Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO. 4787

Introduced by ATTY. MAGTANGGOL T. GUNIGUNDO I

EXPLANATORY NOTE

‘The main goal of the Expenditure and Savings Incentive Act of 2014 which is
originally HB 5171 that we filed in the 14th Congress is to authorize heads of various local
government units (LGUs) and national government agencies to retain savings from their
Maintenance and other Operating Expenses (MOOB) and Capital Outlay (CO) for purposes
of providing services and equipment beyond the fiscal year such savings accrued. Said bill
was referred then to the Committee on Local Government that posited to stakeholders,
including DBM for comments.

It was then referred primatily to the Committee on Appropriations and secondarily to
the Committee on Local Government. ‘The two committees then asked all stakeholders for
comment and was referred to the Department of Budget and Management (DBM) for its
position paper but it was not submitted because no succeeding deliberations were scheduled
for said bill.

Presently, thete is no incentive and motivation for LGUs and government agencies to
implement belt-tightening measures since they have to return theit savings to the National
‘Treasury ot to the local treasury at the end of the fiscal year. This proposed measure
authorizes these LGUs, agencies, departments, bureaus, and commissions of the national
government to retain their savings, and use them for other unprogrammed capital outlay
projects such as acquisition at bargain prices of equipment that would not be available ail
year round. This law encourages austerity and provides budget flexibility for government
units, thereby cutting down red tape and corruption in the procurement process.

This is an effective measure to reduce the budget deficit of the national government
and likewise a good alternative for the national government to accelerate the disbursements
for its intended programs.

Proper post-audit shall be conducted to prevent abuse of this authority.

Immediate approval of this bill is earnestly sought.

ey

ATTY. MAGTANGGOL T. GUNIGUNDO I


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS

Second Regular Session

HOUSE BILL NO. _4787

Introduced by HON. MAGTANGGOL T. GUNIGUNDO I

AN ACT
AUTHORIZING HEADS OF VARIOUS LOCAL GOVERNMENT UNITS
(LGUs) AND NATIONAL GOVERNMENT DEPARTMENTS, BUREAUS,
COMMISSIONS AND OTHER AGENCIES TO RETAIN SAVINGS FROM
THEIR MAINTENANCE AND OTHER OPERATING EXPENSES
(MOOE) AND CAPITAL OUTLAY (CO) FOR PURPOSES OF FUNDING
UNPROGRAMMED CAPITAL OUTLAY PROJECTS

Be it enacted by the Senate and the House of Representatives in Congress assembled:

Section 1. Short Title. — This Act shall be known as “Ihe Expenditure and Savings
Incentive Act of 2014.”

Section 2. Definition of Terms. — For purposes of this Act, the following terms shall mean
as follows:

a) Savings- refer to the excess amount in the financial account of an agency for the
appropriation year after spending for the intended and programmed projects (cernices have

been rendered/ goods have been delivered or projects have been completed and accepted).

b)

Maintenance and Other Operating Expenses (MOOE) - refer to expenditures to
support the operations of government agencies such as expenses for supplies and
materials; transportation and travel; utilities (water, power, etc.) and the repairs, ete.

©) Capital Outlay (CO) - refers to the appropriations for the purchase of goods and
services, the benefits of which extend beyond the fiscal year and which add to the assets
of the Government, including investments in the capital stock of government-owned
and controlled corporations and their subsidies,

@) Unprogrammed Capital Outlay Projects- refer to projects of the government for the
purchase of goods and services earmarked for capital outlay that are available only when
there is savings by the agency.

Section 3. Retention and Use of the Savings.. ~ All heads of various local government
units and national government departments, bureaus, commissions and other agencies ate hereby
allowed to retain savings from their Maintenance and other Operating Expenses (MOOE) and
Capital Outlay (CO) beyond the fiscal year such savings acctued.

‘These savings may be used by the said government unit in fanding unprogrammed capital
outlay projects, subject to post-audit.

Section 4. Implementing Rules and Regulations. ‘The Secretary of Budget and
Management (DBM), in coordination with the Department of the Intetior and Local Government


(DILG) shall promulgate the necessary rules and regulations for the effective implementation of this
‘Act within thirty (30) days from its effectivity.

Section 5. Separability Clause. ~The provisions of this Act are heteby deemed separable. If
any provision thereof is declared invalid or unconstitutional, such invalidity or unconstitutionality
shall not affect the other provisions which shall remain in effect.

Section 6. Repealing Clause. ~ All laws, dectees, executive orders, rules and regulations, or
parts thereof, inconsistent with the provisions of this Act are hereby repealed.

Section 7. Effectivity. ~'This Act shall take effect fifteen (15) days following its publication in
the Official Gazette or in a newspaper of general circulation,

Approved,