NORMAN C.

RAMON, CPA, MBA

1. Weighing the impact of law-making vis-à-vis budget implementation and budget

utilization. The power of the purse is said to be assigned by the 1987 Constitution via
the provision, “No money shall be paid out of the Treasury except in pursuance of an
appropriation made by law.” But who really controls the national budget? Your
questions are: What evidence are there to show that the Congress (HREP and Senate
collectively) is in effective control of the power of the purse? Or what evidence are
there that prove that Congress has relinquished to the Executive Branch/Office of
the President and DBM the control over the national budget policy and
implementation? What instances show that the OP/DBM have taken an upper-hand
on decisions which should have been legislative acts of Congress?

The process of the national budget, from preparation to securing of accountability, is

governed by the 1987 Constitution. Conceptually, there is no one specific person who has
the control over the national budget to maintain democracy and the check and balance
system. The Office of the President, represented by the Department of Budget and
Management, shall submit to Congress a proposed budget for the upcoming fiscal year. This
budget proposal should be detailed and itemized (preparation phase). Next, the deliberation
and discussion of the Congress, both the House of Representative and the Senate (budget
legislation and authorization phase). The constitution allows the President to veto any item
in the appropriations bill. However, the President's veto power is limited to the item or
items in the bill, and the rest of the bill shall become law. After the General Appropriation
Act is enacted, government agencies receive their budget allotments. The Department of
Budget and Management (DBM) is responsible for allocating and releasing funds to agencies
based on the approved budget. The budget is divided into operational and capital outlays.
Government agencies are responsible for executing their respective budgets in accordance
with the GAA. This involves spending funds as allocated for specific programs, projects, and
activities (budget implementation and execution phase). Various government agencies and
offices, including the Commission on Audit (COA), play a role in monitoring budget
execution. The COA conducts financial and compliance audits to ensure that funds are used
efficiently and in compliance with laws and regulations. The government is required to
maintain transparency and accountability in budget execution. This includes the submission
of regular financial reports, publication of budget documents, and the involvement of civil
society in monitoring government spending (budget accountability phase).

Being straightforward, there is no obvious evidence and instance that the Office of
the President and the Department of Budget and Management obtained significant control
or power over the Congress. Technically, the process provided by the constitution is
followed but, through political influence of the Office of the President to the HEP and Senate
having the “super majority bloc”, it has obtained indirect power to set the national budget
the way they wanted it to be.
 2. We have heard in budget hearings that both executive and legislative agencies of
government invoking the 'limited fiscal space' that the government is currently into.
What is fiscal space? Do you agree that the government is currently experiencing
'limited fiscal space'? What evidences are there to support that claim? Otherwise,
what evidences are there to debunk this claim?

"Fiscal space" is an economic and financial concept that refers to the capacity of a
government to use its fiscal or budgetary policy to increase public spending or reduce taxes
without jeopardizing its fiscal sustainability. In simpler terms, it represents the room or
flexibility a government has within its budget to accommodate new spending initiatives or
tax cuts.
Fiscal space is not a fixed or absolute concept. It can change over time due to
economic fluctuations, policy decisions, and external factors. Effective fiscal management
and a realistic assessment of fiscal space are important for maintaining a stable and
sustainable fiscal policy. There are things within and beyond our control that can affect fiscal
space. We can say that we are experiencing limited fiscal space because of those factors
beyond our control such as economic growth and external factors, such as global economic
conditions and international financial markets, can impact fiscal space by affecting exchange
rates, trade, and the cost of borrowing. On the other hand, I disagree that we are
experiencing limited fiscal space if we are talking about government revenue, debt,
efficiency in public spending and monetary policy, in which our government has the power
to control to by passing tax laws to collect more revenue and enhance debt credibility.