GROUP 03.public Fiscal Administration

PUBLIC FISCAL
ADMINISTRATION
Subject : PA 203 – Principles of Public Administration
Instructor : Prof. Jaymar Manduyog
The COA Group : Ms. Arianne Joy Escamilla

(Group 3) Ms. Jean Kenneth Alonto
Mr. John Paul Gomez
Ms. Johna Belle Solas
Ms. Lady Ann Abella
Mr. Jesryl Enilog
Mr. Bon Carlo Melocoton
Date Reported : December 4, 2021

REPORTED TOPICS:
PART I : Government Income

• Ms. Arianne Joy Escamilla
• Ms. Jean Kenneth Alonto
PART II : Withholding Tax System

• Mr. John Paul Gomez
• Ms. Johna Belle Solas
PART III : Budgeting in the Philippines

• Ms. Lady Ann Abella
PART IV : Public Borrowings

• Mr. Jesryl Enilog
PART V : Compensation Plan in the Philippine Government

: COA Circular No. 2009-006 dated September 15, 2019
“Prescribing the Use of the Rules and Regulations on Settlement of Accounts”
• Mr. Bon Carlo Melocoton
PA 203 – Principles of Public Administration
PUBLIC FISCAL ADMINISTRATION
PART I : Government Income
• Ms. Arianne Joy Escamilla

INCOME
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The three (3) Inherent Powers of the State
1. Power of Taxation. It is the power by which the State

raises revenue to defray the necessary expenses of the
government.
2. Police Power. It is the power of the State for promoting

public welfare by restraining and promulgating the use of
liberty and property.
3. Power of Eminent Domain. It is the power of the State to

acquire private property for public purpose upon payment
of just compensation
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Definition of Taxation
Taxation is the process or means by which

the sovereign (independent state), through
its law making body (the legislature),
Person
imposes burdens upon subjects and objects Property
within its jurisdiction for the purpose of Privileges
Transactions
raising revenues to carry out the legitimate
objects of government.
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Aspects of Taxation
1. Levying
(Legislative
Function)
3. Collection 2. Assessment
(Executive Function) (Executive
Function)
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Purpose of Taxation
Primary: Revenue/Fiscal
❖ The primary purpose of taxation on the part of the

government is to provide funds or property with which to
promote the general welfare and the protection of its
citizens and to enable it to finance its multifarious activities.
Secondary: Regulatory (Sumptuary/ Compensatory)

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Definition of Income
Gross Income – means all income derived from whatever source such as
compensation, gross income derived from the conduct of trade or
business or the exercise of a profession, gains from dealings in property,
etc.
Taxable Income – means the pertinent items of Gross Income specified

in the Tax Code less the deductions authorized by the Tax Code or other
special laws
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INCLUSIONS FROM THE GROSS INCOME
As per Section 32(A) of the Tax Code, the following (but not limited to) are included in the gross income:
1. Compensation for services, “in whatever form paid”;
2. Gross income derived from the conduct of trade or business or the exercise of profession;
3. Gains derived form dealings in property;
4. Interest;
5. Rents
6. Royalties
7. Dividends
8. Annuities
9. Prizes and winnings
10. Pensions;
11. Partner’s distributed share from the net income of the general professional partnership.
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WHAT FALLS IN THE COMPENSATION INCOME
The following are included under compensation income:
1. Salaries 12. Commission on insurance premium.

2. Wages 13. Tips
3. Emoluments 14. Marriage fees
4. Honoraria 15. Baptismal offerings
5. Taxable bonuses 16. Sums paid for saying masses for the
6. Allowances dead
7. Fringe benefits 17. Other contributions received by a
8. Fees (including directors’ fees if the clergyman, evagelists, or religios
director is also an employee) worker
9. Taxable pensions and retirement pay 18. Other income of a similar nature
10. Commission
11. Compensation for services on the basis
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of a percentage of profits
GOVERNMENT
INCOME
(SOURCE OF INCOME AND FUNDING)
WHAT IS A GOVERNMENT INCOME?
• INCOME - refers to all revenues and receipts collected or received

forming the gross accretions of funds of the local government unit or the
national government.
• Revenue - refers to income derived from the regular system of taxation
enforced under authority of law or ordinance, and, as such, accrue more
or less regularly every year.
• Receipts - refers to income realized from operations and activities of the
government or are received by it in the exercise of its corporate
functions, consisting of charges for services rendered, conveniences
furnished, or the price of a commodity sold, as well as loans, contributions
or aids from other entities, except provisional advances for budgetary
purposes.
SOURCES OF INCOME
(LOCAL GOVERNMENT UNIT)
• a. Tax revenue
• b. Service and Business Income
• c. Transfers, Assistance and Subsidy
• d. Shares, Grants and Donations
• e. Gains
• f. Miscellaneous Income
SOURCES OF REVENUE AND OTHER RECEIPTS
(NATIONAL GOVERNMENT AGENCIES)
• Revenue from Exchange Transactions

• Revenue from Non-Exchange Transactions
REVENUE FROM EXCHANGE TRANSACTIONS.
• Sale of goods or provisions of services to third parties or to other NGAs

• Use by other entity of assets yielding interest, royalties and dividends or similar
distributions
REVENUE FROM NON-EXCHANGE TRANSACTIONS
• Tax Revenue
• Fines and Penalties
• Shares, Grants and Donations
• Revenue from non-exchange transactions may also arise when, in respect of an inflow of
resources from a non-exchange transaction, the entity satisfies a present obligation
recognized as a liability
PART II : Withholding Tax System
• Mr. John Paul Gomez
• Ms. Johna Belle Solas

Regular Supplementary
1. Basic Salary 1. Commission 6. Sick leave
2. Fixed Allowances 2. Overtime Pay 7. Fringe benefits received by
rank and file employees
3. Fees, including Director fees 8. Hazard pay
4. Profit Sharing 9. Taxable 13th month pay and
other benefits
5. Monetized vacation leave in 10. Other remuneration
excess of ten (10) days received from an employee-
employer relationships
REVISED WITHHOLDING TAX TABLE
Effective January 1, 2018 to December 31, 2022
DAILY 1 2 3 4 5 6
Compensation Range P685 and below P685 -P1,095 P1,096 - P2,191 P2,192 - P5,478 P5,479 - P21,917 P21,918 and above
Prescribed Withholding P6,602.74 +35% over

0.00 0.00 +20% over P685 P82.19 +25% over P1,096 P356.16 +30% over P2,192 P1,342.47 +32% over P5,479
Tax P21,918
WEEKLY 1 2 3 4 5 6
Compensation Range P4,808 and below P4,808 - P7,691 P7,692 - P15,384 P15,385 - P38,461 P38,462 - P153,845 P153,846 and above
Prescribed Withholding P2,500.00 +30% over P9,423.08 +32% over P46,346.15 +35% over
0.00 0.00 +20% over P4,808 P576.92 +25% over p7,692
Tax p15,385 P38,462 P153,846
SEMI-MONTHLY 1 2 3 4 5 6
Prescribed Withholding P1,250.00 +25% over P5,416.67 +30% over P20,416.67 +32% over P100,416.67 +35% over
0.00 0.00 +20% over P10,417
Tax P16,667 P33,333 P83,333 P333,333
MONTHLY 1 2 3 4 5 6
Prescribed Withholding P10,833.33 +30% over P40,833.33 +32% over P200,833.33 +35% over
0.00 0.00 +20% over P20,833 P2,500.00 +25% over 33,333
Tax P66,667 P166,667 P666,667
REVISED WITHHOLDING TAX TABLE
Effective January 1, 2023 and onwards
DAILY 1 2 3 4 5 6
Compensation Range P685 and below P685 -P1,095 P1,096 - P2,191 P2,192 - P5,478 P5,479 - P21,917 P21,918 and above
P6,602.74 +35% over

Prescribed Withholding Tax0.00 0.00 +15% over P685 P82.19 +20% over P1,096 P356.16 +25% over P2,192 P1,342.47 +30% over P5,479
P21,918
WEEKLY 1 2 3 4 5 6
P2,500.00 +25% over P9,423.08 +30% over P46,346.15 +35% over

Prescribed Withholding Tax0.00 0.00 +15% over P4,808 P576.92 +20% over p7,692
p15,385 P38,462 P153,846
SEMI-MONTHLY 1 2 3 4 5 6
P1,250.00 +20% over P5,416.67 +25% over P20,416.67 +30% over P100,416.67 +35% over
Prescribed Withholding Tax0.00 0.00 +15% over P10,417
P16,667 P33,333 P83,333 P333,333
MONTHLY 1 2 3 4 5 6
P10,833.33 +25% over P40,833.33 +30% over P200,833.33 +35% over

Prescribed Withholding Tax0.00 0.00 +15% over P20,833 P2,500.00 +20% over 33,333
P66,667 P166,667 P666,667
EFFECTIVE DATE JANUARY 1, 2018 to DECEMBER
EFFECTIVE DATE JANUARY 1, 2023
31, 2022
Not over P250,000 0% Not over P250,000 0%
Over P250,000 but not 20% of the excess over
over P400,000 P250,000 Over P250,000 but not over 15% of the excess over
P400,000 P250,000
Over P400,000 but not P30,000 + 25% of the
over P800,000 excess over P400,000 Over P400,000 but not over P22,500 + 20% of the excess
P800,000 over P400,000
Over P800,000 but not P130,000 + 30% of the Over P800,000 but not over P102,500 + 25% of the excess
over P2,000,000 excess over P800,000 P2,000,000 over P800,000
Over P2,000,000 but not over P402,500 + 30% of the excess
Over P2,000,000 but not P490,000 + 32% of the
P8,000,000 over P2,000,000
over P8,000,000 excess over P2,000,000
P2,202,500 + 35% of the excess
Over P8,000,000
P2,410,000 + 35% of the over P8,000,000
Over P8,000,000
excess over P8,000,000
WITHHOLDING TAX FORMS DESCRIPTION
REGISTRATION FORM
Application for Registration for Self-Employed
BIR FORM NO. 1901
and Mixed Income Individuals, Estates and Trusts
Application for Registration for Individuals
BIR FORM NO. 1902 Earning Purely Compensation Income and Non-
Resident Citizens/Resident Alien Employee
Application for Registration for
BIR FORM NO. 1903 Corporations/Partnerships (Taxable/Non-
Taxable), including GAIs and LGUs
Application for Registration for One-time
Taxpayer and Persons Registering under E.O. 98
BIR FORM NO. 1904
(Securing a TIN to be able to transact with any
government office)
BIR FORM NO. 1905 Application for Information Update
PAYMENT FORM
BIR FORM NO. 0605 Payment form
Monthly Remittance Form of Creditable Income Taxes
BIR FORM NO. 0619-E
Withheld (Expanded)
BIR FORM NO. 0619-F Monthly Remittance Form of Final Income Taxes Withheld
REMITTANCE FORM
BIR FORM NO. 1600-VT Monthly Remittance Return of Value-Added Tax
BIR FORM No. 1600-PT Monthly Remittance Return of Percentage Tax
Remittance Return of Percentage Tax on Winnings and
BIR FORM NO. 1600WP
Prizes Withheld by Race Track Operators
Monthly Remittance Return of Income Taxes Withheld on
BIR FORM NO. 1601-C
Comnpensation
Quarterly Remittance Return of Creditable Income Taxes
BIR FORM NO. 1601-EQ
withheld (Expanded)
Quarterly Remittance Return of Final Income Taxes
BIR FORM NO. 1601-FQ
Withheld
Quarterly Remittance Return of Final Taxes Withheld on
BIR FORM NO. 1602-Q Interest Paid on Deposits and Deposits
Substitutes/Trusts/Etc.
Quarterly Remittance Return of Final Income Taxes
BIR FORM NO. 1603-Q Withheld on Fringe benefits Paid to Employees Other Than
Rank and File
CERTIFICATES
Certificate of Income Payment Not Subject

BIR FORM NO. 2304 to Withholding Tax (Excluding
Compensation Income)
BIR FORM NO. 2306 Certificate of Final Tax Withheld at Source

Certificate of Creditable Tax Withheld at
BIR FORM NO. 2307
Source
Certificate of Compensation Payment/Tax

BIR FORM NO. 2316
Withheld
DUE DATE
WITHHOLDING TAX FORMS
eFPS Manual/EBIRForms
PAYMENT FORM
BIR FORM NO. 0605
BIR FORM NO. 0619-E Filing - see Schedule in RR 26-2002
on or before the tenth (10th) day
Payment - on or before the fifteenth
BIR FORM NO. 0619-F following the close of the month
(15th) day of the following month
REMITTANCE FORM
BIR FORM NO. 1600-VT
on or before the tenth (10th) day
BIR FORM NO. 1600-PT
following the close of the month
BIR FORM NO. 1600WP on or before the tenth (10th) day
Filing - see Schedule in RR 26-2002 following the close of the month
BIR FORM NO. 1601-C Payment - on or before the fiftenth
(15th) day of the following month
BIR FORM NO. 1601-EQ
BIR FORM NO. 1601-FQ last day of the month following the last day of the month following the
BIR FORM NO. 1602-Q close of the quarter close of the quarter
BIR FORM NO. 1603-Q
Filing via eFPS
Group A - Fifteen (15) days following the end of the month
Group B - Fourteen (14) days following the end of the month
Group C - Thirteen (13) days following the end of the month
Group D - Twelve (12) days following the end of the month
Group E - Eleven (11) days following the end of the month
C:\Users\User\OneDrive\Desktop\Reporting\1710rr26_02.pdf
Note: The staggered manner of filing is only allowed to taxpayers using the Electronic Filing
and Payment System (EFPS) based on the industry classification groupings per RR No. 26-
2002.
However, the staggered filing of returns allowed for withholding agents/taxpayers enrolled
in the EFPS facility of the Bureau shall not apply in the case of the NGAs per RR 1-2013.
WITHHOLDING TAX Rates
Expanded Withholding Tax Rates
TAX ATC
TAX TYPE DESCRIPTION
RATE IND CORP
WE Professional fees (Lawyers, CPA's, Engineers, etc.)
- if the gross income for the current year did not exceed P3M 5% WI010
- if gross income is more than 3M or VAT registered regardlessof amount 10% WI011
WE Professional fees (Lawyers, CPA's, Engineers, etc.)
- if gross income for the current year did not exceed P720,000 10% WC010
- if gross income exceeds P720,000 15% WC011
Professional entertainer such as, but not limited to actors and actresses,
WE
singers, lyricist, composers, emcees
- if gross income is more than 3M or VAT registered regardless of amount 10% WI021
Professional entertainer such as, but not limited to actors and actresses,
WE
singers, lyricist, composers, emcees
WE Professional athletes including basketball players, pelotaris and jockeys
WE Professional athletes including basketball players, pelotaris and jockeys
All directors and producers involved in movies, stage, television and musical
WE
productions
All directors and producers involved in movies, stage, television and musical
WE
productions
WE Management and technical consultants
WE Management and technical consultants
WE Business and Bookkeeping agents and agencies
WE Business and Bookkeeping agents and agencies
WE Insurance agents and insurance adjusters
WE Insurance agents and insurance adjusters
WE Other Recipients of Talent Fees
WE Other Recipients of Talent Fees
WE Fees of Director who are not employees of the company
Rentals Oon gross rental or lease for the continued use or possession of
personal property in excess of P10,000 annually and real property used in
WE 5% WI100 WC100
business which the payor or obligor has not taken title or is not taking title, or
in which has no equity; poles, satellites, transmission facilities and billboards
Cinemathographic film rentals and other payments to resident indivduals and
WE 5% WI110 WC110
corporate cinematographic film owners, lessors and distributors
WE Income payments to certain contractors 2% WI120 WC120
WE Income distribution to the beneficiaries of estate and trusts 15% WI130
Gross Commission of service fees of customs, insurance, stock, immigration
and commercial brokers, fees of agents of professional entertainers and real
WE
estate service practitioners (RESPs)(i.e. real estate consultants, real estate
appraisers and real estate brokers
Gross Commission of service fees of customs, insurance, stock, immigration
and commercial brokers, fees of agents of professional entertainers and real
WE
estate service practitioners (RESPs)(i.e. real estate consultants, real estate
appraisers and real estate brokers
Professional fees paid to medical practitioners (includes doctors of medicine,
WE doctors of veterinary science & dentist) by hospitals & clinics or paid directly
by HMO and/or other semilar establishments
Professional fees paid to medical practitioners (includes doctors of medicine,
WE doctors of veterinary science & dentist) by hospitals & clinics or paid directly
by HMO and/or other semilar establishments
WE Payment by the General Professional Partnership (GPPs) to its partners
- if gross income for the current year did not exceed P720,000 10% WI152
- if gross income exceeds P720,000 15% WI153
1% OF 1/2
WE Income payments made by credit card companies of gross WI158 WC158
amount
Additional Income Payments to govt personnel from importers, shipping and
WE 15% WI159
airline companies or their agents for overtime services
Income Payment made by NGAs, LGU, & etc to its local/resident suppliers of
WE 1% WI640 WC640
goods other than those covered by other rates of withholding tax
Income Payment made by NGAs, LGU, & etc to its local/resident suppliers of
WE 2% WI157 WC157
services other than those covered by other rates of withholding tax
Income Payment made by top withholding agents to their local/resident
WE 1% WI158 WC158
suppliers of goods other than those covered by other rates of withholding tax
Income Payment made by top withholding agents to their local/resident
WE suppliers of services other than those covered by other rates of withholding 2% WI160 WC160
tax
Commissions, rebates, discounts and other similar considerations
paid/granted to independent and/or exclusive sales representatives and
WE
marketing agents and sub-agents of companies, including multi-level
marketing companies
- if the gross income for the current year did not exceed P3M 5% WI515 WC515
- if the gross income is more than P3M or VAT registered regardless of amount 10% WI516 WC516
WE Gross payments to embalmers by funeral parlors 1% WI530
WE Payments made by pre-need companies to funeral parlors 1% WI535 WC535
WE Tolling fees paid to refineries 5% WI540 WC540
Income payments made to suppliers of agricultural supplier products in
WE 1% WI610 WC610
excess of cumulative amount of P300,000 within the same taxable year
Income payments on purchases of minerals, mineral products and quarry
resources, such as but not limited to silver, gold, granite, gravel, sand,
WE 5% WI630 WC630
boulders and other mineral products except purchases by Bangko Sentral ng
Pilipinas
Income payments on purchases of minerals, mineral products and quarry
WE resources by Bangko Sentral ng Pilipinas ((BSP) from gold miners/suppliers 1% WI632 WC632
under PD 1899, as amended by RA No. 7076
On gross amount of refund given by MERALCO to customers with active
WE 15% WI650 WC650
contracts as classified by MERALCO
On gross amount of refund given by MERALCO to customers with
WE 15% WI651 WC651
terminated contracts as classified by MERALCO
On gross amount of interest on the refund of meter deposits whether paid
directly to the customers or applied against customer's billings of Residential
WE 10% WI660 WC660
and General Service customers whose monthly electricity consumption
exceeds 200 kwh as classified by MERALCO
On gross amount of interest on the refund of meter deposits whether paid
directly to the customers or applied against customer's billings of Non-
WE 10% WI661 WC661
Residential customers whose monthly electricity consumption exceeds 200
kwh as classified by MERALCO
On gross amount of interest on the refund of meter deposits whether paid directly
to the customers or applied against customer's billings of Residential and General
WE 10% WI662 WC662
Service customers whose monthly electricity consumption exceeds 200 kwh as
classified by other by other electric Distribution Utilities (DU)
On gross amount of interest on the refund of meter deposits whether paid directly
to the customers or applied against customer's billings of Non-Residential
WE 10% WI663 WC663
customers whose monthly electricity consumption exceeds 200 kwh as classified
by other electric Distribution Utilities (DU)
Income payments made by political parties and candidates of local and national
elections on all their purchases of goods and services relkated to campaign
WE expenditures, and income payments made by individuals or juridical persons for 5% WI680 WC680
their purchases of goods and services intented to be given as campaign
contribution to political parties and candidates
WE Income payments received by Real Estate Investment Trust (REIT) 1% WC690
Interest income denied from any other debt instruments not within the coverage of
WE 15% WI710 WC710
deposit substitutes and Revenue Regulations 14-2012
WE Income payments on locally produced raw sugar 1% WI720 WC720
Final Withholding Tax Rates
TAX ATC
TAX TYPE DESCRIPTION
RATE IND CORP
WF Interest on Foreign loans payable to Non-Resident Foreign Corporation (NRFCs) 20% WC180
Interest and other income payments on foreign currency transactions/loans payable of
WF 10% WC190
Offshore Banking Units (OBUs)
Interest and other income payments on foreign currency transactions/loans payable of
WF 10% WC191
Foreign Currency Deposits Units (FCDUs)
10% W1202
WF Cash dividend payment by domestic corporation to citizens ans residents aliens/NRFCs
30% WC212
Property dividend payment by domestic corporation to citizens and resident 10% WI203
WF
aliens/NRFCs 30% WC213
Cash dividend payment by domestic corporation to NFRCs whose countries allowed
WF 15% WC222
tax deemed paid credit (subject to tax sparing rule)
Property dividend payment by domestic corporation to NFRCs whose countries
15% WC223
allowed tax deemed paid credit (subject to tax sparing rule)
Cash dividend payment by domestic corporation to non-resident alien engaged in
WF 20% WI224
Trade or Business within the Philippines (NRAETB)
WF Property dividend payment by domestic corporation to NRAETB 20% WI225
Share of NRAETB in the distributable net income after tax of a partnership (except
GPPs) of which he is a partner, or share in the net income after tax of an association,
WF 20% WI226
joint account or a joint venture taxable as a corporation of which he is a member or a
co-venturer
WF On other payments to NRFCs 30% WC230
Distributive share of individual partners in a taxable partnership, association, joint
WF 10% WI240
account or joint venture or consortium
All kinds of royalty payments to citizens, resident aliens and NRAETB (other than
WF 20% WI250 WC250
WI380 and WI341), domestic and resident foreign corporations
WF On prizes exceeding P10,000 and other winnings paid to individuals 20% WI260
WF Branch profit remittance by all corporations except PEZA/SBMA/CDA registered 15% WC280
On the gross rentals, lease and charter fees derived by non-resident owner or lessor of
WF 4.5% WC290
foreign vessels
On gross rentals, charter and other fees derived by non-resident lessor or aircraft,
WF 7.5% WC300
machineries and equipment
WF On payments to oil exploration service contractors/sub-contractors 8% WI310 WC310
Payments to non-resident alien not engage in trade or business within the Philippines
WF 25% WI330
(NRANETB) except on sale of shares in domestic corporation and real property
On payments to non-residnet individual/foreign corporate cinematographic film
WF 25% WI340 WC340
owners, lessors or distributors
WF Royalties paid to NRAETB on cinematographic films and similar works 25% WI341
Final tax on interest or other payments upon tax-free covenant bonds, mortgages, deeds
WF 30% WI350
of trust or other obligations under Sec. 57C of the NIRC of 1997, as amended
Royalties paid to citizens, resident aliens and nraetb on books, other literary works and
WF 10% WI380
musical compositions
WF Informers cash reward to individuals/juridical persons 10% WI410 WC410
WF Cash on property dividend paid by a Real Estate Investment Trust 10% WI700 WC700
WITHHOLDING TAX ON GOVERNMENT MONEY PAYMENTS (GMP) -
PERCENTAGE TAXES
TAX
DESCRIPTION RATE ATC
TYPE
Applicable to Government Withholding Agent Only
WV VAT withholding on Purchase of Goods 5% WV010
WV VAT Withholding on Purchase of Services 5% WV020
Applicable to Both Government and Private Withholding Agents
WV VAT Withholding from non-residents (Government Withholding Agents) 12% WV040
WV VAT Withholding from non-residents (Private Withholding Agents) 12% WV050
WV VAT Withholding on Purchases of Goods (with waiver of privilege to claim tax credit) creditable 12% WV012
VAT Withholding on Purchases of Goods (with waiver of privilege to claim input tax credit)
WV 12% WV014
final
VAT Withholding on Purchases of Services (with waiver of privilege to claim input tax credit)
WV 12% WV022
creditable
VAT Withholding on Purchases of Services (with waiver of privilege to claim input tax credit)
WV 12% WV024
final
Applicable to Government Withholding Agent Only
WB Tax on Carriers and Keepers of Garages 3% WB030
WB Franchise Tax on Gas and Utilities 2% WB040
Franchise tax on radio & TV broadcasting companies whose annual gross receipts do not exceed
WB 3% WB050
P10M & who are not-VAT registered taxpayer
WB Tax on Life insurance premiums 2% WB070
WB Tax on Overseas Dispatch, Message or Conversation from the Philippines 10% WB090
WB Business tax on Agents of Foreign Insurance companies - Insurance Agents 4% WB120
WB Business tax on Agents of Foreign Insurance companies - owner of the property 5% WB121
WB Tax on international carriers 3% WB130
WB Tax on Cockpits 18% WB140
Tax on amusement places, such as cabarets, night and day clubs, videoke bars, karaoke bars,
WB 18% WB150
karaoke televion, karaoke boxes, music lounges and other similar establishments
WB Taxes on Boxing exhibitions 10% WB160
WB Taxes on professional basketball games 15% WB170
WB Tax on jai-alai and race tracks 30% WB180
6/10 of
WB Tax on sale barter or exchange of stocks listed and traded through Local Stock Exchange WB200
1%
WB201
Tax on shares of stocks sold or exchanged through initial and secondary public offering - Not 4% 2%
WB WB202
over 25% - Over 25% but not exceeding 33 1/3% - Over 33 1/3% 1%
WB203
WB Tax on Banks and Non-banks Financial Intermediaries Performing Quasi Banking Dunctions
A. On interest, commissions and discounts from lending activities as well as income from
5% WB301
financial leasing on the basis of the remaining maturities of instruments from which receipts are
1% WB302
derived - Maturity period is five years or less - Maturity period is more than five years
B. On dividends and equity shares and net income of subsidiaries 0% WB102
C. On royalties, rentals of property, real or personal, profits from exchange and all other items
7% WB103
treated as gross income under the Code
D. On net trading gains within the taxable year on foreign currency, debt securities,
7% WB104
derivatives and other similar financial instruments
WB Tax on Other Non-Banks Financial Intermediaries nor performing Quasi-Banking Functions
A. On interest, commissions and discounts from lending activities as well as income from
financial leasing on the basis of the remaining maturities of instruments from which such receipts 5% WB108
are derived - Maturity period is five years or less - Maturity period is more than five 1% WB109
years
B. On all other items treated as gross income under the Code 5% WB110
APPLICABLE TO BOTH GOVERNMENT AND PRIVATE WITHHOLDING AGENTS
Persons exempt from VAT under Sec. 108BB (creditable) Government Withholding Agent 3% WB080
Persons exempt from VAT under Sec. 108BB (creditable) Private Withholding Agent 3% WB082
Persons exempt from VAT under Section 109BB (Section 116 applies) 3% WB084
PART III : Budgeting in the Philippines
• Ms. Lady Ann Abella

BUDGETING IN
THE PHILIPPINES
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THE BUDGETING PROCESS
What is government budgeting?
Government budgeting is the critical exercise of
allocating revenues and borrowed funds to attain the
economic and social goals of the country. It also
entails the management of government expenditures
in such a way that will create the most economic
impact from the production and delivery of goods
and services while supporting a healthy fiscal
position.
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Why is government budgeting important?
Government budgeting is important because it

enables the government to plan and manage its
financial resources to support the implementation of
various programs and projects that best promote the
development of the country. Through the budget, the
government can prioritize and put into action its
plans, programs and policies within the constraints of
its financial capability as dictated by economic
conditions.
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THE BUDGET CYCLE
Budget
Four Phases in Managing the National Budget: Preparation
(DBCC,
Agencies)
➢ Budget Preparation Budget

Accountability
Budget
Budget Process Approval
➢ Budget Legislation (Agencies. (Congress)
COA)
➢ Budget Execution
➢ Budget Accountability Budget
Execution
(Agencies)
During the preparation phase, the Executive prepares the proposed

National Budget. This is followed by the legislation phase where the
Congress authorize the General Appropriation Act. In the execution
phase, agencies utilize their approved budgets and during the
accountability phase, the executive monitors and evaluate the use of
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the budget.
1. BUDGET PREPARATION
This starts with the Budget Call and ends with the President’s submission of the
proposed budget to Congress.
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1. The Budget Call
● At the beginning of the budget preparation year, the Department
of Budget and Management (DBM) issues the National Budget
Call to all agencies (including state universities and colleges) and
a Separate Corporate Budget Call to all GOCCs and GFIs.
● The Budget Call contains budget parameters (including
macroeconomic and fiscal targets and agency budget ceilings) as
set beforehand by the Development Budget Coordination
Committee (DBCC); and policy guidelines and procedures in the
preparation and submission of agency budget proposals.
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2. Stakeholder Engagement
● A new feature in budget preparations which seeks to
increase citizen participation in the budget process,
departments and agencies are tasked to partner with
civil society organizations (CSOs) and other citizen-
stakeholders as they prepare their agency budget
proposals.
● This new process, which was piloted in the

preparation of the 2012 National Budget, is now
being expanded towards institutionalization.
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“Bottom-Up” Budgeting
● As opposed to the conventional way of allocating resources
from top to bottom, grassroots communities will be engaged
in designing the National Budget.
● The Aquino government, through the Cabinet Cluster on Human Development

and Poverty Reduction, has identified 300 to 400 of the poorest municipalities and
will engage these in crafting community-level poverty reduction and
empowerment plans. This initial salvo of “bottom-up” budgeting will focus on
rural development programs and the conditional cash transfer program, and will
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thus involve DA, DAR, DENR, DSWD, DepEd and DoH. These agencies will then
include the community plans in their proposed budgets.
Program Expenditure Classification (PREXC)
● A reform that restructures the current Budget by grouping activities

and projects under major programs or key strategies. Through this
innovation, the government will be able to assign performance
targets-both outputs and outcomes-at the level of programs. This
way, the direct link between strategies, budgets and intended results
will be clearer and program monitoring and evaluation can provide
evidence-based assessments.
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3. Technical Budget Hearings
● These are conducted after departments and
agencies submit their Agency Budget
Proposals to the DBM. Here, agencies defend
their proposed budgets before a technical
panel of DBM, based on performance
indicators on output targets and absorptive
capacity. DBM bureaus then review the
agency proposals and prepare
recommendations.
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4. Executive Review
● The recommendations are presented before
an Executive Review Board which is
composed of the DBM Secretary and Senior
Officials.
● Deliberations here entail a careful
prioritization of programs and corresponding
support, vis-à-vis the priority agenda of the
national government.
● Implementation issues are also discussed and
resolved.
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5. Consolidation, Validation and
Confirmation
● DBM then consolidates the recommended agency
budgets and recommendations into a National
Expenditures Program and a Budget of
Expenditures and Sources of Financing (BESF).
● As part of the consolidating process, the
deliberations by the DBCC will determine the
agency and sectoral allocation of the approved total
expenditure ceiling, in line with the macroeconomic
and fiscal program. Heads of major departments
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are invited to this meeting.

6. Presentation to President and Cabinet
● The proposed Budget is presented by DBM, together with the
DBCC, to the President and Cabinet for further refinements or
reprioritization. After the President and Cabinet approve the
proposed National Expenditure Plan, the DBM prepares and
finalizes the Budget documents to be submitted to Congress
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7. The President’s Budget
● The Budget preparation phase ends with the
submission of the proposed national budget – the
“President’s Budget” – to Congress.
● The President’s Budget consists of the following

documents, which help legislators analyze the
contents of the proposed budget”
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7. The President’s Budget
● President’s Budget Message (PBM)
This is where the President explains the policy framework and priorities in the Budget.
● Budget of Expenditures and Sources of Financing ( BESF)
Mandated by the Constitution, this contains the macroeconomics assumptions, public sector context
(including overviews of LGU and GOCC Financial positions), breakdown of the expenditures and
funding sources for the fiscal year and the two previous years.
● National Expenditure Program (NEP)
This contain the details of spending for each department and agency by program, activity or project, and is
submitted in the form of a proposed General Appropriations Act.
● Details of Selected Programs and Projects
This contains a more detailed disaggregation of key programs, projects and activities in the NEP, especially
those in line with the national government’s development plan.
● Staffing Summary
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This contains a summary of the staffing complement of each department and agency, including number of
positions and amounts allocated for the same.
2. BUDGET LEGISLATION
-also called the “Budget Authorization phase,” this starts upon the House speaker’s
Receipt of the President's Budget and ends with the President’s enactment of the
General Appropriations Acts (GAA).
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BUDGET LEGISLATION
1. House Deliberations
The House of Representative, in plenary, assigns the President's Budget to the

House Appropriations Commttee. The Committee and its Sub-Committees then
schedule and conduct hearings on the budgets of the departments and agencies and
scrutinize their respective programs and projects. It then crafts the General
Appropriations Bill (GAB).
● In plenary session, the GAB is sponsored, presented and defended by the
Appropriations Committee and Sub-Committee Chairmen. As in all other
laws, the GAB is approved on Second and Third Reading before transmission
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to the Senate.
BUDGET LEGISLATION
2. Senate Deliberations
● ·As in the House process, the Senate conducts its own committee
hearing and plenary deliberations on the GAB. Budget
deliberations in the Senate formally start after the House of
Representatives transmits the GAB. For expediency, however, the
Senate Finance Committee and usually start hearings on the GAB
even as House deliberations are ongoing.
● The Committee submits its proposed amendments to the GAB to

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plenary only after it has been formally transmitted by the House.

BUDGET LEGISLATION
3. Bicameral Deliberations
● Once both House of Congress have finished their
deliberations, they will each constitute a panel to the
Bicameral Conference Committee. This committee will then
discuss and harmonize the conflicting provisions of the
House and Senate Versions of the GAB. A Harmonized
Version of the GAB is thus produced.
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BUDGET LEGISLATION
4. Ratification and Enrolment
● The Harmonized or "Bicam" Version is then submitted to

both Houses, which will then vote to ratify the final GAB
for submission to the President. Once submitted to the
President for his approval, the GAB is considered enrolled.
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BUDGET LEGISLATION
5. The Veto Message
● The President and DBM then review the GAB and prepare
a Veto Message, where budget items subjected to direct
veto or conditional implementation are identified, and
where general observations are made. Under the
Constitution, the GAB is the only legislative measure
where the President can impose a line-veto (in all other
cases, a law is either approved or vetoed in full).
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BUDGET LEGISLATION
6. Re-enactment
● When the GAA is not enacted before fiscal year starts, the
previous year’s GAA is automatically reenacted. This
means that agency budgets for programs, activities and
projects remain the same.
● Funding for programs or projects that have already been

terminated is realigned for other expenditures.
Reenactments are tedious and prone to abuse.
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3. BUDGET EXECUTION
● This is where the people’s money is
actually spent. As soon as the GAA is
enacted, the government can implement
its priority programs and projects.
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BUDGET EXECUTION
1. Release Guidelines & Program
● The budget execution phase begins with DBM’s

issuance of guidelines on the release and utilization of
funds.
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BUDGET EXECUTION
2. Budget Execution Documents (BEDs)
● Agencies are required to submit their BEDs at

the start of budget execution. These documents
outline agency plans and performance targets.
These BEDs include the physical and financial
plan, monthly cash program, estimate of
monthly income, and list of obligations that
are not yet due and demandable.
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BUDGET EXECUTION
3. Allotment & Cash Release Programming
● To ensure that releases fit the approved Fiscal Program, the DBM
prepares an Allotment Release Program (ARP) to set a limit for
allotments issued to an agency and on the aggregate.
● ·The ARP of each agency corresponds to the total amount of the

agency-specific budget under the GAA, as well as Automatic
Appropriations. A Cash Release Program (CRP) is also formulated
alongside that to set a guide for disbursement levels for the year
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and for every month.

BUDGET EXECUTION
3. a. Allotment Release
● Allotments , which authorize an agency to enter into an obligation,

are either released by DBM to all agencies comprehensively through
the Agency Budget Matrix (ABM) and individually via Special
Allotment Release Orders (SAROs).
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BUDGET EXECUTION
3. b. Allotment Release
Agency Budget Matrix (ABM)
● This document disaggregates all programmed appropriations for each

agency into two main expenditure categories: "not needing clearance"
and "needing clearance.“
● The ABM is the comprehensive allotment release document

for appropriations which do not need clearance, or those which have
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already been itemized and fleshed out in the GAA

BUDGET EXECUTION
3. c. Allotment Release
Special Allotment Release Order (SAROs)
● Items identified as "needing clearance" are those which require the

approval of the DBM or the President, as the case may be ( for
instance, lump sum funds and confidential and intelligence funds).
● For such items , an agency needs to submit a Special Budget Request

to the DBM with supporting documents. Once approved, a SARO is
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issued.
BUDGET EXECUTION
4. The GAA as Allotment Release
● The policy of using the General Appropriations Act as an Allotment Order

shall continue to be adopted to ensure the immediate
implementation of programs, projects and activities. In so doing, resource
unpredictability and delays in project/program implementation are
reduced. Likewise, credibility and transparency in the budget process is
expected to be further enhanced.
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BUDGET EXECUTION
5. Incurring Obligations
● In implementing programs, activities and projects, agencies incur
liabilities on behalf of the government. Obligations are liabilities
legally incurred, which the government will pay for.
● There are various ways that an agency "obligates:" for example, when
it hires staff (an obligation to pay salaries), receives billings for the use
of utilities, or enters into a contract with an entity for the supply of
goods or services.
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BUDGET EXECUTION
6. Cash Allocation
To authorize an agency to pay the obligations it incurs, DBM issues a

disbursement authority.
Most of the time, it takes the form of a Notice of Cash Allocation (NCA); and
in special cases, the Non-Cash Availment Authority (NCAA) and Cash
Disbursement Ceiling (CDC).
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BUDGET EXECUTION
6. a. Cash Allocation
Notice of Cash Allocation(NCA)
● This is a cash authority issued periodically by the DBM to the operating

units of agencies to cover their cash requirements.
● The NCA specifies the maximum amount of cash that can be withdrawn
from a government servicing bank for the period indicated.
● The release of NCAs by DBM is based on an agency's submission of its
Monthly Cash Program and other required documents.
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BUDGET EXECUTION
6. b. Cash Allocation
Others Disbursement Authorities.
● In contrast to NCAs, Non-Cash Availment Authority (NCAA) are issued

to authorize non-cash disbursements.
● Cash Disbursement Ceiling (CDC) are meanwhile issued to departments

with overseas operations, allowing them to use income collected by their
foreign posts for their operating requirements.
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BUDGET EXECUTION
7. Disbursement
● This is the final step of the budget execution phase, where government
monies are actually spent. The Modified Disbursement Scheme is
mostly used, where disbursements of national government agencies
chargeable against the Treasury are made through government
servicing banks, such as the Land Bank of the Philippines.
● The budget process, of course, does not end when government agencies
spend public funds: each and every peso must be accounted for to ensure
that is used properly, and contributing to the achievement of socio
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economic goals.
4. BUDGET ACCOUNTABILITY
● This phase happens alongside the Budget Execution
phase.
● Through Budget Accountability, the DBM monitors the

efficiency of fund utilization, assesses agency
performance and provides a vital basis for reforms and
new policies.
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BUDGET ACCOUNTABILITY
1. Performance & Target Outcomes
● Agencies are held accountable not only for how they use public funds
ethically, but also on how they attain performance targets and
outcomes using available resources.
● These performance measures are set alongside the preparation of the
National Budget; and these are indicated in the OPIF Book of
Outputs.
● Prior to the execution of the enacted National Budget, these
performance targets are firmed up during the preparation of BEDs.
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2. Budget Accountability Reports (BARs)
● Submitted by agencies on a monthly and quarterly basis, BARs are

required reports that show how agencies used their funds and identify
their corresponding physical accomplishments.
● These include quarterly physical and financial reports of operations;

quarterly income reports, a monthly statement of allotments,
obligations and balances; and monthly report of disbursements.
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3. Review of Agency Performance
● The DBM regularly reviews the financial and physical performance of
agencies. Actual utilization of funds and physical accomplishments, as
indicated in the agencies' BARs are evaluated against their targets as
identified via OPIF and in the agencies' BED. Agency Performance Reviews
(APRs) are conducted quarterly or every semester, as the case may be.
● An annual Budget Performance Assessment Review is conducted to

determine each agency's accomplishments and performance by the year-end.
The DBM regularly reports results to the President
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4. No Report, No Release
● Starting 2012, the DBM will be withholding certain fund releases to agencies
if they fail to submit their Budget Accountability Reports. In particular,
these will be funds from the Miscellaneous Personnel Benefits Fund (MPBF)
for compensation adjustments under the Salary Standardization Law,
provisions for unfilled positions and employee clothing allowances.
● These funds to be withheld are only limited to agencies' MPBF allotments so
that only the agencies are penalized and that the implementation of critical
programs and projects will not be disrupted. Errant and compliant agencies
will also be posted online for public scrutiny.
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5. Audit
● Auditing is not within the DBM's jurisdiction, and is instead lodged under
the Commission on Audit (COA). Nonetheless, auditing is critical in
ensuring agency accountability in the use of public funds.
● The DBM uses COA's audit reports in confirming agency performance,

determining budgetary levels for agencies and addressing issues in fund
usage.
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6. Performance-Based Incentive System
● The Department of Budget and Management

(DBM) is also in the process of establishing a
performance based incentive system- which will
recognize and reward good performance among
government employees- to help improve the
efficiency of service delivery across all
government institutions.
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2021 NATIONAL BUDGET
Reset, Rebound, and Recover
Investing for Resiliency and Sustainability
On December 28, 2020, President Rodrigo Duterte signed

into law the PhP4.506 trillion National Budget for Fiscal
Year 2021, or the 2021 General Appropriations Act (GAA).
This Budget continues to strengthen government efforts to
respond to the coronav1rus d1sease 2019 (cov1d-19) pandemic
and support initiatives for national economic recovery.
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Budget Comparison, 2020 vs 2021
PhP4.100T PhP4.506T
(21.7% of GDP)
9.9%
(21.8% of GDP)
Budget Dimensions by Sector 2020 Budget Growth 2021 Budget
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Note: Figures may not add up due to rounding off

Budget Dimensions by Expenses Class
(in Billion Pesos)
*Inclusive of Internal Revenue Allotment, Special Shares of LGUs in the

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Proceeds of National Taxes, Local Government Support Fund, MMDA and

Other Financial Assistance to LGUs, BARMM-Block Grant
**Inclusive of Financial Expenses
Note: Figures may not add up due to rounding off
Top 10 Departments
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*1/ Includes PhP71.4 billion budget of PhilHealth

2021 SPENDING PRIORITIES
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*Inclusive of PhP5.52 billion unprogrammed fund for the construction of

primary care facilities and PhP1.4 billion for medical infrastructure
projects funded by ADB and World Bank
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PART IV : Public Borrowings
• Mr. Jesryl Enilog

Public Fiscal Administration
Public Borrowing
Slide 1 of 22
Presentation Overview
 Theory of Public Debt
 Structure of Philippine Public Debt
 Public Debt: Issues and Problems
Slide 2 of 22
Slide 3 of 22
Theory of Public Debt
 What is Public Debt?
- money or credit owed by any level of

government
Obligations of government, particularly

those evidence by securities to pay certain
sums to the holders at some future date.
- Encyclopedia Britannica
Slide 4 of 22
Classical Theory of Public Debt
Formed during 18th century (Age of
Mercantilism) until 19th century (Age of
Capitalism)
Theory that believes in the essence of

“Laissez- Faire” policy.
Slide 5 of 22
Neo-Classical Theory of Public
Debt
 Extension of Classical Theory (later part
of 19th century)
Slide 6 of 22
Keynesion Theory of Public Debt
“Modern Theory of Public Debt”

• Government should control the economy
• Formed after the “Great Depression in 1930”
Slide 7 of 22
Sources of our nation’s fund and
resources:
• Taxes
• Selling of government’s properties
• Payments for IDs and certifications
• Penalties
• GOCCs
• DEBT
Slide 9 of 22
Four stages of Public Debt
according to Angel Yoingco
1. Borrowing the funds
2. Spending the funds
3. Raising revenue for payments
4. Actual debt repayment
Slide 8 of 22
Slide 10 of 22
Classification of Public Debt
 Sources
◦ Foreign
◦ Domestic
 Category
◦ Direct
◦ Guaranteed
◦ Non-Guaranteed
 Maturity
◦ Short term
◦ Medium term
◦ Long term
Slide 11 of 22
SOURCES: Philippine Domestic
Debt and Philippine Foreign Debt
 Domestic Debt (Internal)- owed to
lenders within the country
• Foreign Debt (External)- owes to foreign

creditors
Slide 12 of 22
Internal debt (Domestic)
(in million pesos)
as of September 2021
Loans - 540,156
Debt Securities - 7,847,597
Total - 8,387,753
Source: Debt Monitoring Analysis Division (DMAD)-BTr
Slide 13 of 22
External Debt (Foreign)
(in million pesos)
as of September 2021
 Loans - 1,987,144
 Debt Securities - 1,542,150
Total 3,529,394
Source: DMAD-BTr
Slide 14 of 22
CATEGORY: Direct, Guaranteed
and Non-guaranteed
 Direct- made directly from lender to
borrower, rather than a third party
 Guaranteed- promise by a one party to
assume the debt obligation of a borrower
 Non-guaranteed- not guaranteed for
repayment by a public entity because it is
payable solely from pledged specific for
earnings of revenue
Slide 15 of 22
MATURITY: Short term, Medium
term and Long term
 Short term - any financial obligation that
is either due within a 12-month period or
due within the current fiscal year
 Medium term- type of fixed income
security with a maturity, or date of
principal repayment, that is set to occur in
two to 10 years
 Long term- any liabilities to be paid within
11 years and above
Slide 16 of 22
BORROWING IS NOT A SIN
From an objective point of view, there are
benefits relating to a positive public debt
position
Government debt serves as an investment
instrument for the private sector.
-dbm
Slide 17 of 22
Government debt allows tax smoothing in
cases where there is sudden need to incur
large government expenditures.
-dbm
Slide 18 of 22
Should Filipinos worry about the
national debt?
 The government has no choice but to
borrow money to finance its pandemic
response. Experts say Filipinos shouldn’t
worry too much over borrowings
- JC PUNONGBAYAN, MARIANNE VITAL AND JEFF ARAPOC

Slide 19 of 22
Why can’t we just print more
money to pay debt?
Printing more money
- Consumers are able to demand more
goods, but if we will have same amount of
goods, suppliers will respond by putting
up prices.
Printing more money will cause inflation.
Slide 20 of 22
Walang silbi yang #feeling blessed mo pag
siningil ka na ng inutangan mo.
Sa ating panahon ngayon, mas tumatagal pa

ang utang kaysa sa inyong relasyon.
Slide 21 of 22
PART V : Compensation Plan in the Philippine Government

: COA Circular No. 2009-006 dated September 15, 2019
“Prescribing the Use of the Rules and Regulations on Settlement of Accounts”
• Mr. Bon Carlo Melocoton

COMPENSATION
PLAN IN THE
PHILIPPINE
GOVERNMENT
BY: GROUP 3 – COA GROUP
TOPICS TO BE DISCUSSED:
• The Declared Policy of the State on the Compensation Plan
• Benefits for Government Personnel
• Indicating its Legal Basis and the Salient Provisions
• ADD-ON TOPIC on the COA Circular No. 2009-006 dated September 15, 2019,
re: “Prescribing the Use of the Rules and Regulations on Settlement of Accounts”
THE DECLARED POLICY OF THE STATE ON THE
COMPENSATION PLAN
It is hereby declared the policy of the State to provide all government

personnel a just and equitable compensation in accordance with the principle of
equal pay for work of equal value. In pursuing this policy, the State shall ensure that:
❖Differences in pay shall be based upon substantive differences in duties,

responsibilities, accountabilities and qualification requirements of the positions
COMPENSATION PLAN
❖The compensation for all civilian government personnel shall be standardized and
rationalized across all government agencies to create an enabling environment that
will promote social justice, integrity, efficiency, productivity, accountability and
excellence in the civil service
❖The compensation of all civilian personnel shall generally be competitive with those
in the private sector doing comparable work in order to attract, retain and
motivate a corps of competent and dedicated civil servants.
COMPENSATION PLAN
❖A performance-based incentive scheme which integrates personnel and
organizational performance shall be established to reward exemplary civil servants
and well-performing organizations.
❖The compensation schemes shall take into consideration the financial capability of
the government and shall give due regard to the efficient allocation of funds for
personnel services, which shall be maintained at a realistic level in proportion to the
overall expenditure of government.
The Compensation Plan (CP) is an orderly scheme for determining rates of
compensation of government personnel. It was crafted to attract, motivate and
retain good and qualified people to accomplish the Philippine Government’s mission
and mandates, to encourage personal and career growth, and to reward good
performance and length of service. To achieve these goals, the CP has a mix of
compensation components which provide reasonable levels of compensation
packages within existing government resources, and are administered equitably
and fairly. These components are:
1. Basic Salaries including Step Increments;
2. Standard Allowances and Benefits;
3. Specific-Purpose Allowance and Benefits; and
4. Incentives.
BENEFITS FOR GOVERNMENT PERSONNEL
(LEGAL BASIS AND THE SALIENT PROVISIONS)
• Uniform/Clothing Allowance
• Mid-Year Bonus
• Year-End Bonus and Cash Gift
• Productivity Enhancement Incentive
• Performance-Based Bonus
• Collective Negotiation Agreement
• Loyalty Award
• Anniversary Bonus
ADD-ON TOPIC
COA Circular No. 2009-006 dated September 15, 2019,

“Prescribing the Use of the Rules and Regulations on
Settlement of Accounts”
Benefits for Government Personnel
(Legal Basis and the Salient Provisions)
Legal Basis : DBM Budget Circular No. 2018-1 dated March 8, 2018
Benefit Description : Uniform/Clothing Allowance - is granted to defray expenses for uniforms
or distinctive clothing which are the required appropriate attire for
employees in the regular performance of their work.
Coverage : • This Circular covers civilian government personnel occupying regular,
contractual, or casual positions; appointive or elective; rendering
services on full-time or part-time basis.
Exclusions : • Military personnel of the Armed Forces of the Philippines under
the Department of National Defense and uniformed personnel of the
Philippine National Police, Philippine Public Safety College, Bureau
of Fire Protection, and Bureau of Jail Management and Penology
under the Department of the Interior and Local Government,
Philippine Coast Guard under the Department of Transportation, and
the National Mapping and Resource Information Authority under the
Department of Environment and Natural Resources;
• Foreign service personnel of the Department of Foreign Affairs and
of other departments/agencies who are stationed abroad;
• Barangay officials and employees paid monthly honoraria; and
• Those hired without employer-employee relationships and funded
from non-Personnel Services appropriations/budgets
Guidelines for the : • Generally, the full rates of the U/CA for full-time and part-time service
Grant shall be granted to those who are already in government service and
are to render services for at least six (6) months in a particular fiscal
year, including leaves of absence with pay.
• The six (6)-month service requirement shall not cover those who are
required to wear uniforms at all times in the performance of their work
such as incumbents of positions of Security Guard, Special Police,
medical and allied medical staff in hospitals, and those in similar
situations, as they have to wear their uniforms at all times.
• The U/CA may be granted in the following forms:
o In the form of uniforms procured though a bidding process
which may include uniform articles normally worn as part
thereof such as regulation caps, belts, etc., for incumbents of
positions like Special Police, Security Guard, etc.;
o In the form of textile materials and cash to cover
sewing/tailoring costs, as has been adopted by very large
departments; and
o In cash form, for incumbents of executive positions who may
not be required to wear the prescribed uniforms, or for those
who will procure their individual uniforms according to set
conditions
Amount : • for full-time service of government personnel, it shall not exceed
PhP6,000 per annum
• for part-time service, it shall be in direct proportion to the U/CA for
full-time service
Date of Grant : • Release of U/CA shall be done not earlier than the first working day of
every year.

Group 3 – COA Group
Additional Provision : • A newly-hired employee may qualify to the grant of U/CA only after
rendering six (6) months of service, and if expected to render services
for at least six (6) months for the rest of the year.
• The U/CA of an employee on detail to another government agency
shall be borne by the mother agency
• An employee who transferred to another agency and was not granted
U/CA by the former agency shall be granted U/CA by the new agency,
subject to the submission of a certification to that effect.
• An employee who transferred to another agency within the year but
was earlier granted U/CA by the previous agency shall no longer be
granted U/CA by the new agency.
• An employee who transferred to another agency and is required to
wear uniforms at all times, may be granted U/CA by the new agency
even if he/she was granted U/CA by the former agency, subject to the
approval of the new agency head.
Legal Basis : DBM Budget Circular No. 2017-2 dated May 8, 2017
With clarification per:

DBM Budget Circular No. 2019-4 dated July 5, 2019
Type of Bonus : Mid-Year Bonus – form part of the Total Compensation Framework
granted to those who have rendered at least four (4) months of satisfactory
service and are still in the service as of the same date.
Coverage : • All positions for civilian personnel, whether regular, casual, or
contractual in nature, appointive or elective, full-time or part-time,
now existing or hereafter created in the Executive, Legislative and
Judicial Branches, the Constitutional Commissions and other
Constitutional Offices, SUCs, and GOCCs covered by the
Compensation and Position Classification System (CPCS) under RA
No. 6758, as amended by Congress Joint Resolution No. 1, series of
1994, and No. 4, series of 2009, and in LGUs; and,
• Military personnel of the Armed Forces of the Philippines under the
Department of National Defense and uniformed personnel of the
of Fire Protection, and Bureau of Jail Management and Penology of
the Department of the Interior and Local Government; Philippine
Coast Guard of the Department of Transportation; and National
Mapping and Resource Information Authority of the Department of
Environment and Natural Resources.
Exclusions : • Government personnel from agencies, including GOCCs, that are
exempted from RA No. 6758, as amended, as expressly provided in
their respective enabling law or charter, and are actually implementing
their respective CPCS approved by the President of the Philippines
• Government personnel from GOCCs covered by the CPCS established
by the Governance Commission for GOCCs and approved by the
President of the Philippines pursuant to RA No. 10149; and

Condition for Grant : • Personnel has rendered at least a total or an aggregate of four (4)
months of service from July 1 of the immediately preceding year to
May 15 of the current year;
• Personnel remains to be in the government service as of May 15 of the
current year; and
• Personnel has obtained at least a satisfactory performance rating in the
immediately preceding rating period, or the applicable performance
appraisal period.
Amount : • Mid-Year Bonus equivalent to one (1) month basic pay as of May 15
Release of Bonus : • Not earlier than May 15 of the current year.
Additional Provision : • Those who have rendered a total or an aggregate of less than four (4)
months of service from July 1 of the preceding year to May 15 of the
current year, and those who are no longer in the service as of the latter
date, shall not be entitled to the Mid-Year Bonus.
• The Mid-Year Bonus of personnel hired on part-time service in one or
more agencies shall be in direct proportion to the number of
hours/days of part-time services rendered.
• The Mid-Year Bonus of those on detail to another government agency
shall be paid by the parent agency, while those on secondment shall be
paid by the recipient agency.
• The Mid-Year Bonus of personnel who transferred from one agency to
another shall be paid by the new agency. compulsory retiree, whose
services have been extended, may be granted Mid-Year Bonus, subject
to the pertinent provisions of this Circular.
• Those who are formally charged administrative and/or criminal cases
which are still pending for resolution, shall be entitled to Mid-Year
Bonus until found guilty by final and executory judgment: Provided,
that:
o Those found guilty shall not be entitled to Mid-Year Bonus in
the year of finality of the decision. The personnel shall refund
the Mid-Year Bonus received for that year.
o If the penalty imposed is only a reprimand, the personnel
concerned shall be entitled to the Mid-Year Bonus
Legal Basis : DBM Budget Circular No. 2016-4 dated April 28, 2016
Type of Bonus : Year-End Bonus and Cash Gift - are intended as year-end premiums to
government personnel for satisfactory and dedicated service. The
liberalization of the grant thereof is authorized pursuant to the pertinent
general provision in the annual GAA.
Coverage : • All positions for civilian personnel whether regular, contractual, or
casual in nature, appointive or elective, full-time or part-time now
existing or hereafter created in the Executive, Legislative and Judicial
Branches, the Constitutional Commissions and other Constitutional
Offices, SUCs, and GOCCs covered by the Compensation and
Position Classification System (CPCS) under RA No. 6758, as
amended by Senate and House of Representatives Joint Resolutions
No. 1, series of 1994 and No. 4, series of 2009; and in LGUs; and

• Military personnel of the Armed Forces of the Philippines under the

Department of National Defense and uniformed personnel of the
of Fire Protection, and Bureau of Jail Management and Penology of
the Department of the Interior and Local Government; Philippine
Coast Guard of the Department of Transportation and
Communications; and National Mapping and Resource Information
Authority of the Department of Environment and Natural Resources.
Exclusions : • Government personnel from agencies, including GOCCs, that are
exempted from RA No. 6758, as amended, as expressly provided in
their respective enabling law or charter, and are actually implementing
their respective CPCS approved by the President of the Philippines
• Government personnel from GOCCs covered by the CPCS established
by the Governance Commission for GOCCs and approved by the
President of the Philippines pursuant to RA No. 10149; and
Condition for Grant : • Personnel has rendered at least a total or an aggregate of four (4)
months of service from January 1 to October 31 of the current year;
• Personnel remains to be in the government service as of October 31 of
the same year.
Amount : • Year-End Bonus equivalent to one (1) month basic pay as of October
31
• Cash Gift of PhP5,000.00
For Barangay Personnel

• As determined by the respective sanggunian, elective or appointive
barangay officials or employees who have rendered at least a total or
an aggregate of four (4) months of service from January 1 of the
current year and who are still in the service as of October 31 of the
same year, may be entitled to the Year-End Bonus equivalent to one
(1) month Honorarium received as of October 31 and Cash Gift of
P5,000.
Release of Bonus : • Not earlier than November 15 of the current year
Additional Provision : • Those who have rendered at least a total or an aggregate of four (4)
months of service from January 1 of the current year but who have
retired or separated from government service before October 31 of the
same year shall be granted within the month of retirement or
separation, a prorated share of the: a) Year-End Bonus based on the
monthly basic pay immediately preceding the date of retirement or
separation; and b) Cash Gift of P5,000
• Those who have rendered a total or an aggregate of less than four (4)
months of service from January 1 to October 31 of the current year and
are still in government service as of October 31 of the same year, shall
be entitled solely to a pro-rated Cash Gift
• The Year-End Bonus and Cash Gift of personnel hired on part-time
service in one or more agencies shall be in direct proportion to the
number of hours/days of part-time services rendered.

• The Year-End Bonus and Cash Gift of personnel on detail with

another government agency shall be paid by the parent agency, while
those on secondment shall be paid by the recipient agency.
• The Year-End Bonus and Cash Gift of personnel transferred from one
agency to another shall be paid by the new agency.
• A compulsory retiree, whose services have been extended, may be
granted Year-End Bonus and Cash Gift, subject to pertinent provisions
of this Circular.
• Those who are formally charged administrative and/or criminal cases
which are still pending for resolution, shall be entitled to Year-End
Bonus and Cash Gift until found guilty by final and executory
judgment, provided that:
o Those found guilty shall not be entitled to Year-End Bonus
and Cash Gift in the year of finality of the decision. The
personnel shall refund the Year-End Bonus and Cash Gift
received for that year
concerned shall be entitled to the Year-End Bonus and Cash
Gift.
Legal Basis : DBM Budget Circular No. 2017-4 dated December 4, 2017
Benefit Description : Productivity Enhancement Incentive - is an existing across-the-board
bonus, given equally to government employees for the purpose of
improving the government employees' productivity.
Coverage : • All positions of civilian personnel, whether regular, casual, or
contractual in nature, appointive or elective, full-time or part-time,
now existing or hereafter created in the Executive, Legislative, and
Judicial Branches, the Constitutional Commissions and other
Constitutional Offices, SUCs, GOCCs not covered by Republic Act
(RA) No. 10149, s. 2011 which are under the jurisdiction of the
Department of Budget and Management (DBM), and LWDs, and in
LGUs
• Military personnel of the Armed Forces of the Philippines and the
Department of National Defense; and uniformed personnel of the
of Fire Protection, and Bureau of Jail Management and Penology
under the Department of the Interior and Local Government;
Philippine Coast Guard under the Department of Transportation; and
National Mapping and Resource Information Authority under the
Department of Environment and Natural Resources.
Exclusions : • Excluded from the coverage of this Circular are those hired without
employee-employer relationships and funded from non-Personnel
Services appropriations/budgets,
Guidelines for the : • The employees are still in the service as of November 30 of the current
Grant year; and
• The employees have rendered at least a total or an aggregate of four
(4) months of at least satisfactory service as of November 30 of the
current year, including leaves of absence with pay.

Amount : • Five Thousand Pesos (PhP5,000.00)

Date of Grant : • Not earlier than December 15 of the current year
Additional Provision : • Those who have rendered less than the total or aggregate of four (4)
months of service but still in the service as of November 30 of the
current year shall be entitled to pro-rated PEI,
• The PEI of an employee on part-time basis shall be pro-rated
corresponding to the services rendered. If employed on part-time basis
with two (2) or more agencies, an employee shall be entitled to
proportionate amounts corresponding to the services in each agency,
provided that the total PEI shall not exceed the authorized amount.
• The PEI of an employee who transferred from one agency to another
shall be granted by the new agency.
• The PEI of an employee on detail to another government agency shall
be granted by the parent agency.
• A compulsory retiree, on service extension as of November 30 of the
current year, may be granted the PEI, subject to the pertinent
conditions and guidelines under this Circular.
• Personnel who were formally charged with administrative and/or
criminal cases, which are still pending for resolution, shall be entitled
to PEI until found guilty by final and executory judgment, provided
that:
o Those found guilty shall not be entitled to PEI in the year of
finality of the decision. The personnel shall return the PEI
received for that year.
concerned shall be entitled to the PEI.
Legal Basis : DBM Memorandum Circular No. 2021-1 dated June 3, 2021
With supplemental guidelines per

DBM Memorandum Circular No. 2021-2 dated October 25, 2021
Benefit Description : Performance-Based Bonus - shall measure and evaluate the performance
of agencies with emphasis on the public’s satisfaction on the realization of
the agencies’ performance targets, quality of service delivery, efficiency in
the use of resources, and strengthened agency stewardship.
Coverage : • The FY 2021 PBB covers all departments, bureaus, offices, and other
agencies of the National Government, including Constitutional
Commissions, Other Executive Offices (OEOs), Congress, the
Judiciary, Office of the Ombudsman, State Universities and Colleges
(SUCs), Government-Owned or-Controlled Corporations (GOCCs),
Local Water Districts (LWDs), and Local Government Units (LGUs).
• The personnel of agencies holding regular, contractual, and casual
positions are covered by this Circular.
Exclusions : • Excluded from the coverage herein are individuals engaged without
employer-employee relationship and funded from non-Personnel
Services (PS) budget.
Guidelines for the : • To be eligible for the grant of the FY 2021 PBB, each agency must
Grant satisfy the criteria and conditions under the four dimensions of

accountability: Performance Results, Process Results, Financial

Results, and Citizen/Client Satisfaction Results and attain a total score
of at least 70 points based on the PBB Scoring System
o Performance Results refer to the accomplishment of the
Congress-approved performance targets under the
Performance-Informed Budgeting (PIB) of the FY 2021
General Appropriations Act (GAA). This physical target is an
existing eligibility criterion for SUCs and is only reinstated in
the case of the national government agencies (NGAs).
o Process Results refer to the achievements in ease of doing
business/ease of transaction with the agency as a result of
streamlining, standardization, digitization, and related
improvements in the delivery of services. This is an existing
criterion for NGAs and the GOCCs covered by the DBM.
o Financial Results refer to the actual spending of the agency’s
budget allotment vis-a-vis the realization of the committed
programs and projects based on the FY 2021 GAA. The
Disbursements BUR as well is a prevailing common target of
all agencies.
o Citizen/Client Satisfaction Results refer to the achievements in
satisfying the quality expectations of the transacting public.
Amount : • Total score is 100 points = 65% of the monthly basic salary
• Total score is 95 points = 61.75% of the monthly basic salary
• Total score is 80 points = 52% of the monthly basic salary
Note: Monthly Basic Salary of an individual is as of December 31, 2021
Date of Grant : • To be given in FY 2022 upon favorable assessment of the respective
oversight agencies
Additional Provision : • Personnel in detail to another government agency for six (6) months or
more shall be included in the recipient agency that rated his/her
performance. The payment of the PBB shall come from the mother
agency
• Personnel who transferred from one government agency to another
agency shall be included by the agency where he/she served the
longest. If equal months were served for each agency, he/she will be
included in the recipient agency.
• Officials and employees who transferred from government agencies
that are non-participating in the implementation of the PBB shall be
rated by the agency where he/she served the longest; the
official/employee shall be eligible for the grant of the PBB on a pro-
rata basis corresponding to the actual length of service to the
participating implementing agency
• An official or employee who has rendered a minimum of nine (9)
months of service during the fiscal year and with at least a Very
Satisfactory rating may be eligible for the full grant of the PBB.

• An official or employee who rendered less than nine (9) months but a
minimum of three (3) months of service and with at least a Very
Satisfactory rating shall be eligible for the grant of the PBB on a pro-
rata basis corresponding to the actual length of service rendered
• An employee who is on vacation or sick leave, with or without pay, for
the entire year is not eligible for the grant of the PBB.
• Personnel found guilty of administrative and/or criminal cases by final
and executory judgment in FY 2021 shall not be entitled to the PBB. If
the penalty meted out is only a reprimand, such penalty shall not cause
the disqualification to the PBB.
• Officials and employees who failed to submit the 2020 SALN as
prescribed in the rules provided under CSC Memorandum Circular No.
3 s. 2015; or those who are responsible for the non-compliance with
the establishment and conduct of the review and compliance procedure
of SALN, shall not be entitled to the FY 2021 PBB.
• Officials and employees who failed to liquidate all cash advances
received in FY 2021 within the reglementary period, as prescribed in
COA Circular 97-002 dated February 10, 1997, and reiterated in COA
Circular 2009-002 dated May 18, 2009, shall not be entitled to the FY
2021 PBB.
Legal Basis : DBM Budget Circular No. 2021-3 dated November 17, 2021
Benefit Description : Collective Negotiation Agreement - -This may be granted to both
management and rank-and-file employees of agencies with approved and
successfully implemented CNAs in recognition of their efforts in
accomplishing performance targets at lesser cost, in attaining more
efficient and viable operations through cost-cutting measures and systems
improvement
Coverage : • This Circular covers the following civilian personnel occupying
regular, contractual, or casual positions rendering services on full-time
or part-time basis in national government agencies (NGAs), including
Constitutional Offices enjoying fiscal autonomy, SUCs, GOCCs,
LWDs, and LGUs, whether or not covered by Republic Act (RA) No.
6758
o Rank-and-file employees who are members of an employees'
organization accredited by the Civil Service Commission
(CSC) as the sole and exclusive negotiating agent (hereinafter
referred to as "negotiating agent") in accordance with rules and
regulations issued by the Public Sector Labor Management
Council (PSLMC);
o Rank-and-file employees who are non-members of the CSC-
accredited sole and exclusive negotiating agent but want to
enjoy or accept benefit under the CNA, subject to payment of
agency fee to the negotiating agent in accordance with
PSLMC Resolution No. I5, s. 1993; and
o Those who perform managerial functions
Exclusions : • All other individuals not included in Section 3.0 of DBM Budget
Circular No. 2021-3

Guidelines for the : • Existence of a CNA

Grant o There should be a valid and subsisting CNA executed between
the representatives of the management and the employees'
organization accredited by the CSC as the sole and exclusive
negotiating agent for the purpose of collective negotiations
with the management of a department, line bureau, attached
agency. Constitutional Offices, sue, GOCC, LWD, or LGU.
o The grant of the CNA Incentive must be stipulated in the CNA
or in supplements thereof
• Accomplishment of Targets
o The NGAs, including Constitutional Offices enjoying fiscal
autonomy, SUCs, and GOCCs not covered by RA No. 10149,
s. 2011 should have accomplished, by September 30, 2021, at
least an average of 70% of all the targets for all the
organizational outcomes/ performance indicators under their
respective FY 2021 budget approved by Congress, or the
approved FY 2021 Corporate Operating Budget (COB),
whichever is applicable.
o GOCCs covered by RA No. 10149 should have accomplished,
by September 30, 2021, at least an average of 70% of all the
targets under their respective Performance Scorecard, as
agreed upon between the Governance Commission for GOCCs
(GCG) and the GOCC pursuant to GG Memorandum Circular
No. 2017-027 dated June 30, 2017.
o LWDs should have a positive net balance in the average net
income for the period January 1 to September 30, 2021, to be
validated by the Local Water Utilities Administration.
o LGUs should have accomplished, as of September 30, 2021, at
least an average of 70% of all the targets under their
programs/activities/projects approved in the LGU budget for
FY 2021.
• Submission of Accountability Reports
o The NGAs, including Constitutional Offices enjoying fiscal
autonomy and SUCs, should have submitted to DBM their
respective accountability reports as of September 30, 2021
pursuant to Commission on Audit (COA)-DBM Joint Circular
No. 2014-1 dated July 2, 2014, as amended by COA-DBM JC
No. 2019-1 dated January 1, 2019.
Amount : • CNA Incentive shall not exceed P25,000 per qualified employee.
• The rate of the CNA Incentive shall not be pre-determined in the CNA
since it is subject to compliance with the conditions and the
availability of the allowable allotments.
Date of Grant : • CNA Incentive for the year shall be a one-time benefit to be granted
not earlier than December 15, 2021.
Additional Provision : • It cannot be given immediately upon signing and ratification of the
CNA as this will transform the CNA Incentive into a CNA Signing
Bonus which the Supreme Court, in the case of Social Security System
vs. COA, has prohibited for not being a truly reasonable compensation.

• The CNA Incentive for the year shall be granted only during the
validity of appropriations from which the available MOOE allotments
shall be sourced.
• The amount paid as CNA Incentive shall be recorded in the agency
books under the account code "Collective Negotiation Agreement
Incentive-Civilian," "Other Benefits," and "Collective Negotiation
Agreement Incentive" for NGAs, LGUs, GOCCs, and LWDs,
respectively.
• Agencies are advised that additional funds can no longer be provided
during the remainder of the current year for those program, projects,
and activities covered by the MOOE allotments which are to be
modified to fund the CNA Incentive.
Legal Basis : CSC Memorandum Circular No. 06 s. 2002

Benefit Description : Loyalty Award – This was formulated to recognized the continuous and
satisfactory service rendered in the government by officials and employees
for a period of ten (10) years.
Coverage : • Granted to all officials and employees, in the national and local
governments, including those in the state colleges and universities and
government -owned and -controlled corporations with original charter,
who rendered ten (10) years of continuous and satisfactory service in
the government.
Exclusions : • Government employees who did not meet the guidelines for the grant
of loyalty award
Guidelines for the : • The particular agency where the employee or official completed the
Grant ten (10) years of continuous and satisfactory service shall grant the
award.
• An official or employee who incurred an aggregate of not more than
50 days authorized vacation leave without pay within the 10-year
period shall be considered as having rendered continuous service for
purposes of granting the loyalty award.
• In the same way, an official or employee who incurred an aggregate of
not more than twenty-five (25) days authorized vacation leave without
pay within the 5-year period may qualify for the 5-year milestone
loyalty award
Amount : • A cash gift which shall not be less than PhP500.00 but not more than
PhP1,000.00 for every year of service shall be given to qualified
officials or employees plus the loyalty memorabilia/souvenir
Date of Grant : • The payment of the loyalty award is preferably on the employee’s
loyalty year
Additional Provision : • Effective January 1, 2002, continuous and satisfactory services in
government for purposes of granting loyalty award shall include
services in one or more government agencies without any gap.
• Services rendered in other government agencies prior to January 1,
2002 shall not be considered for purposes of granting the loyalty
award.
• The awardee shall receive a loyalty memorabilia/souvenir as follows:
o 10 and 15 years = bronze service pin

o 20 and 25 years = silver service ring

o 30, 35 and 40 years = gold service medallion
or other memorabilia/souvenir as may be provided in the agency
PRAISE.
Legal Basis : DBM National Budget Circular No. 452 dated May 20, 1996
Benefit Description : Anniversary Bonus – are granted on the occasion of milestone years of
government agencies to directly improve and enhance employee morale
Coverage : • All government personnel whether employed on a full-time or regular,
part-time basis or under permanent, temporary or casual status, and
contractual personnel whose employment is in the nature of a regular
employee, who have been appointed as such in a specific government
entity by virtue of a valid appointment and continue to be employed in
the same government entity as of the occasion of its milestone
anniversary, shall be entitled to the anniversary bonus.
Exclusions : • Those who are on absence without leave (AWOL) as of the date of the
milestone year for which the Anniversary Bonus is being paid;
• Those who are no longer in the service in the same government entity
as of the date of the milestone year.
• Those who are not hired as part of the organic manpower of
government entities but as consultants or experts for a limited period
to perform specific activities or services with expected outputs; student
laborers; apprentices; laborers of contracted projects: mail contractors,
including those paid by piecework basis: and others similarly situated.
Guidelines for the : • Officials and employees may be granted Anniversary Bonus only if the
Grant government entity where they are employed has been in existence for
at least fifteen (15) years and has not yet granted any Anniversary
Bonus as of FY 1996, and have rendered at least one (1) year service
in the same government entity as of the date of the milestone year
Amount : • PhP3,000.00 per official and employee every milestone year
Date of Grant : • On the milestone anniversary of the agency
Additional Provision : • The counting of milestone years shall start from the year the
government entity was created regardless of whether it was
subsequently renamed/reorganized provided that its original primary
functions have not substantially changed. Otherwise, the counting shall
start from the date the functions were substantially changed.
• The counting of the milestone years of merged government entities
shall start from the date they were merged.
• The initial grant of Anniversary Bonus in 1996 shall be for the latest
milestone only, regardless of whether the government entity has
existed for 30,35, 50, or 60 or more years. There shall be no
retroactive payment of milestone years
• Officials and employees in government entities attached to or are
placed directly under a department/department level government entity
and whose creation is not through charter may be considered as
organic personnel of the mother department for purposes of availment
of the Anniversary Bonus due the officials and employees of the
department.

COA Circular No. 2009-006 dated September 15, 2009

Prescribing the use of the Rules and Regulations on Settlement of Accounts
Settlement of accounts is the process of determining the balance of the account of an accountable
officer, through an audit and examination thereof.
The settlement of accounts shall be evidenced by an appropriate marking in the documents audited
as prescribed by the Commission. If no balance in the account is found or the transaction is allowed in
audit, the audited documents shall indicate “Allowed in Audit”. Otherwise, a Notice of Suspension, Notice
of Disallowance or Notice of Charge shall be issued and the documents marked accordingly, with amount
suspended/disallowed/charged indicated therein.
1. The audit and examination of transactions pertaining to an account shall be done in accordance
with laws, rules, regulations and standards to determine whether these transactions may be allowed,
suspended, disallowed or charged in audit.
2. The Auditor shall issue an AOM for observations relating to financial/operational deficiencies such
as accounting, internal control or property management which do not involve pecuniary loss.
An AOM may also be issued for documentary or other information requirements to enable the
auditor to make a decision in audit.
The AOM shall be replied to by the agency officials concerned within fifteen (15) calendar days
from receipt thereof.
If the agency officials fail to reply within the period specified, the audit observation on
financial/operational deficiencies shall be deemed accepted and shall be included in the Audit
Report.
In case of failure to submit or insufficiency of the required documents or information needed to

reach an audit decision, an NS/ND/NC may be issued by the Auditor, as warranted, after a re-
evaluation of available documents/information.
3. The Auditor shall issue a Notice of Suspension for transactions of doubtful
legality/propriety/regularity which may result in pecuniary loss of the government, and which will
be disallowed in audit if not satisfactorily explained or validly justified by the parties concerned
A NS should be settled within ninety (90) calendar days from receipt of the NS; otherwise the
transaction covered by it shall be disallowed/charged after the Auditor shall have satisfied himself
that such action is appropriate and the Auditor shall issue the corresponding ND/NC
4. The Auditor shall issue a Notice of Disallowance for transactions which are irregular, unnecessary,
excessive and extravagant as defined in COA Circular No. 2012-003 dated October 29, 2012
“Updated Guidelines for the Prevention and Disallowance of Irregular, Unnecessary, Excessive,
Extravagant and Unconscionable Expenditures” as well as other COA issuances
The ND shall be settled within six (6) months from receipt of the ND by the persons liable

Only disallowed salaries and personal benefits, allowances or emoluments may be allowed to be
settled by installments.
5. The Auditor shall issue the Notice of Charge, if the amount assessed/appraised, billed, or collected
is less than what is due the government, the difference shall be a proper audit charge.
The audit charge shall be settled within six (6) months from receipt of the NC
6. Settlement of NS/ND/NC
A NS shall be settled by the submission of justification/explanation and/or documentation required

under an NS and after the Auditor becomes satisfied that the transaction is regular/legal/proper and
that no loss was suffered by the government.
A ND/NC shall be settled by payment of the amount disallowed or by such other applicable mode
of extinguishment of obligation as provided by law. Settlement of ND/NC may also result from a
decision of the Director, Commission Proper, Supreme Court lifting the disallowance or charge.
7. Period to Appeal
Any person aggrieved by a disallowance or charge may within six (6) months from receipt of the
notice, appeal in writing as prescribed in these Rules.
A disallowance or charge not appealed within the period prescribed shall become final and
executory.
The filing by the aggrieved party of an appeal will suspend the running of the prescribed period
and will resume upon receipt of a decision from the Director or the Commission Proper.
8. Appeal to the Supreme Court
The party aggrieved by any decision, order, or ruling of the Commission Proper may within thirty
(30) days from his receipt of a copy thereof, appeal on certiorari to the Supreme Court in the
manner provided by law and Rules of Court

END of the REPORT
God Bless
Keep Safe

GROUP 03.public Fiscal Administration

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PUBLIC FISCAL

Subject : PA 203 – Principles of Public Administration

Instructor : Prof. Jaymar Manduyog

The COA Group : Ms. Arianne Joy Escamilla

Date Reported : December 4, 2021

PART I : Government Income

PART II : Withholding Tax System

PART III : Budgeting in the Philippines

PART IV : Public Borrowings

PART V : Compensation Plan in the Philippine Government

PUBLIC FISCAL ADMINISTRATION

PART I : Government Income

• Ms. Arianne Joy Escamilla

• Ms. Jean Kenneth Alonto

1. Power of Taxation. It is the power by which the State

2. Police Power. It is the power of the State for promoting

3. Power of Eminent Domain. It is the power of the State to

Taxation is the process or means by which

❖ The primary purpose of taxation on the part of the

Secondary: Regulatory (Sumptuary/ Compensatory)

Taxable Income – means the pertinent items of Gross Income specified

1. Salaries 12. Commission on insurance premium.

• INCOME - refers to all revenues and receipts collected or received

• Revenue from Exchange Transactions

• Sale of goods or provisions of services to third parties or to other NGAs

PUBLIC FISCAL ADMINISTRATION

PART II : Withholding Tax System

• Mr. John Paul Gomez

• Ms. Johna Belle Solas

Prescribed Withholding P6,602.74 +35% over

P6,602.74 +35% over

P2,500.00 +25% over P9,423.08 +30% over P46,346.15 +35% over

P10,833.33 +25% over P40,833.33 +30% over P200,833.33 +35% over

Certificate of Income Payment Not Subject

BIR FORM NO. 2306 Certificate of Final Tax Withheld at Source

Certificate of Compensation Payment/Tax

Expanded Withholding Tax Rates

PUBLIC FISCAL ADMINISTRATION

PART III : Budgeting in the Philippines

• Ms. Lady Ann Abella

• Ms. Jean Kenneth Alonto

Government budgeting is important because it

➢ Budget Preparation Budget

During the preparation phase, the Executive prepares the proposed

● This new process, which was piloted in the

● The Aquino government, through the Cabinet Cluster on Human Development

● A reform that restructures the current Budget by grouping activities

are invited to this meeting.

● The President’s Budget consists of the following

The House of Representative, in plenary, assigns the President's Budget to the

● The Committee submits its proposed amendments to the GAB to

plenary only after it has been formally transmitted by the House.

● The Harmonized or "Bicam" Version is then submitted to

● Funding for programs or projects that have already been

1. Release Guidelines & Program

● The budget execution phase begins with DBM’s

● Agencies are required to submit their BEDs at

● ·The ARP of each agency corresponds to the total amount of the

and for every month.

● Allotments , which authorize an agency to enter into an obligation,

● This document disaggregates all programmed appropriations for each

● The ABM is the comprehensive allotment release document