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

Sixteenth Congress
First Regular Session

2256

House Bill No.

Introduced by AKBAYAN Representatives Ibarra Gutierrez ILI and Walden Bello

EXPLANATORY NOTE,

‘The annual appropriations law, having gone through review and approval by Congress,
should be followed religiously. 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) of the Philippine

Constitution which provides:

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

Such situations of augmentation often result to unscrupulous use of the budget, devoting
amounts to certain items inconsistent with the objectives for which the annual
appropriations was based. The result is a disregard of the bases and the processes
undertaken in the enactment of the General Appropriations Act.

‘This proposed Savings and Augmentation Act of 2013 is an updated and refined version
of House Bill No, 2923, filed by AKBAYAN Representatives Walden Bello and Kaka
Bag-ao in the Fifteenth Congress. It secks to regulate the proper use of savings and to set

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 ser
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.
The objective of this proposed legislation is to promote Government efficiency and
effectiveness in the use and generation of revenues, which will surely lead to the

attainment of the goals of national development.

In view of the foregoing, the passage of this bill is earnestly sought.

a

Walden Bello



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

Sixteenth Congress
First Regular Session

2256

House Bill No.

Introduced by AKBAYAN Representatives Ibarra Gutierrez II and Walden Bello

AN ACT DEFINING THE CONCEPT OF SAVINGS
AND REGULATING THE PROCESS OF AUGMENTATION BY THE
PRESIDENT IN IMPLEMENTATION OF ARTICLE VI, SECTION 25 (5) OF
THE PHILIPPINE CONSTITUTION

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

SECTION 1. Title —This Act shall be known as the “Savings and Augmentation Act of
2013."

SECTION 2. Declaration of Policy—It is the policy of the State to ensue 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.

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

to read as follows:
“Section 2. Definition of Terms—When used in this Book:

1. “Appropriation” refers to an authorization made by

law or other legislative enactment, directing payment out


Sewanee ne

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of government funds unders specified conditions or for
specified purposes.

2. “Allotment” refers to an authorization issued by the
Department of Budget and Management to an agency,
which allows it to incur obligation for specified amounts
contained in a legislative appropriation,

3 01

expenditures and capital outlays.

5. “Budgee” refers to a financial plan required to be
prepared pursuant to Section 16(1), Article VIII of the
Philippine Constitution, reflective of national objectives,

strategies and programs.

6. “Current operating expenditures” refers to

appropriations for the purchase of goods and services for


et aeeeD

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current consumption or for benefits expected to terminate

within the fiscal year.

7. “Capital outlay” ox “capital expenditures” refers to an
appropriation for the purchase of goods and services, the
benefits of which extend beyond the fiscal year and which
add to the assets of the Government, including
investments in the capital of government-owned or —
controlled corporations and their subsidiaries.

8. “Continuing appropriation” refers to an appropriation
available to support obigations for a specified purpose or
project, even when these obligations are incurred beyond
the budget year.

9. “Defeat” means withholding or delaying the
release of appropriated amounts provided for projects or

activities.

10. “Eixpeced suite” means service, product, ot benefit
that will accrue to the public, estimated in terms of

performance measures or targets.

11. “Fiscal year” refers to the period beginning with the
first day of January and ending with the thirty-first day of

December of each calendat year.

12, The “Goverment” means the National
Government, including the Executive, the Legislative and
the Judicial branches, and the Constitutional

Commissions.

13. “Department and agency? and “department or agency?
include all departments, bureaus, offices, boards,


commissions, courts, tvibunals, councils, authorities,
administrations, centers, institutes, state colleges and
universities, and all other establishments and
instrumentalities of the National Government as defined

in the preceding paragraph.

14, “Obligation” refers to an amount committed to be
paid by the Government for any lawful act made by an

authorized officer for and in behalf of the Government.

15, “Program” refers to the functions and activities
necessary for the performance of a major purpose for

which a Government agency is established.

16, “Project? means a component of a  progeam
covering a homogenous group of activities that results in

the accomplishment of an identifiable output.

17. SSaninge” means any unexpended portion or
General Appropriations Act resulting from. the completior
ofa program, project ot activity or fulfilment of the
purpose for which the appropriation was specified at_a
sost_below the amount appropriated therefor due to

amount the President's
the er under
Chapter 5 of Book VI di is shall

c-enacted budget under Section

unexpended items in a

25(7), Article VI of the Philippine Constitution.”

SECTION 4. Section 28 of Chapter 5, Book VI of Executive Order No. 292 otherwise

known as the “Administrative Code of 1987” is hereby amended to read as follows:


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“Seetion 28, Reversion of unexpended balances of appropriations,
continuing appropriations —Unexpended balances of
appropriations authorized in the General Appropriations
Act shall revert to the unappropriated suxplus 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 und
fully spent or reverted: Provided, finther, 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, finaly,
‘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

elicalloga_sinalieneand tate be pseictbae by

pres: ¢ General Appr subje:
evi is cs css ings docs
monte b saeco giiea iti
anc limits,

expenditures. The balances of continuing appropriations
shall be reviewed us patt 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.”

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


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“Seation 39, Authority 10 mse savings in appropriations to cover
deficits Except as otherwise provided in the General
Appropriations Act, any savings in the regular
appropriations authorized in the General Appropriations
‘Act for progeams and projects of any department, officer
or agency, may, with the approval of the President, be
used to cover @ 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 ot
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 concerned.

not appropriated for in the General Appropriations Act
wursuant to Section 29(1), Article VI of the Philippine
Constitution, Any act to_the contrary shall_constitute
rovidled in Sections 80 and 43 of this “

of savings on unprogrammec expenditures beyond the
limits prescribed in the General Appropriations Act.
addition, any use of expenditures subject to limitation:
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

wriation made fer hall under ni


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circumstances he 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. An}

act to the contrary shall likewise be considered misuse of
government funds and illegal expenditures as provided in

Sections 80 and 43 of this Book.”

SECTION 6, Section 49 of Chapter 5, Book VI of Executive Order No, 292 otherwise

known as the “Administrative Code of 1987" is hereby arnended (o read as follows:

“Section 49. Authority to se savings Jor 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 yeats as may be approved by the
Presiclent ip nce with cific _guideliens
conditions and limitations that shall be prescribed in th

General Appropriations Act.”

SECTION 7. Separability Clause —If any provision of this Act, or any part thereof,
is declared unconstitutional, the same shall not affect the validity and effectivity of the

other provisions and postions of this Act

SECTION 8. Repealing Clause —his Act amends Section 2, Chapter I, and Sections
28, 39 and 49 of Chapter 5, of Book VI or Executive Order No. 292 otherwise known as
the “Administrative Code of 1987” All other laws, decrees, executive orders, letters or
instructions, letters of implementation, rules and regulations or parts thereof inconsistent
with the provisons of this Act are hereby repealed, modified, superseded, or amended,

accordingly.

SECTION 9, Effectivity Clause—This Act shall take effect fifteen (15) days after its
complete publication in the Oficial Gagette or in at least two (2) national newspapers of

general circulation, whichever comes caulier


Approved,