THE PHILIPPINE GOV’T BUDGET PROCESS

Definition of Government Budgeting

 The critical exercise of allocating revenues and borrowed funds to attain the economic and social goals of the country.

Concept
 It is a financial plan to pursue priority programs & projects of the government in line with its economic growth &
human development thrusts.
 It is an instrument for good governance, as government agencies are accountable for the delivery of measurable
results through their respective budgets.
 The financial blueprint of the country’s development plan.

Purpose
 To ensure that public resources are managed more efficiently and with the greatest degree of discipline.
 Government budgeting is important because it enables the government to plan and manage its financial resources to
support the implementation of various programs and projects that best promote the development of the country.
 Through the budget, the government can prioritize and put into action its plans, programs and policies within the
constraints of its financial capability as dictated by economic conditions.

LEGAL BASIS

Section 22, Article VII of the 1987 Constitution

The procedure in the preparation of the national budget is regulated by law. On or before October 20 of each year, each
department secretary submits to Department of Budget the estimated income and expenditures of the bureaus and offices
under his department for the next fiscal year.

Upon receipt of all budget estimates of income and expenditures, the Department of Budget and Management prepares the
national budget.

Prior to this, however, the Budget secretary can investigate, revise, examine, assemble, coordinate, and reduce or increase the
budget estimates of the different departments, bureaus and offices of the government.

After preparing the budget, the Budget secretary submits it to the President, who in turn submits it to Congress within 30 days
before the opening of the regular session.

The 1987 Constitution specifically provides that the President "shall submit to the Congress within thirty days from the opening
of every regular session, as the basis of the general appropriations bill, budget of expenditures and sources of financing,
including receipts from existing and proposed revenue measures" ( Sec. 22, Art. VI). Congress uses the budget submitted by the
president as the basis for the annual appropriation.

According to the 1987 Philippine Constitution, Congress "may not increase the appropriation recommended by the President for
the operation of the Government as specified in the budget" (Sec. 25(1), Art. VI).

HOW IS THE GOVERNMENT BUDGET CRAFTED AND APPROVED?

The Budget Cycle

There are four phases in managing the National Budget:

 Budget Preparation
 Budget Legislation
 Budget Execution
 Budget Accountability

-Generally consistent with international standards and practice in democracies

-Designed in accordance with law
-Development Budget Coordinating Committee (DBCC) as highest cabinet-level fiscal policy maker
-During the preparation phase, the Executive prepares the proposed National Budget. This is followed by the legislation phase
where the Congress authorizes the General Appropriations Act. In the execution phase, agencies utilize their approved budgets
and during the accountability phase, the executive monitors and evaluates the use of the budget.
 THE NATIONAL BUDGET CYCLE

1. BUDGET PREPARATION
Alternatively called the “Budget Authorization phase,” this starts upon the House Speaker’s receipt of the President’s Budget
and ends with the President’s enactment of the General Appropriations Act.

2. BUDGET LEGISLATION

BICAMERAL CONFERENCE COMMITTEE

-Discussion of disagreeing provisions of the appropriations bill
-Preparation of Committee Report and Approval of amended General Appropriations Bill
-Senate ratifies the Bicameral Committee Report and GAB
-HoR finalizes GAB; submits to the President

The General Appropriations Act (GAA) is the legislative authorization that contains the new appropriations in terms of specific
amounts for salaries, wages and other personnel benefits; maintenance and other operating expenses; and capital outlays
authorized to be spent for the implementation of various programs/projects and activities of all departments, bureaus and
offices of the government for a given year.

Legislation: Key Decisions

 New revenue measures
 Allocation of expenditures
 New spending program/termination of programs
 Expenditure levels
 Timing of GAA

Legislation: Decision Enhancing Governance Factors

 Policy-based budget debate
 Consultation with stakeholders
 Performance-based costing
 Results-based budget
3. BUDGET EXECUTION

-This is where the people’s money is actually spent. As soon as the GAA is enacted, the government can implement its priority
programs and projects.
-Preparation of Approved Budget Program
-Preparation of Quarterly Programs
 Allotment Program
 Cash Program
-Work and Financial Plans of Agencies
-Fund Release
 Agency Budget Matrix
 Special Allotment Release Order (SARO)
 Notice of Cash Allotment

4. BUDGET ACCOUNTABILITY

This phase happens alongside the Budget Execution phase.

Through Budget Accountability, the DBM monitors the efficiency of fund utilization, assesses agency performance and provides a
vital basis for reforms and new policies.

Government must disclosed to the public their performance targets, programs, accomplishment reports, expenditures, bidding
results
Review of accounting, financial and accomplishment reports
 Conduct of Agency Performance review
 Annual Reports
 Audit of Financial Statements
 Monitoring Reports