Community of Practice on Managing for Development Results (CoP MfDR)

2007 Annual Meeting and Training Program22 October - 2 November 2007, Shanghai, China

Strengthening Strengthening Provincial/Local Planning and Provincial/Local Planning and Expenditure Management in Expenditure Management in

the Philippinesthe Philippines

Susan Rachel G. JoseDirector, Regional Development Coordination Staff

National Economic and Development Authority

National Government

Local Government Units (LGUs)

81 Provinces

115 Cities

1,510 Municipalities

41,995 Barangays

17 Administrative Regions

1991 Local Government Code(Decentralization Law)

1991 Local

Government Code

Devolved Responsibilities

Increased Financial Resources

Increased LGU autonomy to plan, finance and implement

social and economic services

Ratio to GNP

0

0.5

1

1.5

2

2.5

3

3.5

4

1990 2002 1985-1991

1997-2002

1992-1996

(Average)(Average)

LGU Spending as

Ratio to Government Spending Net of Debt Services

0

5

10

15

20

25

30

1990 2002 1985-1991

1992-1996

1997-2002

(Average)(Average)

Questions of Allocative Efficiency

Provinces

Municipalities

“. . . LGU officials do not fare well in predicting the expenditure preferences of their constituencies…” WB-ADB 2001

Mismatch in LGU spending and constituents’ needs

• Plan has no influence on investment decisions and the budget

• Plan lacks linkage with revenue collection and expenditure management

• Large dependence of LGUs on shares from national revenue thus limited resources to fund projects

• Weak linkages of local plans with regional/national plans• Multiplicity of plans and outdated planning guidelines

Poor plan-budget linkage

ActivitiesActivities OutputsOutputs OutcomeOutcome ImpactImpact

Guidelines Preparation

Five-volume set of guidelines

Provincial-municipal development efforts are complementary

NG and LGUs interface in their development efforts

Provinces and (to some extent) municipalities have improved capacities

Strengthened provincial governance particularly in the following areas:•choices in public spending•supervision over component LGUs

National/regional plans reflective of local aspirations and priorities

Advocacy Training

•JMC of Oversight

Agencies•Training of local

functionaries

Pre-training briefings/ workshops

•Draft PDPFP and PDIP and CDPs and CDIPs of component municipalities and cities•MOA with LGUs

Learning-by-doing workshops

•Refined PDPFP and

PDIP•Initial/draft feasibility

studies

Post-training consultations

•Approved PDPFPs,

PDIPs•Feasibility studies

PHASE

1

PHASE

2

NEDA-ADB Technical Assistance on Strengthening Provincial/Local Planning & Expenditure Management

ConsciousnessBuilding

Stage 1

CapacityBuilding

Stage 2

Application

Stage 3

Institutiona-lization

Stage 4

Stages of Transformation

PROVINCIAL/LOCAL PLANNING EXPENDITURE MANAGEMENT (PLPEM) GUIDELINES&

Volume 1: Integrated FrameworkVolume 2: Provincial Development and Physical Framework Plan (PDPFP)Volume 3: Investment Programming and Revenue GenerationVolume 4: Tools and Techniques on Budgeting & Expenditure ManagementVolume 5: Project Evaluation & Development

PlanningPlanning PPAs

PDIP/AIP

Implementation, monitoring and evaluation

Project Evaluationand Development

Investment Programming

RevenueGeneration

Budgeting

ExpenditureManagement

Budgeting

ExpenditureManagement

Planning-Programming-Budgeting-Implementation-Monitoring Cycle

What do we hope to What do we hope to achieve?achieve?

MTPDP/NFPP

RDP/RDFPRDP/RDFP

MTDIP

RDIPRDIP

PDPFPPDPFP

C/MDP/CLUP

C/MDP/CLUP

Impact and Information

Base

Impact and Information

Base

PDIP/AIPPDIP/AIP

C/MDIPC/MDIP

PPAOutcomes

PPAOutcomes

Annual BudgetExpenditure Plan

Annual BudgetExpenditure Plan

PPAsPPAs

Investment Programming and

Revenue Generation

Initial Screening and Prioritization of PPAs

Mid

- ter

m R

evis

ion

Impact Assessment Monitoring

Rea

lig

nm

ent

Pro

ject

Eva

luat

ion

A

nd

Dev

elo

pm

ent

Imp

lem

enta

tio

n

MTPDP/NFPP

RDP/RDFPRDP/RDFP

MTDIP

RDIPRDIP

PDPFPPDPFP

C/MDP/CLUP

C/MDP/CLUP

Impact and Information

Base

Impact and Information

Base

PDIP/AIPPDIP/AIP

C/MDIPC/MDIP

PPAOutcomes

PPAOutcomes

Annual BudgetExpenditure Plan

Expenditure PlanAnnual Budget

PPAsPPAs

Investment Programming and

Revenue Generation

Initial Screening and Prioritization of PPAs

Budgeting and PublicExpenditure Management

Mid

- ter

m R

evis

ion

Impact Assessment Monitoring

Rea

lig

nm

ent

Pro

ject

Eva

luat

ion

A

nd

Dev

elo

pm

ent

Imp

lem

enta

tio

n

PlanningPlanning Investment Investment ProgrammingProgramming

BudgetingBudgeting

MTEFNational Exp. Plan

Synchronized Planning-Programming-Budgeting

••••

MTPDIP

PDPFP

PDIP/AIPAdditional sources ofrevenues

LDIP

RDIPRDP/RPFP

City/Municipal

DevelopmentPlan

MTPDP/NFPPMTPIP

PDPFP PDIP/AIP

City/ Municipal

DIP

RDIPRDP/RPFP

••••Annual budgetDisbursementcontrol system

Provincial Expenditure

Program

MTPDP/NFPP ••

Multi -yrexpend planAnnual budgetDisbursementcontrol system

National Expenditure

Program

••••Annual budgetDisbursementcontrol system

City/Municipal Expenditure Program

NEDANEDA DBMDBM

DILGDILG

DOFDOF

RevenueGeneration & Administration

Budgetary Issuances

PLPEMGuides

CDP Manual

C/MDP

CLUPs

Harmonized efforts of oversight agencies

INVESTMENTPROGRAMMING

& BUDGETING

DRIVERS

PopulationEconomy

Physical Resources

SYMPTOMS

IncomeServices

Land Use2 GOALS

OBJECTIVES/TARGETS

3 STRATEGIES4 PROGRAMS

PROJECTSACTIVITIES

1 DEVELOPMENT ISSUES/ PROBLEMS

PLANNING ENVIRONMENT

•Percentage distribution of house- holds by type of housing unit occupied•Housing backlog•Proportion of households who informal settlers•Proportion of households with makeshift housing

Lack of affordable housing

Provide affordable Housing for xxHH in yy areas

Provide access to new housing sites

Improve sites/ services in yy areas

Private sector-led development of

affordable housing

Provide livelihood opportunities

PROJECTS/ACTIVITIESPROGRAMS

Skills developmentMicrofinance

Livelihood Program

CMP project in yy areas CMP program in yy areas

Access road construction project

New housing road access program

More responsive planning: emphasis on the planning logic

Project “wish list” is avoided

Iteratively developthe PDIP Financing Plan and Finalize the Investment

Schedule

Step 5

Legally adopt the PDIP

Step 6Update the PDIP

Step 7

PDIP Financing Plan and Investment

Schedule

PDIP Updated PDIP

Current year Slice for

Integration intoAnnual Budget

Establish PDIPPolicies

Step 1Develop and define

PrioritizationApproach

Step 2Formalize and rank the

list of development investment projects

Step 3 Analyze the development Development investment

capacity

Step 4PROCESS

OUTPUTS

INPUTS

Development Goals and Objectives from PDPFP

PPAs fromPDPFP

“Without PDIP”Revenue and expenditure

projections using the Tools and Techniques

for BPEM

Initial Annual Investment Financing Capacity Estimates

Fully Costed and Ranked List of Projects

PDIP PoliciesPrioritizationApproach and Criteria

PDIP Process Flow ChartPDIP Process Flow Chart

Identify additional revenue measures including revenues

from PDIP

Equal on an Annual

Basis?

No

Additional revenue measures

Estimate New Investment Financing Capacity

New Investment Financing Capacity

Finalize PDIP Financing Plan and Investment

Schedule

Formalize and rank the list of development investment projects

Step 3 Analyze the development Development investment

capacity

Step 4

Initial Investment Financing Capacity Estimates

Fully Costed and Ranked List of Projects

Yes

PDIP Financing Plan and

Investment Schedule

Iteratively develop the PDIP Financing

Plan and Finalize the Investment

Schedule

Step 5

Process Flow Process Flow of the Iterative of the Iterative Development Development

ofofthe PDIP the PDIP

Financing Plan Financing Plan & Schedule& Schedule

… and projects are linked with revenue sources

Improved LGU administration

• Rationalized planning work

• LGU functionaries coordinating with one another

• Provincial-municipal/city complementation

• Interface with national government agencies

• Improved LGU capacities

http://cop-mfdr.adb.org go to Rooms select CoP-PLPEM

Wider sharing of PLPEM Guidelines