FISCAL PLANNING

(Budgeting)
Matro, Stephanie Jewel L.
Talampas, Freazel Anne S.
Villanueva, Sofia Bettina T.
 Fiscal planning is not intuitive; it is a learned
skill that improves with practice.

Fiscal planning requires vision, creativity, and a

through knowledge of the political, social, and

Fiscal
economic forces that shape health care.

Planning It is a continuous process which involves

decision making about alternate ways of using
available resources with the aim of achieving
particular goals.

Planning helps to identify those deficiencies in

the economy and the social structure which
demand largest attention from the standpoint
of economic growth.
Basics of Budgets

• Budget
 a financial plan that estimates expenditures and revenues by an agent for a
stated future period.
 Budget is an operational plan, for a definite period usually a year, expressed
in financial terms & based on expected income & expenditure.
 Budget is a concrete precise picture of the total operation of an enterprise in
monetary terms.
• Fiscal planning requires flexibility, ongoing evaluation, and revision.
Purpose

• Budget supplies the mechanism for translating fiscal objective into

projected monthly spending pattern.
• Budget enhances fiscal planning & decision making.
• Budget clearly recognizes controllable & uncontrollable cost areas.
• It offers a useful format for communicating fiscal objectives.
• It allows feedback for utilization of capital money.
• It helps to identify problem areas & facilitates effective solution.
• It provides means for measuring & recording financial success with the
objective of the organization.
Steps in the Budgetary Process:
Assess
• Check what needs to be covered in the budget.
• Input from all levels of the organizational hierarchy, since budgeting
is most effective when all personnel using the resources are
involved in the process.
• A composite of unit needs in terms of manpower, equipment, and
operating expenses can then be compiled to determine the
organizational budget.
Steps in the Budgetary Process:
Develop a plan
• Fiscal-year budget can be broken down into monthly, quarterly,
or semiannual periods.
• Selecting time frame for budgeting is important.
• Budget is predicted too far in advance → ↑error.
• Budget is shortsighted, compensating for unexpected major
expenses or purchasing capital equipment may be difficult.
Steps in the Budgetary Process:
Implementation
• Ongoing monitoring and analysis to avoid inadequate or excess
funds at the end of fiscal year.
• Most units can expect some change from the anticipated budget,
but large deviation must be examined for possible cause and
remedial action must be taken if necessary.
Steps in the Budgetary Process:
Evaluation
• The budget must be reviewed periodically and modified as needed
throughout the fiscal year.
Principles of Budgets

• Budget should provide sound financial management by focusing on requirement

of the organization.
• Budget should focus on objectives and policies of the organizations.
• Budget should ensure the most effective use of scarce financial and non-financial
resources
• Budget requires that a programme activities planned in advance.
• Budgeting should include coordinating efforts of various departments establishing
a frame of reference for managerial performance.
• Setting budget target requires an adequate checks and balance against the
adoption of too high or too low estimate.
• Budget is prepared under the direction and supervision of the administrator of
financial officer.
Features of Budget

• It should be flexible
• It should be synthesis of past, present and future.
• It should be product of joint venture and cooperation of executives'
department head at different levels of management
• It should be the form of statistical standard laid down in the specific
numerical terms.
• It should have support of top management throughout the period of
its planning and supplementation.
Budgeting Methods

Incremental Budgeting
• multiplying current year expenses by a certain figure, usually the
inflation rate or consumer price index, this method arrives at the
budget for the coming year.
 simple and quick
 requires little budgeting expertise
 no motivation to contain costs
 no need to prioritize programs and services
Budgeting Methods

Flexible Budgeting
• Are budgets that adjust automatically over the course of the year
depending on variables such as volume, labor costs, and capital
expenditures.
• Costs can be allocated on a volume basis.

New Performance Budgeting

• Emphasizing outcomes and results instead of activities or outputs.
• The manager would budget as needed to achieve specific outcomes and
would evaluate budgetary success accordingly.
DEPARTMENT OF BUDGET
AND MANAGEMENT
Boncodin Hall, General Solano St., San Miguel, Manila
Secretary
Wendel E. Avisado
Undersecretary

Laura B. Pascua
Budget Policy and Strategy Group

Supervision of the Fiscal Planning and Reforms and

Budget Information and Training Service
Assistant Secretaries

Rolando U. Toledo
Budget Policy and Strategy Group

Supervision of the Fiscal Planning and Reforms and

Budget Information and Training Service
 BUREAUS COVERAGE AGENCIES
FISCAL PLANNING AND
REFORMS BUREAU
2/F, DBM Bldg. I, Gen.
Solano St. , San Miguel, YOLANDA R. REYES
Manila OIC-Director III
loc. 1201-1202; 8735-1782;
8735-1956 TF
yreyes@dbm.gov.ph
BUDGET INFORMATION
AND TRAINING SERVICE
DBM Bldg. I, Gen. Solano
VIVIEN V. LABASTILLA
St., San Miguel, Manila
OIC-Director IV
loc. 1104; 1105; 8736-2773
TF
vlabastilla@dbm.gov.ph
Gov’t adopts cash budgeting system to
enhance fiscal planning

According to Manila Bulletin last September 12, 2019,

President Duterte has signed Executive Order No. 91 authorizing the
shift from the current obligation budgeting to cash budgeting system
beginning fiscal year 2019 to hasten the utilization of the government
budget in a bid to enhance its fiscal planning and project
implementation.
Executive Order No. 91

Under the previous obligation budgeting, contracts awarded

within the fiscal year can be delivered even after the end of the year.
So, the new system limits incurring contractual obligations and
disbursing payments to goods delivered and services rendered and
inspected within the fiscal year and contracts should be fully delivered
by the end of the fiscal year to ensure prompt delivery of public goods
and services.
Internal Revenue Allocation (IRA)

Before: IRA is just based from the cities’ or the barangay’s internal revenue taxes,
but now it will be based from national internal revenue taxes.
“Just share”

wider range of sources, higher share

• Tariff and customs duties from customs
• 50% VAT from ARMM, 30% other national tax
• 85% of excise taxes from manufactured virginia/tobacco
• 5% of the 25% franchise taxes

Efficiently and expediently serve the filipino people

Internal Revenue Allocation (IRA)

IRA allocation of LGUs

• Census of population
• Master list of land area
Local Government Code

SOME TAXES:
• Transfer of real property ownership
• Business
• Franchise tax
• Professional tax
• Amusement tax

City hall fees

• Building permit
• Cedula
 2020 Budget for the City of
Manila: ₱17,857,086,146
This is the biggest budget to be passed and fastest to be signed by the
City Mayor, according to the Manila City Council.
Breakdown: Social Services
₱ 8,529,942,113. This is equivalent to 48 percent of the total budget.

• —-₱1,818,785,300: Social Amelioration Program which has 301,092 beneficiaries.

• Universities: ₱300,473,186 for Universidad de Manila (UdM) and ₱145,490,000
for Pamantasang Lungsod ng Maynila (PLM).
• Manila City Schools: ₱130,161,037 budget for next year for their operational
requirements.
• Environmental Management Efforts: ₱1,269,971,136
• Peace and Order efforts: ₱350,000,000
• Local Disaster Risk Reduction and Management Efforts: ₱742,590,482
• Housing Services (Land for the Landless program and the Vertical Housing
program): ₱300,000,000.
 General Services
₱ 4,109,796,562 or 23 percent of the budget.
Statutory and Contractual
Obligations
₱ 3,046,077,153 or 17 percent of the budget.
 Economic Services
₱ 2,171,270,318 or 12 percent of the budget.
City of Manila's 2020 Budget

Economic Services
12%

Statutory and Contractual

Obligations
17%
Social Services
48%

Social Services

General Services
General Services
23% Statutory and Contractual Obligations

Economic Services
Three (3) Billion Increase
2019 budget: 14.8 billion
2020 budget: 17.8 billion
Top 5 Allocations Per Office

• Manila Department of Engineering and Public Works (DEPW) would

get the highest budget allocation, amounting to ₱1,865,689,579.
• Office of the Mayor: ₱1,761,432,544
• Manila Health Department: ₱1,301,780,203
• Department of Public Services: ₱1,269,971,136
• Ospital ng Maynila Medical Center: ₱1,051,012,471.
 Manila City Mayor’s Plans

Urban Renewal Plan for Manila

- Infrastructure Development
- Attracting Businesses
- Urban Housing
 Urban Renewal Plan for Manila

- To build a new CBD called the Pandacan Greenfield City. It is a town which houses
knowledge-bases businesses and those involved in research and technology.
- An urban renewal of the old town will be built in the northwestern side of the city, which
is a Skydeck and pedestrian walk
- Conversion of Escolta into a retail and entertainment hub.
- Vertical parking buildings within properties owned by the city along with pedestrian
lanes to connect Binondo and Escolta.
- To attract more artists, writers and the theater community back to the district of Malate.
- A modern city hall beside the old one.
- Old city hall will be converted into a museum, cultural and retail center.
- Vertical mass housing
• 4.4 billion debt from previous administration
• Lower taxes to encourage business to stay in manila
• More business = more taxes

• GSIS debt paid off

• Previous administration were collecting from the salary of their employees,
but the money was never remitted to GSIS

City Mayor is asking for donations from ordinary citizens

Proposed Solutions

• The budget should be followed– stay within the city’s means

• Honesty and integrity of officials and employees should be a priority–
there should be consequences
• Investigate on the debt from the previous administration

Properly audit the cash flow, with external auditing

Be transparent with the income and expenses of the City