NATIONAL BUDGET CIRCULAR NO.

541 DATED JULY 18, 2012

Adaptation of Operational Efficiency Measure
Withdrawal of Agencies Unobligated Allotments as of
June 30, 2012
Incorporation: BEG No. 2012-19 dated July 20,2012
NATIONAL BUDGET CIRCULAR NO. 541 DATED
JULY 18, 2012
1.0 Rationale:
In order to accelerate spending and sustain the fiscal
targets during the year brought about by the unrealized
spending targets for the first five months of FY 2012
To enhance agencies performance and to formulate
strategies and improvement plans for the rest of 2012
To allow the maximum utilization of available allotments
to fund and undertake other priority expenditures of the
national government

NATIONAL BUDGET CIRCULAR NO. 541 DATED
JULY 18, 2012
2.0 Purpose:
To provide the conditions and parameters on the
withdrawal of unobligated allotment of agencies as of
June 30, 2012 to fund the priority and/or fast-moving
programs/projects of the national government.
To prescribe the reports and documents to be used as
bases on the withdrawal of said unobligated allotments;
and
To provide guidelines in the utilization or reallocation of
the withdrawn allotment.
(Budget Execution Guidelines No. 2012-19)
NATIONAL BUDGET CIRCULAR NO. 541 DATED
JULY 18, 2012
3.0 Coverage
1. Those unobligated allotments as of June 30, 2012 of
all NGAs charged against the FY 2011 Continuing
Appropriation and FY 2012 Current Appropriation,
pertaining to:
Capital Outlays
MOOE related to the implementation of programs and
projects, as well as capitalized MOOE; and
PS corresponding to unutilized pension benefits
declared as savings by the agencies concerned based
on their updated/validated list of pensioners
NATIONAL BUDGET CIRCULAR NO. 541 DATED
JULY 18, 2012
3.0 Coverage
2. Programs, Projects, Activities reflected in the DBM list
(Annex A) or specific programs and projects as may
be identified by the agencies
( Related to 2.2.1 of BEG No. 2012-19)
- Basis of issuance of Negative SARO:
a) Shown in Annex A of the NBC 541
b) Document submitted by the agency reflecting
specific P/A/Ps offered for withdrawal
NATIONAL BUDGET CIRCULAR NO. 541 DATED
JULY 18, 2012
4.0 Exemptions
1. NGAs
Constitutional Offices/Fiscal Autonomy Group, granted fiscal
autonomy under the Philippine Constitution; and
SUCs that are adopting the Normative Funding allocation
scheme
2. Fund sources
PS other than pension benefits;
MOOE items earmarked for specific purposes or subject to
realignment conditions per General Provisions of the GAA
Confidential and Intelligence Fund
Savings from travelling, communication , transportation and
deliver, repair and maintenance, supplies and materials and
utility which shall be used for the grant of CNA incentive
benefit


NATIONAL BUDGET CIRCULAR NO. 541 DATED
JULY 18, 2012
4.0 Exemptions (continuation)
Savings from mandatory expenditures which can be realigned
only in the last quarter after taking consideration the agencys
full year requirements
Foreign-Assisted Projects (loan proceeds and peso counterpart)
SPF
Quick Response Funds; and
Automatic Appropriations



NATIONAL BUDGET CIRCULAR NO. 541 DATED
JULY 18, 2012
5.0 Guidelines
1. NGAs shall continue to undertake procurement activities
notwithstanding the implementation of the policy of
withdrawal of unobligated allotments until the end of the
3
rd
quarter, FY 2012.
Even without allotment, proceed in the undertaking the
procurement process procurement planning up to conduct
of bidding but short of contract awarding (GPPB Circular
Nos. 02-2008 and 01-2009, and DBM CL No. 2010-9
Item 2.2.6 of BEG 2012-19 qualifies that P/A/Ps which are
found on going of its implementation and undergone
procurement process need not be withdrawn.






NATIONAL BUDGET CIRCULAR NO. 541 DATED
JULY 18, 2012
5.0 Guidelines
2. All departments/agencies/operating units (OUs) shall
submit budget accountability report as of June 30, 2012
to DBM not later than July 30, 2012 which will be the
basis in determining the amount of unobligated allotment
to be withdrawn.
SAOB (BAR 4)
Financial Report of Operations (BAR 2)
Physical Report of Operations (BAR 1)

(Related to item 2.2.4 of BEG No. 2012-19)


NATIONAL BUDGET CIRCULAR NO. 541 DATED
JULY 18, 2012
5.0 Guidelines
3. In the absence of the abovementioned reports, the
agencys latest report available shall be used by DBM as
basis for withdrawal of allotment.
DBM shall compute/ approximate the agencys obligation
level as of June 30 to derive the unobligated allotments.
Example:
SAOB as of March 31, 2012 actual obligation of P800M
Approximate agency obligation as of June 30, 2012:
= P800M x 2 (representing 2 quarters)
= P1,600M

(Related to 2.2.5 of BEG 2012-19)







NATIONAL BUDGET CIRCULAR NO. 541 DATED
JULY 18, 2012
5.0 Guidelines
4. Those unobligated allotment chargeable against the
FY 2011 Continuing Appropriation shall be immediately
considered for withdrawal.
Considerations:
Those approved P/P/As are assumed to be implementation-
ready and doable during the given fiscal year ; and
Carryover appropriations may imply that agency has a
slower-than-programmed implementation capacity or
agency tends to implement projects within a two years
timeframe.
Note: On-going P/A/Ps will not be withdrawn as indicated in
item 2.2.6 of BEG 2012-19






NATIONAL BUDGET CIRCULAR NO. 541 DATED
JULY 18, 2012
5.0 Guidelines (DBM role)
5. Consistent with the Presidents directive, the DBM shall,
based on evaluation of the reports cited above and results
of consultations with the departments/agencies, withdraw
the unobligated allotments as of June 30, 2012 through
issuance of negative SARO.
Issuance of Negative SARO directly to Agency/OUs
(Pursuant to item 2.2.7 of the BEG)
Guidelines on the evaluation of report (item 2.2.2 of BEG)
Validate allotment reports submitted by the agencies./OUs with DBM
record
OUs report vs DBM records
- SAOB -ABM/SARO releases
-FRO - ABM/SARO releases
- Financial Plan (BED 1)






NATIONAL BUDGET CIRCULAR NO. 541 DATED
JULY 18, 2012
5.0 Guidelines
Other disclosures required in BEG 2012-19
Under item 2.2.8 on the issuance of Negative SARO
Purpose:
This release shall cover withdrawal of unobligated allotments per
SAOB/FRO as of June 30, 2012. OR

This release shall cover withdrawal of unobligated allotments as
computed per SAOB/FRO as of (state cut-off month/day), 2012.

Notes:
Issuance of this negative SARO is consistent with NBC No. 541
dated July 18, 2012 re: Adoption of Operational Efficiency
Measure Withdrawal of Agencies Unobligated Allotments as of
June 30, 2012.

Under item 2.5
The ICTSS shall update the notes to be indicated in the SARO
consistent with this BEG










NATIONAL BUDGET CIRCULAR NO. 541 DATED
JULY 18, 2012
5.0 Guidelines (DBM role)
6. DBM shall prepare report on the magnitude of withdrawn
allotment and submit it to the President. The report shall
highlight the agencies which failed to submit the June 30
reports required under this Circular.
Guidelines on the Reporting arrangements:
Under item 2.6.1 of BEG 2012-19
BTS shall prepare the overall status on the withdrawn allotments
for submission to the OP.
Under Item 2.6.2 of BEG 2012-19
BMBs/ROs shall prepare the Status report of the withdrawn
unobligated allotment as of June 30 to be submitted to:
BMB-B for DepEd, DOH, CHED and TESDA
BMB-A for DPWH
Deadline: on or before October 2, 2012









NATIONAL BUDGET CIRCULAR NO. 541 DATED
JULY 18, 2012
5.0 Guidelines
7. The withdrawn allotments may be:
1) Reissued for the original programs and projects of the
agencies/OUs concerned, from which the allotment were
withdrawn;
2) Realigned to cover additional funding for other existing
programs and projects of the agency/OUs; or

Guidelines in the reissuance to same agency of positive SARO/s



(Related to item 1.2.1 of the BEG)





NATIONAL BUDGET CIRCULAR NO. 541 DATED
JULY 18, 2012
5.0 Guidelines
7. The withdrawn allotments may also be:
3) Used to augment existing programs and projects of any
agency and to fund priority programs and projects not
considered in the 2012 budget but expected to be started or
implemented during the current year.
Subject to the approval of the President
Release shall be implemented via the Disbursement
Acceleration Program (DAP) of the government
(Item 2.4 of the BEG)









NATIONAL BUDGET CIRCULAR NO. 541 DATED
JULY 18, 2012
5.0 Guidelines
8. Documentary Requirements
Reissuance and realignment of withdrawn allotment (of the same
agency)
Special Budget Request (SBR)
Physical and Financial Plan;
MCP
Proof that the project/activity has started the procurement
process Proof of Posting/Advertisement of Invitation to
Bid
Augmentation of withdrawn allotment (of another Agency)
Special Budget Request (SBR)
Physical and Financial Plan;
MCP
Approval of the President
(Related to item 2.3.1 and 2.4 of BEG 2012-19)





NATIONAL BUDGET CIRCULAR NO. 541 DATED
JULY 18, 2012
5.0 Guidelines
9. Deadline for submission of request/s end of the 3
rd

quarter of the year (September 30, 2012)
10. Utilization of the consolidated withdrawn allotments for
other priority programs and projects under item 5.7.3 of
this Circular, shall be subject to the approval of the
President.
DBM shall issue SARO to cover the approved priority
expenditures subject to submission by the agency/OU
concerned of the documentary requirements (SBR, PFP and
MCP)










NATIONAL BUDGET CIRCULAR NO. 541 DATED
JULY 18, 2012
5.0 Guidelines
11. All releases out of the withdrawn allotment shall be within
the approved Expenditure Program level of the national
government for the current year. The SARO to be issued
shall properly disclose the appropriation source of the
release to determine the extend of allotment validity, as
follows:
R.A. 10147 allotment shall be valid up to December 31, 2012
R.A. 10155 allotment shall be valid up to December 31, 2013

Procedural Guidelines in the issuance of Negative and Positive
SAROs shall be done thru the eBudget System, if practicable.
(Item 2.1 of BEG)










NATIONAL BUDGET CIRCULAR NO. 541 DATED
JULY 18, 2012
6.0 Effectivity
NBC No. 541 shall take effect immediately.