TITLE I Constitutional Commissions

SUBTITLE A Civil Service Commission

CHAPTER 1 General Provisions

SECTION 1. Declaration of Policy. — The State shall insure and promote the Constitutional mandate that appointments in the Civil Service shall be made only according to merit and fitness; that the Civil Service Commission, as the central personnel agency of the Government shall establish a career service, adopt measures to promote morale, efficiency, integrity, responsiveness, and courtesy in the civil service, strengthen the merit and rewards system, integrate all human resources development programs for all levels and ranks, and institutionalize a management climate conducive to public accountability; that public office is a public trust and public officers and employees must at all times be accountable to the people; and that personnel functions shall be decentralized, delegating the corresponding authority to the departments, offices and agencies where such functions can be effectively performed.

SECTION 2. Duties and Responsibilities of Public Officers and Employees. — Public Officers and employees shall have the duties, responsibilities, and accountability provided in Chapter 9, Book I of this Code.

SECTION 3. Terms and Conditions of Employment. — The terms and conditions of employment of all government employees, including those in government-owned or controlled corporations with original charters, shall be fixed by law. The terms and conditions of employment which are not fixed by law may be the subject of negotiation between duly recognized employees' organizations and appropriate government authorities.

SECTION 4. Compensation. — The Congress shall provide for the standardization of compensation of government officials and employees including those in government-owned or controlled corporations with original charters, taking into account the nature of the responsibilities pertaining to, and the qualifications required for the position concerned.

SECTION 5. Definitions of Terms. — As used in this title, the following shall be construed thus:

(1) Agency means any bureau, office, commission, administration, board, committee, institute, corporation with original charter, whether performing governmental or proprietary function, or any other unit of the National Government, as well as provincial, city, or municipal government, except as hereinafter otherwise provided.

(2) Appointing officer is the person or body authorized by law to make appointments in the Philippine Civil Service.

(3) Class includes all positions in the government service that are sufficiently similar as to duties and responsibilities and require similar qualifications that can be given the same title and salary and for all administrative and compensation purposes, be treated alike.

(4) Commission refers to the Civil Service Commission.

(5) Chairman refers to the Chairman of the Commission.

(6) Commissioner refers to either of the two other members of the Commission.

(7) Department includes any of the executive departments or entities having the category of a department including the judiciary, Commission on Elections and Commission on Audit.

(8) Eligible refers to a person who obtains a passing grade in a civil service examination or is granted a civil service eligibility and whose name is entered in the register of eligibles.

(9) Examination refers to a civil service examination conducted by the Commission and its regional offices or by other departments or agencies with the assistance of the Commission, or in coordination or jointly with it, and those that it may delegate to departments and agencies pursuant to this Title, or those that may have been delegated by law.

(10) Form refers to those prescribed by the Civil Service Commission.

CHAPTER 2 Coverage of the Civil Service

SECTION 6. Scope of the Civil Service. — (1) The Civil Service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charters.

(2) Positions in the Civil Service shall be classified into career service and non-career service.

SECTION 7. Career Service. — The Career Service shall be characterized by (1) entrance based on merit and fitness to be determined as far as practicable by competitive examination, or based on highly technical qualifications; (2) opportunity for advancement to higher career positions; and (3) security of tenure.

The Career Service shall include:

(1) Open Career positions for appointment to which prior qualification in an appropriate examination is required;

(2) Closed Career positions which are scientific, or highly technical in nature; these include the faculty and academic staff of state colleges and universities, and scientific and technical positions in scientific or research institutions which shall establish and maintain their own merit systems;

(3) Positions in the Career Executive Service; namely, Undersecretary, Assistant Secretary, Bureau Director, Assistant Bureau Director, Regional Director, Assistant Regional Director, Chief of Department Service and other officers of equivalent rank as may be identified by the Career Executive Service Board, all of whom are appointed by the President;

(4) Career officers, other than those in the Career Executive Service, who are appointed by the President, such as the Foreign Service Officers in the Department of Foreign Affairs;

(5) Commissioned officers and enlisted men of the Armed Forces which shall maintain a separate merit system;

(6) Personnel of government-owned or controlled corporations, whether performing governmental or proprietary functions, who do not fall under the non-career service; and

(7) Permanent laborers, whether skilled, semi-skilled, or unskilled.

SECTION 8. Classes of Positions in the Career Service. — (1) Classes of positions in the career service appointment to which requires examinations shall be grouped into three major levels as follows:

(a) The first level shall include clerical, trades, crafts, and custodial service positions which involve non-professional or subprofessional work in a non-supervisory or supervisory capacity requiring less than four years of collegiate studies;

(b) The second level shall include professional, technical, and scientific positions which involve professional, technical, or scientific work in a non-supervisory or supervisory capacity requiring at least four years of college work up to Division Chief level; and

(c) The third level shall cover positions in the Career Executive Service.

(2) Except as herein otherwise provided, entrance to the first two levels shall be through competitive examinations, which shall be open to those inside and outside the service who meet the minimum qualification requirements. Entrance to a higher level does not require previous qualification in the lower level. Entrance to the third level shall be prescribed by the Career Executive Service Board.

(3) Within the same level, no civil service examination shall be required for promotion to a higher position in one or more related occupational groups. A candidate for promotion should, however, have previously passed the examination for that level.

SECTION 9. Non-Career Service. — The Non-Career Service shall be characterized by (1) entrance on bases other than those of the usual tests of merit and fitness utilized for the career service; and (2) tenure which is limited to a period specified by law, or which is coterminous with that of the appointing authority or subject to his pleasure, or which is limited to the duration of a particular project for which purpose employment was made.

The Non-Career Service shall include:

(1) Elective officials and their personal or confidential staff;

(2) Secretaries and other officials of Cabinet rank who hold their positions at the pleasure of the President and their personal or confidential staff(s);

(3) Chairman and members of commissions and boards with fixed terms of office and their personal or confidential staff;

(4) Contractual personnel or those whose employment in the government is in accordance with a special contract to undertake a specific work or job, requiring special or technical skills not available in the employing agency, to be accomplished within a specific period, which in no case shall exceed one year, and performs or accomplishes the specific work or job, under his own responsibility with a minimum of direction and supervision from the hiring agency; and

(5) Emergency and seasonal personnel.

CHAPTER 3 Organization and Functions of the Civil Service Commission

SECTION 10. Composition. — The Commission shall be composed of a Chairman and two Commissioners who shall be natural born citizens of the Philippines and, at the time of their appointment, at least thirty-five years of age, with proven capacity for public administration, and must not have been candidates for any elective position in the elections immediately preceding their appointment.

SECTION 11. Appointment of Chairman and Commissioners. — The Chairman and the Commissioners shall be appointed by the President with the consent of the Commission on Appointments for a term of seven years without reappointment. Of the first appointed, the Chairman shall hold office for seven years, a Commissioner for five years, and another Commissioner for three years, without reappointment. Appointment to any vacancy shall be only for the unexpired term of the predecessor. In no case shall any Member be appointed or designated in a temporary or acting capacity.

SECTION 12. Powers and Functions. — The Commission shall have the following powers and functions:

(1) Administer and enforce the constitutional and statutory provisions on the merit system for all levels and ranks in the Civil Service;

(2) Prescribe amend and enforce rules and regulations for carrying into effect the provisions of the Civil Service Law and other pertinent laws;

(3) Promulgate policies, standards and guidelines for the Civil Service and adopt plans and programs to promote economical, efficient and effective personnel administration in the government;

(4) Formulate policies and regulations for the administration, maintenance and implementation of position classification and compensation and set standards for the establishment, allocation and reallocation of pay scales, classes and positions;

(5) Render opinion and rulings on all personnel and other Civil Service matters which shall be binding on all heads of departments, offices and agencies and which may be brought to the Supreme Court on certiorari;

(6) Appoint and discipline its officials and employees in accordance with law and exercise control and supervision over the activities of the Commission;

(7) Control, supervise and coordinate Civil Service examinations. Any entity or official in government may be called upon by the Commission to assist in the preparation and conduct of said examinations including security, use of buildings and facilities as well as personnel and transportation of examination materials which shall be exempt from inspection regulations;

(8) Prescribe all forms for Civil Service examinations, appointments, reports and such other forms as may be required by law, rules and regulations;

(9) Declare positions in the Civil Service as may properly be primarily confidential, highly technical or policy determining;

(10) Formulate, administer and evaluate programs relative to the development and retention of qualified and competent workforce in the public service;

(11) Hear and decide administrative cases instituted by or brought before it directly or on appeal, including contested appointments, and review decisions and actions of its offices and of the agencies attached to it. Officials and employees who fail to comply with such decisions, orders, or rulings shall be liable for contempt of the Commission. Its decisions, orders, or rulings shall be final and executory. Such decisions, orders, or rulings may be brought to the Supreme Court on certiorari by the aggrieved party within thirty (30) days from receipt of a copy thereof;

(12) Issue subpoena and subpoena duces tecum for the production of documents and records pertinent to investigations and inquiries conducted by it in accordance with its authority conferred by the Constitution and pertinent laws;

(13) Advise the President on all matters involving personnel management in the government service and submit to the President an annual report on the personnel programs;

(14) Take appropriate action on all appointments and other personnel matters in the Civil Service including extension of Service beyond retirement age;

(15) Inspect and audit the personnel actions and programs of the departments, agencies, bureaus, offices, local government units and other instrumentalities of the government including government-owned or controlled corporations; conduct periodic review of the decisions and actions of offices or officials to whom authority has been delegated by the Commission as well as the conduct of the officials and the employees in these offices and apply appropriate sanctions whenever necessary;

(16) Delegate authority for the performance of any function to departments, agencies and offices where such function may be effectively performed;

(17) Administer the retirement program for government officials and employees, and accredit government services and evaluate qualifications for retirement;

(18) Keep and maintain personnel records of all officials and employees in the Civil Service; and

(19) Perform all functions properly belonging to a central personnel agency and such other functions as may be provided by law.

SECTION 13. Duties and Responsibilities of the Chairman. — Subject to policies and rules adopted by the Commission, the Chairman shall:

(1) Direct all operations of the Commission;

(2) Establish procedures for the effective operations of the Commission;

(3) Transmit to the President rules and regulations, and other guidelines adopted by the Chairman which require Presidential attention including annual and other periodic reports;

(4) Issue appointments to, and enforce decisions on administrative discipline involving officials and employees of the Commission;

(5) Delegate authority for the performance of any function to officials and employees of the Commission;

(6) Approve and submit the annual and supplemental budget of the Commission; and

(7) Perform such other functions as may be provided by law.

SECTION 14. Membership of the Chairman in Boards. — The Chairman shall be a member of the Board of Directors or of other governing bodies of government entities whose functions affect the career development, employment status, rights, privileges, and welfare of government officials and employees, such as the Government Service Insurance System, Foreign Service Board, Foreign Trade Service Board, National Board for Teachers, and such other similar boards as may be created by law.

SECTION 15. Duties and Responsibilities of the Members of the Commission. — Jointly with the Chairman, the two (2) Commissioners shall be responsible for the effective exercise of the rule-making and adjudicative functions of the Commission. They shall likewise perform such functions as may be delegated by the Commission. In case of the absence of the Chairman owing to illness or other cause, the senior member shall perform the functions of the Chairman.

SECTION 16. Offices in the Commission. — The Commission shall have the following offices:

(1) The Office of the Executive Director headed by an Executive Director, with a Deputy Executive Director shall implement policies, standards, rules and regulations promulgated by the Commission; coordinate the programs of the offices of the Commission and render periodic reports on their operations, and perform such other functions as may be assigned by the Commission.

(2) The Merit System Protection Board composed of a Chairman and two (2) members shall have the following functions:

(a) Hear and decide on appeal administrative cases involving officials and employees of the Civil Service. Its decision shall be final except those involving dismissal or separation from the service which may be appealed to the Commission;

(b) Hear and decide cases brought before it on appeal by officials and employees who feel aggrieved by the determination of appointing authorities involving personnel actions and violations of the merit system. The decision of the Board shall be final except those involving division chiefs or officials of higher ranks which may be appealed to the Commission;

(c) Directly take cognizance of complaints affecting functions of the Commission, those which are unacted upon by the agencies, and such other complaints which require direct action of the Board in the interest of justice;

(d) Administer oaths, issue subpoena and subpoena duces tecum, take testimony in any investigation or inquiry, punish for contempt in accordance with the same procedures and penalties prescribed in the Rules of Court; and

(e) Promulgate rules and regulations to carry out the functions of the Board subject to the approval of the Commission.

(3) The Office of Legal Affairs shall provide the Chairman with legal advice and assistance; render counselling services; undertake legal studies and researches; prepare opinions and rulings in the interpretation and application of the Civil Service law, rules and regulations; prosecute violations of such laws, rules and regulations; and represent the Commission before any Court or tribunal.

(4) The Office of Planning and Management shall formulate development plans, programs and projects; undertake research and studies on the different aspects of public personnel management; administer management improvement programs; and provide fiscal and budgetary services.

(5) The Central Administrative Office shall provide the Commission with personnel, financial, logistics and other basic support services.

(6) The Office of Central Personnel Records shall formulate and implement policies, standards, rules and regulations pertaining to personnel records maintenance, security, control and disposal; provide storage and extension services; and provide and maintain library services.

(7) The Office of Position Classification and Compensation shall formulate and implement policies, standards, rules and regulations relative to the administration of position classification and compensation.

(8) The Office of Recruitment, Examination and Placement shall provide leadership and assistance in developing and implementing the overall Commission programs relating to recruitment, examination and placement, and formulate policies, standards, rules and regulations for the proper implementation of the Commission's examination and placement programs.

(9) The Office of Career Systems and Standards shall provide leadership and assistance in the formulation and evaluation of personnel systems and standards relative to performance appraisal, merit promotion, and employee incentive benefits and awards.

(10) The Office of Human Resource Development shall provide leadership and assistance in the development and retention of qualified and efficient work force in the Civil Service; formulate standards for training and staff development; administer service-wide scholarship programs; develop training literature and materials; coordinate and integrate all training activities and evaluate training programs.

(11) The Office of Personnel Inspection and Audit shall develop policies, standards, rules and regulations for the effective conduct or inspection and audit of personnel and personnel management programs and the exercise of delegated authority; provide technical and advisory services to Civil Service Regional Offices and government agencies in the implementation of their personnel programs and evaluation systems.

(12) The Office of Personnel Relations shall provide leadership and assistance in the development and implementation of policies, standards, rules and regulations in the accreditation of employee associations or organizations and in the adjustment and settlement of employee grievances and management-employee disputes.

(13) The Office of Corporate Affairs shall formulate and implement policies, standards, rules and regulations governing corporate officials and employees in the areas of recruitment, examination, placement, career development, merit and awards systems, position classification and compensation, performing appraisal, employee welfare and benefits, discipline and other aspects of personnel management on the basis of comparable industry practices.

(14) The Office of Retirement Administration shall be responsible for the enforcement of the constitutional and statutory provisions, relative to retirement and the regulation for the effective implementation of the retirement of government officials and employees.

(15) The Regional and Field Offices. — The Commission shall have not less than thirteen (13) Regional offices each to be headed by a Director, and such field offices as may be needed, each to be headed by an official with at least the rank of an Assistant Director. Each Regional Office shall have the following functions:

(a) Enforce Civil Service law and rules, policies, standards on personnel management within their respective jurisdiction;

(b) Provide technical advice and assistance to government offices and agencies regarding personnel administration; and

(c) Perform such other functions as may be delegated by the Commission.

SECTION 17. Organizational Structure. — Each office of the Commission shall be headed by a Director with at least one (1) Assistant Director, and may have such divisions as are necessary to carry out their respective functions. As an independent constitutional body, the Commission may effect changes in the organization as the need arises.

CHAPTER 4 Interdepartment Relations

SECTION 18. Civil Service Assistance to Departments and Agencies. — Each Secretary or head of office, agency, government-owned or controlled corporation with original charter and local government shall be responsible for personnel administration in his office which shall be in accordance with the provision relating to civil service embodied in the Constitution, this Title and the rules, principles, standards, guidelines and regulations established by the Commission. The Civil Service Commission shall, whenever it deems it in the interest of the public service, organize in each department, office, agency, government-owned or controlled corporation, and provincial and city government a Civil Service Staff which shall be headed by an officer of the Commission. The necessary staff personnel and office facilities and equipment shall be provided by the department, government-owned or controlled corporation or local government where the staff is established but the Commission may augment these with its own. The staff shall serve as the principal liaison between the Civil Service and the Department concerned and shall perform the following specific functions and those functions which may hereafter be assigned to it by the Commission:

(1) Provide technical assistance in all aspects of personnel management;

(2) Monitor and audit periodically the personnel practices and performance of the Department or agency concerned as well as those of public officers and employees thereat;

(3) Determine agency compliance with Civil Service Law and rules; and

(4) In the performance of these functions, the staff shall welcome and receive from the public any suggestions, observations and complaints pertaining to the conduct of public officers and employees.

In the performance of their functions, the units so organized shall avail of the technical assistance and guidelines of the Civil Service Commission.

SECTION 19. Council of Personnel Officers. — There shall be a Council of Personnel Officers to be composed of chief personnel officers of the different executive departments and of agencies with the category of department that the Chairman of the Commission shall select for membership. Except for its Executive Officer who shall be designated by the Chairman from among the appropriate officials in the Civil Service Commission, the Council is authorized to elect such other officers from among its members and to fix its own rules or procedures concerning attendance at meetings, approval of policy declaration, and other business matters. Provisions for necessary facilities and clerical assistance for the Council shall be made in the annual budget of the Commission.

The Council shall have the following functions:

(1) Offer advice, upon request of the Secretary of a Department or the Commission, in developing constructive policies, standards, procedures, and programs as well as on matters relating to the improvement of personnel methods and to the solution of personnel problems confronting the various departments and agencies of the government;

(2) Promote among the departments and agencies, through study and discussion, uniform and consistent interpretation and application of personnel policies; and

(3) Serve as a clearing house of information and stimulate the use of methods of personnel management that will contribute most to good government.

SECTION 20. Inspection and Audit. — The Commission, through its designated representatives, shall conduct a periodic inspection and audit of the personnel management program of each department, agency, province or city, in order to: (a) determine compliance with the Civil Service law, rules and standards; (b) review discharge of delegated authority; (c) make an adequate evaluation of the progress made and problems encountered in the conduct of the merit system in the national and local governments; (d) give advice and provide assistance in developing constructive policies, standards and procedures, and (e) stimulate improvement in all areas of personnel management.

Periodic inspection and audit will include an appraisal of personnel management operations and activities relative to: (a) formulation and issuance of personnel policy; (b) recruitment and selection of employees; (c) personnel action and employment status; (d) career and employee development; (e) performance evaluation system; (f) employee suggestions and incentive award; (g) employee relations and services; (h) discipline; (i) personnel records and reporting; and (j) programs evaluation.

CHAPTER 5 Personnel Policies and Standards

SECTION 21. Recruitment and Selection of Employees. — (1) Opportunity for government employment shall be open to all qualified citizens and positive efforts shall be exerted to attract the best qualified to enter the service. Employees shall be selected on the basis of fitness to perform the duties and assume the responsibilities of the positions.

(2) When a vacancy occurs in a position in the first level of the Career Service as defined in Section 8, the employees in the department who occupy the next lower positions in the occupational group under which the vacant position is classified, and in other functionally related occupational groups and who are competent, qualified and with the appropriate civil service eligibility shall be considered for promotion.

(3) When a vacancy occurs in a position in the second level of the Career Service as defined in Section 8, the employees in the government service who occupy the next lower positions in the occupational group under which the vacant position is classified and in other functionally related occupational groups and who are competent, qualified and with the appropriate civil service eligibility shall be considered for promotion.

(4) For purposes of this Section, each department or agency shall evolve its own screening process, which may include tests of fitness, in accordance with standards and guidelines set by the Commission. Promotion boards shall be formed to formulate criteria for evaluation, conduct tests or interviews, and make systematic assessment of training experience.

(5) If the vacancy is not filled by promotion as provided herein the same shall be filled by transfer of present employees in the government service, by reinstatement, by re-employment of persons separated through reduction in force, or by appointment of persons with the civil service eligibility appropriate to the positions.

(6) A qualified next-in-rank employee shall have the right to appeal initially to the Secretaries or heads of agencies or instrumentalities including government-owned or controlled corporations with original charters, then to the Merit System Protection Board, and finally to the Civil Service Commission an appointment made in favor of another employee if the appellant is not satisfied with the written special reason or reasons given by the appointing authority for such appointment; Provided, however, that the decision of the Civil Service Commission may be reviewed on certiorari only by the Supreme Court within thirty (30) days from receipt of the decision of the aggrieved party. For purposes of this Section, "qualified next-in-rank" refers to an employee appointed on a permanent basis to a position previously determined to be next-in-rank and who meets the requirements for appointment thereto as previously determined by the appointing authority and approved by the Commission.

(7) Qualification in an appropriate examination shall be required for appointment to positions in the first and second levels in the career service in accordance with the Civil Service rules, except as otherwise provided in this Title: Provided, That whenever there is a civil service eligible actually available for appointment, no person who is not such an eligible shall be appointed even in a temporary capacity to any vacant position in the career service in the government or in any government-owned or controlled corporation with original charter, except when the immediate filling of the vacancy is urgently required in the public interest, or when the vacancy is not permanent, in which cases temporary appointments of non-eligibles may be made in the absence of eligibles actually and immediately available.

(8) The appropriate examinations herein referred to shall be those given by the Commission and the different agencies: Provided, however, That nothing herein shall affect those eligibilities acquired prior to the effectivity of the Civil Service Law: Provided, further, That a person with a civil service eligibility acquired by successfully passing an examination shall be qualified for a position requiring a lower eligibility if he possesses the other requirements for appointment to such position.

SECTION 22. Qualification Standards. — (1) A qualification standard expresses the minimum requirements for a class of positions in terms of education, training and experience, civil service eligibility, physical fitness, and other qualities required for successful performance. The degree of qualifications of an officer or employee shall be determined by the appointing authority on the basis of the qualification standard for the particular position.

Qualification standards shall be used as basis for civil service examinations for positions in the career service, as guides in appointment and other personnel actions, in the adjudication of protested appointments, in determining training needs, and as aid in the inspection and audit of the agencies' personnel work programs.

It shall be administered in such manner as to continually provide incentives to officers and employees towards professional growth and foster the career system in the government service.

(2) The establishment, administration and maintenance of qualification standards shall be the responsibility of the department or agency, with the assistance and approval of the Civil Service Commission and in consultation with the Wage and Position Classification Office.

SECTION 23. Release of Examination Results. — The results of any particular civil service examination held in a number of places on the same date shall be released simultaneously.

SECTION 24. Register of Eligibles. — The names of the competitors who pass an examination shall be entered in a register of eligibles arranged in the order of their general ratings and containing such information as the Commission may deem necessary.

SECTION 25. Cultural Communities. — In line with the national policy to facilitate the integration of the members of cultural communities and accelerate the development of the areas occupied by them, the Commission shall give special civil service examinations to qualify them for appointment in the civil service.

SECTION 26. Personnel Actions. — All appointments in the career service shall be made only according to merit and fitness, to be determined as far as practicable by competitive examinations. A non-eligible shall not be appointed to any position in the civil service whenever there is a civil service eligible actually available for and ready to accept appointment.

As used in this Title, any action denoting the movement or progress of personnel in the civil service shall be known as personnel action. Such action shall include appointment through certification, promotion, transfer, reinstatement, re-employment, detail, reassignment, demotion, and separation. All personnel actions shall be in accordance with such rules, standards, and regulations as may be promulgated by the Commission.

(1) Appointment through certification. — An appointment through certification to a position in the civil service, except as herein otherwise provided, shall be issued to a person who has been selected from a list of qualified persons certified by the Commission from an appropriate register of eligibles, and who meets all the other requirements of the position.

All such persons must serve a probationary period of six months following their original appointment and shall undergo a thorough character investigation in order to acquire permanent civil service status. A probationer may be dropped from the service for unsatisfactory conduct or want of capacity any time before the expiration of the probationary period: Provided, That such action is appealable to the Commission.

(2) Promotion. — A promotion is a movement from one position to another with an increase in duties and responsibilities as authorized by law and usually accompanied by an increase in pay. The movement may be from one department or agency to another or from one organizational unit to another in the same department or agency.

(3) Transfer. — A transfer is a movement from one position to another which is of equivalent rank, level, or salary without break in service involving the issuance of an appointment.

It shall not be considered disciplinary when made in the interest of public service, in which case, the employee concerned shall be informed of the reasons therefor. If the employee believes that there is no justification for the transfer, he may appeal his case to the Commission.

The transfer may be from one department or agency to another or from one organizational unit to another in the same department or agency:Provided, however, That any movement from the non-career service to the career service shall not be considered a transfer.

(4) Reinstatement. — Any person who has been permanently appointed to a position in the career service and who has, through no delinquency or misconduct, been separated therefrom, may be reinstated to a position in the same level for which he is qualified.

(5) Reemployment. — Names of persons who have been appointed permanently to positions in the career service and who have been separated as a result of reduction in force or reorganization, shall be entered in a list from which selection for reemployment shall be made.

(6) Detail. — A detail is the movement of an employee from one agency to another without the issuance of an appointment and shall be allowed, only for a limited period in the case of employees occupying professional, technical and scientific positions. If the employee believes that there is no justification for the detail, he may appeal his case to the Commission. Pending appeal, the decision to detail the employee shall be executory unless otherwise ordered by the Commission.

(7) Reassignment. — An employee may be reassigned from one organizational unit to another in the same agency: Provided, That such reassignment shall not involve a reduction in rank, status or salary.

SECTION 27. Employment Status. — Appointment in the career service shall be permanent or temporary.

(1) Permanent status. — A permanent appointment shall be issued to a person who meets all the requirements for the positions to which he is being appointed, including the appropriate eligibility prescribed, in accordance with the provisions of law, rules and standards promulgated in pursuance thereof.

(2) Temporary appointment. — In the absence of appropriate eligibles and it becomes necessary in the public interest to fill a vacancy, a temporary appointment shall be issued to a person who meets all the requirements for the position to which he is being appointed except the appropriate civil service eligibility: Provided, That such temporary appointment shall not exceed twelve months, but the appointee may be replaced sooner if a qualified civil service eligible becomes available.

SECTION 28. Salary Increase or Adjustment. — Adjustments in salaries as a result of increase in pay levels or upgrading of positions which do not involve a change in qualification requirements shall not require new appointments except that copies of the salary adjustment notices shall be submitted to the Commission for record purposes.

SECTION 29. Reduction in Force. — Whenever it becomes necessary because of lack of work or funds or due to a change in the scope or nature of an agency's program, or as a result of reorganization, to reduce the staff of any department or agency, those in the same group or class of positions in one or more agencies within the particular department or agency wherein the reduction is to be effected, shall be reasonably compared in terms of relative fitness, efficiency and length of service, and those found to be least qualified for the remaining positions shall be laid off.

SECTION 30. Career and Personnel Development. — The development and retention of a competent and efficient work force in the public service is a primary concern of government. It shall be the policy of the government that a continuing program of career and personnel development be established for all government employees at all levels. An integrated national plan for career and personnel development shall serve as the basis for all career and personnel development activities in the government.

SECTION 31. Career and Personnel Development Plans. — Each department or agency shall prepare a career and personnel development plan which shall be integrated into a national plan by the Commission. Such career and personnel development plans which shall include provisions on merit promotions, performance evaluation, in-service training, including overseas and local scholarships and training grants, job rotation, suggestions and incentive award systems, and such other provisions for employees' health, welfare, counseling, recreation and similar services.

SECTION 32. Merit Promotion Plans. — Each department or agency shall establish merit promotion plans which shall be administered in accordance with the provisions of the Civil Service law and the rules, regulations and standards to be promulgated by the Commission. Such plans shall include provisions for a definite screening process, which may include tests of fitness, in accordance with standards and guidelines set by the Commission. Promotion Boards may be organized subject to criteria drawn by the Commission.

SECTION 33. Performance Evaluation System. — There shall be established a performance evaluation system, which shall be administered in accordance with rules, regulations and standards, promulgated by the Commission for all officers and employees in the career service. Such performance evaluation system shall be administered in such manner as to continually foster the improvement of individual employee efficiency and organizational effectiveness.

Each department or agency may, after consultation with the Commission, establish and use one or more performance evaluation plans appropriate to the various groups of positions in the department or agency concerned. No performance evaluation shall be given, or used as a basis for personnel action, except under an approved performance evaluation plan: Provided, That each employee shall be informed periodically by his supervisor of his performance evaluation.

SECTION 34. Responsibility for Training. — The Commission shall be responsible for the coordination and integration of a continuing program of personnel development for all government personnel in the first and second levels.

Central staff agencies and specialized institutes shall conduct continuing centralized training for staff specialists from the different agencies. However, in those cases where there is sufficient number of participants to warrant training at department or agency or local government levels, such central staff agencies and specialized institutes shall render the necessary assistance, and consultative services.

To avoid duplication of effort and overlapping of training functions, the following functional responsibilities are assigned:

(1) Public and private colleges and universities and similar institutions shall be encouraged to organize and carry out continuing programs of executive development.

(2) The Commission, the Commission on Audit, the Department of Budget and Management, the General Services Administration, and other central staff agencies shall conduct centralized training and assist in the training program of the Departments or agencies along their respective functional areas of specialization.

(3) In coordination with the Commission, the Department of Local Government and Community Development shall undertake local government training programs.

(4) In coordination with the Commission, each department or agency, province or city shall establish, maintain and promote a systematic plan of action for personnel training at all levels in accordance with standards laid down by the Commission. It shall maintain appropriate training staffs and make full use of available training facilities.

Whenever it deems it necessary, the Commission shall take the initiative in undertaking programs for personnel development.

SECTION 35. Employee Suggestions and incentive Award System. — There shall be established a government-wide employee suggestions and incentive awards system which shall be administered under such rules, regulations, and standards as may be promulgated by the Commission.

In accordance with rules, regulations, and standards promulgated by the Commission, the President or the head of each department or agency is authorized to incur whatever necessary expenses involved in the honorary recognition of subordinate officers and employees of the government who by their suggestions, inventions, superior accomplishment, and other personal efforts contribute to the efficiency, economy, or other improvement of government operations, or who perform such other extraordinary acts or services in the public interest in connection with, or in relation to, their official employment.

SECTION 36. Personnel Relations. — (1) It shall be the concern of the Commission to provide leadership and assistance in developing employee relations programs in the department or agencies.

(2) Every Secretary or head of agency shall take all proper steps toward the creation of an atmosphere conducive to good supervisor-employee relations and the improvement of employee morale.

SECTION 37. Complaints and Grievances. — Employees shall have the right to present their complaints or grievances to management and have them adjudicated as expeditiously as possible in the best interest of the agency, the government as a whole, and the employee concerned. Such complaint or grievances shall be resolved at the lowest possible level in the department or agency, as the case may be, and the employee shall have the right to appeal such decision to higher authorities.

Each department or agency shall promulgate rules and regulations governing expeditious, fair and equitable adjustment of employees' complaints or grievances in accordance with the policies enunciated by the Commission.

In case any dispute remains unresolved after exhausting all the available remedies under existing laws and procedures, the parties may jointly refer the dispute to the Public Sector Labor Management Council constituted under section 46, for appropriate action.

CHAPTER 6 Right to Self-Organization

SECTION 38. Coverage. — (1) All government employees, including those in government-owned or controlled corporations with original charters, can form, join or assist employees' organizations of their own choosing for the furtherance and protection of their interests. They can also form, in conjunction with appropriate government authorities, labor-management committees, work councils and other forms of workers' participation schemes to achieve the same objectives.

(2) The provisions of this Chapter shall not apply to the members of the Armed Forces of the Philippines, including police officers, policemen, firemen and jail guards.

SECTION 39. Ineligibility of High-Level Employees to Join Rank-and-File Employees' Organization. — High-level employees whose functions are normally considered as policy-making or managerial or whose duties are of highly confidential nature shall not be eligible to join the organization of rank-and-file government employees.

SECTION 40. Protection of the Right to Organize. — (1) Government employees shall not be discriminated against in respect of their employment by reason of their membership in employees' organizations or participation in the normal activities of their organizations. Their employment shall not be subject to the condition that they shall not join or shall relinquish their membership in the employees' organizations.

(2) Government authorities shall not interfere in the establishment, functioning or administration of government employees' organizations through acts designed to place such organizations under the control of government authority.

SECTION 41. Registration of Employees' Organization. — Government employees' organizations shall register with the Civil Service Commission and the Department of Labor and Employment. The application shall be filed with the Bureau of Labor Relations of the Department which shall process the same in accordance with the provisions of the Labor Code of the Philippines. Applications may also be filed with the Regional Offices of the Department of Labor and Employment which shall immediately transmit the said applications to the Bureau of Labor Relations within three (3) days from receipt thereof.

SECTION 42. Certificate of Registration. — Upon approval of the application, a registration certificate shall be issued to the organization recognizing it as a legitimate employees' organization with the right to represent its members and undertake activities to further and defend its interests. The corresponding certificates of registration shall be jointly approved by the Chairman of the Civil Service Commission and the Secretary of Labor and Employment.

SECTION 43. Appropriate Organizational Unit. — The appropriate organizational unit shall be the employer's unit consisting of rank-and-file employees unless circumstances otherwise require.

SECTION 44. Sole and Exclusive Employees' Representatives. — (1) The duly registered employees' organization having the support of the majority of the employees in the appropriate organizational unit shall be designated as the sole and exclusive representative of the employees.

(2) A duly registered employees' organization shall be accorded voluntary recognition upon a showing that no other employees' organization is registered or is seeking registration, based on the records of the Bureau of Labor Relations, and that the said organization has the majority support of the rank-and-file employees in the organizational unit.

(3) Where there are two or more duly registered employees' organizations in the appropriate organizational unit, the Bureau of Labor Relations shall, upon petition, order the conduct of a certification election and shall certify the winner as the exclusive representative of the rank-and-file employees in said organizational unit.

SECTION 45. The Public Sector Labor-Management Council. — A Public Sector Labor-Management Council is hereby constituted to be composed of the following: The Chairman of the Civil Service Commission, as Chairman; the Secretary of Labor and Employment, as Vice-Chairman; and the Secretary of Finance, the Secretary of Justice and the Secretary of Budget and Management, as members.

The Council shall implement and administer the provisions of this Chapter. For this purpose, the Council shall promulgate the necessary rules and regulations to implement this Chapter.

CHAPTER 7 Discipline

SECTION 46. Discipline: General Provisions. — (a) No officer or employee in the Civil Service shall be suspended or dismissed except for cause as provided by law and after due process.

(b) The following shall be grounds for disciplinary action:

(1) Dishonesty;

(2) Oppression;

(3) Neglect of duty;

(4) Misconduct;

(5) Disgraceful and immoral conduct;

(6) Being notoriously undesirable;

(7) Discourtesy in the course of official duties;

(8) Inefficiency and incompetence in the performance of official duties;

(9) Receiving for personal use of a fee, gift or other valuable thing in the course of official duties or in connection therewith when such fee, gift, or other valuable thing is given by any person in the hope or expectation of receiving a favor or better treatment than that accorded other persons, or committing acts punishable under the anti-graft laws;

(10) Conviction of a crime involving moral turpitude;

(11) Improper or unauthorized solicitation of contributions from subordinate employees and by teachers or school officials from school children;

(12) Violation of existing Civil Service Law and rules or reasonable office regulations;

(13) Falsification of official document;

(14) Frequent unauthorized absences or tardiness in reporting for duty, loafing or frequent unauthorized absences from duty during regular office hours;

(15) Habitual drunkenness;

(16) Gambling prohibited by law;

(17) Refusal to perform official duty or render overtime service;

(18) Disgraceful, immoral or dishonest conduct prior to entering the service;

(19) Physical or mental incapacity or disability due to immoral or vicious habits;

(20) Borrowing money by superior officers from subordinates or lending by subordinates to superior officers;

(21) Lending money at usurious rates of interest;

(22) Willful failure to pay just debts or willful failure to pay taxes due to the government;

(23) Contracting loans of money or other property from persons with whom the office of the employee concerned has business relations;

(24) Pursuit of private business, vocation or profession without the permission required by Civil Service rules and regulations;

(25) Insubordination;

(26) Engaging directly or indirectly in partisan political activities by one holding a non-political office;

(27) Conduct prejudicial to the best interest of the service;

(28) Lobbying for personal interest or gain in legislative halls or offices without authority;

(29) Promoting the sale of tickets in behalf of private enterprises that are not intended for charitable or public welfare purposes and even in the latter cases if there is no prior authority;

(30) Nepotism as defined in Section 60 of this Title.

(c) Except when initiated by the disciplining authority, no complaint against a civil service official or employee shall be given due course unless the same is in writing and subscribed and sworn to by the complainant.

(d) In meting out punishment, the same penalties shall be imposed for similar offenses and only one penalty shall be imposed in each case. The disciplining authority may impose the penalty of removal from the service, demotion in rank, suspension for not more than one year without pay, fine in an amount not exceeding six months' salary, or reprimand.

SECTION 47. Disciplinary Jurisdiction. — (1) The Commission shall decide upon appeal all administrative disciplinary cases involving the imposition of a penalty of suspension for more than thirty days, or fine in an amount exceeding thirty days' salary, demotion in rank or salary or transfer, removal or dismissal from office. A complaint may be filed directly with the Commission by a private citizen against a government official or employee in which case it may hear and decide the case or it may deputize any department or agency or official or group of officials to conduct the investigation. The results of the investigation shall be submitted to the Commission with recommendation as to the penalty to be imposed or other action to be taken.

(2) The Secretaries and heads of agencies and instrumentalities, provinces, cities and municipalities shall have jurisdiction to investigate and decide matters involving disciplinary action against officers and employees under their jurisdiction. Their decisions shall be final in case the penalty imposed is suspension for not more than thirty days or fine in an amount not exceeding thirty days' salary. In case the decision rendered by a bureau or office head is appealable to the Commission, the same may be initially appealed to the department and finally to the Commission and pending appeal, the same shall be executory except when the penalty is removal, in which case the same shall be executory only after confirmation by the Secretary concerned.

(3) An investigation may be entrusted to regional director or similar officials who shall make the necessary report and recommendation to the chief of bureau or office or department within the period specified in Paragraph (4) of the following Section.

(4) An appeal shall not stop the decision from being executory, and in case the penalty is suspension or removal, the respondent shall be considered as having been under preventive suspension during the pendency of the appeal in the event he wins an appeal.

SECTION 48. Procedures in Administrative Cases Against Non-Presidential Appointees. — (1) Administrative proceedings may be commenced against a subordinate officer or employee by the Secretary or head of office of equivalent rank, or head of local government, or chiefs of agencies, or regional directors, or upon sworn, written complaint of any other person.

(2) In the case of a complaint filed by any other persons, the complainant shall submit sworn statements covering his testimony and those of his witnesses together with his documentary evidence. If on the basis of such papers a prima facie case is found not to exist, the disciplining authority shall dismiss the case. If a prima facie case exists, he shall notify the respondent in writing, of the charges against the latter, to which shall be attached copies of the complaint, sworn statements and other documents submitted, and the respondent shall be allowed not less than seventy-two hours after receipt of the complaint to answer the charges in writing under oath, together with supporting sworn statements and documents, in which he shall indicate whether or not he elects a formal investigation if his answer is not considered satisfactory. If the answer is found satisfactory, the disciplining authority shall dismiss the case.

(3) Although a respondent does not request a formal investigation, one shall nevertheless be conducted when from the allegations of the complaint and the answer of the respondent, including the supporting documents, the merits of the case cannot be decided judiciously without conducting such an investigation.

(4) The investigation shall be held not earlier than five days nor later than ten days from the date of receipt of respondent's answer by the disciplining authority, and shall be finished within thirty days from the filing of the charges, unless the period is extended by the Commission in meritorious cases. The decision shall be rendered by the disciplining authority within thirty days from the termination of the investigation or submission of the report of the investigator, which report shall be submitted within fifteen days from the conclusion of the investigation.

(5) The direct evidence for the complainant and the respondent shall consist of the sworn statement and documents submitted in support of the complaint or answer, as the case may be, without prejudice to the presentation of additional evidence deemed necessary but was unavailable at the time of the filing of the complaint or answer, upon which the cross-examination, by respondent and the complainant, respectively, shall be based. Following cross-examination, there may be redirect and recross-examination.

(6) Either party may avail himself of the services of counsel and may require the attendance of witnesses and the production of documentary evidence in his favor through the compulsory process of subpoena or subpoena duces tecum.

(7) The investigation shall be conducted only for the purpose of ascertaining the truth and without necessarily adhering to technical rules applicable in judicial proceedings. It shall be conducted by the disciplining authority concerned or his authorized representative.

The phrase "any other party" shall be understood to be a complainant other than those referred to in subsection (a) hereof.

SECTION 49. Appeals. — (1) Appeals, where allowable, shall be made by the party adversely affected by the decision within fifteen days from receipt of the decision unless a petition for reconsideration is seasonably filed, which petition shall be decided within fifteen days. Notice of the appeal shall be filed with the disciplining office, which shall forward the records of the case, together with the notice of appeal, to the appellate authority within fifteen days from filing of the notice of appeal, with its comment, if any. The notice of appeal shall specifically state the date of the decision appealed from and the date of receipt thereof. It shall also specifically set forth clearly the grounds relied upon for excepting from the decision.

(2) A petition for reconsideration shall be based only on any of the following grounds: (a) new evidence has been discovered which materially affects the decision rendered; (b) the decision is not supported by the evidence on record; or (c) errors of law or irregularities have been committed which are prejudicial to the interest of the respondent: Provided, That only one petition for reconsideration shall be entertained.

SECTION 50. Summary Proceedings. — No formal investigation is necessary and the respondent may be immediately removed or dismissed if any of the following circumstances is present:

(1) When the charge is serious and the evidence of guilt is strong;

(2) When the respondent is a recidivist or has been repeatedly charged and there is reasonable ground to believe that he is guilty of the present charge; and

(3) When the respondent is notoriously undesirable.

Resort to summary proceedings by the disciplining authority shall be done with utmost objectivity and impartiality to the end that no injustice is committed:Provided, That removal or dismissal except those by the President, himself or upon his order, may be appealed to the Commission.

SECTION 51. Preventive Suspension. — The proper disciplining authority may preventively suspend any subordinate officer or employee under his authority pending an investigation, if the charge against such officer or employee involves dishonesty, oppression or grave misconduct, or neglect in the performance of duty, or if there are reasons to believe that the respondent is guilty of charges which would warrant his removal from the service.

SECTION 52. Lifting of Preventive Suspension Pending Administrative Investigation. — When the administrative case against the officer or employee under preventive suspension is not finally decided by the disciplining authority within the period of ninety (90) days after the date of suspension of the respondent who is not a presidential appointee, the respondent shall be automatically reinstated in the service: Provided, That when the delay in the disposition of the case is due to the fault, negligence or petition of the respondent, the period of delay shall not be counted in computing the period of suspension herein provided.

SECTION 53. Removal of Administrative Penalties or Disabilities. — In meritorious cases and upon recommendation of the Commission, the President may commute or remove administrative penalties or disabilities imposed upon officers or employees in disciplinary cases, subject to such terms and conditions as he may impose in the interest of the service.

CHAPTER 8 Prohibitions

SECTION 54. Limitation on Appointment. — (1) No elective official shall be eligible for appointment or designation in any capacity to any public office or position during his tenure.

(2) No candidate who has lost in any election shall, within one year after election, be appointed to any office in the Government or any government-owned or controlled corporations or in any of its subsidiaries.

(3) Unless otherwise allowed by law or by the primary functions of his position, no appointive official shall hold any other office or employment in the Government or any subdivision, agency or instrumentality thereof, including government-owned or controlled corporations or their subsidiaries.

SECTION 55. Political Activity. — No officer or employee in the Civil Service including members of the Armed Forces, shall engage directly or indirectly in any partisan political activity or take part in any election except to vote nor shall he use his official authority or influence to coerce the political activity of any other person or body. Nothing herein provided shall be understood to prevent any officer or employee from expressing his views on current political problems or issues, or from mentioning the names of candidates for public office whom he supports: Provided, That public officers and employees holding political offices may take part in political and electoral activities but it shall be unlawful for them to solicit contributions from their subordinates or subject them to any of the acts involving subordinates prohibited in the Election Code.

SECTION 56. Additional or Double Compensation. — No elective or appointive public officer or employee shall receive additional or double compensation unless specifically authorized by law nor accept without the consent of the President, any present, emolument, office, or title of any kind from any foreign state.

Pensions and gratuities shall not be considered as additional, double or indirect compensation.

SECTION 57. Limitations on Employment of Laborers. — Laborers, whether skilled, semi-skilled or unskilled, shall not be assigned to perform clerical duties.

SECTION 58. Prohibition on Detail or Reassignment. — No detail or reassignment whatever shall be made within three (3) months before any election.

SECTION 59. Nepotism. — (1) All appointments in the national, provincial, city and municipal governments or in any branch or instrumentality thereof, including government-owned or controlled corporations, made in favor of a relative of the appointing or recommending authority, or of the chief of the bureau or office, or of the persons exercising immediate supervision over him, are hereby prohibited.

As used in this Section, the word "relative" and members of the family referred to are those related within the third degree either of consanguinity or of affinity.

(2) The following are exempted from the operation of the rules on nepotism: (a) persons employed in a confidential capacity, (b) teachers, (c) physicians, and (d) members of the Armed Forces of the Philippines: Provided, however, That in each particular instance full report of such appointment shall be made to the Commission.

The restriction mentioned in subsection (1) shall not be applicable to the case of a member of any family who, after his or her appointment to any position in an office or bureau, contracts marriage with someone in the same office or bureau, in which event the employment or retention therein of both husband and wife may be allowed.

(3) In order to give immediate effect to these provisions, cases of previous appointments which are in contravention hereof shall be corrected by transfer, and pending such transfer, no promotion or salary increase shall be allowed in favor of the relative or relatives who were appointed in violation of these provisions.

CHAPTER 9 Leave of Absence

SECTION 60. Leave of Absence. — Officers and employees in the Civil Service shall be entitled to leave of absence, with or without pay, as may be provided by law and the rules and regulations of the Civil Service Commission in the interest of the service.

CHAPTER 10 Miscellaneous Provisions

SECTION 61. Examining Committee, Special Examiners and Special Investigators. — Subject to approval by the proper head of a department or agency, the Commission may select suitable persons in the government service to act as members of examining committees, special examiners or special investigators. Such person shall be designated examiners or investigators of the Commission and shall perform such duties as the Commission may require, and in the performance of such duties they shall be under its exclusive control. Examining committees, special examiners or special investigators so designated may be given allowances or per diems for their services, to be paid out of the funds of, and at a rate to be determined by, the Commission.

SECTION 62. Fees. — The Commission shall collect and charge fees for civil service examinations, certifications of civil service ratings, service records, and other civil service matters, training courses, seminars, workshops in personnel management and other civil service matters. For this purpose, the Commission shall prescribe standard and reasonable rates for such examinations, certifications, training courses, seminars, and workshops: Provided, That no examination fees shall be collected in examinations given for the selection of scholars.

SECTION 63. Income. — The income of the Commission from fees, costs for services it may assess and levy, and such other proceeds generated in the performance of its functions shall be directly utilized by the Commission for its expenses.

SECTION 64. Authority of Officers to Administer Oaths, Take Testimony, Prosecute and Defend Cases in Court. — Members of the Commission, chiefs of offices, and other officers and employees of the Commission designated in writing by the Chairman may administer such oath as may be necessary in the transactions of official business and administer oaths and take testimony in connection with any authorized investigation. Attorneys of the Commission may prosecute and defend cases in connection with the functions of the Commission before any court or tribunal.

SECTION 65. Liability of Appointing Authority. — No person employed in the Civil Service in violation of the Civil Service Law and rules shall be entitled to receive pay from the government; but the appointing authority responsible for such unlawful employment shall be personally liable for the pay that would have accrued had the employment been lawful, and the disbursing officials shall make payment to the employee of such amount from the salary of the officers so liable.

SECTION 66. Liability of Disbursing Officers. — Except as may otherwise be provided by law, it shall be unlawful for a treasurer or other fiscal officer to draw or retain from the salary due an officer or employee any amount for contribution or payment of obligations other than those due the government or its instrumentalities.

SECTION 67. Penal Provision. — Whoever makes any appointment or employs any person in violation of any provision of this Title or the rules made thereunder or whoever commits fraud, deceit or intentional misrepresentation of material facts concerning other civil service matters, or whoever violates, refuses or neglects to comply with any of such provisions or rules, shall upon conviction be punished by a fine not exceeding one thousand pesos or by imprisonment not exceeding six (6) months, or both such fine and imprisonment in the discretion of the court.

SUBTITLE B The Commission on Audit

CHAPTER 1 General Provisions

SECTION 1. Declaration of Policy. — All resources of the government shall be managed, expended or utilized in accordance with law and regulations and safeguarded against loss or wastage through illegal or improper disposition to ensure efficiency, economy and effectiveness in the operations of government. The responsibility to take care that such policy is faithfully adhered to rests directly with the chief or head of the government agency concerned.

SECTION 2. Definition of Terms. — Unless the context otherwise requires, when used in this Title:

(1) "Fund" is a sum of money or other resources set aside for the purpose of carrying out specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations, and constitutes an independent fiscal and accounting entity.

(2) "Government funds" includes public moneys of every sort and other resources pertaining to any agency of the Government.

(3) "Revenue funds" comprises all funds deprived from the income of any agency of the Government and available for appropriation or expenditure in accordance with law.

(4) "Trust funds" refers to funds which have come officially into the possession of any agency of the Government or of a public officer as trustee, agent, or administrator, or which have been received for the fulfillment of some obligation.

(5) "Depository funds" comprises funds over which the officer accountable therefor may retain control for the lawful purposes for which they came into his possession. It embraces moneys in any and all depositories.

(6) "Depository" refers to any financial institution lawfully authorized to receive government moneys upon deposit.

(7) "Resources" refers to the actual assets of any agency of the Government such as cash, instruments representing or convertible to money, receivables, lands, buildings, as well as contingent assets, such as estimated revenues applying to the current fiscal period not accrued or collected, and bonds authorized and unissued.

(8) "Government agency" or "agency of the government," or "agency" refers to any department, bureaus or office of the National Government, or any of its branches and instrumentalities, or any political subdivision, as well as any government-owned or controlled corporation, including its subsidiaries, or other self-governing board or commission of the Government.

CHAPTER 2 Organization of the Commission on Audit

SECTION 3. The Commission Proper. — The Commission Proper shall be composed of the Chairman and two Commissioners. It shall sit as a body to formulate policies, promulgate rules and regulations, and prescribe standards governing the discharge of its powers and functions.

SECTION 4. The Chairman. — The Chairman shall act as Presiding Officer of the Commission Proper and Chief Executive Officer of the Commission. The Chairman may be assisted by the commissioners in the general administration of the Commission. He shall perform the following duties:

(1) Control and supervise the general administration of the commission;

(2) Direct and manage the implementation and execution of policies, standards, rules and regulations of the commission;

(3) Control and supervise the audit of highly technical or confidential transactions or accounts of any government agency; and

(4) Perform such other related functions as may be assigned from time to time by the Chairman.

SECTION 5. Offices of the Commissioners. — There shall be two (2) Commissioners who shall assist the Chairman, upon proper delegation in the general administration of the Commission. They shall assist in the review and evaluation of existing policies as well as in the formulation of new ones.

SECTION 6. The Commission Secretariat. — The Commission Secretariat shall be headed by the Secretary to the Commission who shall have the privileges of a COA service chief. The Commission Secretariat shall perform the following functions:

(1) Prepare the agenda for the sessions of the Commission Proper;

(2) Prepare and keep the minutes of all sessions, hearings and conferences of the Commission Proper;

(3) Maintain the records of the Commission Proper; and

(4) Perform such related functions as may be assigned by the Chairman of the Commission Proper.

CHAPTER 3 Offices

SECTION 7. Central Offices. — The Commission shall have the following central offices:

(1) The Administrative Office shall be headed by a Director and shall perform the following functions:

(a) Develop and maintain a personnel program which shall include recruitment, selection, appointment, performance evaluation, employee relations, and welfare services;

(b) Provide the Commission with services related to personnel, records, supplies, equipment, medical, collections and disbursements, and other related services; and

(c) Perform such other related functions as may be assigned from time to time by the Chairman.

(2) The Planning, Financial and Management Office shall:

(a) Formulate long range and annual plans and programs for the Commission;

(b) Formulate basis policies and guidelines for the preparation of the budget of the Commission, coordinate with the Department of Budget and Management, and the Office of the President in the preparation of the said budget;

(c) Maintain and administer the accounting system pertaining to the accounts of the Commission;

(d) Develop and maintain the management information system of the Commission;

(e) Develop and administer a management improvement program, including a system for measurement of performance of auditing units on which an annual report shall be submitted to the Chairman not later than the 31st of January of each year;

(f) Render consultancy services related to the discharge of government auditing functions; and

(g) Perform such other related functions as may be assigned from time to time by the Chairman.

(3) The State Accounting and Auditing Development Office shall be headed by a Director and shall perform the following functions:

(a) Formulate long range plans for a comprehensive training program for all personnel of the Commission and personnel of the agencies of government, with respect to Commission rules and regulations and audit matters;

(b) Prepare and implement annual training programs, consistent with its long range plans;

(c) Develop its capability to implement training programs;

(d) Publish the professional journal of the Commission;

(e) Establish and maintain such training centers and libraries as may be authorized by the Commission; and

(f) Perform such other related functions as may be assigned from time to time by the Chairman.

(4) The Accountancy Office shall be headed by a Director and shall perform the following functions:

(a) Prepare for the Commission, the annual financial report of the National Government and such other financial or statistical works as may be required by the Commission;

(b) Maintain the accounts of the current surplus of the general fund of the national government;

(c) Verify appropriations of national government agencies and control fund releases pertaining thereto; and

(d) Assist in the formulation of accounting rules and regulations and supervise the implementation of such rules and regulations in government agencies.

(5) The Special Audits Office shall be headed by a Director and shall perform the following functions:

(a) Conduct, consistent with the exercise by the Commission of its visitorial powers as conferred by the variable scope audit of non-governmental firms subsidized by the government (1) required to pay levies or government shares; (2) those funded by donations through the government; and (3) those for which the government has put up a counterpart fund. Such audits shall be limited to the funds coming from the government;

(b) Undertake, on a selective basis, financial compliance, economy, efficiency and effectiveness audit of national agencies and local government units, government-owned or controlled corporations, and other self-governing boards, commissions, or agencies of government, as well as specific programs and projects of the government;

(c) Audit financial operations of public utilities and franchise grantees for rate determination and franchise tax purposes;

(d) Conduct such other special audits as may be directed by the Chairman; and

(e) Perform such other related functions as may be assigned from time to time by the Chairman.

(6) The Technical Services Office shall perform the following functions:

(a) Review and evaluate contracts with emphasis on the engineering and other technical aspects;

(b) Inspect and appraise infrastructure projects, deliveries of materials and equipment, and property for disposal;

(c) Develop and administer a system for monitoring the prices of materials, supplies, and equipment purchased by the government;

(d) Initiate special studies on technical matters related to auditing; and

(e) Perform such other related functions as may be assigned from time to time by the Chairman.

(7) The Legal Office shall be headed by a General Counsel with the rank and privileges of a director and which shall perform the following functions:

(a) Perform advisory and consultative functions and render legal services with respect to the performance of the functions of the Commission and the interpretation of pertinent laws and regulations;

(b) Handle the investigation of administrative cases filed against the personnel of the Commission, evaluate and act on all reports of involvement of the said personnel in anomalies or irregularities in government transactions, and perform any other investigative work required by the Commission upon assignment by the Chairman;

(c) Represent the Commission in preliminary investigation of malversation and similar cases discovered in audit, assist and collaborate with the prosecuting agencies of Government in the prosecution thereof, and assist and collaborate with the Solicitor General in handling civil cases involving the Chairman or any of the Commissioners and other officials and employees of the Commission in their official capacity;

(d) Extend assistance by way of legal advice or counsel to auditors of the Commission who face harassment or retaliatory suits, whether civil or criminal, in consequence of the performance of their official functions;

(e) Coordinate and initiate for the Commission, with appropriate legal bodies of government with respect to legal proceedings towards the collection and enforcement of debts and claims, and the restitution of funds and property, found to be due any government agency in the settlement and adjustment of its accounts by the Commission; and

(f) Perform such other related functions as may be assigned from time to time by the Chairman.

(8) The National Government Audit Offices I and II shall be headed by a Director and which shall perform the following functions:

(a) Exercise control and supervision over the implementation of auditing rules and regulations in agencies of national government in the National Capital Region (NCR), including self-governing boards, commissions or agencies funded from national appropriations;

(b) Review audit reports covering agencies of the national government under its audit jurisdiction;

(c) Exercise control and supervision over personnel, planning, financial (budgetary and accounting), and legal matters pertaining to the Office and the Auditing Units under it;

(d) Formulate and develop plans, operating standards, methods and techniques for the implementation of auditing rules and regulations for agencies of the national government;

(e) Formulate accounting and auditing rules and regulations for agencies of the national government;

(f) Advise and assist the Chairman on matters pertaining to the audit of agencies of the national government under their respective jurisdictions; and

(g) Perform such other related functions as may be assigned from time to time by the Chairman.

(9) The Corporate Audit Office shall be headed by a Director and shall perform the following functions:

(a) Exercise control and supervision over the implementation of auditing rules and regulations in government-owned or controlled corporations in the National Capital Region;

(b) Review audit reports covering government-owned or controlled corporations;

(c) Exercise control and supervision over personnel, planning, financial (budgetary and accounting), and legal matters pertaining to the Office and the Auditing units under it;

(d) Formulate and develop plans, operating standards, methods and techniques for the implementation of accounting and auditing rules and regulations in government-owned or controlled corporations;

(e) Formulate accounting and auditing rules and regulations for government-owned or controlled corporations;

(f) Prepare for the Commission, the annual financial report of government-owned or controlled corporations;

(g) Advise and assist the Chairman on matters pertaining to the audit of government-owned or controlled corporations; and

(h) Perform such other related functions as may be assigned from time to time by the Chairman.

(10) The Local Governments Audit Office shall be headed by a Director and shall perform the following functions:

(a) Exercise control and supervision over the implementation of auditing rules and regulations in local government units in the National Capital Region;

(b) Review audit reports covering local government units in the National Capital Region;

(c) Exercise control and supervision over personnel, planning, financial (budgetary and accounting), and legal matters pertaining to the Office and Auditing units under it;

(d) Formulate and develop plans, operating standards, methods and techniques for the implementation of auditing rules and regulations in local government units;

(e) Formulate accounting and auditing rules and regulations for local government units;

(f) Prepare for the Commission, the annual financial report of local government units;

(g) Advise and assist the Chairman on matters pertaining to the audit of local government units; and

(h) Perform such other related functions as may be assigned from time to time by the Chairman.

SECTION 8. Auditing Units in Regional Offices: Structure and Functions. — The Regional Offices in Regions I to XII, each to be headed by a Director shall perform the following functions:

(1) Exercise supervision and control over the implementation of auditing rules and regulations in any agency of the government with principal office or place of operations within the regions;

(2) Review local, national and corporate audit reports pertaining to the region;

(3) Exercise control and supervision over personnel, planning, financial (budgetary and accounting), and legal matters pertaining to the region; and

(4) Perform such other related functions as may be assigned by the Chairman.

SECTION 9. Auditing Units in Government Agencies: Structure and Functions. — The Auditing Units in government agencies shall perform the following functions:

(1) Examine, audit and settle all accounts, funds, financial transactions and resources of government agencies under their jurisdiction;

(2) Submit audit reports and such other reports as may be required by the Commission;

(3) Keep and preserve expense vouchers, journal vouchers, stubs of treasury warrants and checks, reports of collections and disbursements and similar documents together with their supporting papers, under regulations of the Commission; and

(4) Perform such other functions as may be assigned to them by the Chairman.

CHAPTER 4 Jurisdiction, Powers and Functions of the Commission

SECTION 10. Statement of Objectives. — In keeping with the constitutional mandate, the Commission adheres to the following objectives:

(1) Determine whether or not the fiscal responsibility that rests directly with the head of the government agency has been properly and effectively discharged;

(2) Develop and implement a comprehensive audit program that shall encompass an examination of financial transactions, accounts and reports, including evaluation of compliance with applicable laws and regulations;

(3) Institute control measures through the promulgation of auditing and accounting rules and regulations governing the receipts, disbursements, and uses of funds and property, consistent with the total economic development efforts of the Government;

(4) Promulgate auditing and accounting rules and regulations so as to facilitate the keeping, and enhance the information value of the accounts of the Government;

(5) Institute measures designed to preserve and ensure the independence of its representatives; and

(6) Endeavor to bring its operations closer to the people by the delegation of authority through decentralization, consistent with the provisions of the Constitution and the laws.

SECTION 11. General Jurisdiction. — (1) The Commission on Audit shall have the power, authority, and duty to examine, audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to, the Government, or any of its subdivisions, agencies, or instrumentalities, including government-owned or controlled corporations with original charters, and on a post-audit basis: (a) constitutional bodies, commissions and offices that have been granted fiscal autonomy under this Constitution; (b) autonomous state colleges and universities; (c) other government-owned or controlled corporations and their subsidiaries; and (d) such non-governmental entities receiving subsidy or equity, directly or indirectly, from or through the Government, which are required by law or the granting institution to submit to such audit as a condition of subsidy or equity. However, where the internal control system of the audited agencies is inadequate, the Commission may adopt such measures, including temporary or special pre-audit, as are necessary and appropriate to correct the deficiencies. It shall keep the general accounts of the Government and, for such period as may be provided by law, preserve the vouchers and other supporting papers pertaining thereto.

(2) The Commission shall have exclusive authority, subject to the limitations in this Article, to define the scope of its audit and examination, establish the techniques and methods required therefor, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of government funds and properties.

SECTION 12. Appointing Power. — The Commission Proper shall appoint in accordance with the Civil Service Law, the officials and employees of the Commission wherever they are stationed or assigned.

SECTION 13. Examining Authority. — The Commission shall have authority to examine books, papers, documents filed by individuals and corporations with, and which are in the custody of, government offices in connection with government revenue collection operations, for the sole purpose of ascertaining that all funds determined by the appropriate agencies and collectible and due the Government have actually been collected, except as otherwise provided in the Internal Revenue Code of 1977.

SECTION 14. Visitorial Authority. — (1) The Commission shall have visitorial authority over non-government entities subsidized by the Government, those required to pay levies or have government shares, those which have received counterpart funds from the Government or are partly funded by donations through the Government. This authority, however, shall pertain only to the audit of these funds or subsidies coming from or through the Government; and

(2) Upon direction of the President, the Commission shall likewise exercise visitorial authority over non-governmental entities whose loans are guaranteed by the Government, provided that such authority shall pertain only to the audit of the government's contingent liability.

SECTION 15. Fee for Audit and Other Services. — (1) The Commission shall fix and collect reasonable fees for the different services rendered to non-government entities that shall be audited in connection with their dealings with the Government arising from subsidiaries, counterpart funding by Government, or where audited records become the basis for a government levy or share. Fees of this nature shall accrue to the General Fund and shall be remitted to the Treasurer of the Philippines within ten (10) days following the completion of the audit; and

(2) Whenever the Commission contracts with any government entity to render audit and related services beyond the normal scope of such services, the Commission is empowered to fix and collect reasonable fees. Such fees shall either be appropriated in the agency's current budget, charged against its savings, or appropriated in its succeeding year's budget. Remittance shall accrue to the General Fund and shall be made to the Treasurer of the Philippines within the time provided for in the contract of service, or in the billing rendered by the Commission.

SECTION 16. Deputization of Private Licensed Professionals to Assist Government Auditors. — (1) The Commission may, when the exigencies of the service so require, deputize and retain in the name of the Commission such certified public accountants and other licensed professionals not in the public service as it may deem necessary to assist government auditors in undertaking specialized audit engagements; and

(2) The deputized professionals shall be entitled to such compensation and allowances as may be stipulated, subject to pertinent rules and regulations on compensation and fees.

SECTION 17. Government Contracts for Auditing, Accounting and Related Services. — (1) No government agency shall enter into any contract with any private person or firm for services to undertake studies and services relating to government auditing, including services to conduct, for a fee, seminars or workshops for government personnel on these topics, unless the proposed contract is first submitted to the Commission to enable it to determine if it has the resources to undertake such studies or services. The Commission may engage the services of experts from the public or private sectors in the conduct of these studies; and

(2) Should the Commission decide not to undertake the study or service, it shall nonetheless have the power to review the contract in order to determine the reasonableness of its costs.

SECTION 18. Settlement of Accounts Between Agencies. — The Commission shall have the power, under such regulations as it may prescribe, to authorize and enforce the settlement of accounts subsisting between agencies of the Government.

SECTION 19. Collection of Indebtedness Due to the Government. — The Commission shall, through proper channels, assist in the collection and enforcement of all debts and claims, and the restitution of all funds or the replacement or payment as a reasonable price of property, found to be due the Government, or any of its subdivisions, agencies or instrumentalities, or any government-owned or controlled corporation or self-governing board, commission or agency of the Government, in the settlement and adjustment of its accounts. If any legal proceeding is necessary to that end, the Commission shall refer the case to the Solicitor General, the Government Corporate Counsel, or the Legal Staff of the Creditor Government Office or agency concerned to institute such legal proceeding. The Commission shall extend full support in the litigation. All such moneys due and payable shall bear interest at the legal rate from the date of written demand by the Commission.

SECTION 20. Power to Compromise Claims. — (1) When the interest of the Government so requires, the Commission may compromise or release in whole or in part, any settled claim or liability to any government agency not exceeding ten thousand pesos arising out of any matter or case before it or within its jurisdiction, and with the written approval of the President, it may likewise compromise or release any similar claim or liability not exceeding one hundred thousand pesos. In case the claim or liability exceeds one hundred thousand pesos, the application for relief therefrom shall be submitted, through the Commission and the President, with their recommendations, to the Congress; and

(2) The Commission may, in the interest of the Government, authorize the charging or crediting to an appropriate account in the National Treasury, small discrepancies (overage or shortage) in the remittances to, and disbursements of, the National Treasury, subject to the rules and regulations as it may prescribe.

SECTION 21. Retention of Money for Satisfaction of Indebtedness to Government. — When any person is indebted to any government agency, the Commission may direct the proper officer to withhold the payment of any money due such person or his estate to be applied in satisfaction of the indebtedness.

SECTION 22. Authority to Examine Accounts of Public Utilities. — (1) The Commission shall examine and audit the books, records and accounts of public utilities in connection with the fixing of rates of every nature, or in relation to the proceedings of the proper regulatory agencies, for purposes of determining franchise taxes;

(2) Any public utility refusing to allow an examination and audit of its books of accounts and pertinent records, or offering unnecessary obstruction to the examination and audit, or found guilty of concealing any material information concerning its financial status shall be subject to the penalties provided by law; and

(3) During the examination and audit, the public utility concerned shall produce all the reports, records, books of accounts and such other papers as may be required. The Commission shall have the power to examine under oath any official or employee of the said public utility.

SECTION 23. Submission of Papers Relative to Obligations. — (1) The Commission shall have the power, for purposes of inspection, to require the submission of the original of any order, deed, contract, or other document under which any collection, or payment from, government funds may be made, together with any certificate, receipt, or other evidence in connection therewith. If authenticated copy is needed for record purposes, the copy shall upon demand be furnished;

(2) In the case of deeds to property purchased by any government agency, the Commission shall require a certificate of title entered in favor of the Government or other evidence satisfactory to it that the title is in the Government; and

(3) It shall be the duty of the officials or employees concerned, including those in non-government entities under audit, or affected in the audit of government and non-government entities, to comply with these requirements. Failure or refusal to do so without justifiable cause shall be a ground for administrative disciplinary action as well as for disallowing permanently a claim under examination, assessing additional levy or government share, or withholding or withdrawing government funding or donations through the Government.

SECTION 24. Investigatory and Inquisitorial Powers. — The Chairman or any Commissioner, the Central Office Managers, the Regional Directors, the Auditors of any government agency, and any other official or employee of the Commission specially deputed in writing for the purpose by the Chairman shall, in compliance with the requirement of due process, have the power to summon the parties to a case brought before the Commission for resolution, issue subpoena and subpoena duces tecum, administer oaths, and otherwise take testimony in any investigation or inquiry on any matter within the jurisdiction of the Commission.

SECTION 25. Power to Punish Contempt. — The Commission shall have the power to punish contempt provided for in the Rules of Court under the same procedure and with the same penalties provided therein. Any violation of any final and executory decision, order or ruling of the Commission shall constitute contempt of the Commission.

SECTION 26. Annual Report of the Commission. — (1) The Commission shall submit to the President and the Congress not later than the last day of September of each year 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 the efficiency and effectiveness of these agencies;

(2) To carry out the purposes of this section, the Chief Accountant or the official in charge of keeping the accounts of government agency shall submit to the Commission year-end trial balances and such other supporting or subsidiary statements as may be required by the Commission not later than the fourteenth (14) day of February. Trial balances returned by the Commission for revision due to non-compliance with accounting rules and regulations shall be resubmitted within three days after the date of receipt by the official concerned; and

(3) Failure on the part of any official or employee to comply with the provisions of the immediately preceding paragraph shall cause the automatic suspension of the payment of his salary and other emoluments until he shall have complied therewith. The violation of these provisions for at least three (3) times shall subject the offender to administrative disciplinary action.

SECTION 27. Statement of Monthly Receipts and Disbursements. — The Commission shall forward to the Secretary of Finance, as soon as and within sixty (60) days after the expiration of each month, a statement of all receipts of the national government of whatever class, and payments of moneys made on warrants or otherwise during the preceding month.

SECTION 28. Powers, Functions, Duties of Auditors as Representatives of the Commission. — (1) The Auditors shall exercise such powers and functions as may be authorized by the Commission in the examination, audit and settlement of the accounts, funds, financial transactions and resources of the agencies under their respective audit jurisdiction;

(2) A report of audit for each calendar year shall be submitted on the last working day of February following the close of the year by the head of each auditing unit through the Commission to the head or the governing body of the agency concerned, and copies thereof shall be furnished the government officials concerned or authorized to receive them. Subject to such rules and regulations as the Commission may prescribe, the report shall set forth the scope of audit and shall include statements of financial conditions, surplus or deficit analysis, operations, changes in financial position, and such comments and information as may be necessary together with such recommendations with respect thereto as may be advisable, including a report of any impairment of capital noted in the audit. It shall also show specifically any program, expenditure, or other financial transaction or undertaking observed in the course of audit which in the opinion of the auditor has been carried out or made without authority of law. The auditor shall render such other reports as the Commission may require;

(3) In the performance of their respective audit functions as herein specified, the auditors shall employ such auditing procedures and techniques as are determined by the Commission under regulations that it may promulgate; and

(4) The auditors in all auditing units shall have the custody and be responsible for the safekeeping and preservation of paid expense vouchers, journal vouchers, stubs of treasury warrants or checks, reports of collections and disbursements and similar documents, together with their respective supporting papers, under regulations of the Commission.

SECTION 29. Check and Audit of Property or Supplies. — The auditor shall from time to time conduct a careful and thorough check and audit of all property or supplies of the agency to which he is assigned. Such check and audit shall not be confined to a mere inspection and examination of the pertinent vouchers, inventories, and other papers but shall include an ocular verification of the existence and condition of the property or supplies. The recommendation of the auditor shall be embodied in the proper report.

SECTION 30. Annual Audit and Work Program. — Each Auditor who is head of an auditing unit shall develop and devise an annual work program and the necessary audit program for his unit in accordance with regulations of the Commission.

SECTION 31. Seizure of Office by Auditor. — (1) The books, accounts, papers and cash of any local treasurer or other accountable officer shall at all times be open to the inspection of the Commission or its authorized representative;

(2) In case an examination of the accounts of a local treasurer discloses a shortage in cash which should be on hand, it shall be the duty of the examining officer to seize the office and its contents, notify the Commission and the local chief executive, thereupon immediately take full possession of the office and its contents, close and render his accounts to the date of taking possession, and temporarily continue the public business of such office; and

(3) The auditor who takes possession of the office of the local treasurer under this section shall ipso facto supersede the local treasurer until the officer involved is restored, or another person has been appointed or designated to the position or other provision has been lawfully made for filling the office.

SECTION 32. Constructive Distraint of Property of Accountable Officer. — (1) Upon discovery in audit of a shortage in the accounts of any accountable officer and upon a finding of a prima facie case of malversation of public funds or property against him, in order to safeguard the interest of the Government, the Commission may place under constructive distraint personal property of the accountable officer concerned where there is reasonable ground to believe that the said officer is retiring from the government service or intends to leave the Philippines or remove his property therefrom or hide or conceal his property;

(2) The constructive distraint shall be effected by requiring the accountable officer concerned or any other person having possession or control of the property to accomplish a receipt, in the form prescribed by the Commission, covering the property distrained and obligate himself to preserve the same intact and unaltered and not to dispose of it in any manner whatever without the express authority of the Commission; and

(3) In case the said accountable officer or other person having the possession and control of the property sought to be placed under constructive distraint refuses or fails to accomplish the receipt herein referred to, the representative of the Commission effecting the constructive distraint shall proceed to prepare a list of such property and, in the presence of two (2) witnesses, leave a copy thereof in the premises where the property distrained is located, after which the said property shall be deemed to have been placed under constructive distraint.

CHAPTER 5 Decisions of the Commission

SECTION 33. Appeal from Decision of Auditors. — Any person aggrieved by the decision of an auditor of any government agency in the settlement of an account or claim may, within six (6) months from receipt of a copy thereof, appeal in writing to the Commission.

SECTION 34. Period for Rendering Decisions of the Commission. — The Commission shall decide any case brought before it within sixty (60) days from the date of its submission for resolution. If the account or claim involved in the case needs reference to other persons or offices, or to a party interested, the period shall be counted from the time the last comment necessary to a proper decision is received by it.

SECTION 35. Appeal from Decision of the Commission. — Any decision, order or ruling of the Commission may be brought to the Supreme Court on certiorari by the aggrieved party within thirty days from his receipt of a copy thereof in the manner provided by law and the Rules of Court. When the decision, order or ruling adversely affects the interest of any government agency, the appeal may be taken by the proper head of that agency.

SECTION 36. Finality of Decision of the Commission or Any Auditor. — A decision of the Commission or of any Auditor upon any matter within its or his jurisdiction, if not appealed as herein provided, shall be final and executory.

SECTION 37. Opening and Revision of Settled Accounts. — (1) At any time before the expiration of three (3) years after the settlement of any account by an auditor, the Commission may motu proprio review and revise the account or settlement and certify a new balance. For this purpose, it may require any account, vouchers or other papers connected with the matter to be forwarded to it;

(2) When any settled account appears to be tainted with fraud, collusion, or error of calculation, or when new and material evidence is discovered, the Commission may, within three (3) years after the original settlement, open the account and, after a reasonable time for reply or appearance of the party concerned, certify thereon a new balance. An auditor may exercise the same power with respect to settled accounts pertaining to the agencies under his audit jurisdiction; and

(3) Accounts once finally settled shall in no case be opened or reviewed except as herein provided.

CHAPTER 6 Government Auditing and Accounting

SECTION 38. Definition of Government Auditing. — Government auditing is the analytical and systematic examination and verification of financial transactions, operations, accounts and reports of any government agency for the purpose of determining their accuracy, integrity and authenticity, and satisfying the requirements of law, rules and regulations.

SECTION 39. General Standards. — (1) The audit shall be performed by a person possessed with adequate technical training and proficiency as auditor;

(2) In all matters relating to the audit work, the auditor shall maintain complete independence, impartiality and objectivity and shall avoid any possible compromise of his independence or any act which may create a presumption of lack of independence or the possibility of undue influence in the performance of his duties; and

(3) The auditor shall exercise due professional care and be guided by applicable laws, regulations and the generally accepted principles of accounting in the performance of the audit work as well as in the preparation of audit and financial reports.

SECTION 40. Definition of Government Accounting. — Government accounting includes the processes of analyzing, recording, classifying, summarizing and communicating all transactions involving the receipt and dispositions of government funds and property, and interpreting the results thereof.

SECTION 41. Objectives of Government Accounting. — Government accounting shall aim to produce information concerning past operations and present conditions; provide a basis for guidance for future operations; provide for control of the acts of public bodies and officers in the receipt, disposition and utilization of funds and property; and report on the financial position and the results of operations of government agencies for the information of all persons concerned.

CHAPTER 7 Receipt and Disposition of Funds and Property

SECTION 42. Accounting for Money and Property Received by Public Officials. — Except as may otherwise be specifically provided by law or competent authority, all moneys and property officially received by a public officer in any capacity or upon any occasion must be accounted for as government funds and government property. Government property shall be taken up in the books of the agency concerned at acquisition cost or an appraised value.

SECTION 43. Special, Fiduciary and Trust Funds. — Receipts shall be recorded as income of Special, Fiduciary or Trust Funds or Funds other than the General Fund only when authorized by law as implemented pursuant to law.

SECTION 44. Issuance of Official Receipts. — (1) No payment of any nature shall be received by a collecting officer without immediately issuing an official receipt in acknowledgment thereof. The receipt may be in the form of postage, internal revenue or documentary stamps and the like, or officially numbered receipts, subject to proper custody, accountability and audit; and

(2) Where mechanical devices are used to acknowledge cash receipts, the Commission may approve, upon request, exemption from the use of accountable forms.

CHAPTER 8 Application of Appropriated Funds

SECTION 45. Disbursement of Government Funds. — (1) Revenue funds shall not be paid out of any public treasury or depository except in pursuance of an appropriation law or other specific statutory authority;

(2) Trust funds shall not be paid out of any public treasury or depository except in fulfillment of the purpose for which the trust was created or funds received, and upon authorization of the legislative body, or head of any other agency of the government having control thereof, and subject to pertinent budget laws, rules and regulations;

(3) National revenue and trust funds shall not be withdrawn from the National Treasury except upon warrant or other instruments of withdrawal approved by the Secretary of Finance as recommended by the Treasurer of the Philippines; and

(4) Temporary investment of investible cash in the National Treasury in any securities issued by the National Government and its political subdivisions and instrumentalities, including government-owned or controlled corporations as authorized by the Secretary of Finance, shall not be construed as disbursements of funds.

SECTION 46. Appropriation Before Entering into Contract. — (1) No contract involving the expenditure of public funds shall be entered into unless there is an appropriation therefor, the unexpended balance of which, free of other obligations, is sufficient to cover the proposed expenditure; and

(2) Notwithstanding this provision, contracts for the procurement of supplies and materials to be carried in stock may be entered into under regulations of the Commission provided that when issued, the supplies and materials shall be charged to the proper appropriations account.

SECTION 47. Certificate Showing Appropriation to Meet Contract. — Except in the case of a contract for personal service, for supplies for current consumption or to be carried in stock not exceeding the estimated consumption for three (3) months, or banking transactions of government-owned or controlled banks, no contract involving the expenditure of public funds by any government agency shall be entered into or authorized unless the proper accounting official of the agency concerned shall have certified to the officer entering into the obligation that funds have been duly appropriated for the purpose and that the amount necessary to cover the proposed contract for the current calendar year is available for expenditure on account thereof, subject to verification by the auditor concerned. The certificate signed by the proper accounting official and the auditor who verified it, shall be attached to and become an integral part of the proposed contract, and the sum so certified shall not thereafter be available for expenditure for any other purpose until the obligation of the government agency concerned under the contract is fully extinguished.

SECTION 48. Void Contract and Liability of Officer. — Any contract entered into contrary to the requirements of the two (2) immediately preceding sections shall be void, and the officer or officers entering into the contract shall be liable to the Government or other contracting party for any consequent damage to the same extent as if the transaction had been wholly between private parties.

SECTION 49. Countersigning of Warrants or Checks by Auditors. — No warrant or check shall be paid by the Treasurer of the Philippines, local treasurer, or any government depository unless it is countersigned by a duly authorized official of the Commission. When, in the opinion of the Commission, the interest of the service so requires, the warrant or check may be paid without the countersignature under such rules and regulations as it may prescribe from time to time.

CHAPTER 9 Accountability and Responsibility for Government Funds and Property

SECTION 50. Accountable Officers; Board Requirements. — (1) Every officer of any government agency whose duties permit or require the possession or custody government funds shall be accountable therefor and for safekeeping thereof in conformity with law; and

(2) Every accountable officer shall be properly bonded in accordance with law.

SECTION 51. Primary and Secondary Responsibility. — (1) The head of any agency of the Government is immediately and primarily responsible for all government funds and property pertaining to his agency;

(2) Persons entrusted with the possession or custody of the funds or property under the agency head shall be immediately responsible to him, without prejudice to the liability of either party to the Government.

SECTION 52. General Liability for Unlawful Expenditures. — Expenditures of government funds or uses of government property in violation of law or regulations shall be a personal liability of the official or employee found to be directly responsible therefor.

SECTION 53. Prohibition Against Pecuniary Interest. — No accountable or responsible officer shall be pecuniarily interested, directly or indirectly, in any contract or transaction of the agency in which he is such an officer.

CHAPTER 10 Miscellaneous Provisions

SECTION 54. Duty to Respect the Commission's Independence. — It shall be the duty of every person to respect, protect and preserve the independence of the Commission.

SECTION 55. Administrative Disciplinary Action. — Subject to rules and regulations as may be approved by the President, any unjustified failure by the public officer concerned to comply with any requirement imposed in Title I-B, Book V of this Code shall constitute neglect of duty and shall be a ground for administrative disciplinary action against said public officer who, upon being found guilty thereof after hearing, shall be meted out such penalty as is commensurate with the degree of his guilt in accordance with the Civil Service Law. Repeated unjustified failure to comply with the requirement imposed in Title I-B, Book V of this Code shall be conclusive proof that the public officer concerned is notoriously undesirable.

SUBTITLE C Commission on Elections

CHAPTER 1 General Provisions

SECTION 1. Declaration of Policy. — The State shall at all times ensure free, orderly, honest, peaceful and credible elections under a free and open party system which shall be allowed to evolve according to the free choice of the people subject to the provisions of Article IX-C of the 1987 Constitution of the Philippines.

SECTION 2. Powers and Functions. — In addition to the powers and functions conferred upon it by the constitution, the Commission shall have exclusive charge of the enforcement and administration of all laws relative to the conduct of elections for the purpose of insuring free, orderly, honest, peaceful and credible elections, and shall:

(1) Promulgate rules and regulations implementing the provisions of the Omnibus Elections Code or other laws which the Commission is required to enforce and administer;

(2) Fix other reasonable periods for certain pre-election requirements in order that voters shall not be deprived of their right of suffrage and certain groups of rights granted them in the Omnibus Election Code;

Unless indicated in the Omnibus Election Code, the Commission is hereby authorized to fix the appropriate period for the various prohibited acts enumerated therein consistent with the requirements of free, orderly, honest, peaceful and credible elections.

(3) Exercise direct and immediate supervision and control over national and local officials or employees, including members of any national or local law enforcement agency and instrumentality of the government required by law to perform duties relative to the conduct of elections, plebiscite, referendum, recall and initiative. In addition, it may authorize CMT cadets, eighteen years of age and above to act as its deputies for the purpose of enforcing its orders;

The Commission may relieve any officer or employee referred to in the preceding paragraph from the performance of his duties relating to electoral processes who violates the election law or fails to comply with its instructions, orders, decisions or rulings, and appoint his substitute. Upon recommendation of the Commission, the corresponding proper authority shall suspend or remove from office any or all of such officers or employees who may, after due process, be found guilty of such violation or failure.

(4) During the period of the campaign and ending thirty days thereafter, when in any area of the country there are persons committing acts of terrorism to influence people to vote for or against any candidate or political party, the Commission shall have the power to authorize any member or members of the Armed Forces of the Philippines, the National Bureau of Investigation, the Integrated National Police or any similar agency or instrumentality of the government, except civilian home defense forces, to act as deputies for the purpose of insuring the holding of free, orderly, honest, peaceful and credible elections;

(5) Publish at least ten (10) days before an election in a newspaper of general circulation certified data on the number of official ballots and election returns and the names and address of the printers and the number printed by each;

(6) Refuse, motu propio or upon a verified petition, to give due course to or cancel a certificate of candidacy if it is shown that said certificate has been filed to put the election process in mockery or disrepute or to cause confusion among the voters by the similarity of the names of the registered candidates or by other circumstances or acts which clearly demonstrate that the candidate has no bona fide intention to run for the office for which the certificate of candidacy has been filed and thus prevent a faithful determination of the true will of the electorate;

(7) Postpone, motu propio or upon verified petition and after due notice and hearing whereby all interested parties are afforded equal opportunity to be heard, the election to a date which should be reasonably close to the date of the election not held, suspended or which resulted in a failure to elect but not later than thirty days after the cessation of the cause for such postponement or suspension of the election or failure to elect, when for any serious cause such as violence, terrorism, loss or destruction of election paraphernalia or records, force majeure, and other analogous causes the holding of a free, orderly, honest, peaceful and credible election should become impossible in any political subdivision.

(8) Call for the holding or continuation of election not held in any polling place where on account of force majeure, violence, terrorism, fraud or other analogous causes the election has not been held on the date fixed, or had been suspended before the hour fixed by law for the closing of the voting, or after the voting and during the preparation and the transmission of the election returns or in the custody or canvass thereof, such election results in a failure to elect, and in any of such cases the failure or suspension of election would affect the result of the election. Such call should be on the basis of a verified petition by any interested party and after due notice and hearing, and the new date should be reasonably close to the date of the election not held, suspended or which resulted in a failure to elect but not later than thirty (30) days after the cessation of the cause of such postponement or suspension of the election or failure to elect.

(9) Call a special election to elect the member to serve the unexpired portion in case a vacancy arises in the Senate or in the House of Representatives eighteen (18) months or more before a regular election, to be held within sixty (60) days after the vacancy occurs;

(10) Summon the parties to a controversy pending before it, issue subpoena duces tecum and take testimony in any investigation or hearing before it, and delegate such power to any officer of the Commission who shall be a member of the Philippine Bar. In case of failure of a witness to attend, the Commission, upon proof of service of the subpoena to said witness, may issue a warrant to arrest the witness and bring him before the Commission or the officer before whom his attendance is required;

Any controversy submitted to the Commission shall, after compliance with the requirements of due process, be immediately heard and decided by it within sixty (60) days from the date of its submission for decision or resolution. No decision or resolution shall be rendered by the Commission either en banc or by division unless taken up in a formal session properly convened for the purpose;

The Commission may when necessary, avail itself of the assistance of any national or local law enforcement agency and or instrumentality of the government to execute under its direct and immediate supervision any of its final decisions, orders, instructions or rulings;

(11) Punish for contempt according to the procedure, and with the same penalties provided, in the Rules of Court. Any violation of any final and executory decision, order or ruling of the Commission shall constitute contempt thereof;

(12) Enforce and execute its decisions, directives, orders and instructions which shall have precedence over those emanating from any other authority, except the Supreme Court and those issued in habeas corpus proceedings;

(13) Prescribe the forms to be used in the election, plebiscite or referendum, recall or initiative;

(14) Procure any supplies, equipment, materials or services needed for the holding of the election by public bidding; but if it finds the requirements of public bidding impractical to observe, then by negotiations or sealed bids, and in both cases, the accredited parties shall be duly notified;

(15) Prescribe the use or adoption of the latest technological and electronic devices, taking into account the situation prevailing in the area and funds available for the purpose. The Commission shall notify the authorized representatives of accredited political parties and candidates in areas affected by the use or adoption of technological and electronic devices not less than thirty days prior to the effectivity of the use of such devices;

(16) Constitute a pool of standby-teachers from which substitutes shall be drawn in case a member/s of the Board of Election Inspectors who, for one reason or another, failed to report or refused to act as such on the day of election;

(17) Carry out a continuing and systematic campaign through newspapers of general circulation, radio and other media forms to educate the public and fully inform the electorate about election laws, procedures, decisions, and other matters relative to the works and duties of the Commission and the necessity of clean, free, orderly, honest, peaceful and credible electoral processes;

(18) Accredit non-partisan groups or organizations of citizens from the civic, youth, professional, education, business or labor sectors known for their probity, impartiality and integrity with the membership and capability to undertake a coordinated operation and activity to assist it in the implementation of the provisions of Omnibus Election Code and the resolutions, orders and instructions of the Commission for the purpose of ensuring free, orderly, honest, peaceful and credible elections in any constituency. Such groups or organizations shall function under the direct and immediate control and supervision of the Commission;

(19) Conduct hearing on controversies pending before it in the cities or provinces upon proper motion of any party, taking into consideration the materiality and number of witnesses to be presented, the situation prevailing in the area and the fund available for the purpose;

(20) Have exclusive jurisdiction over all pre-proclamation controversies. It may motu proprio or upon written petition, and after due notice and hearing, order the partial or total suspension of the proclamation of any candidate-elect or annul partially or totally any proclamation, if one has been made, as the evidence shall warrant. Notwithstanding the pendency of any pre-proclamation controversy, the Commission may, motu propio or upon filing of a verified petition and after due notice and hearing, order the proclamation of other winning candidates whose election will not be affected by the outcome of the controversy.

(21) Have the exclusive power, through its duly authorized legal officers, to conduct preliminary investigation of all election offenses punishable under the Omnibus Election Code and to prosecute the same. The Commission may avail itself of the assistance of other prosecuting arms of the government: Provided, however, that in the event that the Commission fails to act on any complaint within four (4) months from its filing, the complainant may file the complaint with the office of the fiscal or with the Department of Justice for proper investigation and prosecution, if warranted; and

(22) Perform such other functions as may be provided by law.

SECTION 3. Enforcement Powers. — For the effective enforcement of the provisions of the Omnibus Election Code, the Commission is further vested and charged with the following powers, duties and responsibilities:

1. To stop any illegal activity, or confiscate, tear down, and stop any unlawful, libelous, misleading or false election propaganda, after due notice and hearing; and

2. To inquire into the financial records of candidates and any organization or group of persons, motu propio or upon written representation for probable cause by any candidate, organization or group of persons or qualified voter, after due notice and hearing.

For purposes of this Section, the Commission may avail itself of the assistance of the Commission on Audit, the Central Bank, the National Bureau of Investigation, the Bureau of Internal Revenue, the Armed Forces of the Philippines, the Integrated National Police of the Philippines, barangay officials and other agencies of the government.

CHAPTER 2 The Commission Proper

SECTION 4. Composition and Qualification. — There shall be a Commission on Elections composed of a Chairman and six (6) Commissioners who shall be natural born citizens of the Philippines and, at the time of their appointment, at least thirty-five (35) years of age, holders of a college degree, and must not have been candidates for any elective position in the immediately preceding elections. However, a majority thereof, including the Chairman, shall be members of the Philippine Bar who have been engaged in the practice of law for at least ten (10) years.

SECTION 5. Appointment and Term of Office. — The Chairman and the Commissioners shall be appointed by the President with the consent of the Commission on Appointments for a term of seven (7) years without reappointment. Of those first appointed, three (3) Members shall hold office for seven (7) years, two (2) members for five (5) years, and the last members for three (3) years, without reappointment. Appointment to any vacancy shall be only for the unexpired term of the predecessor. In no case shall any Member be appointed or designated in a temporary or acting capacity.

SECTION 6. Disqualifications. — The Chairman and members of the Commission shall be subject to the canons of judicial ethics in the discharge of their functions.

No chairman or commissioner shall sit in any case in which he has manifested bias or prejudice or antagonism against any party thereto and in connection therewith, or in any case in which he would be disqualified under the Rules of Court. If it be claimed that the chairman or a commissioner is disqualified as above provided, the party objecting to his competency may file his objection in writing with the Commission stating the ground therefor. The official concerned shall continue to participate in the hearing or withdraw therefrom in accordance with his determination of the question of his disqualification. The decision shall forthwith be made in writing and filed with the other papers of the case in accordance with the Rules of Court. If a disqualification should result in a lack of quorum in the Commission sitting en banc, the Presiding Justice of the Court of Appeals shall designate a justice of said court to sit in said case for the purpose of hearing and reaching a decision thereon.

SECTION 7. Chairman as Executive Officer; Powers and Duties. — The Chairman, who shall be the Chief Executive Officer of the Commission, shall:

(1) Execute and administer the policies, decisions, orders and resolutions approved by the Commission;

(2) Direct and supervise the operations and internal administration of the Commission;

(3) Sign appointments of subordinate officials and employees made by the Commission and enforce decisions on administrative discipline involving them;

(4) Make temporary assignments, rotate and transfer personnel in accordance with the provisions of the civil service law;

(5) Submit an annual budget to the Commission for its approval;

(6) Delegate his authority, in whole or in part, to other officials of the Commission, in accordance with the rules and regulations of the Commission; and

(7) Perform such other duties as may be authorized by the Commission.

SECTION 8. Executive Director; Powers and Duties. — The Executive Director of the Commission shall:

(1) Advise and assist the Chairman in the formulation and implementation of the objectives, policies, plans and programs of the Commission;

(2) Serve as the principal assistant of the Chairman in the overall supervision of the administrative business of the Commission;

(3) Oversee all the operational activities of the Commission;

(4) Coordinate the programs and projects of the Commission and be responsible for its economical, efficient and effective administration;

(5) Serve as deputy to the Chairman in all matters relating to the operational activities of the Commission;

(6) Administer oaths in connection with all matters relating to the business of the Commission; and

(7) Perform such other duties as may be assigned by the Chairman.

SECTION 9. Staff and Operating Units. — The Commission shall have the following staff and operating units: Office of the Chairman, Office of the Executive Director, Office of Electoral Contests Adjudication, Regional Offices, Election and Barangay Affairs Department, Law Department, Election Records and Statistics Department, Administrative Service Department, Planning Department, Personnel Department, Finance Services Department and Education and Information Department.

SECTION 10. Duties and Functions of Offices and Departments of the Commission. — The different offices and departments of the Commission shall operate in accordance with their respective duties and functions assigned to them by the Commission, subject to the requirements of efficiency, economy and effectiveness, and pertinent Budget and Civil Service Law, rules and regulations.

CHAPTER 3 The Field Offices

SECTION 11. Field Office of the Commission. — The Commission shall have the following field offices:

(1) Regional Election Office, headed by the Regional Election Director and assisted by the Assistant Regional Director and such other subordinate officers or employees as the Commission may appoint;

(2) Provincial Election Office, headed by the Provincial Election Supervisor and assisted by such other subordinate officers or employees as the Commission may appoint;

(3) City Municipal Election Office, headed by the City/Municipal Election Registrar who shall be assisted by an election clerk and such other employees as the Commission may appoint.

The Commission may delegate its powers and functions or order the implementation or enforcement of its orders, rulings or decisions through the heads of its field offices.

SECTION 12. Qualifications of Heads of Field Offices. — Only members of the Philippine Bar shall be eligible for appointment to the position of regional director, assistant regional director, provincial election supervisor and election registrar. However, if there are no members of the Philippine Bar available for appointment as election registrar, except in cities and capital towns, graduates of duly recognized schools of law, liberal arts, education or business administration who possess the appropriate civil service eligibility may be appointed to said position.

SECTION 13. Changes in the Composition, Distribution of Assignment of Field Offices. — The Commission may make changes in the composition, distribution and assignment of field offices, as well as its personnel, whenever the exigencies of the service and the interest of free, orderly, honest, peaceful and credible election so require: Provided, That such changes shall be effective and enforceable only for the duration of the election period concerned and shall not affect the tenure of office of the incumbents of positions affected and shall not constitute a demotion, either in rank or salary, nor result in a change of status; and Provided, further, That there shall be no changes in the composition, distribution or assignment within thirty (30) days before election, except for cause and after due notice and hearing, and that in no case shall a regional or assistant regional director be assigned to a region, or a provincial election supervisor to a province, or a city municipal election registrar to a city or municipality, where he and/or his spouse are related to any candidate within the fourth civil degree of consanguinity or affinity as the case may be.

TITLE II Other Bodies

SUBTITLE A Commission on Human Rights

SECTION 1. Composition and Qualification. — The Commission on Human Rights shall be composed of a Chairman and four (4) Members who must be natural-born citizens of the Philippines and, at the time of their appointment, at least thirty-five years of age, and must not have been candidates for any elective position in the elections immediately preceding their appointment. However, a majority thereof shall be members of the Philippine Bar.

SECTION 2. Powers and Functions. — The Commission on Human Rights shall:

(1) Investigate, on its own or on complaint by any party, all forms of human rights violations involving civil and political rights;

(2) Adopt its operational guidelines and rules of procedure, and cite for contempt violations thereof in accordance with the Rules of Court;

(3) Provide appropriate legal measures for the protection of human rights of all persons within the Philippines, as well as Filipinos residing abroad, and provide for preventive measures and legal aid services to the under-privileged whose human rights have been violated or need protection;

(4) Exercise visitorial powers over jails, prisons, or detention facilities;

(5) Establish a continuing program of research, education and information to enhance respect for the primacy of human rights;

(6) Recommend to the Congress effective measures to promote human rights and to provide for compensation to victims of violations of human rights, or their families;

(7) Monitor the Philippine Government's compliance with international treaty obligations on human rights;

(8) Grant immunity from prosecution to any person whose testimony or whose possession of documents or other evidence is necessary or convenient to determine the truth in any investigation conducted by it or under its authority;

(9) Request the assistance of any department, bureau, office, or agency in the performance of its functions;

(10) Appoint its officers and employees in accordance with law; and

(11) Perform such other duties and functions as may be provided by law.

SECTION 3. Inhibitions Against Commissioners. — The Chairman and the Members of the Commission on Human Rights shall not, during their tenure, hold any other office or employment. Neither shall they engage in the practice of any profession or in the active management or control of any business which in any way will be affected by the functions of their office, nor shall they be financially interested, directly or indirectly, in any contract with, or in any franchise or privilege granted by the government, any of its subdivisions, agencies, or instrumentalities, including government-owned or controlled corporations or their subsidiaries.

SECTION 4. Term of Office. — The Chairman and the Members of the Commission on Human Rights shall be appointed by the President for a term of seven years without reappointment. Appointment to any vacancy shall be only for the unexpired term of the predecessor.

SECTION 5. Compensation. — The Chairman and the Members of the Commission on Human Rights shall receive the same salary as the Chairman and Members, respectively, of the Constitutional Commissions, which shall not be decreased during their term of office.

SECTION 6. Annual Appropriations. — The approved annual appropriations of the Commission on Human Rights shall be automatically and regularly released.

SUBTITLE B Office of the Ombudsman

SECTION 1. Composition. — (1) The Office of the Ombudsman shall be headed by the Ombudsman to be known as the Tanodbayan, who shall be assisted by one overall Deputy and at least by one Deputy each for Luzon, Visayas and Mindanao. A separate Deputy for the military establishment may likewise be appointed.

(2) It shall have such other officials and employees, to be appointed by the Ombudsman according to the Civil Service Law.

SECTION 2. Powers and Functions. — The Office of the Ombudsman shall:

(1) Investigate on its own, or on complaint by any person, any act or omission of any public official, employee, office or agency, when such act or omission appears to be illegal, unjust, improper, or inefficient;

(2) Direct, upon complaint or at its own instance, any public official or employee of the Government, or any subdivision, agency or instrumentality thereof, as well as of any government-owned or controlled corporation with original charter, to perform and expedite any act or duty required by law, or to stop, prevent, and correct any abuse or impropriety in the performance of duties;

(3) Direct the officer concerned to take appropriate action against a public official or employee at fault, and recommend his removal, suspension, demotion, fine, censure, or prosecution, and ensure compliance therewith;

(4) Direct the officer concerned, in any appropriate case, and subject to such limitations as may be provided by law, to furnish it with copies of documents relating to contracts or transactions entered into by his office involving the disbursement or use of public funds or properties, and report any irregularity to the Commission on Audit for appropriate action;

(5) Request any government agency for assistance and information necessary in the discharge of its responsibilities, and to examine, if necessary, pertinent records and documents;

(6) Publicize matters covered by its investigation when circumstances so warrant and with due prudence;

(7) Determine the causes of inefficiency; red tape, mismanagement, fraud, and corruption in the Government and make recommendations for their elimination and the observance of high standards of ethics and efficiency;

(8) Promulgate its rules of procedure and exercise such other powers or perform such functions or duties as may be provided by law.

SECTION 3. Action and Complaints. — The Ombudsman and his Deputies, as protectors of the people, shall act promptly on complaints filed in any form or manner against public officials or employees of the Government, or any subdivision, agency or instrumentality thereof, including government-owned or controlled corporations, and shall, in appropriate cases, notify the complainants of the action taken and the result thereof.

SECTION 4. Fiscal Autonomy. — The Office of the Ombudsman shall enjoy fiscal autonomy. Its approved annual appropriations shall be automatically and regularly released.

SUBTITLE C The National Economic and Development Authority

CHAPTER 1 General Provisions

SECTION 1. Declaration of Policy. — The State shall ensure that all socio-economic programs and activities of the government shall be programmed within the context of well-formulated and consistent long, medium, and short-term development plans and policies to promote both the growth of the economy and the equitable distribution of the benefits of such growth to the members of society. To this end, it is recognized that the formulation of the required socio-economic development policies and plans is a vital process that calls for the participation of the various government agencies and private sector institutions and individuals concerned, both on national, regional, and local levels. This process of policy and plan formulation, however, needs to be coordinated closely by a central government agency to ensure consistency of these plans and policies and optimal use of the nation's scarce resources.

SECTION 2. National Economic and Development Authority. — The National Economic and Development Authority shall serve as an independent planning agency of the government.

SECTION 3. Powers and Functions of the Authority. — The powers and functions of the Authority are vested in the NEDA Board.

The Authority shall primarily be responsible for formulating continuing, coordinated and fully integrated social and economic policies, plans and programs, on the basis of the following:

(1) The State aims to achieve objectives of growth coupled with equity;

(2) Development leading to the attainment of the above mentioned goals is a multi-faceted process that calls for the coordination and integration of policies, plans, programs and projects of all sectors of society;

(3) In the formulation of basic policies, plans, programs and projects, there shall be maximum participation by and consultation with concerned private sector groups, community organizations and beneficiaries and local government units in order to ensure that priority needs are incorporated into such policies, plans, programs and projects;

(4) National plans shall be in fact the sum of nationally and regionally identified targets and strategies and locally formulated approaches to perceived local needs and priorities, carried out within the framework of national strategies;

(5) Major socio-economic policies, plans, programs and projects of different government agencies must be properly coordinated with the Authority at both the national and regional levels prior to their adoption, in order to ensure their consistency with established national priorities and coordination with other policies, plans, programs and projects of the government; and

(6) The linkage between development planning, programming and budgeting shall be of the highest priority in planning and budgeting activities.

The Authority, after due consultation with the private sector, community organizations and beneficiaries, local government units and appropriate public agencies, shall be responsible for studying, reviewing, formulating and recommending continuing, coordinated and fully integrated economic and development policies, plans and programs, including the formulation of annual and medium-term public investment programs, programming official development assistance in the form of grants and concessional loans from foreign governments and multilateral agencies and organizations and the monitoring and evaluation of plan implementation.

SECTION 4. Composition of the Authority. — The Authority shall be composed of two separate and distinct entities: the Board and the Secretariat.

CHAPTER 2 NEDA Board

SECTION 5. Composition of the NEDA Board. — The NEDA Board shall be composed of the following:

Chairman:

The President

Vice-Chairman:

Director-General of the NEDA Secretariat

Members:

• Executive Secretary

• Secretary of Finance

• Secretary of Trade & Industry

• Secretary of Agriculture

• Secretary of Environment & Natural Resources

• Secretary of Public Works and Highways

• Secretary of Budget and Management

• Secretary of Labor & Employment

• Secretary of Local Government

The President may, however, revise the membership of the NEDA Board whenever the same is deemed necessary for the effective performance of the Board's functions through an administrative or memorandum order.

SECTION 6. Meetings. — The NEDA Board shall meet at least once a month or as frequently as is necessary to discharge its responsibilities as called for by the President. When the President is unable to attend a meeting, the Director-General of the NEDA may preside as Chairman, in the absence of any Presidential preference.

The President however continues to have the power to designate from among the members of the NEDA Board the Chairman that can appropriately represent the President, to preside over specific meetings.

SECTION 7. National Economic Development Authority Inter-agency Committees. — To assist the NEDA Board in the performance of its functions, there are hereby created the following committees which shall hereafter be under the direct control of the NEDA Board and shall submit all their recommendations to the President for approval on matters involving their respective concerns. The Chairmen of these committees shall be designated by the President. The NEDA Board shall likewise determine where the technical staff of the said committees shall be based.

(1) Development Budget Coordination Committee (DBCC) — The DBCC, to be composed of the Director-General of the National Economic Development Authority Secretariat, the Executive Secretary and the Secretaries of Finance and of Budget and Management, shall have the following functions:

(a) Recommend for Presidential approval the level of the annual government expenditure program and the ceiling of government spending for economic and social development, national defense, general government and debt service;

(b) Recommend to the President the proper allocation of expenditures for each development activity between current operating expenditures and capital outlay; and

(c) Recommend to the President the amount set to be allocated for capital outlay under each development activity for the various capital or infrastructure projects.

(2) Investment Coordination Committee (ICC) — The ICC to be composed of the Director-General of the National Economic Development Authority Secretariat, the Executive Secretary, the Secretaries of Finance, Agriculture, Trade and Industry and of Budget and Management and the Governor of the Central Bank shall have the following functions:

(a) Evaluate the fiscal, monetary and balance of payments implications of major national projects and recommend to the President the timetable for the implementation of these projects on a regular basis; and

(b) Recommend to the President a domestic and foreign borrowing program updated each year; and subsequently submit to the President a status of the fiscal, monetary and balance of payments implications of major national projects.

(3) Committee on Social Development (SDC) — The SDC to be composed of the Director-General of the National Economic Development Authority Secretariat, the Executive Secretary, and the Secretaries of Education, Culture and Sports, Labor and Employment, Health, Local Government, Agrarian Reform, Agriculture and Social Welfare and Development shall have the following functions:

(a) Advise the President and the NEDA Board on matters concerning social development, including education, manpower, health and nutrition, population and family planning, housing, human settlements and the delivery of other social services;

(b) Coordinate the activities of government agencies concerned with social development; and

(c) Recommend to the President government policies, programs and projects on social development consistent with national development objectives and priorities.

(4) Committee on Infrastructure (INFRACOM) — the INFRACOM to be composed of the Director-General of the National Economic Development Authority Secretariat, the Executive Secretary, and the Secretaries of Public Works and Highways, Transportation and Communications, Finance, and Budget and Management shall have the following functions:

(a) Advise the President and the NEDA Board on matters concerning infrastructure development including highways, airports, seaports and shore protection; railways; power generation, transmission and distribution; telecommunications; irrigation, flood control and drainage; water supply; national buildings for government offices; hospitals, sanitation and related buildings; state colleges and universities, elementary and secondary school buildings; and other public works;

(b) Coordinate the activities of agencies, including government-owned or controlled corporations concerned with infrastructure development; and

(c) Recommend to the President government policies, programs and projects concerning infrastructure development consistent with national development objectives and priorities.

(5) Committee on Tariff and Related Matters (TRM) — The TRM to be composed of the Director-General of the National Economic Development Authority Secretariat, the Executive Secretary, the Secretaries of Trade and Industry, Foreign Affairs, Agriculture, Environment and Natural Resources and Budget and Management, the Governor of the Central Bank and the Chairman of the Tariff Commission shall have the following functions:

(a) Advise the President and the NEDA Board on Tariff and related matters, and on the effects on the country of various international developments;

(b) Coordinate agency positions and recommend national positions for international economic negotiations; and

(c) Recommend to the President a continuous rationalization program for the country's tariff structure.

CHAPTER 3 NEDA Secretariat

SECTION 8. The NEDA Secretariat. — The Secretariat of NEDA shall have the following functions:

(1) Serve as the research and technical support arm of the NEDA Board;

(2) Provide through its various organizational units, technical staff support and assistance, including the conduct of studies and development of policy measures and other recommendations, on the various aspects of the substantive functions of development planning and policy formulation, and coordination, evaluation and monitoring of plan implementation;

(3) Serve as the Secretariat of the NEDA Board; and

(4) Perform such other functions as may be assigned to it by the NEDA Board to achieve its goals and objectives.

SECTION 9. Structural Organization. — The NEDA Secretariat shall be composed of the Director-General, three (3) Deputy Directors-General, five (5) Assistant Directors-General, the National Development Office, the Regional Development Office, the Central Support Office and the Regional Offices.

SECTION 10. Director-General. — The Director-General shall head the Secretariat and shall likewise serve as Vice-Chairman of the NEDA Board. He shall be appointed by the President and shall carry the rank and title of Secretary of Socio-Economic Planning and shall be a member of the Cabinet.

As Chief Executive Officer, he shall exercise general supervision and control over its technical and administrative personnel.

SECTION 11. Deputy Directors-General. — The Director-General shall be assisted by three (3) Deputy Directors-General to be appointed by the President, one to be responsible for the National Development Office, one, for the Regional Development Office and one, for the Central Support Office.

SECTION 12. Assistant Directors-General. — The Director-General shall also be assisted by five (5) Assistant Directors-General to be appointed by the President, who shall be assigned to assist the Deputy Directors-General in their tasks of coordinating and supervising their respective Offices.

SECTION 13. National Development Office. — The National Development Office shall provide technical staff support as may be required by the NEDA Board in coordinating the formulation of national and sectoral policies, plans and programs; monitor macro-economic and sectoral performances; prepare the necessary economic reports; conduct economic and development studies on macro-level plans and policies; and perform such other appropriate planning tasks as may be assigned by the Director-General.

It shall be composed of the following:

(1) National Planning and Policy Staff;

(2) Agriculture Staff;

(3) Trade, Industry and Utilities Staff;

(4) Infrastructure Staff;

(5) Social Development Staff; and

(6) Public Investment Staff.

SECTION 14. Regional Development Office. — The Regional Development Office shall provide technical staff support as may be required by the implementing agencies in the regions; monitor regional and inter-regional development policies, plans and programs; prepare integrated reports on regional planning; conduct studies on regional development policies; and perform such other planning tasks as may be assigned by the Director-General.

It shall be composed of the following:

(1) Regional Development Coordination Staff;

(2) Project Monitoring Staff; and

(3) Regional Offices.

In each of the administrative regions, there shall be a regional office which shall be headed by a Regional Director who shall report to the Deputy Director-General for Regional Development Office. The Regional Director shall be appointed by the President.

SECTION 15. Central Support Office. — The Central Support Office shall be responsible for providing technical assistance and support services to the Secretariat's organizational units in the areas of development administration, internal management improvement, legal services, development information,administrative services, and perform such other support service tasks as may be assigned by the Director-General.

It shall be composed of the following:

(1) Management Staff;

(2) Legal Staff;

(3) Administrative Staff;

(4) Management Information System Staff; and

(5) Development Information Staff.

CHAPTER 4 Attached Agencies

SECTION 16. Retained Agencies. — The following agencies, currently attached to the Authority, shall continue to be so attached for purposes of supervision:

(1) Philippine Institute for Development Studies;

(2) Philippine National Volunteer Service Coordinating Agency; and

(3) Tariff Commission.

The Authority shall arrange for the transfer of the functions of the following agencies to the Regional Development Councils concerned or other agencies as may be appropriate:

(1) Kalinga Special Development Region;

(2) Laguna Lake Development Authority;

(3) Leyte Sab-A Basin Development Authority.

The National Council for Integrated Area Development (NACIAD) and the Central Visayas Regional Projects Office (CVRPO) are hereby transferred to the Authority which shall, within one (1) year from the date of effectivity of this Code, recommend their transfer to the appropriate department in conjunction with the Department of Budget and Management. The Authority shall further review the functions and activities of all other Integrated Area Development programs and projects and any other programs requiring multi-sectoral and/or multi-disciplinary approaches in order to recommend the appropriate disposition and supervision of the same.

The Authority shall furthermore review the mandate, objectives and functions of all development authorities in order to recommend such dispositions or revisions of their charters, as may be deemed advisable.

BOOK VI National Government Budgeting

CHAPTER 1 General Provisions

SECTION 1. Constitutional Policies on the Budget. — (1) All appropriations, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application, and private bills shall originate exclusively in the House of Representatives but the Senate may propose or concur with amendments.

(2) The Congress may not increase the appropriations recommended by the President for the operation of the Government as specified in the budget. The form, content and manner of preparation of the budget shall be prescribed by law.

(3) No provision or enactment shall be embraced in the general appropriations bill unless it relates specifically to some particular appropriation to which it relates.

(4) The procedures in approving appropriations for the Congress shall strictly follow the procedure for approving appropriations for other departments and agencies.

(5) A special appropriations bill shall specify the purpose for which it is intended, and shall be supported by funds actually available as certified by the National Treasurer or to be raised by a corresponding revenue proposal therein.

(6) No law shall be passed authorizing any transfer of appropriations. However, the President, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court and the heads of Constitutional Commissions may, by law, be authorized to augment any item in the general appropriations laws for their respective offices from savings in other items of their respective appropriations.

(7) Discretionary funds appropriated for particular official shall be disbursed only for public purposes to be supported by appropriate vouchers and subject to such guidelines as may be prescribed by law.

(8) If, by the end of any fiscal year, the Congress shall have failed to pass the general appropriations bill for the ensuing fiscal year, the general appropriations law for the preceding fiscal year shall be deemed reenacted and shall remain in force and effect until the general appropriations bill is passed by the Congress.

(9) Fiscal autonomy shall be enjoyed by the Judiciary, Constitutional Commissions, Office of the Ombudsman, Local Government and Commission on Human Rights.

SECTION 2. Definition of Terms. — When used in this Book:

(1) "Appropriation" refers to an authorization made by law or other legislative enactment, directing payment out of government funds under specified conditions or for specified purposes.

(2) "Allotment" refers to an authorization issued by the Department of the Budget to an agency, which allows it to incur obligations for specified amounts contained in a legislative appropriation.

(3) "Budget" refers to a financial plan required to be prepared pursuant to Section 16(1) , Article VIII of the Constitution, reflective of national objectives, strategies and programs.

(4) "Current operating expenditures" refers to appropriations for the purchase of goods and services for current consumption or for benefits expected to terminate within the fiscal year.

(5) "Capital outlay" or "capital expenditures" refers to an appropriation for the purchase of goods and services, the benefits of which extend beyond the fiscal year and which add to the assets of the Government, including investments in the capital of government-owned or controlled corporations and their subsidiaries.

(6) "Continuing appropriation" refers to an appropriation available to support obligations for a specified purpose or project, even when these obligations are incurred beyond the budget year.

(7) "Expected result" means service, product, or benefit that will accrue to the public, estimated in terms of performance measures or targets.

(8) "Fiscal year" refers to the period beginning with the first day of January and ending with the thirty-first day of December of each calendar year.

(9) The "Government" means the National Government, including the Executive, the Legislative and the Judicial Branches, and the Constitutional Commissions.

(10) "Department and agency" and "department or agency" include all departments, bureaus, offices, boards, commissions, courts, tribunals, councils, authorities, administrations, centers, institutes, state colleges and universities, and all other establishments and instrumentalities of the National Government as defined in the preceding paragraph.

(11) "Obligation" refers to an amount committed to be paid by the Government for any lawful act made by an authorized officer for and in behalf of the government.

(12) "Program" refers to the functions and activities necessary for the performance of a major purpose for which a government agency is established.

(13) "Project" means a component of a program covering a homogenous group of activities that results in the accomplishment of an identifiable output.

CHAPTER 2 Budget Policy and Approach

SECTION 3. Declaration of Policy. — It is hereby declared the policy of the State to formulate and implement a National Budget that is an instrument of national development, reflective of national objectives, strategies and plans. The budget shall be supportive of and consistent with the socio-economic development plan and shall be oriented towards the achievement of explicit objectives and expected results, to ensure that funds are utilized and operations are conducted effectively, economically and efficiently. The national budget shall be formulated within the context of a regionalized government structure and of the totality of revenues and other receipts, expenditures and borrowings of all levels of government and of government-owned or controlled corporations. The budget shall likewise be prepared within the context of the national long-term plan and of a long-term budget program.

SECTION 4. Planning and Budgeting Linkage. — The budget shall be formulated as an instrument for the attainment of national development goals and as part of the planning-programming-budgeting continuum. Levels of revenue, expenditure and debt shall be established in relation to macro-economic targets of growth, employment levels, and price level change, and shall be developed consistent with domestic and foreign debt, domestic credit and balance of payments objectives for the budget period. The aggregate magnitudes of the budget shall be determined in close consultation among the planning and fiscal agencies of government. Budgetary priorities shall be those specified in the approved national plans, keeping in mind the capability and performance of the implementing agencies concerned. Agency budget proposals shall explicitly state linkage to approved agency plans.

SECTION 5. National Resource Budget. — The finances of government shall be analyzed and determined as the aggregate of revenue, expenditure and debt of all units of government, including the national government and its agencies and instrumentalities, local government units and government-owned or controlled corporations. The national government budget shall be evolved within the framework of the total impact of government activity on the national economy. The budgets of government corporations and local governments shall be consistent in form and timing with that of the national government, to facilitate comprehensive evaluation.

SECTION 6. Regional Budgeting. — The budgets of national government agencies shall take into full and explicit consideration the goals, plans and requirements of their respective regional offices, in the interest of full government response to local thinking and initiative. The budget preparation process shall originate at regional and local levels, and shall be consolidated and reviewed by the central offices of the various national agencies. The regional development strategies and plans, including physical framework and resource-use plans, shall be considered in the preparation of the budget.

SECTION 7. Long Term Budgeting. — The annual budgets of the national government shall be prepared as an integral part of a long-term budget picture. The long-term economic and physical framework plans of government, multi-year requirements of approved programs and projects, organizational and personnel development strategies, and other commitments entered into or otherwise assumed by government shall be specified in the budget process.

SECTION 8. Development Projects. — The development process requires the implementation of major development projects of such size as to significantly affect the infrastructure program, debt ceilings, the balance of payments, domestic credit, and government expenditure levels. The budget process shall formally consider the timing of major national projects, in order to ensure the observance of established fiscal, monetary, international payments, and other constraints.

SECTION 9. Performance and Financial Review. — The analysis of agency operating performance, the evaluation of performance relative to costs incurred and the review of agency operating systems and procedures are inherent parts of the budget process. Agencies shall therefore design and implement (1) management information systems yielding both performance and financial information which will adequately monitor and control budget implementation, and (2) improvements in operating systems, procedures and practices, so as to ensure that the targets approved in budget authorization are in fact attained at minimum cost.

SECTION 10. Compensation and Position Classification. — The size of personnel services expenditures relative to the total budget and the number of agencies and personnel in government call for an effective national compensation and position classification policy. The Constitutional principle of a single compensation scheme for the government and its instrumentalities is one of the bases of the government budget process.

CHAPTER 3 Budget Preparation

SECTION 11. Submission of the Budget. — The President shall, in accordance with Section 22(1), article VII of the Constitution, submit within thirty (30) days from the opening of each regular session of the Congress as the basis for the preparation of the General Appropriations Act, a national government budget estimated receipts based on existing and proposed revenue measures, and of estimated expenditures.

The President shall include in the budget submission the proposed expenditure level of the Legislative and Judicial Branches and of Constitutional bodies, which shall have undergone the same process of evaluation and which shall have been subject to the same budgetary policies and standards applicable to agencies in the Executive Branch.

The President may transmit to the Congress from time to time, such proposed supplemental or deficiency appropriations as are, in his judgment, (1) necessary on account of laws enacted after the transmission of the Budget, or (2) otherwise needed in the public interest.

SECTION 12. Form and Content of the Budget. — The budget proposal of the President shall include current operating expenditures and capital outlays. It shall comprise such funds as may be necessary for the operation of the programs, projects and activities of the various departments and agencies. The proposed General Appropriations Act and other Appropriations Acts necessary to cover the budget proposals shall be submitted to the Congress to accompany the President's budget submission.

The budget shall be presented to the Congress in such form and content as may be approved by the President and may include the following:

(1) A budget message setting forth in brief the government's budgetary thrusts for the budget year, including their impact on development goals, monetary and fiscal objectives, and generally on the implications of the revenue, expenditure and debt proposals; and

(2) Summary financial statements setting forth:

(a) Estimated expenditures and proposed appropriations necessary for the support of the Government for the ensuing fiscal year, including those financed from operating revenues and from domestic and foreign borrowings;

(b) Estimated receipts during the ensuing fiscal year under laws existing at the time the budget is transmitted and under the revenue proposals, if any, forming part of the year's financing program;

(c) Actual appropriations, expenditures, and receipts during the last completed fiscal year;

(d) Estimated expenditures and receipts and actual or proposed appropriations during the fiscal year in progress;

(e) Statements of the condition of the National Treasury at the end of the last completed fiscal year, the estimated condition of the Treasury at the end of the fiscal year in progress and the estimated condition of the Treasury at the end of the ensuing fiscal year, taking into account the adoption of financial proposals contained in the budget and showing, at the same time, the unencumbered and unobligated cash resources;

(f) Essential facts regarding the bonded and other long-term obligations and indebtedness of the Government, both domestic and foreign, including identification of recipients of loan proceeds; and

(g) Such other financial statements and data as are deemed necessary or desirable in order to make known in reasonable detail the financial condition of the government.

SECTION 13. Budget Levels. — The ordinary income of government shall be used primarily to provide appropriations for current operations, except in case of a national emergency or serious financial stress, the existence of which has been duly proclaimed by the President.

The level of aggregate revenue expenditure and debt shall be jointly recommended to the President by the Department of Budget and Management, the Department of Finance, the National Economic and Development Authority and the Central Bank of the Philippines, acting within the Development Budget Coordination Committee of the National Economic and Development Authority.

No appropriations for current operations and capital outlays of the Government shall be proposed unless the amount involved is covered by the ordinary income, or unless it is supported by a proposal creating additional sources of funds or revenue, including those generated from domestic and foreign borrowings, sufficient to cover the same. Likewise, no appropriation for any expenditure, the amount of which is not covered by the estimated income from the existing sources of revenue or available current surplus, may be proposed, unless it is supported by a proposal creating an additional source of funds sufficient to cover the same.

Proposals creating additional sources of funds shall be prepared in the form of revenue bills.

The provisions of this section shall not be construed as impairing in any way the power of the Congress to enact revenue and appropriation bills, nor the authority of the President to propose special revenue and appropriation bills after the submission of the budget.

SECTION 14. Budget Estimates. — Each head of department, office or agency of the National Government, including the Legislative and Judicial Branches, and including government owned or controlled corporations, shall submit his request for appropriations to the Department of Budget in accordance with the budget calendar, format, and such rules and regulations as may be issued in implementation of this Decree.

The budget estimates of agencies include the following information:

(1) Objectives, functions, activities, programs and projects showing the general character and relative importance of the work to be accomplished or the services to be rendered, and the principal elements of cost involved;

(2) Linkage of the work and financial proposals to approved development plans;

(3) Estimated current operating expenditures and capital outlays, with comparative data for the preceding and current budget years;

(4) Identification by region, pursuant to policies on the regionalization of government operations;

(5) Financial sources, reflecting all revenues, proceeds of foreign and domestic borrowings, and other sources, particularly those which accrue to the General Fund;

(6) Contingent liabilities, including national government guarantees of obligations of government-owned or controlled corporations and their subsidiaries;

(7) Brief description of the major thrusts and priority programs and projects for the budget year, results expected for each budgetary program and project, the nature of work to be performed, estimated costs per unit of work measurement, including the various objects of expenditure for each project;

(8) Organization charts and staffing patterns indicating the list of existing and proposed positions with corresponding salaries, and proposals for position classification and salary changes, duly supported by adequate justification.

SECTION 15. Regional Budget. — The Budgets of national government agencies shall be prepared taking into full and careful consideration the opportunities and requirements specific to the various regions of the country. Where they are organized, regional offices shall originate agency budget proposals, in accordance with approved priorities and guidelines.

Agencies which are not regionalized shall nonetheless estimate the amounts planned to be spent for each region of the country.

The Secretary shall identify by region the expenditure programs of the national government agencies in the national government budget, and release funds to national government agencies in accordance with the approved regional distribution of expenditures, specifying the region of destination.

Departments and agencies shall sub-allot in full and without the imposition of reserves, the approved budget allocation of their various regional offices, except as may be authorized by the Secretary, in case realignment of expenditures prove to be necessary in the course of budget execution. The Secretary shall issue the rules and regulations needed to implement the provisions of this section.

SECTION 16. Budget Evaluation. — Agency proposals shall be reviewed on the basis of their own merits and not on the basis of a given percentage or peso increase or decrease from a prior year's budget level, or other similar rule of thumb that is not based on specific justification. Proposed activities, whether new or ongoing, shall be evaluated using a zero-base approach and on the basis of (1) relationship with the approved development plan, (2) agency capability as demonstrated by past performance, (3) complemental role with related activities of other agencies, and (4) other similar criteria. The realization of savings in a given budget year and the consequent non-utilization of funds appropriated or released to a given agency shall not be a negative factor in the budget evaluation for a subsequent year.

SECTION 17. Foreign-Assisted Projects. — The budgetary implications of foreign-assisted projects shall be explicitly considered at the time of project design and financing negotiation. The project study shall specify the cash flow requirements of the project, among others, for (1) payment of principal and interest, (2) peso component of capital costs and project preparation, (3) infrastructure and support facilities needed to be directly financed by government, (4) operating and other expenditures which will be ultimately required for General Fund support when the project is implemented, and (5) peso requirements needed as counterpart. The concurrence of the Department of Budget and Management shall be obtained with respect to peso requirements and implication on expenditure ceilings.

SECTION 18. Coordinating Bodies. — The budgets of coordinating agencies, councils, task forces, authorities, committees, or other similar bodies shall be limited to and used to fund only such planning, coordinating and monitoring functions as are assigned to it. Funds for implementation shall be budgeted and released to the line implementing agencies concerned: provided, that the budgets of coordinating bodies may include a lump-sum for purposes related to their assigned functions, which lump-sum shall be sub-allotted to implementing agencies and not used by the agency for its own operations: provided, further, that funds budgeted for a given agency falling within the jurisdiction of a coordinating body, may be subject to release upon approval by the coordinating agency of such release or of the agency's work program.

SECTION 19. Budgetary Requirements of Government-Owned or Controlled Corporations. — The internal operating budgets of government-owned or controlled corporations and of chartered institutions shall be approved by their respective governing boards in accordance with a budget calendar and format as may be approved by the President: Provided, that such budgets shall be subject to review and approval as part of the budget process in cases where national government budgetary support is needed, in terms of (a) capital or equity inputs, (b) operating contributions to support specific activities undertaken by the institution as part of its regular functions, and (c) guarantee of the national government for obligations or contracts entered into by the corporations: provided, further, that the submission of interim financial statements may be required by the Secretary.

SECTION 20. Tax and Duty Exemption. — All units of government, including government-owned or controlled corporations, shall pay income taxes, customs duties and other taxes and fees as are imposed under revenue law: provided, that organizations otherwise exempted by law for the payment of such taxes/duties may ask for a subsidy from the General Fund in the exact amount of taxes/duties due: Provided, further, that a procedure shall be established by the Secretary of Finance and the Secretary of the Budget, whereby such subsidies shall automatically be considered as both revenue and expenditure of the General Fund.

SECTION 21. Appropriation for Personal Services. — Appropriations for personal services shall be considered as included in the amount specified for each budgetary program and project of each department, bureau, office or agency, and shall not be itemized. The itemization of personal services shall be prepared by the Secretary for consideration and approval of the President as provided in Section 23 hereof: Provided, That the itemization of personal services shall be prepared for all agencies of the Legislative, Executive and Judicial Branches and the Constitutional bodies, except as may be otherwise approved by the President for positions concerned with national security matters.

SECTION 22. Department Approval of Proposed Appropriations. — No legislative proposal which, if enacted, would authorize subsequent appropriations, shall be transmitted to the President by any bureau or agency, without the prior approval of the Head of the Department concerned or by the Chairman or Chief Executive Officer of a Cabinet level body which coordinates the multi-sectoral formulation and implementation of a particular program of expenditure involving one or more departments. No legislative proposal involving the appropriation of funds shall be transmitted to the Congress without the approval of the President.

CHAPTER 4 Budget Authorization

SECTION 23. Content of the General Appropriations Act. — The General Appropriations Act shall be presented in the form of budgetary programs and projects for each agency of the government, with the corresponding appropriations for each program and project, including statutory provisions of specific agency or general applicability. The General Appropriations Act shall not contain any itemization of personal services, which shall be prepared by the Secretary after enactment of the General Appropriations Act, for consideration and approval of the President.

SECTION 24. Prohibition Against the Increase of Appropriation. — The Congress shall in no case increase the appropriation of any project or program of any department, bureau, agency or office of the Government over the amount submitted by the President in his budget proposal. In case of any reduction in the proposed appropriation for a project or program, a corresponding reduction shall be made in the total appropriation of the department, office or agency concerned and in the total of the General Appropriations Bill.

SECTION 25. Prohibition Against Enactment of Additional Special Provisions. — The Congress shall not add special provisions in the budget earmarking the use of appropriations for specific programs or activities nor shall it increase the amounts specified in special provisions, beyond those proposed by the President.

SECTION 26. Automatic Appropriations. — All expenditures for (1) personnel retirement premiums, government service insurance, and other similar fixed expenditures, (2) principal and interest on public debt, (3) national government guarantees of obligations which are drawn upon, are automatically appropriated:Provided, that no obligations shall be incurred or payments made from funds thus automatically appropriated except as issued in the form of regular budgetary allotments.

SECTION 27. Supplemental Appropriations. — All appropriation proposals shall be included and considered in the budget preparation process. After the President shall have submitted the Budget, no supplemental appropriation measure supported from existing revenue measures shall be passed by the Congress. However, supplemental or deficiency appropriations involving the creation of new offices, programs or activities may be enacted if accompanied and supported by new revenue sources.

SECTION 28. Reversion of Unexpended Balances of Appropriations, Continuing Appropriations. — Unexpended balances of appropriations authorized in the General Appropriation Act shall revert to the unappropriated surplus of the General Fund at the end of the fiscal year and shall not thereafter be available for expenditure except by subsequent legislative enactment: Provided, that appropriations for capital outlays shall remain valid until fully spent or reverted: Provided,further, that continuing appropriations for current operating expenditures may be specifically recommended and approved as such in support of projects whose effective implementation calls for multi-year expenditure commitments: Provided, finally, that the President may authorize the use of savings realized by an agency during a given year to meet non-recurring expenditures in a subsequent year.

The balances of continuing appropriations shall be reviewed as part of the annual budget preparation process and the preparation process and the President may approve upon recommendation of the Secretary, the reversion of funds no longer needed in connection with the activities funded by said continuing appropriations.

SECTION 29. Loan Proceeds. — Expenditures funded by foreign and domestic borrowings shall be included within the expenditure program of the agency concerned. Loan proceeds, whether in cash or in kind, shall not be used without the corresponding release of funds through a Special Budget as herein provided.

SECTION 30. Contingent Liabilities. — Government agencies, particularly government-owned or controlled corporations, shall periodically report to the Secretary of Finance and the Secretary of Budget on the status of obligations they have entered into and which are the subject of government guarantees.

SECTION 31. Liability for Unauthorized Printing Press Revisions. — It shall be unlawful for any person to make any unauthorized revision of any figure, text or provision in the General Appropriations Act and in the other budget documents during or in the process of the printing. Any unauthorized change made either by addition, modification or deletion, shall be null and void.

Persons who, in violation of this section, make any unauthorized revision in the budget documents, shall be criminally liable for falsification of legislative documents under the Revised Penal Code. When the offender is a government official or employee, he shall, in addition to criminal prosecution, be dismissed from the service.

CHAPTER 5 Budget Execution

SECTION 32. Use of Appropriated Funds. — All moneys appropriated for functions, activities, projects and programs shall be available solely for the specific purposes for which these are appropriated.

SECTION 33. Allotment of Appropriations. — Authorized appropriations shall be allotted in accordance with the procedure outlined hereunder:

(1) Appropriations authorized for any Department or agency of the Government may be made available for expenditure when the head for each Department or agency submits to the Secretary a request for allotment of funds showing the estimated amounts needed for each function, activity or purpose for which the funds are to be expended during the applicable allotment period. The form and the time of submission of the request for allotment showing the proposed quarterly allotments of the whole authorized appropriation for the department or agency, shall be prescribed by the Secretary.

(2) In the administration of the allotment system herein provided, each calendar year shall be divided into four quarterly allotment periods beginning, respectively, on the first day of January, April, July and October. In any case where the quarterly allotment period is found to be impractical or otherwise undesirable, the Secretary may prescribe a different period suited to the circumstances.

(3) Request for allotment shall be approved by the Secretary who shall ensure that expenditures are covered by appropriations both as to amount and purpose and who shall consider the probable needs of the department or agency for the remainder of the fiscal year or period for which the appropriation was made.

(4) At the end of every quarter, each department or agency shall report to the Secretary the current status of its appropriations, the cumulative allotments, obligations incurred or liquidated, total disbursements, unliquidated obligations and unexpended balances and the result of expended appropriations.

(5) Releases of funds appropriated for a given agency may be made to its regional offices if dictated by the need and urgency of regional activities.

(6) The Secretary shall have authority to modify or amend any allotment previously issued. In case he shall find at any time that the probable receipts from taxes or other sources of any fund will be less than anticipated and that as a consequence the amount available for the remainder of the term of the appropriations or for any allotment period will be less than the amount estimated or allotted therefor, he shall, with the approval of the President and after notice to the department or agency concerned, reduce the amount or amounts allotted so as to conform to the targeted budgetary goals.

(7) The Secretary shall maintain a control record showing quarterly by funds, accounts, and other suitable classifications, the amounts appropriated, the estimated revenues, the actual revenues or receipts, the amounts allotted and available for expenditures, the unliquidated obligations, actual balances on hand, and the unencumbered balance of the allotments for each department or agency of the Government.

SECTION 34. Program of Expenditure. — The Secretary of Budget shall recommend to the President the year's program of expenditure for each agency of the government on the basis of authorized appropriations. The approved expenditure program shall constitute the basis for fund release during the fiscal period, subject to such policies, rules and regulations as may be approved by the President.

SECTION 35. Special Budgets for Lump-Sum Appropriations. — Expenditures from lump-sum appropriations authorized for any purpose or for any department, office or agency in any annual General Appropriations Act or other Act and from any fund of the National Government, shall be made in accordance with a special budget to be approved by the President, which shall include but shall not be limited to the number of each kind of position, the designations, and the annual salary proposed for which an appropriation is intended. This provision shall be applicable to all revolving funds, receipts which are automatically made available for expenditure for certain specific purposes, aids and donations for carrying out certain activities, or deposits made to cover to cost of special services to be rendered to private parties. Unless otherwise expressly provided by law, when any Board, head of department, chief of bureau or office, or any other official, is authorized to appropriate, allot, distribute or spend any lump-sum appropriation or special, bond, trust, and other funds, such authority shall be subject to the provisions of this section.

In case of any lump-sum appropriation for salaries and wages of temporary and emergency laborers and employees, including contractual personnel, provided in any General Appropriation Act or other Acts, the expenditure of such appropriation shall be limited to the employment of persons paid by the month, by the day, or by the hour.

SECTION 36. Cash Budgets. — An operational cash budget shall be implemented to ensure the availability of cash resources for priority development projects and to establish a sound basis for determining the level, type and timing of public borrowings. The procedure, format, accounts, and other details necessary for the execution, monitoring and control aspects of the system shall be determined jointly by the Secretary of Finance, the Secretary of the Budget and the Chairman of the Commission on Audit.

SECTION 37. Creation of Appropriation Reserves. — The Secretary may establish reserves against appropriations to provide for contingencies and emergencies which may arise later in the calendar year and which would otherwise require deficiency appropriations.

The establishment of appropriation reserves shall not necessarily mean that such portion of the appropriation will not be made available for expenditure. Should conditions change during the fiscal year justifying the use of the reserve, necessary adjustments may be made by the Secretary when requested by the department, office or agency concerned.

SECTION 38. Suspension of Expenditure of Appropriations. — Except as otherwise provided in the General Appropriations Act and whenever in his judgment the public interest so requires, the President, upon notice to the head of office concerned, is authorized to suspend or otherwise stop further expenditure of funds allotted for any agency, or any other expenditure authorized in the General Appropriations Act, except for personal services appropriations used for permanent officials and employees.

SECTION 39. Authority to Use Savings in Appropriations to Cover Deficits. — Except as otherwise provided in the General Appropriations Act, any savings in the regular appropriations authorized in the General Appropriations Act for programs and projects of any department, office or agency, may, with the approval of the President, be used to cover a deficit in any other item of the regular appropriations: Provided, that the creation of new positions or increase of salaries shall not be allowed to be funded from budgetary savings except when specifically authorized by law: Provided, further, that whenever authorized positions are transferred from one program or project to another within the same department, office or agency, the corresponding amounts appropriated for personal services are also deemed transferred, without, however increasing the total outlay for personal services of the department, office or agency concerned.

SECTION 40. Certification of Availability of Funds. — No funds shall be disbursed, and no expenditures or obligations chargeable against any authorized allotment shall be incurred or authorized in any department, office or agency without first securing the certification of its Chief Accountant or head of accounting unit as to the availability of funds and the allotment to which the expenditure or obligation may be properly charged.

No obligation shall be certified to accounts payable unless the obligation is founded on a valid claim that is properly supported by sufficient evidence and unless there is proper authority for its incurrence. Any certification for a non-existent or fictitious obligation and/or creditor shall be considered void. The certifying official shall be dismissed from the service, without prejudice to criminal prosecution under the provisions of the Revised Penal Code. Any payment made under such certification shall be illegal and every official authorizing or making such payment, or taking part therein or receiving such payment, shall be jointly and severally liable to the government for the full amount so paid or received.

SECTION 41. Prohibition Against the Incurrence of Overdraft. — Heads of departments, bureaus, offices and agencies shall not incur nor authorize the incurrence of expenditures or obligations in excess of allotments released by the Secretary for their respective departments, offices and agencies. Parties responsible for the incurrence of overdrafts shall be held personally liable therefor.

SECTION 42. Adjustment of Appropriations for Reorganization. — When under authority of law, a function or an activity is transferred or assigned from one agency to another, the balances of appropriations which are determined by the head of such department to be available and necessary to finance or discharge the function or activity so transferred or assigned may, with the approval of the President, be transferred to and be made available for use by the agency to which said function or activity is transferred or assigned for the purpose for which said funds were originally available. Balances so transferred shall be credited to any applicable existing appropriation account or to new appropriation accounts which are hereby authorized to be established, and shall be merged with any fund already in the applicable existing or newly established appropriation account or accounts and thereafter accounted for as one fund.

The funding requirement of agencies reorganized in accordance with approved reorganization plans or reorganized pursuant to law enacted after the approval of the General Appropriations Act, are deemed appropriated and shall be available for expenditure as soon as the reorganization plans are approved. The Secretary of Budget is hereby authorized to make necessary adjustments in the appropriations to carry out the provisions of this section. The department head concerned, with the approval of the Secretary of Budget, is hereby authorized to make necessary salary adjustments resulting from final selection of personnel to fill the positions in the staffing patterns of reorganized agencies, to make necessary salary adjustments resulting from new appointments, promotions or salary increases, subject to the provisions of Presidential Decree No. 985.

SECTION 43. Liability for Illegal Expenditures. — Every expenditure or obligation authorized or incurred in violation of the provisions of this Code or of the general and special provisions contained in the annual General or other Appropriations Act shall be void. Every payment made in violation of said provisions shall be illegal and every official or employee authorizing or making such payment, or taking part therein, and every person receiving such payment shall be jointly and severally liable to the Government for the full amount so paid or received.

Any official or employee of the Government knowingly incurring any obligation, or authorizing any expenditure in violation of the provisions herein, or taking part therein, shall be dismissed from the service, after due notice and hearing by the duly authorized appointing official. If the appointing official is other than the President and should he fail to remove such official or employee, the President may exercise the power of removal.

SECTION 44. Accrual of Income to Unappropriated Surplus of the General Fund. — Unless otherwise specifically provided by law, all income accruing to the departments, offices and agencies by virtue of the provisions of existing laws, orders and regulations shall be deposited in the National Treasury or in the duly authorized depository of the Government and shall accrue to the unappropriated surplus of the General Fund of the Government: Provided, That amounts received in trust and from the business-type activities of government may be separately recorded and be disbursed in accordance with such rules and regulations as may be determined by the Permanent Committee created under this Act.

SECTION 45. Special, Fiduciary and Trust Funds. — Receipts shall be recorded as income of Special, Fiduciary or Trust Funds or Funds other than the General Fund, only when authorized by law and following such rules and regulations as may be issued by a Permanent Committee consisting of the Secretary of Finance as Chairman, and the Secretary of the Budget and the Chairman, Commission on Audit, as members. The same Committee shall likewise monitor and evaluate the activities and balances of all Funds of the national government other than the General fund and may recommend for the consideration and approval of the President, the reversion to the General fund of such amounts as are (1) no longer necessary for the attainment of the purposes for which said Funds were established, (2) needed by the General fund in times of emergency, or (3) violative of the rules and regulations adopted by the Committee: Provided, that the conditions originally agreed upon at the time the funds were received shall be observed in case of gifts or donations or other payments made by private parties for specific purposes.

SECTION 46. Service Fees and Honoraria. — Agencies are authorized to charge fees, including honoraria and other reasonable allowances as compensation for consultation, seminars or training programs, or technical services rendered to other government agencies or private parties. Such fees or honoraria shall be recorded as income of the government and subject to the usual accounting, auditing and other pertinent requirements.

SECTION 47. Administration of Lump-Sum Funds. — The Department of Budget shall administer the Lump-Sum Funds appropriated in the General Appropriations Act, except as otherwise specified therein, including the issuance of Treasury Warrants covering payments to implementing agencies or other creditors, as may be authorized by the President.

SECTION 48. Cost Reduction. — Each head of a department, bureau, office or agency shall implement a cost reduction program for his department, bureau, office or agency for the purpose of reducing cost of operations and shall submit to the President reports on the results of the implementation thereof. The Department of Budget shall provide technical and other necessary assistance in the design and implementation of cost reduction activities. An incentive award not exceeding one month's salary may be granted to any official or employee whose suggestion for cost reduction has been adopted and shall have actually resulted in cost reduction, payable from the savings resulting therefrom.

SECTION 49. Authority to Use Savings for Certain Purposes. — Savings in the appropriations provided in the General Appropriations Act may be used for the settlement of the following obligations incurred during a current fiscal year or previous fiscal years as may be approved by the Secretary in accordance with rules and procedures as may be approved by the President:

(1) Claims of officials, employees and laborers who died or were injured in line of duty, including burial expenses as authorized under existing law;

(2) Commutation of terminal leaves of employees due to retirement, resignation or separation from the service through no fault of their own in accordance with the provisions of existing law, including unpaid claims for commutation of maternity leave of absence;

(3) Payment of retirement gratuities or separation pay of employees separated from the service due to government reorganization;

(4) Payment of salaries of employees who have been suspended or dismissed as a result of administrative or disciplinary action, or separated from the service through no fault of their own and who have been subsequently exonerated and reinstated by virtue of decisions of competent authority;

(5) Cash awards to deserving officials and employees in accordance with civil service law;

(6) Salary adjustments of officials and employees as a result of classification action under, and implementation of, the provisions of the Compensation and Position Classification Act, including positions embraced under the Career Executive Service;

(7) Peso support to any undertaking that may be entered into by the government with international organizations, including administrative and other incidental expenses;

(8) Covering any deficiency in peso counterpart fund commitments for foreign-assisted projects, as may be approved by the President;

(9) Priority activities that will promote the economic well-being of the nation, including food production, agrarian reform, energy development, disaster relief, and rehabilitation.

(10) Repair, improvement and renovation of government buildings and infrastructure and other capital assets damaged by natural calamities;

(11) Expenses in connection with official participation in trade fairs, civic parades, celebrations, athletic competitions and cultural activities, and payment of expenses for the celebration of regular or special official holidays;

(12) Payment of obligations of the government or any of its departments or agencies as a result of final judgment of the Courts; and

(13) Payment of valid prior year's obligations of government agencies with any other government office or agency, including government-owned or controlled corporations.

SECTION 50. Appointment of Budget Officers. — No person shall be appointed as budget officer in any department, bureau, office or agency unless he meets the qualification and training requirements established by the Budget Commission as prerequisite to appointment, in addition to other qualification requirements prescribed by the Civil Service Commission for the position.

CHAPTER 6 Budget Accountability

SECTION 51. Evaluation of Agency Performance. — The President, through the Secretary shall evaluate on a continuing basis the quantitative and qualitative measures of agency performance as reflected in the units of work measurement and other indicators of agency performance, including the standard and actual costs per unit of work.

SECTION 52. Budget Monitoring and Information System. — The Secretary of Budget shall determine accounting and other items of information, financial or otherwise, needed to monitor budget performance and to assess effectiveness of agencies' operations and shall prescribe the forms, schedule of submission, and other components of reporting systems, including the maintenance of subsidiary and other records which will enable agencies to accomplish and submit said information requirements: Provided, that the Commission on Audit shall, in coordination with the Secretary of Budget, issue rules and regulations that may be applicable when the reporting requirements affect accounting functions of agencies: Provided, further, that the applicable rules and regulations shall be issued by the Commission on Audit within a period of thirty (30) days after the Department of Budget and Management prescribes the reporting requirements.

SECTION 53. Monitoring of Expenditures. — Expenditures of national government agencies shall be recorded so as to identify expenditures as classified into such categories as may be determined by the Department of Budget and Management, including but not limited to the following: (1) agency incurring the obligation, (2) program, project and activity, (3) object of expenditure, including personal services, operating and maintenance expenditures, equipment, and capital outlays, (4) region or locality of use, (5) economic or functional classification of the expenditure, (6) obligational authority and cash transactions arising from fund releases, and such other classifications as may be necessary for the budget process. The Secretary of Budget shall determine the data and information requirements thus needed and the Commission on Audit shall formulate the accounting rules and regulations, including changes in the Chart of Accounts and the general or subsidiary accounting records, as may be necessary to generate the desired data and information. The Chief Accountants of agencies and where necessary, accountants of regional offices, shall submit the data needed by the Department of Budget and Management in accordance with such rules and regulations as it may formulate.

SECTION 54. Standard Costs. — The Department of Budget and Management shall develop standard costs for duly approved units of work measurement for each agency's budgetary projects or activities. These standard costs shall be compared with actual unit costs and utilized in the evaluation of agency budgetary performance.

SECTION 55. Review of Budgetary Programs. — The Secretary of Budget shall conduct a continuing review of the budgetary program and project structure of each department, office or agency, the result of which shall be the basis for modifying or amending such structure for incorporation in the President's budget proposals to the Congress.

SECTION 56. Semi-Annual Report on Accomplishments of Government Agencies. — The heads of departments, bureaus, offices or agencies of the government shall submit a semi-annual report of their accomplishments, both work and financial results, in accordance with such content and format as may be prescribed by the Secretary. These reports shall be designed and use for the purpose of monitoring the efficiency and effectiveness with which budgeted funds are being utilized, and generally for verifying the attainment of goals established in the budget process.

SECTION 57. Failure to Submit Reports. — Failure on the part of agency heads, chief accountants, budget officers, cashiers, disbursing officers,administrative and personnel officers, and other responsible officers of departments, bureaus, offices and agencies to submit trial balances, work and financial plans, special budgets, reports of operation and income, plans, special budgets, reports of operation and income, current agency plantilla of personnel and such other reports as may be necessary and required by the Department of Budget shall automatically cause the suspension of payment of their salaries until they have complied with the requirements of the Department of Budget. No appropriation authorized in the General Appropriations Act shall be made available to pay the salary of any official or employee who violates the provisions of this section, in addition to any disciplinary action that may be instituted against such erring official or employee.

CHAPTER 7 Expenditure of Appropriated Funds

SECTION 58. Contracting of Activities. — Agencies may enter into contracts with individuals or organizations, both public and private, subject to provisions of law and applicable guidelines approved by the President: Provided, that contracts shall be for specific services which cannot be provided by the regular staff of the agency, shall be for a specific period of time, and shall have a definite expected output: Provided, further, That implementing, monitoring and other regular and recurring agency activities shall not be contracted for, except for personnel hired on an individual and contractual basis and working as part of the organization, or as otherwise may be approved by the President: Provided, finally, That the cost of contracted services shall not exceed the amount that would otherwise be incurred had the work been performed by regular employees of government, except as may be authorized under this section.

SECTION 59. Authority to Receive Additional Compensation. — Officials and employees who are duly appointed by competent authority to any position in another government office or agency in a concurrent capacity, may, in the discretion of the President, be allowed to receive additional compensation in the form of allowance or honorarium at such rates he shall fix and subject to such conditions as he may prescribe. Such additional compensation shall be paid from the appropriations of the office or agency benefitting from the concurrent service.

SECTION 60. Restrictions on Salary Increases. — No portion of the appropriations provided in the General Appropriations Act shall be used for payment of any salary increase or adjustment unless specifically authorized by law or appropriate budget circular nor shall any appropriation for salaries authorized in the General Appropriations Act, save as otherwise provided for under the Compensation and Position Classification Act, be paid unless the positions have been classified by the Budget Commission.

SECTION 61. Merit Increases. — The budgets of national government agencies may provide for a lump-sum for merit increases, subject to such terms and conditions as may be approved by the President. Such lump-sum shall be used to fund salary increases approved by the head of agency in recognition of meritorious performance: Provided, That the Civil Service Commission and the Department of Budget shall jointly issue the rules and regulations governing the granting of such merit increases.

SECTION 62. Salary for Substitutionary Service. — When an official or employee is issued a duly approved appointment in a temporary or acting capacity to take the place and perform the duties of another who is temporarily absent from his post with pay, savings in the appropriations of the department, bureau or office may be used for the payment of his salary or differential, subject to the approval of the Secretary.

SECTION 63. Additional Compensation for Overtime Service. — Officials and employees of the National Government, when required to work overtime after regular working hours during ordinary days, during half-day sessions, or on Saturdays, Sundays and holidays, by the heads of departments concerned, to finish work that must be completed within a specified time, may be paid overtime compensation from any unexpected balance of the appropriation for salaries and wages authorized in the General Appropriations Act and under such guidelines as may be issued by the President.

SECTION 64. Compensation of Persons Receiving Pension. — A person receiving life pension, annuity, or gratuity as a result of service in the national government or any local government unit, or from any government-owned or controlled corporation, who is reappointed to any position, the appropriation for the salary of which is provided from funds of the office, shall have the option to receive either the compensation for the position, or the pension, gratuity or annuity, but in no case shall he receive both.

SECTION 65. Prohibition of Voluntary Service. — Unless otherwise specifically approved by the President, no person shall be employed or appointed in the government under the guise of voluntary service, with compensation below the authorized hiring rate for the position, but with privilege of transportation and/or representation expenses in any form, or of receiving per diems, allowances, honoraria, subsistence, quarters in cash or in kind, payable from government funds:Provided, That the application of this provisions may be waived to authorize voluntary service in the Armed Forces of the Philippines or in connection with relief operations.

SECTION 66. Additional Compensation for School Faculty Members. — Professors, instructors, teachers, or members of the faculty of government schools, colleges and universities, when required to teach more than their regular teaching loads may be paid additional compensation not exceeding seventy-five percentum of their basic salary.

SECTION 67. Laundry. — At the discretion of the department head concerned, any official or employee of the national government serving in any hospital, penal institution, or other similar institution, who is required to wear a uniform during the performance of his duties, may be granted laundry allowance in kind, or which may be commuted at such rates as may be authorized by the Department of Budget.

SECTION 68. Hazard Pay. — Upon recommendation of the department head concerned and approval of the Secretary, hazard pay may be allowed to employees who are actually assigned to danger or strife-torn areas, disease-infested places, or in distressed or isolated stations and camps, which expose them to great danger of contagion or peril to life. Such hazard pay shall be paid from savings of the department concerned at such rates, terms and conditions as the Secretary may prescribe.

SECTION 69. Subsistence. — No official or employee of the national government shall be given subsistence, the cost of which is payable from any fund, except the following and only when an appropriation therefor is specifically provided:

(1) Marine officers, engineers and crew of government vessels, launches, and motorboats, who shall take their meals on the mess when aboard the said vessels, launches, or motorboats;

(2) Lightkeepers and other employees in light stations duly authorized by the head of the department to receive subsistence, who shall be furnished raw canned, or preserved food supplies;

(3) Officials and employees who are required to render service within the premises of hospitals, penal institutions, leper institutions, military installations, and other similar institutions, for a continuous period that includes meal time, may be allowed full subsistence when required to live in said premises to make their services available at any and all times;

(4) Laborers temporarily fielded to isolated or unsettled districts shall be furnished the usual rations or the equivalent in cash, at the expense of the government.

In hospitals and leper institutions where there are no mess halls or whenever these are inadequate, personnel entitled to subsistence allowance in kind may commute such subsistence upon request of the personnel concerned subject to the approval of the department head at authorized rates chargeable against the appropriation for supplies and materials authorized in the General Appropriations Act.

SECTION 70. Subsistence of Crew of Government Vessels. — The subsistence allowance for the officers and crew of the coast guard and revenue cutters and lighthouse tenders and other large vessels operated by the Government shall be spent for conducting a mess under the charge and administration of one or more members of the complement in each vessel to be designated by the corresponding head of department, and in accordance with regulations to be issued by him. The person or persons so designated shall keep an account of the advances of funds received and expenditures made therefrom for the operation of the mess and shall render such report to the corresponding Accounting Officer promptly at the end of each month.

SECTION 71. Furnished Quarters. — When the position of any official or employee is provided with "furnished quarters", such official or employee shall be entitled to the use of such government-owned furniture and equipment as are necessary for his board and lodging and those for his family including children below twenty-one years of age.

SECTION 72. Per Diems of Government Officials and Employees. — When a government official or employee is authorized to travel on official business outside of his permanent station, he shall be entitled to per diems to cover his board and lodging in accordance with his schedule: Provided, That in addition to per diems, the official or employee may be entitled to transportation expenses in going to and coming from his destination and to a daily allowance while in the field:Provided, further, That officials and employees on travel status whose expenses for board and lodging are paid directly or indirectly by government may not be entitled to receive the per diems and allowances corresponding to such payments.

Department secretaries, heads of Constitutional bodies, undersecretaries and all other positions of equivalent rank are authorized the reimbursement of actual expenses supported by receipts, within such limits as may be imposed under the provisions of this section.

Officials and employees authorized to travel abroad may be granted clothing allowance: Provided, That no official or employee shall be granted such clothing allowance oftener than once every twenty-four (24) months.

The rates of per diems and other allowances as authorized in this section shall be determined by the President. The rates may be changed from time to time upon recommendation of a Travel Rates Committee which is hereby created, consisting of the Secretary of Budget as Chairman and the Secretary of Foreign Affairs, the Secretary of Tourism and the Chairman, Commission on Audit, or their representatives, as members.

The Committee shall review travel rates and shall recommend to the President for consideration and approval modification in rates and policy when found to be warranted by actual domestic or foreign travel costs, as the case may be.

Government-owned or controlled corporations shall observe the rates established under this section: Provided, That profit-making corporations may adopt their own scales as may be provided by law. The Travel Rates Committee shall issue the necessary rules and regulations to enforce the provisions of this section.

SECTION 73. Additional Conditions for Payment of Travel Expenses. — When travel is done by water and subsistence is not included in the transportation cost, the amount actually and necessarily spent for subsistence during such travel time shall be paid, and no per diems shall be allowed in lieu thereof.

Per diems and travel allowances shall not be granted to members of field parties or others for whom subsistence and allowances in kind are supplied or other special provision made to cover travel expenses.

The travel expenses of a government official or employee who is assigned to render a special service to any private person or entity, the expenses for which are payable by the latter, shall be paid from a deposit which the private party shall be required to make before the performance of the special service is commenced, subject to the limitations and requirements herein provided for travel expenses payable from government funds.

No official or employee of the Government who remains temporarily at one station for a period longer than one (1) month shall be paid per diems in excess of one (1) month except upon the approval of the head of department and, in case his temporary stay in any one place exceeds three (3) months, payment of per diems in excess of three (3) months shall be made only upon the previous approval of the Secretary.

SECTION 74. Transportation of Members of Family of an Employee Transferred from One Station to Another. — Whenever, due to the exigencies of the service and not at his own request, an official or employee is transferred from one station to another, said official or employee and his spouse and children below twenty-one years of age shall be entitled to transportation and freight for reasonable and necessary baggage and household effects, at the expense of the Government, to be paid from the appropriation for traveling expenses of the bureau or office concerned.

SECTION 75. Purchase, Use, Operation and Maintenance of Motor Transport Equipment. — No appropriation for equipment authorized in the General Appropriations Act shall be used directly or indirectly for the purchase of automobiles, jeeps, jitneys, station wagons, motorcycles, trucks, launches, speed-boats, airplanes, helicopters and other types of motor transport equipment unless otherwise specifically authorized by the President.

All departments, bureaus, offices and agencies authorized to purchase motor transport equipment including those acquired through donations, gifts or gratuitous title are likewise authorized to use, operate and maintain them for purposes of carrying out the official functions and activities of the agency. These motor vehicles shall be used strictly for official business, bear government plates only, and after office hours to be kept in garage provided therefor by the office or agency to which they belong, except, when in use for official business outside office hours. The President, however, may authorize exceptions from these provisions for officials of government who work under extended hours or whose activities call for special security arrangements. Any violation of the provisions of this section shall subject the erring official or employee to administrative disciplinary action and he shall be personally liable for any loss or damage caused to the government or third persons.

The Commission on Audit shall issue rules and regulations governing the use, operation and maintenance of government motor transport equipment.

SECTION 76. Limitation of Rental of Motor Vehicles. — No appropriations authorized in the General Appropriations Act shall be used for renting motor transport equipment for a continuous period of more than fifteen days, except as may be authorized by the Secretary.

SECTION 77. Limitation of Purchase of Supplies, Materials, and Equipment Spare Parts. — Except as otherwise provided in the General Appropriations Act, the stock on hand of supplies, materials and equipment spare parts, acquired through ordinary and emergency purchase, shall at no time exceed normal three-month requirements, subject to the pertinent rules and regulations issued by competent authority: Provided, That department heads may approve the build-up of stocks on hand of critical supplies and materials, in anticipation of cost increases or requirements of a national emergency, and specifying maximum quantities of individual items, but in no case shall these stocks exceed more than one year's supply, unless otherwise approved by the President.

SECTION 78. Purchase of Locally Manufactured Products. — All appropriations for the purchase of equipment, supplies and materials authorized in the General Appropriations Act shall be available only for locally manufactured equipment; parts, accessories, medicines and drugs, supplies and materials, except when none is available in the market or when the price of the locally manufactured article exceed those determined by the Flag Law.

SECTION 79. Availability of Appropriations for Rental of Building and Grounds. — Any appropriation authorized in any Act for rental of buildings and grounds for any department, bureau, office or agency shall be available for expenditure only when authorized by the department head concerned. Such appropriation may also be used for lease-purchase arrangements.

With the concurrence of the Secretary of Budget and Management and the Secretary of Finance, the head of the department may contract with any government financial institution for loans intended for the acquisition of land for the construction of an office building for any of the agencies under the department. Annual amortization of the loans shall be taken from the appropriation for rental authorized under any Act for the department, bureau or office concerned.

SECTION 80. Misuse of Government Funds and Property. — Any public official or employee who shall apply any government fund or property under his administration or control to any use other than for which such fund or property is appropriated by laws, shall suffer the penalty imposed under the appropriate penal laws.

BOOK VII Administrative Procedure

CHAPTER 1 General Provisions

SECTION 1. Scope. — This Book shall be applicable to all agencies as defined in the next succeeding section, except the Congress, the Judiciary, the Constitutional Commissions, military establishments in all matters relating exclusively to Armed Forces personnel, the Board of Pardons and Parole, and state universities and colleges.

SECTION 2. Definitions. — As used in this Book:

(1) "Agency" includes any department, bureau, office, commission, authority or officer of the National Government authorized by law or executive order to make rules, issue licenses, grant rights or privileges, and adjudicate cases; research institutions with respect to licensing functions; government corporations with respect to functions regulating private right, privileges, occupation or business; and officials in the exercise of disciplinary power as provided by law.

(2) "Rule" means any agency statement of general applicability that implements or interprets a law, fixes and describes the procedures in, or practice requirements of, an agency, including its regulations. The term includes memoranda or statements concerning the internal administration or management of an agency not affecting the rights of, or procedure available to, the public.

(3) "Rate" means any charge to the public for a service open to all and upon the same terms, including individual or joint rates, tolls, classifications, or schedules thereof, as well as commutation, mileage, kilometerage and other special rates which shall be imposed by law or regulation to be observed and followed by any person.

(4) "Rule making" means an agency process for the formulation, amendment, or repeal of a rule.

(5) "Contested case" means any proceeding, including licensing, in which the legal rights, duties or privileges asserted by specific parties as required by the Constitution or by law are to be determined after hearing.

(6) "Person" includes an individual, partnership, corporation, association, public or private organization of any character other than an agency.

(7) "Party" includes a person or agency named or admitted as a party, or properly seeking and entitled as of right to be admitted as a party, in any agency proceeding; but nothing herein shall be construed to prevent an agency from admitting any person or agency as a party for limited purposes.

(8) "Decision" means the whole or any part of the final disposition, not of an interlocutory character, whether affirmative, negative, or injunctive in form, of an agency in any matter, including licensing, rate fixing and granting of rights and privileges.

(9) "Adjudication" means an agency process for the formulation of a final order.

(10) "License" includes the whole or any part of any agency permit, certificate, passport, clearance, approval, registration, charter, membership, statutory exemption or other form of permission, or regulation of the exercise of a right or privilege.

(11) "Licensing" includes agency process involving the grant, renewal, denial, revocation, suspension, annulment, withdrawal, limitation, amendment, modification or conditioning of a license.

(12) "Sanction" includes the whole or part of a prohibition, limitation or other condition affecting the liberty of any person; the withholding of relief; the imposition of penalty or fine; the destruction, taking, seizure or withholding of property; the assessment of damages, reimbursement, restitution, compensation, cost, charges or fees; the revocation or suspension of license; or the taking of other compulsory or restrictive action.

(13) "Relief" includes the whole or part of any grant of money, assistance, license, authority, privilege, exemption, exception, or remedy; recognition of any claim, right, immunity, privilege, exemption or exception; or taking of any action upon the application or petition of any person.

(14) "Agency proceeding" means any agency process with respect to rule-making, adjudication and licensing.

(15) "Agency action" includes the whole or part of every agency rule, order, license, sanction, relief or its equivalent or denial thereof.

CHAPTER 2 Rules and Regulations

SECTION 3. Filing. — (1) Every agency shall file with the University of the Philippines Law Center three (3) certified copies of every rule adopted by it. Rules in force on the date of effectivity of this Code which are not filed within three (3) months from that date shall not thereafter be the basis of any sanction against any party or persons.

(2) The records officer of the agency, or his equivalent functionary, shall carry out the requirements of this section under pain of disciplinary action.

(3) A permanent register of all rules shall be kept by the issuing agency and shall be open to public inspection.

SECTION 4. Effectivity. — In addition to other rule-making requirements provided by law not inconsistent with this Book, each rule shall become effective fifteen (15) days from the date of filing as above provided unless a different date is fixed by law, or specified in the rule in cases of imminent danger to public health, safety and welfare, the existence of which must be expressed in a statement accompanying the rule. The agency shall take appropriate measures to make emergency rules known to persons who may be affected by them.

SECTION 5. Publication and Recording. — The University of the Philippines Law Center shall:

(1) Publish a quarterly bulletin setting forth the text of rules filed with it during the preceding quarter; and

(2) Keep an up-to-date codification of all rules thus published and remaining in effect, together with a complete index and appropriate tables.

SECTION 6. Omission of Some Rules. — (1) The University of the Philippines Law Center may omit from the bulletin or the codification any rule if its publication would be unduly cumbersome, expensive or otherwise inexpedient, but copies of that rule shall be made available on application to the agency which adopted it, and the bulletin shall contain a notice stating the general subject matter of the omitted rule and new copies thereof may be obtained.

(2) Every rule establishing an offense or defining an act which, pursuant to law is punishable as a crime or subject to a penalty shall in all cases be published in full text.

SECTION 7. Distribution of Bulletin and Codified Rules. — The University of the Philippines Law Center shall furnish one (1) free copy each of every issue of the bulletin and of the codified rules or supplements to the Office of the President, Congress, all appellate courts and the National Library. The bulletin and the codified rules shall be made available free of charge to such public officers or agencies as the Congress may select, and to other persons at a price sufficient to cover publication and mailing or distribution costs.

SECTION 8. Judicial Notice. — The court shall take judicial notice of the certified copy of each rule duly filed or as published in the bulletin or the codified rules.

SECTION 9. Public Participation. — (1) If not otherwise required by law, an agency shall, as far as practicable, publish or circulate notices of proposed rules and afford interested parties the opportunity to submit their views prior to the adoption of any rule.

(2) In the fixing of rates, no rule or final order shall be valid unless the proposed rates shall have been published in a newspaper of general circulation at least two (2) weeks before the first hearing thereon.

(3) In case of opposition, the rules on contested cases shall be observed.

CHAPTER 3 Adjudication

SECTION 10. Compromise and Arbitration. — To expedite administrative proceedings involving conflicting rights or claims and obviate expensive litigations, every agency shall, in the public interest, encourage amicable settlement, compromise and arbitration.

SECTION 11. Notice and Hearing in Contested Cases. — (1) In any contested case all parties shall be entitled to notice and hearing. The notice shall be served at least five (5) days before the date of the hearing and shall state the date, time and place of the hearing.

(2) The parties shall be given opportunity to present evidence and argument on all issues. If not precluded by law, informal disposition may be made of any contested case by stipulation, agreed settlement or default.

(3) The agency shall keep an official record of its proceedings.

SECTION 12. Rules of Evidence. — In a contested case:

(1) The agency may admit and give probative value to evidence commonly accepted by reasonably prudent men in the conduct of their affairs.

(2) Documentary evidence may be received in the form of copies or excerpts, if the original is not readily available. Upon request, the parties shall be given opportunity to compare the copy with the original. If the original is in the official custody of a public officer, a certified copy thereof may be accepted.

(3) Every party shall have the right to cross-examine witnesses presented against him and to submit rebuttal evidence.

(4) The agency may take notice of judicially cognizable facts and of generally cognizable technical or scientific facts within its specialized knowledge. The parties shall be notified and afforded an opportunity to contest the facts so noticed.

SECTION 13. Subpoena. — In any contested case, the agency shall have the power to require the attendance of witnesses or the production of books, papers, documents and other pertinent data, upon request of any party before or during the hearing upon showing of general relevance. Unless otherwise provided by law, the agency may, in case of disobedience, invoke the aid of the Regional Trial Court within whose jurisdiction the contested case being heard falls. The Court may punish contumacy or refusal as contempt.

SECTION 14. Decision. — Every decision rendered by the agency in a contested case shall be in writing and shall state clearly and distinctly the facts and the law on which it is based. The agency shall decide each case within thirty (30) days following its submission. The parties shall be notified of the decision personally or by registered mail addressed to their counsel of record, if any, or to them.

SECTION 15. Finality of Order. — The decision of the agency shall become final and executory fifteen (15) days after the receipt of a copy thereof by the party adversely affected unless within that period an administrative appeal or judicial review, if proper, has been perfected. One motion for reconsideration may be filed, which shall suspend the running of the said period.

SECTION 16. Publication and Compilation of Decisions. — (1) Every agency shall publish and make available for public inspection all decisions or final orders in the adjudication of contested cases.

(2) It shall be the duty of the records officer of the agency or his equivalent functionary to prepare a register or compilation of those decisions or final orders for use by the public.

SECTION 17. Licensing Procedure. — (1) When the grant, renewal, denial or cancellation of a license is required to be preceded by notice and hearing, the provisions concerning contested cases shall apply insofar as practicable.

(2) Except in cases of willful violation of pertinent laws, rules and regulations or when public security, health, or safety require otherwise, no license may be withdrawn, suspended, revoked or annulled without notice and hearing.

SECTION 18. Non-expiration of License. — Where the licensee has made timely and sufficient application for the renewal of a license with reference to any activity of a continuing nature, the existing license shall not expire until the application shall have been finally determined by the agency.

CHAPTER 4 Administrative Appeal in Contested Cases

SECTION 19. Appeal. — Unless otherwise provided by law or executive order, an appeal from a final decision of the agency may be taken to the Department head.

SECTION 20. Perfection of Administrative Appeals. — (1) Administrative appeals under this Chapter shall be perfected within fifteen (15) days after receipt of a copy of the decision complained of by the party adversely affected, by filing with the agency which adjudicated the case a notice of appeal, serving copies thereof upon the prevailing party and the appellate agency, and paying the required fees.

(2) If a motion for reconsideration is denied, the movant shall have the right to perfect his appeal during the remainder of the period for appeal, reckoned from receipt of the resolution of denial. If the decision is reversed on reconsideration, the aggrieved party shall have fifteen (15) days from receipt of the resolution of reversal within which to perfect his appeal.

(3) The agency shall, upon perfection of the appeal, transmit the records of the case to the appellate agency.

SECTION 21. Effect of Appeal. — The appeal shall stay the decision appealed from unless otherwise provided by law, or the appellate agency directs execution pending appeal, as it may deem just, considering the nature and circumstances of the case.

SECTION 22. Action on Appeal. — The appellate agency shall review the records of the proceedings and may, on its own initiative or upon motion, receive additional evidence.

SECTION 23. Finality of Decision of Appellate Agency. — In any contested case, the decision of the appellate agency shall become final and executory fifteen (15) days after the receipt by the parties of a copy thereof.

SECTION 24. Hearing Officers. — (1) Each agency shall have such number of qualified and competent members of the base as hearing officers as may be necessary for the hearing and adjudication of contested cases.

(2) No hearing officer shall engage in the performance of prosecuting functions in any contested case or any factually related case.

SECTION 25. Judicial Review. — (1) Agency decisions shall be subject to judicial review in accordance with this chapter and applicable laws.

(2) Any party aggrieved or adversely affected by an agency decision may seek judicial review.

(3) The action for judicial review may be brought against the agency, or its officers, and all indispensable and necessary parties as defined in the Rules of Court.

(4) Appeal from an agency decision shall be perfected by filing with the agency within fifteen (15) days from receipt of a copy thereof a notice of appeal, and with the reviewing court a petition for review of the order. Copies of the petition shall be served upon the agency and all parties of record. The petition shall contain a concise statement of the issues involved and the grounds relied upon for the review, and shall be accompanied with a true copy of the order appealed from, together with copies of such material portions of the records as are referred to therein and other supporting papers. The petition shall be under oath and shall show, by stating the specific material dates, that it was filed within the period fixed in this chapter.

(5) The petition for review shall be perfected within fifteen (15) days from receipt of the final administrative decision. One (1) motion for reconsideration may be allowed. If the motion is denied, the movant shall perfect his appeal during the remaining period for appeal reckoned from receipt of the resolution of denial. If the decision is reversed on reconsideration, the appellant shall have fifteen (15) days from receipt of the resolution to perfect his appeal.

(6) The review proceeding shall be filed in the court specified by statute or, in the absence thereof, in any court of competent jurisdiction in accordance with the provisions on venue of the Rules of Court.

(7) Review shall be made on the basis of the record taken as a whole. The findings of fact of the agency when supported by substantial evidence shall be final except when specifically provided otherwise by law.

SECTION 26. Transmittal of Record. — Within fifteen (15) days from the service of the petition for review, the agency shall transmit to the court the original or a certified copy of the entire records of the proceeding under review. The record to be transmitted may be abridged by agreement of all parties to the proceedings. The court may require or permit subsequent correction or additions to the record.

Final Provisions

SECTION 27. Repealing Clause. — All laws, decrees, orders, rules and regulations, or portions thereof, inconsistent with this Code are hereby repealed or modified accordingly.

SECTION 28. Separability Clause. — In the event that any of the provisions of this Code is declared unconstitutional, the validity of the other provisions shall not be affected by such declaration.

SECTION 29. Effectivity. — This Code shall take effect two years after its publication in the Official Gazette. (as amended by Republic Act No. 6682, [November 25, 1988])

DONE in the City of Manila, this 25th day of July, in the year of Our Lord, Nineteen Hundred and Eighty-Seven.

Published in the Official Gazette, Vol. 83 No. 31, 3528-138 Supp., on August 3, 1987.