Thailand’s Medium Term Expenditure Framework (MTEF) The Bureau of the Budget Office of Prime...

Thailand’s Medium Term Expenditure

Framework(MTEF)

The Bureau of the Budget Office of Prime MinisterRoyal Thai Government

SPBBS : The Principle

• Top-down policy driven

• Strategic allocation

• Fiscal discipline

• Effective budgeting

• People oriented

• Deconcentration

• Management flexibility

• Good governance

• Financial disclosure

Policy aspects Management aspects

Good Governance

Elements of SPBBS

Result oriented Strategic Target Ministry Target Output and KPI

Devolution

Medium Term Expenditure Framework - MTEF

Comprehensiveness

Monitoring and Evaluation

Medium TermExpenditure Framework (MTEF)cover both top down and bottom up

estimates:

Macro fiscal projection – to establish budget ceiling based on resources (such as taxes, fiscal policy) and constraints (such as debt, and contingent liabilities), and stating all economic assumptions

Micro baseline projection – to establish baseline expenditures based on existing policies at agency level

Prudent Reconciliation process of top-down and bottom-up projections

MTEF Process (simplified)

5

New sectoral demand for

t+3 (priority/cost

)

Updated cost estimate of

existing policy/program

Sectoral Budget

Preparation

Macro-economic forecastin

g

Fiscal target

Total expenditure setting for multi-

years

Sectoral ceiling

setting for multi-years

Annual budget

formulation

Assumptions

Results from the Processing Modules

Expenditure & Revenue

Stock of Public Debt

Macro- Framework

Endogenous Inputs

Fiscal Sustainability Assessments

Fiscal Sustainability

Macro Economic Assumption

Source : Bureau of the Budget, Bank of Thailand, NESDB

Indicators 2010 2011 2012 2013 2014Real GDP growth (%pa)

7.0 – 8.0

4.0 – 5.0

4.0 – 5.0

4.0 – 5.0

4.0 – 5.0

Inflation Rate growth (%pa)

3.0 – 4.0

2.5 – 3.5

2.5 – 3.5

2.5 – 3.5

2.5 – 3.5

Import growth (%pa)

27.72 10.00 10.00 10.00 10.00

Time deposit rate (%)

0.72 0.78 0.78 0.78 0.78

Time deposit growth (%pa)

-9.78 0.00 0.00 0.00 0.00

Minimum loan rate (%)

5.93 6.00 6.00 6.00 6.00

Loan on private sector (%pa)

6.70 5.00 5.00 5.00 5.00

Bureau of The Budget’s strategy measurement

Minimum Investment

Subsidy

External Borrowing

Internal Borrowing

Personnal Expenditure

Remaining Budgets(Fiscal Space)

Loss fromFIDF

SOEs

Government External

BorrowingProject/Program

Loan

Revolving FundLocal Authority

Fiscal Sustainability F

ramew

ork

To be accordance with human

power improvement

Commitment Expenditure

Education Public health

Investment

Social network

Tourism

Infrastructure

The measurement

of budget allocation is essential

Fiscal Sustainability Framework

กู้��ใน

เงิ�นอุดหนน

เงิ�นเด อุน/ค่�าใช้�จ่�ายบุค่ลากู้ร

กู้ารลงิทุนขั้��นต่ำ��า

Remaining Budgets





Remaining Budgets





Remaining Budgets

External

Borrowing

Internal Borrowi

ng

Subsidy and Funds

Personnel Expenditure

Minimum Investment

Remaining Budgets

Public Debt / GDP < 60%

Debt Service / Budget < 15%

Balance Budget

Key FiguresFiscal Year 2011 2012 2013 2014

Revenue Projection Unit : Millions of Baht

On Budget Basis 1,793,569 1,934,549 2,100,942 2,281,075Expenditure Projection Unit : Millions of Baht

Expenditure 1,546,305 1,383,839 1,646,737 1,640,1681.Current Expenditure 1,153,243 1,170,260 1,199,053 1,219,469

(% of total) 72% 66% 62% 57%1.1 Personal Exp. 502,658 532,518 564,169 597,7191.2 Operating Exp. 189,292 189,292 189,292 189,2921.3 Interest Payment 118,171 112,718 101,378 75,1581.4 Commitment Exp. 31,823 9,158 3,023 5951.5 Revolving Fund 146,506 151,812 156,816 161,8781.6 Transfer and Subsidy 164,793 174,763 184,375 194,826

2. Capital Expenditure 236,905 186,294 183,729 194,317(% of total) 15% 11% 9% 9%

2.1 Subsidy Local Authority 141,436 158,820 174,659 192,5312.2 Commitment Exp. 95,469 27,473 9,070 1,786

3.Principle Expenditure 156,157 27,285 263,955 226,382(% of total) 10% 2% 14% 11%

Fiscal Space* 247,264 550,710 454,205 640,907

TAX

Indirect Tax

Direct Tax

PIT

PTT

EXCISE

VAT

Import Duty

SBT

CIT

Revenue Module

Domestic

Borrowing

Estimation

Projection

SOEs domestic debt

Govt domestic debt

Total domestic debt

Domestic Borrowings

External Borrowing

Sensitivity Analysis on Interest Rate and Exchange Rate Query Function

Exchange Rate Converting

External Borrowings

Assume Disbursement Patterns : ADiPs 22 branch

External Borrowings

สาขั้าเกู้ษต่ำรกู้รรม

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0%0%0%

10%

30%

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10%

20%

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40%

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30%

10%

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10%

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สาขั้าพล�งิงิาน

20%

30%

10%

0% 0% 0%

0%

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สาขั้าพ�ฒนาช้นบุทุ

20%

30%

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0% 0% 0%

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20%

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สาขั้าทุ(�อุย��อุาศั�ยและกู้ารพ�ฒนาเม อุงิ

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15%

0%

10%15%

5% 10%

0%

10%

20%

30%

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สาขั้ากู้ารศั-กู้ษาและกู้ารฝึ/กู้อุบุรม

10%

25%

15%

0% 0% 0%

0%

10%

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20%

0%0%0%

10%

30%

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10%15%20%25%30%35%40%45%50%


Data-baseExternal Debt

Disbursement Interest Payment Principle Payment

Health fundStudent

Loan

Revolving Fund

Revolving Funds

Universal Health Care

Fiscal Year 2011 2012 2013 2014

Budget Allocation for Health Care Policy

122,158

130,530

139,429

148,883

Deducted at Government Procurement

34,658 36,217 37,847 39,550

1) Expenditure on Salaries of government Officers, affiliated with the Ministry of Public Health

32,921 34,403 35,951 37,568

2) Expenditure on Salaries of government Officers, not affiliated with the Ministry of Public Health

1,679 1,754 1,833 1,916

3) Others ๆ 118 123 128 134

Budget Allocation for Revolving fund for Health Care

87,500 94,313 101,582

109,332

FundsFunds 2011 2012 2013 2014

1 Revolving Fund for Health Care 87,500.16 94,312.53

101,581.

73

109,332.

25

2 Student Loans Fund 25,407.45 23,901.14

21,636.6

0

18,947.8

9

3 Income Contingent Loan Fund 0.00 0.00 0.00 0.00

4 Fund for Farmer Rehabilitation and Development 2,499.10 2,499.10

2,499.10

2,499.10

5 Fund for Small and Medium Enterprises Promotion 615.00 615.00

615.00

615.00

6 Fund for Promotion of Social Security 30.00

30.00

30.00

30.00

7 Fund for National Sports Development 250.00

250.00

250.00

250.00

8 Fund for Revitalization of the Disabled 50.00

50.00

50.00

50.00

9 Fund for Senior Citizens 100.00 100.00

100.00

100.00

10 Land Readjustment Fund 60.00 60.00

60.00

60.00

11 Fund for Children Protection 60.00 60.00

60.00

60.00

12Fund for Restructuring of Agricultural Production to Improve Competitiveness

100.00 100.00

100.00

100.00

13 Fund for Political Party Development 200.00

200.00

200.00

200.00

14 Fund for Criminal Investigation 500.00 500.00 500.00

500.00

15 Other Funds 17,336.00 17,336.00

17,336.0

0

17,336.0

0

Local Authorities

Revenue Sharing

Subsidy from the Budget

Gov’t Revenue

L/A Rev Previously 25.2%

Government Collected

Self Collected

Local Authority Revenues

Type of Revenues 2011 2012 2013 2014

Revenue collected by Local Administrative Organization

39,833.59 43,360.15 47,201.05 51,384.

32

Revenue from Local Taxes collected by Government

148,484.76

157,725.38

167,779.16

178,717.68

Revenue sharing from government Taxes

80,982.21 93,526.31

107,442.80

122,892.69

Revenue from Subsidies and duties transfer

194,674.34

215,829.45

239,524.61

266,085.22

Total of Local revenues 463,974.89

510,441.29

561,947.61

619,079.92

Commitment Budget

and outyears

Personnel Expenditure

2011 2012 2013 2014

Personnel Expenditure 502,658

532,518

564,169

597,719

- Wage and Salary 484,611

513,388

543,891

576,224

- Wage for temporally 1,515 1,606 1,702 1,804

- Benefit for government employee 16,532 17,524 18,576 19,690

Lessons Learned

1. To forecast the outyear budget (year 2-4) need both unit cost and output: lacking of quantitative indicators make the output forecast a difficult task.

2. Understanding of government agencies3. The rolling MTEF make the forecast less

important. 4. Dependence on external economy5. Political Stability

Thailand’s Medium Term Expenditure Framework (MTEF) The Bureau of the Budget Office of Prime...

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