(Conference Summary) Resilient PFM Reforms

Resilient PFM Reforms: Changing Gears for Growth and Development

 

Summary of Proceedings

Written below are the highlights of the conference last 8-10 March 2017.

 

Keynote Address

Hon. Ma. Leonor G. RobredoVice President of the Philippines

 

The speech of Hon. Vice President was entitled “Empathy and Compassion – The End Goals of Financial Transparency and Accountability”. It was delivered by Ms. Salve Duplito. At this time when the entire world is facing tremendous problems, peace is still elusive, calamities are more destructive and they are happening more often. There are global power shifts and geopolitical concerns that are making it difficult for nations to work together. There’s widening polarity in our society, and on social media, there’s so much fake news, post truths, alternative facts, and negativity. In the midst of all these, VP Leni would like to ask the participants to imagine the ordinary Filipino family. How is it faring? How are our people managing within this difficult environment? Those of us who work in government must always remember that this imagery is our reason to get up every morning, wade through traffic, and do everything we can to solve each problem that passes through our sphere of responsibility.

 

So many policies have already been instituted for transparency and accountability to happen. At the barangay to the provincial level, there’s the Full Disclosure Policy instituted in a Memorandum Order set up during Jesse Robredo’s time as DILG Secretary. But the next few years will yet be the most exciting years for all of you in this field. Technology and innovation are now developing at the fastest pace in the history of the world. There are so many breakthroughs that can redefine financial management and transparency. All these are fascinating developments that we must use not for technology’s sake, but for one thing: to serve our nation with empathy, dignity, integrity, and inclusivity. Excellence in government financial management is the heart of good governance. And the financial users and managers of the government are the ones that can make that happen, notwithstanding global and local geo-political noise, notwithstanding power struggles, notwithstanding the inability of the public to understand the daily difficulties that you face every day at work. VP Leni extended her gratitude for all the participants, for all that they do, and for all that they are. She reminded them that their strength must come from their inner scorecard, never from what other people say about them. Remember the image of the poorest Filipino family from the farthest barangay.

 

Technical Session 1: Updates – Budget and Treasury Management System (BTMS)

USec. Lilia C. Guillermo, Department of Budget and Management

 

USec. Guillermo explained as a backgrounder the following reforms to be introduced as a result of the gaps found in the 2016 PEFA findings: Unified Accounts Code Structure (UACS), Unified Reporting Standards (URS), Treasury Single Account (TSA), Program Expenditure Classification (PREXC), and Budget and Treasury Management System (BTMS). BTMS is an integrated, web-based Financial Management Information System that shall provide BTr and DBM with a complete budget and treasury management information system covering Budget Management, Budget Execution, Cash Management, Accounting and Fiscal Reporting. It can collect and organize financial information in a central database to support the Budget Execution and Budget Accountability phases of the National Budget Cycle. Furthermore, the guest speaker explained in detail the BTMS implementation phases, future major steps, and changes that BTMS brings about – like in the portal, in the budget execution (specifically about commitment and obligations, disbursements, receipts, payments, PPEs, accounting and financial reporting), in the integrated systems, in the online reporting, in having better controls, in automatic consolidation, in data capture at source, and in compliance with UACS.

 

Technical Session 2: Unified Reporting System (URS)

Director Vinzon R. Manansala, Information and Communications Technology System Service, DBM

 

The speaker first defined what URS is. It is an application developed to provide online data entry and submission for the various budget and financial reports. The features of the URS are the following: it has validations to control the amounts in each field, validates report data against other reports, with updated Unified Accounts Code Structure and National Expenditure Program /General Appropriations Act references, and ability to consolidate reports at various levels. Afterwards, she explained the Budget Execution Document (BED), which contains the agencies’ plans, spending schedules and physical targets. The BEDS serve as bases to facilitate the release of funds and enable prompt implementation of programs and projects, including the conduct of early procurement activities. In addition, the BEDs shall be used in measuring the agency performance. The BED forms are the following: BED 1, financial plan; BED 2, physical plan; BED 3, monthly disbursement program. In addition, the BFAR stands for the Budget and Financial Accountability Reports. The Budget Accountability Report is used by DBM in monitoring the performance of agencies and providing the President of the Philippines and other fiscal agencies with the necessary information for policy decision. The Financial Accountability Report, on the other hand, is the source from where COA gathers data in the agencies’ financial reports pertaining to Allotments, Obligations and Disbursements. The following are the BFAR Forms: BAR No. 1 – Quarterly Physical Report of Operation (QPRO), FAR No. 1 – Statement of Appropriations, Allotments, Obligations, Disbursements and Balances (SAAODB), FAR No. 1-A – Summary of Appropriations, Allotments, Obligations, Disbursements and Balances by Object of Expenditures (SAAODBOE), FAR No. 1-B – List of Allotments and Sub-Allotments (LASA), FAR No. 2 – Statement of Approved Budget, Utilizations, Disbursements and Balances (SABUDB), FAR No. 2-A – Summary of Approved Budget, Utilizations, Disbursements and Balances by Object of Expenditures (SABUDBOE), FAR No. 3 – Aging of Due and Demandable Obligations (ADDO), FAR No. 4 – Monthly Report of Disbursemens (MRD), and FAR No. 5 – Quarterly Report of Revenue and Other Receipts (QRROR).

 

Technical Session 3: Priority Programs to Improve BIR Service to the Taxpayers

Deputy Commissioner Celia C. King, Resource Management Group of Bureau of Internal Revenue

 

The guest speaker explained in detail the priority program of their government agency based on their vision (BIR is an institution of service excellence and integrity) and mission (to collect taxes through just enforcement of tax laws for nation building and for upliftment of the lives of Filipinos). Along this line, she discussed the Strategic Roadmap of BIR and the Collection Framework. For the year 2017, the BIR is tasked to collect Php 1.829 Trillion, which is equivalent to 79% of the National Government’s total projected tax revenues of Php 2.313 Trillion. To attain this, the agency has lined up the following programs namely: 1) Comprehensive Taxpayer Profiling and Industry Benchmarking, 2) Oplan Kandado Program, 3) Updating of Schedules of Zonal Value, 4) Broadening of the Tax Base, 5) Implementation of Centralized Arrears Management in Regional Offices, 6) Run after Tax Evaders (RATE) Program, 7) Exchange of Information – Foreign Account Tax Compliance Act, 8) Expansion of Compromise Settlement Program (LTS audit cases). When it comes to improving the taxpayers’ satisfaction, they have the following programs: review of revenue issuances, review of tax rulings, TP Segmentation (large, medium, small), simplification of tax forms, expansion of eFPS facilities through eBIRForms, additional options/facilities for payment of taxes, development of tax clearance processing system, enhancement of electronic registration system, and electronic tax information system, in-house enhancement of Electronic Certificate Authorizing Registration System, Geographic Information System, enhancement of electronic official registry book, and Internal Revenue Stamps Integrated System for alcohol products and distilled spirits. To protect revenues and recapture public trust, they have the following projects: Integrity Management Program, revalidation of tax assessment, Salary Standardization Law, expediting of recruitment of personnel, and use of Case Monitoring System.

 

Technical Session 4: Government Data Privacy Act

Atty. Ivy Grace T. Villasoto, Chief of Policy Development Division, National Privacy Comission

 

Atty, Villasoto explained in depth the Data Privacy Act of 2012 or the Republic Act No. 10173, otherwise known as An Act Protecting Individual Personal Information in Information and Communications System in the Government and the Private Sector, Creating for this Purpose a National Privacy Commission, and for Other Purposes. It applies to the processing of all types of personal information and to any natural and juridical person involved in processing in the Philippines.  The data privacy principles revolve around transparency, legitimacy purpose and proportionality. Furthermore, the personal information controller must implement reasonable and appropriate organizational, physical, and technical measures intended for the protection of personal information against any accidental or unlawful destruction, alteration and disclosure, as well as against any other unlawful processing. Data sharing is the disclosure or transfer to a third party of personal data under the control or custody of a personal information controller or personal information processor. Personal Data Breach pertains to the breach of security leading to the accidental or unlawful destruction, loss, alteration, unauthorized disclosure of, or access to, personal data transmitted, stored, or otherwise processed.

 

Technical Session 5: What Civil Servants Need to Know

Chairperson Alicia dela Rosa Bala, Civil Service Commission

 

Chairman dela Rosa Bala was substituted by the Regional Director Cecilia R. Nieto. The title of the talk was “What Civil Servants Ought to Know”. The agency vision by 2030 is to be the Asia’s leading center of excellence for strategic Human Resource and Organization Development. The speaker also explained the current status and achievements of the agency including the Anti-Red Tape Act of 2007, Citizen’s Satisfaction Center Seal of Excellence Award. In addition, she explained their Program to Institutionalize Meritocracy and Excellence in Human Resource Management (PRIME-HM). She emphasized that there is much change needed to be introduced specially that there is already the ASEAN Integration.

 

Technical Session 6: Disaster Risk Reduction Management

Regional Director Blanche T. Gobenciong, Office of Civil Defense Regional Office V

 

The speaker discussed and differentiated Disaster from a Hazard. The former is a serious disruption of the functioning of a community or a society involving widespread human, material, economic or environmental losses and impacts, which exceeds the ability of the affected community or society to cope using its own resources while the latter points to a dangerous phenomenon, substance, human activity or condition that may cause loss of life, injury or other health impacts, property damage, loss of livelihood and services, social and economic disruption or environmental damage (RA 10121). The speaker explained that because of the geographical location of the Philippines – it is located along the Pacific Ring of Fire and Pacific Typhoon Belt – is a recipient of frequent disasters. These natural characteristics of the Philippines make it experience all these natural calamities that the country normally undergoes. He further visualized the reasons behind natural disasters with a formula:

R = H x V x E

              C

R, risk; H, hazard; V, vulnerability; E, exposure; C, capacity

He clarified that there are no such things as natural disasters but only natural hazards. Thus, what people have to do is to reduce the R, risk by adopting early warning systems, and strengthening the over-all capacity to respond to the effects of disasters.

Through the RA 10121(enacted on 27 May 2010 during the term of Pres. Arroyo), there has been a paradigm shift in the Philippine Disaster Risk Reduction Management (DRRM). Simply put, DRRM is the systematic process of using administrative directives, organizations and operational skills and capacities to implement strategies, policies and improved coping capacities, and in order to lessen the adverse impacts of hazard and the possibility of disaster. At present, the country’s DRRM is more proactive, bottom-up, participatory and holistic. The challenge now is to have greater cooperation among stakeholders and to correct the notion that DRRM is only a government concern but to consider it as a way of life.

 

Technical Session 7: Health and Wellness: Learning Session on Choosing, Living and Maintaining Healthy Lifestyle

Ms. Arlene R. Reario, Regional Nutrition Program Coordinator of the National Nutrition Council RO V

 

The speaker started with the National Nutrition Council Mandate in which their agency is tasked to formulate national nutrition policies and strategies, to coordinate the national food and nutrition program, and to look for funds for their agency’s programs. Their caption for this year is “Healthy Diet, Gawing Habit – for LIFE!” She explained that nutrition is all about gaining nutrients for one’s action, interaction, and balance. A healthy diet includes fruits, vegetables, whole grains, root crop, and fat-free or low-fat milk, lean meats, poultry, fish, beans, eggs and nuts, and low in saturated, trans-fat, cholesterol, salt (sodium) and added sugars. On the other hand, an unhealthy diet is something that is composed of foods that are energy-dense, nutrient-poor, high in saturated fat, trans-fat, refined carbohydrate, and salt, low in consumption of fruits and veggies and low in fiber. She also explained how the Pinggang Pinoy is – ¼ – go, ¼ grow, ½ glow.

 

Technical Session 8: Financial Management: A Personal Perspective

Chief Executive Officer Dr. Carl E. Balita, CEB Group of Companies

 

Dr. Carl E. Balita emphasized that financial wellness resonates three big words – abundance, greatness and prosperity. In relation to this, he said that people have to distinguish needs versus wants. Furthermore, he hammered on the idea that savings has to be set aside first before dealing with expenses. In fact, he said that those who have a rich mindset, savings is like an electricity to them; rich people get electrified when they are not able to save. Along the line of savings, he encouraged the people to invest so that they can earn more passive money. The Rule of Thumb is that a person has to have money good for three months even without working for it. In order to attain financial freedom, he posed four questions: What I love? What I am good at? What does the world need? And, what I am paid for? The converging point of all these is purpose, and this is the beginning of one’s financial freedom. He concluded his talk with the acronym EUC, which stands for Enrich ABUNDANCE, Unleash GREATNESS, and Channel PROSPERITY.

 

Technical Session 9: Government Accounting Manual (GAM) for NGAs and Revised Chart of Accounts for GOCCs

Director Luzvi Pangan Chatto, Government Accountancy Sector of COA

 

Dir. Luzvi Pangan Chatto explained that at the moment, the government is in the process of updating the PFM Reform Roadmap based on the PEPPA (?) – this was an assessment done by seven international partners and which was led by the World Bank. At present, several reforms have already been implemented, but there are still gaps and deficiencies remaining and which have not yet been addressed. The reforms are continuously being implemented. Accountancy-related reforms that have been implemented are already included in the GAM. The legal basis for the reforms is the Article 1X-D, Section 2 par. (2) of the 1987 Phil. Constitution

GAM is for NGAs, and it is a PFM Reform. Furthermore, it is an activity of the Accounting and Auditing Reforms Project under the PFM Reform Roadmap, prepared by a committee supervised by COA’s Philippine Public Sector Accounting Standards Board, funded by a KfW Technical Assistance Fund, approved by COA Commission Proper, through COA Circular no. 2015-007 dated Oct 22, 2015, and has been in use effective January 1, 2016. The objective of the GAM is to provide updates on the following: Government accounting policies, guidelines; Coding structure and accounts; Accounting books, registries; and Illustrative accounting journal enterprise. The GAM has three volumes: Volume I: 22 Chapters, 12 Annexes, Acronyms, acctg standards and policies; guidelines and procedures; illustrative acctg entries sample formats of the FS; Volume II: 92 Appendices; books, registries, records, forms and reports; instructions: how to accomplish the forms, records, etc.; when/where to submit the forms, reports, etc; Volume III: 3 chapters; list of accounts; Codes and Descriptions of Accounts. The speaker explained in detail the changed adopted in the GAM such as in terms of new standards, components of FS, FS titles, Chart of Accounts, UACS, books maintained, fund maintenance, inventory, estimated useful lives of PPEs, PPE threshold, residual value, cash flow, completed public infrastructures and reforestation projects, statement of financial position, accounting for donation, Statement of Financial Performance, Subsidies, Transfers, and impairment loss.

The second topic of Dir. Pangan-Chatto was about eNGAS including the funding source, Revised Chart of Accounts (RCA), General Ledger Account (GLA), Subsidiary Ledger Account, Responsibility Center, Debtor/Creditor, Cash Flow Format, Transaction Menu, Journal Entry Voucher (JEV), Depreciation Schedule, Amortization Schedule, Transfer of CIP to PPE, Prepayments, Forwarding Balance, PPE Schedule, Inventory Schedule, Schedule of SL Balances, and Schedule of Accounts Receivables and Accounts Payables.

 

Technical Session 10: E-Trends in Government

Sec. Monchito B. Ibrahim, Department of Information and Communications Technology

 

The speaker first noted that in DICT, they are always guided by what A. Einstein said, “We can solve problems by using the same kind of thinking when we created them.” Due to the issuance of an Executive Order, there has been a mandate to create the National Government Portal, which will serve as a one-stop shop of online government services. With this platform, anyone can access government. Citizens do not need anymore to access brick and mortar type of government. The one-stop portal will operate end to end, which means a citizen has just to fill out one form and the data from here can already be applied and used for all government agencies. The only problem is that there is no provision yet for online payment. As such, there will only be one registry/database for every person, vehicle, business entity, land title, among other that will be eventually shared by all agencies. This registry will be housed in DITC.

There is also an approval of the President for DICT to pursue and implement the National Broadband Plan (subject of DICT letter to the Pres., dated 10 Feb 2017). This mandates free Wifi nationwide that hopefully can cover all LGUs by the end of this year. This is intended for public use and not really for the agencies.

In addition, the speaker also discussed the Virtual Currency, which, in his estimate, will be in use in the future. Thus, the nation also has to start learning how to make use of this in government procurement.

Finally, DICT is trying to pass the Cybersecurity Policy to ensure the protection of the use of cloud. Government cloud will be put somewhere so that the data on that cloud will not move out of the territorial jurisdiction. The government cloud will only stay within Philippine jurisdiction.

 

EUC Convention Resolutions

By EUC President, Asst Com. Carmela S. Perez

 

There President highlighted the importance of having EUC Convention Resolutions. She explained that through these, concrete things are already taking place such as echoing the SSS benefits. The following are the EUC Resolutions for this Conference:

  1. To have a strong support for the exclusion of the bureau of internal revenue from the salary standardization law
  2. To reiterate the proposal to increase travel rates
  3. To intensify support in promoting DRRM
  4. To propose to increase earned leave credits – VL (vacation leave), SL (sick leave), SPL (special privilege leave), FL (forced leave) & PL (paternity leave)
  5. In support of Data Privacy Act implementation, to promote awareness on requirements for all agencies to designate data protection officer, to conduct data privacy assessment, and to register agency data processing systems with national privacy commission.
  6. To upgrade information technology organization structure and plantilla positions in agencies
  7. To partner with and support the DICT in the promotion of all its initiatives, programs and projects

 

~

Written in my capacity as the Rapporteur General of Electronic Financial Users’ Circle, Inc. (EUC)

This was published originally in the website of EUC at http://euc-inc.ph/.

 

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