The Policy Development Process and the Agenda for Effective
Institutions: the Philippines
Gilberto M. Llanto
The Micro Foundations of East Asian Economic
Integration
Hotel Okura, Tokyo, Japan
February 26, 2007

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Implementing institutions
Supporting institutions: (a) coordinating body and (b) independent policy review institution
G M LLANTO- The Policy
Development Process and the
Agenda for Effective Institutions 2

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The paper discusses role of supporting institutions in the policy development process and offers suggestions on how to make them more effective.
G M LLANTO- The Policy
Development Process and the
Agenda for Effective Institutions 3

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Modest economic performance (GDP growth Q1 to Q3 at 5.4%; fiscal deficit,
2.7% of GDP in 2005; expected to decline to 0.9% in 2007.
Low level of productivity
Huge public debt
BUT growth potential is considerable
G M LLANTO- The Policy
Development Process and the
Agenda for Effective Institutions 4

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Need to accelerate economic policy reform efforts
As economies evolve, so should structures and institutions
Economic reform has to be continuous.
G M LLANTO- The Policy
Development Process and the
Agenda for Effective Institutions 5

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Coordinating institutions: National
Economic and Development Authority
(NEDA) and the Department of Budget and Management (DBM)
Independent policy review institution:
Philippine Institute for Development
Studies
G M LLANTO- The Policy
Development Process and the
Agenda for Effective Institutions 6

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Public expenditure management reform: (a) medium term expenditure framework (MTEF), (b) organizational performance indicator framework
(OPIF), and (c) accountability, monitoring and evaluation framework.
G M LLANTO- The Policy
Development Process and the
Agenda for Effective Institutions 7

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Outcomes and outputs framework: (a) support policy development process, (b) strengthen departments’ internal management and (c) strengthen external reporting for accountability purposes
G M LLANTO- The Policy
Development Process and the
Agenda for Effective Institutions 8

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Logical frameworks done for 20 departments
OPIF document to accompany the budget documents to be submitted to
Congress (national expenditure program,
President’s budget message)
G M LLANTO- The Policy
Development Process and the
Agenda for Effective Institutions 9

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Congress acceptance of three year
MTEF framework and OPIF which fosters accountability
Convincing congress that good economics is good politics; coordinating bodies (DBM, NEDA) need to improve technical and political skills
G M LLANTO- The Policy
Development Process and the
Agenda for Effective Institutions 10

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Philippine Institute for Development
Studies has statutory independence and capable research staff, but it is financially weak and dependent on government subsidy for operations.
G M LLANTO- The Policy
Development Process and the
Agenda for Effective Institutions 11

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Need to improve capacity of policy review institution
Australian experience shows benefits of good evaluation: (a) pinpoints accountability, (b) reduces cost, and (c) leads to good policy choices.
G M LLANTO- The Policy
Development Process and the
Agenda for Effective Institutions 12

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The policy development process needs supporting institutions: (coordination tasks as well as independent review)
Policy development process is not a disembodied phenomenon.
The message (content) of the reform is important but the medium (effective institutions, both implementing and supporting) is also critical.
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Development Process and the
Agenda for Effective Institutions 13

Thank you!
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Development Process and the
Agenda for Effective Institutions 14