J:illiTEENTH CONGRESS 0J:i THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
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) 
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~ENATE 
S. B. No. 2181 
Introduced by Senator TEOFISTO "TG" GUINGONA III 
EXPLANATORY NOTE 
As a general rule, savings from items specified in the General Appropriations 
Act should revert to the General Fund, which could only be expended by virtue of a 
subsequent legislation. However, pursuant to Section 25 (5), Article VI of the 1987 
Philippine Constitution, 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 Commission may be authorized by law to use such savings to augment 
any item in the General Appropriations Act (GAA) for their respective offices. 
This particular privilege granted to the aforementioned government officials, 
especially the President, has been subject to unconscionable abuses as can be seen from 
the scandal involving the fertilizer fund. It also contributes to the budget deficit. 
Moreover, the cxcrc~sc of such discretion is frequently used to usurp the po\vcr of the 
purse and subvert the will of the Legislature. 
The problem springs from the loose definition attached to the term savings, the 
unbridled discretion afforded to those who are given the privilege and the lack of 
transparency when it comes to the source of these savings and where it is transferred or 
expended. 
As transfer of appropriations accounts for about ten per cent (10%) of the budget, 
it is about time that parameters be laid down to limit the discretion afforded to those 
who possess the privilege, which until this day, remained unchecked. 
In view of the foregoing, the immediate enactment of this measure is earnestly 
sought. 
'TG" GUINGONA III 
Senator 


J:llliTEENTH CONGRESS Of THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
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) 
) 
SENATE 
S.B. No.2181 
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III A 2tl A9:55 
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Introduced by Senator TEOFISTO "TG" GUINGONA III 
AN ACT 
DEFINING THE TERM "SAVINGS" AS USED IN THE NATIONAL BUDGET AND 
PROVIDING GUIDELINES FOR ITS USE AND EXPENDITURE, AND FOR OTHER 
PURPOSES. 
Be it enacted by the Senate and the House of Representatives of the Philippines in Congress 
assembled: 
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SECTION 1. Short Title. - This Act shall be known as the "Budget Savings Act of 
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2010". 
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SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State to 
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formulate and implement a National Budget that is within the framework of 
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accountability, transparency, stability, performance and participation and which is an 
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instrument of national development, reflective of national objectives, strategies and 
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plans. 
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SEC. 3. Definition of Terms. - As used in this Act: 
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(a) "Savings" shall mean the unexpended balances of an appropriation 
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authorized in the General Appropriations Act (GAA) or unobligated 
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amount of allotment released by the Department of Budget and 
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Management (DBM), as determined by the agency budget officers and 
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certified by the Departments/Agencies, including the Senate and the 
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House of Representatives, as well as the constitutional bodies and offices 
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enjoying fiscal autonomy, resulting from the completion or final 
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discontinuance or abandonment of the work, activity or purpose for 
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which the appropriation is authorized; from appropriation/allotment 
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balances arising from unpaid compensation and related costs pertaining 
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to vacant positions and leaves of absence without pay; and from 
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appropriations balances realized from the implementation of measures 
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resulting in improved systems and efficiencies and thus enabled an 
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agency to meet and deliver the required or planned targets, programs and 
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services approved in the GAA at a lesser cost. The term however shall not 
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include unexpended portion of any re-enacted national budget; 
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(b) "Augment" shall mean the authority of the President, the Senate 
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President, the Speaker of the House of Representatives, the Chief Justice of 
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the Supreme Court, and the heads of the Constitutional Commissions to 
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transfer funds to cover deficits in any item of the regular appropriations 
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specified in the GAA for their respective offices. 
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(c) "Deficit" shall mean the insufficiency of an appropriation for a particular 
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item in the GAA, as determined by the Departments/Agencies, including 
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the Senate and the House of Representatives, as well as the constitutional 
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bodies and offices enjoying fiscal autonomy, at the end of the fiscal year, 
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resulting from unexpected increase in the cost of goods and services and 
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unforeseen conditions that makes it necessary to increase the funds to be 
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expended over and above the amount appropriated for a particular item. 
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SEC. 4. Reportorial Procedures. -
For purposes of transparency and 
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accountability, all Departments/Agencies, including the Senate and the House of 
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Representatives, as well as the constitutional bodies and offices enjoying fiscal 
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autonomy, shall submit a repo~t to the DBM at the end of every quarter as to the current 
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financial status of its appropriations, the cumulative allotments, obligations incurred or 
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liquidated, total disbursements, unliquidated obligations and unexpended balances for 
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both appropriations and allotments. The Departments/Agencies, including the Senate 
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and the House of Representatives, as well as the constitutional bodies and offices 
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enjoying fiscal autonomy, shall indicate therein if there are deficits in their budget that 
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need to be augmented or if there are savings in their particular office. The DBM shall 
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consolidate these reports and transmit such to the Committee on Finance of the Senate 
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and the Committee on Appropriations of the House of Representatives, fifteen (15) days 
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after the end of every quarter. 
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SEC. 5. Use of Savings to Augment Items in the GAA. - The report of the heads of 
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the Departments/Agencies, including the Senate and the House of Representatives, as 
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well as the constitutional bodies and offices enjoying fiscal autonomy, shall form the 
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basis for the President, the Senate President, the Speaker of the House of 
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Representatives, the Chief Justice of the Supreme Court and the heads of the 
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Constitutional Commissions to declare the existence of savings and to exercise their 
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discretion, as may be authorized by law, to augment any items in the appropriations 
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law pertaining to their respective offices: Provided, That in the absence of such 
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reportorial requirements, the savings of each Departments/Agencies, including that of 
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the Senate and the House of Representatives, except for the constitutional bodies and 
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offices enjoying fiscal autonomy, shall revert to the General Fund at the end of the fiscal 
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year and shall not thereafter be available for expenditure except by subsequent 
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legislation. 
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SEC. 6. Documentation. - The sources of savings and where it is transferred shall 
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be part of the regular reporting of the DBM. These reports shall be made readily 
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available to the public on the websites of the DBM, the Senate and the House of 
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Representatives. 
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SEC. 7. Separability. - If, for any reason, any section or provision of this Act is 
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held unconstitutional or invalid, no other section or provision shall be affected. 
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SEC. 8. Repealing clause. - All laws, decrees, executive orders, rules and 
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regulations, issuances or any part thereof inconsistent with the provisions of this Act 
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are hereby repealed or amended accordingly. 
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SEC .. 9. Effectivity. -
This Act shall take effect fifteen (15) days after its 
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publication in at least two (2) national newspapers of general circulation. 
Approved, 
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