The Philippine Budget Process

NATIONAL GOVERNMENT BUDGET CYCLE

4 Phases
1.  Budget Preparation
2.  Budget Legislation
3.  Budget Execution
4.  Budget Accountability

Budget Balance:
Expenditure = Revenue

Budget Preparation (7 months, from Dec and should be done within 30 days from the opening of regular session of Congress)

• Budget Call (December of 2 years prior to execution) - different agencies in the government need to prepare the respective budget in accordance with the Approved Budget Ceiling determined by Development Budget Coordinating Committee.  The DBCC is composed of DBM (in-charge with resource allocation and management), DOF (in-charge with revenue generation and debt management), NEDA (in-charge with overall macroeconomic policy), and OP (in-charge with Presidential oversight)

• Consultation with Civil Society Organizations (January to February). Objective: Firm up and fit budget proposal

• Citizen Consultations (February to April)

• Program Budgeting

• Agency Proposal

• Technical Budget Hearing (May-June)

• Presentation of the budget proposal to the President for refinement and reprioritization (June)

• DBM's Finalization of Budget Documents (June)

• Submission of the Approved National Budget to Congress (July, after SONA)

Budget Legislation

• The legislative body tackles the "President's budget" and agencies justify the proposed programs and projects.

• The Appropriations Committee and Sub-committee hearings on the budget of the department and agencies. The aim of this process is to scrutinize their respective programs and projects and to craft the General Appropriations Bill. GAB is approved on the second and third reading just like the other laws. (August to November)

• Senate Finance and sub-committees deliberate and amend GAB.

• Bicameral Conference Committee discuss and harmonize the conflicting provisions of the House and Senate versions of the GAB.

• The harmonized or bicam version is submitted to both houses which will then vote to ratify the final GAB for submission to the President.

• The President and the DBM review and ratify the GAB and prepare Veto Message.

• The President signs the General Appropriations Act (GAA).  This is the legislative authorization that contains all the annual expenditure programs of the national government agencies and all its instrumentalities. 

• GAA should be enacted before the fiscal starts otherwise, the previous year's GAA is automatically reenacted.

Budget Execution

• Release and usage of fund of the approved programs, projects and activities as stated in GAA.

• If there is projected budget deficit, the government must undertake domestic and foreign  loans.

• Early bidding is implemented even before the GAA is passed (August-December prior to the fiscal year).  This will enable the agencies to award their projects as early as day 1 of the fiscal year.  The projects can already be implemented in January.

• The agencies are required to submit their adjusted Budget Execution Documents (BEDs) based on GAA.  These documents include the Physical and Financial Plan, Monthly Cash Program MCP, estimated monthly income and the list of obligations that are not yet due and demandable.  Initial submission of BEDs and MCP was done December previous fiscal year based on NEP.

• Agencies assume obligations and responsibilities in form of contracts for the suppliers or contractors that will commit to deliver the goods and services for the implementation of programs or projects.

Budget Accountability

• From the prepared BEDs in the budget execution phase, DBM requires the submission of Budget Accountability Reports (BARs), monthly or quarterly basis.  BARs show how agencies use their funds and identify their corresponding physical accomplishments and performance targets were met.  

• DBM uses COA's audit report in confirming agency's performance, determining budget level for the agency, and addressing issues in fund usage.

• In case of non-compliance, disciplinary action will be undertaken.

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