A comparison between Strategic Performance-Based Budgeting (SPBB) and Zero-Based Budgeting (ZBB)

Abstract

          This academic article aims to conduct a comparative study of two principal budgeting systems: Strategic Performance-Based Budgeting (SPBB) and Zero-Based Budgeting (ZBB). The objective is to analyze the advantages, disadvantages, and potential outcomes of adopting these systems as frameworks for the consideration of the Draft Annual Budget Appropriation Act for the fiscal year 2026.
          The national budget serves as a vital instrument for the government in driving public policy, national development, and the allocation of limited resources. The current budgetary context presents several challenges, including the rising share of fixed expenditures, persistent fiscal deficits, and the pressing need to enhance the efficiency of public spending.
          SPBB is a budgeting system that links resource allocation (budgeting) to strategic national goals and performance outcomes. The SPBB process begins with the formulation of national vision and strategy, which are then translated into goals at the ministry, department, and agency levels. This is followed by the development of programs/projects and the establishment of clear indicators for outputs and outcomes.
         Both SPBB and ZBB have their respective strengths and weaknesses. However, when considered in conjunction with the Draft Budget Act for 2026, SPBB is deemed more appropriate as the primary framework due to its alignment with the current direction of public sector reform. Therefore, it is recommended that the government and the Bureau of the Budget adopt SPBB principles to define clear and measurable strategic objectives. Additionally, ZBB principles should be employed as a tool for reviewing and eliminating unnecessary budget items, particularly within fixed expenditures. It is also proposed that efforts be made to build understanding among public agencies regarding performance-based budgeting, emphasizing the importance of post-expenditure monitoring and evaluation to ensure that intended outcomes are achieved.