INTRODUCING RESULTS-BASED APPROACHES INTO PUBLIC SECTOR MANAGEMENT PROCESSES: The Philippine Experience

Transcription

1 INTRODUCING RESULTS-BASED APPROACHES INTO PUBLIC SECTOR MANAGEMENT PROCESSES: The Philippine Experience A Paper Presented by SECRETARY EMILIA T. BONCODIN Philippines 2 nd International Roundtable on Managing for Development Results Marrakech, Morocco 05 February 2004

2 RESULTS-BASED APPROACH: Major Element of Philippine Public Sector Management Reform Program

3 PUBLIC SECTOR MANAGEMENT REFORM PROGRAM To address key dysfunctions: 4 operational leakages 4 weak corporate and regulatory environment 4 weak public institutions and enforcement 4 poor incentive structures 4 slow response capability to changing situations and needs 4 inadequate resources for basic services 4 deteriorating fiscal position 4 slow and unstable growth poverty

4 PUBLIC EXPENDITURE MANAGEMENT: DESIRED RESULTS To reduce poverty by creating investment and job opportunities through: a) Addressing the inadequacy of resources for basic services b) Arresting the deteriorating fiscal position

5 PUBLIC EXPENDITURE MANAGEMENT: FOCUS ON RESULTS Use of the budget as instrument for ensuring desired results Strengthening of existing incentive structures to advocate and implement reforms Active partnership with civil society in monitoring results Clear targets and assessment mechanisms

6 PUBLIC EXPENDITURE MANAGEMENT FRAMEWORK Fiscal Discipline Allocative Efficiency Operational Efficiency

7 MAJOR REFORM INITIATIVES OUTCOME INSTRUMENT Fiscal Discipline Allocative Efficiency Medium Term Fiscal Plan (MTFP) Assessment of contingent liabilities; fiscal risks Medium Term Public Investment Program (MTPIP) Organizational Performance Indicator Framework (OPIF)

8 Major Reform Initiatives OUTCOME INSTRUMENT Operational Efficiency Sectoral Effectiveness and Efficiency Review (SEER) Agency Performance Review (APR) Procurement reform Installation of new government accounting system and auditing procedures

9 Major Reform Initiatives OUTCOME INSTRUMENT Compensation Review Reengineering the bureaucracy Strengthening key sector areas: judicial reform; electoral campaign reform; peace and order campaign; regulatory reform Investment in IT and IT-based services

10 MEDIUM-TERM EXPENDITURE FRAMEWORK FISCAL Medium-Term Philippine Development Plan INVESTMENT Medium-Term Fiscal Plan Medium-Term Public Investment Program Annual Budget Organizational Performance Indicator Framework Sectoral Effectiveness and Efficiency Review Agency Performance Review Incentive Structure

11 MEDIUM-TERM FISCAL PLAN: FEATURES Explicit medium term fiscal targets: deficit reduction strategy; revenue and disbursement targets; debt management strategy Medium term estimates of cost of ongoing and committed programs (baseline +) Proposed revenue enhancing measures over the medium term Clear rules for updating revenue and cost estimates Fiscal Responsibility Bill

12 MEDIUM-TERM FINANCIAL PLAN: HIGHLIGHTS Particulars NG Deficit (% of GDP) Public Investment (% of GDP) (Capital projects) Public Debt to GDP ratio (NG Outstanding Debt)

13 MEDIUM-TERM PUBLIC INVESTMENT PROGRAM Sectoral investment requirements over 6 years Published major sectoral investment programs Alternative financing modes for specific projects

14 MEDIUM-TERM PUBLIC INVESTMENT PROGRAM 200 In Billion Pesos Total CO ODA Others

15 ORGANIZATIONAL PERFORMANCE INDICATOR FRAMEWORK: GOALS Shift to output/outcome performance indicators Clarify expected performance and accountability of government agencies Encourage agencies to focus efforts on the delivery of outputs relevant to goal Establish integrated performance management system where organizational performance targets cascaded down to lower level units and used as basis of performance-based compensation Report to public and Congress in clear terms output of departments/agencies

16 ORGANIZATIONAL PERFORMANCE INDICATOR FRAMEWORK: PROCESS Identification of desired outputs and outcomes Agency; Oversight MAJOR FINAL OUTPUTS (MFOs), in terms of quantity, quality, timeliness, cost (QQTC) Harmonization: Agency with Oversight (DBM, NEDA) Identification of programs/projects contributing to the accomplishment of MFOs

17 Organizational Performance Indicator Framework: Process Establishment of Performance Indicators 4 PI to determine whether program/projects contributed to MFO 4 PI must be verifiable in a quick, accurate and cost-effective manner

18 ORGANIZATIONAL PERFORMANCE INDICATOR FRAMEWORK: Example: LTO Outcome - Road safety (less incidence of road accidents) MFO - Licensing services (Drivers) Performance indicators: Quality - % of licenses issued in accordance with operating standards; client satisfaction Timeliness - % of licenses issued in accordance with timeliness standards

19 ORGANIZATIONAL PERFORMANCE INDICATOR FRAMEWORK: STATUS Agencies in advance stage of the OPIF process 4 Agriculture sector agencies (Agriculture, Agrarian Reform, Environment and Natural Resources) 4 Social Welfare 4 Labor and Employment, 4 Education Agencies in intermediate stage of OPIF 4 Health 4 Internal Revenue 4 Customs Agencies in the early stage 4 Infrastructure agencies

20 SECTOR EFFECTIVESS AND EFFICIENCY REVIEW: FEATURES Periodic review of ongoing programs and projects in terms of relevance, performance, cost/benefit System for establishing and updating strategic priorities over the medium term Allows the redirection of resources to strategic programs

21 SECTORAL EFFECTIVENESS AND EFFICIENCY REVIEW: PROCESS Consultations: agencies; stakeholders; funding agencies Presentation of Results and Recommendations Approval of Cabinet Committee Input to Updated Development Plan, Public Investment Program, Budget

22 SECTORAL EFFECTIVENESS AND EFFICIENCY REVIEW: Results Cancel excess financing (6) Terminate projects or remaining components of projects (1) Restructure projects, including loans (30) Proceed (68)

23 AGENCY PERFORMANCE REVIEW Short term review of revenue and expenditure performance vis-à-vis budget targets Ranking of Agency Budget Performance and public reporting

24 AGENCY PERFORMANCE REVIEW: RESULTS CY All agencies of the National Government underwent APR Most got outstanding rating; review was based on agencydetermined targets CY Low-budget agencies were exempted from the APR Most got satisfactory rating

25 INCENTIVE STRUCTURES Greater flexibility in exchange for financial discipline hurdles 4 Use of budget savings from procurement and streamlining activities 4 Creation of one-liner budgets 4 Expenditure autonomy for low-budget agencies Performance-based management 4 Performance-based compensation 4 Collective negotiation agreements (CNA)

26 KEY ACCOMPLISHMENTS TO DATE A. Planning/Budget Processes 4 Linked Budget to Planning starting in Changed from input-based to outcome-based budgeting in 2002 Budget Call 4 Formulated budget strategy as precondition to approval of new foreign loans in Conducted first Sectoral Effectiveness and Efficiency Review (SEER) Conducted first Agency Performance Reviews (APRs) in Conducted ODA Portfolio Review in 2003

27 Key Accomplishments to Date B. Reengineering the Bureaucracy 4 Formulated Reengineering Plan for the Bureaucracy 4 Reengineered key regulatory agencies: financial markets, energy, ICT C. Capability Building ( ) Workshops, Training 4 Oversight agencies (18) 4 Individual agencies (3 major, 17 minor)

28 Key Accomplishments to Date D. Assessments and Documentation Budget Preparation, Performance Orientation, 4 Public Expenditure Management Manual 4 Documentation of 2002 APR 4 Public Expenditure, Procurement and Financial Management Review with World Bank (WB) and Asian Development Bank (ADB)

29 CHALLENGES Refining multi-year resource constrained planning Completing inventory of contingent liabilities Enhancing the predictability of revenues Cascading performance management system down to personnel appraisal Shifting to a performance based compensation system Advocating PEM reforms in Congress

30 MOVING FORWARD limited budget autonomy 4expanded budget autonomy 4PEM substantially operations 4PEM fully operational 4compensation review 4reengineering the bureaucracy 4Initial implementation of compensation reform 4Reengineering the bureaucracy 4Alignment of agency with individual performance

31 THANK YOU!!!