Ma'am Notes in PF

• Involved Agencies

  1. DOF
  2. Dept of Budget and Management
  3. BIR
  4. Bureau of Customs
  5. BTr
  6. Bureau of local government finance
  7. BSP
  8. Department of energy
  9. FIRB
  10. Philippines statistics authority
  11. Tourism infrastracture and enterprise zone authority
• Tax Administration


  Centered on the implementation and enforcement of tax legislation and regulations, including identification and registration of taxpayers, processing of tax returns and third-party information, examination of the completeness and correctness of tax returns, assessment of tax obligation, (enforced) collection of taxes, and provision of services to taxpayers
• Budget Control


  Represents the central logic for planning, control, and accountability, the tool through which governments decide how much to spend on what, limiting expenditures to the revenues available, and preventing overspending
• Debt Administration


  The process by which the government acquires and utilizes the debt efficiently and effectively for budgetary purposes, referring to the technical and institutional aspects of organizing public debt
• As of March 2024, the national government's total outstanding debt decreased by 1.67% to PHP14.93 trillion due to the net redemption of domestic government securities
• Domestic debt of PHP10.28 trillion declined by 2.83% because of the PHP299.45 billion net redemption of government securities offsetting the PHP0.24 billion effect of peso depreciation on foreign currency domestic debt
• External debt, on the other hand, reached PHP4.65 trillion, up by 1% from the February level. The increase was attributed to the net availment of foreign loans amounting to PHP44.01 billion, as well as local currency depreciation, which added to the valuation of US dollar-denominated debt by PHP7.05 billion
• Finance Secretary Ralph Recto increased the dividend rate remittance of government-owned and controlled corporations (GOCCs) from their net earnings to 75 percent from the minimum of 50 percent
• "We are looking for ways to increase revenues without new taxes,"
• The Dividends Law of 1994 mandates all GOCCS to declare and remit at least 50 percent of their annual earnings, as cash, stock or property dividends to the Treasury. Based on its 2016 Revised Implementing Rules and Regulations, the DOF may request GOCCS to remit above the 50 percent minimum dividend rate
• GOCC dividends are sources of non-tax revenues that fund infrastructure and other social and economic programs of the government
• Increasing the dividend rate aims to promote fiscal discipline and improve revenue generation efforts of the government
• This would enable the DOF to mobilize substantial non-tax revenues from GOCCs' unrestricted fund balances to unlock the unprogrammed appropriations of the 2024 GAA to fund priority programs and projects
• Recto is also intensifying the push for the privatization of government assets, which will lead to better operational efficiency and higher investment returns
• The proposed National Budget for Fiscal Year 2024 amounting to Php 5.768 trillion will prioritize expenditures in furtherance of the goals outlined in the Medium-Term Fiscal Framework and aligned with the Administration's 8-Point Socioeconomic Agenda and the Philippine Development Plan (PDP) 2023-2028
• 8 Point Socioeconomic Agenda

  • Ensure Food Security
  • Reduce Transport and Logistics Costs
  • Reduce Energy Costs
  • Improve Health
  • Address Learning Losses
  • Strengthen Social Protection
  • Ensure Sound Fiscal Management
  • Enhance Bureaucratic Efficiency
• Benefit-Received Principle by Knut wicksell (1896) and Erik lindahi (1919)


  Basis of taxation, symbiotic relationship between the state and its citizen, in return for his contribution, the taxpayer receives the general advantages and protection which the government provides
• Lifeblood or Necessity Theory

  • means that a government cannot exist without taxes, taxes are what we pay for a civilized society, necessity theory emphasizes the indispensable role of taxation as a means for the government to fulfill its functions and meet the needs of society
• Fiscal Adequacy by adam smith in his canons of taxation 1776

  • The sources of revenue of the government should be sufficient to meet the demand of the public expenditures regardless of business condition, tax burden must be proportionate to the taxpayer's ability to pay
• Equality on Theoretical Justice by Arthur Cecil Pigou

  • tax burdern must be proportionate to the taxpayer's ability to pay
  • He who received more should give more
• Proposed 2024 national budget: Php 5.768 Trillion
• • Social services - 37.9%
  • Economic services - 29.6%
  • General Public services - 15.5%
  • Debt burden - 12.1%
  • Defense - 4.9%
• Government budgeting is the critical exercise of allocating 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 government budgeting

  • 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
• Major processes involved in national government budgeting

  1. Budget preparation

  2. Budget authorization

  3. Budget execution

  4. Accountability
• How the annual national budget is prepared

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

  2. Issuance by the DBM of the Budget Call

  3. Preparation by various government agencies of their detailed budget estimates

  4. Conduct of budget hearings

  5. Submission of the proposed expenditure program of department/agencies/special for confirmation by department/agency heads

  6. Presentation of the proposed budget levels of department/agencies/special purpose funds to the DBCC for approval

  7. Review and approval of the proposed budget by the President and the Cabinet

  8. Submission by the President of proposed budget to Congress
• How the budget becomes a law

  1. President submits proposed annual budget to Congress

  2. House of Representatives Appropriation Committee conducts hearings and scrutinizes budgets

  3. House presents amended budget proposal as General Appropriations Bill

  4. Senate Finance Committee conducts its own review and scrutiny

  5. House and Senate create Bicameral Conference Committee to finalise General Appropriations Bill
• General Appropriations Act (GAA)


  The legislative authorization that contains the new appropriations in terms of specific amounts for salaries, wages and other personnel benefits; maintenance and other operating expenses; and capital outlays authorized to be spent for the implementation of various programs/projects and activities of all departments, bureaus and offices of the government for a given year
• How the budget is implemented

  1. Release of funds to agencies through the Simplified Fund Release System (SFRS)

  2. Preparation of Agency Budget Matrix (ABM) by DBM

  3. Issuance of General Allotment Release Order (GARO) or Special Allotment Release Order (SARO) by DBM

  4. Release of Notice of Cash Allocation (NCA) by DBM

  5. Agencies utilize released NCAs following the "Common Fund" concept
• Mechanisms to ensure funds are properly allocated and spent

  1. Management's review of actual performance or work accomplishment in relation to work targets

  2. Detailed examinations of each agency's book of accounts by Commission on Audit (COA)
• The role of the DBM in the budgeting process is not limited to national government agencies
• Fund in government, it can refer to an appropriation (legislative authorization to spend), an allotment (authorization by DBM to obligate), or actual cash available
• The Constitution states that no money shall be paid by the Treasury except in pursuance of an appropriation made by law
• How government funds are appropriated

  1. Agencies prepare and submit budget estimates to DBM

  2. Agencies justify budgets before DBM

  3. DBM reviews and consolidates budgets for President's proposed budget

  4. Agencies explain budgets in Congressional hearings

  5. President signs General Appropriations Act
• Government budget is the financial plan of a government for a fiscal year, showing its resources and how they will be generated and used
• The Constitution requires the President to submit a budget of expenditures and sources of financing within 30 days of Congress opening
• Expenditure program is the portion of the national budget for current operating expenditures and capital outlays
• Financing program is the projected revenues, planned borrowings, and debt principal payments
• National government budget


  The totality of budgets of national government departments, support to LGUs and GOCCs
• What the national government budget is spent on

  • Implementation of government programs and projects
  • Operation of government offices
  • Payment of government employee salaries
  • Payment of public debts