Budget

Preparation
 Budget Preparation is the first
(1st) phase of the barangay
budget process involving the
estimation of the income and
the subsequent identification of
programs, projects, or activities
proposed to be included and
funded in the budget.
1. What are the five phases of the Local Budget Process?
A. Planning, Authorization, Review, Execution,
Accountability
B. Preparation, Approval, Evaluation, Execution,
Accountability
C. Preparation, Authorization, Review, Execution,
Accountability
D. Planning, Approval, Review, Execution, Accountability
1. What are
the phases of Preparation,
the Local
Budget Authorization,
Process?
Review,
Execution,
C Accountability
What is a budget?
A budget is a financial plan
embodying the estimates of
income and expenditures for a
given period of time (usually
for one (1) fiscal year).”
(Section 306 [a], RA No. 7160)
Pursuant to Section 331 (a) of
RA No. 7160, the punong
barangay shall prepare the
barangay budget for the
ensuing fiscal year in the
manner and within the
period prescribed in the LGC
and submit the annual
budget to the sangguniang
barangay for legislative
enactment.
Steps in Preparing
the Barangay
Annual Budget
Step 1. Barangay Treasurer submits the detailed
Statement of Income and Expenditure (Section
330, RA No. 7160 and Article 423[b], IRR of RA
No. 7160)
Based on the certified statements
jointly issued by the Municipal
Treasurer and Municipal
Accountant, when should the
barangay treasurer submit to the
punong barangay a statement
covering the estimates of income
and expenditures for the past,
current and ensuing fiscal years?

a. On or before June 15
b. On or before September 15
c. On or before August 15
d. On or before July 15
Based on the certified statements
jointly issued by the Municipal
Treasurer and Municipal
Accountant, when should the
barangay treasurer submit to the
punong barangay a statement
covering the estimates of income
and expenditures for the past,
current and ensuing fiscal years?

b. On or before September 15
Step 2. Punong Barangay (PB), in coordination
with the BDC, prepares the barangay budget
(Section 389[b][7], RA No. 7160)
How much should the barangay allocate for
the Sangguniang Kabataan Fund?

a. 10% of the total general fund (estimated

income)
b. 10% of the National Tax Allotment (formerly
known as IRA)
c. 10% of the total Real Property Tax
d. 10% of the total regular sources (estimated
income)
How much should the
barangay allocate for the
Sangguniang Kabataan Fund?

a. 10% of the total general

fund (estimated income)
Pursuant to Section 287 of RA No. 7160 how much should
the barangay allocate for its development fund?

a. 20% of the total general fund (estimated income)

b. 20% of the National Tax Allotment (formerly known as IRA)
c. 20% of the total Real Property Tax
d. 20% of the total regular sources (estimated income)
Pursuant to Section 287 of RA No. 7160 how much should
the barangay allocate for its development fund?

b. 20% of the National Tax Allotment

(formerly known as IRA)
Republic of the Philippines
DEPARTMENT OF BUDGET AND MANAGEMENT
8. Pursuant to Section 303 of R.A.
7160 how much is the maximum
amount that a barangay can
appropriate for the payment of
debt?

a. 20% of the total general fund

(estimated income)
b. 20% of the National Tax
Allotment (formerly known as IRA)
c. 20% of the total Real Property
Tax
d. 20% of the total regular income
8. Pursuant to Section 303 of RA
No. 7160 how much is the
maximum amount that a barangay
can appropriate for the payment of
debt?

d. 20% of the
total regular
income
Pursuant to RA No. 10121, how much is the
minimum amount that a barangay can
appropriate for the DRRMF?

a. 5% of the total general fund (estimated

income)
b. 5% of the National Tax Allotment (formerly
known as IRA)
c. 5% of the total Real Property Tax
d. 5% of the estimated revenue from regular
sources
Pursuant to RA No. 10121, how much is the
minimum amount that a barangay can
appropriate for the DRRMF?

d. 5% of the estimated
revenue from regular
sources
10. Pursuant to Section 331 (b) of the Local
Government, how much is the maximum
amount that a barangay can appropriate for its
total PS requirements?

a. 55% of the total annual income from local

sources during the next preceding fiscal year
b. 55% of the National Tax Allotment (formerly
known as IRA) during the preceding year
c. 55% of the total general fund during the
budget year
d. 55% of the NTA during the budget year
10. Pursuant to Section 331 (b) of the Local
Government, how much is the maximum
amount that a barangay can appropriate for its
total PS requirements?

a. 55% of the total annual

income from local sources
during the next preceding
fiscal year
 Statutory and Contractual Obligation and
Budgetary Requirements

Particulars Percentage Basis

Sangguniang Kabataan Fund 10% Total General Fund
Development Fund 20% NTA Share
Debt Service 20% Regular Sources
BDRRMF 5% Estimated Revenue from regular
sources
PS Limitation 55% Realized income from local sources
during the next preceding fiscal year
Barangay San Antonio, Olongapo City is currently preparing its FY 2025 Annual Budget. On July 15, 2024,
the Barangay Treasurer submitted to the Punong Barangay the estimates of income for the past, current
and ensuing fiscal year. Given the data, the Punong Barangay instructed the Barangay Treasurer to assist
her in the preparation of the barangay budget. Using the estimates below, how should the barangay
prepare their FY 2025 AB? What processes should they undertake?
Income Past Year Current Year Budget Year
A. Local Sources
1. Real Property Tax 1,900,000.00 2,200,000.00 2,500,000.00
2. Other Taxes 600,000.00 850,000.00 1,200,000.00
3. Regulatory Fees 500,000.00 150,000.00 300,000.00
Total Local Sources 3,000,000.00 3,200,000.00 4,000,000.00
B. External Sources
1. National Tax Allotment 3,500,000.00 4,000,000.00 4,500,000.00
2. Share from National Wealth 1,200,000.00 1,350,000.00 1,500,000.00
3. Donations 500,000.00 750,000.00 2,000,000.00
Total External Sources 5,200,000.00 6,100,000.00 8,000,000.00
TOTAL 8,200,000.00 9,300,000.00 12,000,000.00
 Income Income Classification
A. Local Sources
1. Real Property Tax
2. Other Taxes
3. Regulatory Fees
B. External Sources
1. National Tax Allotment
2. Share from National Wealth
3. Donations
1. Identify income
classification
 Identify income
classification

Income Income Classification

A. Local Sources
1. Real Property Tax Regular
2. Other Taxes Regular
3. Regulatory Fees Regular
B. External Sources
1. National Tax Allotment Regular
2. Share from National Wealth Regular
3. Donations Non-Regular
 Income Past Year Current Year Budget Year
A. Local Sources
1. Real Property Tax 1,900,000.00 2,200,000.00 2,500,000.00
2. Other Taxes 600,000.00 850,000.00 1,200,000.00
3. Regulatory Fees 500,000.00 150,000.00 300,000.00
Total Local Sources 3,000,000.00 3,200,000.00 4,000,000.00
B. External Sources
1. National Tax Allotment 3,500,000.00 4,000,000.00 4,500,000.00
2. Share from National Wealth 1,200,000.00 1,350,000.00 1,500,000.00
3. Donations 500,000.00 750,000.00 2,000,000.00
Total External Sources 5,200,000.00 6,100,000.00 8,000,000.00
TOTAL 8,200,000.00 9,300,000.00 12,000,000.00
 Allocation for Statutory and Contractual
Obligation and Budgetary Requirements
Particulars Percentage Basis Amount
Sangguniang 10% Total General Fund
Kabataan Fund
Development Fund 20% NTA Share
Debt Service 20% Regular Sources
BDRRMF 5% Estimated Revenue from
regular sources
PS Limitation 55% Total local sources during the
next preceding fiscal year
 2. Allocation for Statutory and Contractual
Obligation and Budgetary Requirements
Particulars Percentage Basis Amount
Sangguniang 10% Total General Fund 1,200,000.00
Kabataan Fund (P12,000,000.00)
Development Fund 20% NTA Share
Debt Service 20% Regular Sources
BDRRMF 5% Estimated Revenue from regular
sources
PS Limitation 55% Total local sources during the
next preceding fiscal year
 2. Allocation for Statutory and Contractual
Obligation and Budgetary Requirements
Particulars Percentage Basis Amount
Sangguniang 10% Total General Fund 1,200,000.00
Kabataan Fund (P12,000,000.00)
Development Fund 20% NTA Share (P4,500,000.00) 900,000.00
Debt Service 20% Regular Sources
BDRRMF 5% Estimated Revenue from regular
sources
PS Limitation 55% Total local sources during the
next preceding fiscal year
 2. Allocation for Statutory and Contractual
Obligation and Budgetary Requirements
Particulars Percentage Basis Amount
Sangguniang 10% Total General Fund 1,200,000.00
Kabataan Fund (P12,000,000.00)
Development Fund 20% NTA Share (P4,500,000.00) 900,000.00
Debt Service 20% Regular Sources (P10,000,000.00) 2,000,000.00
BDRRMF 5% Estimated Revenue from regular
sources
PS Limitation 55% Total local sources during the
next preceding fiscal year
 2. Allocation for Statutory and Contractual
Obligation and Budgetary Requirements
Particulars Percentage Basis Amount
Sangguniang 10% Total General Fund 1,200,000.00
Kabataan Fund (P12,000,000.00)
Development Fund 20% NTA Share (P4,500,000.00) 900,000.00
Debt Service 20% Regular Sources (P10,000,000.00) 2,000,000.00
BDRRMF 5% Estimated Revenue from regular 500,000.00
sources (P10,000,000.00)
PS Limitation 55% Total local sources during the
next preceding fiscal year
 2. Allocation for Statutory and Contractual
Obligation and Budgetary Requirements
Particulars Percentage Basis Amount
Sangguniang 10% Total General Fund 1,200,000.00
Kabataan Fund (P12,000,000.00)
Development Fund 20% NTA Share (P4,500,000.00) 900,000.00
Debt Service 20% Regular Sources (P10,000,000.00) 2,000,000.00
BDRRMF 5% Estimated Revenue from regular 500,000.00
sources (P10,000,000.00)
PS Limitation 55% Total local sources during the 3,575,000.00
next preceding fiscal year
(P6,500,000.00)
 Process of Allocation
A. Mandatory Requirements
Particulars Amount
Sangguniang Kabataan Fund 1,200,000.00
Development Fund 900,000.00
BDRRMF 500,000.00
TOTAL 2,600,000.00
Balance after allocating for mandatory 9,400,000.00
requirements (P12M-2.6M)
Process of Allocation
B. Other Requirements (essential to the operations of the
Barangay)

Particulars Amount
Allocation for other requirements:
Personnel Services 1,650,000.00
MOOE 800,000.00
Total 2,450,000.00
Balance (P9.4M – 2.45M) 6,950,000.00
Process of Allocation
C. Basic Services

Balance – P6,950,000.00

Any available fund or resource of LGUs shall first be

allocated for the provision of basic services and
facilities before using such fund or resource for other
purposes, unless otherwise provided in the Code
(Section 17 [g], R.A. No. 7160)
Prepare Barangay
Budget Preparation
Forms (see Page 39)

• BBP Form No. 1 – Budget of

Expenditures and Sources of
Financing

• BBP Form No. 2 – Programmed

Appropriation by PPA, Expense
Class, Object of Expenditure
and Expected Results
Barangay Budget
Preparation Forms

• BBP Form No. 2-A – List of

Projects Chargeable Against the
20% Development Fund
• BBP Form No. 3 – Plantilla of
Personnel
• BBP Form No. 4 – Statement of
Indebtedness
 The proposed Annual Budget must be
supported by:
Step 3. Punong Barangay • Budget Message;
submits the proposed
• List of Projects chargeable against the
Annual Budget (Barangay 20% DF (BBP Form 2-A)
Expenditure Program) to
• Plantilla of Personnel (BBP Form No.
the Sangguniang Barangay 3);
not later than October 16
of the current fiscal year • Statement of Indebtedness, if any (BBP
Form No. 4)
(Section 318, RA No.
7160) • AIP, duly approved by the Sanggunian
through a Resolution; and
• Annual procurement Plan
Sample of
Barangay
Annual
Budget
Changes in the Annual
Budget
(Supplemental Budget)
General Rule

All budgetary proposals shall be included

and considered in the budget
preparation process (Section 321, RA No.
7160).
Funds shall be available exclusively for the specific
purpose for which they have been appropriated.
Exception
Changes in the annual budget
may be done through
supplemental budgets (Section
321, RA No. 7160 as
supplemented by
Administrative Order No. 47
dated April 12, 1993).
Three (3) instances when the barangay may enact
supplemental budgets:
• 1) When supported by funds actually available as certified by the local
treasurer and local accountant

Funds Actually Available

When realized income

exceeds estimated income
When there are savings
as of any given point
during the fiscal year
Republic of the Philippines
DEPARTMENT OF BUDGET AND MANAGEMENT
 New revenue source refers to money measure not
otherwise considered during the preparation and
enactment of the annual budget
2. If covered e.g.,
by new • new local taxes, charges, fees, fines, or penalties
or which raises existing local taxes, charges, etc.
revenue • Higher remittances, contributions, subsidies or
grants in aid from the National Government or
sources from government corporations or private entities
 By way of budgetary
realignment to set aside
appropriations for the 3. Realignment
purchase of supplies and
materials or the payment of in times of
services which are public calamity
exceptionally urgent or
absolutely indispensable to Appropriation Ordinance shall clearly indicate the
following:

prevent imminent danger - Sources of funds available for appropriations, as

certified under oath
- Various items of appropriations affected
to, or loss of, life or - Reasons for the change

property.
Steps in preparing a Supplemental Budget
Local Treasurer and Local Accountant prepare and certify the Statement of
Funding Sources to be attested by the Punong Barangay (BSBP Form No. 1,
see Page 33)

Local Treasurer prepares the Statement of Supplemental Appropriations to be

approved by the Punong Barangay (BSBP Form No. 2, Page 34)

Punong Barangay, through a covering letter, officially submits the two (2)
supplemental budget forms to the Sangguniang Barangay for authorization
through the enactment of a supplemental appropriation ordinance.
THANK YOU!