1. PUBLIC BUDGETING
SYSTEM AND
EXPENDITURES

2. ETYMOLOGY/DEFINITION
 BUDGET
 BOWGETTE (Middle English word)
 BOUGET ((Middle French word) leather
bag
 Used by King’s treasurer (exheguer) to carry
documents explaining the King’s fiscal needs
 BULGA (Latin) bag or purse

3. THEORIES / DEFINITIONS
 YOINGCO considers a definition of the budget
arrived at by the American
economist, PROFESSOR PHILIP E. TAYLOR
(1961), as embracing almost all ideas of
term, ancient and modern:
“The budget is the master plan of government. It
brings together estimates of anticipated revenues
and proposed expenditures, implying the schedule
of activities to be undertaken and the means of
financing those activities. In the budget, fiscal
policies are coordinated, and only in the budget can
a more unified view of the financial direction which
the government is going to be observed.”

4. THEORIES / DEFINITIONS
 ALLAN SCHICK views it as a process consisting of
a series of activities relating expenditures to a set of
goals.
 GROOVES and BISH consider budgeting as the
process through which public expenditures are
made.
 AARON WILDAVSKY viewed budget or budgeting
at different levels, from its most literal sense to a
recognition of its behavioral aspects.

5. DIMENSION OF BUDGETING FOR
NATIONAL DEVELOPMENT
 Budgeting serves as a tool for learning the
relationship of government programs with
economic and financial conditions and trends, and
for designing suitable economic and financial
policies and measures.
 Since the budget embodies a national fiscal plan
for taxing, borrowing and spending a significant
segment of the national income, it has a
substantial impact on the country’s fiscal
soundness and national economy.

6. TOWARDS A PRACTICAL AND OPERATIONAL
THEORY OF THE BUDGET FOR DEVELOPING
COUNTRIES
 According to professor of Political Science, V. O.
KEY JR., budgeting, as to the meaning, scope and
role in national development, it is ironic that there
exist no practically no theory on budgeting.
 Illustrated in the question on expenditure side:
On what basis shall it be decided to allocate X dollars to
Activity A instead of allocating them to Activity B?

7. TOWARDS A PRACTICAL AND OPERATIONAL
THEORY OF THE BUDGET FOR DEVELOPING
COUNTRIES
 Administrators, managers or even planners could
hardly provide an exact or profound answer to the
basic question. Key inferred that there is lack or no
theory of the budget thus,
 According to FORTRIM, budgeting is a matter of
philosophy as can be gleaned in the diverse
interests of the present government as well as in
the interests of the future ones.

8. GENERAL APPROPRIATIONS ACT
 Each year, national government before its
authorization or final legislation, is presented in the
form of Appropriation Bill (US & developing
country like Philippines).
 The Appropriation Bill (AB) expresses a social
consensus which sound akin to the mystic doctrine
of the general will.
 Constantly, in the process of formulating
AB, choices have to be made between the
demands of the different groups and factors, aside
from making the estimates of the relative political
strength of contending groups that frequently enter
in the decision.

9. GENERAL APPROPRIATIONS ACT
 A recognition by the national and political leadership that
the allocation of the limited resources of
government, which is translated yearly through a
GENERAL APPROPRIATIONS ACT (GAA) is one that
is based on need, not want. And such need is one that
is actually felt and articulated by the target beneficiaries
of the programs and projects.
 Decision makers have to accept the fact that not
everything that applies or is made feasible in one
country, is expected to similarly work in another country.
 On the other hand, what may have been ineffective in a
developed country’s system, may prove to be effective
and useful to a developing country.

10. DR. JOSE SOBERANO’S
POINTS TO PONDER:
 The various theories which explain different
aspects of budgeting coming from different
disciplines, have different ways of looking at the
same problems, measuring it and proposing
solutions.
 The problem comes from the very nature of
budgeting, which, like all other activities in fiscal
administration, have economic, political and
administrative aspects.
 When these theories are transported to developing
countries, budgeting becomes even more
complicated and unmanageable.

11. DR. JOSE SOBERANO’S
POINTS TO PONDER:
 Pointed out 20 years ago that the problem of
budgeting in developing countries are rooted in the
problems of underdevelopment.
 Budgeting can only be successful and effective in
the context of efforts and understanding and
attacking the basic problems of underdevelopment.
 Economies of Abundance vs. Economies of
Poverty
 Good example: Philippine scenario

12. DR. JOSE SOBERANO’S
POINTS TO PONDER:
 Stressed that the problem is not so much a
question of theory and technique of
budgeting, since Philippines is up-to-date on
these, but the very problem of poverty itself.
 In conditions of underdevelopment, many variables
cannot be programmed and controlled including
nature.

13. SUMMARY
 Budget can be viewed from three frames of
reference:
 BUDGET AS AN ECONOMIC PROCESS
 Economists look at it as a process of resource allocation
wherein LEWIS emphasized on the marginal theory and
sophisticated decision-making techniques like cost budget
analyses, feasibilities, studies, etc. help the policy maker
decide among competing budgetary options
 BUDGET AS A POLITICAL PROCESS
(Pendleton, Herring, Wildavsky & other political scientists)
 A political process of competition among various groups of
limited resources
 Those who have access to political power get a bigger share
of the budget pie.

14. SUMMARY
 BUDGET AS AN ADMINISTRATIVE PROCESS
 Mechanisms for planning, coordination, control and evaluation
 Talked about line-item budgets and performance budgets

15. THANK YOU!