philippines
By
NORA C. OLIVEROS
Director
Department of Budget and Management
PRESENTATION OUTLINE
Part I.
Public Expenditure Management (PEM)
Part II.
PEM Reforms
 Medium Term Expenditure Framework (MTEF)
 Organizational Performance Indicator Framework
(OPIF)
Part III.
Key Developments and Next Steps
Part IV.
Lessons Learned
PART I
PUBLIC EXPENDITURE
MANAGEMENT
Public Expenditure Management
(PEM)
Uses the budget as instrument
for ensuring desired results
PEM Framework
Medium Term
Philippine
Development Plan
Investment
Fiscal
Medium Term Fiscal
Plan
Medium Term
Public Investment
Program
Forward
Estimates
Paper on
Budget
Strategy
OPIF-Based Annual Budget
PEM Framework
Pursues:



Aggregate Fiscal Discipline
 Spending within affordable limits
Allocative Efficiency
 spending on the “right things” or “right priorities”
Operational Efficiency
 Providing goods and services at reasonable cost
Public Expenditure Management (PEM)

A holistic approach to budgeting that focuses on:

Policy reforms

Institutional arrangements

Management systems

Information systems

Attainment of policy results
PUBLIC EXPENDITURE MANAGEMENT:
FOCUS ON RESULTS
TWO MAJOR COMPONENTS that are mutually supportive

Medium-Term Expenditure Framework (MTEF)

Organizational Performance Indicator Framework (OPIF)
PART II
EXPENDITURE MANAGEMENT
REFORMS


MTEF
OPIF
MTEF

Whole of government framework



Strategic
Policy-based
Integral to annual budget cycle


Cost of existing policies
Sector strategies and priorities
MTEF Components
• Forward Estimates
 Determines fiscal space for new projects
 Validates agency budget proposals
• Paper on Budget Strategy
 Sets development priorities
 Identifies policy issues (opportunities,
threats)
 Provides options/choices for decisions
Forward Estimates (FE)*
 3-year future costs of existing
programs
 Existing policies automatically rolled
over into budgetary allocations on
annual basis
 Estimates updated at least annually
* to be undertaken before preparation of PBS
Paper on Budget Strategy (PBS)
 Development priorities
 Progress in meeting MTPDP objectives
 Issues based on sustainable policy
(opportunities, threats)
 Budget performance & pressure points
 Options/choices for decisions
 Preliminary ceilings
Organizational Performance Indicator
Framework (OPIF)
• Key to results-based approach in PEM
whereby government is able to:
 Establish priority expenditures
 Identify targets
 Assess accomplishments
 Report results
OPIF OBJECTIVES

Shift in emphasis from input-based to output-focused budgeting
 Inputs still important in assessing efficiency

Encourage departments & agencies to focus efforts on the
delivery of outputs relevant to their goals (outcomes)

Specify and document expected performance
department/agency and require accountability

Report to the public and Congress in clear terms on the efficiency
of output delivery by departments and agencies
of
each
Why OPIF Matters: the Government and Community

Increased effectiveness for core business
 Integrate agencies’ strategic and financial planning
 Links operations and strategies
 Links planning and budgeting processes

Improved efficiency in policy implementation and service
delivery
 Managers focus on results - the how, what and why
 Improved reporting and enhance transparency

Better resource allocation
 Improve the quality of budgetary decision-making
Why OPIF Matters: Department and Agencies

Greater clarity on agency roles, functions, and accountabilities

More predictable funding for core business
 Predicated on a reformed Plan-Budget process (esp. forward estimates),
better cash management, Contingency Reserve
 Greater control over internal resource deployment (i.e., managers
empowered to do so)

Better managed performance expectation
 What is achievable and realistic within funding constraints

Communication tool

Promote better workforce
 Encourages innovation
 More job satisfaction
Why OPIF Matters: Employees

Greater clarity on contribution to outcomes
 Through business planning and performance management process,
employees can see how their activities contribute to organizational
outcomes

Better job satisfaction
 Better task delegation, clear links to corporate goals

Improved performance Incentives
 potential to provide rewards for performance

Career Development
 Better communications between managers and staff, regular and
effective performance feedback, personal development an integral part
of performance management
OPIF Key Elements
OPIF
MFOs (Outputs)
Performance Indicators
(Output/Outcome-based)
Major Final Outputs (MFOs)

Goods and services that a department or agency is
mandated to deliver to external clients, funded by the
Budget
 Consumed
outside of the department or agency
(i.e., end user is external)
 Achieved through implementation of programs,
activities and projects (PAPs)

Contribute directly to attainment of organizational
outcomes

Within the control of the department or the agency
Performance Indicators

Performance measures for assessing MFOs and
outcomes

Quality,
quantity,
specifications
timeliness
and
cost
Performance Indicators (PIs)

The characteristics of well-formulated indicators are:
 SMART





S - specific
M - measurable
A - achievable,
R - realistic and
T - time-bound
 CREAM
 C – clear, precise and unambiguous
 R – relevant, appropriate and timely
 E – economic or available at reasonable cost
 A – adequate or sufficient to assess performance
 M – monitorable or can be independently measured
 Verifiable
Performance Targets (PTs)


Identifies specific ,planned level of results to
be achieved within an explicit timeframe.
Characteristics:



Expresses different dimensions of results e.g. quantity
(how much), quality (how good), or efficiency (least cost)
values
With specific timeframe or timeliness dimension
e.g. % increase in irrigation systems by (year), %
increase in yield/hectare by (year), % decrease in
cost of production/hectare by (year)
OPIF can best be understood by the
Logframe Approach

Logical framework (Logframe) is an analytic tool
that demonstrates the causal relationships between
different levels of expected results and the
underlying assumptions made about them.

The process provides information on the:

Why? an intervention needs to be carried out

Who? will benefit

What? are the benefits to the client, to society

How? the intervention is to be executed

Which? Strategies/factors are crucial for the
success of the intervention
OPIF ANALYTICAL FRAMEWORK
(Impact)
SOCIETAL GOALS
SECTOR GOALS
(Outcome)
(Outputs)
ORGANIZATIONAL OUTCOME Performance
MAJOR FINAL OUTPUTS
Indicator/s
P/A/Ps
(Inputs)
BUDGET
Targets
Programs/Activities/Projects (PAPs)
Key activities or integrated group of
activities (programs) and projects
undertaken by the
department/agency to achieve MFOs
OPIF PROCESS - SUMMARY

Identify and document Major Final Outputs (MFOs) and desired
outcomes

Identify the programs/activities/projects contributing to the MFOs
and organizational outcomes

Clarify link between outcomes, MFOs and PAPs

Find suitable Performance Indicators (PIs)

Sign off on OPIF logframe by department/agency heads
PART III
Key Developments and Next Steps
Key Developments
•
Phased installation of OPIF in whole of
government
FY 2007-2008 budget, 122 agencies have
established their logical framework, MFOs ,
PIs, and PTs , which were compiled and
submitted to Congress

FY 2009 budget, all remaining national
government agencies and 112 State
Universities and Colleges

Key Developments
• Published the OPIF Book (FY 2007, FY 2008
and 2009 budget)
Major

Final Outputs (MFOs) developed
Performance
Indicators (PIs) identified
Performance
Targets set
Budget Performance Assessment Reporting
system rolled out in 2008
Work in Progress

Capability building program

Results-Based Monitoring and Evaluation
Framework

Restructuring of Programs, Activities and
Projects for transparency and for clarity of
cost allocation by MFO

Agency Cascading of OPIF for advocacy and
ownership and accountability

MTEF refinements
Next Steps

Design and install RBME system to monitor and
use OPIF information for budget decisions

Shift to OPIF-based Appropriations for clearer
and more transparent budget

Advocacy/Communication Strategy for support
in the reforms

Institutionalize Corporate Planning to set
priorities, strategies and risk management
PART IV
LESSONS LEARNED
To manage and implement reforms





Leadership
Change Management Team
Reform champions
Wider participation of stakeholders
Support systems (IT, IFMIS, Incentive)
THANK YOU!!