ABSTRACT
This study assessed the effectiveness of Performance-Informed Budgeting (PIB) in the Municipality of Tubungan, Iloilo, focusing on transparency, accountability, and resource efficiency, identifying implementation challenges, and evaluating performance delivery. A descriptive research design employing both quantitative and qualitative approaches was utilized. Using a descriptive design with quantitative and qualitative approaches, data were collected from 100 purposively selected respondents through a structured questionnaire and analyzed using statistical and thematic methods. Findings show “moderate” knowledge of PIB and “partial” to “full” implementation. PIB enhances program alignment, transparency, accountability, and public financial management. However, its full implementation is constrained by challenges such as limited technical skills, funding constraints and implementation delays. Overall, PIB improves local governance, but strengthening capacity building, data systems, and accountability mechanisms is needed for full institutionalization and sustainability.
Keywords: Performance-Informed Budgeting, Local Governance, Public Financial Management, Fiscal Management
INTRODUCTION
Background of the Study
As front line institutions of governance, Local government units (LGUs) are responsible for governing and delivering public services within a specific local area. They play a vital role in improving the lives of their communities by implementing programs and projects that support development goals, such as better infrastructure, education, healthcare and welfare service (Lorenzo et al., 2021). They are also expected to respond efficiently and effectively to the evolving and diverse needs of their communities. Given their proximity to the people, one of their key responsibilities is to allocate resources efficiently to meet the needs of their communities.
Over time, budgeting practices in the public sector have undergone significant changes to promote accountability, transparency, and better alignment between public spending and development priorities. These reforms emphasize not only how much is spent but, more importantly, what outcomes are achieved from public expenditures. However, as the demands on Local Government Units continue to grow, many LGUs face resource limitations that affect the full implementation of their programs and projects (Dela Peña, 2025). From infrastructure and social services to disaster risk reduction, the need for a sound and effective budgeting system has become increasingly important, especially in the context of pursuing sustainable development goals.
As a result, Local government units (LGUs) are now being urged to adopt more strategic approaches to budgeting in order to improve the delivery of services and achieve meaningful development outcomes. In line with this, the Department of Budget and Management (DBM) introduced the Performance-Informed Budgeting (PIB) approach to strengthen the linkage among planning, budgeting, and performance outcomes. This budgeting approach aims to make public expenditure more responsive and accountable by linking budget allocations to measurable results, helping LGUs align their financial decisions more closely with their development objectives.
The Department of Budget and Management (DBM) defines Performance-Informed Budgeting (PIB) as a series of integrated processes designed to optimize the efficiency and impact of public spending. By systematically incorporating performance data into resource management, PIB directly connects funding levels to measurable outcomes.
Initially introduced through National Budget Memorandum No. 117 in March 2013 and first implemented in the 2014 General Appropriations Act (GAA), this approach was established to tighten the alignment between strategic planning and budgetary results. Furthermore, the framework serves to streamline budget presentation while fostering greater transparency and accountability in the distribution of public funds.
Being among the various tools used to manage public resources, Performance-informed budgeting (PIB), has gained attention as an approach that links budget allocation to measurable outcomes. In the context of LGUs, the relevance of Performance-Informed Budgeting becomes even more pronounced as public financial management is vital in fostering economic growth and ensuring efficient service delivery locally. Since they have direct interaction with communities, LGUs are in a special place between connecting national development objectives to local programs that are action-oriented. Unlike traditional budgeting methods, PIB emphasizes the importance of aligning financial resources with performance indicators, thereby promoting accountability and transparency in government spending.
However, despite these intended benefits, the implementation of PIB across LGUs remains uneven. While some LGUs have made significant strides in adopting PIB, others struggle with issues related to technical capacity, data availability, and institutional support. In the Philippine context, available studies tend to focus on specific aspects of local financial management such as budgeting knowledge or fiscal performance rather than comprehensive analyses of PIB implementation (Tayong et al., 2025; Magno et al., 2022). This gap underscores the need for context-specific research that examines the extent of PIB implementation in LGUs, identifies existing challenges, and evaluates its impact on financial management and service delivery.
Unfortunately, according to Megah and Valiant (2025), there is a limited availability of empirical studies that examine the implementation and effectiveness of PIB within LGUs, particularly in smaller or less-resourced municipalities. Much of the existing literature focuses on national government agencies, leaving a gap in understanding how performance-informed approaches function in local governance settings (The Organization for Economic Cooperation and Development, 2025). Such a gap highlights the importance of context-specific research that will not only determine the extent of PIB implementation, but also identify the challenges and the degree to which it has helped in enhancing the manner in which people manage their finances and deliver their services better. Therefore, it is yet to be determined to what degree PIB has been able to attain its goals of enhancing efficiency, accountability, and development outcomes on the local level.
In the case of the Municipality of Tubungan, Iloilo, examining the implementation of Performance-Informed Budgeting is particularly important in order to understand how budgeting practices support local development priorities amid existing resource constraints. A focused assessment can provide insights into the effectiveness of PIB as a tool for enhancing governance and identify areas where improvements may be necessary.
The researcher, being employed as Administrative Assistant III in the Local Government Unit of Tubungan, aimed to assess the implementation of Performance-Informed Budgeting and evaluate its impact on the attainment of their development thrusts. By identifying both the successes and challenges of PIB implementation, this research sought to contribute to the body of knowledge on public financial management and offer recommendations to improve the budgeting processes in LGUs.
see PDF attachment for more information