MODULE 3: GROUP 3

• Government budget is an annual financial statement which outlines the estimated government expenditure and expected government receipts or revenues for the forthcoming fiscal year
• 3 Types of government budgets

  • Balanced budget
  • Deficit budget
  • Surplus budget
• Balanced budget is a government budget where the estimated government expenditure is equal to expected government receipts in a particular financial year
• Surplus budget is a government budget where the estimated government revenues exceed the estimated government expenditure in a particular financial year
• Deficit budget is a government budget where the estimated government expenditure exceeds the expected government revenue in a particular financial year
• The Philippines has been operating on deficit budgets since expenditures always outweigh expected and actual revenue
• The Philippines' budget deficit was P1.3 billion in 2020, P1.7 trillion in 2021, P1.6 trillion in 2022, and P1.51 trillion in 2023
• 4 Phases of the Philippine Budget Process

  • Budget Preparation
  • Budget Legislation
  • Budget Execution
  • Accountability
• Government budgeting 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
• Budget Principles

  • Principle of Annuality
  • Rule of Lapse
  • Fiscal Discipline
  • Inclusiveness
  • Accuracy
  • Transparency and Accountability
• Principle of Annuality - a budget is prepared every year on annual basis, and the money left unspent in a year must lapse to the public treasury
• Fiscal Discipline - budget should be balanced and should display congruence between the income and expenditure
• Inclusiveness - a budget should be comprehensive and inclusive of diverse budget estimates
• Accuracy - the preciseness is dependent on real and credible input data, information and unbiased information
• Transparency and Accountability - the revenue and capital portion of the budget are kept separate for the sake of clarity and transparency
• The President shall submit the national government budget estimated receipts and proposed spending within 30 days from the opening of each regular session of the Congress
• Executive's role in the budget process

  • Submits the budget proposal to Congress
  • Proposes supplemental or deficiency appropriations as needed
• Legislative's role in the budget process

  • House of Representatives takes center stage in reviewing and revising the budget proposal
  • Senate also reviews the budget proposal
  • Bicameral Conference Committee reconciles differences between House and Senate versions
  • President approves the final budget, which can be overridden by a two-thirds vote in both houses
• The budget preparation phase is commenced through the issuance of a Budget Call by the Department of Budget and Management (DBM)
• Types of Budget Calls

  • National Budget Call
  • Corporate Budget Call
• Corporate Budget Call is addressed to all government-owned and -controlled corporations (GOCCs) and government financial institutions (GFIs)
• Budget Procedures

  • Encourages collaboration with civil society organizations for input and insights
  • Allows defense of proposals and justification for budget requests through Technical Panel Hearings
  • DBM Bureaus review Agency Budget Proposals and formulate recommendations for the Executive Review Board
• Policy guidelines and procedures

  • To aid government agencies in the preparation and submission of their budget proposals
• Budget Procedures

  1. Encourages collaboration with civil society organizations for input and insights
  2. Promotes transparency and accountability
• Technical Panel Hearings

  1. Allows defense of proposals and justification for budget requests

  2. Facilitates dialogue and clarification between agencies and DBM
• Recommendations by DBM Bureaus

  1. Review Agency Budget Proposals and formulate recommendations for the Executive Review Board
  2. Discusses prioritization of programs and support alignment with National Government's agenda
  3. Ensures strategic budget allocations support government's key objectives and initiatives
• National Expenditure Program (NEP)

  1. Consolidates recommended budgets from government agencies
  2. Provides detailed information about planned spending for each department and agency
  3. Serves as the proposed General Appropriations Act (GAA)
• Budget of Expenditures and Sources of Financing (BESF)

  1. Comprises the NEP and provides essential information about the government's financial plan
  2. Includes macroeconomic assumptions, expenditure breakdown, and funding sources
  3. Enhances transparency and accountability in budget management
• Details of Selected Programs and Projects

  1. Provides insights into priority areas and strategic investments
  2. Enhances transparency and facilitates informed decision-making
• Staffing Summary outlines the staffing complement of each government department and agency. It also ensures agencies have necessary human resources for effective program implementation
• NEP and BESF Presentation to President and Cabinet

  1. Presentation and discussion to align with government objectives
  2. Approval by President and Cabinet considering various factors
• Budget Document Preparation

  1. DBM prepares budget documents for Congress submission
  2. Documents outline government's fiscal plans and priorities
• Budget Document Content


  1. President's Budget Message: Comprehensive policy framework and budget priorities

  2. BESF: Essential information on macroeconomic assumptions, public sector context, and expenditure breakdown

  3. NEP: Detailed spending plans for each department and agency, detailing program, activity, or project allocations
• A budget is based on a set of assumptions that are generally not too far distant from the operating conditions under which it was formulated. If the business environment changes to any significant degree, the company's revenues or cost structure may change so radically that actual results will rapidly depart from the expectations delineated in the budget.
• Executive role in budget process

  Submission of the Budget: The President shall, in accordance with Section 22(1), Article VII of the Constitution, submit within thirty (30) days from the opening of each regular session of the Congress as the basis for the preparation of the General Appropriations Act, a national government budget estimated receipts based on existing and proposed revenue measures, and of estimated expenditures. The President shall include in the budget submission the proposed expenditure level of the Legislative and Judicial Branches and of Constitutional bodies, which shall have undergone the same process of evaluation and which shall have been subject to the same budgetary policies and standards applicable to agencies in the Executive Branch. The President may transmit to the Congress from time to time, such proposed supplemental or deficiency appropriations as are, in his judgment, (1) necessary on account of laws enacted after the transmission of the Budget, or (2) otherwise needed in the public interest.
• Legislative role in budget process

  The proposed budget is first reviewed by the Committee on Appropriations of the House of Representatives. The Committee summons the agencies to justify their budgets, with the DBM assisting and providing technical inputs. The Appropriations Committee then presents to the House body the proposed budget and passes it at the Third Reading. This then goes to the Senate Finance Committee for another round of hearings and deliberations. The Committee presents the proposed amendments to the House Budget Bill to the Senate for approval. Then a Bicameral Conference Committee, composed of members of both Houses, is convened to resolve differences. The committee arrives at a common version, and it is then submitted to the President. If there are items which he/she disagrees with, then the President can exercise line-item veto power. The President then signs it into law as the General Appropriations Act
• Budget Procedure


  1. Budget preparation phase commenced through issuance of Budget Call by DBM

  2. Agencies submit Agency Budget Proposals to DBM

  3. DBM bureaus review Agency Budget Proposals and make recommendations to Executive Review Board

  4. Executive Review Board prioritizes programs and their support

  5. DBM consolidates recommended agency budgets into National Expenditure Program (NEP) and Budget of Expenditures and Sources of Financing (BESF)

  6. NEP and BESF presented to President and Cabinet for refinements or reprioritization

  7. DBM prepares budget documents (President's Budget Message, BESF, NEP) for submission to Congress
• The Budget Call contains budget parameters earlier set by the Development Budget Coordination Committee (DBCC) as well as policy guidelines and procedures to aid government agencies in the preparation and submission of their budget proposals
• 2 Types/Kinds of Budget Call

  
  

  1. National Budget Call
  2. Corporate Budget Call
• To boost citizen participation, the current administration has tasked the various departments and agencies to partner with civil society organizations and other citizen-stakeholders in the preparation of the Agency Budget Proposals