Reporter: ABDUL, Nor-Ain Mala

GOVERNMENT BUDGETING

The word budget is derived from the French word “Bougette” which means leather bag/wallet to carry
out official papers.

A budget is a tool for planning, quantifying the plans and controlling the cost (Finkler, 1984).

A budget is plan that uses numerical data to predict the activities of an organization over a period of time
and it provides a mechanism for planning each unit’s need and contribution (Carruth and Noto, 2000).

Budgeting is a concrete precise picture of the total operation of an enterprise in monetary terms (H.M.
Donovan).

Government Budget is “the financial expression of government plansand policies” (IPPFWHR, 2010,
P.41) translated into the allocation of financial resources (lewis, 2007, p. 179).

Government Budgeting , showing item wise estimates of receipts and expenditure during fiscal year.
The receipt and expenditure, shown in the budget, are not the actual figure, but the estimated values for
the coming fiscal year.

Reporter: ABDULJALIL, Nahida Adapun

ORIGIN OF THE BUDGET SYSTEM

Reporter: AL-MOUNAIM, Tareeq Abdul

Evolution of the Philippine Budget System

a) Origin of the Budget System

- The term “budget” originated from the Middle English word “bouget” that had derived from
the Latin word “bulga” (which means bag or purse).

- In the Philippine setting, Commonwealth Act (CA) No. 246 (Budget Act) defined “budget” as
the financial program of the National Government for a designated fiscal year, consisting of the
statements of estimated receipts and expenditures for the fiscal year for which it was intended to be
effective based on the results of operations during the preceding fiscal years. The term was given a
different meaning under Republic Act No. 992 (Revised Budget Act) by describing the budget as the
delineation of the services and products, or benefits that would accrue to the public together with the
estimated unit cost of each type of service, product or benefit. For a forthright definition, budget should
simply be identified as the financial plan of the Government, or “the master plan of government.”

The concept of budgeting has not been the product of recent economies. In reality, financing
public goals and activities was an idea that existed from the creation of the State. To protect the people,
the territory and sovereignty of the State, its government must perform vital functions that required public
expenditures. At the beginning, enormous public expenditures were spent for war activities, preservation
of peace and order, security, administration of justice, religion, and supply of limited goods and services.
In order to finance those expenditures, the State raised revenues through taxes and impositions. Thus,
budgeting became necessary to allocate public revenues for specific government functions. The State’s
budgeting mechanism eventually developed through the years with the growing functions of its
government and changes in its market economy.

The Philippine Budget System has been greatly influenced by western public financial
institutions. This is because of the country’s past as a colony successively of Spain and the United States
for a long period of time. Many aspects of the country’s public fiscal administration, including its Budget
System, have been naturally patterned after the practices and experiences of the western public financial
institutions. At any rate, the Philippine Budget System is presently guided by two principal objectives that
are vital to the development of a progressive democratic government, namely:

(1) to carry on all government activities under a comprehensive fiscal plan developed, authorized
and executed in accordance with the Constitution, prevailing statutes and the principles of sound
public management; and

(2) to provide for the periodic review and disclosure of the budgetary status of the Government in
such detail so that persons entrusted by law with the responsibility as well as the enlightened
citizenry can determine the adequacy of the budget actions taken, authorized or proposed, as well
as the true financial position of the Government.

b) Evolution of the Philippine Budget System

The budget process in the Philippines evolved from the early years of the American Regime up to the
passage of the Jones Law in 1916. A Budget Office was created within the Department of Finance by the
Jones Law to discharge the budgeting function, and was given the responsibility to assist in the
preparation of an executive budget for submission to the Philippine Legislature.

As early as under the 1935 Constitution, a budget policy and a budget procedure were established, and
subsequently strengthened through the enactment of laws and executive acts. EO No. 25, issued by
President Manuel L. Quezon on April 25, 1936, created the Budget Commission to serve as the agency
that carried out the President responsibility of preparing the budget. CA No. 246, the first budget law,
went into effect on January 1, 1938 and established the Philippine budget process. The law also provided
a line-item budget as the framework of the Government budgeting system, with emphasis on the
observance of a balanced budget to tie up proposed expenditures with existing revenues.

CA No. 246 governed the budget process until the passage on June 4, 1954 of Republic Act (RA) No.
992, whereby Congress introduced performance-budgeting to give importance to functions, projects and
activities in terms of expected results. RA No. 992 also enhanced the role of the Budget Commission as
the fiscal arm of the Government.

The 1973 Constitution and various presidential decrees directed a series of budgetary reforms that
culminated in the enactment of PD No. 1177 that President Marcos issued on July 30, 1977, and of PD
No. 1405, issued on June 11, 1978. The latter decree converted the Budget Commission into the Ministry
of Budget, and gave its head the rank of a Cabinet member. The Ministry of Budget was later renamed the
Office of Budget and Management (OBM) under EO No. 711. The OBM became the DBM pursuant to
EO No. 292 effective on November 24, 1989.

Reporter: ALI, Faisa Bacarat

Government budgeting it is the critical exercise of allocating revenues and borrowed funds to attain the
economic and social goals of the country. It also entails the management of government expenditures in
such a way that will create the most economic impact from the production and delivery of goods and
services while supporting a healthy fiscal position.

Importance of Government Budgeting

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.

Reporter: AMPANG, Afrar Amanie

Reporter: ASUM, Sonaya Macabato

Reporter: BASHIR, Mohammad Talal

Reporter: BASMAN, Jonairah Radia

Reporter: BATUAMPAR, Zodais Maraye

Reporter: BOCO, Hayam Salic

Reporter: CADER, Sittie Nasifa Banisil

Reporter: CALI, Nor-Anniah Rashid

Reporter: COSAIN, Norhana Pananggilan

Reporter: DIAMLA. Nishrin Marabog

Reporter: DICUNUGUN, Asnairah Pantawagas