Philippines: Bottom up / Participatory Core Budgets

Bottom Up Budgeting (BuB) or Grassroots Participatory Budgeting (GPB) in the Philippines was introduced in 2012 for the preparation of the 2013 budget. It is a mechanism that aims to deliver basic social services to the poor and serve as a guide for poverty reduction projects by promoting public participation in the budget preparation and empowering the citizenry through a bottom-up approach. The BuB process promotes inclusiveness by allowing civil society to be engaged directly in the budget process and to be able to directly influence actual allocations in the national budget.[ref]

The BuB process’ innovation lies in the fact that citizens, civil society organizations (CSOs) and Local Government Units can participate directly in decisions on the allocation of the national budget.[ref] Broader objectives include making the national budget process more responsive, encouraging local governments to implement reforms, and to reduce the influence of elites on public policy-making in the Philippines.[ref] The program is intended to promote improvements in government openness, accountability and responsiveness, and to deepen citizen engagement in the formulation, implementation and monitoring of government programs. In addition, it helps to tailor programs to community needs, thereby limiting waste and maximizing efficiency.

The pilot implementation of the BuB process in 2012 involved 595 cities and municipalities, resulting in P8 Billion worth of locally-determined poverty reduction programs (0.44% of the 2012 national budget, which was P1.816 trillion). Since then, the BuB Process has been gradually expanded.

While in 2013 and 2014 eligibility from Local Government Units (LGUs) was limited by criteria such as high poverty incidence, high economic potential or areas that are vulnerable to disasters, since 2015 all LGUs have been eligible to participate. The 2016 BuB included 1,514 cities and municipalities and a budget of P24.7 billion (0.8% of the national budget of P3.002 trillion).[ref]

The government did not include all LGUs in the first rounds of the project due to the inherent difficulties that would have come with the rollout of a project of this scale.[ref] In addition, some LGUs, although they were eligible, did not receive BuB projects because they failed to comply with the project requirements.[ref]

In 2017, the BuB Process will be expanded to cover 42,036 barangays (villages) nationwide. As a reference, in 2015, the number of barangays in the Philippines was 42, 036.[ref] In 2015, 92% of all communities in the country joined the program.

As it will be explained later on, the BUB process successfully illustrates a number of the GIFT public participation principles in action, such as openness, sustainability, inclusiveness, respect for self-expression, transparency, proportionality, timeliness and reciprocity. It is a good example of a practice where the various principles work together and complement each other to make the mechanism a successful act of public participation.

The practice takes place during the budget formulation and implementation stage, and engages the executive branch at the central as well as the subnational levels.

The BuB aims to support the development needs of the poorest communities through providing funding for locally identified projects under the General Appropriations Act.[ref] As such, the project also aims to make the planning and budgeting processes of both national and local governments more participatory by directly involving grassroots organizations and communities in these processes.[ref]

The objectives of the BuB include making the national government more responsive, encouraging local governments to implement reforms, and to deepen democracy and empower the citizenry.[ref] The BuB is coordinated by the Department of Budget and Management, with cooperation from the Department of the Interior and Local Government (DILG) and the National Anti-Poverty Commission. Project management is overseen by the DILG.

The DILG handles coordination between the various levels and actors of the project. These levels include the national agencies participating in the project, the regional government offices that participate in coordination, and the local teams, where decision-making takes place.[ref] Planning and implementation is guided by specific Planning Guidelines (for budget preparation) and Implementation Guidelines (for budget execution) from the Department of Budget and Management, which releases these annually. In addition, implementing agencies issue their own implementation guidelines each year.[ref]

The BuB process takes place in the framework of the Principles of Department of Budget and Management (DBM)-Civil Society Organizations (CSO) Engagement, an instrument put in place between the DBM and the CSO community on how parties interact with each other with respect to fiscal policy.[ref]

The BuB takes place over several stages. In Stage 1, the CSO Assembly members are selected and the CSO Assembly forms. In Stage 2, the Assembly reviews and analyzes social and economic data and selects priority projects to recommend to the Local Poverty Reduction Action Team (LPRAT). Also, the LPRAT identifies the ones to select and a Local Poverty Reduction Action Plan (LPRAP) is prepared. In Stage 3, implementation of projects is done through the coordination of participating agencies’ regional and/or provincial offices and partner LGUs.

Stage 1

The CSO assembly and the LPRAT workshop are the main components of the process and they are both situated at the local level. The BuB process provides for the convening of a general assembly of CSOs who elect their representatives to the LPRAT to determine local priority projects. This happens at least once a year. The CSO assemblies are convened by city and municipal level officers of the DILG, facilitated by a Community Mobilizer (CM) from the DILG, with the support of the provincial representatives of the basic sectors in the National Anti-Poverty Commission (NAPC).

According to the Guidelines for FY 2016, the schedule of the CSO assembly is announced by the CM through invitations to CSOs and posters in the city/municipal hall at least two weeks before the CSO assembly. The list of CSOs invited and information about the person/office who may be contacted by other local CSOs who wish to be invited is also posted in the municipal bulletin board of the city/municipal hall at the same time. DILG posts the schedule of all CSO assemblies on the DILG website and on the OpenBuB Portal. The CM gives an orientation to CSOs on the BuB Program during the Assembly, and the CSOs independently select individuals who will represent CSOs in the LPRAT.

Those elected as representatives to the LPRAT are to be accountable to, and in their actions as representatives, guided by the decisions and agreements of the CSO Assembly. They render reports to the CSO assembly at the regular meetings and through letters or email when and where applicable.[ref]

LPRAT membership is based on equal representation of government and CSOs: half of the membership in the LPRAT is from the government, and the other half is from the CSO sector. Forty percent of the LPRAT membership must be women. The team is co-chaired by the Local Chief Executive and a CSO representative. Other members include:

• Sangguniang Panglungsod/Bayan member, Chairperson of the Committee on Appropriation.
• President of the Liga Ng Barangay
• All local government department heads, such as the Planning Officer, Budget Officer, Agriculture Officer, Social Welfare and Development Officer, and Health Officer.
• Representatives of national government agencies (NGAs). These include Department of Social Welfare and Development Municipal Links, PESO (Public Employment Service Office) Manager, the DILG City/ Municipal Local Government Operations Officer, the School District Supervisor, and the Agrarian Reform Officer.
• A representative from the business sector.[ref]
• Representatives of CSOs (must be residents of the community):
• A Pantawid-Pamilya Parent-leader;
• A leader from Department of Health organized Community Health Teams;
• A leader of parent-teacher associations;
• A leader of CSO-accredited LGUs;
• A leader of CSOs recognized or accredited by NGA;
• A leader of women’s groups;
• A leader of basic sector organization;
• A leader of other community or grassroots organization;
• In cities/municipalities where Indigenous Peoples (IPs) comprise over twenty-percent (20%) of the population, one of the elected representatives must come from the IP sector.

Elected officials at the national and local levels, including the barangay, their immediate relatives (spouse, parent, sibling, child), and LGU employees are ineligible to be elected as CSO representatives.

Regional Poverty Reduction Action Teams (RPRATS) provide support and guidance to the LGUs throughout the BuB Process. The RPRATS also monitor implementation of the BUB projects. The RPRAT includes as Chairperson the DILG Regional Director and as Vice-Chairperson the DBM Regional Director. Members come from various national government agencies and also include a CSO representative per province, as identified by the NAPC.

There are two modalities under the BuB Process: the regular BUB Process and the Enhanced BuB Process. The regular process is employed for areas that are not covered by the Kapit-Bisig Laban sa Kahirapan (Comprehensive and Integrated Delivery of Social Services) or the National Community-Driven Development Program[ref] (Kalahi-CIDSS Program), while the enhanced process is for local government units that are either currently in the Kalahi-CIDSS program or that have graduated from it. While under the regular BuB Process, an LPRAT is formed, under the enhanced process, the LPRAT performs its functions as a technical working group of the Local Development Council.[ref]

-Regular BUB Process:

Under the Regular BuB Process, the government representatives include the Chair of the City or Municipal Committee on Appropriation, as well as the City or Municipal Department Heads such as the Planning Officer, Budget Officer, Fishery and Agriculture Officer, Social Welfare and Development Officer, Health Officer, Community, Environment and Natural Resource Management Officer (CENRO) and Public Employment Service Office (PESO) Manager. The representatives of national government agencies that sit in the LPRAT include the Department of Social Welfare and Development (DSWD) Municipal Links, the DILG Local Government Operations Officer, the School District Supervisor, and the Agrarian Reform Officer.

The CSOs with seats in the LPRAT should come from a diverse selection of groups, such as parent leaders, community health teams, local business associations, parent-teacher associations, and women’s group, among others (see list above). 

-Enhanced BUB Process:

In the enhanced BuB Process, the PPRAT serves as the technical working group of the Enhanced Local Development Council (LDC). The LPRAT consists of 10 representatives from government, five Barangay (Village) Development Council Vice-Chairpersons selected trough the KALAHI-CIDSS Program, and five CSO representatives who got elected during the CSO assembly.

Stage 2

Following the selection of representatives, the assembly reviews, validates and analyzes social and economic data of the city/municipality and proposes solutions to its concerns and problems. The City/Municipal Planning and Development Coordinators with the local finance committee (LFC) and other department heads of the LGU, will provide technical assistance to the CSO assembly in doing the local poverty situation analysis. The CSO assembly identifies priority projects that will be proposed by their elected representatives to the LPRAT based on the latest available BuB Menu of Programs. Not all proposed priority projects will be included in the Local Poverty Reduction Action Plan (LPRAP).

The LPRAT identifies priority projects through consensus among its members. If consensus cannot be reached, the decision is made through a majority vote.[ref] The LPRAT may identify additional projects that could serve as replacement projects in case any of the submitted projects are not accepted during the RPRAT validation.  The LPRAP has to be endorsed by the CSOs and the Sanggungian Bayan by resolution.[ref] Projects are most often included in the following areas: the Millennium Development Goals, poverty reduction, climate change adaptation and mitigation, and disaster preparedness.[ref]

The list of priority poverty reduction projects duly endorsed by the LPRAT are submitted to the RPRAT through the DILG Regional Office. The projects are reviewed at the regional level, followed by the submission of proposals to the Department of Budget and Management (DBM), and their integration into the national agency budgets.

Regional and national level review seems to be limited to checking compliance with the guidelines.[ref] Once the projects and implementing agencies are approved and identified, the LGUs must provide a cash counterpart for the BuB project equal to a percentage of their local development fund, without which the national government will not transfer funds for the project. In addition, LGUs must pass the Good Financial Housekeeping component of the Seal of Good Local Governance. In case they fail, the concerned government agency implements the project.[ref]

The menu of approved projects under the BuB Program is published annually. There are constraints in disseminating the information to CSOs, especially if they are not connected with national networks. During the budget oversight phase, CSOs can engage in the monitoring of the BuB projects through the LPRAT, which is expected to conduct quarterly meetings.

Stage 3

Implementation of projects is done through the coordination of participating agencies’ regional and/or provincial offices and partner LGUs. The participating agencies inform the LGU of project acceptance and the approval of the budget for the BuB projects and facilitate compliance from the LGUs and provide technical assistance to the LGUs during implementation. Agencies and LGUs can enter into partnership with NGOs for the implementation of BuB projects.

Starting in 2017, barangay-level (village) communities may also participate in the implementation of BuB projects, provided they have had prior experience implementing projects using a Community Driven Development Approach. If they have had no such experience, they may still be able to implement BuB projects if given technical assistance by the DSWD and the city/municipal LGU.[ref]

Stage 4

Monitoring of BuB projects is done by the LGU and the Local Chief Executive (LCE) through meetings of the LRPAT. The LCE convenes the LPRAT on a quarterly basis with an aim to discuss the implementation status of BuB projects. Based on these discussions, the LCE submits a quarterly accomplishment report to the RPRAT and the concerned regional office of the participating national agencies.

The RPRAT also convenes quarterly meetings to discuss the status of regional BUB projects and submit reports on their status to the DILG Central Office and the NAPC every quarter.

The NAPC is responsible for a parallel monitoring system and interactive website,[ref] where the status reports can be viewed and validated by the public. There was a total of 42,221 BuB projects reported on the Open BuB Portal as at December 1, 2015. Of this number, 13,712 projects had been completed.[ref] It is possible to search for projects by implementing agency, by budget allocated, by project type or by location, and refine the search by year and project status. Information about project status, location, implementing agency and budget, as well as actual spending to date, is available on the portal.

There is an online and telephone help desk and agency online reporting.[ref] Contact persons for each agency are assigned and their details shared on the website.[ref]

Grievance Redress Mechanism

A Grievance Redress Mechanism (GRM) is established to address complaints and concerns raised by any BuB stakeholder or concerned citizen related to any of the following:

• Concerns regarding the BuB planning and project identification phase;
• Problems with project implementation.

Grievance Redress Committees (GRCs) are created at the national and regional level.

GIFT has recognized the BuB program as one of five Best Practices in Fiscal Transparency from around the world during the OGP Summit in Mexico City in 2015.[ref] The program now covers all barangays and over 40,000 communities across the country.

Notice prior to meetings is not always given in a timely manner. According to a study of Gumac, San Antonia and Mauban in Quezon Province,[ref] an invitation to CSOs to attend the assembly was sent out 1-5 days prior to the assembly date. To allow meaningful participation from CSOs in the CSO assembly and LPRAP workshop, CSOs should be given ample time to consult with their members and prepare for the BuB activities. A notice of 1-5 days prior to the assembly has been deemed insufficient for adequate preparation.[ref] LGUs should inform CSOs and send invitations ahead of time. The current Guidelines require a two week notice for the Assembly, which should solve the issue of timely notification and should allow adequate time for CSOs to prepare for the meeting.

CSOs that could not attend the assembly cited reasons such as conflict with other meetings, lack of resources for transportation, need to earn income, conflict in political association, no communication received, lack of interest, lack of confidence to speak, and weather concerns.[ref]

The need for a thorough mapping of CSOs is recommended.[ref] Also, proper and thorough orientation, to augment the impact of the Guidelines, is recommended at the regional, provincial, and regional levels.

Based on experiences in Mauban, San Antonia and Gumaca, the LGUs seemed to be driving the decision-making in the BUB process, including the selection of the CSO representatives to the LPRAT and in the identification of most sub- projects within the LPRAP. Most sub-projects chosen by the CSOs were “fast or easy money” projects, which raises some concerns.[ref]

While there has been apprehension that the national government may use the project to advance its own interests, studies have shown that the national government has very little, almost zero, involvement with the allocation of funds for the program.[ref] The guidelines are applied uniformly across all communities, not taking into account political affiliations.[ref] Evaluation by regional and national bodies is limited to checking compliance with the guidelines. The release of funds is rule-based (funding allocation across municipalities is based on a formula, in which LGUs with more residents living below the poverty line get a higher BUB funding), not discretionary, and thus the program may be more resistant to patronage.[ref]

The BUB process successfully illustrates a number of the principles of public participation in practice. The project promotes openness, sustainability, inclusiveness, respect for self-expression, transparency, proportionality, timeliness and reciprocity. The principle of inclusiveness could be better served if further efforts were made to ensure that all local CSO and other sectoral representatives are able to participate in the CSO Assembly.

• Openness: The mechanism illustrates how the principle of openness works, as details about the BuB process are readily available to the public through the BUB website and the online portal provides constant monitoring of the project.

• Sustainability: Engagement in the BuB process is long-term and ongoing, it has taken on an institutionalized format and it is an integral part of the budget allocation process. Sustainability is further illustrated by the fact that the project currently covers all LGUs nationwide.

• Inclusiveness: The BuB process aims to be inclusive of all groups through inviting all local CSOs as well as representatives of other sectors to participate in the process. The principle could be better realized if the CSO Assembly invitations were sent out in a timely manner at all times. The project is also inclusive since all municipalities are eligible to participate.

• Respect for self-expression: This mechanism allows communities to express their interests freely within the framework of the CSO Assembly.

• Transparency: The BuB project’s interactive website has detailed information about the status of each project. If a project is refused for some reason by the RPRAT, the relevant LRPAT is informed. In addition, the CSO Assembly is provided with technical assistance with the local poverty situation analysis.

• Complementarity: The BuB process illustrates the practical application of this principle by involving all relevant levels of government. A mix of engagement mechanisms is used, such as the CSO Assembly and the LPRAT. The BUB process seems to promote more effective linkages between existing government institutions across different levels of government.
• Timeliness: The project engages the principle of timeliness since the CSO Assembly and LPRAT meetings are timed in a way that they can submit their priority projects (LRPAP) in time to be considered during the budget preparation phase.
• Reciprocity: The BuB process’ participants are open about their identity and the interests they seek to advance.

Type of Government

The Republic of the Philippines is an archipelago of more than 7,000 islands in Southeast Asia, with a population of around 100 million. The Philippines is a unitary state with a presidential system of government. The judicial, executive and legislative branches of government are formally separated. Following the Marcos dictatorship and the end of martial law (1972-1981), the return to democracy in 1986 also fostered a shift to a multi-party system.

The new Constitution of the Philippines was ratified in 1987, establishing term limits for the President as well as legislators and local government officials. The president is chief executive, head of state, and commander-in-chief. The country has a bicameral legislature—a Senate with 24 members elected nationally and a 280-member House of Representatives.

The Philippines developed a decentralized system of government with the passage of the Local Government Code of 1991. The Code included the concepts of devolution, funding of local government units, and citizen participation. Local development councils in every province, city, municipality and barangay determine the use of the local development fund, which represents 20 percent of the Internal Revenue Allotment from the national government. The IRA is itself 15-20% of the national budget, a portion of the national taxes aimed as an allotment from the federal government to local government units. Under the law, a quarter of the seats in local development councils should be occupied by CSO representatives.

The 2016 Freedom in the World Report from Freedom House ranked the Philippines as “partly free.”[ref]

Civic Space

Following the end of the Marcos dictatorship, the Philippines experienced a broadening of civic space during the 1980s. The Constitution of 1987 recognizes the importance of civil society and public participation in governance. The Constitution declares that the State shall encourage non-governmental, sector-specific, and community-based organizations that promote the welfare of the nation (Article II. Section 23). It emphasizes that the right of the people and their organizations to effective and reasonable participation at all levels of social, political and economic decision-making shall not be abridged.

As a result of favorable legislation that fostered a civil society-friendly environment, including the Constitution and the Cooperative Code of 1990, the Philippines has a vibrant civil society landscape and the largest number of CSOs per capita in Asia.[ref] There are only estimates of how many active CSOs operate, putting their number around 249,000-497,000, including unregistered organizations.[ref] CSOs’ activities cover a broad range, including sustainable development; education; law, advocacy and politics, and community development, among others.

The government has partnered with CSOs for a variety of programs, such as its Full Disclosure Policy and the Seal of Good Housekeeping for LGUs, all aimed at improving governance. CSOs have important monitoring functions for infrastructure and road projects as well. Government agencies also actively partner with CSOs in budget preparation, implementation and audit.[ref]

Open Budget Survey 2015

According to Open Budget Survey 2015, The Government of Philippines provides the public with substantial budget information. It scored 64 out of 100 in the Open Budget Index. However, the Government of Philippines is providing the public with adequate opportunities to engage in the budget process. The score for Public Participation in the budget process is 67 out of 100. Budget oversight by the supreme audit institution is adequate and it scored 92 out of 100. However, budget oversight by legislature is weak and it scored 36 out of 100.[ref]