Erjohn O.

Papa
45043

Total National Budget for 2021 - PHP 4.056 trillion

Allocation by Sector
Social Services - PHP 1,668 billion (37% of National Budget)
Economic Services - PHP 1,323.1 billion (29.4% of National Budget)
General Public Sectors - PHP 747.8 billion (16.6% of National Budget)
Debt Burden - PHP 560.2 billion (12.4% of National Budget)
Defense - PHP 206.8 billion (4.6% of National Budget)

Top 10 Departments
Department Budget( billions)
Education 751.7
DPWH 695.7
DILG 249.3
DOH 210.2
DND 205.8
DSWD 176.9
DOTr 87.9
DA 71
Judiciary 45.3
DOLE 37.1

Programs and Projects

 Addressing the COVID-19 Pandemic
- for providing health care
- establishment of the Virology Science and Technology Institute of the
Philippines

 Reviving Infrastructure Development

- Build, Build, Build Program

 Adapting to the New Normal

- Transition to new normal of various sectors
- for flexible and blended learning
- improve productivity of the agriculture and fishery sector
- to help local businesses
- Funding programs for 4P’s
- for implementation of Philippine Identification System
ACCOUNTING FOR BUDGETARY ACCOUNTS
Article VI of the 1987 Constitution Section 29 (1). “No money shall be
paid out of the Treasury except in pursuance of an appropriation by
law.”

ACCOUNTING SYSTEMS
General Accounting Plan (GAP) – the overall accounting system of a
government agency or unit.
The following are objective-specific accounting systems:
 Budgetary Accounts Systems
 Receipt/Income and Deposit System
 Disbursement System
 Financial Reporting System

THE NATIONAL BUDGET

-a government document presenting the government's proposed revenues
and spending for a financial year that is often passed by the legislature,
approved by the chief executive or president and presented by the Finance
Minister to the nation.

KINDS OF BUDGET
1. As to Nature
a. Annual
b. Supplemental
c. Special
2. As to Basis
a. Performance
b. Line-item
3. As to approach and technique
a. Zero-based
b. Incremental

THE BUDGET PROCESS

1. Budget Preparation – this covers estimation of government revenues,
the determination of budgetary priorities and activities within the
constraints imposed by available revenues and by borrowing limits, and
the translation of approved priorities and activities into expenditure
levels.

Budget proposals shall not be based on the following:

a. A given percentage or peso increase or decrease from a prior

year’s budget level
b. A given percentage of the aggregate budget level
c. A similar rule of thumb that is not based on specific justification

2. Legislative Authorization – budget process relative to the enactment

of the General Appropriation Bills based on the budget of receipts and
expenditures submitted by the President of the Philippines.
 General Appropriation Bills presents the proposals of the President for
new general appropriations in the coming year.
Appropriations are approved by the legislative body in the form of:
a. A general appropriation law which covers most of the expenditures
of government
b. Supplemental appropriations laws that are passed from time to time
to augment or correct an already existing appropriation
c. Certain automatic appropriations intended for fixed and specific
purposes

3. Budget Execution and Operation – covers the various operational

aspects of budgeting. It comprise, among others, of the following:

a. Establishment of authority ceilings on obligations

b. Evaluation of work and financial plans for individual activities
c. Continuing review of government fiscal position
d. Regulation of fund releases
e. Implementation of cash payment schedules
f. Updating planning and scheduling activities

4. Budget Accountability – this phase consist of the following:

a. Periodic reporting by the government agencies of performances

under their approved budget
b. Top management review of government activities and the fiscal
policy implementation
c. The actions of Commission on Audit (CoA) in assuring the fidelity of
officials and employees by carrying out the intent of the legislative
regarding the handling of receipts and expenditures

BUDGETARY ACCOUNTS
1. Appropriation – an authorization made by law or other legislative
enactment, directing payment of goods and services out of government
funds under specific conditions or for special purpose
2. Allotment – an authorization issued by the Department of Budget and
Management (DBM) to the government agency, which allows it to incur
obligations, for specified amounts, within the legislative appropriation
3. Obligation – a commitment by a government agency arising from an
act of duly authorized official which binds the government to the
immediate or eventual payment of a sum of money

BUDGETARY ACCOUNTS SYSTEM 

The Budgetary Accounts System encompasses the processes of preparing

Agency Budget Matrix (ABM), monitoring and recording of allotments received
by the agency from the DBM, releasing of Sub-Allotment Release Order (Sub-
SARO) to Regional Offices (RO) by the Central Office (CO); issuance of Sub-
SARO to Operating Units (OU) by the RO; and recording and monitoring of
obligations.
BUDGETARY ACCOUNTS
Budgetary accounts consist of the appropriations, allotments and obligations.
Appropriations refer to authorizations made by law or other legislative
enactment for payments to be made with funds of the government under
specified conditions and/or for specified purposes. Appropriations shall be
monitored and controlled through registries and control worksheets by the
DBM and COA, respectively. Budgetary accounts allotments and obligations
are discussed in the succeeding sections.

THE ALLOTMENT RELEASE ORDER (ARO)

-is a formal document issued by the DBM to the agency containing the
authorization, conditions and amount of an agency allocation
The document may be the:
1. Agency Budget Matrix – effectively releases the amount indicated as
not needing clearance; or
2. Special Allotment Release Order (SARO) – issued subject to
compliance with laws or regulations or is subject to separate approval
or clearance by competent authority.

REPORTING REQUIREMENTS
Per Nation Budget Circular No. 507, dated January 31, 2007, the DBM
requires national government agencies to submit, on a regular basis, Budget
Execution Documents (BEDs), which contain the agencies’ targets and
plans for the current year, and Budget Accountability Reports (BARs),
which contain information on the agencies’ accomplishments and
performance for a given period.
The BEDs include:
1. Physical and Financial Plan (PFP)
2. Monthly Cash Program (MCP)
3. Estimate of Monthly Income
4. List of Not Yet Due and Demandable Obligations
The BARs include:
1. Quarterly Physical Reports of Operations
2. Quarterly Financial Reports of Operations
3. Quarterly Report of Actual Income
4. Statement of Allotment, Obligations and Balances
5. Monthly Report of Disbursements

GENERAL GUIDELINES ON THE RELEAE OF FUNDS

Pending the effective date of the new General Appropriation Act (GAA),
national government agencies are authorized to incur overdraft in allotment
for obligations corresponding to the actual requirement of their regular
operations chargeable against the GAA, as re-enacted.

AGENCY BUDGET MATRIX (ABM)

The ABM refers to a document showing the disaggregation of agency
expenditures into components like, among others, by source of
appropriations, by allotment class and by need of clearance.
 1. Needing Clearance – portion of the ABM consisting budgetary items in
the agency specific budgets that shall be released upon compliance of
certain documentary requirements
2. Not Needing Clearance – portion of the ABM referring to budgetary
items of agency budgets under the GAA not included under Needing
Clearances portion and categorized as such in the submitted financial
plan of the agency.

KEY TERMS ON RELEASE OF DISBURSEMENT AUTHORITIES

1. Release of Notice of Cash Allocation (NCA)
2. Release of non-cash Availment Authority (NCAA)
3. Release of Cash Disbursement Ceiling

CONDUCT OF THE AGENCY PERFORMANCE REVIEW

Consistent with performance-based budgeting, a quarterly evaluation of the
agency performance shall be conducted by comparing agency plans and
targets per BEDs vis-à-vis actual accomplishments per BARs.

COMMON FUND SYSTEM

The common fund system policy (for use of personal services, maintenance
and other operating expenses, capital outlays, and financial expenses without
realignment) shall continue to be used. However, it will not apply to current
year Accounts Payable to external creditors of the five departments covered
by the Direct Payment Scheme. These departments are:
1. Department of Public Works and Highways
2. Department of Education
3. Department of Health
4. Commission on Higher Education
5. State Universities and Colleges

References:
https://www.dbm.gov.ph/index.php/secretary-s-corner/press-releases/list-of-
press-releases/1778-prrd-signs-the-p4-506-trillion-national-budget-for-fy-
2021#:~:text=President%20Rodrigo%20Roa%20Duterte%20today,to%20the
%20COVID%2D19%20pandemic.

https://www.scribd.com/document/247912792/Accounting-for-Budgetary-
Accounts