Investment Programming By: Lloyl Y. Montero

INVESTMENT PROGRAMMING
By: Lloyl Y. Montero

Investment programming is the process of rational listing of programs and projects
planned to be undertaken within a given time frame for the purpose of enhancing
the process of asset and capital accumulation for some anticipated future benefits.
The investment program serves as the basis for programs and projects that are
considered in the preparation of the annual action plan and corresponding budget
estimates.
Generally, there are 4 types of instruments necessary to carry out a strategic
development plan. These are:
1. Government investment and development services to promote development
of the public sector;
2. Government investment and development services to promote development
of the private sector;
3. Private sector investments and other development activities; and
4. Government policies and regulation affecting public and private sector
development.
The more specific types of investments contained in the investment program are:
1.
2.
3.
4.
5.
Capital expenditures
Outlays for social and human development
Equity investments and financial and technical assistance
Expenditures for project development
Other expenditures attributable
INVESTMENT PROGRAMMING PROCESS

Step 1. Project identification
Project identification starts from project ideas which are perceived to
be effective solution to development problems and unsatisfied demands and needs.
Step 2. Project integration
This is the unification of various sets of programs, projects and
activities in the institution to achieve efficiency, effectiveness, unity, cohesiveness
and complementarity
Step 3. Project packaging
It pertains to the combination of mutually reinforcing investment from
different sectors and agencies required to achieve a common development
objectives.
Step 4. Project Prioritization
The process for determining which projects will be scheduled for
implementation ahead of others. The more common methodologies in prioritization
are:
1. Problem structure approach The project which addresses the problem
identified as the most significant obstacle to development is considered.
2. Supply and demand projection Areas with larger supply and demand gap
are given priority.
3. Weighted ranking indicators and goal-matrix system any of the system for
ranking of projects involving the use of indicators and goals is applied.
4. Economic profitability indicators What is the cost-benefit ratio, the net
present value, internal rate of return?
BUDGETING
Budgeting is defined as the process of allocating scarce financial resources for some
programs, projects, services and activities to enable the organization to carry out
stated goals and objectives.
APPROACHES IN BUDGETING:
1. Line-item Budgeting It gives emphasis on listing of objects for itemized
expenditure-personnel, supplies, equipment-without much regard for the
purpose of programs or projects for which such items are proposed.
2. Performance Budgeting Objects of expenditures are grouped into categories
related to the specific services or products an agency produces, the
development of products cost measurements of activities or services so that
managers can measure the efficiency or productivity of spending agencies.
3. Planning, programming and budgeting system The system requires agency
managers to identify the program objectives, develop measuring program
output, calculate total program cost over the long run, prepare detailed multiyear program and financial plans and analyze the cost and benefits of
alternative program design
4. Zero-Based Budgeting In these approach it requires every agency manager
to justify his entire budget systems in detail and shifts the burden of proof to
each manager why he should spend any money. It calls for the analysis of all
budgetary expenditures to answer effectiveness in achieving organizational
goals.
THE BUDGET CYCLE IN GOVERNMENT:
The national budget cycle consists of 4 phases, namely:
1. Budget Preparation It involves the formulation of national budget based on
budgetary priorities and activities. An interagency group, the Development
Budget Coordination Committee (DBCC) conducts consultation and studies on
fiscal and financial issues. Then these are submitted to the cabinet and
President for approval. Then after approval by the President, the Department
of Budget and Management (DBM) issues a Budget Call directing the different
agencies to prepare their respective budget proposals in accordance with
approved budget ceilings.
2. Budget Authorization or Legislation This involves the review of the budget
initially by the House of Representatives and followed by the Senate through
consultation and justification by agency heads of their proposals. Conflicting
provisions are worked out and harmonized by a conference committee. Once
common budget bill has been approved by both Houses, it is submitted to the
President for signing.
3. Budget Execution This phase is the implementation of the General
Appropriation Act. The DBM is the implementing arm of the national budget
through the administrative supervision of the President. The DOF, Bureau of
Treasury coordinates with the DBM so that cash releases by the Bureau of
Treasury depended on collected revenues by DOF.
4. Budget Accountability This refers to the review of the agency operating
performance. It compares actual expenditures and performance with planned
expenditures and targets set by the agency.

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INVESTMENT PROGRAMMING

By: Lloyl Y. Montero

INVESTMENT PROGRAMMING PROCESS

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