Preparation and Notification of the National Budget

• Importance of the National Budget

  • Allows the government to plan and manage its funds to carry out various programs and projects that promote the development of the country
  • The government can prioritize and put into action its plans and programs, while working within its financial limits based on how the economy is doing
  • Helps governments prioritize expenses throughout the different departments, bureaus, and government offices for current necessities and long-term objectives
• Commonwealth Act No. 246 (1937) defines the budget as the financial program of the National Government for a designated fiscal year which consists of the statements of estimated receipts and expenditures for the fiscal year based on the results of operations during the previous fiscal years
• Budget Preparation

  The executive department creates a budget proposal for the upcoming fiscal year, starting with the budget call which includes the debts, revenues, and expenditures of the government. Major activities involved include determination of overall economic targets, issuance of the Budget Call, preparation of detailed budget estimates by government agencies, budget hearings, submission of proposed expenditure program, presentation of proposed budget levels to the DBCC, review and approval by the President and the Cabinet, and submission to Congress
• Budget Legislation

  
  

  Phase with the submission of the proposed budget to Congress for approval
• Budget Execution Document

  • Fiscal year plans, performance targets, physical and financial plan, monthly cash program, estimate of monthly income, list of obligations not yet due and demandable
• 1. DBM formulates the Allotment Release Program to set the limit for allotment releases during the upcoming year to ensure conformity to the national budget

  2. Allotment is a type of authorization issued by the DBM to government agencies to incur obligations for specified amounts contained in a legislative appropriation, also known as the Obligational Authority
• Documents needed to release allotments to government agencies

  • General Appropriations Act Release Document
  • Special Allotment Release Order
  • General Allotment Release Order
• Documents needed to release disbursement authority

  • Notice of Cash Allocation
  • Notice of Transfer of Allocation
  • Non-Cash Availment Authority
  • Cash Disbursement Ceiling
• Main proponent for ensuring correct spending of appropriated budget

  Department of Budget and Management, in works with the Commission on Audit
• National Budget

  a financial plan to spend for its programs and projects, and the

  sources of what it projects to have as funds, either from

  revenues or from borrowings with which to finance such

  expenditures.
• Section 22, Article VII of the Constitution states that:

  "The President shall submit to the Congress within 30 days from the

  opening of every regular session, as the basis of the general

  appropriation bill (GAB), a budget of expenditures and sources of

  financing including receipts from existing and proposed revenue

  measures."
• Government budgeting

  • is the critical exercise of allocating revenues and borrowed

  funds to attain the economic and social goals of the country.
• Government Budgeting

  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.
• Government Budget

  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.
• Four (4) distinct processes or phases :

  Ø budget preparation,

  Ø budget authorization,

  Ø budget execution and

  Ø accountability.
• National budget preparation

  • begins with the determination of the overall economic targets,expenditure levels, revenue projection and the financing plan
• The major activities involved in the preparation of the annual

  national budget include the following:

  a.Determination of overall economic targets, expenditure levels and budget framework by the DBCC;

  • 6.5% to 7.5% GDP for 2024

  b. Issuance by the DBM of the Budget Call
• Capital budgeting approach –

  used to evaluate major projects and investments
• Capital budgeting approach

  process involves analyzing a project’s cash inflows and outflows to determine whether the expected returns meet a set benchmark
• (six (6) other types of budgeting)

  d. Conduct a budget hearings were agencies are called to justify

  their proposed budgets before DBM technical panels;

  e. Submission of the proposed expenditure program of

  department/agencies/special for confirmation by

  department/agency heads.

  f. Presentation of the proposed budget levels of

  department/agencies/special purpose funds to the DBCC for

  approval.

  g. Review and approval of the proposed budget by the President

  and the Cabinet;

  h. Submission by the President of the proposed budget to

  Congress.
• To meet the Constitutional requirement for the submission of the

  President's budget with 30 days from the opening of each regular

  session of Congress, (fourth (4th) Monday of July of every year) the

  budget preparation phase is guided by a budget calendar.
• A reenacted budget means new projects will remain unfunded and

  money would be allocated to projects that have already been paid

  for.
• Official Development Assistance (ODA)

  refers to a loan or a loan and grant facility which contains a grant element of at least 25 percent.