Fiscal Policy

• Fiscal Policy aims to organize effective ways of implementing the government functions & duties to the advantage of the majority
• Taxes are the main source of government revenues
• Goods & services produced by the economy

  • Public Goods
  • Private Goods
• TESDA provides technical education & skills development training in the country so that Filipinos can have better opportunities to find & have jobs
• Pump Priming is a step wherein the government can raise its own expenditure to boost the economy
• Public Sector provides infrastructures like school buildings, hospitals, bridges, & highways
• Public Finance deals with the income & expenditures of the government; concerned with the decision of the government on public expenditures & public revenues; used to support all government programs & projects
• Functions of the Government


  • To establish a stable economy
• Private Goods are provided by individuals for personal use/consumption
• The process of releasing PDAF allocation involves SARO (Special Allotment Release Order)
• Fiscal Policy is concerned with government expenditure & taxes that influence economic activities of the country
• Types of Fiscal Policy Period

  • Expansionary Fiscal Policy
  • Restrictive Fiscal Policy
• The government allots funds to implement its projects through the PDAF (Priority Development Assistance Fund)/ AKA “pork barrel”; it is the total amount of national budget to finance the priority projects of the senators & congressman
• Public Goods are provided by the government and consumed collectively by the society (e.g., bridges, public schools)
• Pantawid Pamilyang Pilipino Program (4Ps) is a human development measure of the national government that provides conditional cash grants to the poorest of the poor, to improve health
• Functions of the Government

  • To establish a stable economy
  • To provide social services
  • To Provide for public goods
• The 4Ps dual objectives as the flagship poverty alleviation program of the government include social assistance and social development
• The government has been providing technical skills training since 1994 through TESDA (Technical Education & Skills Development Authority under Republic Act No. 7796)
• Social development programs for poor children

  • Health check-ups for pregnant women & children 0-5
  • Deworming of schoolchildren 6-14
  • Enrollment of children in daycare, elementary, & secondary schools; & family development sessions
• The constitution mandates the government to provide social services to its people, particularly in education, health, social justice, and infrastructures
• On education, the constitution entrusts the government with the obligation of providing free education, nutrition, and education of children aged 0-18
• The CCT (Conditional Cash Transfer) AKA the 4Ps (Pantawid Pamilyang Pilipino Program) is implemented to provide financial help to poor Filipino families to augment their income to satisfy their needs
• In order to establish a stable economy, the government should ensure that funds are sufficient, else it will resort to public borrowing
• Requirements for children beneficiaries

  • Children 6-14 must receive deworming pills twice a year
  • Children beneficiaries 3-18 must enroll in school, & maintain an attendance of at least 85% of class days every month
• Public goods provided by the government

  • National defense, police protection, public health, sanction, construction of roads, bridges, & other infrastructure projects
• Public Sectors are important in solving economic problems like inflation & budget deficit that can depress the economy
• DSWD (Department of Social Welfare and Development) is the lead government agency of the 4Ps
• Conditions for beneficiaries to receive subsidies & monetary help from the government

  • Pregnant women must avail of pre- & post-natal care & be attended during childbirth by a trained professional
  • Parents/guardians must attend family development sessions (topics on responsible parenting, health, etc.)
  • Children 0-5 must receive regular preventive health check-ups & vaccines
• House Appropriations Committee (in the case of a House member)


  Committee chairman endorses it to the Senate President/the House Speaker, then they forward it to the Department of Budget & Management (DBM)
• Government is responsible for providing the needs of its citizens, whether rich or poor
• Government should safeguard the rights of the citizens, provide social welfare, education, & other public services
• Education still receives the largest allocation among the social services offered by the government
• Fiscal Year


  12-month financial period that does not duplicate the dates of the calendar year
• Government revenue is spent on various programs & projects to enrich the condition of life of the citizens & to achieve economic progress
• Government increases spending for public goods & implementing social programs, giving attention to national emergencies (floods, earthquakes, etc.)


  Due to deficit spending, the government borrows money (National Debts)
• Veto


  A constitutional right to reject a decision/proposal made by a law-making body
• National Budget

  • Government’s plan for the use of government revenues; the way the government allocates its expenditures
  • Itemized summary of probable expenditures for a given period of time
• Budget Deficit is when the government spends more than its revenues; amount by which spending exceeds revenues in a given period
• Budget Allocation by Sector (2016)

  • Social Services - ₱1,105.9 billion, 36.8%
  • Economic Services - ₱829.6 billion, 27.6%
  • General Services - ₱517.9 billion, 17.3%
  • Debt Burden - ₱419.3 billion, 14%
  • Defense - ₱129.1 billion, 4.3%
• Creating the National Budget

  1. The president submits a proposed budget

  2. The proposed budget is submitted to Congress - the proposed budget contains the predicted incomes & disbursements for the next fiscal year

  3. Congress deliberates on the submitted budget

  4. Congress approves budget

  5. The president may sign the budget if acceptable (if not, he may veto it, & repeat the whole process)