REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF BUDGET AND MANAGEMENT

MALACANANG,

I National Budget Circular I

MANILA

No. 557
June 3, 2015

TO:

All Heads of Departments/Agencies/State

Universities
and
Colleges and Other Offices of the National Government, and.
Government
-Owned or -Controlled
Corporations;
Budget
Officers; Heads of AC?counting Units; and All Others Concerned

SUBJECT

Guidelines. in the Use of Personnel Services Appropriations

under the FY 2015 General Appropriations Act (GAA)

1.0

POLICY STATEMENT
Appropriations for Personnel Services (PS) in the FY 2015 GAA shall be used to
cover the original purposes for which these are appropriated, as well as any
deficiency in authorized personnel benefits that may be determined during the
year pursuant to General Provisions (GP) No. 46 of the FY. 2015 GAA.
Accordingly, use of PS appropriations for any PS deficiency will follow. the rules
provided herein and shall not be considered as a form of realignment.

2.0

PURPOSE
2.1

3.0

To provide guidelines in .the use of PS appropriations authorized under

R.A. No. 10651 (FY 2015 GAA), laws governing Retirement and Life.
Insurance Premium (RLlP) and earmarked revenues under Special
. Account in the General Fund (SAGF);

2.2

To set clear definition of relevant terms to be used in this Circular; and

2.3

To prescribe the submission of reports in the utilization of funds covered

by this Circular consistent with budgetary, transparency,
and
accountability policies, rules and regulations.

DEFINITION OF TERMS
The following terms shall be taken and understood in the sense indicated
hereunder and as used in this Circular:
3.1

Agency Heads - re~er to the heads of departments, attached agencies

and Other Executive Offices under the Executive Branch, State
1

..
1

.
Universities and Colleges, Constitutional Commissions, and GovernmentOwned and/or-Controlled Corporations maintaining Special Accounts in
the General Fund and other similar entities and instrumentalities
concerned.
3.2

Allotments - refer to the budget authorizations prescribed under National

Budget Circular No. 556 - Release of Funds for FY 2015, issued to an
agency permitting it to commit or incur obligations within the period of
time, amount and purpose indicated therein.

3.3

Authorized Personnel Benefits - refer to compensation of government

employees pursuant to law and those authorized by the President of the
Philippines. Authorized compensation shall be as follows:
3.3.1

Basic Salaries, including Step Increments;

3.3.2

Standard Allowances and Benefits, which shall be limited to the

following:
3.3.2.1
3.3.2.2
3.3.2.3

3.3.3

Specific-Purpose
following:
3.3.3.1
3.3.3.2
3.3.3.3
3.3.3.4
3.3.3.5
3.3.3.6
3.3.3.7
3.3.3.8
3.3.3.9
3.3.3.10

3.3.4

Allowances

and

Benefits,

limited

to the

Representation and Transportation Allowances

Per Diem
Honoraria
Night-Shift Differential
Overtime Pay
Subsistence Allowance
Hazard Pay
Special Counsel Allowance
Overseas
and Other Allowances
for Government
Personnel Stationed Abroad
Other allowances and benefits as may be authorized by
law or the President of the Philippines.

Incentives, which refer to the following:

3.3.4.1
3.3.4.2
3.3.4.3
3.3.4.4
3.3.4.5
3.3.4.6
3.3.4.7

3.3.5

Personnel Economic Relief Allowance

Uniform or Clothing Allowance
Year-End Bonus and Cash Gift

Loyalty Incentive
Anniversary Bonus
Collective Negotiation Agreement (CNA) Incentive
Productivity Enhancement Incentive
Productivity Incentive Bonus (until 2015 only)
Performance Based Bonus
Other existing benefits as may be categorized by the
DBM as incentives.

Magna Carta Benefits as authorized by law and its Implementing

Rules and Regulations
2

3.3.6

4.0

Personnel benefits for military and uniformed personnel as

authorized by law or the President of the Philippines.

PS Appropriations
4.1

Sources of appropriations for payment of authorized personnel benefits of

government employees are as follows:
4.1.1

Department or agency specific appropriations for PS;

4.1.2

Miscellaneous Personnel Benefits Funds (MPBF);

4.1.3

Automatic Appropriations:

4.1.4

4.2

4.1.3.1

RLiP contributions; and

4.1.3.2

SAGFs such as: (i) Pre-need Fund and Insurance Fund

for the Insurance Commission; (ii) Aviation Security
Fees for the Office for Transportation Security; (iii)
Verification
Fees for Office of the Secretary
of
Department
of Labor and Employment;
and (iv)
Contributions from Philippine Amusement and Gaming
Corporation for the Early Child Care Development
Council.

Allowable MOOE allotments for the payment of Collective

Negotiation Agreement (CNA) incentive under GP No. 74 of the FY
2015 GAA.

Department or Agency Specific Appropriations for PS

4.2.1

Consistent with GP No. 46 of the FY 2015 GAA, the appropriations

for PS shall be used for the payment of Authorized Personnel
Benefits (as defined under item 3.3 hereof) to be given to National
Government employees, computed based on information provided
in the Government Manpower Information System of DBM.

4.2.2

Available PS allotments released to the department or agency at

the start of the year shall be used for the (i) original purpose of
appropriations; and (ii) to cover PS deficiencies in Authorized
Personnel Benefits such as:
4.2.2.1

Deficiency in Magna Carta Benefits, subject to approval

by the DBM Secretary for: (i) additional recipients arising
from newly issued certifications
or hiring of new
employees; (ii) valid adjustments due to inadvertent
omission or erroneous encoding in the System;

4.2.3

4.2.4

4.2.2.2

Award of Back Pay for cases with final and executory

decision of a competent authority such as courts, CSC,
and COA;

4.2.2.3

Deficiency in specific-purpose allowances and benefits,

such as Overtime Pay, Honoraria, and Representation
and Transportation Allowance, among others, subject to
existing conditions in the grant of such benefits; and

4.2.2.4

Authorized Personnel Benefits in prior years, the

approval for the payment of which is granted in the
current year. Since PS benefits are mandatory in nature,
actual services rendered or benefits allowed in prior
years shall not be categorized as unbooked obligations.
Thus, this may be considered as an exemption to the
existing policy, rules and regulations on unbooked
obligations
(please see Appendix
1 - Letter of
Commission on Auditto DBM dated March 7, 2014).

The available PS allotments referred to above may be realized

from unspent compensation of employees due to the following:
4.2.3.1

Incurrence of leaves of absence without pay;

4.2.3.2

Vacant positions on account of termination, resignation,

transfer, retirement or separation;

4.2.3.3

Delay in the actual assumption of duty from the date of

appointment;

4.2.3.4

Suspension and other disciplinary sanctions;

4.2.3.5

Erroneous computations of PS benefits; or

4.2.3.6

Other similar instances

In case there is no available PS allotment, as defined above, at the

time when payment of authorized PS deficiency mentioned in Item
4.2.2 shall be made, the department or agency may frontload
such
deficiency
against
the
unobligated
PS allotments
comprehensively
released pertaining to requirements for the
remaining months of the year.
4.2.4.1

The use of PS appropriations to cover a PS deficiency

shall be subject to approval of Agency Head.

4.2.4.2

It shall be supported with a Reallocation Advice for Use

of PS Appropriations (RAPSA) duly accomplished and
signed
by the Agency
Head or his designated
representative, format shown in Annex A. In the case of
SUCs, the approving authority shall be the President as
4

Agency Head, unless approval of the board is necessary

as required in the respective charter of SUCs.
4.2.4.3

4.3

MPBF
4.3.1

4.3.2

4.4

4.5

Said adjustments shall be recorded or reflected in the

Registry of Allotments and Obligations for PS and
reported in the accountability reports to be submitted to
DBM, i.e., SAAODB.

The MPBF may be used to fund the following authorized PS

deficiencies
of government
employees
which
cannot
be
accommodated within the available PS allotments of a department
or agency:
4.3.1.1

Funding requirements for the filling of positions

creation of new positions; and

and

4.3.1.2

Other compensation common to all, such as Overtime

Pay, Step
Increment,
Performance
Enhancement
Incentive,
Performance-Based
Bonus
and
other
compensation for specific groups.

The department or agency shall submit a special budget request to

DBM with the following supporting documents:
4.3.2.1

Justification for incurrence of deficiency; and

4.3.2.2

Latest
Statement
of
Appropriations,
Allotments,
Obligations, Disbursements and Balances by Object of
Expenditure (SAAODBOE), prescribed under DBM-COA
Joint Circular No. 2014-1 dated July 2, 2014.
The
agency is encouraged to submit the SAAODBOE as
of end of the month immediately preceding the
request, if available.

Automatic Appropriations
4.4.1

Released allotment for RLiP cannot be reallocated to other objects

of expenditures.

4.4.2

As a general rule, SAGFs shall not be used for payment of PS,

unless expressly authorized in the law creating them, as in the
case of those agencies enumerated under item 4.1.3.2 hereof.

CNA Incentives
4.5.1

The CNA Incentives shall be paid from the allowable MOOE

allotments as identified under GP No. 74 of the FY 2015 GAA and
at such rates determined by the DBM. The allowable MOOE
allotments shall have resulted from cost-cutting and systems
5

improvement measures undertaken by the agencies and their

respective personnel, as identified in their respective "Agreements"
and supplements thereto.
4.5.2

4.5.3

5.0

The department or agency shall submit a request to DBM for

issuance of SARO to use such allowable MOOE allotments for
payment of CNA, with the following supporting documents:
4.5.2.1

Certification reflecting the available MOOE allotments by

P/A/P and specific object of expenditures; and

4.5.2.2

Agency's latest quarterly SAAODBOE. The agency is

encouraged to submit the SAAODBOE as of end of the
month immediately preceding the request, if available.

The SARO to be issued for payment of CNA shall be attributed to

General Administration and Support.
Payment for the purpose
shall be recorded in the agency books under the PS - Other
Bonuses and Allowances - "Collective Negotiation Agreement
Incentive-Civilian."

Repealing Clause
All circulars, memoranda, rules, regulations and other issuances inconsistent
herewith are deemed repealed and superseded accordingly.

6.0

Effectivity
This Circular shall take effect immediately upon its publication.

'y

:::to
T ~
c

FLORENCIO B.
Secretary

ANNEX A
Department of
Agency/Operating
Address

_
Unit

Reallocation

_
_

Advice for use of PS Appropriations

(RAPSA)
Dated:
_

NO. 2015-03-XXXX

Funding Source: Regular Agency Fund - General Fund - New General Appropriations - Specific Budgets of
National Government Agencies
Legal Basis:

RA 10651 Regular 2015 CURRENT

DEFICIENT ITEMS (TO) :

PROGRAMS/
PROJECTS/
ACTIVITIES

1000100001

RESPONSIBILITY CENTER

060010100000-01-02.
Administrative Service

ALLOTMENT
CLASS

PS

OBJECT OF
EXPENDITURES

AMOUNT

(50101010) Basic Salary

- Civilian

725,000.00

Total:

725,000.00

SOURCE ITEMS (FROM) :

PROGRAMS/
PROJECTS/
ACTIVITIES

1000100001

RESPONSIBILITY CENTER

060010100000-01-05.
Corporate Planning & Research
Service

ALLOTMENT
CLASS

PS

OBJECT OF
EXPENDITURES

AMOUNT

(50102040)
Clothing/Uniform
Allowance-Civilian
Total:

Prepared by:

(725,000.00 )

(725,000.00)

Recommended by:

Budget Officer/ Director, FS

AnalysUSpecialist

Approved by:

Agency Head or Representative

Appendix 1

.'

'At~ol1f\1&1'
3Repub[irof t~~vilippineB'
COMMISSfONON AU.OIT
Q[omrnonfuealtb ~'nnue. ~ue?on- Q1itp, ~biiippil1C!l

Ma. Gracia M. Pulido- Tan

Chairperson
March7,2014

)
Honorable fLOREl\n::IO B.ABAP
Secretary
Department oLl3udget and Management
Malacafi;:mg, MahUa:,":.
:

'!',I.:

Dear SecretatyAb~a!
"

.:.

This referstoyourletfer
dated. Octoher 2, 2013, pertaining to Paragraph
2, GeneralProyi.~i9~'(GP)
Np. 1$ ofthe.~2p:L3Genera.r J'\pptopliations.Acr.CGAA)
(RA No. 10352), requesting theComll)ission.'soffi.cU~t;posi~on
relative
the
settiement of prior year's unbooked obligations, as well. as the formulation of a
joint circular thatwipprescribejupaa.te
the guidelines on.unbooked obliga.tions .

to

. :\'

As stated: inYQur lettet, the DBM Is: re.Yiewfrtg ,the. -following existing
. budgetary
policies<laid
o.ut fOf .the settJeIl1ertt of'pdor
years' unbooked
obligations:
.
a) The use. of the clJ.Q'eI1r year gm:lget
transaetiqris/cibligations
iscon$istenl:
Executive:Ofder
292 Re: Authority

I{)r "paymentof

pri()J:' years'.
49, Book VI of
Savings for Certain

wi~:rr Section
to Use

Purposes;
b) The p~yrt{~nt of unbooked obligations. incurred prior to 1990 shall be
charg~cl~gainst the. 19QQ savings of-agencies where funding to cover
unboo)te~d;oblig<:l,t1onsfrom 1990 onward~should
be authorized. in the
Gener.ai'{:AJ?proprfaq,ons Adjs '(GAA~)'as proyfqed for und~r National
Bi.IdgetCitcular(NBC) No. 416{series of 1990J~

..... ):\,:/[:.

,,

cJ The 'GAAsJorFY 2061 and :2008 ProvIded :the authority for DBM. to
apprdve'payment
of valid, prior ye~ars! 'o6Iigadonsas
,certified by the
Comriiis!ffon onA,udit;charg~ableagainstagency
savIngs: duriqg saicJ
year'sapprqprlapons
(i,e;, 2:0'07;40(i8J~ H9w~v~r; Vlitht:he rerrlOval of
COli'sSQijd~c~, ofpn:!:-?,u.d!~,~D~:gl:!,nerilt:proyi~t()n.\y?~~''revised in the
GAAs for EY2QOg:and2010to
authorize utiliZation offunds, subjeCt to
COA'spost-auditvalidation.
ACOAcertification
is no loiigera prerequisite.in
the issuance of SARO or Tetter authority for unbooked
obligatiori;-.ci.nd

L
",

.....

...... ,.',

. ..

'-'

d) The GAA.sfor FY 2011 to 2012 did not include a provision on prior

year.s!,:ur:booked obligations~ The provision on use of current year
savings 'fbr prior 'years' unhooked obligations was restored in the
2013GAA.

After an':ev~luadonhereof, .thisCommisSlon 'no:tes that tlieauthority to

use savings pursuant toSectiorr 49, Book VI of E.O, 2.92 is limited' to certain
purposes as enum~rated.therein whichin<;lllde the .paym(!nf of'valid prior year's
obligations ofgoverhmentageriCies'
",vith a~y other government
office or
agency 'incl udinggovernmentowlIed:'or.:tonttolled..totporatio
lis.
As'to ~thept.9vi.siotfs:inthe 2QOTand z'OQS.C:AAs
relative to payments of
prior years" o1)ligati<Jns,'this Commisslon; through then
Acting Chairman
Reynaldo A Villar; jn q letl;ercia.ted.~{LM~rch;2.QOE{ t.o;th~.n:Secr~tary Rolando G.
Andayai Ji\ Department. qf B!:!c:Ig~~8nd Ma;n,agerr1eut {copy attached),
sumin'arizedthe po;sitio'hof COA,.iil'thiswise:
''X)r;)ethe

CominiSsto:nProp~r,thi$;Coiiifnissioii, lnitS,'meeting:on

2,7Mar.ih::Z008, wqs9fthecP!ls.t(jer:~d;vie.w thdtthe.prppps.ed; circular

violat?s$ef;.Do.n '4..9' (UArtic1e. VI o.f thf{ GCJT]$iit.zJ.fion. which prqvides
that"n() rnQhey shq)l::6e.paicJp.ufo.fthf!Treasury exceptihpursuanceof
an apjir6pf:iatlon'madeby law/' Sec;tio.n 19-o/the' General. Provisions of
Repub/jC:A'ctNo:9401; the;2007Geriera/.Apprbpiia tiansAct;. therefore,
....

I'

'.

has no. c.oil'st!tut!iiinaldfid

..

'..

...

..

'.

lega't bases as -itgiYes the Depaftmentoj

Budget:dijfi:;Ma"riiigerrie.nt-blar/kef autlfiJrlty to.:disburse funds.to .pay

prio.r jeah;:unbdoke.d,dQligqtionswltholit'SPl?-cijic
appropriations, X
x.

.N

In the- sa.Ilje I.etteri: then Ghain:nan Villar reiterated

representati{m that .the. provision onunbook.ed ()bIigationsbe
subsequent GeneralAppro"priatiori ActS.

his earlier
deleted in

.'~

This Commission shares the: vi~wtliat paytii~ht QfuribOoked obligations

violates Section 29tiJ. Article VI of tile Constitudbh; hence; oUr auditors cannat
certify as totl1eirv~lidity,. The daimants mayJiI~:th~ir; indiYigual money claims
with this ~omm.i.~sion,purs~p.nt t()thegel)~rata:ul:!it
j4r-isdietion of this
Corn.missiontp settl~"alI'(tep~ "!J::lcl
dC!irnsQf~nY~{)rt:clu~tr9JlJ' or aw.fng tgtve
Government'.'underSection 2HofPresidentiai Decree' No. 1445~and following
the procedur:eolltIined'uhder"RuIe'VJlI citthe, 2009. Revised Rilles' ofPraceclures
af the Gommissloii:an Audit 'ltis~..likewise, re'iterated. that the provision 'an
unbooked obllg~tiohshe deleted Insubseqlle~tGAA:s. ".

Tharik.r~~,~~rc.oOf{iinating'fis.matt~r wi~h:I;lS.,.

:-~~~:~~~r.,._.~.~~~.
~

InrtiatedfDrafted~Y
~

l-ypea By ._..-

ReI);"viet\Vre/dOfBfyce..r...l..n....
uec 0

-_..
C'-uil N;{ri~e':&'Desighatio~
,;.".

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- -

Verytrp.lyyours,