Based on this performance evaluation there are three lessons. First, efficient public financial management (PFM) systems are important to ensure timely disbursements. While the Philippines has made progress in PFM reform, it clearly needs to do much more to address the low disbursement rates typical in the first semester of each year. Measures implemented in 2009 helped to improve disbursements. The government is addressing these and in February 2011 announced its PFM roadmap. Second, the Philippines budget does not have automatic stabilizers that would allow for stronger countercyclical spending. The Conditional Cash Transfer (CCT) program could become an automatic stabilizer. The Comprehensive Livelihood and Emergency Employment Program (CLEEP) was successful in boosting temporary employment in 2009. However, it is unknown to what extent CLEEP displaced workers. The government should consider reviewing lessons learned from CLEEP and look at the feasibility of converting it into a minimum employment guarantee scheme (MEGS) that could be scaled up in subnational regions during economic and or natural disasters. Third, the fiscal stimulus package was successful because it included a mix of measures - social spending and labor intensive, small-scale infrastructure projects - and because effective and regular monitoring and reporting mechanisms were in place.
Countercyclical Support