IMPORTANCE OF BUDGETS

INSTRUMENT FOR DEVELOPMENT

Political Tool
Socio Economic tool
Human Development tool
IMPORTANCE OF BUDGETS

INSTRUMENT FOR GOOD GOVERNANCE

Administrative tool
Performance measurement tool
Government budgeting
The critical exercise of allocating revenues and borrowed
funds to attain the economic and social goals of the country.
Why is it important?
Government budgeting is important because it enables the
government to plan and manage its financial resources to
support the implementation of various programs and
projects that best promote the development of the country.
Through the budget, the government can prioritize and put
into action its plans, programs and policies within the
constraints of its financial capability as dictated by economic
conditions.
The Philippine Budget Process
4 stage Budget Cycle
Generally consistent with international standards and
practice in democracies
Designed in accordance with law
Development Budget Coordinating Committee (DBCC) as
highest cabinet-level fiscal policy maker
The Budget Cycle
Budget Policy Formulation

Performance/
Monitoring and
Evaluation of
Programs

Implementation of approval of policies

Programs and Projects and priorities;
budget allocation
Determination of
Macroenomic
targets
and formulation of
Budget Strategy by
the Development
Budget
Coordinating
Committee (DBCC)
An inter-agency body composed of the
- Chairman: DBM Secretary
- Members: Bangko Sentral Governor
Secretary of the Department of Finance
NEDA Director General
Office of the President Representative
Major activities involved
Budget Call
Preparation of Budget proposals by agencies
Review of Budget Proposals
Technical Budget Hearings
Executive Review
DBCC Review
Presentation to the Cabinet and President
Submittal of the Proposed Budget to Congress
Preparation: Decisions Points
Fiscal Policy: balanced surplus or deficit spending
New Revenue Measures
Borrowing Strategy
Expenditures levels
Allocation of expenitures
New spending programs/termination of ineffective or completed programs
Recruitment
Upgrading of benefits
New programs/projects
Decision-Enhancing Governance
Factors
Adherence to development plan; fiscal plan
Announcement of priority measures
Consultation with stakeholders
Results-based budgeting
Performance based expenditure costing
How does the budget
become a law?
Through
Congressional
Approval
Budget Legislation

ACTIVITIES LIMITATIONS
- First reading and endorsement to the House Congress cannot increase appropriations
Committee on Appropriations proposed by the President, but may reduce
- Review by Committee on Appropriations it (Section 25 (1), Article VI)
- * Committee Proper
- * Subcommittee When Congress fails to pass the GAA, the
- Preparation of Committee report and draft General GAA of the immediately preceding year shall
Appropriations Bill take effect (Reenacted budget)
- Second Reading
- Plenary Debate
- Approval on Third Reading
Budget Legislation

ACTIVITIES LIMITATIONS
- First reading and endorsement to the House Special appropriations bill must be
Committee on Appropriations supported by new revenue measures or
- Review by Committee on Finance excess revenues
- * Committee Proper
- * Subcommittee
- Preparation of Committee report and proposed
amendments
- Second Reading
- Plenary Debate
- Approval on Third Reading
Budget Legislation

BICAMERAL CONFERENCE COMMITTEE

- Discussion of disagreeing provisions of the appropriations bill
- Preparation of Committee Report and Approval of amended General Appropriations
Bill
- Senate ratifies the Bicameral Committee Report and GAB
- HoR finalizes GAB; submits to the President
 The General Appropriations Act (GAA) is the legislative authorization
that contains the new appropriations in terms of specific amounts for
salaries, wages and other personnel benefits; maintenance and other
operating expenses; and capital outlays authorized to be spent for the
implementation of various programs/projects and activities of all
departments, bureaus and offices of the government for a given year.
Legislation: Key Decisions
New revenue measures
Allocation of expenditures
New spending program/termination of programs
Expenditure levels
Timing of GAA
Legislation: Decision Enhancing
Governance Factors
Policy-based budget debate
Consultation with stakeholders
Performance-based costing
Results-based budget
Money is not automatically
available
Budget Execution and Control
Preparation of Approved Budget Program
Preparation of Quarterly Programs
Allotment Program
Cash Program
Work and Financial Plans of Agencies
Fund Release
Agency Budget Matrix
Special Allotment Release Order (SARO)
Notice of Cash Allotment
Why are adjustments made on the Budget
Program?
Enactment of Laws
New revenue sources
Adjustments in macroeconomic parameters
Exchange rates
Change in resources availabilities
Grants
Accountability
- Review of accounting, financial and accomplishment reports
- Conduct of Agency Performance review
- Annual Reports
- Audit of Financial Statements
- Monitoring Reports
Tapos na mga bes!