PHILIPPINE CHRISTIAN UNIVERSITY

PUBLIC FISCAL ADMINISTRATION

PROF. CRESENCIA VIRI

GROUP 2 MEMBERS:
A L B E RT O P O N C E A . B E L A R M I N O I I , M D ,
CFP
R U B Y A N N E M A E V. R U I Z , R P H
NOREEN A. ANG, RMT
K RY S T L E A R M I D . B O N D O C , R P H
 PHILIPPINE BUDGET
P R O C E SS &
S I G N I F I C A N T B U D G E TA RY
I N N OVAT I O N S

R E P O RT E D BY:
R U BY A N N E M A E V.
RUIZ, RPH
THE BUDGET CYCLE

 Budget Preparation Phase

 Budget Authorization/
Legislative Phase
 Budget Execution Phase
 Budget Accountability Phase
PHILPPINE BUDGET CYCLE
 BUDGET
PREPARATION
PHASE
 A. BUDGET PREPARATION PHASE

1. THE BUDGET CALL

• DBM issues the National Budget
Call yearly

• Budget Call contains the

following:
 Outline of policy guidelines and
procedures
 Fiscal Limits or Expenditure
Levels
BUDGET CALL:

 Coverage of Budget
Estimates
 Government Commitments
 Information and
Requirements on Regional
and long-term Budgeting
EARLY PREPARATION

• Under the Aquino Administration,

the DBM established a new
tradition of beginning the Budget
Preparation Phase earlier to
ensure that the National Budget
is enacted on time.
• The Budget Call is now issued in
December
• Submission of the President’s
Budget a day after the SONA
2. STAKEHOLDER ENGAGEMENT
• To increase citizen
participation they prepare their
agency budget proposals

• Departments and agencies are

tasked to partner with Civil
Society Organizations (CSO)
and other citizen stakeholders
DEPARTMENTS AND GOCCS MANDATED TO CONDUCT CSO CONSULTATIONS:
“BOTTOM-UP” BUDGETING
• Done for the first time in the
preparation of the 2013 National
Budget
• Aquino Administration, through the
Cabinet Cluster on Human
Development and Poverty Reduction
identified 300 to 400 of the poorest
municipalities and will engage these in
crafting community-level poverty
reduction and empowerment plans
“BOTTOM-UP” BUDGETING
• Budgeting will focus on rural
development programs
• Agencies will include community
plans in their proposed budgets
 3. TECHNICAL BUDGET HEARINGS
• Conducted after departments
and agencies submit the
Agency Budget Proposals to
the DBM
• Agencies defend their
proposed budgets
• DBM then reviews these
proposals to prepare
recommendations.
4. EXECUTIVE REVIEW
• Recommendations of DBM
are presented before an
Executive Review Board
composed of the DBM
Secretary and senior officials
• Deliberations here entail a
careful prioritization of
programs and corresponding
support,
• Implementation issues
discussed and resolved
 5. CONSOLIDATION, VALIDATION AND
CONFIRMATION
• DBM consolidates agency
budgets and recommendations
into National Expenditure
Program and BESF
• Deliberations by the DBCC
• Heads of major departments
are invited to this meeting.
6. PRESENTATION TO PRESIDENT AND CABINET
• Proposed budget is presented
by DBM and DBCC to the
President and Cabinet

• After approval of the proposed

National Expenditure Plan, the
DBM prepares and finalizes
the budget documents to be
submitted to Congress
 7. THE PRESIDENT’S BUDGET

• Submission of the proposed

National Budget to the
“President’s Budget” to
Congress
• The PRESIDENT’S BUDGET
consists of the following
documents :
 President’s Budget Message
(PBM)- policy framework and
priorities in the budget
PRESIDENT’S BUDGET:
 Budget of Expenditures and
Sources of Financing(BESF)
 National Expenditure Program-
details of spending for each
department and submitted in
the form of a proposed GAA
(General Appropriations Act)
 Details of Selected Programs
and Projects
 Staffing Summary
 BUDGET
LEGISLATION/
AUTHORIZATION
PHASE
 B. BUDGET LEGISLATION/
AUTHORIZATION PHASE
• legislative consideration and
approval of the Appropriations
Bill
• legislature acts on the budget
proposal of the President and
formulates an Appropriations
Act
 1. HOUSE DELIBERATIONS
• House Representatives in plenary
assigns the President’s Budget to
the House Appropriations Committee
• Schedule and conduct hearings and
scrutinize their respective programs
and projects.
• Crafts the General Appropriations
Bill (GAB)
• GAB is approved on Second and
Third Reading before transmission to
the Senate
 2. SENATE DELIBERATIONS

• Senate conducts its own Committee

hearings and plenary deliberations
after the House of representatives
transmits the GAB.
• The Committee submits its
proposed amendments to the GAB
to plenary only after it has been
formally transmitted by the House.
 
 
3. BICAMERAL DELIBERATIONS
• Once both Houses of Congress
have finished their
deliberations, they will each
constitute a panel to the
Bicameral Conference
Committee.
• Discuss and harmonize the
conflicting provisions of the
House and Senate
• Harmonized version of the GAB
is then produced
 4. RATIFICATION AND ENROLMENT

• Harmonized or “Bicam” version

is then submitted to both
Houses which will then vote to
ratify the final GAB for
submission to the President for
his approval, the GAB is
considered enrolled.
 5. THE VETO MESSAGE
• The President and DBM will then
review the GAB and prepare a Veto
Message
• Under the Consitution, the GAB is
the only legislative measure where
the President can impose a line-
veto. All other cases are either
approved or vetoed in full.
6. ENACTMENT
• If GAA is not enacted before the
fiscal year starts, the previous
year’s GAA is automatically re-
enacted
 BUDGET
EXECUTION
PHASE
C. BUDGET EXECUTION PHASE
1. Release Guidelines and
Program
• Begins with DBM’s issuance
of guidelines on the release
and utilization of funds
 2. BUDGET EXECUTION DOCUMENTS
(BEDS)
• Agencies are required to submit
their BEDs which outline agency
plans and performance targets.
• Include the physical and
financial plan, monthly cash
program, estimate of monthly
income and list of obligations
that are not yet due and
demandable
 3. ALLOTMENT AND CASH RELEASE
PROGRAMMING
• DBM prepares an Allotment Release
Program to set a limit for allotments
issued to an agency and on aggregate
• The ARP of each agency corresponds
to the total amount of the agency-
specific budget under the GAA, as well
as Automatic Appropriations.
• A Cash Release Program (CRP) is also
formulated alongside that to set a
guide for disbursement levels for the
year and for every month.
 
4. ALLOTMENT RELEASE
• Allotments which authorize an
agency to enter into an obligation
are either release by DBM to all
agencies comprehensively through
the ABM or Agency Budget Matrix
• This is where the people’s money
is actually spent and individually
via Special Allotment Release
Orders (SAROs)
AGENCY BUDGET MATRIX

• It is the comprehensive
allotment release document
for appropriations which do
not need clearance, or those
which have already been
itemized and fleshed out in the
GAA.
SPECIAL ALLOTMENT RELEASE ORDERS
(SAROS)
• Items identified as “needing
clearance” are those which
require the approval of DBM or
the President ex. lump sum
funds or intelligence funds
• The agency needs to submit a
Special Budget Request to DBM
with supporting documents.
Once approved, a SARO is issued.
5. INCURRING OBLIGATIONS
• Obligations are liabilities legally
incurred which the government
will pay for.
• These are various ways that an
agency “obligates”
• Ex. when it hires staff, receives
billings for the use of utilities or
enters into a contract with an
entity for the supply of goods or
services
6. CASH ALLOCATION
• To authorize an agency to pay the
obligations it incurs, DBM issues a
disbursement authority
• Most of the time it takes the form
of Notice of Cash Allocation (NCA)
and in special cases, Non-Cash
Availment Authority (NCAA) and
Cash Disbursement Ceiling (CDC)
NOTICE OF CASH ALLOCATION

• This is issued periodically by

DBM to cover cash requirements
• NCA specifies the maximum
amount of cash that can be
withdrawn
• The release of NCAs by DBM is
based on an agency’s submission
of its Monthly Cash Program and
other required documents
Non-Cash Availment Authority NCAA
• Issued to authorize non-cash
disbursements

Cash Disbursement Ceiling (CDC)

• Issued to departments with
overseas operations allowing them
to use income collected by their
foreign posts for their operating
requirements
7. DISBURSEMENT
• The final step of the budget
execution phase where
government cash are actually
spent.
• The budget process does not end
when government agencies
spend public funds. Each and
every peso must be accounted for
to ensure that it is properly used,
contributing to the achievement
of socio-economic goals.
 BUDGET
ACCOUNTABILITY
PHASE
D. BUDGET ACCOUNTABILITY PHASE
• The last phase in the budget process
involves submission of accountability
reports to fiscal agencies and to Congress.
• Preparation of financial and physical
reports
• Performance Reviews and Audits
• Auditing is detailed in examination of the
accounting books to ensure that all
expenses have been disbursed in
accordance with accounting regulations
and purpose for which funds have been
authorized.
 
1. PERFORMANCE AND TARGET
OUTCOMES
• Agencies are accountable not only
for how they use public funds but
also on how they attain
performance targets and
outcomes
• Performance measures are set
alongside the preparation of the
National Budget
2. BUDGET ACCOUNTABILITY REPORTS
• Submitted by agencies monthly
and quarterly
• BARs are required reports that
show how agencies use their
funds and identify physical
accomplishments
• No Report, No Release.
Starting 2012, DBM will be
withholding certain fund
releases to agencies that fail to
submit their BARs.
 3. REVIEW OF AGENCY PERFORMANCE
• DBM regularly reviews financial and
physical performance of agencies
through the BARs, OPIFs and BEDs
• Agency Performance reviews are
conducted quarterly or every semester
• An annual Budget Performance
Assessment Review (BPAR) is
conducted to determine agency’s
accomplishments and performance by
the year-end.
• DBM regularly reports results to the
President
 
 4. AUDIT
• Auditing is not within DBMs
jurisdiction, it is lodged under
COA
• DBM uses COA’s audit reports in
confirming agency performance,
determining budgetary levels
for agencies and addressing
issues in fund usage.
5. PERFORMANCE-BASED INCENTIVE
SYSTEM
• DBM is also in the process of
establishing a performance-
based incentive system which
will recognize and reward good
performance among government
employees.
• This will help improve the
efficiency of service delivery
across all government
institutions
 REFORMS AND
INNOVATIONS IN
THE BUDGET
PROCESS
 A. DEVELOPMENTS UNDER P.D. NO.
1177
• The provisions in the
Constitution of 1973 changed
the philosophy and structure of
the old budget process and
guided the enactment of P.D.
1177 on July 30, 1972 and this
decree institutionalized budget
reforms.
SECTION 3 OF P.D. 1177 SUMMARIZES THE
MAJOR THRUSTS OF THE BUDGETARY
REFORMS:
“a stronger linkage in the planning,
programing and budgeting sequence , the
close operating relationship between
budgeting and internal agency
management, a regionalized budget that is
supportive of a region based government
structure, the recognition that the national
budget is only part of the integrated whole
of a total national resource budget and the
need to prepare annual budgetsas one
step in implementing the national long-
term plan and budget program”
REFORMS AND INNOVATIONS IN THE
PHILIPPINE BUDGET SYSTEM
IN TERMS OF THE CHANGES IN EACH OF THE
STAGES OF THE BUDGET CYCLE:
1.) Budget Preparation
• From Fiscal Year to Calendar
Year
• Simplification of budget
document
• Reorganizing regional offices as
the basic budgeting unit
1.) BUDGET PREPARATION
• Increased attention to foreign
assisted projects
• Organizational changes and
strengthening of the role of
coordinating bodies
• National resource budget
development
 2.) BUDGET AUTHORIZATION
• Greater emphasis on project results
not on detailed items of expenditures
Legislature: focuses on budget policy
Executive: focuses on details of
expenditure
• GAA shall not contain any itemization
of personal services which limits the
past fondness of lawmakers with
positions and not with the programs
of agencies
 2.) BUDGET AUTHORIZATION

• Expenditures should be backed up

by existing proposed revenue
measures
• No additional appropriation
measures supported with existing
revenue measures shall be
enacted
• Prohibition against increase of
appropriations, additional special
provisions and transfer of funds
among various branches
 2.) BUDGET AUTHORIZATION

• Delegation of authority to
regional budget offices to save
time and effort
• Streamlined procedures
• Faster fund release for
purchase of equipment
amounting to Php 25,000 or
less, no DBM analysis needed
3.) BUDGET EXECUTION
• Comprehensive Fund Release
System: from quarterly to
automatic release
• Appropriations must equal
programmed funds unless a
reserve is imposed
• Partially computerized
monitoring and reporting
aspects to facilitate
administration of budget
allotment system
3.) BUDGET EXECUTION

• Tighter monitoring of local

counterpart support to foreign
assisted projects
• Integrated funds
programming, better
information system, emphasis
on inter-agency coordination
4.) BUDGET ACCOUNTABILITY
• Expanded budget accountability with
a more reliable and authoritative
analysis of stewardship of public
funds
• Continuous evaluation of DBM
• Enhancement of budget monitoring
and information system.
• National Accounting and Finance
Office of DBM now evaluates and
analyze accounts and overall
financial performance of government
B. DEVELOPMENT SINCE 1986
1.) Budget Procedure
a. Major determinants of funding
levels are the Program
Objectives and Intended
Outputs
b. Use of spatial and demographic
impact of fund allocation is
progressing through the
application of physical and
socioeconomic criteria in
regional fund distribution
1.) BUDGET PROCEDURE
c. Submission of 3 budget
documents to legislature to
improve decision-making
d. Budgetary decision making
extended to budget execution
stage through preparation of
WFPs
2.) BUDGET STRUCTURE
• Improved greatly in the
provision of social services
and employment generating
programs
 3.) BUDGET PROCESS
a. Enhancement of RDCs or
Regional Development Councils
as a development and resource
planning arm which strengthens
linkages at the national and
regional phase
b. Participation of local officials,
private sector and agency
officials in the deliberation and
decision-making at RDC level
3.) BUDGET PROCESS

c. Transparency in all phases of

budget process
d.Streamlining and
simplification of budget
process and strengthening of
control and accountability
mechanisms
 MARAMING
SALAMAT PO