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Speeches

Philippine International Convention Center, Pasay City

speech 2017jan17 1

Secretary Benjamin E. Diokno, Ph.D.

Department of Budget and Management

 

To the representatives from the different National Government Agencies, magandang umaga sa inyong lahat.

          Exactly two weeks ago, the DBM issued the Budget Call for 2019 under National Budget Memorandum No. 129. I trust that you have read the issuance as it outlines the budget preparation guidelines and procedures for the formulation and submission of your agency budget proposals for 2019. Remember that we plan to submit the 2019 budget on the President’s State of the Nation Address on July 23rd.

          As you can see, we have a tight schedule. Finished or unfinished, you will submit your budgets.

          The Budget is what gives flesh and bone to any administration’s agenda. Your proposals should then reflect administration policies such as the President's 0+10-Point Socio-Economic Agenda, the Philippine Development Plan (PDP) and the priority programs and projects contained in the 2017-2022 Public Investment Program (PIP), and should incorporate the 2019-2021 Three-Year Rolling Infrastructure Program (TRIP).

Each of your agencies have a contribution to make so that the goals of this administration are achieved. It is important therefore that you craft your budgets according to your agency’s mandates. The same goes for your regional offices.

For Regional Line Agencies, only priority programs and projects that directly contribute to the Results Matrices of the PDP 2017-2022 should be included in the budgets.

As of the last Development Budget Coordinating Committee Meeting, the cash-appropriations projection for 2019 is P3.401 trillion. We have a carefully-crafted medium term fiscal program that determines the size of the budget. So avoid over-budgeting. Remember that budgeting is a zero-sum game. If your agency gets more than your fair share of the budget, then you deprive other agencies of resources that would allow them to deliver essential public services sooner. Limit your proposals to implementation-ready activities.

I say “cash appropriations projection” because the 2019 budget will be an annual cash-based budget. This means that your agencies can only incur contractual obligations and disburse payments for goods delivered and services rendered and inspected within that fiscal year, with an extended payment period of three months.

You have to make sure that your budget proposals reflect payment of goods and services that will actually be delivered for the year. You already had practice with the implementation of one-year validity of appropriations in 2017. I am happy to report that this change has effectively curbed underspending in the past year.

In the past we have underspending rates that go up to about 10-15 percent. Our own forecast is that underspending last year would be less than one percent because of the shift from a two-year budget cycle to a one-year budget cycle. Thus, we will continue the one-year validity policy for the 2018 budget, and finally, shift to cash appropriations in 2019.

Director Rolly Toledo of the Fiscal Planning and Reforms Bureau will discuss more on the implications of the shift to annual-cash after I give my remarks. Later in the program, some of our directors will lead the discussions on more specific aspects of budget preparation.

Today’s program also features an Open Forum. This is your chance to bring up issues and concerns related to the preparation of your agency budget proposals.

At this point, I am reminded of a lesson I teach in my Economics classes - on positive and negative externality.

          If you have a smart question, your professor will, hopefully, get back to you with a smart answer. It is not only you who benefits from this interaction but your classmates, too. That is a positive externality.

         

So don’t be shy. If you have a smart question, ask them.

On the other hand, there are those who asks questions just because they like to listen to their own voice. Avoid that. That’s a bad practice. When you hog the microphone, you preclude the others from asking the smart questions. You then impose negative externality on the group and this is such a big group.

          As the heads of your respective agencies’ budget, accounting and planning units, you will be leading the efforts related to the preparation of your agencies’ budget proposals. Today’s event will hopefully have you amply prepared for the work ahead of you. Rest assured that the officials and staff of the DBM will be with you every step of the way.

          Thank you very much everyone and have a productive forum.

January 16, 2018, 8:00 a.m.

Philippine International Convention Center, Pasay City

budget forum

 

As delivered by Secretary Benjamin E. Diokno, Ph.D.

Department of Budget and Management

 

           Magandang umaga sa inyong lahat, lalo na iyong mga galing sa regional offices.

          Today we set the course for the Execution of the 2018 Budget and for the Preparation of the Budget for next year, 2019.

          Of course, this would not be possible without each of your contribution. The 2018 budget, which was signed into law almost a month ago, is the result of your hard work. Thank you for the late nights you have spent at the Department working on the proposed budget, and then for your dutiful attendance to your respective agencies’ budget hearings in Congress.

          This afternoon, Usec. Tina will give you the guidelines for the release of funds of the 2018 budget and Director Weng will run through the general provisions of the General Appropriations Act, including items vetoed by the President.

          I trust that you will all actively participate in the open forum after. If you have any issues or clarifications you wish to bring up, please do so.

          At this point, I am reminded of a lesson I teach in my Economics classes - on positive and negative externality.

          If you have a smart question, your professor will, hopefully, get back to you with a smart answer. It is not only you who benefits from this interaction but your classmates, too. That is a positive externality.

          So don’t be shy. If you have a smart question, ask them.

On the other hand, there are those who asks questions just because they like to listen to their own voice. Avoid that. That’s a bad practice. You impose on negative externality on the group. This is such a big group. When you hog the microphone, you preclude the others from asking the smart questions.

So that’s the difference between positive and negative externality.

          As you know, this is also a forum on the preparation for the 2019 budget.

          The 2019 budget as you all know will be an annual cash-based budget. This is no small change. We are effectively changing the landscape for how government budgeting is done.

          We’re already succeeding, by the way. In the past we have underspending goes up to about 10-15 percent. Our own forecast is that underspending last year was less than one percent because we changed from a two-year budget cycle to a one-year budget cycle.

Director Rolly will discuss the implications of this shift after I give my remarks. After which, some of our directors will lead the discussions on more specific aspects of budget preparation.

Like the afternoon program, the morning program will also have its own open forum portion. Again, your participation here will benefit everyone. Just remember my note on positive and negative externality.

With the full adoption of the Budget and Treasury Management System this year and the shift to annual cash in the next, you will encounter some challenges and difficulties. I believe your experience thus far will have prepared you for these.

The difficulties you will experience in the adjustment period will not be for naught. From these, you will learn new things, be better equipped for even bigger challenges, and be able to cascade better systems to your subordinates in the Department. Of course, it is not just the Department that stands to benefit from these reforms but the greater public. Better systems means more effective public service delivery for the Filipino people.

          Salamat po and have a productive forum.

         

         

Philippine International Convention Center, Pasay City

budget forum

 

As delivered by Secretary Benjamin E. Diokno, Ph.D.

Department of Budget and Management

 

           Magandang umaga sa inyong lahat, lalo na iyong mga galing sa regional offices.

          Today we set the course for the Execution of the 2018 Budget and for the Preparation of the Budget for next year, 2019.

          Of course, this would not be possible without each of your contribution. The 2018 budget, which was signed into law almost a month ago, is the result of your hard work. Thank you for the late nights you have spent at the Department working on the proposed budget, and then for your dutiful attendance to your respective agencies’ budget hearings in Congress.

          This afternoon, Usec. Tina will give you the guidelines for the release of funds of the 2018 budget and Director Weng will run through the general provisions of the General Appropriations Act, including items vetoed by the President.

          I trust that you will all actively participate in the open forum after. If you have any issues or clarifications you wish to bring up, please do so.

          At this point, I am reminded of a lesson I teach in my Economics classes - on positive and negative externality.

          If you have a smart question, your professor will, hopefully, get back to you with a smart answer. It is not only you who benefits from this interaction but your classmates, too. That is a positive externality.

          So don’t be shy. If you have a smart question, ask them.

On the other hand, there are those who asks questions just because they like to listen to their own voice. Avoid that. That’s a bad practice. You impose on negative externality on the group. This is such a big group. When you hog the microphone, you preclude the others from asking the smart questions.

So that’s the difference between positive and negative externality.

          As you know, this is also a forum on the preparation for the 2019 budget.

          The 2019 budget as you all know will be an annual cash-based budget. This is no small change. We are effectively changing the landscape for how government budgeting is done.

          We’re already succeeding, by the way. In the past we have underspending goes up to about 10-15 percent. Our own forecast is that underspending last year was less than one percent because we changed from a two-year budget cycle to a one-year budget cycle.

Director Rolly will discuss the implications of this shift after I give my remarks. After which, some of our directors will lead the discussions on more specific aspects of budget preparation.

Like the afternoon program, the morning program will also have its own open forum portion. Again, your participation here will benefit everyone. Just remember my note on positive and negative externality.

With the full adoption of the Budget and Treasury Management System this year and the shift to annual cash in the next, you will encounter some challenges and difficulties. I believe your experience thus far will have prepared you for these.

The difficulties you will experience in the adjustment period will not be for naught. From these, you will learn new things, be better equipped for even bigger challenges, and be able to cascade better systems to your subordinates in the Department. Of course, it is not just the Department that stands to benefit from these reforms but the greater public. Better systems means more effective public service delivery for the Filipino people.

          Salamat po and have a productive forum.

         

         

57 culmination session

Good afternoon, everyone.

First of all, I would like to thank the Australian government for this worthwhile learning opportunity. Without their continued technical assistance to the Department, we would not have been benefited with Professor Stephen Peterson’s knowledge and expertise.

As you all know, Professor Peterson of the University of Melbourne is with us first and foremost to provide advice in the design and implementation of the budget reform. This is part of our arrangement as beneficiary of the PFM for Infrastructure project funded by the Australian Department of Foreign Affairs and Trade.

Professor Peterson has trained over 1,600 senior government officials from 54 countries. He has delivered this same course in the Harvard Kennedy School of Government. That’s how lucky you all are. So let’s give Professor Peterson a big round of applause to show how much we appreciate his efforts to provide you this Harvard-type course.

I understand that every Friday for the past eight weeks, select Senior Staff from the Central Office and Regional Offices went through a systematic overview of key issues in Public Financial Management, reviewing the fundamentals of government finances as well as learning key techniques and insights.

I hope you have made the most of the past eight weeks by committing your time and energy to reading the materials, actively participating in the discussions, and thinking deeply on the implications of your lessons to our own PFM system.

On the other hand, I am sure that with your years of experience as PFM practitioners, Professor Peterson had a lot to learn from you as well.
As quote-unquote high performing Senior Staff, you are already PFM experts in your own right. However, being in your respective units for a long, long time may have also given you tunnel vision. As PFM is a vast, dynamic field, budget officials can be, as Stephen says on his course objectives, “ siloed” in their work.

It is said that the best way to learn is through experience. True, but this is leaving out a very important aspect of learning. The best way to learn is to reflect on one’s experiences.

This is why we invest in your personal development despite the competence you have already proven to have. We want to give you that space to think about your work outside the requirements of your respective units. We want you to be able to step back, see the links between different silos, and identify where improvements can be made on budgeting as a whole.

Administrations come and go, and you, the career officials stay. You provide the stability of the administrative system. You bear the brunt of changes brought about by new policy directions and reform initiatives. You will be responsible for incubating these reforms, seeing them through from infancy to gestation to maturity.

So let me disclose to you why we need this program. As you know, the success of any major reform depends of at least two things: first, strong leadership support and second, the existence of good and competent men and women — a cadre of reformers– who will persevere through thick and thin to push through the reforms. That cadre of reformers is largely you. You are expected to be the torchbearers of PFM reforms for DBM and the entire bureaucracy.

You are also expected to cascade what you’ve learned to your second in command. In a fast-changing world, mentorship could spell the difference between success or failure. You should help prepare those next in line to ensure a consistent crop of competent PFM experts in the Department.

Again, thank you. Participants, for investing your time and energy in this course. Thanks also to those who helped organize this course.

Have a happy weekend, everyone.