FY 2015 DBCC Year-End Report v7

2015 YEAR‐END REPORT

Republic of the Philippines
Development Budget Coordination Committee
Malacañang, Manila

Year‐End Report on the 2015 National Budget

I. Introduction
In 2015, the Philippine economy showed resilience amidst tumultuous
events on the domestic and global fronts: the El Niño phenomenon, the
geopolitical tension in the West Philippine Sea and in the Middle East, the
policy rate hikes by the US Federal Reserve, the decline in crude oil prices,
and the economic slowdown in China. The economy grew by a respectable 5.9
percent, driven by strong household consumption and capital investments.
This brought the average growth for the past six years to 6.2 percent, the
fastest recorded since the late 1970s.
The success of the country’s economy during the period was anchored
on the strong macroeconomic fundamentals and fiscal expansion policies. For
instance, the low interest rates and the manageable inflation environment
kept both the business sector and the consumer sector upbeat in their
spending and expansion efforts. Government spending, on the other hand,
provided additional stimulus to the market with the increased allocation for
infrastructure development and social safety nets for the Filipino people. The
positive perception of the government’s policy direction encouraged more
investments and employment opportunities, resulting in higher incomes.
The country’s achievements were rather mixed in terms of year‐on‐
year comparison and targets: poverty and subsistence incidence have
declined but remained off‐target; unemployment declined but
underemployment rate increased; and vulnerable employment declined but
remained high.
Relative to the fiscal, financial, social, and economic objectives of the
national government, this report gives an overview of the country’s
performance for the previous fiscal year. The report tackles the following:
 Overview of the principles and policy reforms embedded in the 2015
Budget;
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 Examination of the yearʹs overall performance relative to the

macroeconomic, revenue, expenditure, financing, and debt targets;
 Discussion of national government’s expenditure performance by
program, sector, expense class, and department/agency;
 Reporting of physical performance of key departments and major
programs and projects based on the set performance indicators; and
 Summary of proposed legislative measures on fiscal reforms being
supported.

II. 2015 National Government Budget
The 2015 Budget was crafted on the idea that no one should be left
behind in the country’s course to greater prosperity. This Budget was
intended not only to establish an enabling environment for investments and
businesses, but also to empower the poor and marginalized through social
programs and services giving everyone equal opportunities in a growing
economy. Hence, the 2015 was a Budget for Inclusive and Sustainable
Development.
While the government continued to address the backlogs in public
infrastructure by allocating increasingly greater amounts of resources to
building roads, bridges and airports relative to the past few years, poverty
incidence and income inequality remained high and evident. Despite the
gains from a strong economic performance in the past years, its effect has not
significantly dented the wall of poverty and inequality.
More than a decade ago, debt servicing took the lion’s share of total
government spending. In 2015, the allocation for debt servicing had been
reduced to 15.3 percent, less than half of its share in 2005. Social services was
budgeted the largest share of the PHP2.606‐trillion Budget at 36.6 percent
primarily for the implementation of basic education, healthcare and other
social protection programs. Economic services, on the other hand, was given a
27.1 percent allocation to hike investments in public infrastructure to boost
productivity in agriculture, manufacturing, and tourism. General services and
defense, meanwhile, were provided with 16.5 percent and 4.4 percent of the
total government budget, respectively.
By expense class, personnel services (PS) was allotted the largest share,
taking 28.6 percent of the Budget for the salaries and benefits of government
employees. Infrastructure and other capital outlays received 24.5 percent
share for the construction of roads, bridges, airports, and railways. For the
purchase of goods and services needed for the operation of various
government programs, maintenance and other operating expenses (MOOE)
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was allocated with 17.8 percent of the total budget. The rest of the budget was
for interest payments, allotment and capital transfers to local government
units (LGUs), net lending, and subsidy to government‐owned and ‐controlled
corporations (GOCCs).

III. Macroeconomic and Fiscal Performance

III.1 Macroeconomic Environment
Real Sector
Economic growth of the Philippines continued to be in the high‐growth
trajectory and was considered to be among the best economic performance in
the region. In 2015, the country’s gross domestic product (GDP) grew by 5.9
percent, 1.1 percentage points short of the government’s target. Nonetheless,
the Philippines placed ahead of Malaysia (5.0 percent), Indonesia (4.8
percent), and Thailand (2.8 percent), but trailed behind Vietnam (6.7 percent).

Table 1. 2015 Macroeconomic Performance, Actual versus Target
2015 Target
Particulars FY 2015 BESF FY 2016 BESF 2015 Actual
(Initial Target) (Updated Target)
Nominal GNI (in PhP million)

low-end 17,005,365 16,683,570 16,096,913
high-end 17,326,074 16,934,480
Real GNI Growth Rate (%) 6.7-7.7 6.7-7.7 5.8
Nominal GDP (in PhP million)
low-end 14,184,337 13,919,080 13,307,265
high-end 14,453,838 14,144,729
Real GDP Growth Rate (%) 7.0-8.0 7.0-8.0 5.9
Sources: National Economic and Development Authority (NEDA), Philippine Statistics Authority (PSA), 2015 and 2016 Budget of Expenditures
and Sources of Financing (BESF)

GDP growth was driven largely by consumption and investment
spending. The low inflation environment, increased employment
opportunities, and the stable inflow of remittances fueled consumer spending,
which grew by 6.3 percent in 2015, as against the 5.5 percent growth in 2014.
Driven by the strong growth in construction and the resurgence of the
manufacturing sector, capital formation also registered a remarkable growth
in 2015. Capital formation increased by 15.1 percent in 2015, versus 5.2
percent in 2014. The continued positive outlook on the economy, marked by
stable macroeconomic fundamentals, contributed to investment growth in
construction and in durable equipment, particularly in land transportation.
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Sale of commercial vehicles remained robust with a 19.2 percent growth in
2015.
The recovery of government spending also contributed positively to
output growth as notable gains were seen in the last two quarters of 2015
particularly for capital investments. While total disbursements increased year‐
on‐year by 12.6 percent, this was 12.8 percent below the programmed
spending for the year as underspending was still high relative to the target
during the second (15.2 percent) and third (14.8 percent) quarters, after which
spending accelerated in the fourth quarter, slashing underspending to 8.0
percent.
Notwithstanding the generally weak global economy, total exports
contributed positively and was able to grow within the target for the year.
Export of merchandise goods increased by 7.5 percent in 2015, a deceleration
from the 12.8 percent growth in 2014. Worth noting is the acceleration of the
export of services (15.3 percent in 2015 against 7.4 percent in 2014) on the back
of robust BPO receipts and increased number of tourist arrivals (5.36 million
in 2015, 10.9 percent higher than the 4.83 million registered tourist arrivals in
2014), which bode well for the economy due to their strong linkage to
employment and consumption.

Table 2. Philippine Real Sector Performance by Component, 2015
DBCC 2015 Target
Particulars 2014 2015
As of June 30, 2015
Supply Side
Agriculture 1.7 0.1 1.0-2.0
Industry 7.8 6.0 7.5-8.5
Services 6.2 5.8 7.8-8.8
Demand Side
Private Consumption 5.5 6.3 5.9-6.9
Government Consumption 3.3 7.8 21.4-22.4
Capital Formation 5.2 15.1 17.1-18.5
o.w. Fixed Capital
Exports 11.7 9.0 8.5-9.5
Imports 9.3 14.0 3.3-4.2
Real Gross Domestic Product 6.2 5.9 7.0-8.0
Source: PSA

On the production side, the acceleration of economic growth was
restrained by the agriculture sector, which grew by a meager 0.1 percent as
the El Niño phenomenon considerably reduced agriculture output,
particularly during the second semester of 2015. Nonetheless, both the
industry and service sectors supported the growth in output during the
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period. In particular, the trade sector and transport, storage and
communications (TSC) sector, posted significantly higher growth rates. Trade
gained 7.1 percent in 2015 (versus 5.8 percent growth in 2014), while TSC rose
by 8.0 percent (as against 6.5 percent in 2014). The growth figures posted by
both the industry and services sectors also fell short of the government’s
target (Table 2). The lower public spending, particularly on infrastructure,
translated to below‐target growth in output. This then limited the
performance of both the real estate and construction sectors in 2015. On the
other hand, the output of the manufacturing sector decelerated to 5.7 percent
in 2015 from the 8.3 percent in 2014, partly on account of the lower
merchandise exports.

Monetary and External Sectors
The Philippines’ macroeconomic fundamentals remained sound,
characterized by resilient domestic growth, low and stable inflation, low
interest rates, favorable fiscal position, and broadly stable Peso against the
backdrop of a fragile global economic environment. Headline inflation
averaged 1.4 percent in 2015, below the government target range of 3.0 ± 1.0
percentage point for the year. Adequate domestic supply of key food items
and the significant decline in petroleum prices contributed to the low average
inflation recorded in 2015.

Table 3: Macroeconomic Indicators, Actual versus Assumptions, 2015
2015
Particulars FY 2015 BESF FY 2016 BESF
Actual
Initial Projections Adjusted/Updated
Inflation (%) 2.0-4.0 2.0-4.0 1.4

a/
364-day T-bill rate (%) 2.0-4.0 2.0-4.0 2.1
Exchange rate (PhP/USD, period average) 42.00-45.00 43.00-46.00 45.50
LIBOR, 6 months (%) 1.0-2.0 0.4-1.5 0.5
Dubai crude oil price (USD/barrel) 90.00-110.00 50.00-70.00 50.92
Merchandise exports growth (%) b/ 8.0 5.0 -13.1
b/
Merchandise imports growth (%) 10.0 1.0 -3.2
Notes:
a/ Based on primary market rates
b/ Based on the Balance of Payments and International Investment Position Manual, 6th edition (BPM6) concept
Actual data for 2015 are annual averages.
Sources: Bangko Sentral ng Pilipinas (BSP), Bureau of the Treasury (BTr), Department of Budget and Management (DBM)

Nonetheless, the Bangko Sentral ng Pilipinas (BSP) was of the view
that the monetary policy settings were appropriately calibrated amidst the
below‐target inflation for the year. In all eight monetary policy meetings in
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2015, the BSP maintained its key policy interest rates at 4.0 percent for the
overnight borrowing or reverse repurchase (RRP) facility, and 6.0 percent for
the overnight lending or repurchase (RP) facility. The interest rates on term
RRPs, RPs, and Special Deposit Accounts (SDAs) were likewise kept steady.
At the same time, the reserve requirement ratios (RRR) were left unchanged.
The BSP’s assessment of within‐target inflation outlook over the policy
horizon and firm domestic demand conditions underpinned its monetary
policy decisions. The BSP’s steady monetary policy stance along with benign
inflation environment, ample liquidity in the system, and favorable National
Government (NG) fiscal position resulted in low and stable interest rates. The
364‐day Treasury bill rate registered an average of 2.1 percent in the twelve
auctions offered by the Bureau of the Treasury (BTr) in 2015. This fell within
the 2.0‐4.0 percent DBCC assumption range for the year.
The Philippine Peso depreciated against the US Dollar, recording an
average exchange rate of PHP45.50/US$1 in 2015. This was within the
adjusted exchange rate assumption of PHP43–46/US$1 in the 2016 Budget of
Expenditures and Sources of Financing (BESF), but slightly weaker than the
initial projection of PHP42–45/US$1 in the 2015 BESF. External economic
developments, particularly in the US and China, influenced the trend in the
Peso‐Dollar exchange rate. As the recovery of the US economy gained traction
and the market anticipated US policy rate hikes in 2015, the US Dollar
strengthened. In addition, the fall in Chinese equity and the devaluation of
Chinese Renminbi posed depreciation pressures on emerging market
currencies, including the Peso. Nevertheless, the weakening of the Peso was
in line with the regional trend. Moreover, the country’s firm macroeconomic
fundamentals, along with sustained foreign exchange flows from overseas
Filipino (OF) remittances, business process outsourcing (BPO) earnings, and
tourist receipts helped provide sufficient cushion against the volatilities
caused by external developments.
Moreover, expectations of US Fed funds rate lift‐off in 2015, following
the US Fed’s exit from its quantitative easing (QE) program in October 2014,
contributed to slightly higher foreign rates. The average 180‐day London
Interbank Offered Rate (LIBOR) inched up to 0.5 percent in 2015, within the
revised assumption range of 0.4 – 1.5 percent in the 2016 BESF. However, this
was lower than the initial projection of 1.0 – 2.0 percent in the 2015 BESF as
major central banks in other advanced economies, particularly, the Euro area
and Japan implemented further monetary easing to help spur economic
growth and raise inflation in their economies.
Meanwhile, the average per barrel price of Dubai crude oil slid to
US$50.92 in 2015, near the low end of the updated assumption of US$50.00 –
70.00 per barrel in the 2016 BESF and considerably lower than the US$90.00 –
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110.00 per barrel initial assumption in the 2015 BESF. Dubai crude oil prices

rose in H1 2015 given signs of improving global oil demand, projected
reduction in US tight oil production, and risks of possible oil supply
disruptions in the Middle East and North Africa (MENA). However, this
increasing trend was reversed in H2 2015 due to concerns over the continued
slowdown in emerging markets, expected increase in Iran crude oil exports,
and abundance of global oil inventories.
The prolonged soft and uneven global economic growth, compounded
by the decline in commodity prices, resulted in the country’s weak external
trade with both advanced and emerging economies, led by Japan and China,
respectively. Merchandise exports dropped by 13.1 percent in 2015. This was
lower than the revised government assumption for exports growth of 5.0
percent in the 2016 BESF, with declines registered across all major commodity
groups. Exports of manufactured goods fell by 10.2 percent, mainly on
account of decreased shipments of non‐consigned electronics, chemicals,
processed food and beverages, garments, as well as machinery and transport
equipment. In addition, lower shipments of agro‐based and mineral products
contributed significantly to the downturn in total merchandise exports in
2015.
Merchandise imports likewise fell by 3.2 percent in 2015 compared to
2014, lower than the 1.0 percent revised imports growth assumption in the
2016 BESF. This was due largely to the 40.1 percent contraction in the imports
of mineral fuels and lubricants given the almost 50 percent decline in
international oil prices in 2015.1 The decline in mineral fuels and lubricants
imports, however, was partly tempered by increased shipments in major
commodity groups such as raw materials and intermediate goods (by 4.7
percent), mainly materials and accessories for the manufacture of electronic
products; capital goods (by 19.1 percent), particularly power generating and
specialized machines; and consumer goods (by 12.3 percent), supported by
robust domestic demand.

Socioeconomic Indicators
The continued high‐growth trajectory of growth over the last six (6)
years has created more and better jobs. The unemployment rate, which was at
or above 7 percent prior to 2010, declined to 6.3 percent in 2015 (the lowest
full‐year unemployment rate recorded over the past decade). Likewise, youth
unemployment rate improved to 15.0 percent in 2015 (from 17.6 percent in
2009), although admittedly, still remaining a challenge given that it is more
1 Average Dubai crude oil prices dropped from US$96.61 per barrel in 2014 to US$50.92 per barrel in
2015 (or by 47.4 percent).
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than twice the national unemployment rate. Underemployment, a twin to the
unemployment problem, is of more serious concern. While the demand for
extra work/income has declined across the years2, the underemployment rate
remained high at 18.5 percent in 2015 ‐‐ a little above the PDP target of 18.0
percent.
Over 4.5 million employment have been generated over the last 6 years
(versus 3.4 million in 2005‐2009), most of which were good‐quality (i.e.,
salaried) jobs. In 2015, additional net employment generated reached 184,000.
The share of wage and salary workers in total employment increased
significantly to 58.0 percent in 2015 (from 53.3 percent in 2009). Furthermore,
vulnerable employment (or the unpaid family workers and the self‐
employed) declined to 38.9 percent in 2015 (from 42.6 percent in 2009).

Table 4: Employment Indicators, Actual versus Target, 2015
2014 2015 2016
Indicators 1/ 2/
Actual Target Actual Target
Unemployment rate (%) 6.6 6.6-6.8 6.3 6.5-6.7

Underemployment (%) 18.4 18.0 18.5 17.0
Notes:
1/ Annualized data for 2014 refer to the average of estimates for April, July, and October survey rounds. The estimates for these
rounds exclude Leyte province only while that of January exclude Region VIII.
2/ Annualized data for 2015 refer to the average of the four survey rounds. These should not be compared with the 2014
annualized data as the latter exclude the January round.
Source: Labor Force Survey - PSA, Philippine Development Plan 2011-2016

Meanwhile, the poverty incidence among individuals during the first
semester of 2015 eased to 26.3 percent (from 28.6 percent in S1 2009), reaching
a record‐low since 2006. Among families, poverty incidence fell by 1.8
percentage points (ppts) from S1 2009 to reach 21.1 percent in S1 2015.
Consistent with this, extreme poverty, as measured by subsistence incidence
or the proportion of the population/families who could not afford to meet
their basic food requirements, dropped for the first time below double‐digit
rates to 9.2 percent of families and to 12.1 percent for individuals in S1 2015.

2 Underemployment fell to 18.5 percent in 2015 versus 19.1 percent in 2009.
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Table 5. 1st Semester Poverty Indicators: 2006, 2009, 2012 and 2015
st
1 Semester Estimate
Indicators
2006 2009 2012 2015
Poverty incidence (%)

Families 23.4 22.9 22.3 21.1
Population 28.8 28.6 27.9 26.3
Subsistence Incidence (%)
Families 10.8 10 10 9.2
Population 14.2 13.3 13.4 12.1
Monthly Poverty Threshold for a Family of Five (PhP) 5,586 7,040 7,821 9,140
Monthly Food Threshold for a Family of Five (PhP) 3,894 4,903 5,458 6,365
Note:
The FY 2015 PDP Target for poverty incidence is 20.0 to 23.0 percent.
Source: Family Income and Expenditure Survey, PSA

Poverty reduction has been accelerating, especially between 2012 and
2015, as improvements in incomes have become more progressive. The
acceleration in poverty reduction is likely a result of the faster growth in real
incomes over the last three years. Whereas the growth of the average nominal
per capita income accelerated from 12.8 percent in 2009‐2012 to 15.3 percent in
2012‐2015, inflation decelerated from 12.1 percent in 2009‐2012 to 9.5 percent
in 2012‐2015. Moreover, per capita income growth of the bottom 30 percent of
households, at over 20 percent in 2012‐2015, was much faster than the average
growth of all households (15.3 percent) and even faster compared to the top
20 percent of households (about 13 percent growth).
Full year poverty incidence could come close to the PDP target for
2015. As family income in the second semester of the year is usually higher
than the first semester, it is expected that full‐year 2015 poverty incidence will
be lower than the 26.3 percent poverty incidence recorded in S1 2015.
Assuming the average point difference in 2009 and 2012, FY poverty
incidence in 2015 is estimated to decline between 23.6 to 24.0 percent. This is
close to the high end of the Philippine Development Plan Midterm Update
target of 20 to 23 percent for the year.

III.2 Fiscal Performance
In 2015, the NG fiscal deficit stood at PHP121.7 billion, 66.5 percent
higher than the deficit posted in 2014, as expenditure growth outpaced
revenue collections. The deficit amounted to 0.9 percent of GDP, 0.3 percent
higher than the 0.6 percent registered in 2014. However, this was still lower
than the 2.0 percent of GDP program level for the year due to slower
spending relative to the program outstripping the lower revenue collections.

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Table 6. National Government Fiscal Performance
(In billion pesos, unless otherwise indicated)
2014 2015
Growth
Particulars Difference Difference
(%)
Actual Program Actual (in PhP B) (%)
Total Revenues 1,908.5 2,275.2 2,109.0 (166.2) (7.3) 10.5

Revenue effort 15.1% 16.3% 15.8%
Tax Revenues 1,719.0 2,127.6 1,815.5 (312.1) (14.7) 5.6
Tax effort 13.6% 15.3% 13.6%
Non-Tax Revenues 187.6 145.6 230.7 85.1 58.5 23.0
Privatization 1.9 2.0 62.8 60.8 3,039.2 3,126.3
Disbursements 1,981.6 2,558.9 2,230.6 (328.3) (12.8) 12.6

Current Operating Expenditures 1,616.7 1,985.7 1,784.9 (200.8) (10.1) 10.4
Capital Outlays 351.5 546.7 436.0 (110.7) (20.2) 24.1
Net Lending 13.4 26.5 9.7 (16.8) (63.4) (27.6)
Surplus/(Deficit) -73.1 -283.7 -121.6 (162.1) (57.1) 66.5

% of GDP -0.6% -2.0% -0.9%
Memo Item:
Nominal GDP 12,645 13,919 13,307
Sources: Department of Budget and Management (DBM), Department of Finance (DOF)

III.2.1 Revenue Performance
For 2015, total revenues amounted to PHP2,109.0 billion, 10.5 percent
higher than the 2014 collection level of PHP1,908.5 billion. It includes the one‐
time transfer of the PHP60.1 billion Coco Levy proceeds, which represents
about 0.5 percent of GDP. As a percent of GDP, total revenues reached 15.8
percent, 0.7 percent higher than 2014. Tax revenues made up 86.1 percent of
total revenues while the remaining 13.9 percent came from non‐tax revenues
and privatization proceeds. Net of the Coco Levy proceeds, revenues
collected amount to 15.3 percent of GDP, 7.3 percent higher than 2014.
Tax revenues reached PHP1,815.5 billion, 5.6 percent or PHP96.5

billion higher than the PHP1,719.0 billion revenues in 2014. The tax effort
remained constant at 13.6 percent both in 2014 and 2015. The Bureau of
Internal Revenue (BIR) improved its collection by 106.8 billion or 7.4 percent
more relative to 2014 while the Bureau of Customs (BOC) collected less
revenues by PHP1.8 billion or 0.5 percent compared to 2014.
Non‐tax revenues totaled PHP230.7 billion, higher than the 2014 level

of P187.6 billion. These include collections from fees and charges, income of
the Bureau of the Treasury, collections from GOCCs, and other non‐tax
revenues such as Malampaya royalties.
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Total remittances from the government’s Privatization Program

reached PHP62.8 billion, compared to PHP1.9 billion of 2014. The significant
increase was primarily due to the transfer of the Coco Levy Funds, amounting
to PHP60.1 billion, to the Special Account under the General Fund pursuant
to Executive Order 180, s. 2015, on the reconveyance and utilization of coco
levy assets for the benefit of the coconut farmers and the development of the
coconut industry, and for other purposes.
BIR Collection
Total tax collection from BIR reached PHP1,433.3 billion, registering
growth of 7.9 percent compared to 2014. The growth in collection can be
attributed largely to the BIR’s continuing commitment to strictly enforce the
country’s tax laws through the implementation of its priority projects, such as
the Run After Tax Evaders, Oplan Kandado, and other enforcement
activities, including the Tax Compliance Verification Drive, stocktaking
operations, post‐evaluation of Cash Register Machines/Point‐of‐Sales
Machines, increased collection from delinquent accounts, and the Bureau’s
intensified audit program.
Also, the higher‐than‐expected revenues from excise taxes resulted in
huge contributions to the Bureau’s collections, particularly on sin products,
which were driven by the positive impact of the implementation of the Sin
Tax Reform Act, as well as the affixture of internal revenue stamps on
cigarettes and its monitoring using the Internal Revenue Stamps Integrated
System.
Taxes on income and profits had the highest contribution to the
Bureau’s total tax collection, maintaining its 58.7 percent share of total
collections. Value‐added tax and excise taxes also contributed significant
revenues, at 20.5 percent and 11.0 percent, respectively. Documentary stamp
taxes and other taxes followed with 5.3 percent, and percentage taxes with 4.0
percent. In general, tax revenues exceeded the previous year’s revenues in
majority of tax types with excise taxes posting the largest growth of 17.0
percent followed by the growth of income taxes of 8.0 percent.

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Table 7. BIR Collection Performance
(In billion Pesos, unless otherwise indicated)
2015 2015
Level of
Particulars 2014 Growth % of
Goal Actual Attainment
Rate (%) Distribution
(% to Goal)
Total BIR Collection 1,334.8 1,673.9 1,441.6 86.1% 8.0% 100.0%

Taxes on Net Income and Profits 784.8 993.6 846.2 85.2% 7.8% 58.7%
Taxes on Property 5.4 5.0 5.6 112.3% 3.4% 0.4%
Taxes on Domestic Goods and Services 544.6 675.4 589.7 87.3% 8.3% 40.9%
General Sales, Turnover or VAT 278.8 373.8 295.5 79.0% 6.0% 20.5%
Selective Excise on Goods 135.3 140.4 158.3 112.7% 17.0% 11.0%
Selective Excise on Services/Percentage Taxes 55.9 78.4 58.4 74.4% 4.4% 4.0%
Taxes on the Use of Goods or Property
or Permission to Perform Activities 0.6 0.7 0.6 86.7% 3.5% 0.0%
Documentary Stamp Tax (DST) 69.0 75.7 72.1 95.3% 4.4% 5.0%
Other Taxes 4.9 6.3 4.9 77.2% -1.5% 0.3%
Note:
Goal is based on RMO Nos. 5-2015 and 17-2015
Collection by type is based on the 1209 reports submitted by the RDOs as of March 9, 2016
Details may not add up to total due to rounding
Sources: Bureau of Internal Revenues (BIR)

Taxes on Income and Profits
The positive year‐on‐year performance of income taxes was driven by
several factors:
1. Increase in employment rate from 93.4 percent in 2014 to 93.7
percent in 2015;
2. Increased collection from bank deposits due to higher rates on
Time Deposit (short‐ and long‐term), Savings Deposit and
Special Deposit Accounts for 2015 compared to the levels
recorded the previous year. Moreover, total savings or total
Peso‐denominated deposits in the banking system as of the end
of December were higher compared to 2014.
Despite year‐on‐year growth in collections, revenue collection fell short
of program levels due to the followings factors:
1. Collections from Final Withholding Taxes on government
securities stood at PHP33.2 billion, which was PHP11.7 billion
or 26.0 percent short of the Bureau of the Treasury’s
programmed collections of PHP44.9 billion due to lower
borrowings by the government during the year;
2. Government underspending and the contraction of exports and
the agricultural sector, which affected economic activities in the
country;
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3. Congestion experienced at the large seaports of Metro Manila in
the last quarter of CY 2014 and the El Niño phenomenon that
had adverse impact on corporate income;
4. Partial shutdown of Malampaya, referenced with the continuing
drop of crude oil prices in the global market;
5. Slowed down growth in the mining industry caused by the
continued slump of global metal prices.

Excise Taxes
Collections from excise taxes increased due to higher consumption of
alcoholic beverages and tobacco. Furthermore, volume of removals inched up
as a result of the expansion and growth in beer business and increase in tax
rates on compounded liquors.
The increase in volume of local production of petroleum products by
major refineries due to higher demand as a result of lower global fuel prices
pulled up excise tax collection on petroleum products. Meanwhile, collections
from mining/mineral products were slightly dampened by the decrease in
metal production due to sustained low global demand. This was evident in
the decline in nominal Gross Value Added in mining and quarrying by 17.2
percent from PHP125.4 billion in 2014 to PHP103.8 billion in 2015.

Value‐Added Tax
The increase in VAT, on year‐on‐year basis, was influenced by the
increase in sales/receipts by various taxpayers engaged in automobiles,
tobacco and alcohol, manufacturing, among other industries, due to
intensified marketing campaigns. Household final consumption expenditures
also grew by 7.0 percent in 2015. Another factor in the increase in VAT
collection was the strong performance of the tourism industry, wherein total
earnings generated from visitor arrivals in the country was higher by 7.0
percent than the 2014 level. Likewise, visitor arrivals for the same period were
up by 10.9 percent compared to 2014. The non‐life insurance industry sector
posted a 15.0 percent increase in net premiums written, from PHP31.1 billion
in 2014 to PHP35.8 billion in 2015.
The Bureau fell short of its VAT revenue target, as collections were
pulled down by circumstances such as government underspending, which
affected economic activities in the country; the decrease in sales of various
industries (mining, power, telecommunications, services, etc.); claims of input
taxes, which increased as costs of purchases and importations also went up;
and a number of significant collections from audit in CY 2014, which did not
recur in CY 2015.
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Percentage Taxes
Collections compared to 2014 improved as a result of increased
collections on insurance, as premiums generated from the life sector for 2015
went up by 19.5 percent from the premiums recorded the previous year. The
2015 average bank lending rate at 5.6 percent was also higher compared to the
year ago average rate of 5.5 percent. Additionally, the increase in the gross
value added (GVA) at current prices of the Transport, Storage and
Communications and Electricity, Gas and Water Supply sectors lifted
Percentage Tax collection.
The shortfall in 2015 collection vis‐a‐vis target was prompted by
PAGCOR’s shift of payment from percentage tax to income tax, per Revenue
Memorandum Circular No. 33‐2013, and the lower volume of shares that
were traded in the Philippine Stock Market, resulting in lower tax collections
from stock market transactions.

Other Taxes
The slight improvement in the collection performance of Other Taxes
was on account of higher Documentary Stamp Tax collection, as volume of
transactions on loans and bonds increased. On the other hand, the slightly
lower collection from forfeited properties pulled down collection from
Miscellaneous taxes.

Impact of the Sin Tax Reform Law
Three years after its passage in 2012, the Sin Tax Reform Law has been
an unqualified success in its revenue objectives. Since the implementation of
the law, the NG has collected PHP360.5 billion in total excise tax collections,
accounting 25 percent of BIR collections. Of these, PHP174.6 billion
constituted the incremental revenue due to the law, breaching government’s
PHP127.4 billion target by 37.0 percent or PHP47.1 billion. These incremental
revenues from the Sin Tax Law has increased from 0.4 percent of GDP in 2013
to 0.5 percent in 2015.

Page 14 of 44

Table 8. Impact of Sin Tax Law Implementation
Incremental Revenue Total Excise Tax Collections
Particulars Excess/ % of GDP % of GDP
Projected Actual Actual
(Shortfall) (actual) (actual)
1st Year - CY 2013

Tobacco 23.4 41.8 18.4 0.4% 70.4 0.6%
Alcohol 10.6 9.3 -1.3 0.1% 33.0 0.3%
Total 34.0 51.1 17.1 0.4% 103.4 0.9%
2nd Year - CY 2014
Tobacco 29.6 39.4 9.8 0.3% 75.5 0.6%
Alcohol 13.3 10.8 -2.5 0.1% 38.5 0.3%
Total 42.9 50.2 7.3 0.4% 114.0 0.9%
3rd Year - CY 2015
Tobacco 33.5 55.7 22.2 0.4% 100.0 0.8%
Alcohol 17.1 17.4 0.3 0.1% 43.1 0.3%
Total 50.6 73.1 22.5 0.5% 143.1 1.1%
GRAND TOTAL 127.4 174.6 47.1 360.5
Note:
Details may not add up to total due to rounding
Source: Departmernt of Finance

Tobacco products accounted for 78.5 percent or PHP137.0 billion of
total incremental revenues, while alcohol products accounted for the
remaining 21.5 percent or P37.5 billion from 2013 to 2015.

BOC Collections
Total BOC collections fell by 0.5 percent in 2015, reaching a total of
PHP367.5 billion. Import taxes, comprising VAT and excise tax, accounted for
83.4 percent of BOC’s collections. VAT on non‐oil goods brought in PHP225.7
billion for the year, 11.2 percent higher than in 2014.

Page 15 of 44

Table 9. BOC Collection
(In billion pesos, unless otherwise indicated)
Growth %
Particulars 2014 2015
(%) Distribution
Total BOC Collection 369.3 367.5 -0.5% 100.0%

o.w. Tax Expenditure Fund 11.5 10.1 -12.2% 2.8%
Import duties 56.3 57.1 1.4% 15.5%
Non-oil 55.9 57.1 2.1% 15.5%
Oil 0.4 0.0 -97.5% 0.0%
VAT 279.1 274.7 -1.6% 74.7%
Non-oil 203.0 225.7 11.2% 61.4%
Oil 76.1 49.0 -35.6% 13.3%
Excise Tax 30.4 31.8 4.6% 8.7%
Others 3.5 3.9 11.4% 1.1%
Source: Bureau of Customs

Compared to the 2014 level, BOC collection effort was adversely
affected by the drop in the average price of oil. Average crude price per barrel
in 2015 figured at US$51.23, 47 percent lower than the US$96.66 average price
in 2014.
The BOC is continually strengthening the valuation reference
information system to ensure proper customs valuation and tariff
classification.

Fiscal Reform Initiatives
To boost tax administration capacity, achieve the desired revenue
effort and support its medium‐term fiscal objectives, the government will
continue to pursue legislative reforms.
One of the priority measures approved and signed into law on
December 9, 2015 was R.A. No. 10708, known as the Tax Incentive
Management and Transparency Act (TIMTA). The law is envisioned to foster
transparency and accountability in the grant of tax incentives and to
institutionalize a system of monitoring and reporting tax expenditures. It is
also expected to help the government analyze and rationalize the fiscal costs
and to optimize the economic and social benefits of the incentives.
Another reform measure already in the approval stage in the late 2015
is the Customs Modernization and Tariff Act (CMTA).

Page 16 of 44

III.2.2 Borrowing Performance
National Government Financing
In 2015, the National Government raised PHP609.6 billion in gross
borrowings to cover the budget deficit of PHP121.7 billion and refinancing
requirement of PHP366.8 billion3. The remainder was contributed to the Bond
Sinking Fund (BSF) which ensures the smooth repayment of future domestic
principal obligations. For the year, the government contributed some
PHP150.0 billion to the BSF, with the redemptions from the BSF at PHP121.1
billion. Overall, total borrowing was 14 percent lower than the PHP710.8
billion revised program mainly due to the lower deficit turnout, which scaled
back the need for domestic borrowing, resulting in an external‐to‐domestic
financing mix of 31:69.
Gross external financing amounted to PHP189.5 billion, slightly
exceeding the revised program by 6 percent as the strengthening of the US
Dollar beyond the PHP44.50/US$1 DBCC exchange rate assumption raised the
Peso equivalent of foreign borrowings. Furthermore, US$1.227 billion
(PHP54.7 billion) of the proceeds from the US$ 2.0 billion (PHP89.4 billion)
global bond issuance in January was used to prepay high coupon outstanding
debts and extend portfolio maturities.
On the other hand, gross domestic financing, which amounted to
PHP420.07 billion, was 21 percent below the revised program. The
combination of below‐program deficit provided the incentive to cut back the
issuance of domestic securities in order to avoid unnecessary build up in cash,
which comes at a cost to government. Furthermore, a domestic bond
exchange transaction was conducted in September which replaced PHP237.3
billion of outstanding debts with new securities bearing lower coupon,
thereby also elongating portfolio maturities.

3 Excludes redemption of domestic securities paid for by the BSF (₱121.1 billion).
Page 17 of 44

Table 10: National Government Financing
(In million Pesos, unless otherwise indicated)
2015 Actual vs. Revised
Particulars
Program 1/ Revised
2/
Actual Difference %
Net Financing 310,435 296,822 242,852 (53,970) -18%

External (Net) 20,898 55,049 64,782 9,733 18%
3/ 3/
Gross 95,700 178,140 189,538 11,398 6%
4/ 4/
Less: Amortization 74,802 123,091 124,756 1,665 1%
Domestic (Net) 289,537 241,773 178,070 (63,703) -26%
5/
Gross 605,122 532,683 420,072 (112,611) -21%
6/
Less: Amortization 315,585 290,910 242,002 (48,908) -17%
Gross Financing 700,822 710,823 609,610
Financing Mix (% of total)

External 14% 25% 31%
Domestic 86% 75% 69%
Notes:
1/ Based on 2015 BESF Table D.1
2/ Based on 2016 BESF Table D.1
3/ Includes proceeds used to buy back US$ 1.224 billion worth of outstanding bonds via exchange offer transaction
4/ Includes early retirement of US$ 1.224 billion (₱54.71 billion) worth of outstanding bonds due to exchange offer
5/ Includes gross flotations from domestic bond exchange transaction (₱264.04 billion)
6/ Includes redemption of domestic bonds due to exchange transaction (₱237.27 billion)
Source: BTr

In 2016, NG intends to maintain its heavy preference for domestic
funding with an external‐to‐domestic financing mix of 20:80. The proposed
borrowing mix is envisioned to further reduce the foreign currency
component of the debt stock, weakening the impact of exchange rate volatility
on debt service flows and valuation. The domestic bias is also supportive of
the long‐term objective of developing a deeper and more liquid market for
local debt securities, making future fund raising efforts cheaper for the
government and more accessible to the corporate sector.

National Government Debt
As of year‐end 2015, NG total outstanding debt was recorded at
PHP5,954.5 billion. In line with risk management objectives, domestic debt
amounting to PHP3,884.4 billion accounted for 65 percent of total NG
obligations, while external obligations amounted to PHP2,070.2 billion.
Consistent with the borrowing program, outstanding domestic debt increased
by 1.7 percent year‐on‐year, equivalent to PHP63.8 billion. Meanwhile,
external obligation also increased by PHP155.5 billion or 8.1 percent from
end‐2014 figures.
Page 18 of 44

Attesting to the government’s effective liability management and

sustained economic growth, debt sustainability indicators such as the debt‐to‐
GDP ratio has progressively improved, narrowing considerably to 44.8
percent as of end‐December 2015, compared to 45.4 percent for the previous
year.
Alongside improvements in the relative size of its debt, the NG was
also successful in shifting the profile of its outstanding debt in line with cost
and risk considerations, as can be noted by the following:
1. The currency mix of the NG debt portfolio has been kept fairly stable
as the preference for domestic financing tempered the increase in the
Peso value of foreign debt due to foreign exchange fluctuations. Based
on value, as of end‐2015, Peso‐denominated obligations accounted for
67 percent of the total. Other currencies, such as the USD, JPY and
EUR, are at 26 percent, 5 percent, and 1 percent, respectively,
indicating moderate exposure to unfavorable foreign exchange swings.
2. NG obligations continue to exhibit resilience against interest rate risks
resulting from GOP’s preference to issue fixed‐rate securities. As of
end‐December 2015, 8.0 percent of the total debt portfolio was subject
to resetting, mitigating adverse swings and allowing for more certain
projections such as those related to interest payments.
3. Despite the rising interest rate environment, weighted average interest
rate (WAIR) of the NG debt portfolio continued on a downward trend.
The WAIR for NG domestic and external obligations was at 5.5 percent
and 4.7 percent as of end‐2015, from 5.7 percent and 4.9 percent as of
end‐2014, respectively. The contraction of borrowing costs results from
a strategic issuance policy that takes advantage of favorable domestic
interest rates to refinance maturing obligations, as well as through
active liability management exercises which replaced high coupon debt
with lower coupon obligations.
4. The average maturity of the debt portfolio maintained a comfortable
average of 10.04 years, residing on the upper bound of the country’s
medium‐term debt target of 7 to 10 years. Approximately 89 percent of
the country’s total outstanding debt is at the longer‐end, which
diminishes the country’s exposure to refinancing risks. Domestic and
external debts have average maturities of 9.16 and 11.86 years,
respectively. Moreover, short‐term debt based on residual maturity is
only 11 percent of the debt stock and consists largely of tradable debt
securities.
Debt service metrics have simultaneously improved, with interest
payments (IP) taking up a lower percentage of revenues and expenditures. IP
reached PHP309.36 billion in 2015, as compared to PHP321.19 billion for 2014,
Page 19 of 44

while generating savings of PHP52.5 billion or 14.5 percent against the full‐
year program. IP relative to revenues dropped to 14.7 percent from 16.8
percent the previous year, implying improved NG capacity to service its
debts. Similarly, IP fell to 13.9 percent of expenditures from 16.2 percent in
2014, freeing fiscal space for more productive Government spending.

Table 11: National Government Debt, 2014‐2015
(In million Pesos, unless otherwise indicated)
Actual Growth
Particulars
2014 2015 Amount %
Total NG Debt 5,735,242 5,954,537 219,295 3.7%

External1/ 1,914,639 2,070,157 155,518 8.1%
Domestic 3,820,603 3,884,380 63,777 1.7%
% of Total
External 33.4% 34.8%
Domestic 66.6% 65.2%
% of GDP 45.4% 44.8%
External 15.2% 15.6%
Domestic 30.2% 29.2%
Currency Breakdown
2/
Foreign 31.6% 33.7%
Peso 68.4% 67.0%
3/
Average Maturity (years) 9.9 10.0
External 11.1 11.9
Domestic 9.2 9.2
Weighted Average Interest Rate 5.4% 5.2%
External 4.9% 4.7%
Domestic 5.7% 5.5%
Interest Rate Mix 100% 100%
Fixed 93.0% 91.9%
Floating 6.8% 8.0%
Interest Free 0.1% 0.1%
Total Interest Payments 321,185 309,364 -11,821 -3.7%
External 100,690 93,775 -6,915 -6.9%
Domestic 220,495 215,589 -4,906 -2.2%
Total IP as % of GDP 2.5% 2.3%
Total IP as % of Disbursements 16.2% 13.9%
Total IP as % of Revenues 16.8% 14.7%
Note:
1/ Based on jurisdiction of issuance
2/ Based on currency of issuance
3/ Average maturity measured in yearson residual basis
Memo Items:
GDP 12,634,062 13,285,240
PhP/USD 44.7 47.2
Disbursements 1,981,619 2,230,645
Revenues 1,908,527 2,108,956
Source: BTr

Page 20 of 44

III.2.3 Disbursement Performance

Year‐on‐Year Performance
National Government spending grew by 12.6 percent to reach
PHP2,230.6 billion as of end December 2015. This was the fastest year‐on‐year
growth in the last three years, rebounding from a mere 5.8 percent and 5.4
percent increase in 2013 and 2014, respectively. Disbursements picked up as a
result of higher maintenance and PS expenditures and huge capital spending,
to account for almost PHP225.0 billion or 90.3 percent of the PHP249.0 billion
increased outlays for the year.

Table 12. NG Disbursements, 2014‐2015
January to December Annual Growth
Particulars
2014 2015 Amt %
Current Operating Expenditures 1,616.7 1,784.9 168.2 10.4
Personnel Services 603.6 664.4 60.8 10.1
Maintenance and Other Operating Exp. 308.7 403.4 94.7 30.7
Subsidy 80.4 78.0 (2.4) (3.0)
Allotment to LGUs 273.2 311.9 38.7 14.1
Interest Payments 321.2 309.4 (11.8) (3.7)
Tax Expenditure Fund 29.5 17.8 (11.7) (39.7)
Capital Outlays 351.5 436.0 84.5 24.1
Infrastructure/Other Capital Outlays 276.0 345.3 69.3 25.1
Equity 1.7 0.8 (1.0) (56.1)
Capital Transfers to LGUs 73.8
90.0
16.2 22.0
Net Lending 13.4 9.7 (3.7) (27.6)
Total Disbursements 1,981.6 2,230.6 249.0 12.6

Disbursements for MOOE expanded by nearly PHP95.0 billion or 30.7
percent, to reach PHP403.4 billion due to the government’s implementation of
social services such as the Department of Social Welfare and Development’s
(DSWD’s) conditional cash transfer (CCT) and shelter and cash assistance to
victims of disasters or calamities; the Department of Health’s (DOH’s)
immunization programs and provision of drugs and medicines; the
Department of Education’s (DepEd’s) basic education and scholarship
programs; and the Bottom‐Up Budgeting (BUB) programs and other
community development projects of the Department of the Interior and Local
Government (DILG). Maintenance spending also included the expenses of the
COMELEC for the preparatory works for the conduct of the 2016 National
and Local Elections, as well as the requirements for the hosting of the APEC
2015 Summit held in November.
Page 21 of 44

Infrastructure and other capital outlays, on the other hand, accelerated
by some PHP69.3 billion or 25.1 percent, closing at PHP345.3 billion for the
year. This was a significant improvement from the minimal 5.4 percent
growth in 2014 as a number of infrastructure projects had been rolled out and
completed including repair, rehabilitation and upgrading of road networks of
the DPWH; repair and rehabilitation of Light Railway Transit (LRT) Lines 1
and 2 of the Department of Transportation and Communication (DOTC); and
aircraft acquisition under the Armed Forces of the Philippines (AFP)
Modernization Program of the Department of National Defense (DND).
Meanwhile, PS expenditures grew by PHP60.8 billion or 10.1 percent
from 2014, largely due to the one‐time grant of the Performance Enhancement
Incentive (PEI) equivalent to a month’s salary in June 2015. The PEI is a
performance‐based bonus given to government employees whose offices have
successfully met at least 90.0 percent of at least two (2) of their committed
outputs or outcomes and complied wi0074h good governance conditions.
Personnel Services (PS) expenditures likewise increased from the creation and
filling of positions in key agencies such as the DepEd, DILG, DND, DPWH
and DOH, and also due to the increase in their staffing complement to
capacitate them in the areas of procurement and program implementation.
The other expenditure items which contributed to higher
disbursements were allocations and capital transfers to LGUs as a result of
higher revenue collections of the BIR. The growth, however, was tempered by
the decline in interest payments due to savings generated from bond
exchange transactions; lower support to GOCCs due to the underspending in
some government corporations; and the minimal availments of government
agencies and corporations for net lending assistance and tax subsidies.

Program vs. Actual Performance
The disbursement rate of line agencies started to improve towards the
second quarter and underspending relative to the target was trimmed down
to 12.8 percent at the end of 2015, slightly narrower than the 13.3 percent gap
recorded in 2014. In nominal terms, however, the underperformance was
higher at PHP328.3 billion against the PHP302.7 billion recorded in the
previous year. It should be noted however that the disbursement program for
2015 was also higher by 12.0 percent at PHP2,558.9 billion vis‐à‐vis
PHP2,284.3 billion in 2014.

Page 22 of 44

Table 13. NG Disbursements, Program vs. Actual
January to December 2015 Variance
Particulars
Program Actual Amt %
Current Operating Expenditures 1,985.7 1,784.9 (200.8) (10.1)
Personnel Services 743.2 664.4 (78.7) (10.6)
Maintenance and Other Operating Exp. 424.8 403.4 (21.4) (5.0)
Subsidy 118.6 78.0 (40.6) (34.2)
Allotment to LGUs 311.9 311.9 ‐ ‐
Interest Payments 361.8 309.4 (52.5) (14.5)
Tax Expenditure Fund 25.5 17.8 (7.7) (30.0)
Capital Outlays 546.7 436.0 (110.6) (20.2)
Infrastructure/Other Capital Outlays 431.6 345.3 (86.3) (20.0)
Equity 2.9 0.8 (2.2) (73.8)
Capital Transfers to LGUs 112.2
90.0 (22.2) (19.8)

Net Lending 26.5 9.7 (16.8) (63.4)
Total Disbursements 2,558.9 2,230.6 (328.3) (12.8)

Infrastructure and other capital outlays fell short of the program by
P86.3 billion or 20.0 percent, explaining the bulk, or 26.3 percent of the total
underperformance for 2015. Most of the implementing agencies encountered
delays in obligating their allotments at the earlier part of the year, resulting in
backlogs in the implementation of some capital projects that led to low
disbursements since payments could only be made upon completion or
delivery of contracted goods or services.
PS expenditures were below program levels by nearly a quarter of the
total underspending or PHP78.7 billion, as line agencies were unable to
maximize their allocations for the creation and filling of positions in the
Miscellaneous Personnel Benefits Fund (MPBF), given hiring difficulties, and
in the Pension and Gratuity Fund (PGF) due to lower‐than‐expected
retirement and gratuity claims. Maintenance expenditures were down by
PHP21.4 billion, or 5.0 percent of the PHP424.8 billion program for the year,
mainly due to payment, billing and downloading of fund issues and
procurement difficulties, while subsidy fell by PHP40.6 billion or 34.2 percent,
also because of payment or billing issues and other implementation
bottlenecks.
Summarized below are the major reasons cited for underspending and
sample of the affected programs or projects as reported by line agencies:

Page 23 of 44

Reasons Agencies/Programs/Projects
1. Billing or payment issues:
 Non‐submission or incomplete submission of DSWD (Cash for work, emergency
documentary requirements shelter assistance)
 Poor liquidation of cash advances DILG (BUB programs)
 Delays in submission of progress billings DepEd (school MOOE)
 Delays in the processing of payments by the NIA (Irrigation projects)
central office from the various operating units NHA (housing programs)
2. Low obligations:
 Procurement difficulties due to problems in DOH (Provision of medicines,
procurement scheduling, delays in bidding, and Health Facilities Enhancement
incorrect technical specifications and costings Program, doctors and nurses to the
 Difficulties in hiring barrios)
 Shift in academic calendar of some SUCs due to DepEd (Nationwide computerization
K to 12 Program project)
 Non‐ or partial compliance with requirements Department of Science and
under the GAA special provision Technology ‐ Information and
Communication Technology Office
(DOST‐ICTO) (Free Wi‐Fi project)
DND (AFP Modernization Program)
DOST‐ Philippine Atmospheric,
Geophysical and Astronomical
Services Administration (PAGASA)
(Acquisition of weather forecasting
equipment)
Commission on Higher Education
(CHED) and DOST‐Science
Education Institute (SEI) (scholarship
programs)
DILG (housing for Informal Settlers
program)
3. Other Reasons:
 Legal challenges Commission on Elections
 Land acquisition and Right‐of‐Way issues (COMELEC) (Automated Election
 Delays in the approval of agreements, issuance System)
of clearances Department of Agrarian Reform
(DAR) (Acquisition of private
agricultural lands)
National Irrigation Administration
(NIA) (Irrigation projects)
National Housing Authority (NHA)
(housing programs)
DOTC (transport infrastructure
projects)
These confirm the list of issues similarly cited by major departments
and agencies in 2014 to explain the large extent of underspending.
Page 24 of 44

On the other hand, capital transfers to LGUs fell short of the program
by PHP22.2 billion or 19.8 percent as some of the programmed amounts
under the special shares of LGUs in the proceeds of national taxes were not
released pending certification by collecting agencies.
In a positive way, savings in interest payments, mainly from bond
exchange transactions, also contributed to PHP52.5 billion or about 16.0
percent of the total underspending for the year. Likewise, lower availments
by line agencies and government corporations resulted in lower net lending
assistance and tax subsidies, to add another PHP16.8 billion and PHP7.7
billion in underspending, respectively.

IV. National Government Expenditure Performance

IV.1 Allotments and Obligations
Total allotment releases for 2015 amounted to P2,573.3 billion or 98.7
percent of the P2,606.0 billion obligation program for the year. This level of
releases is 16.0 percent higher than the P2,220.6 billion released in 2014. Of
these releases, P1,848.0 billion4 worth of allotments were issued to National
Government Agencies. Only P1,553.7 billion or 84.1 percent of those
allotments were however obligated as of December 31, 2015, slightly above
the 83.35 percent obligation rate for the comparable period in 2014. These low
obligation rates have been significantly affecting the pace of government
spending in the recent years.
It may be noted, however, that during the second year of
implementation of the GAA‐As‐A‐Release Document (GAARD) in 2015,
allotment releases for department‐specific budgets as of the first month of the
year have improved to 89.0 percent of the program appropriations compared
with the 86.2 percent in 2014.6 Under the GAARD, line agencies could already
start obligating funds ‐ except for those under the negative list ‐ at the first
working day of the year so they can fast track the implementation of their
programs/projects. Classifying some expenditure items under the negative
list, meanwhile, ensures faithful compliance with the conditions stipulated in
the appropriations law before releases could be made. Among the said
4 Based on Statement of Allotment, Obligation and Balances Report as of December 31, 2015. The report can be accessed in
the DBM website at http://www.dbm.gov.ph/wp-content/uploads/e-
Fund_Releases/SAOB2015/FINAL2015/SAOB%20FY2015-final.forWebsite_link.pdf
5 Based on Statement of Allotment, Obligation and Balances Report as of December 31, 2014. Available in the DBM
website at http://www.dbm.gov.ph/wp-content/uploads/e-Fund_Releases/SAOB2014/2014Q4-
Final/SAOB%20FY2014_ByDept_FINAL.pdf
6 Releases as of end-January 2014 and 2015. Available in the DBM website at http://www.dbm.gov.ph/?page_id=1840
Page 25 of 44

conditions are clearances from approving authorities or regulatory bodies,

submission of necessary documents or requirements and additional details
which could only be available during execution.

IV.2 Financial and Physical Performance of Selected Major Programs and
Projects, by Department, as of December 31, 2015

Department of Agrarian Reform (DAR)
Financial Performance. For 2015, DAR was able to register an obligation rate of
56.1 percent. This is lower than the 62.0 percent the Department registered in
2014. In terms of major final output, Land Tenure Services (LTS) registered an
obligation rate of 69.1 percent, while Technical Advisory Services (TAS)
registered a 70.7 percent obligation rate. These two major final outputs
(MFOs) make up approximately 67.0 percent of the total obligations of the
2015 budget of the DAR. The low obligation level in LTS is attributable to the
slow progress in land acquisition and distribution activities, resulting from
the complex and complicated nature of the remaining landholdings to be
acquired.

Physical accomplishment. One of the activities under the LTS is Claim Folder
(CF) Preparation and Documentation. For 2015, 59.2 percent of the target
number of hectares with claim folder documentation was completed, with the
remaining 84,221 hectares in various levels of preparation of the claim folders.
According to the DAR, claim folder preparation involves 18 sequential
activities, such as the conduct of joint DAR‐Land Bank of the Philippines field
investigation and documentation and transmittal of CFs to the Provincial
Agrarian Reform Office from the Municipal Agrarian Reform Office, among
others. Another important activity under the LTS is the preparation and
approval of survey plans. The total number of hectares of land targeted to
have approved survey plans is 24,726 hectares. This is only about 12.0 percent
of the total target for 2015. According to the DAR, the balance in the targeted
landholdings is still in various stages of processing prior to approval, such as
sub‐lot identification, bidding and awarding. Also under the LTS is the
subdivision of the Collective Land Ownership Awards (CLOAs). For 2015,
only 25.5 percent of the target was accomplished since the subdivision of
CLOAs experienced difficulties in terms of validation of landholdings,
whether these are timberland or alienable lands. There are also problems
encountered in updating the list of Agrarian Reform Beneficiaries (ARBs),
particularly in the exclusion of deceased ARBs and identifying new qualified
ARBs.
Page 26 of 44

Meanwhile, through the Support Infrastructure and Local Capability

Building (SILCAB), the DAR was able to establish eight new agrarian reform
communities this is three communities short of the 11 targeted for 2015. Still
under the SILCAB, a total of 475,938 ARBs were capacity building/training in
Agrarian Reform Communities (ARCs) and Non‐ARCs. The training
programs under the SILCAB aim to build the capacities of the ARBs to
improve their productivity and increase their income. These training
programs focus on honing the beneficiaries’ entrepreneurial skills and helping
them to be part of formal organizations that will help them have better access
to agriculture extension services and credit. This is 17.3 percent more than the
target number of ARBs for 2015.
Another program under TAS that provides support services to ARBs is
the Sustainable Agribusiness and Rural Enterprise Development
(SARED). Through the SARED, DAR was able to provide 1,411 organizations
with agri‐credit, this is 189 organizations more than the 1,222 targeted for
2015.

Department of Agriculture (DA)
Financial Performance. Total obligations of DA amounted to PHP47.15 billion,
or about 84.0 percent of the total allotments received by the Department ‐‐ a
significant improvement from their 2014 obligation rate of 79.0 percent. The
bulk of the obligations made by the Department was for the implementation
of the various programs and projects under the Office of the Secretary. DA‐
OSEC obligated about PHP37.46 billion or 79.4 percent of the PHP47.15 billion
Department’s total obligations for the period.

Physical Accomplishment. Under its production support services program, the
DA, was able to distribute 16,626.7 metric tons (MT) of seeds, or about 91.0
percent of the 18,249.3 MT targeted for 2015. According to the DA, the seed
distribution was hampered by the late onset of the rain and the El Niño
forecast, which caused some farmers to withdraw from the program.
Meanwhile vegetable seed distribution was delayed due to failed bidding and
unavailability of stocks by the supplier.
Aside from the provision of inputs, the DA also provides support to
farmers through setting up of agriculture infrastructures such as small‐scale
irrigation projects. For 2015, some 2,370 small scale irrigation projects were
installed/constructed, or approximately 87.6 percent of the 2,707 target. The
Department reports that the pump and engine sets for the remaining projects
have already been delivered to the DA stations and are ready for distribution,
upon submission of the necessary documentation requirements by the
Page 27 of 44

recipients. The establishment/installation of small‐scale irrigation projects

covered a service area of 8,972 hectares, or 96.6 percent of the 9,291 hectares
targeted for 2015.
Another important agriculture infrastructure provided through the DA
are Farm‐to‐Market Roads (FMRs). It must be noted that for 2015, the
construction/rehabilitation of FMRs was the responsibility of the Department
of Public Works and Highways, while the DA handled the choice of the site,
and the validation and geotagging of the identified FMR sites. For 2015, the
DA was able to validate with geotagging technology, 1,302 out of the 1,374
FMR sites, with an equivalent length of 558.65 km.
In support of the Fisheries Program, the Bureau of Fisheries and
Aquatic Resources (BFAR) provides facilities and equipment for the fisheries
industry, including the establishment/construction of fish landings. As of end
year 2015, 50 are ongoing construction, 28 are for notice of award; 73 are in
various stages of procurement/bidding; 37 have been obligated; 31 are for
completion of documentary requirements; and 18 are for site selection. The
fund for 15 projects originally lodged in the budget of the BFAR was
transferred to the Philippine Fisheries Development Authority (PFDA)
identified sites. In terms of number of beneficiaries provided/supplied with
fishery equipment and facilities, 99.0 percent of the 8,682 individuals targeted
were supported in 2015.

Department of Education (DepEd)
Financial Performance. In preparation for the implementation of the Senior
High School Program in 2016, the DepEd was allotted a total budget of
PHP360.5 billion in 2015, of which PHP26.8 billion was a continuing
appropriation from the previous year. Obligation for the PS requirements,
amounting to PHP265.1 billion, mainly contributed to the Department’s total
year spending of PHP309.9 billion or 86 percent of its total allotment. Other
big ticket items are the MOOE of schools and the Government Assistance to
Students and Teachers in Private Education (GASTPE), with PHP56.4 billion
and PHP9.6 billion, respectively.

Physical Accomplishments. For 2015, a total of 18,060 classrooms were
constructed, of which 14,000 were funded by the Basic Education Facilities
Fund, 97 by the Regular School Building Program, and 3,963 through Public‐
Private Partnerships. The construction of another 18,254 classrooms was still
on‐going. Likewise, 1,104 classrooms were repaired and rehabilitated in 2015.
3,300 water sanitation facilities were also constructed and 545 were repaired.
Page 28 of 44

Additionally, 628,672 seats were provided to elementary schools and

437,914 to secondary schools. The Department was also able to procure 23,775
sets of tables and chairs for teachers.
Meanwhile, a total of 39,022 teaching positions were created, of which
85 percent or 33,270 had been filled as of December 2015. This resulted in a
lower average teacher to student ratio of 1:36 in the elementary level and 1:27
in the secondary level. Likewise, 424 teaching‐related and 638 non‐teaching
positions were also filled.
Moreover, 25,368,901 textbooks and instructional/learning materials
were delivered out of the 47,707,957 procured for 2015. A total of 11,498
schools also received information and communication technology (ICT)
packages and 9,571 schools were provided internet connection through the
DepEd Computerization Program.
For 2015, DepEd reached out to 448,214 out‐of‐school youths (OSYs), in
addition to 412,594 OSYs already enrolled in programs on education,
employment, and entrepreneurship since 2014 through the Abot‐Alam
Program.
Lastly, 910,312 high school grantees benefited from the Expanded
GASTPE through the Education Service Contracting (ESC) and the Education
Voucher System (EVS).

Commission on Higher Education (CHED)
Financial Performance. To continue promoting accessible quality tertiary
education, a total of P7.44 billion allotment was released to the CHED in 2015.
Of this amount, P1.11 billion was sourced from the Higher Education
Development Fund (HEDF). The CHED was able to obligate P7.04 billion or
94.52 percent of its total allotment during the year.

Physical Performance. A total of 186 or 171 percent of the target project
proposals from various Higher Education Institutions (HEIs) and State
Universities and Colleges (SUCs) were reviewed by CHED. Out of the said
total, 77 proposals or 100 percent of the target were funded using the HEDF.
Likewise, under the Philippines‐California Research Institute (PCARI) Project,
8 out of the 9 project proposals on Health Innovation and Translational
Medicine and Information Infrastructure Development targeted were also
approved and funded.
CHED was also able to exceed its 40,000 target scholarships through
the Student Financial Assistance Programs (STuFAPs) with 53,834 student
beneficiaries. Some 517 grantees from conflict‐afflicted areas also received a
Page 29 of 44

maximum of PHP10,000 per year to cover tuition and other fees under the
Student Grant Program of the Payapa at Masaganang Pamayanan
(PAMANA) Program. Moreover, 21,677 poor but deserving students
benefited from the Expanded Students’ Grants‐in‐Aid Program for Poverty
Alleviation in SUCs.

Department of Energy (DOE)
Financial Performance. For 2015, the DOE obligated a total of PHP2.8 billion.
Although the Department managed to obligate only 38.2 percent of its PHP7.4
billion allotment, this was an improvement from its FY 2014 obligation rate of
21.9 percent. As was the case the previous year, the agency’s low obligation
rate for 2015 was due to the non‐obligation of the Market Transformation
through the introduction of Energy‐Efficient Electric Vehicles (E‐Trike) Project
with an unobligated amount of PHP2.6 billion.

Physical Performance. Upholding its mandate as promoter of innovation, the
DOE doubled the number of promotional events undertaken in the last two
quarters of 2015, closing with 139 events, exceeding the set target of 101 by
37.6 percent. As regulator, the Department managed to surpass its target of
monitoring and inspecting 2,119 establishments by 81.5 percent for a total of
3,845 establishments due to a surge in accomplishments in the second
semester.
As of 2015, the number of households electrified under the Household
Electrification Development Plan (HEDP) increased from 19,267,084 in 2014 to
19,994,430. This brings the household electrification level of the country to
89.6 percent, closer to the 2017 target of 90.0 percent or 20,822,495 households
electrified. Of the total households served in 2015, the Nationwide
Intensification Household Electrification (NIHE) and the Household
Electrification Program in Off‐Grid Areas (HEP) energized a total of 37,312
households, of which 12,312 or 33.0 percent were situated in remote areas.
Under the PAMANA Program, madrasah schools, mosques, streetlights,
health centers and households were energized and electrified in barangays
and municipalities in Zamboanga del Norte, Agusan del Norte and Surigao
del Sur.

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Department of Environment and Natural Resources (DENR)
Financial Performance. The DENR exhibited an obligation rate of 88.8 percent
for 2015, a slight improvement over the 88.4 percent obligation rate registered
in 2014. 85.6 percent of the total obligations incurred by the Department was
for the implementation of the various programs and projects under the Office
of the Secretary. One such program, the National Greening Program (NGP),
obligated some PHP8.1 billion for 2015, or 91.0 percent of the PHP8.9 billion
allotment released for its implementation.

Physical Accomplishment. The NGP is a massive reforestation program of the
government which aims to plant 1.5 billion trees in 1.5 million hectares of
land for a period of six years from 2011 to 2016. For 2015, some 334,364
hectares have been planted, comprising 95.5 percent of the total area targeted
for the year. In terms of number of seedlings, a total of 314 million seedlings
were produced under the NGP.

Aside from restoring/rehabilitating the country’s forests, the DENR is
also tasked to ensure that national laws on air and water quality as well as on
solid waste management are implemented accordingly. In order to improve
air quality, the Environmental Management Bureau (EMB) under its Bantay
Tsimneya Program surveyed a total of 1,257 firms for compliance to the Clean
Air Act. This is 63.5 percent more than the 769 firms targeted for 2015. In
terms of air quality monitoring, the EMB operated and maintained all the
existing 89 Air Quality Sampling Stations. Meanwhile, as part of water
quality management, a total of 281 esteros/water bodies were monitored. In
addition, all 64 esteros targeted were adopted for the year. Finally, in line with
its task to provide technical assistance to LGUs on ecological solid waste
management, the EMB assisted 314 LGUs in the proper closure and
rehabilitation of open and controlled dumpsites. This is 61.0 percent more
than the targeted number of LGUs for 2015.
As part of the DENR’s efforts to promote climate change adaptation
strategies, the Mines and Geosciences Bureau (MGB), through the National
Geohazard Assessment Program, was able to produce 1:10,000 scaled maps
for 26 cities/municipalities, six more than the 20 LGUs targeted for 2015. The
Bureau was also able to cover all the 35 cities/municipalities targeted for their
vulnerability and risk assessment. Meanwhile, a total of 7,029 baragays were
covered in their information, education and communication campaign on the
use of geohazard and vulnerability assessment maps. This is 21 percent
higher than the 5,802 barangays targeted for 2015.

Page 31 of 44

Department of Health (DOH)
Financial Performance. For 2015, total obligations of the DOH reached P64.5
billion or 87.5 percent of its PHP73.7 billion total available allotment during
the year. Obligations incurred for current operating expenditures (COE)
amounted to PHP47.2 billion and comprised 73.2 percent of the total
obligations for the period. The bulk of the obligations for COE went to MOOE
at PHP28.9 billion or 61.2 percent, and the rest to PS at PHP18.3 billion.
Of the total allotment to the DOH, PHP73.0 billion or 99.0 percent was
released to the Office of the Secretary, of which PHP63.8 billion or 87.4
percent was obligated. The DOH’S attached agencies, the Commission on
Population and the National Nutrition Council, were provided allotments of
PHP400 million and PHP341 million, of which 95.8 percent and 97.1 percent
were obligated, respectively.
Some PHP30.8 billion or 47.8 percent of the DOH’s total obligations
was spent for the implementation of the following priority programs:
1. Health Facilities Enhancement Program (HFEP), PHP12.5 billion;
2. Expanded Program on Immunization, PHP6.9 billion;
3. Implementation of the Doctors to the Barrios and Rural Health
Practice Program, PHP4.0 billion;
4. Family Health and Responsible Parenting, PHP3.5 billion;
5. TB Control, PHP1.3 billion;
6. Program on Other Infectious Diseases and Emerging and Re‐
Emerging Diseases including HIV/AIDS, Dengue, food and water‐
borne diseases, PHP796 million;
7. Program for Elimination of Diseases as Public Health Threat such
as Malaria, Schistosomiasis, Leprosy and Filariasis, PHP742 million;
8. Non‐Communicable Disease Prevention and Control, PHP683
million; and,
9. Rabies Control Program, PHP397 million.
Aside from the PHP73.7 billion available allotment to the DOH, a large
amount of PHP36.3 billion was released and obligated by the Philippine
Health Insurance Corporation (PHIC) for the enrolment coverage and
payment of PhilHealth premiums of families listed under the National
Household Targeting System (NHTS), and those identified under the
PAMANA and Sajahatra Bangsamoro Programs.

Page 32 of 44

Physical Performance. For 2015, the DOH reported 240,418 Human Resource for
Health (HRH) trained, exceeding its target for the year by 94,766 HRH trained
or 65.1 percent. This was due to the launching of the Universal Health Care
High Impact 5 (UHC HI‐5) Strategy during the second quarter of 2015, which
intensified the involvement of LGUs and other health partners in the
implementation of activities that will produce the greatest improvements in
health incomes and highest impact on the population. The DOH also reported
that out of the targeted number of 885 LGUs and other health partners to be
provided with health facilities during the year, only 41.9 percent or 371 LGUs
and other health partners were provided with health facilities due to delays in
the HFEP implementation.
With a total obligation rate of 100.0 percent in 2015, the PHIC was able
to accomplish 100.0 percent coverage rate of indigent families listed under the
NHTS and assign 75.0 percent of these indigent families to a Primary Care
Benefit (PCB) Provider that will be responsible for the delivery of free
preventive health care services to these families and their qualified
dependents.

Department of the Interior and Local Government (DILG)
Financial Performance. As of end‐December 2015, the DILG was able to obligate
PHP167.9 billion or 95.6 percent of its total available allotment of PHP175.7
billion for the year. This is an improvement over the previous year’s
obligation rate of 89.8 percent. By expense class, PS made up for about 76.8
percent of the total obligations incurred by the Department, while MOOE and
CO comprised 15.9 percent and 7.3 percent, respectively. By implementing
agency, the Philippine National Police (PNP) accounted for PHP121.7 billion
or 72.5 percent of the total obligations, followed by the DILG‐Office of the
Secretary (DILG‐OSEC) and the Bureau of Fire Protection (BFP) with
PHP18.4 billion (11.0 percent) and PHP16.0 billion (9.5 percent), respectively.

Physical Performance. In 2015, the PNP conducted 6,527,326 foot patrols and
5,191,103 mobile patrol operations, excluding those for the Papal Visit and the
APEC events. This intensified police visibility helped reduce the crime rate
from 27.9 percent in the previous year to 24.1 percent in 2015. Alongside this
accomplishment, the PNP achieved a 99.4 percent police response within 15
minutes to calls for police assistance in the urban areas. The PNP also
undertook a total of 675,816 crime investigations.
The DILG‐OSEC, on the other hand, provided technical assistance on
accountable, transparent, participative and effective local governance to 1,592
LGUs. With respect to the assessment of LGUs for compliance with the
Page 33 of 44

standards of the Seal of Good Local Governance (SGLG), the DILG‐OSEC
postponed the assessment in order to cover the entire performance
dimensions of the LGUs under the Seal.
The BFP, for its part, inspected 92.7 percent of the total number of
buildings and establishments targeted for inspection in 2015, and responded
100.0 percent to the total number of fire and emergency or rescue calls made
nationwide.
Department of Labor and Employment (DOLE)
Financial Performance. In support of the DOLE’s mandate to formulate and
implement policies and programs on labor and employment, PHP14.4 billion
was allocated to the Department in 2015. Of this amount, PHP13.3 billion or
92.8 percent was obligated by the end of the year. The bulk of the agency
obligation was from the Office of the Secretary, with PHP4.9 billion or 92.5
percent of its PHP5.2 billion allotment, and the Technical Education and Skills
Development Authority (TESDA) with P5.6 billion obligation or 91.6 percent
of its PHP6.1 billion allotment.
Specifically, the Office of the Secretary’s Special Program for
Employment of Students (SPES) obligated P601.9 million, representing 86.27
percent of its PHP697.7 million allocation. In addition, the DOLE Integrated
Livelihood Emergency Employment Program (DILEEP) obligated 90.6 percent
of its allotment, amounting to P918.3 million. Meanwhile, PHP2.6 billion of
TESDA’s obligations was mainly due to the Training for Work Program
(TWSP), Special Training for Employment Program (STEP) and the Private
Education Student Financial Assistance (PESFA).

Physical Accomplishments. For 2015, the SPES Program provided bridging
employment assistance to 207,885 students. Likewise, the DILEEP exceeded
its target by 15 percent with 71,607 beneficiaries provided with various skills
trainings, tools and jigs and/or financial assistance.
For the same period, TESDA exceeded its targets for TWSP and PESFA.
Specifically, a total of 260,136 students or 124 percent of the total target
benefited from the TWSP, which aims to augment the skills gaps and job
requirements of priority industries and sectors with high employment
demands. A total of 184,575 out of the 189,473 target graduated under the
program. With regard to the PESFA Program, 25,630 marginalized but
deserving students in technical‐vocational education and training (TVET)
courses were granted financial assistance.
Page 34 of 44

Moreover, some 19,924 trainees, representing only about half of the
targeted beneficiaries for the STEP Program, were provided skills training
with starter tool kits and training allowance since the Program only started in
July 2015, as per program design.

Department of National Defense (DND)
Financial Performance. For 2015, total obligations of the DND amounted to
PHP151.8 billion or 93.6 percent of the PHP162.2 billion total available
allotment for the period. Obligations incurred for PS reached PHP115.0 billion
or more than 75.0 percent of the total obligations.
Of the total allotment to DND, P61.5 billion or 37.9 percent was
released to the General Headquarters (GHQ), out of which PHP57.1 billion or
92.8 percent was obligated. Sizeable releases were also made to the three
major services of the Armed Forces of the Philippines (AFP) as follows: a)
Philippine Army – PHP50.9 billion; b) Philippine Navy– PHP17.5 billion; and
c) Philippine Air Force – PHP16.7 billion. Of the said releases to the AFP in
the combined amount of PHP85.1 billion, PHP80.3 billion or 94.4 percent was
obligated.
Physical Performance. For 2015, the Philippine Army was able to maintain 176
tactical battalions with 64.0 percent operational readiness and 88.0 percent
effective strength; and was able to maintain 81 ready reserve battalions with
69.0 percent operational readiness.
The Philippine Navy, on the other hand, was able to maintain 122
mission‐ready Fleet Marine units with 70.7 percent readiness, and 55 mission‐
ready support and sustainment units with 64.2 percent readiness. It was also
able to achieve the targeted average response time of fleet units (24 hours)
and marine units (6 hours) that can be mobilized as instructed by higher
authorities.
Meanwhile, the Philippine Air Force was able to maintain 123
supportable aircraft with 60.0 percent readiness rate; and was able to achieve
an accomplishment rate of 80.0 percent of flight directed missions responded
in one hour.

Department of Public Works and Highways (DPWH)
Financial Performance. To support its key role as the engineering and
construction arm of the National Government, the DPWH received an
allotment amounting to PHP447.9 billion. The capital transfers amounting to
PHP56.3 billion from several agencies like the DA, DepEd, and DOH are
already included in the total allotment of the DPWH in 2015. Out of the total
Page 35 of 44

allotment, PHP351.3 billion was obligated, equivalent to 78.4 percent

obligation rate, which is higher by 7.6 percentage points over the 2014 rate.
As of end 2015, the financial performance of the DPWH in terms of
MFOs are as follows: national road network services (MFO 1), PHP113.0
billion; flood management services (MFO 2), PHP33.0 billion; and
maintenance and construction services of other infrastructures (MFO 3),
which involves construction of access roads to airports, seaports and declared
tourist destinations, PHP18.7 billion. The total obligation for the three MFOs
comprised 46.9 percent of the total obligations of the DPWH, including capital
transfers. The reasons for the low obligation for DPWH operations are as
follows: (a) slow rehabilitation of flood and mitigation facilities along primary
rivers; and (b) slow implementation of construction of flyovers, interchanges,
and bypasses.
The Mindanao Logistics Infrastructure Network (MLIN) had a total
obligation of PHP10.1 billion in 2015. The said project aims to address the
inadequate infrastructure in the lagging regions of the country, particularly
Mindanao.

Physical Performance. In reporting on its accomplishments, the DPWH uses the
percentage (%) unit instead of the number of projects completed. This is
consistent with the Department’s project monitoring system (PMS).
Furthermore, the reported actual accomplishment of the DPWH is based on
the standard S‐curve used by the Department.
For MFO 1, which involves road upgrading, the DPWH has a total of
343 projects, of which 158 have been completed and 180 are still ongoing. In
terms of length of roads and bridges built, DPWH has constructed 746.8
kilometers (km) of national roads, of which 723.9 km have been completed. It
also paved 245.7 km of national roads, of which 242.4 km were completed.
Lastly, DPWH constructed 11,013 lineal meters (lm) of bridges, of which
10,774.5 lm have been completed. One of the key road projects of the DPWH
is the Muntinlupa‐Cavite Expressway (Daang Hari‐SLEX Link Road Project).
Said Expressway became operational in July 2015. The project hit the 100
percent accomplishment as of December 2015, which is 15 percentage points
improvement over the 2014 accomplishment of 85 percent.
Meanwhile, for MFO 2, which focuses on providing flood control
services, there are 1,225 identified projects, of which 737 are completed and
466 are ongoing. For the major flood control projects of the Department, the
High‐Impact Flood Control Projects in Metro Manila and Surrounding Areas
posted an actual accomplishment rate of 99 percent in 2015, 10 percentage
points higher than the 2014 accomplishment of 89 percent. Meanwhile, the
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Blumentritt Interceptor Catchment Area scored an accomplishment of 90

percent, which is 11 percentage points higher than the 2014 accomplishment
of 79 percent.
Finally, for MFO 3, which focuses on the other services of the
Department, especially the construction and maintenance of access roads
leading to airports, seaports, and declared tourism destinations, there are 281
identified projects, of which 121 have been completed, 158 are still ongoing,
and 2 have not yet started. The DPWH constructed and improved 20.2 km of
access roads leading to airports, of which 19.3 km are completed. On the other
hand, the DPWH constructed and improved 30.9 km of access roads leading
to sea ports, all of which were completed. Lastly, the Department constructed
and improved 235.7 km of access roads leading to declared tourist
destinations, of which 226.0 km were completed, or a 96 percent completion
rate.

Department of Science and Technology (DOST)
Financial Performance. The DOST obligated PHP17.0 billion, 83.1 percent out of
its PHP20.4 billion allotment for 2015. The total obligated amount includes a
PHP2.2 billion obligation for the scholarship program of the Science
Education Institute (SEI) – almost doubling what was obligated for the
program by the mid‐year of 2015.

Physical Performance. As part of its mandate of developing the country’s
human resources in the field of science and technology, SEI supported a total
of 18,765 students under its scholarship program. Though the number of
scholars taking Masteral and Doctoral programs fell short of their respective
targets by 2 and 10 percent, respectively, the Undergraduate level supported
292 students in excess of its target, with 15,858 Undergraduates.
The Philippine Atmospheric, Geophysical and Astronomical Services
Administration (PAGASA) issued a total of 3,201 weather and flood
warnings, of which 95 percent were issued within 5 minutes of schedule,
exceeding their targets in both quantity and timeliness. Furthermore, the
rehabilitation of the meteorological radar system in Guiuan, Eastern Samar
was completed in the last two quarters of 2015, with its inauguration set in
March 2016. Meanwhile, the Philippine Institute of Volcanology and
Seismology (PHIVOLCS) exceeded its target of issuing hazard and risk maps
and evaluation reports by 311 percent, with a total of 2,466 issuances against
the 600 target, due to the increase in societal demand following the launch of
the Valley Fault System Atlas.

Page 37 of 44

Department of Social Welfare and Development (DSWD)
Financial Performance. As of December 31, 2015, the DSWD was able to
obligate PHP124.3 billion, representing 87 percent of its PHP142.8 billion
allotment, inclusive of the PHP19.7 billion continuing appropriation from the
previous years. A hefty amount funded its major programs such as the
Conditional Cash Transfer (CCT), with an obligation of PHP61.5 billion;
Kapit‐Bisig Laban sa Kahirapan ‐ Comprehensive and Integrated Delivery of
Social Services (Kalahi‐CIDSS), PHP15.0 billion; Social Pension for Indigent
Senior Citizens, PHP5.7 billion; Sustainable Livelihood Program, PHP4.6
billion; and Supplemental Feeding Program, PHP2.9 billion. Part of its 2015
allotment worth PHP8.5 billion formed part of the 2016 funding.

Physical Performance. For 2015, a total of 4,139,728 families out of the 4,309,769
target household beneficiaries were provided monthly cash allowances upon
their compliance with specific health and education requirements of the CCT
Program. Under accomplishment is mainly attributed to unlocated
households and deactivation of Pantawid households, with the graduation of
eligible members from the Program. Meanwhile, the inclusion of new CCT
household beneficiaries identified under the special registration conducted
resulted in a 187 percent accomplishment or 238,034, from the target of
126,963 households benefiting from the Modified CCT which covers children
up to 18 years old to enable them to finish high school.
For the same period, the Kalahi‐CIDSS NCDDP empowered 14 regions,
58 provinces, 759 municipalities and 17,770 barangays through improved
access to services and participation in more inclusive local planning,
budgeting and program/project implementation. Likewise, 6,055 community
development projects were funded and completed as of end‐December 2015.
A total of 877,198 indigent senior citizens aged 65 and above were also
able to receive P500 monthly social pension in 2015. However, the provision
of pay‐out is still on‐going for the remaining 6.64 percent of the target or
62,411 senior citizen beneficiaries.
The Sustainable Livelihood Program exceeded its 2015 target with
380,068 families served through the Micro‐Enterprise Development
Component and 127,539 households facilitated for employment. Of the total
beneficiaries, 85 percent were CCT beneficiaries while the rest are non‐CCT
but National Household Targeting System for Poverty Reduction (NHTS‐PR)
identified poor families.
Moreover, 1,786,201 day care children enrolled in LGU‐run day care
centers and supervised neighborhood play were provided additional hot
meals under the Supplementary Feeding Program.
Page 38 of 44

Department of Transportation and Communications (DOTC)
Financial Performance. To support its mandate to promote, develop, and
regulate a dependable and coordinated network of transportation and
communications systems, the DOTC received a total allotment of PHP79.6
billion in 2015. The bulk of the allotment of DOTC has been allocated for its
transport infrastructure projects: air transport, maritime transport, among
others. On the other hand, the DOTC obligated an amount of PHP46.1 billion,
equivalent to a 58.0 percent obligation rate. The obligation incurred in 2015 is
0.8 percentage points lower than the 58.8 percent obligation rate recorded in
2014.

Physical Performance. The DOTC aviation projects include the Puerto Princesa
Airport Development Project. It aims to improve the airport’s facilities by
constructing a new passenger terminal complex, which includes an air traffic
control tower, and construction of new access roads, among others. The
overall accomplishment rate by the end of 2015 is reported at 45.8 percent.
Further, the civil works, which include asphalt plant trial testing and
consultancy services, are still ongoing with an accomplishment rate of 43.4
percent and 60.4 percent, respectively.
Meanwhile, the preparatory works and construction of the external
water supply system of the New Bohol Airport Construction and the
Sustainable Environment Protection Project are almost complete with
accomplishment rates of 98 percent and 100 percent, respectively. It is
noteworthy that operation and maintenance (O&M) is still ongoing.
Finally, the New Communications, Navigation and Surveillance/Air
Traffic Management Systems Development Project (CNS/ATM) aims to have
new satellite‐based CNS/ATM systems in accordance with the International
Civil Aviation Organization (ICAO) Global Air Navigation Plan for
CNS/ATM Systems. The Project has an overall physical accomplishment rate
of 81.1 percent, and is divided into two work packages: Package 1 involves
the design and construction of the ATM Center Building and the ATM
Automation System, while Package 2 calls for the design and construction of
the surveillance (radar) and communications system. The system works and
civil works for Package 1 have an actual accomplishment rate of 79.9 percent
and 96.1 percent, respectively. Meanwhile, system works and civil works for
Package 2 have an actual accomplishment rate of 78.5 percent and 73.7
percent, respectively.
Aside from aviation projects, the DOTC is also executing several
transport infrastructure projects like the Cebu Bus Rapid Transit Project. The
project involves the establishment of a transport system that will run through
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the dedicated bus‐ways in Cebu City. This is still under the Detailed
Engineering Design (DED) stage, and is expected to be completed in January
2016. The procurement for civil works started in December 2015 and the
awarding of contract is scheduled in March 2016.
Lastly, the Department is implementing maritime infrastructure
projects to improve the country’s maritime facilities. The Philippine Ports and
Coast Guard Capability Development Project aims to strengthen the PCG
capability to conduct maritime patrol search and rescue operations. The
project is currently under loan negotiation. On the other hand, the Maritime
Safety Capability Improvement Project for the Philippine Coast Guard
involves acquisition of ten units of 40‐meter Multi‐Role Respond Vessels
(MRRV) that aims to improve the PCG capacity to quickly respond to coastal
maritime incidents that include search and rescue, and maritime law
enforcement, among others. The Project is still under consultancy services.
The delivery of the first vessel is expected in August 2016, and the last vessel
is expected to be delivered in 2018.

V. Fiscal Outlook

Fiscal Outlook
Learning from the underspending experience in the recent years, the
government has put in placed expenditure measures to ensure that program
implementation is on track and disbursements are on target. These measures
include continued adoption of early procurement activities short of award as
soon as the President’s Budget is submitted to Congress, and the
comprehensive release of allotments once the General Appropriations Act is
in effect that would enable agencies to kick‐start the implementation of their
programs or projects on the first working day of the year. Institutional
capacities of line agencies will also be strengthened as the government will
soon issue a fiscal calendar that will guide them in their planning and
budgeting exercises. The revised IRR of the procurement law is set to be
issued in the latter part of 2016, which will also be supported by training
programs to resolve procurement issues and difficulties experienced by line
agencies.

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Annex A
REVENUE PROGRAM, BY SOURCE
(In Million Pesos)
2014 2015 percent of GDP

PARTICULARS Growth
Actual Program Actual Difference 2014 2015
TAX REVENUES 1,720,117 2,127,652 1,815,475 (312,177) 13.6 13.6 5.5
Taxes on Net Income and Profits 784,859 993,577 846,201 (147,375) 6.2 6.4 7.8
Taxes on Property 5,450 5,017 5,636 619 0.0 0.0 3.4
Taxes on Domestic Goods and Services 560,530 692,466 596,103 (96,363) 4.4 4.5 6.3
General Sales, Turnover or VAT 278,727 373,831 287,231 (86,600) 2.2 2.2 3.1
Selected Excises on Goods 135,315 140,438 158,319 17,881 1.1 1.2 17.0
Selected Taxes on Services 55,881 78,435 58,378 (20,057) 0.4 0.4 4.5
or Permission to Perform Activities 592 707 613 (94) 0.0 0.0 3.5
Other Excise Taxes 90,015 99,055 91,562 (7,493) 0.7 0.7 1.7
Taxes on International Trade and Transactions 369,277 436,592 367,534 (69,058) 2.9 2.8 (0.5)
NON-TAX REVENUES 186,465 145,577 230,698 85,121 1.5 1.7 23.7

#DIV/0!
Fees and Charges 32,771 36,359 36,405 46 0.3 0.3 11.1
Income from Tresury Operations 53,390 39,988 56,271 16,283 0.4 0.4 5.4
Interest Income on NG Deposits 3,159 2,306 5,906 3,600 0.0 0.0 87.0
Interest on Advances to GOCCs 142 755 110 (645) 0.0 0.0 (22.5)
Income from Investments 41,920 30,657 42,684 12,027 0.3 0.3 1.8
Guarantee Fee 3,120 3,700 4,017 317 0.0 0.0 28.8
Foreign Exchange Risk Cover Fee 1,577 1,675 1,578 (97) 0.0 0.0 0.1
Government Service Income 3,472 895 1,976 1,081 0.0 0.0 (43.1)
Fidelity Bond Premia 675 260 781 521 0.0 0.0 15.7
Subscription Fee - RoSS Participants 10 10 12 2 0.0 0.0 20.0
Escheat of Unclaimed Balances 140 25 38 13 0.0 0.0 (72.9)
Service Fee on Relent Loans 2,597 600 1,118 518 0.0 0.0 (57.0)
Other Miscellaneous Income 50 - 27 27 - - (46.0)
NG Income Collected by the BTr 40,054 20,670 53,764 33,094 0.3 0.4 34.2
Dividends on Shares of Stocks 24,374 5,500 32,269 26,769 0.2 0.2 32.4
NG Share from Airport Terminal Fee 555 470 602 132 0.0 0.0 8.5
NG Share from PAGCOR Income 14,021 14,000 19,995 5,995 0.1 0.2 42.6
NG Share from MIAA Profit 1,104 700 898 198 0.0 0.0 (18.7)
-
Other Non-Tax Revenues 60,017 48,560 84,094 35,534 0.5 0.6 40.1
Malampaya Royalties 22,301 23,725 14,321 (9,404) 0.2 0.1 (35.8)
Other Non-Tax Revenues 37,716 24,835 69,773 44,938 0.3 0.5 85.0
-
Foreign Grants 233 - 164 164 0.0 0.0 (29.6)
PRIVATIZATION 1,946 2,000 62,783 60,783 0.0 0.5 3,126.3
TOTAL REVENUES 1,908,528 2,275,229 2,108,956 (166,273) 15.1 15.8 10.5
Memo Item:
Nominal GDP 12,642,736 13,307,265
Source: Department of Finance

Page 41 of 44

Annex B
TAX REVENUE PROGRAM, BY COLLECTING DEPARTMENT/AGENCY
(In Million Pesos)
2015
PARTICULARS 2014
Program Actual
DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES 133 143 128
Office of the Secretary 133 143 128
Taxes on Domestic Goods & Services

Other Taxes
Forest Charges 133 143 128
DEPARTMENT OF FINANCE 1,704,039 2,110,537 1,800,836
Bureau of Customs 369,277 436,592 367,534
Taxes on Int'l Trade & Transactions 369,277 436,592 367,534

Import Duties and Taxes 56,279 67,989 57,139
VAT on Imports 279,114 331,503 274,695
Other Collections (Excise) 33,885 37,100 35,700
Bureau of Internal Revenue 1,334,762 1,673,946 1,433,302
Taxes on Net Income & Profits 784,859 993,577 846,201

Company, Corporate & Enterprises 283,651 329,245 489,762
Individual 455,139 607,737 309,206
Others 46,069 56,595 47,233
Taxes on Property 5,450 5,017 5,636

Property Transfer Tax 5,450 5,017 5,636
Taxes on Domestic Goods & Services 544,453 675,352 581,464
Gen. Sales, Turnover or VAT (Net of VAT Refunds) 278,727 373,831 287,231
Selective Excises on Goods 135,315 140,438 158,319

Alcohol Products 37,525 41,592 42,214
Tobacco Products 82,336 77,481 99,505
Fuel and Oils 9,419 14,566 11,888
Mining 3,203 3,045 2,079
Other Miscellaneous 2,832 3,754 2,633
Selective Taxes on Services 55,881 78,435 58,378

Other Percentage Taxes 28,769 37,993 30,909
Banks/Financial Institutions 25,485 39,677 25,578
Insurance Premiums 1,184 202 1,337
Amusements 445 563 554

or Permission to Perform Activities 592 707 613
Franchise Taxes 592 707 613
Documentary Stamp Tax 69,017 75,656 72,073
Other Taxes 4,921 6,285 4,850

Miscellaneous 4,921 6,285 -
DEPARTMENT OF INTERIOR AND LOCAL GOVERNMENT 1,129 1,614 1,369
Bureau of Fire Protection
Taxes on Domestic Goods and Services 1,129 1,614 1,369

Other Taxes
Fire Code Tax
Page 42 of 44

TAX REVENUE PROGRAM, BY COLLECTING DEPARTMENT/AGENCY

(In Million Pesos)
2015
PARTICULARS 2014
Program Actual
DEPARTMENT OF JUSTICE 72 81 72
Bureau of Immigration 72 81 72
Taxes on Domestic Goods and Services

Other Taxes
Immigration Tax 72 81 72
DEPARTMENT OF TRANSPORTATION 12,916 12,945 11,300
Office of the Secretary 12,916 12,945 11,300
Land Transportation Office 12,916 12,945 11,300
Taxes on Domestic Goods & Services 12,916 12,945 11,300

Motor Vehicle Tax 12,916 12,945 11,300
4,311
OTHER EXECUTIVE OFFICES 1,827 2,331 1,770
Commission on Higher Education 1,542 1,980 1,457
Other Taxes 1,542 1,980 1,457
National Commission for Culture and the Arts 285 351 313
Other Taxes 285 351 313
TOTAL TAX REVENUES 1,720,116 2,127,651 1,815,475
Source: Department of Finance

Page 43 of 44

Annex C
STATUS OF CY 2015 BUDGET PROGRAM (Preliminary)
January 1-December 31, 2015
(In Thousand Pesos)
CY 2015 BUDGET
ALLOTMENT % of Releases
PARTICULARS ADJUSTED BALANCE
PROGRAM ADJUSTMENTS RELEASES Over Program
PROGRAM
A. GAA - R.A. 10651 1,739,768,572 - 1,739,768,572 1,626,030,980 93.5% 113,737,592 c/

Departments 1,347,378,575 (23,660,787) 1,323,717,788 1,318,794,838 97.9% 28,583,737
Special Purpose Funds 392,389,997 23,660,787 416,050,784 307,236,142 78.3% 85,153,855
B. AUTOMATIC APPROPRIATIONS 866,231,428 - 866,231,428 844,432,050 97.5% 21,799,378

Retirement and Life Insurance Premium 30,139,510 30,139,510 32,666,135 108.4% (2,526,625) d/
Internal Revenue Allotment 389,860,429 389,860,429 389,860,429 100.0% -
Pension of Ex-Pres./Ex-Pres. Widows 331 331 331 100.0% -
Grants/Donations 142,902 142,902 142,902 100.0% -
Special Account in the General Fund 21,250,256 21,250,256 21,054,832 99.1% 195,424
Motor Vehicle Users Charge Fund 12,998,297 12,998,297 12,998,297 100.0% -
Others 8,251,959 8,251,959 8,056,535 97.6% 195,424
Net Lending 26,500,000 26,500,000 9,696,000 a/ 36.6% 16,804,000
Interest Payment 372,863,000 372,863,000 372,863,000 100.0% -
Tax Expenditures Fund/Customs Duties and Taxes 25,475,000 25,475,000 18,148,421 71.2% 7,326,579
ORIGINAL PROGRAM 2,606,000,000 - 2,606,000,000 2,470,463,030 94.8% 135,536,970
OTHER RELEASES - 102,833,190 b/ 0.0% (102,833,190)

CONTINUING APPROPRIATIONS - 75,198,432 (75,198,432)
R.A. 10633 52,748,529 0.0% (52,748,529)
Departments 30,927,589 (30,927,589)
Special Purpose Funds 21,820,940 (21,820,940)
SUPPLEMENTAL BUDGET-R.A. 10652 - 22,449,903 (22,449,903)

Departments 12,714,040 (12,714,040)
Special Purpose Funds 9,735,863 (9,735,863)
UNPROGRAMMED FUND 23,567,805 (23,567,805)
AUTOMATIC APPROPRIATIONS - 4,066,953 (4,066,953)

Grants/Donations 1,809,418 (1,809,418)
Military Camps Sales Proceeds Fund 51,173 (51,173)
AFP Modernization Act Trust Fund 804,888 (804,888)
Motor Vehicle Users Charge Fund 1,401,474 (1,401,474)
TOTAL 2,606,000,000 - 2,606,000,000 2,573,296,220 98.7% 32,703,780
NOTES:
a/ Net Lending - based on BTr's Cash Operation Report
b/ Releases which are being accommodated within the current year's Expenditure Program of P2.606 trillion.
c/ Of the P113.738B, unreleased appropriations under the FY 2015 GAA, R.A. 10651, P66.264B shall be carried over in FY 2016
as continuing appropriations.
d/ Pertains to additional requirement for RLIP of various agencies corresponding to the newly-created/filled up positions
Page 44 of 44

FY 2015 DBCC Year-End Report v7

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2015 YEAR‐END REPORT

 Examination of the yearʹs overall performance relative to the

Nominal GNI (in PhP million)

Real Gross Domestic Product 6.2 5.9 7.0-8.0

Inflation (%) 2.0-4.0 2.0-4.0 1.4

110.00 per barrel initial assumption in the 2015 BESF. Dubai crude oil prices

Unemployment rate (%) 6.6 6.6-6.8 6.3 6.5-6.7

Source: Labor Force Survey - PSA, Philippine Development Plan 2011-2016

Poverty incidence (%)

Source: Family Income and Expenditure Survey, PSA

Total Revenues 1,908.5 2,275.2 2,109.0 (166.2) (7.3) 10.5

Disbursements 1,981.6 2,558.9 2,230.6 (328.3) (12.8) 12.6

Surplus/(Deficit) -73.1 -283.7 -121.6 (162.1) (57.1) 66.5

Sources: Department of Budget and Management (DBM), Department of Finance (DOF)

Tax revenues reached PHP1,815.5 billion, 5.6 percent or PHP96.5

Non‐tax revenues totaled PHP230.7 billion, higher than the 2014 level

Total remittances from the government’s Privatization Program

Total BIR Collection 1,334.8 1,673.9 1,441.6 86.1% 8.0% 100.0%

Sources: Bureau of Internal Revenues (BIR)

1st Year - CY 2013

GRAND TOTAL 127.4 174.6 47.1 360.5

Source: Departmernt of Finance

Total BOC Collection 369.3 367.5 -0.5% 100.0%

Source: Bureau of Customs

Net Financing 310,435 296,822 242,852 (53,970) -18%

Gross Financing 700,822 710,823 609,610

Financing Mix (% of total)

Attesting to the government’s effective liability management and

Total NG Debt 5,735,242 5,954,537 219,295 3.7%

conditions are clearances from approving authorities or regulatory bodies,

Meanwhile, through the Support Infrastructure and Local Capability

recipients. The establishment/installation of small‐scale irrigation projects

Additionally, 628,672 seats were provided to elementary schools and

allotment, PHP351.3 billion was obligated, equivalent to 78.4 percent

Blumentritt Interceptor Catchment Area scored an accomplishment of 90

2014 2015 percent of GDP

TAX REVENUES 1,720,117 2,127,652 1,815,475 (312,177) 13.6 13.6 5.5

Taxes on Property 5,450 5,017 5,636 619 0.0 0.0 3.4

NON-TAX REVENUES 186,465 145,577 230,698 85,121 1.5 1.7 23.7

PRIVATIZATION 1,946 2,000 62,783 60,783 0.0 0.5 3,126.3

TOTAL REVENUES 1,908,528 2,275,229 2,108,956 (166,273) 15.1 15.8 10.5

Source: Department of Finance

DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES 133 143 128

Office of the Secretary 133 143 128

Taxes on Domestic Goods & Services

DEPARTMENT OF FINANCE 1,704,039 2,110,537 1,800,836

Bureau of Customs 369,277 436,592 367,534

Taxes on Int'l Trade & Transactions 369,277 436,592 367,534

Bureau of Internal Revenue 1,334,762 1,673,946 1,433,302

Taxes on Net Income & Profits 784,859 993,577 846,201

Taxes on Property 5,450 5,017 5,636

Taxes on Domestic Goods & Services 544,453 675,352 581,464

Selective Excises on Goods 135,315 140,438 158,319

Selective Taxes on Services 55,881 78,435 58,378

Taxes on the Use of Goods or Property

Documentary Stamp Tax 69,017 75,656 72,073

Other Taxes 4,921 6,285 4,850

DEPARTMENT OF INTERIOR AND LOCAL GOVERNMENT 1,129 1,614 1,369

Bureau of Fire Protection

Taxes on Domestic Goods and Services 1,129 1,614 1,369