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[Audio] PUBLIC EXPENDITURE Fiscal Policy and Administration UNIT 5.

[Audio] GROUP 5 AMOTO, LEAH MAE S. GSIS CDO AMOTO, MICHAEL CHRISTIAN A. GSIS Iligan AQUINO, MARICEL S. GSIS Bataan CORPUZ, CHRISTEL ANNE B. Bureau of Customs CRISMUNDO, KRIS M. Philippine News Agency FLORES, FREYA ISABEL R. GSIS GUTIERREZ, WIL KRISTOPHER G. GSIS Bataan LABADLABAD, CZANELLE DANA S.J. GSIS Basilan VARON, LAURRIE GRACE D. Senate VIRREY, DAVE ANDREW A. Bureau of Customs.

[Audio] DISCUSSION How are public expenditures classified, and what is the significance of distinguishing between current and capital expenditures in public finance?.

[Audio] PUBLIC EXPENDITURE Current Expenditures Capital Expenditures Day-to-day Operations Ex. Salaries, Subsidies, Interest Payment & Operational Costs Investment in Long-Term Assets Ex. Infrastructure Projects, Investments in Public Institutions & Research and Development.

[Audio] PUBLIC EXPENDITURE Based on Functions Non-development Expenditures Aimed to meet administrative and operational needs of the government. Development Expenditures Focuses on economic and social development. Transfer Payments Payments made without receiving any goods or services in return..

[Audio] Public Investment Expenditures Direct investment in specific sectors. Welfare & Social Expenditures Aimed at improving people's well-being, especially for vulnerable groups. Administrative Expenditure Spending on the day-to-day running of public offices and services..

[Audio] Investment Decisions helps prioritize projects that yield economic returns versus those needed for routine functioning Economic Impact boosts future growth & sustains existing services Budget Planning & Management helps allocate funds appropriately Accountability & Transparency ensures better tracking of how public money is used Fiscal Health Assessment aids in evaluating a government’s financial sustainability Sales Stat 1 (Red Value) Stat 2 (Grey Value) Stat 3 61 39 Sales Stat 1 (Red Value) Stat 2 (Grey Value) 82 18 Sales Stat 1 (Red Value) Stat 2 (Grey Value) 60 40 Sales Stat 1 (Red Value) Stat 2 (Grey Value) 35 65 Sales Stat 1 (Red Value) Stat 2 (Grey Value) 35 65 Significance of Distinguishing between CURRENT and CAPITAL Expenditures in Public Finance.

[Audio] DISCUSSION What are the key theories of public expenditure growth, and how do they explain the expansion of government spending in both developed and developing economies?.

[Audio] Key Theories of Public Expenditure Growth Explanation of Government Spending Growth 1. Bureaucratic Theory Bureaucracies seek to maximize their budgets and influence, leading to increased government spending. 2. Public Choice Theory Politicians and interest groups push for spending that benefits them personally or politically. 3. Wagner's Law As national income rises, the public demands more government services like education, welfare, and defense. 4. Fiscal Federalism Theory Division of responsibilities between central and local governments can cause duplication and inefficiencies, raising expenditure. 5. Keynesian View Government increases spending to manage demand, reduce unemployment, and stabilize the economy during downturns. 6. Growth of Entitlement Programs Aging populations and rising social needs lead to more spending on pensions, healthcare, and welfare. 7. Structuralist Theory Structural changes like industrialization or urbanization require more government intervention and spending. 8. Pervasive State Theory Modern societies’ increasing complexity demands greater regulation and public services, expanding government roles. An Animated PowerPoint Template Design.

[Audio] DISCUSSION What are the main mechanisms of public expenditure management and control, and how do they ensure accountability and transparency in government spending?.

[Audio] MAIN MECHANISMS For Public Expenditure Management & Control Legal Frameworks & Budgetary Rules Internal Control System External Audit & Oversight Performance Audits & Evaluation Transparency & Public Reporting Assess whether funds were used efficiently & in compliance w/ law & investigate fraud/misuse of funds. Ex. COA Spending aligns with legislative priorities & funds are allocated within constitutional limit Ex. GAA Internal audit & checks help flag irregularities & misappropriation of funds. Ex. Each agencies & department has own ICS Assess whether government programs & projects deliver desired outcomes. Ex. Audits & Evaluation Reports Making public reports available online Ex. Publishing Expenditure Reports.

[Audio] DISCUSSION How can efficiency and effectiveness in government spending be measured, and what strategies can be employed to optimize resource allocation in public programs?.

[Audio] Measures of Efficiency & Effectiveness in Government Spending Explanation 1. Government Spending Efficiency & Trust Countries that manage public funds efficiently are more likely to earn stronger public confidence in their governance. 2. Local Government Efficiency & Public Sector Performance Higher efficiency at the local level often leads to better sovereign credit ratings, which can result in lower borrowing expenses. 3. Digital Transformation and Public Spending Technologies like distributed ledgers are used to monitor and record financial transactions transparently. 4. Government Spending Efficiency Initiatives Departments assess how efficiently they use their budgets to uncover areas where cost savings can be made..

[Audio] Strategies to Optimize Resource Allocation in Public Programs Explanation 1. Federal Funding in Research & Development Strategic public funding in R&D plays a vital role in driving innovation and supporting scientific advancement. 2. Public Spending & Sustainable Development Goals (SDGs) Directing government funds toward programs aligned with SDGs helps achieve long-term environmental, social, and economic sustainability. 3. Government’s Scope, Efficiency, and Role in Regulating Business The effectiveness of public service delivery varies depending on whether the government adopts a minimal or more expansive role in service provision. 4. Reassessing Incentive Structures and Promoting Transparency Setting constitutional limits on government size, pursuing institutional reforms, and improving transparency in the budgeting process can enhance public accountability..

[Audio] PUBLIC TRANSPORT SUBSIDY PROGRAM A CASE ANALYSIS.

[Audio] SUMMARY The government launched a Public Transport Subsidy Program to assist low-income commuters and boost economic access. While it helped reduce commuting costs, reports after three years reveal issues like fund mismanagement, poor targeting, and weak monitoring. Critics argue that investing in transport infrastructure would have been a more sustainable solution.….

[Audio] IDENTIFIED ISSUES Inefficient Fund Allocation Ineligible individuals benefited Weak Monitoring No system to track or evaluate beneficiaries Fund Mismanagement Possible corruption or lack of transparency Short-Term Focus No sustainable or long-term infrastructure support.

[Audio] Analyze the Expenditure Approach Classification of Public Transport Subsidy Program Current Expenditure and Direct Transfer Payments of National Government -This is a type of expenditure that is made on a day-to-day government operation that aims to provide immediate support to its targeted beneficiaries. -It does not result in the government purchasing of goods/services for its own use, but rather provides transfers or subsidies to the public..

[Audio] ✅ Evaluating Effectiveness Met Immediate Objectives – Reduced transport costs for low-income commuters. Stimulated Economic Demand – Encouraged mobility and spending. Promoted Social Equity – Improved access to work and education..

[Audio] Evaluating ❌ Efficiency & Sustainability Fund Mismanagement – Weak financial controls. Poor Monitoring – No tracking of program outcomes. Short-Term Focus – No lasting improvements. Fiscal Sustainability Issues – Continuous funding required without long-term plan..

[Audio] 📊 Conclusion: Was it Efficient, Effective, and Sustainable?.

[Audio] Tiered/Conditional Subsidies Prioritize vulnerable groups. Improve Transparency Public reports and citizen feedback channels. Strengthen Targeting Means-testing, ID linking, digital vouchers. Invest in Infrastructure Guide development with data from subsidy usage. Enhance Monitoring Real-time systems, audits, feedback loops. Sales Stat 1 (Red Value) Stat 2 (Grey Value) Stat 3 61 39 Sales Stat 1 (Red Value) Stat 2 (Grey Value) 82 18 Sales Stat 1 (Red Value) Stat 2 (Grey Value) 60 40 Sales Stat 1 (Red Value) Stat 2 (Grey Value) 35 65 Sales Stat 1 (Red Value) Stat 2 (Grey Value) 35 65 RECOMMENDATIONS.

[Audio] Alternative Approaches Invest in Non-Motorized Transport Infrastructure Supports walking and cycling, which are cost-effective for short commutes Transport Vouchers Limits the subsidy to specific uses and reduces misuse Public-Private Partnerships (PPPs) Collaborate with private sector operators to expand and manage transport services under regulated agreements..

[Audio] PUBLIC EXPENDITURE Critical Reflections. [image].

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[Audio] Reference Fiscal Policy and Administration By: Ariel D. Pineda, Ph.D., CPA, CrFA.