Investment Programming

PROGRAMMING

Professor
Jo B. Bitonio

DM 211
Project Development
and Management

Presented by:
Sheryle A. Domingo
MDM Public Mgmt.

To begin with the presentation, let us

review how investment

programming is related to
Development Planning Process and
Strategic Planning Process Model

DEVELOPMENT PLANNING MODEL HAS 8
STEPS

4.

Situational analysis
Goal/ objective/ target setting
Policy/ strategy formulation
Program/ project identification

5.

Investment programming

1.

2.
3.

6.
7.
8.

Budgeting
Implementation and monitoring
Evaluation and plan update

Feedback loop

Situation
Analysis

Policies
Strategies

Goals
Objectives

Targets

Implementation and
Monitoring

Investment
Programming

Program
Project

Evaluation

Budgeting

and Plan
Update

Identification

Project
Preparation

Studies
researches

Programming
Planning

Implementation
Budgeting

Figure 2. Development Planning Process Model (NEDA, 2001)

Evaluation

Steps in Strategic Planning Process Model

a. Organizing and staffing
b. Training

a. External environment

b. Internal organization
c. SWOT Analysis
d. Strategic Planning framework

Strategic Planning Process Model

Outcome
Effect
Impact
Evaluation
Plan
Update

Organization
And
Staffing

Implementation

Environment
Scanning

Vision

Program /
Project
Identification

Policy
Strategy
Formulate

Training

Investment
Programming

External
SWOT

Input

Framework

Mission
Goals
Objectives
Targets

Process

Budgeting

Project
Preparation
Internal

Output

Source: Miclat (1997)

INVESTMENT PROGRAMMING
- Is the process of rational listing of programs and
projects planned to be undertaken within a given time
frame for the purpose of enhancing the process of
asset generation and capital accumulation for some
desired future benefits for the institution
- Entails a systematic, identification, preparation,
selection, scheduling or even phasing of programs and
projects given the scarce resources available.
www.openuni-clsu.edu.ph/openfiles/.../investment_programming.doc accessed 2/4/2014

INVESTMENT PROGRAMMING
The investment program is the basis for
programs and projects that are considered
or included in the preparation of the annual
plan corresponding budget estimates
(Miclat, 2005).
www.openuni-clsu.edu.ph/openfiles/.../investment_programming.doc accessed 2/4/2014

http://www.slideshare.net/jobitonio/ilocos-regional-development-plan-20112016

The 2011-2016 PIP shall serve as:
(a) an instrument to tighten the planning, programming,
budgeting and monitoring and evaluation linkages;
(b) basis for public sector resource allocation and for pipelining
public sector PAPs for processing at the Investment
Coordination Committee (ICC)/NEDA Board (NB);
(c) Basis in monitoring public investment performance in terms
of achieving the goals and targets under the PDP/RM pursuant
to AO 25 s, 2011
http://www.neda.gov.ph/?page_id=1231 –accessed 2/6/2014

The PIP contains PAPs to be implemented by the NG,
GOCCs, GFIs and other offices and instrumentalities
within the medium-term regardless of financing but
which indicates, nonetheless, sources of funding
whether purely NG, GOCCs, GFIs, ODA grants, publicprivate partnerships, including joint ventures, or from
local government units (LGUs) for their counterpart in NG
projects. It includes identification of the spatial coverage
of PAPs, including the PDP Chapter and 16 point agenda
being addressed and their objectively verifiable
indicators (OVIs).

EXCLUDED
 recurrent cost on the general operation of the
government, personnel services, relending and/or
guarantee related activities to private institutions, and
other administrative capital expenditures.
 PAPs to be financed purely from LGU revenues and
independent projects of the private sector including
those of non governmental organizations (NGOs)

There are four types of instruments through which a strategic development plan
may be carried out (Miclat, 2005). These instruments are:

1. Government investments and development services to
promote development of the public sector;
2. Government investments and development services to
* 1 & 2 controlled by the
promote development of the private sector;
government and contained in the
investment program

3. Private sector
activities; and

investments

and

other

development

3. Private sector initiative subject to influence by
Government

4. Government policies and regulation affecting public and
private sector development.
4. Supports proposed investments and services
www.openuni-clsu.edu.ph/openfiles/.../investment_programming.doc -accessed 2/4/2014

SPECIFIC TYPES OF INVESTMENTS IN
INVESTMENT PROGRAM
1. Capital expenditures/ outlay.
Capital expenditures require physical facility
construction and asset acquisition
An amount spent to acquire or upgrade productive assets (such
as buildings, machinery and equipment, vehicles) in order to
increase the capacity or efficiency of a company for more
than one accounting period.
Also called capital spending

http://www.businessdictionary.com/definition/capital-expenditure-CAPEX.html#ixzz2sLXOIuu5 -accessesd2/6/2014

Cont. SPECIFIC TYPES OF INVESTMENTS IN
…….
INVESTMENT PROGRAM
2. Outlays for social and human development
Outlays for social and human development investments
on health, education, counseling, placement as well as physical
infrastructure like academic buildings and laboratory rooms and
administrative buildings and structures.

3. Equity investments and financial and technical
assistance.
These are direct investments of the government and
bilateral or cooperative ventures with private sector like
loans, financing, grants, endowments, etc.

Cont. SPECIFIC TYPES OF INVESTMENTS IN
INVESTMENT PROGRAM
4. Expenditures for project development.
These are expenses for project identification,
environmental and institutional scanning, pre-feasibility
studies, feasibility studies proper and other expenditures
related to and necessary in determining the desirability of a
project.

5. Other expenditures attributable to any of the above
items.
These are recurrent or repetitive expenses for operations
and maintenance of facilities or services resulting from and
directly attributable to the afforested programs and projects.

OTHER TYPES OF
INVESTMENTS
Bonds
 grouped under the general
category called fixed-income securities

 commonly used to refer to any securities that are
founded on debt
When you purchase a bond, you are lending out your
money to a company or government. In return, they agree
to give you interest on your money and eventually pay you
back the amount you lent out.
http://www.investopedia.com/articles/younginvestors/10/what-is-an-investment.asp accessed 2/5/2014

STOCKS
Real Estate

 literally certificates that say you own a portion of a company
which entitles you to vote at the shareholders’ meeting and
allows you to receive any profits that the company allocates to
its owners. These profits are referred to as dividends

Houses, apartments or other
dwellings that you buy to rent
out or repair and resell are
investments

Precious Objects
Paintings, jewelries and other collections

MUTUAL FUNDS

http://www.investopedia.com/university/beginner/beginner5.asp -accessed 2/5/2014

INVESTMENT PROGRAMMING PROCESS
1. Project Identification
In identifying projects, meeting of development needs and
solving problems and constraints are taken into account. The
identification of projects begin with ideas which are believed or
perceived to be effective solutions to development problems
and unsatisfied demands and unmet needs; utilization of
present and potential human physical and financial resources;
and required response to external threats to government
incentives, and to local political and economic pressures such
as growing disparities in the level of development of faculty
and colleges, and among faculty members and non teaching
staff.

Cont.

INVESTMENT PROGRAMMING PROCESS

2. Project Integration
 refers to the unification of various sets of programs, projects
and activities in the institution to achieve efficiency,
effectiveness, unity, cohesiveness, and complementarily.
Uses the techniques Sanitization and Augmentation

a. Sanitization


programs and projects are screened, evaluated. Modified,
and eliminated considering the factors of redundancy,
impracticality, undesirability or inefficiency in relation to the
goals and objectives of the strategic plan.

b. Augmentation
 Refers to adding or increasing potential and viable project
ideas as well as modifying proposed programs, projects
and activities in order to better attain the specific target of
the strategic development plan.
 Aims to achieve maximum possible economic efficiency.
 Identified additional programs and projects must be those
considered critical, supplemental, supportive, and
innovative


Cont. INVESTMENT PROGRAMMING PROCESS

3. Project Packaging
 Refers to the combination of mutually reinforcing
investments from different sectors and agencies required to
achieve common development.
Mutually reinforcing simply means that the combined
benefits of two or more objectives will be larger than the sum
total of benefits of these projects if they are implemented
separately

Each development package shall have as its focus a
development objective and the geographic unit to which the
objective is directed or aimed.
Project components can be derived from:
A. The goal and objectives of the strategic plan which are
disaggregated into sectoral or sub-sectoral levels;
B. Project ideas from the local level which originate from the
recognition and analysis of unsatisfied needs, constraints
or potentials;
C. A combination of the two.

Cont. INVESTMENT PROGRAMMING PROCESS
4. Project Prioritization
With scarce capital resources, it is normally not possible
to implement at the same time all programs and projects
which have been identified, screened, and packaged. The
logic of investment programming lies in the task of matching
the requirements of proposed investment projects with
expected available financial resources over a specified
timetable.
 process for determining which projects will be scheduled
for implementation ahead of others.

COMMON METHODOLOGIES IN
PRIORITIZATION
1. Problem structure approach
The project which addresses the problem identified as
the most significant obstacle to development is
considered.
2. Supply and demand projection.
By extrapolation and use of coefficient through time and
space, areas with larger supply and demand gap are
given priority.

COMMON METHODOLOGIES IN
PRIORITIZATION
3. Weighted ranking indicators and goal matrix systems
Any of the systems of ranking projects involving
the use of weighted indicators and goal is applied.
4. Economic profitability indicators.
The economic profitability or desirability indicators
like cost-benefit ratio (CBR), net present value (NPV),
internal rate of return (IRR) can be used (NEDA, 1993)

TOOLS IN DEVELOPING THE
PRIORITIZATION APPROACH
1.Financial
Viability
(Financial &
Economic
Returns)

6 Relevance
to
Productivity

2.Social and
Political
Acceptability

7
Environmental

Implications

3.Connectivity

to
National
Policies

4.Implement
ation

8 Feasibility
of Inter-local
Cooperation

5.Number of

9 Functionality
(Utility and
Use)

Capability

Beneficiaries

and Social
Impact

http://www.jmc2007compendium.com/Tools-in-Developing-the-Prioritization-Approach.php -accessed 2/6/2014

CRITERIA FOR PRIORITIZING PROJECTS
CATEGORY
Urgent

GENERAL CRITERIA
Projects that cannot be reasonably postponed
Projects that would remedy conditions dangerous to
public health, safety and welfare
Projects needed to maintain critically needed programs
Projects needed to meet emergency situations

Essential

Projects required to complete or make usable a major
public improvement
Projects required to maintain minimum standards as part
of ongoing program
Desirable self-liquidating projects
Projects for which external funding is available


CRITERIA FOR PRIORITIZING PROJECTS
CATEGORY
Necessary

GENERAL CRITERIA
Projects that should be carried out to meet clearly identified and anticipated
needs
Projects to replace obsolete or unsatisfactory facilities
Repair or maintenance projects to prolong life of existing facilities

Desirable

Projects needed for expansion of current programs
Projects designed to initiate new programs considered appropriate for a
progressive community

Acceptable

Projects that can be postponed without detriment to present operations if budget
cuts are necessary

Deferrable

Projects recommended for postponement or elimination from immediate
consideration in the current LDIP
Projects that are questionable in terms of over-all needs, adequate planning, or
proper timing


References:
http://www.jmc2007compendium.com/Tools-in-Developing-the-PrioritizationApproach.php -accessed 2/6/2014
www.openuni-clsu.edu.ph/openfiles/.../investment_programming.doc -accessed
2/4/2014
http://www.businessdictionary.com/definition/capital-expenditureCAPEX.html#ixzz2sLXOIuu5 -accessesd2/6/2014
http://www.investopedia.com/university/beginner/beginner5.asp -accessed
2/5/2014
http://www.investopedia.com/articles/younginvestors/10/what-is-aninvestment.asp accessed 2/5/2014

Investment Programming

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