Secretary’s Corner

PH joins global Open Government Partnership Summit in Paris

The Philippine delegation at the Open Government Partnership.

Paris, France, December 8, 2016 – The Philippine delegates arrived Wednesday to join the 2016 Open Government Partnership (OGP) Global Summit in Paris, France.

The delegation is headed by Department of Budget and Management Secretary Benjamin Diokno to demonstrate commitment to promote transparency and strengthen good governance as well as showcase the accomplishments in its current initiatives and plans for the implementation of OGP at the local level.

“Our participation in OGP will be another step towards increased public integrity, effective management of public resources and stronger accountability steering to a better government,” Diokno said.

The three-day event is participated by more than 3,000 delegates where leaders across the globe deliberate principles of transparency, accountability and citizen participation and discuss their roles as global leaders in advancing open government.

On its 3rd National Action Plan, the Philippine OGP has formulated its policies in line with the reform and partnership for change agenda of the Duterte administration. Early next year, the government will have a consultation with the civil society to discuss and execute OGP initiative aimed at bringing transparency.

The OGP is a multilateral initiative launched in 2011, which aims to promote the principles of open and transparent government through civic consultation and participation, reinforcing public integrity and the fight against corruption. The Philippines was one of eight founding member countries of the OGP.
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Speech for the BPI Year-End Economic Briefing

 


Sec. Benjamin E. Diokno
(BPI Year-End Economic Briefing, 29 November 2016, Dusit Thani Hotel)
Esteemed guests, leaders in business and finance, fellow workers in government, ladies and gentlemen: Good afternoon!
I am honored to speak to you today to share with you the bold aspirations of the Government for the next six years, as well as some accomplishments we have made in the first five months of the Duterte administration.
As 2016 comes to a close, the Filipino people have much reason for optimism. This rational optimism is grounded on two fronts – economic growth and poverty reduction.
Third Quarter Gross Domestic Product (GDP) growth rate was a robust 7.1 percent. The Philippine economy has beaten market expectations as we have sustained rapid growth without election-related spending padding our figures. Comparative data also suggest that we are now the fastest growing emerging economy, surpassing other Asian tigers like China and Vietnam . This is no small feat and is a testament to our strong macroeconomic fundamentals.
More importantly, full-year poverty incidence statistics for 2015 indicate that growth has started to benefit the poor – it has dropped to 21.6 percent . In the past ten years, poverty rate stagnated at 25 to 26 percent. So 21.6 percent is welcome news, though such a rate remains unacceptable.
As Budget and Management Secretary, my task is to make sure that policy continues to support our development objectives. In measurable terms, this is the Duterte Administration’s goal of making the Philippines a high-middle income country by 2022, accompanied by rapid poverty reduction of 1.25 – 1.5 percentage points annually.
First, we have tweaked our fiscal policy to secure these ambitions. The deficit-to-GDP ratio will be increased from 2 to 3 percent for the next six years. This will allow adequate funding for our expenditure priorities.
But let me assure you that we will exercise fiscal responsibility. The planned deficit is manageable, appropriate, and sustainable. Besides, we will outgrow our debt burden. Debt-to-GDP ratio is projected to decline from 45 percent in 2015 to 35 percent in 2022.
The increased funding will allow us to invest heavily in infrastructure development. Infrastructure boosts productivity, generates jobs, and attracts investments. It also facilitates the conduct of business and improves the mobility of people and accessibility of basic services. We must make infrastructure a catalyst for growth instead of a binding constraint.
The Proposed Budget for 2017, approved in record time by both the House and the Senate, allocates P860.7 billion for infrastructure development. This is equivalent to 5.4 percent of our Gross Domestic Product (GDP) and will be utilized in just one year.
This is only the beginning as spending will likely spike to 7 percent of GDP by 2022. I estimate that a total of P8.2 trillion to P9.0 trillion will be spent on public infrastructure under the term of President Duterte.
Transport infrastructure will be pursued to address the traffic crisis costing us, as a JICA estimate 3 years ago, P2.4 billion pesos daily. We will link rural sectors to growth centers, lagging regions to leading regions, to spur economic activity throughout the land. The poor, who are vulnerable to natural calamities like floods, will benefit from structural mitigation measures.
Transport infrastructure is a priority with road networks alone receiving P328 billion next year. Alternative modes of transport to decongest urban areas will also be pursued, such as the P25 billion for rail transport systems all over the country.
The Mindanao Logistics Infrastructure Network is another big-ticket project that will cost P31.5 billion pesos to improve trade and transport in Mindanao. A key factor to unlocking the potential of Mindanao is upgrading its infrastructure. This is especially true with Mindanao being the poorest island group in the country.
Next, school buildings and health facilities will have allocations of P125 billion and P10 billion, respectively. This is in line with our human capital development emphasis.
Irrigation systems will have P26 billion to support rural development and agricultural modernization. Specifically, the National Irrigation Administration (NIA) will extend its irrigation systems to cover an additional 30,000 hectares of land. These provisions will enable our rural sector to raise farm productivity and improve food security.
For more than 3 decades, infrastructure spending in the Philippines had fallen short of the ideal level of 5 percent of GDP. It only averaged 2.9 percent from 2010 to 2016. The consequences of such underinvestment are staggering: crumbling infrastructure, low mobility, and constrained development.
To fully tap the potential of the private sector, we will continue the Public-Private Partnership (PPP) program but with some enhancements for a more dynamic collaboration. The rules of engagement have been changed. We now entertain unsolicited proposals, subject to Swiss challenge.
At the same time, the economic managers recommended, and the President approved, that we will not use PPP as a way of raising revenues for the government. We will do away with the kind of PPP where the company that gives the highest premium wins. We feel that this is taxation without representation. Moreover, it will make public services costlier, perhaps even unaffordable, to users.
We prefer what we call Hybrid PPPs, where the government takes care of the financing and the construction, while the operations will be entrusted to the private sector. This way, the government can take advantage of lower borrowing costs through bilateral and multilateral financing. At the same time, it will allow the private sector to efficiently operate and maintain PPP projects.
As of November 16, 2016, 14 PPP projects worth P293.3 billion have been completed or are under implementation. The entire PPP pipeline is now worth more than P1.6 trillion pesos.
This includes the planned construction of a brand new and modernized Philippine National Railway (PNR), worth more than P250 billion. The new PNR will connect Tutuban to surrounding provinces such as Laguna, Batangas, Legaspi, and as far as Sorsogon.
In addition to public infrastructure, human capital development will be pursued resolutely. We have a young population and it is necessary to provide them with the tools – quality education, appropriate healthcare, effective social safety nets et cetera – to be an agile, competent and productive workforce. A dynamic labor force will enable us to achieve our growth potential down the road. Hence, we must continue preparing our youth.
Of foremost importance is the education sector, which will receive P700 billion. Department of Education alone will receive P567 billion for its goal of universal basic education. Beyond school buildings, we will provide seats, learning resources and additional manpower to our young students.
State Universities and Colleges (SUCs) shall also receive P60 billion to send deserving tertiary students to school. In addition, technical-vocational education is given P7 billion to mold Filipinos into workers with world-class technical expertise and artistry.
To complete the fiscal policy picture, a comprehensive tax reform package will be pursued by this administration. We intend to make the tax system simpler, fairer, and more efficient. Our outdated tax system with its high rates and narrow bases drives away investors. The present tax regime will also be unable to fund our lofty goals.
With that in mind, the first of many tax reform packages has already been submitted to Congress. It seeks to lower personal income tax rates from 32 percent to 25 percent, while expanding the Value-Added Tax base. The lowering of corporate income tax rates from 30 to 25 percent will follow suit next year. Other measures will also be introduced such as the lowering of estate taxes and the increase of excise taxes on petrol. These reforms will make our tax regime more equitable, more competitive in the region, and more suitable for our medium and long-term development prospects.
Clearly, the Duterte administration is serious in promoting economic growth that benefits all Filipinos, especially the poorest of the poor. We will push the economy to new heights founded on sound fundamentals and well-crafted policies. Indeed, we can all look forward to a safer, fairer, more prosperous, and more beautiful Philippines.
Thank you and good afternoon.
25 November 2016

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DBM signs fare agreement with Cebu Pacific

 

 

Arlene Tena, Director for Passenger Sales of Cebu Pacific; Andrew Huang, Chief Finance Officer; Alexander Lao, President and CEO of Cebgo; Michael Szucs, Chief Executive Adviser of Cebu Pacific; Benjamin Diokno, Secretary of Department of Budget and Management; Lance Gokongwei, President and CEO of Cebu Pacific; Bingle Gutierrez, Executive Director of DBM’s PS-PhilGEPS; Agnes Bailen, Undersecretary of DBM; Flerida Arias, Officer-in-charge Director, Operations Group of PS-PhilGEPS; Rosa Maria Clemente, OIC Deputy Executive Director V of PS-PhilGEPS; Dalisay Dela Chica, Chief, Sales Division of PS-PhilGEPS; Leah Valdez, Chief, Marketing Division of PS-PhilGEPS

November 28, 2016 – Department of Budget and Management and Cebu Pacific Monday signed a Government Fare Agreement (GFA) that will give government employees discounted fares on official business trips.
Under the agreement, all official travels of government will be granted discounts and waiver of processing fee along with fees for rebooking. In addition, it aims to centralize the purchase of air tickets among government agencies.
“This is a huge step into our goal of getting the highest value for the hard earned money of our Fillipino taxpayers. The DBM estimates savings for more than one billion in aggregate discounts and waived fees under GFA,” said DBM Secretary Benjamin Diokno.
As early as January 2017, government agencies across the country can avail the discounted fares through DBM Procurement Service website. The website will provide government agencies a link to open the Cebu Pacific’s online portal and book flights easier and faster.
“We are pleased to contribute to this initiative, making air travel more convenient and accessible to our workforce in the government,” said Cebu Pacific President and CEO Lance Gokongwei.
“We are looking forward to flying more government employees as this will also cultivate financial and economic growth of the different regions and provinces in the Philippines,” Gokongwei added.
DBM together with the Procurement Service-Philippine Government Electronic Procurement System (PS-PhilGEPS) are exerting effort to standardize procurement engagement and improve ease of doing business for both the government and private sectors.
In addition, DBM will continue to improve the return of investment and seek ways to maximize government resources.

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DBM Secretary Benjamin E. Diokno delivers the opening remarks for the Round Table Discussion on Financing and Implementing Climate Resilience in the Philippines. Sec. Diokno encourages agencies to collaborate and implement mechanisms for the effective mobilization of resources for climate resilience and adaptation.25 November 2016

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DBM Secretary Benjamin E. Diokno delivers the opening remarks for the Round Table Discussion on Financing and Implementing Climate Resilience in the Philippines. Sec. Diokno encourages agencies to collaborate and implement mechanisms for the effective mobilization of resources for climate resilience and adaptation.25 November 2016

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Speech for the 71st Annual Convention of PICPA
Sec. Benjamin E. Diokno
(71st Annual Convention of PICPA, 24 November 2016, SMX Convention Center SM Lanang Premier, Davao City)
To PICPA national president Ramonito Pernato, Chairman Felix T. Fabian, Davao chapter president Marko Romeo Fuentes, the organizing committee, to all the CPAs and esteemed guests who have gathered here for this momentous event, ladies and gentlemen, good afternoon.

It is my honor to speak to you today on your 71st Annual Convention on behalf of President Rodrigo Duterte. The president wishes to congratulate you on a successful and productive convention, and he hopes that your organization will continue to promote professional accounting, nurture its members, and contribute to the positive change that the government is striving for.
PICPA and each of its individual members play a significant part in reaching our country’s goals and I am blessed to see all of you here. This convention is a venue for establishing friendships that create deep connections and enable productive collaboration.
But more importantly, this is a platform for the sharing of ideas and best practices, current events, developments, and issues faced by each sector in the accounting profession.

Seeing the need to rise to the challenges in this new age, PICPA has rallied its members under the banner “Level Up,” urging all of its members to aim higher and to elevate the way work is done. And I cannot agree with you more on this urgent call to reach for a new level, to rise.
Let me take this opportunity to share with you the steps that the government is taking in the hope of advancing the nation to a higher level.
This administration firmly believes that the people – the human capital – is the most crucial element in nation-building, in encouraging economic growth, and reducing poverty. To “level up” the human capital means improvement of labor productivity, the spurring of innovation, and the sustainability of growth.
Thus, creating and improving services for the people is the number one priority of the government. Education, health, and social security sectors will be given the biggest share – 40.1% or almost half – in next year’s budget.

Flagship programs in the social services sector will be sustained. The Conditional Cash Transfer or CCT will provide health and education cash grants to eligible poor households, granting a monthly education and health allowance that will assist low-income families. The Duterte Administration has also introduced a rice subsidy of 20 kilos of rice for 12 months as a top-up to the CCT program. All in all, CCT is allocated P78.7 billion with P23.4 billion owing to the rice subsidy.
The National Health Insurance Program or NHIP will give Filipinos access to affordable and quality universal health care services.
Government hospitals and health facilities nationwide will be modernized under the Health Facilities Enhancement Program, making them more responsive to the health needs of the people. Overall, healthcare is allocated P151.5 billion, a sizeable increase from this year’s allocation.

Education is of prime importance, and it is given a rightful allocation of P700 billion. The Department of Education alone is given P570 billion for its objectives of universal basic education. The increased budget for the Basic Educational Facilities will also continue to build classrooms and equip schools for the K-12 program. Meanwhile, tertiary Education is allocated with a bigger budget for building facilities and to offer scholarships for teachers.
The government promises a positive change that is felt by the people, not only in the aspect of social services but also in public infrastructure.
The Filipino people can look forward to numerous infrastructure projects that will make way for the easy transport of passengers and goods. In the 2017 proposed budget, P860.7 billion is allotted for public infrastructure, over a hundred billion higher than the 2016 allocation, and this is just for one year alone. This ensures the immediate launch of numerous construction projects across the country, 18 of which are already approved and ready for bidding in less than five months after the inauguration of President Duterte.
This focus on public infrastructure projects means more roads, bridges, transport terminals, ports, and other public works connecting you to cities and rural areas, bolstering agriculture and tourism development. And for the next six years, we estimate that the government will spend between P8.2 to P9 trillion to realize the dream of a golden age of infrastructure in the Philippines.

Construction of infrastructure will be non-stop come 2017 and each project will be monitored efficiently by using modern technology such as geotagging and mapping with drones. This technology allows for transparency, making it easy for the government to validate and evaluate the actual progress of projects even in remote areas. Overlapping projects and fictitious or “ghost” projects will be eliminated.
Transport infrastructure will be pursued to address the traffic crisis costing us, as a JICA estimate 3 years ago, P2.4 billion pesos daily. Road networks will receive P328 billion next year. Alternative modes of transport to decongest urban areas will also be pursued, such as the P1.0 billion allocation for the Metro Manila Bus Rapid Transit Line 1 and the P25 billion for rail transport systems all over the country.
A modernized Philippine National Railway is also underway, worth more than P250 billion, which will connect Tutuban to surrounding provinces such as Laguna, Batangas, Legaspi, and as far as Sorsogon.
The Mindanao Logistics Infrastructure Network is another big-ticket project that will cost P31.5 billion pesos to improve trade and transport in Mindanao. A key factor to unlocking the potential of Mindanao is upgrading its infrastructure. This is especially true with Mindanao being the poorest island group in the country.
Our economic policies are sound, but they will be for naught if lawlessness persists. The President’s war against crime and illegal drugs is founded on the conviction that peace and order is a precondition to economic growth. If there is no peace and order, there is no progress. Thus, the President has ordered a vigorous enforcement of the law to address criminality.
He also commanded the continued implementation of peace agreements with numerous stakeholders. Ongoing discussions are being carried out to encourage understanding and cooperation as a people of one nation.
The government has already undertaken steps to expedite the peace process in Mindanao. An Executive Order has already been signed by the President for a more inclusive Bangsamoro Transition Council (BTC). This will allow numerous stakeholders to sit at the negotiation table, from the MILF, to the MNLF and even the Indigenous Peoples. The BTC will resume work on the proposed law that will create the Bangsamoro Region.
The government has also engaged the CPP-NPA-NDF in peace talks to put an end to the longest running communist-insurgency in Asia. A third round of negotiations is scheduled for early next year in Oslo, Norway. Beyond releasing political prisoners, President Duterte has appointed personalities from the Left in his Cabinet. Lest we forget, he also declared a unilateral ceasefire during his first State of the Nation Address. Evidently, this administration is serious in forging lasting peace.

The government aspires for a complete transformation, for the nation to “level up” in terms of improved public services; peaceful, secure, and healthy communities; and prosperity and a comfortable life for all.
I wish to emphasize and remind each of you of your significance in realizing this aspiration. What you can contribute in actualizing national progress as individual CPAs and as PICPA is invaluable. Your continued support is needed now more than ever by the government and the Filipino people it serves.
On behalf of the President, I thank you all for your warm welcome and for your time. May your organization continue to grow so that it may cultivate more generations of honorable Filipino accountants.
Thank you and good afternoon.

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Budget Secretary Benjamin E. Diokno participates in the panel discussion of the BusinessWorld ASEAN Regional Forum, held in Conrad Hotel, Pasay City. Secretary Diokno shares his insights on pressing economic concerns such as volatility in financial markets and the growth outlook of ASEAN member-nations.


DBM Secretary Benjamin E. Diokno delivers his keynote address at the BusinessWorld ASEAN Regional Forum, held in Conrad Hotel, Pasay City. He emphasizes the benefits of regional integration, including welfare-enhancing trade, exchange of ideas and access to economic and cultural opportunities. More importantly, he reminds the audience that the collective aspirations of ASEAN member-nations are more achievable if done together. 24 November 2016

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Speech for the Global Investment Forum
Sec. Benjamin E. Diokno
(Global Investment Forum, 23 November 2016, F1 Hotel Manila)
Esteemed guests, investors, entrepreneurs, fellow workers in government, ladies and gentlemen: Good morning!
7.1 percent – that has been the growth rate of the economy in the third quarter of 2016. We have beaten market expectations as we have sustained the economy’s rapid growth despite election-related spending tapering off.
Comparative data also suggest that we are now the fastest growing emerging economy in Asia, ahead of countries like Indonesia, Vietnam and even China. So welcome to the fastest growing country in the fastest growing region in the world.
As Budget and Management Secretary, my task is to make sure that public policy continues to support growth.

The Duterte Administration has ambitious goals and visions for the Filipino people. By 2022, we expect the Philippines to be a high-middle income country, at par with our neighbors like Thailand and China. But we want growth to be inclusive. For the next six years, we expect the poverty rate to decline by 1.25 – 1.5 percentage points annually. We hope that all of our reforms will catapult the Philippines into a high income country by 2040.

However, unless we sustain economic growth, prosperity and poverty reduction will remain to be mere aspirations. We estimate that the Philippine economy needs to grow by at least 7 percent every year, for one generation, to achieve this vision. And this is where investments are brought to the fore – they are necessary conditions in realizing the “Filipino dream”.

So, what exactly has the Department of Budget and Management been doing, and what does it set out to do in the next six years to secure for us a steady stream of investments?

First, we have prioritized infrastructure development. Infrastructure plays a major role in national productivity, employment generation, investment inflows, ease of doing business, among other economic variables. It also improves the mobility of people and the accessibility of basic services. These are obvious gains and will make the Philippines a more desirable foreign direct investment destination.
And we put our money where our mouth is: these pronouncements are backed by government resources. The Proposed Budget for 2017, which has already been approved in record time by the Lower House and is awaiting approval by the Senate, allocates P860.7 billion for infrastructure development. This is just for next year and is equivalent to 5.4 percent of our Gross Domestic Product (GDP). From now until 2022, I estimate that a total of P8.2 trillion to P9.0 trillion (or approximately $200 billion) will be spent on public infrastructure.

Transport infrastructure will be pursued to address the traffic crisis costing us, as a JICA estimate 3 years ago, P2.4 billion pesos daily. We will link rural sectors to growth centers. Lagging regions will be made more accessible to spur economic activity all throughout the archipelago.
The poor, who are vulnerable to natural calamities like floods, will benefit from structural mitigation measures.

Transport infrastructure is a priority with road networks alone receiving P328 billion next year. Alternative modes of transport to decongest urban areas will also be pursued, such as the P1.0 billion allocation for the Metro Manila Bus Rapid Transit Line 1 and the P25 billion for rail transport systems all over the country. The Mindanao Logistics Infrastructure Network is another big-ticket project that will cost P31.5 billion pesos to improve trade and transport in Mindanao.
A key factor to unlocking the potential of Mindanao is upgrading its infrastructure. This is especially true with Mindanao being the poorest island group in the country, particularly ARMM whose poverty rate is still at 54%.

Next, school buildings and health facilities will have respective allocations of P125 billion and P10 billion, respectively. This will also complement our thrust for human capital development.
Irrigation systems will have P26 billion to support agriculture and rural development. Specifically, the National Irrigation Administration (NIA) will extend its irrigation systems to cover an additional 30,000 hectares of land. These provisions are essential to our promise of pursuing growth in lagging regions, while enabling our rural sector to catch up with our ASEAN neighbors in terms of agricultural productivity.

A bigger budget will allow us to make up for the past neglect on infrastructure. For more than 3 decades, infrastructure spending in the Philippines had fallen short of the ideal level of 5 percent of GDP. It averaged 2.9 percent from 2010 to 2016. The consequences of low infrastructure spending are staggering: crumbling infrastructure, high transactions costs and low mobility.

To fully tap the potential of the private sector, we will continue the Public-Private Partnership program but with a twist.
We have changed the rules of engagement. We now entertain unsolicited proposals, subject to Swiss challenge. At the same time, the economic managers recommended, and the President approved, that we will not use PPP as a way of raising revenues for the government. We feel that asking for a premium on PPP projects is taxation without representation. More importantly, it will make public services costlier, perhaps even unaffordable to users.
We prefer what we call Hybrid PPPs, where the government takes care of the financing and the construction, while the operations will be entrusted to the private sector. This way, the government can take advantage of lower borrowing rates through development assistance. At the same time, it will allow the private sector to efficiently manage operations of PPP projects.
As of November 16 2016, 14 PPP projects have been completed or are under implementation worth P293.3 billion. The entire PPP pipeline is now worth more than P1.6 trillion pesos.
In addition to public infrastructure, human capital development will be pursued urgently. We have a young population and it is necessary to provide them with the tools – quality education, appropriate healthcare, effective social safety nets et cetera – to be an agile, competent and productive workforce. A dynamic labor force will increase or expand bustling industries in the country. We have experienced this with the Business Process Outsourcing and the Information Technology sectors. We must continue preparing our youth to be a productive part of economic growth.

The education sector will receive P700 billion, with the Department of Education alone receiving P570 billion for its goal of universal basic education. Beyond school buildings, seats, learning resources and additional manpower will be provided to our young students. State Universities and Colleges (SUCs) shall also receive P60 billion for quality college education to deserving students. In addition, technical-vocational education will be given P7 billion.
These spending priorities – infrastructure and human capital development – are pressing concerns, lest we risk losing out on another decade of growth and development. The Philippines has been dubbed as the “Rising Tiger in Asia” many times in the past. With strong macroeconomic fundamentals and well-planned and intensely-implemented policies, it is a travesty if we fail to live up to our billing. The Duterte Administration promises to fulfill its role as an enabling government that will propel the Philippines to a fairer, safer, more prosperous and more beautiful society.
Thank you!

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DIGITAL TRANSFORMATION FOR
 A SMARTER GOVERNMENT
(Technology in the Philippine Government,
Then, Now, and Tomorrow)
 Sec. Benjamin Diokno
Asia Cloud Computing Association’s Industry Dialogue
New World Hotel Makati
November 22, 2016

Emerging trends on digital transformation play a big role in government’s efforts to promote fiscal responsibility and good governance. The task of assuring fiscal sustainability is one of the greatest challenges of this government. Hence, the present administration will continue to implement a Public Financial Management (PFM) Reform Program intended to improve efficiency, accountability and transparency in public fund use to ensure the direct, immediate, substantial and economical delivery of public services.

A sound PFM system helps decision makers – both oversight agencies and spending agencies – in performing their functions. It helps them channel funds to intended beneficiaries and sends off signals when deviations occur. Most importantly, it helps to inform citizens where public funds are actually being spent.

Within government, there is also a need to put in place an integrated financial management information system. This will provide reliable and accurate information to support operational budgeting, cash programming and management, timely financial reporting and effective enforcement of financial accountability rules and procedures.

Digital Transformation

Organizations , whether government or private , are going digital to be closer to the citizens or customers, closer to the conditions on the ground, and still achieve efficiencies while keeping costs down.

For many organizations, digital transformation would mean that it is necessary to integrate existing resources with online resources to seamlessly enhance operations, enable better customer centricity, and compete better in the market. Digital transformation has had a disruptive effect on the traditional way in which business is done. For instance, in the Philippines, companies gradually experienced a shift in the transactions space.

Companies especially the large firms expect that certain routine transactions with government agencies can be done online like taxes can be paid being through internet banking facilities, and even from self-service kiosks whose machines can be found all over the country.

For government, suppliers, contractors, manufacturers, distributors and consultants, are mandated to register and use the Phil Government Electronic Procurement (PhilGEPS) system in the conduct of procurement of goods, civil works and consulting services. PhilGEPS is the single, centralized electronic portal that serves as the primary and definitive source of information on government procurement.

Suppliers and contractors doing business with the government derive the following gains from using the system: (1) access to government bid opportunities 24 hours a day and 7 days a week; (2) downloading of electronic bid documents; (3) automatic email bid notification of bid postings and supplements; and (4) savings on newspaper costs, transportation and man-hours, among others.

Good procurement is essential to ensure good public services, from buying goods and services that work as they are supposed to, to achieving savings that can be ploughed back into front-line services.  The PhilGEPS strives to meet the challenges of contributing to procurement reforms by maintaining a safe and secure Internet-based, open and competitive marketplace for government procurement.

Electronic Services and Cloud Computing
E-commerce will bring the Philippines to an even footing with the rest of the world. It will facilitate business transactions and shorten business cycles. It will bring down inventory and other operating costs. It’s plain to see that it’s not only business that gains, more so, consumers – everyone indeed – stand to gain.

As for content, websites can be put up and maintained by countless firms or even individuals for nominal fees. Business software applications need not even be bought anymore but just rented on the Internet at a minimal cost. With E-Commerce Law, our small and medium enterprises (SMEs) have a fighting chance to compete with the best in the world market.

The E-services provided by government offices drive transparency and openness. At the heart of this transformation is  leveraging on the cloud, mobile applications, big data/analytics and social media to better engage with the citizens. In the DBM, the following eServices, hosted using cloud technology, are available for use by the different government agencies:

1. Online Submission of Budget Proposal (OSBP) – This system provides online data entry facility for the agency budgetary proposals of all National Government Agencies.

2. Unified Reporting System (URS) – This system facilitates the online submission of Budget Execution Documents, and Budget and Financial Accountability Reports.

3. Budget Cycle Analytics (BCA) – A web-based Portal with graphical and interactive tools for Business Analytics Questioning, Reporting, Ad Hoc Queries and Dashboards, for in-year and multi-year financial and physical performance and for decision making based on multiple dimensions.

Cloud Computing.  Cloud computing technology is a model for enabling convenient on-demand network access to a shared pool of configurable computing resources (e.g. networks, servers, storage, software, applications, storage equipment and services) that can be rapidly positioned and released with minimal management effort or service providers interaction.

Already , government is beginning to get a sense of the power and the potential that this cloud technology platform offer to transform the way people access tools for education, for health care, for public administration.. These are technologies that go beyond cost-efficiencies. They are advances that have a significant positive impact on people’s lives.

Mobile Applications and Social Media

The digital mobile economy has created new challenges for the government. But, many agencies and firms maximize the mobile-phone user-base of the Philippines to create smart applications that will eventually allow citizens to transact directly to avail government and private services wherever they are located.

In the transportation space, taxi booking apps like Grab Taxi and Uber have been a disruptive force in taxi booking services, having grabbed market share from the incumbent taxi operators who used to own the lion’s share of taxi bookings.

Even online shops have taken market share away from the traditional brick and mortar shops, offering competitive prices, enabling purchases made just by tapping on a mobile device, saving the shopper the inconvenience of going from store to store to compare prices.

Social Media, refering to virtual communities and networks designed for social interaction to allow the exchange information and ideas, has also gained increased importance.

Thirty-four (34) million Filipinos are active Facebook users while 106 million are active mobile subscribers. However, a Global Internet metric provider Ookla ranked the Philippines as the second lowest average download speed among 22 Asian countries.

Therefore, Philippine government may need to upgrade and invest more in network infrastructure and services if it wants a greater number of Filipinos to have access to faster and cheaper Internet in the coming years.

Conclusion

With these in mind, the government is continuing to transform business processes, subject to international best practices, to review and reengineer existing budgetary ,cash management and accounting and auditing rules. The end goal is to develop timely, more effective, and  more responsive ways of managing, monitoring and reporting on the financial performance of Philippine government.

We will also utilize cyberspace as the primary channel for frontline service to citizens. This will be coupled by the integration of various information systems, leading to provision of OPEN DATA for more transparency in government.

Cloud computing technology will also improve inter-agency collaboration,  expedite service delivery and improve budget control due to its measured service. More so, it will allow operational continuity with its broad network access while decreasing spending on legacy infrastructure because of its resource pooling feature.

We also do not forget about enhancing the competencies of government staff to enable them to adapt to modern technology. All of these measures shall ensure a technologically-savvy bureacuracy that is more attuned to the needs of the people, and more efficient and effective in delivering goods and services. It’s about time that we leverage information and communications technology for a smarter government.

Thank you.

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Opening Remarks for the 22ND ASEAN Transport Ministers Meeting
Sec. Benjamin E. Diokno
(22nd ASEAN Transport Ministers Meeting, 17 November 2016, Philippine International Convention Center, Manila)

To the honorable ASEAN Transport Ministers, the ASEAN Secretariat and Delegates, officials of the Department of Transportation headed by Secretary Arthur Tugade, Secretary Mark Villar of the Department of Public Works and Highways, members of the National Organizing Committee, guests, ladies and gentlemen, good morning.

I am honored to speak before you today on behalf of President Rodrigo Duterte. The President sends his warm regards to the ASEAN transport leaders and wishes for the successful conduct of this Meeting.

This government believes in the power of efficient and sustainable transportation as a means to move people, enhance business, and attract investments. And as this transport meeting proves, transportation projects and policies are a good way to establish cooperation and cohesion among ASEAN nations.

In the next six years, the Duterte administration will roll out and implement big-ticket infrastructure projects. His marching order: Build, Build, Build. We want to build more roads, bridges, and rail networks, develop airports, and modernize our ports. In our National Expenditure Program for 2017 and for the first year of the Duterte presidency, the government’s infrastructure spending will represent 5.4% of the Philippines’ Gross Domestic Product. It is by far the most aggressive push for infrastructure in our history. In 30 years, infra spending did not even go beyond 3% of our GDP.

When it comes to our transportation system, we want a complete turnaround. And we are confident that with political will, swift action, and bold solutions from two strong-willed men — President Duterte and Secretary Tugade, our goals are not far behind.

With better mass urban transport systems, we hope to improve investment rates in the country. With seamless connection, we hope to connect our cities and our people. And with better linkages, we hope to facilitate the transport of goods and services. We aim to build the first rail network outside of Luzon, link provinces in the Visayas, and address the traffic crisis in the Metropolis. We will do these not just with massive infra spending or strong political will, but we will accomplish all these with transparency. Under the Duterte administration, there will be no corruption. So with confidence, I wish to assure our partners in the ASEAN that NOW is the best time to invest in the Philippines.

Even the President’s war against crime and illegal drugs is designed to improve the over-all business climate of the country. With safer cities and communities, there will be more investments and more opportunities for social and economic growth.

As one ASEAN community, we want the same things for our countries and our people. We want connectivity, ease of travel, lower prices of goods and services, and ultimately improve the quality of life of our people. And that is the beauty of having a common blueprint such as the ASEAN Economic Integration. With stronger economies, we will be able to generate more jobs and address the root causes of poverty. We are able to find ways to interconnect not just our cities but also our skills, resources, and ideas.

On behalf of the President and the government of the Philippines, I thank you all being here and for being so generous with your time and expertise. Thank you for keeping the spirit of our partnership and cooperation alive. We truly value and cherish your friendship.
Thank you. Good morning and Mabuhay.

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Secretary Benjamin E. Diokno of the Department of Budget and Management highlights the administration’s intense push for infrastructure development at the Kapihan sa Manila Bay held at Café Adriatico, Malate, Manila 16 November 2016

Budget Secretary Diokno at Kapihan sa Manila Bay

At this week’s edition of the Philippine Star’s breakfast forum Kapihan sa Manila Bay Secretary Benjamin E. Diokno of the Department of Budget and Management presented the proposed budget for 2017 at the Café Adriatico in Malate, Manila.

Beginning with a statement on the Duterte administration’s intense push for infrastructure development, Secretary Diokno announced that the government will spend an estimated amount of P8.2 to 9 trillion in the next six years on public infrastructure.
“We will fast-track the implementation of the major public infrastructures 24/7 in major cities in Manila, Cebu and Davao. Project monitoring will also be strengthened through the more effective use of modern technology like geo-tagging and mapping technology,” said Diokno.

More than one-fourth of the national budget will be invested in infrastructure programs and projects that will interconnect growth areas, support agriculture and tourism development.

“Our target is to reduce the poverty incidence from 1.25% to 1.5% every year, so we need to pay attention to lagging regions like ARMM and Cordillera,” said Diokno.

The building of a new national railway system was also mentioned by the Secretary. In the new Philippine National Railways (PNR), commuters from Tutuban will be able to conveniently access Laguna, Batangas, Legaspi, and as far as Sorsogon.

The two-hour guesting of Secretary Diokno allowed for a discussion and clarification of a broad range of topics from the 18 national projects ready for bidding, the upgrading of facilities to attract more tourists, to the proposed tax reform which will decrease the current individual tax from 32% to 25% if approved.

A complete video recording of Kapihan sa Manila Bay with Secretary Diokno can be viewed by following this link: https://youtu.be/R5uEvBfE-8Q.

For more information, visit www.dbm.gov.ph.

The Kapihan sa Manila Bay invites government officials every Wednesday to talk about their projects and advocacies and respond to questions on significant issues in an informal get-together with members of the press.

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Speech for the Top Level Management Conference of KBP
Sec. Benjamin E. Diokno (42nd Top Level Management Conference of KBP, 10 November 2016, Taal Vista Hotel, Tagaytay City)


To senior officials of the KBP, my colleagues in government, members of the media, guests, ladies and gentlemen: Good morning!


Swift and decisive – such was Mayor Duterte’s ascent unto the Presidency. Initially perceived as an outsider in national politics, he captivated the electorate with a promise of real change. A breath of fresh air from “traditional politics”, he guaranteed courageous and compassionate governance.


Four months into office and the administration is in full swing. Indeed, our goals are ambitious and our promises grand. But we are confident that these are realistic given well-crafted policies and decisive leadership.
On the political front, this administration will forward numerous reforms. It’s no secret that the current political climate deters development and unity. Hence, we will overturn this state of affairs. Square one is peace and order.
The safety of our people is a primary concern. True progress cannot be achieved if criminality is rife. Business will collapse and jobs will be lost if hooligans are free to raid and extort enterprises. But the true cost of crime is not measurable by monies lost. Victims are robbed of a bright future. Worse, lives are senselessly lost.

Our response is as straightforward as it is difficult: enforce the rule of law. Formidable enemies await, from armed criminal groups, to narco-politicians and other lawless elements. Therefore, it is imperative to have a prepared armed forces and police force.
This justifies our increased support for the PNP and the AFP. They play a vital role in securing peace and risk their lives by doing so. It is only just that they receive adequate compensation for their services.
In this regard, Executive Order No. 3 was issued by the President increasing the combat duty pay to P3,000 per month. Meanwhile, combat incentive pay has been doubled to P300 per day. Once the military pension system is reformed, we will also gradually increase the base pay of uniformed personnel. Our efforts to promote peace and order extends to capacitating and professionalizing the men and women who implement our security measures.
Still, peace will be fleeting if we cannot secure resolutions to ongoing conflicts. The government has already undertaken steps to expedite the peace process in Mindanao. An Executive Order has already been signed by the President for a more inclusive Bangsamoro Transition Council (BTC). This will allow numerous stakeholders to sit at the negotiation table, from the MILF, to the MNLF and even the Indigenous Peoples. The BTC will resume work on the proposed law that will create the Bangsamoro Region.


Not only is Mindanao laden with potential, but the people there have suffered enough. They have been deprived of prosperity for numerous decades. Can you believe that up to now, at least 50 percent of the population in ARMM fall below the poverty threshold? It’s time to put an end to the violence. Let us give Mindanao a fair chance at development.
The government has also engaged the CPP-NPA-NDF in peace talks to put an end to the longest running communist-insurgency in Asia. A third round of negotiations is scheduled for early next year in Oslo, Norway. Beyond releasing political prisoners, President Duterte has appointed personalities from the Left in his Cabinet. Lest we forget, he also declared a unilateral ceasefire during his first State of the Nation Address. Evidently, this administration is serious in forging lasting peace with all stakeholders.


The government is also keen on regaining the trust of our people. I reiterate that this will be a clean government. We will sustain efforts to crack down on corruption. Implementing the Freedom of Information Law in the Executive Branch was a key first step. We uphold the citizens’ right to demand information, bolstered by transparent, accountable and participatory governance.


We have also established a 24/7 Citizens’ Complaint Center to discipline erring officials. As Budget Secretary, I also assure everyone that we will do away with DAP and PDAF. We shall follow pertinent rules and regulations, particularly the Constitution.
Now, let me speak in terms of economic reforms. Nevertheless, reality dictates that politics and economics are impossible to divorce. They speak of similar objectives, only with different languages. This means that our political and economic policies are intertwined and mutually-enhancing for the improvement of human lives.
We have inherited an economy with strong macroeconomic fundamentals – benign inflation, consistent growth, ample international reserves, upgraded credit ratings et cetera. However, the robust growth has failed to trickle down to the masses.


Recently, full year estimates by the PSA revealed that poverty incidence fell to 21.6 percent in 2015. This is welcome news, but we can certainly do better. For a consistently growing economy, the rate of poverty reduction has been disappointing.
Our administration will foster strong market fundamentals, but we won’t lose track of what matters most: reducing poverty and inequality. We have made it a point to reduce poverty by 1.25 to 1.5 percentage points annually. The lagging regions, especially the agricultural sector, will be prioritized for more equitable growth. By the time we’re through, we expect the Philippines to be a high middle income country with poverty rapidly falling.


Tax reform will be pursued for a simpler, fairer and more efficient tax system. Infrastructure will be developed to address the traffic crisis and boost productivity. Most importantly, we will equip our young population with health and education interventions to ensure that they will grow into an agile and competent workforce.
In fact, I just came from the Philippine Development Forum in Davao City. Soon, the Philippine Development Plan will shed more light on these economic policies. Let me not preempt it, so instead, let me focus on our fiscal policy.
For the next six years, the DBM will commit to an expansionary fiscal policy. This implies a higher deficit – from 2 percent to 3 percent of GDP. This strategy will allow heavy investments on public infrastructure and human capital development.
Deficit spending solicits worries, and rightfully so. But I assure you that it is prudent as long as the money is spent on worthwhile projects. More so, we will outgrow our debt burden. Debt-to-GDP ratio is expected to decline from 45 percent in 2015 to 35 percent in 2022.


We are in dire need of public infrastructure, evidenced by the worsening traffic, poor trade logistics, and weak connectivity of lagging regions to growth centers. The harsh truth is that we have the worst public infrastructure among our Asian peers. So, we either close the infrastructure gap or risk closing our doors on increased growth and foreign direct investments.
The budget for 2017 keeps this in mind. It allocates P860 billion for infrastructure development. This is equivalent to 5.4 percent of GDP, and we’re just getting started. We intend to hike infrastructure spending to as much as 7.2 percent of GDP by 2022. All in all, I estimate that P8.2 trillion will be spent on public infrastructure for the next six years.


The private sector will also play a crucial role in infrastructure development. Public-Private Partnerships will be revitalized. We have changed the rules on PPP as we now accept unsolicited proposals, subject to Swiss challenge. We also won’t use PPP as a revenue-raising mechanism. We feel that this is taxation without representation.
Lastly, we will pursue Hybrid PPPs, where the government takes care of the financing and construction, while the operations are entrusted to the private sector. This way, the government can take advantage of lower borrowing rates while enabling the private sector to efficiently manage operations. Indeed, the next six years will be our country’s Golden Age of Infrastructure.


Social services – education, healthcare, housing, social protection etc. – is also given its rightful place. It represents 40 percent of the P3.35 trillion national budget. This is necessary to uplift the living standards of families, as well as to mold our greatest asset, our people, into productive members of society. Spending on social services will continue to rise from 7.7 percent of GDP this year to 9.1 percent of GDP in 2022.
In particular, the budget beefs up the allocation for Conditional Cash Transfer (CCT). A rice subsidy of 20 kilos per month will now be given to eligible families on top of the other benefits. Education is also emphasized as it is allocated P650 billion. This will allow the full implementation of the K-12 Program, increased support to State Universities and Colleges, among other education programs.


The budget has already been approved by the Lower House in record time of 7 weeks. The next stop is the Senate and we are confident of its passage. In many ways, it represents the aspirations of our people and the platform of governance of this administration.


The way ahead is difficult and uncertain, but we have laid the foundations for what remains to be a bright future. Still, no less than collective action will suffice to build a prosperous society. It is incumbent upon all of us to partake in this difficult yet highly rewarding journey. Together, let us build the nation.
Thank you and mabuhay

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Education Summit 2016 Opening Message Sec. Benjamin E. Diokno (Education Summit 2016, 3 November 2016, SMX Convention Center, Mall of Asia Complex, Pasay City) 3 November 2016


Good morning!
This Education Summit plays an integral role in our pursuit for real change. Education is important because it equips individuals with the necessary tools to succeed in life and levels the socio-economic playing field. Malcolm X famously said: “education is our passport to the future; for tomorrow belongs to the people who prepare for it today.”


So if the Philippines is to become a land of opportunity, where anyone, even the poorest of the poor, could succeed, then we must craft and execute education policies that rightfully address the gaps in the current system.


I am proud to announce that the Department of Budget and Management, which I head, holds its end of the bargain. The proposed National Budget for 2017, which has already been approved by the Lower House, allocates P650 billion for education. And we would like to thank the House of Representatives for passing the national budget in record time of seven weeks. The next stop of the 2017 budget is the Philippine Senate.
The P650 billion for education represents 20 percent of the National Budget. It is also 30 percent higher than last year’s allocation.


We have a young population and it is the appropriate role of government to prepare the young Filipinos for the future, to develop them into an agile, competent and productive workforce.
The Department of Education alone will receive P567 billion, by far the biggest item in the national budget. It will finance the recruitment of new teachers, the construction and improvement 47,500 classrooms, the upgrading of teaching skills, the acquisition of learning materials, and others.


With an adequately funded Deped, our objective of universal basic education, including the full implementation of the K-12 Program, is closer to reality.


Meanwhile, tertiary education is allocated P75 billion, with majority of the allocation going to State Universities and Colleges (SUCs) and CHED. This is a 22 percent increase from this year’s allocation. We expect that the higher provision will allow more students access to quality college education.


We also do not forget about technical-vocational education. TESDA will have P6.87 billion, P10 million higher than its 2016 budget. The TESDA budget will be used to mold some Filipinos into skilled members of the labor force. This will further boost our aims of poverty reduction and employment generation.


But securing funding is a necessary but not sufficient condition in our efforts to put new life into the Philippine educational system. The challenge is how to translate the budget authorization into goods and services that benefit our people. In short, the ultimate challenge is execution.
In this connection, I am proud to report that we, at the DBM, have already instituted reforms to fast-track implementation.


First, I have reinstated the What-You-See-Is-What-You-Get Policy (WYSIWYG), which I initiated 18 years ago, but was quickly abandoned by the Arroyo and Aquino administrations. Under the WYSIWYG policy, the General Appropriations Act (GAA) will serve as release document. This will enable agency heads to immediately execute their programs and projects without waiting for the issuance of the advice of allotments.


Second, we have simplified the Implementing Rules and Regulations (IRRs) of the Government Procurement Reform Act, which has been wrongly blamed for delays in project implementation. In response to some perceived criticisms, we have already revised them.
In addition, we have institutionalized “Procurement Short of Award”. National government agencies can already proceed with early procurement activities short of awarding contracts once the National Budget has been submitted to Congress. This will avoid unnecessary delays to project implementation.


Third, project monitoring will be strengthened by geo-tagging projects using modern technology like Google Maps and drones. Information technology systems will also be modernized. An example of this is the use of the Unified Account Code Structure (UACS) which harmonizes budgetary, treasury and accounting classifications.
In 54 digits, it is able to summarize the funding source, the organization, the location, and major final outputs among other bits of information. The UACS is being used by all departments of the National Government and Government-Owned or Controlled Corporations (GOCCs). As a long term goal, we envision an automated system that can trace budget accounts in real time.


Fourth, I am urging implementing agencies to upgrade their internal execution mechanisms to ensure that they keep in step with the sharp increases in their budgets. I would be lying if I don’t admit that my greatest fear is that we may not be able to spend the budget.
The proposed national budget is the largest budget that has ever been proposed. For perspective, it is three times as large as the National Budget ten years ago. This is partly due to our expansionary fiscal policy which is necessary to make up for past neglect in public spending for public infrastructure and investment in human capital.


The reality is that the Filipino people expect the government to convert these funds into useful programs, projects and activities. And for good reason: spending delayed is service denied. In the final analysis, we are accountable to the Filipino people and they deserve no less than our best efforts.


Ladies and gentlemen, the pursuit for real change is an uphill battle. We must work together for the improvement of our educational system, and ultimately, the change for the better of society and our people.
Thank you.

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BDO Nomura Market Outlook Forum Speech Sec. Benjamin E. Diokno (BDO-Nomura Market Outlook Forum, 24 October 2016, Conrad Manila Hotel Grand Ballroom). 24 October 2016


Good afternoon!
It is in the best interest of everyone that the public and private sectors would dialogue to ensure appropriate infrastructure development in the country. Infrastructure is not only a tool to enhance economic efficiency, but a good or service that benefits all.


This is why infrastructure development is central to the Duterte administration’s development agenda. It significantly affects national productivity, employment generation, investment inflows, ease of doing business, among other economic variables. It also improves the mobility of people and the accessibility of basic services.


Aside from improving economic efficiency, infrastructure development will enable us to achieve growth that is less unequal and beneficial to all Filipinos.


All of these pronouncements are backed by the policies of this Administration. The Proposed Budget for 2017, which has already been approved in record time by the Lower House – approved in seven weeks without any amendments – allocates P860.7 billion for infrastructure. This is just for next year and is equivalent to 5.4 percent of our Gross Domestic Product (GDP).


Still, we intend to increase infrastructure spending from 5.4 to 7.2 percent of GDP in 2022. So I estimate that we will be spending around P8.2 trillion, or $180 billion, in the next six years.


Transport infrastructure will be pursued to address the traffic crisis costing us, as a JICA estimate 3 years ago, P2.4 billion pesos daily. We will link rural sectors to growth centers. Lagging regions will be made more accessible to spur economic activity and tourism all throughout the archipelago. The poor, who are vulnerable to natural calamities like floods, will benefit from structural mitigation measures.


Transport infrastructure is a priority with road networks alone receiving P328 billion next year. The Mindanao Logistics Infrastructure Network is a big-ticket project and it will cost more than P30 billion to improve trade and transport in Mindanao. A key factor to unlocking the potential of Mindanao is upgrading its infrastructure. Unfortunately, this hasn’t been prioritized for so long.


Next, school buildings and health facilities will have respective allocations of P125 billion and P10 billion. This is consistent with our thrust for human capital development. Flood control systems will also have P76 billion to protect our citizens, especially the poorest of the poor. Irrigation systems will have P26 billion to support rural development. This is essential to our promise of pursuing growth in lagging regions.


Our infrastructure budget is unlike previous infrastructure budgets – when we say we will spend P8.2 trillion for infrastructure, we mean real infrastructure not fudge infrastructure data. Because in previous years, the government will include, on top of the infrastructure data, things like nice offices, aircraft, cars for the police, etc. So the apparent data is not real infrastructure. In this case, when we say public infrastructure we mean roads, bridges, airports, seaports, irrigation systems and so forth.


The increased funding will allow us, because we asked for a bigger deficit from 2 percent to 3 percent of GDP, with allowance to make up for the past neglect on infrastructure. Believe it or not, the Philippines has the worst infrastructure in this part of the world.
For perspective, infrastructure spending in the Philippines had fallen short of the ideal level of 5 percent of GDP. It has only averaged 2.9 percent from 2010 to 2016 , and this is the fudge infrastructure data of 2.9 percent. This has led to the dismal quality of infrastructure despite our decent and sustained economic growth in more than a decade.


The insufficient funding has also been aggravated by frequent delays in procurement, deficiencies in project design, poor coordination during execution among other implementation inefficiencies.


But now that we have secure funding for infrastructure, the next question is absorptive capacity – is this doable? The short answer is yes. Let me explain.


Implementation and policy reforms will complement our aggressive infrastructure spending. We will change the way we implement projects.


First, construction work for major public infrastructure projects in urban areas – Metro Manila, Cebu, Davao – will go on 24 hours a day, 7 days a week, non-stop. This has been done in other places like Hong Kong, Singapore and Japan. This is unlike today where projects stop at 5 o’clock in the afternoon on weekdays and there is no work during weekends, the days when it is most convenient to construct.


Second, project monitoring will be strengthened by geo-tagging projects using modern technology – Google Maps and drones.


Third, the government has already started streamlining the approval process of major public infrastructure projects. Recently, in less than 60 days of this administration, the National Economic Development Authority (NEDA) Board approved nine (9) projects worth a P171.3 billion pesos. Eight (8) of these projects are infrastructure projects amounting to P161 billion pesos. Among these include the NAIA PPP Project, the Metro Manila Bus Rapid Transit and the Metro Manila Flood Management Project.


We also adjusted the economic hurdle rate. We reduced it from 15% to 10% due to the improved economic conditions. We expect that more infrastructure projects will be approved in the future, especially projects outside Metro Manila given the reduced hurdle rate. If we can borrow money at 5% or less, then it’s worthwhile to fund projects with a 10% rate of return on investment.


Finally, and this gives me a lot of confidence that we can do it, Cabinet Secretaries and senior officials will also be capacitated to ensure the timely and efficient utilization of public funds. The marching order from the President is very clear: use it or lose it. Meaning, use your budget or lose your job. He won’t tolerate incompetence.


On the policy front, the Implementing Rules and Regulations (IRR) of the Government Procurement Law has already been simplified within the first 100 days of this administration. It has been cited as a reason for delays in project implementation. So that we, in response to the criticisms, we have revised the IRR of the Public Procurement Law.


Now on PPP. We will continue the PPP program and it will be energized to fully tap the potential of the private sector. As of September 2016, 13 PPP projects are under implementation worth P292.3 billion. Forty (40) more projects are in the PPP pipeline for a total of P1.14 trillion. Among the big-ticket projects are the P170.7 billion North-South Railway Project and the P122.8 billion Laguna Lakeshore Expressway Dike Project.
Other projects include the operation, maintenance, and development of the New Bohol Airport, Davao Airport, Iloilo Airport, and the operation and maintenance of LRT Line-2.


By the end of 2017, we aim to roll out seventeen (17) PPP projects worth an estimated P580 billion. This is on top of the P8.2 trillion that I already mentioned.


We have also changed the rules of the PPP. We now entertain unsolicited proposals, subject to Swiss challenge. And we, the economic managers, have resolved that we will not use PPP as a way of raising revenues for the government. We feel that this is taxation without representation. So we will do away with the kind of PPP where the company that gives the highest premium wins. This will ensure that user fees will remain affordable to the common man.


We also prefer what we call Hybrid PPPs, where the government takes care of the financing and the construction, while the operations will be entrusted to the private sector. This way, the government can take advantage of lower borrowing rates through development assistance. At the same time, it will allow the private sector to efficiently manage operations of PPP projects.


Ultimately, we intend to cut the average timetable of PPP projects – from 29 months to 18-20 months. Different agencies of the national government are coordinating and instituting reforms to make this a reality.


Indeed, we will usher in the Golden Age of Infrastructure for this country. We are confident that this is achievable given careful planning and decisive implementation. As we embark on this exciting quest, we look forward to the support and participation of the private sector.


Thank you very much.

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Budget Secretary Benjamin E. Diokno congratulates the organizers of the Philippine Clean Energy Summit, held at the Sofitel Philippine Plaza. Sec. Diokno also assures the participants that the Duterte administration will deliver a balanced approach towards industrialization and environmental protection. 13 October 2016

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The Office of the Ombudsman, the Office of the President, and the Department of Budget and Management met for an Executive Briefing on the Integrity Management Program (IMP), the national anti-corruption program of the government. Budget Secretary Benjamin E. Diokno opened the meeting with his welcome remarks, followed by Assistant Ombudsman Evelyn A. Baliton, Chair of the Program Management Committee, and Atty. Froilan D. Montalban, Jr., Chair, OP-OMB Technical Working Group, for the introduction and overview of the IMP. Acting Director Hilario A. Favila, Jr., Co-Chair of the OP-OMB Technical Working Group, led the presentation of the next steps and introduction of team coaches. An open forum was conducted to better plan and improve the ongoing implementation of the IMP. Mr. Bingle B. Gutierrez, Executive Director of the DBM-Procurement Service closed the briefing. Also present at the IMP Executive Briefing were the OP and OMB coaches and officials and personnel from the PS-PhilGEPS. 13 October 2016

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Budget Secretary Benjamin E. Diokno explains the DBM Budget before the Senate Committee on Finance. 12 October 2016

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DBM Secretary Benjamin E. Diokno joins NEDA Director-General Ernesto Pernia and DoF Undersecretary Antonette Tionko in discussing the economic policies during the first 100 days of the Duterte administration.The 42nd Philippine Business Conference, held at the Marriott Grand Ballroom, gathers members of the private sector and representatives of the government in discussing important issues affecting commerce. 12 October 2016

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Budget Secretary Benjamin E. Diokno participates in the monthly meeting of the Australia-New Zealand Chamber of Commerce (ANZCHAM) held at the Philam Tower in Makati City. Sec. Diokno emphasizes that the business sector should look forward to an improved business environment and a more robust investment climate given the government’s fiscal policy. 11 October 2016

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Budget Secretary Benjamin E. Diokno discusses the economic and fiscal priorities of the Duterte administration at the monthly meeting of the Foundation for Economic Freedom (FEF) held at the Manila Golf and Country Club. Sec. Diokno assures the members of FEF that the policies of the administration will promote rapid and equitable growth.

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DBM Secretary Benjamin E. Diokno congratulates the Association of Carriers & Equipment Lessors, Inc. (ACEL) for their 50th Anniversary Celebration held at the Solaire Resort and Casino. Sec. Diokno explains the budgetary priorities of the Duterte administration, citing that the investments in infrastructure development will boost the manufacturing sector.
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Budget Secretary Benjamin E. Diokno participates in the discussion at the Makati Business Club Annual Meeting held at the Dusit Thani Hotel Makati. Sec. Diokno emphasizes that the fiscal policy for the next six years will support our expenditures on building infrastructure and developing our young population.
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The Commission on Appointments (CA) today confirmed University of the Philippines economist Benjamin E. Diokno as Budget and Management Secretary, making him the first member of the Duterte Cabinet to get the bicameral body’s nod. 28 September 2016

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Budget Sec. Benjamin E. Diokno discussed the Duterte administration’s budgetary priorities, focusing on planned infrastructure developments, at the Stratbase ADR Institute’s Economic Forum held at the Cellar Room, The Tower Club, Philamlife, Makati City. 28 September 2016

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Budget Sec. Benjamin E. Diokno was the Guest Speaker in the Philippine Investment Conference organized by the Chartered Financial Analyst Society of the Philippines. Diokno emphasized that the administration’s fiscal and economic policies will improve the business climate to attract more investors. 28 September 2016

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Budget Sec. Benjamin E. Diokno talked about the goals of expenditure program, budget reforms, and priorities of the Duterte administration during the 2nd Bankers General Assembly held in Shangri-La Hotel Makati. 27 September 2016

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Budget Sec. Benjamin E. Diokno talked before the lawyer members of the Philippine Constitution Association during its 50th Anniversary celebration at the Grand Ballroom of Diamond Hotel, Makati City. One of the highlights of the evening was the discussion on how the 2017 proposed budget is compliant with the Priority Development Assistance Fund (PDAF) and Disbursement Acceleration Program (DAP) Supreme Court decisions. 26 September 2016

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Budget Sec. Diokno at the 5th Anniversary of Open Government Partnership in New York, U.S.A.

 

All the President’s men at the United Nations General Assembly. Budget Secretary Benjamin Diokno, together with Foreign Affairs Secretary Perfecto Yasay Jr., attended the Heads of State and Government High-Level Event on the margins of United Nations General Assembly 71 to celebrate the 5th Anniversary of Open Government Partnership in New York, U.S.A. 17 September to 21 September 2016.
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DBM Secretary Benjamin E. Diokno participates in the World Bank Leadership Round Table Dialogue held at the Sofitel Philippine Plaza Manila. This dialogue convenes members of the academe, aid agencies and the Philippine government to share lessons in improving and expediting public service delivery. Sec. Diokno also discusses the budget and implementation reforms under the Duterte administration to ensure the timely disbursement and efficient expenditure of public funds. (14 September 2016).
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Budget Secretary Benjamin E. Diokno congratulates the Philippine League of Local Budget Officers in Luzon, Inc. (PHILLBO) for their Area Annual Convention-Seminar held at the Olivares College Convention Center in Tagaytay City. The seminar congregates local budget officers and representatives from local government units to discuss recent Public Financial Management (PFM) reforms. It also aims to enhance the leadership and managerial skills of participants to enable the efficient allocation of resources at the local and regional levels. (7 September 2016)
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Budget Secretary Benjamin E. Diokno meets with Mr. Kenji Sekiguchi, Chief Analyst, Mr. Masaya Konagai, Senior Analyst, and Editha Martin, Executive Director, visiting sovereign ratings analysts from Ratings and Investment Information, Inc. (R&I) and Moody’s Investors Service. (7 September 2016)
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Budget Secretary Benjamin E. Diokno discusses the fiscal priorities and reforms under the Duterte administration at the Euromoney Philippines Investment Forum held in Shangri-La at the Fort, Manila. The fiscal policies of the administration are geared to support infrastructure development and human capital investment to achieve rapid economic growth and equitable development. 6 September 2016.
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Budget Secretary Benjamin E. Diokno meets with the members of the United Nations Development Programme to discuss the UN work in the Philippines
The UN Team Members present are Mr. Ola Almgren, UN Resident & Humanitarian Coordinator and UNDP Resident Representative; Ms. Lotta Sylwander, UNICEF Country Representative; Mr. Titon Mitra, UNDP Country Director; Dr. Gundo Weiler, WHO Country Representative; Mr. Praveen Agrawal, WFP Country Representative; Mr. Jose Luis Fernandez, FAO Country Representative; Mr. Khalid Hassan, ILO Director; Ms. Teresita Bagasao, UNAIDS Country Director; Mr. Christopher Rollo, UN Habitat Country Programme Manager; Mr. Marco Boasso, IOM Director for Manila Global Administrative Center; Mr. Klaus Beck, UNFPA Country Representative; Mr. Fankhruddin Azizi, UNIDO Country Representative; Mr. Mark Bidder, Head of UN-OCHA; Mr. Hubert Staberhofer, Director, UNOPS; and, Mr. Harro Wittermans, Regional Coordinator, UNICRI. (2 September 2016)

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Budget Secretary Benjamin Diokno delivers his inspirational message to the participants of the 2nd Public Management Development Program (PMDP) Leadership Conference on September 1, 2016. The Secretary calls on public sector managers and executives to be partners of the Duterte Administration in change and development.1 September 2016

 

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Budget Secretary Benjamin E. Diokno, alongside Development Budget Coordination Committee members, responds to queries of the Senate committee on finance on the proposed national budget for 2017. Sec. Diokno reiterates that the proposed budget is strictly compliant with the Supreme Court decisions on the Priority Development Assistance Fund (PDAF) and Disbursement Acceleration Fund (DAP).31 August 2016
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Budget Secretary Benjamin Diokno, together with the Development Budget Coordination Committee (DBCC) members, explains the proposed P3.35 trillion national budget for 2017 during the first day of the DBCC budget briefing before the Senate committee on finance in the Senate of the Philippines, 30 August 2016.

 

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Budget Secretary Benjamin E. Diokno congratulates the Department of Budget and Management’s Procurement Service for the 2nd PS-PhilGEPS Annual Merchant Workshop held in The Bayleaf Intramuros, 26 August 2016. This workshop helps to level the playing field to all suppliers that are interested to do business with the Government. It also ensures that our merchants are fully compliant with the implementing rules and regulations governing the Government Procurement Reform Act, which would save them the hassle and trouble of the consequences from non-compliance.26 August 2016

 

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Budget Secretary Benjamin E. Diokno with Undersecretary Janet Abuel and the officials and staff of the Department of Budget and Management’s Procurement Service during the 2nd PS-PhilGEPS Annual Merchant Workshop. The Bayleaf Intramuros, 26 August 2016.

 

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DBM Secretary Benjamin E. Diokno discusses the 2017 proposed budget during the DBCC Presentation to the House Committee on Appropriations held on August 22, 2016. (22 August 2016)

 

 

 

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2017 Budget Submission. House Speaker Pantaleon Alvarez receives the 2017 National Expenditure Program from DBM Secretary Benjamin E. Diokno (15 August 2016).

 

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Flag Ceremony Speechby S/DBM Benjamin E. Diokno (Malacañang Palace, Manila, 8 August 2016)

Co-workers in government, Good Morning!
Today is the start of a brand new week, another chance for us to serve the people and our nation. Let’s learn from whatever oversignts, mistakes or shortcomings we’ve done in the past weeks, and resolve to do better this time.
Next Monday, August 15, President Duterte will submit to the Congress his first national budget. Given the limited time, we crafted a budget that will truly reflect President Duterte’s vision for a just, humane, peaceful and prosperious society. It embodies his dreams and aspirations for all Filipinos – rich and poor, old and young, educated and uneducated, from urban centers or rural communities.
We hope that we have prepared the budget well so that his first budget will bring momentum to start on the projects and reforms that would fulfill the Filipinos’ dream for our country – whether that be fixing the crumbling infrastructures, easing the
Filipino’s tax burdens, proportionately increasing the pay salary government workers, guaranteeing peace and order, and putting more attention to renewable energy and climate change issues.
We, in the Department of Budget and Management, have scrutinized the budget proposals of heads of departments, agencies, and government corporations, and made sure that we have given them the proper budget that they can handle. This way, people can expect that projects are successfully implemented. This way, wastage due to project delays will be reduced, if not totally eliminated.
The Duterte administration will have zero tolerance for corruption. Hence, we will make sure that every peso would go to is intended purpose and beneficiaries.
Admittedly, the 2017 national budget is not a perfect document. But I can assure you that it is much better than the original proposal that we’ve seen when we took over. Moreover, I promise that future budgets will be even better.
After the submission of the 2017 President’s budget to Congress, our next focus is the Budget Reform Act. This bill will incorporate some features of the Executive Order on Freedom of Information. I know that the previous administration had initiatives to make the budget transparent; we intend to improve on these initiatives and institutionalize these initiatives by working for the passage of the Budget Reform Act.
This way, the budget reforms become irreversible. The intent is make future presidents comply with the Supreme Court decisions on PDAF and DAP.
Another challenge for us is how to make the budget process truly transparent or open. The ordinary Filipino should be able to understand how much and where their taxes go. But just uploading tons of information on the website does not make the process truly open. Openness means that the ordinary man on the street understands the budget, that the budget be explained in a way that the ordinary man understrands. It also means that the citizens should be able to ask relevant data from any government agency and that agency is bound to provide them.
For now, these are our focus. But I know there is still so much to be done to help our President deliver the real change that he promised.
Rest assured, that the men and women of the DBM will do their best so that all the policies and decisions of the department will be for the welfare of the Filipino people. We will always be reminded of the thought that we are at our respective positions not as a matter of right, that we are just passing through, and that we are here to serve the Filipino people to the best of our ability.
Finally, having served under many presidents, let me say this: the success of any President depends not only on his competence, his hard work, his compassion for his fellowmen, and his political will. It depends, too, on the cooperation, hard work, and strong sense of public service by the entire civil service.
We’re lucky that we have a President who is committed to provide the greatest good for the greatest number, who’s willing to be the President of many, rather than a few, Filipinos.
For his sake and our own sake, let us all support him and wholeheartedly embrace him.
Maraming salamat po at magandang umaga sa inyong lahat.

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Secretary Benjamin Diokno shared President Rodrigo Duterte’s budget priorities for F.Y. 2017 during the joint meeting between the Rotary Club of Manila and the Rotary Club of Makati on August 4, 2016. (4 August 2016)

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DBM Secretary Benjamin E. Diokno attended the 1st General Assembly and Election of Officers of the League of Provinces of the Philippines (LPP) for the term 2016 – 2019 on July 24, 2016 at the Grand Ballroom, The Heritage Hotel, Pasay City.

Elected Officers are the following President Elect Gov, Ryan Singson of Ilocos Sur; Chairman Gov. Al Francis C. Bichara of Albay;  Exec. Vice Pres. Gov. Antonio Rafael G. Del Rosario of Davao del Norte; Sec. Gen. Gov. Edgar Chatto of Bohol;  Vice Presidents for Luzon Gov. Junie Cua of Quirino and Gov. David C. Suarez of Quezon;  Vice Presidents for Visayas  Gov. Roel R. Degamo of Negros Oriental and Gov. Adolph Edward G. Plaza of Agusan del Sur;  Dep.  Sec. Gen for Luzon Gov. Faustino G. Dy III of Isabela and Gov. Imee R. Marcos of Ilocos Norte; Dep. Sec. Gen. for Visayas Gov. Zaldy S. Villa of Siquijor; Dep. Sec. Gen. for Mindanao Gov. Imelda Q. Dimaporo of Lanao del Norte; Treasurers Gov. Herminia M. Ramiro of Misamis Occidental and Gov. Susan A. Yap of Tarlac;  Auditor Gov. Maria Jocelyn V. Bernos; Publication and Public Information Officers for Luzon Gov. Elias C. Bulut, Jr. of Apayao and Gov. Edgardo A. Tallado of Camarines Norte; Publication and Public Information Officers for Visayas Gov. Rhodora J. Cadiao of Antique, Publication and Public Information Officer of Mindanao Gov.  Steve C. Solon of Sarangani;  Council of Advisers are; Gov. Arthur D. Defensor, Sr., Iloilo, Gov. Amor D. Deloso of Zambales; Gov. Hermilando I. Mandanas of Batangas, Gov. Alfredo Maranon of Negros Occidental, Gov. Carlos M. Padilla of Nueva Viscaya, Gov. Carmencita O. Reyes of Marinduque and Gov. Alfonso v. Umali of Oriental Mindoro. (24 July 2016)

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Bejamin Diokno

 

Budget Priorities of the Duterte Administration

By

Secretary Benjamin E. Diokno

(Financial Executives of the Philippines’ 6th General Membership Meeting, Fairmont Hotel, 20 July 2016)

Good afternoon!

For FY 2017, the Duterte administration will propose to Congress P3.35 trillion budget.  This is higher by 11.6 percent than the current year’s budget of P3.0 trillion.  As a percentage of GDP, the 2017 budget represents 20.4 percent compared this year’s 20.1 percent of GDP. Despite the limited time to craft the budget, I will make sure that the 2017 budget is Duterte’s budget.

Since the new administration is all about getting the work done in the soonest possible time, let me go straight to our budget priorities:

INFRASTRUCTURE

For too long, public infrastructure has been neglected. As a result, the Philippine economy is deficient in all types of infrastructure—roads and bridges, ports and airports, railways and urban transit systems, irrigation systems and water systems. To address this, we will hike infrastructure spending from a low 5% to a high of 7% of GDP.

Next year, we plan to spend close to P900 billion for public infrastructure. Specific infrastructure projects to be pursued by the Duterte government include small, medium and large-scale projects that will be done in all regions— both highly developed and lagging—simultaneously, not sequentially.

The next six years will be The Golden Age of Philippine construction, both public and private.

SOCIAL SERVICES

The Duterte administration will also prioritize education in its budget. For the 2017 proposed budget, we are proposing P118B for the construction of school buildings, which is 44% higher compared to its FY 2016 budget. The budget of the Department of Education will be more than half a trillion pesos.

We will also revisit the conditional cash transfer (CCT) program, more popularly known as the Pantawid Pamilyang Pilipino Program, with the intention of minimizing the leakages (giving benefits to those undeserving and not giving benefits to the deserving) and minimizing the  program’s administrative costs.

At the same time, we will increase the government subsidy for health insurance premium payments for indigent families amounting to approximately P50B or a 15% increase over the 2016 budget.

We will adopt economic measures so that a bigger part of the budget will be used for projects that will truly benefit the Filipino people.

For the youth, we are committed to develop them into a productive and healthy work force.

FISCAL REFORMS

First of all, I will put a lot of effort in budget preparation. I know that underspending is largely due to poor budget preparation. The harsh truth is that it is not possible to implement well a poorly prepared budget. The latest DBM data showed that while infrastructure spending jumped 52.8 percent to P104.8 billion in the first quarter of 2016, the government continued to underspend. Many programs and projects which are not yet ready for implementation are included in the annual budget.

Sadly, department heads ask for a budget that they are unable to implement: they bite more than what they can chew.

Second, today, the DBM is giving an executive briefing on the budget process for secretaries and undersecretaries in charge of finance. This is so because underspending could also be due to the inexperience and ineptness of some department chiefs.

I will make sure that the national budget is strictly compliant with the Supreme Court decisions on the Disbursement Acceleration Program (DAP) and the Priority Development Assistance Fund (PDAF). Our goal is to have a Budget Reform Act that will address the abuses of the two previous Presidents in the exercise of the power to prepare and implement the government’s budget. Our goal is to restore the checks and balances of the three branches of government.

It is our goal to make the budget and the financial transactions of the Government truly open. Some features of Freedom of Information (FOI) Act, which will initially be issued in an Executive Order, will be incorporated in the proposed Budget Reform Act. We should disabuse our mind thinking that openness is simply uploading in the web tons of information on the budget. Real transparency is when citizens could request relevant data from DBM and the latter is obligated to provide them.

In sum, budgets for 2017, and every year until 2022, will support the president’s promise to improve the country’s poor public infrastructure; invest in human resources and develop the people, especially our youths, into a strong, competent and agile work force; modernize agriculture and transform rural communities; and develop lagging regions.

We have a lot of work ahead of us. We hope that you will become our partners in making true our promise of genuine change.

Thank you!

 

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Secretary Benjamin Diokno with the AB Political Science students of Ateneo de Davao University (29 July 2016).

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Opening Remarks By Secretary Benjamin E. Diokno 2016 Asian Development Bank-Open Government Partnership (ADB-OGP) Asia Pacific Regional Dialogue ADB Headquarters 21 July 2016

Our fellow open government reformers and practitioners, good morning.

It is my honor to welcome you to change. We are now part of an administration that is honest, competent, and will get things done.

Even when we are committed to change, we reiterate our commitment to the Open Government Partnership for better fiscal transparency, increased access to information, and greater citizen engagement. We will continue with the timely publication of all our essential budget documents, implement an executive order on the right to information, at least initially covering the executive agencies, and aim to tap the citizens directly to be more active in voicing out their concerns and suggestions to their leaders.

Budget consultation between leaders and their local residents should start at the grassroots level. In 2017, some half a trillion government resources, or roughly 15% of the total budget will go to governments in the nature of an unconditional grant.   The grant is formula-based hence, predictable and automatic released.  There is no absolutely politics in its allocation, appropriation and distribution.  Citizens have a stake in this central government grant to local governments. This unconditional grant, a result of the Local Government Act of 1991 is a fertile ground for budget consultation, fiscal responsibility, and fiscal transparency.

 

On Fiscal Transparency

Fiscal transparency will ensure that the all budget priorities of this administration embody the dreams and aspirations of the Filipino people. Through transparency, we can see a budget that will start to fix the country’s poor public infrastructure; a budget that will invest in our young in order to develop them into a strong, competent, and agile work force; a budget that will protect the poor and the underprivileged; a budget that will help modernize agriculture and transform rural communities; and a budget that will develop lagging regions.

We inherited an economy that is seriously deficient in all types of infrastructure—highways and bridges, seaports and airports, power systems, water systems, railroads, urban transit systems and telecommunications and it is high time that the government should pay attention to this major constraint to long-term sustainable growth.

Since one of the major changes in this administration would be higher public expenditures on vital infrastructure projects, traditionally a breeding ground of delays and corruption, fiscal transparency will play a major role. The budget documents will provide high-value information in formats which the public can easily access and understand.

We shall strive to show our people, and the rest of our partners in open government, that the 5-7% of the annual gross domestic product will go to public infrastructure with significant social rate of return.

 

On Freedom of Information

The recently issued Executive Order “operationalizing the people’s constitutional right to information and full public disclosure and transparency in the public service” will usher in a new era of transparency and accountability for the government. Some features of this Freedom of Information (FOI) Order will be incorporated in the Budget Reform Act which we all hope will curb the abuses of the past executive officials in the exercise of budget preparation and execution. This will make the budget and the financial transactions of the government truly open.  Real transparency is not the same as uploading in the web tons of data on the budget. The information has to be relevant and understandable to the man on the street. Openness means the citizens should be able to ask relevant data from the government and the agency is bound to provide them.

 

On Increased Citizen Engagement

Apart from continuing dialogues with local governments, civil society organizations, and other local partners from the academe, business and public sector unions, the Duterte administration promises to take it a step closer to the people. The President has ordered the creation of nationwide hotlines which will be manned by operators 24 hours, 7 days a week, covering the entire country. While these hotlines are primarily for complaints, it will also take citizen calls on practically any concern – including suggestions and feedback on government projects. Through this, we not only cut the bureaucratic delays that enable corruption, we also make sure that the government that works for the people and not the other way around.

Local Fiscal Responsibility and Accountability

We will also strive to have a systematically gathered local fiscal statistics to be published on the quarterly basis by the Philippine Statistical Authority.  This will provide policy makers, researchers, and citizens a basis for evaluating the fiscal behavior and performance of local authorities.

As you can see, the tasks ahead are formidable. We need genuine political will and competent governance to achieve institutional reforms that will touch the lives of ordinary citizens. So, let’s all get to work.

 

Thank you!

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July 4, 2016

Diokno back at DBM: Old spending habits must go

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bejamin Diokno 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third Tour of Duty with DBM

“I’m glad, I’m back!” – Diokno

Secretary Benjamin E. Diokno is pleased to be back at the Department of Budget and Management (DBM). The last time he headed the Department was in 2001 under the Estrada administration.

Even before his appointment as DBM Secretary in 1998, Diokno already served as DBM Undersecretary for budget operations from 1987 to 1991 under the administration of the late President Corazon C. Aquino. Among the many structural reforms he introduced, directly or indirectly, were: higher allocation for social services, decentralization, privatization, and trade liberalization.

As Chief of the DBM under the Duterte administration, Secretary Diokno plans to put a high premium on the timely implementation of projects. “There’s an economic cost of budget delay so we will not tolerate delays in projects,” Diokno said during the turnover ceremonies held on July 1, 2016 at the DBM Multi-Purpose Hall.     

Formidable Tasks Ahead

(Speech delivered by Sec. Diokno during the DBM flag ceremony on July 4, 2016.)

My co-workers in government, good morning:

As you know, this is my third tour of duty with the DBM – each one different from the other. The first, during the time of the late President Corazon C. Aquino, we were faced with huge budget deficits, limited resources, and huge debt service.

The second time was during the time of former President Joseph E. Estrada. At that time, we were in the midst of the Asian financial crises. The pressure was for the government to pump prime the economy, and we did. Unfortunately, Pres. Estrada’s term was cut short by an unconstitutional coup that left many of the budget reforms I initiated hanging.

The intervening 15 years – 9 for President Gloria Macapagal-Arroyo and 6 for President Benigno S. Aquino — were years of abuses of the President’s budget authority. In three (3) of Pres. Arroyo’s 9 years in office, she operated with a reenacted budget for the entire year. Pres. Aquino, on the other hand, will be long remembered for his unconstitutionally crafted Disbursement Acceleration Program (DAP).

I’m now given the opportunity this time around to complete the reforms that I have started during my truncated second stint. Having seen how fiscally-responsible budget rules were misused by two (2) immediate past Presidents, my goal is to have a Budget Reform Act that will curb the abuses of the President in the exercise of his budget preparation and execution responsibilities.

  • The term savings, use of savings, augmentation, reenactment and so forth will be defined clearly, consistent with the Supreme Court decisions on Priority Development Assistance Fund (PDAF) and DAP.
  • Some features of Freedom of Information (FOI) Act will be incorporated in the Budget Reform Act. This will make the budget and the financial transactions of the Government truly transparent. It is not enough that we upload in the web tons of information on the budget. Citizens should be able to ask relevant information from DBM and we are obligated to respond accordingly.
  • The concept and process of budget impoundment will also be clearly defined in the law, consistent with the congressional power of the purse.
  • The Budget Reform Act will incorporate all major budget reforms that have been adopted within the Executive Department but, as yet, without Congressional approval.

If enacted, the tighter budget rules will endure, long after President Rodrigo R. Duterte’s term is over.

Role of the DBM

We should not lose sight of the DBM’s major role in running the government. The DBM is responsible for preparing the President’s budget proposal to Congress and implementing the same after the General Appropriations Act is passed.

You and I, the men and women of DBM, are responsible for evaluating the effectiveness of agency programs, policies, and procedures, making sure that taxpayers’ monies result in outputs and outcomes that support the priorities of the administration.

You and I are responsible for assessing the competing funding demands among government agencies.

You and I are responsible for setting budget priorities.

You and I are also responsible for overseeing and coordinating the administration’s financial management and procurement.

You and I are responsible for improving public sector management, developing better performance indicators and coordination mechanisms.

Finally, you and I are also responsible for ensuring that legislative proposals affecting government organization, public sector wages, and those with funding implications, are consistent with the president’s budget and with administration policies.

The Immediate Focus: The 2017 Budget

In the next few weeks, our focus will be the preparation of the 2017 President’s budget.

I find no reason why the 2017 budget should be a transition budget.

We will strive to make it President Duterte’s first budget, as it should be. It should already embody his dreams and aspirations for the Filipino people – a budget that will start to fix the country’s poor public infrastructure; a budget that will invest in our young in order to develop them into a strong, competent, and agile work force; a budget that will protect the poor and the underprivileged; a budget that will help modernize agriculture and transform rural communities; and a budget that will develop lagging regions.

As you can see, we have formidable tasks ahead of us. These require hard work and strong cooperation from all of us. So, let’s get back to work with renewed energy and commitment to the common good.