Reporter: Saeed fathalla G.

Casim
Expenditure system I. Introduction
 For developing countries, it is the fiscal arm of the government in
producing, allocating, and distributing social goods and services.
Public expenditures
 At the right level and proper mix, they can have beneficial effects on the
lives of the people.
Expenditure policies
 In a less-developed country, they are designed and executed according to
development objectives and strategies.
 A well-formulated set of expenditure policies, faithfully and capably
implemented, can perform its proper fiscal role for development.
Expenditures
 They are geared towards a solution of so-called developmental problems
which obstruct the development process.
LDCs fiscal policies formulation
 Western economic precepts should not be readily copied or applied in LDCs
because of the differences in the economic, political, and cultural characteristics
between the West, and the LDCs.
 A Western fiscal policy as applied to industrialized countries may induce the
desired economic effects, but if used by LDCs produces a different set of results,
more often aggravating the problem it addresses.
Philippines case on LDCs
 LDCs feature a social structure of extreme class disparities and extreme poverty.
Urgent considerations of LDCs expenditure policies:
• Elimination of poverty and
• The reduction of inequalities between these classes by a redistribution of income
and wealth.
1. Redistribution of Income and Wealth and Balanced Development
 Income and wealth redistribution is one main policy of Philippine government
 Expenditure system should make available government services to areas or sectors
where public goods and services are insufficient or not available.
2. Economic Development
 Increased government spending as also a means of providing employment to the
people.
 Allocation of funds would be given priority to economic services for capital
formation.
 Infrastructures serve as a counter-cyclical policy measure to cushion the effect of
recession and keep the buoyancy of the economy.
 Intensify the food production to meet the needs of the growing population and to
lessen the effects of inflation.
3. Stability
 The expenditure policy must have preparedness and sufficient flexibility in
reacting to sudden economic changes both in local and international
scenes.
 It is the Philippine government’s policy
 to pursue expansionary measures and to maintain whatever growth
momentum is attained in previous periods.
 to promote desirable level and distribution of employment and income as
well as of output and prices.
 to aim at determining the favorable levels of financial operations to have a
sound impact to these factors on the major economic aggregates.
 The maintenance and improvement of the domestic peace and order
situation for the sustained growth and development of the economy and
society.
4. Countryside development
 High priority is given to projects that promote integrated regional
development.to effect the dispersal of industries in the regions.
• will make viable the full utilization of labor and the resource potentials of
the rural areas.
• will help curb the problems of migration into the urban centers.
 IV. CLASSIFICATION OF PHILIPPINE
EXPENDITURE
1. Level of government
a. National government
b. Local government
2. Nature of expense
a. Current operating expenditure
i. Personal services
ii. Maintenance and operating expenses
b. Capital expenditures
 IV. CLASSIFICATION OF PHILIPPINE
3. Functional categories
EXPENDITURE
a. Economic development/Services
b. Social economic/Services
c. National defense
d. General government/Public services
e. Debt services
4. Types of funds
a. General fund
b.Special account- General fund
c. Bond- fund
5. Organizational units
 V. PATTERNS OF GOVERNMENTAL EXPENDITURES

 The Philippine economic performance in 2017 demonstrated that the domestic economy continues to be
on a steady growth track despite presence of domestic and external challenges.
 Real gross domestic product (GDP) rose by 6.7 percent in 2017, 2 percentage points ( higher than the low
end of the growth target range of the national government (NG) of 6.5 percent to 7.5 percent for the year.
V. PATTERNS OF GOVERNMENTAL EXPENDITURES

While moderating, household spending and investments continued to be the

two major contributors to the 2017 output growth. Household spending
decelerated by 5.8 percent in 2017 compared to its 7.0 percent growth recorded
last year.
 VI. EXPENDITURE PATTERNS BY LEVEL OF GOVERNMENT

 under president Benigno Aquino III, the Philippine economy enjoyed an impressive performance record. real GDP
growth averaged 6.1 per cent per year between 2010 and 2015.
 economic growth during the Aquino years has been fastest in the secondary and tertiary sectors, especially financial
intermediation, construction, real estate, manufacturing, transportation and communication, and trade industries.
 however, agriculture registered a relatively disappointing performance, growing at an average of only 2 per cent per
year in real terms.
 VI. EXPENDITURE PATTERNS BY LEVEL OF GOVERNMENT

 although Estrada was deposed in january 2001, the economy grew by an

average of 3.7 per cent per year in real terms during his term of office,
while east asian economies struggled to recover from the 1997 contagion.
 the arroyo presidency witnessed real gdp growth, averaging 5 per cent per
year despite at least three attempts and considerable mass opposition.
 VII. EXPENDITURE PATTERNS ACCORDING TO NATURE OF EXPENSE

 AS OF DECEMBER 2017, THE NATIONAL GOVERNMENT SPENDING HAS

REACHED PHP2,823.8 BILLION. THE AMOUNT IS UP BY 10.8% FROM THE SAME
PERIOD (JANUARY-DECEMBER) IN 2016.
VIII. THE EXPENDITURE PATTERNS OF THE NATIONAL GOVERNMENT
 The agriculture, hunting, forestry and fishery (AHFF)
sector decelerated slightly in Q4 2017 to 2.4 percent
from 2.6 percent a quarter ago. The slower growth of
AHFF for the quarter was due largely to the slowdown
in agriculture and decline in fishing
 Growth in the industry sector likewise eased to 7.0
percent in Q4 2017 from 8.1 percent in Q3 2017. This
can be attributed to the slower growth in
manufacturing (7.9 percent from 10.1 percent) and
mining and quarrying (5.4 percent from 7.9 percent),
which outweighed the acceleration in the growth of
electricity, gas and water supply (EGW) (5.5 percent
from 3.4 percent) and construction ( percent from
4.0 percent).
 The services sector output grew by 6.9 percent in Q4
2017, slower than the previous quarter’s 7.3 percent.
The deceleration can be attributed to the tempered
growth of financial intermediation ( percent from
8.9 percent), real estate, renting and business
activities (6.6 percent from 7.8 percent) and other
services (6.3 percent from 7.5 percent).
 VIII. THE EXPENDITURE PATTERNS OF THE NATIONAL GOVERNMENT

 In other services, the softened growth stemmed from the lower growth of education. Meanwhile, growth in
the following sub-sectors accelerated from a quarter ago.
 Since 2013, most public spending has been directed to education, health, and infrastructure in order to
increase human and physical capital investment. The bulk of programmed social spending has historically
been in the areas of education, culture, and manpower development, which constituted 21.2
percent of total public expenditures, or 4.5 percent of GDP in 2017 (Figure 17).
 IX. INTERNATIONAL COMPARISON
 In 2017, the Philippines was among the top three growth performers in the region,
with an annual GDP growth rate of 6.7 percent. The country’s economic growth was
anchored in strong exports, while investment growth significantly slowed and
consumption growth moderated.
Thank you!