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

NINETEENTH CONGRESS
Third Regular Session

HOUSE BILLNO. 11383

Introduced by AKBAYAN Representative Percival Cendafia

EXPLANATORY NOTE

The preparation of the annual appropriations law is a rigorous process undertaken by
the national government every year. But, and however meticulous the process of
passing the General Appropriations Act may be, augmentation of certain budgetary
allocation may be necessary. Augmentation finds support from Section 25(5), Article
Vif the Philippine Constitution which provides:

“No law shall be passed authorizing any transfer of
appropriation: however, the President, the President of
the Senate, the Speaker of the House of Representatives,
the Chief Justice of the Supreme Court, and the heads of
Constitutional Commissions may, by law, be authorized
to augment any item in the general appropriations law for
their respective offices from savings in other items of
their respective appropriations.”

This provision, generally adopted from the 1973 Constitution, was introduced to ensure
that the leeway of transferring of funds from one item to another was limited, in that
“{tJhe purpose and conditions for which funds may be transferred were specified, i.e.
transfer may be allowed for the purpose of augmenting an item and such transfer may
be made only if there are savings from another item in the appropriation of the

government branch or constitutional body.

 Demetria v. Alba, G.R. No. 71977, 27 February 1987



However, such situations of augmentation are susceptible to unscrupulous use of the
budget, devoting amounts to certain items inconsistent with the objectives for which
the annual appropriations were based. The result is a disregard of the bases and the
processes undertaken in the enactment of the General Appropriations Act. As the
Supreme Court declared in the landmark case of Araullo v. Aquino, “[ajlthough
executive discretion and flexibility are necessary in the execution of the budget, any
transfer of appropriated funds should conform to Section 25(5), Article VI of the
Constitution.”?

This proposed measure was first filed during the Fourteenth Congress by then
AKBAYAN Representative and now Senator Risa Hontiveros, and refiled by
AKBAYAN Representatives in succeeding Congresses. It seeks to regulate the proper
use of savings and sets the limits in the augmentation of budget specified in the General
Appropriations Act.

It highlights that the use of “savings” defined in this bill shall be subject to the limits
set by existing laws as well as by the General Appropriations Act. It underscores review
and approval by Congress, and the possibility of disallowing the use of “savings” if it
is shown that the use will not conform to existing guidelines, conditions, and limits.
This bill also further defines unexpended amounts that shall revert back to the General
Fund at the end of the fiscal year.

With the enactment of this bill, government efficiency and effectiveness in the use and
generation of revenues shall be promoted, which will ultimately lead to the attainment

of the goals of national development.

In view of the foregoing, the passage of this bill is

2 GR. No. 209287, 1 July 2014


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

NINETEENTH CONGRESS
Third Regular Session

House BILL No. 11389

Introduced by AKBAYAN Representative Percival Cendafia

AN ACT
DEFINING THE CONCEPT OF SAVINGS AND REGULATING THE
PROCESS OF AUGMENTATION BY THE PRESIDENT IN THE
IMPLEMENTATION OF ARTICLE VI, SECTION 25(5) OF THE
PHILIPPINE CONSTITUTION, AMENDING FOR THE PURPOSE
SECTIONS 2, 28, 39, AND 49 OF BOOK VI OF EXECUTIVE ORDER NO. 292
OR THE ADMINISTRATIVE CODE OF 1987

Be it enacted by the Senate and the House of Representatives of the Philippines in

Congress assembled:

SECTION 1. Short Title. — This Act shall be known as the “Savings and
Augmentation Act of 2025.”

SEC. 2. Declaration of Policy. — It is the policy of the State to ensure that the
Executive Branch of the Philippine Government implements the budget as specified
in the General Appropriations Act duly enacted by Congress pursuant to its
constitutional authority to prescribe all government appropriations.

SEC. 3. Definition of Terms. — Section 2, Chapter I, Book VI of Executive Order No.
292 otherwise known as the “Administrative Code of 1987” is amended to read as

follows:

“SEC. 2. Definition of Terms.—When used in this Book:

XXX


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(13) “Project” means a component of a program covering a
homogenous group of activities that results in the
accomplishment of an identifiable output.

(14) “AUGMENT” REFERS TO THE POWER TO
TRANSFER SAVINGS FROM ONE APPROPRIATION TO
COVER DEFICITS IN ANOTHER AS EXERCISED BY
THE PRESIDENT, SENATE PRESIDENT, SPEAKER OF
THE HOUSE, CHIEF JUSTICE, AND HEADS OF THE
CONSTITUTIONAL COMMISSIONS WITHIN THEIR
RESPECTIVE BRANCHES AND AGENCIES AS
PROVIDED IN THIS BOOK.

(15) “DEFERRAL” MEANS WITHHOLDING OR
DELAYING THE RELEASE OF APPROPRIATED
AMOUNTS PROVIDED FOR PROJECTS OR
ACTIVITIES.

(16) “DEFICIT” MEANS AN INSUFFICIENCY IN THE
APPROPRIATED AMOUNT FOR THE COMPLETION
OF A PARTICULAR PROGRAM, PROJECT, OR
ACTIVITY OR THE FULFILLMENT OF CURRENT
OPERATING EXPENDITURES AND CAPITAL
OUTLAYS NOT ARISING FROM CAUSES SUCH AS
OVERPRICING OR OTHER FACTORS WHICH COULD
HAVE BEEN REASONABLY FORESEEN IN ORDER TO
COMPLETE THE PROGRAM, PROJECT, OR ACTIVITY
OR FULFILL CURRENT OPERATING EXPENDITURES
AND CAPITAL OUTLAYS WITHIN THE GIVEN
APPROPRIATION SPECIFIED IN THE GENERAL
APPROPRIATIONS ACT FOR SAID PROGRAM,
PROJECT OR ACTIVITY, CURRENT OPERATING
EXPENDITURES AND CAPITAL OUTLAYS.


eI AuaR eK

(17) “SAVINGS” MEANS ANY UNEXPENDED PORTION
OR AMOUNT OF MONEY FOR AN APPROPRIATION AS
SPECIFIED IN THE GENERAL APPROPRIATIONS ACT
RESULTING FROM THE COMPLETION OF A
PROGRAM, PROJECT, OR ACTIVITY, OR
FULFILLMENT OF THE PURPOSE FOR WHICH THE
APPROPRIATION WAS SPECIFIED AT A COST BELOW
THE AMOUNT APPROPRIATED THEREFOR DUE TO
LOWER-THAN EXPECTED EXPENDITURES. THIS
SHALL NOT REFER TO UNEXPENDED AMOUNTS
RESULTING FROM THE PRESIDENT’S EXERCISE OF
THE POWER TO IMPOUND UNDER SECTION 38,
CHAPTER 5 OF BOOK VI. IN ADDITION, THIS SHALL
NOT REFER TO UNEXPENDED ITEMS IN A RE-
ENACTED BUDGET UNDER SECTION 25(7), ARTICLE
VI OF THE PHILIPPINE CONSTITUTION.”

SEC. 4. Section 28 of Chapter 4, Book VI of Executive Order No. 292 otherwise
known as the “Administrative Code of 1987” is amended to read as follows:

“SEC, 28. Reversion of Unexpended Balances of Appropriations,
Continuing — Appropriations.—Unexpended balances of
appropriations authorized in the General Appropriations Act shall
revert to the unappropriated surplus of the General Fund at the
end of the fiscal year and shall thereafter be available for
expenditure except by subsequent legislative enactment:
Provided, That appropriations for capital outlays shall remain
valid until fully spend or reverted: Provided, further, That
continuing appropriations for current operating expenditures may
be specifically recommended and approved as such in support of
projects whose effective implementation calls for multi-year
expenditure commitments: Provided, finally, That the President

may authorize the use of savings realized by an agency during a


given year to meet non-recurring expenditures in a subsequent
year UNDER GUIDELINES, CONDITIONS AND LIMITS
TO BE PRESCRIBED BY CONGRESS IN THE GENERAL
APPROPRIATIONS ACT AND SUBJECT TO ITS
REVIEW AND DISALLOWANCES IF THE USE OF
SAVINGS DOES NOT CONFORM WITH SAID
PRESCRIBED GUIDELINES, CONDITIONS, AND
LIMITS.

APPROPRIATIONS FOR CAPITAL OUTLAY SHALL IN
NO CASE BE REALIGNED FOR PERSONAL SERVICES
AND CURRENT OPERATING EXPENDITURES. The
balances of continuing appropriations shall be reviewed as part of
the annual budget preparation process and the President may
approve upon recommendation of the Secretary, the reversion of
funds no longer needed in connection with the activities funded

by said continuing appropriations.”

SEC. 5. Section 39 of Chapter 5, Book VI of Executive Order No. 292 otherwise
knowns as the “Administrative Code of 1987” is amended to read as follows:

“SEC. 39. Authority to Use Savings in Appropriations to Cover
Doficits—Except as otherwise provided in the General
Appropriations Act, any savings in the regular appropriations
authorized in the General Appropriations Act for programs and
projects of any department, officer or agency, may, with the
approval of the President, be used to cover a deficit in any other
item of the regular appropriations: Provided, That the creation of
new positions or increase of salaries shall not be allowed to be
funded from budgetary savings expect when specifically
authorized by law: Provided, further, That whenever authorized
positions are transferred from one program or project to another
within the same department, office or agency, the corresponding
amounts appropriated for personal services are also deemed


transferred, without, however, increasing the total outlay for

personal services of the department, office or agency concemed.

UNDER NO CIRCUMSTANCES SHALL SAVINGS BE
USED FOR PROGRAMS, PROJECTS, AND ACTIVITIES,
OR ANY OTHER PURPOSE NOT APPROPRIATED FOR
IN THE GENERAL APPROPRIATIONS ACT PURSUANT
TO SECTION 29(1), ARTICLE VI OF THE PHILIPPINE
CONSTITUTION. ANY ACT TO THE CONTRARY
SHALL CONSTITUTE MISUSE OF GOVERNMENT
FUNDS AND ILLEGAL EXPENDITURES AS PROVIDED
IN SECTIONS 43 AND 80 OF THIS BOOK, INCLUDING
USE OF SAVINGS ON UNPROGRAMMED
EXPENDITURES BEYOND THE LIMITS PRESCRIBED
IN THE GENERAL APPROPRIATIONS ACT. ANY USE
OF EXPENDITURES SUBJECT TO LIMITATIONS
PROVIDED IN THE GENERAL APPROPRIATIONS ACT
SHALL BE REVIEWED AND MAY BE DISALLOWED BY
CONGRESS FOR BEING MADE IN VIOLATION OF SAID
LIMITATIONS.

IN ADDITION, UNEXPENDED AMOUNTS OF ANY
LUMP-SUM APPROPRIATION MADE BY CONGRESS
SHALL UNDER NO - CIRCUMSTANCES” BE
CONSIDERED AND USED AS SAVINGS BUT SHALL
AUTOMATICALLY REVERT BACK TO THE GENERAL
FUND AT THE END OF THE FISCAL YEAR PURSUANT
TO SECTION 28 OF THIS BOOK. ANY ACT TO THE
CONTRARY SHALL LIKEWISE BE CONSIDERED
MISUSE OF GOVERNMENT FUNDS AND ILLEGAL
EXPENDITURES AS PROVIDED IN SECTIONS 43 AND
80 OF THIS BOOK.”



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SEC. 6. Section 49 of Chapter 5, Book VI of Executive Order No. 292 otherwise
known as the “Administrative Code of 1987” is amended to read as follows:

“SEC. 49. Authority to Use Savings for Certain Purposes.—
Savings in the appropriations provided in the General
Appropriations Act may be used for the settlement of the
following obligations incurred during a current fiscal year or
previous fiscal years as may be approved by the PRESIDENT
IN ACCORDANCE WITH SPECIFIC GUIDELINES,
CONDITIONS, AND LIMITATIONS THAT SHALL BE
PRESCRIBED IN THE GENERAL APPROPRIATIONS
ACT: Secretasy an - rules

Xxx”

SEC. 7. Separability Clause. — If any section or provision of this Act is declared

unconstitutional or invalid, the same shall not affect the validity and effectivity of the
other provisions and portions of this Act.

SEC. 8. Repealing Clause. - This Act amends Section 2 of Chapter I, Section 28 of
Chapter 4, and Sections 39 and 49 of Chapter 5, Book VI of Executive Order No. 292.
All other laws, decrees, executive orders, letters or instructions, letters of
implementation, rules and regulations or parts thereof inconsistent with the provisions
of this Act are hereby repealed or modified accordingly.

SEC. 9. 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.

Approved,