Budget Process o Budgeting several parties

participate in the budget

The National Budget preparation starting from
 The Philippine Constitution and other lowest to the highest levels of
laws require government funds to be the government
utilized in accordance with a national o Opposite is the “top-down”
budget that is duly approved by  In 2011, The Philippine Government
legislation attempted to start a new tradition by
 It is the government’s estimate of the shifting from the old “incremental”
sources and uses of government funds system of budgeting to the “zero-based
within a fiscal year budgeting” approach
 Forms the basis for expenditures and is
the government’s key instrument for Incremental Zero-based
promoting its socio-economic Budgeting budgeting
objectives The current year’s The current year’s
 The formulation and utilization of the budget is formulated budget is formulated
national budget are summarized in the based on the without regard to the
budget cycle. previous year’s previous year’s
budget. The budget
The Budget Cycle proposed programs
and expenditures in
 Budget Preparation
the previous year are
1. Budget Call
approved in the
2. Budget Hearing current year
3. Presentation to the Office of the Uses “roll-over” Uses a “back-to-zero”
President approach or “clean slate”
 Budget Legislation approach
4. House Deliberations Prone to abuse Promotes efficient
5. Senate Deliberations and effective
6. Bicameral Deliberations utilization of funds
7. President’s Enactment
 Budget Execution Budget Preparation
8. Release Guidelines and BEDs  Budget Call
9. Allotment o DBM issues budget call to all
10. Incurrence of Obligations government agencies
11. Disbursement Authority o Contains the next fiscal year’s
 Budget Accountability targets, the agency’s budget
12. Budget Accountability Reports ceiling and other guidelines in
13. Performance Reviews the completion and submission
14. Audit of agency budget proposals
o Balanced Budget
Budget Preparation  Estimated revenues
 Uses a “bottom-up” approach exceed estimated
 Bottom-up expenditures
o Annual Budget
 o Special Budget
 Provide for items not
covered or not included
in the general
appropriations act
o Line item Budget
 Focuses on specific
expenditures
o Performance Budget
 Plan of activities to be
undertaken
 Main focus is on the
work to be done or
services to be rendered
o Obligations Budget
 Focuses on
expenditures incurred
in the current year
which are to be paid
either in the same year
or in the following year
 Budget Hearing
o Conducted after the agencies
submit their budget proposals
o DBM deliberates on budget
proposals, makes
recommendations, and
consolidates the deliberated
proposals into the National
Expenditure Program (NEP) and
Budget of Expenditures and
Sources of Financing (BESF)
 Presentation to the Office of the
President
o After the President approves
the proposed budget, the DBM
finalizes the budget documents
to be submitted to the
Congress.
o President’s Budget contains the
following:
 President’s Budget
Message: contains the
President’s explanation
of the country’s fiscal
policy and budget
priorities
 National Expenditure
Program (NEP):
contains the details of
all the government
entities’ proposed
expenditures in the
coming year
 Budget of Expenditures
and Sources of
Financing (BESF):
 Other documents
o President’s Budget
 Intended to assist the
Congress in their review
and deliberation of the
proposed national
budget
o The President shall submit the
proposed budget to the
Congress within 30 days from
the opening of every regular
session
Budget Legislation
 House Deliberations
o Prepares the General
Appropriations Bill
 Senate Deliberations
o Conduct its own deliberations
on the GAB
 Bicameral Deliberations
o Formed to harmonize any
conflicts between the
Representatives and Senate
versions of GAB
 President’s Enactment
o General Appropriations Act
(GAA)
o When the proposed budget is
not enacted before the fiscal
 year starts, the last year’s GAA
is automatically reenacted
The Approved Budget
 Expenditure authority derived from
appropriation laws, government
ordinances, and other decisions related
to the anticipated revenue or receipts
for the budgetary period
 Appropriation
o Authorization made by a
legislative body to allocate
funds for purposes specified by
the legislative or similar
authority
Appropriations
 No law shall be passed authorizing any
transfers of appropriations
 New General Appropriations
o Annual authorizations for
incurring obligations during a
specified budget year, as listed
in GAA
 Continuing Appropriations
o Support obligations for a
specific purpose
 Supplemental Appropriations
o Additional appropriations
authorized by law to augment
the original appropriations
 Automatic Appropriations
o Authorizations programmed
annually or for some other
period prescribed by law which
do not require periodic action
by Congress
 Unprogrammed Funds
o Standby appropriations
authorized by Congress in the
annual GAA
 Retained Income/Funds
o To be used directly by agencies
concerned for their operation
or specific purposes
 Revolving Funds
o Receipts derived from business-
type activities
o Shall be self-liquidating
 Trust Receipts
Budget Execution
 Phase where government funds are
spent
 Release guidelines and BEDs
o DBM issues guidelines on the
release and utilization of funds
o Major recipients of budget:
 National Government
Agencies (NGAs)
 Local Government Units
(LGUs)
 GOCCs
o Budget Execution Documents
(BEDs)
 Physical and financial
plan
 Monthly cash program
 Estimate of monthly
income
 List of obligations that
are not yet due and
demandable
 Allotment
o Obligational authority
o Authorization issued by DBM to
government agencies to incur
obligations for specified amounts
contained in a legislative
appropriation in the form of budget
release documents
o Illegal for government entity to
incur obligations without having
first received the “Allotment”
o Allotment Release Program (ARP)
  Set the limit for allotment
releases during
upcoming year
 Control device to ensure
that releases conform to
the national budget
o Cash Release Program (CRP)
 Set the disbursement limits
o Obligations: act of a duly authorized
official which binds the government
to the immediate or eventual
payment of a sum of money
 Disbursement Authority
o DMB issues disbursement authority
to the government agencies
o Point where government agencies
obtain access to the government
funds
o Disbursement are most commonly
made through checks that are
chargeable against the account of
the Treasurer of the Philippines.
Checks issued under this scheme
are called “Modified Disbursement
System (MDS) Checks”
 Documents used in releasing
disbursement authority to government
agencies:
o Notice of Cash Allocation (NCA)
 Issued by the DBM to
central, regional and
provincial offices and
operating units to cover
their cash requirements
 Specifies the maximum
amount of cash that can be
withdrawn from
government servicing bank
in a certain period
 Based on the agency’s
submitted Monthly Cash
Program
 Form of authorization to
government agency to
make disbursements out of
the government funds
o Notice of Transfer of Allocation
 Issued by an agency’s
Central Office
o Non-cash Availment Authority
 Issued by DBM to agencies
to cover the liquidation of
their actual obligations
incurred against available
allotments for availment of
proceeds from loans through
supplier’s
credit/constructive cash
o Cash Disbursement Ceiling
 Issued by DBM to agencies
with foreign operations
GAME
Appropriation Authorization by
legislative body to
allocate funds for
specified purposes
Allotment Authorization to
agencies to incur
obligations
Obligation Amount contracted
by an authorized
officer for which the
government is held
liable
Disbursement Actual amount paid
out of the budgeted
amount
Budget Accountability
 Performance reviews
o DBM and COA perform periodic
reviews of the agencies’
performance and budget
accountability and report to the
President
 Audit
o COA audits the agencies