revenue

government revenue

• the money collected by the government from different sources to finance its operations, programs, and public services.

• It is essential in public finance because it provides funds for

public needs and national development.

major sources of govt revenue

1. tax revenue

2. non tax revenue

3. grants and other receipts

tax revenue

income collected through taxes

non-tax revenue

income from govt fees, charges, and other non-tax sources

grants and other receipts

funds received through grants and other separately classified receipts

subsidies

• financial support provided by the government

  to individuals or businesses to meet particular economic and

  social goals.

• primary objective behind the implementation of

  subsidies is to decrease the production or consumption cost.

subsidies vs other types of govt assistance

Subsidies generally focus on reducing costs or supporting specific

economic activities, while other forms of government assistance often focus on

addressing people's needs and improving their welfare.

ex: agricultural subsidies, fuel subsidies, electricity subsidies

scholarships, livelihood assistance, social welfare

production subsidy

This type of subsidy is provided in order to encourage the production of a

product.

consumption subsidy

This happens when the government offsets the costs of food, education,

healthcare, and water.

export subsidy

An obvious fact is that a country or state earns from its exports and exports help to balance its economy.

employment subsidy

This incentive is given by the government to companies and organizations in

order to enable them to provide more job opportunities.

government revenue

the total money collected by a government from taxes, fees, and other non-tax sources to fund public services, infrastructure, and operations.

budget appropriations

The government allocates public funds to approved programs and services, including subsidies.

GAA

authorizes government agencies to spend these funds for their intended purposes.

national government agencies

government organizations responsible for implementing programs and distributing government support to specific sectors and qualified beneficiaries.

public funds

money collected or obtained by the government and used to finance public programs and services, including subsidies.

• finance subsidies

• improve affordability

• strengthen key industries

department of agriculture

Agricultural assistance for eligible farmers

Support for farming and fuel expenses

energy regulatory commission (ERC)

Electricity Lifeline Rate

Discounts for qualified low-income households

Department of Transportation (DOTr)

Fuel subsidy programs for qualified PUV drivers and operators

Assistance with fuel and operating costs

economic and social effects of subsidies

• assistance to low-income households

• support for agricultural production and economic activity

• effects on prices, consumption, and household purchasing power

• potential market distortions and inefficient resource allocation

limited government resources

Budget constraints may prevent the government from assisting everyone

who qualifies for support.

incorrect targeting of beneficiaries

Assistance may reach ineligible individuals while some qualified

households are excluded.

delays in the distribution of assistance

Administrative problems and verification procedures can delay the delivery of

financial aid or essential goods.

transparency and accountability concerns

Weak monitoring may make it

difficult to determine whether funds are

distributed and used properly.

evaluation of subsidy programs

• effectiveness in reaching beneficiaries

• cost-effectiveness and proper usage of public funds

• fairness and transparency

• possible improvements

Effectiveness in Reaching Intended Beneficiaries

Measures whether assistance reaches the people or sectors that need it most.

Cost-Effectiveness and Proper Use of Public Funds

Examines whether the benefits of a program justify its costs and whether funds are used efficiently.

Fairness and Transparency in Implementation

Checks whether eligibility rules are applied consistently and distribution processes are clear.

Possible Improvements to Philippine Subsidy Programs

Includes updating beneficiary databases, improving digital payment systems, and strengthening monitoring and public reporting.

public goods

commodities or services that markets fail to allocate efficiently due

to non-excludability and non-rivalry. serve as socioeconomic

equalizers across the Philippines' 7,000+ islands.

basically something that is made to be available for everyone through taxation

disaster response

public health

national security

cultural identity

non-excludability

it is impossible, or prohibitively expensive, to prevent individuals from accessing or benefiting from it once it has been produced.

non-rivalrous

goods that can be consumed by the people and the community without affecting the availability of the same goods to others.

For example, when a concert or government office decides to put on a fireworks display, everybody can watch it, making the good non-rivalrous because everyone who sees it can enjoy exactly the same fireworks display.

classification of goods

1. private good

2. club good

3. common-pool resource

4. public good

private good

They are rival and excludable, so a firm can charge a price, and buyers reveal how much they value the good by paying it. Most of what you buy falls here.

the number of people who can use them is limited and, once used, they are less plentiful or unusable for others. They include goods such as parking spaces, food, cars, and clothing.

club good

non-rivalrous, so they’re not in danger of being used up or defiled by one or more person’s use, up until the point where continued use causes the use of the goods to become congested. However, they are excludable, which means that people can be denied access to them or use of them.

satellite TV, private parks, and movie theatres.

common-pool resources

Goods, such as timber, coal, or fish stock, that are non-excludable and rivalrous, meaning their use by some makes them then unavailable or less available for use by others (you can’t eat a fish more than once).

free-rider

people want to use a particular good without paying for the good. Free riders want to enjoy the benefits of such goods while hoping that someone else will pay for them or help with their maintenance.

market failure and public goods

Refer to a situation where private businesses may not provide enough public goods because they cannot easily collect payments from everyone who benefits.

the government helps provide and finance them to ensure that society's needs are met.

public service delivery

the process of the government delivering vital services and

programs to the citizens to fulfill their needs and demands.

improves quality of life, protects citizens’ rights, and supports social and economic development

types of public services

• education

• healthcare

• social welfare

• local government services

• public safety and sanitation

public service delivery process

1. identify community needs

2. planning and budgeting

3. allocate and release public funds

4. implement services

5. monitor and evaluate

improving public service delivery

• improve fund allocation and monitoring

• simplify govt processes

• encourage citizen participation

• strengthen accountability

• evaluate actual results

Build-Operate-Transfer (BOT):

the private partner builds and operates the facility for a period, then transfers it to government. Example: the NLEX-SLEX Connector Road

Build-Transfer-Operate (BTO):

ownership passes to government once built, and the partner then operates it. Example: the Manila Bay-Pasig River-Laguna Lake Ferry Project.

Rehabilitate-Operate-Expand-Transfer (ROET) and similar schemes:

the partner upgrades and runs an existing facility. Example: the NAIA project (DBM, 2024).

Operations and maintenance (O&M) contracts and joint ventures:

the partner runs a publicly built facility, such as rail lines, or shares ownership and returns with government.

public-private partnership

a long-term contractual arrangement in which a private company takes on part of the financing, construction, operation, or maintenance of a public infrastructure project or service, while the government remains responsible for the public interest in it. The main purposes are to tap private capital and expertise, ease pressure on the national budget, and deliver projects faster and more efficiently.

planning

• DBM prioritizes infrastructure proposals under the 3-Year Rolling Infrastructure Program (TRIP) and Program Convergence Budgeting

• projects are evaluated and included in the national budget based on govt priorities

Procurement

• agencies identify the project and secure the necessary budget appropriation

• construction contracts are put out for bidding

• a qualified contractor is selected to carry out the project

Implementation

• the selected contractor begins construction

• govt agencies supervise project completion and monitor implementation

traditional procurement

government pays a contractor from appropriated funds, owns and operates the asset afterward, and carries most risks

PPP

private partner usually provides much of the financing,

remains involved for decades, and receives payment tied to use or

performance.

how PPP works

1. project identification and feasibility studies

2. selection of private partners

3. financing and construction

4. operation and maintenance

5. risk allocation, monitoring, and contract management