Fiscal Policy

John Maynard Keynes

John Maynard Keynes, foremost economist of the 20th century, urged government to allocate more funds for labor-intensive projects that would give more jobs to

people and reduce unemployment.

The success of this strategy was widely recognized.

Laissez faire (allow to do)

Fiscal Policy

It is concerned with using government spending and tax policies to influence economy.

Government expenditure affect economic growth because these are included in the GNP and GDP.

Fiscal Policy can help solve the problems of unemployment and inflation.

Pork Barrel

a government appropriation, bill, or policy that supplies funds for local improvements designed to ingratiate

legislators with their constituents.

GNP= C+I+G+(X-M)

GNP- Gross National ProductC- Consumption

I- InvestmentG- Government Spending

X- ExportM- Import

UnemploymentIncrease Government Expenditures

Reduce Taxes

Inflation

Reduce ExpendituresIncrease Taxes

National Budget

The national budget is government’s projection of its income and expenditures, based on its activities for a

particular year. It shows how the government spends the people’s hand-earned funds. The government must

efficiently allocate its funds to ensure the growth of the economy and the efficient delivery of public services.

Types of Government Expenditures

Current Operating Expenditures

Capital Expenditures

Categories of Government Expenditures

Economic Services Expenditures

Social Service Expenditures

Security or Defense Expenditures

Public Service Expenditures

Debt Servicing

Region Budget

CAR P 31.7 B

NCR P 129.4 B

I P 49.7 B

2 P 44.8 B

3 P 88.9

4 P 130.2 B

5 P 63.2 B

6 P 74.4 B

7 P 63 B

8 P 56.5 B

9 P 42 B

10 P 48. 1 B

11 P 46.3 B

12 P 43.5

ARMM P 43. 8 B

Department P 1,025 B

Congress of the Philippines P 9.8 B

Office of the President P 2.7 B

Office of the Vice-President P 420. 5 M

Department of Agriculture P 63.7 B

Department of Education P 249.2

State Universities and Colleges P 34.9 B

Department of Foreign Affairs P11.7 B

Department of Health P 40.9 B

Department of Interior and Local Government P 91.7 B

Department of Science and Technology P 10 B

Special Purpose Fund P 980.7BBudgetary Support to Government Corporations (BSGC) Allocations to Local Government Units Calamity Fund Contingent Fund Department of Education – School Building Program E-Government Fund International Commitments Fund Miscellaneous Personnel Benefits Fund (MPBF) Pension and Gratuity Fund (PGF) Priority Social and Economic Projects Fund (PSEPF)1

 Priority Development Assistance Fund Tax Expenditures Fund Debt Service Fund-Interest Payment

P70.8 B

P319.8 B

P7.5 B

P1 B

P1 B

P1 B

P2.6 B

P70.1 B

P98.7 B

P22.4 B

P24.9 B

P26.9 B

P333.9 B