SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
Senate Bill No. 
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INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
EXPLANATORY NOTE 
Impoundment refers to the refusal of the President, for whatever reason, to 
release funds appropriated by Congress. It is the failure to spend or obligate budget 
authority of any type. 
While its constitutional conferment is not expressed, the Administrative Code 
has given the President specific authority, when in his judgment the public interest 
requires and upon due notice to the head of office concerned, to suspend or 
otherwise stop further expenditure of funds allotted for any agency. 
Of recent times however, this presidential prerogative has been misused and 
abused, and has emasculated Congress' authority to check the President's 
discretionary power to spend public funds. In effect, the President seems to have a 
vast and unbridled control over the national budget. 
This bill seeks to increase congressional oversight and to limit executive 
influence over specific appropriations in the General Appropriations Act. This 
undertaking is urgently needed in the light of the current economic crisis confronting 
the whole world, the consequences of which are deemed to severely affect our 
country in the coming years. 
For these reasons, the approval of this bill is being earnestly requested. 
Senator 
( 


SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
Senate Bill No. 779 
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JUL 15 P6 :28 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
THE BUDGET IMPOUNDMENT CONTROL ACT 
Be it enacted by the Senate and the House of Representatives of the Philippines 
in Congress assembled: 
SECTION 1. Title. -This is Act shall be known as "The Budget 
Impoundment Control Act". 
SEC. 2. Declaration of Policy. -It is the policy of the State to formulate 
and implement a National Budget that is truly an instrument of national 
development. Towards this end, all appropriations, except those which shall be 
deferred, rescinded, reserved, or otherwise withheld in the General Appropriations 
Act, shall be released within the first semester of the ye~r through the issuance of 
advices of allotment in accordance with approved work and financial plans, and 
shall be utilized according to the purposes provided in the General Appropriations 
Act. Any deferral, rescission or reservation of appropriations in the General 
Appropriations Act shall be in accordance with this Act. 
SEC. 3. Definition of Terms. -For purposes of this Act: 
(a) Rescission - means cancellation of all or part of an enacted appropriation, 
which has not yet been spent or obligated. 
(b) Reservation - means imposition of reserves on appropriated amounts for 
government expenditures. 
(c) Deferral of releases - means withholding or delaying the release of 
appropriated amounts provided for projects or activities. 
(d) Impoundment resolution - means a joint resolution of both Houses of 
Congress expressing its approval of a rescission, reservation or deferral of 
an appropriation or several appropriation items as proposed by the 
President. 
(e) Advice of allotment - the formal document issued by the Department of 
Budget and Management, which contains authorizations, conditions, and 
amount of obligations that an agency can incur pursuant to a legislative 
appropriation. 
(f) Work-and-financial plan - the monthly breakdown of financial requirements 
and physical performance targets of an agency. 
(g) Appropriations - unless otherwise described or specified herein, the term 
appropriations refers to the appropriations included in the annual General 
Appropriations Act. 


SEC. 4. Rescission and Reservation of a Budget Appropriation. -
Whenever the President, upon the recommendation of the Secretary of the 
Department of Budget and Management, determines that all or part of any budget 
appropriation will not be required to carry out the full objectives or scope of 
programs for which it is provided, or that such budget appropriation should be 
rescinded for fiscal policy or other reasons, including the termination of authorized 
projects or activities, or whenever all or part of any budget appropriation for the 
current fiscal year is to be reserved from obligation for such fiscal year, the 
President shall transmit to both Houses of Congress a special message 
specifying: 
1. The amount of budget appropriation which he proposes to be rescinded 
or which is to be so reserved; 
2. Any account, department, agency or instrumentality of the government 
to which such budget appropriation is available for obligation, and the 
specific projects or governmental functions involved; 
3. The reasons why the budget appropriations should be rescinded or is to 
be so reserved; 
4. The estimated fiscal, economic and budgetary effect of the proposed 
rescission or reservation; and 
5. All facts, circumstances and considerations relating to or bearing upon 
the proposed rescission or reservation, and the estimated effect of the 
proposed rescission or reservation upon the purposes, programs, 
activities and projects for which such appropriation is provided. 
SEC. 5. Approval of Rescission or Reservation. -Both Houses of 
Congress shall act on the proposed rescission or reservation within sixty (60) 
calendar days after the receipt of such proposal from the President by issuing a 
joint impoundment resolution: Provided, That if the President's special message is 
received within the period of less than sixty (60) calendar days before the end of a 
regular session, the President's message shall be deemed to have been 
submitted on the first day of the succeeding regular session of Congress and the 
sixty (60) day period referred to in this Section shall commence on the day after 
such first day. If Congress does not issue an impoundment resolution within the 
specified period, the President shall not proceed with the rescission or reservation 
procedures. Provided, however, that in the event of a Congressional approval to 
rescind, the funds corresponding to the rescinded appropriations shall revert to 
the unappropriated surplus of the general fund and shall not be made available 
for expenditure for any purpose except as provided for by a subsequent legislative 
enactment. 
SEC. 6. Use of Reserves. -When changes in conditions during the year 
justify the use of the reserved appropriations which have .been imposed under this 
Act or under the General Appropriations Act, the amount involved shall be 
allocated back for the use by, and upon the request of the Department, office or 
agency on whose appropriation the reserve was originally imposed. 
SEC. 7. Deferral of Releases. -
a) Whenever the President, the Secretary of Budget and Management, 
the head of any department, agency or instrumentality of the 
Govemment proposes to defer the release of any appropriation for a 
specific purpose, program, activity, or project, the President shall 


transmit to the House of Representatives and the Senate a special 
message specifying: 
1.) 
The amount of the appropriation proposed to be deferred; 
2.) 
Any account, department, agency or instrumentality of the 
Government to which such appropriation is available for 
obligation, and the specific prOjects or governmental 
functions involved; 
3.) 
The period of time during which the appropriation is proposed 
to be deferred; 
4.) 
The reasons for the proposed deferral, including any legal 
authority invoked by him to justify the proposed deferral; 
5.) 
The estimated fiscal, economic and budgetary effect of the 
proposed deferral; 
6.) 
All facts, circumstances and considerations relating to or 
bearing upon the proposed deferral and the decision to effect 
the proposed deferral, including an analysis of such facts, 
circumstances and considerations in terms of their application 
to any legal authority and specific elements of legal authority 
invoked by him to justify such proposed deferral, and the 
estimated effect of the proposed deferral upon the objects, 
purposes, program, activities and projects for which such 
appropriation is provided. 
b) A deferral may not be proposed for any period of time extending 
beyond the end of the fiscal year in which the special message 
proposing the 
deferral 
was transmitted 
to 
the 
House 
of 
Representatives and the Senate. 
SEC. 8. Approval of Release Deferral. -Both Houses of Congress shall 
act on the proposed deferral within sixty (60) calendar days after the receipt of the 
proposal from the President: Provided That if the President's special message is 
received within a period of less than sixty (60) calendar days before the end of a 
regular session, the President's message shall be deemed to have been 
submitted on the first day of the succeeding regular session of Congress and the 
sixty (60) day period referred to in this Section shall commence on the day after 
such first day. If Congress does not issue an impoundment resolution within the 
specified period, the President shall not proceed with the deferral procedures. 
SEC. 9. Submission of Quarterly Reports. -Within thirty (30) days after 
the end of each quarter, the Secretary of the Department of Budget and 
Management shall submit to the Committee on Appropriations of the House of 
Representatives and the Committee on Finance of the Senate, a list of releases 
made out of reserved and deferred appropriations, and comparative statements 
showing the annual general appropriations, the annual program of continuing and 
automatic appropriations, and the corresponding releases of allotments and cash 
allocations for each department, agency, corporation and fund: Provided, That the 
releases from each lump-sum or special-purpose fund shall be supported with 
schedules indicating the specific departments/agencies, corporations or entities 
which received the fund releases and the purposes of such releases. The 
quarterly reports shall also include a cumUlative summary of all appropriations 
rescinded, deferred or reserved. 


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SEC. 10. Mode of Transmittal of the Special Message of the President 
- The President shall transmit to Congress at any time during the budget year but 
not later than the fifteenth day of October of the budget year the special message 
which may include one or more proposals for impoundment, reservation, or 
deferral on one or more appropriation items through the Committee on Finance of 
the 
Senate and 
the Committee on 
Appropriations of the 
House of 
Representatives. 
SEC. 11. Penal Provision. -Any violation of the Sections 2,4,5,6,7,8, and 9 
of this Act shall be punished by of fine not exceeding Five Hundred Thousand 
Pesos (P500,OOO.OO) and the penalty of perpetual special disqualification. 
SEC. 12. Repealing Clause. -All laws, decrees, executive orders, letters of 
instructions, letters of implementation, rules and regulations or parts thereof 
inconsistent with the provisions of this Act are hereby repealed, modified, 
superseded or amended accordingly. 
SEC. 13. Effectivity Clause. -This Act shall take effect fifteen (15) days 
after its complete publication in the Official Gazette or in at least two (2) national 
newspapers of general circulation, whichever comes earlier. 
Approved,