2. Philippine National Budget
• It is a financial plan to pursue priority programs
& projects of the government in line with its
economic growth & human development thrusts.
• It is an instrument for good governance, as
government agencies are accountable for the
delivery of measurable results through their
respective budgets.
3. The financial blueprint of the
country’s development plan.
• To ensure that public resources are managed
more efficiently and with the greatest degree of
discipline.
• Under the Aquino administration, it seeks to
bring the budget closer to the people, by
channeling resources on programs that
accelerate economic growth, but more
importantly, to re-directs funds to programs that
would be responsive to the needs of the people
especially those in regions beset by poverty.
4. 2011 National Budget
• The 2011 Budget introduced reforms such as
ZERO-BASED BUDGETING to ensure that
public funds were spent only for public
purposes.
• These reforms were essential for restoring a
cynical public’s trust in government.
5. The 2012 National Budget
• The 2012 Budget addressed hiccups in the
budget implementation.
• The mandate for the Budget was clear – to
ensure the delivery of the results outlined in the
Aquino Social Contract.
6. 2013 National Budget
2013 Budget – P 2.006T
• The 2013 budget empowered the Filipino people
through tighter prioritization of their needs,
faster delivery of results, and a more open
budget process.
• It emphasized that the government exists to
serve the Filipino people.
7. The 2014 Budget
• All Filipinos must enjoy the prosperity that
comes with sustainable economic development.
This is the thrust of the 2014 Budget.
• The 2014 Budget builds on the successes made
possible by an honest and trustworthy
government.
• It lays the foundation for inclusive development
and sustains the momentum of reform.
• P2.268 TRILLION
8. 2015 National Budget
• The 2015 Budget for Inclusive and Sustained
Development.
• Thus, the P2.606-trillion National Budget
provides more investments in poverty-reducing
and job-generating interventions that enable
inclusive and sustained growth.
• The government will spend about P25,700 for
every Filipino or about P7.1 billion a day to
provide services to all.
9. 2016 National Budget
• VOTE. Fourteen senators voted in favor of the proposed P3
trillion national budget for 2016.
10. • The Senate approved on Thursday, November 26,
the proposed P3-trillion ($63.66-billion) national
budget for 2016.
• Out of the 15 senators present during the 3rd and
final reading of the proposed appropriation bill, 14
voted in favor of it. Only one senator, Aquilino
Pimentel III, voted against the proposal.
• The approved Senate budget bill now goes to the
bicameral conference committee, where it will be
reconciled with the version of the House of
Representatives.
11. • As in the House version, the Department of Education
(DepEd) still received the largest allocation in the Senate
bill – P 411.89 billion ($8.74 billion), which is a 28% or
P90-billion jump from P321 billion ($6.81 billion) in
2015.
• Senator Loren Legarda said the increase in the
department's budget is aimed to support "the
implementation of the senior high school curriculum
under the K-12 program" next year.
• As for the Department of National Defense (DND),
Senate approved a P116.2-billion ($2.47-billion) budget
for the department. This allocation is higher than the
P115.8-billion ($2.46-billion) budget approved by the
House of Representatives for the defense department.
12. • The Senate version of the DND budget includes
an additional P250 million ($5.31 million) for its
quick response funds (QRF), and P150 million
($3.18 million) allocation for the Philippine
Army to enhance the army’s intelligence funds
and fund new machinery, equipment, and
construction of buildings and other structures.
13.
14. Section 22, Article VII of the 1987
Constitution sets the tone for the
budgetary process.
• Section 22, Article VII of the 1987 Constitution sets the
tone for the budgetary process. The procedure in the
preparation of the national budget is regulated by law.
On or before October 20 of each year, each department
secretary submits to Department of Budget the
estimated income and expenditures of the bureaus and
offices under his department for the next fiscal year.
• Upon receipt of all budget estimates of income and
expenditures, the Department of Budget and
Management prepares the national budget. Prior to this,
however, the Budget secretary can investigate, revise,
examine, assemble, coordinate, and reduce or increase
the budget estimates of the different departments,
bureaus and offices of the government.
15. • After preparing the budget, the Budget secretary submits
it to the President, who in turn submits it to Congress
within 30 days before the opening of the regular session.
• The 1987 Constitution specifically provides that the
President "shall submit to the Congress within thirty
days from the opening of every regular session, as the
basis of the general appropriations bill, budget of
expenditures and sources of financing, including receipts
from existing and proposed revenue measures" ( Sec. 22,
Art. VI). Congress uses the budget submitted by the
president as the basis for the annual appropriation.
• According to the 1987 Philippine Constitution, Congress
"may not increase the appropriation recommended by
the President for the operation of the Government as
specified in the budget" (Sec. 25(1), Art. VI).
16. Budget Execution
• This is where the people’s money actually spent. As
soon as the GAA is enacted, the government can
implement its priority programs and projects.
What are the Release Guidelines and Programs?
What are the Budget Execution Documents?
What is Allotment and Cash Release Programming
What is Allotment Release?
What are incurring Obligations
What does GAA Allotment Release mean?
What are Cash Allocation?
What is Cash Disbursement?
17. Budget Execution
Release Guidelines and Program
• The budget execution phase begins with DBM’s
issuance of guidelines on the release and
utilization of funds.
18. • Agencies are required to submit
their BEDs at the start of budget
execution. These documents
outline agency plans and
performance targets. These BEDs
include the physical and financial
plan, monthly cash program,
estimate of monthly income, and
list of obligations that are not yet
due and demandable.
Budget Execution
Documents
19. • To ensure that releases fit the approved
Fiscal Program, the DBM prepares an
Allotment Release Program (ARP) to set a
limit for allotments issued to an agency and
on the aggregate.
• The ARP of each agency corresponds to the
total amount of the agency- specific budget
under the GAA, as well as Automatic
Appropriations. A Cash Release Program
(CRP) is also formulated alongside that to
set a guide for disbursement levels for the
year and for every month.
Allotment Release
Programs
20. • Allotments, which
authorize an agency to
enter into an obligation,
are either released by
DBM to all agencies
comprehensively
through the Agency
Budget Matrix (ABM)
and individually via
Special Allotment
Release Orders (SAROs).
Allotment Release
21. • Agency Budget Matrix (ABM)
This document disaggregates
all programmed appropriations
for each agency into two main
expenditure categories: “not
needing clearance” and “needing
clearance.”
• The ABM is the comprehensive
allotment release document for
appropriations which do not
need clearance, or those which
have already been itemized and
fleshed out in the GAA.
Allotment Release
22. • Allotment Release Orders
(SAROs) Items identified as
“needing clearance” are those
which require the approval of the
DBM or the President, as the
case may be (for instance, lump
sum funds and confidential and
intelligence funds).
• For such items, an agency needs
to submit a Special Budget
Request to the DBM with
supporting documents. Once
approved, a SARO is issued.
Allotment Release
23. • In implementing programs,
activities and projects, agencies
incur liabilities on behalf of the
government. Obligations are
liabilities legally incurred,
which the government will pay
for.
• There are various ways that an
agency “obligates:” for
example, when it hires staff (an
obligation to pay salaries),
receives billings for the use of
utilities, or enters into a
contract with an entity for the
supply of goods or services.
Incurring Obligation
24. GAA as Allotment Release
• The Aquino Administration plans to design the annual
General Appropriations Act as the comprehensive
allotment release document itself. This is being pursued
in order to significantly speed-up the process of releasing
the Budget and implementing the programs and projects
that it funds.
• The 2013 National Budget, currently being prepared, is
being designed in such way. This entails the
disaggregation of all budget items into full detail, as well
as the elimination of all lump-sum funds, save for a few
exceptions such as the Calamity Fund. In other words,
this reform significantly reduces the need for SAROs.
25. Cash Allocation
• To authorize an agency to pay
the obligations it incurs, DBM
issues a disbursement
authority.
• Most of the time, it takes the
form of a Notice of Cash
Allocation (NCA); and in
special cases, the Non-Cash
Availment Authority (NCAA)
and Cash Disbursement
Ceiling (CDC).
26. Cash Allocation
• This is a cash authority issued
periodically by the DBM to the
operating units of agencies to
cover their cash requirements.
• The NCA specifies the maximum
amount of cash that can be
withdrawn from a government
servicing bank for the period
indicated.
• The release of NCAs by DBM is
based on an agency’s submission
of its Monthly Cash Program
and other required documents.
27. Cash Allocation
• Others Disbursement
Authorities.
• In contrast to NCAs, Non-Cash
Availment Authority (NCAA) are
issued to authorize non- cash
disbursements.
• Cash Disbursement Ceiling
(CDC) are meanwhile issued to
departments with overseas
operations, allowing them to use
income collected by their foreign
posts for their operating
requirements.
28. Disbursement
• This is the final step of the budget
execution phase, where government
monies are actually spent. The Modified
Disbursement Scheme is mostly used,
where disbursements of national
government agencies chargeable against
the Treasury are made through
government servicing banks, such as the
Land Bank of the Philippines.
• The budget process, of course, does not end
when government agencies spend public
funds: each and every peso must be
accounted for to ensure that is used
properly, contributing to the achievement
of socio-economic goals.
29. Budget Expenditure
• Budget expenditure refers to the estimated
expenditure of the government during a given
fiscal year.
• The budget expenditure can be broadly
categorized as:
▫ Revenue Expenditure
▫ Capital Expenditure
30. • Revenue Expenditure refers to the expenditure
which neither creates any asset nor causes any
reduction in any liability of the government. It is
recurring in nature.
• It is incurred on normal functioning of the
government. Examples: Payment of salaries,
pensions, interests, etc. An expenditure is a revenue
expenditure,
• if it satisfies the following two essential condition:
a. The expenditure must not create an asset of the
government.
b. The expenditure must not cause decrease in an
liability.
31. • Capital Expenditure refers to the expenditure which
either creates an asset or causes a reduction in the
liabilities of the government. It is non-recurring in
nature. It adds to capital stock of the economy and
increases its productivity through expenditure on
long period development programmes.
• Examples: Loan to states and Union Territories, etc.
An expenditure is a capital expenditure,
• if it satisfies any one of the following two conditions:
1. The expenditure must create an asset for the
government.
2. The expenditure must cause a decrease in the
liabilities.
32. The 2015 Budget for Inclusive and
Sustained Development
• The National Budget is the
government’s annual plan to
achieve the country’s development
goals. It spells out:
How much will be collected
Borrowed
and spent for
• programs, activities, and projects
that will be implemented during the
year. Aside from the financial
allocations, the Budget also identifies
the performance targets of
government agencies
34. The 2015 Budget for Inclusive and
Sustained Development
• Thus, the P2.606-trillion National Budget
provides more investments in poverty-reducing
and job-generating interventions that enable
inclusive and sustained growth.
• The government will spend about P25,700 for
every Filipino or about P7.1 billion a day to
provide services to all
• This Budget, equivalent to 18.4 percent of GDP,
provides greater resources for services that
empower the poor and marginalized. About P64
in P100 will go to social and economic services
such as education, healthcare, and
infrastructure.
35.
36.
37.
38. SECTORAL ALLOCATIONS
• Social services are amply supported under the 2015 GAA, with
major social welfare protection and development programs getting
sizeable budgets for next year. The Administration’s flagship anti-
poverty program, the Pantawid Pamilyang Pilipino Program (4Ps),
corners P62.3 billion in next year’s National Budget to address the
needs of 4.3 million families in need.
• Other major allocations under the 2015 GAA include P53.9 billion
for Basic Education Facilities, which covers the respective
construction and repair of 31,728 classrooms and 9,500 classrooms,
as well as the development of 13,586 water and sanitation facilities,
and the procurement of 1.3 million seats.
• At the same time, Philhealth premium subsidies get P37.1 billion of
the total budget to benefit 15.4 million poor and near-poor families,
while P11 billion will be directed to socialized housing for in-need
families, particularly those living in danger zones or high-risk areas.
39. • Economic services are still a major driver in the
President’s inclusive growth campaign, as the
Administration devotes about 4 percent of the total
budget to strategic infrastructure programs.
Comprising this are P185.8 billion for the
development of national roads and bridges, as well
as P10.6 billion to improve the country’s railway
systems (including the rehabilitation of LRT Lines 1
and 2 and subsidies to MRT 3), among others.
• At the same time, P89.1 billion will go towards
boosting agricultural production projects under the
Department of Agriculture and its attached agencies
and various government-owned or -controlled
corporations.
40. • Various programs and projects for climate change
adaptation and mitigation are a major focal point in
the Administration’s development strategy. To this
end, P14 billion has been devoted to the Calamity
Fund—now known as the National Disaster Risk
Reduction and Management Fund—while another
P6.7 billion has been tagged as Quick Response
Funds. Meanwhile, the Aquino administration’s
“Build Back Better” program—designed to address
the recovery requirements in the aftermath of Super
Typhoon Yolanda and other previous calamities—
will get 21.7 billion for 2015.
41.
42. Funding the 2015 Budget
Through the 2015 Budget, the government plans to increase
disbursements by 21.1 percent to support programs and
projects that support inclusive development. Revenues will be
increased by about 19.2 percent in order to keep the fiscal
deficit within 2 percent of GDP.
The National Government Fiscal Program,
2009-2015
43. Overview of the 2015 Expenditure Program
The Budget by Sector, 2005 to 2015
44. • The Budget by Sector, 2005 to 2015
• A decade ago, debt servicing took the lion’s share of
total government spending. Today, more than half of
the Budget is allocated for social and economic
services
• Social Services received the largest share of the
Budget at 36.6 percent to provide adequate social
protection for the poor and vulnerable, and to
increase investments in basic education, universal
healthcare, and other social services. Within this
sector, Education, Culture, and Manpower
Development receive the largest allocation
45. Social Services (in billion pesos) 952.7
Education, Culture & Manpower Development 453.0
Health 96.3
Education, Culture & Manpower Development 246.7
Housing & Community Development 10.3
Others (incl. Land Distribution & LGU Subsidy) 146.3
46. • Economic Services grew by 19.2 percent from its
allocation in 2014— faster than the year-on-year
growth of the total Budget for 2015—to hike
investments in public infrastructure and to help
boost the productivity of agriculture,
manufacturing, tourism, and other job—and
livelihood—generating industries.
47. Economic Services (in billion
pesos)
707.0
Agriculture & Agrarian Reform 114.5
Natural Resources & Environment 23.8
Water Resources Development &
Flood Control
39.8
Communications, Roads, & Other
Transport
340.1
Others (incl. Trade, Tourism,
Energy, LGU Subsidy)
188.8
48. • General Public Services at 16.5 percent of the
total Budget will be used for general
administration activities, such as fiscal
management, foreign affairs, public order and
safety, among others.
• Defense spending grew by 29.4 percent from
2014 to pursue the modernization of the Armed
Forces and boost its capability to ensure national
security, stability, and peace throughout the
nation.
50. • Maintenance and Other
Operating Expenditures
(MOOE) are for the
purchase of goods and
services (e.g. supplies,
maintenance, professional
services) needed for the
operation of various
government programs. The
2015 Budget allocated P465
billion for MOOEs: an
increase of 12 percent from
2014 level.
Infrastructure and
Other Capital Outlays for
roads,
bridges, airports, railways,
and other public goods
needed by industries to
increase their productivity,
reduce costs, and create
more jobs. For 2015, P638.7
billion will be invested in
infrastructure and other
capital
spending, an increase of
51. • Government needs people and
facilities to put these developmental
endeavors into action. As such, the
2015 Budget set aside P746 billion
for Personnel Services—the
largest share of the Budget at 28.6
percent—for the salaries and benefits
of government employee
The national government also provides
Allocations for Local Government Units
(LGUs), representing their shares from the
national government revenues as mandated by
law, as well as including allocations for MMDA
and Local Government Support Fund. For
2015, this allocation amounts to P423.3 billion
or 16 percent of the Budget. Of this amount,
P389.9 billion was allotted for the Internal
Revenue Allotment.
52. The national government Provides Budgetary
Support to Government Owned or –
Controlled Corporations (GOCCs),
especially for those implementing priority
programs of the national government. Total
budgetary support to GOCCs in 2015 amounts to
P90.3 billion for subsidies, equity infusion, and
net lending to advance the payment of national
government-guaranteed GOCC debt.
A significant amount of the Budget was
allocated for Interest Payments to
service government’s outstanding debt.
Through the government’s debt
management efforts, the share of interest
payments from the Budget has decreased
to 14.3 percent or P372.9 billion, from 20
percent in 2010.
53.
54.
55.
56. Special Purpose Funds (SPFs)
On top of their regular budgets, departments and agencies
are also provided additional funds sourced from Special
Purpose Funds (SPFs). These are budgetary items in the
General Appropriations Act (GAA) for specific purposes,
such as disaster response, personnel benefits and pensions,
or support to government corporations. Most SPFs are
presented in the GAA in detail, such as Budgetary Support
to Government Corporations which is disaggregated per
recipient and program or project. Meanwhile, some SPFs,
like the Calamity Fund, are lump sum in nature as the
specific programs or projects to be funded are only
identified during budget execution.
57.
58. Disaggregated SPFs
• Miscellaneous Personnel Benefits Fund—payment of
government personnel-related expenditures, such as Performance-
Based Bonuses, requirements for the filling up of authorized
positions, and for the creation of new positions, etc.
• Pension and Gratuity Fund— payment of pensions of uniformed
government personnel (e.g., police and military), which are fully
subsidized by the national government; retirement and terminal
leave benefits; separation benefits and incentives, etc.
• International Commitments Fund—allocation for
government’s commitments and pledges to international
organizations, such as the United Nations and Open Government
Partnership; and the hosting of conferences such as the 2015 Asia-
Pacific Economic Cooperation (APEC) Meeting.
59. Disaggregated SPFs
• Budgetary Support to Government
Corporations—assistance to government-
owned and/or controlled corporations (GOCCs)
through subsidies and equity infusion.
• E-Government Fund—allocation for strategic
information and communications technology
projects that enhance transparency and
efficiency in the government.
60. Lump Sum SPFs
• National Disaster Risk Reduction and Management Fund—
formerly the Calamity Fund, this is made available to enable
government to respond to calamities and other disasters, which are
hard to predict. Releases may only be made upon the recommendation
of the National Disaster Risk Reduction and Management Council, and
the approval of the President. The P14 billion allocation for NDRRMF
includes P1 billion for the People’s Survival Fund (PSF)
• Rehabilitation and Reconstruction Fund—allocation for the
rehabilitation and reconstruction of areas affected by recent calamities.
• Allocation to Local Government Units (ALGU)—subsidy given to
local government units (LGUs) corresponding to their legal shares in
national revenue collections. The ALGU also includes the budget of the
Metropolitan Manila Development Authority (MMDA).
• Contingent Fund—allocation used for requirements of new and/or
urgent projects and activities that need to be implemented during the
year. Releases from this fund require prior approval of the President.
61. • Automatic Appropriations
▫ Automatic appropriations are authorizations made by law
or other legislative enactment that do not require periodic
action by Congress. Automatic appropriations comprise 33
percent or P866.2 billion of the 2015 National Budget. SPFs
that are automatically appropriated comprise 68 percent or
P816 billion, bulk of which are for Internal Revenue
Allotment for LGUs and Interest Payments.
• Unprogrammed Appropriations
▫ These accounts are standby appropriations that can only be
used when there are windfall revenues in excess of the
government’s revenue program for the year.
62. Priority Programs
• The National Budget for 2015 focuses on these
goals: give adequate social protection and basic
social services to the poor; support industries
that create more jobs and livelihood
opportunities; protect vulnerable communities
from natural disasters; and bring development
and good governance to communities.
63. A. Social Protection and Social Services
• As an inclusive economy is being created,
the government invests in building the
capacity of the poor to enable them to
participate by expanding social protection
and social services, such as universal
healthcare, education, and housing.
B. Economic Expansion and Job
Generation
To create an inclusive economy calls for
sustaining the country’s high economic growth
in a way that creates more jobs and livelihood
opportunities. This Budget invests in strategic
support to key sectors, such as transportation,
manufacturing, tourism, and
agriculture.
64. C. Climate Change and Disaster Risk
Reduction
The impact of climate change is a
real threat to economic progress.
Thus, this Budget invests in building
the capability of government to
respond to climate change and
mitigate the cost of disasters, as well
as to build back vulnerable
communities better and safer.
D. Enabling Environment for
Inclusive Development
Development gravitates to
communities when there is peace
and rule of law, and where good
governance is present. This Budget
sustains government policies
and investments in establishing an
environment that supports
inclusive development.
65. Priority Development Assistance Fund
scam
• The Priority Development Assistance Fund
scam, also called the PDAF scam or the pork
barrel scam, is a political scandal involving the
alleged misuse by several members of the
Congress of the Philippines of their Priority
Development Assistance Fund (PDAF, popularly
called "pork barrel"), a lump-sum discretionary
fund granted to each member of Congress for
spending on priority development projects of the
Philippine government, mostly on the local level.
66. Priority Development Assistance Fund
scam
• It is estimated that the Philippine government
was defrauded of some ₱10 billion in the course
of the scam,[1] having been diverted to Napoles,
participating members of Congress and other
government officials. Aside from the PDAF and
the fertilizer fund maintained by the Department
of Agriculture, around ₱900 million in royalties
earned from the Malampaya gas field were also
lost to the scam
67. • the PDAF in its current form was only established
during the administration of Corazon Aquino with
the creation of the Countrywide Development Fund
(CDF) in 1990. With ₱2.3 billion in initial funding,
the CDF was designed to allow legislators to fund
small-scale infrastructure or community projects
which fell outside the scope of the national
infrastructure program, which was often restricted
to large infrastructure items. The CDF was later
renamed the PDAF in 2000, during the
administration of Joseph Estrada.
68. Priority Development Assistance Fund
scam
• Since 2008, every member of the House of Representatives
usually receives an annual PDAF allocation of ₱70 million,
while every senator receives an annual allocation of ₱200
million.[8] The President also benefits from a PDAF-like
allocation, the President's Social Fund (PSF), worth around ₱1
billion. Contrary to public belief, however, PDAF allocations
are not actually released to members of Congress. Rather,
disbursements under the PDAF are coursed via implementing
agencies of the Philippine government, and are limited to
"soft" and "hard" projects: the former largely referring to non-
infrastructure projects (such as scholarships and financial
assistance programs, although small infrastructure projects
are also considered "soft" projects), and the latter referring to
infrastructure projects which would be coursed via the
Department of Public Works and Highways
69. Modus Operandi
• The PDAF or Pork Barrel Scam involved the funding of "ghost
projects" that were funded using the PDAF funds of
participating lawmakers.[15] These projects were in turn
"implemented" through Napoles' companies, with the projects
producing no tangible output. According to testimony
provided by Benhur Luy's brother, Arthur, funds would be
processed through fake foundations and non-governmental
organizations (NGOs) established under the wing of the JLN
Group of Companies, the holding company of Janet Lim-
Napoles, with Napoles' employees—even a nanny—named as
incorporators or directors.[16] Each foundation or NGO
served as an official recipient of a particular legislator's PDAF
funds, and each organization had a number of bank accounts
where PDAF funds would be deposited for the
implementation of these projects.
70. Modus Operandi
• Napoles, who specialized in trading agricultural products, frequently used
the procurement of agricultural inputs in the propagation of the scam.
Either her employees would write to legislators requesting for funds for the
implementation of a particular project (e.g. farm inputs), or a legislator
would indicate to the DBM a particular recipient agency for his or her PDAF
funds that would be pre-selected by Napoles.[17] Once received, this is
forwarded to the DBM, which would then issue a Special Allotment Release
Order (SARO) indicating the amount deducted from the legislator's PDAF
allocation, and later a Notice of Cash Allocation (NCA) given to the
recipient agency. The NCA would then be deposited in one of the
foundation's accounts, and the funds withdrawn in favor of the JLN Group
of Companies.[16] The funds would then be split between Napoles, the
lawmaker, the official of the DA responsible for facilitating the transfer of
funds and, for good measure, the local mayor or governor.[15] The JLN
Group of Companies offered a commission of 10-15% against funds released
to local government units and recipient agencies of PDAF funds, while a
legislator would receive a commission of between 40-50% against the total
value of his/her PDAF.
71. Accused Parties
• In the initial report published by the Philippine Daily
Inquirer, 28 members of Congress (five senators and 23
representatives) were named as participants in the PDAF
scam. Twelve of these legislators were identified by the
newspaper, and close to ₱3 billion in PDAF funds coming
from these legislators alone were exposed to the scam.
Notably, the Inquirer named Bong Revilla, Juan Ponce
Enrile, Jinggoy Estrada, Ferdinand Marcos, Jr. and
Gregorio Honasan as the five senators who participated
in the scam. Revilla was the largest contributor among
the 28 legislators, with around ₱1.015 billion of his PDAF
funds being transferred to organizations identified with
the JLN Group of Companies, although the extent to
which legislators participated in the scam varied widely