Performance-based budgeting links funding to goals and objectives. It identifies each goal and reports on it to determine where budgets should be allocated. The basic form looks at expenses and results to inform future budgets. Governments often use it because it is results-oriented and provides accountability. It can show outcomes, strategic plans, and quantifiable data to evaluate success and identify programs that need more or less funding. However, it requires stable fiscal policies, timely data systems, and effective data analysis to determine which programs meet goals. The Department of Education in the Philippines issued guidelines on a new performance management system for teachers using remaining indicators in their results-based performance system.

1. KIMBERLY M. MARASIGAN
Performance
- Based
Budgeting

2. What is Performance-Based
Budgeting?
Performance based budgeting is the idea that each goal and
objective within a company is identified and reported to determine
where the budget should be spent. This is a particularly popular
method of budgeting today in the public and private sector. There
are several models that are used that used different markers in
order to determine the link the results to the funding. These can be
very basic or they can be complicated and require a supporting
management system.

3. In its most basic form, performance based budgeting looks at each
expense and the result of the expenditure. This type of model is
also referred to as performance informed budgeting. It uses a
simple form of evaluation and looks at key performance indicators
to determine if the system is working. The budget process uses
this information for future budget funding decisions. It may help to
break the different expenditures down into smaller pre-classified
groups with the basic system to keep the information simple
affordable and usable

4. Use of Performance Based Budgeting within the Government
Many government organizations use performance based budgeting. This
is because it is a results oriented method to achieving financial goals. This
helps them determine the best way to use the money allocated in order to
achieve the desired results. In addition, this form of budgeting provides
accountability to the public and helps to highlight which programs are
working and which ones are not. Taxpayers are often only willing to pay
for results not for only the effort and the government is more effectively
able to communicate these results when they are based on performance.

5. What Performance Based Budgeting can Show
Performance based budgeting can show many different outcomes. It
may focus on the strategic planning or determine development
measures. It also provides quantifiable data to determine success.
This type of budgeting may also help to show ways to achieve the
final desired outcome and show different activities that are being
undertaken. Even a simple plan may help to evaluate expenditures
in a review process. This can identify those that need to be cut back
or eliminated, as well as those that should be expanded.

6. When is Performance Based Budgeting Inappropriate
Performance based budgeting is not appropriate for every situation. It should be used
when there is a stable macro fiscal policy in place and the information data systems
that are used are capable of providing timely accurate data. In addition, there should
be an effective way of analyzing the data to determine which programs are meeting
the established goals. The type of budgeting plan that is used should also be based
on the needs of the organization in order for it to work properly.
Because it is important to provide results to the public, performance based budgeting
is a tangible way for the government to show results. This also gives different
departments an incentive for getting the best results possible. In addition, it provides a
way to provide a transparency by showing a direct link between performance and
resource allocations.

7. Performance-based Budgeting of Dep Ed

8. Quality teaching, DepEd said, is recognized as “vital to the attainment of desired
learning outcomes.”
Given this, DepEd issued Memorandum No. 004, s. 2022 or the Implementation of the
Results-Based Performance Management System (RPMS)-Philippine Professional
Standards for Teachers for School Year 2021-2022 dated Feb. 9, 2022.
DepEd said that the new issuance will provide guidelines on the performance
management and appraisal of teachers using the remaining 18 indicators in their
RPMS.

9. The Performance-Based Incentive System (PBIS) is a new system of incentives for
government employees that is being introduced in FY 2012, per EO No. 80.{{1}}
Under this new system, employees may receive two incentives: the
Performance-Based Bonus (PBB) and the Productivity Enhancement Incentive
(PEI).
The PBB is a top-up bonus that is given to employees based on their performance
and contributions to the accomplishment of their Department’s overall targets and
commitments.{{2}} This will be on top of the PEI current annual incentive
distributed to employees across the board. The amount available for PEI
bonuses will depend on savings incurred by the national government.

10. Thank
you