SIXTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Second Regular Session 
) 
SENATE 
S.No. 
2750 
Introduced by Senator Franklin M. Drilon 
EXPLANATORY NOTE 
'15 
MAY -5 P3:41 
AN ACT TO ENFORCE GREATER ACCOTJNTABILITY IN PUBLIC FINANCIAL 
MANAGEMENT (PFM) BY STRENGTHENING CONGRESS' POWER OF THE 
PURSE, INSTITUTING AN INTEGRATED PFM SYSTEM, AND INCREASING 
BUDGET TRANSPARENCY AND PARTICIPATION, AND FOR OTHER 
PURPOSES 
The Philippines is one of the few remammg countries where there is no law 
specifically tailored to public financial management. The passage of this bill will therefore 
stand as a veritable landmark in the history of Philippine legislation as it will not only align 
the public financial management system with international standards and practices but it 
will also consolidate, harmonize and address the gaps between existing laws, jurisprudence, 
executive issuances and rules pertinent to all public financial management activities. 
This proposed measure further seeks to strengthen and institutionalize the fiscal 
reforms that have been established by the current Administration and secure its 
irreversibility within the Philippine bureaucracy. Entrenched in the bill are the: roles and 
responsibilities of all public financial management institutions; establishment of fiscal 
responsibility mechanisms; arrangements for the planning and control of cash and the 
management of revenues and liabilities; institutionalization of financial management and 
internal control rules for agencies, agency-level planning and reporting requirements, and 
whole-of-government reporting and audit; and strengthened mechanisms for citizens' 
access to PFM information and participation in the budget process. 
Clearly, the passage of this bill will fortify the government's accountability to the 
people for its use of public funds through a more efficient public financial management that 
facilitates greater transparency and delivery of direct, immediate and substantial services. 
In view of the foregoing, the immediate passage of this b~ll is earnestly sought. 


SIXTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session 
SENATE 
S.B.No. 
2750 
Introduced by Senate President Franklin M. Drilon 
'15 
MAY -5 P 3 :41 
AN ACT TO ENFORCE GREATER ACCOUNTABILITY IN PUBLIC FINANCIAL 
MANAGEMENT (PFM) BY STRENGTHENING CONGRESS' POWER OF THF. 
PURSE, INSTITUTING AN INTEGRATED PFM SYSTEM, AND INCREASING 
BUDGET TRANSPARENCY AND PARTICIPATION, 
AND FOR OTHER PURPOSES 
PART I 
PRELIMINARY PROVISIONS 
1 
Section 1. Short Title. - This Act shall be kuown as the "Public Financial Accountability 
2 
Act." 
3 
4 
Section 2. Declaration of Policy and Objectives. - It is hereby declared the policy 
5 
of the State to ensure accountability and integrity in the use of public resources by ensuring 
6 
transparency, fiscal responsibility, results-orientation, efficiency, and effectiveness. This 
7 
shall be upheld through the establishment of an integrated system of planning, budgeting, 
8 
management, accounting, reporting and review of public finances. In light of these 
9 
requirements, the State shall pursue the following specific objectives: 
10 
11 
(a) To enforce the power of Congress to authorize all appropriations and hold 
12 
government accountable in the use of public resources, as well as the responsibility of 
13 
all government agencies to propose, execute and deliver committed results in the 
14 
appropriations acts in a timely, predictable, and economic manner; 
15 
16 
(b) To promote people's empowerment in the management of public resources by 
17 
enforcing their right to access information on, and to contribute in the formulation 
18 
and implementation of, the financial affairs of the government; and 
19 
20 
(c) To strengthen the integration ofplanninll;, budgeting, and performance management 
21 
and ensure ample safeguards in managing public finances, including through 
22 
int~rnal controls, accounting, reporting, and risk management; 
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Section 3. Scope and Coverage. - The provisions of this Act shall apply to the 
2 
management of revenues, expenditures, financing arrangements, and assets and liabilities 
3 
of national government agencies (NGAs), government-owned or -controlled corporations 
4 
(GOCCs),.and local government units (LGUs) to the extent provided herein. 
5 
6 
Section 4. Definition of Terms. - The following terms when used in this Act and the 
7 
implementing rules and regulations shall be understood, as follows: 
8 
9 
(a) Accounting Standards refer to authoritative statements on how transactions and 
10 
other events should be reflected in the accounts and financial statements of 
11 
Government Agencies as promulgated by the Commission on Audit (COA); 
12 
13 
(b) Allotment refers to the authorization issued by the Department of Budget and 
14 
Management (DBM) for NGAs, GOCCs, or LGUs to incur obligations up to a certain 
15 
amount, for a specified public purpose, and within a specified period of time, in 
16 
accordance with the Appropriations Law; 
17 
18 
(c) Appropriations Law refers to the legislative authorization for the utilization of 
19 
Public Funds for specific public purposes covering a specified period of time. This 
20 
may refer to either a general or special appropriations law; 
21 
22 
(d) Cabinet refers to the Executive Secretary and the Secretaries of the departments 
23 
under the executive branch; 
24 
25 
(e) Fiscal Year refers to a period of twelve months commencing on January 1 until 
26 
December 31; 
27 
28 
(f) Government Agencies collectively refer to NGAs, GOCCs and LGUs; 
29 
30 
(g) Government-Owned or -Controlled Corporations refer to agencies 'with 
31 
corporate powers, whether or not organized as a stock or non-stock corporation, 
32 
vested with functions relating to public needs whether governmental or proprietary 
33 
in nature, and owned by the Government of the Republic of the Philippines either 
34 
wholly or, where applicable as in the case of stock corporations, to the extent of at 
35 
least a majority of its outstanding capital stock. This includes Government Financial 
36 
Institutions, governmentl corporate instrumentalities and related corporations; 
37 
38 
(h) Government Financial Institutions refer to financial institutions in which the 
39 
GRP directly or indirectly owns the majority of the capital stock and which are either: 
40 
(i) registered with, or directly supervised by, the Bangko Sentral ng Pilipinas (BSP); 
41 
or (ij) authorized to collect or transact funds or contributions from the public and 
42 
place them in financial instruments or assets such as deposits, loans, bonds and 
43 
equity; 
44 
45 
(i) Head of Agency refers to the head of the department or agency in the case of 
46 
NGAs, the Board of Directors or Trustees in the case of GOCCs as well as certain 
47 
agencies which are structured as such, and the local chief executive in the case of 
48 
LGUs; 
49 
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(j) Local Government Units refer to provinces, cities, municipalities, and barangays, 
2 
as well as autonomous regions authorized to be created in the Constitution; 
3 
4 
(k) National Government Agencies refer to units of the national government, as 
5 
distinguished from GOCCs and LGUs, which include any of the departments, 
6 
bureaus, offices or instrumentalities of the Executive, Judicial and Legislative 
7 
branches of government, as well as the Constitutional Commissions, and the Office 
8 
of the Ombudsman; 
9 
10 
0) Proposed National Budget refers to a financial plan to be submitted by the 
11 
President to Congress reflective of national objectives, strategies and programs; 
12 
13 
(m) 
Public Officials refer to elective and appointive officials and employees, in a 
14 
permanent or temporary capacity, whether in the career or non-career service, 
15 
including military and uniformed personnel, regardless of the rank, form or amount 
16 
of compensation; 
17 
18 
(n)Public Funds refer to the monies of all Government Agencies sourced from taxes, 
19 
fees, charges, penalties, income, dividends, interest earnings, loan proceeds, grants, 
20 
proceeds from the sale of assets, and such other receivables of the 
21 
government that the Government has a legal right to retain and use and shall not 
22 
include any money received in error; and 
23 
24 
(0) Subsidiary refers to a corporation where at least a majority of the outstanding 
25 
capital stock is owned or controlled, directly or indirectly and through one or more 
26 
intermediaries, by a GOCC. 
27 
28 
In this Act the singular may be read as the plural and the plural may be read as the 
29 
singular, as the context requires. 
30 
31 
32 
PART II 
33 
ADDITIONAL ROLES AND RESPONSIBILITIES 
34 
35 
Section 5. Congress. -
The Congress shall, in addition to its powers under the 
36 
Constitution and existing laws, perform the following: 
37 
38 
(a) Monitor and review government performance against the requirements of 
39 
appropriations and related laws, and hold Government Agencies accountable for 
40 
their financial and non-financi~l performance; 
41 
42 
(b) Review reports on planned and actual performance, including the Statement of Fiscal 
43 
Policy, the Medium Term Fiscal Strategy, fiscal reports, annual plans of government 
44 
agencies, periodic and annual reports on government performance and performance 
45 
of government agencies; and 
46 
47 
(c) Consider the consolidated annual financial statements of government prepared by 
48 
the Office of the Comptroller General (OCG) and the audited government agency 
49 
reports by the COA. 
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1 
Congress shall undertake the foregoing through any of its existing committees, support 
2 
offices or one created for the purpose to strengthen the oversight role of Congress. 
3 
4 
Section 6. President. - The President shall, in addition to his/her powers under the 
5 
Constitution and existing laws, perform the following: 
6 
7 
(a) Approve the Statement of Fiscal Policy, and the Medium-term Fiscal Strategy for 
8 
submission to Congress; 
9 
10 
(b) Approve the 
Budget Priorities Framework 
to identify the priority areas for 
11 
government spending and guide the budget preparation exercise; and, 
12 
13 
(c) Authorize changes in the functional, operational and organizational structure within 
14 
and among the DBM, Department of Finance (DOF), and National Economic and 
15 
Development Authority (NEDA), as may be necessary, to ensure the effective 
16 
implementation of this Act. 
17 
18 
Section 7. Commission on Audit. - The COA shall, in addition to its powers under the 
19 
Constitution and existing laws, coordinate with the DBM, through the OCG, for the proper 
20 
enforcement of timely accounting and reporting of public finances. 
21 
22 
Section 8. Department of Budget and Management. - The DBM shall, in addition 
23 
to its mandates and functions under existing laws, perform the following: 
24 
25 
(a) Prepare, in coordination with the agencies concerned, and DOF, NEDA and OP in 
26 
the Development Budget Coordination Committee (DBCC), the Statement of Fiscal 
27 
Policy, the Medium-term Fiscal Strategy, the Budget Priorities Framework, and the 
28 
Mid-year and Annual Fiscal Reports as required in this Act; 
29 
30 
(b) Monitor and evalnate the financial and non-financial performance ofNGAs; 
31 
32 
(c) Evaluate and review the financial and non-financial performance of GOCCs with 
33 
special laws and charters, in coordination with the DOF and the Governance 
34 
Commission for GOCCs (GCG), and approve the annual corporate operating budgets 
35 
(COBs) ofthe GOCCs; 
36 
37 
(d) Monitor and review, together with the Bureau of Local Government Finance (BLGF) 
38 
under the DOF and Department of the Interior and Local Government (DILG), the 
39 
financial and non-financial performance of LGUs; 
40 
41 
(e) Assess, together with the BLGF under the DOF and DILG, the PFM systems ofLGUs 
42 
and assist them in designing and implementing PFM improvement measures; and 
43 
44 
To ensure the effective formulation and execution of fiscal policies, the Secretary of 
45 
Budget and Management shall lead the DBCC, with the Secretary of Finance, the Director 
46 
General of the NEDA Secretariat and a representative from the OP as members, and the 
47 
Governor of the BSP as resource person. 
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To enhance the management of public finances, there is hereby created an Office of the 
2 
Comptroller General under the supervision and control of the DBM which shall perform the 
3 
following functions: 
4 
5 
i. 
Formulate measures on effective internal controls, for the implementation by 
6 
Government Agencies, to ensure the integrity, accuracy, completeness, and reliability 
7 
of government financial and management systems; 
8 
9 
ii. 
Oversee the implementation of, and Government Agencies' compliance with, 
10 
accounting and auditing rules and regulations promulgated by the COA; 
11 
12 
iii. Oversee and manage the financial reporting of Government Agencies, including (1) 
13 
to monitor the periodic and annual management and financial accounts with 
14 
regard to accuracy, timeliness, completeness, and compliance with this Act, 
15 
standards, rules and regulations; and (2) to consolidate the financial 
16 
reports for submission to the President, Congress, and COA; 
17 
18 
iv. Oversee the operationalization of the financial management information system of 
19 
the government; 
20 
21 
v. Formulate competency-based human resource policies for positions in public financial 
22 
management and coordinate on capacity building requirements on PFM with other 
23 
agencies; 
24 
25 
vi. Oversee the implementation of Public Expenditure Framework policies of LGUs; 
26 
27 
vii. Coordinate with counterpart agency officials to ensure compliance with the foregoing 
28 
functions; and 
29 
30 
viii. Perform such other functions as may be necessary to properly implement the 
31 
provisions under this Section. . 
32 
33 
The OCG shall be headed by the Comptroller General who shall be of the same rank as 
34 
an Undersecretary, and with the structure and staff complement as may be approved by the 
35 
DBM. The heads of agency shall designate a Comptroller in their respective offices to 
36 
oversee the implementation of the above-mentioned functions at the agency level in 
37 
coordination with the Comptroller General. 
38 
39 
Section 9. Department of Finance. -
The DOF shall, in addition to its mandates and 
40 
functions under existing laws, perform the following: 
41 
42 
(a) Monitor and manage fiscal risks to the government, including those from public-
43 
private partnerships; 
44 
45 
(b) Compile and publish government fiscal statistics in accordance with international 
46 
standards; and 
47 
48 
(c) Formulate policies and standards for the acquisition and management of fixed assets 
49 
byNGAs. 
50 
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1 
The Bureau of the Treasury (BTr) shall, in addition to its mandates and functions under 
2 
existing laws, perform the following: 
3 
4 
i. Manage the Treasury Single Account (TSA) maintained at the BSP or an agent bank, 
5 
with the prior approval of the Secretary of Finance; 
6 
7 
ii. Put in place arrangements for the execution of duly authorized payments from the 
8 
TSA, which may include the appointment of banks to operate as agents of the 
9 
National Government with the prior approval of the Secretary of Finance; 
10 
11 
iii. Manage the financial assets and liabilities of the government, including (i) banking 
12 
arrangements for, and bank accounts of, the government; (ii) hedging and other risk 
13 
management activities associated with debt management, cash management and 
14 
financial investment; (iii) appointment of dealers, assets managers and other agents 
15 
to support debt, cash and investment management activities; (iv) maintenance of an 
16 
accurate record of the stock and flow of financial assets and liabilities; and (v) 
17 
tracking and reporting on fiscal risks related to the management of financial assets 
18 
and liabilities; 
19 
20 
iv. Issue instructions on the management al'd recording of financial assets and liabilities 
21 
of the government; 
22 
23 
v. Authorize the opening and closing of bank accounts ofNGAs; 
24 
25 
vi. Administer the release of cash requirements covering all types oftransfers to LGUs; 
26 
and 
27 
28 
vii. Establish and maintain a consolidated registry of fixed assets of the National 
29 
Government. 
30 
31 
Section 10. National Economic and Development Authority. - The NEDA shall, 
32 
in addition to its mandates and functions under existing laws, perform the following: 
33 
34 
(a) Coordinate with the Regional Development Councils (RDCs), on the formulation of 
35 
regional development plans and policies that are consistent with the established 
36 
national priorities; 
37 
38 
(b) Coordinate the formulation of an annual and medium-term public investment 
39 
program consistent with the approved Medium-term Fiscal Strategy and in the 
40 
context ofthe preparation ofthe National Budget; 
41 
42 
(c) Set standards for Government Agencies in proposing, assessing, monitoring and 
43 
evaluating development policies, plans and projects including those financed by 
44 
grants and concessionalloans; 
45 
46 
(d) Assist and support the capacity building of RDCs and LGUs in development planning 
47 
and investment programming; and 
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Section 11. Heads of Government Agencies. - The heads of NGAs, GOCCs and LGUs 
2 
shall, in addition to responsibilities provided under existing laws, be responsible for the 
3 
following: 
4 
5 
(a) Keep the DBM and DOF informed of significant changes, issues, and risks that could 
6 
impact on the finances of the government; 
7 
8 
(b) Participate in the processes to develop the Medium-term Fiscal Strategy, the Budget 
9 
Priorities Framework, and the Proposed National Budget as required by the DBM; 
10 
11 
(c) Manage their respective agencies, including GOCCs, and other resources placed 
12 
under their supervision, in an efficient, effective and economic manner in order to 
13 
deliver the outputs and attain the outcomes set in their respective budgets; 
14 
15 
(d) Take appropriate measures to ensure that contractual commitments or obligations 
16 
do not exceed the amounts appropriated in their respective budgets; 
17 
18 
(e) Ensure that their respective agencies settles all contractual obligations or approves 
19 
payment thereon within the tiIl!e prescribed by law; 
20 
21 
(f) Institute effective and efficient management systems, procedure and practices for 
22 
assets, liabilities, and personnel, including internal controls, risk management, and 
23 
performance review; 
24 
25 
(g) Demonstrate that due regard has been taken on the recommendations provided in 
26 
internal and external audit evaluation reports, to the extent authorized in their 
27 
respective budgets; and 
28 
29 
(h) Provide accounting and reporting of public finances as required in this Act. 
30 
31 
32 
PART III 
33 
FISCAL RESPONSIBILITY 
34 
35 
Section 12. Fiscal Responsibility Principles. - The State shall pursue its policy 
36 
objectives in accordance with the following Fiscal Responsibility Principles: 
37 
38 
(a) Implement fiscal policies and strategies consistent with the achievement of 
39 
macroeconomic stability and inclusive economic development; 
40 
41 
(b) Manage resources in a fiscally and environmentally sustainable way; 
42 
43 
(c) Maintain prudent levels of public debt; 
44 
45 
(d) Maintain an appropriate balance between government revenues and expenditures; 
46 
and 
47 
48 
(e) Manage fiscal risks in a prudent manner. 
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1 
Section 13. Statement of Fiscal Policy. - The DBM, in coordination with DOF, NEDA 
2 
and OP in the DBCC, shall prepare, subject to the approval of the President, the Statement 
3 
of Fiscal Policy which shall contain measurable medium-term macroeconomic and fiscal 
4 
objectives and forecasts consistent with the Fiscal Responsibility Principles. 
5 
6 
The President shall submit for information of Congress, the Statement of Fiscal Policy 
7 
not later than ninety (90) days upon commencement of his/her term of office and update 
8 
the measurable fiscal objectives set forth therein three (3) years thereafter. 
9 
10 
Section 14. Medium-term Fiscal Strategy. - The DBM, in coordination with the 
11 
DOF, NEDA, and OP in the DBCC, shall prepare, subject to approval of the President, a 
12 
Medium-term Fiscal Strategy consistent with the approved Statement of Fiscal Policy, to be 
13 
updated annually. It shall include a summary of the fiscal policies for revenue, debt, deficit, 
14 
expenditure, and fiscal risk managem~nt, supported by a medium-term fiscal sustainability 
15 
analysis, consistent with the measurable fiscal objectives established in the approved 
16 
Statement of Fiscal Policy. The IRR of this Act shall detail the other specifications for the 
17 
Medium-Term Fiscal Strategy. 
18 
19 
The President shall submit for the information of Congress, the Medium-term Fiscal 
20 
Strategy for the following fiscal year not later than March 15 of the current year and shall 
21 
publish the said report on a government website not later than seven (7) days after it is 
22 
submitted to Congress. 
23 
24 
Section 15. Fiscal Reports. - The DBM, in coordination with the DOF, NEDA, and OP 
25 
in the DBCC, shall produce a Mid-year Fiscal Report (MFR), covering the first half of the 
26 
fiscal year and an Annual Fiscal Report (AFR) on the government's macroeconomic and 
27 
fiscal performance. 
28 
29 
The MFR and AFR shall include information on macroeconomic and fiscal outturns for 
30 
the period covered as compared against forecasts and objectives stated in the Medium-Term 
31 
Fiscal Strategy; as well as reporting on budget execution, at least in the aggregate and by 
32 
agency level, compared against approved appropriations and other spending authorities. 
33 
The IRR of this Act shall detail the other specifications for the contents of the MFR and 
34 
AFR. 
. 
35 
/ 
36 
The President shall submit the MFR to Congress not later than September 30 of each 
37 
year while the AFR shall be submitted together with the Proposed National Budget. Said 
38 
reports shall be published on a government website not later than seven (7) days after they are 
39 
submitted to Congress. 
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1 
2 
Section 16. Long-term Vision Report. - The NEDA, in coordination with the DOF, 
3 
DBM and OP in the DBCC, shall submit a Long-term Vision Report to the President and 
4 
Cabinet, and Congress not later than October 31 and November 30, respectively. Said 
5 
Report shall assess the long-term sustainability of existing government policies over the 
6 
next thirty (30) years, taking into account demographic, environmental, and other changes. 
7 
8 
The first Long-term Vision Report shall be submitted to the President and Cabinet, and 
9 
Congress within two (2) years from t.he effectivity of this Act, to be updated every six (6) 
10 
years thereafter. 
11 
12 
The NEDA shall cause the publication of the Long-term Vision Report on a government 
13 
website not later than seven (7) days upon submission to Congress. 
14 
15 
Section 17. Deviationsfrom Fiscal Objectives. - The government may deviate from 
16 
the medium-term fiscal objectives in the approved Statement of Fiscal Policy on a 
17 
temporary basis, where such deviation is due to a major natural disaster, unanticipated 
18 
severe economic shock, or other significant unforeseeable event that cannot be 
19 
accommodated through accessing the Contingent Fund and/or the National Disaster Risk 
20 
Reduction and Management Fund, as may be applicable or prudent fiscal policy 
21 
adjustments, or the use of other flexibilities provided in this Act. 
22 
23 
The President shall submit a report to the Congress, stating the reasons for any such 
24 
deviations, the plans and the expected time to address such deviations, as part of the 
25 
succeeding Medium-term Fiscal Strategy or its annual update, or in the Mid-year or Annual 
26 
Fiscal Report, whichever is the next report due and within the prescribed period under this 
27 
Act. 
28 
Section 18. Shared Fiscal Discipline. All proposed revenue eroding and expenditure 
29 
bills shall include a Financial and Budgetary Information Sheet upon filing of the bill 
30 
containing an estimate of the financial and budgetary implications of said proposal for the 
31 
initial year of implementation and the next five (5) years. Expenditure bills refer to those 
32 
which will result in a reduction of revenue collections or an increase in national government 
33 
expenditures, including those mandating the creation of recurring expenditures. 
34 
Each House of Congress shall provide guidelines prescribing the form, content of 
35 
the Financial and Budgetary Information Sheet, as well as the appropriate offices from 
36 
which such information shall be acquired, and the implications of non-compliance with said 
37 
submission. 
38 
39 
PART IV 
40 
BUDGET PREPARATION, EXECUTION, AND ADJUSTMENT 
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1 
Section 19. Governing Principles in Budget Preparation. -
There is hereby 
2 
established a set of governing principles to be observed by the DBM in the preparation and 
3 
the presentation to Congress of the Proposed National Budget: 
4 
5 
(a) Cash-based estimates shall be adopted in the proposed general and special 
6 
appropriations bills to promote faster and more effective delivery of services; 
7 
8 
(b) The overall expenditure program of the government for a given fiscal year shall be 
9 
included, identifying those requiring approval by Congress and those authorized 
10 
under existing laws; 
11 
12 
(c) All sources of funds and authorized uses available to the agency shall be considered 
13 
in the evaluation of agency proposals and determination of agency budget levels, and 
14 
shall likewise be disclosed in the Proposed National Budget and reports; 
15 
16 
(d) Evaluation of agency proposals may include the analysis of a development plan, 
17 
master plan or road map, agency capability as demonstrated by previous years' 
18 
performance, its contribution to projects and activities of other agencies, utilization 
19 
of funds appropriated or released, and such other criteria as may be determined by 
20 
the DBM; 
21 
22 
(e) All appropriations shall be valid until the end of the fiscal year; 
23 
24 
(t) Items of appropriations shall be presented in such a way as to identify both the entity 
25 
responsible for the expenditure and the intended results from the use of the 
26 
appropriation in order to evaluate the performance of the agency; 
27 
28 
(g) Both the financial and non-financial performance of agencies shall be presented in 
29 
the Proposed National Budget and the General Appropriations Act to ensure a 
30 
performance- informed budget; and 
31 
32 
(h) Items of appropriations shall be reflected by department, agencies, bureaus, and 
33 
offices, and shall be presented for information purposes, by region and province, and 
34 
eventually, by city or municipality. 
35 
36 
37 
Section 20. Planning-Budgeting Linkage - Development strategies identified in the 
38 
Philippine Development Plan shall be a primary consideration in the formulation of the 
39 
budget priorities framework. These shall also be the basis for drawing up strategic and 
40 
prioritized programs and projects in the multi-year public investment program, which in 
41 
turn will be considered in the formulation of the annual agency budgets that conform to the 
42 
annual budget ceilings approved by the President. 
" 
43 
44 
The implementation of programs and projects funded under the annual agency budgets 
45 
shall be monitored to ensure economy, efficiency, and effectiveness in the use of public 
46 
funds. Monitoring and evaluation of these projects shall cover, among others, the planned 
47 
and actual performance of agencies, citing reasons for deviation and/or poor absorptive 
48 
capacities. The results of the project evaluation shall inform the assessment of subsequent 
49 
plans and budget proposals of agencies. 
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1 
2 
3 
Section 21. Budget Priorities Framework. - The DBM, in coordination with the 
4 
DOF, NEDA and OP in the DBCC, shall present to the President and Cabinet, in April of 
5 
each year, a Budget Priorities Framework which shall guide the formulation of the Budget 
6 
for the following year by containing the medium-term fiscal strategy and targets underlying 
7 
the budget; the priority areas for government spending reflected in the PDP, estimated 
8 
amount and planned allocation of the fiscal space; and other requirements laid down in the 
9 
IRR. 
10 
11 
Section 22. The Budget Preparation Pro(;ess. - The D BM shall determine the budget 
12 
preparation process and calendar. The budget preparation process shall cover: (i) NGAs; (ii) 
13 
GOCCs with respect to their impact on revenues, expenditures, assets, and liabilities and 
14 
risks of the government; and (iii) LGUs as to their impact on revenues and expenditures of 
15 
the government. 
16 
17 
Section 23. The Proposed National Budget. 
The President shall submit to 
18 
Congress, not later than thirty (30) days from the fourth Monday of July of every year, the 
19 
Proposed National Budget, which shall be the basis ofthe general appropriations bill. 
20 
21 
The President shall determine the form and content of the Proposed National Budget 
22 
which shall include, but not limited, to the following: 
23 
24 
(a) President's Budget Message - provides a preview of the Proposed National Budget, 
25 
explaining the principles, objectives and policy framework adopted and the spending 
26 
priorities for the fiscal year; 
27 
28 
(b) National Expenditure Program (NEP) - includes the strategic objectives, details of 
29 
the three-year (3-year) expenditure program, performance information, such as key 
30 
strategies, outputs and outcomes for agencies in relation to their budgets, and 
31 
staffing summary; 
32 
33 
(c) Budget of Expenditures and Sources of Financing (BESF) - contains. the 
34 
macroeconomic parameters; dimensions of three-year (3-year) expenditure program, 
35 
revenues, financing, and outstanding debt; overview of the financial positions of 
36 
GOCCs, LGUs, and public-private partnership projects, as well as the other items 
37 
listed in the IRR; 
38 
39 
(d) Fiscal Risk Statement - presents a consolidated statement of the fiscal risks that the 
40 
national government faces, including those from the contingent liabilities of 
41 
Government Agencies and other items listed in the IRR. 
42 
43 
Congress may not increase the appropriations recommended by the President for the 
44 
operations of government as specified in the Proposed National Budget. 
45 
46 
The President shall publish the Proposed National Budget on a Government website on 
47 
the same day as it is presented to Congress. 
48 
I P a Ii C 11 


1 
Section 24. Lump Sum Appropriations. - To promote the transparent and detailed 
2 
disclosure of all proposed government spending, lump sum appropriations and special 
3 
purpose funds (SPFs) in the Proposed National Budget shall be limited to: (i) the National 
4 
Disaster Risk Reduction and Management Fund (NDRRMF); (ii) tbe Contingent Fund (CF); 
5 
(iii) Statutory Shares of LGUs; and (iv) other SPFs not falling under any of the preceding 
6 
purposes and the details of which could not be determined during the budget preparation 
7 
stage. 
8 
9 
Section 25. National Disaster Risk Reduction and Management Fund. - The 
10 
NDRRMF shall be used for (i) disaster risk reduction or mitigation, prevention and 
11 
preparedness activities, such as, but not limited to, training of personnel, procurement of 
12 
equipment, and capital expenditures; and (ii) relief, recovery, reconstruction and other 
13 
work or services in connection with natural or human induced calamities which may occur 
14 
during tbe budget year or those that occurred in the preceding two (2) years. 
15 
16 
All releases from the NDRRMF shall be subject to tbe prior approval of tbe President, 
17 
who may take into consideration the recommendation of the National Disaster Risk 
18 
Reduction and Management Council and the appropriate agency for local and international 
19 
disasters and calamities. 
20 
21 
Section 26. Contingent Fund. 
-
The Contingent Fund shall cover the funding 
22 
requirements of new and/or urgent and unfoceseen projects and activities of NGAs and 
23 
GOCCs that need to be implemented or paid during the year, such as, legal obligation of the 
24 
government arising from final and executory decisions by competent authority, including 
25 
arbitration awards, mediation settlement, or compromise agreements, requirements of 
26 
newly created offices, or deficiencies in the appropriations for local and external travels of 
27 
the President. 
28 
29 
As a rule, all releases from the Contingent Fund shall be approved by the President. 
30 
However, disbursements due to final and executory decisions promulgated by competent 
31 
authorities shall only require the approval of the DBM. 
32 
33 
The DBM shall inform Congress of all releases from the Contingent Fund in the 
34 
quarterly and annual fiscal reports including information on the date of release, the amount 
35 
covered, corresponding purpose/s and recipient agency. 
36 
37 
Section 27. Statutory Shares of Local Government Units. - The shares ofLGUs in 
38 
the proceeds from national taxes and other transfers to LGUs authorized by law shall be 
39 
released to the LGUs in accordance with the provisions on the use, allocation, and release of 
40 
the funds as may be provided in pertinent laws, rules and regulations. 
41 
42 
Section 28. Unprogrammed Appropriations. 
Congress may authorize standby 
43 
appropriations to cover the funding requirements of other priority projects and activitie::; or 
44 
contingencies, as well as provide appropriations cover for foreign-assisted projects (FAps) 
45 
not specifically included in the programmed component of the Appropriations Law. The 
46 
Unprogrammed Appropriations shall have the same level of details as in the programmed 
47 
component of the Appropriations Law. The amount authorized under the Unprogrammed 
48 
Appropriations shall not exceed two percent (2%) of the total proposed expenditure in the 
49 
programmed component of the Appropriations Law. 
50 
I P age 12 


1 
The Unprogrammed Appropriations shall take effect only when supported by excess 
2 
collections generated in anyone of the particular tax or non-tax revenue source from its 
3 
corresponding revenue collection target in the BESF as certified by the BTr, or when there 
4 
are new loan agreements for FAPs. In no case shall the Unprogrammed Appropriations be 
5 
activated or released when there is a risk of breaching the measurable fiscal objectives for 
6 
the budget balance (induding a deficit) or debt for the financial year or future years as 
7 
provided in the Statement of Fiscal Policy and Medium-term Fiscal Strategy or if there is a 
8 
risk of breaching any of the Fiscal Responsibility Principles. 
9 
10 
Priority projects and activities or contingencies shall pertain to expenditures, the 
11 
payment of which are not covered under the Contingent Fund and could not be delayed 
12 
until the succeeding budget years without harming public interest or arising from the 
13 
government's legal obligation such, compliance with a government guarantee or settlement 
14 
of final and executory decisions by competent authorities. 
15 
16 
Releases from the Unprogrammed Appropriations shall be subject to the prior approval 
17 
of the President of the Philippines, except final and executory decisions which shall instead 
18 
require the approval of the DBM. 
19 
20 
The DBM shall inform Congress of all releases from the Unprogrammed Appropriations 
21 
in the quarterly and annual reports including information on the date of release, the 
22 
amount covered, corresponding purposejs and recipient agency. 
23 
24 
Section 29. Release and Expenditure of Public Funds. - The government sl::all 
25 
commence releases of Public Funds covered by an Appropriations Law as soon as such Law 
26 
comes into force to ensure 
timely and efficient disbursement by the appropriate 
27 
implementing agencies, subject to pertinent budgeting and auditing rules and regulations. 
28 
29 
Section 30. Early Procurement Activities. -
To ensure timely contract 
30 
implementation and efficient delivery of services, all Government Agencies are authorized 
31 
to undertake procurement activities from pre-procurement conference until post-
32 
qualification of bids even prior to the passage of the Appropriations Law, Corporate 
33 
Operating Budgets (COBs) or Appropriations Ordinance, in accordance with IRRs to be 
34 
issued by DBM. 
35 
36 
Government Agencies may proceed with the awarding of contract upon approval or 
37 
enactment of their respective appropriations or budget authorization document, as the case 
38 
may be, and based on the amount authorized therein. 
39 
40 
Section 31. Re-enacted Budget. - It: by the end of any fiscal year, Congress shall have 
41 
failed to enact the General Appropriations Bill for the ensuing fiscal year, the General 
42 
Appropriations Law for the preceding fiscal year shall be deemed re-enacted and shall 
43 
remain in force and effect until the said General Appropriations Bill is passed by the 
44 
Congress. 
45 
Consistent with the Fiscal Responsibility Principles, the Re-enacted Budget shall be 
46 
enforced as follows: 
47 
48 
(a) The aggregate level of the Re-enacted Budget shall be limited to the total amount 
49 
appropriated in the preceding year's Appropriations Law, but shall in no case exceed the 
IPage 13 


1 
level of the sources of financing under the Budget of Expenditure and Sources of 
2 
Financing (BESF) of the Proposed National Budget; 
3 
4 
(b) All completed programs, projects and activities, as well as program support for 
5 
GOCCs and equity contribution of the national government shall be excluded from the 
6 
Re-enacted Budget; 
7 
8 
(c). The appropriations for the folloV\1ng shall be limited to the amount authorized 
9 
under the Re-enacted Budget, but in no case exceed the amount proposed by the 
10 
President in the Proposed National Budget: 
11 
12 
1. Ongoing programs, projects and activities; 
13 
2. 
Personnel benefits, including retirement gratuities, pensions, terminal 
14 
leave pays 
15 
and related expenses; 
16 
3. NDRRMF, Contingent Fund, Statutory Shares of LGUs, and other SPFs; 
17 
and 
18 
4. Budgetary support to GOCCs but further limited to the amount of subsidy 
19 
for their 
20 
operational requirements. 
21 
22 
The items and/or amount of appropriations not covered under the Re-enacted Budget as 
23 
provided above shall not be released, disbursed, or utilized for the purpose previously 
24 
authorized nor be declared savings to augment existing items of appropriations in the Re-
25 
enacted Budget. 
26 
27 
The DBM shall issue guidelines on the aggregate level of appropriations authorized 
28 
under the" Re-enaeted Budget in accordance with the foregoing, the level of obligations by 
29 
agencies, supporting requirements to determine actual needs, and other pertinent rules in 
30 
the implementation of the Re-enacted Budget. 
31 
32 
Upon enactment of the General Appropriations Law, all releases under aRe-enacted 
33 
Budget consistent with this Section shall be deemed to have been implemented pursuant to, 
34 
and charged against, for account recording purposes, the general appropriations law for the 
35 
current fiscal year. 
36 
37 
Section 32. Special Appropriations Bill. -
A Special Appropriations Bill is a 
38 
legislative proposal to provide authorization for expenditures for a specific purpose not 
39 
included or not covered under the annual appropriations laws. 
It shall, specify the 
40 
purpose/s for which it is intended and be valid until the end of the fiscal year of its 
41 
enactment. 
42 
I Page 14 


1 
A Special Appropriations Bill shall be supported by funds actually available or those 
2 
which are not included in the fiscal year's sources of financing under the BESF as certified 
3 
by the National Treasurer, or to be raised by a corresponding revenue measure proposed 
4 
therein. The amount to be authorized by Congress in a Supplemental Appropriations Bill 
5 
may be more than that originally proposed for as long as the same is supported by any or a 
6 
combination of the above sources and is consistent with the Fiscal Responsibility Principles 
7 
and the MTFS. A Special Appropriations Bill may only be proposed after the passage of the 
8 
General Appropriations Law, except for disaster-related purposes, as well as urgent and 
9 
unforeseen requirements of the government. 
10 
11 
Section :J3. Multi-year Contracts. - Multi-year contracts (MYCs) shall refer to 
12 
contracts entered into by NGAs and GOCCs where the delivery of goods, civil works, and 
13 
services will cover more than one (1) year. NGAs entering into MYCs shall first seCure a 
14 
Multi-year Obligational Authority (MYOA) from the DBM but in no case shall obligate and 
15 
disburse more than the current year's appropriation for the said year's phase of project 
16 
implementation. GOCCs shall secure prior authority from their respective governing boards, 
17 
before entering into MYCs. 
18 
19 
The MYOA issued by the DBM for NGAs, and the amount authorized by the governing 
20 
board for GOCCs' governing board shall be the basis of the ABC under Section 5 of Republic 
21 
Act No. 9184 for MYCs and the certification of availability of funds required prior to 
22 
contract execution under Section 85 of Presidential Decree No. 1445. 
23 
24 
Section 34. Authority to Declare and Use Savings. - The President of the 
25 
Philippines, the Senate President, the Speaker of the House of Representatives, the Chief 
26 
Justice of the Supreme Court, the Heads of the Civil Service Commission (CSC), the 
27 
Commission on Elections (COMELEC), and the COA are hereby authorized to declare and 
28 
use savings in their respective appropriations to augment actual deficiencies incurred for 
29 
the current year in any item of their respective appropriations. 
30 
31 
The foregoing constitutional officers authorized to use savings shall be responsible for 
32 
ensuring that quarterly reports on their respective use of savings shall be submitted to the 
33 
Senate Committee on Finance and the House Committee on Appropriations, copy furnished 
34 
the DBM. The report shall indicate, among others, the amount of savings generated, the 
35 
sources and grounds used therefor, and the existing item of appropriations augmented. 
36 
They shall likewise ensure that said reports are posted on their respective official websites. 
37 
38 
The DBM shall determine the procedure, as well as the supporting documents needed in 
39 
the declaration and use of savings authorized in this Act. 
40 
41 
Section 35. Meaning of Savings. - Savings refer to portion or balances of any 
42 
programmed items of appropriation,! in the general appropriations law, which have not 
43 
been released or obligated as a result of the following: 
44 
45 
(a) Completion of a program, project or activity at a lower cost than that programmed. 
46 
For this purpose, completion shall refer to the award of contract to the contractor, 
47 
supplier or consultant. Any difference between the approved budget for the contract 
48 
and the amount of contract award may be declared as Savings; 
49 
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1 
(b) Decreased cost realized from the implementation of measures resulting in lower 
2 
input costs or efficiencies which enabled agencies to meet and deliver their targets 
3 
and/or implement or complete their projects or activities; 
4 
5 
(c) Discontinuance or abandonment of a project or activity for causes not attributable to 
6 
the fault or negligence of either the NGA mandated to undertake or authorized to 
7 
implement said project or activity or the procurement agent, at any time during the 
8 
validity of the appropriations; 
9 
10 
(d) Non-commencement of a program, project or activity for which the appropriations is 
11 
authorized. For this purpose, non-commencement shall refer to the inability of the 
12 
NGA to obligate an allotment on or before June 30 of the current fiscal year due to 
13 
causes not attributable to the fault or negligence of the agency; or 
14 
15 
(e) Unused compensation and related costs as well as pension and retirement benefits. 
16 
17 
Section 36. Rules on Augmentation. - Augmentation is the act of the constitutional 
18 
officers authorized under Section 34 of this Act to use Savings realized in their respective 
19 
appropriations in order to address a deficiency in other items of their respective 
20 
appropriations. A deficiency in an item of appropriations may result from the following, as 
21 
determined by the Head of Agency: 
22 
23 
(a) Unforeseen modifications or adjustments in the program, project or activity (PPA); 
24 
or 
25 
26 
(b) Adjustment in the cost of implementing the PPA due to justified causes. 
27 
28 
In particular, the authorized constitutional officers shall observe the following when 
29 
augmenting an item of appropriations from Savings: 
30 
31 
(a) There should be an existing item of appropriations to be augmented. For this 
32 
purpose, the particulars of the expenditures to be funded by augmentation from 
33 
Savings should be within the scope of or may be attributed to the item of 
34 
appropriations to be augmented; and 
35 
36 
(b) In no case shall a non-existent allotment class in a PPA be funded by augmentation 
37 
from Savings. 
38 
39 
Section 37. Rules on Realignment. - Realignment is the limited flexibility given to 
40 
NGAs to modify or change the specific details within a PPA that shall not entail any 
41 
augmentation of the amount appropriated for the said PPA during budget execution. 
42 
Realignment may be undertaken in any of the cases specified in the IRR. 
43 
44 
The following are authorized to approve realignments: 
45 
46 
(a) For the Executive branch, the respective Heads of Agencies, except for: 
(i) 
47 
realignment, within PS for the payment of authorized magna carta benefits; from one 
48 
allotment class to another and, from one operating unit to another, which shall be 
49 
subject to approval of the DBM, and (ii) realignment of intelligence funds which shall 
50 
require approval of the President ofthe Philippines; 


1 
2 
(b) For the Senate of the Philippines, all types of realignment shall require approval of 
3 
the Senate President; 
4 
5 
(c) For the House of Representatives, all types of realignment shall require approval of 
6 
the Speaker; 
7 
8 
(d) For the Judicial branch, the Chief Justice with regard to the Supreme Court and 
9 
lower courts, and the respective Presiding Justices of the Court of Appeals, Court of 
10 
Tax Appeals and Sandiganbayan, except for realignment of intelligence funds which 
11 
shall require approval of the Chief Justice; and 
12 
13 
(e) For the CSC, COMELEC, and COA, all types of realignment shall require approval of 
14 
their respective Chairpersons. 
15 
16 
The DBM shall promulgate the rules and regulations necessary to ensure the uniform 
17 
implementation among the various branches of government, the proper recording of 
18 
realignments, and the timely submission of reports by all the offices concerned. 
19 
20 
PART V 
21 
FINANCIAL MANAGEMENT 
22 
23 
Section 38. General Fund. - All monies received by NGAs, whether coming from 
24 
taxes, fees, charges, penalties, income, dividends, interest earnings, loan proceeds, grants, 
25 
donations, asset sale proceeds and such other receivables, shall accrue to the General Fund 
26 
and be remitted to the National Treasury, unless otherwise provided by law or stipulated by 
27 
covering loan or grant agreements. Monies under the General Fund shall be made available 
28 
to support the requirements of the NG authorized in an Appropriations Law. 
29 
30 
A Special Account in the General Fund (SAGF) shall be established by law only under 
31 
exceptional circumstances to record taxes, fees, charges penalties, income, dividend, 
32 
interest earnings, grants, and donations collected, earned or received by NGAs for speci£ed 
33 
purposes. All laws authorizing the establishment of SAGFs shall specify the period of use 
34 
thereof which shall not exceed three (3) years, or if no period is specified, shall be deemed 
35 
to be until the fulfilment of the purpose for which the SAGF was authorized or for three 
36 
years, whichever comes earlier. All interests earned by SAGFs shall accrue to the General 
37 
Fund. The balance of SAGFs upon their termination shall form part of the General Fund. 
38 
39 
All earmarked revenues with significant inflows, a large portion of which are not or not 
40 
expected to be programmed for disbursement during the year shall be treated as Trust 
41 
Funds and recorded as trust receipts. Proceeds from these Trust Funds shall be recorded 
42 
only as revenue inflow in the General Fund when programmed to be spent for the year. 
43 
44 
The Permanent Committee created under EO No. 292, s. 1989 shall recommend for 
45 
approval of the President the change in the treatment of existing SAGFs that shall be 
46 
converted into Trust Funds by virtue of the foregoing. The recording of revenue inflows 
47 
from these SAGFs shall be governed by the guidelines to be issued by the Permanent 
48 
Committee. 
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1 
2 
Section 39. Special Funds. - In exceptional cases when an SAGF is not suitable for the 
3 
operations of a fund, Special Funds shall be authorized by law and limited to the following: 
4 
5 
(a) Trust Fund - constituted from identified revenue sources and other receipts by 
6 
NGAs or public officials acting as trustees, agents, or administrators for the 
7 
fulfillment of obligations or accomplishment of specified purposes. Trust Funds shall 
8 
be deposited in the Treasury Single Account (TSA); 
9 
10 
(b) Revolving Fund - constituted from receipts derived from business-type activities of 
11 
NGAs to be used for the operating requirements of said business-type activities and 
12 
as such are considered self-liquidating. Revolving Funds shall be deposited in the 
13 
TSA or in an Authorized Government Depository Bank (AGDB) upon authority of the 
14 
National Treasurer; and 
15 
16 
(c) Retained Fund - constituted from taxes, fees, charges, penalties, income, dividends, 
17 
or "interest earnings collected, earned or received by NGAs which are expressly 
18 
authorized by law to be retained by NGAs and utilized for specified purposes. 
19 
Retained Funds shall be deposited in the TSA or in an AGDB upon authority of the 
20 
National Treasurer. 
21 
22 
Notwithstanding the provisions of laws to the contrary, Special Funds may only be 
23 
established after evaluation by the Permanent Committee, , as to their proper category and 
24 
compliance with the foregoing conditions. Any interest earned by Special Funds shall accrue 
25 
to said Funds. 
26 
27 
Section 40. Review by the Permanent Committee. - The Permanent Committee 
28 
shall review all existing SAGFs and Special Funds to validate their compliance with the 
29 
foregoing requirements. Upon evaluation, the Permanent Committee shall recommend for 
30 
approval of the President the modification and/or termination of said funds as may be 
31 
necessary. 
32 
33 
It shalllikevvise review all SAGFs created upon the passage of this Act and may recommend 
34 
to extend their validity period, but in no case Fhall the extension exceed three (3) years at 
35 
anyone time, subject to approval of the President. 
36 
37 
The Permanent Committee shall jointly issue guidelines for the establishment, review and 
38 
evaluation, accounting and reporting, and termination of SAGFs and Special Funds. 
39 
40 
Section 41. Escrow Fund. - Escrow Funds are constituted from funds for which the 
41 
government's legal right to use is contingent upon a future event which mayor may not 
42 
occur. Escrow Funds shall be deposited in the TSA or an AGDB upon authority of the 
43 
National Treasurer, and shall subsequently be part of the General Fund upon the 
44 
occurrence of the future contingent event. Any interest earned by an Escrow Fund sball 
45 
accrue to the said Fund. The amounts under escrow, including interest earned shall form 
46 
part of thc General Fund upon the occurrence of the future contingent event. 
47 
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Section 42. Waiver, Abatement, Refund and Compromise Agreements. - No 
2 
public official shall waive, abate, refund, or enter into a compromise agreement on a tax 
3 
liability or the payment of fees or charges except in accordance with law. All waivers, 
4 
abatements, refunds or compromise agreements made by an NGA shall be properly 
5 
accounted for and reported. Refund of taxes and other revenues shall be treated as a 
6 
reduction in revenue collections. 
7 
8 
Section 43. Grants. - NGAs may accept, with prior coordination with DOF, grants, in 
9 
cash or iri kind, from domestic or foreign sources, for purposes relevant to their functions. 
10 
In the case of grants, in cash or in kind, from governments of foreign countries, their 
11 
agencies and instrumentalities and international or multilateral institutions 
OJ' 
12 
organizations, acceptance thereof shail be subject to the prior clearance and approval by the 
13 
President or his authorized representative based on the recommendation of the Secretary of 
14 
Finance. 
15 
16 
The provisions of this Section shall not apply to 1) any grant received by LGUs or GOCCs, 
17 
except where the grant is received by them on behalf of the NG , or 2) any grant authorized 
18 
or covered in accordance vvith existing law. 
19 
20 
Section 44. Treasury Single Account. - The TSA refers to the banking arrangement 
21 
managed by the BTr wherein the government transacts all monies collected, received or 
22 
paid by NGAs in one bank account or a set of linked bank accounts and gets a consolidated 
23 
view of its cash position on at least, a daily basis. 
24 
25 
The TSA shall cover remittances, releases or disbursements from the General Fund, 
26 
SAGFs, Special Funds, and any other fund t'lanaged by the BTr, except in any of the 
27 
following instances: 
28 
29 
(a) When monies under the General Fund are placed under investments; 
30 
31 
(b) When the BTr is required to hold foreign currency accounts; or 
32 
33 
( c) When authorized by the Secretary of Finance. 
34 
35 
The BTl', in coordination with NGAs authorized by law to undertake revenue collection 
36 
and administration; shall make the necessary arrangements with authorized agent banks 
37 
(AABs) to facilitate the collection and transfer of said revenues to the TSA. AABs shall 
38 
deposit said collections to TSA within the period and in the manner prescribed by laws, 
39 
rules and regulations. 
40 
41 
Section 45.0versight on Government Bank Accounts. -
Notwithstanding any 
42 
provision of law to the contrary, the BTl' shall undertake any of the following in case of 
43 
violation of a provision in this Act and guidelines issued on the implementation of the TSA: 
44 
45 
(a) Transfer balances of NGA bank accounts to the TSA; 
46 
47 
(b) Close any NGA bank account; and/or 
48 
49 
(c) Revoke the authority to open any NGA bank account. 
50 
IPage 19 


1 
The NGA or GOCC which has opened a bank account, as well as the bank concerned, shall 
2 
promptly disclose information regarding such account to the BTr. 
3 
4 
Section 46. Treasury Cash Management. -
The BTr shall issue orders for the 
5 
conduct of cash management including the requirement to provide projections on the 
6 
timing of future transactions of NGAs. If there is a projected cash shortfall, the Btr may 
7 
request the DBM to temporarily suspend or withdraw a portion or the full allotment issued. 
8 
9 
10 
Section 47. Investments. -
The BTr may invest portions of the funds held in the TSA 
11 
for such periods as the BTr may deem prudent considering cash management requirements 
12 
and based on terms and conditions as may be set by the IRR of this Act. Investments are 
13 
authorized to be made in any of the following: 
14 
15 
(a) deposit with any highly reputable bank following a selection criteria to be issued by 
16 
the Secretary of Finance in consultation with the Bang ko Sentral ng Pilipinas; 
17 
18 
(b) sovereign-issued securities with an investment grade rating; or 
19 
20 
(c) otlier fixed income securities with an AAA credit rating issued by at least two (2) 
21 
reputable international credit rating agencies acceptable to the Secretary of Finance. 
22 
23 
The BTr may appoint a fund manager as an agent of the NG to undertake the investment 
24 
of the funds. 
25 
26 
Interest earned and other income from investments shall accrue to the General Fund, 
27 
unless otherwise provided by law. 
28 
29 
Section 48. Management of National Government Borrowings. -
30 
Borrowings by the NG shall be for any of the following purposes: 
31 
1. Financing budget deficits and liquidity shortfalls; 
32 
2. Refinancing and pre-financing maturing debts; 
33 
3. Obtaining foreign currency on behalf ofthe Bangko Sentral ng Pilipinas; 
34 
. 4. On-lending to an approved entity; 
35 
5. Financing all sums of money paid to fulfill guarantees; 
36 
6. Regulating internal monetary conditiuns should the necessity arise; 
37 
7. Providing financing to remedy the effects of natural calamities; or 
38 
8. 'Defraying expenditures covered by appropriations. 
39 
40 
Borrowing under this Act should adhere to the Fiscal Responsibility Principles and 
41 
measurable fiscal objectives in the Statement of Fiscal Policy. 
42 
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Section 49. Borl·owings by Government -Owned or -Controlled Corporations. 
2 
-
Before the end of each fiscal year, the Head of a GOCC shall prepare a borrowing 
3 
program for the following fiscal year which shall support the Corporate Operating Budget 
4 
and for the medium term, both of which shall include a full financial plan with the details of 
5 
the loans, refinancing and repayment that the GOCC intends to take. Said borrowing 
6 
program, including changes thereon, shall be subject to the approval of the Head of the 
7 
NGA overseeing the GOCC, and shall be submitted to DOF for information, and shall be 
8 
published in the concerned GOCC website. 
9 
10 
GOCCs shall seek approval of DOF for their borrowing activities as defined in the IRR. 
11 
12 
Nothing in this Section shall be construed as creating a government guarantee on any 
13 
borrowing, loans or refinancing and repayment that the GOCC intends to take. 
14 
15 
Section 50. Local Government Borrowings. -
An LGU may borrow funds from 
16 
domestic and foreign sources in accordance with the Local Government Code of 1991 or any 
17 
other applicable law. The financial plan including borrowing program shall be pnblished in 
18 
the appropriate government website within seven (7) days after the borrowing program has 
19 
been approved. 
20 
21 
Section 51. Debt Reporting. - The DOF through the BTr shall ensure that the records 
22 
include information on the principal, terms of repayment, amounts drawn, interests and 
23 
service charges accrued, principal and interests paid, and the balance outstanding, and shall 
24 
make the records available in a timely way to the President and Congress when requested 
25 
and in accordance with the reporting requirements in this Act. 
26 
27 
Each LGU and GOCC shall maintain records and provide reports to the DOF on loans as 
28 
required by relevant laws, rules and regulations. 
29 
30 
Section 52. Guarantees. - Guarantee, indemnity or security shall be provided to an 
31 
NGA or a.GOCC as provided by law, and subject to the annual guarantee ceiling prescribed 
32 
in the General Appropriations Law, and upon such terms and conditions as the Secretary of 
33 
Finance may recommend consistent with relevant laws, rules and regulations. The overall 
34 
level of guarantee, indemnity or security shall adhere to the Fiscal Responsibility Principles 
35 
laid down in this Act and the fiscal objectives in the Statement of Fiscal Policy. 
36 
37 
The DOF shall charge a risk-based fee for any guarantee, indemnity, security, relending or 
38 
similar financial accommodation it may extend to a GOCC. 
39 
40 
Section 53. Limitation on the Liability of the National Government For Debts 
41 
of Other Entities. - The NG shall not be liable for any implied guarantees asserted by any 
42 
person, but only for explicit guarantees extended in accordance with existing laws, and 
43 
guarantees in favor of the Government Service Insurance System (GSIS), Home 
44 
Development Mutual Fund (HDMF), philippine Health Insurance Corporation, and the 
45 
Social Security System (SSS) in their respective charters. 
46 
I P age 21 


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Section 54. Payntents Made for COJltingent Liabilities. - Any money paid by the 
DOF pursuant to any guarantee, indemnity, or security authorized by law and the expenses 
associated with the same shall constitute a debt due the NG from the entity for whose 
benefit the payment on the guarantee, indemnity, or security was made. 
Section 55. Information on Contingent Liabilities. -
The DOF shall keep a 
complete and updated registry of an eontingent liabilities of the NG, and provide the OCG 
v\lith a report on contingent liabilities as of the fiscal year. 
PART VI 
ACCOUNTABILITY AND REPORTING 
Section 56. Financial Management and Internal Control. -
The Head of Agency 
shall be responsible and accountable for the financial management of the agency which 
shall include meeting performance targets, controlling costs, mitigating adverse risks to 
agency operations, and ensuring that budgets are managed with integrity and in compliance 
with applicable laws. Adequate internal controls shall be ensured and an internal audit 
function shall be maintained. 
The OCG shall oversee the operation of an integrated internal control framework across 
Government Agencies. 
Section 57. NGA Annual Plans and Proposed Budgets. - The Head of each NGA 
shall produce an Annual Plan which shall have a medium term scope, with details for the 
following fiscal year, and shall include information on the strategic priorities for the 
medium-term, consistent with the Philippine Development Plan; performance information; 
summary proposed budget including financial forecasts assumptions and highlighting 
significant capital projects; and other information as required in the IRR, as well as the 
Budget Call and other related orders from the DBM. The Annual Plan shall be submitted to 
DBM during the budget preparation process consistent with the timetable and other 
guidelines in the Budget Call. 
The Head of the NGA shall ensure that the Annual Plan is updated to be consistent with a) 
the Proposed National Budget, no later than thirty (30) days after the President has 
submitted the same to Congress, and; b) the General Appropriations Act, no later than 
thirty (30) days after its enactment. Both revisions of the Annual Plan shall be submitted to 
Congress and published on a government website within the aforementioned timeframes. 
The Annual Plan of a Department shall incorporate the Annual Plans of its attached NGAs 
and GOCCs subject to guidelines prescribed in tne IRR. 
Section .58. NGA Reporting Requirements. 
accountability, each Head of an NGA shall: 
For greater transparency and 
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(a) Submit monthly and quarterly reports on the agency's financial and non-financial 
performance to the DBM and OCG, not later than thirty (30) days after the end of 
every month and quarter in the format specified by the DBM and shall publish the 
same on a government website within the same reglementary period; 
(b) Prepare an Annual Report which shall include year-end financial statements, 
reporting on non-financial performance compared against the Annual Plan, and 
other information as required in the IRR; submit the said Report to the DBM, OCG, 
and Congress no later than six (6) months after the end of the fiscal year; and publish 
the said Report in a government website no later than seven (7) days after its 
submission to Congress. 
The monthly, quarterly, and annual reports of a Department shall incorporate the reports of 
its attached NGAs and GOCCs subject to guidelines prescribed in the IRR. 
Section 59. Service Agreements. - The Head of an NGA may enter into a service 
and/or performance agreement with another agency for the latter to provide services 
charged against the budget of said principal agency. 
Section 60. Corporate Operating Budget (COB). -
The Board of Directors or 
Trustees of a GOCC shall prepare and submit a COB to the Head of the NGA overseeing said 
GOCC, the DBM, and the DOF, not later than ninety (90) days prior to the commencement 
of the fiscal year, which shall include, the objectives of the GOCCs and its subsidiaries, the 
activities to be undertaken, performance targets and risks; forecasts of financial statements 
for the next three (3) years; and other information as may be required in the IRR. 
The Head of the NGA overseeing said GOCC shall endorse the Board-approved COB to 
the DBM, for the latter's approval. The Head of a GOCC shall publish the DBM-approved 
COB of the GOCC on the official website of the Corporation not later than fourteen (14) days 
after the approval of the COB. 
Section 61. GOCC Reporting Requirements. 
accountability, each Head of GOCCs shall: 
For greater transparency and 
(a) Provide quarterly reports on financial and non-financial performance to the DOF, 
Governance Commission for GOCCs (GCG) and the DBM, no later than thirty (30) 
days after the end of the quartt;)r, in the format and time specified by the DOF, GCG 
and DBM and shall publish it on their official website within the same period; and 
(b) Prepare an Annual Report, which shall include year-end financial statements, 
reporting on non-financial performance compared against the COB, and other 
information as required in the IRR; submit the same to the overseeing NGA, DBM, 
GCG, DO F and Congress no later than six (6) months after the end of the fiscal year; 
and publish the said Report in a government website no later than seven (7) days 
after its submission to Congress. 
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GOCCs with subsidiaries shall reflect in its quarterly and annual reports the 
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aforementioned required information for the whole corporate group, consistent with 
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guidelines prescribed in the IRR. 
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Section 62. Service Agreementfor a GOCC. - Where GOCCs implement government 
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non-commercial programs, such as housing provision, irrigation and electrification, and 
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receive government funding, a service agreement with the NGA overseeing said GOCC shall 
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specify the terms of delivery of goods or services that the GOCC must provide, and the funds 
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that the government will pay. Program funds shall be under the budget of the NGA 
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overseeing said GOCC. 
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Section 63. Local Government Units. - The Local Chief Executives (LCEs) shall 
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ensure that adequate internal controls and an internal audit function are maintained. 
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The LCEs shall provide financial and non-financial performance information of their 
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respective LGUs to the OCG, DILG, and the BLGF under the DOF, subject to the guidelines 
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to be issued thereon. 
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Section 64. Application of Accounting and Auditing Requirements. -
Any 
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expenditure of public money, including government assets or liabilities incurred by and for 
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the Government regardless of the source of funding, shall be subject to accounting and 
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auditing rules and regulations promulgated by the COA. 
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Section 65. 
Accounting Standards. -
The Comptroller General shall develop 
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guidelines to oversee the implementation of the accounting standards mandated by the 
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COA, for use by all Government Agencies. 
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The Heads of Agencies shall ensure full, accurate and proper records are kept for their 
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respective agencies on financial matters and for performance in the production of goods 
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and services. 
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The DBM, OCG and COA shall ensure that complete, accurate and appropriate records 
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ofthe government are kept on both financial and non-financial performances. 
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Section 66. Government Consolidated Reporting -- The OCG shall submit a 
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quarterly report on the consolidated financial performance of the government to the 
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President, which includes information showing performance against the Appropriations 
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Law, not later than sixty (60) days after the end of each quarter. This report shall be 
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published in a government website within seven (7) days after the report is submitted to the 
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President. 
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The OCG shall prepare the consolidated annual financial statements, not later than six 
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(6) months after the end of the fiscal year, for submission to the President, Congress and 
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COA. 
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PART VII 
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TRANSPARENCY AND PARTICIPATION 
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Section 67. People's Access to Public Financial Information. - Before the start of 
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each fiscal year, the DBM shall promulgate a Calendar of Disclosures, and shall publish this 
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on the government website and such. calendar shall contain the schedule of release of all 
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budget documents and information required by this Act and its IRR. The DBM shall 
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monitor and periodically report to Congress and the public on the compliance of agencies 
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with the Calendar of Disclosures and other fiscal transparency requirements under this Act 
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and its IRR. 
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All documents and reports required to be published by this Act and its IRR shall 
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automatically be made available electronically in a government website. Current and 
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historical data on government revenues, expenditures, and borrowings, shall be made 
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available electronically, in open data format, on a government website, subject to guidelines 
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in the IRR. 
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Section 68. The People's Budget. -The DBM shall, for every fiscal year, publish 
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citizen-friendly summaries of the following, subject to guidelines and other specifications 
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in the IRR: 
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(a) the Statement of Fiscal Policy in the year of the President's election and any updates 
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thereafter within thirty (30) days from submission to Congress; 
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(b) the Proposed National Budget, to be published in electronic format within thirty (30) 
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days from submission to Congress of the Proposed National Budget; 
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(c) the General Appropriations Law, to be published in electronic format in a 
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government website within thirty (30) days from its effectivity; and 
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(d) the Annual Fiscal Report, to be published in electronic format in a government 
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website within thirty (30) days from submission to Congress. 
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Section 69. People's Participation in the Budget Process. - government shall 
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establish and implement suitable participatory budget mechanisms to facilitate the open, 
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inclusive, and meaningful engagement of citizens throughout the budget process-from 
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budget preparation, to legislation, to execution, and to accountability and audit. Such 
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participatory mechanisms may include consultations and partnerships with civil society 
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organizations (CSOs), non-government organizations (NGOs), people's organizations (POs), 
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academics; and experts, and other individual and organized stakeholders throughout the 
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annual budget process. 
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To aid the empowerment of grassroots organizations and communities in the national 
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budget process, the DBM, DILG, and other relevant agencies shall facilitate a process 
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wherein CSOs, NGOs, POs, community organizations and LGUs can jointly identify local 
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priority poverty reduction and development needs which will serve as input to the 
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formulation of the Proposed National Budget. Such process shall consider the pursuit of 
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meaningful local devolution and local accountability, as well as the strengthening of 
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regional and local development councils' roles in the national budget process. 
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Policies and regulations for the establishment of participatory budgeting mechanisms 
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established by laws shall be formulated and enforced by: 
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1. The DBM, together with other relevant agencies of the executive, when it comes to 
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participation in budget preparation, execution, and accountability; 
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lJ. The House of Representatives and the Senate, through their relevant committees, 
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when it comes to participation in budget legislation; and 
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Ill. The COA, when it comes to participation in the conduct of audit. 
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PART VIII 
13 
ENFORCEMENT 
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Section 70. Sanctions and Penalties. - Without prejudice to the provisions of other 
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laws, the following sanctions and liabilities in case of failure to comply with the reporting 
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and posting requirements under this Act, shall be imposed: 
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(a) The DBM shall not approve any request for release of allotments for items of 
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appropriations covered in the negative list or realignment nor recommend the use of 
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savings by the President until such time as the non-compliant agency has submitted 
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the report/s required under this Act; 
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(b) The COA may disallow any expenditure charged against augmentation using savings, 
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and any expenditure due to realignment, which were made within the period 
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succeeding the reporting period when the agency failed to comply with the reporting 
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requirements under this Act; 
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(c) Fa~lure to report on the income and/or funds retained at the end of a reporting 
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period shall render all disbursements against such income or funds in subsequent 
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reporting periods as void, and will render the responsible official liable under 
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existing laws; and 
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Cd) The Congress may motu proprio or upon the request of COA and/or DBM through 
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its appropriate oversight committee compel the head of the non-compliant agency, 
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under pain of contempt, to produce the required report/s and to explain reasons for 
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failure to submit and disclose said report/so 
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Without prejudice to the provisions of other laws: 
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I. Every obligation, expenditure or payment authorized or incurred in violation of the 
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provisions of this Act shall be void alld shall render the public official and/or 
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employee authorizing or making such payment and every person in collusion with 
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said official or employee shall jointly and severally be held liable to the government 
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for the full amount so paid or received. The public official or employee who 
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knowingly incur any obligation or authorizes any expenditure in violation of tl1e 
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provisions of this Act or takes·part therein shall likewise be removed or dismissed 
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from office, after due notice and hearing, even if no criminal charge is instituted 
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against him; . 
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ll. Any public official or employee, holding office or employment in a casual, temporary, 
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holdover, permanent or regular capacity, who shall cause the inclusion of fraudulent 
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information in any accountability report, shall be penalized with imprisonment not 
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exceeding five (5) years, or a fine not exceeding One Million Pesos (Pl,OOO,ooo.oo), 
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or both, without prejudice to disallowances that may be made by COA against 
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expenditures related to such fraudulent information, provided, that this fine is 
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reviewed and adjusted periodically to be reasonable; 
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iii. A conviction under this Act shall carry with it civil liability, which may either consist 
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of restitution for the damage done or forfeiture in favor of the ·government of any 
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unwarranted benefit derived from the act or acts in question, or both, at the 
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discretion ofthe courts, in addition to possible administrative liability; and 
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IV. Private individuals who shall conspire with the erring public officials or employees, 
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whether as co-principals, accomplices or accessories, in the commission of any 
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violation of this Act shall be subject to the same penalties as the public officials or 
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employees and shall be tried jointly with them. 
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Section 71. Jurisdiction. - Actions under this Act shall be cognizable by the courts, 
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tribunals, bodies, agencies or authorities with appropriate jurisdiction under existing laws. 
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PART IX 
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FINAL PROVISIONS 
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Section 72. Implementing Rules and Regulations. - The DBM in consultation with 
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the DOF, BTr, NEDA and COA, in coordination with agencies concerned shall issue tl1e 
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guidelines necessary for the proper implementation of this Act. 
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Section 73. Transitory Provisions. - The DBM, DOF, BTr, NEDA and COA shall 
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produce and submit within thirty (30) days from promulgation of the IRR, a Transitory 
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Plan for information, to the Joint Congressional Oversight Committee on Public 
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ExpenditUres to ensure the proper implementation of the provisions of this Act, presenting 
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the Sections that will not be implemented on the passing of this Act and those requiring 
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compliance with certain conditions or the happening of events before the provisions herein 
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may be implemented. 
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Section 74. Repeal. - Any law, presidential decree or issuance, executive order, letter of 
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instruction, administrative order, proclamation, charter, rule or regulation and/or parts 
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thereof contrary to or inconsistent with the provisions of this Act is hereby repealed, 
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modified or amended accordingly. (Note: specific laws to be repealed will need to be 
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identified for clarity.) 
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Section 75. Separability Clause. - If any provision of this Act is declared invalid or 
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unconstitutional, the other provisions not affected thereby shall remain valid and 
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subsisting. 
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Section 76. Effectivity Clause. - This Act shall take effect fifteen (15) days following its 
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publication in the Official Gazette or in two (2) newspapers of general circulation. 
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Approved, 
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