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PHILIPPINE CONGRESS
Many people, especially students who take higher studies in Public Administration are unaware of
the role of Congress in the budget process. In this article, three main topics will be covered under the
budget process namely: Budgetary Overview, the Constitutional Provisions and Related Laws in the
Budget Process, and the Budget Process.
I. Budgetary Overview
First, we shall define the national budget which is the governments estimate of its income and
expenditures. It is what the government plans to spend for its programs and projects, as well as the
sources of funds. The budget process involves budgeting and the budget. Budgeting refers to
methods and practices of government planning, adopting and executing financial policies and
programs. The budget refers to a plan of expressing in monetary terms the operating program and
means of financing of a government for a definite period of time. The national budget is spent for the
implementation of various government programs and projects, the operations of government offices
such as the payment of salaries, construction of buildings.
II. Dimensions of the Budget
The budget possesses various dimensions. It can be classified according to the following: By Sector,
By Cost Structure, By Expense Class and By Object, By Region, By Type of Appropriation.
A. By Sector
The budget contains various type of expenditures. They are for:
1. Social Services Expenditure;
2. Economic Services Expenditure;
3. Defense Expenditure;
4. General Public Services; and
5. Debt Burden
B. By Cost Structure
1. For General Administration & Support Services or Overhead Expenses
2. As Support to Operations for the facilitative functions and services, staff and technical support
3. For Operations of regular activities addressing agency mandate
Example: Production of goods, delivery of pubic services, and regulation, etc.
4. For Projects such as homogenous group of activities that result in the accomplishment of
identifiable output within a designated period, whether foreign or locally funded
C. By Expense Class & By Object
1. Current Operating Expenditures for personal services, maintenance and other operative expenses
(MOOE)
2. Capital Outlays for investments, loans, livestock and crops, land/land improvements,
buildings/structures, furniture/fixtures
Government Service Insurance System & the Social Security System, the Oil Price Stabilization Fund
and the Bangko Sentral ng Pilipinas (Central Bank of the Philippines).
E. Constitutional Provisions & Major Laws Affecting the Budget/Budget Process:
1. Philippine Constitution
The Constitutional provisions relative to the budget to wit are:
a. Section 24, Article VI, which states that all appropriations, revenue or tariff bills increase of the
public debt, bills of local application and private bills shall originate in the House of Representatives,
but the Senate may propose or concur with amendments
b. Section 25 (1), Article VI, states that the [Philippine]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.
c. Section 25 (2), Article VI states that no provision or enactment shall be embraced in the General
Appropriations Bill unless it relates specifically to some particular appropriation therein. Any such
provision or enactment shall be limited in its operation to the appropriations to which it relates.
d. Section 25 (4), Article VI: 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.
e. Section 25 (5), Article VI: No law shall be passed authorizing any transfer of appropriations,
however, the President [of the Philippines], the President of the [Philippine] Senate, the Speaker of
the [Philippine] House of Representatives, the Chief Justice of the [Philippine] Supreme Court, and
the Heads of Constitutional Commissions may, by law, be authorized to augment any item in the
general appropriations law for their respective e offices from savings in other items of their
respective appropriations.
f. Section 25 (7), Article VI: If, by the end of the fiscal year, the [Philippine] 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 re-enacted and shall remain in force and effect
until the General Appropriations Bill is passed by [the Philippine] Congress.
g. Section 22, Article VII: The President shall submit to the Congress within thirty (30) days from
the opening of every regular session, as the basis of the General Appropriations Bill, a budget of
receipts and expenditures and sources of financing, including receipts from existing and proposed
revenue measures.
2. Book VI of Executive Order No. 292 series 1987, or the Administrative Code of 1987 entitled
National Government Budgeting
3. Presidential Decree No. 1177, as amended, or the Budget Reform Decree of 1977, insofar as not
superseded by executive Order No. 292 series 1987 or the Administrative Code of 1987
4. Other Applicable Laws
F. The Budget Process
This involves four major steps namely:
1. Budget Preparation
Budget Preparation involves the formulation of estimates of revenues and expenditures by the
Executive Departments and Agencies. In preparing the annual budget proposal, the said department
makes an estimation of government revenues. It then determines the budget priorities within
available revenues and borrowing limits. Finally, it translates these approved priorities into
expenditures.
The main agency involved is the Development Budget Coordination Committee (DBCC) composed of
the following agencies:
a. The Department of Budget and Management, the agency responsible for resource allocation and
management;
b. The Department of Finance, the agency responsible for resource generation and debt
management;
c. The National Economic and Development Authority, the agency responsible for overall economic
activity;
d. The Bangko Sentral ng Pilipinas (Central Bank of the Philippines), the agency responsible for
monetary measures and policies;
e. The Office of the President of the Philippines, the agency responsible for the approval and
oversight of the budget
In the preparation of the budget, the DBCC approves the parameters, makes a budget call, conducts
budget hearings, makes a budget review then consolidates the budget. It then validates and confirms
the budget, which is finally approved by the President of the Philippines and his Cabinet. The
President thereby submits the budget to Congress for approval.
2. Budget Legislation/Authorization
a. Overview
This pertains to the whole range of legislative action on the budget, leading to the enactment of a
General Appropriations Law for the year. The Philippine House of Representatives first conducts
hearings/debates on the budget.
The House then approves the budget, for submission to the Senate of the Philippines. Senate
hearings and debates are conducted on the budget, which is finally approved. A Bicameral
Conference Committee composed of representatives of the Philippine House of Representatives and
the Senate is convened. After approval by the Bicameral Conference Committee, the President enacts
the budget which is known as the General Appropriations Act.
b. The Legislative Budget Process
The main unit of the Philippine House of Representatives involved in the budget process is the
Committee Affairs Department (CAD) composed of the Standing Committees and Sub-Committees.
The CADs activities during budget legislation are:
i.Committee Budget Hearings
Standing Committees (sometimes referred to as the Mother Committee/Committee Proper) are
responsible for conducting budget hearings. During these hearings, macroeconomic
assumptions/plans are presented during the Committee budget hearings on a department wide level.
All the heads of the Executive Departments are invited to these hearings.
Sub-Committees are also responsible for conducting these budget hearings. Budget hearings are
conducted by the Sub-Committees on an agency by agency level. Bureaus and other offices under the
various departments of the national government are invited to these hearings.
ii.Printing of General Appropriations Bill (GAB) on 1st Reading
A National Expenditure Program is formulated, and a copy of the GAB on 1st Reading is printed by
the Committee Technical Staff, based on the National Expenditure Program. The GAB is filed in the
plenary session for 1st Reading.
iii. Executive Meeting of the Committee
The Committee meets in executive session to discuss and approve proposed committee amendments
to the GAB. Committee Reports are prepared and filed to the Bills and Index Division.
iv.Sponsorship and Plenary Deliberations
General principles and macroeconomic assumptions are sponsored and debated in the plenary
session. Deliberations on the budgets of each department, agency, office, including Government
Owned and Controlled Corporations.