Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

Introduced by HONORABLE JUAN EDGARDO “SONNY” M. ANGARA

EXPLANATORY NOTE

The National interest calls for the institutionalization of budgetary innovations. It is a
declared policy of the State that the budgets of all components of the government shall be
teflective of national objectives, strategies and plans. It must likewise be supportive of and
consistent with the socio-economic development plans of the country.

In pursuit thereof, the budgets of government owned and controlled corporations
(GOCCs) shall be supportive and consistent with the budgets of all departments, bureaus,
offices and agencies of the national government, brought also by the fact that all government

corporations require national budget support either in the form of direct outlays, subsidies or
guarantees

Under current practice, however, the budgets of GOCCs, including those of their
subsidiaries and affiliated companies, are not submitted to Congress as a matter of course.

Taking to mind the volume and capacity of public resources and activities undertaken by
the government corporations, it is urgent, nay, imperative that a formal mechanism be
institutionalized in the review and analysis of the budgets of these GOCCs to ensued that the
same are consistent with the national development plan and also to assure transparency in the
operations of said corporations.

With this end in view, Section 13 of Presidential Decree No. 1177, otherwise know as
the "Budget Reform Decree of 1977” is amended to the effect that in addition to the annual
budget of the national government which the President is required to submit Congress (the
basis for the enactment of a General Appropriations Act), it shall also include in its budget
submission the proposed corporate operating budgets of government-owned and controlled
corporations, their subsidiaries and affiliated companies, which require national government
budgetary support

Further, the bill also requires these GOCCs to submit to Congress separate and yearly
financial performance reports vis-a-vis their approved budgets, as well as status reports on
obligations they have entered into which are backed by government guarantees.

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JUAN EDGARDO “SONNY” M. ANGARA
RepreSentative
Lone District, Province of Aurora


FIFTEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

H.B.No. 060)

Introduced by Honorable JUAN EDGARDO “SONNY” M. ANGARA

AN ACT
REQUIRING THE SUBMISSION TO CONGRESS OF THE CORPORATE BUDGET
OF ALL GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS, THEIR
SUBSIDIARIES AND AFFILIATES, AMENDING FOR THE PURPOSE, SECTION 13
OF PD 1177, OTHERWISE KNOWN AS THE “BUDGETARY REFORM ACT OF
1977”

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

SECTION 1. Section 13 of Presidential Decree No. 1177, otherwise known as the
“Budget Reform Decree of 1977" is hereby amended to read as follows:

“SEC. 13. Submission of the Budget. - The President shall, in accordance with section
[sixteen] TWENTY-FIVE (1), Article [Vil] VI of the Constitution, submit within thirty days from the
opening of each regular session of [the National Assembly] CONGRESS as the basis for the
preparation of the general Appropriations Act, a national government budget of estimated
receipts based on existing and proposed revenue measures, and of estimated expenditures.

‘The President shall include in his/HER budget submission the proposed expenditure
level of the Legislative and Judicial Branches and of Constitutional bodies, which shall have
undergone the same process of evaluation and which shall have been subject to the same
budgetary policies and standards applicable to agencies in the Executive Branch

THE PRESIDENT SHALL ALSO SUBMIT TO CONGRESS THE PROPOSED
CORPORATE OPERATING BUDGETS OF ALL GOVERNMENT-OWNED OR CONTROLLED
CORPORATIONS, INCLUDING THEIR SUBSIDIARIES AND AFFILIATES, WHICH
REQUIRENATIONAL BUDGETARY SUPPORT IN ACCORDANCE WITH SUCH FORMAT,
RULES AND REGULATIONS PRESCRIBED BY THE DEPARTMENT OF BUDGET AND
MANAGEMENT (DBM).

The President may transmit to [the National Assembly] CONGRESS, from time to time,
such proposed supplemental or deficiency appropriations, as are, in his judgment, (a) necessary
on account of laws enacted after the transmission of the budget, or (b) otherwise needed in the
public interest.


SEC. 2. Section 22 of the same Decree is likewise amended to read as follows:

"SEC. 22. Budgetary Requirement of Government-Owned or Controlled
Corporations. The Intemal operating budgets of government-owned and controlled
corporations and of chartered institutions shall be approved by their respective
governing boards in accordance with a budget calendar and format as may be approved
by the President: Provided, That such budget SHALL BE SUBMITTED TO
CONGRESS AND shall be subject to review and approval as part of the budget process
in cases where national government budgetary support is needed, in terms of (a) capital
or equity inputs, (b) operating contributions to support specific activities undertaken by
the institution as part of its regular functions, and (c) guarantee of the national
government for obligations or contracts entered into by the corporations; Provided,
Further, That the submission of interim financial statements may be required by the
[Commissioner] SECRETARY OF THE DEPARTMENT OF BUDGET AND
MANAGEMENT.”

SEC. 3. All government-owned or controlled corporations, including their subsidiaries
and affiliates, shall also submit to Congress separate annual reports of financial performance as
compared with their approved budgets explaining performance in terms of work and financial
results, Reports pertaining to a given fiscal year shall be submitted on or before June 30 of the
following year, through the Department of budget and Management (DBM), together with
comparative data for the preceding year and the approved budget for the current year.

SEC. 4. In addition to the reports required to be submitted under the preceding section,
all government-owned or controlled corporations, their subsidiaries and affiliates, shall
periodically report of congress, through the Department of Finance (DOF) and the Department
of Budget and Management (DBM), on the status of obligations and contracts which they have
entred into and which are backed by government guarantees

SEC. 5. The Department of Budget and Management (DBM) shall promulgate the
necessary rules and regulations for the effective implementation of this Act.

SEC. 6. Separability Clause. - If any provision of this Act or an application thereof to
any person or circumstance is held to be invalid, the other provisions of this Act, and the
application of such provision to other persons or circumstances, shall not be affected thereby.

SEC. 7. Repealing Clause. — All existing laws, orders, rules and regulations or parts
thereof deemed inconsistent with the provisions of this Act are hereby repealed or modified
thoroughly,


SEC. 8. Effectivity This Act shall take effect fifteen (15) days following the date of its

full publication in the Official Gazetteor in at lease two (2) newspapers of general circulation.

Approved,