THE PHILIPPINE

GOVERNMENT
BUDGETING
PROCESS
The Budget Process

 More than a system of procedures and structures

 Both a rigorous technical procedure and a dynamic

(and sometimes controversial) political process

 Reflects the close interplay of political and economic

factors and pressures.
The Budget Process: 4 Phases

Budget
Preparation

Budget Budget
Accountability Legislation

Budget
Execution
I. Budget Preparation
Budget Preparation Phase
 Main Actors: DBCC, government offices, DBM, President

 DBCC: DBM (chair), BSP, DOF, NEDA, OP rep.

 Determination of overall economic targets, expenditure

levels, revenue projection and financing plan (Paper on
Budget Strategy)

 Issuance of Budget Call by DBM

Development Budget Coordinating Committee (DBCC)

Members
Secretary of Budget and Management
(Chair)
NEDA Director-General (Co-Chair)
Executive Secretary
Secretary of Finance Governor of Bangko
Sentral ng Pilipinas Debt National
Servicing Defense

Capital
Personal General Social
Outlay
Services Gov Services

Maintenance Economic
and Other
Operating Services
Expenditures
Budget Preparation Phase
 Budget hearings (DBM technical panels)

 Presentation of proposed budget levels of agencies

to DBCC for approval

 Review and approval by President and the Cabinet

 Submission to Congress by the President of proposed

budget
BUDGET AUTHORIZATION
BUDGET AUTHORIZATION
 President submits Budget of Expenditure and Sources
of Financing (BESF) supported by National
Expenditure Program (NEP) and President’s Budget
Message to Congress

 First stop: House of Representatives (Appropriation

Committee)

 Amended budget proposal is presented to the HOR

body as the General Appropriations Bill
BUDGET AUTHORIZATION
 Senate Finance Committee conducts review while
budget hearings are ongoing at the HOR

 SFC proposes amendments to the House Budget Bill

for approval

 Bicameral Conference Committee finalizes the

General Appropriations Bill
BUDGET AUTHORIZATION
 GA Bill passed in both Houses is submitted to the
President
 In the extreme possibility that Congress fails to pass the
Bill, the Constitution provides
 “ If by the end of the fiscal year, the Congress shall have
failed to pass the general appropriations bill for the
ensuing year, the general appropriations law for the
preceding year shall be deemed re-enacted and shall in
force and effect until the general appropriations bill is
passed by Congress”
BUDGET AUTHORIZATION
 Presidential Review and Veto
 The GAB undergoes presidential review pursuant to
Section 27 Article IV of the Constitution
 If it is approved by the President, it becomes a law
BUDGET AUTHORIZATION
 If the President chooses not to act on it, he is deemed to
have approved it after the lapse of 30 days.

 Otherwise, the President within the 30 day period must

veto the GAB or any item/s thereof by sending his veto
message to the House of Representatives

 Congress may override the veto by gathering 2/3 vote

in each House, in which case it becomes law against the
President’s will
III. BUDGET EXECUTION &
IMPLEMENTATION
BUDGET EXECUTION
 Elements of budget execution:
 Submission and evaluation of agency annual Work and
Financial Plans which will be the basis of issuances of
quarterly Advice of Allotments and funding
requirements
 Continuing monitoring and review of government’s fiscal
position
 Making sure that funds are available to support agency
functions and projects
BUDGET EXECUTION
 Simplified Fund Release System (SFRS)
 adopted beginning 1995
 Standardized release of funds across agencies which are
similarly situated

 Agency Budget Matrix

 prepared by DBM in consultation with agencies at the
beginning of each budget year
 provides the basis for determining the timing, composition
and magnitude of the release of the budget
BUDGET EXECUTION
 Allotment Release Program
 considers updated resources and economic development
thrust
 serves as basis for the issuance of either a General
Allotment Release Order (GARO) or a Special Allotment
Release Order (SARO)
 The ABM-SARO system has been abolished in 2014
 Notice of Cash Allocation (NCA)
 Released on a monthly or quarterly basis
 Specifies the maximum amount of withdrawal that an
agency can make from a government bank for the period
indicated
BUDGET EXECUTION
 Basis of release of NCA
 Financial requirements of agencies as indicated in their
ABMs, cash plans and reports such as the Summary List
of Checks Issued
 The cash budget program of government and updates
on projected resources
BUDGET EXECUTION
 Reasons for Adjustments
 Enactment of new laws
 Adjustments in macroeconomic parameters

 Change in resources available

Budget Accountability and Review
Budget Accountability
 At the agency level, budget accountability takes the form of
management's review of actual performance or work
accomplishment in relation to the work targets of the agency
vis-à-vis the financial resources made available.

 Internal Control System (ICS) and Internal Audit

 Also, detailed examinations of each agency's book of

accounts are undertaken by a resident representative of the
Commission on Audit (COA) to ensure that all expenses have
been disbursed in accordance with accounting regulations
and the purpose(s) for which the funds have been
authorized.