Community of Practice on Managing for Development Results

Community of Practice on Managing for Development Results (Co. P Mf. DR) 2007 Annual Meeting and Training Program 22 October - 2 November 2007, Shanghai, China Strengthening Provincial/Local Planning and Expenditure Management in the Philippines Susan Rachel G. Jose Director, Regional Development Coordination Staff National Economic and Development Authority

§ National Government § Local Government Units (LGUs) ü 81 Provinces ü 115 Cities ü 1, 510 Municipalities ü 41, 995 Barangays Ø 17 Administrative Regions

1991 Local Government Code (Decentralization Law) Increased LGU autonomy to plan, finance and implement social and economic services Devolved Responsibilities 1991 Local Government Code Increased Financial Resources

LGU Spending as Ratio to GNP 1990 2002 1985 - 1992 - 19971991 1996 2002 (Average) Ratio to Government Spending Net of Debt Services 1990 2002 1985 - 1992 - 19971991 1996 2002 (Average)

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

Mismatch in LGU spending and constituents’ needs Poor plan-budget linkage • 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resources to fund projects • Weak linkages of local plans with regional/national plans • Multiplicity of plans and outdated planning guidelines

NEDA-ADB Technical Assistance on Strengthening Provincial/Local Planning & Expenditure Management Activities P H A S E Outputs Guidelines Preparation Five-volume set of guidelines Advocacy Training • JMC of Oversight Agencies • Training of local functionaries 1 Pre-training briefings/ workshops P H A S E Learning-by-doing workshops 2 Post-training consultations • Draft PDPFP and PDIP and CDPs and CDIPs of component municipalities and cities • MOA with LGUs • Refined PDPFP and PDIP • Initial/draft feasibility studies • Approved PDPFPs, PDIPs • Feasibility studies Outcome Provincial-municipal development efforts are complementary NG and LGUs interface in their development efforts Provinces and (to some extent) municipalities have improved capacities Impact 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

Stages of Transformation Institutionalization Consciousness Building Stage 1 Capacity Building Stage 2 Application Stage 3 Stage 4

PROVINCIAL/LOCAL PLANNING EXPENDITURE MANAGEMENT (PLPEM) Volume 1: Integrated Framework GUIDELINES & Volume 2: Provincial Development and Physical Framework Plan (PDPFP) Volume 3: Investment Programming and Revenue Generation Volume 4: Tools and Techniques on Budgeting & Expenditure Management Volume 5: Project Evaluation & Development

Planning-Programming-Budgeting. Implementation-Monitoring Cycle Planning PPAs Investment Programming Revenue Generation Implementation, monitoring and evaluation Project Evaluation and Development Budgeting Expenditure Management PDIP/ AIP

What do we hope to achieve?

Synchronized Planning-Programming-Budgeting Investment Programming Planning MTPDP/ NFPP Impact and Information Base RDIP Impact Assessment Annual Budget Expenditure Plan PDIP/AIP C/MDIP PPA Outcomes Monitoring Implementation Initial Screening and Prioritization of PPAs Budgeting and Public Expenditure Management Project Evaluation And Development Investment Programming and Revenue Generation Realignment Mid-term Revision C/MDP/ CLUP MTEF National Exp. Plan MTDIP RDP/RDFP PDPFP Budgeting PPAs

Harmonized efforts of oversight agencies MTPDP/NFPP NEDA MTPDIP DBM MTPIP MTPDP/NFPP Multi-yr Annual plan expend budget National • Expenditure Disbursement control system Program PLPEM Guides PDIP/AIP • Additional • PDIP/AIP sources of revenues PDPFP DILG CDP Manual City/ C/MDP Municipal Development CLUPs Plan Budgetary Issuances RDIP RDP/RPFP City/ LDIP Municipal DIP DOF • Annual budget Provincial • Disbursement Expenditu control system Revenue Generation & Administration re Program • Annual budget City/Municipal • Disbursement Expenditure control system Program

More responsive planning: emphasis on the planning logic PLANNING ENVIRONMENT DRIVERS SYMPTOMS Population Economy Physical Resources Income Services • Percentage distribution of households by type of housing unit occupied • Housing backlog • Proportion of households who informal settlers • Proportion of households with makeshift housing Land Use 1 4 PROGRAMS PROJECTS ACTIVITIES 2 DEVELOPMENT ISSUES/ PROBLEMS 3 GOALS OBJECTIVES/ TARGETS Provide affordable Housing for xx HH in yy areas STRATEGIES Lack of affordable housing Provide access to new housing sites PROGRAMS INVESTMENT PROGRAMMING & BUDGETING PROJECTS/ACTIVITIES Improve sites/ services in yy areas New housing road access program Access road construction project Private sector-led development of CMP program in yy areas CMP project in yy areas Provide livelihood opportunities Livelihood Program Skills development Microfinance affordable housing

Project “wish list” is avoided

… and projects are linked with revenue sources Step 3 Formalize and rank the list of development investment projects Step 4 Analyze the development Development investment capacity Step 5 Fully Costed and Ranked List of Projects Iteratively develop the PDIP Financing Plan and Finalize the Investment Schedule Initial Investment Financing Capacity Estimates Equal on an Annual Basis? Finalize PDIP Financing Plan and Investment Schedule Yes PDIP Financing Plan and Investment Schedule No Identify additional revenue measures including revenues from PDIP Estimate New Investment Financing Capacity Additional revenue measures New Investment Financing Capacity Process Flow of the Iterative Development of the PDIP Financing Plan & Schedule

Improved LGU administration • Rationalized planning work • LGU functionaries coordinating with one another • Provincial-municipal/city complementation • Interface with national government agencies • Improved LGU capacities

Wider sharing of PLPEM Guidelines http: //cop-mfdr. adb. org go to Rooms select Co. P-PLPEM