Sharon Banagodos-Millan - Managing Public Finance

Module A: Foundations of Public Finance

Chapter 1: The Public Sector in the Global Economy

Key Theory: Public goods, externalities, and the Musgrave Trio.
Global Insight: Contrasting the "Welfare State" of Scandinavia with the "Developmental State" model of East Asia.
Philippine Context: The role of the Development Budget Coordinating Committee (DBCC) in setting macroeconomic targets and the Philippine Development Plan (PDP) as a blueprint for inclusive growth.

Chapter 2: Macro-Fiscal Frameworks and Forecasting

Core Competency: GDP forecasting, inflation targeting, and debt sustainability analysis (DSA).
Case Study: New Zealand vs. The Philippines.

New Zealand: The "Fiscal Responsibility Act" and transparency.
Philippines: The Medium-Term Fiscal Program (MTFP). How the Philippines managed to achieve investment-grade credit ratings through fiscal consolidation and the "Two-Tier Budget Process" which separates baseline budgeting from new spending proposals.

Chapter 3: Political Economy of Finance

Analysis: The "Common Pool Resource" problem and interest group politics.
Case Study: The Philippine TRAIN Law (Political Economy of Reform).

Context: The Tax Reform for Acceleration and Inclusion (TRAIN) Act (RA 10963).
The Trade-off: Legislators lowered personal income taxes (populist move) while raising excise taxes on fuel, cars, and sugar-sweetened beverages (unpopular move) to fund the "Build Build Build" infrastructure program.
Lesson: How political capital is spent to secure long-term fiscal space despite inflationary pressures.

Module B: Budgeting Systems and Reform

Chapter 4: Evolution of Budgeting Models

Models: Line-Item, Zero-Based, and Performance-Based Budgeting.
Global Context: New Zealand’s "Output Budgeting."
Philippine Case: Annual Cash-Based Appropriations (ACBA).

The Shift: Moving from an "obligation-based" budget (where agencies had 2 years to spend) to a "cash-based" budget (limiting implementation to 1 year) to cure underspending and force faster delivery of public services.
Impact: How this reform pressures agencies to improve procurement planning and execution discipline.

Chapter 5: Participatory Budgeting (PB)

Case Study: Porto Alegre, Brazil. The origin of PB and its redistributive impact.4
Philippine Context: Bottom-Up Budgeting (BuB) and Civil Society Organization (CSO) participation in budget hearings. The role of the Local Government Code in institutionalizing NGO representation in Local Development Councils.

Module C: Revenue Mobilization and Tax Policy

Chapter 6: Principles of Taxation & Health Financing

Theory: Efficiency, Equity, and the "Sin Tax" rationale.
Case Study: The Philippines' Sin Tax Reform (RA 10351).

The "Win-Win": Raising taxes on tobacco and alcohol to reduce consumption (health objective) while earmarking 85% of incremental revenues for Universal Health Care (PhilHealth).
Outcome: Smoking prevalence dropped from 29.7% (2009) to 23.8% (2015), while the Department of Health budget tripled. This is widely cited by the WHO and World Bank as a global best practice.

Chapter 7: Technology and Tax Administration

Global Case: Kenya’s M-Pesa and mobile money taxation.5
Philippine Case: The TRAIN Law's e-Invoicing and fuel marking initiatives to combat smuggling and tax evasion.

Chapter 8: Natural Resource Revenue Management

Case Study: Norway’s Government Pension Fund Global (GPFG).

Lesson: Separating oil volatility from the annual budget via a fiscal rule that limits spending to the expected real return (3%).6
Relevance: Lessons for the Philippines' proposed Maharlika Investment Fund (sovereign wealth fund) regarding governance, independence, and source of capitalization.

Module D: Expenditure Management and Decentralization

Chapter 9: Fiscal Decentralization and Local Finance

Theory: Fiscal Federalism and the assignment of functions.
Major Case Study: The Mandanas-Garcia Ruling (Philippines).

The Ruling: The Supreme Court ruled that the "just share" of Local Government Units (LGUs) must come from all national taxes (including customs duties), not just internal revenue collected by the BIR.
Fiscal Impact: This dramatically increased the National Tax Allotment (NTA) for LGUs by approx. 40%, transferring massive fiscal resources from the center to the periphery.
The Challenge: The "Full Devolution" Executive Order (EO 138) requires LGUs to assume responsibility for services like local infrastructure and health, testing local capacity.

Chapter 10: Integrated Financial Management Information Systems (IFMIS)

Case Study: Rwanda’s SmartFMS. A success story of an in-house developed IFMIS.7
Philippine Context: The Philippines' journey toward a Government Integrated Financial Management Information System (GIFMIS) and the current Budget and Treasury Management System (BTMS).

Chapter 11: Social Protection and Transfers

Global Case: India’s Direct Benefit Transfer (DBT) and Aadhaar.8
Philippine Case: Pantawid Pamilyang Pilipino Program (4Ps).

Mechanism: A Conditional Cash Transfer (CCT) program providing grants to the poorest households conditioned on child school attendance and health checkups.
Analysis: Moving beyond "dole-outs" to human capital investment. Impact evaluation shows increased school enrollment and improved maternal health, despite challenges in leakage and dependency.

Module E: Accountability, Audit, and Evaluation

Chapter 12: Performance Audit and Evaluation

Framework: The PEFA (Public Expenditure and Financial Accountability) Framework.
Application: Reviewing the Philippines' PEFA assessments to identify gaps in budget reliability and external scrutiny.

Module F: Global Development Finance

Chapter 13: Aid, Debt, and Sovereign Finance

Context: Debt Management in Emerging Markets.

Topic: Philippines' debt management strategy—shifting from foreign to domestic borrowing (90:10 mix) to minimize foreign exchange risk, and the issuance of "Retail Treasury Bonds" (RTBs) to tap small investors.