MODULE 7: Philippine Government Budgeting Process

The Budget Process

Reflects the close interplay of political and economic factors and pressures.

Article VII, Sec. 22

The President has exclusive right to propose a budget

Article VI, Sec. 25

(11) Congress can only reduce or reallocate appropriations in the proposed budget

(2) The previous year's budget is automatically "re-enacted" if the budget is not passed prior to the start of the fiscal year.

(3) The President can augment any appropriations from savings in other appropriations.

Article VI, Sec. 27

The President can use a line-item veto.

The 4 Phases of the Budget Process

1. Budget Preparation

2. Budget Authorization

3. Budget Execution & Implementation

4. Budget Accountability and Review

Budget Preparation

(1) Determination of overall economic targets, expenditure levels, revenue projection and financing plan (Paper on Budget Strategy)

(2) Issuance of Budget Call by DBM; Budget hearings; Presentation of proposed budget levels of agencies to DBCC for approval

Main Actors of Budget Preparation

Development Budget Coordination Committee (DBCC), government offices, DBM, President

President and the Cabinet

Review and approval in Budget Preparation Phase

House of Representatives (Appropriation Committee)

First Stop of Budget Authorization

General Appropriations Bill

Term for the amended budget proposal presented to the HOR body

In Budget Authorization phase, the president submits ______ supported by _______ and President's _______ to Congress.

the Budget of Expenditure and Sources of Financing (BESF), supported by National Expenditure Program (NEP) and President's Budget Message

Senate Finance Committee

conducts review while budget hearings are ongoing at the HOR

Bicameral Conference Committee

finalizes the General Appropriations Bill

The Constitution provides that "....the general appropriations law for the preceding year shall be deemed re-enacted...," if...

the Congress fails to pass the Bill...

The President is deemed to have approved it after the lapse of 30 days.

In Budget Authorization, If the President chooses not to act on it...

gathering 2/3 votes in each House

Congress may override the veto by...

In Budget Execution & Implementation phase, there are additional budget concepts such as...

a. Continuing Appropriations

b. Automatic Appropriations

c. Special-Purpose Funds/Lumpsum Appropriations

Continuing Appropriations

Appropriations available to support for a specified purpose or project, such as multi-year construction projects...

Automatic Appropriations

One-time legislative authorization to provide funds for a specified purpose, for which the amount may or may not be fixed by law...

Special Purpose Funds

Appropriations in the GAA provided to cover expenditures for specific purposes for which recipient departments/agencies have not yet been identified during budget preparation.

Work and Financial Plans

Under the elements of Budget Execution, what will be the basis of issuances of quarterly Advice of Allotments and funding requirements?

Elements of Budget Execution

1. Work and Financial Plans as basis of issuances of quarterly Advice of Allotments

2. Monitoring and Reviewing government's fiscal position

3. Making sure that funds are available to support agency functions and projects.

Agency Budget Matrix-Special Allotment Release Order (ABM-SARO System)

has been abolished in 2014...

Reasons for Adjustments in Budget

- Enactment of new laws

- Adjustments in macroeconomic parameters

- Change in resources available

Issues in Budget Execution

low absorptive capacity of departments/agencies, long and meticulous procurement process, and underspending

Supreme Court Decision on DAP

President's authority to augment cannot cross borders.

New definition of savings under the 2015 GAA

Savings can be declared for projects mid-year, not at the end of the year

Executive Order 91 s. 2019

Shift from Obligations-Based Budgetting to Cash-Based Budgetting. Disbursements should be made within the eyar. Unused allotments after the end of the fiscal year will revert back to the National Treasury.

Budget Accountability

Management's review of actual performance or work accomplishment in relation to the work targets of the agency.

Accountability to Citizens and Civil Society

Elections, Galing Pook and DILG, Watchdogs like Social Watch, Bantay Lansangan

Congressional Oversight

Aid of Legislation, Blue Ribbon Committee