BUDGET

Nature of Budgeting
• The budget is defined as the financial plan of the
government.
• As a financial plan, it proposes allocation of the scarce
financial resources among the many competing demands
of the government.
• It specifies the programs, projects services and activities
for which specific amounts of the public funds are
proposed and allocated.
• In short, the budget translates the program of government
into monetary terms.
The budget is more than a financial document. It
has been regarded as a system of policy-making
decisions for the allocation of scarce financial
resources among competing needs, a system by
which policies are implemented and for which
execution controls, both administrative and
legislative, are established.
 Content and structure of the budget
document:

Legal Political Management Economic

Document Document Tool Tool
Budget
Formulation
In the formulation of the national budget, the
finances of the government are analyzed and
determined as the aggregate of revenue,
expenditure and debt of all units of government,
including the national government and its agencies
and instrumentalities, local government units and
government-owned-and-controlled corporations.
 Local DBM reviews
Autonomy local budgets
C. Constitutional
Provisions
There are significant number of constitutional
provisions on budget, a clear indication of the
budget’s relative importance to the national life.
But like those relating to taxation, most of these
provisions restrict the authority of the Congress
on budgeting, probably because it involves
exercise of discretion over public funds.
 Appropriation is an authority
pursuant to a law of payment of
money out of the National
Budget denotes Treasury.
“appropriation.
All releases of government funds
” must first be authorized by the
Congress through the enactment of
appropriation laws.
General
Appropriation
“authorization of the lawmaking body to take
out from the national treasury such amount of
money, not otherwise set aside for another
purpose, as is needed to pay for personal
services and operations of the government
covering a certain period of time, termed as
fiscal year.”
Special
Appropriation
appropriation “is designed to supplement
the items of appropriation authorized in
the general appropriations law or to
authorize funds for new programs or
activities which have not been included in
the budgetary act.”
Article VII, Section
22
Requires the President to “submit to the
Congress within thirty days from the opening
of every regular session, xxx a budget of
expenditures and sources of financing,
including receipts from existing and proposed
revenue measures” to be made “as the basis
of the general appropriations bill.”
Two important
points:
• First, of the three branches of the Government, the
Executive is tasked with the submission of the annual
budget inasmuch as, relative to the other branches, it is in
the best position to determine the financial situation of the
government.
• Second, the submission of the general appropriations bill
every year is mandated by the Constitution in order to
avoid paralyzation of government operations that may
arise for failure to pass a law authorizing the release of
public funds.
The Constitution requires that it “shall
specify the purpose for which it is
intended, and shall be supported by funds
actually available as certified by the
National Treasurer, or to be raised by a
corresponding revenue proposal therein.”
The appropriations bill, whether special
or general, is essentially a legislative
measure. Unless otherwise indicated by
the Constitution, it follows the ordinary
process of enacting law.
D. Restrictions on
Budgeting
The entire budget process is replete with legal and
constitutional restrictions to safeguard the
disbursement of public funds and to prevent the
legislature from unduly taking advantage of this
power.
Constitutional
limitations:
1. Congress may not increase the appropriations
recommended by the President for the operation of
the Government.
2. All provisions of the general appropriations bill shall
relate specifically to some particular appropriation
therein and shall be limited in its operation to the
appropriation to which it relates.
3. The procedure for approving appropriations for
Congress shall strictly follow the procedures for
approving appropriations for other departments and
agencies. This provision ensures that no sub rosa or
secret appropriations are passed by Congress.
4. A special appropriations bill shall (1) specify the
purpose for which it is intended and (2) shall be
supported by funds actually available as certified by the
National Treasurer, or to be raised by a corresponding
revenue proposal therein.
5. No law shall be passed authorizing any transfer of
appropriations. however, the President, the President of
the Senate, the Speaker of the House of Representatives,
the Chief Justice of the Supreme Court, and the heads of
Constitutional Commissions, by law, be authorized to
augment any item in the general appropriations law for
their respective offices from savings in other items of
their respective appropriations.
Legislating the General Appropriations Act

• It defines the annual expenditure program of

the national government and all of its
instrumentalities. The expenditure program
includes all programs and projects that are
supposed to be funded out of government
funds for the year.
Development Budget Coordination
Committee (DBCC)- Issues national
expenditure ceiling for the succeeding year.
•Regional Offices prepare their budget
proposals and consult their respective
local government counterparts and the
regional development council on the
priority programs and projects to be
funded.
DBCC sets NGAs issue AROs prepare
DBM regional budget
next year’s issues agency proposals and
National guidelines to consult RDCs on
national regional priority
Expenditure
budget offices programs and
s ceiling projects
calling

OP submits the DBM ACOs AROs submit

proposed consolidates and consolidate to their central
national prepares office the
expenditure proposed
agency
program to national budget regional
Congress for expenditure proposal and budget
legislation to the program and submit to proposal
GAA submits to OP DBM