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Policy Costing and Its Importance in Policymaking, Budgeting, and Oversight

Policy costing or the estimation of the cost of legislative proposals, helps the Congress in performing its core functions of legislation, oversight, and representation. It supports legislators in their decision on which expenditure or revenue measures to prioritize, considering the government’s limited budgetary resources and the proposed policies’ fiscal sustainability. It elevates the quality of policy debates and increases the transparency of government budget data. 

As of June 2023, DBM reported that there are 205 laws with funding deficiencies, of which, 159 have no specified budgetary requirement. The accumulation of unfunded measures not only puts pressure for the government to increase its deficits but also impedes the laws’ intent to provide better services to their supposed beneficiaries. House bills on budget modernization seek to address this problem by requiring a Financial and Budgetary Information Sheet for each expenditure-adding bill. If policy costing is to be considered in the Philippines, there is a need to clearly determine the purpose, extent, and institutional arrangements in preparing policy cost estimates.


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