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Republic of the Philippines

COMMISSION ON AUDIT
OF.FICE OF THE CHAIRPERSON

Commonwealth Avenue, Quezon Cit y, Philippines

Ma. Gracia M. Pulido Tan


Chairperson

27 September 2012

His Excellem:y
BENIGNO SIMEON C. AQUINO III
President of the Philippines
Malacafiang, Manila

Dear Mr. President:


I have the honor to submit, pursuant to Section 4, Article IX-0 of the Constitution of the
Philippines, the following 2011 reports:
1.
2.

Audit Performance Summary Report


Annual Financial Repoti:s

National Governrrtet\t (Volumes 1-A and 1-D)

Government-Owned and/or Controlled Corporations (Volumes II-A and II- B)

Local Governmnt Units (Volumes IIIA and Ill-B)

The Audit Performance Summary Report contains the highlights of the Annual Financial
Reports, for quick reference.
find it useful.

This is our first Report of this nature, and we trust that you will

Very truly yours,

Phone: (632) 952-5700 local I 0 lt/931-9232/931-9220 /951-0936


Fax: (632) 931-9223
Email: cmgptan@coa.gov.ph
Wcl>sitc: www.coa.gov.ph

Republic of the Philippines

COMMISSION ON AUDIT
OFFICE OF TilE CHAIRPERSON
Commonwealth Avenue, Quezon City, Philippines

Ma. Gracia M. Pulido Tan


Chairperson

27 September 2012

His Excellency
BENIGNO SIMEON C. AQUINO Ill
President o f the Philippines
Malacaiiang, Manila

Dear Mr. President:


I have the honor to submit, pursuant to Section 4, Article IX-0 of the Constitution of the

Philippines, the following 2011 reports:


1.

2.

Audit Performance Summary Report


Annual Financial Reports

National Govemment (Volumes 1-A and 1-D)

Government-Owned and/or Controlled Corporations (Volumes II-A and 11-D)

Local Government Units (Volumes Ill-A and Ill-B)

The Audit Performance Summary Report contains the highlights of the Annual Financial
Reports, for quick reference.
find it useful.

This is our first Report of this nature, and we trust that you will

Very truly yours.

.
Phohe: (632) 952-5700 local I 0 II /931-9232 /931-9220 /951-0936
Fax: (632) 931-9223
Email: cmgplan@coa.gov.ph
Website: www.coa.guv.ph

.Ma. Gracia M. Pulido Tan


Chairperson

27 September 2012

The Honorable
JUAN PONCE ENRILE
President, Philippine Senate
GS.IS Complex, Pasay City

Dear Mr. President:

I have the honor to submit, pursuant to Section 4, Article IX-D of the Constitution of the
Philippines, the following 2011 reports:
1.
2.

Audit Performance Summary Report


Annual Financial Reports

National Government (Volumes 1-A and 1-B)

Government-Owned andfor Controlled Corporations (Volumes II-A and II-B)

Local Government Units (Volumes Ill-A and Ill-B).

The Audit Performance Summary Report contains the highlights of the Annual Financial
Reports, for quick reference.
find it useful.

This is our first Report of this nature, and we trust that you will

Very truly yours,

Phone: (632) 952-5700 localiOII/931-9232/931-9220 /951-0936


Fax: (632) 931-9223
Email: cmgptan@coa.gov.ph
Website: www.coa.gov.ph

Ma. Gracia M. Pulido Tan


Chairperson

27 September 2012

The Honorable
FELICIANO R. BELMONTE, JR.
Speaker, House of Representatives
National Government Center
Quezon City

Dear Mr. Speaker:


I have the honor to submit, pursuant to Section 4, Article IX-D of the Constitution of the
Philippines, the following 2011 reports:
1.
2.

Audit Performance Summary Report


Annual Financial Reports

National Government (Volumes 1-A and 1-B)

Government-Owned and/or Controlled Corporations (Volumes II-A and 11-B)

Local Government Units (Volumes lllA and Ill-B)

The Audit Performance Summary Report contains the highlights of the Annual Financial
Reports, for quick reference. This is our first Report of this nature, and we trust that you will
find it useful.

Very truly yours,

If

Fax:

Phone: (632) 952-5100 locaiiOll/931-9232/931-9220 /951-0936


(632) 931-9223
Email: cmgptan@coa.gov.ph Website: www.coa.gov.ph

Ma. Gracia M. Pulido Tan


Chairperson

27 September 2012

The Honorable
FRANKLIN M. DRILON
Chairman, Committee on Finance
Philippine Senate
GSIS Complex, Pasay City

Dear Senator Drllon:


I have the honor to submit, pursuant to Section 4, Article IXD of the Constitution of the

Philippines, the following 2011 reports:

1.
2.

Audit Performance Summary Report


Annual Financial Reports

National Government (Volumes 1-A and

lB)

G9vernment-Owned and/or Controlled Corporations (Volumes 11-A and


Local Government Units (Volumes 111-A and Ill-B)

II-B)

The Audit Performance Summary Report contains the highlights of the Annual Financial
Reports, for quick reference.
find it useful.

This is our first Report of this nature, and we trust that you will

Very truly yours,

Phone: (632)952-5700 local1011 /931-9232 I931-9220/951-0936


Email: cmgptan@coa.gov.ph
Website: www.coa.gov.ph

Fax: (632) 931-9223

Ma. Gracia M. Pulido Tan


Chairperson

27 September 2012

The Honorable
CHAIRMAN, COMMITIEE ON APPROPRIATIONS
House of Representatives
National Government Center
Quezon City

Dear Mr. Chairman:

I have the honor to submit, pursuant to Section 4, Article IX-D of the Constitution of the
Philippines, the following 2011 reports:
1.
2.

Audit Performance Summary Report


Annual Financial Reports

National Government (Volumes 1-A and 1-B)

Government-Owned and/or Controlled Corporations (Volumes II-A and II-B)

Local Government Units (Volumes Ill-A and Ill-B)

The Audit Performance Summary Report contains the highlights of the Annual Financial
Reports, for quick reference.
find It useful.

This is our first Report of this nature, and we trust that you will

Very truly yours,

Phone: (632) 952-5700 local1011/931-9232/931-9220 /951-0936


Website: www.coa.gov.ph
Email: cmgptan@coa.gov.ph

Fax: (632) 931-9223

2011
Annual Financial Report

National Government
Volume I-A

TABLE OF CONTENTS
Page
I.

INTRODUCTION

II.

REPORT HIGHLIGHTS

III.

APPROPRIATIONS, ALLOTMENTS, OBLIGATIONS AND BALANCES

18

Overview
Appropriations, Allotments, Obligations and Balances
IV.

FINANCIAL STATEMENTS
Condensed Balance Sheet
Condensed Statement of Income and Expenses
Condensed Statement of Government Equity
Condensed Statement of Cash Flows
Notes to Financial Statements

V.

44
45
46
47
48

FINANCIAL ANALYSES
Balance Sheet
Assets
Liabilities
Equity

59

Statement of Income and Expenses


Revenue/Income
Expenses
Other Income/Expense Items
Income/Loss

88

Statement of Cash Flows


Cash Inflows
Cash Outflows
Net Cash Provided By (Used)
Cash Balances

112

VI.

NATIONAL GOVERNMENT DEBT

121

VII.

SPECIAL ACCOUNTS IN THE GENERAL FUND

139

VIII.

COMPREHENSIVE AGRARIAN REFORM PROGRAM

144

IX.

COMMON AND SIGNIFICANT AUDIT OBSERVATIONS


AND RECOMMENDATIONS

158

List of Tables and Charts

Table No.

Particulars
Report Highlights

II-1
II-2
II-3
II-4
II-5

Allotment by Source of Appropriations and Allotment Class


Obligations by Source of Appropriations and Expenditure Class
Unalloted/Unrelased Appropriations, by Source
Unobligated Allotments, by Source
Comparative Composition of Liabilities
Appropriations, Allotments, Obligations and Balances

III-1
III-2
III-3
III-4
III-5
III-6
III-7
III-8
III-9
III-10
III-11
III-12
III-13
III-14
III-15
III-16
III-17
III-18
III-19
III-20

Appropriations, Allotments, Obligations and Balances


Comparative Details of Appropriations
Comparative Regular Appropriations By Department/Agency
Appropriations for Special Purpose Funds
Appropriations for Unprogrammed Fund
Budgetary Support to Government Corporations
Comparative Details of Allocations to LGUs
Automatic Appropriations
Continuing Appropriations by Department/Agency and Source
Sources and Nature of Allotments
Regular Allotments, by Department/Agency and Allotment Class
Allotment from Special Purpose Funds
GOCCs with Budgetary Support from the National Government
Allotments from Allocations to LGUs
Allotment from Priority Development Assistance Fund
Allotments from Automatic Appropriations
Summary of Unreleased Appropriations
Summary of Allotments, Obligations and Balances
Obligations Covered by Allotments, by Department/Agency and Allotment Class
Obligations Not Covered by Allotments, by Department/Agency and Allotment Class
Financial Analyses

V.1-1
V.1-2
V.1-3
V.1-4
V.1-5
V.1-6
V.1-7
V.1-8

Assets, Liabilities and Equity


Annual Growth in Assets CYs 2007-2011
Comparative Composition of Cash
Departments/Offices with more than P2.0 billion Cash in Bank Local Currency
Departments/Offices with more than P100 million Cash in Bank Foreign Currency
Details of Receivables by Account
Due from GOCCs Reported by the Bureau of the Treasury
Composition of Investments

ii

V.1-9
V.1-10
V.1-11
V.1-12
V.1-13
V.1-14
V.1-15
V.1-16
V.1-17
V.1-18
V.1-19
V.2-1
V.2-2
V.2-3
V.2-4
V.2-5
V.2-6
V.2-7
V.2-8
V.2-9
V.2-10
V.2-11
V.2-12
V.2-13
V.2-14
V.2-15
V.2-16
V.2-17
V.2-18
V.2-19
V.2-20
V.2-21
V.2-22
V.2-23
V.2-24
V.2-25
V.2-26
V.2-27
V.2-28
V.2-29
V.2-30

Major Classification of Property, Plant and Equipment


Components of Land and Land Improvements
Components of Buildings
Components of Construction in Progress
Agencies with more than P100 million worth of Public Infrastructures
Components of Other Assets Group
Comparative Components of Current Liabilities
Accounts Payable by Department/Office/Agency
Departments/Offices with Other Liabilities
Comparative Components of Long-term Liabilities
Departments/Offices with Completed Public Infrastructures and Reforestation
Projects
Income/Revenue, Expenses, Subsidies and Net Loss
Comparative Income Taxes, By Source
Comparative Taxes on Goods and Services, By Source
Comparative Components of Property Taxes
Departments/Offices Which Reported Service Income
Components of Other Income
Departments /Offices which Reported Interest Income
GOCCs/GFIs with Dividend Remitted to the DOF-BTr
Departments with Income from Grants and Donations
Departments/Offices which Reported Miscellaneous Income
Components of Business Income
Components of Permits and Licenses
Breakdown of Income, by Department/Office and by Book
Regional Breakdown of Income by Source
Departments/Offices that Reported Highest Amounts for Current Operating Expenses
Comparative Components of Personal Services
Departments/Offices which Reported Huge Expenses for Personal Services
Comparative Details of Maintenance and Other Operating Expenses
Departments/Offices which Reported Highest Expenses for Maintenance and Other
Operating Expenses
Comparative Consumption of Supplies and Materials By Top Departments/Offices
Departments/Offices with Big Amounts of Other Maintenance and Operating
Expenses
Comparative Components of Repairs and Maintenance Expenses
Comparative Details of Subsidy To LGUs, GOCCs and NGOs/POs
Comparative Breakdown of Subsidy to LGUs as Reported by DBM CO and ROs
Comparative Breakdown of Subsidy to GOCCs as Reported by DOF-BTr
Comparative Components of Financial Expenses
Regional Breakdown of Expenses and Subsidies
Comparative Details of Subsidy From (To) National Government Agencies
Comparative Details of Subsidy To NGAs as Reported by BTr NG Books
Comparative Details of Gains/(Losses)

iii

V.2-31
V.3-1
V.3-2
V.3-3
V.3-4
V.3-5
V.3-6
V.3-7
V.3-8
V.3-9
V.3-10

Comparative Condensed Statement of Income and Expenses


Comparative Revenue Generated, by Agency
Receipt of NCA, By Department
Breakdown of Other Receipts
Breakdown of Inflows from Investing
Breakdown of Borrowings
Remittances to NT, by Agency
Payment of Operating Expenses, by Department
Subsidies and Donations to Other NGAs/LGUs, NGOs/POs
Investments in Stocks, Bonds and Other Securities, by Department/Office
Composition of Financing Outflows
National Government Debt

VI-1
VI-2
VI-3
VI-4
VI-5
VI-6
VI-7
VI-8
VI-9
VI-10
VI-11

National Government Financing


Status of NG Debt
Comparative Outstanding NG Debt
Composition of Domestic Availments
Foreign Availments
Repayments by Creditor
Growth of Outstanding NG Debt
Comparative Interest Payments of the NG
Comparative Other Financial Expenses of the NG
Appropriations for Foreign-Assisted Projects by Department/Agency
Allotments for Foreign-Assisted Projects by Department/Agency
Special Account in the General Fund

VII-1

Appropriations, Allotments and Obligations, Special Account in the General Fund


(Net of CARP)
Comprehensive Agrarian Reform Program

VIII-1
VIII-2
VIII-3
VIII-4

Appropriation of CARP
Statement of Appropriations, Allotments, Obligations and Balances
Balance Sheet
Statement of Income and Expenses

iv

Particulars

Chart No.
Report Highlights
II-1
II-2
II-3
II-4
II-5
II-6

Appropriations, Allotments and Obligations


Allotments by Class
Assets, Liabilities and Equity
Comparative Composition of Assets
Results of Current Operations
Cash Flows, by Activities
Appropriations, Allotments, Obligations and Balances

III-1
III-2

Appropriations per GAA for FYs 2007 to 2011


Sources of Automatic Appropriations
Financial Analyses

V.1-1
V.1-2
V.1-3
V.1-4
V.2-1
V.2-2
V.3-1
V.3-2

Percentage Distribution of the Major Categories of Assets


Trend of Cash
Percentage Distribution of Property, Plant and Equipment by Classification
Trend of Liabilities
Comparison of Actual and Programmed Revenue
Expenses of the National Government
Segments of Cash Flows
Trend of Net Cash Provided by (Used in) Operating, Investing and Financing
Activities CY 2002-2011
National Government Debt

VI-1
VI-2
VI-3
VI-4
VI-5
VI-6

NG Debt by Source
Domestic Debt by Legal Source
Foreign Debt by Legal Source
NG Debt Growth
Actual Debt Service Expenditures of the NG
Principal Repayments of the NG
Special Account in the General Fund

VII-1

Total Assets, Liabilities and Equity, By Department, Special Account in


the General Fund (Net of CARP)
Income by Department, Special Account in the General Fund (Net of CARP)

VII-2

Common and Significant Audit Observations and Recommendations


IX-1

Summary of Audit Opinions

ACRONYMS
AAB
AAR
ABC
ABM
ACEF
ACPC
ADB
AFMP
AFP
AFPSLAI
AFR
AGDB
AGPF
AHS
ALDA
ALGU
ALI
ALI
AMWSLAI
ANC
AO
APP
APT
ARBOs
ARBs
ARCMTS
ARCPII
ARCs
ARE
ARF
ARISP
ARMM
ASU
AVACC
AVAs
BAC
BB
BC
BESF
BFAD
BFAR
BFT
BIR
BMBE
BnB
BOC
BOO
BOQ
BS
BSF
BSGC
BSP
BSPMC
BSWM
BTr
BU
BUPRE
BWSC
C.N.A.
CARP
CB-BOL
CCCP
CCNTS
CCT
CDF
CENRO

Authorized Agent Bank


Annual Audit Report
Approved Budget for the Contract
Agency Budget Matrix
Agricultural Competitiveness Enhancement Fund
Agricultural Credit Policy Council
Asian Development Bank
Agricultural Fisheries and Modernization Program
Armed Forces of the Philippines
Armed Forces of the Philippines Savings and Loan
Association, Inc.
Annual Financial Report
Authorized Government Depository Bank
Agricultural Guarantee Pool Fund
Autonomous High School
ARCs Level of Development Assessment
Allocation to Local Government Units
Agrarian Law Implementation
Ayala Land, Inc.
Air Material Wings Savings and Loan Association, Inc.
Applied Nutrition Council
Administrative Order
Annual Procurement Program
Asset Privatization Trust
Agrarian Reform Beneficiaries Organizations
Agrarian Reform Beneficiaries
ARCs Monitoring and Tracking System
ARC Project II
Agrarian Reform Communities
Acknowledgement Receipt for Equipment
Agrarian Reform Fund
Agrarian Reform Infrasturture Support Projects
Autonomous Region in Muslim Mindanao
Aklan State University
Camp Aguinaldo Veterans and Association Credit
Cooperative
Agribusiness Entrepreneurship Development Program
Bids and Award Committee
Barangay Bagsakan
Barangay Center
Budget of Expenditures and Sources of Financing
Bureau of Food and Drugs Administration
Bureau of Fisheries and Aquatic Resources
Barangay Food Terminal
Bureau of Internal Revenue
Barangay Micro Business Enterprise
Botika ng Barangay
Bureau of Customs
Build-Own-Operate
Bureau of Quarantine
Balance Sheet
Bond Sinking Fund
Budgetary Support to Government Corporations
Bangko Sentral ng Pilipinas
Barangay Sub-Project Management Committees
Bureau of Soils and Water Management
Bureau of the Treasury
Bicol University
Bureau of Post-Harvest Research and Extension
Bureau of Workers of Special Concerns
Collective Negotiation Agreement
Comprehensive Agrarian Reform Program
Central Bank of the Philippines Board of Liquidators
Climate Change Congress of the Philippines
Cientos National Trade School
Conditional Cash Transfers
Countrywide Development Fund
Community Environment and Natural Resources Office

vi

CFLs
CHD
CHED
CHR
CICT

Compact Fluorescent Lamps


Center for Health Development
Commission on Higher Education
Commission on Human Rights
Commission on Information and Communications
Technology
CIP
Construction in Progress
CLSU
Central Luzon State University
CMU
Central Mindanao University
CNA
Collecting Negotiation Agreement
CNSC
Camarines Norte State Colleges
CO
Capital Outlay
CO
Central Office
COA
Commission on Audit
COMELEC Commission on Elections
COP
Congress of the Philippines
COPIPAGV Comprehensive Pilot Intervention Plan Against Gender
and Violence
COR
Cash Operations Report
CPCP
Catholic Bishops Conference of the Philippines
CS
Certified Seeds
CSC
Civil Service Commission
CSU
Cagayan State University
CTU
Cebu Technological University
CVLMROS Cagayan Valley Lowland and Marine Research Outreach
CVS
Compliance Verification System
CY
Calendar Year
DA
Department of Agriculture
DAP
Disbursement Acceleration Program
DAR
Department of Agrarian Reform
DBM
Department of Budget and Management
DBP
Development Bank of the Philippines
DENR
Department of Environment and Natural Resources
DepED
Department of Education
DFA
Department of Foreign Affairs
DILG
Department of the Interior and Local Government
DMMMSU Don Mariano Marcos Memorial State University
DND
Department of National Defense
DO
Division Office
DOE
Department of Energy
DOF
Department of Finance
DOH
Department of Health
DOJ
Department of Justice
DOLE
Department of Labor and Employment
DOST
Department of Science and Technology
DOT
Department of Tourism
DOTC
Department of Transportation and Communications
DPERF
DMMMSU Pig Extension Research Farm
DPWH
Department of Public Works and Highways
DREAM
Disaster Risk Exposure, Assessment on Mitigation
DRF
Debt Repayment Fund
DRPs
Development Rights Payments
DSF
Debt Service Fund
DSWD
Department of Social Welfare and Development
DTI
Department of Trade and Industry
DVs
Disbursement Vouchers
E.O.
Executive Order
EAMC
East Avenue Medical Center
ECs
Electric Cooperatives
EDC
Energy Development Corporation
EFPS
Electronic Filing and Payment System
ENP
Emergency Network Project
ERC
Energy Regulatory Commission
FAO
Fisheries Administrative Order
FBs
Farmer Beneficiairies
FDP-HEDF Faculty Development Program-Higher Education
Dev't Fund
FE
Financial Expenses

ACRONYMS
FLA
FMR
FS
FY
GAA
GAAM
GAAP
GAS
GFIs
GHQ
GL
GMDSS
GOCCs
GOP
GSIS
HBR
HDMF
HEDF
HEI
HGC
HIFHI
HILROS
HUDCC
IA
IACAT
IAs
IBRD
IBs
IGP
ILS
IMF
IRA
IROWR
IRR
ISF
IT
JBIC
JDF
JORIFA
JRMSC
KGA
KMS
LABATT
LAD
LAO
LBP
LC
LCC
LCCA
LGUs
LRA
LTFRB
LTI
LTO
LUUSRAI
LWOP
MDFO
MDS
MIAA
MICP
MIGA
MLs
MMDA
MNGAS
MOA
MOOE
MPBF
MRT

Fishpond Lease Agreement


Farm-to-Market Roads
Financial Statements
Fiscal Year
General Appropriations Act
Government Accounting and Auditing Manual
Generally Accepted Accounting Principles
Government Accountancy Sector
Government Financial Institutions
General Headquarters
General Ledger
Global Maritime Distress and Safety System
Government-Owned and/or Controlled Corporations
Government of the Philippines
Government Service Insurance System
Held Baggage Receipt
Home Development Mutual Fund
Higher Education Development Fund
Higher Education Institutions
Home Guaranty Corporation
Hospital with Heaven Indulge Food House Inc.
Hillyland Research Outreach Station
Housing and Urban Development Coordinating Council
Irrigators Association
Inter Agency Council Against Trafficking
Implementing Agencies
International Bank Reconstruction Development
Incandescent Bulbs
Income Generating Project
Institute for Labor Studies
International Monetary Fund
Internal Revenue Allotment
Infrastructure Right Way and Resettlement
Implementing Rules and Regulations
Informal Settler Families
Information Technology
Japan Bank for International Cooperation
Judiciary Development Fund
Jose Rizal Famers Association
Jose Rizal Memorial State College
Keeping the General Accounts
Kilometres
Labor Attache
Land Acquisition and Distribution
Legal Adjudication Office
Land Bank of the Philippines
Letters of Credit
LGU Counterpart Commitment
Local Currency Current Account
Local Government Units
Land Registration Authority
Land Transportation Franchising and Regulatory Board
Land Tenure Improvement
Land Transportation Office
La Union United Swine Raisers Association, Inc.
Leave Without Pay
Municipal Development Fund Office
Modified Disbursement System
Manila International Airport Authority
Manila International Container Port
Multilateral Investment Guaranty Agency
Management Letters
Metropolitan Manila Development Authority
Manual on NGAS
Memorandum of Agreement
Maintenance and Other Operating Expenses
Miscellaneous Personnel Benefit Fund
Metro Rail Transit

vii

MRTB
MRTDC
MSMEs
MSU
MWSS
NABCOR
NAFC
NAIA
NAPCO
NASSA
NBI
NCA
NCAA
NCR
NDA
NDC
NEDA
NEUST
NFA
NG
NGAs
NGAS
NGDAD
NGLAGU
NGOs
NGP
NHA
NHMFC
NIA
NIPAS
NLRC
NLSF
NORSU
NPC
NSO
NT
NTCA
NWRB
ObR
ODA
OEO
OFW
OMB
OP
OSEC
OSG
OTC
OTOP
4Ps
PACCU
PADCC
PAF
PAGASA

Multi Currency Retail Treasury Bond


Metro Rail Transit Development Corporation
Micro, Small and Medium Enterprises
Mindanao State University
Metropolitan Waterworks and Sewerage System
National Agribusiness Corporation
National Agricultural and Fishery Council
Ninoy Aquino International Airport
National ARCESS Program Coordinating Office
National Secretarial for Social Change
National Bureau of Investigation
Notice of Cash Allocation
Non-Cash Availment Authority
National Capital Region
National Dairy Authority
National Development Company
National Economic and Development Authority
Nueva Ecija University of Science and Technology
National Food Authority
National Government
National Government Agencies
New Government Accounting System
National Government Debt Accounting Division
National Government Assistance to LGUs
Non-Governmental Organizations
National Greening Program
National Housing Authority
National Home Mortgage Finance Corporation
National Irrigation Administration
National Integrated Protected Areas System
National Labor Relations Commission
National Livelihood Support Fund
Negros Oriental State University
National Power Corporation
National Statistics Office
National Treasury
Notice of Transfer of Cash Allocation
National Water Resources Board
Obligation Request
Official Development Assistance
Other Executive Offices
Overseas Filipino Worker
Optical Media Board
Office of the President
Office of the Secretary
Office of the Solicitor General
Over-the-Counter
One-Town-One Product
Pantawid Pamilyang Pilipino Program
Public Assistance and Complaints Coordinating Unit
Philippine Agribusiness Developmen Council Corporation
Philippine Air Force
Philippine Atmospheric, Geophysical and Astronomical
Services Administration
PAGCOR
Philippine Amusement and Gaming Corporation
PAG-IBIG
Pagtutulungan sa Kinabukasan: Ikaw, Bangko Industriya
at Gobyerno
PAL
Private Agricultural Lands
PAPs
Programs, Activities and Projects
PARO
Provincial Agrarian Reform Office
PASCOFBEC Palmera Small Coconut Farmers Beneficiaries
Cooperatives
PBD
Program Beneficiaries Development
PCA
Philippine Coconut Authority
PCC
Philippine Carabao Center
PCG
Philippine Coast Guard
PCGG
Presidential Commission on Good Government
PCOO
Presidential Communications Operations Office

ACRONYMS
PCSO
PD
PDAF
PDIC
PEEP
PEI
PENRO
PERA
PGF
PHC
PHIC/PHILHEALTH
PHILSCA
PI
PITAHC
PITC
PME
PMO
PNB
PNCC
PNHB
PNOC
PNP
PNPP
PNR
POCC
POE
POEA
POLO
POLOs
POs
PPA
PPE
PPELC
PRC
PRRC
PS
PS
PSF
PTA
PTAP
PVAO
PVB
PY
R.A.
RA
RAD
RAO
RAPAL
RASPF
RaSSFIP
RATA
RFU
RHIBs
RLIP

Philippine Charity Sweeptakes Office


Presidential Decree
Priority Development Assistance Fund
Philippine Deposit Insurance Corporation
Philippine Energy Efficiency Project
Productivity Enhancement Incentive
Provincial Environment and Natural Resources Office
Personnel Emergency Relief Allowance
Pension Gratuity Fund
Philippine Heart Center
Philippine Health Insurance Corporation
Philippine State College of Aeronautics
Public Infrastructure
Philippine Institute of Traditional and Alternative Health
Care
Philippine International Trading Center
Planning, Monitoring and Evaluation
Privatization and Management Office
Philippine National Bank
Philippine National Construction Corporation
Philippine Navy Housing Board
Philippine National Oil Company
Philippine National Police
Philippine Nuclear Power Plant
Philippine National Railways
Philippine Oncology Cancer Center
Program of Expenditures
Philippine Overseas Employment Administration
Philippine Overseas Labor Office
Philippine Overseas Labor Officers
Peoples Organizations
Philippine Ports Authority
Property, Plant and Equipment
Property, Plant and Equipment Ledger Card
Professional Racing Commission
Pasig River Rehabilitation Commission
Personal Services
Procurement Service
President Social Fund
Philippine Tourism Authority
Public Transport Assistance Program
Philippine Veterans Affairs Office
Philippine Veterans Bank
Prior Year
Republic Act
Regular Agency
Revenue Accounting Division (BIR)
Registry of Allotments and Obligations
Registry of Appropriations and Allotment
Registry of Appropriations for Special Purpose Fund
Rapid Seed Supply Financing Project
Representation Allowance and Transportation Allowance
Regional Field Unit
Rigid Hull Inflatable Boats
Retirement and Life Insurance Premium

viii

ROCO
ROI
ROP
ROW
RPCPPE
RPMO
RPSU
RSMI
RWS
SAAOB

Regional and Overseas Coordinating Office


Report of Income
Republic of the Philippines
Right of Way
Report of the Physical Count of PPE
Regional Project Management Office
Regional Payroll Services Unit
Report of Supplies and Materials Issued
Rural Water Supply
Statement of Appropriations, Allotments, Obligations
& Balances
SAFE
Student Assistance Fund for Education
SAGF
Special Account in the General Fund
SAJ
Special Allowance for the Judiciary
SAOB
Statement of Allotments, Obligations and Balances
SARO
Special Allotment Release Order
SBGFC Small Business Guarantee and Finance Corporation
SCBA
Self Contained Breathing Apparatus
SCF
Statement of Cash Flows
SDs
Supporting Documents
SEA
Self-Employment Assistance
SGF
Special Guaranty Fund
SIE
Statement of Income and Expenses
SING
Subsidy Income from National Government
SL
Subsidiary Ledgers
SLC
Supplies Ledger Card
SPF
Special Purpose Fund
SPTB
Special Purpose Treasury Bonds
SRF
Special Reserve Fund
SRMS
Supplementary Reading and Reference Materials
SRTC
Statistical Research and Training Center
SSF
Securities Stabilization Fund
SSS
Social Security System
STF
Special Trust Fund
STII
Science and Technology Information Institute
STUFAP Student Financial Assistance Program
STW
Shallow Tube Wells
SUCs
State Universities and Colleges
SVLP
Special Vehicle Loan Program
TBPs
TekBok Providers
TCC
Tax Credit Certificates
TCCP
Tariff and Customs Code of the Philippines
TDM
Tax Debit Memo
TESDA
Technical Education and Skills Development Authority
TNP
Tindahan Natin Project
TOP
Treasurer of the Philippines
UCPB
United Coconut Planters Bank
UNICEF United Nations Children's Fund
UP
University of the Philippines
USF
Ubay Stock Farm
VMMC
Veterans Memorial Medical Center
WFP
Work and Financial Plan
WMSU
Western Mindanao State University
ZCSECA Zamboanga City Special Economic Zone Authority

I. INTRODUCTION

INTRODUCTION
1.1 Legal Bases
The Commission on Audit (COA) is mandated under Section 4, Article IX-D of
the Philippine Constitution to submit to the President and Congress the Annual
Financial Report (AFR) of the National Government. On the other hand, Section 41 of
Presidential Decree No. 1445, otherwise known as the Auditing Code of the
Philippines, requires that an annual report on the financial condition and results of
operation of all agencies of the government, which shall include recommendations of
measures necessary to improve their effectiveness and efficiency shall be submitted not
later than September 30 of each year.
In conformity with this mandated function, the COA, through the Government
Accountancy Sector (GAS) submits to the President and the Congress the Annual
Financial Report (AFR) of the National Government (NG) for calendar year (CY) 2011.
1.2 Objectives
The AFR aims to provide information on the total approved budget/authorized
appropriations, releases of allotments, utilization/obligations incurred and Notice of
Cash Allocations (NCA) received by national government agencies (NGAs), cash
inflows and outflows and the financial condition and results of operations as shown in
the consolidated financial statements of the NGAs. The budget data serve as useful
tools for the Congress in the enactment of appropriations and other laws, while the other
information presented in the AFR aspires to guide the President, legislators, economic
planners and other government executives in the formulation of economic policies, in
the development of budget plans, and in aid of legislation.
1.3 Contents/Features
The AFR presents the main financial statements, namely: Balance Sheet (BS),
Statement of Income and Expenses (SIE), Statement of Government Equity (SGE) and
Statement of Cash Flows (SCF), in condensed and detailed form with comparative
figures for CYs 2010 and 2011. It also features the appropriations, allotments,
obligations and balances by department/agency and by source, and the common and
significant audit observations and recommendations.
The report comprises of the following:
Volume I-A

Contains the Report Highlights, Condensed Financial


Statements, and Financial Analyses, and write-ups on the
Appropriations, Allotments, Obligations and Balances, NG
Debt, Special Accounts in the General Fund, and
Comprehensive Agrarian Reform Program

Volume I- B Includes the Detailed Financial Statements by Department/


Office, Schedules and Annexes

1.4 Methodologies
1.4.1

Appropriations, Allotments, Obligations and Balances


The budget data shown in this report include the total current years
appropriations, prior years appropriation balances or continuing appropriations
set by law to be available until the end of the year and automatic appropriations
which do not require periodic action by Congress. The total allotments released
by the Department of Budget and Management (DBM) during the year are
monitored and recorded in the Registry of Appropriations and Allotments
(RAPAL) maintained by COA-GAS. These information are summarized
together with the obligations incurred based on the Statement of Allotments,
Obligations and Balances submitted by NGAs.
The appropriations and allotments were reconciled with the records of the
DBM and the NGAs and necessary corrections and adjustments were
communicated and effected accordingly. Similarly, obligations incurred by
agencies were verified to ascertain that such commitments were duly covered by
allotments and overdraft in allotments, if any, was properly coordinated with the
concerned agency.

1.4.2 Financial Statements


The 2011 financial reports of the NG were prepared by agency accountants
in accordance with the rules and regulations under the New Government
Accounting System (NGAS). The accounts in the advance copies of trial
balances submitted by NGAs were uploaded into the AFR System from which
the individual agency BS, SIE as well as the SGE were generated and compared
with the audited FS submitted by the COA audit sector. The system also
generated the overall consolidated FS by department/office.
The elimination of inter-agency and intra-agency accounts was based on the
overall BS. The inter-agency receivables were eliminated with the inter-agency
payables to reflect the amount of cash expected to be realized from the
receivables and the actual payables subsisting between NGAs, LGUs and
GOCCs. On the other hand, the intra-agency receivables were also eliminated
with intra-agency payables to reflect the balances of reciprocal accounts
subsisting between the Central Offices (COs), the Regional Offices (ROs)/Staff
Bureaus, and the Operating Units (OUs). After the elimination, however, the
inter-agency and intra-agency accounts still have balances since these are not
reconciled at the agency level.
The total income of the NG was based on the consolidated SIE generated
from the system presented by Regular Agency (RA) Book and National
Government (NG) Book. The breakdown of the total income presented in this
report was based on the consolidated Report of Income (ROI) submitted by the
NGAs, since under the NG Book maintained by the Bureau of the Treasury
(BTr.), the various tax revenue accounts are categorized as Other National Taxes
while the non-tax revenue accounts are lumped in Other Service Income.
2

The SCF submitted by NGAs were analyzed and converted into the
prescribed format to facilitate inputting and processing of data into the AFR
system. Due to lack of a module to offset collections of income/revenue against
remittances to the National Treasury, manual computation was done. The
offsetting, however, was done on the overall SCF due to lack of information as
to the nature of remittances made. The intra-agency and inter-agency transfers
were also not eliminated in the absence of data as to the transferor/donor and
transferee/recipient. The system generated the overall consolidated SCF by
book, by department/office and by agency.
1.4.3

National Government Debt


The data on NG debt were based on the 2011 advance copy of the FS,
Actual Debt Service Expenditures provided by the BTr, Department of Finance.
Budget information were sourced from the 2012 Budget of Expenditures and
Sources of Financing (BESF) and the 2011 General Appropriations Act (GAA),
R.A. No. 10147, furnished by the Department of Budget and Management
(DBM). The National Government Debt Accounting Division (NGDAD), BTr
submits to COA-GAS the analyses of loans and bonds payable, both foreign and
domestic. Based on the analyses, the data on beginning balances of outstanding
NG debt are reconciled with the ending balances reflected in the 2010 report. The
availments and repayments during the year were also based on the NGDAD
analyses. The ending balance of NG debt is reconciled with the Loans and Bonds
Payable, foreign and domestic, appearing in the BS of the BTr - NG Book.
Appropriations for foreign assisted projects by department/agency were taken
from the 2011 GAA, while releases of allotments were based on the Agency
Budget Matrices (ABMs) and individual Special Allotment Release Orders
(SAROs) of the particular agencies. Comparative data between programmed and
actual budget for NG debt were based on the BESF and the COR.

1.4.4 Special Account in the General Fund (SAGF)


The financial information for SAGF as of December 31, 2011 were obtained
after the consolidation of the trial balances submitted by national government
agencies except the CARP (Fund 158) which is presented in Part VIII of this
report. Transactions pertaining to SAGF, which were integrated in the General
Fund 101 of the departments/agencies since no separate books were maintained,
were not included herein. However, the income collected by various NGAs and
remitted to the National Treasury was included based on the actual income
recorded in the books of the BTr either as Grants and Donations or Other Service
Income. The utilization of the amount is subject to the approval of special budget
released through SAROs and issuance of NCAs.
1.4.5 Comprehensive Agrarian Reform Fund (CARP)
The data on budget/appropriations, allotments and obligations presented in
this portion were gathered from the materials submitted by the Presidential
Agrarian Reform Council (PARC) and from the DAR auditing unit in-charge of
the consolidation of the CARP.
3

The 2011 data on appropriations, allotments and obligations submitted by the


seven (7) implementing agencies (IA) to PARC were compared with that of the
SAOB submitted by the IAs to COA-GAS to reconcile the figures. However,
discrepancies were noted, thus for purposes of this report, the data gathered by
the COA-GAS for fiscal year 2011 are presented.
Consolidation of fiscal year 2011 Balance Sheet and Statement of Income
and Expenses of all implementing agencies pertaining to CARP (Fund 158) and
the accounts of CARP-Land Bank of the Philippines (LBP) was done in order to
come up with the consolidated data on assets, liabilities, equity, income and
expenses.
1.5

Coverage
This years financial data were obtained from the audited and advance copies of
financial statements (FS)/reports of 329 agencies. Of the total number of NGAs, only
five have not submitted their financial reports namely, Eastern Visayas State
University, Iloilo State College of Fisheries, National Climate Change Commission,
Cultural Center of the Philippines and Fiber Industry Development Authority
(National Government Book only). Of the 494 targeted number of FS/Preliminary
Trial Balances (PTBs) to be included in the AFR, 224 or 45.34 percent are based on
the audited FS while the 270 or 54.66 percent are from the advance copies of FS
submitted by the NGAs accounting units. The unsubmitted audited FS of other
departments/offices were received by GAS after the cut-off date.

II. REPORT HIGHLIGHTS

REPORT HIGHLIGHTS

2.1 Budget Information


The total appropriations, allotments and obligations for FY 2011 as reported by national
government agencies amounted to P2.409 trillion, P2.161 trillion, and P1.997 trillion,
respectively. Chart II-1 shows the graphical presentation of appropriations, allotments, and
obligations.
Chart II - 1 Appropriations, Allotments and Obligations
(in billion pesos)
2,408.79
2,161.40
1,997.29

Appropriations

Allotments

Obligations

2.1.1 Appropriations P2.409 trillion


This years total available appropriations amounted to P2.409 trillion for the
NG operations, financial subsidy to LGUs, budgetary support to GOCCs, repayment
of loan principal and payment of interest and for other purposes. These were lower
by 3.55 percent or P88.69 billion than the 2010 level of P2.497 trillion.
The sources of appropriations for this year were the following:
Republic Act (RA) No. 10147
Other Acts
Balance of Previous Years
Appropriations

P1,326.79 billion
766.93 billion
315.06 billion

The appropriations authorized under RA No. 10147, otherwise known as the


General Appropriations Act (GAA) of 2011 amounting to P1.327 trillion, comprised
of Regular Appropriations P758.61 billion, Special Account in the General Fund
P12.57 billion, Special Purpose Funds (SPF) P229.21 billion and Automatic
Appropriations P326.41 billion.
5

The details of appropriations authorized under Other Acts or laws for the year
totaling P766.93 billion were as follows:
Amount
(in million pesos)
1. Debt Service Fund (DSF)
710,264.41
Principal Repayment
444,196.12
Interest Payment
266,068.29
2. Retirement and Life Insurance Premium
25,430.61
3. Special Account in the General Fund (SAGF)
31,231.76
Total

766,926.78

Difference between totals and sum of components is due to rounding off.

The unobligated/unreleased balance of the preceding years appropriations


authorized to be used in the current year under RA No. 9970, the 2010 GAA, and
other laws amounting to P315.07 billion consisted of the following:

1. Unobligated Allotments
RA No. 9970
Regular Appropriations
Special Purpose Fund
Automatic Appropriations
Other Acts
Regular Appropriations
Automatic Appropriations
2. Unreleased Appropriations
RA No. 9970
Regular Appropriations
Special Purpose Fund
Automatic Appropriations
Special Account in the General Fund
Total

Amount
(in million pesos)
91,315.22
81,369.65
66,812.53
12,240.31
2,316.81
9,945.57
3,256.63
6,688.94
223,750.20
223,750.20
76,347.57
147,397.63
5.00
5.00
315,065.42

Difference between totals and sum of components is due to rounding off.

2.1.2 Allotments P2.161 trillion


Of the total available appropriations, P2.161 trillion or 89.73 percent was
released/allotted to fund the programs and projects of various NGAs, including
repayment of loan principal, and payment of interest, commitments fees and other
charges. These were sourced from the following: RA No. 10147 P 1.258 trillion,
Other Acts P766.93 billion and forwarding balances of continuing appropriations
P136.08 billion. Table II - 1 presents the details of allotments by source and
allotment class.

Table II - 1 Allotment by Source of Appropriations and Allotment Class


(in million pesos)
Source
RA No. 10147
Regular
SPF
SAGF
Automatic
IRA
Tax Subsidy
Customs
Duties
SAGF
Grants and
Donations
Tax Refunds
NIPAS
Sale of Assets
Other Acts
Automatic
DSF
Principal
Interest
RLIP
SAGF
Continuing
Unobligated
RA No. 9970
Regular
SPF
Automatic
Other Acts
Regular
Automatic
Unreleased
Regular
SPF
Grand Total

Total

PS

Allotment Class
MOOE

CO

FE

1,258,396.96
758,632.14
161,804.84
11,554.05
326,405.92
286,944.24
18,999.93

_481,797.44
399,406.94
79,700.40
2,372.55
____ 317.55
-

581,698.93
184,954.91
63,222.28
8,956.95
324,564.78
286,944.24
18,999.93

194,898.02
174,267.72
18,882.15
224.55
1,523.59
-

14,420.64
3,169.73

311.04

14,420.64
2,269.22

589.46

2,548.05
294.04
20.00
9.29

6.51
-

1,620.13
294.04
16.39
0.19

921.42
3.61
9.11

766,926.78
710,264.41
444,196.12
266,068.29
25,430.61
31,231.76
136,077.38
91,315.22
81,369.65
66,812.53
12,240.31
2,316.81
9,945.57
3,256.63
6,688.94
44,762.16
9,830.80
34,931.35
2,161,401.12

2.57
2.57
-_
-

__25,435.65
-_
25,430.61
5.04
1,083.43
1,083.43
572.91
533.04
1.27
38.60
510.52
481.12
29.40
-

16,761.68
16,761.68
57,594.08
39,691.03
34,430.31
26,067.66
6,840.82
1,521.83
5,260.72
1,322.94
3,937.78
17,903.05
1,175.94
16,727.11

458,661.16 266,068.29
444,196.12 266,068.29
444,196.12
- 266,068.29
14,465.04
-_
77,399.87
-_
50,540.76
46,366.43
-_
40,211.82
5,398.22
756.38
4,174.33
-_
1,452.57
2,721.76
26,859.11
-_
8,654.87
18,204.24
-

508,316.51

656,054.69

730,959.05 266,070.86

Difference between totals and sum of components is due to rounding off.

Almost half or P997.21 billion representing 46.14 percent of the total


allotments for the year was released for Debt Service and Internal Revenue
Allotments with P710.26 billion and P286.94 billion, respectively. Debt Service was
intended for the payments of principal and interest of loans of the NG while the IRA
was released as subsidy of the NG to LGUs.
Chart II 2 presents the allotments by class.

Chart II - 2 Allotments by Class


(in billion pesos)
730.96
656.05
508.32

266.07

PS

MOOE

CO

FE

Of the total allotments for CO, P444.20 billion or 60.77 percent was allotted for
loan principal repayments.

2.1.3 Obligations P1.997 trillion


The reported obligations covered by allotments for the year reached P1.997
trillion while P207.43 million was an overdraft. Table II-2 shows the details of
obligations by source of appropriations and expenditure class.
Table II-2 Obligations by Source of Appropriations and Expenditure Class
(in million pesos)
Expenditure Class
Source
Total
PS
MOOE
CO
FE
RA No. 10147
Regular
SPF
SAGF
Automatic
IRA
Tax Subsidy
Customs Duties
SAGF
Grants and
Donations
Tax Refunds
NIPAS (Sec. 16
RA 7586)
Sale of Assets

1,135,778.28 478,391.47
657,061.89 396,783.94
146,352.63 78,943.68
9,402.61
2,349.67
322,961.16
314.18
286,942.56
18,941.23
14,420.64
1,355.66
309.13

537,674.50
149,318.52
59,209.39
6,904.53
322,242.05
286,942.56
18,941.23
14,420.64
1,030.25

119,709.78
110,956.89
8,199.55
148.40
404.93
16.29

2.54
2.54
-

991.01
292.96

5.04
-

604.17
292.96

381.80
-

11.41
5.68

10.06
0.19

1.35
5.50

Table II-2 continued

Source

Total

Other Acts
DSF
Principal
Interest
RLIP
SAGF
Continuing
Unobligated
RA No. 9970
Regular
SPF
Automatic
Other Acts
Regular
Automatic
Unreleased
RA No. 9970
Regular
SPF
Grand Total

PS

Expenditure Class
MOOE

CO

FE

745,975.13
710,264.41
444,196.12
266,068.29
24,806.94
10,903.78
115,539.45
76,859.16
71,976.81
60,033.65
10,501.99
1,441.17
4,882.34
1,000.03
3,882.31
38,680.29

28,811.38
24,806.94
4.44
297.63
297.63
144.33
141.45
1.27
1.62
153.30
149.61
3.69
-

10,238.88
10,238.88
50,692.42
33,039.58
29,647.69
22,093.23
6,766.61
787.85
3,391.89
514.15
2,877.74
17,652.84

444,856.58
444,196.12
444,196.12
660.46
64,549.39
43,521.95
42,184.79
37,798.96
3,734.12
651.70
1,337.16
336.27
1,000.89
21,027.45

266,068.29
266,068.29
266,068.29
-

9,311.07
29,369.22

987.54
16,665.30

8,323.53
12,703.92

1,997,292.86

503,500.48

598,605.80

629,115.75

266,070.83

Difference between totals and sum of components is due to rounding off.

2.1.4 Unused/Balance of Appropriations P411.7 billion


At year-end, the appropriations had unused balance of P411.70 billion
consisting of unalloted/unreleased appropriations and unobligated allotments with
P247.38 billion and P164.32 billion, respectively.
The unalloted/unreleased appropriations represent the balance of the total
appropriations for the year of P2.409 trillion over the total allotments released to
various national government agencies of P2.161 trillion. Table II-3 shows the
balance of appropriations by source.
Table II - 3 Unalloted/Unreleased Appropriations, by Source
(in million pesos)
Source
Appropriations
Allotments
Unreleased
Current Year
RA 10147
Regular
SAGF
SPF
Automatic
IRA
Tax Subsidy
Customs Duties

2,093,720.46
1,326,793.68
758,610.01
12,566.90
229,210.85
326,405.92
286,944.24
18,999.93
14,420.64

2,025,323.74
1,258,396.96
758,632.14
11,554.05
161,804.84
326,405.92
286,944.24
18,999.93
14,420.64

68,396.73
68,396.73
(22.13)
1,012.85
67,406.01
-___
-

Table II-3 continued

Source

Appropriations

SAGF
Grants and Donations
Tax Refunds
NIPAS
Sale of Assets
Other Acts
DSF
RLIP
SAGF
Continuing Appropriations
RA 9970
Alloted
Regular
SPF
Automatic
Unalloted
Regular
SPF
Automatic
Other Acts
Alloted
Regular
Automatic
Total

Allotments

Unreleased

3,169.73
2,548.05
294.04
20.00
9.29
766,926.78
710,264.41

3,169.73
2,548.05
294.04
20.00
9.29
766,926.78
710,264.41

25,430.61

25,430.61

31,231.76
315,065.42
305,119.85
81,369.65
66,812.53
12,240.31
2,316.81
223,750.20
76,347.57
147,397.63
5.00
9,945.57
9,945.57
3,256.63
6,688.94

31,231.76
136,077.38
126,131.81
81,369.65
66,812.53
12,240.31
2,316.81
44,762.16
9,830.80
34,931.35
9,945.57
9,945.57
3,256.63
6,688.94

-___
178,988.04
178,988.04
-____
178,988.04
66,516.76
112,466.27
5.00
-____
-____
-

2,408,785.89

2,161,401.12

247,384.77

Difference between totals and sum of components is due to rounding off.

The unobligated balance of allotments amounting to P164.32 billion refers to


the variance between total allotments of P2.161 trillion and obligations covered by
allotments of P1.997 trillion. The unobligated balance of allotments by source is
presented in Table II 4.
Table II-4 Unobligated Allotments, by Source
(in million pesos)
Source
Current Year
RA 10147
Regular
SAGF
SPF
Automatic
IRA
Tax Subsidy
Customs Duties
SAGF
Grants and Donations
Tax Refunds
NIPAS
Sale of Assets

Allotments
2,025,323.74
1,258,396.96
758,632.14
11,554.05
161,804.84
326,405.92
286,944.24
18,999.93
14,420.64
3,169.73
2,548.05
294.04
20.00
9.29

10

Obligations
1,881,545.98
1,135,570.86
656,855.27
9,402.61
146,352.49
322,960.48
286,942.56
18,941.23
14,420.64
1,355.66
990.33
292.96
11.41
5.68

Balance
143,777.75
122,826.10
101,776.87
2,151.44
15,452.35
3,445.44
1.68
58.70
1,814.06
1,557.72
1.08
8.59
3.61

Table II-4 continued

Source
Other Acts
DSF
RLIP
SAGF
Continuing Appropriations
RA 9970
Alloted
Regular
SPF
Automatic
Unalloted
Regular
SPF
Other Acts
Alloted
Regular
Automatic
Total

Allotments
766,926.78
710,264.41
25,430.61
31,231.76
136,077.38
126,131.81
81,369.65
66,812.53
12,240.31
2,316.81
44,762.16
9,830.80
34,931.35
9,945.57
9,945.57
3,256.63
6,688.94

Obligations
745,975.13
710,264.41
24,806.94
10,903.78
115,539.45
110,657.10
71,976.81
60,033.65
10,501.99
1,441.17
38,680.29
9,311.07
29,369.22
4,882.34
4,882.34
1,000.03
3,882.31

Balance
20,951.65
623.67
20,327.98
20,537.93
15,474.71
9,392.84
6,778.88
1,738.32
875.64
6,081.87
519.73
5,562.13
5,063.23
5,063.23
2,256.60
2,806.63

2,161,401.12

1,997,085.43

164,315.69

Difference between totals and sum of components is due to rounding off.

The total unobligated allotments for the current year consist of P4.93 billion
PS, P57.45 billion MOOE and P101.94 billion CO. The balance for MOOE and
CO were retained as continuing allotments which are authorized to be used in the
following year while those for PS were reverted in accordance with the existing
laws.
2.2 Financial Condition
As of December 31, 2011, the NG had total assets of P3.299 trillion and total liabilities
of P5.382 trillion resulting to negative government equity of P2.083 trillion. Compared to the
previous year, all components of the Balance Sheet increased as shown in Chart II - 3.
Chart II- 3 Assets, Liabilities and Equity
(in trillion pesos)
5.382

3.299

2011

5.018

3.139

(2.083)

Assets

Liabilities

11

(1.880)

Equity

2010

2.2.1 Assets P3.299 trillion


Total assets of P3.299 trillion increased by P160.58 billion or 5.12 percent
more than last years P3.139 trillion which was due to the increases in Investments
P174.14 billion, Property, Plant and Equipment P1.26 billion and Other Assets
P1.87 billion offset by the decrease in Current Assets of P16.69 billion. The
graphical presentation of comparative composition of assets is shown in Chart II - 4.
Chart II - 4 Comparative Composition of Assets
(in billion pesos)
2010

2011

1,186.64

Current Assets

1,203.32

Investm ents

Property, Plant and


Equipm ent

Other Assets

1,016.24
842.10

987.06
985.80

109.50
107.64

Current Assets reduced by P16.69 billion this year due to decreases in Cash
and Other Current Assets amounting to P61.66 billion and P3.78 billion,
respectively, exceeded the increases in Receivables P16.69 billion, Prepayments
P30.89 billion and Inventories P1.17 billion.
Investments growth of P174.14 billion this year was brought about by the
P161.20 billion or 26.19 percent increments in Sinking Fund contributions and
P12.94 billion improvement in Investment in Securities.
Property, Plant and Equipment, net of accumulated depreciation and Other
Assets showed minimal increases of P1.26 billion and P1.87 billion, respectively.
2.2.2 Liabilities P5.382 trillion
The value of liabilities increased from P5.018 trillion last year to P5.382
trillion or by P363.58 billion this year. The growth was contributed by the
following: Long Term Liabilities P465.98 billion and Deferred Credits P0.43
billion offset by the drop in Current Liabilities by P102.83 billion as shown in Table
II - 5.
12

Table II - 5 Comparative Composition of Liabilities


(in billion pesos)
Amount
Increase/(Decrease)
Particulars
2011
2010
Amount Percent
Long Term Liabilities
4,644.76
4,178.79
465.98
11.15
Bonds Payable
_3,777.31
3,345.79
431.53
12.90
Domestic
2,563.09
2,174.70
388.39
17.86
Foreign
1,214.22
1,171.08
43.14
3.68
Loans Payable
867.34
832.97
34.37
4.13
Foreign
866.20
829.45
36.75
4.43
Domestic
1.14
3.52
(2.38)
(67.60)
Mortgage Payable
0.03
0.01
0.01
114.13
Other
0.03
0.01
0.01
114.13
Other Long Term
Liabilities
0.08
0.01
0.07
532.98
Current Liabilities
710.19
813.02
(102.83)
(12.65)
Loans Payable
Domestic, Current
297.38
553.22
(255.84)
(46.25)
Intra-Agency Payables
147.72
7.21
140.51 1,949.27
Payable Accounts
114.37
122.37
(8.00)
(6.54)
Other Liability Accounts
85.47
80.40
5.06
6.30
Inter-Agency Payables
65.25
49.82
15.44
30.99
Deferred Credits
Other Deferred Credits
27.06
26.63
0.43
1.61
Total

5,382.01

5,018.44

363.58

7.24

Difference between totals and sum of components is due to rounding off.

Majority or 99.96 percent or P4.643 trillion of the total Long Term Liabilities
was reported by the BTr DOF, being the agency tasked to control and service
NGs public debt, both foreign or domestic.
2.2.3 Government Equity (P2.083) trillion
As in previous years, liabilities of the NG exceeded its assets resulting to
negative balance of P2.083 trillion in equity. This years level posted an increase of
P203 billion or 10.80 per cent compared to negative P1.880 trillion reported in
2009.
The increase in the negative balance was brought about by net loss from
current operation P13.62 billion, adjustments related to prior years transactions
P76.76 billion, completed public infrastructures P31.60 billion and reforestation
projects P952.19 million, which were transferred to the Registry of Public
Infrastructures and Registry of Reforestation Projects, respectively, and the
remittance to National Treasury for disposal of assets P2.59 million.

13

2.3 Results of Current Operations


For the year ended, the NG attained a net operating income of P689.29 billion by
generating a total income/revenue of P1.399 trillion from operations and incurring current
operating expenses of P709.72 billion. However, after deducting the financial support to
LGUs, GOCCs and NGOs/POs of P391.27 billion, financial expenses of P282.77 billion,
other losses of P31.67 billion and adding net subsidy from NG of P2.79 billion, the
government suffered a net loss of P13.62 billion. Chart II - 5 shows the graphical
presentation of the results of operation.
Chart II - 5 Results of Current Operations
(in billion pesos)
2011

2010

Incom e/Revenue

60
6.
22

68
9.
29

63
7.
46

70
9.
72

1,
24
3.
68

2
.0
99
3
1,

Current Operating
Incom e from
Expenses
Current Operations

2.3.1 Income/Revenue P 1.399 trillion


This years income/revenue of P1.399 trillion generated from taxes P1.222
trillion and non-taxes P177.07 billion grew by P155.34 billion or 12.49 percent
compared to previous years P1.244 trillion. However, notwithstanding the increase
posted over the year, actual income/revenue suffered a setback as it fell short by
P12.28 billion compared to the projected amount of P1.411 trillion1.
The NG failed to realize its projected tax revenue of P1.273 trillion2 by 4.03
percent or P51.30 billion while general income of P177.07 billion exhibited a 28.26
percent or P39.01 billion favorable variance over the estimated amount of P138.06
billion3.

Table C.1, Revenue Program, by Source, 2010-2012, 2012 Budget of Expenditures and Sources of Financing,
DBM.
2
Ibid
3
Ibid
14

Tax revenue of P1.222 trillion registered an increase of P131.03 billion


compared to last years figure of P1.091 trillion. This years tax revenue came from
the following sources:
Amount
(in million pesos)
Value Added Tax
318,066.06
Income Tax - Corporations
269,731.68
Income Tax - Individuals
156,394.74
Final Tax
130,948.46
Excise Tax on Articles
96,937.87
Value Added Tax - Expanded
55,708.49
Documentary Stamp Tax
49,076.51
Import Duties
48,801.65
Business Tax
48,457.57
Other National Taxes
16,089.26
Fines and Penalties - National Taxes
12,979.01
Motor Vehicles Users Charge
9,270.13
Capital Gains Tax
8,027.17
Others
1,455.14
Total
1,221,943.75
Difference between totals and sum of components is due to rounding off.

On the other hand, the general income increased by P24.31 billion from
P152.77 billion in 2010 to P177.07 billion this year. It is composed of Business
Income- P45.43 billion, Other Income P91.87 billion, Service Income P32.03
billion and Permits and Licenses P7.74 billion.
2.3.2 Current Operating Expenses P709.72 billion
The current operating expenses of the NG totaling P709.72 billion surpassed
last years amount of P637.46 billion by 11.34 percent or P72.27 billion. The
composition of the current operating expenses is as follows: PS P512.11 billion or
72.16 percent and MOOE P197.61 billion or 27.84 percent.
Expenses for PS rose by P47.89 billion this year primarily due to the
implementation of the 3rd tranche of the modified Salary Schedule for civilian
personnel and the modified Base Pay Schedule for military and uniformed
personnel, both provided under the Senate and House of Representatives Joint
Resolution No. 4, series of 2009, approved on June 17, 2009, and as mandated
under Executive Order No. 900, issued on June 23, 2010.
2.3.3 Income from Current Operations P689.29 billion
The current operation of the government for fiscal year 2011 resulted to an
income of P689.29 billion, exhibiting 13.70 percent growth or P83.07 billion more
than last years P606.22 billion.

15

2.4 Cash Flows


The NG ended the year with cash balance of P317.55 billion, out of which P199.13
billion was recorded under the NG Books and P118.43 billion was under the RA Books.
The cash flows were classified by operating, investing and financing activities as shown
in Chart II - 6.
Chart II - 6 Cash Flows, by Activities
(in billion pesos)
Cash Provided(Used)

491.88
171.40

353.07
(138.80)

Operating Activities

Investing Activities

1,3
65
.39
1,4
61
.69

Outflows

2,6
58
.91

2,8
30
.31

Inflows

(96.29)

Financing Activities

2.4.1 Cash Inflows P4.549 trillion


The total inflows of P4.549 trillion came from operating activities P2.830
trillion, investing activities P353.07 billion and financing activities - P1.365
trillion. Of the total inflows, the bulk or 84.72 percent amounting to P3.854 trillion
consisted of proceeds from domestic and foreign loans P1.365 trillion, collections
of revenue/income - P1.338 trillion and receipt of NCA P1.150 trillion.
2.4.2 Cash Outflows P4.612 trillion
The aggregate cash outflows reached P4.612 trillion, majority or 84.31 percent
of which was used for the replenishment of negotiated MDS checks P1.089
trillion, payment of long term liabilities P1.221 trillion, payment of operating
expenses P658.08 billion, investment P408.01 billion, grant of subsidies and
donations P379.26 billion and remittance of personnel benefits contributions and
mandatory deductions to BIR, GSIS, PAGIBIG, etc. P133.26 billion.
2.5 National Government Debt
The outstanding debt balance of NG rose from P4.701 trillion in 2010 to P4.940
trillion at the end of the year. Of the total, P2.860 trillion was from domestic sources and
P2.080 trillion from foreign sources.

16

Borrowings from domestic sources representing 57.90 percent of the total debt of
the NG, increased by P156.02 billion while foreign debt grew by P83.25 billion.

From year 2002 to 2011, domestic debt showed an average growth rate of 6.58
percent or P132.85 billion per year while the annual growth of foreign debt is 5.38
percent or P81.34 billion.

17

III. APPROPRIATIONS,
ALLOTMENTS,
OBLIGATIONS AND
BALANCES

APPROPRIATIONS, ALLOTMENTS, OBLIGATIONS AND BALANCES

3.1 Overview
In his Budget Message, President Benigno S. Aquino III called the 2011 budget, the
first financial blueprint of his Administration, a Reform Budget, which promises to make
real the changes needed to revitalize the economy while leaving no sector behind. The
President stated that the 2011 budget was crafted with bias for the poor and vulnerable and
stressed that transparency and accountability are important thrusts of this years budget which
shall be used as strategies to combat corruption and as tools to achieve better public financial
management.
In fulfillment of the Presidents Social Contract with the Filipino People, the Aquino
Administration took steps in reducing poverty and providing sustainable development by
increasing the appropriations of the DSWD by 142.66 percent, an indication of the
Administrations sincerity in alleviating the conditions and protecting the interests of the poor
and marginalized sectors. For the year, the appropriations of the DSWD included the second
phase implementation of the KALAHI-CIDSS Project in various LGUs, conditional cash
transfers (CCT) to 2.3 million households, rice subsidy, and pension for indigent senior
citizens.
During the year, the government undertook a painstaking-yet-necessary review and
reform of cost assumptions, quality standards and procurement processes that caused delay in
the implementation of planned infrastructure projects which resulted to government under
spending, and was blamed for the lackluster economic growth in the first three quarters of
2011.
To address this, President Aquino approved the Disbursement Acceleration Program
(DAP) on October 12, 2011. The P72.11 billion funds for the DAP were taken out of savings
from completed or discontinued projects and its release to agencies and GOCCs was fast
tracked as 2011 drew to a close. As reported in the Official Gazette, the DAP contributed
immensely to the governments increased spending in the last months of the year, allowing
agencies to quickly implement programs and projects aligned with the Presidents Social
Contract with the Filipino People.
Aside from the initial P72.11 billion, additional amount of P13.4 billion was
authorized by the President to further boost government spending and strengthen the national
economy for fiscal year 2012. The additional funds will also provide for deficiencies under
the Special Purpose Funds, including the Calamity Fund and Contingent Fund, and augment
the much reduced internal revenue allocations for LGUs.
The projects funded by the additional P13.40 billion include the P1.60 billion
nationwide Disaster Risk, Exposure, Assessment and Mitigation (DREAM) program of the
Department of Science and Technology (DOST); the P4.28 billion additional budget for State
Universities and Colleges (SUCs) under the Commission on Higher Education (CHED), the
P2.3 billion incentives of personnel affected by the Rationalization Program of the
Department of Public Works and Highways (DPWH); and the P450 million Jalaur River
Multipurpose Project of the Department of Agriculture (DA).
18

Presented in Schedule 7, Volume I-B of this report are the details on allotment releases
for DAP and the corresponding obligations incurred during the year, by department/agency.
3.2 Appropriations, Allotments, Obligations and Balances
An appropriation is an authorization under past Acts of Congress, Presidential
Decrees or other legislative enactments, for payments to be made with funds of the
government under specified condition and/or for specified purpose.
In any given year, there are two budgets being executed namely: the GAA for the
current year which contains new appropriations intended to finance the programmed
activities of various agencies and the special projects and programs of the NG; and the
balances of prior years appropriations which are set by law to be available as continuing
appropriations until the end of the following year. In addition to these, automatic
appropriations provided by standing appropriation laws also form part of the total NG
budget for the year.
Table III-1 shows the summary of appropriations, allotments, obligations incurred
and balances for the year which are separately discussed in the succeeding pages of this
report. The details are presented by appropriation source in Schedules 1 and 2, and by
department/agency in Schedules 3 and 4, Volume I-B.

Particulars

Table III-1 Appropriations, Allotments, Obligations and Balances


(in million pesos)
Unreleased
Appropriations
Allotments
AppropriaObligations*
tions

General Appropriations Act


Regular Appropriations
Personal Services
Maintenance and Other
Operating Expenses
Financial Expenses
Capital Outlays
Special Account in the General
Fund
Personal Services
Maintenance and Other
Operating Expenses
Capital Outlays
Special Purpose Funds
Unprogrammed Fund
Miscellaneous Personnel
Benefits Fund
Retirement Benefits Fund
Allocations to LGUs
Budgetary Support to
GOCCs
Priority Development
Assistance Fund
Calamity Fund
DepEd School Building
Program
International Commitments
Fund

Unobligated
Allotments

765,405.33
399,406.94

758,632.14
399,406.94

6,773.19
-

656,855.27
396,674.58

101,776.87
2,732.35

185,401.47
2.57
180,594.35

184,954.91
2.57
174,267.72

446.56
6,326.63

149,317.67
2.54
110,860.47

35,637.24
0.03
63,407.25

12,566.90
2,372.55

11,554.05
2,372.55

1,012.85
-

9,402.60
2,349.67

2,151.45
22.88

9,969.80
224.55
229,210.85
78,252.49

8,956.95
224.55
161,804.84
20,448.76

1,012.85
67,406.01
57,803.73

6,904.53
148.40
146,352.49
19,263.28

2,052.42
76.15
15,452.35
1,185.48

59,397.93
20,275.94
15,902.79

59,397.93
20,275.94
14,793.43

1,109.37

58,846.32
20,070.74
14,584.61

551.61
205.20
208.82

19,538.82

16,038.82

3,500.00

16,038.82

24,620.00
6,000.00

20,423.24
5,708.23

4,196.76
291.78

11,527.73
2,815.43

8,895.51
2,892.80

1,000.00

824.30

175.70

382.68

441.62

2,964.33

2,964.33

2,503.59

460.74

19

(Table III-1 continued)


Particulars
E-Government Fund
Contingent Fund
Overall Savings
Personal Services
Maintenance and Other
Operating Expenses
Capital Outlays
Appropriations per GAA
Automatic Appropriations
Debt Service Principal
Debt Service Interest
IRA
Other Automatic
Appropriations
Total Current Years
Appropriations
Continuing Appropriations
Allotted Continuing
Appropriations
Regular Appropriations
Personal Services
Maintenance and Other
Operating Expenses
Capital Outlays
Special Purpose Funds
Personal Services
Maintenance and Other
Operating Expenses
Capital Outlays
Automatic Appropriations
Personal Services
Maintenance and Other
Operating Expenses
Capital Outlays
Unallotted Continuing
Appropriations
Regular Appropriations
Maintenance and Other
Operating Expenses
Capital Outlays
Special Purpose Fund
Maintenance and Other
Operating Expenses
Capital Outlays
Overall Savings
Automatic Appropriations
Maintenance and Other
Operating Expenses
Total Continuing
Appropriations

Appropriations

Unreleased
Appropriations

Allotments

258.54

258.54

1,000.00
(6,795.32)
35,970.30

671.32

(30,660.92)
(12,104.70)
1,000,387.76
1,093,332.70
444,196.12
266,068.29
286,944.24
96,124.05

931,991.03
1,093,332.70
444,196.12
266,068.29
286,944.24

Unobligated
Allotments

59.09

199.45

260.20

411.11

(30,660.92)
(12,104.70)
68,396.73
-

812,610.37
1,068,935.61
444,196.12
266,068.29
286,942.56

119,380.67
24,397.09
1.68

96,124.05

71,728.64

24,395.41

2,093,720.46

2,025,323.74

68,396.73

1,881,545.98

143,777.75

91,315.22
70,069.16
1,014.16

91,315.22
70,069.16
1,014.16

76,859.16
61,033.68
291.06

14,456.07
9,035.48
723.10

27,390.60
41,664.39
12,240.31
1.27

27,390.60
41,664.39
12,240.31
1.27

22,607.38
38,135.24
10,501.99
1.27

4,783.22
3,529.15
1,738.32
-

6,840.82
5,398.22
9,005.76
68.00

6,840.82
5,398.22
9,005.76
68.00

6,766.61
3,734.12
5,323.48
5.31

74.21
1,664.11
3,682.27
62.69

5,459.61
3,478.15

5,459.61
3,478.15

3,665.59
1,652.59

1,794.02
1,825.56

223,750.20
59,734.07

44,762.16
9,830.80

178,988.04
49,903.27

38,680.29
9,311.07

6,081.87
519.73

11,853.66
47,880.41
147,397.63

1,175.94
8,654.87
34,931.35

10,677.72
39,225.55
112,466.27

987.54
8,323.53
29,369.22

188.39
331.34
5,562.13

38,799.30
108,598.33
16,613.50
5.00

16,727.11
18,204.24
-

22,072.19
90,394.09
16,613.50
5.00

16,665.30
12,703.92
-

61.81
5,500.33
-

5.00

5.00

315,065.42

136,077.38

178,988.04

115,539.45

20,537.93

247,384.77

1,997,085.43

164,315.69

Total NG Appropriations
2,408,785.89
2,161,401.12
* Does not include obligations not covered by allotments.
Difference between totals and sum of components is due to rounding off.
20

Obligations*

328.68
(6,795.32)
35,970.30

3.2.1 Appropriations P2.409 trillion

Chart III-1 Appropriations per GAA for


FYs 2007 to 2011
(in billion pesos)

For the second year of the


Aquino Administration, the aggregate
NG appropriations accounted at
P2.409 trillion lower by P88.69 billion
or 3.55 percent than last years level of
P2.497 trillion. Regular Appropriations
went up by P96.19 billion or 14.37
percent from last years P669.22
billion, while allocations for Special
Purpose Funds dropped by P370.19
billion or 61.76 percent from last
years P599.40 billion. Decrease in
appropriations for SPFs was due to
non inclusion of Debt Service
Interest Payments which was included
in last years SPF total budget. Chart
III-1 presents the NG Appropriations
per GAA for the years 2007 to 2011
and Table III-2 shows the comparative
details of the total appropriations for
fiscal years 2011 and 2010.

1,400
1,304.41

1,300
1,170.33

1,200
1,066.18

1,100
1,000.39

1,000
900 830.35
800
2007

2008

2009

2010

2011

Table III-2 Comparative Details of Appropriations


Amount (in million pesos)
Particulars
Increase / Percent
2011
2010
(Decrease)
Regular Appropriations
765,405.33
669,215.73
96,189.60
14.37
Personal Services
399,406.94
309,858.26
89,548.68
28.90
Maintenance and Other
Operating Expenses
185,401.47
165,859.68
19,541.78
11.78
Financial Expenses
2.57
3.90
(1.33) (34.06)
Capital Outlays
180,594.35
193,493.89 (12,899.53)
(6.67)
Special Account in the
General Fund
12,566.90
9,041.11
3,525.79
39.00
Personal Services
2,372.55
1,912.40
460.15
24.06
Maintenance and Other
Operating Expenses
9,969.80
7,128.71
2,841.09
39.85
Capital Outlays
224.55
224.55
Special Purpose Funds
229,210.85
599,398.42 (370,187.57) (61.76)
Personal Services
91,363.21
136,007.36 (44,644.14) (32.82)
Maintenance and Other
Operating Expenses
75,111.78
352,058.84 (276,947.06) (78.66)
Capital Outlays
62,735.86
111,332.22 (48,596.36) (43.65)
26,751.14 (33,546.46) (125.40)
(6,795.32)
Overall Savings
General Appropriations Act
1,000,387.76 1,304,406.40 (304,018.63) (23.31)

21

(Table III-2 continued)


Particulars
Automatic Appropriations
Debt Service Principal
Debt Service Interest
IRA
Other Automatic
Appropriations
Total Current Years
Appropriations
Continuing Appropriations
Allotted Continuing
Appropriations
Unallotted Continuing
Appropriations
Total Continuing
Appropriations
Total Appropriations

Amount (in million pesos)


Increase / Percent
2011
2010
(Decrease)
1,093,332.70 1,051,867.33
41,465.37
3.94
444,196.12
402,395.12
41,801.00
10.39
266,068.29
297,004.44 (30,936.15) (10.42)
286,944.24
265,802.38
21,141.86
7.95
96,124.05
2,093,720.46

86,665.39

9,458.66

10.91

2,356,273.73 (262,553.27)

(11.14)

91,315.22

101,594.54

(10,279.32)

(10.12)

223,750.20

39,610.11

184,140.09

464.88

315,065.42
2,408,785.89

141,204.66
2,497,478.39

173,860.76
(88,692.50)

123.13
(3.55)

Difference between totals and sum of components is due to rounding off.

3.2.1.1 General Appropriations Act (R.A. No. 10147) P1 trillion


The GAA of 2011, R.A. No. 10147 was the first financial blueprint of the Aquino
Administration. In his budget message, the President emphasized that the 2011 budget
serves a tool for social reform, transparency and accountability. The GAA was signed on
December 27, 2010 and was published in the Official Gazette in the same year as required
under Section 2 of the New Civil Code of the Philippines. Section 101 of the General
Provisions of R.A. No. 10147 states that it shall take effect on January 1, 2011.

Regular Appropriations P765.41 billion


Originally, the regular appropriations for the year were approved at P755.72
billion. Of this amount, P4.04 billion was transferred to SPF particularly Budgetary
Support to GOCCs. During the year, transfer from Overall Savings of P13.72 billion
was made. Thus, the adjusted regular appropriations for the year aggregated at
P765.41 billion. The amount is lower by P96.19 billion or 14.37 percent than last
years P669.22 billion.
Over the years, the Education Department got the biggest chunk with P182.67
billion for 2011 or 23.87 percent of the total regular appropriations, followed by
DPWH with P114.63 billion or 14.98 percent, and DND with P104.22 or 13.62
percent of the total.

22

The DSWD got the highest increase of 142.66 percent or P21.85 billion from
last years P15.31 billion. The increase can be attributed to the inclusion of the
second phase implementation of the KALAHI-CIDSS Project in various LGUs,
conditional cash transfers (CCT) to 2.3 million households, rice subsidy, and pensions
for indigent senior citizens. The increase in regular appropriations for the Defense
Department of P46.54 billion or 80.68 percent is due to the integration of the AFP
Modernization Fund which was originally budgeted under the Special Purpose Funds.
Comparative details of regular appropriations by department/agency are
shown in Table III-3.
Table III-3 Comparative Regular Appropriations By Department/Agency
Amount (in million pesos)
Department/Agency
Percent
Increase /
2011
2010
(Decrease)
Education
182,674.24
157,409.15
25,265.09
16.05
Public Works and Highways
114,625.80
141,681.93 (27,056.13)
(19.10)
National Defense
104,217.44
57,682.20
46,535.24
80.68
Interior and Local Government
87,208.45
65,744.85
21,463.60
32.65
Social Welfare and Development
37,159.91
15,313.52
21,846.39
142.66
Agriculture
33,389.26
39,241.61
(5,852.88)
(14.91)
Transportation and
Communications
30,858.07
16,547.04
14,311.03
86.49
Health
28,659.10
25,703.11
2,955.99
11.50
State Universities and Colleges
21,373.93
21,761.47
(387.54)
(1.78)
Finance
13,735.75
9,261.87
4,473.88
48.30
The Judiciary
13,621.52
12,711.16
910.36
7.16
Environment and Natural Resources
11,823.26
12,221.08
(397.82)
(3.26)
Autonomous Region in Muslim
Mindanao
11,780.14
9,178.36
2,601.78
28.35
Foreign Affairs
10,550.06
12,443.26
(1,893.20)
(15.21)
Science and Technology
9,362.29
5,313.94
4,048.35
76.18
Congress of the Philippines
8,491.34
8,880.01
(388.67)
(4.38)
Justice
7,700.50
6,424.48
1,276.02
19.86
Labor and Employment
7,277.72
6,143.83
1,133.89
18.46
Office of the President
4,605.61
4,827.38
(221.77)
(4.59)
Other Executive Offices
4,481.74
5,456.31
(974.57)
(17.86)
Commission on Audit
4,293.33
3,825.29
468.04
12.24
Agrarian Reform
3,885.31
7,820.23
(3,934.92)
(50.32)
Trade and Industry
2,483.98
2,443.73
40.25
1.65
Commission on Elections
2,255.44
10,432.68
(8,177.24)
(78.38)
National Economic and
Development Authority
2,122.20
4,021.80
(1,899.60)
(47.23)
Tourism
1,606.53
1,578.09
28.44
1.80
Budget and Management
1,157.81
1,215.17
(57.36)
(4.72)
Office of the Ombudsman
1,031.90
1,064.27
(32.37)
(3.04)
Energy
930.06
665.71
264.35
39.71
Presidential Communications
Operations Office
929.60
1,119.49
(189.89)
(16.96)
23

(Table III-3 continued)


Department/Agency
Civil Service Commission
Commission on Human Rights
Office of the Vice-President
Joint Legislative-Executive Councils
Total

Amount (in million pesos)


Increase /
2011
2010
(Decrease)
666.85
610.51
56.34
266.90
285.89
(18.99)
177.11
185.02
(7.91)
2.18
1.30
0.88
765,405.33
669,215.74
96,189.59

Percent
9.23
(6.64)
(4.28)
68.08
14.37

Difference between totals and sum of components is due to rounding off.

Special Account in the General Fund P12.57 billion


For the year, the SAGF included in the total new appropriations amounted to
P12.57 billion broken down into PS P2.37 billion, MOOE P9.97 billion and CO
P0.22 billion. In the previous year, the data was presented under the automatic
appropriations.

Special Purpose Funds P229.21 billion


The SPFs are funds appropriated in pursuit of specific plans and activities of
the NG. Unlike other funds in the budget that are allocated for specific government
agencies which are expected to show clear accountability over their use, SPFs are not
under the accountability of any particular government agency/office or unit. Instead,
said funds form part of the national budget that the President allocates for special
programs and projects.
This years allocations for the SPF was approved at P232.50 billion
representing 23.24 percent of the total appropriations in the GAA. The amount was
reduced by P7.32 billion which was transferred to the Overall Savings for the DAP,
and was partially offset by a total of P4.04 billion transferred from the regular
appropriations for an adjusted balance of P229.21 billion.
The significant decrease of P370.19 billion or 61.76 percent in this years
SPFs was due mainly to the inclusion of the Debt Service Interest Payments of
P276.12 billion in last years SPF budget.
Presented in Table III-4 are the comparative appropriations for the SPFs.

Table III-4 Appropriations for Special Purpose Funds


Amount (in million pesos)
Particulars
Percent
Increase /
2011
2010
(Decrease)
Unprogrammed Fund
78,252.49 118,913.95 (40,661.46) (34.19)
Miscellaneous Personnel Benefits Fund
59,397.93 62,511.83
(3,113.90)
(4.98)
Priority Development Assistance Fund
24,620.00 15,261.21
9,358.79
61.32
Retirement Benefits Fund
20,275.94 61,802.24 (41,526.30) (67.19)

24

(Table III-4 continued)

Budgetary Support to GOCCs


Allocations to Local Government Units
Calamity Fund
International Commitments Fund
Contingent Fund
DepEd School Building Program
E-Government Fund
Debt Service- Interest
AFP Modernization Program
National Unification Fund
Adjusted Special Purpose Funds
Transfer from Regular Appropriations
Overall Savings

Amount (in million pesos)


Increase /
2011
2010
(Decrease)
19,538.82 20,533.36
(994.54)
15,902.79 29,686.62 (13,783.83)
6,000.00
3,750.00
2,250.00
2,964.33
1,677.22
1,287.11
1,000.00
1,000.00
1,000.00
2,000.00
(1,000.00)
258.54
1,000.00
(741.46)
- 276,212.00 (276,212.00)
5,000.00
(5,000.00)
50.00
(50.00)
229,210.85 599,398.43 (370,187.58)
(4,035.34)
(4,035.34)
7,322.64 30,217.62 (22,894.98)

Total SPF per GAA

232,498.15 629,616.04 (397,117.90)

Particulars

Percent
(4.84)
(46.43)
60.00
76.74
(50.00)
(74.15)
(100.00)
(100.00)
(100.00)
(61.76)
(75.77)
(63.07)

Difference between totals and sum of components is due to rounding off.

Unprogrammed Fund P78.25 billion


Unprogrammed Fund is a standby appropriation for additional agency
expenditures for priority programs and projects on top of the original budget. Subject
to Presidential discretion, this fund shall be released only when the revenue
collections exceed the original revenue targets submitted by the President pursuant to
Section 22, Article VII of the 1987 Philippine Constitution, including savings
generated from programmed appropriations for the year.
For 2011, Unprogrammed Fund of P78.25 billion represents 7.82 percent of
the current years appropriations. It showed a decrease of P40.66 billion or 34.19
percent from last years P118.91 billion. Support to Foreign-Assisted Projects
component went up by 441.73 percent or P8.81 billion which can be attributed to the
Administrations effort to attract foreign investors involvement in domestic projects.
The Support for Pre-School Education, a new component of the
Unprogrammed Fund with an appropriations of P902 million, was included in support
of the preschool education campaign of the Administration. Table III-5 shows the
comparative appropriations for Unprogrammed Fund.

Table III-5 Appropriations for Unprogrammed Fund


Amount (in million pesos)
Particulars
Increase / Percent
2011
2010
(Decrease)
Support to Infrastructure Projects and
Social Programs
37,942.00
27,500.00
10,442.00
37.97
Support to Foreign-Assisted Projects
10,806.66
1,994.84
8,811.82 441.73

25

(Table III-5 continued)


Particulars
Budgetary Support to GovernmentOwned and/or Controlled Corporations
Collective Negotiation Agreement
General Fund Adjustments
Payment of Total Administrative
Disability Pension
Strategic Government Reforms
Support for Pre-School Education
Support to Calamity Related Programs
and Projects
Total

Amount (in million pesos)


Increase / Percent
2011
2010
(Decrease)
8,614.02
8,487.81
6,500.00

19,431.30
8,487.81
6,500.00

(10,817.28)
-

(55.67)
-

3,000.00
2,000.00
902.00

3,000.00
2,000.00
-

902.00

100.00

78,252.49

50,000.00
118,913.95

(50,000.00) (100.00)
(40,661.46) (34.19)

Difference between totals and sum of components is due to rounding off.

Miscellaneous Personnel Benefits Fund P59.40 billion


Appropriations for MPBF of P59.40 billion, net of the P11.26 billion
transferred to Overall Savings, is lower by P3.11 billion or 4.98 percent than last
years P62.51 billion. MPBF served as funding source for the implementation of
the third tranche salary increase authorized under the Senate and House of
Representatives Joint Resolution No. 4, s. 2009, as implemented by E.O. No. 811, s.
2009.

Retirement Benefits Fund P20.28 billion


Retirement Benefits Fund is used for the payment of pension, retirement and
terminal leave benefits, incentive package for employees availing of the
Rationalization Program per E.O. No. 366, s. 2004, and payment of monetization of
leave credits.
For the year, appropriations for Retirement Benefits Fund of P20.28 billion,
net of transferred to Overall Savings amounting to P14.72 billion, exhibited a
significant decrease of P41.53 billion or 67.19 percent.

Priority Development Assistance Fund P24.62 billion


The PDAF is one category under the SPFs with hefty allocation. It aims to
fund the priority development programs and projects of the government. Those
commonly referred to as "soft projects" of legislators are identified and
implemented under this Fund following a shortlist or menu as provided for in the
GAA such as scholarship programs, medical assistance to indigent patients,
livelihood support programs, purchase of IT equipment, rural electrification, water
supply, peace and order and financial assistance to LGUs for their priority programs
and projects. It also includes infrastructures like roads and bridges, flood control,
school buildings, hospitals, health facilities, public markets, multi-purpose
buildings, and multi-purpose pavements.
26

The annual Congressional Allocation of Legislators shall not exceed the


amount of P70 million for each Congressional District and Partylist Representative;
and P200 million for each Senator.
For the year, appropriations for PDAF of P24.62 billion is higher by P9.36
billion or 61.32 percent over last years P15.26 billion.

Budgetary Support to Government Corporations P19.54 billion


Special Provision No. 1 of the GAA on Budgetary Support to Government
Corporations (BSGC) states that all income and revenue collected by GOCCs from
all sources shall be used to cover all of its operating requirements. Any deficiency
may be augmented by the budgetary support from the NG, which may be either
subsidy or equity investments to GOCCs.
For the year, BSGC was budgeted at P19.54 billion, net of transfers from
Regular Appropriations and Overall Savings, lesser by P994.55 million or 4.84
percent. The decrease can be attributed to the policy of the present Administration
on self-sufficiency among government corporations. Among the GOCCs with
notable decrease in budgetary support are the National Food Authority P5.50
billion; Cagayan Economic Zone Authority P820.26 million; Aurora Pacific
Economic and Freeport Zone P663.70 million; National Home Mortgage Finance
Corporation P400.00 million; Philippine Heart Center P398.05 million; and
National Kidney and Transplant Institute P346.00 million. The Philippine
Institute for Development Studies exhibited a remarkable increase of P568.30
million from a mere P17.00 million budget in the previous year. The National
Electrification Administration and National Dairy Authority similarly increased by
P155.81 million and P242.82 million, respectively. Table III-6 presents the
comparative details of appropriations for BSGC.

Table III-6 Budgetary Support to Government Corporations


Amount (in million pesos)
Particulars
Increase/
2011
2010
(Decrease)
Agriculture
3,925.00
9,672.41
(5,747.41)
National Food Authority
2,500.00
8,000.00
(5,500.00)
Philippine Coconut Authority
542.70
645.69
(102.99)
Philippine Rice Research Institute
453.50
435.00
18.50
National Dairy Authority
315.02
72.20
242.82
Philippine Crop Insurance
Corporation
113.77
214.27
(100.50)
Quedan and Rural Credit
Guarantee Corporation
190.25
(190.25)
National Tobacco Administration
115.00
(115.00)
Energy
800.00
644.19
155.81
National Electrification
Administration
800.00
644.19
155.81
Health
939.11
1,767.96
(828.85)
Philippine Childrens Medical
Center
322.80
366.30
(43.50)
27

Percent
(59.42)
(68.75)
(15.95)
4.25
336.32
(46.90)
(100.00)
(100.00)
24.19
24.19
(46.88)
(11.88)

(Table III-6 continued)

Particulars
Lung Center of the Philippines
National Kidney and Transplant
Institute
Philippine Heart Center
Philippine Institute of Traditional
and Alternative Health Care
Tourism
Tourism Promotions Board
Philippine Convention and
Visitors Corporation
Trade and Industry
Aurora Pacific Economic and
Freeport Zone
Center for International Trade
Expositions and Missions
Cottage Industry Technology Center
Transportation and
Communications
Philippine National Railways
National Economic and
Development Authority
Philippine Institute for
Development Studies
Presidential Communications
Operations Office
Peoples Television Network,
Incorporated
Other Executive Offices
National Housing Authority
National Home Mortgage Finance
Corporation
Home Guaranty Corporation
Cagayan Economic Zone Authority
Cultural Center of the Philippines
Authority of the Free Port Area of
Bataan
Zamboanga City Special
Economic Zone Authority
Southern Philippines Development
Authority
Development Academy of the
Philippines
Budgetary Support to Government
Corporations Others
Total

Amount (in million pesos)


Increase/
2011
2010
(Decrease)
263.26
301.56
(38.30)

Percent
(12.70)

183.05
133.00

529.05
531.05

(346.00)
(398.05)

(65.40)
(74.96)

37.00
65.00
65.00

40.00
425.00
360.00

(3.00)
(360.00)
(295.00)

(7.50)
(84.71)
(81.94)

223.99

65.00
883.75

(65.00)
(659.76)

(100.00)
(74.66)

136.30

800.00

(663.70)

(82.96)

79.69
8.00

73.75
10.00

5.94
(2.00)

8.05
(20.00)

131.00
131.00

285.00
285.00

(154.00)
(154.00)

(54.04)
(54.04)

585.30

17.00

568.30

3,342.94

585.30

17.00

568.30

3,342.94

200.00

(200.00)

(100.00)

6,028.29
4,275.00

200.00
6,624.45
3,600.00

(200.00)
(596.16)
675.00

(100.00)
(9.00)
18.75

500.00
500.00
294.19
195.00

900.00
600.00
1,114.45
140.00

(400.00)
(100.00)
(820.26)
55.00

(44.44)
(16.67)
(73.60)
39.29

100.00

100.00

60.10

70.00

(9.90)

(14.14)

59.00

30.00

29.00

96.67

45.00

70.00

(25.00)

(35.71)

6,841.14
19,538.82

13.61
20,533.37

6,827.53
(994.55)

50,165.51
(4.84)

Difference between totals and sum of components is due to rounding off.

28

Allocations to Local Government Units P15.90 billion


An appropriation for ALGU was originally approved at P13.26 billion. It was
augmented by P2.64 billion from the Overall Savings for the funding requirements
of various development projects in the LGUs and the MMDA.
At P15.90 billion level, the ALGU represents 1.59 percent of the total
appropriations in the GAA for the year. Of the amount, P11.87 billion or 74.65
percent was allocated for the Special Shares of Local Government Units in the
Proceeds of National Taxes defined under Chapter 1, Section 285 of R.A. No. 7160,
Local Government Code of 1991, and P2.62 billion or 16.45 percent for Financial
Subsidy to LGUs. Table III-7 shows the comparative details of ALGU.

Table III-7 Comparative Details of Allocations to LGUs


Amount (in million pesos)
Particulars
Increase/ Percent
2011
2010
(Decrease)
Special Shares of LGUs in the
Proceeds of National Taxes
11,871.13 14,163.46 (2,292.33) (16.18)
Financial Subsidy to LGUs
2,615.40
5,674.70 (3,059.30) (53.91)
Metropolitan Manila Development
Authority
1,209.18
2,074.67
(865.49) (41.72)
Pasig River Rehabilitation
Commission
157.08
1,179.86 (1,022.78) (86.69)
Barangay Officials Death Benefits Fund
50.00
50.00
Premium Subsidy for Indigents under
the National Health Insurance
Program
5,170.00 (5,170.00) (100.00)
Municipal Development Fund
1,373.92 (1,373.92) (100.00)
Total

15,902.79

29,686.62 (13,783.82)

(46.43)

Difference between totals and sum of components is due to rounding off.

3.2.1.2 Automatic Appropriations P1.093 trillion


Automatic
appropriations
refer
to
appropriations programmed annually or for some
other period prescribed by law, by virtue of
outstanding legislation which does not require
periodic action by Congress. Falling under this
category are expenditures authorized under PD
No. 1967, R.A. No. 4860 and R.A. No. 245, as
amended, for the servicing of domestic and
foreign debts, Commonwealth Act 186 and R.A.
No. 660, for the retirement and insurance
premiums of government employees, PD No.
1177 and E.O. No. 292, for net lending to
government corporations, and PD No. 1234, for
various special accounts and funds.
29

Chart III-2 Sources of Automatic


Appropriations

R.A.
10147
29.85%
Other
Acts
70.15%

For 2011, Automatic Appropriations totaling P1.093 trillion represents 52.22


percent of current years total appropriations.
Shown in Chart III-2 and Table III-8 are the sources of automatic appropriations for
the year.
Table III-8 Automatic Appropriations
(in million pesos)
Increase /
Particulars
2011
2010
Decrease
Debt Service Principal
444,196.12
402,395.12
41,801.00
266,068.29
297,004.44
(30,936.15)
Debt Service Interest
IRA
286,944.24
265,802.38
21,141.86
SAGF
34,401.48
25,141.61
9,259.87
RLIP
25,430.61
22,463.11
2,967.50
Tax Subsidy
18,999.93
126.97
18,872.96
Customs Duties
14,420.64
46,917.34
(32,496.70)
Grants and Donations
2,548.05
1,038.48
1,509.57
Tax Refunds
294.04
294.04
NIPAS
20.00
15.51
4.49
Sale of Assets
9.29
3.49
5.80
Total

1,093,332.70

1,060,908.45

32,424.25

Percent
10.39
(10.42)
7.95
36.83
13.21
14,864.11
(69.26)
145.36
28.95
166.29
3.06

Difference between totals and sum of components is due to rounding off.

This years appropriations for Debt Service Principal Amortization amounted to


P444.20 billion representing 21.22 percent of the total current years appropriations of
P2.094 trillion. The amount is higher by P41.80 billion or 10.39 percent than last years
level of P402.40 billion. On the other hand, Interest Payments of P266.07 billion
accounted for 12.71 percent of this years current budget, which is lower by P30.94
billion or 10.42 percent than last years P297 billion.

3.2.1.3 Continuing Appropriations P315.07 billion


Continuing appropriations refer to appropriations available to support obligations
for a specified purpose or project, like multi-year construction projects which require the
incurrence of obligations even beyond the budget year.
Presented in Table III-9 are the departments/agencies with P315.07 billion balances
of continuing appropriations. Of this amount, P223.75 billion pertains to unreleased
appropriations under R.A. No. 9970 which were made available as sources of the national
budget for the year; and P91.32 billion refers to the unobligated allotments at the end of
2010 which were valid for obligations up to December 31, 2011.

30

Table III-9 Continuing Appropriations by Department/Agency and Source


(in million pesos)
Special
Regular
Automatic
Department/Agency
Total
Purpose
Appropriations
Appropriations
Funds
Public Works and Highways
69,904.43
60,677.36
6,058.40
3,168.67
Finance
22,100.70
1,701.79
20,327.14
71.77
Education
12,851.34
12,797.44
53.90
Budget and Management
12,714.75
341.39
12,324.17
49.19
National Defense
9,110.61
1,051.90
5,335.78
2,722.92
Agriculture
8,779.10
8,602.62
112.73
63.75
Health
7,746.53
7,426.39
298.22
21.92
Agrarian Reform
5,711.61
5,235.85
65.65
410.12
Social Welfare and
Development
5,651.14
4,301.45
1,349.68
0.01
Commission on Elections
5,335.34
4,331.29
10.00
994.04
Interior and Local
Government
3,512.66
3,380.06
4.78
127.83
Environment and Natural
Resources
3,352.09
2,810.65
214.70
326.74
State Universities and
Colleges
3,239.37
3,047.23
192.14
Transportation and
Communications
2,750.40
2,628.93
0.82
120.65
Other Executive Offices
2,207.65
1,762.02
140.85
304.79
Congress of the Philippines
1,504.51
1,504.51
Office of the President
1,384.37
1,307.98
39.88
36.52
Science and Technology
1,254.33
1,245.28
8.89
0.16
The Judiciary
1,232.61
1,232.09
0.11
0.41
Foreign Affairs
1,054.20
680.52
373.67
Labor and Employment
712.30
648.54
63.76
Office of the Ombudsman
693.39
627.01
66.38
Trade and Industry
664.84
299.77
8.48
356.58
Justice
608.42
522.48
33.10
52.84
National Economic and
Development Authority
570.02
557.30
12.72
Energy
347.58
242.87
5.00
99.71
Presidential
Communications
Operations Office
271.31
225.78
45.53
Tourism
266.46
266.46
Autonomous Region in
Muslim Mindanao
263.88
263.74
0.13
Metropolitan Manila
Development Authority
87.56
87.56
Commission on Audit
42.41
39.38
3.04
Office of the VicePresident
33.50
33.50
-

31

(Table III-9 continued)

Department/Agency
Pasig River Rehabilitation
Commission
Commission on Human
Rights
Joint LegislativeExecutive Councils
SPF Unreleased
Appropriations
Overall Savings
Total

Total

Regular
Appropriations

Special
Purpose
Funds

Automatic
Appropriations

16.58

16.58

9.58

9.58

0.07

0.07

112,466.27
16,613.50

11,689.03

112,466.27
4,924.07

0.40

315,065.42

141,492.25

164,562.01

9,011.16

Difference between totals and sum of components is due to rounding off.

3.2.2

ALLOTMENTS P2.161 trillion


Allotments are the authorizations issued by the DBM to NGAs to incur obligations
for implementation of programs, projects and other expenditure items. For fiscal year
2011, allotments aggregated at P2.161 trillion or 89.73 percent of the total NG budget
for the year of P2.409 trillion. Of the total allotments, P2.025 trillion or 93.70 percent
was charged to current years appropriations under R.A. No. 10147 and P136.08 billion
or 6.30 percent was released from the continuing appropriations under R.A. No. 9970.
Current years allotments consist of Regular Appropriations P758.63 billion,
SAGF P11.55 billion, SPFs P161.80 billion and Automatic Appropriations P1.093
trillion.
About 40.63 percent or P444.20 billion of allotments under Automatic
Appropriations pertain to Debt Service Principal Amortization while 24.34 percent or
P266.07 billion was for Debt Service Interest Payment and 26.24 percent or P286.94
billion was for IRA. Allotments under other Automatic Appropriations accounted for
P96.12 million or 8.79 percent. Table III-10 shows the detailed sources and nature of
allotments released for 2011 including those for DAP amounting to P53.36 billion as
shown in Schedule 7, Volume I-B.

Table III-10 Sources and Nature of Allotments


(in million pesos)
Particulars
Total
PS
MOOE
General Appropriations Act
931,991.03 481,479.89
257,134.15
Regular
758,632.14 399,406.94
184,954.91
SAGF
11,554.05
2,372.55
8,956.95
SPFs
161,804.84
79,700.40
63,222.28
Automatic Appropriations
1,093,332.70
25,753.19
341,326.46
Debt Service Principal
444,196.12
Debt Service - Interest
266,068.29
IRA
286,944.24
286,944.24
Customs Duties
14,420.64
14,420.64
32

FE
2.57
2.57
266,068.29
266,068.29
-

CO
193,374.43
174,267.72
224.55
18,882.15
460,184.75
444,196.12
-

(Table III-10 continued)

Particulars
SAGF
RLIP
Grants and Donations
Tax Subsidy
Tax Refunds
NIPAS
Sale of Assets
Total Current Years
Allotments
Continuing Appropriations
Unobligated Allotments
Unreleased Appropriations
Total Allotments

Total
34,401.48
25,430.61
2,548.05
18,999.93
294.04
20.00
9.29

PS
316.07
25,430.61
6.51
-

2,025,323.74 507,233.08
136,077.38
91,315.22
44,762.16
2,161,401.12

MOOE
19,030.91
1,620.13
18,999.93
294.04
16.39
0.19

598,460.61

FE
-

CO
15,054.50
921.42
-

3.61
9.11

266,070.86 653,559.18

1,083.43
1,083.43
-

57,594.08
39,691.03
17,903.05

77,399.87
50,540.76
26,859.11

508,316.51

656,054.69

266,070.86

730,959.05

Difference between totals and sum of components is due to rounding off.

Allotments under Capital Outlays totaling P730.96 billion or 33.82 percent of


the total allotments, include P444.20 billion for loan principal repayments and
P286.76 billion for infrastructures and other capital expenditures. Releases for
MOOE aggregated at P656.05 billion or 30.35 percent while Personal Services
and Financial Expenses accounted for P508.32 billion or 23.52 percent and
P266.07 billion or 12.31 percent, respectively.

3.2.2.1 Allotments from Regular Appropriations P758.63 billion


Total allotments for programmed activities of various agencies of the NG
stood at P758.63 billion, higher by P153.68 billion or 25.40 percent than last
years level of P604.95 billion. The DepEd got the largest regular allotments of
P182.11 billion, affirming the NGs commitments for education. The DPWH was
allotted with P109.80 billion and DND received P104.22 billion. Table III-11
shows the regular allotments released to various departments/agencies by
allotment class.
Table III-11 Regular Allotments, by Department/Agency and Allotment Class
(in million pesos)
Department/Agency
Total
PS
MOOE
FE
CO
Education
182,109.10 145,806.86
23,884.35 2.57 12,415.31
Public Works and Highways
109,801.79
3,822.45
6,014.49
- 99,964.85
National Defense
104,217.44
81,749.97
17,081.33
5,386.13
Interior and Local Government
86,954.53
73,519.60
11,330.33
2,104.60
Social Welfare and Development
37,159.91
753.12
36,055.03
351.76
Agriculture
33,402.11
2,846.74
12,341.53
- 18,213.84
Transportation and
Communications
30,108.07
3,320.54
10,329.67
- 16,457.86

33

(Table III-11 continued)

Department/Agency
Health
State Universities and Colleges
Finance
The Judiciary
Environment and Natural
Resources
Autonomous Region in Muslim
Mindanao
Foreign Affairs
Science and Technology
Congress of the Philippines
Justice
Labor and Employment
Office of the President
Other Executive Offices
Commission on Audit
Agrarian Reform
Trade and Industry
Commission on Elections
National Economic and
Development Authority
Tourism
Budget and Management
Office of the Ombudsman
Energy
Presidential Communications
Operations Office
Civil Service Commission
Commission on Human Rights
Office of the Vice-President
Joint Legislative- Executive
Councils

Total
28,342.44
21,373.93
13,735.75
13,621.52

PS
7,234.41
18,384.46
4,859.35
10,050.14

MOOE
12,139.68
2,977.33
6,662.09
3,486.26

11,823.26

5,216.70

11,777.29
10,550.06
9,358.20
8,491.34
7,631.13
7,277.72
4,605.61
4,481.74
4,293.33
3,885.31
2,483.98
2,255.45

Total

FE
-

CO
8,968.35
12.15
2,214.31
85.12

4,120.40

2,486.16

7,082.84
5,200.88
2,343.33
3,584.79
5,435.25
2,785.13
640.41
2,075.70
3,857.23
1,907.60
952.66
1,546.11

2,317.48
5,221.81
6,406.93
4,879.47
2,059.10
4,322.80
3,861.95
2,301.95
298.20
780.76
1,250.78
709.33

2,376.98
127.38
607.93
27.08
136.79
169.79
103.25
104.08
137.90
1,196.95
280.54
-

2,122.20
1,606.53
1,157.81
1,031.90
930.06

1,101.61
291.45
725.65
843.55
204.95

970.30
1,140.08
397.55
188.35
687.94

50.29
175.00
34.61
37.17

929.60
666.85
266.90
177.11

493.75
523.97
207.55
36.57

403.41
137.09
59.35
137.30

32.44
5.80
3.24

2.19

1.63

0.50

0.06

758,632.14

399,406.94

184,954.91

2.57

174,267.72

Difference between totals and sum of components is due to rounding off.

3.2.2.2 Allotments from Special Purpose Funds P161.80 billion


Out of the total SPF appropriations of P229.21 billion, SPF allotment releases
for NGAs operations and other expenditures reached P161.80 billion. Almost
36.71 percent or P59.40 billion came from MPBF to cover the third tranche of
salary increase of government officials and employees effective June 1, 2011.
Unprogrammed Fund shared P20.45 billion or 12.64 percent and Priority
Development Assistance Fund constituted P20.42 billion or 12.62 percent of the
total allotments charged to SPFs. Table III-12 shows the comparison of SPFs for
the last two years.
34

Table III-12 Allotments from Special Purpose Funds


Amount (in million pesos)
Particulars
Increase / Percent
2011
2010
Decrease
Miscellaneous Personnel
Benefits Fund
59,397.93 62,511.83 (3,113.90)
(4.98)
Unprogrammed Fund
20,448.76
5,862.02
14,586.74
248.83
Priority Development
Assistance Fund
20,423.24
8,593.49
11,829.75
137.66
Retirement Benefits Fund
20,275.94 61,802.23 (41,526.30) (67.19)
Budgetary Support to GOCCs 16,038.82 16,798.27
(759.45)
(4.52)
Allocations to LGUs
14,793.43 18,837.24 (4,043.81) (21.47)
Calamity Fund
5,708.23
1,669.30
4,038.93
241.95
International Commitments
Fund
2,964.33
1,508.40
1,455.93
96.52
DepEd School Building
Program
824.30
1,853.87 (1,029.57) (55.54)
Contingent Fund
671.32
909.40
(238.08) (26.18)
E-Government Fund
258.54
393.95
(135.41) (34.37)
Total

161,804.84 180,740.01 (18,935.17)

(10.48)

Difference between totals and sum of components is due to rounding off.

Details of allotments from SPFs are presented in Schedule 5, Volume I-B.

Budgetary Support to Government Corporations P16.04 billion


Allotments for budgetary support representing equity investments and
subsidies by the NG to GOCCs decreased to P16.04 billion from last years level of
P16.80 billion, showing a decline of P759.45 million or 4.52 percent. It was
allocated as subsidies under MOOE at P14.98 billion and as equity investments
under CO at P1.05 billion. The National Housing Authority got P4.28 billion or
26.65 percent of the aggregate amount of P16.04 billion for the implementation of
the resettlement program of the government. The amount of P2.50 billion or 15.59
percent went to the National Food Authority for stabilization and food security,
P1.87 billion or 11.64 percent was released to the Light Rail Transit Authority for
the rehabilitation of LRT Lines 1 and 2, and the remaining P7.40 billion or 46.12
percent went to other GOCCs as shown in Table III-13, for various purposes.
Table III-13 GOCCs with Budgetary Support from
the National Government
(in million pesos)
Particulars

Total

National Housing Authority


National Food Authority
Light Rail Transit Authority

4,275.00
2,500.00
1,867.51

35

Equity
Investments
4,275.00
2,500.00
1,867.51
-

Subsidies

(Table III-13 continued)

Particulars

800.00

Equity
Investments
800.00
-

585.30
542.70

585.30
542.70

500.00
500.00

500.00
-

500.00

500.00
453.51
450.00
336.00
322.80
315.02
294.19
263.26
195.00

500.00
453.51
450.00
336.00
322.80
315.02
263.26
195.00

294.19
-

183.05

183.05

136.30
133.00
131.00
113.77

45.00
133.00
131.00
113.77

91.30
-

110.00
100.00

110.00
-

100.00

79.69
75.00
65.00

79.69
17.50
65.00

57.50
-

60.10

49.10

11.00

59.00

59.00

45.00

45.00

37.00
8.00
1.50
1.12

37.00
8.00
1.50
1.12

16,038.82

14,984.83

1,053.99

Total

National Electrification Authority


Philippine Institute for Development
Studies
Philippine Coconut Authority
National Home Mortgage Finance
Corporation
Home Guaranty Corporation
Philippine Fisheries Development
Authority
Philippine Rice Research Institute
National Irrigation Authority
Technology Resource Center
Philippine Children's Medical Center
National Dairy Authority
Cagayan Economic Zone Authority
Lung Center of the Philippines
Cultural Center of the Philippines
National Kidney and Transplant
Institute
Aurora Pacific Economic and Freeport
Zone
Philippine Heart Center
Philippine National Railways
Philippine Crop Insurance Corporation
Natural Resources Development
Corporation
Authority of the Freeport Area of Bataan
Center for International Trade
Expositions and Missions
Credit Information Corporation
Tourism Promotion Board
Zamboanga City Special Economic
Zone Authority
Southern Philippines Development
Authority
Development Academy of the
Philippines
Philippine Institute of Traditional and
Alternative Health Care
Cottage Industry Technology Center
Philippine Health Insurance Corporation
SBSGC
Total

Subsidies

Difference between totals and sum of components is due to rounding off.

36

Allocations to Local Government Units P14.79 billion


Total allotments from ALGU of P14.79 billion exhibited an increment of
P4.04 billion or 21.47 percent from last years P18.84 billion. Special Shares of
LGUs in the Proceeds of National Taxes at P10.81 billion constituted 73.05 percent
of the aggregate ALGU. It primarily consists of P3.84 billion Shares of LGUs in
Tobacco Excise Tax provided under R.A. No. 7171 and R.A. No. 8240 and releases
for prior years obligations of the NG of P6.10 billion for IRA Monetization
Program provided under Special Provisions of the GAA. Table III-14 shows the
details of allotments released to LGUs.
Table III-14 Allotments from Allocations to LGUs
Amount
Percentage
Particulars
(in million pesos) Distribution
Special Shares of LGUs in the Proceeds
of National Taxes
10,806.13
73.05
Financial Subsidy to LGUs
2,595.20
17.54
Metropolitan Manila Development
Authority
1,209.18
8.17
Pasig River Rehabilitation Commission
157.08
1.06
Barangay Officials Death Benefits Fund
25.83
0.17
Total

14,793.43

100.00

Difference between totals and sum of components is due to rounding off.

Priority Development Assistance Fund P20.42 billion


For calendar year 2011, allotments from PDAF amounted to P20.42 billion
posting an increment of P11.83 billion or 137.66 percent from last years allotments
of P8.59 billion. Table III-15 shows the comparative allotments by
department/agency for the years 2011 and 2010.
Table III-15 Allotments from Priority Development Assistance Fund
Amount (in million pesos)
Department/Agency
Increase / Percent
2011
2010
Decrease
Public Works and Highways
11,352.03
598.43 10,753.60 1,796.97
Budget and Management
5,413.93 3,120.35
2,293.58
73.50
Finance
716.48 2,308.18 (1,591.70)
(68.96)
Social Welfare and Development
681.45
997.15
(315.70)
(31.66)
Agriculture
620.59
211.11
409.48
193.96
State Universities and Colleges
516.02
411.61
104.41
25.37
Health
390.37
439.76
(49.39)
(11.23)
Other Executive Offices
324.28
163.53
160.75
98.30
Labor and Employment
243.36
184.65
58.71
31.80
Education
63.14
110.78
(47.64)
(43.00)
Interior and Local Government
35.61
4.75
30.86
649.58

37

(Table III-15 continued)

Amount (in millions pesos)


Increase /
2011
2010
Decrease

Department/Agency
Autonomous Region in Muslim
Mindanao
Trade and Industry
Environment and Natural
Resources
Energy
Total

Percent

30.50
21.75

9.00
13.15

21.50
8.60

238.89
65.43

13.73
-

16.05
5.00

(2.32)
(5.00)

(14.45)
(100.00)

20,423.24 8,593.50

11,829.74

137.66

Difference between totals and sum of components is due to rounding off.

The highest PDAF allotment of P11.35 billion was released to DPWH for
construction, repair and rehabilitation of public infrastructures such as roads,
bridges, flood control facilities, water supply systems, school buildings and other
educational facilities, hospitals and other health facilities, public markets and multipurpose buildings. The DBM received P5.41 billion as financial assistance for the
implementation of priority programs and projects of various LGUs nationwide
while the DOF got P716.48 million as budgetary support to GOCCs for medical
assistance to indigent patients in hospitals.

3.2.2.3 Allotments from Automatic Appropriations P1.093 trillion


Allotments charged to Automatic Appropriations reached P1.093 trillion,
representing 50.58 percent of the total allotments of P2.161 trillion. Debt Service
Principal Amortization of P444.20 billion constituted 40.63 percent while Debt
Service Interest Payment at P266.07 billion accounted for 24.34 percent and IRA
at P286.94 billion shared 26.24 percent. Table III-16 shows the comparative figures
of allotments for the last two years.
Details of allotments from Automatic Appropriations are presented in
Schedule 6, Volume I-B.

Table III-16 Allotments from Automatic Appropriations


(in million pesos)
Increase /
Particulars
2011
2010
Percent
Decrease
444,196.12
402,395.12
41,801.00
10.39
Debt Service Principal
266,068.29
297,004.44
(30,936.15)
(10.42)
Debt Service Interest
IRA
286,944.24
265,802.38
21,141.86
7.95
SAGF
34,401.48
24,491.17
9,910.31
40.46
RLIP
25,430.61
22,433.88
2,996.73
13.36
Tax Subsidy
18,999.93
126.97
18,872.96 14,863.71

38

(Table III-16 continued)

Particulars
Customs Duties
Grants and Donations
Tax Refunds
NIPAS (Sec. 16 RA 7586)
Sale of Assets
Total

14,420.64
2,548.05
294.04
20.00
9.29

46,917.34
1,038.48
15.51
3.49

Increase /
Decrease
(32,496.70)
1,509.57
294.04
4.49
5.80

1,093,322.70

1,060,228.79

33,103.91

2011

2010

Percent
(69.26)
145.36
28.95
165.90
3.12

Difference between totals and sum of components is due to rounding off.

Internal Revenue Allotments P286.94 billion


Sections 284 and 285 of R.A. No. 7160 also known as the Local
Government Code provide that LGUs shall have a share in the national internal
revenue taxes. For this year, IRA amounted to P286.94 billion, higher by P21.14
billion or 7.95 percent than last years data of P265.80 billion.

3.2.3 Unreleased/Unallotted Appropriations P68.40 billion


Section 65, General Provisions of R.A. No. 10147 provides that appropriations for
MOOE and CO authorized under this Act shall be available for release and obligation for
a period extending to one calendar year after the end of the year. Section 28, Chapter IV,
Book VI of E.O. No. 292, also states that appropriations for Capital Outlays shall remain
valid until fully spent or reverted.
At yearend, the unreleased appropriations stood at P68.40 billion or 3.27 percent of
the aggregate current years appropriations. The balance of unreleased appropriations for
Regular totaling P6.77 billion consists of MOOE P0.45 billion and CO P6.32 billion;
SAGF with MOOE P1.01 billion; and SPFs totaling P67.41 billion consists of PS
P11.66 billion, MOOE P11.89 billion and CO P43.86 billion. The total unreleased
appropriation for PS is for reversion and those for MOOE and CO are for retention as
continuing appropriations. Details are shown in Table III-17.

Table III-17 Summary of Unreleased Appropriations


(in million pesos)
Particulars
General Appropriations Act
Regular
SAGF
SPFs
Overall Savings

Appropriations
1,000,387.76
765,405.33
12,566.90
229,210.85
(6,795.32)

39

Allotments
931,991.03
758,632.14
11,554.05
161,804.84
-

Unreleased
Appropria- Percent
tions

68,396.73
6,773.19
1,012.85
67,406.01
(6,795.32)

6.84
0.88
8.06
29.41
-

(Table III-17 continued)

Particulars
Automatic Appropriations
Debt Service Principal
Debt Service Interest
IRA
Other Automatic
Appropriations
Total Current Years
Unreleased Appropriations

Appropriations

Allotments

Unreleased
Appropria- Percent
tions

1,093,332.70
444,196.12
266,068.29
286,944.24

1,093,332.70
444,196.12
266,068.29
286,944.24

0.00
-

0.00
-

96,124.05

96,124.05

2,093,720.46

2,025,323.74

68,396.73

3.27

Difference between totals and sum of components is due to rounding off.

3.2.4 Obligations P1.997 trillion


Obligations for the year aggregated at P1.997 trillion or 92.40 percent of the total
allotment releases. Table III-18 shows the Summary of Allotments, Obligations and
Unobligated Allotments.
Table III-18 Summary of Allotments, Obligations and Balances
(in million pesos)
Unobligated
Particulars
Allotments
Obligations*
Allotments
General Appropriations
Act
931,991.03
812,610.37
119,380.67
Regular
758,632.14
656,855.27
101,776.87
SAGF
11,554.05
9,402.61
2,151.44
SPF
161,804.84
146,352.49
15,452.35
Automatic Appropriations
1,093,332.70
1,068,935.61
24,397.09
Debt Service Principal
444,196.12
444,196.12
0.00
Debt Service Interest
266,068.29
266,068.29
0.00
IRA
286,944.24
286,942.56
1.68
Other Automatic
Appropriations
96,124.05
71,728.64
24,395.41
Total Current Years
Appropriations
2,025,323.74
1,881,545.98
143,777.75
Continuing Appropriations
Unobligated Allotments
91,315.22
76,859.16
14,456.07
Unreleased Appropriations
44,762.16
38,680.29
6,081.87
Total Continuing
Appropriations
136,077.38
115,539.45
20,537.93
Total

2,161,401.12

1,997,085.43

*Does not include obligations not covered by allotments.


Difference between total and sum of components is due to rounding off.

40

164,315.69

Table III-19 reflects the Obligations Covered by Allotments, by Department/Agency,


and by Allotment Class.
Table III-19 Obligations Covered by Allotments, by Department/
Agency and Allotment Class
(in million pesos)
Total
PS
MOOE
FE
Department/Agency
Finance
817,664.24
6,337.49
85,578.70 266,068.29
Budget and Management
320,964.66
2,607.72
317,981.62
Education
219,069.24
186,819.66
21,639.06
2.54
Public Works and Highways
121,381.69
5,118.89
12,019.08
National Defense
117,481.84
96,019.70
19,218.93
Interior and Local
Government
102,819.66
90,504.45
10,475.34
Social Welfare and
Development
36,936.08
996.28
35,437.82
Agriculture
32,737.96
3,782.70
11,491.89
Transportation and
Communications
31,755.04
4,397.74
13,473.52
Health
30,527.77
9,397.12
13,327.82
State Universities and
Colleges
27,685.61
23,772.90
3,703.59
The Judiciary
16,153.47
12,587.80
3,235.18
Environment and Natural
Resources
13,961.54
6,805.71
4,249.43
Foreign Affairs
12,965.20
5,517.83
7,230.21
Autonomous Region for
Muslim Mindanao
12,931.82
8,600.40
2,317.61
Agrarian Reform
11,580.77
5,181.30
4,664.34
Science and Technology
10,050.95
3,073.28
6,243.16
Justice
9,968.14
7,452.65
2,364.43
Congress of the Philippines
9,527.61
3,961.14
5,430.26
Labor and Employment
8,096.91
3,752.25
4,126.05
Other Executive Offices
5,968.74
2,812.23
2,924.09
Commission on Audit
5,429.79
5,100.09
294.20
Office of the President
4,289.03
727.41
3,390.02
Commission on Elections
3,235.82
1,878.08
1,316.42
Trade and Industry
2,981.53
1,274.73
1,324.61
National Economic and
Development Authority
2,517.57
1,429.20
1,017.92
Tourism
1,697.16
366.26
1,155.90
Presidential
Communications Operations
Office
1,387.80
651.08
595.71
Metropolitan Manila
Development Authority
1,365.83
154.92
965.00
Office of the Ombudsman
1,288.68
1,035.24
190.62
Energy
1,185.15
277.25
795.15
Civil Service Commission
821.99
680.11
136.08
Commission on Human
Rights
323.34
261.78
61.56
-

41

CO
459,679.76
375.32
10,607.98
104,243.72
2,243.21
1,839.87
501.97
17,463.36
13,883.79
7,802.83
209.12
330.49
2,906.40
217.16
2,013.82
1,735.13
734.51
151.06
136.21
218.62
232.42
35.50
171.60
41.32
382.19
70.45
175.00

141.00
245.91
62.82
112.74
5.80
-

(Table III-19 continued)

Department/Agency
Office of the Vice-President
Pasig River Rehabilitation
Commission
Joint Legislative Executive
Councils
Total

Total
202.83

PS
44.31

MOOE
157.75

127.82

9.63

2.15
1,997,085.43

FE
-

CO
0.77

71.49

46.70

1.66

0.39

0.10

503,390.99

598,604.95

266,070.83

629,018.66

Difference between totals and sum of components is due to rounding off.

As in the previous years, DOF incurred the highest obligations at P817.66 billion
due mainly to debt servicing requirements of the NG amounting to P710.26 billion. Of
the amount, P444.20 billion was obligated for principal amortization and P266.27 billion
was incurred for interest payments, including commitment fees, bank charges and other
financial charges.
The DBM, as fund administrator, ranked second, reported obligations of P320.96
billion, consisting of IRA P286.94 billion; ALGU P14.58 billion and various funds
P19.44 billion. The DepED incurred the third highest obligations amounting to P219.07
billion of which P186.82 billion or 85.28 percent was for salaries, allowances and other
personnel benefits of teaching and non-teaching personnel of the Department and its
attached agencies.
At yearend, some departments/agencies reported overdrafts or obligations not
covered by allotments totaling P207.43 million. The Department of Health incurred an
overdraft of P105.56 million for the payment of personnel benefits, including longevity
pay, monetization of leave credits and hazard pay authorized under the Magna Carta for
Public Health Workers.
The Department of Energy incurred overdraft of P100.02 million of which P96.31
million was for the Philippine Energy Efficiency Project; P0.59 million for Electric
Cooperative System Loss Reduction Project; and P3.12 million for regular operating
expenses.
The Commission on Filipino Language under Other Executive Offices had an
overdraft of P0.64 million incurred for the payment of terminal leave benefits. Its request
for the covering allotment has not yet been granted by the DBM.
The DOJs overdraft of P0.62 million was incurred by the Parole and Probation
Administration, for the relief operations and restoration of damages brought about by
typhoon Sendong in Region X.
Shown in Table III-20 are the details of Obligations Not Covered by Allotments, by
Department/Agency and Allotment Class.

42

Table III-20 Obligations Not Covered by Allotments, by Department/


Agency and Allotment Class
(in million pesos)
Department/Agency
Total
PS
MOOE
CO
Health
105.56 105.56
Energy
100.02
3.12
96.89
Other Executive Offices
0.91
0.77
0.13
Justice
0.62
0.62
0.03
Office of the President
0.26
0.23
Tourism
0.07
0.07
Total

207.43

109.49

0.85

97.09

Difference between totals and sum of components is due to rounding off.

3.2.5 Unobligated Allotments P143.78 billion


At the close of 2011, unobligated allotments of NGAs reached P143.78 billion, the
difference between allotments of P2.025 trillion and obligations of P1.882 trillion. The
details of the unobligated allotments are: PS P4.14 billion, MOOE P50.55 billion and
CO P89.09 billion. Section 65, General Provisions, R.A. No. 10147, provides that
appropriations for MOOE and Capital Outlays shall be available for release and
obligation for a period extending to one fiscal year after the end of the year in which such
items were appropriated. Thus, at yearend, the unobligated allotments of P4.14 billion
shall be reverted while the P50.55 billion for MOOE and P89.09 billion for CO shall be
retained as allotted continuing appropriations, available for obligation up to December 31,
2012.

43

IV. FINANCIAL STATEMENTS

National Government of the Republic of the Philippines


Condensed Balance Sheet
As of December 31, 2011

2011

Amount (In thousand pesos)


Increase
2010
(Decrease)

Percent

ASSETS
Current Assets
Cash (Note 4.6)
Receivables (Note 4.7)
Inventories
Prepayments (Note 4.8)
Other Current Assets

1,186,635,929.99
262,514,417.66
760,049,247.00
26,370,237.42
130,055,757.04
7,646,270.87

1,203,322,845.47
324,176,711.12
743,355,998.48
25,199,509.94
99,162,010.94
11,428,614.99

Investments (Note 4.9)

1,016,243,590.62

842,102,100.81

Property, Plant and Equipment (Note 4.10)


Land and Land Improvements
Buildings
Leasehold Improvements
Office Equipment, Furniture and Fixtures
Machineries and Equipment
Transportation Equipment
Other Property, Plant and Equipment
Construction in Progress

987,058,346.31
198,777,358.39
141,098,205.34
350,682.77
32,879,306.56
48,382,515.82
24,859,590.07
7,081,960.80
533,628,726.55

985,800,170.65
203,622,074.14
133,866,279.27
282,225.90
31,961,281.09
46,275,957.84
24,322,119.38
6,175,588.81
539,294,644.21

1,258,175.66
(4,844,715.76)
7,231,926.08
68,456.87
918,025.47
2,106,557.98
537,470.70
906,371.99
(5,665,917.67)

0.13
(2.38)
5.40
24.26
2.87
4.55
2.21
14.68
(1.05)

Other Assets (Note 4.11)

109,501,927.00

107,636,700.19

1,865,226.82

1.73

3,299,439,793.92

3,138,861,817.12

160,577,976.80

5.12

Current Liabilities (Note 4.12.1)


Payable Accounts
Inter - Agency Payables
Intra - Agency Payables
Other Liability Accounts
Loans Payable- Domestic, Current

710,193,731.92
114,370,525.68
65,253,731.72
147,722,257.91
85,466,695.29
297,380,521.32

813,020,739.71
122,372,756.85
49,816,032.41
7,208,543.22
80,403,915.35
553,219,491.87

Long Term Liabilities (Note 4.12.2)

4,644,761,074.53

4,178,785,583.30

465,975,491.23

11.15

27,060,301.55

26,632,575.49

427,726.06

1.61

5,382,015,108.00

5,018,438,898.50

363,576,209.51

7.24

(202,998,232.70)

10.80

160,577,976.80

5.12

TOTAL ASSETS

(16,686,915.48)
(61,662,293.46)
16,693,248.52
1,170,727.48
30,893,746.10
(3,782,344.13)

(1.39)
(19.02)
2.25
4.65
31.15
(33.10)

174,141,489.81

20.68

LIABILITIES

Deferred Credits (Note 4.12.3)


TOTAL LIABILITIES
EQUITY
Government Equity (Note 4.13 )
TOTAL LIABILITIES AND EQUITY

(2,082,575,314.08) (1,879,577,081.37)
3,299,439,793.92

Difference between totals and sum of components is due to rounding off.

44

3,138,861,817.12

(102,827,007.78)
(8,002,231.17)
15,437,699.31
140,513,714.68
5,062,779.94
(255,838,970.55)

(12.65)
(6.54)
30.99
1,949.27
6.30
(46.25)

National Government of the Republic of the Philippines


Condensed Statement of Income and Expenses
For the Year Ended December 31, 2011

Amount (In thousand pesos)


2010

Increase
(Decrease)

1,399,016,708.69

1,243,676,540.12

155,340,168.58

1,221,943,746.14

1,090,909,324.92

131,034,421.22

177,072,962.55

152,767,215.19

24,305,747.35

7,739,470.97
32,029,531.38
45,430,648.15
91,873,312.05

459,620.01
74,163,616.53
10,977,870.88
67,166,107.77

7,279,850.96
(42,134,085.15)
34,452,777.26
24,707,204.28

2011
INCOME/REVENUE (Note 4.14)
Tax Revenue
General Income
Permits and Licenses
Service Income
Business Income
Other Income

Percent
12.49
12.01
15.91
1,583.88
(56.81)
313.84
36.79

LESS: CURRENT OPERATING EXPENSES


Personal Services
Maintenance and Other Operating Expenses

709,723,668.65

637,457,265.94

72,266,402.71

512,110,992.85
197,612,675.80

464,219,664.38
173,237,601.55

47,891,328.47
24,375,074.25

11.34
10.32
14.07

Income from Current Operations

689,293,040.04

606,219,274.18

83,073,765.86

13.70

(391,266,566.73)

(340,097,090.75)

(51,169,475.99)

(317,896,685.84)

(281,547,018.17)

(36,349,667.67)

15.05
12.91

(72,842,240.62)
(527,640.28)

(57,104,688.60)
(1,445,383.98)

(15,737,552.02)
917,743.70

27.56
(63.49)

Income after Subsidies

298,026,473.31

266,122,183.43

31,904,289.87

11.99

Less: Financial Expenses

282,771,722.55

304,516,600.13

(21,744,877.58)

(7.14)

15,254,750.75

(38,394,416.70)

53,649,167.45

(139.73)

2,794,300.81

(35,470,663.04)

38,264,963.85

(107.88)

Subsidy to LGUs, GOCCs, NGOs/POs


Local Government Units, net (Note 4.15.1)
Government Owned and/or Controlled Corporations
(Note 4.15.2)
NGOs/POs

Income/(Loss) before Other Income/Expense Items


Net Subsidy From/(To) National Government
Agencies (Note 4.16.1 and 4.16.2)
Net Gain/(Loss)
Loss of Assets
Loss on Guaranty
Gain/Loss on Foreign Exchange (FOREX)
Gain/Loss on Sale of Disposed Assets
Gain/Loss on Sale of Securities

(31,674,006.17)

49,781,956.44

(81,455,962.60)

(38,690.85)
(3,157,035.48)
(28,471,379.95)
(49,962.08)
43,062.21

(61,127.75)
(4,571,077.81)
54,214,718.51
(48,263.11)
247,706.60

22,436.90
1,414,042.32
(82,686,098.47)
(1,698.97)
(204,644.39)

(163.63)
(36.70)
(30.93)
(152.52)
3.52
(82.62)

NET INCOME/(LOSS)

(13,624,954.60)

(24,083,123.30)

10,458,168.69

(43.43)

Difference between totals and sum of components is due to rounding off.

45

National Government of the Republic of the Philippines


Condensed Statement of Government Equity
As of December 31. 2011

Amount (In thousand pesos)


2011
Government Equity, Beginning Balance

2010

Increase
(Decrease)

(1,959,632,220.07) (1,765,922,839.20) (193,709,380.88)

Percent
10.97

Retained Operating Surplus


Current Operations
Prior Years' Adjustments

(90,389,381.58)
(13,624,954.60)
(76,764,426.98)

(71,395,106.95)
(24,083,123.30)
(47,311,983.66)

(18,994,274.63)
10,458,168.69
(29,452,443.32)

26.60
(43.43)
62.25

Transfer to Registry of Public Infrastructures


Transfer to Registry of Reforestation Projects
Remittance to National Treasury from Assets
Disposal

(31,598,932.88)
(952,188.85)

(41,506,369.73)
(748,900.58)

9,907,436.85
(203,288.28)

(23.87)
27.14

(2,590.70)

(3,864.92)

Government Equity, Ending Balance (Note 4.13)

1,274.22

(2,082,575,314.08) (1,879,577,081.37) (202,998,232.70)

Difference between totals and sum of components is due to rounding off.

46

(32.97)
10.80

The National Government of the Republic of the Philippines


Statement of Cash Flows
For the Year Ended December 31, 2011
Amount (in thousand pesos)
2011
Cash Flows from Operating Activities
Cash Inflows
Collection of Income/Revenues
Receipt of Notice of Cash Allocation
Receipt of inter-agency fund transfers
Receipt of intra-agency fund transfers
Collection of Receivables
Receipt of subsidy from Other NGAs, LGUs, GOCCs
Other Receipts
Adjustments
Total Cash Inflows
Cash Outflows
Replenishment of negotiated MDS checks
Payment of operating expenses
Grant of subsidies and donations
Remittance of Personnel Benefit Contributions and
Mandatory Deductions
Release of inter-agency fund transfers
Release of intra-agency fund transfers
Payment of Accounts Payable
Grant of Cash Advances for travel and for special
purpose or time bound undertaking
Purchase of Inventories
Other Disbursements
Remittance to National Treasury
Adjustments
Total Cash Outflows
Cash Provided By (Used In) Operating Activities
Cash Flows from Investing Activities
Cash Inflows
Proceeds from matured investments
Sale of investments
Collection of long-term loans
Sale of property, plant and equipment
Total Cash Inflows
Cash Outflows
Investments
Purchase/Construction of Property, Plant and
Equipment, Public Infrastructures and Other Assets
Grant of loans
Total Cash Outflows
Cash Provided By (Used In) Investing Activities
Cash Flows from Financing Activities
Cash Inflows
Proceeds from Domestic and Foreign Loans
Cash Outflows
Payment of Long-Term Liabilities
Payment of Interest Expense
Transfer to Local Loans Account
Total Cash Outflows
Cash Provided By (Used In) Financing Activities
Total Cash Provided by Operating, Investing and

2010

Increase
(Decrease)

Percent

1,338,462,288.94
1,150,006,445.40
155,830,789.94
32,355,819.38
12,377,792.86
2,194,063.72
36,125,355.34
102,958,528.11
2,830,311,083.70

1,130,306,160.54
1,111,167,881.79
117,861,212.77
34,623,891.30
10,044,868.41
1,694,368.46
25,106,711.87
102,395,410.52
2,533,200,505.66

208,156,128.40
38,838,563.61
37,969,577.17
(2,268,071.91)
2,332,924.45
499,695.26
11,018,643.47
563,117.59
297,110,578.03

18.42
3.50
32.22
(6.55)
23.23
29.49
43.89
0.55
11.73

1,089,043,014.23
658,076,578.69
379,264,294.42

1,069,063,857.95
505,313,283.58
306,872,959.77

19,979,156.28
152,763,295.11
72,391,334.65

1.87
30.23
23.59

133,263,196.08
94,606,466.16
69,767,888.65
69,046,323.79

119,388,983.58
70,119,491.07
98,195,858.84
63,533,626.13

13,874,212.50
24,486,975.09
(28,427,970.19)
5,512,697.66

11.62
34.92
(28.95)
8.68

20,236,837.32
14,733,562.31
27,847,837.98
324,110.50
102,703,129.60
2,658,913,239.73
171,397,843.96

25,332,460.72
16,107,936.31
25,666,997.38
1,103,048.59
47,541,157.89
2,348,239,661.80
184,960,843.86

(5,095,623.39)
(1,374,374.00)
2,180,840.60
(778,938.09)
55,161,971.71
310,673,577.94
(13,562,999.90)

(20.11)
(8.53)
8.50
(70.62)
116.03
13.23
(7.33)

319,828,070.22
30,509,090.79
2,644,226.37
91,560.16
353,072,947.54

333,017,072.85
49,756,350.90
2,955,312.14
546,244.32
386,274,980.21

(13,189,002.64)
(19,247,260.11)
(311,085.77)
(454,684.16)
(33,202,032.67)

(3.96)
(38.68)
(10.53)
(83.24)
(8.60)

408,014,366.70

431,654,930.23

(5.48)

83,333,796.15
527,883.22
491,876,046.07
(138,803,098.54)

132,211,215.13
468,344.98
564,334,490.33
(178,059,510.12)

(23,640,563.53)
(48,877,418.97)
59,538.25
(72,458,444.26)
39,256,411.58

(36.97)
12.71
(12.84)
(22.05)

1,365,394,131.22

1,604,444,390.42

(239,050,259.20)

(14.90)

1,221,329,483.19
240,292,424.49
65,934.32
1,461,687,842.00
(96,293,710.78)

1,332,051,048.30
236,607,356.00
123,845.40
1,568,782,249.69
35,662,140.73

(110,721,565.11)
3,685,068.48
(57,911.07)
(107,094,407.70)
(131,955,851.51)

(8.31)
1.56
(46.76)
(6.83)
(370.02)

(63,698,965.35)
381,252,483.63

42,563,474.47
338,706,144.54

(106,262,439.82)
42,546,339.09

317,553,518.28

381,269,619.02

(63,716,100.74)

(249.66)
12.56
(16.71)

Financing Activities
Add: Cash Balance, Beginning January 1
Cash Balance, Ending December 31 (Note 4.6.2)
Difference between totals and sum of components is due to rounding off

47

NOTES TO FINANCIAL STATEMENTS


4.5 Summary of Significant Accounting Policies/Procedures
4.5.1 Funds and Books Maintained
The New Government Accounting System (NGAS) which took effect on
January 2002, authorized the national government agencies (NGAs) to maintain
two (2) sets of books of accounts, namely:

Regular Agency (RA) Books used to record the receipt and utilization of
Notice of Cash Allocation and other income/receipts which the agencies are
authorized to use and to deposit with the National Treasury and/or with the
Authorized Government Depository Banks (AGDB).

National Government (NG) Books used to record the income which the
agencies are not authorized to use and are required to be remitted to the
National Treasury.

The accounting system of the NG adopts the one fund concept in recording
the financial transactions and in the preparation of the financial statements.
However, separate fund accounting is done when specifically required by law, or
by a donor agency, or when necessitated by circumstances subject to prior
approval of the Commission on Audit.
4.5.2 Use of NGAS Chart of Accounts
The accounts used are in conformity with the NGAS Chart of Accounts
prescribed under COA Circular No. 2004-008 dated September 20, 2004, the
Updated Description of Accounts, and COA Accounting Circular No. 2006-001
dated November 6, 2006.
4.5.3 Control of Appropriations and Allotments and Monitoring of Obligations
Following the NGAS policy, separate registries are maintained by the COA
to record the appropriations and allotments, by agency/source/allotment class; and
by the NGAs to record the allotments and obligations by allotments class and by
program/project/activity.
4.5.4 Notice of Cash Allocation (NCA)
The receipt of NCA by the agency is recorded in the books as debit to
account Cash-National Treasury, Modified Disbursement System (NT, MDS)
and credit to account Subsidy Income from National Government (SING).
The unused/lapsed/expired cash balance under the Cash-NT, MDS is
reverted by debiting the account SING and crediting Cash-NT, MDS.
At the end of the year, an adjustment is prepared for the restoration of cash
equivalent to the unreleased checks and recognition of the appropriate

48

payable/liability accounts. On the first working day of January, a reversal journal


entry is made by the agencies by debiting the appropriate liability account and
crediting the Cash-National Treasury, MDS.

4.5.5 Maintenance of Petty Cash Fund and Payroll Fund


Petty Cash Fund is maintained under the Imprest System. All replenishments
are directly charged to the expense account.
Payroll Fund pertains to cash advances for salaries and wages and other
personnel benefits in accordance with COA Accounting Circular No. 2006-001
dated November 9, 2006.

4.5.6 Foreign-Assisted Projects


Government agencies implementing Foreign-Assisted Projects used the
following methods:

Working Fund/Imprest Account Availment, whereby the lending/donor


institution provides the implementing agency with seed money from the
loan/grant for the payment of eligible expenditures, subject to replenishment;
Direct Payment Scheme, where suppliers/contractors/consultants are paid
directly by the lending institution and borrowings are recorded based on the
withdrawal authorization/advice of payment or any proof of disbursements;
100% Cash Loan Financing Scheme, which requires 100% appropriation and
allotment cover and the loan proceeds will provide the cash requirement;
Grants in Cash and In Kind; and
Commodity Loan and Grant; among others.

4.5.7 Inventory Valuation


The perpetual inventory system is used to account for inventories where
regular purchases are recorded as inventory account and issuances from stock as
expenses. However, purchases out of Petty Cash Fund for immediate use are
charged outright to appropriate expense accounts.
The cost of ending inventory of office supplies and materials and other
inventory items is computed using the Moving Average Method.
Small tangible items with estimated useful life of more than one year are
recorded under the appropriate supplies inventory account upon acquisition and as
expense upon issuance as prescribed under COA Circular No. 2005-002 dated
April 14, 2005. Other tangible assets not included in the list of Annex A of the
said Circular are classified as Property, Plant and Equipment, subject to
depreciation.

49

4.5.8 Property, Plant and Equipment


Property, Plant and Equipment used in government operations are carried at
cost less accumulated depreciation.
For assets under construction, the
Construction Period Theory is adopted where billings for on-going projects are
recorded under the Construction in Progress account.
The Straight-Line Method of depreciation is used in depreciating the
Property, Plant and Equipment with estimated useful lives ranging from 5 to 40
years as set in COA Circular No. 2003-007 dated December 11, 2003. A residual
value computed at ten percent of the cost of the asset is set and depreciation starts
on the following month after the purchase.
4.5.9 Public Infrastructures and Reforestation Projects
Public Infrastructures such as roads, highways, bridges, public parks and
plazas, canals, irrigations, as well as those for environmental purposes like
reforestation projects, etc. are assets of the government for use by the general
public and not owned by the implementing agencies. During construction, these
are recorded as Construction in Progress, and upon completion, these are
reclassified to Public Infrastructures and Reforestation Projects. At the end of the
year, the completed Public Infrastructures and Reforestation Projects are
transferred to the Registry of Public Infrastructures and Registry of Reforestation
Projects maintained by the agency, respectively. The corresponding amounts are
shown as deductions in the Statement of Government Equity.
4.5.10 Recognition of Liabilities
Liabilities are recognized at the time goods
accepted/rendered and suppliers/creditors bills are received.

and

services

are

Commitments or obligations incurred by agencies which are not yet due and
demandable (services not rendered and/or goods not yet delivered) are recorded in
the registries, hence, not recognized as liability.
4.5.11 Revenue and Expense Recognition
The Modified accrual basis of accounting is used. Income is recorded upon
delivery of goods and services except for tax revenues, duties, fees, fines and
penalties, including user charges, which are recognized upon collection. Expenses
are recognized when incurred and reported in the financial statements in the
period to which they relate.
Collections of income due for remittance to the National Treasury are
recorded in the NG books of the NGAs as liability, Due to National Treasury
with subsidiary ledger of the specific income account. Upon receipt of the
remittance, these are recorded as income in the NG books of the Bureau of the
Treasury. The collections of income authorized to be used by the agencies are
recorded in the RA books and are likewise remitted to the National Treasury.
Upon receipt of the remittances by the National Treasury, these are recorded in the
BTr-NG books as liability, Due to Other NGAs.

50

4.5.12 Accounting for Discounts, Premiums and Interests on Borrowings


Premiums on NG Bond Sinking Fund and managed funds Investment in
Bonds are recorded as deferred charges while discounts are treated as other
deferred credits. These are being amortized over the life of the securities as
adjustment to interest income or Due to Other GOCCs in the case of managed
funds.
Interest expenses are recorded upon payment of domestic and foreign
liabilities. Bond discounts, premiums, and accrued interests on issuance of regular
domestic bonds are directly charged or adjusted to interest expense on transaction
dates. The recording of interests for domestic bond issuances is on cash basis as it
is impractical to accrue considering the difficulty in monitoring and manual
processing of voluminous transactions. However, bond discounts, premiums and
accrued interests on the issuance of domestic Zero-Coupon Treasury Bonds, Bond
exchanges and global or foreign bonds are accrued and taken up as Deferred
Charges, Other Deferred Credits and Interest Payable, respectively. Bond
discounts and premiums taken up as Deferred Charges and Other Deferred
Credits, respectively, are amortized over the life of the bonds.

4.5.13 Foreign Currency Translation


Transactions in foreign currencies are recorded in Philippine Peso based on
Bangko Sentral ng Pilipinas (BSP) exchange rate prevailing at the date of the
transactions. At the end of the year, foreign currency denominated monetary
assets and liabilities at balance sheet date are restated based on BSP Weighted
Average Rate published on the 1st working day of the following month in the BSP
Reference Rate Bulletin. Any difference in the revaluation of assets and liabilities
are recognized as a gain or loss on foreign exchange.

4.5.14 Prior Years Adjustments Account


Fundamental errors on income and expenses of previous years were
corrected using the Prior Years Adjustments account. Errors affecting current
years operation were adjusted to the appropriate accounts.

4.6 Cash
4.6.1 The total cash balance aggregating P262,514,417,661.08 consisted of the
following:
Accounts
Cash on Hand
Cash-National
Treasury, MDS

Total
P4,622,034,158.74

NG Book
P807,607,561.45

RA Book
P3,814,426,597.29

4,078,188,981.96

49,912,940.34

4,028,276,041.62

51

Accounts
Cash in Bank
Local Currency
Cash in Bank
Foreign Currency
Total

Total

NG Book

RA Book

202,398,575,735.63*

100,531,959,699.99

101,866,616,035.64

51,415,618,784.75*

42,597,847,475.51

8,817,771,309.24

P262,514,417,661.08 P143,987,327,677.29

P118,527,089,983.79

* Includes Cash-Bangko Sentral ng Pilipinas in local and foreign currency amounting to


P26,988,151,875.36 and P24,721,257,872.35, respectively.

Cash on Hand consisted of Cash in Vault - P2,224,289.12;


undeposited/unremitted collections - P2,351,552,240.27; unliquidated cash
advances by Cash Disbursing Officers - P733,459,778.33; Payroll Fund P1,428,671,099.12 and balance of Petty Cash Fund - P106,126,751.90.

The Cash-National Treasury, Modified Disbursement System (MDS) pertains to


unclaimed/unreleased MDS checks of agencies at the end of the year which was
adjusted to the cash account in compliance with COA Circular Letter No. 2002001 dated December 16, 2002. Under the NG books, the amount of
P49,912,940.34 represents the unreleased checks of the DOF-BTr-GOP
pertaining to NG subsidy to various GOCCs P42,230,400.00 and the amount
of P7,682,540.3 which was requested for write-off since it was dormant since
1990.

The Cash in Bank, Local and Foreign Currency in the NG books totaled
P143,129,807,175.50. The amount of P135,910,782,595.27 or 95 percent
pertains to BTr-GOP accounts which included free balances that are available
for NG operations P87,800,463,496.98; project loan/grant proceeds earmarked
to be utilized by various implementing agencies P3,603,311,585.68; restricted
accounts for special/sinking fund, BTr managed funds and escrow accounts
P44,068,976,193.44; and MDS Seed Money P438,031,319.17.

The Cash in Bank, Local and Foreign Currency in the RA books totaled
P110,684,387,344.88. This included P15,772,502,572.25 pertaining to
collections of income from tuition fees and other school charges authorized to
be treated as Special Trust Fund and to be deposited in AGDB by the SUCs
under RA No. 8292 and the Higher Education Modernization Act of 1997. Also
included are the cash balances of agencies under the Comprehensive Agrarian
Reform Program (CARP) Fund P10,341,120,785.50.

4.6.2 The difference in cash ending balance per Balance Sheet (BS) and Statement of
Cash Flows (SCF) amounting to P55,039,100,618.26 represents Sinking Fund
cash accounts lodged under Investments in BTr-GOP amounting to
P55,139,592,837.98; cash accounts totaling P3,830.75 not included in the BS of
DOTC; and cash accounts of SUCs of P100,099,258.22 and DOLE of
P396,792.25 not included in their SCF ending balances.

52

4.7 Receivables
The total Receivables in the amount of P760,049,247,002.47 is net of Allowance
for Doubtful Accounts amounting to P585,564,103.26 and the eliminated amounts for
Inter-Agency Receivables of P53,234,301,495.07 and Intra-Agency Receivables of
P27,273,333,399.85.
In the overall consolidation of the balance sheet accounts, inter-agency
receivables were eliminated with inter-agency payables. This is to reflect the amount of
cash expected to be realized from the receivables and the actual payables subsisting
between NGAs. Likewise, intra-agency receivables were eliminated with intra-agency
payables to reflect the balances of reciprocal accounts subsisting between central
offices, regional offices/staff bureaus and operating units. The elimination was based
on the consolidated total balances of RA and NG books as follows:
Account Title
Assets
Inter-Agency Receivables
Due from National Treasury
Due from NGA
Intra-Agency Receivables
Due from Central Office
Due from Regional Office/Staff Bureaus
Due from Operating Units
Due from Other Funds
Total Assets
Liabilities
Inter-Agency Payables
Due to Other NGAs
Intra-Agency Payables
Due to Central Office
Due to Regional Office/Staff Bureaus
Due to Operating Units
Due to Other Funds
Total Liabilities

Amount
P53,234,301,495.07
25,330,373,425.33
27,903,928,069.74
27,273,333,399.85
1,203,524,784.80
2,102,923,670.24
2,645,885,499.76
21,320,999,445.05
P80,507,634,894.92
P53,234,301,495.07
53,234,301,495.07
27,273,333,399.85
1,195,223,364.98
1,203,524,784.80
3,553,585,805.02
21,320,999,445.05
P80,507,634,894.92

4.8 Prepayments
The total Prepayments amounted to P130,055,757,041.81. Of the amount,
P104,906,575,185.05 or 80.66 percent was reported by BTr-GOP as Deferred Charges
pertaining to discounts on Bond Exchange, issued Zero-Coupon Bonds and global
bonds issued abroad, and premium on investments in bonds held by Bond Sinking Fund
(BSF), Special Guaranty Fund (SGF), Security Stabilization Fund (SSF) and
Metropolitan Waterworks and Sewerage System (MWSS) which are being amortized
over the life of the bonds.

53

4.9 Investments
The total Investments included the following:
Particulars
Sinking Fund
Investments in Stocks
Other Investments and
Marketable Securities
Investments in Treasury Bills
Investments in Bonds
Total

Amount
P776,808,701,509.75
126,390,176,595.23

Percent
76.44
12.44

90,910,268,048.43
14,196,227,883.14
7,938,216,587.87

8.95
1.40
0.78

P1,016,243,590,624.42

100.00

Sinking Fund pertains to amounts set aside for the liquidation of long-term debt.
BTr-GOP balance of P776,800,744,940.42 included Sinking Fund accounts of NG
issued and NG Guaranteed bonds issued by GOCCs such as: LBP, MWSS, HGC, NFA,
NPC, PPA and HDMF.

4.10 Property, Plant and Equipment


The Property, Plant and Equipment (PPE) aggregating P987,058,346,306.88 was
net of Accumulated Depreciation totaling P135,331,032,873.33 and the completed
Public Infrastructures (PIs) and Reforestation Projects (RPs) amounting to
P31,598,932,875.51 and P952,188,853.34, respectively. These completed PIs and RPs
were reported in the respective trial balances of the concerned departments/agencies.
However, following the NGAS policy that completed PIs/RP shall be transferred to the
respective Registry of Public Infrastructures and Registry of Reforestation Projects,
these were automatically closed and the amount deducted from the total Government
Equity for purposes of the consolidated financial statement presentation.
The PPE were classified as follows:
Particulars
Land and Land
Improvements
Buildings
Leasehold Improvements
Office Equipment, Furniture
and Fixtures
Machineries and Equipment
Transportation Equipment
Other Property, Plant and
Equipment
Construction in Progress
Total

201,185,885,098.00

Accumulated
Depreciation
(2,408,526,711.27)

198,777,358,386.73

184,312,444,782.15
477,108,465.63
63,226,426,220.50

(43,214,239,440.05)
(126,425,696.55)
(30,347,119,656.09)

141,098,205,342.10
350,682,769.08
32,879,306,564.41

83,964,994,866.27
46,326,448,205.28
9,267,344,995.37

(35,582,479,046.26)
(21,466,858,132.04)
(2,185,384,191.07)

48,382,515,820.01
24,859,590,073.24
7,081,960,804.30

533,628,726,547.01

________-_______

533,628,726,547.01

1,122,389,379,180.21

(135,331,032,873.33)

987,058,346,306.88

Gross Amount

54

Net Book Value

4.11 Other Assets


The total Other Assets amounting to P109,501,927,004.12 included the
P72,751,103,418.65 or 66.44 percent reported by BTr-GOP under the Other Assets
account consisting of the following:
Particulars
Amount
Part of the transferred assets under Proclamation No. 50 P68,119,164,654.65
wherein disposition and sale are being handled by
Privatization and Management Office (PMO) and
PNPP/NPC, which were reclassified from Other
Property, Plant and Equipment account
Part of the transferred assets from DBP, PNB and
PHILGUARANTEE in the form of financial assets
4,629,763,954.00
Appraised value of diamonds in the Treasury Vault
deposited by various government agencies which are
escheated in favor of the ROP per Court Order dated May
2,174,810.00
5, 1997
Total
P72,751,103,418.65

The DOF-PMO also reported P15,826,104,010.95 or 14.45 percent under the


Other Assets account. This included reclassification of accounts transferred from the
former Asset Privatization Trust (APT) and Board of Liquidators (BOL) which were
recorded based on book balances only. Said accounts were not supported and have
remained dormant since its recording in PMO books.
4.12 Liabilities
4.12.1 Current Liabilities
Of the total current liabilities of P710,193,731,923.93, 41.87 percent or
P297,380,521,319.79 pertains to the outstanding government Treasury Bills
reported by the BTr-GOP under account Loans Payable-Domestic.
4.12.2 Long-Term Liabilities
Long-Term Liabilities totaled P4,644,761,074,531.26, majority of which
was reported by the BTr-GOP and pertains to Bonds Payable-Domestic amounting
to P2,563,061,590,492.32 or 55.18 percent; Bonds Payable-Foreign of
P1,214,221,197,603.00 or 26.14 percent and Loans Payable-Foreign of
P865,744,638,057.90 or 18.64 percent. The Bonds Payable-Foreign pertains to
offshore bond flotation of the ROP consisting of:
Particulars
Euro Bonds
US Bonds
Japanese Yen Bonds
PHPeso Bonds
Total

Currency
EUR
US$
JPY
PHP

55

Original
Amount
500,000,000
23,448,587,000
100,000,000,000
98,879,000,000

Peso Equivalent
P28,422,180,850
1,029,838,492,453
57,081,524,300
98,879,000,000
P1,214,221,197,603

4.12.3 Deferred Credits


Deferred Credits of P27,060,301,545.54 included P6,808,712,040.86 or
25.16 percent reported by the BTr-GOP consisting of the following:
Particulars
Premium on issuance of bonds offshore
Discount on Investments in Treasury Bonds and ROP
Bonds held by BSF, SGF, SSF, MWSS-SRF and NG
which are being amortized over the life of the bonds
Converted balance under Fund 105 which had remained
dormant for over 30 years and was already requested for
write-off
Balance of advance dividend remittance
Balance of advance guarantee fee/FXRCF
Contra-account in setting up the receivable from DBP and
PMO
Proceeds from ROPs issuance of Debt Exchange
Warrants which entitles the holders during exercise period
to tender dollar/euro bonds and receive in exchange a peso
denominated treasury bonds
Total

Amount
P4,961,953,021.37

529,017,364.33

565,952.85
( 206,312,444.17)
7,290,608.15
44,612,225.83

1,471,585,312.50
P6,808,712,040.86

4.12.4 Contingent Liabilities


Contingent liabilities aggregating P573,372,065,402.62 represents the
NGs direct guarantee on GOCC loans and GFI guarantees assumed by the NG.
These were not included in the reported NG liabilities but disclosed by the BTrDebt Monitoring and Analysis Division. These liabilities were broken down as
follows:

Particulars
Foreign:
US Dollar
Currency
Equivalent
Peso Currency
Domestic
Total

NG direct
Guarantee
on GOCC Loans

$9,374,774,093.27
P412,021,321,399.26
157,450,400,000.00
P569,471,721,399.26

GFI Guarantee
Assumed by NG
per Proclamation
No. 50

$85,649,024.54

Total

$9,460,423,117.81

P3,764,274,628.58 P415,785,596,027.84
136,069,374.78
157,586,469,374.78
P3,900,344,003.36 P573,372,065,402.62

Contingent liabilities of the NG under the build-operate-transfer and/or


build-lease-transfer projects and the guarantees extended by GFIs were excluded
in the above data.

56

4.13 Government Equity


The total equity amounting to a negative P2,082,575,314,075.76 is the
difference between the total assets and the total liabilities accounted as follows:
NG books negative P3,199,847,231,096.80 and RA books P1,117,271,917,021.04.
The total equity increased by a negative amount of P202,998,232,703.69
computed as follows:
Results of Current Operations:
NG books
(188,766,434,474.73)
RA books
175,141,479,870.45
Prior Years Adjustments
Completed Public Infrastructures and
Reforestation Projects transferred to Registries
Remittance to National Treasury from
Assets disposal
Total
Difference in equity beginning balance as of January
2011 with ending balance as of December 31, 2010
Total negative increase in Government Equity

(P13,624,954,604.28)
(76,764,426,976.31)
(32,551,121,728.85)
(2,590,695.98)
(122,943,094,005.42)
(80,055,138,698.27)
(P202,998,232,703.69)

Prior years adjustments made by the agencies in CY 2011 totaled to negative


P76,764,426,976.31, majority of which or 86.92 percent was reported by DOF
(P30,118,235,254.38), DOE (P13,668,985,413.36), DND (P11,319,270,775.91),
DA (P6,230,153,861.24) and DSWD (P5,383,640,909.85).
The PYA of DOF included the DOF-GOP adjustments in the beginning balances
of Loans and Bonds Payable in the amount of P25,797,205,722.24.
4.14 Income/Revenue
The total income for CY 2011 comprised of Tax Revenue and General Income
consisting of Permits and Licenses, Service Income, Business Income and Other
Income. Bulk of the income was sourced from Tax Revenue amounting to
P1,221,943,746,142.73 or 87.34 percent. It included Motor Vehicles Users Charge of
P9,270,131,188.52.

4.15 Subsidy to LGUs, GOCCs, NGOs/POs


4.15.1 Net Subsidy to LGUs of P317,896,685,835.89 is the difference between Subsidy
from Other LGUs of P2,105,291,636.54 and Subsidy to Local Government
Units of P320,001,977,472.43.
4.15.2 Subsidy to GOCCs of P72,842,240,621.02 did not include P5,000,000.00
received as subsidy by the Cultural Center of the Philippines from the National
Government.

57

4.16 Subsidy From/(To) National Government Agencies


4.16.1 Net Subsidy From/(To) National Government Agencies of P2,794,300,808.85
consisted of the following:
Total Subsidy from National Government Agencies
Total Subsidy to National Government Agencies
Net Subsidy From/(To) National Government
Agencies

P1,184,613,454,825.50
(1,181,819,154,016.65)
P2,794,300,808.85

4.16.2 Total Subsidy From National Government Agencies of P1,184,613,454,825.50


did not include Subsidy Income from National Government amounting to
P5,000,000.00 for receipt of NCA by the Cultural Center of the Philippines.

58

V. FINANCIAL ANALYSES

FINANCIAL ANALYSES
5.1 Balance Sheet
The total assets of the National Government as of December 31, 2011 rose to P3.299
trillion. Compared to the 2010 level of P3.139 trillion, a growth of P160.58 billion or 5.12
percent was noted.
For the same period, the total liabilities of the NG also grew to P5.382 trillion from
P5.018 trillion in 2010, exhibiting an increase of P363.58 billion or 7.24 percent. The total
liabilities of the government exceeded the total assets by P2.083 trillion, posting a negative
increase in the equity by P203 billion or 10.80 percent from a negative equity of P1.880
trillion in 2010. Table V.1-1 shows the comparative assets, liabilities and equity for CY
2011 and 2010.
Table V.1-1 Assets, Liabilities and Equity
Amount (in million pesos)
Particulars
Assets
Current Assets
Investments
Property, Plant and
Equipment
Other Assets
Liabilities
Current Liabilities
Long-Term Liabilities
Deferred Credits
Equity

3,299,439.79
1,186,635.93
1,016,243.59

3,138,861.82
1,203,322.84
842,102.10

Increase
(Decrease)
160,577.98
(16,686.91)
174,141.49

987,058.35
109,501.93
5,382,015.11
710,193.73
4,644,761.07
27,060.30
(2,082,575.31)

985,800.17
107,636.70
5,018,438.90
813,020.74
4,178,785.58
26,632.58
(1,879,577.08)

1,258.18
1,865.23
363,576.21
(102,827.01)
465,975.49
427.73
(202,998.23)

2011

2010

Percent

0.13
1.73
7.24
(12.65)
11.15
1.61
10.80

5.12
(1.39)
20.68

Difference between totals and sum of components is due to rounding off

5.1.1

Assets P3.299 trillion


For the last five years, from 2007
to 2011, aggregate assets of the National
Government continuously grow at an
average of 5.50 percent as shown in Table
V.1-2. The highest growth was realized in
2008 at 9.02 percent, followed by 9.01
percent in 2010. For this year, the increase
dropped to 5.12 percent.

Table V.1-2 Annual Growth in Assets


CYs 2007-2011
Amount (in million pesos)
PerYear
Assets
Growth
cent
2011
3,299,439.79 160,577.98
5.12
2010

3,138,861.82

259,338.56

9.01

2009

2,879,523.26

9,249.78

0.32

2008

2,870,273.48

237,572.33

9.02

2,632,701.15 102,020.55
4.03
Total assets of P3.299 trillion 2007
2006
2,530,680.60
consists of Current Assets P1.187
trillion, Investments P1.016 trillion,
Average Growth
153,751.84
5.50
Property, Plant and Equipment P987.06
billion and Other Assets P109.50 billion. Of the components of assets, Investments
showed the highest growth at 20.68 percent, while Current Assets decreased by 1.39
percent. The other components, Other Assets and Property Plant and Equipment showed a
slight increase of 1.73 percent and 0.13 percent, respectively. Chart V.1-1 presents the
percentage distribution of the major categories of assets for fiscal year 2011.

59

Chart V.1-1 Percentage Distribution of the


Major Categories of Assets
5.1.1.1 Current Assets P1.187
trillion

Other
Assets
3.32%

Current Assets of P1.187


trillion constituted 35.96 percent of
the total assets. It showed a
decrease of P16.69 billion or 1.39
percent from the 2010 level of
P1.203 trillion. The reduction was
due to the decreases in Cash and
Other Current Assets in the
amount of P61.66 billion and
P3.78 billion, respectively, and
partially offset by a total increase
of P48.76 billion in Prepayments,
Receivables, and Inventories.

Current
Assets
35.96%

Property,
Plant and
Equipm ent
29.92%

Investments
30.80%

The composition of the current assets are as follows: Cash P262.51 billion,
Receivables P760.05 billion, Inventories P26.37 billion, Prepayments P130.06
billion and Other Current Assets P7.65 billion.

Cash P 262.51 billion


At year-end, the cash of the NG decreased to P262.51 billion from P324.18 billion
in 2010, exhibiting a reduction of P61.66 billion or 19.02 percent. This was mainly due to
the decreases in the Cash in Bank by P60.11 billion and in the Cash - National Treasury
MDS by P2.21 billion, partially offset by an increase of P655.08 million in Cash on Hand.
Chart V.1-2 shows the trend of cash for CYs 2006 2011 while Table V.1-3 shows the
comparative composition of cash.
Chart V.1-2 Trend of Cash
(in billion pesos)
350
300
250
200
150
100
50
0

2006

2007

2008

2009

2010

2011

Cash on Hand

10.27

6.14

4.98

5.51

3.97

4.62

Cash, NT-MDS

7.41

4.71

5.72

4.51

6.29

4.08

Cash in Bank

174.55

205.10 295.25

60

324.38 313.92

253.81

Among the major components of cash, Cash in Bank combined balance of P253.81
billion accounted for 96.69 percent of the total. Cash on Hand and Cash-National Treasury,
MDS shared P4.62 billion or 1.76 percent and P4.08 billion or 1.55 percent, respectively.
From the years 2007 to 2009, Cash in Bank increased by an average of 23.77 percent, but in
the last two years, 2010 to 2011, it significantly dropped to an average of 11.19 percent.
Table V.1-3 Comparative Composition of Cash
Amount (in million pesos)
Particulars
Cash on Hand
Cash in Vault
Cash Collecting Officers
Cash Disbursing Officers
Petty Cash Fund
Payroll Fund
Cash- National Treasury MDS
Cash in Bank
Bangko Sentral ng Pilipinas
Cash in Bank Local Currency
Current Account
Savings Account
Time Deposit
Cash in Bank Foreign Currency
Current Account
Savings Account
Time Deposit
Total

2011

2010

Increase/
(Decrease)

4,622.03
2.22
2,351.55
733.46
106.13
1,428.67
4,078.19
253,814.19
51,709.41
175,410.42
83,469.56
58,666.38
33,274.48
26,694.36
3,658.21
6,955.36
16,080.78
262,514.42

3,966.95
2.19
1,763.86
597.22
81.24
1,522.44
6,287.71
313,922.05
134,474.00
150,775.41
71,378.03
47,344.07
32,053.31
28,672.64
2,447.04
9,711.76
16,513.84
324,176.71

655.08
0.03
587.70
136.24
24.88
(93.77)
(2,209.52)
(60,107.86)
(82,764.59)
24,635.01
12,091.53
11,322.31
1,221.17
(1,978.27)
1,211.17
(2,756.40)
(433.06)
(61,662.29)

Percent
16.51
1.49
33.32
22.81
30.63
(6.16)
(35.14)
(19.15)
(61.55)
16.34
16.94
23.91
3.81
(6.90)
49.50
(28.38)
(2.62)
(19.02)

Difference between totals and sum of components is due to rounding off

Cash in Vault balance was P2.22 million, of which P2.16 million was accounted by the
BTr-GOP and the amount of P66.21 thousand was reported by the Bureau of Fisheries
and Aquatic Resources, under the DA.

Cash Collecting Officers account balance of P2.35 billion pertains to the collections
of national government agencies which were not yet remitted/deposited with the
National Treasury/Authorized Government Depository Bank (AGDB) as of year-end.
The departments/offices with the highest balances to this account were:
Departments/Offices

Judiciary
Finance
Budget and Management
Justice
Energy
State Universities and Colleges
Transportation and Communications
Foreign Affairs
Health
Other Executive Offices
Other Departments/Offices
Total

61

Amount
(in million pesos)
992.71
461.29
259.80
126.50
87.57
73.25
67.26
60.53
47.16
34.89
140.60
2,351.55

Percent

42.22
19.62
11.05
5.38
3.72
3.11
2.86
2.57
2.01
1.48
5.98
100.00

The Supreme Court and Lower Courts of the Judiciary reported P992.65
million unremitted collections, of which the amount of P935.39 million
pertains to collections of Fiduciary Fund and Sheriffs Trust Fund from the
Lower Courts. The balance of the Supreme Court Proper amounting to
P56.81 million was deposited in January 2012.
The Bureau of Customs (BOC) and the Bureau of Internal Revenue (BIR),
both under the DOF, reported balances of P274.56 million and P166.32
million, respectively.
The DBM balance of P259.80 million pertains to the undeposited collections
of the Procurement Service.

Cash Disbursing Officers balance of P733.46 million represents unliquidated cash


advances of authorized disbursing officers at year-end. Compared to 2010 balance of
P597.22 million, it showed an increase of P136.24 million or 22.81 percent. The
departments/offices that reported more than P10 million unliquidated cash advances are
as follows:
Departments/Offices
Social Welfare and Development
Finance
Foreign Affairs
State Universities and Colleges
Public Works and Highways
Science and Technology
Health
Transportation and Communications
Agrarian Reform
Labor and Employment
Other Executive Offices
Other Departments/Offices
Total

Amount
(in million pesos)
264.71
132.93
106.47
49.33
42.16
33.10
22.45
20.77
13.37
13.24
12.58
22.34
733.46

Percent
36.09
18.12
14.52
6.72
5.75
4.51
3.06
2.83
1.82
1.80
1.72
3.05
100.00

The DSWD-OSEC reported the highest unliquidated cash advances of


P264.71 million, including P3.37 million dormant accounts. The bulk of
which, amounting to P133.04 million pertains to cash advances for the
implementation of the DSWD programs and projects such as the Cash for
Work/Rice Subsidy for Small Scale Farmers and Fisherfolks and Social
Pension for Indigent Senior Citizens in NCR, CARAGA and Regions II, VII
and X.
Of the P132.93 million balance of the DOF, the BOC reported P131.95
million or 99.24 percent representing cash advances for Port Operations
consisting of Maintenance and Other Operating Expenses and Capital
Outlays.
The reported DFA balance of P106.47 million consists of prior years
working funds of the Regional Consular Offices and Foreign Service Post P98.96 million and unliquidated cash advances of the Passport Revolving
Fund of P7.51 million.

62

Petty Cash Fund granted to duly designated custodian to cover petty expenses
increased to P106.13 million, an increment of P24.88 million or 30.63 percent
compared to previous years level of P81.24 million was noted. The COMELEC and
the DOH OSEC are the two agencies that reported the highest balances at P15.64
million and P15.33 million, respectively.

Payroll Fund balance of P1.43 billion was reduced by P93.77 million or 6.16 percent
compared to the P1.52 billion balance of last year. This fund represents cash advances
for payment of salaries, allowances and other emoluments which remained unliquidated
at year-end. The DepED-OSEC had the highest unliquidated balance of P499.16 million
or 34.94 percent of the total Payroll Fund followed by the DOF-BOC with P289.48
million or 20.26 percent, and by the DILG - Philippine National Police with P100.75
million or 7.05 percent.
The list of department/agencies with Cash on Hand presented by account is in
Schedule 8, Volume I-B.

Cash - National Treasury, MDS account refers to the Notice of Cash Allocation
(NCA) received from the DBM and it is credited for the amount of MDS checks issued
by agencies. The balance of P4.08 billion represents the unreleased/unclaimed MDS
checks at the end of the year for payment of obligations/liabilities which was restored
back to cash account by agencies in compliance with COA Circular Letter No. 2002001 dated December 16, 2002. The departments/offices which reported more than P100
million worth of unreleased MDS checks as of year-end are the following:
Amount

Departments/Offices

(in million pesos)

Social Welfare and Development


Agriculture
Science and Technology
National Defense
Interior and Local Government
Education
Congress of the Philippines
Other Executive Offices
Finance
Other Departments/Offices
Total

1,179.55
725.43
489.25
463.52
242.91
229.43
196.99
119.69
112.81
318.61
4,078.19

Percent
28.92
17.79
12.00
11.37
5.96
5.63
4.83
2.93
2.77
7.81
100.00

Among the agencies, the DSWD-OSEC reported the highest balance of


unclaimed/unreleased MDS checks totaling P1.18 billion, followed by the DA-OSEC
with P617.75 million.
The list of department/agencies with unclaimed/unreleased MDS checks at the
end of year is shown in Schedule 9, Volume I-B.

Cash, Bangko Sentral ng Pilipinas balance of P51.71 billion consisted of deposits in


local currency of P26.99 billion and in foreign currency of P24.72 billion. It decreased
by P82.76 billion or 61.55 percent from last years balance of P134.47 billion. Of the
total, P51.67 billion represents deposits of the DOF-BTr-GOP for the account of the

63

Treasurer of the Philippines and the remaining P42.83 million was reported by the AntiMoney Laundering Council.

Cash in Bank, Local Currency of P175.41 billion increased by P24.64 billion or 16.34
percent compared to 2010 level of P150.78 billion. It consists of: Current Account
P83.47 billion, Savings Account P58.67 billion and Time Deposits P33.27 billion.
Pursuant to Executive Order No. 449, the BTr is the custodian of government funds
consisting of all the receipts and disbursements of the NG. However, some agencies
have the authority to use their income as provided in specific law or under contracts and
agreements to deposits their income in AGDB, such as those agencies with Special
Account in the General Fund, Revolving Fund and Trust Fund. Table V.1-4 shows the
departments/offices with Cash in Bank in Local Currency deposits of more than P2.0
billion balance. Schedule 10, Volume I-B presents the departments/offices/agencies
with Cash in Bank, Local Currency.
Table V.1-4 Departments/Offices with more than P2.0 billion
Cash in Bank-Local Currency
(in million pesos)
Departments/Offices
Finance
State Universities and Colleges
Judiciary
Agriculture
National Defense
Education
Other Executive Offices
Health
Agrarian Reform
Budget and Management
Public Works and Highways
Transportation and Communications
Labor and Employment
Interior and Local Government
Other Departments/Agencies

Current
17,650.13
8,554.64
914.12
8,867.26
6,748.58
7,537.12
4,218.03
4,929.04
4,097.20
1,430.26
3,696.22
2,523.06
2,270.66
2,069.14
7,964.09

Savings
45,169.32
1,093.52
7,694.40
55.80
1,488.19
8.39
1,797.36
15.36
0.57
1.72
46.64
35.63
38.34
0.27
1,220.88

Time
14,269.45
15,184.03
550.06
0.01
30.00
2,500.00
516.76
224.17

Total
77,088.90
24,832.20
9,158.57
8,923.07
8,236.79
7,575.50
6,015.38
4,944.41
4,097.77
3,931.99
3,742.86
3,075.44
2,309.00
2,069.40
9,409.15

Total

83,469.56

58,666.38

33,274.48

175,410.42

Difference between totals and sum of components is due to rounding off

The DOF- BTr GOP reported the highest deposits amounting to P66.37 billion
consisting of free balances available for NG operations, restricted accounts of
various sinking funds/managed funds and various project loan/grants proceeds
earmarked to be utilized by various implementing agencies and MDS seed money.
The BIR and the MDFO followed with balances of P7.51 billion and P2.22 billion
respectively.
Among the SUCs, the University of the Philippines System (UPS) topped with
P15.77 billion deposits, followed by Batangas State University with P710.34
million and Bulacan State University, ranked 3rd, with P404.57 million. SUCs are
authorized under R.A. No. 8292, the Higher Education Modernization Act of
1997, to deposit in AGDB as Special Trust Fund, collections of income from
tuition fees and other school charges.

64

From the Judiciary, the Supreme Court and Lower Courts accounted for P8.50
billion shared by the Supreme Court Proper P2.26 billion and Lower Courts,
including the Office of the Court Administrator P6.24 billion.

Cash in Bank Foreign Currency balance of the government reduced to P26.69


billion, consisting of current account P3.66 billion, savings account P6.96 billion
and time deposit P16.08 billion. Compared to P28.67 billion in 2010, a decrease of
P1.98 billion or 6.90 percent was noted. Table V.1-5 shows the departments/offices
with more than P100 million deposits in foreign currency. Schedule 10, Volume I-B
presents the complete list of departments/agencies with Cash in Bank, Foreign
Currency.
Table V.1-5 Departments/Offices with More than P100 million
Cash in Bank- Foreign Currency
Departments/Offices

Finance
Foreign Affairs
Justice
Energy
Social Welfare and Development
Tourism
Labor and Employment
State Universities and Colleges
ARMM
Public Works and Highways
Environment and Natural Resources
Interior and Local Government
Agriculture
Transportation and Communications
Other Departments/Offices
Total

(in million pesos)


Current
Savings
156.07
2,370.95
3,211.48
407.72
912.49
831.89
784.08
202.15
99.06
74.13
203.24
10.95
121.36
209.50
194.29
189.66
185.02
127.20
123.48
3.44
195.42
3,658.21
6,955.36

Time
15,511.21
436.83

132.10

0.64
________
16,080.78

Total
18,038.23
4,056.03
912.49
831.89
784.08
301.21
277.37
264.41
209.50
194.29
189.66
185.02
127.84
123.48
198.86
26,694.36

Difference between totals and sum of components is due to rounding off

Of the P18.04 billion reported by the DOF, the BTr-GOP accounted P17.88
billion balance. This includes free balances and managed funds P8.55 billion;
Forfeited Swiss deposits P7.45 billion; NY Collateral Bonds ConversionFederal Reserve Bank P728.46 million; and Escrow account P151.30 million.
The DFA-OSEC deposits of P4.06 billion represents cash in bank balances
maintained by Foreign Service Posts, of which P3.2 billion or 79.18 percent was
retained as working funds.

Receivables P760.05 billion


The outstanding Receivables of the NG of P760.05 billion, net of Allowance for
Doubtful Accounts of P585.56 million represents 64.05 percent of the total current assets of
P1.187 trillion. Compared to P743.36 billion in 2010, it showed an increase of P16.69
billion or 2.25 percent.
The major components of Receivables are: Inter-Agency
Receivables P489.03 billion, Receivable Accounts P245.23 billion and Other

65

Receivables P25.79 billion. Details of the Receivables by accounts are shown in Table
V.1-6.
Table V.1-6 Details of Receivables by Account
Particulars
Receivable Accounts
Accounts Receivable, Net
Notes Receivable
Due from Officers and
Employees
Loans Receivable - GOCCs
Loans Receivable - LGUs
Loans Receivable - Others
Interest Receivable
Advances to Officers and
Employees
Inter-Agency Receivables
Due from National Treasury
Due from NGAs
Due from GOCCs
Due from LGUs
Due from NGOs/POs
Intra-Agency Receivables
Due from Regional Offices/
Staff Bureaus
Due from Operating Units
Other Receivables
Receivables-Disallowances/
Charges
Other Receivables
Total

Amount (in million pesos)


Increase
2011
2010
(Decrease)
245,226.42
247,267.56
(2,041.13)
6,354.55
7,648.37
(1,293.82)
137,106.00 137,085.36
20.64

Percent
(0.83)
(16.92)
0.02

789.41
79,914.80
3,329.40
8,356.46
2,925.37

716.57
81,429.12
3,425.68
8,062.81
1,337.29

72.85
(1,514.32)
(96.29)
293.65
1,588.08

10.17
(1.86)
(2.81)
3.64
118.75

6,450.43
489,030.59
7,607.01
5,427.98
447,413.98
19,649.90
8,931.72
-

7,562.36
469,946.71
14,018.74
433,547.29
14,355.71
8,024.97
448.76

(1,111.93)
19,083.88
(6,411.73)
5,427.98
13,866.69
5,294.19
906.75
448.76

(14.70)
4.06
(45.74)
3.20
36.88
11.30
(100.00)

25,792.24

448.76
25,692.97

(448.76)
99.27

(100.00)
0.39

4,981.42
20,810.82
760,049.25

4,861.79
20,831.17
743,356.00

119.62
(20.35)
16,693.25

2.46
(0.10)
2.25

Difference between totals and sum of components is due to rounding off.

Accounts Receivables (Net) balance of P6.35 billion representing less than one percent
of the total receivables, exhibited a decline of P1.29 billion or 16.92 percent compared
to P7.65 billion reported in previous year. The five agencies that reported huge
balances with a combined total of P4.01 billion or 63.26 percent were as follows:
DOH-OSEC P1.03 billion; DOTC-OSEC P837.22 million; DOE-OSEC P834.29
million; University of the Philippines P543.79 million and DENR National Water
Resources Board P561.40 million. Schedule 11, Volume I-B enumerates the
departments/ offices with Net Accounts Receivables.

Notes Receivables of P137.11 billion constituted 18.04 percent of the total receivables
of the NG, of which P137.02 billion or 99.94 percent was reported by the DOF-BTrGOP. It pertains to the Promissory Note issued by the Central Bank-Board of
Liquidators (CB-BOL) in favor of the Treasurer of the Philippines in substitution for
the frozen/retained deposits of the NG in the CB-BOL.

Due from Officers and Employees rose to P789.41 million, showing an increase of
P72.85 million or 10.17 percent from P716.57 million in previous year. The amount
consisted of billings for overpayment of salaries, allowances/entitlements, honoraria
and cash shortages. The five agencies that reported the largest balance to this account

66

are: DFA OSEC P134.54 million, DA-OSEC P123.46 million; DOF-BIR P92.63
million; Supreme Court of the Philippines and Lower Courts - P41.42 million; DepED
OSEC P39.03 million. Schedule 12, Volume I-B presents the complete list of
departments/offices/agencies with balances to this account.

Loans Receivable GOCCs totaling P79.91 billion decreased by P1.51 billion or 1.86
percent compared to previous years balance of P81.43 billion. Of the total, the DOFBTr-GOP reported P76.71 billion or 95.99 percent consisting of cash and constructive
cash loan outlays to GOCCs. This also included the balances of accounts InvestmentsInterest Bearing Loans to GOCCs and Other Interest Bearing Loans amounting to
P73.17 million and P37.59 million, respectively, which remained dormant for 12 to 30
years. Details of Loans Receivables by GOCCs, by the Bureau of the Treasury are
presented in Schedule 13, Volume I-B.

Loans Receivable LGUs dropped to P3.33 billion, a decrease of P96.29 million or


2.81 percent was noted over last years P3.43 billion. The DOF-MDFO reported P3.04
billion loan receivables from LGUs comprising 91.26 percent of the aggregate. The
other three agencies with this account are: DA-OSEC with P281.11 million composed
of loans to LGUs in the form of 4 Wheel Tractors, Irrigation Pumps and warehouses
with repayment period of 5-10 years; the Bureau of Local Government Finance with
P8.53 million; and DOLE-Technical Education and Skills Development Authority
(TESDA) P1.45 million.

Loans Receivable Others amounted to P8.36 billion, showing an increment of


P293.65 million or 3.64 percent from P8.06 billion in previous year. The DA reported
the highest balance at P6.85 billion representing 82.03 percent of the total. This
included the P4.07 billion loans granted by OSEC to various beneficiaries for
implementation of the Agricultural Competitiveness Enhancement Fund (ACEF) and
P11.32 million loans granted by RFU Region VI to farmers in the form of Shallow
Tube Wells and Farm Equipment payable in 10 equal installments for 5 years; and loans
granted under the WV in life Program in the form of 10 heads of swine per recipient
payable in 36 months from delivery. The Agricultural Credit and Policy Council shared
P531.63 million.
Other departments with loan receivables aggregating P1.50 billion are shown
below.
Departments/Offices
Trade and Industry
Other Executive Offices
Labor and Employment
State Universities and Colleges
Agrarian Reform
Finance
Social Welfare and Development
Science and Technology
Energy
Environment and Natural Resources
Total

Amount
(in million pesos)
329.53
309.69
165.16
162.41
154.54
134.55
126.34
95.03
24.63
0.06
1,501.94

Interests Receivable on various investments and loans granted significantly increased


to P2.93 billion from P1.34 billion in previous year, exhibiting a growth of P1.59 billion

67

or 118.75 percent. This was mainly due to the DOF-BTr-GOPs P1.74 billion accrued
interest on investments in Treasury Bonds from the Special and Sinking Funds; and
LBP administered Agrarian Reform Fund (ARF). The DOFMDFO also reported
P478.03 million interest receivable from loans released to LGUs.

Advances to Officers and Employees dropped to P6.45 billion from prior years
balance of P7.56 billion, posting a reduction of P1.11 billion or 14.70 percent. The
amount represents the unliquidated cash advances granted for local and foreign travels
and for special purpose/time-bound undertakings. The DepED OSEC topped the list
with P1.73 billion corresponding to 26.84 percent of the total, followed by the DSWD OSEC with P848.43 million or 13.15 percent; and the OP-Presidential Anti-Organized
Crime Commission P550 million or 8.53 percent. Schedule 12, Volume I-B presents
the complete list of departments/offices/agencies with unliquidated advances to officers
and employees.

Inter-agency Receivables rose to P489.03 billion from P469.95 billion in prior year,
posting an increment of P19.08 billion or 4.06 percent. It consisted of the following
accounts: Due from National Treasury P7.61 billion, Due from NGAs P5.43 billion,
Due from GOCCs P447.41 billion, Due from LGUs P19.65 billion and Due from
NGOs/POs P8.93 billion.

Due from National Treasury (NT) was reduced to P7.61 billion after the
elimination of the P25.33 billion balances reported in the Regular Agency books of
various NGAs with the reciprocal account Due to Other NGAs in the BTR-GOP
books. Due from NT account pertains to collections of income which some
government agencies are authorized to use but are required to remit to the National
Treasury pursuant to Executive Order No. 338 and other non-income receipts such
as performance/bail/bidders bond in cash.

Due from GOCCs balance of P447.41 billion grew by P13.87 billion or 3.20
percent from P433.55 billion in 2010. The DOF-BTr-GOP reported the highest
balance of P424.92 billion or 94.97 percent, details of which are shown in Table
V.1.7. The DA- OSEC followed, with P6.54 billion representing fund transfer to
LBP for ACEF project and to NABCOR, ZREC, PADCC for implementation of
PDAF and other DA projects. The DOTC-OSEC, the 3rd highest, reported P5.71
billion balance which include fund transferred to the Light Rail Transit Authority of
P4.50 billion and to the Manila International Airport Authority of P1.10 billion for
the MRT 3 System Capacity Expansion Project and NAIA Terminal I
Rehabilitation Project, respectively. Schedule 14, Volume I-B presents the list of
GOCCs with balances under this account in the Bureau of the Treasury.

Due from LGUs balance of P19.65 billion increased by P5.29 billion or 36.88
percent from the 2010 level of P14.36 billion. The account pertains to unliquidated
fund transfers to various LGUs for implementation of specific agencies projects in
the locality. The DA-OSEC reported the highest balance at P4.39 billion consisting
of funds transferred by OSEC, RFUs and Bureaus to the LGUs for implementation
of various infrastructures projects and post-harvest facilities such as Farm to Market
Roads, Small Water Impounding Projects, farm inputs/implements and
repair/rehabilitation of existing irrigation. The DSWD-OSEC balance of P3.12
billion includes rehabilitation assistance for the victims of calamities and for
implementation of various DSWD programs and projects. Other agencies with

68

more than P1.50 billion balances under this account are: DOH-OSEC P2.48
billion, DPWH-OSEC P2.10 billion and DAR OSEC P1.74 billion.
Table V.1-7 Due from GOCCs
Reported by the Bureau of the Treasury
Nature
NGs advances in behalf of GOCCs/GFIs for their foreign and domestic
obligations (principal, interest and other charges)
NGs refinancing of BSP advances/payments on liabilities retained
with CB-BOL
Guarantee fee receivables
NG advances for assumed GOCCs/GFIs guaranteed obligations
Dormant accounts
Balance of loans outlay released to LBP under the Agrarian Reform
Loans
Balance of DBPs outstanding obligations to NG involving the transfer
of DBPs receivable from DAR/LBP pursuant to EO No. 407 dated
June 14, 1990
Others
Total

Amount
(in million
pesos)
259,239.90
136,781.50
11,572.06
7,976.05
7,758.49
1,272.42

272.25
____44.61
424,917.29

Source: BTr-GOP Notes to FS

Due from NGOs/POs of P8.93 billion increased by P906.75 million or 11.30


percent from the previous years balance of P8.02 billion. The accounts pertains to
funds entrusted by NGAs to various NGOs/POs for implementation of specific
government projects which require submission of periodic/final Fund Utilization
Report and Physical Status Report pursuant to COA Circular No. 2007-001 dated
October 25, 2007.
The DOH-OSEC accounted the highest balance at P2.24 billion, which
included largely the funds transferred to UNICEF and World Health Organization
for the procurement of various drugs and medicines and other inventory supplies.
The DA-OSEC also reported P1.58 billion balance of fund transferred to
NGOs/POs for the procurement of farm inputs and farm implements for the
implementation of livelihood and other DA programs/projects, while the DSWDOSEC had P1.17 billion, of which P436.05 million was released by the DSWD to
various NGOs from year 2010 and prior years funded from the Congressional
Initiative, CDF and PDAF of various solons.
Schedule 15, Volume I-B presents the departments/agencies with balances
of accounts Due from GOCCs, LGUs, and NGOs/POs.

Other Receivables group of accounts aggregated to P25.79 billion slightly declined by


P99.27 million from P25.69 billion in 2010. The components of this category are
Receivables - Disallowances/Charges P4.98 billion or 19.31 percent and Other
Receivables P20.81 billion or 80.69 percent.

Receivables-Disallowances/Charges of P4.98 billion were unsettled audit


disallowances that have become final and executory. Compared with the previous
years balance of P4.86 billion, an increase of P119.62 million or 2.46 percent was
noted. The agencies which reported the highest balances were: DOF-BOC P1.84
billion, and DPWH-OSEC P1.06 billion.

69

Other Receivables dropped to P20.81 billion from P20.83 billion in 2010, showing
a minimal decrease of P20.35 million. The DOF-BTr-GOP reported P12.62 billion
comprising 60.65 percent of the total, of which P12.13 billion pertains to the
receivables of the Treasurer of the Philippines from Authorized Agent Banks for the
BIR collections per Department Order No. 73-02 dated September 20, 2002 and the
Memorandum of Agreement between the banks, the BTr and the BIR.
Schedule 16, Volume I-B shows the departments/agencies with balances to
Other Receivables accounts.

Inventories P26.37 billion


Inventories of NGAs aggregated to P26.37 billion, posting an increment of P1.17
billion or 4.65 percent compared to P25.20 billion last year. The components of this
category of assets are: Supplies P24.16 billion or 91.62 percent; Materials P1.43 billion
or 5.42 percent; and Agricultural, Fishery and Forestry Products P779.90 million or 2.96
percent.
The DOH-OSEC reported the highest balance of inventories amounting to P7.78
billion which includes Drugs and Medicines P5.06 billion, Medical and Dental
Laboratory P1.28 billion, Office Supplies P574.03 million, and Merchandise Inventory
P452.92 million. The other agencies which reported more than P1.00 billion inventory at
year-end were: DND-Philippine Army and GHQ-AFP P3.27 billion and P1.18 billion,
respectively; DepED-OSEC P2.71 billion; and DA-OSEC P1.04 billion. Schedule 17,
Volume I-B presents the complete list of departments/offices/ agencies.

Prepayments P130.06 billion


Prepayments of P130.06 billion significantly increased by P30.89 billion or 31.15
percent over last years level of P99.16 billion. The growth was mainly due to the P30.60
billion or 41.10 percent increase in Deferred Charges. The components of this group of
assets were: Deferred Charges P105.06 billion; Advances to Contractors P11.17 billion;
Deposit on Letters of Credits P9.09 billion; Other Prepaid Expenses P3.88 billion;
Prepaid Rent P673.62 million; Prepaid Insurance P185.98 million; and Prepaid Interest
P1.91 million. Schedule 18, Volume I-B indicates the components of Prepayment
accounts by department/office.

Deferred Charges of P105.06 billion comprised 80.78 percent of the aggregate


prepayments. The DOF-BTr-GOP reported P104.91 billion representing 99.85 percent
of the total, which pertains to discounts on Bond Exchange, the issuance of Zerocoupon Bonds and Global bonds abroad, and premiums on investments in bonds held
by Bond Sinking Fund, Special Guaranty Fund, Security Stabilization Fund and Manila
Waterworks Sewerage System which being are amortized over the life of the bonds.

Advances to Contractors increased to P11.17 billion, an increment of P1.56 billion or


16.21 percent compared to last years level of P9.61 billion. These were advance
payments for the implementation of the foreign-assisted and locally-funded
infrastructures and other projects. The amount is supposed to be recouped from
succeeding progress payments as required by the Procurement Law. The DPWH-OSEC
reported the highest balance of P7.05 billion or 63.14 percent of the total advances
followed by DOTC-OSEC and DA-OSEC with P990.79 million and P986.44 million,
respectively.

70

Deposit on Letters of Credit of P9.09 billion reduced by P1.49 billion or 14.06 percent
from the 2010 balance of P10.57 billion. The DND-GHQ-AFP and the Philippine
Army accounted the highest balances at P5.70 billion or 63.14 percent and P1.03 billion
or 11.39 percent of the total, respectively. The account represented marginal deposits or
prepayments deposited to authorized depository banks for the supplies and delivery of
ammunitions, vehicles and communication requirements of the AFP contracted from
foreign suppliers and cost of freight forwarding. Other agencies which reported more
than P100 million balances were: DBM-Procurement Service P1.21 billion, DAOSEC P214.81 million, COMELEC P209.74 million, DOTC- OSEC P187.71
million, and DND Government Arsenal P132.37 million.

Other Current Assets group aggregating P7.65 billion consisted mostly of Guaranty
Deposits of P7.27 billion or 95.14 percent and Other Current Assets account of P371.52
million.

Guaranty Deposits at P7.27 billion reduced by P3.76 billion or 34.10 percent from last
years balance of P11.04 billion. The account represented the cash deposits with
government banks and other private institutions mainly for the procurement of goods,
equipment and ammunitions locally and from abroad subject to refund. The DA-OSEC
reported P4.01 billion while DND- AFP -GHQ shared P2.41 billion representing 55.08
percent and 33.15 percent of the total, respectively.
The account of the DA-OSEC included the P4.00 billion contribution/
augmentation to the Agricultural Guarantee Pool Fund (AGPF) for Rice SelfSufficiency Program of the Government per Administrative Order No. 244 dated
October 23, 2008 issued by the Office of the President.
The departments/offices with balances of Other Current Assets by account are
presented in Schedule 19, Volume I-B.

5.1.1.2 Investments P1.016 trillion


Investments of the NG worth P1.016 trillion comprised 30.80 percent of the total
assets, higher by P174.14 billion or 20.68 percent than the previous years level of P842.10
billion. The growth is attributed to the Sinking Fund which grew to P776.81 billion,
showing an increase of P161.20 billion or 26.19 percent from P615.61 billion in 2010.
Investments in Securities aggregating P239.43 billion also increased by P12.94 billion or
5.71 percent compared to P226.50 billion in 2010. The composition of Investments is
shown in Table V.1-8.
Table V.1-8 Composition of Investments
Particulars
Investments in Securities
Investments in Treasury Bills
Investments in Stocks
Investments in Bonds
Other Investments and
Marketable Securities
Sinking Fund
Total

Amount (in million pesos)


Increase/
2011
2010
(Decrease)
239,434.89
226,496.28
12,938.60
14,196.23
13,389.72
806.51
126,390.18 126,510.26
(120.09)
7,938.22
7,696.61
241.61
90,910.27
776,808.70
1,016,243.59

78,899.69
615,605.81
842,102.10

Difference between totals and sum of components is due to rounding off.

71

12,010,.57
161,202.89
174,141.49

Percent
5.71
6.02
(0.09)
3.14
15.22
26.19
20.68

Investments inTreasury Bills of P14.20 billion registered an increase of P806.51 million


or 6.02 percent from P13.39 billion in previous year. The DOF-MDFO had the highest
balance to this account at P10.88 billion or 76.63 percent of the total, which represents
MDFO Local Loans Account 162 Second Generation Funds temporarily placed in Treasury
Bills. Other agencies with huge amount of investments in Treasury bills are: DOE-OSEC
P2.66 billion, Bureau of Rural Workers with Special Concerns P287.72 million,
Supreme Court of the Philippines and Lower Courts P104 .76 million.

Investments in Stocks of P126.39 billion slightly reduced by P120.09 million from


P126.51 billion in 2010. The DOF-BTR-GOP reported P125.12 billion or 99 percent
consisting of NG equity contributions to GOCCs P97.49 billion; subscriptions to the
capital stocks of international financial organizations P24.55 billion; equity in the
Philippine National Construction Corporation transferred by GFIs to NG P1.26 billion
and NG holdings in the capital stock of the Philippine Airlines pursuant to Administrative
Order No. 242 dated October 21, 1991 and Proclamation No. 50 dated December 8, 1986
P1.82 billion. The PCGG, under DOJ, also reported P1.07 billion investments in stocks.
The schedule of Investments in Stocks of the NG as reported by the BTr-GOP is presented
in Schedule 20, Volume I-B.

Investments in Bonds of P7.94 billion, exhibited an increase of P241.61 million or 3.14


percent from P7.70 billion in the previous year. The DOF-BTr-GOP reported P7.79 billion
or 98.08 percent of the total, which consists of NG investments in NIA Bonds P4.26
billion and ROP Bonds P131.78 million and in BTr managed/administered funds P3.39
billion. Other agencies with huge amount of investment in bonds were: SUC-UPS
P81.99 million, NEDA- SRTC P63 million and DOF-Privatization and Management
Office (PMO) P7.17 million.

Other Investments and Marketable Securities at P90.91 billion increased by P12.01


billion. The DOF- BTr-GOP reported a balance of P88.09 billion representing 96.90 percent
of the total, majority of which pertains to the equity of the NG in non-stock GOCCs
amounting to P86.57 billion.
Other agencies that reported more than P150 million balances were: SUC-UPS
P866.72 million, DAR-OSEC P689.15 million, OEO-CHED P340.93 million, Office of
the President P275.62 million, and DA-OSEC P150.92 million. The schedule of Other
Investments and Marketable Securities by department/ office is shown in Schedule 21,
Volume I-B.

Sinking Fund of P776.81 billion represents 66.71 percent of the total investments of the
NG. This pertains to Sinking Fund accounts of NG-issued and NG Guaranteed LBP,
MWSS, HGC, NFA, NPC, PPA and PAG-IBIG Bonds being administered by the DOFBTr-GOP.

5.1.1.3 Property, Plant and Equipment P987.06 billion


The book value of the Property, Plant and Equipment (PPE) of P987.06 billion,
net of accumulated depreciation of P135.33 billion, comprised 29.92 percent of the total
assets. Compared to P985.80 billion balance in 2010, it posted an increase of P1.26
billion. The major classification of PPE is shown in Table V.1-9.

72

Table V.1-9 Major Classification of Property, Plant and Equipment


Particulars
Land and Land Improvements
Buildings
Leasehold Improvements
Office Equipment, Furniture
and Fixtures
Machineries and Equipment
Transportation Equipment
Other Property, Plant and
Equipment
Construction in Progress
Total

Amount (in million pesos)


Increase/
2011
2010
(Decrease)
198,777.36
203,622.07
(4,844.71)
141,098.21
133,866.28
7,231.93
350.68
282.23
68.46
32,879.31
31,961.28
918.03

Percent
(2.38)
5.40
24.26
2.87

48,382.52
24,859.59

46,275.96
24,322.12

2,106.56
537.47

4.55
2.21

7,081.96
533,628.73
987,058.35

6,175.59
539,294.64
985,800.17

906.37
(5,665.92)
1,258.18

14.68
(1.05)
0.13

Difference between totals and sum of components is due to rounding off.

Among the components, the Construction in Progress account worth P533.63


billion accounted for 54.06 percent of the total PPE. The Land and Land Improvements
group and the Buildings shared P198.78 billion or 20.14 percent and P141.10 billion or
14.29 percent, respectively. Chart V.1-3 shows the percentage distribution of PPE by
classification. Schedule 22, Volume I-B presents the PPE by department/agency and by
account.
Chart V.1-3 Percentage Distribution of Property, Plant and
Equipment by Classification
LandandLandImprovements
Buildings
54.06%
20.14%

LeaseholdImprovements
OfficeEquipment,FurnitureandFixtures

14.29%

TransportationEquipment

0.72%
0.04%

2.52%
4.90%

MachineriesandEquipment

3.33%

OtherProperty,PlantandEquipment
ConstructioninProgress

Land and Land Improvements group accumulated value of P198.78 billion exhibited
a reduction of P4.84 billion or 2.38 percent from P203.62 billion in previous year. Of
the components, the Land account had the highest balance at P160.66 billion
representing 80.82 percent, followed by the Land Improvement account with net book
value of P35.44 billion or 17.83 percent. Runways/Taxiways account had the least
balance at P210. 48 million, noting a reduction of P1.13 billion or 84.30 percent from
last years P1.34 billion. The significant reduction was due to the dropping from DOTC
books the transfer of completed projects to the recipient agency. Table V.1-10 shows
the comparative components of Land and Land Improvement accounts

73

Table V.1-10 Components of Land and Land Improvements


Particulars
Land
Land Improvements
Runways/Taxiways
Railways
Electrification, Power and
Energy Structures
Total

Amount (in million pesos)


Increase/
2011
2010
(Decrease)
160,657.69 159,915.78
741.91
35,445.02
39,919.85
(4,474.84)
210.48
1,340.90
(1,130.42)
1,851.91
1,851.91
612.26
198,777.36

593.63
203,622.07

18.63
(4,844.72)

Percent
0.46
(11.21)
(84.30)
3.14
(2.38)

Difference between totals and sum of components is due to rounding off.

The agencies that reported more than P10 billion worth of property under the
Land and Land Improvement category of accounts are: DSWD-OSEC P40.26 billion,
DPWH-OSEC P30.90 billion, DA-OSEC P19.22 billion, DND-Philippine Air Force
P17.65 billion and DOJ-PCGG P16.02 billion.

Buildings accumulated net book value of P141.10 billion comprised 14.29 percent of
the total PPE. It registered an increase of P7.23 billion or 5.40 percent over the 2010
level of P133.87 billion. Among the components of this group of PPE, the School
Buildings account shared the biggest portion at P60.85 billion or 43.12 percent,
followed by Office Buildings at P44.71 billion or 31.69 percent, and Other Structures at
P27.17 billion or 19.26 percent. Table V.1-11 shows the components of Buildings.
Table V.1-11 Components of Buildings
Particulars
Office Buildings
School Buildings
Hospitals and Health Centers
Markets and Slaughterhouses
Other Structures
Total

Amount (in million pesos)


Increase/
2011
2010
(Decrease)
44,707.81
43,147.45
1,560.36
60,848.55
57,024.96
3,823.59
8,286.79
7,189.15
1,097.65
81.68
109.65
(27.98)
27,173.38
26,395.07
778.31
141,098.21
133,866.28
7,231.93

Percent
3.62
6.71
15.27
(25.51)
2.95
5.40

Difference between totals and sum of components is due to rounding off.

The DepED - OSEC reported the biggest balance valued at P44.08 billion, of
which P42.04 billion or 95.36 percent were School buildings. The amount of buildings
booked up does not include the School Building Projects implemented by the DPWH
due to non-availability of documents such as the certificate of final completion and
certificate of acceptance by the end-users. The other two agencies with huge balances to
this PPE group of account were: DPWH-OSEC with P24.42 billion, which included
completed school building projects that were already transferred to the end-user
agencies but not yet dropped from the books of DPWH; and DOH-OSEC with P6.86
billion net book value of buildings, of which P6.08 billion were hospitals.

Construction in Progress (CIP) group of PPE combined balance of P533.63 billion


showed a reduction of P5.67 billion or 1.05 percent from previous years balance of
P539.29 billion. This group of PPE consisted of CIP-Agency Assets - P38.85 billion or
7.28 percent, Public Infrastructures P492.65 billion or 92.32 percent and
Reforestation Projects P2.13 billion or 0.40 percent. Table V.1-12 presents the
components of CIP group of PPE account.

74

Table V.1-12 Components of Construction in Progress


Particulars
Agency Assets
Public Infrastructure
Roads, Highways and Bridges
Parks, Plazas and Monuments
Ports, Lighthouses and Harbors
Artesian Wells, Reservoirs,
Pumping Stations and
Conduits
Irrigation, Canals and Laterals
Flood Controls
Waterways, Aqueducts, Seawalls,
River Walls and Others
Other Public Infrastructures
Reforestation Projects
Upland
Marshland/Swampland
Total

Amount (in million pesos)


Increase/
2010
2010
(Decrease)
38,849.40
33,571.28
5,278.13

Percent
15.72

492,649.70
309,819.00
188.51
4,054.07

503,643.57
326,691.53
838.46
6,014.21

(10,993.87)
(16,872.53)
(649.95)
(1,960.15)

(2.18)
(5.16)
(77.52)
(32.59)

3,117.76
69,324.13
49,156.00

3,354.51
60,712.76
52,796.04

(236.76)
8,611.37
(3,640.04)

(7.06)
14.18
(6.89)

2,102.64
54,887.59
2,129.63
2,085.62
44.01
533,628.73

2,270.15
50,965.90
2,079.80
2,043.15
36.64
539,294.64

(167.51)
3,921.68
49.83
42.47
7.36
(5.665.92)

(7.38)
7.69
2.40
2.08
20.09
(1.05)

Difference between totals and sum of components is due to rounding off.

CIP Agency Assets account balance of P38.85 billion posted an increment of


P5.28 billion or 15.72 percent from P33.57 billion in 2010. The agencies that
reported more than P1.0 billion balances to this account were: DepED-OSEC
P8.42 billion worth of ongoing projects under the School Building Program, repair
of Teachers Camp and various buildings implemented by the department and other
NGAs; DOTC-OSEC P7.22 billion; DOH-OSEC P4.22 billion; SUC-UPS
P3.10 billion; DA-OSEC P1.56 billion; DPWH-OSEC P1.46 billion; and DNDPhilippine Army P1.45 billion. Schedule 23, Volume I-B shows the CIP by
department/agency.

Public Infrastructures accounts accumulative balance of P492.65 billion exhibited


a decrease of P10.99 billion or 2.18 percent compared with P503.64 billion in 2010.
This group of CIP constitutes: Roads, Highways and Bridges P309.82 billion or
58.06 percent, Irrigation, Canals and Laterals P69.32 billion or 12.99 percent,
Other Public Infrastructures P54.89 billion or 10.29 percent, Flood Controls
P49.16 billion or 9.21 percent; and Ports, Lighthouses and Harbors P4.05 billion,
Artesian Wells, Reservoirs, Pumping Stations and Conduits P3.12 billion,
Waterways, Aqueducts, Seawalls P2.10 billion and Parks, Plazas and Monuments
P188.51million.
Table V.1-13 shows the agencies that reported more than P100 million
balances. The DPWH-OSEC accounted for P398.56 billion or 80.90 percent,
majority of which are Roads, Highways and Bridges P304.63 billion, Flood
Controls P48.85 billion and Other Public Infrastructures P34.28 billion. The
DA-OSEC reported P66.41 billion, of which P63.26 billion are Irrigation, Canals
and Laterals foreign assisted projects, equipment and consultancy implemented by
NIA. Schedule 24, Volume I-B presents the Public Infrastructures by department/
agency.

75

Table V.1-13 Agencies with more than P100


million worth of Public Infrastructures

5.1.1.4

Reforestation
Projects
aggregating P2.13 billion
showed a slight increase of
P49.83 million or 2.40
percent from the previous
years balance of P2.08
billion. This was reported by
the DENR-OSEC consisting
of P2.09 billion or 97.93
percent for Upland and
P44.00 million or 2.07
percent for Marshland/
Swampland.

Agencies
DPWH - OSEC
DA-OSEC
DOTC-OSEC
DAR-OSEC
MMDA
DENR-OSEC
DOH-OSEC
Pasig River Rehabilitation
Commission
DND-Phil Army
DOT-OSEC
ARMM-Office of the
Regional Governor
Other Agencies
Total

Amount
(in million
pesos)
398,561.45
66,415.00
23,138.80
1,708.34
850.22
781.73
318.38

Percentage
80.90
13.48
4.70
0.35
0.17
0.16
0.06

312.07
195.07
137.05

0.06
0.04
0.03

100.22
131.35
492,649.70

0.02
0.03
100.00

Other Assets P109.50 billion

The aggregate Other Assets of the NG stood at P109.50 billion and represented
3.32 percent of the total assets. This group of account went up by 1.73 percent or P1.86
billion from last years balance of P107.64 billion. Among the components of this group,
Work/Other Animals had the highest growth rate of 34.71 percent but with least balance
of P132.29 million, while the Other Assets Account had the least growth rate of 2.14
percent but with the biggest balance of P98.07 billion. Table V.1-14 shows the
components of the Other Assets group.
Table V.1-14 Components of Other Assets Group
Particulars
Other Assets
Items in Transit
Breeding Stocks
Arts, Archeological Specimen
and Other Exhibit
Work/Other Animals
Total

Amount (in million pesos)


Increase/
2011
2010
(Decrease)
98,074.83
96,022.43
2,052.39
10,164.92
10,385.98
(221.06)
715.63
735.53
(19.90)
414.26
132.29
109,501.93

394.56
98.20
107,636.70

19.71
34.09
1,865.22

Percent
2.14
(2.13)
(2.71)
4.99
34.71
1.73

Difference between totals and sum of components is due to rounding off.

The Other Assets account is used to record the value of serviceable assets not used in
operation and those waiting for disposal. At year-end, this account amounted to P98.07
billion or 89.56 percent of the total. The DOF-BTr-GOP reported P72.75 billion
balance consisted mostly of transferred assets under Proclamation No. 50 wherein
disposition and sale are being handled by the Privatization and Management Office and
PNPP/NPC, and financial assets transferred from DBP, PNB and Philguarantee
amounting to P68.12 billion and P4.63 billion, respectively. It also included the P2.17
million appraised value of diamonds in the Treasury Vault deposited by various
government agencies which were escheated in favor of the Republic of the Philippines
per court order dated May 5, 1997.

76

5.1.2 LIABILITES P5.382 trillion


This years reported liabilities of P5.382 trillion posted an increment of
P363.58 billion or 7.24 percent compared to last years amount of P5.018 trillion. Of
the total, P4.645 trillion or 86.30 percent pertains to Long-term Liabilities; P710.19
billion or 13.20 percent represents Current Liabilities; and P27.06 billion or 0.50
percent refers to Deferred Credits.
Chart V.1-4 shows the trend of liabilities of the NG for the last ten (10) years.
Chart V. 1-4 Trend of Liabilities
(in billion pesos)

6,000
5,000
4,000
3,000
2,000
1,000
0
C urre nt Lia bilit ie s

2002

2003

2004

2005

2006

2007

2008

2009

2 0 10

2 0 11

6 7 2 .8 7

2 0 4 .10

2 2 5 .9 0

2 12 .8 0

2 3 9 .7 4

2 5 0 .12

2 7 1.7 7

9 12 .8 6

8 13 .0 2

7 10 .19

Lo ng- t e rm Lia bilit ie s 2 ,3 5 6 .4 5 3 ,3 2 1.5 6 3 ,7 0 6 .2 8 3 ,8 8 5 .6 9 3 ,8 8 7 .9 8 3 ,7 8 4 .15 4 ,13 9 .9 7 3 ,7 0 1.9 1 4 ,17 8 .7 9 4 ,6 4 4 .7 6


T o t a l Lia bilit ie s

3 ,0 3 1.5 1 3 ,5 3 7 .4 5 3 ,9 8 9 .4 8 4 ,14 8 .7 7 4 ,16 7 .12 4 ,0 5 5 .6 8 4 ,4 4 0 .2 4 4 ,6 4 8 .2 1 5 ,0 18 .4 4 5 ,3 8 2 .0 2

The chart shows that total liabilities continued to grow, except in 2007 where there
was a slight decline brought about by the decrease in Long-term Liabilities. The decrease in
Long-term Liabilities and the increase in Current Liabilities in 2009 were due to the
reclassification of the current portion of the Loans Payable-Domestic from Long-term
Liabilities to Current Liabilities. For FY 2011, total liabilities increased due to the great
increment in Long-term Liabilities though there was a slight decrease in Current Liabilities.
The Deferred Credits, though forming part of the total liabilities, was not included in the
graphical presentation because of its insignificant amount.
5.1.2.1 Current Liabilities P710.19 billion
This years Current Liabilities posted a decrease of P102.83 billion or 12.65
percent from last years balance of P813.02 billion. This was due to the decline in
Loans Payable - Domestic, Current by P255.84 billion or 46.25 percent and Payable
Accounts by P8.00 billion or 6.54 percent. There were, however, increases in InterAgency Payables of P15.44 billion or 30.99 percent, Intra-Agency Payables of
P140.51 billion or 1,949.27 percent, and Other Liability Accounts of P5.06 billion or
6.30 percent. Table V.1-15 shows the components of Current Liabilities with
comparative figures for 2010.

77

Table V.1-15 Comparative Components of Current Liabilities


Particulars

Payable Accounts
Inter-Agency Payables
Intra-Agency Payables
Other Liability Accounts
Loans Payables, Domestic, Current
Total

2011
Amount
Percent
(in million
Distribupesos)
tion

2010
Amount
(in million
pesos)

114,370.53
65,253.73
147,722.26
85,466.69
297,380.52
710,193.73

122,372.76
49,816.03
7,208.54
80,403.92
553,219.49
813,020.74

16.10
9.19
20.80
12.03
41.87
100.00

Increase/ (Decrease)
Amount
(in million
Percent
pesos)

(8,002.23)
15,437.70
140,513.71
5,062.78
(255,838.97)
(102,827.01)

(6.54)
30.99
1,949.27
6.30
(46.25)
(12.65)

Difference between totals and sum of components is due to rounding off

Payable Accounts P114.37 billion


Payable Accounts exhibited a decrease of P8.00 billion or 6.54 percent from
P122.37 billion in 2010. This was due to the decrease in Accounts Payable by P7.98
billion and Due to Officers and Employees by P362.67 million, which decreases were
partly offset by an increase in Interest Payable by P341.28 million.

Accounts Payable of P97.16 billion accounted for 84.96 percent of the total
Payable Accounts. It exhibited a decrease of P7.98 billion or 7.59 percent from
P105.14 billion in 2010. Table V.1-16 shows the comparative Accounts Payable
by department/office/agency.
Table V.1-16 Accounts Payable by Department/Office/Agency

Amount (in million pesos)


Increase/
Department/Office
2011
2010
(Decrease)
Public Works and Highways
46,349.42
52,171.83
(5,822.41)
Social Welfare and Development
7,391.61
2,930.22
4,461.39
Pasig River Rehabilitation Commission 6,668.91
6,662.77
6.14
Health
6,561.99
5,945.69
616.30
Agriculture
6,496.99
4,611.48
1,885.51
State Universities and Colleges
4,209.97
5,384.12
(1,174.15)
Finance
2,737.05
6,338.80
(3,601.75)
Education
(398.52)
2,563.97
2,962.49
Transportation and Communications
(1,322.18)
2,308.35
3,630.53
(428.02)
National Defense
2,066.16
2,494.18
(2,203.44)
Other Departments/Offices
9,809.55
12,012.99
Total
97,163.97 105,145.10
(7,981.13)

Percent

(11.16)
152.25
0.09
10.37
40.89
(21.81)
(56.82)
(13.45)
(36.42)
(17.16)
(18.34)
(7.59)

Difference between totals and sum of components is due to rounding off

The table discloses that the decrease in Accounts Payable was mainly due to
the decrease in the accounts of the DPWH P5.82 billion, DOF P3.60 billion,
DOTC P1.32 billion, SUCs P1.17 billion, and other departments P2.20
billion. However, the decrease was partly offset by the increase in the DSWD
P4.46 billion, DA P1.89 billion, and DOH P616.30 million.

78

The DPWH, particularly the OSEC, reported the biggest Accounts Payable
of P46.26 billion which pertains to unpaid accounts on contractors progress
billings and suppliers goods.
The DSWD followed with P7.39 billion. The amount includes P5.39 billion
representing various claims of creditors and unpaid cash grants of the
beneficiaries of Pantawid Pamilyang Pilipino Program, and P1.18 billion
pertaining to unreleased checks subject for reversion in the ensuing year.
Of the P6.67 billion accounts payables declared by the PRRC, P6.66 billion
pertains to payables for various infrastructure projects which were paid under the
direct payment scheme charged against the ADB loan and Belgian Super Subsidy
Facility loan awaiting the release of the Notice of NCAA from the DBM.
The DOH has an outstanding amount of P6.56 billion in accounts payable,
P6.52 billion of which was reported by the OSEC pertaining to purchases of
inventories and PPE on account and unpaid contracts for services.
The DA has an accumulated balance of P6.50 billion. Of this amount, P5.92
billion was reported by the OSEC representing unreleased checks and due and
demandable obligations and P1.41 billion paid by the bank under the direct
payment scheme but remained outstanding in the books due to the non-issuance of
the NCAA by the DBM.
The SUCs shared a total of P4.21 billion of which P2.94 billion was
accounted by the University of the Philippines.
The DOF reported P2.74 billion, of which P1.89 billion was accounted by
the DOF-BOC.
The DepED has an outstanding Accounts Payable of P2.56 billion. Of this
amount, a total of P1.74 billion was reported by the Regional Offices, and
P785.48 million was recorded in the books of the OSEC and its bureaus.
The DOTC has an accumulated balance of P2.31 billion as of yearend. The
OSEC reported P1.47 billion which refers to obligations to external creditors for
goods delivered and services rendered, P1.01 billion of which are payables aged
less than 90 days. Of the payables over one year and above, the amount of
P100.76 million shall be reverted in 2012. The LRTA also reported P659.40
million which pertains to obligations to different contractors for various projects.
The amount of P9.81 billion or 10.10 percent of the total Accounts Payable
was shared by other department/office/agency. Details of Accounts Payable by
department/office/agency are presented in Schedule V-25, Volume I-B.

Notes Payable with a balance of P7.15 billion represents 6.25 percent of the total
payables. Of this amount, P7.14 billion refers primarily to promissory notes
issued by the DOF-BTr-GOP to Multilateral Investment Guaranty Agency
(MIGA), Asian Development Bank (ADB), International Monetary Fund (IMF),

79

and International Bank for Reconstruction and Development (IBRD) for payment
of subscription to the capital stock.

Due to Officers and Employees of P9.53 billion shared 8.33 percent of the total
payables which decreased by P362.67 million or 3.67 percent from P9.89 billion
in 2010. It represents unpaid salaries, fringe benefits and other emoluments, and
other unpaid obligations due to officers and employees of NGAs. The DILG
reported the biggest amount of P2.59 billion, followed by DND and DepED with
P2.43 billion and P2.24 billion, respectively. The remaining balance of P2.27
billion was reported by the other departments/offices.

Interest Payable totaling P527.68 million registered an increase of P341.28


million or 183.10 percent from last years P186.39 million. The amount of
P515.06 million or 97.61 percent of the total Interest Payable was reported by the
DOF-BTR-GOP which pertains to accrued interest on over-the-counter sale of
domestic bonds.

Inter-Agency Payables P65.25 billion


Inter-agency payables pertain to liabilities that subsisted within the NGAs,
LGUs and GOCCs for taxes withheld and mandatory contributions deducted from
salaries of officials and employees which remained unremitted as of the end of the
year.
This group of liability accounts showed an increase of P15.44 billion or 30.99
percent from last years P49.82 billion. This was due to the increase in five accounts:
Due to Other GOCCs P11.53 billion, Due to National Treasury P2.67 billion, Due
to LGUs P666.04 million, Due to BIR P448.04 million, and Due to Philhealth
P383.52 million. The combined decrease in two accounts: Due to GSIS P144.66
million, and Due to PAG-IBIG P113.63 million totaled P258.29 million.

Due to National Treasury amounting to P22.28 billion represents 34.14


percent of the total inter-agency payables. This account pertains to unremitted
income collected by NGAs that accrued to the General Fund of the NG.
Of this amount, P10.11 billion was reported by the DOF, particularly the
BIR P8.33 billion and the BOC P1.75 billion.
The DOE also reported P9.27 billion which represents government
share/royalties from service/operating contracts and other fees/charges/penalties.
The total amount of P2.91 billion was distributed among the other
departments/offices.

Due to BIR of P3.18 billion constitutes 4.87 percent of the total inter-agency
payables. This account refers to unremitted withholding taxes from salaries of
officers and employees and from claims of suppliers, contractors, and other
creditors.

Due to GSIS, PAG-IBIG and PHILHEALTH had balances of P4.67 billion,


P318.72 million and P883.78 million, respectively. These accounts which totaled

80

P5.88 billion represent 9.01 percent of the total inter-agency payables. They
pertain to unremitted deductions from salaries of government officials and
employees such as: mandatory contributions to GSIS for life and retirement
insurance premiums, PAG-IBIG and PHILHEALTH premiums, including
government shares, and various deductions for loan payments.

Due to Other GOCCs with an outstanding balance of P27.70 billion accounted


for 42.45 percent of inter-agency payables. It registered an increase of P11.53
billion or 71.28 percent from P16.17 billion in 2010. The increase was mainly due
to the NG subsidy and equity to GOCCs under the Disbursement Acceleration
Program for various projects. The DOF-BTR-GOP reported P23.26 billion or
83.99 percent of the total, the details are as follows:
Particulars

1. NG Subsidy and Equity to GOCCs under the


Disbursement Acceleration Program
2. Managed funds and escrow account held by the NG for
Bond Sinking Fund, DRF and other GOCCs
3. Collateral deposit of GOCCs under the 1992 Philippine
Financing Plan
4. Balance of proceeds from the drawing of the US$120.0
million Performance Bond/Irrevocable Standby Letter
of Credit put up by the Maynilad Water Services, Inc. to
secures its Concession Fee liabilities with MWSS
5. PCA collections
6. NG liability to the SSS relative to the accrued interest
due to delayed payment of dividends to PNB shares
Total

Amount (in
million pesos)

17,075.51
5,035.95
928.22

133.30
48.21
43.06
23,264.25

The DFA also reported P2.95 billion while the remaining balance of P1.47
billion was shared by the other departments/offices/agencies.

Due to LGUs of P6.22 billion constitutes 9.53 percent of the total inter-agency
payables. This consists of P4.16 billion trust funds administered by the DOE
under the Energy Regulatory 1-94 which was remitted by generation companies
and/or energy resource developers. These companies are mandated to set aside
one centavo per kilowatt-hour of the electricity sales as financial benefit of the
host community/local government unit to be used for the latters electrification,
development and livelihood, reforestation, watershed management, health and
environment enhancement projects. The amount also includes interest
earned/income from deposits/investments out of the fund which are exempted
from the requirement of accrual to the General fund and remittance to the National
Treasury.
The DBM also reported a huge balance of P1.57 billion. Of this amount,
P1.53 billion represents the outstanding funding requirements for the
implementation of the priority programs of various LGUs obligated for CYs 1999
to 2008.

81

The schedule of Inter-agency Payables by department/office/agency and by


account is shown in Schedule V-26, Volume I-B.

Intra-Agency Payables P 147.72 billion


Intra-agency payables are reciprocal accounts that subsist between the Central
Office, Regional Offices/Staff Bureaus and Operating Units, and other funds within
the agency which were not eliminated at yearend. After the overall elimination
process, Intra-Agency Payables of P147.72 billion showed an enormous increase of
P140.51 billion or 1,949.27 percent from last years level of P7.21 billion. The Due to
Other Funds, with a balance of P144.67 billion, increased by P141.38 billion, while
the Due to Operating Units with a balance of P2.76 billion decreased by P1.16 billion.
The Due to Other Funds reported by the DOF-BTr-GOP in the amount of
P137.36 billion represents NG borrowings from the Bond Sinking Fund.

Other Liability Accounts P85.47 billion


The Other Liability Accounts of the NG comprised: Other Payables P56.82
billion or 66.48 percent, Tax Refunds Payable P12.50 billion or 14.62 percent,
Performance/Bidders/Bail Bonds Payable P10.34 billion or 12.10 percent and
Guaranty Deposits Payable P5.80 billion or 6.79 percent. Table V.1-17 shows the
departments/offices with Other Liability Accounts.
Table V.1-17 Departments/Offices With Other Liabilities
Amount
Percent
(in
million
pesos)
Department/Office
Distribution
Finance
State Universities and Colleges
The Judiciary
Transportation and Communications
Public Works and Highways
National Defense
Education
Justice
Health
Labor and Employment
Other Departments/Offices
Total

32,805.60
12,409.94
8,748.37
5,353.00
4,157.00
4,110.54
3,385.78
3,336.07
2,202.64
1,965.77
6,991.99
85,466.70

Difference between totals and sum of components is due to rounding off

82

38.38
14.52
10.24
6.26
4.86
4.81
3.96
3.90
2.58
2.3
8.18
100.00

The DOF reported the biggest Other Liability Accounts in the amount of
P32.81 billion or 38.38 percent of the total. Of this amount, P16.01 billion was
reported by the BTr-GOP of which P15.97 billion pertains to the following:
Particulars
1. Forfeited Swiss Deposits
2. 20% Final Tax Withheld on Peace Bonds (10 year )coupon bonds due Oct. 2011)
3. Payments of GOCCs for servicing of their foreign loans
4. Emergency Guerilla Currency Notes (RA369)
5. Contributions to FFIs
6. Backpay Rights Sinking Fund (RA897)
7. Backpay Rights Sinking Fund (RA304)
8. Others
Total

Amount
(in million
pesos)
10,531.97
4,966.21
395.53
31.71
26.20
22.41
1.11
0.20
15,975.35

The BIR, the BOC, and the CDA also reported Other Liabilities of P7.69
billion, P7.90 billion, and P992.99 million, respectively.
The SUCs shared P12.41 billion or 14.52 percent of Other Liabilities. Of this
amount, P 10.26 billion belonged to the UP.
Other Liabilities of the Judiciary totaled P8.75 billion or 10.24 percent. The
Supreme Court of the Philippines and Lower Courts reported P7.74 billion for cash
bond received to guarantee faithful performance of contracts with the government,
bidders bonds, bail bonds, rental deposits, consignation and other fiduciary fees
collected.
Other Liabilities of the DOTC amounting to P5.35 billion or 6.26 percent
comprises mainly of Other Payables in the amount of P4.49 billion and Guaranty
Deposits of P853.03 million. Other Payables of P2.05 billion, reported by the DOTCOSEC, includes P1.89 billion pertaining to collections from the operation of the
EDSA MRT 3 to be used for the payment of rental/equity and maintenance fee and
other payments enumerated in the agreement to build, operate and transfer. The LTO
also reported P2.43 billion in Other Payables which represents collected
computerization fees held in escrow on behalf of the LTO-IT project proponent,
STRADCOM Corporation.
The DPWH balance for this liability group summed up to P4.16 billion or 4.86
percent. Of this amount, the Regional Offices reported P2.57 billion consisting mainly
of Guaranty Deposits Payable of P2.21 billion. Moreover, of the total Other Liabilities
reported by the DPWH, P1.12 billion was classified as Other Payables which includes
claims of employees for reserved leaves and terminal pay, and allowable deductions
in the compensation of employees payable to private companies, claims of public and
private establishments for the refund of cash bonds posted in securing excavation
permits and deposits for sub-soil exploration.
Under the DND, PVAO reported Other Payables amounting to P2.78
billion for pension payments where the liquidation of actual remittances are not yet
submitted by the bank to PVAO. During the year, disbursements intended for
83

remittance to pensioners accounts are not deducted from Other Payables until receipt
of the bank certification that such have already been remitted to the pensioners.

Loans Payable Domestic, Current- P297.38 billion


This account as reported by the DOF-BTr-GOP pertains to the current portion
of outstanding Treasury Bills. It represents 41.87 percent of the total Current
Liabilities.

5.1.2.2 Long-Term Liabilities P4.645 trillion


Total Long-term Liabilities of P4.645 trillion increased by P465.97 billion or
11.15 percent compared to the 2010 level of P4.179 trillion. This was mainly due to
the increase in Bonds Payable, Domestic P388.39 billion, Bonds Payable, Foreign
P43.14 billion, and Loans Payable, Foreign P36.75 billion. It may be noted
however, that there was a decrease in Loans Payable, Domestic P2.38 billion. Table
V.1-18 shows the components of the Long-term Liabilities with comparative figures
for 2010.
Table V.1-18 Comparative Components of Long-term Liabilities
2011
2010
Increase/(Decrease)
Amount
Percent
Amount
Amount
Particulars
Per(in million
Distribu(in million
(in million
cent
pesos)
tion
pesos)
pesos)
Bonds Payable,
Domestic
2,563,093.56
55.18 2,174,701.89 388,391.67
17.86
43,136.99
Bonds Payable, Foreign 1,214,221.20
26.14 1,171,084.20
3.68
866,200.19
36,747.68
Loans Payable, Foreign
18.65
829,452.51
4.43
Loans Payable,
Domestic
1,141.27
0.02
3,522.16
(2,380.90) (67.60)
Other Long-term
Liabilities
78.17
0.00
12.35
65.82 532.98
14.23 114.13
Mortgage Payable
26.69
0.00
12.46
Total

4,644,761.08

100.00

4,178,785.58

465,975.49

Difference between totals and sum of components is due to rounding off

Bonds Payable Domestic of P2.563 trillion or 55.18 percent of the total Long-term
Liabilities represents Treasury Bonds issued domestically by the National
Government.

Bonds Payable Foreign of P1.214 trillion or 26.14 percent of the total long-term
liabilities corresponds to offshore bond flotation of the Republic of the Philippines.

Long-term Payables were mostly reported by the BTr-GOP. It fully accounted for
Bonds Payables Domestic and Foreign. Likewise, the BTR-GOP shared P865.74
billion or 99.95 percent of the total Loans Payable Foreign.

84

A detailed discussion on National Government Debt reported by the DOF-BTrGOP is presented on pages 121 to 138 of this report.
5.1.2.3 Deferred Credits P27.06 billion
At the close of the year, Deferred Credits amounted to P27.06 billion,
showing an increase of P427.73 million or 1.61 percent from last years balance of
P26.63 billion. The departments/offices which reported substantial balances are: DOF
P21.10 billion, OEO P4.23 billion, and SUCs P1.17 billion.
Among the agencies under the DOF, the PMO reported P14.24 billion
pertaining to the installment sale of transferred assets. The BTr also reported P6.81
billion, details of which are as follows:
Amount
(in million pesos)
4,961.95

Nature

1. Premiums of issuance of bonds offshore


2. Proceeds from ROPs issuance of Debt Exchange Warrants
which entitles the holders during exercise period to tender
dollar/euro bonds
3. Discounts on investments in Treasury Bonds and ROP Bonds
held by BSF, SGF, SSF, MWSS-SRF and NG
4. Contra account in setting up receivable account from DBP and
PMO
5. Balance of advance guarantee fee/FXRCF
6. Converted balance under Fund 105 which had remained
dormant for over 30 years. (This was already requested for
write-off)
7. Balance of advance dividend remittance
Total

1,471.58
529.02
44.61
7.29

0.57
(206.31)
6,808.71

Other OEO contributed P4.23 billion of Deferred Credits. Among the


agencies, the CHED accounted for P4.22 billion which was booked up in HEDF
Central Office for contributions from PTA, PRC, PAGCOR and unexpended balances
of programs/projects implemented by the HEDF. The amount of P21.75 million
reported by Region V is the credit counterpart of loans receivable from Study Now
Pay Later Program.
For the SUCs, the main contributors to this account are: UP P461.89
million; CSCST P112.86 million; VSU P53.75 million; MUST P42.80 million;
CNSC P39.85 million and CavSU P30.91 million.
Of the P106.75 million reported by the DA, P85.10 million was accounted by
the OSEC as a reclassification from income account for loss of assets due to closure
of conduit rural banks in the books of the Bureau of Animal Industry.

85

5.3 EQUITY - (P 2.083 trillion)


The equity of the NG as of December 31, 2011 is a negative balance of P2.083
trillion reflecting an increase of negative P203.00 billion from the negative balance of
P1.880 trillion in the previous year. The increase in the negative balance was brought
about by several factors, namely: Net loss in operation of P13.62 billion, adjustments
related to prior years transactions of negative P76.76 billion, completed public
infrastructure and reforestation projects of P31.60 billion and P 952.19 million,
respectively, and remittance to the National Treasury from Assets Disposal of P2.59
million.
Under the NGAS, public infrastructures and reforestation projects which are
intended for public use, shall be transferred to the Registry of Public Infrastructures and
Registry of Reforestation Projects upon completion, as these are no longer considered
assets of the Implementing Agencies. Following this policy, the completed projects are
dropped from the books and the corresponding costs are deducted from the Government
Equity. Table V.1-19 shows the amount of completed public infrastructures and
reforestation projects by department/office/agency during the year.
Table V.1-19 Departments/Offices/Agencies with Completed Public
Infrastructures and Reforestation Projects
(in million pesos)
Public
Reforestation
Department/Office
Infrastructures
Projects
Public Works and Highways
17,368.21
Pasig River Rehabilitation Commission
6,356.78
Agriculture
5,640.82
Transportation and Communications
1,512.97
National Defense
209.81
Agrarian Reform
138.67
Autonomous Region in Muslim Mindanao
121.85
Interior and Local Government
57.41
Environment and Natural Resources
52.26
923.08
State Universities and Colleges
49.16
29.11
Other Executive Offices
28.83
Health
22.10
Tourism
17.37
Metro Manila Development Authority
16.95
National Economic and Development Authority
4.92
Social Welfare and Development
0.45
Science and Technology
0.37
Total
31,598.93
952.19
Difference between totals and sum of components is due to rounding off

This years completed Public Infrastructures of P31.60 billion decreased by


P9.91 billion or 23.87 percent from the CY 2010 of P 41.51 billion.

86

Through the years, the DPWH, being the implementing arm of the NG for
infrastructure projects of the country, has always been reporting the highest completed
public infrastructures, and for this year it totaled P17.37 billion or 54.96 percent of the
completed public infrastructures. The PRRC, DA, and DOTC followed with P6.36
billion or 20.12 percent, and P5.64 billion or 17.85 percent, and P1.51 billion or 4.79
percent, respectively.
Completed Reforestation Projects of P952.19 million, showed an increase of
P203.29 million or 27.14 percent from the previous years balance of P748.90 million.
For the last three years, only the DENR and the SUCs have been reporting
completed reforestation projects. The DENR, being the agency responsible for the care
and protection of forest lands and the conservation of natural resources, reported
P923.08 million or 96.94 percent while the SUCs, accounted for P29.11million or 3.06
percent.

87

5.2 Statement of Income and Expenses


The commendable hard work of the major revenue collecting agencies of the
National Government and the clear policy directions set by the incumbent President of the
Republic turned to an impressive growth in government income and revenues of 12.49
percent compared to last years growth of 7.67 percent. Congruently, the effective but
prudent management of government resources displayed a slightly lower growth rate in
current operating expenses of 11.34 percent.
This years robust performance in revenue/income generation by the National
Government resulted to a total income/revenue of P1.399 trillion while total expenses
amounted to P1.384 trillion. The total Current Operating Expenses incurred for the year
of P709.72 billion brought about income from operations of P689.29 billion. On the
other hand, income after subsidies of P298.03 billion ensued after deducting the total
financial support to local government units, government owned and/or controlled
corporations and non-government/peoples organizations of P391.27 billion. The
deceleration in financial expenses from last years P304.52 billion to current years
P282.77 billion, contributed to the governments reduced net loss of P13.62 billion after
considering net subsidy to NGAs of P2.79 billion and negative net gains of P31.67
billion. The comparison of the 2011 revenue/income and expenses with 2010 data is
shown in Table V.2-1.
Table V.2-1 Income/Revenue, Expenses, Subsidies and Net Loss
Amount (in million pesos)
Particulars
Increase
2011
2010
(Decrease)
Income/Revenue
1,399,016.71
1,243,676.54
155,340.17
Tax Revenue
1,221,943.75
1,090,909.32
131,034.42
Non-Tax Revenue/General Income
177,072.96
152,767.22
24,305.75
Less: Current Operating Expenses
709,723.67
637,457.27
72,266.40
Personal Services
512,110.99
464,219.66
47,891.33
Maintenance and Other
Operating Expenses
197,612.68
173,237.60
24,375.07
Income from Current Operations
689,293.04
606,219.27
83,073.77
Subsidies to
(391,266.57)
(340,097.09) (51,169.48)
Local Government Units (net)
(317,896.69)
(281,547.02) (36,349.67)
Government Owned/Controlled
Corporations
(72,842.24)
(57,104.69) (15,737.55)
Non-Government Organizations/
Peoples Organizations
(527.64)
(1,445.38)
917.74
Income after Subsidies
298,026.47
266,122.18
31,904.29
Less: Financial Expenses
282,771.72
304,516.60
21,744.88)
Income/(Loss) before Other
Income/Expense Items
15,254.75
(38,394.42)
53,649.17
Net Subsidy From/(To) NGAs
2,794.30
(35,470.66)
38,264.96
Net Gain/(Loss)
(31,674.01)
49,781.96
(81,455.96)
Net Income/(Loss)
(13,624.95)
(24,083.12)
10,458.17
Difference between totals and sum of components is due to rounding off.

88

Percent
12.49
12.01
15.91
11.34
10.32
14.07
13.70
15.05
12.91
27.56
(63.49)
11.99
(7.14)
(139.73)
(107.88)
(163.63)
(43.43)

5.2.1 Revenue/Income P1.399 trillion


The total revenue/income of P1.399 trillion for the year increased by 12.49
percent compared to last years P1.244 trillion. The progress in the total revenue for the
year of P155.34 billion was contributed both by the accelerated tax revenue and non-tax
revenue/general income collections with growth rate of 12.01 percent and 15.91
percent, respectively. The composition of the total revenue/income is tax revenue
collections of P1.222 trillion or 87.34 percent and non-tax revenue of P177.07 billion or
12.66 percent. The cumulative revenue/income collections is 99.13 percent of the
P1.411 trillion projected level for the year. (Source of data on projected
revenue/income: 2012 Budget of Expenditures and Sources of Financing)
5.2.1.1 Tax Revenue P1.222 trillion
Chart V.2-1 Comparison of Actual and
Programmed Revenue
(in billion pesos)

1,221.94

1,273.24

Actual
Programmed

177.07

Tax

Non-Tax

138.06

The Bureau of Internal Revenue (BIR) and


the Bureau of Customs (BOC), the main tax
revenue
agencies,
contributed
to
the
improvement of total tax revenue collections by
12.01 percent. The tax revenue performance of
all tax collecting agencies of P1.222 trillion was
short by P51.30 billion or 4.03 percent of the
programmed total tax revenue of P1.273 trillion.
The projected level for non-tax revenue of
P138.06 billion in 2011 compared with the
actual non-tax revenue collections of P177.07
billion presents a surplus of P39.01 billion or
28.25 percent. Chart V.2-1 presents the actual
and projected revenue/income. (Source of data on
projected revenue/income: 2012 Budget of Expenditures
and Sources of Financing)

Of the total tax revenue, P923.82 billion or 75.60 percent was shared by the BIR
and P264.83 billion or 21.66 percent by the BOC including non-cash revenue from the
Tax Expenditure Fund (TEF) of P9.41 billion and the rest by other tax collecting
agencies, namely: the DOTC-LTO, Motor Vehicle Users Charge (MVUC); DILG-BFP,
Fire Code Tax; DOJ-BI, Immigration Tax; DENR-OSEC, Forest Charges; and OEOCHED & NCCA, Other Taxes. This year, tax revenue represents 87.34 percent of the
aggregate consisting of: Taxes on Goods and Services P528.70 billion or 43.27 percent;
Income Taxes P426.28 billion or 34.89 percent; Final Taxes P130.95 billion or 10.72
percent; Import Duties P48.80 billion or 3.99 percent; Property Taxes P8.95 billion or
0.73 percent; Other Taxes P65.27 billion or 5.34 percent; and Fines and Penalties
P12.98 billion or 1.06 percent.
Based on the financial reports submitted by the main tax revenue collecting
agencies, current years tax collections of the BIR exceeded last years collection of
P822.70 billion by P101.12 billion or 10.95 percent, while the BOC reported an increase
of P7.97 billion or 3.10 percent over last years collection of P256.86 billion.

89

Taxes on Net Income and Profits P557.23 billion

The total tax revenue collections pertaining to taxes on net income and profits
contributed the biggest share at P557.23 billion or 45.60 percent. The increase of P80.69
billion was mainly due to the increase of income tax on corporations and final tax of
P54.68 billion and P21.80 billion, respectively. Despite the total increase for the year
under this tax category, it was not sufficient for the tax collecting agencies to meet the set
target at P569.52 billion or a shortfall of P12.29 billion. (Source of set target: BESF for
FY 2012) Table V.2-2 shows the comparative Income Taxes for calendar years 2011 and
2010.
Table V.2-2 Comparative Income Taxes, By Source
Amount (in million pesos)
Increase
Particulars
Percent
2011
2010
(Decrease)
Corporations
269,731.68 215,052.31
54,679.37
25.43
Individuals
156,394.74 152,252.69
4,142.05
2.72
Final Tax
130,948.46 109,144.28
21,804.18
19.98
Partnerships
156.71
94.51
62.20
65.82
Total
557,231.59 476,543.79
80,687.80
16.93
Difference between totals and sum of components is due to rounding off.

Taxes on Goods and Services P528.70 billion

This year, tax collections on goods and services remained the second largest
provider at P528.70 billion or 43.27 percent of the total tax revenue. This is higher by
P226.61 billion or 75.01 percent than last years P302.10 billion. This category consists
of tax collections on General Sales, Turnover or VAT; Excises on Goods; Taxes on
Services and Taxes on the Use of Goods or Property or Permission to Perform Activities.
The impressive growth was fueled by the increase in Turnover or VAT collections, as
reflected in the reports submitted by the BOC. Table V.2-3 shows the comparative Taxes
on Goods and Services for calendar years 2011 and 2010.
Table V.2-3 Comparative Taxes on Goods and Services, By Source
Amount (in million pesos)
Increase
Particulars
Percent
2011
2010
(Decrease)
General Sales, Turnover or VAT
422,290.97 224,332.70
197,958.27
88.24
Excise Tax on Articles
96,937.87
67,593.99
29,343.88
43.41
Taxes on the Use of Goods, Property,
Permission to Perform Activities
(6.82)
__9,476.14
10,169.84
(693.69)
Total
528,704.98 302,096.53
226,608.45
75.01
Difference between totals and sum of components is due to rounding off.

Taxes on International Trade and Transactions P48.80 billion

As reported by the BOC, there was a sharp decline on the collection of Import
Duties from last years P215.81 billion to this years P48.80 billion or a decrease of
P167.01 billion or 77.39 percent.

90

Other Taxes P65.27 billion

Documentary Stamp Tax, the main component of Other Taxes amounting to P49.08
billion or 75.19 percent was reported mostly by the BIR at P48.41 billion and the BOC at
P664.93 million. Other components are: Tax on Forest Products P45.53 million or 0.07
percent as reported by DENR-OSEC; Immigration Tax P61.19 million or 0.09 percent
as reported by DOJ-Bureau of Immigration. Also included in this category in the amount
of P16.09 billion is Other National Taxes which represent the undistributed amount
lumped in this account by the BTr.

Property Taxes P8.95 billion

The BIR, the lone collector of Property Taxes, made a total collection on property
transfers amounting to P8.95 billion for the year. This is 39.66 percent lower than last
years collection of P14.84 billion. In this tax category, Capital Gains Tax contributed the
highest at P8.03 billion or 89.65 percent. Table V.2-4 shows the comparative components
of Property Taxes.
Table V.2-4 Comparative Components of Property Taxes
Amount (in million pesos)
Increase
Particulars
2011
2010
(Decrease)
Capital Gains Tax
8,027.17
12,998.05
(4,970.87)
Estate Tax
552.68
1,346.99
(794.31)
Donors Tax
374.17
493.44
(119.27)
Total
8,954.03
14,838.48
(5,884.46)

Percent
(38.24)
(58.97)
(24.17)
(39.66)

Difference between totals and sum of components is due to rounding off.

Fines and Penalties, National Taxes P12.98 billion

The amount of P12.98 billion, representing fines and penalties on late payment of
national taxes, ballooned by P10.89 billion or more than five times from last years P2.08
billion. It was collected mainly by the BOC at P11.79 billion or 90.84 percent. On the
other hand, the BIR collected P1.18 billion or 9.09 percent.

5.2.1.2

Non-Tax Revenue (General Income) P177.07 billion

The collection for Non-Tax Revenue/General Income rose by P24.31 billion or


15.91 percent from last years P152.77 billion. General Income consists of: Business
Income P45.43 billion or 25.66 percent; Service Income P32.03 billion or 18.09
percent; Permits and Licenses P7.74 billion or 4.37 percent; and Other Income of
P91.87 billion or 51.88 percent.
The registered growth of non-tax revenue was contributed mainly by the accelerated
dividend and interest income as reported by the BTr; income from grants and donations
and registration fees as reported by various national government agencies; and passport
and visa fees as reported by the Department of Foreign Affairs and the Department of
Justice (Bureau of Immigration).

91

Service Income P32.03 billion

Service Income posted a decrease of


P42.13 billion or 56.81 percent lower from
last years collections of P74.16 billion.
Other Services Income of P18.13 billion or
56.60 percent is the biggest component of
the generated service income. The other
components that contributed most are:
Passport and Visa Fees P4.94 billion;
Medical, Dental and Laboratory Fees
P2.01 billion; Processing Fees P1.90
billion; and Clearance and Certification
Fees P1.83 billion.
Table V.2-5 shows the departments/
offices with substantial amount of Service
Income.

Table V.2-5 Departments/Offices


Which Reported Service Income
(in million pesos)
Department/Office
Amount
Finance
21,535.84
State Universities and Colleges
3,354.54
Health
1,888.36
Interior and Local Government
1,795.44
The Judiciary
1,769.87
Labor and Employment
341.83
Foreign Affairs
295.92
Other Executive Offices
224.45
Civil Service Commission
194.16
Education
187.74
Other Departments/Offices
441.39
32,029.53
Total
Difference between totals and sum of components is due to
rounding off.

Other Income P91.87 billion

During the year, Other Income registered an increase of P24.71 billion or 36.79
percent from last years figure of P67.17 billion. The aggregate Other Income includes
among others: P36.75 billion Interest Income; P29.13 billion Dividend Income;
P13.87 billion Share from PAGCOR/PCSO; and the other components shared the
balance of P12.12 billion as shown in Table V.2-6.
Table V.2-6 Components of Other Income
Amount
Percentage
(in million
Particulars
Distribution
pesos)
Interest Income
36,750.81
40.00
Dividend Income
29,133.40
31.71
Share from PAGCOR/PCSO
13,867.32
15.09
Income from Grants and Donations
6,337.99
6.90
Miscellaneous Income
4,798.03
5.22
Insurance Income
535.13
0.58
Internal Revenue Allotment
236.58
0.26
Other Fines and Penalties
134.85
0.15
Sale of Confiscated/Abandoned/Seized Goods
and Properties
78.71
0.09
Share from National Wealth
0.49
a
Share from Expanded Value Added Tax (EVAT)
b
a
________

Total

91,873.31

a - Below 0.005 percent


b - Below P5,000
Difference between totals and sum of components is due to rounding off.

92

______

100.00

Interest Income P36.75 billion

Various departments/offices Interest


Income on loans receivables, investments,
bank deposits and NG advances for GFIs
and GOCCs debt service payments rose
from P33.96 billion last year to P36.75
billion which resulted to an increase of
P2.79 billion or 8.22 percent.
Interest Income of the DOF-BTr of
P35.64 billion constitutes 96.97 percent of
the
total
Interest
Income.
The
departments/offices which reported Interest
Income are shown in Table V.2-7.

Table V.2-7 Departments/Offices Which


Reported Interest Income
(in million pesos)
Department/Office

Amount

Finance
State Universities and Colleges
Other Executive Offices
National Defense
Agriculture
Trade and Industry
Energy
The Judiciary
Education
Other Departments/Offices
Total

36,189.38
324.96
63.97
60.74
23.79
21.14
20.88
16.97
8.19
20.79
36,750.81

Share from PAGCOR/PCSO P13.87 billion

This represents share of government agencies from receipts of Philippine


Amusement and Gaming Corporation (PAGCOR) and Philippine Charity Sweepstakes
Office (PCSO). It registered a slight increase of P716.15 million or 5.45 percent
compared with last years P13.15 billion.
The DOF-BTr, one of the recipients, received the highest at P11.44 billion or 82.48
percent, followed by OEO-Presidential Management Staff at P1.86 billion or 13.38
percent and the OEO-Philippine Sports Commission at P574.87 million or 4.15 percent.

Dividend Income P29.13 billion

The national government earned Dividend Income of P29.13 billion from equity
investments in GFIs and GOCCs. Dividends remitted by the GFIs and GOCCs to the BTr
increased by P17.12 billion or 142.48 percent compared to last years P12.01 billion.
Table V.2-8 GOCCs/GFIs with Dividend
Remitted to the DOF-BTr
Amount
GOCC/GFI
(in million
pesos)
Bangko Sentral ng Pilipinas
14,234.92
Land Bank of the Philippines
4,426.29
Development Bank of the Philippines
2,844.00
PNOC Exploration Corporation
2,498.34
Manila International Airport Authority
1,206.26
Philippine Ports Authority
961.29
Philippine Deposit Insurance Corporation
581.26

93

Percentage
Distribution
48.86
15.19
9.76
8.58
4.14
3.30
2.00

Table V.2-8 continued


GOCC/GFI
Public Estate Authority
Philippine National Oil Company
Mactan Cebu International Airport Authority
Philippine Economic Zone Authority
Philippine Export-Import Credit Agency
Philippine Retirement Authority
Manila Gas Corporation
National Development Company
Clark Development Corporation
Philippine National Lines
National Livelihood Development Corporation
Social Housing and Finance Corporation
Cebu Ports Authority
Food Terminal Incorporated
National Home Mortgage Finance Corporation
National Electrification Administration
National Housing Authority
National Irrigation Administration
PHIVIDEC Industrial Authority
Laguna Lake Development Authority
Pinagkaisa Realty Corporation
Philippine Fisheries Development Authority
PNOC Shipping and Transport Corporation
Other GOCCs/GFIs
Total

Amount
(in million
pesos)
543.29
480.33
233.37
221.01
150.00
140.55
115.94
100.00
100.00
56.99
52.61
47.77
40.00
26.28
18.00
17.46
9.72
6.85
6.77
2.76
2.51
2.38
1.83
3.30
29,132.10

Percentage
Distribution
1.86
1.65
0.80
0.76
0.51
0.48
0.40
0.34
0.34
0.20
0.18
0.16
0.14
0.09
0.06
0.06
0.03
0.02
0.02
0.01
0.01
0.01
0.01
0.01
100.00

Difference between totals and sum of components is due to rounding off.

Table V.2-8 shows the top ten corporations and other GOCCs which remitted
dividends to the National Treasury totaling P29.13 billion as reported by the DOFBTr. The Bangko Sentral ng Pilipinas remitted the biggest amount of dividends at
P14.23 billion or 48.86 percent, while Land Bank of the Philippines and Development
Bank of the Philippines contributed P4.43 billion and P2.84 billion, respectively.

Income from Grants and Donations P6.34 billion

Income from Grants and Donations received in cash and in kind from foreign and
domestic sources accounted for P6.34 billion, higher by P1.27 billion or 25.08 percent
than last years P5.07 billion.
Table V.2-9 shows the departments/offices which received grants and donations
during the year. DOST-Industrial Technology Development Institute topped the list with
P1.62 billion or 25.62 percent of the aggregate amount.

94

Table V.2-9 Departments with


Income from Grants and Donations
Amount
Percentage
Department/Office
(in million pesos) Distribution
Science and Technology
1,653.61
26.09
Finance
1,417.72
22.37
Education
1,371.36
21.64
Social Welfare and Development
641.85
10.13
Health
583.64
9.21
State Universities and Colleges
191.46
3.02
National Defense
86.07
1.36
Other Executive Offices
54.63
0.86
Interior and Local Government
51.70
0.82
Justice
51.08
0.81
Other Departments/Offices
234.86
3.71
Total
6,337.99
100.00
Difference between totals and sum of components is due to rounding off.

For this year, the account


displayed an increase of P2.72 billion
or 130.81 percent from previous
years P2.08 billion.
The DOF
recorded the highest at P3.33 billion
or 69.45 percent of the total
Miscellaneous Income. Table V.210 presents the departments and
offices which reported Miscellaneous
Income in calendar year 2011.

Table V.2-10 Departments/Offices which


Reported Miscellaneous Income
(in million pesos)

Miscellaneous Income P4.80


billion

Department/Office
Finance
State Universities and Colleges
Public Works and Highways
Labor and Employment
Health
National Defense
Education
Civil Service Commission
Other Executive Offices
Other Departments/Offices
Total

Amount
3,332.12
507.54
431.81
149.76
135.80
121.85
37.17
19.17
13.10
49.71
4,798.03

Business Income P45.43 billion

The uptrend in Business Income resulted to an increase of P34.45 billion or more


than three times than the past years P10.98 billion. Other Business Income recorded by
various departments/offices comprises the bulk of this account, registering the amount of
P34.48 billion or 75.90 percent of the total Business Income. The other main components
of the account are Tuition Fees and Hospital Fees collected by SUCs and hospitals,
respectively. Tuition Fees of P5.51 billion, which accounted for 12.13 percent of the total
Business Income, posted an increase of P510.65 million or 10.21 percent compared to last
years P5.00 billion. On the other hand, Hospital Fees of P3.05 billion which presented
an increment of P230.59 million or 8.18 percent from last years P2.82 billion was 6.71
percent of the total Business Income. Table V.2-11 shows the components of Business
Income.

95

Table V.2-11 Components of Business Income


Particulars
Other Business Income
Tuition Fees
Hospital Fees
Sales Revenue (Net)
Fines and Penalties Business Income
Rent Income
Income from Dormitory Operations
Printing and Publication Income
Income from Canteen Operations
Income from Communication Facilities
Income from Waterworks System
Income from Markets
Landing and Parking Fees
Income from Slaughterhouses
Income from Transportation System

Amount
Percentage
(in million pesos) Distribution
34,483.00
75.90
5,511.69
12.13
3,048.29
6.71
734.54
1.62
703.52
1.55
550.90
1.21
127.65
0.28
115.90
0.26
107.33
0.24
38.35
0.08
6.42
0.01
1.42
a
1.03
a
0.35
a
0.27
a
___________________

______________

Total
45,430.65
100.00
a Below 0.005 percent.
Difference between totals and sum of components is due to rounding off.

Permits and Licenses P7.74 billion

Permits and Licenses increased by P7.28 billion or more than fifteen times from last
years P459.62 million. The biggest component of the account pertains to Registration
Fees amounting to P2.59 billion or 33.47 percent. Based on the Reports of Income of the
Departments/Offices, the highest contributors of Registration Fees are: OEO P1.52
billion; DTI P437.80 million; DOF P215.82 million; SUCs P139.82 million; and
DOH P102.71 million. Table V.2-12 shows the components of Permits and Licenses.
Table V.2-12 Components of Permits and Licenses
Amount
Percentage
Particulars
(in million pesos) Distribution
Registration Fees
2,590.24
33.47
Fines and Penalties
2,215.31
28.62
Other Permits and Licenses
1,900.71
24.56
Franchising and Licensing Fees
669.54
8.65
Permit Fees
363.20
4.69
Fishery Rental Fees
0.46
0.01
Total
7,739.47
100.00
Difference between totals and sum of components is due to rounding off.

5.2.1.3

Breakdown of Income, By Department, By Region and By Source

Under the NGAS, NGAs act as collecting agents of the NG, thus income collections
are remitted to the National Treasury. For calendar year 2011, of the total revenue of
P1.399 trillion, 97.58 percent or P1.365 trillion was recorded in the BTr GOP books
representing remittances of various NGAs. The remaining P33.88 billion or 2.42 percent
was reported under RA Books pertaining to collections of various NGAs both with and
without authority to use their income. Table V.2-13 below shows the breakdown of
income by department/office and by book (NG and RA).

96

Table V.2-13 Breakdown of Income, by Department/Office and by Book


Department/Office

Total

Amount (in million pesos)


NG Books
RA Books

Legislative Branch
Congress of the Philippines
Executive Branch
Office of the President
Office of the Vice-President
Agrarian Reform

1.10

1.10

34.02
0.01
16.54

34.02
0.01
16.54

275.69
190.85
1,669.03
12,042.91
22.27

275.69
190.85
1,669.03
12,042.91
22.27

99.35
1,365,692.48
296.09
6,643.57
1,855.49

1,365,132.54
-

99.35
559.94
296.09
6,643.57
1,855.49

111.91
617.69
596.46
499.69
1,670.77

111.91
617.69
596.46
499.69
1,670.77

646.67
67.56
420.55
12.54

646.67
67.56
420.55
12.54

17.38
93.04
2,924.11
387.45
0.63

17.38
93.04
2,924.11
387.45
0.63

1,792.59

1,792.59

215.34
62.97

215.34
62.97

13.69
9.78

13.69
9.78

8.57
7.89

8.57
7.89

Total
1,399,016.71
Difference between totals and sum of components is due to rounding off.

1,365,132.54

33,884.17

Agriculture
Budget and Management
Education
State Universities and Colleges
Energy
Environment and Natural Resources
Finance
Foreign Affairs
Health
Interior and Local Government
Justice
Labor and Employment
National Defense
Public Works and Highways
Science and Technology
Social Welfare and Development
Tourism
Trade and Industry
Transportation and Communications
National Economic and Development Authority
Presidential Communications Operations Office
Other Executive Offices
Metropolitan Manila Development Authority
Pasig River Rehabilitation Commission
Judicial Branch
The Judiciary
Constitutional Offices
Civil Service Commission
Commission on Audit
Commission on Elections
Office of the Ombudsman
Other Independent Offices
Commission on Human Rights
Autonomous Region in Muslim Mindanao

97

Of the total income of the NG, NCR reported a total of P1.216 trillion or 86.90
percent, followed by Region IV with P59.23 billion and Region III with P51.32 billion.
Table V.2-14 shows the Regional Breakdown of Income by Source.
Table V.2-14 Regional Breakdown of Income by Source
Amount (in million pesos)
Region
Tax
Non-Tax
Total
Revenue
Revenue
National Capital Region
1,215,782.44 1,062,633.89
153,148.55
Region I
7,098.88
5,614.50
1,484.37
Cordillera Administrative Region
2,140.24
1,387.51
752.73
Region II
3,464.85
2,313.62
1,151.23
Region III
51,317.45
48,616.10
2,701.35
Region IV
59,226.95
56,076.42
3,150.54
Region V
4,128.70
2,824.76
1,303.94
Region VI
5,436.74
3,308.84
2,127.91
Region VII
15,270.44
13,465.20
1,805.24
Region VIII
3,859.55
2,845.77
1,013.78
Region IX
2,672.43
1,794.28
878.16
Region X
9,518.31
7,925.04
1,593.27
Region XI
11,162.84
9,149.05
2,013.79
Region XII
3,708.74
2,046.74
1,662.00
Region XIII
2,486.72
1,940.87
545.85
Autonomous Region in Muslim Mindanao
223.90
1.17
222.73
Foreign Service Posts
1,517.51
1,517.51
Total
1,399,016.71 1,221,943.75
177,072.96
Difference between totals and sum of components is due to rounding off.

Figures presented in the table are taken from the agencies Report of Income.
Details of Income/Revenue by department, by account and by region are presented in
Schedules 27 to 29, Volume I-B.
5.2.2 Expenses
Chart V.2-2 Expenses of the National
Government
(in billion pesos)

For the calendar year, the NG reported


total expenses of P1.384 trillion,
composed of: Current Operating Expenses
(COE) of P709.72 billion or 51.29 percent,
Financial
Financial Expenses (FE) P282.77 billion
Expenses
Current
or 20.43 percent and Subsidy to LGUs,
282.77
Operating
Expenses
GOCCs and NGOs/POs P391.27 billion
Subsidies
709.72
or 28.28 percent. This years amount is
391.27
higher by P101.69 billion or 7.93 percent
over last years P1.282 trillion. Among the
departments, the DOF reported the highest
amount at P374.61 billion or 27.07
percent, of which P282.42 billion or 75.39
percent pertains to FE and P72.65 billion
or 19.39 percent pertains to Subsidy to GOCCs. The DBM followed with P319.73 billion
or 23.11 percent, of which P317.22 billion or 99.22 percent pertains to Subsidy to LGUs.

98

5.2.2.1 Current Operating Expenses P709.72 billion


Total Current Operating Expenses of P709.72 billion consisting of Personal
Services P512.11 billion or 72.16 percent, and Maintenance and Other Operating
Expenses P197.61 billion or 27.84 percent, registered an increase of P72.27 billion or
11.34 percent from previous years level of P637.46 billion.
Of the aggregate, DepEd reported P206.84 billion or 29.14 percent, DND P112.38
billion or 15.83 percent and DILG P101.02 billion or 14.23 percent. The
departments/offices that reported biggest Current Operating Expenses are shown in Table
V.2-15.
Table V.2-15 Departments/Offices With Big
Current Operating Expenses
(in million pesos)
Percentage
Department/Office
Amount
Education
206,835.96
29.14
National Defense
112,384.23
15.83
Interior and Local Government
101,016.14
14.23
State Universities and Colleges
37,250.19
5.25
Social Welfare and Development
33,395.61
4.71
Health
23,486.77
3.31
Finance
19,525.45
2.75
Public Works and Highways
19,209.80
2.71
Transportation and Communications
18,576.47
2.62
The Judiciary
17,858.07
2.52
Other Departments/Offices
120,184.98
16.93
Total
709,723.67
100.00
Difference between sum and totals of components is due to rounding off.

5.2.2.1.1 Personal Services P512.11 billion


Total Personal Services of P512.11 billion posted an increase of P47.89 billion
or 10.32 percent compared to P464.22 billion of last year. This is due primarily to the
implementation of the 2nd and 3rd tranches of the modified Salary Schedule for
civilian personnel and the modified Base Pay Schedule for military and uniformed
personnel both provided under the Senate and House of Representatives Joint
Resolution No. 4, series of 2009, approved on June 17, 2009, and as mandated under
Executive Order No. 900, issued on June 23, 2010.
The major components of Personal Services are the following: Salaries and
Wages P271.37 billion or 52.99 percent, Other Compensation P116.23 billion or
22.70 percent, Other Personnel Benefits P93.19 billion or 18.20 percent and
Personnel Benefits Contributions P31.32 billion or 6.12 percent. The comparison of
the 2011 expenses for each component with the 2010 expenses is shown in Table V.216.

99

Table V.2-16 Comparative Components of Personal Services


(in million pesos)
Amount
Particulars
Increase
2011
2010
(Decrease)
Salaries and Wages
271,370.75 240,504.94
30,865.81
Other Compensation
116,234.46 115,534.62
699.84
Personnel Benefit Contributions
31,319.26
27,884.33
3,434.93
Other Personnel Benefits
93,186.52
80,295.78
12,890.75
Total
512,110.99 464,219.66
47,891.33

Percent
12.83
0.61
12.32
16.05
10.32

Difference between totals and sum of components is due to rounding off.

Among the departments/offices, DepEd reported the biggest spending for


Personal Services at P186.17 billion or 36.35 percent. The DND and DILG followed
with P95.73 billion and P90.35 billion, respectively. Table V.2-17 exhibits the
departments/offices with huge expenses for Personal Services.
Table V.2-17 Departments/Offices With Big Expenses
for Personal Services
(in million pesos)
Department/Office
Amount
Percentage
Education
186,170.96
36.35
National Defense
95,728.96
18.69
Interior and Local Government
90,351.04
17.64
State Universities and Colleges
26,456.55
5.17
The Judiciary
15,082.39
2.95
Health
10,919.08
2.13
Public Works and Highways
8,173.29
1.60
Autonomous Region in Muslim Mindanao
7,860.55
1.53
Justice
7,499.55
1.46
Environment and Natural Resources
6,803.76
1.33
Other Departments/Offices
57,064.87
11.14
Total
512,110.99
100.00
Difference between sum and totals of components is due to rounding off.

5.2.2.1.2 Maintenance and Other Operating Expenses P197.61 billion


Total MOOE of P197.61 billion this year recorded an increase of P24.38
billion or 14.07 percent compared to last years P173.24 billion.
Among the
components, the biggest amounts were for: Donations P38.78 billion or 19.63
percent, Supplies and Materials Expenses P32.37 billion or 16.38 percent, Other
Maintenance and Operating Expenses P20.50 billion or 10.38 percent, Professional
Services P19.09 billion or 9.66 percent, and Repairs and Maintenance P16.93
billion or 8.57 percent.
Table V.2-18 shows the comparative details of Maintenance and Other
Operating Expenses.

100

Table V.2-18 Comparative Details of Maintenance and Other Operating Expenses


(in million pesos)
Amount
Particulars
Percent
Increase
2011
2010
(Decrease)
Donations
38,783.01
19,963.44
18,819.58
94.27
Supplies and Materials
Expenses
32,367.28
35,425.74
(3,058.46)
(8.63)
Other Maintenance and
Operating Expenses
20,503.60
20,634.77
(131.17)
(0.64)
Professional Services
19,092.89
14,048.96
5,043.93
35.90
Repairs and Maintenance
16,933.40
19,113.22
(2,179.82)
(11.40)
Taxes, Insurance Premiums
and Other Fees
14,326.55
10,228.05
4,098.50
40.07
Utility Expenses
9,898.36
9,345.73
552.63
5.91
Training and Scholarship
Expenses
7,978.96
7,198.50
780.47
10.84
Traveling Expenses
7,381.86
7,268.23
113.63
1.56
Rent Expenses
3,403.14
4,233.61
(830.47)
(19.62)
Membership Dues and
Contributions to
Organizations
2,965.09
1,042.15
1,922.93
184.52
Communication Expenses
2,716.50
2,633.36
83.15
3.16
Representation Expenses
1,954.49
1,685.90
268.58
15.93
Confidential, Intelligence,
Extraordinary and
Miscellaneous Expenses
1,617.85
2,790.82
(1,172.97)
(42.03)
Printing and Binding Expenses
1,178.62
1,235.85
(57.23)
(4.63)
Others
2,519.77
3,775.11
(1,255.35)
(33.25)
Sub-Total
183,621.36
160,623.43
22,997.93
14.32
Non-Cash Expenses
_13,991.31
_12,614.17
_1,377.14
10.92
Depreciation
13,922.69
12,565.60
1,357.09
10.80
Bad Debts
50.27
43.01
7.26
16.88
Obsolescence
18.36
5.56
12.79
229.98
14.07
Total
24,375.07
197,612.68
173,237.60
Difference between totals and sum of components is due to rounding off

Among the departments/offices, the DSWD reported the highest figure for
MOOE at P32.36 billion or 16.38 percent, and is higher by P22.08 billion or more
than twice compared to its previous years level of P10.28 billion. Table V.2-19
presents the departments/offices with big amounts of MOOE.

101

Table V.2-19 Departments/Offices With Big


Maintenance and Other Operating Expenses
(in million pesos)
Percentage
Department/Office
Amount
Social Welfare and Development
32,362.08
16.38
Education
20,665.00
10.46
National Defense
16,655.27
8.43
Transportation and Communications
14,089.11
7.13
Finance
13,361.59
6.76
Health
12,567.68
6.36
Public Works and Highways
11,036.51
5.58
State Universities and Colleges
10,793.64
5.46
Interior and Local Government
10,665.10
5.40
Agriculture
8,408.94
4.26
Other Departments/Offices
47,007.73
23.79
Total
197,612.68
100.00
Difference between totals and sum of components is due to rounding off.

Donations P38.78 billion

This years total Donations of P38.78 billion granted to various


government agencies, private institutions, cooperatives, foundations,
associations and individuals grew outstandingly by P18.82 billion or 94.27
percent compared to last years P19.96 billion. Of the total, DSWD reported
P28.40 billion or 73.23 percent principally for the implementation of Pantawid
Pamilyang Pilipino Program (4Ps), Kapit Bisig Laban sa Kahirapan
Comprehensive and Integrated Delivery of Social Services: Kapangyarihan at
Kaunlaran sa Barangay (KALAHI-CIDSS:KKB), Social Pension for Indigent
Senior Citizens, other various community driven development projects and
livelihood programs as well as financial assistance and goods given to victims of
disasters, typhoons and calamities.
Other departments/offices with huge amounts of Donations are: DepEd
P5.32 billion, DA P1.59 billion and OEO P1.08 billion.

Supplies and Materials Expenses - P32.37 billion

Supplies and Materials Expenses which declined by P3.06 billion or 8.63


percent than last years P35.43 billion got the second highest share in the total
MOOE. The biggest consumptions were for: Office Supplies P7.48 billion or
23.10 percent, Other Supplies P5.69 billion or 17.57 percent, Gasoline, Oil
and Lubricants P5.61 billion or 17.32 percent and Food Supplies P3.47
billion or 10.73 percent.
The leading consumers are the following departments/offices: DND
P6.18 billion or 19.08 percent, DILG P5.39 billion or 16.64 percent, DOH
P4.08 billion or 12.62 percent, DepEd P3.84 billion or 11.86 percent, SUCs
P2.12 billion or 6.56 percent, DFA P1.94 billion or 6.00 percent, DA P1.50
billion or 4.62 percent, DOJ P1.22 billion or 3.75 percent and DPWH P1.00
billion or 3.10 percent.

102

Table V.2-20 shows the comparative consumption of supplies and


materials by top departments/offices for calendar years 2011 and 2010. As
presented, there is a reduction in the total expenses for Supplies and Materials
by DILG P3.38 billion or 38.53 percent, DA P1.47 billion or 49.54 percent
and DepEd P875.25 million or 18.55 percent.
Table V.2-20 Comparative Consumption of Supplies and Materials
By Top Departments/Offices
(in million pesos)
Amount
Particulars
Percent
Increase
2011
2010
(Decrease)
National Defense
6,176.29
5,194.45
981.84
18.90
Interior and Local Government
5,385.19
8,761.04 (3,375.86)
(38.53)
Health
4,083.75
3,843.83
239.92
6.24
Education
3,838.57
4,712.82
(874.25)
(18.55)
State Universities and Colleges
2,122.51
1,876.05
246.46
13.14
Foreign Affairs
1,941.14
1,247.06
694.09
55.66
Agriculture
1,495.49
2,963.81 (1,468.33)
(49.54)
Justice
1,215.11
935.61
279.50
29.87
Public Works and Highways
1,004.76
801.50
203.26
25.36
Other Departments/Offices
5,104.47
5,089.57
14.90
0.29
Total
32,367.28 35,425.74 (3,058.46)
(8.63)
Difference between totals and sum of components is due to rounding off.

Other Maintenance and Operating Expenses P20.50 billion

Other
Maintenance
and
Operating Expenses of P20.50 billion
accounted for 10.38 percent of the
total expenses under MOOE.
Compared to the previous years
figure of P20.63 billion, a decrease of
P131.17 million or 0.64 percent was
noted for the current year.
The DOTC reported the biggest
amount at P6.78 billion or 33.07
percent, followed by Congress of the
Philippines P2.54 billion or 12.37
percent, DepED P2.05 billion or
9.99 percent, DA P1.66 billion or
8.11 percent and DOH P1.43 billion
or 6.98 percent. Shown in Table V.221 are the departments/offices which
reported big amounts of Other MOE.

Table V.2-21 Departments/Offices with Big


Other Maintenance and Operating Expenses
(in million pesos)
Percentage
Particulars
Amount
Distribution
Transportation and
Communications
6,780.12
33.07
Congress of the
Philippines
2,536.93
12.37
Education
2,048.59
9.99
Agriculture
1,663.81
8.11
Health
1,431.37
6.98
State Universities and
Colleges
993.72
4.85
National Defense
860.38
4.20
The Judiciary
652.43
3.18
Labor and Employment
528.91
2.58
Agrarian Reform
488.48
2.38
Other Departments/
Offices
2,518.86
12.28
TOTAL

20,503.60

100.00

Difference between totals and sum of components is due to rounding off.

103

Professional Services P19.09 billion

Compared to P14.05 billion in 2010, this years expenses for Professional


Services is higher by P5.04 billion or 35.90 percent. The highest percentage
increase is registered in Other Professional Services; from P4.44 billion in the
previous year, it rose to P8.95 billion this year. The second and third highest
percentage increases were recorded under Environment/Sanitary Services and
Consultancy Services, P358.25 million or 29.45 percent and P276.14 million or
17.06 percent, respectively.
The following departments/offices reported the biggest expenses for
Professional Services: DOF P3.80 billion or 19.92 percent, SUCs P1.93
billion or 10.13 percent, DOH P1.90 billion or 9.96 percent, DSWD P1.69
billion or 8.87 percent, MMDA P1.58 billion or 8.27 percent and DepEd
P1.35 billion or 7.05 percent.

Repairs and Maintenance P16.93 billion

Total Repairs and Maintenance for this year decreased by P2.18 billion or
11.40 percent compared to P19.11 billion in 2010. Table V.2-22 shows the
comparative components of Repairs and Maintenance.
Table V.2-22 Comparative Components of Repairs and Maintenance Expenses
(in million pesos)
Amount
Particulars
Percent
Increase
2010
2009
(Decrease)
Public Infrastructures
8,276.44
10,714.89
(2,438.44)
(22.76)
Buildings
4,536.94
4,062.47
474.46
11.68
Transportation Equipment
2,179.46
2,400.51
(221.05)
(9.21)
Office Equipment,
Furniture and Fixtures
897.53
864.54
32.98
3.82
Machineries and Equipment
786.61
777.08
9.53
1.23
Land Improvements
101.84
145.14
(43.29)
(29.83)
Reforestation Projects
69.19
70.51
(1.32)
(1.87)
Other Property, Plant and
Equipment
58.90
56.22
2.67
4.75
Leasehold Improvements
26.49
21.85
4.64
21.23
16,933.40
19,113.22
(2,179.82)
(11.40)
Total
Difference between totals and sum of components is due to rounding off.

Of the components, P8.28 billion or 48.88 percent was expended for the
Repairs and Maintenance of Public Infrastructures. This years cost of repairs
and maintenance is lower by P2.44 billion or 22.76 percent over last years level
of P10.71 billion. Of the total, P6.79 billion or 82.03 percent was for the
Repairs and Maintenance of Roads, Highways and Bridges and P1.08 billion or
13.03 percent was for Flood Control. The remaining P408.77 million or 4.94
percent is shared by all other public infrastructures.

104

The second biggest component is Repairs and Maintenance of Buildings


P4.54 billion or 26.79 percent, the details are as follows: Office Buildings
P1.66 billion or 36.53 percent, School Buildings P1.56 billion or 34.47
percent, Other Structures P1.16 billion or 25.48 and Hospital and Health
Centers P159.92 million or 3.52 percent.
The third biggest component is Repairs and Maintenance of Transportation
Equipment P2.18 billion or 12.87 percent. This years cost is lesser by
P221.05 million or 9.21 percent compared to P2.40 billion spent in 2010. The
details of the expenses for the repairs of transportation equipment are as follows:
Motor Vehicles P1.18 billion or 54.02 percent, Aircrafts and Aircraft Ground
Equipment P738.81 million or 33.90 percent, Watercrafts P258.18 million or
11.85 percent, and Other Transportation Equipment and Trains P5.16 million
or 0.24 percent.
5.2.2.2

Subsidy to LGUs, GOCCs and NGOs/POs - P391.27 billion

The total Subsidy to LGUs, GOCCs and NGOs/POs this year of P391.27 billion is
higher by P51.17 billion or 15.05 percent compared to the previous years level of
P340.10 billion. As shown in Table V.2-23, the breakdown with comparative details is as
follows: LGUs (net) P317.90 billion or 81.25 percent, GOCCs P72.84 billion or
18.62 percent, and NGOs/POs P527.64 million or 0.13 percent.
Table V.2-23 Comparative Details of Subsidy To
LGUs, GOCCs and NGOs/POs
Amount (in million pesos)
Increase
Particulars
2011
2010
(Decrease)
Subsidy to LGUs
(320,001.98) (283,614.73)
(36,387.25)
Subsidy from Other LGUs
2,105.29
2,067.71
37.58
Net Subsidy From/(To) LGUs
(317,896.69) (281,547.02)
(36,349.67)
Subsidy to GOCCs
(72,842.24)
(57,104.69)
(15,737.55)
Subsidy to NGOs/POs
(527.64)
(1,445.38)
917.74
Total
(391,266.57) (340,097.09)
(51,169.48)

Percent
12.83
1.82
12.91
27.56
(63.49)
15.05

Difference between totals and sum of components is due to rounding off.

5.2.2.2.1 Net Subsidy to LGUs P317.90 billion


Net Subsidy to LGUs of P317.90 billion is the excess of NGs subsidy to and
subsidy from LGUs of P320.00 billion and P2.10 billion, respectively. Compared to
last years level of P281.55 billion, this years amount exhibited an increase of P36.35
billion or 12.91 percent.
Of the collective Subsidy from Other LGUs, P1.89 billion or 89.74 and P124.54
million or 5.92 percent were received by MMDA and DepEd, respectively.
Compared to previous years P283.61 billion, Subsidy to LGUs rose by P36.39
billion or 12.83 percent. The DBM being the Administrator of the Funds for LGUs
reported P317.22 billion or 99.13 percent, of which P287.75 billion or 90.71 percent
was funded from IRA, while P29.47 billion or 9.29 percent was funded from various
Special Purpose Funds of the current and prior years appropriations.

105

Table V.2-24 shows the comparative breakdown of releases made by the Central
and Regional Offices of the DBM to the LGUs.
Table V.2-24
Comparative Breakdown of Subsidy to LGUs as Reported by DBM CO and ROs
(in million pesos)
2011
2010
Increase (Decrease)
CO/RO
Amount
Percent
Amount
Percent
Amount
Percent
Distribution
Distribution
CO
7,055.80
2.22
6,388.93
2.27
666.87
10.44
NCR
19,057.54
6.01
17,424.47
6.19
1,633.07
9.37
I
22,386.06
7.06
17,160.41
6.10
5,225.65
30.45
CAR
9,790.92
3.09
8,404.93
2.99
1,385.99
16.49
II
15,433.58
4.87
13,640.36
4.85
1,793.21
13.15
III
29,165.75
9.19
26,393.40
9.38
2,772.35
10.50
IV-A
33,254.17
10.48
28,859.35
10.25
4,394.82
15.23
IV-B
13,377.38
4.22
11,842.27
4.21
1,535.11
12.96
V
19,234.94
6.06
17,352.10
6.16
1,882.84
10.85
VI
25,895.98
8.16
22,934.81
8.15
2,961.17
12.91
VII
21,065.28
6.64
19,126.95
6.79
1,938.33
10.13
VIII
18,239.51
5.75
16,548.90
5.88
1,690.62
10.22
IX
18,499.73
5.83
16,883.53
6.00
1,616.20
9.57
X
16,437.13
5.18
14,816.85
5.26
1,620.28
10.94
XI
14,388.27
4.54
12,821.52
4.55
1,566.75
12.22
XII
22,778.99
7.18
20,562.03
7.30
2,216.96
10.78
XIII
11,160.21
3.52
10,348.45
3.68
811.76
7.84
TOTAL 317,221.23
100.00
281,509.25
100.00
35,711.98
12.69
The subsidy reported by the Regional Offices IX and XII, includes subsidy for LGUs of ARMM.
Difference between totals and sum of components is due to rounding off.

5.2.2.2.2 Subsidy To GOCCs P72.84 billion


Tax subsidy, equity contributions and other subsidies to GOCCs given by the
NG during the year reached P72.84 billion, registering an increase of P15.74 billion or
27.56 percent compared to the previous years level of P57.10 billion. Of the total,
P72.65 billion or 99.73 percent was reported by the DOF-BTr, of which P18.94
billion was for tax subsidy. Table V.2-25 shows the Comparative Breakdown of
Subsidy to GOCCs Reported by DOF-BTr.
Table V.2-25 Comparative Breakdown of Subsidy to GOCCs
as Reported by DOF-BTr
Amount (in million pesos)
Particulars
Increase
2011
2010
(Decrease)
National Housing Authority
National Power Corporation
National Food Authority
Land Bank of the Philippines
Philippine Health Insurance Corporation
Philippine Deposit Insurance Corporation
Light Rail Transit Authority
National Electrification Administration

16,196.70
14,092.08
9,214.26
7,932.22
6,639.80
4,183.36
1,867.51
1,670.33

106

3,500.00
38,420.09
3,506.10
4,403.27
10.14

12,696.69
14,092.08
(29,205.83)
7,932.22
3,133.70
(219.91)
1,867.51
1,660.19

Percent
362.76
(76.02)
89.38
(4.99)
16,370.24

Table V.2-25 continued


Amount (in million pesos)
Increase
2011
2010
(Decrease)

Percent

1,437.36
1,000.00
712.93
685.30
647.03
640.31
542.70
500.00
496.00
460.87
450.00
426.50
423.99
346.07
336.00
315.02
296.10
216.12
195.00
117.00
113.77

1,299.18
163.97
19.20
259.65
294.79
585.00
418.00
281.28
80.00
781.19
297.59
52.20
180.38
20.00
100.00
113.77

138.18
1,000.00
548.96
666.10
387.38
345.52
(42.30)
500.00
78.00
179.59
450.00
346.50
(357.20)
48.48
336.00
262.82
115.72
196.12
95.00
117.00
0.00

10.64
334.79
3,469.27
149.19
117.21
(7.23)
18.66
63.85
433.13
(45.72)
16.29
503.49
64.15
980.62
95.00
0.00

79.69
67.50
65.00
59.00
55.50
49.10
41.61

73.75
22.50
65.00
30.00
30.00
4.04

5.94
45.00
0.00
29.00
55.50
19.10
37.57

37.00
17.50
11.83
8.00
72,646.08

50.00
12.52
1,932.85
57,006.45

(13.00)
17.50
11.83
(4.52)
(1,932.85)
15,639.62

Particulars
National Livelihood Development Corporation
National Home Mortgage Finance Corporation
Philippine National Railways
Philippine Institute for Development Studies
Philippine Childrens Medical Center
Philippine Heart Center
Philippine Coconut Authority
Philippine Fisheries Development Authority
Philippine Rice Research Institute
Philippine Postal Corporation
National Irrigation Administration
National Resources Development Corporation
Bases Conversion Development Authority
National Kidney and Transplant Institute
Technology Livelihood Resource Center
National Dairy Authority
Lung Center of the Philippines
Development Academy of the Philippines
Cultural Center of the Philippines
Laguna Lake Development Authority
Philippine Crop Insurance Corporation
Center for International Trade Expositions and
Missions
Aurora Special Economic Zone Authority
Philippine Convention and Visitors Corporation
Southern Philippines Development Authority
Local Water Utilities Administration
Zamboanga City Special Economic Zone Authority
Peoples Televisions Network Inc.
Philippine Institute of Traditional and Alternative
Health Care
Credit Information Corporation
Development Bank of the Philippines
Cottage Industry Technology Center
Other GOCCs
Total

8.05
200.00
0.00
96.67
63.67
930.35
(26.00)
(36.10)
(100.00)
27.43

Difference between totals and sum of components is due to rounding off.

Other departments that reported Subsidy to GOCCs are the following: NEDA
P99.51 million, DOLE - P46.22 million, DOH P38.48 million, DOT P10.43
million and OEO P1.52 million.
5.2.2.3 Financial Expenses P282.77 billion
Total Financial Expenses of P282.77 billion for the calendar year declined by
P21.74 billion or 7.14 percent compared to P304.52 billion of the previous year. Of the
aggregate, the DOF accounted for P282.42 billion or 99.88 percent, of which P282.23
billion or 99.93 percent was reported by the BTr GOP in the payment of foreign and
domestic loans and bonds and notes payable.

107

As shown in Table V.2-26, total payments for interest expenses and other financial
charges for our foreign and domestic borrowings shrank by P19.54 billion or 6.67 percent
and P2.98 billion or 70.44 percent, respectively.
Table V.2-26 Comparative Components of Financial Expenses
Amount (in million pesos)
Particulars
Percent
Increase
2011
2010
(Decrease)
Interest Expenses
273,205.27
292,742.50
(19,537.23)
(6.67)
Documentary Stamp
Expenses
7,703.84
7,061.08
642.77
9.10
Other Financial Charges
1,249.30
4,226.70
(2,977.40)
(70.44)
Commitment Fees
332.60
397.93
(65.34)
(16.42)
Bank Charges
280.72
88.39
192.33
217.60
Total
282,771.72
304,516.60
(21,744.88)
(7.14)
Difference between totals and sum of components is due to rounding off.

5.2.2.4 Regional Breakdown of Expenses


Since almost all of the Central Offices are situated in Metro Manila, the NCR
continued to account for the highest amount of expenses totaling P764.53 billion or 55.25
percent. Regions IV, III and VI followed with P93.15 billion or 6.73 percent, P63.63
billion or 4.60 percent and P55.40 billion or 4.00 percent, respectively. On the other
hand, the Foreign Service Posts of DFA reported total expenses of P4.84 billion as
presented in Table V.2-27
The breakdown of expenses by department/office and by region is shown in
Schedule 30, Volume I-B, while the details of expenses, by account and by region are
presented in Schedule 31, Volume I-B.
Table V.2-27 Regional Breakdown of Expenses and Subsidies
(in million pesos)
Region

PS

MOOE

FE

Subsidies

TOTAL

NCR
I
CAR
II
III
IV
V
VI
VII
VIII
IX
X
XI
XII
XIII
ARMM
FSPs
Total

262,039.88
16,870.01
8,234.15
13,092.83
26,019.91
34,645.89
18,848.69
23,703.13
17,532.46
16,268.86
12,551.72
14,506.63
12,788.24
11,452.96
8,505.92
11,444.17
3,605.55
512,110.99

122,407.44
4,800.31
2,939.79
4,230.37
8,007.59
11,461.33
5,338.31
5,515.65
5,466.50
3,583.50
4,066.59
4,620.73
4,792.10
4,605.97
2,889.41
1,702.67
1,184.43
197,612.68

282,696.68
0.15
0.49
0.08
6.74
7.92
3.55
2.94
0.16
0.83
1.32
0.84
0.21
1.67
1.73
0.38
46.03
282,771.72

97,390.15
22,531.25
10,021.66
15,475.96
29,600.15
47,035.79
19,283.21
26,177.95
21,378.84
18,308.94
18,531.42
16,650.98
14,454.15
23,093.98
11,195.42
136.71
391,266.57

764,534.16
44,201.72
21,196.09
32,799.24
63,634.38
93,150.93
43,473.76
55,399.66
44,377.96
38,162.13
35,151.06
35,779.18
32,034.70
39,154.57
22,592.49
13,283.93
4,836.01
1,383,761.96

Difference between totals and sum of components is due to rounding off.

108

Percentage
Distribution
55.25
3.19
1.53
2.37
4.60
6.73
3.14
4.00
3.21
2.76
2.54
2.59
2.32
2.83
1.63
0.96
0.35
100.00

5.2.3 Other Income/Expense Items


5.2.3.1 Net Subsidy From/(To) National Government Agencies P2.79 billion
Net Subsidy From NGAs of P2.79 billion is the difference between total Subsidy
from NGAs of P1.185 trillion and total Subsidy to NGAs of P1.182 trillion. Compared to
the previous years Net Subsidy From/(To) NGAs of negative P35.47 billion, this years
net subsidy increased by P38.26 billion. This is brought about by the excess of the
increase in Total Subsidy from NGAs of P56.52 billion over the increase in Total Subsidy
to NGAs of P18.26 billion. Table V.2-28 shows the Comparative Details of Subsidy
From/(To) National Government Agencies.
Table V.2-28 Comparative Details of Subsidy From/(To)
National Government Agencies
Amount (in million pesos)
Particulars
Increase Percent
2011
2010
(Decrease)
Subsidy Income from National
1,092,863.47 70,847.62
6.48
Government
1,163,711.09
Subsidy from Central Office/
Home Office
18,800.64
29,276.51 (10,475.87) (35.78)
Subsidy from Regional Offices/
Staff Bureaus
1,288.93
4,022.94
(2,734.01) (67.96)
Subsidy from Operating Units
31.44
588.33
(556.89) (94.66)
Subsidy from Other Funds
329.19
814.97
(485.78) (59.61)
Subsidy Income from Other
NGAs
452.17
523.80
(71.63) (13.68)
Total Subsidy from NGAs
1,184,613.45
1,128,090.02 56,523.43
5.01
Less:
Subsidy to National Government
Agencies
1,161,043.82
1,127,784.96 33,258.86
2.95
Subsidy to Regional Offices/
Staff Bureaus
14,542.85
22,107.46
(7,564.61) (34.22)
Subsidy to Operating Units
5,923.93
13,406.69
(7,482.76) (55.81)
Subsidy to Other Funds
308.55
261.57
46.98
17.96
Total Subsidy to NGAs
1,181,819.15
1,163,560.68 18,258.47
1.57
Net Subsidy From/(To) NGAs
2,794.30
(35,470.66) 38,264.96 (107.88)
Difference between totals and sum of components is due to rounding off.

5.2.3.1.1 Subsidy from National Government Agencies P1.185 trillion


The main component of Subsidy from NG is the Subsidy Income from
National Government, which accounted for P1.164 trillion or 98.24 percent. This
account is credited for receipt of NCA, NCAA, Working Fund and constructive
receipt of CDC by Foreign Service Posts of the DFA. Likewise, it is also credited for
Tax Remittance Advices (TRAs) issued to BIR and for tax subsidies by the NG to the
GOCCs. On the other hand, it is debited for remittances to the National Treasury of
collections from refunds of current years excess of cash advances and working fund,
and refunds of current years overpayments of expenses and disallowances; reversion
of unused/lapsed NCAs; and closing of the account at year-end to Income and
Expense Summary account.

109

Compared to the P1.093 trillion in calendar year 2010, this years level
increased by P70.85 billion or 6.48 percent. As the administrator of funds for NGs
subsidies to LGUs, the DBM reported the highest amount of P319.69 billion,
accounting for 27.47 percent of the total. The DepEd, DND and DPWH followed
with P216.19 billion or 18.58 percent, P117.99 billion or 10.14 percent and P106.88
billion or 9.18 percent, respectively.
5.2.3.1.2

Subsidy to National Government Agencies P1.182 trillion

The main component of this category is the account Subsidy to NGAs as


reported in the DOF-BTr GOP Books totaling P1.16 trillion or accounting for 99.96
percent. This account is debited for replenishments to AGSBs for negotiated MDS
checks and other payments on accounts of NGAs; constructive issuance of NCAA for
advanced payments made by foreign creditors and donors; constructive issuance of
CDC to Foreign Service Posts based on their submitted Report of Income; Working
Fund deposited to the foreign currency accounts of implementing NGAs for FAPs;
TRAs issued to BIR; and for tax subsidies by NG to GOCCs. It is credited at year-end
for the closing of the account to the Income and Expense Summary account.
Table V.2-29 Comparative Details of Subsidy to NGAs as Reported by BTr
Amount (in million pesos)
Particulars
Percent
Increase
2011
2010
(Decrease)
Replenishment of negotiated
MDS account
1,070,326.25
1,092,266.12
(21,939.86)
(2.01)
Tax Remittance Advices
33,884.51
31,945.75
1,938.75
6.07
Customs Duties/Other Taxes
per JC 2-91
25,831.39
39,693.73
(13,862.34) (34.92)
Constructive Cash (NCAA)
18,363.49
16,199.41
2,164.08
13.36
Working Fund
9,617.00
5,766.45
3,850.56
66.78
Contributions to International
Organizations
2,530.62
1,155.92
1,374.70
118.93
Non-Cash Availment
4.49
9.74
(5.25) (53.92)
Authority Grant
Total
1,160,557.76
1,187,037.12
(26,479.37)
(2.23)
Difference between totals and sum of components is due to rounding off.

As shown in Table V.2-29, this years Subsidy to NGAs reported in the DOFBTr GOP Books is lesser by P26.48 billion or 2.23 percent compared to the previous
years level of P1.187 trillion.
5.2.3.2

Net Gain/(Loss) (P31.67 billion)

From a Net Gain of P49.78 billion in the previous year, a significant Net Loss of
P31.67 billion was reported for the year ended 2011. This was caused mainly by the Net
Loss of P28.47 billion in foreign exchange during the year as compared to the FOREX
Gain of P54.21 billion in 2010. Other contributor is the Loss on Guaranty of P3.16
billion. The account Loss on Guaranty is used for the payment of foreign exchange risk
cover claims for NG guaranteed obligations of GFIs (LBP, DBP and SBGFC). Table V.230 shows the Comparative Details of Gains/(Losses) for calendar years 2011 and 2010.

110

Table V.2-30 Comparative Details of Gains/(Losses)


Amount (in million pesos)
Particulars
Increase
2011
2010
(Decrease)
Gain/(Loss) on Foreign Exchange
(28,471.38) 54,214.72
(82,686.10)
Loss on Guaranty
(3,157.04) (4,571.08)
1,414.04
Loss of Assets
(38.69)
(61.13)
22.44
Gain/(Loss) on Sale of Disposed Assets
(49.96)
(48.26)
(1.70)
Gain/(Loss) on Sale of Securities
43.06
247.71
(204.64)
Net Gain/(Loss)
(31,674.01) 49,781.96
(81,455.96)

Percent
(152.52)
(30.93)
(36.70)
3.52
82.62
(163.63)

Difference between totals and sum of components is due to rounding off.

5.2.4

Net Income/(Loss) (P13.62 billion)


The NGs operations for the year ended, resulted to a Net Loss of P13.62 billion
inspite of the excess of income over expenses this year of P15.25 billion due to the Net
Loss on Foreign Exchange of P28.47 billion. Total Loss on FOREX brought about by
the depreciation of the peso against foreign currencies reported by various
departments/offices reached P28.82 billion, of which P28.77 billion or 99.84 percent
was accounted for by the DOF. This was partially offset by the Gains on FOREX
totaling P348.82 million recorded by the following departments/offices: DFA P295.65
million, DOLE P51.08 million and SUCs (mainly by the University of the
Philippines) P2.10 million. Table V.231 shows the Comparative Condensed
Statement of Income and Expenses.

Table V.2-31 Comparative Condensed Statement of Income and Expenses


Amount (in million pesos)
Percent
Particulars
Increase
2011
2010
(Decrease)
Revenue/Income
1,399,016.71
1,243,676.54
155,340.17
12.49
Less: Expenses
1,383,761.96
1,282,070.96
101,691.00
7.93
Income/(Loss) Before Other
Income/Expense Items
15,254.75
(38,394.42)
53,649.17
(139.73)
Other Income/Expense Items
Net Subsidy From/(To) NGAs
2,794.30
(35,470.66)
38,264.96
(107.88)
Net Gain/(Loss)
(31,674.01)
49,781.96
(81,455.96)
(163.63)
Net Income/(Loss)
(13,624.95)
(24,083.12)
10,458.17
(43.43)
Difference between totals and sum of components is due to rounding off.

111

5.3 Statement of Cash Flows


The consolidated SCF, prepared using the Direct Method imparts the sources and
uses of cash during the year, which is summarized into operating, investing and
financing activities.
Operating activities includes cash generated from revenues and the cost incurred
excluding those associated with long-term investment on capital items or investment in
securities. Investing activities include cash paid for acquiring capital assets and cash
received from disposals of the same classes of assets, cash invested in stocks, as well as
the proceeds from the subsequent sale of the stock. Financing activities include cash
received from debt holders and any principal payments made back to those debt holders.
At yearend, the cash balance of the NG as shown in the SCF on page 47 of this
report was recorded at P317.55 billion, which is 16.71 percent or P63.72 billion lower
than last year.
Chart V.3-1 shows the segments of cash flows by activity. Total cash inflows
under operating, investing and financing activities was posted at P4.549 trillion, while
total cash outflows amounted to P4.612 trillion, resulting to the decrease in cash balance
by P63.69 billion.

Chart V.3-1 Segments of Cash Flows


(in billion pesos)
5,000
4,000
3,000
2,000
1,000
0
-1,000

Operating

Investing

Financing

Total

Inflows

2,830.31

353.07

1,365.39

4,548.77

Outflows

2,658.91

491.88

1,461.69

4,612.48

171.40
(138.80)
(96.29)
(63.69)
Net Cash Provided by
(Used in)
Difference between totals and sum of components is due to rounding off.

112

5.3.1 Cash Inflows P4.549 trillion


This years cash generation summed up to P4.549 trillion, P2.830 trillion or
62.22 percent of which is sourced from Operating Activities, P1.365 trillion or 30.02
percent from Financing Activities and P353.07 billion or 7.76 percent from Investing
Activities.
5.3.1.1 Operating Activities P2.830 trillion
Total cash inflows derived from Operating Activities for the year reached
P2.830 trillion. This came mainly from the collection of revenue/income of
P1.338 trillion. Of the total collections, P837.79 billion was reported by the BIR
as remittance from various taxes, which is P91.02 billion or 12.19 percent higher
than last years P746.76 billion. Table V.3-1 shows the collection generated by
principal revenue collecting agencies for the last two years.
Table V.3-1 - Comparative Revenue Generated, by Agency
(in million pesos)
Increase (Decrease)
Department/Agency
2011
2010
Amount
Percent
Bureau of Internal Revenue
837,788.42
746,764.30
91,024.12
12.19
Bureau of Customs
253,812.53
226,852.42
26,960.11
11.88
DOE-OSEC
35,425.78
23,346.45
12,079.33
51.74
DOTC-OSEC
14,466.03
13,955.61
510.42
3.66
DA-OSEC
6,954.94
270.85
6,684.08 2,467.79
DOH-OSEC
5,870.95
5,774.12
96.83
1.68
DFA-OSEC
5,244.71
4,832.60
412.11
8.53
Supreme Court of the Philippines
and the Lower Courts
4,627.38
2,324.20
2,303.17
99.10
Land Registration Authority
4,566.89
3,397.84
1,169.05
34.41
National Telecommunications
Office
4,528.26
3,681.73
846.53
22.99
Other Agencies
165,175.09
99,106.04
66,069.05
66.67
Total*
1,338,460.96 1,130,306.16 208,154.80
18.42
*Total amount is net of remittance to NT
Difference between totals and sum of components is due to rounding off.

The second largest source of cash flows from operating activities totaling
P1.150 trillion are receipt of NCA for regular operations P1.118 trillion, receipt of
NTCA P31.97 billion and receipt of NCA for trust and other receipts P432.75
million. Among the departments/offices, the DBM accounted for the highest receipt
at P319.63 billion or 27.79 percent of the total. Of this amount, P318.10 billion
pertains to DBM administered funds which were allocated as financial subsidies to
LGUs. The receipt of NCA, by department/office is listed in Table V.3-2.

113

Table V.3-2 Receipt of NCA, by Department*


Amount
Percent
Department/Office
(in million
to Total
pesos)
Budget and Management
319,629.25
27.79
Education
205,106.79
17.84
National Defense
114,886.54
9.99
Public Works and Highways
104,443.94
9.08
Interior and Local Government
98,993.09
8.61
Agriculture
42,997.91
3.74
Social Welfare and Development
33,562.30
2.92
Health
28,840.89
2.51
State Universities and Colleges
26,382.33
2.29
Transportation and Communications
22,099.55
1.92
Other Departments
153,063.86
13.31
Total
1,150,006.45
100.00
* Net of reversion of unused NCA
Contributing to the sources of funds of NGAs are inter-agency and intraagency fund transfers which amounted to P155.83 billion and P32.36 billion,
respectively. These comprises cash for the account of NGAs/LGUs/GOCCs, funds
transferred from one government agency to another for implementation of projects
and operating funds received by Regional Offices from the Central Offices, and by
Operating Units from the Regional Offices.
Collection of receivables such as accounts receivables, inter-agency and intraagency receivables, receivables from audit disallowances and other receivables
amounted to P12.38 billion. This is higher by P2.33 billion or 23.23 percent over
last years amount of P10.04 billion.
Other receipts falling under Operating Activities are shown in Table V.3-3.
Table V.3-3 Breakdown of Other Receipts
(in million pesos)
Particulars
Receipt of Performance/Bidders/Bail Bonds and Security
Deposits
Collection of other receipts from private
associations/entities for specific purpose
Collection of trust receipts from entities other than NGAs/
LGUs/GOCCs
Collection of trust receipts from NGAs/LGUs
Receipt of refund of cash advances and overpayments of
expenses
Funds from NGOs/POs for the implementation of projects
Other miscellaneous receipts
Total

114

Amount
5,021.47
4,421.02
3,629.80
2,634.05
1,441.97
1,109.96
17,867.09
36,125.36

Adjustments which resulted to the increase in cash balance include gain


on foreign exchange P93.46 billion, restoration of cash for unreleased checks
P7.42 billion, restoration of cash for cancelled/lost/stale checks P774.97
million, receipt of return of cash equivalent to unexpended balance of allotment
P17.87 million and other adjustments P1.29 billion.

5.3.1.2 Investing Activities P353.07 billion


Inflows of NG from this activity came from proceeds from matured
investments P319.83 billion, sale of investment securities P30.51 billion,
collection of long-term loans P2.64 billion and sale of assets P91.56 million.
Of the aggregate cash generated from investing transactions of P353.07
billion, 97.42 percent was recorded by the BTr-GOP at P343.96 billion, the
breakdown of which is shown in Table V.3-4.
Table V.3-4 Breakdown of Inflows from Investing
(in million pesos)
Particulars
Amount
Redemption of Investments
Sinking Fund Securities
311,962.25
Investments in Bonds
167.40
Investments in T-bills
85.30
Other Investments and Marketable Securities
0.07
Proceeds from sale of T-bills, stocks and bonds
30,442.93
Repayment of long-term loans by GOCCs/GFIs
1,306.92
Total
343,964.87
Source: SCF BTr-GOP

5.3.1.3 Financing Activities P1.365 trillion


Activities which had
impact on the long-term
liabilities and equity of the
NG are listed in the financing
activities section of the SCF.
For CY 2011, domestic and
foreign borrowings reached
P1.365 trillion. This amount
was mainly accounted for by
the BTr-GOP which is
engaged
in
financing
activities. This figure is net of
discount,
other
financial
charges and documentary

115

Table V.3-5 - Breakdown of Borrowings


(in million pesos)
Particulars
Amount
Bonds Payable - Domestic
565,120.52
Bonds Payable - Foreign
120,053.76
Loans Payable - Domestic
605,856.39
Loans Payable - Foreign
55,602.18
Interest Payable
4,463.06
Withholding Tax Payable
1,130.51
Premium on T-Bonds
12,686.11
Total
1,364,912.53
Source: SCF BTr-GOP

stamp expenses but inclusive of premium on bonds, accrued interests and


withholding tax discounts, as shown in Table V.3-5. A minimal amount of
P63.99 million was reported by State Universities and Colleges.
5.3.2 Cash Outflows P4.612 trillion
This years disbursements at P4.612 trillion comprised of Operating Activities
P2.659 trillion or 57.65 percent, Financing Activities P1.462 trillion or 31.69 percent
and Investing Activities P491.88 billion or 10.66 percent.
5.3.2.1 Operating Activities P2.659 trillion
All income collected by the agencies which are not authorized to be
used are required to be remitted to the National Treasury. This years total
remittances to the NT was posted at P1.173 trillion. Table V.3-6 shows the
remittances made by top collecting agencies.
Table V.3-6 Remittances to NT, by Agency
(in million pesos)
Department/Agency
Bureau of Internal Revenue
Bureau of Customs
DOE-OSEC
DOTC-OSEC
Land Registration Authority
DFA-OSEC
National Telecommunications
Commission
Bureau of Immigration
Securities and Exchange
Commission
National Statistics Office
Other Agencies
Total

836,757.69
253,793.67
34,543.36
14,722.65
4,613.13
4,540.81

836,635.49
253,793.67
34,520.65
14,465.25
3,640.23
4,497.22

RA
Books
122.20
22.71
257.40
972.90
43.59

4,528.41
2,371.07

4,528.16
2,339.58

0.25
31.49

1,789.11
1,773.06
1,201.27
608.29
13,708.20
6,441.13
1,172,569.39 1,163,242.73

16.06
592.98
7,267.07
9,326.65

Total

NG Books

Difference between total and sum of components is due to rounding off.

Another cash outflow item that took the most part of operating outflow
activities is DOF-BTrs replenishment of negotiated MDS checks amounting
to P1.089 trillion.
The government also deploys a large portion of its cash on payment of
operating expenses at P658.08 billion, which is P152.76 billion or 30.23
percent higher than last years P505.31 billion. Among the
departments/offices, the DepEd incurred the highest disbursement on
operating expenses at P163.62 billion or 24.86 percent of the total. Payment
of operating expenses, by department is shown in Table V.3-7.

116

Table V.3-7 Payment of Operating Expenses,


by Department
Amount
Percent
Department/Office
(in million
to total
pesos)
Education
163,621.78
24.86
Finance
97,721.97
14.85
National Defense
96,892.65
14.72
Interior and Local Government
63,670.64
9.68
Social Welfare and Development
31,537.93
4.79
State Universities and Colleges
26,976.19
4.10
Agriculture
23,863.28
3.63
Public Works and Highways
23,406.05
3.56
Health
21,536.70
3.27
The Judiciary
13,768.85
2.09
Other departments
95,080.54
14.45
Total
658,076.58
100.00

Subsidies and cash donations of P379.26 billion is another


component of cash outflows under Operating Activities. Subsidy to LGUs
amounting to P317.16 billion was released through the DBM while
Subsidy to GOCCs amounting to P53.70 billion was released through the
BTr-GOP. Table V.3-8 shows subsidies and donations granted by
departments to other NGAs, LGUs, NGOs/POs and other levels of
government/institutions to implement their programs and projects.
Table V.3-8 Subsidies and Donations to Other
NGAs/LGUs, NGOs/POs
(in million pesos)
Department/Office
Amount
Budget and Management
317,370.87
Finance
53,714.65
Social Welfare and Development
5,943.80
Other Executive Offices
1,134.73
Science and Technology
545.61
Autonomous Regions in Muslim Mindanao
180.35
State Universities and Colleges
177.01
Labor and Employment
73.00
The Interior and Local Government
54.87
The Judiciary
36.45
Other departments
32.95
Total
379,264.29
Release of inter-agency and intra-agency fund transfers amounted to
P94.61 billion and P69.77 billion, respectively.

117

Other key use of cash under operating outflow include remittance of


personnel benefit contributions and mandatory deductions P133.26 billion,
settlement of accounts payable P69.05 billion, grant of cash advances for
travel and for special purpose or time-bound undertaking P20.24 billion
purchase of inventories P14.73 billion, and other disbursements P27.85
billion.
Transactions which reduced the cash balance at year end pertains to loss
on foreign exchange P96.23 billion, reversion of unreleased checks in
previous year P5.71 billion, adjustment for dishonored checks P162.93
million, adjustment for cash shortage P4.2 million and other adjustments
P601.65 million.
5.3.2.2 Investing Activities P491.88 billion
Cash outflow from investing transactions summed up to P491.88 billion.
Included in this group of transactions are Investments in securities of P408.01
billion, purchase of capital assets of P83.33 billion and grant of loans of P527.88
million.
Table V.3.9 presents the departments/offices which used their cash on
investments in stocks, bonds and other forms of securities.
Table V.3.9 Investments in Stock, Bonds and Other Securities
By Department/Office
Department/Office

Total

Finance
403,655.02
Energy
2,819.17
Trade and Industry
807.40
Agriculture
212.24
State Universities and Colleges
159.58
Other Executive Offices
100.00
Science and Technology
96.03
Education
86.94
Labor and Employment
30.78
National Economic and
Development Authority
20.00
Health
16.63
Office of the Ombudsman
10.57
Total
408,014.37

Investments in
Investments
Other
Stocks/
in
GOCCs/
Long-Term
Bonds/MarkeGFIs
Investments
table Securities

390,765.97
2,819.17

12,889.05
807.40
212.24
125.84

33.74
100.00
96.03
86.94
30.78
20.00

393,952.63

13,696.46

16.63
10.57
365.28

Cash paid for capital expenditures amounted to P83.33 billion. This is a


prime necessity for ensuring the proper maintenance of, and additions to, the
NGs physical assets to support its efficient operation. The DPWH, tasked to
provide and manage quality infrastructure facilities and services, topped the list
of departments with disbursement on capital expenditures at P57.48 billion or
68.98 percent of the total.

118

5.3.2.3 Financing Activities P1.462 trillion


Debt and equity transactions dominated this category. Payment of longterm liabilities amounted to P1.221 trillion, of which P1.217 trillion or 99.63
percent represents BTr-GOPs loan repayments and redemptions.
Interest payment of P240.29 billions is another part of financing
outflow. Of this amount P240.26 billion was paid by the BTr-GOP.
The components of financing outflows are presented in Table V.3-10.

Table V.3-10 Composition of Financing Outflows


(in million pesos)
Particulars
Amount
Loan Repayments and Redemptions
1,217,092.50
DOF-BTr-GOP
1,216,851.30
Bonds Payable - Domestic
205,439.62
Bonds Payable - Foreign
82,475.27
Loans Payable - Domestic
843,834.55
Loans Payable - Foreign
62,308.50
Due from GOCCs/Loans Receivables-GOCC
22,793.36
Other departments/offices
241.20
Interest Payments
240,292.42
DOF-BTr-GOP
240,257.83
Other departments/offices
34.60
Loss on Guaranty
3,156.76
Commitment Charges
305.99
Other Financial Charges
840.17
Total
1,461,687.84
Source: SCF-BTr-GOP, except for data on other departments/offices

5.3.3 Net Cash Provided by (Used in) Operating, Investing and Financing Activities
(P63.69 billion)
During the year, the net cash used went down to a negative P63.69 billion. This is
due to the heavy use of cash in operating activities which increased by 13.23 percent
and the governments trimming down on loan acquisitions by14.90 percent.
Chart V.3-2 shows the net cash provided by (used in) operations by the NG from
FYs 2002 to 2011. This years net result on operating, investing and financing activities
is the lowest in ten years.

119

Chart V.3-2 Trend of Net Cash Provided by (Used in)


Operating, Investing and Financing Activities
CY 2002-2011
(in billion pesos)
95.08

90
66.95

63.39

70

42.56

50

29.31

30
27.16

10
-10

9.14
2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

-30
(33.28)

-50

(56.89)

-70

(63.69)

5.3.4 Cash Balances


5.3.4.1 Beginning Balance, January 1, 2011
The consolidated beginning balance of cash as of January 1, 2011 of
P381.25 billion differs with the ending balance reported in the FY 2010
SCF. The difference represents cash balances of reports not submitted
either in FYs 2010 or 2011, inadvertent reporting of cash balances and
balances which are for verification as of report date.
5.3.4.2 Ending Balance, December 31, 2011
The SCF at the end of the year shows total cash balance of P317.55
billion, higher by P55.04 billion compared to the cash balance reflected in
the Balance Sheet. The difference represents sinking fund cash accounts of
P55.14 billion lodged under Investments in the books of the BTR-GOP
and cash accounts of DOLE, Carlos Hilado Memorial College and Davao
Oriental State College of Science and Technology which are not included
in the SCF ending balance amounting to P100.49 million.

120

VI. NATIONAL
GOVERNMENT DEBT

NATIONAL GOVERNMENT DEBT


6.1 Introduction
The National Government (NG) budget has been formulated to turn our vision for
social reform into a tangible reality. This requires the implementation of various
infrastructures, socio-economic and capital development projects to be financed by the
national revenues. To finance its budget deficit, or the gap between revenues and
spending, the NG resorted to borrowings. For CY 2011, the Bureau of the Treasury
(BTr) issued Benchmark Bonds, the largest domestic bond swap transaction of the NG.
The Bureau also raised funds for the government through the issuance of Retail
Treasury Bonds.
This section of the AFR gives us a view on the total indebtedness of the NG
including those relent to the Government-Owned and/or Controlled Corporations
(GOCCs). The debt is contracted either from local/internal sources or from
foreign/external sources for the implementation of capital development projects.

6.2 Legal Bases


The following constitutional authority and pertinent laws governed the incurrence
of public debt by the government:
a. 1987 Philippine Constitution, Section 20, Article 7 which provides:
The President may contract or guarantee foreign loans on behalf of the
Philippines with the prior concurrence of the Monetary Board, and
subject to such limitations as may be provided by law. The Monetary
board shall, within thirty days from the end of every quarter of every
calendar year, submit to the Congress a complete report of its decision on
applications for loans to be contracted or guaranteed by the Government
or government-owned and/or controlled corporations which would have
the effect of increasing the foreign debt, and containing other matters as
may be provided by law.

b. R.A. No. 4860 dated August 8, 1966 entitled:


An Act Authorizing the President to Obtain such Foreign Loans and
Credits or to incur such Foreign Indebtedness, as may be Necessary to
Finance Approved Economic Development Purposes or Projects, and to
Guarantee, in behalf of the Republic of the Philippines, Foreign Loans
Obtained by the Government of the Philippines, Foreign Loans Obtained
or Bonds Issued by Corporations Owned or Controlled by the Government
of the Philippines for Economic Development Purposes Including those
Incurred for Purposes of Re-lending to the Private Sector, Appropriating
the Necessary Funds Therefore, and for Other Purposes, as amended.

121

c. P.D. No. 139 issued on June 27, 1984 amended R.A. No. 4860, increasing
foreign debt limit to an amount not exceeding US$10 billion or its equivalent
in other foreign currencies at the exchange rate prevailing at the time the
loans, credits or indebtedness are incurred at terms of payment of not less than
ten (10) years except those contracted in the interest of national security and
rehabilitation resulting from natural calamities.

d. R.A. No. 8182 approved by Congress on June 11, 1996 entitled:


An Act Excluding the Official Development Assistance (ODA) from the
Foreign Debt Limit in order to facilitate the Absorption and Optimize the
Utilization of ODA Resources, Amending for the Purpose Paragraph 1,
Section 2 of R.A. No. 4860, as amended by R.A. No. 8555.

e. Presidential Proclamation No. 50 dated December 8, 1986 entitled:


Proclaiming and Launching a Program for the Expeditious Disposition
and Privatization of Certain Government Corporations and/or the Assets
Thereof, and Creating the Committee on Privatization and the Asset
Privatization Trust.
f. R.A. No. 245 issued on June 12, 1948 entitled:
An Act Authorizing the Secretary of Finance to Borrow to Meet Public
Expenditures Authorized by law and for Other Purposes.

g. P.D. No. 142, approved on March 2, 1973 amending R.A. No. 245 entitled:
An Act Authorizing the Secretary of Finance to Borrow to Meet Public
Expenditures Authorized by Law and for Other Purposes

h. R.A. No. 1000 approved on June 12, 1954 entitled:


An Act Authorizing the President of the Philippines to Issue Bonds to
Finance Public Works and Projects for Economic Development
Authorized by law and for Other Purposes.

122

6.3 Borrowing Program


6.3.1 Approved Program P738.17 billion
The level of gross borrowing approved for 2011 was fixed at P738.17
billion consisting of Domestic P546.33 billion and Foreign P191.84 billion.
The foreign borrowings will be sourced as follows: program loans
P21.27 billion; project loans P29.19 billion and bonds and other inflows
P141.38 billion.
The gross domestic borrowings of P990.90 billion, on the other hand, will
be obtained through the flotation of the following securities: Treasury Bills
P520.58 billion and Fixed Rate Treasury Bonds P470.33 billion. The amount
was reduced by redemption of Treasury Bills amounting to P444.58 billion.
Of the amount to be borrowed, P428.87 billion is intended for principal
amortization pertaining to Domestic P285.13 billion and Foreign P143.74
billion. Table VI-1 presents the NG financing for calendar year 2011.
Amount (in million pesos)
Approved
Actual 1
Variance
Program 2
Gross Foreign Borrowings
194,319.00
191,835.00
2,483.00
Program Loans
48,560.00
21,272.00
27,288.00
Project Loans
25,549.00
29,189.00
(3,640.00)
Bonds and Other Inflows
120,210.00
141,375.00 (21,165.00)
Less: Amortization
143,159.00
143,737.00
(578.00)
Net Foreign Borrowings
51,160.00
48,098.00
3,062.00
Gross Domestic Borrowings 364,698.00
546,329.00 (181,631.00)
Treasury Bills
(232,340.00)
76,000.00 (308,340.00)
Gross Flotation
181,926.00
520,575.00 (338,649.00)
Redemption
414,266.00
444,575.00 (30,309.00)
Fixed Rate Treasury Bonds
351,993.00
470,329.00 (118,336.00
Domestic Bond Exchange
30,981.00
30,981.00
Gross Flotation
323,454.00
- 323,454.00
Redemption
292,473.00
- 292,473.00
Retail Treasury Bonds
214,064.00
- 214,064.00
Less: Amortization
300,595.00
285,128.00
15,467.00
Net Domestic Borrowings
64,103.00
261,201.00 (197,098.00
Net Financing
115,263.00
309,299.00 (194,036.00)
Particulars

Difference between totals and sum of components is due to rounding off.


1
2
Based on 2011 Cash Operations Report, BTr
Based on 2012 BESF, DBM

123

Percent
1.28
56.19
(14.25)
(17.61)
(0.40)
5.98
(49.80)
132.71
(186.15)
(7.32)
(33.62)
100.00
100.00
100.00
100.00
5.15
(307.47)
(168.34)

6.3.2 Actual Borrowings P559.02 billion


The actual amount borrowed was P559.02 billion consisting of Domestic
P364.70 billion and Foreign P194.32 billion.
The foreign borrowings of P194.32 billion surpass the program level of
P191.84 billion in the aggregate. On the other hand, project loans contracted of
P25.55 billion and bonds floated of P120.21 billion did not exceed the program
level of P29.19 billion and P141.38 billion, respectively. The foreign payments
made during the year of P143.16 billion are lesser by P0.58 billion than the
programmed amount of P143.74 billion.
The domestic borrowings of P364.70 billion is lower by P181.63 billion
than the programmed amount of P546.33 billion. Treasury Bills floated
dramatically decreased by P338.65 billion or 186.15 percent as the BTr
prioritized the issuance of Retail Treasury Bonds due to its lower interest rate
and long-term maturities. Retail Treasury Bonds issued amounted to P214.06
billion. Of the domestic bond exchange gross flotation of P323.45 billion,
P292.47 billion was applied for maturing bond securities.

6.4 Status of NG Debt


6.4.1 Outstanding balance P4.940 trillion
As of December 31, 2010, the BTr reported the outstanding balance of NG
debt amounting to P4.730 trillion consisting of Bonds Payable-Domestic
P2.175 trillion, Loans Payable-Domestic P555.52 billion, Bonds PayableForeign P1.171 trillion and Loans Payable-Foreign P828.53 billion. The
adjustments to the accounts pertaining to 2010 transactions amounting to
negative P28.69 billion were made by that agency in 2011 and such adjustments
were only taken up in 2011.
In the 2011 Analysis of Loans and Bonds Payable submitted by the BTr,
the adjustments made were not effected in the beginning balances of the
accounts as of January 1, 2011 and they were neither shown as adjustments
affecting the beginning balances of the accounts. The computation of the
adjusted outstanding balances of the accounts as of January 1, 2011 after
considering the adjustments is presented below:

124

Particulars
Domestic
Bonds Payable
Loans Payables

Amount (in million pesos)


Outstanding as
Adjusted
Adjustments
of
Outstanding as
2010
12/31/10
of 12/31/10
2,730,221.45
(25,797.21)
2,704,424.24
2,174,701.89
(1.27)
2,174,700.62
555,519.56
(25,795.94)
529,723.62

Foreign
Bonds Payable
Loans Payables

1,999,604.54
1,171,071.27
828,533.28

(2,888.11)
(2,888.11)

1,996,716.44
1,171,071.27
825,645.17

Total NG Debt

4,729,825.99

(28,685.31)

4,701,140.68

Difference between totals and sum of components is due to rounding off.

As of December 31, 2011, the outstanding balance of NG debt consists of


Domestic P2.860 trillion or 57.89 percent and Foreign P2.080 trillion or
42.11 percent. The status of NG Debt is shown in Table VI-2.

Domestic
Treasury Bonds
Treasury Bills

Table VI-2 Status of NG Debt


(in million pesos)
Current Year
Outstanding
as of
Availments
Repayments
01/01/2011
2,704,424.24 1,501,004.30
1,346,852.93
2,174,700.62
889,510.50
503,016.03
529,723.62
611,493.80
843,836.90

Outstanding
as of
12/31/2011
2,860,442.11
2,563,061.59
297,380.52

Foreign
Bonds
Loans
Direct and Relent
Assumed
Total NG Debt

1,996,716.44
1,171,071.27
825,645.17
825,606.98
38.18
4,701,140.68

2,079,965.84
1,214,221.20
865,744.64
865,733.71
10.93
4,940,407.951

Particulars

202,784.84
122,235.05
80,549.79
80,549.79
1,703,789.15

150,837.97
85,277.51
65,560.46
65,545.96
14.50
1,497,690.90

Difference between totals and sum of components is due to rounding off.


Source: National Government Debt Accounting Division, BTr
1
Includes CY adjustments amounting to P33.17 billion

The domestic debt of P2.860 trillion consists of Bonds Payable and Loans
Payable amounting to P2.563 trillion or 89.60 percent and P297.38 billion or
10.40 percent, respectively.
The foreign debt of P2.080 trillion consists of Bonds Payable P1.214
trillion or 58.38 percent and Loans Payable P865.74 billion or 41.62 percent.

125

Shown in Chart VI-1 is the NG Debt by Source.

The bulk of the domestic Bonds Payable consists of Fixed Rate Treasury
BondsP1.047 trillion; Benchmark BondsP990.90 billion; Retail Treasury
BondsP435.84 billion; Treasury Bonds Central Bank-Board of Liquidator (CBBOL) P50.00 billion; Multi-rate Treasury Bonds P21.83 billion and Special
Purpose Treasury Bonds (CARP) P9.82 billion. While the domestic Loans
Payables include the amount pertaining to CB-BOL of P174.57 billion, Treasury
Bills of P120.50 billion, Development Bank of the Philippines (DBP) Assumed
loans of P2.29 billion, Treasury Bills-Certificated of P11.65 million and Treasury
Notes of P5.89 million. The DBP Assumed loans exist by virtue of Proclamation
No. 50 issued in 1986.
The outstanding foreign debt pertains to bonds issued such as US Bonds
P1.129 trillion; Japanese Yen Bonds P57.08 billion and Euro Bonds P28.42
billion. The foreign Loans Payable of P865.74 billion were contracted by the NG
from the following types of creditor: Bilateral P502.83 billion, Multilateral
P357.34 billion and Commercial P5.57 billion.
The balance of NG debt for 2011 posted an increase of P239.27 billion or
5.09 percent from P4.701 trillion in 2010. Shown in Table VI-3 is the comparative
outstanding NG debt for 2010 and 2011.
Table VI-3 Comparative Outstanding NG Debt
(in million pesos)
Increase
Particulars
2011
2010
(Decrease)
Domestic
2,860,442.11
2,704,424.24
156,017.87
Loans Payable
297,380.52
529,723.62
(232,343.10)
Treasury Bills - CB-BOL
174,568.30
174,568.30
Treasury Bills
120,500.50
352,843.60
(232,343.10)
DBP Assumed Loans
2,294.17
2,294.17
Treasury Bills-Certificated
11.65
11.65
Treasury Notes
5.89
5.89
-

126

Percent
5.77
(43.86)
(65.85)
-

(Table VI-3, continued)


Particulars

2011

2010

Bonds Payable
Fixed Rate Treasury Bonds
Benchmark Bonds
Retail Treasury Bonds
Treasury Bonds - CB-BOL
Multi Currency RTB (OFW)
Zero Coupon Treasury Bonds
Special Purpose Treasury
Bonds (CARP)
Certificated Treasury Bonds
Foreign
Loans Payable
NG Direct/Relent
NG-assumed (Proc. 50)
Bonds Payable
US Bonds
Japanese Yen Bonds
Euro Bonds
Total

2,563,061.59
1,046,527.54
990,896.26
435,844.23
50,000.00
21,830.93
8,131.60

2,174,700.62
867,635.25
872,140.39
292,150.04
50,000.00
21,921.49
54,679.60

Increase
(Decrease)
388,360.97
178,892.30
118,755.87
143,694.19
(90.56)
(46,548.00)

9,815.00
16.03
2,079,965.84
865,744.64
865,733.71
10.93
1,214,221.20
1,128,717.49
57,081.52
28,422.18
4,940,407.95

16,157.62
16.24
1,996,716.43
825,645.16
825,606.98
38.18
1,171,071.27
1,060,807.74
80,949.58
29,313.94
4,701,140.67

(6,342.62)
(0.21)
83,249.41
40,099.48
40,126.74
(27.25)
43,149.93
67,909.75
(23,868.06)
(891.76)
239,267.28

Percent
17.86
20.62
13.62
49.19
(0.41)
(85.13)
(39.25)
(1.29)
4.17
4.86
4.86
(71.38)
3.68
6.40
(29.49)
(3.04)
5.09

Difference between totals and sum of components is due to rounding off.


Source: National Government Debt Accounting Division, BTr

The aggregate domestic debt increased by P156.02 billion or 5.77 percent


compared to last years P2.704 trillion. As shown in the table, the balance of
Treasury Bills and Notes of P297.38 billion comprising Loans Payable Domestic
decreased by P232.34 billion or 43.86 percent compared to last years P529.72
billion, which could be attributed to the decline in Treasury Bills issuance during the
year in favor of flotation of bonds.
On the other hand, the outstanding Bonds Payable of P2.563 trillion increased
by P388.36 billion or 17.86 percent. This is attributed to the increase in Benchmark
Bonds P118.76 billion or 13.62 percent, Fixed Rate Treasury Bonds P178.89
billion or 20.62 percent, and Retail Treasury Bonds P143.69 billion or 49.19
percent. The increase was partly offset by the decrease in Zero Coupon Treasury
Bonds P46.55 billion or 85.13 percent, Special Purpose Treasury Bonds
Comprehensive Agrarian Reform Program (CARP) P6.34 billion or 39.25 percent
and Multi-Currency Retail Treasury Bonds P0.09 billion or 0.41 percent.
The foreign debt of P2.080 trillion is higher by P83.25 billion or 4.17 percent.
This is brought about by the net increase in amount of loans contracted and flotation
of bonds worth P40.10 billion or 4.86 percent and P43.15 billion or 3.68 percent,
respectively.
Bonds Payable increased by P43.15 billion or 3.68 percent resulting from the
increase in issuance of US bonds of P67.91 billion or 6.40 percent and decrease in
the issuance of Japanese Yen bonds of P23.87 billion or 29.49 percent and Euro
bonds of P0.89 billion or 3.04 percent.

127

The NG assumed loans of P10.93 million, pertaining to foreign loans of DBP


and National Development Company (NDC) assumed by the NG pursuant to
Proclamation No. 50, dropped by P27.25 million.
The legal sources of
Domestic debt of P2.860
trillion are as follows: R.A.
No. 245 P2.848 trillion or
99.57 percent; R.A. No.
6657 P9.82 billion or 0.34
percent Proclamation No.
50 P2.29 billion or 0.08
percent and R.A. No. 1000
P97.05 million or 0.003
percent. Shown in Chart
VI-2 is the domestic debt
by legal source.
The outstanding foreign
debt of P2.080 trillion was
sourced from the following
laws: R.A. No. 245 P1.214
trillion or 58.38 percent; R.A.
No. 8182 P651.83 billion or
31.34 percent; R.A. No. 4860
P213.91 billion or 10.28 percent
and Proclamation No. 50
P0.01 billion or 0.001 percent.
Shown in Chart VI-3 is the
foreign debt by legal source.
Domestic Debt
Availments/Issuances P1.501 trillion
The domestic debt issuances consist of Treasury Bills P611.49 billion and
Treasury Bonds P889.51 billion. Treasury Bills include the amount of P429.57
billion intended for the rehabilitation of the then Central Bank of the Philippines.
The BSP purchased the Treasury Bills issued by the BTr and the proceeds were
deposited with the BSP under the account of the Treasurer of the Philippines (TOP)
for used by the BTr in the redemption of maturing securities issued. This amount
forms part of the advances made by the NG to the BSP.
Bonds floated during the year of P889.51 billion consist of Fixed Rate
Treasury Bonds P348.94 billion or 39.23 percent; Benchmark Bonds P326.50
billion or 36.71 percent and Retail Treasury Bonds P214.06 billion or 24.07
percent. Table VI-4 shows the amount of domestic issuances with the corresponding
maturity period.

128

Table VI-4 Composition of Domestic Availments


(in million pesos)
92-181
Particulars
Totals
1-91 days
days
Treasury Bills
611,493.80
289,025.00
8,500.00
CB-BOL
429,568.30
255,000.00
5,000.00
Regular
181,925.50
34,025.00
3,500.00
Treasury Bonds
Fixed Rate Treasury Bonds
Benchmark Bonds
Retail Treasury Bonds
MRTB
Grand Total

Totals
889,510.50
348,941.70
326,504.78
214,064.02
1,501,004.30

4-10 years 15-20 years


461,054.19 356,495.31
231,466.50 45,514.20
70,667.63 255,837.15
158,920.06 55,143.96
-

182-364
days
313,968.80
169,568.30
144,400.50
25 years
71,961.70
71,961.70
-

Difference between totals and sum of components is due to rounding off.


Source: National Government Debt Accounting Division, BTr

Treasury Bills worth P289.02 billion with maturity period of 1-91 days
correspond to 47.27 percent of the total issuances. While those with maturity period
of 92-181 days of P8.50 billion and 182-364 days of P313.97 billion are equivalent
to 1.39 percent and 51.34 percent of the total issuances, respectively. For the
Treasury Bonds floated, the maturity period are as follows: P461.05 billion or
51.83 percent 4-10 years; P356.50 billion or 40.08 percent 15-20 years and
P71.96 billion or 8.09 percent 25 years.
Repayments/Redemptions P1.347 trillion
Redemptions during the year of P1.347 trillion include Bonds P503.02
billion or 37.35 percent and Treasury Bills and Notes P843.84 billion (including
those for the CB-BOL of P429.57 billion) or 62.65 percent.
Bonds redeemed of P503.02 billion consist of Benchmark Bonds P207.75
billion or 41.30 percent; Fixed Rate Treasury Bonds P170.05 billion or 33.81
percent; Retail Treasury Bonds P70.37 billion or 13.99 percent; Zero Coupon
Bonds P46.55 billion or 9.25 percent; Special Purpose Treasury Bonds (SPTB)
CARP P6.34 billion or 1.26 percent and Agrarian Reform Bonds P1.96 billion
or 0.39 percent.

Foreign Debt
Availments/Issuances P202.78 billion
The availments during the year of P202.78 billion were made through flotation
of bonds amounting to P122.24 billion or 60.28 percent and contracting by the NG
of direct and relent loans of P80.55 billion or 39.72 percent. Table VI-5 shows the
availments made by the NG during the year.

129

Table VI-5 Foreign Availments


(in million pesos)
Particulars

122,235.05
65,293.50
54,770.00
2,171.55
80,549.79
55,468.23

Percent
to Total
60.28
32.20
27.01
1.07
39.72
68.86

40,751.79
11,809.28
2,377.75
317.04
212.37
25,081.56
8,681.06
5,332.42
1,563.00
892.16
583.16

73.46
21.29
4.29
0.57
0.38
31.14
34.61
21.26
6.23
3.56
2.33

368.64
247.88
7,413.25
202,784.84

1.47
0.99
29.56
100.00

Amount

Bonds
Philippine Global Bonds
Global Bonds
Global Bond Exchange
Direct/Relent Loans
Cash Availment
International Bank for Reconstruction and
Development
Asian Development Bank
Japan Bank for International Cooperation
International Fund for Agricultural Development
Other Creditors
Constructive Receipts of Cash
Japan Bank for International Cooperation
BNP Paribas
Eximbank of China
Saudi Fund for Development
Eximbank of Korea
International Bank for Reconstruction and
Development
Asian Development Bank
Other Creditors
Total
Difference between totals and sum of components is due to rounding off.
Source: National Government Debt Accounting Division, BTr

The bonds consist of: Global Bonds P54.77 billion or 44.80 percent,
denominated in foreign currency issued to foreign investors; Global Bond Exchange
P2.17 billion or 1.78 percent, which is a bond swap transaction of old bonds to
new bonds; and Philippine Global Bonds P65.29 billion or 53.42 percent, issued
to foreign investors in Philippine currency.
The direct and relent loans contracted by the NG include cash availments of
P55.47 billion while the amount of P25.08 billion was received in kind. Of the
amount of cash availed, IBRD provided P40.75 billion while JBIC and ADB lent
P2.38 billion and P11.81 billion, respectively. For availments received in kind, the
JBIC accounted for P8.68 billion and BNP Paribas shared P5.33 billion.
Repayments/Redemptions P150.84 billion
Repayments for direct, relent and assumed loans reached P65.56 billion. Table
VI-6 shows the creditors where repayments were made.

130

Creditor
JBIC
ADB
IBRD
JEXIM
Deutsche Bank
BNP Paribas
Other Creditors
Total

Table VI-6 Repayments by Creditor


(in million pesos)
Direct
Relent
Assumed
22,648.51
6,900.53
11,702.46
344.75
6,090.74
5,015.45
4,700.70
1,700.29
6,164.41
278.15
14.50
58,022.55
7,523.43
14.50

Total
29,549.04
12,047.20
6,090.74
5,015.45
4,700.70
1,700.29
6,457.06
65,560.47

Difference between totals and sum of components is due to rounding off.


Source: National Government Debt Accounting Division, BTr

Of the amount paid, P29.55 billion or 45.07 percent went to JBIC, a bilateral
creditor. The ADB and IBRD, both multilateral creditors accounted for P12.05
billion or 18.38 percent and P6.09 billion or 9.29 percent, respectively. For the
assumed loans, the amount of P14.50 million was paid.
Payments made for matured pre-terminated Global Bonds reached P85.28
billion.
6.5 NG Debt Growth
For the ten year period, 2002 to 2011, NG debt has grown by an average of
P214.19 billion or 6.01 percent as shown in Table VI-7. The biggest growth of P503.02
billion or 17.97 percent was in 2003. From 2004 to 2006, NG debt is at decreasing level
and in 2007 a negative amount of P99.39 billion or 2.56 percent was noted. This was
brought about by the decrease in foreign debt of P145.48 billion or 8.52 percent which
was partially offset by an increase in domestic debt of P46.09 billion or 2.12 percent. In
2008, NG debt grew by P356.52 billion or 9.43 percent and since then, the increases
and decreases in amount were noted.

NG
Year

Amount

Annual
Growth

2002
2003
2004
2005
2006
2007
2008
2009
2010
2011

2,798.50
3,301.52
3,699.81
3,878.70
3,880.87
3,781.48
4,138.00
4,348.08
4,701.14
4,940.41

503.02
398.29
178.89
2.17
(99.39)
356.52
210.08
353.06
239.27

Ave.

3,946.85

214.19

Table VI-7 Growth of Outstanding NG Debt


2002 to 2011
(in billion pesos)
Domestic
Annual
Annual
Annual
Growth
Amount
Growth
Amount
Growth
Rate
Rate
1,531.90
1,266.60
17.97
1,739.95
208.05
13.58
1,561.57
12.06
2,002.19
262.24
15.07
1,697.62
4.84
2,183.58
181.39
9.06
1,695.12
0.06
2,172.73
(10.85)
(0.50)
1,708.14
(2.56)
2,218.82
46.09
2.12
1,562.66
9.43
2,440.90
222.08
10.01
1,697.10
5.08
2,480.83
39.93
1.64
1,867.25
8.12
2,704.42
223.59
9.01
1,996.72
5.09
2,860.44
156.02
5.77
2,079.97
6.01

2,233.58

132.85

131

6.58

1,713.28

Foreign

294.97
136.05
(2.50)
13.02
(145.48)
134.44
170.15
129.47
83.25

Annual
Growth
Rate
23.29
8.71
(0.15)
0.77
(8.52)
8.60
10.03
6.93
4.17

81.34

5.38

Annual
Growth

Domestic debt grew by an average of P132.85 billion or 6.58 percent. The biggest
growth was in 2004 with P262.24 billion or 15.07 percent. On the other hand, the
average growth of foreign debt is P81.34 billion or 5.38 percent, with the highest
growth of P294.97 billion or 23.29 percent seen in 2003. Chart VI-4 shows the growth
of domestic and foreign debt from 2002-2011.

Chart VI-4 NG Debt Growth


(in billion pesos)

6.6 Debt Service Expenditures


Chart VI-5 Actual Debt Service Expenditures of the NG
(in billion pesos)

The
amount paid
for
servicing domestic and foreign
debt totaled P1.780 trillion
consisting of Principal Repayment
P1.498 trillion or 84.14 percent;
Interest P272.89 billion or 15.33
percent and financial charges
P9.33 billion or 0.52 percent. Chart
VI-5 shows the composition of
debt service expenditure for 2011.

132

Principal P1.498 trillion


Principal repayments of P1.498 trillion consist of Domestic P1.347 trillion or
89.93 percent and Foreign P150.84 billion or 10.07 percent. Chart VI-6 shows the
principal repayment of the NG for 2011.

Interest P272.89 billion


Compared to the 2010 amount of P292.43 billion, interest went down by P19.53
billion or 6.68 percent. Table VI-8 shows the comparative amount of interest paid by
the NG for domestic and foreign loans.

Table VI-8 Comparative Interest Payments of the NG


Amount (in million pesos)
Increase
Particulars
(Decrease)
2011
2010
Foreign
102,943.71 111,969.08 (9,025.37)
Global Bond
86,351.91
95,126.20 (8,774.29)
Direct/Relent
16,591.34
16,842.20
(250.86)
Assumed
0.46
0.68
(0.22)
Domestic
169,951.03 180,456.28 (10,505.25)
Bonds
164,313.62 158,653.17
5,660.45
T-Bills, Notes and
5,637.41
21,803.11 (16,165.70)
Total
272,894.74 292,425.36 (19,530.62)
Difference between totals and sum of components is due to rounding off.
Source: 2011 Financial Statements, BTr

133

Percent
(8.06)
(9.22)
(1.49)
(32.35)
(5.82)
3.57
(74.14)
(6.68)

Interest for foreign loans of P102.94 billion showed a decrease of P9.03 billion
compared to the previous years amount of P111.97 billion. Payments made for Direct
and Relent foreign loans amounting to P16.59 billion also showed a decrease of P0.25
billion or 1.49 percent. On the other hand, interest paid for Global Bonds flotation
reached P86.35 billion.
Payments made on Interest for domestic debt of P169.95 billion went down by
P10.51 billion or 5.82 percent.

Other Financial Expenses P9.33 billion


Other Financial Expenses of P9.33 billion were incurred, for domestic debt
P7.29 billion or 78.12 percent and for foreign debt P2.04 billion or 21.88 percent.
Domestic expenses consist of Documentary Stamp Tax P7.09 billion and Other
Financial Charges P0.20 billion. Table VI-9 shows the comparative other financial
expenses paid by the NG.

Table VI-9 Comparative Other Financial Expenses of the NG


Amount (in million pesos)
Particulars
(Increase Percent
2011
2010
(Decrease)
Foreign
2,042.32
5,981.99 (3,939.67)
(65.86)
Commitment Fees
330.89
394.50
(63.61)
(16.12)
Documentary Stamp Tax
611.17
1,483.51
(872.34)
(58.80)
Other Financial Charges
1,047.26
4,077.25 (3,029.99)
(74.31)
Bank Charges
53.00
26.73
26.27
98.28
Domestic
7,291.40
5,722.69
1,568.71
27.41
Documentary Stamp Tax
7,091.29
5,576.09
1,515.20
27.17
Other Financial Charges
200.11
146.60
53.51
36.50
Total
9,333.72 11,704.68 (2,370.96)
(20.26)
Difference between totals and sum of components is due to rounding off.
Source: 2011 Financial Statement, BTr

Financial expenses paid for foreign debt of P2.04 billion decreased by P3.94
billion or 65.86 percent compared to last years amount of P5.98 billion. Commitment
fees paid by the NG for the undrawn foreign loans decreased during the year.
Documentary Stamp Tax related to the issuance of global bonds also decreased. The
Other Financial charges of P1.05 billion include the capitalized service charge of
P11.55 million imposed by JBIC; front-end fee of P144.41 million paid to IBRD and
the amount related to the issuance of foreign currency denominated bonds of P891.30
million.

134

The financial expenses of P7.29 billion incurred for domestic debt transactions
increased by P1.57 billion or 27.41 percent. Payment for documentary stamp tax of
P7.09 billion increased by P1.52 billion or 27.17 percent while other financial charges
of P200.11 million increased by P53.51 million or 36.5 percent. No bank charges
related to domestic debt transactions was reported for the year.

6.7 Appropriations, Allotments and Balances


6.7.1 For Implementation of Foreign-Assisted Projects
6.7.1.1 Appropriations P55.96 billion
Appropriations provided in the 2011 GAA, R.A. No.10147, intended for the
implementation of various projects funded by foreign loans totaled P55.96 billion,
broken down into Personal Services P0.03 billion, MOOE P7.40 billion and CO
P48.53 billion. Of the total, P42.13 billion was funded out of the loan proceeds
while the balance of P13.83 billion was financed by a counterpart fund provided by
the NG.
The appropriations are provided in the GAA under the regular or built-in
appropriations of the implementing agencies concerned and in the Unprogrammed
Fund, a Special Purpose Fund. Table VI-10 shows the Summary of Appropriations
for Foreign-Assisted Projects by department/agency:

Table VI-10 Appropriations for Foreign-Assisted Projects by


Department/Agency
(in million pesos)
Appropriations
Department
PS
MOOE
CO
Total
Regular
29.15 6,948.88 38,179.88
45,157.91
DPWH
228.16 22,476.29
22,704.45
DA
1.66 2,106.37
5,886.20
7,994.23
DOTC
6,152.16
6,152.16
DAR
14.95
856.74
1,277.51
2,149.21
DSWD
- 1,969.22
32.11
2,001.33
DOF
33.54
1,456.07
1,489.61
ARMM
12.54
450.63
475.65
938.82
DOH
401.32
148.00
549.33
DOE
388.13
37.17
425.30
DENR
213.72
206.28
420.00
DOST
223.86
223.86
PCOO
33.00
32.44
65.44
DTI
44.18
44.18

135

(Table VI-10, continued)

Department

PS

Unprogrammed Fund
Unallocated
DSWD
DAR
DA
Total

29.15

Appropriations
MOOE
CO
455.19 10,351.47
149.11 10,289.38
300.00
59.64
6.08
2.45

Total
10,806.66
10,438.49
300.00
59.64
8.53

7,404.06

55,964.57

48,531.36

Difference between totals and sum of components is due to rounding off.

The Appropriations by department/agency/project are shown under Schedule


32, Volume I-B of this report.

6.7.1.2 Allotments P42.55 billion


Of the amount appropriated, P42.55 billion or 76 percent was released as
follows: PS P0.02 billion, MOOE P6.83 billion and CO P35.70 billion. The
release of allotments by department/agency is shown in Table VI-11.
Table VI-11 Allotments for Foreign-Assisted Projects by
Department/Agency
(in million pesos)
Allotments
Department
PS
MOOE
CO
Total
Regular
23.67
6,524.05
35,639.01
42,186.73
DPWH
228.16
21,861.13
22,089.30
DA
0.25
1,844.79
5,820.20
7,665.24
DOTC
4,591.60
4,591.60
DSWD
1,969.22
17.04
1,986.25
DAR
10.88
693.50
1,196.95
1,901.33
DOF
33.54
1,315.55
1,349.09
ARMM
12.54
450.63
475.65
938.82
DOH
401.32
85.00
486.33
DOE
388.13
37.17
425.30
DENR
213.72
206.28
420.00
DOST
223.86
223.86
PCOO
33.00
32.44
65.44
DTI
44.18
44.18
Unprogrammed Fund
306.08
62.09
368.17
DSWD
300.00
300.00
DA
6.08
2.45
8.53
DAR
59.64
59.64
Total
23.67
6,830.13
35,701.09
42,554.89
Difference between totals and sum of components is due to rounding off.

The Appropriations, Allotments and Balances for Foreign-Assisted Projects by


department/agency are presented in Schedule 33, Volume I-B of this report.

136

6.7.1.3 Unreleased Appropriations P13.41 billion


At yearend, the unreleased balance of appropriations reached P13.41 billion
broken down as follows: PS P0.01 billion, MOOE P0.57 billion and CO
P12.83 billion. Of this balance, the DOTC accounted for P1.56 billion or 11.64
percent while the Unprogrammed Fund amounted to P10.44 billion or 77.84
percent. Other departments with unreleased amount of appropriations are as
follows: DPWH P615.15 million; DA P328.99 million; DAR P247.87
million; DOF P140.52 million; DOH P63 million and DSWD P15.08 million.

6.7.2

For Debt Service


Appropriations for servicing domestic and foreign debts are automatically
appropriated pursuant to Section 26, Chapter IV, Book VI of E.O. No. 292 entitled
Instituting the Administrative Code of 1987; Section 31 of Presidential Decree No.
1177, Budget Reform Decree; and R.A. No. 4860, as amended, Foreign Borrowings
Act. During the year, the automatic appropriations covered by Special Allotment
Release Order released by the DBM to the BTr to settle debt service expenditures are
as follows:

Particulars
Principal
Interest
Documentary Stamps Tax
Loss on Guaranty
Other Financial Charges
Commitment Fess
Bank Charges
Total

Appropriations (in million pesos)


Domestic
Foreign
Total
299,289.78
144,906.34
444,196.12
161,168.08
100,635.93
261,804.01
7,091.28
611.18
7,702.46
3,156.76
3,156.76
200.11
548.44
748.54
305.99
305.99
52.99
52.99
467,749.25
250,217.63
717,966.87

The appropriation for servicing domestic debt and foreign debt amounted to
P467.75 billion or 65.15 percent and P250.22 billion or 34.85 percent,
respectively. Of the appropriated amount, P444.20 billion or 61.87 percent was
intended for principal repayment; P261.80 billion or 36.46 percent was for interest
and the balance of P11.97 billion or 1.67 percent was for documentary stamps tax,
foreign exchange risk cover, commitment fees, bank charges and other financial
charges.
The released allotments of P717.97 billion is lesser than the amount of debt
service expenditures recorded at the BTr of P1.783 trillion. The following are the
explanations given by the BTr on the discrepancies of P 1.065 trillion between the
Special Allotment Release Order (SARO) releases and actual debt service
expenditures:

137

Reconciliation of SARO Releases and Actual Debt Service Expenditures


Amount (in million pesos)
DBM
SARO
Releases
444,196.12
299,289.78

BTr FS

Difference

1,497,690.90
1,346,852.93

(1,053,494.79)
(1,047,563.16)

144,906.34

150,837.97

(5,931.63)

266,068.29

277,682.75

(11,614.46)

261,804.01

272,894.74

(11,090.73)

Bank Charges
Other Financial Charges

52.99
748.54

52.99
1,247.37

(498.83)

Commitment Fees

305.99

330.89

(24.90)

Loss on Guaranty

3,156.76

3,156.76

__7,702.46
717,966.87

7,702.46
1,783,076.12

_ __
(1,065,109.25)

Particulars
Principal Payment
Domestic

Foreign

Total Interest and Other


Charges
Interest

Documentary Stamp Tax


Total

138

Explanations

The amount of SARO releases is the


contribution to the sinking fund for the
year. The actual payment/redemption of
the government securities, which is
bigger than the released SAROs, came
from the sinking fund.
The payment made for the relent loans
were not included in the request for
SARO releases since these were
considered receivable of the national
government and payments are expected
for the amount advanced.

Non-cash transactions for the capitalized


interest and amortization of interest
expense for zero coupon bonds,
premium/discount for the global bonds
and bond exchange transactions.

Non-cash transactions for the capitalized


other financial charges.
Non-cash transactions for the capitalized
commitment fees.

VII. SPECIAL ACCOUNTS IN


THE GENERAL FUND

SPECIAL ACCOUNT IN THE GENERAL FUND

7.1 Introduction
The General Appropriations Act (GAA) includes general and specific provisions
on Special Account in the General Fund (SAGF) intended for various specific purposes
which are sourced from grants and donations, collections of specific fees, charges,
premiums, among others. Exempted from these are donations for specific purposes with
a term not exceeding one (1) year and which shall be treated as trust receipts pursuant to
Section 12 of R.A. 10147, the 2011 GAA.
7.1.1 Legal Basis/Purpose
Presidential Decree No. 1234 dated November 8, 1977 provides that the
establishment of Special and Fiduciary Funds has been authorized from time to
time in order to facilitate the funding of priority activities of Government
including those undertaken by GOCCs. This decree contains the following
provisions quoted as follows:
Section 1. All income and collections for Special or Fiduciary Funds
authorized by law shall be remitted to the Treasury and treated as SAGF xxx
corporations.
Section 2. The amounts collected and accruing to Special or Fiduciary Funds
shall be considered as being automatically appropriated for the purposes
authorized by law creating the said Funds, except as may be otherwise
provided in the General Appropriations decree.
Section 3. The amounts collected under Special or Fiduciary Funds shall be
released to the implementing agencies subject to the approval of the President
and to Special Budget under Section 40 of P.D. No. 1177: PROVIDED, That
funds needed for regular operations or other duly authorized purposes may be
automatically released under such conditions as may be approved by the
President.
Section 4. The funds once released shall be administered by the government
agency or corporations concerned and shall be utilized only for the purposes
authorized in the law creating the said Special or Fiduciary Funds.
7.1.2 Existing Accounting Procedures
The New Government Accounting System (NGAS) adopts the one fund
concept and provides that separate accounting shall be done only when
specifically required by law or by a donor agency or when otherwise necessitated
by circumstances subject to prior approval of the Commission.
PD No. 1234 authorized the creation of the SAGF, thus, departments and
agencies maintain separate books of accounts for these funds. However, upon
implementation of the NGAS, some departments/agencies integrated the SAGF

139

transactions with the General Fund 101. The list of departments/agencies with
SAGF is presented in Annex A of Volume I-B of this Report.
Income of government agencies which was constituted as SAGF was
remitted to the National Treasury and disbursed by means of separate MDS check
series and subject to the issuance of SAROs and NCAs by DBM, except those
authorized to maintain bank accounts with government depository banks and/or
exempted from the provisions of Executive Order No. 338.
7.2 Financial Data
The financial data contained in this report were derived from the consolidation
of the balances of the accounts reflected in 72 SAGF/Special Fund trial balances as of
December 31, 2011, which were submitted by 19 departments/agencies, while the
budgetary data were based on the consolidated statement of appropriations, allotments
and obligations prepared by this Sector. The data also includes income accruing to
SAGF which were collected by various NGAs and remitted to the National Treasury.
However, balances of accounts pertaining to CARP Fund 158 were excluded as these
are presented in a separate chapter of this report. Likewise, those accounts pertaining to
the receipt and utilization of the SAGF, for which no books of accounts were separately
maintained, were excluded but were instead integrated in the respective agencys
consolidated trial balances.
7.2.1 Appropriations, Allotments and Obligations
For the calendar year 2011, the total appropriations for SAGF, net of
CARP, totalled P37.13 billion, of which P37.12 billion was released, leaving a
balance of P0.01 billion. The total obligations incurred amounted to P13.36 billion
as shown in Table VII-1 below.
Table VII-1 Appropriations, Allotments and Obligations
Special Account in the General Fund (Net of CARP)
(in million pesos)
Department

Appropriations

National Defense
Public Works and Highways
Finance
Other Executive Offices
Energy
Education
Agriculture
Interior and Local Government
Environment and Natural Resources
Transportation and Communications
Justice
Budget and Management
Labor and Employment

140

14,445.46
8,839.61
7,911.15
1,219.28
894.95
750.94
634.27
568.52
522.29
450.38
370.34
235.39
98.78

Allotments
14,445.46
8,839.61
7,911.15
1,219.28
894.95
750.94
634.27
568.52
505.84
450.38
370.34
235.39
98.78

Obligations
660.61
2,399.54
7,743.13
376.78
310.67
152.86
375.30
142.21
123.46
349.05
306.55
206.89
91.94

Table VII-1 continued

Department

Appropriations

Health
Office of the President
National Economic Development
Authority
Social Welfare and Development
Trade and Industry
Tourism
Science and Technology
Totals

Allotments

Obligations

44.81
41.24

44.81
41.24

41.08
35.94

40.67
23.75
22.71
15.00
4.61
37,134.15

40.67
23.75
22.71
15.00
4.61
37,117.71

14.63
8.18
3.48
15.00
4.46
13,361.76

Difference between totals and sum of components is due to rounding off.

7.2.2 Assets, Liabilities and Equity


As of December 31, 2011, the total assets, liabilities and equity of the SAGF
excluding CARP Fund 158 amounted to P73.53 billion,
P16.44 billion and
P57.10 billion, respectively. Shown in Chart VII-1 are the total SAGF assets,
liabilities and equity of all department of the National Government.
The top five departments with the biggest SAGF assets are the DOF-P33.70
billion, DND-P19.95 billion, OEO-P8.23 billion, DOE-P3.72 billion and DPWHP2.77 billion. The majority of the SAGF asset of DOF arose from the remittances
of income of various government agencies accruing to the SAGF, while the SAGF
assets of DND, OEO, DPWH, and DOE were mostly from the AFP
Modernization Trust Fund, CHED-HEDF, Road Board and Special Fund for
energy resource development and exploration programs and projects, respectively.
Chart VII-1 Total Assets, Liabilities and Equity By Department
Special Account in the General Fund (Net of CARP)
(in billion pesos)

80,000.00

73.54

70,000.00

DPWH2.77
DOE3.72

60,000.00

OEO8.23

50,000.00

DND19.95

57.10
DOE3.72
OEO3.72
DND18.94

40,000.00
30,000.00
20,000.00

DOF33.70

16.44
DOE9.66

10,000.00

OEO4.51

(10,000.00)

DOF33.37

DOE5.94

TotalAssets

Total
Liabilities

141

TotalEquity

PRRC
DOST
OP
DSWD
NEDA
DOT
DTI
DENR
DOTC
DOLE
JUDICIARY
DILG
DOJ
DA
DPWH
DOE
OEO
DND

The Department of Energy had the biggest SAGF liabilities with P9.66
billion, 96 percent of which are Due to National Treasury consisting of
revenue/receivables of the government for its share or royalties from
service/operating contracts and other fees, and interest earned from bank deposits.
Aside from the DOE, the OEO, DND, DOF, and DPWH have the biggest SAGF
liabilities amounting to P4.51 billion, P1.01 billion, P 0.32 billion and P 0.26
billion, respectively.
The departments with the biggest share in SAGF equity are the DOF-P33.37
billion, DND-P18.94 billion, OEO-P3.72 billion, DPWH-P2.49 billion and DAP1.43 billion. However, the DOE posted a negative equity which was mainly due
to the prior years adjustment relative to the loss on sale of the subrogated banked
gas under Service Contract No. 38 Malampaya Natural Gas Project amounting
to P13.82 billion; and direct payments relative to World Bank and ADB Foreign
Assisted Projects awaiting NCAA from the DBM.
7.2.3 Income and Expenses
For the calendar year 2011, the aggregate income recorded accruing to
SAGF amounted to P49.86 billion consisting of Service Income-P39.52 billion,
Motor Vehicle Users Charge-P10.10 billion, Permits and Licenses-P16.65,
Business Income P0.17 million and Other Income P218.42 million. The top five
departments with substantial income constituted as SAGF are the DOE, DPWH,
DND, DOF and OEO with P20.07, P9.26, P7.62, P5.60 and P2.44 billion,
respectively. Income from Malampaya exploration and motor vehicles users
charges are the main sources of income of DOE and DPWH, respectively. Shown
in Chart No. VII-2, below is the composition of the total SAGF income, net of
CARP.
Chart VII-2 - Income by Department
Special Account in the General Fund (Net of CARP)
(in billion pesos)

OEO2.44
DND7.62

DOTC1.64

DOF 5.60

DOH 0.04

DOJ1.10
DILG0.85
DSWD0.45

DPWH9.26

OP 0.04
DENR 0.15

DA0.32

NEDA
0.01

DOLE 0.24
Other0.49

DOE20.07

142

DOT 0.01

The total SAGF income does not include the net Gain on Foreign
Exchange and Sale of Disposed Assets amounting to P50.61 million and income
of various agencies which are still for deposit to the National Treasury.
Based on the certified income remitted to the National Treasury, the
departments/agencies request for allotments and NCAs to enable them to utilize
the fund for the intended purpose/s of SAGF.
As shown in Table VII-3 below, the Department of Finance has the
biggest expenses, the bulk of which pertain to subsidies to the National Power
Corporation, National Electrification Administration and Cultural Center of the
Philippines amounting to P6.62 billion, P814.41 million and P5.0 million,
respectively. Of the total expenses of the DPWH, 94 percent or P3.78 billion are
repairs and maintenance of the Roads and Bridges as accounted by the Road
Board.
Table VII-3 Expenses by Department/Office
Special Account in the General Fund (Net of CARP)
(in million pesos)
Total
PS
MOOE
Department
Finance
7,695.15
7,695.00
Public Works and Highways
4,023.51
27.72
3,995.77
Other Executive Offices
897.87
16.22
881.64
National Defense
664.67
0.07
664.55
Justice
377.70
65.33
312.37
Transportation and Communications
350.84 213.69
137.15
Energy
228.84
228.84
Trade and Industry
209.92
0.86
209.06
Judiciary
155.61
155.61
Environment and Natural Resources
120.86
120.82
Agriculture
118.03
5.04
112.80
Labor and Employment
76.47
76.13
Office of the President
75.03
3.95
71.08
Interior and Local Government
66.74
66.73
Social Welfare and Development
31.51
31.51
National Economic and Development
Authority
6.89
6.89
Science and Technology
4.63
4.63
Tourism
2.70
2.70
Pasig River Rehabilitation Commission
0.02
0.02
Totals
15,107.00 332.89 14,773.30
Difference between totals and sum of components is due to rounding off.

143

FE
0.15
0.02
0.01
0.04
0.03
0.19
0.34
0.01
0.01
0.81

VIII. COMPREHENSIVE
AGRARIAN REFORM
PROGRAM

COMPREHENSIVE AGRARIAN REFORM PROGRAM


8.1 Introduction
The Comprehensive Agrarian Reform Program (CARP) was created pursuant to
Article XIII of the 1987 Philippine Constitution. The Comprehensive Agrarian Reform
Law (CARL) or Republic Act (R.A.) No. 6657 was passed on June 15, 1988 to protect
the rights of farmers, farmworkers, and landowners, as well as cooperatives, and other
independent farmers. As one of the major social reform programs of the government, it
is now on its 23rd year of implementation, having it started upon signing of the CARL.
Though the implementation of the law was expected to last for ten years, extensions
were made due to the widespread and vast coverage of the program and voluminous
activities that has to be undertaken. The first extension was for a period of ten years
from June 1998 to December 2008 through the passage of R.A. No. 8532 in February
1998. The program was again extended for another five years from July 2009 to June
30, 2014 by virtue of R.A. No. 9700, the CARP Extension Law.
The Presidential Agrarian Reform Council (PARC) was created under Section
18 of Executive Order No. 229 and Section 41 of R.A. No. 6657 to guarantee the timely
and effective delivery of services to the beneficiaries and to manage and direct the
CARP at the national level. The Council is chaired by the President and ably assisted by
the Secretaries/Heads of implementing agencies. On the other hand, the organization,
harmonization of inter-agency linkages and evaluation of CARP projects are handled by
the PARC Secretariat pursuant to Section 43 of R.A. No. 6657. At the grassroots level,
the delivery of agrarian reform activities to the people is being coordinated by the
Provincial Reform Coordinating Committee.
8.2 Major Components of CARP and its Implementing Agencies
The CARP consists of three major components namely: 1) Land Tenure
Improvement (LTI) addresses the inequality of resources by providing access to
agricultural lands and security of tenure to the Agrarian Reform Beneficiaries (ARBs)
through the land acquisition and distribution activity; 2) Agrarian Justice Delivery
(AJD) aims to provide agrarian legal assistance and the adjudication of cases to
ensure appropriate and timely resolution of agrarian reform issues; and 3) Program
Beneficiaries Development (PBD) comprises the provision for trainings, credit access
and construction of infrastructure projects, specifically farm-to-market-roads and
communal irrigation projects. The PBD ensures that ARBs possesses the capability to
make their newly-awarded lands productive.
The implementation of the CARP is the primary responsibility of the
Department of Agrarian Reform (DAR). Other departments/agencies which act as
implementing agencies of the CARP, with their roles and responsibilities, are as
follows: a) Department of Environment and Natural Resources (DENR) in-charge of
land surveys and distribution of free patents and stewardship contracts to beneficiaries
of public and alienable and disposable lands suitable to agriculture and agro-forestry
areas; b) Department of Agriculture (DA) responsible for agricultural extension
services; c) Land Bank of the Philippines (LBP) land evaluation, collection of land
amortization from farmer-beneficiaries and provision of credit facilities and other
144

technical assistance to both farmer-beneficiaries and landowners; d) Land Registration


Authority (LRA) registration of land titles; e) National Irrigation Administration
(NIA) mobilization and development of vital farm-related infrastructures, such as
irrigation systems, small impounding dam, access trails, rural roads, ports and other
basic facilities; f) Department of Public Works and Highways (DPWH) construction
of farm-related infrastructure facilities, including roads; g) Department of Trade and
Industry (DTI) rural industrialization; and h) Department of Labor and Employment
(DOLE) in-charge of farm workers organizations.
8.3 Funding Sources for CARP
Due to the passage of R.A. No. 9700, the NG has to appropriate funds yearly to
cover the cost of land acquisition and distribution, support services, agrarian justice
delivery and other funding requirements during the extension period. For fiscal year
2011, a total of P11.98 billion was appropriated in the General Appropriations Act,
R.A. No. 10147, broken down as follows: Personal Services P2.36 billion,
Maintenance and Other Operating Expenses P9.47 billion and Capital Outlays P150
million. Table VIII-1 shows the distribution of appropriations for CARP by IA.
Table VIII-1 Appropriations of CARP
(in million pesos)
Implementing
Total
PS
MOOE
Agency
DAR
6,971.51
2,093.38
4,878.13
DOF-LBP
3,966.11
3,966.11
DENR
614.21
83.46
530.75
DA-NIA
248.18
67.84
30.33
DOJ-LRA
106.04
73.19
32.85
DTI
75.18
43.28
31.89
Total
11,981.23
2,361.15
9,470.07

CO
150.00
150.00

Difference between totals and sum of components is due to rounding off.

8.4 Appropriations, Allotments and Obligations


During the year, the CARP implementing agencies reported the following
financial data as shown in the Statement of Appropriations, Allotments, Obligations and
Balances. In addition to the amount appropriated in the GAA, this years CARP
appropriations reached P13.81 billion comprising of Current Years Appropriations
P13.10 billion, Allotted Continuing Appropriations P575.35 million and Unreleased
Continuing Appropriations P150.00 million. Total allotments received reached P13.20
billion while obligations incurred amounted to P10.96 billion. This years obligations
are as follows: Personal Services - P2.99 billion, Maintenance and Operating Expenses
P7.71 billion and Capital Outlays P258.93 million. Presented in Table VIII-2 is the
Statement of Appropriations, Allotments, Obligations and Balances by IAs.

145

Table VIII-2 Statement of Appropriations, Allotments, Obligations and Balances


( in million pesos)
Implementing
Agency

Appropriations

Allotments

Obligations

8,629.33
3,966.11
702.64
293.03
109.69
74.90
29.38
13,805.08

8,032.76
3,966.11
702.64
280.18
109.69
74.90
29.38
13,195.66

5,956.11
3,966.11
589.87
251.70
101.51
72.35
22.55
10,960.20

DAR
DOF-LBP
DENR
DA-NIA
DOJ-LRA
DTI
DPWH
Total

Unobligated
Balance

Unreleased
Appropriations

2076.65
112.77
28.48
8.18
2.55
6.83
2,235.46

596.57
12.85
-

31.89
609.42

Difference between totals and sum of components is due to rounding off.

Of the total allotments of P13.20 billion and obligations of P10.96 billion, the
DAR reported 60.87 percent or P8.03 billion and 54.34 percent or P5.96 billion,
respectively. As in last year, the DOF-LBP ranked second with both allotments and
obligations of P3.97 billion which was fully obligated due to the release of subsidy to
LBP to cover payment of LBP bonds issued to the farmers.
8.5 Financial Highlights
8.5.1 Balance Sheet
The total Assets of the CARP as of December 31, 2011, reached P93.48 billion
comprising of Current Assets of P24.87 billion and Non-Current Assets of P68.61
billion as shown in Table VIII-3. Of the total Current Assets, P14.18 billion or 57.02
percent consists of Receivables, the bulk of which pertains to Accounts Receivables
(Net) P6.77 billion, Due from GOCCs P3.12 billion and Due from Local
Government Units - P1.25 billion.
The Non-Current Assets of P68.61 billion, on the other hand, composed mainly
of Property, Plant and Equipment (PPE) P66.38 billion and Investments P2.08
billion. The total PPE comprised primarily of Land and Land Improvements of P62.30
billion, the bulk of which was reported by DOF-LBP P45.15 billion and PCGG
P16.02 billion.
Table VIII-3 Balance Sheet
(in million pesos)
17,295.46
137.50
137.50
-

DOF LBP
64,446.63
18,963.32
7,788.41
11,162.69
12.21
-

93,483.20
24,868.28
10,341.12
14,179.86
293.93
46.81

0.01

6.56

1,852.30
-

3.80
-

17,157.96
1,068.72

45,483.32
326.08

68,614.92
2,075.36

1,852.28

3.58

16,089.24

45,157.24

66,376.80

Particulars

DAR

DA-NIA

DENR

DOJLRA

DPWH

DTI

DOJ PCGG

Total Assets
Current Assets
Cash
Receivables
Inventories
Prepayments
Other Current
Assets
NonCurrent
Assets
Investments
Property, Plant
and Equipment

6,572.84
4,774.45
2,253.68
2,444.21
68.68
2.12

2,871.19
752.07
263.29
411.48
49.97
27.34

270.97
88.42
22.70
27.66
22.70
14.56

20.14
2.67
0.85
0.36
1.46
-

1,976.04
123.75
10.08
110.99
0.39
2.28

29.91
26.11
2.09
22.49
1.01
0.51

5.76

0.79

1,798.39
568.92

2,119.12
111.64

182.55
-

17.48
-

1,204.80

1,879.38

176.15

14.12

146

Total

Particulars
Other Assets
Total Liabilities
Current
Liabilities
Long-Term
Liabilities
Deferred Credits
Equity
Total Liabilities
and Equity

DOF LBP

DOJ PCGG

DA-NIA

DENR

DOJLRA

24.66
960.31

128.10
623.62

6.40
113.99

3.36
9.23

0.02
32.02

0.22
3.71

20,917.82

22,660.72

956.07

623.62

113.99

9.23

32.02

3.71

10,921.22

12,659.86

0.12
4.13

7,793.28
2,203.32

5,612.52

2,247.57

156.98

10.91

1,944.03

26.20

17,295.46

43,528.80

7,793.40
2,207.45
70,822.48

6,572.84

2,871.19

270.97

20.14

1,976.04

29.91

17,295.46

64,446.63

93,483.20

DAR

DPWH

DTI

Total
162.76

Difference between totals and sum of components is due to rounding off.

The total liabilities of P22.66 billion consisted of the following: Current


Liabilities P12.66 billion; Long-term Liabilities P7.79 billion; and Deferred Credits
P2.21 billion. The entire amount of Long-term Liabilities pertains to Bonds PayableDomestic.
On the other hand, the bulk of the Current Liabilities of P12.66 billion includes
Accounts Payable P8.30 billion, Guaranty Deposits Payable P2.92 billion, Other
Payables P304.13 million, Due to Other NGAs P291.54 million, and
Performance/Bidders/Bail Bonds Payable P285.88 million.
8.5.2 Statement of Income and Expenses
For the fiscal year 2011, the Consolidated Statement of Income and Expenses of
the IAs showed a total Subsidy Income of P8.03 billion reduced by Subsidy to RO/OU
of P26.99 million resulting to a Net Subsidy of P8.00 billion.
Of the total Subsidy Income of P8.03 billion, P7.99 billion pertains to Notice of
Cash Allocations released by the Department of Budget and Management to ensure
availability of funds to finance the nationwide implementation of the CARP, broken
down as follows: DAR P6.92 billion, DENR P572.58 million, DA-NIA P238.72
million, DOJ-LRA P101.91 million, DPWH P82.10 million, and DTI P71.64
million.
The total expenses incurred during the year reached P8.01 billion, the biggest
slices of which were reported by DAR and DOF-LBP with P5.00 billion and P2.23
billion, respectively. The bulk of the total expenses was primarily spent for the
following: Salaries and Wages P1.86 billion, Interest Expenses P1.71 billion, Other
Compensation P566.35 million, Other MOOE P492.94, Travelling Expenses
P435.29 million, Survey Expenses P380.40 million, Professional Expenses P325.98
million, Supplies and Materials Expenses P304.86 million, and Repairs and
Maintenance P110.43 million. Illustrated in Table VIII-4 is the Statement of Income
and Expenses by IAs.

147

Table VIII-4 Statement of Income and Expenses


(in million pesos)
Implementing
Agencies
DAR
DA-NIA
DENR
DOJ-LRA
DPWH
DTI
DOJ-PCGG
DOF-LBP
Total

Net
Subsidy
6,935.50
238.72
572.58
101.91
81.62
72.03
8,002.37

Income

Total

11.13
0.05
0.38
.02
166.28
177.86

6,946.63
238.77
572.96
101.91
81.62
72.05
166.28
8,180.22

Expenses
5,002.41
88.92
512.60
104.05
4.03
69.45
2.03
2,225.80
8,009.29

Net Income/
(Loss)
1,944.22
149.85
60.36
(2.13)
77.59
2.60
(2.03)
(2,059.52)
170.93

Difference between totals and sum of components is due to rounding off.

8.6 OPERATIONAL HIGHLIGHTS


The accomplishments of the CARP implementing agencies are presented below:
8.6.1 DAR
Program/Project/Activity
A. Land Tenure Improvement (LTI)
1. Land acquisition and distribution
1.1 Land Survey (in hectares)
1.2 Land Distribution (in hectares)
2. Leasehold Operations
2.1 Number of hectares
2.2 Number of tenants-tillers benefited or ARBs
3. Other LTI Services
3.1 Redocumentation of distributed but not yet paid/documented lands (in has.)
3.2 Subdivision of Collective Land Ownership Award
(CLOA) in hectares
3.3 Installation of Uninstalled ARBs
3.3.1 Number of ARBs
3.3.2 Number of hectares
B. Delivery of Agrarian Justice
1. Adjudication of agrarian cases
2. Agrarian Legal Assistance
2.1 Resolved agrarian law implementation (ALI) cases
No. of cases
No. of ARBs benefited
No. of hectares
2.2 Represented ARBs by DAR lawyers before judicial courts
No. of cases
No. of ARBs benefited
No. of hectares
2.3 Represented ARBs by DAR lawyers in quasi-judicial courts
No. of cases
No. of ARBs benefited

148

Accomplishments

34,656
111,889
14,880
7,488
11,095
44,544
3,033
4,046
19,006

56,338
57,136
225,401
1,488
3,756
13,368
14,787
20,805

Program/Project/Activity
No. of hectares
2.4 Resolved/disposed conflicts/disputes under mediation/
conciliation process
2.5 Resolved agrarian cases under the adjudication process
C. Program Beneficiary Development
1. Confirmation of Agrarian Reform Communities (ARCs) and Strategic ARCs
1.1 Number of ARCs
1.2 Number of SARBs
2. Trained ARBs on various courses in LTI, Support to Social Infrastructure and
Local Capability Building
3. Provided interventions to organization and its members enabling them to
operate and manage their farm, non-farm and off-farm enterprises
3.1 No. of organizations
3.2 No. of members
4. Provided complementary support services to ARCs
5. Facilitated preparation of agribusiness plans for agribusiness development
5.1 No. of plans
5.2 No. of hectares
6. Developed products and services and launched in commercial markets
6.1 No. of products developed
6.2 No. products launched
7. Facilitated signing of marketing contracts between agribusiness firms and
farmers organizations
7.1 No. of marketing contracts
7.2 Amount of sales generated (in million pesos)
8. Provided credit and microfinance assistance
8.1 No. of ARBs assisted
8.2 Amount of credit and microfinance assistance (in billion pesos)
9. Generated jobs for ARBs from physical infrastructure projects both FAPs and
ARF
9.1 No. of jobs from agri-business enterprises
9.2 No. of jobs from micro, small and medium enterprises
9.3 No. of jobs from development of new lands
10. Facilitated the completion of physical infrastructure projects
10.1 Irrigation systems - 172 with service area in hectares
10.2 Farm-to-market roads - 810 with length in kilometers
10.3 Pre and post-harvest facilities - 72 projects in units
10.4 Bridges - 82 with length in linear meters
10.5 Multi-purpose pavements - 128 with area in square meters
11. Facilitated the provision of the following basic social service facilities
11.1 Potable water supply systems
11.2 Classrooms constructed and rehabilitated
11.3 Health centers constructed and rehabilitated
11.4 Power supply projects completed
12. Enrolled ARBs/ARB Households in Philhealth and other care providers
13. Implemented capital and technical assistance projects
13.1 No. of projects
13.2 Total Investments (in billion pesos)
14. Established Womens Desk and implemented projects for women
14.1 No. of womens desk
14.2 No. of women served by the womens desk

149

Accomplishments
49,717
40,650
19,006

26
10
147,765

6,430
849,005
53,032
387
44,913
571
291

1,053
P652
843
P1.316

23,098
20,353
10,620
55,136
3,836
643
1,271
45,679
1,579
227
205
55
138,816
62
P79.166
1,150
27,983

Program/Project/Activity
14.3 No. of projects implemented
14.4 No. of women served by the project
15. Established Landowners Desk
15.1 No. of landowners desk
15.2 No. of landowners served
16. Granted Programang Agraryo Iskolar to deserving dependents of ARBs
16.1 No. of enrollees
D. Support to Operations
1. Engaged and attended the following summits:
1.1 National Summit on Poverty, Inequality and Social Reform organized by
the Catholic Bishops Conference of the Philippines (CBCP)
1.2 National Secretariat for Social Change (NASSA)
1.3 Climate Change Congress of the Philippines (CCCP)
2. Conducted in-house study titled Revisiting the Implementation of the
Agribusiness Venture Arrangements (AVAs) between the ARBs and the
Investors
3. Completed Commissioned Research Study: An Analysis of the Process of the
Design and Implementation of the 2009ARB Profiling under the ARB
Carding and Identification (ID) System
4. Issued Memorandum Circulars for the smooth implementation of the CARP:
4.1 Joint DAR-DENR-LRA-NCIP Memorandum Circular No. 1, Series of
2011 Creation of Joint Task Force which shall determine Policy
Direction in Order to Address Jurisdictional and Operational Issues
between DAR, DENR, LRA and NCIP over Agricultural, Public and/or
Ancestral Lands
4.2 Memorandum Circular No. 2, Series of 2011 Revised Rate of Fees and
Charges
4.3 Joint DAR-LBP Memorandum Circular No. 3, Series of 2011 Microfinance Capacity Development Program in Agrarian Reform Areas
4.4 Memorandum Circular No. 4, Series of 2011 Implementing Guidelines
to Access Funds, Implement and Monitor Projects under the DARPBD Partnership-Support Fund
4.5 Joint DAR-DENR-LRA-NCIP Memorandum Circular No. 5, Series of
2011- Extension of Time for the DAR-DENR-LRA-NCIP Task Force
to Formulate the Joint Administrative Order on Addressing Conflict
Jurisdiction
4.6 Memorandum Circular No. 6, Series of 2011 Clarificatory Guidelines
on the Implementation of the Land Acquisition and Distribution
Phasing Under R.A. No. 9700
4.7 Memorandum Circular No. 7, Series of 2011 Adopting and
Implementing the Right to Information with Respect to Quasi-Judicial
and Disciplinary Functions of the DAR and Providing Guidelines
Therefor
4.8 Memorandum Circular No. 8, Series of 2011 Revised Guidelines and
Procedures in the Delisting of ARCs, ARC Barangays and
Organizations
4.9 Memorandum Circular No. 9, Series of 2011 Creation of Task Force
Problematic Lands Addressing Land Acquisition and Distribution
(LAD) Concerns and Related Issues on CARP Implementation

150

Accomplishments
1,098
28,085
86
4,414
3,448
3

16

Program/Project/Activity
4.10 Memorandum Circular No. 10, Series of 2011 Transforming the
Agribusiness Entrepreneurship Development Program (AREDP) Office
to National ARCCESS Program Coordinating Office (NAPCO) and
Installing ARCCESS Implementing Structure at All Levels
4.11 Memorandum Circular No. 11, Series of 2011 Suspension of Certain
Provisions of Administrative Order No. 6, Series of 2011 for the
Purpose of Transitioning from the Old Cancellation Rules to the New
One
4.12 Memorandum Circular No. 12, Series of 2011 Case Control Number
System on Cancellation of Cases
4.13 Memorandum Circular No. 13, Series of 2011 Interim Guidelines
Governing the Integration of ARCs Monitoring and Tracking System
(ARCMTS) and ARC Level of Development Assessment (ALDA) in
the DARs Planning, Monitoring and Evaluation (PME) System
during the Transition Period
4.14 Memorandum Circular No. 14, Series of 2011 Operating Guidelines
on the Grant of National Government Assistance to LGUs (NGALGU)
for Rural Infrastructure Development under the ARC Project II
(ARCPII)
4.15 Memorandum Circular No. 15, Series of 2011 Prohibition Against
Signing Agrarian Related Contracts
4.16 Memorandum Circular No. 16, Series of 2011 Amending
Memorandum Circular No. 12, Series of 2011 Titled Case Control
Number System for Cancellation of Cases
5. Issued Administrative Orders:
5.1 Administrative Order No. 1, Series of 2011 Guidelines Governing
Gender Equality in the Implementation of Agrarian Reform Laws and
Mainstreaming Gender and Development in the DAR
5.2 Administrative Order No. 2, Series of 2011 Rules on the Conversion of
Agricultural Lands for Government Housing Projects Intended for
Armed Forces of the Philippines and Philippine National Police
Personnel Pursuant to Office of the President Administrative Order No.
9, Series of 2011
5.3 Administrative Order No. 3, Series of 2011 Revised Rules and
Regulations Implementing Section 19 of R.A. No. 9700 (Jurisdiction and
Referral Cases that are Agrarian in Nature)
5.4 Administrative Order No. 4, Series of 2011 Amendment to
Administrative Order No. 2, Series of 2009 on the Installation of ARB
with Registered Certificate Landownership Award (CLOA)
5.5 Administrative Order No. 5, Series of 2011 2011 Rules on the
Administration of Oaths in Pursuance of Section 50 of R.A. No. 6657 as
Amended
5.6 Administrative Order No. 6, Series of 2011 The 2011 Revised Rules
and Procedures Governing the Cancellation of Emancipation Patents
and Certificates of Landownership Awards (CLOAs) and Other Titles
Issued Under Any Agrarian Reform Program
5.7 Administrative Order No. 7, Series of 2011 Revised Rules and
Procedures Governing the Acquisition and Distribution of Agricultural
Lands under R.A. No. 6657 as Amended
5.8 Administrative Order No. 8, Series of 2011 Rules for the Coverage of
CAR-Covered Lands Subject to Unauthorized Transfers or Conveyances

151

Accomplishments

Accomplishments

Program/Project/Activity
5.9 Administrative Order No. 9, Series of 2011 Rules for the Survey and/or
Field Investigation of Landholdings Where the DAR and Land Bank of
the Philippines are Denied Entry Thereto
6. Served walk-in Clients by the Public Assistance and Complaints Coordinating
Unit (PACCU)
7. Facilitated the resolution of cases by the Quick Response Operation Units
7.1 No. of urgent cases
7.2 No. of flashpoints

7,727

95
14

Source: DAR Summary of Accomplishments, January to December 2011

8.6.2 DTI
Program/Project/Activity

Target

A. Micro, Small and Medium Enterprises (MSMEs)


1. Investments generated (in million)
2. Sales generated (in million)
3. Jobs generated
4. Entrepreneurs developed
5. ARCs assisted
6. Non-ARCs assisted
7. Development of new MSMEs
7.1 MSMEs developed
7.2 FBs served
7.3 LOs served
7.4 ARCs served
8. Generation of Sales (in million)
9. Assistance to MSMEs
9.1 MSMEs assisted
9.2 FBs served
9.3 LOs served
9.4 ARCs served
9.5 Monitored Sales Impact (in million)
B. Trainings and Seminars Conducted
1. Entrepreneurial Training
1.1 Trainings conducted
1.2 FBs served
1.3 LOs served
1.4 ARCs served
2. Skills Training
2.1 Trainings conducted
2.2 FBs served
2.3 LOs served
2.4 ARCs served
3. Productivity Improvement
3.1 Trainings conducted
3.2 FBs served
3.3 LOs served
3.4 ARCs served
C. Project Feasibility Studies
1. Number of Studies

152

Accomplishments

Percent

P826.32
P1,564.18
45,828
1,620
908
130

P1,070.87
P2,146.12
56,137
1,617
794
188

130
137
122
99.8
87
145

680
10,399
48
341
P40.56

1,123
18,154
130
153
P55.99

165
175
271
45
138

2,003
49,175
133
605
P924.84

1,696
54,699
492
714
P1,440.94

85
111
370
118
156

573
12,747
104
491

774
15,893
226
304

135
125
217
62

620
10,297
125
487

742
14,320
158
195

120
139
126
40

265
5,617
69
229

283
6,821
67
129

107
121
97
56

Program/Project/Activity

368
11,385
233
270

Accomplishments
495
30,996
192
155

97
1,300
19
110

113
1,587
27
55

116
122
142
50

2,193
40,130
133
519
P470.75

2,854
54,485
1,219
350
P551.19

130
136
917
67
117

31
593
13
54
P3.42

24
383
11
23
P2.70

77
65
85
43
79

341
26,658
71
497
P67.63

529
336,689
310
363
P95.98

155
1,263
437
73
142

297
13,973
53
348

431
17,413
1,087
153

145
125
2,051
44

327
565
549
344
12,679
132
364

498
1,014
1,000
858
13,959
338
159

152
179
182
249
110
256
44

213
31,658
222
404
135

170
52,733
228
315
113

80
167
103
78
84

101

87

86

Target

1.1 Studies completed


1.2 FBs served
1.3 LOs served
1.4 ARCs served
2. Technology Missions
2.1 Missions conducted
2.2 FBs served
2.3 LOs served
2.4 ARCs served
D. Market and Development Activities
1. Market Matching
1.1 Matching conducted
1.2 FBs served
1.3 LOs served
1.4 ARCs served
1.5 Sales (cash and booked, in million)
2. Selling Missions
2.1 Missions conducted
2.2 FBs served
2.3 LOs served
2.4 ARCs served
2.5 Sales (cash and booked, in million)
3. Trade Fairs
3.1 Trade Fairs conducted
3.2 FBs served
3.3 LOs served
3.4 ARCs served
3.5 Sales (cash and booked, in million)
4. Promo Collaterals
4.1 Promo conducted
4.2 FBs served
4.3 LOs served
4.4 ARCs served
E. Product Development Activities
1. Development activities done
2. Products design developed
3. Prototype executed
4. Packaging and labels developed
5. FBs served
6. LOs served
7. ARCs served
F. Consultancy Services
1.1 Man-months extended
1.2 FBs served
1.3 LOs served
1.4 ARCs served
G. Number of CARP Personnel
H. Number of Staff Development
Activities
Source: DTI CARP Summary of Accomplishments, For the Year 2011

153

Percent
135
272
82
57

8.6.3 DOLE
Program/Project /Activity
Self-Reliant Organizations for CARP (SRO-CARP)

Accomplishments
No. of
No. of
Trainings
Participants

1. Organizational Development
1.1 Trainings Conducted
46
1,522
1.1.1 Region VI
18
597
1.1.2 Region X
5
200
1.1.3 Region XI
13
419
1.1.4 Region XIII
10
306
Trainings and seminars include, capability building on organizational development and
management, enterprise/project and financial management and specific skills trainings such as
abaca, nito, coconut midribs weaving, organic farming technologies, food lot technology, dried fish
processing, etc.
2. Livelihood and Enterprise Development
Name of Cooperative
Region
Project
2.1 San Rafael ARC MPC, Murcia,
VI
a. Bio-Intensive Gardening
Negros Occidental
b. Organic Red Rice Production Demo
Farm
c. Sugarcane Production
2.2 Bulanon Farmers ARB Cooperative,
VI
a. Basic Commodity and Agri-Inputs
Sagay City
Store
b. Food Lot Module Technology Demo
Farm
c. Dried Fish Processing/ Production
and Iron Works
2.3 Umagos-Banglay ARC, Lagonglong,
X
a. Banana Production and Trading
Misamis Oriental
b. Abaca, Nito, Coconut Mid-ribs and
Romblon Weaving Projects
2.4 Bread Muti-purpose Coop, Barangay
XI
a. Coconut Wine and Coco-Vinegar
Darong, Sta. Cruz, Davao del Sur
Production
b. Vermi- composing
c. Backyard
organic
vegetable
gardening
2.5 JORIFA and Sibulan Upland Farmers
XI
a. Abaca Production
Association
b. Native/Black Coffee Production
2.6 PASCOFBEC, Las Nieves, Agusan
XIII
a. Consumers Store
del Norte
b. Coconut Trading
c. Coco-Rehab and Fertilizer
Distribution
d. Post Harvest Facility
e. Coco-Charcoal Production
Source: DOLE SRO-CARP CY 2011 Accomplishment Report

8.6.4 LRA
Program/Project/Activity
I. Registration and Titling
1. Emancipation Patent (EP)
1.1 Number of Titles
1.2 Number of Areas (has.)

154

Target

Accomplishments

Percent

3,886
3,695

3,850
3,681

99
99.6

Program/Project/Activity

Target

2. Certificate of Land Ownership


2.1 Number of Titles
32,307
2.2 Number of Areas (has.)
85,791
II. Patent Registration
1. Free Patent Registration
1.1 Number of Titles
64,682
1.2 Number of Areas (has.)
2. Free Patent Distribution
2.1 Number of Titles
80,848
2.2 Number of Areas (has.)
III. Other CARP Related Activities
A. Central Office
1. DAR (Status Verification)
1.1 No. of Certificates Issued
1.2 Letters to RTDs
1.3 No. of Certified True Copies
1.4 Letter Returned to DAR
2. LBP (Status Verification)
2.1 No. of Certificates Issued
2.2 Letters to RTDs
3. Reconstitution of CARP Titles
3.1 No. of Reconstituted CARP Titles
3.2 No. of Letter Request to petitioner
B. Registry of Deeds
1. Segregation of Mother CLOA
2. Transfer Action (EP/CLOA)
3. Issuance of RP Titles
4. Deeds of Transfer
5. Voluntary Land Transfer
6. Deeds of Partition
7. No. of Certification Issued
8. No. of Certified True Copies
9. Cancellation of Outstanding Balance/
Amortization Mortgage
10. Verification/Research
11. Other Assistance to DAR and Farmer
Beneficiaries

Accomplishments

Percent

30,497
84,188

94
98

64,682
37,286

100

71,212
88
36,775
Accomplishments
No. of Titles
No. of Hectares
2,345
653
217
79

9,958.33
3,019.66
720.45
596.09

54
54

1,446.96
3,454.81

165
40
20,950
795
676
541
2,308
4,269
95,518
118,130
4,711

28,751.85
704.38

11,221
49,377

Source: LRA CARP Accomplishment Report - January to December 2011

8.6.5 NIA
Particulars
A. Engineering Activities
1. No. of Projects
2. Area Accomplished (in has.)
3. Generated
4. Restored
5. No. of FBs Benefited

1st Qtr.
9
655
71
584
1,642

B. Institutional Development Program


1. IA Organization
1.1 No. of Organization

2
155

Accomplishments
2nd Qtr. 3rd Qtr. 4th Qtr.

Total

3
225

7
589

9
562

28
2,031

0
225
492

485
104
539

136
426
270

692
1,339
2,943

15

26

Particulars
1.2 IA Strengthening
1.3 IA Members Organization
1.4 IA Members Strengthening
2. IA Development
2.1 No. of Batches
2.2 No. of Participants
3. Staff Development Training
3.1 No. of Batches
3.2 No. of Participants

1st Qtr.
200
-

Accomplishments
2nd Qtr. 3rd Qtr. 4th Qtr.
55
21
110
1,153
386
9,559
2,767

Total
76
1,849
12,326

10
205

4
111

3
126

18
577

36
1,019

6
82

8
177

12
316

14
372

40
947

Source: NIA Executive Summary Report, Accomplishment : CY 2011

8.6.6 DENR
Particulars
1. Inspection, Verification and
Approval of Survey
1.1 No. of surveys
1.2 Areas covered (has.)
2. Public Land Survey (has.)
3. Patent Processing and Issuance
3.1 No. of Patents
3.2 Areas covered (has.)

1st Qtr.

Accomplishments
2nd Qtr. 3rd Qtr. 4th Qtr.

Total

11,213
18,809
5,124

11,033
24,650
5,918

17,485
21,588
20,409

23,812
45,338
30,965

63,543
110,385
62,416

6,971
4,821

25,524
18,989

23,583
19,549

59,553
48,787

115,631
92,146

Source: Status of DENR-CARP Activities as of December, CY 2011

8.6.7 LBP
Program Type

PD27/
EO 228

Beginning Inventory
No. of Claims
Area (Has.)
Recipients from DAR
No. of Claims
Area (Has.)
Total Claims on Hand
No. of Claims
Area (Has.)
Returns to DAR
No. of Claims
Area (Has.)
Excluded Portion
Area (Has.)
Suspended ARMM Claims
No. of Claims
Area (Has.)
Net Processable Claims
No. of Claims
Area (Has.)
Approved for Payment with COD
No. of Claims
Area (Has.)

156

Accomplishments
RA 6657/
EO 229

Total

20
241.50

5,541
82,426.25

5,561
82,667.75

446
1,202.23

1,484
16,754.93

1,930
17,957.16

466
1,443.73

7,025
99,181.18

7,491
100,624.91

22
189.67

1,184
13,128.50

1,206
13,318.17

17

73

90

7
113.64

4,345
68,573.89

4,352
68,687.53

437
1,123.24

1,496
17,405.76

1,933
18,529.00

429
930.53

1,124
12,883.30

1,153
13,813.83

Program Type

Accomplishments
RA 6657/
EO 229
109
639

PD27/
EO 228

No. of LOs
No. of FBs
Land Value (P Mn)
Ending Inventory
No. of Claims
Area (Has.)

Total
749

1,068
72.20

9,603
1,260.55

10,671
1,332.75

8
192.71

372
4,522.46

380
4,715.17

Source: LBP Summary of CARP Accomplishment, YTD, as of December 2011

8.6.8 DPWH
No. of
Projects

Particulars
Roads
Construction
Improvement/Rehabilitation
Multipurpose Pavement/ Concreting
Small Water Impounding Projects
Completed
Pre-Construction Activities
Total

1,727
2,272
1,344
8
5,350
1
5,351

Length
(in kms.)

Cost
(in million pesos)

2,987.43
5,036.25
268.41
0.00
8,292.09
0.00
8,292.09

Difference between totals and sum of components is due to rounding off.


Source: Summary of DPWH CARP Projects under CY 1988-2010 Programs , as of December 21, 2011

157

2,424.17
2,715.57
504.66
15.58
5,658.99
1.00
5,659.99

IX. COMMON AND SIGNIFICANT


AUDIT OBSERVATIONS AND
RECOMMENDATIONS

COMMON AND SIGNIFICANT AUDIT OBSERVATIONS


AND RECOMMENDATIONS
9.1

Overview
Pursuant to Section 2, Article IX-D of the Philippine Constitution, the
Commission on Audit regularly conducts audit of accounts of all NGAs. The audit is
conducted in accordance with the generally accepted state auditing standards and the
results are communicated and discussed in the Annual Audit Reports (AARs) and in
the Management Letters (MLs) submitted to the audited agency, the Office of the
President, the Congress and other stakeholders.

9.2

Audit Opinions
The AAR sets forth the audit opinion regarding the entitys financial
statements. The auditors opinion, depending on the result of the audit, reflects only
one of the following opinions:
9.2.1. Unqualified Opinion. It states that the financial statements present fairly,
in all material respects, the financial position, results of operations and
cash flows of the audited agency in conformity with generally accepted
accounting principles (GAAP). This is equivalent to a Clean Opinion.
9.2.2. Qualified Opinion. It states that the financial statements present fairly
the entitys financial position, results of operations and cash flows in
conformity with the GAAP except for the matter of qualifications.
Normally, qualified opinions are issued when there are: (1)limitations on the
scope of the auditors examination on one or more areas of the financial
statements, and although they could not be verified, the rest of the financial
statements were audited and complied with GAAP or (2) single
deviation/departure from GAAP exists.
9.2.3. Adverse Opinion. When issuing this opinion, the Auditor concludes that
the financial statements do not present fairly the audited agencys
financial position, results of operations and cash flows in conformity
with the generally accepted state accounting principles. This type of
opinion is issued when the financial statements contain very material
departures from GAAP.
9.2.4

Disclaimer of Opinion. A disclaimer of opinion is issued when the


auditor is unable to form an opinion (no opinion) on an entitys financial
statements. A disclaimer is issued in case when: (1) material scope
limitation exists, or (2) significant uncertainty exists.

9.3 Results of Audit


As reflected on the transmitted AARS for CY 2011 of 222 NGAs
the audit opinions are broken down as follows: 44 unqualified/clean or 20 percent, 59
qualified or 72 per cent, 17 adverse or 8 per cent, and 2 disclaimers.

158

The audit opinions excluded audited agencies with AARs not yet transmitted as
of 31 August 2012 and/or only management letters were issued. Presented in the
graph below is the Summary of Audit Opinions for CY 2011.

Summary of Audit Opinions


Calendar Year 2011

160
140
120
100

Unqualified

80

Qualified
Adverse

60

Disclaimer

40
20
0
2011

Forty - four agencies were given unqualified or clean audit opinion on


the financial statements, namely:
1. Office of the Vice-President
2. Senate Electoral Tribunal
3. House of Representatives Electoral Tribunal
4. Cotton Development Administration
5. Government Procurement Policy Board
6. National Book Development Board
7. Mariano Marcos State University
8. Apayao State University
9. Benguet State University
10. Ifugao State University
11. Mountain Province State Polytechnic College
12. Don Honorio Ventura Technological State University
13. Tarlac College of Agriculture
14. Tarlac State University
15. Cavite State University
16. Southern Luzon State University
17. Mindoro State College of Agriculture and Technology
18. Occidental Mindoro State College
19. Catanduanes State Colleges
20. Guimaras State College
21. Northern Negros State College of Science and Technology

159

22. University of Antique


23. Southern Leyte State University
24. Camiguin Polytechnic State College
25. Mindanao University of Science and Technology
26. Davao Oriental State College of Science and Technology
27. Mindanao State University General Santos City
28. Adiong Memorial Polytechnic State College
29. Philippine Visiting Forces Agreement Commission
30. Food and Nutrition Research Institute
31. Metal Industry Research and Development Center
32. National Academy of Science and Technology
33. Philippine Council for Health Research and Development
34. Philippine Trade Training Center
35. Intellectual Property Office of the Philippines
36. Office of the Transport Cooperatives
37. Legislative Executive Development Advisory Council
38. Philippine National Volunteer Service Coordinating Agency
39. Tariff Commission
40. Anti-Money Laundering Council
41. Film Development Council of the Philippines
42. ARMM Social Fund
43. Court of Appeals
44. Sandiganbayan
Adverse audit opinions were issued to 17 NGAs such as Fertilizer and Pesticide
Authority, National Agricultural and Fishery Council, National Meat Inspection
Services, Philippine Center for Post Harvest and Modernization (formerly
BUPRE), Central Luzon State University, Philippine Merchant Marine Academy,
Cotabato Foundation College of Science and Technology, MSU - Tawi-Tawi
College
of
Technology
and
Oceanography, Tawi-Tawi Regional
Technological College, National Labor Relations Commission, Department of
National Defense OSEC, Philippine Atmospheric, Geophysical and Astronomical
Services Administration, Philippine Council for Agriculture, Aquatic and Natural
Resources Research and Development, Philippine Council for Industry, Energy
and Emerging Technology Research and Development, Philippine Coast Guard,
Toll Regulatory Board and Manila Metropolitan Development Authority.
The common reasons for the adverse opinions
audit observations:

are

the following

1. Material overstatement/understatement of cash balances and unreconciled


discrepancies in book and bank balances due to failure of the agencies to
prepare bank reconciliation statements (BRS) which render the amount
reflected in the balance sheet unreliable;
2. Reported balances of Receivable accounts were doubtful due to
unliquidated, cash advances, unreconciled General Ledger and Subsidiary
Ledger balances, erroneous recording of transactions, absence of supporting
documents and schedules, among others;

160

3. Unreliable Inventory balances due to incomplete/non-recording of


procurements and issuances, non-preparation of Report of Supplies and
Materials Issued (RSMI), unreconciled Subsidiary Ledgers and stock
cards, and no physical inventory;
4. Material overstatement/understatement of Property, Plant and Equipment due
to deviations from accounting policies and procedures such as non-transfer of
completed projects to registry, non-recognition of depreciation, failure to
conduct annual physical count and errors/omissions in recording transactions;
5. Material overstatement/understatement of payable accounts caused by
unrecorded direct payments made to the contractors, existence of liability
accounts which have no existing or valid claimants, undelivered purchases
and invalid payments/settlements made; and
6. Dormant/non-moving accounts being carried in the books for several years
although their correctness could not be ascertained due to lack of
documents/records.
Two NGAs, namely, Siquijor State College and Eastern Visayas State
University, were issued with a disclaimer of opinion due to material scope
limitation on certain audit areas which prevented the audit teams to
determine the correctness and validity of the financial data. Details of the
Summary of Audit Opinions is shown in Annex B.

9.4 Consolidated Common Audit Observations and Recommendations from the


Annual Audit Reports for National Government Agencies (NGAs) for
Calendar Year 2011
9.4.1 Cash
The audit of the cash accounts in the books of National Government
Agencies (NGAs) disclosed non - compliance with existing laws, rules
and regulations as well as deviations from required accounting
procedures as follows:
9.4.1.1 Unreconciled differences between the book and bank balances
figures were reported from 72 audited agencies amounting to
P 2.15 billion affecting the reliability of the cash account balance.
Contributory to this finding, is the non-submission or delayed
preparation of the bank reconciliation statements (BRS) of said
agencies.
9.4.1.2 Cash collected by collecting/accountable officers totalling P 89.62
million in 28 NGAs was not remitted/deposited intact within the
prescribed time hence, exposing the assets to risk of misuse and loss.

161

9.4.1.3 Unused and/or dormant cash balances of 59 NGAs amounting to


Php 949.29 million were not remitted to the Bureau of Treasury (BTr)
resulting in huge balances of idle and unutilized funds in
Authorized Government Depository Banks (AGDBs) which should
have been used by the National Government.
9.4.1.4 Cash advances issued to Cash-Disbursing Officers for payroll fund
or petty cash fund of 92 audited agencies totaling P1.22 billion
remained unliquidated, for 30 days up to over 3 years, due to
failure to observe strictly Sections 4.1.2 and 5.8 of COA Circular
No. 97-02 and Section 89, P.D. No. 1445, opening possible risks of
misuse or malversation.
9.4.1.5 Cash shortages were incurred in nine audited agencies amounting
to P9.64 million due to lapses/weaknesses in internal control on
collection.
9.4.1.6 Under assessment/collection of revenues and custom duties in
23 NGAs totaling P389.13 million resulted in collection inefficiency
and lesser funds to be used for the countrys primordial programs
necessary for economic stability and sustainability.
9.4.1.7 Non-existent cash/investments were reported in three NGAs totalling
P35.94 million since these assets were not substantiated.
9.4.1.8 Bank confirmations disclosed unrecorded bank accounts in nine
audited agencies amounting to P363.19 million.
9.4.1.9 Erroneous recording of cash transactions in 17 NGAs resulted in the
understatement/overstatement of the Cash account balances.
Recommendations
9.4.1.10 Prepare the monthly reconciliation statements of all bank accounts
every end of the month in accordance with Section 74 of P.D. No.
1445, take up reconciling items and adjust the books to correct the
errors, if any, to reflect the correct balance of the cash account in the
financial statements.
9.4.1.11 Verify and analyze cash transactions and come up with a
reconciled general ledger and subsidiary ledger balances to ascertain
the correctness of the balance of Cash in Bank Local Currency,
Current Account as appearing in the books.
9.4.1.12 Closely monitor and supervise the prompt remittance of
collections in consonance with Section 69, P.D. No. 1445
to safeguard government funds from misappropriation, loss or
misuse. Ensure collections are deposited intact with authorized
government depository bank as prescribed in the Manual on the New
Government Accounting System (MNGAS).

162

9.4.1.13 Remit to the National Treasury all existing balances of trust receipts
and all collections from whatever source not allowed to be used by the
agency, in compliance to Executive Order No. 338 dated May 17,
1996, COA-DBM-DOF Joint Circular No. 9-81 dated October 19,
1981 and COA-DBM-DOF Joint Circular No. 1-97 dated January 2,
1997. In the case of Revenue District Offices of the Bureau of
Internal Revenue, they should monitor compliance of their Collecting
Officers on remitting their collections intact and regularly as
required under Section 21, Volume II of the MNGAS for National
Government Agencies (NGAs).
9.4.1.14 Return to the source agency the unused funds for the completed
projects, pursuant to COA Circular No. 94-013 dated December 13,
1994 as agreed in the Memorandum of Agreement (MOA).
9.4.2 Receivables
9 4.2.1 Cash advances to Officers and Employees of 208 audited agencies for travel,
special time bound undertakings and other activities totaling P1.44 billion
were not
liquidated within the specified
period and remained
unliquidated
due to
the non-implementation of
the prescribed
controls on the granting and liquidation of cash advances.
9.4.2.2 Funds transferred by 131 NGAs to other NGAs, Local Government Units
(LGUs), Government - Owned and Controlled Corporations (GOCCs)
and
Non-Governmental Organizations (NGOs)/ Peoples Organizations
(POs) for the implementation of projects with an aggregate amount of
P19.30 billion, remained unliquidated for several years due to the
following deficiencies:
a. Failure of the source agencies to monitor transferred funds and to enforce
submission of liquidation reports after completion of the project;
b. Failure of the implementing/recipient agencies to regularly submit
liquidation reports and refund unused balances to the source agencies after
completion of the projects; and
c. Lack of` periodic reconciliation of accounting records between the source
agencies and implementing agencies.
9.4.2.1 Dormant receivables were reported in 70 NGAs amounting to P2.33 billion
primarily due to insufficient or lack of supporting documents leading to a
remote possibility of its collection.
9.4.2.2 Unrecorded receivables of 11 NGAs amounting to P118.92 million resulted to
an understatement of the agencies receivable accounts balances.
9.4.2.3 Two audited agencies failed to recoup their advances to contractors totaling
P1.46 million which is disadvantageous to the government.

163

Recommendations
9.4.2.3 To ensure collection of receivables and liquidation of cash advances, the
following measures are recommended:
a. Prepare and maintain a complete and up-to-date subsidiary records
and aging schedule that are reconciled with General Ledger balances.
b. Adhere strictly to pertinent regulations on the granting, utilization
and liquidation of cash advances which include, among others:

Full liquidation of outstanding cash advances of accountable


officers before new cash advances are granted as provided in
Section 89 of P.D. No. 1445; and

Full settlement of all cash advances at yearend so that appropriate


expense accounts will be recognized in the books, and instruct
the concerned accountable officers and employees to deposit or
return immediately to the cashier/collecting officer any unused
portion of their cash advances.

c. Strict implementation of the provision of Section 5.8 of COA


Circular No. 97-002 which requires the settlement/liquidation of cash
advances within the prescribed period.
9.4.2.4 All possible legal measures/remedies should be enforced in collecting
receivables, which include, among others: a) sending out demand letters
to debtors/officers and employees, b) withholding of salaries or any
claim due them after sufficient notice have been served and c) other legal
means.
9.4.2.5 Verify the status of long outstanding accounts and assess accounts
receivables which are no longer collectible. Consider the possible writeoff of these accounts after exerting diligent efforts to collect, instituting
appropriate action and exhausting all the remedies available.
9.4.2.6 To prevent the accumulation of long outstanding unliquidated fund
transfers, the following are recommended:
a. Transfer the fund directly to the implementing agency of a
project/program instead of having it coursed thru an intermediary
agency by indicating this provision in the LA/Memorandum of
Agreement (MOA); require the timeliness of the project
implementation in the LA/MOA;

164

b. Strictly implement the provisions of COA Circular Nos. 94-013, 96003 and 2007-001 and the provisions of the MOA by requiring the
implementing agency to immediately submit the required liquidation
reports and refund any unutilized balances including interest, if any;
and
c. Refrain
from
granting
additional
fund
releases
to
NGAs/LGUs/GOCCs/ NGOs/POs with unliquidated balances to
prevent accumulation of amounts.
9.4.3 Inventories
9.4.3.1

Delayed delivery of items procured by five audited agencies from the


Department of Budget and Management (DBM)-Procurement Service
(PS) defeated the good intention to facilitate the procurement process
and resulted to the accumulation of undelivered items to P46.09
million.

9.4.3.2

Unreconciled difference totaling P3.65 billion between the Accounting


and Property records/ inventory reports of 101 agencies brought about
mainly by:
a. Non-submission of Report of Supplies and Materials Issued
(RSMI) and other inventory reports as bases in recording the
expenses to the Accounting Unit;
b. Non-submission of required inventory reports to facilitate the
recording of birth/production and mortality of animal livestock;
c. Inventories which were already issued and/or consumed but were
still reflected in the financial statements;
d. Failure of accounting and supply and property offices to conduct
regular reconciliation of their respective records as required in
Section 43, Volume I of the Manual on NGAS (MNGAS); and
e. Erroneous entries in the recording of inventory transactions.

9.4.3.3

Unreconciled difference between the General Ledger (GL) and


Subsidiary Ledgers (SLs) were reported for 32 NGAs amounting to
P2.97 billion hence, accuracy of the Inventory account balances
cannot be determined.

9.4.3.4

Overstatement of P104.97 million of 31 agencies mainly due to the


non-submission of the Report of Supplies and Material Issued (RSMI)
by the supply officer to the Accounting Unit.

9.4.3.5

Inventory accounts balances of 62 agencies amounting to P1.80


billion were doubtful due to failure of these agencies to conduct
physical inventory/count of supplies and materials.

165

9.4.3.6

Nineteen audited agencies did not procure their supplies amounting to


P76.92 million from the Department of Budget and Management
(DBM) - Procurement Service (PS) contrary to the provisions of RA
No. 9184, thus, depriving the government of additional revenues as
well as savings.

9.4.3.7

Inventory account balances of 14 NGAs were understated by P15.67


million due to outright recording of purchases for supplies and
materials to expense accounts.

Recommendations
9.4.3.8

Coordinate with the DBM-PS regarding the settlement of undelivered


supplies.

9.4.3.9

Require the Accountant and Property/Supply Officer to reconcile the


difference between the Accounting and Property records/ inventory
report as required in Section 43, Volume I of the MNGAS for NGAs.

9.4.3.10 Require the Supply Officer to submit regularly the Report of Supplies
and Materials Issued (RSMI) and other required inventory reports to
the Accounting Unit to support the recording of consumption/
issuances of supplies and materials or mortality in case of livestock.
Likewise, prepare the necessary adjustment to record expenses,
unrecorded deliveries and various accounting errors.
9.4.3.11 Oblige the Supply Officer and other concerned personnel to adhere
strictly to the established rules and regulations prescribed in Section
65, Volume II of the MNGAS relative to the conduct of physical count
of inventory items and maintain updated inventory records in
accordance with Section 41, Volume II of the MNGAS.
9.4.3.12 Require the Accountant to maintain the Supplies Ledger Card (SLC)
in accordance with Sections 12, Volume II of the MNGAS, undertake
regular reconciliation of the SLC with the GL and prepare the
necessary adjustments.
9.4.3.13 Adhere to the provisions of Administrative Order No. 17 to use
the Procurement Service (PS) in the procurement activities of the
NGAs to achieve transparency, efficiency and economy in the
procurement process.
Comply with Section 53(e) of the Implementing Rules and
Regulations of Republic Act No. 9184 which provides that agencys
procurement of commonly used goods shall be through the DBM Procurement Service.
9.4.3.14 Record all purchases of supplies and materials following the perpetual
inventory record and maintain supplies ledger cards for each item in
accordance to Section 43 of MNGAS, Volume I.

166

9.4.4 Property, Plant and Equipment


9.4.4.1

Unrecorded Property, Plant and Equipment (PPE) totaling P4.97


billion was reported by auditors for 71 NGAs due to lack of
appropriate supporting documents and/or basis of the cost, in violation
of Section 63 of Presidential Decree (PD) No. 1445 requiring that
government property shall be taken up in the books of the agency
concerned at acquisition cost or at appraised value, thereby
understating the affected PPE accounts.

9.4.4.2

Unserviceable/Disposed properties amounting to P466.86 million


remained in the books of 132 audited agencies in violation of Section
79 of PD 1445 and Section 143 of the MNGAS, Volume III requiring
the disposal of unserviceable properties.

9.4.4.3

Idle/unutilized properties and equipment were reported from 26 NGAs


totalling P646.46 million which defeat the purpose for which these
properties were acquired and exposed the government to the possibility
of incurring losses due to deterioration/destruction or misuse of the
properties.

9.4.4.4

Records of Accounting and Property Units of 179 audited agencies are


reported not reconciled at yearend due to failure to maintain Property,
Plant and Equipment (PPE) ledger and property cards, failure to
conduct physical count, failure to transfer completed projects from
Construction-in-Progress to PPE and the failure of the Accounting
Section to maintain Property, Plant and Equipment Ledger Cards in
violation of Section 490 of the GAAM Volume I, among others. These
deviations mainly contributed to the unreconciled PPE account
balances between the accounting and property records.

9.4.4.5

At least 13 NGAs failed to recognize the depreciation of the PPEs by


recording the monthly depreciation expense at the end of each month
contrary to Sections 67-68, Volume I, MNGAS thereby, affecting
accuracy of the PPE and expense accounts balances.

9.4.4.6

Fifty-six audited agencies failed to insure their equipment, buildings


and other structures amounting to P3.54 billion with the Government
Service Insurance System contrary to R.A. No. 656 and Administrative
Order No. 141 dated August 12, 1994 and Section 5 of R.A. No. 656,
otherwise known as the Property Insurance Law, thereby, exposing the
agencies assets to unnecessary losses in case of fire, calamities and
other fortuitous events.

9.4.4.7

Validity, existence and correctness of the PPE balances totalling


P48.75 billion could not be ascertained due to failure of 206 NGAs to
conduct the actual physical inventory of the fixed assets.

167

Recommendations
9.4.4.8

Require the Property Officer to submit to the Accounting Unit the


necessary supporting documents for the recording of the PPE in the
books of accounts.

9.4.4.9

Require the Accountant to reclassify the unserviceable properties to


Other Assets account, based on the list submitted by the Property
Officer, prior to the disposal of said properties, in accordance with
Section 143, MNGAS, Volume III and management to immediately
dispose all unserviceable properties in accordance with Section 79 of
PD1445. Instruct the Property Unit to prepare the necessary documents
for the disposal of properties through public bidding or other modes of
disposal to prevent their further deterioration; and/or for the
preparation of the accounting entries to drop the disposed properties
from the books of accounts by the Accounting Unit.

9.4.4.10 Conduct a complete physical inventory of all assets at least once a year
pursuant to Section 490, Vol. I of the GAAM and prepare the Report
of the Physical Count of PPE (RPCPPE). Any discrepancies between
physical count and inventories per books must be analyzed,
investigated and a corresponding course of action be taken up
immediately.
9.4.4.11 Require the Accountant to prepare and maintain Property, Plant and
Equipment Ledger Card (PPELC) and reconcile it with the property
records/inventory reports on a regular basis. He/She shall ensure that
the PPELC is always reconciled with the GL to comply with Sec. 43,
paragraphs 3 and 4 of MNGAS, Volume 1 and Section 490 (a and b) of
GAAM, Volume 1.
9.4.4.12 The Accountant should ensure that Depreciation Expenses for all PPE
accounts are recorded at the end of each month. Further, a review of
the PPELC should be done to correct errors posted in the estimated
useful life of the asset to coincide with the prescribed estimated useful
life under COA Circular No. 2003-007. Record the recommended
audit adjustments to correct accumulated depreciation as of December
31, 2010.
9.4.4.13 Require the Management to insure all its insurable physical assets with
the General Insurance Fund of the Government Service Insurance
System (GSIS) in accordance with Section 5 of R. A. No. 656 and
Administrative Order No. 141 dated August 12, 1994 to protect its
interests in case of fortuitous events.
9.4.4.14 Require the Management to undertake various remedial actions to
ensure optimum utilization of the idle/unutilized PPE and ensure
proper maintenance of these assets to avoid wastage of government
resources.

168

9.4.5 Liabilities
9.4.5.1

The recorded liabilities totaling P9.94 billion of 22 audited agencies


were without valid claims and/or not supported by records or
documents to establish their validity and existence.

9.4.5.2

Dormant liabilities of seven agencies totaled P16.62 million.

9.4.5.3

Forty-seven NGAs were reported to have an unbooked or erroneously


recorded payables totaling P2.13 billion which contributed to the
understatement/overstatement of the Liabilities account balances.

9.4.5.4

Seven audited agencies showed unremitted balances to the Bureau of


Internal Revenue (BIR) for taxes withheld and other trust liabilities for
remittance to Government Service Insurance System (GSIS), Home
Development Mutual Fund (HDMF) and Philippine Health Insurance
Corporation (Phil Health).

Recommendations
To establish the validity and accuracy of current years balances and to present a
more reliable figure of payables in the succeeding years financial statements,
the following procedures are recommended:
9.4.5.5

Review all outstanding payables and revert those which are


undocumented/not supported with valid claims and those aged two
years or more.

9.4.5.6

Strictly enforce the submission of supporting documents prior to the


recording of transactions to minimize payables with no claimants.

9.4.5.7

Prepare journal entries to correct the unrecorded payables and adjust


errors in recording the fund transferred to reflect the correct balances.

9.4.5.8

Maintain and update SLs for each payable account to support their
existence and validate accuracy of records. Amounts that have no
breakdown, not supported with complete documentation and not
reconciled with SLs cast further doubt on the reliability of the account
balances.

9.4.5.9

Adhere to the detailed procedures in the COA Cir. 97-001 dated Feb.
5, 1997 for dormant accounts.

9.4.5.10 Comply with laws, rules and regulations governing prompt and regular
remittance of salary deductions for taxes and contributions to BIR,
GSIS, PAG-IBIG and other authorized agencies.

169

9.4.6 Revenues
9.4.6.1

Twelve audited agencies disclosed failure to accrue income and 13


NGAs showed unbooked/erroneously recording of income totaling
P60.61 million and P296.95 million, respectively resulting to the
understatement/overstatement of the Income account balances.

9.4.6.2

Uncollected income of ten NGAs amounting to P124.11 million was


reported such as the (a) current and prior years rental fees from
Fishpond Lease Agreement (FLA) required in the Fisheries
Administrative Order (FAO) No. 197, (b) mandated one percent share
on the gross sales of betting tickets in horse races,
(c)
dividend/interest earnings of investments in banks, (d) fees due from
electric cooperatives including penalties, (d) penalties collected for late
payment, and (e) collections made thru interbranch bank deposits
representing deposits made by applicants for payment of fees still
treated as reconciling items and no accounting entries were made to
record collections.

9.4.6.3

Collections of 14 NGAs, estimated to reach P74.18 million, were not


remitted or deposited intact daily to the National Treasury, authorized
depository banks or to the Head Cashier in violation of Section 69 of
PD 1445 and Section 21, Vol. I, NGAS Manual, thus exposing funds
of the government to risks of loss or misuse.

Recommendations
9.4.6.4

Instruct the Accountants to: (1) effect the recording of unrecorded


collections, (2) prepare reclassification entries on accounts erroneously
credited instead of the income account, and (3) adopt/ use the accrual
method of accounting for income already earned.

9.4.6.5

Management should formulate strategies to intensify the collection of


rent and other income prioritizing the schemes to be considered in
order to encourage payments from debtors with long overdue accounts.
The ERC should impose collection of fees due from Self-Generating
Facilities for renewal of their expired Certificate of Compliance
including the penalties thereon.

9.4.6.6

Management should closely monitor and supervise the prompt


remittance of collections in consonance with Section 69 of P.D. 1445
to safeguard government funds from misappropriation, loss or misuse.
Collecting Officers should be adequately bonded.

9.4.7 Expenses
9.4.7.1

Unauthorized/Illegal/Irregular expenses of about P267.40 million were


incurred for Collective Negotiation Agreement (CNA), incentives,
additional bonuses, Representation Allowance and Transportation
Allowance (RATA) and other allowances.

170

a. CNA estimated at P141.905 million were granted to agency officials and


employees including contractual employees in 30 NGAs.
The
Department of Agrarian Reform (DAR Region XI) registered the highest
CNA paid out amounting to P9.37 million. Such granting of CNA was
not in accordance with the: a) Special provisions in the Appropriations of
the LRA for 2010; b) DBM Budget Circular No. 2006-1; c) AO No.
135; d) PSLMC Resolution No. 04; e) LRA-CNA; and f) Government
Accounting and Auditing Manual. This constitutes irregular transaction
as defined under COA Circular No. 85-55A and also tantamount to
misuse of government funds as provided under Section 80, Chapter 7,
Book VI of E.O. 292.
b. Also, some disbursements for CNA were not supported with documents
contrary to Administrative Order No. 135 dated December 27, 2005 and
DBM Circular No. 2006-001 dated February 1, 2006, giving undue
disadvantage on the part of the government.
c. Other unauthorized/illegal/irregular expenditures incurred by 40
agencies in estimated amount of P39.96 million include: a) traveling
expenses collected were excessive and had no adequate supporting
documents,
b)
Implementation
of
project
for
the
Construction/Rehabilitation of MPB for Package 1-D, a) Construction of
MPB, Bago Aplaya and c) Rehab of MPB Ma-a, Davao City amounted
to P1.94 million was found irregular due to beneficiaries of the said
projects were cooperative and private corporation in violation Section
4(2) of PD 1445.
9.4.7.2 Expenses amounting to approximately P43.96 million were incurred without
approved budget while excessive expenditures for 19 NGAs amounting to P
680.55 million. Included therein are the following: a) Funds received from
Philippine Gaming Corporation (PAGCOR) were used for advertising and
media promotion activities by Department of Public Works and Highways
(DPWH) amounting to P30 million; b) meals and snacks were served during
meetings and in-house seminars that caused additional unnecessary expenses
amounting P5.87 million by Region III, among others.
9.4.7.3

Government fund amounting to P12.83 million was


activities/programs different from the funds intended purpose.

used

for

a. The school used its Maintenance and Other Operating Expenses


(MOOE) fund for 2011 to purchase supplementary reading and reference
materials (SRMs) contrary to Department of Education (DepEd)Department of Budget and Management (DBM) Joint Circular No. 20041. Likewise, the requirements in its purchase set forth under Department
of Education Order (DO) Nos. 48, S. 2011 and 112, S. 2009 were not
strictly complied totaling P7.86 million for purposes other than for which
they were appropriated contrary to Section 37 of Presidential Decree No.
1177 resulting in the misuse of government funds as defined under
Section 87 of Presidential Decree No. 1445.

171

b. The Special Trust Fund (STF) was used to the Program on Awards and
Incentives for Service Excellence (PRAISE) Incentive contrary to
Commission on Audit (COA) Circular No. 2000-002, Section 4(d) of RA
No. 8292 and RA No. 6758 as well as Civil Service Commission (CSC)
Resolution No. 010112, resulting in audit disallowance by Northwest
Samar State University amounting to P4.96 million.
9.4.7.4

Expenses amounting to approximately P485.60 million were incurred even


without complete documentation.
a. The types of expenditures incurred were the following: a) undocumented
purchases of gasoline, oil and lubricants; b) absence of information as to
the time of arrival/departure in the itinerary of travel as required under
Executive Order No. 298 dated March 23, 2004; c) payments to
consultants which were not supported with proofs of actual service
rendered; d) grants of Collective Negotiation Agreement (CNA) were
not supported with documentations as required under Department of
Budget and Management (DBM) Budget Circular No. 2006-001 dated
February 1, 2006; and d) documents not signed by authorized officials.

Recommendations
To preclude incurrence of unauthorized/illegal/excessive expenditures and the
misuse of government funds including erroneous recording thereof, we recommend the
following:
9.4.7.2 Require the agency heads to explain in writing and submit legal basis that
would justify the granting of Collective Negotiation Agreement (CNA),
incentives, representation allowance and transportation allowance (RATA),
additional bonuses and other allowances, otherwise the amount should be
refunded. Henceforth, management should strictly adhere to the provisions of
Administrative Order No. 135 dated December 27, 2005, DBM Budget
Circular No. 2006-001dated February 1, 2006, Presidential Decree No. 1597,
Section 4 of Presidential Decree No. 1445 and other issuances relevant to said
transactions.
9.4.7.3 Direct the Budget Officers to exercise due diligence and proper control over
the disposition of government funds and remind them of the personal liability
of the persons responsible for the incurrence of overdrafts as provided under
Section 41, Book VI of the Revised Administrative Code of 1987, Section 47
of Presidential Decree No. 1177, Section 20 of Republic Act No. 992, and
other related issuances.
9.4.7.4 Ensure that overspending of allocated funds is avoided through realistic
planning/programming; otherwise realignment should be properly made, if
warranted. Make representations with the Department of Budget and
Management (DBM) for the issuance of the Special Allotment Release Order
(SARO), for authorized overdrafts, to adjust the same.

172

9.4.7.5 Secure the operational efficiency of agencys assets in order to attain the
desired goals/outputs of each program or project.
9.4.7.6 Stop the payment of professional fees/honoraria/incentives to officers and
employees involved in regular activities which are in line with their officially
mandated functions. Determination of individual liability shall be done upon
receipt of Notice of Disallowance, without prejudice to the provisions of
Section 7 of Department of Budget and Management (DBM) Circular No.
2007-01 on the responsibility and personal liability of agency heads. Require
the refund of the amounts illegally received.
9.4.7.7 Ensure that funds are used in accordance with the purpose for which these are
intended. To avert misuse of funds, install policies and controls on the proper
use of funds; prepare a program of expenditures or a Work and Financial Plan
and require submission of audited Statement of Utilization or report on the
completion of the project or trip with accompanying details of transaction.
9.4.7.8 Analyze the transactions resulting to understatements and overstatements of
expenditures and prepare the correcting entries. PPE and inventories should
be recorded using the appropriate asset accounts. Depreciation should be
computed using the Straight Line Method.
9.4.7.9 Direct the Accountant to adhere strictly to the provisions of Section 4 (6) of
Presidential Decree No. 1445, the Omnibus Rules Implementing Book V of
E.O. No. 292 and other Civil Service Laws, Executive Order No. 298 dated
March 23, 2004, Department of Budget and Management Circular No. 2006001 dated February 1, 2006, Department of Budget and Management Circular
No. 2010-3, and other directives, requiring completeness of supporting
documents to claims before payments.
9.4.8 Compliance
Submission of reports/documents
9.4.8.1 Yearend/monthly reports, disbursements vouchers (DVs) and supporting
documents (SDs) and other reports of 12 agencies were submitted beyond the
reglementary period as required under Section 7.2.1(a) of Commission on
Audit (COA) Circular No. 2009-006 dated September 15, 2009, causing delay
in the analysis and review of the accounts and delay in informing
management of the deficiencies noted therein;
9.4.8.2 Copies of the contracts with supporting documents of nine agencies/campuses
were not submitted to the COA Auditor within the prescribed period as
required under COA Circular No. 96-010 dated August 15, 1996;
9.4.8.3 Disbursement vouchers amounting to P40.96 million of 30 agencies were
paid
even
without
complete
supporting
documents
and/or
approval/certifications by proper officials contrary to the provisions of Section
4 of Presidential Decree No. 1445.

173

Recommendations
9.4.8.4

Require the submission of reports by the concerned personnel within


the prescribed period to facilitate the recording of transactions in the
agency books of accounts so as to provide timely and accurate
information for management decision-making and for eventual postaudit of the agencys financial transactions by the Commission on
Audit as required under Sections 100 and 122 of Presidential Decree
No. 1445 and Section 7.2.1(a) of COA Circular No. 2009-006 dated
September 15, 2009. Enjoin the accountable officers to submit on time
accountable reports for recording in the books of accounts;

9.4.8.5

Require the concerned personnel to submit the contracts/purchase


orders and the supporting documents to COA within the prescribed
period in accordance with COA Circular No. 87-278 and COA
Memorandum No. 2005-027, restated with amendments under COA
Circular No. 2009-001 dated February 12, 2009; and

9.4.8.6

Require the Accounting Unit to evaluate the transactions as to


completeness of supporting documents and such are properly
accomplished particularly the signatures of authorized officials and
employees on each and every document attached to the claim.

Procurement
9.4.8.7

Procurement of various goods and services totaling P4.75 billion


reported by 31 audited agencies which did not disclose the amount was
made without complying to the applicable provisions of RA 9184,
otherwise known as the "Government Procurement Reform Act".
These violations include the following:
a. Failure of the concerned personnel to diligently and
conscientiously perform their duties and responsibilities
particularly in gathering the baseline prices as Approved Budget
for the Contract (ABC) of the bid items, for guidance and
comparison;
b. Procurement were done without public bidding; and
c. Procurement of supplies and materials and property, plant and
equipment were made without Annual Procurement Program
(APP) resulting in uneconomical and inefficient procurement.

174

Recommendations
9.4.8.8

Require the Bids and Award Committee (BAC), BAC Secretariat and
Technical Working Group to establish criteria/standards for the
establishment of the baseline prices as ABC of items offered for public
bidding; and

9.4.8.9

Comply with the Annual Procurement Plan (APP) and observe


Competitive Bidding and/or Alternative Modes of Procurement in
accordance with the provisions of Republic Act No. 9184 and its
implementing rules and regulations (IRR).

175

9.5 Significant Audit Observations and Recommendations


Presented below are the significant audit observations and recommendations on the
audit of national government agencies submitted by auditors of the National Government
Sector and Regional Offices of this Commission.
RECOMMENDATIONS
AUDIT OBSERVATIONS
9.5.1 Games and Amusement Board
(GAB)/Philippine Racing Commission
(PhilRaCom)
Establish a stricter collection policy so that
all revenues are collected in full when due
and conduct a legal study with the
assistance of the Office of the Solicitor
General on the imposition of a penalty for
every day of delay in the remittance or
possible refusal to grant a racing permit.

PhilRaCom failed to enforce timely


collection of the mandated one per
cent share on the gross sales of betting
tickets in horse races conducted by the
Philippine Racing Club, Inc. (PRCI)
and Manila Jockey Club, Inc. (MJCI)
hence,
the aggregate amount of
P29,115,017.22 remained uncollected as
of December 31,2011.
9.5.2 Bureau of Customs (BOC)
9.5.2.1 BOC-OCOM

BOC Commissioner to: (a) Collect the


customs
duties
and
taxes
Of
P26,072,076,273.68; (b) cancel the TCCs
revalidated in August 2006 in the amount of
P992,617,575.46;
(c)
adjust
the
unaccounted
utilization
of
P1,902,363,177.08; and (d) require the
submission of the dockers corresponding to
the TCCs issued by OSS-DOF in the
amount of P436,996,426.84.

Illegal drawback of custom duties and taxes


approved by BOC amounting to
P26,072,076,273.68 from CYs 2006 to
2011 contrary to the provisions of the Tariff
and Customs Code of the Philippines.

9.5.2.2 Port of Manila (BoC-POM)


Consider the possibility of requiring
importers to pay immediately the customs
duties and taxes, subject to refund if
imported articles were used in the
production of export articles/goods, instead
of the present practice of accepting bonds
which was proven not to be a sufficient

(a) Matured bonds/outstanding accounts of


surety companies relative to warehousing
in
the
total
amount
of
P4,633,233,743.28 for CY 2011 and
prior years have not been collected/

176

RECOMMENDATIONS

AUDIT OBSERVATIONS
settled, which is an indication of lapses
in
the
enforcement
of
existing
operational procedures to collect/settle
such matured bonds. Of this amount,
P718,901,439.50
refers
to
2011
transactions.

surety to various obligations of the


importer or principal.

(b) A total of 1,489 container vans were


not confirmed as received by the Port
of Batangas and did not reach its final
destination at the Port of Batangas
with invoice value of S7,776,390.33 or
P339,124,957.42. This resulted due to the
failure of POM officials and employees
to implement the proper operational
procedures
for transhipment
and
security
measures instituted by the
Bureau of Customs such as the
mandatory x-ray scanning, underguarding
of the shipments until receipted by the
Port of Destination in case of manual
processing and payment of duties and
taxes at the Port of Discharge in case
of e2m processing and disapproval of
the Transhipment Permit in case where
the registered address of the consignee
is nearer the Port of Discharge. This
resulted in the loss of revenue in the
form of duties and taxes.

Hold all personnel involved in the


processing of transshipment of the
missing container vans responsible for
the loss of revenues; file criminal and
administrative charges against them.

9.5.2.3 Manila International Container Port


(BoC-MICP)
Intensify collection of all outstanding
accounts of concerned surety companies
and importers; submit to COA, a report on
the receivables collected.

(a) Based on the List of Surety Companies


with Outstanding Accounts as of December
31, 2011, 44 surety companies have
outstanding
accounts
totalling
P1,198,653,525.03. Of this amount,

177

RECOMMENDATIONS

AUDIT OBSERVATIONS
P254,395,327.23 pertain to CYs 2000 to
2011 transactions, while the
rest
representing 79 percent were outstanding
accounts of 1999 and prior years.
According to the Chief of Bonds
Division, the 79 percent accounts are no
longer moving and suggested to be
recommended for write-off.
(2) Eight hundred seventy containers
for transshipment, with an estimated
duties and taxes of S7,352,627.51 and
P341,752,699.90, respectively were not
confirmed as received by the Port of
Batangas. While out of the 222
manually processed transhipments, 162
container vans were also not confirmed
as received by the Port of Batangas.
This indicated failure on the part
of concerned MICP officials and
employees to implement the proper
procedures and security measures on
transhipment instituted by the Bureau
of
Customs such
as the applicable
provision of the TCCP, CMO Nos.
14-2011,
9-2011 and 43-2010, that
have resulted in the loss of revenue in
the form of uncollected customs duties
million
and taxes of at least P342
for
transhipments processed under the
e2m alone and an undetermined amount for
the a62 container vans manually processed.

Hold all personnel involved in the


processing of transshipments of the
unaccounted containers liable through
their payment of the duties and taxes
due to the National Government; charge
them criminally and administratively;
implement Section 3.1.1.6 of CMO
43-2010 for all transit shipments, whether
under manual or electronic to mobile
customs system processing; explain why
the 5,813 declaration, with duties and
taxes due of P8,231,867,748.09 were
allowed to be transshipped to the nearby
port.

(3) Excise Tax was misapplied to


custom duties and taxes amounting to
P8,345,184.40 since this excise tax was
not paid at the Bureau of Customs and
therefore not a duty drawback. The
total amount of duties and taxes of

Submit the original copy of Bill of


Lading, suppliers commercial Invoice
and Packing List; collect the amount
of P8,345,184.40 from the importers
otherwise,
customs
personnel, who
approved the transactions, shall pay the
amount.

178

RECOMMENDATIONS

AUDIT OBSERVATIONS
should
P11,008,634.00
collected by the MICP.

have

been

9.5.2.3 Bureau of Customs Ninoy Aquino


International Airport (BoC-NAIA)
(1) Due and Demandable Bonds totaling
P66,842,444.50 which pertains to prior
years transactions and expired since
1973-2005 remained outstanding as of
December 31, 2011.

Institute measures to intensify the


collections of all outstanding bonds of
surety companies; ensure that no surety
company shall be given accreditation
until they settle their obligations with the
BoC.

(2) There
were
unaccounted/missing
jewelry, watches and Philippine currency,
and other held baggage receipt (HBR) with
some articles of undetermined amount.
The HBRs are high value goods that are
supposed to have been transferred from the
In-Bond Section to the Vault of Collection
Division. Out of the 15 HBR
forfeited/seized, only six were inventoried
and nine are unaccounted/missing.

Submit held baggage receipt (HBR) for


each seizure or confiscation made,
regardless of the articles and the amounts
involved, within 24 hours upon seizure;
provide for a safe bodega to deter loss,
pilferage or theft of the valuable cargoes;
require proper turn-over of accountability
between the outgoing and incoming
responsible officials or AOs; conduct
an investigation on the alleged missing
jewelries and hold
liable those
responsible for the loss of government
property pursuant to Section 105, PD 1445.

9.5.3 Veterans Memorial Medical Center


(VMMC)
Plan carefully all activities and review prior
years accomplishments before setting its
performance measures and targets to ensure
the attainment of the agencys goals and
objectives.

Delayed implementation of VMMC


projects for Renovation of Out Patient
Department and Dialysis Center with
allocated Capital Outlay of P53,000,000.00
for CY 2011 deprived the patients of the
use of the equipment and facilities for
hospitalization and medical care and
treatment.

179

RECOMMENDATIONS

AUDIT OBSERVATIONS
9.5.4 Department of Energy (DOE)
(1) Based on the list provided by the LTO
and LTFRB, out of the estimated 220,000
Public Transport Assistance
Program
(PTAP)
beneficiaries, only 156,514
PTAP cards or 71.1 percent were
generated/printed; out of the printed
PTAP cards, only
90,259 or 57.67
percent were loaded with cash value of
P1,050 each, as of December 31, 2011, due
to lack of verified and validated final list of
beneficiaries, disinterest and reluctance of
some driver beneficiaries to stop plying
their routes just to claim the cards and
their inability to produce the required
documents.

Request a report from the LTO/LTFRB


Regional Offices citing the factors/
reasons for the non-availment of the
beneficiaries in
some regions that
contributed to the very low distribution
rate to enable the DOE to come up
with remedial measures to address the
constraints for better performance; in
coordination with LTO/LTFRB, maintain
an
updated database of
the
PUJ
beneficiaries who have complied with the
required annual vehicle registration to
assure that in the
succeeding round
of PTAP assistance, all the PTAP cards
to be loaded with the cash value are valid.

(2) The distribution of the five million


Compact Fluorescent Lamps (CFLs)
procured under Lot 1 of Component 1.2 National Residential Lighting Program of
the Philippine Energy Efficiency Project
(PEEP) at a total cost of P171,593,960.00,
programmed to be distributed within a
period of three months as per contract to
GRM International Inc. (GRM) dated
September
9, 2009, was
not
yet
completed as at year-end despite lapse of
two years and three months with 359,711
pieces costing P13.6 million remaining
undelivered as at January 12, 2012.
Further, the 2,533,705 Incandescent Bulbs
(IBs) stored at GRMs warehouse for
disposal plus an undetermined number with
the Electric
Cooperatives (ECs)
in
Mindanao remained undisposed as at
year-end.

Ensure that the causes of the delay


of project implementation of Lot 1
are addressed by the PEEP officials for
the effective implementation of Lot 2
involving 3,600,000 CFLs for distribution
up to 31 March 2013 and extend assistance
to GRM and concerned ECs in the disposal
of the IBs.

180

RECOMMENDATIONS

AUDIT OBSERVATIONS
9.5.5 Philippine Air Force (PAF)
Out of the total P12.3 billion cash
allocation received by the Philippine Air
Force from the Department of Budget
and Management (DBM) and from the
AFP General Headquarters (GHQ) for
the year 2011, only P10.7 billion was
utilized due to
the delay in the
downloading of projects to procurement
centers and in the conduct of bidding and
procurement activities
thus,
P1.6
billion or 13.17 percent intended for
various programs/ activities was reverted
back to the National Treasury.

Streamline the agencys procurement


procedures; provide specific timeline in
processing of claims to maximize
utilization of funds.

9.5.6 Industrial Technology Development


Institute (ITDI)
Limit the activities to the agencys
mandated functions as identified in the
OPIF and focus more on the monitoring and
documentation of results from the users of
the technology to determine success or
failures which would help management in
further improving the technology.

Financial resources of P36,110,010.00


could have been saved and utilized for other
research and development projects had the
agency limited its activities to the
implementation of projects that are aligned
with its mandated functions of research
and development, transfer of technology
and technical services, among others. The
production and distribution of ovil
larvicidal trap kits are not among the
mandated functions of the agency.
9.5.7
Science
and
Technology
Information Institute (STII)

Maximize the use of the fund appropriated


for the project and make sure that it is
utilized for the intended purpose.

Appropriation
in
the
amount
of
P7,000,000.00 released under Agency
Budget Matrix No. BMB 11-005015 dated
February 3, 2011 for the project
Rehabilitation of STII Building (electrical
and cable system) was not utilized due to
failure to implement the project during the
year.

181

RECOMMENDATIONS

AUDIT OBSERVATIONS
9.5.8 Metro Manila Development
Authority (MMDA)
The agency, in line with its sanitation
program, procured between 2003 and
2009 a total of 1,040 units of male urinals
costing P26.25 million of which only 477
units were installed but were not also
properly maintained. The balance of 563
units costing P12.18 million remained
uninstalled and improperly stored, some
of which are already dilapidated, being
exposed to the elements, thereby, defeating
the objective of the program and resulting
in wastage of government funds.

Determine the proper and immediate


utilization of the remaining urinals. In the
meantime, store/keep them in a covered
place to prevent them from further
deterioration/corrosion; observe prudence
in the exercise of the agencys function and
stop the practice of procuring items in
excess of what is needed;
undertake
proper
maintenance and cleanliness of
installed urinals to avoid the presence of
foul/stinky odor.

Mobilization
fee
amounting
to
P10,522,582.00 paid to ITP Construction,
Inc. for a project that was not implemented
has not been collected from the contractor
and remained outstanding for over eight
(8) years resulting in loss/wastage of
government resources.

Submit the status report on management


action pertaining to the collection of
P10,522,582.00 from ITP Construction, Inc.
and institute appropriate legal action against
the contractor.

9.5.9 Office of Civil Defense (OCD)


The Joint Venture of Joavi Philippines Inc.,
Talon Security Consulting & Trade Ltd and
Aquasports Boats & Yachts Co., Ltd.
failed to deliver within the scheduled
timeline of September 30, 2011 the 52
units of Rigid Hull Inflatable Boats
(RHIBs),as stipulated in their contract,
but management only took action to
terminate the contract per Notice of
Termination issued dated January 12,
2012, contrary to the provisions of RA No.
9184. Such failure deprived the beneficiary
municipalities on the use of the same
for rescue and relief operations in times of
calamities.

Forfeit the performance security posted by


the contractor; enter into a new contract for
the delivery of 52 units of RHIBs through
the applicable mode of procurement
provided under RA No. 9184; and blacklist
the Joint Venture of Joavi Philippines Inc.,
ltd., in future public biddings to be
undertaken by the office.

182

RECOMMENDATIONS

AUDIT OBSERVATIONS
9.5.10 Department of Social Works and
Development (DSWD) -OSEC
The total Over-the Counter disbursements/
liquidations recorded in the books for the
Pantawid Pamilyang Pilipino Program
(4Ps) amounted to P14,486,750,011.28, out
of which only P10,716,588,449.28 were
properly documented and verified, leaving
P3,770,161,562.00 as unaccounted balance,
thus affecting the reliability of the ending
balances of the Cash in Bank -LCCA for
various 4Ps account.

Demand from the LBP the immediate


submission of the complete reports
including the Lists of Paid 4Ps
Beneficiaries for the period October, 2008
to December, 2009 so that the pertinent
disbursements could be recorded in the
books and their legitimacy and regularity
could be established; henceforth, require
regular and timely submission of the
reports/lists to avoid accumulation of
unaccounted disbursements and thus,
establish a reliable Cash in Bank-LCCA
(4Ps OTC disbursements) account.

9.5.11 University of the Philippines (UP)


System
Submit the documents and clarify matters
as aforementioned to enable us to make a
decision in audit; conduct regular and strict
monitoring and checking of the rentals
made by ALI based on the actual
occupancies and lease rates realized to
ensure that the accurate/correct amount is
reflected and acknowledged accordingly;
exercise the agencys right to audit and
examine pertinent documents related to the
operation of the said leased property.

The P169,430,596.88 rentals for the UPAyala Techno Hub property could not be
verified due to lack of supporting
documents,
including
the
unsettled
technical and auditorial issues raised
previously on the P4.2 billion 25-year lease
contract entered into by the University of
the Philippines and the Ayala Land, Inc.
(ALI) delaying further the complete
determination
of
the
accuracy,
reasonableness and validity of the said
project.
9.5.12 Tondo Medical Center (TMC)

Undertake the necessary measures to make


all the machines which are still functional
or can still be repaired operational such as
immediate repair of the machines and
assign personnel to handle this type of lab
test; after the machines became operational,
recommend for termination of the contract
for conduct of lab test for histopath with
private provider; and henceforth, ensure
.

Laboratory equipment for processing of


histopath specimen costing P7,124,615.00
were left
unutilized since CY 2002 due
to non-assignment of personnel to handle
the procedure thereby maximum utilization
and purpose to which the machine was
procured was not achieved as the machine
remained idle, resulting in foregone
undetermined revenues and deprived the

183

AUDIT OBSERVATIONS

RECOMMENDATIONS

hospital in the delivery of quality health


care services using its own machines.

that the requirements of the machines are


taken-cared
of
to
maintain
their
functionality.

9.5.13 Bureau of Workers of Special


Concerns (BWSC)
Enforce compliance by DOLE ROs with
DOLE AO No. 311 and DO No.70-04 to
remit the forfeited amounts; take up the
receivables from DOLE RO and Mill
Planters Association/Cooperative for the
unremitted amount; and require the
Accountant to work back and prepare a
subsidiary ledger on a per region/mill
basis to arrive at a reconciled balance.

The forfeiture scheme of the unclaimed/


undistributed Sugar Amelioration Program
(SAP) funds provided under RA No. 6982
and RA No. 809 is still not fully
implemented due to the failure of BWSC to
enforce compliance by DOLE ROs with
DOLE Administrative Order No. 311 and
DOLE Department Order No. 70-04
requiring the remittance of the forfeited
UCBF, thus, the forfeited UCBFs
amounting to P89,825,939.34 are still
unremitted
by
the
Mills/Planters
Associations/Cooperatives.
9.5.14 Food and Drugs Administration
(FDA)

Create an Inventory Committee to conduct


an inventory of all equipment procured thru
the e-Government funds of BIIS to
determine/assess their existence, condition
and the usage and prepare a report thereon;
on the basis of the report of the Inventory
Committee, determine the appropriate
action to be made; and resort to legal
remedies to oblige the Medi Data Inc. to
submit all the contracted deliverables.

After six years from the procurement of the


needed equipment for the Bureau of Food
and Drugs Administration (BFAD)
Integration Information System (BIIS)
Automation Project of the then BFAD with
Project cost of P51,524,482.00, its intended
purpose which is to make efficient and
effective the systems and procedures
registering
product
and
licensing
establishments and in verifying and
confirming transaction status through the
implementation of automated system is yet
to be achieved or even is in danger of not
attaining it at all since the BIIS was not yet
tested as of December 31, 2011 to
determine its present capability for the
automation of the
systems coupled
with the obsolescence and utilization of
some of its component equipment for other
purposes costing P11,741,592.00.

184

RECOMMENDATIONS

AUDIT OBSERVATIONS
9.5.15 Department of Labor and
Employment (DOLE) OSEC
(a) In 2011, prospective employers of 13
POLOs were erroneously charged with
verification fees in the total amount of
P20,419,688.04 due to the use of fixed
arbitrary rates which were neither the spot
rate or collection rate, as periodically
determined by the DFA in computing for
the local currency equivalent of the US$10
verification
fee
pursuant
to
DOLE/DFA/DBM/DOF/
COA
Joint
Circular No. 3-99 dated September 28,
1999. (b) The recorded collections in the
books of the DOLE-OSEC were
understated by P20,711,535.12 as the same
arbitrary fixed rate of exchange was used in
computing for the United States dollar
(US$) equivalent of the total local currency
collection, or the fixed rate of US$10 per
document verified.

Make representation with the concerned


agencies to revisit existing guidelines on
the collection rates to be applied in the
collection of verification fees in the posts in
order to arrive at just fair and proper
collection rates; apply the average rate of
exchange for the month in converting local
currency to US$ and eventually to
Philippine Peso, observe diligence in the
use of conversion rates, carefully review the
computations, and prepare the necessary
adjusting entries to correct the affected
accounts.

Require Manila Economic Cultural Office


(MECO) to account for the excess funds
including interest earned from the Third
Portion/Common Fund as of CY 2008 up
to December 31, 2011 and remit DOLEs
share pursuant to the provisions of existing
MOAs; through the FMS, take up such
share in the Third Portion/Common Fund
in the books of accounts; and initiate the
amendment of existing MOAs to the effect
that the verification fee collections set
aside for the Third Portion/Common Fund
should not be considered as the share of
MECO but the share of DOLE which is to
be administered by MECO.

(c) While the amounts set aside for the


Third Portion/Common Fund are intended
for DOLEs programs and projects in
Taiwan, these were considered as MECOs
share under the existing MOAs, thereby
understating the receivable, income,
expense and cash accounts by the same
amounts. Moreover, DOLE did not even
assert its rights under the MOAs to demand
its share on the excess funds including
interest
earned
from
the
Third
Portion/Common Fund. For CYs 2010 and
2011 alone, comparison of actual
collections with the approved Work and
Financial Plan for the same period showed
excess
funds
amounting
to
NT$5,413,675.00 or a 50 percent share
share of NT$2,706,837.70, excluding share
from interest earned on the funds, which
remained in the custody of MECO. (FX rate
is P1 per NT$1)

185

AUDIT OBSERVATIONS
9.5.16 Department of Labor
Employment (DOLE) OSEC

RECOMMENDATIONS
and

(a) The failure of Labor Attaches to deposit


and seek clearance from accountabilities
prior to transfer to another post or upon
recall to Home Office as required under
Sections 69 and 80 of PD 1145, Section 101
Part H of DFA Department Order No. 19A95 and Section 57 of MNGAS ,Volume II,
collections amounting to P5.30 million
remained in their custody as of January
2012, thereby exposing the funds to risk of
loss thru theft or personal use.

Demand from the concerned incumbent


Labor Attaches the immediate deposit to
the bank of their respective collections
which remained undeposited, and the
former Labor Attaches the immediate
payment to DOLE Central Office of their
unsettled
accountabilities;
institute
appropriate administrative disciplinary
action for any unjustified failure by the
Labor Attaches concerned to comply with
Section 69 of PD 1445 pursuant to Section
127 of P.D 1445; refrain from allowing
deduction of accountabilities from claims
for terminal leave benefits and other
allowances. (Note: Management allowed
the accountabilities of the five (5) Labor
Attaches totaling P491,272.26 be deducted
from their respective claims for terminal
leave benefits and overseas allowances
instead
of
imposing appropriate
disciplinary action for their non-compliance
with existing laws, rules and regulations.
Advise Labor Attaches to strictly adhere to
existing rules and regulations on collection
and deposit and on the requirements to be
complied with upon end of tour of duty or
prior to assignment to another post; and
require the Labor Attaches/Collecting
Officers to regularly deposit collections and
to submit Certificate of Clearance from
fund and property accountabilities or Final
Report of Accountability upon recall or
prior to transfer to another post.

(b) The receipt of donations in the total


amount of P116.83 million (inclusive of
P1.56 million interest income) and
disbursements of P116.72 million as of
December31, 2011 for the implementation

Require: the FMS to take up the financial


transactions of the DOLE-CGMA Project in
the books of DOLE; the Manager/Director
of DOLE-CGMA Project to advise the
FFCCCII to prepare and submit Certificate

186

AUDIT OBSERVATIONS

RECOMMENDATIONS

of the DOLE-CGMA Project were not


taken up in the DOLEs books of accounts
despite COAs opinion that the funds
collected are government funds. Moreover,
the funds were not safeguarded against
misuse/misappropriation as DOLE did not
require its Labor Attaches to issue Official
Receipts upon acceptance of donations in
violation of Section 68 of PD 1445.
Likewise, there was inadequate monitoring
of completed classrooms casting doubt on
the existence of the reported 495
classrooms as Certificate of Completion by
the Contractors and Certificate of
Acceptance by the Principals were not
submitted to DOLE, contrary to the
requirements of the MOA and COA
Circular 89-294 dated February 1, 1989.
As a result, completed classrooms were
not taken up in the books of the
Department of Education (DepEd).

of Completion and Certificate of


Acceptance for every school building
project completed, and submit to COA the
original copy of the following documents
pertaining to the reported 603 classrooms
completed as of December 31, 2011:
a. Statements of Work Accomplished for
the school building projects completed;
b. Certificate of Completion from FFCCCII
with information on project cost;
c. Certificates of Acceptance by the
Principals of the respective schools;
d. Matrix of Completed Projects by Region
with project costs as basis for recording in
the books of DepEd;
e. Official Receipts from DBP for the
accepted donations; and Bank Statements
from DBP.

9.5.17 Philippine Overseas


Employment Administration (POEA)
OEC fees collected by POLOs totaling
P3,504,912.12 were not remitted/deposited
to the depository banks of POEA as of
December 31, 2011 while of the
CY
P56,731,245.68 collections during
2011,
only
P55,946,854.31
were
remitted/ deposited as courier/freight and
bank charges of P784,391.37 were deducted
outright from the collections. Remittances
of collections during the year were also
delayed by one to eleven months contrary
to Section 69 (1 and 4) of PD 1445 and the
requirements of unnumbered POEA
Memorandum Order dated March 11, 1997.

Require the Chief of the Regional and


Overseas Coordinating Office (ROCO) to
coordinate immediately with the concerned
POLO accountable officers and demand
immediate remittance of all collections still
maintained with the Embassy account to the
depository account of POEA; submit the
collection reports together with the
supporting documents right after the deposit
of collections to avoid delay in
the
submission of such to the Accounting
office; consider imposing of penalties/
sanctions to those who fail to follow
the
requirements of existing regulations; and

187

RECOMMENDATIONS

AUDIT OBSERVATIONS

require all designated/deputized POLO


collecting officers, to adhere strictly to the
guidelines and stop the malpractice of
charging expenses outright from the funds
collected. All expenses incidental to the
remittance shall be requested for
reimbursement from POEA office; and
concerned officials, in coordination with
the International Labor Bureau (ILAB) of
the Department of Labor and Employment
(DOLE) with the approval of the DOLE
Secretary, to devise/ formulate updated
policy/ guidelines on deposit/remittance of
processing fees collected by POLOs in
behalf of POEA and the charges of
expenses pertinent to the remittance and
transmittal/ submission of financial reports
to the Accounting Division in accordance
with existing laws, rules and regulations.

9.5.18 National Museum (NM)


Adequacy of the Museum's financial
management system was not sufficient to
efficiently track cash and investment
transactions, resulting to unrecorded bank
transfers of P188,921,248.99 from the
Endowment Fund to private depository
banks (BPI/BDO), which rendered Cash in
Bank-LCCA and Investment accounts
unreliable, as well as putting the legality of
the transaction in question.

Seek authority from the BSP Monetary


Board to invest Museum Endowment Fund
thru private banking institutions; provide
the proper basis of investing in nongovernment securities; capture in the
agencys financial management system
vital information on any and all aspects of
government
financial
transactions;
promptly clear discrepancies and errors in
the books; regularly prepare and reconcile
balances per books and per bank.

188

RECOMMENDATIONS

AUDIT OBSERVATIONS
9.5.19 Technical Education & Skills
Development Authority (TESDA)-Main
Advance payments to the Procurement
Services
(PS)
amounting
to
P19,391,647.01 as of December 31, 2011
remained outstanding for six years now due
to the failure of the said agency to deliver
the goods intended for the operations of the
three foreign assisted projects which were
already completed in 2006 and 2009. In
effect, the opportunity to maximize the
utilization of the said amount during the
projects implementation became futile.

Make representation to the Procurement


Services to remit to the National
Treasury the amount of advance payments
that remained idle which were intended for
the foreign assisted projects that had
already been completed in 2006 and 2009;
or
coordinate with DBM
for fund
realignment then suspend the issuance of
advance payments to PS until the said
amount had been consumed by delivering
the requested orders of TESDA.

9.5.20 Department of Public Works and


Highways (DPWH) - NCR
(a) Five infrastructure projects from 2008 to
2010 amounting to P233.53 million were
not yet started as of December 31, 2011
while eight projects totaling to P453.11
million were repeatedly suspended due to
lack of sufficient detailed engineering
investigations, surveys and courses of
action to hasten the resolution of the right
of way (ROW) issues resulting in the nonprovision of the needed infrastructures as
planned.

Strict compliance with the requirement


under Section 17.6, Rule VI, IRR, RA No.
9184 before bidding or award of contracts;
undertake a review of all the Not yet
Started projects and the covering contract;
monitor all security/warranty filed for
projects suspended for more than one year;
and refrain from awarding contracts and
issuing Notice to proceed.

(b) Non-pay items amounting to


P10,122,306.85 were included in the
contract cost of P1,097,200,095.04 of 16
infrastructure projects to the detriment of
the government.

Exclude the non-pay items in the contract


cost since this is not in accordance with the
standard set by DPWH and for being
disadvantageous to the government.

189

RECOMMENDATIONS

AUDIT OBSERVATIONS
9.5.21 Department of Public Works and
Highways (DPWH) -OSEC
Significant delays in the implementation of
foreign-assisted infrastructure projects
funded by Official Development Assistance
(ODA) adversely affected the timely
utilization of the loan proceeds for the
purpose, thus resulted in the payment by the
government of commitment fees amounting
to P46,673,689.12 for Calendar Year 2011
and deprived the public of the benefits that
could have been derived from their
immediate and maximum use.

Accelerate/maximize the utilization of loan


proceeds by adopting efficient and timely
procurement procedures in accordance with
the guidelines of the foreign lending
institutions (FLIs); perform resurvey/update
the project design/specifications/scope of
work before the procurement/bidding in
order to avoid additional works and/or
several variation orders during the project
implementation; settle first the problems
on the land acquisition and resettlement,
which is a factor contributory to the
delay, before entering into loan agreement
with foreign countries/institutions, to ensure
smooth implementation of the project;
make representations with DBM for the
immediate allocation of the peso
counterpart funds; adopt an effective
Project Monitoring System that will keep
track of the implementation of the project
vis-a-vis the approved Implementation
Schedule and Disbursement Schedule
embodied in the loan agreement to avoid
the incurrence of commitment fees.

9.5.22 Department of Transportation and


Communication (DOTC)-OSEC
Initiate action for the resolution of the
herein dispute with the MRTDC using the
dispute settlement provided under the BLT
Agreement to finally put closure to the
above discussed matters; instruct the
Accounting Division to stop recording the
conditional DRP receivables until the
dispute between the DOTC and MRTDC is
finally resolved in order not to overstate the
balance of the Accounts Receivable and

The balance of Accounts Receivable


totaling P799,785,218.11, as of December
31, 2011 includes condition receivables of
P796,799,336.97 representing uncollected
Development Rights Payments (DRPs)
from the Metro Rail Transit Development
Corporation (MRTDevco) for the air space
above the undeveloped Stations of the
LRTS Phase I, which are under dispute
rendering the reported balance bloated.

190

AUDIT OBSERVATIONS
RECOMMENDATIONS
Government Equity; and make proper
disclosure in the Notes to FS the disputed
accounts receivable from the MRT DevCo
so as not to mislead the readers of the
financial statements.

9.5.23 Philippine Coast Guard (PCG)


Philippine Coast Guard
recorded the
receipt of Marine Environment and
Protection Equipment and Supplies from
the Department of Transportation and
Communications (DOTC) in the total
amount of P319 million without complete
documentation. The receipt includes some
equipment which were not requested.
There was no report submitted by PCG
Technical Inspection and Acceptance
Committee.

Coordinate with DOTC officials on the


equipment to be requested and to be
accepted. PCG may refuse acceptance of
equipment and inventories being transferred
when not needed or when not in accordance
with the specifications to avoid wastage of
government resources.

9.5.24 Department of Trade and Industry


(DTI) OSEC
MSMED Council to ensure the full
realization of the expected outcome
provided under the BMBE law, which is the
growth and integration of the informal
BMBEs to the mainstream economy to
generate employment and alleviate poverty,
through the maximum use of the BMBE
Development Fund; cause compliance with
Section 12 of RA 10147 and facilitate the
remittance of the Fund to the National
Treasury; formulate and issue policy
directive requiring the implementing
agencies to prepare and submit work and
financial plans that will support the Special
Budget that will be submitted to the DBM
to facilitate the withdrawal of needed funds
for
the
implementation
of
the
projects/activities included in the plans;
ascertain and assess constraints that caused
the very low rate of fund availment, and
promptly take appropriate actions to

Ineffective use of the Barangay Micro


Business Enterprise (BMBE) Development
Fund amounting to P362,161,074.38 in
view of the: (a) treatment of PAGCOR
donation of P300 million endowment
fund, which limits the use to the interest
earned from the placements, (b)
exceptionally low fund availment rate of
3.49 per cent due to the absence of plans
and the inability of the Micro Small and
Medium
Enterprise
Development
(MSMED) Council to take appropriate
actions on the consistently very low
fund utilization, (c) actual beneficiaries of
the
projects/activities
were mostly
government officials/ employees and
existing micro entrepreneurs who were
not the intended beneficiaries under the
BMBE law, and (d) the nature and
purpose
of
some
of
the
projects/activities undertaken were not in
accord with the specific intent for which the
fund was established
191

RECOMMENDATIONS

AUDIT OBSERVATIONS
.

address the problems at hand; ensure that


the registered BMBEs are the end
beneficiaries of the projects/activities and
the objectives of the projects/activities to be
undertaken are strictly in accordance with
the purpose for which the BMBE Fund was
set up; revisit the related provisions of RA
9178 and the Implementing Guidelines
drawn by the DTI; and if deemed
warranted, initiate and move for the
amendment of the law and the guidelines
with the end in view of expediting
program/projects/activities that will spur
the development of MSMEs in general and
BMBEs in particular.

9.5.25 Department of Agriculture


(DA) - OSEC
(a) Slow availment of Official Development
Assistance (ODA) funds arising from
delayed implementation of foreign-assisted
infrastructure projects resulted in the
incurrence of commitment fees amounting
of P308,448,184.70 on top of interest
charges from CY 2002 to 2010.

Accelerate/maximize the utilization of loan


proceeds by adopting efficient and timely
procurement procedures in accordance with
the guidelines of the foreign lending
institutions; adopt an effective Project
Monitoring System that will keep track of
the implementation of the projects vis--vis
the approved Implementation Schedule and
Disbursement Schedule embodied in the
loan agreement; settle first problems on
land acquisition and resettlement in order to
avoid delays in project implementation.

(b) At the end of the Rapid Seed Supply


Financing Project (RaSSFiP) Phase II, a
total of 156,048 bags of undistributed
certified seeds (CSs) were converted to
ordinary palay due to age and low
germination rate after retesting and had
weight shrinkage of 197,823.11 kilos. or
4,945.58 bags causing loss to RaSSFip and
the
government
in
amount
of
P84,446,453.03.

Adhere to the RaSSFip Implementing


Guidelines for the delivery of certified
seeds in order to avail of the high
germination rate of the CS for a high rice
yield/production and avoid the incurrence
of losses.

192

RECOMMENDATIONS

AUDIT OBSERVATIONS
9.5.26
Bureau of Soils and Water
Management (BSWM)
A total of 166 units of Shallow Tube Wells
(STWs) amounting to P12,939,700.00
have not been fully utilized to provide
irrigation
needed to intensify
rice
production areas affected by the El Nio
phenomenon because they remained
undistributed to farmer-beneficiaries as of
December 31, 2011.

Conduct a full inventory of all the STWs


nationwide to completely account those that
were not distributed and those distributed to
beneficiaries; require them to support the
receipt and distribution with necessary
documents; and institute control measures
in order to safeguard the assets.

9.5.27 Pasig River Rehabilitation Center


(PRRC)
(a) Rent income from the housing units of
the informal settler families (ISF) at
Cardinal Sin Village and Villa San Isidro
Resettlement
Sites
amounting
to
P37,785,500.00 was not realized due to the
absence of lease contract between the ISF
and PRRC.

Prepare the lease contract between PRRC


and the ISF effective from the time they
occupied the housing units and thereafter,
and intensify the collection of the rental
due.

(b)
Ten
ferry
stations
costing
P180,871,959.43 constructed at Pasig
River funded out of Asian Development
Bank loan remained idle after the Pasig
River Ferry Service ceased its operation
since January 16, 2011
thus, the
government is paying a foreign loan for a
project whose main objective of
decongesting road traffic was not attained.

Open the ferry service to competitive


bidding and adhere to the requirement of
eighteen 50-passenger vessels instead of six
150-seater capacity vessels.

9.5.28 Department of Transportaion


and Communications (DOTC) - ML
Coordinate with the owners of the affected
properties and other concerned offices for
the immediate resolution of the problems;
require the contractor to immediately
rectify the defect noted in the re-testing of
the
system
and
undertake
the
commissioning of the new system; and

(a) The suspension of some airport/port


projects with the total recorded value of
caused
the
nonP481,162,167.51
commissioning of the new air traffic control
facility costing P510,221,290.30 and nonutilization of lighthouse spare parts/

193

AUDIT OBSERVATIONS

RECOMMENDATIONS

equipment worth P250,456,620.00 delaying


the achievement of the intended purposes
of these projects and may result in the
incurrence of additional cost or wastage of
government resources in the future.

prioritize the use of ATON spare parts


stocked at DOTC, including those readily
available in the Philippine Coast Guard
(PCG).

(b) Out of the FrF 48.797 million or


P295.593 million worth of delivered
equipment for the Global Maritime Distress
and Safety System (GMDSS), 70 percent or
P208,453,760.85 remained uninstalled and
unutilized resulting in the non-attainment
of the project objectives and wastage of
government resources.

Take the necessary remedial measures to


prevent the GMDSS equipment/facilities
from further deterioration and damage;
provide adequate security measures to
safeguard the equipment from thief; explore
all the possibilities on how to make use
of the equipment to other projects of the
agency to recover part of the cost invested
in the project, if there is no pending
arbitration filed.

Region 1
9.5.29 Don Mariano Marcos Memorial
State University (DMMMSU)
DMMMSU Pig Extension Research Farm
(DPERF) still posted a net loss of P5.37M
from its operation, thereby giving doubt to
its continued operation without budgetary
support from the National Government. For
the past nine years (2003-2011), DPERF
incurred a total net loss of P46,236,234.50
with annual net loss ranging from
P305,790.24 to P11,108,705.51. Further,
loan payable of P18M to National
Livelihood Support Fund (NLSF) had
incurred accumulated Interest Payables and
Penalties amounting to P47.7M and
P46.6M, respectively.

Exert more effort to maximize income and


minimize the expenses of the Farm with the
end view of reducing its losses or operating
without incurring any loss.

Region 2
9.5.30 Department of Agriculture (DA)
(a) Of the P463 million Malampaya Fund
received in CY 2008-2019, P74,817,784.91
was used for other purposes like projects
and allowances of employees.

Utilize the allotments solely for the purpose


specified unless there is an authorized
reprogramming by proper authority.

194

AUDIT OBSERVATIONS

RECOMMENDATIONS

(b) Obligation of fund transferred to


Cagayan Valley Lowland and Marine
Research Outreach Station (CVLMROS) or
Department of Agriculture Hillyland
Research Outreach Station (HILROS)
aggregating to P25,009,616 for LGU
incentives and payment of certified seeds
were not supported by an approved payroll/
contracts with no specific name of
creditors.

Explain why transaction should not be


disallowed in audit considering it is
irregular as defined in COA Circular No.
85-55A and violation of DBM Letter
Circular No. 2004-2.

(c) The fund and cash allocation intended


for
Organic
Agriculture Program
amounting
to
P2,611,000.00
was
transferred by DA Region to
the
Cagayan Breeding Station which was
disbursed/spent for purposes other than that
stated in the SARO.

Explain why transaction should not be


disallowed in audit considering it is
irregular as defined in COA Circular No.
85-55A and violation of DBM Letter
Circular No. 2004-2.

Region 5
9.5.31 Philippine National Police (PRO 5)
a. Strict compliance with COA Circular No.
94-013 dated December 13, 1994 and the
guidelines of PNP Memorandum Circular
No. 2011-002, dated January 17, 2011 to
ensure compliance to the said guidelines on
the transfer and utilization of PCSO-STL
Funds by PNP PRO 5.

Various
guidelines/
procedures/
responsibilities on the accounting and
preparation/submission of Program of
Expenditures (POE) and reports on the
receipt and utilization of PCSO Funds
remitted to PNP PRO5 for CY 2011
totaling P10,123,399.41 were not strictly
complied/adopted by
RHQ/PPOs/PS
pursuant to PNP Memorandum Circular
Nos. 2011-002
and 2011-004 dated
January 17, 2011 and February 10,2011,
respectively; hence, funds received/utilized
were
not
properly
recorded
and
disbursement vouchers together with the
supporting documents were not submitted
to the auditor. This hampered the timeliness
of audit/review of the STL transactions and
validation whether the funds received were
used for the intended purpose and in
accordance with the approved POE.

b. Review of specific guidelines under


Memo Circular No. 2011-002 particularly
IV.D on the preparation of the POE that
would be suitable and appropriate to the
existing situation on the receipt and
utilization of the PCSO-STL Funds. The
agency can prepare and approve the POE
after the receipt of funds but the
programmed POE shall be utilized on the
succeeding month for which the funds are
allocated; and VI.B.3 and VII.C.2 on the
final approval of the POE in the Provincial
Level/District Level;

195

AUDIT OBSERVATIONS

RECOMMENDATIONS
c. Require the Accountant to prepare and
submit the Report of Collections and
Disbursements
together
with
the
Disbursement Vouchers (DVs) and the
authenticated copy of deposit slips monthly,
pursuant to VI.A.4 of Memo Circular No.
2011-002, and also submit the DVs and
supporting documents for the expenses
incurred for the month of December 2011
on the PCSO-STL funds received by the
PNP PRO 5;
d.
Prepare
regularly
the
Bank
Reconciliation Statements for the PCSOSTL Fund under LBP CA No. 01321063-98 pursuant to the aforecited Memo
Circular; and
e. Require the submission of the
documents/DVs for the receipt and
utilization of the PCSO-STL funds for the
period January to June 2011 and for
the month of July 2011, if there was any.

REGION 6
9.5.32 Department of Interior and Local
Government (DILG)
The amount invested by the government in
its Emergency Network Philippines Project
(ENP) amounting to P100,138,592.69,
especially the DILG Patrol, is not
commensurate with the benefits so far
obtained.
9.5.33 Department
Technology (DOST)

of

Science

Coordinate with DILG Main Office as to


the Emergency Network Project since the
same has not been fully operational.

and

Implement strictly the provisions of the


MOA to ensure the proper implementation
of the project and identify alternative
courses of actions to address the problems
met, if any.

Non-compliance with the provisions of the


Memorandum of Agreement (MOA) such
as acquisition of not a brand new equipment
and failure to procure supplies, tools and
equipment within the scheduled period

196

AUDIT OBSERVATIONS

RECOMMENDATIONS

affected the effectiveness of the SET-UP


project amounting to P5,587,902.64.
9.5.34 Department of Science and
Technology (DOST)
Payback of SET-UP funds amounting to
P7,273,911.67 for the cost of equipment
and financial assistance to beneficiaries was
delayed.

Intensify the collection of refunds from


various SET-UP beneficiaries; present
provisions on penalty and default charges to
DOST-Central Office for reconsideration.

9.5.35 Department of Social Works and


Development (DSWD)
Core shelter units located at Barangay
Alimbo-Baybay, Nabas, Aklan remained
unfinished, incomplete, unoccupied while
in Belison, Antique, all 60 units were not
constructed. Amount of CSAP/Modified
Shelter Assistance Project is P56 million.

Supervise and monitor the proper


implementation of the project; demand
from the LGUs concerned compliance with
their obligations as stated in the MOA;
make accurate and reliable report on the
implementation of CSAP/Modified Shelter
Assistance Project; undertake regular ocular
inspection to ensure funds are utilized
according to the objectives of the program.

Out of the 43 shelter units programmed


under the Modified Shelter Assistance
Project costing P2,150,000.00 in Tigayon,
Kalibo, Aklan, 27 units were completed, 5
units remained unfinished, 2 units were not
constructed and 9 units were constructed in
other barangays contrary to DSWDs
submitted accomplishment report.
Region 7
9.5.36 Cebu Technological University
(CTU) Main Campus
(a) The contract for the construction of the
5-Storey Technology Building With roof
deck costing P45,805,005.08 at CTU Main
Campus was awarded to JO Builders who
cannot be considered an eligible bidder
since the companys Net Financial
Contracting Capacity (NFCC) did not meet
the requirement under Section 23.5.2.6 of
the Revised Implementing Rules and
Regulations (IRR) of RA 9184. Moreover,

Direct the Bids and Awards Committee


(BAC) to submit a written explanation for
the deviations from the Revised
Implementing Rules and Regulations (IRR)
of RA 9184. Henceforth, strict compliance
of the Revised IRR of RA 9184, the
Government Procurement Reform Act
should be made.

197

RECOMMENDATIONS

AUDIT OBSERVATIONS
JO Builders bid was not disqualified even
if the bid security presented was a company
check which is not a valid bid security
under Section 27.2 of the said IRR.
Therefore, the contract entered into by the
University with JO Builders cannot be
considered valid under RA 9184.
(b) The advance payment to the contractor
in the amount of P6,870,000.00 for the
construction of the 5-storey Technology
Building with roof deck was not supported
with an irrevocable standby letter of credit
of equivalent value from a commercial
bank nor a surety bond callable upon
demand which is a violation of Section 4.2,
Annex of the Revised IRR of RA No.
9184. Hence the University is not secured
in case of default by the contractor.

Require the contractor to submit an


irrevocable standby letter of credit from a
commercial bank or a surety bond callable
on demand equivalent to his outstanding
advance payment as recorded in the books
of accounts to protect the interests of the
government; require a thorough review of
the documents to support payment of any
transaction to prevent audit suspensions/
disallowances.

(c) Priority Development Assistance Fund


(PDAF) for scholarship totaling P3.75
million remained unutilized at year-end, a
situation which has deprived financially
needy but deserving students to avail of the
scholarship program financed by the
national government.

Instruct the Scholarship Office of the


University to closely coordinate with the
donor congressmen/ senators for the
requirements on their scholarship fund so
that these resources can be extended to
deserving students within the academic year
stated in the fund advice.

9.5.37 Applied Nutrition Council (ANC)


Submit the financial statements of the
Center to the ANC Board for their in-depth
review to determine the causes of the losses
incurred in the past two years and to
formulate the solutions thereof; direct the
Administrative Officer IV to prepare an
annual budget that shall contain an itemized
summary of estimated expenditures along
with the proposals for financing them,
effective CY 2013; the budget has to be
approved by the ANC Board.

The Center incurred a net loss of


P510,459.29 which may cause the closure
of the facility.

198

RECOMMENDATIONS

AUDIT OBSERVATIONS
9.5.38 Department of Public Works and
Highways (DPWH)- 3rd ED
Failure of management to thoroughly
review the detailed engineering, surveys,
designs and condition of the site on the
Rehabilitation of Progreso Cambaol
Cayacay - Napo Road with a contract cost
of P31,850,129.00 resulted in the delay in
the implementation of the project.

9.5.39 Provincial
Office (PARO)

Agrarian

The contractor and the implementing unit


concerned should resolve the issue of the
contract. Refund the amount of the excess
cash advance (mobilization) based on the
percentage of accomplishment, if any. The
Engineers concerned are enjoined to
exercise due care in the preparation and
review of the Program of Work and the
Approved Budget for the Contract, to
preclude errors on estimates of works to be
undertaken.

Reform
Stop the practice of utilizing the Agrarian
Reform Form/CARP Fund for regular
maintenance and operating expenses for
which appropriations are provided under
the General Fund, and instead use the same
in accordance with Executive Order No.
229 dated July 22, 1987. Furthermore,
make representations with DAR Central
Office for them to provide appropriations
for regular maintenance and operating
expenses under the General Fund (Fund
101).

Regular maintenance and other operating


expenses such as utilities, repairs, janitorial
and security services, construction materials
and labor, meals, sports uniforms and bar
review fee amounting to P6,625,941.51
were charged to the Agrarian Reform/
CARP Fund, contrary to Executive Order
No. 229 dated July 22, 1987, to the
prejudice of the Comprehensive Agrarian
Reform Program.

Region 8
9.5.40
Department
(Southern Leyte)

of

Education

Of the 14 school buildings


costing
P25,519,487.95 validated by the Team,
only 3 were completed while 11 were still
on-going construction with estimated
percentages of completion ranging from 20
percent to 90 percent as of December 31,
2011 in violation of the contract terms and

Intensify monitoring and supervision on the


strict implementation of projects in order to
comply with the timely completion of the
same and in order to answer the shortage of
classrooms.

199

RECOMMENDATIONS

AUDIT OBSERVATIONS
conditions, thus, thwarting the program of
government to address the shortage of
school buildings in the province.

9.5.41 Department of Education (RO8)


The implementation of the Department of
Education Food for School Programs in
CY 2 010-2011 in the selected schools in
Samar
provinces
amounting
to
P19,697,860.00 was not in accordance
with the guidelines set forth in COA Cir.
94-013 resulting to long delayed
liquidation from National Food Authority
(NFA) RO8.

Adhere to the Provision of COA Cir. No.


94-013 dated Dec. 13, 1994 particularly
Sections 4.3, 4.6, 4.8, 5.4 and 6.4 and item
no. 8 of the MOA between National Food
Authority and Department of Education
Regional Office.

9.5.42 Balicuatro College of Arts and


Trades (BCAT)
Tools and Equipment amounting to
P6,498,819.36 delivered in 2007 and 2008
by the Central Office intended for use of
Automotive Servicing program of the
agency remain unutilized due to nonreadiness of the trainor/non offering of the
course/no consultation at the assessment
centers level.
9.5.43 Department
Employment RO8

of

Labor

Ensure full utilization of the tools and


equipment delivered specifically for the
Automotive Servicing and extend its usage
to the community as an Income Generating
Project in order to generate additional
income to augment maintenance expenses
and enable the trainees to apply skills to
actual situation.

and

The efficiency in the utilization of program


funds and the effectiveness of addressing
the objectives of the programs cannot be
accurately gauged due to failure to optimize
the utilization of available program funds
amounting to P7,001,714.63.

Conduct a re-evaluation of the current


program strategies being implemented and
devise alternative measures to fully
achieved its goals and objectives and make
these more responsive in addressing the
needs of the program beneficiaries.

200

RECOMMENDATIONS

AUDIT OBSERVATIONS
9.5.44 Department of Public Works and
Highways (DPWH) 1st DEO
The absence of an Annual Procurement
Plan/Program for the regular repair and
maintenance of national roads and bridges
and making as basis the amount of Agency
Budget Matrix (ABM)/Special Allotment
Release Orders (SAROs) in the Monthly
Cash Program (MCP) submitted to DBM
instead of the
actual
due and
demandable obligations, resulted in the
lapsing/reversion of unutilized and excess
Notice of Cash Allocation (NCA)/Notice of
Transfer of Allocation (NTA) in an
aggregate amount of P148,855,753.41, and
may open the possibility for the agency to
utilize the excess amount for purposes other
than the intended ones.

Prepare a procurement plan/program for the


repair and maintenance of national roads
and bridges and implement the same on
schedule taking into consideration the
annual budget released to them by the
DPWH Central Office in order to fully
maximize the utilization of the NTAs
received, thereby benefiting the riding
public of the full benefits of the amount
released.

Region 11
9.5.45 Department of Public Works and
Highways (DPWH) RO XI
(a) The agency could have made use of the
steel bollards, blinking lights and tower
lights, amounting to P2,922,275.00,
P302,032.00 and P514,976.00, respectively
or totaling P3,739,283.00, had the turnover
of the items been required of the contractor
after the conduct of inventory upon
completion of the current project, thus,
making possible the generation of savings
from incoming projects.

Strictly require the contractor to make an


inventory of the steel bollards and blinking
lights and have it turned over upon
completion of the projects to the Office to
be utilized in future projects and to reduce
project cost.

(b) An asset originally recorded without


title under Land Account (201) valued at
P39,039,593.50 was reclassified into
Construction In Progress (266) even
without any identified projects and
documents to support the reclassification
made, thereby, casting doubts on the
existence, reliability and propriety of the
asset account.

Exert more effort in the retrieval of


documents to support the reclassification of
the land account to Construction In
Progress Account. Coordination with the
Land Registration Authority should be
made to determine the designated owner of
the land as indicated in the official records .

201

AUDIT OBSERVATIONS

RECOMMENDATIONS

9.5.46 Center for Health Development


(CHD)
(a) The CHD failed to recover the seed
capital in the form of drugs and medicines
amounting to P2,206,287.40 distributed to
100 Botika ng Barangay (BnB) outlets that
closed operations.

Send demand letters to the Botika ng


Barangay (BnB) operators, copy furnished
the Barangay Captains and the Municipal
Mayors, for the recovery of the initial seed
capital of closed BnBs; institute legal
sanctions against operators of the closed
BnB outlets.
Explain and justify the inability to enforce
the licensing requirements from operators.
BnB operators who did not comply with the
documentary requirements within the
deadline shall be required to return the seed
capital and immediately pay the equivalent
amount of the unaccounted items.

(b) Numerous BnB outlets were allowed to


operate and were given seed capital in the
amount of P2,794,917.75 in the form of
drugs and medicines pending approval of
their licenses.

9.5.47 DPWH Compostela Valley


Follow the procedures provided in COA
Circular No. 97-001 on the dropping of
dormant account and reverting the entry
made.

Dormant balance of Guaranty Deposits


Payable for more than ten years amounting
to P5,053,096.71 was dropped from the
books without the required authority from
COA.

9.5.48 DPWH-Davao
Engineering Office

City

District
Establish property ownership by the
government
before
implementing
infrastructure projects; see to it that releases
of funds are spent for public purposes.

Implementation of project for the


Construction/Rehabilitation of MPB for
Package 1-D, a) Construction of MPB,
Bago Aplaya and b) Rehab of MPB Ma-a,
Davao City amounting to P1,940,895.84
was found irregular because beneficiaries
of the said projects were cooperatives and
private corporation in violation Section 4(2)
of PD 1445.

202

RECOMMENDATIONS

AUDIT OBSERVATIONS
9.5.49 Provincial Environment and
Natural Resources Office (PENRO),
Davao del Sur
The swapping of the office building
between Provincial Environment and
Natural Resources Office (PENRO)
located at Mabini Superhighway, Barangay
Aplaya and City Environment and Natural
Rresources Office (CENRO) located in
Barangay Matti, all in Digos City through a
regional directive had grossly undermined
the purpose and intent of PD No. 740 dated
Nov. 26, 2004. Furthermore, it caused the
agency to incur capital investment for the
repair and rehabilitation of office building
in the amount of P2,371,965.84 on a lot not
owned by the agency in violation of
existing laws, rules and regulations.

Re-visit Proclamation No. 740 dated


November 26, 2004, Provincial Board
Resolution no. 137 dated July 23, 1970 and
make representation with the Regional
Executive Director (RED), Department of
Environment and Natural Resources,
Regional Office XI to revert the Provincial
Environment and Natural Resources Office
(PENRO) and City Environment and
Natural Resources Office (CENRO) to
their original locations; if the Regional
Executive Director insisted in his decision,
then facilitate the approval from the Office
of the President on the transfer of involved
offices so as to legitimize such transfer.

Region 12
9.5.50 Commission on Higher Education
(CHED), RO XII
Strengthen the monitoring system of the
scholarship programs; require the Higher
Education Institutions to comply strictly
with applicable guidelines on scholarship
programs set by the Commission on Higher
Education (CHED); and incorporate in the
Memorandum of Agreements of the CHED
Regional Offices and in the CHED
policy/guidelines the related provisions of
COA Circular Nos. 94-013 and 2007-001
including sanctions for non-compliance to
ensure the efficient and effective
implementation of the program.

Deficiencies
in the Memorandum of
Agreement of CHED Regional Office 12
with Higher Education Institutions (HEIs)
and poor monitoring
of the Student
Assistance Fund for Education (SAFE)
loan/scholarship and Student Financial
Assistance Program (STUFAP) program
implementation
resulted in the nonsubmission of reports/ status of fund
utilization which serves as liquidation
reports on transferred funds to various
HEIs,
thus,
receivables
totaling
P41,729,000.00 remain unliquidated in the
books.

203

RECOMMENDATIONS

AUDIT OBSERVATIONS
9.5.51 Department of Environment and
Natural Resources (RO 12)
Peoples Organizations (POs) contracted to
produce seedlings procured from outside
sources, defeating the purpose of the
National Greening Program (NGP) and
depriving them of immediate employment
and income that could have been derived
from said activities.

Encourage POs to produce seedlings


through the establishment and maintenance
of nurseries as the NGP would require
additional seedlings for the next five years.
These nurseries should be strictly
monitored as to seedling quality and
quantity. A team from the Regional Office
should be created to validate the status of
these seedlings as reported in the
accomplishment reports of the Provincial
Environment and Natural Resources
Offices (PENROs)/City Environment and
Natural Resources Offices (CENROs).

204