OVERVIEW OF THE

NATIONAL
GOVERNMENT
BUDGETING PROCESS

Dagupan Treatment and Rehabilitation Center

June 10, 2016
BUDGETING
101
 OUTLINE
Introduction of Budgeting Concepts
- Definition
- Characteristics of a Good Budget

Budget Process/Cycle
WHAT IS A
BUDGET?
NATIONAL BUDGET
Financial plan reflective of national
objectives, strategies and programs

Governments estimate of its

income and expenditures
Characteristics of a Good
Budgeting System

Aggregate Fiscal Discipline

Allocative Efficiency

Technical Efficiency
Aggregate Fiscal Discipline

Hard control on the level of

spending

Putting a leash on the deficit

Allocative Efficiency

Spending on the RIGHT THINGS

Setting your priorities straight

Technical Efficiency

Spending on the RIGHT COST

Producing more with less cost

BUDGET PROCESS
 Budget Process

Process during which the national

government budget is planned and
prepared, evolves into a law, and is
implemented and accounted for.
 Budget Process
BUDGET
PREPARATION

BUDGET BUDGET
ACCOUNTABILITY LEGISLATION

BUDGET EXECUTION
BUDGET PREPARATION
The first major step in the budget
process

Responsibility of the executive branch

Determination of budgetary priorities

and activities based on national
development plan and available
resources and borrowing limits
Budget Preparation Guidelines
and Procedures

1. DBM issues Budget Call

- National, Corporate and Local Government
Budget Calls
- Contains the Budget Priorities Framework

2. Forward Estimates
3. Two Tier Budget Approach
BUDGET LEGISLATION
The second phase of the budget
process. It begins when Congress
receives from the President the
proposed national budget.

The legislative branch of government

reviews, deliberates and enacts into
law the national budget proposal of the
President
 BUDGET CALENDAR
Section 22, Article VII

The President shall submit to the Congress

within 30 days from the opening of every
regular session, as the basis of the General
Appropriations Bill, a budget of receipts
and expenditures and sources of financing,
including receipts from existing and
proposed revenues measures.
House of Representatives
The proposed national government
budget is submitted to the House of
Representives (or the Lower House of
Congress), copy furnished the Senate
President

An initial GAB version is prepared.

This is subject to the first reading.
House Hearings & Debates
Agency heads or their representatives
whose budgets are included in the GAB
are required to present their proposed
budgets

These congressional inquiries

generally focus on policies, budgetary
levels, thrust and strategy,
expenditures and revenue proposals
and status of fund releases
Approved GAB House Version
After the second and third readings,
the GAB is passed by a majority vote of
the House
Senate Hearings/Debates
The Senate Finance Committee asks
the various government agencies to
explain their respective budgets as
contained in the House version of the
GAB
Senate Approval
Senate shall also subject the GAB to
debates and plenary discussions

Senate Finance Committee propose

amendments to the House Bill

The Senate is also required to vote on

the Bill immediately after the 3rd
Reading
Joint Bicameral Committee
Differences, if any, between the
Houses version of the GAB and the
Senates amended version are
submitted for resolution
Presidents Approval
The President may approve the GAB as
presented by Congress and signs it
into law called the General
Appropriations Act or GAA

The President may exercise his veto

power partially or totally. Partial veto
shall not affect the items in the GAB to
which he does not object to. Sec. 27(2),
Article VI
Presidents Approval
If Congress, during its reconsideration
period, is not able to pass the GAB into
law, the preceding budget years GAA
is considered re-enacted and shall
remain in force until the passage of a
new GAA
 BUDGET EXECUTION
GAA, Guidelines Allotment and
on Release of Cash Release
Funds Program

Release of
Project
NCA Allotment: via the
Implementation
GAA and SARO
 BUDGET EXECUTION
Issuance of obligational and disbursement
authorities to agencies, by DBM

Program/project implementation by
agencies out of the authorities issued
by DBM
Modes of Release of
Agency Funds
Obligational Authority(ies)

GAARD
thru SAROs

Disbursement Authority (ies)

Notice of Cash Allocation

Non-Cash Availment Authority
Cash Disbursement Ceiling
Tax Remittance Advice
 BUDGET
ACCOUNTABILITY
Review of reports
submitted for use
in the evaluation Report on Agency
of request for fund Performance,
release; in suggestions
Reports required
Performance for improvement,
to be submitted Assessment; and, recommendations
as input for
budget
preparation
BUDGET ACCOUNTABILITY
submission of budget execution
documents and budgetary
accountability reports by the
agencies

conduct of the Agency

Performance Review (APR) by
DBM
Agency Performance
Review (APR)
todetermine the level of performance
of each agency in terms of physical
outputs as well as actual expenditures
incurred vis--vis targets for the same
period
Agency Performance
Review (APR) cont
Physical /Financial performance

based on MFOs/Performance Indicators

physical vis-a-vis financial
actual versus target

Revenue performance
total of monthly estimates = FY 2016 BESF
actual vis--vis estimates
 APR is a tool to:
determine the need for additional
release of funds to the agency
(budget execution)

measure agency performance

(budget accountability)

know the appropriate level of agency

budget
(budget preparation)