1. Medium-Term Fiscal Framework, Expenditure Management Framework, and Guidelines in the Preparation of Tier 1 & Tier 2 Budget....

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1. Medium-Term Fiscal Framework, Expenditure Management Framework, and Guidelines in the Preparation of Tier 1 & Tier 2 Budget National Budget Call for FY 2025

2. Outline of Presentation Medium-Term Fiscal Framework E xpenditure Management Framework G uidelines in the Preparation of the National Budget Composition of Tier 1 and Tier 2 Budget Proposals Preparation of Tier 1 Forward Estimates

3. Macroeconomic and Fiscal Targets under the MTFF Real GDP Growth in 2022 6.5 – 7.5% 6.5 – 8.0% Real GDP Growth annually between 2023 to 2028 9% Poverty rate by 2028 3% NG deficit-to-GDP ratio by 2028 < 60% NG debt-to-GDP ratio by 2025 ≥ $4,256 Income (GNI) per capita (attainment of upper middle-income status)

4. Expenditure Management Framework 8-point Socioeconomic Agenda Philippine Development Plan (PDP) 2023-2028 Medium-Term Fiscal Framework Build Better More program LGU capacity-building programs Harmonization of Regional Plans with National Priorities

5. Expenditure Management Framework (cont.) 2-Tier Budgeting Approach (2TBA) Unified Accounts Code Structure (UACS) Program Expenditure Classification (PREXC) Disaggregation of lump-sum amounts Cash Budgeting System (CBS) Monitoring and evaluation system Program Convergence Budgeting (PCB) Open Government Partnership (OGP)

6. Tier 2 (New Spending and Expansion of P/A/Ps) Two-Tier Budgeting Approach (2TBA) Tier 1 (Ongoing Spending) Total Proposed Budget

7. Composition of Tier 1 Budget Proposals The Tier 1 shall be composed of the known budgetary amounts that are essential for the continued implementation of existing approved PAPs. The updated FYs 2025-2026 Tier 1 forward estimates based on Annex A of NBM No. 147 The formulated Tier 1 FEs for FY 2027

8. Composition of Tier 2 Budget Proposals The Tier 2 shall be composed of high priority new or expanded P/A/Ps, which are implementation ready. Proposals for the scaling up of activities in terms of policy change such as scope, beneficiaries, design or implementation schedule. Essential operation, maintenance, asset replacement and minor capital costs, including funding required for capacity building programs to LGUs

9. Preparation of the Tier 1 Forward Estimates For FYs 2025-2027, the Tier 1 FEs shall be prepared by the DBM in consultation with the departments/agencies concerned The FEs shall consider the adjustments arising from changes in macroeconomic parameters The budgetary requirements in the formulated FYs 2025-2027 FEs shall take into consideration the agency's 2023 Budget Utilization Rate (BUR) Estimates based on demand driven parameters shall all be subject to BUR. The targeted outputs and outcomes shall be consistent with the level supported by the cash-based budgetary requirements The department/agencies shall be advised of their approved FYs 2025-2027 FEs

10. Key message With the impact of the country’s debt burden and the competing demands of government agencies, the allocation of the FY 2025 Budget will be optimized. The evaluation process will consider the utilization of the previous years’ budget of the agencies, and the implementation progress of their mandated programs and projects. Ensure that only those agency proposals, which are implementation-ready, are included in the budget.

11. Thank you!