NATIONAL BUDGET Budget of Expenditures and Sources of

Financing (BESF)
➢ NEP – details of spending for each
GOVERNMENT BUDGETING department and agency by program,
activity, or project (PAP); to be
- critical exercise of allocating revenues and submitted for the GAA
borrowed funds to attain the economic and - Details of Selected Programs and
societal goals of the country. Projects – detailed disaggregation of
- management of government expenditures key PAPs in NEP
to create the most economic impact from the - Staffing Summary - staffing
production and delivery of goods and complement of each department and
services agency, including the number of
- enables the government to plan and positions and amounts allocated.
manage its financial resources to support ➢ NEP and BESF are presented by the
the implementation of various programs and DBM and DBCC to the President and
projects Cabinet – for refinements or
- government can prioritize and put into reprioritization
action its plants, programs and policies ➢ Once approved, DBM will prepare budget
within the constraints of its financial capability documents consisting of:
1. President’s Budget Message –
PROCESS
president explains policy framework
BUDGET PREPARATION and budget priorities
2. BESF – mandated by Sec 22, Article
- contains budget parameters set by the VII - macroeconomic assumptions,
Development Budget Coordination public sector context, breakdown of
Committee expenditures, funding sources for the
- Policy guidelines and procedures for budget fiscal year and two previous years
proposals 3. NEP
- Two kinds of Budget Call:
1. National Budget Call – agencies, Public expenditures are grouped into functions:
including SUCs
1. Economic development expenditures
2. Corporate Budget Call – GOCCs and
– agriculture and natural resources,
GFIs
transportation and communications,
- Departments and agencies submit now their
commerce and industry, other
Agency Budget Proposals to DBM
development efforts
➢ Involvement of civil organizations and
2. Social services of social development
citizen-stakeholders for consultation
expenditures – education, public health
➢ Schedules budget hearings after
and medicare, labor and welfare
submission to defend their proposals; to
3. General government or general public
be reviewed by DBM bureaus
serves expenditures – general
➢ They may provide recommendations for
government, legislative services,
the Executive Review Board
administration of justice, pensions and
- prioritization of programs and their
gratuities
corresponding support vis-à-vis the
4. National defense expenditures –
priority agenda of the National
national security expenditures and
Government, and their implementation.
expenditures for maintenance of peace
- DBM consolidates recommended budgets to
and order
National Expenditure Program (NEP) and
5. Public debt
- Can also be classified into its nature of funds: 10. Interest Income
➢ General fund, special fund, or bond fund 11. Sale of Confiscated Goods and
Properties
Public revenues - complement public
12. Foreign Exchange (FOREX)
expenditures and cover all income or receipts of
Gains
the government treasury used to support
13. Miscellaneous Operating and
government expenditures.
Service Income
- Must defray either: 14. Fines and Penalties-Government
➢ Necessary expenses of government from Services and Business Operations
some fund which belongs to the 15. Income from Grants and
sovereign and which is independent of Donations
the revenue of the people
Specific Income:
➢ From the revenue of the people
- Sources of public revenues: 1. Income Taxes
1. Tax revenues – compulsory 2. Property Taxes
contributions to finance government 3. Taxes on Goods and
activities Services
2. Capital revenues - proceeds from sales 4. Taxes on International Trade and
of fixed capital assets or scrap thereof Transactions
and public domain, and gains on such 5. Other Taxes
sales like sale of public lands, buildings 6. Fines and Penalties-Tax Revenue
and other structures, equipment, and 7. Other Specific Income
other properties recorded as fixed assets
3. Grants - voluntary contributions and aids
given to the Government for its operation BUDGET LEGISLATION
on specific purposes in the form of
money and/or materials - Covers the period commencing from the time
4. Extraordinary income - repayment of Congress receives the President’s Budget
loans and advances made by up to the President’s approval of the GAA
government corporations and local - Also known as the Budget Authorization
governments and the receipts and shares Phase
in income of the Banko Sentral ng ➢ President’s Budget will be assigned to the
Pilipinas House of Representatives’ Appropriations
- Also classified as: Committee for First Readings
General Income: - AC and its sub-committees will conduct
1. Subsidy Income from National budget hearings
Government - Examination of PAPs
2. Subsidy from Central Office - General Appropriations Bill will be
3. Subsidy from Regional drafted by the HOR
Office/Staff Bureaus ➢ GAB Sponsorship
4. Income from Government - GAB will be sponsored, presented, and
Services defended by HOR’s AC and its sub-
5. Income from Government committees during plenary session
Business Operations - Shall be approved on Third Reading
6. Sales Revenue before the HOR’s version will be
7. Rent Income transmitted to the Senate
8. Insurance Income ➢ Transmission to the Senate
9. Dividend Income - They will have their own committee
hearings on the GAB
 - They may simultaneously do this with
HOR’s deliberations
- Finance Committee and its sub-
committees of the Senate will now
submit proposed amendments to the
GAB; only after HOR’s transmission to
Senate
- Also subject to approval on Third
Reading
➢ Establishment of Bicameral Conference
Committee
- Panel consisting of HOR and Senate
- Discuss and harmonize conflicting
provisions of the GAB
- The harmonized version will be
presented to the president
➢ President’s approval
- President will review, approve, or
prepare a veto message if budget items
are subjected to direct veto or are
identified for conditional implementation
- Failure to pass the GAB for the ensuing
fiscal year by the enate – GAA for the
preceding fiscal year will be re-enacted
and in force until a GAB is passed by the
Congress
BUDGET EXECUTION
- Function of DBM
- Procedures:
1. Issue the programs and guidelines for the
release of funds
2. Prepare an Allotment and Cash
Release Program
3. Release allotment
4. Issue disbursement authorities
- Prior to the implementation of GAA by the
DBM, Budget Execution Documents or
BED shall be submitted by departments and
agencies
➢ Contains the outline of plans and
performance targets
➢ Physical and financial plan, monthly cash
program, estimate of monthly income, list
of obligations that are not yet due and
demandable
- DBM will prepare Allotment Release
Program (ARP) and a Cash Release
Program (CRP)
➢ ARP – sets a limit for allotments issued
in general to a specific agency
➢ CRP – fixes monthly, quarterly, and
annual disbursement levels
- DBM will issue allotments
➢ Authorizes agency to enter into
obligations
➢ May be released in two forms: Agency
Budget Matrix (ABM) or Special
Allotment Release Order (SARO)
➢ Once allotment is granted, obligations
are incurred
- May be done through hiring of
personnel, entering into contracts for the
supply of goods and services, and using
utilities.
- DBM issues disbursement authority
➢ To settle obligations incurred and ensure
that cash may be allocated in payment of
obligations
➢ Notice of Cash Allocation (NCA) –
periodically issued DA; issuance based
upon an agency’s submission of its
Monthly Cash Program
- specifies the maximum amount of cash
that can be withdrawn from a
government
- DBM may also issue a Non-Cash Availment
Authority (NCAA) – authorizes non-cash
disbursements
- DBM may also issue a Cash Disbursement
Ceiling (CDC) - for departments with
overseas operations to allow the use of
income collected by their foreign posts
- Budget Execution phase is terminated after
the actual disbursement; accomplished
through Modified Disbursement Scheme
BUDGET ACCOUNTABILITY
- It ensures that the government funds have
been effectively and efficiently utilized to
achieve the State’s socio-economic goals.
- DBM assesses the performance of agencies
during the fiscal year
 ➢ To implement reforms and establish new
policies
- Examined through:
1. Performance targets and outcomes
2. Budget accountability reports
3. Review of agency performance
4. Audit conducted by COA