BUDGET ANALYSIS
for
ALTERNATIVE
BUDGETS
and
PARTICIPATORY
BUDGETING: Part I
by
PROF. LEONOR MAGTOLIS BRIONES
Co-Convenor Social Watch Philippines
Presentation at “Building an Asian Community of
Practice on Monitoring and Budget Analysis”
9-11 July 2007, Phnom Penh, Cambodia
• at present, many civil society organizations already do
analyses of their governments’
budgets, especially for social development issues they
are advocating, like MDGs
• this is because they are aware that government
commitments and promises are meaningless and can’t
be implemented without proper budgetary support.
• at the same time, many civil society organizations
recognize that it is not sufficient to do budget analysis.
• they do budget analysis with the objective of moving
forward to participatory budgeting and alternative
budgets
 the objectives of this afternoon’s session are:
• to analyze the budget process common to many
developing countries
• identify the entry points where civil society
organizations can intervene and possibly participate,
as well as the skills which are necessary
• to analyze the cases of Porto Alegre in Brazil and
the Philippines in participatory budgeting and
alternative budgets
• to examine specific situations in eleven Asian
countries, focusing on India, Bangladesh and
Cambodia; identify successful interventions in the
budget processes of these countries; and
•To identify further capacities and skills
which are needed
Limited people participation in the budget process of
many developing countries
 historically , the national budget is prepared by the executive
with minimal participation from the people
 consultation is at the discretion of the agencies and/or congress
or Parliament
 the budget starts as a bureaucratic exercise and ends up as a
political document
 as a result, the budget is more responsive to the bureaucrats’
and legislators’ perception of national priorities than what the
people actually need
Understanding the budget process
 in order to participate effectively and the budget
process, it is important for civil society organizations to
be conversant with the different phases of the budget.
 CSOs can identify possible entry points for their
advocacies.
The budget process: an overview
There are four stages in the budget process
 budget preparation
 budget legislation
 budget implementation
 budget accountability
Budget preparation
 determining the budget priorities
 The budget is the national development plan
expressed in financial terms.
 It is prepared on an annual basis; the trend now is
towards multi-year budget.
 since resources are very limited, these have to be
prioritized. It is the president who determines the
budget priorities
Budget preparation
 determining the budget priorities
 entry point for CSOs. They can already
participate by critiquing or praising the government’s
preferred budget priorities
 for example, in the 2006 budget of the Philippines,
the President’s priorities were reflected in “breaking the
odds.” The priorities did not include three MDG
goals: health; gender and the environment
 for the 2007 budget, there were only three priorities:
education, agriculture, and infrastructure
Budget preparation, cont’n….
 the role of the DBCC in the Philippines
 In many countries there are mechanisms for
determining the macro economic targets of the
budget. In the Philippines it is the DBCC.
 The Development Budget Coordination Committee
(DBCC) determines the macro-economic framework of
the budget
 The DBCC is headed by the DBM as Chair and
the members are from Dept. of Finance and its three
bureaus—the Bureau of the Treasury, the Bureau of
Internal Revenue and the Bureau of Customs—and
the Bangko Sentral ng Pilipinas (BSP)
Budget preparation, cont’n….
 the role of the DBCC
 The DBCC formulates the macroeconomic assumptions on
exchange rates, interest rates, balance of trade, in additions to
projections of GDP and GNP growth and employment rates
 It also consolidates forecasts on levels of revenue,
expenditures and borrowing
 the DBCC also determines the sectoral allocations of the
national budget
 entry point for CSOs – sectoral allocations , e.g. economic
viz social development; debt service viz productive
expenditures, etc.
Budget preparation, cont’n….
 the budget call and the agency budgets
 once the macro aspects of the budget are
determined, the Ministry or Department of Budget
issues the budget call to the agencies
 the call sets the floor and ceiling for the agency
budgets as well as for specific regulations on personnel
services, maintenance and rating expenditures, as well
as capital expenditures
 entry point for CSO’s- engaging the agencies on
programs and projects which should be included in the
budget proposals
Budget preparation, cont’n….
 conduct of hearings by the DBM and integration of
agency budgets by the DBM
 because of the crucial role of the executive,
particularly the DBM, the hearings conducted by it are
even more important than that of Congress or Parliament
 the final step in the budget preparation process is
the integration of the budget, printing of the
documents and submission to Congress or Parliament.
 entry point for CSO’s-review of the documents to
ensure everything is in order. In the 2007 budget, an
entire section was missing. This was the set of
statistical tables on financing the deficit.
Budget Legislation
 this is the phase when the national budget is formally
legislated by both houses of Congress; the President may or
may not exercise veto power; deadlocks and stalemates may
ensue.
 entry points for CSO’s: detailed review of the documents;
briefing for CSO’s and congressional partners
 CSO’s determine how much is actually needed to attain
social development goals like the MDGs
 By comparing the finacial requirements with the
actual budgetary allocations financial gaps are determined
 preparation of alternative budgets by CSO and
congressional budgets
 presentation of alternative budgets
Budget Legislation, cont’n….
 participation in congressional hearings
 media and communications work before
and after congressional approval of budget.
 working with the Parliament and the
Bicameral Committee
 mobilization to increase pressure
Budget implementation
 this is the implementation phase of the budget
 entry points for CSO’s: monitoring actual
implementation of the budget Philippine example:
CSO reaction to food for schools program. Last April
9, DepEd distributed rice to pre school children and
their families even if schools were closed
Budget Accountability
 this is the last phase of the budget process
where accountabilities of the implementing
agencies are established
 entry points for CSO’s- utilize audit
reports to demand budget accountability;
example: reports on special funds, fertilizer
funds; Swiss accounts of former Pres. Marcos
in the Philippines, for example
 the budget process can be utilized to
increase budget allocations for MDGs and
social development
 the entry points provide invaluable
opportunities to project CSO advocacy, engage
government and communicate with the public