PHILIPPINE

BUDGET CYCLE
Abaco, Dexter Carl
Aguirre, Kim
Agustin, Sharmaine
Cipriano, Jerly
Gani, Naisah
Jerusalem, Jay
Langurayan, Miguel
Liclic, Sofia Faith
 approved by the congress
 citizen’s
interests
 implemented by the different agencies
and needs
Government Budgeting
It is the critical exercise of allocation 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.
Importance of Budget
Instrumental For Good Governance

Administrative tool: assignment of authorities and responsibilities to

government units to perform budgeted tasks.

Performance Measurement Tool: performance measurement tool &

exacting desired results from authorized expenditure.
Importance of Budgets
Instrumental For Development

Political Tool: a tool for exercising power and for decision making
(Budget Politics)

Socio-Economic Tool: raising resources and allocating them to achieve

socio-economic goals (Budget and Economy)

Human Development Tool: Financing public goods and services that

enhance human development (Budget and Human Development)
Budget Cycle
Annual Cash Based Budgeting
BUDGET PREPARATION
Development Budget Coordination
Committee
They determine the overall economic targets, expenditure
levels, the revenue projection, deficit levels and the financing plan.
The following are then submitted to the President and the Cabinet
for approval.
Development Budget Coordination Committee

Wendel Avisado
Ernesto Pernia
Chairman
Co-Chairman
Secretary of Department of Budget
Director General National Economic and Development Authority
and Management
 Bangko Sentral ng Pilipinas
Carlos Dominguez III Member
Executive Secretary
Secretary Department of Finance
Budget Call
• It contains budget parameters including macroeconomic and sical
targets and agency budget ceilings as set beforehand by the
Development Budget Coordination Committee. Policy guidelines and
procedures in the preparation and submission of agency budget
proposals.
• issued on December of Prior Year
Stakeholder Engagement
• It 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.

• Prepared on January – February

Technical Budget Hearing
• 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 tha gency proposals
and prepare recommendations.

• Prepared on February
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, in relation to the priority agenda of the
national government.

• Implementation issues are also discussed and resolved.

• May – June
Consolidation, Validation and
Confirmation
• DBM then consolidates the recommended agency budgets and
recommendations into a National Expenditure Program and a Budget
of Expenditures and Sources of Financing.

• 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 are invited to this meeting.
• prepared June of Prior Fiscal Year
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.
• prepared July of Prior Fiscal Year
the President’s Budget
• The budget preparation phase ends with the proposed national
budget which is the “President’s Budget” to Congress.

• The President’s Budget consists of the following documents, which

help legislators analyse the contents of the proposed budget:

• prepared on July-August of Prior Fiscal Year

 comPosition of President’s Budget
1. President’s Budget Message
- This is where the President explains the policy framework and priorities in the budget.

2. Budget of Expenditures and Sources of Financing

- Mandated by the Constitution, this contains the macroeconomic 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.

3. National Expenditure Program

- Contains 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.

4. Details of Selected Programs and Projects

- It 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.

5. Staffing Summary
- It contains a summary of the staffing complement of each department and agency, including number of positions and
amounts allocated for the same.
SECTORAL ALLOCATION OF NATIONAL GOVERNMENT BUDGET
Social Services a) education, culture and manpower development.;
b) health services;
c) social security;
d) housing and community development
e) land distribution.

Economic Services a) communication, roads and transportation facilities;

b) agriculture, agrarian reform and natural resources;
c) water resources development and flood control;
d) trade and industry
e) power and energy
f) tourism.
SECTORAL ALLOCATION OF NATIONAL GOVERNMENT BUDGET

Defense Expenditures that support the general effort to ensure

national security, stability and peace which are
indispensable to economic growth and development.

General Public a) General administration;

Services b) public order and safety

Debt Burden Expenditures that go into servicing government’s

regular and assumed debts from foreign and domestic
sources including interest payments.
GOVERNMENT EXPENDITURES CATEGORIZED BY COST STRUCTURE:
GENERAL Expenditures for general
ADMINISTRATI administration represent those that
ON AND are normally considered as agency
SUPPORT
overhead which the agency will incur
to exist as a unit.
SUPPORT TO Refers to those activities that facilitate
OPERATIONS the performance of the agency’s
mandated function and services.
PROJECTS are those that fund activities which
result in the accomplishment of
identifiable outputs within a
designated period.
BUDGET
LEGISLATION
 HOUSE
DELIBERATION

SENATE
ENACTMENT
DELIBERATION

 ALSO, CALLED AS BUDGET

AUTHORIZATION VETO BICAMERAL
MESSAGE DELIBERATIONS
 STARTS UPON  HOUSE SPEAKER’S
RECEIPT OF PRESIDENT’S BUDGET
RATIFICATION
 ENDS WITH  PRESIDENT’S AND
ENACTMENT OF GENERAL ENROLLMENT
APPROPRIATION’S ACT
 HOUSE DELIBERATION

Committee
House General
House of
Representative
Appropriations Appropriations
committee
Sub Bill (GAB)
committee

• Sponsored, presented &

defended by
Appropriations Committee
and Sub-committee
chairmen.
• In all other laws, it is
approved on Second and
third reading before
transmission to senate
• prepared August – October of Prior FY •
SENATE DELIBERATION

 Conduct its own committee hearings and plenary deliberations on

GAB.
 Budget deliberations starts formally after house of representative
transmits GAB
 However, Senate finance committee and Sub-committee starts
hearings on GAB even house deliberations are on going
 September-November Prior FY
 BICAMERAL DELIBERATION

Harmonized
Both houses
Committee Version of
of Congress
GAB

• Conducted during November-December Prior

FY
RATIFICATION & ENROLLMENT

Harmonized
or Bicam Both houses Final GAB President
version

• December of Prior FY
VETO MESSAGE

President

Ratified GAB
Department
of Budget &
Management
ENACTMENT

 When GAA is not enacted before fiscal year starts, the previous
year’s GAA is automatically reenacted.
 Funding for programs or projects that have already been
terminated is realigned for other expenditures.
 December of Prior FY
 BUDGET
IMPLEMENTATION
BUDGET EXECUTION/IMPLEMENTATION
 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
 Theapproved budget becomes effective on
the first day of the budget year concerned, or
when it is signed by the President, whichever
comes later.
1. EARLY PROCUREMENT ACTIVITIES
AUGUST OF PRIOR YEAR
 Refers to:
A. Pre-procurement conference
B. Advertisement of the opportunity to bid
C. Opening of bids
D. Bid Evaluation
E. Post-qualification
F. Recommendation by the Bids and Awards Committee to
award the contract to the winning bidder
 The award and the notice to proceed will be signed after
the President signs into law the GAA
2. SUBMISSION OF MONTHLY
DISBURSEMENT PROGRAM
OCTOBER OF PRIOR YEAR
 Shall reflect the monthly disbursement
requirements of agencies/operating units, by fund
category
 Shall be used by DBM as basis for determining the
month of NCAs/other disbursement authorities to
be issued to agencies/OU
3. SUBMISSION OF BUDGET EXECUTION
DOCUMENT (BED) BASED ON NATIONAL
EXPENDITURES PROGRAM (NEP)

DECEMBER OF PRIOR YEAR

 National Expenditure Program – submitted to
assist Congress in the review and deliberation of
the proposed national budget for the legislation
of the annual appropriation measures for the next
fiscal year.
 Itcontains the details of the government’s proposed
program
3. SUBMISSION OF BUDGET EXECUTION
DOCUMENT (BED) BASED ON NATIONAL
EXPENDITURES PROGRAM (NEP)
DECEMBER OF PRIOR YEAR
 Budget Execution Document – outlines the plans
and performance target
 Physical, financial plan, monthly disbursement
program, annual procurement plan for common use
supplies and equipment (APP-CSE)
4. AWARDING OF CONTRACTS

JANUARY OF CURRENT YEAR

 Awarding of contract to the lowest calculated
responsive bid (LCRB) at its submitted bid price or
its calculated bid price, whichever is lower
5. SUBMISSION OF ADJUSTED BEDs BASED
ON GENERAL APPROPRIATIONS ACT (GAA)

JANUARY OF CURRENT YEAR

 Upon approval of the GAA of the the budget
year, all departments/agencies/OUs shall
submit their GAA-consistent BEDs,
highlighting any adjustment made.
 Deadlineis within 7 working days after
approval of the GAA.
 National Expenditure Program (NEP) contains
the details of the government’s proposed
national budget and programs for the next
fiscal year.
 General Appropriations Act (GAA) is the
legislative authorization that contains the new
appropriations in terms of specific amounts of
personnel benefits, operating expenses, and
capital outlays.
BUDGET EXECUTION DOCUMENTS (BEDs)
 BED NO. 1 FINANCIAL PLAN (FP)
 BED NO. 2 PHYSICAL PLAN (PP)
 BED NO. 3 MONTHLY DISBURSEMENT PROGRAM
(MDP)
 BED NO. 4 ANNUAL PROCUREMENT PLAN FOR
COMMON USE SUPPLIES AND
EQUIPMENT (APP-CSE)
6. RELEASE OF NOTICES OF CASH ALLOCATION
(NCAs) FOR THE 1ST SEMESTER

JANUARY OF CURRENT YEAR

 NCA– Cash/Disbursement authority issued by the
DBM to central, regional and provincial offices and
OUs to cover the cash requirements of the agencies.
 Consistent with the DBM-evaluated MDP based on the
FY GAA.
7. RELEASE OF NOTICES OF CASH ALLOCATION
(NCAs) FOR THE 2ND SEMESTER

JULY OF CURRENT YEAR

 TheNCA specifies the maximum amount of cash
that can be withdrawn from a government servicing
banks for the period indicated.
 NCAsshall be issued to the three Modified System-
Government Servicing Banks (MDS-GSBs)
Modified Disbursement System-
Government Servicing Banks (MDS-GSBs)

 Land Bank of the Philippines (LBP)

 Development Bank of the Philippines (DBP)
 Philippine Veterans Bank (PVB)
 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.
CONSIST OF:
Periodic Reporting by the government agencies
of performance under their approved budgets.

 Top management review of government activities

and the fiscal policy implementations thereof; and
The Actions of the COA in assuring the fidelity of
officials and employees by carrying out the intent of
the legislative regarding the handling of receipts
and expenditures.
 PERFORMANCE & TARGET
OUTCOMES
 Agencies are held accountable not only for how these
use public funds ethically, but also on how these 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.
Starts on October – December of the prior Fiscal year until January of
the current Fiscal year
 CITIZEN ENGAGEMENT
Agencies disclose their budgets, reports, and other
relevant information through the Transparency Seal;
and make available data in open format.
Publishes the People’s Budget along with other
technical documents and reports.
Happens throughout the Fiscal Year
 MONITORING AND
EVALUATION
Agencies must set-up and implement monitoring and
evaluation mechanisms to ascertain the effectiveness of the
programs and projects on which they spend. Agencies must
have internal control mechanisms to ensure that public
funds are spent and accounted for properly.
Happens throughout the Fiscal year
 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.
 Starting 2012, the DBM will be withholding certain
fund releases to agencies if these 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.
 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’ BEDs. Agency
Performance Reviews (APRs) are conducted quarterly
or every semester, as the case may be.
 An annual Budget Performance Assessment
Review (BPAR) is conducted to determine each
agency’s accomplishments and performance
by the year-end. The DBM regularly reports
results to the President
 IN- YEAR REPORTS
• The DOF and the DBM regularly publish
snapshots of the government’s fiscal
performance, revenue collections, debt, and
expenditures.
• Submitted monthly and quarterly
 DBCC MID-YEAR REPORT
The DBCC publishes a comprehensive report on
macroeconomic developments, the fiscal situation of the
national government, and the performance of key
programs and projects. It also discusses any
adjustments that the DBCC makes to the government’s
economic projections and fiscal targets for the rest of
the year.
Submitted every September of Fiscal Year
 DBCC YEAR-END REPORT
• The DBCC publishes another comprehensive report
covering the full year. Compared to the Mid-Year Report,
the Year-End Report provides more discussions and
details about actual revenue and expenditure outturns
against program, and the financial and physical
performance of priority programs.
• Submitted within the following Fiscal year
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.
Submitted within the following Fiscal Year
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.
2020 Proposed Budget
• The PhP4.100 trillion proposed National Budget for 2020, which is
12% higher than the 2019 PhP3.662 trillion budget, will fund
programs and projects that will continue the journey towards a more
peaceful and progressive Philippines. It will continue to support our
inclusive growth strategies, aimed at accelerating investments in
public infrastructure, improving anti-poverty programs, and
intensifying employment generation.
Budget Dimension sector

Social Services a) education, culture and manpower development.;

Defense Expenditures that support the general
b) health services; effort to ensure national security,
c) social security; stability and peace which are
d) housing and community development indispensable to economic growth
e) land distribution.
and development.
General a) General administration;
Economic a) communication, roads and transportation Public b) public order and safety
Services facilities; Services
b) agriculture, agrarian reform and natural resources;
c) water resources development and flood control;
d) trade and industry Debt Burden Expenditures that go into servicing
e) power and energy government’s regular and assumed
f) tourism.
debts from foreign and domestic
sources including interest payments.
Budget Dimension by Expense Class
Top 10 Departments