Budget

Preparation

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
The Local Budget Process

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
The Local Budget Process

AUTHORIZATION
PREPARATION

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 “ 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],
R.A. No. 7160)
Republic of the Philippines
DEPARTMENT OF BUDGET AND MANAGEMENT
Budget Preparation
Budget Preparation is an executive
function pursuant to Section 331 (a), R.A.
No. 7160

“Upon receipt of the statement of income

and expenditures from the barangay
treasurer, the punong barangay shall
prepare the barangay budget for the
ensuing fiscal year in the manner and within
the period prescribed in this title and submit
the annual budget to the sangguniang
barangay for legislative enactment.”
Republic of the Philippines
DEPARTMENT OF BUDGET AND MANAGEMENT
Budget Preparation
Section 389 (b) (7), R.A. No. 7160
“In coordination with the barangay
development council, the punong
barangay shall prepare the annual
executive and supplemental budgets of
the barangay.”
Article 417, IRR, R.A. No. 7160
“Changes in the annual budget may be
done through supplemental budgets.”

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
Key Players
Punong Barangay

Barangay Treasurer

Barangay Development
Council

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
Steps in Preparing the Annual Budget
Step 1 . Barangay Treasurer submits the
detailed Statement of Income and
Expenditure (Article 423 [b], IRR of R.A.
No. 7160)

On or before September 5 – the city or

municipal treasurer (together with the city or
municipal accountant), shall issue a certified
statement covering the actual income of the
past year and estimates of income of the
current and ensuing fiscal years from local
sources for the barangay concerned

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 EX
IN PE

On or before September 15 –
CO ND
ITU
The treasurer shall submit to ME RE
the punong barangay a
statement covering the
estimates of income and
expenditures for the past,
current, and the ensuing fiscal
years. (pp 39-42)

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
Step 2. The Punong Barangay in coordination with
the BDC prepares the barangay budget (Section 389
[b] [7], R.A. No. 7160)

Task 1. The punong

barangay prepares the
estimated income for the
ensuing year upon receipt
of the statement of
income and expenditure
from the barangay
treasurer.
Republic of the Philippines
DEPARTMENT OF BUDGET AND MANAGEMENT
 Task 2. Of the total
general fund (estimated
income),
set aside 10% for the
Sangguniang Kabataan
(Section 329, R.A. No.
7160) and inform the SK
Chairperson, as soon as
possible, of the total
amount representing the
10% SK fund.
Republic of the Philippines
DEPARTMENT OF BUDGET AND MANAGEMENT
 Task 3. Sets aside not less
than
20% of the barangay IRA sh
are
for development
projects(Section 287, R.A.
No. 7160) shall be utilized
in accordance with DILG-
DBM Joint Memorandum
Circular No. 2017-1 dated
February 22, 2017
Republic of the Philippines
DEPARTMENT OF BUDGET AND MANAGEMENT
 Task 4. Provides budgetary
requirements (Section 331
[c], R.A. No. 7160)

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 • Payment of debts – must not exceed
20% of the regular income of the
barangay (Section 303; Section 324[b],
R.A. No. 7160)

• BDRRMF set aside not less than

five percent (5%) of estimated revenue
from regular sources
(R.A. No. 10121)
Republic of the Philippines
DEPARTMENT OF BUDGET AND MANAGEMENT
 Task 5. Computes the
mandatory requirements
for personal services
(PS), maintenance and
other operating
expenses (MOOE), and
capital outlays (CO).

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 • Total PS requirement for one (1) fiscal year
shall not exceed 55% of the total annual
income realized from local sources during
the next preceding fiscal year (Section 331
[b], R.A. No. 7160)

• Essential expenditures such as rental,

utilities, etc shall be given priority in the
allocation of funds (Section 331 [c]; Section
324 [b], R.A No. 7160)
Republic of the Philippines
DEPARTMENT OF BUDGET AND MANAGEMENT
 • 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)

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
Basic services and facilities include, but are
not limited to, the following:
1. Agricultural support services which include planting
materials distribution system and operation of farm
produce collection and buying stations;
2. Health and social welfare services which include
maintenance of Barangay health center and day-care
center;
3. Services and facilities related to general hygiene and
sanitation, beautification, and solid waste collection;
4. Maintenance of Katarungang Pambarangay;

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
Basic services and facilities include, but are
not limited to, the following:

5. Maintenance of Barangay roads and bridges and water

supply systems;
6. Infrastructure facilities such as multi-purpose hall,
multi-purpose pavement, plaza, sports center, and other
similar facilities
7. Information and reading center; and
8. Satellite or public market

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 Task 6. Consolidates the
estimated income and
the proposed
expenditures into:
 Part 1 – Receipts
Program
 Part 2 – Expenditure
Program

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 Task 7. Prepares the APP using
the prescribed format (Section
7, R.A. No. 9184)

Task 8. Prepares the Budget

message (Section 314 [b] [1],
R.A. No. 7160)

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
Step 3. Punong Barangay submits the proposed
Annual Budget to the Sangguniang barangay not
later than October 16 of the current fiscal year
(Section 318, R.A. No. 7160)

Budget Message List of Projects chargeable a

Plantilla of Personnel
Approved AIP
Annual Procurement Plan
gainst the 20% development
fund
DILG-endorsed GAD Plan
and Budget(pp114-115 BOMB)
Statement of Indebtedness
(if any)

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
Barangay Budget Preparation Forms

• 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

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
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

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 Barangay Budget Preparation
Form No. 1

Budget of Expenditures and

Sources of Financing

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 Percentage of
100% Collection amount collected
and received

Source Data of the

Receipts Program
shall be taken from
the Barangay
Budget Preparation
Form No. 1 (BBPF
No.1, BESF)
 Barangay Budget Preparation
Form No. 2

Programmed Appropriation by
PPA, Expense Class, Object of
Expenditure and Expected Results

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
Effective Administration Administrative and
of Barangay Housekeeping Support
Government Operations Services Provided

Source Data of the Expenditure

Program – Programmed
Appropriation by Program, Projects
and Activities (PPA), Expense Class,
Object of Expenditure and Expected
Results shall be taken from the
Barangay Budget Preparation Form
No. 2 (BBPF No. 2)
 Barangay Budget Preparation
Form No. 2A

List of Projects Chargeable against

the 20% Development Fund

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
Source Data for the
List of Projects
Chargeable against
the 20% Development
Fund shall be taken
from the Barangay
Budget Preparation
Form No. 2A (BBPF
No. 2A)
 Barangay Budget Preparation
Form No. 3

Plantilla of Personnel

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
 Barangay Budget Preparation
Form No. 4

Statement of Indebtedness

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT
Source Data for
the appropriation
for debt service
shall be taken
from the
Statement of
Indebtedness
under Barangay
Budget
Preparation Form
No. 4 (BBPF No.
2)
Guidelines on the Preparation of the FY 2020
Annual Budgets of Barangays
• Local Budget Memorandum (LBM) No. 78-A
• FY 2020 Total IRA shares of barangays
P129,784,249,200.00 and CARAGA 3,626,567,457.00

BIR Certification on the actual Section 285 of the Local

national internal revenue taxes Government Code of 1991
collected in FY 2016 (R.A. No. 7160)
Republic of the Philippines
DEPARTMENT OF BUDGET AND MANAGEMENT
 Changes in the Annual
Budget
General Rule

All budgetary proposals shall be

included and considered in the budget
preparation process (Section 321, R.A.
No. 7160).
Republic
Republic of
of the
the Philippines
Philippines
DEPARTMENT
DEPARTMENT OF OF BUDGET
BUDGET AND
AND MANAGEMENT
MANAGEMENT
 Exception

Changes in the annual budget may

be done through supplemental
budgets.
(Section 321, R.A. No. 7160 as
supplemented by Administrative
Order No. 47 dated April 12, 1993)
Republic
Republic of
of the
the Philippines
Philippines
DEPARTMENT
DEPARTMENT OF OF BUDGET
BUDGET AND
AND MANAGEMENT
MANAGEMENT
 Three (3) instances when the
barangay may enact supplemental
budgets:

• When supported by funds actually available as

certified by the local treasurer and local
accountant

Republic
Republic of
of the
the Philippines
Philippines
DEPARTMENT
DEPARTMENT OF OF BUDGET
BUDGET AND
AND MANAGEMENT
MANAGEMENT
 • If covered by
new revenue
sources

Republic
Republic of
of the
the Philippines
Philippines
DEPARTMENT
DEPARTMENT OF OF BUDGET
BUDGET AND
AND MANAGEMENT
MANAGEMENT
 • Realignment
in times of
public
calamity

Republic
Republic of
of the
the Philippines
Philippines
DEPARTMENT
DEPARTMENT OF OF BUDGET
BUDGET AND
AND MANAGEMENT
MANAGEMENT
 THANK YOU!

Republic of the Philippines

DEPARTMENT OF BUDGET AND MANAGEMENT